FORM 10-Q

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 1994
------------------------------------------------

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the transition period from to
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Commission File No. 1-9818
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ALLIANCE CAPITAL MANAGEMENT L.P.
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)

DELAWARE 13-3434400
- -------------------------------- ------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

1345 AVENUE OF THE AMERICAS, NEW YORK, NY 10105
- -------------------------------------------------------------------------------
(Address of principal executive offices)
(Zip Code)

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

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

Yes X No
--------- ---------

The number of Units representing assignments of beneficial ownership of Limited
Partnership Interests outstanding as of June 30, 1994 was 73,002,660 Units.

ALLIANCE CAPITAL MANAGEMENT L.P.

INDEX TO FORM 10-Q

PART I

FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS PAGE
----

Condensed Consolidated Statements of Financial Condition 2

Condensed Consolidated Statements of Income 3

Condensed Consolidated Statements of Changes in
Partners' Capital 4

Condensed Consolidated Statements of Cash Flows 5

Notes to Condensed Consolidated Financial Statements 6-9

Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 10-14

Part II

OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS 15

Item 2. CHANGES IN SECURITIES 15

Item 3. DEFAULTS UPON SENIOR SECURITIES 15

Item 4. SUBMISSION OF MATTERS TO A VOTE OF 15
SECURITY HOLDERS

Item 5. OTHER INFORMATION 15

Item 6. EXHIBITS AND REPORTS ON FORM 8-K 15

- 1 -

PART I

FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

ALLIANCE CAPITAL MANAGEMENT L.P.
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(UNAUDITED)
(IN THOUSANDS)

ASSETS 6/30/94 12/31/93
------- --------

Cash and cash equivalents....................... $ 86,089 $ 96,315
Fees receivable:
Alliance mutual funds......................... 25,227 29,594
Other affiliated clients...................... 9,361 17,262
Institutional clients......................... 41,052 40,685
Receivable from brokers and dealers for sale
of shares of Alliance mutual funds............ 37,760 103,921
Other receivables............................... 5,948 4,894
Investments in Alliance mutual funds............ 41,341 56,552
Other investments............................... 4,949 4,966
Furniture, equipment and leasehold
improvements, net............................. 35,380 28,767
Intangible assets, net.......................... 97,276 30,707
Deferred sales commissions, net................. 164,506 140,558
Prepaid expenses and other assets............... 10,292 7,066
-------- --------
Total assets.............................. $559,181 $561,287
-------- --------
-------- --------

LIABILITIES AND PARTNERS' CAPITAL

Liabilities:
Accounts payable and accrued expenses........... $ 61,482 $ 56,526
Payable to Alliance mutual funds for share
purchases..................................... 57,760 145,684
Accrued expenses under employee benefit plans... 59,171 35,597
Debt............................................ 109,153 109,435
-------- --------
Total liabilities......................... 287,566 347,242

Partners' capital................................. 271,615 214,045
-------- --------
Total liabilities and partners' capital... $559,181 $561,287
-------- --------
-------- --------

See accompanying notes to condensed consolidated financial statements.

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ALLIANCE CAPITAL MANAGEMENT L.P.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)
(IN THOUSANDS, EXCEPT PER UNIT AMOUNTS)

THREE MONTHS ENDED SIX MONTHS ENDED
------------------------ ------------------------
6/30/94 6/30/93 6/30/94 6/30/93
-------- -------- -------- --------

Revenues:
Investment advisory and services fees:
Alliance mutual funds............................ $ 52,706 $ 38,963 $103,617 $ 76,409
Other affiliated clients......................... 9,533 8,273 20,498 15,928
Institutional clients............................ 40,856 34,361 79,639 69,788
Distribution plan fees from Alliance mutual funds.. 34,140 23,668 68,785 46,107
Shareholder servicing and administration fees...... 10,291 8,202 20,025 15,632
Other revenues..................................... 1,347 1,717 4,874 3,745
-------- -------- -------- --------
148,873 115,184 297,438 227,609
-------- -------- -------- --------

