Attached files
file | filename |
---|---|
EXCEL - IDEA: XBRL DOCUMENT - ALLIANCEBERNSTEIN L.P. | Financial_Report.xls |
EX-31.1 - EXHIBIT 31.1 - ALLIANCEBERNSTEIN L.P. | ex31_1.htm |
EX-32.1 - EXHIBIT 32.1 - ALLIANCEBERNSTEIN L.P. | ex32_1.htm |
EX-32.2 - EXHIBIT 32.2 - ALLIANCEBERNSTEIN L.P. | ex32_2.htm |
EX-31.2 - EXHIBIT 31.2 - ALLIANCEBERNSTEIN L.P. | ex31_2.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
(Mark One)
☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended March 31, 2015
OR
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File No. 000-29961
ALLIANCEBERNSTEIN L.P.
(Exact name of registrant as specified in its charter)
Delaware
|
13-4064930
|
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
1345 Avenue of the Americas, New York, NY 10105
(Address of principal executive offices)
(Zip Code)
(212) 969-1000
(Registrant’s telephone number, including area code)
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
|
☒
|
No
|
☐
|
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files).
Yes
|
☒
|
No
|
☐
|
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “accelerated filer,” “large accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer ☐
|
Accelerated filer ☐
|
|
Non-accelerated filer ☒ (Do not check if a smaller reporting company)
|
Smaller reporting company ☐
|
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes
|
☐
|
No
|
☒
|
The number of units of limited partnership interest outstanding as of March 31, 2015 was 272,607,593.
ALLIANCEBERNSTEIN L.P.
Page
|
||
Part I
|
||
FINANCIAL INFORMATION
|
||
Item 1.
|
||
1
|
||
2
|
||
3
|
||
4
|
||
5-19
|
||
Item 2.
|
20-36
|
|
Item 3.
|
37
|
|
Item 4.
|
37
|
|
Part II
|
||
OTHER INFORMATION
|
||
Item 1.
|
38
|
|
Item 1A.
|
38
|
|
Item 2.
|
38
|
|
Item 3.
|
38
|
|
Item 4.
|
38
|
|
Item 5.
|
39-40
|
|
Item 6.
|
41
|
|
42
|
Part I
FINANCIAL INFORMATION
ALLIANCEBERNSTEIN L.P.
AND SUBSIDIARIES
(in thousands, except unit amounts)
March 31,
2015
|
December 31,
2014
|
|||||||
(unaudited)
|
||||||||
ASSETS
|
||||||||
Cash and cash equivalents
|
$
|
671,288
|
$
|
555,503
|
||||
Cash and securities segregated, at fair value (cost: $520,133 and $476,275)
|
520,139
|
476,277
|
||||||
Receivables, net:
|
||||||||
Brokers and dealers
|
413,009
|
378,467
|
||||||
Brokerage clients
|
1,325,185
|
1,243,667
|
||||||
Fees
|
273,073
|
292,901
|
||||||
Investments:
|
||||||||
Long-term incentive compensation-related
|
80,546
|
98,779
|
||||||
Other
|
648,205
|
664,696
|
||||||
Furniture, equipment and leasehold improvements, net
|
158,041
|
160,956
|
||||||
Goodwill
|
3,044,807
|
3,044,807
|
||||||
Intangible assets, net
|
165,310
|
171,407
|
||||||
Deferred sales commissions, net
|
121,882
|
118,290
|
||||||
Other assets
|
190,000
|
172,703
|
||||||
Total assets
|
$
|
7,611,485
|
$
|
7,378,453
|
||||
LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST AND CAPITAL
|
||||||||
Liabilities:
|
||||||||
Payables:
|
||||||||
Brokers and dealers
|
$
|
330,332
|
$
|
302,484
|
||||
Securities sold not yet purchased
|
66,904
|
88,902
|
||||||
Brokerage clients
|
1,683,433
|
1,501,227
|
||||||
AB mutual funds
|
109,264
|
141,132
|
||||||
Accounts payable and accrued expenses
|
469,896
|
432,355
|
||||||
Accrued compensation and benefits
|
363,928
|
291,000
|
||||||
Debt
|
500,582
|
488,988
|
||||||
Total liabilities
|
3,524,339
|
3,246,088
|
||||||
Commitments and contingencies (See Note 12)
|
||||||||
Redeemable non-controlling interest
|
16,504
|
16,504
|
||||||
Capital:
|
||||||||
General Partner
|
40,932
|
41,381
|
||||||
Limited partners: 272,607,593 and 273,040,452 units issued and outstanding
|
4,132,523
|
4,176,637
|
||||||
Receivables from affiliates
|
(10,051
|
)
|
(16,359
|
)
|
||||
AB Holding Units held for long-term incentive compensation plans
|
(33,001
|
)
|
(36,351
|
)
|
||||
Accumulated other comprehensive loss
|
(91,568
|
)
|
(79,843
|
)
|
||||
Partners’ capital attributable to AB Unitholders
|
4,038,835
|
4,085,465
|
||||||
Non-controlling interests in consolidated entities
|
31,807
|
30,396
|
||||||
Total capital
|
4,070,642
|
4,115,861
|
||||||
Total liabilities, redeemable non-controlling interest and capital
|
$
|
7,611,485
|
$
|
7,378,453
|
AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(in thousands, except per unit amounts)
(unaudited)
Three Months Ended March 31,
|
||||||||
2015
|
2014
|
|||||||
Revenues:
|
||||||||
Investment advisory and services fees
|
$ |
493,988
|
$ |
454,884
|
||||
Bernstein research services
|
126,046
|
123,009
|
||||||
Distribution revenues
|
109,184
|
106,186
|
||||||
Dividend and interest income
|
5,094
|
4,101
|
||||||
Investment gains (losses)
|
3,888
|
559
|
||||||
Other revenues
|
24,990
|
26,680
|
||||||
Total revenues
|
763,190
|
715,419
|
||||||
Less: Interest expense
|
619
|
801
|
||||||
Net revenues
|
762,571
|
714,618
|
||||||
Expenses:
|
||||||||
Employee compensation and benefits
|
326,327
|
307,033
|
||||||
Promotion and servicing:
|
||||||||
Distribution-related payments
|
100,386
|
98,642
|
||||||
Amortization of deferred sales commissions
|
12,399
|
8,957
|
||||||
Other
|
55,537
|
53,645
|
||||||
General and administrative:
|
||||||||
General and administrative
|
107,333
|
107,487
|
||||||
Real estate (credits) charges
|
(383
|
)
|
1,942
|
|||||
Contingent payment arrangements
|
443
|
321
|
||||||
Interest on borrowings
|
854
|
781
|
||||||
Amortization of intangible assets
|
6,461
|
5,907
|
||||||
Total expenses
|
609,357
|
584,715
|
||||||
Operating income
|
153,214
|
129,903
|
||||||
Income taxes
|
10,470
|
11,365
|
||||||
Net income
|
142,744
|
118,538
|
||||||
Net income of consolidated entities attributable to non-controlling interests
|
1,275
|
1,813
|
||||||
Net income attributable to AB Unitholders
|
$ |
141,469
|
$ |
116,725
|
||||
Net income per AB Unit:
|
||||||||
Basic
|
$ |
0.51
|
$ |
0.43
|
||||
Diluted
|
$ |
0.51
|
$ |
0.43
|
AND SUBSIDIARIES
Condensed Consolidated Statements of Comprehensive Income
(in thousands)
(unaudited)
Three Months Ended March 31,
|
||||||||
2015
|
2014
|
|||||||
Net income
|
$ |
142,744
|
$ |
118,538
|
||||
Other comprehensive income (loss):
|
||||||||
Foreign currency translation adjustments
|
(12,275
|
)
|
2,149
|
|||||
Income tax expense
|
—
|
—
|
||||||
Foreign currency translation adjustments, net of tax
|
(12,275
|
)
|
2,149
|
|||||
Unrealized gains on investments:
|
||||||||
Unrealized gains arising during period
|
189
|
428
|
||||||
Less: reclassification adjustment for (losses) included in net income
|
—
|
(4
|
)
|
|||||
Change in unrealized gains on investments
|
189
|
432
|
||||||
Income tax benefit (expense)
|
119
|
(143
|
)
|
|||||
Unrealized gains on investments, net of tax
|
308
|
289
|
||||||
Changes in employee benefit related items:
|
||||||||
Amortization of prior service cost
|
—
|
(1,299
|
)
|
|||||
Recognized actuarial gain
|
237
|
486
|
||||||
Changes in employee benefit related items
|
237
|
(813
|
)
|
|||||
Income tax expense
|
(62
|
)
|
(20
|
)
|
||||
Employee benefit related items, net of tax
|
175
|
(833
|
)
|
|||||
Other comprehensive (loss) income
