Alliancebernstein L.P. – ‘424B2’ on 8/9/01

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Document/Exhibit                   Description                      Pages   Size 

 1: 424B2       Prospectus                                            62    308K 

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                                              Filed pursuant to Rule 424(b)(2)
                                                    Registration No. 333-64886
Prospectus Supplement                                                           
(To Prospectus dated July 30, 2001)                                             

Alliance Capital [LOGO]/R/

Alliance Capital Management L.P.                                                

$400,000,000                                                                    
5.625% Notes due 2006                                                           

Interest payable February 15 and August 15                                      

Issue price: 99.457%                                                            

The notes will mature on August 15, 2006. Interest will accrue from August 10,  
2001. We may redeem the notes in whole or in part at any time as described in   
this Prospectus Supplement under "Description of Notes--Optional Redemption" on 
page S-38.                                                                      

Neither the Securities and Exchange Commission nor any state securities         
commission has approved or disapproved of the notes or determined that this     
Prospectus Supplement is accurate or complete. Any representation to the        
contrary is a criminal offense.                                                 

                                                                [Download Table]

-------------------------------------------------
         Price to     Underwriting  Proceeds     
         Public       Discount      to Us        

-------------------------------------------------
                                                 
Per Note 99.457%      0.600%        98.857%      

-------------------------------------------------
Total    $397,828,000 $2,400,000    $395,428,000 

-------------------------------------------------

The notes will not be listed on any securities exchange. Currently, there is no 
public market for the notes.                                                    

We expect that delivery of the notes will be made to investors on or about      
August 10, 2001 through the book entry system of The Depository Trust Company.  

Deutsche Banc Alex. Brown                                              JPMorgan 

Banc of America Securities LLC  

BNY Capital Markets, Inc.     Fleet Securities, Inc.     Salomon Smith Barney   

Commerzbank Securities                                                 SG Cowen 

August 7, 2001                                                                  

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No person is authorized to give any information or to make any            
representations other than those contained or incorporated by reference in this 
prospectus supplement or the accompanying prospectus, and, if given or made,    
such information or representations must not be relied upon as having been      
authorized. This prospectus supplement and the accompanying prospectus do not   
constitute an offer to sell or the solicitation of an offer to buy any          
securities other than the securities described in this prospectus supplement or 
an offer to sell or the solicitation of an offer to buy such securities in any  
circumstances in which such offer or solicitation is unlawful. Neither the      
delivery of this prospectus supplement or the accompanying prospectus, nor any  
sale made hereunder and thereunder shall, under any circumstances, create any   
implication that there has been no change in the affairs of Alliance Capital    
since the date hereof or that the information contained or incorporated by      
reference herein or therein is correct as of any time subsequent to the date of 
such information.                                                               

TABLE OF CONTENTS 

                                                                [Download Table]

                                               Page
                                               ----
                                                   
            Prospectus Supplement                  
Summary of the Offering....................... S-3 
Alliance Capital Management L.P............... S-4 
Incorporation of Certain Documents by              
  Reference................................... S-4 
Consolidated Ratio of Earnings to Fixed            
  Charges..................................... S-5 
Use of Proceeds............................... S-6 
Capitalization................................ S-6 
Selected Consolidated Financial and Other Data S-7 
Management's Discussion and Analysis of            
  Financial Condition and Results of               
  Operations.................................. S-9 
Business...................................... S-26
Description of Notes.......................... S-38
United States Federal Taxation................ S-40
ERISA......................................... S-42
Underwriting.................................. S-43
Legal Matters................................. S-44

Prospectus  

                                                                [Download Table]
                                                    
About Alliance Capital Management L.P........... 3  
Where You Can Find More Information............. 3  
Special Note on Forward-Looking Statements...... 4  
Consolidated Ratios of Earnings to Fixed Charges 4  
Use of Proceeds................................. 5  
Description of Debt Securities.................. 6  
Description of Debt Warrants.................... 11 
Forms of Securities............................. 14 
Plan of Distribution............................ 16 
Legal Matters................................... 17 
Experts......................................... 17 

----------------- 

You should rely only on the information contained or incorporated by      
reference in this prospectus supplement and the accompanying prospectus dated   
July 30, 2001. We have not authorized anyone to provide you with information    
different from that contained or incorporated by reference in this prospectus   
supplement and the accompanying prospectus. We are offering to sell, and        
seeking offers to buy, only the notes described in this prospectus supplement   
and the accompanying prospectus, and we are offering to sell and seeking offers 
to buy these notes only in jurisdictions where offers and sales are permitted.  
In this prospectus supplement, the terms "Alliance Capital," "we," "us" and     
"our" refer to Alliance Capital Management L.P.                                 

The distribution of this prospectus supplement and the accompanying       
prospectus and the offering of the notes in certain jurisdictions may be        
restricted by law. Persons outside the United States who come into possession   
of this prospectus supplement and the accompanying prospectus must inform       
themselves about and observe any restrictions relating to the offering of the   
notes and the distribution of this prospectus supplement and the accompanying   
prospectus outside the United States.                                           

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SUMMARY OF THE OFFERING 

  The following summary describes the 5.625% Notes due 2006 we are offering to
you in general terms only. You should read the summary together with the more   
detailed information that is contained in the rest of this prospectus           
supplement and in the accompanying prospectus.                                  

Issuer......................  Alliance Capital Management L.P.                  

Notes Offered...............  $400,000,000 5.625% Notes due 2006, referred to   
                      as the "notes due 2006" or as the "notes."

Maturity....................  August 15, 2006                                   

Issue Date for the Notes....  August 10, 2001                                   

Issue Price.................  99.457%                                           

Interest Payment Dates......  Each February 15 and August 15, commencing        
February 15, 2002.  

Optional Redemption.........  We may redeem the notes at any time at our        
                           option. Please read the section "Description of
                          Notes--Optional Redemption" in this prospectus
supplement.         

Ranking.....................  The notes will constitute senior debt and will    
                         rank on a parity with all of our existing and
                             future unsecured and unsubordinated indebtedness.

Covenants...................  The indenture for the notes contains limitations  
                        on liens on stock and debt of our designated
                        subsidiaries (as defined in the accompanying
                          prospectus) and limits our ability to merge or
                           consolidate with or into any person (other than
                            in a merger or consolidation in which we are the
                             surviving person) or to sell all or substantially
                          all of our properties or assets to any person.

Form........................  Fully registered global notes in book-entry form. 

Delivery and Clearance......  We will deposit the global notes for the 5.625%   
                            notes due 2006 with The Depository Trust Company
in New York.        

How to Reach Us.............  Our principal executive offices are located at    
                           1345 Avenue of the Americas, New York, New York
                   10105, telephone number (212) 969-1000.

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ALLIANCE CAPITAL MANAGEMENT L.P.  

Alliance Capital Management Holding L.P., which we refer to as Alliance   
Holding, was formed in 1987 to succeed to the business of ACMC, Inc., a         
wholly-owned subsidiary of The Equitable Life Assurance Society of the United   
States, or "Equitable," which began providing investment management services in 
1971. On April 21, 1988 the business and substantially all of the operating     
assets of ACMC, Inc., were conveyed to Alliance Holding in exchange for a 1%    
general partnership interest in Alliance Holding and approximately 55% of the   
outstanding Alliance Holding units. In December 1991, ACMC, Inc., transferred   
its 1% general partnership interest in Alliance Holding to Alliance Capital     
Management Corporation.                                                         

On February 19, 1998, Alliance Holding declared a two for one Alliance    
Holding unit split payable to Alliance Holding unitholders of record on March   
11, 1998. No adjustments have been made to the number of Alliance Holding units 
outstanding or per Alliance Holding unit amounts prior to March 11, 1998,       
except as noted in the footnotes to the section titled "Selected Consolidated   
Financial and Other Data."                                                      

In October 1999, Alliance Holding reorganized by transferring its business
and assets to Alliance Capital, a newly formed operating partnership, in        
exchange for all of the Alliance Capital units, we refer to that transaction as 
the "reorganization." Since the date of the reorganization, Alliance Capital,   
which also is referred to as the operating partnership in this prospectus       
supplement and accompanying prospectus, has conducted the diversified           
investment management services business formerly conducted by Alliance Holding, 
and Alliance Holding's business has consisted of holding Alliance Capital units 
and engaging in related activities. Alliance Capital Management Corporation is  
the general partner of both Alliance Capital and Alliance Holding.              

  On October 2, 2000, Alliance Capital acquired the business and assets of SCB
Inc., formerly known as Sanford C. Bernstein Inc., which we refer to as         
"Bernstein," and assumed the liabilities of the Bernstein business, the         
"Bernstein acquisition." The purchase price consisted of a cash payment of      
$1.4754 billion and 40.8 million newly issued Alliance Capital units.           

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE 

 Alliance Capital's Quarterly Report on Form 10-Q for the quarter ended June
30, 2001, which has previously been filed by Alliance Capital with the          
Securities and Exchange Commission, "SEC," is incorporated by reference in this 
prospectus supplement.                                                          

All annual, quarterly and special reports, proxy statements and other     
information filed by Alliance Capital with the SEC subsequent to the date of    
this prospectus supplement and prior to the termination of the offering of the  
notes shall be deemed to be incorporated by reference in this prospectus        
supplement and to be a part hereof from the date of filing of such documents.   
Any statement contained in this prospectus supplement or in a document          
incorporated or deemed to be incorporated by reference herein shall be deemed   
to be modified or superseded for purposes of this prospectus supplement to the  
extent that a statement contained herein or in any subsequently filed document  
that also is or is deemed to be incorporated by reference herein modifies or    
supersedes such statement. Any statement so modified or superseded shall not be 
deemed, except as so modified or superseded, to constitute a part of this       
prospectus supplement.                                                          

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CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES 

The following table sets forth our consolidated ratio of earnings to fixed
charges for the periods indicated.                                              

                                                                [Download Table]

                                   Six Months Ended                               
                                       June 30,              Fiscal Year          
                                   ---------------- ------------------------------
                                     2001    2000   2000  1999  1998  1997   1996 
                                    -----    -----  ----- ----- ----- ----- ------
                                                                                  
Ratio of earnings to fixed charges 16.83    15.14   17.11 24.74 47.67 51.00 109.47

  For purposes of calculating the ratio of earnings to fixed charges, earnings
are the sum of:                                                                 

   .  pre-tax income from continuing operations before adjustment for minority
  interests in consolidated subsidiaries or income or loss from equity
investees;                                                        

.  fixed charges;                                                       

.  amortization of capitalized interest;                                

.  distributed income of equity investees; and                          

.  our share of pre-tax losses of equity investees for which charges    
arising from guarantees are included in fixed charges;            

less:                                                                     

.  capitalized interest.                                                

For purposes of calculating the ratio of earnings to fixed charges, fixed 
charges are the sum of:                                                         

.  interest expensed and capitalized;                                   

.  amortized premiums, discounts and capitalized expenses related to    
indebtedness; and                                                 

.  our estimate of the interest components of rental expenses.          

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USE OF PROCEEDS 

We intend to use the proceeds from the sale of the notes to reduce our    
outstanding commercial paper borrowings and to repay indebtedness under our     
bank revolving credit facilities and for other general partnership purposes.    

CAPITALIZATION  

The following table sets forth a summary of our consolidated debt and     
capitalization at June 30, 2001, and as adjusted to give effect to the sale of  
the $400 million aggregate principal amount of notes offered by this prospectus 
supplement and the application of the net proceeds from that sale.              

                                                        [Enlarge/Download Table]

                                                                   At June 30, 2001    
                                                                ---------------------- 
                                                                  Actual    As Adjusted
                                                                ----------  -----------
                                                                    (In thousands)     
                                                                                       
Commercial paper............................................... $  342,222  $  144,222 
Bank revolving credit facilities...............................    202,000          -- 
Extendible commercial notes....................................     63,146      63,146 
Other..........................................................      5,997       5,997 
Notes due 2006.................................................         --     400,000 
                                                                ----------  ---------- 
          Total debt........................................... $  613,365  $  613,365 
                                                                ==========  ========== 
Partners' Capital                                                                      
   General Partner.............................................     42,235      42,235 
                                                                ----------  ---------- 
   Limited Partners: 247,913,190 units issued and outstanding..  4,179,383   4,179,383 

   Less: Capital contributions receivable from General Partner.    (33,434)    (33,434)
        Deferred compensation expense..........................   (127,950)   (127,950)
        Accumulated other comprehensive income.................     (5,336)     (5,336)
                                                                ----------  ---------- 
          Total partners' capital..............................  4,054,898   4,054,898 
                                                                ----------  ---------- 
          Total capitalization................................. $4,668,263  $4,668,263 
                                                                ==========  ========== 

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SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA  

The consolidated statement of income data of Alliance Capital for the year
ended December 31, 2000, the combined consolidated statement of income data for 
the year ended December 31, 1999, which represent data of Alliance Capital for  
the two-month period ended December 31, 1999 and data of Alliance Holding, as   
predecessor to Alliance Capital, for the ten-month period ended October 29,     
1999, and the consolidated statement of income data of Alliance Holding for the 
years ended December 31, 1998, 1997 and 1996 and the consolidated balance sheet 
data of Alliance Capital as of December 31, 2000 and 1999 and of Alliance       
Holding as of December 31, 1998, 1997 and 1996 are derived from and should be   
read in conjunction with our audited financial statements incorporated by       
reference to our report on Form 10-K for the year ended December 31, 2000. The  
consolidated statement of income data of Alliance Capital for the six-month     
periods ended June 30, 2001 and 2000 and the consolidated balance sheet data of 
Alliance Capital as of June 30, 2001 are derived from our unaudited financial   
statements incorporated by reference to our report on Form 10-Q for the period  
ended June 30, 2001. Results for the six months ended June 30, 2001 are not     
necessarily indicative of results that may be expected for the entire year. See 
"Management's Discussion and Analysis of Financial Condition and Results of     
Operations" in our Form 10-K for the year ended December 31, 2000 and in our    
Form 10-Q for the period ended June 30, 2001.                                   

                                                        [Enlarge/Download Table]

                                                     Operating Partnership(1)                  Alliance Holding      
                                           --------------------------------------------- ----------------------------
                                              Six Months Ended                                                       
                                                  June 30,                      Year Ended December 31,              
                                           ---------------------  ---------------------------------------------------
                                                (unaudited)                   (combined)                             
                                              2001       2000        2000        1999       1998      1997     1996  
                                           ---------- ----------  ----------  ---------- ---------- -------- --------
                                                       (Dollars in thousands, unless otherwise indicated)            
                                                                                                                     
INCOME STATEMENT DATA:                                                                                               
Revenues:                                                                                                            
   Investment advisory and services fees.. $1,004,633 $  751,831  $1,689,817  $1,331,758 $  952,992 $698,979 $564,032
   Distribution revenues..................    278,697    302,678     621,622     441,772    301,846  216,851  169,071
   Institutional research fees............    135,611         --      56,289          --         --       --       --
   Shareholder servicing fees.............     47,209     40,980      85,645      62,332     43,475   36,327   31,272
   Other revenues, net....................     36,453     17,854      68,726      33,443     25,743   23,179   24,142
                                           ---------- ----------  ----------  ---------- ---------- -------- --------
                                            1,502,603  1,113,343   2,522,099   1,869,305  1,324,056  975,336  788,517
                                           ---------- ----------  ----------  ---------- ---------- -------- --------
Expenses:                                                                                                            
   Employee compensation and benefits.....    447,315    260,089     651,884     508,566    340,923  264,251  214,880
   Promotion and servicing                                                                                           
      Distribution plan payments..........    248,171    235,809     476,039     346,642    266,400  181,080  145,645
      Amortization of deferred sales                                                                                 
       commissions........................    116,204    103,886     219,664     163,942    108,853   73,841   53,144
      Other...............................     95,616     68,138     148,740     110,144     85,087   57,245   48,868
   General and administrative.............    154,893     99,029     226,710     184,754    162,323  120,283  100,854
   Interest...............................     21,165     24,390      44,244      22,585      7,586    2,968    1,923
   Amortization of intangible assets......     86,267      1,956      46,252       3,852      4,172    7,006   15,613
   Non-recurring items, net...............         --    (23,853)       (779)         --         --  120,900       --
                                           ---------- ----------  ----------  ---------- ---------- -------- --------
                                            1,169,631    769,444   1,812,754   1,340,485    975,344  827,574  580,927
                                           ---------- ----------  ----------  ---------- ---------- -------- --------
Income before income taxes................    332,972    343,899     709,345     528,820    348,712  147,762  207,590
Income taxes..............................     19,979     18,914      40,596      67,171     55,796   18,806   14,244
                                           ---------- ----------  ----------  ---------- ---------- -------- --------
Net income................................ $  312,993 $  324,985  $  668,749  $  461,649 $  292,916 $128,956 $193,346
                                           ========== ==========  ==========  ========== ========== ======== ========
Net income excluding performance fees..... $  298,052 $  313,733  $  632,046  $  398,416 $  270,366 $109,572 $182,490
                                           ========== ==========  ==========  ========== ========== ======== ========
Net operating earnings(2)................. $  399,260 $  303,088  $  714,222  $  465,501 $  297,088 $256,862 $208,959
                                           ========== ==========  ==========  ========== ========== ======== ========

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                                                        [Enlarge/Download Table]

                                                     Operating Partnership(1)                   Alliance Holding        
                                           -------------------------------------------- --------------------------------
                                              Six Months Ended                                                          
                                                  June 30,                       Year Ended December 31,                
                                           ---------------------  ------------------------------------------------------
                                                (unaudited)                  (combined)                                 
                                              2001       2000        2000       1999       1998       1997       1996   
                                           ---------- ----------  ---------- ---------- ---------- ---------- ----------
                                                        (Dollars in thousands, unless otherwise indicated)              
                                                                                                                        
NET INCOME PER UNIT:(3)(4)                                                                                              
   Basic net income per unit.............. $     1.25 $     1.86  $     3.31 $     2.67 $     1.71 $     0.76 $     1.15
   Diluted net income per unit............ $     1.22 $     1.78  $     3.20 $     2.59 $     1.66 $     0.74 $     1.13
NET OPERATING EARNINGS                                                                                                  
 PER UNIT:(3)(4)                                                                                                        
   Diluted net income per unit............ $     1.22 $     1.78  $     3.20 $     2.59 $     1.66 $     0.74 $     1.13
   Amortization of intangible assets per                                                                                
    unit.................................. $     0.33 $     0.01        0.22       0.02       0.02       0.04       0.09
   Non-recurring items per unit...........         --      (0.13)         --         --         --       0.70         --
                                           ---------- ----------  ---------- ---------- ---------- ---------- ----------
   Net operating earnings per unit........ $     1.55 $     1.66  $     3.42 $     2.61 $     1.68 $     1.48 $     1.22
                                           ========== ==========  ========== ========== ========== ========== ==========
PERFORMANCE FEES                                                                                                        
 PER UNIT:(3)(4)                                                                                                        
   Base fee earnings per unit............. $     1.50 $     1.60  $     3.24 $     2.24 $     1.55 $     1.37 $     1.16
   Performance fee earnings per unit...... $     0.05 $     0.06        0.18       0.37       0.13       0.11       0.06
                                           ========== ==========  ========== ========== ========== ========== ==========
   Net operating earnings per unit........ $     1.55 $     1.66  $     3.42 $     2.61 $     1.68 $     1.48 $     1.22
                                           ========== ==========  ========== ========== ========== ========== ==========
CASH DISTRIBUTIONS                                                                                                      
 PER UNIT:(3)(5).......................... $     1.53 $    1.635  $     3.40 $     2.55 $     1.62 $     1.40 $    1.095
BALANCE SHEET DATA AT                                                                                                   
 PERIOD END:                                                                                                            
   Total assets........................... $7,672,367 $3,153,498  $8,270,762 $1,661,061 $1,132,592 $  784,460 $  725,897
   Debt and long-term obligations(6)...... $  762,097 $  394,056  $  933,475 $  491,004 $  238,089 $  130,429 $   55,629
   Partners' capital...................... $4,054,898 $2,148,158  $4,133,677 $  552,667 $  430,273 $  398,051 $  476,020
ASSETS UNDER MANAGEMENT                                                                                                 
 AT PERIOD END (in millions)(7)........... $  465,371 $  387,759  $  453,679 $  368,321 $  286,659 $  218,654 $  182,792

--------                                                                        
(1)The financial information above reflects the operations of Alliance Holding  
prior to its reorganization effective as of October 29, 1999 and Alliance 
Capital, or the operating partnership, following the reorganization.      
(2)Net operating earnings represents net income excluding amortization of       
intangible assets and non-recurring items.                                
(3)Unit and per unit amounts for all periods prior to the two-for-one unit      
split in 1998 have been restated.                                         
(4)Earnings per unit amounts prior to 1997 have been restated as required to    
comply with Statement of Financial Accounting Standards No. 128, Earnings 
Per Share.                                                                
(5)The operating partnership is required to distribute all of its available     
 cash flow, as defined in the Alliance Capital Partnership Agreement, to the
general partner and Alliance Capital unitholders.                         
(6)Includes accrued expenses under employee benefit plans due after one year    
and debt.                                                                 
(7)Assets under management exclude certain non-discretionary relationships and  
include 100% of assets managed by unconsolidated affiliates.              

