Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

x
FORM 10-K
☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended December 31, 2018

2021
OR

o☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                 to

Commission file number 001-09818

ALLIANCEBERNSTEIN HOLDING L.P.
(Exact name of registrant as specified in its charter)

Delaware13-3434400
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
1345 Avenue of the Americas, New York, N.Y.501 Commerce Street, Nashville, TN1010537203
(Address of principal executive offices)(Zip Code)

Registrant’s telephone number, including area code: (212) 969-1000

(615) 622-0000
Securities registered pursuant to Section 12(b) of the Act:

Title of Each ClassTrading SymbolName of each exchangeEach Exchange on which registeredWhich Registered
units representing assignmentsUnits Rep. Assignments of beneficial ownershipBeneficial Ownership of limited partnership interestsLP Interests in AB Holding ("Units")ABNew York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes x☒  No o☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes o☐  No x☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes x☒ No o☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes x☒  No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  o

☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer x
☒
Accelerated filer o
☐
Non-accelerated filer o
☐
Smaller reporting company o
☐
Emerging growth company o
☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.   Yes ☒  No ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes o☐  No x☒

The aggregate market value of the units representing assignments of beneficial ownership of limited partnership interests held by non-affiliates computed by reference to the price at which such units were last sold on the New York Stock Exchange as of June 30, 20182021 was approximately $2.6$4.2 billion.

The number of units representing assignments of beneficial ownership of limited partnership interests outstanding as of December 31, 20182021 was 96,658,278.99,271,727. (This figure includes 100,000 general partnership units having economic interests equivalent to the economic interests of the units representing assignments of beneficial ownership of limited partnership interests.)

DOCUMENTS INCORPORATED BY REFERENCE

This Form 10-K does not incorporate any document by reference.


Table of Contents

Table of Contents
Table of Contents
ii
Part I
Item 1.
Business
1ii
1
1618
2629
Properties
29
2729
2729
2830
Selected Financial Data
32
AB
31
Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
33
33
3334
34
3537
AB
AB39
37
6159
6159
6159
6361
AB
79
Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
128121
128121
129122
130123
138
158164
163168
165169
166170
168172
169173


i

2021 Annual Reporti
Glossary
Table of Certain Defined TermsContents

Glossary of Certain Defined Terms
“AB” – AllianceBernstein L.P. (Delaware limited partnership formerly known as Alliance Capital Management L.P., “Alliance Capital”), the operating partnership, and its subsidiaries and, where appropriate, its predecessors, AB Holding and ACMC, Inc. and their respective subsidiaries.
AB
AllianceBernstein L.P. (Delaware limited partnership formerly known as Alliance Capital Management L.P., “Alliance Capital”), the operating partnership, and its subsidiaries and, where appropriate, its predecessors, AB Holding and ACMC, Inc. and their respective subsidiaries.
AB HoldingAllianceBernstein Holding L.P. (Delaware limited partnership).
AB Holding Partnership Agreementthe Amended and Restated Agreement of Limited Partnership of AB Holding, dated as of October 29, 1999 and as amended February 24, 2006.
AB Holding Unitsunits representing assignments of beneficial ownership of limited partnership interest in AB Holding.
AB Partnership Agreementthe Amended and Restated Agreement of Limited Partnership of AB, dated as of October 29, 1999 and as amended February 24, 2006.
AB Unitsunits of limited partnership interest in AB.
AUMAB's Assets Under Management.
AXA
AXA S.A. (société anonyme organized under the laws of France) is the holding company for the AXA Group, a worldwide leader in financial protection.
Bernstein TransactionAB's acquisition of the business and assets of SCB Inc., formerly known as Sanford C. Bernstein Inc., and the related assumption of the liabilities of that business, completed on October 2, 2000.
Equitable AmericaEquitable Financial Insurance Company of America (f/k/a MONY Life Insurance Company of America, an Arizona corporation), a subsidiary of Equitable Holdings.

“AB Holding” – AllianceBernstein Holding L.P. (Delaware limited partnership).
Equitable FinancialEquitable Financial Life Insurance Company (New York stock life insurance company), a subsidiary of Equitable Holdings.
Equitable Holdings or EQHEquitable Holdings, Inc. (Delaware corporation) and its subsidiaries other than AB and its subsidiaries.
Exchange Actthe Securities Exchange Act of 1934, as amended.
ERISAthe Employee Retirement Income Security Act of 1974, as amended.
GAAPU.S. Generally Accepted Accounting Principles.
General PartnerAllianceBernstein Corporation (Delaware corporation), the general partner of AB and AB Holding and a subsidiary of Equitable Holdings, and, where appropriate, ACMC, LLC, its predecessor.
Investment Advisers Actthe Investment Advisers Act of 1940, as amended.
Investment Company Actthe Investment Company Act of 1940, as amended.
NYSEthe New York Stock Exchange, Inc.
PartnershipsAB and AB Holding together.
SECthe United States Securities and Exchange Commission.
Securities Actthe Securities Act of 1933, as amended.


“AB Holding Partnership Agreement” – the Amended and Restated Agreement
iiAllianceBernstein
Table of Limited Partnership of AB Holding, dated as of October 29, 1999 and as amended February 24, 2006.Contents

Part I
“AB Holding Units” – units representing assignments of beneficial ownership of limited partnership interests in AB Holding.

“AB Partnership Agreement” – the Amended and Restated Agreement of Limited Partnership of AB, dated as of October 29, 1999 and as amended February 24, 2006.

“AB Units” – units of limited partnership interest in AB.

“AUM” – AB's assets under management.

“AXA” – AXA (société anonyme organized under the laws of France) is the holding company for the AXA Group, a worldwide leader in financial protection. AXA operates primarily in Europe, North America, the Asia/Pacific regions and, to a lesser extent, in other regions, including the Middle East, Africa and Latin America. AXA has five operating business segments: Life and Savings, Property and Casualty, International Insurance, Asset Management and Banking.

“AXA Equitable” – AXA Equitable Life Insurance Company (New York stock life insurance company), a subsidiary of AXA Equitable Holdings, and its subsidiaries other than AB and its subsidiaries.

“AXA Equitable Holdings” or “EQH” – AXA Equitable Holdings, Inc. (Delaware corporation), a 59.2%-owned subsidiary of AXA S.A., and its subsidiaries other than AB and its subsidiaries.

“Bernstein Transaction” – AB's acquisition of the business and assets of SCB Inc., formerly known as Sanford C. Bernstein Inc., and the related assumption of the liabilities of that business, completed on October 2, 2000.

“Exchange Act” – the Securities Exchange Act of 1934, as amended.

“ERISA” – the Employee Retirement Income Security Act of 1974, as amended.

"GAAP" – U.S. Generally Accepted Accounting Principles

“General Partner” – AllianceBernstein Corporation (Delaware corporation), the general partner of AB and AB Holding and a subsidiary of AXA Equitable Holdings, and, where appropriate, ACMC, LLC, its predecessor.

“Investment Advisers Act” – the Investment Advisers Act of 1940, as amended.

“Investment Company Act” – the Investment Company Act of 1940, as amended.

“NYSE” – the New York Stock Exchange, Inc.

“Partnerships” – AB and AB Holding together.

“SEC” – the United States Securities and Exchange Commission.

“Securities Act” – the Securities Act of 1933, as amended.



PART I

Item 1. Business

The words “we” and “our” in this Form 10-K refer collectively to AB Holding and AB and its subsidiaries, or to their officers and employees. Similarly, the words “company” and “firm” refer to both AB Holding and AB. Where the context requires distinguishing between AB Holding and AB, we identify which company is being discussed. Cross-references are in italics.

We use “global” in this Form 10-K to refer to all nations, including the United States; we use “international” or “non-U.S.” to refer to nations other than the United States.

We use “emerging markets” in this Form 10-K to refer to countries included in the Morgan Stanley Capital International (“MSCI”) emerging markets index, which are, as of December 31, 2018,2021: Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia, Korea, Kuwait, Malaysia, Mexico, Pakistan, Peru, Philippines, Poland, Qatar, Russia, Saudi Arabia, South Africa, Taiwan, Thailand, Turkey and the United Arab Emirates.

Clients

We provide research, diversified investment management, research and related services globally to a broad range of clients through our three buy-side distribution channels: Institutions, Retail and Private Wealth Management, and our sell-side business, Bernstein Research Services. See “Distribution Channels” in this Item 1 for additional information.

As of December 31, 2018, 20172021, 2020 and 2016,2019, our AUM were approximately $516$779 billion, $554$686 billion and $480$623 billion, respectively, and our net revenues as of December 31, 2018, 2017 and 2016 were approximately $3.4$4.4 billion, $3.3$3.7 billion and $3.0$3.5 billion, respectively.AXA, EQH (our parent company) and their respectiveits subsidiaries, whose AUM consist primarily of fixed income investments, together constituteis our largest client. Our EQH affiliates represented approximately 24%17%, 23%19% and 24%18% of our AUM as of December 31, 2018, 20172021, 2020 and 2016,2019, and we earned approximately 5%3% of our net revenues from services we provided to our affiliatesthem in each of those years.
Assets Under
Management (AUM)
($ billions)
Net Revenues
($ billions)
ab-20211231_g1.jpg
ab-20211231_g2.jpg
See “Distribution Channels” below and “Assets Under Management” and “Net Revenues” in Item 7 for additional information regarding our AUM and net revenues.

Generally, we are compensated for our investment services on the basis of investment advisory and services fees calculated as a percentage of AUM. For additional information about our investment advisory and services fees, including performance-based fees, see “Risk Factors” in Item 1A and “Net Revenues – Investment Advisory and Services Fees” in Item 7.

2021 Annual Report1
Table of Contents
Part I
Research

Our high-quality, in-depth research is the foundation of our business. We believe that our global team of research professionals, whose disciplines include economic, fundamental equity, fixed income and quantitative research, gives us a competitive advantage in achieving investment success for our clients. We also have experts focused on multi-asset strategies, wealth management, environmental, social and governance (“ESG”), and alternative investments.

Corporate Responsibility
At AB, we pursue insight that unlocks opportunity. This is our firm's purpose. Together with our firm's mission and values, which we have described below, our purpose forms the foundation of responsibility at AB.
AB's mission is to help our clients define and achieve their investment goals, explicitly stating what we do each day to unlock opportunity for our clients. As an active manager, our differentiated insights drive our ability to deliver alpha and design innovative investment solutions. ESG and climate issues are key elements in forming insights and in presenting potential risks and opportunities that can impact the performance of the companies and issuers in which we invest and the portfolios we build.
Our values provide a framework for the behaviors and actions that deliver on our purpose and mission. Values align our actions. Each value emerges from our firm's character, yet also is aspirational, and each value challenges us to become a better, more responsible version of AB:
•We invest in each other, meaning that we have a strong organizational culture in which diversity is celebrated and mentorship is critical to our success.
•We strive for distinctive insight, meaning that we collaboratively identify creative solutions to clients' economic, ESG and climate-related investment challenges through our expertise in a wide range of investment disciplines.
•We speak with courage and conviction, which informs how we engage with our AB colleagues and issuers.
•We act with integrity, which is the bedrock of our relationships and drives us to avoid activities that could create potential conflicts of interest or distract us from our singular focus to provide asset management and research to our clients.
As noted above, we consistently challenge ourselves to become a better version of AB. This means, in part, giving back to the communities in which we work through our firm-wide philanthropic initiative, AB Gives Back, and reducing our environmental footprint by increasing our use of “green buildings,” such as our new corporate headquarters in Nashville, Tennessee. Additionally, by promoting diversity and inclusion, we are afforded different perspectives and ways of thinking, which can lead to better outcomes for our clients (See Diversity and Inclusion below in this Item 1).
Also, striving to be more responsible gives us a richer perspective for evaluating other companies. As longtime fundamental investors with a strong research heritage, we consider ESG factors in various processes. This helps us make fully informed risk/return assessments and draw insightful investment conclusions. Our investors — research analysts and portfolio managers — understand the companies and industries they cover in-depth. This positions them well to determine which ESG issues are material to particular companies, to determine the financial impact of an ESG issue and to incorporate that insight into their cash-flow, earnings and credit models. And, we continue to invest in technology and innovation to further enable our investment teams to formalize their ESG evaluations and share insights from our engagements with other companies.
Additionally, AB has prioritized our employees' health and welfare throughout the COVID-19 pandemic while ensuring that our firm has continued to meet our fiduciary obligations and provide exceptional client service and thoughtful investment advice. Furthermore, COVID-19 is a prominent theme in engagement: it not only impacts business models but also highlights corporate ESG practices. We are advocating that issuers be responsible corporate citizens, and we are working to better understand opportunities and threats, including supply chain disruptions and inflationary pressures, fueled by the pandemic.
We provide additional information in this regard in our corporate responsibility report, which is entitled "Advancing Responsible Investing" and can be found under “Responsibility - Overview” on www.alliancebernstein.com.
2AllianceBernstein
Table of Contents
Part I
Investment Services

OurWe provide a broad range of investment services includes:with expertise in:
•Actively-managed equity strategies, with global and regional portfolios across capitalization ranges, concentration ranges and investment strategies, including value, growth and core equities;
•Actively-managed equity strategies, with global and regional portfolios across capitalization ranges, concentration ranges and investment strategies, including value, growth and core equities;
•Actively-managed traditional and unconstrained fixed income strategies, including taxable and tax-exempt strategies;
•Passive management, including index and enhanced index strategies;
•
Alternative investments, including hedge funds, fund of funds and private equity (e.g., direct lending); and
•Multi-asset solutions and services, including dynamic asset allocation, customized target-date funds and target-risk funds.
•Actively-managed traditional and unconstrained fixed income strategies, including taxable and tax-exempt strategies;

•Alternative investments, including hedge funds, fund of funds, direct lending, real estate and private equity;
Our•Multi-asset solutions and services, span various investment disciplines, including market capitalization (e.g., large-, mid-dynamic asset allocation, customized target-date funds and small-cap equities), term (e.g., long-, intermediate-target-risk funds; and short-duration debt securities),
•Some passive management, including index and geographic location (e.g., U.S., international, global, emerging markets, regional and local), in major markets around the world.




enhanced index strategies.
Our AUM by client domicile and investment service as of December 31, 2018, 20172021, 2020 and 20162019 were as follows:

AUM by Client Domicile
($ in billions)
AUM by Investment Service
($ in billions)
ab-20211231_g3.jpg
ab-20211231_g4.jpg
By Client Domicile ($ in billions):
2021 Annual Report3
Table of Contents
aumcharts.jpgPart I

Distribution Channels
Institutions
We offer to our institutional clients, which include private and public pension plans, foundations and endowments, insurance companies, central banks and governments worldwide, and EQH and its subsidiaries, separately-managed accounts, sub-advisory relationships, structured products, collective investment trusts, mutual funds, hedge funds and other investment vehicles (“Institutional Services”).
We manage the assets of our institutional clients pursuant to written investment management agreements or other arrangements, which generally are terminable at any time or upon relatively short notice by either party. In general, our written investment management agreements may not be assigned without the client's consent. For information about our institutional investment advisory and services fees, including performance-based fees, see “Risk Factors” in Item 1A and “Net Revenues – Investment Advisory and Services Fees” in Item 7.
EQH and its subsidiaries constitute our largest institutional client. EQH and its subsidiaries combined AUM accounted for approximately 25%, 29% and 28% of our institutional AUM as of December 31, 2021, 2020 and 2019, respectively, and approximately 18%, 18% and 17% of our institutional revenues for 2021, 2020 and 2019, respectively. No single institutional client other than EQH and its respective subsidiaries accounted for more than approximately 2% of our net revenues for the year ended December 31, 2021.
As of December 31, 2021, EQH and its subsidiaries combined AUM accounted for:
Approximately

25%
of our institutional AUM.
Approximately

18%
of our institutional revenues.
By Investment Service ($ in billions):
EQH and Subsidiaries as a % of our Institutional AUMEQH and Subsidiaries as a % of our Institutional Revenues
ab-20211231_g5.jpg
ab-20211231_g6.jpg
aumcharts2.jpg
4AllianceBernstein
Table of Contents

Part I
Distribution Channels

Institutions

We offer to our institutional clients, which include private and public pension plans, foundations and endowments, insurance companies, central banks and governments worldwide, and affiliates such as AXA, EQH and their respective subsidiaries, separately-managed accounts, sub-advisory relationships, structured products, collective investment trusts, mutual funds, hedge funds and other investment vehicles (“Institutional Services”).

We manage the assets of our institutional clients pursuant to written investment management agreements or other arrangements,  which generally are terminable at any time or upon relatively short notice by either party. In general, our written investment management agreements may not be assigned without the client's consent. For information about our institutional investment advisory and services fees, including performance-based fees, see “Risk Factors” in Item 1A and “Net Revenues – Investment Advisory and Services Fees” in Item 7.

AXA, EQH and their respective subsidiaries together constitute our largest institutional client. Their combined AUM accounted for approximately 37%, 34% and 35% of our institutional AUM as of December 31, 2018, 2017 and 2016, respectively, and approximately 27%, 25% and 28% of our institutional revenues for 2018, 2017 and 2016, respectively. No single institutional client other than AXA or EQH and their subsidiaries accounted for more than approximately 1% of our net revenues for the year ended December 31, 2018.


As of December 31, 2018, 20172021, 2020 and 2016,2019, Institutional Services represented approximately 48%43%, 48%46% and 50%45%, respectively, of our AUM, and the fees we earned from providing these services represented approximately 13%, 14% and 14%, respectively, of our net revenues for each of those years. Our AUM and revenues are as follows:

Institutional Services Assets Under Management
(by Investment Service)

 December 31, % Change
 2018 2017 2016 2018-17 2017-16
 (in millions)    
Equity Actively Managed:         
U.S.$9,629
 $10,521
 $8,792
 (8.5)% 19.7 %
Global & Non-US23,335
 22,577
 18,215
 3.4
 23.9
Total32,964
 33,098
 27,007
 (0.4) 22.6
Equity Passively Managed(1):
         
U.S.17,481
 18,515
 16,135
 (5.6) 14.8
Global & Non-US3,174
 3,521
 3,467
 (9.9) 1.6
Total20,655
 22,036
 19,602
 (6.3) 12.4
Total Equity53,619
 55,134
 46,609
 (2.7) 18.3
Fixed Income Taxable:         
U.S.96,913
 103,073
 97,610
 (6.0) 5.6
Global & Non-US51,156
 60,233
 52,598
 (15.1) 14.5
Total148,069
 163,306
 150,208
 (9.3) 8.7
Fixed Income Tax-Exempt:         
U.S.1,046
 1,051
 1,819
 (0.5) (42.2)
Global & Non-US—
 —
 —
 —
 —
Total1,046
 1,051
 1,819
 (0.5) (42.2)
Fixed Income Passively Managed(1):
         
U.S.73
 66
 1,305
 10.6
 (94.9)
Global & Non-US15
 20
 15
 (25.0) 33.3
Total88
 86
 1,320
 2.3
 (93.5)
Total Fixed Income149,203
 164,443
 153,347
 (9.3) 7.2
Other(2):
         
U.S.5,024
 5,258
 3,831
 (4.5) 37.2
Global & Non-US38,433
 44,442
 35,477
 (13.5) 25.3
Total43,457
 49,700
 39,308
 (12.6) 26.4
Total:         
U.S.130,166
 138,484
 129,492
 (6.0) 6.9
Global & Non-US116,113
 130,793
 109,772
 (11.2) 19.1
Total$246,279
 $269,277
 $239,264
 (8.5) 12.5
Affiliated$90,395
 $91,903
 $82,721
 (1.6) 11.1
Non-affiliated155,884
 177,374
 156,543
 (12.1) 13.3
Total$246,279
 $269,277
 $239,264
 (8.5) 12.5

(1)

Includes index and enhanced index services.
Institutional Services Assets Under Management
(by Investment Service)

Years Ended December 31% Change
2021202020192021-202020-19
(in millions)
Equity:
Equity Actively Managed$73,726 $60,067 $44,628 22.7 %34.6 %
Equity Passively Managed(1)
28,995 27,873 25,300 4.0 10.2 
Total Equity102,721 87,940 69,928 16.8 25.8 
U.S.47,409 41,241 35,210 15.0 17.1 
Global & Non-US55,312 46,699 34,718 18.4 34.5 
Total Equity102,721 87,940 69,928 16.8 25.8 
Fixed Income:
Fixed Income Taxable155,940 164,048 157,717 (4.9)4.0 
Fixed Income Tax-Exempt1,108 1,271 1,209 (12.8)5.1 
Fixed Income Passively Managed(1)
224 84 89 166.7 (5.6)
Total Fixed Income157,272 165,403 159,015 (4.9)4.0 
U.S.110,312 116,833 108,714 (5.6)7.5 
Global & Non-US46,960 48,570 50,301 26.1 9.6 
Total Fixed Income157,272 165,403 159,015 (4.9)4.0 
Alternatives/Multi-Asset Solutions(2):
U.S.7,697 6,104 5,568 26.1 9.6 
Global & Non-US69,390 56,151 48,179 23.6 16.5 
Total Alternatives/Multi-Asset Solutions77,087 62,255 53,747 23.8 15.8 
Total:
U.S.165,418 164,178 149,492 0.8 9.8 
Global & Non-US171,662 151,420 133,198 13.4 13.7 
Total$337,080 $315,598 $282,690 6.8 11.6 
Affiliated - EQH84,096 91,396 78,506 (8.0)16.4 
Non-affiliated(3)
252,984 224,202 204,184 12.8 9.8 
Total$337,080 $315,598 $282,690 6.8 11.6 
(1)Includes index and enhanced index services.
(2)Includes certain multi-asset solutions and services not included in equity or fixed income services.
(3)As of 12/31/2021, AXA is no longer considered an affiliated party, as such, AXA-related AUM has been reclassified to non-affiliated in 2020 and 2019.
(2)2021 Annual ReportIncludes certain multi-asset solutions and services and certain alternative investments.5

Table of Contents
Revenues from Institutional Services
(by Investment Service)

Part I
 Years Ended December 31, % Change
 2018 2017 2016 2018-17 2017-16
 (in thousands)    
Equity Actively Managed:         
U.S.$60,465
 $53,352
 $49,369
 13.3 % 8.1 %
Global & Non-US103,763
 88,676
 75,815
 17.0
 17.0
Total164,228
 142,028
 125,184
 15.6
 13.5
Equity Passively Managed(1):
         
U.S.3,713
 3,721
 2,964
 (0.2) 25.5
Global & Non-US1,880
 1,882
 2,345
 (0.1) (19.7)
Total5,593
 5,603
 5,309
 (0.2) 5.5
Total Equity169,821
 147,631
 130,493
 15.0
 13.1
Fixed Income Taxable:         
U.S.102,356
 107,262
 101,874
 (4.6) 5.3
Global & Non-US106,314
 112,294
 111,602
 (5.3) 0.6
Total208,670
 219,556
 213,476
 (5.0) 2.8
Fixed Income Tax-Exempt:         
U.S.1,217
 1,989
 2,591
 (38.8) (23.2)
Global & Non-US—
 —
 —
 —
 —
Total1,217
 1,989
 2,591
 (38.8) (23.2)
Fixed Income Passively Managed(1):
         
U.S.49
 202
 322
 (75.7) (37.3)
Global & Non-US28
 16
 1
 75.0
 1,500.0
Total77
 218
 323
 (64.7) (32.5)
Fixed Income Servicing(2):
         
U.S.12,708
 13,597
 12,718
 (6.5) 6.9
Global & Non-US—
 (14) 1,530
 (100.0) (100.9)
Total12,708
 13,583
 14,248
 (6.4) (4.7)
Total Fixed Income222,672
 235,346
 230,638
 (5.4) 2.0
Other(3):
         
U.S.52,131
 63,192
 34,577
 (17.5) 82.8
Global & Non-US33,530
 38,153
 25,162
 (12.1) 51.6
Total85,661
 101,345
 59,739
 (15.5) 69.6
          
Total Investment Advisory and Services Fees:         
U.S.232,639
 243,315
 204,415
 (4.4) 19.0
Global & Non-US245,515
 241,007
 216,455
 1.9
 11.3
Consolidated company-sponsored investment funds(372) (8,717) 27
 n/m
 n/m
 477,782
 475,605
 420,897
 0.5
 13.0
Distribution Revenues757
 1,047
 684
 (27.7) 53.1
Shareholder Servicing Fees529
 488
 479
 8.4
 1.9
Total$479,068
 $477,140
 $422,060
 0.4
 13.1
Affiliated$130,766
 $120,925
 $116,392
 8.1
 3.9
Non-affiliated348,302
 356,215
 305,668
 (2.2) 16.5
Total$479,068
 $477,140
 $422,060
 0.4
 13.1

(1)

Includes index and enhanced index services.
Revenues from Institutional Services
(by Investment Service)

Years Ended December 31% Change
2021202020192021-202020-19
(in thousands)
Equity:
Equity Actively Managed$240,049 $170,802 $160,421 40.5 %6.5 %
Equity Passively Managed(1)
6,119 5,851 5,838 4.6 0.2 
Total Equity246,168 176,653 166,259 39.4 6.3 
U.S.97,522 69,795 66,098 39.7 5.6 
Global & Non-US148,646 106,858 100,161 39.1 6.7 
Total Equity246,168 176,653 166,259 39.4 6.3 
Fixed Income:
Fixed Income Taxable199,866 194,026 204,087 3.0 (4.9)
Fixed Income Tax-Exempt1,356 1,355 1,309 0.1 3.5 
Fixed Income Passively Managed(1)
105 82 107 28.0 (23.4)
Fixed Income Servicing(2)
14,738 14,108 13,215 4.5 6.8 
Total Fixed Income216,065 209,571 218,718 3.1 (4.2)
U.S.124,004 118,924 118,345 4.3 0.5 
Global & Non-US92,061 90,647 100,373 1.6 (9.7)
Total Fixed Income216,065 209,571 218,718 3.1 (4.2)
Alternatives/Multi-Asset Solutions(3):
U.S.64,646 52,222 54,582 23.8 (4.3)
Global & Non-US59,179 73,354 39,405 (19.3)86.2 
Total Alternatives/Multi-Asset Solutions123,825 125,576 93,987 (1.4)33.6 
Total Investment Advisory and Services Fees:
U.S.286,172 240,941 239,025 18.8 0.8 
Global & Non-US299,886 270,859 239,939 10.7 12.9 
Total586,058 511,800 478,964 14.5 6.9 
Distribution Revenues474 588 704 (19.4)(16.5)
Shareholder Servicing Fees485 526 476(7.8)10.5 
Total$587,017 $512,914 $480,144 14.4 6.8 
Affiliated - EQH105,415 90,101 82,413 17.0 9.3 
Non-affiliated(4)
481,602 422,813 397,731 13.9 6.3 
Total$587,017 $512,914 $480,144 14.4 6.8 
(1)Includes index and enhanced index services.
(2)Fixed Income Servicing includes advisory-related services fees that are not based on AUM, including derivative transaction fees, capital purchase program-related advisory services and other fixed income advisory services.
(3)Includes certain multi-asset solutions and services not included in equity or fixed income services.
(4)As of 12/31/2021, AXA is no longer considered an affiliated party, as such, AXA-related AUM has been reclassified to non-affiliated in 2020 and 2019.
(2)6Fixed Income Servicing includes advisory-related services fees that are not based on AUM, including derivative transaction fees, capital purchase program-related advisory services and other fixed income advisory services.AllianceBernstein
(3)Includes certain multi-asset solutions and services and certain alternative services.

Table of Contents
Part I
Retail

We provide investment management and related services to a wide variety of individual retail investors both in the U.S. and internationally,globally through retail mutual funds we sponsor, mutual fund sub-advisory relationships, separately-managed account programs (see below), and other investment vehicles (“Retail Products and Services”).

We distribute our Retail Products and Services through financial intermediaries, including broker-dealers, insurance sales representatives, banks, registered investment advisers and financial planners. These products and services include open-end and closed-end funds that are either (i) registered as investment companies under the Investment Company Act (“U.S. Funds”), or (ii) not registered under the Investment Company Act and generally not offered to U.S. persons (“Non-U.S. Funds” and, collectively with the U.S. Funds, “AB Funds”). They also include separately-managed account programs, which are sponsored by financial intermediaries and generally charge an all-inclusive fee covering investment management, trade execution, asset allocation, and custodial and administrative services. In addition, we provide distribution, shareholder servicing, transfer agency services and administrative services for our Retail Products and Services. See “Net Revenues – Investment Advisory and Services Fees” in Item 7 for information about our retail investment advisory and services fees. See Note 2 to AB’s consolidated financial statements in Item 8 for a discussion of the commissions we pay to financial intermediaries in connection with the sale of open-end AB Funds.

Fees paid by the U.S. Funds are reflected in the applicable investment management agreement, which generally must be approved annually by the boardsboard of directors or trustees of those funds, including by a majority vote of the independent directors or trustees. Increases in these fees must be approved by fund shareholders; decreases need not be, including any decreases implemented by a fund’s directors or trustees. In general, each investment management agreement with the U.S. Funds provides for termination by either party,at any time, upon 60 days’ notice.

Fees paid by Non-U.S. Funds are reflected in management agreements that continue until they are terminated. Increases in these fees generally must be approved by the relevant regulatory authority, depending on the domicile and structure of the fund, and Non-U.S. Fund shareholders must be given advance notice of any fee increases.

The mutual funds we sub-advise for AXA, EQH and their respectiveits subsidiaries together constitute our largest retail client. TheyEQH and its subsidiaries accounted for approximately 19%, 19% and 21%14% of our retail AUM as of December 31, 2018, 20172021, 2020 and 2016, respectively,2019 and approximately 4% of our retail net revenues in each of those years.

Certain subsidiaries of AXA and EQH, including AXA Advisors, LLC (“AXA Advisors”), were responsible for approximately 1%, 1% and 2% of totalour retail net revenues for the years ended December 31, 2021, 2020 and 2019, respectively.
HSBC was responsible for approximately 4%, 6% and 14% of our open-end mutual fund sales of shares of open-end AB Funds in 2018, 20172021, 2020 and 2016,2019, respectively. Our affiliates areHSBC is not under any obligation to sell a specific amount of AB Fund shares and also sell shares of mutual funds that they sponsor and that are sponsored by unaffiliated organizations. No entity accounted for 10% or more ofis not our open-end AB Fund sales in 2018.affiliate.

Most open-end U.S. Funds have adopted a plan under Rule 12b-1 of the Investment Company Act that allows the fund to pay, out of assets of the fund, distribution and service fees for the distribution and sale of its shares (“Rule 12b-1 Fees”).shares. The open-end U.S. Funds have entered into such agreements with us, and we have entered into selling and distribution agreements pursuant to which we pay sales commissions to the financial intermediaries that distribute our open-end U.S. Funds. These agreements are terminable by either party upon notice (generally 30 days) and do not obligate the financial intermediary to sell any specific amount of fund shares.

As of December 31, 2018,2021, retail U.S. Fund AUM were approximately $43$73 billion, or 24%23% of retail AUM, as compared to $47$62 billion, or 25%23%, as of December 31, 2017,2020, and $41$55 billion, or 26%23%, as of December 31, 2016.2019. Non-U.S. Fund AUM, as of December 31, 2018,2021, totaled $71$130 billion, or 39%41% of retail AUM, as compared to $76$110 billion, or 40%41%, as of December 31, 2017,2020, and $59$103 billion, or 37%43%, as of December 31, 2016.2019.

2021 Annual Report7
Table of Contents
Part I
Our Retail Services represented approximately 35%41%, 35%39% and 33%39% of our AUM as of December 31, 2018, 20172021, 2020 and 2016,2019, respectively, and the fees we earned from providing these services represented approximately 44%50%, 43%49% and 42%46% of our net revenues for the years ended December 31, 2018, 20172021, 2020 and 2016,2019, respectively. Our AUM and revenues are as follows:


Retail Services Assets Under Management
(by Investment Service)

Years Ended December 31% Change
2021202020192021-202020-19
(in millions)
Equity:
Equity Actively Managed$154,200 $106,866 $81,622 44.3 %30.9 %
Equity Passively Managed(1)
40,821 35,995 34,683 13.4 3.8 
Total Equity195,021 142,861 116,305 36.5 22.8 
U.S.152,106 108,506 84,278 40.2 28.7 
Global & Non-US42,915 34,355 32,027 24.9 7.3 
Total Equity195,021 142,861 116,305 36.5 22.8 
Fixed Income:
Fixed Income Taxable75,813 84,654 88,408 (10.4)(4.2)
Fixed Income Tax-Exempt29,009 23,202 20,750 25.0 11.8 
Fixed Income Passively Managed(1)
12,762 8,231 8,825 55.0 (6.7)
Total Fixed Income117,584 116,087 117,983 1.3 (1.6)
U.S.46,361 36,137 34,830 28.3 3.8 
Global & Non-US71,223 79,950 83,153 (10.9)(3.9)
Total Fixed Income117,584 116,087 117,983 1.3 (1.6)
Alternatives/Multi-Asset Solutions(2):
U.S.3,595 3,071 2,470 17.1 24.3 
Global & Non-US3,718 3,321 2,408 12.0 37.9 
Total Alternatives/Multi-Asset Solutions7,313 6,392 4,878 14.4 31.0 
Total:
U.S.202,062 147,714 121,578 36.8 21.5 
Global & Non-US117,856 117,626 117,588 0.2 — 
Total$319,918 $265,340 $239,166 20.6 10.9 
Affiliated - EQH44,417 36,765 34,448 20.8 6.7 
Non-affiliated(3)
275,501 228,575 204,718 20.5 11.7 
Total$319,918 $265,340 $239,166 20.6 10.9 
(1)Includes index and enhanced index services.
(2)Includes certain multi-asset solutions and services not included in equity or fixed income services.
(3)As of 12/31/2021, AXA is no longer considered an affiliated party, as such, AXA-related AUM has been reclassified to non-affiliated in 2020 and 2019.
 December 31, % Change
 2018 2017 2016 2018-17 2017-16
 (in millions)    
Equity Actively Managed:         
U.S.$41,450
 $37,720
 $31,717
 9.9 % 18.9 %
Global & Non-US19,475
 20,274
 12,514
 (3.9) 62.0
Total60,925
 57,994
 44,231
 5.1
 31.1
Equity Passively Managed(1):
         
U.S.22,658
 23,294
 20,997
 (2.7) 10.9
Global & Non-US6,697
 8,758
 7,025
 (23.5) 24.7
Total29,355
 32,052
 28,022
 (8.4) 14.4
Total Equity90,280
 90,046
 72,253
 0.3
 24.6
          
Fixed Income Taxable:         
U.S.7,029
 7,699
 6,175
 (8.7) 24.7
Global & Non-US53,413
 65,963
 54,328
 (19.0) 21.4
Total60,442
 73,662
 60,503
 (17.9) 21.7
Fixed Income Tax-Exempt:         
U.S.16,403
 15,654
 13,579
 4.8
 15.3
Global & Non-US42
 53
 10
 (20.8) 430.0
Total16,445
 15,707
 13,589
 4.7
 15.6
Fixed Income Passively Managed(1):
         
U.S.4,965
 5,173
 5,216
 (4.0) (0.8)
Global & Non-US3,964
 4,250
 4,041
 (6.7) 5.2
Total8,929
 9,423
 9,257
 (5.2) 1.8
Total Fixed Income85,816
 98,792
 83,349
 (13.1) 18.5
Other(2):
         
U.S.2,476
 2,799
 3,229
 (11.5) (13.3)
Global & Non-US2,197
 1,311
 1,339
 67.6
 (2.1)
Total4,673
 4,110
 4,568
 13.7
 (10.0)
Total:         
U.S.94,981
 92,339
 80,913
 2.9
 14.1
Global & Non-US85,788
 100,609
 79,257
 (14.7) 26.9
Total$180,769
 $192,948
 $160,170
 (6.3) 20.5
Affiliated$34,677
 $36,965
 $33,774
 (6.2) 9.4
Non-affiliated146,092
 155,983
 126,396
 (6.3) 23.4
Total$180,769
 $192,948
 $160,170
 (6.3) 20.5

8AllianceBernstein
Table of Contents
Part I
(1)Includes index and enhanced index services.
(2)Includes certain multi-asset solutions and services and certain alternative investments.

Revenues from Retail Services
(by Investment Service)

Years Ended December 31% Change
2021202020192021-202020-19
(in thousands)
Equity:
Equity Actively Managed$766,578 $508,973 $436,617 50.6 %16.6 %
Equity Passively Managed(1)
14,773 14,347 16,173 3.0 (11.3)
Total Equity781,351 523,320 452,790 49.3 15.6 
U.S.556,398 355,542 292,640 56.5 21.5 
Global & Non-US224,953 167,778 160,150 34.1 4.8 
Total Equity781,351 523,320 452,790 49.3 15.6 
Fixed Income:
Fixed Income Taxable517,327 534,164 506,849 (3.2)5.4 
Fixed Income Tax-Exempt84,945 70,734 65,474 20.1 8.0 
Fixed Income Passively Managed(1)
12,994 12,229 12,105 6.3 1.0 
Total Fixed Income615,266 617,127 584,428 (0.3)5.6 
U.S.115,248 101,825 98,310 13.2 3.6 
Global & Non-US500,018 515,302 486,118 (3.0)6.0 
Total Fixed Income615,266 617,127 584,428 (0.3)5.6 
Alternatives/Multi-Asset Solutions(2):
U.S.81,872 57,069 51,958 43.5 9.8 
Global & Non-US13,117 12,723 8,946 3.1 42.2 
Total Alternatives/Multi-Asset Solutions94,989 69,792 60,904 36.1 14.6 
Total Investment Advisory and Services Fees:
U.S.753,518 514,436 442,908 46.5 16.1 
Global & Non-US738,086 695,803 655,214 6.1 6.2 
Consolidated company-sponsored investment funds1,243 733 883 69.6 (17.0)
Total1,492,847 1,210,972 1,099,005 23.3 10.2 
Distribution Revenues644,125 522,056 447,050 23.4 16.8 
Shareholder Servicing Fees86,857 78,920 73,777 10.1 7.0 
Total$2,223,829 $1,811,948 $1,619,832 22.7 11.9 
Affiliated - EQH28,334 27,130 27,737 4.4 (2.2)
Non-affiliated(3)
2,195,495 1,784,818 1,592,095 23.0 12.1 
Total$2,223,829 $1,811,948 $1,619,832 22.7 11.9 
(1)Includes index and enhanced index services.
(2)Includes certain multi-asset solutions and services not included in equity or fixed income services.
(3)As of 12/31/2021, AXA is no longer considered an affiliated party, as such, AXA-related AUM has been reclassified to non-affiliated in 2020 and 2019.
 Years Ended December 31, % Change
 2018 2017 2016 2018-17 2017-16
 (in thousands)    
Equity Actively Managed:         
U.S.$235,611
 $204,363
 $186,442
 15.3 % 9.6 %
Global & Non-US149,995
 114,277
 92,953
 31.3
 22.9
Total385,606
 318,640
 279,395
 21.0
 14.0
Equity Passively Managed(1):
         
U.S.8,901
 8,508
 7,670
 4.6
 10.9
Global & Non-US7,861
 6,636
 5,267
 18.5
 26.0
Total16,762
 15,144
 12,937
 10.7
 17.1
Total Equity402,368
 333,784
 292,332
 20.5
 14.2
Fixed Income Taxable:         
U.S.25,194
 23,142
 16,993
 8.9
 36.2
Global & Non-US438,048
 454,613
 373,997
 (3.6) 21.6
Total463,242
 477,755
 390,990
 (3.0) 22.2
Fixed Income Tax-Exempt:         
U.S.58,824
 54,106
 52,847
 8.7
 2.4
Global & Non-US132
 120
 63
 10.0
 90.5
Total58,956
 54,226
 52,910
 8.7
 2.5
Fixed Income Passively Managed(1):
         
U.S.6,086
 6,055
 6,105
 0.5
 (0.8)
Global & Non-US6,809
 7,567
 7,815
 (10.0) (3.2)
Total12,895
 13,622
 13,920
 (5.3) (2.1)
Total Fixed Income535,093
 545,603
 457,820
 (1.9) 19.2
Other(2):
         
U.S.63,232
 59,751
 52,025
 5.8
 14.9
Global & Non-US8,575
 6,583
 6,672
 30.3
 (1.3)
Total71,807
 66,334
 58,697
 8.3
 13.0
Total Investment Advisory and Services Fees:         
U.S.397,848
 355,925
 322,082
 11.8
 10.5
Global & Non-US611,420
 589,796
 486,767
 3.7
 21.2
Consolidated company-sponsored investment funds1,047
 1,005
 105
 4.2
 857.1
 1,010,315
 946,726
 808,954
 6.7
 17.0
Distribution Revenues411,996
 405,939
 379,881
 1.5
 6.9
Shareholder Servicing Fees72,134
 71,225
 73,072
 1.3
 (2.5)
Total$1,494,445
 $1,423,890
 $1,261,907
 5.0
 12.8
Affiliated$52,760
 $50,162
 $46,045
 5.2
 8.9
Non-affiliated1,441,685
 1,373,728
 1,215,862
 4.9
 13.0
Total$1,494,445
 $1,423,890
 $1,261,907
 5.0
 12.8

(1)Includes index and enhanced index services.
2021 Annual Report9
(2)Includes certain multi-asset solutions and services and certain alternative investments.

Private Wealth Management

We offer to our private wealth clients, which include high-net-worth individuals and families, trusts and estates, charitable foundations, partnerships, private and family corporations, and other entities, separately-managed accounts, hedge funds, mutual funds and other investment vehicles (“Private Wealth Services”).

We manage these accounts pursuant to written investment advisory agreements, which generally are terminable at any time or upon relatively short notice by any party and may not be assigned without the client's consent. For information about our investment advisory and services fees, including performance-based fees, see “Risk Factors” in Item 1A and “Net Revenues – Investment Advisory and Services Fees” in Item 7.

Our Private Wealth Services represented approximately 17% of our AUM as of December 31, 2018, 2017 and 2016, and the fees we earned from providing these services represented approximately 26%, 24% and 23% of our net revenues for 2018, 2017 and 2016,
Table of Contents
Part I
Private Wealth Management
We partner with our clients, embracing innovation and independent research to address increasingly complex challenges. Our clients include high-net-worth individuals and families who have created generational wealth as successful business owners, athletes, entertainers, corporate executives and private practice owners. We also provide investment and wealth advice to foundations and endowments, family offices and other entities. Our flexible and extensive investment platform offers a range of solutions, including separately-managed accounts, hedge funds, mutual funds and other investment vehicles, tailored to meet each distinct client's needs. Our investment platform is complimented with a wealth platform that includes complex tax and estate planning, pre-IPO and pre-transaction planning, multi-generational family engagement, and philanthropic advice in addition to tailored approaches to meeting the unique needs of emerging wealth and multi-cultural demographics ("Private Wealth Services").
We manage accounts pursuant to written investment advisory agreements, which generally are terminable at any time or upon relatively short notice by any authorized party, and may not be assigned without the client's consent. For information about our investment advisory and services fees, including performance-based fees, see “Risk Factors” in Item 1A and “Net Revenues – Investment Advisory and Services Fees” in Item 7.
Our Private Wealth Services represented approximately 16%, 15% and 16% of our AUM as of December 31, 2021, 2020 and 2019, respectively. The fees we earned from providing these services represented approximately 25%, 24% and 26% of our net revenues for 2021, 2020 and 2019, respectively. Our AUM and revenues are as follows:


Private Wealth Services Assets Under Management
(by Investment Service)

Years Ended December 31% Change
2021202020192021-202020-19
(in millions)
Equity:
Equity Actively Managed$59,709 $50,854 $50,934 17.4 %(0.2)%
Equity Passively Managed(1)
1,764 666 174 164.9 %n/m
Total Equity61,473 51,520 51,108 19.3 0.8 
U.S.35,014 28,776 26,982 21.7 6.6 
Global & Non-US26,459 22,744 24,126 16.3 (5.7)
Total Equity61,473 51,520 51,108 19.3 0.8 
Fixed Income:
Fixed Income Taxable14,567 14,515 12,170 0.4 19.3 
Fixed Income Tax-Exempt26,929 25,764 25,117 4.5 2.6 
Fixed Income Passively Managed(1)
230 195 372 17.9 (47.6)
Total Fixed Income41,726 40,474 37,659 3.1 7.5 
U.S.36,166 35,042 32,685 3.2 7.2 
Global & Non-US5,561 5,432 4,974 2.4 9.2 
Total Fixed Income41,727 40,474 37,659 3.1 7.5 
Alternatives/Multi-Asset Solutions(2):
U.S.6,926 5,927 6,808 16.9 (12.9)
Global & Non-US11,446 7,064 5,484 62.0 28.8 
Total Alternatives/Multi-Asset Solutions18,372 12,991 12,292 41.4 5.7 
Total:
U.S.78,106 69,745 66,475 12.0 4.9 
Global & Non-US43,466 35,240 34,584 23.3 1.9 
Total$121,572 $104,985 $101,059 15.8 3.9 
(1)Includes index and enhanced index services.
(2)Includes certain multi-asset solutions and services not included in equity or fixed income services.
 December 31, % Change
 2018 2017 2016 2018-17 2017-16
 (in millions)    
Equity Actively Managed:         
U.S.$22,504
 $26,492
 $23,857
 (15.1)% 11.0 %
Global & Non-US19,809
 21,880
 16,851
 (9.5) 29.8
Total42,313
 48,372
 40,708
 (12.5) 18.8
          
Equity Passively Managed(1):
         
U.S.113
 130
 193
 (13.1) (32.6)
Global & Non-US42
 51
 208
 (17.6) (75.5)
Total155
 181
 401
 (14.4) (54.9)
          
Total Equity42,468
 48,553
 41,109
 (12.5) 18.1
          
Fixed Income Taxable:         
U.S.7,022
 6,772
 6,674
 3.7
 1.5
Global & Non-US4,154
 4,141
 3,528
 0.3
 17.4
Total11,176
 10,913
 10,202
 2.4
 7.0
          
Fixed Income Tax-Exempt:         
U.S.24,129
 23,636
 21,501
 2.1
 9.9
Global & Non-US15
 18
 3
 (16.7) 500.0
Total24,144
 23,654
 21,504
 2.1
 10.0
          
Fixed Income Passively Managed(1):
         
U.S.11
 —
 18
 100.0
 (100.0)
Global & Non-US404
 401
 468
 0.7
 (14.3)
Total415
 401
 486
 3.5
 (17.5)
          
Total Fixed Income35,735
 34,968
 32,192
 2.2
 8.6
          
Other(2):
         
U.S.5,762
 3,606
 2,650
 59.8
 36.1
Global & Non-US5,340
 5,139
 4,816
 3.9
 6.7
Total11,102
 8,745
 7,466
 27.0
 17.1
          
Total:         
U.S.59,541
 60,636
 54,893
 (1.8) 10.5
Global & Non-US29,764
 31,630
 25,874
 (5.9) 22.2
Total$89,305
 $92,266
 $80,767
 (3.2) 14.2

(1)Includes index and enhanced index services.
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(2)Includes certain multi-asset solutions and services and certain alternative investments.

Revenues Fromfrom Private Wealth Services
(by Investment Service)

Years Ended December 31% Change
2021202020192021-202020-19
(in thousands)
Equity:
Equity Actively Managed$584,455 $487,899 $510,911 19.8 %(4.5)%
Equity Passively Managed(1)
4,780 1,113 334 n/mn/m
Total Equity589,235 489,012 511,245 20.5 (4.3)
U.S.325,154 263,938 267,815 23.2 (1.4)
Global & Non-US264,081 225,074 243,430 17.3 (7.5)
Total Equity589,235 489,012 511,245 20.5 (4.3)
Fixed Income:
Fixed Income Taxable72,404 71,575 63,964 1.2 11.9 
Fixed Income Tax-Exempt130,391 123,952 122,447 5.2 1.2 
Fixed Income Passively Managed(1)
2,634 2,891 4,475 (8.9)(35.4)
Total Fixed Income205,429 198,418 190,886 3.5 3.9 
U.S.167,402 160,666 156,909 4.2 2.4 
Global & Non-US38,027 37,752 33,977 0.7 11.1 
Total Fixed Income205,429 198,418 190,886 3.5 3.9 
Alternatives/Multi-Asset Solutions(2):
U.S.249,432 109,169 123,216 128.5 (11.4)
Global & Non-US71,524 76,065 68,728 (6.0)10.7 
Total Alternatives/Multi-Asset Solutions320,956 185,234 191,944 73.3 (3.5)
Total Investment Advisory and Services Fees:
U.S.741,987 533,773 547,940 39.0 (2.6)
Global & Non-US373,632 338,891 346,135 10.3 (2.1)
Total1,115,619 872,664 894,075 27.8 (2.4)
Distribution Revenues7,641 7,137 7,289 7.1 (2.1)
Shareholder Servicing Fees2,882 2,871 3,141 0.4 (8.6)
Total$1,126,142 $882,672 $904,505 27.6 (2.4)
(1)Includes index and enhanced index services.
(2)Includes certain multi-asset solutions and services not included in equity or fixed income services.

 Years Ended December 31, % Change
 2018 2017 2016 2018-17 2017-16
 (in thousands)    
Equity Actively Managed:         
U.S.$274,320
 $272,577
 $255,902
 0.6 % 6.5 %
Global & Non-US240,332
 212,021
 176,169
 13.4
 20.4
Total514,652
 484,598
 432,071
 6.2
 12.2
Equity Passively Managed(1):
         
U.S.117
 206
 423
 (43.2) (51.3)
Global & Non-US254
 510
 1,053
 (50.2) (51.6)
Total371
 716
 1,476
 (48.2) (51.5)
Total Equity515,023
 485,314
 433,547
 6.1
 11.9
Fixed Income Taxable:         
U.S.33,034
 34,173
 35,756
 (3.3) (4.4)
Global & Non-US28,358
 26,425
 23,384
 7.3
 13.0
Total61,392
 60,598
 59,140
 1.3
 2.5
Fixed Income Tax-Exempt:         
U.S.118,811
 114,974
 111,304
 3.3
 3.3
Global & Non-US109
 88
 31
 23.9
 183.9
Total118,920
 115,062
 111,335
 3.4
 3.3
Fixed Income Passively Managed(1):
         
U.S.156
 58
 38
 169.0
 52.6
Global & Non-US5,312
 4,059
 3,336
 30.9
 21.7
Total5,468
 4,117
 3,374
 32.8
 22.0
Total Fixed Income185,780
 179,777
 173,849
 3.3
 3.4
Other(2):
         
U.S.122,686
 67,019
 41,595
 83.1
 61.1
Global & Non-US51,839
 49,365
 54,629
 5.0
 (9.6)
Total174,525
 116,384
 96,224
 50.0
 21.0
Total Investment Advisory and Services Fees:         
U.S.549,124
 489,007
 445,018
 12.3
 9.9
Global & Non-US326,204
 292,468
 258,602
 11.5
 13.1
Consolidated company-sponsored investment funds(1,214) (2,501) —
 n/m
 n/m
Total874,114
 778,974
 703,620
 12.2
 10.7
Distribution Revenues5,809
 5,077
 3,840
 14.4
 32.2
Shareholder Servicing Fees3,311
 3,311
 4,139
 —
 (20.0)
Total$883,234
 $787,362
 $711,599
 12.2
 10.6

(1)Includes index and enhanced index services.
(2)Includes certain multi-asset solutions and services and certain alternative investments.

Bernstein Research Services

We offer high-quality fundamental research, quantitative services and brokerage-related services in equities and listed options to institutional investors, such as pension fund, hedge fund and mutual fund managers, and other institutional investors (“Bernstein Research Services”). We serve our clients, which are based in the United States and in other major markets around the world, through our trading professionals, who primarily are based in New York, London and Hong Kong, and our sell-side analysts, who provide fundamental company and industry research along with quantitative research into securities valuation and factors affecting stock-price movements.

We earn revenues for providing investment research to, and executing brokerage transactions for, institutional clients. These clients compensate us principally by directing us to execute brokerage transactions on their behalf, for which we earn commissions, and to a lesser, but increasing, extent by paying us directly for research through commission sharing agreements or cash payments. Bernstein Research Services accounted for approximately 13%, 14% and 16% of our net revenues as of December 31, 2018, 2017 and 2016, respectively.

For information regarding trends in fee rates charged for brokerage transactions, see “Risk Factors” in Item 1A.

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Bernstein Research Services
We offer high-quality fundamental and quantitative research and trade execution services in equities and listed options to institutional investors, such as mutual fund and hedge fund managers, pension funds and other institutional investors ("Bernstein Research Services"). We serve our clients, which are based in the United States and in other major markets around the world, through our trading professionals, who are primarily based in New York, London and Hong Kong, and our research analysts, who provide fundamental company and industry research along with quantitative research into securities valuation and factors affecting stock-price movements.
Additionally, we provide equity capital markets services to issuers of publicly-traded securities, primarily in initial public offerings and follow-on offerings, generally acting as co-manager in such offerings.
We earn revenues for providing investment research to, and executing brokerage transactions for, institutional clients. These clients compensate us principally by directing us to execute brokerage transactions on their behalf, for which we earn commissions, and to a lesser but increasing extent, by paying us directly for research through commission sharing agreements or cash payments. Bernstein Research Services accounted for approximately 10%, 12% and 12% of our net revenues for the years ended December 31, 2021, 2020 and 2019, respectively.
For information regarding trends in fee rates charged for brokerage transactions, see “Risk Factors” in Item 1A.
Our Bernstein Research Services revenues are as follows:

Revenues Fromfrom Bernstein Research Services

Years Ended December 31% Change
2021202020192021-202020-19
(in thousands)  
Bernstein Research Services$452,017 $459,744 $407,911 (1.7 %)12.7 %
Custody
Our U.S. based broker-dealer subsidiary acts as custodian for the majority of our Private Wealth Management AUM and some of our Institutional AUM. Other custodian arrangements, directed by clients, include banks, trust companies, brokerage firms and other financial institutions.
Human Capital Management
As a leading global investment management and research firm, we bring together a wide range of insights, expertise and innovations to advance the interests of our clients around the world. The intellectual capital of our employees is collectively the most important asset of our firm, so the long-term sustainability of our firm is heavily dependent on our people. We are keenly focused on:
•fostering an inclusive culture by incorporating diversity and inclusion in all levels of our business;
•encouraging innovation;
•developing, retaining and recruiting high quality talent; and
•aligning employees’ incentives and risk taking with those of the firm.
As a result, we have a strong firm culture that helps us maximize performance and drive excellence. Further, our firm’s role as a fiduciary is embedded in our culture. As a fiduciary, our firm’s primary objective is to act in our clients' best interests and help them reach their financial goals.
Also, our Board of Directors (the "Board") and committees of the Board, particularly our Compensation and Workplace Practices Committee, provide oversight into various human capital matters, including emerging human capital management risks and strategies to mitigate our exposure to those risks. Furthermore, our Board and Board committees evaluate the overall effectiveness of our social responsibility policies, goals and programs and recommend changes to management as necessary. These collaborative efforts contribute to the overall framework that guides how AB attracts, retains and develops a workforce that supports our values and strategic initiatives.
 Years Ended December 31, % Change
 2018 2017 2016 2018-17 2017-16
 (in thousands)  
  
Bernstein Research Services$439,432
 $449,919
 $479,875
 (2.3)% (6.2)%
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Talent Acquisition
AB seeks to achieve excellence in business and investment performance by recruiting and hiring a workforce with diversity of thought, backgrounds and experiences. We believe that diverse and inclusive teams generate better ideas and reach more balanced decisions. We seek to leverage the unique backgrounds of our employees to meet the needs of a broad range of clients and engage with the communities in which we operate. We engage several external organizations to assist in attracting and recruiting top talent at all levels, with a particular focus on attracting diverse talent. We have a sizable group of internal human capital associates focused on recruiting, and we have implemented various human capital initiatives to develop and provide for a balanced workforce. Additionally, we offer internship programs for students to work in positions across functional areas of the firm, and an important part of our college recruitment strategy is to convert a high percentage of our interns into full-time employees.
Employee Engagement
We believe a workforce is most productive, effective and highly engaged when they feel connected to our business and culture. We seek to provide diverse work experiences, professional development opportunities, competitive compensation and benefits, an inclusive and diverse culture and social engagement projects to keep our employees motivated, connected to our firm and engaged throughout their careers. We strive to create a culture of intellectual curiosity and collaboration, creating an environment where our employees can thrive and do their best work. We foster growth and advancement through different training avenues to develop skill sets, create opportunities for networking, both internally and externally, and we encourage internal mobility as a part of our employees' career trajectory.
It is important that our employees are not only connected to our business but also to the communities in which we operate. As such, AB offers many opportunities for our employees to volunteer in the communities in which we serve, including our firm-wide philanthropic initiative, AB Gives Back. Other initiatives in support of these objectives include a five-year refresh award, whereby employees receive two additional weeks off for every five years of service. In addition, we utilize AB Voice, a periodic survey designed to measure employee satisfaction and engagement, allowing us to identify and address performance gaps.
Diversity and Inclusion
We continue to believe that diverse and inclusive teams generate better ideas and best serve the needs of our clients. The events of the last two years have provided an unforeseen yet unique opportunity to reflect, adapt and broaden our Diversity & Inclusion (“D&I”) strategy. D&I continues to be a key strategic priority for AB and our ongoing commitment to embed it across all facets of the firm has further reinforced our company values. It has also allowed for a more purposeful approach to engagement with our people, our clients and the communities in which we operate.
Also, our firm's community engagement efforts have been further integrated under the D&I umbrella. Under the new structure, we are better able to streamline and formalize the process for assessing corporate partnerships and philanthropic giving through the lens of D&I, allowing for a more cohesive overall strategy.
We have enhanced our talent attraction and retention approach to position ourselves as an employer of choice and invest in the development of our people. We have developed a diverse talent strategy with a goal of developing a deeper understanding of the needs of diverse talent and also equipping managers with the necessary tools to effectively manage an increasingly diverse workforce. The strategy includes incorporating the concept of inclusive leadership into the firm-wide leadership development curriculum and enhancing our exit interview process for diverse talent by conducting in-person interviews, which will better enable us to detect trends and mitigate attrition.
Our people remain our top priority, especially during these times of uncertainty. Over the course of the last year, there has been a continued focus on education and deepening engagement across all pillars of our strategy to include Employee Resource Groups ("ERGs"), corporate partnerships, and the overall experience at AB. ERGs have been a major proponent of these efforts by cultivating spaces for courageous conversations, encouraging professional development and personal wellness, and raising awareness for various underrepresented communities.
As we continue to seek opportunities to further our commitment to diversity, equity and inclusion, we are leveraging best practices from industry peers. Our D&I journey continues to evolve; addressing racial and gender equity, increasing access to diverse talent and monitoring client trends remain top priorities.

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Compensation and Benefits
We have demonstrated a history of investing in our workforce by offering competitive compensation. We utilize a variety of compensation elements, including base salaries, annual short-term compensation awards (i.e., cash bonuses) and, for those of our employees who earn more than $300,000 annually, a long-term compensation award program. Long-term incentive compensation awards generally are denominated in restricted AB Holding Units. We utilize this structure to foster a stronger sense of ownership and align the interests of our employees directly with the interests of our Unitholders and indirectly with the interests of our clients, as strong performance for our clients generally contributes directly to increases in AUM and improved financial performance for the firm. Furthermore, we offer to all eligible employees health and welfare, 401(k) profit-sharing and other benefits programs, including a flexible in-office work schedule that permits working remotely two days weekly. In the U.S. (and elsewhere, although benefits may differ by jurisdiction):
•We provide employee wages that are competitive and consistent with employee positions, skill levels, experience, knowledge and geographic location;
•We engage nationally recognized compensation and benefits consulting firms to independently evaluate the effectiveness of our executive compensation and benefit programs, as well as consulting services relating to the amount and form of compensation paid to employees other than executives, and to provide benchmarking against our peers;
•We provide merit-based and performance-based annual increases and incentive compensation, which are communicated to employees at the time of hiring and documented through our talent management process as part of our annual review procedures and upon internal transfer and/or promotion; and
•The firm makes benefits available to all eligible employees, including health insurance, paid and unpaid leaves, a retirement plan, and life and disability/accident coverage. We also offer a variety of voluntary benefits that allow employees to select the options that meet their needs, including flexible time-off, telemedicine, paid parental leave, adoption assistance, prescription savings solutions, Veterans' Health Administration coverage in U.S. medical plans, a personalized wellness program and a financial wellness program.
Health and Safety
Our ongoing response to the COVID-19 global pandemic demonstrates how highly we value the health and safety of our employees. At the initial onset of COVID-19 during the first quarter of 2020, we quickly responded in the various jurisdictions where we operate, including the U.S., EMEA (including the U.K., Luxembourg, France and other jurisdictions), Hong Kong, Shanghai, Singapore and Taiwan. We implemented business continuity measures, including travel restrictions and a work-from-home requirement for almost all personnel (other than a relatively small number of employees whose physical presence in our offices was considered critical), which lasted through the second quarter of 2021. Since then, working in the office generally has been voluntary, with mandatory in-office participation occurring only at certain times when COVID-19 has ebbed significantly in the communities in which we operate. Throughout the pandemic, we have conscientiously ensured operating continuity for all critical functions.
We also instituted a confidential notification process for any employee who tests positive for COVID-19 or has been exposed to someone else who has tested positive. As the COVID-19 crisis has continued to evolve since the lockdown in the first quarter of 2020, certain key functions of the business, such as Risk Management, Business Continuity, Finance and Human Capital, have maintained constant communication and monitored the evolution of the pandemic to keep our employees safe and advised of key developments. Additionally, we continue to monitor communications from the World Health Organization and the U.S. Centers for Disease Control and Prevention, and in the third quarter of 2021 engaged an epidemiologist on a consulting basis, to ensure we have current and accurate information. We have also instituted various other protocols in response to the COVID-19 pandemic, such as increased cleaning protocols, masking requirements where permitted by local law and testing protocols for large gatherings.
Employees
As of December 31, 2021, our firm had 4,118 full-time employees, compared to 3,929 full-time employees as of December 31, 2020, representing a 4.8% increase.
Custody
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As of December 31, 2021, our employees reflected the following characteristics and locations:
Region:Female% FemaleMale% MaleGrand Total% of Total
Americas1,12437 %1,94363 %3,06775 %
Asia ex Japan22551 %21449 %43911 %
EMEA18335 %33365 %51613 %
Japan4655 %3845 %842 %
Grand Total(1)
1,57838 %2,52862 %4,106100 %
(1)The table above only reflects employees who have self-reported as male or female and as such may not reconcile to our total of 4,118 full-time employees.
In connection with our establishing 1,250 roles in Nashville, Tennessee, we have relocated many of our employees from our New York City and White Plains, New York, locations. Employees whose roles are in-scope for the move, but who are not relocating, receive a separation package. We expect layoffs to continue on a rolling basis until all in-scope roles are filled in Nashville.
Information about our Executive Officers
Please refer to "Item 10. Directors, Executive Officers and Corporate Governance" below for information relating to our firm's executive officers.

Our U.S.-based broker-dealer subsidiary acts as custodian for the majority of our Private Wealth Management AUM and some of our Institutions AUM. Other custodial arrangements are maintained by client-designated banks, trust companies, brokerage firms or custodians.

Employees

As of December 31, 2018, our firm had 3,641 full-time employees, representing a 5.0% increase compared to the end of 2017. 

New York state law requires that private sector businesses with 50 or more full-time employees in the state give early warning of plant closings, layoffs, relocations and other covered reductions in work hours. This notification, known as the Worker Adjustment and Retraining Notification (“WARN”) notice, must be provided to affected employees and their representatives, the New York State Department of Labor and the Local Workforce Investment Board, for relocations that affect 25 or more employees. In connection with the ongoing relocation of 1,050 roles from our White Plains and New York City locations to Nashville, Tennessee, we are required to file a series of WARN notices throughout the process, which began in the second half of 2018. We will continue to file these notices as these qualifying events occur, with the majority expected in 2019 and 2020.
Service Marks

We have registered a number of service marks with the U.S. Patent and Trademark Office and various foreign trademark offices, including the mark “AllianceBernstein.” The logo set forth below and “Ahead is a service mark of Tomorrow” are service marks of AB:
    logoa05.jpgab-20211231_g7.jpg
In January 2015, we established a new brand identity by prominently incorporating “AB” into our brand architecture, while maintaining the legal names of our corporate entities. With this and other related refinements, our company, and our Institutional and Retail businesses, now are referred to as “AllianceBernstein (AB)” or simply “AB.” Private Wealth Management and Bernstein Research Services now are referred to as “AB Bernstein.” Also, we adopted the logo and “Ahead of Tomorrow” service marks mark described above.


In connection with the Bernstein Transaction, we acquired all of the rights in, and title to, the Bernstein service marks, including the mark “Bernstein.”

In connection with an acquisition we completed in 2013, we acquired all of the rights in, and title to, the W.P. Stewart & Co. service marks, including the logo “WPSTEWART.”

Service marks are generally valid and may be renewed indefinitely, as long as they are in use and/or their registrations are properly maintained.
Regulation

Virtually all aspects of our business are subject to various federal and state laws and regulations, rules of various securities regulators and exchanges, and laws in the foreign countries in which our subsidiaries conduct business. These laws and regulations primarily are intended to protect clients and fund shareholders and generally grant supervisory agencies broad administrative powers, including the power to limit or restrict the carrying on of business for failure to comply with such laws and regulations. Possible sanctions that may be imposed on us include the suspension of individual employees, limitations on engaging in business for specific periods, the revocation of the registration as an investment adviser or broker-dealer, censures and fines.


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AB, AB Holding, the General Partner and sixfive of our subsidiaries (Sanford C. Bernstein & Co., LLC (“SCB LLC”), AllianceBernstein Global Derivatives Corporation,AB Broadly Syndicated Loan Manager LLC, AB Custom Alternative Solutions LLC, AB Private Credit Investors LLC W.P. Stewart & Co., LLC and W.P. Stewart Asset Management LLC)Ltd.) are registered with the SEC as investment advisers under the Investment Advisers Act. Additionally, AB Holding is an NYSE-listed company and, accordingly, is subject to applicable regulations promulgated by the NYSE. Also, AB, SCB LLC and AB Custom Alternative Solutions LLC are registered with the Commodity Futures Trading Commission (“CFTC”) as commodity pool operators and commodity trading advisers; SCB LLC also is registered with the CFTC as a commodities introducing broker.

Each U.S. Fund is registered with the SEC under the Investment Company Act and each Non-U.S. Fund is subject to the laws in the jurisdiction in which the fund is registered. For example, our platform of Luxembourg-based funds operates pursuant to Luxembourg laws and regulations, including Undertakings for the Collective Investment in Transferable Securities Directives, and is authorized and supervised by the Commission de Surveillance du Secteur Financier (“CSSF”), the primary regulator in Luxembourg. AllianceBernstein Investor Services, Inc., one of our subsidiaries, is registered with the SEC as a transfer and servicing agent.

SCB LLC and another of our subsidiaries, AllianceBernstein Investments, Inc., are registered with the SEC as broker-dealers, and both are members of the Financial Industry Regulatory Authority. In addition, SCB LLC is a member of the NYSE and other principal U.S. exchanges.

Many of our subsidiaries are subject to the oversight of regulatory authorities in the jurisdictions outside the United States in which they operate, including the Ontario Securities Commission, the Investment Industry Regulatory Organization of Canada, the European Securities and Markets Authority, the Financial Conduct Authority in the U.K., the CSSF in Luxembourg, the Financial Services Agency in Japan, the Securities & Futures Commission in Hong Kong, the Monetary Authority of Singapore, the Financial Services Commission in South Korea, and the Financial Supervisory Commission in Taiwan.Taiwan and The Securities and Exchange Board of India. While these regulatory requirements often may be comparable to the requirements of the SEC and other U.S. regulators, they are sometimes more restrictive and may cause us to incur substantial expenditures of time and money related to our compliance efforts. For additional information relating to the regulations that impact our business, please refer to "Risk Factors" in Item 1A.

Iran Threat Reduction and Syria Human Rights Act

AB, AB Holding and their global subsidiaries had no transactions or activities requiring disclosure under the Iran Threat Reduction and Syria Human Rights Act, nor were they involved in the AXA Group matters described immediately below.

The non-U.S. based subsidiaries of AXA operate in compliance with applicable laws and regulations of the various jurisdictions in which they operate, including applicable international (United Nations and European Union) laws and regulations. While AXA Group companies based and operating outside the United States generally are not subject to U.S. law, as an international group, AXA has in place policies and standards (including the AXA Group International Sanctions Policy) that apply to all AXA Group companies worldwide and often impose requirements that go well beyond local law. For additional information regarding AXA, see "Principal Security Holders" in Item 12.

AXA has informed us that AXA Konzern AG, an AXA insurance subsidiary organized under the laws of Germany, provides car, accident and health insurance to diplomats based at the Iranian Embassy in Berlin, Germany. The total annual premium of these policies is approximately $139,700 and the annual net profit arising from these policies, which is difficult to calculate with precision, is estimated to be $24,272.


AXA also has informed us that AXA Belgium, an AXA insurance subsidiary organized under the laws of Belgium, has two policies providing for car insurance for Global Trading NV, which was designated on May 17, 2018 under (E.O.) 13224 and subsequently changed its name to Energy Engineers & Construction on August 20, 2018. The total annual premium of these policies is approximately $6,559 before tax and the annual net profit arising from these policies, which is difficult to calculate with precision, is estimated to be $983.

In addition, AXA has informed us that AXA Insurance Ireland, an AXA insurance subsidiary, provides statutorily required car insurance under four separate policies to the Iranian Embassy in Dublin, Ireland. AXA has informed us that compliance with the Declined Cases Agreement of the Irish Government prohibits the cancellation of these policies unless another insurer is willing to assume the coverage. The total annual premium for these policies is approximately $7,115 and the annual net profit arising from these policies, which is difficult to calculate with precision, is estimated to be $853.

Also, AXA has informed us that AXA Sigorta, a subsidiary of AXA organized under the laws of the Republic of Turkey, provides car insurance coverage for vehicle pools of the Iranian General Consulate and the Iranian Embassy in Istanbul, Turkey. Motor liability insurance coverage is compulsory in Turkey and cannot be canceled unilaterally. The total annual premium in respect of these policies is approximately $3,150 and the annual net profit, which is difficult to calculate with precision, is estimated to be $473.

Additionally, AXA has informed us that AXA Winterthur, an AXA insurance subsidiary organized under the laws of Switzerland, provides Naftiran Intertrade, a wholly-owned subsidiary of the Iranian state-owned National Iranian Oil Company, with life, disability and accident coverage for its employees. In addition, AXA Winterthur also provides car and property insurance coverage for the Iranian Embassy in Bern. The provision of these forms of coverage is mandatory in Switzerland. The total annual premium of these policies is approximately $396,597 and the annual net profit arising from these policies, which is difficult to calculate with precision, is estimated to be $59,489.

Also, AXA has informed us that AXA Egypt, an AXA insurance subsidiary organized under the laws of Egypt, provides the Iranian state-owned Iran Development Bank, two life insurance contracts, covering individuals who have loans with the bank. The total annual premium of these policies is approximately $19,839 and annual net profit arising from these policies, which is difficult to calculate with precision, is estimated to be $2,000.

Furthermore, AXA has informed us that AXA XL, which AXA acquired during the third quarter of 2018, through various non-U.S. subsidiaries, provides insurance to marine policyholders located outside of the U.S. or reinsurance coverage to non-U.S. insurers of marine risks as well as mutual associations of ship owners that provide their members with protection and liability coverage. The provision of these coverages may involve entities or activities related to Iran, including transporting crude oil, petrochemicals and refined petroleum products. AXA XL’s non-U.S. subsidiaries insure or reinsure multiple voyages and fleets containing multiple ships, so they are unable to attribute gross revenues and net profits from such marine policies to activities with Iran. As the activities of these insureds and re-insureds are permitted under applicable laws and regulations, AXA XL intends for its non-U.S. subsidiaries to continue providing such coverage to its insureds and re-insureds to the extent permitted by applicable law.

Lastly, a non-U.S. subsidiary of AXA XL provided accident & health insurance coverage to the diplomatic personnel of the Embassy of Iran in Brussels, Belgium during the third quarter of 2018. AXA XL’s non-U.S. subsidiary received aggregate payments for this insurance from inception through December 31, 2018 of approximately $73,451. Benefits of approximately $2,994 were paid to beneficiaries during 2018. These activities are permitted pursuant to applicable law. The policy has been canceled and is no longer in force.

The aggregate annual premium for the above-referenced insurance policies is approximately $646,411, representing approximately 0.0007% of AXA’s 2018 consolidated revenues, which we expect will exceed $100 billion. The related net profit, which is difficult to calculate with precision, is estimated to be $88,070, representing approximately 0.002% of AXA’s expected 2018 aggregate net profit.

History and Structure

We have been in the investment research and management business for more than 50 years. Bernstein was founded in 1967;1967. Alliance Capital was founded in 1971 when the investment management department of Donaldson, Lufkin & Jenrette, Inc. (since November 2000, a part of Credit Suisse Group) merged with the investment advisory business of Moody’s Investors Service, Inc.

In April 1988, AB Holding “went public” as a master limited partnership. AB Holding Units, which trade under the ticker symbol “AB,” have been listed on the NYSE since that time.

In October 1999, AB Holding reorganized by transferring its business and assets to AB, a newly-formed operating partnership, in exchange for all of the AB Units (“Reorganization”). Since the date of the Reorganization, AB has conducted the business formerly conducted by AB Holding and AB Holding’s activities have consisted of owning AB Units and engaging in related activities. Unlike AB Holding Units, AB Units do not trade publicly and are subject to significant restrictions on transfer. The General Partner is the general partner of both AB and AB Holding.

In October 2000, our two legacy firms, Alliance Capital and Bernstein, combined, bringing together Alliance Capital’s expertise in growth equity and corporate fixed income investing and its family of retail mutual funds, with Bernstein’s expertise in value equity investing, tax-exempt fixed income management, and its Private Wealth Management and Bernstein Research Services businesses.

16AllianceBernstein
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As of December 31, 2018,2021, the condensed ownership structure of AB is as follows (for a more complete description of our ownership structure, see “Principal Security Holders” in Item 12):

ab-20211231_g8.jpg
ownershipchart.jpg

The General Partner owns 100,000 general partnership units in AB Holding and a 1% general partnership interest in AB. Including these general partnership interests, EQH, directly and through certain of its subsidiaries (see “Principal Security Holders” in Item 12), had an approximate 65.2%64.5% economic interest in AB as of December 31, 2018.

2021.
Competition
We compete in all aspects of our business with numerous investment management firms, mutual fund sponsors, brokerage and investment banking firms, insurance companies, banks, savings and loan associations, and other financial institutions that often provide investment products that havewith similar features and objectives as those we offer. Our competitors offer a wide range of financial services to the same customers that we seek to serve. Some of our competitors are larger, have a broader range of product choices and investment capabilities, conduct business in more markets, and have substantially greater resources than we do. These factors may place us at a competitive disadvantage, and we can give no assurance that our strategies and efforts to maintain and enhance our current client relationships, and create new ones, will be successful.

In addition, AXA, EQH and their respectiveits subsidiaries provide financial services, some of which compete with those we offer. The AB Partnership Agreement specifically allows AXAEQH and its subsidiaries (other than the General Partner) to compete with AB and to pursue opportunities that may be available to us. AXA, EQH and certain of their respectiveits subsidiaries have substantially greater financial resources than we do and are not obligated to provide resources to us.

To grow our business, we believe we must be able to compete effectively for AUM. Key competitive factors include:
•our investment performance for clients;
•our investment performance for clients;
•our commitment to place the interests of our clients first;
•the quality of our research;
•our ability to attract, motivate and retain highly skilled, and often highly specialized, personnel;
•the array of investment products we offer;
•the fees we charge;
•Morningstar/Lipper rankings for the AB Funds;
•our ability to sell our actively-managed investment services despite the fact that many investors favor passive services;
•our operational effectiveness;
•our ability to further develop and market our brand; and
•our global presence.
•our commitment to place the interests of our clients first;

•the quality of our research;
•our ability to attract, motivate and retain highly skilled, and often highly specialized, personnel;
•the array of investment products we offer;
•the fees we charge;
•Morningstar/Lipper rankings for the AB Funds;
•our ability to sell our actively-managed investment services despite the fact that many investors favor passive services;
•our operational effectiveness;
•our ability to further develop and market our brand; and
•our global presence.
Competition is an important risk that our business faces and should be considered along with the other factors we discuss in “Risk Factors” in Item 1A.

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Available Information

AB and AB Holding file or furnish annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, amendments to such reports, and other reports (and amendments thereto) required to comply with federal securities laws, including Section 16 beneficial ownership reports on Forms 3, 4 and 5, registration statements and proxy statements. We maintain an Internet site (http://www.alliancebernstein.com) where the public can view these reports, free of charge, as soon as reasonably practicable after each report is filed with, or furnished to, the SEC. In addition, the SEC maintains an Internet site (http://www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.


Item 1A. Risk Factors

Please consider this section along with the description of our business in Item 1, the competition section immediately above and AB’s financial information contained in Items 6, 7 and 8. The majority of the risk factors discussed below directly affect AB. These risk factors also affect AB Holding because AB Holding’s principal source of income and cash flow is attributable to its investment in AB. See also “Cautions Regarding Forward-Looking Statements” in Item 7.

Business-related Risks,

including risks relating to COVID-19
Our revenues and results of operations depend on the market value and composition of our AUM, which can fluctuate significantly based on various factors, including many factors outside of our control.

We derive most of our revenues from investment advisory and services fees, which typically are calculated as a percentage of the value of AUM as of a specified date, or as a percentage of the value of average AUM for the applicable billing period, and vary with the type of investment service, the size of the account and the total amount of assets we manage for a particular client. The value and composition of our AUM can be adversely affected by several factors, including:

•Market Factors. Our AUM remain sensitive to the volatility associated with global financial market conditions. For example, the dramatic securities market declines experienced during March 2020, which resulted from the global effects of COVID-19, caused a significant reduction in our AUM. Markets and AUM levels have since recovered to new highs following unprecedented, coordinated monetary and fiscal policy support and the approval of vaccines to help remedy the global pandemic. However, we recognize that, due to continued uncertainty associated with these circumstances, markets may remain volatile and, accordingly, there remains risk of a significant reduction in our revenues and net income in future periods, particularly if the negative effects on the global economy from COVID accelerate. Global equityeconomies and financial markets were quite strong throughout 2018 before finishingare increasingly interconnected, which increases the year dramatically lower. Markets sold offprobability that conditions in one country or region might adversely impact a different country or region. Conditions affecting the general economy, including political, social or economic instability at the local, regional or global level, such as the U.S. civil unrest centered around racial inequity experienced in 2020 or the riot experienced in Washington D.C. in January 2021 surrounding the transition to a new Presidential administration, may also affect the market value of our AUM. Health crises, such as the COVID-19 pandemic, as well as other incidents that interrupt the expected course of events, such as natural disasters, war or civil disturbance, acts of terrorism (whether foreign or domestic), power outages and other unforeseeable and external events, and the public response to or fear of such diseases or events, have had and may in the fourth quarter duefuture have a significant adverse effect on financial markets and our AUM, revenues and net income. Furthermore, the preventative and protective health-related actions, such as business activity suspensions and population lock-downs, that governments have taken, and may continue to investor concerns over rising U.S. interest rates, a slowdowntake, in Europeanresponse to COVID-19 have resulted, and may continue to result, in periods of business confidence, weaker Chinese growthinterruption, inability to obtain raw materials, supplies and rising geopolitical uncertainty, including Brexit implementationcomponent parts, and ongoing trade tensions betweenreduced or disrupted operations. These circumstances have caused, and may continue to cause, significant economic disruption and high levels of unemployment, as well as inflationary pressures, which could adversely affect the U.S.financial condition and China. Global fixed income markets were mixed for the year, with higher returns for less-risky government bonds and negative credit market returns. In the U.S., while tax cuts enacted at the endresults of 2017 helped spur growth and corporate earnings in 2018, the benefit is unlikely to continue in 2019, and investors are focused on the lengthoperations of many of the companies in which we invest, and likely reduce the market value of their securities and thus our AUM and revenues. Furthermore, significant market volatility and uncertainty, and reductions in the availability of margin financing, can significantly limit the liquidity of certain asset backed and other securities, making it at times impossible to sell these securities at prices reflecting their true economic cycle. Thevalue. While liquidity conditions have improved considerably since the first quarter of 2020 following the stimulus programs announced by the U.S. Federal Reserve announced its fourth interest rate increase in December, as expected, but revised its guidance onand U.S. Treasury, we recognize the number of rate increases in 2019 from three to two. Oil prices fell sharplypossibility that conditions could deteriorate in the fourth quarter which, when combined with higher U.S. interest ratesfuture. Lack of liquidity makes it more difficult for our funds to meet redemption requests. If liquidity were to worsen, this may have a significant adverse effect on our AUM, revenues and slowing growth, could impact the economies of some emerging markets. In Europe, the Central Bank ended its quantitative easing program in December despite the slowdown in growth, and ongoing uncertainty around Brexit negotiations weighed on business and consumer confidencenet income in the U.K. In China, monetary policy is easing in response to slowing growth and U.S. trade tariff headwinds. These factors, and the market volatility they cause, may adversely affect our AUM and revenues.
future.
•Client Preferences. Generally, our clients may withdraw their assets at any time and on short notice. Also, changing market dynamics and investment trends, particularly with respect to sponsors of defined benefit plans choosing to invest in less risky investments and the ongoing shift to lower-fee passive services described below, may continue to reduce interest in some of the investment products we offer, and/or clients and prospects may continue to seek investment products that we may not currently offer. Loss of, or decreases in, AUM reduces our investment advisory and services fees and revenues.
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•Our Investment Performance. Our ability to achieve investment returns for clients that meet or exceed investment returns for comparable asset classes and competing investment services is a key consideration when clients decide to keep their assets with us or invest additional assets, and when a prospective client is deciding whether to invest with us. Poor investment performance, both in absolute terms and/or relative to peers and stated benchmarks, may result in clients withdrawing assets and prospective clients choosing to invest with competitors.
•Investing Trends. Our fee rates can vary significantly among the various investment products and services we offer to our clients (see “Net Revenues” in Item 7 for additional information regarding our fee rates); our fee realization rate fluctuates as clients shift assets between accounts or products with different fee structures.
•Service Changes. We may be required to reduce our fee levels, restructure the fees we charge and/or adjust the services we offer to our clients because of, among other things, regulatory initiatives (whether industry-wide or specifically targeted), changing technology in the asset management business (including algorithmic strategies and emerging financial technology), court decisions and competitive considerations. A reduction in fee levels would reduce our revenues.
A decrease in the value of our AUM, a decrease in the amount of AUM we manage, an adverse mix shift in our AUM and/or a reduction in the level of fees we charge would adversely affect our investment advisory fees and revenues. A reduction in revenues, without a commensurate reduction in expenses, adversely affects our results of operations.


The industry-wide shift from actively-managed investment services to passive services has adversely affected our investment advisory and services fees, revenues and results of operations, and this trend may continue.
Our competitive environment has become increasingly difficult over the past decade, as active managers, which invest based on individual security selection, have, on average, consistently underperformed passive services, which invest based on market indices. While the weak and volatile market environment in 2018 provided ample opportunities for stock selection, it was another challenging year for active equity fund managers. Only 42%Active performance relative to benchmarks as of mid-2021 remained mixed, with 47% of active managers beatoutperforming their passive benchmarks for the full year,12 months ended June 30, 2021 (latest data available). Non-U.S. stock active funds fared better with varied results among growth, value59% outperforming benchmarks, while 40% of U.S. large-cap stock active funds outperformed. Actively-managed bond funds generally performed well in 2021, with intermediate core, corporate and core managers. Despite the more volatile markets, demand for passive strategies persisted, albeit at a slower pace, and active managers struggled to attract net new assets. In thehigh yield funds each generally outperforming benchmarks.
Flows into actively-managed funds improved industry-wide in 2021, with U.S., total industry-wide active mutual fund flows rebounding to inflows of $67$217 billion in 2017 reversed to net outflows of $3022021, contrasted with $196 billion in 2018. Active equity U.S. mutual fund outflows of $259 billion in 2018 increased by 33% year-over-year as the pace of outflows accelerated in the fourth quarter, particularly in December. Further, after $221 billion of active2020. Active fixed income U.S. mutual fund inflows accelerated to $366 billion in 2017,2021, compared to $246 billion in 2020. Furthermore, active equity U.S. mutual fund outflows decelerated to $198 billion in 2021, compared to outflows of $338 billion in 2020. However, the improvement in active fund flows slowed dramaticallywas surpassed by increased demand for passive strategies in 2018 to $13 billion. Meanwhile,the U.S., as industry-wide total industry-wide passive mutual fundnet inflows of $451increased to $918 billion were down 35%in 2021 from last year's record $692 billion. The most recent data available for U.S. institutions (through September 30, 2018) is more negative. Total industry active equity and fixed income net outflows for the year-to-date through September 30, 2018 were $254$361 billion triple the total for 2017.in 2020. In this environment, organic growth through positive net inflows is difficult to achieve for active managers, such as AB, and requires taking market share from other active managers.
The significant shift from active services to passive services adversely affects Bernstein Research Services revenues as well. GlobalInstitutional global market trading volumes have declinedcontinue to be pressured (notwithstanding the heightened market volatility and trading volume predominantly relating to COVID-19 in recent years, and we expect this to continue, fueledthe first half of 2020) by persistent active equity outflows and passive equity inflows. As a result, portfolio turnover has decreaseddeclined and investors hold fewer shares that are actively traded by managers.
Our reputation could suffer if we are unable to deliver consistent, competitive investment performance.

Our business is based on the trust and confidence of our clients. Damage to our reputation, resulting from poor or inconsistent investment performance, among other factors, can reduce substantially our AUM and impair our ability to maintain or grow our business.

Maintaining adequate liquidity for our general business needs depends on certain factors, including operating cash flows and our access to credit on reasonable terms.

Our financial condition is dependent on our cash flow from operations, which is subject to the performance of the capital markets, our ability to maintain and grow AUM and other factors beyond our control. Our ability to issue public or private debt on reasonable terms may be limited by adverse market conditions, our profitability, our creditworthiness as perceived by lenders and changes in government regulations, including tax rates and interest rates. Furthermore, our access to credit on reasonable terms is partially dependent on our firm’s credit ratings.

Both Moody’s Investors Service, Inc. and Standard & Poor's Rating Service recently affirmed AB’s long-term and short-term credit ratings and indicated a stable outlook in 2018. Future changes in our credit ratings are possible and any downgrade to our ratings is likely to increase our borrowing costs and limit our access to the capital markets. If this occurs, we may be forced to incur unanticipated costs or revise our strategic plans, which could have a material adverse effect on our financial condition, results of operations and business prospects.
AXAEQH and its affiliates, including AXA Equitable Holdings,subsidiaries provide a significant amount of our AUM and fund a significant portion of our seed investments, and if our agreements with them terminate or they withdraw capital support whether as a result of AXA Equitable Holdings' initial public offering ("IPO") in 2018 or another factor, it could have a material adverse effect on our business, results of operations and/or financial condition.
AXAEQH (our parent company) and its affiliates, including AXA Equitable Holdings, collectively aresubsidiaries constitute our largest client. AXA Equitable HoldingsOur EQH affiliates represented 18.1%approximately 17% of our total AUM as of December 31, 20182021, and 3.1%we earned approximately 3% of our net revenues for the year ended December 31, 2018. AXA and its affiliates other than AXA Equitable Holdings represented 6.1% of our total AUM as of December 31, 2018 and 2.4% of our net revenues for the year ended December 31, 2018.from services we provided to them in 2021. Our related investment management agreements with these affiliates are terminable at any time or on short notice by either party, and none of these affiliates areEQH is not under any obligation to maintain any level of AUM with us. A material adverse effect on our business, results of operations and/or financial condition could result if AXA Equitable Holdings or AXA and its other affiliatesEQH were to terminate theirits investment management agreements with us.
Further, while to date we have not experienced adverse effects from the IPO and we currently cannot predict the eventual impact, if any, on us
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Table of the IPO, such impact could include a reduction in the support AXA has provided to us in the past with respect to our investment management business, resulting in a decrease to our revenues and ability to initiate new investment services. Also,Contents

Part I
we rely on AXA, including its subsidiary AXA Business Services, for a number of significant services and we benefit from our affiliation with AXA in certain common vendor relationships. These arrangements may change with possible negative financial implications for us.
We may be unable to continue to attract, motivate and retain key personnel, and the cost to retain key personnel could put pressure on our adjusted operating margin.

Our business depends on our ability to attract, motivate and retain highly skilled, and often highly specialized, technical, investment, managerial and executive personnel and there is no assurance that we will be able to do so.

The market for these professionals is extremely competitive. They often maintain strong, personal relationships with investors in our products and other members of the business community so their departure may cause us to lose client accounts or result in fewer opportunities to win new business, either of which factors could have a material adverse effect on our results of operations and business prospects.

Additionally, a decline in revenues may limit our ability to pay our employees at competitive levels, and maintaining (or increasing) compensation without a revenue increase, in order to retain key personnel, may adversely affect our adjusted operating margin. As a result, we remain vigilant about aligning our cost structure (including headcount) with our revenue base. For additional information regarding our compensation practices, see "Compensation Discussion and Analysis" in Item 11.

Our process of relocating our headquarters may not be executed as we envision.

On May 2, 2018, we announced that we will establish our corporate headquarters in and relocate approximately 1,050 jobs located in the New York metropolitan area to Nashville, Tennessee (for additional information, see “Relocation Strategy” in Item 7). Although the eventual impact on AB from this process is not yet known, the uncertainty created by these circumstances could have a significant adverse effect on AB’s ability to motivate and retain current employees. Further significant managerial and operational challenges could arise, such as ineffective transfer of institutional knowledge from current employees to newly-hired employees, if AB experiences significantly greater attrition among current employees than the firm anticipates in connection with the relocation and/or if the firm encounters more difficulty than expected in hiring qualified employees to help staff our Nashville headquarters.

Additionally, our estimates for both the transition costs and the corresponding expense savings relating to our headquarters relocation, which we discuss in more detail in “Relocation Strategy” in Item 7, are based on our current assumptions of employee relocation costs, severance, and overlapping compensation and occupancy costs. If our assumptions turn out to be inaccurate, our adjusted net revenues and adjusted operating income could be adversely affected.

Our business is dependent on investment advisory agreements with clients, and selling and distribution agreements with various financial intermediaries and consultants, which generally are subject to termination or non-renewal on short notice.
We derive most of our revenues pursuant to written investment management agreements (or other arrangements) with institutional investors, mutual funds and private wealth clients, and selling and distribution agreements with financial intermediaries that distribute AB Funds. Generally, the investment management agreements (and other arrangements), including our agreements with AXA, EQH and their respectiveits subsidiaries, are terminable at any time or upon relatively short notice by either party. The investment management agreements pursuant to which we manage the U.S. Funds must be renewed and approved by the Funds’ boards of directors annually. A significant majority of the directors are independent. Consequently, there can be no assurance that the board of directors of each fund will approve the fund’s investment management agreement each year, or will not condition its approval on revised terms that may be adverse to us. In addition, investors in AB Funds can redeem their investments without notice. Any termination of, or failure to renew, a significant number of these agreements, or a significant increase in redemption rates, could have a material adverse effect on our results of operations and business prospects.

Similarly, the selling and distribution agreements with securities firms, brokers, banks and other financial intermediaries are terminable by either party upon notice (generally 30 days) and do not obligate the financial intermediary to sell any specific amount of fund shares. These intermediaries generally offer their clients investment products that compete with our products. In addition, certain institutional investors rely on consultants to advise them about choosing an investment adviser and some of our services may not be considered among the best choices by these consultants. As a result, investment consultants may advise their clients to move their assets invested with us to other investment advisers, which could result in significant net outflows.


Lastly, our Private Wealth Services rely on referrals from financial planners, registered investment advisers and other professionals. We cannot be certain that we will continue to have access to, or receive referrals from, these third parties. Loss of such access or referrals could have a material adverse effect on our results of operations and business prospects.

Performance-based fee arrangements with our clients may cause greater fluctuations in our net revenues.