|
(11,792
|
)
|
1,605
|
|||||
Less: Comprehensive income in consolidated entities attributable to non-controlling interests
|
1,208
|
1,854
|
||||||
Comprehensive income attributable to AB Unitholders
|
$ |
129,744
|
$ |
118,289
|
See Accompanying Notes to Condensed Consolidated Financial Statements.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Three Months Ended March 31,
|
||||||||
2015
|
2014
|
|||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$
|
142,744
|
$
|
118,538
|
||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Amortization of deferred sales commissions
|
12,399
|
8,957
|
||||||
Non-cash long-term incentive compensation expense
|
3,387
|
6,101
|
||||||
Depreciation and other amortization
|
14,294
|
16,206
|
||||||
Unrealized (gains) on investments
|
(7,541
|
)
|
(2,499
|
)
|
||||
Other, net
|
578
|
(171
|
)
|
|||||
Changes in assets and liabilities:
|
||||||||
(Increase) decrease in segregated cash and securities
|
(43,862
|
)
|
80,737
|
|||||
(Increase) in receivables
|
(125,720
|
)
|
(125,446
|
)
|
||||
Decrease in investments
|
42,310
|
11,473
|
||||||
(Increase) in deferred sales commissions
|
(15,991
|
)
|
(9,815
|
)
|
||||
(Increase) in other assets
|
(18,756
|
)
|
(33,991
|
)
|
||||
Increase in payables
|
181,581
|
24,294
|
||||||
Increase in accounts payable and accrued expenses
|
988
|
2,652
|
||||||
Increase in accrued compensation and benefits
|
73,370
|
29,654
|
||||||
Net cash provided by operating activities
|
259,781
|
126,690
|
||||||
Cash flows from investing activities:
|
||||||||
Purchases of investments
|
(85
|
)
|
(190
|
)
|
||||
Proceeds from sales of investments
|
—
|
42
|
||||||
Purchases of furniture, equipment and leasehold improvements
|
(5,050
|
)
|
(4,345
|
)
|
||||
Proceeds from sales of furniture, equipment and leasehold improvements
|
33
|
23
|
||||||
Net cash used in investing activities
|
(5,102
|
)
|
(4,470
|
)
|
||||
Cash flows from financing activities:
|
||||||||
Issuance of commercial paper, net
|
11,295
|
104,497
|
||||||
Increase (decrease) in overdrafts payable
|
38,772
|
(41,517
|
)
|
|||||
Distributions to General Partner and Unitholders
|
(173,075
|
)
|
(178,994
|
)
|
||||
Contributions from non-controlling interests in consolidated entities
|
202
|
—
|
||||||
Capital contributions from General Partner
|
335
|
437
|
||||||
Capital contributions from AB Holding
|
6,019
|
5,798
|
||||||
Payments of contingent payment arrangements
|
(213
|
)
|
(517
|
)
|
||||
Additional investments by AB Holding with proceeds from exercise of compensatory options to buy AB Holding Units
|
3,901
|
4,656
|
||||||
Purchases of AB Holding Units to fund long-term incentive compensation plan awards, net
|
(16,929
|
)
|
(3,385
|
)
|
||||
Purchases of AB Units
|
(11
|
)
|
(229
|
)
|
||||
Other
|
(7
|
)
|
(9
|
)
|
||||
Net cash used in financing activities
|
(129,711
|
)
|
(109,263
|
)
|
||||
Effect of exchange rate changes on cash and cash equivalents
|
(9,183
|
)
|
2,271
|
|||||
Net increase in cash and cash equivalents
|
115,785
|
15,228
|
||||||
Cash and cash equivalents as of beginning of the period
|
555,503
|
509,891
|
||||||
Cash and cash equivalents as of end of the period
|
$
|
671,288
|
$
|
525,119
|
AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
March 31, 2015
(unaudited)
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. These statements should be read in conjunction with AB’s audited consolidated financial statements included in AB’s Form 10-K for the year ended December 31, 2014.
1. | Business Description, Organization and Basis of Presentation |
Business Description
We provide research, diversified investment management and related services globally to a broad range of clients. Our principal services include:
● | Institutional 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 and its 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 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 – servicing our private clients, including high-net-worth individuals and families, trusts and estates, charitable foundations, partnerships, private and family corporations, and other entities (including most institutions for which we manage accounts with less than $25 million in assets), by means of separately-managed accounts, hedge funds, mutual funds and other investment vehicles. |
● | Bernstein Research 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 on multi-asset strategies, wealth management 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 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 real estate investing); and |
● | Multi-asset solutions and services, including dynamic asset allocation, customized target-date funds and target-risk funds. |
Our services span various investment disciplines, including market capitalization (e.g., large-, mid- 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.
Organization
As of March 31, 2015, AXA, a société anonyme organized under the laws of France and the holding company for an international group of insurance and related financial services companies, through certain of its subsidiaries (“AXA and its subsidiaries”), owned approximately 1.4% of the issued and outstanding units representing assignments of beneficial ownership of limited partnership interests in AllianceBernstein Holding L.P. (“AB Holding Units”).
As of March 31, 2015, the ownership structure of AB, expressed as a percentage of general and limited partnership interests, was as follows:
AXA and its subsidiaries
|
62.2
|
%
|
||
AB Holding
|
36.4
|
|||
Unaffiliated holders
|
1.4
|
|||
100.0
|
%
|
AllianceBernstein Corporation (an indirect wholly-owned subsidiary of AXA, “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. Including both the general partnership and limited partnership interests in AB Holding and AB, AXA and its subsidiaries had an approximate 62.7% economic interest in AB as of March 31, 2015.
Basis of Presentation
The interim condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). In the opinion of management, all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the interim results, have been made. The preparation of the condensed 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 condensed consolidated financial statements and the reported amounts of revenues and expenses during the interim reporting periods. Actual results could differ from those estimates. The December 31, 2014 condensed consolidated statement of financial condition was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America.
The condensed consolidated financial statements include AB and its majority-owned and/or controlled subsidiaries. All significant inter-company transactions and balances among the consolidated entities have been eliminated.
Reclassification
The first quarter 2014 amounts for Institutional and Private Wealth Management finders’ fees previously presented as other promotion and servicing are now presented as distribution-related payments in the condensed consolidated statements of income to conform to the current year’s presentation.
