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, 2005
Date of reporting period: March 31, 2005
ITEM 1. REPORTS TO STOCKHOLDERS.
[LOGO] AllIANCEBERNSTEIN(SM)
Investment Research and Management
AllianceBernstein
Municipal Income Fund II
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Tax-Exempt Income
Semi-Annual Report--March 31, 2005
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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.
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Investment Products Offered
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o Are Not FDIC Insured
o May Lose Value
o Are Not Bank Guaranteed
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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 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 23, 2005
Semi-Annual Report
This report provides management's discussion of fund performance for the
portfolios of AllianceBernstein Municipal Income Fund II (the "Portfolios") for
the semi-annual reporting period ended March 31, 2005.
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 tables on pages 5-7 show performance for each Portfolio compared to its
benchmark, the Lehman Brothers (LB) Municipal Index, for the six- and 12-month
periods ended March 31, 2005. For the six-month period ended March 31, 2005, all
of the AllianceBernstein Municipal Income Fund II Portfolios outperformed the
benchmark, the LB Municipal Index, which represents the municipal market and
posted a positive return of 1.21%. A description of each Portfolio's relative
performance versus the benchmark for the six-month period ended March 31, 2005
follows.
Arizona Portfolio -- The Arizona Portfolio's stronger relative performance was
largely the result of security selection in the special tax and hospital
sectors. In addition, the Portfolio benefited from its investment in bonds
maturing in 15-20 years and lower-rated securities.
Florida Portfolio -- The Florida Portfolio's stronger relative performance was
largely the result of its relative weight in the housing, industrial revenue
bond, hospital and pre-refunded sectors. Security selection in the special tax,
housing, insured and hospital sectors also contributed to positive relative
performance. In addition, the Portfolio benefited from its investment in bonds
maturing in 15-20 years and lower-rated securities.
Massachusetts Portfolio -- The Massachusetts Portfolio's stronger relative
performance was largely the result of security selection in the pre-refunded,
insured and special tax sectors. In addition, the Portfolio benefited from its
investment in bonds maturing in 15-20 years and lower-rated securities.
Michigan Portfolio -- The Michigan Portfolio's stronger relative performance was
largely the result of security selection in the insured and general obligation
sectors. The Portfolio's relative weight in the hospital and pre-refunded
sectors also contributed positively to performance. In addition, the Portfolio
benefited from its investment in bonds maturing in 15-20 years and lower-rated
securities.
Minnesota Portfolio -- The Minnesota Portfolio's stronger relative performance
was largely the result of its relative weight in the pre-refunded, hospital and
industrial revenue bond sectors.
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ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 1
Security selection in the insured, hospital and education sectors also
contributed to positive relative performance.
New Jersey Portfolio -- The New Jersey Portfolio's stronger relative performance
was largely the result of its relative weight in the industrial revenue bond and
pre-refunded sectors. Security selection in the insured, pre-refunded and
general obligation sectors also contributed to positive relative performance.
Ohio Portfolio -- The Ohio Portfolio's stronger relative performance was largely
the result of its relative weight in the industrial revenue bond and
pre-refunded sectors. The Portfolio benefited from security selection in the
insured, general obligation and special tax sectors. Security selection in the
industrial revenue bond and housing sectors detracted from the Portfolio's
performance. In addition, the Portfolio's performance benefited from its
investment position in lower-rated obligations.
Pennsylvania Portfolio -- The Pennsylvania Portfolio's stronger relative
performance was largely the result of its relative weight in the industrial
revenue bond and pre-refunded sectors. The Portfolio benefited from security
selection in the hospital, insured and special tax sectors. Security selection
in the industrial revenue bond and housing sectors detracted from the
Portfolio's performance. In addition, the Portfolio's performance benefited from
its investment position in lower-rated obligations.
Virginia Portfolio -- The Virginia Portfolio's stronger relative performance was
largely the result of its relative weight in the industrial revenue bond and
pre-refunded sectors. The Portfolio benefited from security selection in the
education, insured and special tax sectors. In addition, the Portfolio's
performance benefited from its overweight position in lower-rated obligations.
Market Review and Investment Strategy
During the six-month period ended March 31, 2005, long-term municipal bond
yields have declined while shorter term yields increased. The resulting
reduction in the yield differential between short- and long-term bonds was in
line with yield changes in the Treasury bond market. The U.S. Federal Reserve
increased the Fed Funds rate by 1.25% through five rate hikes over the past six
months. As a result, short-term bond yields increased. Inconclusive economic
signals and moderate inflation expectations, however, allowed longer term bond
yields to decline. On a pre-tax basis, the municipal market outperformed the
taxable bond market for the six-month period ended March 31, 2005. The LB
Municipal Index gained 1.21% during this period while the LB U.S. Aggregate
Index, representing taxable
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2 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
bonds, gained 0.47%. As of March 31, 2005, 30-year municipal bonds were yielding
approximately 97% of comparable maturity Treasury bonds.
Interest rates are still low by historical standards versus inflation and
indications of economic growth. As such, the Fund's portfolio management team
continues to maintain shorter-than-benchmark portfolio durations. The low rate
environment has led to relatively strong demand for lower-rated bonds as
investors seek higher income-producing bonds. As the yield premium on
lower-rated bonds declined, making them more expensive to buy/own versus high
quality bonds, we sold lower-rated bonds opportunistically. Stronger economic
growth has helped boost state and local government tax revenues in 2004,
improving the creditworthiness of state and local issuers. Holdings in general
obligation bonds benefited from this trend.
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ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 3
Historical Performance
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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 Portfolios
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 Portfolios carefully before investing. For a free
copy of the Portfolios' 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 Portfolios have been deducted. NAV returns do
not reflect sales charges; if sales charges were reflected, the Portfolios'
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 (3%
year 1, 2% year 2, 1% year 3, 0% year 4); a 1% 1 year contingent deferred sales
charge for Class C shares. Performance assumes reinvestment of distributions and
does not account for taxes.
Benchmark Disclosure
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 the Portfolios.
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. Please note, as interest rates
rise, existing bond prices fall and can cause the value of an investment in the
Portfolios to decline. Changes in interest rates have a greater effect on bonds
with longer maturities than on those with shorter maturities. Please note that
individual state municipal portfolios are non-diversified and subject to
geographic risk based on their narrow investment objectives. While the
Portfolios invest principally in bonds and other fixed-income securities, in
order to achieve their investment objectives, the Portfolios 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 Portfolios' prospectus.
(Historical Performance continued on next page)
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4 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Historical Performance
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HISTORICAL PERFORMANCE
(continued from previous page)
THE PORTFOLIOS VS. THEIR BENCHMARKS
PERIODS ENDED MARCH 31, 2005
Returns
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6 Months 12 Months
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Arizona Portfolio
Class A 2.37% 4.80%
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Class B 1.93% 3.97%
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Class C 1.93% 3.98%
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LB Municipal Index 1.21% 2.67%
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Returns
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6 Months 12 Months
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Florida Portfolio
Class A 1.98% 3.78%
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Class B 1.53% 2.96%
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Class C 1.63% 2.97%
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LB Municipal Index 1.21% 2.67%
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Returns
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6 Months 12 Months
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Massachusetts Portfolio
Class A 1.67% 3.89%
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Class B 1.23% 3.17%
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Class C 1.23% 3.17%
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LB Municipal Index 1.21% 2.67%
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See Historical Performance and Benchmark disclosures on page 4.
(Historical Performance continued on next page)
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ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 5
Historical Performance
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HISTORICAL PERFORMANCE
(continued from previous page)
THE PORTFOLIOS VS. THEIR BENCHMARKS
PERIODS ENDED MARCH 31, 2005
Returns
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6 Months 12 Months
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Michigan Portfolio
Class A 1.97% 3.67%
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Class B 1.72% 3.05%
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Class C 1.72% 3.05%
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LB Municipal Index 1.21% 2.67%
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Returns
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6 Months 12 Months
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Minnesota Portfolio
Class A 1.97% 2.90%
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Class B 1.52% 2.09%
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Class C 1.62% 2.18%
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LB Municipal Index 1.21% 2.67%
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Returns
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6 Months 12 Months
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New Jersey Portfolio
Class A 2.20% 3.41%
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Class B 1.95% 2.80%
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Class C 1.95% 2.69%
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LB Municipal Index 1.21% 2.67%
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See Historical Performance and Benchmark disclosures on page 4.
(Historical Performance continued on next page)
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6 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Historical Performance
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HISTORICAL PERFORMANCE
(continued from previous page)
THE PORTFOLIOS VS. THEIR BENCHMARKS
PERIODS ENDED MARCH 31, 2005
Returns
------------------------------------
6 Months 12 Months
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Ohio Portfolio
Class A 1.81% 3.38%
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Class B 1.56% 2.77%
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Class C 1.56% 2.76%
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LB Municipal Index 1.21% 2.67%
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Returns
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6 Months 12 Months
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Pennsylvania Portfolio
Class A 1.62% 2.77%
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Class B 1.27% 2.05%
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Class C 1.27% 2.05%
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LB Municipal Index 1.21% 2.67%
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Returns
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6 Months 12 Months
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Virginia Portfolio
Class A 2.04% 3.82%
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Class B 1.69% 3.11%
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Class C 1.79% 3.11%
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LB Municipal Index 1.21% 2.67%
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See Historical Performance and Benchmark disclosures on page 4.
(Historical Performance continued on next page)
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ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 7
Historical Performance
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ARIZONA PORTFOLIO
HISTORICAL PERFORMANCE
(continued from previous page)
AVERAGE ANNUAL RETURNS AS OF MARCH 31, 2005
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NAV Returns SEC Returns
Class A Shares
1 Year 4.80% 0.32%
5 Years 6.26% 5.34%
10 Years 6.41% 5.95%
SEC Yield* 3.73%
Taxable Equivalent Yield** 7.47%
Class B Shares
1 Year 3.97% 0.97%
5 Years 5.52% 5.52%
10 Years(a) 5.97% 5.97%
SEC Yield* 3.20%
Taxable Equivalent Yield** 5.98%
Class C Shares
1 Year 3.98% 2.98%
5 Years 5.52% 5.52%
10 Years 5.68% 5.68%
SEC Yield* 3.21%
Taxable Equivalent Yield** 5.98%
SEC AVERAGE ANNUAL RETURNS (WITH SALES CHARGES)
AS OF THE MOST RECENT CALENDAR QUARTER-END (MARCH 31, 2005)
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Class A Shares
1 Year 0.32%
5 Years 5.34%
10 Years 5.95%
Class B Shares
1 Year 0.97%
5 Years 5.52%
10 Years(a) 5.97%
Class C Shares
1 Year 2.98%
5 Years 5.52%
10 Years 5.68%
(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, 2005.
** 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.
See Historical Performance disclosures on page 4.
(Historical Performance continued on next page)
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8 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Historical Performance
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FLORIDA PORTFOLIO
HISTORICAL PERFORMANCE
(continued from previous page)
AVERAGE ANNUAL RETURNS AS OF MARCH 31, 2005
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NAV Returns SEC Returns
Class A Shares
1 Year 3.78% -0.65%
5 Years 6.49% 5.57%
10 Years 6.51% 6.04%
SEC Yield* 3.89%
Taxable Equivalent Yield** 8.37%
Class B Shares
1 Year 2.96% 0.00%
5 Years 5.72% 5.72%
10 Years(a) 6.05% 6.05%
SEC Yield* 3.36%
Taxable Equivalent Yield** 6.34%
Class C Shares
1 Year 2.97% 1.98%
5 Years 5.72% 5.72%
10 Years 5.75% 5.75%
SEC Yield* 3.36%
Taxable Equivalent Yield** 6.34%
SEC AVERAGE ANNUAL RETURNS (WITH SALES CHARGES)
AS OF THE MOST RECENT CALENDAR QUARTER-END (MARCH 31, 2005)
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Class A Shares
1 Year -0.65%
5 Years 5.57%
10 Years 6.04%
Class B Shares
1 Year 0.00%
5 Years 5.72%
10 Years(a) 6.05%
Class C Shares
1 Year 1.98%
5 Years 5.72%
10 Years 5.75%
(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, 2005.
** 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.
See Historical Performance disclosures on page 4.
(Historical Performance continued on next page)
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ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 9
Historical Performance
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MASSACHUSETTS PORTFOLIO
HISTORICAL PERFORMANCE
(continued from previous page)
AVERAGE ANNUAL RETURNS AS OF MARCH 31, 2005
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NAV Returns SEC Returns
Class A Shares
1 Year 3.89% -0.57%
5 Years 5.95% 5.04%
10 Years 6.44% 5.97%
SEC Yield* 3.58%
Taxable Equivalent Yield** 7.88%
Class B Shares
1 Year 3.17% 0.19%
5 Years 5.22% 5.22%
10 Years(a) 6.01% 6.01%
SEC Yield* 3.04%
Taxable Equivalent Yield** 6.29%
Class C Shares
1 Year 3.17% 2.18%
5 Years 5.22% 5.22%
10 Years 5.72% 5.72%
SEC Yield* 3.04%
Taxable Equivalent Yield** 6.30%
SEC AVERAGE ANNUAL RETURNS (WITH SALES CHARGES)
AS OF THE MOST RECENT CALENDAR QUARTER-END (MARCH 31, 2005)
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Class A Shares
1 Year -0.57%
5 Years 5.04%
10 Years 5.97%
Class B Shares
1 Year 0.19%
5 Years 5.22%
10 Years(a) 6.01%
Class C Shares
1 Year 2.18%
5 Years 5.22%
10 Years 5.72%
(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, 2005.
** 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.
See Historical Performance disclosures on page 4.
(Historical Performance continued on next page)
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10 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Historical Performance
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MICHIGAN PORTFOLIO
HISTORICAL PERFORMANCE
(continued from previous page)
AVERAGE ANNUAL RETURNS AS OF MARCH 31, 2005
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NAV Returns SEC Returns
Class A Shares
1 Year 3.67% -0.72%
5 Years 6.53% 5.61%
10 Years 6.85% 6.39%
SEC Yield* 3.73%
Taxable Equivalent Yield** 7.44%
Class B Shares
1 Year 3.05% 0.07%
5 Years 5.81% 5.81%
10 Years(a) 6.40% 6.40%
SEC Yield* 3.20%
Taxable Equivalent Yield** 5.84%
Class C Shares
1 Year 3.05% 2.06%
5 Years 5.81% 5.81%
10 Years 6.10% 6.10%
SEC Yield* 3.20%
Taxable Equivalent Yield** 5.84%
SEC AVERAGE ANNUAL RETURNS (WITH SALES CHARGES)
AS OF THE MOST RECENT CALENDAR QUARTER-END (MARCH 31, 2005)
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Class A Shares
1 Year -0.72%
5 Years 5.61%
10 Years 6.39%
Class B Shares
1 Year 0.07%
5 Years 5.81%
10 Years(a) 6.40%
Class C Shares
1 Year 2.06%
5 Years 5.81%
10 Years 6.10%
(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, 2005.
** 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.
See Historical Performance disclosures on page 4.
(Historical Performance continued on next page)
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ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 11
Historical Performance
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MINNESOTA PORTFOLIO
HISTORICAL PERFORMANCE
(continued from previous page)
AVERAGE ANNUAL RETURNS AS OF MARCH 31, 2005
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NAV Returns SEC Returns
Class A Shares
1 Year 2.90% -1.51%
5 Years 6.09% 5.16%
10 Years 6.06% 5.60%
SEC Yield* 3.46%
Taxable Equivalent Yield** 7.91%
Class B Shares
1 Year 2.09% -0.87%
5 Years 5.34% 5.34%
10 Years(a) 5.60% 5.60%
SEC Yield* 2.91%
Taxable Equivalent Yield** 5.79%
Class C Shares
1 Year 2.18% 1.20%
5 Years 5.35% 5.35%
10 Years 5.32% 5.32%
SEC Yield* 2.91%
Taxable Equivalent Yield** 5.78%
SEC AVERAGE ANNUAL RETURNS (WITH SALES CHARGES)
AS OF THE MOST RECENT CALENDAR QUARTER-END (MARCH 31, 2005)
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Class A Shares
1 Year -1.51%
5 Years 5.16%
10 Years 5.60%
Class B Shares
1 Year -0.87%
5 Years 5.34%
10 Years(a) 5.60%
Class C Shares
1 Year 1.20%
5 Years 5.35%
10 Years 5.32%
(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, 2005.
** 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.
See Historical Performance disclosures on page 4.
(Historical Performance continued on next page)
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12 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Historical Performance
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NEW JERSEY PORTFOLIO
HISTORICAL PERFORMANCE
(continued from previous page)
AVERAGE ANNUAL RETURNS AS OF MARCH 31, 2005
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NAV Returns SEC Returns
Class A Shares
1 Year 3.41% -0.97%
5 Years 5.27% 4.36%
10 Years 5.73% 5.27%
SEC Yield* 3.59%
Taxable Equivalent Yield** 8.86%
Class B Shares
1 Year 2.80% -0.17%
5 Years 4.54% 4.54%
10 Years(a) 5.27% 5.27%
SEC Yield* 3.04%
Taxable Equivalent Yield** 6.37%
Class C Shares
1 Year 2.69% 1.70%
5 Years 4.52% 4.52%
10 Years 4.97% 4.97%
SEC Yield* 3.04%
Taxable Equivalent Yield** 6.37%
SEC AVERAGE ANNUAL RETURNS (WITH SALES CHARGES)
AS OF THE MOST RECENT CALENDAR QUARTER-END (MARCH 31, 2005)
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Class A Shares
1 Year -0.97%
5 Years 4.36%
10 Years 5.27%
Class B Shares
1 Year -0.17%
5 Years 4.54%
10 Years(a) 5.27%
Class C Shares
1 Year 1.70%
5 Years 4.52%
10 Years 4.97%
(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, 2005.
** 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.
See Historical Performance disclosures on page 4.
(Historical Performance continued on next page)
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ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 13
Historical Performance
- --------------------------------------------------------------------------------
OHIO PORTFOLIO
HISTORICAL PERFORMANCE
(continued from previous page)
AVERAGE ANNUAL RETURNS AS OF MARCH 31, 2005
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NAV Returns SEC Returns
Class A Shares
1 Year 3.38% -1.01%
5 Years 5.98% 5.06%
10 Years 6.03% 5.57%
SEC Yield* 3.49%
Taxable Equivalent Yield** 8.15%
Class B Shares
1 Year 2.77% -0.21%
5 Years 5.23% 5.23%
10 Years(a) 5.58% 5.58%
SEC Yield* 2.94%
Taxable Equivalent Yield** 5.94%
Class C Shares
1 Year 2.76% 1.77%
5 Years 5.23% 5.23%
10 Years 5.29% 5.29%
SEC Yield* 2.93%
Taxable Equivalent Yield** 5.94%
SEC AVERAGE ANNUAL RETURNS (WITH SALES CHARGES)
AS OF THE MOST RECENT CALENDAR QUARTER-END (MARCH 31, 2005)
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Class A Shares
1 Year -1.01%
5 Years 5.06%
10 Years 5.57%
Class B Shares
1 Year -0.21%
5 Years 5.23%
10 Years(a) 5.58%
Class C Shares
1 Year 1.77%
5 Years 5.23%
10 Years 5.29%
(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, 2005.
** 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.
See Historical Performance disclosures on page 4.
(Historical Performance continued on next page)
- --------------------------------------------------------------------------------
14 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Historical Performance
- --------------------------------------------------------------------------------
PENNSYLVANIA PORTFOLIO
HISTORICAL PERFORMANCE
(continued from previous page)
AVERAGE ANNUAL RETURNS AS OF MARCH 31, 2005
- --------------------------------------------------------------------------------
NAV Returns SEC Returns
Class A Shares
1 Year 2.77% -1.60%
5 Years 6.42% 5.50%
10 Years 6.36% 5.89%
SEC Yield* 3.64%
Taxable Equivalent Yield** 7.76%
Class B Shares
1 Year 2.05% -0.91%
5 Years 5.68% 5.68%
10 Years(a) 5.90% 5.90%
SEC Yield* 3.10%
Taxable Equivalent Yield** 5.90%
Class C Shares
1 Year 2.05% 1.06%
5 Years 5.68% 5.68%
10 Years 5.61% 5.61%
SEC Yield* 3.10%
Taxable Equivalent Yield** 5.90%
SEC AVERAGE ANNUAL RETURNS (WITH SALES CHARGES)
AS OF THE MOST RECENT CALENDAR QUARTER-END (MARCH 31, 2005)
- --------------------------------------------------------------------------------
Class A Shares
1 Year -1.60%
5 Years 5.50%
10 Years 5.89%
Class B Shares
1 Year -0.91%
5 Years 5.68%
10 Years(a) 5.90%
Class C Shares
1 Year 1.06%
5 Years 5.68%
10 Years 5.61%
(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, 2005.
** 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.
See Historical Performance disclosures on page 4.
(Historical Performance continued on next page)
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 15
Historical Performance
- --------------------------------------------------------------------------------
VIRGINIA PORTFOLIO
HISTORICAL PERFORMANCE
(continued from previous page)
AVERAGE ANNUAL RETURNS AS OF MARCH 31, 2005
- --------------------------------------------------------------------------------
NAV Returns SEC Returns
Class A Shares
1 Year 3.82% -0.58%
5 Years 6.16% 5.25%
10 Years 6.65% 6.19%
SEC Yield* 3.61%
Taxable Equivalent Yield** 8.21%
Class B Shares
1 Year 3.11% 0.14%
5 Years 5.43% 5.43%
10 Years(a) 6.22% 6.22%
SEC Yield* 3.08%
Taxable Equivalent Yield** 6.51%
Class C Shares
1 Year 3.11% 2.12%
5 Years 5.44% 5.44%
10 Years 5.93% 5.93%
SEC Yield* 3.08%
Taxable Equivalent Yield** 6.53%
SEC AVERAGE ANNUAL RETURNS (WITH SALES CHARGES)
AS OF THE MOST RECENT CALENDAR QUARTER-END (MARCH 31, 2005)
- --------------------------------------------------------------------------------
Class A Shares
1 Year -0.58%
5 Years 5.25%
10 Years 6.19%
Class B Shares
1 Year 0.14%
5 Years 5.43%
10 Years(a) 6.22%
Class C Shares
1 Year 2.12%
5 Years 5.44%
10 Years 5.93%
(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, 2005.
** 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.
See Historical Performance disclosures on page 4.
- --------------------------------------------------------------------------------
16 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Fund Expenses
- --------------------------------------------------------------------------------
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.
Arizona Portfolio
Beginning Ending
Account Value Account Value Expenses Paid
October 1, 2004 March 31, 2005 During Period*
- ----------------------------------------------------------------------------------------------------
Class A
Actual $ 1,000 $ 1,023.71 $ 3.94
Hypothetical (5% return before expenses) $ 1,000 $ 1,021.04 $ 3.93
- ----------------------------------------------------------------------------------------------------
Class B
Actual $ 1,000 $ 1,019.25 $ 7.45
Hypothetical (5% return before expenses) $ 1,000 $ 1,017.55 $ 7.44
- ----------------------------------------------------------------------------------------------------
Class C
Actual $ 1,000 $ 1,019.25 $ 7.45
Hypothetical (5% return before expenses) $ 1,000 $ 1,017.55 $ 7.44
- ----------------------------------------------------------------------------------------------------
(Fund Expenses continued on next page)
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 17
Fund Expenses
- --------------------------------------------------------------------------------
FUND EXPENSES
(continued from previous page)
Florida Portfolio
Beginning Ending
Account Value Account Value Expenses Paid
October 1, 2004 March 31, 2005 During Period*
- ----------------------------------------------------------------------------------------------------
Class A
Actual $ 1,000 $ 1,019.84 $ 3.93
Hypothetical (5% return before expenses) $ 1,000 $ 1,021.04 $ 3.93
- ----------------------------------------------------------------------------------------------------
Class B
Actual $ 1,000 $ 1,015.33 $ 7.44
Hypothetical (5% return before expenses) $ 1,000 $ 1,017.55 $ 7.44
- ----------------------------------------------------------------------------------------------------
Class C
Actual $ 1,000 $ 1,016.32 $ 7.44
Hypothetical (5% return before expenses) $ 1,000 $ 1,017.55 $ 7.44
- ----------------------------------------------------------------------------------------------------
Massachusetts Portfolio
Beginning Ending
Account Value Account Value Expenses Paid
October 1, 2004 March 31, 2005 During Period*
- ----------------------------------------------------------------------------------------------------
Class A
Actual $ 1,000 $ 1,016.67 $ 4.12
Hypothetical (5% return before expenses) $ 1,000 $ 1,020.84 $ 4.13
- ----------------------------------------------------------------------------------------------------
Class B
Actual $ 1,000 $ 1,012.25 $ 7.63
Hypothetical (5% return before expenses) $ 1,000 $ 1,017.35 $ 7.64
- ----------------------------------------------------------------------------------------------------
Class C
Actual $ 1,000 $ 1,012.31 $ 7.63
Hypothetical (5% return before expenses) $ 1,000 $ 1,017.35 $ 7.64
- ----------------------------------------------------------------------------------------------------
Michigan Portfolio
Beginning Ending
Account Value Account Value Expenses Paid
October 1, 2004 March 31, 2005 During Period*
- ----------------------------------------------------------------------------------------------------
Class A
Actual $ 1,000 $ 1,019.73 $ 5.09
Hypothetical (5% return before expenses) $ 1,000 $ 1,019.90 $ 5.09
- ----------------------------------------------------------------------------------------------------
Class B
Actual $ 1,000 $ 1,017.23 $ 8.60
Hypothetical (5% return before expenses) $ 1,000 $ 1,016.40 $ 8.60
- ----------------------------------------------------------------------------------------------------
Class C
Actual $ 1,000 $ 1,017.24 $ 8.60
Hypothetical (5% return before expenses) $ 1,000 $ 1,016.40 $ 8.60
- ----------------------------------------------------------------------------------------------------
(Fund Expenses continued on next page)
- --------------------------------------------------------------------------------
18 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Fund Expenses
- --------------------------------------------------------------------------------
FUND EXPENSES
(continued from previous page)
Minnesota Portfolio
Beginning Ending
Account Value Account Value Expenses Paid
October 1, 2004 March 31, 2005 During Period*
- ----------------------------------------------------------------------------------------------------
Class A
Actual $ 1,000 $ 1,019.74 $ 4.53
Hypothetical (5% return before expenses) $ 1,000 $ 1,020.44 $ 4.53
- ----------------------------------------------------------------------------------------------------
Class B
Actual $ 1,000 $ 1,015.24 $ 8.04
Hypothetical (5% return before expenses) $ 1,000 $ 1,016.95 $ 8.05
- ----------------------------------------------------------------------------------------------------
Class C
Actual $ 1,000 $ 1,016.19 $ 8.04
Hypothetical (5% return before expenses) $ 1,000 $ 1,016.95 $ 8.05
- ----------------------------------------------------------------------------------------------------
New Jersey Portfolio
Beginning Ending
Account Value Account Value Expenses Paid
October 1, 2004 March 31, 2005 During Period*
- ----------------------------------------------------------------------------------------------------
Class A
Actual $ 1,000 $ 1,021.95 $ 4.39
Hypothetical (5% return before expenses) $ 1,000 $ 1,020.59 $ 4.38
- ----------------------------------------------------------------------------------------------------
Class B
Actual $ 1,000 $ 1,019.48 $ 7.90
Hypothetical (5% return before expenses) $ 1,000 $ 1,017.10 $ 7.90
- ----------------------------------------------------------------------------------------------------
Class C
Actual $ 1,000 $ 1,019.47 $ 7.90
Hypothetical (5% return before expenses) $ 1,000 $ 1,017.10 $ 7.90
- ----------------------------------------------------------------------------------------------------
Ohio Portfolio
Beginning Ending
Account Value Account Value Expenses Paid
October 1, 2004 March 31, 2005 During Period*
- ----------------------------------------------------------------------------------------------------
Class A
Actual $ 1,000 $ 1,018.06 $ 4.28
Hypothetical (5% return before expenses) $ 1,000 $ 1,020.69 $ 4.28
- ----------------------------------------------------------------------------------------------------
Class B
Actual $ 1,000 $ 1,015.59 $ 7.79
Hypothetical (5% return before expenses) $ 1,000 $ 1,017.20 $ 7.80
- ----------------------------------------------------------------------------------------------------
Class C
Actual $ 1,000 $ 1,015.57 $ 7.79
Hypothetical (5% return before expenses) $ 1,000 $ 1,017.20 $ 7.80
- ----------------------------------------------------------------------------------------------------
(Fund Expenses continued on next page)
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 19
Fund Expenses
- --------------------------------------------------------------------------------
FUND EXPENSES
(continued from previous page)
Pennsylvania Portfolio
Beginning Ending
Account Value Account Value Expenses Paid
October 1, 2004 March 31, 2005 During Period*
- ----------------------------------------------------------------------------------------------------
Class A
Actual $ 1,000 $ 1,016.19 $ 4.78
Hypothetical (5% return before expenses) $ 1,000 $ 1,020.19 $ 4.78
- ----------------------------------------------------------------------------------------------------
Class B
Actual $ 1,000 $ 1,012.66 $ 8.28
Hypothetical (5% return before expenses) $ 1,000 $ 1,016.70 $ 8.30
- ----------------------------------------------------------------------------------------------------
Class C
Actual $ 1,000 $ 1,012.67 $ 8.28
Hypothetical (5% return before expenses) $ 1,000 $ 1,016.70 $ 8.30
- ----------------------------------------------------------------------------------------------------
Virginia Portfolio
Beginning Ending
Account Value Account Value Expenses Paid
October 1, 2004 March 31, 2005 During Period*
- ----------------------------------------------------------------------------------------------------
Class A
Actual $ 1,000 $ 1,020.37 $ 3.63
Hypothetical (5% return before expenses) $ 1,000 $ 1,021.34 $ 3.63
- ----------------------------------------------------------------------------------------------------
Class B
Actual $ 1,000 $ 1,016.87 $ 7.14
Hypothetical (5% return before expenses) $ 1,000 $ 1,017.85 $ 7.14
- ----------------------------------------------------------------------------------------------------
Class C
Actual $ 1,000 $ 1,017.85 $ 7.14
Hypothetical (5% return before expenses) $ 1,000 $ 1,017.85 $ 7.14
- ----------------------------------------------------------------------------------------------------
* Expenses are equal to each Class' annualized expense ratio, shown in the
table below, multiplied by the number of days in the most recent fiscal
half-year/365 (to reflect the one-half year period).
Annualized Expense Ratio
------------------------------------
Class A Class B Class C
- ------------------------------------------------------------------------------
Arizona Portfolio 0.78% 1.48% 1.48%
Florida Portfolio 0.78% 1.48% 1.48%
Massachusetts Portfolio 0.82% 1.52% 1.52%
Michigan Portfolio 1.01% 1.71% 1.71%
Minnesota Portfolio 0.90% 1.60% 1.60%
New Jersey Portfolio 0.87% 1.57% 1.57%
Ohio Portfolio 0.85% 1.55% 1.55%
Pennsylvania Portfolio 0.95% 1.65% 1.65%
Virginia Portfolio 0.72% 1.42% 1.42%
- --------------------------------------------------------------------------------
20 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Bond Rating Summary
- --------------------------------------------------------------------------------
BOND RATING SUMMARY*
March 31, 2005 (unaudited)
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
ARIZONA PORTFOLIO
61.8% AAA
7.8% AA
7.2% A
13.0% BBB
10.2% BB
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
FLORIDA PORTFOLIO
56.0% AAA
13.5% AA
11.0% A
8.6% BBB
10.9% BB
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
MASSACHUSETTS PORTFOLIO
62.3% AAA
18.2% AA
5.1% A
9.5% BBB
4.9% BB
* All data are as of March 31, 2005. Each Portfolio's quality rating
distribution is expressed as a percentage of the Portfolio's total
investments rated in particular ratings categories by Standard & Poor's
Rating Services and Moody's Investors Service. The distributions may vary
over time. If ratings are not available, the Fund's Adviser will assign
ratings that are considered to be of equivalent quality to such ratings.
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 21
Bond Rating Summary
- --------------------------------------------------------------------------------
BOND RATING SUMMARY*
March 31, 2005 (unaudited)
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
MICHIGAN PORTFOLIO
59.3% AAA
16.5% AA
5.2% A
8.6% BBB
10.4% BB
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
MINNESOTA PORTFOLIO
61.1% AAA
11.6% AA
15.6% A
6.0% BBB
5.7% BB
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
NEW JERSEY PORTFOLIO
54.2% AAA
12.8% AA
19.5% A
8.2% BBB
5.3% BB
* All data are as of March 31, 2005. Each Portfolio's quality rating
distribution is expressed as a percentage of the Portfolio's total
investments rated in particular ratings categories by Standard & Poor's
Rating Services and Moody's Investors Service. The distributions may vary
over time. If ratings are not available, the Fund's Adviser will assign
ratings that are considered to be of equivalent quality to such ratings.
- --------------------------------------------------------------------------------
22 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Bond Rating Summary
- --------------------------------------------------------------------------------
BOND RATING SUMMARY*
March 31, 2005 (unaudited)
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
OHIO PORTFOLIO
60.2% AAA
6.7% AA
18.2% A
9.7% BBB
5.2% BB
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
PENNSYLVANIA PORTFOLIO
52.5% AAA
18.3% AA
12.4% A
8.6% BBB
7.9% BB
0.3% B
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
VIRGINIA PORTFOLIO
42.7% AAA
26.2% AA
14.4% A
5.0% BBB
11.7% BB
* All data are as of March 31, 2005. Each Portfolio's quality rating
distribution is expressed as a percentage of the Portfolio's total
investments rated in particular ratings categories by Standard & Poor's
Rating Services and Moody's Investors Service. The distributions may vary
over time. If ratings are not available, the Fund's Adviser will assign
ratings that are considered to be of equivalent quality to such ratings.
