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: 811-00204
ALLIANCEBERNSTEIN MID-CAP GROWTH FUND, INC.
(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: July 31, 2005
Date of reporting period: January 31, 2005
ITEM 1. REPORTS TO STOCKHOLDERS.
[LOGO] ALLIANCEBERNSTEIN (SM)
Investment Research and Management
AllianceBernstein Mid-Cap Growth Fund
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Semi-Annual Report--January 31, 2005
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Mid-Cap Blend
The Fund expects to hold a meeting of shareholders on or about November 15,
2005, at which the election of directors will be considered. For information
with respect to submitting a candidate for director for consideration by the
Governance and Nominating Committee of the Fund's Board of Directors, please
see the Nominating Procedures in the Fund's Statement of Additional Information.
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
AllianceBernstein 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.
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, and information regarding how the Fund voted proxies relating to
portfolio securities during the most recent 12-month period ended June 30,
without charge. Simply visit AllianceBernstein's web site at
www.alliancebernstein.com, or go to the Securities and Exchange Commission's
(the "Commission") web site at www.sec.gov, or call AllianceBernstein at (800)
227-4618.
The Fund files its complete schedule of portfolio holdings with the Commission
for the first and third quarters of each fiscal year on Form N-Q. The Fund's
Forms N-Q are available on the Commission's web site at www.sec.gov. The Fund's
Forms N-Q may also be reviewed and copied at the Commission's Public Reference
Room in Washington, DC; information on the operation of the Public Reference
Room may be obtained by calling (800) SEC-0330. AllianceBernstein publishes
full portfolio holdings for the Fund monthly at www.alliancebernstein.com.
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.
March 21, 2005
Semi-Annual Report
This report provides management's discussion of fund performance for
AllianceBernstein Mid-Cap Growth Fund (the "Fund") for the semi-annual
reporting period ended January 31, 2005.
Investment Objective and Policies
AllianceBernstein Mid-Cap Growth Fund is an open-end, diversified investment
company that seeks long-term growth of capital and income primarily through
investments in common stocks that Alliance Capital believes will appreciate in
value. The Fund invests predominantly in the stocks of mid-capitalization
companies. This fund can also invest in foreign securities.
Investment Results
The table on page 4 shows the Fund's performance compared to its benchmark, the
Russell MidCap Growth Index, for the six- and 12-month periods ended January
31, 2005. The Fund underperformed the benchmark for both periods under review.
The Fund's modest underperformance during the six-month period ended January
31, 2005 was due mainly to stock selection within the technology and utilities
sectors. While broadband continues to accelerate its rollout, it has not yet
precipitated an overwhelming increase in spending on fiber optics equipment or
providers, causing the stocks participating in those businesses to decline. The
inventory build in certain sectors of technology, discussed below, also led to
underperformance of some of the Fund's semiconductor holdings. The Fund's
underweighted position in the financials sector also detracted from the Fund's
performance during the semi-annual reporting period.
The Fund benefited from stock selection in the consumer discretionary sector
during the six-month period. During this time, many of the companies exposed to
the Fund's theme of the development of a middle class in the emerging markets
outperformed, with both traditional and internet names aiding the Fund's
performance. Stock selection in the health care sector also proved to be
beneficial. Stock names closest to the intersection of health care and
technology produced solid returns as more investors began to understand the
imperative of, and the potential for, more personalized medicine after the
recall of both Vioxx and Celebrex. The Fund's overweighted position in the
technology sector was also beneficial to its performance, although as mentioned
above, stock selection within the technology sector was a slight detractor.
The Fund's underperformance during the 12-month period ended January 31, 2005
stemmed from both sector selection and stock selection, though the bulk of the
impact was from technology. Technology underperformed the market as a whole
after exceptionally strong performance in January 2004. Technology shares sold
off through the winter and spring of 2004 as investors abruptly shifted from
concerns about a jobless recovery to fears that the recovery was too rapid,
forcing energy prices and interest rates higher. Combined with a temporary
slowdown in demand from China, these factors contributed to the technology
sector's underperformance. The Fund also suffered due to stock selection in the
telecom sector as accelerated penetration and better pricing in broadband has
yet to precipitate sig-
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ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 1
nificant bottlenecks in service provider networks.
The rise in energy prices through the bulk of the year benefited the Fund's
performance, as the Fund's overweighted position in the energy sector was the
single largest sector contributor to performance. The Fund also benefited from
stock selection in the consumer discretionary sector. Companies exposed to the
developing middle class in emerging markets benefited as growth in both the
internet and gaming space was impressive overseas. Housing continued its strong
performance as interest rates actually fell for the year and consumers realized
the benefits of home ownership.
Market Review and Investment Strategy
After a difficult first seven months of 2004, the markets rallied steadily in
the second half of the year, as many of the fears weighing on the market in
mid-summer did not come to pass. During the summer, as the oil price pierced
$40 per barrel, investors worried about its impact on the economy.
Historically, anything above $40 per barrel was a harbinger of recession. This
time, final demand remained strong, confirming the theses that $40 oil, and
later $55 oil, is a demand-driven phenomenon, a sign of economic strength, not
impending weakness.
In an attempt to avoid the pitfalls of the last recession, many businesses cut
back on spending plans as oil crossed $40 during the spring. Consequently,
inventories backed up in distribution channels throughout the world, with
semiconductors particularly hard hit. As a result, many technology companies
missed their numbers for the second quarter of 2004, sending investors fleeing
from the space in July, but also providing an excellent entry point for
investments in high conviction names. The Fund's management team continued to
shift the Fund's energy holdings, which had been overweight in the first half
of the year, to such high conviction technology and consumer discretionary
names at that time. In the end, as concerns over dissipation in final demand
due to higher energy prices proved unfounded, businesses resumed their
spending, the presidential election ended without a repeat of court challenges
and Asian inventories fell faster than expected, leading to a solid six months
of equity performance during the semi-annual reporting period.
The Fund's holdings are classified throughout this report according to Alliance
Capital's sector classification scheme. For readers specifically interested in
the Russell sector classification of this Fund, the sector breakdown according
to Russell's classification scheme is as follows: Technology 36.1%, Consumer
Discretionary 27.5%, Producer Durables 12.8%, Health Care 11.2%, Finance 4.7%,
Utilities 3.5%, Energy 3.2% and Consumer Staples 1.0%.