2. | Accounting Pronouncements |
Accounting Pronouncements Not Yet Adopted
In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers. The amendment is effective retrospectively for fiscal years (and interim reporting periods within those years) beginning after December 15, 2017. Management is currently evaluating the impact that the adoption of this standard will have on our consolidated financial statements.
In June 2014, the FASB issued ASU 2014-12, Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved After the Requisite Service Period. The amendment is effective prospectively or retrospectively for fiscal years (and interim periods within those years) beginning after December 15, 2015 and is not expected to have a material impact on our financial condition or results of operations.
In February 2015, the FASB issued ASU 2015-02, Consolidation – Amendments to the Consolidation Analysis. The amendment is effective retrospectively for fiscal years (and interim reporting periods within those years) beginning after December 15, 2015. Management is currently evaluating the impact that the adoption of this standard will have on our consolidated financial statements.
In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs, which requires debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying value of the associated debt liability, consistent with the presentation of a debt discount. The amendment is effective retrospectively for fiscal years (and interim periods within those years) beginning after December 15, 2015 and is not expected to have a material impact on our financial condition or results of operations.
3.
|
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.
Awards granted in December 2014 and 2013 allowed 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 a 2014 or 2013 award of $100,000 or less could have allocated up to 100% of his or her award to deferred cash. For awards granted in 2014 and 2013, participants allocated their awards prior to the date on which the Compensation Committee granted awards, December 12, 2014 and 2013, respectively. These awards were valued using the closing price of an AB Holding Unit on these days. For awards granted in 2014 and 2013:
Ÿ | We engaged in open-market purchases of AB Holding Units, or purchased newly-issued AB Holding Units from AB Holding, that were awarded to participants and held them in a consolidated rabbi trust. |
Ÿ | Quarterly distributions on vested and unvested AB Holding Units are paid currently to participants, regardless of whether or not a long-term deferral election has been made. |
Ÿ
|
Interest on deferred cash is accrued monthly based on our monthly weighted average cost of funds.
|
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. Due to there being no service requirement, we fully expense these awards on 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 distributed to employees ratably over four years, unless a long-term deferral election has been made.
Grants of restricted AB Holding Units and options to buy AB Holding Units typically are awarded during the second quarter to members of the Board of Directors (“Eligible Directors”) of the General Partner who are not employed by our company or by any of our affiliates. Restricted AB Holding Units are distributed on the third anniversary of the grant date and the options become exercisable ratably over three years. These restricted AB Holding Units and options are not forfeitable (except if the Eligible Director is terminated for “Cause”, as that term is defined in the applicable award agreement). Due to there being no service requirement, we fully expense these awards on grant date.
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, all of which are then held in a consolidated rabbi trust until they are distributed to employees or retired. 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 the first quarter of 2015, we purchased 0.7 million AB Holding Units for $17.0 million (on a trade date basis). These amounts reflect open-market purchases of 0.6 million AB Holding Units for $15.1 million, with the remainder relating to purchases of AB Holding Units from employees to allow them to fulfill statutory tax withholding requirements at the time of distribution of long-term incentive compensation awards. During the first quarter of 2014, we purchased 0.2 million AB Holding Units for $3.7 million (on a trade date basis) from employees to allow them to fulfill statutory tax withholding requirements at the time of distribution of long-term incentive compensation awards.
Each quarter, we implement plans to repurchase AB Holding Units pursuant to Rule 10b5-1 under the Securities Exchange Act of 1934, as amended (“Exchange Act”). A Rule 10b5-1 plan 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 of 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. The plan adopted during the first quarter of 2015 expired at the close of business on April 29, 2015. We may adopt additional Rule 10b5-1 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 the first quarter of 2015 and 2014, we granted to employees and Eligible Directors 0.1 million and 0.2 million restricted AB Holding Unit awards, respectively. We used AB Holding Units repurchased during the period and newly-issued AB Holding Units to fund restricted AB Holding Unit awards.
During the first quarter of 2015, AB Holding issued 0.2 million AB Holding Units upon exercise of options to buy AB Holding Units. AB Holding used the proceeds of $3.9 million received from employees as payment in cash for the exercise price to purchase the equivalent number of newly-issued AB Units.
4.
|
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 that one or more non-GAAP adjustments that are made for adjusted net income should not be made with respect to the Available Cash Flow calculation.
On April 30, 2015, the General Partner declared a distribution of $0.51 per AB Unit, representing a distribution of Available Cash Flow for the three months ended March 31, 2015. 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 May 21, 2015 to holders of record on May 11, 2015.
5.
|
Real Estate Charges
|
During 2010, we performed a comprehensive review of our real estate requirements in New York in connection with our workforce reductions commencing in 2008. As a result, during 2010 we decided to sub-lease over 380,000 square feet in New York (all of this space has been sublet) and consolidate our New York-based employees into two office locations from three. During the third quarter of 2012, in an effort to further reduce our global real estate footprint, we completed a comprehensive review of our worldwide office locations and began implementing a global space consolidation plan. As a result, our intention is to sub-lease approximately 510,000 square feet of office space (approximately 90% of this space has been sublet), more than 70% of which is New York office space (in addition to the 380,000 square foot space reduction in 2010), with the remainder consisting of office space in England, Australia and various U.S. locations.
During the first quarter of 2015, we recorded pre-tax real estate credits of $0.4 million, resulting from a change in estimates related to previously recorded real estate charges.
The activity in the liability account relating to our 2010 and 2012 office space consolidation initiatives for the following periods is as follows:
Three Months
Ended
March 31, 2015
|
Twelve Months
Ended
December 31, 2014
|
|||||||
(in thousands)
|
||||||||
Balance as of beginning of period
|
$
|
148,429
|
$
|
199,527
|
||||
Expense (credit) incurred
|
139
|
(4,755
|
)
|
|||||
Deferred rent
|
—
|
—
|
||||||
Payments made
|
(11,562
|
)
|
(50,893
|
)
|
||||
Interest accretion
|
1,082
|
4,550
|
||||||
Balance as of end of period
|
$
|
138,088
|
$
|
148,429
|
6.
|
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 units outstanding for each period. 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 units outstanding for each period.
Three Months Ended March 31,
|
||||||||
2015
|
2014
|
|||||||
(in thousands, except per unit amounts)
|
||||||||
Net income attributable to AB Unitholders
|
$
|
141,469
|
$
|
116,725
|
||||
Weighted average units outstanding – basic
|
272,831
|
268,459
|
||||||
Dilutive effect of compensatory options to buy AB Holding Units
|
1,098
|
1,077
|
||||||
Weighted average units outstanding – diluted
|
273,929
|
269,536
|
||||||
Basic net income per AB Unit
|
$
|
0.51
|
$
|
0.43
|
||||
Diluted net income per AB Unit
|
$
|
0.51
|
$
|
0.43
|
As of March 31, 2015 and 2014, we excluded 2,774,117 and 2,828,033 options, respectively, from the diluted net income per unit computation due to their anti-dilutive effect.
7.
|
Cash and Securities Segregated Under Federal Regulations and Other Requirements
|
As of March 31, 2015 and December 31, 2014, $0.5 billion and $0.4 billion, respectively, of U.S. Treasury Bills were segregated in a special reserve bank custody account for the exclusive benefit of brokerage customers of Sanford C. Bernstein & Co., LLC (one of our subsidiaries, “SCB LLC”) under Rule 15c3-3 of the Exchange Act.
AllianceBernstein Investments, Inc. (one of our subsidiaries, “AllianceBernstein Investments”), the distributor of company-sponsored U.S. mutual funds, maintains several special bank accounts for the exclusive benefit of customers. As of March 31, 2015 and December 31, 2014, $50.2 million and $61.3 million, respectively, of cash was segregated in these bank accounts.