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 23
Arizona Portfolio - Portfolio of Investments
- --------------------------------------------------------------------------------
ARIZONA PORTFOLIO
PORTFOLIO OF INVESTMENTS
March 31, 2005 (unaudited)
Principal
Amount
(000) Value
- --------------------------------------------------------------------------
MUNICIPAL BONDS & NOTES - 99.5%
Long-Term Municipal Bonds - 92.6%
Arizona - 79.3%
Arizona Cap Facs Fin Corp Student Hsg Rev
(Arizona St Univ Proj) Ser 00
6.25%, 9/01/32........................... $ 2,000 $ 2,065,780
Arizona Health Facs Auth Rev
(Blood System, Inc.) Ser 04
5.00%, 4/01/19........................... 750 767,993
Arizona State Transn Brd Hwy Rev
Ser 04B
5.00%, 7/01/24........................... 4,000 4,177,240
Arizona School Brd Fac Rev
Ser 01
5.00%, 7/01/19........................... 6,730 7,147,528
AMBAC Ser 04
9.11%, 7/01/16(a)(b)..................... 5,000 6,477,400
Arizona State Univ Ctfs Partn
(Research Infrastructure Projs)
AMBAC Ser 05A
5.00%, 9/01/23........................... 2,000 2,092,160
Arizona State Univ Revs
AMBAC Ser 05
5.00%, 9/01/26........................... 1,000 1,042,260
Arizona Student Loan Auth
(Student Loan Rev)
Ser 99B-1 AMT
5.90%, 5/01/24........................... 1,500 1,588,530
Arizona Tourirsm & Sports Auth Tax Rev
(Multipurpose Stadium Fac) MBIA Ser 03A
5.00%, 7/01/25........................... 2,400 2,491,728
Estrella Mtn Ranch Cmnty Fac Dist
(Golf Village) Ser 01A
7.875%, 7/01/25.......................... 3,706 4,080,158
(Desert Village)
7.375%, 7/01/27.......................... 2,000 2,161,580
Gilbert Wtr Res Mun Ppty Corp.
(Wastewater Sys & Util Rev) Ser 04
4.90%, 4/01/19........................... 2,500 2,457,775
Glendale IDA Ed Fac
(Midwestern Univ) Ser 01A
5.875%, 5/15/31.......................... 3,770 4,026,963
(Midwestern Univ) CONNIE LEE
Ser 96A
6.00%, 5/15/26........................... 475 497,705
- --------------------------------------------------------------------------------
24 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Arizona Portfolio - Portfolio of Investments
- --------------------------------------------------------------------------------
Principal
Amount
(000) Value
- --------------------------------------------------------------------------
Goodyear Cmnty Fac Dist
(Palm Valley) Ser 96C
7.25%, 7/01/16........................... $ 3,437 $ 3,589,500
Goodyear IDA Water & Sewer Rev
(Litchfield Pk Svc Proj) Ser 99 AMT
5.95%, 10/01/23......................... 3,160 3,242,729
Greater Arizona Dev Auth Infrastructure Rev
MBIA Ser 05A
5.00%, 8/01/21........................... 1,600 1,688,384
Hassayampa Cmnty Fac Dist #2
(Forest Ridge Estates) Ser 00
7.50%, 7/01/24........................... 855 939,303
Hassayampa Cmnty Fac District
Ser 96
7.75%, 7/01/21........................... 3,005 3,212,045
Maricopa Cnty MFHR
(Syl-Mar Apts Proj) GNMA Ser 01 AMT
6.10%, 4/20/36........................... 2,470 2,627,833
(Tierra Antigua Proj)
AMBAC Ser 01A-1 AMT
5.40%, 6/01/34........................... 2,765 2,811,120
Maricopa Cnty SFMR
(Mortgage Rev)
GNMA/FNMA/FHLMC AMT
Ser 00-1C
6.25%, 12/01/30 ......................... 315 322,336
Ser 01
5.63%, 3/01/33........................... 1,655 1,696,077
Ser 02-B1
6.20%, 3/01/34........................... 1,140 1,184,517
Mesa Cnty IDA Health Fac
(Discovery Hlth Sys) MBIA Ser 99A
5.75%, 1/01/25........................... 15,000 16,286,849
Mohave Cnty IDA MFHR
(Chris & Silver Ridge) GNMA Ser 96
6.375%, 11/01/31......................... 295 311,912
Northern Arizona University Ctfs Partn
(Northern Arizona University
Research Projs)
AMBAC Ser 04
5.125%, 9/01/21-9/01/24.................. 7,140 7,618,586
Phoenix Hlth Facs Auth Hosp Rev
(Children's Hospital) Ser 02A
6.00%, 2/15/32........................... 5,700 5,727,816
Phoenix IDA SFMR
(Mortgage Rev) GNMA Ser 02A-1 AMT
5.75%, 9/01/33........................... 510 524,127
Pima Cnty IDA MFHR
(La Hacienda) GNMA Ser 99
7.00%, 12/20/31.......................... 1,290 1,390,375
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 25
Arizona Portfolio - Portfolio of Investments
- --------------------------------------------------------------------------------
Principal
Amount
(000) Value
- --------------------------------------------------------------------------
Pima Cnty IDA SFMR
(Mortgage Rev) GNMA/FNMA AMT
Ser 01A-1
5.35%, 11/01/24.......................... $ 265 $ 267,586
Ser 99B-1
6.10%, 5/01/31.......................... 315 325,017
Pima Cnty IDA Ed Rev
(Horizon Cmnty Learning Ctr) Ser 05
5.125%, 6/01/20.......................... 1,500 1,514,190
Pinal Cnty Ctfs Partn
Ser 04
5.00%, 12/01/24.......................... 3,780 3,849,325
Pinal Cnty Prop Corp.
AMBAC Ser 01
5.125%, 6/01/21.......................... 1,000 1,056,600
Pronghorn Ranch Cmnty Fac Dist
Ser 01
7.00%, 7/15/27........................... 2,000 2,079,240
Show Low Assessment Dist # 6
(Torreon) ACA Ser 00
6.00%, 1/01/18........................... 960 1,026,912
Stoneridge Cmnty Fac Dist
Ser 01
6.75%, 7/15/26........................... 3,250 3,497,585
Sundance Cmnty Fac Dist
Ser 02
7.75%, 7/01/22........................... 2,900 2,951,591
Tax Exempt Mun Infrastructure Impt Trade MD
Ser 04B Cl.A
4.05%, 12/01/08(b)....................... 4,470 4,395,217
Tolleson IDA MFHR
(Copper Cove) GNMA Ser 01A AMT
5.50%, 11/20/41.......................... 5,825 5,931,423
Tucson & Pima Hsg Fin Auth SFMR
(Mortgage Rev) GNMA/FNMA AMT
Ser 01
6.35%, 1/01/34 .......................... 2,450 2,562,749
Ser 02A
5.50%, 1/01/35.......................... 855 873,049
Tucson Airport Auth Rev
AMBAC Ser 01 AMT
5.35%, 6/01/31........................... 6,475 6,700,783
Tucson Arizona COP
MBIA Ser 04A
5.00%, 7/01/23-7/01/24................... 6,100 6,379,484
Tucson Higher Ed
(University of Arizona) AMBAC Ser 02A
5.00%, 7/15/32........................... 1,000 1,025,050
- --------------------------------------------------------------------------------
26 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Arizona Portfolio - Portfolio of Investments
- --------------------------------------------------------------------------------
Principal
Amount
(000) Value
- --------------------------------------------------------------------------
University of Arizona Ctfs Partn
AMBAC Ser 03
7.904%, 6/01/15(a)(b).................... $ 4,020 $ 4,773,268
Yavapai Cnty Hosp Rev
(Regional Medical Center) RADIAN
Ser 03A
5.25%, 8/01/21........................... 4,000 4,169,400
---------------
147,626,778
---------------
California - 1.6%
California State GO
5.00%, 2/01/33........................... 3,020 3,084,970
---------------
Florida - 1.1%
Double Branch Cmnty Dev Dist
(Oakleaf Village) Ser 02A
6.70%, 5/01/34........................... 1,000 1,073,830
Fiddler's Creek Cmnty Dev Dist
Ser 99B
5.80%, 5/01/21........................... 990 1,025,274
---------------
2,099,104
---------------
Puerto Rico - 8.9%
Puerto Rico Elec Pwr Auth Rev
XLCA Ser 02-1
5.25%, 7/01/22(c)........................ 8,000 8,599,120
Puerto Rico GO
FGIC Ser 02A
5.00%, 7/01/32........................... 2,500 2,722,825
Puerto Rico Hwy & Trans Auth Rev
FSA Ser 02D
5.00%, 7/01/32........................... 3,400 3,514,410
Puerto Rico Ind Fin Auth Hlth Fac
(Ascension Health) Ser 00A
6.125%, 11/15/30......................... 1,500 1,671,525
---------------
16,507,880
---------------
Texas - 1.0%
Texas Turnpike Auth Rev
AMBAC Ser 02A
5.50%, 8/15/39........................... 1,750 1,868,685
---------------
Virgin Islands - 0.7%
Virgin Islands Pub Fin Auth Rev
ACA Ser 03
5.00%, 10/01/31.......................... 1,250 1,264,113
---------------
Total Long-Term Municipal Bonds
(cost $166,406,240)...................... 172,451,530
---------------
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 27
Arizona Portfolio - Portfolio of Investments
- --------------------------------------------------------------------------------
Principal
Amount
(000) Value
- --------------------------------------------------------------------------
Short-Term Municipal Notes(d) - 6.9%
Arizona - 0.5%
Coconino Cnty PCR
(Arizona Pub Svc Co. Proj)
Ser 98 AMT
2.30%, 11/01/33 ......................... $ 1,000 $ 1,000,000
---------------
California - 1.1%
Los Angeles Water & Power Rev
Ser 01B
2.28%, 7/01/34........................... 1,975 1,975,000
---------------
Massachusetts - 1.1%
Massachusetts State GO
(Central Artery) Ser 00A
2.31%, 12/01/30.......................... 2,000 2,000,000
---------------
New York - 0.8%
New York City Transitional Fin Auth
(NYC Recovery) Ser 03
2.28%, 11/01/22.......................... 1,500 1,500,000
---------------
Texas - 2.3%
Gulf Coast Waste Disp Auth
(Amoco Oil Proj) Ser 95 AMT
2.35%, 7/01/27........................... 4,400 4,400,000
---------------
Wyoming - 1.1%
Sublette Cnty Pollutn Ctl Rev
(Exxon Proj) Ser 87A AMT
2.25%, 7/01/17........................... 2,000 2,000,000
---------------
Total Short-Term Municipal Notes
(cost $12,875,000)....................... 12,875,000
---------------
Total Investments - 99.5%
(cost $179,281,240)...................... 185,326,530
Other assets less liabilities - 0.5%........ 933,075
---------------
Net Assets - 100%........................... $ 186,259,605
===============
- --------------------------------------------------------------------------------
28 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Arizona Portfolio - Portfolio of Investments
- --------------------------------------------------------------------------------
INTEREST RATE SWAP CONTRACTS (see Note D)
Rate Type
-------------------------
Payment Payment
Notional made received Unrealized
Swap Amount Termination by the by the Appreciation/
Counterparty (000) Date Portfolio Portfolio (Depreciation)
------------ ------------ ----------- ---------- --------- -------------
Goldman 76.48% of
Sachs & Co. $ 11,100 2/03/06 1 month LIBOR+ BMA* $ (17,738)
85.10% of
Merrill Lynch 11,100 2/03/06 BMA* 1 month LIBOR+ 54,950
* BMA (Bond Market Association)
+ LIBOR (London Interbank Offered Rate)
(a) Inverse floater - security with variable or floating interest rate that
moves in opposite direction of short-term rates.
(b) Security is exempt from registration under Rule 144A of the Securities Act
of 1933. This security is considered liquid and may be resold in
transactions exempt from registration, normally to qualified institutional
buyers. At March 31, 2005, the aggregate market value of this security
amounted to $4,395,217 or 2.4% of the net assets.
(c) Represents entire or partial position segregated as collateral for the
interest rate swap.
(d) Variable rate coupon, rate shown as of March 31, 2005.
Glossary of Terms:
ACA American Capital Access
AMBAC American Municipal Bond Assurance Corporation
AMT Alternative Minimum Tax
CONNIE LEE Connie Lee Insurance Company
COP Certificate of Participation
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
MBIA Municipal Bond Investors Assurance
MFHR Multi-Family Housing Revenue
PCR Pollution Control Revenue
RADIAN Radian Group, Inc.
SFMR Single Family Mortgage Revenue
XLCA XL Capital Assurance, Inc.
See notes to financial statements.
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 29
Florida Portfolio - Portfolio of Investments
- --------------------------------------------------------------------------------
FLORIDA PORTFOLIO
PORTFOLIO OF INVESTMENTS
March 31, 2005 (unaudited)
Principal
Amount
(000) Value
- --------------------------------------------------------------------------
MUNICIPAL BONDS & NOTES - 100.8%
Long-Term Municipal Bonds - 100.1%
Florida - 90.5%
Beacon Tradeport Cmnty Dev Dist
Ser 02B
7.25%, 5/01/33 .......................... $ 1,770 $ 1,874,041
Bonnet Creek Resort Cmnty Dev Dist
Ser 02
7.25%, 5/01/18........................... 2,000 2,121,440
Capital Trust Agy Arpt Fac
(Cargo Acq Grp) Ser 02 AMT
6.25%, 1/01/19........................... 500 506,340
(Cargo Acq Grp) Ser 03 AMT
5.75%, 1/01/32........................... 2,000 1,957,320
Concorde Estates Cmnty Dev Dist
Ser 04B
5.00%, 5/01/11........................... 1,600 1,593,376
Crossings at Fleming Island Cmnty Dev Dist
(Eagle Harbor) Ser 00C
7.10%, 5/01/30........................... 2,240 2,369,315
Dade Cnty Hsg Fin Auth MFHR
(Golden Lakes Apts) Ser 97A AMT
6.00%, 11/01/32.......................... 250 255,993
6.05%, 11/01/39.......................... 750 768,570
Deltona Util Sys Rev
MBIA Ser 03
5.125%, 10/01/27......................... 2,440 2,548,360
Escambia Cnty Hsg Fin Auth SFMR
(Mortgage Rev) GNMA Ser 95B AMT
6.25%, 4/01/28........................... 6,605 6,737,099
Escambia Cnty PCR
(Champion Int'l Corp) Ser 96 AMT
6.40%, 9/01/30........................... 5,000 5,170,300
Florida Hsg Fin Agy MFHR
(Turtle Creek Apts) AMBAC Ser 96C AMT
6.20%, 5/01/36........................... 3,245 3,344,492
Florida Hsg Fin Corp MFHR
(Cobblestone Apts)
GNMA Ser 00K-1 AMT
6.10%, 6/01/42........................... 7,795 8,187,633
(Logans Pointe Apts) FSA Ser 99 AMT
6.00%, 6/01/39........................... 5,080 5,290,109
(Mystic Pointe II) GNMA Ser 00 AMT
6.30%, 12/01/41.......................... 1,165 1,234,947
(Raintree Apts) GNMA Ser 00 AMT
6.05%, 3/01/42(a)........................ 5,805 6,064,890
- --------------------------------------------------------------------------------
30 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Florida Portfolio - Portfolio of Investments
- --------------------------------------------------------------------------------
Principal
Amount
(000) Value
- --------------------------------------------------------------------------
(Sabal Chase Apts) FSA Ser 00 AMT
6.00%, 5/01/40........................... $ 3,650 $ 3,754,792
(Spring Harbor Apts) Ser 99C-1 AMT
5.90%, 8/01/39........................... 2,540 2,607,031
(Walker Ave Club) FSA Ser 00L-1 AMT
6.00%, 12/01/38.......................... 3,435 3,569,583
(Waverly Apts) FSA Ser 00C-1 AMT
6.50%, 7/01/40........................... 2,790 2,967,584
Florida State Correctional Privatization
Comm COP
AMBAC Ser 04B
5.00%, 8/01/24........................... 3,330 3,486,410
Florida State Brd of Ed Lottery Rev
Ser 03A
5.00%, 7/01/19........................... 4,890 5,204,134
Florida State Brd of Ed GO
MBIA Ser 02A
5.00%, 6/01/32........................... 2,500 2,575,800
Gateway Cmnty Dev Dist
(Sun City) Ser 03B
5.50%, 5/01/10........................... 685 693,261
Hamal Cmnty Dev Dist
Ser 01
6.65%, 5/01/21 .......................... 1,100 1,149,962
Herons Glen Recreation District
Ser 99
5.90%, 5/01/19........................... 2,680 2,751,074
Highlands Cnty Hlth Facs Auth
(Adventist/Sunbelt Hosp) Ser 01A
6.00%, 11/15/31.......................... 2,000 2,153,800
Hillsborough Cnty Arpt Auth
(Tampa Int'l Arpt) FGIC Ser 96A AMT
6.00%, 10/01/23.......................... 1,500 1,560,570
Indian Trace Dev Dist Special Assessment
(Water Management Special Benefit) MBIA
Ser 05
5.00%, 5/01/22........................... 680 710,736
Jacksonville Electrical Auth
AMBAC Ser 02B
5.00%, 10/01/26.......................... 3,925 4,066,261
MBIA Ser 02A
5.50%, 10/01/41(b)....................... 5,000 5,228,750
Series 02A
5.50%, 10/01/41.......................... 3,750 3,988,988
Lakeland Water & Wastewater Floater Rev
Ser 04
8.25%, 10/01/10(c)(e).................... 5,000 5,531,300
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 31
Florida Portfolio - Portfolio of Investments
- --------------------------------------------------------------------------------
Principal
Amount
(000) Value
- --------------------------------------------------------------------------
Lee Cnty Arpt Rev
(Southwest Int'l Arpt) FSA Ser 00A AMT
6.00%, 10/01/32.......................... $ 13,500 $ 14,787,629
Lee Cnty Hlth Facs Auth Rev
(Shell Point) Ser 99A
5.50%, 11/15/29.......................... 2,000 1,963,080
Manatee Cnty Hsg Fin Agy SFMR
(Mortgage Rev) GNMA
Ser 96-1 AMT
5.625%, 11/01/14......................... 70 70,010
Ser 99 AMT
6.25%, 11/01/28.......................... 920 935,309
Marshall Creek Cmnty Dev Dist
Ser 02A
6.625%, 5/01/32.......................... 1,000 1,047,100
Miami Beach Health Facs Auth Rev
(Mt Sinai Med Ctr) Ser 01A
6.80%, 11/15/31.......................... 4,100 4,388,968
Miami-Dade Cnty Hsg Fin Auth MFHR
(Cntry Club Villas Apts) Ser 99A AMT
6.20%, 10/01/39......................... 5,145 5,369,219
(Marbrisa Apts) FSA Ser 00-2A AMT
6.15%, 8/01/38........................... 1,515 1,608,203
Miami-Dade Cnty Hsg Fin Auth SFMR
(Home Ownership Mortgage) GNMA/FNMA
Ser 00A-1 AMT
6.00%, 10/01/32.......................... 1,140 1,157,898
Miromar Lakes Cmnty Dev Dist
Ser 00A
7.25%, 5/01/12........................... 3,445 3,618,628
North Broward Hosp Rev
Ser 01
6.00%, 1/15/31........................... 1,700 1,797,563
North Miami Hlth Facs Auth Rev
(Catholic Hlth Svcs Oblig Grp) Ser 96
6.00%, 8/15/24........................... 1,200 1,241,172
Northern Palm Beach Asses Dist
(Unit Development 27B) Ser 02
6.40%, 8/01/32........................... 1,120 1,149,994
Northern Palm Beach Cnty Impt Dist
(Mirasol Unit #43)
6.10%, 8/01/21........................... 710 737,456
6.125%, 8/01/31.......................... 1,000 1,030,400
Okeechobee Cnty Solid Waste Rev
(Waste Management) Ser 04A AMT
4.20%, 7/01/39........................... 3,500 3,501,855
Orange Cnty Hospital Rev
(Orlando Regional) Ser 02
5.75%, 12/01/32.......................... 1,320 1,405,536
- --------------------------------------------------------------------------------
32 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Florida Portfolio - Portfolio of Investments
- --------------------------------------------------------------------------------
Principal
Amount
(000) Value
- --------------------------------------------------------------------------
Orange Cnty Hsg Fin Auth MFHR
(Loma Vista Proj) Ser 99G AMT
5.50%, 3/01/32........................... $ 2,000 $ 1,974,720
Orange Cnty Sch Brd Ctfs Partn
AMBAC Ser 04
12.39%, 8/01/10(c)(e).................... 2,000 2,689,000
Orange County Hlth Facs Auth Rev
(Mayflower Retirement Proj)
Asset Gty Ser 99
5.25%, 6/01/29........................... 1,060 1,098,160
Orlando Util Cmnty Wtr & Elec Rev
Ser 02C
5.00%, 10/01/27.......................... 7,000 7,233,869
Osceola Cnty Sch Brd Ctfs Partn
FGIC Ser 04A
5.00%, 6/01/23........................... 2,955 3,102,573
Palm Beach Cnty IDR
(Lourdes-McKeen Residence) Ser 96
6.625%, 12/01/26......................... 4,000 4,326,120
Preserve at Wilderness Lake
Cmnty Dev Dist
Ser 02A
7.10%, 5/01/33........................... 1,485 1,580,634
South Miami Health Facs Hosp Rev
(Baptist Health)
5.25%, 11/15/33.......................... 2,000 2,046,200
St. Johns Cmnty Dev Dist
(Julington Creek Plantation) Ser 97
7.125%, 5/01/19.......................... 7,725 8,533,729
Tallahassee Hosp Rev
(Tallahassee Memorial) Ser 00
6.375%, 12/01/30......................... 2,750 2,827,715
Tampa Higher Ed
(Tampa University Proj) RADIAN Ser 02
5.625%, 4/01/32.......................... 3,175 3,416,681
Village Ctr Cmnty Dev Dist
5.125%, 10/01/28......................... 1,000 1,044,690
Volusia Cnty Ed Fac Auth
(Embry Riddle Aero Univ) Ser 99A
5.75%, 10/15/29.......................... 2,000 2,078,480
Waterlefe Cmnty Dev Dist
Ser 01
6.95%, 5/01/31........................... 720 767,023
Westchester Cmnty Dev Dist
Ser 03
6.00%, 5/01/23........................... 1,500 1,544,865
---------------
192,098,740
---------------
California - 1.4%
California State GO
5.00%, 2/01/32........................... 2,850 2,894,403
---------------
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 33
Florida Portfolio - Portfolio of Investments
- --------------------------------------------------------------------------------
Principal
Amount
(000) Value
- --------------------------------------------------------------------------
Connecticut - 2.7%
Connecticut State GO
MBIA Ser 04
7.43%, 12/01/11(c)(e).................... $ 5,000 $ 5,747,300
---------------
New Jersey - 1.0%
New Jersey Economic Dev Auth
(School Facilities Construction)
FGIC Ser 05K
5.25%, 12/15/15.......................... 2,000 2,193,760
---------------
Ohio - 1.5%
Cleveland Cuyahoga Port Auth
Ser 01
7.35%, 12/01/31 ......................... 3,000 3,144,750
---------------
South Carolina - 3.0%
South Carolina State Pub Svc Auth
(Revenue Bonds) FGIC Ser 05A
5.25%, 1/01/20-1/01/22................... 4,000 4,256,440
MBIA Ser 05B
5.00%, 1/01/17........................... 2,000 2,116,560
---------------
6,373,000
---------------
Total Long-Term Municipal Bonds
(cost $203,324,874) ..................... 212,451,953
---------------
Short-Term Municipal Notes(d) - 0.7%
Alaska - 0.7%
Valdez Alaska Marine Term Rev
(BP Pipelines Proj) Ser 03B
2.30%, 7/01/37........................... 1,500 1,500,000
---------------
Total Short-Term Municipal Notes
(cost $1,500,000)........................ 1,500,000
---------------
Total Investments - 100.8%
(cost $204,824,874)...................... 213,951,953
Other assets less liabilities - (0.8%)...... (1,677,582)
---------------
Net Assets - 100%........................... $ 212,274,371
===============
FINANCIAL FUTURES CONTRACTS (see Note D)
Value at
Number of Expiration Original March 31, Unrealized
Type Contracts Position Month Value 2005 Depreciation
- ------------------ --------- -------- ---------- --------- ----------- ------------
U.S. Treasury Note June
10 Yr Futures 28 Long 2005 $ 3,091,699 $ 3,059,438 $ (32,261)
- --------------------------------------------------------------------------------
34 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Florida Portfolio - Portfolio of Investments
- --------------------------------------------------------------------------------
INTEREST RATE SWAP CONTRACTS (see Note D)
Rate Type
-------------------------
Payment Payment
Notional made received Unrealized
Swap Amount Termination by the by the Appreciation/
Counterparty (000) Date Portfolio Portfolio (Depreciation)
------------ ------------ ----------- ---------- --------- -------------
Goldman 76.48% of
Sachs & Co. $ 12,900 2/03/06 1 month LIBOR+ BMA* $ (20,615)
JP Morgan 5,000 7/08/05 1.257% BMA* 19,892
JP Morgan 5,000 7/01/09 3.117% BMA* 8,058
85.10% of
Merrill Lynch 12,900 2/03/06 BMA* 1 Month LIBOR+ 63,861
* BMA (Bond Market Association)
+ LIBOR (London Interbank Offered Rate)
(a) Represents entire or partial position segregated as collateral for
interest rate swap.
(b) Position or portion thereof with an aggregate market value of $104,575 has
been segregated to collateralize margin requirements for open futures
contracts.
(c) Inverse floater - security with variable or floating interest rate that
moves in opposite direction of short-term interest rates.
(d) Variable rate coupon, rate shown as of March 31, 2005.
(e) Security is exempt from registration under Rule 144A of the Securities Act
of 1933. These securities are considered liquid and may be resold in
transactions exempt from registration, normally to qualified institutional
buyers. At March 31, 2005, the aggregate market value of these securities
amounted to $13,967,600 or 6.6% of net assets.
Glossary of Terms:
AMBAC American Municipal Bond Assurance Corporation
AMT Alternative Minimum Tax
COP Certificate of Participation
FGIC Financial Guarantee Insurance Company
FNMA Federal National Mortgage Association
FSA Financial Security Assurance, Inc.
GNMA Government National Mortgage Association
GO General Obligation
IDR Industrial Development Revenue
MBIA Municipal Bond Investors Assurance
MFHR Multi-Family Housing Revenue
PCR Pollution Control Revenue
RADIAN Radian Group, Inc.
SFMR Single Family Mortgage Revenue
See notes to financial statements.
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 35
Massachusetts Portfolio - Portfolio of Investments
- --------------------------------------------------------------------------------
MASSACHUSETTS PORTFOLIO
PORTFOLIO OF INVESTMENTS
March 31, 2005 (unaudited)
Principal
Amount
(000) Value
- --------------------------------------------------------------------------
MUNICIPAL BONDS & NOTES - 102.8%
Long-Term Municipal Bonds - 99.8%
Massachusetts - 75.8%
Massachusetts Bay Trans Auth
Ser 04A
5.25%, 7/01/21........................... $ 2,000 $ 2,212,560
Massachusetts Dev Fin Agy
(Massachusetts Biomedical) Ser 00C
6.25%, 8/01/20........................... 3,000 3,303,870
(Worcester Redev) Asset Gty Ser 99
5.25%, 6/01/19........................... 2,350 2,483,104
Massachusetts Ed Fac
(Massachusetts College of Pharmacy)
Ser 99B
6.75%, 7/01/30........................... 3,350 3,884,861
(Suffolk Univ) Ser 99
5.85%, 7/01/29........................... 1,375 1,440,368
Massachusetts Ed Fin Auth
(Educational Loan) MBIA Ser 00G AMT
6.00%, 12/01/16.......................... 1,340 1,395,396
Massachusetts Hlth & Ed Fac Auth
(Berkshire Healthcare) Asset Gty Ser 01E
5.70%, 10/01/25.......................... 4,000 4,344,480
(Cape Cod Healthcare) Asset Gty Ser 01C
5.25%, 11/15/31.......................... 2,600 2,711,488
(Covenant Medical Center) Ser 02
6.00%, 7/01/31........................... 2,500 2,621,200
(New England Med Ctr) FGIC Ser 02H
5.00%, 5/15/25........................... 2,000 2,066,340
(Partners Healthcare System) Ser 01C
5.75%, 7/01/32........................... 4,000 4,303,880
(University of Mass Proj) MBIA Ser 02C
5.25%, 10/01/31(a)(b).................... 6,440 6,815,451
(Winchester Hosp) Ser 00E
6.75%, 7/01/30........................... 4,500 5,198,400
Massachusetts Hsg Fin Agy MFHR
(Harbor Point) AMBAC Ser 96A AMT
6.40%, 12/01/15.......................... 4,880 5,064,952
(Rental Mtg) AMT
AMBAC Ser 95E
6.00%, 7/01/41........................... 4,900 5,104,232
AMBAC Ser 00A
6.00%, 7/01/37........................... 2,680 2,753,218
MBIA Ser 00H
6.65%, 7/01/41........................... 8,805 9,440,544
- --------------------------------------------------------------------------------
36 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Massachusetts Portfolio - Portfolio of Investments
- --------------------------------------------------------------------------------
Principal
Amount
(000) Value
- --------------------------------------------------------------------------
Massachusetts Ind Fin Agy MFHR
(Heights Crossing) FHA Ser 95 AMT
6.15%, 2/01/35........................... $ 6,000 $ 6,251,580
Massachusetts Port Auth Spec Fac
(Bosfuel Corp) MBIA Ser 97 AMT
6.00%, 7/01/36........................... 6,155 6,464,534
(US Air Proj) MBIA Ser 96A AMT
5.875%, 9/01/23.......................... 2,000 2,096,960
Massachusetts State Wtr Pollutn Abatement Tr
(Pool Prog Bds) Ser 10
5.00%, 8/01/24........................... 5,000 5,242,700
Massachusetts State Dev Fin Agy Rev
(Pharmacy & Allied Health) Ser 05D
5.00%, 7/01/24........................... 3,500 3,618,825
Massachusetts State GO
Ser 02
Pre Refunded
5.25%, 11/01/30.......................... 3,075 3,357,470
Un Refunded
5.25%, 11/01/30.......................... 1,925 2,101,831
Ser 04
7.60%, 8/01/16(c)(e)..................... 5,000 5,702,400
Massachusetts State Spl Oblig Rev
(Cons Ln) Ser 05A
5.00%, 6/01/23........................... 1,500 1,575,495
---------------
101,556,139
---------------
Arizona - 6.7%
Goodyear IDA Water & Sewer Rev
(Litchfield Pk Svc Proj) Ser 01 AMT
6.75%, 10/01/31.......................... 5,160 5,394,831
Quailwood Meadows Cmnty Facs Dist
6.125%, 7/15/29.......................... 1,000 1,000,190
Stoneridge Cmnty Fac Dist
Ser 01
6.75%, 7/15/26........................... 2,365 2,545,166
---------------
8,940,187
---------------
California - 0.8%
California State GO
5.25%, 11/01/25.......................... 1,000 1,052,090
---------------
Florida - 1.4%
Crossings at Fleming Island
Cmnty Dev Dist
(Eagle Harbor) Ser 00C
7.10%, 5/01/30........................... 1,750 1,851,028
---------------
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 37
Massachusetts Portfolio - Portfolio of Investments
- --------------------------------------------------------------------------------
Principal
Amount
(000) Value
- --------------------------------------------------------------------------
Illinois - 0.3%
Plano Spl Svc Area No.3 Spl Tax
(Lakewood Springs Proj) Ser 05A
5.95%, 3/01/28........................... $ 395 $ 389,122
---------------
New Jersey - 2.9%
Garden State Preservation Tr
(NJ Open Space & Farmland) Ser 05A
5.80%, 11/01/21.......................... 3,500 3,887,240
---------------
Nevada - 1.5%
Clark Cnty Impt Dist No. 142
Ser 03
6.10%, 8/01/18........................... 1,000 1,017,060
Henderson Loc Impt Dist
Ser 03
5.80%, 3/01/23........................... 1,000 1,032,360
---------------
2,049,420
---------------
Puerto Rico - 9.1%
Puerto Rico Comwlth Hwy & Trans Auth Rev
FGIC Ser 03
7.13%, 7/01/14(c)(e)..................... 4,315 5,252,822
Puerto Rico Elec Pwr Auth Rev
XLCA Ser 02-1
5.25%, 7/01/22........................... 6,400 6,879,296
---------------
12,132,118
---------------
South Carolina - 1.3%
South Carolina State Pub Svc Auth Rev
MBIA Ser 05B
5.00%, 1/01/14-1/01/17................... 1,660 1,762,290
---------------
Total Long-Term Municipal Bonds
(cost $126,795,951)...................... 133,619,634
---------------
Short-Term Municipal Notes(d) - 3.0%
Massachusetts - 2.2%
Massachusetts State GO
(Central Artery)
Ser 00A
2.31%, 12/01/30.......................... 2,000 2,000,000
Ser 00B
2.31%, 12/01/30.......................... 500 500,000
Massachusetts Water Resources Auth
Series 02D
2.28%, 8/01/17........................... 500 500,000
---------------
3,000,000
---------------
Louisiana - 0.8%
East Baton Rouge Parish Pollution Ctl Rev
(Exxon Proj)
2.19%, 11/01/19.......................... 1,000 1,000,000
---------------
- --------------------------------------------------------------------------------
38 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Massachusetts Portfolio - Portfolio of Investments
- --------------------------------------------------------------------------------
Value
- --------------------------------------------------------------------------------
Total Short-Term Municipal Notes
(cost $4,000,000)........................ $ 4,000,000
---------------
Total Investments - 102.8%
(cost $130,795,951)...................... 137,619,634
Other assets less liabilities - (2.8%)...... (3,696,686)
---------------
Net Assets - 100%........................... $ 133,922,948
===============
FINANCIAL FUTURES CONTRACTS (see Note D)
Value at
Number of Expiration Original March 31, Unrealized
Type Contracts Position Month Value 2005 (Depreciation)
- ------------------ --------- -------- ---------- ----------- ----------- -------------
U.S. Treasury Note June
10 Yr Futures 31 Long 2005 $ 3,422,952 $ 3,387,234 $ (35,718)
INTEREST RATE SWAP CONTRACTS (see Note D)
Rate Type
-------------------------
Payment Payment
Notional made received Unrealized
Swap Amount Termination by the by the Appreciation/
Counterparty (000) Date Portfolio Portfolio (Depreciation)
------------ --------- ----------- --------- --------- --------------
76.48% of
Goldman Sachs & Co. $ 8,000 2/03/06 1 Month LIBOR+ BMA* $ (12,784)
Merrill Lynch 3,500 12/01/05 BMA* 2.22 (7,158)
85.10% of
Merrill Lynch 8,000 2/03/06 BMA* 1 Month LIBOR+ 39,603
* BMA (Bond Market Association)
+ LIBOR (London Interbank Offered Rate)
(a) Represents entire or partial position segregated as collateral for
interest rate swap.