Expenses:
Employee compensation and benefits................. 42,637 33,528 85,026 68,797
General and administrative......................... 17,168 17,039 33,592 33,841
Interest........................................... 2,205 2,665 4,428 5,400
Promotion and servicing:
Distribution plan payments to financial
intermediaries:
Affiliated..................................... 5,007 3,054 9,963 5,947
Unaffiliated................................... 20,964 14,521 43,302 28,705
Amortization of deferred sales commissions....... 12,883 8,439 24,863 16,386
Other............................................ 11,255 7,281 23,463 13,664
Amortization of intangible assets.................. 2,186 1,745 4,077 3,488
Nonrecurring transaction expenses.................. -- 33,542 -- 40,842
-------- -------- -------- --------
114,305 121,814 228,714 217,070
-------- -------- -------- --------

Income (loss) before income taxes and cumulative
effect of accounting change........................ 34,568 (6,630) 68,724 10,539

Income taxes....................................... 2,297 3,008 5,029 4,482
-------- -------- -------- --------

Income (loss) before cumulative effect of
accounting change.................................. 32,271 (9,638) 63,695 6,057
Cumulative effect of change in accounting
for income taxes................................. -- -- -- 900
-------- -------- -------- --------

Net income (loss).................................... $ 32,271 $(9,638) $ 63,695 $ 6,957
-------- -------- -------- --------
-------- -------- -------- --------

Earnings per Unit:
Income (loss) before cumulative effect of
accounting change................................ $ 0.42 $ (0.14) $ 0.83 $ 0.09
Cumulative effect of change in accounting
for income taxes................................. -- -- -- .01
-------- -------- -------- --------
Net income (loss) per Unit......................... $ 0.42 $ (0.14) $ 0.83 $ 0.10
-------- -------- -------- --------
-------- -------- -------- --------

Weighted average number of Units and Unit
equivalents outstanding............................ 75,555 70,828 75,858 70,793
-------- -------- -------- --------
-------- -------- -------- --------

See accompanying notes to condensed consolidated financial statements.

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ALLIANCE CAPITAL MANAGEMENT L.P.
CONDENSED CONSOLIDATED STATEMENTS OF
CHANGES IN PARTNERS' CAPITAL

(UNAUDITED)
(IN THOUSANDS)

THREE MONTHS ENDED SIX MONTHS ENDED
------------------------ ------------------------
6/30/94 6/30/93 6/30/94 6/30/93
-------- -------- -------- --------

Partners' capital - beginning of period............... $216,846 $159,251 $214,045 $160,626

Net income (loss)................................... 32,271 (9,638) 63,695 6,957

Capital contribution received from Alliance
Capital Management Corporation.................... 901 288 1,377 805

Distributions to partners........................... (29,962) (19,555) (59,887) (38,510)

Proceeds from sale of Class B Limited Partnership
Interest to ELAS.................................. 50,000 -- 50,000 --

Unit options exercised.............................. 1,560 1,128 2,374 1,553

Foreign currency translation adjustment............. (1) 494 11 537
-------- -------- -------- --------
Partners' capital - end of period..................... $271,615 $131,968 $271,615 $131,968
-------- -------- -------- --------
-------- -------- -------- --------

See accompanying notes to condensed consolidated financial statements.

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ALLIANCE CAPITAL MANAGEMENT L.P.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)
(in thousands, except per Unit amounts)

SIX MONTHS ENDED
------------------------
6/30/94 6/30/93
--------- ---------

Cash flows from operating activities:
Net income ................................................ $ 63,695 $ 6,957
Adjustments to reconcile net income to
net cash provided from operating activities:
Amortization and depreciation............................ 32,651 23,477
Deferred compensation expense............................ 2,384 1,703
Nonrecurring transaction expenses........................ -- 15,442
Cumulative effect of change in accounting for
income taxes........................................... -- (900)
Other, net............................................... 227 (508)
Changes in assets and liabilities:
Decrease in fees receivable from Alliance mutual funds,
other affiliated clients and institutional clients... 15,673 2,731
(Increase) decrease in receivables from brokers and
dealers for sale of shares of Alliance mutual funds.. 66,161 (84,315)
Increase (decrease) in other receivables............... (976) 4,459
(Increase) in deferred sales commissions............... (48,811) (25,078)
(Increase) decrease in prepaid expenses and
other assets......................................... (3,608) 152
Increase in accounts payable and accrued expenses...... 3,029 13,967
Increase (decrease) in payable to Alliance
mutual funds for share purchases..................... (87,924) 100,021
Increase in accrued expenses under employee benefit
plans, less deferred compensation.................... 22,302 15,822
-------- --------
Net cash provided from operating activities........ 64,803 73,930
-------- --------