We sometimes charge our clients performance-based fees, whereby we charge a base advisory fee and are eligible to earn an additional performance-based fee or incentive allocation that is calculated as either a percentage of absolute investment results or a percentage of investment results in excess of a stated benchmark over a specified period of time. Some performance-based fees include a high-watermark provision, which generally provides that if a client account under-performs relative to its performance target (whether in absolute terms or relative to a specified benchmark), it must gain back such under-performance before we can collect future performance-based fees. Therefore, if we fail to achieve the performance target for a particular period, we will not earn a performance-based fee for that period and, for accounts with a high-watermark provision, our ability to earn future performance-based fees will be impaired.

We are eligible to earn performance-based fees on 7.3%6.7%, 7.8%8.7% and 0.9%0.6% of the assets we manage for institutional clients, private wealth clients and retail clients, respectively (in total, 5.1%4.5% of our AUM). If the percentage of our AUM subject to performance-based fees increases, seasonality and volatility of revenue and earnings are likely to become more significant. Our performance-based fees in 2018, 2017 and 2016 were $118.1$245.1 million, $94.8$132.6 million and $32.8$99.6 million in 2021, 2020 and 2019, respectively.

The revenues generated by Bernstein Research Services may be adversely affected by circumstances beyond our control, including declines in brokerage transaction rates, declines in global market volumes, failure to settle our trades by significant counterparties and the effects of MiFID II and Brexit.
Electronic, or “low-touch,” trading represents a significant percentage of buy-side trading activity and typically produces transaction fees that are significantly lower than the price of traditional full service fee rates. As a result, blended pricing throughout our industry is lower now than it was historically, and price declines may continue. In addition, fee rates we charge and charged by other brokers for brokerage services have historically experienced price pressure, and we expect these trends to continue. Also, while increases in transaction volume and market share often can offset decreases in rates, this may not continue.
In addition, the failure or inability of any of our broker-dealer's significant counterparties to perform could expose us to substantial expenditures and adversely affect our revenues. For example, SCB LLC, as a member of clearing and settlement organizations, would be required to settle open trades of any non-performing counterparty. This exposes us to the mark-to-market adjustment on the trades between trade date and settlement date, which could be significant, especially during periods of severe market volatility. Also, our ability to access liquidity in such situations may be limited by what our funding relationships are able to offer us at such times.
We discuss the risks associated with the second installment of the Markets in Financial Instruments Directive II (“MiFID II”) and Brexit below in "Legal and Regulatory-related Risks" in this Item 1A.
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Fluctuations in the exchange rates between the U.S. dollar and various other currencies can adversely affect our AUM, revenues and results of operations.
Although significant portions of our net revenues and expenses, as well as our AUM, presently are denominated in U.S. dollars, we have subsidiaries and clients outside of the United States with functional currencies other than the U.S. dollar. Weakening of these currencies relative to the U.S. dollar adversely affects the value in U.S. dollar terms of our revenues and our AUM denominated in these other currencies. Accordingly, fluctuations in U.S. dollar exchange rates affect our AUM, revenues and reported financial results from one period to the next.
We may not be successful in our efforts to hedge our exposure to such fluctuations, which could negatively impact our revenues and reported financial results.
Our seed capital investments are subject to market risk. While we enter into various futures, forwards, swap and option contracts to economically hedge many of these investments, we also may be exposed to market risk and credit-related losses in the event of non-performance by counterparties to these derivative instruments.
We have a seed investment program for the purpose of building track records and assisting with the marketing initiatives pertaining to our firm's new products. These seed capital investments are subject to market risk. Our risk management team oversees a seed hedging program that attempts to minimize this risk, subject to practical and cost considerations. Also, not all seed investments are deemed appropriate to hedge, and in those cases we are exposed to market risk. In addition, we may be subject to basis risk in that we cannot always hedge with precision our market exposure and, as a result, we may be subject to relative spreads between market sectors. As a result, volatility in the capital markets may cause significant changes in our period-to-period financial and operating results.
We use various derivative instruments, including futures, forwards, swap and option contracts, in conjunction with our seed hedging program. While in most cases broad market risks are hedged, our hedges are imperfect and some market risk remains. In addition, our use of derivatives results in counterparty risk (i.e., the risk that we may be exposed to credit-related losses in the event of non-performance by counterparties to these derivative instruments), regulatory risk (e.g., short selling restrictions) and cash/synthetic basis risk (i.e., the risk that the underlying positions do not move identically to the related derivative instruments).
We may engage in strategic transactions that could pose risks.
As part of our business strategy, we consider potential strategic transactions, including acquisitions, dispositions, mergers, consolidations, joint venture partnerships and similar transactions, some of which may be material. These transactions, if undertaken, may involve various risks and present financial, managerial and operational challenges, including:.
•adverse effects on our earnings if acquired intangible assets or goodwill become impaired;
•existence of unknown liabilities or contingencies that arise after closing;
•potential disputes with counterparties; and
•the possible need for us to increase our firm's leverage or, if we fund the purchase price of a transaction with AB Units or AB Holding Units, likely dilution to our existing unitholders.
Acquisitions also pose the risk that any business we acquire may lose customers or employees or could under-perform relative to expectations. Additionally, the loss of investment personnel poses the risk that we may lose the AUM we expected to manage, which could adversely affect our results of operations.
We may not accurately value the securities we hold on behalf of our clients or our company investments.
In accordance with applicable regulatory requirements, contractual obligations or client direction, we employ procedures for the pricing and valuation of securities and other positions held in client accounts or for company investments. We have established a Valuation Committee, consisting of senior officers and employees, which oversees pricing controls and valuation processes. If market quotations for a security are not readily available, the Valuation Committee determines a fair value for the security.
Extraordinary volatility in financial markets, significant liquidity constraints or our failure to adequately consider one or more factors when determining the fair value of a security based on information with limited market observability could result in our failing to properly value securities we hold for our clients or investments accounted for on our balance sheet. Improper valuation likely would result in our basing fee calculations on inaccurate AUM figures, our striking incorrect net asset values for company-sponsored mutual funds or hedge funds or, in the case of company investments, our inaccurately calculating and reporting our financial condition and operating results. Although the overall percentage of our AUM that we fair value based on information with limited market observability is not significant, inaccurate fair value determinations can harm our clients, create regulatory issues and damage our reputation.
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We may not have sufficient information to confirm or review the accuracy of valuations provided to us by underlying external managers for the funds in which certain of our alternative investment products invest.
Certain of our alternative investment services invest in funds managed by external managers (“External Managers”) rather than investing directly in securities and other instruments. As a result, our abilities will be limited with regard to (i) monitoring such investments, (ii) regularly obtaining complete, accurate and current information with respect to such investments and (iii) exercising control over such investments. Accordingly, we may not have sufficient information to confirm or review the accuracy of valuations provided to us by External Managers. In addition, we will be required to rely on External Managers’ compliance with any applicable investment guidelines and restrictions. Any failure of an External Manager to operate within such guidelines or to provide accurate information with respect to the investment could subject our alternative investment products to losses and cause damage to our reputation.
The quantitative and systematic models we use in certain of our investment services may contain errors, resulting in imprecise risk assessments and unintended output.
We use quantitative and systematic models in a variety of our investment services, generally in combination with fundamental research. These models are developed by senior quantitative professionals and typically are implemented by IT professionals. Our Model Risk Oversight Committee oversees the model governance framework and associated model review activities, which are then executed by our Model Risk Team. However, due to the complexity and large data dependency of such models, it is possible that errors in the models could exist and our controls could fail to detect such errors. Failure to detect errors could result in client losses and reputational damage.
The financial services industry is intensely competitive.
We compete on the basis of a number of factors, including our investment performance for our clients, our array of investment services, innovation, reputation and price. By having a global presence, we often face competitors with more experience and more established relationships with clients, regulators and industry participants in the relevant market, which could adversely affect our ability to expand. Furthermore, if we are unable to maintain and/or continue to improve our investment performance, our client flows may be adversely affected, which may make it more difficult for us to compete effectively.
Also, increased competition could reduce the demand for our products and services, which could have a material adverse effect on our financial condition, results of operations and business prospects. For additional information regarding competitive factors, see “Competition” in Item 1.
Human Capital-related Risks
We may be unable to continue to attract, motivate and retain key personnel, and the cost to retain key personnel could put pressure on our adjusted operating margin.
Our business depends on our ability to attract, motivate and retain highly skilled, and often highly specialized, technical, investment, managerial and executive personnel, and there is no assurance that we will be able to do so.
The market for these professionals is extremely competitive. Certain of these professionals often maintain strong, personal relationships with investors in our products and other members of the business community so their departure may cause us to lose client accounts or result in fewer opportunities to win new business, either of which factors could have a material adverse effect on our results of operations and business prospects.
Additionally, a decline in revenues may limit our ability to pay our employees at competitive levels, and maintaining (or increasing) compensation without a revenue increase, in order to retain key personnel, may adversely affect our operating margin. As a result, we remain vigilant about aligning our cost structure (including headcount) with our revenue base. For additional information regarding our compensation practices, see "Compensation Discussion and Analysis" in Item 11.
Our process of relocating our headquarters may not be executed as we envision.
We have established our corporate headquarters in and expect to relocate a total of approximately 1,250 jobs previously located in the New York metropolitan area to Nashville, Tennessee (for additional information, see “Relocation Strategy” in Item 7). Although the eventual impact on AB from this process is not yet known, the uncertainty created by these circumstances could have a significant adverse effect on AB’s ability to motivate and retain current employees. Further significant managerial and operational challenges could arise, such as ineffective transfer of institutional knowledge from current employees to newly-hired employees, if AB experiences significantly greater attrition among current employees than the firm anticipates in connection with the relocation and/or if the firm encounters more difficulty than expected in hiring qualified employees to help staff our Nashville headquarters.
Additionally, our estimates for both the transition costs and the corresponding expense savings relating to our headquarters relocation, which we discuss in more detail in “Relocation Strategy” in Item 7, are based on our current assumptions of employee relocation costs, severance, and overlapping compensation and occupancy costs. If our assumptions turn out to be inaccurate, our expenses and operating income could be adversely affected.
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Operational, Technology and Cyber-related Risks
Technology failures and disruptions, including failures to properly safeguard confidential information, can significantly constrain our operations and result in significant time and expense to remediate, which could result in a material adverse effect on our results of operations and business prospects.
We are highly dependent on software and related technologies throughout our business, including both proprietary systems and those provided by third-party vendors. We use our technology to, among other things, obtain securities pricing information, process client transactions, store and maintain data, and provide reports and other services to our clients. Despite our protective measures, including measures designed to effectively secure information through system security technology and established and tested business continuity plans, we may still experience system delays and interruptions as a result of natural disasters, hardware failures, software defects, power outages, acts of war and third-party failures. We cannot predict with certainty all of the adverse effects that could result from our failure, or the failure of a third party, to efficiently address and resolve these delays and interruptions. These adverse effects could include the inability to perform critical business functions or failure to comply with financial reporting and other regulatory requirements, which could lead to loss of client confidence, reputational damage, exposure to disciplinary action and liability to our clients.
Many of the software applications that we use in our business are licensed from, and supported, upgraded and maintained by, third-party vendors. A suspension or termination of certain of these licenses or the related support, upgrades and maintenance could cause temporary system delays or interruption. Additionally, technology rapidly evolves and we cannot guarantee that our competitors may not implement more advanced technology platforms for their products and services, which may place us at a competitive disadvantage and adversely affect our results of operations and business prospects.
Also, we could be subject to losses if we fail to properly safeguard sensitive and confidential information. As part of our normal operations, we maintain and transmit confidential information about our clients as well as proprietary information relating to our business operations. Although we take protective measures, our systems still could be vulnerable to cyber attack or other forms of unauthorized access (including computer viruses) that have a security impact, such as an authorized employee or vendor inadvertently or intentionally causing us to release confidential or proprietary information. Such disclosure could, among other things, allow competitors access to our proprietary business information and require significant time and expense to investigate and remediate the breach. Moreover, loss of confidential client information could harm our reputation and subject us to liability under laws that protect confidential personal data, resulting in increased costs or loss of revenues.
Any significant security breach of our information and cyber security infrastructure, as well as our failure to properly escalate and respond to such an incident, may significantly harm our operations and reputation.
It is critical that we ensure the continuity and effectiveness of our information and cyber security infrastructure, policies, procedures and capabilities to protect our computer and telecommunications systems and the data that reside on or are transmitted through them and contracted third-party systems. Although we take protective measures, including measures to effectively secure information through system security technology, our technology systems may still be vulnerable to unauthorized access, supply chain attacks, computer viruses or other events that have a security impact, such as an external attack by one or more cyber criminals (including phishing attacks attempting to obtain confidential information and ransomware attacks attempting to block access to a computer system until a sum of money is paid), which could materially harm our operations and reputation. Additionally, while we take precautions to password protect and encrypt our laptops and sensitive information on our other mobile electronic devices, if such devices are stolen, misplaced or left unattended, they may become vulnerable to hacking or other unauthorized use, creating a possible security risk and resulting in potentially costly actions by us.
Furthermore, although we maintain a robust cyber security infrastructure and incident preparedness strategy, which we test periodically, we may be unable to respond, both internally and externally, to a cyber incident in a sufficiently expeditious manner. Any such failure could cause significant harm to our reputation and result in litigation, regulatory scrutiny and/or significant remediation costs.
Unpredictable events, including climate change, outbreak of infectious disease, natural disaster, dangerous weather conditions, technology failure, terrorist attack and political unrest, may adversely affect our ability to conduct business.
War, terrorist attack, political unrest, power failure, climate change, natural disaster and rapid spread of infectious disease (such as the ongoing COVID-19 pandemic) could interrupt our operations by:
•causing disruptions in global economic conditions, thereby decreasing investor confidence and making investment products generally less attractive;
•inflicting loss of life;
•triggering large-scale technology failures or delays;
•breaching our information and cyber security infrastructure; and
•requiring substantial capital expenditures and operating expenses to remediate damage and restore operations.
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Despite the contingency plans and facilities we have in place, including system security measures, information back-up and disaster recovery processes, our ability to conduct business, including in key business centers where we have significant operations, such as New York City, London, England, and Nashville, Tennessee, may be adversely affected by a disruption in the infrastructure that supports our operations and the communities in which they are located. This may include a disruption involving electrical, communications, transportation or other services we may use or third parties with which we conduct business. If a disruption occurs in one location and our employees in that location are unable to occupy our offices or communicate with or travel to other locations, our ability to conduct business with and on behalf of our clients may suffer, and we may not be able to successfully implement contingency plans that depend on communication or travel. Furthermore, unauthorized access to our systems as a result of a security breach, the failure of our systems, or the loss of data could give rise to legal proceedings or regulatory penalties under laws protecting the privacy of personal information, disrupt operations, and damage our reputation.
Our operations require experienced, professional staff. Loss of a substantial number of such persons or an inability to provide properly equipped places for them to work may, by disrupting our operations, adversely affect our financial condition, results of operations and business prospects. In addition, our property and business interruption insurance may not be adequate to compensate us for all losses, failures or breaches that may occur.
Our own operational failures or those of third parties on which we rely, including failures arising out of human error, could disrupt our business, damage our reputation and reduce our revenues.
Weaknesses or failures in our internal processes or systems could lead to disruption of our operations, liability to clients, exposure to disciplinary action or harm to our reputation. Our business is highly dependent on our ability to process, on a daily basis, large numbers of transactions, many of which are highly complex, across numerous and diverse markets. These transactions generally must comply with client investment guidelines, as well as stringent legal and regulatory standards.
Our obligations to clients require us to exercise skill, care and prudence in performing our services. Despite our employees being highly trained and skilled, the large number of transactions we process makes it highly likely that errors will occasionally occur. If we make a mistake in performing our services that causes financial harm to a client, we have a duty to act promptly to put the client in the position the client would have been in had we not made the error. The occurrence of mistakes, particularly significant ones, can have a material adverse effect on our reputation, results of operations and business prospects.
The individuals, third-party vendors or issuers on whom we rely to perform services for us or our clients may be unable or unwilling to honor their contractual obligations to us.
We rely on various counterparties and other third-party vendors to augment our existing investment, operational, financial and technological capabilities, but the use of a third-party vendor does not diminish AB's responsibility to ensure that client and regulatory obligations are met. Default rates, credit downgrades and disputes with counterparties as to the valuation of collateral increase significantly in times of market stress. Disruptions in the financial markets and other economic challenges may cause our counterparties and other third-party vendors to experience significant cash flow problems or even render them insolvent, which may expose us to significant costs and impair our ability to conduct business.
Weaknesses or failures within a third-party vendor's internal processes or systems, or inadequate business continuity plans, can materially disrupt our business operations. Also, third-party vendors may lack the necessary infrastructure or resources to effectively safeguard our confidential data. If we are unable to effectively manage the risks associated with such third-party relationships, we may suffer fines, disciplinary action and reputational damage.
We may not always successfully manage actual and potential conflicts of interest that arise in our business.
Increasingly, we must manage actual and potential conflicts of interest, including situations where our services to a particular client conflict, or are perceived to conflict, with the interests of another client. Failure to adequately address potential conflicts of interest could adversely affect our reputation, results of operations and business prospects.
We have procedures and controls that are designed to identify and mitigate conflicts of interest, including those designed to prevent the improper sharing of information. However, appropriately managing conflicts of interest is complex. Our reputation could be damaged and the willingness of clients to enter into transactions in which such a conflict might arise may be affected if we fail, or appear to fail, to deal appropriately with actual or perceived conflicts of interest. In addition, potential or perceived conflicts could give rise to litigation or regulatory enforcement actions.
Maintaining adequate liquidity for our general business needs depends on certain factors, including operating cash flows and our access to credit on reasonable terms.
Our financial condition is dependent on our cash flow from operations, which is subject to the performance of the capital markets, our ability to maintain and grow AUM and other factors beyond our control. Our ability to issue public or private debt on reasonable terms may be limited by adverse market conditions, our profitability, our creditworthiness as perceived by lenders and changes in government regulations, including tax rates and interest rates. Furthermore, our access to credit on reasonable terms is partially dependent on our firm’s credit ratings.
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Both Moody’s Investors Service, Inc. and Standard & Poor's Rating Service affirmed AB’s long-term and short-term credit ratings and indicated a stable outlook in 2021. Future changes in our credit ratings are possible and any downgrade to our ratings is likely to increase our borrowing costs and limit our access to the capital markets. If this occurs, we may be forced to incur unanticipated costs or revise our strategic plans, which could have a material adverse effect on our financial condition, results of operations and business prospects.
An impairment of goodwill may occur.

Determining whether an impairment of the goodwill asset exists requires management to exercise a substantial amount of judgment. In addition, to the extent that securities valuations are depressed for prolonged periods of time and/or market conditions deteriorate, or if we experience significant net redemptions, our AUM, revenues, profitability and unit price will be adversely affected. Although the price of an AB Holding Unit is just one factor in the calculation of fair value, if AB Holding Unit price levels decline significantly, reaching the conclusion that fair value exceeds carrying value will, over time, become more difficult. In addition, control premiums, industry earnings multiples and discount rates are impacted by economic conditions. As a result, subsequent impairment tests may occur more frequently and be based on more negative assumptions and future cash flow projections, and may result in an impairment of goodwill. An impairment may result in a material charge to our earnings. For additional information about our impairment testing, see Item 7.

We may engage in strategic transactions that could pose risks.

As part of our business strategy, we consider potential strategic transactions, including acquisitions, dispositions, mergers, consolidations, joint ventures and similar transactions, some of which may be material. These transactions, if undertaken, may involve various risks and present financial, managerial and operational challenges, including:.

adverse effects on our earnings if acquired intangible assets or goodwill become impaired;
existence of unknown liabilities or contingencies that arise after closing;
potential disputes with counterparties; and
potential dilution to our existing unitholders, if we fund the purchase price of a transaction with AB Units or AB Holding Units.
Acquisitions also pose the risk that any business we acquire may lose customers or employees or could underperform relative to expectations. Additionally, the loss of investment personnel poses the risk that we may lose the AUM we expected to manage, which could adversely affect our results of operations. Furthermore, strategic transactions may require us to increase our leverage or, if we issue AB Units or AB Holding Units to fund an acquisition, would dilute the holdings of our existing Unitholders.

Fluctuations in the exchange rates between the U.S. dollar and various other currencies can adversely affect our AUM, revenues and results of operations.

Although significant portions of our net revenues and expenses, as well as our AUM, presently are denominated in U.S. dollars, we have subsidiaries and clients outside of the United States with functional currencies other than the U.S. dollar. Weakening of these currencies relative to the U.S. dollar adversely affects the value in U.S. dollar terms of our revenues and our AUM denominated in these other currencies. Accordingly, fluctuations in U.S. dollar exchange rates affect our AUM, revenues and reported financial results from one period to the next.


We may not be successful in our efforts to hedge our exposure to such fluctuations, which could negatively impact our revenues and reported financial results.

Our seed capital investments are subject to market risk. While we enter into various futures, forwards, swap and option contracts to economically hedge many of these investments, we also may be exposed to market risk and credit-related losses in the event of non-performance by counterparties to these derivative instruments.

We have a seed investment program for the purpose of building track records and assisting with the marketing initiatives pertaining to our firm's new products. These seed capital investments are subject to market risk. Our risk management team oversees a seed hedging program that attempts to minimize this risk, subject to practical and cost considerations. Also, not all seed investments are deemed appropriate to hedge, and in those cases we are exposed to market risk. In addition, we may be subject to basis risk in that we cannot always hedge with precision our market exposure and, as a result, we may be subject to relative spreads between market sectors. As a result, volatility in the capital markets may cause significant changes in our period-to-period financial and operating results.

We use various derivative instruments, including futures, forwards, swap and option contracts, in conjunction with our seed hedging program.  While in most cases broad market risks are hedged, our hedges are imperfect and some market risk remains. In addition, our use of derivatives results in counterparty risk (i.e., the risk that we may be exposed to credit-related losses in the event of non-performance by counterparties to these derivative instruments), regulatory risk (e.g., short selling restrictions) and cash/synthetic basis risk (i.e., the risk that the underlying positions do not move identically to the related derivative instruments).

The revenues generated by Bernstein Research Services may be adversely affected by circumstances beyond our control, including declines in brokerage transaction rates, declines in global market volumes, failure to settle our trades by significant counterparties and the effects of MiFID II.

Electronic, or “low-touch”, trading represents a significant percentage of buy-side trading activity and typically produces transaction fees that are significantly lower than the price of traditional full service fee rates. As a result, blended pricing throughout our industry is lower now than it was historically, and price declines may continue. In addition, fee rates we charge and charged by other brokers for brokerage services have historically experienced price pressure, and we expect these trends to continue. Also, while increases in transaction volume and market share often can offset decreases in rates, this may not continue.

In addition, the failure or inability of any of our broker-dealer's significant counterparties to perform could expose us to substantial expenditures and adversely affect our revenues. For example, SCB LLC, as a member of clearing and settlement organizations, would be required to settle open trades of any non-performing counterparty. This exposes us to the mark-to-market adjustment on the trades between trade date and settlement date, which could be significant, especially during periods of severe market volatility. Also, our ability to access liquidity in such situations may be limited by what our funding relationships are able to offer us at such times.

We discuss the risks associated with the second installment of the Markets in Financial Instruments Directive II (“MiFID II”) below in this Item 1A.
The individuals, third-party vendors or issuers on whom we rely to perform services for us or our clients may be unable or unwilling to honor their contractual obligations to us.

We rely on various counterparties and other third-party vendors to augment our existing investment, operational, financial and technological capabilities, but the use of a third-party vendor does not diminish AB's responsibility to ensure that client and regulatory obligations are met. Default rates, credit downgrades and disputes with counterparties as to the valuation of collateral increase significantly in times of market stress. Disruptions in the financial markets and other economic challenges may cause our counterparties and other third-party vendors to experience significant cash flow problems or even render them insolvent, which may expose us to significant costs and impair our ability to conduct business.

Weaknesses or failures within a third-party vendor's internal processes or systems, or inadequate business continuity plans, can materially disrupt our business operations. Also, third-party vendors may lack the necessary infrastructure or resources to effectively safeguard our confidential data. If we are unable to effectively manage the risks associated with such third-party relationships, we may suffer fines, disciplinary action and reputational damage.





We may not accurately value the securities we hold on behalf of our clients or our company investments.

In accordance with applicable regulatory requirements, contractual obligations or client direction, we employ procedures for the pricing and valuation of securities and other positions held in client accounts or for company investments. We have established a Valuation Committee, composed of senior officers and employees, which oversees pricing controls and valuation processes. If market quotations for a security are not readily available, the Valuation Committee determines a fair value for the security.

Extraordinary volatility in financial markets, significant liquidity constraints or our failure to adequately consider one or more factors when determining the fair value of a security based on information with limited market observability could result in our failing to properly value securities we hold for our clients or investments accounted for on our balance sheet. Improper valuation likely would result in our basing fee calculations on inaccurate AUM figures, our striking incorrect net asset values for company-sponsored mutual funds or hedge funds or, in the case of company investments, our inaccurately calculating and reporting our financial condition and operating results. Although the overall percentage of our AUM that we fair value based on information with limited market observability is not significant, inaccurate fair value determinations can harm our clients, create regulatory issues and damage our reputation.

We may not have sufficient information to confirm or review the accuracy of valuations provided to us by underlying external managers for the funds in which certain of our alternative investment products invest.

Certain of our alternative investment services invest in funds managed by external managers (“External Managers”) rather than investing directly in securities and other instruments. As a result, our abilities will be limited with regard to (i) monitoring such investments, (ii) regularly obtaining complete, accurate and current information with respect to such investments and (iii) exercising control over such investments. Accordingly, we may not have sufficient information to confirm or review the accuracy of valuations provided to us by External Managers. In addition, we will be required to rely on External Managers’ compliance with any applicable investment guidelines and restrictions. Any failure of an External Manager to operate within such guidelines or to provide accurate information with respect to the investment could subject our alternative investment products to losses and cause damage to our reputation.
The quantitative models we use in certain of our investment services may contain errors, resulting in imprecise risk assessments and unintended output.

We use quantitative models in a variety of our investment services, generally in combination with fundamental research. These models are developed by senior quantitative professionals and typically are implemented by IT professionals. Our Model Risk Oversight Committee oversees the model governance framework and associated model review activities, which are then executed by our Model Risk Team. However, due to the complexity and large data dependency of such models, it is possible that errors in the models could exist and our controls could fail to detect such errors. Failure to detect errors could result in client losses and reputational damage.

We may not always successfully manage actual and potential conflicts of interest that arise in our business.

Increasingly, we must manage actual and potential conflicts of interest, including situations where our services to a particular client conflict, or are perceived to conflict, with the interests of another client. Failure to adequately address potential conflicts of interest could adversely affect our reputation, results of operations and business prospects.

We have procedures and controls that are designed to identify and mitigate conflicts of interest, including those designed to prevent the improper sharing of information. However, appropriately managing conflicts of interest is complex. Our reputation could be damaged and the willingness of clients to enter into transactions in which such a conflict might arise may be affected if we fail, or appear to fail, to deal appropriately with actual or perceived conflicts of interest. In addition, potential or perceived conflicts could give rise to litigation or regulatory enforcement actions.

Technology failures and disruptions, including failures to properly safeguard confidential information, can significantly constrain our operations and result in significant time and expense to remediate, which could result in a material adverse effect on our results of operations and business prospects.

We are highly dependent on software and related technologies throughout our business, including both proprietary systems and those provided by third-party vendors. We use our technology to, among other things, obtain securities pricing information, process client transactions, store and maintain data, and provide reports and other services to our clients. Despite our protective measures, including measures designed to effectively secure information through system security technology and established and tested business continuity plans, we may still experience system delays and interruptions as a result of natural disasters, hardware failures,

software defects, power outages, acts of war and third-party failures. We cannot predict with certainty all of the adverse effects that could result from our failure, or the failure of a third party, to efficiently address and resolve these delays and interruptions. These adverse effects could include the inability to perform critical business functions or failure to comply with financial reporting and other regulatory requirements, which could lead to loss of client confidence, reputational damage, exposure to disciplinary action and liability to our clients.

Many of the software applications that we use in our business are licensed from, and supported, upgraded and maintained by, third-party vendors. A suspension or termination of certain of these licenses or the related support, upgrades and maintenance could cause temporary system delays or interruption. Additionally, technology rapidly evolves and we cannot guarantee that our competitors may not implement more advanced technology platforms for their products and services, which may place us at a competitive disadvantage and adversely affect our results of operations and business prospects.

Also, we could be subject to losses if we fail to properly safeguard sensitive and confidential information. As part of our normal operations, we maintain and transmit confidential information about our clients as well as proprietary information relating to our business operations. Although we take protective measures, our systems still could be vulnerable to cyber attack or other forms of unauthorized access (including computer viruses) that have a security impact, such as an authorized employee or vendor inadvertently or intentionally causing us to release confidential or proprietary information. Such disclosure could, among other things, allow competitors access to our proprietary business information and require significant time and expense to investigate and remediate the breach. Moreover, loss of confidential client information could harm our reputation and subject us to liability under laws that protect confidential personal data, resulting in increased costs or loss of revenues.

Any significant security breach of our information and cyber security infrastructure, as well as our failure to properly escalate and respond to such an incident, may significantly harm our operations and reputation.
It is critical that we ensure the continuity and effectiveness of our information and cyber security infrastructure, policies, procedures and capabilities to protect our computer and telecommunications systems and the data that reside on or are transmitted through them and contracted third-party systems. Although we take protective measures, including measures to effectively secure information through system security technology, our technology systems may still be vulnerable to unauthorized access, computer viruses or other events that have a security impact, such as an external attack by one or more cyber criminals (including phishing attacks attempting to obtain confidential information and ransomware attacks attempting to block access to a computer system until a sum of money is paid), which could materially harm our operations and reputation. Additionally, while we take precautions to password protect and encrypt our laptops and sensitive information on our other mobile electronic devices, if such devices are stolen, misplaced or left unattended, they may become vulnerable to hacking or other unauthorized use, creating a possible security risk and resulting in potentially costly actions by us.
Furthermore, although we maintain a robust cyber security infrastructure and incident preparedness strategy, which we test periodically, we may be unable to respond, both internally and externally, to a cyber incident in a sufficiently expeditious manner. Any such failure could cause significant harm to our reputation and result in litigation, regulatory scrutiny and/or significant remediation costs.
Unpredictable events, including climate change, natural disaster, dangerous weather conditions, technology failure, terrorist attack and political unrest, may adversely affect our ability to conduct business.

War, terrorist attack, political unrest, power failure, climate change, natural disaster and rapid spread of infectious diseases could interrupt our operations by:

causing disruptions in global economic conditions, thereby decreasing investor confidence and making investment products generally less attractive;
inflicting loss of life;
triggering large-scale technology failures or delays;
breaching our information and cyber security infrastructure; and
requiring substantial capital expenditures and operating expenses to remediate damage and restore operations.
Despite the contingency plans and facilities we have in place, including system security measures, information back-up and disaster recovery processes, our ability to conduct business may be adversely affected by a disruption in the infrastructure that supports our operations and the communities in which they are located. This may include a disruption involving electrical, communications, transportation or other services we may use or third parties with which we conduct business. If a disruption occurs in one location and our employees in that location are unable to occupy our offices or communicate with or travel to other locations, our ability

to conduct business with and on behalf of our clients may suffer, and we may not be able to successfully implement contingency plans that depend on communication or travel. Furthermore, unauthorized access to our systems as a result of a security breach, the failure of our systems, or the loss of data could give rise to legal proceedings or regulatory penalties under laws protecting the privacy of personal information, disrupt operations, and damage our reputation.

Our operations require experienced, professional staff. Loss of a substantial number of such persons or an inability to provide properly equipped places for them to work may, by disrupting our operations, adversely affect our financial condition, results of operations and business prospects. In addition, our property and business interruption insurance may not be adequate to compensate us for all losses, failures or breaches that may occur.

Our own operational failures or those of third parties on which we rely, including failures arising out of human error, could disrupt our business, damage our reputation and reduce our revenues.

Weaknesses or failures in our internal processes or systems could lead to disruption of our operations, liability to clients, exposure to disciplinary action or harm to our reputation. Our business is highly dependent on our ability to process, on a daily basis, large numbers of transactions, many of which are highly complex, across numerous and diverse markets. These transactions generally must comply with client investment guidelines, as well as stringent legal and regulatory standards.

Our obligations to clients require us to exercise skill, care and prudence in performing our services. Despite our employees being highly trained and skilled, the large number of transactions we process makes it highly likely that errors will occasionally occur. If we make a mistake in performing our services that causes financial harm to a client, we have a duty to act promptly to put the client in the position the client would have been in had we not made the error. The occurrence of mistakes, particularly significant ones, can have a material adverse effect on our reputation, results of operations and business prospects.

The insurance that we maintain may not fully cover all potential exposures.

We maintain professional liability, fidelity, cyber, property, casualty, business interruption and other types of insurance, but such insurance may not cover all risks associated with the operation of our business. Our coverage is subject to exclusions and limitations, including high self-insured retentions or deductibles and maximum limits and liabilities covered. In addition, from time to time, various types of insurance may not be available on commercially acceptable terms or, in some cases, at all. We can make no assurance that a claim or claims will be covered by our insurance policies or, if covered, will not exceed our available insurance coverage, or that our insurers will remain solvent and meet their obligations.
In the future, we may not be able to obtain coverage at current levels, if at all, and our premiums may increase significantly on coverage that we maintain. Also, we currently are party to certain joint insurance arrangements with subsidiaries of EQH. If our affiliates choose not to include us as insured parties under any such policies, we may need to obtain stand-alone insurance coverage, which could have coverage terms that are less beneficial to us and/or cost more.
Legal and Regulatory-related Risks
Our business is subject to pervasive, complex and continuously evolving global regulation, compliance with which involves substantial expenditures of time and money, and violation of which may result in material adverse consequences.

Virtually all aspects of our business are subject to federal and state laws and regulations, rules of securities regulators and exchanges, and laws and regulations in the foreign jurisdictions in which our subsidiaries conduct business. If we violate these laws or regulations, we could be subject to civil liability, criminal liability or sanction, including restriction or revocation of our and our subsidiaries’ professional licenses or registrations, revocation of the licenses of our employees, censures, fines, or temporary suspension or permanent bar from conducting business. Any such liability or sanction could have a material adverse effect on our financial condition, results of operations and business prospects. A regulatory proceeding, even if it does not result in a finding of wrongdoing or sanction, could require substantial expenditures of time and money and could potentially damage our reputation.

In recent years, global regulators have substantially increased their oversight of financial services. Some of the newly-adopted and proposed regulations are focused on investment management services. Others, while more broadly focused, nonetheless impact our business. Moreover, the adoption of new laws, regulations or standards and changes in the interpretation or enforcement of existing laws, regulations or standards have directly affected, and will continue to affect, our business, including making our efforts to comply more expensive and time-consuming.

For example, in 2015 the Financial Supervisory Commission in Taiwan (“(the “FSC”) implemented as of January 1, 2015, new limits on the degree to which local investors can own an offshore investment product. While certain exemptions have been available to us, should we not continue to qualify, the FSC’s rules could force some of our local resident investors to redeem their investments in our funds sold in Taiwan (and/or prevent further sales of those funds in Taiwan), some of which funds have local ownership levels

substantially above the FSC limits. This could lead to significant declines in our investment advisory and services fees and revenues earned from these funds.

In Europe, MiFID II, which became effective onin January 3, 2018, makes significant modifications to the manner in which European broker-dealers can be compensated for research. These modifications have reduced, and are believed to have significantly reduced, the overall research spend by European buy-side firms, which has decreased the revenues we derive from our European clients. Our European clients may continue to reduce their research budgets, which could result in a significant decline in our sell-side revenues.
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Also, while MiFID II is not applicable to firms operating outside of Europe, competitive and client pressures increasingly may force buy-side firms operating outside of Europe to pay for research from their own resources instead of through bundled trading commissions. IfTo the extent that occurs, we would expect that research budgets from those clients will decrease further, which could result in an additional significant decline in our sell-side revenues. Additionally, these competitive and client pressures may result in our buy-side operation paying for research out of our own resources instead of through bundled trading commissions, which could increase our firm's expenses and decrease our operating income.

Additionally, in July 2017 the Chief Executive of the U.K. Financial Conduct Authority (the “FCA”), which regulates the London Interbank Offered Rate, or “LIBOR,” as a “benchmark” or “reference rate” for various interest rate calculations, announced that the FCA will no longer persuade or compel banks to submit rates for the calculation of the LIBOR benchmark after 2021. In November 2020, the ICE Benchmark Administration Limited announced a plan to extend the date as of which most U.S. LIBOR values would cease being computed from December 31, 2021 to June 30, 2023. Although financial regulators and industry working groups have suggested alternative reference rates, global consensus on alternative rates is lacking and the process for amending existing contracts or instruments to transition away from LIBOR remains unclear. The elimination of LIBOR or changes to other reference rates or any other changes or reforms to the determination or supervision of reference rates may adversely affect the amount of interest payable or interest receivable on certain of our firm's portfolio investments. These changes may also impact the market liquidity and market value of these portfolio investments. We are finalizing our global assessment of exposure in relation to funds utilizing LIBOR based instruments and benchmarks. Further, we are prioritizing the mitigation of risks associated with the forecast changes to financial instruments and performance benchmarks referencing existing LIBOR rates, and concurrently any impact on AB portfolios and investment strategies.
Lastly, it also is uncertain how regulatory trends will further evolve, underboth in the current U.S. President's administration and abroad. For example, following the Brexit referendum in June 2016, a narrow majority of voters in athe U.K. referendum voted to exit's departure from the European Union (“Brexit”(the "EU"), but it remains unclear exactly how resulted in the U.K.’s status in relation leaving the EU Single Market on December 31, 2020. While the U.K. and the EU have agreed to a trade deal, which took effect on January 1, 2021, this deal does not include specific arrangements for financial services. Accordingly, since the European Union ("EU") will change if and when it ultimately leaves. Accordingly,start of 2021, our U.K.-based buy-side and sell-side subsidiaries are implementinghave implemented alternative arrangements in EU jurisdictions in order(utilizing AB's EU-based subsidiaries) to ensure continued operations in the Eurozone, includingEU Single Market. These arrangements are subject to potential change due to ongoing negotiations between the U.K. and the EU on future regulatory cooperation, and it is difficult to ascertain how any such changes may impact the ability of our continued abilityU.K.-based subsidiaries to market and sell various investment productsprovide services to EU-based clients in the Eurozone. In addition, any other changes in the composition of the EU’s member states may add further complexity to our global risks and operations.

future.
We are involved in various legal proceedings and regulatory matters and may be involved in such proceedings in the future, any one or combination of which could have a material adverse effect on our reputation, financial condition, results of operations and business prospects.

We may be involved in various matters, including regulatory inquiries, administrative proceedings and litigation, some of which allege significant damages, and we may be involved in additional matters in the future. Litigation is subject to significant uncertainties, particularly when plaintiffs allege substantial or indeterminate damages, the litigation is in its early stages, or when the litigation is highly complex or broad in scope.

The financial services industry is intensely competitive.

We compete on the basis of a number of factors, including our investment performance for our clients, our array of investment services, innovation, reputation and price. By having a global presence, we often face competitors with more experience and more established relationships with clients, regulators and industry participants in the relevant market, which could adversely affect our ability to expand. Furthermore, if we are unable to maintain and/or continue to improve our investment performance, our client flows may be adversely affected, which may make it more difficult for us to compete effectively.
Also, increased competition could reduce the demand for our products and services, which could have a material adverse effect on our financial condition, results of operations and business prospects. For additional information regarding competitive factors, see “Competition” in Item 1.

Structure-related Risks

The partnership structure of AB Holding and AB limits Unitholders’ abilities to influence the management and operation of AB’s business and is highly likely to prevent a change in control of AB Holding and AB.

The General Partner, as general partner of both AB Holding and AB, generally has the exclusive right and full authority and responsibility to manage, conduct, control and operate their respective businesses, except as otherwise expressly stated in their respective Amended and Restated Agreements of Limited Partnership. AB Holding and AB Unitholders have more limited voting rights on matters affecting AB than do holders of common stock in a corporation. Both Amended and Restated Agreements of Limited Partnership provide that Unitholders do not have any right to vote for directors of the General Partner and that Unitholders only can vote on certain extraordinary matters (including removal of the General Partner under certain extraordinary circumstances). Additionally, the AB Partnership Agreement includes significant restrictions on the transfer of AB Units and provisions that have the practical effect of preventing the removal of the General Partner, which provisions are highly likely to prevent a change in control of AB’s management.

AB Units are illiquid and subject to significant transfer restrictions.

There is no public trading market for AB Units and we do not anticipate that a public trading market will develop. The AB Partnership Agreement restricts our ability to participate in a public trading market or anything substantially equivalent to one by providing that any transfer that may cause AB to be classified as a “publicly traded partnership” (“PTP”) as defined in Section 7704 of the Internal Revenue Code of 1986, as amended (“(the “Code”), shall be deemed void and shall not be recognized by AB. In addition, AB Units are subject to significant restrictions on transfer, such as obtaining the written consent of AXA EquitableEQH and the General Partner pursuant to the AB Partnership Agreement. Generally, neither AXA EquitableEQH nor the General Partner will permit any transfer that it believes would create a risk that AB would be treated as a corporation for tax purposes. AXA EquitableEQH and the General Partner have implemented a transfer program that requires a seller to locate a purchaser and imposes annual volume restrictions on transfers. You may request a copy of the transfer program from our Corporate Secretary (corporate_secretary@alliancebernstein.com)corporate_secretary@alliancebernstein.com). Also, we have filed the transfer program as Exhibit 10.1510.07 to this Form 10-K.

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Changes in the partnership structure of AB Holding and AB and/or changes in the tax law governing partnerships would have significant tax ramifications.

AB Holding, having elected under Section 7704(g) of the Code to be subject to a 3.5% federal tax on partnership gross income from the active conduct of a trade or business, is a “grandfathered” PTP for federal income tax purposes. AB Holding is also subject to the 4.0% New York City unincorporated business tax (“UBT”), net of credits for UBT paid by AB. In order to preserve AB Holding’s status as a “grandfathered” PTP for federal income tax purposes, management seeks to ensure that AB Holding does not directly or indirectly (through AB) enter into a substantial new line of business. A “new line of business” includes any business that is not closely related to AB’s historical business of providing research and diversified investment management and related services to its clients. A new line of business is “substantial” when a partnership derives more than 15% of its gross income from, or uses more than 15% of its total assets in, the new line of business.

AB is a private partnership for federal income tax purposes and, accordingly, is not subject to federal and state corporate income taxes. However, AB is subject to the 4.0% UBT. Domestic corporate subsidiaries of AB, which are subject to federal, state and local income taxes, generally are included in the filing of a consolidated federal income tax return with separate state and local income tax returns being filed. Each of AB's non-U.S. corporate subsidiaries generally is subject to taxes in the foreign jurisdiction where it is located. If our business increasingly operates in countries other than the U.S., AB’s effective tax rate will increase as our international subsidiaries are subject to corporate taxes in the jurisdictions where they are located.

In order to preserve AB’s status as a private partnership for federal income tax purposes, AB Units must not be considered publicly traded. If such units were to be considered readily tradable, AB would be subject to federal and state corporate income tax on its net income. Furthermore, as noted above, should AB enter into a substantial new line of business, AB Holding, by virtue of its ownership of AB, would lose its status as a grandfathered PTP and would become subject to corporate income tax as set forth above. If AB and AB Holding were to become subject to corporate income tax as set forth above, their net income and quarterly distributions to Unitholders would be materially reduced. For information about the significant restrictions on transfer of AB Units, see the risk factor immediately above.

Additionally, past or future legislative proposals have been or may be introduced that, if enacted, could have a material adverse effect on us. We cannot predict the outcome of such legislative proposals.
If, pursuant to the Bipartisan Budget Act of 2015 ("2015 Act"), any audit by the Internal Revenue Service ("IRS") of our income tax returns for any of our taxable years beginning after December 31, 2017 results in any adjustments, the IRS may collect any resulting taxes, including any applicable penalties and interest, directly from us, in which case our net income and the cash available for quarterly Unitholder distributions may be substantially reduced.

Although the IRS, under current law, generally determines tax adjustments at the partnership level when it audits the income tax return of a partnership, the IRS, with respect to taxable years beginning on or before December 31, 2017, is required to collect any additional taxes, interest and penalties from the partnership's individual partners. The 2015 Act modifies this procedure for audits of a partnership’s taxable years beginning after December 31, 2017 and, if a partnership meets certain requirements and makes a proper election, for audits of a partnership’s taxable years beginning before January 1, 2018. We may choose to make such an election if we receive a written notice of selection for examination for an eligible taxable year or if we file, on or after January 1, 2018, an administrative adjustment request for an eligible taxable year and otherwise qualify to make such an election.

Generally, we will have the ability to collect tax liability from our Unitholders in accordance with their percentage interests during the year under audit, but there can be no assurance that we will elect to do so or be able to do so under all circumstances. If we do not collect such tax liability from our Unitholders in accordance with their percentage interests in the tax year under audit, our net income and the available cash for quarterly distributions to current Unitholders may be substantially reduced. Accordingly, our current Unitholders may bear some or all of the tax liability resulting from such audit adjustment, even if such Unitholders did not own Units during the tax year under audit. In particular, as a publicly traded partnership, our Partnership Representative

(as (as defined below) may, in certain instances, request that any “imputed underpayment” resulting from an audit be adjusted by amounts of certain of our passive losses. If we successfully make such a request, we would have to reduce suspended passive loss carryovers in a manner which is binding on the partners.

In August and December, 2018, the IRS issued final regulations providing rules relating to the operation of the partnership audit rules (the “Final Regulations”).  Pursuant to the 2015 Act and the Final Regulations, forFor taxable years beginning after December 31, 2017, a "partnership representative" that we will be required to designate a partner, or other person, with a substantial presence in the United States as the partnership representative (“(a “Partnership Representative”) and we will no longer have a “tax matters partner.” The Partnership Representative will have the sole authority to act on our behalf for purposes of, among other things, U.S. federal income tax audits and judicial review of administrative adjustments by the IRS. If we do not make such a designation, the IRS can select any person as the Partnership Representative. Any actions taken by us or by the Partnership Representative on our behalf with respect to, among other things, U.S. federal income tax audits and judicial review of administrative adjustments by the IRS, will be binding on us and our unitholders.Unitholders.

2021 Annual Report27
Table of Contents
Part I
In addition, the Final Regulations clarified the procedure under which a partnershipfor taxable years beginning after December 31, 2017, we may, electbut are not required to, make an election to require its unitholdersour Unitholders to take into account on their income tax returns an audit adjustment made to the partnership’sour income tax items.  We may, but are not required to, make suchitems, also known as a “push-out” election. In addition,Also, a partnership that is a partner of another partnership may elect to have its unitholders take an audit adjustment of the lower-tier partnership into account (i.e., the upper-tier partnership may push adjustments received from the lower-tier partnership through to the partners of the upper-tier partnership). The upper-tier partnership must timely complete the “push-out” of the adjustment in order for it to be effective. Under the Final Regulations, suchSuch election must be made by the extended due date for the return for the adjustment year of the audited partnership, regardless of whether the audited partnership is required to file a return for the adjustment year or timely files a request for an extension for its return. The Final Regulations set forthThere are a number of requirements to make a “push-out” election and we may be unable or unwilling to comply with such requirements. If we do not make a “push-out” election, we would be required to pay any tax resulting from the adjustments to our income tax items, and the cash available for distribution to unitholders would be substantially reduced.

Non-U.S. Unitholdersunitholders may be subject to a 10% withholding tax on the sale of their AB Units or AB Holding Units, which could reduce the value of such Units.

Under the 2017 Tax Cuts and Jobs Act, gainGain or loss from the sale or exchange of partnership units after November 27, 2017 by a non-U.S. unitholder are treated as effectively connected with a U.S. trade or business to the extent that the non-U.S. unitholder would have had effectively connected gain or loss on a hypothetical sale by the partnership of all of its assets at fair market value as of the date of the sale or exchange of the partnership units. The Tax Cuts and Jobs Act also imposed certain withholding requirements for the sale of partnership units by a non-U.S. unitholder and authorized the IRS to issue regulations to carry out the withholding rules in the case of publicly traded partnerships. No such regulations have been issued.  Instead, in December 2017,On November 30, 2020, the IRS issued a notice suspending the application of these newpublished final regulations (the "1446 Final Regulations") that address withholding rulestax and information reporting with respect to the disposition of publicly traded partnership units until the IRS issued related guidance. We cannot predict when or if the IRS will issue such regulations or other guidance or what the regulations or other guidance will say. If the guidance generally subjectsinterests in publicly traded partnerships to the same rules as other partnerships, then we would be subject to two different withholding regimes. Under the first regime, the recipient of the units being transferred generally will be required to withhold 10% of the amount realized by the transferring unitholder, unless the transferring unitholder provides the recipient unitholder with either proper documentation proving that the transferring unitholder is not a nonresident alien individual or foreign corporation, or with certain other statements or certifications describedengaged in IRS Notice 2018-29 that limit or relieve the recipient unitholder’s withholding obligation. Under the second regime, if the recipient unitholder fails to properly withhold, then we generally would be obligated to deduct and withhold from distributions to the recipient unitholder a tax in an amount equal to the amount the transferring unitholder failed to withhold (plus interest). Whether or not these withholding rules apply does not affect the characterization of gain or loss from the sale or exchange of partnership units by a non-U.S. unitholder as effectively connected with a U.S. trade or business. The 1446 Final Regulations end the suspension of withholding on the sale, exchange or disposition of certain interests in a publicly traded partnership, effective January 1, 2022, but place the primary responsibility for such withholding obligations for transfers effected through brokers on the broker, and not the publicly traded partnership. However, the requirement to withhold on amounts realized in connection with the sale, exchange or disposition of certain interests in a publicly traded partnership (including by brokers) is suspended under Notice 2021-51 for transfers that occur before January 1, 2023, and no withholding will apply until that date. Under the 1446 Final Regulations, a publicly traded partnership may be liable for any under-withholding by a broker that relies on a qualified notice for which the publicly traded partnership failed to make a reasonable estimate of the amounts required for determining the applicability of the "ten percent exception." The "ten percent exception" applies if, either (1) the publicly traded partnership was not engaged in a U.S. trade or business during a specified period of time, or (2) upon a hypothetical sale of the publicly traded partnership's assets at fair market value, (i) the amount of net gain that would have been effectively connected with the conduct of a trade or business within the United States would be less than 10 percent of the total net gain, or (ii) no gain would have been effectively connected with the conduct of a trade or business in the United States.
We may be liable for any under-withholding by nominees on our Unitholder distributions after January 1, 2023.
Under the 1446 Final Regulations, for distributions made after January 1, 2022, a publicly traded partnership must post on its primary public website (and keep accessible for 10 years), and deliver to any registered holder that is a nominee, a qualified notice that states the amount of a distribution that is attributable to each type of income group specified in the 1446 Final Regulations. If the qualified notice is incorrect such that it causes a broker to under-withhold with respect to an amount in excess of cumulative net income, the publicly traded partnership is liable for any under-withholding on such amount. Notice 2021-51 suspends these requirements for distributions made before January 1, 2023.
28AllianceBernstein
Table of Contents
Part I
Item 1B. Unresolved Staff Comments

Neither AB nor AB Holding has unresolved comments from the staff of the SEC to report.


Item 2. Properties

Our principal executive officesheadquarters is located at 501 Commerce Street, Nashville, Tennessee. We occupy 218,976 square feet of space at this location under a 15-year lease agreement that commenced in the fourth quarter of 2020.
We lease space at our other principal location, 1345 Avenue of the Americas, New York, New York are occupiedYork. We occupy this space pursuant to a lease expiring in 2024. At this location, we currently lease 992,043999,963 square feet of space, within which we currently occupy approximately 523,373512,284 square feet of space and have sub-let (or are seeking to sub-let) approximately 468,670 square feet of space. We also lease space at one other location in New York City with a lease expiration of December 31, 2019.
In addition, we lease approximately 229,147 square feet of space at One North Lexington, White Plains, New York under a lease expiring in 2021 with options to extend to 2031. At this location, we currently occupy approximately 69,013 square feet of space and have sub-let (or are seeking to sub-let) approximately 160,134487,679 square feet of space.

WeAlso, we entered into a short-term lease for office space in Nashville, Tennessee during the construction of our new corporate headquarters at 501 Commerce Street, which we will vacate upon completion of 501 Commerce Street.

We entered into a 15-year20-year lease agreement in Nashville, Tennessee,New York, New York, at 501 Commerce Street,66 Hudson Boulevard, for 205,000165,608 square feet that is expected to commence in July of 2020.
2024.
We also lease 92,06750,792 square feet of space in San Antonio, Texas under a lease expiring in 2019 with options to extend to 2029.  At this location, we currently occupy approximately 59,004 square feet of space and have sub-let approximately 33,063 square feet of space. We have renewed 50,792 square feet for ten years, expiring in 2029.
 
In addition, we lease less significantmore modest amounts of space in 2123 other cities in the United States.
Our subsidiaries lease space in 2830 cities outside the United States, the most significant of which are two leases in London, England, under aone lease expiring in 2022 and a second lease expiring in 2031, and in Hong Kong, China, under a lease expiring in 2027. In London, we currently lease 65,488 square feet of space, within which we currently occupy approximately 54,746 square feet of space and have sub-let approximately 10,742 square feet of space.space, which will expire in 2022. In 2021, we signed a 10-year lease for 52,814 square feet for an additional London location that we expect to occupy by the fourth quarter of 2022. In Hong Kong, we currently lease and occupy 35,878 square feet of space.

Item 3. Legal Proceedings

With respect to all significant litigation matters, we consider the likelihood of a negative outcome. If we determine the likelihood of a negative outcome is probable and the amount of the loss can be reasonably estimated, we record an estimated loss for the expected outcome of the litigation. If the likelihood of a negative outcome is reasonably possible and we are able to determine an estimate of the possible loss or range of loss in excess of amounts already accrued, if any, we disclose that fact together with the estimate of the possible loss or range of loss. However, it is often difficult to predict the outcome or estimate a possible loss or range of loss because litigation is subject to inherent uncertainties, particularly when plaintiffs allege substantial or indeterminate damages. Such is also the case when the litigation is in its early stages or when the litigation is highly complex or broad in scope. In these cases, we disclose that we are unable to predict the outcome or estimate a possible loss or range of loss.

WeAB may be involved in various matters, including regulatory inquiries, administrative proceedings and litigation, some of which may allege significant damages. It is reasonably possible that we could incur losses pertaining to these matters, but managementwe cannot currently estimate any such losses.

Management, after consultation with legal counsel, currently believes that the outcome of any individual matter that is pending or threatened, or all of them combined, will not have a material adverse effect on our results of operations, financial condition or liquidity. However, any inquiry, proceeding or litigation has an element of uncertainty; management cannot determine whether further developments relating to any individual matter that is pending or threatened, or all of them combined, will have a material adverse effect on our results of operation, financial condition or liquidity in any future reporting period.

Item 4. Mine Safety Disclosures

Not applicable.

PART II
2021 Annual Report29

Table of Contents
Part II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market for AB Holding Units and AB Units; Cash Distributions

AB Holding Units are listed on the NYSE and trade publicly under the ticker symbol “AB.”“AB". There is no established public trading market for AB Units, which are subject to significant restrictions on transfer. For information about these transfer restrictions, see “Structure-related Risks” in Item 1A.

AB Holding’s principal source of income and cash flow is attributable to its limited partnership interests in AB.

Each of AB Holding and AB distributes on a quarterly basis all of its Available Cash Flow, as defined in the AB Holding Partnership Agreement and the AB Partnership Agreement, respectively, to its Unitholders and the General Partner. For additional information concerning distribution of Available Cash Flow by AB Holding, see Note 2 to AB Holding’s financial statements in Item 8. For additional information concerning distribution of Available Cash Flow by AB, see Note 2 to AB’s consolidated financial statements in Item 8.

On December 31, 2018, the last trading day during 2018,2021, the closing price of an AB Holding Unit on the NYSE was $27.32$48.84 per Unit. On December 31, 2018,2021, there were (i) 929928 AB Holding Unitholders of record for approximately 79,00082,000 beneficial owners, and (ii) 381317 AB Unitholders of record (we do not believe there are substantial additional beneficial owners).

Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities

We did not engage in any unregistered sales of our securities during the years ended December 31, 2018, 20172021, 2020 and 2016.

2019.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers

Each quarter, since the third quarter of 2011, AB has implemented plansconsiders whether to implement a plan to repurchase AB Holding Units pursuant to Rules 10b5-1 and 10b-18 under the Exchange Act. TheWe did not, however, adopt a plan adopted during the fourth quarter of 2018 expired at the close of business on February 12, 2019.2021. AB may adopt additional plans in the future to engage in open-market purchases of AB Holding Units to help fund anticipated obligations under the firm’s incentive compensation award program and for other corporate purposes. For additional information about Rule 10b5-1 plans, see “Units Outstanding” in Item 7.


30AllianceBernstein
Table of Contents
Part II
AB Holding Units bought by us or one of our affiliates during the fourth quarter of 20182021 are as follows:

Issuer Purchases of Equity Securities
 
Total
Number of
AB Holding
Units
Purchased
 
Average
Price Paid
Per AB
Holding Unit,
net of
Commissions
 
Total
Number of
AB Holding
Units
Purchased as
Part of
Publicly
Announced
Plans or
Programs
 
Maximum
Number (or
Approximate
Dollar Value)
of AB
Holding
Units that
May Yet Be
Purchased
Under the
Plans or
Programs
Period       
10/1/18-10/31/18(1)(2)
632,466
 $29.59
 —
 —
11/1/18-11/30/18(1)(2)
881,840
 29.56
 —
 —
12/1/18-12/31/18(1)(2)
4,973,748
 28.16
 —
 —
Total6,488,054
 $28.49
 —
 —

(1)During the fourth quarter of 2018, we purchased 2,781,168 AB Holding Units from employees to allow them to fulfill statutory withholding tax requirements at the time of distribution of long-term incentive compensation awards.
(2)During the fourth quarterIssuer Purchases of 2018, we purchased 3,706,886 AB Holding Units on the open market pursuant to a Rule 10b5-1 plan to help fund anticipated obligations under our incentive compensation award program.Equity Securities

PeriodTotal
Number of
AB Holding
Units
Purchased		Average
Price Paid
Per AB
Holding Unit,
net of
Commissions		Total
Number of
AB Holding
Units
Purchased as
Part of
Publicly
Announced
Plans or
Programs		Maximum
Number (or
Approximate
Dollar Value)
of AB
Holding
Units that
May Yet Be
Purchased
Under the
Plans or
Programs
10/1/21-10/31/21(1)(2)
281,579$50.46 — —
11/1/21-11/30/21— — — —
12/1/21-12/31/21(1)
2,449,65749.95— —
Total2,731,236$50.00 — —
(1)During the fourth quarter of 2021, we purchased 2,449,716 AB Holding Units from employees to allow them to fulfill statutory withholding tax requirements at the time of distribution of long-term incentive compensation awards.
(2)During the fourth quarter of 2021, we purchased 281,520 AB Holding Units on the open market pursuant to a Rule 10b5-1 plan to help fund anticipated obligations under our incentive compensation award program.
Neither we nor our affiliates bought any AB Units bought by us or one of our affiliates during the fourth quarter of 2018 are as follows:2021.

Issuer Purchases of Equity Securities 
 
Total Number
of
AB
Units
Purchased
 
Average
Price Paid
Per
AB
Unit, net of
Commissions
 
Total
Number of
AB
Units Purchased as
Part of
Publicly
Announced
Plans or
Programs
 
Maximum
Number (or
Approximate
Dollar Value)
of AB
Units that
May Yet Be
Purchased
Under the
Plans or
Programs
Period       
10/1/18-10/31/18—
 $—
 —
 —
11/1/18-11/30/18—
 —
 —
 —
12/1/18-12/31/18(1)
800
 29.78
 —
 —
Total800
 $29.78
 —
 —

(1)2021 Annual ReportDuring December 2018, we purchased 800 AB Units in a private transaction.31


Table of Contents
Part II
Item 6. Selected Financial Data[Reserved]


AllianceBernstein Holding L.P.

 Years Ended December 31,
 2018 2017 2016 2015 2014
 (in thousands, except per unit amounts)
INCOME STATEMENT DATA: 
Equity in net income attributable to AB Unitholders$270,647
 $232,393
 $239,389
 $210,084
 $200,931
Income taxes28,250
 24,971
 22,803
 24,320
 22,463
Net income$242,397
 $207,422
 $216,586
 $185,764
 $178,468
Basic net income per unit$2.50
 $2.19
 $2.24
 $1.87
 $1.84
Diluted net income per unit$2.50
 $2.19
 $2.23
 $1.86
 $1.84
CASH DISTRIBUTIONS PER UNIT(1)
$2.68
 $2.30
 $1.92
 $1.86
 $1.86
BALANCE SHEET DATA AT PERIOD END: 
  
  
  
  
Total assets$1,490,701
 $1,544,704
 $1,540,508
 $1,576,120
 $1,616,461
Partners’ capital$1,490,057
 $1,543,550
 $1,539,889
 $1,575,846
 $1,616,079
________________________
(1)32AB Holding is required to distribute all of its Available Cash Flow, as defined in the AB Holding Partnership Agreement, to its Unitholders; for all years presented, the cash distributions per unit reflect the impact of AB’s non-GAAP adjustments.


AllianceBernstein L.P.

Selected Consolidated Financial Data

 
Years Ended December 31,(1)
 2018 2017 2016 2015 2014
 (in thousands, except per unit amounts and unless otherwise indicated)
INCOME STATEMENT DATA: 
Revenues:         
Investment advisory and services fees$2,362,211
 $2,201,305
 $1,933,471
 $1,973,837
 $1,958,250
Bernstein research services439,432
 449,919
 479,875
 493,463
 482,538
Distribution revenues418,562
 412,063
 384,405
 427,156
 444,970
Dividend and interest income98,226
 71,162
 46,939
 24,872
 22,322
Investment gains (losses)2,653
 92,102
 93,353
 3,551
 (9,076)
Other revenues98,676
 97,135
 99,859
 101,169
 108,788
Total revenues3,419,760
 3,323,686
 3,037,902
 3,024,048
 3,007,792
Less: interest expense52,399
 25,165
 9,123
 3,321
 2,426
Net revenues3,367,361
 3,298,521
 3,028,779
 3,020,727
 3,005,366
          
Expenses: 
        
Employee compensation and benefits:         
Employee compensation and benefits1,378,811
 1,313,469
 1,229,721
 1,267,926
 1,265,664
Promotion and servicing: 
    
    
Distribution-related payments427,186
 411,467
 363,603
 384,425
 404,213
Amortization of deferred sales commissions21,343
 31,886
 41,066
 49,145
 41,508
Trade execution, marketing, T&E and other222,630
 213,275
 216,542
 232,023
 233,417
General and administrative: 
  
  
    
General and administrative448,996
 481,488
 426,147
 431,635
 426,960
Real estate charges7,160
 36,669
 17,704
 998
 52
Contingent payment arrangements(2,219) 267
 (20,245) (5,441) (2,782)
Interest on borrowings10,359
 8,194
 4,765
 3,119
 2,797
Amortization of intangible assets27,781
 27,896
 26,311
 25,798
 24,916
Total expenses2,542,047
 2,524,611
 2,305,614
 2,389,628
 2,396,745
Operating income825,314
 773,910
 723,165
 631,099
 608,621
Income taxes45,816
 53,110
 28,319
 44,797
 44,304
Net income779,498
 720,800
 694,846
 586,302
 564,317
Net income of consolidated entities attributable to non-controlling interests21,910
 58,397
 21,488
 6,375
 456
Net income attributable to AB Unitholders$757,588
 $662,403
 $673,358
 $579,927
 $563,861
Basic net income per AB Unit$2.79
 $2.46
 $2.48
 $2.11
 $2.07
Diluted net income per AB Unit$2.78
 $2.45
 $2.47
 $2.10
 $2.07
Operating margin(2)
23.9% 21.7% 23.2% 20.7% 20.2%
CASH DISTRIBUTIONS PER AB UNIT(3)
$2.96
 $2.57
 $2.15
 $2.11
 $2.08

 
Years Ended December 31,(1)
 2018 2017 2016 2015 2014
          
BALANCE SHEET DATA AT PERIOD END: 
  
  
  
  
Total assets$8,789,098
 $9,282,734
 $8,741,158
 $7,433,721
 $7,375,621
Debt$546,267
 $565,745
 $512,970
 $581,700
 $486,156
Total capital$3,916,209
 $4,063,304
 $4,068,189
 $4,017,221
 $4,084,840
ASSETS UNDER MANAGEMENT AT PERIOD END (in millions)$516,353
 $554,491
 $480,201
 $467,440
 $474,027
AllianceBernstein
(1)
Certain prior-year amounts have been reclassified to conform to our 2018 presentation; see Note 2 to AB's financial statements in Item 8 for a discussion of reclassifications.
(2)Operating income excluding net income (loss) attributable to non-controlling interests as a percentage of net revenues.
(3) Cash distributions per AB unit reflect the impact
Table of AB's non-GAAP adjustments.Contents

Part II

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Percentage change figuresImpact of COVID-19
General Economic Conditions
COVID-19 has significantly impacted the global economy since the first quarter of 2020, and its impact may persist for months to come. While most businesses have re-opened, vaccinations are calculated using assets underprogressing in most portions of the world and leading economic indicators, other than heightened inflation, have improved significantly, the overall extent and duration of COVID-19's impact on businesses and economic activity generally remains unclear.
Various countries around the world, and most areas in the U.S., have continued to experience surges in the rates of COVID-19 infections and hospitalizations, which have resulted from the emergence and spread of virus variants (particularly the "delta variant" during the second half of 2021 and the "omicron variant" more recently), greatly increased social interactions, including at colleges and universities and social venues, after re-opening of economies, and decreased usage of mitigation techniques, such as mask-wearing and social distancing, in combination with large portions of the population remaining unvaccinated. These ongoing circumstances surrounding the virus may adversely affect consumer sentiment and the durability of business re-openings, and they also may slow economic recovery and possibly cause market volatility and even a new downturn.
AB Impact
At the onset of COVID-19 during the first quarter of 2020, we quickly responded in the various jurisdictions where we operate, including the U.S., the U.K., Hong Kong, Shanghai, Singapore and Taiwan. We implemented business continuity measures, including travel restrictions and a work-from-home requirement for almost all personnel (other than a relatively small number of employees whose physical presence in our offices was considered critical), which generally remained in place throughout 2020 and 2021 to ensure operating continuity for all critical functions. We also instituted a notification process for any employee who tests positive for COVID-19 or has been exposed to someone else who has tested positive. As the COVID-19 crisis has continued to evolve since the lockdown in the first quarter of 2020, certain key functions of the business, such as Risk Management, Business Continuity, Finance and Human Capital, have maintained constant communication and monitored the evolution of the pandemic to keep our employees safe and advise of key developments. Additionally, we continue to monitor communications from the World Health Organization and the U.S. Centers for Disease Control and Prevention, and in the third quarter of 2021 engaged an epidemiologist on a consulting basis, to ensure we have current and accurate information.
Furthermore, we have continued to enhance our virtual programs to support business functions, such as training on cybersecurity and enhancements to our existing technology platforms, which has increased the effectiveness of our remote work force. There has been a heightened focus on the emotional well-being of our employees, and we have provided regular touch points with employees through virtual town halls and management roundedcommunications. Additionally, we have maintained regular communications and updates on the virus and the Company's response, which are posted on the Company's internal website, to ensure transparent communication with our employees.
The economic impact of COVID-19 and any additional declines in the financial markets could have a significant adverse effect on our AUM and revenues, particularly if economic activity does not continue to recover and inflation continues unabated. Further, we have benefited from certain of our adjusted operating expenses declining significantly as a result of the COVID-19 pandemic, such as costs for travel and entertainment and client meetings, particularly during 2020. Although these costs increased in 2021, they have not yet returned to a normalized level. These cost savings have benefited our margins. If financial markets continue to normalize and economic activity increases, we do not anticipate continued cost savings related to COVID-19, and these savings are not indicative of our future performance. Although countries throughout the world continue to grapple with re-opening their economies, there is a significant risk that the opening process may be interrupted or reversed if infection and hospitalization rates increase. Also, any reluctance of consumers to resume spending could do long-term damage to the nearest millionglobal economy, which would have an adverse effect on our business. Additionally, as most of our workforce continues working remotely, at least part of the time, we are mindful of increased risk related to cybersecurity, which could significantly disrupt our business functions.
Ultimately, the return to normal business and financial statement amounts roundedeconomic activity will likely require the broad application of effective vaccines. The distribution of multiple safe, effective vaccines was initiated towards the end of the fourth quarter of 2020, and the distribution of such vaccines generally increased globally throughout 2021. However, the rate of new vaccinations in the U.S. plateaued, and in some areas began to decline, by the nearest thousand.end of the second quarter of 2021, and the rate at which vaccination "boosters" have been administered has lagged. If global vaccination rates do not improve further, a significant risk will remain that COVID-19 and/or a variant thereof, could accelerate global health concerns and, in so doing, cause heightened market and economic turmoil in the future.

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Executive Overview(1)
Our total assets under management ("AUM") as of December 31, 20182021 were $516.4$778.6 billion, down $38.1up $92.7 billion, or 6.9%13.5%, during 2018.2021. The decreaseincrease was driven primarily by market depreciationappreciation of $30.0$66.6 billion and net outflowsinflows of $8.1$26.1 billion (primarily due to(reflecting Retail net inflows of $20.8 billion, Private Wealth Management net inflows of $3.0 billion and Institutional outflowsnet inflows of $10.0$2.3 billion). As previously disclosed, we expect additional redemptions by AXA of low-fee retail AUM in the first half of 2022 of approximately $5 billion.
Institutional AUM decreased $23.0increased $21.5 billion, or 8.5%6.8%, to $246.3$337.1 billion during 2018,2021, primarily due to market depreciationappreciation of $13.2$19.4 billion and net outflowsinflows of $10.0 billion.$2.3 billion, primarily driven by growth in active equities. Gross sales increased $12.7$0.8 billion, (of which $7.4 billion related to Customized Retirement Strategies ("CRS") fundings) from $13.4$30.9 billion in 20172020 to $26.1$31.7 billion in 2018.2021. Redemptions and terminations increased $18.6$0.1 billion, (of which $14.1 billion related to CRS redemptions) from $11.5$23.3 billion in 20172020 to $30.1$23.4 billion in 2018.2021. Institutional sales and redemptions in 2021 include $8.7 billion in sales and $10.0 billion in redemptions associated with the reinsurance agreement entered into by Equitable Financial Life Insurance Company ("Equitable Financial") and a subsidiary of Venerable Holdings, Inc., pursuant to which Equitable Financial ceded to Venerable a portion of its legacy variable annuity business; AB remained the preferred investment manager for the General Account assets transferred
Retail AUM decreased $12.1increased $54.6 billion, or 6.3%20.6%, to $180.8$319.9 billion during 2018,2021, primarily due to market depreciationappreciation of $12.3$33.6 billion and flat net flows.inflows of $20.8 billion, primarily driven by growth in active equities. Gross sales increased $0.4$21.1 billion, from $53.8$78.9 billion in 20172020 to $54.2$100.0 billion in 2018.2021. Redemptions and terminations increased $7.9decreased $4.4 billion, from $38.6$69.5 billion in 20172020 to $46.5$65.1 billion in 2018.2021.
Private Wealth Management AUM decreased $3.0increased $16.6 billion, or 3.2%15.8%, to $89.3$121.6 billion during 2018,2021, due to market depreciationappreciation of $4.5$13.6 billion offset byand net inflows of $1.9 billion.$3.0 billion, primarily driven by growth in alternatives and multi-asset solutions. Gross sales increased $2.0$4.0 billion, from $11.5$14.3 billion in 20172020 to $13.5$18.3 billion in 2018.2021. Redemptions and terminations increased $0.4decreased $1.2 billion, from $10.6$16.5 billion in 20172020 to $11.0$15.3 billion in 2018.2021.
Bernstein Research Services ("Bernstein") revenue decreased $10.5$7.7 million, or 2.3%1.7%, in 2018.2021. The decrease was due to lower trading activity driven by a reduction in commission rates duelower global market volatility as compared to the unbundling of research services and a volume mix shift to lower fee electronic trading across all regions,COVID-related volatility in 2020. This was partially offset by a weaker U.S. dollar.higher research payments across Bernstein and Autonomous Research ("Autonomous") products.
Our 20182021 net revenues of $3.4$4.4 billion increased $0.1 billion,$733.1 million, or 2.1%19.8%, compared to the prior year's net revenues of $3.3 billion.$3.7 billion in the prior year. The most significant contributors to the increase werewas primarily driven by higher base advisory fees of $137.5$486.6 million, higher distribution revenues of $122.5 million and higher performance-based fees of $23.4 million and higher distribution revenues of $6.5 million, offset by lower investment gains revenue of $89.4 million and lower Bernstein Research Services revenue of $10.5$112.5 million. Our operating expenses of $2.5$3.2 billion increased $17.4$424.0 million, or 0.7%15.1%, compared to operating expenses of $2.8 billion in the prior year's expenses.year. The increase was primarily was due to higher employee compensation and benefits expenses of $65.3$221.8 million, and higher promotion and servicing expenses of $14.5$153.5 million offset by lowerand higher general and administrative expenses (excluding real estate charges) of $32.5 million and lower real estate charges of $29.5$64.5 million. Our operating income increased $51.4$309.0 million, or 6.6%34.1%, to $825.3 million$1.2 billion from $773.9$907.4 million in 20172020 and our operating margin increased to 27.3% in 2021 from 21.7%24.6% in 2017 to 23.9% in 2018.2020.
Market Environment
GlobalDespite a selloff in November resulting from fears surrounding inflation and the rising cases of the omicron variant, U.S. equity markets finished lowerhigher in 2018, the result of a fourth quarter sell-off driven by investor concerns over rising U.S. interest rates, a slowdown in European business confidence, weaker Chinese growth2021. The S&P 500, Dow Jones Industrial Average and rising geopolitical uncertainty, including Brexit implementation and ongoing trade tensions between the U.S. and China. Global fixed income markets were mixed forNasdaq each rallied to finish the year with higher returns for less-risky government bonds and negative credit market returns. Insolid gains. With rising inflation remaining a key concern, the U.S., while tax cuts enacted at the end of 2017 helped spur growth and corporate earnings in 2018, the benefit may not continue throughout 2019, and investors are focused on the length of the economic cycle. The U.S. Federal Reserve announced its fourth interest rate increase in December, as expected, but revised its guidance on the number of rate hikes in 2019 from three to two. Oil prices fell sharply in the fourth quarter which, when combined with higher U.S. interest rates and slowing growth, could be problematic for some emerging markets. In Europe, the Central Bank endedsignaled it would begin tapering its quantitative easing programat a faster pace and will begin raising their target interest rate in Decemberthe first half of 2022. Meanwhile, U.S. government negotiations surrounding the Build Back Better package and the Infrastructure and Investments Jobs Act continued, with concerns the fiscal stimulus could drive inflation even higher in 2022.
In the U.K., equities lagged the global gains in 2021 but rose in fourth quarter. Brexit, however, has placed constraints on labor supply and, in turn, upward pressure on wages and inflation. In response, the Bank of England raised interest rates, despite the slowdown in growth, and ongoing uncertainty around Brexit negotiations weighed on business and consumer confidence inspread of the United Kingdom.omicron variant. In China, equities significantly underperformed global equities. The People’s Bank of China reduced the reserve requirement ratio, releasing inexpensive funds for banks to lend, and announced that this cut is not the beginning of an easing cycle, but rather a regular monetary policy is easingaction. The risks in responseChina, however, around the property market will likely remain a key watchpoint over the coming months.

1Percentage change figures are calculated using assets under management rounded to slowing growth and U.S. trade tariff headwinds.the nearest million, while financial statement amounts are rounded to the nearest thousand.
While the weak and volatile market environment in 2018 provided ample opportunities for stock selection, it was another challenging year for active equity fund managers. Only 42%
34AllianceBernstein
Table of active managers beat their benchmarks for the full year, with varied results among growth, value and core managers. Despite the more volatile markets, demand for passive strategies persisted, albeit at a slower pace, and active managers struggled to attract net new assets. In the U.S., total industry-wide active mutual fund inflows of $67 billion in 2017 reversed to net outflows of $302 billion in 2018. Active equity U.S. mutual fund outflows of $259 billion in 2018 increased by 33% year-over-year as the pace of outflows accelerated in the fourth quarter, particularly in December. After $221 billion of active fixed income U.S. mutual fund inflows in 2017, flows slowed dramatically in 2018 to $13 billion. Meanwhile, total industry-wide passive mutual fund inflows of $451 billion were down 35% from last year's record $692 billion.Contents

Part II
MiFID II
In Europe, MiFID II, which became effective on January 3, 2018, makeshas made significant modifications to the manner in which European broker-dealers can be compensated for research. These modifications have reduced, and are believed to have significantly reduced the overall research spend by European buy-side firms, which has decreased the revenues we derive from our European clients. Our European clients may continue to reduce their research budgets, which could result in a significant decline in our sell-side revenues.
Also, while MiFID II is not applicable to firms operating outside of Europe, competitive and client pressures may force buy-side firms operating outside of Europe to pay for research from their own resources instead of through bundled trading commissions. If that occurs, we would expect that research budgets from those clients will decrease further, which could result in an additional significant decline in our sell-side revenues. Additionally, these competitive and client pressures may result in our buy-side operation paying for research out of our own resources instead of through bundled trading commissions, which could increase our firm's expenses and decrease our operating income.

The ultimate impact of MiFID II on payments for research globally currently isremains uncertain.
AXA Equitable Holdings IPO
During 2017, AXA S.A. ("AXA") announced its intention to pursue the sale of a minority stake in AXA Equitable Holdings, Inc. ("EQH"), the holding company for a diversified financial services organization, through an initial public offering ("IPO"). During the second quarter of 2018, EQH completed the IPO and, during the fourth quarter completed a secondary offering. As a result, AXA owns 59.2% of the outstanding common stock of EQH as of December 31, 2018.Relationship with EQH and its Subsidiaries
EQH (our parent company) and its subsidiaries have an approximate 65.2% economic interestare our largest client. EQH is collaborating with AB in order to improve the risk-adjusted yield for the General Accounts of EQH's insurance subsidiaries by investing additional assets at AB, asincluding the utilization of December 31, 2018. AXAAB's higher-fee, longer-duration alternative offerings. Equitable Financial has announced its intentionagreed to sell its entire remaining interestprovide $10 billion in EQHpermanent capital2 over time, subjectthe next three years to market conditionsbuild out AB’s private illiquid offerings, including private alternatives and private placements. We expect this anticipated capital from Equitable Financial will accelerate both organic and inorganic growth in our private alternatives business, allowing us to continue to deliver for our clients, employees, unitholders and other factors. AXA is under no obligation to do so and retains the sole discretion to determine the timing of any future sales of shares of EQH common stock.
While to date we have not experienced adverse effects from the IPO and we cannot at this time predict the eventual impact, if any, on AB of this transaction, such impact could include a reduction in the support AXA has provided to AB in the past with respect to AB's investment management business, resulting in a decrease in our revenues and ability to initiate new investment services. Also, AB relies on AXA, including its subsidiary AXA Business Services, for a number of significant services and AB benefits from its affiliation with AXA in certain common vendor relationships. Some of these arrangements are expected to change with possible negative financial implications for AB.
By letter dated March 31, 2018, AXA advised us of their current intention to continue using AB for the foreseeable future as a preferred provider of asset management services and to continue making commercial and seed investments that suit AXA from an investment perspective, in each case (i) consistent with past practice, (ii) subject to investment performance/returns and (iii) subject to applicable fiduciary duties.stakeholders.
Relocation Strategy
On May 2, 2018,As previously announced, we announced that we would establishhave established our corporate headquarters in and relocate approximately 1,050 jobs located in the New York metro area to, Nashville, TN.TN, at 501 Commerce Street. Our Nashville headquarters will househouses Finance, IT, Operations, Legal, Compliance, Internal Audit, Human Capital, and Sales and Marketing.Marketing, and at year-end we had 974 employees in Nashville. We expect to reach a total of 1,250 employees in Nashville by the end of 2024. We have begunbeen actively relocating jobs and expect this transition to take several more years. We will continue to maintain a principal location in New York City, which will househouses our Portfolio Management, Sell-Side Research and Trading, and New York-based Private Wealth Management businesses.

We believe relocating our corporate headquarters to Nashville will affordaffords us the opportunity to provide an improved quality of life alternative for our employees and enableenables us to attract and recruit new talented employees to a highly desirable location while improving the long-term cost structure of the firm.

During the transition period, which began in 2018 and is expected to continue through 2024, we currently estimate that we will incur transition costs of approximately $155between $145 million to $165$155 million. These costs include employee relocation, severance, recruitment, and overlapping compensation and occupancy costs. Over this same period, we expect to realize total expense savings of approximately $190between $205 million to $200 million, an amount greater than the total transition costs.$215 million. However, we willdid incur some transition costs before we beginbegan to realize expense savings. WeFor the period beginning in 2018 and ending in the fourth quarter of 2021, we incurred $10$97 million of cumulative transition costs compared to $89 million of cumulative savings. In addition, we incurred $27 million of transition costs for the twelve months ended December 31, 2021, compared to $43 million of expense savings, resulting in 2018. We currently anticipate thatan overall net savings of $16 million for the largest reduction inperiod. In 2021, our net income per unit ("EPU") duringincreased $0.06 as a result of our relocation strategy, which compares to the transition period will be approximately $0.07$0.04 EPU increase that occurred in 2019.2020. We also expect to achieve a slight increase in EPU in 2021 and then achieve EPU accretion in each year thereafter. Beginning in 2025, once the transition period has been completed, we estimate ongoing annual expense savings of approximately $70$75 million to $75$80 million, which will result from a combination of occupancy and compensation-related savings. Our estimates for both the transition costs and the corresponding expense savings are based uponon our current assumptions of employee relocation costs, severance, and

overlapping compensation and occupancy costs. In addition, our estimates for both the timing of when we incur transition costs and realize the related expense savings isare based on our current relocation implementation plan and the timing for execution of each phase. The actual total charges we eventually record, the related expense savings we realize, and the timing of EPU impact are expected tomay differ from our current estimates as we implement each phase of our headquarters relocation.

2 Permanent capital means investment capital of indefinite duration, which may be withdrawn under certain conditions. Although Equitable Financial has indicated its intention over time to provide this investment capital to AB, which is mutually beneficial to both firms, it has no binding commitment to do so.
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During October 2018, we signed a lease, which commencescommenced in mid-2020,the fourth quarter of 2020, relating to 205,000218,976 square feet of space at our new Nashville headquarters. Our estimated total base rent obligation (excluding taxes, operating expenses and utilities) over the 15-year initial lease term is approximately $125$134 million.

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Although we have presented many of our transition costs and annual expense savings with numerical specificity, and we believe these targets to be reasonable as of the date of this report, the uncertainties surrounding the assumptions we discuss above create a significant risk that these targets may not be achieved.  Accordingly, the expenses we actually incur and the savings we actually realize may differ from our targets, particularly if actual events adversely differ from one or more of our key assumptions.  The transition costs and expense savings, together with their underlying assumptions, are Forward-Looking Statements and can be affected by any of the factors discussed in “Risk“Risk Factors” and “Cautions“Cautions Regarding Forward-Looking Statements” in this 2021 10-K. We strongly caution investors not to place undue reliance on any of these assumptions or our cost and expensesexpense targets.  Except as may be required by applicable securities laws, we are not under any obligation, and we expressly disclaim any obligation, to update or alter any assumptions, estimates, financial goals, targets, projections or other related statements that we may make.

Adjusted Operating Margin Target
We previously adopted a goal of increasing our adjusted operating margin to a target of 30% by 2020 (the “2020 Margin Target”), subject to the assumptions, factors and contingencies described as part of the initial disclosure of this target. Our adjusted operating margin during 2018 was 29.1%.

Significant declines in the equity and certain fixed income markets during the fourth quarter of 2018, most notably in December 2018, reduced our AUM by $34.0 billion, or 6.2%, during the fourth quarter to $516.4 billion from $550.4 billion at the end of the third quarter of 2018. Given the impact we expect this lower AUM will have on our ability to generate the level of investment advisory fee revenues we initially forecast when establishing the 2020 Margin Target, presently we do not believe that achieving the 2020 Margin Target is likely. However, we are taking additional actions to better align our expenses with these lower AUM and expected revenues. We remain committed to achieving an adjusted operating margin of 30% in years subsequent to 2020 and will take continued actions in this regard, subject to prevailing market conditions and the evolution of our business mix.

AB Holding

AB Holding’s principal source of income and cash flow is attributable to its investment in AB Units. The AB Holding financial statements, and notes to the financial statements and management’s discussion and analysis of financial condition and results of operations (“MD&A”) should be read in conjunction with those of AB.

Results of Operations
Years Ended December 31% Change
2021202020192021-202020-19
(in thousands, except per unit amounts)
Net income attributable to AB Unitholders$1,148,623 $865,952 $752,042 32.6 %15.1 %
Weighted average equity ownership interest36.2 %35.6 %35.4 %
Equity in net income attributable to AB Unitholders$416,326 $308,404 $266,292 35.0 15.8 
Income taxes30,483 29,024 27,729 5.0 4.7 
Net income of AB Holding$385,843 $279,380 $238,563 38.1 17.1 
Diluted net income per AB Holding Unit$3.88 $2.88 $2.49 34.7 15.7 
Distributions per AB Holding Unit (1)
$3.90 $2.91 $2.53 34.0 15.0 
 Years Ended December 31, % Change
 2018 2017 2016 2018-17 2017-16
 (in thousands, except per unit amounts)    
Net income attributable to AB Unitholders$757,588
 $662,403
 $673,358
 14.4% (1.6)%
Weighted average equity ownership interest35.7% 35.1% 35.6%    
Equity in net income attributable to AB Unitholders$270,647
 $232,393
 $239,389
 16.5
 (2.9)
Income taxes28,250
 24,971
 22,803
 13.1
 9.5
Net income of AB Holding$242,397
 $207,422
 $216,586
 16.9
 (4.2)
Diluted net income per AB Holding Unit$2.50
 $2.19
 $2.23
 14.2
 (1.8)
Distributions per AB Holding Unit (1)
$2.68
 $2.30
 $1.92
 16.5
 19.8
(1)Distributions reflect the impact of AB’s non-GAAP adjustments.
________________________
(1)Distributions reflect the impact of AB’s non-GAAP adjustments.

AB Holding had net income of $242.4$385.8 million in 20182021 compared to $207.4$279.4 million in 2017,2020, reflecting higher net income attributable to AB Unitholders and higher weighted average equity ownership interest. AB Holding had net income of $207.4$279.4 million in 2017

as2020 compared to $216.6$238.6 million in 2016. The decrease reflected lower2019, reflecting higher net income attributable to AB Unitholders and lower weighted average equity ownership interest.Unitholders.

AB Holding's partnership gross income is derived from its interest in AB. AB Holding’s income taxes, which reflect a 3.5% federal tax on its partnership gross income from the active conduct of a trade or business, are computed by multiplying certain AB qualifying revenues (primarily U.S. investment advisory fees, brokerage commissions and brokerage commissions)direct payments for research services) by AB Holding’s ownership interest in AB, multiplied by the 3.5% tax rate. AB Holding’s effective tax rate was 7.3% in 2021, 9.4% in 2020 and 10.4% in 2018, 10.7% in 2017 and 9.5% in 2016. 2019. See Note 6 to AB Holding’s financial statements in Item 8for a further description.

As supplemental information, AB provides the performance measures “adjusted net revenues,” “adjusted operating income” and “adjusted operating margin,” which are the principal metrics management uses in evaluating and comparing the period-to-period operating performance of AB. Management principally uses these metrics in evaluating performance because they present a clearer picture of AB's operating performance and allow management to see long-term trends without the distortion primarily caused by long-term incentive compensation-related mark-to-market adjustments, real estate consolidation charges (discussed below in Adjusted Operating Income) and other adjustment items. Similarly, management believes that these management operating metrics help investors better understand the underlying trends in AB's results and, accordingly, provide a valuable perspective for investors. Such measures are not based on generally accepted accounting principles (“non-GAAP measures”). These non-GAAP measures are provided in addition to, and not as substitutes for, net revenues, operating income and operating margin, and they may not be comparable to non-GAAP measures presented by other companies. Management uses both GAAP and non-GAAP measures in evaluating the company’s financial performance. The non-GAAP measures alone may pose limitations because they do not include all of AB’s revenues and expenses. Further, adjusted diluted net income per AB Holding Unit is not a liquidity measure and should not be used in place of cash flow measures. See “Management Operating Metrics” in this Item 7.

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The impact of these adjustments on AB Holding’s net income and diluted net income per AB Holding Unit are as follows:
Years Ended December 31,Years Ended December 31
2018 2017 2016202120202019
(in thousands, except per unit amounts)(in thousands, except per unit amounts)
AB non-GAAP adjustments, before taxes$48,655
 $34,605
 $(77,275)AB non-GAAP adjustments, before taxes$2,959 $6,393 $8,648 
Income tax (expense) benefit on non-GAAP adjustments(1,473) (3,599) 5,332
Income tax credit on AB's income tax provision—
 —
 (21,572)
AB Income tax benefit (expense) on non-GAAP adjustmentsAB Income tax benefit (expense) on non-GAAP adjustments71 (523)1,070 
AB non-GAAP adjustments, after taxes47,182
 31,006
 (93,515)AB non-GAAP adjustments, after taxes3,030 5,870 9,718 
AB Holding’s weighted average equity ownership interest in AB35.7% 35.1% 35.6%AB Holding’s weighted average equity ownership interest in AB36.2 %35.6 %35.4 %
Impact on AB Holding’s net income of AB non-GAAP adjustments$16,856
 $10,877
 $(33,246)Impact on AB Holding’s net income of AB non-GAAP adjustments$1,098 $2,090 $3,441 
     
Net income - diluted, GAAP basis$242,844
 $208,102
 $217,464
Net income - diluted, GAAP basis$385,873 $279,436 $238,642 
Impact on AB Holding’s net income of AB non-GAAP adjustments16,856
 10,877
 (33,246)Impact on AB Holding’s net income of AB non-GAAP adjustments1,098 2,090 3,441 
Adjusted net income - diluted$259,700
 $218,979
 $184,218
Adjusted net income - diluted$386,971 $281,526 $242,083 
     
Diluted net income per AB Holding Unit, GAAP basis$2.50
 $2.19
 $2.23
Diluted net income per AB Holding Unit, GAAP basis$3.88 $2.88 $2.49 
Impact of AB non-GAAP adjustments0.17
 0.11
 (0.34)Impact of AB non-GAAP adjustments0.01 0.03 0.03 
Adjusted diluted net income per AB Holding Unit$2.67
 $2.30
 $1.89
Adjusted diluted net income per AB Holding Unit$3.89 $2.91 $2.52 
The degree to which AB’s non-GAAP adjustments impact AB Holding’s net income fluctuates based on AB Holding's ownership percentage in AB. The 2016 income tax credit on AB's income tax provision reflects a fourth quarter 2016 change in estimate made by AB to its income tax liability relating to a third quarter 2016 revision to income taxes ($13.3 million) and a reversal of a deferred tax liability relating to foreign translation adjustments ($8.2 million).

Tax Legislation

For a discussion of tax legislation, see “Risk Factors - Structure-related Risks” in Item 1A.


Capital Resources and Liquidity

During the year ended December 31, 2018,2021, net cash provided by operating activities was $279.3$355.1 million, compared to $202.4$270.0 million during the corresponding 20172020 period. The increase primarily resulted from higher cash distributions received from AB of $81.2$86.3 million. During the year ended December 31, 2017,2020, net cash provided by operating activities was $202.4$270.0 million, compared to $169.5$222.8 million during the corresponding 20162019 period. The increase primarily resulted from higher cash distributions received from AB of $34.9$49.5 million.

During the years ended December 31, 2018, 20172021, 2020 and 2016,2019, net cash used in investing activities was $16.6$3.4 million, $20.1$0.1 million and $6.1$11.5 million, respectively, reflecting investments in AB with proceeds from exercises of compensatory options to buy AB Holding Units.

