United States
Securities and Exchange Commission
Washington, D.C. 20549
Form N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-07618
AllianceBernstein Municipal Income Fund II
(Exact name of registrant as specified in charter)
1345 Avenue of the Americas, New York, New York 10105
(Address of principal executive offices) (Zip code)
Mark R. Manley
Alliance Capital Management, L.P.
1345 Avenue of the Americas
New York, New York 10105
(Name and address of agent for service)
Registrant's telephone number, including area code: (800) 221-5672
Date of fiscal year end: September 30, 2004
Date of reporting period: March 31, 2004
ITEM 1. REPORTS TO STOCKHOLDERS.
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Tax-Exempt Income
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AllianceBernstein [LOGO](SM)
Investment Research and Management
AllianceBernstein
Municipal Income Fund II
Semi-Annual Report--March 31, 2004
Investment Products Offered
- ---------------------------
o Are Not FDIC Insured
o May Lose Value
o Are Not Bank Guaranteed
- ---------------------------
The investment return and principal value of an investment in the Fund will
fluctuate as the prices of the individual securities in which it invests
fluctuate, so that your shares, when redeemed, may be worth more or less than
their original cost. You should consider the investment objectives, risks,
charges and expenses of the Fund carefully before investing. For a free copy of
the Fund's prospectus, which contains this and other information, visit our web
site at www.alliancebernstein.com or call your financial advisor or Alliance at
(800) 227-4618. Please read the prospectus carefully before you invest.
You may obtain performance information current to the most recent month-end by
visiting www.alliancebernstein.com (click on Investors/ Products & Services/
Mutual Funds).
This shareholder report must be preceded or accompanied by the Fund's
prospectus for individuals who are not current shareholders of the Fund.
You may obtain a description of the Fund's proxy voting policies and
procedures, without charge, upon request by visiting Alliance Capital's web
site at www.alliancebernstein.com (click on Investors, then the "proxy voting
policies and procedures" link on the left side of the page), or by going to the
Securities and Exchange Commission's web site at www.sec.gov, or by calling
Alliance Capital at (800) 227-4618.
AllianceBernstein Investment Research and Management, Inc., is an affiliate of
Alliance Capital Management L.P., the manager of the funds, and is a member of
the NASD.
May 18, 2004
Semi-Annual Report
This report provides management's discussion of fund performance for
AllianceBernstein Municipal Income Fund II for the semi-annual reporting period
ended March 31, 2004.
Investment Objectives and Policies
The nine portfolios of this open-end fund, by investing principally in
high-yielding, predominantly medium-quality municipal securities, seek to
provide their shareholders with the highest level of income exempt from Federal
and state personal income tax (or for Florida, the intangible tax) that is
available without assuming undue risk. These securities generally offer current
yields above those of higher-quality municipal obligations.
Investment Results
The following table provides performance for the Fund's nine portfolios and
their benchmark, the Lehman Brothers (LB) Municipal Index, for the six- and
12-month periods ended March 31, 2004.
INVESTMENT RESULTS*
Periods Ended March 31, 2004
---------------------------------
Returns
---------------------------------
AllianceBernstein
Municipal Income
Fund II Portfolio 6 Months 12 Months
- ------------------------------------------------------------
Arizona 4.16% 7.02%
- ------------------------------------------------------------
Florida 3.95% 5.80%
- ------------------------------------------------------------
Massachusetts 3.86% 5.69%
- ------------------------------------------------------------
Michigan 3.92% 5.43%
- ------------------------------------------------------------
Minnesota 3.46% 5.78%
- ------------------------------------------------------------
New Jersey 3.92% 6.24%
- ------------------------------------------------------------
Ohio 3.43% 7.09%
- ------------------------------------------------------------
Pennsylvania 3.88% 6.91%
- ------------------------------------------------------------
Virginia 3.23% 6.77%
- ------------------------------------------------------------
Lehman Brothers
Municipal Index 3.12% 5.86%
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* Each Portfolio's investment results are for the periods shown and are based
on the net asset value (NAV) of each Portfolio's Class A shares as of March 31,
2004. Performance assumes reinvestment of distributions and does not account
for taxes. All fees and expenses related to the operation of the Portfolios
have been deducted, but no adjustment has been made for sales charges that may
apply when shares are purchased or redeemed. Returns for Class B and Class C
shares will vary due to different expenses associated with these classes. Past
performance is no guarantee of future results.
The unmanaged Lehman Brothers (LB) Municipal Index does not reflect fees and
expenses associated with the active management of a mutual fund portfolio. The
Index is a total return performance benchmark for the long-term investment
grade, tax-exempt bond market. An investor cannot invest directly in an index,
and its results are not indicative of the performance for any specific
investment, including AllianceBernstein Municipal Income Fund II.
Additional investment results can be found on pages 4-18.
For the six-month period ended March 31, 2004, all of the AllianceBernstein
Municipal Income Fund II Portfolios outperformed their benchmark, the LB
Municipal Index, which represents the
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ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 1
municipal market and posted a positive return of 3.12%. In general, the
Portfolios benefited from their overweight positions in longer-term bonds and
lower-rated bonds. The Portfolios' overweight positions in housing bonds hurt
relative performance over the period. A description of each Portfolio's
relative performance versus their benchmark, the LB Municipal Index, for the
six-month period ended March 31, 2004 follows.
Arizona Portfolio - The Arizona Portfolio's stronger relative performance was
largely the result of security selection in the health care and tobacco
settlement sectors. In addition, the Portfolio's performance benefited from its
overweight position in lower-rated obligations.
Florida Portfolio - The Florida Portfolio's stronger relative performance was
largely the result of security selection in the insured sector. In addition,
the Portfolio's performance benefited from its overweight position in
lower-rated obligations.
Massachusetts Portfolio - The Massachusetts Portfolio's stronger relative
performance was largely the result of security selection in the education and
tobacco settlement sectors. In addition, the Portfolio's performance benefited
from its overweight position in lower-rated obligations.
Michigan Portfolio - The Michigan Portfolio's stronger relative performance was
largely the result of security selection in the insured and tobacco settlement
sectors. In addition, the Portfolio's performance benefited from its overweight
position in lower-rated obligations.
Minnesota Portfolio - The Minnesota Portfolio's stronger relative performance
was largely the result of security selection in the insured, education, housing
and tobacco settlement sectors.
New Jersey Portfolio - The New Jersey Portfolio's stronger relative performance
was largely the result of security selection in the insured and tobacco
settlement sectors. The Portfolio's exposure to the corporate-backed sector
detracted from performance. In addition, the Portfolio's performance benefited
from its overweight position in lower-rated obligations.
Ohio Portfolio - The Ohio Portfolio's stronger relative performance was largely
the result of security selection in the insured sector. The Portfolio's
exposure to the corporate-backed sector detracted from performance. In
addition, the Portfolio's performance benefited from its overweight position in
lower-rated obligations.
Pennsylvania Portfolio - The Pennsylvania Portfolio's stronger relative
performance was largely the result of security selection in the insured sector.
In addition, the Portfolio's performance benefited from its overweight position
in lower-rated obligations.
_______________________________________________________________________________
2 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Virginia Portfolio - The Virginia Portfolio's stronger relative performance was
largely the result of its underweight exposure to the general obligation and
pre-refunded sectors. In addition, the Portfolio's performance benefited from
its overweight position in lower-rated obligations.
Market Review and Investment Strategy
From September 30, 2003 to March 31, 2004, long-term municipal bond yields
declined by 17 basis points. Over that time period, the long municipal bond
market outperformed the taxable bond market. For example, the LB Municipal
Index gained 3.12% during the six-month period ended March 31, 2004 while the
LB U.S. Aggregate Index, representing taxable bonds, generated a return of
2.98% over the same period. The Treasury bond component of the aggregate index
posted an even lower return of 2.49%. As of March 31, 2004, 30-year municipal
bonds were yielding approximately 96% of comparable maturity Treasury bonds.
Continued weak economic conditions, as well as minimal concern for inflation,
contributed to the positive returns in the fixed-income markets. In stark
contrast to the longer end of the maturity spectrum, two-to-seven year
municipal bond yields actually increased over the same time period. As a
result, the difference between long- and short-term municipal bond yields
declined. The yield curve, a plot of bond yields sorted by ascending maturity,
normally slopes upward for longer maturity bonds. When the difference in yield
between short- and long-term bonds declines, the change in the shape of the
curve is referred to as a "flattening."
The prolonged low rate environment has resulted in an increased demand for
lower-rated bonds that carry higher yields. As demand for those higher yielding
bonds increased, the incremental difference in yield compared to better quality
bonds declined. As a result, higher yielding bonds, in general, generated
strong relative performance over the period.
Given its lower credit profile, the health care sector led the market in
performance. The weakest performing sectors were two that are typically very
highly rated: pre-refunded bonds and housing bonds. Pre-refunded bonds
typically have very short effective maturities so rising short-term rates hurt
the performance of those securities. Continued concerns regarding increased
refinancing activity limited price improvement in municipal housing bonds.
Municipal housing bonds are secured by homeowners' mortgages. As homeowners
prepay their mortgages, municipal housing bonds are redeemed at par (100% of
face value). Typically, lower yields cause bond prices to increase, but if the
market anticipates that a bond may be redeemed in the near term, it is unlikely
to value the bonds at a price much above par.
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ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 3
Investment Results
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INVESTMENT RESULTS
ARIZONA PORTFOLIO
CLASS A SHARE AVERAGE ANNUAL RETURNS AS OF MARCH 31, 2004
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NAV Returns SEC Returns
1 Year 7.02% 2.44%
5 Years 5.20% 4.30%
Since Inception* 6.68% 6.21%
SEC Yield** 3.88%
Taxable Equivalent Yield*** 7.48%
FLORIDA PORTFOLIO
CLASS A SHARE AVERAGE ANNUAL RETURNS AS OF MARCH 31, 2004
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NAV Returns SEC Returns
1 Year 5.80% 1.36%
5 Years 5.29% 4.38%
10 Years 6.90% 6.45%
SEC Yield** 3.78%
Taxable Equivalent Yield*** 7.32%
The performance shown above represents past performance and does not guarantee
future results. Current performance may be lower or higher than the performance
information shown. You may obtain performance information current to the most
recent month-end by visiting www.alliancebernstein.com (click on
Investors/Products & Services/Mutual Funds). Returns are for Class A shares and
are annualized for periods longer than one year. All fees and expenses related
to the operation of the Portfolio have been deducted. NAV returns do not
reflect sales charges; if sales charges were reflected, the Portfolio's quoted
performance would be lower. SEC returns reflect the 4.25% maximum front-end
sales charge for Class A shares. Performance assumes reinvestment of
distributions and does not account for taxes.
The investment return and principal value of an investment in the Portfolio
will fluctuate, so that your shares, when redeemed, may be worth more or less
than their original cost. You should consider the investment objectives, risks,
charges and expenses of the Portfolio carefully before investing. For a free
copy of the Portfolio's prospectus, which contains this and other information,
visit our web site at www.alliancebernstein.com or call your financial advisor
or Alliance at (800) 227-4618. Please read the prospectus carefully before you
invest.
A Word About Risk: Price fluctuations may be caused by changes in the general
level of interest rates or changes in bond credit quality ratings. Changes in
interest rates have a greater effect on bonds with longer maturities than on
those with shorter maturities. While the Portfolio invests principally in bonds
and other fixed-income securities, in order to achieve its investment
objectives, the Portfolio may at times use certain types of investment
derivatives, such as options, futures, forwards and swaps. These instruments
involve risks different from, and in certain cases, greater than, the risks
presented by more traditional investments. These risks are fully discussed in
the prospectus.
* Arizona Portfolio Inception Date: 6/1/94.
** SEC yields are calculated based on SEC guidelines for the 30-day period
ended March 31, 2004.
*** Taxable equivalent yields are based on net asset value (NAV) and a 35%
marginal Federal income tax rate and maximum state, city and local taxes where
applicable.
_______________________________________________________________________________
4 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Investment Results
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INVESTMENT RESULTS
ARIZONA PORTFOLIO
CLASS B SHARE AVERAGE ANNUAL RETURNS AS OF MARCH 31, 2004
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NAV Returns SEC Returns
1 Year 6.36% 3.36%
5 Years 4.50% 4.50%
Since Inception*(a) 6.23% 6.23%
SEC Yield** 3.35%
Taxable Equivalent Yield*** 6.35%
FLORIDA PORTFOLIO
CLASS B SHARE AVERAGE ANNUAL RETURNS AS OF MARCH 31, 2004
- -------------------------------------------------------------------------------
NAV Returns SEC Returns
1 Year 5.08% 2.08%
5 Years 4.57% 4.57%
10 Years(a) 6.45% 6.45%
SEC Yield** 3.24%
Taxable Equivalent Yield*** 6.28%
The performance shown above represents past performance and does not guarantee
future results. Current performance may be lower or higher than the performance
information shown. You may obtain performance information current to the most
recent month-end by visiting www.alliancebernstein.com (click on
Investors/Products & Services/Mutual Funds). Returns are for Class B shares and
are annualized for periods longer than one year. All fees and expenses related
to the operation of the Portfolio have been deducted. NAV returns do not
reflect sales charges; if sales charges were reflected, the Portfolio's quoted
performance would be lower. SEC returns reflect the applicable contingent
deferred sales charge for Class B shares (3% year 1, 2% year 2, 1% year 3, 0%
year 4). Performance assumes reinvestment of distributions and does not account
for taxes.
The investment return and principal value of an investment in the Portfolio
will fluctuate, so that your shares, when redeemed, may be worth more or less
than their original cost. You should consider the investment objectives, risks,
charges and expenses of the Portfolio carefully before investing. For a free
copy of the Portfolio's prospectus, which contains this and other information,
visit our web site at www.alliancebernstein.com or call your financial advisor
or Alliance at (800) 227-4618. Please read the prospectus carefully before you
invest.
A Word About Risk: Price fluctuations may be caused by changes in the general
level of interest rates or changes in bond credit quality ratings. Changes in
interest rates have a greater effect on bonds with longer maturities than on
those with shorter maturities. While the Portfolio invests principally in bonds
and other fixed-income securities, in order to achieve its investment
objectives, the Portfolio may at times use certain types of investment
derivatives, such as options, futures, forwards and swaps. These instruments
involve risks different from, and in certain cases, greater than, the risks
presented by more traditional investments. These risks are fully discussed in
the prospectus.
* Arizona Portfolio Inception Date: 6/1/94.
(a) Assumes conversion of Class B shares into Class A shares after six years.
** SEC yields are calculated based on SEC guidelines for the 30-day period
ended March 31, 2004.
*** Taxable equivalent yields are based on net asset value (NAV) and a 35%
marginal Federal income tax rate and maximum state, city and local taxes where
applicable.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 5
Investment Results
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INVESTMENT RESULTS
ARIZONA PORTFOLIO
CLASS C SHARE AVERAGE ANNUAL RETURNS AS OF MARCH 31, 2004
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NAV Returns SEC Returns
1 Year 6.36% 5.36%
5 Years 4.50% 4.50%
Since Inception* 5.95% 5.95%
SEC Yield** 3.35%
Taxable Equivalent Yield*** 6.35%
FLORIDA PORTFOLIO
CLASS C SHARE AVERAGE ANNUAL RETURNS AS OF MARCH 31, 2004
- -------------------------------------------------------------------------------
NAV Returns SEC Returns
1 Year 5.08% 4.08%
5 Years 4.57% 4.57%
10 Years 6.15% 6.15%
SEC Yield** 3.24%
Taxable Equivalent Yield*** 6.28%
The performance shown above represents past performance and does not guarantee
future results. Current performance may be lower or higher than the performance
information shown. You may obtain performance information current to the most
recent month-end by visiting www.alliancebernstein.com (click on
Investors/Products & Services/Mutual Funds). Returns are for Class C shares and
are annualized for periods longer than one year. All fees and expenses related
to the operation of the Portfolio have been deducted. NAV returns do not
reflect sales charges; if sales charges were reflected, the Portfolio's quoted
performance would be lower. SEC returns reflect the applicable contingent
deferred sales charge for Class C shares (1% year 1). Performance assumes
reinvestment of distributions and does not account for taxes.
The investment return and principal value of an investment in the Portfolio
will fluctuate, so that your shares, when redeemed, may be worth more or less
than their original cost. You should consider the investment objectives, risks,
charges and expenses of the Portfolio carefully before investing. For a free
copy of the Portfolio's prospectus, which contains this and other information,
visit our web site at www.alliancebernstein.com or call your financial advisor
or Alliance at (800) 227-4618. Please read the prospectus carefully before you
invest.
A Word About Risk: Price fluctuations may be caused by changes in the general
level of interest rates or changes in bond credit quality ratings. Changes in
interest rates have a greater effect on bonds with longer maturities than on
those with shorter maturities. While the Portfolio invests principally in bonds
and other fixed-income securities, in order to achieve its investment
objectives, the Portfolio may at times use certain types of investment
derivatives, such as options, futures, forwards and swaps. These instruments
involve risks different from, and in certain cases, greater than, the risks
presented by more traditional investments. These risks are fully discussed in
the prospectus.
* Arizona Portfolio Inception Date: 6/1/94.
** SEC yields are calculated based on SEC guidelines for the 30-day period
ended March 31, 2004.
*** Taxable equivalent yields are based on net asset value (NAV) and a 35%
marginal Federal income tax rate and maximum state, city and local taxes where
applicable.
_______________________________________________________________________________
6 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Investment Results
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INVESTMENT RESULTS
MASSACHUSETTS PORTFOLIO
CLASS A SHARE AVERAGE ANNUAL RETURNS AS OF MARCH 31, 2004
- -------------------------------------------------------------------------------
NAV Returns SEC Returns
1 Year 5.69% 1.21%
5 Years 4.56% 3.66%
10 Years 6.97% 6.51%
SEC Yield** 3.89%
Taxable Equivalent Yield*** 7.77%
MICHIGAN PORTFOLIO
CLASS A SHARE AVERAGE ANNUAL RETURNS AS OF MARCH 31, 2004
- -------------------------------------------------------------------------------
NAV Returns SEC Returns
1 Year 5.43% 0.93%
5 Years 5.70% 4.78%
10 Years 7.41% 6.95%
SEC Yield** 3.74%
Taxable Equivalent Yield*** 7.22%
The performance shown above represents past performance and does not guarantee
future results. Current performance may be lower or higher than the performance
information shown. You may obtain performance information current to the most
recent month-end by visiting www.alliancebernstein.com (click on
Investors/Products & Services/Mutual Funds). Returns are for Class A shares and
are annualized for periods longer than one year. All fees and expenses related
to the operation of the Portfolio have been deducted. NAV returns do not
reflect sales charges; if sales charges were reflected, the Portfolio's quoted
performance would be lower. SEC returns reflect the 4.25% maximum front-end
sales charge for Class A shares. Performance assumes reinvestment of
distributions and does not account for taxes.
The investment return and principal value of an investment in the Portfolio
will fluctuate, so that your shares, when redeemed, may be worth more or less
than their original cost. You should consider the investment objectives, risks,
charges and expenses of the Portfolio carefully before investing. For a free
copy of the Portfolio's prospectus, which contains this and other information,
visit our web site at www.alliancebernstein.com or call your financial advisor
or Alliance at (800) 227-4618. Please read the prospectus carefully before you
invest.
A Word About Risk: Price fluctuations may be caused by changes in the general
level of interest rates or changes in bond credit quality ratings. Changes in
interest rates have a greater effect on bonds with longer maturities than on
those with shorter maturities. While the Portfolio invests principally in bonds
and other fixed-income securities, in order to achieve its investment
objectives, the Portfolio may at times use certain types of investment
derivatives, such as options, futures, forwards and swaps. These instruments
involve risks different from, and in certain cases, greater than, the risks
presented by more traditional investments. These risks are fully discussed in
the prospectus.
** SEC yields are calculated based on SEC guidelines for the 30-day period
ended March 31, 2004.
*** Taxable equivalent yields are based on net asset value (NAV) and a 35%
marginal Federal income tax rate and maximum state, city and local taxes where
applicable.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 7
Investment Results
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INVESTMENT RESULTS
MASSACHUSETTS PORTFOLIO
CLASS B SHARE AVERAGE ANNUAL RETURNS AS OF MARCH 31, 2004
- -------------------------------------------------------------------------------
NAV Returns SEC Returns
1 Year 4.95% 1.95%
5 Years 3.84% 3.84%
10 Years(a) 6.54% 6.54%
SEC Yield** 3.36%
Taxable Equivalent Yield*** 6.63%
MICHIGAN PORTFOLIO
CLASS B SHARE AVERAGE ANNUAL RETURNS AS OF MARCH 31, 2004
- -------------------------------------------------------------------------------
NAV Returns SEC Returns
1 Year 4.70% 1.70%
5 Years 4.97% 4.97%
10 Years(a) 6.96% 6.96%
SEC Yield** 3.20%
Taxable Equivalent Yield*** 6.11%
The performance shown above represents past performance and does not guarantee
future results. Current performance may be lower or higher than the performance
information shown. You may obtain performance information current to the most
recent month-end by visiting www.alliancebernstein.com (click on
Investors/Products & Services/Mutual Funds). Returns are for Class B shares and
are annualized for periods longer than one year. All fees and expenses related
to the operation of the Portfolio have been deducted. NAV returns do not
reflect sales charges; if sales charges were reflected, the Portfolio's quoted
performance would be lower. SEC returns reflect the applicable contingent
deferred sales charge for Class B shares (3% year 1, 2% year 2, 1% year 3, 0%
year 4). Performance assumes reinvestment of distributions and does not account
for taxes.
The investment return and principal value of an investment in the Portfolio
will fluctuate, so that your shares, when redeemed, may be worth more or less
than their original cost. You should consider the investment objectives, risks,
charges and expenses of the Portfolio carefully before investing. For a free
copy of the Portfolio's prospectus, which contains this and other information,
visit our web site at www.alliancebernstein.com or call your financial advisor
or Alliance at (800) 227-4618. Please read the prospectus carefully before you
invest.
A Word About Risk: Price fluctuations may be caused by changes in the general
level of interest rates or changes in bond credit quality ratings. Changes in
interest rates have a greater effect on bonds with longer maturities than on
those with shorter maturities. While the Portfolio invests principally in bonds
and other fixed-income securities, in order to achieve its investment
objectives, the Portfolio may at times use certain types of investment
derivatives, such as options, futures, forwards and swaps. These instruments
involve risks different from, and in certain cases, greater than, the risks
presented by more traditional investments. These risks are fully discussed in
the prospectus.
(a) Assumes conversion of Class B shares into Class A shares after six years.
** SEC yields are calculated based on SEC guidelines for the 30-day period
ended March 31, 2004.
*** Taxable equivalent yields are based on net asset value (NAV) and a 35%
marginal Federal income tax rate and maximum state, city and local taxes where
applicable.
_______________________________________________________________________________
8 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Investment Results
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INVESTMENT RESULTS
MASSACHUSETTS PORTFOLIO
CLASS C SHARE AVERAGE ANNUAL RETURNS AS OF MARCH 31, 2004
- -------------------------------------------------------------------------------
NAV Returns SEC Returns
1 Year 4.95% 3.95%
5 Years 3.84% 3.84%
10 Years 6.24% 6.24%
SEC Yield** 3.37%
Taxable Equivalent Yield*** 6.63%
MICHIGAN PORTFOLIO
CLASS C SHARE AVERAGE ANNUAL RETURNS AS OF MARCH 31, 2004
- -------------------------------------------------------------------------------
NAV Returns SEC Returns
1 Year 4.70% 3.70%
5 Years 4.97% 4.97%
10 Years 6.66% 6.66%
SEC Yield** 3.21%
Taxable Equivalent Yield*** 6.11%
The performance shown above represents past performance and does not guarantee
future results. Current performance may be lower or higher than the performance
information shown. You may obtain performance information current to the most
recent month-end by visiting www.alliancebernstein.com (click on
Investors/Products & Services/Mutual Funds). Returns are for Class C shares and
are annualized for periods longer than one year. All fees and expenses related
to the operation of the Portfolio have been deducted. NAV returns do not
reflect sales charges; if sales charges were reflected, the Portfolio's quoted
performance would be lower. SEC returns reflect the applicable contingent
deferred sales charge for Class C shares (1% year 1). Performance assumes
reinvestment of distributions and does not account for taxes.
The investment return and principal value of an investment in the Portfolio
will fluctuate, so that your shares, when redeemed, may be worth more or less
than their original cost. You should consider the investment objectives, risks,
charges and expenses of the Portfolio carefully before investing. For a free
copy of the Portfolio's prospectus, which contains this and other information,
visit our web site at www.alliancebernstein.com or call your financial advisor
or Alliance at (800) 227-4618. Please read the prospectus carefully before you
invest.
A Word About Risk: Price fluctuations may be caused by changes in the general
level of interest rates or changes in bond credit quality ratings. Changes in
interest rates have a greater effect on bonds with longer maturities than on
those with shorter maturities. While the Portfolio invests principally in bonds
and other fixed-income securities, in order to achieve its investment
objectives, the Portfolio may at times use certain types of investment
derivatives, such as options, futures, forwards and swaps. These instruments
involve risks different from, and in certain cases, greater than, the risks
presented by more traditional investments. These risks are fully discussed in
the prospectus.
** SEC yields are calculated based on SEC guidelines for the 30-day period
ended March 31, 2004.
*** Taxable equivalent yields are based on net asset value (NAV) and a 35%
marginal Federal income tax rate and maximum state, city and local taxes where
applicable.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 9
Investment Results
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INVESTMENT RESULTS
MINNESOTA PORTFOLIO
CLASS A SHARE AVERAGE ANNUAL RETURNS AS OF MARCH 31, 2004
- -------------------------------------------------------------------------------
NAV Returns SEC Returns
1 Year 5.78% 1.29%
5 Years 5.31% 4.40%
10 Years 6.52% 6.06%
SEC Yield** 3.26%
Taxable Equivalent Yield*** 7.40%
NEW JERSEY PORTFOLIO
CLASS A SHARE AVERAGE ANNUAL RETURNS AS OF MARCH 31, 2004
- -------------------------------------------------------------------------------
NAV Returns SEC Returns
1 Year 6.24% 1.68%
5 Years 4.09% 3.19%
10 Years 6.13% 5.67%
SEC Yield** 3.51%
Taxable Equivalent Yield*** 7.59%
The performance shown above represents past performance and does not guarantee
future results. Current performance may be lower or higher than the performance
information shown. You may obtain performance information current to the most
recent month-end by visiting www.alliancebernstein.com (click on
Investors/Products & Services/Mutual Funds). Returns are for Class A shares and
are annualized for periods longer than one year. All fees and expenses related
to the operation of the Portfolio have been deducted. NAV returns do not
reflect sales charges; if sales charges were reflected, the Portfolio's quoted
performance would be lower. SEC returns reflect the 4.25% maximum front-end
sales charge for Class A shares. Performance assumes reinvestment of
distributions and does not account for taxes.
The investment return and principal value of an investment in the Portfolio
will fluctuate, so that your shares, when redeemed, may be worth more or less
than their original cost. You should consider the investment objectives, risks,
charges and expenses of the Portfolio carefully before investing. For a free
copy of the Portfolio's prospectus, which contains this and other information,
visit our web site at www.alliancebernstein.com or call your financial advisor
or Alliance at (800) 227-4618. Please read the prospectus carefully before you
invest.
A Word About Risk: Price fluctuations may be caused by changes in the general
level of interest rates or changes in bond credit quality ratings. Changes in
interest rates have a greater effect on bonds with longer maturities than on
those with shorter maturities. While the Portfolio invests principally in bonds
and other fixed-income securities, in order to achieve its investment
objectives, the Portfolio may at times use certain types of investment
derivatives, such as options, futures, forwards and swaps. These instruments
involve risks different from, and in certain cases, greater than, the risks
presented by more traditional investments. These risks are fully discussed in
the prospectus.
** SEC yields are calculated based on SEC guidelines for the 30-day period
ended March 31, 2004.
*** Taxable equivalent yields are based on net asset value (NAV) and a 35%
marginal Federal income tax rate and maximum state, city and local taxes where
applicable.
_______________________________________________________________________________
10 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Investment Results
- -------------------------------------------------------------------------------
INVESTMENT RESULTS
MINNESOTA PORTFOLIO
CLASS B SHARE AVERAGE ANNUAL RETURNS AS OF MARCH 31, 2004
- -------------------------------------------------------------------------------
NAV Returns SEC Returns
1 Year 5.15% 2.15%
5 Years 4.58% 4.58%
10 Years(a) 6.06% 6.06%
SEC Yield** 2.70%
Taxable Equivalent Yield*** 6.24%
NEW JERSEY PORTFOLIO
CLASS B SHARE AVERAGE ANNUAL RETURNS AS OF MARCH 31, 2004
- -------------------------------------------------------------------------------
NAV Returns SEC Returns
1 Year 5.38% 2.38%
5 Years 3.34% 3.34%
10 Years(a) 5.66% 5.66%
SEC Yield** 2.96%
Taxable Equivalent Yield*** 6.42%
The performance shown above represents past performance and does not guarantee
future results. Current performance may be lower or higher than the performance
information shown. You may obtain performance information current to the most
recent month-end by visiting www.alliancebernstein.com (click on
Investors/Products & Services/Mutual Funds). Returns are for Class B shares and
are annualized for periods longer than one year. All fees and expenses related
to the operation of the Portfolio have been deducted. NAV returns do not
reflect sales charges; if sales charges were reflected, the Portfolio's quoted
performance would be lower. SEC returns reflect the applicable contingent
deferred sales charge for Class B shares (3% year 1, 2% year 2, 1% year 3, 0%
year 4). Performance assumes reinvestment of distributions and does not account
for taxes.
The investment return and principal value of an investment in the Portfolio
will fluctuate, so that your shares, when redeemed, may be worth more or less
than their original cost. You should consider the investment objectives, risks,
charges and expenses of the Portfolio carefully before investing. For a free
copy of the Portfolio's prospectus, which contains this and other information,
visit our web site at www.alliancebernstein.com or call your financial advisor
or Alliance at (800) 227-4618. Please read the prospectus carefully before you
invest.
A Word About Risk: Price fluctuations may be caused by changes in the general
level of interest rates or changes in bond credit quality ratings. Changes in
interest rates have a greater effect on bonds with longer maturities than on
those with shorter maturities. While the Portfolio invests principally in bonds
and other fixed-income securities, in order to achieve its investment
objectives, the Portfolio may at times use certain types of investment
derivatives, such as options, futures, forwards and swaps. These instruments
involve risks different from, and in certain cases, greater than, the risks
presented by more traditional investments. These risks are fully discussed in
the prospectus.
(a) Assumes conversion of Class B shares into Class A shares after six years.
** SEC yields are calculated based on SEC guidelines for the 30-day period
ended March 31, 2004.
*** Taxable equivalent yields are based on net asset value (NAV) and a 35%
marginal Federal income tax rate and maximum state, city and local taxes where
applicable.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 11
Investment Results
- -------------------------------------------------------------------------------
INVESTMENT RESULTS
MINNESOTA PORTFOLIO
CLASS C SHARE AVERAGE ANNUAL RETURNS AS OF MARCH 31, 2004
- -------------------------------------------------------------------------------
NAV Returns SEC Returns
1 Year 5.15% 4.15%
5 Years 4.59% 4.59%
10 Years 5.76% 5.76%
SEC Yield** 2.69%
Taxable Equivalent Yield*** 6.24%
NEW JERSEY PORTFOLIO
CLASS C SHARE AVERAGE ANNUAL RETURNS AS OF MARCH 31, 2004
- -------------------------------------------------------------------------------
NAV Returns SEC Returns
1 Year 5.48% 4.48%
5 Years 3.36% 3.36%
10 Years 5.36% 5.36%
SEC Yield** 2.95%
Taxable Equivalent Yield*** 6.41%
The performance shown above represents past performance and does not guarantee
future results. Current performance may be lower or higher than the performance
information shown. You may obtain performance information current to the most
recent month-end by visiting www.alliancebernstein.com (click on
Investors/Products & Services/Mutual Funds). Returns are for Class C shares and
are annualized for periods longer than one year. All fees and expenses related
to the operation of the Portfolio have been deducted. NAV returns do not
reflect sales charges; if sales charges were reflected, the Portfolio's quoted
performance would be lower. SEC returns reflect the applicable contingent
deferred sales charge for Class C shares (1% year 1). Performance assumes
reinvestment of distributions and does not account for taxes.
The investment return and principal value of an investment in the Portfolio
will fluctuate, so that your shares, when redeemed, may be worth more or less
than their original cost. You should consider the investment objectives, risks,
charges and expenses of the Portfolio carefully before investing. For a free
copy of the Portfolio's prospectus, which contains this and other information,
visit our web site at www.alliancebernstein.com or call your financial advisor
or Alliance at (800) 227-4618. Please read the prospectus carefully before you
invest.
A Word About Risk: Price fluctuations may be caused by changes in the general
level of interest rates or changes in bond credit quality ratings. Changes in
interest rates have a greater effect on bonds with longer maturities than on
those with shorter maturities. While the Portfolio invests principally in bonds
and other fixed-income securities, in order to achieve its investment
objectives, the Portfolio may at times use certain types of investment
derivatives, such as options, futures, forwards and swaps. These instruments
involve risks different from, and in certain cases, greater than, the risks
presented by more traditional investments. These risks are fully discussed in
the prospectus.
** SEC yields are calculated based on SEC guidelines for the 30-day period
ended March 31, 2004.
*** Taxable equivalent yields are based on net asset value (NAV) and a 35%
marginal Federal income tax rate and maximum state, city and local taxes where
applicable.
_______________________________________________________________________________
12 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Investment Results
- -------------------------------------------------------------------------------
INVESTMENT RESULTS
OHIO PORTFOLIO
CLASS A SHARE AVERAGE ANNUAL RETURNS AS OF MARCH 31, 2004
- -------------------------------------------------------------------------------
NAV Returns SEC Returns
1 Year 7.09% 2.55%
5 Years 4.80% 3.90%
10 Years 6.50% 6.04%
SEC Yield** 3.21%
Taxable Equivalent Yield*** 7.51%
PENNSYLVANIA PORTFOLIO
CLASS A SHARE AVERAGE ANNUAL RETURNS AS OF MARCH 31, 2004
- -------------------------------------------------------------------------------
NAV Returns SEC Returns
1 Year 6.91% 2.38%
5 Years 5.27% 4.36%
10 Years 6.86% 6.40%
SEC Yield** 3.51%
Taxable Equivalent Yield*** 7.53%
The performance shown above represents past performance and does not guarantee
future results. Current performance may be lower or higher than the performance
information shown. You may obtain performance information current to the most
recent month-end by visiting www.alliancebernstein.com (click on
Investors/Products & Services/Mutual Funds). Returns are for Class A shares and
are annualized for periods longer than one year. All fees and expenses related
to the operation of the Portfolio have been deducted. NAV returns do not
reflect sales charges; if sales charges were reflected, the Portfolio's quoted
performance would be lower. SEC returns reflect the 4.25% maximum front-end
sales charge for Class A shares. Performance assumes reinvestment of
distributions and does not account for taxes.
The investment return and principal value of an investment in the Portfolio
will fluctuate, so that your shares, when redeemed, may be worth more or less
than their original cost. You should consider the investment objectives, risks,
charges and expenses of the Portfolio carefully before investing. For a free
copy of the Portfolio's prospectus, which contains this and other information,
visit our web site at www.alliancebernstein.com or call your financial advisor
or Alliance at (800) 227-4618. Please read the prospectus carefully before you
invest.
A Word About Risk: Price fluctuations may be caused by changes in the general
level of interest rates or changes in bond credit quality ratings. Changes in
interest rates have a greater effect on bonds with longer maturities than on
those with shorter maturities. While the Portfolio invests principally in bonds
and other fixed-income securities, in order to achieve its investment
objectives, the Portfolio may at times use certain types of investment
derivatives, such as options, futures, forwards and swaps. These instruments
involve risks different from, and in certain cases, greater than, the risks
presented by more traditional investments. These risks are fully discussed in
the prospectus.
** SEC yields are calculated based on SEC guidelines for the 30-day period
ended March 31, 2004.
*** Taxable equivalent yields are based on net asset value (NAV) and a 35%
marginal Federal income tax rate and maximum state, city and local taxes where
applicable.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 13
Investment Results
- -------------------------------------------------------------------------------
INVESTMENT RESULTS
OHIO PORTFOLIO
CLASS B SHARE AVERAGE ANNUAL RETURNS AS OF MARCH 31, 2004
- -------------------------------------------------------------------------------
NAV Returns SEC Returns
1 Year 6.37% 3.37%
5 Years 4.06% 4.06%
10 Years(a) 6.05% 6.05%
SEC Yield** 2.66%
Taxable Equivalent Yield*** 6.37%
PENNSYLVANIA PORTFOLIO
CLASS B SHARE AVERAGE ANNUAL RETURNS AS OF MARCH 31, 2004
- -------------------------------------------------------------------------------
NAV Returns SEC Returns
1 Year 6.16% 3.16%
5 Years 4.54% 4.54%
10 Years(a) 6.40% 6.40%
SEC Yield** 2.97%
Taxable Equivalent Yield*** 5.84%
The performance shown above represents past performance and does not guarantee
future results. Current performance may be lower or higher than the performance
information shown. You may obtain performance information current to the most
recent month-end by visiting www.alliancebernstein.com (click on
Investors/Products & Services/Mutual Funds). Returns are for Class B shares and
are annualized for periods longer than one year. All fees and expenses related
to the operation of the Portfolio have been deducted. NAV returns do not
reflect sales charges; if sales charges were reflected, the Portfolio's quoted
performance would be lower. SEC returns reflect the applicable contingent
deferred sales charge for Class B shares (3% year 1, 2% year 2, 1% year 3, 0%
year 4). Performance assumes reinvestment of distributions and does not account
for taxes.