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION 
AND RESULTS OF OPERATIONS 

Six Months Ended June 30, 2001 Compared to Six Months Ended June 30, 2000       

General                                                                         

The operating partnership's revenues are largely dependent on the total   
value and composition of assets under its management. Assets under management   
were $465.4 billion at June 30, 2001, an increase of 20.0% from June 30, 2000   
primarily as a result of the Bernstein acquisition, which added $85.8 billion   
at October 2, 2000, and net asset inflows, offset by market depreciation.       
Active equity and balanced account assets under management, which comprise      
approximately 62.5% of total assets under management, were 20.9% higher. Active 
fixed income assets under management, including cash management products, which 
comprise approximately 30.3% of total assets under management, increased by     
27.3%.                                                                          

Assets Under Management(1)                                                      

                                                                [Download Table]

                                      June 30,                         
                                    -------------   Change   Percentage
                                     2001   2000  in dollars   change  
                                    ------ ------ ---------- ----------
                                           (Dollars in billions)       
                                                                       
Retail............................. $163.1 $170.2   $ (7.1)     (4.2)% 
Institutional investment management  263.6  212.5     51.1      24.0   
Private client.....................   38.7    5.1     33.6     658.8   
                                    ------ ------   ------             
      Total........................ $465.4 $387.8   $ 77.6      20.0%  
                                    ====== ======   ======             

Assets Under Management By Investment Orientation(1)                            

                                                                [Download Table]

                                     June 30,                         
                                   -------------   Change   Percentage
                                    2001   2000  in dollars   change  
                                   ------ ------ ---------- ----------
                                          (Dollars in billions)       
                                                                      
Active equity and balanced--Growth                                    
   Domestic....................... $151.4 $197.1   $(45.7)     (23.2)%
   Global and international.......   43.4   31.4     12.0       38.2  
                                   ------ ------   ------             
Active equity and balanced--Value                                     
   Domestic.......................   76.5   12.0     64.5      537.5  
   Global and international.......   19.7    0.2     19.5    9,750.0  
                                   ------ ------   ------             
Total active equity and balanced..  291.0  240.7     50.3       20.9  
Active fixed income                                                   
   Domestic.......................  114.0   97.7     16.3       16.7  
   Global and international.......   27.3   13.2     14.1      106.8  
Passive                                                               
   Domestic.......................   28.3   30.0     (1.7)      (5.7) 
   Global and international.......    4.8    6.2     (1.4)     (22.6) 
                                   ------ ------   ------             
      Total....................... $465.4 $387.8   $ 77.6       20.0% 
                                   ====== ======   ======             

Average Assets Under Management(1)(2)                                           

                                                        [Enlarge/Download Table]

                                    Three Months Ended             Six Months Ended            
                                         June 30,                      June 30,                
                                    ------------------- Percentage ----------------- Percentage
                                      2001      2000      change     2001     2000     change  
                                    --------- --------- ---------- -------- -------- ----------
                                                       (Dollars in billions)                   
                                                                                               
Retail.............................    $162.1    $169.8    (4.5)%    $164.5   $163.9     0.4%  
Institutional investment management     254.7     211.7    20.3       255.1    208.9    22.1   
Private client.....................      38.1       5.3   618.9        37.6      5.3   609.4   
                                    --------- ---------            -------- --------           
      Total........................    $454.9    $386.8    17.6%     $457.2   $378.1    20.9%  
                                    ========= =========            ======== ========           

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Analysis of Assets Under Management--Three Month Periods(1)                     

                                                        [Enlarge/Download Table]

                                                      2001                                  2000                 
                                      ------------------------------------  ------------------------------------ 
                                              Institutional                         Institutional                
                                               Investment   Private                  Investment   Private        
                                      Retail   Management   Client  Total   Retail   Management   Client  Total  
                                      ------  ------------- ------- ------  ------  ------------- ------- ------ 
                                                                 (Dollars in billions)                           
                                                                                                                 
Balance at April 1,.................. $155.9     $240.3      $37.0  $433.2  $173.2     $215.4      $ 5.6  $394.2 
                                      ------     ------      -----  ------  ------     ------      -----  ------ 
Sales/new accounts...................   11.2       17.7        2.2    31.1    19.1        4.3        0.1    23.5 
Redemptions/terminations.............   (8.0)      (1.6)      (1.9)  (11.5)  (12.1)      (2.1)      (0.4)  (14.6)
Net cash management sales............   (1.3)      (1.1)       0.3    (2.1)   (4.8)      (0.8)        --    (5.6)
Cash flow/Unreinvested dividends.....   (0.2)       0.1       (0.2)   (0.3)   (0.2)       1.1         --     0.9 
                                      ------     ------      -----  ------  ------     ------      -----  ------ 
Net asset inflows (outflows).........    1.7       15.1        0.4    17.2     2.0        2.5       (0.3)    4.2 
Discontinued affiliated joint venture                                                                            
 companies...........................   (0.9)      (0.3)        --    (1.2)     --         --         --      -- 
Transfer.............................    0.8       (0.8)        --      --      --         --         --      -- 
Market appreciation (depreciation)...    5.6        9.3        1.3    16.2    (5.0)      (5.4)      (0.2)  (10.6)
                                      ------     ------      -----  ------  ------     ------      -----  ------ 
Net change...........................    7.2       23.3        1.7    32.2    (3.0)      (2.9)      (0.5)   (6.4)
                                      ------     ------      -----  ------  ------     ------      -----  ------ 
Balance at June 30,.................. $163.1     $263.6      $38.7  $465.4  $170.2     $212.5      $ 5.1  $387.8 
                                      ======     ======      =====  ======  ======     ======      =====  ====== 

Analysis of Assets Under Management--Six Month Periods(1)                       

                                                        [Enlarge/Download Table]

                                                      2001                                  2000                 
                                      ------------------------------------  ------------------------------------ 
                                              Institutional                         Institutional                
                                               Investment   Private                  Investment   Private        
                                      Retail   Management   Client  Total   Retail   Management   Client  Total  
                                      ------  ------------- ------- ------  ------  ------------- ------- ------ 
                                                                 (Dollars in billions)                           
                                                                                                                 
Balance at January 1,................ $163.3     $253.6      $36.8  $453.7  $155.2     $207.6      $ 5.5  $368.3 
                                      ------     ------      -----  ------  ------     ------      -----  ------ 
Sales/new accounts...................   23.4       23.8        4.1    51.3    39.5        7.2        0.2    46.9 
Redemptions/terminations.............  (16.9)      (5.2)      (3.3)  (25.4)  (25.0)      (3.3)      (0.5)  (28.8)
Net cash management sales............    0.7        1.8        0.3     2.8    (2.1)       0.6         --    (1.5)
Cash flow/Unreinvested dividends.....   (0.4)      (0.2)       0.2    (0.4)   (0.4)      (2.9)        --    (3.3)
                                      ------     ------      -----  ------  ------     ------      -----  ------ 
Net asset inflows (outflows).........    6.8       20.2        1.3    28.3    12.0        1.6       (0.3)   13.3 
Australia joint venture company......    5.4        3.1         --     8.5      --         --         --      -- 
Discontinued affiliated joint venture                                                                            
 companies...........................   (0.9)      (0.3)        --    (1.2)     --         --         --      -- 
Transfer.............................    0.8       (0.8)        --      --      --         --         --      -- 
Market appreciation (depreciation)...  (12.3)     (12.2)       0.6   (23.9)    3.0        3.3       (0.1)    6.2 
                                      ------     ------      -----  ------  ------     ------      -----  ------ 
Net change...........................   (0.2)      10.0        1.9    11.7    15.0        4.9       (0.4)   19.5 
                                      ------     ------      -----  ------  ------     ------      -----  ------ 
Balance at June 30,.................. $163.1     $263.6      $38.7  $465.4  $170.2     $212.5      $ 5.1  $387.8 
                                      ======     ======      =====  ======  ======     ======      =====  ====== 

--------                                                                        
(1)Excludes certain non-discretionary relationships. Includes 100% of assets    
under management of unconsolidated affiliates as follows: $2.5 billion    
  retail assets and $0.9 billion institutional investment management assets at
 June 30, 2001 and $2.5 billion retail assets and $0.9 billion institutional
investment management assets at June 30, 2000. Certain amounts in the 2000
presentation have been reclassified to conform to the 2001 presentation.  
(2)Average monthly assets under management.                                     

  Assets under management at June 30, 2001 were $465.4 billion, an increase of
$32.2 billion or 7.4% from March 31, 2001 and an increase of $11.7 billion or   
2.6% from December 31, 2000.                                                    

Retail assets under management at June 30, 2001 were $163.1 billion, an   
increase of $7.2 billion or 4.6% from March 31, 2001 and a decrease of $0.2     
billion or 0.1% from December 31, 2000. The increase for the second quarter was 
primarily due to market appreciation of $5.6 billion and net asset inflows of   
$1.7 billion. The                                                               

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decrease for the six months ended June 30, 2001 was primarily due to market     
depreciation of 12.3 billion, offset by net asset inflows of $6.8 billion and   
assets from the new Australia joint venture company established during February 
2001.                                                                           

  Institutional investment management assets under management at June 30, 2001
were $263.6 billion, an increase of $23.3 billion or 9.7% from March 31, 2001   
and an increase of $10.0 billion or 3.9% from December 31, 2000. The increase   
for the second quarter was principally due to net asset inflows of $15.1        
billion and market appreciation of $9.3 billion. The increase for the six       
months ended June 30, 2001 was primarily due to net asset inflows of $20.2      
billion and assets from the new Australia joint venture company established     
during February 2001 offset by market depreciation of $12.2 billion.            

 Private client assets under management at June 30, 2001 were $38.7 billion,
an increase of $1.7 billion or 4.6% from March 31, 2001 and an increase of $1.9 
billion or 5.2% from December 31, 2000. The increase for the second quarter was 
due principally to market appreciation of $1.3 billion and net asset inflows of 
$0.4 billion. The increase for the six months ended June 30, 2001 was due       
principally to net asset inflows of $1.3 billion and market appreciation of     
$0.6 billion.                                                                   

 Assets under management at June 30, 2000 were $387.8 billion, a decrease of
$6.4 billion or 1.6% from March 31, 2000 and an increase of $19.5 billion or    
5.3% from December 31, 1999.                                                    

Retail assets under management at June 30, 2000 were $170.2 billion, a    
decrease of $3.0 billion or 1.7% from March 31, 2000 and an increase of $15.0   
billion or 9.7% from December 31, 1999. The decrease for the second quarter was 
due principally to market depreciation of $5.0 billion, offset by net asset     
inflows of $2.0 billion. The increase for the six months ended June 30, 2000    
was due principally to net asset inflows of $12.0 billion and market            
appreciation of $3.0 billion.                                                   

  Institutional investment management assets under management at June 30, 2000
were $212.5 billion, a decrease of $2.9 billion or 1.3% from March 31, 2000 and 
an increase of $4.9 billion or 2.4% from December 31, 1999. The decrease for    
the second quarter was primarily due to market depreciation of $5.4 billion     
offset by net asset inflows of $2.5 billion. The increase for the six months    
ended June 30, 2000 was primarily due to market appreciation of $3.3 billion    
and net asset inflows of $1.6 billion.                                          

  Private client assets under management at June 30, 2000 were $5.1 billion, a
decrease of $0.5 billion or 8.9% from March 31, 2000 and a decrease of $0.4     
billion or 7.3% from December 31, 1999. The decrease for the second quarter was 
primarily due to net asset outflows of $0.3 billion and market depreciation of  
$0.2 billion. The decrease for the six months ended June 30, 2000 was primarily 
due to net asset outflows of $0.3 billion and market depreciation of $0.1       
billion.                                                                        

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Consolidated Results of Operations                                              

                                                        [Enlarge/Download Table]

                                           Three Months Ended             Six Months Ended             
                                                June 30,                      June 30,                 
                                           -----------------  Percentage ------------------  Percentage
                                             2001     2000      change     2001      2000      change  
                                           --------  -------  ---------- --------  --------  ----------
                                                              (Dollars in millions)                    

                                                                                                       
Revenues.................................. $  760.2  $ 564.9      34.6%  $1,502.6  $1,113.3      35.0% 
Expenses..................................    589.2    402.1      46.5    1,169.6     769.4      52.0  
                                           --------  -------             --------  --------            
Income before income taxes................    171.0    162.8       5.0      333.0     343.9      (3.2) 
Income taxes..............................     10.3      9.0      14.4       20.0      18.9       5.8  
                                           --------  -------             --------  --------            
Net income................................ $  160.7  $ 153.8       4.5   $  313.0  $  325.0      (3.7) 
                                           ========  =======             ========  ========            
Net income................................ $  160.7  $ 153.8       4.5   $  313.0  $  325.0      (3.7) 
Amortization of intangible assets.........     43.2      1.0   4,220.0       86.3       2.0   4,215.0  
Non-recurring item........................       --       --       N/A         --     (23.9)   (100.0) 
                                           --------  -------             --------  --------            
Net operating earnings(1)................. $  203.9  $ 154.8      31.7   $  399.3  $  303.1      31.7  
                                           ========  =======             ========  ========            
Base fee earnings......................... $  192.1  $ 149.3      28.7   $  384.3  $  291.8      31.7  
Performance fee earnings..................     11.8      5.5     114.5       15.0      11.3      32.7  
                                           --------  -------             --------  --------            
Net operating earnings(1)................. $  203.9  $ 154.8      31.7   $  399.3  $  303.1      31.7  
                                           ========  =======             ========  ========            
Diluted net income per unit............... $   0.63  $  0.83     (24.1)  $   1.22  $   1.78     (31.5) 
Amortization of intangible assets per unit     0.16     0.01   1,500.0       0.33      0.01   3,200.0  
Non-recurring item per unit...............       --       --       N/A         --     (0.13)   (100.0) 
                                           --------  -------             --------  --------            
Net operating earnings per unit........... $   0.79  $  0.84      (6.0)  $   1.55  $   1.66      (6.6) 
                                           ========  =======             ========  ========            
Base fee earnings per unit................     0.75     0.81      (7.4)      1.50      1.60      (6.3) 
Performance fee earnings per unit.........     0.04     0.03      33.3       0.05      0.06     (16.7) 
                                           --------  -------             --------  --------            
Net operating earnings per unit........... $   0.79  $  0.84      (6.0)% $   1.55  $   1.66      (6.6)%
                                           ========  =======             ========  ========            
Pre-tax operating margin(2)...............     34.4%    40.0%                34.3%     39.7%           

--------                                                                        
(1)Net operating earnings represents net income excluding amortization of       
intangible assets and non-recurring items.                                
(2)Calculated after netting distribution revenues against operating expenses    
(excluding amortization of intangible assets and non-recurring items).    

Net income for the three months ended June 30, 2001 increased $6.9 million
or 4.5% from net income for the three months ended June 30, 2000. Net income    
for the six months ended June 30, 2001 decreased $12.0 million or 3.7% from net 
income for the six months ended June 30, 2000. The increase in net income for   
the second quarter was principally due to higher revenues offset partially by   
higher operating expenses and amortization of intangible assets, due            
principally to the Bernstein acquisition. The decrease in net income for the    
six month period was the result of higher revenues offset partially by higher   
operating expenses and amortization of intangible assets, due to the Bernstein  
acquisition and the $22.5 million ($23.9 million pre-tax) impact of a           
non-recurring non-cash gain recorded in first quarter 2000 related to the       
settlement of litigation.                                                       

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Revenues                                                                        

                                                        [Enlarge/Download Table]

                                        Three Months Ended            Six Months Ended            
                                             June 30,                     June 30,                
                                        ------------------ Percentage ----------------- Percentage
                                          2001      2000     change     2001     2000     change  
                                        --------  -------- ---------- -------- -------- ----------
                                                          (Dollars in millions)                   
                                                                                                  
Investment advisory and services fee:                                                             
   Retail..............................   $231.6    $248.7     (6.9)% $  472.9 $  491.5    (3.8)% 
   Institutional investment management.    180.3     120.4     49.8      349.9    243.1    43.9   
   Private client......................     94.9       8.5  1,016.5      181.8     17.2   957.0   
                                        --------  --------            -------- --------           
       Subtotal........................    506.8     377.6     34.2    1,004.6    751.8    33.6   
                                        --------  --------            -------- --------           
Distribution revenues..................    138.3     155.5    (11.1)     278.7    302.7    (7.9)  
Institutional research services........     71.2        --      N/A      135.6       --     N/A   
Shareholder servicing fees.............     24.6      21.6     13.9       47.2     41.0    15.1   
Other revenues, net....................     19.3      10.2     89.2       36.5     17.8   105.1   
                                        --------  --------            -------- --------           
       Total...........................   $760.2    $564.9     34.6%  $1,502.6 $1,113.3    35.0%  
                                        ========  ========            ======== ========           

Investment Advisory and Services Fees                                       

Investment advisory and services fees, the largest component of the       
operating partnership's revenues, are generally calculated as a small           
percentage of the value of assets under management and vary with the type of    
account managed. Fee income is therefore affected by changes in the amount of   
assets under management, including 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, and shifts of assets 
between accounts or products with different fee structures. Investment advisory 
and services fees include brokerage transaction charges of Sanford C. Bernstein 
& Co., LLC, "SCB LLC," a wholly-owned subsidiary of the operating partnership,  
for substantially all private client transactions and certain institutional     
investment management client transactions. Investment advisory and services     
fees for the three and six months ended June 30, 2001 increased $129.2 million  
or 34.2% and $252.8 million or 33.6%, respectively from the three months and    
six months ended June 30, 2000.                                                 

Certain investment advisory contracts provide for a performance fee, in   
addition to or in lieu of a base fee, 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. Performance fees are     
recorded as revenue at the end of the measurement period and will generally be  
higher in favorable markets and lower in unfavorable markets, which may         
increase the volatility of the operating partnership's revenues and earnings.   
Performance fees aggregated $16.5 million and $20.9 million for the three and   
six months ended June 30, 2001. The $8.5 million, or 106.3%, increase in        
performance fees from $8.0 million in the second quarter of 2000 was primarily  
related to accounts gained as a result of the Bernstein acquisition with        
performance fee arrangements. The $4.8 million, or 29.8%, increase in           
performance fees from $16.1 million for the six months ended June 30, 2000 was  
also primarily a result of accounts gained as a result of the Bernstein         
acquisition with performance fee arrangements.                                  

  Retail investment advisory and services fees for the three months ended June
30, 2001 decreased by $17.1 million or 6.9% from the three months ended June    
30, 2000 primarily as a result of a 4.5% decrease in average assets under       
management and a shift in assets to lower fee cash management products, offset  
by a $1.4 million increase in performance fees. Retail investment advisory and  
services fees for the six months ended June 30, 2001 decreased by $18.6 million 
or 3.8% from the six months ended June 30, 2000 primarily as a result of a      
shift in assets to lower fee cash management products, offset by a $1.5 million 
increase in performance fees.                                                   

Institutional investment management investment advisory and services fees 
for the three months ended June 30, 2001 increased by $59.9 million or 49.8%    
from the three months ended June 30, 2000 due primarily to a 20.3% increase in  
average assets under management and brokerage transaction charges of $6.5       
million from                                                                    

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certain institutional investment management client transactions, primarily as a 
result of the Bernstein acquisition and an increase in performance fees of $6.7 
million. Institutional investment management investment advisory and services   
fees for the six months ended June 30, 2001 increased by $106.8 million or      
43.9% from the six months ended June 30, 2000 due primarily to a 22.1% increase 
in average assets under management and brokerage transaction charges of $13.7   
million from certain institutional investment management client transactions,   
primarily as a result of the Bernstein acquisition and an increase in           
performance fees of $3.0 million.                                               

Private client investment advisory and services fees for the three months 
ended June 30, 2001 increased $86.4 million or 1,016.5% from the three months   
ended June 30, 2000 due primarily to a 618.9% increase in average assets under  
management and brokerage transaction charges of $21.8 million, primarily as a   
result of the Bernstein acquisition. Private client investment advisory and     
service fees for the six months ended June 30, 2001 increased $164.6 million or 
957.0% from the six months ended June 30, 2000 due primarily to a 609.4%        
increase in average assets under management and brokerage transaction charges   
of $35.8 million, primarily as a result of the Bernstein acquisition.           

Distribution Revenues                                                       

The operating partnership's subsidiary, Alliance Fund Distributors, Inc., 
"AFD," acts as distributor of the Alliance mutual funds and receives            
distribution plan fees from those funds in reimbursement of distribution        
expenses it incurs. Distribution revenues for the three months and six months   
ended June 30, 2001 decreased 11.1% and 7.9%, respectively, from the three      
months and six months ended June 30, 2000 principally due to lower average      
daily mutual fund assets under management attributable to market depreciation.  

Institutional Research Services                                             

Institutional research services revenue consists of brokerage transaction 
charges and underwriting syndicate revenues related to services provided to     
certain institutional investors by SCB LLC. Brokerage transaction charges       
earned and related expenses are recorded on a trade date basis. Syndicate       
participation and underwriting revenues include gains, losses and fees, net of  
syndicate expenses, arising from securities offerings in which SCB LLC acts as  
an underwriter or agent. Syndicate participation and underwriting revenues are  
recorded on the offering date. Revenues from institutional research services    
for the three months and six months ended June 30, 2001 were $71.2 million and  
$135.6 million, respectively. There were no revenues from institutional         
research services for the three months and six months ended June 30, 2000.      

Shareholder Servicing Fees                                                  

  The operating partnership's subsidiaries, Alliance Global Investor Services,
Inc. and ACM Global Investor Services S.A., provide transfer agency services to 
the Alliance mutual funds. Shareholder servicing fees for the three months and  
six months ended June 30, 2001 increased 13.9% and 15.1%, respectively, from    
the three months and six months ended June 30, 2000 as a result of increases in 
the number of mutual fund shareholder accounts serviced. The number of          
shareholder accounts serviced increased to approximately 7.1 million as of June 
30, 2001 compared to approximately 6.1 million as of June 30, 2000.             

Other Revenues, Net                                                         

Other revenues consist principally of administration and recordkeeping    
services provided to the Alliance mutual funds and the general accounts of The  
Equitable Life Assurance Society of the United States, "Equitable," a           
wholly-owned subsidiary of AXA Financial, Inc., "AXA Financial," and its        
insurance subsidiary. Investment income and changes in value of other           
investments are also included. Subsequent to the Bernstein acquisition, other   
revenues, net also includes net interest income earned on securities loaned to  
and borrowed from brokers and dealers. Other revenues, net for the three months 
and six months ended June 30, 2001 increased from the three and six months      
ended June 30, 2000 principally as a result of net interest income earned on    
securities loaned to and borrowed from brokers and dealers.                     

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Expenses                                                                        

                                                        [Enlarge/Download Table]

                                   Three Months Ended             Six Months Ended           
                                        June 30,                      June 30,               
                                   ------------------- Percentage ---------------  Percentage
                                     2001      2000      change     2001    2000     change  
                                   --------- --------- ---------- -------- ------  ----------
                                                     (Dollars in millions)                   
                                                                                             
Employee compensation and benefits $   227.2 $   131.4     72.9%  $  447.3 $260.1      72.0% 
Promotion and servicing...........     230.9     209.2     10.4      460.0  407.8      12.8  
General and administrative........      79.4      50.2     58.2      155.0   99.0      56.6  
Interest..........................       8.6      10.3    (16.5)      21.1   24.4     (13.5) 
Amortization of intangible assets.      43.1       1.0  4,210.0       86.2    2.0   4,210.0  
Non-recurring item................        --        --      N/A         --  (23.9)   (100.0) 
                                   --------- ---------            -------- ------            
   Total.......................... $   589.2 $   402.1     46.5%  $1,169.6 $769.4      52.0% 
                                   ========= =========            ======== ======            

Employee Compensation and Benefits                                          

In connection with the Bernstein acquisition, all employees of Bernstein  
subsidiaries became employees of the operating partnership effective October 2, 
2000. Employee compensation and benefits include salaries, commissions, fringe  
benefits and incentive compensation based on profitability. Provisions for      
future payments to be made under certain deferred compensation arrangements are 
also included in employee compensation and benefits expense.                    