During the year ended December 31, 2018,2021, net cash used in financing activities was $262.7$351.7 million, compared to $182.3$269.9 million during the corresponding 20172020 period. The increase primarily was due to higher cash distributions to Unitholders of $78.3 million and lower proceeds from exercise of compensatory options to buy AB Holding Units of $3.5 million. During the year ended December 31, 2017, net cash used in financing activities was $182.3 million, compared to $163.4 million during the corresponding 2016 period. The increase primarily was due to higher cash distributions to Unitholders of $32.7$86.6 million, offset by higher proceeds from exercise of compensatory options to buy AB Holding Units of $14.0$3.3 million.

During the year ended December 31, 2020, net cash used in financing activities was $269.9 million, compared to $211.2 million during the corresponding 2019 period. The increase was primarily due to higher cash distributions to Unitholders of $48.4 million, partially offset by lower proceeds from exercise of compensatory options to buy AB Holding Units of $11.4 million.
Management believes that AB Holding will have the resources it needs to meet its financial obligations as a result of the cash flow AB Holding realizes from its investment in AB.

Cash Distributions

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 that are made forto adjusted net income should not be made with respect to the Available Cash Flow calculation. See Note 2 to AB Holding’s financial statements in Item 8 for a description of Available Cash Flow.

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Commitments and Contingencies

For a discussion of commitments and contingencies, see Note 7 to AB Holding’s financial statements in Item 8.

AB

Assets Under Management
Assets under management by distribution channel are as follows: 
As of December 31,     % Change   As of December 31% Change  
2018 2017 2016 2018-17 2017-16 2021202020192021-202020-19
(in billions)      
  
 (in billions)     
Institutions$246.3
 $269.3
 $239.3
 (8.5)% 12.5%Institutions$337.1 $315.6 $282.7 6.8 %11.6 %
Retail180.8
 192.9
 160.2
 (6.3) 20.5
Retail319.9 265.3 239.2 20.6 10.9 
Private Wealth Management89.3
 92.3
 80.7
 (3.2) 14.2
Private Wealth Management121.6 105.0 101.0 15.8 3.9 
Total$516.4
 $554.5
 $480.2
 (6.9) 15.5
Total$778.6 $685.9 $622.9 13.5 10.1 
Assets under management by investment service are as follows:
 As of December 31% Change
 2021202020192021-202020-19
 (in billions)  
Equity  
Actively Managed$287.6 $217.8 $177.2 32.1 %22.9 %
Passively Managed(1)
71.6 64.5 60.1 10.9 7.3 
Total Equity359.2 282.3 237.3 27.2 19.0 
Fixed Income   
Actively Managed   
Taxable246.3 263.2 258.3 (6.4)1.9 
Tax–exempt57.1 50.3 47.1 13.6 6.7 
Total303.4 313.5 305.4 (3.2)2.6 
         Passively Managed(1)
13.2 8.5 9.3 55.3 (8.4)
Total Fixed Income316.6 322.0 314.7 (1.7)2.3 
Alternatives/Multi-Asset Solutions(2)
 Actively Managed97.3 79.1 69.3 23.0 14.2 
Passively Managed(1)
5.5 2.5 1.6 116.6 54.1 
Total Alternatives/Multi-Asset Solutions102.8 81.6 70.9 25.9 15.1 
Total$778.6 $685.9 $622.9 13.5 %10.1 %
 As of December 31, % Change
 2018 2017 2016 2018-17 2017-16
 (in billions)  
  
Equity       
  
Actively Managed$136.2
 $139.4
 $111.9
 (2.3)% 24.6 %
Passively Managed (1)
50.2
 54.3
 48.1
 (7.6) 13.0
Total Equity186.4
 193.7
 160.0
 (3.8) 21.1
          
Fixed Income 
  
  
    
Actively Managed 
  
  
    
Taxable219.7
 247.9
 220.9
 (11.4) 12.2
Tax-exempt41.7
 40.4
 36.9
 3.0
 9.5
 261.4
 288.3
 257.8
 (9.4) 11.8
Passively Managed (1)
9.4
 9.9
 11.1
 (4.8) (10.4)
Total Fixed Income270.8
 298.2
 268.9
 (9.2) 10.9
          
Other (2)
         
Actively Managed58.3
 61.9
 50.8
 (5.8) 21.7
Passively Managed (1)
0.9
 0.7
 0.5
 39.7
 37.0
Total Other59.2
 62.6
 51.3
 (5.3) 21.8
Total$516.4
 $554.5
 $480.2
 (6.9) 15.5
(1)Includes index and enhanced index services.
(2)Includes certain multi-asset solutions and services not included in equity or fixed income services. Prior to December 31, 2020, this investment service line was disclosed as "Other." In order to reflect the increasing significance of our Alternatives and Multi-Asset Solutions services, we updated the investment service line to "Alternatives and Multi-Asset Solutions."
(1)2021 Annual ReportIncludes index and enhanced index services.39
(2)Includes certain multi-asset solutions and services and certain alternative investments.

Table of Contents
Part II
Changes in assets under management during 20182021 and 20172020 are as follows:
 Distribution Channel
 InstitutionsRetailPrivate
Wealth
Management		Total
 (in billions)
Balance as of December 31, 2020$315.6 $265.3 $105.0 $685.9 
Long-term flows:
Sales/new accounts31.7 100.0 18.3 150.0 
Redemptions/terminations(23.4)(65.1)(15.3)(103.8)
Cash flow/unreinvested dividends(6.0)(14.1)— (20.1)
Net long-term inflows(1)
2.3 20.8 3.0 26.1 
Transfers(0.2)0.2 — — 
Market appreciation19.4 33.6 13.6 66.6 
Net change21.5 54.6 16.6 92.7 
Balance as of December 31, 2021$337.1 $319.9 $121.6 $778.6 
Balance as of December 31, 2019$282.7 $239.2 $101.0 $622.9 
Long-term flows:
Sales/new accounts30.9 78.9 14.3 124.1 
Redemptions/terminations(23.3)(69.5)(16.5)(109.3)
Cash flow/unreinvested dividends(6.6)(11.0)0.2 (17.4)
Net long-term inflows (outflows)(1)
1.0 (1.6)(2.0)(2.6)
Acquisitions— 0.2 — 0.2 
Transfers1.4 (0.6)(0.8)— 
Market appreciation30.5 28.1 6.8 65.4 
Net change32.9 26.1 4.0 63.0 
Balance as of December 31, 2020$315.6 $265.3 $105.0 $685.9 
 Distribution Channel
 Institutions Retail 
Private
Wealth
Management
 Total
 (in billions)
Balance as of December 31, 2017$269.3
 $192.9
 $92.3
 $554.5
Long-term flows: 
  
  
  
Sales/new accounts26.1
 54.2
 13.5
 93.8
Redemptions/terminations(30.1) (46.5) (11.0) (87.6)
Cash flow/unreinvested dividends(6.0) (7.7) (0.6) (14.3)
Net long-term (outflows) inflows(10.0) —
 1.9
 (8.1)
Transfers0.2
 0.2
 (0.4) —
Market depreciation(13.2) (12.3) (4.5) (30.0)
Net change(23.0) (12.1) (3.0) (38.1)
Balance as of December 31, 2018$246.3
 $180.8
 $89.3
 $516.4
        
Balance as of December 31, 2016$239.3
 $160.2
 $80.7
 $480.2
Long-term flows: 
  
  
  
Sales/new accounts13.4
 53.8
 11.5
 78.7
Redemptions/terminations(11.5) (38.6) (10.6) (60.7)
Cash flow/unreinvested dividends1.7
 (6.3) (0.2) (4.8)
Net long-term inflows3.6
 8.9
 0.7
 13.2
Market appreciation26.4
 23.8
 10.9
 61.1
Net change30.0
 32.7
 11.6
 74.3
Balance as of December 31, 2017$269.3
 $192.9
 $92.3
 $554.5

(1)Institutional net flows include $1.3 billion and $11.8 billion of AXA redemptions of certain low-fee fixed income mandates for 2021 and 2020, respectively.
 Investment Service
 
Equity
Actively
Managed
 
Equity
Passively
Managed(1)
 
Fixed
Income
Actively
Managed
- Taxable
 
Fixed
Income
Actively
Managed -
Tax-
Exempt
 
Fixed
Income
Passively
Managed(1)
 
Other(2)
 Total
 (in billions)
Balance as of December 31, 2017$139.4
 $54.3
 $247.9
 $40.4
 $9.9
 $62.6
 $554.5
Long-term flows: 
  
  
    
  
  
Sales/new accounts36.7
 4.0
 27.6
 7.9
 0.1
 17.5
 93.8
Redemptions/terminations(22.2) (0.6) (40.8) (6.7) (0.6) (16.7) (87.6)
Cash flow/unreinvested dividends(3.7) (3.6) (6.2) (0.4) 0.2
 (0.6) (14.3)
Net long-term inflows (outflows)10.8
 (0.2) (19.4) 0.8
 (0.3) 0.2
 (8.1)
Market (depreciation) appreciation(14.0) (3.9) (8.8) 0.5
 (0.2) (3.6) (30.0)
Net change(3.2) (4.1) (28.2) 1.3
 (0.5) (3.4) (38.1)
Balance as of December 31, 2018$136.2
 $50.2
 $219.7
 $41.7
 $9.4
 $59.2
 $516.4
              
Balance as of December 31, 2016$111.9
 $48.1
 $220.9
 $36.9
 $11.1
 $51.3
 $480.2
Long-term flows: 
  
  
    
  
  
Sales/new accounts21.9
 1.1
 41.1
 7.9
 0.1
 6.6
 78.7
Redemptions/terminations(19.0) (1.4) (29.8) (5.9) (1.8) (2.8) (60.7)
Cash flow/unreinvested dividends(2.1) (4.0) 1.5
 (0.1) —
 (0.1) (4.8)
Net long-term inflows (outflows)0.8
 (4.3) 12.8
 1.9
 (1.7) 3.7
 13.2
Market appreciation26.7
 10.5
 14.2
 1.6
 0.5
 7.6
 61.1
Net change27.5
 6.2
 27.0
 3.5
 (1.2) 11.3
 74.3
Balance as of December 31, 2017$139.4
 $54.3
 $247.9
 $40.4
 $9.9
 $62.6
 $554.5
(1)40Includes index and enhanced index services.AllianceBernstein
Table of Contents
Part II
 Investment Service
 Equity
Actively
Managed
Equity
Passively
Managed(1)
Fixed
Income
Actively
Managed-
Taxable		Fixed Income
Actively
Managed-Tax-
Exempt
Fixed
Income
Passively
Managed(1)
Alternatives/
Multi-Asset
Solutions(2)
Total
(in billions)
Balance as of December 31, 2020$217.8 $64.5 $263.2 $50.3 $8.5 $81.6 $685.9 
Long-term flows:
Sales/new accounts72.9 1.4 44.9 13.5 4.6 12.7 150.0 
Redemptions/terminations(39.6)(1.1)(52.6)(7.8)(0.4)(2.3)(103.8)
Cash flow/unreinvested dividends(11.4)(7.8)(2.2)0.3 0.8 0.2 (20.1)
Net long-term inflows (outflows)(3)
21.9 (7.5)(9.9)6.0 5.0 10.6 26.1 
Market appreciation (depreciation)47.9 14.6 (7.0)0.8 (0.3)10.6 66.6 
Net change69.8 7.1 (16.9)6.8 4.7 21.2 92.7 
Balance as of December 31, 2021$287.6 $71.6 $246.3 $57.1 $13.2 $102.8 $778.6 
Balance as of December 31, 2019$177.2 $60.1 $258.3 $47.1 $9.3 $70.9 $622.9 
Long-term flows:
Sales/new accounts51.4 1.7 54.3 10.3 — 6.4 124.1 
Redemptions/terminations(36.7)(1.9)(58.3)(9.5)(0.3)(2.6)(109.3)
Cash flow/unreinvested dividends(7.3)(4.4)(5.8)0.2 (1.3)1.2 (17.4)
Net long-term inflows (outflows)(3)
7.4 (4.6)(9.8)1.0 (1.6)5.0 (2.6)
Acquisitions— — — — — 0.2 0.2 
Market appreciation33.2 9.0 14.7 2.2 0.8 5.5 65.4 
Net change40.6 4.4 4.9 3.2 (0.8)10.7 63.0 
Balance as of December 31, 2020$217.8 $64.5 $263.2 $50.3 $8.5 $81.6 $685.9 
(1)Includes index and enhanced index services.
(2)Includes certain multi-asset solutions and services not included in equity or fixed income services. Prior to December 31, 2020, this investment service line was disclosed as "Other." In order to reflect the increasing significance of our Alternatives and Multi-Asset Solutions services, we updated the investment service line to "Alternatives and Multi-Asset Solutions."
(3)Fixed income - taxable investment service net flows include $1.3 billion and $11.8 billion of AXA redemptions of certain low-fee fixed income mandates for 2021 and 2020, respectively.

(2)2021 Annual ReportIncludes certain multi-asset solutions and services and certain alternative investments.41

Table of Contents

Part II
Net long-term inflows (outflows) for actively managed investment services as compared to passively managed investment services during 20182021 and 20172020 are as follows:
Years Ended December 31, Years Ended December 31
2018 2017 20212020
(in billions) (in billions)
Actively Managed   Actively Managed
Equity$10.8
 $0.8
Equity$21.9 $7.4 
Fixed Income(18.6) 14.7
Fixed Income(3.9)(8.8)
Other(0.1) 3.6
Alternatives/Multi- Asset SolutionsAlternatives/Multi- Asset Solutions8.3 4.5 
TotalTotal26.3 3.1 
(7.9) 19.1
Passively Managed 
  
Passively Managed  
Equity(0.2) (4.3)Equity(7.5)(4.6)
Fixed Income(0.3) (1.7)Fixed Income5.0 (1.6)
Other0.3
 0.1
Alternatives/Multi- Asset SolutionsAlternatives/Multi- Asset Solutions2.3 0.5 
TotalTotal(0.2)(5.7)
(0.2) (5.9)
Total net long-term (outflows) inflows$(8.1) $13.2
Total net long-term inflows (outflows)Total net long-term inflows (outflows)$26.1 $(2.6)
Average assets under management by distribution channel and investment service are as follows:
 Years Ended December 31% Change
 2021202020192021-202020-19
 (in billions)  
Distribution Channel:  
Institutions$325.7 $285.9 $265.4 13.9 %7.7 %
Retail291.0 236.5 212.3 23.0 11.4 
Private Wealth Management114.1 97.1 96.5 17.5 0.7 
Total$730.8 $619.5 $574.2 18.0 7.9 
Investment Service:
Equity Actively Managed$252.2 $179.8 $158.4 40.2 13.5 
Equity Passively Managed(1)
68.7 57.1 56.4 20.5 1.2 
Fixed Income Actively Managed – Taxable253.1 254.4 239.7 (0.5)6.2 
Fixed Income Actively Managed – Tax-exempt53.8 47.9 44.6 12.3 7.5 
Fixed Income Passively Managed(1)
9.6 9.4 9.4 1.4 0.2 
Alternatives/Multi-Asset Solutions(2)
93.4 70.9 65.7 31.7 7.8 
Total$730.8 $619.5 $574.2 18.0 7.9 
 Years Ended December 31, % Change
 2018 2017 2016 2018-17 2017-16
 (in billions)  
  
Distribution Channel:       
  
Institutions$258.1
 $253.8
 $243.4
 1.7 % 4.3 %
Retail191.8
 177.5
 157.7
 8.1
 12.6
Private Wealth Management94.3
 86.7
 78.9
 8.8
 9.8
Total$544.2
 $518.0
 $480.0
 5.1
 7.9
          
Investment Service: 
  
  
  
  
Equity Actively Managed$146.4
 $125.6
 $109.4
 16.6
 14.8
Equity Passively Managed(1)
53.8
 50.8
 46.5
 5.9
 9.3
Fixed Income Actively Managed – Taxable230.3
 236.3
 221.5
 (2.5) 6.6
Fixed Income Actively Managed – Tax-exempt41.3
 38.8
 36.3
 6.4
 7.0
Fixed Income Passively Managed(1)
9.8
 10.3
 11.0
 (4.3) (6.4)
Other(2)
62.6
 56.2
 55.3
 11.3
 1.7
Total$544.2
 $518.0
 $480.0
 5.1
 7.9
(1)Includes index and enhanced index services.
(2)Includes certain multi-asset solutions and services not included in equity or fixed income services. Prior to December 31, 2020, this investment service line was disclosed as "Other." In order to reflect the increasing significance of our Alternatives and Multi-Asset Solutions services, we updated the investment service line to "Alternatives and Multi-Asset Solutions."
(1)42Includes index and enhanced index services.AllianceBernstein
(2)Includes certain multi-asset solutions and services and certain alternative investments.
As a result
Table of the significant market declines in the fourth quarter of 2018, AUM as of December 31, 2018 is lower than AUM as of December 31, 2017 in all three distribution channels; however, average AUM during 2018 is higher than average AUM during 2017 in all three distribution channels, reflecting our strong performance through the first nine months of 2018.Contents
Part II
During 2018,2021, our Institutional channel average AUM of $258.1$325.7 billion increased $4.3$39.8 billion, or 1.7%13.9%, compared to 2017; however, our Institutional channel2020, primarily due to this AUM decreased $23.0increasing $21.5 billion, or 8.5%6.8%, to $246.3$337.1 billion over the last twelve months. The $23.0$21.5 billion decreaseincrease in AUM resulted primarily from market depreciationappreciation of $13.2$19.4 billion (with $11.6 million of the deprecation occurring in the fourth quarter of 2018) and net outflowsinflows of $10.0$2.3 billion. During 2017,2020, our Institutional channel average AUM of $253.8$285.9 billion increased

$10.4 $20.5 billion, or 4.3%7.7%, compared to 2016,2019, primarily due to our Institutionalthis AUM increasing $30.0$32.9 billion, or 12.5%11.6%, to $269.3$315.6 billion during 2017.2020. The $30.0$32.9 billion increase in AUM resulted primarily resulted from market appreciation of $26.4$30.5 billion and net inflows of $3.6$1.0 billion.

During 2018,2021, our Retail channel average AUM of $191.8$291.0 billion increased $14.3$54.5 billion, or 8.1%23.0%, compared to 2017; however, our Retail channel2020, primarily due to this AUM decreased $12.1increasing $54.6 billion, or 6.3%20.6%, to $180.8$319.9 billion over the last twelve months. The $12.1$54.6 billion decreaseincrease in AUM resulted primarily from market depreciation of $12.3 billion (with $16.4 million of the deprecation occurring in the fourth quarter of 2018). During 2017, our Retail average AUM of $177.5 billion increased $19.8 billion, or 12.6%, compared to 2016, primarily due to our Retail channel AUM increasing $32.7 billion, or 20.5%, to $192.9 billion during 2017. The $32.7 billion increase in AUM for 2017 resulted from market appreciation of $23.8$33.6 billion and net inflows of $8.9$20.8 billion. During 2020, our Retail channel average AUM of $236.5 billion increased $24.2 billion, or 11.4%, compared to 2019, primarily due to this AUM increasing $26.1 billion, or 10.9%, to $265.3 billion during 2020. The $26.1 billion increase in AUM resulted primarily from market appreciation of $28.1 billion, partially offset by net outflows of $1.6 billion.
During 2018,2021, our Private Wealth Management channel average AUM of $94.3$114.1 billion increased $7.6$17.0 billion, or 8.8%17.5%, compared to 2017; however, Private Wealth Management2020, primarily due to this AUM decreased $3.0increasing $16.6 billion, or 3.2%15.8%, to $89.3$121.6 billion over the last twelve months. The $3.0$16.6 billion decreaseincrease in AUM resulted primarily from market depreciationappreciation of $4.5$13.6 billion (with $6.8 million of the deprecation occurring in the fourth quarter of 2018), offset byand net inflows of $1.9$3.0 billion. During 2017,2020, our Private Wealth Management channel average AUM of $86.7$97.1 billion increased $7.8$0.6 billion, or 9.8%0.7%, compared to 2016,2019, primarily due to our Private Wealth Managementthis AUM increasing $11.6$4.0 billion, or 14.2%3.9%, to $92.3$105.0 billion during 2017.2020. The $11.6$4.0 billion increase in AUM for 2017 resulted primarily from market appreciation of $10.9$6.8 billion, andpartially offset by net inflowsoutflows of $0.7$2.0 billion.

Absolute investment composite returns, gross of fees, and relative performance as of December 31, 20182021 compared to benchmarks for certain representative Institutional equity and fixed income services are as follows:
 1-Year
3-Year(1)
5-Year(1)
Global High Income - Hedged (fixed income)
Absolute return4.8 %7.8 %5.6 %
Relative return (vs. Bloomberg Barclays Global High Yield Index - Hedged)2.3 0.7 0.3 
Global Plus - Hedged (fixed income)
Absolute return(0.5)4.6 3.8 
Relative return (vs. Bloomberg Barclays Global Aggregate Index - Hedged)0.9 0.6 0.4 
Intermediate Municipal Bonds (fixed income)
Absolute return1.8 4.0 3.4 
Relative return (vs. Lipper Short/Int. Blended Muni Fund Avg)0.9 1.0 0.8 
U.S. Strategic Core Plus (fixed income)
Absolute return(0.5)5.5 4.2 
Relative return (vs. Bloomberg Barclays U.S. Aggregate Index)1.1 0.7 0.6 
Emerging Market Debt (fixed income)
Absolute return(2.1)6.7 4.9 
Relative return (vs. JPM EMBI Global/JPM EMBI)(0.6)0.7 0.4 
Sustainable Global Thematic
Absolute return23.7 31.7 23.5 
Relative return (vs. MSCI ACWI Index)5.2 11.3 9.1 
 1-Year 3-Year 5-Year
      
Global High Income - Hedged (fixed income)     
Absolute return(4.0)% 6.8 % 4.0 %
Relative return (vs. Bloomberg Barclays Global High Yield Index - Hedged)(1.3) (0.0)
 (0.4)
U.S. High Yield (fixed income)     
Absolute return(2.8) 6.5
 3.7
Relative return (vs. Bloomberg Barclays U.S. Corp. High Yield Index)(0.7) (0.8) (0.1)
Global Plus - Hedged (fixed income)     
Absolute return1.4
 3.7
 4.0
Relative return (vs. Bloomberg Barclays Global Aggregate Index - Hedged)(0.4) 0.7
 0.5
Intermediate Municipal Bonds (fixed income)     
Absolute return1.4
 1.8
 2.5
Relative return (vs. Lipper Short/Int. Blended Muni Fund Avg)0.4
 0.5
 0.7
U.S. Strategic Core Plus (fixed income)     
Absolute return0.2
 3.1
 3.4
Relative return (vs. Bloomberg Barclays U.S. Aggregate Index)0.2
 1.0
 0.9
Emerging Market Debt (fixed income)     
Absolute return(6.1) 5.9
 4.1
Relative return (vs. JPM EMBI Global/JPM EMBI)(1.5) 1.1
 (0.0)
Emerging Markets Value     
Absolute return(17.8) 7.2
 1.0
Relative return (vs. MSCI EM Index)(3.2) (2.0) (0.7)
Global Strategic Value     
Absolute return(18.5) 3.0
 2.5
Relative return (vs. MSCI ACWI Index)(9.1) (3.6) (1.8)

 1-Year 3-Year 5-Year
U.S. Small & Mid Cap Value     
Absolute return(14.3) 7.2
 5.2
Relative return (vs. Russell 2500 Value Index)(2.0) 0.6
 1.1
U.S. Strategic Value     
Absolute return(13.8) 3.5
 3.1
Relative return (vs. Russell 1000 Value Index)(5.5) (3.5) (2.8)
U.S. Small Cap Growth     
Absolute return0.1
 13.6
 7.8
Relative return (vs. Russell 2000 Growth Index)9.4
 6.4
 2.7
U.S. Large Cap Growth     
Absolute return2.8
 12.3
 12.8
Relative return (vs. Russell 1000 Growth Index)4.3
 1.2
 2.4
U.S. Small & Mid Cap Growth     
Absolute return(3.6) 10.8
 7.2
Relative return (vs. Russell 2500 Growth  Index)3.9
 2.7
 1.0
Concentrated U.S. Growth     
Absolute return2.2
 10.8
 9.7
Relative return (vs. S&P 500 Index)6.6
 1.6
 1.2
Select U.S. Equity     
Absolute return(4.1) 9.3
 8.8
Relative return (vs. S&P 500 Index)0.3
 (0.0)
 0.3
Strategic Equities     
Absolute return(4.2) 8.3
 8.3
Relative return (vs. Russell 3000 Index)1.1
 (0.7) 0.4
Global Core Equity     
Absolute return(4.4) 9.6
 5.7
Relative return (vs. MSCI ACWI Index)5.1
 3.0
 1.4

2021 Annual Report43
Table of Contents
Part II
 1-Year
3-Year(1)
5-Year(1)
International Strategic Core Equity
Absolute return10.8 12.3 10.4 
Relative return (vs. MSCI EAFE Index)(0.4)(1.3)0.8 
U.S. Small & Mid Cap Value
Absolute return37.0 20.2 11.1 
Relative return (vs. Russell 2500 Value Index)9.2 1.9 1.3 
U.S. Strategic Value
Absolute return28.3 16.5 9.3 
Relative return (vs. Russell 1000 Value Index)3.1 (1.2)(1.8)
U.S. Small Cap Growth
Absolute return10.5 33.1 26.3 
Relative return (vs. Russell 2000 Growth Index)7.7 12.0 11.8 
U.S. Large Cap Growth
Absolute return29.3 33.2 26.4 
Relative return (vs. Russell 1000 Growth Index)1.7 (0.8)1.1 
U.S. Small & Mid Cap Growth
Absolute return11.9 31.5 23.9 
Relative return (vs. Russell 2500 Growth Index)6.9 6.4 6.3 
Concentrated U.S. Growth
Absolute return32.4 31.3 23.6 
Relative return (vs. S&P 500 Index)3.7 5.3 5.1 
Select U.S. Equity
Absolute return31.2 25.9 18.7 
Relative return (vs. S&P 500 Index)2.5 (0.2)0.3 
Strategic Equities
Absolute return26.9 23.7 16.3 
Relative return (vs. Russell 3000 Index)1.2 (2.0)(1.6)
Global Core Equity
Absolute return19.4 19.6 15.6 
Relative return (vs. MSCI ACWI Index)0.8 (0.8)1.2 
U.S. Strategic Core Equity
Absolute return25.1 21.4 15.6 
Relative return (vs. S&P 500 Index)(3.7)(4.7)(2.9)
Select U.S. Equity Long/Short
Absolute return19.4 16.6 12.5 
Relative return (vs. S&P 500 Index)(9.3)(9.5)(6.0)
(1)Reflects annualized returns.
44AllianceBernstein
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Part II
Consolidated Results of Operations
 Years Ended December 31% Change
 2021202020192021-202020-19
 (in thousands, except per unit amounts)  
Net revenues$4,441,602 $3,708,536 $3,518,432 19.8 %5.4 %
Expenses3,225,140 2,801,100 2,694,995 15.1 3.9 
Operating income1,216,462 907,436 823,437 34.1 10.2 
Income taxes62,728 45,653 41,754 37.4 9.3 
Net income1,153,734 861,783 781,683 33.9 10.2 
Net income (loss) of consolidated entities attributable to non-controlling interests5,111 (4,169)29,641 n/mn/m
Net income attributable to AB Unitholders$1,148,623 $865,952 $752,042 32.6 15.1 
Diluted net income per AB Unit$4.18 $3.19 $2.78 31.0 14.7 
Distributions per AB Unit$4.19 $3.20 $2.82 30.9 13.5 
Operating margin(1)
27.3 %24.6 %22.6 %  
 Years Ended December 31, % Change
 2018 2017 2016 2018-17 2017-16
 (in thousands, except per unit amounts)  
  
Net revenues$3,367,361
 $3,298,521
 $3,028,779
 2.1 % 8.9 %
Expenses2,542,047
 2,524,611
 2,305,614
 0.7
 9.5
Operating income825,314
 773,910
 723,165
 6.6
 7.0
Income taxes45,816
 53,110
 28,319
 (13.7) 87.5
Net income779,498
 720,800
 694,846
 8.1
 3.7
Net income of consolidated entities attributable to non-controlling interests21,910
 58,397
 21,488
 (62.5) 171.8
Net income attributable to AB Unitholders$757,588
 $662,403
 $673,358
 14.4
 (1.6)
Diluted net income per AB Unit$2.78
 $2.45
 $2.47
 13.5
 (0.8)
Distributions per AB Unit$2.96
 $2.57
 $2.15
 15.2
 19.5
Operating margin(1)
23.9% 21.7% 23.2%  
  
(1)Operating income excluding net income (loss) attributable to non-controlling interests as a percentage of net revenues.

(1)Operating income excluding net income (loss) attributable to non-controlling interests as a percentage of net revenues.
Net income attributable to AB Unitholders for the year ended December 31, 20182021 increased $95.2$282.7 million from the year ended December 31, 2017.2020. The increase primarily is due to (in millions):
Higher base advisory fees$137.5
Lower general and administrative expenses (including real estate charges)62.0
Lower net income of consolidated entities attributable to non-controlling interest36.5
Higher performance-based fees23.4
Lower income tax expenses7.3
Higher distribution revenues6.5
Changes in contingent payment arrangements2.5
Lower investment gains(89.4)
Higher employee compensation and benefits(65.3)
Higher promotion and servicing expenses(14.5)
Lower Bernstein Research Services revenue(10.5)
Other(0.8)
 $95.2

Higher base advisory fees$486.6 
Higher distribution revenues122.5 
Higher performance-based fees112.5 
Higher employee compensation and benefits(221.8)
Higher promotion and servicing expenses(153.5)
Higher general and administrative expenses(64.5)
Other0.9 
$282.7
Net income attributable to AB Unitholders for the year ended December 31, 2017 decreased $11.02020 increased $113.9 million from the year ended December 31, 2016.2019. The decreaseincrease primarily was due to (in millions):
Higher base advisory fees$90.4 
Higher distribution revenues74.7 
Higher Bernstein Research Services revenue51.8 
Higher net income of consolidated entities attributable to non-controlling interest33.8 
Lower performance-based fees33.0 
Higher promotion and servicing expenses(63.6)
Higher investment losses(55.1)
Higher employee compensation and benefits(51.4)
Other0.3 
$113.9
Higher employee compensation and benefits$(83.7)
Higher other general and administrative expenses(55.3)
Higher net income of consolidated entities attributable to non-controlling interest(36.9)
Higher promotion and servicing expenses(35.4)
Lower Bernstein Research Services revenue(30.0)
Higher income tax expenses(24.8)
Lower adjustments to contingent payment arrangements(20.5)
Higher real estate charges(19.0)
Higher base advisory fees204.9
Higher performance-based fees62.0
Higher distribution revenues27.7
 $(11.0)
Revenue Recognition
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Part II
In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers, which outlines a single comprehensive revenue recognition model for all contracts with customers and supersedes most of the existing revenue recognition requirements. We adopted this new standard on January 1, 2018 on a modified retrospective basis for contracts that were not completed as of the date of adoption. This adoption method required an adjustment to the 2018 opening balance of partners’ capital for the cumulative effect of initially applying the new standard.
Units Outstanding

The new standard did not change the timing of revenue recognition for our base fees, distribution revenues, shareholder servicing fees and broker-dealer revenues. However, performance-based fees, which, prior to the adoption of ASC 606, were recognized at the end of the applicable measurement period when no risk of reversal remained, and carried-interest distributions received (considered performance-based fees), recorded as deferred revenues until no risk of reversal remained, are recognized earlier under the new standard, if it is probable that significant reversal of performance-based fees recognized will not occur.

On January 1, 2018, we recorded a cumulative effect adjustment, net of tax, of $35.0 million to partners’ capital in the condensed consolidated statement of financial condition. This amount represents carried interest distributions of $77.9 million previously received, net of revenue sharing payments to investment team members of $42.7 million, with respect to which it is probable that significant reversal will not occur. These amounts were included in adjusted net revenues and adjusted operating income in the first quarter of 2018. During 2018, we recognized $12.9 million of performance-based fees from a fund in liquidation that was not probable of significant reversal, that under the previous revenue accounting standard would not be recognized until final liquidation.

Real Estate Charges

Since 2010, we have sub-leased over one million square feet of office space.

During 2016, we recorded pre-tax real estate charges of $17.7 million, resulting from new charges of $22.8 million relating to the further consolidation of office space at our New York offices, offset by changes in estimates related to previously recorded real estate charges of $5.1 million, which reflected the shortening of the lease term of our New York City location from 2029 to 2024.
During 2017, we recorded pre-tax real estate charges of $36.7 million, resulting from new charges of $40.2 million primarily relating to the further consolidation of office space at our New York offices, offset by changes in estimates pertaining to previously recorded real estate charges of $3.5 million.
During the 2018, we recorded pre-tax real estate charges of $7.2 million, resulting from changes in estimates pertaining to previously recorded real estate charges.



Units Outstanding
Each quarter, we consider whether to implement a plan to repurchase AB Holding Units pursuant to Rules 10b5-1 and 10b-18 under the Securities Exchange Act of 1934, as amended (“Exchange Act”). A plan of this type allows a company to repurchase its shares at times when it otherwise might be prevented from doing so because of self-imposed trading blackout periods or because it possesses material non-public information. Each broker we select has the authority under the terms and limitations specified in the plan to repurchase AB Holding Units on our behalf in accordance with the terms ofand limitations specified in the plan. Repurchases are subject to regulations promulgated by the SEC, as well as certain price, market volume and timing constraints specified in the plan. TheThere was no plan adopted during the fourth quarter of 2018 expired at the close of business on February 12, 2019.2021. We may adopt additional plans in the future to engage in open-market purchases of AB Holding Units to help fund anticipated obligations under our incentive compensation award program and for other corporate purposes.
Cash Distributions
We are required to distribute all of our Available Cash Flow, as defined in the AB Partnership Agreement, to our Unitholders and the General Partner. Available Cash Flow typically is the adjusted diluted net income per unit for the quarter multiplied by the number of general and limited partnership interests at the end of the quarter. In future periods, 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 that are made for adjusted net income should not be made with respect to the Available Cash Flow calculation. See Note 2 to our consolidated financial statements contained in Item 8 for a description of Available Cash Flow.
Management Operating Metrics
We are providing the non-GAAP measures “adjusted net revenues,” “adjusted operating income” and “adjusted operating margin” because they are the principal operating metrics management uses in evaluating and comparing period-to-period operating performance. Management principally uses these metrics in evaluating performance because they present a clearer picture of our operating performance and allow management to see long-term trends without the distortion primarily caused by long-term incentive compensation-related mark-to-market adjustments, real estate consolidation charges and other adjustment items. Similarly, we believe that these management operating metrics help investors better understand the underlying trends in our results and, accordingly, provide a valuable perspective for investors.
These non-GAAP measures are provided in addition to, and not as substitutes for, net revenues, operating income and operating margin, and they may not be comparable to non-GAAP measures presented by other companies. Management uses both accounting principles generally accepted in the United States of America ("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.

 Years Ended December 31,
 2018 2017 2016
 (in thousands)
Net revenues, US GAAP basis$3,367,361
 $3,298,521
 $3,028,779
Adjustments: 
  
  
Impact of adoption of revenue recognition standard ASC 60677,844
 —
 —
Distribution-related payments(427,186) (411,467) (363,603)
Amortization of deferred sales commissions(21,343) (31,886) (41,066)
Pass-through fees and expenses(40,219) (40,531) (43,808)
Impact of consolidated company-sponsored funds(38,142) (87,255) (24,889)
  Loss (gain) on sale of software technology3,733
 (4,592) —
Long-term incentive compensation-related investment losses (gains) and dividends and interest3,509
 (9,891) (2,822)
  Gain on sale of investment carried at cost—
 —
 (75,273)
Other47
 —
 —
Adjusted net revenues$2,925,604
 $2,712,899
 $2,477,318
      
Operating income, US GAAP basis$825,314
 $773,910
 $723,165
Adjustments: 
  
  
Impact of adoption of revenue recognition standard ASC 60635,156
 —
 —
Real estate charges7,160
 36,669
 17,704
Acquisition-related expenses1,924
 2,012
 1,057
Loss (gain) on sale of software technology3,733
 (4,592) —
Long-term incentive compensation-related items3,064
 709
 720
Gain on sale of investment carried at cost—
 —
 (75,273)
Contingent payment arrangements(2,429) (193) (21,483)
Other47
 —
 —
Sub-total of non-GAAP adjustments48,655
 34,605
 (77,275)
Less: Net income of consolidated entities attributable to non-controlling interests21,910
 58,397
 21,488
Adjusted operating income852,059
 750,118
 624,402
Adjusted income taxes47,289
 56,709
 44,559
Adjusted net income$804,770
 $693,409
 $579,843
      
Diluted net income per AB Unit, GAAP basis2.78
 2.45
 2.47
Impact of non-GAAP adjustments0.18
 0.12
 (0.34)
Adjusted diluted net income per AB Unit$2.96
 $2.57
 $2.13
      
Adjusted operating margin29.1% 27.7% 25.2%
46AllianceBernstein
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Part II
Years Ended December 31
202120202019
(in thousands)
Net revenues, US GAAP basis$4,441,602 $3,708,536 $3,518,432 
Adjustments:
Distribution-related adjustments:
Distribution revenues(652,240)(529,781)(455,043)
Investment advisory services fees(90,242)(66,858)(47,951)
Pass through adjustments:
Investment advisory services fees(40,628)(18,279)(20,914)
Other revenues(37,209)(39,333)(35,926)
Impact of consolidated company-sponsored funds(6,933)954 (33,044)
Long-term incentive compensation-related investment gains and dividend and interest(6,694)(6,772)(8,939)
Write-down of investment1,880 859 — 
Adjusted net revenues$3,609,536 $3,049,326 $2,916,615 
Operating income, US GAAP basis$1,216,462 $907,436 $823,437 
Adjustments:
Real estate(3,162)2,880 2,623 
Long-term incentive compensation-related items687 (83)1,217 
EQH award compensation940 802 1,125 
Write-down of investment1,880 859 — 
Acquisition-related expenses3,214 3,301 6,734 
Contingent payment arrangements(600)(1,366)(3,051)
Sub-total of non-GAAP adjustments2,959 6,393 8,648 
Less: Net income (loss) of consolidated entities attributable to non-controlling interests5,111 (4,169)29,641 
Adjusted operating income1,214,310 917,998 802,444 
Adjusted income taxes62,658 46,176 40,684 
Adjusted net income$1,151,652 $871,822 $761,760 
Diluted net income per AB Unit, GAAP basis$4.18 $3.19 $2.78 
Impact of non-GAAP adjustments0.02 0.02 0.03 
Adjusted diluted net income per AB Unit$4.20 $3.21 $2.81 
Operating margin, GAAP basis27.3 %24.6 %22.6 %
Impact of non-GAAP adjustments6.3 5.5 4.9 
Adjusted operating margin33.6 %30.1 %27.5 %
Adjusted operating income for the year ended December 31, 20182021 increased $101.9$296.3 million, or 13.6%32.3%, from the year ended December 31, 2017,2020, primarily due to higher investment advisory base fees of $139.3$460.9 million and higher performance-based fees of $90.7$91.7 million, partially offset by higher employee compensation and benefits expenses of $221.4 million and lowerhigher general and administrative expenses of $19.1$49.2 million.
Adjusted operating income for the year ended December 31, 2020 increased $115.6 million, or 14.4%, from the year ended December 31, 2019, primarily due to higher investment advisory base fees of $74.1 million, higher Bernstein Research Services revenue of $51.8 million, lower promotion and servicing expenses of $33.4 million and higher performance-based fees of $33.2 million, partially offset by higher employee compensation expenses (excluding the impact of long-term incentive compensation-related items) of $119.6 million, lower Bernstein Research Services revenue of $10.5 million, lower investments gains and losses revenue of $9.5 million and higher promotion and servicing expenses of $8.6 million. Adjusted operating income for the year ended December 31, 2017 increased $125.7 million, or 20.1%, from the year ended December 31, 2016, primarily due to higher investment advisory base fees of $207.9 million and higher performance-based fees of $72.4 million, offset by higher employee compensation expenses (excluding the impact of long-term incentive compensation-related items) of $76.7 million, higher general and administrative expenses of $32.2 million, lower Bernstein Research Services revenue of $30.0$56.1 million and higher net distribution expensesinvestment losses of $12.0$22.8 million.

On January 1, 2018, we recorded a cumulative effect adjustment, net
2021 Annual Report47
Table of tax, of $35.0 million to partners’ capital in the condensed consolidated statement of financial condition. This amount represents carried interest distributions of $77.9 million previously received, net of revenue sharing payments to investment team members, of $42.7 million, with respect to which it is probable that significant reversal will not occur. These amounts were included in adjusted net revenues and adjusted operating income in the first quarter of 2018.Contents
Part II
Adjusted Net Revenues
Adjusted netNet Revenue, as adjusted, is reduced to exclude all of the company's distribution revenues, offset distribution-related payments to third partieswhich are recorded as a separate line item on the consolidated statement of income, as well as amortizationa portion of deferred sales commissions againstinvestment advisory services fees received that is used to pay distribution revenues.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 netdistribution revenues by distribution-related paymentsand 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 whothat perform functions on behalf of our sponsored mutual funds and/or shareholders of these funds. We offsetDistribution-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 against net revenues because suchas these costs, over time, essentiallywill offset our distributionsuch revenues.
We also exclude additional pass-through expenses we incur (primarilyadjust investment advisory and services fees and other revenues for pass through costs, primarily related to our transfer agency) that are reimbursedagent and recorded as fees in revenues.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.
AdjustedAlso, adjusted net revenues exclude investment gains and losses and dividends and interest on employee long-term incentive compensation-related investments.
Adjusted net revenues includeDuring the impactfourth quarter of adoption2021, we wrote down an equity method investment; this write down brought the investment balance to zero. Additionally, during the first quarter of revenue recognition standard ASC 606, discussed above.
During 2017,2020, we excluded a realized gain of $4.6 million onwrote-down an investment that had been received in exchange for the exchangesale of software technology for an ownership stake in a third party provider of financial market data and trading tools. During 2018,technology; the write-down brought the investment balance to zero. Previously, we decreased our valuation of thishad been excluding the investment by $3.7 million.from adjusted net revenues.
In 2016, we excluded a realized gain of $75.3 million resulting from the liquidation of an investment in Jasper Wireless Technologies, Inc. ("Jasper"), which was acquired by Cisco Systems, Inc., because these transactions are not part of our core operating results.
Adjusted Operating Income
Adjusted operating income represents operating income on a US GAAP basis excluding (1) real estate charges (credits), (2) acquisition-related expenses, (3) 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 impactwrite-down of consolidated company-sponsored investment funds,investments (discussed immediately above), (5) loss (gain) on software technology investment,acquisition-related expenses, (6) adjustments to contingent payment arrangements, and (7) the impact of revenues and expenses associated with the implementation of ASC 606 discussed above.consolidated company-sponsored investment funds.
Real estate charges (credits) have beenincurred during the fourth quarter of 2019 through the fourth quarter of 2020, while excluded because theyin the period in which the charges (credits) were recorded, are not considered part of our core operating results when comparing financial results from period to period and to industry peers.
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.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, which also impacts compensation expense, is recorded within investment gains and losses on the income statement and also impacts compensation expense.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 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 investments discussed above in Adjusted Net Revenues have been excluded due to their non-recurring nature and because they are not part of our core operating results.
48AllianceBernstein
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Part II
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 2021 and 2020, these expenses included an intangible asset impairment charge of $1.0 million and $1.5 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.

Gains and losses on the software technology investment have been excluded due to their non-recurring nature and because they are not part of our core operating results.
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.
A realized gain on the liquidation of our Jasper investment during 2016 was excluded due to its non-recurring nature and because it was not part of our core operating results.
Adjusted Net Income and Adjusted Diluted Net Income per AB Unit
As previously discussed, our quarterly distribution is typically our adjusted diluted net income per unit (which is derived from adjusted net income) for the quarter multiplied by the number of general and limited partnership interests at the end of the quarter. Adjusted income taxes, used in calculating adjusted net income, are calculated using the GAAP effective tax rate adjusted for non-GAAP income tax adjustments.
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.

Net Revenues
The adoption of ASC 606 had no significant impact on revenue recognition during 2018, except for the recognition of $12.9 million of performance-based fees during 2018 from a fund in liquidation, which recognition was not probable of significant reversal. Under the previous revenue accounting standard, these performance-based fees would not have been recognized until final liquidation of the fund.
The components of net revenues are as follows:
 Years Ended December 31% Change
 2021202020192021-202020-19
 (in thousands)  
Investment advisory and services fees:  
Institutions:  
Base fees$540,478 $458,449 $451,125 17.9 %1.6 %
Performance-based fees45,580 53,351 27,839 (14.6)91.6 
 586,058 511,800 478,964 14.5 6.9 
Retail:
Base fees1,442,178 1,186,560 1,076,495 21.5 10.2 
Performance-based fees50,669 24,412 22,510 107.6 8.4 
 1,492,847 1,210,972 1,099,005 23.3 10.2 
Private Wealth Management:
Base fees966,749 817,801 844,809 18.2 (3.2)
Performance-based fees148,870 54,863 49,266 171.3 11.4 
 1,115,619 872,664 894,075 27.8 (2.4)
Total:
Base fees2,949,405 2,462,810 2,372,429 19.8 3.8 
Performance-based fees245,119 132,626 99,615 84.8 33.1 
 3,194,524 2,595,436 2,472,044 23.1 5.0 
Bernstein Research Services452,017 459,744 407,911 (1.7)12.7 
Distribution revenues652,240 529,781 455,043 23.1 16.4 
Dividend and interest income38,734 50,923 104,421 (23.9)(51.2)
Investment (losses) gains(636)(16,401)38,659 (96.1)n/m
Other revenues108,409 104,703 97,559 3.5 7.3 
Total revenues4,445,288 3,724,186 3,575,637 19.4 4.2 
Less: Interest expense3,686 15,650 57,205 (76.4)(72.6)
Net revenues$4,441,602 $3,708,536 $3,518,432 19.8 5.4 
 Years Ended December 31, % Change
 2018 2017 2016 2018-17 2017-16
 (in thousands)  
  
Investment advisory and services fees:       
  
Institutions:       
  
Base fees$444,884
 $430,446
 $403,503
 3.4 % 6.7 %
Performance-based fees32,898
 45,159
 17,394
 (27.2) 159.6
 477,782
 475,605
 420,897
 0.5
 13.0
Retail: 
  
  
    
Base fees992,037
 922,510
 805,621
 7.5
 14.5
Performance-based fees18,278
 24,216
 3,333
 (24.5) 626.6
 1,010,315
 946,726
 808,954
 6.7
 17.0
Private Wealth Management: 
  
  
    
Base fees807,147
 753,569
 691,595
 7.1
 9.0
Performance-based fees66,967
 25,405
 12,025
 163.6
 111.3
 874,114
 778,974
 703,620
 12.2
 10.7
Total: 
  
  
    
Base fees2,244,068
 2,106,525
 1,900,719
 6.5
 10.8
Performance-based fees118,143
 94,780
 32,752
 24.6
 189.4
 2,362,211
 2,201,305
 1,933,471
 7.3
 13.9
Bernstein Research Services439,432
 449,919
 479,875
 (2.3) (6.2)
Distribution revenues418,562
 412,063
 384,405
 1.6
 7.2
Dividend and interest income98,226
 71,162
 46,939
 38.0
 51.6
Investment gains2,653
 92,102
 93,353
 (97.1) (1.3)
Other revenues98,676
 97,135
 99,859
 1.6
 (2.7)
Total revenues3,419,760
 3,323,686
 3,037,902
 2.9
 9.4
Less: Interest expense52,399
 25,165
 9,123
 108.2
 175.8
Net revenues$3,367,361
 $3,298,521
 $3,028,779
 2.1
 8.9
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Investment Advisory and Services Fees
Investment advisory and services fees are the largest component of our revenues. These fees generally are calculated as a percentage of the value of AUM as of a specified date, or as a percentage of the value of average AUM for the applicable billing period, and vary with the type of investment service, the size of account and the total amount of assets we manage for a particular client. Accordingly, fee income generally increases or decreases as AUM increase or decrease and is affected by market appreciation or depreciation, the addition of new client accounts or client contributions of additional assets to existing accounts, withdrawals of assets from and termination of client accounts, purchases and redemptions of mutual fund shares, shifts of assets between accounts or products with different fee structures, and acquisitions. Our average basis points realized (investment advisory and services fees divided by average AUM) generally approximate 4030 to 110105 basis points for actively-managed equity services, 10 to 7570 basis points for actively-managed fixed income services and 2 to 2040 basis points for passively-managed services. Average basis points realized for other services could range from 54 basis points for certain Institutional asset allocationthird party managed services to over 100 basis points for certain Retail and Private Wealth Management alternative services. These ranges include all-inclusive fee arrangements (covering investment management, trade execution and other services) for our Private Wealth Management clients.
We calculate AUM using established market-based valuation methods and fair valuation (non-observable market) methods. Market-based valuation methods include: last sale/settle prices from an exchange for actively-traded listed equities, options and futures;

evaluated bid prices from recognized pricing vendors for fixed income, asset-backed or mortgage-backed issues; mid prices from recognized pricing vendors and brokers for credit default swaps; and quoted bids or spreads from pricing vendors and brokers for other derivative products. Fair valuation methods include: discounted cash flow models evaluation of assets versus liabilities or any other methodology that is validated and approved by our Valuation Committee (see paragraph immediately below for more information regarding our Valuation Committee). Fair valuation methods are used only where AUM cannot be valued using market-based valuation methods, such as in the case of private equity or illiquid securities.
The Valuation Committee, which consists of senior officers and employees, is responsible for overseeing the pricing and valuation of all investments held in client and AB portfolios. The Valuation Committee has adopted a Statement of Pricing Policies describing principles and policies that apply to pricing and valuing investments held in these portfolios. We also have a Pricing Group, which reports to the Valuation Committee and is responsible for overseeing the pricing process for all investments.
We sometimes charge our clients performance-based fees. In these situations, we charge a base advisory fee and are eligible to earn an additional performance-based fee or incentive allocation that is calculated as either a percentage of absolute investment results or a percentage of investment results in excess of a stated benchmark over a specified period of time. Some performance-based fees include a high-watermark provision, which generally provides that if a client account underperforms relative to its performance target (whether absolute or relative to a specified benchmark), it must gain back such underperformance before we can collect future performance-based fees. Therefore, if we fail to achieve our performance target for a particular period, we will not earn a performance-based fee for that period and, for accounts with a high-watermark provision, our ability to earn future performance-based fees will be impaired. We are eligible to earn performance-based fees on 7.3%6.7%, 7.8%8.7% and 0.9%0.6% of the assets we manage for institutional clients, private wealth clients and retail clients, respectively (in total, 5.1%4.5% of our AUM).
Our investment advisory and services fees increased by $160.9$599.1 million, or 7.3%23.1%, in 2018, primarily2021, due to a $137.5$486.6 million, or 6.5%19.8%, increase in base fees whichand a $112.5 million increase in performance-based fees. The increase in base fees is primarily resulted from a 5.1%due to an 18.0% increase in average AUM, and the impact ofas well as a shiftslight increase in distribution channel mix from Institutions to Retail and Private Wealth Management. Also, performance-based fees increased by $23.4 million.our portfolio fee rate. Our investment advisory and services fees increased by $267.8$123.4 million, or 13.9%5.0%, in 2017, primarily2020, due to a $205.8$90.4 million, or 10.8%3.8%, increase in base fees whichand a $33.0 million increase in performance-based fees. The increase in base fees is primarily resulted fromdue to a 7.9% increase in average AUM, partially offset by a lower portfolio fee rate.
Performance-based fees increased $112.5 million, or 84.8%, in 2021, primarily due to higher performance fees earned on Private Credit Services, U.S. Real Estate Funds, Financial Services Opportunities and the impact of a shiftU.S. Select Equity, partially offset by lower Arya Partners fees. Performance-based fees increased $33.0 million, or 33.1%, in distribution channel mix from Institutions2020, primarily due to Retail and Private Wealth Management. Also,higher performance-based fees increased $62.0 million from the prior year.

earned on Arya Partners, partially offset by lower Private Credit Services fees.
Institutional investment advisory and services fees increased $2.2$74.3 million, or 0.5%14.5%, in 2018, primarily2021, due to an increase in base fees of $14.4$82.0 million, or 3.4%17.9%, primarily resulting from a 1.7% increase in average AUM and the impact of higher fees from alternatives and a shift in product mix to active equities, which generally have higher fees. The increase was partially offset by a decrease in performance-based fees of $12.3$7.8 million. The increase in base fees is primarily due to a 13.9% increase in average AUM, an increase in the portfolio fee rate and a shift in product mix from fixed income to active equities and alternatives, which generally earn higher fees. Institutional investment advisory and services fees increased $54.7$32.8 million, or 13.0%6.9%, in 2017,2020, due to an increase in in performance-based fees of $25.5 million and an increase in base fees of $7.3 million, or 1.6%. The increase in base fees was primarily due to a 7.7% increase in average AUM, partially offset by a lower portfolio fee rate.
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Retail investment advisory and services fees increased $281.9 million, or 23.3%, in 2021, due to an increase in base fees of $26.9$255.6 million, or 6.7%21.5%, and a $26.3 million increase in performance-based fees. The increase in base fees is primarily resulting fromdue to a 4.3%23.0% increase in average AUM and the impact of a shift in product mix to active equities, which generally have higher fees. In addition, performance-based fees increased by $27.8 million.
AUM. Retail investment advisory and services fees increased $63.6$112.0 million, or 6.7%10.2%, in 2018, primarily2020, due to an increase in base fees of $69.5$110.1 million, or 7.5%10.2%, and a $1.9 million increase in performance-based fees. The increase in performance-based fees was primarily resulting from an 8.1%due to a 11.4% increase in average AUM. The increase wasAUM, partially offset by a decrease in performance-based fees of $5.9 million. Retail investment advisory and services fees increased $137.8 million, or 17.0%, in 2017, primarily due to an increase in base fees of $116.9 million, or 14.5%, primarily resulting from a 12.6% increase in average AUM and higherlower portfolio fee rate realization. In addition, performance-based fees increased by $20.9 million.

rate.
Private Wealth Management investment advisory and services fees increased by $95.1$243.0 million, or 12.2%27.8%, in 2018,2021, due to ana increase in base fees of $53.6$148.9 million, or 7.1%18.2%, and a $94.0 million increase in performance-based fees. The increase in base fees is primarily resulting from an 8.8%due to a 17.5% increase in average AUM. In addition, performance-based fees increased $41.6 million. Private Wealth Management investment advisory and services fees increased $75.4decreased $21.4 million, or 10.7%2.4%, in 2017,2020, due to an increasedecrease in base fees of $62.0$27.0 million, or 9.0%3.2%, resulting frompartially offset by a 9.8% increase in average AUM and a $13.4 million increase in performance-based fees.fees of $5.6 million. The decrease in base fees was primarily due to the impact of a lower portfolio fee rate, as well as a product mix shift with high fee value equity strategies representing a lower percentage of our total AUM than in prior periods.
Bernstein Research Services
We earn revenues for providing investment research to, and executing brokerage transactions for, institutional clients. These clients compensate us principally by directing us to execute brokerage transactions on their behalf, for which we earn commissions, and to a lesser extent, but increasingly, by paying us directly for research through commission sharing agreements or cash payments.
Revenues from Bernstein Research Services decreased $10.5$7.7 million, or 2.3%1.7%, in 2018.2021. The decrease was due to lower trading activity driven by a reduction in commission rates duelower global market volatility as compared to the unbundling of research services and a volume mix shift to lower fee electronic trading across all regions,COVID-related volatility in 2020. This was partially offset by a weaker U.S. dollar.

higher research payments across Bernstein and Autonomous products.
Revenues from Bernstein Research Services decreased $30.0increased $51.8 million, or 6.2%12.7%, in 2017.2020. The decreaseincrease was driven bydue to higher market volatility in 2020, particularly between March and June 2020, primarily as a declineresult of the COVID-19 pandemic, which led to higher customer activity and greater global trading volumes. Any decreases in clientcustomer activity in the U.S. and trading volumes will have a volume mix shift to electronic trading in Europe. The decrease was partially offset by increased client activity in Asia and a weaker U.S. dollar year-over-year.corresponding effect on Bernstein Research Services revenue. Furthermore, all of 2020 included revenues from our acquisition of Autonomous (which closed on April 1, 2019).
Distribution Revenues
Two of our subsidiaries act as distributors and/or placement agents of company-sponsored mutual funds and receive distribution services fees from certain of those funds as full or partial reimbursement of the distribution expenses they incur. Period-over-period fluctuations of distribution revenues typically are in line with fluctuations of the corresponding average AUM of these mutual funds.
Distribution revenues increased $6.5$122.5 million, or 1.6%23.1%, in 2018,2021, primarily due to the corresponding average AUM of these mutual funds increasing 4.5%, offset by the impact of a shift in product mix. During 2018, average AUM for Japan and Taiwan domiciled funds increased 35.1%, while average AUM of B-share and C-share mutual funds (which have higher distribution rates than A-share mutual funds, as well as other funds not domiciled in the U.S. or Luxembourg) decreased 22.5%17.2%.
Distribution revenues increased $27.7$74.7 million, or 7.2%16.4%, in 2017,2020, primarily due to the corresponding average AUM of these mutual funds increasing 11.2%, offset by the impact of a shift in product mix. During 2017, average AUM of A-share mutual funds (which have lower distribution fee rates than B-share and C-share mutual funds) increased 21.5%, while average AUM of B-share and C-share mutual funds decreased by 13.5%13.2%.
Dividend and Interest Income and Interest Expense
Dividend and interest income consists primarily of investment income and interest earned on customer margin balances and U.S. Treasury Bills as well as dividend and interest income in our consolidated company-sponsored investment funds. Interest expense principally reflects interest accrued on cash balances in customers’ brokerage accounts.
Dividend and interest income net of interest expense, decreased $0.2$12.2 million, or 0.4%23.9%, in 2018. Dividend and interest income, net of interest expense, increased $8.2 million, or 21.6%, in 2017,2021, primarily due to higherlower interest earned on U.S. Treasury Bills as well as lower dividend and interest income in our consolidated company-sponsored investment funds. Interest expense decreased $12.0 million, or 76.4%, in 2021, due to lower interest paid on cash balances in customers' brokerage accounts.
Dividend and interest income decreased $53.5 million, or 51.2%, in 2020, primarily due to lower interest earned on customer margin balances and U.S. Treasury Bills, as well as lower dividend and interest income in our consolidated company-sponsored investment funds. Interest expense decreased $41.6 million, or 72.6%, in 2020, due to lower interest paid on cash balances in customers' brokerage accounts.
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Investment Gains (Losses)
Investment gains (losses) consist primarily of realized and unrealized investment gains or losses on: (i) employee long-term incentive compensation-related investments, (ii) U.S. Treasury Bills, (iii) market-making in exchange-traded options and equities, (iv) seed capital investments, (v) derivatives and (vi) investments in our consolidated company-sponsored investment funds. Investment gains (losses) also include equity in earnings of proprietary investments in limited partnership hedge funds that we sponsor and manage.

Investment gains (losses) are as follows:
Years Ended December 31
202120202019
(in thousands)
Long-term incentive compensation-related investments:Long-term incentive compensation-related investments:
Realized gainsRealized gains$2,213 $2,655 $1,672 
Unrealized gainsUnrealized gains2,446 2,914 5,859 
Years Ended December 31,
2018 2017 2016
(in thousands)
Long-term incentive compensation-related investments     
Realized gains$2,512
 $2,214
 $1,463
Investments held by consolidated company-sponsored investment funds:Investments held by consolidated company-sponsored investment funds:
Realized (losses) gainsRealized (losses) gains(2,341)3,357 9,378 
Unrealized (losses) gains(8,032) 5,723
 (288)Unrealized (losses) gains(1,882)(854)36,150 
     
Investments held by consolidated company-sponsored investment funds     
Realized (losses) gains(1,134) 59,669
 (8,482)
Unrealized gains14,217
 36,340
 28,437
     
Seed capital and other investments 
  
  
Seed capital investments:Seed capital investments: 
Realized gains (losses) 
  
  
Realized gains (losses) 
Seed capital and other(943) 24,822
 67,778
Seed capital and other20,263 25,002 17,301 
Derivatives7,001
 (22,395) (15,207)Derivatives(22,313)(30,343)(30,320)
Unrealized gains (losses) 
  
  
Unrealized (losses) gainsUnrealized (losses) gains 
Seed capital and other(15,003) (9,713) 24,976
Seed capital and other(6,907)(12,387)7,510 
Derivatives5,384
 (1,478) (311)Derivatives8,992 (5,220)(8,013)
     
Brokerage-related investments 
  
  
Realized losses(1,410) (2,796) (5,057)
Unrealized gains (losses)61
 (284) 44
Brokerage-related investments:Brokerage-related investments: 
Realized (losses)Realized (losses)(829)(1,188)(1,209)
Unrealized (losses) gainsUnrealized (losses) gains(278)(337)331 
$2,653
 $92,102
 $93,353
 $(636)$(16,401)$38,659 
Other Revenues
Other revenues consist of fees earned for transfer agency services provided to company-sponsored mutual funds, fees earned for administration and recordkeeping services provided to company-sponsored mutual funds and the general accountsGeneral Accounts of AXA, EQH and their respectiveits subsidiaries, and other miscellaneous revenues. Other revenues increased $1.5$3.7 million, or 1.6%3.5%, in 2018,2021, primarily due to higher shareholder servicing fees, partially offset by lower brokerage income. Other revenues increased $7.1 million, or 7.3%, in 2020, primarily due to higher shareholder servicing fees, higher brokerage income and higher mutual fund reimbursements. Other revenues decreased $2.7 million, or 2.7%, in 2017, primarily due to lower shareholder servicing fees, partlyreimbursements, partially offset by higher mutual fund reimbursements.lower investment income related to our consolidated company-sponsored investment funds.

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Expenses
The components of expenses are as follows:
 Years Ended December 31% Change
 2021202020192021-202020-19
 (in thousands)  
Employee compensation and benefits$1,716,013 $1,494,198 $1,442,783 14.8 %3.6 %
Promotion and servicing:     
Distribution-related payments708,117 569,283 487,965 24.4 16.7 
Amortization of deferred sales commissions34,364 27,355 15,029 25.6 82.0 
Trade execution, marketing, T&E and other197,486 189,787 219,860 4.1 (13.7)
 939,967 786,425 722,854 19.5 8.8 
General and administrative:     
General and administrative555,608 485,544 484,750 14.4 0.2 
Real estate charges— 5,526 3,324 (100.0)66.2 
 555,608 491,070 488,074 13.1 0.6 
Contingent payment arrangements2,710 1,855 (510)46.1 n/m
Interest on borrowings5,145 6,180 13,035 (16.7)(52.6)
Amortization of intangible assets5,697 21,372 28,759 (73.3)(25.7)
Total$3,225,140 $2,801,100 $2,694,995 15.1 3.9 
 Years Ended December 31, % Change
 2018 2017 2016 2018-17 2017-16
 (in thousands)  
  
Employee compensation and benefits$1,378,811
 $1,313,469
 $1,229,721
 5.0 % 6.8 %
Promotion and servicing: 
  
  
  
  
Distribution-related payments427,186
 411,467
 363,603
 3.8
 13.2
Amortization of deferred sales commissions21,343
 31,886
 41,066
 (33.1) (22.4)
Trade execution, marketing, T&E and other222,630
 213,275
 216,542
 4.4
 (1.5)
 671,159
 656,628
 621,211
 2.2
 5.7
General and administrative: 
  
  
  
  
General and administrative448,996
 481,488
 426,147
 (6.7) 13.0
Real estate charges7,160
 36,669
 17,704
 (80.5) 107.1
 456,156
 518,157
 443,851
 (12.0) 16.7
Contingent payment arrangements(2,219) 267
 (20,245) (931.1) n/m
Interest10,359
 8,194
 4,765
 26.4
 72.0
Amortization of intangible assets27,781
 27,896
 26,311
 (0.4) 6.0
Total$2,542,047
 $2,524,611
 $2,305,614
 0.7
 9.5
Employee Compensation and Benefits
Employee compensation and benefits consist of base compensation (including salaries and severance), annual short-term incentive compensation awards (cash bonuses), annual long-term incentive compensation awards, commissions, fringe benefits and other employment costs (including recruitment, training, temporary help and meals).
Compensation expense as a percentage of net revenues was 40.9%38.6%, 39.8%40.3% and 40.6%41.0% for the years ended December 31, 2018, 20172021, 2020 and 2016,2019, respectively. Compensation expense generally is determined on a discretionary basis and is primarily a function of our firm’s current-year financial performance. The amounts of incentive compensation we award are designed to motivate, reward and retain top talent while aligning our executives' interests with the interests of our Unitholders. Senior management, with the approval of the Compensation and Workplace Practices Committee of the Board of Directors of AllianceBernstein Corporation (“Compensation Committee”), periodically confirms that the appropriate metric to consider in determining the amount of incentive compensation is the ratio of adjusted employee compensation and benefits expense to adjusted net revenues. Adjusted net revenues used in the adjusted compensation ratio are the same as the adjusted net revenues presented as a non-GAAP measure (discussed earlier in this Item 7). Adjusted employee compensation and benefits expense is total employee compensation and benefits expense minus other employment costs such as recruitment, training, temporary help and meals (which were 1.1%0.9%, 0.9% and 1.2% of adjusted net revenues for 2018, 20172021, 2020 and 2016)2019, respectively), and excludes the impact of mark-to-market vesting expense, as well as dividends and interest expense, associated with employee long-term incentive compensation-related investments.investments and the amortization expense associated with the awards issued by EQH to some of our firm's senior management relating to their roles as members of the EQH Management Committee. Senior management, with the approval of the Compensation Committee, has established as an objective that adjusted employee compensation and benefits expense generally should not exceed 50% of our adjusted net revenues, except in unexpected or unusual circumstances. Our ratios of adjusted compensation expense as a percentage of adjusted net revenues were 47.5%46.5%, 47.1%47.9% and 48.5%47.9%, respectively, for the years ended December 31, 2018, 20172021, 2020 and 2016.2019.
In 2018,2021, employee compensation and benefits expense increased $65.3$221.8 million, or 5.0%14.8%, primarily due to higher incentive compensation of $19.3 million, higher commissions of $19.0$124.6 million, higher base compensation of $14.7$48.9 million which primarily resulted from(primarily higher salaries, andbase salaries), higher commissions of $25.0 million, higher fringes of $7.4$20.1 million and higher other employment costs of $3.3 million. In 2017,2020, employee compensation and benefits expense increased $83.7$51.4 million, or 6.8%3.6%, primarily due to higher incentive compensation of $68.4$58.8 million and higher base compensation of $5.4$13.5 million which primarily resulted from(primarily higher severance, higherbase salaries), offset by lower fringes of $8.5 million, lower commissions of $4.8$6.2 million and higher fringeslower other employment costs of $4.1$6.2 million.

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Promotion and Servicing
Promotion and servicing expenses include distribution-related payments to financial intermediaries for distribution of AB mutual funds and amortization of deferred sales commissions paid to financial intermediaries for the sale of back-end load shares of AB mutual funds. Also included in this expense category are costs related to trade execution and clearance, travel and entertainment, advertising and promotional materials.
Promotion and servicing expenses increased $14.5$153.5 million, or 2.2%19.5%, in 2018.2021. The increase was primarily due to higher distribution-related payments of $138.8 million, higher transfer fees of $10.1 million, higher amortization of deferred sales commissions of $7.0 million and higher marketing expenses of $4.9 million, partially offset by lower trade execution and clearance expenses of $7.4 million. Promotion and servicing expenses increased $63.6 million, or 8.8%, in 2020. The increase primarily was due to higher distribution-related payments of $15.7$81.3 million, higher marketing expensesamortization of $4.5deferred sales commissions of $12.3 million, and higher trade execution and clearance expenses of $4.5$7.9 million and higher transfer fees of $4.8 million, offset by lower amortizationtravel and entertainment expenses of deferred sales commissions of $10.5 million. Promotion and servicing expenses increased $35.4 million, or 5.7%, in 2017. The increase primarily was due to higher distribution-related payments of $47.9 million, offset by lower amortization of deferred sales commissions of $9.2$34.3 million and lower marketing expense of $8.4 million. The decrease in travel and entertainment costsand marketing expense was primarily as a result of $2.6 million.cost savings associated with the COVID-19 pandemic.
General and Administrative
General and administrative expenses include portfolio services expenses,fees, technology expenses,fees, professional fees and office-related expenses (occupancy, communications and similar expenses). General and administrative expenses as a percentage of net revenues were 13.5% (13.3% excluding real estate charges)12.5%, 15.7% (14.6% excluding real estate charges)13.2% and 14.7% (14.1% excluding real estate charges)13.9% for the years ended December 31, 2018, 20172021, 2020 and 2016,2019, respectively. General and administrative expenses decreased $62.0increased $64.5 million, or 12.0%13.1%, during 2018,in 2021. The increase was primarily due to lower real estate chargeshigher portfolio services fees of $29.5$34.0 million, the lackhigher technology fees of a $19.7$14.3 million, vendor termination fee we recorded in 2017, lower rent expensehigher office-related expenses of $5.0$7.6 million, lower exchange rate losseshigher professional fees of $2.8$6.6 million and an unfavorable foreign exchange translation impact of $5.2 million, partially offset by lower errorscharitable contributions of $2.7$4.9 million. General and administrative expenses increased $74.3$3.0 million, or 16.7%0.6%, during 2017,2020, primarily due to higher expenses related to our consolidated company-sponsored investment fundstechnology fees of $25.5$4.7 million, a vendor termination accrualhigher charitable contributions of $19.7$3.9 million, higher portfolio service fees of $3.6 million, higher real estate charges of $19.0$2.2 million and higher other taxes of $1.6 million, partially offset by lower professional fees of $6.5$9.1 million and lower office-related expenses of $3.5 million.
Contingent Payment Arrangements
Contingent payment arrangements reflect changes in estimates of contingent payment liabilities associated with acquisitions in previous periods, as well as accretion expense of these liabilities. The creditexpense of $2.2$2.7 million for 20182021 reflects accretion expense of $3.3 million, offset by the change in estimate of the contingent consideration payable relating to our 20102016 acquisition of $2.4 million, offset by accretion expenses of $0.2$0.6 million. The expense of $0.3$1.9 million for 20172020 reflects accretion expensesexpense of $0.5$3.3 million, offset by athe change in estimate of the contingent consideration payable relating to our 20102016 acquisition of $0.2 million. The credit to operating expenses of $20.2 million in 2016 reflects changes in estimates of contingent consideration payable of $21.5 million relating to our 2013 and 2010 acquisitions, offset by the accretion expense of $1.3$1.4 million.
Interest on Borrowings
Interest expense increased 26.4% and 72.0%decreased $1.0 million, or 16.7%, in 2018 and 2017, respectively,2021, reflecting lower interest rates partially offset by higher weighted average interest rates on commercial paper borrowings. Average daily borrowings offor both the EQH facility and commercial paper during 2018, 2017 and 2016 were $350.3$561.6 million $482.2 million and $422.9 million, respectively, withat a weighted average interest rate of 0.2% during 2021 compared to $554.0 million and 0.5% during 2020. Interest expense decreased 52.6% in 2020, reflecting lower interest rates partially offset by higher weighted average borrowings. Average daily borrowings for both the EQH facility and commercial paper were $554.0 million at a weighted average interest rate of 2.0%0.5% during 2020 compared to $436.9 million and 2.5% during 2019.
Amortization of Intangible Assets
Amortization of intangible assets reflects our amortization of costs assigned to acquired investment management contracts with a finite life. These assets are recognized at fair value and generally are amortized on a straight-line basis over their estimated useful life. Amortization of intangible assets decreased $15.7 million, or 73.3%, 1.2% and 0.6%$7.4 million, or 25.7%, in 2021 and 2020, respectively. The decrease in both periods was primarily due to the full amortization of intangible assets related to the Bernstein acquisition as of September 30, 2020. As a result, $5.2 million of quarterly amortization expense ceased after the third quarter of 2020.
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Income Taxes
AB, a private limited partnership, is not subject to federal or state corporate income taxes, buttaxes. However, AB is subject to a 4.0% New York City unincorporated business tax (“UBT”). Our domestic corporate subsidiaries are subject to federal, state and local income taxes, and generally are included in the filing of a consolidated federal income tax return. Separate state and local income tax returns also are filed. Foreign corporate subsidiaries generally are subject to taxes in the jurisdictions where they are located.
Income tax expense decreased $7.3increased $17.1 million, or 13.7%37.4%, in 20182021 compared to 2017.2020. This decreaseincrease is due to higher pre-tax book income which resulted in a higher effective tax rate in 2021 of 5.2% compared to 5.0% in 2020.
Income tax expense increased $3.9 million, or 9.3%, in 2020 compared to 2019. This increase is due to higher pre-tax book income, offset by a slightly lower effective tax rate in 20182020 of 5.6%5.0% compared to 6.9%5.1% in 2017 and higher pre-tax income.2019. The decrease in our effective tax rate was driven by the impacta reduction of tax reform in the prior year, offset by one-time discrete items.
Income tax expense increased $24.8 million, or 87.5%, in 2017 compared to 2016. The increase is due to a higher effective tax rate in 2017 of 6.9%, compared to 3.9% in 2016, and higher pre-tax income. The significant increase in our effective tax rate was driven by the deemed repatriation tax on foreign earnings, the tax associated with the remeasurement of deferred tax items, and the unfavorable mix of earnings across the AB tax filing groups.
Net Income (Loss) of Consolidated Entities Attributable to Non-Controlling Interests
Net income (loss) of consolidated entities attributable to non-controlling interests primarily consists of limited partner interests owned by other investors in our consolidated company-sponsored investment funds. In 2018, 2017, and 2016,2021, we had $21.9$5.1 million $58.4 million and $21.5 million, respectively, of net gainsincome of consolidated entities attributable to non-controlling interests, primarily

due to gains on investments held by our consolidated company-sponsored investment funds. Fluctuations period-to-period are drivenIn 2020, we had $4.2 million of net losses of consolidated entities attributable to non-controlling interests, primarily due to losses on investments held by the number ofour consolidated company-sponsored investment funds and their respective market performance.funds. In 2019 we had $29.6 million of net gains of consolidated entities attributable to non-controlling interests, primarily due to gains on investments held by our consolidated company-sponsored investment funds.
Capital Resources and Liquidity
Cash flows from operating activities primarily include the receipt of investment advisory and services fees and other revenues offset by the payment of operating expenses incurred in the normal course of business. Our cash flows from operating activities have historically been positive and sufficient in supporting our operations. We do not anticipate this to change in the foreseeable future. Cash flows from investing activities generally consist of small capital expenditures and, when applicable, business acquisitions. Cash flows from financing activities primarily consist of issuance and repayment of debt and the repurchase of AB Holding units to fund our long-term deferred compensation plans. We are required to distribute all of our Available Cash Flow to our Unitholders and the General Partner.
During 2018,2021, net cash provided by operating activities was $1.3 billion, compared to $645.5 million$1.5 billion during 2017.2020. The change primarily was due to net activity of our consolidated company-sponsored investment funds of $560.6 million, an increase in other assets of $75.7 million and higher net purchases of broker-dealer investments of $33.3 million, partially offset by higher earnings of $346.2 million, an increase in broker-dealer related payables (net of receivable and segregated U.S. Treasury Bills activity) of $618.8$72.9 million a decreaseand an increase in accounts payable and accrued expenses of $25.2 million.During 2020, net cash provided by operating activities was $1.5 billion, compared to $827.5 million during 2019. The change primarily was due to net activity of our consolidated company-sponsored investment funds of $467.3$468.2 million, and higher cash provided by net income of $75.5 million, offset by higher net purchases of broker-dealer investments of $294.7 million and an increase in broker dealer deposits with clearing organizations of $150.5 million.During 2017, net cash provided by operating activities was $645.5 million, compared to $1.5 billion during 2016. The change primarily was due to a decrease in net activity of our consolidated company-sponsored investment funds of $466.5 million, a decrease in broker-dealer related payables (net of receivable and segregated U.S. Treasury Bills activity) of $376.3$368.0 million, a decrease in other assets of $92.3 million, an increase in accounts payable and accrued expenses of $67.2 million and lower net redemptionsan increase in accrued compensation of seed capital and$54.4 million, partially offset by higher net purchases of broker-dealer investments of $187.5 million, offset by an increase in cash provided by net income of $86.5$454.1 million.
During 2018,2021, net cash used in investing activities was $32.8$65.7 million, compared to $39.3$59.1 million during 2017.2020. The change is primarily reflects lowerdue to higher purchases of furniture, equipment and leasehold improvements of $6.6$20.4 million, partially offset by lower cash paid for acquisitions, net of cash acquired, of $9.8 million and lower purchases of equity method investments of $4.1 million. During 2017,2020, net cash used in investing activities was $39.3$59.1 million, compared to $59.4$23.0 million during 2016.2019. The change is primarily reflects the $20.5due to $13.6 million spent in 2016 to purchase a business.paid for acquisitions, net of cash acquired, $4.1 million paid for equity method investments and higher purchases of furniture, equipment and leasehold improvements of $13.2 million.
During 2018,2021, net cash used in financing activities was $1.6$0.9 billion, compared to $623.9 million during 2017. The change reflects the net redemptions of non-controlling interests of consolidated company-sponsored investment funds in 2018 as compared to net purchases of consolidated company-sponsored investment funds in 2017 (impact of $635.3 million), higher distributions to the General Partner and Unitholders of $214.1 million and net repayments of bank loans in 2018 as compared to net proceeds from bank loans in 2017 (impact of $125.0 million).During 2017, net cash used in financing activities was $623.9 million, compared to $1.1 billion during 2016.2020. The change reflects the net purchases of non-controlling interests of consolidated company-sponsored investment funds in 20172021 as compared to net redemptions of consolidated company-sponsored investment funds in 20162020 (impact of $296.0$532.7 million), a net increase in overdrafts payable of $147.9 million, proceeds from bank loans of $75.0 million and lower net repayments of commercial paper of $43.5 million,partially offset by higher distributions to the General Partner and Unitholders of $106.6$223.0 million as a result of higher earnings (distributions on earnings are paid one quarter in arrears) and an increase in the net purchases of AB Holding Units to fund long-term incentive compensation plans of $113.2 million.During 2020, net cash used in financing activities was $1.1 billion, compared to $775.0 million during 2019. The change reflects higher redemptions of non-controlling interests of consolidated company-sponsored investment funds of $369.1 million and higher distributions to the General Partner and Unitholders of $133.4 million, partially offset by higher net proceeds of debt of $112.9 million and an increase in overdrafts payable of $47.3 million.
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As of December 31, 2018,2021, AB had $640.2 million$1.3 billion of cash and cash equivalents (excluding cash and cash equivalents of consolidated company-sponsored investment funds), all of which is available for liquidity consistingbut consist primarily of cash on deposit for our broker-dealers related to comply with various customer clearing activities, and cash held by foreign subsidiaries of $418.0$675.3 million.
Debt and Credit Facilities
As of December 31, 2018 and 2017, AB had $523.2 million and $491.8 million, respectively,See Note 12 to our consolidated financial statements in commercial paper outstanding with weighted average interest rates of approximately 2.7% and 1.6%, respectively. Debt included in the statement of financial condition is presented net of issuance costs of $1.9 million and $1.1 million as of December 31, 2018 and 2017, respectively. The commercial paper is short term in nature, and as such, recorded value is estimated to approximate fair value (and considered a Level 2 security in the fair value hierarchy). Average daily borrowings of commercial paper during 2018 and 2017 were $350.3 million and $482.2 million, respectively, with weighted average interest rates of approximately 2.0% and 1.2%, respectively.
On September 27, 2018, AB amended and restated the existing $1.0 billion committed, unsecured senior revolving credit facility (the "Credit Facility") with a group of commercial banks and other lenders, reducing the principal amount to $800.0 million and extending the maturity to September 27, 2023. The Credit Facility providesItem 8 for possible increases in the principal amount by up to an aggregate incremental amount of $200.0 million; any such increase is subject to the consent of the affected lenders. The Credit Facility is available for AB and Sanford C. Bernstein & Co., LLC ("SCB LLC") business purposes, including the support of AB’s commercial paper program. Both AB and SCB LLC can draw directly under the Credit Facility and management may draw on the Credit Facility from time to time. AB has agreed to guarantee the obligations of SCB LLC under the Credit Facility.
The Credit Facility contains affirmative, negative and financial covenants, which are customary for facilities of this type, including restrictions on dispositions of assets, restrictions on liens, a minimum interest coverage ratio and a maximum leverage ratio. As of December 31, 2018, we were in compliance with these covenants. The Credit Facility also includes customary events of default (with customary grace periods, as applicable), including provisions under which, upon the occurrence of an event of default, all outstanding loans may be accelerated and/or lender’s commitments may be terminated. Also, under such provisions, upon the occurrence of certain insolvency- or bankruptcy-related events of default, all amounts payable under the Credit Facility would automatically become immediately due and payable, and the lender’s commitments automatically would terminate.

Amounts under the Credit Facility may be borrowed, repaid and re-borrowed by us from time to time until the maturity of the facility. Voluntary prepayments and commitment reductions requested by us are permitted at any time without a fee (other than customary breakage costsdisclosures relating to the prepayment of any drawn loans) upon proper noticeour debt and subject to a minimum dollar requirement. Borrowings under the Credit Facility bear interest at a rate per annum, which will be, at our option, a rate equal to an applicable margin, which is subject to adjustment based on the credit ratings of AB, plus one of the following indices: London Interbank Offered Rate; a floating base rate; or the Federal Funds rate.facilities.
As of December 31, 2018 and 2017, we had no amounts outstanding under the Credit Facility. During 2018 and 2017, we did not draw upon the Credit Facility.
On November 16, 2018, AB amended and restated its existing $200.0 million committed, unsecured senior revolving credit facility (the "Revolver") with a leading international bank, extending the maturity date of the Revolver from November 28, 2018 to November 16, 2021. There were no other material changes included in the amendment. The Revolver is available for AB's and SCB LLC's business purposes, including the provision of additional liquidity to meet funding requirements primarily related to SCB LLC's operations. Both AB and SCB LLC can draw directly under the Revolver and management expects to draw on the Revolver from time to time. AB has agreed to guarantee the obligations of SCB LLC under the Revolver. The Revolver contains affirmative, negative and financial covenants which are identical to those of the Credit Facility. As of December 31, 2018 and December 31, 2017, we had $25.0 million and $75.0 million outstanding under the Revolver, respectively, with interest rates of 3.4% and 2.4%, respectively. Average daily borrowings for 2018 and 2017 were $19.4 million and $21.4 million, respectively, with weighted average interest rates of 2.8% and 2.0%, respectively.

In addition, SCB LLC currently has three uncommitted lines of credit with three financial institutions. Two of these lines of credit permit us to borrow up to an aggregate of approximately $175.0 million, with AB named as an additional borrower, while the other line has no stated limit. As of December 31, 2018 and 2017, SCB LLC had no bank loans outstanding. Average daily borrowings of bank loans during 2018 and 2017 were $2.7 million and $4.5 million, respectively, with weighted average interest rates of approximately 1.6% and 1.4%, respectively.
Our financial condition and access to public and private debt markets should provide adequate liquidity for our general business needs. Management believes that cash flow from operations and the issuance of debt and AB Units or AB Holding Units will provide us with the resources we need to meet our financial obligations. See “Risk Factors” in Item 1A and “Cautions Regarding Forward-Looking Statements” in this Item 7 for a discussion of credit markets and our ability to renew our credit facilities at expiration.
Off-Balance Sheet Arrangements and Aggregate Contractual Obligations
Guarantees
Under various circumstances, AB guarantees the obligations of its consolidated subsidiaries.
AB maintains guaranteesa guarantee in connection with the an $800 million committed, unsecured senior revolving credit facility (the "Credit Facility and Revolver."). If SCB LLC is unable to meet its obligations, AB will pay the obligations when due or on demand. In addition, during 2021 AB established two additional uncommitted lines of credit for $100.0 million and $50.0 million, respectively, which are available for both AB's and SCB LLC's business. AB has guaranteed the obligations of SCB LLC under these lines of credit. AB maintains guarantees totaling $375$415.0 million for SCB LLC’s threefive uncommitted lines of credit.
AB maintains a guarantee with a commercial bank, under which we guarantee the obligations in the ordinary course of business of each of SCB LLC, our U.K.-based broker-dealer and our Cayman subsidiary. We also maintain fourthree additional guarantees with other commercial banks under which we guarantee approximately $366$277.4 million of obligations for our U.K.-based broker-dealer and $99$99.0 million of obligations for our India-based broker-dealer. In the event that any of these fourthree entities is unable to meet its obligations, AB will pay the obligations when due or on demand.
We also have two smaller guarantees with a commercial bank totaling approximately $1.5$2.0 million, under which we guarantee certain obligations in the ordinary course of business of one of our foreign subsidiaries.
We have not been required to perform under any of the above agreements and currently have no liability in connection with these agreements.

Aggregate Contractual Obligations
Our contractual obligations as of December 31, 2018 are as follows:
 Payments Due by Period
 Total 
Less than
1 Year
 1-3 Years 3-5 Years 
More than
5 Years
 (in millions)
Commercial paper$523.2
 $523.2
 $—
 $—
 $—
Line of Credit25.0
 25.0
 —
 —
 —
Operating leases, net of sublease commitments578.8
 84.3
 158.4
 136.0
 200.1
Funding commitments15.3
 6.9
 1.8
 1.2
 5.4
Accrued compensation and benefits255.6
 171.1
 49.5
 15.0
 20.0
Unrecognized tax benefits (1)
3.9
 —
 1.1
 —
 2.8
Federal transition tax (1)
21.8
 1.9
 3.8
 5.4
 10.7
Total$1,423.6
 $812.4
 $214.6
 $157.6
 $239.0
________________________
(1)See Note 21 to our consolidated financial statements in Item 8 for discussion of unrecognized tax benefits and federal transition tax.
During 2010, as general partner of AllianceBernstein U.S. Real Estate L.P. (“Real Estate Fund”), we committed to invest $25$25.0 million in the Real Estate Fund. As of December 31, 2018,2021, we had funded $22.4 million of this commitment. During 2014, as general partner of AllianceBernstein U.S. Real Estate II L.P. (“Real Estate Fund II”), we committed to invest $28.0$27.3 million, as amended in 2015,2020, in the Real Estate Fund II. As of December 31, 2018,2021, we had funded $15.3$21.1 million of this commitment.
We have various compensation and benefit obligations, including accrued salaries and fringes, commissions, payroll taxes, incentive payments and deferred compensation arrangements. The majority of our compensation and benefits obligations are paid out in less than one year, while the deferred compensation obligations are payable over various periods, with the majority payable over periods of up to three years. Accrued compensation and benefits amounts in the table above excludeat December 31, 2021 totaled $353.6 million. This amount excludes our accrued pension obligation. Offsetting our accrued compensation obligations are long-term incentive compensation-related investments and money market investments we funded totaling $57.7$65.7 million, which are included in our consolidated statement of financial condition. Any amounts reflected on the consolidated statement of financial condition as payables (to broker-dealers, brokerage clients and company-sponsored mutual funds) and accounts payable and accrued expenses (excluding the tax obligations above) are excluded from the table above.aforementioned accrued compensation and benefits obligation amount.
We expect to make contributions to our qualified profit sharing plan of approximately $14$16.5 million in each of the next four years. We do not currently estimateanticipate that we will contribute $4million to the Retirement Plan during 2019.2022.
Contingencies
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The 2017 Tax Act (enacted in the U.S. on December 22, 2017) imposed a federal transition tax on mandatory deemed repatriation of certain deferred foreign earnings. Management elected to pay the transition tax in installments over an eight-year period from 2018 to 2025. The federal transition tax obligation at December 31, 2021 totaled $13.3 million and is recorded to income tax payable on our consolidated statement of financial condition. See Note 20 to our consolidated financial statements in Item 8 for further discussion of our taxes.
See Note 13 to our consolidated financial statements in Item 8 for discussion of our leases.
See Note 12 to our consolidated financial statements in Item 8 for a discussion of our debt.
Contingencies
See Note 14 to our consolidated financial statements in Item 8 for a discussion of our commitments and contingencies.
Critical Accounting Estimates
The preparation of the consolidated financial statements and notes to consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses.
Management believes that the critical accounting policies and estimates discussed below involve significant management judgment due to the sensitivity of the methods and assumptions used.
Goodwill
As of December 31, 2018,2021, we had goodwill of $3.1 billion on the consolidated statement of financial condition. We have determined that AB has only one reporting segment and reporting unit. We test our goodwill annually, as of September 30, for impairment. As of September 30, 2018,2021, the impairment test indicated that goodwill was not impaired. The carrying value of goodwill is also reviewed if facts and circumstances occur that suggest possible impairment, such as significant declines in AUM, revenues, earnings or the price of an AB Holding Unit.
On an annual basis, or when circumstances warrant, we perform step one of our two-step goodwill impairment test. The first step of the goodwill impairment test is used to identify potential impairment by comparing the fair value of AB, the reporting unit, with its carrying value, including goodwill. If the fair value of the reporting unit exceeds its carrying value, goodwill is not

considered to be impaired and the second step of thetested for impairment test is not performed. However, if the carrying value of the reporting unit exceeds its fair value, the second step of the goodwill impairment test is performed to measure the amount of impairment loss, if any. The second step compares the implied fair value of the reporting unit to the aggregated fair values of its individual assets and liabilities to determine the amount of impairment, if any.
AB estimates its fair value under bothutilizing the market approach and income approach. Under the market approach,where the fair value of the reporting unit is based on its unadjusted market valuation (AB Units outstanding multiplied by the price of an AB Holding Unit) and adjusted market valuations assuming a control premiumHolding's Unit price) and earnings multiples. The price of a publicly-traded AB Holding Unit serves as a reasonable starting point for valuing an AB Unit because each represents the same fractional interest in our underlying business. Our market approach analysis also includes control premiums, which are based on an analysis of control premiums for relevant recent acquisitions, and comparable industry earnings multiples applied to our earnings forecast. Underforecast and assumes a control premium (when applicable).
Throughout the income approach,year, the carrying value of goodwill is also reviewed for impairment if certain events or changes in circumstances occur and trigger whether an interim impairment test may be required. Such changes in circumstances may include, but are not limited to, a sustained decrease in the price of an AB Holding Unit or declines in AB’s market capitalization that would suggest that the fair value of the reporting unit is based onless than the presentcarrying amount; significant and unanticipated declines in AB’s assets under management or revenues; and/or lower than expected earnings per unit. Any of these changes in circumstances could suggest the possibility that goodwill is impaired, but none of these events or circumstances by itself would indicate that it is more likely than not that goodwill is impaired. Instead, they are merely recognized as triggering events for the consideration of impairment and must be viewed in combination with any mitigating or positive factors. A holistic evaluation of all events since the most recent quantitative impairment test must be done to determine whether it is more likely than not that the reporting unit is impaired.
Under ASU 2017-04, Simplifying the Test for Goodwill Impairment, a goodwill impairment will be the amount by which a reporting unit's carrying value of estimated future cash flows. Determining estimatedexceeds its fair value, using a discounted cash flow valuation technique consistsnot to exceed the carrying amount of applying business growth rate assumptions over the estimated life ofgoodwill. Under this guidance, the goodwill asset and then discounting the resulting expected cash flows using an estimated weighted average costimpairment test no longer includes a determination by management of capitalwhether a decline in fair value is temporary; however, it is important that management's determination of market participants to arrive at a presentfair value amount that approximates fair value.
Real Estate Charges
Since 2010, in connection with our workforce reductions and in an effort to reduce our global real estate footprint, we have implemented a global office space consolidation. As a result, we have sub-leased over one million square feet of office space.
We recorded real estate charges that reflect the net present valueimpact of changing market conditions, including the difference between the amountseverity and anticipated duration of our on-going contractual lease obligations for the vacated floors and our estimate of current market rental rates forany such floors. The charges we recorded were based on current assumptions at the time of the charges regarding sublease marketing periods, costs to prepare the properties to market, market rental rates, broker commissions and subtenant allowances/incentives, all of which are factors largely beyond our control. If our assumptions prove to be incorrect, we may need to record additional charges or reduce previously recorded charges. We review the assumptions and estimates we used in recording these charges on a quarterly basis.changes.
Loss Contingencies
Management continuously reviews with legal counsel the status of regulatory matters and pending or threatened litigation. We evaluate the likelihood that a loss contingency exists and record a loss contingency if it is both probable and reasonably estimable as of the date of the financial statements. See Note 14 to our consolidated financial statements in Item 8.
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Accounting Pronouncements
See Note 2 to our consolidated financial statements in Item 8.
Cautions Regarding Forward-Looking Statements
Certain statements provided by management in this report 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. We caution readers to carefully consider such factors. Further, these forward-looking statements speak only as of the date on which such statements are made; we undertake 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” in Item 1A. Any or all of the forward-looking statements that we make in this Form 10-K, other documents we file with or furnish to the SEC, and any other public statements we issue, may turn out to be wrong. It is important to remember that other factors besidesthose listed in “Risk Factors” and those listed below could also adversely impact our revenues, financial condition, results of operations and business prospects.