8.
|
Investments
|
Investments consist of:
|
||||||||
March 31, 2015
|
December 31, 2014
|
|||||||
(in thousands)
|
||||||||
Available-for-sale (primarily seed capital)
|
$
|
6,442
|
$
|
6,172
|
||||
Trading:
|
||||||||
Long-term incentive compensation-related
|
60,594
|
74,095
|
||||||
U.S. Treasury Bills
|
28,995
|
28,982
|
||||||
Seed capital
|
425,805
|
400,746
|
||||||
Equities
|
59,508
|
79,720
|
||||||
Exchange-traded options
|
6,767
|
22,290
|
||||||
Investments in limited partnership hedge funds:
|
||||||||
Long-term incentive compensation-related
|
19,952
|
24,684
|
||||||
Seed capital
|
26,366
|
33,951
|
||||||
Consolidated private equity fund (10% seed capital)
|
34,130
|
32,604
|
||||||
Private equity (seed capital)
|
48,724
|
48,734
|
||||||
Other
|
11,468
|
11,497
|
||||||
Total investments
|
$
|
728,751
|
$
|
763,475
|
Total investments related to long-term incentive compensation obligations of $80.5 million and $98.8 million as of March 31, 2015 and December 31, 2014, respectively, consist of company-sponsored mutual funds and hedge funds. For long-term incentive compensation awards granted before 2009, we typically made investments in our services 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 the 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.
U.S. Treasury Bills are held by SCB LLC in its investment account, the majority of which are pledged as collateral with clearing organizations. These clearing organizations have the ability by contract or custom to sell or re-pledge this collateral.
We provide seed capital to our investment teams to develop new products and services for our clients. The 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. Seed capital also includes investments in private equity funds, such as our consolidated venture capital fund, which holds technology, media, telecommunications, healthcare and clean-tech investments, and a third-party venture capital fund that invests in communications, consumer, digital media, healthcare and information technology markets.
Trading securities also include long positions in corporate equities, an exchange-traded fund and long exchange-traded options traded through our options desk.
The portion of trading gains (losses) for the three months ended March 31, 2015 and 2014 related to trading securities held as of March 31, 2015 and 2014 is as follows (in thousands):
Three Months Ended March 31,
|
||||||||
2015
|
2014
|
|||||||
(in thousands)
|
||||||||
Net gains recognized during the period
|
$
|
6,784
|
$
|
14,812
|
||||
Less: net gains recognized during the period on trading securities sold during the period
|
6,047
|
4,404
|
||||||
Unrealized gains recognized during the period on trading securities held
|
$
|
737
|
$
|
10,408
|
9. | Derivative Instruments |
We enter into various futures, forwards and swaps to economically hedge certain seed money investments. Also, we have currency forwards that economically hedge certain cash accounts and exchange-traded futures to economically hedge a foreign investment. 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 Accounting Standards Codification (“ASC”) 815-10, Derivatives and Hedging.
The notional value and fair value as of March 31, 2015 and December 31, 2014 for derivative instruments (excluding our options desk trading activities) not designated as hedging instruments were as follows:
Fair Value
|
||||||||||||
Notional Value
|
Asset Derivatives
|
Liability Derivatives
|
||||||||||
(in thousands)
|
||||||||||||
March 31, 2015:
|
||||||||||||
Exchange-traded futures
|
$ |
143,141
|
$ |
360
|
$ |
3,011
|
||||||
Currency forwards
|
204,894
|
1,948
|
963
|
|||||||||
Interest rate swaps
|
59,126
|
1,909
|
3,045
|
|||||||||
Credit default swaps
|
165,028
|
3,881
|
293
|
|||||||||
Option swaps
|
11
|
11
|
—
|
|||||||||
Total return swaps
|
102,096
|
442
|
2,461
|
|||||||||
Total derivatives
|
$ |
674,296
|
$ |
8,551
|
$ |
9,773
|
December 31, 2014:
|
||||||||||||
Exchange-traded futures
|
$ |
149,863
|
$ |
571
|
$ |
2,438
|
||||||
Currency forwards
|
149,282
|
1,782
|
333
|
|||||||||
Interest rate swaps
|
50,591
|
1,507
|
2,679
|
|||||||||
Credit default swaps
|
32,745
|
1,432
|
110
|
|||||||||
Option swaps
|
11
|
107
|
88
|
|||||||||
Total return swaps
|
125,913
|
1,388
|
3,744
|
|||||||||
Total derivatives
|
$ |
508,405
|
$ |
6,787
|
$ |
9,392
|
As of March 31, 2015 and December 31, 2014, the derivative assets and liabilities are included in both receivables and payables to brokers and dealers on our condensed consolidated statements of financial condition.
The gains and losses for derivative instruments (excluding our options desk trading activities) for the three months ended March 31, 2015 and 2014 recognized in investment gains (losses) in the condensed consolidated statements of income were as follows:
Three Months Ended March 31,
|
||||||||
2015
|
2014
|
|||||||
(in thousands)
|
||||||||
Exchange-traded futures
|
$ |
(4,987
|
)
|
$ |
(498
|
)
|
||
Currency forwards
|
3,452
|
(1,666
|
)
|
|||||
Interest rate swaps
|
(745
|
)
|
(793
|
)
|
||||
Credit default swaps
|
(57
|
)
|
(5
|
)
|
||||
Options swaps
|
(17
|
)
|
(35
|
)
|
||||
Total return swaps
|
(3,701
|
)
|
(2,524
|
)
|
||||
Net (losses) on derivative instruments
|
$ |
(6,055
|
)
|
$ |
(5,521
|
)
|
We may be exposed to credit-related losses in the event of nonperformance by counterparties to derivative financial instruments. We take steps to minimize our counterparty exposure through a credit review and approval process. In addition, we 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 March 31, 2015 and December 31, 2014, we held $1.1 million and $1.0 million, respectively, of cash collateral payable to trade counterparties. This obligation to return cash is reported in payables to brokers and dealers in our condensed consolidated statements of financial condition.
Although notional amount is the most commonly used measure of volume in the derivative 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 related 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 March 31, 2015 and December 31, 2014, we delivered $11.9 million and $13.2 million, respectively, of cash collateral into brokerage accounts. We report this cash collateral in cash and cash equivalents in our condensed consolidated statements of financial condition.
As of March 31, 2015 and December 31, 2014, we held $6.8 million and $22.3 million, respectively, of long exchange-traded equity options, which are classified as trading investments and included in other investments on our condensed consolidated statements of financial condition. In addition, as of March 31, 2015 and December 31, 2014, we held $5.6 million and $7.1 million, respectively, of short exchange-traded equity options which are included in securities sold not yet purchased on our condensed 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 risks associated with this activity by taking offsetting positions in equities. During the first quarter of 2015 and 2014, we recognized $32.8 million and $60.8 million, respectively, of losses on equity options activity. These losses are recognized in investment gains (losses) in the condensed consolidated statements of income.