The investment return and principal value of an investment in the Portfolio
will fluctuate, so that your shares, when redeemed, may be worth more or less
than their original cost. You should consider the investment objectives, risks,
charges and expenses of the Portfolio carefully before investing. For a free
copy of the Portfolio's prospectus, which contains this and other information,
visit our web site at www.alliancebernstein.com or call your financial advisor
or Alliance at (800) 227-4618. Please read the prospectus carefully before you
invest.
A Word About Risk: Price fluctuations may be caused by changes in the general
level of interest rates or changes in bond credit quality ratings. Changes in
interest rates have a greater effect on bonds with longer maturities than on
those with shorter maturities. While the Portfolio invests principally in bonds
and other fixed-income securities, in order to achieve its investment
objectives, the Portfolio may at times use certain types of investment
derivatives, such as options, futures, forwards and swaps. These instruments
involve risks different from, and in certain cases, greater than, the risks
presented by more traditional investments. These risks are fully discussed in
the prospectus.
(a) Assumes conversion of Class B shares into Class A shares after six years.
** SEC yields are calculated based on SEC guidelines for the 30-day period
ended March 31, 2004.
*** Taxable equivalent yields are based on net asset value (NAV) and a 35%
marginal Federal income tax rate and maximum state, city and local taxes where
applicable.
_______________________________________________________________________________
14 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Investment Results
- -------------------------------------------------------------------------------
INVESTMENT RESULTS
OHIO PORTFOLIO
CLASS C SHARE AVERAGE ANNUAL RETURNS AS OF MARCH 31, 2004
- -------------------------------------------------------------------------------
NAV Returns SEC Returns
1 Year 6.26% 5.26%
5 Years 4.06% 4.06%
10 Years 5.74% 5.74%
SEC Yield** 2.65%
Taxable Equivalent Yield*** 6.37%
PENNSYLVANIA PORTFOLIO
CLASS C SHARE AVERAGE ANNUAL RETURNS AS OF MARCH 31, 2004
- -------------------------------------------------------------------------------
NAV Returns SEC Returns
1 Year 6.16% 5.16%
5 Years 4.54% 4.54%
10 Years 6.10% 6.10%
SEC Yield** 2.97%
Taxable Equivalent Yield*** 5.84%
The performance shown above represents past performance and does not guarantee
future results. Current performance may be lower or higher than the performance
information shown. You may obtain performance information current to the most
recent month-end by visiting www.alliancebernstein.com (click on
Investors/Products & Services/Mutual Funds). Returns are for Class C shares and
are annualized for periods longer than one year. All fees and expenses related
to the operation of the Portfolio have been deducted. NAV returns do not
reflect sales charges; if sales charges were reflected, the Portfolio's quoted
performance would be lower. SEC returns reflect the applicable contingent
deferred sales charge for Class C shares (1% year 1). Performance assumes
reinvestment of distributions and does not account for taxes.
The investment return and principal value of an investment in the Portfolio
will fluctuate, so that your shares, when redeemed, may be worth more or less
than their original cost. You should consider the investment objectives, risks,
charges and expenses of the Portfolio carefully before investing. For a free
copy of the Portfolio's prospectus, which contains this and other information,
visit our web site at www.alliancebernstein.com or call your financial advisor
or Alliance at (800) 227-4618. Please read the prospectus carefully before you
invest.
A Word About Risk: Price fluctuations may be caused by changes in the general
level of interest rates or changes in bond credit quality ratings. Changes in
interest rates have a greater effect on bonds with longer maturities than on
those with shorter maturities. While the Portfolio invests principally in bonds
and other fixed-income securities, in order to achieve its investment
objectives, the Portfolio may at times use certain types of investment
derivatives, such as options, futures, forwards and swaps. These instruments
involve risks different from, and in certain cases, greater than, the risks
presented by more traditional investments. These risks are fully discussed in
the prospectus.
** SEC yields are calculated based on SEC guidelines for the 30-day period
ended March 31, 2004.
*** Taxable equivalent yields are based on net asset value (NAV) and a 35%
marginal Federal income tax rate and maximum state, city and local taxes where
applicable.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 15
Investment Results
- -------------------------------------------------------------------------------
INVESTMENT RESULTS
VIRGINIA PORTFOLIO
CLASS A SHARE AVERAGE ANNUAL RETURNS AS OF MARCH 31, 2004
- -------------------------------------------------------------------------------
NAV Returns SEC Returns
1 Year 6.77% 2.25%
5 Years 5.21% 4.31%
Since Inception* 6.95% 6.49%
SEC Yield** 3.52%
Taxable Equivalent Yield*** 7.64%
The performance shown above represents past performance and does not guarantee
future results. Current performance may be lower or higher than the performance
information shown. You may obtain performance information current to the most
recent month-end by visiting www.alliancebernstein.com (click on
Investors/Products & Services/Mutual Funds). Returns are for Class A shares and
are annualized for periods longer than one year. All fees and expenses related
to the operation of the Portfolio have been deducted. NAV returns do not
reflect sales charges; if sales charges were reflected, the Portfolio's quoted
performance would be lower. SEC returns reflect the 4.25% maximum front-end
sales charge for Class A shares. Performance assumes reinvestment of
distributions and does not account for taxes.
The investment return and principal value of an investment in the Portfolio
will fluctuate, so that your shares, when redeemed, may be worth more or less
than their original cost. You should consider the investment objectives, risks,
charges and expenses of the Portfolio carefully before investing. For a free
copy of the Portfolio's prospectus, which contains this and other information,
visit our web site at www.alliancebernstein.com or call your financial advisor
or Alliance at (800) 227-4618. Please read the prospectus carefully before you
invest.
A Word About Risk: Price fluctuations may be caused by changes in the general
level of interest rates or changes in bond credit quality ratings. Changes in
interest rates have a greater effect on bonds with longer maturities than on
those with shorter maturities. While the Portfolio invests principally in bonds
and other fixed-income securities, in order to achieve its investment
objectives, the Portfolio may at times use certain types of investment
derivatives, such as options, futures, forwards and swaps. These instruments
involve risks different from, and in certain cases, greater than, the risks
presented by more traditional investments. These risks are fully discussed in
the prospectus.
* Virginia Portfolio Inception Date: 4/29/94.
** SEC yields are calculated based on SEC guidelines for the 30-day period
ended March 31, 2004.
*** Taxable equivalent yields are based on net asset value (NAV) and a 35%
marginal Federal income tax rate and maximum state, city and local taxes where
applicable.
_______________________________________________________________________________
16 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Investment Results
- -------------------------------------------------------------------------------
INVESTMENT RESULTS
VIRGINIA PORTFOLIO
CLASS B SHARE AVERAGE ANNUAL RETURNS AS OF MARCH 31, 2004
- -------------------------------------------------------------------------------
NAV Returns SEC Returns
1 Year 6.05% 3.05%
5 Years 4.49% 4.49%
Since Inception*(a) 6.51% 6.51%
SEC Yield** 2.98%
Taxable Equivalent Yield*** 6.53%
The performance shown above represents past performance and does not guarantee
future results. Current performance may be lower or higher than the performance
information shown. You may obtain performance information current to the most
recent month-end by visiting www.alliancebernstein.com (click on
Investors/Products & Services/Mutual Funds). Returns are for Class B shares and
are annualized for periods longer than one year. All fees and expenses related
to the operation of the Portfolio have been deducted. NAV returns do not
reflect sales charges; if sales charges were reflected, the Portfolio's quoted
performance would be lower. SEC returns reflect the applicable contingent
deferred sales charge for Class B shares (3% year 1, 2% year 2, 1% year 3, 0%
year 4). Performance assumes reinvestment of distributions and does not account
for taxes.
The investment return and principal value of an investment in the Portfolio
will fluctuate, so that your shares, when redeemed, may be worth more or less
than their original cost. You should consider the investment objectives, risks,
charges and expenses of the Portfolio carefully before investing. For a free
copy of the Portfolio's prospectus, which contains this and other information,
visit our web site at www.alliancebernstein.com or call your financial advisor
or Alliance at (800) 227-4618. Please read the prospectus carefully before you
invest.
A Word About Risk: Price fluctuations may be caused by changes in the general
level of interest rates or changes in bond credit quality ratings. Changes in
interest rates have a greater effect on bonds with longer maturities than on
those with shorter maturities. While the Portfolio invests principally in bonds
and other fixed-income securities, in order to achieve its investment
objectives, the Portfolio may at times use certain types of investment
derivatives, such as options, futures, forwards and swaps. These instruments
involve risks different from, and in certain cases, greater than, the risks
presented by more traditional investments. These risks are fully discussed in
the prospectus.
* Virginia Portfolio Inception Date: 4/29/94.
(a) Assumes conversion of Class B shares into Class A shares after six years.
** SEC yields are calculated based on SEC guidelines for the 30-day period
ended March 31, 2004.
*** Taxable equivalent yields are based on net asset value (NAV) and a 35%
marginal Federal income tax rate and maximum state, city and local taxes where
applicable.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 17
Investment Results
- -------------------------------------------------------------------------------
INVESTMENT RESULTS
VIRGINIA PORTFOLIO
CLASS C SHARE AVERAGE ANNUAL RETURNS AS OF MARCH 31, 2004
- -------------------------------------------------------------------------------
NAV Returns SEC Returns
1 Year 6.06% 5.06%
5 Years 4.49% 4.49%
Since Inception* 6.22% 6.22%
SEC Yield** 2.98%
Taxable Equivalent Yield*** 6.53%
The performance shown above represents past performance and does not guarantee
future results. Current performance may be lower or higher than the performance
information shown. You may obtain performance information current to the most
recent month-end by visiting www.alliancebernstein.com (click on
Investors/Products & Services/Mutual Funds). Returns are for Class C shares and
are annualized for periods longer than one year. All fees and expenses related
to the operation of the Portfolio have been deducted. NAV returns do not
reflect sales charges; if sales charges were reflected, the Portfolio's quoted
performance would be lower. SEC returns reflect the applicable contingent
deferred sales charge for Class C shares (1% year 1). Performance assumes
reinvestment of distributions and does not account for taxes.
The investment return and principal value of an investment in the Portfolio
will fluctuate, so that your shares, when redeemed, may be worth more or less
than their original cost. You should consider the investment objectives, risks,
charges and expenses of the Portfolio carefully before investing. For a free
copy of the Portfolio's prospectus, which contains this and other information,
visit our web site at www.alliancebernstein.com or call your financial advisor
or Alliance at (800) 227-4618. Please read the prospectus carefully before you
invest.
A Word About Risk: Price fluctuations may be caused by changes in the general
level of interest rates or changes in bond credit quality ratings. Changes in
interest rates have a greater effect on bonds with longer maturities than on
those with shorter maturities. While the Portfolio invests principally in bonds
and other fixed-income securities, in order to achieve its investment
objectives, the Portfolio may at times use certain types of investment
derivatives, such as options, futures, forwards and swaps. These instruments
involve risks different from, and in certain cases, greater than, the risks
presented by more traditional investments. These risks are fully discussed in
the prospectus.
* Virginia Portfolio Inception Date: 4/29/94.
** SEC yields are calculated based on SEC guidelines for the 30-day period
ended March 31, 2004.
*** Taxable equivalent yields are based on net asset value (NAV) and a 35%
marginal Federal income tax rate and maximum state, city and local taxes where
applicable.
_______________________________________________________________________________
18 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Arizona Portfolio-Portfolio of Investments
- -------------------------------------------------------------------------------
ARIZONA PORTFOLIO
PORTFOLIO OF INVESTMENTS
March 31, 2004 (unaudited)
Standard Principal
& Poor's Amount
Ratings (000) Value
- -------------------------------------------------------------------------------
MUNICIPAL BONDS & NOTES-98.6%
Long-Term Municipal Bonds-93.2%
Arizona-75.3%
Baa3 Arizona Cap Facs Fin Corp Student
Hsg Rev
(Arizona St Univ Proj) Ser 00
6.25%, 9/01/32(a) $ 2,000 $ 2,100,020
AAA Arizona School Brd Fac Rev
Ser 01
5.00%, 7/01/19 7,230 7,703,492
Aaa Arizona Student Loan Auth
Student Loan Rev
Ser 99B-1 AMT
5.90%, 5/01/24(a) 1,500 1,600,530
NR Dove Mtn Resort Cmnty Fac Dist
Ser 01
6.75%, 12/01/16 6,200 6,407,328
NR Estrella Mtn Ranch Cmnty Fac Dist
(Golf Village) Ser 01A
7.875%, 7/01/25 7,789 8,518,440
NR Estrella Mtn Ranch Cmty Fac Dist
(Desert Village)
7.375%, 7/01/27 2,000 2,053,120
NR Gilbert Utility Rev
(Municipal Prop Corp) Ser 01
6.40%, 4/01/16 1,350 1,356,088
BBB+ Glendale Ind Dev Auth Ed Fac
(Midwestern Univ) Ser 01A
5.875%, 5/15/31 3,770 3,990,092
AAA Glendale Ind Dev Auth Ed Fac
(Midwestern Univ) CONNIE LEE
Ser 96A
6.00%, 5/15/26 475 518,705
AAA Glendale Tax Rev
AMBAC Ser 03A
5.00%, 7/01/33 5,000 5,190,750
AAA Glendale Wtr & Swr Rev
AMBAC Ser 03
5.00%, 7/01/28 3,000 3,128,310
NR Goodyear Cmnty Fac Dist
(Palm Valley) Ser 96C
7.25%, 7/01/16 3,967 4,216,286
NR Goodyear IDA Water & Sewer Rev
(Litchfield Pk Svc Proj) Ser 99 AMT
5.95%, 10/01/23 3,160 3,269,778
NR Hassayampa Cmnty Fac Dist
Ser 96
7.75%, 7/01/21 5,855 6,263,561
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 19
Arizona Portfolio-Portfolio of Investments
- -------------------------------------------------------------------------------
Standard Principal
& Poor's Amount
Ratings (000) Value
- -------------------------------------------------------------------------------
NR Hassayampa Cmnty Fac Dist #2
(Forest Ridge Estates) Ser 00
7.50%, 7/01/24 $ 905 $ 1,006,242
AAA Maricopa Cnty Hosp Rev
(Catholic Healthcare Center) MBIA
Ser 93
10.10%, 7/01/13(b) 2,700 2,822,310
Aaa Maricopa Cnty MFHR
(Syl-Mar Apts Proj) GNMA Ser 01 AMT
6.10%, 4/20/36(a) 2,470 2,675,702
AAA Maricopa Cnty MFHR
(Tierra Antigua Proj)
AMBAC Ser 01A-1 AMT
5.40%, 6/01/34 2,765 2,832,660
AAA Maricopa Cnty Sch Dist No. 28
(Kyrene Elem) FGIC Ser 95B
6.00%, 7/01/14 2,000 2,024,240
AAA Maricopa Cnty SFMR
(Mortgage Rev)
GNMA/FNMA/FHLMC AMT
Ser 00-1C
6.25%, 12/01/30 720 739,721
Ser 01
5.63%, 3/01/33 1,655 1,687,587
Ser 02-B1
6.20%, 3/01/34 1,655 1,820,186
BBB Maricopa Cnty Util Rev
(Citizens Utilities) Ser 95 AMT
6.20%, 5/01/30 1,550 1,566,647
AAA Mesa Cnty IDA Health Fac
(Discovery Hlth Sys) MBIA Ser 99A
5.75%, 1/01/25 15,000 16,713,899
AAA Mohave Cnty IDA MFHR
(Chris & Silver Ridge) GNMA Ser 96
6.375%, 11/01/31 295 318,919
AAA Oro Valley Wtr Rev
MBIA Ser 03
5.00%, 7/01/23 1,195 1,257,212
AAA Phoenix Airport Rev
FGIC Ser 02B AMT
5.75%, 7/01/15 1,000 1,127,720
A3 Phoenix Hlth Facs Auth Hosp Rev
(Children's Hospital) Ser 02A
6.00%, 2/15/32(a) 6,700 5,927,423
AA Phoenix IDA MFHR
(Woodstone & Silver Springs) Asset Gty
Ser 93
6.25%, 4/01/23 1,950 1,967,375
_______________________________________________________________________________
20 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Arizona Portfolio-Portfolio of Investments
- -------------------------------------------------------------------------------
Standard Principal
& Poor's Amount
Ratings (000) Value
- -------------------------------------------------------------------------------
AAA Phoenix IDA SFMR
(Mortgage Rev), GNMA Ser 02A-1 AMT
5.75%, 9/01/33 $ 740 $ 765,138
AAA Pima Cnty IDA MFHR
(La Hacienda) GNMA Ser 99
7.00%, 12/20/31 1,290 1,409,351
AAA Pima Cnty IDA SFMR
(Mortgage Rev) GNMA/FNMA AMT
Ser 99B-1
6.10%, 5/01/31 1,155 1,208,915
Ser 01A-1
5.35%, 11/01/24 320 326,973
AAA Pinal Cnty Prop Corp.
AMBAC Ser 01
5.125%, 6/01/21 1,000 1,066,110
NR Pronghorn Ranch Cmnty Fac Dist
Ser 01
7.00%, 7/15/27 2,000 2,084,000
BBB+ Scottsdale IDA Hosp Rev
(Scottsdale Healthcare) Ser 01
5.80%, 12/01/31 3,250 3,442,335
A Show Low Assessment Dist # 6
(Torreon) ACA Ser 00
6.00%, 1/01/18 975 1,075,318
AAA South Campus Group LLC
(Univ of AZ Student Hsg) MBIA
5.625%, 9/01/23 640 720,294
5.625%, 9/01/28 1,250 1,392,313
NR Stoneridge Cmnty Fac Dist
Ser 01
6.75%, 7/15/26 4,500 4,729,095
NR Sundance Cmnty Fac Dist
Ser 02
7.75%, 7/01/22 2,975 3,034,203
Aaa Tolleson IDA MFHR
(Copper Cove) GNMA Ser 01A AMT
5.50%, 11/20/41(a) 5,825 6,028,059
AAA Tucson & Pima Hsg Fin Auth SFMR
(Mortgage Rev) GNMA/FNMA AMT
Ser 02A
5.50%, 1/01/35 1,080 1,118,394
Ser 01
6.35%, 1/01/34 3,720 3,918,499
AAA Tucson Airport Auth Rev
AMBAC Ser 01 AMT
5.35%, 6/01/31 6,575 6,860,157
AAA Tucson Higher Ed
(University Arizona) AMBAC Ser 02A
5.00%, 7/15/32 1,000 1,034,870
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 21
Arizona Portfolio-Portfolio of Investments
- -------------------------------------------------------------------------------
Standard Principal
& Poor's Amount
Ratings (000) Value
- -------------------------------------------------------------------------------
AAA University AZ Ctfs Partn
AMBAC Ser 03
9.17%, 6/01/15(b) $ 4,020 $ 5,120,435
AAA University of Arizona Higher Ed
FGIC Ser 03
5.00%, 6/01/21 2,385 2,536,114
5.00%, 6/01/22 2,650 2,803,409
NR Village at Litchfield Park Cmnty Fac Dist
(Litchfield Pk Svc Proj) Ser 01
6.375%, 7/15/26 3,250 3,365,733
NR Vistancia Cmnty Fac Dist Ser 02
6.75%, 7/15/22 2,000 2,055,820
AA Yavapai Cnty Hosp Rev
(Regional Medical Center) RADIAN
Ser 03A
5.25%, 8/01/21 4,000 4,223,000
-------------
161,122,878
-------------
California-0.9%
BBB California State GO
5.00%, 2/01/33 2,000 1,986,560
-------------
Florida-1.1%
NR Double Branch Cmnty Dev Dist
(Oakleaf Village) Ser 02A
6.70%, 5/01/34 1,000 1,062,540
NR Fiddler's Creek Cmnty Dev Dist
Ser 99B
5.80%, 5/01/21(c) 1,185 1,193,970
-------------
2,256,510
-------------
New Jersey-1.1%
BBB New Jersey Tobacco Settlement Rev
Ser 03
6.75%, 6/01/39 2,500 2,466,625
-------------
Puerto Rico-12.1%
AAA Puerto Rico Elec Pwr Auth Rev
XLCA Ser 02-1
5.25%, 7/01/22 8,000 8,682,800
AAA Puerto Rico GO
FGIC Ser 02A
5.00%, 7/01/32 5,000 5,236,800
AA Puerto Rico Hlth Fac
(Ascension Health) Ser 00A
6.125%, 11/15/30 1,500 1,678,335
AAA Puerto Rico Hsg Fin Corp SFMR
(Mortgage Rev) GNMA Ser 98A AMT
5.20%, 12/01/32 4,915 5,016,298
AAA Puerto Rico Hwy & Trans Auth Rev
FSA Ser 02D
5.00%, 7/01/32 3,400 3,561,024
_______________________________________________________________________________
22 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Arizona Portfolio-Portfolio of Investments
- -------------------------------------------------------------------------------
Standard Principal
& Poor's Amount
Ratings (000) Value
- -------------------------------------------------------------------------------
BBB Puerto Rico Tobacco Settlement Rev
(Childrens Trust Fund) Ser 02
5.625%, 5/15/43 $ 1,800 $ 1,778,814
-------------
25,954,071
-------------
Rhode Island-1.2%
BBB Rhode Island Tobacco Settlement Rev
Ser 02A
6.25%, 6/01/42 795 740,702
6.125%, 6/01/32 2,000 1,866,920
-------------
2,607,622
-------------
Texas-0.9%
AAA Texas Turnpike Auth Rev
AMBAC Ser 02A
5.50%, 8/15/39 1,750 1,901,200
-------------
Virgin Islands-0.6%
A Virgin Islands Pub Fin Auth Rev
Ser 03
5.00%, 10/01/31 1,250 1,279,725
-------------
Total Long-Term Municipal Bonds
(cost $191,286,041) 199,575,191
-------------
Short-Term Municipal Notes(d)-5.4%
Arizona-3.1%
A-1 Coconino Cnty PCR
(Navajo Proj) Ser 94A AMT
1.16%, 10/01/29 2,500 2,500,000
A-1 Coconino Cnty PCR
(Arizona Public Service) Ser 98 AMT
1.13%, 11/01/33 4,200 4,200,000
-------------
6,700,000
-------------
Minnesota-0.5%
VMIG-1 Minnesota Higher Ed Fac Auth
(St Olaf College) Ser 02
1.12%, 10/01/20(a) 1,000 1,000,000
-------------
New York-0.2%
A-1+ Port Authority NY & NJ
(Versatile Structure) Ser 95-3
1.11%, 6/01/20 400 400,000
-------------
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 23
Arizona Portfolio-Portfolio of Investments
- -------------------------------------------------------------------------------
Standard Principal
& Poor's Amount
Ratings (000) Value
- -------------------------------------------------------------------------------
Virginia-1.6%
A-1+ King George Cnty IDR
(Birchwood Power Partners Proj)
Ser 95 AMT
1.15%, 11/01/25 $ 3,400 $ 3,400,000
-------------
Total Short-Term Municipal Notes
(cost $11,500,000) 11,500,000
-------------
Total Investments-98.6%
(cost $202,786,041) 211,075,191
Other assets less liabilities-1.4% 2,991,056
-------------
Net Assets-100% $ 214,066,247
=============
INTEREST RATE SWAP CONTRACTS (see Note D)
Rate Type
------------------------------
Notional Payments Payment
Swap Amount Termination made by received by Unrealized
Counterparty (000) Date the Portfolio the Portfolio Depreciation
- -------------- -------- ----------- -------------- -------------- -------------
JP Morgan $ 4,020 11/18/2004 1.297% BMA* $ (5,984)
85.10% of
Merrill Lynch 11,100 02/03/2006 BMA* 1 month LIBOR+ (6,882)
--------
$(12,866)
========
+ LIBOR (London Interbank Offered Rate)
* BMA (Bond Market Association)
See footnote summary on page 67.
See Glossary of Terms on page 67.
See notes to financial statements.
_______________________________________________________________________________
24 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Florida Portfolio-Portfolio of Investments
- -------------------------------------------------------------------------------
FLORIDA PORTFOLIO
PORTFOLIO OF INVESTMENTS
March 31, 2004 (unaudited)
Standard Principal
& Poor's Amount
Ratings (000) Value
- -------------------------------------------------------------------------------
MUNICIPAL BONDS & NOTES-103.3%
Long-Term Municipal Bonds-102.7%
Florida-93.4%
NR Beacon Tradeport Cmnty Dev Dist
Ser 02B
7.25%, 5/01/33 $ 2,410 $ 2,556,528
NR Bonnet Creek Resort Cmnty Dev Dist
Ser 02
7.25%, 5/01/18 2,000 2,116,200
Aaa Brevard Cnty Hsg Fin Auth SFMR
(Mortgage Rev) FHA Ser 94 AMT
6.70%, 9/01/27(a) 405 416,421
AAA Broward County COP
MBIA Ser 03
5.00%, 7/01/28 3,000 3,128,310
Baa3 Capital Trust Agy Arpt Fac
(Cargo Acq Grp) Ser 02 AMT
6.25%, 1/01/19(a) 500 508,010
(Cargo Acq Grp) Ser 03 AMT
5.75%, 1/01/32(a) 2,000 1,930,000
NR Concorde Estates Cmnty Dev Dist
Ser 04B
5.00%, 5/01/11 1,600 1,583,056
NR Crossings at Fleming Island
Cmnty Dev Dist
(Eagle Harbor) Ser 00C
7.10%, 5/01/30 2,240 2,385,242
A Dade Cnty Hsg Fin Auth MFHR
(Golden Lakes Apts) Ser 97A AMT
6.00%, 11/01/32(c) 250 256,640
6.05%, 11/01/39(c) 750 778,260
AAA Deltona Util Sys Rev
MBIA Ser 03
5.125%, 10/01/27 2,440 2,587,669
AAA Escambia Cnty Hsg Fin Auth SFMR
(Mortgage Rev) GNMA Ser 95B AMT
6.25%, 4/01/28 8,670 9,342,809
Baa2 Escambia Cnty PCR
(Champion Int'l Corp) Ser 96 AMT
6.40%, 9/01/30(a) 5,000 5,211,700
AAA Florida Hsg Fin Agy MFHR
(Turtle Creek Apts) AMBAC Ser 96C AMT
6.20%, 5/01/36 3,245 3,386,385
AAA Florida Hsg Fin Agy SFMR
(Mortgage Rev) Ser 95A AMT
6.65%, 1/01/24 2,590 2,664,825
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 25
Florida Portfolio-Portfolio of Investments
- -------------------------------------------------------------------------------
Standard Principal
& Poor's Amount
Ratings (000) Value
- -------------------------------------------------------------------------------
Aaa Florida Hsg Fin Corp MFHR
(Cobblestone Apts)
GNMA Ser 00K-1 AMT
6.10%, 6/01/42(a) $ 7,815 $ 8,333,213
AAA Florida Hsg Fin Corp MFHR
(Logans Pointe Apts) FSA Ser 99 AMT
6.00%, 6/01/39 5,080 5,363,210
AAA Florida Hsg Fin Corp MFHR
(Mystic Pointe II) GNMA Ser 00 AMT
6.30%, 12/01/41 1,165 1,254,414
AAA Florida Hsg Fin Corp MFHR
(Raintree Apts) GNMA Ser 00 AMT
6.05%, 3/01/42 5,885 6,246,457
AAA Florida Hsg Fin Corp MFHR
(Sabal Chase Apts) FSA Ser 00 AMT
6.00%, 5/01/40 3,650 3,826,587
A Florida Hsg Fin Corp MFHR
(Spring Harbor Apts) Ser 99C-1 AMT
5.90%, 8/01/39 2,540 2,646,274
AAA Florida Hsg Fin Corp MFHR
(Walker Ave Club) FSA Ser 00L-1 AMT
6.00%, 12/01/38 3,435 3,623,204
AAA Florida Hsg Fin Corp MFHR
(Waverly Apts) FSA Ser 00C-1 AMT
6.50%, 7/01/40 2,790 3,018,138
AAA Florida State Brd Ed Lottery Rev
Ser 03A
5.00%, 7/01/19 4,890 5,319,635
NR Gateway Cmnty Dev Dist
(Sun City Crt-Fort Meyers) Ser 03B
5.50%, 5/01/10 975 992,258
AAA Greater Orlando Aviation Arpt Fac
(Orlando Airport) FSA Ser 02A
5.125%, 10/01/32 2,530 2,644,179
NR Hamal Cmnty Dev Dist
Ser 01
6.65%, 5/01/21 1,100 1,155,704
AAA Hernando Cnty Cap Impt Rev
MBIA Ser 04
5.00%, 2/01/24 1,445 1,507,597
NR Herons Glen Recreation District
Ser 99
5.90%, 5/01/19 2,680 2,730,438
A- Highlands Cnty Hlth Facs Auth
(Adventist/Sunbelt Hosp) Ser 01A
6.00%, 11/15/31 2,000 2,137,620
AAA Hillsborough Cnty Arpt Auth
(Tampa Int'l Arpt) FGIC Ser 96A AMT
6.00%, 10/01/23 1,500 1,626,300
AAA Jacksonville Electrical Auth
AMBAC Ser 02B
5.00%, 10/01/26(e) 4,925 5,132,441
_______________________________________________________________________________
26 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Florida Portfolio-Portfolio of Investments
- -------------------------------------------------------------------------------
Standard Principal
& Poor's Amount
Ratings (000) Value
- -------------------------------------------------------------------------------
AA Jacksonville Electrical Auth
Series 02A
5.50%, 10/01/41 $ 3,750 $ 4,018,500
AAA Jacksonville Electrical Auth
MBIA Ser 02A
5.50%, 10/01/41 5,000 5,390,450
A+ Jacksonville Electrical Auth
Ser 02C
5.00%, 10/01/41 2,000 2,029,360
AA- Lakeland Water Sys Rev
Ser 02
5.25%, 10/01/32 10,000 10,589,399
AAA Lee Cnty Arpt Rev
(Southwest Int'l Arpt) FSA Ser 00A AMT
6.00%, 10/01/32 18,000 20,091,239
BBB- Lee Cnty Hlth Facs Auth Rev
(Shell Point) Ser 99A
5.50%, 11/15/29 2,000 1,951,580
Aaa Manatee Cnty Hsg Fin Agy SFMR
(Mortgage Rev) GNMA
Ser 96-1 AMT
5.625%, 11/01/14(a) 110 110,135
Ser 99 AMT
6.25%, 11/01/28(a) 1,595 1,640,266
NR Marshall Creek Cmnty Dev Dist
Ser 02A
6.625%, 5/01/32 1,000 1,048,220
BB Miami Beach Hlth Facs Auth Rev
(Mt Sinai Med Ctr) Ser 01A
6.80%, 11/15/31 4,100 4,147,478
A Miami-Dade Cnty Hsg Fin Agy MFHR
(Cntry Club Villas Apts) Ser 99A AMT
6.20%, 10/01/39 5,145 5,421,698
Aaa Miami-Dade Cnty Hsg Fin Agy SFMR
(Mortgage Rev) GNMA/FNMA AMT
6.00%, 10/01/32(a) 1,755 2,337,818
AAA Miami-Dade Cnty Hsg Fin Auth MFHR
(Marbrisa Apts) FSA Ser 00-2A AMT
6.15%, 8/01/38 1,515 1,633,912
NR Miromar Lakes Cmnty Dev Dist
Ser 00A
7.25%, 5/01/12 3,830 4,067,154
7.375%, 5/01/32 6,390 6,786,244
A- North Broward Hosp Rev
Ser 01
6.00%, 1/15/31 2,700 2,866,617
Aa3 North Miami Hlth Facs Auth Rev
(Catholic Hlth Svcs Oblig Grp) Ser 96
6.00%, 8/15/24(a) 1,200 1,253,436
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 27
Florida Portfolio-Portfolio of Investments
- -------------------------------------------------------------------------------
Standard Principal
& Poor's Amount
Ratings (000) Value
- -------------------------------------------------------------------------------
NR Northern Palm Beach Cnty Impt Dist
(Unit Development 27B) Ser 02
6.40%, 8/01/32 $ 1,135 $ 1,166,519
NR Northern Palm Beach Cnty Impt Dist
(Mirasol Unit #43)
6.10%, 8/01/21 750 782,198
6.125%, 8/01/31 1,000 1,031,770
A- Orange Cnty Hosp Rev
(Orlando Regional) Ser 02
5.75%, 12/01/32 1,320 1,383,096
A3 Orange Cnty Hsg Fin Auth MFHR
(Loma Vista Proj) Ser 99G AMT
5.50%, 3/01/32(a) 6,500 6,390,410
AA Orange County Hlth Facs Auth Rev
(Mayflower Retirement Proj)
Asset Gty Ser 99
5.25%, 6/01/29 1,060 1,094,196
AA- Orlando Util Cmnty Wtr & Elec Rev
Ser 02C
5.00%, 10/01/27 7,000 7,289,800
A Palm Beach Cnty IDR
(Lourdes-McKeen Residence) Ser 96
6.625%, 12/01/26 4,000 4,600,520
AAA Palm Beach Cnty Sch Brd COP
FSA Ser 02D
5.00%, 8/01/28 3,500 3,637,375
AAA Palm Coast Util Sys Rev
MBIA Ser 03
5.00%, 10/01/22 750 794,145
Aaa Pinellas Cnty Hsg Fin Auth SFMR
(Mortgage Rev) GNMA Ser 94A AMT
6.55%, 8/01/27(a) 1,920 1,965,542
NR Preserve at Wilderness Lake
Cmnty Dev Dist
Ser 02A
7.10%, 5/01/33 1,500 1,602,375
A+ South Miami Health Facs Hosp Rev
(Baptist Health)
5.25%, 11/15/33 2,000 2,053,840
Aaa St. Johns Cmnty Dev Dist
(Julington Creek Plantation) Ser 97
7.125%, 5/01/19(a) 7,725 9,118,281
Baa2 Tallahassee Hosp Rev
(Tallahassee Memorial) Ser 00
6.375%, 12/01/30(a) 4,500 4,373,280
AA Tampa Higher Ed
(Tampa University Proj) RADIAN Ser 02
5.625%, 4/01/32 3,175 3,410,268
AAA Village Ctr Cmnty Dev Dist
5.125%, 10/01/28 1,000 1,052,650
_______________________________________________________________________________
28 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Florida Portfolio-Portfolio of Investments
- -------------------------------------------------------------------------------
Standard Principal
& Poor's Amount
Ratings (000) Value
- -------------------------------------------------------------------------------
Baa3 Volusia Cnty Ed Fac Auth
(Embry Riddle Aero Univ) Ser 96A
6.125%, 10/15/26(a) $ 925 $ 950,484
Baa3 Volusia Cnty Ed Fac Auth
(Embry Riddle Aero Univ) Ser 99A
5.75%, 10/15/29(a) 2,000 1,968,400
NR Waterlefe Cmnty Dev Dist
Ser 01
6.95%, 5/01/31 740 792,806
NR Westchester Cmnty Dev Dist
Ser 03
6.00%, 5/01/23 2,500 2,560,600
-------------
229,811,785
-------------
California-2.2%
BBB California State GO
5.00%, 2/01/32 2,850 2,837,061
5.00%, 2/01/33 2,200 2,185,216
BBB Golden St Tobacco Securitization Corp.