Cash flows from investing activities:
Purchase of Alliance mutual funds ........................ (25,409) (28,338)
Proceeds from sale of Alliance mutual funds............... 40,620 3,100
Acquisition of Shields and Regent ........................ (73,570) --
Increase (decrease) in other investments.................. (213) 1,365
Additions to furniture, equipment and
leasehold improvements, net............................. (9,172) (4,085)
-------- --------
Net cash used in investing activities.............. (67,744) (27,958)
-------- --------

Cash flows from financing activities:
Proceeds from borrowings.................................. 70,094 --
Repayment of debt......................................... (70,142) (351)
Distributions to partners................................. (59,887) (38,510)
Proceeds from sale of Class B Limited Partnership
Interest to ELAS........................................ 50,000 --
Capital contribution received from Alliance Capital
Management Corporation.................................. 265 265
Unit options exercised.................................... 2,374 1,553
-------- --------
Net cash used in financing activities.............. (7,296) (37,043)
-------- --------

Effect of exchange rate changes on cash and
cash equivalents.......................................... 11 415
-------- --------

Net increase (decrease) in cash and cash equivalents........ (10,226) 9,344
Cash and cash equivalents at beginning of period............ 96,315 76,787
-------- --------
Cash and cash equivalents at end of period.................. $ 86,089 $ 86,131
-------- --------
-------- --------

See accompanying notes to condensed consolidated financial statements.

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ALLIANCE CAPITAL MANAGEMENT L.P.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1994

(unaudited)

1. BASIS OF PRESENTATION

The unaudited interim condensed consolidated financial statements of
Alliance Capital Management L.P. ("Partnership") included herein have been
prepared in accordance with the instructions to Form 10-Q pursuant to the
rules and regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations. In the opinion of management, all adjustments, consisting
only of normal recurring adjustments, necessary for a fair presentation of
(a) financial position at June 30, 1994, (b) results of operations for the
three and six months ended June 30, 1994 and 1993 and (c) cash flows for
the six months ended June 30, 1994 and 1993, have been made.

2. RECLASSIFICATIONS

Certain prior period amounts have been reclassified to conform to the
current period presentation.

3. ACQUISITIONS

On March 7, 1994, the Partnership completed the acquisition of the
business and substantially all of the assets of Shields Asset Management,
Incorporated ("Shields") and its wholly-owned subsidiary, Regent Investor
Services Incorporated ("Regent"), from Xerox Financial Services, Inc. for
a purchase price of approximately $74 million in cash, including $.6
million in acquisition costs. In addition, the Partnership issued 645,160
new Units to key employees of Shields and Regent having an aggregate value
of approximately $15 million in connection with the employees entering
into long-term employment agreements with the Partnership. The aggregate
value of these Units is being amortized as employee compensation expense
ratably over five years. The acquisition was accounted for under the
purchase method with the results of Shields and Regent included from the
acquisition date. Goodwill of $70.6 million was recorded which represents
the excess of the purchase price, including acquisition expenses, over the
estimated fair value of the net assets of the acquired business.

On July 22, 1993, Alliance Capital Management L.P. (the "Partnership")
acquired the business and substantially all of the assets of Equitable
Capital Management Corporation ("ECMC"), an indirect wholly-owned
subsidiary of The Equitable Companies Incorporated ("Equitable"). The
acquisition was accounted for in a manner similar to the pooling of
interests method and, accordingly, consolidated financial information for
the three and six months ended June 30, 1993 has been restated to include
the results of operations of ECMC.

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4. INTANGIBLE ASSETS

Intangible assets, consisting principally of goodwill and client files,
are being amortized on a straight line basis over their estimated useful
lives ranging from twelve to forty years. The Partnership periodically
evaluates the value or recoverability of the carrying amount of its
intangible assets utilizing forecasted undiscounted cash flows.

5. DEFERRED SALES COMMISSIONS

Sales commissions paid to financial intermediaries in connection with the
sale of shares of mutual funds managed by the Partnership ("Alliance
mutual funds") sold without a front-end sales charge are capitalized and
amortized over periods not exceeding five and one half years, which
approximate the periods of time during which the sales commissions are
expected to be recovered from distribution plan payments received from the
Alliance mutual funds and contingent deferred sales charges received from
shareholders of the Alliance mutual funds. Contingent deferred sales
charges reduce unamortized deferred sales commissions when received.