(b) Position or portion thereof with an aggregate market value of $153,454 has
been segregated to collateralize margin requirements for open futures
contracts.
(c) Inverse floater - security with variable or floating interest rate that
moves in opposite direction of short-term interest rates.
(d) Variable rate coupon, rate shown as of March 31, 2005.
(e) Security is exempt from registration under Rule 144A of the Securities Act
of 1933. These securities are considered liquid and may be resold in
transactions exempt from registration, normally to qualified institutional
buyers. At March 31, 2005, the aggregate market value of these securities
amounted to $10,955,222 or 8.2% of net assets.
Glossary of Terms:
AMBAC American Municipal Bond Assurance Corporation
AMT Alternative Minimum Tax
FGIC Financial Guaranty Insurance Company
FHA Federal Housing Authority
GO General Obligation
MBIA Municipal Bond Investors Assurance
MFHR Multi-Family Housing Revenue
XLCA XL Capital Assurance, Inc.
See notes to financial statements.
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 39
Michigan Portfolio - Portfolio of Investments
- --------------------------------------------------------------------------------
MICHIGAN PORTFOLIO
PORTFOLIO OF INVESTMENTS
March 31, 2005 (unaudited)
Principal
Amount
(000) Value
- --------------------------------------------------------------------------
MUNICIPAL BONDS & NOTES - 98.5%
Long-Term Municipal Bonds - 91.6%
Michigan - 69.1%
Allen Park Pub Sch Dist
Ser 03
10.80%, 5/01/18(a)(e).................... $ 4,745 $ 5,781,449
Cedar Springs Pub Sch Dist
Ser 03
5.00%, 5/01/28........................... 1,835 1,896,472
Charles Stewart Mott Cmnty Coll
(Cmnty College Facs) MBIA
5.00%, 5/01/21........................... 1,675 1,767,175
Detroit School Board
(School Board Loan Fund) FSA Ser 01A
5.125%, 5/01/31.......................... 2,900 2,997,991
Detroit Tax Increment
(Diamler/Chrysler Assembly Plant)
Ser 98A
5.50%, 5/01/21........................... 1,675 1,514,502
Detroit Water Supply System
FGIC Ser 01B
5.50%, 7/01/33........................... 3,550 3,832,190
Genesee County GO
(Water Supply System) AMBAC Ser 04
5.00%, 11/01/26.......................... 3,000 3,127,380
Kalamazoo Hosp Fin Auth
(Borgess Med Ctr) FGIC Ser 94A
7.97%, 6/01/11(a)........................ 2,360 2,423,626
Kent Hosp Fin Auth Rev
(Metropolitan Hospital Proj) Ser 05A
5.75%, 7/01/25........................... 210 220,080
Lansing Water & Elec System
FSA Ser 03A
5.00%, 7/01/25........................... 2,200 2,287,164
Michigan Higher Ed Fac
(Hope College) Ser 02A
5.90%, 4/01/32........................... 3,465 3,691,126
Michigan Higher Ed Student Loan Auth
AMBAC Ser 17G AMT
5.20%, 9/01/20........................... 3,500 3,675,175
Michigan Hosp Fin Auth
(Crittenton Hospital) Ser 02A
5.625%, 3/01/27.......................... 1,250 1,305,413
(Trinity Health) Ser 00A
6.00%, 12/01/27.......................... 1,485 1,625,258
- --------------------------------------------------------------------------------
40 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Michigan Portfolio - Portfolio of Investments
- --------------------------------------------------------------------------------
Principal
Amount
(000) Value
- --------------------------------------------------------------------------
Michigan Hsg Dev Auth MFHR
(Arbor Pointe) GNMA Ser 99
5.40%, 6/20/40........................... $ 1,810 $ 1,837,476
(Danbury Manor) FNMA Ser 02A AMT
5.30%, 6/01/35........................... 2,530 2,585,458
(Oakbrook Villa Proj) GNMA Ser 00A AMT
6.50%, 1/20/42........................... 2,970 3,171,633
(Rental Rev) AMBAC Ser 97A AMT
6.10%, 10/01/33(b)....................... 7,400 7,661,294
(Rental Rev) Ser 02A AMT
5.50%, 10/20/43.......................... 2,000 2,047,140
Michigan Hsg Dev Auth SFMR
(Mortgage Rev) MBIA Ser 02B AMT
5.50%, 6/01/30........................... 775 786,834
Michigan State
(Trunk Line Fund) FSA
Ser 01A
5.25%, 11/01/30.......................... 4,000 4,175,840
Ser 04A
9.10%, 11/01/13(a)(e).................... 1,500 1,923,255
Ser 04B
9.10%, 11/01/14(a)(e).................... 1,600 2,060,432
Michigan Strategic Fund
(Detroit Edison) XLCA Ser 02C AMT
5.45%, 12/15/32.......................... 3,000 3,169,440
(Detroit Edison) MBIA Ser 95AA
6.40%, 9/01/25........................... 2,665 2,760,114
Michigan Strategic Fund Hlth Fac
(Autumn Wood) GNMA Ser 02A
5.20%, 12/20/22.......................... 3,000 3,129,090
(Holland Home) Ser 98
5.75%, 11/15/18-11/15/28................. 2,000 2,029,820
Midland Cnty PCR
(CMS Energy) Ser 00A AMT
6.875%, 7/23/09.......................... 2,000 2,065,200
North Muskegon Sch Dist
Ser 03
5.25%, 5/01/28........................... 1,500 1,582,665
Olivet School Board Fund
Ser 02
5.125%, 5/01/28.......................... 1,065 1,110,752
Ovid Elsie Schools Board Fund
Ser 02
5.00%, 5/01/25........................... 2,650 2,744,473
Pontiac Tax Increment Fin Auth
(Dev Area # 3) Ser 02
6.25%, 6/01/22........................... 2,780 2,884,278
6.375%, 6/01/31.......................... 3,250 3,308,760
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 41
Michigan Portfolio - Portfolio of Investments
- --------------------------------------------------------------------------------
Principal
Amount
(000) Value
- --------------------------------------------------------------------------
Romulus Tax Increment Fin Auth
Ser 94
6.75%, 11/01/19.......................... $ 1,585 $ 1,680,354
Royal Oak Hosp Fin Auth
(William Beaumont Hosp) MBIA Ser 01M
5.25%, 11/15/35.......................... 3,200 3,298,848
Saginaw Hosp Fin Auth
(Convenant Medical Ctr) Ser 00F
6.50%, 7/01/30........................... 1,770 1,940,504
---------------
94,098,661
---------------
California - 3.7%
California Health Fac Fin Auth
(Sutter Heath) Ser 00A
6.25%, 8/15/35........................... 3,600 4,047,804
California State GO
5.25%, 11/01/25.......................... 1,000 1,052,090
---------------
5,099,894
---------------
Florida - 6.1%
Capital Trust Agy Rev
(Cargo Acq Grp) Ser 03 AMT
5.75%, 1/01/32........................... 1,500 1,467,990
Collier Cnty Cmnty Dev Dist
(Fiddlers Creek) Ser 96
7.50%, 5/01/18........................... 1,600 1,676,800
Crossings at Fleming Island Cmnty Dev Dist
(Eagle Harbor) Ser 00C
7.10%, 5/01/30........................... 1,835 1,940,935
Double Branch Cmnty Dev Dist
(Oakleaf Village) Ser 02A
6.70%, 5/01/34........................... 1,000 1,073,830
Gateway Cmnty Dev Dist
(Sun City) Ser 03B
5.50%, 5/01/10........................... 735 743,864
Northern Palm Beach Asses Dist
(Unit Development 27B) Ser 02
6.40%, 8/01/32........................... 810 831,692
Waterlefe Cmnty Dev Dist
Ser 01B
6.25%, 5/01/10........................... 630 635,462
---------------
8,370,573
---------------
Illinois - 1.0%
Antioch Village Spl Svc Area
(Clublands Proj) Ser 03
6.625%, 3/01/33.......................... 500 500,870
(Deercrest Proj) Ser 03
6.625%, 3/01/33.......................... 500 500,870
Plano Spl Svc Area No.3 Spl Tax
(Lakewood Springs Proj) Ser 05A
5.95%, 3/01/28........................... 395 389,122
---------------
1,390,862
---------------
- --------------------------------------------------------------------------------
42 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Michigan Portfolio - Portfolio of Investments
- --------------------------------------------------------------------------------
Principal
Amount
(000) Value
- --------------------------------------------------------------------------
Puerto Rico - 11.7%
Puerto Rico Elec Pwr Auth Rev
XLCA Ser 02-1
5.25%, 7/01/22(c)........................ $ 5,000 $ 5,374,450
Puerto Rico Hsg Fin Corp SFMR
(Mortgage Rev) AMT
Ser 01B GNMA
5.50%, 12/01/23.......................... 2,130 2,167,616
Ser 01C
5.30%, 12/01/28.......................... 1,865 1,879,472
Puerto Rico Ind Fin Auth Hlth Fac
(Ascension Health) Ser 00A
6.125%, 11/15/30......................... 3,000 3,343,050
Puerto Rico Pub Fin Corp
MBIA Ser 01A
5.00%, 8/01/31........................... 2,875 3,126,045
---------------
15,890,633
---------------
Total Long-Term Municipal Bonds
(cost $119,489,272)...................... 124,850,623
---------------
Short-Term Municipal Notes(d) - 6.9%
Michigan - 4.4%
Michigan State Grant Antic Nts
Ser 01D
2.23%, 9/15/08........................... 3,375 3,375,000
Michigan State Strategic Fund Ltd Oblig Rev
(Henry Ford Museum Vlg Proj)
2.27%, 12/01/33.......................... 1,000 1,000,000
University Mich Univ Revs
(Med Svc Plan) Ser 98A-1
2.30%, 12/01/21.......................... 1,665 1,665,000
---------------
6,040,000
---------------
Alaska - 1.5%
Valdez Alaska Marine Term Rev
(BP Pipelines Proj) Ser 03B
2.30%, 7/01/37........................... 2,000 2,000,000
---------------
Louisiana - 0.4%
East Baton Rouge Parish Pollution Ctl Rev
(Exxon Proj)
2.21%, 3/01/22........................... 500 500,000
---------------
New York - 0.3%
New York City Transitional Fin Auth
(NYC Recovery) Ser 03
2.32%, 11/01/22.......................... 400 400,000
---------------
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 43
Michigan Portfolio - Portfolio of Investments
- --------------------------------------------------------------------------------
Principal
Amount
(000) Value
- --------------------------------------------------------------------------
Texas - 0.3%
Lower Neches Valley Auth Indl Dev Corp
Exempt Facs Rev
(Exxon Mobil Proj) Ser 01B AMT
2.25%, 11/01/29.......................... $ 500 $ 500,000
---------------
Total Short-Term Municipal Notes
(cost $9,440,000)........................ 9,440,000
---------------
Total Investments - 98.5%
(cost $128,929,272)...................... 134,290,623
Other assets less liabilities - 1.5%........ 1,985,650
---------------
Net Assets - 100%........................... $ 136,276,273
===============
FINANCIAL FUTURES CONTRACTS (see Note D)
Value at
Number of Expiration Original March 31, Unrealized
Type Contracts Position Month Value 2005 Appreciation
- ------------------ --------- -------- ---------- ----------- ----------- -------------
U.S. Treasury Note June
10 Yr Futures 22 Short 2005 $ 2,429,027 $ 2,403,844 $ 25,183
INTEREST RATE SWAP CONTRACTS (see Note D)
Rate Type
-------------------------
Payment Payment
Notional made received Unrealized
Swap Amount Termination by the by the Appreciation/
Counterparty (000) Date Portfolio Portfolio (Depreciation)
------------ --------- ----------- --------- --------- --------------
76.48% of
Goldman Sachs & Co. $ 8,000 2/03/06 1 Month LIBOR+ BMA* $ (12,784)
85.10% of
Merrill Lynch 8,000 2/03/06 BMA* 1 Month LIBOR+ 39,603
* BMA (Bond Market Association)
+ LIBOR (London Interbank Offered Rate)
- --------------------------------------------------------------------------------
44 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Michigan Portfolio - Portfolio of Investments
- --------------------------------------------------------------------------------
(a) Inverse floater - security with variable or floating interest rate that
moves in opposite direction of short-term interest rates.
(b) Represents entire or partial position segregated as collateral for
interest rate swap.
(c) Position, or portion thereof with an aggregate market value of $569,692
has been segregated to collateralize margin requirements for open futures
contracts.
(d) Variable rate coupon, rate shown as of March 31, 2005.
(e) Security is exempt from registration under Rule 144A of the Securities Act
of 1933. These securities are considered liquid and may be resold in
transactions exempt from registration, normally to qualified institutional
buyers. At March 31, 2005, the aggregate market value of these securities
amounted to $9,765,136 or 7.2% of net assets.
Glossary of Terms:
AMBAC American Municipal Bond Assurance Corporation
AMT Alternative Minimum Tax
FGIC Financial Guaranty Insurance Company
FNMA Federal National Mortgage Association
FSA Financial Security Assurance, Inc.
GNMA Government National Mortgage Association
MBIA Municipal Bond Investors Assurance
MFHR Multi-Family Housing Revenue
PCR Pollution Control Revenue
SFMR Single Family Mortgage Revenue
XLCA XL Capital Assurance, Inc.
See notes to financial statements.
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 45
Minnesota Portfolio - Portfolio of Investments
- --------------------------------------------------------------------------------
MINNESOTA PORTFOLIO
PORTFOLIO OF INVESTMENTS
March 31, 2005 (unaudited)
Principal
Amount
(000) Value
- --------------------------------------------------------------------------
MUNICIPAL BONDS & NOTES - 102.9%
Long-Term Municipal Bonds - 94.7%
Minnesota - 94.7%
Bemidji Hlth Fac
(North Country Hlth Svcs) RADIAN Ser 02
5.00%, 9/01/31........................... $ 1,500 $ 1,527,810
Brooklyn Park MFHR
(Brooks Landing) FNMA Ser 99A AMT
5.50%, 7/01/19........................... 1,355 1,402,561
Cass Lake Sch Dist FGIC
5.00%, 2/01/26........................... 1,760 1,832,688
Dakota Cnty MFHR
(Grande Market Place Proj)
GNMA Ser 02A AMT
5.40%, 11/20/43 ......................... 4,750 4,794,602
Eagan MFHR
(Woodridge Apts) GNMA Ser 97A
5.95%, 2/01/32........................... 1,600 1,658,688
Elk River Indpt Sch Dist
FSA Ser 03
6.46%, 2/01/15(a)(e)..................... 3,065 3,524,995
Farmington Indpt Sch Dist 192
FSA Ser 05B
5.00%, 2/01/24........................... 3,875 4,046,003
Golden Valley Hlth Fac
(Convenant Retirement Cmnty) Ser 99A
5.50%, 12/01/29.......................... 1,000 1,033,880
Little Canada MFHR
(Cedars Lakeside Apts) GNMA Ser 97A
5.95%, 2/01/32........................... 2,650 2,747,202
Minneapolis & St. Paul Arpt Rev
FGIC Ser 00B AMT
6.00%, 1/01/21........................... 3,455 3,766,503
MBIA Ser 03A
5.00%, 1/01/28........................... 1,500 1,544,505
Minneapolis Common Bond Fund
Ser 95-2 AMT
6.625%, 12/01/15......................... 1,245 1,262,144
Ser 97-2 AMT
6.20%, 6/01/17........................... 1,655 1,731,113
Ser 01G-3
5.45%, 12/01/31.......................... 1,500 1,567,920
Minneapolis Hosp Rev
(Allina Hlth Sys) Ser 02A
5.75%, 11/15/32.......................... 1,500 1,590,855
- --------------------------------------------------------------------------------
46 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Minnesota Portfolio - Portfolio of Investments
- --------------------------------------------------------------------------------
Principal
Amount
(000) Value
- --------------------------------------------------------------------------
Minneapolis MFHR
(Bottineau Commons Proj) GNMA Ser 02 AMT
5.45%, 4/20/43........................... $ 2,000 $ 2,037,380
(Sumner Field) GNMA Ser 02 AMT
5.60%, 11/20/43.......................... 2,505 2,554,624
Minneapolis Pkg Assmt GO
MBIA Ser 02
5.25%, 12/01/26(b)....................... 2,000 2,157,880
Minnesota Agric & Eco Dev
(Small Business Loan Proj) AMT
Ser 96A
6.75%, 8/01/16........................... 1,450 1,511,016
Ser 00A
7.25%, 8/01/20........................... 1,000 1,073,810
Ser 00B
7.25%, 8/01/20........................... 1,000 1,073,810
Ser 00C
7.25%, 8/01/20........................... 1,000 1,073,810
Ser 00D
7.25%, 8/01/20........................... 1,000 1,073,810
Minnesota Agric & Eco Dev Hlth Fac
(Benedictine Hlth Sys) MBIA Ser 99
5.125%, 2/15/29(c)....................... 4,000 4,123,159
(Evangelical Lutheran Proj) Ser 02
6.00%, 2/01/22-2/01/27................... 2,880 3,110,952
(Fairview Hlth) Ser 00A
6.375%, 11/15/29......................... 1,750 1,904,683
Minnesota Higher Ed Fac Auth
(College Art & Design) Ser 00-5D
6.75%, 5/01/26........................... 1,000 1,089,640
(Hamline Univ) Ser 99-5B
6.00%, 10/01/29.......................... 1,250 1,321,800
(St. Catherine College)
5.375%, 10/01/32......................... 1,000 1,038,360
(Univ St. Thomas) Ser 04-5
5.00%, 10/01/24.......................... 1,000 1,029,700
5.25%, 10/01/34.......................... 1,000 1,044,050
Minnesota Hsg Fin Agy
Ser 04A AMT
12.75%, 1/01/07(a)(e).................... 540 572,044
Ser 04B AMT
12.90%, 1/01/07(a)(e).................... 355 378,008
Ser 04C AMT
12.14%, 1/01/10(a)(e).................... 905 1,007,156
Minnesota Hsg Fin Agy MFHR
(Rental Rev) MBIA Ser 95D
6.00%, 2/01/22........................... 145 147,436
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 47
Minnesota Portfolio - Portfolio of Investments
- --------------------------------------------------------------------------------
Principal
Amount
(000) Value
- --------------------------------------------------------------------------
Minnesota Mun Pwr Agy Elec
Ser 04A
5.25%, 10/01/24.......................... $ 500 $ 530,285
Minnetonka MFHR
(Archer Heights Apts Proj)
GNMA Ser 99A AMT
5.30%, 1/20/27........................... 1,620 1,659,431
Sartell Poll Ctl Rev
(International Paper) Ser 03A
5.20%, 6/01/27........................... 1,000 1,000,590
Scott Cnty MFHR
(Northridge Apts Proj) MBIA Ser 03
5.00%, 2/01/34........................... 1,000 1,012,850
Seaway Port Auth Duluth
Indl Dev Dock & Wharf
(Cargill Inc. Proj) Ser 04
4.20%, 5/01/13........................... 2,150 2,166,061
Shakopee Health Care Facs
(St Francis Regl Med Ctr) Ser 04
5.10%, 9/01/25........................... 600 608,478
Shoreview MFHR
(Lexington Shores Proj)
GNMA Ser 01A AMT
5.55%, 8/20/42........................... 1,445 1,468,814
St. Cloud Hosp Rev
(Saint Cloud Hosp) FSA Ser 00A
5.875%, 5/01/30.......................... 3,750 4,151,399
St. Paul MFHR
(Burlington Apt-8) GNMA
5.35%, 5/01/31........................... 1,550 1,556,014
St. Paul Pkg Auth Rev
(Block 19 Ramp) FSA Ser 02A
5.35%, 8/01/29........................... 3,075 3,296,216
St. Paul Port Auth Lease Rev
(Cedar St. Office Building) Ser 03
5.00%, 12/01/23.......................... 1,000 1,045,680
Ser 02
5.25%, 12/01/27.......................... 1,725 1,817,029
Waconia Hlth Care Fac Rev
(Ridgeview Med Ctr) RADIAN Ser 99A
6.125%, 1/01/29.......................... 3,415 3,762,340
Western Mun Pwr Agy
MBIA Ser 03A
5.00%, 1/01/30........................... 2,100 2,170,602
Western Power Agy
MBIA Ser 03A
5.00%, 1/01/26 .......................... 1,000 1,039,590
White Bear Lake MFHR
(Renova Partners Proj)
FNMA Ser 01 AMT
5.60%, 10/01/30.......................... 1,000 1,029,670
- --------------------------------------------------------------------------------
48 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Minnesota Portfolio - Portfolio of Investments
- --------------------------------------------------------------------------------
Principal
Amount
(000) Value
- --------------------------------------------------------------------------
Willmar Hosp Rev
(Rice Mem Hosp Proj) FSA Ser 02
5.00%, 2/01/32........................... $ 2,000 $ 2,063,860
---------------
Total Long-Term Municipal Bonds
(cost $89,619,425)....................... 93,733,506
---------------
Short-Term Municipal Notes(d) - 8.2%
Minnesota - 8.2%
Dakota Cnty Cmnty Dev Rev
(Regatta Co. Proj) Ser A
2.34%, 1/01/38........................... 1,700 1,700,000
Maple Grove Economic Dev Rev
(Heritage Christian Academy) Ser 04
2.28%, 7/01/29........................... 4,335 4,335,000
Minnesota Higher Ed Fac Auth
(St. Olaf College) Ser 02
2.29%, 10/01/20.......................... 1,225 1,225,000
St. Paul Port Auth Dist
Ser 02-R AMT
2.34%, 3/01/22 .......................... 500 500,000
Waconia Indl Dev Rev
(Milltronics Mfg. Co. Proj) Ser 95
2.40%, 10/01/16.......................... 370 370,000
---------------
Total Short-Term Municipal Notes
(cost $8,130,000)........................ 8,130,000
---------------
Total Investments - 102.9%
(cost $97,749,425)....................... 101,863,506
Other assets less liabilities - (2.9%)...... (2,898,855)
---------------
Net Assets - 100%........................... $ 98,964,651
===============
FINANCIAL FUTURES CONTRACTS (see Note D)
Value at
Number of Expiration Original March 31, Unrealized
Type Contracts Position Month Value 2005 Depreciation
- ------------------ --------- -------- ---------- ----------- ----------- -------------
U.S. Treasury Note June
10 Yr Futures 25 Long 2005 $ 2,760,445 $ 2,731,641 $ (28,804)
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 49
Minnesota Portfolio - Portfolio of Investments
- --------------------------------------------------------------------------------
INTEREST RATE SWAP CONTRACTS (see Note D)
Rate Type
-------------------------
Payment Payment
Notional made received Unrealized
Swap Amount Termination by the by the Appreciation/
Counterparty (000) Date Portfolio Portfolio (Depreciation)
------------ --------- ----------- --------- --------- --------------
76.48% of
Goldman Sachs & Co. $ 5,600 2/03/06 1 Month LIBOR+ BMA* $ (8,949)
85.10% of
Merrill Lynch 5,600 2/03/06 BMA* 1 Month LIBOR+ 27,722
* BMA (Bond Market Association)
+ LIBOR (London Interbank Offered Rate)
(a) Inverse floater - security with variable or floating interest rate that
moves in opposite direction of short-term interest rates.
(b) Position, or portion thereof with an aggregate market value of $32,368 has
been segregated to collateralize margin requirements for open futures
contracts.
(c) Represents entire or partial position segregated as collateral for
interest rate swap.
(d) Variable rate coupon, rate shown as of March 31, 2005.
(e) Security is exempt from registration under Rule 144A of the Securities Act
of 1933. These securities are considered liquid and may be resold in
transactions exempt from registration, normally to qualified institutional
buyers. At March 31, 2005, the aggregate market value of these securities
amounted to $5,482,203 or 5.5% of net assets.
Glossary of Terms:
AMT Alternative Minimum Tax
FGIC Financial Guaranty Insurance Company
FNMA Federal National Mortgage Association
FSA Financial Security Assurance, Inc.
GNMA Government National Mortgage Association
RADIAN Radian Group, Inc.
See notes to financial statements.
- --------------------------------------------------------------------------------
50 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
New Jersey Portfolio - Portfolio of Investments
- --------------------------------------------------------------------------------
NEW JERSEY PORTFOLIO
PORTFOLIO OF INVESTMENTS
March 31, 2005 (unaudited)
Principal
Amount
(000) Value
- --------------------------------------------------------------------------
MUNICIPAL BONDS - 100.7%
Long-Term Municipal Bonds - 100.7%
New Jersey - 93.3%
Bergen Cnty Impt Auth Sch Dist Rev
(Wyckoff Twp Brd of Ed Proj) Ser 05
5.00%, 4/01/25........................... $ 1,555 $ 1,640,043
Casino Reinvestment Dev Auth
(Parking Fee Rev) MBIA Ser 05A
5.25%, 6/01/19........................... 4,410 4,732,768
(Hotel Room Fee Rev) AMBAC Ser 04
5.25%, 1/01/23........................... 600 653,226
Hoboken Parking Auth
AMBAC Ser 01A
5.30%, 5/01/27........................... 3,700 4,123,502
Lafayette Yard Com Dev Corp
(Conv Ctr Hotel Proj) MBIA Ser 00
5.80%, 4/01/35........................... 2,100 2,359,560
Middlesex Cnty MFHR
FNMA Ser 01 AMT
5.25%, 7/01/21.......................... 750 795,315
Morris-Union Jointure Commn Ctsf Partn
RADIAN Ser 04
5.00%, 5/01/24........................... 2,200 2,257,728
Mount Olive Twp
MBIA Ser 04
5.00%, 1/15/23........................... 1,345 1,423,830
New Jersey Eco Dev Auth
FGIC Ser 04
7.579%, 6/15/13(b)(d).................... 5,400 6,173,172
(American Water Co) FGIC AMT
6.875%, 11/01/34......................... 5,000 5,118,750
(Anheuser-Busch) Ser 95 AMT
5.85%, 12/01/30.......................... 5,000 5,197,050
(Hackensack Water Co)
MBIA Ser 94B AMT
5.90%, 3/01/24(a)........................ 4,000 4,053,400
(Kapkowski Rd) Ser 98B
6.50%, 4/01/28........................... 7,500 8,570,924
(Kapkowski Rd) Ser 98B AMT
6.50%, 4/01/31........................... 2,085 2,355,842
(Liberty State Park Proj) Ser A
5.00%, 3/01/24........................... 1,500 1,571,295
(Masonic Charity Foundation Proj) Ser 01
5.50%, 6/01/31........................... 1,000 1,073,990
(NUI Corp) ACA Ser 98A AMT
5.25%, 11/01/33.......................... 3,700 3,733,633
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 51
New Jersey Portfolio - Portfolio of Investments
- --------------------------------------------------------------------------------
Principal
Amount
(000) Value
- --------------------------------------------------------------------------
(Pub Ser Elec & Gas) MBIA Ser 94A AMT
6.40%, 5/01/32........................... $ 5,000 $ 5,067,100
(Sch Facs Construction) Ser 05K
5.25%, 12/15/15.......................... 2,000 2,193,760
New Jersey Eco Dev Auth Hlth Fac
(Masonic Charity Foundation Proj) Ser 02
5.25%, 6/01/24........................... 540 571,784
New Jersey Economic Dev Auth Sch Fac
Ser 04I
5.25%, 9/01/24........................... 2,510 2,664,817
AMBAC Ser 03
12.688%, 6/15/21(b)(d)................... 2,250 3,021,255
New Jersey Health Care Facs Fing Auth Rev
(St Clare's Hospital, Inc.) RADIAN Ser 04A
5.25%, 7/01/23........................... 2,085 2,169,985
New Jersey Higher Ed
(Student Loan) MBIA Ser 00A AMT
6.15%, 6/01/19........................... 1,095 1,109,476
New Jersey Hlth Care Fac
(Atlantic City Med Ctr) Ser 02
5.75%, 7/01/25........................... 1,875 1,973,325
(Bayshore Cmnty Hosp) RADIAN Ser 02
5.125%, 7/01/32.......................... 9,250 9,506,409
(Capital Health System) Ser 03
5.00%, 7/01/26........................... 1,250 1,246,663
(Good Shepherd) RADIAN Ser 01A
5.20%, 7/01/31........................... 1,350 1,397,102
(Kennedy Health System) Ser 01
5.625%, 7/01/31.......................... 3,700 3,884,963
(Newton Memorial Hosp) FSA Ser 01
5.00%, 7/01/26........................... 1,500 1,547,475
(Palisades Med Ctr) ACA Ser 99
5.25%, 7/01/28........................... 1,000 1,005,830
(Wood Johnson) Ser 00
5.75%, 7/01/31........................... 3,350 3,594,919
(Southern Ocean County Hosp)
RADIAN Ser 01
5.125%, 7/01/31.......................... 4,500 4,633,920
New Jersey Hsg & Mtg Fin Agy MFHR
(Pooled Loan) AMBAC Ser 96A AMT
6.25%, 5/01/28........................... 5,000 5,161,200
(Rental Hsg) FSA Ser 00A1 AMT
6.35%, 11/01/31.......................... 2,000 2,111,620
New Jersey State Ctfs Partn
(Equip Lease Purchase) Ser 04A
5.00%, 6/15/12........................... 7,995 8,449,115
New Jersey State Ed Fac Auth
(Higher Ed Cap Impt) Ser 02A
5.125%, 9/01/22.......................... 2,500 2,649,050
(Princeton Univ) Ser 05 A
5.00%, 7/01/23........................... 3,480 3,688,696
- --------------------------------------------------------------------------------
52 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
New Jersey Portfolio - Portfolio of Investments
- --------------------------------------------------------------------------------
Principal
Amount
(000) Value
- --------------------------------------------------------------------------
(Ramapo College of New Jersey)
AMBAC Ser 01D
5.00%, 7/01/31........................... $ 1,000 $ 1,026,870
FGIC Series 04E
5.00%, 7/01/23-7/01/28................... 3,250 3,408,365
New Jersey State Trans Auth
(Transportation System) Ser 03C
5.50%, 6/15/24........................... 3,750 4,209,075
Newark Hsg Auth
(Newark Marine Terminal) MBIA Ser 04
5.25%, 1/01/21-1/01/22(c)................ 3,580 3,859,578
North Hudson Sew Auth
MBIA Ser 01A
Zero Coupon, 8/01/24..................... 12,340 4,824,446
Port Auth NY & NJ
(121st) MBIA Ser 00
5.375%, 10/15/35......................... 5,000 5,309,400
(126th) FGIC Ser 02
5.25%, 5/15/37........................... 2,500 2,595,200
(JFK Int'l Airport Proj) MBIA Ser 97-6 AMT
5.75%, 12/01/22.......................... 7,675 8,261,063
Salem Cnty PCR
(PSE&G Power) Ser 01A AMT
5.75%, 4/01/31........................... 1,500 1,581,735
Salem Cnty Waste Disp Rev
(E.I. Dupont) Ser 92A AMT
6.125%, 7/15/22.......................... 3,500 3,513,230
South Jersey Port Corp
(Marine Terminal) AMT
5.20%, 1/01/23........................... 1,000 1,037,310
South Jersey Transportation Auth
(Raytheon Aircraft Service) Ser 97A AMT
6.15%, 1/01/22........................... 335 339,191
Union Cnty Impt Auth
MBIA Ser 03A
5.25%, 8/15/23........................... 2,885 3,119,839
Vineland Sewer Rev
(Landis Sewerage) FGIC Ser 93C
9.22%, 9/19/19(b)........................ 3,250 4,249,408
---------------
170,817,202
---------------
California - 0.6%
California State GO
5.25%, 11/01/25.......................... 1,000 1,052,090
---------------
Florida - 3.0%
Crossings at Fleming Island
Cmnty Dev Dist
(Eagle Harbor) Ser 00C
7.10%, 5/01/30........................... 2,500 2,644,325
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 53
New Jersey Portfolio - Portfolio of Investments
- --------------------------------------------------------------------------------
Principal
Amount
(000) Value
- --------------------------------------------------------------------------
Double Branch Cmnty Dev Dist
(Oakleaf Village) Ser 02A
6.70%, 5/01/34........................... $ 1,000 $ 1,073,830
Hammock Bay Cmnty Dev Dist
(Special Assessment) Ser 04A
6.15%, 5/01/24........................... 500 498,720
Northern Palm Beach Asses Dist
(Unit Development 27B) Ser 02
6.40%, 8/01/32........................... 1,285 1,319,412
---------------
5,536,287
---------------
Illinois - 0.8%
Antioch Village Spcl Svc Area
(Clublands Proj) Ser 03
6.625%, 3/01/33.......................... 1,000 1,001,740
Plano Spl Svc Area No. 3 Spl Tax
(Lakewood Springs Proj) Ser 05A
5.95%, 3/01/28........................... 550 541,816
---------------
1,543,556
---------------
Nevada - 1.1%
Henderson Loc Impt Dist
Ser 03
5.80%, 3/01/23........................... 985 1,016,875
North Las Vegas Cmnty Fac Dist
(#60 Aliante)
6.40%, 12/01/22.......................... 1,000 1,030,230
---------------
2,047,105
---------------
Ohio - 0.3%
Port Auth Columbiana Cnty Solid Waste Fac Rev
(Apex Environmental LLC) Ser 04A AMT
7.125%, 8/01/25.......................... 500 498,145
---------------
Pennsylvania - 0.9%
Delaware Riv Jt Toll Bridge Rev
(PA/NJ Bridge) Ser 03
5.00%, 7/01/28........................... 1,625 1,657,874
---------------
Virginia - 0.7%
Broad Street Cmnty Dev Dist
(Parking Fac) Ser 03
7.50%, 6/01/33........................... 1,200 1,237,284
---------------
Total Long-Term Municipal Bonds
(cost $175,245,025)...................... 184,389,543
---------------
Total Investments - 100.7%
(cost $175,245,025)...................... 184,389,543
Other assets less liabilities - (0.7%)...... (1,211,734)
---------------
Net Assets - 100%........................... $ 183,177,809
===============
- --------------------------------------------------------------------------------
54 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
New Jersey Portfolio - Portfolio of Investments
- --------------------------------------------------------------------------------
FINANCIAL FUTURES CONTRACTS (see Note D)
Value at
Number of Expiration Original March 31, Unrealized
Type Contracts Position Month Value 2005 Appreciation
- ------------------ --------- -------- ---------- ----------- ----------- -------------
U.S. Treasury Note June
10 Yr Futures 42 Short 2005 $ 4,637,233 $ 4,589,156 $ 48,077
U.S. Treasury Note June
10 Yr Swap Futures 40 Short 2005 4,389,850 4,311,250 78,600
--------
$126,677
========
INTEREST RATE SWAP CONTRACTS (see Note D)
Rate Type
-------------------------
Payment Payment
Notional made received Unrealized
Swap Amount Termination by the by the Appreciation/
Counterparty (000) Date Portfolio Portfolio (Depreciation)
------------ --------- ----------- --------- --------- --------------
JPMorgan Chase & Co. $ 7,300 6/08/05 1.25 BMA* $ 14,652
76.48% of
Goldman Sachs & Co. 11,700 2/03/06 1 Month LIBOR+ BMA* (18,697)
85.10% of
Merrill Lynch 11,700 2/03/06 BMA* 1 Month LIBOR+ 57,920
* BMA (Bond Market Association)
+ LIBOR (London Interbank Offered Rate)
(a) Position, or portion thereof with an aggregate market value of $400,273
has been segregated to collateralize margin requirements for open futures
contracts.