Ser 03 -A-1
6.75%, 6/01/39 500 493,325
-------------
5,515,602
-------------
Connecticut-4.5%
AAA Connecticut State GO
MBIA Ser 04B
5.00%, 12/01/16 10,000 11,020,499
-------------
New Jersey-0.5%
BBB New Jersey Tobacco Settlement Rev
Ser 02
5.75%, 6/01/32 1,250 1,162,888
-------------
Ohio-1.3%
NR Cleveland Cuyahoga Port Auth
Ser 01
7.35%, 12/01/31 3,000 3,158,400
-------------
Rhode Island-0.4%
BBB Rhode Island Tobacco Settlement Rev
Ser 02A
6.125%, 6/01/32 950 886,787
-------------
Washington-0.4%
BBB Washington Tobacco Settlement Rev
Ser 02
6.50%, 6/01/26 1,045 1,027,789
-------------
Total Long-Term Municipal Bonds
(cost $239,595,158) 252,583,750
-------------
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 29
Florida Portfolio-Portfolio of Investments
- -------------------------------------------------------------------------------
Standard Principal
& Poor's Amount
Ratings (000) Value
- -------------------------------------------------------------------------------
Short-Term Municipal Notes(d)-0.6%
California-0.6%
A-1+ California State GO
Ser 03A-2
1.08%, 5/01/33 $ 500 $ 500,000
A-1+ Los Angeles Dept of Wtr and Pwr
Ser 01B-2
1.10%, 7/01/35 1,000 1,000,000
-------------
Total Short-Term Municipal Notes
(cost $1,500,000) 1,500,000
-------------
Total Investments-103.3%
(cost $241,095,158) 254,083,750
Other assets less liabilities-(3.3%) (8,056,779)
-------------
Net Assets-100% $ 246,026,971
=============
FINANCIAL FUTURES CONTRACTS (see Note D)
Value at
Number of Expiration Original March 31, Unrealized
Type Contracts Position Month Value 2004 Appreciation
- ------------- ---------- --------- ----------- ---------- ---------- --------------
U.S. Treasury
Note June
10 Yr Futures 10 Long 2004 $1,153,006 $1,154,063 $ 1,057
June
10 Yr Muni Index 21 Long 2004 2,182,423 2,190,563 8,140
-------
$ 9,197
=======
INTEREST RATE SWAP CONTRACTS (see Note D)
Rate Type
------------------------------
Notional Payment Payments
Swap Amount Termination made by received by Unrealized
Counterparty (000) Date the Portfolio the Portfolio Depreciation
- -------------- -------- ----------- -------------- -------------- -------------
85.10% of
Merrill Lynch $12,900 02/03/2006 BMA* 1 month LIBOR+ $(7,998)
+ LIBOR (London Interbank Offered Rate)
* BMA (Bond Market Association)
See footnote summary on page 67.
See Glossary of Terms on page 67.
See notes to financial statements.
_______________________________________________________________________________
30 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Massachusetts Portfolio-Portfolio of Investments
- -------------------------------------------------------------------------------
MASSACHUSETTS PORTFOLIO
PORTFOLIO OF INVESTMENTS
March 31, 2004 (unaudited)
Standard Principal
& Poor's Amount
Ratings (000) Value
- -------------------------------------------------------------------------------
MUNICIPAL BONDS-102.4%
Long-Term Municipal Bonds-102.4%
Massachusetts-76.7%
BBB- Massachusetts Hlth Fac
(Boston Biomedical) Ser 99
5.75%, 2/01/29 $ 1,800 $ 1,806,876
A Massachusetts Dev Fin Agy
(Massachusetts Biomedical) Ser 00C
6.25%, 8/01/20 3,000 3,334,740
BBB Massachusetts Ed Fac
(Massachusetts College of Pharmacy)
Ser 99B
6.75%, 7/01/30 5,350 5,849,048
BBB Massachusetts Ed Fac
(Suffolk Univ) Ser 99
5.85%, 7/01/29 1,375 1,445,263
AA Massachusetts Dev Fin Agy
(Worcester Redev) Asset Gty Ser 99
5.25%, 6/01/19 2,350 2,505,782
6.00%, 6/01/24 1,300 1,310,010
AAA Massachusetts Ed Fin Auth
(Educational Loan) MBIA Ser 00G AMT
6.00%, 12/01/16 1,600 1,679,472
AA Massachusetts Hlth & Ed Fac Auth
(Berkshire Healthcare) Asset Gty Ser 01E
5.70%, 10/01/25 4,000 4,341,560
AAA Massachusetts Hlth & Ed Fac Auth
(Beth Israel) AMBAC Ser 92
10.65%, 7/01/25(b) 2,000 2,041,580
AA Massachusetts Hlth & Ed Fac Auth
(Cape Cod Healthcare) Asset Gty Ser 01C
5.25%, 11/15/31 2,750 2,852,823
A- Massachusetts Hlth & Ed Fac Auth
(Covenant Medical Center) Ser 02
6.00%, 7/01/31 3,500 3,676,890
AAA Massachusetts Hlth & Ed Fac Auth
(New England Med Ctr) FGIC Ser 02H
5.00%, 5/15/25 2,000 2,061,740
AA- Massachusetts Hlth & Ed Fac Auth
(Partners Healthcare System) Ser 01C
5.75%, 7/01/32 5,000 5,344,250
AA Massachusetts Hlth & Ed Fac Auth
(Springfield College) Radian Ser 03
5.125%, 10/15/23 1,000 1,039,170
AAA Massachusetts Hlth & Ed Fac Auth
(University of Mass Proj) MBIA Ser 02C
5.25%, 10/01/31(e) 7,440 7,889,301
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 31
Massachusetts Portfolio-Portfolio of Investments
- -------------------------------------------------------------------------------
Standard Principal
& Poor's Amount
Ratings (000) Value
- -------------------------------------------------------------------------------
BBB Massachusetts Hlth & Ed Fac Auth
(Winchester Hosp) Ser 00E
6.75%, 7/01/30 $ 4,500 $ 4,835,115
AA+ Massachusetts Hlth & Ed Facs Auth
(Wellesley College)
5.00%, 7/01/33 2,755 2,855,888
AAA Massachusetts Hsg Fin Agy MFHR
(Harbor Point) AMBAC Ser 96A AMT
6.40%, 12/01/15 4,880 5,158,843
AAA Massachusetts Hsg Fin Agy MFHR
(Rental Mtg) AMT
AMBAC Ser 00A
6.00%, 7/01/41 4,900 5,182,730
AMBAC Ser 95E
6.00%, 7/01/37 2,680 2,776,587
MBIA Ser 00H
6.65%, 7/01/41 10,875 11,807,313
AAA Massachusetts Hsg Fin Agy SFMR
(Mortgage Rev) FSA Ser 73 AMT
5.90%, 12/01/23 560 580,042
AA Massachusetts Hsg Fin Agy SFMR
(Mortgage Rev) Ser 40 AMT
6.65%, 12/01/27 3,155 3,258,011
AAA Massachusetts Ind Fin Agy MFHR
(Heights Crossing) FHA Ser 95 AMT
6.15%, 2/01/35 7,000 7,419,790
AAA Massachusetts Port Auth Spec Fac
(US Air Proj) MBIA Ser 96A AMT
5.875%, 9/01/23 4,000 4,178,000
AAA Massachusetts Port Auth Spec Fac
(Bosfuel Corp) MBIA Ser 97 AMT
6.00%, 7/01/36 6,155 6,749,881
AA- Massachusetts St GO
Ser 02
Pre Refunded
5.25%, 11/01/30 3,075 3,504,670
Un Refunded
5.25%, 11/01/30 1,925 2,193,980
AA- Massachusetts St GO
Ser 04
7.46%, 8/01/16(b) 5,000 6,151,900
AAA University of Massachusetts Bldg Auth
AMBAC Ser 03-1
5.25%, 11/01/23 2,000 2,149,360
-------------
115,980,615
-------------
Arizona-7.3%
NR Dove Mtn Resort Cmnty Fac Dist
Ser 01
6.75%, 12/01/16 2,205 2,278,735
_______________________________________________________________________________
32 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Massachusetts Portfolio-Portfolio of Investments
- -------------------------------------------------------------------------------
Standard Principal
& Poor's Amount
Ratings (000) Value
- -------------------------------------------------------------------------------
NR Goodyear IDA Water & Sewer Rev
(Litchfield Pk Svc Proj) Ser 01 AMT
6.75%, 10/01/31 $ 5,160 $ 5,438,330
NR Stoneridge Cmnty Fac Dist
Ser 01
6.75%, 7/15/26 3,115 3,273,585
-------------
10,990,650
-------------
California-1.4%
BBB California State GO
Ser 04
5.00%, 2/01/33 1,000 993,280
NR Roseville Cmnty Fac Dist
(Woodcreek East) Ser 00
6.375%, 9/01/27 1,070 1,126,025
-------------
2,119,305
-------------
Colorado-3.8%
Aaa Larimer Weld & Boulder Cnty Sch Dist
FSA Ser 04A
5.00%, 12/15/05(a) 4,015 4,199,770
5.00%, 12/15/08(a) 1,430 1,588,287
-------------
5,788,057
-------------
Florida-1.2%
NR Crossings at Fleming Island CDD
(Eagle Harbor) Ser 00C
7.10%, 5/01/30 1,750 1,863,470
-------------
Nevada-1.4%
NR Clark Cnty Impt Dist No. 142
Ser 03
6.10%, 8/01/18 1,000 1,015,490
NR Henderson Loc Impt Dist
Ser 03
5.80%, 3/01/23 1,000 1,039,720
-------------
2,055,210
-------------
Puerto Rico-9.4%
AAA Puerto Rico Comwlth Hwy & Tran Auth Rev
FGIC Ser 03
7.865%, 7/01/14 4,315 5,542,100
AAA Puerto Rico Elec Pwr Auth
XLCA Ser 02-1
5.25%, 7/01/22 6,400 6,946,240
BBB Puerto Rico Tobacco Settlement Rev
(Childrens Trust Fund) Ser 02
5.625%, 5/15/43 1,800 1,778,814
-------------
14,267,154
-------------
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 33
Massachusetts Portfolio-Portfolio of Investments
- -------------------------------------------------------------------------------
Standard Principal
& Poor's Amount
Ratings (000) Value
- -------------------------------------------------------------------------------
Rhode Island-1.2%
BBB Rhode Island Tobacco Settlement Rev
Ser 02A
6.125%, 6/01/32 $ 1,950 $ 1,820,247
-------------
Total Investments-102.4%
(cost $145,441,247) 154,884,708
Other assets less liabilities-(2.4%) (3,585,774)
-------------
Net Assets-100% $ 151,298,934
=============
FINANCIAL FUTURES CONTRACTS (see Note D)
Value at Unrealized
Number of Expiration Original March 31, Appreciation/
Type Contracts Position Month Value 2004 (Depreciation)
- ------------- ---------- --------- ----------- ---------- ----------- --------------
U.S. Treasury
Note June
2 Yr Futures 25 Short 2004 $5,358,500 $5,379,297 $(20,797)
U.S. Treasury
Note June
5 Yr Futures 11 Short 2004 1,234,881 1,249,188 (14,307)
U.S. Treasury
Note June
10 Yr Futures 7 Long 2004 796,659 807,844 11,185
--------
$(23,919)
========
INTEREST RATE SWAP CONTRACTS (see Note D)
Rate Type
------------------------------
Notional Payment Payment Unrealized
Swap Amount Termination made by received by Appreciation/
Counterparty (000) Date the Portfolio the Portfolio (Depreciation)
- -------------- -------- ----------- -------------- -------------- -------------
JP Morgan $5,445 9/17/04 BMA* 1.12% $ 2,801
JP Morgan 4,315 11/18/04 1.297% BMA* (6,423)
Merrill Lynch 5,000 1/29/05 1.25% BMA* (10,350)
85.10% of
Merrill Lynch 8,000 2/03/06 BMA* 1 month LIBOR+ (4,960)
--------
$(18,932)
========
+ LIBOR (London Interbank Offered Rate)
* BMA (Bond Market Association)
See footnote summary on page 67.
See Glossary of Terms on page 67.
See notes to financial statements.
_______________________________________________________________________________
34 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Michigan Portfolio-Portfolio of Investments
- -------------------------------------------------------------------------------
MICHIGAN PORTFOLIO
PORTFOLIO OF INVESTMENTS
March 31, 2004 (unaudited)
Standard Principal
& Poor's Amount
Ratings (000) Value
- -------------------------------------------------------------------------------
MUNICIPAL BONDS & NOTE-98.3%
Long-Term Municipal Bonds-98.0%
Michigan-73.0%
Aa1 Allen Park Pub Sch Dist
Ser 03
7.40%, 5/01/18(a)(b) $ 6,400 $ 7,700,736
AAA Cedar Springs Pub Sch Dist
Ser 03
5.00%, 5/01/28 4,335 4,514,512
AAA Detroit School Board
(School Board Loan Fund) FSA Ser 01A
5.125%, 5/01/31 2,900 3,021,452
BB- Detroit Tax Increment
(Diamler/Chrysler Assembly Plant)
Ser 98A
5.50%, 5/01/21 1,720 1,421,941
AAA Detroit Water Supply System
FGIC Ser 01B
5.50%, 7/01/33 3,550 3,950,866
Aaa Emmet Cnty Bldg Auth
AMBAC Ser 03
5.00%, 5/01/17(a) 1,355 1,463,630
AAA Kalamazoo Hosp Fin Auth
(Borgess Med Ctr) FGIC Ser 94A
9.31%, 6/01/11(b) 2,360 2,478,732
AAA Lansing Water & Elec System
FSA Ser 03A
5.00%, 7/01/25 2,200 2,294,094
BBB Michigan Higher Ed Fac
(Hope College) Ser 02A
5.90%, 4/01/32 3,465 3,675,326
AAA Michigan Higher Ed Student Loan Auth
AMBAC Ser 17G AMT
5.20%, 9/01/20 3,500 3,689,805
A+ Michigan Hosp Fin Auth
(Crittenton Hospital) Ser 02A
5.625%, 3/01/27 3,000 3,139,860
AA- Michigan Hosp Fin Auth
(Trinity Health) Ser 00A
6.00%, 12/01/27 5,485 5,954,516
AAA Michigan Hsg Dev Auth MFHR
(Rental Rev) AMBAC Ser 97A AMT
6.10%, 10/01/33 7,400 7,746,838
Aaa Michigan Hsg Dev Auth MFHR
(Arbor Pointe) GNMA Ser 99
5.40%, 6/20/40(a) 1,810 1,859,829
AAA Michigan Hsg Dev Auth MFHR
(Danbury Manor) FNMA Ser 02A AMT
5.30%, 6/01/35 2,575 2,657,374
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 35
Michigan Portfolio-Portfolio of Investments
- -------------------------------------------------------------------------------
Standard Principal
& Poor's Amount
Ratings (000) Value
- -------------------------------------------------------------------------------
Aaa Michigan Hsg Dev Auth MFHR
(Oakbrook Villa Proj)
GNMA Ser 00A AMT
6.50%, 1/20/42(a) $ 2,985 $ 3,238,934
Aaa Michigan Hsg Dev Auth MFHR
(Rental Rev) Ser 02A AMT
5.50%, 10/20/43(a) 2,000 2,068,560
AAA Michigan Hsg Dev Auth SFMR
(Mortgage Rev) MBIA Ser 02B AMT
5.50%, 6/01/30 1,100 1,131,933
AAA Michigan Pub Pwr Agy Rev
(Belle River) MBIA Ser 02
12.96%, 7/01/11(b) 1,200 1,759,080
AAA Michigan State
(Trunk Line Fund) FSA Ser 01A
5.25%, 11/01/30 4,000 4,219,440
A- Michigan Strategic Fund
(Detroit Edison) Ser 01B AMT
5.65%, 9/01/29 2,250 2,366,482
AAA Michigan Strategic Fund
(Detroit Edison) XLCA Ser 02C AMT
5.45%, 12/15/32 3,000 3,178,620
AAA Michigan Strategic Fund
(Detroit Edison) MBIA Ser 95AA
6.40%, 9/01/25 2,665 2,899,280
AAA Michigan Strategic Fund Hlth Fac
(Autumn Wood) GNMA Ser 02A
5.20%, 12/20/22 3,000 3,142,620
NR Michigan Strategic Fund Hlth Fac
(Holland Home) Ser 98
5.75%, 11/15/18 1,000 1,014,190
5.75%, 11/15/28 1,000 1,011,980
BBB Michigan Strategic Fund
(General Motors Corp.) Ser 95
6.20%, 9/01/20 1,000 1,035,250
BB- Midland Cnty PCR
(CMS Energy) Ser 00A AMT
6.875%, 7/23/09 2,000 2,096,620
AAA North Muskegon Sch Dist
Ser 03
5.25%, 5/01/28 1,500 1,599,105
AAA Olivet School Board Fund
Ser 02
5.125%, 5/01/28 1,065 1,118,836
AAA Ovid Elsie School Board Fund
Ser 02
5.00%, 5/01/25 2,650 2,766,282
_______________________________________________________________________________
36 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Michigan Portfolio-Portfolio of Investments
- -------------------------------------------------------------------------------
Standard Principal
& Poor's Amount
Ratings (000) Value
- -------------------------------------------------------------------------------
BB+ Pontiac Tax Increment Fin Auth
(Dev Area #3) Ser 02
6.25%, 6/01/22 $ 2,780 $ 2,901,736
6.375%, 6/01/31 3,250 3,316,235
BBB+ Romulus Tax Increment Fin Auth
Ser 94
6.75%, 11/01/19 1,585 1,696,489
AAA Royal Oak Hosp Fin Auth
(William Beaumont Hosp) MBIA Ser 01M
5.25%, 11/15/35 3,200 3,350,976
A Saginaw Hosp Fin Auth
(Convenant Medical Ctr) Ser 00F
6.50%, 7/01/30 2,520 2,755,721
AAA Wayne Charter Cnty
(Detroit Metro Arpt Hotel) MBIA Ser 01A
5.00%, 12/01/30 2,930 3,025,401
AAA Whitmore Lake Pub Sch Dis
Ser 03
5.00%, 5/01/24 1,975 2,065,791
-------------
109,329,072
-------------
California-3.4%
BBB California State GO
Ser 04
5.00%, 2/01/33 1,000 993,280
AA- California Health Fac Fin Auth
(Sutter Heath) Ser 00A
6.25%, 8/15/35 3,600 4,054,968
-------------
5,048,248
-------------
Florida-7.2%
Baa3 Capital Trust Agy Rev
(Cargo Acq Grp) Ser 03 AMT
5.75%, 1/01/32(a) 1,500 1,453,395
NR Collier Cnty Cmnty Dev Dist
(Fiddlers Creek) Ser 96
7.50%, 5/01/18 1,810 1,925,894
NR Crossings at Fleming Island
Cmnty Dev Dist
(Eagle Harbor) Ser 00C
7.10%, 5/01/30 1,835 1,953,981
NR Double Branch Cmnty Dev Dist
(Oakleaf Village) Ser 02A
6.70%, 5/01/34 1,000 1,062,540
NR Gateway Cmnty Dev Dist
(Sun City) Ser 03B
5.50%, 5/01/10 985 1,002,435
NR Miromar Lakes Cmnty Dev Dist
Ser 00A
7.375%, 5/01/32 1,000 1,062,010
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 37
Michigan Portfolio-Portfolio of Investments
- -------------------------------------------------------------------------------
Standard Principal
& Poor's Amount
Ratings (000) Value
- -------------------------------------------------------------------------------
NR Northern Palm Beach Asses Dist
(Unit Development 27B) Ser 02
6.40%, 8/01/32 $ 835 $ 858,188
NR Waterlefe Cmnty Dev Dist
Ser 01B
6.25%, 5/01/10 1,435 1,460,974
-------------
10,779,417
-------------
Illinois-0.6%
NR Antioch Village Spl Svc Area
(Clublands Proj) Ser 03
6.625%, 3/01/33 500 501,115
NR Antioch Village Spl Svc Area
(Deercrest Proj) Ser 03
6.625%, 3/01/33 500 501,115
-------------
1,002,230
-------------
Puerto Rico-11.6%
AAA Puerto Rico Elec Pwr Auth Rev
XLCA Ser 02-1
5.25%, 7/01/22 5,000 5,426,750
AAA Puerto Rico Hsg Fin Corp SFMR
(Mortgage Rev) GNMA AMT
Ser 98
5.20%, 12/01/32 1,215 1,240,041
Ser 01B
5.50%, 12/01/23 2,240 2,291,654
AAA Puerto Rico Hsg Fin Corp SFMR
(Mortgage Rev) Ser 01C AMT
5.30%, 12/01/28 1,965 2,004,693
AA Puerto Rico Ind Fin Auth Hlth Fac
(Ascension Health) Ser 00A
6.125%, 11/15/30 3,000 3,356,670
AAA Puerto Rico Pub Fin Corp
MBIA Ser 01A
5.00%, 8/01/31 2,875 3,000,091
-------------
17,319,899
-------------
Rhode Island-2.2%
BBB Rhode Island Tobacco Settlement Rev
Ser 02A
6.125%, 6/01/32 2,000 1,866,920
6.25%, 6/01/42 1,555 1,448,794
-------------
3,315,714
-------------
Total Long-Term Municipal Bonds
(cost $140,118,199) 146,794,580
-------------
_______________________________________________________________________________
38 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Michigan Portfolio-Portfolio of Investments
- -------------------------------------------------------------------------------
Standard Principal
& Poor's Amount
Ratings (000) Value
- -------------------------------------------------------------------------------
Short-Term Municipal Note(d)-0.3%
Michigan-0.3%
VMIG-1 Michigan Strategic Fund Ltd
(Henry Ford Museum) Ser 02
1.10%, 12/01/33(a) $ 500 $ 500,000
-------------
Total Short-Term Municipal Note
(cost $500,000) 500,000
-------------
Total Investments-98.3%
(cost $140,618,199) 147,294,580
Other assets less liabilities-1.7% 2,472,038
-------------
Net Assets-100% $ 149,766,618
=============
INTEREST RATE SWAP CONTRACTS (see Note D)
Rate Type
------------------------------
Notional Payment Payment
Swap Amount Termination made by received by Unrealized
Counterparty (000) Date the Portfolio the Portfolio Depreciation
- -------------- -------- ----------- -------------- -------------- -------------
JP Morgan $9,215 11/18/04 1.297% BMA* $(13,717)
85.10% of
Merrill Lynch 8,000 02/03/06 BMA* 1 month LIBOR+ (4,960)
--------
$(18,677)
========
+ LIBOR (London Interbank Offered Rate)
* BMA (Bond Market Association)
See footnote summary on page 67.
See Glossary of Terms on page 67.
See notes to financial statements.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 39
Minnesota Portfolio-Portfolio of Investments
- -------------------------------------------------------------------------------
MINNESOTA PORTFOLIO
PORTFOLIO OF INVESTMENTS
March 31, 2004 (unaudited)
Standard Principal
& Poor's Amount
Ratings (000) Value
- -------------------------------------------------------------------------------
MUNICIPAL BONDS & NOTE-101.8%
Long-Term Municipal Bonds-99.1%
Minnesota-96.8%
AA Bemidji Hlth Fac
(North Country Hlth Svcs) RADIAN Ser 02
5.00%, 9/01/31(e) $ 2,000 $ 2,039,780
AAA Brooklyn Park MFHR
(Brooks Landing) FNMA Ser 99A AMT
5.50%, 7/01/19 1,355 1,416,531
AAA Cass Lake Sch Dist FGIC
5.00%, 2/01/26 1,760 1,845,606
Aaa Chaska Minn Sch Dist
MBIA Ser 04 A
4.25%, 2/01/23(a) 4,805 4,701,116
Aaa Dakota Cmnty Dev Agy MFHR
(Buffalo Ridge Apts) GNMA Ser 02
5.50%, 7/20/43(a) 3,675 3,836,002
Aaa Dakota Cnty MFHR
(Grande Market Place Proj)
GNMA Ser 02A AMT
5.40%, 11/20/43(a) 5,350 5,498,141
Aaa Eagan MFHR
(Woodridge Apts) GNMA Ser 97A
5.95%, 2/01/32(a) 1,600 1,676,320
Aaa Elk River Indpt Sch Dist
FSA Ser 03
7.36%, 2/01/15(a)(b) 3,065 3,747,637
BBB+ Golden Valley Hlth Fac
(Convenant Retirement Cmnty) Ser 99A
5.50%, 12/01/29 1,000 1,010,500
Aaa Little Canada MFHR
(Cedars Lakeside Apts) GNMA Ser 97A
5.95%, 2/01/32(a) 2,650 2,776,405
AAA Metropolitan Council
Ser 04A
5.00%, 2/01/24 1,330 1,395,170
Ser 04 B
5.00%, 12/01/23 2,050 2,176,936
A- Minneapolis Common Bond Fund
Ser 01G-3
5.45%, 12/01/31 1,500 1,580,400
Ser 97-2 AMT
6.20%, 6/01/17 1,795 1,917,455
Ser 95-2 AMT
6.625%, 12/01/15 1,245 1,289,920
A3 Minneapolis Hosp Rev
(Allina Hlth Sys) Ser 02A
5.75%, 11/15/32(a) 1,500 1,591,860
_______________________________________________________________________________
40 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Minnesota Portfolio-Portfolio of Investments
- -------------------------------------------------------------------------------
Standard Principal
& Poor's Amount
Ratings (000) Value
- -------------------------------------------------------------------------------
Aaa Minneapolis MFHR
(Bottineau Commons Proj)
GNMA Ser 02 AMT
5.45%, 4/20/43(a) $ 2,000 $ 2,064,300
Aaa Minneapolis MFHR
(Sumner Field) GNMA Ser 02 AMT
5.60%, 11/20/43(a) 2,505 2,598,436
AAA Minneapolis Pkg Assmt
MBIA Ser 02
5.25%, 12/01/26 2,000 2,158,500
AAA Minneapolis & St. Paul Arpt Rev
FGIC Ser 00B AMT
6.00%, 1/01/21 3,455 3,848,524
AAA Minneapolis & St. Paul Arpt Rev
MBIA Ser 03A
5.00%, 1/01/28 2,500 2,611,375
NR Minnesota Agric & Eco Dev
(Small Business Loan Proj) AMT
Ser 96A
6.75%, 8/01/16 1,450 1,537,609
Ser 00A
7.25%, 8/01/20 1,000 1,085,850
Ser 00B
7.25%, 8/01/20 1,000 1,085,850
Ser 00C
7.25%, 8/01/20 1,000 1,085,850
Ser 00D
7.25%, 8/01/20 1,000 1,085,850
AAA Minnesota Agric & Eco Dev Hlth Fac
(Benedictine Hlth Sys) MBIA Ser 99
5.125%, 2/15/29 4,000 4,172,320
A- Minnesota Agric & Eco Dev Hlth Fac
(Evangelical Lutheran Proj) Ser 02
6.00%, 2/01/22 1,130 1,200,953
6.00%, 2/01/27 1,750 1,855,227
A Minnesota Agric & Eco Dev Hlth Fac
(Fairview Hlth) Ser 00A
6.375%, 11/15/29 1,750 1,907,902
Baa2 Minnesota Higher Ed Fac Auth
(College Art & Design) Ser 00-5D
6.75%, 5/01/26(a) 1,000 1,112,740
Baa1 Minnesota Higher Ed Fac Auth
(Hamline Univ) Ser 99-5B
6.00%, 10/01/29(a) 1,250 1,340,912
Baa1 Minnesota Higher Ed Fac Auth
(St Catherine College)
5.375%, 10/01/32(a) 1,000 1,048,940
AAA Minnesota Hsg Fin Agy MFHR
(Rental Rev) MBIA Ser 95D
6.00%, 2/01/22 855 879,282
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 41
Minnesota Portfolio-Portfolio of Investments
- -------------------------------------------------------------------------------
Standard Principal
& Poor's Amount
Ratings (000) Value
- -------------------------------------------------------------------------------
AA+ Minnesota Hsg Fin Agy SFMR
(Mortgage Rev) AMT
Ser 96F
6.30%, 1/01/28 $ 1,510 $ 1,561,491
Ser 96G
6.25%, 7/01/26 2,285 2,357,526
Ser 98H-2
6.05%, 7/01/31 3,200 3,369,088
Aaa Minnetonka MFHR
(Archer Heights Apts Proj)
GNMA Ser 99A AMT
5.30%, 1/20/27(a) 1,620 1,674,724
BBB Sartell Poll Ctl Rev
(International Paper) Ser 03A
5.20%, 6/01/27 1,000 1,015,220
Aaa Scott Cnty MFHR
(Northridge Apts Proj) MBIA Ser 03
5.00%, 2/01/34(a) 1,000 1,020,670
Aaa Shoreview MFHR
(Lexington Shores Proj) GNMA Ser 01A AMT
5.55%, 8/20/42(a) 1,445 1,487,599
Aaa St. Cloud Hosp Rev
(Saint Cloud Hosp) FSA Ser 00A
5.875%, 5/01/30(a) 3,750 4,257,075
AAA St. Paul MFHR
(Burlington Apt-8) GNMA
5.35%, 5/01/31 1,550 1,564,136
AAA St. Paul Pkg Auth Rev
(Block 19 Ramp) FSA Ser 02A
5.35%, 8/01/29 3,075 3,314,020
AA+ St. Paul Port Auth Lease Rev Ser 02
5.25%, 12/01/27 1,725 1,839,730
AA+ St. Paul Port Auth Lease Rev
(Cedar St. Office Building) Ser 03
5.00%, 12/01/23 1,000 1,051,550
AA Waconia Hlth Care Fac Rev
(Ridgeview Med Ctr) RADIAN Ser 99A
6.125%, 1/01/29 3,415 3,858,267
Aaa Western Power Agy
MBIA Ser 03A
5.00%, 1/01/26(a) 3,500 3,676,680
AAA White Bear Lake MFHR
(Renova Partners Proj) FNMA Ser 01 AMT
5.60%, 10/01/30 1,000 1,039,200
Aaa Willmar Hosp Rev
(Rice Mem Hosp Proj) FSA Ser 02
5.00%, 2/01/32(a) 2,000 2,076,460
-------------
106,343,635
-------------
_______________________________________________________________________________
42 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Minnesota Portfolio-Portfolio of Investments
- -------------------------------------------------------------------------------
Standard Principal
& Poor's Amount
Ratings (000) Value
- -------------------------------------------------------------------------------
New Jersey-1.4%
BBB New Jersey Tobacco Settlement Rev
Ser 03
6.75%, 6/01/39 $ 1,500 $ 1,479,975
-------------
Rhode Island-0.9%
BBB Rhode Island Tobacco Settlement Rev
Ser 02A
6.25%, 6/01/42 1,115 1,038,846
-------------
Total Long-Term Municipal Bonds
(cost $103,702,284) 108,862,456
-------------
Short-Term Municipal Note(d)-2.7%
Minnesota-2.7%
Aaa Robbinsdale Minn Hlth Facs Rev
(North Mem Hlth) Ser 03
0.92%, 5/15/33(a)(c) 3,000 3,000,000
-------------
Total Short-Term Municipal Note
(cost $3,000,000) 3,000,000
-------------
Total Investments-101.8%
(cost $106,702,284) 111,862,456
Other assets less liabilities-(1.8)% (2,033,496)
-------------
Net Assets-100% $ 109,828,960
=============
FINANCIAL FUTURES CONTRACTS (see Note D)
Value at Unrealized
Number of Expiration Original March 31, Appreciation/
Type Contracts Position Month Value 2004 (Depreciation)
- ------------- ---------- --------- ----------- ---------- ---------- --------------
U.S. Treasury
Note June
10 Yr Futures 4 Long 2004 $465,202 $461,625 $ (3,577)
10 Yr June
Muni Index 6 Long 2004 624,241 625,875 1,634
--------
$ (1,943)
========
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 43
Minnesota Portfolio-Portfolio of Investments
- -------------------------------------------------------------------------------
INTEREST RATE SWAP CONTRACTS (see Note D)
Rate Type
------------------------------
Notional Payment Payment
Swap Amount Termination made by received by Unrealized
Counterparty (000) Date the Portfolio the Portfolio Depreciation
- -------------- -------- ----------- -------------- -------------- -------------
JP Morgan $3,065 11/18/04 1.297% BMA* $(4,562)
85.10% of
Merrill Lynch 5,600 02/03/06 BMA* 1 month LIBOR+ (3,472)
-------
$(8,034)
=======
+ LIBOR (London Interbank Offered Rate)
* BMA (Bond Market Association)
See footnote summary on page 67.
See Glossary of Terms on page 67.
See notes to financial statements.