In Memory
It is with sadness that we announce the passing of Clifford L. Michel, a member
of the Board of Directors of AllianceBernstein Mid-Cap Growth Fund. Mr. Michel
served the interests of the Fund's shareholders for the last 20 years. His hard
work, dedication and contributions to the Fund will be greatly missed.
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2 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND
HISTORICAL PERFORMANCE
An Important Note About the Value of Historical Performance
The performance shown on the following pages 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.
The investment return and principal value of an investment in the Fund 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 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
AllianceBernstein at (800) 227-4618. You should read the prospectus carefully
before you invest.
Returns are annualized for periods longer than one year. All fees and expenses
related to the operation of the Fund have been deducted. NAV returns do not
reflect sales charges; if sales charges were reflected, the Fund's quoted
performance would be lower. SEC returns reflect the applicable sales charges
for each share class: a 4.25% maximum front-end sales charge for Class A
shares; the applicable contingent deferred sales charge for Class B shares (4%
year 1, 3% year 2, 2% year 3, 1% year 4); a 1% 1 year contingent deferred sales
charge for Class C shares. Returns for Advisor Class shares will vary due to
different expenses associated with this class. Performance assumes reinvestment
of distributions and does not account for taxes.
Benchmark Disclosure
The unmanaged Russell MidCap Growth Index does not reflect fees and expenses
associated with the active management of a mutual fund portfolio. The Index
measures the performance of those Russell mid-cap companies with higher
price-to-book ratios and higher forecasted growth values. The stocks are also
members of the Russell 1000 Growth Index. Investors cannot invest directly in
an index, and its results are not indicative of the performance for any
specific investment, including the Fund.
A Word About Risk
The Fund can invest in foreign securities. Foreign markets can be more volatile
than the U.S. market due to increased risks of adverse issuer, political,
regulatory, market or economic developments. In addition, fluctuations in the
value of investments in foreign currency denominated securities may be
magnified by changes in foreign exchange rates. While the Fund invests
principally in common stocks and other equity securities, in order to achieve
its investment objectives, the Fund 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 Fund's prospectus.
(Historical Performance continued on next page)
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ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 3
HISTORICAL PERFORMANCE
(continued from previous page)
THE FUND VS. ITS BENCHMARK Returns
PERIODS ENDED JANUARY 31, 2005 6 Months 12 Months
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AllianceBernstein Mid-Cap Growth Fund
Class A 13.20% 2.53%
Class B 12.74% 1.76%
Class C 12.77% 1.76%
Advisor Class 13.39% 2.66%
Russell MidCap Growth Index 13.61% 8.80%
See Historical Performance and Benchmark disclosures on previous page.
(Historical Performance continued on next page)
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4 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND
HISTORICAL PERFORMANCE
(continued from previous page)
AVERAGE ANNUAL RETURNS AS OF JANUARY 31, 2005
NAV Returns SEC Returns
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Class A Shares
1 Year 2.53% -1.77%
5 Years -1.86% -2.70%
10 Years 9.11% 8.65%
Class B Shares
1 Year 1.76% -2.25%
5 Years -2.70% -2.70%
10 Years(a) 8.35% 8.35%
Class C Shares
1 Year 1.76% 0.76%
5 Years -2.70% -2.70%
10 Years 8.16% 8.16%
Advisor Class Shares
1 Year 2.66%
5 Years -1.66%
Since Inception* 6.53%
SEC AVERAGE ANNUAL RETURNS (WITH SALES CHARGES)
AS OF THE MOST RECENT CALENDAR QUARTER-END (DECEMBER 31, 2004)
Class A Shares
1 Year 14.21%
5 Years -2.56%
10 Years 9.45%
Class B Shares
1 Year 14.22%
5 Years -2.57%
10 Years(a) 9.18%
Class C Shares
1 Year 17.26%
5 Years -2.57%
10 Years 8.97%
(a) Assumes conversion of Class B shares into Class A shares after eight years.
* Inception Date: 10/1/96 for Advisor Class shares.
See Historical Performance disclosures on page 3.
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ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 5
FUND EXPENSES
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including sales charges (loads) on purchase payments, contingent
deferred sales charges on redemptions and (2) ongoing costs, including
management fees; distribution (12b-1) fees; and other Fund expenses. This
example is intended to help you understand your ongoing costs (in dollars) of
investing in the Fund and to compare these costs with the ongoing costs of
investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of
the period and held for the entire period as indicated below.
Actual Expenses
The first line of the table below provides information about actual account
values and actual expenses. You may use the information in this line, together
with the amount you invested, to estimate the expenses that you paid over the
period. Simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
in the first line under the heading entitled "Expenses Paid During Period" to
estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio and an assumed annual rate of return of 5% before expenses, which is not
the Fund's actual return. The hypothetical account values and expenses may not
be used to estimate the actual ending account balance or expenses you paid for
the period. You may use this information to compare the ongoing costs of
investing in the Fund and other funds by comparing this 5% hypothetical example
with the 5% hypothetical examples that appear in the shareholder reports of
other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads), or contingent deferred sales charges on redemptions.
Therefore, the second line of the table is useful in comparing ongoing costs
only, and will not help you determine the relative total costs of owning
different funds. In addition, if these transactional costs were included, your
costs would have been higher.
Beginning Ending
Account Value Account Value Expenses Paid
August 1, 2004 January 31, 2005 During Period*
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Class A
Actual $1,000 $1,131.97 $ 6.66
Hypothetical
(5% return
before expenses) $1,000 $1,018.95 $ 6.31
Class B
Actual $1,000 $1,127.43 $10.99
Hypothetical
(5% return
before expenses) $1,000 $1,014.87 $10.41
Class C
Actual $1,000 $1,127.70 $10.89
Hypothetical
(5% return
before expenses) $1,000 $1,014.97 $10.31
Advisor Class
Actual $1,000 $1,133.94 $ 5.49
Hypothetical
(5% return
before expenses) $1,000 $1,020.06 $ 5.19
* Expenses are equal to the classes' annualized expense ratios of 1.24%,
2.05%, 2.03% and 1.02%, respectively, multiplied by the average account value
over the period, multiplied by the number of days in the most recent fiscal
half-year/365 (to reflect the one-half year period).