10. | Offsetting Assets and Liabilities |
Offsetting of assets as of March 31, 2015 and December 31, 2014 was as follows:
Gross Amounts of Recognized Assets
|
Gross Amounts Offset in the Statement of Financial Position
|
Net Amounts of Assets Presented in the Statement of Financial Position
|
Financial
Instruments
|
Cash
Collateral
Received
|
Net
Amount
|
|||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||
March 31, 2015:
|
||||||||||||||||||||||||
Securities borrowed
|
$
|
157,916
|
$
|
—
|
$
|
157,916
|
$
|
—
|
$
|
(157,916
|
)
|
$
|
—
|
|||||||||||
Derivatives
|
$
|
8,551
|
$
|
—
|
$
|
8,551
|
$
|
—
|
$
|
(1,078
|
)
|
$
|
7,473 |
|
||||||||||
Long exchange- traded options
|
$
|
6,767
|
$
|
—
|
$
|
6,767
|
$
|
—
|
$
|
—
|
$
|
6,767
|
||||||||||||
December 31, 2014:
|
||||||||||||||||||||||||
Securities borrowed
|
$
|
158,147
|
$
|
—
|
$
|
158,147
|
$
|
—
|
$
|
(158,147
|
)
|
$
|
—
|
|||||||||||
Derivatives
|
$
|
6,787
|
$
|
—
|
$
|
6,787
|
$
|
—
|
$
|
(990
|
)
|
$
|
5,797
|
|
||||||||||
Long exchange- traded options
|
$
|
22,290
|
$
|
—
|
$
|
22,290
|
$
|
—
|
$
|
—
|
$
|
22,290
|
Offsetting of liabilities as of March 31, 2015 and December 31, 2014 was as follows:
Gross Amounts of Recognized Liabilities
|
Gross Amounts Offset in the Statement of Financial Position
|
Net Amounts of Liabilities Presented in the Statement of Financial Position
|
Financial
Instruments
|
Cash
Collateral
Pledged
|
Net Amount
|
|||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||
March 31, 2015:
|
||||||||||||||||||||||||
Securities loaned
|
$
|
2,184
|
$
|
—
|
$
|
2,184
|
$
|
—
|
$
|
(2,184
|
)
|
$
|
—
|
|||||||||||
Derivatives
|
$
|
9,773
|
$
|
—
|
$
|
9,773
|
$
|
—
|
$
|
(9,773
|
)
|
$
|
—
|
|||||||||||
Short exchange-traded options
|
$
|
5,602
|
$
|
—
|
$
|
5,602
|
$
|
—
|
$
|
—
|
$
|
5,602
|
||||||||||||
December 31, 2014:
|
||||||||||||||||||||||||
Securities loaned
|
$
|
33,645
|
$
|
—
|
$
|
33,645
|
$
|
—
|
$
|
(33,645
|
)
|
$
|
—
|
|||||||||||
Derivatives
|
$
|
9,392
|
$
|
—
|
$
|
9,392
|
$
|
—
|
$
|
(9,392
|
)
|
$
|
—
|
|||||||||||
Short exchange-traded options
|
$
|
7,118
|
$
|
—
|
$
|
7,118
|
$
|
—
|
$
|
—
|
$
|
7,118
|
Cash collateral pledged and received on derivative instruments are not considered material and are not disclosed by counterparty.
11.
|
Fair Value
|
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.
|
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Valuation of our financial instruments by pricing observability levels as of March 31, 2015 and December 31, 2014 was as follows (in thousands):
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
March 31, 2015:
|
||||||||||||||||
Money markets
|
$
|
172,415
|
$
|
—
|
$
|
—
|
$
|
172,415
|
||||||||
U.S. Treasury Bills
|
—
|
499,059
|
—
|
499,059
|
||||||||||||
Available-for-sale
|
||||||||||||||||
Equity securities
|
6,136
|
—
|
—
|
6,136
|
||||||||||||
Fixed income securities
|
306
|
—
|
—
|
306
|
||||||||||||
Trading
|
||||||||||||||||
Equity securities
|
334,792
|
24,680
|
122
|
359,594
|
||||||||||||
Fixed income securities
|
183,227
|
3,086
|
—
|
186,313
|
||||||||||||
Long exchange-traded options
|
6,767
|
—
|
—
|
6,767
|
||||||||||||
Derivatives
|
360
|
8,191
|
—
|
8,551
|
||||||||||||
Private equity
|
13,885
|
—
|
58,719
|
72,604
|
||||||||||||
Total assets measured at fair value
|
$
|
717,888
|
$
|
535,016
|
$
|
58,841
|
$
|
1,311,745
|
||||||||
Securities sold not yet purchased
|
||||||||||||||||
Short equities – corporate
|
$
|
61,302
|
$
|
—
|
$
|
—
|
$
|
61,302
|
||||||||
Short exchange-traded options
|
5,602
|
—
|
—
|
5,602
|
||||||||||||
Derivatives
|
3,011
|
6,762
|
—
|
9,773
|
||||||||||||
Contingent payment arrangements
|
—
|
—
|
42,223
|
42,223
|
||||||||||||
Total liabilities measured at fair value
|
$
|
69,915
|
$
|
6,762
|
$
|
42,223
|
$
|
118,900
|
December 31, 2014:
|
||||||||||||||||
Money markets
|
$
|
89,566
|
$
|
—
|
$
|
—
|
$
|
89,566
|
||||||||
U.S. Treasury Bills
|
—
|
444,152
|
—
|
444,152
|
||||||||||||
Available-for-sale
|
||||||||||||||||
Equity securities
|
5,951
|
—
|
—
|
5,951
|
||||||||||||
Fixed income securities
|
221
|
—
|
—
|
221
|
||||||||||||
Trading
|
||||||||||||||||
Equity securities
|
387,495
|
7
|
—
|
387,502
|
||||||||||||
Fixed income securities
|
164,317
|
2,742
|
—
|
167,059
|
||||||||||||
Long exchange-traded options
|
22,290
|
—
|
—
|
22,290
|
||||||||||||
Derivatives
|
571
|
6,216
|
—
|
6,787
|
||||||||||||
Private equity
|
12,162
|
—
|
58,926
|
71,088
|
||||||||||||
Total assets measured at fair value
|
$
|
682,573
|
$
|
453,117
|
$
|
58,926
|
$
|
1,194,616
|
||||||||
Securities sold not yet purchased
|
||||||||||||||||
Short equities – corporate
|
$
|
81,784
|
$
|
—
|
$
|
—
|
$
|
81,784
|
||||||||
Short exchange-traded options
|
7,118
|
—
|
—
|
7,118
|
||||||||||||
Derivatives
|
2,438
|
6,954
|
—
|
9,392
|
||||||||||||
Contingent payment arrangements
|
—
|
—
|
42,436
|
42,436
|
||||||||||||
Total liabilities measured at fair value
|
$
|
91,340
|
$
|
6,954
|
$
|
42,436
|
$
|
140,730
|
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 and fixed income securities: Our equity and fixed income securities consist principally of company-sponsored mutual funds with net asset values and various separately-managed portfolios consisting primarily of equity and fixed income securities 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 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 owned by our consolidated venture capital fund or by us directly (regarding an investment in a private equity fund focused exclusively on the energy sector) 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. We also invest in a third-party venture capital fund in which fair value is based on our capital account balance provided by the partnership and is included in Level 3 of the valuation hierarchy. If private equity investments owned by our consolidated venture capital fund become publicly-traded, they are included in Level 1 of the valuation hierarchy. Also, if they contain trading restrictions, publicly-traded equity investments are included in Level 2 of the valuation hierarchy. During the first quarter of 2015, $26,000 was transferred from a Level 3 classification to a Level 1 classification. |
• | 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 acquisitions in 2010, 2013 and 2014. At each reporting date, we estimate the fair values of the contingent consideration expected to be paid based upon probability-weighted AUM and revenue projections, using unobservable market data inputs, which are included in Level 3 of the valuation hierarchy. |
The change in carrying value associated with private equity and trading equity securities Level 3 financial instruments carried at fair value is as follows:
Three Months Ended March 31,
|
||||||||
2015
|
2014
|
|||||||
(in thousands)
|
||||||||
Balance as of beginning of period
|
$
|
58,926
|
$
|
52,081
|
||||
Transfer out
|
(26
|
)
|
—
|
|||||
Purchases
|
122
|
501
|
||||||
Sales
|
—
|
(1,121
|
)
|
|||||
Realized (losses) gains, net
|
(5,194
|
)
|
1,121
|
|||||
Unrealized gains (losses), net
|
5,013
|
(1,838
|
)
|
|||||
Balance as of end of period
|
$
|
58,841
|
$
|
50,744
|
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 condensed consolidated statements of income. Approximately one-third of the Level 3 investments are private equity investments owned by our consolidated venture capital fund, of which we own 10% and non-controlling interests own 90%.