_______________________________________________________________________________
44 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
New Jersey Portfolio-Portfolio of Investments
- -------------------------------------------------------------------------------
NEW JERSEY PORTFOLIO
PORTFOLIO OF INVESTMENTS
March 31, 2004 (unaudited)
Standard Principal
& Poor's Amount
Ratings (000) Value
- -------------------------------------------------------------------------------
MUNICIPAL BONDS-100.4%
Long-Term Municipal Bonds-100.4%
New Jersey-91.0%
AAA Hoboken Parking Auth
AMBAC Ser 01A
5.30%, 5/01/27 $ 3,700 $ 4,319,195
Aaa Lafayette Yard Com Dev Corp
(Conv Ctr Hotel Proj) MBIA Ser 00
5.80%, 4/01/35(a) 2,100 2,479,470
Aaa Lafayette Yard Com Dev Corp
(Conv Ctr Hotel Proj) FGIC Ser 01
5.00%, 4/01/35(a) 4,000 4,133,320
AAA Middlesex Cnty MFHR
FNMA Ser 01 AMT
5.25%, 7/01/21 750 795,788
5.35%, 7/01/34 1,500 1,566,615
Aa3 Newark GO FSA
5.00%, 7/15/18(a) 1,550 1,659,353
AAA New Jersey Eco Dev Auth
(American Water Co) FGIC AMT
6.875%, 11/01/34 5,000 5,248,350
A+ New Jersey Eco Dev Auth
(Anheuser-Busch) Ser 95 AMT
5.85%, 12/01/30 8,000 8,310,720
B New Jersey Eco Dev Auth
(Continental Airlines) Ser 00 AMT
7.20%, 11/15/30 1,850 1,648,924
AAA New Jersey Eco Dev Auth
(Hackensack Water Co) MBIA Ser 94B AMT
5.90%, 3/01/24(e) 4,000 4,100,000
Baa3 New Jersey Eco Dev Auth
(Kapkowski Rd) Ser 98B AMT
6.50%, 4/01/31(a) 2,085 2,392,558
Baa3 New Jersey Eco Dev Auth
(Kapkowski Rd) Ser 98B
6.50%, 4/01/28(b) 7,500 8,795,625
AA- New Jersey Eco Dev Auth
(Liberty State Park Proj) Ser A
5.00%, 3/01/24 1,500 1,567,890
A+ New Jersey Eco Dev Auth
(Masonic Charity Foundation Proj) Ser 01
5.50%, 6/01/31 1,000 1,070,420
A New Jersey Eco Dev Auth
(NUI Corp) ACA Ser 98A AMT
5.25%, 11/01/33 5,600 5,724,544
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 45
New Jersey Portfolio-Portfolio of Investments
- -------------------------------------------------------------------------------
Standard Principal
& Poor's Amount
Ratings (000) Value
- -------------------------------------------------------------------------------
AAA New Jersey Eco Dev Auth
(Pub Ser Elec & Gas) MBIA Ser 94A AMT
6.40%, 5/01/32 $ 5,000 $ 5,117,000
A+ New Jersey Eco Dev Auth Hlth Fac
(Masonic Charity Foundation Proj) Ser 02
5.25%, 6/01/24 540 564,089
AAA New Jersey Eco Dev Auth School Fac
AMBAC Ser 03
13.60%, 6/15/21(b) 2,250 2,686,860
AAA New Jersey Eco Dev Auth School Fac
MBIA Ser 04
7.427%, 9/01/16(b) 5,000 5,966,100
AAA New Jersey Higher Ed
(Rowan University) FGIC Ser 01C
5.00%, 7/01/31 1,000 1,040,320
AAA New Jersey Higher Ed
(Student Loan) MBIA Ser 00A AMT
6.15%, 6/01/19 1,180 1,271,450
A- New Jersey Hlth Care Fac
(Atlantic City Med Ctr) Ser 02
5.75%, 7/01/25 2,500 2,649,375
AA New Jersey Hlth Care Fac
(Bayshore Cnmty Hosp) RADIAN Ser 02
5.125%, 7/01/32 9,250 9,538,230
BBB New Jersey Hlth Care Fac
(Capital Health System) Ser 03
5.00%, 7/01/26 1,250 1,276,813
AAA New Jersey Hlth Care Fac
(Englewood Hosp) MBIA Ser 02
5.00%, 8/01/31 3,500 3,629,990
AA New Jersey Hlth Care Fac
(Good Shepherd) RADIAN Ser 01A
5.20%, 7/01/31 1,350 1,396,778
AAA New Jersey Hlth Care Fac
(Jersey City Medical Center)
FHA AMBAC Ser 01
5.00%, 8/01/41 4,095 4,223,829
A3 New Jersey Hlth Care Fac
(Kennedy Health System) Ser 01
5.625%, 7/01/31(a) 4,825 5,011,824
Aaa New Jersey Hlth Care Fac
(Newton Memorial Hosp) FSA Ser 01
5.00%, 7/01/26(a) 1,500 1,557,390
A New Jersey Hlth Care Fac
(Palisades Med Ctr) ACA Ser 99
5.25%, 7/01/28 1,000 1,029,370
A+ New Jersey Hlth Care Fac
(Robert Wood Johnson) Ser 00
5.75%, 7/01/31 5,350 5,700,853
_______________________________________________________________________________
46 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
New Jersey Portfolio-Portfolio of Investments
- -------------------------------------------------------------------------------
Standard Principal
& Poor's Amount
Ratings (000) Value
- -------------------------------------------------------------------------------
AA New Jersey Hlth Care Fac
(Southern Ocean County Hosp)
RADIAN Ser 01
5.125%, 7/01/31 $ 4,500 $ 4,666,185
AAA New Jersey Hsg & Mtg Fin Agy MFHR
(Pooled Loan) AMBAC Ser 96A AMT
6.25%, 5/01/28 5,000 5,225,750
AAA New Jersey Hsg & Mtg Fin Agy MFHR
(Rental Hsg) FSA AMT
Ser 00A1
6.35%, 11/01/31 2,000 2,140,700
Ser 01A
5.05%, 5/01/34 5,390 5,440,828
AAA New Jersey Hsg & Mtg Fin Agy SFMR
(Mortgage Rev) MBIA Ser 95 AMT
6.35%, 10/01/27 575 591,928
AAA New Jersey State Ed Fac Auth
(Higher Ed Cap Impt) Ser 02A
5.125%, 9/01/22 2,500 2,656,800
AAA New Jersey State Ed Fac Auth
(Ramapo College) AMBAC Ser 01D
5.00%, 7/01/31 1,000 1,036,160
A- New Jersey State Ed Fac Auth
(Stevens Inst of Technology) Ser 02C
5.25%, 7/01/32 1,250 1,266,338
AAA New Jersey State Tpk Auth
FSA Ser 03A
5.00%, 1/01/23 10,000 10,543,999
AAA New Jersey State Trans Auth
(Transportation System) MBIA Ser 01B
5.00%, 12/15/21 3,000 3,144,150
AA- New Jersey State Trans Auth
(Transportation System) Ser 03C
5.50%, 6/15/24 3,750 4,088,550
BBB New Jersey Tobacco Settlement Rev
Ser 02
6.125%, 6/01/42 8,000 7,317,200
NR North Hudson Sew Auth
MBIA Ser 01A
Zero Coupon, 8/01/24 12,340 4,586,408
AAA Port Auth of NY & NJ
(JFK Int'l Airport Proj) MBIA Ser 97-6 AMT
5.75%, 12/01/22 8,675 9,564,273
AAA Port Auth of NY & NJ
(96th) FGIC Ser 94 AMT
6.60%, 10/01/23 9,340 9,668,113
AAA Port Auth of NY & NJ
(121st) MBIA Ser 00
5.375%, 10/15/35 5,000 5,351,050
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 47
New Jersey Portfolio-Portfolio of Investments
- -------------------------------------------------------------------------------
Standard Principal
& Poor's Amount
Ratings (000) Value
- -------------------------------------------------------------------------------
AAA Port Auth of NY & NJ
(126th) FGIC Ser 02
5.25%, 5/15/37 $ 2,500 $ 2,615,750
BBB Salem Cnty PCR
(PSE&G Power) Ser 01A AMT
5.75%, 4/01/31 1,500 1,560,795
AA- Salem Cnty Waste Disp Rev
(E.I. Dupont) Ser 92A AMT
6.125%, 7/15/22 3,500 3,547,075
A South Jersey Port Corp
(Marine Terminal) AMT
5.20%, 1/01/23 1,000 1,033,250
BBB- South Jersey Transportation Auth
(Raytheon Aircraft Service) Ser 97A AMT
6.15%, 1/01/22 335 339,901
Aaa Union Cnty Impt Auth
MBIA Ser 03A
5.25%, 8/15/23(a) 2,885 3,110,376
AAA Vineland Sewer Rev
(Landis Sewerage) FGIC Ser 93C
10.07%, 9/19/19(b) 3,250 4,504,370
-------------
200,472,992
-------------
California-0.9%
BBB California State GO
5.00%, 2/01/33 2,000 1,986,560
-------------
Colorado-2.1%
Aaa Larimer Weld & Boulder Cnty Sch Dist
FSA Ser 04A
5.00%, 12/15/06(a) 4,215 4,529,608
-------------
Florida-3.0%
NR Crossings at Fleming Island
Cmnty Dev Dist
(Eagle Harbor) Ser 00C
7.10%, 5/01/30 2,500 2,662,100
NR Double Branch Cmnty Dev Dist
(Oakleaf Village) Ser 02A
6.70%, 5/01/34 1,000 1,062,540
NR Miromar Lakes Cmnty Dev Dist
Ser 00A
7.375%, 5/01/32 1,475 1,566,465
NR Northern Palm Beach Cnty Impt Dist
Ser 02
6.40%, 8/01/32 1,300 1,336,101
-------------
6,627,206
-------------
_______________________________________________________________________________
48 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
New Jersey Portfolio-Portfolio of Investments
- -------------------------------------------------------------------------------
Standard Principal
& Poor's Amount
Ratings (000) Value
- -------------------------------------------------------------------------------
Illinois-0.5%
NR Antioch Village Spl Svc Area
(Clublands Proj) Ser 03
6.625%, 3/01/33 $ 1,000 $ 1,002,230
-------------
Nevada-0.9%
NR Henderson Loc Impt Dist
Ser 03
5.80%, 3/01/23 1,000 1,039,720
NR North Las Vegas Cmnty Fac Dist
(#60 Aliante)
6.40%, 12/01/22 1,000 1,030,220
-------------
2,069,940
-------------
Pennsylvania-0.9%
A- Delaware Riv Jt Toll Bridge Rev
(PA/NJ Bridge) Ser 03
5.00%, 7/01/28 2,000 2,050,440
-------------
Virginia-0.6%
NR Broad Street Cmnty Dev Dist
Ser 03
7.50%, 6/01/33 1,200 1,212,000
-------------
Washington-0.5%
BBB Washington Tobacco Settlement Rev
Ser 02
6.50%, 6/01/26 1,100 1,081,883
-------------
Total Municipal Bonds
(cost $208,824,699) 221,032,859
-------------
Total Investments-100.4%
(cost $208,824,699) 221,032,859
Other assets less liabilities-(0.4%) (838,456)
-------------
Net Assets-100% $ 220,194,403
=============
FINANCIAL FUTURES CONTRACTS (see Note D)
Value at Unrealized
Number of Expiration Original March 31, Appreciation/
Type Contracts Position Month Value 2004 (Depreciation)
- ------------- ---------- --------- ----------- ---------- ---------- --------------
U.S. Treasury
Note June
2 Yr Futures 42 Short 2004 $9,002,280 $9,037,219 $(34,939)
U.S. Treasury
Note June
10 Yr Futures 64 Short 2004 7,433,760 7,386,000 47,760
--------
$ 12,821
========
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 49
New Jersey Portfolio-Portfolio of Investments
- -------------------------------------------------------------------------------
INTEREST RATE SWAP CONTRACTS (see Note D)
Rate Type
------------------------------
Notional Payment Payment Unrealized
Swap Amount Termination made by received by Appreciation/
Counterparty (000) Date the Portfolio the Portfolio (Depreciation)
- -------------- -------- ----------- -------------- -------------- -------------
JP Morgan $ 4,215 09/17/2004 BMA* 1.12% $ 2,169
JP Morgan $ 7,300 06/08/2005 1.25% BMA* 933
JP Morgan $ 6,750 11/18/2004 1.297% BMA* (10,048)
Merrill Lynch $ 5,000 01/29/2005 1.24% BMA* (9,750)
85.10% of
Merrill Lynch $11,700 02/03/2006 BMA* 1 Month LIBOR+ (7,254)
--------
$(23,950)
========
+ LIBOR (London Interbank Offered Rate)
* BMA (Bond Market Association)
See footnote summary on page 67.
See Glossary of Terms on page 67.
See notes to financial statements.
_______________________________________________________________________________
50 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Ohio Portfolio-Portfolio of Investments
- -------------------------------------------------------------------------------
OHIO PORTFOLIO
PORTFOLIO OF INVESTMENTS
March 31, 2004 (unaudited)
Standard Principal
& Poor's Amount
Ratings (000) Value
- -------------------------------------------------------------------------------
MUNICIPAL BONDS & NOTES-98.9%
Long-Term Municipal Bonds-92.7%
Ohio-81.0%
AAA Akron GO
MBIA Ser 02
5.00%, 12/01/23 $ 1,000 $ 1,051,570
AAA Akron Higher Ed Fac
(University of Akron) FGIC Ser 99
5.75%, 1/01/29 2,000 2,342,840
A+ Akron Stadium Rev
(Canal Park) Ser 96
6.90%, 12/01/16 5,000 5,506,300
Aaa Brookville School Dist GO
FSA Ser 03
5.00%, 12/01/26(a) 2,000 2,093,460
B- Cleveland Arpt Rev
(Continental Airlines) Ser 98 AMT
5.375%, 9/15/27 4,750 3,306,048
NR Cleveland Cuyahoga Port Auth
Ser 01
7.35%, 12/01/31 2,000 2,105,600
AAA Cleveland GO
MBIA Ser 02
5.25%, 12/01/27 4,380 4,674,555
AAA Cleveland Higher Ed
(State University) FGIC Ser 03A
5.00%, 6/01/33 1,600 1,664,272
AAA Cleveland School Dist
FGIC Ser 02
4.625%, 12/01/27 2,750 2,762,513
AAA Columbus School Dist
FGIC Ser 03
5.00%, 12/01/24 2,500 2,621,500
5.00%, 12/01/25 2,230 2,333,227
BBB Cuyahoga Cnty Hosp Rev
(UHHS) Ser 00
7.50%, 1/01/30 1,900 2,124,504
Aaa Cuyahoga Cnty MFHR
(Livingston Park Apts) GNMA Ser 02A
5.45%, 9/20/39(a) 1,500 1,548,255
Aaa Cuyahoga Cnty MFHR
(Longwood Proj) GNMA Ser 01 AMT
5.60%, 1/20/43(a) 3,620 3,765,922
Aaa Cuyahoga Cnty MFHR
(West Tech Apts Proj)
GNMA Ser 02A AMT
5.45%, 3/20/44(a) 1,075 1,101,305
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 51
Ohio Portfolio-Portfolio of Investments
- -------------------------------------------------------------------------------
Standard Principal
& Poor's Amount
Ratings (000) Value
- -------------------------------------------------------------------------------
AA Dayton Ohio Arpt Rev
(James M Cox Dayton Intl)
Radian Ser 03A
5.00%, 12/01/23 $ 1,280 $ 1,314,458
A- Dayton School Dist
(Administrative Fac Proj) Ser 03
6.00%, 12/01/19 1,395 1,561,619
6.00%, 12/01/21 1,645 1,827,069
AAA Dublin School Dist
FSA Ser 03
5.00%, 12/01/22 1,500 1,593,135
A Erie Cnty Hosp Rev
(Firelands Med Ctr) Ser 02A
5.625%, 8/15/32 5,000 5,227,200
AA Fairfield Cnty Hosp Facs Rev
(Fairfield Med Ctr Proj) RADIAN Ser 03
5.00%, 6/15/24 1,000 1,023,560
5.00%, 6/15/28 2,000 2,037,560
A Franklin Cnty
(Online Computer Library Ctr) Ser 98A
5.20%, 10/01/20 2,800 2,964,976
Aaa Franklin Cnty MFHR
(Agler Green) GNMA Ser 02A AMT
5.65%, 5/20/32(a) 770 805,597
5.80%, 5/20/44(a) 1,150 1,204,625
AAA Franklin Cnty MFHR
(Wellington Village Proj)
GNMA Ser 01A AMT
5.40%, 2/20/43 3,945 4,020,350
AAA Franklin Cnty Ohio Hosp Rev
(Ohio Health Corp) Ser 03C
5.00%, 5/15/28 2,500 2,588,700
BBB Hamilton Cnty Health Fac
(Twin Towers) Ser 99A
5.80%, 10/01/23 1,775 1,810,021
AAA Hamilton Cnty Ohio Convention Facs Auth
FGIC Ser 04
5.00%, 12/01/23 1,330 1,392,497
AAA Hamilton Cnty Sales Tax
AMBAC Ser 00B
5.25%, 12/01/32(e) 12,200 13,002,027
Aaa Lucas Cnty Health Fac
(Altenheim Proj) GNMA Ser 99
5.50%, 7/20/40(a) 3,200 3,364,320
Aaa Middletown Sch Dist
FGIC Ser 04
5.00%, 12/01/24(a) 1,210 1,266,543
5.00%, 12/01/25(a) 1,285 1,341,964
_______________________________________________________________________________
52 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Ohio Portfolio-Portfolio of Investments
- -------------------------------------------------------------------------------
Standard Principal
& Poor's Amount
Ratings (000) Value
- -------------------------------------------------------------------------------
BBB Ohio Air Quality Dev Auth PCR
(Columbus Southern Pwr) Ser 85B
6.25%, 12/01/20 $ 5,000 $ 5,060,650
BBB- Ohio Air Quality Dev Auth PCR
(Dayton Pwr & Lt) Ser 92B
6.40%, 8/15/27 2,000 2,018,520
AAA Ohio Air Quality Dev Auth PCR
(JMG) AMBAC Ser 94B AMT
6.375%, 4/01/29 10,000 10,434,599
BBB- Ohio Air Quality Dev Auth PCR
(Toledo Edison Co) Ser 97A AMT
6.10%, 8/01/27 5,000 5,204,100
AAA Ohio Capital Corp MFHR
(Rental Hsg) MBIA Ser 95E Pre Re
6.35%, 1/01/22 620 662,712
AAA Ohio Capital Corp MFHR
(Rental Hsg) MBIA Ser 95E Pre Re
6.35%, 1/01/22 1,345 1,400,602
BBB- Ohio Environmental Fac Rev
(Ford Motor Co) Ser 00 AMT
6.15%, 6/01/30 4,500 4,562,865
Aa2 Ohio Hsg Fin Agy MFHR
(Bridgeview Villa II) FHA AMT
6.45%, 12/01/33(a) 195 197,808
AAA Ohio Hsg Fin Agy MFHR
(Park Trails Apt) AMBAC Ser 01A AMT
5.50%, 12/01/34 1,670 1,724,342
Aaa Ohio Hsg Fin Agy SFMR
(Mortgage Rev) GNMA AMT
Ser 00A-1
6.35%, 9/01/31(a) 70 71,994
Ser 00D
6.05%, 3/01/31(a) 2,435 2,559,672
Ser 02
5.375%, 9/01/33(a) 4,080 4,155,847
Ser 02-A3
5.50%, 9/01/34(a) 3,270 3,412,409
Ser 02A-2
5.60%, 9/01/34(a) 1,945 2,001,152
AAA Ohio Hsg Fin Agy SFMR
(Mortgage Rev) GNMA AMT
Ser 94B-2
6.70%, 3/01/25 640 656,262
Ser 95A-2
6.625%, 3/01/26 865 891,140
A+ Ohio Sewer & Solid Waste Disp Facs
(Anheuser-Busch) Ser 01 AMT
5.50%, 11/01/35 3,000 3,103,020
AAA Ohio St Bldg Auth
(Adult Correctl Proj ) MBIA Ser 04A
5.00%, 4/01/22 3,975 4,228,923
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 53
Ohio Portfolio-Portfolio of Investments
- -------------------------------------------------------------------------------
Standard Principal
& Poor's Amount
Ratings (000) Value
- -------------------------------------------------------------------------------
AAA Ohio State Sch Dist
FGIC Ser 03A
7.397%, 3/15/15(b) $ 6,300 $ 7,689,402
A+ Ohio Wtr Dev Auth
(Anheuser-Busch) Ser 99 AMT
6.00%, 8/01/38 2,250 2,359,170
A+ Ohio Wtr Dev Auth
(North Star BHP Steel) Ser 95 AMT
6.45%, 9/01/20 3,425 3,594,058
BBB- Ohio Wtr Dev Auth PCR
(Cleveland Electric) Ser 97A AMT
6.10%, 8/01/20 2,000 2,043,440
AAA Princeton Sch Dist
MBIA Ser 03
5.00%, 12/01/24 1,600 1,681,200
A3 Steubenville Hosp Rev
(Trinity Hlth) Ser 00
6.50%, 10/01/30(a) 5,000 5,356,950
AAA Toledo Sch Dist
FGIC Ser 03 B
5.00%, 12/01/23 2,940 3,105,816
A- Toledo-Lucas Cnty Port Auth
(Crocker Park Proj) Ser 03
5.375%, 12/01/35(c) 5,000 5,031,900
Baa2 Toledo-Lucas Cnty Port Fac
(CSX Transportation) Ser 92
6.45%, 12/15/21(a) 1,270 1,436,230
AAA University of Cincinnati Higher Ed
AMBAC Ser 04D
5.00%, 6/01/24 1,685 1,774,052
5.00%, 6/01/25 1,000 1,050,330
5.00%, 6/01/26 1,145 1,200,716
-------------
176,017,973
-------------
California-0.5%
BBB California State GO
Ser 04
5.00%, 2/01/33 1,000 993,280
-------------
Florida-6.7%
NR Collier Cnty Cmnty Dev Dist
(Fiddlers Creek) Ser 96
7.50%, 5/01/18 1,810 1,925,894
NR Collier Cnty IDR
(Southern States Utils) Ser 96 AMT
6.50%, 10/01/25 1,500 1,521,600
NR Crossings at Fleming Island
Cmnty Dev Dist
(Eagle Harbor) Ser 00C
7.10%, 5/01/30 2,000 2,129,680
_______________________________________________________________________________
54 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Ohio Portfolio-Portfolio of Investments
- -------------------------------------------------------------------------------
Standard Principal
& Poor's Amount
Ratings (000) Value
- -------------------------------------------------------------------------------
NR Double Branch Cmnty Dev Dist
(Oakleaf Village) Ser 02A
6.70%, 5/01/34 $ 1,000 $ 1,062,540
NR Manatee Cnty Cmnty Dev Dist
(Heritage Harbor South) Ser 02B
5.40%, 11/01/08 1,070 1,092,952
NR Miromar Lakes Cmnty Dev Dist
Ser 00A
7.375%, 5/01/32 980 1,040,770
NR Northern Palm Beach Cnty
(ABACOA) Ser 96A
7.30%, 8/01/27 5,100 5,870,967
-------------
14,644,403
-------------
Guam-0.8%
AAA Guam Arpt Auth
MBIA Ser 03B
5.25%, 10/01/18 1,600 1,767,264
-------------
Illinois-0.5%
NR Antioch Village Spl Svc Area
(Deercrest Proj) Ser 03
6.625%, 3/01/33 1,000 1,002,230
-------------
Puerto Rico-2.3%
AAA Puerto Rico Tobacco Settlement Rev
(Childrens Trust Fund) Ser 00
6.00%, 7/01/26 4,000 4,760,640
BBB Puerto Rico Tobacco Settlement Rev
(Childrens Trust Fund) Ser 02
5.625%, 5/15/43 300 296,469
-------------
5,057,109
-------------
Rhode Island-0.9%
BBB Tobacco Settlement Rev
Ser 02A
6.125%, 6/01/32 2,000 1,866,920
-------------
Total Long-Term Municipal Bonds
(cost $191,983,779) 201,349,179
-------------
Short-Term Municipal Notes(d)-6.2%
Ohio-5.2%
VMIG-1 Franklin Cnty Ohio Hosp Rev
(US Hlth Corp) Ser 96A
1.02%, 12/01/21(a) 2,000 2,000,000
A-1+ Ohio Air Quality Dev Auth PCR
(Ohio Ed Co) Ser 88C
1.08%, 9/01/18 3,700 3,700,000
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 55
Ohio Portfolio-Portfolio of Investments
- -------------------------------------------------------------------------------
Standard Principal
& Poor's Amount
Ratings (000) Value
- -------------------------------------------------------------------------------
A-1+ Ohio St Solid Waste
(BP Amoco) Ser 00 AMT
1.15%, 8/01/34 $ 4,000 $ 4,000,000
A-1+ Paulding Cnty Solid Waste Disp Rev
(Lafarge Corp Proj) Ser 96 AMT
1.07%, 8/01/26 1,700 1,700,000
-------------
11,400,000
-------------
Minnesota-0.8%
A-1+ Montrose Indl Dev Rev
(Lyman Lumber Co Proj) AMT
1.22%, 5/01/26 1,750 1,750,000
-------------
New York-0.2%
VMIG-1 New York State Job Dev Auth
Ser 92A-1
1.12%, 3/01/07(a) 400 400,000
-------------
Total Short-term Municipal Notes
(cost $13,550,000) 13,550,000
-------------
Total Investments-98.9%
(cost $205,533,779) 214,899,179
Other assets less liabilities-1.1% 2,442,026
-------------
Net Assets-100% $ 217,341,205
=============
FINANCIAL FUTURES CONTRACTS (see Note D)
Value at
Number of Expiration Original March 31, Unrealized
Type Contracts Position Month Value 2004 Appreciation
- ------------- ---------- --------- ----------- ---------- ---------- --------------
U.S. Treasury
Note June
10 Yr Futures 10 Long 2004 $1,136,913 $1,154,063 $17,150
10 Yr June
Muni Index 21 Long 2004 2,182,423 2,190,563 8,140
-------
$25,290
=======
_______________________________________________________________________________
56 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Ohio Portfolio-Portfolio of Investments
- -------------------------------------------------------------------------------
INTEREST RATE SWAP CONTRACTS (see Note D)
Rate Type
------------------------------
Notional Payment Payment
Swap Amount Termination made by received by Unrealized
Counterparty (000) Date the Portfolio the Portfolio Depreciation
- -------------- -------- ----------- -------------- -------------- -------------
JP Morgan $ 6,300 11/18/2004 1.297% BMA* $ (9,378)
85.10% of
Merrill Lynch 11,100 02/03/2006 BMA* 1 month LIBOR+ (6,882)
--------
$(16,260)
========
+ LIBOR (London Interbank Offered Rate)
* BMA (Bond Market Association)
See footnote summary on page 67.
See Glossary of Terms on page 67.
See notes to financial statements.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 57
Pennsylvania Portfolio-Portfolio of Investments
- -------------------------------------------------------------------------------
PENNSYLVANIA PORTFOLIO
PORTFOLIO OF INVESTMENTS
March 31, 2004 (unaudited)
Standard Principal
& Poor's Amount
Ratings (000) Value
- -------------------------------------------------------------------------------
MUNICIPAL BONDS & NOTE-97.9%
Long-Term Municipal Bonds-96.8%
Pennsylvania-78.4%
AAA Allegheny Cnty Arpt Rev
MBIA Ser 97 AMT
5.75%, 1/01/10 $ 2,540 $ 2,831,871
Baa1 Allegheny Cnty Health Fac
(South Hills Hlth) Ser 00B
6.75%, 5/01/25(a) 2,555 2,621,149
A Allegheny Cnty Higher Ed
(Thiel College) ACA Ser 99A
5.375%, 11/15/19 1,000 1,050,210
5.375%, 11/15/29 1,500 1,557,765
BBB- Allegheny Cnty Hlth Rev
(Residential Resources) Ser 01
6.60%, 9/01/31(c) 6,000 6,165,420
Aaa Allegheny Cnty MFHR
(Green Meadow Apts)
GNMA Ser 98-A-1 AMT
5.125%, 10/20/40(a) 8,440 8,521,699
BBB+ Allegheny Cnty PCR
(USX Corp.) Ser 98
5.50%, 12/01/29 3,180 3,240,007
BBB Bradford Cnty IDR
(Int'l Paper) Ser 95A AMT
6.60%, 3/01/19 2,500 2,610,625
AAA Butler Cnty
FGIC Ser 03
5.25%, 7/15/26 1,625 1,869,384
BBB- Crawford Cnty Hlth Fac
(Wesbury Methodist) Ser 99
6.25%, 8/15/29(c) 3,100 3,128,799
BBB+ Cumberland Cnty Hlth Fac
(Presbyterian Homes) Ser 96
6.00%, 12/01/26 2,000 2,018,320
BBB- Delaware Cnty Higher Ed
(Eastern College) Ser 99
5.625%, 10/01/28 2,500 2,512,275
NR Harrisburg Arpt Auth
(Susquehanna Arpt Proj) Ser 99 AMT
5.50%, 1/01/24 3,490 2,788,615
BBB Indiana Cnty PCR
(PSE&G Power) Ser 01 AMT
5.85%, 6/01/27 2,470 2,522,883
AAA Lancaster Swr Auth Rev
MBIA Ser 04
5.00%, 4/01/22 1,330 1,409,388
_______________________________________________________________________________
58 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Pennsylvania Portfolio-Portfolio of Investments
- -------------------------------------------------------------------------------
Standard Principal
& Poor's Amount
Ratings (000) Value
- -------------------------------------------------------------------------------
Aaa Lehigh Northampton Airport Rev
MBIA Ser 00 AMT
6.00%, 5/15/30(a) $ 4,400 $ 4,974,464
Aaa Lycoming Cnty Higher Ed
(College of Technology) AMBAC Ser 02
5.25%, 5/01/32(a) 4,250 4,490,125
AA Montgomery Cnty Higher Ed
(Beaver College) RADIAN Ser 99
5.70%, 4/01/27 6,000 6,343,200
A Montgomery Cnty Hospital Rev
(Abington Memorial Hosp) Ser 02A
5.125%, 6/01/32 3,000 3,035,880
BB- New Morgan Solid Waste Disp Rev
(Browning-Ferris) Ser 94 AMT
6.50%, 4/01/19 1,000 962,990
A Pennsylvania Eco Dev Auth
(30th St Station) ACA Ser 02 AMT
5.875%, 6/01/33 3,485 3,623,877
BBB- Pennsylvania Eco Dev Auth
(Amtrak) Ser 01A AMT
6.375%, 11/01/41 5,000 5,140,800
AA Pennsylvania Higher Ed
(Dickinson College) RADIAN Ser 03AA-1
5.00%, 11/01/26 1,500 1,528,515
A+ Pennsylvania Higher Ed
(UPMC Health Sys) Ser 01A
6.00%, 1/15/31 2,405 2,575,996
AA+ Pennsylvania Hsg Fin Agy SFMR
(Mortgage Rev) AMT
Ser 02-74B
5.25%, 4/01/32 3,250 3,300,830
Ser 99-67A
5.90%, 10/01/30 12,875 13,324,853
Aaa Pennsylvania Hsg Fin Agy SFMR
(Mortgage Rev) FSA Ser 03 AMT
1.54%, 6/01/08(a)(d) 9,000 9,000,000
AAA Philadelphia Airport Sys
AMBAC Ser 95A AMT
6.10%, 6/15/25 10,000 10,693,900
AAA Philadelphia GO
Ser 01
5.00%, 9/15/31 1,500 1,539,765
AAA Philadelphia IDR
FSA Ser 03
21.36%, 10/01/30(b) 1,600 1,910,880
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 59
Pennsylvania Portfolio-Portfolio of Investments
- -------------------------------------------------------------------------------
Standard Principal
& Poor's Amount
Ratings (000) Value
- -------------------------------------------------------------------------------
AAA Pittsburgh Urban Redev Auth SFMR
(Mortgage Rev) FHA AMT
Ser 97A
6.25%, 10/01/28 $ 790 $ 821,782
Ser 00A
6.40%, 10/01/31 3,085 3,519,892
AA Potter Cnty Hosp Rev
(Charles Cole Memorial) RADIAN Ser 96
6.05%, 8/01/24 4,340 4,672,704
AAA South Central Hosp Rev
(Wellspan Health) MBIA Ser 01
5.25%, 5/15/31 4,700 4,953,424
AAA Philadelphia Sch Dist Lease Rev
FSA Ser 03
5.25%, 6/01/26 5,000 5,317,150
BBB Warren Cnty Hosp Auth Rev
(Warren General) Ser 94B
7.00%, 4/01/19 2,200 2,254,780
AAA Washington Cnty
(Capital Funding) AMBAC Ser 99
6.15%, 12/01/29 7,000 8,467,620
-------------
147,301,837
-------------
California-1.0%
BBB California State GO
Ser 04
5.00%, 2/01/33 2,000 1,986,560
-------------
Florida-7.2%
NR Collier Cnty Cmnty Fac Dist
(Fiddlers Creek) Ser 96
7.50%, 5/01/18 1,535 1,633,286
NR Collier Cnty IDR
(Southern States Utils) Ser 96 AMT
6.50%, 10/01/25 6,500 6,593,600
NR Crossings at Fleming Island Cmnty Dev Dist
(Eagle Harbor) Ser 00C
7.10%, 5/01/30 2,000 2,129,680
NR Double Branch Cmnty Dev Dist
(Oakleaf Village) Ser 02A
6.70%, 5/01/34 1,050 1,115,667
NR Miromar Lakes Cmnty Dev Dist
Ser 00A
7.375%, 5/01/32 995 1,056,700
NR Northern Palm Beach Cnty Impt Dist
(No 27B) Ser 02
6.40%, 8/01/32 990 1,017,492
-------------
13,546,425
-------------
_______________________________________________________________________________
60 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Pennsylvania Portfolio-Portfolio of Investments
- -------------------------------------------------------------------------------
Standard Principal
& Poor's Amount
Ratings (000) Value
- -------------------------------------------------------------------------------
Guam-1.0%
AAA Guam Intl Arpt Auth
MBIA Ser 03B
5.25%, 10/01/19 $ 1,235 $ 1,358,969
5.25%, 10/01/23 500 539,115
-------------
1,898,084
-------------
Illinois-1.1%
NR Antioch Village Spl Svc Area
(Deercrest Proj) Ser 03
6.625%, 3/01/33 1,000 1,002,230
NR Yorkville Spl Svc Area
(Raintree Village Project) Ser 03
6.875%, 3/01/33 1,000 1,033,230
-------------
2,035,460
-------------
Puerto Rico-6.0%
AAA Puerto Rico Comwlth
Hwy & Transn Auth Rev FGIC Ser 03
7.865%, 7/01/14(b) 3,265 4,193,501
AAA Puerto Rico Comwlth
Hwy & Transn Auth Rev
FSA Ser 02D
5.00%, 7/01/27 5,000 5,254,500
BBB Puerto Rico Tobacco Settlement Rev
(Childrens Trust Fund) Ser 02
5.625%, 5/15/43 1,800 1,778,814
-------------
11,226,815
-------------
Rhode Island-1.0%
BBB Rhode Island Tobacco Settlement Rev
Ser 02A
6.125%, 6/01/32 2,000 1,866,920
-------------
Virgin Islands-1.1%
A Virgin Islands Pub Fin Auth Rev
ACA Ser 03
5.00%, 10/01/31 1,250 1,279,725
AAA Virgin Islands Pub Fin Auth Rev
FSA Ser 03A
19.25%, 10/01/13 85 138,652
FSA Ser 03B
20.25%, 10/01/14 50 81,515
FSA Ser 03C
21.51%, 10/01/15 70 120,126
FSA Ser 03D
21.51%, 10/01/16 180 307,294
FSA Ser 03E
21.51%, 10/01/17 115 189,520
-------------
2,116,832
-------------
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 61
Pennsylvania Portfolio-Portfolio of Investments
- -------------------------------------------------------------------------------
Standard Principal
& Poor's Amount
Ratings (000) Value
- -------------------------------------------------------------------------------
Total Long-Term Municipal Bonds
(cost $170,685,396) $ 181,978,933
-------------
Short-Term Municipal Note(d)-1.1%
New York-1.1%
A-1+ New York City Transitional Fin Auth
(NYC Recovery) Ser 3 Sub Ser 3B
1.15%, 11/01/22 $ 2,000 2,000,000
-------------
Total Short-Term Municipal Note
(cost $2,000,000) 2,000,000
-------------
Total Investments-97.9%
(cost $172,685,396) 183,978,933
Other assets less liabilities-2.1% 3,981,544
-------------
Net Assets-100% $ 187,960,477
=============
INTEREST RATE SWAP CONTRACTS (see Note D)
Rate Type
------------------------------
Notional Payment Payment
Swap Amount Termination made by received by Unrealized
Counterparty (000) Date the Portfolio the Portfolio Depreciation
- -------------- -------- ----------- -------------- -------------- -------------
JP Morgan $3,265 11/18/2004 1.297% BMA* $ (4,860)
85.10% of
Merrill Lynch 9,900 02/03/2006 BMA* 1 month LIBOR+ (6,138)
--------
$(10,998)
========
+ LIBOR (London Interbank Offered Rate)
* BMA (Bond Market Association)
See footnote summary on page 67.
See Glossary of Terms on page 67.
See notes to financial statements.
_______________________________________________________________________________
62 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Virginia Portfolio-Portfolio of Investments
- -------------------------------------------------------------------------------
VIRGINIA PORTFOLIO
PORTFOLIO OF INVESTMENTS
March 31, 2004 (unaudited)
Standard Principal
& Poor's Amount
Ratings (000) Value
- -------------------------------------------------------------------------------
MUNICIPAL BONDS-94.7%
Long-Term Municipal Bonds-94.7%
Virginia-85.7%
NR Albemarle Cnty Ed Fac
(The Convent School) Ser 01A
7.50%, 7/15/23 $ 1,435 $ 1,522,377
7.75%, 7/15/32 8,260 8,788,227
AA- Alexandria MFHR
(Buckingham Village Apts) Ser 96A AMT
6.15%, 1/01/29 4,000 4,120,400
AAA Arlington County GO
Ser 03
8.67%, 1/15/14(b) 4,700 5,832,700
A2 Arlington Cnty Hosp Rev
(Arlington Health Sys) Ser 01
5.25%, 7/01/31(a) 7,000 7,190,260
AAA Arlington Cnty IDR Sewer Rev
(Ogden Martin) FSA Ser 98B AMT
5.25%, 1/01/09 2,295 2,571,846
AAA Arlington Cnty MFHR
(Arlington View Terrace)
FNMA Ser 01 AMT
5.15%, 11/01/31 1,550 1,604,420
NR Bell Creek Cmnty Dev Dist
Ser 03A
6.75%, 3/01/22 900 925,434
NR Broad Street Cmnty Dev Dist
(Parking Fac) Ser 03
7.50%, 6/01/33 1,500 1,515,000
NR Celebrate VA North Cmnty Dev Dist
Ser 03B
6.60%, 3/01/25 1,250 1,269,475
BBB+ Chesterfield Cnty
(VA Elec & Pwr Co) Ser 02
5.875%, 6/01/17 3,800 4,227,804
NR Dulles Town Cmnty Dev Auth
(Dulles Town Ctr Proj) Ser 98
6.25%, 3/01/26 2,065 2,113,879
AAA Fairfax Water Auth Rev
Ser 02
5.00%, 4/01/32 3,380 3,515,335
A- Greater Richmond Hotel Tax Rev
(Convention Ctr Proj) Ser 00
6.25%, 6/15/32 6,000 6,798,420
AAA Hampton Convention Ctr Rev
AMBAC Ser 02
5.00%, 1/15/35 5,150 5,349,820
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 63
Virginia Portfolio-Portfolio of Investments
- -------------------------------------------------------------------------------
Standard Principal
& Poor's Amount
Ratings (000) Value
- -------------------------------------------------------------------------------
AAA Harrisonburg MFHR
(Battery Heights Assoc) GNMA Ser 96A
6.25%, 4/20/36 $ 5,185 $ 5,419,414
AAA Harrisonburg MFHR
(Greens of Salem Run) FSA Ser 97 AMT
6.30%, 4/01/29 4,160 4,398,035
BB- Henrico Cnty Solid Waste Rev
(Browning-Ferris) Ser 97A AMT
5.875%, 3/01/17 1,000 937,600
A2 Henry Cnty Hosp Rev
(Memorial Hosp Martinsville & Henry)
Ser 97
6.00%, 1/01/27(a) 1,250 1,402,988
BBB Isle Wight Cnty IDR
(International Paper Co) Ser 00A AMT
6.60%, 5/01/24 1,700 1,854,394
BBB Isle Wight Cnty Solid Waste Rev
(Union Camp Corp) Ser 94 AMT
6.55%, 4/01/24 4,000 4,098,800
A+ James City Cnty Solid Waste Rev
(Anheuser Busch Proj) Ser 97 AMT
6.00%, 4/01/32 4,200 4,363,338
AAA Loudoun Cnty Hosp Rev
(Loudoun Hosp Ctr) FSA Ser 95
5.80%, 6/01/20 2,500 2,668,775
AA- Metropolitan Washington Arpt Rev
Ser 97B AMT
5.50%, 10/01/23 9,410 9,847,095
AAA Newport News Hlth Care Fac
(Mennowood) GNMA Ser 96A
6.25%, 8/01/36 2,600 2,749,188
AAA Newport News MFHR
(Walker Village Proj) GNMA Ser 02A AMT
5.55%, 9/20/34 1,880 1,949,259
5.65%, 3/20/44 1,660 1,720,889
Baa3 Norfolk Arpt Auth Rev
(Air Cargo) Ser 02 AMT
6.25%, 1/01/30(a) 1,000 1,023,520
AAA Norfolk Arpt Auth Rev
FGIC Ser 01B AMT
5.30%, 7/01/25 10,000 10,482,600
AAA Portsmouth Util Rev
FGIC Ser 01B
5.00%, 6/01/26 1,500 1,536,615
AAA Prince William MFHR
(Woodwind Gables)
AMBAC Ser 01A AMT
5.30%, 12/01/34 2,860 2,957,926
NR Staunton Ed Fac
(Mary Baldwin College) Ser 96
6.75%, 11/01/21 3,645 3,817,080
_______________________________________________________________________________
64 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Virginia Portfolio-Portfolio of Investments
- -------------------------------------------------------------------------------
Standard Principal
& Poor's Amount
Ratings (000) Value
- -------------------------------------------------------------------------------
AAA Virginia Beach MFHR
(Beth Sholom Terrace) GNMA Ser 02
5.40%, 4/01/44 $ 3,000 $ 3,102,960
AA+ Virginia Biotechnology Auth
(Consolidated Laboratories Proj) Ser 01
5.00%, 9/01/21 4,170 4,404,729
AA+ Virginia Hsg Dev Auth MFHR
(Rental Hsg)
Ser 99 AMT
5.95%, 2/01/23 5,525 5,809,648
Ser 02B AMT
5.50%, 4/01/27 5,000 5,178,700
AA+ Virginia Hsg Dev Auth SFMR
(Mortgage Rev) Ser 01D AMT
5.40%, 6/01/24 3,155 3,262,491
AA+ Virginia Port Auth Rev
(Newport News) Ser 02 AMT
5.00%, 7/01/27 1,000 1,028,180
5.125%, 7/01/24 4,000 4,183,880
AA Virginia Sewer Rev
(Hopwell Wastewtr Fac) Ser 95A AMT
6.00%, 10/01/25(e) 1,375 1,453,031
-------------
146,996,532
-------------
California-0.6%
BBB California State GO
5.00%, 2/01/33 1,000 993,280
-------------
Florida-1.9%
NR Fleming Island Plantation Cmnty Dev Dist
Ser 00B
7.375%, 5/01/31 3,000 3,256,770
-------------
Guam-0.7%
AAA Guam Arpt Auth
MBIA Ser 03B
5.25%, 10/01/18 620 684,815
5.25%, 10/01/22 470 509,057
-------------
1,193,872
-------------
Illinois-0.6%
NR Yorkville Cmnty Fac Dist
(Raintree Village Project) Ser 03
6.875%, 3/01/33 1,000 1,033,230
-------------
New Jersey-2.1%
B New Jersey Eco Dev Auth
(Continental Airlines) Ser 00 AMT
7.20%, 11/15/30 4,100 3,654,371
-------------
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 65
Virginia Portfolio-Portfolio of Investments
- -------------------------------------------------------------------------------
Standard Principal
& Poor's Amount
Ratings (000) Value
- -------------------------------------------------------------------------------
Puerto Rico-3.1%
AAA Puerto Rico Comwlth Hwy & Transn Auth
FGIC Ser 03
7.865%, 7/01/14(b) $ 1,800 $ 2,311,884
AAA Puerto Rico Elec Pwr Auth
XLCA Ser 02-1
5.25%, 7/01/22 1,100 1,193,885
BBB Puerto Rico Tobacco Settlement Rev
(Childrens Trust Fund) Ser 02
5.625%, 5/15/43 1,800 1,778,814
-------------
5,284,583
-------------
Total Municipal Bonds
(cost $153,573,273) 162,412,638
-------------
Total Investments-94.7%
(cost $153,573,273) 162,412,638
Other assets less liabilities-5.3% 9,032,013
-------------
Net Assets-100% $ 171,444,651
=============
FINANCIAL FUTURES CONTRACTS (see Note D)
Value at
Number of Expiration Original March 31, Unrealized
Type Contracts Position Month Value 2004 Appreciation
- ------------- ---------- --------- ----------- ---------- ---------- --------------
U.S. Treasury
Note June
10 Yr Futures 9 Long 2004 $1,037,706 $1,038,656 $ 950
10 Yr Muni June
Index 12 Long 2004 1,248,545 1,251,750 3,205
-------
$ 4,155
=======
INTEREST RATE SWAP CONTRACTS (see Note D)
Rate Type
------------------------------
Notional Payment Payment
Swap Amount Termination made by received by Unrealized
Counterparty (000) Date the Portfolio the Portfolio Depreciation
- -------------- -------- ----------- -------------- -------------- -------------
JP Morgan $ 6,500 11/18/04 1.297% BMA* $ (9,675)
85.10% of
Merrill Lynch 9,400 2/03/06 BMA* 1 month LIBOR+ (5,828)
--------
$(15,503)
========
+ LIBOR (London Interbank Offered Rate)
* BMA (Bond Market Association)
See footnote summary on page 67.