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6 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND
PORTFOLIO SUMMARY
January 31, 2005 (unaudited)
PORTFOLIO STATISTICS
Net Assets ($mil): $823.8
SECTOR BREAKDOWN*
o 46.8% Technology
o 26.0% Consumer Services
o 13.8% Health Care
o 4.0% Consumer Manufacturing [PIE CHART OMITTED]
o 3.7% Finance
o 2.6% Energy
o 1.5% Basic Industry
o 1.0% Consumer Staples
o 0.6% Short-Term
TEN LARGEST HOLDINGS
January 31, 2005 (unaudited)
Percent of
Company U.S. $ Value Net Assets
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Amazon.com, Inc. $ 40,759,053 4.9%
CNET Networks, Inc. 40,022,840 4.9
Broadcom Corp. Cl.A 39,330,421 4.8
Juniper Networks, Inc. 38,170,887 4.6
Silicon Laboratories, Inc. 35,926,294 4.4
Apollo Group, Inc.
Cl.A 32,315,145 3.9
KLA-Tencor Corp. 32,044,174 3.9
Level 3 Communications, Inc. 28,805,017 3.5
RealNetworks, Inc. 28,747,702 3.5
Network Appliance, Inc. 28,290,954 3.4
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$344,412,487 41.8%
* All data are as of January 31, 2005. The Fund's sector breakdown is
expressed as a percentage of total investments (excluding security lending
collateral) and may vary over time.
Please Note: The sector classifications presented herein are based on the
sector categorization methodology of the Adviser.
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ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 7
PORTFOLIO OF INVESTMENTS
January 31, 2005 (unaudited)
Company Shares U.S. $ Value
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COMMON STOCKS-100.0%
Technology-47.1%
Communication Equipment-9.2%
Corning, Inc.(a) 2,034,600 $ 22,258,524
JDS Uniphase Corp.(a)* 7,246,760 15,508,066
Juniper Networks, Inc.(a) 1,518,937 38,170,887
------------
75,937,477
Communication Services-3.5%
Level 3 Communications, Inc.(a)* 10,512,780 28,805,017
Computer Peripherals-3.4%
Network Appliance, Inc.(a) 888,535 28,290,954
Computer Software-3.8%
NAVTEQ(a)* 287,260 10,999,186
PalmOne, Inc.(a)* 787,430 20,374,751
------------
31,373,937
Internet Infrastructure-2.4%
VeriSign, Inc.(a) 752,040 19,432,714
Internet Media-3.5%
RealNetworks, Inc.(a)* 4,736,030 28,747,702
Semi-Conductor Capital Equipment-5.5%
KLA-Tencor Corp.(a)* 692,847 32,044,174
Novellus Systems, Inc.(a)* 504,560 13,194,244
------------
45,238,418
Semi-Conductor Components-13.5%
Advanced Micro Devices, Inc.(a)* 1,373,240 21,697,192
Broadcom Corp. Cl.A(a) 1,235,640 39,330,421
PMC-Sierra, Inc.(a) 1,406,900 14,462,932
Silicon Laboratories, Inc.(a)* 1,053,557 35,926,294
------------
111,416,839
Miscellaneous-2.3%
FEI Co.(a)* 396,790 7,999,286
Itron, Inc.(a) 456,220 10,515,871
------------
18,515,157
------------
387,758,215
Consumer Services-26.2%
Broadcasting & Cable-2.8%
XM Satellite Radio Holdings, Inc.
Cl.A(a)* 724,905 23,131,719
Entertainment & Leisure-3.0%
Wynn Resorts, Ltd.(a)* 382,780 25,095,057
Retail - General Merchandise-5.0%
Amazon.com, Inc.(a)* 943,060 40,759,053
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8 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND
Company Shares U.S. $ Value
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Miscellaneous-15.4%
Apollo Group, Inc. Cl.A(a)* 413,290 $ 32,315,145
CNET Networks, Inc.(a)* 3,638,440 40,022,840
Electronic Arts, Inc.(a) 260,492 16,760,055
HomeStore, Inc.(a) 3,694,950 8,720,082
Shanda Interactive Entertainment, Ltd.
(Cayman Islands)(ADR)(a)* 429,640 14,092,192
SINA Corp. (Hong Kong)(a)* 565,820 14,994,230
------------
126,904,544
------------
215,890,373
Health Care-13.9%
Biotechnology-10.5%
Affymetrix, Inc.(a)* 642,765 26,456,207
Applera Corp.-Applied Biosystems Group 1,100,045 22,055,902
Applera Corp.-Celera Genomics Group(a) 1,427,750 18,946,242
Compugen, Ltd. (Israel)(a)* 1,715,350 10,686,631
Human Genome Sciences, Inc.(a) 682,890 8,160,536
------------
86,305,518
Medical Products-0.7%
Cerus Corp.(a) 1,785,798 6,161,003
Medical Services-2.7%
Cepheid, Inc.(a) 2,162,300 22,152,764
------------
114,619,285
Consumer Manufacturing-4.0%
Building & Related-4.0%
D.R. Horton, Inc. 502,847 20,003,254
Lennar Corp. Cl.A 234,280 13,229,791
------------
33,233,045
Finance-3.7%
Brokerage & Money Management-3.7%
Ameritrade Holding Corp.(a) 1,480,900 19,148,037
Calamos Asset Management, Inc.
Cl.A 436,250 11,019,675
------------
30,167,712
Energy-2.6%
Domestic Producers-0.5%
Noble Energy, Inc. 68,750 4,067,938
Oil Service-2.1%
BJ Services Co.* 89,950 4,322,097
FMC Technologies, Inc.(a) 291,200 8,919,456
Nabors Industries, Ltd.
(Barbados)(a) 83,230 4,194,792
------------
17,436,345
------------
21,504,283
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ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 9
Shares or
Principal
Amount
Company (000) U.S. $ Value
- -------------------------------------------------------------------------------
Basic Industry-1.5%
Chemical-1.0%
Pall Corp. 304,990 $ 8,213,381
Mining & Metals-0.5%
Massey Energy Co.* 116,290 4,410,880
------------
12,624,261
Consumer Staples-1.0%
Retail-Food & Drug-1.0%
Whole Foods Market, Inc.* 90,470 8,089,827
Total Common Stocks
(cost $678,041,292) 823,887,001
SHORT-TERM INVESTMENT-0.6%
Time Deposit-0.6%
State Street Euro Dollar
1.60%, 2/01/05
(cost $5,191,000) $ 5,191 5,191,000
Total Investments Before Security
Lending Collateral-100.6%
(cost $683,232,292) 829,078,001
INVESTMENT OF CASH COLLATERAL
FOR SECURITIES LOANED-23.6%
Short-Term Investment
UBS Private Money Market Fund,
LLC, 2.29%
(cost $194,444,634) 194,444,634 194,444,634
Total Investments-124.2%
(cost $877,676,926) 1,023,522,635
Other assets less liabilities--(24.2%) (199,745,966)
Net Assets-100% $ 823,776,669
* Represents entire or partial securities out on loan. See Note E for
securities lending information.
