Holding's principal source of income and cash flow is attributable to its investment in AllianceBernstein limited partnership interests. The Holding interim condensed financial statements and notes and management's discussion and analysis of financial condition and results of operations ("MD&A") should be read in conjunction with those of AllianceBernstein included as Exhibit 99.1 to this Form 10-Q. They should also be read in conjunction with AllianceBernstein's audited financial statements and notes and MD&A included as an exhibit in Holding's Form 10-K for the year ended December 31, 2008.

Results of Operations

                           Three Months Ended                            Nine Months Ended
                              September 30,                                September 30,
                           2009           2008         % Change          2009          2008         % Change
                                               (in millions, except per unit amounts)

Net income
attributable to
AllianceBernstein
Unitholders             $    199.3      $   219.5           (9.2 )%   $    364.5     $   747.3          (51.2 )%
Weighted average
equity ownership
interest                      34.5 %         33.2 %                         34.4 %        33.2 %
Equity in net income
attributable to
AllianceBernstein
Unitholders             $     68.7      $    72.9           (5.8 )    $    125.4     $   248.0          (49.4 )
Net income of Holding   $     62.5      $    64.4           (2.8 )    $    107.5     $   220.7          (51.3 )
Diluted net income
per Holding Unit        $     0.67      $    0.73           (8.2 )    $     1.17     $    2.52          (53.6 )
Distribution per
Holding Unit(1)         $     0.67      $    0.60           11.7      $     1.15     $    2.39          (51.9 )


_________________

Net income for the three months and nine months ended September 30, 2009 decreased $1.9 million and $113.2 million, respectively, to $62.5 million and $107.5 million from net income of $64.4 million and $220.7 million, for the corresponding prior year periods. The decrease reflects lower equity in net income attributable to AllianceBernstein Unitholders. See AllianceBernstein's MD&A contained in Exhibit 99.1.

Capital Resources and Liquidity

The following table identifies selected items relating to capital resources and
liquidity:

                                                        Nine Months Ended
                                                          September 30,
                                                       2009          2008         % Change
                                                          (in millions)

Partners' capital, as of September 30                $ 1,678.8     $ 1,604.1            4.7 %
Distributions received from AllianceBernstein             91.4         277.1          (67.0 )
Distributions paid to unitholders                        (70.9 )      (248.9 )        (71.5 )
Proceeds from exercise of compensatory options to
buy Holding Units                                            -          13.4         (100.0 )
Investment in AllianceBernstein with proceeds from
exercise of compensatory options to buy Holding
Units                                                        -         (13.4 )       (100.0 )
Purchases of Holding Units by AllianceBernstein to
fund deferred compensation plans, net                     (0.2 )        (3.2 )        (92.8 )
Awards of Holding Units made by AllianceBernstein
under deferred compensation plans, net of
forfeitures                                               30.8          68.7          (55.2 )
Available Cash Flow                                      106.4         209.0          (49.1 )

Cash and cash equivalents were zero as of September 30, 2009 and 2008. Cash inflows from AllianceBernstein distributions received were offset by cash distributions paid to unitholders and income taxes paid. Holding is required to distribute all of its Available Cash Flow, as defined in the Holding Partnership Agreement, to its unitholders (including the General Partner). Management believes that the cash flow from its investment in AllianceBernstein will provide Holding with the resources to meet its financial obligations. See Note 2 to the condensed financial statements contained in Item 1 for a description of Available Cash Flow.

Commitments and Contingencies

See Note 7 to the condensed financial statements contained in Item 1.