(b) Inverse floater - security with variable or floating interest rate that
moves in opposite direction of short-term interest rates.
(c) Represents entire or partial position segregated as collateral for
interest rate swap.
(d) Security is exempt from registration under Rule 144A of the Securities Act
of 1933. These securities are considered liquid and may be resold in
transactions exempt from registration, normally to qualified institutional
buyers. At March 31, 2005, the aggregate market value of these securities
amounted to $9,194,427 or 5.0% of net assets.
Glossary of Terms:
ACA American Capital Access
AMBAC American Municipal Bond Assurance Corporation
AMT Alternative Minimum Tax
FGIC Financial Guaranty Insurance Company
FNMA Federal National Mortgage Association
FSA Financial Security Assurance, Inc.
GO General Obligation
MBIA Municipal Bond Investors Assurance
RADIAN Radian Group, Inc.
See notes to financial statements.
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 55
Ohio Portfolio - Portfolio of Investments
- --------------------------------------------------------------------------------
OHIO PORTFOLIO
PORTFOLIO OF INVESTMENTS
March 31, 2005 (unaudited)
Principal
Amount
(000) Value
- --------------------------------------------------------------------------
MUNICIPAL BONDS & NOTES - 103.1%
Long-Term Municipal Bonds - 98.1%
Ohio - 83.3%
Akron GO
MBIA Ser 02
5.00%, 12/01/23.......................... $ 1,000 $ 1,043,210
Akron Stadium Rev
(Canal Park) Ser 96
6.90%, 12/01/16.......................... 5,000 5,339,200
Brookville Sch Dist GO
FSA Ser 03
5.00%, 12/01/26.......................... 2,000 2,078,180
Canton City Sch Dist
MBIA Ser 05
5.00%, 12/01/22-12/01/23................. 2,150 2,250,654
Central Ohio Solid Waste Auth
AMBAC Ser 04B
5.00%, 12/01/21.......................... 2,035 2,146,477
Cincinnati Tech & Cmnty College
AMBAC 02
5.00%, 10/01/28.......................... 5,000 5,171,200
Cleveland Cuyahoga Port Auth
Ser 01
7.35%, 12/01/31.......................... 2,000 2,096,500
(Rita Proj)
5.00%, 11/15/19.......................... 1,850 1,925,850
Cleveland GO
Ser 02 MBIA
5.25%, 12/01/27.......................... 4,380 4,616,608
Ser 04 AMBAC
5.25%, 12/01/24.......................... 1,200 1,286,292
Columbus Sch Dist
FGIC Ser 03
5.00%, 12/01/24-12/01/25................. 4,730 4,922,839
Cuyahoga Cnty Hosp Rev
(UHHS) Ser 00
7.50%, 1/01/30........................... 1,900 2,121,711
Cuyahoga Cnty MFHR
(Livingston Park Apts) GNMA Ser 02A
5.45%, 9/20/39........................... 1,500 1,522,095
(Longwood Proj) GNMA Ser 01 AMT
5.60%, 1/20/43........................... 3,620 3,711,296
(West Tech Apts Proj) GNMA Ser 02A AMT
5.45%, 3/20/44........................... 1,075 1,092,738
Dayton Ohio Arpt Rev
(James M Cox Dayton Intl) RADIAN Ser 03A
5.00%, 12/01/23.......................... 1,280 1,307,878
- --------------------------------------------------------------------------------
56 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Ohio Portfolio - Portfolio of Investments
- --------------------------------------------------------------------------------
Principal
Amount
(000) Value
- --------------------------------------------------------------------------
Dayton Sch Dist
(Administrative Fac Proj) Ser 03
6.00%, 12/01/19-12/01/21................. $ 3,040 $ 3,378,371
Delaware City Sch Dist
MBIA Ser 04
5.00%, 12/01/19.......................... 1,340 1,427,582
Dublin Sch Dist GO
FSA Ser 03
5.00%, 12/01/22.......................... 1,500 1,576,245
Erie Cnty Hosp Rev
(Firelands Med Ctr) Ser 02A
5.625%, 8/15/32.......................... 1,500 1,569,585
Fairfield Cnty Hosp Facs Rev
(Fairfield Med Ctr Proj) RADIAN Ser 03
5.00%, 6/15/24........................... 1,000 1,019,290
Franklin Cnty
(Online Computer Library Ctr) Ser 98A
5.20%, 10/01/20.......................... 2,800 2,942,128
Franklin Cnty MFHR
(Agler Green) GNMA Ser 02A AMT
5.65%, 5/20/32........................... 770 797,697
5.80%, 5/20/44........................... 1,150 1,186,064
(Wellington Village Proj)
GNMA Ser 01A AMT
5.40%, 2/20/43........................... 3,845 3,866,263
Greater Cleveland Regl Tran Auth
MBIA Ser 04
5.00%, 12/01/24.......................... 1,350 1,415,246
Hamilton Cnty Health Fac
(Twin Towers) Ser 99A
5.80%, 10/01/23.......................... 1,775 1,803,666
Hamilton Cnty Convention Facs Auth Rev
FGIC Ser 04
5.00%, 12/01/23(a)....................... 1,330 1,396,686
Hamilton Cnty Sales Tax
AMBAC Ser 00B
5.25%, 12/01/32(b)....................... 13,185 13,759,866
Hamilton City Sch Dist MBIA
5.00%, 12/01/24.......................... 1,000 1,046,150
Hilliard Sch Dist
(Sch Constr ) MBIA
5.00%, 12/01/26.......................... 1,850 1,927,515
Lucas Cnty Health Fac
(Altenheim Proj) GNMA Ser 99
5.50%, 7/20/40........................... 3,200 3,352,000
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 57
Ohio Portfolio - Portfolio of Investments
- --------------------------------------------------------------------------------
Principal
Amount
(000) Value
- --------------------------------------------------------------------------
Madeira City Sch Dist GO
MBIA Ser 04
5.00%, 12/01/22-12/01/23................. $ 2,665 $ 2,808,722
Ohio Air Quality Dev Auth PCR
(Dayton Pwr & Lt) Ser 92B
6.40%, 8/15/27........................... 2,000 2,007,300
(Toledo Edison Co) Ser 97A AMT
6.10%, 8/01/27........................... 5,000 5,199,400
Ohio Capital Corp MFHR
(Rental Hsg) MBIA Ser 95E Pre Re
6.35%, 1/01/22........................... 755 780,164
Ohio Environmental Fac Rev
(Ford Motor Co) Ser 00 AMT
6.15%, 6/01/30........................... 2,500 2,604,475
Ohio Hsg Fin Agy MFHR
(Park Trails Apt) AMBAC Ser 01A AMT
5.50%, 12/01/34.......................... 1,670 1,709,713
Ohio Hsg Fin Agy SFMR
(Mortgage Rev) GNMA AMT
Ser 02
5.375%, 9/01/33.......................... 2,830 2,848,876
Ser 02A-2
5.60%, 9/01/34........................... 795 807,219
Ser 02-A3
5.50%, 9/01/34........................... 1,775 1,819,943
Ohio Sewer & Solid Waste Disp Facs
(Anheuser-Busch) Ser 01 AMT
5.50%, 11/01/35.......................... 3,000 3,101,670
Ohio St Bldg Auth
(Adult Correctl Proj) MBIA Ser 04A
5.00%, 4/01/22........................... 2,975 3,131,158
(St Facs-Admin Bldg Fd Proj) Ser 05A
5.00%, 4/01/24........................... 1,500 1,568,400
Ohio State GO
Ser 04A
5.00%, 6/15/22........................... 3,000 3,157,920
Ohio State Higher Ed Fac Cmnty
(Denison University Proj) Ser 04
5.00%, 11/01/21-11/01/24................. 3,440 3,589,092
Ohio State School Dist
FGIC Ser 03A
6.151%, 3/15/15(c)(e).................... 6,300 7,258,734
Ohio State University
MBIA Ser 04
5.00%, 12/01/22.......................... 1,950 2,053,818
Ohio Wtr Dev Auth
(Anheuser-Busch) Ser 99 AMT
6.00%, 8/01/38........................... 2,250 2,346,053
(North Star BHP Steel) Ser 95 AMT
6.45%, 9/01/20........................... 3,425 3,544,635
- --------------------------------------------------------------------------------
58 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Ohio Portfolio - Portfolio of Investments
- --------------------------------------------------------------------------------
Principal
Amount
(000) Value
- --------------------------------------------------------------------------
Ohio Wtr Dev Auth PCR
(Cleveland Electric) Ser 97A AMT
6.10%, 8/01/20........................... $ 2,000 $ 2,073,880
Grove City Ohio Asses Dist
(Pinnacle Cmnty) Fin Auth Series 04A
6.00%, 12/01/22.......................... 2,155 2,198,272
Port Auth Columbiana Cnty Ohio Solid
Waste Fac Rev
(Apex Environmental LLC) Ser 04A AMT
7.125%, 8/01/25.......................... 500 498,145
Princeton Sch Dist
MBIA Ser 03
5.00%, 12/01/24.......................... 1,600 1,670,736
Riversouth Auth Rev
(Area Redevelopment) Series 04A
5.25%, 12/01/21-12/01/22................. 2,000 2,146,350
Steubenville Hosp Rev
(Trinity Hlth) Ser 00
6.50%, 10/01/30.......................... 2,500 2,749,700
Toledo School Dist
FGIC Ser 03B
5.00%, 12/01/23.......................... 2,940 3,080,767
Toledo-Lucas Cnty Port Auth
(Cargill, Inc. Project) Ser 04B
4.50%, 12/01/15.......................... 2,500 2,535,850
(Crocker Park Proj) Ser 03
5.375%, 12/01/35......................... 5,000 5,228,800
Toledo-Lucas Cnty Port Fac
(CSX Transportation) Ser 92
6.45%, 12/15/21.......................... 1,270 1,448,664
---------------
159,065,538
---------------
California - 1.6%
California State GO
5.20%, 4/01/26........................... 1,000 1,044,510
5.25%, 4/01/29........................... 2,000 2,093,320
---------------
3,137,830
---------------
Florida - 6.9%
Collier Cnty Cmnty Dev Dist
(Fiddlers Creek) Ser 96
7.50%, 5/01/18.......................... 1,550 1,624,400
Collier Cnty IDR
(Southern States Utils) Ser 96 AMT
6.50%, 10/01/25.......................... 1,500 1,562,250
Crossings at Fleming Island Cmnty Dev Dist
(Eagle Harbor) Ser 00C
7.10%, 5/01/30........................... 2,000 2,115,460
Double Branch Cmnty Dev Dist
(Oakleaf Village) Ser 02A
6.70%, 5/01/34........................... 1,000 1,073,830
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 59
Ohio Portfolio - Portfolio of Investments
- --------------------------------------------------------------------------------
Principal
Amount
(000) Value
- --------------------------------------------------------------------------
Hammock Bay Cmnty Dev Dist - Fla Spl Assmt Rev
Ser 04A
6.15%, 5/01/24........................... $ 500 $ 498,720
Manatee Cnty Cmnty Dev Dist
(Heritage Harbor South) Ser 02B
5.40%, 11/01/08.......................... 795 794,451
Northern Palm Beach Cnty
(ABACOA) Ser 96A - Pre Re
7.30%, 8/01/27........................... 5,100 5,507,898
---------------
13,177,009
---------------
Illinois - 0.8%
Antioch Village Spl Svc Area
(Deercrest Proj) Ser 03
6.625%, 3/01/33.......................... 1,000 1,001,740
Plano Spl Svc Area No. 3 Spl Tax
(Lakewood Springs Proj) Ser 05 A
5.95%, 3/01/28........................... 565 556,593
---------------
1,558,333
---------------
Puerto Rico - 2.4%
Puerto Rico Tobacco Settlement Rev
(Childrens Trust Fund) Ser 00
6.00%, 7/01/26........................... 4,000 4,497,040
---------------
South Carolina - 3.1%
South Carolina Pub Svc Auth TBD
FGIC Ser 05A
5.25%, 1/01/22........................... 1,000 1,058,410
South Carolina Pub Svc Auth Rev
Ser 05A
5.25%, 1/01/20........................... 4,210 4,487,902
Ser 05B MBIA
5.00%, 1/01/13 .......................... 300 318,876
---------------
5,865,188
---------------
Total Long-Term Municipal Bonds
(cost $180,625,079)...................... 187,300,938
---------------
Short-Term Municipal Notes(d) - 5.0%
Alaska - 1.6%
Valdez Alaska Marine Term Rev
(BP Pipelines Proj) Ser 03B
2.30%, 7/01/37........................... 3,000 3,000,000
---------------
Massachusetts - 2.3%
Massachusetts State GO
(Central Artery) Series 00A
2.31%, 12/01/30.......................... 4,500 4,500,000
---------------
- --------------------------------------------------------------------------------
60 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Ohio Portfolio - Portfolio of Investments
- --------------------------------------------------------------------------------
Principal
Amount
(000) Value
- --------------------------------------------------------------------------
Minnesota - 1.1%
Montrose Indl Dev Rev
(Lyman Lumber Co. Proj) AMT
2.34%, 5/01/26........................... $ 2,075 $ 2,075,000
---------------
Total Short-Term Municipal Notes
(cost $9,575,000)........................ 9,575,000
---------------
Total Investments - 103.1%
(cost $190,200,079)...................... 196,875,938
Other assets less liabilities - (3.1%)...... (5,967,755)
---------------
Net Assets - 100%........................... $ 190,908,183
===============
FINANCIAL FUTURES CONTRACTS (see Note D)
Value at
Number of Expiration Original March 31, Unrealized
Type Contracts Position Month Value 2005 Appreciation
- ------------------ --------- -------- ---------- ----------- ----------- -------------
U.S. Treasury Note June
10 Yr Futures 35 Short 2005 $ 3,864,361 $ 3,824,297 $ 40,064
INTEREST RATE SWAP CONTRACTS (see Note D)
Rate Type
-------------------------
Payment Payment
Notional made received Unrealized
Swap Amount Termination by the by the Appreciation/
Counterparty (000) Date Portfolio Portfolio (Depreciation)
------------ --------- ----------- --------- --------- --------------
76.48% of
Goldman Sachs & Co. $ 11,100 2/03/06 1 Month LIBOR+ BMA* $ (17,738)
85.10% of
Merrill Lynch 11,100 2/03/06 BMA* 1 Month LIBOR+ 54,950
* BMA (Bond Market Association)
+ LIBOR (London Interbank Offered Rate)
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 61
Ohio Portfolio - Portfolio of Investments
- --------------------------------------------------------------------------------
(a) Position, or portion thereof with an aggregate market value of $57,398,
has been segregated to collateralize margin requirements for open futures
contracts.
(b) Represents entire or partial position segregated as collateral for
interest rate swap.
(c) Inverse floater - security with variable or floating interest rate that
moves in opposite direction of short-term interest rates.
(d) Variable rate coupon, rate shown as of March 31, 2005.
(e) Security is exempt from registration under Rule 144A of the Securities Act
of 1933. These securities are considered liquid and may be resold in
transactions exempt from registration, normally to qualified institutional
buyers. At March 31, 2005, the aggregate market value of these securities
amounted to $7,258,734 or 3.8% of net assets.
Glossary of Terms:
AMBAC American Municipal Bond Assurance Corporation
AMT Alternative Minimum Tax
FGIC Financial Guaranty Insurance Company
FSA Financial Security Assurance, Inc.
GNMA Government National Mortgage Association
GO General Obligation
IDR Industrial Development Revenue
MBIA Municipal Bond Investors Assurance
MFHR Multi-Family Housing Revenue
PCR Pollution Control Revenue
RADIAN Radian Group, Inc.
SFMR Single Family Mortgage Revenue
TBD To Be Determined
See notes to financial statements.
- --------------------------------------------------------------------------------
62 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Pennsylvania Portfolio - Portfolio of Investments
- --------------------------------------------------------------------------------
PENNSYLVANIA PORTFOLIO
PORTFOLIO OF INVESTMENTS
March 31, 2005 (unaudited)
Principal
Amount
(000) Value
- --------------------------------------------------------------------------
MUNICIPAL BONDS & NOTES - 99.0%
Long-Term Municipal Bonds -99.0%
Pennsylvania - 77.3%
Allegheny Cnty Arpt Rev
MBIA Ser 97 AMT
5.75%, 1/01/10........................... $ 2,540 $ 2,734,513
Allegheny Cnty GO
FGIC Ser 05C-57
5.00%, 11/01/23.......................... 6,390 6,696,847
Allegheny Cnty Higher Ed
(Thiel College) ACA Ser 99A
5.375%, 11/15/19-11/15/29................ 2,500 2,549,860
Allegheny Cnty Hlth Fac
(South Hills Hlth) Ser 00B
6.75%, 5/01/25........................... 1,555 1,642,749
Allegheny Cnty Hlth Rev
(Residential Resources) Ser 01
6.60%, 9/01/31........................... 1,595 1,674,192
Allegheny Cnty PCR
(USX Corp.) Ser 98
5.50%, 12/01/29.......................... 2,680 2,775,328
Allegheny Cnty Redev Auth Rev
(Pittsburgh Mills Proj)
5.60%, 7/01/23........................... 1,500 1,554,465
Butler Cnty
FGIC Ser 03
5.25%, 7/15/26........................... 1,625 1,796,990
Crawford Cnty Hlth Fac
(Wesbury Methodist) Ser 99
6.25%, 8/15/29........................... 1,600 1,642,560
Delaware Cnty Higher Ed
(Eastern College) Ser 99
5.625%, 10/01/28......................... 2,500 2,507,000
Ephrata Area Sch Dist FGIC
5.00%, 3/01/22........................... 1,000 1,052,640
Harrisburg Arpt Auth
(Susquehanna Arpt Proj) Ser 99 AMT
5.50%, 1/01/24........................... 3,490 3,169,199
Lancaster Swr Auth Rev
MBIA Ser 04
5.00%, 4/01/22(a)........................ 1,330 1,399,812
Lehigh Northampton Airport Rev
MBIA Ser 00 AMT
6.00%, 5/15/30........................... 4,400 4,809,288
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 63
Pennsylvania Portfolio - Portfolio of Investments
- --------------------------------------------------------------------------------
Principal
Amount
(000) Value
- --------------------------------------------------------------------------
Lycoming Cnty Higher Ed
(College of Technology) AMBAC Ser 02
5.25%, 5/01/32........................... $ 2,250 $ 2,345,625
Montgomery Cnty Higher Ed
(Beaver College) RADIAN Ser 99
5.70%, 4/01/27........................... 6,000 6,280,260
Montgomery Cnty Hospital Rev
(Abington Memorial Hosp) Ser 02A
5.125%, 6/01/32.......................... 3,000 3,040,710
Montgomery Cnty Indl Dev Auth Rev
(Whitemarsh Continuing Care)
6.00%, 2/01/21........................... 415 423,815
Pennsylvania Eco Dev Auth
(30th St Station) ACA Ser 02 AMT
5.875%, 6/01/33.......................... 3,485 3,664,721
Pennsylvania Eco Dev Auth
(Amtrak) Ser 01A AMT
6.375%, 11/01/41......................... 5,000 5,191,000
Pennsylvania Higher Ed
(Dickinson College) RADIAN Ser 03AA-1
5.00%, 11/01/26.......................... 1,000 1,017,400
(UPMC Health Sys) Ser 01A
6.00%, 1/15/31........................... 2,405 2,624,384
Pennsylvania Hsg Fin Agy SFMR
Ser 99-67A
5.90%, 10/01/30(b)....................... 12,040 12,305,601
(Mortgage Rev) AMT
Ser 02-74B
5.25%, 4/01/32........................... 3,225 3,236,191
Pennsylvania Hsg Fin Agy SFMR
(Mortgage Rev) FSA Ser 03 AMT
2.64%, 6/01/08(e)........................ 7,100 7,100,000
Pennsylvania Higher Edl Facs Auth
(Univ Health Sys) AMBAC Ser 05A
5.00%, 8/15/20........................... 2,000 2,114,240
Philadelphia Airport Sys
AMBAC Ser 95A AMT
6.10%, 6/15/25(b)........................ 10,000 10,264,399
Philadelphia Gas Wks Rev
AGC Ser 04A-1
5.25%, 9/01/19........................... 1,015 1,073,606
Philadelphia Ind Dev Rev
FSA Ser 03
14.55%, 10/01/10(c)(e)................... 1,600 1,917,120
Philadelphia Redev Auth Rev
(Neighborhood Transformation) FGIC Ser 05C
5.00%, 4/15/28........................... 3,160 3,263,142
Philadelphia Sch Dist Lease Rev
FSA Ser 03
5.25%, 6/01/26........................... 5,000 5,305,900
- --------------------------------------------------------------------------------
64 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Pennsylvania Portfolio - Portfolio of Investments
- --------------------------------------------------------------------------------
Principal
Amount
(000) Value
- --------------------------------------------------------------------------
Pittsburgh Pub Pkg Auth Rev
FGIC Ser 05B
5.00%, 12/01/23.......................... $ 1,900 $ 1,982,878
Pittsburgh Urban Redev Auth SFMR
(Mortgage Rev) FHA AMT
Ser 97A
6.25%, 10/01/28.......................... 790 816,947
Potter Cnty Hosp Rev
(Charles Cole Memorial) RADIAN Ser 96
6.05%, 8/01/24........................... 4,340 4,511,560
Southcentral Hosp Rev
(Wellspan Health) MBIA Ser 01
5.25%, 5/15/31........................... 4,700 4,857,356
State Pub Sch Bldg Auth Sch Rev
(Colonial Northampton Inter Unit 20)
FGIC Ser 05
5.00%, 5/15/26........................... 2,025 2,098,102
---------------
121,440,400
---------------
California - 0.6%
California State GO
5.00%, 2/01/33........................... 1,000 1,015,620
---------------
Florida - 5.9%
Collier Cnty Cmnty Dev Dist
(Fiddlers Creek) Ser 96
7.50%, 5/01/18........................... 1,315 1,378,120
Collier Cnty IDR
(Southern States Utils) Ser 96 AMT
6.50%, 10/01/25.......................... 3,000 3,124,500
Crossings at Fleming Island Cmnty Dev Dist
(Eagle Harbor) Ser 00C
7.10%, 5/01/30........................... 2,000 2,115,460
Double Branch Cmnty Dev Dist
(Oakleaf Village) Ser 02A
6.70%, 5/01/34........................... 1,050 1,127,522
Hammock Bay Cmnty Dev Dist - Fla Spl
Assmt Rev
Ser 04A
6.15%, 5/01/24........................... 440 438,874
Northern Palm Beach Asses Dist
(Unit Development 27B) Ser 02
6.40%, 8/01/32........................... 990 1,016,512
---------------
9,200,988
---------------
Guam - 0.3%
Guam Intl Arpt Auth
MBIA Ser 03B
5.25%, 10/01/23 ......................... 500 539,010
---------------
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 65
Pennsylvania Portfolio - Portfolio of Investments
- --------------------------------------------------------------------------------
Principal
Amount
(000) Value
- --------------------------------------------------------------------------
Illinois - 1.6%
Antioch Village Spl Svc Area
(Deercrest Proj) Ser 03
6.625%, 3/01/33.......................... $ 1,000 $ 1,001,740
Plano Spl Svc Area No. 3 Spl Tax
(Lakewood Springs Proj) Ser 05A
5.95%, 3/01/28........................... 465 458,081
Yorkville Cmnty Fac Dist
(Raintree Village Proj) Ser 03
6.875%, 3/01/33.......................... 1,000 1,033,730
---------------
2,493,551
---------------
New Jersey - 3.7%
New Jersey Economic Dev Auth Rev
(Cigarette Tax) FGIC Ser 04
5.00%, 6/15/12........................... 5,375 5,784,414
---------------
Puerto Rico - 5.2%
Puerto Rico Comwlth
Hwy & Trans Auth Rev
FGIC Ser 03
7.13%, 7/01/14(d)........................ 3,265 3,974,615
FSA Ser 02D
5.00%, 7/01/27........................... 4,000 4,157,200
---------------
8,131,815
---------------
South Carolina - 3.1%
South Carolina Pub Svc Auth Rev
Ser 05A
5.25%, 1/01/20........................... 2,570 2,739,646
Ser 05B
5.00%, 1/01/14 .......................... 2,000 2,126,120
---------------
4,865,766
---------------
Virgin Islands - 1.3%
Virgin Islands Pub Fin Auth Rev
ACA Ser 03
5.00%, 10/01/31.......................... 1,250 1,264,113
Virgin Islands Pub Fin Auth Rev(c)(e)
FSA Ser 03A
13.38%, 10/01/13......................... 85 125,048
FSA Ser 03B
13.38%, 10/01/14......................... 50 73,378
FSA Ser 03C
14.64%, 10/01/15......................... 70 109,614
FSA Ser 03D
14.64%, 10/01/16......................... 180 269,892
FSA Ser 03E
14.64%, 10/01/17......................... 115 172,115
---------------
2,014,160
---------------
- --------------------------------------------------------------------------------
66 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Pennsylvania Portfolio - Portfolio of Investments
- --------------------------------------------------------------------------------
Principal
Amount
(000) Value
- --------------------------------------------------------------------------
Total Investments - 99.0%
(cost $149,656,140) ..................... $ 155,485,724
Other assets less liabilities - 1.0%........ 1,502,087
---------------
Net Assets - 100%........................... $ 156,987,811
===============
FINANCIAL FUTURES CONTRACTS (see note D)
Value at
Number of Expiration Original March 31, Unrealized
Type Contracts Position Month Value 2005 Depreciation
- ------------------ --------- -------- ---------- ----------- ----------- -------------
U.S. Treasury Note June
10 Yr Futures 33 Long 2005 $ 3,643,788 $ 3,605,766 $ (38,022)
INTEREST RATE SWAP CONTRACTS (see Note D)
Rate Type
-------------------------
Payment Payment
Notional made received Unrealized
Swap Amount Termination by the by the Appreciation/
Counterparty (000) Date Portfolio Portfolio (Depreciation)
------------ --------- ----------- --------- --------- --------------
76.48% of
Goldman Sachs & Co. $ 9,900 2/03/06 1 Month LIBOR+ BMA* $ (15,820)
85.10% of
Merrill Lynch 9,900 2/03/06 BMA* 1 Month LIBOR+ 49,009
* BMA (Bond Market Association)
+ LIBOR (London Interbank Offered Rate)
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 67
Pennsylvania Portfolio - Portfolio of Investments
- --------------------------------------------------------------------------------
(a) Position, or portion thereof with an aggregate market value of $89,462 has
been segregated to collateralize margin requirements for open futures
contracts.
(b) Represents entire or partial position segregated as collateral for
interest rate swap.
(c) Inverse floater - security with variable or floating interest rate that
moves in opposite direction of short-term interest rates.
(d) Variable rate coupon, rate shown as of March 31, 2005.
(e) Security is exempt from registration under Rule 144A of the Securities Act
of 1933. These securities are considered liquid and may be resold in
transactions exempt from registration, normally to qualified institutional
buyers. At March 31, 2005, the aggregate market value of these securities
amounted to $9,767,167 or 6.2% of net assets.
Glossary of Terms:
ACA American Capital Access
AMBAC American Municipal Bond Assurance Corporation
AMT Alternative Minimum Tax
FGIC Financial Guaranty Insurance Company
FHA Federal Housing Authority
FSA Financial Security Assurance, Inc.
GO General Obligation
IDR Industrial Development Revenue
MBIA Municipal Bond Investors Assurance
PCR Pollution Control Revenue
RADIAN Radian Group, Inc.
SFMR Single Family Mortgage Revenue
See notes to financial statements.