  Employee compensation and benefits for the three months and six months ended
June 30, 2001 increased 72.9% and 72.0%, respectively, from the three months    
and six months ended June 30, 2000 primarily as a result of increased base      
compensation, incentive compensation and commissions. These increases were      
primarily a result of the Bernstein acquisition and the related increase in the 
number of employees. The operating partnership had 4,435 employees at June 30,  
2001 compared to 2,475 at June 30, 2000.                                        

Promotion and Servicing                                                     

Promotion and servicing expenses include distribution plan payments to    
financial intermediaries for distribution of sponsored mutual funds and cash    
management services' products and amortization of deferred sales commissions    
paid to financial intermediaries for the sale of back-end load shares under the 
operating partnership's mutual fund distribution system, the "system." See      
"Capital Resources and Liquidity." Also included in this expense category are   
travel and entertainment, advertising, promotional materials, and investment    
meetings and seminars for financial intermediaries that distribute the          
operating partnership's mutual fund products.                                   

Promotion and servicing expenses for the three months and six months ended
June 30, 2001 increased 10.4% and 12.8%, respectively, from the three months    
and six months ended June 30, 2000 primarily due to increased amortization of   
deferred sales commissions of $4.7 million and $12.3 million, respectively from 
new sales of back-end load shares under the system, see "Capital Resources and  
Liquidity," as well as higher travel and entertainment costs and higher         
promotional expenditures incurred in connection with mutual fund sales          
initiatives.                                                                    

General and Administrative                                                  

General and administrative expenses are costs related to operations,      
including technology, professional fees, occupancy, communications, equipment   
and similar expenses. General and administrative expenses for the three months  
and six months ended June 30, 2001 increased 58.2% and 56.6%, respectively, for 
the three and six months ended June 30, 2000 principally as a result of the     
Bernstein acquisition and related occupancy and technology expenses.            

Interest                                                                    

Interest expense is incurred on the operating partnership's borrowings and
on deferred compensation owed to employees. Interest expense for the three      
months and six months ended June 30, 2001 decreased from the three              

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months and six months ended June 30, 2000 primarily as a result of lower        
interest expense incurred on deferred compensation liabilities offset partially 
by higher debt.                                                                 

Taxes on Income                                                             

 The operating partnership, a private limited partnership, is not subject to
federal or state corporate income taxes. However, the operating partnership is  
subject to the New York City unincorporated business tax. Domestic corporate    
subsidiaries of the operating partnership are subject to federal, state and     
local income taxes, and are generally included in the filing of a consolidated  
federal income tax return; separate state and local income tax returns are      
filed. Foreign corporate subsidiaries are generally subject to taxes in the     
foreign jurisdictions where they operate.                                       

  Income tax expense of $10.3 million for the three months ended June 30, 2001
increased $1.3 million from the three months ended June 30, 2000 primarily as a 
result of a higher pre-tax income and a higher income tax rate for the current  
quarterly period. Income tax expense of $20.0 million for the six months ended  
June 30, 2001 increased $1.1 million from the six months ended June 30, 2000    
primarily as a result of a higher income tax rate for the current year period   
offset by lower pre-tax income.                                                 

Year Ended December 31, 2000 Compared to Year Ended December 31, 1999           

General                                                                         

The operating partnership's revenues are largely dependent on the total   
value and composition of assets under its management. Assets under management   
grew 23.2% to $453.7 billion as of December 31, 2000 primarily as a result of   
the Bernstein acquisition, which added $85.8 billion at October 2, 2000, and    
continuing net sales of Alliance mutual funds, offset by market depreciation.   
Active equity and balanced account assets under management, which comprise      
approximately 63.5% of total assets under management, grew 31.3%. Active fixed  
income account assets under management, which comprise 28.7% of total assets    
under management, increased by 14.7%.                                           

  In 2000, sales of Alliance mutual fund shares grew to $58.1 billion compared
to sales of $47.6 billion in 1999. The increase, principally equity funds sold  
to both U.S. and non-U.S. investors, reduced by an increase in mutual fund      
redemptions, resulted in net Alliance mutual fund sales of $23.0 billion, a     
decrease of 16.1% from $27.4 billion in 1999.                                   

Assets Under Management(1)                                                      

                                                                [Download Table]

                                          Year Ended                 
                                         December 31,                
                                    ---------------------- Percentage
                                       2000        1999      change  
                                    ----------- ---------- ----------
                                    (Dollars in billions)            
                                                                     
Retail.............................      $163.3     $155.2     5.2%  
Institutional investment management       253.6      207.6    22.2   
Private client.....................        36.8        5.5   569.1   
                                    ----------- ----------           
   Total...........................      $453.7     $368.3    23.2%  
                                    =========== ==========           

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Assets Under Management By Investment Orientation(1)                            

                                                                [Download Table]

                                        Year Ended                 
                                       December 31,                
                                   --------------------- Percentage
                                      2000       1999      change  
                                   ---------- ---------- ----------
                                   (Dollars in billions)           
                                                                   
Active equity and balanced--Growth                                 
   Domestic.......................     $166.9     $180.2     (7.4)%
   Global and international.......       30.5       27.9      9.3  
Active equity and balanced--Value                                  
   Domestic.......................       72.6       11.2    548.2  
   Global and international.......       18.3        0.2  9,050.0  
                                   ---------- ----------           
Total active equity and balanced..      288.3      219.5     31.3  
                                   ---------- ----------           
Active fixed income                                                
   Domestic.......................      109.1       97.6     11.8  
   Global and international.......       20.9       15.7     33.1  
Passive                                                            
   Domestic.......................       30.0       29.1      3.1  
   Global and international.......        5.4        6.4    (15.6) 
                                   ---------- ----------           
       Total......................     $453.7     $368.3     23.2% 
                                   ========== ==========           

Average Assets Under Management(1)                                              

                                                                [Download Table]

                                         Year Ended                 
                                        December 31,                
                                    --------------------- Percentage
                                       2000       1999      change  
                                    ---------- ---------- ----------
                                    (Dollars in billions)           
                                                                    
Retail.............................     $167.7     $125.8    33.3%  
Institutional investment management      220.7      184.0    19.9   
Private client.....................       11.5        4.8   139.6   
                                    ---------- ----------           
       Total.......................     $399.9     $314.6    27.1%  
                                    ========== ==========           

Analysis of Assets Under Management(1)                                          

                                                                [Download Table]

                                               Institutional                
                                                Investment   Private        
                                       Retail   Management   Client  Total  
                                       ------  ------------- ------- ------ 
                                               (Dollars in billions)        
                                                                            
Balance at January 1, 2000............ $155.2     $207.6      $ 5.5  $368.3 
                                       ------     ------      -----  ------ 
Bernstein acquisition.................     --       55.0       30.8    85.8 
Sales/new accounts....................   56.0       18.8        1.5    76.3 
Redemptions/terminations..............  (32.9)     (11.5)      (1.9)  (46.3)
Net cash management sales.............    2.9        2.9         --     5.8 
Cash flow.............................   (0.6)      (6.0)      (0.5)   (7.1)
Net market appreciation (depreciation)  (17.3)     (13.2)       1.4   (29.1)
                                       ------     ------      -----  ------ 
Net change............................    8.1       46.0       31.3    85.4 
                                       ------     ------      -----  ------ 
Balance at December 31, 2000.......... $163.3     $253.6      $36.8  $453.7 
                                       ======     ======      =====  ====== 

--------                                                                        
(1)Excludes certain non-discretionary relationships. Includes 100% of assets    
under management by unconsolidated affiliates as follows: $2.7 billion    
  retail assets and $1.1 billion institutional investment management assets at
December 31, 2000 and $2.2 billion retail assets and $0.6 billion         
institutional investment management assets at December 31, 1999.          

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Assets under management at December 31, 2000 were $453.7 billion, an      
increase of $85.4 billion or 23.2% from December 31, 1999. Retail assets under  
management at December 31, 2000 were $163.3 billion, an increase of $8.1        
billion or 5.2% from December 31, 1999. This increase was due principally to    
net sales of $23.1 billion and net cash management sales of $2.9 billion,       
offset by market depreciation of $17.3 billion and net negative cash flows of   
$0.6 billion. Institutional investment management assets under management at    
December 31, 2000 were $253.6 billion, an increase of $46.0 billion or 22.2%    
from December 31, 1999. This increase was due to the Bernstein acquisition      
which added $55.0 billion, net sales and new accounts of $7.3 billion and net   
institutional cash management sales of $2.9 billion, offset by net negative     
cash flows of $6.0 billion and market depreciation of $13.2 billion. Private    
client assets under management at December 31, 2000 were $36.8 billion, an      
increase of $31.3 billion from December 31, 1999. This increase was due         
principally to the Bernstein acquisition which added $30.8 billion and market   
appreciation of $1.4 billion, offset by net redemptions and account             
terminations of $0.4 billion and net negative cash flows of $0.5 billion.       

Cursitor Alliance LLC, "Cursitor Alliance," a subsidiary of the operating 
partnership formed in connection with a 1996 acquisition, provides global asset 
allocation services to U.S. and non-U.S. institutional investors. Due to poor   
relative investment performance, Cursitor Alliance continues to experience      
client account terminations and asset withdrawals. Cursitor Alliance's assets   
under management aggregated $0.8 billion, $1.3 billion and $1.7 billion at      
December 31, 2000, 1999, and 1998, respectively. Cursitor Holdings, L.P.,       
"CHLP," exercised its option to require the operating partnership to purchase   
its minority interest in Cursitor Alliance for $10.0 million. During the fourth 
quarter of 2000, management of the operating partnership determined that the    
remaining value of the intangible assets recorded in connection with this       
acquisition was impaired and wrote-off the remaining balance, resulting in a    
charge of $16.6 million.                                                        

Consolidated Results of Operations                                              

 The following is a discussion of the results of operations for 2000 for the
operating partnership compared to the 1999 combined results of operations of    
the operating partnership and, prior to the reorganization, Alliance Holding.   
The combined presentation is considered meaningful in understanding the         
diversified investment management business operated by Alliance Holding prior   
to the reorganization and by the operating partnership thereafter. All          
information prior to the reorganization is that of Alliance Holding.            

  Net income for 2000 increased $207.1 million or 44.9% to $668.7 million from
net income of $461.6 million for 1999. Diluted net income per unit for 2000     
increased $0.61 or 23.6% to $3.20 from diluted net income per unit of $2.59 for 
1999. The increase was principally due to an increase in investment advisory    
and services fees, resulting from higher average assets under management, due   
principally to the Bernstein acquisition, which was offset partially by higher  
operating expenses, principally employee compensation and benefits, promotion   
and servicing, and general and administrative expenses.                         

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Revenues(1)                                                                     

                                                                [Download Table]

                                        Year Ended December 31,           
                                        ----------------------- Percentage
                                           2000        1999       change  
                                        ----------- ----------- ----------
                                         (Dollars in millions)            
                                                                          
Investment advisory and services fees:                                    
   Retail..............................    $  999.5    $  788.6    26.7%  
   Institutional investment management.       537.0       417.5    28.6   
   Private client......................       153.4       125.6    22.1   
                                        ----------- -----------           
       Subtotal........................     1,689.9     1,331.7    26.9   
                                        ----------- -----------           
Distribution revenues..................       621.6       441.8    40.7   
Institutional research services........        56.3          --     N/A   
Shareholder servicing fees.............        85.6        62.3    37.4   
Other revenues, net....................        68.7        33.5   105.1   
                                        ----------- -----------           
       Total...........................    $2,522.1    $1,869.3    34.9%  
                                        =========== ===========           

--------                                                                        
(1)Reflect revenues of the business of Bernstein from the date of the October   
2, 2000 acquisition, revenues of Alliance Holding prior to the            
reorganization and revenues of the operating partnership thereafter.      

Investment Advisory and Service Fees                                        

Investment advisory and services fees, the largest component of the       
operating partnership's revenues, are generally calculated as a small           
percentage of the value of assets under management and vary with the type of    
account managed. Fee income is therefore affected by changes in the amount of   
assets under management, including 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, and shifts of assets 
between accounts or products with different fee structures. The operating       
partnership's investment advisory and services fees increased 26.9% and 39.7%   
in 2000 and 1999, respectively.                                                 

Certain investment advisory contracts provide for a performance fee, in   
addition to or in lieu of a base fee, that is calculated either as a percentage 
of absolute investment results or a percentage of investment results in excess  
of a stated benchmark over a specified period of time. Performance fees are     
recorded as revenue at the end of the measurement period and will generally be  
higher in favorable markets and lower in unfavorable markets, which may         
increase the volatility of the operating partnership's revenues and earnings.   
Performance fees aggregated $72.5 million and $162.2 million in 2000 and 1999,  
respectively. Lower performance fees in 2000 were primarily the result of a     
decline in absolute returns in certain hedge funds investing in growth and      
technology stocks.                                                              

 Retail investment advisory and services fees increased by $210.9 million or
26.7% for 2000, primarily as a result of a 33.3% increase in average assets     
under management, offset by a $43.3 million decrease in performance fees.       

Institutional investment management investment advisory and services fees 
increased by $119.5 million or 28.6% for 2000, due primarily to a 19.9%         
increase in average assets under management and an increase in performance fees 
of $50.8 million, primarily from the Bernstein acquisition.                     

Private client investment advisory and services fees increased by $27.8   
million or 22.1% for 2000, primarily as a result of a 139.6% increase in        
average assets under management, primarily from the Bernstein acquisition,      
offset by a $97.2 million decrease in performance fees.                         

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Institutional Research Services                                             

Institutional research services revenue consists of brokerage transaction 
charges and underwriting syndicate revenues related to services provided to     
institutional investors by SCB LLC, a wholly owned subsidiary of the operating  
partnership. Brokerage transaction charges earned and related expenses are      
recorded on a trade date basis. Syndicate participation and underwriting        
revenues include gains, losses and fees, net of syndicate expenses, arising     
from securities offerings in which SCB LLC acts as an underwriter or agent.     
Syndicate participation and underwriting revenues are recorded on the offering  
date. Revenues from institutional research services were $56.3 million for      
fourth quarter 2000.                                                            

Distribution Revenues                                                       

The operating partnership's subsidiary, AFD, acts as distributor of the   
Alliance mutual funds and receives distribution plan fees from those funds in   
reimbursement of distribution expenses it incurs. Distribution revenues         
increased 40.7% in 2000, principally due to higher average mutual fund assets   
under management attributable to sales of back-end load shares under the        
operating partnership's mutual fund distribution system, the system, described  
under "Capital Resources and Liquidity."                                        

Shareholder Servicing Fees                                                  

  The operating partnership's subsidiaries, Alliance Global Investor Services,
Inc. and ACM Global Investor Services S.A., provide transfer agency services to 
the Alliance mutual funds. Shareholder servicing fees increased 37.4% in 2000,  
the result of increases in the number of mutual fund shareholder accounts       
serviced. The number of shareholder accounts serviced increased to              
approximately 6.5 million as of December 31, 2000, compared to approximately    
5.4 million as of December 31, 1999.                                            

Other Revenues, Net                                                         

 Other revenues, net consist principally of administration and recordkeeping
services provided to the Alliance mutual funds and the general accounts of      
Equitable, a wholly owned subsidiary of AXA Financial, and its insurance        
company subsidiary. Investment income and changes in value of other investments 
are also included. Subsequent to the Bernstein acquisition, other revenues, net 
also includes net interest income earned on securities loaned to and borrowed   
from brokers and dealers. Other revenues, net increased for 2000 primarily as a 
result of higher interest income, including $29.8 million in interest earned on 
the proceeds from AXA Financial's purchase of 32,619,775 newly issued operating 
partnership units on June 21, 2000.                                             

Expenses(1)                                                                     

                                                                [Download Table]

                                         Year Ended                 
                                        December 31,                
                                   ---------------------- Percentage
                                      2000        1999      change  
                                   ----------  ---------- ----------
                                   (Dollars in millions)            
                                                                    
Employee compensation and benefits   $  651.9    $  508.6     28.2% 
Promotion and servicing...........      844.4       620.6     36.1  
General and administrative........      226.7       184.8     22.7  
Interest..........................       44.2        22.6     95.6  
Amortization of intangible assets.       46.3         3.9  1,087.2  
Non-recurring items, net..........       (0.8)         --      N/A  
                                   ----------  ----------           
   Total..........................   $1,812.7    $1,340.5     35.2% 
                                   ==========  ==========           

--------                                                                        
(1)Reflect expenses of the business of Bernstein from the date of the October   
2, 2000 acquisition, expenses of Alliance Holding prior to the            
reorganization and expenses of the operating partnership thereafter.      

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Employee Compensation and Benefits                                          

In connection with the reorganization, all employees of Alliance Holding  
became employees of the operating partnership effective October 29, 1999. In    
connection with the Bernstein acquisition, all employees of Bernstein           
subsidiaries became employees of the operating partnership effective October 2, 
2000. Employee compensation and benefits, which represent approximately 36.0%   
of total expenses in 2000, include salaries, commissions, fringe benefits and   
incentive compensation based on profitability. Provisions for future payments   
to be made under certain deferred compensation arrangements are also included   
in employee compensation and benefits expense.                                  

Employee compensation and benefits increased 28.2% in 2000, primarily as a
result of higher incentive compensation due to increased operating earnings and 
increased base compensation and commissions. Incentive compensation increased   
in 2000 due to higher operating earnings and costs associated with a new        
deferred compensation plan adopted in connection with the Bernstein             
acquisition, offset in part by lower incentive compensation resulting from      
lower performance fees. Base compensation increased principally due to an       
increase in the number of employees due to the Bernstein acquisition and in     
support of Alliance's growing mutual fund operations combined with salary       
increases. The operating partnership had 4,438 employees at December 31, 2000   
compared to 2,396 in 1999. Commissions increased primarily due to the Bernstein 
acquisition.                                                                    

Promotion and Servicing                                                     

Promotion and servicing expenses, which represent approximately 46.6% of  
total expenses in 2000, include distribution plan payments to financial         
intermediaries for distribution of sponsored mutual funds and cash management   
services' products and amortization of deferred sales commissions paid to       
financial intermediaries for the sale of back-end load shares under the system. 
Also included in this expense category are travel and entertainment,            
advertising, promotional materials, and investment meetings and seminars for    
financial intermediaries that distribute the operating partnership's mutual     
fund products.                                                                  

Promotion and servicing expenses increased 36.1% in 2000, primarily due to
increased distribution plan payments resulting from higher average domestic,    
offshore and cash management assets under management. An increase in            
amortization of deferred sales commissions of $55.7 million for 2000 as a       
result of sales of back-end load shares also contributed to the increase in     
promotion and servicing expense. Other promotion and servicing expenses         
increased for 2000 primarily as a result of higher travel and entertainment     
costs and higher promotional expenditures incurred in connection with mutual    
fund sales initiatives.                                                         

General and Administrative                                                  

 General and administrative expenses, which represent approximately 12.5% of
total expenses in 2000, are costs related to operations, including technology,  
professional fees, occupancy, communications, equipment and similar expenses.   
General and administrative expenses increased 22.7% in 2000, due principally to 
increased occupancy and other costs related to the Bernstein acquisition and    
higher technology expenses incurred in connection with the Year 2000 project    
and other technology initiatives such as the Euro conversion.                   

Interest                                                                    

Interest expense is incurred on the operating partnership's borrowings and
on deferred compensation owed to employees. Interest expense increased for      
2000, primarily as a result of higher debt and an increase in interest accrued  
on deferred compensation liabilities.                                           

Amortization of Intangible Assets                                           

Amortization of intangible assets is attributable to the intangible assets
recorded in connection with the acquisitions made by the operating partnership, 
including the Bernstein acquisition on October 2, 2000, and the                 

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acquisition of ACMC, Inc., the predecessor of both Alliance Holding and the     
operating partnership, by ELAS during 1985. Amortization of intangibles         
increased for 2000 principally due to the Bernstein acquisition.                

Taxes on Income                                                             

 The operating partnership, a private limited partnership, is not subject to
federal or state corporate income taxes. However, the operating partnership is  
subject to the New York City unincorporated business tax. Domestic corporate    
subsidiaries of the operating partnership are subject to federal, state and     
local income taxes, and are generally included in the filing of a consolidated  
federal income tax return; separate state and local income tax returns are      
filed. Foreign corporate subsidiaries are generally subject to taxes in the     
foreign jurisdictions where they are located.                                   

 Income tax expense of $40.6 million in 2000 decreased by $26.6 million from
1999 primarily as a result of a lower effective tax rate due to the             
reorganization.                                                                 

Capital Resources and Liquidity                                                 

 Partners' capital of the operating partnership was $4,054.9 million at June
30, 2001, a decrease of $19.5 million or 0.5% from $4,074.4 million at March    
31, 2001 and a decrease of $78.8 million or 1.9% from $4,133.7 million at       
December 31, 2000. The decrease is primarily due to cash distributions in       
respect of the operating partnership's available cash flow under the Alliance   
Capital partnership agreement for the fourth quarter of 2000 and first quarter  
of 2001 paid in the first and second quarters of 2001.                          

Partners' capital of the operating partnership was $4,133.7 million at    
December 31, 2000, an increase of $3,581.0 million or 647.9% from partners'     
capital at December 31, 1999. On October 2, 2000, the operating partnership     
completed the Bernstein acquisition for $1,475.4 million in cash and 40.8       
million newly issued operating partnership units. On June 21, 2000, AXA         
Financial purchased from the operating partnership 32,619,775 newly issued      
operating partnership units for $1.6 billion and the operating partnership used 
the proceeds primarily to finance the cash portion of the Bernstein             
acquisition.                                                                    

Cash flow from operations, proceeds from borrowings and proceeds from the 
issuance of operating partnership units to AXA Financial and its subsidiaries   
have been the operating partnership's and, prior to the reorganization,         
Alliance Holding's principal sources of working capital.                        

