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, 1995
-------------------------------------------

[ ] 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
- --------------------------------------------------------------------------------
(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, 1995 was 80,756,151 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 6-8

Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 9-12

Part II

OTHER INFORMATION

Item 1. Legal Proceedings 13

Item 2. Changes In Securities 13

Item 3. Defaults Upon Senior Securities 13

Item 4. Submission Of Matters To A Vote Of 13
Security Holders

Item 5. Other Information 14

Item 6. Exhibits And Reports On Form 8-K 14

Part I

FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

ALLIANCE CAPITAL MANAGEMENT L.P.
Condensed Consolidated Statements of Financial Condition

(unaudited)
(in thousands)

ASSETS 6/30/95 12/31/94
------ -------- --------

Cash and cash equivalents....................... $125,819 $ 52,199
Fees receivable:
Alliance mutual funds......................... 32,097 31,366
Other affiliated clients...................... 13,316 14,238
Institutional clients......................... 37,030 39,265
Receivable from brokers and dealers for sale
of shares of Alliance mutual funds............ 21,326 17,984
Investments in Alliance mutual funds............ 27,506 49,763
Furniture, equipment and leasehold
improvements, net............................. 44,781 43,830
Intangible assets, net.......................... 88,589 92,962
Deferred sales commissions, net................. 144,900 158,343
Other assets.................................... 16,821 18,419
-------- --------
Total assets.............................. $552,185 $518,369
-------- --------
-------- --------

LIABILITIES AND PARTNERS' CAPITAL

Liabilities:
Accounts payable and accrued expenses........... $ 65,708 $ 59,784
Payable to Alliance mutual funds for share
purchases..................................... 35,294 32,507
Accrued expenses under employee benefit plans... 55,818 40,878
Debt............................................ 3,511 3,871
-------- --------
Total liabilities......................... 160,331 137,040

Partners' capital................................. 391,854 381,329
-------- --------
Total liabilities and partners' capital... $552,185 $518,369
-------- --------
-------- --------

See accompanying notes to condensed consolidated financial statements.

ALLIANCE CAPITAL MANAGEMENT L.P.
Condensed Consolidated Statements of Income

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

Three Months Ended Six Months Ended
------------------ ------------------
6/30/95 6/30/94 6/30/95 6/30/94
------- ------- ------- -------

Revenues:
Investment advisory and services fees:
Alliance mutual funds............................ $ 55,503 $ 52,706 $107,149 $103,617
Other affiliated clients......................... 12,230 9,533 23,841 20,498
Institutional clients............................ 41,454 40,856 82,417 79,639
Distribution plan fees from Alliance mutual funds.. 30,636 34,140 59,648 68,785
Shareholder servicing and administration fees...... 11,035 10,291 21,290 20,025
Other revenues..................................... 2,567 1,347 4,459 4,874
-------- -------- -------- --------
153,425 148,873 298,804 297,438
-------- -------- -------- --------

Expenses:
Employee compensation and benefits................. 41,704 43,213 81,527 85,954
Promotion and servicing:
Distribution plan payments to financial
intermediaries:
Affiliated..................................... 5,444 5,007 10,839 9,963
Unaffiliated................................... 20,807 20,964 39,973 43,302
Amortization of deferred sales commissions....... 12,660 12,883 25,527 24,863
Other............................................ 10,461 10,796 20,578 22,879
General and administrative......................... 20,465 16,879 39,513 32,952
Interest........................................... 231 2,377 639 4,724
Amortization of intangible assets.................. 2,187 2,186 4,374 4,077
-------- -------- -------- --------
113,959 114,305 222,970 228,714
-------- -------- -------- --------

Income before income taxes........................... 39,466 34,568 75,834 68,724

Income taxes....................................... 2,367 2,297 4,550 5,029
-------- -------- -------- --------
Net income........................................... $ 37,099 $ 32,271 $ 71,284 $ 63,695
-------- -------- -------- --------
-------- -------- -------- --------
Net income per Unit.................................. $ 0.45 $ 0.42 $ 0.87 $ 0.83
-------- -------- -------- --------
-------- -------- -------- --------
Weighted average number of Units and Unit
equivalents outstanding............................ 81,514 75,555 81,383 75,858
-------- -------- -------- --------
-------- -------- -------- --------

See accompanying notes to condensed consolidated financial statements.