CAUTIONS REGARDING FORWARD-LOOKING STATEMENTS

Certain statements provided by management in this report and in the portion of AllianceBernstein's Form 10-Q attached hereto as Exhibit 99.1 are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. The most significant of these 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, industry trends, future acquisitions, competitive conditions and government regulations, including changes in tax regulations and rates and the manner in which the earnings of publicly-traded partnerships are taxed. We caution readers to carefully consider such factors. Further, such forward-looking statements speak only as of the date on which such statements are made; we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements. For further information regarding these forward-looking statements and the factors that could cause actual results to differ, see "Risk Factors" in Part I, Item 1A of our Form 10-K for the year ended December 31, 2008 ("Form 10-K") and Part II, Item 1A in this Form 10-Q. Any or all of the forward-looking statements that we make in the Form 10-K, this Form 10-Q, other documents we file with or furnish to the SEC, and any other public statements we issue, may turn out to be wrong. It is important to remember that other factors besides those listed in "Risk Factors" and those listed below could also adversely affect our revenues, financial condition, results of operations and business prospects.

The forward-looking statements referred to in the preceding paragraph include statements regarding:

• Our backlog of new institutional mandates not yet funded: Before they are funded, institutional mandates do not represent legally binding commitments to fund and, accordingly, the possibility exists that not all mandates will be funded in the amounts and at the times we currently anticipate.

• The possibility that prolonged weakness in the value of client assets under management may result in impairment of goodwill, intangible assets and the deferred sales commission asset: To the extent that securities valuations are depressed for prolonged periods of time, client assets under management and our revenues, profitability and unit price may be adversely affected. As a result, subsequent impairment tests may be based upon different assumptions and future cash flow projections, which may result in an impairment of goodwill, intangible assets and the deferred sales commission asset.

• The cash flow Holding realizes from its investment in AllianceBernstein providing Holding with the resources necessary to meet its financial obligations: Holding's cash flow is dependent on the quarterly cash distributions it receives from AllianceBernstein. Accordingly, Holding's ability to meet its financial obligations is dependent on AllianceBernstein's cash flow from its operations, which is subject to the performance of the capital markets and other factors beyond our control.

• Our financial condition and access to public and private debt providing adequate liquidity for our general business needs: Our financial condition is dependent on our cash flow from operations, which is subject to the performance of the capital markets, our ability to maintain and grow client assets under management and other factors beyond our control. Our access to public and private debt, as well as the market for debt or equity we may choose to issue on reasonable terms, may be limited by adverse market conditions, our profitability and changes in government regulations, including tax rates and interest rates.

• The outcome of litigation: Litigation is inherently unpredictable, and excessive damage awards do occur. Though we have stated that we do not expect certain legal proceedings to have a material adverse effect on our results of operations or financial condition, any settlement or judgment with respect to a legal proceeding could be significant, and could have such an effect.

• Our expectation that the global economy will grow modestly in 2010: The extent to which global economies may have recently stabilized is not necessarily indicative of future results. Global economies face significant obstacles to sustained future growth. The actual performance of the capital markets and other factors beyond our control will affect our investment success for clients and asset flows.

• The leverage inherent in our business model increasing should our AUM and revenues continue to grow and our lower expense base remains stable:
Unanticipated events and factors, including strategic initiatives, may cause us to expand our expense base, thus limiting the extent to which we benefit from any positive leverage in future periods. Growth in our revenues will depend on the level of our assets under management, which in turn depends on factors such as the actual performance of the capital markets, the performance of our investment products and other factors beyond our control.

OTHER INFORMATION

With respect to the unaudited condensed interim financial information of Holding for the three months and nine months ended September 30, 2009 included in this quarterly report on Form 10-Q, PricewaterhouseCoopers LLP reported that they have applied limited procedures in accordance with professional standards for a review of such information. However, their separate report dated October 29, 2009 appearing herein states that they did not audit and they do not express an opinion on the unaudited condensed interim financial information. Accordingly, the degree of reliance on their report on such information should be restricted in light of the limited nature of the review procedures applied. PricewaterhouseCoopers LLP is not subject to the liability provisions of
Section 11 of the Securities Act of 1933, as amended ("Securities Act") for their report on the unaudited condensed interim financial information because that report is not a "report" or a "part" of registration statements prepared or certified by PricewaterhouseCoopers LLP within the meaning of Sections 7 and 11 of the Securities Act.