- --------------------------------------------------------------------------------
68 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Virginia Portfolio - Portfolio of Investments
- --------------------------------------------------------------------------------
VIRGINIA PORTFOLIO
PORTFOLIO OF INVESTMENTS
March 31, 2005 (unaudited)
Principal
Amount
(000) Value
- --------------------------------------------------------------------------
MUNICIPAL BONDS & NOTES - 102.9%
Long-Term Municipal Bonds - 97.8%
Virginia - 87.0%
Albemarle Cnty Ed Fac
(The Convent School) Ser 01A
7.50%, 7/15/23........................... $ 8,260 $ 8,800,782
7.75%, 7/15/32........................... 500 530,955
Alexandria MFHR
(Buckingham Village Apts) Ser 96A AMT
6.15%, 1/01/29........................... 4,000 4,080,120
Arlington Cnty Hosp Rev
(Arlington Health Sys) Ser 01
5.25%, 7/01/31........................... 5,900 6,086,558
Arlington Cnty IDR Sewer Rev
(Ogden Martin) FSA Ser 98B AMT
5.25%, 1/01/09........................... 2,295 2,457,761
Arlington Cnty MFHR
(Arlington View Terrace)
FNMA Ser 01 AMT
5.15%, 11/01/31.......................... 1,550 1,589,897
Bell Creek Cmnty Dev Dist
Ser 03A
6.75%, 3/01/22........................... 900 923,724
Broad Street Cmnty Dev Dist
(Parking Fac) Ser 03
7.50%, 6/01/33........................... 1,500 1,546,605
Celebrate VA North Cmnty Dev Dist
Ser 03B
6.60%, 3/01/25........................... 1,250 1,272,088
Chesterfield Cnty
(VA Elec & Pwr Co) Ser 02
5.875%, 6/01/17.......................... 3,800 4,184,370
Dinwiddie Cnty Indl Dev Auth
(Lease Rev) MBIA Ser 04B
5.00%, 2/15/24........................... 2,100 2,194,668
Dulles Town Cmnty Dev Auth
(Dulles Town Ctr Proj) Ser 98
6.25%, 3/01/26........................... 2,055 2,099,265
Fairfax Cnty Va Swr Rev
Ser 04A
7.052%, 7/15/13(c)(d).................... 1,580 1,868,856
Ser 04B
7.052%, 7/15/14(c)(d).................... 1,665 1,973,358
Ser 04C
7.052%, 7/15/14(c)(d).................... 1,760 2,060,115
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 69
Virginia Portfolio - Portfolio of Investments
- --------------------------------------------------------------------------------
Principal
Amount
(000) Value
- --------------------------------------------------------------------------
Fairfax Water Auth Rev
Ser 02
5.00%, 4/01/32........................... $ 3,380 $ 3,476,296
Greater Richmond Hotel Tax Rev
(Convention Ctr Proj) Ser 00
6.25%, 6/15/32........................... 6,000 6,879,600
Hampton Convention Ctr Rev
AMBAC Ser 02
5.00%, 1/15/35(a)........................ 5,150 5,293,222
Harrisonburg MFHR
(Battery Heights Assoc) GNMA Ser 96A
6.25%, 4/20/36........................... 5,185 5,347,809
Harrisonburg MFHR
(Greens of Salem Run) FSA Ser 97 AMT
6.30%, 4/01/29........................... 1,140 1,189,487
Henry Cnty Hosp Rev
(Memorial Hosp Martinsville & Henry)
Ser 97
6.00%, 1/01/27........................... 1,250 1,329,275
Isle Wight Cnty Solid Waste Rev
(Union Camp Corp) Ser 94 AMT
6.55%, 4/01/24........................... 4,000 4,050,200
James City Cnty Solid Waste Rev
(Anheuser Busch Proj) Ser 97 AMT
6.00%, 4/01/32........................... 4,200 4,351,326
Loudoun Cnty IDR Hosp Rev
(Loudoun Hosp Ctr) FSA Ser 95
5.80%, 6/01/20........................... 2,500 2,562,325
Metropolitan Washington Arpt Rev
Ser 97B AMT
5.50%, 10/01/23(a)....................... 9,410 9,664,164
Newport News Hlth Care Fac
(Mennowood) GNMA Ser 96A
6.25%, 8/01/36........................... 2,590 2,703,157
Newport News MFHR
(Walker Village Proj) GNMA Ser 02A AMT
5.55%, 9/20/34........................... 1,880 1,931,888
5.65%, 3/20/44........................... 1,660 1,697,416
Norfolk Arpt Auth Rev
FGIC Ser 01B AMT
5.30%, 7/01/25(b)........................ 10,000 10,375,199
(Air Cargo) Ser 02 AMT
6.25%, 1/01/30........................... 1,000 1,018,880
Portsmouth Util Rev
FGIC Ser 01B
5.00%, 6/01/26........................... 1,500 1,526,160
Prince William MFHR
(Woodwind Gables)
AMBAC Ser 01A AMT
5.30%, 12/01/34.......................... 2,860 2,932,272
- --------------------------------------------------------------------------------
70 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Virginia Portfolio - Portfolio of Investments
- --------------------------------------------------------------------------------
Principal
Amount
(000) Value
- --------------------------------------------------------------------------
Staunton Ed Fac
(Mary Baldwin College) Ser 96
6.75%, 11/01/21.......................... $ 3,645 $ 3,778,407
Virginia Beach MFHR
(Beth Sholom Terrace) GNMA Ser 02
5.40%, 4/01/44........................... 2,900 3,000,137
Virginia Biotechnology Auth
(Consolidated Laboratories Proj) Ser 01
5.00%, 9/01/21........................... 4,170 4,365,031
Virginia Hsg Dev Auth MFHR
(Rental Hsg)
Ser 99 AMT
5.95%, 2/01/23........................... 5,525 5,742,188
Ser 02B AMT
5.50%, 4/01/27........................... 5,000 5,130,600
Virginia Hsg Dev Auth SFMR
(Mortgage Rev) Ser 01D AMT
5.40%, 6/01/24........................... 3,155 3,234,380
Virginia Port Auth Rev
(Newport News) Ser 02 AMT
5.00%, 7/01/27........................... 1,000 1,021,450
5.125%, 7/01/24.......................... 4,000 4,156,320
Virginia Sewer Rev
(Hopwell Wastewtr Fac) Ser 95A AMT
6.00%, 10/01/25......................... 1,375 1,411,768
---------------
139,838,079
---------------
California - 2.7%
California State GO
5.00%, 2/01/33........................... 1,615 1,658,024
5.25%, 4/01/29........................... 1,000 1,046,660
South Tahoe Jt Pwrs Fing Auth Rev
(Redev Proj Area No 1) AMBAC Ser 05A
5.00%, 10/01/28.......................... 1,500 1,515,450
---------------
4,220,134
---------------
Florida - 2.0%
Fleming Island Plantation Cmnty Dev Dist
Ser 00B
7.375%, 5/01/31.......................... 3,000 3,226,680
---------------
Illinois - 0.9%
Plano Spl Svc Area No. 3 Spl Tax
(Lakewood Springs Proj) Ser 05A
5.95%, 3/01/28........................... 465 458,081
Yorkville Cmnty Fac Dist
(Raintree Village Project) Ser 03
6.875%, 3/01/33.......................... 1,000 1,033,730
---------------
1,491,811
---------------
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 71
Virginia Portfolio - Portfolio of Investments
- --------------------------------------------------------------------------------
Principal
Amount
(000) Value
- --------------------------------------------------------------------------
Puerto Rico - 2.1%
Puerto Rico Comwlth Hwy & Trans Auth Rev
FGIC Ser 03
7.127%, 7/01/14(c)(d).................... $ 1,800 $ 2,191,212
Puerto Rico Elec Pwr Auth
XLCA Ser 02-1
5.25%, 7/01/22........................... 1,100 1,182,379
---------------
3,373,591
---------------
South Carolina - 3.1%
South Carolina Pub Svc Auth TBD
FGIC Ser 05A
5.25%, 1/01/22........................... 1,000 1,058,410
South Carolina Pub Svc Auth Rev
Ser 05A
5.25%, 1/01/21........................... 1,500 1,595,205
Ser 05B MBIA
5.00%, 1/01/13........................... 2,200 2,338,424
---------------
4,992,039
---------------
Total Long-Term Municipal Bonds
(cost $150,562,495)...................... 157,142,334
---------------
Short-Term Municipal Notes(a) - 5.1%
Alaska - 0.6%
Valdez Alaska Marine Term Rev
(BP Pipelines Proj) Ser 03B
2.30%, 7/01/37........................... 1,000 1,000,000
---------------
Louisiana - 0.3%
East Baton Rouge Parish Pollution Ctl Rev
(Exxon Project)
2.19%, 11/01/19.......................... 500 500,000
---------------
Pennsylvania - 0.6%
Philadelphia Auth For Indl Dev Revs
(Fox Chase Cancer Center Proj) Ser 97
2.30%, 7/01/25........................... 1,000 1,000,000
---------------
Texas - 3.1%
Gulf Coast Waste Disp Auth
(Amoco Oil Proj) Ser 95 AMT
2.35%, 7/01/27........................... 3,500 3,500,000
Lower Neches Valley Auth Indl Dev Corp
Exempt Facs Rev
(Exxon Mobil Proj) Ser 01B AMT
2.25%, 11/01/29.......................... 1,500 1,500,000
---------------
5,000,000
---------------
- --------------------------------------------------------------------------------
72 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Virginia Portfolio - Portfolio of Investments
- --------------------------------------------------------------------------------
Principal
Amount
(000) Value
- --------------------------------------------------------------------------
Virginia - 0.5%
Loudoun Cnty Indl Dev Auth
(Howard Hughes Med)
Ser 03A
2.29%, 2/15/38........................... $ 300 $ 300,000
Ser 03C
2.30%, 2/15/38........................... 500 500,000
---------------
800,000
---------------
Total Short-Term Municipal Notes
(cost $8,300,000)........................ 8,300,000
---------------
Total Investments - 102.9%
(cost $158,862,495)...................... 165,442,334
Other assets less liabilities - (2.9%)...... (4,748,887)
---------------
Net Assets - 100%........................... $ 160,693,447
===============
FINANCIAL FUTURES CONTRACTS (see Note D)
Value at
Number of Expiration Original March 31, Unrealized
Type Contracts Position Month Value 2005 Depreciation
- ------------------ --------- -------- ---------- ----------- ----------- -------------
U.S. Treasury Note June
10 Yr Futures 19 Long 2005 $ 2,097,938 $ 2,076,047 $ (21,892)
U.S. Treasury Note June
10 Yr Swap Futures 35 Long 2005 3,841,381 3,772,344 (69,037)
---------
$ (90,929)
=========
INTEREST RATE SWAP CONTRACTS (see Note D)
Rate Type
-------------------------
Payment Payment
Notional made received Unrealized
Swap Amount Termination by the by the Appreciation/
Counterparty (000) Date Portfolio Portfolio (Depreciation)
------------ --------- ----------- --------- --------- --------------
76.48% of
Goldman Sachs & Co. $ 9,400 2/03/06 1 Month LIBOR+ BMA* $ (15,021)
85.10% of
Merrill Lynch 9,400 2/03/06 BMA* 1 Month LIBOR+ 46,534
* BMA (Bond Market Association)
+ LIBOR (London Interbank Offered Rate)
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 73
Portfolio of Investments
- --------------------------------------------------------------------------------
(a) Represents entire or partial position segregated as collateral for
interest rate swap.
(b) Position, or portion thereof with an aggregate market value of $217,879
has been segregated to collateralize margin requirements for open futures
contracts.
(c) Security is exempt from registration under Rule 144A of the Securities Act
of 1933. These securities are considered liquid and may be resold in
transactions exempt from registration, normally to qualified institutional
buyers. At March 31, 2005, the aggregate market value of these securities
amounted to $8,093,541 or 5.0% of net assets.
(d) Inverse floater - security with variable or floating interest rate that
moves in opposite direction of short-term interest rates.
Glossary of Terms:
AMBAC American Municipal Bond Assurance Corporation
AMT Alternative Minimum Tax
FGIC Financial Guaranty Insurance Company
FNMA Federal National Mortgage Association
FSA Financial Security Assurance, Inc.
GNMA Government National Mortgage Association
GO General Obligation
MBIA Municipal Bond Investors Assurance
MFHR Multi-Family Housing Revenue
SFMR Single Family Mortgage Revenue
TBD To Be Determined
XLCA XL Capital Assurance, Inc.
See notes to financial statements.
- --------------------------------------------------------------------------------
74 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Statement of Assets & Liabilities
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS & LIABILITIES
March 31, 2005 (unaudited)
Arizona Florida
---------------- -----------------
Assets
Investments in securities, at value
(cost: $179,281,240 and $204,824,874,
respectively).................................... $ 185,326,530 $ 213,951,953
Unrealized appreciation of interest rate swap
contracts........................................ 54,950 91,811
Interest receivable................................. 2,473,854 4,405,570
Receivable for shares of beneficial interest sold... 1,430,982 1,225,720
Receivable for investment securities sold........... -0- 1,105,000
Variation margin on futures contracts............... -0- 14,438
---------------- -----------------
Total assets........................................ 189,286,316 220,794,492
---------------- -----------------
Liabilities
Due to custodian.................................... 220,075 277,185
Unrealized depreciation of interest rate swap
contracts........................................ 17,738 20,615
Payable for shares of beneficial interest
redeemed......................................... 1,268,502 1,157,370
Payable for investment securities purchased......... 1,047,270 6,496,680
Dividends payable.................................. 219,411 277,849
Distribution fee payable............................ 103,479 119,088
Advisory fee payable................................ 43,220 49,155
Transfer agent fee payable.......................... 5,696 4,592
Administrative fee payable.......................... 1,291 1,482
Accrued expenses and other liabilities.............. 100,029 116,105
---------------- -----------------
Total liabilities................................... 3,026,711 8,520,121
---------------- -----------------
Net Assets.......................................... $ 186,259,605 $ 212,274,371
================ =================
Composition of Net Assets
Shares of beneficial interest, at par............... $ 169,946 $ 207,883
Additional paid-in capital.......................... 181,358,608 212,551,539
Distributions in excess of net investment income.... (242,315) (302,864)
Accumulated net realized loss on investment
transactions..................................... (1,109,136) (9,348,201)
Net unrealized appreciation of investments.......... 6,082,502 9,166,014
---------------- -----------------
$ 186,259,605 $ 212,274,371
================ =================
Class A Shares
Net assets.......................................... $ 94,935,822 $ 105,470,129
---------------- -----------------
Shares of beneficial interest outstanding........... 8,656,105 10,332,065
---------------- -----------------
Class B Shares
Net assets.......................................... $ 69,636,499 $ 67,097,259
---------------- -----------------
Shares of beneficial interest outstanding........... 6,358,217 6,568,701
---------------- -----------------
Class C Shares
Net assets.......................................... $ 21,687,284 $ 39,706,983
---------------- -----------------
Shares of beneficial interest outstanding........... 1,980,325 3,887,497
---------------- -----------------
Calculation of Maximum Offering Price
Class A Shares
Net asset value and redemption price per share...... $ 10.97 $ 10.21
Sales charge -- 4.25% of public offering price...... .49 .45
---------------- -----------------
Maximum offering price.............................. $ 11.46 $ 10.66
================ =================
Class B Shares
Net asset value and offering price per share........ $ 10.95 $ 10.21
================ =================
Class C Shares
Net asset value and offering price per share........ $ 10.95 $ 10.21
================ =================
See notes to financial statements.
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 75
Statement of Assets & Liabilities
- --------------------------------------------------------------------------------
Massachusetts Michigan
---------------- -----------------
Assets
Investments in securities, at value
(cost: $130,795,951 and $128,929,272,
respectively).................................... $ 137,619,634 $ 134,290,623
Cash................................................ -0- 259,130
Unrealized appreciation of interest rate swap
contracts........................................ 39,603 39,603
Interest receivable................................. 2,026,210 2,380,597
Receivable for shares of beneficial interest sold... 1,137,443 126,720
Variation margin on futures contracts............... 15,984 -0-
---------------- -----------------
Total assets........................................ 140,838,874 137,096,673
---------------- -----------------
Liabilities
Due to custodian.................................... 236,064 -0-
Unrealized depreciation of interest rate swap
contracts........................................ 19,942 12,784
Payable for investment securities purchased......... 5,626,824 218,528
Payable for shares of beneficial interest
redeemed......................................... 645,137 160,651
Dividends payable................................... 157,081 155,754
Distribution fee payable............................ 89,563 88,051
Advisory fee payable................................ 28,430 53,599
Transfer agent fee payable.......................... 4,152 1,493
Administrative fee payable.......................... 1,465 -0-
Variation margin on futures contracts............... -0- 11,344
Accrued expenses and other liabilities.............. 107,268 118,196
---------------- -----------------
Total liabilities................................... 6,915,926 820,400
---------------- -----------------
Net Assets.......................................... $ 133,922,948 $ 136,276,273
================ =================
Composition of Net Assets
Shares of beneficial interest, at par............... $ 123,419 $ 126,612
Additional paid-in capital.......................... 137,581,496 131,378,228
Distributions in excess of net investment income.... (265,226) (259,460)
Accumulated net realized loss on investment
transactions..................................... (10,324,367) (382,460)
Net unrealized appreciation of investments.......... 6,807,626 5,413,353
---------------- -----------------
$ 133,922,948 $ 136,276,273
================ =================
Class A Shares
Net assets.......................................... $ 42,255,317 $ 47,115,171
---------------- -----------------
Shares of beneficial interest outstanding........... 3,889,264 4,373,070
---------------- -----------------
Class B Shares
Net assets.......................................... $ 57,528,077 $ 44,024,034
---------------- -----------------
Shares of beneficial interest outstanding........... 5,304,663 4,092,240
---------------- -----------------
Class C Shares
Net assets.......................................... $ 34,139,554 $ 45,137,068
---------------- -----------------
Shares of beneficial interest outstanding........... 3,147,973 4,195,929
---------------- -----------------
Calculation of Maximum Offering Price
Class A Shares
Net asset value and redemption price per share...... $ 10.86 $ 10.77
Sales charge -- 4.25% of public offering price...... .48 .48
---------------- -----------------
Maximum offering price.............................. $ 11.34 $ 11.25
================ =================
Class B Shares
Net asset value and offering price per share........ $ 10.84 $ 10.76
================ =================
Class C Shares
Net asset value and offering price per share........ $ 10.84 $ 10.76
================ =================
See notes to financial statements.
- --------------------------------------------------------------------------------
76 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Statement of Assets & Liabilities
- --------------------------------------------------------------------------------
Minnesota New Jersey
---------------- -----------------
Assets
Investments in securities, at value
(cost: $97,749,425 and $175,245,025,
respectively).................................... $ 101,863,506 $ 184,389,543
Cash................................................ -0- 370,056
Unrealized appreciation of interest rate swap
contracts........................................ 27,722 72,572
Interest receivable................................. 1,408,738 2,915,394
Receivable for shares of beneficial interest sold... 126,543 665,738
Variation margin on futures contracts............... 12,891 -0-
Receivable for investment securities sold........... -0- 144,375
---------------- -----------------
Total assets........................................ 103,439,400 188,557,678
---------------- -----------------
Liabilities
Due to custodian.................................... 14,816 -0-
Unrealized depreciation of interest rate swap
contracts........................................ 8,949 18,697
Payable for investment securities purchased......... 4,043,593 3,829,016
Dividends payable................................... 116,322 215,982
Payable for shares of beneficial interest
redeemed......................................... 107,201 955,585
Distribution fee payable............................ 44,238 113,617
Advisory fee payable................................ 30,561 53,096
Transfer agent fee payable.......................... 5,814 4,537
Variation margin on futures contracts............... -0- 44,156
Administrative fee payable.......................... -0- 1,655
Accrued expenses and other liabilities.............. 103,255 143,528
---------------- -----------------
Total liabilities................................... 4,474,749 5,379,869
---------------- -----------------
Net Assets.......................................... $ 98,964,651 $ 183,177,809
================ =================
Composition of Net Assets
Shares of beneficial interest, at par............... $ 97,708 $ 186,070
Additional paid-in capital.......................... 97,003,415 188,681,294
Distributions in excess of net investment income.... (190,636) (438,853)
Accumulated net realized loss on investment
transactions..................................... (2,049,886) (14,575,772)
Net unrealized appreciation of investments.......... 4,104,050 9,325,070
---------------- -----------------
$ 98,964,651 $ 183,177,809
================ =================
Class A Shares
Net assets.......................................... $ 67,134,092 $ 73,871,888
---------------- -----------------
Shares of beneficial interest outstanding........... 6,628,720 7,505,814
---------------- -----------------
Class B Shares
Net assets.......................................... $ 15,720,976 $ 73,146,500
---------------- -----------------
Shares of beneficial interest outstanding........... 1,552,752 7,429,763
---------------- -----------------
Class C Shares
Net assets.......................................... $ 16,109,583 $ 36,159,421
---------------- -----------------
Shares of beneficial interest outstanding........... 1,589,317 3,671,405
---------------- -----------------
Calculation of Maximum Offering Price
Class A Shares
Net asset value and redemption price per share...... $ 10.13 $ 9.84
Sales charge -- 4.25% of public offering price....... .45 .44
---------------- -----------------
Maximum offering price.............................. $ 10.58 $ 10.28
================ =================
Class B Shares
Net asset value and offering price per share........ $ 10.12 $ 9.85
================ =================
Class C Shares
Net asset value and offering price per share........ $ 10.14 $ 9.85
================ =================
See notes to financial statements.
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 77
Statement of Assets & Liabilities
- --------------------------------------------------------------------------------
Ohio Pennsylvania
---------------- -----------------
Assets
Investments in securities, at value
(cost: $190,200,079 and $149,656,140,
respectively).................................... $ 196,875,938 $ 155,485,724
Cash................................................ 95,007 -0-
Unrealized appreciation of interest rate swap
contracts........................................ 54,950 49,009
Interest receivable................................. 2,807,943 2,817,356
Receivable for shares of beneficial interest sold... 853,640 633,349
Receivable for investment securities sold........... -0- 5,665,167
Variation margin on futures contracts............... -0- 17,016
---------------- -----------------
Total assets........................................ 200,687,478 164,667,621
---------------- -----------------
Liabilities
Due to custodian.................................... -0- 57,598
Unrealized depreciation of interest rate swap
contracts........................................ 17,738 15,820
Payable for investment securities purchased......... 8,248,572 6,063,752
Payable for shares of beneficial interest
redeemed......................................... 997,171 1,062,471
Dividends payable................................... 218,086 185,321
Distribution fee payable............................ 116,134 90,846
Advisory fee payable................................ 54,926 55,560
Variation margin on futures contracts............... 18,047 -0-
Transfer agent fee payable.......................... 5,670 6,913
Administrative fee payable.......................... 1,885 2,160
Accrued expenses and other liabilities.............. 101,066 139,369
---------------- -----------------
Total liabilities................................... 9,779,295 7,679,810
---------------- -----------------
Net Assets.......................................... $ 190,908,183 $ 156,987,811
================ =================
Composition of Net Assets
Shares of beneficial interest, at par............... $ 189,586 $ 150,498
Additional paid-in capital.......................... 191,454,909 153,955,959
Distributions in excess of net investment income.... (162,626) (155,316)
Accumulated net realized loss on investment
transactions..................................... (7,326,821) (2,788,081)
Net unrealized appreciation of investments.......... 6,753,135 5,824,751
---------------- -----------------
$ 190,908,183 $ 156,987,811
================ =================
Class A Shares
Net assets.......................................... $ 80,623,653 $ 74,163,673
---------------- -----------------
Shares of beneficial interest outstanding........... 8,003,405 7,110,107
---------------- -----------------
Class B Shares
Net assets.......................................... $ 63,463,681 $ 49,030,122
---------------- -----------------
Shares of beneficial interest outstanding........... 6,305,236 4,700,173
---------------- -----------------
Class C Shares
Net assets.......................................... $ 46,820,849 $ 33,794,016
---------------- -----------------
Shares of beneficial interest outstanding........... 4,649,925 3,239,546
---------------- -----------------
Calculation of Maximum Offering Price
Class A Shares
Net asset value and redemption price per share...... $ 10.07 $ 10.43
Sales charge -- 4.25% of public offering price....... .45 .46
---------------- -----------------
Maximum offering price.............................. $ 10.52 $ 10.89
================ =================
Class B Shares
Net asset value and offering price per share........ $ 10.07 $ 10.43
================ =================
Class C Shares
Net asset value and offering price per share........ $ 10.07 $ 10.43
================ =================
See notes to financial statements
- --------------------------------------------------------------------------------
78 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Statement of Assets & Liabilities
- --------------------------------------------------------------------------------
Virginia
---------------
Assets
Investment in securities, at value (cost $158,862,495).. $ 165,442,334
Unrealized appreciation of interest rate swap contracts. 46,534
Interest receivable..................................... 2,597,919
Receivable for shares of beneficial interest sold....... 1,170,370
Variation margin on futures contracts................... 29,484
---------------
Total assets............................................ 169,286,641
---------------
Liabilities
Due to custodian........................................ 315,358
Unrealized depreciation of interest rate swap contracts. 15,021
Payable for investment securities purchased............. 6,577,892
Payable for shares of beneficial interest redeemed...... 1,229,067
Dividends payable....................................... 210,044
Distribution fee payable................................ 91,693
Advisory fee payable.................................... 32,812
Transfer agent fee payable.............................. 5,921
Accrued expenses and other liabilities.................. 115,386
---------------
Total liabilities....................................... 8,593,194
---------------
Net Assets.............................................. $ 160,693,447
===============
Composition of Net Assets
Shares of beneficial interest, at par................... $ 149,737
Additional paid-in capital.............................. 157,423,852
Accumulated undistributed net investment income......... 139,628
Accumulated net realized loss on investment transactions (3,540,193)
Net unrealized appreciation of investments.............. 6,520,423
---------------
$ 160,693,447
===============
Class A Shares
Net assets.............................................. $ 76,934,055
---------------
Shares of beneficial interest outstanding............... 7,161,170
---------------
Class B Shares
Net assets.............................................. $ 56,907,860
---------------
Shares of beneficial interest outstanding............... 5,307,214
---------------
Class C Shares
Net assets.............................................. $ 26,851,532
---------------
Shares of beneficial interest outstanding............... 2,505,305
---------------
Calculation of Maximum Offering Price
Class A Shares
Net asset value and redemption price per share.......... $ 10.74
Sales charge -- 4.25% of public offering price........... $ .48
---------------
Maximum offering price.................................. $ 11.22
===============
Class B Shares
Net asset value and offering price per share............ $ 10.72
===============
Class C Shares
Net asset value and offering price per share............ $ 10.72
===============
See notes to financial statements.
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 79
Statement of Operations
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
Six Months Ended March 31, 2005 (unaudited)
Arizona Florida
--------------- ---------------
Investment Income
Interest............................... $ 4,827,495 $ 5,972,222
--------------- ---------------
Expenses
Advisory fee........................... 424,834 485,559
Distribution fee -- Class A............ 139,197 153,714
Distribution fee -- Class B............ 375,400 369,133
Distribution fee -- Class C............ 104,684 197,504
Custodian.............................. 66,593 64,391
Transfer agency........................ 39,193 49,436
Administrative......................... 34,500 34,500
Audit.................................. 25,134 19,432
Legal.................................. 17,215 19,546
Printing............................... 16,277 27,339
Registration........................... 8,916 10,010
Trustees' fees......................... 1,000 759
Miscellaneous.......................... 3,490 5,904
--------------- ---------------
Total expenses......................... 1,256,433 1,437,227
Less: expenses waived and reimbursed by
the Adviser (see Note B)............ (183,964) (198,904)
Less: expense offset arrangement
(see Note B)........................ (32) (42)
--------------- ---------------
Net expenses........................... 1,072,437 1,238,281
--------------- ---------------
Net investment income.................. 3,755,058 4,733,941
--------------- ---------------
Realized and Unrealized Gain (Loss)
on Investment Transactions
Net realized gain (loss) on:
Investment transactions............. 1,690,027 966,958
Futures contracts................... -0- 106,054
Swap contracts...................... 10,095 (6,898)
Net change in unrealized
appreciation/depreciation of:
Investments......................... (1,420,588) (1,937,124)
Futures contracts................... -0- (116,366)
Swap contracts...................... (55) 93,094
--------------- ---------------
Net gain (loss) on investment
transactions........................ 279,479 (894,282)
--------------- ---------------
Net Increase in Net Assets
from Operations..................... $ 4,034,537 $ 3,839,659
=============== ===============
See notes to financial statements.
- --------------------------------------------------------------------------------
80 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Statement of Operations
- --------------------------------------------------------------------------------
Massachusetts Michigan
--------------- ---------------
Investment Income
Interest............................... $ 3,552,186 $ 3,626,008
--------------- ---------------
Expenses
Advisory fee........................... 307,861 307,709
Distribution fee -- Class A............ 60,686 69,361
Distribution fee -- Class B............ 306,701 230,622
Distribution fee -- Class C............ 175,150 221,972
Custodian.............................. 59,422 66,628
Transfer agency........................ 38,469 44,273
Administrative......................... 34,500 34,500
Audit.................................. 23,425 25,581
Legal.................................. 17,848 21,784
Printing............................... 17,350 21,188
Registration........................... 4,585 49
Trustees' fees......................... 1,300 1,300
Miscellaneous.......................... 1,278 6,386
--------------- ---------------
Total expenses......................... 1,048,575 1,051,353
Less: expenses waived and reimbursed by
the Adviser (see Note B)............ (150,240) (43,858)
Less: expense offset arrangement
(see Note B)........................ (47) (44)
--------------- ---------------
Net expenses........................... 898,288 1,007,451
--------------- ---------------
Net investment income................. 2,653,898 2,618,557
--------------- ---------------
Realized and Unrealized Gain (Loss)
on Investment Transactions
Net realized gain (loss) on:
Investment transactions............. 823,274 898,694
Futures contracts................... 50,928 (10,590)
Swap contracts...................... 19,819 11,056
Net change in unrealized
appreciation/depreciation of:
Investments......................... (1,419,577) (1,114,185)
Futures contracts................... (157,603) 50,960
Swap contracts...................... (14,024) (2,259)
--------------- ---------------
Net loss on investment transactions.... (697,183) (166,324)
--------------- ---------------
Net Increase in Net Assets
from Operations..................... $ 1,956,715 $ 2,452,233
=============== ===============
See notes to financial statements.
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 81
Statement of Operations
- --------------------------------------------------------------------------------
Minnesota New Jersey
--------------- ---------------
Investment Income
Interest............................... $ 2,496,992 $ 4,944,653
--------------- ---------------
Expenses
Advisory fee........................... 222,828 431,491
Distribution fee -- Class A............ 99,551 112,980
Distribution fee -- Class B............ 82,456 397,217
Distribution fee -- Class C............ 80,882 185,053
Custodian.............................. 59,417 65,496
Administrative......................... 34,500 34,500
Transfer agency........................ 27,698 70,785
Audit.................................. 19,090 19,250
Printing............................... 18,846 27,229
Legal.................................. 13,432 15,466
Trustees' fees......................... 1,150 1,474
Registration........................... 756 7,101
Miscellaneous.......................... 2,591 6,069
--------------- ---------------
Total expenses......................... 663,197 1,374,111
Less: expenses waived and reimbursed by
the Adviser (see Note B)............ (103,173) (132,250)
Less: expense offset arrangement
(see Note B)........................ (31) (56)
--------------- ---------------
Net expenses........................... 559,993 1,241,805
--------------- ---------------
Net investment income.................. 1,936,999 3,702,848
--------------- ---------------
Realized and Unrealized Gain (Loss)
on Investment Transactions
Net realized gain (loss) on:
Investment transactions............. 95,401 1,300,831
Futures contracts................... (29,875) (94,689)
Swap contracts...................... 5,715 37,167
Net change in unrealized
appreciation/depreciation of:
Investments......................... (161,328) (1,127,682)
Futures contracts................... (28,804) 178,833
Swap contracts...................... (392) (18,506)
--------------- ---------------
Net gain (loss) on investment
transactions (119,283) 275,954
--------------- ---------------
Net Increase in Net Assets
from Operations..................... $ 1,817,716 $ 3,978,802
=============== ===============
See notes to financial statements.
- --------------------------------------------------------------------------------
82 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Statement of Operations
- --------------------------------------------------------------------------------
Ohio Pennsylvania
--------------- ---------------
Investment Income
Interest............................... $ 5,020,554 $ 4,245,769
--------------- ---------------
Expenses
Advisory fee........................... 441,027 366,565
Distribution fee -- Class A............ 120,920 111,838
Distribution fee -- Class B............ 336,792 264,160
Distribution fee -- Class C............ 240,195 177,635
Custodian.............................. 68,217 67,585
Transfer agency........................ 53,820 56,170
Administrative......................... 34,500 34,500
Printing............................... 26,664 28,368
Audit.................................. 22,453 20,880
Legal.................................. 16,535 15,129
Registration........................... 2,001 2,588
Trustees' fees......................... 1,639 950
Miscellaneous.......................... 682 317
--------------- ---------------
Total expenses......................... 1,365,445 1,146,685
Less: expenses waived and reimbursed by
the Adviser (see Note B)............ (128,458) (63,521)
Less: expense offset arrangement
(see Note B)........................ (51) (48)
--------------- ---------------
Net expenses........................... 1,236,936 1,083,116
--------------- ---------------
Net investment income.................. 3,783,618 3,162,653
--------------- ---------------
Realized and Unrealized Gain (Loss)
on Investment Transactions
Net realized gain on:
Investment transactions............. 470,844 1,772,573
Futures contracts................... 62,506 8,400
Swap contracts...................... 11,463 8,812
Net change in unrealized
appreciation/depreciation of:
Investments......................... (1,001,560) (2,547,376)
Futures contracts................... 1,331 (38,022)
Swap contracts...................... (857) 64
--------------- ---------------
Net loss on investment transactions.... (456,273) (795,549)
--------------- ---------------
Net Increase in Net Assets
from Operations..................... $ 3,327,345 $ 2,367,104
=============== ===============
See notes to financial statements.
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 83
Statement of Operations
- --------------------------------------------------------------------------------
Virginia
---------------
Investment Income
Interest................................................ $ 4,266,217
---------------
Expenses
Advisory fee............................................ 359,212
Distribution fee -- Class A............................. 105,246
Distribution fee -- Class B............................. 309,280
Distribution fee -- Class C............................. 138,150
Custodian............................................... 66,829
Transfer agency......................................... 41,932
Administrative.......................................... 34,500
Audit................................................... 22,575
Legal................................................... 18,500
Printing................................................ 16,217
Registration............................................ 4,213
Trustees' fees.......................................... 1,183
Miscellaneous........................................... 1,320
Total expenses.......................................... ---------------
1,119,157
Less: expenses waived and reimbursed by the Adviser
(see Note B)......................................... (231,178)
Less: expense offset arrangement (see Note B)........... (38)
---------------
Net expenses............................................ 887,941
---------------
Net investment income................................... 3,378,276
---------------
Realized and Unrealized Gain (Loss) on Investment
Transactions
Net realized gain on:
Investment transactions.............................. 346,937
Futures contracts.................................... 71,996
Swap contracts....................................... 10,406
Net change in unrealized appreciation/depreciation of:
Investments.......................................... (640,903)
Futures contracts.................................... (193,080)
Swap contracts....................................... (1,133)
---------------
Net loss on investment transactions..................... (405,777)
---------------
Net Increase in Net Assets from Operations.............. $ 2,972,499
===============
See notes to financial statements.
- --------------------------------------------------------------------------------
84 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
Arizona
---------------------------------
Six Months
Ended Year Ended
March 31, 2005 September 30,
(unaudited) 2004
--------------- ---------------
Increase (Decrease) in Net Assets
from Operations
Net investment income.................. $ 3,755,058 $ 8,743,004
Net realized gain on
investment transactions............. 1,700,122 429,218
Net change in unrealized
appreciation/depreciation
of investments...................... (1,420,643) 2,392,535
--------------- ---------------
Net increase in net assets
from operations..................... 4,034,537 11,564,757
Dividends to Shareholders from
Net investment income
Class A............................. (2,011,698) (4,498,712)
Class B............................. (1,368,364) (3,339,827)
Class C............................ (381,525) (889,719)
Transactions in Shares of
Beneficial Interest
Net increase (decrease)................ 29,448 (32,967,788)
--------------- ---------------
Total increase (decrease).............. 302,398 (30,131,289)
Net Assets
Beginning of period.................... 185,957,207 216,088,496
--------------- ---------------
End of period (including distributions
in excess of net investment income
of $(242,315) and $(235,786),
respectively)....................... $ 186,259,605 $ 185,957,207
=============== ===============
See notes to financial statements.
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 85
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
Florida
---------------------------------
Six Months
Ended Year Ended
March 31, 2005 September 30,
(unaudited) 2004
--------------- ---------------
Increase (Decrease) in Net Assets
from Operations
Net investment income.................. $ 4,733,941 $ 10,547,656
Net realized gain on
investment transactions............. 1,066,114 738,776
Net change in unrealized
appreciation/depreciation
of investments...................... (1,960,396) 730,912
--------------- ---------------
Net increase in net assets
from operations..................... 3,839,659 12,017,344
Dividends to Shareholders from
Net investment income
Class A............................. (2,424,210) (5,007,559)
Class B............................. (1,488,707) (3,858,129)
Class C............................. (796,885) (1,765,473)
Transactions in Shares of
Beneficial Interest
Net decrease........................... (6,820,913) (42,766,066)
--------------- ---------------
Total decrease......................... (7,691,056) (41,379,883)
Net Assets
Beginning of period.................... 219,965,427 261,345,310
--------------- ---------------
End of period (including distributions
in excess of net investment income
of $(302,864) and $(327,003),
respectively)....................... $ 212,274,371 $ 219,965,427
=============== ===============
See notes to financial statements.