6. DEBT

Debt includes two series of senior notes: Series A aggregating
$80,000,000 with principal payments of $20,000,000, $25,000,000,
$10,000,000 and $25,000,000 due on December 30 of each of the years 1994
through 1997, respectively; and Series B aggregating $25,000,000 payable
on September 30, 1996. Interest on the Series A and Series B senior notes
is paid semi-annually at annual rates of 7.0% and 7.35%, respectively.
The senior note agreements contain covenants which require the
Partnership, among other things, to meet certain financial ratios and to
maintain minimum tangible partners' capital. The Partnership will prepay
the senior notes in full during August 1994.

During February 1994, the Partnership established a $100,000,000 revolving
credit facility with several banks. The revolving credit facility
converts on March 31, 1997 into a term loan repayable in equal
installments quarterly through March 31, 1999. Outstanding borrowings
generally bear interest at the Eurodollar Rate plus .875% per annum
through March 31, 1997 and at the Eurodollar Rate plus 1.125% per annum
after conversion through March 31, 1999. In addition, a quarterly
commitment fee of .25% per annum is paid on the average daily unused
amount. The revolving credit facility contains covenants which require
the Partnership, among other things, to meet certain financial ratios. At
June 30, 1994, there were no amounts outstanding under the facility.

Debt also includes promissory notes contributed to certain investment
partnerships in the aggregate principal amount of $3,875,000 at June 30,
1994. The principal amounts of the notes will be reduced proportionately
as partners receive return of capital distributions from the investment
partnerships.

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7. INCOME TAXES

The Partnership is a publicly traded partnership for Federal income tax
purposes and, accordingly, is not currently subject to Federal and state
corporate income taxes but is subject to the New York City unincorporated
business tax. Current law generally provides that certain publicly traded
partnerships, including the Partnership, will be taxable as a corporation
beginning in 1998.

Domestic corporate subsidiaries of the Partnership, which are subject to
Federal, state and local income taxes, file a consolidated Federal income
tax return and separate state and local income tax returns. Foreign
corporate subsidiaries are generally subject to taxes in the foreign
jurisdictions where they are located.

ECMC is included in the Federal income tax return of Equitable and, prior
to its acquisition by the Partnership, a Federal income tax equivalent
provision was computed on a separate return basis. In addition, ECMC
filed separate state and local income tax returns.

The provision for income taxes is comprised of (in thousands):

THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------ -----------------
1994 1993 1994 1993
------ ------ ------ ------

Partnership................ $2,297 $ 795 $5,029 $1,729
ECMC....................... -- 2,213 -- 2,753
------ ------ ------ ------
$2,297 $3,008 $5,029 $4,482
------ ------ ------ ------
------ ------ ------ ------

8. NET INCOME PER UNIT

Net income per Unit is computed by reducing net income by 1% for the 1%
general partnership interest held by the General Partner and dividing the
remaining 99% by the weighted average number of Units, Units issuable upon
conversion of the Class A and Class B Limited Partnership Interests, and
Unit equivalents outstanding during each period.

9. SUPPLEMENTAL CASH FLOW INFORMATION

Cash payments for interest and income taxes were as follows (in
thousands):

THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------ -----------------
1994 1993 1994 1993
------ ------ ------ ------

Interest................... $4,320 $4,780 $5,013 $5,317
Income taxes............... 3,555 3,032 6,159 4,760

- 8 -

The 1994 consolidated statement of cash flows does not include the
issuance by the Partnership of new Units to key employees of Shields and
Regent having an aggregate value of approximately $15 million in
connection with their entering into long-term employment agreements since
this transaction did not provide or use cash.

10. SUBSEQUENT EVENTS

On July 1, 1994, the Partnership issued 2,482,030 newly issued Units to a
wholly-owned subsidiary of Oversea-Chinese Banking Corporation Limited
("OCBC") for $50 million in cash.

On July 21, 1994, the Board of Directors of the General Partner declared a
distribution of $31,213,000 or $.41 per Unit representing the Available
Cash Flow (as defined in the Partnership Agreement) of the Partnership for
the three months ended June 30, 1994. The distribution was paid on August
8, 1994 to holders of record on August 1, 1994.

On July 15, 1994, the Partnership gave notice to the holders of its senior
notes that it will prepay the senior notes in full during August 1994.