The forward-looking statements referred to in the preceding paragraph,, most of which directly affect AB but also affect AB Holding because AB Holding’s principal source of income and cash flow is attributable to its investment in AB, include statements regarding:
•Our belief that the cash flow AB Holding realizes from its investment in AB will provide AB Holding with the resources it needs to meet its financial obligations: AB Holding’s cash flow is dependent on the quarterly cash distributions it receives from AB. Accordingly, AB Holding’s ability to meet its financial obligations is dependent on AB’s cash flow from its operations, which is subject to the performance of the capital markets and other factors beyond our control.

•Our financial condition and ability to access the public and private capital markets providing adequate liquidity for our general business needs: Our financial condition is dependent on our cash flow from operations, which is subject to the performance of the capital markets, our ability to maintain and grow client assets under management and other factors beyond our control. Our ability to access public and private capital markets on reasonable terms may be limited by adverse market conditions, our firm’s credit ratings, our profitability and changes in government regulations, including tax rates and interest rates.

•The outcome of litigation: Litigation is inherently unpredictable, and excessive damage awards do occur. Though we have stated that we do not expect any pending legal proceedings to have a material adverse effect on our results of operations, financial condition or liquidity, any settlement or judgment with respect to a pending or future legal proceeding could be significant, and could have such an effect.

•The possibility that we 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.

•Our determination that adjusted employee compensation expense should not exceed 50% of our adjusted net revenues:Aggregate employee compensation reflects employee performance and competitive compensation levels. Fluctuations in our revenues and/or changes in competitive compensation levels could result in adjusted employee compensation expense exceeding 50% of our adjusted net revenues.
•Our Relocation Strategy: While many of the expenses, expense savings and EPU impact we expect will result from our Relocation Strategy are presented with numerical specificity, and we believe these figures to be reasonable as of the date of this report, the uncertainties surrounding the assumptions on which our estimates are based create a significant risk that our current estimates may not be realized. These assumptions include:
•the amount and timing of employee relocation costs, severance, and overlapping compensation and occupancy costs we experience; and
•the timing for execution of each phase of our relocation implementation plan.
Our 2020 Margin Target: We previously adopted a goal•The Adverse Impact of increasing our adjusted operating margin to a target of 30% by 2020, subject to the assumptions, factors and contingencies described as partCOVID-19: The severity of the initial disclosure of this target. Our adjusted operating margin for 2018 was 29.1%.
Significant declines in the equity and fixed income markets during the fourth quarter of 2018, most notably in December 2018, reducedexpected adverse impact on our AUM by $34.0 billion, or 6.2%, during the fourth quarter to $516.4 billion from $550.4 billion at the endand revenues of the third quartereconomic downturn caused by the COVID-19 pandemic will depend on the depth and length of 2018. Given the downturn and its impact on the companies in which we expect this lower AUM will haveinvest. Our conclusions about the possible continuing significant adverse impact on us is based on our ability to generateassumptions that the levelrecovery will be gradual and that there may be lasting unemployment and economic damage. We
58AllianceBernstein
Table of investment advisory fee revenues we initially forecast when establishing the 2020 Margin Target, presently we do not Contents
Part II
believe that achieving the 2020 Margin Target is likely. However, wethese assumptions are taking additional actions to better alignreasonable, but they may not be correct and economic conditions likely will differ from our expenses with these lower AUM and expected revenues. We remain committed to achieving an adjusted operating margin of 30% in years subsequent to 2020 and will take continued actions in this regard, subject to prevailing market conditions and the evolution of our business mix.assumptions.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

AB Holding

Market Risk, Risk Management and Derivative Financial Instruments

Market Risk, Risk Management and Derivative Financial Instruments
AB Holding’s sole investment is AB Units. AB Holding did not own, nor was it a party to, any derivative financial instruments during the years ended December 31, 2018, 20172021, 2020 and 2016.2019.

AB
Market Risk, Risk Management and Derivative Financial Instruments
Our investments consist of trading and other investments. Trading investments include U.S. Treasury Bills, mutual funds, exchange-traded options and various separately-managed portfolios consisting of equity securities. Trading investments are purchased for short-term investment, principally to fund liabilities related to long-term incentive compensation plans and to seed new investment services. Other investments include investments in hedge funds we sponsor and other private equity investment vehicles.
We enter into various futures, forwards, swaps and options primarily to economically hedge our seed capital investments. We do not hold any derivatives designated in a formal hedge relationship under ASC 815-10, Derivatives and Hedging. See Note 87 to our consolidated financial statements in Item 8.
Trading and Non-Trading Market Risk Sensitive Instruments
Investments with Interest Rate Risk—Fair Value
The table below provides our potential exposure with respect to our fixed income investments, measured in terms of fair value, to an immediate 100 basis point increase in interest rates at all maturities from the levels prevailing as of December 31, 20182021 and 2017.2020. Such a fluctuation in interest rates is a hypothetical rate scenario used to calibrate potential risk and does not represent our view of future market movements. While these fair value measurements provide a representation of interest rate sensitivity of our investments in fixed income mutual funds and fixed income hedge funds, they are based on our exposures at a particular point in time and may not be representative of future market results. These exposures will change as a result of ongoing changes in investments in response to our assessment of changing market conditions and available investment opportunities:
As of December 31
20212020
Fair ValueEffect of
+100
Basis Point
Change		Fair ValueEffect of
+100
Basis Point
Change
(in thousands)
Fixed Income Investments:
Trading$100,661 $(6,976)$35,555 $(2,457)
 As of December 31,
 2018 2017
 Fair Value 
Effect of
+100
Basis Point
Change
 Fair Value 
Effect of
+100
Basis Point
Change
 (in thousands)
Fixed Income Investments:       
Trading$435,020
 $(28,668) $137,002
 $(8,987)

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Investments with Equity Price Risk—Fair Value
Our investments also include investments in equity securities, mutual funds and hedge funds. The following table provides our potential exposure with respect to our equity investments, measured in terms of fair value, to an immediate 10% dropdecrease in equity prices from those prevailing as of December 31, 20182021 and 2017.2020. A 10% decrease in equity prices is a hypothetical scenario used to calibrate potential risk and does not represent our view of future market movements. While these fair value measurements provide a representation of equity price sensitivity of our investments in equity securities, mutual funds and hedge funds, they are based on our exposures at a particular point in time and may not be representative of future market results. These exposures will change as a result of ongoing portfolio activities in response to our assessment of changing market conditions and available investment opportunities:
 As of December 31
 20212020
 Fair ValueEffect of
-10%
Equity Price
Change		Fair ValueEffect of
-10%
Equity Price
Change
 (in thousands)
Equity Investments:
Trading$85,704 $(8,570)$137,529 $(13,753)
Other investments$87,053 $(8,705)$80,291 $(8,029)
 As of December 31,
 2018 2017
 Fair Value 
Effect of -10%
Equity Price
Change
 Fair Value 
Effect of -10%
Equity Price
Change
 (in thousands)
Equity Investments:       
Trading$178,215
 $(17,822) $214,172
 $(21,417)
Other investments101,109
 (10,111) 92,415
 (9,242)

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Item 8. Financial Statements and Supplementary Data

Report of Independent Registered Public Accounting Firm

To the General Partner and Unitholders of
AllianceBernstein Holding L.P.:
Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying statements of financial condition of AllianceBernstein Holding L.P. (the “Company”) as of December 31, 20182021 and 2017,2020, and the related statements of income, of comprehensive income, of changes in partners’ capital and of cash flows for each of the three years in the period ended December 31, 2018,2021, including the related notes (collectively referred to as the “financial statements”). We also have audited the Company's internal control over financial reporting as of December 31, 2018,2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).


In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 20182021 and 2017,2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 20182021 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2018,2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

COSO.
Basis for Opinions

The Company's management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management'sManagement’s Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.


We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.


Our audits of the financial statements included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.



Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.


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Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Measurement of Equity in Net Income Attributable to AB Unitholders – Performance-Based Fees
As described in Notes 1 and 2 to the financial statements, the Company’s principal source of income and cash flow is attributable to its investment in AllianceBernstein L.P. (AB) limited partnership interests. The equity in net income attributable to AB unitholders was $416.3 million for the year ended December 31, 2021. The Company records its investment in AB using the equity method of accounting. The Company’s investment is increased to reflect its proportionate share of income of AB, decreased to reflect its proportionate share of losses of AB and cash distributions made by AB to its unitholders and adjusted to reflect its proportionate share of certain capital transactions of AB. The Company’s proportionate share of income of AB includes performance-based fees recognized by AB. As disclosed by management, the transaction price for the asset management performance obligation for certain hedge fund and alternative investment advisory contracts, provide for a performance-based fee, in addition to the base advisory fee, which is calculated as either a percentage of absolute investment results or a percentage of investment results in excess of a stated benchmark over a specified period of time. The performance-based fees are forms of variable consideration and are therefore excluded from the transaction price until it becomes probable that there will not be significant reversal of the cumulative revenue recognized. Constraining factors impacting the amount of variable consideration included in the transaction price include the contractual claw-back provisions to which the variable consideration is subject, the length of time to which the uncertainty of the consideration is subject, the number and range of possible consideration amounts, the probability of significant fluctuations in the fund’s market value and the level at which the fund’s value exceeds the contractual threshold required to earn such a fee. With respect to the constraining factors related to the fund’s market value, management measures assets under management (AUM) using established market-based valuation methods and fair valuation (non-observable market) methods. Fair valuation methods, including discounted cash flow models and other methods, are used only where AUM cannot be valued using market-based valuation methods, such as in the case of private equity or illiquid securities.

The principal considerations for our determination that performing procedures relating to the measurement of equity in net income attributable to AB unitholders - performance-based fees is a critical audit matter are the significant audit effort in performing procedures and evaluating evidence related to these fees, including evaluating evidence related to the constraining factors impacting the amount of variable consideration, and the audit effort also included the involvement of professionals with specialized skill and knowledge to assist in evaluating management’s estimate of the funds’ market value where fair valuation methods are used.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the financial statements. These procedures included testing the effectiveness of controls relating to equity in net income attributable to AB Unitholders, including controls relating to AB’s revenue recognition process for performance-based fees, including controls over the assessment of constraining factors and the valuation of AUM. These procedures also included, among others, testing management’s process for determining performance-based fees, including evaluating the appropriateness of the methods used, testing the contractual claw-back provisions to which the variable consideration is subject and, on a sample basis, evaluating the reasonableness of management’s assumptions related to the length of time to which the uncertainty of the consideration is subject, the number and range of possible consideration amounts and the probability of significant fluctuations in the funds’ market value and, as applicable, the level at which a fund’s value exceeded the contractual threshold required to earn such fees. In evaluating management’s estimates of the funds’ market value, procedures included the involvement of professionals with specialized skill and knowledge to assist in developing an independent range of prices for a sample of securities used in determining the underlying funds’ market value where fair valuation methods are used, and comparison of management’s estimate of the securities’ fair value to the independently developed ranges. Developing the independent estimate of securities’ fair value involved testing the completeness and accuracy of data provided by management and independently developing the significant assumptions for the sampled securities.
/s/PricewaterhouseCoopers LLP
Nashville, Tennessee
February 11, 2022
New York, New York
February 13, 2019

We have served as the Company’s auditor since2006.


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Statements of Financial Condition

December 31,Years Ended December 31
2018 201720212020
(in thousands,
except unit amounts)
(in thousands,
except unit amounts)
ASSETS   ASSETS
Investment in AB$1,490,701
 $1,544,704
Investment in AB$1,623,764 $1,605,941 
Other assetsOther assets— 92 
Total assets$1,490,701
 $1,544,704
Total assets$1,623,764 $1,606,033 
LIABILITIES AND PARTNERS’ CAPITAL   LIABILITIES AND PARTNERS’ CAPITAL
Liabilities:   Liabilities:
Other liabilities$644
 $1,154
Other liabilities$2,140 $1,876 
Total liabilities644
 1,154
Total liabilities2,140 1,876 
Commitments and contingencies (See Note 7)


 

Commitments and contingencies (See Note 7)
00
Partners’ capital:   Partners’ capital:
General Partner: 100,000 general partnership units issued and outstanding1,385
 1,411
General Partner: 100,000 general partnership units issued and outstanding1,439 1,410 
Limited partners: 96,558,278 and 96,361,989 limited partnership units issued and outstanding1,555,892
 1,590,776
Limited partners: 99,171,727 and 98,222,942 limited partnership units issued and outstandingLimited partners: 99,171,727 and 98,222,942 limited partnership units issued and outstanding1,696,199 1,656,816 
AB Holding Units held by AB to fund long-term incentive compensation plans(27,759) (15,174)AB Holding Units held by AB to fund long-term incentive compensation plans(43,309)(20,171)
Accumulated other comprehensive loss(39,461) (33,463)Accumulated other comprehensive loss(32,705)(33,898)
Total partners’ capital1,490,057
 1,543,550
Total partners’ capital1,621,624 1,604,157 
Total liabilities and partners’ capital$1,490,701
 $1,544,704
Total liabilities and partners’ capital$1,623,764 $1,606,033 
See Accompanying Notes to Financial Statements.

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Statements of Income

Years Ended December 31, Years Ended December 31
2018 2017 2016 202120202019
(in thousands, except per unit amounts) (in thousands, except per unit amounts)
Equity in net income attributable to AB Unitholders$270,647
 $232,393
 $239,389
Equity in net income attributable to AB Unitholders$416,326 $308,404 $266,292 
     
Income taxes28,250
 24,971
 22,803
Income taxes30,483 29,024 27,729 
     
Net income$242,397
 $207,422
 $216,586
Net income$385,843 $279,380 $238,563 
     
Net income per unit:     Net income per unit:
     
Basic$2.50
 $2.19
 $2.24
Basic$3.88 $2.88 $2.49 
Diluted$2.50
 $2.19
 $2.23
Diluted$3.88 $2.88 $2.49 
See Accompanying Notes to Financial Statements.

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Statements of Comprehensive Income

 Years Ended December 31,
 2018 2017 2016
 (in thousands)
Net income$242,397
 $207,422
 $216,586
Other comprehensive income (loss): 
  
  
Foreign currency translation adjustments, before reclassification and tax(6,884) 9,671
 (6,697)
Less: reclassification adjustment for (losses) included in net income upon liquidation(36) —
 (2)
Foreign currency translation adjustments, before tax(6,848) 9,671
 (6,695)
Income tax benefit217
 3
 56
Foreign currency translation adjustments, net of tax(6,631) 9,674
 (6,639)
Unrealized gains on investments: 
  
  
Unrealized gains arising during period—
 2
 4
Less: reclassification adjustments for losses included in net income—
 —
 (2)
Changes in unrealized gains on investments—
 2
 6
Income tax benefit—
 2
 —
Unrealized gains on investments, net of tax—
 4
 6
Changes in employee benefit related items: 
  
  
Amortization of prior service cost8
 9
 40
Recognized actuarial gain (loss)541
 (1,115) (737)
Changes in employee benefit related items549
 (1,106) (697)
Income tax expense(49) (10) (12)
Employee benefit related items, net of tax500
 (1,116) (709)
Other133
 —
 —
Other comprehensive (loss) income(5,998) 8,562
 (7,342)
Comprehensive income$236,399
 $215,984
 $209,244

Years Ended December 31
202120202019
(in thousands)
Net income$385,843 $279,380 $238,563 
Other comprehensive (loss) income:   
Foreign currency translation adjustments, before reclassification and tax(2,894)8,579 1,900 
Less: reclassification adjustment for gains (losses) included in net income upon liquidation1,613 (77)— 
Foreign currency translation adjustments, before tax(4,507)8,656 1,900 
Income tax benefit (expense)147 (310)(161)
Foreign currency translation adjustments, net of tax(4,360)8,346 1,739 
Changes in employee benefit related items:   
Amortization of prior service cost7 8 6 
Recognized actuarial gain (loss)5,566 (1,557)(3,011)
Changes in employee benefit related items5,573 (1,549)(3,005)
Income tax (expense) benefit(20)(67)99 
Employee benefit related items, net of tax5,553 (1,616)(2,906)
Other comprehensive income (loss)1,193 6,730 (1,167)
Comprehensive income$387,036 $286,110 $237,396 
See Accompanying Notes to Financial Statements.

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Statements of Changes in Partners’ Capital

Years Ended December 31,Years Ended December 31
2018 2017 2016202120202019
(in thousands)(in thousands)
General Partner’s Capital     General Partner’s Capital
Balance, beginning of year$1,411
 $1,405
 $1,357
Balance, beginning of year$1,410 $1,402 $1,385 
Impact of adoption of revenue recognition standard ASC 60612
 —
 —
Net income250
 219
 223
Net income387 288 249 
Cash distributions to Unitholders(288) (213) (175)Cash distributions to Unitholders(358)(280)(232)
Balance, end of year1,385
 1,411
 1,405
Balance, end of year1,439 1,410 1,402 
Limited Partners’ Capital 
  
  
Limited Partners’ Capital   
Balance, beginning of year1,590,776
 1,592,240
 1,619,841
Balance, beginning of year1,656,816 1,619,200 1,555,892 
Impact of adoption of revenue recognition standard ASC 60612,536
 —
 —
Net income242,147
 207,203
 216,363
Net income385,456 279,092 238,314 
Cash distributions to Unitholders(280,434) (202,175) (169,556)Cash distributions to Unitholders(357,097)(270,601)(222,253)
Retirement of AB Holding Units(194,544) (162,206) (184,336)Retirement of AB Holding Units(143,460)(78,388)(110,752)
Issuance of AB Holding Units to fund long-term incentive compensation plan awards168,955
 135,604
 103,820
Issuance of AB Holding Units to fund long-term incentive compensation plan awards151,082 107,366 146,488 
Exercise of compensatory options to buy AB Holding Units16,589
 20,110
 6,108
Exercise of compensatory options to buy AB Holding Units3,402 147 11,511 
Other(133) —
 —
Balance, end of year1,555,892
 1,590,776
 1,592,240
Balance, end of year1,696,199 1,656,816 1,619,200 
AB Holding Units held by AB to fund long-term incentive compensation plans 
  
  
AB Holding Units held by AB to fund long-term incentive compensation plans   
Balance, beginning of year(15,174) (11,731) (10,669)Balance, beginning of year(20,171)(27,436)(27,759)
AB Holding Units held by AB to fund long-term incentive compensation plans(12,585) (3,443) (1,062)
Change in AB Holding Units held by AB to fund long-term incentive compensation plansChange in AB Holding Units held by AB to fund long-term incentive compensation plans(23,138)7,265 323 
Balance, end of year(27,759) (15,174) (11,731)Balance, end of year(43,309)(20,171)(27,436)
Accumulated Other Comprehensive Income (Loss) 
  
  
Accumulated Other Comprehensive (Loss) IncomeAccumulated Other Comprehensive (Loss) Income   
Balance, beginning of year(33,463) (42,025) (34,683)Balance, beginning of year(33,898)(40,628)(39,461)
Unrealized gain on investments, net of tax—
 4
 6
Foreign currency translation adjustment, net of tax(6,631) 9,674
 (6,639)Foreign currency translation adjustment, net of tax(4,360)8,346 1,739 
Changes in employee benefit related items, net of tax500
 (1,116) (709)Changes in employee benefit related items, net of tax5,553 (1,616)(2,906)
Other133
 —
 —
Balance, end of year(39,461) (33,463) (42,025)Balance, end of year(32,705)(33,898)(40,628)
Total Partners’ Capital$1,490,057
 $1,543,550
 $1,539,889
Total Partners’ Capital$1,621,624 $1,604,157 $1,552,538 
See Accompanying Notes to Financial Statements.

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Statements of Cash Flows

Years Ended December 31,Years Ended December 31
2018 2017 2016202120202019
(in thousands)(in thousands)
Cash flows from operating activities:     Cash flows from operating activities:
Net income$242,397
 $207,422
 $216,586
Net income$385,843 $279,380 $238,563 
Adjustments to reconcile net income to net cash provided by operating activities:     Adjustments to reconcile net income to net cash provided by operating activities:
Equity in net income attributable to AB Unitholders(270,647) (232,393) (239,389)Equity in net income attributable to AB Unitholders(416,326)(308,404)(266,292)
Cash distributions received from AB308,042
 226,846
 191,989
Cash distributions received from AB385,236 298,919 249,463 
Changes in assets and liabilities:     Changes in assets and liabilities:
(Decrease) increase in other liabilities(510) 535
 345
Decrease (increase) in other assetsDecrease (increase) in other assets92 (31)(61)
Increase in other liabilitiesIncrease in other liabilities264 150 1,082 
Net cash provided by operating activities279,282
 202,410
 169,531
Net cash provided by operating activities355,109 270,014 222,755 
     
Cash flows from investing activities:     Cash flows from investing activities:
Investments in AB with proceeds from exercises of compensatory options to buy AB Holding Units(16,589) (20,110) (6,108)Investments in AB with proceeds from exercises of compensatory options to buy AB Holding Units(3,402)(147)(11,511)
Net cash used in investing activities(16,589) (20,110) (6,108)Net cash used in investing activities(3,402)(147)(11,511)
     
Cash flows from financing activities:     Cash flows from financing activities:
Cash distributions to Unitholders(280,722) (202,388) (169,731)Cash distributions to Unitholders(357,455)(270,881)(222,485)
Capital contributions from (to) AB1,440
 (22) 200
Capital contributions from (to) AB2,346 867 (270)
Proceeds from exercise of compensatory options to buy AB Holding Units16,589
 20,110
 6,108
Proceeds from exercise of compensatory options to buy AB Holding Units3,402 147 11,511 
Net cash used in financing activities(262,693) (182,300) (163,423)Net cash used in financing activities(351,707)(269,867)(211,244)
     
Change in cash and cash equivalents—
 —
 —
Change in cash and cash equivalents— — — 
Cash and cash equivalents as of beginning of the year—
 —
 —
Cash and cash equivalents as of beginning of the year— — — 
Cash and cash equivalents as of end of the year$—
 $—
 $—
Cash and cash equivalents as of end of the year$— $— $— 
     
Cash paid:     Cash paid:
Income taxes$28,766
 $24,436
 $22,456
Income taxes30,127 28,906 26,650 
     
Non-cash investing activities:     Non-cash investing activities:
Issuance of AB Holding Units to fund long-term incentive compensation plan awards168,955
 135,604
 103,820
Issuance of AB Holding Units to fund long-term incentive compensation plan awards151,082 107,366 146,488 
Retirement of AB Holding Units(194,544) (162,206) (184,336)Retirement of AB Holding Units(143,460)(78,388)(110,752)
See Accompanying Notes to Financial Statements.

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Notes to Financial Statements

The words “we” and “our” refer collectively to AllianceBernstein Holding L.P. (“AB Holding”) and AllianceBernstein L.P. and its subsidiaries (“AB”), or to their officers and employees. Similarly, the word “company” refers to both AB Holding and AB. Where the context requires distinguishing between AB Holding and AB, we identify which of them is being discussed. Cross-references are in italics.

1. Business Description and Organization

AB Holding’s principal source of income and cash flow is attributable to its investment in AB limited partnership interests.

AB provides research, diversified investment management, research and related services globally to a broad range of clients. Its principal services include:

•Institutional Services—Services—servicing its institutional clients, including private and public pension plans, foundations and endowments, insurance companies, central banks and governments worldwide, and affiliates such as AXA S.A. ("AXA"), AXA Equitable Holdings, Inc. ("EQH") and their respectiveits subsidiaries, by means of separately-managed accounts, sub-advisory relationships, structured products, collective investment trusts, mutual funds, hedge funds and other investment vehicles.

•Retail Services—servicing its retail clients, primarily by means of retail mutual funds sponsored by AB or an affiliated company, sub-advisory relationships with mutual funds sponsored by third parties, separately-managed account programs sponsored by financial intermediaries worldwide and other investment vehicles.

•Private Wealth Management Services—Services—servicing its private clients, including high-net-worth individuals and families, trusts and estates, charitable foundations, partnerships, private and family corporations, and other entities, by means of separately-managed accounts, hedge funds, mutual funds and other investment vehicles.

•Bernstein Research Services—Services—servicing institutional investors, such as pension fund, hedge fund and mutual fund managers, seeking high-quality fundamental research, quantitative services and brokerage-related services in equities and listed options.

AB also provides distribution, shareholder servicing, transfer agency services and administrative services to the mutual funds it sponsors.

AB’s high-quality, in-depth research is the foundation of its business. AB’s research disciplines include economic, fundamental equity, fixed income and quantitative research. In addition, AB has experts focused onexpertise in multi-asset strategies, wealth management, environmental, social and corporate governance ("ESG"), and alternative investments.

AB provides a broad range of investment services with expertise in:

•Actively-managed equity strategies, with global and regional portfolios across capitalization ranges, concentration ranges and investment strategies, including value, growth and core equities;

•Actively-managed traditional and unconstrained fixed income strategies, including taxable and tax-exempt strategies;

Passive management, including index and enhanced index strategies;

•Alternative investments, including hedge funds, fund of funds, direct lending, real estate and private equity (e.g., direct lending); and
equity;

•Multi-asset solutions and services, including dynamic asset allocation, customized target-date funds and target-risk funds.funds; and

AB’s services span various investment disciplines,•Some passive management, including market capitalization (e.g., large-, mid-index and small-cap equities), term (e.g., long-, intermediate- and short-duration debt securities), and geographic location (e.g., U.S., international, global, emerging markets, regional and local), in major markets around the world.



enhanced index strategies.
Organization

During the second quarter of 2018, EQH, the holding company for a diversified financial services organization, conducted an initial public offering. AXA, a French holding company for AXA Group, a worldwide leader in life, property and casualty and health insurance and asset management, owns 59.2% of the outstanding common stock of EQH as of December 31, 2018. AXA has announced its intention to sell its entire remaining interest in EQH over time, subject to market conditions and other factors. AXA is under no obligation to do so and retains the sole discretion to determine the timing of any future sales of shares of EQH common stock.

As of December 31, 2018,2021, EQH owns approximately 4.2%4.0% of the issued and outstanding units representing assignments of beneficial ownership of limited partnership interests in AB Holding (“AB Holding Units”). AllianceBernstein Corporation (an indirect wholly-owned subsidiary of EQH, “General Partner”) is the general partner of both AB Holding and AB. AllianceBernstein Corporation owns 100,000 general partnership units in AB Holding and a 1% general partnership interest in AB.

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As of December 31, 2018,2021, the ownership structure of AB, expressed as a percentage of general and limited partnership interests, iswas as follows:
EQH and its subsidiaries63.663.0 %
AB Holding35.636.2 
Unaffiliated holders0.8
100.0%

Including both the general partnership and limited partnership interests in AB Holding and AB, EQH and its subsidiaries havehad an approximate 65.2%64.5% economic interest in AB as of December 31, 2018.2021.

2. Summary of Significant Accounting Policies

Basis of Presentation

The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of the financial statements requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

AB Holding’s financial statements and notes should be read in conjunction with the consolidated financial statements and notes of AB, which are included in this Form 10-K.

Investment in AB

AB Holding records its investment in AB using the equity method of accounting. AB Holding’s investment is increased to reflect its proportionate share of income of AB and decreased to reflect its proportionate share of losses of AB and cash distributions made by AB to its Unitholders. In addition, AB Holding's investment is adjusted to reflect its proportionate share of certain capital transactions of AB.

AB's ASC 606 Implementation

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers, which outlines a single comprehensive revenue recognition model for all contracts with customers and supersedes most of the existing revenue recognition requirements. This standard had no impact on AB Holding’s statement of income. AB adopted this new standard on January 1, 2018 on a modified retrospective basis for contracts that were not completed as of the date of adoption.

On January 1, 2018, AB recorded a cumulative effect adjustment, net of tax, of a $35.0 million increase to partners’ capital in its condensed consolidated statement of financial condition. Accordingly, AB Holding, as a result of its 35.5% ownership interest in AB as of January 1, 2018, recorded a cumulative effect adjustment, net of tax, of $12.5 million to partners’ capital in its condensed statement of financial condition.



Cash Distributions

AB Holding is required to distribute all of its Available Cash Flow, as defined in the Amended and Restated Agreement of Limited Partnership of AB Holding (“AB Holding Partnership Agreement”), to its Unitholders pro rata in accordance with their percentage interests in AB Holding. Available Cash Flow is defined as the cash distributions AB Holding receives from AB minus such amounts as the General Partner determines, in its sole discretion, should be retained by AB Holding for use in its business (such as the payment of taxes) or plus such amounts as the General Partner determines, in its sole discretion, should be released from previously retained cash flow.

On February 13, 2019,11, 2022, the General Partner declared a distribution of $0.64$1.29 per unit, representing a distribution of Available Cash Flow for the three months ended December 31, 2018.2021. Each general partnership unit in AB Holding is entitled to receive distributions equal to those received by each AB Holding Unit. The distribution is payable on March 7, 201917, 2022 to holders of record at the close of business on February 25, 2019.

22, 2022.
Total cash distributions per Unit paid to Unitholders during 2018, 20172021, 2020 and 20162019 were $2.88, $2.13$3.58, $2.79 and $1.75,$2.32, respectively.

Long-term Incentive Compensation Plans

AB maintains several unfunded, non-qualified long-term incentive compensation plans, under which the company grants awards of restricted AB Holding Units to its employees and members of the Board of Directors, who are not employed by AB or by any of AB’s affiliates (“Eligible Directors”).

AB funds its restricted AB Holding Unit awards either by purchasing AB Holding Units on the open market or purchasing newly-issued AB Holding Units from AB Holding, and then keeping all of these AB Holding Units in a consolidated rabbi trust until delivering them or retiring them. In accordance with the AB Holding Partnership Agreement, when AB purchases newly-issued AB Holding Units from AB Holding, AB Holding is required to use the proceeds it receives from AB to purchase the equivalent number of newly-issued AB Units, thus increasing its percentage ownership interest in AB. AB Holding Units held in the consolidated rabbi trust are corporate assets in the name of the trust and are available to the general creditors of AB.


During each
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Part II
Repurchases of AB Holding Units for $268.0 millionthe years ended December 31, 2021 and $220.2 million, respectively (on2020 consisted of the following:
Years Ended December 31
20212020
(in millions)
Total amount of AB Holding Units Purchased(1)
5.6 5.4 
Total Cash Paid for AB Holding Units Purchased(1)
$262.3 $149.0 
Open Market Purchases of AB Holding Units Purchased(2)
2.6 3.1 
Total Cash Paid for Open Market Purchases of AB Holding Units(2)
$117.9 $74.0 
(1)Purchased on a trade date basis). These amounts reflect open-market purchases of 6.5 million and 5.2 million AB Holding Units for $183.2 million and $117.1 million, respectively, with thebasis.
(2)The remainder relatingrelated to purchases of AB Holding Units from employees to allow them to fulfill statutory tax withholding requirements at the time of delivery of long-term incentive compensation awards.

Each quarter, AB considers whether to implement a plan to repurchase AB Holding Units pursuant to Rules 10b5-1 and 10b-18 under the Securities Exchange Act of 1934, as amended (“Exchange Act”). A plan of this type allows a company to repurchase its shares at times when it otherwise might be prevented from doing so because of self-imposed trading blackout periods or because it possesses material non-public information. Each broker selected by AB has the authority under the terms and limitations specified in the plan to repurchase AB Holding Units on AB’s behalf in accordance with the terms ofand limitations specified in the plan. Repurchases are subject to regulations promulgated by the U.S. Securities and Exchange Commission (“SEC”) as well as certain price, market volume and timing constraints specified in the plan. TheWe did not adopt a plan adopted during the fourth quarter of 2018 expired at the close of business on February 12, 2019.2021. AB may adopt additional plans in the future to engage in open-market purchases of AB Holding Units to help fund anticipated obligations under its incentive compensation award program and for other corporate purposes.

During 2018,2021, AB granted to employees and Eligible Directors 8.77.0 million restricted AB Holding Units (including 6.23.4 million granted in December for 20182021 year-end awards). During 2017,2020, AB granted to employees and Eligible Directors 8.65.7 million restricted AB Holding Units (including 6.45.0 million granted in December for 20172020 year-end awards).

AB used AB Holding Units repurchased during the periods and newly-issued AB Holding Units to fund these awards.
During 20182021 and 2017,2020, AB Holding issued 0.90.1 million and 1.2 million5,182 AB Holding Units, respectively, upon exercise of options to buy AB Holding Units. AB Holding used the proceeds of $16.6$3.4 million and $20.1$0.1 million, respectively, received from employeesaward recipients as payment in cash for the exercise price to purchase the equivalent number of newly-issued AB Units.
Subsequent Events

We have evaluated subsequent events through the date that these financial statements were filed with the Securities and Exchange Commission and did not identify any subsequent events that would have required disclosure in these financial statements.
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3. Net Income Per Unit

Basic net income per unit is derived by dividing net income by the basic weighted average number of units outstanding for each year. Diluted net income per unit is derived by adjusting net income for the assumed dilutive effect of compensatory options (“Net income - diluted”) and dividing by the diluted weighted average number of units outstanding for each year.

Years Ended December 31
202120202019
(in thousands, except per unit amounts)
Net income - basic$385,843 $279,380 $238,563 
Additional allocation of equity in net income attributable to AB resulting from assumed dilutive effect of compensatory options30 56 79 
Net income - diluted$385,873 $279,436 $238,642 
Weighted average units outstanding - basic99,545 96,870 95,884 
Dilutive effect of compensatory options11 27 44 
Weighted average units outstanding - diluted99,556 96,897 95,928 
Basic net income per unit$3.88 $2.88 $2.49 
Diluted net income per unit$3.88 $2.88 $2.49 
Years Ended December 31
202120202019
Anti-dilutive options excluded from diluted net income— 29,056 29,056 
 Years Ended December 31,
 2018 2017 2016
 (in thousands, except per unit amounts)
Net income - basic$242,397
 $207,422
 $216,586
Additional allocation of equity in net income attributable to AB resulting from assumed dilutive effect of compensatory options447
 680
 878
Net income - diluted$242,844
��$208,102
 $217,464
      
Weighted average units outstanding - basic97,041
 94,733
 96,834
Dilutive effect of compensatory options251
 430
 554
Weighted average units outstanding - diluted97,292
 95,163
 97,388
      
Basic net income per unit$2.50
 $2.19
 $2.24
Diluted net income per unit$2.50
 $2.19
 $2.23

We excluded 49,784 options in 2018, 1,970,741 options in 2017 and 2,873,106 options in 2016, from the diluted net income per unit computation due to their anti-dilutive effect.

4. Investment in AB

Changes in AB Holding’s investment in AB for the years ended December 31, 20182021 and 20172020 are as follows:
 20212020
 (in thousands)
Investment in AB as of January 1,$1,605,941 $1,554,203 
Equity in net income attributable to AB Unitholders416,326 308,404 
Changes in accumulated other comprehensive income1,193 6,730 
Cash distributions received from AB(385,236)(298,919)
Additional investments with proceeds from exercises of compensatory options to buy AB Holding Units3,402 147 
Capital contributions (from) AB(2,346)(867)
AB Holding Units retired(143,460)(78,388)
AB Holding Units issued to fund long-term incentive compensation plans151,082 107,366 
Change in AB Holding Units held by AB for long-term incentive compensation plans(23,138)7,265 
Investment in AB as of December 31,$1,623,764 $1,605,941 
 2018 2017
 (in thousands)
Investment in AB as of January 1,$1,544,704
 $1,540,508
Equity in net income attributable to AB Unitholders270,647
 232,393
Changes in accumulated other comprehensive (loss) income(5,998) 8,562
Cash distributions received from AB(308,042) (226,846)
Additional investments with proceeds from exercises of compensatory options to buy AB Holding Units, net16,589
 20,110
Capital contributions (from) to AB(1,440) 22
AB Holding Units retired(194,544) (162,206)
AB Holding Units issued to fund long-term incentive compensation plans168,955
 135,604
Change in AB Holding Units held by AB for long-term incentive compensation plans(12,585) (3,443)
Impact of AB's adoption of revenue recognition standard ASC 60612,548
 —
Other(133) —
Investment in AB as of December 31,$1,490,701
 $1,544,704
2021 Annual Report71

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5. Units Outstanding

Changes in AB Holding Units outstanding for the years ended December 31, 20182021 and 20172020 are as follows:
 20212020
Outstanding as of January 1,98,322,942 98,192,098 
Options exercised143,211 5,182 
Units issued3,917,437 3,363,132 
Units retired(3,111,863)(3,237,470)
Outstanding as of December 31,99,271,727 98,322,942 
 2018 2017
Outstanding as of January 1,96,461,989
 96,652,190
Options exercised889,119
 1,179,860
Units issued6,153,320
 5,546,695
Units retired(6,846,150) (6,916,756)
Outstanding as of December 31,96,658,278
 96,461,989

6. Income Taxes

AB Holding is a “grandfathered” publicly-traded partnership ("PTP") for federal tax purposes and, accordingly, is not subject to federal or state corporate income taxes. However, AB Holding is subject to the 4.0% New York City unincorporated business tax (“UBT”), net of credits for UBT paid by AB, and to a 3.5% federal tax on partnership gross income from the active conduct of a trade or business. AB Holding’s partnership gross income is derived from its interest in AB.

The principal reasons for the difference between AB Holding’s effective tax rates and the UBT statutory tax rate of 4.0% are as follows:
Years Ended December 31,Years Ended December 31
2018 2017 2016202120202019
(in thousands)(in thousands)
UBT statutory rate$10,826
 4.0 % $9,296
 4.0 % $9,576
 4.0 %UBT statutory rate$16,653 4.0 %$12,336 4.0 %$10,652 4.0 %
Federal tax on partnership gross business income27,674
 10.2
 24,520
 10.5
 22,342
 9.3
Federal tax on partnership gross business income29,643 7.1 28,522 9.2 27,197 10.2 
State income taxes576
 0.2
 451
 0.2
 461
 0.2
State income taxes840 0.2 502 0.2 532 0.2 
Credit for UBT paid by AB(10,826) (4.0) (9,296) (4.0) (9,576) (4.0)Credit for UBT paid by AB(16,653)(4.0)(12,336)(4.0)(10,652)(4.0)
Income tax expense and effective tax rate$28,250
 10.4
 $24,971
 10.7
 $22,803
 9.5
Income tax expense and effective tax rate$30,483 7.3 $29,024 9.4 $27,729 10.4 
AB Holding’s federal income tax is computed by multiplying certain AB qualifying revenues (primarily U.S. investment advisory fees, research payments and brokerage commissions) by AB Holding’s ownership interest in AB, multiplied by the 3.5% tax rate. AB Holding Units in AB’s consolidated rabbi trust are not considered outstanding for purposes of calculating AB Holding’s ownership interest in AB.
Years Ended December 31% Change
2021202020192021-202020-19
(in thousands)
Net income attributable to AB Unitholders$1,148,623 $865,952 $752,042 32.6 %15.1 %
Multiplied by: weighted average equity ownership interest36.2 %35.6 %35.4 %
Equity in net income attributable to AB Unitholders$416,326 $308,404 $266,292 35.0 15.8 
AB qualifying revenues$2,779,281 $2,740,137 $2,640,169 1.4 2.4 
Multiplied by: weighted average equity ownership interest for calculating tax30.5 %30.1 %29.4 %
Multiplied by: federal tax3.5 %3.5 %3.5 %
Federal income taxes29,643 28,522 27,197 
State income taxes840 502 532 
Total income taxes$30,483 $29,024 $27,729 5.0 4.7 
 Years Ended December 31, % Change
 2018 2017 2016 2018-17 2017-16
 (in thousands)    
Net income attributable to AB Unitholders$757,588
 $662,403
 $673,358
 14.4% (1.6)%
Multiplied by: weighted average equity ownership interest35.7% 35.1% 35.6%    
Equity in net income attributable to AB Unitholders$270,647
 $232,393
 $239,389
 16.5
 (2.9)
          
AB qualifying revenues$2,647,254
 $2,407,212
 $2,143,858
 10.0
 12.3
Multiplied by: weighted average equity ownership interest for calculating tax29.9% 29.1% 29.8%    
Multiplied by: federal tax3.5% 3.5% 3.5%    
Federal income taxes27,674
 24,520
 22,342
    
State income taxes576
 451
 461
    
Total income taxes$28,250
 $24,971
 $22,803
 13.1
 9.5

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In order to preserve AB Holding’s status as a “grandfathered” PTP for federal income tax purposes, management ensures that AB Holding does not directly or indirectly (through AB) enter into a substantial new line of business. If AB Holding were to lose its status as a “grandfathered” PTP, it would be subject to corporate income tax, which would reduce materially AB Holding’s net income and its quarterly distributions to AB Holding Unitholders.

We recognize the effects of a tax position in the financial statements only if, as of the reporting date, it is “more likely than not” to be sustained based on its technical merits and their applicability to the facts and circumstances of the tax position. In making this assessment, we assume that the taxing authority will examine the tax position and have full knowledge of all relevant information. Accordingly, we have no liability for unrecognized tax benefits as of December 31, 20182021 and 2017.2020. A liability for unrecognized tax benefits, if required, would be recorded in income tax expense and affect the company’s effective tax rate.

As of December 31, 2018,2021, AB Holding is no longer subject to U.S. federal, state, local or foreign examinations by tax authorities for years before 2015.2017.

7. Commitments and Contingencies

Legal and regulatory matters described below pertain to AB and are included here due to their potential significance to AB Holding’s investment in AB.

With respect to all significant litigation matters, we consider the likelihood of a negative outcome. If we determine the likelihood of a negative outcome is probable and the amount of the loss can be reasonably estimated, we record an estimated loss for the expected outcome of the litigation. If the likelihood of a negative outcome is reasonably possible and we are able to determine an estimate of the possible loss or range of loss in excess of amounts already accrued, if any, we disclose that fact together with the estimate of the possible loss or range of loss. However, it is often difficult to predict the outcome or estimate a possible loss or range of loss because litigation is subject to inherent uncertainties, particularly when plaintiffs allege substantial or indeterminate damages. Such is also the case when the litigation is in its early stages or when the litigation is highly complex or broad in scope. In these cases, we disclose that we are unable to predict the outcome or estimate a possible loss or range of loss.

AB may be involved in various matters, including regulatory inquiries, administrative proceedings and litigation, some of which may allege significant damages. It is reasonably possible that AB could incur losses pertaining to these matters, but management cannot currently estimate any such losses.

Management, after consultation with legal counsel, currently believes that the outcome of any individual matter that is pending or threatened, or all of them combined, will not have a material adverse effect on our results of operations, financial condition or liquidity. However, any inquiry, proceeding or litigation has the element of uncertainty; management cannot determine whether further developments relating to any individual matter that is pending or threatened, or all of them combined, will have a material adverse effect on our results of operations, financial condition or liquidity in any future reporting period.


8. Quarterly Financial Data (Unaudited)
 Quarters Ended 2018
 December 31 September 30 June 30 March 31
 (in thousands, except per unit amounts)
Equity in net income attributable to AB Unitholders$66,759
 $72,802
 $65,388
 $65,698
Net income$59,880
 $65,900
 $58,457
 $58,160
Basic net income per unit(1)
$0.63
 $0.68
 $0.59
 $0.60
Diluted net income per unit(1)
$0.63
 $0.68
 $0.59
 $0.60
Cash distributions per unit(2)(3)
$0.64
 $0.69
 $0.62
 $0.73
        
 Quarters Ended 2017
 December 31 September 30 June 30 March 31
 (in thousands, except per unit amounts)
Equity in net income attributable to AB Unitholders$85,725
 $49,055
 $47,947
 $49,666
Net income$78,593
 $43,178
 $41,741
 $43,910
Basic net income per unit(1)
$0.84
 $0.46
 $0.43
 $0.46
Diluted net income per unit(1)
$0.84
 $0.46
 $0.43
 $0.46
Cash distributions per unit(2)(3)
$0.84
 $0.51
 $0.49
 $0.46
________________________
(1)2021 Annual ReportBasic and diluted net income per unit are computed independently for each of the periods presented. Accordingly, the sum of the quarterly net income per unit amounts may not agree to the total for the year.73
(2)Declared and paid during the following quarter.
(3)Cash distributions reflect the impact of AB’s non-GAAP adjustments.

Table of Contents
Part II
Report of Independent Registered Public Accounting Firm
To the General Partner and Unitholders of
AllianceBernstein L.P.:
Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated statements of financial condition of AllianceBernstein L.P. and its subsidiaries (the “Company”) as of December 31, 20182021 and 2017,2020, and the related consolidated statements of income, of comprehensive income, of changes in partners’ capital and of cash flows for each of the three years in the period ended December 31, 2018,2021, including the related notes and financial statement schedule listed in the index appearing under Item 15(a) (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of December 31, 2018,2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).


In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 20182021 and 2017,2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 20182021 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2018,2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management'sManagement’s Report on Internal Control overOver Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.


We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.


Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.



Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

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Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Performance-Based Fees
As described in Notes 2 and 3 to the consolidated financial statements, performance-based fees earned were $245.1 million for the year ended December 31, 2021. The transaction price for the asset management performance obligation for certain hedge fund and alternative investment advisory contracts, provide for a performance-based fee, in addition to the base advisory fee, which is calculated as either a percentage of absolute investment results or a percentage of investment results in excess of a stated benchmark over a specified period of time. The performance-based fees are forms of variable consideration and are therefore excluded from the transaction price until it becomes probable that there will not be significant reversal of the cumulative revenue recognized. Constraining factors impacting the amount of variable consideration included in the transaction price include the contractual claw-back provisions to which the variable consideration is subject, the length of time to which the uncertainty of the consideration is subject, the number and range of possible consideration amounts, the probability of significant fluctuations in the fund’s market value and the level at which the fund’s value exceeds the contractual threshold required to earn such a fee. With respect to the constraining factors related to the fund’s market value, management measures assets under management (AUM) using established market-based valuation methods and fair valuation (non-observable market) methods. Fair valuation methods, including discounted cash flow models and other methods, are used only where AUM cannot be valued using market-based valuation methods, such as in the case of private equity or illiquid securities.
The principal considerations for our determination that performing procedures relating to performance-based fees is a critical audit matter are the significant audit effort in performing procedures and evaluating evidence related to these fees, including evaluating evidence related to the constraining factors impacting the amount of variable consideration, and the audit effort also included the involvement of professionals with specialized skill and knowledge to assist in evaluating management's estimate of the funds' market value where fair valuation methods are used.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the Company’s revenue recognition process for performance-based fees, including controls over the assessment of constraining factors and the valuation of AUM. These procedures also included, among others, testing management’s process for determining performance-based fees, including evaluating the appropriateness of the methods used, testing the contractual claw-back provisions to which the variable consideration is subject and, on a sample basis, evaluating the reasonableness of management’s assumptions related to the length of time to which the uncertainty of the consideration is subject, the number and range of possible consideration amounts and the probability of significant fluctuations in the funds’ market value and, as applicable, the level at which a fund’s value exceeded the contractual threshold required to earn such fees. In evaluating management’s estimates of the funds’ market value, procedures included the involvement of professionals with specialized skill and knowledge to assist in developing an independent range of prices for a sample of securities used in determining the underlying funds’ market value where fair valuation methods are used, and comparison of management’s estimate of the securities’ fair value to the independently developed ranges. Developing the independent estimate of securities’ fair value involved testing the completeness and accuracy of data provided by management and independently developing the significant assumptions for the sampled securities.

/s/ PricewaterhouseCoopersPricewaterhouseCooper LLP
Nashville, Tennessee
February 11, 2022
New York, New York
February 13, 2019

We have served as the Company’s auditor since2006.


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AllianceBernstein L.P. and Subsidiaries
Consolidated Statements of Financial Condition
Years Ended December 31
20212020
(in thousands,
except unit amounts)
ASSETS
Cash and cash equivalents$1,285,700 $1,037,400 
Cash and securities segregated, at fair value (cost $1,503,554 and $1,752,483)1,503,957 1,753,478 
Receivables, net:  
Brokers and dealers65,897 92,638 
Brokerage clients2,059,842 1,713,377 
AB funds fees340,158 325,407 
Other fees185,653 148,746 
Investments:  
Long-term incentive compensation-related63,839 60,114 
Other209,579 193,261 
Assets of consolidated company-sponsored investment funds:
Cash and cash equivalents90,326 36,506 
Investments613,025 302,582 
Other assets30,461 12,244 
Furniture, equipment and leasehold improvements, net169,175 147,874 
Goodwill3,091,763 3,082,778 
Intangible assets, net41,531 44,496 
Deferred sales commissions, net74,899 64,066 
Right-of-use assets421,980 418,455 
Other assets262,303 264,418 
Total assets$10,510,088 $9,697,840 
 December 31,
 2018 2017
 (in thousands,
except unit amounts)
ASSETS   
Cash and cash equivalents$640,206
 $671,930
Cash and securities segregated, at fair value (cost $1,169,461 and $816,350)1,169,554
 816,350
Receivables, net: 
  
Brokers and dealers197,048
 199,690
Brokerage clients1,718,629
 1,647,059
AB funds fees217,470
 212,115
Other fees127,462
 130,119
Investments: 
  
Long-term incentive compensation-related52,429
 66,034
Other661,915
 377,555
Assets of consolidated company-sponsored investment funds:   
   Cash and cash equivalents13,118
 326,518
   Investments351,696
 1,246,283
   Other assets22,840
 35,397
Furniture, equipment and leasehold improvements, net155,519
 157,569
Goodwill3,066,700
 3,066,700
Intangible assets, net79,424
 105,784
Deferred sales commissions, net17,148
 30,126
Other assets297,940
 193,505
Total assets$8,789,098
 $9,282,734
    
LIABILITIES AND CAPITAL 
  
Liabilities: 
  
Payables: 
  
Brokers and dealers$290,960
 $237,861
Securities sold not yet purchased8,623
 29,961
Brokerage clients3,095,458
 2,229,371
AB mutual funds74,599
 82,967
Accounts payable and accrued expenses412,313
 503,227
Liabilities of consolidated company-sponsored investment funds22,610
 698,101
Accrued compensation and benefits273,250
 270,610
Debt546,267
 565,745
Total liabilities4,724,080
 4,617,843
Commitments and contingencies (See Note 14)   
Redeemable non-controlling interest148,809
 601,587
Capital: 
  
General Partner40,240
 41,221
Limited partners: 268,850,276 and 268,659,333 units issued and outstanding4,075,306
 4,168,841
Receivables from affiliates(11,430) (11,494)
AB Holding Units held for long-term incentive compensation plans(77,990) (42,688)
Accumulated other comprehensive loss(110,866) (94,140)

 December 31,
 2018 2017
Partners’ capital attributable to AB Unitholders3,915,260
 4,061,740
Non-redeemable non-controlling interests in consolidated entities949
 1,564
Total capital3,916,209
 4,063,304
Total liabilities and capital$8,789,098
 $9,282,734

76AllianceBernstein
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Years Ended December 31
20212020
(in thousands,
except unit amounts)
LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST AND CAPITAL
Liabilities:  
Payables:  
Brokers and dealers$265,957 $216,403 
Securities sold not yet purchased3,828 17,791 
Brokerage clients3,603,558 3,440,266 
AB mutual funds94,962 65,550 
Accounts payable and accrued expenses257,307 197,657 
Lease liabilities490,735 505,549 
Liabilities of consolidated company-sponsored investment funds87,000 30,620 
Accrued compensation and benefits369,649 335,122 
Debt755,000 675,000 
Total liabilities5,927,996 5,483,958 
Commitments and contingencies (See Note 14)
Redeemable non-controlling interest421,169 102,359 
Capital:  
General Partner42,850 41,776 
Limited partners: 271,453,043 and 270,509,658 units issued and outstanding4,336,211 4,229,485 
Receivables from affiliates(8,333)(8,316)
AB Holding Units held for long-term incentive compensation plans(119,470)(57,219)
Accumulated other comprehensive loss(90,335)(94,203)
Partners’ capital attributable to AB Unitholders4,160,923 4,111,523 
Total liabilities, redeemable non-controlling interest and capital$10,510,088 $9,697,840 
See Accompanying Notes to Consolidated Financial Statements.


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AllianceBernstein L.P. and Subsidiaries
Consolidated Statements of Income
Years Ended December 31,Years Ended December 31
2018 2017 2016202120202019
(in thousands, except per unit amounts)(in thousands, except per unit amounts)
Revenues:     Revenues:
Investment advisory and services fees$2,362,211
 $2,201,305
 $1,933,471
Investment advisory and services fees$3,194,524 $2,595,436 $2,472,044 
Bernstein research services439,432
 449,919
 479,875
Bernstein research services452,017 459,744 407,911 
Distribution revenues418,562
 412,063
 384,405
Distribution revenues652,240 529,781 455,043 
Dividend and interest income98,226
 71,162
 46,939
Dividend and interest income38,734 50,923 104,421 
Investment gains (losses)2,653
 92,102
 93,353
Investment (losses) gainsInvestment (losses) gains(636)(16,401)38,659 
Other revenues98,676
 97,135
 99,859
Other revenues108,409 104,703 97,559 
Total revenues3,419,760
 3,323,686
 3,037,902
Total revenues4,445,288 3,724,186 3,575,637 
Less: Interest expense52,399
 25,165
 9,123
Less: Interest expense3,686 15,650 57,205 
Net revenues3,367,361
 3,298,521
 3,028,779
Net revenues4,441,602 3,708,536 3,518,432 
     
Expenses: 
  
  
Expenses:   
Employee compensation and benefits1,378,811
 1,313,469
 1,229,721
Employee compensation and benefits1,716,013 1,494,198 1,442,783 
Promotion and servicing: 
  
  
Promotion and servicing:   
Distribution-related payments427,186
 411,467
 363,603
Distribution-related payments708,117 569,283 487,965 
Amortization of deferred sales commissions21,343
 31,886
 41,066
Amortization of deferred sales commissions34,364 27,355 15,029 
Trade execution, marketing, T&E and other222,630
 213,275
 216,542
Trade execution, marketing, T&E and other197,486 189,787 219,860 
General and administrative: 
  
  
General and administrative:   
General and administrative448,996
 481,488
 426,147
General and administrative555,608 485,544 484,750 
Real estate charges7,160
 36,669
 17,704
Real estate charges— 5,526 3,324 
Contingent payment arrangements(2,219) 267
 (20,245)Contingent payment arrangements2,710 1,855 (510)
Interest on borrowings10,359
 8,194
 4,765
Interest on borrowings5,145 6,180 13,035 
Amortization of intangible assets27,781
 27,896
 26,311
Amortization of intangible assets5,697 21,372 28,759 
Total expenses2,542,047
 2,524,611
 2,305,614
Total expenses3,225,140 2,801,100 2,694,995 
     
Operating income825,314
 773,910
 723,165
Operating income1,216,462 907,436 823,437 
     
Income tax45,816
 53,110
 28,319
Income tax62,728 45,653 41,754 
     
Net income779,498
 720,800
 694,846
Net income1,153,734 861,783 781,683 
     
Net income of consolidated entities attributable to non-controlling interests21,910
 58,397
 21,488
     
Net income (loss) of consolidated entities attributable to non-controlling interestsNet income (loss) of consolidated entities attributable to non-controlling interests5,111 (4,169)29,641 
Net income attributable to AB Unitholders$757,588
 $662,403
 $673,358
Net income attributable to AB Unitholders$1,148,623 $865,952 $752,042 
     
Net income per AB Unit: 
  
  
Net income per AB Unit:   
Basic$2.79
 $2.46
 $2.48
Basic$4.18 $3.19 $2.78 
Diluted$2.78
 $2.45
 $2.47
Diluted$4.18 $3.19 $2.78 
See Accompanying Notes to Consolidated Financial Statements.

AllianceBernstein L.P. and Subsidiaries
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Consolidated Statements of Comprehensive Income
 Years Ended December 31,
 2018 2017 2016
 (in thousands)
Net income$779,498
 $720,800
 $694,846
Other comprehensive (loss) income:     
Foreign currency translation adjustments, before reclassification and tax:(19,337) 28,123
 (19,849)
Less: reclassification adjustment for losses included in net income upon liquidation(100) —
 (6)
Foreign currency translation adjustments, before tax(19,237) 28,123
 (19,843)
Income tax expense620
 —
 —
Foreign currency translation adjustments, net of tax(18,617) 28,123
 (19,843)
Unrealized gains on investments:     
Unrealized gains arising during period—
 6
 10
Less: reclassification adjustment for losses included in net income—
 —
 (6)
Changes in unrealized gains on investments—
 6
 16
Income tax benefit (expense)—
 3
 (7)
Unrealized gains on investments, net of tax—
 9
 9
Changes in employee benefit related items: 
  
  
Amortization of prior service cost24
 24
 93
Recognized actuarial gain (loss)1,586
 (3,190) (3,043)
Changes in employee benefit related items1,610
 (3,166) (2,950)
Income tax expense(139) (27) (22)
Employee benefit related items, net of tax1,471
 (3,193) (2,972)
Other374
 —
 —
Other comprehensive (loss) gain(16,772) 24,939
 (22,806)
Less: Comprehensive income in consolidated entities attributable to non-controlling interests21,864
 59,379
 21,426
Comprehensive income attributable to AB Unitholders$740,862
 $686,360
 $650,614
Years Ended December 31
202120202019
(in thousands)
Net income$1,153,734 $861,783 $781,683 
Other comprehensive income:
Foreign currency translation adjustments, before reclassification and tax:(7,839)23,882 5,986 
Less: reclassification adjustment for gains (losses) included in net income upon liquidation4,458 (216)— 
Foreign currency translation adjustments, before tax(12,297)24,098 5,986 
Income tax benefit (expense)457 (854)(383)
Foreign currency translation adjustments, net of tax(11,840)23,244 5,603 
Changes in employee benefit related items:   
Amortization of prior service cost24 24 24 
Recognized actuarial gain (loss)15,743 (4,280)(7,891)
Changes in employee benefit related items15,767 (4,256)(7,867)
Income tax (expense) benefit(59)(187)274 
Employee benefit related items, net of tax15,708 (4,443)(7,593)
Other comprehensive gain (loss)3,868 18,801 (1,990)
Less: Comprehensive income (loss) in consolidated entities attributable to non-controlling interests5,111 (4,169)29,788 
Comprehensive income attributable to AB Unitholders$1,152,491 $884,753 $749,905 
See Accompanying Notes to Consolidated Financial Statements.

AllianceBernstein L.P. and Subsidiaries
Consolidated Statements of Partner's Capital
 Years Ended December 31,
 2018 2017 2016
 (in thousands)
General Partner’s Capital     
Balance, beginning of year$41,221
 $41,100
 $40,498
Impact of adoption of revenue recognition standard ASC 606349
 —
 —
Net income7,576
 6,624
 6,733
Cash distributions to General Partner(8,608) (6,449) (5,384)
Long-term incentive compensation plans activity(39) 211
 58
(Retirement) issuance of AB Units, net(256) (266) (805)
Other(3) 1
 —
Balance, end of year40,240
 41,221
 41,100
Limited Partners' Capital     
Balance, beginning of year4,168,841
 4,154,810
 4,091,433
Impact of adoption of revenue recognition standard ASC 60634,601
 —
 —
Net income750,012
 655,779
 666,625
Cash distributions to Unitholders(849,585) (637,690) (532,180)
Long-term incentive compensation plans activity(3,880) 20,859
 5,802
(Retirement) issuance of AB Units, net(25,486) (27,339) (80,084)
Other803
 2,422
 3,214
Balance, end of year4,075,306
 4,168,841
 4,154,810
Receivables from Affiliates     
Balance, beginning of year(11,494) (12,830) (14,498)
Capital contributions from General Partner19
 344
 1,200
Compensation plan accrual352
 156
 313
Capital contributions from AB Holding(307) 836
 155
Balance, end of year(11,430) (11,494) (12,830)
AB Holding Units held for Long-term Incentive Compensation Plans     
Balance, beginning of year(42,688) (32,967) (29,332)
Purchases of AB Holding Units to fund long-term compensation plans, net(267,427) (219,627) (235,893)
Retirement (issuance) of AB Units, net25,589
 26,603
 80,515
Long-term incentive compensation awards expense187,514
 185,234
 152,012
Re-valuation of AB Holding Units held in rabbi trust19,022
 (1,931) (269)
Balance, end of year(77,990) (42,688) (32,967)
Accumulated Other Comprehensive Income (Loss)     
Balance, beginning of year(94,140) (118,096) (95,353)
Unrealized gain (loss) on investments, net of tax—
 9
 9
Foreign currency translation adjustment, net of tax(18,571) 27,140
 (19,780)
Changes in employee benefit related items, net of tax1,471
 (3,193) (2,972)
Other374
 —
 —
Balance, end of year(110,866) (94,140) (118,096)
Total Partners' Capital attributable to AB Unitholders3,915,260
 4,061,740
 4,032,017

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 Years Ended December 31,
 2018 2017 2016
Non-redeemable Non-controlling Interests in Consolidated Entities 
  
  
Balance, beginning of year1,564
 36,172
 24,473
Net income69
 9,632
 11,398
Foreign currency translation adjustment(46) 983
 (63)
Purchase of non-controlling interest—
 (2,006) —
Distributions (to) from non-controlling interests of our consolidated venture capital fund activities(638) (43,217) 364
Balance, end of year949
 1,564
 36,172
Total Capital$3,916,209
 $4,063,304
 $4,068,189
      
      
See Accompanying Notes to Consolidated Financial Statements.
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Part II
AllianceBernstein L.P. and Subsidiaries
Consolidated Statements of Cash FlowsChanges in Partners’ Capital
 Years Ended December 31,
 2018 2017 2016
 (in thousands)
Cash flows from operating activities:     
Net income$779,498
 $720,800
 $694,846
Adjustments to reconcile net income to net cash provided by operating activities:     
Amortization of deferred sales commissions21,343
 31,886
 41,066
Non-cash long-term incentive compensation expense187,514
 185,234
 152,162
Depreciation and other amortization70,000
 66,999
 59,026
Unrealized losses (gains) on investments23,164
 3,554
 (28,204)
Unrealized (gains) on investments of consolidated company-sponsored investment funds(14,217) (36,340) (29,121)
Losses on real estate asset write-offs38
 8,161
 5,456
Other, net(6,484) 5,028
 3,629
Changes in assets and liabilities:     
Consolidation of cash and cash equivalents of consolidated company-sponsored investment funds—
 —
 358,534
(Increase) decrease in securities, segregated(353,204) 129,747
 (380,823)
(Increase) decrease in receivables(207,000) 67,539
 (296,233)
(Increase) decrease in investments(294,383) 293
 187,752
Decrease (increase) in investments of consolidated company-sponsored investment funds908,804
 (639,067) (342,938)
(Increase) decrease in deferred sales commissions(8,365) 1,878
 (5,886)
(Increase) decrease in other assets(152,726) (2,255) 13,517
(Decrease) increase in other assets and liabilities of consolidated company-sponsored investment funds(662,934) 417,674
 229,524
Increase (decrease) in payables1,024,317
 (338,523) 886,520
(Decrease) increase in accounts payable and accrued expenses(11,225) 10,657
 2,459
Increase (decrease) in accrued compensation and benefits4,341
 12,187
 (3,238)
Net cash provided by operating activities1,308,481
 645,452
 1,548,048
      

 Years Ended December 31,
 2018 2017 2016
Cash flows from investing activities:     
Purchases of investments—
 (12) —
Proceeds from sales of investments—
 11
 372
Purchases of furniture, equipment and leasehold improvements(32,789) (39,417) (36,728)
Proceeds from sales of furniture, equipment and leasehold improvements—
 75
 15
Purchase of intangible asset—
 —
 (2,500)
Purchase of businesses, net of cash acquired—
 —
 (20,541)
Net cash used in investing activities(32,789) (39,343) (59,382)
      
Cash flows from financing activities:     
Issuance (repayment) of commercial paper, net24,546
 (28,553) (72,003)
(Repayment) proceeds from bank loans(50,000) 75,000
 —
Increase (decrease) in overdrafts payable3,273
 63,393
 (84,512)
Distributions to General Partner and Unitholders(858,193) (644,139) (537,564)
Capital contributions (to) from non-controlling interests in consolidated entities(638) (43,217) 364
(Redemptions) purchases of non-controlling interests of consolidated company-sponsored investment funds, net(472,143) 163,164
 (132,837)
Capital contributions (to) from affiliates(1,421) 366
 1,000
Payments of contingent payment arrangements/purchase of shares(1,093) (7,592) (5,545)
Additional investments by AB Holding with proceeds from exercise of compensatory options to buy AB Holding Units16,589
 20,110
 6,108
Purchases of AB Holding Units to fund long-term incentive compensation plan awards, net(267,427) (219,627) (235,893)
Purchases of AB Units(153) (1,003) (374)
Other(1,998) (1,833) (22)
Net cash used in financing activities(1,608,658) (623,931) (1,061,278)
Effect of exchange rate changes on cash and cash equivalents(12,158) 21,760
 (10,178)
Net (decrease) increase in cash and cash equivalents(345,124) 3,938
 417,210
Cash and cash equivalents as of beginning of the period998,448
 994,510
 577,300
Cash and cash equivalents as of end of the period$653,324
 $998,448
 $994,510
      
Cash paid:     
Interest paid$60,286
 $30,975
 $11,148
Income taxes paid41,946
 67,421
 27,387
      
Non-cash investing activities:     
Fair value of assets acquired—
 —
 33,583
Fair value of liabilities assumed—
 —
 1,149
Non-cash financing activities:     
Payables recorded under contingent payment arrangements—
 —
 11,893
Years Ended December 31
202120202019
(in thousands)
General Partner’s Capital
Balance, beginning of year$41,776 $41,225 $40,240 
Net income11,486 8,660 7,521 
Cash distributions to General Partner(10,605)(8,376)(7,042)
Long-term incentive compensation plans activity117 (23)149 
Issuance of AB Units, net76 290 357 
Balance, end of year42,850 41,776 41,225 
Limited Partners' Capital
Balance, beginning of year4,229,485 4,174,201 4,075,306 
Net income1,137,137 857,292 744,521 
Cash distributions to Unitholders(1,049,287)(828,503)(696,470)
Long-term incentive compensation plans activity11,586 (2,147)14,741 
Issuance of AB Units, net7,290 28,642 35,259 
Other— — 844 
Balance, end of year4,336,211 4,229,485 4,174,201 
Receivables from Affiliates
Balance, beginning of year(8,316)(9,011)(11,430)
Long-term incentive compensation awards expense941 802 1,125 
Capital contributions from AB Holding(958)(107)1,294 
Balance, end of year(8,333)(8,316)(9,011)
AB Holding Units held for Long-term Incentive Compensation Plans
Balance, beginning of year(57,219)(76,310)(77,990)
Purchases of AB Holding Units to fund long-term compensation plans, net(261,825)(148,624)(171,930)
(Issuance) of AB Units, net(7,348)(28,696)(35,736)
Long-term incentive compensation awards expense215,484 194,840 207,057 
Re-valuation of AB Holding Units held in rabbi trust(9,690)1,556 (4,403)
Other1,128 15 6,692 
Balance, end of year(119,470)(57,219)(76,310)
Accumulated Other Comprehensive Income (Loss)
Balance, beginning of year(94,203)(113,004)(110,866)
Foreign currency translation adjustment, net of tax(11,840)23,244 5,455 
Changes in employee benefit related items, net of tax15,708 (4,443)(7,593)
Balance, end of year(90,335)(94,203)(113,004)
Total Partners' Capital attributable to AB Unitholders4,160,923 4,111,523 4,017,101 
Non-redeemable Non-controlling Interests in Consolidated Entities   
Balance, beginning of year— — 949 
Net income— — 91 
Foreign currency translation adjustment— — 147 
Purchase of non-controlling interest— — (1,187)
Balance, end of year— — — 
Total Capital$4,160,923 $4,111,523 $4,017,101 
See Accompanying Notes to Consolidated Financial Statements.

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Consolidated Statements of Cash Flows
Years Ended December 31
202120202019
(in thousands)
Cash flows from operating activities:
Net income$1,153,734 $861,783 $781,683 
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of deferred sales commissions34,364 27,355 15,029 
Non-cash long-term incentive compensation expense216,425 195,642 208,182 
Depreciation and other amortization44,985 61,028 77,021 
Unrealized losses (gains) on investments4,454 10,405 (13,431)
Unrealized losses (gains) on investments of consolidated company-sponsored investment funds1,882 (854)(36,150)
Non-cash lease expense98,773 98,798 103,773 
Other, net22,580 (2,914)10,281 
Changes in assets and liabilities:
Decrease (increase) in securities, segregated249,521 (658,612)74,688 
(Increase) decrease in receivables(360,789)(182,684)223,137 
(Increase) decrease in investments(27,000)7,597 460,347 
(Increase) decrease in investments of consolidated company-sponsored investment funds(312,325)279,276 (193,158)
(Increase) in deferred sales commissions(45,197)(55,125)(34,177)
(Increase) decrease in other assets(6,578)69,160 (23,140)
Decrease in other assets and liabilities of consolidated company-sponsored investment funds, net38,161 7,169 11,437 
Increase (decrease) in payables214,139 861,502 (641,369)
Increase (decrease) in accounts payable and accrued expenses35,877 10,666 (56,518)
Increase (decrease) in accrued compensation and benefits50,545 46,885 (7,486)
Cash payments to relieve operating lease liabilities(114,769)(115,656)(132,669)
Net cash provided by operating activities1,298,782 1,521,421 827,480 
Cash flows from investing activities:
Purchases of equity method investments— (4,079)— 
Purchases of furniture, equipment and leasehold improvements(61,931)(41,504)(28,303)
Acquisition of businesses, net of cash acquired(3,793)(13,552)5,255 
Net cash used in investing activities(65,724)(59,135)(23,048)
Cash flows from financing activities:
Proceeds from debt, net80,000 115,000 2,105 
Increase (decrease) in overdrafts payable16,192 (12,633)(59,924)
Distributions to General Partner and Unitholders(1,059,892)(836,879)(703,512)
Subscriptions (redemptions) of non-controlling interests of consolidated company-sponsored investment funds, net313,699 (219,033)150,091 
Capital contributions (to) from affiliates(2,346)(867)269 
Additional investments by AB Holding with proceeds from exercise of compensatory options to buy AB Holding Units3,402 147 11,511 
Purchases of AB Holding Units to fund long-term incentive compensation plan awards, net(261,825)(148,624)(171,930)
Other, net(2,186)306 (3,571)
Net cash used in financing activities(912,956)(1,102,583)(774,961)
Effect of exchange rate changes on cash and cash equivalents(17,982)23,032 8,376 
Net increase in cash and cash equivalents302,120 382,735 37,847 
Cash and cash equivalents as of beginning of the period1,073,906 691,171 653,324 
Cash and cash equivalents as of end of the period$1,376,026 $1,073,906 $691,171 
Cash paid:
Interest paid$5,263 $18,858 $66,002 
Income taxes paid55,656 59,791 52,444 
Non-cash investing activities:
Fair value of assets acquired (excluding cash acquired of $2.8 million, $0.6 million and $11.8 million, for 2021, 2020 and 2019, respectively)13,235 18,389 28,966 
Fair value of liabilities assumed1,642 437 16,837 
Non-cash financing activities:
Payables recorded under contingent payment arrangements7,800 4,400 17,384 
See Accompanying Notes to Consolidated Financial Statements.
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Notes to Consolidated Financial Statements
The words “we” and “our” refer collectively to AllianceBernstein L.P. and its subsidiaries (“AB”), or to their officers and employees. Similarly, the word “company” refers to AB. Cross-references are in italics.
1. Business Description and Organization
We provide research, diversified investment management, research and related services globally to a broad range of clients. Our principal services include:
•Institutional Services—Services—servicing our institutional clients, including private and public pension plans, foundations and endowments, insurance companies, central banks and governments worldwide, and affiliates such as AXA S.A. ("AXA"), AXA Equitable Holdings, Inc. ("EQH") and their respectiveits subsidiaries, by means of separately-managed accounts, sub-advisory relationships, structured products, collective investment trusts, mutual funds, hedge funds and other investment vehicles.
•Retail Services—Services—servicing our retail clients, primarily by means of retail mutual funds sponsored by AB or an affiliated company, sub-advisory relationships with mutual funds sponsored by third parties, separately-managed account programs sponsored by financial intermediaries worldwide and other investment vehicles.
•Private Wealth Management Services—Services—servicing our private clients, including high-net-worth individuals and families, trusts and estates, charitable foundations, partnerships, private and family corporations, and other entities, by means of separately-managed accounts, hedge funds, mutual funds and other investment vehicles.
•Bernstein Research Services—Services—servicing institutional investors, such as pension fund, hedge fund and mutual fund managers, seeking high-quality fundamental research, quantitative services and brokerage-related services in equities and listed options.
We also provide distribution, shareholder servicing, transfer agency services and administrative services to the mutual funds we sponsor.
Our high-quality, in-depth research is the foundation of our business. Our research disciplines include economic, fundamental equity, fixed income and quantitative research. In addition, we have experts focused onexpertise in multi-asset strategies, wealth management, environmental, social and corporate governance ("ESG"), and alternative investments.
We provide a broad range of investment services with expertise in:
•Actively-managed equity strategies, with global and regional portfolios across capitalization ranges, concentration ranges and investment strategies, including value, growth and core equities;
equities;
•Actively-managed traditional and unconstrained fixed income strategies, including taxable and tax-exempt strategies;
Passive management, including index and enhanced index strategies;
•Alternative investments, including hedge funds, fund of funds, direct lending, real estate and private equity (e.g., direct lending); and
equity;
•Multi-asset solutions and services, including dynamic asset allocation, customized target-date funds and target-risk funds.funds; and
Our services span various investment disciplines,•Some passive management, including market capitalization (e.g., large-, mid-index and small-cap equities), term (e.g., long-, intermediate- and short-duration debt securities), and geographic location (e.g., U.S., international, global, emerging markets, regional and local), in major markets around the world.enhanced index strategies.
During the second quarter of 2018, EQH, the holding company for a diversified financial services organization, conducted an initial public offering. AXA, a French holding company for AXA Group, a worldwide leader in life, property and casualty and health insurance and asset management, owns 59.2% of the outstanding common stock of EQH as of December 31, 2018. AXA has announced its intention to sell its entire remaining interest in EQH over time, subject to market conditions and other factors. AXA is under no obligation to do so and retains the sole discretion to determine the timing of any future sales of shares of EQH common stock.Organization
As of December 31, 2018,2021, EQH ownsowned approximately 4.2%4.0% of the issued and outstanding units representing assignments of beneficial ownership of limited partnership interests in AllianceBernstein Holding L.P. (“AB Holding Units”). AllianceBernstein Corporation (an indirect wholly-owned subsidiary of EQH, “General Partner”) is the general partner of both AllianceBernstein

Holding L.P. (“AB Holding”) and AB. AllianceBernstein Corporation owns 100,000 general partnership units in AB Holding and a 1% general partnership interest in AB.

82AllianceBernstein
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As of December 31, 2018,2021, the ownership structure of AB, including limited partnership units outstanding as well as the general partner's 1% interest, iswas as follows:
EQH and its subsidiaries63.663.0 %
AB Holding35.636.2 
Unaffiliated holders0.8
100.0%
Including both the general partnership and limited partnership interests in AB Holding and AB, EQH and its subsidiaries had an approximate 65.2%64.5% economic interest in AB as of December 31, 2018.2021.
2. Summary of Significant Accounting Policies
Basis of Presentation
The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“("US GAAP”GAAP"). The preparation of the consolidated financial statements requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.
Principles of Consolidation
The consolidated financial statements include AB and its majority-owned and/or controlled subsidiaries, and the consolidated entities that are considered to be variable interest entities ("VIEs") and voting interest entities ("VOEs") in which AB has a controlling financial interest. Non-controlling interests on the consolidated statements of financial condition include the portion of consolidated company-sponsored investment funds in which we do not have direct equity ownership. All significant inter-company transactions and balances among the consolidated entities have been eliminated.
Reclassifications
During 2018, to conform to the current period's presentation, prior period amounts for:
revenues related to our middle market lending business previously presented as other revenues are now presented as investment advisory and services fees in the consolidated statements of income;
payments to financial intermediaries for administrative services, sub-accounting services and maintenance of books and records for certain funds previously presented as distribution-related payments are now presented as trade execution, marketing, T&E and other expenses in the consolidated statements of income;
research and miscellaneous fees related to our brokers dealers previously presented as other assets are now presented as other fees receivables in the consolidated statements of financial condition; and
income tax payable and receivable as well as deferred tax assets and liabilities are now shown net by jurisdiction in the consolidated statements of financial condition.
Recently Adopted Accounting Pronouncements

In May 2014,August 2018, the Financial Accounting Standards Board (“(the "FASB”") issued Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers, which outlines a single comprehensive revenue recognition model for all contracts with customers and supersedes most of the existing revenue recognition requirements. We adopted this new standard on January 1, 2018 on a modified retrospective basis for contracts that were not completed as of the date of adoption.

The new standard did not change the timing of revenue recognition for our base fees, distribution revenues, shareholder servicing fees and broker-dealer revenues. However, performance-based fees, which, prior to the adoption of ASC 606, were recognized at the end of the applicable measurement period when no risk of reversal remained, and carried-interest distributions received (considered performance-based fees), recorded as deferred revenues until no risk of reversal remained, may in certain instances

be recognized earlier under the new standard, if it is probable that significant reversal of performance-based fees recognized will not occur.

On January 1, 2018, we recorded a cumulative effect adjustment, net of tax, of a $35.0 million increase to partners’ capital in the consolidated statement of financial condition. This amount represents carried interest distributions of $77.9 million previously received, net of revenue sharing payments to investment team members of $42.7 million, with respect to which it is probable that significant reversal will not occur.

In January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General (Topic 715-20). The amendment addresses certain aspects of recognition, measurement, presentation andmodifies the disclosure of financial instruments.requirements for employers that sponsor defined benefit pension or other post-retirement plans. We adopted this standard prospectively on January 1, 2018.2021. The adoption of this standard did not have a material impact on our financial condition or results of operations.

In August 2016,December 2019, the FASB issued ASU 2016-15, Statement of Cash Flows2019-12, Income Taxes (Topic 230)740): Simplifying the Accounting for Income Taxes. The amendment is intendedamendments simplify the accounting for income taxes by removing certain exceptions to reduce diversitythe general principles in practice in how certain transactions are classified inTopic 740. The amendments also improve consistent application of and simplify US GAAP for other areas of Topic 740 by clarifying and amending the statement of cash flows.existing guidance. We adopted this standard prospectively on January 1, 2018.2021. The adoption of this standard did not have a material impact on our financial condition or results of operations.

In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. The new standard requires that the statement of cash flows explains the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Companies are also required to reconcile such total amounts in the statement of financial condition and disclose the nature of the restrictions. We adopted this standard on January 1, 2018. The adoption of this standard did not have a material impact on our financial condition or results of operations.

In March 2017, the FASB issued ASU 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. The amendment requires that an employer disaggregate the service cost component from the other components of net benefit costs on the income statement. We adopted this standard on January 1, 2018. The adoption of this standard did not have a material impact on our financial condition or results of operations.

In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation, Scope of Modification Accounting. The amendment provides clarity and reduces both diversity in practice and cost and complexity when applying the guidance in Topic 718, Compensation - Stock Compensation, to a change to the terms or conditions of a share-based payment award. We adopted this standard on January 1, 2018. The adoption of this standard did not have a material impact on our financial condition or results of operations.

Accounting Pronouncements Not Yet Adopted in 20182021

None.
In February 2016, the FASB issued ASU 2016-02, Leases. This pronouncement, along with subsequent ASUs issued to clarify certain provisions of ASU 2016-02, requires lessees to record most leases on their balance sheet while also disclosing key information about those lease arrangements. The classification criteria to distinguish between finance and operating leases are generally consistent with the classification criteria to distinguish between capital and operating leases under existing lease accounting guidance. This pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2018. We adopted the new standard for our fiscal year beginning January 1, 2019, using the simplified transition method. The adoption of this standard is not expected to have a material impact on our results of operations. Our future financial statements will include additional disclosures as required by ASU 2016-02.
As of January 1, 2019, we expect to record an increase in assets ranging between $430 million to $440 million and an increase in liabilities ranging between $560 million to $570 million, respectively, on our statement of financial condition as a result of recognizing right-of-use assets and lease liabilities for our lease portfolio (primarily real estate leases). The right-of-use assets recognized as of January 1, 2019 are net of deferred rent and liabilities associated with previously recognized impairments as of December 31, 2018. These estimated ranges were based on our lease portfolio as of January 1, 2019, and it did not include the potential impacts of re-measurement due to changes in our assessment of the lease term subsequent to our adoption of the standard.
In June 2016, the FASB issued ASU 2016-03, Financial Instruments - Credit Losses (Topic 326). This new guidance relates to the accounting for credit losses on financial instruments. The new guidance introduces an approach based on expected losses to estimate credit losses on certain types of financial instruments. It also modifies the impairment model for available-for-sale debt securities and provides for a simplified accounting model for purchased financial assets with credit deterioration since their origination. The new guidance is effective for financial statements issued for fiscal years ending after December 15, 2019, with early adoption permitted. Management currently is evaluating the impact that adoption of this standard will have on our consolidated financial statements.

In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment. The guidance removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. As a result of the revised guidance, a goodwill impairment will be the amount by which a reporting unit's carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The revised guidance will be applied prospectively, and is effective in 2020. The revised guidance is not expected to have a material impact on our financial condition or results of operations.
In February 2018, the FASB issued ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which permits a company to reclassify the disproportionate income tax effects of the 2017 Tax Cuts and Job Act ("2017 Tax Act") on items within Accumulated Other Comprehensive Income ("AOCI") to retained earnings. The FASB refers to these amounts as "stranded tax effects." The ASU also requires certain new disclosures, some of which are applicable for all companies. The guidance is effective for all companies for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Companies may adopt the new guidance using one of two transition methods: (1) retrospective to each period (or periods) in which the income tax effect of the 2017 Tax Act related to items remaining in AOCI are recognized, or (2) at the beginning of the period of adoption. We adopted this standard on January 1, 2019. The adoption of this standard is not expected to have a material impact on our financial condition or results of operations.
In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement. The amendment modifies the disclosure requirements for fair value measurements by removing, modifying, or adding certain disclosures. The revised guidance is effective for all companies for fiscal years beginning after December 15, 2019, and interim periods within those years. Companies are permitted to early adopt any eliminated or modified disclosure requirements and delay adoption of the additional disclosure requirements until their effective date. The removed and modified disclosures will be adopted on a retrospective basis and the new disclosures will be adopted on a prospective basis. The revised guidance is not expected to have a material impact on our financial condition or results of operations.
In August 2018, the FASB issued ASU 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General (Topic 715-20). The amendment modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. The revised guidance is effective for financial statements issued for fiscal years ending after December 15, 2020, with early adoption permitted. The revised guidance is not expected to have a material impact on our financial condition or results of operations.
Revenue Recognition

Investment advisory and services fees
Investment advisory and services fees
AB provides asset management services by managing customer assets and seeking to deliver investment returns to investors. Each investment management contract between AB and a customer creates a distinct, separately identifiable performance obligation for each day the customer’s assets are managed as the customer can benefit from each day of service. In accordance with ASC 606, a series of distinct goods and services that are substantially the same and have the same pattern of transfer to the customer are treated as a single performance obligation. Accordingly, we have determined that our investment and advisory services are performed over time and entitle us to variable consideration earned based uponon the value of the investors’ assets under management (“AUM”).

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We calculate AUM using established market-based valuation methods and fair valuation (non-observable market) methods. Market-based valuation methods include: last sale/settle prices from an exchange for actively-traded listed equities, options and futures; evaluated bid prices from recognized pricing vendors for fixed income, asset-backed or mortgage-backed issues; mid prices from recognized pricing vendors and brokers for credit default swaps; and quoted bids or spreads from pricing vendors and brokers for other derivative products. Fair valuation methods include: discounted cash flow models evaluation of assets versus liabilities or any other methodology that is validated and approved by our Valuation Committee (see paragraph immediately below for additional information about our Valuation Committee). Fair valuation methods are used only where AUM cannot be valued using market-based valuation methods, such as in the case of private equity or illiquid securities.

The Valuation Committee, which consists of senior officers and employees, is responsible for overseeing the pricing and valuation of all investments held in client and AB portfolios. The Valuation Committee has adopted a Statement of Pricing Policies describing principles and policies that apply to pricing and valuing investments held in these portfolios. We also have a Pricing Group, which reports to the Valuation Committee and is responsible for overseeing the pricing process for all investments.

We record as revenue investment advisory and services base fees, which we generally calculate as a percentage of AUM. At month-end, all the components of the transaction price (i.e., the base fee calculation) are no longer variable and the value of the consideration is determined. These fees are not subject to claw back and there is minimal probability that a significant reversal of the revenue recorded will occur. 


The transaction price for the asset management performance obligation for certain investment advisory contracts, including those associated with hedge funds or other alternative investments, provide for a performance-based fee (including carried interest), in addition to a base advisory fee, which is calculated as either a percentage of absolute investment results or a percentage of investment results in excess of a stated benchmark over a specified period of time. The performance-based fees are forms of variable consideration and are therefore excluded from the transaction price until it becomes probable that there will not be significant reversal of the cumulative revenue recognized. At each reporting date, we evaluate the constraining factors, discussed below, surrounding the variable consideration to determine the extent to which, if any, revenues associated with the performance-based fee can be recognized.

Constraining factors impacting the amount of variable consideration included in the transaction price include: the contractual claw-back provisions to which the variable consideration is subject, the length of time to which the uncertainty of the consideration is subject, the number and range of possible consideration amounts, the probability of significant fluctuations in the fund’s market value, the level at which the fund’s value exceeds the contractual threshold required to earn such a fee, and the materiality of the amount being evaluated.

Prior to the adoption of ASC 606 on January 1, 2018, we recognized performance-based fees at the end of the applicable measurement period when no risk of reversal remained, and carried-interest distributions received as deferred revenues until no risk of reversal remained.

Bernstein Research Services
Bernstein Research Services revenue consists principally of commissions received, and to a lesser but increasing extent, direct payments for trade execution services and providing equity research services provided to institutional clients. Brokerage commissions for trade execution services and related expenses are recorded on a trade-date basis when the performance obligations are satisfied. Generally, the transaction price is agreed upon at the pointtime of each trade and is based upon the number of shares traded or the value of the consideration traded. Research revenues are recognized when the transaction price is quantified, collectability is assured and significant reversal of such revenue is not probable.

Distribution Revenues
Distribution Revenues
Two of our subsidiaries act as distributors and/or placement agents of company-sponsored mutual funds and receive distribution services fees from certain of those funds as full or partial reimbursement of the distribution expenses they incur. Depending uponThe variable consideration can be determined in different ways, as discussed below, as we satisfy the performance obligation depending on the contractual arrangements with the customer and the specific product sold, the variable consideration can be determined in different ways, as discussed below, as we satisfy the performance obligation.sold.

Most open-end U.S. funds have adopted a plan under Rule 12b-1 of the Investment Company Act that allows the fund to pay, out of assets of the fund, distribution and service fees for the distribution and sale of its shares (“Rule 12b-1 Feesfees”). The open-end U.S. funds have such agreements with us, and we have selling and distribution agreements pursuant to which we pay sales commissions to the financial intermediaries that distribute our open-end U.S. funds. These agreements are terminable by either party upon notice (generally 30 days) and do not obligate the financial intermediary to sell any specific amount of fund shares.

We record 12b-1 fees monthly based upon a percentage of the net asset value (“NAV”) of the funds. At month-end, the variable consideration of the transaction price is no longer constrained as the NAV can be calculated and the value of consideration is determined. These services are separate and distinct from other asset management services as the customer can benefit from these services independently of other services. We accrue the corresponding 12b-1 fees paid to sub-distributors monthly as the expenses are incurred. We are acting in a principal capacity in these transactions; as such, these revenues and expenses are recorded on a gross basis.

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We offer back-end load shares in limited instances and charge the investor a contingent deferred sales charge (“CDSC”) if the investment is redeemed within a certain period. The variable consideration for these contracts is contingent uponon the timing of the redemption by the investor and the value of the sale proceeds. Due to these constraining factors, we exclude the CDSC fee from the transaction price until the investor redeems the investment. Upon redemption, the cash consideration received for these contractual arrangements are recorded as reductions of unamortized deferred sales commissions.

Our Luxembourg subsidiary, the management company for most of our non-U.S. funds, earns a management fee whichthat is accrued daily and paid monthly, at an annual rate, based on the average daily net assets of the fund. With respect to certain share classes, the management fee may also contain a component that is paid to distributors and other financial intermediaries and service providers to cover shareholder servicing and other administrative expenses (also referred to as an All-in-Fee). As we have concluded that asset management is distinct from distribution, we allocate a portion of the investment and advisory fee to distribution revenues for the servicing component based on standalone selling prices.


Other Revenues
Revenues from contracts with customers include a portion of other revenues, which consists primarily of shareholder servicing fees, as well as mutual fund reimbursements and other brokerage income.

We provide shareholder services, which include transfer agency, administrative and recordkeeping services provided to company-sponsored mutual funds. The consideration for these services is based on a percentage of the NAV of the fund or a fixed-fee based on the number of shareholder accounts being serviced. The revenues are recorded at month-end when the constraining factors involved with determining NAV or the number of shareholders’ accounts are resolved.