- --------------------------------------------------------------------------------
86 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
Massachusetts
---------------------------------
Six Months
Ended Year Ended
March 31, 2005 September 30,
(unaudited) 2004
--------------- ---------------
Increase (Decrease) in Net Assets
from Operations
Net investment income.................. $ 2,653,898 $ 6,327,232
Net realized gain on
investment transactions............. 894,021 757,299
Net change in unrealized
appreciation/depreciation
of investments...................... (1,591,204) 943,482
--------------- ---------------
Net increase in net assets
from operations..................... 1,956,715 8,028,013
Dividends to Shareholders from
Net investment income
Class A............................. (894,845) (1,934,023)
Class B............................. (1,144,629) (2,837,125)
Class C............................. (655,616) (1,599,200)
Transactions in Shares of
Beneficial Interest
Net decrease........................... (4,116,016) (29,743,076)
--------------- ---------------
Total decrease......................... (4,854,391) (28,085,411)
Net Assets
Beginning of period.................... 138,777,339 166,862,750
--------------- ---------------
End of period (including distributions
in excess of net investment income
of $(265,226) and $(224,034),
respectively)....................... $ 133,922,948 $ 138,777,339
=============== ===============
See notes to financial statements.
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 87
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
Michigan
---------------------------------
Six Months
Ended Year Ended
March 31, 2005 September 30,
(unaudited) 2004
--------------- ---------------
Increase (Decrease) in Net Assets
from Operations
Net investment income.................. $ 2,618,557 $ 5,969,577
Net realized gain (loss) on
investment transactions............ 899,160 (866,133)
Net change in unrealized
appreciation/depreciation
of investments...................... (1,065,484) 2,125,890
--------------- ---------------
Net increase in net assets
from operations..................... 2,452,233 7,229,334
Dividends to Shareholders from
Net investment income
Class A............................. (994,089) (2,100,652)
Class B............................. (833,711) (2,082,085)
Class C............................. (802,300) (1,882,103)
Transactions in Shares of
Beneficial Interest
Net increase (decrease)................ 105,012 (30,867,045)
--------------- ---------------
Total decrease......................... (72,855) (29,702,551)
Net Assets
Beginning of period.................... 136,349,128 166,051,679
--------------- ---------------
End of period (including distributions
in excess of net investment income
of $(259,460) and $(247,917),
respectively)....................... $ 136,276,273 $ 136,349,128
=============== ===============
See notes to financial statements.
- --------------------------------------------------------------------------------
88 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
Minnesota
---------------------------------
Six Months
Ended Year Ended
March 31, 2005 September 30,
(unaudited) 2004
--------------- ---------------
Increase (Decrease) in Net Assets
from Operations
Net investment income.................. $ 1,936,999 $ 4,296,944
Net realized gain (loss) on
investment transactions............. 71,241 (598,756)
Net change in unrealized
appreciation/depreciation
of investments...................... (190,524) 320,698
--------------- ---------------
Net increase in net assets
from operations..................... 1,817,716 4,018,886
Dividends to Shareholders from
Net investment income
Class A............................. (1,368,684) (2,911,067)
Class B............................. (282,925) (790,152)
Class C............................. (277,140) (667,428)
Transactions in Shares of
Beneficial Interest
Net increase (decrease)................ 850,318 (12,559,742)
--------------- ---------------
Total increase (decrease).............. 739,285 (12,909,503)
Net Assets
Beginning of period.................... 98,225,366 111,134,869
--------------- ---------------
End of period (including distributions
in excess of net investment income
of $(190,636) and $(198,886),
respectively)....................... $ 98,964,651 $ 98,225,366
=============== ===============
See notes to financial statements.
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 89
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
New Jersey
---------------------------------
Six Months
Ended Year Ended
March 31, 2005 September 30,
(unaudited) 2004
--------------- ---------------
Increase (Decrease) in Net Assets
from Operations
Net investment income.................. $ 3,702,848 $ 8,916,223
Net realized gain (loss) on
investment transactions............. 1,243,309 (695,568)
Net change in unrealized
appreciation/depreciation
of investments...................... (967,355) 1,384,341
--------------- ---------------
Net increase in net assets
from operations..................... 3,978,802 9,604,996
Dividends to Shareholders from
Net investment income
Class A............................. (1,642,375) (3,553,756)
Class B............................ (1,457,000) (3,818,735)
Class C............................. (678,376) (1,625,521)
Transactions in Shares of
Beneficial Interest
Net decrease........................... (14,948,304) (40,240,977)
--------------- ---------------
Total decrease......................... (14,747,253) (39,633,993)
Net Assets
Beginning of period.................... 197,925,062 237,559,055
--------------- ---------------
End of period (including distributions
in excess of net investment income
of $(483,853) and $(363,950),
respectively)....................... $ 183,177,809 $ 197,925,062
=============== ===============
See notes to financial statements.
- --------------------------------------------------------------------------------
90 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
Ohio
---------------------------------
Six Months
Ended Year Ended
March 31, 2005 September 30,
(unaudited) 2004
--------------- ---------------
Increase (Decrease) in Net Assets
from Operations
Net investment income.................. $ 3,783,618 $ 8,222,031
Net realized gain on investment
transactions........................ 544,813 1,078,821
Net change in unrealized
appreciation/depreciation
of investments...................... (1,001,086) (531,664)
--------------- ---------------
Net increase in net assets
from operations..................... 3,327,345 8,769,188
Dividends to Shareholders from
Net investment income
Class A............................. (1,690,189) (3,475,838)
Class B............................. (1,178,487) (2,917,779)
Class C............................. (839,732) (1,912,131)
Transactions in Shares of
Beneficial Interest
Net decrease........................... (5,248,572) (16,511,187)
--------------- ---------------
Total decrease......................... (5,629,635) (16,047,747)
Net Assets
Beginning of period.................... 196,537,818 212,585,565
--------------- ---------------
End of period (including distributions
in excess of net investment income
of $(162,626) and $(237,836),
respectively)....................... $ 190,908,183 $ 196,537,818
=============== ===============
See notes to financial statements.
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 91
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
Pennsylvania
---------------------------------
Six Months
Ended Year Ended
March 31, 2005 September 30,
(unaudited) 2004
--------------- ---------------
Increase (Decrease) in Net Assets
from Operations
Net investment income.................. $ 3,162,653 $ 7,537,811
Net realized gain on
investment transactions............. 1,789,785 3,344,671
Net change in unrealized
appreciation/depreciation
of investments...................... (2,585,334) (2,869,672)
--------------- ---------------
Net increase in net assets
from operations..................... 2,367,104 8,012,810
Dividends to Shareholders from
Net investment income
Class A............................. (1,560,159) (3,622,102)
Class B............................. (919,866) (2,424,676)
Class C............................. (619,502) (1,540,948)
Transactions in Shares of
Beneficial Interest
Net decrease........................... (8,131,378) (29,952,854)
--------------- ---------------
Total decrease......................... (8,863,801) (29,527,770)
Net Assets
Beginning of period.................... 165,851,612 195,379,382
--------------- ---------------
End of period (including distributions
in excess of net investment income
of $(155,316) and $(218,442),
respectively)....................... $ 156,987,811 $ 165,851,612
=============== ===============
See notes to financial statements.
- --------------------------------------------------------------------------------
92 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
Virginia
---------------------------------
Six Months
Ended Year Ended
March 31, 2005 September 30,
(unaudited) 2004
--------------- ---------------
Increase (Decrease) in Net Assets
from Operations
Net investment income.................. $ 3,378,276 $ 7,504,459
Net realized gain on investment
transactions........................ 429,339 998,876
Net change in unrealized
appreciation/depreciation
of investments...................... (835,116) (967,575)
--------------- ---------------
Net increase in net assets
from operations..................... 2,972,499 7,535,760
Dividends to Shareholders from
Net investment income
Class A............................. (1,617,606) (3,120,967)
Class B............................. (1,210,921) (3,017,851)
Class C............................. (542,210) (1,253,250)
Transactions in Shares of
Beneficial Interest
Net increase (decrease)................ 2,371,087 (29,022,339)
--------------- ---------------
Total increase (decrease).............. 1,972,849 (28,878,647)
Net Assets
Beginning of period.................... 158,720,598 187,599,245
--------------- ---------------
End of period (including undistributed
net investment income of $139,628
and $132,089, respectively)......... $ 160,693,447 $ 158,720,598
=============== ===============
See notes to financial statements.
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 93
Notes to Financial Statements
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
March 31, 2005 (unaudited)
NOTE A
Significant Accounting Policies
AllianceBernstein Municipal Income Fund II (the "Fund"), 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 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 the 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
- --------------------------------------------------------------------------------
94 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Notes to Financial Statements
- --------------------------------------------------------------------------------
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 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 "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 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.
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. 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 accrued and applied to net investment income, net realized
gains and net unrealized appreciation/depreciation as such income and/or gains
are earned.
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 95
Notes to Financial Statements
- --------------------------------------------------------------------------------
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.
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
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.
NOTE B
Advisory Fee and Other Transactions with Affiliates
Until September 6, 2004, under the terms of an investment advisory agreement,
the Fund paid the Adviser an advisory fee at an annual rate of .625% of each
Portfolio's average daily net assets. Effective September 7, 2004, the terms of
the investment advisory agreement were amended so that the advisory fee was
reduced to an 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 each Portfolio. Such fees are accrued daily and paid monthly. For the six
months ended March 31, 2005, 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, $183,964; Florida Portfolio, $198,904; Massachusetts
Port-
- --------------------------------------------------------------------------------
96 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Notes to Financial Statements
- --------------------------------------------------------------------------------
folio, $150,240; Michigan Portfolio, $9,358; Minnesota Portfolio, $68,673;
New Jersey Portfolio, $132,250; Ohio Portfolio, $128,458; Pennsylvania
Portfolio, $63,521; and Virginia Portfolio, $196,678.
Effective January 1, 2004 through September 6, 2004, in connection with the
Adviser's settlement with the New York Attorney General's office ("NYAG") the
Adviser began waiving a portion of its advisory fee so as to charge the Fund at
the reduced annual rate discussed above. For a more complete discussion of the
Adviser's settlement with the NYAG, please see "Legal Proceedings" below.
Effective June 16, 2004, the Adviser has agreed to waive its fees and bear
certain expenses to the extent necessary to limit the total portfolio operating
expenses on an annual basis as follows:
Effective June 16, 2004
------------------------------------
Portfolios Class A Class B Class C
- -----------------------------------------------------------------------------
Arizona 0.78% 1.48% 1.48%
Florida 0.78% 1.48% 1.48%
Massachusetts 0.82% 1.52% 1.52%
Michigan 1.01% 1.71% 1.71%
Minnesota 0.90% 1.60% 1.60%
New Jersey 0.87% 1.57% 1.57%
Ohio 0.85% 1.55% 1.55%
Pennsylvania 0.95% 1.65% 1.65%
Virginia 0.72% 1.42% 1.42%
Pursuant to the advisory agreement, the Arizona, Florida, Massachusetts, New
Jersey, Ohio and Pennsylvania Portfolios each paid $34,500 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, 2005. Additionally,
the Adviser voluntarily agreed to waive all such fees for the Michigan,
Minnesota and Virginia Portfolios in the aggregate amount of $34,500 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, $16,606; Florida
Portfolio, $18,348; Massachusetts Portfolio, $23,421; Michigan Portfolio,
$18,367; Minnesota Portfolio, $15,935; New Jersey Portfolio, $31,457; Ohio
Portfolio, $25,051; Pennsylvania Portfolio, $27,930; and Virginia Portfolio,
$19,031.
For the six months ended March 31, 2005, each Portfolio's expenses were reduced
under an expense offset arrangement with AGIS, as follows: Arizona Portfolio, by
$32; Florida Portfolio, by $42; Massachusetts Portfolio, by $47; Michigan
Portfolio, by $44; Minnesota Portfolio, by $31; New Jersey Portfolio,
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 97
Notes to Financial Statements
- --------------------------------------------------------------------------------
by $56; Ohio Portfolio, by $51; Pennsylvania Portfolio, by $48; and Virginia
Portfolio, by $38.
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, 2005 as follows:
Front End Contingent Deferred Sales Charges
Sales Charges -------------------------------------
Portfolio Class A Class A Class B Class C
- --------------------------------------------------------------------------
Arizona $ 16,302 $ 135 $ 16,472 $ 764
Florida 11,006 10 37,874 281
Massachusetts 2,452 -- 9,464 1,678
Michigan 9,471 5,209 22,372 1,197
Minnesota 4,137 -- 2,784 2,088
New Jersey 2,558 -- 28,906 5,768
Ohio 9,157 107 28,844 1,212
Pennsylvania 4,502 -- 13,703 1,328
Virginia 11,011 -- 16,599 35
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 each Portfolio's average daily
net assets attributable to Class A shares and 1% of each Portfolio's average
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................................. $ 4,391,264 $ 1,042,886
Florida................................. 4,502,643 2,528,399
Massachusetts........................... 3,987,363 2,516,106
Michigan................................ 3,580,513 3,174,999
Minnesota............................... 2,793,265 1,951,849
New Jersey.............................. 5,731,326 2,522,604
Ohio.................................... 5,017,319 2,734,872
Pennsylvania............................ 3,896,271 2,369,913
Virginia................................ 4,197,585 1,775,321
- --------------------------------------------------------------------------------
98 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Notes to Financial Statements
- --------------------------------------------------------------------------------
Such costs may be recovered from each Portfolio 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, 2005 were as
follows:
Portfolio Purchases Sales
- --------------------------------------------------------------------------
Arizona................................ $ 20,518,956 $ 31,113,737
Florida................................ 17,850,415 17,028,989
Massachusetts.......................... 20,711,679 19,054,063
Michigan............................... 2,421,992 12,740,402
Minnesota.............................. 6,209,248 7,130,750
New Jersey............................. 50,911,201 58,154,470
Ohio................................... 25,377,186 29,667,153
Pennsylvania........................... 32,273,494 39,435,023
Virginia............................... 23,352,624 17,012,371
There were no purchases or sales of U.S. government and government agency
obligations during the period.
At March 31, 2005, 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 Unrealized Gross Unrealized Net Unrealized
Portfolio Tax Cost Appreciation Depreciation Appreciation
- -------------------------------------------------------------------------------------
Arizona $ 179,281,240 $ 6,314,423 $ 269,133 $ 6,045,290
Florida 204,824,874 9,458,291 331,212 9,127,079
Massachusetts 130,795,951 7,154,996 331,313 6,823,683
Michigan 128,929,272 5,412,936 51,585 5,361,351
Minnesota 97,749,425 4,139,249 25,168 4,114,081
New Jersey 175,245,025 9,741,263 596,745 9,144,518
Ohio 190,200,079 7,074,396 398,537 6,675,859
Pennsylvania 149,656,140 6,347,916 518,332 5,829,584
Virginia 158,862,495 6,936,762 356,923 6,579,839
1. Interest Rate Swap Contracts
The Portfolios may enter into swap contracts 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
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 99
Notes to Financial Statements
- --------------------------------------------------------------------------------
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.
As of October 1, 2003, the Portfolios have adopted the method of accounting for
interim payments on swap contracts in accordance with Financial Accounting
Standards Board Statement No. 133. The Portfolios accrue for the interim
payments on swap contracts on a daily basis, with the net amount recorded within
unrealized appreciation/depreciation of swap contracts on the statement of
assets and liabilities. Once the interim payments are settled in cash, the net
amount is recorded as realized gain/loss on swaps, in addition to realized
gain/loss recorded upon the termination of swaps contracts on the statements of
operations. Prior to October 1, 2003, these interim payments were reflected
within interest income/expense in the statement of operations. Fluctuations in
the value of swap contracts are recorded as a component of net change in
unrealized appreciation/depreciation of investments.
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.
- --------------------------------------------------------------------------------
100 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Notes to Financial Statements
- --------------------------------------------------------------------------------
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 Ended Year Ended Six Months Ended Year Ended
March 31, 2005 September 30, March 31, 2005 September 30,
Arizona Portfolio (unaudited) 2004 (unaudited) 2004
- ----------------------------------------------------------------------------------------------------
Class A
Shares sold 1,557,547 1,816,955 $ 17,195,790 $ 19,654,453
- ----------------------------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 132,707 253,239 1,464,593 2,738,939
- ----------------------------------------------------------------------------------------------------
Shares converted
from Class B 243,273 242,630 2,676,214 2,628,449
- ----------------------------------------------------------------------------------------------------
Shares redeemed (1,377,194) (3,603,140) (15,200,238) (38,483,415)
- ----------------------------------------------------------------------------------------------------
Net increase
(decrease) 556,333 (1,290,316) $ 6,136,359 $ (13,461,574)
====================================================================================================
Class B
Shares sold 173,563 422,767 $ 1,914,899 $ 4,562,500
- ----------------------------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 95,131 183,091 1,048,502 1,975,490
- ----------------------------------------------------------------------------------------------------
Shares converted
to Class A (243,656) (243,001) (2,676,214) (2,628,449)
- ----------------------------------------------------------------------------------------------------
Shares redeemed (703,032) (1,698,740) (7,757,134) (18,255,043)
- ----------------------------------------------------------------------------------------------------
Net decrease (677,994) (1,335,883) $ (7,469,947) $ (14,345,502)
====================================================================================================
Class C
Shares sold 257,174 245,890 $ 2,836,683 $ 2,642,897
- ----------------------------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 20,599 46,972 227,035 506,454
- ----------------------------------------------------------------------------------------------------
Shares redeemed (154,186) (773,418) (1,700,682) (8,310,063)
- ----------------------------------------------------------------------------------------------------
Net increase
(decrease) 123,587 (480,556) $ 1,363,036 $ (5,160,712)
====================================================================================================
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 101
Notes to Financial Statements
- --------------------------------------------------------------------------------
---------------------------------- ----------------------------------
Shares Amount
---------------------------------- ----------------------------------
Six Months Ended Year Ended Six Months Ended Year Ended
March 31, 2005 September 30, March 31, 2005 September 30,
Florida Portfolio (unaudited) 2004 (unaudited) 2004
- ----------------------------------------------------------------------------------------------------
Class A
Shares sold 1,121,590 1,710,561 $ 11,563,037 $ 17,415,995
- ----------------------------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 130,931 251,493 1,346,000 2,560,987
- ----------------------------------------------------------------------------------------------------
Shares converted
from Class B 401,474 563,078 4,123,277 5,753,892
- ----------------------------------------------------------------------------------------------------
Shares redeemed (1,229,368) (3,384,839) (12,632,049) (34,394,909)
- ----------------------------------------------------------------------------------------------------
Net increase
(decrease) 424,627 (859,707) $ 4,400,265 $ (8,664,035)
====================================================================================================
Class B
Shares sold 211,543 584,033 $ 2,177,688 $ 5,967,037
- ----------------------------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 94,880 230,160 975,911 2,346,053
- ----------------------------------------------------------------------------------------------------
Shares converted
to Class A (401,224) (562,716) (4,123,277) (5,753,892)
- ----------------------------------------------------------------------------------------------------
Shares redeemed (1,065,566) (2,821,698) (10,953,300) (28,652,939)
- ----------------------------------------------------------------------------------------------------
Net decrease (1,160,367) (2,570,221) $ (11,922,978) $ (26,093,741)
====================================================================================================
Class C
Shares sold 297,373 454,345 $ 3,064,310 $ 4,623,863
- ----------------------------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 48,479 88,898 498,606 906,337
- ----------------------------------------------------------------------------------------------------
Shares redeemed (278,028) (1,332,473) (2,861,116) (13,538,490)
- ----------------------------------------------------------------------------------------------------
Net increase
(decrease) 67,824 (789,230) $ 701,800 $ (8,008,290)
====================================================================================================
- --------------------------------------------------------------------------------
102 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Notes to Financial Statements
- --------------------------------------------------------------------------------
---------------------------------- ----------------------------------
Shares Amount
---------------------------------- ----------------------------------
Six Months Ended Year Ended Six Months Ended Year Ended
March 31, 2005 September 30, March 31, 2005 September 30,
Massachusetts Portfolio (unaudited) 2004 (unaudited) 2004
- ----------------------------------------------------------------------------------------------------
Class A
Shares sold 333,843 493,792 $ 3,658,028 $ 5,319,266
- ----------------------------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 55,816 119,908 611,588 1,294,866
- ----------------------------------------------------------------------------------------------------
Shares converted
from Class B 222,424 246,649 2,434,087 2,665,723
- ----------------------------------------------------------------------------------------------------
Shares redeemed (361,353) (1,516,546) (3,955,689) (16,318,133)
- ----------------------------------------------------------------------------------------------------
Net increase
(decrease) 250,730 (656,197) $ 2,748,014 $ (7,038,278)
====================================================================================================
Class B
Shares sold 195,970 592,959 $ 2,142,736 $ 6,408,781
- ----------------------------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 76,926 191,847 841,345 2,068,284
- ----------------------------------------------------------------------------------------------------
Shares converted
from Class A (222,816) (247,107) (2,434,087) (2,665,723)
- ----------------------------------------------------------------------------------------------------
Shares redeemed (561,645) (1,590,598) (6,139,809) (17,116,730)
- ----------------------------------------------------------------------------------------------------
Net decrease (511,565) (1,052,899) $ (5,589,815) $ (11,305,388)
====================================================================================================
Class C
Shares sold 192,583 229,325 $ 2,105,002 $ 2,465,081
- ----------------------------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 44,397 102,555 485,549 1,106,428
- ----------------------------------------------------------------------------------------------------
Shares redeemed (353,033) (1,389,337) (3,864,766) (14,970,919)
- ----------------------------------------------------------------------------------------------------
Net decrease (116,053) (1,057,457) $ (1,274,215) $ (11,399,410)
====================================================================================================
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 103
Notes to Financial Statements
- --------------------------------------------------------------------------------
---------------------------------- ----------------------------------
Shares Amount
---------------------------------- ----------------------------------
Six Months Ended Year Ended Six Months Ended Year Ended
March 31, 2005 September 30, March 31, 2005 September 30,
Michigan Portfolio (unaudited) 2004 (unaudited) 2004
- ----------------------------------------------------------------------------------------------------
Class A
Shares sold 512,239 685,970 $ 5,554,652 $ 7,322,243
- ----------------------------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 67,977 135,740 737,869 1,451,930
- ----------------------------------------------------------------------------------------------------
Shares converted
from Class B 79,943 159,363 865,140 1,703,482
- ----------------------------------------------------------------------------------------------------
Shares redeemed (491,704) (1,736,145) (5,343,087) (18,537,487)
- ----------------------------------------------------------------------------------------------------
Net increase
(decrease) 168,455 (755,072) $ 1,814,574 $ (8,059,832)
====================================================================================================
Class B
Shares sold 119,793 330,858 $ 1,297,219 $ 3,534,645
- ----------------------------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 59,410 138,828 643,620 1,483,681
- ----------------------------------------------------------------------------------------------------
Shares converted
to Class A (80,065) (159,616) (865,140) (1,703,482)
- ----------------------------------------------------------------------------------------------------
Shares redeemed (425,949) (1,327,858) (4,621,049) (14,127,851)
- ----------------------------------------------------------------------------------------------------
Net decrease (326,811) (1,017,788) $ (3,545,350) $ (10,813,007)
====================================================================================================
Class C
Shares sold 363,541 511,806 $ 3,941,859 $ 5,462,625
- ----------------------------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 61,289 134,326 664,013 1,435,404
- ----------------------------------------------------------------------------------------------------
Shares redeemed (256,106) (1,771,487) (2,770,084) (18,892,235)
- ----------------------------------------------------------------------------------------------------
Net increase
(decrease) 168,724 (1,125,355) $ 1,835,788 $ (11,994,206)
====================================================================================================
- --------------------------------------------------------------------------------
104 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Notes to Financial Statements
- --------------------------------------------------------------------------------
---------------------------------- ----------------------------------
Shares Amount
---------------------------------- ----------------------------------
Six Months Ended Year Ended Six Months Ended Year Ended
March 31, 2005 September 30, March 31, 2005 September 30,
Minnesota Portfolio (unaudited) 2004 (unaudited) 2004
- ----------------------------------------------------------------------------------------------------
Class A
Shares sold 532,392 835,101 $ 5,433,157 $ 8,472,492
- ----------------------------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 71,511 147,489 728,651 1,490,538
- ----------------------------------------------------------------------------------------------------
Shares converted
from Class B 41,933 273,039 425,753 2,768,139
- ----------------------------------------------------------------------------------------------------
Shares redeemed (412,652) (1,510,873) (4,217,143) (15,207,560)
- ----------------------------------------------------------------------------------------------------
Net increase
(decrease) 233,184 (255,244) $ 2,370,418 $ (2,476,391)
====================================================================================================
Class B
Shares sold 38,031 69,211 $ 386,735 $ 696,429
- ----------------------------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 19,296 47,422 196,514 479,462
- ----------------------------------------------------------------------------------------------------
Shares converted
to Class A (41,943) (273,093) (425,753) (2,768,139)
- ----------------------------------------------------------------------------------------------------
Shares redeemed (137,396) (569,696) (1,401,548) (5,709,020)
- ----------------------------------------------------------------------------------------------------
Net decrease (122,012) (726,156) $ (1,244,052) $ (7,301,268)
====================================================================================================
Class C
Shares sold 97,345 188,820 $ 992,008 $ 1,921,416
- ----------------------------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 19,537 43,222 199,193 436,976
- ----------------------------------------------------------------------------------------------------
Shares redeemed (143,818) (510,220) (1,467,249) (5,140,475)
- ----------------------------------------------------------------------------------------------------
Net decrease (26,936) (278,178) $ (276,048) $ (2,782,083)
====================================================================================================
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 105
Notes to Financial Statements
- --------------------------------------------------------------------------------
---------------------------------- ----------------------------------
Shares Amount
---------------------------------- ----------------------------------
Six Months Ended Year Ended Six Months Ended Year Ended
March 31, 2005 September 30, March 31, 2005 September 30,
New Jersey Portfolio (unaudited) 2004 (unaudited) 2004
- ----------------------------------------------------------------------------------------------------
Class A
Shares sold 277,135 853,157 $ 2,746,188 $ 8,224,363
- ----------------------------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 104,814 216,331 1,038,129 2,115,072
- ----------------------------------------------------------------------------------------------------
Shares converted
from Class B 300,490 409,676 2,971,113 4,000,360
- ----------------------------------------------------------------------------------------------------
Shares redeemed (920,217) (2,066,696) (9,118,045) (20,116,127)
- ----------------------------------------------------------------------------------------------------
Net decrease (237,778) (587,532) $ (2,362,615) $ (5,776,332)
====================================================================================================
Class B
Shares sold 160,954 697,740 $ 1,594,389 $ 6,850,735
- ----------------------------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 113,702 275,371 1,126,290 2,695,250
- ----------------------------------------------------------------------------------------------------
Shares converted
to Class A (300,363) (409,570) (2,971,113) (4,000,360)
- ----------------------------------------------------------------------------------------------------
Shares redeemed (1,064,435) (3,296,698) (10,539,793) (32,204,881)
- ----------------------------------------------------------------------------------------------------
Net decrease (1,090,142) (2,733,157) $ (10,790,227) $ (26,659,256)
====================================================================================================
Class C
Shares sold 116,069 417,412 $ 1,150,205 $ 4,097,945
- ----------------------------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 50,634 122,163 501,848 1,195,852
- ----------------------------------------------------------------------------------------------------
Shares redeemed (348,267) (1,340,581) (3,447,515) (13,099,186)
- ----------------------------------------------------------------------------------------------------
Net decrease (181,564) (801,006) $ (1,795,462) $ (7,805,389)
====================================================================================================
- --------------------------------------------------------------------------------
106 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Notes to Financial Statements
- --------------------------------------------------------------------------------
---------------------------------- ----------------------------------
Shares Amount
---------------------------------- ----------------------------------
Six Months Ended Year Ended Six Months Ended Year Ended
March 31, 2005 September 30, March 31, 2005 September 30,
Ohio Portfolio (unaudited) 2004 (unaudited) 2004
- ----------------------------------------------------------------------------------------------------
Class A
Shares sold 725,962 1,886,009 $ 7,368,778 $ 19,017,967
- ----------------------------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 127,517 220,493 1,295,255 2,210,176
- ----------------------------------------------------------------------------------------------------
Shares converted
from Class B 247,128 388,061 2,507,498 3,893,738
- ----------------------------------------------------------------------------------------------------
Shares redeemed (841,479) (2,223,776) (8,568,494) (22,211,418)
- ----------------------------------------------------------------------------------------------------
Net increase 259,128 270,787 $ 2,603,037 $ 2,910,463
====================================================================================================
Class B
Shares sold 192,633 662,437 $ 1,952,714 $ 6,647,136
- ----------------------------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 92,278 199,607 936,344 2,004,218
- ----------------------------------------------------------------------------------------------------
Shares converted
to Class A (247,268) (388,345) (2,507,498) (3,893,738)
- ----------------------------------------------------------------------------------------------------
Shares redeemed (683,378) (1,829,708) (6,936,557) (18,259,873)
- ----------------------------------------------------------------------------------------------------
Net decrease (645,735) (1,356,009) $ (6,554,997) $ (13,502,257)
====================================================================================================
Class C
Shares sold 343,030 796,592 $ 3,487,711 $ 8,009,879
- ----------------------------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 58,255 129,208 591,529 1,295,135
- ----------------------------------------------------------------------------------------------------
Shares redeemed (530,868) (1,527,990) (5,375,852) (15,224,407)
- ----------------------------------------------------------------------------------------------------
Net decrease (129,583) (602,190) $ (1,296,612) $ (5,919,393)
====================================================================================================
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 107
Notes to Financial Statements
- --------------------------------------------------------------------------------
---------------------------------- ----------------------------------
Shares Amount
---------------------------------- ----------------------------------
Six Months Ended Year Ended Six Months Ended Year Ended
March 31, 2005 September 30, March 31, 2005 September 30,
Pennsylvania Portfolio (unaudited) 2004 (unaudited) 2004
- ----------------------------------------------------------------------------------------------------
Class A
Shares sold 344,709 677,551 $ 3,628,328 $ 7,100,907
- ----------------------------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 109,146 217,766 1,148,747 2,274,994
- ----------------------------------------------------------------------------------------------------
Shares converted
from Class B 257,546 402,276 2,705,565 4,196,909
- ----------------------------------------------------------------------------------------------------
Shares redeemed (674,666) (2,275,049) (7,093,292) (23,664,109)
- ----------------------------------------------------------------------------------------------------
Net increase
(decrease) 36,735 (977,456) $ 389,348 $ (10,091,299)
====================================================================================================
Class B
Shares sold 143,980 454,948 $ 1,516,018 $ 4,771,620
- ----------------------------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 57,537 161,398 606,102 1,686,496
- ----------------------------------------------------------------------------------------------------
Shares converted
to Class A (257,469) (402,276) (2,705,565) (4,196,909)
- ----------------------------------------------------------------------------------------------------
Shares redeemed (543,634) (1,466,692) (5,721,456) (15,284,200)
- ----------------------------------------------------------------------------------------------------
Net decrease (599,586) (1,252,622) $ (6,304,901) $ (13,022,993)
====================================================================================================
Class C
Shares sold 128,640 416,703 $ 1,351,530 $ 4,360,442
- ----------------------------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 34,249 99,105 360,794 1,036,103
- ----------------------------------------------------------------------------------------------------
Shares redeemed (373,801) (1,176,051) (3,928,149) (12,235,107)
- ----------------------------------------------------------------------------------------------------
Net decrease (210,912) (660,243) $ (2,215,825) $ (6,838,562)
====================================================================================================
- --------------------------------------------------------------------------------
108 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Notes to Financial Statements
- --------------------------------------------------------------------------------
---------------------------------- ----------------------------------
Shares Amount
---------------------------------- ----------------------------------
Six Months Ended Year Ended Six Months Ended Year Ended
March 31, 2005 September 30, March 31, 2005 September 30,
Virginia Portfolio (unaudited) 2004 (unaudited) 2004
- ----------------------------------------------------------------------------------------------------
Class A
Shares sold 999,466 721,090 $ 10,801,692 $ 7,741,295
- ----------------------------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 103,413 172,805 1,117,560 1,853,259
- ----------------------------------------------------------------------------------------------------
Shares converted
from Class B 465,371 346,135 5,017,019 3,702,656
- ----------------------------------------------------------------------------------------------------
Shares redeemed (358,675) (1,945,886) (3,870,202) (20,929,706)
- ----------------------------------------------------------------------------------------------------
Net increase
(decrease) 1,209,575 (705,856) $ 13,066,069 $ (7,632,496)
====================================================================================================
Class B
Shares sold 149,528 332,963 $ 1,612,777 $ 3,563,832
- ----------------------------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 91,697 208,167 989,041 2,229,060
- ----------------------------------------------------------------------------------------------------
Shares converted
to Class A (466,236) (346,793) (5,017,019) (3,702,656)
- ----------------------------------------------------------------------------------------------------
Shares redeemed (606,280) (1,747,995) (6,541,460) (18,646,618)
- ----------------------------------------------------------------------------------------------------
Net decrease (831,291) (1,553,658) $ (8,956,661) $ (16,556,382)
====================================================================================================
Class C
Shares sold 174,168 279,406 $ 1,875,422 $ 2,993,497
- ----------------------------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 43,157 84,969 465,143 909,079
- ----------------------------------------------------------------------------------------------------
Shares redeemed (379,206) (818,991) (4,078,886) (8,736,037)
- ----------------------------------------------------------------------------------------------------
Net decrease (161,881) (454,616) $ (1,738,321) $ (4,833,461)
====================================================================================================
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, 2005.