  The operating partnership's cash and cash equivalents decreased $4.7 million
for the six months ended June 30, 2001. Cash inflows for the first six months   
of 2001 included $575.6 million from operations and net proceeds from sales of  
investments of $47.1 million. Cash outflows for the first six months of 2001    
included cash distributions of $402.5 million, net repayment of borrowings of   
$183.0 million and capital expenditures of $42.1 million.                       

The operating partnership's cash and cash equivalents increased by $136.1 
million in 2000. Cash inflows included $682.4 million from operations, the sale 
of operating partnership units to AXA Financial for $1,600.0 million, net       
borrowings of $368.4 million and $19.7 million of proceeds from employee        
options exercised for Alliance Holding units. Cash outflows included $1,475.4   
million for the Bernstein acquisition, $633.2 million in distributions to its   
General Partner and unitholders, net purchases of cash and securities for       
$620.7 million, the purchase of Alliance Holding units by subsidiaries of the   
operating partnership for deferred compensation plans of $146.6 million, net    
purchases of investments of $203.7 million and $75.8 million in capital         
expenditures.                                                                   

In connection with a 1996 acquisition, Alliance Holding obtained an option
to purchase the minority interest held by CHLP in Cursitor Alliance, and CHLP   
obtained an option to sell its minority interest to Alliance Holding for cash,  
Alliance Holding units, or a combination thereof with a value of not less than  
$10.0 million or more than $37.0 million, the buyout price. The operating       
partnership assumed all of Alliance Holding's rights and                        

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obligations with respect to CHLP in connection with the reorganization. CHLP    
exercised its option to require the operating partnership to purchase its       
minority interest in Cursitor Alliance for a buyout price of $10.0 million.     

  The system for distributing the Alliance mutual funds includes a multi-class
share structure. The system permits the operating partnership's open-end mutual 
funds to offer investors various options for the purchase of mutual fund        
shares, including the purchase of front-end load shares and back-end load       
shares. The front-end load shares are subject to a conventional front-end sales 
charge paid by investors to AFD at the time of sale. AFD in turn compensates    
the financial intermediaries distributing the funds from the front-end sales    
charge paid by investors. For back-end load shares, investors do not pay a      
front-end sales charge although, if there are redemptions before the expiration 
of the minimum holding period (which ranges from one year to four years),       
investors pay a contingent deferred sales charge, or "CDSC" to AFD. While AFD   
is obligated to compensate the financial intermediaries at the time of the      
purchase of back-end load shares, it receives higher ongoing distribution fees  
from the funds. Payments made to financial intermediaries in connection with    
the sale of back-end load shares under the system, net of CDSC received,        
reduced cash flow from operations by approximately $90.5 million for the six    
months ended June 30, 2001. Management believes AFD will recover the payments   
made to financial intermediaries for the sale of back-end load shares from the  
higher distribution fees and CDSC it receives over periods not exceeding 5 1/2  
years.                                                                          

  During 1998, Alliance Holding increased its commercial paper program to $425
million and entered into a $425 million five-year revolving credit facility     
with a group of commercial banks. Under the credit facility, the interest rate, 
at the option of the borrower, is a floating rate generally based upon a        
defined prime rate, a rate related to the London Interbank Offered Rate (LIBOR) 
or the Federal funds rate. A facility fee is payable on the total facility.     
Borrowings under the credit facility and the commercial paper program may not   
exceed $425 million in the aggregate. In October 1999, Alliance Holding         
reorganized by transferring its business and assets to Alliance Capital, a      
newly formed operating partnership, in exchange for all of the Alliance Capital 
units. In connection with the reorganization, the operating partnership assumed 
Alliance Holding's rights and obligations under the five-year revolving credit  
facility and the commercial paper program. The revolving credit facility will   
be used to provide back-up liquidity for the operating partnership's commercial 
paper program, to fund commission payments to financial intermediaries for the  
sale of back-end load shares under the operating partnership's mutual fund      
distribution system, and for general working capital purposes.                  

During July 1999, Alliance Holding entered into a $200 million three-year 
revolving credit facility with a group of commercial banks. In connection with  
the reorganization, the operating partnership assumed Alliance                  
Holding's rights and obligations under the three-year revolving credit          
facility. The new revolving credit facility, the terms of which are generally   
similar to the $425 million credit facility, will be used to fund commission    
payments to financial intermediaries for the sale of back-end load shares under 
the operating partnership's mutual fund distribution system and for general     
working capital purposes.                                                       

During October 2000, the operating partnership entered into a $250 million
two-year revolving credit facility the terms of which are substantially similar 
to the $425 million and $200 million revolving credit facilities.               

  The revolving credit facilities contain covenants which, among other things,
require the operating partnership to meet certain financial ratios.             

In December 1999, the operating partnership established a $100 million    
extendible commercial notes, or "ECN," program as a supplement to its $425      
million commercial paper program. ECNs are short-term uncommitted debt          
instruments that do not require back-up liquidity support.                      

 In July 2001, the operating partnership filed a registration statement with
the Securities and Exchange Commission, "SEC," to issue up to $600 million of   
senior debt securities. The proceeds will be used for general partnership       
purposes.                                                                       

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  At June 30, 2001, the operating partnership had $405.4 million of commercial
paper and ECNs outstanding, borrowings under the revolving credit facilities of 
$202.0 million and $6.0 million in notes related to an acquisition made in      
1998.                                                                           

  The operating partnership's substantial equity base and access to public and
private debt, at competitive terms, should provide adequate liquidity for its   
general business needs. Management believes that cash flow from operations and  
the issuance of debt and Alliance Capital or Alliance Holding units will        
provide the operating partnership with the financial resources to meet its      
capital requirements for mutual fund sales and its other working capital        
requirements.                                                                   

Commitments and Contingencies                                                   

 The operating partnership's capital commitments, which consist primarily of
operating leases for office space, are generally funded from future operation   
cash flows.                                                                     

Alliance Capital and AFD have been named as defendants in two class action
lawsuits filed in federal district court in the Southern District of Illinois.  
The cases, which also name other companies in the mutual fund industry as       
defendants, concern several of Alliance Capital's mutual funds and allege       
violations of the federal Investment Company Act of 1940, as amended, and       
breaches of common law fiduciary duty. Alliance Capital and AFD believe that    
the plaintiffs' allegations are without merit and intend to vigorously defend   
against these allegations. At the present time, management of Alliance Capital  
and AFD are unable to estimate the impact, if any, that the outcome of these    
actions may have on Alliance Capital's results of operations or financial       
condition. For a more complete discussion of the allegations in these lawsuits, 
see "Business--Legal Proceedings."                                              

In addition, Alliance Capital is involved in various other inquiries,     
administrative proceedings and litigation, some of which allege substantial     
damages. While any proceeding or litigation has the element of uncertainty,     
Alliance Capital believes that the outcome of any one of these other lawsuits   
or claims that is pending or threatened, or all of them combined, will not have 
a material adverse effect on Alliance Capital's results of operations or        
financial condition.                                                            

Changes in Accounting Principles                                                

In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133 ("SFAS 133"), "Accounting for Derivative 
Instruments and Hedging Activities." Management adopted this statement on       
January 1, 2001, and the adoption did not have a material effect on the         
operating partnership's results of operations, liquidity, or capital resources. 

In July 2001, the Financial Standards Board issued Statement of Financial 
Accounting Standards No. 141, ("SFAS 141") "Business Combinations" and          
Statement of Financial Accounting Standards No. 142, ("SFAS 142") "Goodwill and 
Other Intangible Assets." Under the SFAS 141, which has been adopted by the     
operating partnership, the purchase method of accounting is required to be used 
for all business combinations initiated after June 30, 2001. The adoption of    
SFAS 141 did not impact materially the operating partnership's results of       
operations, liquidity, or capital resources.                                    

 SFAS 142 changes the accounting for goodwill from an amortization method to
an impairment approach. Thus, amortization of goodwill, including goodwill      
recorded in past business combinations, will cease upon adoption of that        
statement. However, SFAS requires that goodwill be tested periodically for      
impairment. Management intends to adopt SFAS 142 on January 1, 2002. The impact 
of the adoption of SFAS 142 on the operating partnership's results of           
operations, liquidity, or capital resources has not been determined.            

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Cash Distributions                                                              

The operating partnership is required to distribute all of its available  
cash flow under the Alliance Capital partnership agreement to its general       
partner and Alliance Capital unitholders. The available cash flow of the        
operating partnership for the three months and six months ended June 30, 2001   
and 2000 were as follows:                                                       

                                                                [Download Table]

                                   Three Months Ended Six Months Ended 
                                        June 30,          June 30,     
                                   ------------------ -----------------
                                     2001      2000     2001     2000  
                                   --------  -------- -------- --------
                                                                       
Available cash flow (in thousands) $195,326  $146,294 $382,957 $288,467
Distribution per unit............. $   0.78  $  0.820 $   1.53 $  1.635

The above discussion and analysis for the six-month period ended June 30, 
2001 and the year ended December 31, 2000 should be read in conjunction with    
Management's Discussion and Analysis of Financial Condition and Results of      
Operations in each of our Quarterly Report on Form 10-Q for the period ended    
June 30, 2001 and our Annual Report on Form 10-K for the year ended December    
31, 2000.                                                                       

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BUSINESS  
General                                                                         

Overview                                                                    

Alliance Capital Management Holding L.P., which we refer to as Alliance   
Holding, was formed in 1987 to succeed to the business of ACMC Inc., a          
wholly-owned subsidiary of The Equitable Life Assurance Society of the United   
States, or "Equitable," which began providing investment management services in 
1971. On April 21, 1988 the business and substantially all of the operating     
assets of ACMC, Inc. were conveyed to Alliance Holding in exchange for a 1%     
general partnership interest in Alliance Holding and approximately 55% of the   
outstanding Alliance Holding units. In December 1991, ACMC, Inc. transferred    
its 1% general partnership interest in Alliance Holding to Alliance Capital     
Management Corporation.                                                         

On February 19, 1998, Alliance Holding declared a two for one Alliance    
Holding unit split payable to Alliance Holding unitholders of record on March   
11, 1998. No adjustments have been made to the number of Alliance Holding units 
outstanding or per Alliance Holding unit amounts prior to March 11, 1998,       
except as noted in the footnotes to the section titled "Selected Consolidated   
Financial and Other Data."                                                      

In October 1999, Alliance Holding reorganized by transferring its business
and assets to Alliance Capital, a newly formed operating partnership, in        
exchange for all of the Alliance Capital units, the "reorganization." Since the 
date of the reorganization, Alliance Capital has conducted the diversified      
investment management services business formerly conducted by Alliance Holding, 
and Alliance Holding's business has consisted of holding Alliance Capital units 
and engaging in related activities. As part of the reorganization, Alliance     
Holding offered each Alliance Holding unitholder the opportunity to exchange    
Alliance Holding units for Alliance Capital units on a one-for-one basis. As of 
March 31, 2001, Alliance Holding held approximately 29.8% of the outstanding    
Alliance Capital units. The Alliance Holding units trade publicly on the NYSE   
while the Alliance Capital units do not trade publicly and are subject to       
significant restrictions on transfer. Alliance Capital Management Corporation   
is the general partner of both Alliance Capital and Alliance Holding.           

  On October 2, 2000, Alliance Capital acquired the business and assets of SCB
Inc., formerly known as Sanford C. Bernstein Inc., which we refer to as         
"Bernstein," and assumed the liabilities of the Bernstein business, the         
"Bernstein acquisition." The purchase price consisted of a cash payment of      
$1.4754 billion and 40.8 million newly issued Alliance Capital units. AXA       
Financial purchased approximately 32.6 million newly issued Alliance Capital    
units for $1.6 billion on June 21, 2000 to fund the cash portion of the         
purchase price.                                                                 

 As of March 31, 2001, AXA, its wholly-owned subsidiaries, AXA Financial and
Equitable and some subsidiaries of Equitable (other than Alliance Capital and   
its subsidiaries) were the beneficial owners of 128,475,720 Alliance Capital    
units or approximately 53% of the issued and outstanding Alliance Capital units 
and 1,544,356 Alliance Holding units or approximately 2% of the issued and      
outstanding Alliance Holding units. As of March 31, 2001, SCB Partners Inc., a  
wholly-owned subsidiary of SCB Inc., was the owner of 40.8 million Alliance     
Capital units or approximately 16% of the issued and outstanding Alliance       
Capital units.                                                                  

As of March 31, 2001 AXA and its subsidiaries owned all of the issued and 
outstanding shares of the common stock of AXA Financial. AXA Financial owns all 
of the issued and outstanding shares of Equitable. For insurance regulatory     
purposes all shares of common stock of AXA Financial beneficially owned by AXA  
and its affiliates have been deposited into a voting trust.                     

 AXA, a French company, is the holding company for an international group of
insurance and related financial services companies. AXA's insurance operations  
include activities in life insurance, property and casualty insurance and       
reinsurance. The insurance operations are diverse geographically with           
activities principally in Western Europe, North America, the Asia/Pacific area, 
and, to a lesser extent, in Africa and South America. AXA is also engaged in    
asset management, real estate and other financial services activities           
principally in the United States, as well as in Western Europe and the          
Asia/Pacific area.                                                              

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Alliance Capital provides diversified investment management and related   
services globally to a broad range of clients including                         

.  institutional investors, consisting of unaffiliated entities such as 
    corporate and public employee pension funds, endowment funds, domestic
     and foreign institutions and governments and affiliates such as AXA and
its insurance company subsidiaries, by means of separate accounts,
sub-advisory relationships resulting from the efforts of the      
    institutional marketing department, structured products, group trusts,
    and mutual funds and classes of mutual fund shares sold exclusively to
institutional investors and high net worth individuals,           

.  private clients, consisting of high net worth individuals, trusts and
estates, charitable foundations, partnerships, private and family 
   corporations and other entities, by means of separate accounts, hedge
funds, and certain other vehicles,                                

.  individual investors by means of retail mutual funds sponsored by    
Alliance Capital, its subsidiaries and affiliated joint venture   
     companies including cash management products such as money market funds
      and deposit accounts and sub-advisory relationships in respect of mutual
funds sponsored by third parties resulting from the efforts of the
  mutual fund marketing department, "Alliance mutual funds" and "wrap"
products, and                                                     

.  institutional investors by means of in-depth research, portfolio     
strategy, trading and brokerage-related services.                 

Alliance Capital and its subsidiaries provide investment management,      
distribution and shareholder and administrative services to the Alliance mutual 
funds.                                                                          

  Alliance Capital provides a broad offering of investment products, global in
scope, with expertise in both growth and value oriented strategies, the two     
predominant equity investment styles, coupled with a fixed income capability in 
both taxable and tax exempt securities.                                         

Alliance Capital's investment management and research effort, which as of 
December 31, 2000, comprised over 600 investment professionals, is one of the   
largest and most respected in the investment management industry. A central     
component of the investment management and research effort is the investment    
research process, which as of December 31, 2000, was supported by 292 analysts. 

Alliance Capital offers two distinct equity investment management styles  
supported as of December 31, 2000 by over 440 investment professionals,         
consisting of two separate equity management and research groups: one dedicated 
to growth investing, the other to value investing. Alliance Capital also offers 
the two styles used in combination.                                             

Since the Bernstein acquisition, Alliance Capital has combined the fixed  
income groups into a single investment management unit with a global market     
presence. As of December 31, 2000, the fixed income group numbered 135          
professionals. Alliance Capital offers a full array of risk/return fixed income 
products--from money market funds to high yield portfolios. Our research group  
is one of the most formidable teams in an expanding global market for fixed     
income products, and as of December 31, 2000, it had 59 research professionals. 

Institutional Investment Management Services                                    

Alliance Capital's institutional investment management services consist   
primarily of the active management of equity accounts, balanced accounts        
(equity and fixed income) and fixed income accounts for institutions such as    
corporate and public employee pension funds, endowment funds, domestic and      
foreign institutions, governments and affiliates (AXA and certain of its        
insurance company subsidiaries, including Equitable) by means of separate       
accounts, sub-advisory relationships resulting from the efforts of the          
institutional marketing group, structured products, group trusts and mutual     
funds and classes of mutual fund shares sold exclusively to institutional       
investors and high net worth individuals. As of December 31, 2000, the assets   
of institutional investors were managed by 221 portfolio managers with an       
average of 14 years of experience in the industry and 9 years of experience     
with Alliance Capital.                                                          

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 As of December 31, 1998, 1999 and 2000, institutional investment management
services represented approximately 61%, 56% and 56%, respectively, of total     
assets under management by Alliance Capital. The fees earned from these         
institutional investment management services represented approximately 28%, 22% 
and 21% of Alliance Capital's revenues for 1998, 1999 and 2000, respectively.   

Equity and Balanced Accounts. Institutional equity and balanced accounts  
contributed approximately 19%, 16% and 16% of Alliance Capital's total revenues 
for 1998, 1999 and 2000, respectively. Assets under management relating to      
active equity and balanced accounts grew from approximately $42.2 billion as of 
December 31, 1995 to approximately $152.9 billion as of December 31, 2000.      

Fixed Income Accounts. Institutional fixed income accounts contributed    
approximately 8%, 6% and 5% of Alliance Capital's total revenues for 1998, 1999 
and 2000, respectively. Assets under management relating to active fixed income 
accounts increased from approximately $35.7 billion as of December 31, 1995 to  
approximately $68.7 billion as of December 31, 2000.                            

Clients                                                                     

The approximately 3,006 separately managed accounts for institutional     
investors for which Alliance Capital acts as investment manager include         
corporate employee benefit plans, public employee retirement systems, AXA and   
its insurance company subsidiaries, endowments, foundations, foreign            
governments, multi-employer pension plans and financial and other institutions. 

As of December 31, 2000, AXA and the general and separate accounts of     
Equitable and its insurance company subsidiary, including investments made by   
these accounts in EQ Advisors Trust, discussed below in "--Retail               
Services--Variable Products," represented approximately 22%, 20% and 15% of     
total assets under management by Alliance Capital at December 31, 1998, 1999    
and 2000, respectively, and approximately 11%, 8% and 6% of Alliance Capital's  
total revenues for 1998, 1999 and 2000, respectively. Taken as a whole they     
comprise Alliance Capital's largest institutional client.                       

As of December 31, 2000, corporate employee benefit plan accounts         
represented approximately 13% of total assets under management by Alliance      
Capital. Assets under management for other tax-exempt accounts, including       
public employee benefit funds organized by government agencies and              
municipalities, endowments, foundations and multi-employer employee benefit     
plans, represented approximately 34% of total assets under management as of     
December 31, 2000.                                                              

The following table lists Alliance Capital's ten largest institutional    
clients, ranked in order of size of total assets under management as of         
December 31, 2000. Since Alliance Capital's fee schedules vary based on the     
type of account, the table does not reflect the ten largest revenue generating  
clients.                                                                        

                                                        [Enlarge/Download Table]

        Client or sponsoring employer                          Type of account                  
        -----------------------------                          ---------------                  
                                                                                                
AXA and its subsidiaries (including Equitable U.S. equity, fixed income, passive, global equity,
  and its insurance company subsidiary)...... global fixed income                               
North Carolina Retirement System............. Passive equity, U.S. equity, global equity        
Foreign Government Central Bank.............. U.S. equity, global equity, fixed income, global  
                                              fixed income                                      
State Board of Administration of Florida..... Equity, fixed income                              
SunAmerica................................... U.S. equity, global equity                        
Sub-Advised Mutual Fund...................... U.S. equity                                       
New York State Common Retirement                                                                
  System..................................... Equity                                            
Frank Russell Trust Company.................. U.S. equity, global equity                        
SEI Investments.............................. Equity                                            
Foreign Government Central Bank.............. U.S. fixed income, global fixed income,           
                                              U.S. equity, global equity, Asian equity          

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These institutional clients accounted for approximately 18% of Alliance   
Capital's total assets under management at December 31, 2000 and approximately  
8% of Alliance Capital's total revenues for the year ended December 31, 2000    
(25% and 11%, respectively, if the investments by the separate accounts of      
Equitable in EQ Advisors Trust were included). No single institutional client   
other than Equitable and its insurance company subsidiary accounted for more    
than approximately 1% of Alliance Capital's total revenues for the year ended   
December 31, 2000. AXA and the general and separate accounts of Equitable and   
their subsidiaries accounted for approximately 7% of Alliance Capital's total   
assets under management at December 31, 2000 and approximately 2% of Alliance   
Capital's total revenues for the year ended December 31, 2000 (15% and 6%       
respectively, if the investments by the separate accounts of Equitable in EQ    
Advisors Trust were included).                                                  

  Since its inception, Alliance Capital has experienced periods when it gained
significant numbers of new accounts or amounts of assets under management and   
periods when it lost significant accounts or assets under management. These     
fluctuations result from, among other things, the relative attractiveness of    
Alliance Capital's investment style or level of investment performance under    
prevailing market conditions, changes in the investment patterns of clients     
that result in a shift in assets under management and other circumstances such  
as changes in the management or control of a client.                            

Institutional Investment Management Agreements and Fees                     

  Alliance Capital's accounts for institutional investors are managed pursuant
to a written investment management agreement between the client and Alliance    
Capital, which usually is terminable at any time or upon relatively short       
notice by either party. In general, Alliance Capital's contracts may not be     
assigned without the consent of the client.                                     

In providing investment management services to institutional clients,     
Alliance Capital is principally compensated on the basis of fees calculated as  
a percentage of assets under management. Fees are generally billed quarterly    
and are calculated on the value of an account at the beginning or end of a      
quarter or on the average of such values during the quarter. As a result,       
fluctuations in the amount or value of assets under management are reflected in 
revenues from management fees within two calendar quarters.                     

Management fees paid on equity and balanced accounts are generally charged
in accordance with a fee schedule based on a percentage of assets under         
management. Fees for the management of fixed income portfolios generally are    
charged in accordance with lower fee schedules, while fees for passive equity   
portfolios typically are even lower. With respect to approximately 7% of assets 
under management for institutional investors as of December 31, 2000, Alliance  
Capital charges performance based fees, which consist of a relatively low base  
fee plus an additional fee if investment performance for the account exceeds    
certain benchmarks. No assurance can be given that such fee arrangements will   
not become more common in the investment management industry. Utilization of    
such fee arrangements by Alliance Capital on a broader basis could create       
greater fluctuations in Alliance Capital's revenues.                            