ALLIANCE CAPITAL MANAGEMENT L.P.
Condensed Consolidated Statements of
Changes in Partners' Capital

(unaudited)
(in thousands)

Three Months Ended Six Months Ended
------------------ ----------------
6/30/95 6/30/94 6/30/95 6/30/94
------- ------- ------- -------

Partners' capital - beginning of period............. $383,791 $216,846 $381,329 $214,045

Net income........................................ 37,099 32,271 71,284 63,695

Capital contribution received from Alliance
Capital Management Corporation.................. 902 901 1,818 1,377

Distributions to partners......................... (33,454) (29,962) (66,837) (59,887)

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

Unit options exercised............................ 1,317 1,560 2,051 2,374

Issuance of Units to employees.................... 1,920 - 1,920 -

Unrealized gain on investments.................... 265 - 273 -

Foreign currency translation adjustment........... 14 (1) 16 11
-------- -------- -------- --------
Partners' capital - end of period................... $391,854 $271,615 $391,854 $271,615
-------- -------- -------- --------
-------- -------- -------- --------

See accompanying notes to condensed consolidated financial statements.

ALLIANCE CAPITAL MANAGEMENT L.P.
Condensed Consolidated Statements of Cash Flows

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

Six Months Ended
-----------------
6/30/95 6/30/94
------- -------

Cash flows from operating activities:
Net income ............................................... $ 71,284 $ 63,695
Adjustments to reconcile net income to
net cash provided from operating activities:
Amortization and depreciation........................... 33,726 32,651
Other, net.............................................. 2,902 2,611
Changes in assets and liabilities:
Decrease in fees receivable from Alliance
mutual funds, other affiliated clients and
institutional clients............................... 2,426 15,673
(Increase) decrease in receivables from brokers and
dealers for sale of shares of alliance mutual funds. (3,342) 66,161
(Increase) in deferred sales commissions.............. (12,085) (48,811)
(Increase) decrease in other assets................... 2,791 (4,797)
Increase in accounts payable and accrued expenses..... 6,291 3,029
Increase (decrease) in payable to Alliance
mutual funds for share purchases.................... 2,787 (87,924)
Increase in accrued expenses under employee benefit
plans, less deferred compensation................... 13,441 22,302
-------- --------
Net cash provided from operating activities....... 120,221 64,590
-------- --------
Cash flows from investing activities:
Purchase of Alliance mutual funds ........................ (5,510) (25,409)
Proceeds from sale of Alliance mutual funds............... 28,040 40,620
Acquisition of Shields and Regent ........................ - (73,570)
Additions to furniture, equipment and
leasehold improvements, net............................. (4,654) (9,172)
-------- --------
Net cash provided from (used in)
investing activities............................. 17,876 (67,531)
-------- --------
Cash flows from financing activities:
Proceeds from borrowings.................................. 87 70,094
Repayment of debt......................................... (112) (70,142)
Distributions to partners................................. (66,837) (59,887)
Proceeds from sale of class B Limited Partnership
Interest to ELAS........................................ - 50,000
Capital contribution received from Alliance Capital
Management Corporation.................................. 318 265
Unit options exercised.................................... 2,051 2,374
-------- --------
Net cash used in financing activities.............. (64,493) (7,296)
-------- --------
Effect of exchange rate changes on cash and
cash equivalents.......................................... 16 11
-------- --------
Net increase (decrease) in cash and cash equivalents........ 73,620 (10,226)
Cash and cash equivalents at beginning of period............ 52,199 96,315
-------- --------
Cash and cash equivalents at end of period.................. $125,819 $ 86,089
-------- --------
-------- --------

See accompanying notes to condensed consolidated financial statements.

ALLIANCE CAPITAL MANAGEMENT L.P.
Notes to Condensed Consolidated Financial Statements
June 30, 1995

(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, 1995, (b) results of operations for the three and six months ended
June 30, 1995 and 1994 and (c) cash flows for the six months ended June 30,
1995 and 1994, have been made.

2. RECLASSIFICATIONS

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

3. DEFERRED SALES COMMISSIONS

Sales commissions paid to financial intermediaries in connection with the
sale of shares of open-end 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 deferred sales commissions are
expected to be recovered from distribution plan payments received from
certain Alliance mutual funds and contingent deferred sales charges received
from shareholders of those Alliance mutual funds upon the redemption of their
shares. Contingent deferred sales charges reduce unamortized deferred sales
commissions when received.