See Glossary of Terms on page 67.
See notes to financial statements.
_______________________________________________________________________________
66 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Portfolio of Investments
- -------------------------------------------------------------------------------
(a) Moody's rating.
(b) Inverse floater - security with variable or floating interest rate that
moves in opposite direction of short-term interest rates.
(c) Fitch's rating.
(d) Variable rate coupon, rate shown as of March 31, 2004.
(e) Position segregated to collateralize margin requirements for open futures
contracts sold, as follows: Florida Portfolio, $5,211; Massachusetts Portfolio,
$74,227; Minnesota Portfolio, $15,298; New Jersey Portfolio, $210,125; Ohio
Portfolio, $79,930; Virginia Portfolio, $47,554.
Glossary of Terms:
ACA American Capital Access
AMBAC American Municipal Bond Assurance Company
AMT Alternative Minimum Tax
CDD Community Development District
CONNIE LEE Connie Lee Insurance Company
COP Certificate of Participation
ETM Escrow to Maturity
FGIC Financial Guaranty Insurance Company
FHA Federal Housing Authority
FHLMC Federal Home Loan Mortgage Corporation
FNMA Federal National Mortgage Association
FSA Financial Security Assurance, Inc.
GNMA Government National Mortgage Association
GO General Obligation
IDA Industrial Development Authority
IDB Industrial Development Bond
IDR Industrial Development Revenue
MBIA Municipal Bond Investors Assurance
MFHR Multi-Family Housing Revenue
NR Rating not applied for
PCR Pollution Control Revenue
RADIAN Radian Group, Inc.
SFMR Single Family Mortgage Revenue
SWDR Solid Waste Disposal Revenue
XLCA XL Capital Assurance, Inc.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 67
Statement of Assets & Liabilities
- -------------------------------------------------------------------------------
STATEMENT OF ASSETS & LIABILITIES
March 31, 2004 (unaudited)
Arizona
=============
ASSETS
Investments in securities, at value (cost: $202,786,041) $ 211,075,191
Cash 162,421
Interest receivable 3,237,084
Receivable for investment securities sold 365,000
Receivable for shares of beneficial interest sold 350,405
-------------
Total assets 215,190,101
-------------
LIABILITIES
Payable for shares of beneficial interest redeemed 551,617
Dividends payable 253,157
Distribution fee payable 120,350
Advisory fee payable 49,428
Adminstrative fee payable 49,204
Unrealized depreciation on interest rate swap contracts 12,866
Accrued expenses and other liabilities 87,232
-------------
Total liabilities 1,123,854
-------------
Net Assets $ 214,066,247
=============
COMPOSITION OF NET ASSETS
Shares of beneficial interest, at par $ 195,613
Additional paid-in capital 208,464,006
Distributions in excess of net investment income (252,364)
Accumulated net realized loss on investment transactions (2,617,293)
Net unrealized appreciation of investments 8,276,285
-------------
$ 214,066,247
=============
Class A Shares
Net assets $ 104,944,492
-------------
Shares of beneficial interest outstanding 9,582,408
-------------
Class B Shares
Net assets $ 86,312,305
-------------
Shares of beneficial interest outstanding 7,893,176
-------------
Class C Shares
Net assets $ 22,809,450
-------------
Shares of beneficial interest outstanding 2,085,728
-------------
CALCULATION OF MAXIMUM OFFERING PRICE
Class A Shares
Net asset value and redemption price per share $10.95
Sales charge-4.25% of public offering price .49
------
Maximum offering price $11.44
======
Class B Shares
Net asset value and offering price per share $10.94
======
Class C Shares
Net asset value and offering price per share $10.94
======
See notes to financial statements.
_______________________________________________________________________________
68 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Statement of Assets & Liabilities
- -------------------------------------------------------------------------------
Florida
=============
ASSETS
Investments in securities, at value (cost: $241,095,158) $ 254,083,750
Interest receivable 5,063,249
Receivable for shares of beneficial interest sold 555,126
Receivable for variation margin on futures contracts 17,226
-------------
Total assets 259,719,351
-------------
LIABILITIES
Due to custodian 146,492
Payable for investment securities purchased 12,734,711
Dividends payable 297,702
Payable for shares of beneficial interest redeemed 150,091
Distribution fee payable 147,895
Advisory fee payable 63,739
Adminstrative fee payable 47,080
Unrealized depreciation on interest rate swap contracts 7,998
Accrued expenses and other liabilities 96,672
-------------
Total liabilities 13,692,380
-------------
Net Assets $ 246,026,971
=============
COMPOSITION OF NET ASSETS
Shares of beneficial interest, at par $ 238,364
Additional paid-in capital 243,292,617
Distributions in excess of net investment income (438,445)
Accumulated net realized loss on investment transactions (10,055,355)
Net unrealized appreciation of investments 12,989,790
-------------
$ 246,026,971
=============
Class A Shares
Net assets $ 105,934,335
-------------
Shares of beneficial interest outstanding 10,267,532
-------------
Class B Shares
Net assets $ 96,698,925
-------------
Shares of beneficial interest outstanding 9,366,020
-------------
Class C Shares
Net assets $ 43,393,711
-------------
Shares of beneficial interest outstanding 4,202,814
-------------
CALCULATION OF MAXIMUM OFFERING PRICE
Class A Shares
Net asset value and redemption price per share $10.32
Sales charge-4.25% of public offering price .46
------
Maximum offering price $10.78
======
Class B Shares
Net asset value and offering price per share $10.32
======
Class C Shares
Net asset value and offering price per share $10.32
======
See notes to financial statements.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 69
Statement of Assets & Liabilities
- -------------------------------------------------------------------------------
Massachusetts
=============
ASSETS
Investments in securities, at value (cost: $145,441,247) $ 154,884,708
Interest receivable 2,435,157
Receivable for investment securities sold 980,000
Receivable for shares of beneficial interest sold 206,806
-------------
Total assets 158,506,671
-------------
LIABILITIES
Due to custodian 839,910
Payable for investment securities purchased 5,679,010
Payable for shares of beneficial interest redeemed 195,936
Dividends payable 178,147
Distribution fee payable 105,635
Adminstrative fee payable 47,684
Advisory fee payable 32,529
Unrealized depreciation on interest rate swap contracts 18,932
Payable for variation margin on futures contracts 4,750
Accrued expenses and other liabilities 105,204
-------------
Total liabilities 7,207,737
-------------
Net Assets $ 151,298,934
=============
COMPOSITION OF NET ASSETS
Shares of beneficial interest, at par $ 138,528
Additional paid-in capital 153,756,910
Distributions in excess of net investment income (301,801)
Accumulated net realized loss on investment transactions (11,695,314)
Net unrealized appreciation of investments 9,400,611
-------------
$ 151,298,934
=============
Class A Shares
Net assets $ 40,288,306
-------------
Shares of beneficial interest outstanding 3,683,930
-------------
Class B Shares
Net assets $ 72,392,529
-------------
Shares of beneficial interest outstanding 6,631,337
-------------
Class C Shares
Net assets $ 38,618,099
-------------
Shares of beneficial interest outstanding 3,537,544
-------------
CALCULATION OF MAXIMUM OFFERING PRICE
Class A Shares
Net asset value and redemption price per share $10.94
Sales charge-4.25% of public offering price .49
------
Maximum offering price $11.43
======
Class B Shares
Net asset value and offering price per share $10.92
======
Class C Shares
Net asset value and offering price per share $10.92
======
See notes to financial statements.
_______________________________________________________________________________
70 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Statement of Assets & Liabilities
- -------------------------------------------------------------------------------
Michigan
=============
ASSETS
Investments in securities, at value (cost: $140,618,199) $ 147,294,580
Cash 423,292
Interest receivable 2,663,711
Receivable for shares of beneficial interest sold 105,530
-------------
Total assets 150,487,113
-------------
LIABILITIES
Payable for shares of beneficial interest redeemed 281,653
Dividends payable 166,626
Distribution fee payable 101,885
Advisory fee payable 58,152
Unrealized depreciation on interest rate swap contracts 18,677
Accrued expenses and other liabilities 93,502
-------------
Total liabilities 720,495
-------------
Net Assets $ 149,766,618
=============
COMPOSITION OF NET ASSETS
Shares of beneficial interest, at par $ 138,087
Additional paid-in capital 143,494,631
Distributions in excess of net investment income (283,907)
Accumulated net realized loss on investment transactions (239,897)
Net unrealized appreciation of investments 6,657,704
-------------
$ 149,766,618
=============
Class A Shares
Net assets $ 45,135,961
-------------
Shares of beneficial interest outstanding 4,157,160
-------------
Class B Shares
Net assets $ 55,410,389
-------------
Shares of beneficial interest outstanding 5,111,079
-------------
Class C Shares
Net assets $ 49,220,268
-------------
Shares of beneficial interest outstanding 4,540,452
-------------
CALCULATION OF MAXIMUM OFFERING PRICE
Class A Shares
Net asset value and redemption price per share $10.86
Sales charge-4.25% of public offering price .48
------
Maximum offering price $11.34
======
Class B Shares
Net asset value and offering price per share $10.84
======
Class C Shares
Net asset value and offering price per share $10.84
======
See notes to financial statements.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 71
Statement of Assets & Liabilities
- -------------------------------------------------------------------------------
Minnesota
=============
ASSETS
Investments in securities, at value (cost: $106,702,284) $ 111,862,456
Cash 420,081
Interest receivable 1,471,294
Receivable for shares of beneficial interest sold 110,997
Receivable for variation margin on futures contracts 5,580
-------------
Total assets 113,870,408
-------------
LIABILITIES
Payable for investment securities purchased 3,620,357
Dividends payable 127,804
Payable for shares of beneficial interest redeemed 107,161
Distribution fee payable 52,546
Advisory fee payable 31,058
Unrealized depreciation on interest rate swap contracts 8,034
Accrued expenses and other liabilities 94,488
-------------
Total liabilities 4,041,448
-------------
Net Assets $ 109,828,960
=============
COMPOSITION OF NET ASSETS
Shares of beneficial interest, at par $ 106,937
Additional paid-in capital 106,660,615
Distributions in excess of net investment income (240,422)
Accumulated net realized loss on investment transactions (1,848,365)
Net unrealized appreciation of investments 5,150,195
-------------
$ 109,828,960
=============
Class A Shares
Net assets $ 69,002,646
-------------
Shares of beneficial interest outstanding 6,718,972
-------------
Class B Shares
Net assets $ 22,131,503
-------------
Shares of beneficial interest outstanding 2,155,784
-------------
Class C Shares
Net assets $ 18,694,811
-------------
Shares of beneficial interest outstanding 1,818,989
-------------
CALCULATION OF MAXIMUM OFFERING PRICE
Class A Shares
Net asset value and redemption price per share $10.27
Sales charge-4.25% of public offering price .46
------
Maximum offering price $10.73
======
Class B Shares
Net asset value and offering price per share $10.27
======
Class C Shares
Net asset value and offering price per share $10.28
======
See notes to financial statements.
_______________________________________________________________________________
72 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Statement of Assets & Liabilities
- -------------------------------------------------------------------------------
New Jersey
=============
ASSETS
Investments in securities, at value (cost: $208,824,699) $ 221,032,859
Interest receivable 3,853,561
Receivable for shares of beneficial interest sold 339,811
Receivable for investment securities sold 935,000
-------------
Total assets 226,161,231
-------------
LIABILITIES
Due to custodian 416,430
Payable for investment securities purchased 4,433,969
Dividends payable 253,922
Payable for shares of beneficial interest redeemed 435,399
Distribution fee payable 142,985
Advisory fee payable 62,210
Unrealized depreciation on interest rate swap contracts 23,950
Adminstrative fee payable 46,468
Payable for variation margin on futures contracts 39,218
Accrued expenses and other liabilities 112,277
-------------
Total liabilities 5,966,828
-------------
Net Assets $ 220,194,403
=============
COMPOSITION OF NET ASSETS
Shares of beneficial interest, at par $ 221,243
Additional paid-in capital 223,388,125
Distributions in excess of net investment income (393,872)
Accumulated net realized loss on investment transactions (15,218,124)
Net unrealized appreciation of investments 12,197,031
-------------
$ 220,194,403
=============
Class A Shares
Net assets $ 76,888,320
-------------
Shares of beneficial interest outstanding 7,727,848
-------------
Class B Shares
Net assets $ 100,594,099
-------------
Shares of beneficial interest outstanding 10,106,811
-------------
Class C Shares
Net assets $ 42,711,984
-------------
Shares of beneficial interest outstanding 4,289,633
-------------
CALCULATION OF MAXIMUM OFFERING PRICE
Class A Shares
Net asset value and redemption price per share $ 9.95
Sales charge-4.25% of public offering price .44
------
Maximum offering price $10.39
======
Class B Shares
Net asset value and offering price per share $ 9.95
======
Class C Shares
Net asset value and offering price per share $ 9.96
======
See notes to financial statements.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 73
Statement of Assets & Liabilities
- -------------------------------------------------------------------------------
Ohio
=============
ASSETS
Investments in securities, at value (cost: $205,533,779) $ 214,899,179
Interest receivable 2,986,954
Receivable for shares of beneficial interest sold 659,217
Receivable for variation margin on futures contracts 17,185
-------------
Total assets 218,562,535
-------------
LIABILITIES
Due to custodian 12,831
Payable for shares of beneficial interest redeemed 594,975
Dividends payable 247,755
Distribution fee payable 135,465
Advisory fee payable 58,991
Adminstrative fee payable 47,250
Unrealized depreciation on interest rate swap contracts 16,260
Accrued expenses and other liabilities 107,803
-------------
Total liabilities 1,221,330
-------------
Net Assets $ 217,341,205
=============
COMPOSITION OF NET ASSETS
Shares of beneficial interest, at par $ 214,199
Additional paid-in capital 216,200,795
Distributions in excess of net investment income (464,751)
Accumulated net realized loss on investment transactions (7,983,468)
Net unrealized appreciation of investments 9,374,430
-------------
$ 217,341,205
=============
Class A Shares
Net assets $ 83,458,294
-------------
Shares of beneficial interest outstanding 8,222,083
-------------
Class B Shares
Net assets $ 80,620,806
-------------
Shares of beneficial interest outstanding 7,948,357
-------------
Class C Shares
Net assets $ 53,262,105
-------------
Shares of beneficial interest outstanding 5,249,476
-------------
CALCULATION OF MAXIMUM OFFERING PRICE
Class A Shares
Net asset value and redemption price per share $10.15
Sales charge-4.25% of public offering price .45
------
Maximum offering price $10.60
======
Class B Shares
Net asset value and offering price per share $10.14
======
Class C Shares
Net asset value and offering price per share $10.15
======
See notes to financial statements.
_______________________________________________________________________________
74 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Statement of Assets & Liabilities
- -------------------------------------------------------------------------------
Pennsylvania
=============
ASSETS
Investments in securities, at value (cost: $172,685,396) $ 183,978,933
Cash 2,166,555
Interest receivable 3,517,662
Receivable for shares of beneficial interest sold 1,020,767
Receivable for investment securities sold 520,000
-------------
Total assets 191,203,917
-------------
LIABILITIES
Payable for securities purchased 2,007,757
Payable for shares of beneficial interest redeemed 676,380
Dividends payable 208,184
Distribution fee payable 111,417
Advisory fee payable 68,551
Adminstrative fee payable 46,513
Unrealized depreciation on interest rate swap contracts 10,998
Accrued expenses and other liabilities 113,640
-------------
Total liabilities 3,243,440
-------------
Net Assets $ 187,960,477
=============
COMPOSITION OF NET ASSETS
Shares of beneficial interest, at par $ 177,534
Additional paid-in capital 181,939,730
Distributions in excess of net investment income (440,611)
Accumulated net realized loss on investment transactions (4,998,715)
Net unrealized appreciation of investments 11,282,539
-------------
$ 187,960,477
=============
Class A Shares
Net assets $ 82,155,152
-------------
Shares of beneficial interest outstanding 7,759,964
-------------
Class B Shares
Net assets $ 64,534,414
-------------
Shares of beneficial interest outstanding 6,095,424
-------------
Class C Shares
Net assets $ 41,270,911
-------------
Shares of beneficial interest outstanding 3,898,024
-------------
CALCULATION OF MAXIMUM OFFERING PRICE
Class A Shares
Net asset value and redemption price per share $10.59
Sales charge-4.25% of public offering price .47
------
Maximum offering price $11.06
======
Class B Shares
Net asset value and offering price per share $10.59
======
Class C Shares
Net asset value and offering price per share $10.59
======
See notes to financial statements.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 75
Statement of Assets & Liabilities
- -------------------------------------------------------------------------------
Virginia
=============
ASSETS
Investment in securities, at value
(cost: $153,573,273) $ 162,412,638
Receivable for securities sold 7,622,000
Interest receivable 3,138,019
Receivable for shares of beneficial interest sold 244,615
Receivable for variation margin on futures contracts 11,597
-------------
Total assets 173,428,869
-------------
LIABILITIES
Due to Custodian 21,915
Payable for shares of beneficial interest redeemed 1,510,559
Dividends Payable 203,136
Distribution fee payable 109,639
Advisory Fee Payable 31,323
Unrealized depreciation on interest rate swap contracts 15,503
Accrued expenses 92,143
-------------
Total liabilities 1,984,218
-------------
Net Assets $ 171,444,651
=============
COMPOSITION OF NET ASSETS
Shares of beneficial interest, at par $ 158,313
Additional paid-in capital 166,363,168
Accumulated undistributed net investment income 61,698
Accumulated net realized loss on investment transactions (3,966,544)
Net unrealized appreciation of investments 8,828,016
-------------
$ 171,444,651
=============
Class A Shares
Net assets $ 63,198,988
-------------
Shares of beneficial interest outstanding 5,828,447
-------------
Class B Shares
Net assets $ 76,804,184
-------------
Shares of beneficial interest outstanding 7,096,570
-------------
Class C Shares
Net assets $ 31,441,479
-------------
Shares of beneficial interest outstanding 2,906,309
-------------
CALCULATION OF MAXIMUM OFFERING PRICE
Class A Shares
Net asset value and redemption price per share $10.84
Sales charge-4.25% of public offering price .48
------
Maximum offering price $11.32
======
Class B Shares
Net asset value and offering price per share $10.82
======
Class C Shares
Net asset value and offering price per share $10.82
======
See notes to financial statements.
_______________________________________________________________________________
76 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Statement of Operations
- -------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
Six Months Ended March 31, 2004 (unaudited)
Arizona Florida
============= =============
INVESTMENT INCOME
Interest $ 5,835,084 $ 6,984,136
------------- -------------
EXPENSES
Advisory fee 670,171 787,823
Distribution fee-Class A 152,842 160,135
Distribution fee-Class B 443,253 502,424
Distribution fee-Class C 119,549 224,309
Custodian 69,926 67,350
Administrative 43,500 43,500
Transfer agency 41,855 45,155
Audit and legal 35,765 37,350
Registration 16,182 13,662
Printing 11,033 9,164
Trustees' fees 1,250 1,250
Miscellaneous 15,422 13,141
------------- -------------
Total expenses 1,620,748 1,905,263
Less: expense offset arrangement
(see Note B) (5) (5)
Less: expenses waived and reimbursed
by Adviser (see Note B) (390,407) (413,343)
------------- -------------
Net expenses 1,230,336 1,491,915
------------- -------------
Net investment income 4,604,748 5,492,221
------------- -------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENT TRANSACTIONS
Net realized gain (loss) on:
Investment transactions 687,666 1,087,028
Futures contracts (57,961) (64,310)
Net change in unrealized
appreciation/depreciation of:
Investments 3,334,180 2,466,733
Futures contracts (155,639) 69,237
Swap contracts (12,866) 58,322
------------- -------------
Net gain on investment transactions 3,795,380 3,617,010
------------- -------------
NET INCREASE IN NET ASSETS
FROM OPERATIONS $ 8,400,128 $ 9,109,231
============= =============
See notes to financial statements.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 77
Statement of Operations
- -------------------------------------------------------------------------------
Massachusetts Michigan
============= =============
INVESTMENT INCOME
Interest $ 4,341,031 $ 4,216,775
------------- -------------
EXPENSES
Advisory fee 493,027 487,483
Distribution fee-Class A 63,030 70,821
Distribution fee-Class B 366,944 285,566
Distribution fee-Class C 211,805 258,338
Custodian 64,257 68,642
Administrative 43,500 43,500
Transfer agency 40,404 53,702
Audit and legal 34,523 24,715
Registration 11,003 1,056
Printing 7,593 3,682
Trustees' fees 1,200 1,200
Miscellaneous 11,257 8,505
------------- -------------
Total expenses 1,348,543 1,307,210
Less: expense offset arrangement
(see Note B) (5) (6)
Less: expenses waived and reimbursed
by Adviser (see Note B) (295,836) (156,573)
------------- -------------
Net expenses 1,052,702 1,150,631
------------- -------------
Net investment income 3,288,329 3,066,144
------------- -------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENT TRANSACTIONS
Net realized gain (loss) on:
Investment transactions 351,788 194,503
Futures contracts (76,988) -0-
Net change in unrealized
appreciation/depreciation of:
Investments 1,822,247 2,323,434
Futures contracts 41,564 -0-
Swap contracts 81,452 (18,677)
------------- -------------
Net gain on investment transactions 2,220,063 2,499,260
------------- -------------
NET INCREASE IN NET ASSETS
FROM OPERATIONS $ 5,508,392 $ 5,565,404
============= =============
See notes to financial statements.
_______________________________________________________________________________
78 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Statement of Operations
- -------------------------------------------------------------------------------
Minnesota New Jersey
============= =============
INVESTMENT INCOME
Interest $ 2,824,566 $ 6,140,958
------------- -------------
EXPENSES
Advisory fee 342,380 709,302
Distribution fee-Class A 100,853 116,486
Distribution fee-Class B 116,898 525,696
Distribution fee-Class C 94,726 220,902
Custodian 60,652 68,157
Administrative 43,500 43,500
Audit and legal 37,451 39,364
Transfer agency 30,757 74,845
Printing 5,645 16,476
Registration 5,242 7,424
Trustees' fees 1,010 1,350
Miscellaneous 8,259 16,691
------------- -------------
Total expenses 847,373 1,840,193
Less: expense offset arrangement
(see Note B) (3) (8)
Less: expenses waived and reimbursed
by Adviser (see Note B) (206,436) (330,218)
------------- -------------
Net expenses 640,934 1,509,967
------------- -------------
Net investment income 2,183,632 4,630,991
------------- -------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENT TRANSACTIONS
Net realized gain (loss) on:
Investment transactions 149,003 826,513
Futures contracts 24,379 (548,863)
Net change in unrealized
appreciation/depreciation of:
Investments 1,186,296 3,020,417
Futures contracts (1,943) 293,997
Swap contracts (8,034) (25,467)
------------- -------------
Net gain on investment transactions 1,349,701 3,566,597
------------- -------------
NET INCREASE IN NET ASSETS
FROM OPERATIONS $ 3,533,333 $ 8,197,588
============= =============
See notes to financial statements.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 79
Statement of Operations
- -------------------------------------------------------------------------------
Ohio Pennsylvania
============= =============
INVESTMENT INCOME
Interest $ 5,550,886 $ 5,198,364
------------- -------------
EXPENSES
Advisory fee 665,783 596,853
Distribution fee-Class A 116,286 123,779
Distribution fee-Class B 412,427 331,685
Distribution fee-Class C 265,210 210,681
Custodian 65,985 64,182
Transfer agency 60,636 62,911
Administrative 43,500 43,500
Audit and legal 39,116 29,643
Printing 13,887 16,550
Registration 10,166 5,455
Trustees' fees 1,200 1,200
Miscellaneous 13,739 13,676
------------- -------------
Total expenses 1,707,935 1,500,115
Less: expense offset arrangement
(see Note B) (7) (6)
Less: expenses waived and reimbursed
by Adviser (see Note B) (328,192) (213,236)
------------- -------------
Net expenses 1,379,736 1,286,873
------------- -------------
Net investment income 4,171,150 3,911,491
------------- -------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENT TRANSACTIONS
Net realized gain (loss) on:
Investment transactions 1,321,940 2,930,775
Futures contracts (97,140) -0-
Net change in unrealized
appreciation/depreciation of:
Investments 985,672 13,780
Futures contracts 119,133 -0-
Swap contracts (16,260) (10,998)
------------- -------------
Net gain on investment transactions 2,313,345 2,933,557
------------- -------------
NET INCREASE IN NET ASSETS
FROM OPERATIONS $ 6,484,495 $ 6,845,048
============= =============
See notes to financial statements.
_______________________________________________________________________________
80 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Statement of Operations
- -------------------------------------------------------------------------------
Virginia
=============
INVESTMENT INCOME
Interest $ 4,993,469
-------------
EXPENSES
Advisory fee 564,486
Distribution fee-Class A 103,228
Distribution fee-Class B 396,291
Distribution fee-Class C 162,795
Custodian 60,083
Administrative 43,500
Transfer agency 37,444
Audit and legal 32,356
Printing 12,786
Registration 9,561
Trustees' fees 1,200
Miscellaneous 8,485
-------------
Total expenses 1,432,215
Less: expense offset arrangement
(see Note B) (5)
Less: expenses waived and reimbursed by Adviser
(see Note B) (390,564)
-------------
Net expenses 1,041,646
-------------
Net investment income 3,951,823
-------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENT TRANSACTIONS
Net realized gain (loss) on:
Investment transactions 1,075,620
Futures transactions (103,940)
Net change in unrealized appreciation/depreciation of:
Investments 459,944
Futures contracts 60,461
Swap contracts (15,503)
-------------
Net gain on investment transactions 1,476,582
-------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 5,428,405
=============
See notes to financial statements.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 81
Statement of Changes in Net Assets
- -------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
Arizona
==============================
Six Months
Ended Year Ended
March 31, 2004 September 30,
(unaudited) 2003
============= =============
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment income $ 4,604,748 $ 9,900,218
Net realized gain (loss) on
investment transactions 629,705 (448,519)
Net change in unrealized
appreciation/depreciation
of investments 3,165,675 (5,693,301)
------------- -------------
Net increase in net assets
from operations 8,400,128 3,758,398
DIVIDENDS AND DISTRIBUTIONS
TO SHAREHOLDERS FROM
Net investment income
Class A (2,383,975) (5,121,405)
Class B (1,756,951) (3,716,622)
Class C (474,176) (1,032,018)
TRANSACTIONS IN SHARES OF
BENEFICIAL INTEREST
Net decrease (5,807,275) (15,652,231)
------------- -------------
Total decrease (2,022,249) (21,763,878)
NET ASSETS
Beginning of period 216,088,496 237,852,374
------------- -------------
End of period (including distributions in
excess of net investment income of
($252,364) and ($242,010),
respectively) $ 214,066,247 $ 216,088,496
============= =============
See notes to financial statements.
_______________________________________________________________________________
82 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Statement of Changes in Net Assets
- -------------------------------------------------------------------------------
Florida
==============================
Six Months
Ended Year Ended
March 31, 2004 September 30,
(unaudited) 2003
============= =============
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment income $ 5,492,221 $ 11,766,440
Net realized gain on
investment transactions 1,022,718 1,789,970
Net change in unrealized
appreciation/depreciation
of investments 2,594,292 (5,418,566)
------------- -------------
Net increase in net assets from
operations 9,109,231 8,137,844
DIVIDENDS AND DISTRIBUTIONS
TO SHAREHOLDERS FROM
Net investment income
Class A (2,588,937) (5,600,400)
Class B (2,089,479) (4,815,342)
Class C (933,734) (2,278,005)
TRANSACTIONS IN SHARES OF
BENEFICIAL INTEREST
Net increase (decrease) (18,815,420) 1,843,321
------------- -------------
Total decrease (15,318,339) (2,712,582)
NET ASSETS
Beginning of period 261,345,310 264,057,892
------------- -------------
End of period (including distributions in
excess of net investment income of
($438,445) and ($318,516),
respectively) $ 246,026,971 $ 261,345,310
============= =============
See notes to financial statements.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 83
Statement of Changes in Net Assets
- -------------------------------------------------------------------------------
Massachusetts
==============================
Six Months
Ended Year Ended
March 31, 2004 September 30,
(unaudited) 2003
============= =============
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATONS
Net investment income $ 3,288,329 $ 7,532,916
Net realized gain (loss) on
investment transactions 274,800 (608,810)
Net change in unrealized
appreciation/depreciation
of investments 1,945,263 (4,052,260)
------------- -------------
Net increase in net assets
from operations 5,508,392 2,871,846
DIVIDENDS AND DISTRIBUTIONS
TO SHAREHOLDERS FROM
Net investment income
Class A (1,017,950) (2,532,333)
Class B (1,511,529) (3,220,270)
Class C (874,160) (2,012,495)
TRANSACTIONS IN SHARES OF
BENEFICIAL INTEREST
Net decrease (17,668,569) (26,812,689)
------------- -------------
Total decrease (15,563,816) (31,705,941)
NET ASSETS
Beginning of period 166,862,750 198,568,691
------------- -------------
End of period (including distributions in
excess of net investment income of
($301,801) and ($186,491),
respectively) $ 151,298,934 $ 166,862,750
============= =============
See notes to financial statements.
_______________________________________________________________________________
84 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Statement of Changes in Net Assets
- -------------------------------------------------------------------------------
Michigan
==============================
Six Months
Ended Year Ended
March 31, 2004 September 30,
(unaudited) 2003
============= =============
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment income $ 3,066,144 $ 6,846,685
Net realized gain (loss) on
investment transactions 194,503 (20,585)
Net change in unrealized
appreciation/depreciation
of investments 2,304,757 (3,261,947)
------------- -------------
Net increase in net assets
from operations 5,565,404 3,564,153
DIVIDENDS AND DISTRIBUTIONS
TO SHAREHOLDERS FROM
Net investment income
Class A (1,077,159) (2,671,344)
Class B (1,100,118) (2,244,081)
Class C (996,647) (2,431,035)
TRANSACTIONS IN SHARES OF
BENEFICIAL INTEREST
Net increase (decrease) (18,676,541) 3,522,985
------------- -------------
Total decrease (16,285,061) (259,322)
NET ASSETS
Beginning of period 166,051,679 166,311,001
------------- -------------
End of period (including distributions in
excess of net investment income of
($283,907) and ($176,127),
respectively) $ 149,766,618 $ 166,051,679
============= =============
See notes to financial statements.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 85
Statement of Changes in Net Assets
- -------------------------------------------------------------------------------
Minnesota
==============================
Six Months
Ended Year Ended
March 31, 2004 September 30,
(unaudited) 2003
============= =============
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment income $ 2,183,632 $ 4,542,790
Net realized gain (loss) on
investment transactions 173,382 (88,173)
Net change in unrealized
appreciation/depreciation
of investments 1,176,319 (1,558,055)
------------- -------------
Net increase in net assets
from operations 3,533,333 2,896,562
DIVIDENDS AND DISTRIBUTIONS
TO SHAREHOLDERS FROM
Net investment income
Class A (1,504,461) (2,971,448)
Class B (441,164) (949,471)
Class C (357,641) (794,958)
TRANSACTIONS IN SHARES OF
BENEFICIAL INTEREST
Net increase (decrease) (2,535,976) 2,363,542
------------- -------------
Total increase (decrease) (1,305,909) 544,227
NET ASSETS
Beginning of period 111,134,869 110,590,642
------------- -------------
End of period (including distributions in
excess of net investment income of
($240,422) and ($120,788),
respectively) $ 109,828,960 $ 111,134,869
============= =============
See notes to financial statements.
_______________________________________________________________________________
86 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Statement of Changes in Net Assets
- -------------------------------------------------------------------------------
New Jersey
==============================
Six Months
Ended Year Ended
March 31, 2004 September 30,
(unaudited) 2003
============= =============
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment income $ 4,630,991 $ 10,460,472
Net realized gain (loss) on
investment transactions 277,650 (2,235,189)
Net change in unrealized
appreciation/depreciation
of investments 3,288,947 (4,190,549)
------------- -------------
Net increase in net assets
from operations 8,197,588 4,034,734
DIVIDENDS AND DISTRIBUTIONS
TO SHAREHOLDERS FROM
Net investment income
Class A (1,815,556) (4,099,778)
Class B (2,076,683) (4,761,093)
Class C (873,020) (1,987,161)
TRANSACTIONS IN SHARES OF
BENEFICIAL INTEREST
Net decrease (20,796,981) (33,812,860)
------------- -------------
Total decrease (17,364,652) (40,626,158)
NET ASSETS
Beginning of period 237,559,055 278,185,213
------------- -------------
End of period (including distributions in
excess of net investment income of
($393,872) and ($259,604),
respectively) $ 220,194,403 $ 237,559,055
============= =============
See notes to financial statements.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 87
Statement of Changes in Net Assets
- -------------------------------------------------------------------------------
Ohio
==============================
Six Months
Ended Year Ended
March 31, 2004 September 30,
(unaudited) 2003
============= =============
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment income $ 4,171,150 $ 8,573,807
Net realized gain (loss) on
investment transactions 1,224,800 (1,209,815)
Net change in unrealized
appreciation/depreciation
of investments 1,088,545 2,245,864
------------- -------------
Net increase in net assets
from operations 6,484,495 9,609,856
DIVIDENDS AND DISTRIBUTIONS
TO SHAREHOLDERS FROM
Net investment income
Class A (1,774,071) (3,471,508)
Class B (1,602,174) (3,234,231)
Class C (1,031,350) (2,263,948)
TRANSACTIONS IN SHARES OF
BENEFICIAL INTEREST
Net increase 2,678,740 14,680,272
------------- -------------
Total increase 4,755,640 15,320,441
NET ASSETS
Beginning of period 212,585,565 197,265,124
------------- -------------
End of period (including distributions
in excess of net investment income
of ($464,751) and ($228,306),
respectively) $ 217,341,205 $ 212,585,565
============= =============
See notes to financial statements.