 In connection with the investment advisory services provided to the general
and separate accounts of Equitable and its insurance company subsidiary         
Alliance Capital provides ancillary accounting, valuation, reporting, treasury  
and other services. Equitable and its insurance company subsidiary compensate   
Alliance Capital for such services.                                             

Marketing                                                                   

Alliance Capital's institutional products are marketed by specialists who 
solicit business for the entire range of Alliance Capital's institutional       
account management services. Alliance Capital's institutional marketing         
structure supports its commitment to provide comprehensive and timely client    
service. A client service representative is assigned to each institutional      
account. This individual is available to meet with the client as often as       
necessary and attends client meetings with the portfolio manager.               

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Private Client Services                                                         

 Alliance Capital provides investment management services to private clients
consisting of high net worth individuals, trusts and estates, charitable        
foundations, partnerships, private and family corporations and other similar    
entities by means of separate accounts, hedge funds and certain other vehicles. 
Private clients were a core client group of Bernstein for over 30 years prior   
to the Bernstein acquisition. The former private client services group of       
Bernstein is now known as the Bernstein investment research and management unit 
of Alliance Capital, "BIRM." BIRM targets households with financial assets of   
$1 million or more and has a minimum account size of $400,000. BIRM's services  
consist of customized, tax-sensitive investment planning across a broad range   
of investment options.                                                          

BIRM's private client activities are built on a direct sales effort that  
involves over 120 advisors. These financial advisors work with private clients  
and their tax, legal and other advisors to tailor long-range investment plans   
to meet each client's needs. The portfolio created for each private client is   
intended to maximize after-tax investment returns given a client's individual   
investment goals, income requirements, risk tolerance, tax considerations and   
any other consideration relevant for that client.                               

Revenues from private clients, which represented 46% of Bernstein's total 
revenues for the year ended December 31, 1999 and 6% of Alliance Capital's      
total revenues for the year ended December 31, 2000, consist primarily of       
investment management fees earned from managing assets and, in the case of      
clients of BIRM, also include transaction charges earned by executing trading   
activities relating to U.S. equities under management for its clients. Fees for 
the management of hedge funds are higher than the fees charged for equity and   
balanced accounts and also provide for the payment of performance fees or       
carried interests to Alliance Capital.                                          

Private Client Marketing                                                    

BIRM's private client financial advisors are dedicated to obtaining and   
maintaining client relationships. They do not manage money and do not sell      
individual stocks or external products. Their goal is to provide investment     
perspective for clients in order to assist them in determining a suitable mix   
of U.S. and non-U.S. equity securities and fixed income investments. The        
financial advisors are based in New York City, Los Angeles, West Palm Beach,    
Chicago, Dallas, San Francisco, Washington, D.C., White Plains and Seattle.     
These offices reach not only the targeted market within these cities, but also  
the surrounding areas.                                                          

BIRM's private client marketing group also has established an extensive   
nationwide referral-source network, including accountants, attorneys and        
consultants. These professionals serve many of the targeted clients. As part of 
this strategy, meetings for professionals are organized in many cities and      
BIRM's private client marketing group regularly provides them with written      
materials to inform them of investment insights and services.                   

Retail Services                                                                 

Alliance Capital's retail services consist of furnishing investment       
management and related services to individual investors by means of retail      
mutual funds sponsored by Alliance Capital, its subsidiaries and affiliated     
joint venture companies including cash management products such as money market 
funds and deposit accounts and sub-advisory relationships resulting from the    
efforts of our Alliance mutual funds department and our "wrap" products. The    
net assets comprising the Alliance mutual funds on December 31, 2000 amounted   
to approximately $163.3 billion. The assets of the Alliance mutual funds are    
managed by the same investment professionals who manage Alliance Capital's      
accounts of institutional investors and high net-worth individuals.             

Alliance Mutual Funds and Wrap Fee Programs                                 

Alliance Capital has been managing mutual funds since 1971. Since then,   
Alliance Capital has sponsored open-end load mutual funds and closed-end mutual 
funds:                                                                          

.  which are registered as investment companies under the Investment    
Company Act, "U.S. funds," and                                    

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  .  which are not registered under the Investment Company Act and which are
not publicly offered to United States persons, "offshore funds."  

 Alliance Capital also manages retail wrap fee programs, which are sponsored
by various registered broker-dealers referred to as "wrap fee programs." On     
December 31, 2000, net assets in the Alliance mutual funds and wrap fee         
programs totaled approximately $92.6 billion.                                   

Variable Products                                                           

  Alliance Capital is a sub-adviser to EQ Advisors Trust, which is the funding
vehicle for the variable annuity and variable life insurance products offered   
by Equitable and its insurance company subsidiary. The Alliance variable        
products series fund is a funding vehicle for variable annuity and variable     
life insurance products offered by other unaffiliated insurance companies. On   
December 31, 2000, the net assets of the portfolios of the variable products    
totaled approximately $41.2 billion.                                            

Distribution                                                                

The Alliance mutual funds are distributed to individual investors through 
broker-dealers, insurance sales representatives, banks, registered investment   
advisers, financial planners and other financial intermediaries. Alliance Fund  
Distributors, Inc., "AFD," is a registered broker-dealer and a wholly-owned     
subsidiary of Alliance Capital and serves as the principal underwriter and      
distributor of the U.S. funds and serves as a placing or distribution agent for 
most of the offshore funds. As of December 31, 2000, there were 295 sales       
representatives who devoted their time exclusively to promoting the sale of     
shares of Alliance mutual funds by financial intermediaries.                    

Alliance Capital maintains a mutual fund distribution system, the "fund   
distribution system" which permits open-end Alliance mutual funds to offer      
investors various options for the purchase of mutual fund shares, including the 
purchase of front-end load shares and back-end load shares. The front-end load  
shares are subject to a conventional front-end sales charge paid by investors   
to AFD at the time of sale. AFD in turn compensates the financial               
intermediaries distributing the funds from the front-end sales charge paid by   
investors. For back-end load shares, investors do not pay a front-end sales     
charge although, if there are redemptions before the expiration of the minimum  
holding period, which ranges from one year to four years, investors pay a       
contingent deferred sales charge to AFD. While AFD is obligated to compensate   
the financial intermediaries at the time of the purchase of back-end load       
shares, it receives higher ongoing distribution fees from the funds. Payments   
made to financial intermediaries in connection with the sale of back-end load   
shares under the system, net of contingent deferred sales charges received,     
reduced cash flow from operations by approximately $330.6 million and $393.4    
million during 2000 and 1999, respectively. Management of Alliance Capital      
believes AFD will recover the payments made to financial intermediaries for the 
sale of back-end load shares from the higher distribution fees and contingent   
deferred sales charges it receives over periods not exceeding 5 1/2 years.      

The rules of the National Association of Securities Dealers, Inc.         
effectively limit the aggregate of all front-end, deferred and asset-based      
sales charges paid to AFD with respect to any class of its shares by each       
open-end U.S. fund to 6.25% of cumulative gross sales of shares of that class,  
plus interest at the prime rate plus 1% per annum.                              

  The open-end U.S. Funds and offshore funds have entered into agreements with
AFD under which AFD is paid a distribution services fee. Alliance Capital uses  
borrowings and its own resources to finance distribution of open-end Alliance   
mutual fund shares.                                                             

The selling and distribution agreements between AFD and the financial     
intermediaries that distribute Alliance mutual funds are terminable by either   
party upon notice (generally of not more than sixty days) and do not obligate   
the financial intermediary to sell any specific amount of fund shares. A small  
amount of mutual fund sales is made directly by AFD, in which case AFD retains  
the entire sales charge.                                                        

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During 2000, the ten financial intermediaries responsible for the largest 
volume of sales of open-end U.S. funds and Variable Products were responsible   
for 48% of such sales. AXA Advisors, LLC, "AXA Advisors," a wholly-owned        
subsidiary of AXA Financial that utilizes members of Equitable's insurance      
agency sales force as its registered representatives, has entered into a        
selected dealer agreement with AFD and, together with its predecessor, since    
1986 has been responsible for a significant portion of total sales of shares of 
open-end U.S. funds and offshore funds (5%, 4% and 4% in 1998, 1999 and 2000,   
respectively). AXA Advisors is under no obligation to sell a specific amount of 
fund shares and also sells shares of mutual funds sponsored by organizations    
unaffiliated with Equitable.                                                    

  Subsidiaries of Merrill Lynch & Co., Inc., "Merrill Lynch," were responsible
for approximately 26%, 26% and 18% of open-end Alliance mutual fund sales in    
1998, 1999, 2000, respectively. Citigroup Inc. was responsible for              
approximately 6% of open-end Alliance mutual fund sales in 1998, 6% in 1999 and 
5% in 2000. Neither Merrill Lynch nor Citigroup is under any obligation to sell 
a specific amount of Alliance mutual fund shares and each also sells shares of  
mutual funds that it sponsors and which are sponsored by unaffiliated           
organizations.                                                                  

 No dealer or agent other than AXA Advisors, Merrill Lynch and Citigroup has
in any year since 1995 accounted for more than 10% of the sales of open-end     
Alliance mutual funds.                                                          

Many of the financial intermediaries that sell shares of Alliance mutual  
funds also offer shares of funds not managed by Alliance Capital and frequently 
offer shares of funds managed by their own affiliates.                          

  Based on industry sales data reported by the Investment Company Institute in
January 2001, Alliance Capital's market share in the U.S. mutual fund industry  
is 1.44% of total industry assets and Alliance Capital accounted for 1.59% of   
total open-end industry sales in the U.S. during 2000. While the performance of 
the Alliance mutual funds is a factor in the sale of their shares, there are    
other factors contributing to success in sales of mutual fund shares that are   
not as important in institutional investment management services. These factors 
include the level and quality of shareholder services, discussed in             
"Shareholder and Administration Services" below, and the amounts and types of   
distribution assistance and administrative services payments. Alliance Capital  
believes that its compensation programs with financial intermediaries are       
competitive with others in the industry.                                        

Under current interpretations of the Glass-Steagall Act and other laws and
regulations governing depository institutions, banks and certain of their       
affiliates generally are permitted to act as agent for their customers in       
connection with the purchase of mutual fund shares and to receive as            
compensation a portion of the sales charges paid with respect to such           
purchases. During 2000, banks and their affiliates accounted for approximately  
8.5% of the sales of shares of open-end U.S. funds and variable products.       

Investment Management Agreements and Fees                                   

  Investment management fees from the Alliance mutual funds, EQ Advisors Trust
and the variable products are based upon a percentage of average net assets. As 
certain of the U.S. funds have grown, fee schedules have been revised to        
provide lower incremental fees above certain asset levels. Fees paid by the     
U.S. funds and EQ Advisors Trust are fixed annually by negotiation between      
Alliance Capital and the board of directors or trustees of each U.S. fund and   
EQ Advisors Trust, including a majority of the disinterested directors or       
trustees. Changes in fees must be approved by the shareholders of each U.S.     
fund and EQ Advisors Trust. In general, the investment management agreements    
with the U.S. funds and EQ Advisors Trust provide for termination at any time   
upon 60 days' notice.                                                           

Under each investment management agreement with a U.S. fund, Alliance     
Capital provides the U.S. fund with investment management services, office      
space and order placement facilities and pays all compensation of directors or  
trustees and officers of the U.S. fund who are affiliated persons of Alliance   
Capital. Each U.S. fund                                                         

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pays all of its other expenses. If the expenses of a U.S. fund exceed an        
expense limit established under the securities laws of any state in which       
shares of that U.S. fund are qualified for sale or as prescribed in the U.S.    
fund's investment management agreement, Alliance Capital absorbs such excess    
through a reduction in the investment management fee. Currently, Alliance       
Capital believes that California and South Dakota are the only states to impose 
such a limit. The expense ratios for the U.S. funds during their most recent    
fiscal year ranged from 0.65% to 3.22%. In connection with newly organized U.S. 
funds, Alliance Capital may also agree to reduce its fee or bear certain        
expenses to limit expenses during an initial period of operations.              

Cash Management Services                                                    

Alliance Capital provides cash management services to individual investors
through a product line comprising 17 money market fund portfolios, including    
one offshore money market fund domiciled in the Cayman Islands and 3 types of   
brokered money market deposit accounts. Net assets in these products as of      
December 31, 2000 totaled approximately $29.5 billion.                          

Under its investment management agreement with each money market fund,    
Alliance Capital is paid an investment management fee based on a percentage of  
the fund's average net assets. In the case of certain money market funds, the   
fee is payable at lesser rates with respect to average net assets in excess of  
$1.25 billion. For distribution and account maintenance services rendered in    
connection with the sale of money market deposit accounts, Alliance Capital     
receives fees from the participating banks that are based on outstanding        
account balances. Because the money market deposit account programs involve no  
investment management functions to be performed by Alliance Capital, Alliance   
Capital's costs of maintaining the account programs are less, on a relative     
basis, than its costs of managing the money market funds.                       

On December 31, 2000, more than 99% of the assets invested in Alliance    
Capital's cash management programs were attributable to regional broker-dealers 
and other financial intermediaries, with the remainder coming directly from the 
public. On December 31, 2000, more than 500 financial intermediaries offered    
Alliance Capital's cash management services. Alliance Capital's money market    
fund market share (not including deposit products), as computed based on market 
data reported by the Investment Company Institute in December 2000, has         
increased from 1.75% of total money market fund industry assets at the end of   
1995 to 2.04% at December 31, 2000.                                             

  Alliance Capital makes payments to financial intermediaries for distribution
assistance and shareholder servicing and administration. Alliance Capital's     
money market funds pay fees to Alliance Capital at annual rates of up to 0.25%  
of average daily net assets pursuant to Rule 12b-1 distribution plans except    
for Alliance Money Market Fund which pays a fee of up to 0.45% of its average   
daily net assets. These payments are supplemented by Alliance Capital in making 
payments to financial intermediaries under the distribution assistance and      
shareholder servicing and administration program. During 2000, these            
supplemental payments totaled approximately $77.4 million ($66.6 million in     
1999). As of December 31, 2000, there were 7 employees of Alliance Capital who  
devoted their time exclusively to marketing Alliance Capital's cash management  
services.                                                                       

 A principal risk to Alliance Capital's cash management services business is
the acquisition of its participating financial intermediaries by companies that 
are competitors or that plan to enter the cash management services business. As 
of December 31, 2000, the five largest participating financial intermediaries   
were responsible for assets aggregating approximately $29.0 billion, or 76.5%   
of the cash management services total.                                          

Many of the financial intermediaries whose customers utilize Alliance     
Capital's cash management services are broker-dealers whose customer accounts   
are carried, and whose securities transactions are cleared and settled, by the  
Pershing Division, "Pershing," of Donaldson, Lufkin & Jenrette Securities       
Corporation, "DLJ Securities Corporation," a subsidiary of AXA Financial until  
November 3, 2000. Pursuant to an agreement between Pershing and Alliance        
Capital, Pershing recommends that certain of its correspondent firms use        
Alliance Capital's money market funds and other cash management products. As of 
December 31, 2000, DLJ Securities Corporation and these Pershing correspondents 
were responsible for approximately $23.0 billion or 60.8% of                    

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Alliance Capital's total cash management assets. Pershing may terminate its     
agreement with Alliance Capital on 180 days' notice. If the agreement were      
terminated, Pershing would be under no obligation to recommend or in any way    
assist in the sale of Alliance Capital's cash management products and would be  
free to recommend or assist in the sale of competitive products.                

Alliance Capital's money market funds are investment companies registered 
under the Investment Company Act and are managed under the supervision of       
boards of directors or trustees, which include disinterested directors or       
trustees who must approve investment management agreements and certain other    
matters. The investment management agreements between the money market funds    
and Alliance Capital provide for an expense limitation of 1% per annum or less  
of average daily net assets. See "--Retail Services--Variable Products" and     
"--Retail Services--Investment Management Agreements and Fees."                 

Shareholder and Administration Services                                     

Alliance Global Investor Services, Inc., "Alliance Global," is a          
wholly-owned subsidiary of Alliance Capital that provides registrar, dividend   
disbursing and transfer agency related services for each U.S. fund and provides 
servicing for each U.S. fund's shareholder accounts. As of December 31, 2000,   
Alliance Global employed 654 people. Alliance Global operates out of offices in 
Secaucus, New Jersey, San Antonio, Texas, and Scranton, Pennsylvania. Under     
each servicing agreement Alliance Global receives a monthly fee. Each servicing 
agreement must be approved annually by the relevant U.S. fund's board of        
directors or trustees, including a majority of the disinterested directors or   
trustees, and may be terminated by either party without penalty upon 60 days'   
notice.                                                                         

Most U.S. funds utilize Alliance Capital and Alliance Global personnel to 
perform legal, clerical and accounting services not required to be provided by  
Alliance Capital. Payments by a U.S. fund for these services must be            
specifically approved in advance by the U.S. fund's board of directors or       
trustees. Currently, Alliance Capital and Alliance Global are earning revenues  
for providing clerical and accounting services to the U.S. funds and these      
closed-end funds at the rate of approximately $11.6 million per year.           

ACM Global Investor Services S.A., "ACM Global," is a wholly-owned        
subsidiary of Alliance Capital and is the registrar and transfer agent of       
substantially all of the offshore funds. As of December 31, 2000, ACM Global    
employed 41 people. ACM Global operates out of offices in Luxembourg and        
receives a monthly fee for its registrar and transfer agency services. Each     
agreement between ACM Global and an offshore fund may be terminated by either   
party upon 60 days' notice.                                                     

Alliance Capital expects to continue to devote substantial resources to   
shareholder servicing because of its importance in competing for assets         
invested in mutual funds and cash management services.                          

Institutional Research Services                                                 

Institutional research services consist of in-depth research, portfolio   
strategy, trading and brokerage related services provided to institutional      
investors such as pension managers, mutual fund managers and other              
institutional investors who manage assets and look to Sanford C. Bernstein &    
Co., LLC, "SCB LLC," a wholly-owned subsidiary of Alliance Capital, to provide  
services to support their asset management activities. As of December 31, 2000, 
SCB LLC served over 770 clients in the U.S. and over 180 in Europe, Australia   
and the Far East.                                                               

SCB LLC earns revenues from institutional services by providing investment
research and by executing brokerage transactions for research clients on an     
agency basis. In the case of research, research clients provide compensation    
principally by directing brokerage transactions to SCB LLC in return for SCB    
LLC research products. These services accounted for 2.2% of Alliance Capital's  
revenues in 2000. SCB LLC is occasionally invited to and chooses to participate 
in underwriting syndicates for equity issuances.                                

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Competition                                                                     

The financial services industry is highly competitive and new entrants are
continually attracted to it. No one or small number of competitors is dominant  
in the industry. Alliance Capital is subject to substantial competition in all  
aspects of its business. Pension fund, institutional and corporate assets are   
managed by investment management firms, broker-dealers, banks and insurance     
companies. Many of these financial institutions have substantially greater      
resources than Alliance Capital. Alliance Capital competes with other providers 
of institutional investment products and services primarily on the basis of the 
range of investment products offered, the investment performance of such        
products and the services provided to clients. Based on an annual survey        
published on May 14, 2001 by Pensions & Investments as of December 31, 2000,    
Alliance Capital was ranked 8th out of the top 250 managers based on worldwide  
assets under management. Based on that survey, Alliance Capital ranked 2nd in   
active domestic equity managers and 9th out of 751 managers based on U.S.       
institutional tax-exempt assets. Additionally, Alliance Capital ranked 6th out  
of the 21 largest managers of passive international index assets, 8th out of    
the 25 largest managers of passive domestic equity index funds and 15th out of  
the 25 largest passive domestic bond index managers.                            

 Many of the firms competing with Alliance Capital for institutional clients
also offer mutual fund shares and cash management services to individual        
investors. Competitiveness in this area is chiefly a function of the range of   
mutual funds and cash management services offered, investment performance,      
quality in servicing customer accounts and the capacity to provide financial    
incentives to financial intermediaries through distribution assistance and      
administrative services payments funded by Rule 12b-1 distribution plans and    
the investment adviser's own resources.                                         

Custody and Brokerage                                                           

  Neither Alliance Capital nor its subsidiaries, other than SCB LLC, maintains
custody of client funds or securities, which is maintained by client-designated 
banks, trust companies, brokerage firms or other custodians. SCB LLC maintains  
custody of private client assets and securities. Custody of the assets of       
Alliance mutual funds, EQ Advisors Trust and money market funds is maintained   
by custodian banks and central securities depositories.                         

Alliance Capital generally has the discretion to select the brokers or    
dealers to be utilized to execute transactions for client accounts. SCB LLC     
effects transactions for client accounts only if specifically authorized or     
directed by the client.                                                         

Regulation                                                                      

All aspects of Alliance Capital's business are subject to various federal 
and state laws and regulations and to the laws in the foreign countries in      
which Alliance Capital's subsidiaries conduct business. The SEC is responsible  
for carrying out the federal securities laws and serves as a supervisory body   
of all investment advisers, investment companies and broker dealers. The        
regulation of broker-dealers has to a large extent been delegated to the        
National Association of Securities Dealers.                                     

  The laws and regulations under which Alliance Capital operates are primarily
intended to benefit clients and Alliance mutual 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. In such event, the possible sanctions which may be        
imposed include the suspension of individual employees, limitations on engaging 
in business for specific periods, the revocation of licenses or registrations,  
censures and fines. Any of these, as well as changes in laws or regulations or  
in government policies, could have a material adverse effect on Alliance        
Capital.                                                                        

Alliance Capital and Alliance Holding are investment advisers registered  
with the SEC. These companies are subject to the Investment Advisers Act of     
1940 and the SEC's regulations under the Advisers Act which impose record       
keeping and reporting requirements, disclosure requirements and limitations on  
agency and principal transactions between an adviser and its advisory clients,  
as well as general anti-fraud prohibitions.                                     

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Each U.S. fund is registered with the SEC under the Investment Company Act
and the shares of most U.S. funds are qualified for sale in all states in the   
United States and the District of Columbia, except for U.S. funds offered only  
to residents of a particular state. The Investment Company Act of 1940 mandates 
disclosure by, and substantive regulation of, mutual funds. A significant       
portion of Alliance Capital's revenues are derived from the agreements under    
which Alliance Capital provides investment advisory and management services to  
the U.S. funds. Under the Investment Company Act, these agreements must be      
specifically renewed at least annually. Annual renewal requires, among other    
things, approval by the members of each U.S. fund's board of directors or       
trustees who are not affiliated with Alliance Capital. A failure to renew, or   
termination of, a significant number of these agreements or arrangements would  
have a material adverse effect on Alliance Capital.                             