Non-Contractual Revenues
Dividend and interest income is accrued as earned. Investment gains and losses on the condensed consolidated statements of income include unrealized gains and losses of trading and private equity investments stated at fair value, equity in earnings of our limited partnership hedge fund investments, and realized gains and losses on investments sold.
Contract Assets and Liabilities

Contract Assets and Liabilities
We use the practical expedient for contracts that have an original duration of one year or less. Accordingly, we do not consider the time value of money and, instead, accrue the incremental costs of obtaining the contract when incurred. As of December 31, 2018,2021, the balances of contract assets and contract liabilities are not considered material and, accordingly, no further disclosures are necessary.
Consolidation of company-sponsored investment funds
For legal entities (company-sponsored investment funds) evaluated for consolidation, we first determine whether the fees we receive and the interests we hold qualify as a variable interest in the entity, including an evaluation of fees paid to us as a decision maker or service provider to the entity being evaluated. Fees received by us are not variable interests if (i) the fees are compensation for services provided and are commensurate with the level of effort required to provide those services, (ii) the service arrangement includes only terms, conditions or amounts that are customarily present in arrangements for similar services negotiated at arm’s length, and (iii) our other economic interests in the entity held directly and indirectly through our related parties, as well as economic interests held by related parties under common control, would not absorb more than an insignificant amount of the entity’s losses or receive more than an insignificant amount of the entity’s benefits.
For those entities in which we have a variable interest, we perform an analysis to determine whether the entity is a VIE by considering whether the entity’s equity investment at risk is insufficient, whether the investors lack decision making rights proportional to their ownership percentage of the entity, and whether the investors lack the obligation to absorb an entity’s expected losses or the right to receive an entity’s expected income.
A VIE must be consolidated by its primary beneficiary, which generally is defined as the party that has a controlling financial interest in the VIE. We are deemed to have a controlling financial interest in a VIE if we have (i) the power to direct the activities of the VIE that most significantly affect the VIE's economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive income from the VIE that could potentially be significant to the VIE. For purposes of evaluating (ii) above, fees paid to us as a decision maker or service provider are excluded if the amount of fees is commensurate with the level of effort required to be performed and the arrangement includes only customary terms, conditions or amounts present in arrangements for similar services negotiated at arm’s length. The primary beneficiary evaluation generally is performed qualitatively based on all facts and circumstances, as well as quantitatively, as appropriate.
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If we have a variable interest in an entity that is determined not to be a VIE, the entity is then evaluated for consolidation under the VOE model. For limited partnerships and similar entities, we are deemed to have a controlling financial interest in a VOE, and would be required to consolidate the entity, if we own a majority of the entity’s kick-out rights through voting limited partnership interests and limited partners do not hold substantive participating rights (or other rights that would indicate that we do not control the entity). For entities other than limited partnerships, we are deemed to have a controlling financial interest in a VOE if we own a majority voting interest in the entity.
The analysis performed regarding the determination of variable interests held, whether entities are VIEs or VOEs, and whether we have a controlling financial interest in such entities, requires the exercise of judgment. The analysis is updated continuously as circumstances change or new entities are formed.
Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, demand deposits, money market accounts, overnight commercial paper and highly liquid investments with original maturities of three months or less. Due to the short-term nature of these instruments, the

recorded value has been determined to approximate fair value (and considered Level 1 securities in the fair value hierarchy). During 2017, the majority of our consolidated VIEs' cash and cash equivalents is pledged as collateral for short positions in equities.
Fees Receivable, Net
Fees receivable are shown net of allowances. An allowance for doubtful accounts related to investment advisory and services fees is determined through an analysis of the aging of receivables, assessments of collectability based on historical trends and other qualitative and quantitative factors, including our relationship with the client, the financial health (or ability to pay) of the client, current economic conditions and whether the account is active or closed. The allowance for doubtful accounts is not material to fees receivable.
Brokerage Transactions
Customers’ securities transactions are recorded on a settlement date basis, with related commission income and expenses reported on a trade date basis. Receivables from and payables to clients include amounts due on cash and margin transactions. Securities owned by customers are held as collateral for receivables; such collateral is not reflected in the consolidated financial statements. We have the ability by contract or custom to sell or re-pledge this collateral, and have done so at various times. As of December 31, 2018, there were no2021 and 2020, we had $23.4 million and zero of re-pledged securities.securities, respectively. Principal securities transactions and related expenses are recorded on a trade date basis.
Securities borrowed and securities loaned by our broker-dealer subsidiaries are recorded at the amount of cash collateral advanced or received in connection with the transaction and are included in receivables from and payables to brokers and dealers in the consolidated statements of financial condition. Securities borrowed transactions require us to deposit cash collateral with the lender. With respect to securities loaned, we receive cash collateral from the borrower. See Note 98 for securities borrowed and loaned amounts recorded in our consolidated statements of financial condition as of December 31, 20182021 and 2017.2020. The initial collateral advanced or received approximates or is greater than the fair value of securities borrowed or loaned. We monitor the fair value of the securities borrowed and loaned on a daily basis and request additional collateral or return excess collateral, as appropriate. As of December 31, 20182021 and 2017,2020, there is no allowance provision required for the collateral advanced. Income or expense is recognized over the life of the transaction.
As of December 31, 20182021 and 2017,2020, we had $196.9$114.9 million and $42.9$130.0 million, respectively, of cash on deposit with clearing organizations for trade facilitation purposes, which are reported in other assets in our consolidated statements of financial condition. In addition, asAs of December 31, 20182021 and 2017,2020, we held no U.S. Treasury Bills with values totaling $392.4 million and $52.6 million, respectively, in our investment account that arebills pledged as collateral with clearing organizations which are reported in other investments in our consolidated statements of financial condition.collateral. These clearing organizations have the ability by contract or custom to sell or re-pledge this collateral.the collateral, if any.
Current Expected Credit Losses- Receivables from Brokerage clients
Receivables from clients primarily consists of margin loan balances. The value of the securities owned by clients and held as collateral for these receivables is not reflected in the consolidated financial statements and the collateral was not repledged or sold as of December 31, 2021 and 2020. We consider these financing receivables to be of good credit quality due to the fact that these receivables are primarily collateralized by the related client investments.
To estimate expected credit losses on margin loans, we applied the collateral maintenance practical expedient by comparing the amortized cost basis of the margin loans with the fair value of the collateral at the reporting date. Margin loans are limited to a percentage of the total value of the securities held in the client's account against those loans. AB requires, in the event of a decline in the market value of the securities in a margin account, the client to deposit additional securities or cash so that, at all times, the value of the securities in the account, at a minimum, cover the loan to the client. As such, AB reasonably expects that the borrower will be able to continually replenish collateral securing the financial asset and does not expect the fair value of collateral to fall below the amortized cost basis of the margin loans and, as a result, we consider the credit risk associated with these receivables to be minimal. In circumstances when a loan becomes undercollateralized and the client fails to deposit additional securities or cash, AB reserves the right to liquidate the account.
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Current Expected Credit Losses - Receivables from Revenue Contracts with Customers
The majority of our revenue receivables are from investment advisory and service fees, and distribution revenues, that are typically paid out of the client accounts or third-party products consisting of cash and securities. Due to the size of the fees in relation to the value of the cash and securities in account or funds, the account value always exceeds the amortized cost basis of the receivables, resulting in a remote risk of loss. These receivables have a short duration, generally due within 30-90 days and there is minimal historical evidence of non-payment or market declines that would cause the fair value of the underlying securities to decline below the amortized cost of the receivables. AB maintains an allowance for credit losses based upon an estimate of the amount of potential credit losses in existing accounts receivable, as determined from a review of aging schedules, past due balances, historical collection experience and other specific account data. Once determined uncollectible, aged balances are written off as credit loss expense. This determination is based on careful analysis of individual receivables and aging schedules, and generally occurs when the receivable becomes over 360 days past due. Our aged receivables and amounts written off related to credit losses in any year are not material.
Furniture, Equipment and Leasehold Improvements, Net
Furniture, equipment and leasehold improvements are stated at cost, less accumulated depreciation and amortization. Depreciation is recognized on a straight-line basis over the estimated useful lives of eight years for furniture and three to six years for equipment and software. Leasehold improvements are amortized on a straight-line basis over the lesser of their estimated useful lives or the terms of the related leases.
Goodwill
In 2000, AB acquired SCB Inc., an investment research and management company formerly known as Sanford C. Bernstein Inc. (“Bernstein”). The Bernstein acquisition was accounted for under the purchase method, and the cost of the acquisition was allocated on the basis of the estimated fair value of the assets acquired and the liabilities assumed. The excess of the purchase price over the fair value of identifiable assets acquired, net of liabilities assumed, resulted in the recognition of goodwill of approximately $3.0 billion.
As of December 31, 2018,2021, goodwill of $3.1 billion on the consolidated statement of financial condition included $2.8 billion as a result of the Bernstein acquisition and $266$291 million in regard to various smaller acquisitions. We have determined that AB has only one reporting segment and reporting unit.
We test our goodwillGoodwill is tested annually, as of September 30, for impairment.impairment utilizing the market approach where the fair value of the reporting unit is based on its unadjusted market valuation (AB Units outstanding multiplied by AB Holding's Unit price) and adjusted market valuations assuming a control premium (when applicable). The price of a publicly-traded AB Holding Unit serves as a reasonable starting point for valuing an AB Unit because each represents the same fractional interest in our underlying business. Throughout the year, the carrying value of goodwill is also reviewed for impairment if certain events or changes in circumstances occur and trigger whether an interim impairment test may be required. Such changes in circumstances may include, but are not limited to, a sustained decrease in the price of an AB Holding Unit or declines in AB’s market capitalization that would suggest that the fair value of the reporting unit is less than the carrying amount; significant and unanticipated declines in AB’s assets under management or revenues; and/or lower than expected earnings per unit. Any of these changes in circumstances could suggest the possibility that goodwill is impaired, but none of these events or circumstances by itself would indicate that it is more likely than not that goodwill is impaired. Instead, they are merely recognized as triggering events for the consideration of impairment and must be viewed in combination with any mitigating or positive factors. A holistic evaluation of all events since the most recent quantitative impairment test must be done to determine whether it is more likely than not that the reporting unit is impaired. As of September 30, 2018,2021, the impairment test indicated that goodwill was not impaired. We also review the carrying value of goodwill if facts and circumstances occur that suggest possible impairment, such as significant declines in AUM, revenues, earnings or the price of an AB Holding Unit. There were no facts or circumstances occurring in the fourth quarter of 20182021 suggesting possible impairment.


Under ASU 2017-04, Simplifying the Test for Goodwill Impairment, a goodwill impairment will be the amount by which a reporting unit's carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. Under this guidance, the goodwill impairment test no longer includes a determination by management of whether a decline in fair value is temporary; however, it is important that management's determination of fair value reflect the impact of changing market conditions, including the severity and anticipated duration of any such changes.
Intangible Assets, Net
Intangible assets consist primarily of costs assigned to acquired investment management contracts of Bernstein based on their estimated fair value at the time of acquisition, less accumulated amortization. Intangible assets are recognized at fair value and generally are amortized on a straight-line basis over their estimated useful life ranging from six yearsseven to 20 years.
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As of December 31, 2018,2021, intangible assets, net of accumulated amortization, of $79.4$41.5 million on the consolidated statement of financial condition consists of $65.9$26.3 million of finite-lived intangible assets subject to amortization of which $36.2 million relates to the Bernstein acquisition, and $13.5$15.2 million of indefinite-lived intangible assets not subject to amortization in regard to other acquisitions.amortization. As of December 31, 2017,2020, intangible assets, net of accumulated amortization, of $105.8$44.5 million on the consolidated statement of financial condition consisted of $92.3$29.2 million of finite-lived intangible assets subject to amortization of which $56.9 million related to the Bernstein acquisition, and $13.5$15.3 million of indefinite-lived intangible assets not subject to amortization in regard to other acquisitions. The gross carrying amount of finite-lived intangible assets totaled $475.1$53.8 million as of December 31, 20182021 and $473.7$65.1 million as of December 31, 2017,2020, and accumulated amortization was $409.2$27.5 million as of December 31, 20182021 and $381.4$35.9 million as of December 31, 2017.2020. Amortization expense was $27.8$5.7 million for 2018, $27.92021, $21.4 million for 20172020 and $26.3$28.8 million for 2016.2019. Estimated annual amortization expense for 20192022 is approximately $28$5 million, $21$5 million in years two and three, $4 million in year two, $5 million for year three,four and then approximately $4$2 million in years four andyear five.
We periodically review indefinite-lived intangible assets for impairment as events or changes in circumstances indicate that the carrying value may not be recoverable. If the carrying value exceeds fair value, we perform additional impairment tests to measure the amount of the impairment loss, if any. During the fourth quarter of 2021 and 2020, we recorded an impairment of $1.0 million and $1.5 million, respectively, relating to our 2016 acquisition of Ramius Alternative Solutions LLC. Due to the loss of acquired investment management contracts during 2021, the carrying value of the finite-lived intangible assets exceeded the fair value of the contracts. We determined the fair value of the contracts using a discounted cash flow model. The impairment charge was recorded in general and administrative expenses in the consolidated statements of income.
Deferred Sales Commissions, Net
We pay commissions to financial intermediaries in connection with the sale of shares of open-end company-sponsored mutual funds sold without a front-end sales charge (“back-end load shares”). These commissions are capitalized as deferred sales commissions and amortized over periods not exceeding five and one-half yearsone year for U.S. fund shares and four years for Non-U.S. Fund shares, the periods of time during which deferred sales commissions generally are recovered. We recover these commissions from distribution services fees received from those funds and from contingent deferred sales commissions (“CDSC”) received from shareholders of those funds upon the redemption of their shares. CDSC cash recoveries are recorded as reductions of unamortized deferred sales commissions when received. Since January 31, 2009, our U.S. mutual funds have not offered back-end load shares to new investors. As of December 31, 2016, our Non-U.S. Funds are no longer offering back-end load shares, except in isolated instances.
We periodically review the deferred sales commission asset for impairment as events or changes in circumstances indicate that the carrying value may not be recoverable. If these factors indicate impairment in value, we compare the carrying value to the undiscounted cash flows expected to be generated by the asset over its remaining life. If we determine the deferred sales commission asset is not fully recoverable, the asset will be deemed impaired and a loss will be recorded in the amount by which the recorded amount of the asset exceeds its estimated fair value. There were no impairment charges recorded during 20182021 or 2017.2020.
Leases
We determine if an arrangement is a lease at inception. Both operating and finance leases are included in the right-of-use (“ROU”) assets and lease liabilities in our consolidated statement of financial condition.
ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. We use our consolidated incremental borrowing rate based on the information available as of the lease commencement date in determining the present value of lease payments. Our lease terms may include options to extend or terminate the lease. These options to extend or terminate are assessed on a lease-by-lease basis, and the ROU assets and lease liabilities are adjusted when it is reasonably certain that an option will be exercised.
When calculating the measurement of ROU assets and lease liabilities, we utilize the fixed payments associated with the lease and do not include other variable contractual obligations, such as operating expenses, real estate taxes, cleaning and utilities. These costs are accounted for as period costs and expensed as incurred.
Additionally, we exclude any intangible assets such as software licensing agreements as stated in ASC 842-10-15-1. These arrangements will continue to follow the guidance of ASC 350, Intangibles - Goodwill and Other.
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Loss Contingencies
With respect to all significant litigation matters, we consider the likelihood of a negative outcome. If we determine the likelihood of a negative outcome is probable and the amount of the loss can be reasonably estimated, we record an estimated loss for the expected outcome of the litigation. If the likelihood of a negative outcome is reasonably possible and we are able to determine an estimate of the possible loss or range of loss in excess of amounts already accrued, if any, we disclose that fact together with the estimate of the possible loss or range of loss. However, it is often difficult to predict the outcome or estimate a possible loss or range of loss because litigation is subject to inherent uncertainties, particularly when plaintiffs allege substantial or indeterminate damages. Such is also the case when the litigation is in its early stages or when the litigation is highly complex or broad in scope. In these cases, we disclose that we are unable to predict the outcome or estimate a possible loss or range of loss.
Contingent Payment Arrangements
We periodically enter into contingent payment arrangements in connection with our business combinations. In these arrangements, we agree to pay additional consideration to the sellers to the extent that certain performance targets are achieved. We estimate the fair value of these potential future obligations at the time a business combination is consummated and record a liability on our consolidated statements of financial condition. We then accrete the obligation to its expected payment amount over the measurement period. If our expected payment amount subsequently changes, the obligation is modified in the current period resulting in a gain or loss. Both gains and losses resulting from changes to expected payments and the accretion of these obligations to their expected payment amounts are reflected within contingent payment arrangements in our consolidated statements of income. During the fourth quarters of 2021 and 2020, we recorded an impairment of the contingent consideration payable of $0.6 million and $1.4 million, respectively. This impairment was related to our 2016 acquisition of Ramius Alternative Solutions LLC.

Mutual Fund Underwriting Activities
Purchases and sales of shares of company-sponsored mutual funds in connection with the underwriting activities of our subsidiaries, including related commission income, are recorded on the trade date. Receivables from brokers and dealers for sale of shares of company-sponsored mutual funds generally are realized within three business days from the trade date, in conjunction with the settlement of the related payables to company-sponsored mutual funds for share purchases. Distribution plan and other promotion and servicing payments are recognized as expense when incurred.
Long-term Incentive Compensation Plans
We maintain several unfunded, non-qualified long-term incentive compensation plans, under which we grant annual awards to employees, generally in the fourth quarter, and to members of the Board of Directors of the General Partner, who are not employed by our company or by andany of our affiliates ("Eligible Directors").
Awards granted in December 2018, 20172021, 2020 and 20162019 allowed employee participants to allocate their awards between restricted AB Holding Units and deferred cash. Participants (except certain members of senior management) generally could allocate up to 50% of their awards to deferred cash, not to exceed a total of $250,000 per award. Each of our employees based outside of the United States (other than expatriates), who received an award of $100,000 or less, could have allocated up to 100% of his or her award to deferred cash. Participants allocated their awards prior to the date on which the Compensation and Workplace Practices Committee granted(the "Compensation Committee") of the Board of Directors (the "Board") approved awards in December 2018, 20172021, 2020 and 2016.2019. For these awards, the number of AB Holding Units awarded was based on the closing price of an AB Holding Unit on the grant date. For awards granted in 2018, 20172021, 2020 and 2016:2019:
•We engageengaged in open-market purchases of AB Holding Units or purchase newly-issued AB Holding Units from AB Holding that are awarded to participants and keep them in a consolidated rabbi trust.
•Quarterly distributions on vested and unvested AB Holding Units arewere paid currently to participants, regardless of whether or not a long-term deferral election has been made.
•Interest on deferred cash iswas accrued monthly based on our monthly weighted average cost of funds.
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We recognize compensation expense related to equity compensation grants in the financial statements using the fair value method. Fair value of restricted AB Holding Unit awards is the closing price of an AB Holding Unit on the grant date; fair value of options is determined using the Black-Scholes option valuation model. Under the fair value method, compensatory expense is measured at the grant date based on the estimated fair value of the award and is recognized over the required service period. For year-end long-term incentive compensation awards, employees who resign or are terminated without cause may retain their awards, subject to compliance with certain agreements and restrictive covenants set forth in the applicable award agreement, including restrictions on competition and employee and client solicitation, and a claw-back for failing to follow existing risk management policies. Because there is no service requirement, we fully expense these awards on the grant date. Most equity replacement, sign-on or similar deferred compensation awards included in separate employment agreements or arrangements include a required service period. Regardless of whether or not the award agreement includes employee service requirements, AB Holding Units typically are delivered to employees ratably over three years to four years, unless the employee has made a long-term deferral election.
Grants of restricted AB Holding Units can be awarded to Eligible Directors. Generally, these restricted AB Holding Units vest ratably over four years. These restricted AB Holding Units are not forfeitable (except if the Eligible Director is terminated for “Cause,” as that term is defined in the applicable award agreement). We fully expense these awards on grant date, as there is no service requirement.
We fund our restricted AB Holding Unit awards either by purchasing AB Holding Units on the open market or purchasing newly-issued AB Holding Units from AB Holding, and then keeping all of these AB Holding Units in a consolidated rabbi trust until delivering them or retiring them. In accordance with the Amended and Restated Agreement of Limited Partnership of AB (“AB Partnership Agreement”), when AB purchases newly-issued AB Holding Units from AB Holding, AB Holding is required to use the proceeds it receives from AB to purchase the equivalent number of newly-issued AB Units, thus increasing its percentage ownership interest in AB. AB Holding Units held in the consolidated rabbi trust are corporate assets in the name of the trust and are available to the general creditors of AB.
During eachRepurchases of 2018 and 2017, we purchased 9.3 million AB Holding Units for $268.0 millionthe years ended December 31, 2021 and $220.2 million, respectively (on2020 consisted of the following:
Years Ended December 31
20212020
(in millions)
Total amount of AB Holding Units Purchased(1)
5.6 5.4 
Total Cash Paid for AB Holding Units Purchased(1)
$262.3 $149.0 
Open Market Purchases of AB Holding Units Purchased(2)
2.6 3.1 
Total Cash Paid for Open Market Purchases of AB Holding Units(2)
$117.9 $74.0 
(1)Purchased on a trade date basis). These amounts reflect open-market purchases of 6.5 million and 5.2 million AB Holding Units for $183.2 million and $117.1 million, respectively, with thebasis.
(2)The remainder relatingrelated to purchases of AB Holding Units from employees to allow them to fulfill statutory tax withholding requirements at the time of delivery of long-term incentive compensation awards. Purchases of AB Holding Units reflected on the consolidated statements of cash flows are net of AB Holding Units purchased by employees as part of a distribution reinvestment election.

Each quarter, we consider whether to implement a plan to repurchase AB Holding Units pursuant to Rules 10b5-1 and 10b-18 under the Securities Exchange Act of 1934, as amended (“Exchange Act”). A plan of this type allows a company to repurchase its shares at times when it otherwise might be prevented from doing so because of self-imposed trading blackout periods or because it possesses material non-public information. Each broker we select has the authority under the terms and limitations specified in the plan to repurchase AB Holding Units on our behalf in accordance with the terms ofand limitations specified in the plan. Repurchases are subject to regulations promulgated by the SEC as well as certain price, market volume and timing constraints specified in the plan. TheThere was no plan adopted during the fourth quarter of 2018 expired at the close of business on February 12, 2019.2021. We may adopt additional plans in the future to engage in open-market purchases of AB Holding Units to help fund anticipated obligations under our incentive compensation award program and for other corporate purposes.
During 2018,2021, we granted to employees and Eligible Directors 8.77.0 million restricted AB Holding Units (including 6.23.4 million granted in December for 20182021 year-end awards to employees). During 2017,2020, we granted to employees and Eligible Directors 8.65.7 million restricted AB Holding Units (including 6.45.0 million granted in December for 20172020 year-end awards to employees). We used AB Holding Units repurchased during the periods and newly-issued AB Holding Units to fund these awards.
During 20182021 and 2017,2020, AB Holding issued 0.90.1 million and 1.2 million5,182 AB Holding Units, respectively, upon exercise of options to buy AB Holding Units. AB Holding used the proceeds of $16.6$3.4 million and $20.1$0.1 million, respectively, received from employeesaward recipients as payment in cash for the exercise price to purchase the equivalent number of newly-issued AB Units.
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Foreign Currency Translation and Transactions
Assets and liabilities of foreign subsidiaries are translated from functional currencies into United States dollars (“US$”) at exchange rates in effect at the balance sheet dates, and related revenues and expenses are translated into US$ at average exchange rates in effect during each period. Net foreign currency gains and losses resulting from the translation of assets and liabilities of foreign operations into US$ are reported as a separate component of other comprehensive income in the consolidated statements of comprehensive income. Net foreign currency transaction gains (losses)losses were $0.6$8.5 million, $(2.9)$3.3 million and $1.6$2.0 million for 2018, 20172021, 2020 and 2016,2019, respectively, and are reported in general and administrative expenses on the consolidated statements of income.
Cash Distributions
AB is required to distribute all of its Available Cash Flow, as defined in the AB Partnership Agreement, to its Unitholders and to the General Partner. Available Cash Flow can be summarized as the cash flow received by AB from operations minus such amounts as the General Partner determines, in its sole discretion, should be retained by AB for use in its business, or plus such amounts as the General Partner determines, in its sole discretion, should be released from previously retained cash flow.
Typically, Available Cash Flow has been the adjusted diluted net income per unit for the quarter multiplied by the number of general and limited partnership interests at the end of the quarter. In future periods, management anticipates that Available Cash Flow will be based on adjusted diluted net income per unit, unless management determines, with the concurrence of the Board, of Directors, that one or more adjustments that are made for adjusted net income should not be made with respect to the Available Cash Flow calculation.
On February 13, 2019,11, 2022, the General Partner declared a distribution of $0.71$1.38 per AB Unit, representing a distribution of Available Cash Flow for the three months ended December 31, 2018.2021. The General Partner, as a result of its 1% general partnership interest, is entitled to receive 1% of each distribution. The distribution is payable on March 7, 201917, 2022 to holders of record on February 25, 2019.22, 2022.
Total cash distributions per Unit paid to the General Partner and Unitholders during 2018, 20172021, 2020 and 20162019 were $3.16, $2.39$3.86, $3.08 and $1.98,$2.60, respectively.
Comprehensive Income
We report all changes in comprehensive income in the consolidated statements of comprehensive income. Comprehensive income includes net income, as well as unrealized gains and losses on investments classified as available-for-sale (for 2017 and 2016), foreign currency translation adjustments, actuarial gains (losses) and prior service cost. Deferred taxes were not recognized on foreign currency translation adjustments for foreign subsidiaries which had earnings that were considered permanently invested outside the United States.

Subsequent Events
We have evaluated subsequent events through the date that these financial statements were filed with the Securities and Exchange Commission and did not identify any subsequent events that would have required disclosure in these financial statements.
Reclassifications
During 2021, amounts previously presented on the Statement of Cash Flows as (increase) decrease in right-of-use assets and increase (decrease) in lease liabilities are now presented net as "Cash payments to relieve operating lease liabilities". Non-cash lease expense under adjustments to reconcile net income to net cash provided by operating activities formerly classified as "Depreciation and other amortization" are now classified separately on the Statement of Cash Flows as "Non-cash lease expense." Prior period amounts previously presented as such have been reclassified to conform to the current period's presentation.
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3. Revenue Recognition

See Note 2, Significant Accounting Policies, Revenue Recognition, for descriptions of revenues presented in the table below. The adoption of ASC 606 had no significant impact on revenue recognition during 2018, except for the recognition of $12.9 million of performance-based fees in 2018 from a fund in liquidation, which recognition was not probable of significant reversal. Under the previous revenue accounting standard, these performance-based fees would not have been recognized until final liquidation of the fund. Revenues for the years ended December 31, 2018, 20172021, 2020 and 20162019 consisted of the following:

Years Ended December 31
202120202019
(in thousands)
Subject to contracts with customers:
    Investment advisory and services fees
        Base fees$2,949,405 $2,462,810 $2,372,429 
        Performance-based fees245,119 132,626 99,615 
    Bernstein research services452,017 459,744 407,911 
    Distribution revenues
        All-in-management fees350,674 331,268 291,999 
        12b-1 fees83,920 75,973 80,268 
        Other distribution fees217,646 122,540 82,776 
    Other revenues
        Shareholder servicing fees90,225 82,317 77,394 
        Other16,034 21,240 17,924 
4,405,040 3,688,518 3,430,316 
Not subject to contracts with customers:
    Dividend and interest income, net of interest expense35,048 35,273 47,216 
    Investment (losses) gains(636)(16,401)38,659 
    Other revenues2,150 1,146 2,241 
36,562 20,018 88,116 
Total net revenues$4,441,602 $3,708,536 $3,518,432 
  Year Ended December 31,
  2018 2017 2016
 (in thousands)
Subject to contracts with customers:      
    Investment advisory and services fees      
        Base fees $2,244,068
 $2,106,525
 $1,900,719
        Performance-based fees 118,143
 94,780
 32,752
    Bernstein research services 439,432
 449,919
 479,875
    Distribution revenues      
        All-in-management fees 254,477
 245,367
 197,766
        12b-1 fees 87,166
 94,972
 114,641
        Other 76,919
 71,724
 71,998
    Other revenues      
        Shareholder servicing fees 75,974
 75,024
 77,690
        Other 19,211
 17,838
 16,703
  3,315,390
 3,156,149
 2,892,144
Not subject to contracts with customers:      
    Dividend and interest income, net of interest expense 45,827
 45,997
 37,816
    Investment gains (losses) 2,653
 92,102
 93,353
    Other revenues 3,491
 4,273
 5,466
  51,971
 142,372
 136,635
Total net revenues $3,367,361
 $3,298,521
 $3,028,779

4. Real Estate Charges
Since 2010, we have sub-leased over one million square feet of office space. The activity in the liability account relating to our global space consolidation initiatives for the following periods is:
 Year Ended December 31,
 2018 2017
 (in thousands)
Balance as of January 1,$113,635
 $112,932
Expense incurred7,122
 28,507
Deferred rent—
 7,083
Payments made (net)(39,345) (39,122)
Interest accretion4,412
 4,235
Balance as of end of period$85,824
 $113,635

5. Net Income Per Unit
Basic net income per unit is derived by reducing net income for the 1% general partnership interest and dividing the remaining 99% by the basic weighted average number of limited partnership units outstanding for each year. Diluted net income per unit is derived by reducing net income for the 1% general partnership interest and dividing the remaining 99% by the total of the diluted weighted average number of limited partnership units outstanding for each year.
Years Ended December 31
202120202019
(in thousands, except per unit amounts)
Net income attributable to AB Unitholders$1,148,623 $865,952 $752,042 
Weighted average units outstanding—basic271,729 269,058 268,075 
Dilutive effect of compensatory options to buy AB Holding Units11 27 44 
Weighted average units outstanding—diluted271,740 269,085 268,119 
Basic net income per AB Unit$4.18 $3.19 $2.78 
Diluted net income per AB Unit$4.18 $3.19 $2.78 
Years Ended December 31
202120202019
Anti-dilutive options excluded from diluted net income— 29,056 29,056 
 Year Ended December 31,
 2018 2017 2016
 (in thousands, except per unit amounts)
Net income attributable to AB Unitholders$757,588
 $662,403
 $673,358
      
Weighted average units outstanding—basic269,236
 266,955
 269,084
Dilutive effect of compensatory options to buy AB Holding Units251
 430
 554
Weighted average units outstanding—diluted269,487
 267,385
 269,638
      
Basic net income per AB Unit$2.79
 $2.46
 $2.48
Diluted net income per AB Unit$2.78
 $2.45
 $2.47
We excluded 49,784 options in 2018, 1,970,741 options in 2017 and 2,873,106 options in 2016, from the diluted net income per unit computation due to their anti-dilutive effect.
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5. Cash and Securities Segregated Under Federal Regulations and Other Requirements
As of December 31, 20182021 and 2017, $1.22020, $1.5 billion and $0.8$1.8 billion, respectively, of U.S. Treasury Bills were segregated in a special reserve bank custody account for the exclusive benefit of our brokerage customers under Rule 15c3-3 of the Exchange Act.
7.6. Investments
Investments consist of:
Years Ended December 31
December 31,20212020
2018 2017(in thousands)
(in thousands)
   
U.S. Treasury Bills$392,424
 $52,609
Equity securities:   Equity securities:
Long-term incentive compensation-related38,883
 51,758
Long-term incentive compensation-related$32,237 $34,351 
Seed capital105,951
 160,672
Seed capital133,992 75,766 
Other73,409
 81,154
Other18,243 55,439 
Exchange-traded options2,568
 4,981
Exchange-traded options1,893 7,527 
Investments in limited partnership hedge funds:   Investments in limited partnership hedge funds:
Long-term incentive compensation-related13,546
 14,276
Long-term incentive compensation-related31,602 25,762 
Seed capital67,153
 22,923
Seed capital19,318 16,646 
Private equity (seed capital)—
 38,186
Time deposits8,783
 5,138
Time deposits21,024 18,602 
Other11,627
 11,892
Other15,109 19,282 
Total investments$714,344
 $443,589
Total investments$273,418 $253,375 
Total investments related to long-term incentive compensation obligations of $52.4$63.8 million and $66.0$60.1 million as of December 31, 20182021 and 2017,2020, respectively, consist of company-sponsored mutual funds and hedge funds. For long-term incentive compensation awards granted before 2009, we typically made investments in company-sponsored mutual funds and hedge funds that were notionally elected by plan participants and maintained them (and continue to maintain them) in a consolidated rabbi trust or separate

custodial account. The rabbi trust and custodial account enable us to hold such investments separate from our other assets for the purpose of settling our obligations to participants. The investments held in the rabbi trust and custodial account remain available to the general creditors of AB.
The underlying investments of hedge funds in which we invest include long and short positions in equity securities, fixed income securities (including various agency and non-agency asset-based securities), currencies, commodities and derivatives (including various swaps and forward contracts). These investments are valued at quoted market prices or, where quoted market prices are not available, are fair valued based on the pricing policies and procedures of the underlying funds.
We allocate seed capital to our investment teams to help develop new products and services for our clients. A portion of our seed capital trading investments are equity and fixed income products, primarily in the form of separately-managed account portfolios, U.S. mutual funds, Luxembourg funds, Japanese investment trust management funds or Delaware business trusts. We also may allocate seed capital to investments in private equity funds. During the fourth quarter of 2018, we sold our ownership in a private equity investment ($37.2 million as of December 31, 2017) to a third-party. In regard to our seed capital investments, the amounts above reflect those funds in which we are not the primary beneficiary of a VIE or hold a controlling financial interest in a VOE. During 2018, our seed capital in limited partnership hedge funds increased $44.2 million primarily due to the deconsolidation of a fund in which we have a seed investment of $42.5 million due to no longer having a controlling financial interest. See Note 15, Consolidated Company-Sponsored Investment Funds, for a description of the seed capital investments that we consolidated. As of December 31, 20182021 and 2017,2020, our total seed capital investments were $391.6$379.0 million and $523.2$310.3 million, respectively. Seed capital investments in unconsolidated company-sponsored investment funds are valued using published net asset values or non-published net asset values if they are not listed on an active exchange but have net asset values that are comparable to funds with published net asset values and have no redemption restrictions.
In addition, we also have long positions in corporate equities and long exchange-traded options traded through our options desk.
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The portion of unrealized gains (losses) related to equity securities, as defined by ASU 2016-01,ASC 321-10, held as of December 31, 20182021 and 20172020 were as follows:
Years Ended December 31
20212020
(in thousands)
Net gains recognized during the period$19,240 $17,927 
Less: net gains recognized during the period on equity securities sold during the period23,697 27,357 
Unrealized losses recognized during the period on equity securities held$(4,457)$(9,430)
 December 31,
 2018 2017
 (in thousands)
Net (loss) gain recognized during the period$(21,797) $20,873
Less: net gains recognized during the period on equity securities sold during the period1,515
 24,594
Unrealized losses recognized during the period on equity securities held$(23,312) $(3,721)
8.7. Derivative Instruments
See Note 15, Consolidated Company-Sponsored Investment Funds, for disclosure of derivative instruments held by our consolidated company-sponsored investment funds.
We enter into various futures, forwards, options and swaps to economically hedge certain seed capital investments. Also, we have currency forwards that help us to economically hedge certain balance sheet exposures. In addition, our options desk trades long and short exchange-traded equity options. We do not hold any derivatives designated in a formal hedge relationship under ASC 815-10, Derivatives and Hedging.

The notional value, fair value and gains and losses recognized in investment gains (losses) as of December 31, 20182021 and 20172020 for derivative instruments (excluding derivative instruments relating to our options desk trading activities discussed below) not designated as hedging instruments were as follows:
Notional
Value		Derivative
Assets		Derivative
Liabilities		Gains
(Losses)
Notional
Value
 
Derivative
Assets
 
Derivative
Liabilities
 
Gains
(Losses)
(in thousands)
(in thousands)
December 31, 2018       
December 31, 2021December 31, 2021
Exchange-traded futures$218,657
 $1,594
 $2,534
 $3,515
Exchange-traded futures$131,876 $392 $1,186 $(5,072)
Currency forwards87,019
 7,647
 7,582
 379
Currency forwards66,058 7,344 6,980 1,746 
Interest rate swaps112,658
 1,649
 1,959
 (125)Interest rate swaps13,483 497 833 (316)
Credit default swaps94,657
 2,888
 2,685
 335
Credit default swaps155,757 6,594 6,967 (2,914)
Total return swaps99,038
 3,301
 62
 8,246
Total return swaps63,817 595 527 (6,433)
Option swapsOption swaps50,000 — 430 (309)
Total derivatives$612,029
 $17,079
 $14,822
 $12,350
Total derivatives$480,991 $15,422 $16,923 $(13,298)
December 31, 2017       
December 31, 2020December 31, 2020
Exchange-traded futures$242,355
 $948
 $2,540
 $(15,343)Exchange-traded futures$142,886 $118 $1,834 $(15,743)
Currency forwards126,503
 8,306
 8,058
 (457)Currency forwards63,906 8,576 8,451 (1,779)
Interest rate swaps43,309
 951
 870
 (137)Interest rate swaps60,997 2,043 2,955 (347)
Credit default swaps74,600
 1,247
 2,465
 (1,757)Credit default swaps167,649 10,910 13,304 (104)
Total return swaps68,106
 167
 390
 (6,167)Total return swaps52,061 94 1,847 (15,242)
Option swapsOption swaps2,486 — 2,146 (2,374)
Total derivatives$554,873
 $11,619
 $14,323
 $(23,861)Total derivatives$489,985 $21,741 $30,537 $(35,589)
As of December 31, 20182021 and 2017,2020, the derivative assets and liabilities are included in both receivables and payables to brokers and dealers on our consolidated statements of financial condition. Gains and losses on derivative instruments are reported in investment gains (losses) on the consolidated statements of income.
We may be exposed to credit-related losses in the event of nonperformancenon-performance by counterparties to derivative financial instruments. We minimize our counterparty exposure through a credit review and approval process. In addition, we have executed various collateral arrangements with counterparties to the over-the-counter derivative transactions that require both pledging and accepting collateral in the form of cash. As of December 31, 20182021 and 2017,2020, we held $4.8$2.9 million and $0.5$0.4 million, respectively, of cash collateral payable to trade counterparties. This obligation to return cash is reported in payables to brokers and dealers in our consolidated statements of financial condition.
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Although notional amount is the most commonly used measure of volume in the derivatives market, it is not used as a measure of credit risk. Generally, the current credit exposure of our derivative contracts is limited to the net positive estimated fair value of derivative contracts at the reporting date after taking into consideration the existence of netting agreements and any collateral received. A derivative with positive value (a derivative asset) indicates existence of credit risk because the counterparty would owe us if the contract were closed. Alternatively, a derivative contract with negative value (a derivative liability) indicates we would owe money to the counterparty if the contract were closed. Generally, if there is more than one derivative transaction with a single counterparty, a master netting arrangement exists with respect to derivative transactions with that counterparty to provide for aggregate net settlement.
Certain of our standardized contracts for over-the-counter derivative transactions (“ISDA Master Agreements”) contain credit risk related contingent provisions pertaining to each counterparty's credit rating. In some ISDA Master Agreements, if the counterparty’s credit rating, or in some agreements, our AUM, falls below a specified threshold, either a default or a termination event permitting the counterparty to terminate the ISDA Master Agreement would be triggered. In all agreements that provide for collateralization, various levels of collateralization of net liability positions are applicable, depending on the credit rating of the counterparty. As of December 31, 20182021 and 2017,2020, we delivered $4.5$5.6 million and $8.8$6.4 million, respectively, of cash collateral into brokerage accounts. We report this cash collateral in cash and cash equivalents in our consolidated statements of financial condition.
As of December 31, 20182021 and 2017,2020, we held $2.6$1.9 million and $5.0$7.5 million, respectively, of long exchange-traded equity options, which are included in other investments on our consolidated statements of financial condition. In addition, as of December 31, 20182021 and 2017,2020, we held $3.8$2.8 million and $13.6$12.5 million, respectively, of short exchange-traded equity options, which are included in securities sold not yet purchased on our consolidated statements of financial condition. Our options desk provides our clients with equity derivative strategies and execution for exchange-traded options on single stocks, exchange-traded funds and indices. While predominately agency-based, the options desk may commit capital to facilitate a client's transaction. Our options desk

hedges the risk associated with this activity by taking offsetting positions in equities. For the yearsyear ended December 31, 2018 and 20172021, we recognized $7.9 million and $27.8 million, respectively, ofzero gains or losses on equity options activity.activity compared to $11.9 million of losses recognized on equity options activity for the year ended December 31, 2020. These losses are recognized in investment gains (losses) in the consolidated statements of income.
9.8. Offsetting Assets and Liabilities
See Note 15, Consolidated Company-Sponsored Investment Funds, for disclosure of offsetting assets and liabilities of our consolidated company-sponsored investment funds.
Offsetting of assets as of December 31, 20182021 and 20172020 was as follows:
Gross
Amounts of
Recognized
Assets		Gross
Amounts
Offset in the
Statement
of Financial
Condition		Net
Amounts of
Assets
Presented in
the
Statement of
Financial
Condition		Financial
Instruments Collateral		Cash Collateral
Received		Net
Amount
(in thousands)
December 31, 2021
Securities borrowed$19,899 $— $19,899 $(18,327)$— $1,572 
Derivatives$15,422 $— $15,422 $— $(2,872)$12,550 
Long exchange-traded options$1,893 $— $1,893 $— $— $1,893 
December 31, 2020
Securities borrowed$7,808 $— $7,808 $(7,344)$— $464 
Derivatives$21,741 $— $21,741 $— $(380)$21,361 
Long exchange-traded options$7,527 $— $7,527 $— $— $7,527 
 Gross
Amounts of
Recognized
Assets		 Gross
Amounts
Offset in the
Statement
of Financial
Condition		 Net
Amounts of
Assets
Presented in
the
Statement of
Financial
Condition		 Financial
Instruments		 Cash Collateral
Received		 Net
Amount
 (in thousands)
December 31, 2018           
Securities borrowed$64,856
 $—
 $64,856
 $(64,217) $—
 $639
Derivatives$17,079
 $—
 $17,079
 $—
 $(4,831) $12,248
Long exchange-traded options$2,568
 $—
 $2,568
 $—
 $—
 $2,568
December 31, 2017           
Securities borrowed$85,371
 $—
 $85,371
 $(82,353) $—
 $3,018
Derivatives$11,619
 $—
 $11,619
 $—
 $(519) $11,100
Long exchange-traded options$4,981
 $—
 $4,981
 $—
 $—
 $4,981
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Offsetting of liabilities as of December 31, 20182021 and 20172020 was as follows:
Gross
Amounts of
Recognized
Liabilities		Gross
Amounts
Offset in the
Statement
of
Financial
Condition		Net
Amounts
of Liabilities
Presented in
the
Statement
of Financial
Condition		Financial
Instruments Collateral		Cash Collateral
Pledged		Net
Amount
Gross
Amounts of
Recognized
Liabilities		 Gross
Amounts
Offset in the
Statement
of
Financial
Condition		 Net
Amounts
of Liabilities
Presented in
the
Statement
of Financial
Condition		 Financial
Instruments		 Cash Collateral
Pledged		 Net
Amount		(in thousands)
December 31, 2021December 31, 2021
(in thousands)
December 31, 2018           
Securities loaned$59,526
 $—
 $59,526
 $(59,526) $—
 $—
Securities loaned$23,911 $— $23,911 $(23,373)$— $538 
Derivatives$14,822
 $—
 $14,822
 $—
 $(4,458) $10,364
Derivatives$16,923 $— $16,923 $— $(5,572)$11,351 
Short exchange-traded options$3,782
 $—
 $3,782
 $—
 $—
 $3,782
Short exchange-traded options$2,774 $— $2,774 $— $— $2,774 
December 31, 2017           
Securities loaned$37,960
 $—
 $37,960
 $(37,922) $—
 $38
December 31, 2020December 31, 2020
Derivatives$14,323
 $—
 $14,323
 $—
 $(8,794) $5,529
Derivatives$30,537 $— $30,537 $— $(6,374)$24,163 
Short exchange-traded options$13,585
 $—
 $13,585
 $—
 $—
 $13,585
Short exchange-traded options$12,486 $— $12,486 $— $— $12,486 
Cash collateral, whether pledged or received on derivative instruments, is not considered material and, accordingly, is not disclosed by counterparty.



10.9. Fair Value
See Note 15, Consolidated Company-Sponsored Investment Funds, for disclosure of fair value of our consolidated company-sponsored investment funds.
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the “exit price”) in an orderly transaction between market participants at the measurement date. The three broad levels of fair value hierarchy are as follows:
•Level 1—Quoted prices in active markets are available for identical assets or liabilities as of the reported date.
•Level 2—Quoted prices in markets that are not active or other pricing inputs that are either directly or indirectly observable as of the reported date.
•Level 3—Prices or valuation techniques that are both significant to the fair value measurement and unobservable as of the reported date. These financial instruments do not have two-way markets and are measured using management’s best estimate of fair value, where the inputs into the determination of fair value require significant management judgment or estimation.
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Assets and Liabilities Measured at Fair Value on a Recurring Basis
Valuation of our financial instruments by pricing observability levels as of December 31, 20182021 and 20172020 was as follows (in thousands):
 Level 1Level 2Level 3
NAV Expedient(1)
OtherTotal
December 31, 2021:
Money markets$151,156 $— $— $— $— $151,156 
Securities segregated (U.S. Treasury Bills)— 1,503,828 — — — 1,503,828 
Derivatives392 15,030 — — — 15,422 
Investments:
Equity securities144,917 39,284 126 145 — 184,472 
Long exchange-traded options1,893 — — — — 1,893 
Limited partnership hedge funds(2)
— — — — 50,920 50,920 
Time deposits(3)
— — — — 21,024 21,024 
Other investments9,094 — — — 6,015 15,109 
Total investments155,904 39,284 126 145 77,959 273,418 
Total assets measured at fair value$307,452 $1,558,142 $126 $145 $77,959 $1,943,824 
Securities sold not yet purchased:    
Short equities – corporate$1,054 $— $— $— $— $1,054 
Short exchange-traded options2,774 — — — — 2,774 
Derivatives1,186 15,737 — — — 16,923 
Contingent payment arrangements— — 38,260 — — 38,260 
Total liabilities measured at fair value$5,014 $15,737 $38,260 $— $— $59,011 
December 31, 2020:
Money markets$130,675 $— $— $— $— $130,675 
Securities segregated (U.S. Treasury Bills)— 1,752,906 — — — 1,752,906 
Derivatives118 21,623 — — — 21,741 
Investments:
Equity securities147,705 17,565 125 161 — 165,556 
Long exchange-traded options7,527 — — �� — 7,527 
Limited partnership hedge funds(2)
— — — — 42,408 42,408 
Time deposits(3)
— — — — 18,602 18,602 
Other investments7,011 — — — 12,271 19,282 
Total investments162,243 17,565 125 161 73,281 253,375 
Total assets measured at fair value$293,036 $1,792,094 $125 $161 $73,281 $2,158,697 
Securities sold not yet purchased:    
Short equities – corporate$5,305 $— $— $— $— $5,305 
Short exchange-traded options12,486 — — — — 12,486 
Derivatives1,834 28,703 — — — 30,537 
Contingent payment arrangements— — 27,750 — — 27,750 
Total liabilities measured at fair value$19,625 $28,703 $27,750 $— $— $76,078 
 Level 1 Level 2 Level 3 
NAV Expedient(1)
 Other Total
December 31, 2018:           
Money markets$102,888
 $—
 $—
 $—
 $—
 $102,888
Securities segregated (U.S. Treasury Bills)—
 1,169,554
 —
 —
 —
 1,169,554
Derivatives1,594
 15,485
 —
 —
 —
 17,079
Investments           
      U.S. Treasury Bills—
 392,424
 —
 —
 —
 392,424
      Equity securities209,414
 8,372
 142
 315
 —
 218,243
      Long exchange-traded options2,568
 —
 —
 —
 —
 2,568
      Limited partnership hedge
      funds(2)
—
 —
 —
 —
 80,699
 80,699
        Time deposits(3)
—
 —
 —
 —
 8,783
 8,783
        Other investments4,269
 —
 —
 —
 7,358
 11,627
Total investments216,251
 400,796
 142
 315
 96,840
 714,344
Total assets measured at fair value$320,733
 $1,585,835
 $142
 $315
 $96,840
 $2,003,865
            
Securities sold not yet purchased 
  
  
      
Short equities – corporate$4,841
 $—
 $—
 $—
 $—
 $4,841
Short exchange-traded options3,782
 —
 —
 —
 —
 3,782
Derivatives2,534
 12,288
 —
 —
 —
 14,822
Contingent payment arrangements—
 —
 7,336
 —
 —
 7,336
Total liabilities measured at fair value$11,157
 $12,288
 $7,336
 $—
 $—
 $30,781

 Level 1 Level 2 Level 3 
NAV Expedient(1)
 Other Total
December 31, 2017:           
Money markets$62,071
 $—
 $—
 $—
 $—
 $62,071
Securities segregated (U.S. Treasury Bills)—
 816,350
 —
 —
 —
 816,350
Derivatives948
 10,671
 —
 —
 —
 11,619
Investments           
      U.S. Treasury Bills—
 52,609
 —
 —
 —
 52,609
      Equity securities273,674
 19,699
 117
 94
 —
 293,584
      Long exchange-traded options4,981
 —
 —
 —
 —
 4,981
      Limited partnership hedge
      funds(2)
—
 —
 —
 —
 37,199
 37,199
        Private equity—
 —
 954
 37,232
 —
 38,186
        Time deposits(3)
—
 —
 —
 —
 5,138
 5,138
        Other investments—
 —
 —
 —
 11,892
 11,892
Total investments278,655
 72,308
 1,071
 37,326
 54,229
 443,589
Total assets measured at fair value$341,674
 $899,329
 $1,071
 $37,326
 $54,229
 $1,333,629
            
Securities sold not yet purchased 
  
  
      
Short equities – corporate$16,376
 $—
 $—
 $—
 $—
 $16,376
Short exchange-traded options13,585
 —
 —
 —
 —
 13,585
Derivatives2,540
 11,783
 —
 —
 —
 14,323
Contingent payment arrangements—
 —
 10,855
 —
 —
 10,855
Total liabilities measured at fair value$32,501
 $11,783
 $10,855
 $—
 $—
 $55,139

(1)Investments measured at fair value using NAV (or its equivalent) as a practical expedient.
(2)Investments in equity method investees that are not measured at fair value in accordance with GAAP.
(3)Investments carried at amortized cost that are not measured at fair value in accordance with GAAP.

During 2018, we sold one
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Other investments (which had previously been measured using NAV as a practical expedient), which was a venture capital fund. This fund had aincluded in Level 1 of the fair value of $37.2hierarchy include our investment in a mutual fund measured at fair value ($9.1 million atand $7.0 million as of December 31, 2017. This partnership invested in communications, consumer, digital media, healthcare2021 and information technology markets. The2020, respectively). Other investments not measured at fair value of this investment was estimated using the capital account balances provided by the partnership.
Other investments include (i) an investment in a start-upsoftware publishing company that does not have a readily available fair value ($0.9 million(zero and $4.6$2.1 million as of December 31, 20182021 and 2017,2020, respectively), (ii) an investmentinvestments in anstart-up companies that do not have a readily available fair value (these investments were $0.3 million as of December 31, 2021 and 2020), (iii) investments in equity method investeeinvestees that isare not measured at fair value in accordance with GAAP ($3.42.9 million and $4.1$6.5 million as of December 31, 20182021 and 2017,2020, respectively), and (iii)(iv) broker dealer exchange memberships that are not measured at fair value in accordance with GAAP ($3.12.8 million and $3.2$3.3 million as of December 31, 20182021 and 2017,2020, respectively).
We provide below a description of the fair value methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy:
•Money markets: We invest excess cash in various money market funds that are valued based on quoted prices in active markets; these are included in Level 1 of the valuation hierarchy.
•Treasury Bills: We hold U.S. Treasury Bills, which are primarily segregated in a special reserve bank custody account as required by Rule 15c3-3 of the Exchange Act. These securities are valued based on quoted yields in secondary markets and are included in Level 2 of the valuation hierarchy.
•Equity securities: Our equity securities consist principally of company-sponsored mutual funds with NAVs and various separately-managed portfolios consisting primarily of equity and fixed income mutual funds with quoted prices in active

markets, which are included in Level 1 of the valuation hierarchy. In addition, some securities are valued based on observable inputs from recognized pricing vendors, which are included in Level 2 of the valuation hierarchy.
•Derivatives: We hold exchange-traded futures with counterparties that are included in Level 1 of the valuation hierarchy. In addition, we also hold currency forward contracts, interest rate swaps, credit default swaps, option swaps and total return swaps with counterparties that are valued based on observable inputs from recognized pricing vendors, which are included in Level 2 of the valuation hierarchy.
•Options: We hold long exchange-traded options that are included in Level 1 of the valuation hierarchy.
Private equity: Generally, the valuation of private equity investments requires significant management judgment due to the absence of quoted market prices, inherent lack of liquidity and the long-term nature of such investments. Private equity investments are valued initially at cost. The carrying values of private equity investments are adjusted either up or down from cost to reflect expected exit values as evidenced by financing and sale transactions with third parties, or when determination of a valuation adjustment is confirmed through ongoing review in accordance with our valuation policies and procedures. A variety of factors are reviewed and monitored to assess positive and negative changes in valuation, including current operating performance and future expectations of investee companies, industry valuations of comparable public companies, changes in market outlooks, and the third party financing environment over time. In determining valuation adjustments resulting from the investment review process, particular emphasis is placed on current company performance and market conditions. For these reasons, which make the fair value of private equity investments unobservable, equity investments are included in Level 3 of the valuation hierarchy. If private equity investments become publicly traded, they are included in Level 1 of the valuation hierarchy; provided, however, if they contain trading restrictions, publicly-traded equity investments are included in Level 2 of the valuation hierarchy until the trading restrictions expire.
•Securities sold not yet purchased: Securities sold not yet purchased, primarily reflecting short positions in equities and exchange-traded options, are included in Level 1 of the valuation hierarchy.
•Contingent payment arrangements: Contingent payment arrangements relate to contingent payment liabilities associated with various acquisitions. At each reporting date, we estimate the fair values of the contingent consideration expected to be paid upon probability-weighted AUM and revenue projections, using observableunobservable market data inputs, which are included in Level 3 of the valuation hierarchy.
During the years ended December 31, 20182021 and 2017,2020, there were no transfers between Level 1 and Level 2 securities nor between Level 2 and Level 3 securities.
The change in carrying value associated with Level 3 financial instruments carried at fair value, classified as private equity and equity securities, is as follows:
December 31
20212020
(in thousands)
Balance as of beginning of period$125 $119 
Purchases— — 
Sales— — 
Realized gains (losses), net— — 
Unrealized gains (losses), net1 6 
Balance as of end of period$126 $125 
 December 31, 2018 December 31, 2017
 (in thousands)
Balance as of beginning of period$1,071
 $5,023
Purchases—
 —
Sales—
 —
Realized gains, net—
 —
Unrealized (losses) gains, net(929) (3,952)
Balance as of end of period$142
 $1,071
Transfers into and out of all levels of the fair value hierarchy are reflected at end-of-period fair values. Realized and unrealized gains and losses on Level 3 financial instruments are recorded in investment gains and losses in the consolidated statements of income.
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As part of December 31, 2017,acquisitions made by the Company, we had an investment in a private equity fund focused exclusively on the energy sector (fair value of $1.0 million) that was classified as Level 3 and written off during the second quarter of 2018. This investment’s valuation was based on a market approach, considering recent transactions in the fund and the industry.

We acquired Ramius Alternative Solutions LLC in 2016, CPH Capital Fondsmaeglerselskab A/S in 2014 and SunAmerica's alternative investment group in 2010, all of which includedmay enter into contingent consideration arrangements as part of the purchase price.

The change in carrying value associated with Level 3 financial instruments carried at fair value, classified as contingent payment arrangements, is as follows:
December 31
20212020
(in thousands)
Balance as of beginning of period$27,750 $22,911 
Addition7,800 4,400 
Accretion3,310 3,105 
Changes in estimates(600)(1,366)
Payments— (1,300)
Balance as of end of period$38,260 $27,750 
 December 31, 2018 December 31, 2017
 (in thousands)
Balance as of beginning of period$10,855
 $17,589
Addition—
 —
Accretion210
 460
Changes in estimates(2,429) (193)
Payments(1,300) (7,001)
Balance as of end of period$7,336
 $10,855
During 2017, we made the final contingent consideration payment relating to our 2014 acquisitionThe liabilities were valued using expected revenue growth rates and recorded a change in estimate and wrote off the remaining contingent consideration payable relating to our 2010 acquisition.
During 2018, we amended the contingent payment relating to our 2016 acquisition by modifying the earnout structure and extending it one year. As part of this amendment, we recorded a change in estimate and wrote off $2.4 million related to the contingent consideration.discount rates. As of December 31, 20182021, the expected revenue growth rates range from 2.0% to 83.9%, with a weighted average of 11.9%, calculated using cumulative revenues and 2017, one acquisition-relatedrange of revenue growth rates (excluding revenue growth from additional AUM contributed in year of acquisition). The discount rates ranged from 1.9% to 10.4%, with a weighted average of 7.0%, calculated using total contingent consideration liabilityliabilities and range of $7.3 million and $10.9 million, respectively, remains relating to our 2016 acquisition, which was valued asdiscount rates. As of December 31, 2018 using a2020, the expected revenue growth raterates range from 0.7% to 50.0%, with a weighted average of 18%4.9%, calculated using cumulative revenues and a discount rate ranging from 3.2% to 3.7%. This acquisition was valued asrange of December 31, 2017 using a revenue growth raterates (excluding revenue growth from additional AUM contributed in year of 31%acquisition). The discount rates ranged from 1.9% to 10.4%, with a weighted average of 8.0%, calculated using total contingent liabilities and arange of discount rate ranging from 1.4% to 2.3%.rates.
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
We did not have any material assets or liabilities that were measured at fair value for impairment on a nonrecurring basis during the years ended December 31, 20182021 or 2017.2020.
11.10. Furniture, Equipment and Leasehold Improvements, Net
Furniture, equipment and leasehold improvements, net consist of:
December 31,Years Ended December 31
2018 201720212020
(in thousands)(in thousands)
Furniture and equipment$561,816
 $551,502
Furniture and equipment$584,161 $556,966 
Leasehold improvements253,439
 245,841
Leasehold improvements301,036 284,080 
815,255
 797,343
TotalTotal885,197 841,046 
Less: Accumulated depreciation and amortization(659,736) (639,774)Less: Accumulated depreciation and amortization(716,022)(693,172)
Furniture, equipment and leasehold improvements, net$155,519
 $157,569
Furniture, equipment and leasehold improvements, net$169,175 $147,874 
Depreciation and amortization expense on furniture, equipment and leasehold improvements were $34.2$38.8 million, $32.8$39.2 million and $29.4$38.1 million for the years ended December 31, 2018, 20172021, 2020 and 2016,2019, respectively.
During 2018, 2017 and 2016, we recorded $7.2 million, $36.7 million and $17.7 million, respectively, in pre-tax real estate charges. See Note 4 for further discussion
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12.11. Deferred Sales Commissions, Net

The components of deferred sales commissions, net for the years ended December 31, 20182021 and 20172020 were as follows (excluding amounts related to fully amortized deferred sales commissions):
December 31,Years Ended December 31
2018 201720212020
(in thousands)(in thousands)
Carrying amount of deferred sales commissions$926,188
 $911,852
Carrying amount of deferred sales commissions$177,233 $116,484 
Less: Accumulated amortization(618,910) (597,566)Less: Accumulated amortization(53,976)(30,001)
Cumulative CDSC received(290,130) (284,160)Cumulative CDSC received(48,358)(22,417)
Deferred sales commissions, net$17,148
 $30,126
Deferred sales commissions, net$74,899 $64,066 
Amortization expense was $21.3$34.4 million, $31.9$27.4 million and $41.1$15.0 million for the years ended December 31, 2018, 20172021, 2020 and 2016,2019, respectively. Estimated future amortization expense related to the December 31, 20182021 net asset balance, assuming no additional CDSC is received in future periods, is as follows (in thousands):
2022$35,349 
202326,176 
202412,676 
2025698 
Total$74,899 
2019$9,675
20204,561
20212,608
2022237
202351
202416
 $17,148

13.12. Debt
As of December 31, 2018 and 2017, AB had $523.2has an $800.0 million and $491.8 million, respectively, in commercial paper outstanding with weighted average interest rates of approximately 2.7% and 1.6%, respectively. Debt included in the statement of financial condition is presented net of issuance costs of $1.9 million and $1.1 million as of December 31, 2018 and 2017, respectively. The commercial paper is short term in nature, and as such, recorded value is estimated to approximate fair value (and considered a Level 2 security in the fair value hierarchy). Average daily borrowings of commercial paper during 2018 and 2017 were $350.3 million and $482.2 million, respectively, with weighted average interest rates of approximately 2.0% and 1.2%, respectively.
On September 27, 2018, AB amended and restated the existing $1.0 billion committed, unsecured senior revolving credit facility (the “"Credit Facility”") with a group of commercial banks and other lenders, reducing the principal amount to $800.0 millionwhich had an original maturity date of September 27, 2023. The Credit Facility was amended and restated as of October 13, 2021, extending the maturity date to September 27, 2023.October 13, 2026. There were no other significant changes included in the amendment. The Credit Facility provides for possible increases in the principal amount by up to an aggregate incremental amount of $200.0 million; any such increase is subject to the consent of the affected lenders. The Credit Facility is available for AB and Sanford C. Bernstein & Co., LLC ("SCB LLC") business purposes, including the support of AB’s commercial paper program. Both AB and SCB LLC can draw directly under the Credit Facility and management may draw on the Credit Facility from time to time. AB has agreed to guarantee the obligations of SCB LLC under the Credit Facility.
The Credit Facility contains affirmative, negative and financial covenants, which are customary for facilities of this type, including restrictions on dispositions of assets, restrictions on liens, a minimum interest coverage ratio and a maximum leverage ratio. As of December 31, 2018,2021, we were in compliance with these covenants. The Credit Facility also includes customary events of default (with customary grace periods, as applicable), including provisions under which, upon the occurrence of an event of default, all outstanding loans may be accelerated and/or lender’s commitments may be terminated. Also, under such provisions, upon the occurrence of certain insolvency- or bankruptcy-related events of default, all amounts payable under the Credit Facility would automatically become immediately due and payable, and the lender’s commitments automatically would terminate.
Amounts under the Credit Facility may be borrowed, repaid and re-borrowed by us from time to time until the maturity of the facility. Voluntary prepayments and commitment reductions requested by us are permitted at any time without a fee (other than customary breakage costs relating to the prepayment of any drawn loans) upon proper notice and subject to a minimum dollar requirement. Borrowings under the Credit Facility bear interest at a rate per annum, which will be, at our option, a rate equal to an applicable margin, which is subject to adjustment based on the credit ratings of AB, plus one of the following indices: London Interbank Offered Rate; a floating base rate; or the Federal Funds rate.

As of December 31, 20182021 and 2017,2020, we had no amounts outstanding under the Credit Facility. During 20182021 and 2017,2020, we did not draw upon the Credit Facility.
OnAB also has a $900.0 million committed, unsecured senior credit facility (“EQH Facility”) with EQH. The EQH Facility matures on November 16, 2018,4, 2024 and is available for AB's general business purposes. Borrowings under the EQH Facility generally bear interest at a rate per annum based on prevailing overnight commercial paper rates.
The EQH Facility contains affirmative, negative and financial covenants which are substantially similar to those in AB’s committed bank facilities. The EQH Facility also includes customary events of default substantially similar to those in AB’s committed bank facilities, including provisions under which, upon the occurrence of an event of default, all outstanding loans may be accelerated and/or the lender’s commitment may be terminated.
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Amounts under the EQH Facility may be borrowed, repaid and re-borrowed by us from time to time until the maturity of the facility. AB amendedor EQH may reduce or terminate the commitment at any time without penalty upon proper notice. EQH also may terminate the facility immediately upon a change of control of our general partner.
As of December 31, 2021 and restated2020, AB had $755.0 million and $675.0 million outstanding under the EQH Facility with interest rates of approximately 0.2%. Average daily borrowings on the EQH Facility during 2021 and 2020 were $404.6 million and $470.8 million, respectively, with weighted average interest rates of approximately 0.2% and 0.5%, respectively.
In addition to the EQH Facility, on September 1, 2020, AB established a $300.0 million uncommitted, unsecured senior credit facility (“EQH Uncommitted Facility”) with EQH. The EQH Uncommitted Facility matures on September 1, 2024 and is available for AB's general business purposes. Borrowings under the EQH Unsecured Facility generally bear interest at a rate per annum based on prevailing overnight commercial paper rates. The EQH Uncommitted Facility contains affirmative, negative and financial covenants which are substantially similar to those in the EQH Facility. As of both December 31, 2021 and December 31, 2020, we had no amounts outstanding on the EQH Uncommitted Facility and have not drawn the facility since its existinginception.
As of both December 31, 2021 and 2020, we had no commercial paper outstanding. The commercial paper is short term in nature, and as such, recorded value is estimated to approximate fair value (and considered a Level 2 security in the fair value hierarchy). Average daily borrowings of commercial paper for 2021 were $157.0 million with a weighted average interest rate of 0.2%. Average daily borrowings of commercial paper for 2020 were $83.2 million with a weighted average interest rate of approximately 0.4%.
AB had a $200.0 million committed, unsecured senior revolving credit facility (the "Revolver") with a leading international bank, extending the maturity date from November 28, 2018 towhich matured on November 16, 2021. There were no other material changes included in the amendment. The Revolver iswas available for AB's and SCB LLC's business purposes, including the provision of additional liquidity to meet funding requirements primarily related to SCB LLC's operations. Both AB and SCB LLC canwere able to draw directly under the Revolver and management expects to draw on the Revolverdid so from time to time. AB has agreed to guarantee the obligations of SCB LLC under the Revolver. The Revolver containscontained affirmative, negative and financial covenants which arethat were identical to those of the Credit Facility. Borrowings under the Revolver bear interest at a rate per annum, which could be, at our option, a rate equal to an applicable margin, which was subject to adjustment based on the credit ratings of AB, plus one of the following indices: London Interbank Offered Rate; a floating base rate; or the Federal Funds rate. As of both December 31, 20182021 and December 31, 2017,2020 we had $25.0 million and $75.0 millionno amounts outstanding under the Revolver, respectively, with interest rates of 3.4% and 2.4%, respectively.Revolver. Average daily borrowings for 20182021 and 20172020 were $19.4$13.3 million and $21.4$16.5 million, respectively, with weighted average interest rates of 2.8%1.1% and 2.0%1.6%, respectively.

On September 28, 2021, AB established a $100.0 million uncommitted line of credit with a financial institution. On October 11, 2021, AB established a $50.0 million uncommitted line of credit with a financial institution. Both uncommitted lines of credit are available for AB's and SCB LLC's business purposes. Both AB and SCB LLC can draw directly under these lines. AB has agreed to guarantee the obligations of SCB LLC under these lines of credit. As of December 31, 2021 we had no amounts outstanding under these lines of credit and have not drawn on them since their inception.
In addition, SCB LLC currently has three uncommitted lines of credit with three financial institutions. Two of these lines of credit permit us to borrow up to an aggregate of approximately $175.0$165.0 million, with AB named as an additional borrower, while the other line has no stated limit. As of December 31, 20182021 and 2017,2020, SCB LLC had no bank loans outstanding.outstanding balance on these lines of credit. Average daily borrowings on the lines of bank loanscredit during 20182021 and 20172020 were $2.7 million$47 thousand and $4.5$0.9 million, respectively, with weighted average interest rates of approximately 1.6%0.9% and 1.4%1.6%, respectively.
13. Leases
We lease office space, office equipment and technology under various operating and financing leases. Our current leases have remaining lease terms of one year to 15 years, some of which include options to extend the leases for up to five years, and some of which include options to terminate the leases within one year. Since 2010, we have sub-leased over one million square feet of office space.
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Leases included in the consolidated statements of financial condition as of December 31, 2021 and 2020 were as follows:
ClassificationDecember 31, 2021December 31, 2020
(in thousands)
Operating Leases
Operating lease right-of-use assetsRight-of-use assets$414,105 $416,007 
Operating lease liabilitiesLease liabilities482,781 503,174 
Finance Leases
Property and equipment, grossRight-of-use assets10,947 5,167 
Amortization of right-of-use assetsRight-of-use assets(3,072)(2,719)
Property and equipment, net7,875 2,448 
Finance lease liabilitiesLease liabilities7,954 2,375 
The components of lease expense included in the consolidated statements of income for the years ended December 31, 2021 and 2020 were as follows:
Years Ended December 31
Classification20212020
(in thousands)
Operating lease costGeneral and administrative$97,466 $90,212 
Financing lease cost:
Amortization of right-of-use assetsGeneral and administrative2,355 1,755 
Interest on lease liabilitiesInterest expense107 86 
Total finance lease cost2,462 1,841 
Variable lease cost (1)
General and administrative39,827 38,208 
Sublease incomeGeneral and administrative(37,317)(38,622)
Net lease cost$102,438 $91,639 
(1)Variable lease expense includes operating expenses, real estate taxes and employee parking.
The sublease income represents all revenues received from sub-tenants. It is primarily fixed base rental payments combined with variable reimbursements such as operating expenses, real estate taxes and employee parking.  The vast majority of sub-tenant income is derived from our New York metro sub-tenant agreements. Sub-tenant income related to base rent is recorded on a straight-line basis.
Maturities of lease liabilities are as follows:
Operating LeasesFinancing LeasesTotal
Year ending December 31,(in thousands)
2022$100,604 $2,616 $103,220 
202397,049 2,354 99,403 
202499,259 1,510 100,769 
202533,060 1,214 34,274 
202632,047 478 32,525 
Thereafter169,074 — 169,074 
Total lease payments531,093 8,172 $539,265 
Less interest(48,312)(218)
Present value of lease liabilities$482,781 $7,954 
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We have signed a lease that commences in 2024, relating to approximately 166,000 square feet of space in New York City. Our estimated total base rent obligation (excluding taxes, operating expenses and utilities) over the 20-year lease term is approximately $393.0 million.
Lease term and discount rate:
Weighted average remaining lease term (years):
Operating leases7.57
Finance leases3.62
Weighted average discount rate:
Operating leases2.77 %
Finance leases1.60 %
Supplemental non-cash activity related to leases are as follows:
Years Ended December 31
20212020
(in thousands)
Right-of-use assets obtained in exchange for lease obligations(1):
Operating leases$82,379 $135,919 
Finance leases7,782 1,695 
(1)Represents supplemental non-cash information on lease liabilities arising from obtaining right-of-use assets.
14. Commitments and Contingencies
Operating Leases
WeAs indicated in Note 13, we lease office space, furniture and office equipment and technology under various operating leases.leasing arrangements. The future minimum payments under non-cancelable leases, sublease commitments and related payments we are obligated to make, net of sublease commitments of third-partythird party lessees to make payments to us, as of December 31, 2018,2021, are as follows:
PaymentsSublease ReceiptsNet Payments
(in millions)
2022$107.1 $(31.2)$75.9 
202399.4 (31.6)$67.8 
2024100.7 (30.7)$70.0 
202551.6 — $51.6 
202649.9 — $49.9 
2027 and thereafter528.3 — 528.3 
Total future minimum payments$937.0 $(93.5)$843.5 
 Payments Sublease
Receipts		 Net
Payments
 (in millions)
2019$131.4
 $47.1
 $84.3
2020112.6
 34.1
 78.5
2021111.7
 31.8
 79.9
202299.5
 28.4
 71.1
202392.8
 27.9
 64.9
2024 and thereafter227.5
 27.4
 200.1
Total future minimum payments$775.5
 $196.7
 $578.8
Office leases contain escalation clauses that provide for the pass through of increases in operating expenses and real estate taxes. Rent expense, which is amortized on a straight-line basis over the life of the lease, was $60.6 million, $65.2 million and $68.1 million, respectively, for the years ended December 31, 2018, 2017 and 2016, net of sublease income of $0.5 million, $0.5 million and $2.5 million, respectively, for the years ended December 31, 2018, 2017 and 2016. See Note 413 for further discussion of the real estate charges.material lease commitments.
Legal Proceedings
AB may be involved in various matters, including regulatory inquires, administrative proceedings and litigation, some of which may allege significant damages. It is reasonably possible that we could incur losses pertaining to these matters, but we cannot currently estimate any such losses.
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Management, after consultation with legal counsel, currently believes that the outcome of any individual matter that is pending or threatened, or all of them combined, will not have a material adverse effect on our results of operations, financial condition or liquidity. However, any inquiry, proceeding or litigation has an element of uncertainty; management cannot determine whether further developments relating to any individual matter that is pending or threatened, or all of them combined, will have a material adverse effect on our results of operation, financial condition or liquidity in any future reporting period.


Other
AsDuring 2010, as general partner of AllianceBernstein U.S. Real Estate L.P. (“Real Estate Fund”), we committed to invest $25.0 million in the Real Estate Fund. As of December 31, 2018,2021, we had funded $22.4 million of this commitment. AsDuring 2014, as general partner of AllianceBernstein U.S. Real Estate II L.P. (“Real Estate Fund II”), we committed to invest $28.0$27.3 million, as amended in 2020, in the Real Estate Fund II. As of December 31, 2018,2021, we had funded $15.3$21.1 million of this commitment.
15. Consolidated Company-Sponsored Investment Funds
We regularly provide seed capital to new company-sponsored investment funds. As such, we may consolidate or de-consolidate a variety of company-sponsored investment funds each quarter. Due to the similarity of risks related to our involvement with each company-sponsored investment fund, disclosures required under the VIE model are aggregated, such as disclosures regarding the carrying amount and classification of assets.
We are not required to provide financial support to company-sponsored investment funds and only the assets of such funds are available to settle each fund's own liabilities. Our exposure to loss in regard to consolidated company-sponsored investment funds is limited to our investment in, and our management fee earned from, such funds. Equity and debt holders of such funds have no recourse to AB’s assets or to the general credit of AB.
The balances of consolidated VIEs and VOEs included in our consolidated statements of financial condition were as follows:
December 31, 2021December 31, 2020
 December 31, 2018 December 31, 2017(in thousands)
 (in thousands)
 VIEs VOEs Total VIEs VOEs TotalVIEsVOEsTotalVIEsVOEsTotal
Cash and cash equivalents $11,880
 $1,238
 $13,118
 $326,158
 $360
 $326,518
Cash and cash equivalents$90,326 $— $90,326 $36,370 $136 $36,506 
Investments 217,840
 133,856
 351,696
 1,189,835
 56,448
 1,246,283
Investments613,025 — 613,025 242,541 60,041 302,582 
Other assets 6,024
 16,816
 22,840
 33,931
 1,466
 35,397
Other assets30,461 — 30,461 4,859 7,385 12,244 
Total assets $235,744
 $151,910
 $387,654
 $1,549,924
 $58,274
 $1,608,198
Total assets$733,812 $— $733,812 $283,770 $67,562 $351,332 
            
Liabilities $5,215
 $17,395
 $22,610
 $695,997
 $2,104
 $698,101
Liabilities$87,000 $— $87,000 $7,741 $22,879 $30,620 
Redeemable non-controlling interest 117,523
 28,398
 145,921
 596,241
 (18) 596,223
Redeemable non-controlling interest421,169 — 421,169 82,753 19,606 102,359 
Partners' capital attributable to AB Unitholders 113,006
 106,117
 219,123
 256,929
 56,188
 313,117
Partners' capital attributable to AB Unitholders225,643 — 225,643 193,276 25,077 218,353 
Non-redeemable non-controlling interests in consolidated entities —
 —
 —
 757
 —
 757
Total liabilities, redeemable non-controlling interest and partners' capital $235,744
 $151,910
 $387,654
 $1,549,924
 $58,274
 $1,608,198
Total liabilities, redeemable non-controlling interest and partners' capital$733,812 $— $733,812 $283,770 $67,562 $351,332 
During 2018,2021, we deconsolidated a fundfour funds in which we have ahad seed investmentinvestments totaling approximately $93.9 million as of $42.5 millionDecember 31, 2020 due to no longer having a controlling financial interest. This VIE had significant consolidated assets and liabilities as of December 31, 2017.
Fair Value
Cash and cash equivalents include cash on hand, demand deposits, overnight commercial paper and highly liquid investments with original maturities of three months or less. Due to the short-term nature of these instruments, the recorded value has been determined to approximate fair value.


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Valuation of consolidated company-sponsored investment funds' financial instruments by pricing observability levels as of December 31, 20182021 and 20172020 was as follows (in thousands):
 Level 1Level 2Level 3Total
December 31, 2021:
Investments - VIEs$165,415 $444,253 $3,357 $613,025 
Investments - VOEs— — — — 
Derivatives - VIEs622 5,265 — 5,887 
Derivatives - VOEs— — — — 
Total assets measured at fair value$166,037 $449,518 $3,357 $618,912 
Derivatives - VIEs$16,291 $2,051 $— $18,342 
Derivatives - VOEs— — — — 
Total liabilities measured at fair value$16,291 $2,051 $— $18,342 
December 31, 2020:
Investments - VIEs$73,909 $168,114 $518 $242,541 
Investments - VOEs— 59,940 101 60,041 
Derivatives - VIEs442 2,782 — 3,224 
Derivatives - VOEs— 464 — 464 
Total assets measured at fair value$74,351 $231,300 $619 $306,270 
Derivatives - VIEs$1,649 $5,244 $— $6,893 
Derivatives - VOEs— 664 — 664 
Total liabilities measured at fair value$1,649 $5,908 $— $7,557 
 Level 1 Level 2 Level 3 NAV Expedient Total
December 31, 2018:         
  Investments - VIEs$22,149
 $187,626
 $8,065
 $—
 $217,840
  Investments - VOEs68,063
 65,485
 308
 —
 133,856
  Derivatives - VIEs1,486
 1,924
 —
 —
 3,410
  Derivatives - VOEs124
 3,692
 —
 —
 3,816
Total assets measured at fair value$91,822
 $258,727
 $8,373
 $—
 $358,922
          
Derivatives - VIEs$72
 $3,819
 $—
 $—
 $3,891
  Derivatives - VOEs197
 3,633
 —
 —
 3,830
Total liabilities measured at fair value$269
 $7,452
 $—
 $—
 $7,721
          
December 31, 2017:         
  Investments - VIEs$1,053,824
 $133,796
 $2,205
 $10
 $1,189,835
  Investments - VOEs5,491
 50,898
 59
 —
 56,448
  Derivatives - VIEs252
 30,384
 —
 —
 30,636
  Derivatives - VOEs49
 251
 —
 —
 300
Total assets measured at fair value$1,059,616
 $215,329
 $2,264
 $10
 $1,277,219
          
Short equities - VIEs$669,258
 $—
 $—
 $—
 $669,258
Derivatives - VIEs421
 21,820
 —
 —
 22,241
  Derivatives - VOEs12
 619
 —
 —
 631
Total liabilities measured at fair value$669,691
 $22,439
 $—
 $—
 $692,130

See Note 109 for a description of the fair value methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy.


The change in carrying value associated with Level 3 financial instruments carried at fair value within consolidated company-sponsored investment funds was as follows:
 December 31,
 2018 2017 December 31,
 (in thousands) 20212020
     (in thousands)
Balance as of beginning of period $2,264
 $5,741
Balance as of beginning of period$619 $854 
Deconsolidated funds —
 (7,267)Deconsolidated funds(717)(135)
Transfers in 259
 480
Transfers (out) inTransfers (out) in(205)552 
Purchases 9,354
 6,127
Purchases3,675 259 
Sales (3,086) (3,120)Sales(7)(571)
Realized (losses) gains, net (100) 2
Unrealized (losses) gains, net (331) 286
Realized gains (losses), netRealized gains (losses), net3 (99)
Unrealized (losses), netUnrealized (losses), net(11)(242)
Accrued discounts 13
 15
Accrued discounts— 1 
Balance as of end of period $8,373
 $2,264
Balance as of end of period$3,357 $619 
The Level 3 securities primarily consist of corporate bonds that are vendor priced with no ratings available, bank loans, non-agency collateralized mortgage obligations and asset-backed securities.

Transfers into and out of all levels of the fair value hierarchy are reflected at end-of-period fair values. Realized and unrealized gains and losses on Level 3 financial instruments are recorded in investment gains and losses in the consolidated statements of income.

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Derivative Instruments
As of December 31, 20182021 and 2017,2020, the VIEs held $0.5$12.5 million and $8.4$3.7 million (net), respectively, of futures, forwards, options and swaps within their portfolios. For the years ended December 31, 20182021 and 2017, respectively2020, we recognized $1.5$0.7 million and $21.5$0.6 million of gainslosses, respectively, on these derivatives. These gains and losses are recognized in investment gains (losses) in the consolidated statements of income.
As of December 31, 20182021 and 2017,2020, the VIEs held $0.9 million and $0.2$0.5 million, respectively, of cash collateral payable to trade counterparties. This obligation to return cash is reported in the liabilities of consolidated company-sponsored investment funds in our consolidated statements of financial condition.
As of December 31, 20182021 and 2017,2020, the VIEs delivered $0.8$1.8 million and $2.9$4.2 million, respectively, of cash collateral into brokerage accounts. The VIEs report this cash collateral in the consolidated company-sponsored investment funds cash and cash equivalents in our consolidated statements of financial condition.
As of December 31, 20182021 and 2017,2020, the VOEs held $14.0 thousandzero and $0.3$0.2 million (net), respectively, of futures, forwards, options and swaps within their portfolios. For the years ended December 31, 20182021 and 2017,2020, we recognized a gainzero and $0.2 million of $1.9 million and a loss of $0.4 million,gains, respectively, on these derivatives. These gains and losses are recognized in the investment gains (losses) in the consolidated statements of income.
As of December 31, 2018,2021 and 2020, the VOEs held $0.2 million ofno cash collateral payable to trade counterparties. This obligation to return cash is reported in the liabilities of consolidated company-sponsored investment funds in our consolidated statements of financial condition.
As of December 31, 20182021 and 2017,2020, the VOEs delivered $0.5 millionzero and $0.2$0.1 million, respectively, of cash collateral into brokerage accounts. The VOEs report this cash collateral in the consolidated company-sponsored investment funds cash and cash equivalents in our consolidated statements of financial condition

condition.
Offsetting Assets and Liabilities
Offsetting of derivative assets of consolidated company-sponsored investment funds as of December 31, 20182021 and 20172020 was as follows:
 Gross Amounts of Recognized AssetsGross Amounts Offset in the Statement of Financial ConditionNet Amounts of Assets Presented in the Statement of Financial ConditionFinancial
Instruments		Cash Collateral
Received		Net
Amount
 (in thousands)
December 31, 2021:
Derivatives - VIEs$5,887 $— $5,887 $— $(904)$4,983 
Derivatives - VOEs$— $— $— $— $— $— 
December 31, 2020:
Derivatives - VIEs$3,224 $— $3,224 $— $(513)$2,711 
Derivatives - VOEs$464 $— $464 $— $— $464 

 Gross Amounts of Recognized Assets Gross Amounts Offset in the Statement of Financial Condition Net Amounts of Assets Presented in the Statement of Financial Condition 
Financial
Instruments
 
Cash Collateral
Received
 
Net
Amount
 (in thousands)
December 31, 2018:           
Derivatives - VIEs$3,410
 $—
 $3,410
 $—
 $(856) $2,554
Derivatives - VOEs$3,816
 $—
 $3,816
 $—
 $(225) $3,591
December 31, 2017:           
Derivatives - VIEs$30,636
 $—
 $30,636
 $—
 $(194) $30,442
Derivatives - VOEs$300
 $—
 $300
 $—
 $(37) $263

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Offsetting of derivative liabilities of consolidated company-sponsored investment funds as of December 31, 20182021 and 20172020 was as follows:
Gross
 Amounts of Recognized Liabilities		Gross Amounts Offset in the Statement of Financial ConditionNet Amounts
of Liabilities Presented in the Statement of Financial Condition		Financial
Instruments		Cash Collateral
Pledged		Net
Amount
Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Statement of Financial Condition Net Amounts of Liabilities Presented in the Statement of Financial Condition 
Financial
Instruments
 
Cash Collateral
Pledged
 Net Amount (in thousands)
(in thousands)
December 31, 2018:           
December 31, 2021:December 31, 2021:
Derivatives - VIEs$3,891
 $—
 $3,891
 $—
 $(829) $3,062
Derivatives - VIEs$18,342 $— $18,342 $— $(1,824)$16,518 
Derivatives - VOEs$3,830
 $—
 $3,830
 $—
 $(547) $3,283
Derivatives - VOEs$— $— $— $— $— $— 
December 31, 2017:           
December 31, 2020:December 31, 2020:
Derivatives - VIEs$22,241
 $—
 $22,241
 $—
 $(2,884) $19,357
Derivatives - VIEs$6,893 $— $6,893 $— $(4,201)$2,692 
Derivatives - VOEs$631
 $—
 $631
 $—
 $(228) $403
Derivatives - VOEs$664 $— $664 $— $(138)$526 
Cash collateral, whether pledged or received on derivative instruments, is not considered material and, accordingly, is not disclosed by counterparty.
Non-Consolidated VIEs
As of December 31, 2018,2021, the net assets of company-sponsored investment products that are non-consolidated VIEs are approximately $44.3 billion, and$68.9 billion; our maximum risk of loss is our investment of $5.7$8.8 million in these VIEs and our advisory fee receivablesfees receivable from these VIEs which are not material.$75.7 million. As of December 31, 2020, the net assets of company-sponsored investment products that were non-consolidated VIEs was approximately $73.4 billion; our maximum risk of loss was our investment of $7.1 million in these VIEs and our advisory fees receivable from these VIEs were $77.6 million.
16. Net Capital
SCB LLC is registered as a broker-dealer under the Exchange Act and is subject to the minimum net capital requirements imposed by the U.S. Securities and Exchange Commission ("SEC"). SCB LLC computes its net capital under the alternative method permitted by the applicable rule, which requires that minimum net capital, as defined, equals the greater of $1 million or two percent of aggregate debit items arising from customer transactions, as defined. As of December 31, 2018,2021, SCB LLC had net capital of $258.4$307.6 million, which was $223.5$267.5 million in excess of the minimum net capital requirement of $34.9$40.1 million. Advances, dividend payments and other equity withdrawals by SCB LLC are restricted by regulations imposed by the SEC, the Financial Industry Regulatory Authority, Inc., and other securities agencies.

Our U.K.-based broker-dealer is a member of the London Stock Exchange. As of December 31, 2018,2021, it was subject to financial resources requirements of $23.2$47.4 million imposed by the Financial Conduct Authority of the United Kingdom and had aggregate regulatory financial resources of $56.4$61.1 million, an excess of $33.2 million.$13.7 million over the required level.
AllianceBernstein Investments, Inc., another one of our subsidiaries and the distributor and/or underwriter for certain company-sponsored mutual funds, is registered as a broker-dealer under the Exchange Act and is subject to the minimum net capital requirements imposed by the SEC. As of December 31, 2018,2021, it had net capital of $23.9$26.5 million, which was $23.6$26.2 million in excess of its required net capital of $0.3 million.
Many of our subsidiaries around the world are subject to minimum net capital requirements by the local laws and regulations to which they are subject. As of December 31, 2018,2021, each of our subsidiaries subject to a minimum net capital requirement satisfied the applicable requirement.
17. Counterparty Risk
Customer Activities
In the normal course of business, brokerage activities involve the execution, settlement and financing of various customer securities trades, which may expose our broker-dealer operations to off-balance sheet risk by requiring us to purchase or sell securities at prevailing market prices in the event the customer is unable to fulfill its contractual obligations.
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Our customer securities activities are transacted on either a cash or margin basis. In margin transactions, we extend credit to the customer, subject to various regulatory and internal margin requirements. These transactions are collateralized by cash or securities in the customer’s account. In connection with these activities, we may execute and clear customer transactions involving the sale of securities not yet purchased. We seek to control the risks associated with margin transactions by requiring customers to maintain collateral in compliance with the aforementioned regulatory and internal guidelines. We monitor required margin levels daily and, pursuant to such guidelines, require customers to deposit additional collateral, or reduce positions, when necessary. A majority of our customer margin accounts are managed on a discretionary basis whereby we maintain control over the investment activity in the accounts. For these discretionary accounts, our margin deficiency exposure is minimized throughby our maintaining a diversified portfolio of securities in the accounts, and by virtue of our discretionary authority and our U.S-basedU.S.-based broker-dealer's role as custodian.
In accordance with industry practice, we record customer transactions on a settlement date basis, which generally is two business days after trade date for our U.K. and U.S. operations. We are exposed to risk of loss on these transactions in the event of the customer’s or broker’s inability to meet the terms of their contracts, in which case we may have to purchase or sell financial instruments at prevailing market prices. The risks we assume in connection with these transactions are not expected to have a material adverse effect on our financial condition or results of operations.
Other Counterparties
We are engaged in various brokerage activities on behalf of clients, in which counterparties primarily include broker-dealers, banks and other financial institutions. In the event these counterparties do not fulfill their obligations, we may be exposed to loss. The risk of default depends on the creditworthiness of the counterparty or issuer of the instrument. It is our policy to review, as necessary, each counterparty’s creditworthiness.
In connection with security borrowing and lending arrangements, we enter into collateralized agreements, which may result in potential loss in the event the counterparty to a transaction is unable to fulfill its contractual obligations. Security borrowing arrangements require us to deposit cash collateral with the lender. With respect to security lending arrangements, we receive collateral in the form of cash in amounts generally in excess of the market value of the securities loaned. We attempt to mitigate credit risk associated with these activities by establishing credit limits for each broker and monitoring these limits on a daily basis. Additionally, security borrowing and lending collateral is marked to market on a daily basis, and additional collateral is deposited by or returned to us as necessary.
We enter into various futures, forwards, options and swaps primarily to economically hedge certain of our seed money investments. We may be exposed to credit losses in the event of nonperformance by counterparties to these derivative financial instruments. See Note 8,7, Derivative Instruments for further discussion.

18. Qualified Employee Benefit Plans
We maintain a qualified profit sharing plan covering U.S. employees and certain foreign employees. Employer contributions are discretionary and generally limited to the maximum amount deductible for federal income tax purposes. Aggregate contributions for 2018, 2017were $16.5 million, $15.6 million and 2016 were $15.0 million, $14.4 million for 2021, 2020 and $14.3 million,2019, respectively.
We maintain several defined contribution plans for foreign employees working for our subsidiaries in the United Kingdom, Australia, Japan and other locations outside the United States. Employer contributions generally are consistent with regulatory requirements and tax limits. Defined contribution expense for foreign entities was $7.1$9.8 million, $6.8$8.4 million and $6.8$7.7 million in 2018, 20172021, 2020 and 2016,2019, respectively.
We maintain a qualified, noncontributory, defined benefit retirement plan (“Retirement Plan”) covering current and former employees who were employed by AB in the United States prior to October 2, 2000. Benefits are based on years of credited service, average final base salary (as defined in the Retirement Plan) and primary Social Security benefits. Service and compensation after December 31, 2008 are not taken into account in determining participants’ retirement benefits.
Our policy is to satisfy our funding obligation for each year in an amount not less than the minimum required by the Employee Retirement Income Security Act of 1974, as amended, and not greater than the maximum amount we can deduct for federal income tax purposes. We contributed $5.0 milliondid not make a contribution to the Retirement Plan during 2018.2021. We do not currently estimateanticipate that we will contribute $4.0 million to the Retirement Plan during 2019.2022. Contribution estimates, which are subject to change, are based on regulatory requirements, future market conditions and assumptions used for actuarial computations of the Retirement Plan’s obligations and assets. Management, at the present time, has not determined the amount, if any, of additional future contributions that may be required.
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The Retirement Plan’s projected benefit obligation, fair value of plan assets and funded status (amounts recognized in the consolidated statements of financial condition) were as follows:
Years Ended December 31,Years Ended December 31
2018 201720212020
(in thousands)(in thousands)
Change in projected benefit obligation:   Change in projected benefit obligation:
Projected benefit obligation at beginning of year$125,200
 $111,315
Projected benefit obligation at beginning of year$151,124 $136,113 
Interest cost4,771
 4,999
Interest cost3,794 4,443 
Plan settlementsPlan settlements(5,803)— 
Actuarial (gain) loss(9,918) 12,617
Actuarial (gain) loss(4,447)16,131 
Benefits paid(3,820) (3,731)Benefits paid(2,806)(5,563)
Projected benefit obligation at end of year116,233
 125,200
Projected benefit obligation at end of year141,862 151,124 
Change in plan assets:   Change in plan assets:
Plan assets at fair value at beginning of year100,706
 86,699
Plan assets at fair value at beginning of year125,022 114,080 
Actual return on plan assets(3,302) 13,738
Actual return on plan assets14,526 16,505 
Employer contribution5,000
 4,000
Employer contribution— — 
Plan settlementsPlan settlements(5,803)— 
Benefits paid(3,820) (3,731)Benefits paid(2,806)(5,563)
Plan assets at fair value at end of year98,584
 100,706
Plan assets at fair value at end of year130,939 125,022 
Funded status$(17,649) $(24,494)Funded status$(10,923)$(26,102)
Effective December 31, 2015, the Retirement Plan was amended to change the actuarial basis used for converting a life annuity benefit to optional forms of payment and converting benefits payable at age 65 to earlier commencement dates. This prior service cost will be amortized over future years.