_______________________________________________________________________________
88 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Statement of Changes in Net Assets
- -------------------------------------------------------------------------------
Pennsylvania
==============================
Six Months
Ended Year Ended
March 31, 2004 September 30,
(unaudited) 2003
============= =============
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment income $ 3,911,491 $ 9,395,049
Net realized gain (loss) on
investment transactions 2,930,775 (771,000)
Net change in unrealized
appreciation/depreciation
of investments 2,782 (2,447,411)
------------- -------------
Net increase in net assets
from operations 6,845,048 6,176,638
DIVIDENDS AND DISTRIBUTIONS
TO SHAREHOLDERS FROM
Net investment income
Class A (1,977,694) (4,381,778)
Class B (1,352,749) (2,999,781)
Class C (860,085) (1,891,160)
TRANSACTIONS IN SHARES OF
BENEFICIAL INTEREST
Net decrease (10,073,425) (21,636,211)
------------- -------------
Total decrease (7,418,905) (24,732,292)
NET ASSETS
Beginning of period 195,379,382 220,111,674
------------- -------------
End of period (including distributions in
excess of net investment income of
($440,611) and ($161,574),
respectively) $ 187,960,477 $ 195,379,382
============= =============
See notes to financial statements.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 89
Statement of Changes in Net Assets
- -------------------------------------------------------------------------------
Virginia
==============================
Six Months
Ended Year Ended
March 31, 2004 September 30,
(unaudited) 2003
============= =============
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment income $ 3,951,823 $ 8,672,896
Net realized gain on
investment transactions 971,680 1,415,739
Net change in unrealized
appreciation/depreciation
of investments 504,902 (2,171,362)
------------- -------------
Net increase in net assets
from operations 5,428,405 7,917,273
DIVIDEND AND DISTRIBUTIONS
TO SHAREHOLDERS FROM
Net investment income
Class A (1,624,769) (3,538,492)
Class B (1,597,302) (3,470,151)
Class C (657,568) (1,440,661)
TRANSACTIONS IN SHARES OF
BENEFICIAL INTEREST
Net decrease (17,703,360) (8,903,470)
------------- -------------
Total decrease (16,154,594) (9,435,501)
NET ASSETS
Beginning of period 187,599,245 197,034,746
------------- -------------
End of period (including undistributed
net investment income of $61,698 and
distributions in excess of net
investment income of ($10,486),
respectively) $ 171,444,651 $ 187,599,245
============= =============
See notes to financial statements.
_______________________________________________________________________________
90 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Notes to Financial Statements
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
March 31, 2004 (unaudited)
NOTE A
Significant Accounting Policies
AllianceBernstein Municipal Income Fund II (the "Fund"), formerly Alliance
Municipal Income Fund II, which is a Massachusetts Business Trust, is
registered under the Investment Company Act of 1940, as a non-diversified
open-end management investment company. The Fund operates as a series company
currently comprised of nine portfolios: Arizona Portfolio, Florida Portfolio,
Massachusetts Portfolio, Michigan Portfolio, Minnesota Portfolio, New Jersey
Portfolio, Ohio Portfolio, Pennsylvania Portfolio and Virginia Portfolio (the
"Portfolios"). Each series is considered to be a separate entity for financial
reporting and tax purposes. Each portfolio offers Class A, Class B and Class C
shares. Class A shares are sold with a front-end sales charge of up to 4.25%
for purchases not exceeding $1,000,000. With respect to purchases of $1,000,000
or more, Class A shares redeemed within one year of purchase may be subject to
a contingent deferred sales charge of 1%. Class B shares are currently sold
with a contingent deferred sales charge which declines from 3% to zero
depending on the period of time the shares are held. Class B shares will
automatically convert to Class A shares six years after the end of the calendar
month of purchase. Class C shares are subject to a contingent deferred sales
charge of 1% on redemptions made within the first year after purchase. All
three classes of shares have identical voting, dividend, liquidation and other
rights and the same terms and conditions, except that each class bears
different distribution expenses and has exclusive voting rights with respect to
its distribution plan. The financial statements have been prepared in
conformity with accounting principles generally accepted in the United States,
which require management to make certain estimates and assumptions that affect
the reported amounts of assets and liabilities in the financial statements and
amounts of income and expenses during the reporting period. Actual results
could differ from those estimates. Additional information about some of the
items discussed in these Notes to Financial Statements is contained in the
Fund's Statement of Additional Information, which is available upon request.
The following is a summary of the significant accounting policies followed by
the Fund.
1. Security Valuation
In accordance with Pricing Policies adopted by the Board of Directors of the
Fund (the "Pricing and Policies") and applicable law, portfolio securities are
valued at current market value or at fair value. The Board of Directors has
delegated to Alliance Capital Management, L.P., (the "Adviser"), subject to the
Board's continuing oversight, certain responsibilities with respect to the
implementation of the Pricing Policies. Pursuant to the Pricing Policies,
securities for which market quotations are readily available are valued at
their current market value. In general, the market value of these securities is
determined as follows:
Securities listed on a national securities exchange or on a foreign securities
exchange are valued at the last sales price at the close of the exchange or
foreign securities exchange. If there has been no sale on such day, the
securities are valued at the mean of the closing bid and asked prices on such
day. If no bid or
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 91
Notes to Financial Statements
- -------------------------------------------------------------------------------
asked prices are quoted on such day, then the security is valued in good faith
at fair value in accordance with the Pricing Policies. Securities listed on
more than one exchange are valued by reference to the principal exchange on
which the securities are traded; securities not listed on an exchange but
traded on The Nasdaq Stock Market, Inc. ("NASDAQ") are valued in accordance
with the NASDAQ Official Closing Price; listed put or call options are valued
at the last sale price. If there has been no sale on that day, such securities
will be valued at the closing bid prices on that day; open futures contracts
and options thereon are valued using the closing settlement price or, in the
absence of such a price, the most recent quoted bid price. If there are no
quotations available for the day of valuations, the last available closing
settlement price is used; securities traded in over-the-counter market, (but
excluding securities traded on NASDAQ) are valued at the mean of the current
bid and asked prices as reported by the National Quotation Bureau or other
comparable sources; U.S.Government securities and other debt instruments having
60 days or less remaining until maturity are valued at amortized cost if their
original maturity was 60 days or less, or by amortizing their fair value as of
the 61st day prior to maturity if their original term to maturity exceeded 60
days; fixed-income securities, including mortgage backed and asset backed
securities, may be valued on the basis of prices provided by a pricing service
or at a price obtained from one or more of the major broker/dealers. In cases
where broker/dealer quotes are obtained, the Pricing Policies provide that the
Adviser may establish procedures whereby changes in market yields or spreads
are used to adjust, on a daily basis, a recently obtained quoted price on a
security; and OTC and other derivatives are valued on the basis of a quoted bid
price or spread from a major broker/dealer in such security. Securities for
which market quotations are not readily avaliable are valued at fair value in
accordance with the Pricing Policies.
2. Taxes
It is the policy of each Portfolio to meet the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute all
of its investment company taxable income and net realized gains to its
shareholders. Therefore, no provisions for federal income or excise taxes are
required.
3. Investment Income and Investment Transactions
Interest income is accrued daily. Investment transactions are accounted for on
the date securities are purchased or sold. Investment gains and losses are
determined on the identified cost basis. As described more fully in the
prospectus for the Portfolios, each Portfolio may buy and sell securities from
other affiliated funds in accordance with the requirements of Rule 17a-7 of the
Investment Company Act of 1940. Each Portfolio has adopted procedures to ensure
that all such transactions are done in accordance with the requirements of Rule
17a-7. The Portfolios amortize premium and accrete original issue discount and
market discount as adjustments to interest income.
The Portfolios follow an investment policy of investing primarily in municipal
obligations of one state. Economic changes affecting the state and certain of
its public bodies and municipalities may affect the ability of issuers within
the state to pay interest on, or repay principal of, municipal obligations held
by the Portfolios.
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92 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Notes to Financial Statements
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4. Income and Expenses
All income earned and expenses incurred by the Portfolios are borne on a
pro-rata basis by each settled class of shares, based on the proportionate
interest in the Portfolios represented by the net assets of such class, except
that the Portfolio's Class B and Class C shares bear higher distribution and
transfer agent fees than Class A shares.
5. Dividends and Distributions
Dividends and distributions to shareholders are recorded on the ex-dividend
date. Income and capital gains distributions are determined in accordance with
federal tax regulations and may differ from those determined in accordance with
accounting principles generally accepted in the United States. To the extent
these differences are permanent, such amounts are reclassified within the
capital accounts based on their federal tax basis treatment; temporary
differences do not require such reclassification.
NOTE B
Advisory Fee and Other Transactions with Affiliates
Under the terms of an investment advisory agreement, the Fund pays the Adviser
an advisory fee at an annual rate of .625 of 1% of each Portfolio's average
daily net assets. Such fees are accrued daily and paid monthly. For the six
months ended March 31, 2004, the Adviser has voluntarily agreed to waive a
portion of its advisory fees. The aggregate amounts of such fee waivers were as
follows: Arizona Portfolio, $297,028; Florida Portfolio, $304,951;
Massachusetts Portfolio, $228,764; Michigan Portfolio, $46,180; Minnesota
Portfolio, $71,674; New Jersey Portfolio, $232,572; Ohio Portfolio, $234,580;
Pennsylvania Portfolio, $130,546; and Virginia Portfolio, $269,680.
Effective January 1, 2004, the Adviser began waiving a portion of its advisory
fee so as to charge the Fund at the reduced annual rate of .45% of the first
$2.5 billion, .40% of the next $2.5 billion and .35% in excess of $5 billion,
of the average daily net assets of the Fund. For the six months ended March 31,
2004, such waiver amounted to: Arizona Portfolio, $93,379; Florida Portfolio,
$108,392; Massachusetts Portfolio, $67,072; Michigan Portfolio, $66,893;
Minnesota Portfolio, $47,762; New Jersey Portfolio, $97,646; Ohio Portfolio,
$93,612; Pennsylvania Portfolio, $82,690; and Virginia Portfolio, $77,384.The
amount of the fee waiver may increase or decrease as a result of a final,
definitive agreement with the New York Attorney General's Office ("NYAG"). For
a more complete discussion of the Adviser's settlement with the NYAG, please
see "Legal Proceedings" below.
Pursuant to the advisory agreement, the Arizona, Florida, Massachusetts, New
Jersey, Ohio and Pennsylvania Portfolios each paid $43,500 to the Adviser
representing the cost of certain legal and accounting services provided to
these Portfolios by the Adviser for the six months ended March 31, 2004.
Additionally,
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 93
Notes to Financial Statements
- -------------------------------------------------------------------------------
the Adviser voluntarily agreed to waive all such fees for the Michigan,
Minnesota and Virginia Portfolios in the aggregate amount of $43,500 for each
of these Portfolios.
Each Portfolio compensates Alliance Global Investor Services, Inc., (AGIS), a
wholly-owned subsidiary of the Adviser, under a Transfer Agency Agreement, for
providing personnel and facilities to perform transfer agency services for each
Portfolio. Such compensation amounted to: Arizona Portfolio, $21,222; Florida
Portfolio, $22,838; Massachusetts Portfolio, $20,773; Michigan Portfolio,
$28,220; Minnesota Portfolio, $17,993; New Jersey Portfolio, $33,049; Ohio
Portfolio, $29,311; Pennsylvania Portfolio, $33,580; and Virginia Portfolio,
$24,037.
For the six months ended March 31, 2004, each Portfolio's expenses were reduced
under an expense offset arrangement with AGIS, as follows: Arizona Portfolio,
by $5; Florida Portfolio, by $5; Massachusetts Portfolio, by $5; Michigan
Portfolio, by $6; Minnesota Portfolio, by $3; New Jersey Portfolio, by $8; Ohio
Portfolio, by $7; Pennsylvania Portfolio, by $6; and Virginia Portfolio, by $5.
AllianceBernstein Investment Research and Management, Inc., (the
"Distributor"), formerly Alliance Fund Distributors, Inc. a wholly-owned
subsidiary of the Adviser, serves as the distributor of the Fund's shares. The
Distributor has advised the Fund that it has retained front-end sales charges
from sales of Class A shares and received contingent deferred sales charges
imposed upon redemptions by shareholders of Class A, Class B and Class C shares
for each Portfolio for the six months ended March 31, 2004 as follows:
Front End Contingent Deferred Sales Charges
Sales Charges ----------------------------------------
Portfolio Class A Class A Class B Class C
- -------------------------------------------------------------------------------
Arizona $ 15,021 $ 1,934 $ 55,357 $ 1,102
Florida 9,824 -0- 77,123 1,582
Massachusetts 2,968 -0- 45,732 2,975
Michigan 4,991 508 52,991 10,248
Minnesota 6,727 -0- 7,449 4,446
New Jersey 2,800 -0- 92,429 1,786
Ohio 10,202 (714) 51,840 2,888
Pennsylvania 5,580 50 36,328 2,396
Virginia 7,869 -0- 46,930 6,247
NOTE C
Distribution Services Agreement
Each Portfolio has adopted a Distribution Services Agreement (the "Agreement")
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the
Agreement, each Portfolio pays distribution and servicing fees to the
Distributor at an annual rate of up to .30 of 1% of each Portfolio's average
daily net assets attributable to Class A shares and 1% of each Portfolio's
average
- -------------------------------------------------------------------------------
94 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Notes to Financial Statements
- -------------------------------------------------------------------------------
daily net assets attributable to both Class B and Class C shares. Such fees are
accrued daily and paid monthly. The Agreement provides that the Distributor
will use such payments in their entirety for distribution assistance and
promotional activities. The Distributor has advised the Fund that it has
incurred expenses in excess of the distribution costs reimbursed by each
Portfolio as follows:
Portfolio Class B Class C
- -------------------------------------------------------------------------
Arizona $ 4,760,074 $ 940,353
Florida 4,916,821 2,386,786
Massachusetts 4,077,478 2,355,376
Michigan 3,775,097 2,908,776
Minnesota 2,861,372 1,814,182
New Jersey 6,081,151 2,433,780
Ohio 5,320,595 2,556,784
Pennsylvania 4,010,744 2,239,924
Virginia 4,412,939 1,607,370
Such costs may be recovered from each Portfolio at an annual rate of up to .30
of 1% of each Portfolio's daily net assets in future periods so long as the
Agreement is in effect. In accordance with the Agreement, there is no provision
for recovery of unreimbursed distribution costs incurred by the Distributor
beyond the current fiscal year for Class A shares. The Agreement also provides
that the Adviser may use its own resources to finance the distribution of each
Portfolio's shares.
NOTE D
Investment Transactions
Purchases and sales of investment securities (excluding short-term investments
and U.S. government securities) for the six months ended March 31, 2004 were as
follows:
Portfolio Purchases Sales
- -------------------------------------------------------------------------
Arizona $ 24,055,178 $ 39,777,551
Florida 26,706,408 23,696,815
Massachusetts 34,777,664 47,793,208
Michigan 1,862,770 20,414,836
Minnesota 9,379,232 11,153,999
New Jersey 18,094,778 36,310,393
Ohio 34,404,730 40,564,061
Pennsylvania 28,684,341 48,511,223
Virginia 8,459,812 30,769,053
There were no purchases or sales of U.S. government and government agency
obligations during the period.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 95
Notes to Financial Statements
- -------------------------------------------------------------------------------
At March 31, 2004, the cost of investments for federal income tax purposes,
gross unrealized appreciation, gross unrealized depreciation and net unrealized
appreciation/depreciation of investments for each Portfolio were as follows
(excluding futures and swap contracts):
Gross Gross
Unrealized Unrealized Net Unrealized
Portfolio Tax Cost Appreciation Depreciation Appreciation
- -------------------------------------------------------------------------------
Arizona $ 202,786,041 $ 9,155,953 $ 866,803 $ 8,289,150
Florida 241,095,158 13,357,761 369,169 12,988,592
Massachusetts 145,441,247 9,443,461 -0- 9,443,461
Michigan 140,618,199 6,936,767 260,385 6,676,381
Minnesota 106,702,284 5,309,007 148,834 5,160,172
New Jersey 208,824,699 12,773,656 565,496 12,208,160
Ohio 205,533,779 9,620,830 255,430 9,365,400
Pennsylvania 172,685,396 11,298,021 4,484 11,293,537
Virginia 153,573,273 8,839,365 -0- 8,839,365
1. Interest Rate Swap Agreements
The Portfolios may enter into swap agreements to protect themselves from
interest rate fluctuations on the underlying debt instruments and for
investment purposes. A swap is an agreement that obligates two parties to
exchange a series of cash flows at specified intervals based upon or calculated
by reference to changes in specified prices or rates for a specified amount of
an underlying asset. The payment flows are usually netted against each other,
with the difference being paid by one party to the other.
Risks may arise as a result of the failure of the counterparty to the swap
contract to comply with the terms of the swap contract. The loss incurred by
the failure of a counterparty is generally limited to the net interest payment
to be received by the Portfolios, and/or the termination value at the end of
the contract. Therefore, the Portfolios consider the creditworthiness of each
counterparty to a swap contract in evaluating potential credit risk.
Additionally, risks may arise from unanticipated movements in interest rates or
in the value of the underlying securities.
The Portfolios record a net receivable or payable on a daily basis for the net
interest income or expense expected to be received or paid in the interest
period. Net interest received or paid on these contracts is recorded as
interest income (or as an offset to interest income). Fluctuations in the value
of swap contracts are recorded for financial statement purposes as a component
of net unrealized appreciation/depreciation of investments. Realized gains
and/or losses from terminated swap contracts are included in net realized gain
or loss on investment transactions.
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96 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Notes to Financial Statements
- -------------------------------------------------------------------------------
2. Financial Futures Contracts
The Portfolios may buy or sell financial futures contracts for the purpose of
hedging its portfolio against adverse affects of anticipated movements in the
market. The Portfolios bear the market risk that arises from changes in the
value of these financial instruments and the imperfect correlation between
movements in the price of the futures contracts and movements in the price of
securities hedged or used to cover.
At the time the Portfolios enter into a futures contract, the Portfolios
deposit and maintain as collateral an initial margin as required by the
exchange on which the transaction is effected. Pursuant to the contract, the
Portfolios agree to receive from or pay to the broker an amount of cash equal
to the daily fluctuation in the value of the contract. Such receipts or
payments are known as variation margin and are recorded by the Portfolios as
unrealized gains or losses. Risk may arise from the potential inability of a
counterparty to meet the terms of a contract. When the contract is closed, the
Portfolios record a realized gain or loss equal to the difference between the
value of the contract at the time it was opened and the time it was closed.
NOTE E
Shares of Beneficial Interest
There is an unlimited number of $.01 par value shares of beneficial interest
authorized for Class A, Class B and Class C shares.
Transactions in shares of beneficial interest for each Portfolio were as
follows:
Shares Amount
--------------------------- ------------------------------
Six Months Six Months
Ended Ended
March 31, Year Ended March 31, Year Ended
2004 September 30, 2004 September 30,
Arizona Portfolio (unaudited) 2003 (unaudited) 2003
- ----------------- ------------ ------------ -------------- --------------
Class A
Shares sold 993,718 2,746,350 $ 10,806,680 $ 29,608,405
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends and
distributions 135,769 298,491 1,477,299 3,211,739
- -------------------------------------------------------------------------------
Shares converted
from Class B 117,183 132,593 1,276,171 1,417,147
- -------------------------------------------------------------------------------
Shares redeemed (1,054,350) (4,786,010) (11,431,261) (51,317,970)
- -------------------------------------------------------------------------------
Net increase
(decrease) 192,320 (1,608,576) $ 2,128,889 $(17,080,679)
===============================================================================
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 97
Notes to Financial Statements
- -------------------------------------------------------------------------------
Shares Amount
--------------------------- ------------------------------
Six Months Six Months
Ended Ended
March 31, Year Ended March 31, Year Ended
2004 September 30, 2004 September 30,
Arizona Portfolio (unaudited) 2003 (unaudited) 2003
- ----------------- ------------ ------------ -------------- --------------
Class B
Shares sold 248,247 1,825,142 $ 2,677,360 $ 19,676,394
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends and
distributions 87,742 210,399 952,574 2,259,411
- -------------------------------------------------------------------------------
Shares converted
to Class A (117,362) (132,853) (1,276,171) (1,417,147)
- -------------------------------------------------------------------------------
Shares redeemed (697,545) (1,924,335) (7,563,320) (20,568,914)
- -------------------------------------------------------------------------------
Net decrease (478,918) (21,647) $ (5,209,557) $ (50,256)
===============================================================================
Class C
Shares sold 124,782 836,674 $ 1,348,646 $ 9,012,975
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends and
distributions 20,842 54,006 226,164 579,946
- -------------------------------------------------------------------------------
Shares
redeemed (397,190) (758,108) (4,301,417) (8,114,217)
- -------------------------------------------------------------------------------
Net increase
(decrease) (251,566) 132,572 $ (2,726,607) $ 1,478,704
===============================================================================
Shares Amount
--------------------------- ------------------------------
Six Months Six Months
Ended Ended
March 31, Year Ended March 31, Year Ended
2004 September 30, 2004 September 30,
Florida Portfolio (unaudited) 2003 (unaudited) 2003
- ----------------- ------------ ------------ -------------- --------------
Class A
Shares sold 668,655 4,034,122 $ 6,860,855 $ 41,151,690
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends and
distributions 125,488 233,348 1,288,773 2,383,179
- -------------------------------------------------------------------------------
Shares converted
from Class B 312,177 302,389 3,211,126 3,095,797
- -------------------------------------------------------------------------------
Shares redeemed (1,605,933) (4,379,706) (16,460,471) (44,671,410)
- -------------------------------------------------------------------------------
Net increase
(decrease) (499,613) 190,153 $ (5,099,717) $ 1,959,256
===============================================================================
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98 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Notes to Financial Statements
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Shares Amount
--------------------------- ------------------------------
Six Months Six Months
Ended Ended
March 31, Year Ended March 31, Year Ended
2004 September 30, 2004 September 30,
Florida Portfolio (unaudited) 2003 (unaudited) 2003
- ----------------- ------------ ------------ -------------- --------------
Class B
Shares sold 407,941 2,545,708 $ 4,191,098 $ 26,093,216
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends and
distributions 122,007 254,025 1,253,577 2,596,870
- -------------------------------------------------------------------------------
Shares converted
to Class A (311,921) (302,158) (3,211,126) (3,095,797)
- -------------------------------------------------------------------------------
Shares redeemed (1,151,296) (2,400,503) (11,801,616) (24,442,787)
- -------------------------------------------------------------------------------
Net increase
(decrease) (933,269) 97,072 $ (9,568,067) $ 1,151,502
===============================================================================
Class C
Shares sold 217,288 1,345,723 $ 2,237,906 $ 13,777,500
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends and
distributions 44,647 88,573 459,080 905,586
- -------------------------------------------------------------------------------
Shares redeemed (668,024) (1,570,180) (6,844,622) (15,950,521)
- -------------------------------------------------------------------------------
Net decrease (406,089) (135,884) $ (4,147,636) $ (1,267,435)
===============================================================================
Shares Amount
--------------------------- ------------------------------
Six Months Six Months
Ended Ended
March 31, Year Ended March 31, Year Ended
Massachusetts 2004 September 30, 2004 September 30,
Portfolio (unaudited) 2003 (unaudited) 2003
- ----------------- ------------ ------------ -------------- --------------
Class A
Shares sold 217,909 855,579 $ 2,361,340 $ 9,272,826
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends and
distributions 62,215 148,032 676,414 1,602,234
- -------------------------------------------------------------------------------
Shares converted
from Class B 80,843 97,084 879,849 1,051,270
- -------------------------------------------------------------------------------
Shares redeemed (971,768) (2,793,751) (10,508,242) (30,142,579)
- -------------------------------------------------------------------------------
Net decrease (610,801) (1,693,056) $ (6,590,639) $(18,216,249)
===============================================================================
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 99
Notes to Financial Statements
- -------------------------------------------------------------------------------
Shares Amount
--------------------------- ------------------------------
Six Months Six Months
Ended Ended
March 31, Year Ended March 31, Year Ended
Massachusetts 2004 September 30, 2004 September 30,
Portfolio (unaudited) 2003 (unaudited) 2003
- ----------------- ------------ ------------ -------------- --------------
Class B
Shares sold 422,487 1,191,757 $ 4,582,721 $ 12,925,180
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends and
distributions 99,371 210,850 1,079,170 2,277,527
- -------------------------------------------------------------------------------
Shares converted
from Class A (80,992) (97,271) (879,849) (1,051,270)
- -------------------------------------------------------------------------------
Shares redeemed (678,656) (1,617,182) (7,369,329) (17,446,910)
- -------------------------------------------------------------------------------
Net decrease (237,790) (311,846) $ (2,587,287) $ (3,295,473)
===============================================================================
Class C
Shares sold 83,370 1,024,636 $ 903,562 $ 11,110,909
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends and
distributions 60,347 148,687 655,086 1,605,791
- -------------------------------------------------------------------------------
Shares redeemed (927,656) (1,670,074) (10,049,291) (18,017,667)
- -------------------------------------------------------------------------------
Net decrease (783,939) (496,751) $ (8,490,643) $ (5,300,967)
===============================================================================
Shares Amount
--------------------------- ------------------------------
Six Months Six Months
Ended Ended
March 31, Year Ended March 31, Year Ended
2004 September 30, 2004 September 30,
Michigan Portfolio (unaudited) 2003 (unaudited) 2003
- ----------------- ------------ ------------ -------------- --------------
Class A
Shares sold 221,771 1,147,023 $ 2,386,542 $ 12,368,107
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends and
distributions 68,623 168,372 739,739 1,809,903
- -------------------------------------------------------------------------------
Shares converted
from Class B 72,408 60,647 781,819 644,723
- -------------------------------------------------------------------------------
Shares redeemed (1,165,329) (1,495,739) (12,493,976) (15,976,562)
- -------------------------------------------------------------------------------
Net decrease (802,527) (119,697) $ (8,585,876) $ (1,153,829)
===============================================================================
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100 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Notes to Financial Statements
- -------------------------------------------------------------------------------
Shares Amount
--------------------------- ------------------------------
Six Months Six Months
Ended Ended
March 31, Year Ended March 31, Year Ended
2004 September 30, 2004 September 30,
Michigan Portfolio (unaudited) 2003 (unaudited) 2003
- ----------------- ------------ ------------ -------------- --------------
Class B
Shares sold 221,667 1,663,803 $ 2,375,714 $ 17,909,005
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends and
distributions 72,020 131,456 776,207 1,410,212
- -------------------------------------------------------------------------------
Shares converted
to Class A (72,526) (60,735) (781,819) (644,723)
- -------------------------------------------------------------------------------
Shares redeemed (546,921) (1,173,654) (5,886,871) (12,543,906)
- -------------------------------------------------------------------------------
Net increase
(decrease) (325,760) 560,870 $ (3,516,769) $ 6,130,588
===============================================================================
Class C
Shares sold 260,955 2,234,410 $ 2,799,541 $ 24,039,280
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends and
distributions 69,311 144,166 746,763 1,546,830
- -------------------------------------------------------------------------------
Shares redeemed (942,374) (2,535,584) (10,120,200) (27,039,884)
- -------------------------------------------------------------------------------
Net decrease (612,108) (157,008) $ (6,573,896) $ (1,453,774)
===============================================================================
Shares Amount
--------------------------- ------------------------------
Six Months Six Months
Ended Ended
March 31, Year Ended March 31, Year Ended
Minnesota 2004 September 30, 2004 September 30,
Portfolio (unaudited) 2003 (unaudited) 2003
- ----------------- ------------ ------------ -------------- --------------
Class A
Shares sold 474,327 1,330,521 $ 4,856,244 $ 13,518,588
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends and
distributions 75,544 157,223 772,321 1,590,948
- -------------------------------------------------------------------------------
Shares converted
from Class B 152,312 49,823 1,560,912 508,664
- -------------------------------------------------------------------------------
Shares redeemed (633,991) (1,273,615) (6,451,716) (12,855,591)
- -------------------------------------------------------------------------------
Net increase 68,192 263,952 $ 737,761 $ 2,762,609
===============================================================================
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ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 101
Notes to Financial Statements
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Shares Amount
--------------------------- ------------------------------
Six Months Six Months
Ended Ended
March 31, Year Ended March 31, Year Ended
Minnesota 2004 September 30, 2004 September 30,
Portfolio (unaudited) 2003 (unaudited) 2003
- ----------------- ------------ ------------ -------------- --------------
Class B
Shares sold 28,856 566,576 $ 294,504 $ 5,730,979
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends and
distributions 26,116 56,623 266,906 572,820
- -------------------------------------------------------------------------------
Shares converted
to Class A (152,336) (49,838) (1,560,912) (508,664)
- -------------------------------------------------------------------------------
Shares redeemed (147,772) (533,994) (1,504,768) (5,388,214)
- -------------------------------------------------------------------------------
Net increase
(decrease) (245,136) 39,367 $ (2,504,270) $ 406,921
===============================================================================
Class C
Shares sold 105,062 569,078 $ 1,078,695 $ 5,766,701
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends and
distributions 21,619 45,815 221,205 464,065
- -------------------------------------------------------------------------------
Shares redeemed (202,123) (697,215) (2,069,367) (7,036,754)
- -------------------------------------------------------------------------------
Net decrease (75,442) (82,322) $ (769,467) $ (805,988)
===============================================================================
Shares Amount
--------------------------- ------------------------------
Six Months Six Months
Ended Ended
March 31, Year Ended March 31, Year Ended
New Jersey 2004 September 30, 2004 September 30,
Portfolio (unaudited) 2003 (unaudited) 2003
- ----------------- ------------ ------------ -------------- --------------
Class A
Shares sold 147,505 861,030 $ 1,464,343 $ 8,492,836
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends and
distributions 106,825 248,238 1,056,725 2,434,833
- -------------------------------------------------------------------------------
Shares converted
from Class B 164,188 296,269 1,619,692 2,903,295
- -------------------------------------------------------------------------------
Shares redeemed (1,021,794) (2,528,374) (10,037,967) (24,709,104)
- -------------------------------------------------------------------------------
Net decrease (603,276) (1,122,837) $ (5,897,207) $(10,878,140)
===============================================================================
_______________________________________________________________________________
102 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Notes to Financial Statements
- -------------------------------------------------------------------------------
Shares Amount
--------------------------- ------------------------------
Six Months Six Months
Ended Ended
March 31, Year Ended March 31, Year Ended
New Jersey 2004 September 30, 2004 September 30,
Portfolio (unaudited) 2003 (unaudited) 2003
- ----------------- ------------ ------------ -------------- --------------
Class B
Shares sold 450,236 1,452,453 $ 4,448,736 $ 14,277,534
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends and
distributions 145,401 311,096 1,438,472 3,051,686
- -------------------------------------------------------------------------------
Shares converted
to Class A (164,188) (296,131) (1,619,692) (2,903,295)
- -------------------------------------------------------------------------------
Shares redeemed (1,577,700) (2,871,379) (15,570,463) (28,118,045)
- -------------------------------------------------------------------------------
Net decrease (1,146,251) (1,403,961) $(11,302,947) $(13,692,120)
===============================================================================
Class C
Shares sold 283,414 829,205 $ 2,799,705 $ 8,173,814
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends and
distributions 63,326 110,335 626,656 1,082,404
- -------------------------------------------------------------------------------
Shares redeemed (711,082) (1,892,807) (7,023,188) (18,498,818)
- -------------------------------------------------------------------------------
Net decrease (364,342) (953,267) $ (3,596,827) $ (9,242,600)
===============================================================================
Shares Amount
--------------------------- ------------------------------
Six Months Six Months
Ended Ended
March 31, Year Ended March 31, Year Ended
2004 September 30, 2004 September 30,
Ohio Portfolio (unaudited) 2003 (unaudited) 2003
- ----------------- ------------ ------------ -------------- --------------
Class A
Shares sold 1,103,585 2,603,274 $ 11,202,313 $ 25,899,491
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends and
distributions 106,911 199,426 1,082,811 1,988,084
- -------------------------------------------------------------------------------
Shares converted
from Class B 189,288 172,198 1,912,507 1,713,910
- -------------------------------------------------------------------------------
Shares redeemed (651,191) (2,508,279) (6,580,006) (25,071,704)
- -------------------------------------------------------------------------------
Net increase 748,593 466,619 $ 7,617,625 $ 4,529,781
===============================================================================
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 103
Notes to Financial Statements
- -------------------------------------------------------------------------------
Shares Amount
--------------------------- ------------------------------
Six Months Six Months
Ended Ended
March 31, Year Ended March 31, Year Ended
2004 September 30, 2004 September 30,
Ohio Portfolio (unaudited) 2003 (unaudited) 2003
- ----------------- ------------ ------------ -------------- --------------
Class B
Shares sold 441,769 2,465,948 $ 4,457,813 $ 24,633,328
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends and
distributions 114,405 206,715 1,157,686 2,059,278
- -------------------------------------------------------------------------------
Shares converted
to Class A (189,423) (172,295) (1,912,507) (1,713,910)
- -------------------------------------------------------------------------------
Shares redeemed (725,374) (1,496,841) (7,332,115) (14,892,000)
- -------------------------------------------------------------------------------
Net increase
(decrease) (358,623) 1,003,527 $ (3,629,123) $ 10,086,696
===============================================================================
Class C
Shares sold 481,697 1,239,667 $ 4,880,167 $ 12,353,373
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends and
distributions 67,337 121,614 681,651 1,211,607
- -------------------------------------------------------------------------------
Shares redeemed (681,256) (1,357,263) (6,871,580) (13,501,185)
- -------------------------------------------------------------------------------
Net increase
(decrease) (132,222) 4,018 $ (1,309,762) $ 63,795
===============================================================================
Shares Amount
--------------------------- ------------------------------
Six Months Six Months
Ended Ended
March 31, Year Ended March 31, Year Ended
Pennsylvania 2004 September 30, 2004 September 30,
Portfolio (unaudited) 2003 (unaudited) 2003
- ----------------- ------------ ------------ -------------- --------------
Class A
Shares sold 349,615 1,094,863 $ 3,685,211 $ 11,376,438
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends and
distributions 115,470 235,272 1,215,898 2,446,438
- -------------------------------------------------------------------------------
Shares converted
from Class B 145,460 231,532 1,536,690 2,409,452
- -------------------------------------------------------------------------------
Shares redeemed (901,409) (2,911,085) (9,482,873) (30,201,600)
- -------------------------------------------------------------------------------
Net decrease (290,864) (1,349,418) $ (3,045,074) $(13,969,272)
===============================================================================
_______________________________________________________________________________
104 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Notes to Financial Statements
- -------------------------------------------------------------------------------
Shares Amount
--------------------------- ------------------------------
Six Months Six Months
Ended Ended
March 31, Year Ended March 31, Year Ended
Pennsylvania 2004 September 30, 2004 September 30,
Portfolio (unaudited) 2003 (unaudited) 2003
- ----------------- ------------ ------------ -------------- --------------
Class B
Shares sold 304,781 999,144 $ 3,213,620 $ 10,404,804
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends and
distributions 86,630 178,092 912,343 1,851,843
- -------------------------------------------------------------------------------
Shares converted
to Class A (145,460) (231,602) (1,536,690) (2,409,452)
- -------------------------------------------------------------------------------
Shares redeemed (702,908) (1,427,501) (7,382,838) (14,814,384)
- -------------------------------------------------------------------------------
Net decrease (456,957) (481,867) $ (4,793,565) $ (4,967,189)
===============================================================================
Class C
Shares sold 258,736 1,637,095 $ 2,720,246 $ 17,074,975
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends and
distributions 53,004 89,478 558,834 930,510
- -------------------------------------------------------------------------------
Shares redeemed (524,417) (1,993,349) (5,513,866) (20,705,235)
- -------------------------------------------------------------------------------
Net decrease (212,677) (266,776) $ (2,234,786) $ (2,699,750)
===============================================================================
Shares Amount
--------------------------- ------------------------------
Six Months Six Months
Ended Ended
March 31, Year Ended March 31, Year Ended
Virginia 2004 September 30, 2004 September 30,
Portfolio (unaudited) 2003 (unaudited) 2003
- ----------------- ------------ ------------ -------------- --------------
Class A
Shares sold 360,553 1,352,646 $ 3,901,966 $ 14,420,413
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends and
distributions 82,439 171,440 892,646 1,827,604
- -------------------------------------------------------------------------------
Shares converted
from Class B 82,115 101,969 888,968 1,084,332
- -------------------------------------------------------------------------------
Shares redeemed (1,354,111) (2,099,352) (14,653,619) (22,290,612)
- -------------------------------------------------------------------------------
Net decrease (829,004) (473,297) $ (8,970,039) $ (4,958,263)
===============================================================================
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 105
Notes to Financial Statements
- -------------------------------------------------------------------------------
Shares Amount
--------------------------- ------------------------------
Six Months Six Months
Ended Ended
March 31, Year Ended March 31, Year Ended
Virginia 2004 September 30, 2004 September 30,
Portfolio (unaudited) 2003 (unaudited) 2003
- ----------------- ------------ ------------ -------------- --------------
Class B
Shares sold 167,974 1,015,640 $ 1,810,643 $ 10,803,064
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends and
distributions 104,403 212,663 1,128,296 2,263,825
- -------------------------------------------------------------------------------
Shares converted
to Class A (82,277) (102,150) (888,968) (1,084,332)
- -------------------------------------------------------------------------------
Shares redeemed (785,693) (1,419,317) (8,462,002) (15,089,094)
- -------------------------------------------------------------------------------
Net decrease (595,593) (293,164) $ (6,412,031) $ (3,106,537)
===============================================================================
Class C
Shares sold 157,141 883,023 $ 1,695,160 $ 9,389,967
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends and
distributions 40,580 81,150 438,326 863,754
- -------------------------------------------------------------------------------
Shares redeemed (413,214) (1,043,431) (4,454,776) (11,092,067)
- -------------------------------------------------------------------------------
Net decrease (215,493) (79,258) $ (2,321,290) $ (838,346)
===============================================================================
NOTE F
Joint Credit Facility
A number of open-end mutual funds managed by the Adviser, including the Fund,
participate in a $500 million revolving credit facility (the "Facility")
intended to provide short-term financing if necessary, subject to certain
restrictions, in connection with abnormal redemption activity. Commitment fees
related to the Facility are paid by the participating funds and are included in
miscellaneous expenses in the statement of operations. The Fund did not utilize
the Facility during the six months ended March 31, 2004.