Quantitative information about private equity Level 3 fair value measurements as of March 31, 2015 and December 31, 2014 is as follows:
Fair Value as
of March 31,
2015
|
Valuation Technique
|
Unobservable Input
|
Range
|
||||||||
(in thousands)
|
|||||||||||
Private Equity:
|
|||||||||||
Technology, Media and Telecommunications
|
$
|
20,044
|
Market comparable companies
|
Revenue multiple
|
2.1 – 4.6
|
||||||
Marketability discount
|
30
|
%
|
In addition, as of March 31, 2015, there are two investments (with a combined fair value of $0.1 million) in the Healthcare and Clean-tech category that are classified as Level 3. The first investment is valued based on liquidation value and the second investment is a warrant valued using the Black-Scholes option valuation model. Also, we have an investment in a private equity fund focused exclusively on the energy sector (fair value of $7.5 million) that is classified as Level 3. This investment’s valuation is based on a market approach, considering recent transactions of the fund and the industry.
Fair Value as
of December 31,
2014
|
Valuation Technique
|
Unobservable Input
|
Range
|
||||||||
(in thousands)
|
|||||||||||
Private Equity:
|
|||||||||||
Technology, Media and Telecommunications
|
$
|
20,112
|
Market comparable companies
|
Revenue multiple
|
2.0 – 3.5
|
||||||
Discount rate
|
18
|
%
|
|||||||||
Discount years
|
2.0 years
|
In addition, as of December 31, 2014, there are two investments (with a combined fair value of $0.2 million) in the Healthcare and Clean-tech category that are classified as Level 3. The first investment is valued based on liquidation value and the second investment is a warrant valued using the Black-Scholes option valuation model. Also, we have an investment in a private equity fund focused exclusively on the energy sector (fair value of $7.5 million) that is classified as Level 3. This investment’s valuation is based on a market approach, considering recent transactions of the fund and the industry.
The significant unobservable inputs used in the fair value measurement of the reporting entities’ venture capital securities in the Technology, Media and Telecommunications areas are enterprise value to revenue multiples and a discount to account for liquidity and various risk factors. Significant increases (decreases) in the enterprise value to revenue multiple inputs in isolation would result in a significantly higher (lower) fair value measurement. Significant increases (decreases) in the discount would result in a significantly lower (higher) fair value measurement.
One of our private equity investments is a venture capital fund (fair value of $31.0 million and unfunded commitment of $2.9 million as of March 31, 2015) that invests in communications, consumer, digital media, healthcare and information technology markets. In addition, one of the investments included in our consolidated private equity fund (fair value of $0.1 million and no unfunded commitment as of March 31, 2015) is a venture capital fund investing in clean energy, resource and energy efficiency and other sustainable industries. The fair value of each of these investments has been estimated using the capital account balances provided by the partnerships. The interests in these partnerships cannot be redeemed.
The change in carrying value associated with contingent payment arrangements Level 3 financial instruments carried at fair value is as follows:
Three Months Ended March 31,
|
||||||||
2015
|
2014
|
|||||||
(in thousands)
|
||||||||
Balance as of beginning of period
|
$
|
42,436
|
$
|
38,205
|
||||
Accretion
|
443
|
321
|
||||||
Payments
|
(656
|
)
|
(838
|
)
|
||||
Balance as of end of period
|
$
|
42,223
|
$
|
37,688
|
Quantitative information about contingent payment arrangements Level 3 fair value measurements as of March 31, 2015 and December 31, 2014 is as follows:
Our three acquisition-related contingent consideration liabilities (with a combined fair value of $42.2 million as of March 31, 2015 and $42.4 million as of December 31, 2014) are currently valued using projected AUM growth rates with a weighted average of 46%, revenue growth rates with a weighted average of 71%, and discount rates ranging between 3% (when using a cost of debt assumption) and 18% (when using a cost of capital assumption).
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 three months ended March 31, 2015 or during the year ended December 31, 2014.
12. | Commitments and Contingencies |
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.
During the first quarter of 2012, we received a legal letter of claim (“Letter of Claim”) sent on behalf of Philips Pension Trustees Limited and Philips Electronics U.K. Limited (“Philips”), a former pension fund client, alleging that AllianceBernstein Limited (one of our subsidiaries organized in the U.K.) was negligent and failed to meet certain applicable standards of care with respect to the initial investment in, and management of, a £500 million portfolio of U.S. mortgage-backed securities. The alleged damages range between $177 million and $234 million, plus compound interest on an alleged $125 million of realized losses in the portfolio. On January 2, 2014, Philips filed a claim form (“Claim”) in the High Court of Justice in London, England, which formally commenced litigation with respect to the allegations in the Letter of Claim.
We believe that any losses to Philips resulted from adverse developments in the U.S. housing and mortgage market that precipitated the financial crisis in 2008 and not from any negligence or failure on our part. We believe that we have strong defenses to these claims, which are set forth in our October 12, 2012 response to the Letter of Claim and our June 27, 2014 Statement of Defence in response to the Claim, and will defend this matter vigorously. Currently, we are unable to estimate a reasonably possible range of loss because the matter remains in its early stages.
In addition to the Claim discussed immediately above, we are involved in various other matters, including regulatory inquiries, administrative proceedings and litigation, some of which allege significant damages.
In management’s opinion, an adequate accrual has been made as of March 31, 2015 to provide for any probable losses regarding any litigation matters for which we can reasonably estimate an amount of loss. It is reasonably possible that we could incur additional losses pertaining to these matters, but currently we cannot estimate any such additional losses.
Management, after consultation with legal counsel, currently believes that the outcome of any 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 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.
13. | Units Outstanding |
Changes in limited partnership units outstanding during the three-month period ended March 31, 2015 were as follows:
Outstanding as of December 31, 2014
|
273,040,452
|
|||
Options exercised
|
228,816
|
|||
Units issued
|
27,755
|
|||
Units retired
|
(689,430
|
)
|
||
Outstanding as of March 31, 2015
|
272,607,593
|
During the first quarter of 2015, we purchased 400 AB Units in private transactions and retired them.
14. | Debt |
As of March 31, 2015 and December 31, 2014, AB had $500.6 million and $489.0 million, respectively, in commercial paper outstanding with weighted average interest rates of approximately 0.3% for both periods. 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 the first three months of 2015 and the full year 2014 were $423.9 million and $335.0 million, respectively, with weighted average interest rates of approximately 0.3% and 0.2%, respectively.