(a) Non-income producing security.
Glossary:
ADR - American Depositary Receipt
See notes to financial statements.
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10 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND
STATEMENT OF ASSETS & LIABILITIES
January 31, 2005 (unaudited)
Assets
Investments in securities, at value
(cost $877,676,926--including investment of
cash collateral for securities loaned of $194,444,634) $ 1,023,522,635(a)
Cash 123,755
Receivable for investment securities sold 5,582,153
Receivable for capital stock sold 1,052,536
Dividends and interest receivable 75,980
Total assets 1,030,357,059
Liabilities
Payable for collateral on securities loaned 194,444,634
Payable for investment securities purchased 9,424,575
Payable for capital stock redeemed 1,655,690
Advisory fee payable 499,862
Distribution fee payable 215,175
Transfer Agent fee payable 136,773
Administrative fee payable 6,422
Accrued expenses and other liabilities 197,259
Total liabilities 206,580,390
Net Assets $ 823,776,669
Composition of Net Assets
Capital stock, at par $ 1,380,380
Additional paid-in capital 736,334,768
Accumulated net investment loss (4,385,715)
Accumulated net realized loss on investment transactions (55,398,473)
Net unrealized appreciation of investments 145,845,709
$ 823,776,669
Calculation of Maximum Offering Price
Class A Shares
Net asset value and redemption price per share
($667,539,747 / 109,639,456 shares of capital stock
issued and outstanding) $6.09
Sales charge--4.25% of public offering price .27
Maximum offering price $6.36
Class B Shares
Net asset value and offering price per share
($78,312,447 / 15,006,632 shares of capital stock
issued and outstanding) $5.22
Class C Shares
Net asset value and offering price per share
($26,122,263 / 5,013,639 shares of capital stock
issued and outstanding) $5.21
Advisor Class Shares
Net asset value, redemption and offering price per share
($51,802,212 / 8,378,258 shares of capital stock
issued and outstanding) $6.18
(a) Includes securities on loan with a value of $184,492,950 (see Note E).
See notes to financial statements.
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ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 11
STATEMENT OF OPERATIONS
Six Months Ended January 31, 2005 (unaudited)
Investment Income
Dividends $ 542,289
Securities lending income 314,388
Interest 32,143 $ 888,820
Expenses
Management fee 2,834,019
Distribution fee--Class A 709,063
Distribution fee--Class B 383,642
Distribution fee--Class C 127,197
Transfer agency 879,185
Custodian 114,140
Printing 76,864
Administrative 39,585
Registration 33,910
Audit 31,889
Legal 23,000
Directors' fees 11,508
Miscellaneous 10,818
Total expenses 5,274,820
Less: expense offset arrangement
(see Note B) (285)
Net expenses 5,274,535
Net investment loss (4,385,715)
Realized and Unrealized Gain on
Investment Transactions
Net realized gain on investment
transactions 40,601,886
Net change in unrealized
appreciation/depreciation
of investments 60,763,543
Net gain on investment transactions 101,365,429
Net Increase in Net Assets
from Operations $ 96,979,714
See notes to financial statements.
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12 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND
STATEMENT OF CHANGES IN NET ASSETS
Six Months
Ended
January 31, Year Ended
2005 July 31,
(unaudited) 2004
------------- -------------
Increase (Decrease) in Net Assets
from Operations
Net investment loss $ (4,385,715) $ (9,093,219)
Net realized gain on investment
transactions 40,601,886 206,659,498
Net change in unrealized
appreciation/depreciation
of investments 60,763,543 (71,196,765)
Net increase in net assets
from operations 96,979,714 126,369,514
Capital Stock Transactions
Net decrease (29,081,141) (461,518)
Total increase 67,898,573 125,907,996
Net Assets
Beginning of period 755,878,096 629,970,100
End of period (including
accumulated net investment loss of
$4,385,715 and $0, respectively) $ 823,776,669 $ 755,878,096
See notes to financial statements.
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ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 13
NOTES TO FINANCIAL STATEMENTS
January 31, 2005 (unaudited)
NOTE A
Significant Accounting Policies
The AllianceBernstein Mid-Cap Growth Fund, Inc. (the "Fund") is registered
under the Investment Company Act of 1940 as a diversified, open-end management
investment company. The Fund offers Class A, Class B, Class C and Advisor Class
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 4% to zero
depending on the period of time the shares are held. Class B shares will
automatically convert to Class A shares eight 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.
Advisor Class shares are sold without an initial or contingent deferred sales
charge and are not subject to ongoing distribution expenses. Advisor Class
shares are offered to investors participating in fee-based programs and to
certain retirement plan accounts. All four classes of shares have identical
voting, dividend, liquidation and other rights, 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 U.S. generally accepted accounting principles 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 significant accounting policies followed by the Fund.
1. Security Valuation
Portfolio securities are valued at their current market value determined on the
basis of market quotations or, if market quotations are not readily available
or are deemed unreliable, at "fair value" as determined in accordance with
procedures established by and under the general supervision of the Fund's Board
of Directors.
In general, the market value of securities which are readily available and
deemed reliable are determined as follows. Securities listed on a national
securities exchange or on a foreign securities exchange are valued at the last
sale 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. 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")
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14 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND
Notes to Financial Statements
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 valuation, the last
available closing settlement price is used; securities traded in the
over-the-counter market, ("OTC") (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, Alliance Capital Management, L.P. (the "Manager") 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 available (including
restricted securities) or are deemed unreliable are valued at fair value.
Factors considered in making this determination may include, but are not
limited to, information obtained by contacting the issuer, analysts, analysis
of the issuer's financial statements or other available documents. In addition,
the Fund may use fair value pricing for securities primarily traded in non-U.S.
markets because, most foreign markets close well before the Fund values its
securities at 4:00 p.m., Eastern Time. The earlier close of these foreign
markets gives rise to the possibility that significant events, including broad
market moves, may have occurred in the interim and may materially affect the
value of those securities. To account for this, the Fund may frequently value
many of its foreign equity securities using fair value prices based on third
party vendor modeling tools to the extent available.