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 109
Notes to Financial Statements
- --------------------------------------------------------------------------------
NOTE G
Distributions To Shareholders
The tax character of distributions to be paid for the year ending September 30,
2005 will be determined at the end of the current fiscal year. The tax character
of distributions paid during the fiscal years ended September 30, 2004 and
September 30, 2003 were as follows:
Arizona Portfolio 2004 2003
-------------- ---------------
Distributions paid from:
Tax-exempt income.................. $ 8,726,911 $ 9,824,490
Ordinary income.................... 1,347 45,555
-------------- ---------------
Total distributions paid.............. $ 8,728,258 $ 9,870,045
============== ===============
As of September 30, 2004, the components of accumulated earnings/(deficit) on a
tax basis were as follows:
Undistributed tax exempt income........................ $ 213,333
Accumulated capital and other losses................... (2,779,802)(a)
Unrealized appreciation/(depreciation)................. 7,473,089(b)
---------------
Total accumulated earnings/(deficit)................... $ 4,906,620
===============
(a) On September 30, 2004, the Portfolio had a net capital loss carryforward
for federal income tax purposes of $2,779,802 of which $2,308,669 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. During the current
fiscal year capital loss carryforward of $52,709 was utilized.
(b) 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 difference between the book and tax
treatment of swap income.
- --------------------------------------------------------------------------------
110 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Notes to Financial Statements
- --------------------------------------------------------------------------------
Florida Portfolio 2004 2003
-------------- ---------------
Distributions paid from:
Tax-exempt income.................. $ 10,571,299 $ 12,070,402
Ordinary income.................... 59,862 623,345
-------------- ---------------
Total distributions paid.............. $ 10,631,161 $ 12,693,747
============== ===============
As of September 30, 2004, the components of accumulated earnings/(deficit) on a
tax basis were as follows:
Undistributed tax exempt income........................ $ 187,255
Accumulated capital and other losses................... (10,147,954)(a)
Unrealized appreciation/(depreciation)................. 10,878,368(b)
---------------
Total accumulated earnings/(deficit)................... $ 917,669
===============
(a) On September 30, 2004, the Portfolio had a net capital loss carryforward
for federal income tax purposes of $10,147,954 of which $6,668,049 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, 2004, the Portfolio utilized capital loss
carryforwards of $794,531.
(b) 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, and the difference between
the book and tax treatment of swap income.
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 111
Notes to Financial Statements
- --------------------------------------------------------------------------------
Massachusetts Portfolio 2004 2003
-------------- ---------------
Distributions paid from:
Tax-exempt income.................. $ 6,350,688 $ 7,469,629
Ordinary income.................... 19,660 295,469
-------------- ---------------
Total distributions paid.............. $ 6,370,348 $ 7,765,098
============== ===============
As of September 30, 2004, the components of accumulated earnings/(deficit) on a
tax basis were as follows:
Undistributed tax exempt income........................ $ 36,068
Accumulated capital and other losses................... (10,977,921)(a)
Unrealized appreciation/(depreciation)................. 8,157,792(b)
---------------
Total accumulated earnings/(deficit)................... $ (2,784,061)
===============
(a) On September 30, 2004, the Portfolio had a net capital loss carryforward
for federal income tax purposes of $10,977,921 of which $7,199,593 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. During the
fiscal year ended September 30, 2004, the Fund utilized capital loss
carryforwards of $48,724.
(b) 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, and the difference between
the book and tax treatment of swap income.
- --------------------------------------------------------------------------------
112 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Notes to Financial Statements
- --------------------------------------------------------------------------------
Michigan Portfolio 2004 2003
-------------- ---------------
Distributions paid from:
Tax-exempt income.................. $ 6,024,571 $ 6,797,816
Ordinary income.................... 40,269 548,644
-------------- ---------------
Total distributions paid.............. $ 6,064,840 $ 7,346,460
============== ===============
As of September 30, 2004, the components of accumulated earnings/(deficit) on a
tax basis were as follows:
Accumulated capital and other losses................... $ (1,203,046)(a)
Unrealized appreciation/(depreciation)................. 6,399,393(b)
---------------
Total accumulated earnings/(deficit)................... $ 5,196,347
===============
(a) On September 30, 2004, the Portfolio had a net capital loss carryforward
for federal income tax purposes of $668,763, of which $184,017 expires in
the year 2008 and $484,746 expires in the year 2012. 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,
2004, the Portfolio deferred to October 1, 2004 post October capital
losses of $524,283.
(b) 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, and the difference between
the book and tax treatment of swap income.
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 113
Notes to Financial Statements
- --------------------------------------------------------------------------------
Minnesota Portfolio 2004 2003
-------------- ---------------
Distributions paid from:
Tax-exempt income.................. $ 4,361,565 $ 4,505,786
Ordinary income.................... 7,082 210,091
-------------- ---------------
Total distributions paid.............. $ 4,368,647 $ 4,715,877
============== ===============
As of September 30, 2004, the components of accumulated earnings/(deficit) on a
tax basis were as follows:
Undistributed tax exempt income........................ $ 44,536
Accumulated capital and other losses................... (2,078,963)(a)
Unrealized appreciation/(depreciation)................. 4,252,036(b)
---------------
Total accumulated earnings/(deficit)................... $ 2,217,609
===============
(a) On September 30, 2004, the Portfolio had a net capital loss carryforward
for federal income tax purposes of $1,580,704 of which $1,051,696 expires
in the year 2008, $160,146 expires in the year 2009, $46,432 expires in
the year 2010, $179,795 expires in the year 2011 and $142,635 expires in
the year 2012. 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, 2004, $492,981 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,
2004, the Portfolio deferred to October 1, 2004 past October capital
losses of $498,259.
(b) The difference between book-basis and tax-basis unrealized
appreciation/(depreciation) is attributable primarily to the tax deferral
of losses on wash sales, and the difference between the book and tax
treatment of swap income.
- --------------------------------------------------------------------------------
114 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Notes to Financial Statements
- --------------------------------------------------------------------------------
New Jersey Portfolio 2004 2003
-------------- ---------------
Distributions paid from:
Tax-exempt income.................. $ 8,996,884 $ 10,317,045
Ordinary income.................... 1,128 530,987
-------------- ---------------
Total distributions paid.............. $ 8,998,012 $ 10,848,032
============== ===============
As of September 30, 2004, the components of accumulated earnings/(deficit) on a
tax basis were as follows:
Undistributed tax exempt income........................ $ 28,510
Accumulated capital and other losses................... (15,769,533)(a)
Unrealized appreciation/(depreciation)................. 10,241,622(b)
---------------
Total accumulated earnings/(deficit)................... $ (5,499,401)
===============
(a) On September 30, 2004, the Portfolio had a net capital loss carryforward
for federal income tax purposes of $15,075,320 of which $3,327,295 expires
in the year 2008, $1,077,263 expires in the year 2009, $4,688,584 expires
in the year 2010, $5,617,272 expires in the year 2011 and $364,906 expires
in the year 2012. 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, 2004, $394,704 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,
2004, the Portfolio deferred to October 1, 2004 post October capital
losses of $694,213.
(b) 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, and the difference between
book and the treatment of swap income.
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 115
Notes to Financial Statements
- --------------------------------------------------------------------------------
Ohio Portfolio 2004 2003
-------------- ---------------
Distributions paid from:
Tax-exempt income.................. $ 8,184,647 $ 8,483,968
Ordinary income.................... 121,101 485,719
-------------- ---------------
Total distributions paid.............. $ 8,305,748 $ 8,969,687
============== ===============
As of September 30, 2004, the components of accumulated earnings/(deficit) on a
tax basis were as follows:
Undistributed tax exempt income........................ $ 96,117
Accumulated capital and other losses................... (7,788,348)(a)
Unrealized appreciation/(depreciation)................. 7,670,177(b)
---------------
Total accumulated earnings/(deficit)................... $ (22,054)
===============
(a) On September 30, 2004, the Portfolio had a net capital loss carryforward
for federal income tax purposes of $7,788,348 of which $2,491,530 expires
in the year 2008, $1,639,021 expires in the year 2009, $3,620,192 expires
in the year 2011 and $37,605 expires in the year 2012. 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, 2004,
$332,000 of capital loss carryforward expired.
(b) The differences between book-basis and tax-basis unrealized
appreciation/(depreciation) are attributable primarily to the tax deferral
of losses on wash sales , the realization for tax purposes of gains/losses
on certain derivative instruments, and the difference between book and tax
treatment of swap income.
- --------------------------------------------------------------------------------
116 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Notes to Financial Statements
- --------------------------------------------------------------------------------
Pennsylvania Portfolio 2004 2003
-------------- ---------------
Distributions paid from:
Tax-exempt income.................. $ 7,539,043 $ 9,195,254
Ordinary income.................... 48,683 77,465
-------------- ---------------
Total distributions paid.............. $ 7,587,726 $ 9,272,719
============== ===============
As of September 30, 2004, the components of accumulated earnings/(deficit) on a
tax basis were as follows:
Undistributed Tax Exempt Income........................ $ 75,454
Accumulated capital and other losses................... (4,503,043)(a)
Unrealized appreciation/(depreciation)................. 8,334,749(b)
---------------
Total accumulated earnings/(deficit)................... $ 3,907,160
===============
(a) On September 30, 2004, the Portfolio had a net capital loss carryforward
for federal income tax purposes of $4,503,043 of which $3,782,511 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. During the current
fiscal year capital loss carryforward of $2,780,859 was utilized.
(b) The difference between book-basis and tax-basis unrealized
appreciation/(depreciation)are attributable primarily to the tax deferral
of losses on wash sales, and the difference between book and tax treatment
of swaps income.
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 117
Notes to Financial Statements
- --------------------------------------------------------------------------------
Virginia Portfolio 2004 2003
-------------- ---------------
Distributions paid from:
Tax-exempt income.................. $ 7,342,740 $ 8,410,172
Ordinary income.................... 49,328 39,132
-------------- ---------------
Total distributions paid.............. $ 7,392,068 $ 8,449,304
============== ===============
As of September 30, 2004, the components of accumulated earnings/(deficit) on a
tax basis were as follows:
Undistributed tax-exempt income........................ $ 451,346
Accumulated capital and other losses................... (3,560,218)(a)
Unrealized appreciation/(depreciation)................. 6,945,503(b)
---------------
Total accumulated earnings/(deficit)................... $ 3,836,631
===============
(a) On September 30, 2004, the Portfolio had a net capital loss carryforward
for federal income tax purposes of $3,560,218 of which $1,566,442 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, 2004, the Portfolio utilized capital loss
carryforwards of $1,126,936.
(b) The differences between book-basis and tax-basis unrealized
appreciation/(depreciation) are attributable primarily to the tax deferral
of losses on wash sales the realization for tax purposes of gains/losses
on certain derivative instruments, and the difference between book and tax
treatment of swaps income.
NOTE H
Risks Involved in Investing in the Fund
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.
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 persuant to these contracts and expects the risk of loss
thereunder to be remote.
NOTE I
Legal Proceedings
As has been previously reported, 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
the
- --------------------------------------------------------------------------------
118 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Notes to Financial Statements
- --------------------------------------------------------------------------------
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
Assurrance 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 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; 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.
In anticipation of final, definitive documentation of the NYAG Order and
effective January 1, 2004, the Adviser began waiving a portion of its advisory
fee. On September 7, 2004, the Fund's investment advisory agreement was amended
to reflect the reduced advisory fee. For more information on this waiver and
amendment to the Fund's investment advisory agreement, please see "Advisory Fee
and Other Transactions with Affiliates" above.
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.
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 119
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 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
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.
- --------------------------------------------------------------------------------
120 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Notes to Financial Statements
- --------------------------------------------------------------------------------
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 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.
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 121
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,
2005 ---------------------------------------------------------------------------
(unaudited) 2004(a) 2003 2002 2001 2000
------------------------------------------------------------------------------------------------
Net asset value,
beginning of period ........ $ 10.95 $ 10.76 $ 11.02 $ 10.80 $ 10.47 $ 10.40
------------------------------------------------------------------------------------------------
Income From Investment
Operations
Net investment income(b)(c) ... .24 .51 .51 .51 .54 .55
Net realized and unrealized
gain (loss) on investment
transactions ............... .02 .19 (.26) .26 .34 .07
------------------------------------------------------------------------------------------------
Net increase in net asset value
from operations ............ .26 .70 .25 .77 .88 .62
------------------------------------------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income .......... (.24) (.51) (.51) (.51) (.54) (.55)
Distributions in excess of
net investment income ...... -0- -0- -0- (.04) (.01) -0-
------------------------------------------------------------------------------------------------
Total dividends and
distributions .............. (.24) (.51) (.51) (.55) (.55) (.55)
------------------------------------------------------------------------------------------------
Net asset value, end of period $ 10.97 $ 10.95 $ 10.76 $ 11.02 $ 10.80 $ 10.47
================================================================================================
Total Return
Total investment return based
on net asset value(d) ...... 2.37% 6.64% 2.35% 7.33% 8.56% 6.17%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) ............ $ 94,936 $ 88,701 $ 101,040 $ 121,245 $ 88,261 $ 47,258
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements ........... .78%(e) .78% .78% .78% .78% .78%
Expenses, before waivers/
reimbursements ........... .97%(e) 1.13% 1.11% 1.12% 1.22% 1.29%
Net investment income,
net of waivers/
reimbursements ........... 4.33%(e) 4.69% 4.72% 4.73% 5.08% 5.33%
Portfolio turnover rate ....... 11% 28% 28% 11% 119% 199%
See footnote summary on page 149.
- --------------------------------------------------------------------------------
122 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Financial Highlights
- --------------------------------------------------------------------------------
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Arizona Portfolio
------------------------------------------------------------------------------------------------
Class B
------------------------------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2005 ---------------------------------------------------------------------------
(unaudited) 2004(a) 2003 2002 2001 2000
------------------------------------------------------------------------------------------------
Net asset value,
beginning of period ........ $ 10.94 $ 10.74 $ 11.00 $ 10.78 $ 10.46 $ 10.39
------------------------------------------------------------------------------------------------
Income From Investment
Operations
Net investment income(b)(c) ... .20 .43 .43 .43 .47 .48
Net realized and unrealized
gain (loss) on investment
transactions ............... .01 .20 (.26) .27 .33 .07
------------------------------------------------------------------------------------------------
Net increase in net asset value
from operations ............ .21 .63 .17 .70 .80 .55
------------------------------------------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income .......... (.20) (.43) (.43) (.43) (.47) (.48)
Distributions in excess of
net investment income ...... -0- -0- -0- (.05) (.01) -0-
------------------------------------------------------------------------------------------------
Total dividends and
distributions .............. (.20) (.43) (.43) (.48) (.48) (.48)
------------------------------------------------------------------------------------------------
Net asset value, end of period $ 10.95 $ 10.94 $ 10.74 $ 11.00 $ 10.78 $ 10.46
================================================================================================
Total Return
Total investment return based
on net asset value(d) ...... 1.93% 5.98% 1.62% 6.65% 7.76% 5.45%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) ............ $ 69,637 $ 76,951 $ 89,938 $ 92,349 $ 56,024 $ 34,232
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements ........... 1.48%(e) 1.48% 1.48% 1.48% 1.48% 1.48%
Expenses, before waivers/
reimbursements ........... 1.68%(e) 1.84% 1.82% 1.82% 1.93% 1.99%
Net investment income,
net of waivers/
reimbursements ........... 3.64%(e) 4.00% 4.03% 4.02% 4.41% 4.63%
Portfolio turnover rate ....... 11% 28% 28% 11% 119% 199%
See footnote summary on page 149.
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 123
Financial Highlights
- --------------------------------------------------------------------------------
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Arizona Portfolio
------------------------------------------------------------------------------------------------
Class C
------------------------------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2005 ---------------------------------------------------------------------------
(unaudited) 2004(a) 2003 2002 2001 2000
------------------------------------------------------------------------------------------------
Net asset value,
beginning of period ........ $ 10.94 $ 10.74 $ 11.00 $ 10.78 $ 10.46 $ 10.39
------------------------------------------------------------------------------------------------
Income From Investment
Operations
Net investment income(b)(c) ... .20 .43 .43 .43 .47 .48
Net realized and unrealized
gain (loss) on investment
transactions ............... .01 .20 (.26) .27 .33 .07
------------------------------------------------------------------------------------------------
Net increase in net asset value
from operations ............ .21 .63 .17 .70 .80 .55
------------------------------------------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income .......... (.20) (.43) (.43) (.43) (.47) (.48)
Distributions in excess of
net investment income ...... -0- -0- -0- (.05) (.01) -0-
------------------------------------------------------------------------------------------------
Total dividends and
distributions .............. (.20) (.43) (.43) (.48) (.48) (.48)
------------------------------------------------------------------------------------------------
Net asset value, end of period $ 10.95 $ 10.94 $ 10.74 $ 11.00 $ 10.78 $ 10.46
================================================================================================
Total Return
Total investment return based
on net asset value(d) ...... 1.93% 5.98% 1.62% 6.65% 7.76% 5.45%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) ............ $ 21,687 $ 20,305 $ 25,110 $ 24,258 $ 13,407 $ 8,941
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements ........... 1.48%(e) 1.48% 1.48% 1.48% 1.48% 1.48%
Expenses, before waivers/
reimbursements ........... 1.68%(e) 1.84% 1.82% 1.82% 1.93% 1.99%
Net investment income,
net of waivers/
reimbursements ........... 3.64%(e) 4.00% 4.03% 4.00% 4.43% 4.64%
Portfolio turnover rate ....... 11% 28% 28% 11% 119% 199%
See footnote summary on page 149.
- --------------------------------------------------------------------------------
124 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Financial Highlights
- --------------------------------------------------------------------------------
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Florida Portfolio
------------------------------------------------------------------------------------------------
Class A
------------------------------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2005 ---------------------------------------------------------------------------
(unaudited) 2004(a) 2003 2002 2001 2000
------------------------------------------------------------------------------------------------
Net asset value,
beginning of period ........ $ 10.25 $ 10.17 $ 10.34 $ 10.16 $ 9.76 $ 9.81
------------------------------------------------------------------------------------------------
Income From Investment
Operations
Net investment income(b)(c) ... .24 .49 .49 .52 .53 .53
Net realized and unrealized
gain (loss) on investment
transactions ............... (.04) .08 (.13) .19 .40 (.05)
------------------------------------------------------------------------------------------------
Net increase in net asset value
from operations ............ .20 .57 .36 .71 .93 .48
------------------------------------------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income .......... (.24) (.49) (.53) (.52) (.53) (.53)
Distributions in excess of
net investment income ...... -0- -0- -0- (.01) -0- -0-
------------------------------------------------------------------------------------------------
Total dividends and
distributions .............. (.24) (.49) (.53) (.53) (.53) (.53)
------------------------------------------------------------------------------------------------
Net asset value, end of period $ 10.21 $ 10.25 $ 10.17 $ 10.34 $ 10.16 $ 9.76
================================================================================================
Total Return
Total investment return based
on net asset value(d) ...... 1.98% 5.78% 3.54% 7.21% 9.71% 5.10%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) ............ $ 105,470 $ 101,529 $ 109,543 $ 109,373 $ 97,714 $ 75,422
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements ........... .78%(e) .78% .78% .78% .78% .73%
Expenses, before waivers/
reimbursements ........... .96%(e) 1.10% 1.11% 1.09% 1.13% 1.14%
Net investment income,
net of waivers/
reimbursements ........... 4.76%(e) 4.83% 4.80% 5.18% 5.33% 5.52%
Portfolio turnover rate ....... 8% 22% 30% 20% 70% 281%
See footnote summary on page 149.
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 125
Financial Highlights
- --------------------------------------------------------------------------------
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Florida Portfolio
------------------------------------------------------------------------------------------------
Class B
------------------------------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2005 ---------------------------------------------------------------------------
(unaudited) 2004(a) 2003 2002 2001 2000
------------------------------------------------------------------------------------------------
Net asset value,
beginning of period ........ $ 10.26 $ 10.18 $ 10.35 $ 10.17 $ 9.77 $ 9.81
------------------------------------------------------------------------------------------------
Income From Investment
Operations
Net investment income(b)(c) ... .21 .42 .42 .45 .46 .46
Net realized and unrealized
gain (loss) on investment
transactions ............... (.05) .08 (.14) .18 .39 (.05)
------------------------------------------------------------------------------------------------
Net increase in net asset value
from operations ............ .16 .50 .28 .63 .85 .41
------------------------------------------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income .......... (.21) (.42) (.45) (.45) (.45) (.45)
------------------------------------------------------------------------------------------------
Total dividends and
distributions .............. (.21) (.42) (.45) (.45) (.45) (.45)
------------------------------------------------------------------------------------------------
Net asset value, end of period $ 10.21 $ 10.26 $ 10.18 $ 10.35 $ 10.17 $ 9.77
================================================================================================
Total Return
Total investment return based
on net asset value(d) ...... 1.53% 4.96% 2.82% 6.45% 8.92% 4.43%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) ............ $ 67,097 $ 79,266 $ 104,874 $ 105,583 $ 87,603 $ 65,391
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements ........... 1.48%(e) 1.48% 1.48% 1.48% 1.48% 1.43%
Expenses, before waivers/
reimbursements ........... 1.67%(e) 1.81% 1.81% 1.79% 1.84% 1.85%
Net investment income,
net of waivers/
reimbursements ........... 4.05%(e) 4.12% 4.09% 4.47% 4.62% 4.82%
Portfolio turnover rate ....... 8% 22% 30% 20% 70% 281%
See footnote summary on page 149.
- --------------------------------------------------------------------------------
126 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Financial Highlights
- --------------------------------------------------------------------------------
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Florida Portfolio
------------------------------------------------------------------------------------------------
Class C
------------------------------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2005 ---------------------------------------------------------------------------
(unaudited) 2004(a) 2003 2002 2001 2000
------------------------------------------------------------------------------------------------
Net asset value,
beginning of period ........ $ 10.25 $ 10.18 $ 10.35 $ 10.17 $ 9.77 $ 9.81
------------------------------------------------------------------------------------------------
Income From Investment
Operations
Net investment income(b)(c) ... .21 .42 .42 .45 .46 .46
Net realized and unrealized
gain (loss) on investment
transactions ............... (.04) .07 (.14) .18 .39 (.05)
------------------------------------------------------------------------------------------------
Net increase in net asset value
from operations ............ .17 .49 .28 .63 .85 .41
------------------------------------------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income .......... (.21) (.42) (.45) (.45) (.45) (.45)
------------------------------------------------------------------------------------------------
Total dividends and
distributions .............. (.21) (.42) (.45) (.45) (.45) (.45)
------------------------------------------------------------------------------------------------
Net asset value, end of period $ 10.21 $ 10.25 $ 10.18 $ 10.35 $ 10.17 $ 9.77
================================================================================================
Total Return
Total investment return based
on net asset value(d) ...... 1.63% 4.96% 2.82% 6.45% 8.93% 4.43%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) ............ $ 39,707 $ 39,170 $ 46,929 $ 49,102 $ 40,360 $ 38,464
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements ........... 1.48%(e) 1.48% 1.48% 1.48% 1.48% 1.43%
Expenses, before waivers/
reimbursements ........... 1.66%(e) 1.81% 1.81% 1.79% 1.83% 1.85%
Net investment income,
net of waivers/
reimbursements ........... 4.05%(e) 4.13% 4.09% 4.47% 4.64% 4.83%
Portfolio turnover rate ....... 8% 22% 30% 20% 70% 281%
See footnote summary on page 149.
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 127
Financial Highlights
- --------------------------------------------------------------------------------
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Massachusetts Portfolio
------------------------------------------------------------------------------------------------
Class A
------------------------------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2005 ---------------------------------------------------------------------------
(unaudited) 2004(a) 2003 2002 2001 2000
------------------------------------------------------------------------------------------------
Net asset value,
beginning of period ........ $ 10.92 $ 10.79 $ 11.06 $ 11.05 $ 10.59 $ 10.66
------------------------------------------------------------------------------------------------
Income From Investment
Operations
Net investment income(b)(c) ... .24 .51 .51 .54 .56 .58
Net realized and unrealized
gain (loss) on investment
transactions ............... (.06) .13 (.26) .04 .47 (.09)
------------------------------------------------------------------------------------------------
Net increase in net asset value
from operations ............ .18 .64 .25 .58 1.03 .49
------------------------------------------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income .......... (.24) (.51) (.52) (.54) (.56) (.56)
Distributions in excess of
net investment income ...... -0- -0- -0- (.03) (.01) -0-
------------------------------------------------------------------------------------------------
Total dividends and
distributions .............. (.24) (.51) (.52) (.57) (.57) (.56)
------------------------------------------------------------------------------------------------
Net asset value, end of period $ 10.86 $ 10.92 $ 10.79 $ 11.06 $ 11.05 $ 10.59
================================================================================================
Total Return
Total investment return based
on net asset value(d) ...... 1.67% 6.13% 2.39% 5.46% 9.92% 4.86%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) ............ $ 42,255 $ 39,749 $ 46,342 $ 66,197 $ 63,384 $ 45,418
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements ........... .82%(e) .82% .82% .82% .82% .77%
Expenses, before waivers/
reimbursements ........... 1.03%(e) 1.19% 1.17% 1.12% 1.19% 1.63%
Net investment income,
net of waivers/
reimbursements ........... 4.37%(e) 4.73% 4.71% 4.97% 5.20% 5.53%
Portfolio turnover rate ....... 14% 26% 28% 27% 108% 389%
See footnote summary on page 149.
- --------------------------------------------------------------------------------
128 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Financial Highlights
- --------------------------------------------------------------------------------
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Massachusetts Portfolio
------------------------------------------------------------------------------------------------
Class B
------------------------------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2005 ---------------------------------------------------------------------------
(unaudited) 2004(a) 2003 2002 2001 2000
------------------------------------------------------------------------------------------------
Net asset value,
beginning of period ........ $ 10.91 $ 10.77 $ 11.03 $ 11.03 $ 10.57 $ 10.65
------------------------------------------------------------------------------------------------
Income From Investment
Operations
Net investment income(b)(c) ... .20 .44 .44 .47 .49 .50
Net realized and unrealized
gain (loss) on investment
transactions ............... (.07) .14 (.25) .03 .47 (.09)
------------------------------------------------------------------------------------------------
Net increase in net asset value
from operations ............ .13 .58 .19 .50 .96 .41
------------------------------------------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income .......... (.20) (.44) (.45) (.47) (.49) (.49)
Distributions in excess of
net investment income ...... -0- -0- -0- (.03) (.01) -0-
------------------------------------------------------------------------------------------------
Total dividends and
distributions .............. (.20) (.44) (.45) (.50) (.50) (.49)
------------------------------------------------------------------------------------------------
Net asset value, end of period $ 10.84 $ 10.91 $ 10.77 $ 11.03 $ 11.03 $ 10.57
================================================================================================
Total Return
Total investment return based
on net asset value(d) ...... 1.23% 5.38% 1.76% 4.69% 9.22% 4.06%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) ............ $ 57,528 $ 63,430 $ 73,979 $ 79,216 $ 62,190 $ 39,964
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements ........... 1.52%(e) 1.52% 1.52% 1.52% 1.52% 1.47%
Expenses, before waivers/
reimbursements ........... 1.74%(e) 1.90% 1.89% 1.83% 1.90% 1.94%
Net investment income,
net of waivers/
reimbursements ........... 3.67%(e) 4.04% 4.02% 4.28% 4.53% 4.83%
Portfolio turnover rate ....... 14% 26% 28% 27% 108% 389%
See footnote summary on page 149.
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 129
Financial Highlights
- --------------------------------------------------------------------------------
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Massachusetts Portfolio
------------------------------------------------------------------------------------------------
Class C
------------------------------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2005 ---------------------------------------------------------------------------
(unaudited) 2004(a) 2003 2002 2001 2000
------------------------------------------------------------------------------------------------
Net asset value,
beginning of period ........ $ 10.91 $ 10.77 $ 11.03 $ 11.03 $ 10.57 $ 10.65
------------------------------------------------------------------------------------------------
Income From Investment
Operations
Net investment income(b)(c) ... .20 .44 .44 .47 .49 .50
Net realized and unrealized
gain (loss) on investment
transactions ............... (.07) .14 (.25) .03 .47 (.09)
------------------------------------------------------------------------------------------------
Net increase in net asset value
from operations ............ .13 .58 .19 .50 .96 .41
------------------------------------------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income .......... (.20) (.44) (.45) (.47) (.49) (.49)
Distributions in excess of
net investment income ...... -0- -0- -0- (.03) (.01) -0-
------------------------------------------------------------------------------------------------
Total dividends and
distributions .............. (.20) (.44) (.45) (.50) (.50) (.49)
------------------------------------------------------------------------------------------------
Net asset value, end of period $ 10.84 $ 10.91 $ 10.77 $ 11.03 $ 11.03 $ 10.57
================================================================================================
Total Return
Total investment return based
on net asset value(d) ...... 1.23% 5.38% 1.76% 4.69% 9.22% 4.06%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) ............ $ 34,140 $ 35,598 $ 46,542 $ 53,156 $ 44,688 $ 31,207
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements ........... 1.52%(e) 1.52% 1.52% 1.52% 1.52% 1.47%
Expenses, before waivers/
reimbursements ........... 1.74%(e) 1.89% 1.88% 1.82% 1.90% 1.93%
Net investment income,
net of waivers/
reimbursements ........... 3.67%(e) 4.04% 4.02% 4.28% 4.53% 4.83%
Portfolio turnover rate ....... 14% 26% 28% 27% 108% 389%
See footnote summary on page 149.
130 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Michigan Portfolio
------------------------------------------------------------------------------------------------
Class A
------------------------------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2005 ---------------------------------------------------------------------------
(unaudited) 2004(a) 2003 2002 2001 2000
------------------------------------------------------------------------------------------------
Net asset value,
beginning of period ........ $ 10.79 $ 10.69 $ 10.91 $ 10.63 $ 10.16 $ 10.06
------------------------------------------------------------------------------------------------
Income From Investment
Operations
Net investment income(b)(c) ... .23 .48 .47 .49 .52 .53
Net realized and unrealized
gain (loss) on investment
transactions ............... (.02) .11 (.17) .32 .48 .09
------------------------------------------------------------------------------------------------
Net increase in net asset
value from operations ...... .21 .59 .30 .81 1.00 .62
------------------------------------------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income .......... (.23) (.49) (.52) (.49) (.52) (.52)
Distributions in excess of
net investment income ...... -0- -0- -0- (.04) (.01) -0-
------------------------------------------------------------------------------------------------
Total dividends and
distributions .............. (.23) (.49) (.52) (.53) (.53) (.52)
------------------------------------------------------------------------------------------------
Net asset value, end of period $ 10.77 $ 10.79 $ 10.69 $ 10.91 $ 10.63 $ 10.16
================================================================================================
Total Return
Total investment return based
on net asset value(d) ...... 1.97% 5.65% 2.66% 7.87% 10.11% 6.39%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) ............ $ 47,115 $ 45,362 $ 53,022 $ 55,396 $ 32,804 $ 14,609
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements ........... 1.01%(e) 1.01% 1.01% 1.01% 1.01% .99%
Expenses, before waivers/
reimbursements ........... 1.07%(e) 1.20% 1.20% 1.21% 1.44% 1.63%
Net investment income,
net of waivers/
reimbursements ........... 4.29%(e) 4.51% 4.38% 4.57% 5.01% 5.30%
Portfolio turnover rate ....... 2% 18% 46% 18% 115% 287%
See footnote summary on page 149.
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 131
Financial Highlights
- --------------------------------------------------------------------------------
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Michigan Portfolio
------------------------------------------------------------------------------------------------
Class B
------------------------------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2005 ---------------------------------------------------------------------------
(unaudited) 2004(a) 2003 2002 2001 2000
------------------------------------------------------------------------------------------------
Net asset value,
beginning of period ........ $ 10.77 $ 10.67 $ 10.89 $ 10.62 $ 10.15 $ 10.05
------------------------------------------------------------------------------------------------
Income From Investment
Operations
Net investment income(b)(c) ... .19 .41 .40 .41 .45 .45
Net realized and unrealized
gain (loss) on investment
transactions ............... -0-(f) .10 (.18) .32 .48 .10
------------------------------------------------------------------------------------------------
Net increase in net asset value
from operations ............ .19 .51 .22 .73 .93 .55
------------------------------------------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income .......... (.20) (.41) (.44) (.41) (.45) (.45)
Distributions in excess of
net investment income ...... -0- -0- -0- (.05) (.01) -0-
------------------------------------------------------------------------------------------------
Total dividends and
distributions .............. (.20) (.41) (.44) (.46) (.46) (.45)
------------------------------------------------------------------------------------------------
Net asset value, end of period $ 10.76 $ 10.77 $ 10.67 $ 10.89 $ 10.62 $ 10.15
================================================================================================
Total Return
Total investment return based
on net asset value(d) ...... 1.72% 4.91% 1.95% 7.06% 9.39% 5.55%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) ............ $ 44,024 $ 47,605 $ 58,034 $ 53,097 $ 29,436 $ 14,943
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements ........... 1.71%(e) 1.71% 1.71% 1.71% 1.71% 1.69%
Expenses, before waivers/
reimbursements ........... 1.78%(e) 1.91% 1.92% 1.92% 2.16% 2.34%
Net investment income,
net of waivers/
reimbursements ........... 3.60%(e) 3.81% 3.69% 3.88% 4.34% 4.59%
Portfolio turnover rate ....... 2% 18% 46% 18% 115% 287%
See footnote summary on page 149.