4. COMMITMENTS AND CONTINGENCIES

On July 25, 1995, a Consolidated and Supplemental Class Action Complaint
("Complaint") was filed against the Alliance North American Government Income
Trust, Inc. (the "Fund"), the Partnership, Alliance Capital Management
Corporation ("ACMC"), the general partner of the Partnership, Alliance Fund
Distributors, Inc., a subsidiary of the Partnership, The Equitable Companies
Incorporated, a parent of the Partnership, certain officers of the Fund,
certain directors of the Fund, certain officers of ACMC and certain directors
of ACMC alleging violations of federal securities laws, fraud and breach of
fiduciary duty in connection with the Fund's investments in Mexican and
Argentine securities. The Complaint seeks certification of a plaintiff class
of persons who purchased or owned Class A, B or C shares of the Fund from
March 27, 1992 through December 23, 1994. The Complaint seeks an unspecified
amount of damages, costs and attorneys' fees. The principal allegations of
the Complaint are that upon the advice of the Partnership the Fund purchased

debt securities issued by the Mexican and Argentine governments in amounts
that were not permitted by the Fund's investment objective, and that there
was no shareholder vote to change the investment objective to permit
purchases in such amounts. The Complaint further alleges that the decline in
the value of the Mexican and Argentine securities held by the Fund caused the
Fund's net asset value to decline to the detriment of the Fund's
shareholders. The Partnership believes that the allegations in the Complaint
are without merit and intends to vigorously defend against these claims.
While the ultimate results of this action cannot be determined, management of
the Partnership does not expect that this action will have a material adverse
effect on the Partnership's business.

5. 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.

6. NET INCOME PER UNIT

Net income per Unit is derived by reducing net income for each period by 1%
for the 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 Limited Partnership Interest and Unit
equivalents outstanding during each period.

7. 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,
----------------- -----------------
1995 1994 1995 1994
------ ------- ------ ------

Interest................... $ 222 $4,320 $ 340 $5,013
Income taxes............... 4,508 3,555 4,917 6,159

The 1994 consolidated statement of cash flows does not include the issuance
by the Partnership of new Units to key employees of Shields Asset Management,
Incorporated and its wholly-owned subsidiary, Regent Investor Services,
Incorporated, 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.

8. SUBSEQUENT EVENTS

Due to the continuing uncertainty regarding the financial condition of Orange
County, California, the Partnership purchased on July 19, 1995 approximately
$21.3 million principal amount of Tax and Revenue Anticipation Notes Series A
issued by Orange County ("Orange County Obligations") from two money market
fund portfolios sponsored by the Partnership. As a result, letters of credit
totalling approximately $21.3 million, under which the Partnership was
contingently liable to the issuing bank, were terminated. Management of the
Partnership believes that the loss, if any, resulting from the Partnership's
investment in the Orange County Obligations will not have a material impact
on the Partnership's financial condition or results of operations.

On July 27, 1995, the Board of Directors of the General Partner declared a
distribution of $35,150,000 or $0.43 per Unit representing the Available Cash
Flow (as defined in the Partnership Agreement) of the Partnership for the
three months ended June 30, 1995. The distribution was paid on August 10,
1995 to holders of record on August 3, 1995.

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
Shields Asset Management, Incorporated ("Shields") and its wholly-owned
subsidiary, Regent Investor Services, Incorporated ("Regent"), from Xerox
Financial Services, Inc. on March 7, 1994. 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, 1995 COMPARED TO THREE MONTHS ENDED JUNE 30, 1994

The Partnership recorded net income of $37.1 million for the three months ended
June 30, 1995, an increase of $4.8 million or 14.9% from $32.3 million for the
three months ended June 30, 1994. Net income per Unit for the second quarter of
1995 was $0.45 per Unit, an increase of $0.03 per Unit or 7.1% from the second
quarter of 1994. Weighted average Units outstanding for the quarter ended June
30, 1995 were 81,514,000 compared to 75,555,000 for the quarter ended June 30,
1994, an increase of 7.9%.

Assets under management by the Partnership at June 30, 1995 were approximately
$135.8 billion, an increase of $13.5 billion or 11.0% from $122.3 billion at
June 30, 1994. The increase is primarily the result of substantial market
appreciation of $14.2 billion. Institutional assets under management at June
30, 1995 were $92.7 billion, an increase of $9.6 billion or 11.6% from June 30,
1994 due principally to market appreciation of $11.6 billion, offset partially
by net asset withdrawals of $2.0 billion. Mutual fund assets under management
at June 30, 1995 were $43.0 billion, an increase of $3.8 billion or 9.7% from
June 30, 1994. The increase is primarily attributable to net sales of $2.8
billion of cash management products, market appreciation of $2.6 billion and net
Hudson River Trust sales of $1.4 billion, offset partially by net redemptions
and unreinvested dividends of $3.0 billion in load mutual funds, principally
taxable fixed income funds.