2. Currency Translation
Assets and liabilities denominated in foreign currencies and commitments under
forward exchange currency contracts are translated into U.S. dollars at the
mean of the quoted bid and asked prices of such currencies against the U.S.
dollar. Purchases and sales of portfolio securities are translated into U.S.
dollars at the rates of exchange prevailing when such securities were acquired
or sold. Income and expenses are translated into U.S. dollars at rates of
exchange prevailing when accrued.
- -------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 15
Net realized gain or loss on foreign currency transactions represents foreign
exchange gains, losses from sales and maturities of foreign fixed income
investments, foreign currency exchange contracts, holding of foreign
currencies, currency gains or losses realized between the trade and settlement
dates on foreign investment transactions, and the difference between the
amounts of dividends, interest and foreign withholding taxes recorded on the
Fund's books and the U.S. dollar equivalent amounts actually received or paid.
Net unrealized currency gains and losses from valuing foreign currency
denominated assets and liabilities at period end exchange rates are reflected
as a component of net unrealized appreciation or depreciation of investments
and foreign currency denominated assets and liabilities.
3. Taxes
It is the Fund's policy 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, if any, to
shareholders. Therefore, no provisions for federal income or excise taxes are
required. The Fund may be subject to taxes imposed by countries in which it
invests. Such taxes are generally based on income and/or capital gains earned
or repatriated. Taxes are accrued and applied to net investment income, net
realized gains and net unrealized appreciation/depreciation as such income
and/or gains are earned.
4. Investment Income and Investment Transactions
Dividend income is recorded on the ex-dividend date or as soon as the Fund is
informed of the dividend. Interest income is accrued daily. Investment
transactions are accounted for on the trade date securities are purchased or
sold. Investment gains and losses are determined on the identified cost basis.
The Fund accretes discounts as adjustments to interest income.
5. Income and Expenses
All income earned and expenses incurred by the Fund are borne on a pro rata
basis by each outstanding class of shares, based on the proportionate interest
in the Fund represented by the net assets of such class, except that the Fund's
Class B and Class C shares bear higher distribution and transfer agent fees
than Class A and Advisor Class shares. Advisor Class shares have no
distribution fees.
6. Dividends and Distributions
Dividends and distributions to shareholders, if any, are recorded on the
exdividend date. Income dividends and capital gains distributions are
determined in accordance with federal tax regulations and may differ from those
determined in accordance with U.S. generally accepted accounting principles. 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.
- -------------------------------------------------------------------------------
16 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND
NOTE B
Management Fee and Other Transactions With Affiliates
Under the terms of the management agreement, the Fund pays the Manager a fee at
an annual rate of .75% on the first $500 million of average daily net assets,
..65% on the next $500 million of average daily net assets and .55% on average
daily net assets in excess of $1 billion. Such fee is accrued daily and paid
monthly.
Pursuant to the management agreement, the Fund paid $39,585 to the Manager
representing the cost of certain legal and accounting services provided to the
Fund by the Manager for the six months ended January 31, 2005.
The Fund compensates Alliance Global Investor Services, Inc., (AGIS) a
wholly-owned subsidiary of the Manager, under a Transfer Agency Agreement for
providing personnel and facilities to perform transfer agency services for the
Fund. Such compensation amounted to $624,207 for the six months ended January
31, 2005.
For the six months ended January 31, 2005, the Fund's expenses were reduced by
$285, under an expense offset arrangement with AGIS.
AllianceBernstein Investment Research and Management, Inc., (the
"Distributor"), a wholly-owned subsidiary of the Manager, serves as the
distributor of the Fund's shares. The Distributor has advised the Fund that it
has retained front-end sales charges of $6,914 from the sale of Class A shares
and received $2,940, $40,456 and $5,698 in contingent deferred sales charges
imposed upon redemptions by shareholders of Class A, Class B and Class C
shares, respectively, for the six months ended January 31, 2005.
Brokerage commissions paid on investment transactions for the six months ended
January 31, 2005 amounted to $1,575,022 of which $257 was paid to Sanford C.
Bernstein &Co. LLC, an affiliate of the Manager.
NOTE C
Distribution Services Agreement
The Fund has adopted a Distribution Services Agreement (the "Agreement")
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the
Agreement, the Fund pays distribution and servicing fees to the Distributor at
an annual rate of up to .30% of the Fund's average daily net assets
attributable to Class A shares and 1% of the average daily net assets
attributable to both Class B and Class C shares. There are no distribution and
servicing fees on the Advisor Class shares. The fees are accrued daily and paid
monthly. The directors currently limit payments under the Class A plan to .22%
of average daily net assets attributable to Class A shares. 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
- -------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 17
excess of the distribution costs reimbursed by the Fund in the amount of
$6,866,281and $2,090,172, for Class B and Class C shares, respectively; such
costs may be recovered from the Fund 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 Manager may use its own resources to finance the distribution of the Fund's
shares.
NOTE D
Investment Transactions
Purchases and sales of investment securities (excluding short-term investments)
for the period ended January 31, 2005, were as follows:
Purchases Sales
------------ ------------
Investment securities (excluding
U.S. government securities) $394,624,357 $420,962,715
U.S. government securities -0- -0-
The cost of investments for federal income tax purposes was substantially the
same as the cost for financial reporting purposes. Accordingly, gross
unrealized appreciation and unrealized depreciation are as follows:
Gross unrealized appreciation $ 196,527,370
Gross unrealized depreciation (50,681,661)
Net unrealized appreciation $ 145,845,709
NOTE E
Securities Lending
The Fund has entered into a securities lending agreement with UBS Warburg LLC
(the"LendingAgent"). Under the terms of the agreement, the Lending Agent, on
behalf of the Fund, administers the lending of portfolio securities to certain
broker-dealers. In return, the Fund receives fee income from the lending
transactions or it retains a portion of interest on the investment of any cash
received as collateral. The Fund also continues to receive dividends or
interest on the securities loaned. Unrealized gain or loss on the value of the
securities loaned that may occur during the term of the loan will be reflected
in the accounts of the Fund. All loans are continuously secured by collateral
exceeding the value of the securities loaned. All collateral consists of either
cash or U.S. Government securities. The Lending Agent may invest the cash
collateral received in an eligible money market vehicle in accordance with the
investment restrictions of the Fund. The Lending Agent will indemnify the Fund
for any loss resulting from a borrower's failure to return a loaned security
when due. As of January 31, 2005, the Fund had loaned securities with a value
of $184,492,950 and received cash collateral which was invested in a money
market fund valued at $194,444,634 as included in the accompanying portfolio of
investments. For the six months
- -------------------------------------------------------------------------------
18 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND
ended January 31, 2005, the Fund earned fee income of $314,388 which is
included in the accompanying statement of operations.