The amounts recognized in other comprehensive income (loss) for the Retirement Plan for 2018, 20172021, 2020 and 20162019 were as follows:
202120202019
(in thousands)
Unrecognized net gain (loss) from experience different from that assumed and effects of changes and assumptions$15,858 $(4,089)$(7,934)
Prior service cost24 24 24 
15,882 (4,065)(7,910)
Income tax (expense) benefit(87)(216)312 
Other comprehensive income (loss)$15,795 $(4,281)$(7,598)
 2018 2017 2016
 (in thousands)
Unrecognized net gain (loss) from experience different from that assumed and effects of changes and assumptions$1,870
 $(3,043) $(3,115)
Prior service cost24
 24
 93
 1,894
 (3,019) (3,022)
Income tax expense(207) (49) (10)
Other comprehensive income (loss)$1,687
 $(3,068) $(3,032)
The gain of $1.7$15.8 million recognized in 20182021 was primarily due to actual earnings exceeding expected earnings on plan assets ($8.2 million), changes in the discount rate and lump sum interest rates of ($5.6 million), settlement loss recognized of ($2.0 million) and the recognized actuarial loss of ($1.5 million), offset by changes in the census data ($1.0 million) and changes in the mortality assumption ($0.2 million). The loss of $4.3 million recognized in 2020 was primarily due to changes in the discount rate and lump sum interest rates ($16.7 million), offset by actual earnings exceeding expected earnings on plan assets ($10.4 million), changes in the mortality assumption ($1.0 million), the recognized actuarial loss ($1.4 million) and changes in the census data ($0.4 million). The loss of $7.6 million recognized in 2019 was primarily was due to changes in the discount rate and lump sum interest rates ($9.7 million), the recognized actuarial loss ($1.1 million) and changes in the mortality assumption ($0.421.7 million), offset by actual earnings exceeding expected earnings on plan assets ($9.211.3 million) and, changes in the census datamortality assumption ($0.2 million). The loss of $3.1 million recognized in 2017 primarily was due to changes in the discount rate and lump sum interest rates ($11.9 million) and changes in the census data ($1.4 million), offset by actual earnings exceeding expected earnings on plan assets ($8.51.2 million), the recognized actuarial loss ($1.1 million) and changes in the mortality assumptioncensus data ($0.70.1 million). The loss

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Table of $3.0 million recognized in 2016 primarily was due to expected earnings on plan assets exceeding actual earnings ($1.8 million) and changes in the discount rate and lump sum interest rates ($3.5 million), offset by changes in the mortality assumption ($1.7 million).Contents
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Foreign retirement plans and an individual's retirement plan maintained by AB are not material to AB's consolidated financial statements. As such, disclosure for these plans is not necessary. The reconciliation of the 20182021 amounts recognized in other comprehensive income for the Retirement Plan as compared to the consolidated statement of comprehensive income ("OCI Statement") is as follows:
Retirement Plan Retired Individual Plan Foreign Retirement Plans OCI StatementRetirement PlanRetired Individual PlanForeign Retirement PlansOCI
Statement
(in thousands)(in thousands)
Recognized actuarial gain (loss)$1,870
 $53
 $(337) $1,586
Recognized actuarial gain (loss)$15,858 $16 $(131)$15,743 
Amortization of prior service cost24
 —
 —
 24
Amortization of prior service cost24 — — 24 
Changes in employee benefit related items1,894
 53
 (337) 1,610
Changes in employee benefit related items15,882 16 (131)15,767 
Income tax (expense) benefit(207) (2) 70
 (139)Income tax (expense) benefit(87)(1)29 (59)
Employee benefit related items, net of tax$1,687
 $51
 $(267) $1,471
Employee benefit related items, net of tax$15,795 $15 $(102)$15,708 
The amounts included in accumulated other comprehensive income (loss) for the Retirement Plan as of December 31, 20182021 and 20172020 were as follows:
2018 201720212020
(in thousands)(in thousands)
Unrecognized net loss from experience different from that assumed and effects of changes and assumptions$(47,603) $(49,473)Unrecognized net loss from experience different from that assumed and effects of changes and assumptions$(43,768)$(59,625)
Prior service cost(755) (779)Prior service cost(683)(707)
(48,358) (50,252)(44,451)(60,332)
Income tax benefit201
 408
Income tax benefit210 296 
Accumulated other comprehensive loss$(48,157) $(49,844)Accumulated other comprehensive loss$(44,241)$(60,036)
The amortization period over which we are amortizing the loss for the Retirement Plan from accumulated other comprehensive income is 31.628.7 years. The estimated prior service cost and amortization of loss for the Retirement Plan that will be amortized from accumulated other comprehensive income over the next year are $24 thousand$24,000 and $1.1$1.5 million, respectively.
The accumulated benefit obligation for the plan was $116.2$141.9 million and $125.2$151.1 million as of December 31, 20182021 and 2017,2020, respectively.

The discount rates used to determine benefit obligations as of December 31, 20182021 and 20172020 (measurement dates) were 4.40%2.90% and 3.90%2.55%, respectively.
Benefit payments are expected to be paid as follows (in thousands):
2022$8,817 
20237,630 
20247,460 
20259,642 
20268,787 
2027 - 203145,873 

2019$7,309
20206,138
20216,126
20227,942
20236,473
2024-202840,196
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Net expense under the Retirement Plan consisted of:
Year Ended December 31,Years Ended December 31
2018 2017 2016202120202019
(in thousands)(in thousands)
Interest cost on projected benefit obligations$4,771
 $4,999
 $4,972
Interest cost on projected benefit obligations$3,794 $4,443 $4,944 
Expected return on plan assets(5,893) (5,261) (5,407)Expected return on plan assets(6,351)(6,084)(5,639)
Amortization of prior service cost24
 24
 24
Amortization of prior service cost24 24 24 
Settlement loss recognizedSettlement loss recognized2— — 
Recognized actuarial loss1,146
 1,097
 959
Recognized actuarial loss1,447 1,386 1,146 
Net pension expense$48
 $859
 $548
Net pension expense$938 $(231)$475 
Actuarial computations used to determine net periodic costs were made utilizing the following weighted-average assumptions:
Years Ended December 31,Years Ended December 31
2018 2017 2016202120202019
Discount rate on benefit obligations3.90% 4.55% 4.75%Discount rate on benefit obligations2.55 %3.35 %4.40 %
Expected long-term rate of return on plan assets5.75% 6.00% 6.50%Expected long-term rate of return on plan assets5.25 %5.50 %5.75 %
In developing the expected long-term rate of return on plan assets of 5.75%5.25%, management considered the historical returns and future expectations for returns for each asset category, as well as the target asset allocation of the portfolio. The expected long-term rate of return on assets is based on weighted average expected returns for each asset class.
As of December 31, 2018,2021, the mortality projection assumption has been updated to use the generational MP-2018MP-2021 improvement scale. Previously, mortality was projected generationally using the MP-2017MP-2020 improvements scale. The base mortality assumption remains atused is the RP-2014 white-collarSociety of Actuaries Pri-2012 base mortality table for males and females adjusted back to 2006private sector plans, with a white-collar adjustment, using the MP-2014 improvement scale.contingent annuitant table for beneficiaries of deceased participants.
The Internal Revenue Service (“IRS”) recently updated the mortality tables used to determine lump sums. For fiscal year-end 2018,2021, we reflected the most recently published IRS table for lump sums assumed to be paid in 2019.2022. We projected future mortality for lump sums assumed to be paid after 20192022 using the current base mortality tables (RP-2014 backed off to 2006) and projection scalesscale of MP-2018.MP-2021.
The Retirement Plan’s asset allocation percentages consisted of:
December 31,Years Ended December 31
2018 201720212020
Equity43% 66%Equity52 %55 %
Debt securities41
 15
Debt securities38 36 
Other16
 19
Other10 9 
100% 100%100 %100 %
The guidelines regarding allocation of assets are formalized in the Investment Policy Statement adopted by the Investment Committee for the Retirement Plan. The objective of the investment program is to enhance the portfolio of the Retirement Plan through total return (capital appreciation and income), thereby promoting the ongoing ability of the plan to meet future liabilities and obligations, while minimizing the need for additional contributions. The guidelines specify an allocation weighting of 10% to 35% for liability hedging investments (target of 20%24%), 15% to 40% for return seeking investments (target of 27%), 5% to 35% for risk mitigating investments (target of 14%10%), 10% to 35% for diversifying investments (target of 21%) and 5% to 35% for dynamic asset allocation (target of 18%). Investments in mutual funds, hedge funds (and other alternative investments), and other commingled investment vehicles are permitted under the guidelines. Investments are permitted in overlay portfolios (regulated mutual funds), which are designed to manage short-term portfolio risk and mitigate the effect of extreme outcomes by varying the asset allocation of a portfolio.
See Note 10,9, Fair Value for a description of how we measure the fair value of our plan assets.
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The valuation of our Retirement Plan assets by pricing observability levels as of December 31, 20182021 and 20172020 was as follows (in thousands):
Level 1Level 2Level 3Total
December 31, 2021
Cash$47 $— $— $47 
U.S. Treasury Strips— 32,355 — 32,355 
Fixed income mutual funds17,477 — 17,477 
Equity mutual funds43,786 — 43,786 
Equity securities14,801 — — 14,801 
Total assets in the fair value hierarchy76,111 32,355 — 108,466 
Investments measured at net assets value— — 22,473 
Investments at fair value$76,111 $32,355 $— $130,939 
 Level 1 Level 2 Level 3 Total
December 31, 2018       
Cash$238
 $—
 $—
 $238
U.S. Treasury Strips—
 22,355
 —
 22,355
Fixed income mutual funds18,362
 —
 —
 18,362
Equity mutual fund26,508
 —
 —
 26,508
Equity securities8,970
 —
 —
 8,970
Total assets in the fair value hierarchy54,078
 22,355
 —
 76,433
Investments measured at net assets value—
 —
 —
 22,151
Investments at fair value$54,078
 $22,355
 $—
 $98,584

Level 1Level 2Level 3Total
December 31, 2017       
December 31, 2020December 31, 2020
Cash$91
 $—
 $—
 $91
Cash$458 $— $— $458 
U.S. Treasury StripsU.S. Treasury Strips— 26,599 — 26,599 
Fixed income mutual funds23,696
 —
 —
 23,696
Fixed income mutual funds17,834 — — 17,834 
Equity mutual fund29,352
 —
 —
 29,352
Equity mutual fundsEquity mutual funds44,020 — — 44,020 
Equity securities25,191
 —
 —
 25,191
Equity securities14,376 — — 14,376 
Total assets in the fair value hierarchy78,330
 —
 —
 78,330
Total assets in the fair value hierarchy76,688 26,599 — 103,287 
Investments measured at net assets value—
 —
 —
 22,376
Investments measured at net assets value— — — 21,735 
Investments at fair value$78,330
 $—
 $—
 $100,706
Investments at fair value$76,688 $26,599 $— $125,022 
During 2018,2021 and 2020, the Retirement Plan's investments include the following:
•U.S. Treasury strips;strips, (zero-coupon bonds);
•two fixed income mutual funds, which seek to generate income consistent with preservation of capital. One fund invests in a portfolio of investment-grade securities primarily in the U.S. with additional non-U.S. securities. The second fund invests in inflation-indexed fixed-income securities and similar bonds issued by non-U.S. governments and various commodities;
•six equity mutual funds in 2021 as compared to seven equity mutual funds in 2020; four of which focus on U.S.-based equity securities of various capitalization sizes ranging from small to large capitalizations and diversified portfolios within those capitalization ranges; and in 2021 two funds as compared to three funds whichin 2020, that focus on non-U.S. based equity securities of various capitalization sizes ranging from small to large capitalizations and diversified portfolios therein across non-U.S. regions; and
•one separate equity and fixed income mutual funds,fund, which seekseeks to moderate the volatility of equity and fixed income oriented asset allocation over the long term, as part of the overall asset allocation managed by AB;the Plan to deliver a long-term premium to the S&P 500 with greater consistency across a range of market environments.

•a multi-style, multi-cap integrated portfolio adding U.S. equity diversification to its value and growth equity selections, designed to deliver a long-term premium to the S&P 500 with greater consistency across a range of market environments; and
•investments measured at net asset value, including three hedge funds whichthat seek to provide attractive risk-adjusted returns over full market cycles with less volatility than the broad equity markets by allocating all or substantially all of their assets among portfolio managers through portfolio funds that employ a broad range of investment strategies; one private investment trust whichthat invests primarily in equity securities of non-U.S. companies located in emerging market countries; and one collective investment trust whichthat invests in U.S. and non-U.S. equities of various capitalization sizes.
During 2017, the Retirement Plan’s investments included the following:
two fixed income mutual funds, each of which seeks to generate income consistent with preservation of capital. One mutual fund invests in a portfolio of fixed income securities of U.S. and non-U.S. companies and U.S. and non-U.S. government securities and supranational entities, including lower-rated securities, while the second fund invests in a broad range of fixed income securities in both developed and emerging markets with a range of maturities from short- to long-term;
three equity mutual funds, one of which invests primarily in a diversified portfolio of equity securities of small- to mid-capitalization U.S. companies, the second which invests primarily in a diversified portfolio of equity securities with relatively smaller capitalizations as compared to the overall U.S market, and the third which primarily invests in equity securities of small capitalization companies or other securities or instruments with similar economic characteristics;
separate equity and fixed income mutual funds, which seek to moderate the volatility of equity and fixed income oriented asset allocation over the long term, as part of the overall asset allocation managed by AB;
a multi-style, multi-cap integrated portfolio adding U.S. equity diversification to its value and growth equity selections, designed to deliver a long-term premium to the S&P 500 with greater consistency across a range of market environments; and
investments measured at net asset value, including two equity private investment trusts, one of which invests primarily in equity securities of non-U.S. companies located in emerging market countries, and the other of which invests in equity securities of established non-U.S. companies located in the countries comprising the MSCI EAFE Index, plus Canada; and a hedge fund that seeks to provide attractive risk-adjusted returns over full market cycles with less volatility than the broad equity markets by allocating all or substantially all of its assets among portfolio managers through portfolio funds that employ a broad range of investment strategies.
19. Long-term Incentive Compensation Plans
We maintain an unfunded, non-qualified incentive compensation program known as the AllianceBernstein Incentive Compensation Award Program (“Incentive Compensation Program”), under which annual awards may be granted to eligible employees. See Note 2, "Summary of Significant Accounting Policies – Long-Term Incentive Compensation Plans" for a discussion of the award provisions.
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Under the Incentive Compensation Program, we made awards in 2018, 20172021, 2020 and 20162019 aggregating $183.3$184.1 million, $168.2$177.4 million and $157.8$175.5 million, respectively. The amounts charged to employee compensation and benefits for the years ended December 31, 2018, 20172021, 2020 and 20162019 were $161.0$173.4 million, $172.8$176.8 million and $153.8$177.2 million, respectively.
Effective as of September 30, 2017, we established the AB 2017 Long Term Incentive Plan (“2017 Plan”), which was adopted at a special meeting of AB Holding Unitholders held on September 29, 2017. The following forms of awards may be granted to employees and Eligible Directors under the 2017 Plan: (i) restricted AB Holding Units or phantom restricted AB Holding Units (a “phantom” award is a contractual right to receive AB Holding Units at a later date or upon a specified event); (ii) options to buy AB Holding Units; and (iii) other AB Holding Unit-based awards (including, without limitation, AB Holding Unit appreciation rights and performance awards). The purpose of the 2017 Plan is to promote the interest of AB by: (i) attracting and retaining talented officers, employees and directors, (ii) motivating such officers, employees and directors by means of performance-related incentives to achieve longer-range business and operational goals, (iii) enabling such officers, employees and directors to participate in the long-term growth and financial success of AB, and (iv) aligning the interests of such officers, employees and directors with those of AB Holding Unitholders. The 2017 Plan will expire on September 30, 2027, and no awards under the 2017 Plan will be made after that date. Under the 2017 Plan, the aggregate number of AB Holding Units with respect to which awards may be granted is 60 million, including no more than 30 million newly-issued AB Holding Units.

As of December 31, 2018,2021, no options to buy AB Holding Units had been granted and 14,352,74028,109,084 AB Holding Units, net of withholding tax requirements, were subject to other AB Holding Unit awards made under the 2017 Plan or the AllianceBernstein 2010 Long Term Incentive Plan, as amended, an equity compensation plan with similar terms that was canceled on September 30, 2017. AB Holding Unit-based awards (including options) in respect of 45,647,26031,890,916 AB Holding Units were available for grant under the 2017 Plan as of December 31, 2018.2021.
As of December 31, 2020, no options to buy AB Holding Units had been granted and 24,444,406 AB Holding Units, net of withholding tax requirements, were subject to other AB Holding Unit awards made under the 2017 Plan or the AllianceBernstein 2010 Long Term Incentive Plan, as amended, an equity compensation plan with similar terms that was canceled on September 30, 2017. AB Holding Unit-based awards (including options) in respect of 35,555,594 AB Holding Units were available for grant under the 2017 Plan as of December 31, 2020.
Option Awards
We did not grant any options to buy AB Holding Units during 20182021, 2020 or 2017.2019. Historically, options granted to employees generally were exercisable at a rate of 20% of the AB Holding Units subject to such options on each of the first five anniversary dates of the date of grant; options granted to Eligible Directors generally were exercisable at a rate of 33.3% of the AB Holding Units subject to such options on each of the first three anniversary dates of the date of grant. During 2016, we granted 54,546 options to Eligible Directors with a grant date value of $2.75, determined using the Black-Scholes option valuation model with the following assumptions:
2016
Risk-free interest rate1.3%
Expected cash distribution yield7.1%
Historical volatility factor31.0%
Expected term6.0 years
The risk-free interest rate is based on the U.S. Treasury Bond yield for the appropriate expected term. The expected cash distribution yield is based on the average of our distribution yield over the past four quarters. The historical volatility factor represents our historical Unit price over the same period as our expected term. Due to a lack of sufficient historical data, we have chosen to use the simplified method to calculate the expected term of options.
The option-related activity in our equity compensation plans during 20182021 is as follows:
Options to Buy
AB Holding
Units		Weighted
Average
Exercise 
Price
Per Option		Weighted
Average
Remaining
Contractual
Term (Years)		Aggregate
Intrinsic
Value (in thousands)
Options to Buy
AB Holding
Units
 
Weighted
Average
Exercise 
Price
Per Option
 
Weighted
Average
Remaining
Contractual
Term (Years)
 
Aggregate
Intrinsic
Value
Outstanding as of December 31, 20173,082,470
 $52.37
 1.2  
Outstanding as of December 31, 2020Outstanding as of December 31, 2020148,985 $23.61 1.2
Granted—
 —
  Granted— — 
Exercised(889,119) 18.66
  Exercised(143,211)23.75 
Forfeited—
 —
  Forfeited— — 
Expired(1,522,108) 85.09
  Expired— — 
Outstanding as of December 31, 2018671,243
 22.83
 1.6 $3.0
Exercisable as of December 31, 2018634,877
 22.84
 1.5 2.8
Vested or expected to vest as of December 31, 2018671,243
 22.83
 1.6 3.0
Outstanding as of December 31, 2021Outstanding as of December 31, 20215,774 $20.12 0.33$165.8 
Exercisable as of December 31, 2021Exercisable as of December 31, 20215,774 $20.12 0.33$165.8 
Vested or expected to vest as of December 31, 2021Vested or expected to vest as of December 31, 20215,774 $20.12 0.33$165.8 
The total intrinsic value of options exercised during 2018, 20172021, 2020 and 20162019 was $8.9$2.2 million, $8.3 million$32,368 and $2.1$3.7 million, respectively.
Under the fair value method, compensation expense is measured at the grant date based on the estimated fair value of the options awarded (determined using the Black-Scholes option valuation model) and is recognized over the requiredrequisite service period. We recorded no compensation expense related to option grants in 2018 and 20172021, 2020 or 2019 as no options were granted. We recorded compensation expense relating to option grants of $0.2 million in 2016. As of December 31, 2018,2021, there was no compensation expense related to unvested option grants not yet recognized in the consolidated statement of income.


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Restricted AB Holding Unit Awards
In 2018, 20172021, 2020 and 2016,2019, the Board granted restricted AB Holding Unit awards to Eligible Directors. These AB Holding Units give the Eligible Directors, in most instances, all the rights of other AB Holding Unitholders, subject to such restrictions on transfer as the Board may impose.
We awarded 53,720, 50,252 and 46,382award restricted AB Holding Units respectively, in 2018, 2017 and 2016 with grant date fair values per restricted AB Holding Unit of $26.90 in 2018, $21.25 and $24.80 in 2017 and $22.64 in 2016. All of the restricted AB Holding Unitsthat vest ratably over three or four years. We fully expensed these awards on each grant date, as there is no service requirement. We recorded compensation expense relatingGrant details related to these awards of $1.4 million, $1.1 million and $1.1 million, respectively, for the years ended December 31, 2018, 2017 and 2016.is as follows:
On April 28, 2017, the Board removed Peter S. Kraus from his position as Chairman of the Board and Chief Executive Officer ("CEO"). As part of his June 2012 employment agreement he was granted 2.7 million restricted AB Holding Units, which were scheduled to vest ratably over the employment term (January 3, 2014 through January 2, 2019). Under US GAAP, the compensation expense for the AB Holding Unit award under the June 2012 employment agreement of $33.1 million (based on the $12.17 grant date AB Holding Unit price) was being amortized on a straight-line basis over 6.5 years, beginning on the grant date. As a result of his removal we accelerated the vesting on his remaining two tranches and delivered the AB Holding Units to him in June 2017. We recorded compensation expense relating to Mr. Kraus's restricted AB Holding Unit grants of $10.2 million and $5.1 million for the years ended December 31, 2017 and 2016, respectively.
202120202019
Restricted Units Awarded35,358 50,232 45,420 
Weighted Average Grant Date Fair Value$44.29 $23.69 $29.33 
Compensation Expense (in millions)$1.6 $1.2 $1.3 
On April 28, 2017, Seth P. Bernstein was appointed President and CEO to provide servicesChief Executive Officer ("CEO") pursuant to an employment agreement, effective May 1, 2017. In connection with the commencement of his employment, Mr. Bernstein was granted restricted AB Holding Units with a grant date fair value of $3.5 million (164,706 AB Holding Units based on the $21.25 grant date AB Holding Unit price on May 16, 2017) and a four-year service requirement. Mr. Bernstein's restricted AB Holding Units vestvested ratably on each of the first four anniversaries of his commencement date and will bewere delivered to Mr. Bernstein as soon as administratively feasible afteron or about May 1, 2021,2021. These AB Holding Units were subject to accelerated vesting clauses in his employment agreement. We recorded compensationCompensation expense relatingrelated to Mr. Bernstein's restricted AB Holding Unit grants ofgrant was $0.3 million for the year ended December 31, 2021 and $0.9 million and $0.6 million for each of the years ended December 31, 20182020 and 2017,2019, respectively. Mr. Bernstein's award granted in connection with his appointment as CEO was fully amortized as of December 31, 2021.
Under the Incentive Compensation Program, we awarded 6.53.5 million restricted AB Holding Units in 20182021 (which included 6.23.3 million restricted AB Holding Units in December for the 20182021 year-end awards as well as 0.2 million additional restricted AB Holding Units granted earlier during the year relating to the 2020 year-end awards), with grant date fair values per restricted AB Holding Unit ranging between $32.10 to $50.94.
We awarded 5.3 million restricted AB Holding Units in 2020 (which included 5.0 million restricted AB Holding Units in December for the 2020 year-end awards as well as 0.3 million additional restricted AB Holding Units granted earlier during the year relating to the 20172019 year-end awards), 6.3with grant date fair values per restricted AB Holding Unit ranging between $28.75 to $32.10.
We awarded 5.8 million restricted AB Holding Units in 20172019 (which included 6.15.4 million restricted AB Holding Units in December for the 20172019 year-end awards as well as 0.20.4 million additional restricted AB Holding Units granted earlier during the year relatingrelated to the 20162018 year-end awards), and 6.1 million restricted AB Holding Units in 2016 (substantially all of which were restricted AB Holding Units granted in December for the 2016 year-end awards as well as minimal restricted AB Holding Units granted earlier during the year relating to the 2015 year-end awards). Thewith grant date fair values per restricted AB Holding Unit rangedranging between $24.95 and $26.69 in 2018, $23.00 and $24.95 in 2017, and were $19.45 and $23.20 in 2016. to $30.01.
Restricted AB Holding Units awarded under the Incentive Compensation Program in 2020 and years prior generally vestvested in 25% increments on December 1st1st of each of the four years immediately following the year in which the award was granted. Awards granted in 2021 and subsequent years generally will vest in 33.3% increments on December 1st of each of the three years immediately following the year in which the award is granted.
We also award restricted AB Holding Units in connection with certain employment and separation agreements, as well as relocation-related performance awards, with vesting schedules ranging between two and five years. Grant details related to these awards is as follows:
202120202019
(in millions excluding share prices)
Restricted Units Awarded3.4 0.4 1.9 
Grant Date Fair Value Range$29.06 - $53.86$18.80 - $35.42$27.32 - $30.85
Compensation Expense$40.9 $32.1 $36.7 
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The fair value of the restricted AB Holding Units is amortized over the requiredrequisite service period as employee compensation expense. We awarded 2.6 million, 1.8 million and 1.0 million restricted AB Holding Units in 2018, 2017 and 2016, respectively, with grant date fair values per restricted AB Holding Unit ranging between $25.05 and $30.25 in 2018, $21.25 and $25.65 in 2017 and $18.67 and $25.34 in 2016. We recorded compensation expense relating to restricted AB Holding Unit grants in connection with certain employment and separation agreements of $32.2 million, $21.6 million and $11.2 million, respectively, for the years ended December 31, 2018, 2017 and 2016.

Changes in unvested restricted AB Holding Units during 20182021 are as follows:
AB Holding
Units		Weighted Average
Grant Date Fair
Value per AB Holding
Unit
AB Holding
Units
 
Weighted Average
Grant Date Fair
Value per AB Holding
Unit
Unvested as of December 31, 201719,072,910
 $23.82
Unvested as of December 31, 2020Unvested as of December 31, 202018,864,574 $28.58 
Granted9,123,321
 26.64
Granted6,984,456 39.68 
Vested(7,128,611) 23.72
Vested(7,108,465)27.99 
Forfeited(853,231) 24.02
Forfeited(609,825)28.99 
Unvested as of December 31, 201820,214,389
 25.12
Unvested as of December 31, 2021Unvested as of December 31, 202118,130,740 $33.98 
The total grant date fair value of restricted AB Holding Units that vested during 2018, 2017 and 2016 was $169.1$199.0 million, $177.0$155.0 million and $159.4$201.4 million during 2021, 2020 and 2019, respectively. As of December 31, 2018,2021, the 20,214,38918,130,740 unvested restricted AB Holding Units consist of 15,380,54911,548,053 restricted AB Holding Units that do not have a service requirement and have been fully expensed on the grant date and 4,883,8406,582,687 restricted AB Holding Units that have a service requirement and will be expensed over the required service period. As of December 31, 2018,2021, there was $87.1$137.2 million of compensation expense related to unvested restricted AB Holding Unit awards granted and not yet recognized in the consolidated statement of income. We expect to recognize the expense over a weighted average period of 3.66.2 years.
20. Units Outstanding
Changes in AB Units outstanding for the years ended December 31, 20182021 and 20172020 were as follows:
20212020
Outstanding as of January 1,270,509,658 270,380,314 
Options exercised143,211 5,182 
Units issued3,917,437 3,363,132 
Units retired(1)
(3,117,263)(3,238,970)
Outstanding as of December 31,271,453,043 270,509,658 
 2018 2017
Outstanding as of January 1,268,659,333
 268,893,534
Options exercised889,119
 1,179,860
Units issued6,153,320
 5,546,695
Units retired(1)
(6,851,496) (6,960,756)
Outstanding as of December 31,268,850,276
 268,659,333
(1)During 20182021 and 2017,2020, we purchased 5,3465,400 and 44,0001,500 AB Units, respectively, in private transactions and retired them.
21. Income Taxes
AB is a private partnership for federal income tax purposes and, accordingly, is not subject to federal or state corporate income taxes. However, AB is subject to a 4.0% New York City unincorporated business tax (“UBT”). Domestic corporate subsidiaries of AB, which are subject to federal, state and local income taxes, generally are included in the filing of a consolidated federal income tax return with separate state and local income tax returns being filed. Foreign corporate subsidiaries are generally subject to taxes in the foreign jurisdictions where they are located.
In order to preserve AB’s status as a private partnership for federal income tax purposes, AB Units must not be considered publicly traded. The AB Partnership Agreement provides that all transfers of AB Units must be approved by AXA Equitable Life Insurance Company (a subsidiary of EQH “AXA Equitable”) and the General Partner; AXA EquitableEQH and the General Partner approve only those transfers permitted pursuant to one or more of the safe harbors contained in the relevant Treasury regulations. If AB Units were considered readily tradable, AB’s net income would be subject to federal and state corporate income tax, significantly reducing its quarterly distributions to AB Holding. Furthermore, should AB enter into a substantial new line of business, AB Holding, by virtue of its ownership of AB, would lose its status as a “grandfathered” publicly-traded partnership and would become subject to corporate income tax, which would reduce materially AB Holding’s net income and its quarterly distributions to AB Holding Unitholders.
The 2017 Tax Act was enacted in the U.S. on December 22, 2017. The 2017 Tax Act reduced the U.S. federal corporate income tax rate to 21% from 35%, required companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred and created new taxes on certain foreign-sourced earnings. In 2017, we recorded provisional amounts for certain enactment-date effects of the 2017 Tax Act by applying the guidance in SAB 118 because we had not yet completed our enactment-date accounting for these effects. In 2018, we completed our assessment and recorded adjustments to our initial provisional amounts.

The provisions of the 2017 Tax Act that had a significant impact on our income tax balance sheet and income statement accounts are as follows:

We recorded an approximate $22.5 million charge to our 2017 income tax expense to account for deemed repatriation of foreign earnings. As a result of our completed analysis in 2018, we recorded an additional $1.1 million to our income tax expense. Management elected to pay the federal transition tax over a period of eight years as permitted by the 2017 Tax Act. During 2018, we paid $1.8 million of the $23.6 million transition tax. The remaining $21.8 million is recorded to income tax payable on our consolidated statement of financial condition and will be paid out over the next seven years.

We recorded an approximate $3.3 million charge to our 2017 income tax expense to reduce our net deferred tax assets due to the lower corporate income tax rate. We completed our analysis in 2018 and determined no adjustment was necessary.

We analyzed the impact
2021 Annual Report115
Table of the tax on global intangible low-taxed income (“GILTI”) and elected to treat GILTI as a period cost. In 2018, management's estimate of tax on GILTI income was fully offset by available foreign tax credits. As a result of our completed analysis in 2018, there was no period cost required.
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Part II
We analyzed the impact of the base erosion anti-abuse tax (“BEAT”), which taxes certain payments between a U.S. corporation and its foreign subsidiaries. Based on current guidance in 2018, it was determined that we will not be subject to BEAT.

We recorded a $2.3 million charge to our 2018 income tax expense as a result of our evaluation of the reversal of the indefinite reinvestments assertions for certain non-U.S. corporate subsidiaries.

Earnings before income taxes and income tax expense consist of:
Years Ended December 31,Years Ended December 31
2018 2017 2016202120202019
(in thousands)(in thousands)
Earnings before income taxes:     Earnings before income taxes:
United States$672,221
 $634,515
 $614,261
United States$1,007,847 $743,687 $697,501 
Foreign153,093
 139,395
 108,904
Foreign208,615 163,749 125,936 
Total$825,314
 $773,910
 $723,165
Total$1,216,462 $907,436 $823,437 
Income tax expense:     Income tax expense:
Partnership UBT$5,251
 $2,986
 $5,363
Partnership UBT$6,951 $3,356 $9,196 
Corporate subsidiaries:     Corporate subsidiaries:
Federal(4,030) 18,079
 291
Federal750 1,495 (943)
State and local2,888
 803
 1,064
State and local956 904 975 
Foreign36,529
 29,365
 28,158
Foreign58,080 44,086 32,290 
Current tax expense40,638
 51,233
 34,876
Current tax expense66,737 49,841 41,518 
Deferred tax (benefit)5,178
 1,877
 (6,557)
Deferred taxDeferred tax(4,009)(4,188)236 
Income tax expense$45,816
 $53,110
 $28,319
Income tax expense$62,728 $45,653 $41,754 
The principal reasons for the difference between the effective tax rates and the UBT statutory tax rate of 4.0% are as follows:
Years Ended December 31,Years Ended December 31
2018 2017 2016202120202019
(in thousands)(in thousands)
UBT statutory rate$33,012
 4.0 % $30,956
 4.0 % $28,927
 4.0 %UBT statutory rate$48,659 4.0 %$36,297 4.0 %$32,937 4.0 %
Corporate subsidiaries' federal, state, and local1,522
 0.2
 2,558
 0.3
 5,820
 0.8
Corporate subsidiaries' federal, state, and local1,322 0.2 2,025 0.2 4,000 0.5 
Foreign subsidiaries taxed at different rates30,689
 3.7
 25,406
 3.3
 23,646
 3.3
Foreign subsidiaries taxed at different rates43,019 3.5 33,969 3.7 26,719 3.3 
2017 Tax Act1,155
 0.1
 25,846
 3.3
 —
 —
FIN 48 release(5,177) (0.6) (3,318) (0.4) —
 —
FIN 48 reserve (release)FIN 48 reserve (release)— — (1,886)(0.2)2,765 0.3 
UBT business allocation percentage rate change2,657
 0.3
 —
 —
 —
 —
UBT business allocation percentage rate change23 — 8 — (79)— 
Deferred tax and payable write-offs2,932
 0.4
 (9,542) (1.2) (14,883) (2.1)Deferred tax and payable write-offs1,003 0.1 (887)(0.1)314 — 
Foreign outside basis difference2,273
 0.3
 —
 —
 —
 —
Foreign outside basis difference1,492 0.1 3 — 155 — 
Amended 2017 returnAmended 2017 return— — (221)— (3,853)(0.5)
Effect of ASC 740 adjustments, miscellaneous taxes, and other(2,521) (0.3) 1,903
 0.2
 2,254
 0.3
Effect of ASC 740 adjustments, miscellaneous taxes, and other1,799 0.1 2,654 0.3 2,305 0.3 
Income not taxable resulting from use of UBT business apportionment factors and effect of compensation charge(20,726) (2.5) (20,699) (2.6) (17,445) (2.4)Income not taxable resulting from use of UBT business apportionment factors and effect of compensation charge(34,589)(2.8)(26,309)(2.9)(23,509)(2.8)
Income tax expense and effective tax rate$45,816
 5.6
 $53,110
 6.9
 $28,319
 3.9
Income tax expense and effective tax rate$62,728 5.2 $45,653 5.0 $41,754 5.1 
We recognize the effects of a tax position in the financial statements only if, as of the reporting date, it is “more likely than not” to be sustained based on its technical merits and their applicability to the facts and circumstances of the tax position. In making this assessment, we assume that the taxing authority will examine the tax position and have full knowledge of all relevant information.
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A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
Years Ended December 31,Years Ended December 31
2018 2017 2016202120202019
(in thousands)(in thousands)
Balance as of beginning of period$8,478
 $12,596
 $12,004
Balance as of beginning of period$2,838 $5,706 $3,893 
Additions for prior year tax positions—
 —
 —
Additions for prior year tax positions— — 1,813 
Reductions for prior year tax positions—
 (1,849) —
Reductions for prior year tax positions— — — 
Additions for current year tax positions—
 —
 592
Additions for current year tax positions— — — 
Reductions for current year tax positions—
 —
 —
Reductions for current year tax positions— — — 
Reductions related to closed years/settlements with tax authorities(4,585) (2,269) —
Reductions related to closed years/settlements with tax authorities— (2,868)— 
Balance as of end of period$3,893
 $8,478
 $12,596
Balance as of end of period$2,838 $2,838 $5,706 
The amount of unrecognized tax benefits as of December 31, 2018, 20172021, 2020, and 2016,2019, when recognized, is recorded as a reduction to income tax expense and reduces the company’s effective tax rate.
Interest and penalties, if any, relating to tax positions are recorded in income tax expense on the consolidated statements of income. There was no interest expense recorded in 2021. The total amount of interest expense (credit) recorded in income tax expense (credit) during 2018, 20172020 and 20162019 was, $0.1 million, $0.3$(0.4) million and $0.7 million, respectively. The total amountAs of December 31, 2021 and 2020, there is no accrued interest recorded on the consolidated statements of financial conditioncondition. The total amount of accrued interest recorded as of December 31, 2018, 2017 and 2016 is $0.3 million, $0.7 million and $1.7 million, respectively.2019 was $1.1 million. There were no accrued penalties as of December 31, 2018, 2017 or 2016.2021 and 2020. There were $0.2 million of penalties accrued as of December 31, 2019.
Generally, the company is no longer subject to U.S. federal, state or local income tax examinations by tax authorities for any year prior to 2014, except as set forth below.2017.
During the thirdfourth quarter of 2018,2020, the City of New York notified us of an examination of AB's UBT returns for the years 20132017 through 2016.2019. The examination is ongoing.
As a result of the expiration of the statute of limitations on an acquisition goodwill reserve, the full gross unrecognized tax benefit of approximately $4.6 million was released. The company also released the full accrued interest amount of $0.6 million.

ongoing and no provision with respect to this examination has been recorded.
Currently, there are no income tax examinations at our significant non-U.S. subsidiaries. Years that remain open and may be subject to examination vary under local law and range from one to seven years.
At December 31, 2018,2021, it is not reasonably possible that any of our unrecognized tax benefits will change within the next twelve12 months due to completion of tax authority exams.
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Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The tax effect of significant items comprising the net deferred tax asset (liability) is as follows:
Years Ended December 31
20212020
(in thousands)
Deferred tax asset:
Differences between book and tax basis:
Benefits from net operating loss carryforwards$7,833 $7,112 
Long-term incentive compensation plans24,468 22,363 
Investment basis differences5,523 5,256 
Depreciation and amortization3,942 2,065 
Lease liability5,327 5,994 
Other, primarily accrued expenses deductible when paid4,917 4,737 
52,010 47,527 
Less: valuation allowance(3,828)(3,025)
Deferred tax asset48,182 44,502 
Deferred tax liability:  
Differences between book and tax basis:  
Intangible assets7,622 7,933 
Investment in foreign subsidiaries4,084 3,048 
Right-of-use asset4,490 4,975 
Other2,075 1,760 
Deferred tax liability18,271 17,716 
Net deferred tax asset$29,911 $26,786 
 December 31,
 2018 2017
 (in thousands)
Deferred tax asset:   
Differences between book and tax basis:   
Benefits from net operating loss carryforwards$2,518
 $3,405
Long-term incentive compensation plans22,342
 21,204
Investment basis differences3,606
 5,967
Depreciation and amortization1,248
 2,214
Other, primarily accrued expenses deductible when paid3,903
 3,601
 33,617
 36,391
Less: valuation allowance(490) (497)
Deferred tax asset33,127
 35,894
Deferred tax liability: 
  
Differences between book and tax basis: 
  
Intangible assets6,852
 6,286
Investment in foreign subsidiaries1,653
 —
Other1,758
 1,007
Deferred tax liability10,263
 7,293
Net deferred tax asset$22,864
 $28,601
Valuation allowances of $0.5$3.8 million and $3.0 million were established as of both December 31, 20182021 and 2017,2020, respectively, primarily due to realizing certain deferred compensation awards and the uncertainty ofsignificant negative evidence that net operating loss ("NOL") carryforwards will not be utilized, given the future losses expected to be incurred by the applicable subsidiaries. We had NOL carryforwards at December 31, 20182021 and December 31, 20172020 of approximately $32.4$55.1 million and $38.7$51.0 million, respectively, in certain foreign locations with an indefinite expiration.expiration period.
The net deferred tax asset is included in other assets on thein our consolidated statement of financial condition. Management has determined that realization ofbelieves there will be sufficient future taxable income to realize the tax benefits related to the remaining net deferred tax asset is more likely thanassets recognized that are not based on anticipated future taxable income.subject to valuation allowances.
The company provides income taxes on the unremitted earnings of non-U.S. corporate subsidiaries except to the extent that such earnings are indefinitely reinvested outside the United States. As of December 31, 2018, $28.62021, $29.6 million of undistributed earnings of non-U.S. corporate subsidiaries were permanentlyindefinitely invested outside the U.S. At existing applicable income tax rates, additional taxes of approximately $6.0$6.4 million would need to be providedpaid if such earnings are remitted.

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22. Business Segment Information
Management has assessed the requirements of ASC 280, Segment Reporting, and determined that, because we utilize a consolidated approach to assess performance and allocate resources, we have only one operating segment. Enterprise-wide disclosures as of and for the years ended December 31, 2018, 20172021, 2020 and 20162019 were as follows:
Services
Net revenues derived from our investment management, research and related services were as follows:
Years Ended December 31
202120202019
(in thousands)
Institutions$587,017 $512,914 $480,144 
Retail2,223,829 1,811,948 1,619,832 
Private Wealth Management1,126,142 882,672 904,505 
Bernstein Research Services452,017 459,744 407,911 
Other56,283 56,908 163,245 
Total revenues4,445,288 3,724,186 3,575,637 
Less: Interest expense3,686 15,650 57,205 
Net revenues$4,441,602 $3,708,536 $3,518,432 
 Years Ended December 31,
 2018 2017 2016
 (in thousands)
Institutions$479,068
 $477,140
 $422,060
Retail1,494,445
 1,423,890
 1,261,907
Private Wealth Management883,234
 787,362
 711,599
Bernstein Research Services439,432
 449,919
 479,875
Other123,581
 185,375
 162,461
Total revenues3,419,760
 3,323,686
 3,037,902
Less: Interest expense52,399
 25,165
 9,123
Net revenues$3,367,361
 $3,298,521
 $3,028,779
Our AllianceBernstein Global High Yield Portfolio, an open-endNo individual fund incorporated in Luxembourg (ACATEUH: LX), generated approximately 10%, 11% andaccounted for more than 10% of our investment advisory and service fees and 10%, 12% and 10% of our net revenues during 2018, 20172021, 2020 and 2016, respectively.2019.
Geographic Information
Net revenues and long-lived assets, related to our U.S. and international operations, as of and for the years ended December 31, were as follows:
2018 2017 2016202120202019
(in thousands)(in thousands)
Net revenues:     Net revenues:
United States$1,940,267
 $1,958,844
 $1,901,571
United States$2,403,870 $1,959,528 $1,975,105 
International1,427,094
 1,339,677
 1,127,208
International2,037,732 1,749,008 1,543,327 
Total$3,367,361
 $3,298,521
 $3,028,779
Total$4,441,602 $3,708,536 $3,518,432 
Long-lived assets: 
  
  
Long-lived assets:   
United States$3,262,722
 $3,313,958
  
United States$3,331,572 $3,285,761 
International56,069
 46,221
  
International45,796 53,453 
Total$3,318,791
 $3,360,179
  
Total$3,377,368 $3,339,214 
Major Customers
Company-sponsored mutual funds are distributed to individual investors through broker-dealers, insurance sales representatives, banks, registered investment advisers, financial planners and other financial intermediaries. Certain subsidiaries of AXA and EQH, including AXA Advisors, LLC, have entered into selected dealer agreementsHSBC (not affiliated with AllianceBernstein Investments and have beenAB) was responsible for 1%approximately 4%, 1%6% and 2%14% of our open-end mutual fund sales in 2018, 20172021, 2020 and 2016,2019, respectively. HSBC was responsible for approximately 7%, 9% and 12% of our open-end mutual fund sales in 2018, 2017 and 2016, respectively. Neither AXA, EQH nor HSBC is not under any obligation to sell a specific amount of AB Fund shares and each also sells shares of mutual funds that it sponsors and that are sponsored by unaffiliated organizations.shares.
AXA, EQH and the general and separate accounts of AXA Equitable Financial Life Insurance Company ("Equitable Financial") (including investments by the separate accounts of AXA Equitable Financial in the funding vehicle EQ Advisors Trust) accounted for approximately 5%3% of our total revenues for each of the years ended December 31, 2018, 20172021, 2020 and 2016.2019. No single institutional client other than AXA, EQH and their respectiveits subsidiaries accounted for more than 1%2% of our total revenues for the years ended December 31, 2018, 20172021, 2020 and 2016.2019.

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23. Related Party Transactions
Mutual Funds
We provide investment management, distribution, shareholder, administrative and brokerage services to individual investors by means of retail mutual funds sponsored by our company, our subsidiaries and our affiliated joint venture companies. We provide substantially all of these services under contracts that specify the services to be provided and the fees to be charged. The contracts are subject to annual review and approval by each mutual fund’s board of directors or trustees and, in certain circumstances, by the mutual fund’s shareholders.
Revenues for services provided or related to the mutual funds are as follows:
Years Ended December 31
202120202019
(in thousands)
Investment advisory and services fees$1,644,757 $1,368,484 $1,275,677 
Distribution revenues637,076 516,336 441,437 
Shareholder servicing fees85,745 79,394 75,122 
Other revenues8,364 8,314 7,303 
Bernstein Research Services2 3 2 
$2,375,944 $1,972,531 $1,799,541 
 Years Ended December 31,
 2018 2017 2016
 (in thousands)
Investment advisory and services fees$1,207,086
 $1,148,467
 $998,892
Distribution revenues403,965
 397,674
 371,604
Shareholder servicing fees74,019
 73,310
 76,201
Other revenues7,262
 6,942
 6,253
Bernstein Research Services33
 13
 5
AXA, EQH and theirits Subsidiaries
We provide investment management and certain administration services to AXA, EQH and theirits subsidiaries. In addition, AXA, EQH and theirits subsidiaries distribute company-sponsored mutual funds, for which they receive commissions and distribution payments. Sales of company-sponsored mutual funds through AXA, EQH and their subsidiaries aggregated approximately $0.4 billion, $0.5 billion and $0.8 billion for the years ended December 31, 2018, 2017 and 2016, respectively. Also, we are covered by various insurance policies maintained by EQH and its subsidiaries and we pay fees for technology and other services provided by AXA, EQH and theirits subsidiaries. Additionally, see Note 12, Debt,for disclosures related to our credit facility with EQH.
Aggregate amounts included in the consolidated financial statements for transactions
with AXA, EQH and theirits subsidiaries, as of and for the years ended December 31, are as follows:
EQH
202120202019
(in thousands)
Revenues:
Investment advisory and services fees$133,074 $115,901 $109,316 
Other revenues675 1,330 1,013 
$133,749 $117,231 $110,329 
Expenses:   
Commissions and distribution payments to financial intermediaries$4,550 $3,952 $3,956 
General and administrative2,373 2,281 2,466 
Other3,953 5,463 3,644 
$10,876 $11,696 $10,066 
Balance Sheet:  
Institutional investment advisory and services fees receivable$8,607 $8,343 
Prepaid expenses545 404 
Other due to EQH and its subsidiaries(1,534)(1,280)
EQH Facility(755,000)(675,000)
$(747,382)$(667,533)

 2018 2017 2016
 (in thousands)
Revenues:     
Investment advisory and services fees$169,157
 $157,430
 $150,016
Bernstein Research Services134
 403
 583
Distribution revenues13,897
 13,387
 12,145
Other revenues1,729
 1,130
 969
 $184,917
 $172,350
 $163,713
Expenses: 
  
  
Commissions and distribution payments to financial intermediaries$21,567
 $19,202
 $16,077
General and administrative15,006
 12,428
 16,315
Other1,485
 1,696
 1,653
 $38,058
 $33,326
 $34,045
Balance Sheet: 
  
  
Institutional investment advisory and services fees receivable$17,612
 $13,806
  
Prepaid expenses364
 2,905
  
Other due to AXA, EQH and their subsidiaries(7,259) (19,666)  
 $10,717
 $(2,955)  

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Other Related Parties
The consolidated statements of financial condition include a net receivable from AB Holding as a result of cash transactions for fees and expense reimbursements. The net receivable balance included in the consolidated statements of financial condition as of December 31, 20182021 and 20172020 was $11.4$11.2 million and $11.1$10.2 million, respectively.
24. Acquisitions
Acquisitions are accounted for under ASC 805, Business Combinations.
On November 20, 2018, we made an offer to acquire 100% of the partnership interests in Autonomous Research ("Autonomous"), an institutional research firm. The acquisition is expected to close in the second quarter of 2019.
On September 23, 2016, we acquired a 100% ownership interest in Ramius Alternative Solutions LLC ("RASL"), a global alternative investment management business that, as of the acquisition date, had approximately $2.5 billion in AUM. RASL offers a range of customized alternative investment and advisory solutions to a global institutional client base. On the acquisition date, we made a cash payment of $20.5 million and recorded a contingent consideration payable of $11.9 million based on projected fee revenues over a five-year measurement period. The excess of the purchase price over the current fair value of identifiable net assets acquired resulted in the recognition of $21.9 million of goodwill. We recorded $10.0 million of finite-lived intangible assets relating to investment management contracts.
On June 20, 2014, we acquired an 81.7% ownership interest in CPH Capital Fondsmaeglerselskab A/S (“CPH”), a Danish asset management firm that managed approximately $3 billion in global core equity assets for institutional investors, for a cash payment of $64.4 million and a contingent consideration payable of $9.4 million based on projected assets under management levels over a three-year measurement period. The excess of the purchase price over the fair value of identifiable assets acquired resulted in the recognition of $58.1 million of goodwill. We recorded $24.1 million of finite-lived intangible assets relating to separately-managed account relationships and $3.5 million of indefinite-lived intangible assets relating to an acquired fund’s investment contract. We also recorded redeemable non-controlling interests of $16.5 million relating to the fair value of the portion of CPH we did not own. During 2018, 2017, and 2016, we purchased additional shares of CPH, bringing our ownership interest to 96.8% as of December 31, 2018.
The 2016 acquisition haas not had a significant impact on 2018, 2017 or 2016 revenues and earnings. As a result, we have not provided supplemental pro forma information.
25. Non-controlling Interests
Non-controlling interest in net income for the years ended December 31, 2018, 20172021, 2020 and 20162019 consisted of the following:
 2018 2017 2016
 (in thousands)
      
Non-redeemable non-controlling interests:     
    Consolidated company-sponsored investment funds(119) 9,353
 11,086
    Other188
 279
 312
Total non-redeemable non-controlling interest69
 9,632
 11,398
Redeemable non-controlling interests:     
    Consolidated company-sponsored investment funds21,841
 48,765
 10,090
Total non-controlling interest in net income (loss)$21,910
 $58,397
 $21,488


Non-redeemable non-controlling interest as of December 31, 2018 and 2017 consisted of the following:
 2018 2017
 (in thousands)
    
Consolidated company-sponsored investment funds$—
 $757
CPH949
 807
Total non-redeemable non-controlling interest$949
 $1,564

202120202019
(in thousands)
Non-redeemable non-controlling interest$100 $— $92 
Redeemable non-controlling interests:
    Consolidated company-sponsored investment funds5,011 (4,169)29,549 
Total non-controlling interest in net income (loss)$5,111 $(4,169)$29,641 
Redeemable non-controlling interest as of December 31, 20182021 and 20172020 consisted of the following:
20212020
(in thousands)
Consolidated company-sponsored investment funds$421,169 $102,359 
Total redeemable non-controlling interest$421,169 $102,359 
 2018 2017
 (in thousands)
    
Consolidated company-sponsored investment funds$145,921
 $596,223
CPH2,888
 5,364
Total redeemable non-controlling interest$148,809
 $601,587

26. Quarterly Financial Data (Unaudited)
 Quarters Ended 2018
 December 31 September 30 June 30 March 31
 (in thousands, except per unit amounts)
Net revenues$804,660
 $850,176
 $844,738
 $867,787
Net income attributable to AB Unitholders$188,053
 $203,674
 $181,665
 $184,196
Basic net income per AB Unit(1)
$0.70
 $0.75
 $0.66
 $0.68
Diluted net income per AB Unit(1)
$0.70
 $0.75
 $0.66
 $0.68
Cash distributions per AB Unit(2)(3)
$0.71
 $0.76
 $0.69
 $0.80
 Quarters Ended 2017
 December 31 September 30 June 30 March 31
 (in thousands, except per unit amounts)
Net revenues$919,141
 $812,150
 $802,313
 $764,917
Net income attributable to AB Unitholders$246,409
 $140,954
 $135,103
 $139,937
Basic net income per AB Unit(1)
$0.92
 $0.53
 $0.50
 $0.52
Diluted net income per AB Unit(1)
$0.92
 $0.52
 $0.50
 $0.51
Cash distributions per AB Unit(2)(3)
$0.91
 $0.58
 $0.56
 $0.52
(1)Basic and diluted net income per unit are computed independently for each of the periods presented. Accordingly, the sum of the quarterly net income per unit amounts may not agree to the total for the year.
(2)Declared and paid during the following quarter.
(3)Cash distributions reflect the impact of our non-GAAP adjustments.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Neither AB nor AB Holding had any changes in or disagreements with accountants in respect of accounting or financial disclosure.

Item 9A. Controls and Procedures

Disclosure Controls and Procedures

Each of AB Holding and AB maintains a system of disclosure controls and procedures that is designed to ensure that information required to be disclosed in our reports under the Exchange Act is (i) recorded, processed, summarized and reported in a timely manner, and (ii) accumulated and communicated to management, including the Chief Executive Officer (“CEO”) and the Chief Financial Officer (“CFO”), to permit timely decisions regarding our disclosure.

As of the end of the period covered by this report, management carried out an evaluation, under the supervision and with the participation of the CEO and the CFO, of the effectiveness of the design and operation of disclosure controls and procedures. Based on this evaluation, the CEO and the CFO concluded that the disclosure controls and procedures are effective.

Management’s Report on Internal Control Over Financial Reporting

Management acknowledges its responsibility for establishing and maintaining adequate internal control over financial reporting for each of AB Holding and AB.

Internal control over financial reporting is a process designed by, or under the supervision of, a company’s CEO and CFO, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America (“(“USGAAP” GAAP”) and includes those policies and procedures that:

•Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

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•Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with US GAAP and receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and

•Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.

All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those internal control systems determined to be effective can provide only reasonable assurance with respect to the reliability of financial statement preparation and presentation. Because of these inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness of internal control to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of AB Holding’s and AB’s internal control over financial reporting as of December 31, 2018.2021. In making its assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework(2013) (“ (“COSO criteria”criteria”).

Based on its assessment, management concluded that, as of December 31, 2018,2021, each of AB Holding and AB maintained effective internal control over financial reporting based on the COSO criteria.

PricewaterhouseCoopers LLP (PCAOB ID No. 238), the independent registered public accounting firm that audited the 20182021 financial statements included in this Form 10-K, has issued an attestation report on the effectiveness of each of AB Holding’s and AB’s internal control over financial reporting as of December 31, 2018. These2021. The reports pertaining to AB Holding and AB each can be found in Item 8.

of this Form 10-K.
Changes in Internal Control Over Financial Reporting

No changes in our internal control over financial reporting occurred during the fourth quarter of 20182021 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information
Both AB and AB Holding reported all information required to be disclosed on Form 8-K during the fourth quarter of 2018.2021.


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Item 10. Directors, Executive Officers and Corporate Governance

We use “Internet Site”Site” in Items 10 and 11 to refer to our company’s internet site, public website, www.alliancebernstein.com.

To contact our company’s Corporate Secretary, you may send an email to corporate_secretary@alliancebernstein.com or write to Corporate Secretary, AllianceBernstein L.P., 1345 Avenue of the Americas, New York, New York 10105.

General Partner

The Partnerships’ activities are managed and controlled by the General Partner. The Board of the General Partner acts as the Board of each of the Partnerships. Neither AB Unitholders nor AB Holding Unitholders have any rights to manage or control the Partnerships or to elect directors of the General Partner. The General Partner is a wholly-owned subsidiary of EQH.

The General Partner does not receive any compensation from the Partnerships for services rendered to them as their general partner. The General Partner holds a 1% general partnership interest in AB and 100,000 units of general partnership interest in AB Holding. Each general partnership unit in AB Holding is entitled to receive distributions equal to those received by each AB Holding Unit.

Similarly, the 1% general partnership interest in AB is entitled to receive distributions equal to those received by each AB Unit.
The General Partner is entitled to reimbursement by AB for any expenses it incurs in carrying out its activities as general partner of the Partnerships, including compensation paid by the General Partner to its directors and officers (to the extent such persons are not compensated directly by AB).

Board of Directors

Our Board currently consists of 1112 directors, including eight independent directors (including our Chair of the Board), our President and CEO, our Chairman of the Board, the Chairman of the Board of AXA, twoand three senior executives of EQH, and six independent directors.EQH. While we do not have a formal, written diversity policy in place, we believe that an effective board consists of a diverse group of individuals who collectively possess a variety of complementary skills, personal experiences and perspectives and who will work together to provide a board with the needed leadership and experience to successfully guide our company. As set forth in its charter, the Corporate Governance Committee of the Board (“(the “Governance Committee”Committee”) assists the Board in identifying and evaluating such candidates, determining Board composition, developing and monitoring a process to assess Board effectiveness, developing and implementing corporate governance guidelines, and reviewing programs relating to matters of corporate responsibility.

As we indicate below, our directors have a combined wealth of leadership experience derived from extensive service leading large, complex organizations in their roles as either senior executives or board members, as well as in government and academia. Each of our directors has the integrity, business judgment, collegiality and commitment that are among the essential characteristics for a member of our Board. Collectively, they have substantive knowledge and skills applicable to our business, including expertise in areas such as regulation; public accounting and financial reporting; finance; risk management; business development; operations; information technology;technology and security; strategic planning; management development, succession planning and compensation; corporate governance; public policy; and international matters.

As
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Table of February 13, 2019, our directors are as follows:Contents

Part III
Robert B. Zoellick
Board Committees
Mr. Zoellick, age 65, was appointed Non-Executive Chairman
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Executive
Committee		Audit and Risk
Committee		Corporate Governance
Committee		Compensation and
Workplace Practices
Committee
Joan Lamm-Tennant
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Seth P. BernsteinMM
Nella DomeniciM
Jeffrey Hurd
Daniel G. KayeM
Nick Lane
Kristi Matus
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Das NarayandasM
Mark PearsonMMM
Bertram L. ScottM
Charles Stonehill
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Todd WalthallM
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Chairperson
MMember
124AllianceBernstein
Table of the Board in April 2017. He also serves as a Senior Counselor of the Brunswick Group and on the boards of Temasek (a sovereign fund of Singapore) and Twitter. He is a member of the Swiss Re International Advisers and a Senior Fellow at The Belfer Center at Harvard University. From 2013 to 2016, Mr. Zoellick chaired Goldman Sachs Group’s International Advisors. From 2007 to 2012, he served as the 11th president of the World Bank, and from 2006 to 2007, was vice chairman, international, of Goldman Sachs Group and chairman of Goldman Sachs's International Advisors. Mr. Zoellick served as Deputy Secretary of the U.S. Department of State from 2005 to 2006, and was U.S. Trade Representative from 2001 to 2005. He also held several positions in the Reagan and George H. W. Bush administrations, serving as Under Secretary of State for Economic and Agricultural Affairs, Counselor of the State Department, White House Deputy Chief of Staff, Counselor to the Secretary of the Treasury, and Deputy Assistant Secretary of the Treasury for Financial Institutions Policy. From 1993 to 1997, Mr. Zoellick was executive vice president for Housing and Law at Fannie Mae. Mr. Zoellick has served on the Board of Directors of Temasek, since 2013, and as a Senior Fellow at The Belfer Center, since 2012.Contents

Part III

Board of Directors
Mr. Zoellick brings to the Board the in-depth knowledge of world affairs and financial services he has developed through his years of service with the U.S. government, as the former president of the World Bank and through the various positions he held with Goldman Sachs.
Seth P. Bernstein
Mr. Bernstein, age 57, was appointed President and Chief Executive Officer in April 2017 and began serving in this role on May 1, 2017. Prior to his appointment, he had a distinguished 32 year career at JPMorgan Chase, most recently as managing director and global head of Managed Solutions and Strategy at J.P. Morgan Asset Management. In this role, Mr. Bernstein was responsible for the management of all discretionary assets within the Private Banking client segment. Among other roles, he served as managing director and global head of Fixed Income and Currency for 10 years, concluding in 2012. Prior to that, Mr. Bernstein held the position of chief financial officer at JPMorgan Chase’s Investment Management and Private Banking division. Mr. Bernstein is a member of the Management Committee of EQH and the Board of Managers of Haverford College, Pennsylvania.

Mr. Bernstein brings to the Board the diverse financial services experience he developed through his extensive service at JPMorgan Chase.
Paul L. Audet
Mr. Audet, age 65, was appointed a director of AB in November 2017. He is the Co-Founder and Managing Member of Symmetrical Ventures LLC, a venture capital firm organized in 2015 and specializing in capital investments in start-ups and development stage companies. The firm evaluates investment opportunities in enterprises that aim to transform traditional business models through disruptive technologies. Previously, Mr. Audet served as a senior managing director at BlackRock, retiring in 2014 after a 35-year career in the financial services industry. During his BlackRock tenure, he held a number of executive leadership roles, including chief financial officer for nine years and head of the company’s U.S. active mutual funds, global real estate and global cash-management businesses. Mr. Audet’s affiliation with BlackRock started in 1994 when, as director of mergers and acquisitions for PNC Financial Services, he led the acquisition of BlackRock. He began his professional career in 1977 at PricewaterhouseCoopers and worked at PaineWebber and First Fidelity Bancorporation before moving on to BlackRock and PNC.

Mr. Audet brings to the Board the extensive financial services experience he has developed through his executive leadership roles at BlackRock.
Ramon de Oliveira
Mr. de Oliveira, age 64, was appointed a director of AB in April 2017. He has been a director of EQH since April 2018, AXA since 2010, and AXA Equitable and MONY Life Insurance Company of America since 2011. Additionally, he serves as Managing Director of the consulting firm Investment Audit Practice. Previously, Mr. de Oliveira held several executive positions at J.P. Morgan & Co. over the course of a 24-year tenure, including five years as chairman and chief executive officer of J.P. Morgan Investment Management. He was also a member of J.P. Morgan’s Management Committee from its inception in 1995.

Mr. de Oliveira brings to the Board the extensive buy-side and sell-side financial services experience he has developed through his executive leadership roles at JPMorgan Chase and Investment Audit Practice.
Denis Duverne
Mr. Duverne, age 65, was elected a director of AB in February 1996. On September 1, 2016, he was appointed Chairman of the Board of AXA after having served as Deputy CEO of AXA and a member of the Board of Directors of AXA since April 2010, when AXA changed its governance structure. Mr. Duverne was a member of the AXA Management Board from February 2003 through April 2010. He was CFO of AXA from May 2003 through December 2009. From January 2000 to May 2003, Mr. Duverne served as Group Executive Vice President-Finance, Control and Strategy. Mr. Duverne joined AXA as Senior Vice President in 1995.

Mr. Duverne brings to the Board the highly diverse experience he has attained from the many key roles he has served for AXA.

Barbara Fallon-Walsh
Ms. Fallon-Walsh, age 66, was appointed a director of AB in April 2017, and has been a director Banc of California since September 2018. She also has served as a director of MONY Life Insurance Company of America since 2012, and she previously served as a director of AXA Investment Managers, AXA IM and AXA Rosenberg Group. Before that, Ms. Fallon-Walsh held several executive positions at the Vanguard Group between 1995 and her retirement in 2012. She began her career and held various executive positions at Security Pacific Bank, which was acquired by Bank of America in 1992.

Ms. Fallon-Walsh brings to the Board the extensive financial services and insurance experience she has developed through her executive leadership roles at various AXA subsidiaries and the Vanguard Group.

Daniel G. Kaye
Mr. Kaye, age 64, was appointed a director of AB in April 2017. He has been a director of AXA Equitable Holdings since April 2018 and a director of AXA Equitable and MONY Life Insurance Company of America since 2015. From January 2013 to May 2014, he served as interim chief financial officer and treasurer of HealthEast Care System. Mr. Kaye retired from Ernst & Young in 2012 after a 35-year career, including 25 years as an audit partner. During his tenure at E&Y, Mr. Kaye served as the New England Area Managing Partner and the Midwest Area Managing Partner of Assurance. Mr. Kaye is a Certified Public Accountant and a National Association of Corporate Directors Board Leadership Fellow.

Mr. Kaye brings to the Board the extensive financial expertise he developed through his career at Ernst & Young and his directorships at EQH and certain of its subsidiaries.
Shelley B. Leibowitz
Ms. Leibowitz, age 57, was appointed a director of AB in November 2017. A leader among technology professionals, she currently serves as an advisor to senior executives and boards of directors in the areas of technology oversight and cybersecurity best practices. Prior to starting her current firm, SL Advisory, she served as group chief information officer for the World Bank, where she directed all aspects of technology (including strategy, innovation and support) across the bank’s more than 180 group offices based in Washington, DC, and around the world. Ms. Leibowitz has also served as chief information officer at Investment Risk Management, Morgan Stanley, Greenwich Capital Markets and other financial institutions. She currently sits on the board, as well as the Risk Oversight and Governance Committees, of E*TRADE Financial Corp. and serves as an Advisor to security intelligence firm Endgame. Ms. Leibowitz is a member of the Council on Foreign Relations, and on the Visiting Committee for the Center for Development Economics at Williams College.

Ms. Leibowitz brings to the Board her extensive experience in financial services as a seasoned chief information officer and her track record of strategy formulation and effective execution in the public and private sectors.
Anders Malmstrom
Mr. Malmstrom, age 51, was appointed a director of AB in April 2017. He is Senior Executive Vice President and Chief Financial Officer of AXA Equitable Holdings and AXA Equitable. Mr. Malmstrom is also a member of EQH's Management Committee. He joined AXA in 2012 from AXA Winterthur in Switzerland, where he was a member of the Executive Board and head of the Life Department. Before joining AXA Winterthur in 2009, Mr. Malmstrom was head of product management, Group Life Insurance, at Swiss Life in Zurich.

Mr. Malmstrom brings to the Board the significant experience in insurance and financial services he has developed in senior executive roles with various AXA entities and at Swiss Life.

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Joan Lamm-Tennant
Chair of the Board, Equitable Holdings
Committees:
Executive (Chair)
Age: 69
Director Since: 2021
Seth P. Bernstein
President and Chief Executive Officer, AllianceBernstein
Committees:
Executive
Governance
Age: 60
Director Since: 2017
Nella L. Domenici
Board member of Change Healthcare
Committees:
Audit
Age: 61
Director Since: 2020
Jeffrey Hurd
Chief Operating Officer, Equitable Holdings
Committees:
None
Age: 55
Director Since: 2019
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Daniel G. Kaye
Director, Equitable Holdings, Equitable Financial Life Insurance Company and Equitable Financial Life Insurance Company of America
Committees:
Compensation
Age: 67
Director Since: 2017
Nick Lane
President, Equitable Financial Life Insurance Company
Committees:
None
Age: 48
Director Since: 2019
Kristi Matus
Corporate Chief Financial Officer and Chief Operating Officer, Buckle
Committees:
Governance (Chair)
Compensation (Chair)
Age: 54
Director Since: 2019
Das Narayandas
Edsel Bryant Ford Professor of Business Administration, Harvard Business School
Committees:
Governance
Age: 61
Director Since: 2017
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Mark Pearson
President and Chief Executive Officer, Equitable Holdings
Committees:
Executive
Governance
Compensation
Age: 63
Director Since: 2011
Bertram L. Scott
Director, Equitable America and Equitable Holdings
Committees:
Compensation
Age: 70
Director Since: 2020
Charles Stonehill
Founding Partner, Green & Blue Advisors
Committees:
Audit (Chair)
Age: 63
Director Since: 2019
Todd Walthall
Executive Vice President of Enterprise Growth, UnitedHealth Group
Committees:
Audit
Age: 51
Director Since: 2021
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As of February 11, 2022, our directors are as follows:
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Background
•Ms. Lamm-Tennant was appointed Chair of AB in October 2021.
•She has served as Chair of the Board of EQH, Equitable Financial and Equitable America since October 2021, after having joined these boards in January 2020.
•She also serves on the Executive Committee, the Audit Committee, and the Finance and Risk Committee of EQH.
•Ms. Lamm-Tennant founded Blue Marble Microinsurance and served as its CEO from 2015 to 2020.
•She currently is executive advisor of Brewer Lane Ventures, having joined in 2021; she also serves on the boards of Ambac Financial Group, Hamilton Insurance Group and Element Fleet Financial Corp.
•Previously, Ms. Lamm-Tennant was Adjunct Professor, International Business at The Wharton School of the University of Pennsylvania from 2005 to 2016. Prior to or concurrently with her service at The Wharton School, Ms. Lamm-Tennant held various senior positions in the insurance industry, including with Marsh & McLennan Companies, Guy Carpenter and General Reinsurance Corporation.
Director Qualifications
Ms. Lamm-Tennant brings to the Board significant industry and academic experience, having held global business leadership roles and developed a distinguished career as a professor of finance and economics.
Joan Lamm-Tennant
Committees: Executive (Chair)
Age: 69
Director Since: 2021
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Background
•Mr. Bernstein was appointed President and Chief Executive Officer in April 2017 and began serving in this role on May 1, 2017.
•Serving as Senior Executive Vice President and Head of Investment Management and Research of EQH since April 2018.
•Previously, Mr. Bernstein had a distinguished 32-year career at JPMorgan Chase, most recently as managing director and global head of Managed Solutions and Strategy at J.P. Morgan Asset Management. In this role, Mr. Bernstein was responsible for the management of all discretionary assets within the Private Banking client segment.
•Among other roles, he served as Managing Director and Global Head of Fixed Income and Currency for 10 years, concluding in 2012.
•Mr. Bernstein held the position of Chief Financial Officer at JPMorgan Chase’s Investment Management and Private Banking division.
•Mr. Bernstein is a member of the Management Committee of EQH and the Board of Managers of Haverford College, Pennsylvania.
Director Qualifications
Mr. Bernstein brings to the Board the diverse financial services experience he developed through his extensive service at JPMorgan Chase and more recent career at AB.
Seth P. Bernstein
Committees: Executive, Governance
Age: 60
Director Since: 2017

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Background
•Ms. Domenici was appointed a director of AB in January 2020.
•During 2020 and 2021, she served as Chief Financial Officer and member of the Executive Committee at Dataminr, a leading high-growth AI company that is late-stage venture backed. In her senior executive role, Ms. Domenici was responsible for various strategic, operational and administrative functions.
•From 2015 to 2018, she served as Chief Financial Officer and member of the Operating Committee at Bridgewater Associates, a hedge fund with more than $160 billion in AUM.
•Prior thereto, she held various senior managerial, investment banking and strategic positions with firms including Citadel Investment Group, Credit Suisse and The Monitor Consulting Group. In addition, she is a proven entrepreneur, having founded a successful financial consulting firm that advised many family-owned, private equity, venture-backed and real estate companies.
•Ms. Domenici is a dedicated advocate and champion in the areas of education, healthcare and economic development. She co-founded the Excellent Schools of New Mexico, a leading non-profit organization that supports charter schools in underserved communities, and she serves on the board of Regis High School in New York City.
•She also serves on the advisory board of the International Folk-Art Market, which generates economic opportunities for folk artists worldwide, particularly women in developing countries.
•Ms. Domenici is a former member of the Bipartisan Policy Center Behavioral Health Integration Task Force, where she championed initiatives focused on mental illness, and of the board of One World Surgery, which provides access to quality surgical care globally.
Director Qualifications
Ms. Domenici brings to the Board her seasoned business acumen and her extensive global experience in strategic financial management, corporate strategy and operations.
Nella L. Domenici
Committees: Audit
Age: 61
Director Since: 2020
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Background
•Mr. Hurd was appointed a director of AB in April 2019.
•He has served as Chief Operating Officer of EQH, and as a member of the EQH Management Committee, since 2018.
•In this role, Mr. Hurd has strategic oversight for EQH’s Human Resources, Information Technology and Communications departments.
•He also is responsible for EQH’s Transformation Office, which encompasses key functional areas, including operations, procurement and corporate real estate, as well as EQH's Innovation and Design Office, which contemplates new ways or working.
•Mr. Hurd also has served as Chief Operating Officer of Equitable Financial since 2018.
•Prior to joining Equitable, Mr. Hurd served as Executive Vice President and Chief Operating Officer at American International Group, Inc. (“AIG”), where he amassed deep financial services industry experience during his 20-year tenure.
•While at AIG, Mr. Hurd served as Chief Human Resources Officer, Chief Administrative Officer, Deputy General Counsel and Head of Asset Management Restructuring.
Director Qualifications
Mr. Hurd brings to the Board his extensive experience in financial services and strategic insights as a senior executive at EQH and, formerly, at AIG.
Jeffrey J. Hurd
Committees: None
Age: 55
Director Since: 2019

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Background
•Mr. Kaye was appointed a director of AB in April 2017.
•He has been a director of EQH since May 2018 and a director of Equitable Financial and Equitable America since September 2015.
•Also, since May 2019, Mr. Kaye has been a director of CME Group, Inc. (NASDAQ: CME), where he serves as Chair of the Audit Committee.
•From January 2013 to May 2014, Mr. Kaye served as interim Chief Financial Officer and Treasurer of HealthEast Care System. He held this post after retiring in 2012 from his career at Ernst & Young LLP (“E&Y”).
•He served for 35 years at E&Y, including 25 years as an audit partner.
•During his tenure at E&Y, Mr. Kaye served as the New England Area Managing Partner and the Midwest Area Managing Partner of Assurance.
•Mr. Kaye is a Certified Public Accountant and a National Association of Corporate Directors Board Leadership Fellow.
Director Qualifications
Mr. Kaye brings to the Board the extensive financial expertise he developed through his career at E&Y and his directorships at CME, EQH and certain of EQH’s subsidiaries.
Daniel G. Kaye
Committees: Compensation
Age: 67
Director Since: 2017
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Background
•Mr. Lane was appointed a director of AB in April 2019.
•He has served as Head of Retirement, Wealth Management & Protection Solutions of EQH, and as a member of the EQH Management Committee, since May 2018.
•Also, since February 2019, Mr. Lane has served as President of Equitable Financial, leading that company’s Retirement, Wealth Management & Protection Solutions businesses and also leading its Marketing and Digital functions.
•Mr. Lane held various leadership roles with AXA and Equitable Financial since joining Equitable Financial (then a subsidiary of AXA) in 2005 as Senior Vice President of the Strategic Initiatives Group.
•He has served as President and CEO of AXA Japan, Senior Executive Director at Equitable Financial with responsibilities across commercial divisions, and Head of AXA Global Strategy overseeing AXA’s five-year strategic plan across 60 countries.
•Prior to joining Equitable Financial, Mr. Lane was a consultant for McKinsey & Company and a Captain in the United States Marine Corps.
Director Qualifications
Mr. Lane brings to the Board the outstanding experience and leadership qualities he has developed in various senior roles at AXA, EQH and various subsidiaries, and as an officer in the United States Marine Corps.
Nick Lane
Committees: None
Age: 48
Director Since: 2019


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Background
•Ms. Matus was appointed a director of AB in July 2019.
•She has been a director and member of various board committees at EQH and Equitable America since March 2019 and at Equitable Financial since September 2015.
•Ms. Matus joined Buckle, a tech-enabled financial services company, as Chief Financial Officer and Chief Operating Officer in October 2020 and has served as director and Audit Committee Chair of Cerence, Inc., a leading provider of automotive technology, since October 2019.
•Formerly, Ms. Matus had been Chair of the Compensation Committee at Tru Optik Data Corp., a digital media intelligence company, from September 2016 to October 2020, an executive advisor to Thomas H. Lee Partners L.P., a private equity firm, from October 2017 to October 2020, and a director and the Audit Committee Chair at Nextech Systems, a provider of healthcare technology solutions, from June 2019 to October 2020.
•Ms. Matus served as Executive Vice President and Chief Financial & Administrative Officer at athenahealth, Inc. (“athena”) from July 2014 to May 2016.
•Before joining athena, Ms. Matus served as Executive Vice President of Governance Services at Aetna, Inc. from February 2012 to July 2013.
•Previously, she held several leadership roles at United Services Automobile Association.
Director Qualifications
Ms. Matus brings to the Board her extensive experience in finance, risk management, compliance and audit functions, investor relations, human capital, real estate and IT, gained through her numerous leadership roles at technology, healthcare and insurance companies.
Kristi A. Matus
Committees: Governance (Chair), Compensation (Chair)
Age: 54
Director Since: 2019

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Background
•Mr. Narayandas age 58, was appointed a director of AB in November 2017.
•He is the Edsel Bryant Ford Professor of Business Administration at Harvard Business School ("HBS"(“HBS”), where he has been a faculty member since 1994.
•Mr. Narayandas also currently serves as the Senior Associate Dean and Chairman of Harvard Business School Publishing, and as the Senior Associate Dean of HBS External Relations.
•He previously served as the senior associate dean of HBS Executive Education, and as chair of the HBS Executive Education Advanced Management Program and the Program for Leadership Development, as well as course head of the required first-year marketing course in the MBA program.
•Mr. Narayandas has received the award for teaching excellence from the graduating HBS MBA class on several occasions. Other awards he has received include the Robert F. Greenhill Award for Outstanding Service to the HBS Community, the Charles M. Williams Award for Excellence in Teaching and the Apgar Award for Innovation in Teaching.
•His scholarship has focused on market-facing issues in traditional business-to-business marketing and professional service firms, including client management strategies, delivering service excellence, product-line management and channel design. Mr. Narayandas currently serves on the board of Titan Company Limited, a leading Indian brand marketer operating in the watch, jewelry, eyewear and wearable accessories segments.

Director Qualifications
Mr. Narayandas brings to the Board his wealth of experience at the highest level of academia in the U.S.
Mark PearsonDas Narayandas
Committees: Governance
Age: 61
Director Since: 2017


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Background
•Mr. Pearson age 60, was electedappointed a director of AB in February 2011. In January 2011, he became
•He has served as director of AXA Equitable Holdings and currently serves as President and Chief Executive Officer. CEO of EQH since May 2018.
•Mr. Pearson also serves as Chairman and CEO of AXA Equitable and as a member of EQH'sEQH’s Management Committee.
•Additionally, Mr. Pearson serves as CEO of Equitable Financial and Equitable America, and he has been a director of MONY Life Insurance Company of Americaboth companies since January 2011.

•Mr. Pearson joined AXA in 1995 when AXA acquired National Mutual Funds Management Limited (presently AXA Asia Pacific Holdings Limited) and was appointed Regional Chief Executive of AXA Asia Life in 2001.
•From 2008 to 2011, Mr. Pearson was named President and CEOChief Executive Officer of AXA Japan Holding Co., Ltd. (“AXA Japan”).
•Prior to joining AXA, Mr. Pearson spent approximately

20 years in the insurance sector, holding several senior management positions at Hill Samuel, Schroders, National Mutual Holdings and Friends Provident.
•Mr. Pearson is a Fellow of the Chartered Public Association of Certified Public Accountants and is a director of the American Council of Life Insurers.Accountants.

Director Qualifications
Mr. Pearson brings to the Board the diverse financial services experience he has developed through his service as an executive, including as CEO,Chief Executive Officer, with EQH, AXA Japan and other AXA affiliates.

Mark Pearson
Committees: Executive, Officers (other than Governance, Compensation
Age: 63
Director Since: 2011

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Background
•Mr. Bernstein)Scott was appointed a director of AB in September 2020.

Kate C. Burke, Head of Human Capital and Chief Talent Officer
Ms. Burke, age 47,•He has been Heada director and member of Human Capitalvarious board committees of EQH, Equitable America and Chief Talent OfficerEquitable Financial since February 2016. She joined our firmMarch 2019.
•He had previously served as director of Equitable America and Equitable Financial from May 2012 to May 2018.
•Mr. Scott currently is a member of the Board of the American Heart Association, having served as its chairman from 2019 to 2021.
•Mr. Scott retired in 2004 as an institutional equity salesperson with Bernstein Research Services and has held various managerial roles since that time. Prior to joining AB, Ms. Burke was a consultant at A.T. Kearney, where she focused on strategy, organizational design and change management.

Laurence E. Cranch, General Counsel
Mr. Cranch, age 72, has been our General Counsel since he joined our firm in 2004. Prior to joining AB, Mr. Cranch was a partner of Clifford Chance, an international law firm. Mr. Cranch joined Clifford Chance in 2000 when Rogers & Wells, a New York law firm of which he was Managing Partner, merged with Clifford Chance.

James A. Gingrich, COO
Mr. Gingrich, age 60, joined our firm in 1999 as a senior research analyst with Bernstein Research Services and has been our firm’s COO since December 2011. Prior to becoming COO, Mr. Gingrich held senior managerial positions in Bernstein Research Services, including Chairman and CEO from February 2007 to November 2011 and Global Director of Research from December 2002 to January 2007.

John C. Weisenseel, CFO
Mr. Weisenseel, age 59, joined our firm in May 20122019 as Senior Vice President of Population Health Management of Novant Health, Inc. after having served since February 2015.
•From October 2012 to November 2015, Mr. Scott served as President and CFO.  From 2004Chief Executive Officer at Affinity Health Plan.
•Prior to April 2012, he worked at The McGraw Hill Companies (“McGraw Hill”), wherejoining Affinity, he served initially as SeniorPresident, U.S. Commercial of CIGNA Corporation from June 2010 to December 2011.
•Prior to joining CIGNA, Mr. Scott was Executive Vice President and Corporate TreasurerChief Institutional Development & Sales Officer at TIAA-CREF; he had joined TIAA-CREF in 2000.
•Mr. Scott is a director and from 2007Audit Committee Chair at Becton, Dickinson and Company (NYSE: BDX), a director and Audit Committee Chair at Lowe's Companies, Inc. (NYSE: LOW) and, since January 2021, a director of Point32Health.
Director Qualifications
Mr. Scott brings to the Board his audit committee financial expertise and strong strategic and operational experience developed through a variety of executive roles at insurance and financial services companies as well as his service on the boards of other U.S. public companies.
Bertram L. Scott
Committees: Compensation
Age: 70
Director Since: 2020


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Background
•Mr. Stonehill was appointed a director of AB in April 2012,2019.
•He has been a director and member of various board committees at EQH and Equitable America since March 2019, and at Equitable Financial since November 2017.
•Mr. Stonehill has served as CFOa member of the firm’s Standardsupervisory board of Deutsche Boerse AG, a capital market infrastructure provider, since 2018. In January 2021, Mr. Stonehill joined the board of Constellation Acquisition Corp. I, a blank check company that targets disruptive innovation across various segments of the global economy.
•In addition, Mr. Stonehill is the Founding Partner of Green & Poor’s subsidiary.  PriorBlue Advisors LLC, having started this advisory firm that provides financial advice to joining McGraw Hill, clean-tech and other environmentally-minded companies in 2011.
•He formerly was a director of Play Magnus AS, a chess app company, from 2016 to 2021, and non-executive vice chairman of Julius Baer Group Ltd., a global private banking company based in Switzerland, from 2009 to 2021.
•Mr. WeisenseelStonehill has over 30 years' experience in energy markets, investment banking and capital markets, including leadership positions at Lazard Freres & Co. LLC, Credit Suisse and Morgan Stanley & Co.
•He also served as Chief Financial Officer at Better Place Inc., an electric vehicle start-up, from 2009 to 2011, where he oversaw global financial strategy and capital raising.
Director Qualifications
Mr. Stonehill brings to the Board his extensive expertise and distinguished track record in the financial services industry and over 30 years' experience in energy markets, investment banking and capital markets.
Charles G.T. Stonehill
Committees: Audit (Chair)
Age: 63
Director Since: 2019
Skills:
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Background
•Mr. Walthall was appointed a director of AB in September 2021.
•He serves as Executive President of Enterprise Growth for UnitedHealth Group, a diversified healthcare company.
•Previously, he served as Executive Vice President and Corporate Treasurer for Barnes & Noble, Inc.  Chief Operating Officer at Blue Shield of California.
•Prior to Blue Shield, he served as Vice President and General Manager of Digital Service Integration at American Express. Before joining Barnes & Noble, he spent ten yearsAMEX, Mr. Walthall held numerous senior roles with USAA Insurance, having contributed to the development of the industry's first mobile check-deposit service.
•He was the recipient of the 2016 Multicultural Leaders of California award from the National Diversity Council, and in various derivatives trading2020 was named one of the Most Influential Black Executives in Corporate America by Savoy Magazine.
Director Qualifications
Mr. Walthall brings over two decades of leadership experience with growth strategy, operations, product development, and financial positions at Citigroup.  A Certified Public Accountant, Mr. Weisenseel also has worked at KPMG LLP.

Changescustomer service and retention programs through his extensive experience in Directors and Executive Officersnumerous leadership roles throughout his career.

There have been no changes in our directors and executive officers since we filed our Form 10-K for the year ended December 31, 2017.

Board Meetings

In 2018, the Board held:
Todd Walthall
Committees: Audit
Age: 51
Director Since: 2021

•regular meetings in February, April, May, July, September and November; and


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Executive Officers (other than Mr. Bernstein)
Kate C. Burke,COO and Head of Private Wealth
Ms. Burke, age 50, was named Head of our firm's Private Wealth channel in February 2021, and she was appointed as our firm's Chief Operating Officer in July 2020 after having been appointed Chief Administrative Officer in May 2019. Previously, she served as Head of Human Capital and Chief Talent Officer from February 2016 to May 2019. Ms. Burke joined our firm in 2004 as an institutional equity salesperson with Bernstein Research Services and has held various managerial roles since that time. Prior to joining AB, Ms. Burke was a consultant at A.T. Kearney, where she focused on strategy, organizational design and change management.
Laurence E. Cranch,Chief Legal Officer
Mr. Cranch, age 75, has been our Chief Legal Officer (formerly known as General Counsel) since he joined our firm in 2004. Prior to joining AB, Mr. Cranch was a Partner of Clifford Chance, an international law firm. Mr. Cranch joined Clifford Chance in 2000 when Rogers & Wells, a New York law firm of which he was Managing Partner, merged with Clifford Chance. Mr. Cranch retired from AB, effective as of December 31, 2021.
Ali Dibadj,CFO and Head of Strategy
Mr. Dibadj, age 46, was appointed Head of Finance (and later CFO-designate) and Head of Strategy in April 2020, and he has served as our firm's CFO since February 2021. He co-led the firm's Strategy Committee in 2019, was designated a portfolio manager focusing on improving operations, ESG and capital allocation of companies in 2017, and served as a senior research analyst with Bernstein Research Services from 2006 to 2020. During Mr. Dibadj's time as a senior research analyst, he was ranked #1 on 12 occasions and was inducted into the Institutional Investor Hall of Fame. Prior to joining AB, Mr. Dibadj spent approximately a decade consulting with McKinsey & Company and Mercer on topics including strategy, M&A, efficiency and governance. He also worked at Skadden Arps, a global law firm.
Karl Sprules,Head of Global Technology & Operations
Mr. Sprules, age 48, was appointed Head of Global Technology & Operations in 2018. He joined AB's technology department in 1998 as a senior systems engineer in the firm's London office. Form 2012 to 2020, Mr. Sprules served as AB's chief technology officer, and since 2018 he has led the relocation of AB's Technology & Operations department to the firm's new Nashville headquarters. In 2012, Mr. Sprules became head of Infrastructure Services for Equities, managing investment operations, operational risk and technology teams. From 2005 to 2012, Mr. Sprules led technology for AB's Private Wealth, Institutional and Client groups. Before joining AB, Mr. Sprules held research analyst positions in cellular and defense product development.
Changes in Directors and Executive Officers
The following changes in our directors and executive officers occurred since we filed our Form 10-K for the year ended December 31, 2020:
Directors
•Mr. Walthall joined the Board, effective September 21, 2021.
•Ms. Lamm-Tennant joined the Board, effective October 22, 2021.
•Paul Audet departed the Board, effective September 21, 2021.
•Ramon de Oliveira departed the Board, effective October 22, 2021.
Executive Officers
•Mr. Dibadj was appointed CFO, effective February 12, 2021.
•John C. Weisenseel retired as CFO, effective February 12, 2021, and from AB generally, effective September 30, 2021

•a special meeting in December.

Generally, the Board holds six meetings annually: in February, April, May, July or August, September or October, and November. In addition, the Board holds special meetings or takes action by unanimous written consent as circumstances warrant. The Board has standing Executive, Audit and Risk, Compensation and Workplace Practices, and Governance Committees, each of which is described in further detail below. Each member of the Board, except for Mr. Malmstrom, attended 75% or more of the aggregate of all Board and committee meetings that he or she was entitled to attend in 2018.








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Board Meetings
In 2021, the Board held regular meetings in February, May, September and November. In addition, the Board convened a special joint session with the Governance Committee in October 2021.
The Board has established a calendar consisting of four regular meetings, which are held in February, May, September and November. In addition, the Board holds special meetings or takes action by unanimous written consent as circumstances warrant. The Board has standing Executive, Audit and Risk, Compensation and Workplace Practices, and Governance Committees, each of which is described in further detail below. Each member of the Board attended 75% or more of the aggregate of all Board and committee meetings that he or she was entitled to attend in 2021.
Committees of the Board

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Responsibilities:
The Executive Committee of the Board (“Executive Committee”) consists of Messrs. Bernstein, de Oliveira, Duverne, Pearson and Zoellick (Chair).

The Executive Committee exercises•Exercises all of the powers and authority of the Board (with limited exceptions) when the Board is not in session, or when it is impractical to assemble the full Board. The Executive Committee held three meetings in 2018.

•Typically, determines quarterly unitholder distributions, as applicable.
The Audit and Risk Committee of the Board (“Audit Committee”) consists of Ms. Leibowitz and Messrs. Audet and Kaye (Chair). The primary purposes of the Audit Committee are to:
Executive Committee
Committee Members:
Joan Lamm-Tennant (Chair)
Seth P. Bernstein
Mark Pearson
Meetings in 2021: 4
•assist the Board in its oversight of:
•the integrity of the financial statements of the Partnerships;
•the effectiveness of the Partnerships' internal control over financial reporting and the Partnerships' risk management framework and risk mitigation processes;
•the Partnerships’ status and system of compliance with legal and regulatory requirements and business conduct;
•the independent registered public accounting firm’s qualification and independence; and
•the performance of the Partnerships’ internal audit function; and
•oversee the appointment, retention, compensation, evaluation and termination of the Partnerships’ independent registered public accounting firm.

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Responsibilities:
Consistent•Assist the Board in its oversight of:
•the integrity of the financial statements of the Partnerships;
•the effectiveness of the Partnerships' internal control over financial reporting and the Partnerships' risk management framework and risk mitigation processes;
•the Partnerships’ status and system of compliance with these functions, legal and regulatory requirements and business conduct;
•the Audit Committee encouragesindependent registered public accounting firm’s qualification and independence; and
•the performance of the Partnerships’ internal audit function.
•Oversee the appointment, retention, compensation, evaluation and termination of the Partnerships’ independent registered public accounting firm.
•Encourages continuous improvement of, and fosters adherence to, the Partnerships’ policies, procedures and practices at all levels. With respect to these matters, the Audit Committee provides
•Provides an open avenue of communication among the independent registered public accounting firm, senior management, the Internal Audit Department, the Chief Compliance Officer, the Chief Risk Officer and the Board. The

Audit and Risk Committee
Committee held seven Members:
Charles Stonehill (Chair)
Nella Domenici Todd Walthall
Meetings in 2021: 7
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Responsibilities:
•Assists the Board and the sole stockholder of the General Partner in:
•identifying and evaluating qualified individuals to become Board members; and
•determining the composition of the Board and its committees.
•Assists the Board in:
•developing and monitoring a process to assess Board effectiveness;
•developing and implementing our Corporate Governance Guidelines; and
•reviewing our policies and programs that relate to matters of corporate responsibility of the General Partner and the Partnerships.

Governance Committee
Committee Members:
Kristi Matus (Chair)
Seth P. Bernstein
Das Narayandas
Mark Pearson
Meetings in 2021: 1 regular meetingsmtg. and one 1 special meeting in 2018.mtg.

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The Compensation Committee consistsFor a discussion of Ms. Fallon- Walsh (Chair) and Messrs. Audet, de Oliveira, Kaye, Pearson and Zoellick; Mr. Pearson replaced Denis Duverne on the Compensation Committee as of February 12, 2019. The Compensation Committee held three regular meetings and two special meetings in 2018.  For additional information about the Compensation Committee, Committee's responsibilities, please see “Compensation Discussion and Analysis—Analysis - Compensation Committee”Committee; Process for Determining Executive Compensation” in Item 11.11.


Also, in February 2019 the Compensation Committee established the Section 16 Subcommittee to ensure we can continue to utilize the short-swing trading exemption set forth in Section 16b-3 under the Exchange Act. Under this exemption, equity grants to our firm's executive officers are exempt from short-swing trading rules if each such grant is approved by the full Board or a committee of the Board consisting entirely of “non-employee” directors (generally, directors who are not officers of the company or an affiliate). The Section 16 Subcommittee consists of Ms. Fallon-Walsh (Chair) and Messrs. Audet, de Oliveira and Kaye.

