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New York, NY - Alliance Capital Management Holding L.P. ("Alliance Holding") (NYSE: "AC") today announced first quarter 2000 net income of $0.88 per Unit, an increase of 60% compared to the first quarter of 1999. Alliance Holding's first quarter 2000 net income, excluding income attributable to performance fees and a non-cash gain, was $0.72 per Unit, an increase of 53% over the comparable net income per Unit for the prior year quarter. As previously announced, the resolution of a class action lawsuit resulted in the recognition of a one-time, non-cash gain ("NAGIT Litigation Adjustment") of $0.13 per unit. The NAGIT Litigation Adjustment will not, however, result in an increase in first quarter 2000 distributions of Available Cash Flow to Unitholders of Alliance Holding or Alliance Capital Management L.P. ("Alliance Capital", the operating partnership). Alliance Holding declared a $0.74 per Unit distribution payable on May 18, 2000 to holders of its Units at the close of business on May 8, 2000.

Business Highlights Of Alliance Capital Management L.P., The Operating Partnership

• Record assets under management: $394 billion at March 31, 2000, up 31% from March 31, 1999. Growth was primarily attributable to market appreciation, coupled with the strong new business flows in both mutual funds and institutional separate accounts.
• Record mutual fund sales growth: 115% over the prior year quarter. First quarter 2000 was Alliance Capital's most successful quarter ever, with over $25 billion of total mutual fund sales. Net mutual fund sales also reached a record $12.2 billion, up 88% over first quarter 1999.

  • U.S. mutual fund sales, comprising 73% of total mutual fund sales in the quarter, posted a 103% gain in gross sales and an 88% gain in net sales versus first quarter 1999. Money market funds and wrap fee products were significant contributors to the growth in U.S. net sales.
  • Non-U.S. mutual fund sales, comprising 27% of total mutual fund sales for the quarter, recorded a gross sales increase of 159% and a net sales increase of 91% when compared to first quarter 1999. European sales of non-U.S. funds managed by Alliance Capital paced net sales growth, led by Eptafund sales in Italy. Total European fund sales increased 247%, on a net basis, over first quarter 1999. Outside of Europe, India and Singapore posted substantial increases in net sales, offsetting net mutual fund redemptions in Japan for the quarter.
  • New mutual fund product launches completed in first quarter 2000 were led by the exceptional $1 billion of initial sales achieved over a three-day period for Alliance's newest U.S. technology fund, the Select Investor Series - Technology Portfolio. Outside the U.S., the Alliance Sector Select Series initially raised $226 million in three new Indian equity portfolios sold to retail Indian investors. The ACM Investment Funds family in Singapore launched the Asian Technology Portfolio, raising an initial $180 million in assets under management.

  Highlighting the continued robust mutual fund sales trends, President and Chief Operating Officer John D. Carifa noted, "The continued solid load fund sales growth for Alliance's mutual funds division benefited from greater contributions from markets outside of the U.S. and continued strong U.S. momentum in wrap fee products. We believe these trends, coupled with successful new product launches around the world, demonstrate continued robust investor interest in our wide array of investment expertise and the depth of our distribution capabilities."
• New separately managed account wins added $2.3 billion in assets under management, representing 42 new client accounts, led by strong demand for Alliance's core growth equity disciplines. The Large Capitalization Growth Equity and Disciplined Growth Equity disciplines represented approximately 64% of the new client account wins, and 43% of the $2.3 billion in new assets under management, in first quarter 2000.

Chief Executive Officer Bruce W. Calvert, commenting on the impact of recent volatility in the capital markets, remarked, "Asset management firms, including Alliance Capital, primarily earn revenues based on a small percentage of average assets under management. As such, the overall direction of world capital markets, particularly U.S. equities, is an important driver of growth of assets under management, revenues and earnings. If the recent correction in the equity markets, and technology related shares in particular, should be prolonged, it could adversely affect growth, in spite of our current strong relative investment performance. Over the longer term, however, we believe effective execution of our investment approach, coupled with our strong and growing distribution networks, will keep Alliance Capital well positioned to serve an ever-widening global pool of investors needing professional investment management services."