NOTE F
Capital Stock
There are 12,000,000,000 shares of $0.01 par value capital stock authorized,
divided into four classes, designated Class A, Class B, Class C and Advisor
Class shares. Each class consists of 3,000,000,000 authorized shares.
Transactions in capital stock were as follows:
Shares Amount
--------------------------- ------------------------------
Six Months Ended Year Ended Six Months Ended Year Ended
January 31, 2005 July 31, January 31, 2005 July 31,
(unaudited) 2004 (unaudited) 2004
------------ ------------ -------------- --------------
Class A
Shares sold 5,059,342 22,242,280 $ 29,173,073 $ 121,051,440
Shares converted
from Class B 361,107 811,000 2,130,371 4,498,313
Shares redeemed (9,380,731) (30,623,278) (53,935,080) (163,486,244)
Net decrease (3,960,282) (7,569,998) $ (22,631,636) $ (37,936,491)
Class B
Shares sold 1,412,821 8,239,640 $7,038,282 $38,206,484
Shares converted
to Class A (424,009) (816,813) (2,130,371) (4,498,313)
Shares redeemed (2,091,825) (5,115,444) (10,180,066) (23,593,092)
Net increase
(decrease) (1,103,013) 2,307,383 $ (5,272,155) $ 10,115,079
Class C
Shares sold 800,937 3,654,996 $ 4,023,048 $ 17,059,128
Shares redeemed (1,418,267) (1,751,807) (6,741,245) (8,317,397)
Net increase
(decrease) (617,330) 1,903,189 $ (2,718,197) $ 8,741,731
Advisor Class
Shares sold 1,064,680 6,376,822 $ 6,416,705 $ 34,878,865
Shares redeemed (833,311) (2,933,093) (4,875,858) (16,260,702)
Net increase 231,369 3,443,729 $ 1,540,847 $ 18,618,163
NOTE G
Risk Involved in Investing in the Fund
Foreign Securities Risk -- Investing in securities of foreign companies or
foreign governments involves special risks which include changes in foreign
exchange rates and the possibility of future political and economic
developments which could adversely affect the value of such securities.
Moreover, securities of many foreign companies or foreign governments and their
markets may be less liquid and their
- -------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 19
prices more volatile than those of comparable United States companies or of the
United States Government.
Indemnification Risk - In the ordinary course of business, the Fund enters into
contracts that contain a variety of indemnifications. The Fund's maximum
exposure under these arrangements is unknown. However, the Fund has not had
prior claims or losses pursuant to these indemnification provisions and expects
the risk of loss thereunder to be remote.
NOTE H
Components of Accumulated Earnings (Deficit)
The tax character of distributions to be paid for the year ending July 31, 2005
will be determined at the end of the current fiscal year. As of July 31, 2004,
the components of accumulated earnings/(deficit) on a tax basis were as follows:
Accumulated capital and other losses $ (67,249,702)(a)
Unrealized appreciation/(depreciation) 56,331,510(b)
Total accumulated earnings/(deficit) $ (10,918,192)
(a) On July 31, 2004, the Fund had a net capital loss carryforward of
$67,249,702 that expires in the year 2010. To the extent future capital gains
are offset by capital loss carryforward, such gains will not be distributed.
The Fund utilized $189,359,712 of capital loss carryforward during the year.
(b) The difference between book-basis and tax-basis unrealized
appreciation/(depreciation) is attributable primarily to the tax deferral of
losses on wash sales.
NOTE I
Legal Proceedings
As has been previously reported, the staff of the U.S. Securities and Exchange
Commission ("SEC") and the Office of the New York Attorney General ("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 the Adviser provide
information to them. The Adviser has been cooperating and will continue to
cooperate with all of these authorities.
On December 18, 2003, the Adviser 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 memorialized in an
Assurance of Discontinuance dated September 1, 2004 ("NYAG Order"). Among the
key provisions of these agreements are the following:
(i) The Adviser agreed to establish a $250 million fund (the "Reimbursement
Fund") to compensate mutual fund shareholders for the adverse
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20 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND
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) The Adviser agreed to reduce the advisory fees it receives from
some of the AllianceBernstein long-term, open-end retail funds until December
31, 2008; however, it is not expected that the Fund willl have its fees
reduced; and
(iii) The Adviser agreed to implement changes to its governance and
compliance procedures. Additionally, the SEC Order and the NYAG Order
contemplate that the Adviser's registered investment company clients, including
the Fund, will introduce governance and compliance changes.
A special committee of the Adviser's Board of Directors, comprised of the
members of the Adviser's Audit Committee and the other independent member of
the Adviser's 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.
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 the Adviser; 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 the Adviser. 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
- -------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 21
with the Adviser, including recovery of all fees paid to the Adviser pursuant
to such contracts.
Since October 2, 2003, numerous additional lawsuits making factual allegations
similar to those in the Hindo Complaint were filed against the Adviser and
certain other defendants, some of which name the Trust or the Fund as a
defendant. All of these lawsuits seek an unspecified amount of damages. The
lawsuits are now pending in the United States District Court for the District
of Maryland pursuant to a ruling by the Judicial Panel on Multidistrict
Litigation transferring and centralizing all of the mutual fund cases involving
market and late trading in the District of Maryland.
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.
The Adviser and approximately twelve other investment management firms were
publicly mentioned in connection with the settlement by the SEC of charges that
an unaffiliated broker/dealer violated federal securities laws relating to its
receipt of compensation for selling specific mutual funds and the disclosure of
such compensation. The SEC has indicated publicly that, among other things, it
is considering enforcement action in connection with mutual funds' disclosure
of such arrangements and in connection with the practice of considering mutual
fund sales in the direction of brokerage commissions from fund portfolio
transactions. The SEC has issued subpoenas to the Adviser, and the NASD has
issued requests for information, in connection with this matter and the Adviser
has provided documents and other information to the SEC and NASD and is
cooperating fully with the investigations. On March 11, 2005, discussions
commenced with the NASD that management believes will conclude these
investigations.
On June 22, 2004, a purported class action complaint entitled Aucoin, et al. v.