The Governance Committee consists of Ms. Fallon-Walsh (Chair) and Messrs. Bernstein, Duverne, Narayandas and Zoellick. The Governance Committee:
Compensation and Workplace Practices Committee
Committee Members:
Kristi Matus (Chair)
Daniel G. Kaye
Mark Pearson
Bertram L. Scott
Meetings in 2021: 5 regular mtgs. and 1 special mtg.
•assists the Board and the sole stockholder of the General Partner in:
The functions of each of the Board committees discussed above are more fully described in each committee’s charter. The charters are available in the "Responsibility - Corporate Governance" section of our Internet Site.
Audit Committee Financial Experts; Financial Literacy
Audit Committee Financial Expertise
In May 2021, the Governance Committee, after reviewing materials prepared by management, recommended that the Board determine that each of Ms. Domenici and Messrs. Audet and Stonehill is an “audit committee financial expert” within the meaning of Item 407(d) of Regulation S-K. The Board so determined at its regular meeting held in May 2021.
In September 2021, the Governance Committee, after reviewing materials prepared by management, recommended that the Board determine that Mr. Walthall is an “audit committee financial expert” within the meaning of Item 407(d) of Regulation S-K. The Board so determined at its regular meeting held in September 2021.
Financial Literacy
In May 2021, the Governance Committee, after reviewing materials prepared by management, recommended that the Board determine that Ms. Domenici, Mr. Audet and Mr. Stonehill each is financially literate and possesses accounting or related financial management expertise, as contemplated by Section 303A.07(a) of the NYSE Listed Company Manual (“Financially Literate”). The Board so determined at its regular meeting held in May 2021.
In September 2021, the Governance Committee, after reviewing materials prepared by management, recommended that the Board determine that Mr. Walthall is Financially Literate. The Board so determined at its regular meeting held in September 2021.
In October 2021, the Governance Committee, after reviewing materials prepared by management, recommended that the Board determine that Ms. Lamm-Tennant is Financially Literate. The Board so determined in October 2021.
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•identifying and evaluating qualified individuals to become Board members; and
•determining the composition of the Board and its committees, and
•assists the Board in:
•developing and monitoring a process to assess Board effectiveness;
•developing and implementing our Corporate Governance Guidelines; and
•reviewing our policies and programs that relate to matters of corporate responsibility of the General Partner and the Partnerships.
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The Governance Committee held two meetings in 2018.

The functions of each of the Board committees discussed above are more fully described in each committee’s charter. The charters are available on our Internet Site.


Audit Committee Financial Experts; Financial Literacy

In January 2018, the Governance Committee, after reviewing materials prepared by management, recommended that the Board determine that each of Messrs. Audet and Kaye was an “audit committee financial expert” within the meaning of Item 407(d) of Regulation S-K.  The Board so determined at its regular meeting held in February 2018.

In January 2019, the Governance Committee, after reviewing material prepared by management, recommended that the Board determine that each of Messrs. Audet and Kaye is an “audit committee financial expert” within the meaning of Item 407(d) of Regulation S-K.  The Board so determined at its regular meeting held in February 2019.

In January 2018, the Governance Committee, after reviewing materials prepared by management, recommended that the Board determine that each of Mses. Fallon-Walsh and Leibowitz and Messrs. Audet and Kaye is financially literate and possesses accounting or related financial management expertise, as contemplated by Section 303A.07(a) of the NYSE Listed Company Manual (“Financially Literate”).  The Board so determined at its regular meeting held in February 2018.

In January 2019, the Governance Committee, after reviewing materials prepared by management, recommended that the Board determine that each of Ms. Leibowitz and Messrs. Audet and Kaye is Financially Literate. The Board so determined at its regular meeting held in February 2019.

Independence of Certain Directors

In January 2018,May 2021, the Governance Committee, after reviewing materials prepared by management, recommended that the Board determine that each of Mses. Fallon-WalshDomenici and LeibowitzMatus and Messrs. Audet, de Oliveira, Kaye, Narayandas, Scott and NarayandasStonehill is independent. The Board determined, at its February 2018May 2021 regular meeting, that each of Mses. Fallon-Walsh and Leibowitz and Messrs. Audet, de Oliveira, Kaye and Narayandasthese directors is independent within the meaning of the relevant rules.

In January 2019,September 2021, the Governance Committee, after reviewing materialmaterials prepared by management, recommended that the Board determine that each of Mses. Fallon-Walsh and Leibowitz and Messrs. Audet, de Oliveira, Kaye and NarayandasMr. Walthall is independent. The Board determined, at its February 2019September 2021 regular meeting, that each of Mses. Fallon-Walsh and Leibowitz and Messrs. Audet, de Oliveira, Kaye and NarayandasMr. Walthall is independent within the meaning of the relevant rules.

In October 2021, the Governance Committee, after reviewing materials prepared by management, recommended that the Board determine that Ms. Lamm-Tennant is independent. The Board determined, in October 2021, that Ms. Lamm-Tennant is independent within the meaning of the relevant rules.
Board Leadership Structure and Role in Risk Oversight

Leadership

The Board, together with the Governance Committee, is responsible for reviewing the Board’s leadership structure. In determining the appropriate individuals to serve as our ChairmanChair and our CEO, the Board and the Governance Committee consider, among other things, the composition of the Board, our company’s strong corporate governance practices, and the challenges and opportunities specific to AB.

Contacting our Board

Interested parties wishing to communicate directly with our ChairmanChair or the other members of our Board may send an e-mail, with “confidential” in the subject line, to our Corporate Secretary or address mail to Mr. ZoellickMs. Lamm-Tennant in care of our Corporate Secretary. Our Corporate Secretary will promptly forward such e-mail or mail to Mr. Zoellick.Ms. Lamm-Tennant. We have posted this information in the “Management &“Responsibility - Corporate Governance” section of our Internet Site.

Risk Oversight

Board of Directors
The Board, together with the Audit Committee, has oversight for our company’s risk management framework, which includes investment risk, credit and counterparty risk, and operational risk (includes legal/regulatory risk, cyber security risk and climate risk), and is responsible for helping to ensure that these risks are managed in a sound manner.
The Board, together with the Audit Committee, has oversight for our company’s risk management framework, which includes investment risk, credit and counterparty risk, and operational risk (includes legal/regulatory risk and cyber security risk), and is responsible for helping to ensure that these risks are managed in a sound manner.
q
Audit Committee
The Board has delegated to the Audit Committee, which consists entirely of independent directors, the responsibility to consider our company’s policies and practices with respect to investment, credit and counterparty, and operational risk assessment and risk management, including discussing with management the major financial, operational and reputational risk exposures and the steps taken to monitor and control such exposures.
p
Risk Management TeamChief Risk Officer
Members of the company's risk management team (including our Chief Information Security Officer), who are responsible for identifying, managing and controlling the array of risks inherent in our company’s business and operations, make quarterly reports to the Audit Committee, which address investment, credit and counterparty, and operational risk identification, assessment and monitoring.uThe Chief Risk Officer makes quarterly presentations to the Audit Committee and has reporting lines to the CEO and the Audit Committee.
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Table of independent directors, the responsibility to consider our company’s policies and practices with respect to investment, credit and counterparty, and operational risk assessment and risk management, including discussing with management the major financial, operational and reputational risk exposures and the steps taken to monitor and control such exposures. Members of the company's risk management team (including our Chief Information Security Officer), who are responsible for identifying, managing and controlling the array of risks inherent in our company’s business and operations, make quarterly reports to the Audit Committee, which address investment, credit and counterparty, and operational risk identification, assessment and monitoring. The Chief Risk Officer, whose expertise encompasses both quantitative research and associatedContents

Part III
investment risks, makes periodic presentations to the Board and/or the Audit Committee. He reports directly to our CEO and, since 2013, has had a reporting line to the Audit Committee.

The Board has determined that its leadership and risk oversight are appropriate for our company. Mr. Bernstein’s in-depth knowledge of financial services and extensive executive experience in the investment management industry make him suited to serve as our President and CEO, while Mr. Zoellick’sMs. Lamm-Tennant’s in-depth knowledge of world affairsindustry and financial services developed through his years of service with the U.S. government have provedacademic experience are invaluable at enhancing the overall functioning of the Board. The Board believes that the combination of a separate Chairman and CEO, the Audit Committee, a specialized risk management team and significant involvement from our largest Unitholder (EQH) provide the appropriate leadership to help ensure effective risk oversight by the Board.

oversight.
Code of Ethics and Related Policies

All of ourOur directors, officers and employees are subject to our Code of Business Conduct and Ethics. The code is intended to comply with Section 303A.10 of the NYSE Listed Company Manual, Rule 204A-1 under the Investment Advisers Act and Rule 17j-1 under the Investment Company Act, as well as with recommendations issued by the Investment Company Institute regarding, among other things, practices and standards with respect to securities transactions of investment professionals. The Code of Business Conduct and Ethics establishes certain guiding principles for all of our employees, including sensitivity to our fiduciary obligations and ensuring that we meet those obligations. In addition, the Code, together with our firm's insider trading policy, restricts employees from trading when in possession of material non-public information of any kind, which can include the existence of a significant cybersecurity incident at our firm. Our Code of Business Conduct and Ethics may be found in the “Management &“Responsibility - Corporate Governance” section of our Internet Site.

We have adopted a Code of Ethics for the CEO and Senior Financial Officers, which is intended to comply with Section 406 of the Sarbanes-Oxley Act of 2002 (“Item 406 Code”). The Item 406 Code which may be found in the “Management &“Responsibility - Corporate Governance” section of our Internet Site, was adopted in October 2004 by the Executive Committee.Site. We intend to satisfy the disclosure requirements under Item 5.05 of Form 8-K regarding certain amendments to, or waivers from, provisions of the Item 406 Code that apply to the CEO, the CFO and the Chief Accounting Officer by posting such information on our Internet Site. To date, there have been no such amendments or waivers.

NYSE Governance Matters

Section 303A.00 of the NYSE Listed Company Manual exempts limited partnerships from compliance with the following sections of the Manual, some of which we comply with voluntarily: Section 303A.01 (board must have a majority of independent directors), 303A.04 (corporate governance committee must have only independent directors as its members and must have a charter that addresses, among other things, the committee’s purpose and responsibilities), and 303A.05 (compensation committee must have only independent directors as its members and must have a charter that addresses, among other things, the committee’s purpose and responsibilities).

AB Holding is a limited partnership (as is AB). In addition, because the General Partner is a subsidiary of EQH, and the General Partner controls AB Holding (and AB), we believe we also would qualify for the “controlled company” exemption. However, we comply voluntarily with the charter requirements set forth in Sections 303A.04 and 303A.05.

Our Corporate Governance Guidelines (“Guidelines”) promote the effective functioning of the Board and its committees, promote the interests of the Partnerships’ respective Unitholders (with appropriate regard to the Board’s duties to the sole stockholder of the General Partner), and set forth a common set of expectations as to how the Board, its various committees, individual directors and management should perform their functions. The Guidelines may be found in the “Management &“Responsibility - Corporate Governance” section of our Internet Site.

The Governance Committee is responsible for considering any request for a waiver under the Code of Business Conduct and Ethics, the Item 406 Code the AXA Group Compliance and Ethics Guide, and the EQH Policy Statement on Ethics from any director or executive officer of the General Partner. No such waiver has been granted to date and, if a waiver is granted in the future, such waiver would be described in the “Management &“Responsibility - Corporate Governance” section of our Internet Site.

OurWe include in the “Responsibility - Corporate Governance,” section of our Internet Site, under the heading “Contact our Directors,” providessite an e-mail address for any interested party, including Unitholders, to communicate with the Board. Our Corporate Secretary reviews e-mails sent to that address and has some discretion in determining how or whether to respond, and in determining to whom such e-mails should be forwarded. In our experience, substantially all of the e-mails received are ordinary client requests for administrative assistance that are best addressed by management, or solicitations of various kinds.

Certifications by our CEO and CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 have been furnished as exhibits to this Form 10-K.

AB Holding Unitholders and AB Unitholders may request a copy of any committee charter, the Guidelines, the Code of Business Conduct and Ethics, and the Item 406 Code by contacting our Corporate Secretary. The charters and memberships of the Executive, Audit, Governance and Compensation Committees may be found in the “Management &“Responsibility - Corporate Governance” section of our Internet Site.

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Fiduciary Culture

We maintain a robust fiduciary culture and, as a fiduciary, we place the interests of our clients first and foremost. We are committed to the fair and equitable treatment of all our clients, and to compliancewith all applicable rules and regulations and internal policies to which our business is subject. We pursue these goals through education of our employees to promote awareness of our fiduciary obligations, incentives that align employees’ interests with those of our clients, and a range of measures, including active monitoring, to ensure regulatory compliance. Our compliance framework includes:
•the Code of Ethics Oversight Committee (“Ethics Committee”) and the Internal Compliance Controls Committee (“Compliance Committee”), each of which consists of our executive officers and other senior executives;
•
the Code of Ethics Oversight Committee (“Ethics Committee”) and the Internal Compliance Controls Committee (“Compliance Committee”), each of which consists of our executive officers and other senior executives;
•an ombudsman office, where employees and others can voice concerns on a confidential basis;
•firm-wide compliance and ethics training programs; and
•a Conflicts Officer and a Conflicts Committee, which help to identify and mitigate conflicts of interest.
•an ombudsman office, where employees and others can voice concerns on a confidential basis;

•firm-wide compliance and ethics training programs; and
•a Conflicts Officer and a Conflicts Committee, which help to identify and mitigate conflicts of interest.
The Ethics Committee oversees all matters relating to issues arising under our Code of Business Conduct and Ethics and meets on a quarterly basis and at such other times as circumstances warrant. The Ethics Committee and its subcommittee, the Personal Trading Subcommittee, have oversight of personal trading by our employees.

The Compliance Committee reviews compliance issues throughout our firm, endeavors to develop solutions to those issues as they may arise from time to time and oversees implementation of those solutions. The Compliance Committee meets on a quarterly basis and at such other times as circumstances warrant.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires directors of the General Partner and executive officers of the Partnerships, and persons who own more than 10% of the AB Holding Units or AB Units, to file with the SEC initial reports of ownership and reports of changes in ownership of AB Holding Units or AB Units. To the best of our knowledge, during 2018,2021, we complied with all Section 16(a) filing requirements, except that Forms 4 relating to year-end AB Holding Unit awards to Mr. Bernstein, Ms. Burke, Mr. Cranch, Mr. Weisenseel and William R. Siemers (our firm's Chief Accounting Officer) were filed late.requirements. Our Section 16 filings can be found under “Investor & Media Relations” / “ReportsRelations - Reports & SEC Filings” on our Internet Site.

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Item 11. Executive Compensation

Compensation Discussion and Analysis (“CD&A”)
In this CD&A, we provide an overview and analysis of our executive compensation philosophy, address the principal elements used to compensate our executive officers and explain how our executive compensation program aligns with AB’s strategic objectives. Additionally, we discuss 2021 incentive compensation recommendations and decisions made by our Compensation Committee for our named executive officers (“NEOs”). This CD&A should be read together with the compensation tables that follow this section. Our NEOs for 2021 are:
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Seth P. Bernstein
President and Chief Executive Officer (“CEO“)
Kate C. Burke
Chief Operating
Officer (“COO“) and Head of Private Wealth
Laurence E. Cranch
Chief Legal Officer
Karl Sprules
Head of Global Technology & Operations
Ali Dibadj
CFO and Head of Strategy
Compensation Philosophy and Goals

The intellectual capital of our employees is collectively the most important asset of our firm. We invest in people – we hire qualified people, train them, encourage them to give their best thinking to the firm and our clients, and compensate them in a manner designed to motivate, reward and retain them while aligning their interests with the interests of our Unitholders.Unitholders and clients.
We structureFurthermore, our named executive officer compensation programspractices are structured to help the firm realize its long-term growth strategy to Deliver, Diversify and Expand, Responsibly, with the intent of enhancingEquitable (“Growth Strategy”), which includes firm-wide and individual performance and Unitholder value. Our “named executive officers” are:initiatives to:
•Deliver superior investment solutions to our clients;
Chief Executive Officer (“CEO”)
Seth P. Bernstein
Chief Financial Officer (“CFO”)
John C. Weisenseel
Three other most highly-compensated executive officers
James A. Gingrich, Chief Operating Officer ("COO")
Kate C. Burke, Head of Human Capital and Chief Talent Officer Laurence E. Cranch, General Counsel
•Develop high-quality differentiated services; and

•Maintain strong incremental margins.
We also are focused on ensuring that our compensation practices are competitive with industry peers and provide sufficient potential for wealth creation for our named executive officersNEOs and our employees generally, which we believe will enable us to meet the following key compensation goals:
•attract, motivate and retain highly-qualified executive talent;
•reward prior-year performance;
•incentivize future performance;
•recognize and support outstanding individual performance and behaviors that demonstrate and foster our firm’s primary objective of helping our clients reach their financial goals; and
•align our executives’ long-term interests with those of our Unitholders and clients.
Progress in Advancing our Growth Strategy in 2021
In 2021, the firm’s results demonstrated meaningful progress in executing on our Growth Strategy. Below are key metrics related to the three pillars of the Growth Strategy:
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Deliver superior investment solutions to our clients:
Investment Performance
The firm’s investment teams continue to focus on consistently delivering differentiated return streams to our clients. We believe that, over time, the ability to produce idiosyncratic returns that cannot be easily replicated will be central to sustaining our competitive advantage. In 2021, performance strengthened in both active fixed income and active equities. In fixed income, 89% of assets were in outperforming services for the one-year period ended December 31, 2021, 72% for the three-year period and 70% for the five-year period. In active equities, 73% of assets were in outperforming services for the one-year period, 48% for the three-year period and 75% for the five-year period ended December 31, 2021. (This performance data reflects the percentage of active fixed income and equity assets in institutional services that outperformed their benchmark, gross of fees, and of active fixed income and equity assets in retail advisor and I share class funds ranked in the top half of their Morningstar category; if no advisor class exists, we used A share class). Additionally, at year-end 2021, 76% of U.S. Fund assets and 59% of Non-U.S. Fund assets were rated 4- or 5-stars by Morningstar.
Several of our retail fixed income and equity mutual funds with AUM greater than $1 billion placed in the top quartile of performance for the three-year period ended December 31, 2021:
•attract, motivate and retain highly-qualified executive talent;
AB U.S. retail fixed income mutual funds that placed in the top quartile (3-yrs):
•AB Intermediate Diversified Muni
•AB High Income Municipal
•AB Intermediate New York Municipal
•AB Intermediate California Municipal
•AB Municipal Bond Inflation Strategies
•AB Municipal Income National
•AB Municipal Income California Strategies
reward prior year performance;
AB Non‑U.S. fixed income funds that placed in the top quartile (3-yrs):
•AB European Income

AB U.S. retail equity mutual funds that placed in the top quartile (3-yrs):
•AB Large Cap Growth
•AB Discovery Growth
•AB Small Cap Growth
•AB Sustainable Global Thematic
AB Non‑U.S. equity funds that placed in the top quartile (3-yrs):
•AB International Healthcare
•AB International Technology
•AB Sustainable Global Thematic
•incentivize future performance;
•recognize and support outstanding individual performance and behaviors that demonstrate and foster our firm’s culture of "Relentless Ingenuity," which includes the core competencies of relentlessness, ingeniousness, collaboration and accountability; and
•align our executives’ long-term interests with those of our Unitholders and clients.


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Net Flows
Scaling our proven investment services remains a key focus of our firm. In 2021, we accelerated our organic growth, generating an active organic growth rate of 4.3%, primarily driven by 10.1% organic growth in active equities. In our Retail channel, record gross sales reached $100 billion, increasing by 27% year-over-year, reflecting strong growth in the U.S. and Japan. This growth primarily resulted from active equities, which experienced gross sales of $59 billion, an increase of $23 billion, or 63%, compared to 2020. The retail redemption rate declined to 30% in 2021 from 34% in 2020. As a result, our Retail active equity products grew organically for a fifth consecutive year, generating $21.6 billion in net inflows, or a 20% organic growth rate. Retail municipal net inflows increased $5.3 billion in 2021, representing a 23% organic growth rate, helping to offset $8.9 billion of taxable fixed income outflows primarily associated with our offshore global high-income funds. In our Institutional channel, gross sales were $31.7 billion, increasing 3% compared to 2020. The firm generated institutional active equity flows of $2.4 billion in 2021, or a 4% organic growth rate, for a fourth consecutive year of active equity organic growth. Our pipeline of $21.5 billion in AUM increased by 76% as compared with $12.2 billion a year ago. Active Equities and Alternatives represented over 85% of the pipeline fee base at year-end. In Private Wealth, gross sales in 2021 of $18.3 billion increased 28% year-over-year. And, we continued to expand our use of innovative product offerings, including a diverse set of Alternatives, ESG-related offerings and tax-sensitive vehicles, such as our proprietary SMA Tax Loss Harvesting Portfolio.
Develop high-quality differentiated services:
Growing the diversity of our offerings to meet the needs of an evolving, complex global client base remains a key focus. In 2021, our Sustainable Investing platform experienced strong growth, with $31.5 billion of AUM at year-end, up 91% year-over-year. New fund launches across our global platform included: Sustainable Climate Solutions, Global Disruptors, Global Low Carbon, Concentrated Asia Growth, Global Equity Income, Short Duration Income, Sustainable Income, Sustainable U.S. Thematic, Asia High Yield, Sustainable Emerging Markets Debt and Multi-Asset Income.
Additionally, we continued to successfully develop and raise capital for new Alternatives offerings, which we are offering across our buy-side distribution channels. Launches in 2021 included a U.S. Commercial Real Estate Private Debt fund. We also completed a distribution agreement with LSV Advisors to offer expanded, special situations, secondary investing to our private wealth clients, and we on-boarded 1.5 Degrees, an investment team specializing in climate-focused long/short equity.
We remain focused on expanding opportunistically, both inside and outside the U.S., to support long-term growth. We have efforts underway to expand our range of services and capabilities in China, other Asian nations and select European markets.
Lastly, in Bernstein Research our investments in Hong Kong and India yielded significant revenue growth in Asia in 2021 as compared with the prior year.
Maintain strong incremental margins:
We remain focused on managing costs to help ensure that we generate targeted incremental operating margins in the range of 45-50%, over time. In 2021, we made substantial progress on a key pillar of this strategy, which we initially announced in 2018: the relocation of our corporate headquarters from New York, NY, to Nashville, TN. In 2021, we occupied our newly constructed Nashville headquarters building, which will house approximately 1,250 employees, over time. We continue to seek efficiencies and manage various operating expenses to help ensure that we drive operating leverage on incremental revenues.
Our incremental adjusted operating margin in 2021 was 53%, above our targeted range. Our adjusted operating margin increased to 33.6% in 2021, up 350 basis points as compared to 30.1% in 2020. The increase resulted from an 18% increase in adjusted revenues, driven by higher base fees and higher performance-based fees, and a reduction in our adjusted compensation ratio. In 2021, total adjusted compensation and benefits expense was 46.5% of adjusted revenues, down from 47.9% in 2020. We provide additional information regarding our adjusted compensation ratio below in this CD&A, and we provide additional information about our adjusted operating margin in Management's Discussion and Analysis of Financial Condition and Results of Operations above in Item 7.
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Our compensation practices are structured to help the firm realize its Growth Strategy
Deliver superior investment solutions to clients
Develop, commercialize
and scale our suite
of services
Launched
9 Products in Private Wealth Channel, including: US Commercial Real Estate Private Debt Fund, Real Estate Equity Plus, Global Disruptors, Relative Value, Sustainable Intermediate Duration and Sustainable US Thematic Strategies

$21.5 billion
Institutional pipeline, with >$60M in annualized fee base

$31.5 billion
ESG Portfolios with Purpose +91% year-over-year

$10 billion
Committed by Equitable Financial to expand AB’s Private Alternative and Private Placement Platforms
  Fixed Income and Equity Performance
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Maintain strong incremental margins(1)
AB Adjusted Operating Margin
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Total Unitholder Return
(2017-2021; includes dividend reinvestment)
Portfolios with Purpose:
New Sustainable launches:
Sustainable Income, Sustainable US Thematic Credit, Sustainable Climate Solutions, Global Low Carbon, Sustainable EM Debt
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Overview
Gross SalesActive EquityOrganic GrowthBeneficial Pipeline Mix
AB’s Retail channel achieved a record ofActive Equity organic growthNet Flows scaled, generated an active organic growth rate ofActive Equities and Alternatives represented over
$100B10.1%4.3%85%
in gross sales in 2021, +27% year-over-yearin 2021in 2021of institutional pipeline fee base at year-end
(1)AB generated incremental adjusted operating margin of 53% in 2021, above the long-term targeted range of 45-50%.
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Overview of 2021 Incentive Compensation Program
When reflecting on 2021 performance and pay, each of our NEOs received a portion of his or her year-end incentive compensation in the form of an annual cash bonus and a portion in the form of long-term incentive compensation awards. The split between annual cash bonus and long-term incentive compensation varied depending on the NEO's total compensation, with lower-paid executives receiving a greater percentage of their incentive compensation as cash bonuses than more highly-paid executives. (For additional information about these compensatory elements, see “Compensation Elements for NEOs” below.)
In 2021, we instituted performance scorecards for senior leaders of the firm, including our NEOs, to shift our executives' priorities from a primarily revenue-based model to a broader leadership mindset. Priorities included in this broader mindset, such as accelerating ESG initiatives, are aligned with firm-wide goals of creating long-term value for all of our stakeholders. The scorecard for each NEO, including Mr. Bernstein, reflected our Growth Strategy and included actual results relative to target metrics across the following measures:
•Financial, including peer results, adjusted operating margin, adjusted net revenue growth and operating efficiency targets (see our discussion of “Management Operating Metrics” in Item 7 for a reconciliation between our results pursuant to US GAAP and our adjusted results);
•Strategic, aligned with our strategy of delivering core investment solutions, while developing high-quality differentiated services, in faster-growing geographies, responsibly, in partnership with Equitable;
•Organizational, including organizational effectiveness and efficiency, leadership impact, succession planning, developing talent, innovating and automating, and real estate utilization; and
•Cultural, including employee engagement, diversity, retention and purpose.
The scorecards support management and the Compensation Committee in assessing each executive's performance relative to business, operational and cultural goals established at the beginning of the year and reviewed in the context of the current-year financial performance of the firm. The amount of incentive compensation paid to our NEOs continues to be determined on a discretionary basis by the Compensation Committee. (For additional information, please see "Compensation Committee; Process for Determining Executive Compensation" below in this CD&A.)
Mr. Bernstein and Ms. Burke, with the approval of the Compensation Committee, confirmed that the appropriate metric to consider in determining the amount of incentive compensation paid to all employees, including our NEOs, in respect of 2021 performance is the ratio of adjusted employee compensation and benefits expense to adjusted net revenues, which terms are described immediately below:
•Adjusted employee compensation and benefits expense is our total employee compensation and benefits expense minus other employment costs such as recruitment, training, temporary help and meals, and excludes the impact of mark-to-market vesting expense, as well as dividends and interest expense, associated with employee long-term incentive compensation-related investments.
•Adjusted net revenues (see our discussion of “Management Operating Metrics” in Item 7 for a reconciliation between our results pursuant to US GAAP and our adjusted results) exclude investment gains and losses and dividends and interest on employee long-term incentive compensation-related investments. In addition, adjusted net revenues offset distribution-related payments to third parties as well as amortization of deferred sales commissions against distribution revenues. We also exclude additional pass-through expenses we incur (primarily through our transfer agent) that are reimbursed and recorded as fees in revenues. Additionally, 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 funds, and AB’s investment gains and losses on its investment in such funds, that were eliminated in consolidation.
In addition, Mr. Bernstein and Ms. Burke, with the approval of the Compensation Committee, determined that the firm’s adjusted employee compensation and benefits expense generally should not exceed 50.0% of our adjusted net revenues, except in unexpected or unusual circumstances. As the table below indicates, in 2021, adjusted employee compensation and benefits expense amounted to approximately 46.5% of our adjusted net revenues (in thousands):
Net Revenues$4,441,602 
Adjustments (see above)
(832,066)
Adjusted Net Revenues$3,609,536
Employee Compensation & Benefits Expense$1,716,013 
Adjustments (see above)
(39,011)
Adjusted Employee Compensation & Benefits Expense$1,677,002
Adjusted Compensation Ratio46.5%
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Our 2021 adjusted compensation ratio of approximately 46.5%% reflects a balancing of the need to keep compensation levels competitive with industry peers in order to attract, motivate and retain highly-qualified talent with the need to maintain strong operating leverage in our business. The Compensation Committee works with management to help ensure both needs are sufficiently addressed.
We have described below each NEO’s individual achievements in 2021 given each officer’s role, the contents of their respective performance scorecards and the firm's business and operational goals:
Seth P. Bernstein
President and Chief Executive Officer
Summary of Achievements: As President and CEO, Mr. Bernstein led the firm to achieve strong financial results, highlighted by the firm's record 33.6% adjusted operating margin, which increased by 350 basis points. Investment performance improved under his leadership, and he focused the firm on making progress on strategic priorities, including the growth of our private alternatives business, the advancement of our responsibility goals, and strengthening the partnership with Equitable. Mr. Bernstein navigated the firm through another challenging environment in 2021 with a focus on our employees, bolstering culture, and prioritizing diversity and inclusion initiatives. The culmination of these efforts delivered value for unitholders.
Individual Achievements
Financial and Investment Performance:
•Led the firm’s efforts in achieving an approximate 18% year-over-year increase in adjusted net revenues, reflecting firm-wide client net inflows of $26.1 billion, or an active organic growth rate of 4.3%. Each of the firm’s three distribution channels grew organically in 2021. Higher revenues coupled with expense management led to an increase in adjusted operating margin of 350 basis points to a record 33.6%. This represented an incremental operating margin of 53%, above the firm’s targeted long-term range of 45-50%.
•Earnings per unit (“EPU”) of $3.89 in 2021 grew 34% over 2020.
•Led focus on improved investment results; one-year performance improved significantly for both the firm’s active equity and fixed income services in 2021, with long-term performance remaining strong. As of year-end, equity services, as a percentage of assets outperforming applicable benchmarks for the one-, three- and five-year periods achieved 73%, 48% and 75%, respectively, while fixed income services achieved 89%, 72% and 70%, respectively.
Strategic Initiatives
•Diversified future active product offerings across major asset classes through the launch of new strategies, including Growth Equity, Sustainability, Asia, Income and Emerging Markets.
•Drove progress on key strategic growth initiatives to build out our private alternatives franchise, including deployment of capital in our new European Commercial Real Estate Debt strategy and agreement with Equitable Financial to provide up to $10 billion of capital into AB’s higher quality illiquid strategies.
•Continued to strengthen overall partnership with Equitable, including working jointly to improve yield on their General Account while seeding new private alternatives strategies.
•Advanced responsibility goals by enhancing our own corporate practices, such as establishing a Board oversight framework, integrating ESG metrics into scorecards and increasing the transparency of diversity data.
Organizational Strength
•Successfully managed through another challenging year, navigating the impacts of the global pandemic. Increased focus on employee well-being and the development of management skills necessary to thrive in a hybrid work environment.
•Advanced our headquarters transition to Nashville, hiring and onboarding new staff and completed our state-of-the-art new corporate headquarters.
Culture
•Maintained strong engagement metrics in AB’s employee survey and supported the firm’s diversity and inclusion (D&I) initiatives, including launching an asset management industry D&I working group, implementing anti-racism training globally and adding two diverse Board members.
•Completed a robust process to develop AB's Purpose and refreshed values, which will guide how we act, make decisions and measure ourselves in the eyes of all of our stakeholders.
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Kate C. Burke
Chief Operating Officer and Head of Private Wealth
Summary of Achievements: As COO, Ms. Burke implemented performance scorecards, oversaw our return to office worldwide, and drove momentum with a critical set of tasks essential to completing the transition to Nashville and opening our new headquarters. As the Head of Private Wealth ("PW"), Ms. Burke established a leadership team, determined a client segmentation approach and product management structure, and developed a strategy for accelerating organic growth and the investments needed to accomplish this objective.
Individual Achievements
Financial
•Led the firm’s compensation process. The process resulted in the firm’s compensation ratio declining 140 basis points year-over-year to 46.5%, helping the firm reach its adjusted operating margin of 33.6%.
•Accelerated PW's organic growth to 3%, generating net inflows in each quarter of 2021 and five of the last six quarters overall.
Strategic
•Advanced AB's operating model by increasing transparency and accountability around critical business and financial metrics through implementation of scorecards for business unit heads, quarterly business reviews and the strategic initiative process. These management tools and processes enabled our senior leadership to manage the overall business more holistically and effectively. Under Ms. Burke’s leadership, scorecards for business unit heads were utilized for the first time across AllianceBernstein, enhancing collaboration among senior leaders to support enterprise initiatives around expanding product, distribution, and infrastructure capabilities and advancing AB's talent and cultural initiatives.
•Oversaw the evolution of PW’s investment platform with a focus on expanding the lineup of differentiated core strategies, alternatives offerings, and “purpose-driven” (ESG) strategies. Complemented our high-quality active management strategies by introducing a passive tax-loss-harvesting separately managed account and ran the most aggressive product roll-out in PW history: 10 product launches across core and alternative strategies. PW's alternatives AUM grew to $11 billion, up 18% Y/Y. PW's ESG AUM grew to $6.9 billion, up 55.5% Y/Y in 2021.
Organizational
•Continued to hire, onboard, and train 259 new employees in Nashville, despite ongoing challenges from the pandemic, which resulted in 974 employees in Nashville at year-end, and enabled the firm to maintain its pace to achieve 1,250 employees there by 2024.
•Oversaw AB's response to the pandemic and our firm's return-to-office approach, which included marshaling resources across the firm to execute a coordinated global response, enabling the firm to seamlessly meet fiduciary obligations and provide exceptional client service and investment advice, while also prioritizing the health and well-being of AB's 4,085 employees.
Culture
•Led efforts to reimagine the workplace and ensure the firm’s culture remained intact while evolving into a hybrid work environment.
•Fostered stronger AB employee engagement while also delivering concrete actions that resulted in a more diverse workforce, including enhancing AB's diverse talent development and retention efforts.

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Ali Dibadj
CFO and Head of Strategy
Summary of Achievements: As CFO, Mr. Dibadj oversaw the delivery of balanced financial targets, communicated our progress internally and externally, and ensured engagement and continuous improvement of a strong Finance function. As Head of Strategy, Mr. Dibadj identified and catalyzed important developments and improvements at AB, led our growth-focused M&A / partnership /seeding advancements, and helped drive our culture firm-wide.
Individual Achievements
Financial
•Balanced the firm's revenues, expenses and cash through a disciplined process to advance AB's adjusted margin to 33.6% for the year, beat its incremental margin target and increase unitholder distributions by +34% year-over-year.
•Led the revamp of our investor and analyst relations with broader outreach, more effective communication, and improved messaging, which contributed to AB's strong total unitholder return.
•Improved AB’s financial processes through enhanced accounting, tax, treasury, and financial planning & analysis procedures.
Strategic
•Executed on commercial synergies with Equitable, leading over a dozen teams across both organizations, including the delivery of an important $10B seed capital commitment from Equitable Financial to AB.
•Supported the acceleration of our seed investment program, alongside our firm's Client Group.
•Collaborated with business units to deliver on acquisition and partnership goals in responsible investing and alternatives.
•Activated change throughout the organization, including catalyzing client segmentation, designing new product development processes and jumpstarting M&A/partnership procedures.
Organizational
•Revamped the firm's quarterly business review procedures, co-developed with Ms. Burke our performance scorecards, improved our compensation analysis systems and developed our strategic initiatives prioritization process.
•Digitized financial information delivery, analysis and dashboards for AB and Strategic Business Units.
•Deepened relationships with key external partners, including clients, consultants, investors, analysts and the media, among others.
Culture
•Sponsored AB’s important efforts on Purpose, Mission and Values (as discussed above in Item 1), alongside our responsibility team.
•Engaged in firm-wide Town Halls, small group meetings, and mentorship within each of our business units to communicate our culture, articulate our strategy, champion diversity & inclusion, and support our employees during a challenging pandemic.



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Karl Sprules
Head of Global Technology & Operations
Summary of Achievements: As Global Head of Technology & Operations (GTO), Mr. Sprules led the opening of our Nashville office and chaired our Pandemic Response Team. He rigorously managed Technology and Operations expenses and delivered on a broad portfolio of strategic firm initiatives.
Individual Achievements
Financial
•Managed the Technology & Operations expenses down to less than 11% of revenue.
Strategic
•Led AB’s Technology, Operations, Security, and Real Estate teams globally and managed the infrastructure expense ratio down to its lowest level in 10 years while supporting business development and growth. Mr. Sprules completed the reorganization and consolidation of the GTO leadership team and advised the Board, other NEOs, and the Operating Committee on the use of technology to gain competitive business advantage.
•Continued to increase our operational efficiency by creating programs that drove down error rates, reduced onboarding risk, automated operational work and increased service levels.
•Advised other NEOs and the Operating Committee on the technical and operational feasibility of our strategic growth initiatives, and provided staffing, infrastructure and oversight for new initiativesthroughout the year.
•Pivoted the focus of our security infrastructure from defense to defense and response, providing thought leadership on security infrastructure architecture, developing maturity models for business unit assessment of response preparedness and reporting to the Board and other NEOs on our security posture.
Organizational
•Led the team responsible for opening our new corporate headquarters in Nashville. This brought together multidisciplinary teams of thought leaders in design, construction, redundance, security, technology and collaboration to create a state-of-the-art work environment.
•Chaired the AB COVID-19 Pandemic Repose Team. This cross-functional leadership team focused on maintaining firm-wide operating efficiency while keeping our employees safe. Mr. Sprules led the response to virus variant surges and advised business unit heads on the impact of extended work from home.
Culture
•Produced the Nashville Beat, a recurring Town Hall program designed to engage new and tenured Nashville staff as we transitioned to a hybrid work environment.
•Co-lead H-Labs, a joint venture between AB and Equitable focused on accelerating innovation and collaboration.



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Laurence E. Cranch
Chief Legal Officer
Summary of Achievements: As CLO, Mr. Cranch was responsible for managing the legal and compliance department, overseeing all legal affairs for the firm. Mr. Cranch successfully planned and implemented the transition of the leadership of this department to the firm’s General Counsel, Mark Manley, as a result of his retirement at the end of 2021.
Individual Achievements
Financial
•Continued to successfully control outside counsel expenses with respect to ongoing and routine legal matters.
Strategic
•Successfully completed the transition of leadership of the Legal and Compliance Department.
•Ensured no regulatory examination resulted in a material adverse finding or enforcement proceeding.
•Received favorable feedback from AB business leaders relating to the quality of service of the Legal and Compliance department.
•Ensured the firm remained free of material litigation, reflecting our pragmatic and aggressive program to avoid situations that are likely to produce disputes and, where disputes do arise, resolve them on favorable terms.
Organizational
•Completed the relocation of nearly all of the New York Legal and Compliance department to Nashville, including the retention of the employees who relocated, and the recruitment of qualified individuals to fill remaining senior positions in Nashville.
•Implemented compliance solutions in response to new compliance requirements that became effective in 2021.
Culture
•Stressed the importance of our fiduciary culture through compliance and workplace practices training.

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The compensation of each of these NEOs reflected the Compensation Committee’s judgment (and Mr. Bernstein’s judgment, with respect to each executive other than himself) in assessing the importance of the executive's achievements in the context of our firm’s adjusted financial results and progress in advancing our Growth Strategy.
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Compensation Committee; Process for Determining Executive Compensation
The Compensation Committee consists of Ms. Matus (Chair) and Messrs. Kaye, Pearson and Scott. The Compensation Committee held five regular meetings and one special meeting in 2021.
As discussed in “NYSE Governance Matters” in Item 10, AB Holding, as a limited partnership, is exempt from NYSE rules that require public companies to have a compensation committee consisting solely of independent directors. EQH owns, directly and through various subsidiaries, an approximate 64.5% economic interest in AB (as of December 31, 2021), and compensation expense is a significant component of our financial results. For these reasons, Mr. Pearson, director and President and CEO of EQH, is a member of the Compensation Committee, and any action taken by the Compensation Committee requires his affirmative vote or consent. Given this structure, the Compensation Committee has established a sub-committee consisting entirely of non-management directors (i.e., Ms. Matus and Messrs. Kaye and Scott). This “Section 16 Sub-Committee” approves awards of restricted AB Holding Units to NEOs to ensure we can utilize the short-swing trading exemption set forth in Section 16b-3 under the Exchange Act. Under this exemption, equity grants to our firm's executive officers are exempt from short-swing trading rules if each such grant is approved by the full Board or a committee of the Board consisting entirely of “non-employee” directors (generally, directors who are not officers of the company or an affiliate).
The Compensation Committee has general oversight of compensation and compensation-related matters, including:
•determining cash bonuses;
•determining contributions and awards under incentive plans or other compensation arrangements (whether qualified or non-qualified) for employees of AB and its subsidiaries, and amending or terminating such plans or arrangements or any welfare benefit plan or arrangement or making recommendations to the Board with respect to adopting any new incentive compensation plan, including equity-based plans;
•reviewing and approving the compensation of our CEO, evaluating his performance, and determining and approving his compensation level based on this evaluation; and
•reviewing and discussing the CD&A and recommending to the Board its inclusion in each of AB’s and AB Holding’s Form 10-K and, when applicable, proxy statements.
The Compensation Committee has developed a comprehensive process for:
•reviewing our executive compensation program to ensure it is aligned with our firm’s philosophy and strategic objectives;
•evaluating performance by our NEOs against goals and objectives established at the beginning of the year; and
•setting compensation for the NEOs and other senior executives.
The Compensation Committee’s year-end process generally focuses on the cash bonuses and long-term incentive compensation awards granted to NEOs and other senior executives. Mr. Bernstein, working with Ms. Burke and other senior executives, provides recommendations for individual executive awards to the Compensation Committee for its consideration. As part of this process, Ms. Burke provides the Committee with compensation benchmarking data from one or more compensation consultants. For 2021, we paid $95,250 to McLagan Partners (“McLagan”) for executive compensation benchmarking data and trend forecasting.
Management periodically reviews with the Compensation Committee the firm’s expected adjusted financial and operating results, the firm’s actual results and management’s year-end compensation expectations, as they evolve throughout the year. Management accomplished these reviews during regular meetings of the Compensation Committee held in February, May, September, October and November 2021. The Committee also held a special meeting in November 2021. The Compensation Committee approved the firm's final year-end compensation recommendations during its special meeting held in November 2021 and affirmed its approval in December 2021.
The Compensation Committee did not retain its own consultants in 2021.
Additional information regarding the Compensation Committee’s functions can be found in the Committee's charter, which is available online in the “Responsibility - Corporate Governance” section of our Internet Site.
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Benchmarking Data
In 2021, we engaged McLagan to provide compensation benchmarking data for our NEOs (“2021 Benchmarking Data”). The 2021 Benchmarking Data summarized 2020 compensation levels and 2021 salaries at selected asset management companies comparable to ours in terms of size and business mix (“Comparable Companies”), to assist us in determining the appropriate level of compensation for our NEOs.
The 2021 Benchmarking Data provided ranges of compensation levels at the Comparable Companies for executive positions like those held by our NEOs, including base salary and total compensation.
The Comparable Companies, which management selected with input from McLagan, included:
Eaton Vance Corp.Franklin Templeton InvestmentsGoldman Sachs Asset Management
Invesco Ltd.JP Morgan Asset ManagementMFS Investment Management
Morgan Stanley Invest. Manage.Neuberger Berman GroupNuveen Investments / TIAA
PIMCO LLCPrudential InvestmentsT. Rowe Price, Inc.
The Vanguard Group, Inc.
The 2021 Benchmarking Data indicated that the total compensation paid to each of our NEOs in 2021 fell within the ranges of total compensation paid to executives at the Comparable Companies.
The Compensation Committee considered this information in concluding that the compensation levels paid in 2021 to our NEOs were appropriate and reasonable.
Compensation Elements for Named Executive OfficersNEOs

We utilize a variety of compensation elements to achieve the goals described above, consisting of base salary, annual short-term incentive compensation awards (cash bonuses), a long-term incentive compensation award program, a defined contribution plan and certain other benefits, each of which we discuss in detail below:

Base Salaries
Base salaries comprise a relatively small portion of our named executive officers’NEOs’ total compensation. We consider individual experience, responsibilities and tenure with the firm when determining the narrow range of base salaries paid to our named executive officersNEOs (please refer to “Overview of Our President and CEO’s Compensation”Mr. Bernstein's Employment Agreement” below for information relating to Mr. Bernstein’s base salary and other compensation elements).
Annual Short-Term Incentive Compensation Awards (Cash Bonuses)
We provide our named executive officersNEOs with annual short-term incentive compensation awards in the form of cash bonuses.
We believe that annual cash bonuses, which generally reflect individual performance and the firm’s current year financial performance, provide a short-term retention mechanism for our named executive officersNEOs because such bonuses typically are paid during the last week of the year.
Annual cash bonuses in respect of 20182021 performance for each named executive officer (other than Mr. Bernstein)NEO were determined and paid in late December 2018.2021. These bonuses, and the 20182021 long-term incentive compensation awards described immediately below, were based on management’s evaluation, subject to the Compensation Committee’s review and approval, of each named executive officer’sNEO’s performance during the year, the firm's progress in advancing its Growth Strategy during the year, the performance of the named executive officer’sNEO’s business unit or function compared to business and operational goals established at the beginning of the year and the firm’s current-year financial performance.

performance. For more information regarding the factors considered when determining cash bonuses for named executive officers, see “Other Factors Considered When Determining Named Executive Officer Compensation” below.
In respect of 2018,2021, Mr. Bernstein received a cash bonus of $3,500,000$5,575,000 in accordance with the terms of the employment agreement into which he entered with the General Partner, AB and AB Holding as of May 1, 2017 (“CEO Employment Agreement”) and after review of Mr. Bernstein's performance during 20182021 by the Compensation Committee and other directors. Committee. Please refer to “Overview of Our President and CEO’s Compensation”Mr. Bernstein's Employment Agreement” below for additional information relating to Mr. Bernstein’s cash bonus and other compensation elements.
On February 13, 2017, the Board approved a grant to Mr. Gingrich of 883,653 restricted AB Holding Units with a grant date fair value of approximately $21 million, in lieu of cash bonus and year-end long-term incentive compensation awards for 2017, 2018 and 2019 for which Mr. Gingrich otherwise would have been eligible under our firm's Incentive Compensation Award Program ("ICAP"); provided, Mr. Gingrich is eligible to receive at the end of each such year an additional cash bonus, but only to the extent approved by the Compensation Committee. The Compensation Committee determined that a special cash bonus was warranted for Mr. Gingrich's performance in 2018 and awarded him a $1,000,000 cash bonus in recognition of his achievements during 2018, as described below in "Other Factors Considered When Determining Named Executive Officer Compensation."

Long-Term Incentive Compensation Awards
Long-term incentive compensation awards generally are denominated in restricted AB Holding Units. We utilize this structure to align our named executive officers’NEOs’ long-term interests directly with the interests of our Unitholders and indirectly with the interests of our clients, as strong performance for our clients generally contributes directly to increases in assets under managementAUM and improved financial performance for the firm.
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We believe that annual long-term incentive compensation awards provide a long-term retention mechanism for our named executive officersNEOs because such awards generally vest ratably over time; awards granted in 2021 generally vest in equal portions over three years, while awards granted in prior years generally vest over four years. We reduced the vesting period for awards in 2021 to help ensure our compensation framework remains highly competitive.
For 20182021 performance, these awards were granted in December 20182021 to each of Ms. Burke and Messrs. Bernstein, CranchDibadj, Sprules and WeisenseelCranch pursuant to the AB 2021 Incentive Compensation Award Program ("ICAP"), an unfunded, non-qualified incentive compensation plan, and the AB 2017 Long Term Incentive Plan, our equity compensation plan (“2017 Plan”). Mr. Gingrich did not receive a year-end award in December 2018 due to the terms set forth in his agreement relating to the above-described equity award he was granted in February 2017; please see "Chief Operating Officer Equity Award" below regarding an award he was granted in April 2018.
Prior to the date on which an award vests, the AB Holding Units underlying an award are restricted and are not permitted to be transferred. Upon vesting, the AB Holding Units underlying an award generally are distributed,delivered, unless the award recipient has, in advance, voluntarily elected to defer receipt to future periods or the award is structured with a delayed delivery date. Quarterly cash distributions on vested and unvested restricted AB Holding Units are delivered to award recipients when cash distributions are paid generally to Unitholders.
An award recipient who resigns or is terminated without cause prior to the vesting date is eligible to continue to vest in his or her long-term incentive compensation award subject to compliance with the restrictive covenants set forth in the applicable award agreement, including restrictions on competition, and restrictions on employee and client solicitation. In addition,Additionally, the award agreement provides for continued vesting in the event of an award recipient's retirement, subject to applicable restrictive covenants. To be eligible for retirement, an award recipient must provide notice of retirement, enter into a retirement agreement and satisfy a "Rule of 70," whereby the sum of the recipient's age and years of service must equal at least 70.
Clawbacks
The award agreement permits AB to claw-back the unvested portion of an award if the recipient fails to adhere to our risk management policies. As such, for accounting purposes, there is no employee service requirement and awards are fully expensed when granted. As used in this Item 11, “vest” refers to the time at which the awards are no longer subject to forfeiture for breach of these restrictions or risk management policies, which we discuss further below in “Consideration of Risk Matters in Determining Compensation.”
Chief Operating Officer Equity Award
In April 2018, Mr. Gingrich was granted a special restricted AB Holding Unit award with a grant date fair value of $14,000,000 in recognition of Mr. Gingrich’s continuing efforts to manage AB’s operations in a cost-effective manner, including his continuing leadership role in relocating our firm’s headquarters to Nashville. Mr. Gingrich's special award vests in four equal installments on December 1 of each of 2019, 2020, 2021 and 2022 based on Mr. Gingrich's continued service to AB and his moving to, and establishing his principal residence in Nashville, TN (subject to certain exceptions set forth in his award agreement), but no AB Holding Units are delivered until after December 1, 2022.
Relocation-related Performance Awards
In April 2018, Ms. Burke, Mr. Sprules, Mr. Cranch and Mr. Weisenseel each was granted a special restricted AB Holding Unit award with a grant date fair value of $4,000,000. Each award vests on December 1, 2022, and the underlying AB Holding Units are delivered promptly thereafter provided each executive continues to be employed by AB and each executive moves to and establishes his or

her principal residence in Nashville.Nashville, TN. Vesting of each executive’s AB Holding Units also is contingent on an assessment by the Compensation Committee, with appropriate input from the CEO,Mr. Bernstein, as to whether, and the extent to which:
•our firm’s headquarters relocation initiative is executed without significant disruption or reputational damage to AB;
•AB’s targets for cost savings and implementation costs for the relocation have been achieved; and
•the level of workplace talent and diversity in Nashville is satisfactory.

With respect to each of the above-referenced factors,criteria, the Compensation Committee, with appropriate input from our CEO, shall assessMr. Bernstein, assesses achievement of the factorscriteria both within the executive's business unit and with respect to our firm overall. TheIn December 2021, 2020 and 2019, Mr. Bernstein, on behalf of the Compensation Committee, shall, in each of December 2019, 2020 and 2021, adviseadvised each executive as to whetheremployed in December that his or her performance generally was progressing well with respect to each of the above-referenced criteria. A similar process is expected to be followed in December 2022. The awards to Messrs. Cranch and Weisenseel vested on track fora pro-rata basis in connection with their respective retirements in 2021.
Chief Legal Officer Retirement Agreement
As announced in a Form 8-K we filed on May 4, 2021, Mr. Cranch retired from AB, effective December 31, 2021 (the "LCRetirement Date"). He has transitioned his responsibilities to Mark Manley, who as of January 1, 2022, is leading our firm's Legal and Compliance Department as Global Head of Compliance and General Counsel.
The compensatory benefits under the executiveretirement agreement to receive which Mr. Cranch is entitled include:
•the full numbervesting on the LC Retirement Date and, per Mr. Cranch's election, delivery on December 31, 2027, of 121,569 AB Holding Units, which represents a pro rata vesting through the LC Retirement Date of the restricted AB Holding Units awarded.described immediately above in "Relocation-related Performance Awards;" and

•for a period of 26 weeks after the LC Retirement Date, his base salary shall continue to be paid, through regular payroll on regular payroll dates, at the rate of $400,000 (less applicable tax withholding and other payroll deductions).

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Former CFO Retirement Agreement
As announced in a Form 8-K we filed on August 26, 2020, John C. Weisenseel retired from AB, effective September 30, 2021 (the "JW Retirement Date"). He transitioned his Finance responsibilities to Mr. Dibadj, who assumed the role of CFO, effective as of February 12, 2021. Mr. Weisenseel served in a senior advisory role from February 12, 2021 until the JW Retirement Date.
The compensatory benefits under the retirement agreement to which Mr. Weisenseel is entitled include:
•a lump sum cash payment of $250,000 (less applicable tax withholding and other payroll deductions), which was made in the first pay period immediately after the JW Retirement Date;
•the vesting on the JW Retirement Date and, per Mr. Weisenseel's election, delivery on March 31, 2027, of 113,266 AB Holding Units, which represents a pro rata vesting through the JW Retirement Date of the restricted AB Holding Units described immediately above in "Relocation-related Performance Awards;" and
•until the JW Retirement Date and continuing for a period of 26 weeks thereafter, his base salary shall continue to be paid, through regular payroll on regular payroll dates, at the rate of $375,000 (less applicable tax withholding and other payroll deductions.
Defined Contribution Plan
U.S. employees of AB, including each of our named executive officers,NEOs, are eligible to participate in the Profit Sharing Plan for Employees of AB (as amended and restated as of January 1, 2015, as further amended as of January 1, 2017 and as further amended as of April 1, 2018, the “Profit Sharing Plan”), a tax-qualified retirement plan. The Compensation Committee determines the amount of company contributions (both the level of annual matching by the firm of an employee’s pre-tax salary deferral contributions and the annual company profit sharing contribution, if any).

With respect to 2018,2021, the Compensation Committee determined in November 2021 that employee deferral contributions would be matched on a dollar-for-dollar basis up to 5% of eligible compensation and that there would be no profit sharing contribution.

Other Benefits
Change in Control Plan
In December 2020, the Compensation Committee approved the AllianceBernstein Change in Control Plan for Executive Officers (the "CIC Plan"). The purpose of the CiC Plan is to provide certain benefits for each individual designated by our CEO as an executive officer (an "Executive Officer") in the event of a change in control ("CIC") of AB. The CIC Plan contains a change in control provision substantially similar to the change in control provision included in Mr. Bernstein's employment agreement (as described below in "Overview of Mr. Bernstein's Employment Agreement"). The provisions under the CIC Plan also are described in a compensatory table below entitled, “Potential Payments upon Termination or Change in Control.”
The CIC Plan provides that, in the event of a CIC, unless prior to the CIC, any unvested restricted unit awards (including ICAP awards) then held by an Executive Officer are honored or assumed, or new rights are substituted therefore, so that the Executive Officer's rights and entitlements after the CIC are substantially equivalent to or better than the Executives Officer's rights and entitlements under the award, each award will, prior to the CIC, immediately and fully vest and no longer be subject to forfeiture.
In addition, (i) if the Executive Officer's employment is terminated by AB, other than for cause, (ii) the Executive Officer resigns with good reason (as defined in the CIC Plan), or (iii) the Executive Officer dies or becomes disabled, within 12 months following a CIC, the Executive Officer will be entitled to receive the sum of (a) the Executives Officer's annual base salary at the time of his or her termination, and (b) the Executive Officer's most recent annual cash incentive compensation award, multiplied by two.
The CIC Plan defines CIC to include any transaction as a result of which EQH ceases to control AB, or a successor entity that conducts the business of AB. However, there would not be a CIC unless, as a result of the transaction, an entity other than EQH controls AB (or a successor to its business).
Life Insurance
Our firm pays the premiums associated with life insurance policies purchased on behalf of our named executive officers.NEOs.

Consideration of Risk Matters in Determining Compensation
Overview of 2018 Incentive Compensation Program

In respect of 2018 performance, each of2021, we considered whether our named executive officers who was employed on December 31, 2018 (other than Mr. Gingrich) received a portion of his or her year-end incentive compensation in the form of an annual cash bonus and a portion in the form of long-term incentive compensation awards. The split between the annual cash bonus and long-term incentive compensation varied depending on the named executive officer’s total compensation, with lower-paid executives receiving a greater percentage of their incentive compensation as cash bonuses than more highly-paid executives. (For additional information about these compensatory elements, see “Compensation Elementspractices for Named Executive Officers” above.) For Mr. Bernstein, his 2018 incentive compensation components were based generally on the terms set forth in the CEO Employment Agreement and review of his performance during 2018 by the Compensation Committee and other directors.
Although estimates are developed for budgeting and strategic planning purposes, our named executive officers’ incentive compensation is not correlated with meeting any specific targets. Instead, the aggregate amount of incentive compensation paid to our named executive officers, other than Messrs. Bernstein and Gingrich for 2018, generally is determined on a discretionary basis and primarily is a function of our firm’s current year financial performance but takes into account the performance goals described below. Amounts are awarded to help us achieve our goal of attracting, motivating and retaining top talent while also helping to ensure that our named executive officers’ goals are appropriately aligned with the goal of increasing our Unitholders’ return on their investment.
Senior management, with the approval of the Compensation Committee, confirmed that the appropriate metric to consider in determining the amount of incentive compensation paid to all employees, including our named executive officers, in respect of 2018 performance isNEOs, encourage unnecessary or excessive risk-taking and whether any risks arising from our compensation practices are reasonably likely to have a material adverse effect on our firm. For the ratio of adjusted employeereasons set forth below, we have determined that our current compensation and benefits expensepractices do not create risks that are reasonably likely to adjusted net revenues, which termshave a material adverse effect on our firm.

are described immediately below:
•
Adjusted employee compensation and benefits expense is our total employee compensation and benefits expense minus other employment costs such as recruitment, training, temporary help and meals, and excludes the impact of mark-to-market vesting expense, as well as dividends and interest expense, associated with employee long-term incentive compensation-related investments
•
Adjusted net revenues (see our discussion of “Management Operating Metrics” in Item 7)exclude investment gains and losses and dividends and interest on employee long-term incentive compensation-related investments. In addition, adjusted net revenues offset distribution-related payments to third parties as well as amortization of deferred sales commissions against distribution revenues. We also exclude additional pass-through expenses we incur (primarily through our transfer agent) that are reimbursed and recorded as fees in revenues. Additionally, 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 funds, and AB's investment gains and losses on its investment in such funds, that were eliminated in consolidation. Lastly, we include the impact of adoption of a revenue recognition accounting standard.
In addition, senior management, with the approval of the Compensation Committee, determined that the firm’s adjusted employee compensation and benefits expense generally should not exceed 50.0% of our adjusted net revenues, except in unexpected or unusual circumstances. As the table below indicates, in 2018, adjusted employee compensation and benefits expense amounted to approximately 47.5% of our adjusted net revenues (in thousands):
Net Revenues$3,367,361
Adjustments (see above)
(441,757)
Adjusted Net Revenues$2,925,604
  
Employee Compensation & Benefits Expense$1,378,811
Adjustments (see above)
9,551
Adjusted Employee Compensation & Benefits Expense$1,388,362
Adjusted Compensation Ratio47.5%

Our 2018 adjusted compensation ratio of approximately 47.5% reflects the need to keep compensation levels competitive with industry peers in order to attract, motivate and retain highly-qualified talent.

Benchmarking

In 2018, management engaged McLagan Partners (“McLagan”) to provide compensation benchmarking data for our named executive officers (“2018 Benchmarking Data”). The 2018 Benchmarking Data summarized 2017 compensation levels and 2018 salaries at selected asset management companies and banks comparable to ours in terms of size and business mix (“Comparable Companies”), to assist us in determining the appropriate level of compensation for the firm’s named executive officers.
The 2018 Benchmarking Data provided ranges of compensation levels at the Comparable Companies for executive positions similar to those held by each of our named executive officers, including base salary and total compensation.
Mr. Bernstein’s 2018 compensation was established pursuant to the CEO Employment Agreement and review of his performance during 2018 by the Compensation Committee and other directors (as discussed more fully below in “Overview of Our President and CEO’s Compensation”). Mr. Gingrich's 2018 long-term incentive compensation was established in connection with his relocation-related performance award, as discussed more fully above in "Long-Term Incentive Compensation Awards - Relocation-related Performance Awards.
The Comparable Companies, which management selected with input from McLagan, included:
Eaton Vance Corp.2021 Annual ReportFranklin Resources, Inc.Goldman Sachs Asset Management, L.P.
Invesco Ltd.JPMorgan Asset Management Inc.Legg Mason, Inc.
MFS Investment ManagementMorgan Stanley Investment Management Inc.Neuberger Berman LLC
Oppenheimer Funds Distributor, Inc.PIMCO LLCPrudential Investments
T. Rowe Price Group, Inc.TIAA Group / Nuveen InvestmentsThe Vanguard Group, Inc.151

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As described above in “Compensation Elements for NEOs – Long-Term Incentive Compensation Awards,” long-term incentive compensation awards generally are denominated in AB Holding Units that are not distributed until subsequent years, so the ultimate value that the total compensation paid to our named executive officers in 2018 generally fell within or belowemployee derives from the ranges of total compensation paid to executives ataward depends on the Comparable Companies.
The Compensation Committee considered this information in concluding that the compensation levels paid in 2018 to our named executive officers were appropriate and reasonable.
Other Factors Considered When Determining Named Executive Officer Compensation

For 2018, we based decisions about the incentive compensation of our named executive officers primarily on our assessment of each executive’s leadership, operational performance, and potential to enhance investment returns and service for our clients, all of which contribute to long-term Unitholder value. We do not utilize quantitative formulas when determining the incentive compensation of our named executive officers. Instead, we rely on our judgment about each executive’s performance in light of business and operational goals established at the beginning of the year and reviewed in the context of the current-year financial performance of the firm. We beginDenominating the award determination process, whichin restricted AB Holding Units and deferring their delivery is conducted by our CEOintended to sensitize employees to risk outcomes and COO working with other membersdiscourage them from taking excessive risks, whether relating to investments, operations, regulatory compliance and/or cyber security, that could lead to a decrease in the value of senior management, by determining the totalAB Holding Units and/or an adverse effect on the firm's long-term prospects. Furthermore, and as noted above in “Compensation Elements for NEOs – Long-Term Incentive Compensation Awards,” generally all outstanding long-term incentive compensation amounts available forawards include a particular year (as more fully explained above in “Overviewprovision permitting us to “claw-back” the unvested portion of 2018 Incentive Compensation Program”).
Our CEO and COO, as well asan employee’s long-term incentive compensation award if the Compensation Committee then considerdetermines that (i) the employee failed to adhere to existing risk management policies and (ii) as a number of key factors for eachresult of the named executive officers, other than foremployee’s failure, there has been or reasonably could be expected to be a material adverse impact on our CEO. Specific factors will vary amongfirm or the employee’s business units, among individuals and during different business cycles, so we do not adopt any specific weighting or formula under which these metrics are applied. Key factors are:
•the firm’s financial performance in the current year;
•the named executive officer’s performance compared to individual business and operational goals established at the beginning of the year;
•the firm’s strategic and operational considerations;
•total compensation awarded to the named executive officer in the previous year;
•the increase or decrease in the current year’s total incentive compensation amounts available;
•the contribution of the named executive officer to our overall financial results;
•the nature, scope and level of responsibilities of the named executive officer;
•the named executive officer’s execution of our firm’s culture of Relentless Ingenuity; and
•the named executive officer’s management effectiveness, talent development, and adherence to risk management and regulatory compliance.
Our CEO and COO then provided specific incentive compensation recommendations to the Compensation Committee, which recommendations were supported by the factors listed above. They also provided the Compensation Committee with the 2018 Benchmarking Data, which was not used in a formulaic or mechanical way to determine named executive officer compensation levels, but rather, as noted above, provided the Compensation Committee with a reference point for the compensation levels paid to executives at the Comparable Companies. The Compensation Committee then made the final incentive compensation decisions for Ms. Burke and Messrs. Gingrich, Cranch and Weisenseel. In addition, the Compensation Committee, as described above in “Annual Short-Term Incentive Compensation Awards (Cash Bonuses),” determined to award Mr. Gingrich a cash bonus of $1,000,000 in recognition of his achievements during 2018, as described below in the table below.
We have described in the table below the business and operational goals established at the beginning of 2018 for our named executive officers, other than Mr. Bernstein, and their achievements during 2018:







Named Executive Officer2018 Business and Operational Goals2018 Achievements
James A. Gingrich
COO
1. increase operating efficiency/margins;
2. optimize strategy and sales efforts of Retail, Institutions and Private Wealth;
3. enhance planning and organizational processes;
4. optimize revenue and profitability of Bernstein Research Services;
5. foster a culture of meritocracy, empowerment and accountability among business leaders; and
6. recruit and retain top talent.
1. improved and diversified client flows across channels and services;
2. contained operating costs and improved adjusted operating margin;
3. conceived and led relocation of corporate headquarters, and identified significant new opportunities to improve cost structure both in 2018 and future years;
4. oversaw development and commercialization of previously acquired alternatives teams (e.g., Arya Partners); and
5. oversaw organizational, technology and process changes within distribution functions designed to enhance effectiveness and productivity.
Kate C. Burke
Head of Human Capital and Chief Talent Officer
1. implement initial phase of headquarters relocation initiative, including communication, recruiting, compensation, culture and community relations strategies;
2. enhance recognition culture to drive engagement;
3. develop and retain high performing talent;
4. review U.S. medical and pharmacy plans to ensure competitiveness and attractiveness of AB's benefit offerings;
5. incorporate more formalized diversity and inclusion strategies across Human Capital Department processes to foster an environment in which diverse talent thrives and progresses;
6. expand performance rating pilot to improve transparency and performance culture; and
                                                                                                  7. continue to refine the firm’s Human Capital operating model.
1. successfully built talent acquisition and local Human Capital team to support headquarters relocation initiative;
2. maintained low voluntary turnover among high-performing employees;
3. implemented development programs to provide coaching and skill enhancement to select employees;
4. implemented new mobile employee recognition program that enables employees across the firm to assess the contributions of colleagues in real time;
5. completed a comprehensive review of U.S. medical plans, resulting in a change of carriers, improved benefits and cost savings;
6. implemented diversity and inclusion best practices in talent acquisition, development and benefits, and completed inclusiveness training to global SVP population;
7. expanded performance rating pilot globally to multiple business units; and
8. continued to strengthen key processes and systems under “Center of Excellence” model.

Laurence E. Cranch
General Counsel
1. address new compliance challenges and maintain and improve the firm's good compliance record;
2. improve the level of service to internal clients at AB;
3. proactively manage AB's various legal and regulatory risks;
4. continue to develop and retain high quality talent in the Legal and Compliance Department; and
5. continue aggressive expense management.
1. provided leadership in successfully implementing compliance solutions in response to each new compliance requirement that became effective in 2018;
2. received complementary feedback from AB business leaders relating to the level and quality of service of the Legal and Compliance Department, particularly relating to work supporting the firm's headquarters relocation initiative and legal work required to help facilitate the EQH's IPO and secondary offering;
3. underwent several significant regulatory examinations, none of which resulted in any significant adverse findings or enforcements proceedings;
4. remained free of significant litigation, reflecting our pragmatic and aggressive program to avoid situations that could produce disputes and, where disputes do arise, resolve them on favorable terms;
5. conducted extensive work on the selection and retention process required to form the group of employees relocating to Nashville and on the recruitment of qualified individuals locally to staff open positions; and
6. overall, with respect to ongoing and routine legal matters, successfully maintained outside counsel expense within a tight budget set at the beginning of 2018.

John C. Weisenseel
CFO
1. increase the firm’s profitability by controlling expenses;
2. assess capital requirements across domestic and international entities and reduce excess capital where warranted, thereby increasing the efficiency of the firm's global cash utilization;
3. manage business funding requirements within the context of the firm’s capital and liquidity;
4. continue to streamline the firm’s office footprint and related cost structure;
5. evaluate and support new business development opportunities;
6. continue communications with the firm’s investors and credit rating agencies; and
7. identify and develop the next generation of leaders in the Finance and Administrative Services Departments.
1. increased adjusted operating margin by 140 basis points compared to 2017;
2. increased cash utilization by reducing capital held in legal entities and repatriating foreign cash dividends to the U.S. without a significant increase in taxes and reducing average debt outstanding by over $130 million, or approximately 27%, to $350 million;
3. renewed and decreased to $800 million the credit facility supporting the firm's commercial paper program, resulting in lower upfront and ongoing fees while securing sufficient funding liquidity;
4. played a key role in the firm's relocation initiative, including selection of the permanent site in Nashville, negotiation of state and city incentives, modeling the transaction costs and ongoing expense savings, and proactively leading the relocation of the Accounting and Tax Departments;
5. provided accounting and tax guidance related to our firm's expected acquisition of an institutional research firm;
6. maintained active discussion with AB’s investor community and credit rating agencies and participated in asset management industry investor conferences; and
7. implemented several staffing changes, particularly relating to the relocation initiative, resulting in selectively upgrading the talent pool and diversity within the pool, while ultimately reducing the associated compensation costs.

As indicated in the table above, each of the named executive officers included in the table successfully achieved his or her goals in 2018. The compensation of each of these named executive officers reflected Mr. Bernstein’s and the Compensation Committee’s judgment in assessing the importance of the officer's achievements to our firm’s financial results.

unit.
Overview of Our President and CEO’s CompensationMr. Bernstein's Employment Agreement

Pursuant to the CEO Employment Agreement, Mr. Bernstein is servingserved as our President and CEO for aan initial term that commenced on May 1, 2017 and endsended on May 1, 2020, provided that the2020. The initial term shall automatically extendwas extended for one additional year on May 1, 2020 and automatically extends each anniversaryMay thereafter, beginning May 1, 2021, unless the CEO Employment Agreement is terminated in accordance with its terms (“Employment Term”).

The terms of the CEO Employment Agreement were the result of arm’s length negotiations between Mr. Bernstein and senior executives at AXA.AXA and EQH. The Board then approved the CEO Employment Agreement after having considered, among other things, the compensation package provided to Mr. Bernstein’s predecessor, the 2016 compensation and 2017 expected compensation of AB’s other executive officers and Mr. Bernstein’s compensation at his former employer.

The Compensation Committee, during its regular meeting held on December 11, 2018, amended Mr. Bernstein's employment agreementthe CEO Employment Agreement such that notwithstanding any contrary or inconsistent provision set forth in the employment agreement, any annual

equity award granted to Mr. Bernstein under Section 4(c)(ii) of the employment agreement, which section relates to equity awards made in 2018 and subsequent years during the Employment Term shallwill be granted in all respects in accordance with AB's compensation practices and policies generally applicable to AB's executive officers as in effect from time to time ("SPB First Amendment").

Additionally, the Compensation Committee, during its regular meeting held on December 10, 2019, further amended the CEO Employment Agreement by:
•increasing Mr. Bernstein’s severance payments if his employment is terminated involuntarily, without cause, from one year’s base salary and bonus to one and a half year’s base salary and bonus;
•excluding from the definition of change in control AB Holding ceasing to be publicly traded;
•removing from the circumstances that give rise to Mr. Bernstein’s ability to terminate the agreement for “good reason” his ceasing to be the CEO of a publicly traded entity; and
•eliminating Mr. Bernstein’s entitlement to a gross-up for any excise tax on his parachute payments, which would have been pertinent only if Mr. Bernstein had been terminated involuntarily prior to December 31, 2019.
Elements of Mr. Bernstein’sBernstein’s Compensation

Base Salary
Mr. Bernstein’s annual base salary under the CEO Employment Agreement has been, and continues to be, $500,000. This amount is consistent with our firm’s policy to keep base salaries of executives and other highly-compensated employees low in relation to total compensation. Any future increase to Mr. Bernstein's base salary is entirely inat the discretion of the Compensation Committee.

Cash Bonus
Under the CEO Employment Agreement, Mr. Bernstein was entitled to be paid a cash bonus at a target level of $3,000,000 in 2018,2021, subject to review and increase from time to time by the Compensation Committee, in its sole discretion. As a result of a review of Mr. Bernstein's performance during 20182021 by the Compensation Committee, and other directors, Mr. Bernstein was paid a cash bonus of $3,500,000.$5,575,000. In determining Mr. Bernstein's cash bonus, the Compensation Committee considered the significant progress AB made acrossin advancing its three firm-wide initiatives in 2018, which are:

deliver differentiated return streams to clients;
commercialize and scale our suite of services; and
continue our rigorous focus on expense management.  

The firm's highlights during 2018 included active equity net inflows in our retail and institutional channels, the highest amount of gross sales in our private wealth channel in 10 years, and an expansion of our firm's adjusted operating margin by 140 bps to 29.1%. The Compensation Committee also consideredGrowth Strategy, Mr. Bernstein's leadershipperformance in our firm's continuing processlight of relocating its headquarters to Nashville, TN.

the target metrics included in his performance scorecard and Mr. Bernstein's individual achievements during 2021, as described above.
Restricted AB Holding Units
Commencing in 2018 and during the remainder of the Employment Term, Mr. Bernstein is eligible to receive annual equity awards with a grant date fair value equal to $3,500,000, subject to review and increase by the Compensation Committee, in its sole discretion, in accordance with AB’s compensation practices and policies generally applicable to the firm’s executive officers as in effect from time to time. The Compensation Committee approved an equity award to Mr. Bernstein with a grant
152AllianceBernstein
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date fair value equal to $4,000,000$5,225,000 during its regular meeting held on December 11, 2018.November 2021. The Compensation Committee determined Mr. Bernstein's equity award based on the review process described immediately above.

As a result of the SPB First Amendment, the equity award granted to Mr. Bernstein in December 2021 is subject to the same ICAP-related terms and conditions as awards granted to other executive officers at that time, which terms and conditions are described above in "Compensation Elements for NEOs - Long-Term Incentive Compensation Awards."
Perquisites and Benefits

Under the CEO Employment Agreement, Mr. Bernstein is eligible to participate in all benefit plans available to executive officers and, for his safety and accessibility, a company car and driver for business and personal use.

Severance and Change in Control Benefits

The CEO Employment Agreement includes severance and change-in-control provisions, which are highlighted below and. These provisions also are described in a compensatory table below under the headingentitled, “Potential Payments upon Termination or Change in Control.” We believe that these severance and change-in-control provisions assist in retaining our CEO and, in the event of a change in control, provide protection to Mr. Bernstein so he is not distracted by personal or financial situations at a time when AB needs him to remain focused on his responsibilities.

If Mr. Bernstein is terminated without “cause” or resigns for “good reason” (as such terms are defined in the CEO Employment Agreement), and he signs and does not revoke a waiver and release of claims, he will receive the following:

•A cash payment equal to (a) the sum of his current base salary and his bonus opportunity amount, multiplied by one (1), if Mr. Bernstein resigns for "good reason," or (b) the sum of his current base salary and his bonus opportunity amount, multiplied by one and a half (1.5), if Mr. Bernstein's employment is terminated other than for "cause," or because of his death or disability;
•a cash payment equal to the sum of (a) his current base salary and (b) his bonus opportunity amount;
•a pro rata bonus based on actual performance for the fiscal year in which the termination occurs;
Ÿ•had Mr. Bernstein's employment terminated as specified above prior to May 1, 2021, immediate vesting of the outstanding portion of the equity award he was granted in May 2017;
Ÿdelivery of AB Holding Units in respect of the equity award he was granted in May 2017 (subject to any withholding requirements);
Ÿmonthly payments equal to the cost of COBRA coverage for the COBRA coverage period; and
Ÿfollowing the COBRA coverage period, access to participation in AB’s medical plans as in effect from time to time at Mr. Bernstein’s (or his spouse’s) sole expense.

As a result of the SPB Amendment, the equity award he was granted in May 2017;
•has Mr. Bernstein's employment terminated as specified above prior to Mr. BernsteinMay 1, 2021, delivery of AB Holding Units in December 2018 is subjectrespect of the equity award he was granted in May 2017 (subject to any withholding requirements);
•a pro rata bonus based on actual performance for the fiscal year in which the termination occurs;
•monthly payments equal to the same ICAP-related termscost of COBRA coverage for the COBRA coverage period; and conditions
•following the COBRA coverage period, access to participation in AB’s medical plans as awards awards grantedin effect from time to other executive officerstime at that time, which terms and conditions are described above in "Compensation Elements for Named Executive Officers - Long-Term Incentive Compensation Awards."

Mr. Bernstein’s (or his spouse’s) sole expense.
If, during the 12 months following a change in control, Mr. Bernstein is terminated without cause or resigns for good reason, he will receive the amounts described above, except that he will receive a cash payment equal to two (2) times the sum of (a) his current base salary and (b) his bonus opportunity amount.

In the event ofHad a change in control occurred or in the event thathad Mr. Bernstein’sBernstein's employment isbeen terminated because the CEO Employment Agreement ishad not been renewed (other than for cause), prior to May 1, 2021, the equity award he was granted in May 2017 willwould have immediately vestvested and AB Holding Units in respect of any such award shall bewould have been delivered by AB to him (subject to any withholding obligations).

In the event any payments constitute “golden parachute payments” within the meaning of Section 280G of the Code and would be subject to an excise tax imposed by Section 4999 of the Code, such payments shallwill be reduced to the maximum amount that does not result in the imposition of such excise tax, but only if such reduction results in Mr. Bernstein receiving a higher net-after tax amount than he would receive absent such reduction. If a change in control occurs prior to January 1, 2020, to the extent that payments to Mr. Bernstein would be subject to the excise tax under Section 4999 of the Code, Mr. Bernstein shall be entitled to a gross-up payment to ensure that he will retain an amount equal to the excise tax imposed upon such payments, but if the payments do not exceed 110% of the statutory limit imposed by Section 280G of the Code, the payments shall be reduced to the maximum amount that does not result in the imposition of such excise tax.

Mr. Bernstein is subject to a confidentiality provision, in addition to covenants with respect to non-competition during his employment and six months thereafter and non-solicitation of customers and employees for 12 months following his termination of employment.

A change in control is defined as, among other things:things, EQH and its majority-owned subsidiaries ceasing to control the election of a majority of the Board.
•EQH and its majority-owned subsidiaries ceasing to control the election of a majority of the Board; or
•AB Holding, or any successor thereto, ceasing to be a publicly traded entity.

Mr. Bernstein negotiated the severance and change-in-control provisions described immediately above to have the security and flexibility to focus on the business and preserve the value of his long-term incentive compensation. The Board, AXA and AXAEQH determined that these provisions were reasonable and appropriate because they were necessary to recruit and retain Mr. Bernstein and provided Mr. Bernstein with effective incentives for future performance. The Board and AXA determined to limit the applicability

2021 Annual Report153
Table of the excise tax gross-up provision as the application of the excise tax is more burdensome on newly hired employees.Contents

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The Board, AXA and AXAEQH also concluded that the change-in-control and termination provisions in the CEO Employment Agreement fit within AB’s overall compensation objectives because these provisions, which align with AB’s goal of providing its executives with effective incentives for future performance, also:
•permitted AB to recruit and retain a highly-qualified CEO;
•permitted AB to recruit and retain a highly-qualified CEO;
•aligned Mr. Bernstein’s long-term interests with those of AB’s Unitholders and clients;
•were consistent with AXA’s and the Board’s expectations with respect to the manner in which AB and AB Holding would be operated during Mr. Bernstein’s tenure; and
•were consistent with the Board’s expectations that Mr. Bernstein would not be terminated without cause and that no steps would be taken that would provide him with the ability to terminate the agreement for good reason.
•aligned Mr. Bernstein’s long-term interests with those of AB’s Unitholders and clients;

•were consistent with AXA’s, EQH's and the Board’s expectations with respect to the manner in which AB and AB Holding would be operated during Mr. Bernstein’s tenure; and

•were consistent with the Board’s expectations that Mr. Bernstein would not be terminated without cause and that no steps would be taken that would provide him with the ability to terminate the agreement for good reason.
AXA Equitable Holdings Compensation awarded by EQH to Mr. Bernstein, Ms. Burke and Mr. Dibadj
The board of directors ofIn February 2021, EQH granted to Mr. Bernstein, in 2018 connection with his membership on the EQH Management Committee:
•a transaction incentiverestricted stock unit award (for EQH common stock) with a grant date fair value of $740,000$340,000; and
•a performance share award (for EQH common stock) with a grant date fair value of $510,000, which can be earned subject to EQH’s total shareholder return relative to its peer group.
Additionally, in February 2021, EQH granted to each of Ms. Burke and Mr. Dibadj, in connection with EQH's IPO and Mr. Bernstein'stheir membership on the EQH Management Committee. Committee:
•a restricted stock unit award (for EQH common stock) with a grant date fair value of $40,000; and
•a performance share award (for EQH common stock) with a grant date fair value of $60,000, which can be earned subject to EQH’s total shareholder return relative to its peer group.
Mr. Bernstein, Ms. Burke and Mr. Dibadj may receive additional equity or cash compensation from AXA Equitable HoldingsEQH in the future related to histheir service on the ExecutiveEQH Management Committee. Any amounts paid to Mr. Bernstein by AXA Equitable Holdings, including the 2018 award, do not impact AB’s compensation expenses.

CEO Pay Ratio

In 2018,2021, the compensation of Mr. Bernstein, our President and CEO, was approximately 5879 times the median pay of our employees, resulting in a 58: 79:1 CEO Pay Ratio.

We identified our median employee by examining 20182021 total compensation for all individuals, excluding Mr. Bernstein, who were employed by our firm as of December 31, 2018,2021, the last day of our payroll year. We included all of our employees in this process, whether employed on a full-time or part-time basis. We did not make any assumptions or estimates with respect to total compensation, but we did adjust compensation paid to our non-U.S. employees during our 20182021 fiscal year based on the average monthly exchange rates for the 12-month period ending September 30, 20182021 (data compiled in fourth quarter) between the local currencies in which such employees are paid and U.SU.S. dollars. We define “total compensation” as the aggregate of base salary (plus overtime, as applicable), commissions (as applicable), cash bonus and the grant date fair value of long-term incentive compensation awards.

After identifying the median employee based on total compensation, we calculated total compensation in 20182021 for such employee using the same methodology we use for our named executive officers NEOs as set forth below in the Summary Compensation Table for 20182021.

As illustrated in the table below, our 20182021 CEO Pay Ratio is 58: 1:79:1:
Seth BernsteinMedian Employee
Base salary ($)500,000 125,000 
Cash bonus ($)5,575,000 30,000 
Stock awards ($)(1)
6,075,000 — 
All other compensation ($)(2)
142,813 1,550 
Total ($)12,292,813 156,550 
2021 CEO Pay Ratio79:1
 Seth BernsteinMedian Employee 
Base salary ($)500,000
142,835
 
Cash bonus ($)3,500,000
13,093
 
Stock awards ($)4,740,000
—
 
All other compensation ($) (1)
344,847
—
 
    
Total ($)9,084,847
155,928
 
    
2018 CEO Pay Ratio  58: 1
(1)Includes (i) an award granted by AB of restricted AB Holding Units with a grant date fair value of $5,225,000 and (ii) awards granted by EQH with an aggregate grant date fair value of $850,000, as more fully described above in “Compensation awarded by EQH to Mr. Bernstein.” For additional information, please refer to the compensatory tables below in this Item 11.
_____________________
(1) (2)For a description of Mr. Bernstein’s other compensation, please refer to the Summary Compensation Table for 20182021 below.

Compensation Committee

The Compensation Committeemedian employee's other compensation consists of Ms. Fallon-Walsh (Chair) and Messrs. Audet, de Oliveira, Kaye, Pearson and Zoellick. The Compensation Committee held three regular meetings and two special meetings in 2018.

As discussed in “NYSE Governance Matters” in Item 10, AB Holding, as a limited partnership, is exempt from NYSE rules that require public companies to have a compensation committee consisting solely of independent directors. EQH owns, directly and through various subsidiaries, an approximate 65.2% economic interest in AB (as of December 31, 2018), and compensation expense is a significant component of our financial results. For these reasons, Mr. Pearson, director and President and CEO of EQH, was elected as a member of the Compensation Committee as of February 12, 2019, and any action taken by the Compensation Committee requires his affirmative vote or consent.

The Compensation Committee has general oversight of compensation and compensation-related matters, including:

$1,550 profit sharing plan contribution.
•154determining cash bonuses;
•determining contributions and awards under incentive plans or other compensation arrangements (whether qualified or non-qualified) for employees of AB and its subsidiaries, and amending or terminating such plans or arrangements or any welfare benefit plan or arrangement or making recommendations to the Board with respect to adopting any new incentive compensation plan, including equity-based plans;
•reviewing and approving the compensation of our CEO, evaluating his performance, and determining and approving his compensation level based on this evaluation; and
•reviewing and discussing the CD&A, and recommending to the Board its inclusion in each of AB’s and AB Holding’s Form 10-K and, when applicable, proxy statements.AllianceBernstein

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The Compensation Committee’s year-end process generally has focused on the cash bonuses and long-term incentive compensation awards granted to senior management. Mr. Bernstein, working with Mr. Gingrich and other members of senior management, provides recommendations for individual employee awards to the Compensation Committee for its consideration. As part of this process, management provides the committee with compensation benchmarking data from one or more compensation consultants. For 2018, we paid $32,100 to McLagan for executive compensation benchmarking data and an additional $278,334 for survey and consulting services relating to the amount and form of compensation paid to employees other than executives.Part III

The Compensation Committee held its regularly-scheduled meeting regarding year-end compensation on December 11, 2018, at which meeting it discussed and approved senior management’s compensation recommendations. The Compensation Committee did not retain its own consultants.

The Compensation Committee’s functions are more fully described in the committee’s charter, which is available on-line in the “Management & Governance” section of our Internet Site.

Other Compensation-Related Matters

AB and AB Holding are, respectively, private and public limited partnerships, andpartnerships. They are subject to taxes other than federal and state corporate income tax (see “Structure-related(see “Structure-related Risks” in Item 1A and Note 21 to AB’s consolidated financial statements in Item 8). Accordingly, Section 162(m) of the Code, which limits tax deductions relating to executive compensation otherwise available to an entity taxed as a corporation, is not applicable to either AB or AB Holding for 2018.

2021.
Compensation Committee Interlocks and Insider Participation

Mr. Pearson is a director and the President and CEO of EQH, the parent company of the General Partner.

No executive officer of AB serves as (i) a member of a compensation committee or (ii) a director of another entity, an executive officer of which serves as a member of AB’s Compensation Committee.

Compensation Committee Report

The members of the Compensation Committee reviewed and discussed with management the Compensation Discussion and Analysis set forth above and, based on such review and discussion, recommended to the Board its inclusion in this Form 10-K.

Kristi Matus (Chair)Daniel Kaye
Mark PearsonBertram Scott
Barbara Fallon-Walsh (Chair)2021 Annual ReportPaul L. Audet155
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Ramon de OliveiraDaniel G. KayeSummary Compensation Table for 2021
Mark PearsonRobert B. Zoellick











Consideration of Risk Matters in Determining Compensation

In 2018, we considered whether our compensation practices for employees, including our named executive officers, encourage unnecessary or excessive risk-taking and whether any risks arising from our compensation practices are reasonably likely to have a material adverse effect on our firm. For the reasons set forth below, we have determined that our current compensation practices do not create risks that are reasonably likely to have a material adverse effect on our firm.

As described above in “Compensation Elements for Named Executive Officers – Long-Term Incentive Compensation Awards,” long-term incentive compensation awards generally are denominated in AB Holding Units that are not distributed until subsequent years, so the ultimate value that the employee derives from the award depends on the long-term performance of the firm. Denominating the award in restricted AB Holding Units and deferring their delivery is intended to sensitize employees to risk outcomes and discourage them from taking excessive risks, whether relating to investments, operations, regulatory compliance and/or cyber security, that could lead to a decrease in the value of the AB Holding Units and/or an adverse effect on the firm's long-term prospects. Furthermore, and as noted above in “Compensation Elements for Named Executive Officers – Long-Term Incentive Compensation Awards,” generally all outstanding long-term incentive compensation awards include a provision permitting us to “claw-back” the unvested portion of an employee’s long-term incentive compensation award if the Compensation Committee determines that (i) the employee failed to adhere to existing risk management policies and (ii) as a result of the employee’s failure, there has been or reasonably could be expected to be a material adverse impact on our firm or the employee’s business unit.


Summary Compensation Table for 2018

Total compensation of our named executive officersNEOs for 2018, 20172021, 2020 and 2016,2019, as applicable, is as follows:
Name and Principal PositionYearSalary
($)		Bonus
($)
Stock Awards(1)(2)
($)
Option Awards(3) ($)
All Other
Compensation
($)		Total
($)
Seth P. Bernstein(4)(5)
2021500,000 5,575,000 6,075,000 — 142,813 12,292,813 
President and CEO2020500,000 4,015,000 4,585,051 250,003 52,509 9,402,563 
2019500,000 3,850,000 4,750,026 250,004 94,859 9,444,889 
Kate C. Burke(6)
2021400,000 2,275,000 1,925,000 — 15,455 4,615,455 
Chief Operating Officer and2020300,000 1,665,000 1,285,000 — 19,517 3,269,517 
Head of Private Wealth2019300,000 1,415,000 1,035,000 — 60,716 2,810,716 
Ali Dibadj(6)(7)
2021400,000 2,025,000 1,675,000 — 15,130 4,115,130 
CFO & Head of Strategy2020400,000 945,000 665,000 14,880 2,024,880 
Karl Sprules(8)
2021400,000 1,725,000 1,275,000 — 42,040 3,442,040 
Head of Global Technology and Operations
Laurence E. Cranch(9)
2021400,000 1,025,000 575,000 — 18,208 2,018,208 
Chief Legal Officer2020400,000 940,000 660,000 — 17,958 2,017,958 
2019400,000 940,000 660,000 — 17,708 2,017,708 
John C. Weisenseel(10)
2021288,462 — — — 338,719 627,181 
Former CFO2020375,000 1,147,500 842,500 — 16,824 2,381,824 
2019375,000 1,147,500 842,500 — 15,677 2,380,677 
(1)The figures in the “Stock Awards” column provide the aggregate grant date fair value of the awards calculated in accordance with FASB ASC Topic 718. For the assumptions made in determining the AB Holding Unit award values, see Note 19 to AB’s consolidated financial statements in Item 8.
(2)See “Grants of Plan-Based Awards in 2021” below.
(3)The figures in the "Option Awards" column provides the grant date fair values of Mr. Bernstein's awards (which were issued by EQH) calculated in accordance with FASB ASC Topic 718. The fair value of EQH stock options is calculated by EQH using the Black-Scholes option pricing model. The expected EQH dividend rate is based on market consensus. EQH share price volatility is estimated on the basis of implied volatility, which is checked by EQH against an analysis of historical volatility to ensure consistency. The effect of expected early exercise is accounted for through the use of an expected life assumption based on historical data.
(4)See "Overview of Mr. Bernstein's Employment Agreement" and "Compensation Awarded by EQH to Mr. Bernstein, Ms. Burke and Mr. Dibadj" above in CD&A for a description of Mr. Bernstein's compensatory elements. Mr. Bernstein's compensation also is disclosed by EQH.
(5)The "Stock Awards" column for 2021 includes the grant date fair value of the restricted stock unit award (grant date fair value of $340,000) and the performance share award (grant date fair value of $510,000) Mr. Bernstein received from EQH in February 2021. The "Stock Awards" column for 2020 includes the grant date fair value of the restricted stock unit award (grant date fair value of $250,019) and the performance share award (grant date fair value of $500,031) Mr. Bernstein received from EQH in February 2020. The "Stock Awards" column for 2019 includes the grant date fair value of the restricted stock unit award (grant date fair value of $250,010) and the performance share award (grant date fair value of $500,016) Mr. Bernstein received from EQH in February 2019.
(6)The "Stock Awards" column for 2021 includes the grant date fair value of the restricted stock unit award (grant date fair value of $40,000) and the performance share award (grant date fair value of $60,000) Ms. Burke and Mr. Dibadj each received from EQH in February 2021.
(7)We have not provided 2019 compensation for Mr. Dibadj as he was not deemed to be a named executive officer in that year.
(8)We have not provided 2020 or 2019 compensation for Mr. Sprules as he was not deemed to be a named executive officer in those years.
(9)Mr. Cranch retired as our firm's Chief Legal Officer on December 31, 2021.
(10)Mr. Weisenseel retired as our CFO in February 2021 and from our firm generally on September 30, 2021.
Name and
Principal  Position
 Year Salary($) Bonus($) 
Stock Awards(1)(2)
($)
 
All Other
Compensation ($)
 Total($)
Seth P. Bernstein(3)(4)
 2018 500,000
 3,500,000
 4,740,000
 344,847
 9,084,847
President and CEO 2017 334,615
 3,000,000
 3,500,003
 148,274
 6,982,892
             
James A. Gingrich(5)(6)(7)
 2018 400,000
 1,000,000
 14,000,019
 39,912
 15,439,931
Chief Operating Officer 2017 400,000
 1,000,000
 20,986,759
 37,801
 22,424,560
  2016 400,000
 3,540,000
 3,260,000
 36,645
 7,236,645
             
Laurence E. Cranch(8)
 2018 400,000
 940,000
 4,660,009
 92,276
 6,092,285
General Counsel 2017 400,000
 940,000
 660,000
 17,208
 2,017,208
  2016 400,000
 890,000
 610,000
 18,441
 1,918,441
             
John C. Weisenseel(8)
 2018 375,000
 1,147,500
 4,842,509
 68,433
 6,433,442
CFO 2017 375,000
 1,090,000
 785,000
 15,177
 2,265,177
  2016 375,000
 977,500
 672,500
 14,927
 2,039,927
             
Kate C. Burke(8)(9)
 2018 300,000
 785,000
 4,440,009
 14,200
 5,539,209
Head of Human Capital & Chief Talent Officer 2017 300,000
 740,000
 410,000
 14,266
 1,464,266
             

(1)156
The figures in the “Stock Awards” column provide the aggregate grant date fair value of the awards calculated in accordance with FASB ASC Topic 718. For the assumptions made in determining these values, see Note 18 to AB’s consolidated financial statements in Item 8.
AllianceBernstein
(2)
See “Grants of Plan-based Awards in 2018” below for information regarding the 2018 long-term incentive compensation awards granted to our named executive officers.
(3)
See "Overview of Our President and CEO's Compensation" above for a description of Mr. Bernstein's compensatory elements.
(4)The "Stock Awards" column includes the grant date fair value of the transaction incentive award Mr. Bernstein received from EQH in May 2018. EQH granted to Mr. Bernstein 18,500 restricted EQH stock units under the EQH 2018 Omnibus Equity Incentive Plan, which had a grant date fair value of $740,000.
(5)
See "Chief Operating Officer Equity Award" above for a description of the restricted AB Holding Unit award granted to Mr. Gingrich in April 2018.
(6)On February 6, 2018, it was agreed that Mr. Gingrich's eventual retirement from AB shall be treated as a "termination without cause" with respect to the continued vesting of long-term compensation awards granted in years prior to 2017 under AB's Incentive Compensation Award Program.
(7)On February 13, 2017, the Board approved a grant to Mr. Gingrich of 883,653 restricted AB Holding Units with a grant date fair value of approximately $21 million (based on the average closing price on the NYSE of an AB Holding Unit for the period covering the four trading days immediately preceding the grant date, the grant date and the five trading days immediately following the grant date), in lieu of cash bonus and year-end long-term incentive compensation awards for 2017, 2018 and 2019 for which Mr. Gingrich otherwise would have been eligible under the Incentive Compensation Program; provided, Mr. Gingrich is eligible to receive at the end of each such year an additional cash bonus, but only to the extent approved by the Compensation Committee. Mr. Gingrich's restricted AB Holding Units vested one-third on each of December 1, 2017 and 2018 and the remaining units will vest on December 1, 2019, provided, with respect to each installment, Mr. Gingrich continues to be employed by our firm.
(8)
See "Relocation-related Performance Awards" above for a description of the restricted AB Holding Unit awards granted to Ms. Burke, Mr. Cranch and Mr. Weisenseel in April 2018.
(9)We have not provided 2016 compensation for Ms. Burke as she was not a named executive officer in 2016.