Financial Results Of Alliance Capital Management L.P., The Operating Partnership

• Revenues for first quarter 2000 reached $548 million, increasing 31% from $420 million pro forma revenues for first quarter 1999. Revenue growth resulted primarily from increased average assets under management, including a larger proportion of higher-fee mutual fund assets under management. The 6% decline in quarterly revenues, compared to the quarter ended December 31, 1999, is principally due to performance fee revenues. In the fourth quarter of 1999, Alliance Capital refined its procedures for estimating performance fees, resulting in recognition of such fees at the end of the measurement period. Currently, a substantial amount of the accounts that may earn performance fees have calendar year measurement periods. As a result, for 1999 and subsequent years, the majority of such fees will be recognized in the fourth quarter. Performance fees, which only apply to certain accounts, are based on a sharing of investment returns between Alliance Capital and its clients. Performance fees may increase the volatility of Alliance Capital's revenues and earnings.
• Net income was $171 million for first quarter 2000, up 58% when compared to pro forma net income of $108 million for first quarter 1999. The increase in net income was primarily attributed to higher revenues and pre-tax margin, resulting in higher operating income. Net income was also increased by the NAGIT Litigation Adjustment, a one-time $24 million non-cash gain recognized upon the signing of a Memorandum of Understanding with the lawyers for shareholders of Alliance North American Government Income Trust ("NAGIT"), as announced on March 24, 2000. This Memorandum of Understanding resolved a class action lawsuit brought by the shareholders in January 1995 related to a decline in NAGIT's net asset value following the sudden devaluation of the Mexican peso in December 1994. Net income excluding the impact of performance fees and the NAGIT Litigation Adjustment was $143 million, up 57% over the prior year quarter.
• Pre-tax margin increased to 39% for first quarter 2000, excluding the NAGIT Litigation Adjustment, compared to 35% for first quarter 1999, primarily due to higher operating income. Pre-tax margin is calculated after netting distribution revenues with distribution expenses, as detailed on page 11.

Financial Results Of Alliance Holding, The Publicly Traded Partnership

Alliance Holding's principal sources of income and cash flow are attributable to its 42% ownership interest in Alliance Capital, the operating partnership. Alliance Holding is required to distribute cash distributions it receives from Alliance Capital, less taxes and other amounts its general partner determines should be retained.

• Distributions per Alliance Holding Unit increased to $0.74 for first quarter 2000, a 37% increase over the $0.54 per Unit distributed for first quarter 1999 and a decrease of 13% from the $0.85 per Unit distributed in fourth quarter 1999. Each of these distributions includes the contribution of performance fees, which increased quarterly distributions by $0.03, $0.08 and $0.20 per Alliance Holding Unit, in each of those periods, respectively. Excluding the impact of performance fees, the first quarter 2000 distribution per Alliance Holding Unit increased 54% over first quarter 1999 and 9% over fourth quarter 1999.
• Diluted net income per Alliance Holding Unit rose to $0.88 in first quarter 2000 from $0.55 per Unit for first quarter 1999, an increase of 60%. Performance fees contributed $0.03 per Unit in first quarter 2000, compared to $0.20 per Unit in the fourth quarter of 1999. Alliance Holding recorded its share of the NAGIT Litigation Adjustment, which represented a $0.13 increase in net income per Alliance Holding Unit, in first quarter 2000. Excluding the NAGIT Litigation Adjustment and the impact of performance fees, diluted net income per Alliance Holding Unit for first quarter 2000 was $0.72 per Unit, a 53% increase over the pro forma diluted net income of $0.47 per Unit for the prior year period.

About Alliance Capital

Alliance Capital is a leading global investment management firm with over US $394 billion in assets under management at March 31, 2000. Alliance Capital manages retirement assets for many of the largest U.S. public and private employee benefit plans (including 28 of the U.S. Fortune 100 companies), for public employee retirement funds in 33 out of the 50 U.S. states, and for foundations, endowments, banks, and insurance companies worldwide. Alliance Capital is also one of America's largest mutual fund sponsors, with a diverse family of fund portfolios and approximately 5.8 million shareholder accounts.

Alliance Capital Management Holding L.P. owns approximately 42% of the units representing assignments of beneficial ownership of limited partnership interests in Alliance Capital. An indirect wholly owned subsidiary of AXA Financial, Inc. owns general partnership interests in Alliance Capital and Alliance Holding, and approximately 56% of Alliance Capital's outstanding units and approximately 2% of Alliance Holdings units. On a combined basis, AXA Financial and its subsidiaries have an approximate 57% economic interest in Alliance Capital.