15. | Changes in Capital |
Changes in capital during the three-month period ended March 31, 2015 were as follows:
Partners’ Capital Attributable to AB Unitholders
|
Non-Controlling Interests In Consolidated Entities
|
Total Capital
|
||||||||||
(in thousands)
|
||||||||||||
Balance as of December 31, 2014
|
$
|
4,085,465
|
$
|
30,396
|
$
|
4,115,861
|
||||||
Comprehensive income:
|
||||||||||||
Net income
|
141,469
|
1,275
|
142,744
|
|||||||||
Other comprehensive income, net of tax:
|
||||||||||||
Unrealized gains on investments
|
308
|
—
|
308
|
|||||||||
Foreign currency translation adjustments
|
(12,208
|
)
|
(67
|
)
|
(12,275
|
)
|
||||||
Changes in employee benefit related items
|
175
|
—
|
175
|
|||||||||
Comprehensive income
|
129,744
|
1,208
|
130,952
|
|||||||||
Distributions to General Partner and unitholders
|
(173,075
|
)
|
—
|
(173,075
|
)
|
|||||||
Capital contributions from affiliates
|
6,354
|
—
|
6,354
|
|||||||||
Compensation-related transactions
|
(9,642
|
)
|
—
|
(9,642
|
)
|
|||||||
Other
|
(11
|
)
|
203
|
192
|
||||||||
Balance as of March 31, 2015
|
$
|
4,038,835
|
$
|
31,807
|
$
|
4,070,642
|
Changes in capital during the three-month period ended March 31, 2014 were as follows:
Partners’ Capital Attributable to AB Unitholders
|
Non-Controlling Interests In Consolidated Entities
|
Total Capital
|
||||||||||
(in thousands)
|
||||||||||||
Balance as of December 31, 2013
|
$
|
4,027,486
|
$
|
42,240
|
$
|
4,069,726
|
||||||
Comprehensive income:
|
||||||||||||
Net income
|
116,725
|
1,813
|
118,538
|
|||||||||
Other comprehensive income, net of tax:
|
||||||||||||
Unrealized gains on investments
|
289
|
—
|
289
|
|||||||||
Foreign currency translation adjustments
|
2,108
|
41
|
2,149
|
|||||||||
Changes in employee benefit related items
|
(833
|
)
|
—
|
(833
|
)
|
|||||||
Comprehensive income
|
118,289
|
1,854
|
120,143
|
|||||||||
Distributions to General Partner and unitholders
|
(178,994
|
)
|
—
|
(178,994
|
)
|
|||||||
Capital contributions from affiliates
|
6,209
|
—
|
6,209
|
|||||||||
Purchases of AB Units
|
(229
|
)
|
—
|
(229
|
)
|
|||||||
Compensation-related transactions
|
7,398
|
—
|
7,398
|
|||||||||
Balance as of March 31, 2014
|
$
|
3,980,159
|
$
|
44,094
|
$
|
4,024,253
|
Deferred taxes are not recognized on foreign currency translation adjustments for foreign subsidiaries whose earnings are considered permanently invested outside the United States.
16. | Acquisitions |
Acquisitions are accounted for under ASC 805, Business Combinations.
On June 20, 2014, we acquired an approximate 82% 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. 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 definite-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 interest of $16.5 million relating to the fair value of the portion of CPH we do not own.
Executive Overview
Our total assets under management (“AUM”) as of March 31, 2015 were $485.9 billion, up $11.9 billion, or 2.5%, compared to December 31, 2014, and up $31.8 billion, or 7.0%, compared to March 31, 2014. During the first quarter of 2015, AUM increased primarily as a result of net inflows of $6.0 billion (primarily Institutions) and market appreciation of $5.9 billion. During the twelve months ended March 31, 2015, AUM increased primarily as a result of net inflows of $15.5 billion (primarily Institutions) and market appreciation of $15.0 billion.
Institutional AUM increased $6.7 billion, or 2.8%, to $243.7 billion during the first quarter of 2015, primarily due to net inflows of $5.4 billion and market appreciation of $1.6 billion. Gross sales increased 54% sequentially from $4.7 billion during the fourth quarter of 2014 to $7.3 billion during the first quarter of 2015. However, redemptions and terminations increased 6% sequentially from $2.2 billion to $2.4 billion.
Retail AUM increased $2.8 billion, or 1.7%, to $164.3 billion during the first quarter of 2015, primarily due to market appreciation of $2.4 billion and net inflows of $0.5 billion. Gross sales increased 17% sequentially from $9.2 billion during the fourth quarter of 2014 to $10.8 billion during the first quarter of 2015. However, redemptions and terminations increased 8% sequentially from $8.4 billion to $9.0 billion.
Private Wealth Management AUM increased $2.4 billion, or 3.2%, to $77.9 billion during the first quarter of 2015, primarily due to market appreciation of $1.9 billion and net inflows of $0.1 billion. Gross sales increased 11% sequentially from $1.3 billion during the fourth quarter of 2014 to $1.4 billion during the first quarter of 2015. In addition, redemptions and terminations decreased 30% sequentially from $1.0 billion to $0.7 billion.
Bernstein Research Services revenue for the first quarter of 2015 was $126.0 million, up $3.0 million, or 2.5%, compared to the first quarter of 2014, as a result of growth in the U.S. and Asia.
Net revenues for the first quarter of 2015 increased $48.0 million, or 6.7%, to $762.6 million from $714.6 million in the first quarter of 2014. The most significant contributors to the increase were higher base fees of $37.8 million, higher investment gains of $3.3 million, higher Bernstein Research Services revenue of $3.0 million and higher distribution revenues of $3.0 million. Operating expenses for the first quarter increased $24.7 million, or 4.2%, to $609.4 million from $584.7 million in the first quarter of 2014. The increase was primarily due to higher employee compensation and benefits of $19.3 million and higher promotion and servicing of $7.1 million, offset by lower real estate charges of $2.3 million. Our operating income increased $23.3 million, or 17.9%, to $153.2 million from $129.9 million and our operating margin increased to 19.9% (23.9% on an adjusted basis) in the first quarter of 2015 from 17.9% (22.0% on an adjusted basis) in the first quarter of 2014.
