Looking for a little corporate finance/accounting help here. I am spreading comps for a group that includes AllianceBernstein Holding L.P. ("AB") Those of you familiar with the company will know that AB itself is really just a vehicle to create access to float for AllianceBernstein L.P. ("AB Op") the privately owned company that actually has operations.
AB Op is majority owned by AXA, but AB has a ~35-37% stake in AB Op 'units'; each share of AB constitutes functionally owning one unit of ownership in AB Op.
The issue is, AB reports its earnings directly as shares of equity in earnings of AB Op. This means there are two line items:
1. Equity in earnings from AB Op (I might be paraphrasing the actual line item name)
2. Taxes on those earnings; both of which lead to net income.
The balance sheet is much the same way, with the only asset being an equity stake in AB Op.
This makes the computation of some common multiples (EV/EBITDA, Debt/EBITDA, EV/EBIT, etc) pretty stupid, because on AB's income statement and balance sheet, EBIT=EBITDA=Revenue and EV=P.
I am wondering: is finding these multiples an exercise in futility or would it be appropriate to distribute AB's share of AB Op's Income statement items to my multiples?
That is to say, AB owns 37.5% of AB Op. AB Op had revenue of $100; thus we can infer AB revenue~=$37.50.
Can anyone help me out here? Additionally, if anyone has access to a research report on AB that would be willing to toss it my way, I would really appreciate it.
Have a good weekend all!