 Alliance Global is registered with the SEC as a transfer agent. SCB LLC and
AFD are registered with the SEC as broker-dealers. SCB LLC is a member of the   
NYSE. SCB LLC and AFD are subject to minimum net capital requirements ($8.4     
million and $14.4 million, respectively, at December 31, 2000) imposed by the   
SEC on registered broker-dealers and had aggregate regulatory net capital of    
$164.9 million and $45.6 million, respectively, at December 31, 2000.           

The relationships of AXA and its subsidiaries, including Equitable and its
insurance company subsidiary, with Alliance Capital are subject to applicable   
provisions of the New York Insurance Law and regulations. Certain of the        
investment advisory agreements and ancillary administrative service agreements  
are subject to either approval or disapproval by the New York Superintendent of 
Insurance within a prescribed notice period. Under the New York Insurance Law   
and regulations, the terms of these agreements are to be fair and equitable,    
charges or fees for services performed are to be reasonable, and certain other  
standards must be met. Fees must be determined either with reference to fees    
charged to other clients for similar services or, in certain cases, which       
include the ancillary service agreements, based on cost reimbursement.          

Alliance Capital's assets under management and revenues derived from the  
general accounts of Equitable and its insurance company subsidiary are directly 
affected by the investment policies for the general accounts. Among the         
numerous factors influencing general account investment policies are regulatory 
factors, such as (i) laws and regulations that require diversification of the   
investment portfolios and limit the amount of investments in certain investment 
categories such as below investment grade fixed maturities, equity real estate  
and equity interests, (ii) statutory investment valuation reserves, and (iii)   
risk-based capital guidelines for life insurance companies approved by the      
National Association of Insurance Commissioners. These policies have resulted   
in the shifting of general account assets managed by Alliance Capital into      
categories with lower management fees.                                          

Employees                                                                       

As of December 31, 2000, Alliance Capital and its subsidiaries employed   
4,438 employees, including 605 investment professionals, of whom 221 are        
portfolio managers, 292 are research analysts and 81 are order placement        
specialists. The average period of employment of these investment professionals 
with Alliance Capital is approximately 7 years and their average investment     
experience is approximately 13 years. Alliance Capital considers its employee   
relations to be good.                                                           

Properties                                                                      

Alliance Capital's principal executive offices at 1345 Avenue of the      
Americas, New York, New York are occupied pursuant to a lease which extends     
until 2019. Alliance Capital currently occupies approximately 494,127 square    
feet of space at this location. Alliance Capital also occupies approximately    
114,097 square feet of space at 135 West 50th Street, New York, New York, and   
approximately 161,340 square feet of space at 767 Fifth Avenue, New York, New   
York, under leases expiring in 2016, and 2002 and 2005, respectively. Alliance  
Capital also occupies approximately 4,594 square feet of space at 709           
Westchester Avenue, White Plains, New York, 42,254 square feet of space at 925  
Westchester Avenue, White Plains, New York,                                     

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4,341 square feet of space at One North Broadway, White Plains, New York, and   
128,587 square feet of space at One North Lexington, White Plains, New York     
under leases expiring in 2008, 2008, 2008 and 2013, respectively. Alliance      
Capital and its subsidiaries, AFD and Alliance Global, occupy approximately     
134,261 square feet of space in Secaucus, New Jersey, approximately 92,067      
square feet of space in San Antonio, Texas, and approximately 60,653 square     
feet of space in Scranton, Pennsylvania, under leases expiring in 2016, 2009,   
and 2005, respectively.                                                         

  Alliance Capital also leases space in 10 cities in the United States and its
subsidiaries and affiliates lease space in London, England, Tokyo, Japan, and   
24 other cities outside the United States.                                      

Legal Proceedings                                                               

 On April 25, 2001, an amended class action complaint entitled Miller et al.
v. Mitchell Hutchins Assets Management, Inc., et al., which we refer to as the  
amended Miller complaint, was filed in federal district court in the Southern   
District of Illinois against Alliance Capital, AFD, and other defendants        
alleging violations of the federal Investment Company Act of 1940, as amended,  
the "ICA," and breaches of common law fiduciary duty.                           

The allegations in the amended Miller complaint concern six mutual funds  
with which Alliance Capital has investment advisory agreements, including the   
Alliance Premier Growth Fund, Alliance Health Care Fund, Alliance Growth Fund,  
Alliance Quasar Fund, Alliance Fund, and Alliance Disciplined Value Fund. The   
principal allegations of the amended complaint are that (i) certain advisory    
agreements concerning these funds were negotiated, approved, and executed in    
violation of the ICA, in particular because certain directors of these funds    
should be deemed interested under the ICA; (ii) the distribution plans for      
these funds were negotiated, approved, and executed in violation of the ICA;    
and (iii) the advisory fees and distribution fees paid to Alliance Capital and  
AFD, respectively, are excessive and, therefore, constitute a breach of         
fiduciary duty.                                                                 

Alliance Capital and AFD believe that plaintiffs' allegations are without 
merit and intend to vigorously defend against these allegations. At the present 
time, management of Alliance Capital and AFD are unable to estimate the impact, 
if any, that the outcome of this action may have on Alliance Capital's results  
of operations or financial condition.                                           

On June 22, 2001, an amended class action complaint entitled Nelson et al.
v. AIM Advisors, Inc. et al., which we refer to as the amended Nelson           
complaint, was filed in federal district court in the Southern District of      
Illinois against Alliance Capital, AFD, and numerous other defendants in the    
mutual fund industry alleging violations of the ICA, and breaches of common law 
fiduciary duty.                                                                 

The allegations in the amended Nelson complaint concern three mutual funds
with which Alliance Capital has investment advisory agreements, including       
Alliance Premier Growth Fund, Alliance Growth Fund and Alliance Quasar Fund.    
The principal allegations of the amended complaint are that (i) certain         
advisory agreements concerning these funds were negotiated, approved, and       
executed in violation of the ICA, in particular because certain directors of    
these funds should be deemed interested under the ICA; (ii) the distribution    
plans for these funds were negotiated, approved, and executed in violation of   
the ICA; and (iii) the advisory and distribution fees paid to Alliance Capital  
and AFD, respectively, are excessive and, therefore, constitute a breach of     
fiduciary duty.                                                                 

Alliance Capital and AFD believe that plaintiffs' allegations are without 
merit and intend to vigorously defend against these allegations. At the present 
time, management of Alliance Capital and AFD are unable to estimate the impact, 
if any, that the outcome of this action may have on Alliance Capital's results  
of operations or financial condition.                                           

Alliance Capital is involved in various other inquiries, administrative   
proceedings and litigation, some of which allege substantial damages. While any 
proceeding or litigation has the element of uncertainty, Alliance Capital       
believes that the outcome of any one of these other lawsuits or claims that is  
pending or threatened, or all of them combined, will not have a material        
adverse effect on Alliance Capital's results of operations or financial         
condition.                                                                      

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DESCRIPTION OF NOTES  

The following description of the particular terms of the 5.625% Notes due 
2006, which we refer to as the "notes due 2006," or as the "notes," offered     
hereby supplements the description of the general terms and provisions of the   
debt securities set forth in the accompanying prospectus, to which description  
reference is hereby made. The notes are referred to in the accompanying         
prospectus as the "debt securities." The following summary of the notes is      
qualified in its entirety by reference to the indenture referred to in the      
accompanying prospectus.                                                        

General                                                                         

The notes will initially be limited to $400,000,000 in aggregate principal
amount and will mature on August 15, 2006. The notes will constitute senior     
debt and will rank pari passu with all other unsecured and unsubordinated       
indebtedness of Alliance Capital, subject to certain statutory exceptions in    
the event of liquidation upon insolvency. The notes will be issued in fully     
registered form only, in denominations of $1,000 and multiples thereof.         
Principal of, and interest on, the notes will be payable, and the transfer of   
notes will be registrable, through the depositary as described below. We may    
create and issue additional notes with the same terms as the notes offered      
hereby so that the additional notes will form a single series with the notes.   

The senior indenture permits the defeasance of the notes upon the         
satisfaction of the conditions described under "Description of Debt             
Securities--Defeasance and Covenant Defeasance" in the accompanying prospectus. 
The notes are subject to these defeasance provisions.                           

As used herein, "business day" means any day, other than a Saturday or    
Sunday, that is neither a legal holiday nor a day on which banking institutions 
are authorized or required by law or regulation to close in The City of New     
York.                                                                           

The notes will bear interest from August 10, 2001 at the annual rate set  
forth on the cover page of this prospectus supplement, payable semiannually in  
arrears on February 15 and August 15 (each an "interest payment date"),         
commencing February 15, 2002 to the person in whose name such notes are         
registered at the close of business on the preceding February 1 and August 1.   
Such interest will be computed on the basis of a 360-day year of twelve 30-day  
months.                                                                         

 If any interest payment date falls on a day that is not a business day, the
interest payment shall be postponed to the next day that is a business day, and 
no interest on such payment shall accrue for the period from and after such     
interest payment date. If the maturity date of the notes falls on a day that is 
not a business day, the payment of interest and principal may be made on the    
next succeeding business day, and no interest on such payment shall accrue for  
the period from and after the maturity date.                                    

Interest payments for the notes will include accrued interest from and    
including the date of issue or from and including the last date in respect of   
which interest has been paid, as the case may be, to but excluding the interest 
payment date or maturity date, as the case may be.                              

Optional Redemption                                                             

  The notes may be redeemed, at our option, as a whole or in part at any time,
at a redemption price equal to the greater of:                                  

.  100% of the principal amount of the notes to be redeemed, or         

.  the sum of the present values of the remaining scheduled payments of 
   principal and interest on the notes to be redeemed, discounted to the
date of redemption on a semi-annual basis (assuming a 360-day year
      consisting of twelve 30-day months) at the applicable treasury rate plus
20 basis points for the notes,                                    

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plus, in each case, accrued and unpaid interest on the principal amount being   
redeemed to the redemption date.                                                

"treasury rate" means, with respect to any redemption date,               

.  the yield, under the heading which represents the average for the    
  immediately preceding week, appearing in the most recently published
     statistical release designated "H.15(519)" or any successor publication
which is published weekly by the Board of Governors of the Federal
   Reserve System and which establishes yields on actively traded United
States Treasury securities adjusted to constant maturity under the
    caption "treasury constant maturities," for the maturity corresponding
  to the comparable treasury issue (or, if no maturity is within three
     months before or after the remaining life, yields for the two published
    maturities most closely corresponding to the comparable treasury issue
will be determined and the treasury rate will be interpolated or  
     extrapolated from such yields on a straight line basis, rounding to the
nearest month) or                                                 

 .  if such release (or any successor release) is not published during the
      week preceding the calculation date or does not contain such yields, the
     rate per annum equal to the semi-annual equivalent yield-to-maturity of
the comparable treasury issue, calculated using a price for the   
   comparable treasury issue (expressed as a percentage of its principal
     amount) equal to the comparable treasury price of such redemption date.

The treasury rate will be calculated on the third business day preceding the    
redemption date.                                                                

"comparable treasury issue" means the United States Treasury security     
selected by an independent investment banker as having a maturity comparable to 
the remaining term ("remaining life") of the notes to be redeemed that would be 
utilized, at the time of selection and in accordance with customary financing   
practice, in pricing new issues of corporate debt securities of comparable      
maturity to the remaining life of such notes.                                   

 "independent investment banker" means either Deutsche Banc Alex. Brown Inc.
or J.P. Morgan Securities Inc., and their respective successors, or, if both    
firms are unwilling or unable to select the comparable treasury issue, a        
nationally recognized investment banking institution which is a primary         
treasury dealer appointed by us.                                                

  "comparable treasury price" means (1) the average of five Reference Treasury
Dealer Quotations for such redemption date, after excluding the highest and     
lowest Reference Treasury Dealer Quotations, or (2) if, after seeking at least  
five reference treasury dealer quotations and excluding the highest and lowest  
reference treasury dealer quotations, the independent investment banker obtains 
fewer than five such reference treasury dealer quotations, the average of all   
such quotations.                                                                

"reference treasury dealer" means (1) Deutsche Banc Alex. Brown Inc. and  
J.P. Morgan Securities Inc., and their respective successors, provided,         
however, that if any of the foregoing shall cease to be a primary U.S.          
government securities dealer in New York City (a "primary treasury dealer"), we 
will substitute for such dealer another primary treasury dealer and (2) any     
other nationally recognized primary treasury dealer selected by the independent 
investment banker and acceptable to us.                                         

"The reference treasury quotations" means, with respect to each reference 
treasury dealer and any redemption date, the average, as determined by the      
independent investment banker, of the bid and asked prices for the comparable   
treasury issue (expressed in each case as a percentage of its principal amount) 
quoted in writing to the independent investment banker at 5:00 p.m., New York   
City time, on the third business day preceding such redemption date.            

 On or after the redemption date, interest will cease to accrue on the notes
or any portion thereof called for redemption (unless we default in the payment  
of the redemption price and accrued interest). On or before any redemption      
date, we will deposit with a paying agent (or the trustee) money sufficient to  
pay the redemption price and accrued interest on the notes to be redeemed on    
such date. Holders of notes to be redeemed will receive                         

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notice thereof by first-class mail at least 30 and not more than 60 days before 
the date fixed for redemption. If fewer than all of the notes are to be         
redeemed, the trustee will select the particular notes or portions thereof for  
redemption from the outstanding notes not previously called, pro rata or by lot 
or in such other manner as we shall direct.                                     

Trustee                                                                         

 The Bank of New York is the trustee for the notes. Payment of principal and
interest will be payable, and the notes will be transferable, at the office of  
the trustee, as paying agent. We may, however, pay interest by wire transfer or 
check mailed to registered holders of the notes. At the maturity of the notes,  
the principal, together with accrued interest thereon, will be payable in       
immediately available funds upon surrender of such notes at the office of the   
trustee. For so long as the notes are represented by global securities, we will 
make payments of interest to The Depository Trust Company (the "Depositary") or 
its nominees, as the case may be, which will distribute payments to its         
beneficial holders in accordance with its customary procedures.                 

Book-Entry System                                                               

We will issue the notes in registered book-entry only form. The notes will
be represented by one or more permanent global certificates registered in the   
name of the Depositary or its nominee. Except as we describe below, a global    
security is not transferable, except that the Depositary, its nominees and      
their successors may transfer an entire global security to one another.         

The Depositary has advised us that it is a limited-purpose trust company  
organized under the New York Banking Law, a "banking organization" within the   
meaning of the New York Banking Law, a member of the Federal Reserve System, a  
"clearing corporation" within the meaning of the New York Uniform Commercial    
Code, and a "clearing agency" registered pursuant to the provisions of section  
17A of the Securities Exchange Act of 1934, as amended. The Depositary holds    
securities that its participants deposit with the Depositary. The Depositary    
also facilitates the settlement among its participants of securities            
transactions, such as transfers and pledges, in deposited securities through    
electronic computerized book-entry changes in its participants' accounts. By    
doing so, the Depositary eliminates the need for physical movement of           
securities. The Depositary's participants include securities brokers and        
dealers (including the underwriters), banks, trust companies, clearing          
corporations, and certain other organizations, some of which own the            
Depositary. The Depositary is also owned by the New York Stock Exchange, Inc.,  
the American Stock Exchange, Inc., and the National Association of Securities   
Dealers, Inc. Access to the Depositary's system is also available to others     
such as securities brokers and dealers, banks and trust companies that clear    
through or maintain a custodial relationship with a participant, either         
directly or indirectly. Persons who are not participants may beneficially own   
securities held by the Depositary only through participants. The rules          
applicable to the Depositary and its participants are on file with the SEC.     

UNITED STATES FEDERAL TAXATION  

The following discussion is the opinion of Davis Polk & Wardwell. It      
describes the principal United States federal tax consequences of ownership and 
disposition of the notes. This discussion only applies to:                      

.  notes purchased by those initial holders who purchase notes at the   
"issue price" (as defined below);                                 

.  notes held as capital assets; and                                    

.  United States Holders (as defined below).                            

This discussion does not describe all of the tax consequences that may be 
relevant to a holder in light of his particular circumstances or to holders     
subject to special rules, such as:                                              

.  certain financial institutions;                                      

.  insurance companies;                                                 

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.  dealers in securities or foreign currencies;                         

.  persons holding notes as part of a hedge;                            

  .  United States Holders whose functional currency is not the U.S. dollar;

.  partnerships or other entities classified as partnerships for U.S.   
federal income tax purposes; or                                   

.  persons subject to the alternative minimum tax.                      

 This summary is based on the Internal Revenue Code of 1986, as amended, the
"Code," to the date hereof, administrative pronouncements, judicial decisions   
and final, temporary and proposed Treasury Regulations, changes to any of which 
subsequent to the date of this Prospectus may affect the tax consequences       
described herein. Persons considering the purchase of notes should consult      
their tax advisors with regard to the application of the United States federal  
income tax laws to their particular situations as well as any tax consequences  
arising under the laws of any state, local or foreign taxing jurisdiction.      

 As used herein, the term "United States Holder" means a beneficial owner of
a note that is for United States federal income tax purposes:                   

.  a citizen or resident of the United States;                          

   .  a corporation, or other entity taxable as a corporation for U.S. federal
   income tax purposes, created or organized in or under the laws of the
United States or of any political subdivision thereof; or         

.  an estate or trust the income of which is subject to United States   
federal income taxation regardless of its source.                 

The term United States Holder also includes certain former citizens of the
United States.                                                                  

The "issue price" of a note will equal the first price to the public (not 
including bond houses, brokers, or similar persons or organizations acting in   
the capacity of underwriters, placement agents or wholesalers) at which a       
substantial amount of the notes is sold for money.                              

 Payments of Interest. Interest on a note will be taxable to a United States
person as ordinary interest income at the time it accrues or is received in     
accordance with the United States person's method of accounting for tax         
purposes.                                                                       

Sale, Exchange or Retirement of the Notes. Upon the sale, exchange or     
retirement of a note, a United States person will recognize taxable gain or     
loss equal to the difference between the amount realized on the sale, exchange  
or retirement and the United States person's adjusted tax basis in the note.    
For these purposes, the amount realized does not include any amount             
attributable to accrued interest on the note. Amounts attributable to accrued   
interest are treated as interest as described under "Payments of Interest"      
above.                                                                          

In general, gain or loss realized on the sale, exchange or redemption of a
note will be a capital gain or loss. You should consult your tax advisor        
regarding the treatment of capital gains (which may be taxed at lower rates     
than ordinary income for taxpayers who are individuals, trusts or estates) and  
losses (the deductibility of which is subject to limitations).                  

Backup Withholding and Information Reporting. Information returns will be 
filed with the Internal Revenue Service in connection with payments on the      
notes and the proceeds from a sale or other disposition of the notes. You will  
be subject to United States backup withholding tax on these payments if you     
fail to provide your taxpayer identification number to the paying agent and     
comply with certain certification procedures or otherwise establish an          
exemption from backup withholding. The amount of any backup withholding from a  
payment to you will be allowed as a credit against your United States federal   
income tax liability and may entitle you to a refund, provided that the         
required information is furnished to the Internal Revenue Service.              

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ERISA 

We and certain of our affiliates, including SCB LLC and AFD, may be       
considered a "party in interest" within the meaning of the Employee Retirement  
Income Security Act of 1974, as amended, "ERISA," or a "disqualified person"    
within the meaning of the Code with respect to many employee benefit plans.     
Prohibited transactions within the meaning of ERISA or the Code may arise, for  
example, if the notes are acquired by or with the assets of a pension or other  
employee benefit plan with respect to which we, SCB LLC, AFD or any of our      
respective affiliates is a service provider, unless the notes are acquired      
pursuant to an exemption from the prohibited transaction rules. Under ERISA,    
the assets of a pension or other employee benefit plan may include assets held  
in the general account of an insurance company which has issued an insurance    
policy to such plan or assets of an entity in which the plan has invested.      

  The acquisition of the notes may be eligible for one of the exemptions noted
below if such acquisition:                                                      

 (a)(i) is made solely with the assets of a bank collective investment
fund and (ii) satisfies the requirements and conditions of Prohibited     
Transaction Class Exemption, "PTCE," 91-38 issued by the Department of    
Labor, the "DOL";                                                         

     (b)(i) is made solely with assets of an insurance company pooled separate
account and (ii) satisfies the requirements and conditions of PTCE 90-1   
issued by the DOL;                                                        

 (c)(i) is made solely with assets managed by a qualified professional
asset manager and (ii) satisfies the requirements and conditions of PTCE  
84-14 issued by the DOL;                                                  

(d) is made solely with assets of a governmental plan (as defined in
Section 3(32) of ERISA) which is not subject to the provisions of Section 
401 of the Code;                                                          

     (e)(i) is made solely with assets of an insurance company general account
and (ii) satisfies the requirements and conditions of PTCE 95-60 issued by
the DOL; or                                                               

  (f)(i) is made solely with assets managed by an in-house asset manager
and (ii) satisfies the requirements and conditions of PTCE 96-23 issued by
the DOL.                                                                  

The sale of notes to a plan is in no respect a representation by Alliance 
Capital that such an investment meets all relevant legal requirements with      
respect to investments by plans generally or any particular plan, or that such  
an investment is appropriate for plans generally or any particular plan.        

  Any plan proposing to invest in the notes should consult with its counsel to
confirm that such investment will not result in a prohibited transaction that   
is not subject to an exemption and will satisfy the other requirements of       
ERISA, the Code and the DOL Regulations applicable to plans.                    