Alliance Capital Management L.P., et al. ("Aucoin Complaint") was filed against
the Adviser, Alliance Capital Management Holding L.P., Alliance Capital
Management Corporation, AXA Financial, Inc., AllianceBernstein Investment
Research & Management, Inc., certain current and former directors of the
AllianceBernstein Mutual Funds, and unnamed Doe defendants. The Aucoin
Complaint names certain of the AllianceBernstein mutual funds as nominal
defendants. The Aucoin Complaint was filed in the United States District Court
for the Southern District of New York by an alleged shareholder of an
AllianceBernstein mutual fund. The Aucoin Complaint alleges, among other
things, (i) that certain of the defendants improperly authorized the payment of
excessive commissions and other fees from fund assets to broker-dealers in
exchange for preferential marketing services, (ii) that certain of the
defendants
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22 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND
misrepresented and omitted from registration statements and other reports
material facts concerning such payments, and (iii) that certain defendants
caused such conduct as control persons of other defendants. The Aucoin
Complaint asserts claims for violation of Sections 34(b), 36(b) and 48(a) of
the Investment Company Act, Sections 206 and 215 of the Advisers Act, breach of
common law fiduciary duties, and aiding and abetting breaches of common law
fiduciary duties. Plaintiffs seek an unspecified amount of compensatory damages
and punitive damages, rescission of their contracts with the Adviser, including
recovery of all fees paid to the Adviser pursuant to such contracts, an
accounting of all fund-related fees, commissions and soft dollar payments, and
restitution of all unlawfully or discriminatorily obtained fees and expenses.
Since June 22, 2004, numerous additional lawsuits making factual allegations
substantially similar to those in the Aucoin Complaint were filed against the
Adviser and certain other defendants, and others may be filed.
It is possible that these matters and/or other developments resulting from
these matters could result in increased redemptions of the Fund's shares or
other adverse consequences to the Fund. However, the Adviser believes that
these matters are not likely to have a material adverse effect on its ability
to perform advisory services relating to the Fund.
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ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 23
FINANCIAL HIGHLIGHTS
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class A
-------------------------------------------------------------------------------------
Six Months
Ended December 1,
January 31, Year Ended 2002 to Year Ended November 30,
2005 July 31, July 31, ----------------------------------------------
(unaudited) 2004 2003(a) 2002 2001 2000 1999
----------- -------- --------- ------- -------- -------- -------
Net asset value,
beginning of period $5.38 $4.46 $3.70 $4.79 $5.83 $7.55 $5.97
Income From Investment Operations
Net investment loss(b) (.03) (.06)(c) (.03) (.04) (.04) (.04) (.03)
Net realized and unrealized
gain (loss) on investment
transactions .74 .98 .79 (1.05) (.71) (1.04) 2.00
Net increase (decrease)
in net asset value
from operations .71 .92 .76 (1.09) (.75) (1.08) 1.97
Less: Distributions
Distributions from
net realized gain
on investment
transactions -0- -0- -0- -0- (.29) (.64) (.39)
Net asset value,
end of period $6.09 $5.38 $4.46 $3.70 $4.79 $5.83 $7.55
Total Return
Total investment return
based on net asset
value(d) 13.20% 20.63% 20.54% (22.76)% (13.64)% (15.73)% 35.37%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $667,540 $610,854 $540,843 $469,570 $686,445 $856,956 $1,128,166
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.24%(e) 1.25% 1.45%(e) 1.34% 1.22% 1.04% 1.06%
Expenses, before waivers/
reimbursements 1.24%(e) 1.26% 1.45%(e) 1.34% 1.22% 1.04% 1.06%
Net investment loss (1.01)%(e) (1.06)%(c) (1.11)%(e) (1.03)% (.69)% (.55)% (.41)%
Portfolio turnover rate 50% 135% 75% 183% 226% 86% 97%
See footnote summary on page 27.
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24 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class B
-------------------------------------------------------------------------------------
Six Months
Ended December 1,
January 31, Year Ended 2002 to Year Ended November 30,
2005 July 31, July 31, ----------------------------------------------
(unaudited) 2004 2003(a) 2002 2001 2000 1999
----------- -------- --------- ------- -------- -------- -------
Net asset value,
beginning of period $4.63 $3.87 $3.23 $4.22 $5.21 $6.87 $5.51
Income From Investment Operations
Net investment loss(b) (.05) (.09)(c) (.03) (.07) (.07) (.09) (.07)
Net realized and unrealized
gain (loss) on investment
transactions .64 .85 .67 (.92) (.63) (.93) 1.82
Net increase (decrease)
in net asset value
from operations .59 .76 .64 (.99) (.70) (1.02) 1.75
Less: Distributions
Distributions from
net realized gain
on investment
transactions -0- -0- -0- -0- (.29) (.64) (.39)
Net asset value,
end of period $5.22 $4.63 $3.87 $3.23 $4.22 $5.21 $6.87
Total Return
Total investment return
based on net asset
value(d) 12.74% 19.64% 19.81% (23.46)% (14.34)% (16.48)% 34.24%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $78,313 $74,567 $53,461 $41,096 $61,816 $81,569 $101,858
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 2.05%(e) 2.09% 2.32%(e) 2.20% 2.08% 1.87% 1.89%
Expenses, before waivers/
reimbursements 2.05%(e) 2.10% 2.32%(e) 2.20% 2.08% 1.87% 1.89%
Net investment loss (1.83)%(e) (1.90)%(c) (1.98)%(e) (1.89)% (1.54)% (1.39)% (1.23)%
Portfolio turnover rate 50% 135% 75% 183% 226% 86% 97%
See footnote summary on page 27.