NOTE G
Distributions To Shareholders
The tax character of distributions to be paid for the year ending September 30,
2004 will be determined at the end of the current fiscal year.
_______________________________________________________________________________
106 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Notes to Financial Statements
- -------------------------------------------------------------------------------
The tax character of distributions paid during the fiscal years ended September
30, 2003 and September 30, 2002 were as follows:
Arizona Portfolio 2003 2002
============= =============
Distributions paid from:
Tax-exempt income $ 9,824,490 $ 8,437,580
Ordinary income 45,555 544,194
------------- -------------
Total distributions paid $ 9,870,045 $ 8,891,774(a)
============= =============
As of September 30, 2003, the components of accumulated earnings/(deficit) on a
tax basis were as follows:
Accumulated capital and other losses $ (3,255,761)(b)
Unrealized appreciation/(depreciation) 5,119,373(c)
-------------
Total accumulated earnings/(deficit) $ 1,863,612
=============
(a) Total distributions paid differs from the Statement of Changes in Net
Assets because for tax purposes dividends are recognized when actually paid.
(b) On September 30, 2003, the Portfolio had a net capital loss carryforward
for federal income tax purposes of $2,832,511 of which $2,361,378 expires in
the year 2008, $383,250 expires in the year 2010 and $87,883 expires in the
year 2011. To the extent future capital gains are offset by capital loss
carryforwards, such gains will not be distributed. Net capital losses incurred
after October 31, and within the taxable year are deemed to arise on the first
business day of the Portfolio's next taxable year. For the year ended September
30, 2003, the Portfolio deferred to October 1, 2003 post October capital losses
of $423,250.
(c) The differences between book-basis and tax-basis unrealized
appreciation/(depreciation) are attributable primarily to the tax deferral of
losses on wash sales and the realization for tax purposes of gains/losses on
certain derivative instruments.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 107
Notes to Financial Statements
- -------------------------------------------------------------------------------
Florida Portfolio 2003 2002
============= =============
Distributions paid from:
Tax-exempt income $ 12,070,402 $ 11,517,304
Ordinary income 623,345 -0-
------------- -------------
Total distributions paid $ 12,693,747 $ 11,517,304(a)
============= =============
As of September 30, 2003, the components of accumulated earnings/(deficit) on a
tax basis were as follows:
Accumulated capital and other losses $ (10,942,485)(b)
Unrealized appreciation/(depreciation) 10,259,910(c)
-------------
Total accumulated earnings/(deficit) $ (682,575)
=============
(a) Total distributions paid differs from the Statement of Changes in Net
Assets because for tax purposes dividends are recognized when actually paid.
(b) On September 30, 2003, the Portfolio had a net capital loss carryforward
for federal income tax purposes of $10,942,485 of which $4,853 expires in the
year 2007, $7,457,727 expires in the year 2008, $3,475,986 expires in the year
2009 and $3,919 expires in the year 2010. To the extent future capital gains
are offset by capital loss carryforwards, such gains will not be distributed.
During the fiscal year ended September 30, 2003, the Portfolio utilized capital
loss carryforwards of $1,245,058 and $2,686,148 of capital loss carryforward
expired.
(c) The differences between book-basis and tax-basis unrealized
appreciation/(depreciation) are attributable primarily to the tax deferral of
losses on wash sales and the realization for tax purposes of gains/losses on
certain derivative instruments.
_______________________________________________________________________________
108 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Notes to Financial Statements
- -------------------------------------------------------------------------------
Massachusetts Portfolio 2003 2002
============= =============
Distributions paid from:
Tax-exempt income $ 7,469,629 $ 8,395,533
Ordinary income 295,469 402,082
------------- -------------
Total distributions paid $ 7,765,098 $ 8,797,615(a)
============= =============
As of September 30, 2003, the components of accumulated earnings/(deficit) on a
tax basis were as follows:
Accumulated capital and other losses $ (11,914,008)(b)
Unrealized appreciation/(depreciation) 7,399,242(c)
-------------
Total accumulated earnings/(deficit) $ (4,514,766)
=============
(a) Total distributions paid differs from the Statement of Changes in Net
Assets because for tax purposes dividends are recognized when actually paid.
(b) On September 30, 2003, the Portfolio had a net capital loss carryforward
for federal income tax purposes of $11,026,645 of which $7,248,317 expires in
the year 2008, $1,585,051 expires in the year 2009 and $2,193,277 expires in
the year 2011. To the extent future capital gains are offset by capital loss
carryforwards, such gains will not be distributed. Net capital losses incurred
after October 31, and within the taxable year are deemed to arise on the first
business day of the Portfolio's next taxable year. For the fiscal year ended
September 30, 2003, the Portfolio deferred to October 1, 2003 post October
capital losses of $873,506. For the year ended September 30, 2003, the Fund
deferred losses on straddles of $13,857.
(c) The differences between book-basis and tax-basis unrealized
appreciation/(depreciation) are attributable primarily to the tax deferral of
losses on wash sales and the realization for tax purposes of gains/losses on
certain derivative instruments.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 109
Notes to Financial Statements
- -------------------------------------------------------------------------------
Michigan Portfolio 2003 2002
============= =============
Distributions paid from:
Tax-exempt income $ 6,797,816 $ 5,083,500
Ordinary income 548,644 401,029
------------- -------------
Total distributions paid $ 7,346,460 $ 5,484,529(a)
============= =============
As of September 30, 2003, the components of accumulated earnings/(deficit) on a
tax basis were as follows:
Accumulated capital and other losses $ (330,049)(b)
Unrealized appreciation/(depreciation) 4,248,596(c)
-------------
Total accumulated earnings/(deficit) $ 3,918,547
=============
(a) Total distributions paid differs from the Statement of Changes in Net
Assets because for tax purposes dividends are recognized when actually paid.
(b) On September 30, 2003, the Portfolio had a net capital loss carryforward
for federal income tax purposes of $184,017, all of which expires in the year
2008. To the extent future capital gains are offset by capital loss
carryforwards, such gains will not be distributed. During the fiscal year, the
Portfolio utilized capital loss carryforwards of $149,164. Net capital losses
incurred after October 31, and within the taxable year are deemed to arise on
the first business day of the Portfolio's next taxable year. For the fiscal
year ended September 30, 2003, the Portfolio deferred to October 1, 2003 post
October capital losses of $146,032.
(c) The differences between book-basis and tax-basis unrealized
appreciation/(depreciation) are attributable primarily to the tax deferral of
losses on wash sales and the realization for tax purposes of gains/losses on
certain derivative instruments.
_______________________________________________________________________________
110 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Notes to Financial Statements
- -------------------------------------------------------------------------------
Minnesota Portfolio 2003 2002
============= =============
Distributions paid from:
Tax-exempt income $ 4,505,786 $ 3,906,351
Ordinary income 210,091 170,915
------------- -------------
Total distributions paid $ 4,715,877 $ 4,077,266(a)
============= =============
As of September 30, 2003, the components of accumulated earnings/(deficit) on a
tax basis were as follows:
Accumulated capital and other losses $ (1,931,050)(b)
Unrealized appreciation/(depreciation) 3,883,179(c)
-------------
Total accumulated earnings/(deficit) $ 1,952,129
=============
(a) Total distributions paid differs from the Statement of Changes in Net
Assets because for tax purposes dividends are recognized when actually paid.
(b) On September 30, 2003, the Portfolio had a net capital loss carryforward
for federal income tax purposes of $1,931,050 of which $492,981 expires in the
year 2004, $1,051,696 expires in the year 2008, $160,146 expires in the year
2009, $46,432 expires in the year 2010 and $179,795 expires in the year 2011.
To the extent future capital gains are offset by capital loss carryforwards,
such gains will not be distributed. During the fiscal year ended September 30,
2003, $650,584 of capital loss carryforward expired.
(c) The difference between book-basis and tax-basis unrealized
appreciation/(depreciation) is attributable primarily to the tax deferral of
losses on wash sales.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 111
Notes to Financial Statements
- -------------------------------------------------------------------------------
New Jersey Portfolio 2003 2002
============= =============
Distributions paid from:
Tax-exempt income $ 10,317,045 $ 11,347,913
Ordinary income 530,987 808,169
------------- -------------
Total distributions paid $ 10,848,032 $ 12,156,082(a)
============= =============
As of September 30, 2003, the components of accumulated earnings/(deficit) on a
tax basis were as follows:
Accumulated capital and other losses $ (15,675,246)(b)
Unrealized appreciation/(depreciation) 9,087,556(c)
-------------
Total accumulated earnings/(deficit) $ (6,587,690)
=============
(a) Total distributions paid differs from the Statement of Changes in Net
Assets because for tax purposes dividends are recognized when actually paid.
(b) On September 30, 2003, the Portfolio had a net capital loss carryforward
for federal income tax purposes of $15,060,118 of which $349,704 expires in the
year 2004, $3,327,295 expires in the year 2008, $1,077,263 expires in the year
2009, $4,688,584 expires in the year 2010 and $5,617,272 expires in the year
2011. To the extent future capital gains are offset by capital loss
carryforwards, such gains will not be distributed. During the fiscal year ended
September 30, 2003, $3,051,602 of capital loss carryforward expired. Net
capital losses incurred after October 31, and within the taxable year are
deemed to arise on the first business day of the Portfolio's next taxable year.
For the fiscal year ended September 30, 2003, the Portfolio deferred to October
1, 2003 post October capital losses of $598,372. For the year ended September
30, 2003, the Portfolio deferred losses on straddles of $16,756.
(c) The differences between book-basis and tax-basis unrealized
appreciation/(depreciation) are attributable primarily to the tax deferral of
losses on wash sales and the realization for tax purposes of gains/losses on
certain derivative instruments.
_______________________________________________________________________________
112 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Notes to Financial Statements
- -------------------------------------------------------------------------------
Ohio Portfolio 2003 2002
============= =============
Distributions paid from:
Tax-exempt income $ 8,483,968 $ 7,932,576
Ordinary income 485,719 207,602
------------- -------------
Total distributions paid $ 8,969,687 $ 8,140,178(a)
============= =============
As of September 30, 2003, the components of accumulated earnings/(deficit) on a
tax basis were as follows:
Accumulated capital and other losses $ (9,257,559)(b)
Unrealized appreciation/(depreciation) 8,335,176(c)
-------------
Total accumulated earnings/(deficit) $ (922,383)
=============
(a) Total distributions paid differs from the Statement of Changes in Net
Assets because for tax purposes dividends are recognized when actually paid.
(b) On September 30, 2003, the Portfolio had a net capital loss carryforward
for federal income tax purposes of $8,082,743 of which $332,000 expires in the
year 2004, $2,491,530 expires in the year 2008, $1,639,021 expires in the year
2009 and $3,620,192 expires in the year 2011. To the extent future capital
gains are offset by capital loss carryforwards, such gains will not be
distributed. During the fiscal year ended September 30, 2003, $666,075 of
capital loss carryforward expired. Net capital losses incurred after October
31, and within the taxable year are deemed to arise on the first business day
of the Fund's next taxable year. For the fiscal year ended September 30, 2003,
the Portfolio deferred to October 1, 2003 post October capital losses of
$1,174,816.
(c) The differences between book-basis and tax-basis unrealized
appreciation/(depreciation) are attributable primarily to the tax deferral of
losses on wash sales and the realization for tax purposes of gains/losses on
certain derivative instruments.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 113
Notes to Financial Statements
- -------------------------------------------------------------------------------
Pennsylvania Portfolio 2003 2002
============= =============
Distributions paid from:
Tax-exempt income $ 9,195,254 $ 9,281,173
Ordinary income 77,465 304,732
------------- -------------
Total distributions paid $ 9,272,719 $ 9,585,905(a)
============= =============
As of September 30, 2003, the components of accumulated earnings/(deficit) on a
tax basis were as follows:
Undistributed Tax Exempt Income $ 62,329
Accumulated capital and other losses (7,824,082)(b)
Unrealized appreciation/(depreciation) 11,174,349(c)
-------------
Total accumulated earnings/(deficit) $ 3,412,596
=============
(a) Total distributions paid differs from the Statement of Changes in Net
Assets because for tax purposes dividends are recognized when actually paid.
(b) On September 30, 2003, the Portfolio had a net capital loss carryforward
for federal income tax purposes of $7,283,902 of which $6,563,370 expires in
the year 2008, $274,791 expires in the year 2010 and $445,741 expires in the
year 2011. To the extent future capital gains are offset by capital loss
carryforwards, such gains will not be distributed. Net capital losses incurred
after October 31, and within the taxable year are deemed to arise on the first
business day of the Portfolio's next taxable year. For the fiscal year ended
September 30, 2003, the Portfolio deferred to October 1, 2003 post October
capital losses of $540,180.
(c) The difference between book-basis and tax-basis unrealized
appreciation/(depreciation) is attributable primarily to the tax deferral of
losses on wash sales.
_______________________________________________________________________________
114 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Notes to Financial Statements
- -------------------------------------------------------------------------------
Virginia Portfolio 2003 2002
============= =============
Distributions paid from:
Tax-exempt income $ 8,410,172 $ 7,722,633
Ordinary income 39,132 281,521
------------- -------------
Total distributions paid $ 8,449,304 $ 8,004,154(a)
============= =============
As of September 30, 2003, the components of accumulated earnings/(deficit) on a
tax basis were as follows:
Undistributed Tax Exempt Income $ 196,699
Accumulated capital and other losses (4,687,154)(b)
Unrealized appreciation/(depreciation) 8,072,044(c)
-------------
Total accumulated earnings/(deficit) $ 3,581,589
=============
(a) Total distributions paid differs from the Statement of Changes in Net
Assets because for tax purposes dividends are recognized when actually paid.
(b) On September 30, 2003, the Portfolio had a net capital loss carryforward
for federal income tax purposes of $4,687,154 of which $2,693,378 expires in
the year 2008, $1,200,330 expires in the year 2009 and $793,446 expires in the
year 2010. To the extent future capital gains are offset by capital loss
carryforwards, such gains will not be distributed. During the fiscal year ended
September 30, 2003, the Portfolio utilized capital loss carryforwards of
$1,284,755.
(c) The differences between book-basis and tax-basis unrealized
appreciation/(depreciation) are attributable primarily to the tax deferral of
losses on wash sales and the realization for tax purposes of gains/losses on
certain derivative instruments.
NOTE H
Concentration of Credit Risk
The Portfolios of the AllianceBernstein Municipal Income Fund II are State
Portfolios that may invest a large portion of their assets in a particular
state's municipal securities and their various political subdivisions, and the
performance of each of these Portfolios may be closely tied to economic
conditions within the applicable state and the financial condition of that
state and its agencies and municipalities.
NOTE I
Legal Proceedings
As has been previously reported in the press, the Staff of the U.S. Securities
and Exchange Commission ("SEC") and the NYAG have been investigating practices
in the mutual fund industry identified as "market timing" and "late trading" of
mutual fund shares. Certain other regulatory authorities have also been
conducting investigations into these practices within the industry and have
requested that Alliance Capital Management L.P. ("Alliance Capital"), the
Fund's Adviser, provide information to them. Alliance Capital has been
cooperating and will continue to cooperate with all of these authorities.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 115
Notes to Financial Statements
- -------------------------------------------------------------------------------
On December 18, 2003, Alliance Capital confirmed that it had reached terms with
the SEC and the NYAG for the resolution of regulatory claims relating to the
practice of "market timing" mutual fund shares in some of the AllianceBernstein
Mutual Funds. The agreement with the SEC is reflected in an Order of the
Commission ("SEC Order"). The agreement with the NYAG is subject to final,
definitive documentation. Among the key provisions of these agreements are the
following:
(i) Alliance Capital agreed to establish a $250 million fund (the
"Reimbursement Fund") to compensate mutual fund shareholders for the adverse
effects of market timing attributable to market timing relationships described
in the SEC Order. According to the SEC Order, the Reimbursement Fund is to be
paid, in order of priority, to fund investors based on (i) their aliquot share
of losses suffered by the fund due to market timing, and (ii) a proportionate
share of advisory fees paid by such fund during the period of such market
timing;
(ii) Alliance Capital agreed to reduce the advisory fees it receives from some
of the AllianceBernstein long-term, open-end retail funds, commencing January
1, 2004, for a period of at least five years. The determination of which funds
will have their fees reduced and to what degree is subject to the terms of the
definitive agreement with the NYAG; and
(iii) Alliance Capital agreed to implement changes to its governance and
compliance procedures. Additionally, the SEC Order contemplates that Alliance
Capital's registered investment company clients, including the Fund, will
introduce governance and compliance changes.
In anticipation of final, definitive documentation and effective January 1,
2004, the Adviser began waiving a portion of its advisory fees. For a more
complete description of this waiver, please see "Advisory Fee and Other
Transactions with Affiliates" above.
The special committee of Alliance Capital's Board of Directors, comprised of
the members of Alliance Capital's Audit Committee and the other independent
member of the Board, is continuing to direct and oversee an internal
investigation and a comprehensive review of the facts and circumstances
relevant to the SEC's and the NYAG's investigations.
In addition, the Independent Directors of the Fund ("the Independent
Directors") have initiated an investigation of the above-mentioned matters with
the advice of an independent economic consultant and independent counsel. The
Independent Directors have formed a special committee to supervise the
investigation.
_______________________________________________________________________________
116 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Notes to Financial Statements
- -------------------------------------------------------------------------------
On October 2, 2003, a putative class action complaint entitled Hindo et
al. v. AllianceBernstein Growth & Income Fund et al. (the "Hindo Complaint")
was filed against Alliance Capital; Alliance Capital Management Holding L.P.;
Alliance Capital Management Corporation; AXA Financial, Inc.; certain of the
AllianceBernstein Mutual Funds, including the Fund; Gerald Malone; Charles
Schaffran (collectively, the "Alliance Capital defendants"); and certain other
defendants not affiliated with Alliance Capital. The Hindo Complaint was filed
in the United States District Court for the Southern District of New York by
alleged shareholders of two of the AllianceBernstein Mutual Funds. The Hindo
Complaint alleges that certain of the Alliance Capital defendants failed to
disclose that they improperly allowed certain hedge funds and other
unidentified parties to engage in late trading and market timing of
AllianceBernstein Fund securities, violating Sections 11 and 15 of the
Securities Act, Sections 10(b) and 20(a) of the Exchange Act, and Sections 206
and 215 of the Advisers Act. Plaintiffs seek an unspecified amount of
compensatory damages and rescission of their contracts with Alliance Capital,
including recovery of all fees paid to Alliance Capital pursuant to such
contracts.
Since October 2, 2003, numerous additional lawsuits making factual allegations
similar to those in the Hindo Complaint were filed against Alliance Capital and
certain other defendants, some of which name the Fund as a defendant. All of
these lawsuits seek an unspecified amount of damages.
As a result of the matters discussed above, investors in the AllianceBernstein
Mutual Funds may choose to redeem their investments. This may require the
AllianceBernstein Mutual Funds to sell investments held by those funds to
provide for sufficient liquidity and could also have an adverse effect on the
investment performance of the AllianceBernstein Mutual Funds.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 117
Financial Highlights
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Arizona Portfolio
----------------------------------------------------------------------------
Class A
----------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2004 ---------------------------------------------------------------
(unaudited) 2003 2002 2001 2000 1999
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $10.76 $11.02 $10.80 $10.47 $10.40 $11.03
INCOME FROM INVESTMENT
OPERATIONS
Net investment income(a)(b) .25 .51 .51 .54 .55 .51
Net realized and unrealized
gain (loss) on investment
transactions .19 (.26) .26 .34 .07 (.55)
Net increase (decrease) in
net asset value from
operations .44 .25 .77 .88 .62 (.04)
LESS: DIVIDENDS AND
DISTRIBUTIONS
Dividends from net
investment income (.25) (.51) (.51) (.54) (.55) (.51)
Distributions in excess of
net investment income -0- -0- (.04) (.01) -0- (.04)
Distributions from net
realized gains -0- -0- -0- -0- -0- (.04)
Total dividends and
distributions (.25) (.51) (.55) (.55) (.55) (.59)
Net asset value,
end of period $10.95 $10.76 $11.02 $10.80 $10.47 $10.40
TOTAL RETURN
Total investment return based
on net asset value(c) 4.16% 2.35% 7.33% 8.56% 6.17% (.45)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $104,945 $101,040 $121,245 $88,261 $47,258 $38,472
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements .78%(d) .78% .78% .78% .78% .78%
Expenses, before waivers/
reimbursements 1.14%(d) 1.11% 1.12% 1.22% 1.29% 1.39%
Net investment income,
net of waivers/
reimbursements 4.66%(d) 4.72% 4.73% 5.08% 5.33% 4.74%
Portfolio turnover rate 12% 28% 11% 119% 199% 217%
See footnote summary on page 144.
_______________________________________________________________________________
118 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Financial Highlights
- -------------------------------------------------------------------------------
Arizona Portfolio
----------------------------------------------------------------------------
Class B
----------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2004 ---------------------------------------------------------------
(unaudited) 2003 2002 2001 2000 1999
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $10.74 $11.00 $10.78 $10.46 $10.39 $11.03
INCOME FROM INVESTMENT
OPERATIONS
Net investment income(a)(b) .22 .43 .43 .47 .48 .43
Net realized and unrealized
gain (loss) on investment
transactions .19 (.26) .27 .33 .07 (.55)
Net increase (decrease) in
net asset value from
operations .41 .17 .70 .80 .55 (.12)
LESS: DIVIDENDS AND
DISTRIBUTIONS
Dividends from net
investment income (.21) (.43) (.43) (.47) (.48) (.43)
Distributions in excess of
net investment income -0- -0- (.05) (.01) -0- (.05)
Distributions from net
realized gains -0- -0- -0- -0- -0- (.04)
Total dividends and
distributions (.21) (.43) (.48) (.48) (.48) (.52)
Net asset value,
end of period $10.94 $10.74 $11.00 $10.78 $10.46 $10.39
TOTAL RETURN
Total investment return based
on net asset value(c) 3.89% 1.62% 6.65% 7.76% 5.45% (1.19)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $86,312 $89,938 $92,349 $56,024 $34,232 $31,242
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.48%(d) 1.48% 1.48% 1.48% 1.48% 1.48%
Expenses, before waivers/
reimbursements 1.85%(d) 1.82% 1.82% 1.93% 1.99% 2.16%
Net investment income,
net of waivers/
reimbursements 3.97%(d) 4.03% 4.02% 4.41% 4.63% 4.05%
Portfolio turnover rate 12% 28% 11% 119% 199% 217%
See footnote summary on page 144.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 119
Financial Highlights
- -------------------------------------------------------------------------------
Arizona Portfolio
----------------------------------------------------------------------------
Class C
----------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2004 ---------------------------------------------------------------
(unaudited) 2003 2002 2001 2000 1999
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $10.74 $11.00 $10.78 $10.46 $10.39 $11.03
INCOME FROM INVESTMENT
OPERATIONS
Net investment income(a)(b) .22 .43 .43 .47 .48 .43
Net realized and unrealized
gain (loss) on investment
transactions .19 (.26) .27 .33 .07 (.55)
Net increase (decrease)
in net asset value
from operations .41 .17 .70 .80 .55 (.12)
LESS: DIVIDENDS AND
DISTRIBUTIONS
Dividends from net
investment income (.21) (.43) (.43) (.47) (.48) (.43)
Distributions in excess of
net investment income -0- -0- (.05) (.01) -0- (.05)
Distributions from net
realized gains -0- -0- -0- -0- -0- (.04)
Total dividends and
distributions (.21) (.43) (.48) (.48) (.48) (.52)
Net asset value,
end of period $10.94 $10.74 $11.00 $10.78 $10.46 $10.39
TOTAL RETURN
Total investment return based
on net asset value(c) 3.89% 1.62% 6.65% 7.76% 5.45% (1.19)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $22,809 $25,110 $24,258 $13,407 $8,941 $9,368
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.48%(d) 1.48% 1.48% 1.48% 1.48% 1.48%
Expenses, before waivers/
reimbursements 1.85%(d) 1.82% 1.82% 1.93% 1.99% 2.17%
Net investment income,
net of waivers/
reimbursements 3.97%(d) 4.03% 4.00% 4.43% 4.64% 4.05%
Portfolio turnover rate 12% 28% 11% 119% 199% 217%
See footnote summary on page 144.
_______________________________________________________________________________
120 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Financial Highlights
- -------------------------------------------------------------------------------
Florida Portfolio
----------------------------------------------------------------------------
Class A
----------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2004 ---------------------------------------------------------------
(unaudited) 2003 2002 2001 2000 1999
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $10.17 $10.34 $10.16 $9.76 $9.81 $10.48
INCOME FROM INVESTMENT
OPERATIONS
Net investment income(a)(b) .25 .49 .52 .53 .53 .51
Net realized and unrealized
gain (loss) on investment
transactions .15 (.13) .19 .40 (.05) (.65)
Net increase (decrease)
in net asset value
from operations .40 .36 .71 .93 .48 (.14)
LESS: DIVIDENDS AND
DISTRIBUTIONS
Dividends from net
investment income (.25) (.53) (.52) (.53) (.53) (.51)
Distributions in excess of
net investment income -0- -0- (.01) -0- -0- (.02)
Total dividends and
distributions (.25) (.53) (.53) (.53) (.53) (.53)
Net asset value,
end of period $10.32 $10.17 $10.34 $10.16 $9.76 $9.81
TOTAL RETURN
Total investment return based
on net asset value(c) 3.95% 3.54% 7.21% 9.71% 5.10% (1.38)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $105,934 $109,543 $109,373 $97,714 $75,422 $79,752
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements .78%(d) .78% .78% .78% .73% .73%
Expenses, before waivers/
reimbursements 1.11%(d) 1.11% 1.09% 1.13% 1.14% 1.18%
Net investment income,
net of waivers/
reimbursements 4.76%(d) 4.80% 5.18% 5.33% 5.52% 4.94%
Portfolio turnover rate 10% 30% 20% 70% 281% 244%
See footnote summary on page 144.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 121
Financial Highlights
- -------------------------------------------------------------------------------
Florida Portfolio
----------------------------------------------------------------------------
Class B
----------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2004 ---------------------------------------------------------------
(unaudited) 2003 2002 2001 2000 1999
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $10.18 $10.35 $10.17 $9.77 $9.81 $10.48
INCOME FROM INVESTMENT
OPERATIONS
Net investment income(a)(b) .21 .42 .45 .46 .46 .43
Net realized and unrealized
gain (loss) on investment
transactions .14 (.14) .18 .39 (.05) (.64)
Net increase (decrease)
in net asset value
from operations .35 .28 .63 .85 .41 (.21)
LESS: DIVIDENDS AND
DISTRIBUTIONS
Dividends from net
investment income (.21) (.45) (.45) (.45) (.45) (.43)
Distributions in excess of
net investment income -0- -0- -0- -0- -0- (.03)
Total dividends and
distributions (.21) (.45) (.45) (.45) (.45) (.46)
Net asset value,
end of period $10.32 $10.18 $10.35 $10.17 $9.77 $9.81
TOTAL RETURN
Total investment return based
on net asset value(c) 3.60% 2.82% 6.45% 8.92% 4.43% (2.06)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $96,699 $104,874 $105,583 $87,603 $65,391 $67,532
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.48%(d) 1.48% 1.48% 1.48% 1.43% 1.43%
Expenses, before waivers/
reimbursements 1.82%(d) 1.81% 1.79% 1.84% 1.85% 1.91%
Net investment income,
net of waivers/
reimbursements 4.06%(d) 4.09% 4.47% 4.62% 4.82% 4.25%
Portfolio turnover rate 10% 30% 20% 70% 281% 244%
See footnote summary on page 144.
_______________________________________________________________________________
122 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Financial Highlights
- -------------------------------------------------------------------------------
Florida Portfolio
----------------------------------------------------------------------------
Class C
----------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2004 ---------------------------------------------------------------
(unaudited) 2003 2002 2001 2000 1999
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $10.18 $10.35 $10.17 $9.77 $9.81 $10.48
INCOME FROM INVESTMENT
OPERATIONS
Net investment income(a)(b) .21 .42 .45 .46 .46 .43
Net realized and unrealized
gain (loss) on investment
transactions .14 (.14) .18 .39 (.05) (.64)
Net increase (decrease)
in net asset value
from operations .35 .28 .63 .85 .41 (.21)
LESS: DIVIDENDS AND
DISTRIBUTIONS
Dividends from net
investment income (.21) (.45) (.45) (.45) (.45) (.43)
Distributions in excess of
net investment income -0- -0- -0- -0- -0- (.03)
Total dividends and
distributions (.21) (.45) (.45) (.45) (.45) (.46)
Net asset value,
end of period $10.32 $10.18 $10.35 $10.17 $9.77 $9.81
TOTAL RETURN
Total investment return based
on net asset value(c) 3.60% 2.82% 6.45% 8.93% 4.43% (2.06)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $43,394 $46,929 $49,102 $40,360 $38,464 $42,169
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.48%(d) 1.48% 1.48% 1.48% 1.43% 1.43%
Expenses, before waivers/
reimbursements 1.81%(d) 1.81% 1.79% 1.83% 1.85% 1.91%
Net investment income,
net of waivers/
reimbursements 4.06%(d) 4.09% 4.47% 4.64% 4.83% 4.24%
Portfolio turnover rate 10% 30% 20% 70% 281% 244%
See footnote summary on page 144.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 123
Financial Highlights
- -------------------------------------------------------------------------------
Massachusetts Portfolio
----------------------------------------------------------------------------
Class A
----------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2004 ---------------------------------------------------------------
(unaudited) 2003 2002 2001 2000 1999
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $10.79 $11.06 $11.05 $10.59 $10.66 $11.39
INCOME FROM INVESTMENT
OPERATIONS
Net investment income(a)(b) .25 .51 .54 .56 .58 .53
Net realized and unrealized
gain (loss) on investment
transactions .16 (.26) .04 .47 (.09) (.66)
Net increase (decrease)
in net asset value
from operations .41 .25 .58 1.03 .49 (.13)
LESS: DIVIDENDS AND
DISTRIBUTIONS
Dividends from net
investment income (.26) (.52) (.54) (.56) (.56) (.53)
Distributions in excess of
net investment income -0- -0- (.03) (.01) -0- (.04)
Distributions from net
realized gains -0- -0- -0- -0- -0- (.03)
Total dividends and
distributions (.26) (.52) (.57) (.57) (.56) (.60)
Net asset value,
end of period $10.94 $10.79 $11.06 $11.05 $10.59 $10.66
TOTAL RETURN
Total investment return based
on net asset value(c) 3.86% 2.39% 5.46% 9.92% 4.86% (1.24)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $40,288 $46,342 $66,197 $63,384 $45,418 $44,758
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements .82%(d) .82% .82% .82% .77% .72%
Expenses, before waivers/
reimbursements 1.20%(d) 1.17% 1.12% 1.19% 1.63% 1.24%
Net investment income,
net of waivers/
reimbursements 4.68%(d) 4.71% 4.97% 5.20% 5.53% 4.74%
Portfolio turnover rate 22% 28% 27% 108% 389% 303%
See footnote summary on page 144.
_______________________________________________________________________________
124 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Financial Highlights
- -------------------------------------------------------------------------------
Massachusetts Portfolio
----------------------------------------------------------------------------
Class B
----------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2004 ---------------------------------------------------------------
(unaudited) 2003 2002 2001 2000 1999
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $10.77 $11.03 $11.03 $10.57 $10.65 $11.38
INCOME FROM INVESTMENT
OPERATIONS
Net investment income(a)(b) .22 .44 .47 .49 .50 .45
Net realized and unrealized
gain (loss) on investment
transactions .15 (.25) .03 .47 (.09) (.65)
Net increase (decrease)
in net asset value
from operations .37 .19 .50 .96 .41 (.20)
LESS: DIVIDENDS AND
DISTRIBUTIONS
Dividends from net
investment income (.22) (.45) (.47) (.49) (.49) (.45)
Distributions in excess of
net investment income -0- -0- (.03) (.01) -0- (.05)
Distributions from net
realized gains -0- -0- -0- -0- -0- (.03)
Total dividends and
distributions (.22) (.45) (.50) (.50) (.49) (.53)
Net asset value,
end of period $10.92 $10.77 $11.03 $11.03 $10.57 $10.65
TOTAL RETURN
Total investment return based
on net asset value(c) 3.49% 1.76% 4.69% 9.22% 4.06% (1.87)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $72,393 $73,979 $79,216 $62,190 $39,964 $42,628
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.52%(d) 1.52% 1.52% 1.52% 1.47% 1.42%
Expenses, before waivers/
reimbursements 1.90%(d) 1.89% 1.83% 1.90% 1.94% 1.97%
Net investment income,
net of waivers/
reimbursements 3.98%(d) 4.02% 4.28% 4.53% 4.83% 4.06%
Portfolio turnover rate 22% 28% 27% 108% 389% 303%
See footnote summary on page 144.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 125
Financial Highlights
- -------------------------------------------------------------------------------
Massachusetts Portfolio
----------------------------------------------------------------------------
Class C
----------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2004 ---------------------------------------------------------------
(unaudited) 2003 2002 2001 2000 1999
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $10.77 $11.03 $11.03 $10.57 $10.65 $11.38
INCOME FROM INVESTMENT
OPERATIONS
Net investment income(a)(b) .22 .44 .47 .49 .50 .45
Net realized and unrealized
gain (loss) on investment
transactions .15 (.25) .03 .47 (.09) (.65)
Net increase (decrease)
in net asset value
from operations .37 .19 .50 .96 .41 (.20)
LESS: DIVIDENDS AND
DISTRIBUTIONS
Dividends from net
investment income (.22) (.45) (.47) (.49) (.49) (.45)
Distributions in excess of
net investment income -0- -0- (.03) (.01) -0- (.05)
Distributions from net
realized gains -0- -0- -0- -0- -0- (.03)
Total dividends and
distributions (.22) (.45) (.50) (.50) (.49) (.53)
Net asset value,
end of period $10.92 $10.77 $11.03 $11.03 $10.57 $10.65
TOTAL RETURN
Total investment return based
on net asset value(c) 3.49% 1.76% 4.69% 9.22% 4.06% (1.87)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $38,618 $46,542 $53,156 $44,688 $31,207 $29,365
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.52%(d) 1.52% 1.52% 1.52% 1.47% 1.42%
Expenses, before waivers/
reimbursements 1.90%(d) 1.88% 1.82% 1.90% 1.93% 1.96%
Net investment income,
net of waivers/
reimbursements 3.98%(d) 4.02% 4.28% 4.53% 4.83% 4.05%
Portfolio turnover rate 22% 28% 27% 108% 389% 303%
See footnote summary on page 144.