- 9 -

Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

The Partnership acquired the business and substantially all of the assets of
Equitable Capital Management Corporation ("ECMC") on July 22, 1993. The
acquisition was accounted for in a manner similar to the pooling of interests
method and, accordingly, the condensed consolidated financial statements of the
Partnership and its subsidiaries for the three and six months ended June 30,
1993 have been restated to include the results of operations of ECMC. On March
7, 1994, the Partnership acquired the business and substantially all of the
assets of Shields Asset Management, Incorporated ("Shields") and its
wholly-owned subsidiary, Regent Investor Services, Incorporated ("Regent"), from
Xerox Financial Services, Inc. for a purchase price of approximately $74 million
in cash, including $.6 million in acquisition costs. The acquisition was
accounted for under the purchase method with the results of Shields and Regent
included in the Partnership's condensed consolidated financial statements from
the acquisition date.

THREE MONTHS ENDED JUNE 30, 1994 COMPARED TO THREE MONTHS ENDED JUNE 30, 1993

The Partnership recorded net income for the three months ended June 30, 1994 of
$32.3 million or $.42 per Unit, compared to a net loss of $9.6 million or $.14
per Unit for the three months ended June 30, 1993. Net income for the three
months ended June 30, 1993 includes a charge of $33.5 million for expenses
incurred in connection with the acquisition of ECMC. Excluding this
nonrecurring item, net income for the three months ended June 30, 1994 increased
37.2% over net income of $23.5 million, or $.33 per Unit, for the prior year
period.

Assets under management by the Partnership at June 30, 1994 were approximately
$122.3 billion, an increase of $18.0 billion or 17.3% from June 30, 1993. The
increase is primarily the result of net mutual fund sales of $7.9 billion, net
institutional cash inflows of $3.0 billion and the acquisition of Shields and
Regent which increased assets under management by $7.8 billion, offset partially
by market depreciation of $0.7 billion.

Revenues for the three months ended June 30, 1994 were $148.9 million, an
increase of 29.2% from the prior year period. Investment advisory and services
fees, which are based on assets under management, increased 26.3%. Investment
advisory fees from Alliance mutual funds increased by 35.3% due to higher
average assets under management resulting from strong net mutual fund sales
through the first quarter of 1994. The Partnership experienced modest net
redemptions in its open-end mutual funds during the second quarter of 1994.
Investment advisory fees from other affiliated clients increased by 15.2%
principally due to an increase in revenues from the general accounts of The
Equitable Life Assurance Society of the United States ("ELAS") and its insurance
company subsidiaries. Investment advisory fees from institutional clients
increased by 18.9% due to an increase in average assets under management
resulting from the acquisition of Shields, new account additions and market
appreciation during the second half of 1993.

- 10 -

Distribution plan fees increased 44.2% due principally to higher average load
mutual fund assets attributable to Class B and Class C Shares under the
Partnership's mutual fund distribution system described under "Capital Resources
and Liquidity". Shareholder servicing and administration fees increased 25.5%
due primarily to an increase in the number of shareholder accounts serviced by
the Partnership and an increase in closed-end mutual fund administration fees.
Other revenues, consisting of commissions, interest and dividends, decreased
21.5% as a result of lower commissionable load mutual fund sales. Alliance
Short-Term Multi-Market Trust accounted for approximately 4.9% and 10.2% of the
Partnership's aggregate revenues during the three months ended June 30, 1994 and
1993, respectively.

Expenses for the three months ended June 30, 1994 were $114.3 million, a
decrease of 6.2% from the prior year period. Excluding the $33.5 million in
nonrecurring transaction expenses incurred in connection with the ECMC
acquisition in 1993, expenses increased 29.5% from the prior year period.

Employee compensation and benefits increased 27.2% principally due to an
increase of 217 employees since June 1993, including the addition of 84 Shields
and Regent employees on March 7, 1994, and higher incentive compensation
resulting from increased operating earnings. Promotion and fund servicing
expense, which includes distribution plan payments to financial intermediaries
for distribution of the Partnership's mutual fund and cash management services
products, amortization of deferred sales commissions paid to brokers for the
sale of Class B Shares, advertising, promotional materials and travel and
entertainment, increased 50.5%. Distribution plan payments increased 47.8% due
principally to higher average load mutual fund assets attributable to Class B
and Class C Shares. Amortization of deferred sales commissions increased by
52.7% due to continuing sales of Class B Shares. Other promotional expenditures
increased by 54.6% as a result of costs associated with the Partnership's new
mutual fund advertising campaign and the launching of The Global Privatization
Fund.