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ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 25
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class C
-------------------------------------------------------------------------------------
Six Months
Ended December 1,
January 31, Year Ended 2002 to Year Ended November 30,
2005 July 31, July 31, ----------------------------------------------
(unaudited) 2004 2003(a) 2002 2001 2000 1999
----------- -------- --------- ------- -------- -------- -------
Net asset value,
beginning of period $4.62 $3.87 $3.22 $4.21 $5.20 $6.86 $5.50
Income From Investment Operations
Net investment loss(b) (.04) (.09)(c) (.03) (.06) (.07) (.09) (.08)
Net realized and unrealized
gain (loss) on investment
transactions .63 .84 .68 (.93) (.63) (.93) 1.83
Net increase (decrease)
in net asset value
from operations .59 .75 .65 (.99) (.70) (1.02) 1.75
Less: Distributions
Distributions from
net realized gain
on investment
transactions -0- -0- -0- -0- (.29) (.64) (.39)
Net asset value,
end of period $5.21 $4.62 $3.87 $3.22 $4.21 $5.20 $6.86
Total Return
Total investment return
based on net asset
value(d) 12.77% 19.38% 20.19% (23.52)% (14.37)% (16.51)% 34.31%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $26,122 26,017 $14,415 $10,860 $15,391 $20,068 $28,025
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 2.03%(e) 2.06% 2.27%(e) 2.16% 2.04% 1.86% 1.86%
Expenses, before waivers/
reimbursements 2.03%(e) 2.07% 2.27%(e) 2.16% 2.04% 1.86% 1.86%
Net investment loss (1.81)%(e) (1.87)%(c) (1.94)%(e) (1.85)% (1.51)% (1.34)% (1.22)%
Portfolio turnover rate 50% 135% 75% 183% 226% 86% 97%
See footnote summary on page 27
- -------------------------------------------------------------------------------
26 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Advisor Class
-------------------------------------------------------------------------------------
Six Months
Ended December 1,
January 31, Year Ended 2002 to Year Ended November 30,
2005 July 31, July 31, ----------------------------------------------
(unaudited) 2004 2003(a) 2002 2001 2000 1999
----------- -------- --------- ------- -------- -------- -------
Net asset value,
beginning of period $5.45 $4.52 $3.74 $4.83 $5.86 $7.58 $5.98
Income From Investment Operations
Net investment loss(b) (.02) (.05)(c) -0- (.03) (.03) (.02) (.01)
Net realized and unrealized
gain (loss) on investment
transactions .75 .98 .78 (1.06) (.71) (1.06) 2.00
Net increase (decrease)
in net asset value
from operations .73 .93 .78 (1.09) (.74) (1.08) 1.99
Less: Distributions
Distributions from
net realized gain
on investment
transactions -0- -0- -0- -0- (.29) (.64) (.39)
Net asset value,
end of period $6.18 $5.45 $4.52 $3.74 $4.83 $5.86 $7.58
Total Return
Total investment return
based on net asset
value(d) 13.39% 20.58% 20.86% (22.57)% (13.39)% (15.66)% 35.66%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $51,802 $44,440 $21,251 $13,092 $131,032 $8,304 $9,970
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.02%(e) 1.04% 1.23%(e) 1.08% 1.08% .83% .85%
Expenses, before waivers/
reimbursements 1.02%(e) 1.05% 1.23%(e) 1.08% 1.08% .83% .85%
Net investment loss (.79)%(e) (.85)%(c) (.89)%(e) (.81)% (.64)% (.35)% (.20)%
Portfolio turnover rate 50% 135% 75% 183% 226% 86% 97%
(a) The Fund changed its fiscal year end from November 30 to July 31.
(b) Based on average shares outstanding.
(c) Net of expenses waived/reimbursed by the Adviser and the Transfer Agent.
(d) 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 charges or contingent
deferred sales charges are not reflected in the calculation of total investment
return. Total return does not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares. Total
investment return calculated for a period of less than one year is not
annualized.
(e) Annualized.
- -------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 27
BOARD OF DIRECTORS
William H. Foulk, Jr.(1), Chairman
Ruth Block(1)
David H. Dievler(1)
John H. Dobkin(1)
OFFICERS
Marc O. Mayer, President
Philip L. Kirstein, Senior Vice President and Independent Compliance Officer
Thomas J. Bardong, Vice President
John L. Blundin, Vice President
Alan E. Levi, Vice President
Catherine Wood(2), Vice President
Mark R. Manley, Secretary
Mark D. Gersten, Treasurer and Chief Financial Officer
Vincent S. Noto, Controller
Custodian
State Street Bank & Trust Company
225 Franklin Street
Boston, MA 02110
Principal Underwriter
AllianceBernstein Investment Research and Management, Inc.
1345 Avenue of the Americas
New York, NY 10105
Transfer Agent
Alliance Global Investor Services, Inc.
P.O. Box 786003
San Antonio, Texas 78278-6003
Toll-Free (800) 221-5672
Independent Registered Public Accounting Firm
PricewaterhouseCoopers LLP
300 Madison Avenue
New York, NY 10017
Legal Counsel
Seward & Kissel LLP
One Battery Park Plaza
New York, NY 10004
(1) Member of the Audit Committee and the Governance and Nominating Committee.
(2) Ms. Wood is the person primarily responsible for the day-to-day management
of the Fund's investment portfolio.
- -------------------------------------------------------------------------------
28 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND
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
Mid-Cap Growth Fund
Large Cap Growth Fund*
Small Cap Growth Portfolio
Global & International
All-Asia Investment Fund
Global Health Care Fund*
Global Research Growth Fund
Global Technology Fund*
Greater China '97 Fund
International Premier Growth Fund
New Europe Fund
Worldwide Privatization Fund
Value Funds
- ------------------------------------
Domestic
Balanced Shares
Focused Growth & Income Fund*
Growth & Income Fund
Real Estate Investment Fund
Small/Mid-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. You should read the prospectus carefully before you invest.
* Prior to December 15, 2004, these Funds were named as follows: Global
Health Care Fund was Health Care Fund; Large Cap Growth Fund was Premier Growth
Fund; Global Technology Fund was Technology Fund; and Focused Growth & Income
Fund was Disciplined Value Fund.
** Prior to February 1, 2005, Small/Mid-Cap Value Fund was named Small Cap
Value 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.
- -------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 29
ALLIANCEBERNSTEIN MID-CAP GROWTH FUND
1345 Avenue of the Americas
New York, NY 10105
(800) 221-5672
[LOGO] ALLIANCEBERNSTEIN (SM)
Investment Research and Management
(SM) This service mark used under license from
the owner, Alliance Capital Management L.P.
ALLSR0105
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. SCHEDULE OF INVESTMENTS.
Please see Schedule of Investments contained in the Report to Shareholders
included under Item 1 of this Form N-CSR.
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.
There have been no material changes to the procedures by which shareholders may
recommend nominees to the Fund's Board of Directors since the Fund last
provided disclosure in response to this item.
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
over financial reporting 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 Mid-Cap Growth Fund, Inc.
By: /s/ Marc O. Mayer
-------------------
Marc O. Mayer
President
Date: March 31, 2005
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: March 31, 2005
By: /s/ Mark D. Gersten
-------------------
Mark D. Gersten
Treasurer and Chief Financial Officer
Date: March 31, 2005