Revenues for the three months ended June 30, 1995 were $153.4 million, an
increase of $4.6 million or 3.1% from the prior year period. Investment
advisory and services fees increased $6.1 million or 5.9% due to higher average
assets under management resulting primarily from market appreciation.
Distribution plan fees decreased 10.3% due principally to lower 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 7.2%
primarily due 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 increased 90.6% primarily due to an increase in interest earned
on investments in cash equivalents and Alliance mutual funds.

Expenses for the three months ended June 30, 1995 were $114.0 million, a
decrease of $0.3 million or 0.3% from the prior year period. The decrease was
primarily a result of decreases in employee compensation and benefits of $1.5
million or 3.5% and interest expense of $2.1 million or 90.3%, offset partially
by an increase in general and administrative expenses of $3.6 million or 21.2%.
Employee compensation and benefits decreased 3.5% primarily as a result of cost
reduction initiatives implemented during the first quarter of 1995. Promotion
and servicing expenses, which include 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, travel and entertainment, advertising
and promotional materials, decreased slightly by 0.6%. General and
administrative expenses increased 21.2% principally as a result of higher
occupancy and equipment costs incurred in connection with the expansion of the
Partnership's New York headquarters, as well as higher legal and other
professional fees. Interest expense decreased by 90.3% primarily as a result of
the prepayment of the Partnership's senior notes during August 1994.

The provision for income taxes for the three months ended June 30, 1995
increased $0.1 million or 3.0% for the quarter.

SIX MONTHS ENDED JUNE 30, 1995 COMPARED TO SIX MONTHS ENDED JUNE 30, 1994

The Partnership recorded net income of $71.3 million for the six months ended
June 30, 1995, an increase of $7.6 million or 11.9% from $63.7 million for the
six months ended June 30, 1994. Net income per Unit for the six months ended
June 30, 1995 was $0.87 per Unit, an increase of $0.04 per Unit or 4.8% from the
six months ended June 30, 1994. Weighted average Units outstanding for the six
months ended June 30, 1995 were 81,383,000 compared to 75,858,000 for the six
months ended June 30, 1994, an increase of 7.3%.

Revenues for the six months ended June 30, 1995 were $298.8 million, an increase
of $1.4 million or 0.5% from the prior year period. Investment advisory and
services fees increased $9.7 million or 4.7% due to higher average assets under
management resulting from market appreciation and the Shields and Regent
acquisition in the first quarter of 1994. Distribution plan fees decreased
13.3% due principally to lower 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 6.3% primarily due 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 decreased 8.5% since
the

Partnership earned substantial commissions during March 1994 in connection with
the launching of The Global Privatization Fund. This decrease was offset
partially by an increase in interest earned on investments in cash equivalents
and Alliance mutual funds.

Expenses for the six months ended June 30, 1995 were $223.0 million, a decrease
of $5.7 million or 2.5% from the prior year period. Employee compensation and
benefits decreased 5.2% principally due to lower incentive compensation expense
accruals offset partially by severance costs of $1.7 million incurred during the
first quarter of 1995 and compensation costs for Shields and Regent employees
for the full six months of 1995. Promotion and servicing expenses, which
include 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, travel and entertainment, advertising and promotional materials,
decreased 4.0%. Distribution plan payments decreased 4.6% due principally to
distribution costs incurred in March 1994 in connection with the launching of
The Global Privatization Fund. Amortization of deferred sales commissions
increased by 2.7% due to continuing sales of Class B Shares. Other promotional
expenditures decreased by 10.1% primarily as a result of cost reduction
initiatives implemented in 1995 and due to significant printing and mailing
costs incurred in March 1994 in connection with the launching of The Global
Privatization Fund. General and administrative expenses increased 19.9%
principally as a result of higher occupancy and equipment costs incurred in
connection with the expansion of the Partnership's New York headquarters, as
well as higher legal and other professional fees. Interest expense decreased by
86.5% primarily as a result of the prepayment of the Partnership's senior notes
during August 1994. Amortization of intangibles increased 7.3% due to the
amortization of goodwill associated with the March 1994 Shields and Regent
acquisition.

The provision for income taxes for the six months ended June 30, 1995 decreased
$0.5 million or 9.5% from the prior year period.

CAPITAL RESOURCES AND LIQUIDITY

Cash provided by operating activities was the Partnership's principal source of
working capital during the six month period ended June 30, 1995.