Assets Under Management
Assets under management by distribution channel are as follows:
As of March 31,
|
||||||||||||||||
2015
|
2014
|
$ Change
|
% Change
|
|||||||||||||
(in billions)
|
||||||||||||||||
Institutions
|
$
|
243.7
|
$
|
226.4
|
$
|
17.3
|
7.7
|
%
|
||||||||
Retail
|
164.3
|
155.0
|
9.3
|
6.0
|
||||||||||||
Private Wealth Management
|
77.9
|
72.7
|
5.2
|
7.1
|
||||||||||||
Total
|
$
|
485.9
|
$
|
454.1
|
$
|
31.8
|
7.0
|
Assets under management by investment service are as follows:
As of March 31,
|
||||||||||||||||
2015
|
2014
|
$ Change
|
% Change
|
|||||||||||||
(in billions)
|
||||||||||||||||
Equity
|
||||||||||||||||
Actively Managed
|
$
|
115.4
|
$
|
108.6
|
$
|
6.8
|
6.3
|
%
|
||||||||
Passively Managed(1)
|
50.9
|
48.2
|
2.7
|
5.6
|
||||||||||||
Total Equity
|
166.3
|
156.8
|
9.5
|
6.0
|
||||||||||||
Fixed Income
|
||||||||||||||||
Actively Managed
|
||||||||||||||||
Taxable
|
225.5
|
213.4
|
12.1
|
5.7
|
||||||||||||
Tax–exempt
|
32.6
|
30.0
|
2.6
|
8.7
|
||||||||||||
258.1
|
243.4
|
14.7
|
6.0
|
|||||||||||||
Passively Managed(1)
|
9.8
|
9.1
|
0.7
|
8.0
|
||||||||||||
Total Fixed Income
|
267.9
|
252.5
|
15.4
|
6.1
|
||||||||||||
Other(2)
|
51.7
|
44.8
|
6.9
|
15.4
|
||||||||||||
Total
|
$
|
485.9
|
$
|
454.1
|
$
|
31.8
|
7.0
|
(1) | Includes index and enhanced index services. |
(2) | Includes multi-asset solutions and services and certain alternative investments. |
Changes in assets under management for the three-month and twelve-month periods ended March 31, 2015 are as follows:
Distribution Channel
|
||||||||||||||||
Institutions
|
Retail
|
Private
Wealth Management
|
Total
|
|||||||||||||
(in billions)
|
||||||||||||||||
Balance as of December 31, 2014
|
$
|
237.0
|
$
|
161.5
|
$
|
75.5
|
$
|
474.0
|
||||||||
Long-term flows:
|
||||||||||||||||
Sales/new accounts
|
7.3
|
10.8
|
1.4
|
19.5
|
||||||||||||
Redemptions/terminations
|
(2.4
|
)
|
(9.0
|
)
|
(0.7
|
)
|
(12.1
|
)
|
||||||||
Cash flow/unreinvested dividends
|
0.5
|
(1.3
|
)
|
(0.6
|
)
|
(1.4
|
)
|
|||||||||
Net long-term inflows
|
5.4
|
0.5
|
0.1
|
6.0
|
||||||||||||
Transfers
|
(0.3
|
)
|
(0.1
|
)
|
0.4
|
—
|
||||||||||
Market appreciation
|
1.6
|
2.4
|
1.9
|
5.9
|
||||||||||||
Net change
|
6.7
|
2.8
|
2.4
|
11.9
|
||||||||||||
Balance as of March 31, 2015
|
$
|
243.7
|
$
|
164.3
|
$
|
77.9
|
$
|
485.9
|
||||||||
Balance as of March 31, 2014
|
$
|
226.4
|
$
|
155.0
|
$
|
72.7
|
$
|
454.1
|
||||||||
Long-term flows:
|
||||||||||||||||
Sales/new accounts
|
28.5
|
42.9
|
5.7
|
77.1
|
||||||||||||
Redemptions/terminations
|
(9.9
|
)
|
(36.6
|
)
|
(4.6
|
)
|
(51.1
|
)
|
||||||||
Cash flow/unreinvested dividends
|
(3.9
|
)
|
(5.2
|
)
|
(1.4
|
)
|
(10.5
|
)
|
||||||||
Net long-term inflows (outflows)
|
14.7
|
1.1
|
(0.3
|
)
|
15.5
|
|||||||||||
Acquisitions
|
0.1
|
2.8
|
—
|
2.9
|
||||||||||||
AUM adjustments(3)
|
(1.1
|
)
|
(0.5
|
)
|
—
|
(1.6
|
)
|
|||||||||
Transfers
|
0.1
|
(0.4
|
)
|
0.3
|
—
|
|||||||||||
Market appreciation
|
3.5
|
6.3
|
5.2
|
15.0
|
||||||||||||
Net change
|
17.3
|
9.3
|
5.2
|
31.8
|
||||||||||||
Balance as of March 31, 2015
|
$
|
243.7
|
$
|
164.3
|
$
|
77.9
|
$
|
485.9
|
|
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, 2014
|
$
|
112.5
|
$
|
50.4
|
$
|
219.4
|
$
|
31.6
|
$
|
10.1
|
$
|
50.0
|
$
|
474.0
|
||||||||||||||
Long-term flows:
|
||||||||||||||||||||||||||||
Sales/new accounts
|
4.0
|
0.2
|
12.7
|
1.5
|
0.1
|
1.0
|
19.5
|
|||||||||||||||||||||
Redemptions/terminations
|
(3.9
|
)
|
(0.2
|
)
|
(6.5
|
)
|
(0.7
|
)
|
(0.1
|
)
|
(0.7
|
)
|
(12.1
|
)
|
||||||||||||||
Cash flow/unreinvested dividends
|
(1.3
|
)
|
(0.2
|
)
|
0.2
|
(0.1
|
)
|
(0.3
|
)
|
0.3
|
(1.4
|
)
|
||||||||||||||||
Net long-term (outflows) inflows
|
(1.2
|
)
|
(0.2
|
)
|
6.4
|
0.7
|
(0.3
|
)
|
0.6
|
6.0
|
||||||||||||||||||
Market appreciation (depreciation)
|
4.1
|
0.7
|
(0.3
|
)
|
0.3
|
—
|
1.1
|
5.9
|
||||||||||||||||||||
Net change
|
2.9
|
0.5
|
6.1
|
1.0
|
(0.3
|
)
|
1.7
|
11.9
|
||||||||||||||||||||
Balance as of March 31, 2015
|
$
|
115.4
|
$
|
50.9
|
$
|
225.5
|
$
|
32.6
|
$
|
9.8
|
$
|
51.7
|
$
|
485.9
|
Balance as of March 31, 2014
|
$
|
108.6
|
$
|
48.2
|
$
|
213.4
|
$
|
30.0
|
$
|
9.1
|
$
|
44.8
|
$
|
454.1
|
||||||||||||||
Long-term flows:
|
||||||||||||||||||||||||||||
Sales/new accounts
|
15.0
|
1.8
|
48.6
|
4.7
|
0.6
|
6.4
|
77.1
|
|||||||||||||||||||||
Redemptions/terminations
|
(15.2
|
)
|
(1.0
|
)
|
(28.3
|
)
|
(3.4
|
)
|
(0.6
|
)
|
(2.6
|
)
|
(51.1
|
)
|
||||||||||||||
Cash flow/unreinvested dividends
|
(5.5
|
)
|
(2.0
|
)
|
(4.9
|
)
|
(0.1
|
)
|
0.7
|
1.3
|
(10.5
|
)
|
||||||||||||||||
Net long-term (outflows) inflows
|
(5.7
|
)
|
(1.2
|
)
|
15.4
|
1.2
|
0.7
|
5.1
|
15.5
|
|||||||||||||||||||
Acquisitions
|
2.9
|
—
|
—
|
—
|
—
|
—
|
2.9
|
|||||||||||||||||||||
AUM adjustments(3)
|
(0.1
|
)
|
—
|
(1.4
|
)
|
—
|
—
|
(0.1
|
)
|
(1.6
|
)
|
|||||||||||||||||
Market appreciation (depreciation)
|
9.7
|
3.9
|
(1.9
|
)
|
1.4
|
—
|
1.9
|
15.0
|
||||||||||||||||||||
Net change
|
6.8
|
2.7
|
12.1
|
2.6
|
0.7
|
6.9
|
31.8
|
|||||||||||||||||||||
Balance as of March 31, 2015
|
$
|
115.4
|
$
|
50.9
|
$
|
225.5
|
$
|
32.6
|
$
|
9.8
|
$
|
51.7
|
$
|
485.9
|
(1) | Includes index and enhanced index services. |
(2) | Includes multi-asset solutions and services and certain alternative investments. |
(3) | Excludes Institutional assets for which we provide administrative services but not investment management services and seed capital invested in Retail funds for which we do not charge an investment management fee on AUM. |
Average assets under management by distribution channel and investment service were as follows:
Three Months Ended
|
||||||||||||||||
3/31/15
|
3/31/14
|
$ Change
|
% Change
|
|||||||||||||
(in billions) | ||||||||||||||||
Distribution Channel:
|
||||||||||||||||
Institutions
|
$
|
241.5
|
$
|
227.1
|
$
|
14.4
|
6.3
|
%
|
||||||||
Retail
|
162.8
|
153.2
|
9.6
|
6.3
|
||||||||||||
Private Wealth Management
|
76.7
|