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UNDERWRITING  

 Subject to the terms and conditions set forth in the underwriting agreement
dated the date hereof, we have agreed to sell to each of the underwriters named 
below, severally, and each of the underwriters has severally agreed to          
purchase, the principal amount of the notes set forth opposite its name below:  

                                                                [Download Table]

                                     Principal   
Name                              Amount of Notes
----                              ---------------
                                                 
Deutsche Banc Alex. Brown Inc....  $142,000,000  
J.P. Morgan Securities Inc.......   142,000,000  
Banc of America Securities LLC...    82,000,000  
BNY Capital Markets, Inc.........     9,666,000  
Fleet Securities, Inc............     9,667,000  
Salomon Smith Barney Inc.........     9,667,000  
Commerzbank Capital Markets Corp.     2,500,000  
SG Cowen Securities Corporation..     2,500,000  
                                   ------------  
   Total.........................  $400,000,000  
                                   ============  

Under the terms and conditions of the underwriting agreement, if the      
underwriters take any of the notes, then the underwriters are obligated to take 
and pay for all of the notes.                                                   

The notes are a new issue of securities with no established trading market
and will not be listed on any national securities exchange. The underwriters    
have advised us that they intend to make a market for the notes, but they have  
no obligation to do so and may discontinue market making at any time without    
providing any notice. No assurance can be given as to the liquidity of any      
trading market for the notes.                                                   

The underwriters initially propose to offer part of the notes directly to 
the public at the offering price set forth on the cover page of this prospectus 
supplement and part to certain dealers at a price that represents a concession  
not in excess of 0.350% of the principal amount of the notes. Any underwriter   
may allow, and any such dealer may reallow, a concession not in excess of       
0.250% of the principal amount of the notes to certain other dealers. After the 
initial offering of the notes, the Underwriters may from time to time vary the  
offering price and other selling terms.                                         

We have also agreed to indemnify the underwriters against certain         
liabilities, including liabilities under the Securities Act of 1933, as         
amended, or to contribute to payments which the underwriters may be required to 
make in respect of any such liabilities.                                        

  In connection with the offering of the notes, the underwriters may engage in
transactions that stabilize, maintain or otherwise affect the price of the      
notes. Specifically, the underwriters may overallot in connection with the      
offering of the notes, creating a syndicate short position. In addition, the    
underwriters may bid for, and purchase, notes in the open market to cover       
syndicate short positions or to stabilize the price of the notes. Finally, the  
underwriting syndicate may reclaim selling concessions allowed for distributing 
the notes in the offering of the notes, if the syndicate repurchases previously 
distributed notes in syndicate covering transactions, stabilization             
transactions or otherwise. Any of these activities may stabilize or maintain    
the market price of the notes above independent market levels. The underwriters 
are not required to engage in any of these activities and may end any of them   
at any time.                                                                    

We expect to incur expenses associated with this offering of approximately
$865,000.                                                                       

J.P. Morgan Securities Inc., will make the securities available for       
distribution on the Internet through a proprietary Web site and/or a            
third-party system operated by Market Axess Inc., an Internet-based             

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communications technology provider. Market Axess Inc. is providing the system   
as a conduit for communications between J.P. Morgan Securities Inc. and its     
customers and is not a party to any transactions. Market Axess Inc., a          
registered broker-dealer, will receive compensation from J.P. Morgan Securities 
Inc. based on transactions J.P. Morgan Securities Inc. conducts through the     
system. J.P. Morgan Securities Inc. will make the securities available to its   
customers through the Internet distributions, whether made through a            
proprietary or third-party system, on the same terms as distributions made      
through other channels.                                                         

 In the ordinary course of their respective businesses, the underwriters and
their affiliates have engaged, and may in the future engage, in commercial      
banking and/or investment banking transactions with us and our affiliates.      
Affiliates of certain of the underwriters are lenders under our bank revolving  
credit facilities and will receive a portion of the amount of such facilities   
repaid with the net proceeds of the offering. Because more than 10% of the net  
proceeds of the offering will be paid to affiliates of the underwriters, the    
offering is being conducted in accordance with Rule 2710(c)(8) of the Conduct   
Rules of the National Association of Securities Dealers, Inc.                   

Each underwriter has represented and agreed that it will comply with all  
applicable laws and regulations in force in any jurisdiction in which it        
purchases, offers, sells or delivers the notes or possesses or distributes this 
prospectus supplement or the accompanying prospectus and will obtain any        
consent, approval or permission required by it for the purchase, offer or sale  
by it of the notes under the laws and regulations in force in any jurisdiction  
to which it is subject or in which it makes such purchases, offers or sales and 
Alliance Capital shall not have responsibility therefor.                        

LEGAL MATTERS 

 The validity of the notes and certain matters relating to the notes will be
passed upon for us by Davis Polk & Wardwell, New York, New York, and for the    
underwriters by Simpson Thacher & Bartlett, New York, New York.                 

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PROSPECTUS                                                                      

$600,000,000  

Alliance Capital [LOGO]/R/

Alliance Capital Management L.P.  

DEBT SECURITIES 
DEBT WARRANTS 

----------------- 

We may offer from time to time debt securities or debt warrants. This     
prospectus describes the general terms of these securities and the manner in    
which we will offer these securities. The specific terms of any securities we   
offer will be provided in supplements to this prospectus. You should read this  
prospectus and any supplement carefully before you invest.                      

----------------- 

Neither the Securities and Exchange Commission nor any state securities   
commission has approved or disapproved these securities, or determined if this  
prospectus is truthful or complete. Any representation to the contrary is a     
criminal offense.                                                               

July 30, 2001                                                                   

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TABLE OF CONTENTS 

                                                                [Download Table]

                                                Page
                                                ----
                                                    
About Alliance Capital Management L.P..........   3 
Where You Can Find More Information............   3 
Special Note on Forward-Looking Statements.....   4 
Consolidated Ratio of Earnings to Fixed Charges   4 
Use of Proceeds................................   5 
Description of Debt Securities.................   6 
Description of Debt Warrants...................  11 
Forms of Securities............................  14 
Plan of Distribution...........................  16 
Legal Matters..................................  17 
Experts........................................  17 

About this Prospectus 

This prospectus is part of a registration statement that we filed with the
SEC utilizing a "shelf" registration process. Under this shelf process, we may  
sell any combination of the securities described in this prospectus in one or   
more offerings up to a total dollar amount of $600,000,000. This prospectus     
provides you with a general description of the securities we may offer. Each    
time we sell securities, we will provide a prospectus supplement that will      
contain specific information about the terms of that offering. The prospectus   
supplement may also add, update or change information contained in this         
prospectus. You should read both this prospectus and any prospectus supplement  
together with additional information described under the heading "Where You Can 
Find More Information."                                                         

You should rely only on the information contained in or incorporated by   
reference in this prospectus. We have not authorized anyone to provide you with 
different information. We are not making an offer of these securities in any    
state where the offer is not permitted. You should not assume that the          
information contained in or incorporated by reference in this prospectus is     
accurate as of any date other than the date on the front of this prospectus.    
The terms "Alliance Capital", "we," "us," and "our" refer to Alliance Capital   
Management L.P.                                                                 

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ABOUT ALLIANCE CAPITAL MANAGEMENT L.P.  

Alliance Capital is a leading global investment management firm, providing
investment management services for many of the largest U.S. public and private  
employee benefit plans, foundations, public employee retirement funds, pension  
funds, endowments, banks, insurance companies and high net worth individuals    
worldwide. Alliance Capital is also one of the largest mutual fund sponsors and 
managers, with a diverse family of globally distributed mutual fund portfolios. 

 Our principal executive offices are located at 1345 Avenue of the Americas,
New York, New York 10105, and our telephone number is (212) 969-1000. We        
maintain a website at www.alliancecapital.com where general information about   
us is available. We are not incorporating the contents of the website into this 
prospectus.                                                                     

WHERE YOU CAN FIND MORE INFORMATION 

We file annual, quarterly and special reports, proxy statements and other 
information with the SEC. You may read and copy any document that we file at    
the Public Reference Room of the SEC at 450 Fifth Street, NW, Washington, D.C.  
20549. You may obtain information on the operation of the Public Reference Room 
by calling the SEC at 1-800-SEC-0330. You may also inspect our filings at the   
regional offices of the SEC located at Citicorp, 500 West Madison Street, Suite 
1400, Chicago, Illinois 60661 and 7 World Trade Center, New York, New York      
10048 or over the Internet at the SEC's website at http://www.sec.gov.          

This prospectus is part of a registration statement we filed with the SEC.
This prospectus omits some information contained in the registration statement  
in accordance with SEC rules and regulations. You should review the information 
and exhibits in the registration statement for further information on us and    
our consolidated subsidiaries and the securities we are offering. Statements in 
this prospectus concerning any document we filed as an exhibit to the           
registration statement or that we otherwise filed with the SEC are not intended 
to be comprehensive and are qualified by reference to these filings. You should 
review the complete document to evaluate these statements.                      

The SEC allows us to incorporate by reference much of the information we  
file with them, which means that we can disclose important information to you   
by referring you to those publicly available documents. The information that we 
incorporate by reference in this prospectus is considered to be part of this    
prospectus. Because we are incorporating by reference future filings with the   
SEC, this prospectus is continually updated and those future filings may modify 
or supersede some of the information included or incorporated in this           
prospectus. This means that you must look at all of the SEC filings that we     
incorporate by reference to determine if any of the statements in this          
prospectus or in any document previously incorporated by reference have been    
modified or superseded. This prospectus incorporates by reference the documents 
listed below and any future filings we make with the SEC under Section 13(a),   
13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until we complete our 
offering of the securities to be issued under the registration statement or, if 
later, the date on which any of our affiliates cease offering and selling these 
securities:                                                                     

(a) Current Reports on Form 8-K dated May 3, 2001, February 7, 2001,      
January 18, 2001 and January 9, 2001.                             

(b) Quarterly Report on Form 10-Q for the period ended March 31, 2001.    

(c) Annual Report on Form 10-K for the year ended December 31, 2000.      

You may request a copy of these filings at no cost, by writing or         
telephoning the office of Alliance Capital Management L.P., 1345 Avenue of the  
Americas, New York, New York 10105, Attention: Investor Relations,              
1-800-962-2134.                                                                 

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SPECIAL NOTE ON FORWARD-LOOKING STATEMENTS  

This prospectus includes forward-looking statements within the meaning of 
the Private Securities Litigation Reform Act of 1995. We have based these       
forward-looking statements on our current expectations and projections about    
future events. These forward-looking statements are subject to risks,           
uncertainties and other factors which could cause actual results to differ      
materially from future results expressed or implied by such forward-looking     
statements. The most significant of such 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;                                         
.  future acquisitions;                                                 
.  competitive conditions; and                                          
.  government regulations, including changes in tax rates.              

Alliance Capital cautions potential investors to carefully consider such  
factors. Further, such forward-looking statements speak only as of the date on  
which such statements are made. Alliance Capital undertakes no obligation to    
update any forward-looking statements to reflect events or circumstances after  
the date of such statements.                                                    

CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES 

The following table sets forth our consolidated ratio of earnings to fixed
charges for the periods indicated.                                              

                                                        [Enlarge/Download Table]

                                                Three Months Ended           Fiscal Year          
                                                ------------------- ------------------------------
                                                March 31, March 31,                               
                                                  2001      2000    2000  1999  1998  1997   1996 
-                                               --------- --------- ----- ----- ----- ----- ------
                                                                                                  
Consolidated ratio of earnings to fixed charges   14.02     13.82   17.11 24.74 47.67 51.00 109.47

  For purposes of calculating the ratio of earnings to fixed charges, earnings
are the sum of:                                                                 

   .  pre-tax income from continuing operations before adjustment for minority
  interests in consolidated subsidiaries or income or loss from equity
investees;                                                        
.  fixed charges;                                                       
.  amortization of capitalized interest;                                
.  distributed income of equity investees; and                          
.  our share of pre-tax losses of equity investees for which charges    
arising from guarantees are included in fixed charges;            

less:                                                                     

.  capitalized interest.                                                

For purposes of calculating the ratio of earnings to fixed charges, fixed 
charges are the sum of:                                                         

.  interest expensed and capitalized;                                   
.  amortized premiums, discounts and capitalized expenses related to    
indebtedness; and                                                 
.  our estimate of the interest components of rental expenses.          

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USE OF PROCEEDS 

Alliance Capital will use the net proceeds from the sale of the securities
we offer by this prospectus for general partnership purposes or for any other   
purpose described in the applicable prospectus supplement.                      

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DESCRIPTION OF DEBT SECURITIES  

This prospectus describes certain general terms and provisions of the debt
securities. The debt securities will be issued under a senior debt indenture    
between us and The Bank of New York, as trustee. The debt securities will       
constitute senior debt of Alliance Capital. This prospectus refers to the       
senior debt indenture as the indenture and the senior debt trustee as the       
trustee. When we offer to sell a particular series of debt securities, we will  
describe the specific terms for the securities in a supplement to this          
prospectus. The prospectus supplement will also indicate whether the general    
terms and provisions described in this prospectus apply to a particular series  
of debt securities.                                                             

 We have summarized below the material terms and provisions of the indenture
and the debt securities or indicated which material provisions will be          
described in the related prospectus supplement. The summary is not complete.    
The indenture is included as an exhibit to the registration statement for these 
securities that we have filed with the SEC. You should read the indenture for   
the provisions which may be important to you. The indenture is subject to and   
governed by the Trust Indenture Act of 1939, as amended.                        

Terms of the Debt Securities to be Described in the Prospectus Supplement       

The indenture will not limit the amount of debt securities which we may   
issue. We may issue debt securities up to an aggregate principal amount as we   
may authorize from time to time. The prospectus supplement will describe the    
terms of any debt securities being offered, including:                          

.  the designation, aggregate principal amount, purchase price and      
authorized denominations;                                         

.  the currency or currencies, if other than the currency of the United 
     States, in which principal, premium, if any, and interest will be paid;

.  the maturity date;                                                   

 .  the interest rate, if any, and the method for calculating the interest
rate;                                                             

.  the interest payment dates and the record dates for the interest     
payments;                                                         

.  the place where we will pay principal, premium, if any, and interest;

.  any mandatory or optional redemption terms or prepayment, conversion,
sinking fund or exchangeability or convertibility provisions;     

.  if other than denominations of $1,000 or multiples of $1,000, the    
denominations the debt securities will be issued in;              

.  whether the debt securities will be issued in the form of global     
securities or certificated securities;                            

.  additional provisions, if any, relating to the defeasance of the debt
securities;                                                       

.  any agents for the debt securities, including trustees, depositories,
authenticating or paying agents, transfer agents or registrars;   

   .  any applicable United States federal income tax consequences, including,
but not limited to:                                               

    .  whether and under what circumstances we will pay additional amounts
        on debt securities held by a person who is not a U.S. person for any
       tax, assessment or governmental charge withheld or deducted and, if
       so, whether we will have the option to redeem those debt securities
rather than pay the additional amounts;                     

      .  tax considerations applicable to any discounted debt securities or to
        debt securities issued at par that are treated as having been issued
at a discount for United States federal income tax purposes;

     .  tax considerations applicable to any debt securities denominated and
payable in foreign currencies; and                          

 .  our right, if any, to defer payment of interest and the maximum length
of this deferral period;                                          

.  any listing on a securities exchange;                                

.  any other specific terms of the debt securities, including any       
     additional events of default or covenants, and any terms required by or
advisable under applicable laws or regulations.                   

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Senior Debt                                                                     

Alliance Capital will issue the debt securities under the indenture. The  
debt securities will constitute part of the senior debt of Alliance Capital and 
will rank equally and pari passu with all other unsecured and unsubordinated    
debt of Alliance Capital.                                                       

Covenants                                                                       

Limitations on Liens                                                        

  The indenture will provide that, except as described below, Alliance Capital
will not, nor will it permit any subsidiary to, incur, issue, assume or         
guarantee any indebtedness for money borrowed that is secured by a pledge,      
mortgage, deed of trust or other lien on any stock or any indebtedness of any   
designated subsidiary or any subsidiary that owns, directly or indirectly, all  
or substantially all of the stock of any designated subsidiary without          
effectively providing that the debt securities issued under the indenture will  
be secured equally and ratably with or prior to all other indebtedness secured  
by such lien, so long as the secured indebtedness is so secured unless, after   
giving effect thereto, the aggregate principal amount of all such secured       
indebtedness which would otherwise be prohibited would not exceed 15% of        
Alliance Capital's consolidated total assets. These restrictions shall not      
apply to indebtedness secured by:                                               

.  liens on any shares of stock or indebtedness acquired from a person  
      which is merged with or into, or which sells all or substantially all of
its assets to, Alliance Capital or a designated subsidiary;       

.  liens to secure indebtedness of a designated subsidiary to Alliance  
Capital or another designated subsidiary but only as long as such 
indebtedness is owned or held by Alliance Capital or a designated 
subsidiary; and                                                   

.  any extension, renewal or replacement (or successive extensions,     
     renewals or replacements), in whole or in part, of any lien referred to
in the two foregoing clauses.                                     

For the purposes of the indenture, "consolidated total assets" shall mean,
at any date, the total assets appearing on the most recently prepared           
consolidated balance sheet of Alliance Capital and its consolidated             
subsidiaries as at the end of a fiscal quarter of Alliance Capital, prepared in 
accordance with generally accepted accounting principles; "designated           
subsidiary" means each of SCB LLC and AFD and any subsidiary succeeding to any  
substantial part of the business conducted by either of them; "subsidiary"      
means any corporation, limited liability company, partnership or other entity   
of which at the time of determination Alliance Capital owns or controls         
directly or indirectly more than 50% of the stock or equivalent interest; and   
"stock" means the equity (which includes, but is not limited to, common stock,  
preferred stock, limited liability company membership interests, partnership    
interests (whether general or limited) and joint venture interests) of the      
subsidiary in question.                                                         

Consolidation, Merger or Sale of Assets                                     

We will not merge or consolidate with or into or sell, lease or convey all
or substantially all of our properties and assets to any person or persons      
unless:                                                                         

  .  Alliance Capital will be the continuing person, or, if Alliance Capital
  is not the continuing person, the resulting, surviving or transferee
 person, the "surviving entity", is a company organized and existing
    under the laws of the United States, any state of the United States or
   the District of Columbia and expressly assumes all of our obligations
     under the debt securities and the indenture by a supplemental indenture
in form and substance reasonably satisfactory to the trustee; and 

   .  immediately after such transaction, no event of default has occurred and
is continuing; and                                                

.  Alliance Capital or the surviving entity will have delivered to the  
      trustee an officer's certificate and opinion of counsel stating that the
  transaction and a supplemental indenture, if any, complies with this
     covenant and that all conditions precedent in the indenture relating to
the transaction or series of transactions have been satisfied.    

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If any merger or consolidation or any sale, lease or conveyance of all or 
substantially all of our assets occurs in accordance with the indenture, the    
successor corporation will succeed to, and be substituted for, and may exercise 
every right and power of Alliance Capital under the indenture with the same     
effect as if such successor corporation had been named as the issuer under the  
indenture.                                                                      

Events of Default                                                               

The indenture provides holders of debt securities with remedies if we fail
to perform specific obligations, such as making payments on the debt            
securities, or if we become bankrupt. You should review these provisions and    
understand which of our actions trigger an event of default and which actions   
do not. The indenture permits the issuance of debt securities in one or more    
series, and, generally, whether an event of default has occurred is determined  
on a series by series basis.                                                    

  An event of default is defined under the indenture, with respect to the debt
securities of any series, as being:                                             

  .  default in paying principal, or premium, if any, on the debt securities
of that series when due;                                          

   .  default in paying interest on the debt securities of that series when it
    becomes due and the default continues for a period of 30 days or more;

  .  default in the performance, or breach, of any covenant in the indenture
   (other than defaults specified in either of the two previous clauses)
 and the default or breach continues for a period of 60 days or more
     after we receive written notice from the trustee or from the holders of
at least 25% in aggregate principal amount of the outstanding debt
securities of the series;                                         

.  the occurrence of certain events of bankruptcy, insolvency,          
   reorganization, administration or similar proceedings with respect to
Alliance Capital or any designated subsidiary; or                 

.  any other events of default set forth in the prospectus supplement.  

If an event of default (other than an event of default under the indenture
specified in the fourth clause above) occurs with respect to the debt           
securities of any series and is continuing, then the trustee or the holders of  
at least 25% in principal amount of the outstanding debt securities of that     
series may by written notice, and the trustee at the request of the holders of  
not less than 25% in principal amount of the outstanding debt securities of     
such series will, require us to repay immediately the entire principal amount   
of the outstanding debt securities of that series (or such lesser amount as may 
be provided in the terms of the securities), together with all accrued and      
unpaid interest and premium, if any.                                            

If an event of default under the indenture specified in the fourth clause 
above occurs and is continuing, then the entire principal amount of the         
outstanding debt securities (or such lesser amount as may be provided in the    
terms of the securities) will automatically become due immediately and payable  
without any declaration or other act on the part of the trustee or any holder.  

 After a declaration of acceleration or any automatic acceleration under the
fourth clause above, the holders of a majority in principal amount of           
outstanding debt securities of that series may rescind the accelerated payment  
requirement if all existing events of default, except for nonpayment of the     
principal and interest on the debt securities of that series that has become    
due solely as a result of the accelerated payment requirement, have been cured  
or waived and if the rescission of acceleration would not conflict with any     
judgment or decree. The holders of a majority in principal amount of the        
outstanding debt securities of that series also have the right to waive past    
defaults, except a default in paying principal or interest on any outstanding   
debt security, or in respect of a covenant or a provision that cannot be        
modified or amended without the consent of all holders of the debt securities   
of that series.                                                                 

Holders of at least 25% in principal amount of the outstanding debt       
securities of a series may seek to institute a proceeding only after they have  
made written request, and offered reasonable indemnity, to the trustee to       
institute a proceeding and the trustee has failed to do so within 60 days after 
it received this notice. In addition,                                           

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within this 60-day period the trustee must not have received directions         
inconsistent with this written request by holders of a majority in principal    
amount of the outstanding debt securities of that series. These limitations do  
not apply, however, to a suit instituted by a holder of a debt security for the 
enforcement of the payment of principal, interest or any premium on or after    
the due dates for such payment.                                                 

During the existence of an event of default, the trustee is required to   
exercise the rights and powers vested in it under the indenture and use the     
same degree of care and skill in its exercise as a prudent person would under   
the circumstances in the conduct of that person's own affairs. If an event of   
default has occurred and is continuing, the trustee is not under any obligation 
to exercise any of its rights or powers at the request or direction of any of   
the holders unless the holders have offered to the trustee reasonable security  
or indemnity. Subject to certain provisions, the holders of a majority in       
principal amount of the outstanding debt securities of any series have the      
right to direct the time, method and place of conducting any proceeding for any 
remedy available to the trustee, or exercising any trust, or power conferred on 
the trustee.                                                                    

The trustee will, within 90 days after any default occurs, give notice of 
the default to the holders of the debt securities of that series, unless the    
default was already cured or waived. Unless there is a default in paying        
principal, interest or any premium when due, the trustee can withhold giving    
notice to the holders if it determines in good faith that the withholding of    
notice is in the interest of the holders.                                       

We are required to furnish to the trustee an annual statement as to       
compliance with all conditions and covenants under the indenture.               