The Partnership's cash and cash equivalents increased by $73.6 million. Cash
inflows included $120.2 million from operations and proceeds of $22.5 million
from net redemptions of the Partnership's investments in Alliance mutual funds.
Cash outflows included distributions to Unitholders of $66.8 million and capital
expenditures of $4.7 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, 1995, payments made to financial intermediaries in connection with the sale
of Class B Shares under the System, net of CDSC received, totaled $12.1 million.

As of June 30, 1995, the Partnership had not issued any commercial paper under
its $100 million commercial paper program and there were no amounts outstanding
under the Partnership's revolving credit facilities. The revolving credit
facilities contain covenants which require the Partnership, among other things,
to meet certain financial ratios.

The Partnership purchased on July 19, 1995 approximately $21.3 million principal
amount of Tax and Revenue Anticipation Notes Series A issued by Orange County,
California ("Orange County Obligations") from two money market fund portfolios
sponsored by the Partnership. As a result, letters of credit totalling
approximately $21.3 million issued in favor of the portfolios, under which the
Partnership was contingently liable, were terminated.

Management of the Partnership believes that the Partnership has sufficient
financial resources to take advantage of strategic growth opportunities and
global alliances and to finance capital requirements for mutual fund sales.

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
(including the holder of the Class A Limited Partnership Interest based on Units
issuable upon conversion of the Class A Limited Partnership Interest). The
Partnership's Available Cash Flow was as follows:

Three Months Ended Six Months Ended
June 30, June 30,
------------------ ------------------
1995 1994 1995 1994
------- ------- ------- -------

Available Cash Flow (in thousands).... $35,150 $31,233 $68,604 $61,462
------- ------- ------- -------
------- ------- ------- -------
Available Cash Flow Per Unit.......... $0.43 $0.41 $0.84 $0.82
------- ------- ------- -------
------- ------- ------- -------

Part II

OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

In the Form 10-K for the year ended December 31, 1994, it was reported
that eleven complaints had been filed by various groups of
shareholders of Alliance North American Government Income Trust, Inc.
(the "Fund"). On July 25, 1995 a Consolidated and Supplemental Class
Action Complaint ("Complaint") styled IN RE ALLIANCE NORTH AMERICAN
GOVERNMENT INCOME TRUST, INC. SECURITIES LITIGATION was filed in the
United States District Court for the Southern District of New York
against the Fund, Alliance Capital Management L.P. ("Partnership"),
Alliance Capital Management Corporation ("ACMC"), the general partner
of the Partnership, Alliance Fund Distributors, Inc., a subsidiary of
the Partnership, The Equitable Companies Incorporated, a parent of the
Partnership, certain officers of the Fund, certain directors of the
Fund, certain officers of ACMC and certain directors of ACMC alleging
violations of federal securities laws, fraud and breach of fiduciary
duty in connection with Fund's investments in Mexican and Argentine
securities. The Complaint seeks certification of a plaintiff class of
all persons who purchased or owned Class A, B or C shares of the Fund
from March 27, 1992 through December 23, 1994. The Complaint seeks an
unspecified amount of damages, costs and attorneys' fees.

The principal allegations of the Complaint are that upon the advice of
the Partnership the Fund purchased debt securities issued by the
Mexican and Argentine governments in amounts that were not permitted
by the Fund's investment objective, and that there was no shareholder
vote to change the investment objective to permit purchases in such
amounts. The Complaint further alleges that the decline in the value
of the Mexican and Argentine securities held by the Fund caused the
Fund's net asset value to decline to the detriment of the Fund's
shareholders.

The Partnership believes that the allegations in the Complaint are
without merit and intends to vigorously defend against these claims.

Item 2. CHANGES IN SECURITIES

None.

Item 3. DEFAULTS UPON SENIOR SECURITIES

None.

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

None.

Part II

OTHER INFORMATION (continued..)

Item 5. OTHER INFORMATION

On July 19, 1995, the Partnership purchased $21.3 million principal
amount of 1994-95 Tax and Revenue Anticipation Notes, Series A, issued
by the County of Orange, California, from Alliance Municipal Trust
General Portfolio and ACM Institutional Reserves Tax-Free Portfolio,
two tax-free money market funds managed by the Partnership.

Item 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

None.

(b) Reports on Form 8-K

None.

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 14, 1995 By: Alliance Capital Management
Corporation, its General
Partner

By: /s/ Robert H. Joseph, Jr.
------------------------------
Robert H. Joseph, Jr.
Senior Vice President &
Chief Financial Officer