_______________________________________________________________________________
126 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Financial Highlights
- -------------------------------------------------------------------------------
Michigan Portfolio
----------------------------------------------------------------------------
Class A
----------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2004 ---------------------------------------------------------------
(unaudited) 2003 2002 2001 2000 1999
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $10.69 $10.91 $10.63 $10.16 $10.06 $10.62
INCOME FROM INVESTMENT
OPERATIONS
Net investment income(a)(b) .24 .47 .49 .52 .53 .46
Net realized and unrealized
gain (loss) on investment
transactions .17 (.17) .32 .48 .09 (.45)
Net increase in net asset
value from operations .41 .30 .81 1.00 .62 .01
LESS: DIVIDENDS AND
DISTRIBUTIONS
Dividends from net
investment income (.24) (.52) (.49) (.52) (.52) (.46)
Distributions in excess of
net investment income -0- -0- (.04) (.01) -0- (.04)
Distributions from net
realized gains -0- -0- -0- -0- -0- (.07)
Total dividends and
distributions (.24) (.52) (.53) (.53) (.52) (.57)
Net asset value,
end of period $10.86 $10.69 $10.91 $10.63 $10.16 $10.06
TOTAL RETURN
Total investment return based
on net asset value(c) 3.92% 2.66% 7.87% 10.11% 6.39% .03%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $45,136 $53,022 $55,396 $32,804 $14,609 $11,760
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements .98%(d) 1.01% 1.01% 1.01% .99% .96%
Expenses, before waivers/
reimbursements 1.19%(d) 1.20% 1.21% 1.44% 1.63% 1.62%
Net investment income,
net of waivers/
reimbursements 4.42%(d) 4.38% 4.57% 5.01% 5.30% 4.48%
Portfolio turnover rate 1% 46% 18% 115% 287% 213%
See footnote summary on page 144.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 127
Financial Highlights
- -------------------------------------------------------------------------------
Michigan Portfolio
----------------------------------------------------------------------------
Class B
----------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2004 ---------------------------------------------------------------
(unaudited) 2003 2002 2001 2000 1999
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $10.67 $10.89 $10.62 $10.15 $10.05 $10.61
INCOME FROM INVESTMENT
OPERATIONS
Net investment income(a)(b) .20 .40 .41 .45 .45 .39
Net realized and unrealized
gain (loss) on investment
transactions .17 (.18) .32 .48 .10 (.45)
Net increase (decrease)
in net asset value
from operations .37 .22 .73 .93 .55 (.06)
LESS: DIVIDENDS AND
DISTRIBUTIONS
Dividends from net
investment income (.20) (.44) (.41) (.45) (.45) (.39)
Distributions in excess of
net investment income -0- -0- (.05) (.01) -0- (.04)
Distributions from net
realized gains -0- -0- -0- -0- -0- (.07)
Total dividends and
distributions (.20) (.44) (.46) (.46) (.45) (.50)
Net asset value,
end of period $10.84 $10.67 $10.89 $10.62 $10.15 $10.05
TOTAL RETURN
Total investment return based
on net asset value(c) 3.56% 1.95% 7.06% 9.39% 5.55% (.64)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $55,410 $58,034 $53,097 $29,436 $14,943 $13,844
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.69%(d) 1.71% 1.71% 1.71% 1.69% 1.66%
Expenses, before waivers/
reimbursements 1.90%(d) 1.92% 1.92% 2.16% 2.34% 2.44%
Net investment income,
net of waivers/
reimbursements 3.72%(d) 3.69% 3.88% 4.34% 4.59% 3.79%
Portfolio turnover rate 1% 46% 18% 115% 287% 213%
See footnote summary on page 144.
_______________________________________________________________________________
128 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Financial Highlights
- -------------------------------------------------------------------------------
Michigan Portfolio
----------------------------------------------------------------------------
Class C
----------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2004 ---------------------------------------------------------------
(unaudited) 2003 2002 2001 2000 1999
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $10.67 $10.89 $10.62 $10.14 $10.05 $10.61
INCOME FROM INVESTMENT
OPERATIONS
Net investment income(a)(b) .20 .40 .41 .45 .46 .40
Net realized and unrealized
gain (loss) on investment
transactions .17 (.18) .32 .49 .08 (.46)
Net increase (decrease)
in net asset value
from operations .37 .22 .73 .94 .54 (.06)
LESS: DIVIDENDS AND
DISTRIBUTIONS
Dividends from net
investment income (.20) (.44) (.41) (.45) (.45) (.40)
Distributions in excess of
net investment income -0- -0- (.05) (.01) -0- (.03)
Distributions from net
realized gains -0- -0- -0- -0- -0- (.07)
Total dividends and
distributions (.20) (.44) (.46) (.46) (.45) (.50)
Net asset value,
end of period $10.84 $10.67 $10.89 $10.62 $10.14 $10.05
TOTAL RETURN
Total investment return based
on net asset value(c) 3.56% 1.95% 7.06% 9.50% 5.55% (.64)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $49,220 $54,996 $57,818 $24,142 $12,061 $10,747
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.69%(d) 1.71% 1.71% 1.71% 1.69% 1.66%
Expenses, before waivers/
reimbursements 1.89%(d) 1.90% 1.93% 2.16% 2.34% 2.43%
Net investment income,
net of waivers/
reimbursements 3.72%(d) 3.69% 3.86% 4.35% 4.60% 3.78%
Portfolio turnover rate 1% 46% 18% 115% 287% 213%
See footnote summary on page 144.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 129
Financial Highlights
- -------------------------------------------------------------------------------
Minnesota Portfolio
----------------------------------------------------------------------------
Class A
----------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2004 ---------------------------------------------------------------
(unaudited) 2003 2002 2001 2000 1999
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $10.15 $10.31 $10.09 $9.72 $9.67 $10.22
INCOME FROM INVESTMENT
OPERATIONS
Net investment income(a)(b) .22 .45 .48 .52 .53 .49
Net realized and unrealized
gain (loss) on investment
transactions .13 (.15) .25 .38 .03 (.53)
Net increase (decrease)
in net asset value
from operations .35 .30 .73 .90 .56 (.04)
LESS: DIVIDENDS AND
DISTRIBUTIONS
Dividends from net
investment income (.23) (.46) (.48) (.52) (.51) (.49)
Distributions in excess of
net investment income -0- -0- (.03) (.01) -0- (.02)
Total dividends and
distributions (.23) (.46) (.51) (.53) (.51) (.51)
Net asset value,
end of period $10.27 $10.15 $10.31 $10.09 $9.72 $9.67
TOTAL RETURN
Total investment return based
on net asset value(c) 3.46% 3.05% 7.46% 9.44% 6.09% (.48)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $69,003 $67,521 $65,850 $30,501 $20,212 $10,601
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements .90%(d) .90% .90% .90% .81% .75%
Expenses, before waivers/
reimbursements 1.28%(d) 1.28% 1.29% 1.49% 1.66% 1.63%
Net investment income,
net of waivers/
reimbursements 4.26%(d) 4.42% 4.75% 5.23% 5.57% 4.90%
Portfolio turnover rate 9% 32% 29% 61% 307% 259%
See footnote summary on page 144.
_______________________________________________________________________________
130 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Financial Highlights
- -------------------------------------------------------------------------------
Minnesota Portfolio
----------------------------------------------------------------------------
Class B
----------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2004 ---------------------------------------------------------------
(unaudited) 2003 2002 2001 2000 1999
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $10.15 $10.31 $10.08 $9.72 $9.67 $10.22
INCOME FROM INVESTMENT
OPERATIONS
Net investment income(a)(b) .18 .38 .40 .45 .46 .42
Net realized and unrealized
gain (loss) on investment
transactions .13 (.15) .27 .37 .03 (.53)
Net increase (decrease)
in net asset value
from operations .31 .23 .67 .82 .49 (.11)
LESS: DIVIDENDS AND
DISTRIBUTIONS
Dividends from net
investment income (.19) (.39) (.40) (.45) (.44) (.42)
Distributions in excess of
net investment income -0- -0- (.04) (.01) -0- (.02)
Total dividends and
distributions (.19) (.39) (.44) (.46) (.44) (.44)
Net asset value,
end of period $10.27 $10.15 $10.31 $10.08 $9.72 $9.67
TOTAL RETURN
Total investment return based
on net asset value(c) 3.10% 2.34% 6.84% 8.61% 5.32% (1.19)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $22,131 $24,366 $24,340 $17,304 $12,064 $14,111
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.60%(d) 1.60% 1.60% 1.60% 1.51% 1.46%
Expenses, before waivers/
reimbursements 1.99%(d) 1.99% 1.99% 2.19% 2.37% 2.43%
Net investment income,
net of waivers/
reimbursements 3.56%(d) 3.72% 4.04% 4.52% 4.81% 4.16%
Portfolio turnover rate 9% 32% 29% 61% 307% 259%
See footnote summary on page 144.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 131
Financial Highlights
- -------------------------------------------------------------------------------
Minnesota Portfolio
------------------------------------------------------------------------------
Class C
----------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2004 ---------------------------------------------------------------
(unaudited) 2003 2002 2001 2000 1999
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $10.16 $10.32 $10.10 $9.72 $9.67 $10.22
INCOME FROM INVESTMENT
OPERATIONS
Net investment income(a)(b) .18 .38 .40 .45 .46 .42
Net realized and unrealized
gain (loss) on investment
transactions .13 (.15) .26 .39 .03 (.53)
Net increase (decrease)
in net asset value
from operations .31 .23 .66 .84 .49 (.11)
LESS: DIVIDENDS AND
DISTRIBUTIONS
Dividends from net
investment income (.19) (.39) (.40) (.45) (.44) (.42)
Distributions in excess of
net investment income -0- -0- (.04) (.01) -0- (.02)
Total dividends and
distributions (.19) (.39) (.44) (.46) (.44) (.44)
Net asset value,
end of period $10.28 $10.16 $10.32 $10.10 $9.72 $9.67
TOTAL RETURN
Total investment return based
on net asset value(c) 3.10% 2.34% 6.72% 8.82% 5.32% (1.19)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $18,695 $19,248 $20,401 $11,434 $7,524 $9,081
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.60%(d) 1.60% 1.60% 1.60% 1.50% 1.45%
Expenses, before waivers/
reimbursements 1.98%(d) 1.98% 1.99% 2.19% 2.36% 2.44%
Net investment income,
net of waivers/
reimbursements 3.55%(d) 3.70% 4.01% 4.51% 4.84% 4.17%
Portfolio turnover rate 9% 32% 29% 61% 307% 259%
See footnote summary on page 144.
_______________________________________________________________________________
132 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Financial Highlights
- -------------------------------------------------------------------------------
New Jersey Portfolio
----------------------------------------------------------------------------
Class A
----------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2004 ---------------------------------------------------------------
(unaudited) 2003 2002 2001 2000 1999
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $9.80 $10.03 $10.11 $9.92 $9.93 $10.46
INCOME FROM INVESTMENT
OPERATIONS
Net investment income(a)(b) .22 .45 .48 .52 .52 .49
Net realized and unrealized
gain (loss) on investment
transactions .16 (.22) (.05) .20 (.02) (.51)
Net increase (decrease) in
net asset value
from operations .38 .23 .43 .72 .50 (.02)
LESS: DIVIDENDS AND
DISTRIBUTIONS
Dividends from net
investment income (.23) (.46) (.48) (.52) (.51) (.49)
Distributions in excess of
net investment income -0- -0- (.03) (.01) -0- (.02)
Total dividends and
distributions (.23) (.46) (.51) (.53) (.51) (.51)
Net asset value,
end of period $9.95 $9.80 $10.03 $10.11 $9.92 $9.93
TOTAL RETURN
Total investment return based
on net asset value(c) 3.92% 2.39% 4.42% 7.33% 5.31% (.29)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $76,888 $81,632 $94,865 $80,489 $49,667 $33,109
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements .87%(d) .87% .87% .87% .85% .82%
Expenses, before waivers/
reimbursements 1.16%(d) 1.13% 1.11% 1.13% 1.23% 1.25%
Net investment income,
net of waivers/
reimbursements 4.54%(d) 4.53% 4.80% 5.04% 5.36% 4.82%
Portfolio turnover rate 8% 45% 49% 111% 224% 131%
See footnote summary on page 144.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 133
Financial Highlights
- -------------------------------------------------------------------------------
New Jersey Portfolio
----------------------------------------------------------------------------
Class B
----------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2004 ---------------------------------------------------------------
(unaudited) 2003 2002 2001 2000 1999
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $9.80 $10.04 $10.11 $9.92 $9.93 $10.46
INCOME FROM INVESTMENT
OPERATIONS
Net investment income(a)(b) .19 .38 .41 .44 .45 .42
Net realized and unrealized
gain (loss) on investment
transactions .15 (.23) (.04) .20 (.02) (.51)
Net increase (decrease)
in net asset value
from operations .34 .15 .37 .64 .43 (.09)
LESS: DIVIDENDS AND
DISTRIBUTIONS
Dividends from net
investment income (.19) (.39) (.41) (.44) (.44) (.42)
Distributions in excess of
net investment income -0- -0- (.03) (.01) -0- (.02)
Total dividends and
distributions (.19) (.39) (.44) (.45) (.44) (.44)
Net asset value,
end of period $9.95 $9.80 $10.04 $10.11 $9.92 $9.93
TOTAL RETURN
Total investment return based
on net asset value(c) 3.54% 1.56% 3.79% 6.56% 4.53% (.99)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $100,594 $110,294 $127,025 $103,889 $62,149 $64,929
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.57%(d) 1.57% 1.57% 1.57% 1.55% 1.53%
Expenses, before waivers/
reimbursements 1.87%(d) 1.84% 1.82% 1.84% 1.94% 1.99%
Net investment income,
net of waivers/
reimbursements 3.84%(d) 3.83% 4.10% 4.33% 4.63% 4.10%
Portfolio turnover rate 8% 45% 49% 111% 224% 131%
See footnote summary on page 144.
_______________________________________________________________________________
134 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Financial Highlights
- -------------------------------------------------------------------------------
New Jersey Portfolio
----------------------------------------------------------------------------
Class C
----------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2004 ---------------------------------------------------------------
(unaudited) 2003 2002 2001 2000 1999
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $9.81 $10.04 $10.11 $9.93 $9.93 $10.46
INCOME FROM INVESTMENT
OPERATIONS
Net investment income(a)(b) .19 .38 .41 .44 .45 .43
Net realized and unrealized
gain (loss) on investment
transactions .15 (.22) (.04) .19 (.01) (.52)
Net increase (decrease)
in net asset value
from operations .34 .16 .37 .63 .44 (.09)
LESS: DIVIDENDS AND
DISTRIBUTIONS
Dividends from net
investment income (.19) (.39) (.41) (.44) (.44) (.43)
Distributions in excess of
net investment income -0- -0- (.03) (.01) -0- (.01)
Total dividends and
distributions (.19) (.39) (.44) (.45) (.44) (.44)
Net asset value,
end of period $9.96 $9.81 $10.04 $10.11 $9.93 $9.93
TOTAL RETURN
Total investment return based
on net asset value(c) 3.54% 1.66% 3.78% 6.45% 4.63% (.99)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $42,712 $45,633 $56,295 $46,025 $31,115 $32,578
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.57%(d) 1.57% 1.57% 1.57% 1.54% 1.52%
Expenses, before waivers/
reimbursements 1.86%(d) 1.83% 1.81% 1.83% 1.93% 1.98%
Net investment income,
net of waivers/
reimbursements 3.84%(d) 3.83% 4.10% 4.34% 4.64% 4.12%
Portfolio turnover rate 8% 45% 49% 111% 224% 131%
See footnote summary on page 144.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 135
Financial Highlights
- -------------------------------------------------------------------------------
Ohio Portfolio
----------------------------------------------------------------------------
Class A
----------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2004 ---------------------------------------------------------------
(unaudited) 2003 2002 2001 2000 1999
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $10.05 $10.02 $10.01 $9.77 $9.86 $10.45
INCOME FROM INVESTMENT
OPERATIONS
Net investment income(a)(b) .22 .46 .50 .54 .54 .49
Net realized and unrealized
gain (loss) on investment
transactions .11 .05 .04 .23 (.12) (.55)
Net increase (decrease)
in net asset value
from operations .33 .51 .54 .77 .42 (.06)
LESS: DIVIDENDS AND
DISTRIBUTIONS
Dividends from net
investment income (.23) (.48) (.51) (.53) (.51) (.49)
Distributions in excess of
net investment income -0- -0- (.02) -0- -0- (.04)
Total dividends and
distributions (.23) (.48) (.53) (.53) (.51) (.53)
Net asset value,
end of period $10.15 $10.05 $10.02 $10.01 $9.77 $9.86
TOTAL RETURN
Total investment return based
on net asset value(c) 3.43% 5.20% 5.57% 8.04% 4.54% (.70)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $83,458 $75,102 $70,223 $46,855 $32,490 $27,229
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements .85%(d) .85% .85% .85% .76% .75%
Expenses, before waivers/
reimbursements 1.16%(d) 1.15% 1.15% 1.20% 1.29% 1.30%
Net investment income,
net of waivers/
reimbursements 4.36%(d) 4.59% 4.99% 5.42% 5.57% 4.88%
Portfolio turnover rate 17% 23% 34% 32% 307% 208%
See footnote summary on page 144.
_______________________________________________________________________________
136 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Financial Highlights
- -------------------------------------------------------------------------------
Ohio Portfolio
----------------------------------------------------------------------------
Class B
----------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2004 ---------------------------------------------------------------
(unaudited) 2003 2002 2001 2000 1999
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $10.04 $10.02 $10.01 $9.77 $9.86 $10.45
INCOME FROM INVESTMENT
OPERATIONS
Net investment income(a)(b) .18 .39 .43 .47 .46 .43
Net realized and unrealized
gain (loss) on investment
transactions .11 .04 .05 .24 (.11) (.57)
Net increase (decrease)
in net asset value
from operations .29 .43 .48 .71 .35 (.14)
LESS: DIVIDENDS AND
DISTRIBUTIONS
Dividends from net
investment income (.19) (.41) (.44) (.47) (.44) (.43)
Distributions in excess of
net investment income -0- -0- (.03) -0- -0- (.02)
Total dividends and
distributions (.19) (.41) (.47) (.47) (.44) (.45)
Net asset value,
end of period $10.14 $10.04 $10.02 $10.01 $9.77 $9.86
TOTAL RETURN
Total investment return based
on net asset value(c) 3.07% 4.37% 4.87% 7.33% 3.78% (1.38)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $80,621 $83,422 $73,159 $54,575 $40,812 $49,055
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.55%(d) 1.55% 1.55% 1.55% 1.47% 1.46%
Expenses, before waivers/
reimbursements 1.86%(d) 1.86% 1.85% 1.91% 2.00% 2.01%
Net investment income,
net of waivers/
reimbursements 3.66%(d) 3.88% 4.29% 4.72% 4.84% 4.17%
Portfolio turnover rate 17% 23% 34% 32% 307% 208%
See footnote summary on page 144.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 137
Financial Highlights
- -------------------------------------------------------------------------------
Ohio Portfolio
----------------------------------------------------------------------------
Class C
----------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2004 ---------------------------------------------------------------
(unaudited) 2003 2002 2001 2000 1999
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $10.05 $10.02 $10.02 $9.77 $9.86 $10.45
INCOME FROM INVESTMENT
OPERATIONS
Net investment income(a)(b) .18 .39 .43 .47 .47 .43
Net realized and unrealized
gain (loss) on investment
transactions .11 .05 .04 .25 (.12) (.57)
Net increase (decrease)
in net asset value
from operations .29 .44 .47 .72 .35 (.14)
LESS: DIVIDENDS AND
DISTRIBUTIONS
Dividends from net
investment income (.19) (.41) (.44) (.47) (.44) (.43)
Distributions in excess of
net investment income -0- -0- (.03) -0- -0- (.02)
Total dividends and
distributions (.19) (.41) (.47) (.47) (.44) (.45)
Net asset value,
end of period $10.15 $10.05 $10.02 $10.02 $9.77 $9.86
TOTAL RETURN
Total investment return based
on net asset value(c) 2.97% 4.47% 4.77% 7.43% 3.78% (1.38)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $53,262 $54,062 $53,883 $36,500 $22,909 $24,126
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.55%(d) 1.55% 1.55% 1.55% 1.46% 1.45%
Expenses, before waivers/
reimbursements 1.86%(d) 1.85% 1.85% 1.90% 1.99% 2.01%
Net investment income,
net of waivers/
reimbursements 3.66%(d) 3.89% 4.29% 4.71% 4.85% 4.18%
Portfolio turnover rate 17% 23% 34% 32% 307% 208%
See footnote summary on page 144.
_______________________________________________________________________________
138 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Financial Highlights
- -------------------------------------------------------------------------------
Pennsylvania Portfolio
----------------------------------------------------------------------------
Class A
----------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2004 ---------------------------------------------------------------
(unaudited) 2003 2002 2001 2000 1999
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $10.44 $10.58 $10.42 $9.88 $9.89 $10.66
INCOME FROM INVESTMENT
OPERATIONS
Net investment income(a)(b) .23 .50 .51 .52 .52 .49
Net realized and unrealized
gain (loss) on investment
transactions .17 (.14) .18 .55 (.01) (.73)
Net increase (decrease)
in net asset value
from operations .40 .36 .69 1.07 .51 (.24)
LESS: DIVIDENDS AND
DISTRIBUTIONS
Dividends from net
investment income (.25) (.50) (.51) (.52) (.52) (.49)
Distributions in excess of
net investment income -0- -0- (.02) (.01) -0- (.04)
Total dividends and
distributions (.25) (.50) (.53) (.53) (.52) (.53)
Net asset value,
end of period $10.59 $10.44 $10.58 $10.42 $9.88 $9.89
TOTAL RETURN
Total investment return based
on net asset value(c) 3.88% 3.57% 6.88% 11.11% 5.35% (2.43)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $82,155 $84,053 $99,426 $96,834 $68,288 $62,479
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements .95%(d) .95% .95% .95% .95% .95%
Expenses, before waivers/
reimbursements 1.17%(d) 1.16% 1.13% 1.16% 1.23% 1.24%
Net investment income,
net of waivers/
reimbursements 4.50%(d) 4.91% 4.98% 5.15% 5.40% 4.68%
Portfolio turnover rate 16% 17% 38% 112% 356% 249%
See footnote summary on page 144.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 139
Financial Highlights
- -------------------------------------------------------------------------------
Pennsylvania Portfolio
----------------------------------------------------------------------------
Class B
----------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2004 ---------------------------------------------------------------
(unaudited) 2003 2002 2001 2000 1999
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $10.44 $10.58 $10.41 $9.88 $9.89 $10.66
INCOME FROM INVESTMENT
OPERATIONS
Net investment income(a)(b) .20 .44 .45 .45 .45 .41
Net realized and unrealized
gain (loss) on investment
transactions .16 (.15) .18 .54 (.02) (.73)
Net increase (decrease)
in net asset value
from operations .36 .29 .63 .99 .43 (.32)
LESS: DIVIDENDS AND
DISTRIBUTIONS
Dividends from net
investment income (.21) (.43) (.45) (.45) (.44) (.41)
Distributions in excess of
net investment income -0- -0- (.01) (.01) -0- (.04)
Total dividends and
distributions (.21) (.43) (.46) (.46) (.44) (.45)
Net asset value,
end of period $10.59 $10.44 $10.58 $10.41 $9.88 $9.89
TOTAL RETURN
Total investment return based
on net asset value(c) 3.52% 2.84% 6.26% 10.25% 4.58% (3.10)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $64,534 $68,409 $74,390 $62,038 $44,713 $52,012
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.65%(d) 1.65% 1.65% 1.65% 1.66% 1.66%
Expenses, before waivers/
reimbursements 1.88%(d) 1.87% 1.84% 1.86% 1.94% 1.98%
Net investment income,
net of waivers/
reimbursements 3.79%(d) 4.21% 4.35% 4.36% 4.69% 3.96%
Portfolio turnover rate 16% 17% 38% 112% 356% 249%
See footnote summary on page 144.
_______________________________________________________________________________
140 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Financial Highlights
- -------------------------------------------------------------------------------
Pennsylvania Portfolio
----------------------------------------------------------------------------
Class C
----------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2004 ---------------------------------------------------------------
(unaudited) 2003 2002 2001 2000 1999
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $10.44 $10.58 $10.41 $9.88 $9.89 $10.66
INCOME FROM INVESTMENT
OPERATIONS
Net investment income(a)(b) .20 .44 .45 .45 .46 .41
Net realized and unrealized
gain (loss) on investment
transactions .16 (.15) .18 .54 (.03) (.73)
Net increase (decrease)
in net asset value
from operations .36 .29 .63 .99 .43 (.32)
LESS: DIVIDENDS AND
DISTRIBUTIONS
Dividends from net
investment income (.21) (.43) (.45) (.45) (.44) (.41)
Distributions in excess of
net investment income -0- -0- (.01) (.01) -0- (.04)
Total dividends and
distributions (.21) (.43) (.46) (.46) (.44) (.45)
Net asset value,
end of period $10.59 $10.44 $10.58 $10.41 $9.88 $9.89
TOTAL RETURN
Total investment return based
on net asset value(c) 3.52% 2.84% 6.26% 10.25% 4.58% (3.10)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $41,271 $42,917 $46,296 $33,334 $23,306 $27,916
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.65%(d) 1.65% 1.65% 1.65% 1.65% 1.65%
Expenses, before waivers/
reimbursements 1.88%(d) 1.87% 1.83% 1.86% 1.93% 1.98%
Net investment income,
net of waivers/
reimbursements 3.79%(d) 4.20% 4.30% 4.42% 4.71% 3.98%
Portfolio turnover rate 16% 17% 38% 112% 356% 249%
See footnote summary on page 144.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 141
Financial Highlights
- -------------------------------------------------------------------------------
Virginia Portfolio
----------------------------------------------------------------------------
Class A
----------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2004 ---------------------------------------------------------------
(unaudited) 2003 2002 2001 2000 1999
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $10.75 $10.77 $10.54 $10.35 $10.32 $11.02
INCOME FROM INVESTMENT
OPERATIONS
Net investment income(a)(b) .26 .52 .52 .54 .56 .49
Net realized and unrealized
gain (loss) on investment
transactions .08 (.03) .25 .20 .02 (.60)
Net increase (decrease)
in net asset value
from operations .34 .49 .77 .74 .58 (.11)
LESS: DIVIDENDS AND
DISTRIBUTIONS
Dividends from net
investment income (.25) (.51) (.52) (.54) (.55) (.49)
Distributions in excess of
net investment income -0- -0- (.02) (.01) -0- (.07)
Distributions from net
realized gains -0- -0- -0- -0- -0- (.03)
Total dividends and
distributions (.25) (.51) (.54) (.55) (.55) (.59)
Net asset value,
end of period $10.84 $10.75 $10.77 $10.54 $10.35 $10.32
TOTAL RETURN
Total investment return based
on net asset value(c) 3.23% 4.66% 7.58% 7.32% 5.88% (1.10)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $63,199 $71,572 $76,797 $53,306 $37,784 $28,148
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements .72%(d) .72% .72% .72% .67% .67%
Expenses, before waivers/
reimbursements 1.15%(d) 1.15% 1.15% 1.21% 1.26% 1.43%
Net investment income,
net of waivers/
reimbursements 4.80%(d) 4.87% 4.95% 5.18% 5.52% 4.67%
Portfolio turnover rate 5% 25% 16% 134% 289% 311%
See footnote summary on page 144.
_______________________________________________________________________________
142 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Financial Highlights
- -------------------------------------------------------------------------------
Virginia Portfolio
----------------------------------------------------------------------------
Class B
----------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2004 ---------------------------------------------------------------
(unaudited) 2003 2002 2001 2000 1999
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $10.73 $10.75 $10.53 $10.34 $10.31 $11.01
INCOME FROM INVESTMENT
OPERATIONS
Net investment income(a)(b) .22 .45 .45 .47 .49 .42
Net realized and unrealized
gain (loss) on investment
transactions .09 (.04) .24 .20 .02 (.60)
Net increase (decrease)
in net asset value
from operations .31 .41 .69 .67 .51 (.18)
LESS: DIVIDENDS AND
DISTRIBUTIONS
Dividends from net
investment income (.22) (.43) (.45) (.47) (.48) (.42)
Distributions in excess of
net investment income -0- -0- (.02) (.01) -0- (.07)
Distributions from net
realized gains -0- -0- -0- -0- -0- (.03)
Total dividends and
distributions (.22) (.43) (.47) (.48) (.48) (.52)
Net asset value,
end of period $10.82 $10.73 $10.75 $10.53 $10.34 $10.31
TOTAL RETURN
Total investment return based
on net asset value(c) 2.88% 3.94% 6.78% 6.62% 5.16% (1.73)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $76,804 $82,541 $85,842 $69,534 $49,216 $42,007
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.42%(d) 1.42% 1.42% 1.42% 1.37% 1.37%
Expenses, before waivers/
reimbursements 1.86%(d) 1.85% 1.86% 1.92% 1.97% 2.20%
Net investment income,
net of waivers/
reimbursements 4.11%(d) 4.18% 4.27% 4.49% 4.83% 3.97%
Portfolio turnover rate 5% 25% 16% 134% 289% 311%
See footnote summary on page 144.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 143
Financial Highlights
- -------------------------------------------------------------------------------
Virginia Portfolio
----------------------------------------------------------------------------
Class C
----------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2004 ---------------------------------------------------------------
(unaudited) 2003 2002 2001 2000 1999
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $10.73 $10.75 $10.52 $10.33 $10.31 $11.01
INCOME FROM INVESTMENT
OPERATIONS
Net investment income(a)(b) .22 .45 .45 .47 .49 .42
Net realized and unrealized
gain (loss) on investment
transactions .09 (.04) .25 .20 .01 (.60)
Net increase (decrease)
in net asset value
from operations .31 .41 .70 .67 .50 (.18)
LESS: DIVIDENDS AND
DISTRIBUTIONS
Dividends from net
investment income (.22) (.43) (.45) (.47) (.48) (.42)
Distributions in excess of
net investment income -0- -0- (.02) (.01) -0- (.07)
Distributions from net
realized gains -0- -0- -0- -0- -0- (.03)
Total dividends and
distributions (.22) (.43) (.47) (.48) (.48) (.52)
Net asset value,
end of period $10.82 $10.73 $10.75 $10.52 $10.33 $10.31
TOTAL RETURN
Total investment return based
on net asset value(c) 2.88% 3.94% 6.88% 6.62% 5.06% (1.73)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $31,441 $33,486 $34,396 $24,116 $16,848 $12,962
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.42%(d) 1.42% 1.42% 1.42% 1.37% 1.37%
Expenses, before waivers/
reimbursements 1.86%(d) 1.85% 1.86% 1.92% 1.96% 2.19%
Net investment income,
net of waivers/
reimbursements 4.12%(d) 4.17% 4.26% 4.48% 4.83% 3.97%
Portfolio turnover rate 5% 25% 16% 134% 289% 311%
(a) Net of fees waived and expenses reimbursed by the Adviser.
(b) Based on average shares outstanding.
(c) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period. Initial sales charge or contingent
deferred sales charge is not reflected in the calculation of total investment
return. Total return does not reflect the deduction of taxes that a shareholder
would pay on Portfolio distributions or the redemption of Portfolio shares.
Total investment return calculated for a period of less than one year is not
annualized.
(d) Annualized.
_______________________________________________________________________________
144 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Board of Trustees
- -------------------------------------------------------------------------------
BOARD OF TRUSTEES
William H. Foulk, Jr.(1), Chairman
Marc O. Mayer, President
Ruth Block(1)
David H. Dievler(1)
John H. Dobkin(1)
Clifford L. Michel(1)
Donald J. Robinson(1)
OFFICERS
Robert B. Davidson, III, Senior Vice President
David M. Dowden(2), Vice President
Terrance T. Hults(2), Vice President
William E. Oliver, Vice President
Mark R. Manley, Secretary
Mark D. Gersten, Treasurer & Chief Financial Officer
Thomas R. Manley, Controller
Custodian
The Bank of New York
One Wall Street
New York, NY 10286
Principal Underwriter
AllianceBernstein Investment Research and Management, Inc.
1345 Avenue of the Americas
New York, NY 10105
Legal Counsel
Seward & Kissel LLP
One Battery Park Plaza
New York, NY 10004
Independent Auditors
Ernst & Young LLP
5 Times Square
New York, NY 10036
Transfer Agent
Alliance Global Investor Services, Inc.
P.O. Box 786003
San Antonio, TX 78278-6003
Toll-Free (800) 227-4618
(1) Member of the Audit Committee.
(2) Messrs. Dowden and Hults are tbe persons primarily responsible for the
day-to-day management of the Fund's investment portfolio.
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 145
AllianceBernstein Family of Funds
- -------------------------------------------------------------------------------
ALLIANCEBERNSTEIN FAMILY OF FUNDS
- --------------------------------------------
Wealth Strategies Funds
- --------------------------------------------
Balanced Wealth Strategy
Wealth Appreciation Strategy
Wealth Preservation Strategy
Tax-Managed Balanced Wealth Strategy*
Tax-Managed Wealth Appreciation Strategy
Tax-Managed Wealth Preservation Strategy**
- --------------------------------------------
Blended Style Funds
- --------------------------------------------
U.S. Large Cap Portfolio
International Portfolio
Tax-Managed International Portfolio
- --------------------------------------------
Growth Funds
- --------------------------------------------
Domestic
Growth Fund
Health Care Fund
Mid-Cap Growth Fund
Premier Growth Fund
Small Cap Growth Fund
Technology Fund
Global & International
All-Asia Investment Fund
Global Research Growth Fund
Global Small Cap Fund
Greater China '97 Fund
International Premier Growth Fund
New Europe Fund
Worldwide Privatization Fund
Select Investor Series
Biotechnology Portfolio
Premier Portfolio
Technology Portfolio
- --------------------------------------------
Value Funds
- --------------------------------------------
Domestic
Balanced Shares
Disciplined Value Fund
Growth & Income Fund
Real Estate Investment Fund
Small Cap Value Fund
Utility Income Fund
Value Fund
Global & International
Global Value Fund
International Value Fund
- --------------------------------------------
Taxable Bond Funds
- --------------------------------------------
Americas Government Income Trust
Corporate Bond Portfolio
Emerging Market Debt Fund
Global Strategic Income Trust
High Yield Fund
Multi-Market Strategy Trust
Quality Bond Portfolio
Short Duration Portfolio
U.S. Government Portfolio
- --------------------------------------------
Municipal Bond Funds
- --------------------------------------------
National
Insured National
Arizona
California
Insured California
Florida
Massachusetts
Michigan
Minnesota
New Jersey
New York
Ohio
Pennsylvania
Virginia
- --------------------------------------------
Intermediate Municipal Bond Funds
- --------------------------------------------
Intermediate California
Intermediate Diversified
Intermediate New York
- --------------------------------------------
Closed-End Funds
- --------------------------------------------
All-Market Advantage Fund
ACM Income Fund
ACM Government Opportunity Fund
ACM Managed Dollar Income Fund
ACM Managed Income Fund
ACM Municipal Securities Income Fund
California Municipal Income Fund
National Municipal Income Fund
New York Municipal Income Fund
The Spain Fund
World Dollar Government Fund
World Dollar Government Fund II
We also offer Exchange Reserves,+ which serves as the money market fund
exchange vehicle for the AllianceBernstein mutual funds.
For more complete information on any AllianceBernstein mutual fund, including
investment objectives and policies, sales charges, expenses, risks and other
matters of importance to prospective investors, visit our web site at
www.alliancebernstein.com or call us at (800) 227-4618 for a current
prospectus. Please read the prospectus carefully before you invest or send
money.
* Formerly Growth Investors Fund.
** Formerly Conservative Investors Fund.
+ An investment in the Fund is not a deposit in a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. Although the Fund seeks to preserve the value of your investment at
$1.00 per share, it is possible to lose money by investing in the Fund.
_______________________________________________________________________________
146 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
NOTES
_______________________________________________________________________________
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 147
NOTES
_______________________________________________________________________________
148 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
1345 Avenue of the Americas
New York, NY 10105
(800) 221-5672
AllianceBernstein [LOGO](SM)
Investment Research and Management
SM This service mark used under license from
the owner, Alliance Capital Management L.P.
MUNIIISR0304
ITEM 2. CODE OF ETHICS.
Not applicable when filing a Semi-Annual report to shareholders.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable when filing a Semi-Annual report to shareholders.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable when filing a Semi-Annual report to shareholders.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable to the registrant.
ITEM 6. [RESERVED]
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable to the registrant.
ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable to the registrant.
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
On March 17, 2004 the Fund adopted procedures effective April 1, 2004, by which
shareholders may recommend nominees to the Fund's Board of Directors. Prior
thereto, the Fund's Board did not accept shareholder recommendations for
nominees to the Fund's Board.
ITEM 10. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive officer and principal financial officer
have concluded that the registrant's disclosure controls and procedures (as
defined in Rule 30a-2(c) under the Investment Company Act of 1940, as amended)
are effective at the reasonable assurance level based on their evaluation of
these controls and procedures as of a date within 90 days of the filing date of
this document.
(b) There were no significant changes in the registrant's internal controls that
could significantly affect these controls subsequent to the date of their
evaluation, including any corrective actions with regard to significant
deficiencies and material weaknesses.
ITEM 11. EXHIBITS.
The following exhibits are attached to this Form N-CSR:
Exhibit No. DESCRIPTION OF EXHIBIT
11 (b) (1) Certification of Principal Executive Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
11 (b) (2) Certification of Principal Financial Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
11 (c) Certification of Principal Executive Officer and Principal
Financial Officer Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant): AllianceBernstein Municipal Income Fund II
By: /s/Marc O. Mayer
--------------------------------
Marc O. Mayer
President
Date: June 7, 2004
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/Marc O. Mayer
--------------------------------
Marc O. Mayer
President
Date: June 7, 2004
By: /s/Mark D. Gersten
-------------------------------
Mark D. Gersten
Treasurer and Chief Financial Officer
Date: June 7, 2004