The provision for income taxes decreased 23.6%. In 1993, despite the operating
loss, a tax expense was provided due to nonrecurring transaction expenses that
were not deductible for tax purposes. The portion related to ECMC's operations
prior to the acquisition was calculated using a combined Federal and state
corporate statutory income tax rate of approximately 47%.

SIX MONTHS ENDED JUNE 30, 1994 COMPARED TO SIX MONTHS ENDED JUNE 30, 1993

The Partnership recorded net income for the six months ended June 30, 1994 of
$63.7 million or $.83 per Unit, compared to net income of $7.0 million or $.10
per Unit for the six months ended June 30, 1993. Net income for the six months
ended June 30, 1993 includes a charge of $40.8 million for expenses incurred
through that date in connection with the acquisition of ECMC and a $.9 million
income tax benefit resulting from the adoption of Statement of Financial
Accounting Standards No. 109 "Accounting For Income Taxes" as of January 1,
1993. Excluding these nonrecurring items, net income for the six months ended
June 30, 1994 increased 41.2% over net income of $45.1 million, or $.63 per
Unit, for the prior year period.

- 11 -

Revenues for the six months ended June 30, 1994 were $297.4 million, an increase
of 30.7% from the prior year period. Investment advisory and services fees,
which are based on assets under management, increased 25.7%. Investment
advisory fees from Alliance mutual funds increased by 35.6% due to higher
average assets under management resulting from strong net mutual fund sales
through the first quarter of 1994. The Partnership experienced modest net
redemptions in its open-end mutual funds during the second quarter of 1994.
Investment advisory fees from other affiliated clients increased by 28.7%
principally due to a $2.7 million increase in performance fees. Investment
advisory fees from institutional clients increased by 14.1% due to an increase
in average assets under management resulting from the acquisition of Shields,
new account additions and market appreciation during the second half of 1993.

Distribution plan fees increased 49.2% due principally to higher average load
mutual fund assets attributable to Class B and Class C Shares under the
Partnership's mutual fund distribution system described under "Capital Resources
and Liquidity". Shareholder servicing and administration fees increased 28.1%
due primarily to an increase in the number of shareholder accounts serviced by
the Partnership and an increase in closed-end mutual fund administration fees.
Other revenues, consisting of commissions, interest and dividends, increased
30.1% as a result of the launching of a new closed-end fund, The Global
Privatization Fund in the first quarter of 1994, for which the Partnership
earned substantial commissions. Alliance Short-Term Multi-Market Trust
accounted for approximately 5.3% and 10.9% of the Partnership's aggregate
revenues during the six months ended June 30, 1994 and 1993, respectively.

Expenses for the six months ended June 30, 1994 were $228.7 million, an increase
of 5.4% from the prior year period. Excluding the $40.8 million in nonrecurring
transaction expenses incurred in connection with the ECMC acquisition in 1993,
expenses increased 30.0% from the prior year period.

Employee compensation and benefits increased 23.6% principally due to higher
incentive compensation of $5.0 million resulting from increased operating
earnings and an increase in commission expense of $4.5 million resulting from
increased mutual fund sales, including The Global Privatization Fund. Promotion
and fund servicing expense, which includes distribution plan payments to
financial intermediaries for distribution of the Partnership's mutual fund and
cash management services products, amortization of deferred sales commissions
paid to brokers for the sale of Class B Shares, advertising, promotional
materials and travel and entertainment, increased 57.0%. Distribution plan
payments increased 53.7% due principally to higher average load mutual fund
assets attributable to Class B and Class C Shares. Amortization of deferred
sales commissions increased by 51.7% due to continuing sales of Class B Shares.
Other promotional expenditures increased by 71.7% as a result of costs
associated with the Partnership's new mutual fund advertising campaign and the
launching of the Global Privatization Fund.

- 12 -

The effective income tax rate decreased from 42.5% to 7.3% since the 1993
provision included the tax effect of the nonrecurring transaction expenses that
were not deductible for tax purposes. Additionally, the income tax provision
related to ECMC's operations prior to the acquisition was calculated using a
combined Federal and state corporate statutory income tax rate of approximately
47%.