Modification and Waiver                                                         

The indenture may be amended or modified without the consent of any holder
of debt securities in order to:                                                 

.  secure the debt securities of a series;                              

   .  provide for the assumption of our obligations in the case of a merger or
consolidation;                                                    

  .  make any change that would provide any additional rights or benefits to
the holders of the debt securities of a series;                   

.  cure ambiguities, defects or inconsistencies;                        

.  establish the forms or terms of debt securities of any series;       

.  evidence the acceptance of appointment by a successor trustee; or    

.  make any change that does not adversely affect the interests of the  
holders of the debt securities.                                   

Other amendments and modifications of the indenture or the debt securities
issued may be made with the consent of the holders of not less than a majority  
of the aggregate principal amount of the outstanding debt securities of each    
series affected by the amendment or modification. However, no modification or   
amendment may, without the consent of the holder of each outstanding debt       
security affected:                                                              

 .  reduce the principal amount, or modify the final maturity, of any debt
security, or reduce the amount payable upon redemption of the debt
securities;                                                       

 .  reduce the interest rate or extend the time for payment of interest on
the debt securities;                                              

   .  reduce the percentage in principal amount outstanding of debt securities
    of any series which must consent to an amendment, supplement or waiver
or consent to take any action;                                    

   .  change the currency in which principal, any premium or interest is paid;

.  modify or amend the provisions for conversion of any currency into   
another currency;                                                 

 .  reduce the amount of any original issue discount security payable upon
acceleration or provable in bankruptcy;                           

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 .  alter the terms on which holders of the debt securities may convert or
exchange debt securities for stock or other securities of Alliance
     Capital or of other entities or for other property or the cash value of
     the property, other than in accordance with the antidilution provisions
      or other similar adjustment provisions included in the terms of the debt
securities; or                                                    

   .  impair the right to institute suit for the enforcement of any payment on
the debt securities.                                              

Defeasance and Covenant Defeasance                                              

If we deposit, in trust, with the trustee (or other qualifying trustee),  
sufficient cash or specified government obligations to pay the principal of     
(and premium, if any) and interest and any other sums due on the scheduled due  
date for the debt securities of a particular series, then at our option and     
subject to certain conditions (including the absence of an event of default):   

.  we will be discharged from our obligations with respect to the debt  
      securities of such series, which we refer to as a "legal defeasance", or

 .  we will no longer be under any obligation to comply with the covenants
     described above under "Limitations on Liens" and "Consolidation, Merger
   or Sale of Assets" and an event of default relating to any failure to
   comply with such covenants will no longer apply to us with respect to
 such debt securities, which we refer to as a "covenant defeasance."

 If we exercise our legal defeasance option, payment of such debt securities
may not be accelerated because of an event of default. If we exercise our       
covenant defeasance option, payment of such debt securities may not be          
accelerated by reference to the covenants from which we have been released or   
pursuant to an event of default referred to above which is no longer            
applicable. If we fail to comply with our remaining obligations with respect to 
such debt securities under the indenture after we exercise the covenant         
defeasance option and such debt securities are declared due and payable because 
of the occurrence of an event of default, the amount of money and government    
obligations on deposit with the trustee may be insufficient to pay amounts due  
on such debt securities at the time of the acceleration resulting from such     
event of default. However, we will remain liable for such payments.             

Under current United States federal income tax laws, a legal defeasance   
would be treated as a taxable event in which holders of those debt securities   
might recognize gain or loss. Unless accompanied by other changes in the terms  
of the debt securities, a covenant defeasance generally should not be treated   
as a taxable exchange. In order to exercise our defeasance options, we must     
deliver to the trustee an opinion of counsel to the effect that the deposit and 
related defeasance would not cause the holders of the debt securities to        
recognize income, gain or loss for federal income tax purposes.                 

Concerning our Relationship with the Trustees                                   

We and our subsidiaries maintain ordinary banking relationships and credit
facilities with The Bank of New York.                                           

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DESCRIPTION OF DEBT WARRANTS  

  We may issue debt warrants for the purchase of debt securities. We may offer
debt warrants separately or together with one or more additional debt warrants  
or debt securities, as described in the applicable prospectus supplement. As    
explained below, each debt warrant will entitle its holder to purchase debt     
securities at an exercise price set forth in, or to be determinable as set      
forth in, the related prospectus supplement.                                    

The debt warrants are to be issued under debt warrant agreements to be    
entered into between us and one or more banks or trust companies, as debt       
warrant agent, all as will be set forth in the prospectus supplement relating   
to the debt warrants being offered by the prospectus supplement. A form of debt 
warrant agreement, including a form of debt warrant certificate representing    
the debt warrants, reflecting the alternative provisions that may be included   
in the debt warrant agreements to be entered into with respect to particular    
offerings of debt warrants, is included as an exhibit to the registration       
statement of which this prospectus forms a part. See "Where You Can Find More   
Information" above for information on how to obtain a copy of the form of debt  
warrant agreement.                                                              

Terms of the Debt Warrants to be Described in the Prospectus Supplement         

The particular terms of each issue of debt warrants, the applicable debt  
warrant agreement relating to the debt warrants and the debt warrant            
certificates representing debt warrants will be described in the applicable     
prospectus supplement. This description will include:                           

   .  the specific designation and aggregate number of, and the price at which
we will issue, the debt warrants;                                 

.  the currency with which the debt warrants may be purchased;          

   .  the date on which the right to exercise the debt warrants will begin and
      the date on which that right will expire or, if you may not continuously
     exercise the debt warrants throughout that period, the specific date or
dates on which you may exercise the debt warrants;                

 .  whether the debt warrants will be issued in definitive or global form;

   .  any applicable United States federal income tax consequences, including,
but not limited to:                                               

    .  whether and under what circumstances we will pay additional amounts
      on debt securities that may be purchased upon exercise of the debt
      warrants and are held by a person who is not a U.S. person for any
       tax, assessment or governmental charge withheld or deducted and, if
       so, whether we will have the option to redeem those debt securities
rather than pay the additional amounts;                     

      .  tax considerations applicable to any discounted debt securities or to
        debt securities issued at par that may be purchased upon exercise of
         the debt warrants and are treated as having been issued at a discount
for United States federal income tax purposes;              

 .  tax considerations applicable to any debt securities that may be
        purchased upon exercise of the debt warrants and are denominated and
payable in foreign currencies; and                          

  .  the identity of the debt warrant agent for the debt warrants and of any
other depositaries, execution or paying agents, transfer agents,  
registrars, determination, or other agents;                       

.  the proposed listing, if any, of the debt warrants or any securities 
purchasable upon exercise of the debt warrants on any securities  
exchange;                                                         

   .  if applicable, the designation, aggregate principal amount, currency and
     terms of the debt securities that may be purchased upon exercise of the
debt warrants;                                                    

.  if applicable, the designation and terms of the debt securities with 
    which the debt warrants are issued and the number of the debt warrants
issued with each of the debt securities;                          

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.  if applicable, the date on and after which the debt warrants and the 
related debt securities will be separately transferable;          

.  if applicable, any anti-dilution provisions; and                     

.  any other terms of the debt warrants.                                

Exercise of Debt Warrants                                                   

Unless otherwise provided in the related prospectus supplement, each debt 
warrant will entitle the holder of debt warrants to purchase for cash the       
principal amount of debt securities at the exercise price that will in each     
case be set forth in, or be determinable as set forth in, the related           
prospectus supplement. Debt warrants may be exercised at any time up to the     
close of business on the expiration date specified in the prospectus supplement 
relating to the debt warrants. After the close of business on the expiration    
date or any later date to which the expiration date may be extended by us,      
unexercised debt warrants will become void.                                     

Debt warrants may be exercised as set forth in the prospectus supplement  
relating to the debt warrants. Upon receipt of payment and the debt warrant     
certificate properly completed and duly executed at the corporate trust office  
of the debt warrant agent or any other office indicated in the prospectus       
supplement, we will, as soon as practicable, forward the debt securities        
purchasable upon exercise of the debt warrants to the person entitled to them.  
If fewer than all of the debt warrants represented by the debt warrant          
certificate are exercised, a new debt warrant certificate will be issued for    
the remaining amount of debt warrants.                                          

If you hold your interest in a debt warrant indirectly, you should check  
with the institution through which you hold your interest in the debt warrant   
to determine how these provisions will apply to you.                            

Significant Provisions of the Debt Warrant Agreements                           

  We will issue the debt warrants under one or more debt warrant agreements to
be entered into between us and a bank or trust company, as debt warrant agent,  
in one or more series, which will be described in the prospectus supplement for 
the debt warrants. The forms of debt warrant agreements are filed as exhibits   
to the registration statement. The following summaries of significant           
provisions of the debt warrant agreements and the debt warrants are not         
intended to be comprehensive and holders of debt warrants should review the     
detailed provisions of the relevant debt warrant agreement for a full           
description and for other information regarding the debt warrants.              

Modifications without Consent of Debt Warrant Holders. We and the debt    
warrant agent may amend the terms of the debt warrants and the debt warrant     
certificates without the consent of the holders to:                             

.  cure any ambiguity,                                                  

  .  cure, correct or supplement any defective or inconsistent provision, or

.  amend the terms in any other manner which we may deem necessary or   
desirable and which will not adversely affect the interests of the
affected holders in any material respect.                         

 Modifications with Consent of Debt Warrant Holders. We and the debt warrant
agent, with the consent of the holders of not less than a majority in number of 
the then outstanding unexercised debt warrants affected, may modify or amend    
the debt warrant agreement. However, we and the debt warrant agent may not make 
any of the following modifications or amendments without the consent of each    
affected debt warrant holder:                                                   

.  change the exercise price of the debt warrants;                      

.  reduce the amount or number receivable upon exercise, cancellation or
expiration of the debt warrants other than in accordance with the 
     antidilution provisions or other similar adjustment provisions included
in the terms of the debt warrants;                                

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.  shorten the period of time during which the debt warrants may be     
exercised;                                                        

   .  materially and adversely affect the exercise rights of the owners of the
debt warrants; or                                                 

  .  reduce the percentage of outstanding debt warrants the consent of whose
    owners is required for the modification of the applicable debt warrant
agreement.                                                        

Consolidation, Merger or Sale of Assets. If at any time we merge or       
consolidate with another entity or transfer substantially all of our assets,    
the successor entity will succeed to and assume all of our obligations under    
each debt warrant agreement and the debt warrant certificates. We will then be  
relieved of any further obligation under each of those debt warrant agreements  
and the debt warrants issued under those debt warrant agreements. See           
"Description of Debt Securities--Covenants-Consolidation, Merger or Sale of     
Assets."                                                                        

Enforceability of Rights of Debt Warrant Holders. The debt warrant agents 
will act solely as our agents in connection with the debt warrant certificates  
and will not assume any obligation or relationship of agency or trust for or    
with any holders of debt warrant certificates or beneficial owners of debt      
warrants. Any holder of debt warrant certificates and any beneficial owner of   
debt warrants may, without the consent of any other person, enforce by          
appropriate legal action, on its own behalf, its right to exercise the debt     
warrants evidenced by the debt warrant certificates in the manner provided for  
in that series of debt warrants or pursuant to the applicable debt warrant      
agreement. No holder of any debt warrant certificate or beneficial owner of any 
debt warrants will be entitled to any of the rights of a holder of the debt     
securities or any other debt warrant property purchasable upon exercise of the  
debt warrants, including, without limitation, the right to receive the payments 
on those debt securities or other debt warrant property or to enforce any of    
the covenants or rights in the relevant indenture or any other similar          
agreement.                                                                      

Registration and Transfer of Debt Warrants. Subject to the terms of the   
applicable debt warrant agreement, debt warrants in registered, definitive form 
may be presented for exchange and for registration of transfer, at the          
corporate trust office of the debt warrant agent for that series of debt        
warrants, or at any other office indicated in the prospectus supplement         
relating to that series of debt warrants, without service charge. However, the  
holder will be required to pay any taxes and other governmental charges as      
described in the debt warrant agreement. The transfer or exchange will be       
effected only if the debt warrant agent for the series of debt warrants is      
satisfied with the documents of title and identity of the person making the     
request.                                                                        

New York Law to Govern. The debt warrants and each debt warrant agreement 
will be governed by, and construed in accordance with, the laws of the State of 
New York.                                                                       

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FORMS OF SECURITIES 

Each debt security and debt warrant will be represented either by a       
certificate issued in definitive form to a particular investor or by one or     
more global securities representing the entire issuance of securities.          
Certificated securities in definitive form and global securities will be issued 
in registered form. Definitive securities name you or your nominee as the owner 
of the security, and in order to transfer or exchange these securities or to    
receive payments other than interest or other interim payments, you or your     
nominee must physically deliver the securities to the trustee, registrar,       
paying agent or other agent, as applicable. Global securities name a depositary 
or its nominee as the owner of the debt securities and debt warrants            
represented by these global securities. The depositary maintains a computerized 
system that will reflect each investor's beneficial ownership of the securities 
through an account maintained by the investor with its broker/dealer, bank,     
trust company or other representative, as we explain more fully below.          

Global Securities                                                               

Registered Global Securities.  We may issue the registered debt securities
and debt warrants in the form of one or more fully registered global securities 
that will be deposited with a depositary or its nominee identified in the       
applicable prospectus supplement and registered in the name of that depositary  
or nominee. In those cases, one or more registered global securities will be    
issued in a denomination or aggregate denominations equal to the portion of the 
aggregate principal or face amount of the securities to be represented by       
registered global securities. Unless and until it is exchanged in whole for     
securities in definitive registered form, a registered global security may not  
be transferred except as a whole by and among the depositary for the registered 
global security, the nominees of the depositary or any successors of the        
depositary or those nominees.                                                   

If not described below, any specific terms of the depositary arrangement  
with respect to any securities to be represented by a registered global         
security will be described in the prospectus supplement relating to those       
securities. We anticipate that the following provisions will apply to all       
depositary arrangements.                                                        

Ownership of beneficial interests in a registered global security will be 
limited to persons, called participants, that have accounts with the depositary 
or persons that may hold interests through participants. Upon the issuance of a 
registered global security, the depositary will credit, on its book-entry       
registration and transfer system, the participants' accounts with the           
respective principal or face amounts of the securities beneficially owned by    
the participants. Any dealers, underwriters or agents participating in the      
distribution of the securities will designate the accounts to be credited.      
Ownership of beneficial interests in a registered global security will be shown 
on, and the transfer of ownership interests will be effected only through,      
records maintained by the depositary, with respect to interests of              
participants, and on the records of participants, with respect to interests of  
persons holding through participants. The laws of some states may require that  
some purchasers of securities take physical delivery of these securities in     
definitive form. These laws may impair your ability to own, transfer or pledge  
beneficial interests in registered global securities.                           

So long as the depositary, or its nominee, is the registered owner of a   
registered global security, that depositary or its nominee, as the case may be, 
will be considered the sole owner or holder of the securities represented by    
the registered global security for all purposes under the indenture or debt     
warrant agreement. Except as described below, owners of beneficial interests in 
a registered global security will not be entitled to have the securities        
represented by the registered global security registered in their names, will   
not receive or be entitled to receive physical delivery of the securities in    
definitive form and will not be considered the owners or holders of the         
securities under the indenture or debt warrant agreement. Accordingly, each     
person owning a beneficial interest in a registered global security must rely   
on the procedures of the depositary for that registered global security and, if 
that person is not a participant, on the procedures of the participant through  
which the person owns its interest, to exercise any rights of a holder under    
the applicable indenture or debt warrant agreement. We understand that under    
existing industry practices, if we request any action of holders or if an owner 
of a beneficial interest in a registered global security desires to give or     
take any action that a holder is entitled to give or take under the applicable  
indenture or debt warrant agreement, the depositary for the registered          

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global security would authorize the participants holding the relevant           
beneficial interests to give or take that action, and the participants would    
authorize beneficial owners owning through them to give or take that action or  
would otherwise act upon the instructions of beneficial owners holding through  
them.                                                                           

Principal, premium, if any, and interest payments on debt securities, and 
any payments to holders with respect to debt warrants, represented by a         
registered global security registered in the name of a depositary or its        
nominee will be made to the depositary or its nominee, as the case may be, as   
the registered owner of the registered global security. None of Alliance        
Capital, the trustee, the debt warrant agent or any agent of Alliance Capital,  
the trustee or the debt warrant agent will have any responsibility or liability 
for any aspect of the records relating to payments made on account of           
beneficial ownership interests in the registered global security or for         
maintaining, supervising or reviewing any records relating to those beneficial  
ownership interests.                                                            

We expect that the depositary for any of the securities represented by a  
registered global security, upon receipt of any payment of principal, premium,  
interest or other distribution of underlying securities or other property to    
holders on that registered global security, will immediately credit             
participants' accounts in amounts proportionate to their respective beneficial  
interests in that registered global security as shown on the records of the     
depositary. We also expect that payments by participants to owners of           
beneficial interests in a registered global security held through participants  
will be governed by standing customer instructions and customary practices, as  
is now the case with the securities held for the accounts of customers in       
bearer form or registered in "street name," and will be the responsibility of   
those participants.                                                             

If the depositary for any of these securities represented by a registered 
global security is at any time unwilling or unable to continue as depositary or 
ceases to be a clearing agency registered under the Securities Exchange Act of  
1934, and a successor depositary registered as a clearing agency under the      
Securities Exchange Act of 1934 is not appointed by us within 90 days, we will  
issue securities in definitive form in exchange for the registered global       
security that had been held by the depositary. In addition, we may at any time  
and in our sole discretion decide not to have any of the securities represented 
by one or more registered global securities. If we make that decision, we will  
issue securities in definitive form in exchange for all of the registered       
global security or securities representing those securities. Any securities     
issued in definitive form in exchange for a registered global security will be  
registered in the name or names that the depositary gives to the trustee, debt  
warrant agent or other relevant agent of ours or theirs. It is expected that    
the depositary's instructions will be based upon directions received by the     
depositary from participants with respect to ownership of beneficial interests  
in the registered global security that had been held by the depositary.         

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PLAN OF DISTRIBUTION  

  We may sell the securities in any of three ways (or in any combination): (a)
through underwriters or dealers; (b) directly to a limited number of purchasers 
or to a single purchaser; or (c) through agents. The prospectus supplement will 
set forth the terms of the offering of such securities, including               

(a) the name or names of any underwriters, dealers or agents and the
amounts of securities underwritten or purchased by each of them,          

    (b) the initial public offering price of the securities and the proceeds
 to us and any discounts, commissions or concessions allowed or reallowed or
paid to dealers, and                                                      

(c) any securities exchanges on which the securities may be listed. 

Any initial public offering price and any discounts or concessions allowed
or reallowed or paid to dealers may be changed from time to time.               

 If underwriters are used in the sale of any securities, the securities will
be acquired by the underwriters for their own account and may be resold from    
time to time in one or more transactions, including negotiated transactions, at 
a fixed public offering price or at varying prices determined at the time of    
sale. The securities may be either offered to the public through underwriting   
syndicates represented by managing underwriters, or directly by underwriters.   
Generally, the underwriters' obligations to purchase the securities will be     
subject to certain conditions precedent. The underwriters will be obligated to  
purchase all of the securities if they purchase any of the securities.          

 We may sell the securities through agents from time to time. The prospectus
supplement will name any agent involved in the offer or sale of the securities  
and any commissions we pay to them. Generally, any agent will be acting on a    
best efforts basis for the period of its appointment.                           

We may authorize underwriters, dealers or agents to solicit offers by     
certain purchasers to purchase the securities from Alliance Capital at the      
public offering price set forth in the prospectus supplement pursuant to        
delayed delivery contracts providing for payment and delivery on a specified    
date in the future. The contracts will be subject only to those conditions set  
forth in the prospectus supplement, and the prospectus supplement will set      
forth any commissions we pay for solicitation of these contracts.               

Agents and underwriters may be entitled to indemnification by us against  
certain civil liabilities, including liabilities under the Securities Act, or   
to contribution with respect to payments which the agents or underwriters may   
be required to make in respect thereof. Agents and underwriters may be          
customers of, engage in transactions with, or perform services for us in the    
ordinary course of business.                                                    

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LEGAL MATTERS 

 The validity of the securities in respect of which this prospectus is being
delivered will be passed upon for us by Davis Polk & Wardwell, New York, New    
York.                                                                           

EXPERTS 

  The consolidated statements of financial condition of Alliance Capital as of
December 31, 2000 and 1999, and the related consolidated statements of income,  
changes in partners' capital and comprehensive income and cash flows for the    
year ended December 31, 2000 and the two-month period ended December 31, 1999,  
and the consolidated statements of income, partners' capital and comprehensive  
income and cash flows of Alliance Holding, the predecessor to Alliance Capital, 
for the ten-month period ended October 29, 1999 and the consolidated statements 
of income, changes in partners' capital and comprehensive income and cash flows 
for the year ended December 31, 1998, appearing in the Alliance Capital 10-K    
for the year ended December 31, 2000 and incorporated by reference into this    
registration statement have been audited by KPMG LLP, independent accountants,  
as set forth in their report thereon incorporated by reference herein, and are  
included in reliance upon such report given upon the authority of such firm as  
experts in accounting and auditing.                                             

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[LOGO] Alliance/r/                                                              

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘424B2’ Filing		Date		First		Last			Other Filings
		8/15/06		1		38
		2/15/02		3		38			8-K
		1/1/02		24
Filed as of:		8/10/01		1		38			8-K
Filed on:		8/9/01
		8/7/01		1
		7/30/01		1		45
		6/30/01		4		25			10-Q
		6/22/01		37
		5/14/01		35					10-Q
		5/3/01		47					8-K
		4/25/01		37
		3/31/01		10		47			10-Q
		2/7/01		47					8-K
		1/18/01		47					8-K
		1/9/01		47					8-K
		1/1/01		24
		12/31/00		7		61			10-K
		11/3/00		33					8-K
		10/2/00		4		26			8-K
		6/30/00		7		25			10-Q,  SC 13D
		6/21/00		20		26			8-K
		3/31/00		11					10-Q
		1/1/00		17
		12/31/99		7		61			10-K
		10/29/99		7		61
		12/31/98		7		61
		3/11/98		4		26
		2/19/98		4		26
		12/31/97		7
		12/31/96		7
		12/31/95		28
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