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The “All Other Compensation” column includes the aggregate incremental cost to our company of certain other expenses and perquisites. For 2018,2021, this column includes the following:
NamePersonal
Use of Car
and Driver
($)		Contributions
to Profit
Sharing Plan
($)		Life
Insurance
Premiums
($)
Financial
Planning
Assistance
($)
Other(2)
($)
Seth P. Bernstein124,725 (1)14,500 3,564 — 24 
Kate C. Burke— 14,500 955 — — 
Ali Dibadj— 14,500 630 — — 
Karl Sprules— 14,500 2,610 24,930 
Laurence E. Cranch— 14,500 3,708 — — 
John C. Weisenseel— — 1,881 — 336,838 
Name 
Personal Use of Car and Driver
($)
 Contributions to Profit Sharing Plan ($) 
Life Insurance Premiums
($)
 
Relocation and/or Financial Planning Assistance
($)
 Other ($)
Seth P. Bernstein 320,685
(1) 
12,500
 2,322
 9,340
 —
James A. Gingrich —
 13,750
 2,772
 23,390
 —
Laurence E. Cranch —
 13,750
 3,708
 74,818
 —
John C. Weisenseel —
 13,750
 1,677
 53,006
 —
Kate C. Burke —
 13,750
 450
 —
 —
(1)The amount reflects the incremental cost to us attributable to commuting and other non-business use. We made available to Mr. Bernstein a car and driver for security and business purposes. Car and driver services were contracted through a third party. The cost of providing a car is determined annually and includes, as applicable, driver compensation, annual car lease, insurance cost and various miscellaneous expenses such as fuel and car maintenance.

(1)Includes auto lease costs ($16,689) and driver compensation and other car-related expenses ($303,996).

(2)The amount set forth in the table for Mr. Weisenseel includes severance of $336,538 and a phone stipend of $300; the amount for Mr. Bernstein represents a phone stipend.
Grants of Plan-basedPlan-Based Awards in 2018

2021
Grants of awards under the 20182017 Plan, our equity compensation plan, during 20182021 made to our named executive officersNEO are as follows:follows (we also discuss awards issued by EQH to Mr. Bernstein, Ms. Burke and Mr. Dibadj):
NameGrant DateAll Other
Stock Awards:
Number of Shares
of Stock
or Units
(#)
Grant Date
Fair Value
of Stock
Awards(1)
($)
Seth P. Bernstein(2)(3)
12/10/2021102,572 5,225,000 
2/17/202112,200 340,000 
2/17/202116,357 510,000 
Kate C. Burke(2)(3)
12/10/202135,827 1,825,000 
2/17/20211,436 40,000 
2/17/20211,925 60,000 
Ali Dibadj(2)(3)
12/10/202130,919 1,575,000 
2/17/20211,436 40,000 
2/17/20211,925 60,000 
Karl Sprules(2)
12/10/202125,030 1,275,000 
Laurence E. Cranch(2)
12/10/202111,288 575,000 
John C. Weisenseel(2)
— — — 
(1)This column provides the aggregate grant date fair value of the awards calculated in accordance with FASB ASC Topic 718. For the assumptions made in determining the AB Holding Unit values, see Note 19 to AB's consolidated financial statements in Item 8.
(2)As discussed above in “Overview of 2021 Incentive Compensation Program” and “Compensation Elements for NEOs—Long-Term Incentive Compensation Awards,” long-term incentive compensation awards granted in 2021 to our NEOs were denominated in restricted AB Holding Units. These awards are shown in the “All Other Stock Awards” column of this table, the “Stock Awards” column of the Summary Compensation Table for 2021 and the “AB Holding Unit Awards” columns of the Outstanding Equity Awards at 2021 Fiscal Year-End Table.
(3)In February 2021, EQH granted to each of Mr. Bernstein, Ms. Burke and Mr. Dibadj (i) a restricted stock unit award with a grant date fair value of $340,000, $40,000, and $40,000, respectively, and (ii) a performance share award with a grant date fair value of $510,000, $60,000, and $60,000, respectively, which can be earned subject to EQH's total shareholder return relative to its peer group.
Name Grant Date��
All Other Stock Awards:
Number of Shares of Stock
or Units (#)
 
Grant Date Fair Value
of Stock Awards(1) ($)
Seth P. Bernstein(2)
 12/11/2018 149,868
 4,000,000
James A. Gingrich(2)
 4/24/2018 531,310
 14,000,019
Laurence E. Cranch(2)
 4/24/2018 151,803
 4,000,009
  12/11/2018 24,729
 660,000
John C. Weisenseel(2)
 4/24/2018 151,803
 4,000,009
  12/11/2018 31,567
 842,500
Kate C. Burke(2)
 4/24/2018 151,803
 4,000,009
  12/11/2018 16,486
 440,000

(1)2021 Annual Report
This column provides the aggregate grant date fair value of the awards calculated in accordance with FASB ASC Topic 718. For the assumptions made in determining these values, see Note 19 to AB's consolidated financial statements in Item 8.
157
(2)
As discussed above in “Overview of 2018 Incentive Compensation Program” and “Compensation Elements for Named Executive Officers—Long-Term Incentive Compensation Awards,” long-term incentive compensation awards granted in 2018 to our named executive officers were denominated in restricted AB Holding Units. These awards are shown in the “All Other Stock Awards” column of this table, the “Stock Awards” column of the Summary Compensation Table and the “AB Holding Unit Awards” columns of the Outstanding Equity Awards at 2018 Fiscal Year-End Table.

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Part III
In 2018,2021, the number of restricted AB Holding Units comprising long-term incentive compensation awards granted to each named executive officerNEO was determined based on the closing price of an AB Holding Unit as reported for NYSE composite transactions on December 11, 2018 and April 24, 2018,10, 2021, the dates ondate as of which the Compensation Committee approved the awards. At the time of these awards, the Compensation Committee consisted of Ms. Fallon-WalshMatus (Chair) and Messrs. Audet, de Oliveira, Duverne,Kaye, Pearson and Scott; the Section 16 Subcommittee, which approved awards to our NEOs, consisted of Ms. Matus (Chair) and Messrs. Kaye and Zoellick.Scott. For further information regarding the material terms of such awards, including the vesting terms and the formulas or criteria to be applied in determining the amounts payable, please refer to "Overview of 20182021 Incentive Compensation Program,"Program" and "Compensation Elements for Named Executive Officers-Long-Term Incentive Compensation Awards" and "Other Factors Considered When Determining Named Executive Officer Compensation"NEOs" above.





Outstanding Equity Awards at 20182021 Fiscal Year-End


Outstanding equity awards held by our named executive officersNEOs as of December 31, 20182021 are as follows:
 Option AwardsAB Holding Unit and/or EQH Awards
NameNumber of
Securities
Underlying
Unexercised
Options
Exercisable
(#)		Number of
Securities
Underlying
Unexercised
Options
Unexercisable
(#)		Option
Exercise
Price
($)		Option
Expiration
Date		Number of
 Shares
or Units of
Stock That
Have Not
 Vested
 (#)
Market 
Value of
 Shares or
Units of
Stock That
 Have Not
Vested(11)
($)
Seth P. Bernstein(1)(2)(3)(5)
43,630 21,816 $18.74 2/14/2029299,207 14,613,265 
19,069 38,140 23.18 2/26/203012,200 400,038 
16,357 536,346 
Kate C. Burke(4)(5)(6)
— — — — 239,774 11,710,573 
1,436 47,086 
1,925 63,121 
Ali Dibadj(4)(5)(7)
— — — — 46,456 2,268,916 
1,436 47,086 
1,925 63,121 
Karl Sprules(8)
— — — — 228,117 11,141,251 
Laurence E. Cranch(9)
— — — — 44,369 2,166,967 
John C. Weisenseel(10)
— — — — 42,228 2,062,429 
(1)Mr. Bernstein was awarded: (i) 102,572 restricted AB Holding Units in December 2021, which are scheduled to vest in equal increments on each of December 1, 2022, 2023 and 2024; (ii) 119,471 restricted AB Holding Units in December 2020, of which 25% vested on December 1, 2021, and the remainder of which is scheduled to vest in equal increments on each of December 1, 2022, 2023 and 2024; (iii) 139,131 restricted AB Holding Units in December 2019, of which 25% vested on each of December 1, 2020 and 2021, and the remainder of which is scheduled to vest in equal increments on each of December 1, 2022 and 2023; and (iii) 149,868 restricted AB Holding Units in December 2018, of which 25% vested on each of December 1, 2019, 2020 and 2021, and the remainder of which is scheduled to vest on December 1, 2022. For further information, see “Overview of Mr. Bernstein's Employment Agreement” above.
(2)EQH restricted stock unit awards, which are described for Mr. Bernstein in the second line of data in the above table, will vest ratably over their three-year vesting period subject to continued employment during the vesting period. EQH performance share awards, which are described in the third line of data in the above table, cliff vest on the third anniversary of grant date subject to meeting the applicable performance criteria. In February 2021, 2020 and 2019, EQH granted to Mr. Bernstein (i) a restricted stock unit award with a grant date fair value of $340,000, $250,019 and $250,010, respectively, and (ii) a performance share award with a grant date fair value of $510,000, $500,031 and $500,016. The performance share award granted in 2021 can be earned subject to EQH's total shareholder return relative to its peer group. Approximately half of the performance share awards granted in each of 2020 and 2019 can be earned subject to EQH's performance against specified non-GAAP financial targets (specifically, non-GAAP return-on-equity targets), while the other half can be earned subject to EQH's total shareholder return relative to its peer group.
(3)The option awards described in the table were issued by EQH and calculated in accordance with FASB ASC Topic 718. The fair value of EQH stock options is calculated by EQH using the Black-Scholes option pricing model. The expected EQH dividend rate is based on market consensus. EQH share price volatility is estimated on the basis of implied volatility, which is checked by EQH against an analysis of historical volatility to ensure consistency. The effect of expected early exercise is accounted for through the use of an expected life assumption based on historical data.
  Option Awards AB Holding Unit Awards
Name 
Number of Securities
Underlying Unexercised
Options Exercisable (#)
 Number of Securities Underlying Unexercised Options Unexercisable (#) Option Exercise Price ($) Option Expiration Date 
Number of Shares
or Units of Stock That
Have Not Vested (#)
 
Market 
Value of Shares or
Units of
Stock That Have Not Vested(6) ($)
Seth P. Bernstein(1)
 —
 —
 —
 —
 273,398
 7,469,243
James A. Gingrich(2)
 —
 —
 —
 —
 935,868
 25,567,905
Laurence E. Cranch(3)
 —
 —
 —
 —
 216,414
 5,912,424
John C. Weisenseel(4)
 —
 —
 —
 —
 228,085
 6,231,269
Kate C. Burke(5)
 —
 —
 —
 —
 189,745
 5,183,841

(1)158
Subject to accelerated vesting clauses in the CEO Employment Agreement (e.g., immediate vesting upon a “change in control” of our firm), the award granted to Mr. Bernstein in May 2017 vests ratably on each of the first four anniversaries of May 1, 2017, commencing May 1, 2018, provided, with respect to each installment, Mr. Bernstein continues to be employed by AB on the vesting date. However, Mr. Bernstein elected to delay delivery of all of the restricted AB Holding Units until May 1, 2021, the final vesting date, subject to acceleration upon a “change in control” of our firm and certain qualifying events of termination of employment. Additionally, Mr. Bernstein was awarded 149,868 restricted AB Holding Units in December 2018, which are scheduled to vest in equal annual increments on each of December 1, 2019, 2020, 2021 and 2022. For further information, see “Overview of Our President and CEO’s Compensation” above.
AllianceBernstein
(2)Mr. Gingrich was awarded (i) 531,310 restricted AB Holding Units in April 2018, which are scheduled to vest in equal increments on each of December 1, 2019, 2020, 2021 and 2022, (ii) 883,653 restricted AB Holding Units in February 2017, of which 33.3% vested on each of December 1, 2017 and 2018 and the remainder of which is scheduled to vest on December 1, 2019, (iii) 140,517 restricted AB Holding Units in December 2016, of which 25% vested on each of December 1, 2017 and 2018 and the remainder of which is scheduled to vest in equal increments on each of December 1, 2019 and 2020, and (iv) 158,992 restricted AB Holding Units in December 2015, of which 25% vested on each of December 1, 2016, 2017 and 2018 and the remainder of which is scheduled to vest on December 1, 2019.
(3)Mr. Cranch was awarded (i) 24,728 restricted AB Holding Units in December 2018, which are scheduled to vest in equal increments on each of December 1, 2019, 2020, 2021 and 2022, (ii) 151,803 restricted AB Holding Units in April 2018, which are scheduled to cliff vest on December 1, 2022, (iii) 26,453 restricted AB Holding Units in December 2017, of which 25% vested on December 1, 2018 and the remainder is scheduled to vest in equal increments on each of December 1, 2019, 2020 and 2021, (iv) 26,293 restricted AB Holding Units in December 2016, of which 25% vested on each of December 1, 2017 and 2018 and the remainder of which is scheduled to vest in equal increments on each of December 1, 2019 and 2020, and (v) 27,585 restricted AB Holding Units in December 2015, of which 25% vested on each December 1, 2016, 2017 and 2018 and the remainder of which is scheduled to vest on December 1, 2019.
(4)Mr. Weisenseel was awarded (i) 31,566 restricted AB Holding Units in December 2018, which are scheduled to vest in equal increments on each of December 1, 2019, 2020, 2021 and 2022, (ii) 151,803 restricted AB Holding Units in April 2018, which are scheduled to cliff vest on December 1, 2022, (iii) 31,463 restricted AB Holding Units in December 2017, 25% of which vested on December 1, 2018 and the remainder of which are scheduled to vest in equal increments on each of December 1, 2019, 2020 and 2021, (iv) 28,987 restricted AB Holding Units in December 2016, of which 25% vested on each of December 1, 2017 and 2018 and the remainder of which is scheduled to vest in equal increments on each of December 1, 2019 and 2020, and (v) 26,499 restricted AB Holding Units in December 2015, of which 25% vested on each of December 1, 2016, 2017 and 2018 and the remainder of which is scheduled to vest on December 1, 2019.
(5)Ms. Burke was awarded (i) 16,486 restricted AB Holding Units in December 2018, which are scheduled to vest in equal increments on each of December 1, 2019, 2020, 2021 and 2022, (ii) 151,803 restricted AB Holding Units in April 2018, which are scheduled to cliff vest on December 1, 2022, (iii) 16,433 restricted AB Holding Units in December 2017, of which 25% vested on December 1, 2018 and the remainder of which are scheduled to vest in equal increments on each of December 1, 2019, 2020 and 2021, (iv) 14,224 restricted AB Holding Units in December 2016, of which 25% vested on each of December 1, 2017 and 2018 and the remainder of which is scheduled to vest in equal increments on each of December 1, 2019 and 2020, and (iii) 8,080 restricted AB Holding Units in December 2015, of which 25% vested on each of December 1, 2016, 2017 and 2018 and the remainder of which is scheduled to vest on December 1, 2019.

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(6)The market values of restricted AB Holding Units set forth in this column were calculated assuming a price per AB Holding Unit of $27.32, which was the closing price on the NYSE of an AB Holding Unit on December 31, 2018, the last trading day of AB's last completed fiscal year.

Part III
(4)EQH restricted stock unit awards, which are described for each of Ms. Burke and Mr. Dibadj in the second line of data in the above table, will vest ratably over their three-year vesting period subject to continued employment during the vesting period. EQH performance share awards, which are described in the third line of data in the above table, cliff vest on the third anniversary of grant date subject to meeting the applicable performance criteria. In February 2021, EQH granted to each of Ms. Burke and Mr. Dibadj (i) a restricted stock unit award with a grant date fair value of $40,000 and (ii) a performance share award with a grant date fair value of $60,000, which can be earned subject to EQH's total shareholder return relative to its peer group.
(5)For further information regarding the equity awards granted to Mr. Bernstein, Ms. Burke and/or Mr. Dibadj by EQH, please see "Compensation awarded by EQH to Mr. Bernstein, Ms. Burke and Mr. Dibadj" above in CD&A.
(6)Ms. Burke was awarded: (i) 35,827 restricted AB Holding Units in December 2021, which are scheduled to vest in equal increments on each of December 1, 2022, 2023 and 2024; (ii) 40,032 restricted AB Holding Units in December 2020, of which 25% vested on December 1, 2021, and the remainder of which is scheduled to vest in equal increments on each of December 1, 2022, 2023 and 2024; (iii) 36,000 restricted AB Holding Units in December 2019, of which 25% vested on each of December 1, 2020 and 2021, and the remainder of which is scheduled to vest in equal increments on each of December 1, 2022 and 2023; (iv) 16,486 restricted AB Holding Units in December 2018, of which 25% vested on each of December 1, 2019, 2020 and 2021, and the remainder of which is scheduled to vest on December 1, 2022; and (v) 151,803 restricted AB Holding Units in April 2018, which are scheduled to cliff vest on December 1, 2022. For additional information regarding Ms. Burke's award granted in April 2018, please see "Relocation-related Performance Awards" above in CD&A.
(7)Mr. Dibadj was awarded (i) 30,919 restricted AB Holding Units in December 2021, which are scheduled to vest in equal increments on each of December 1, 2022, 2023 and 2024; and (ii) 20,717 restricted AB Holding Units in December 2020, 25% of which vested on December 1, 2021, and the remainder of which is scheduled to vest in equal increments on each of December 1, 2022, 2023 and 2024.
(8)Mr. Sprules was awarded 25,030 restricted AB Holding Units in December 2021, which are scheduled to vest in equal increments on each of December 1, 2022, 2023 and 2024; and 151,803 restricted AB Holding Units in April 2018, which are scheduled to cliff vest on December 1, 2022. For additional information regarding Mr. Sprules's award granted in April 2018, please see "Relocation-related Performance Awards" above in CD&A.
(9)Mr. Cranch was awarded: (i) 11,288 restricted AB Holding Units in December 2021, which are scheduled to vest in equal increments on each of December 1, 2022, 2023 and 2024; (ii) 20,561 restricted AB Holding Units in December 2020, of which 25% vested on December 1, 2021, and the remainder of which is scheduled to vest in equal increments on each of December 1, 2022, 2023 and 2024; (iii) 22,957 restricted AB Holding Units in December 2019, of which 25% vested on each of December 1, 2020 and 2021, and the remainder of which is scheduled to vest in equal increments on each of December 1, 2022 and 2023; and (iv) 24,728 restricted AB Holding Units in December 2018, of which 25% vested on each of December 1, 2019, 2020 and 2021, and the remainder of which is scheduled to vest on December 1, 2022.
(10)Mr. Weisenseel was awarded: (i) 26,247 restricted AB Holding Units in December 2020, of which 25% vested on December 1, 2021, and the remainder of which is scheduled to vest in equal increments on each of December 1, 2022, 2023 and 2024; (ii) 29,305 restricted AB Holding Units in December 2019, of which 25% vested on each of December 1, 2020 and 2021, and the remainder of which is scheduled to vest in equal increments on each of December 1, 2022 and 2023; and (iii) 31,566 restricted AB Holding Units in December 2018, of which 25% vested on each of December 1, 2019, 2020 and 2021, and the remainder of which is scheduled to vest on December 1, 2022.
(11)The market values of restricted AB Holding Units set forth in this column were calculated assuming a price per AB Holding Unit of $48.84, which was the closing price on the NYSE of an AB Holding Unit on December 31, 2021, the last trading day of AB's last completed fiscal year.
Option Exercises and AB Holding Units Vested in 20182021

AB Holding Units held by our named executive officersNEOs that vested during 20182021 are as follows:follows (amounts for Mr. Cranch (121,569 AB Holding Units) and Mr. Weisenseel (113,266 AB Holding Units) include AB Holding Units awarded in April 2018 that vested in 2021 pursuant to their respective retirement agreements; please see "Chief Legal Officer Retirement Agreement" and "Former CFO Retirement Agreement" above in CD&A for additional information):
 AB Holding Option AwardsAB Holding Unit Awards
NameNumber of AB Holding Units Acquired on Exercise
(#)		Value Realized
on Exercise
($)		Number of AB
Holding Units
Acquired on
Vesting
(#)		Value Realized
on Vesting
 ($)
Seth P. Bernstein— — 143,294 6,875,884 
Kate C. Burke— — 27,237 1,360,508 
Ali Dibadj— — 5,179 258,697 
Karl Sprules— — 30,078 1,502,400 
Laurence E. Cranch— — 145,244 7,119,978 
John C. Weisenseel— — 142,911 7,096,490 
  AB Holding Option Awards AB Holding Unit Awards
Name Number of AB Holding Units Acquired on Exercise (#) Value Realized on Exercise ($) 
Number of AB
Holding
Units Acquired on
Vesting (#)
 
Value Realized on
Vesting ($)
Seth P. Bernstein —
 —
 41,177
 1,115,883
James A. Gingrich —
 —
 407,176
 12,300,783
Laurence E. Cranch 78,348
 723,789
 26,632
 804,546
John C. Weisenseel —
 —
 26,894
 812,466
Kate C. Burke —
 —
 11,396
 344,282
William R. Siemers —
 —
 2,523
 76,218

Pension Benefits for 2018

None of our named executive officers are entitled to benefits under the Amended and Restated Retirement Plan for Employees of AB (as amended and restated as of January 1, 2016 and as further amended as of April 1, 2018, “Retirement Plan”), our company pension plan. For additional information regarding the Retirement Plan, including interest rates and actuarial assumptions, see Note 18 to AB’s consolidated financial statements in Item 8.

Non-Qualified Deferred Compensation for 2018

Vested and unvested non-qualified deferred compensation contributions, earnings and distributions of our named executive officers during 2018 and their non-qualified deferred compensation plan balances as of December 31, 2018 are as follows:

Name 
Executive
Contributions in Last FY ($)
 
Aggregate
Earnings in Last FY ($)
 
Aggregate
Withdrawals/
Distributions ($)
 
Aggregate
Balance at
Last FYE ($)
Seth P. Bernstein —
 —
 —
 —
James A. Gingrich(1)
 —
 (46,772) (226,620) 848,746
Laurence E. Cranch —
 —
 —
 —
John C. Weisenseel —
 —
 —
 —
Kate C. Burke —
 —
 —
 —


(1)2021 Annual Report
Amounts shown reflect Mr. Gingrich's interests from pre-2009 awards under the predecessor plan to the Incentive Compensation Program, under which plan participants were permitted to allocate their awards (i) among notional investments in AB Holding Units, certain of the investment services we provided to clients and a money market fund, or (ii) under limited circumstances, in options to buy AB Holding Units. For additional information about the Incentive Compensation Program, see Notes 2 and 19 to AB’s consolidated financial statements in Item 8.
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Part III
Potential Payments upon Termination or Change in Control

Estimated payments and benefits to which our named executive officersNEOs would have been entitled upon a change in control of AB or the specified qualifying events of termination of employment as of December 31, 20182021 are as follows:

Name and Trigger Event
Cash
Payments(1)
($)
Acceleration of
Restricted
AB Holding Unit
Awards(2)
($)
Other
Benefits(3)
($)
Seth P. Bernstein
Change in control— 14,613,265 — 
Termination by Mr. Bernstein for good reason(4)
3,500,000 14,613,265 18,404 
Termination of Mr. Bernstein's employment by AB other than for Cause or due to Death or Disability (including 2017 Award)(4)(5)(6)
5,250,000 14,613,265 18,404 
Change in control + termination by Mr. Bernstein for good reason or termination of Mr. Bernstein's employment without cause(4)
7,000,000 14,613,265 18,404 
Resignation (complies with applicable agreements and restrictive covenants) under ICAP(2)
— 14,613,265 — 
Death or disability(7)
— 14,613,265 18,404 
Kate C. Burke
Change in control— 11,710,573 — 
Change in control + employment terminated by AB other than for cause, termination by Ms. Burke for good reason, or termination due to death or disability5,350,000 11,710,573 — 
Resignation, retirement or termination by AB without cause (complies with applicable agreements and restrictive covenants) under ICAP; death or disability under ICAP; excludes 2018 RSU award)(2)
— 4,296,514 — 
Termination by AB without cause; death or disability (2018 RSU award)(8)
— 3,203,337 — 
Ali Dibadj
Change in control— 2,268,916 — 
Change in control + employment terminated by AB other than for cause, termination by Mr. Dibadj for good reason, or termination due to death or disability4,850,000 2,268,916 — 
Resignation, retirement or termination by AB without cause (complies with applicable agreements and restrictive covenants) under ICAP; death or disability under ICAP(2)
— 2,268,916 — 
Karl Sprules
Change in control— 11,141,251 — 
Change in control + employment terminated by AB other than for cause, termination by Mr. Sprules for good reason, or termination due to death or disability4,250,000 11,141,251 — 
Resignation, retirement or termination by AB without cause (complies with applicable agreements and restrictive covenants) under ICAP; death or disability under ICAP(2)
— 3,727,192 — 
Termination by AB without cause; death or disability (2018 RSU award)(8)
— 3,203,337 — 
Laurence E. Cranch(9)
Retirement200,000 5,937,430 — 
John C. Weisenseel(9)
Retirement93,750 5,531,911 — 
(1)It is possible that each NEO could receive a cash severance payment on the termination of his or her employment that is not contemplated in the CIC Plan. The amounts of any such cash severance payments would be determined at the time of such termination (other than for Mr. Bernstein), so we are unable to estimate such amounts. The amounts shown for Mr. Bernstein are described in the CEO Employment
Name 
Cash
Payments(1) ($)
 
Acceleration of Restricted
AB Holding Unit
Awards(2) ($)
 Other Benefits ($)
Seth P. Bernstein      
Change in control —
 3,374,826
 13,610
Termination by Mr. Bernstein for good reason or by AB without cause and within 12 months of change in control (2017 Award)(3)
 7,000,000
 3,374,826
 13,610
Termination by Mr. Bernstein for good reason or by AB without cause (2017 Award)(3)
 3,500,000
 3,374,826
 13,610
Termination by reason of non-extension of initial 3-year employment term (2017 Award)(3)
 —
 3,374,826
 13,610
Death or disability (2017 Award)(3)(4)(5)
 —
 3,374,826
 13,610
Resignation (complies with applicable agreements and restrictive covenants) under ICAP (2018 Award)(2)
 —
 4,094,417
 —
Death or disability under ICAP (2018 Award)(6)
 —
 4,094,417
 —
James A. Gingrich  
  
  
Termination by AB without cause (2017 RSU grant)(7)
 —
 670,594
 —
Death or disability (2017 RSU grant)(7)
 —
 670,594
 —
Termination by AB without cause; death or disability (2018 RSU grant)(7)
 —
 2,166,090
 —
Resignation or termination by AB without cause (complies with applicable agreements and restrictive covenants) under ICAP(2)
 —
 3,005,382
 —
Death or disability under ICAP(6)
 —
 3,005,382
 —
Laurence E. Cranch    
  
Resignation or termination by AB without cause (complies with applicable agreements and restrictive covenants)(2)
 —
 1,765,166
 —
Death or disability(6)
 —
 1,765,166
 —
Termination by AB without cause; death or disability (2018 RSU grant)(8)
 —
 618,883
 —
John C. Weisenseel    
  
Resignation or termination by AB without cause (complies with applicable agreements and restrictive covenants)(2)
 —
 2,084,011
 —
Death or disability(6)
 —
 2,084,011
 —
Termination by AB without cause; death or disability (2018 RSU grant)(8)
 —
 618,883
 —
Kate C. Burke    
  
Resignation or termination by AB without cause (complies with applicable agreements and restrictive covenants)(2)
 —
 1,036,583
 —
Death or disability(6)
 —
 1,036,583
 —
Termination by AB without cause; death or disability (2018 RSU grant)(8)
 —
 618,883
 —

(1)160It is possible that each named executive officer could receive a cash severance payment on the termination of his or her employment. The amounts of any such cash severance payments would be determined at the time of such termination (other than for Mr. Bernstein), so we are unable to estimate such amounts. The amounts shown for Mr. Bernstein are described in the CEO Employment Agreement.AllianceBernstein
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Part III
Agreement. The amounts shown for Ms. Burke, Mr. Dibadj and Mr. Sprules in the event of a change in control coupled with termination of employment are described in the CIC Plan. The amount shown for Mr. Cranch is taken from his retirement agreement, into which he entered in May 2021 and with respect to which his actual retirement date was December 31, 2021. The amount shown for Mr. Weisenseel is taken from his retirement agreement, into which he entered in August 2020 and with respect to which his actual retirement date was September 30, 2021.
(2)See Notes 2 and 19 in AB’s consolidated financial statements in Item 8 and “Compensation Elements for NEOs – Long-Term Incentive Compensation Awards” above for a discussion of the terms set forth in long-term incentive compensation award agreements relating to termination of employment.
(3)Reflects the value of group medical coverage to which Mr. Bernstein would be entitled.
(4)See "Overview of Mr. Bernstein's Employment Agreement" above for a discussion of the terms set forth in the CEO Employment Agreement relating to termination of employment.
(5)The CEO Employment Agreement defines “Disability” as a good faith determination by AB that Mr. Bernstein is physically or mentally incapacitated and has been unable for a period of 180 days in the aggregate during any 12-month period to perform substantially all of the duties for which he is responsible immediately before the commencement of the incapacity.
(6)Under the CEO Employment Agreement, upon termination of Mr. Bernstein’s employment due to death or disability, and after the COBRA period, AB will provide Mr. Bernstein and his spouse with access to participation in AB’s medical plans at Mr. Bernstein’s (or his spouse’s) sole expense based on a reasonably determined fair market value premium rate.
(7)“Disability” is defined in the ICAP award agreements of each NEO as the inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to last for a continuous period of not less than 12 months, as determined by the carrier of the long-term disability insurance program maintained by AB or its affiliate that covers the NEO.
(8)For additional information relating to the restricted AB Holding Unit award issued to each of Ms. Burke, Mr. Sprules, Mr. Cranch and Mr. Weisenseel in April 2018, please refer to "Relocation-related Performance Awards" above.
(9)For information relating to Mr. Cranch's compensatory benefits under his retirement agreement, please refer to, "Chief Legal Officer Retirement Agreement" above in CD&A. For information relating to Mr. Weisenseel's compensatory benefits under his retirement agreement, please refer to "Former CFO Retirement Agreement" above in CD&A.
Additionally, estimated payments and benefits to which Mr. Bernstein, Ms. Burke or Mr. Dibadj would have been entitled upon a change in control of EQH or the specified qualifying events of termination of employment as of December 31, 2021 are as follows (these amounts would be payable by EQH):
(2)Reason for Employment Termination
See Notes 2 Acceleration of EQH Option
and 19Share Awards
($)
Seth P. Bernstein
Death(1)
7,030,083 
Disability(1)
7,030,083 
Involuntary termination (no change in AB’s consolidated financial statementscontrol)(2)
1,322,245 
Change in Item 8 and “Compensation Elements for Named Executive Officers – Long-Term Incentive Compensation Awards” above for a discussion of the terms set forth in long-term incentive compensation award agreements relating tocontrol (without termination of employment)(3)
7,222,006 
Involuntary termination of employment. or termination by
Mr. Bernstein for good reason (no change in control)(3)
7,222,006 
Kate C. Burke
Death(1)
112,388 
Disability(1)
112,388 
Involuntary termination (no change in control)— 
Change in control (without termination of employment)(3)
48,022 
Involuntary termination of employment or termination by
Ms. Burke for good reason (no change in control)(3)
— 
Ali Dibadj
Death(1)
112,388 
Disability(1)
112,388 
Involuntary termination (no change in control)— 
Change in control (without termination of employment)(3)
48,022 
Involuntary termination of employment or termination by
Mr. Dibadj for good reason (no change in control)(3)
— 
(1)Reflects the combined value, as of December 31, 2021, associated with awards granted by EQH to Mr. Bernstein (since 2018), Ms. Burke (beginning in 2021) and Mr. Dibadj (beginning in 2021), including a transaction incentive award in 2018 (Mr. Bernstein only); option awards
(3)2021 Annual Report
See "Overview of Our President and CEO's Compensation" above for a discussion of the terms set forth in the CEO Employment Agreement relating to termination of employment, which pertain to the restricted AB Holding Unit award Mr. Bernstein received in May 2017.
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(4)The CEO Employment Agreement defines “Disability” as a good faith determination by AB that Mr. Bernstein is physically or mentally incapacitated and has been unable for a period of 180 days in the aggregate during any 12-month period to perform substantially all of the duties for which he is responsible immediately before the commencement of the incapacity.
(5)Under the CEO Employment Agreement, upon termination of Mr. Bernstein’s employment due to death or disability, and after the COBRA period, AB will provide Mr. Bernstein and his spouse with access to participation in AB’s medical plans at Mr. Bernstein’s (or his spouse’s) sole expense based on a reasonably determined fair market value premium rate.
(6)“Disability” is defined in the Incentive Compensation Program award agreements of each named executive officer as the inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to last for a continuous period of not less than 12 months, as determined by the carrier of the long-term disability insurance program maintained by AB or its affiliate that covers the named executive officer.
(7)
For additional information relating to the restricted AB Holding Unit award Mr. Gingrich received in February 2017, please refer to "Annual Short-Term Incentive Compensation Awards (Cash Bonuses)" above. For additional information relating to the restricted AB Holding Unit award Mr. Gingrich received in April 2018, please refer to "Chief Operating Officer Equity Award" above in this Item 11.
(8)
For additional information relating to the restricted AB Holding Unit award received by each of Ms. Burke, Mr. Cranch and Mr. Weisenseel in April 2018, please refer to "Relocation-related Performance Awards" above in this Item 11.

Part III
(Mr. Bernstein only); restricted stock unit awards; and performance share awards. For additional information regarding these awards, please see the Summary Compensation Table in 2021, the Grant of Plan-based Awards table in 2021 and the Outstanding Equity at 2021 Fiscal Year End table above in this Item 11.
(2)Reflects the value, as of December 31, 2021, associated with Mr. Bernstein's transaction incentive award in 2018.
(3)Reflects, as of December 31, 2021, (i) the full value associated with Mr. Bernstein's option awards in 2019 and 2020, (ii) a pro-rated portion of Mr. Bernstein's transaction incentive award in 2018 and (iii) restricted stock unit awards and performance share awards granted to Mr. Bernstein (in 2021, 2020 and 2019) and to Ms. Burke and Mr. Dibadj (in 2021) based on the terms and conditions of these awards.
Director Compensation in 20182021

During 2018,2021, we compensated our directors, who are not employed by our company or by any of our affiliates (“Eligible Directors”), as follows (Mr. Zoellick is our Non-Executive Chairman; the other directors listed in the table below each satisfiessatisfied applicable NYSE and SEC standards relating to independence (“Independent Directors”)):, as follows:
NameFees Earned or Paid in Cash
($)
Stock
Awards(1)(2)
($)
Total
($)
Joan Lamm-Tennant(3)
27,011 99,200 126,211 
Nella Domenici100,000 170,000 270,000 
Daniel Kaye95,000 170,000 265,000 
Kristi Matus122,750 170,000 292,750 
Das Narayandas92,000 170,000 262,000 
Bertram Scott95,000 170,000 265,000 
Charles Stonehill125,000 170,000 295,000 
Todd Walthall(4)
28,444 112,200 140,644 
Ramon de Oliveira(5)
110,750 170,000 280,750 
Paul Audet(6)
74,557 170,000 244,557 
(1)The aggregate number of restricted AB Holding Units underlying awards outstanding but not yet distributed at December 31, 2021, was: for Ms. Lamm-Tennant, 1,806 AB Holding Units; for Ms. Domenici, 13,438 AB Holding Units; for Ms. Matus, 15,844 AB Holding Units; for Mr. Kaye, 30,283 AB Holding Units; for Mr. Narayandas, 26,249 AB Holding Units; for Mr. Scott, 8,060 AB Holding Units; for Mr. Stonehill, 16,904 AB Holding Units; and for Mr. Walthall, 2,208 AB Holding Units.
(2)Reflects the aggregate grant date fair value of the awards calculated in accordance with FASB ASC Topic 718. For the assumptions made in determining these values, see Note 19 to AB’s consolidated financial statements in Item 8.
(3)AB Holding Unit award value prorated based on the date as of which Ms. Lamm-Tennant joined the Board.
(4)AB Holding Unit award value prorated based on the date as of which Mr. Walthall joined the Board.
(5)Mr. de Oliveira resigned from the Board in October 2021. As described below in "Independent Director Compensation," previously unvested AB Holding Units awarded to Mr. de Oliveira were delivered as soon as administratively feasible following Mr. de Oliveira's resignation from the Board.
(6)Mr. Audet retired the Board in September 2021. As described below in "Independent Director Compensation," previously unvested AB Holding Units awarded to Mr. Audet were delivered as soon as administratively feasible following Mr. Audet's retirement from the Board.

Name Fees Earned or Paid in Cash($) 
Stock
Awards(1)(2)
($)
 Total($)
Robert B. Zoellick 425,000
 425,000
 850,000
Paul L. Audet 105,500
 170,000
 275,500
Ramon de Oliveira 97,000
 170,000
 267,000
Barbara Fallon-Walsh 129,125
 170,000
 299,125
Daniel G. Kaye 132,500
 170,000
 302,500
Shelley B. Leibowitz 99,500
 170,000
 269,500
Das Narayandas 88,000
 170,000
 258,000

(1)162The aggregate number of restricted AB Holding Units underlying awards outstanding but not yet distributed at December 31, 2018 was: for Mr. Zoellick, 30,800 AB Holding Units; for each of Ms. Fallon-Walsh and Messrs. de Oliveira and Kaye, 9,850 AB Holding Units; and for each of Ms. Leibowitz and Messrs. Audet and Narayandas, 8,589 AB Holding Units.AllianceBernstein
(2)
Reflects the aggregate grant date fair value of the awards calculated in accordance with FASB ASC Topic 718. For the assumptions made in determining these values, see Note 19 to AB’s consolidated financial statements in Item 8.
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Part III

Independent Director Compensation Elements

The Board has approved the compensation elements described immediately below for Independent Directors during its regular meeting held in May 2021 and has agreed to re-consider such compensation elements no less frequently than every five years (with the next such reconsideration scheduled for 2020):bi-annually:

•an annual retainer of $85,000$90,000 (paid quarterly after any quarter during which an Independent Director serves on the Board; annual retainers relating to Committee service, as described below, are paid quarterly in arrears as well);
a fee of $5,000 for participating in any meeting of the Board, whether in person or by telephone, in excess of the six regularly-scheduled Board meetings each year;
a fee of $2,000 for participating in any meeting of any duly constituted committee of the Board, whether in person or by telephone, in excess of the number of regularly-scheduled committee meetings each year (i.e., in excess of seven meetings of the Audit Committee and three meetings of each of the Executive Committee, the Compensation Committee and the Governance Committee);
•an annual retainer of $25,000$50,000 for acting as Independent Chair of the Board;
•an annual retainer of $37,500 for acting as Chair of the Audit Committee;
•an annual retainer of $12,500$20,000 for acting as Chair of the Compensation Committee;
•an annual retainer of $12,500$13,500 for acting as Chair of the Governance Committee;

•an annual retainer of $12,500 for serving as a member of the Audit Committee;
•an annual retainer of $6,000 for serving as a member of the Executive Committee;
an annual retainer of $6,000$9,000 for serving as a member of the Compensation Committee;
•an annual retainer of $6,000$3,000 for serving as a member of the Governance Committee; and
•
an annual equity-based grantunder an equity compensation plan consisting of restricted AB Holding Units with a grant date fair value of $170,000.

At the regular meeting•an annual equity-based grantunder an equity compensation plan consisting of therestricted AB Holding Units with a grant date fair value of $170,000.
The Board held in May 2018, the Boardalso granted to each Independent Director (Mses. Fallon-Walshthen serving (which included Mses. Domenici and Leibowitz andMatus and Messrs. Audet, de Oliveira, Kaye, Narayandas, Scott and Narayandas) 6,320Stonehill) 3,918 restricted AB Holding Units. The number of AB Holding Units granted was determined by dividing the $170,000 grant date fair value noted above by the closing price of an AB Holding Unit on the date of the May 20182021 Board Meeting, or $26.90$43.40 per unit. These awards vest ratably on each of the first four anniversaries of the grant date.
Additionally, the Board granted to Ms. Lamm-Tennant, who joined the Board as of October 22, 2021, 1,806 restricted AB Holding Units. The number of AB Holding Units granted was determined by dividing the grant date fair value (a pro-rated portion of the $170,000 typically awarded based on the date as of which generally is consistent withMs. Lamm-Tennant joined the Board) by the closing price of an AB employee equity awards.Holding Unit on October 22, 2021, or $54.94 per unit. This award vests ratably on each of the first four anniversaries of the grant date.

Also, at the regular meeting of the Board held in September 2021, the Board granted to Mr. Walthall, who joined the Board as of September 21, 2021, 2,208 restricted AB Holding Units. The number of AB Holding Units granted was determined by dividing the grant date fair value (a pro-rated portion of the $170,000 typically awarded based on the date as of which Mr. Walthall joined the Board) by the closing price of an AB Holding Unit on September 22, 2021, or $50.82 per unit. This award also vests ratably on each of the first four anniversaries of the grant date.
Further, in order to avoid any perception that our directors’ exercise of their fiduciary duties might be impaired, restricted AB Holding Unit grants to Independent Directors are not forfeitable, except if the director is terminated for “Cause,” as that term is defined in the 2017 Plan or the applicable award agreement. Accordingly, restricted AB Holding Units generally are delivered as soon as administratively feasible following an EligibleIndependent Director’s resignation from the Board.

Equity grants to Independent Directors generally are made at the May meeting of the Board. The date of the May meeting is set by the Board the previous year.

at least a year in advance.
The General Partner may reimburse any director for reasonable expenses incurred in connection with attendance at Board meetings as well as additional Board responsibilities. AB Holding and AB, in turn, reimburse the General Partner for expenses incurred by the General Partner on their behalf, including amounts in respect of directors’ fees and expenses. These reimbursements are subject to any relevant provisions of the AB Holding Partnership Agreement and the AB Partnership Agreement.

Independent Director AB Holding Unit Ownership Guidelines
Non-Executive Chairman Compensation

Mr. Zoellick’s compensation, which was approvedEach Independent Director, by the sole stockholderlater of five years from the General Partnerinitial implementation date of these guidelines (February 2018) and the date as of which the director's tenure on the Board begins, shall accumulate, either through accumulating AB Holding Units awarded by the Board in April 2017, consists of:

an annual retainer of $425,000 (paid quarterly after any quarter during which Mr. Zoellick serves as Non-Executive Chairman); and
an annual equity-based grant under an equity compensation plan consisting of restrictedor purchasing Units on the open market, AB Holding Units with a grant date fairmarket value of $425,000.

Restricted AB Holding Unit awards grantedequal to Mr. Zoellick vest ratably on eachfive (5) times the director's annual retainer. Each Independent Director must maintain this ownership level for the duration of the first four anniversariesdirector's tenure on the Board.
As of December 31, 2021, each Independent Director then serving either complied with this policy or was on track to do so within the grant date.allotted time.

The Board granted to Mr. Zoellick 15,800 restricted AB Holding Units at the May 2018 Board Meeting. The number
2021 Annual Report163
Table of AB Holding Units granted was determined by dividing the $425,000 grant date fair value noted above by the May 2018 Price.Contents

Part III

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Securities Authorized for Issuance under Equity Compensation Plans

AB Holding Units to be issued pursuant to our equity compensation plans as of December 31, 20182021 are as follows:

Equity Compensation Plan Information
Plan Category Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted average exercise price of outstanding options, warrants and rights 
Number of securities remaining available for future issuance(1)
Equity compensation plans approved by security holders 671,243
 $22.83
 45,647,260
Equity compensation plans not approved by security holders —
 —
 —
Total 671,243
 $22.83
 45,647,260

(1)
All AB Holding Units remaining available for future issuance will be issued pursuant to the 2017Equity Compensation Plan which was approved during a Special Meeting of AB Holding Unitholders held on September 29, 2017.Information

Plan CategoryNumber of
securities to
be issued upon
exercise of
outstanding
options, warrants
and rights		Weighted average
exercise price
of outstanding
options, warrants
and rights
Number of
securities
remaining
available
for future
issuance(1)
Equity compensation plans approved by security holders5,774 $20.12 31,890,916 
Equity compensation plans not approved by security holders— — — 
Total5,774 $20.12 31,890,916 
(1)All AB Holding Units remaining available for future issuance will be issued pursuant to the 2017 Plan, which was approved during a Special Meeting of AB Holding Unitholders held on September 29, 2017.
There are no AB Units to be issued pursuant to an equity compensation plan.

For information about our equity compensation plans, see Note 19 to AB’s consolidated financial statements in Item 8.

Principal Security Holders

As of December 31, 2018, we had no information that any person beneficially owned more than 5% of the outstanding AB Holding Units.

As of December 31, 2018,2021, we had no information that any person beneficially owned more than 5% of the outstanding AB Units, except as reported by AXA, EQH and certain of their respectiveits subsidiaries on Schedule 13D/A with the SEC on January 3, 2019May 14, 2021, pursuant to the Exchange Act. We have prepared the following table, and the notesnote that follow,follows, in reliance on such filing:

Name and Address of Beneficial OwnerAmount and Nature of
Beneficial Ownership
Reported on Schedule		Percent of
Class
Equitable Holdings(1)
1290 Avenue of the Americas
New York, NY 10104
170,121,745 (1)62.4 (1)
Name and Address of  Beneficial Owner 
Amount and Nature of
Beneficial Ownership
Reported on Schedule
 Percent of Class
AXA(1)(2)(3)(4)
25 avenue Matignon 75008
Paris, France
 170,121,745
(3)(4) 
 63.3
(1)(4) 
AXA Equitable Holdings(1)(3)(4)
1290 Avenue of the Americas
New York, NY 10104
 170,121,745
(3)(4) 
 63.3
(1)(4) 

(1)Based on information included in Form S-4 filed with the SEC on December 6, 2018, AXA owns approximately 59.2% of the outstanding shares of EQH. Additionally, the percent of class included in the above table reflects issued and outstanding AB Units.
(2)
Based on information provided by AXA, as of December 31, 2018, 14.40% of the issued ordinary shares (representing 24.16% of the voting power) of AXA were owned directly and indirectly by two French mutual insurance companies (AXA Assurances IARD Mutuelle and AXA Assurances Vie Mutuelle) engaged in the Property & Casualty insurance business and the Life & Savings insurance business in France (“Mutuelles AXA”). The address of The Mutuelles AXA is 313 Terrasses de l'Arche 92727 Nanterre Cedex, France.

(3)By reason of their relationships, AXA, the Mutuelles AXA, AXA Equitable Holdings, AXA Equitable Financial Services, LLC (a subsidiary of EQH), AXA-IM Holding U.S. (a subsidiary of EQH), Alpha Units Holdings, Inc. (a subsidiary of EQH) and MLOA may be deemed to share the power to vote or to direct the vote and to dispose or direct the disposition of all or a portion of the 170,121,745 issued and outstanding AB Units.
(4)AXA, EQH and certain of their respective subsidiaries have reported on Schedule 13D/A dated as of January 3, 2019 that, by reason of AXA’s ownership of 59.2% of the outstanding shares of common stock of EQH, AXA may be deemed to beneficially own all of the issued and outstanding AB Units owned directly and indirectly by EQH.

(1)By reason of their relationships, EQH and its subsidiaries that hold AB Units may be deemed to share the power to vote or to direct the vote and to dispose or direct the disposition of all or a portion of the 170,121,745 issued and outstanding AB Units. The 62.4% includes the 1% general partnership interest held by EQH.
As of December 31, 2018,2021, AB Holding was the record owner of 96,658,278,99,271,727, or 36.0%36.6%, of the issued and outstanding AB Units.Units (or 36.2% including the 1% general partnership interest held by EQH).

164AllianceBernstein
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Part III
Management

As of December 31, 2018,2021, the beneficial ownership of AB Holding Units by each director and named executive officerNEO of the General Partner and by all directors and executive officers as a group is as follows:
Name of Beneficial OwnerNumber of AB
Holding Units and
Nature of Beneficial
Ownership		Percent of Class
Joan Lamm-Tennant(1)
1,806 *
Seth P. Bernstein(1)(2)
568,491 *
Nella L. Domenici13,438 *
Jeffrey J. Hurd(1)
— *
Daniel G. Kaye(1)
30,283 *
Nick Lane(1)
— *
Kristi A. Matus(1)
15,844 *
Das Narayandas26,249 *
Mark Pearson(1)
— *
Bertram L. Scott(1)
8,060 *
Charles G.T. Stonehill(1)
16,904 *
Todd Walthall2,208 *
Kate C. Burke(1)(3)
270,142 *
Ali Dibadj(1)(4)
151,848 *
Karl Sprules(1)(5)
263,027 *
Laurence E. Cranch(1)(6)
203,403 *
All directors and executive officers as a group (16 persons)(7)
1,571,703 1.6%
*    Number of AB Holding Units listed represents less than 1% of the Units outstanding.
(1)Excludes AB Holding Units beneficially owned by EQH and its subsidiaries. Mses. Lamm-Tennant and Matus, and Messrs. Bernstein, Hurd, Kaye, Lane, Pearson, Scott and Stonehill, each is a director and/or officer of EQH, Equitable Financial and/or Equitable America. Ms. Burke and Messrs. Bernstein, Dibadj, Sprules and Cranch each is a director and/or officer of the General Partner.
(2)Includes 441,476 restricted AB Holding Units that have not yet vested or with respect to which Mr. Bernstein has deferred delivery. See “Overview of Mr. Bernstein's Employment Agreement – Compensation Elements – Restricted AB Holding Units,” “Grants of Plan-based Awards in 2021” and “Outstanding Equity Awards at 2021 Fiscal Year-End” in Item 11 for additional information.
(3)Includes 239,774 restricted AB Holding Units that have not yet vested. For information regarding Ms. Burke's long-term incentive compensation awards, see “Relocation-related Performance Awards,” “Grants of Plan-based Awards in 2021” and “Outstanding Equity Awards at 2021 Fiscal Year-End” in Item 11.
(4)Includes 46,456 restricted AB Holding Units awarded to Mr. Dibadj that have not yet vested. For information regarding Mr. Dibadj's long-term incentive compensation awards, see "Grants of Plan-based Awards in 2021” and “Outstanding Equity Awards at 2021 Fiscal Year-End” in Item 11.
(5)Includes 228,117 restricted AB Holding Units that have not yet vested. For information regarding Mr. Sprules's long-term incentive compensation awards, see “Relocation-related Performance Awards,” “Grants of Plan-based Awards in 2021” and “Outstanding Equity Awards at 2021 Fiscal Year-End” in Item 11.
(6)Includes 195,962 restricted AB Holding Units that have not yet vested or with respect to which Mr. Cranch has deferred delivery. For information regarding Mr. Cranch's long-term incentive compensation awards, see “Relocation-related Performance Awards,” “Grants of Plan-based Awards in 2021” and “Outstanding Equity Awards at 2021 Fiscal Year-End” in Item 11.
(7)Includes 1,151,785 restricted AB Holding Units awarded to the executive officers as a group as long-term incentive compensation that have not yet vested and/or with respect to which the executive officer has deferred delivery.
Name of Beneficial  Owner 
Number of AB
Holding Units and
Nature of
Beneficial
Ownership
 Percent of Class
Seth P. Bernstein(1)(2)
 314,574
 *
Robert B. Zoellick(1)
 47,100
 *
Paul L. Audet 9,345
 *
Ramon de Oliveira(1)
 13,379
 *
Denis Duverne(1)
 2,000
 *
Barbara Fallon-Walsh(1)
 13,379
 *
Daniel G. Kaye(1)
 13,379
 *
Shelley B. Leibowitz 16,145
 *
Anders Malmstrom(1)
 —
 *
Das Narayandas 9,345
 *
Mark Pearson(1)
 —
 *
James A. Gingrich(1)(3)
 1,784,907
 1.8
Laurence E. Cranch(1)(4)
 365,212
 *
John C. Weisenseel(1)(5)
 303,041
 *
Kate C. Burke(1)(6)
 208,643
  
All directors and executive officers as a group (16 persons)(7)(8)
 3,137,990
 3.2%

*2021 Annual ReportNumber of AB Holding Units listed represents less than 1% of the Units outstanding.165
(1)Excludes AB Holding Units beneficially owned by AXA, EQH and their respective subsidiaries. Ms. Fallon-Walsh and Messrs. Bernstein, de Oliveira, Duverne, Kaye, Malmstrom and Pearson are directors and/or officers of AXA, EQH, AXA Equitable and/or MLOA. Ms. Burke and Messrs. Bernstein, Zoellick, Gingrich, Cranch and Weisenseel are directors and/or officers of the General Partner.
(2)
Represents 314,574 restricted AB Holding Units that have not yet vested or with respect to which he has deferred delivery. See “Overview of Our President and CEO’s Compensation – Compensation Elements – Restricted AB Holding Units” in Item 11 for additional information.
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Part III
(3)
Includes 1,695,216 restricted AB Holding Units awarded to Mr. Gingrich as long-term incentive compensation that have not yet vested or with respect to which he has deferred delivery. For information regarding Mr. Gingrich’s long-term incentive compensation awards, see “Grants of Plan-based Awards in 2018” and “Outstanding Equity Awards at 2018 Fiscal Year-End” in Item 11.
(4)
Includes 242,611 restricted AB Holding Units awarded to Mr. Cranch as long-term incentive compensation that have not yet vested or with respect to which he has deferred delivery. For information regarding Mr. Cranch's long-term incentive compensation awards, see “Grants of Plan-based Awards in 2018” and “Outstanding Equity Awards at 2018 Fiscal Year-End” in Item 11.

(5)
Includes 270,318 restricted AB Holding Units awarded to Mr. Weisenseel as long-term incentive compensation that have not yet vested or with respect to which he has deferred delivery.  For information regarding Mr. Weisenseel’s long-term incentive compensation awards, see “Grants of Plan-based Awards in 2018” and “Outstanding Equity Awards at 2018 Fiscal Year-End” in Item 11.
(6)
Includes 189,746 restricted AB Holding Units awarded to Ms. Burke as long-term incentive compensation that have not yet vested.  For information regarding Ms. Burke’s long-term incentive compensation awards, see “Grants of Plan-based Awards in 2018” and “Outstanding Equity Awards at 2018 Fiscal Year-End” in Item 11.
(7)Includes 2,712,465 restricted AB Holding Units awarded to the executive officers as a group as long-term incentive compensation that have not yet vested and/or with respect to which the executive officer has deferred delivery.

As of December 31, 2018,2021, our directors and executive officers did not beneficially own any AB Units.

As of December 31, 2018, the beneficial ownership of the common stock of AXA by each director and named executive officer of the General Partner and by all directors and executive officers as a group is as follows:

AXA Common Stock(1)

Name of Beneficial  Owner
Number of Shares and
Nature of Beneficial
Ownership
Percent of Class
Seth P. Bernstein—
*
Robert B. Zoellick—
*
Paul L. Audet—
*
Ramon de Oliveira(2)
38,536
*
Denis Duverne(3)
2,010,307
*
Barbara Fallon-Walsh(4)
29,340
*
Daniel G. Kaye11,634
*
Shelley B. Leibowitz—
*
Anders Malmstrom(5)
129,308
*
Das Narayandas—
*
Mark Pearson(6)
496,957
*
James A. Gingrich—
*
Laurence E. Cranch—
*
John C. Weisenseel—
*
Kate C. Burke—
*
All directors and executive officers as a group (16 persons)(7)
2,716,082
*

* Number of shares listed represents less than 1% of the outstanding AXA common stock.
(1)
Holdings of AXA American Depositary Shares (“ADS”) are expressed as their equivalent in AXA common stock. Each AXA ADS represents the right to receive one AXA ordinary share.
(2)Includes 4,361 shares Mr. de Oliveira can acquire within 60 days under option plans.
(3)Includes 415,045 shares Mr. Duverne can acquire within 60 days under option plans.
(4)Includes 2,127 shares Ms. Fallon-Walsh can acquire within 60 days under options plans.
(5)Includes 36,807 shares Mr. Malmstrom can acquire within 60 days under option plans. Also includes 62,654 unvested AXA performance shares, which are paid out when vested based on the share price of AXA at that time and are subject to achievement of internal performance conditions.
(6)Includes 48,486 shares Mr. Pearson can acquire within 60 days under options plans. Also includes 203,470 unvested AXA performance shares, which are paid out when vested based on the share price of AXA at that time and are subject to achievement of internal performance conditions.
(7)Includes 506,826 shares the directors and executive officers as a group can acquire within 60 days under option plans.


As of December 31, 2018,2021, the beneficial ownership of the common stock of EQH by each director and named executive officer of the General Partner and by all directors and executive officers as a group is as follows:

EQH Common Stock

Name of Beneficial  Owner
Number of Shares and
Nature of Beneficial
Ownership
Percent of Class
Seth P. Bernstein(1)
13,250
*EQH Common Stock
Robert B. Zoellick—
*
Paul L. Audet—
*
Ramon de Oliveira8,844
*
Denis Duverne—
*
Barbara Fallon-Walsh5,844
*
Daniel G. Kaye10,844
*
Shelley B. Leibowitz—
*
Anders Malmstrom(2)
53,983
*
Das Narayandas2,000
*
Mark Pearson(3)
136,187
*
James A. Gingrich—
*
Laurence E. Cranch—
*
John C. Weisenseel—
*
Kate C. Burke—
*
All directors and executive officers as a group (16 persons)(4)
230,952
*

Name of Beneficial OwnerNumber of Shares and
Nature of Beneficial
Ownership		Percent of Class
Joan Lamm-Tennant15,679 *
Seth P. Bernstein(1)
173,639 *
Nella L. Domenici— *
Jeffrey J. Hurd(2)
308,322 *
Daniel G. Kaye46,359 *
Nick Lane(3)
311,090 *
Kristi A. Matus13,527 *
Das Narayandas2,000 *
Mark Pearson(4)
1,359,187 *
Bertram L. Scott22,959 *
Charles G.T. Stonehill22,515 *
Todd Walthall— *
Kate C. Burke(5)
489 *
Ali Dibadj(5)
489 *
Karl Sprules— *
Laurence E. Cranch— *
All directors and executive officers as a group (16 persons)(6)
2,276,255 0.6%
*Number of shares listed represents less than 1% of the outstanding EQH common stock.
(1)Includes (i) 103,586 options Mr. Bernstein has the right to exercise within 60 days, (ii) 12,791 restricted stock units that will vest within 60 days and settle in EQH shares and (iii) 28,292 EQH performance shares that are earned and will be paid out within 60 days.
(2)Includes (i) 201,694 options Mr. Hurd has the right to exercise within 60 days, (ii) 26,084 restricted stock units that will vest within 60 days and settle in EQH shares and (iii) 50,925 EQH performance shares that are earned and will be paid out within 60 days.
(3)Includes (i) 200,624 options Mr. Lane has the right to exercise within 60 days, (ii) 27,056 restricted stock units that will vest within 60 days and settle in EQH shares and (iii) 53,754 EQH performance shares that are earned and will be paid out within 60 days.
(4)Includes (i) 873,845 options Mr. Pearson has the right to exercise within 60 days, (ii) 96,124 restricted stock units that will vest within 60 days and settle in EQH shares and (iii) 155,604 EQH performance shares that are earned and will be paid out within 60 days.
(5)Represents 489 restricted stock units that will vest within 60 days and settle in EQH shares.
(6)Includes 1,379,749 options that may be exercised, 163,033 restricted stock units that will vest within 60 days and 288,575 EQH performance shares that will be paid out within 60 days for the directors and executive officers as a group.

(1)166Includes 9,250 restricted stock units that will vest within 60 days.AllianceBernstein
(2)Includes 33,483 unvested EQH performance shares and 18,500 restricted stock units that will vest within 60 days.
(3)Includes 85,937 unvested EQH performance shares and 46,250 restricted stock units that will vest within 60 days.
(4)Includes 119,420 unvested EQH performance shares and 64,750 restricted stock units that will vest within 60 days for the directors and executive officers as a group.

Table of Contents
Part III
Partnership Matters

The General Partner makes all decisions relating to the management of AB and AB Holding. The General Partner has agreed that it will conduct no business other than managing AB and AB Holding, although it may make certain investments for its own account. Conflicts of interest, however, could arise between AB and AB Holding, the General Partner and the Unitholdersof both Partnerships.

Section 17-403(b) of the Delaware Revised Uniform Limited Partnership Act (“(“Delaware Act”Act”) states in substance that, except as provided in the Delaware Act or the applicable partnership agreement, a general partner of a limited partnership has the liabilities of a general partner in a general partnership governed by the Delaware Uniform Partnership Law (as in effect on July 11, 1999) to the partnership and to the other partners. In addition, as discussed below, Sections 17-1101(d) and 17-1101(f) of the Delaware Act generally provide that a partnership agreement may limit or eliminate fiduciary duties a partner may be deemed to owe to the limited partnership or to another partner, and any related liability, provided that the partnership agreement may not limit or eliminate the implied contractual covenant of good faith and fair dealing. Accordingly, while under Delaware law a general partner of a limited partnership is liable as a fiduciary to the other partners, those fiduciary obligations may be altered by the terms of the applicable partnership agreement. Each of the AB Partnership Agreement and AB Holding Partnership Agreement (each, a “Partnership Agreement”Agreement” and, together, the “Partnership Agreements”Agreements”) sets forth limitations on the duties and liabilities of the General Partner. Each Partnership Agreement provides that the General Partner is not liable for monetary damages for errors in judgment or for breach of fiduciary duty (including breach of any duty of care or loyalty), unless it is established (the person asserting such liability having the burden of proof) that the General Partner’s action or failure to act involved an act or omission undertaken with deliberate intent to cause injury, with reckless disregard for the best interests of the Partnerships or with actual bad faith on the part of the General Partner, or constituted actual fraud. Whenever the Partnership Agreements provide that the

General Partner is permitted or required to make a decision (i) in its “discretion” or under a grant of similar authority or latitude, the General Partner is entitled to consider only such interests and factors as it desires and has no duty or obligation to consider any interest of or other factors affecting the Partnerships or any Unitholder of AB or AB Holding or (ii) in its “good faith” or under another express standard, the General Partner will act under that express standard and will not be subject to any other or different standard imposed by either Partnership Agreement or applicable law or in equity or otherwise. Each Partnership Agreement further provides that to the extent that, at law or in equity, the General Partner has duties (including fiduciary duties) and liabilities relating thereto to either Partnership or any partner, the General Partner acting under either Partnership Agreement, as applicable, will not be liable to the Partnerships or any partner for its good faith reliance on the provisions of the Partnership Agreement.

In addition, each Partnership Agreement grants broad rights of indemnification to the General Partner and its directors, officers and affiliates and authorizes AB and AB Holding to enter into indemnification agreements with the directors, officers, partners, employees and agents of AB and its affiliates and AB Holding and its affiliates. The Partnerships have granted broad rights of indemnification to officers and employees of AB and AB Holding. The foregoing indemnification provisions are not exclusive, and the Partnerships are authorized to enter into additional indemnification arrangements. AB and AB Holding have obtained directors and officers/errors and omissions liability insurance.

Each Partnership Agreement also allows transactions between AB and AB Holding and the General Partner or its affiliates,as we describe in “Policies and Procedures Regarding Transactions with Related Persons” in Item 13,, so long as such transactions are on an arms-length basis. The Delaware courts have held that provisions in partnership or limited liability company agreements that permit affiliate transactions so long as they are on an arms-length basis operate to establish a contractually-agreed-to fiduciary duty standard of entire fairness on the part of the general partner or manager in connection with the approval of affiliate transactions. Also, each Partnership Agreement expressly permits all affiliates of the General Partner to compete, directly or indirectly, with AB and AB Holding, as we discuss in “Competition” in Item 1.1. The Partnership Agreements further provide that, except to the extent that a decision or action by the General Partner is taken with the specific intent of providing an improper benefit to an affiliate of the General Partner to the detriment of AB or AB Holding, there is no liability or obligation with respect to, and no challenge of, decisions or actions of the General Partner that would otherwise be subject to claims or other challenges as improperly benefiting affiliates of the General Partner to the detriment of the Partnerships or otherwise involving any conflict of interest or breach of a duty of loyalty or similar fiduciary obligation.


2021 Annual Report167
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Section 17-1101(c) of the Delaware Act provides that it is the policy of the Delaware Act to give maximum effect to the principle of freedom of contract and to the enforceability of partnership agreements. Further, Section 17-1101(d) of the Delaware Act provides in part that to the extent that, at law or in equity, a partner has duties (including fiduciary duties) to a limited partnership or to another partner, those duties may be expanded, restricted, or eliminated by provisions in a partnership agreement (provided that a partnership agreement may not eliminate the implied contractual covenant of good faith and fair dealing). In addition, Section 17-1101(f) of the Delaware Act provides that a partnership agreement may limit or eliminate any or all liability of a partner to a limited partnership or another partner for breach of contract or breach of duties (including fiduciary duties); provided, however, that a partnership agreement may not limit or eliminate liability for any act or omission that constitutes a bad faith violation of the implied contractual covenant of good faith and fair dealing. Decisions of the Delaware courts have recognized the right of parties, under the above provisions of the Delaware Act, to alter by the terms of a partnership agreement otherwise applicable fiduciary duties and liability for breach of duties. However, the Delaware courts have required that a partnership agreement make clear the intent of the parties to displace otherwise applicable fiduciary duties (the otherwise applicable fiduciary duties often being referred to as “default” fiduciary duties). Judicial inquiry into whether a partnership agreement is sufficiently clear to displace default fiduciary duties is necessarily fact driven and is made on a case by case basis. Accordingly, the effectiveness of displacing default fiduciary obligations and liabilities of general partners continues to be a developing area of the law and it is not certain to what extent the foregoing provisions of the Partnership Agreements are enforceable under Delaware law.


Item 13. Certain Relationships and Related Transactions, and Director Independence

Policies and Procedures Regarding Transactions with Related Persons

Each Partnership Agreement expressly permits AXA, EQH and their affiliatesits subsidiaries (collectively, “AXAEQH Affiliates”), to provide services to AB and AB Holding if the terms of the transaction are approved by the General Partner in good faith as being comparable to (or more favorable to each such Partnership than) those that would prevail in a transaction with an unaffiliated party. This requirement is conclusively presumed to be satisfied as to any transaction or arrangement that (i) in the reasonable and good faith judgment of the General Partner meets that unaffiliated party standard, or (ii) has been approved by a majority of those directors of the General Partner who are not also directors, officers or employees of an affiliate of the General Partner.

In practice, our management pricing committees review investment advisory agreements with AXAEQH Affiliates, which is the manner in which the General Partner reaches a judgment regarding the appropriateness of the fees. Other transactions with AXAEQH Affiliates are submitted to the Audit Committee for their review and approval. (See “Committees of the Board” in Item 10 for details regarding the Audit Committee.) We are not aware of any transaction during 20182021 between our company and any related person with respect to which these procedures were not followed.

Our relationships with AXAEQH Affiliates also are subject to applicable provisions of the insurance laws and regulations of New York and other states. Under such laws and regulations, the terms of certain investment advisory and other agreements we enter into with AXAEQH Affiliates are required to be fair and equitable and charges or fees for services performed must be reasonable. Also, in some cases, the agreements are subject to regulatory approval.

We have written policies regarding the employment of immediate family members of any of our related persons. Compensation and benefits for all of our employees is established in accordance with our human resources practices, taking into consideration the defined qualifications, responsibilities and nature of the role.

Financial Arrangements with AXAEQH Affiliates

The General Partner has, in its reasonable and good faith judgment (based on its knowledge of, and inquiry with respect to, comparable arrangements with or between unaffiliated parties), approved the following arrangements with AXAEQH Affiliates as being comparable to, or more favorable to AB than, those that would prevail in a transaction with an unaffiliated party.


Transactions
168AllianceBernstein
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See Note 12 to AB’s consolidated financial statements in Item 8 for disclosures related to our credit facility with EQH. Significant transactions between AB and related persons during 20182021 are as follows (the first table summarizes services we provide to related persons and the second table summarizes services our related persons provide to us):

Parties(1)
General Description of Relationship(2)
Amounts Received
or Accrued for in 2018
   
AXA Equitable(3)
We provide investment management services and ancillary accounting, valuation, reporting, treasury and other services to the general and separate accounts of AXA Equitable Holdings and its insurance company subsidiaries.$71,891,000
EQAT, AXA Enterprise Trust and AXA Premier VIP TrustWe serve as sub-adviser to these open-end mutual funds, each of which is sponsored by a subsidiary of AXA Equitable Holdings.$27,755,000
AXA Life InvestWe provide investment management, distribution and shareholder servicing-related services.$17,921,000
AXA Life Japan Limited(3)
 $15,089,000
AXA France(3)
 $10,533,000
AXA Switzerland Life(3)
 $8,912,000
AXA Rosenberg Asia Pacific(3)
 $6,206,000
AXA Germany(3)
 $5,597,000
AXA Re Arizona Company(3)
 $3,215,000
AXA Belgium(3)
 $3,137,000

AXA Hong Kong Life(3)
 $2,400,000
AXA Insurance UK Non Direct Regulated(3)
 $2,291,000
MONY Life Insurance Company of America(3)
 $1,792,000
Architas Multi-Manager UK(3)
 $1,503,000
AXA Winterthur(3)
 $1,133,000
AXA Mediterranean(3)
 $843,000
AXA Insurance Ltd(3)
 $730,000
AXA U.K. Group Pension Scheme $591,000
AXA Switzerland Property and Casualty(3)
 $511,000
AXA Corporate Solutions(3)
 $428,000
AXA General Insurance Hong Kong Ltd(3)
 $397,000
U.S. Financial Life Insurance Company(3)
 $373,000
AXA Spain Property and Casualty(3)
 $364,000
AXA General Insurance Hong Kong Ltd.(3)
 $328,000
AXA Insurance Company(3)
 $222,000
AXA MPS (3)
 $222,000
AXA Equitable Holdings(3)
 $199,000
AXA Life Singapore (3)
 $136,000
AXA Investment Managers Ltd.(3)
 $109,000
XL Group Investments Ltd(3)
 $101,000
   
Parties(1)(3)
General Description of RelationshipAmounts Paid
or Accrued for in 2018
AXA AdvisorsDistributes certain of our Retail Products and provides Private Wealth Management referrals.$21,567,000
AXA Business Services Pvt. Ltd.Provides data processing services and support for certain investment operations functions.$6,815,000
AXA Equitable HoldingsWe are covered by various insurance policies maintained by AXA Equitable Holdings.$2,615,000
AXA Technology Services India Pvt.Provides certain data processing services and functions.$2,153,000
AXA XL InsuranceWe are covered by various E&O insurance policies maintained by AXA XL.$1,961,000
AXA AdvisorsSells shares of our mutual funds under Distribution Service and educational Support agreements.$1,485,000
AXA Group Solutions Pvt. Ltd.Provides maintenance and development support for applications.$1,038,000
GIE Informatique AXAProvides cooperative technology development and procurement services to us and to various other subsidiaries of AXA.$399,000

Parties(1)
AB
General Description of Relationship(2)
Amounts Received or one of its subsidiaries is a party to each transaction.

Accrued for in 2021
(2)Equitable FinancialWe provide investment management services unless otherwise indicated.and ancillary accounting, valuation, reporting, treasury and other services to the general and separate accounts of Equitable Financial and its insurance company subsidiaries.$101,312,000 
EQAT and Equitable Premier VIP TrustWe serve as sub-adviser to these open-end mutual funds, each of which is sponsored by a subsidiary of Equitable Holdings.28,079,000 
Equitable America2,609,000 
Equitable Holdings1,686,000 
(3)
Parties(1)
This entity is a subsidiaryGeneral Description of AXA.RelationshipAmounts Paid or
Accrued for in 2021
Equitable HoldingsDistributes certain of our Retail Products; provides Private Wealth Management referrals; sells shares of our mutual funds under Distribution Service and Educational Support agreements; includes us as insured under various insurance policies.$10,876,000 

(1)AB or one of its subsidiaries is a party to each transaction.
(2)We provide investment management services unless otherwise indicated.
Arrangements with Immediate Family Members of Related Persons

During 2018,2021, we did not have arrangements with immediate family members of our directors and executive officers.

Director Independence

See “Independence of Certain Directors” in Item 10.

Item 14. Principal Accounting Fees and Services

Fees for professional audit services rendered by PricewaterhouseCoopers LLP (“("PwC”") for the audit of AB’s and AB Holding’s annual financial statements for 20182021 and 2017,2020, respectively, and fees for other services rendered by PwC are as follows:
20212020
(in thousands)
Audit fees(1)
$6,956 $6,616 
Audit-related fees(2)
3,580 3,188 
Tax fees(3)
2,221 1,222 
All other fees(4)
6 6 
Total$12,763 $11,032 
 2018 2017
 (in thousands)
Audit fees(1)
$6,244
 $5,943
Audit-related fees(2)
3,259
 3,457
Tax fees(3)
2,001
 2,112
All other fees(4)
6
 189
Total$11,510
 $11,701
(1)Includes $63,222 and $61,982 paid for audit services to AB Holding in 2021 and 2020, respectively.

(1)Includes $58,447 and $57,010 paid for audit services to AB Holding in 2018 and 2017, respectively.
(2)Audit-related fees consist principally of fees for audits of financial statements of certain employee benefit plans, internal control reviews and accounting consultation.
(3)Tax fees consist of fees for tax consultation and tax compliance services.
(4)All other fees in 2018 and 2017 consisted of miscellaneous non-audit services.

(2)Audit-related fees consist principally of fees for audits of financial statements of certain employee benefit plans, internal control reviews and accounting consultation.
(3)Tax fees consist of fees for tax consultation and tax compliance services.
(4)All other fees in 2021 and 2020 consisted of miscellaneous non-audit services.
The Audit Committee has a policy to pre-approve audit and non-audit service engagements with the independent registered public accounting firm. The independent registered public accounting firm must provide annually a comprehensive and detailed schedule of each proposed audit and non-audit service to be performed. The Audit Committee then affirmatively indicates its approval of the listed engagements. Engagements that are not listed but that are of similar scope and size to those listed and approved may be deemed to be approved, if the fee for such service is less than $100,000. In addition, the Audit Committee has delegated to its chairman the ability to approve any permissible non-audit engagement where the fees are expected to be less than $100,000.

PART IV
2021 Annual Report169

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PART IV
Item 15. Exhibits, Financial Statement Schedules

(a)There is no document filed as part of this Form 10-K.

(a)There is no document filed as part of this Form 10-K.
Financial Statement Schedule.

Attached to this Form 10-K is a schedule describing Valuation and Qualifying Account-Allowance for Doubtful Accounts for the three years ended December 31, 2018, 20172021, 2020 and 2016.2019.

(b)Exhibits.

(b)Exhibits.
The following exhibits required to be filed by Item 601 of Regulation S-K are filed herewith or incorporated by reference herein, as indicated:
ExhibitDescription
3.01
AllianceBernstein Corporation By-Laws with amendments through July 25, 2018.2018 (incorporated by reference to Ex. 3.01 to Form 10-K for the fiscal year ended December 31, 2018, as filed February 13, 2019).
3.02
Amended and Restated Certificate of Limited Partnership dated February 24, 2006 of AB Holding (incorporated by reference to ExhibitEx. 99.06 to Form 8-K, as filed February 24, 2006).
3.03
Amendment No. 1 dated February 24, 2006 to Amended and Restated Agreement of Limited Partnership of AB Holding (incorporated by reference to ExhibitEx. 3.1 to Form 10-Q for the quarterly periodfiscal quarter ended September 30, 2006, as filed November 8, 2006).
3.04
Amended and Restated Agreement of Limited Partnership dated October 29, 1999 of AB Holding (incorporated by reference to ExhibitEx. 3.2 to Form 10-K for the fiscal year ended December 31, 2003, as filed March 10, 2004).
3.05
Amended and Restated Certificate of Limited Partnership dated February 24, 2006 of AB (incorporated by reference to ExhibitEx. 99.07 to Form 8-K, as filed February 24, 2006).
3.06
Amendment No. 1 dated February 24, 2006 to Amended and Restated Agreement of Limited Partnership of AB (incorporated by reference to ExhibitEx. 3.2 to Form 10-Q for the quarterly periodfiscal quarter ended September 30, 2006, as filed November 8, 2006).
3.07
Amended and Restated Agreement of Limited Partnership dated October 29, 1999 of AB (incorporated by reference to ExhibitEx. 3.3 to Form 10-K for the fiscal year ended December 31, 2003, as filed March 10, 2004).
3.08
Certificate of Amendment to the Certificate of Incorporation of AllianceBernstein Corporation (incorporated by reference to ExhibitEx. 99.08 to Form 8-K, as filed February 24, 2006).
10.01
4.01
Amendment to Seth P. Bernstein's Employment Agreement.*Description of AB Holding Units and AB Units.
10.02
10.01
AllianceBernstein 20182021 Incentive Compensation Award Program.*
10.03
10.02
AllianceBernstein 20182021 Deferred Cash Compensation Program.*
10.04
10.03
Form of Award Agreement, dated as of December 31, 2018,2021, under Incentive Compensation Award Program, Deferred Cash Compensation Program and AB 2017 Long Term Incentive Plan.*
10.05
10.04
Form of Award Agreement dated as of May 15, 2018, under AB 2017 Long Term Incentive Plan relating to equity compensation awards to EligibleIndependent Directors.*
10.06
10.05
AwardSummary of AB's Lease at 1345 Avenue of the Americas, New York, New York.
10.06
Summary of AB's Lease at 501 Commerce Street, Nashville, Tennessee.
170AllianceBernstein
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Part IV
ExhibitDescription
10.07
10.08Amended and Restated Revolving Credit Agreement, dated as of May 15, 2018October 13, 2021 (incorporated by reference to Ex. 99.01 to Form 8-K, as filed October 19, 2021)
10.09
Retirement Agreement among Robert B. Zoellick,Laurence E. Cranch, AB and AB Holding, under AB 2017 Long Term Incentive Plan.AllianceBernstein Corporation (incorporated by reference to Exhibit 10.01 to Form 8-K, as filed May 4, 2021).*
10.07
10.10
James A. Gingrich Award LetterAllianceBernstein Change in Control Plan for Executive Officers (incorporated by reference to Exhibit 99.01 to Form 8-K, as filed December 14, 2020).*
10.11
Retirement Agreement among John C. Weisenseel, AB and AllianceBernstein Corporation (incorporated by reference to Exhibit 99.02 to Form 8-K, as filed August 26, 2020).*
10.12
Amendment No.2 to Seth P. Bernstein's Employment Agreement (incorporated by reference to Ex. 10.1 to Form 8-K, as filed December 19, 2019).*
10.13
Credit Agreement dated as of April 24, 2018.*November 4, 2019 between AllianceBernstein L.P., as borrower, and Equitable Holdings, Inc., as lender (incorporated by reference to Ex. 10.01 to Form 8-K, as filed November 4, 2019).
10.08
10.14
Amendment to Seth P. Bernstein's Employment Agreement (incorporated by reference to Ex. 10.01 to Form 10-K for the fiscal year ended December 31, 2018, as filed February 13, 2019).*
10.15
Kate C. Burke Award Letter dated as of April 24, 2018.2018 (incorporated by reference to Ex. 10.08 to Form 10-K for the fiscal year ended December 31, 2018, as filed February 13, 2019).*
10.09
10.16
Laurence E. Cranch Award Letter dated as of April 24, 2018.2018 (incorporated by reference to Ex. 10.09 to Form 10-K for the fiscal year ended December 31, 2018, as filed February 13, 2019).*
10.10
10.17
John C. Weisenseel Award Letter dated as of April 24, 2018.2018 (incorporated by reference to Ex. 10.10 to Form 10-K for the fiscal year ended December 31, 2018, as filed February 13, 2019).*
10.11
10.18
Amendment to the Retirement Plan for Employees of AllianceBernstein L.P., dated as of April 1, 2018.2018 (incorporated by reference to Ex. 10.11 to Form 10-K for the fiscal year ended December 31, 2018, as filed February 13, 2019).*
10.12
10.19
Amendment to the Profit Sharing Plan for Employees of AllianceBernstein L.P., dated as of April 1, 2018.*
10.13
Summary of AB's Lease at 1345 Avenue of the Americas, New York, New York.
10.14
Summary of AB's Lease at 501 Commerce Street, Nashville, Tennessee.
10.15
Guidelines for Transfer of AB Units.

ExhibitDescription
10.16
Amended and Restated Revolving Credit Agreement, dated as of September 27, 2018 (incorporated by reference to Exhibit 10.01 to Form 8-K, as filed October 3, 2018).
10.17
Amendment Agreement, dated as of February 6, 2018, between James A. Gingrich and AB to amend the Letter Agreement, dated as of February 13, 2017, between Mr. Gingrich and AB (incorporated by reference to Exhibit 10.01Ex. 10.12 to Form 10-K for the fiscal year ended December 31, 2017,2018, as filed February 13, 2018)2019).*
10.18
10.20
AB 2017 Long Term Incentive Plan (incorporated by reference to ExhibitEx. 10.06 to Form 10-K for the fiscal year ended December 31, 2017, as filed February 13, 2018).*
10.19
10.21
Letter Agreement between Robert B. Zoellick and AllianceBernstein Corporation relating to Mr. Zoellick's Service as Non-Executive Chairman of the Board (incorporated by reference to Exhibit 10.1 to Form 8-K, as filed May 1, 2017).*
10.20
Employment Agreement among Seth P. Bernstein, AB, AB Holding and AllianceBernstein Corporation (incorporated by reference to ExhibitEx. 10.3 to Form 10-K,8-K, as filed May 1, 2017).*
10.21
10.22
Amendment to the Profit Sharing Plan for Employees of AllianceBernstein L.P., dated as of October 20, 2016 and effective as of January 1, 2017 (incorporated by reference to ExhibitEx. 10.06 to Form 10-K for the fiscal year ended December 31, 2016,2017, as filed February 14, 2017)13, 2018).*
10.22
10.23
Profit Sharing Plan for Employees of AB, as amended and restated as of January 1, 2015 and as further amended as of January 1, 2017 (incorporated by reference to ExhibitEx. 10.05 to Form 10-K thefor the fiscal year ended December 31, 2015, as filed February 11, 2016).*
10.23
10.24
Amendment and Restatement of the Retirement Plan for Employees of AB, as of January 1, 2015 (incorporated by reference to ExhibitEx. 10.06 to Form 10-K for the fiscal year ended December 31, 2015, as filed February 11, 2016).*
10.24
10.25
Commercial Paper Dealer Agreement 4(a)(2) Program, dated as of June 1, 2015, between AllianceBernstein L.P., as Issuer, and Citigroup Global Markets Inc., as Dealer (incorporated by reference to ExhibitEx. 10.08 to Form 10-K for the fiscal year ended December 31, 2015, as filed February 11, 2016).
10.252021 Annual Report
171
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Part IV
ExhibitDescription
10.26
Commercial Paper Dealer Agreement 4(a)(2) Program, dated as of June 1, 2015, between AllianceBernstein L.P., as Issuer, and Credit Suisse Securities (USA) LLC, as Dealer.(incorporatedDealer (incorporated by reference to ExhibitEx. 10.09 to Form 10-K for the fiscal year ended December 31, 2015, as filed February 11, 2016).
10.26
10.27
Commercial Paper Dealer Agreement 4(a)(2) Program, dated as of June 1, 2015, between AllianceBernstein L.P., as Issuer, and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as Dealer.(incorporatedDealer (incorporated by reference to ExhibitEx. 10.10 to Form 10-K for the fiscal year ended December 31, 2015, as filed February 11, 2016).
10.27
10.28
Investment Advisory and Management Agreement for the General Account of AXA Equitable Financial Life Insurance Company (incorporated by reference to ExhibitEx. 10.5 to Form 10-K for the fiscal year ended December 31, 2004, as filed March 15, 2005).
10.28
10.29
Amended and Restated Investment Advisory and Management Agreement dated January 1, 1999 among AB Holding, Alliance Corporate Finance Group Incorporated, and AXA Equitable Financial Life Insurance Company (incorporated by reference to ExhibitEx. (a)(6) to Form 10-Q/A for the quarterly periodfiscal quarter ended September 30, 1999, as filed on September 28, 2000).
21.01
Subsidiaries of AB.
23.01
Consents of PricewaterhouseCoopers LLP.
31.01
Certification of Mr.Seth Bernstein furnished pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.02
Certification of Mr. WeisenseelAli Dibadj furnished pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.01
Certification of Mr. Seth Bernstein furnished for the purpose of complying with Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.02
Certification of Mr. Weisenseel Ali Dibadj furnished for the purpose of complying with Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS
XBRL Instance Document.Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH
XBRL Taxonomy Extension Schema.
101.CAL
XBRL Taxonomy Extension Calculation Linkbase.
101.LAB
XBRL Taxonomy Extension Label Linkbase.
101.PRE
XBRL Taxonomy Extension Presentation Linkbase.
101.DEF
XBRL Taxonomy Extension Definition Linkbase.
*104
The cover page from the Company's Annual Report on Form 10-K for the year ended December 31, 2021, formatted in Inline XBRL (included in Exhibit 101).
*Denotes a compensatory plan or arrangement


Item 16. Form 10-K Summary

None.

172AllianceBernstein
Signatures
Table of Contents
Signatures
Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
AllianceBernstein Holding L.P.
AllianceBernstein Holding L.P.
Date: February 13, 201911, 2022By:/s/ Seth P. Bernstein
Seth P. Bernstein
Chief Executive Officer
Pursuant to the requirements of the Exchange Act, this report has been signed by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Date: February 11, 2022/s/ Ali Dibadj
Ali Dibadj
Chief Financial Officer & Head of Strategy
Date: February 11, 2022/s/ William R. Siemers
William R. Siemers
Controller & Chief Accounting Officer
2021 Annual Report173
Table of Contents
Directors
/s/ Seth P. Bernstein/s/ Joan Lamm-Tennant
Seth P. BernsteinJoan Lamm-Tennant
President and Chief Executive OfficerChair of the Board
/s/ Nella L. Domenici/s/ Jeffrey J. Hurd
Nella L. DomeniciJeffrey J. Hurd
DirectorDirector
Date: February 13, 2019/s/ John C. WeisenseelDaniel G. Kaye/s/ Nick Lane
Daniel G. KayeJohn C. WeisenseelNick Lane
DirectorChief Financial OfficerDirector
/s/ Kristi A. Matus/s/ Das Narayandas
Kristi A. MatusDas Narayandas
DirectorDirector
/s/ Mark Pearson/s/ Bertram L. Scott
Mark PearsonBertram L. Scott
DirectorDirector
/s/ Charles G.T. Stonehill/s/ Todd Walthall
Charles G. T. StonehillTodd Walthall
DirectorDirector
Date: February 13, 2019174/s/ William R. Siemers
William R. Siemers
Controller and Chief Accounting OfficerAllianceBernstein

Directors
Table of Contents
/s/ Seth P. Bernstein/s/ Robert B. Zoellick
Seth P. BernsteinRobert B. Zoellick
President and Chief Executive OfficerChairman of the Board
/s/ Paul L. Audet/s/ Ramon de Oliveira
Paul L. AudetRamon de Oliveira
DirectorDirector
/s/ Denis Duverne/s/ Barbara Fallon-Walsh
Denis DuverneBarbara Fallon-Walsh
DirectorDirector
/s/ Daniel G. Kaye/s/ Shelley B. Leibowitz
Daniel G. KayeShelley B. Leibowitz
DirectorDirector
/s/ Anders Malmstrom/s/ Das Narayandas
Anders MalmstromDas Narayandas
DirectorDirector
/s/ Mark Pearson
Mark Pearson
Director

SCHEDULE II

AllianceBernstein L.P.
Valuation and Qualifying Account - Allowance for Doubtful Accounts
For the Three Years Ending December 31, 2018, 20172021, 2020 and 20162019

DescriptionBalance at
Beginning
of Period		Credited to
Costs and
Expenses		DeductionsBalance at
End
of Period
 (in thousands)
For the year ended December 31, 2021$311 $— $(17)(a)$328 
For the year ended December 31, 2020$309 $100 $98 (b)$311 
For the year ended December 31, 2019$395 $132 $218 (c)$309 
(a)Includes a net addition to the allowance balance of $28 and accounts written-off as uncollectible of $11.
(b)Includes accounts written-off as uncollectible of $98.
(c)Includes accounts written-off as uncollectible of $218.
Description 
Balance at Beginning
of Period
 
Credited to
Costs and
Expenses
 Deductions   
Balance at End
of Period
  (in thousands)
For the year ended December 31, 2016 $552
 $—
 $39
 (a) $513
           
For the year ended December 31, 2017 $513
 $150
 $252
 (b) $411
           
For the year ended December 31, 2018 $411
 $—
 16
 (c) $395

(a)2021 Annual ReportIncludes accounts written-off as uncollectible of $39.175
(b)
Includes accounts written-off as uncollectible of $252.
(c)Includes accounts written-off as uncollectible of $16.


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