CAPITAL RESOURCES AND LIQUIDITY

Cash flow from borrowings under the Partnership's revolving credit facility and
cash flows from operations were the Partnership's principal sources of working
capital during the six month period ended June 30, 1994. The Partnership's cash
and cash equivalents decreased by $10.2 million. The cash outflows from the
purchase of Shields for $73.6 million, capital expenditures of $9.2 million and
cash distributions to Unitholders of $59.9 million, were partially offset by
cash inflows of $50.0 million from the sale of the Class B Limited Partnership
Interest to ELAS, $64.8 million in cash flow from operations and net redemptions
of investments in Alliance mutual funds in the amount of $15.2 million.

The Partnership's mutual fund distribution system (the "System") includes three
distribution options. The System permits the Alliance mutual funds to offer
investors the option of purchasing shares (a) subject to a conventional
front-end sales charge ("Class A Shares"), (b) without a front-end sales charge
but subject to a contingent deferred sales charge payable by shareholders
("CDSC") and higher distribution fees payable by the funds ("Class B Shares"),
or (c) without either a front-end sales charge or the CDSC but with higher
distribution fees payable by the funds ("Class C Shares"). During the six
months ended June 30, 1994, payments made to financial intermediaries in
connection with the sale of Class B Shares under the System, net of CDSC
received, totaled $48.8 million.

On May 6, 1994, the Partnership issued a newly created Class B Limited
Partnership Interest to ELAS for $50 million in cash. The Class B Limited
Partnership Interest will be converted into 2,266,288 newly issued Units upon
approval by the holders of a majority of the outstanding Units.

The Partnership has repaid all outstanding balances under its revolving
credit facility established during February to finance the acquisition of
Shields and Regent. Outstanding debt at June 30, 1994 under the Partnership's
senior notes was $105 million. The Partnership has given notice to the holders
of the senior notes that it will prepay the senior notes in full during August
1994.

On July 1, 1994, the Partnership issued 2,482,030 newly issued Units to a
wholly-owned subsidiary of Oversea-Chinese Banking Corporation Limited for $50
million in cash.

As a result of the substantial growth in the Partnership's business, increased
sales levels of Class B Shares under the System and to take advantage of growth
opportunities and strategic global opportunities, the Partnership will continue
to require additional capital. Various alternatives for increasing the
Partnership's capital base are being evaluated by management. Management of the
Partnership believes that the Partnership will be able to access sufficient
funds in the capital markets to support its future capital and liquidity
requirements.

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CASH DISTRIBUTIONS

The Partnership is required to distribute all of its Available Cash Flow, as
defined in the Partnership Agreement, to the General Partner and Unitholders.
Available Cash Flow and Available Cash Flow Per Unit amounts do not include
Available Cash Flow resulting from the operations of ECMC prior to the
acquisition. The Partnership's Available Cash Flow was as follows:

THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
----------------------- -----------------------
1994 1993 1994 1993
-------- -------- -------- --------

Available Cash Flow (in thousands)...... $31,213 $20,167 $61,443 $39,722
------- ------- ------- -------
------- ------- ------- -------

Available Cash Flow Per Unit............ $0.41 $0.35 $0.82 $0.69
----- ----- ----- -----
----- ----- ----- -----

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Part II

OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

None.

Item 2. CHANGES IN SECURITIES

See Item 5 "Other Information".

Item 3. DEFAULTS UPON SENIOR SECURITIES

None.

Item 4. SUBMISSION OF MATTERS TO A VOTE
OF SECURITY HOLDERS

None.

Item 5. OTHER INFORMATION

On July 1, 1994, Eastern Holdings Limited ("Eastern"), a wholly owned
subsidiary of Oversea-Chinese Banking Corporation Limited ("OCBC"),
purchased 2,482,030 Units for $50 million cash pursuant to the Unit
Purchase Agreement dated as of June 28, 1994 among the Partnership,
OCBC and Eastern. The Partnership will use the proceeds to take
advantage of growth opportunities and to finance sales of shares of
mutual funds sponsored by the Partnership.

Item 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

1. Unit Purchase Agreement dated as of June 28, 1994 among the
Partnership, OCBC and Eastern.

(b) Reports on Form 8-K

None.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

ALLIANCE CAPITAL MANAGEMENT L.P.

Dated: August 8, 1994 By: Alliance Capital Management
Corporation, its General Partner

By:/s/ Myles R. Itkin
------------------------------
Myles R. Itkin
Senior Vice President &
Chief Financial Officer

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