- --------------------------------------------------------------------------------
132 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Financial Highlights
- --------------------------------------------------------------------------------
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Michigan Portfolio
------------------------------------------------------------------------------------------------
Class C
------------------------------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2005 ---------------------------------------------------------------------------
(unaudited) 2004(a) 2003 2002 2001 2000
------------------------------------------------------------------------------------------------
Net asset value,
beginning of period ........ $ 10.77 $ 10.67 $ 10.89 $ 10.62 $ 10.14 $ 10.05
------------------------------------------------------------------------------------------------
Income From Investment
Operations
Net investment income(b)(c) ... .19 .41 .40 .41 .45 .46
Net realized and unrealized
gain (loss) on investment
transactions ............... -0-(f) .10 (.18) .32 .49 .08
------------------------------------------------------------------------------------------------
Net increase in net asset value
from operations ............ .19 .51 .22 .73 .94 .54
------------------------------------------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income .......... (.20) (.41) (.44) (.41) (.45) (.45)
Distributions in excess of
net investment income ...... -0- -0- -0- (.05) (.01) -0-
------------------------------------------------------------------------------------------------
Total dividends and
distributions .............. (.20) (.41) (.44) (.46) (.46) (.45)
------------------------------------------------------------------------------------------------
Net asset value, end of period $ 10.76 $ 10.77 $ 10.67 $ 10.89 $ 10.62 $ 10.14
================================================================================================
Total Return
Total investment return based
on net asset value(d) ...... 1.72% 4.91% 1.95% 7.06% 9.50% 5.55%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) ............ $ 45,137 $ 43,382 $ 54,996 $ 57,818 $ 24,142 $ 12,061
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements ........... 1.71%(e) 1.71% 1.71% 1.71% 1.71% 1.69%
Expenses, before waivers/
reimbursements ........... 1.77%(e) 1.90% 1.90% 1.93% 2.16% 2.34%
Net investment income,
net of waivers/
reimbursements ........... 3.60%(e) 3.82% 3.69% 3.86% 4.35% 4.60%
Portfolio turnover rate ....... 2% 18% 46% 18% 115% 287%
See footnote summary on page 149.
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 133
Financial Highlights
- --------------------------------------------------------------------------------
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Minnesota Portfolio
------------------------------------------------------------------------------------------------
Class A
------------------------------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2005 ---------------------------------------------------------------------------
(unaudited) 2004(a) 2003 2002 2001 2000
------------------------------------------------------------------------------------------------
Net asset value,
beginning of period ........ $ 10.14 $ 10.15 $ 10.31 $ 10.09 $ 9.72 $ 9.67
------------------------------------------------------------------------------------------------
Income From Investment
Operations
Net investment income(b)(c) ... .21 .44 .45 .48 .52 .53
Net realized and unrealized
gain (loss) on investment
transactions ............... (.01) (.01) (.15) .25 .38 .03
------------------------------------------------------------------------------------------------
Net increase in net asset value
from operations ............ .20 .43 .30 .73 .90 .56
------------------------------------------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income .......... (.21) (.44) (.46) (.48) (.52) (.51)
Distributions in excess of
net investment income ...... -0- -0- -0- (.03) (.01) -0-
------------------------------------------------------------------------------------------------
Total dividends and
distributions .............. (.21) (.44) (.46) (.51) (.53) (.51)
------------------------------------------------------------------------------------------------
Net asset value, end of period $ 10.13 $ 10.14 $ 10.15 $ 10.31 $ 10.09 $ 9.72
================================================================================================
Total Return
Total investment return based
on net asset value(d) ...... 1.97% 4.41% 3.05% 7.46% 9.44% 6.09%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) ............ $ 67,134 $ 64,847 $ 67,521 $ 65,850 $ 30,501 $ 20,212
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements ........... .90%(e) .90% .90% .90% .90% .81%
Expenses, before waivers/
reimbursements ........... 1.11%(e) 1.27% 1.19% 1.29% 1.49% 1.66%
Net investment income,
net of waivers/
reimbursements ........... 4.14%(e) 4.36% 4.42% 4.75% 5.23% 5.57%
Portfolio turnover rate ....... 7% 19% 32% 29% 61% 307%
See footnote summary on page 149.
- --------------------------------------------------------------------------------
134 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Financial Highlights
- --------------------------------------------------------------------------------
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Minnesota Portfolio
------------------------------------------------------------------------------------------------
Class B
------------------------------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2005 ---------------------------------------------------------------------------
(unaudited) 2004(a) 2003 2002 2001 2000
------------------------------------------------------------------------------------------------
Net asset value,
beginning of period ........ $ 10.14 $ 10.15 $ 10.31 $ 10.08 $ 9.72 $ 9.67
------------------------------------------------------------------------------------------------
Income From Investment
Operations
Net investment income(b)(c) ... .17 .37 .38 .40 .45 .46
Net realized and unrealized
gain (loss) on investment
transactions ............... (.02) (.01) (.15) .27 .37 .03
------------------------------------------------------------------------------------------------
Net increase in net asset value
from operations ............ .15 .36 .23 .67 .82 .49
------------------------------------------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income .......... (.17) (.37) (.39) (.40) (.45) (.44)
Distributions in excess of
net investment income ...... -0- -0- -0- (.04) (.01) -0-
------------------------------------------------------------------------------------------------
Total dividends and
distributions .............. (.17) (.37) (.39) (.44) (.46) (.44)
------------------------------------------------------------------------------------------------
Net asset value, end of period $ 10.12 $ 10.14 $ 10.15 $ 10.31 $ 10.08 $ 9.72
================================================================================================
Total Return
Total investment return based
on net asset value(d) ...... 1.52% 3.68% 2.34% 6.84% 8.61% 5.32%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) ............ $ 15,721 $ 16,976 $ 24,366 $ 24,340 $ 17,304 $ 12,064
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements ........... 1.60%(e) 1.60% 1.60% 1.60% 1.60% 1.51%
Expenses, before waivers/
reimbursements ........... 1.82%(e) 1.99% 1.90% 1.99% 2.19% 2.37%
Net investment income,
net of waivers/
reimbursements .......... 3.44%(e) 3.65% 3.72% 4.04% 4.52% 4.81%
Portfolio turnover rate ....... 7% 19% 32% 29% 61% 307%
See footnote summary on page 149.
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 135
Financial Highlights
- --------------------------------------------------------------------------------
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Minnesota Portfolio
------------------------------------------------------------------------------------------------
Class C
------------------------------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2005 ---------------------------------------------------------------------------
(unaudited) 2004(a) 2003 2002 2001 2000
------------------------------------------------------------------------------------------------
Net asset value,
beginning of period ........ $ 10.15 $ 10.16 $ 10.32 $ 10.10 $ 9.72 $ 9.67
------------------------------------------------------------------------------------------------
Income From Investment
Operations
Net investment income(b)(c) ... .17 .37 .38 .40 .45 .46
Net realized and unrealized
gain (loss) on investment
transactions ............... (.01) (.01) (.15) .26 .39 .03
------------------------------------------------------------------------------------------------
Net increase in net asset value
from operations ............ .16 .36 .23 .66 .84 .49
------------------------------------------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income .......... (.17) (.37) (.39) (.40) (.45) (.44)
Distributions in excess of
net investment income ...... -0- -0- -0- (.04) (.01) -0-
------------------------------------------------------------------------------------------------
Total dividends and
distributions .............. (.17) (.37) (.39) (.44) (.46) (.44)
------------------------------------------------------------------------------------------------
Net asset value, end of period $ 10.14 $ 10.15 $ 10.16 $ 10.32 $ 10.10 $ 9.72
================================================================================================
Total Return
Total investment return based
on net asset value(d) ...... 1.62% 3.68% 2.34% 6.72% 8.82% 5.32%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) ............ $ 16,110 $ 16,402 $ 19,248 $ 20,401 $ 11,434 $ 7,524
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements ........... 1.60%(e) 1.60% 1.60% 1.60% 1.60% 1.50%
Expenses, before waivers/
reimbursements ........... 1.81%(e) 1.98% 1.89% 1.99% 2.19% 2.36%
Net investment income,
net of waivers/
reimbursements ........... 3.44%(e) 3.65% 3.70% 4.01% 4.51% 4.84%
Portfolio turnover rate ....... 7% 19% 32% 29% 61% 307%
See footnote summary on page 149.
- --------------------------------------------------------------------------------
136 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Financial Highlights
- --------------------------------------------------------------------------------
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
New Jersey Portfolio
------------------------------------------------------------------------------------------------
Class A
------------------------------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2005 ---------------------------------------------------------------------------
(unaudited) 2004(a) 2003 2002 2001 2000
------------------------------------------------------------------------------------------------
Net asset value,
beginning of period ........ $ 9.84 $ 9.80 $ 10.03 $ 10.11 $ 9.92 $ 9.93
------------------------------------------------------------------------------------------------
Income From Investment
Operations
Net investment income(b)(c) ... .21 .45 .45 .48 .52 .52
Net realized and unrealized
gain (loss) on investment
transactions ............... .01 .04 (.22) (.05) .20 (.02)
------------------------------------------------------------------------------------------------
Net increase in net asset value
from operations ............ .22 .49 .23 .43 .72 .50
------------------------------------------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income .......... (.22) (.45) (.46) (.48) (.52) (.51)
Distributions in excess of
net investment income ...... -0- -0- -0- (.03) (.01) -0-
------------------------------------------------------------------------------------------------
Total dividends and
distributions .............. (.22) (.45) (.46) (.51) (.53) (.51)
------------------------------------------------------------------------------------------------
Net asset value, end of period $ 9.84 $ 9.84 $ 9.80 $ 10.03 $ 10.11$ 9.92
================================================================================================
Total Return
Total investment return based
on net asset value(d) ...... 2.20% 5.05% 2.39% 4.42% 7.33% 5.31%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) ............ $ 73,872 $ 76,164 $ 81,632 $ 94,865 $ 80,489 $ 49,667
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements ........... .87%(e) .87% .87% .87% .87% .85%
Expenses, before waivers/
reimbursements ........... 1.00%(e) 1.16% 1.13% 1.11% 1.13% 1.23%
Net investment income,
net of waivers/
reimbursements ........... 4.29%(e) 4.60% 4.53% 4.80% 5.04% 5.36%
Portfolio turnover rate ....... 27% 15% 45% 49% 111% 224%
See footnote summary on page 149.
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 137
Financial Highlights
- --------------------------------------------------------------------------------
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
New Jersey Portfolio
------------------------------------------------------------------------------------------------
Class B
------------------------------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2005 ---------------------------------------------------------------------------
(unaudited) 2004(a) 2003 2002 2001 2000
------------------------------------------------------------------------------------------------
Net asset value,
beginning of period ........ $ 9.84 $ 9.80 $ 10.04 $ 10.11 $ 9.92 $ 9.93
------------------------------------------------------------------------------------------------
Income From Investment
Operations
Net investment income(b)(c) ... .18 .38 .38 .41 .44 .45
Net realized and unrealized
gain (loss) on investment
transactions ............... .01 .04 (.23) (.04) .20 (.02)
------------------------------------------------------------------------------------------------
Net increase in net asset value
from operations ............ .19 .42 .15 .37 .64 .43
------------------------------------------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income .......... (.18) (.38) (.39) (.41) (.44) (.44)
Distributions in excess of
net investment income ...... -0- -0- -0- (.03) (.01) -0-
------------------------------------------------------------------------------------------------
Total dividends and
distributions .............. (.18) (.38) (.39) (.44) (.45) (.44)
------------------------------------------------------------------------------------------------
Net asset value, end of period $ 9.85 $ 9.84 $ 9.80 $ 10.04 $ 10.11 $ 9.92
================================================================================================
Total Return
Total investment return based
on net asset value(d) ...... 1.95% 4.41% 1.56% 3.79% 6.56% 4.53%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) ............ $ 73,147 $ 83,835 $ 110,294 $ 127,025 $ 103,889 $ 62,149
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements ........... 1.57%(e) 1.57% 1.57% 1.57% 1.57% 1.55%
Expenses, before waivers/
reimbursements ........... 1.71%(e) 1.87% 1.84% 1.82% 1.84% 1.94%
Net investment income,
net of waivers/
reimbursements ........... 3.58%(e) 3.89% 3.83% 4.10% 4.33% 4.63%
Portfolio turnover rate ....... 27% 15% 45% 49% 111% 224%
See footnote summary on page 149.
- --------------------------------------------------------------------------------
138 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Financial Highlights
- --------------------------------------------------------------------------------
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
New Jersey Portfolio
------------------------------------------------------------------------------------------------
Class C
------------------------------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2005 ---------------------------------------------------------------------------
(unaudited) 2004(a) 2003 2002 2001 2000
------------------------------------------------------------------------------------------------
Net asset value,
beginning of period ........ $ 9.84 $ 9.81 $ 10.04 $ 10.11 $ 9.93 $ 9.93
------------------------------------------------------------------------------------------------
Income From Investment
Operations
Net investment income(b)(c) ... .18 .38 .38 .41 .44 .45
Net realized and unrealized
gain (loss) on investment
transactions ............... .01 .03 (.22) (.04) .19 (.01)
------------------------------------------------------------------------------------------------
Net increase in net asset value
from operations ............ .19 .41 .16 .37 .63 .44
------------------------------------------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income .......... (.18) (.38) (.39) (.41) (.44) (.44)
Distributions in excess of
net investment income ...... -0- -0- -0- (.03) (.01) -0-
------------------------------------------------------------------------------------------------
Total dividends and
distributions .............. (.18) (.38) (.39) (.44) (.45) (.44)
------------------------------------------------------------------------------------------------
Net asset value, end of period $ 9.85 $ 9.84 $ 9.81 $ 10.04 $ 10.11 $ 9.93
================================================================================================
Total Return
Total investment return based
on net asset value(d) ...... 1.95% 4.30% 1.66% 3.78% 6.45% 4.63%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) ............ $ 36,159 $ 37,926 $ 45,633 $ 56,295 $ 46,025 $ 31,115
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements ........... 1.57%(e) 1.57% 1.57% 1.57% 1.57% 1.54%
Expenses, before waivers/
reimbursements ........... 1.71%(e) 1.86% 1.83% 1.81% 1.83% 1.93%
Net investment income,
net of waivers/
reimbursements ........... 3.59%(e) 3.89% 3.83% 4.10% 4.34% 4.64%
Portfolio turnover rate ....... 27% 15% 45% 49% 111% 224%
See footnote summary on page 149.
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 139
Financial Highlights
- --------------------------------------------------------------------------------
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Ohio Portfolio
------------------------------------------------------------------------------------------------
Class A
------------------------------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2005 ---------------------------------------------------------------------------
(unaudited) 2004(a) 2003 2002 2001 2000
------------------------------------------------------------------------------------------------
Net asset value,
beginning of period ........ $ 10.10 $ 10.05 $ 10.02 $ 10.01 $ 9.77 $ 9.86
------------------------------------------------------------------------------------------------
Income From Investment
Operations
Net investment income(b)(c) ... .22 .44 .46 .50 .54 .54
Net realized and unrealized
gain (loss) on investment
transactions ............... (.04) .05 .05 .04 .23 (.12)
------------------------------------------------------------------------------------------------
Net increase in net asset value
from operations ............ .18 .49 .51 .54 .77 .42
Less: Dividends and
Distributions
Dividends from net
investment income .......... (.21) (.44) (.48) (.51) (.53) (.51)
Distributions in excess of
net investment income ...... -0- -0- -0- (.02) -0- -0-
------------------------------------------------------------------------------------------------
Total dividends and
distributions .............. (.21) (.44) (.48) (.53) (.53) (.51)
------------------------------------------------------------------------------------------------
Net asset value, end of period $ 10.07 $ 10.10 $ 10.05 $ 10.02 $ 10.01 $ 9.77
================================================================================================
Total Return
Total investment return based
on net asset value(d) ...... 1.81% 5.02% 5.20% 5.57% 8.04% 4.54%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) ............ $ 80,623 $ 78,184 $ 75,102 $ 70,223 $ 46,855 $ 32,490
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements ........... .85%(e) .85% .85% .85% .85% .76%
Expenses, before waivers/
reimbursements ........... .98%(e) 1.14% 1.15% 1.15% 1.20% 1.29%
Net investment income,
net of waivers/
reimbursements ........... 4.27%(e) 4.38% 4.59% 4.99% 5.42% 5.57%
Portfolio turnover rate ....... 13% 33% 23% 34% 32% 307%
See footnote summary on page 149.
- --------------------------------------------------------------------------------
140 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Financial Highlights
- --------------------------------------------------------------------------------
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Ohio Portfolio
------------------------------------------------------------------------------------------------
Class B
------------------------------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2005 ---------------------------------------------------------------------------
(unaudited) 2004(a) 2003 2002 2001 2000
------------------------------------------------------------------------------------------------
Net asset value,
beginning of period ........ $ 10.09 $ 10.04 $ 10.02 $ 10.01 $ 9.77 $ 9.86
------------------------------------------------------------------------------------------------
Income From Investment
Operations
Net investment income(b)(c) ... .18 .37 .39 .43 .47 .46
Net realized and unrealized
gain (loss) on investment
transactions ............... (.02) .05 .04 .05 .24 (.11)
------------------------------------------------------------------------------------------------
Net increase in net asset value
from operations ............ .16 .42 .43 .48 .71 .35
------------------------------------------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income .......... (.18) (.37) (.41) (.44) (.47) (.44)
Distributions in excess of
net investment income ...... -0- -0- -0- (.03) -0- -0-
------------------------------------------------------------------------------------------------
Total dividends and
distributions .............. (.18) (.37) (.41) (.47) (.47) (.44)
------------------------------------------------------------------------------------------------
Net asset value, end of period $ 10.07 $ 10.09 $ 10.04 $ 10.02 $ 10.01 $ 9.77
================================================================================================
Total Return
Total investment return based
on net asset value(d) ...... 1.56% 4.30% 4.37% 4.87% 7.33% 3.78%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) ............ $ 63,464 $ 70,121 $ 83,422 $ 73,159 $ 54,575 $ 40,812
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements ........... 1.55%(e) 1.55% 1.55% 1.55% 1.55% 1.47%
Expenses, before waivers/
reimbursements ........... 1.68%(e) 1.85% 1.86% 1.85% 1.91% 2.00%
Net investment income,
net of waivers/
reimbursements ........... 3.57%(e) 3.69% 3.88% 4.29% 4.72% 4.84%
Portfolio turnover rate ....... 13% 33% 23% 34% 32% 307%
See footnote summary on page 149.
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 141
Financial Highlights
- --------------------------------------------------------------------------------
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Ohio Portfolio
------------------------------------------------------------------------------------------------
Class C
------------------------------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2005 ---------------------------------------------------------------------------
(unaudited) 2004(a) 2003 2002 2001 2000
------------------------------------------------------------------------------------------------
Net asset value,
beginning of period ........ $ 10.09 $ 10.05 $ 10.02 $ 10.02 $ 9.77 $ 9.86
------------------------------------------------------------------------------------------------
Income From Investment
Operations
Net investment income(b)(c) ... .18 .37 .39 .43 .47 .47
Net realized and unrealized
gain (loss) on investment
transactions ............... (.02) .04 .05 .04 .25 (.12)
------------------------------------------------------------------------------------------------
Net increase in net asset value
from operations ............ .16 .41 .44 .47 .72 .35
------------------------------------------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income .......... (.18) (.37) (.41) (.44) (.47) (.44)
Distributions in excess of
net investment income ...... -0- -0- -0- (.03) -0- -0-
------------------------------------------------------------------------------------------------
Total dividends and
distributions .............. (.18) (.37) (.41) (.47) (.47) (.44)
------------------------------------------------------------------------------------------------
Net asset value, end of period $ 10.07 $ 10.09 $ 10.05 $ 10.02 $ 10.02 $ 9.77
================================================================================================
Total Return
Total investment return based
on net asset value(d) ...... 1.56% 4.19% 4.47% 4.77% 7.43% 3.78%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) ............ $ 46,821 $ 48,233 $ 54,062 $ 53,883 $ 36,500 $ 22,909
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements ........... 1.55%(e) 1.55% 1.55% 1.55% 1.55% 1.46%
Expenses, before waivers/
reimbursements ........... 1.68%(e) 1.85% 1.85% 1.85% 1.90% 1.99%
Net investment income,
net of waivers/
reimbursements ........... 3.57%(e) 3.69% 3.89% 4.29% 4.71% 4.85%
Portfolio turnover rate ....... 13% 33% 23% 34% 32% 307%
See footnote summary on page 149.
- --------------------------------------------------------------------------------
142 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Financial Highlights
- --------------------------------------------------------------------------------
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Pennsylvania Portfolio
------------------------------------------------------------------------------------------------
Class A
------------------------------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2005 ---------------------------------------------------------------------------
(unaudited) 2004(a) 2003 2002 2001 2000
------------------------------------------------------------------------------------------------
Net asset value,
beginning of period ........ $ 10.48 $ 10.44 $ 10.58 $ 10.42 $ 9.88 $ 9.89
------------------------------------------------------------------------------------------------
Income From Investment
Operations
Net investment income(b)(c) ... .22 .48 .50 .51 .52 .52
Net realized and unrealized
gain (loss) on investment
transactions ............... (.05) .04 (.14) .18 .55 (.01)
------------------------------------------------------------------------------------------------
Net increase in net asset value
from operations ............ .17 .52 .36 .69 1.07 .51
------------------------------------------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income .......... (.22) (.48) (.50) (.51) (.52) (.52)
Distributions in excess of
net investment income ...... -0- -0- -0- (.02) (.01) -0-
------------------------------------------------------------------------------------------------
Total dividends and
distributions .............. (.22) (.48) (.50) (.53) (.53) (.52)
------------------------------------------------------------------------------------------------
Net asset value, end of period $ 10.43 $ 10.48 $ 10.44 $ 10.58 $ 10.42 $ 9.88
================================================================================================
Total Return
Total investment return based
on net asset value(d) ...... 1.62% 5.06% 3.57% 6.88% 11.11% 5.35%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) ............ $ 74,164 $ 74,132 $ 84,053 $ 99,426 $ 96,834 $ 68,288
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements ........... .95%(e) .95% .95% .95% .95% .95%
Expenses, before waivers/
reimbursements ........... 1.03%(e) 1.17% 1.16% 1.13% 1.16% 1.23%
Net investment income,
net of waivers/
reimbursements ........... 4.26%(e) 4.55% 4.91% 4.98% 5.15% 5.40%
Portfolio turnover rate ....... 22% 19% 17% 38% 112% 356%
See footnote summary on page 149.
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 143
Financial Highlights
- --------------------------------------------------------------------------------
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Pennsylvania Portfolio
------------------------------------------------------------------------------------------------
Class B
------------------------------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2005 ---------------------------------------------------------------------------
(unaudited) 2004(a) 2003 2002 2001 2000
------------------------------------------------------------------------------------------------
Net asset value,
beginning of period ........ $ 10.48 $ 10.44 $ 10.58 $ 10.41 $ 9.88 $ 9.89
------------------------------------------------------------------------------------------------
Income From Investment
Operations
Net investment income(b)(c) ... .19 .40 .44 .45 .45 .45
Net realized and unrealized
gain (loss) on investment
transactions ............... (.06) .04 (.15) .18 .54 (.02)
------------------------------------------------------------------------------------------------
Net increase in net asset value
from operations ............ .13 .44 .29 .63 .99 .43
------------------------------------------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income .......... (.18) (.40) (.43) (.45) (.45) (.44)
Distributions in excess of
net investment income ...... -0- -0- -0- (.01) (.01) -0-
------------------------------------------------------------------------------------------------
Total dividends and
distributions .............. (.18) (.40) (.43) (.46) (.46) (.44)
------------------------------------------------------------------------------------------------
Net asset value, end of period $ 10.43 $ 10.48 $ 10.44 $ 10.58 $ 10.41 $ 9.88
================================================================================================
Total Return
Total investment return based
on net asset value(d) ...... 1.27% 4.32% 2.84% 6.26% 10.25% 4.58%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) ............ $ 49,030 $ 55,552 $ 68,409 $ 74,390 $ 62,038 $ 44,713
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements .......... 1.65%(e) 1.65% 1.65% 1.65% 1.65% 1.66%
Expenses, before waivers/
reimbursements ........... 1.73%(e) 1.88% 1.87% 1.84% 1.86% 1.94%
Net investment income,
net of waivers/
reimbursements ........... 3.56%(e) 3.85% 4.21% 4.35% 4.36% 4.69%
Portfolio turnover rate ....... 22% 19% 17% 38% 112% 356%
See footnote summary on page 149.
- --------------------------------------------------------------------------------
144 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Financial Highlights
- --------------------------------------------------------------------------------
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Pennsylvania Portfolio
------------------------------------------------------------------------------------------------
Class C
------------------------------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2005 ---------------------------------------------------------------------------
(unaudited) 2004(a) 2003 2002 2001 2000
------------------------------------------------------------------------------------------------
Net asset value,
beginning of period ........ $ 10.48 $ 10.44 $ 10.58 $ 10.41 $ 9.88 $ 9.89
------------------------------------------------------------------------------------------------
Income From Investment
Operations
Net investment income(b)(c) ... .19 .40 .44 .45 .45 .46
Net realized and unrealized
gain (loss) on investment
transactions .............. (.06) .04 (.15) .18 .54 (.03)
------------------------------------------------------------------------------------------------
Net increase in net asset value
from operations ............ .13 .44 .29 .63 .99 .43
------------------------------------------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income .......... (.18) (.40) (.43) (.45) (.45) (.44)
Distributions in excess of
net investment income ...... -0- -0- -0- (.01) (.01) -0-
------------------------------------------------------------------------------------------------
Total dividends and
distributions .............. (.18) (.40) (.43) (.46) (.46) (.44)
------------------------------------------------------------------------------------------------
Net asset value, end of period $ 10.43 $ 10.48 $ 10.44 $ 10.58 $ 10.41 $ 9.88
================================================================================================
Total Return
Total investment return based
on net asset value(d) ...... 1.27% 4.32% 2.84% 6.26% 10.25% 4.58%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) ............ $ 33,794 $ 36,168 $ 42,917 $ 46,296 $ 33,334 $ 23,306
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements ........... 1.65%(e) 1.65% 1.65% 1.65% 1.65% 1.65%
Expenses, before waivers/
reimbursements ........... 1.73%(e) 1.87% 1.87% 1.83% 1.86% 1.93%
Net investment income,
net of waivers/
reimbursements ........... 3.56%(e) 3.85% 4.20% 4.30% 4.42% 4.71%
Portfolio turnover rate ....... 22% 19% 17% 38% 112% 356%
See footnote summary on page 149.
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 145
Financial Highlights
- --------------------------------------------------------------------------------
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Virginia Portfolio
------------------------------------------------------------------------------------------------
Class A
------------------------------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2005 ---------------------------------------------------------------------------
(unaudited) 2004(a) 2003 2002 2001 2000
------------------------------------------------------------------------------------------------
Net asset value,
beginning of period ........ $ 10.77 $ 10.75 $ 10.77 $ 10.54 $ 10.35 $ 10.32
------------------------------------------------------------------------------------------------
Income From Investment
Operations
Net investment income(b)(c) ... .25 .52 .52 .52 .54 .56
Net realized and unrealized
gain (loss) on investment
transactions ............... (.03) .01 (.03) .25 .20 .02
------------------------------------------------------------------------------------------------
Net increase in net asset value
from operations ............ .22 .53 .49 .77 .74 .58
------------------------------------------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income .......... (.25) (.51) (.51) (.52) (.54) (.55)
Distributions in excess of
net investment income ...... -0- -0- -0- (.02) (.01) -0-
------------------------------------------------------------------------------------------------
Total dividends and
distributions .............. (.25) (.51) (.51) (.54) (.55) (.55)
------------------------------------------------------------------------------------------------
Net asset value, end of period $ 10.74 $ 10.77 $ 10.75 $ 10.77 $ 10.54 $ 10.35
================================================================================================
Total Return
Total investment return based
on net asset value(d) ...... 2.04% 5.04% 4.66% 7.58% 7.32% 5.88%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) ............ $ 76,934 $ 64,089 $ 71,572 $ 76,797 $ 53,306 $ 37,784
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements ........... .72%(e) .72% .72% .72% .72% .67%
Expenses, before waivers/
reimbursements ........... 1.01%(e) 1.17% 1.15% 1.15% 1.21% 1.26%
Net investment income,
net of waivers/
reimbursements ........... 4.62%(e) 4.82% 4.87% 4.95% 5.18% 5.52%
Portfolio turnover rate ....... 11% 10% 25% 16% 134% 289%
See footnote summary on page 149.
- --------------------------------------------------------------------------------
146 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Financial Highlights
- --------------------------------------------------------------------------------
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Virginia Portfolio
------------------------------------------------------------------------------------------------
Class B
------------------------------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2005 ---------------------------------------------------------------------------
(unaudited) 2004(a) 2003 2002 2001 2000
------------------------------------------------------------------------------------------------
Net asset value,
beginning of period ........ $ 10.75 $ 10.73 $ 10.75 $ 10.53 $ 10.34 $ 10.31
------------------------------------------------------------------------------------------------
Income From Investment
Operations
Net investment income(b)(c) ... .21 .44 .45 .45 .47 .49
Net realized and unrealized
gain (loss) on investment
transactions ............... (.03) .01 (.04) .24 .20 .02
------------------------------------------------------------------------------------------------
Net increase in net asset value
from operations ............ .18 .45 .41 .69 .67 .51
------------------------------------------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income .......... (.21) (.43) (.43) (.45) (.47) (.48)
Distributions in excess of
net investment income ...... -0- -0- -0- (.02) (.01) -0-
------------------------------------------------------------------------------------------------
Total dividends and
distributions .............. (.21) (.43) (.43) (.47) (.48) (.48)
------------------------------------------------------------------------------------------------
Net asset value, end of period $ 10.72 $ 10.75 $ 10.73 $ 10.75 $ 10.53 $ 10.34
================================================================================================
Total Return
Total investment return based
on net asset value(d) ...... 1.69% 4.32% 3.94% 6.78% 6.62% 5.16%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) ............ $ 56,908 $ 65,978 $ 82,541 $ 85,842 $ 69,534 $ 49,216
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements ........... 1.42%(e) 1.42% 1.42% 1.42% 1.42% 1.37%
Expenses, before waivers/
reimbursements ........... 1.71%(e) 1.88% 1.85% 1.86% 1.92% 1.97%
Net investment income,
net of waivers/
reimbursements ........... 3.92%(e) 4.13% 4.18% 4.27% 4.49% 4.83%
Portfolio turnover rate ....... 11% 10% 25% 16% 134% 289%
See footnote summary on page 149.
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 147
Financial Highlights
- --------------------------------------------------------------------------------
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Virginia Portfolio
------------------------------------------------------------------------------------------------
Class C
------------------------------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2005 ---------------------------------------------------------------------------
(unaudited) 2004(a) 2003 2002 2001 2000
------------------------------------------------------------------------------------------------
Net asset value,
beginning of period ........ $ 10.74 $ 10.73 $ 10.75 $ 10.52 $ 10.33 $ 10.31
------------------------------------------------------------------------------------------------
Income From Investment
Operations
Net investment income(b)(c) ... .21 .44 .45 .45 .47 .49
Net realized and unrealized
gain (loss) on investment
transactions ............... (.02) -0- (.04) .25 .20 .01
------------------------------------------------------------------------------------------------
Net increase in net asset value
from operations ............ .19 .44 .41 .70 .67 .50
------------------------------------------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income .......... (.21) (.43) (.43) (.45) (.47) (.48)
Distributions in excess of
net investment income ...... -0- -0- -0- (.02) (.01) -0-
------------------------------------------------------------------------------------------------
Total dividends and
distributions .............. (.21) (.43) (.43) (.47) (.48) (.48)
------------------------------------------------------------------------------------------------
Net asset value, end of period $ 10.72 $ 10.74 $ 10.73 $ 10.75 $ 10.52 $ 10.33
================================================================================================
Total Return
Total investment return based
on net asset value(d) ...... 1.79% 4.23% 3.94% 6.88% 6.62% 5.06%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) ............ $ 26,851 $ 28,654 $ 33,486 $ 34,396 $ 24,116 $ 16,848
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements ........... 1.42%(e) 1.42% 1.42% 1.42% 1.42% 1.37%
Expenses, before waivers/
reimbursements ........... 1.71%(e) 1.87% 1.85% 1.86% 1.92% 1.96%
Net investment income,
net of waivers/
reimbursements ........... 3.93%(e) 4.13% 4.17% 4.26% 4.48% 4.83%
Portfolio turnover rate ....... 11% 10% 25% 16% 134% 289%
See footnote summary on page 149.
- --------------------------------------------------------------------------------
148 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Financial Highlights
- --------------------------------------------------------------------------------
(a) As of October 1, 2003, the Portfolios have adopted the method of
accounting for interim payments on swap contracts in accordance with
Financial Accounting Standards Board Statement No. 133. These interim
payments are reflected within net realized and unrealized gain (loss) on
swap contracts, however prior to October 1, 2003, these interim payments
were reflected within interest income/expense on the statement of
operations. For the year ended September 30, 2004, the effect of this
change to the net investment income and the net realized and unrealized
gain (loss) on investment transactions was less than $0.01 per share. The
effect on the ratio of net investment income to average net assets was as
follows:
Class A Class B Class C
-------- -------- --------
Arizona .01% .00% .00%
Florida (.02)% (.02)% (.02)%
Massachusetts (.01)% .00% (.01)%
Michigan .01% .01% .02%
Minnesota .00% .00% .00%
New Jersey .01% .01% .01%
Ohio (.04)% (.03)% (.04)%
Pennsylvania .00% .01% .00%
Virginia (.02)% (.01)% (.02)%
(b) Net of fees waived and expenses reimbursed by the Adviser.
(c) Based on average shares outstanding.
(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 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.
(e) Annualized.
(f) Amount is less than $0.001.
- --------------------------------------------------------------------------------
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II - 149
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)
Michael J. Downey(1)
OFFICERS(2)
Philip L. Kirstein, Senior Vice President and Independent Compliance Officer
Robert B. Davidson III, Senior Vice President
Douglas Peebles, Senior Vice President
Jeffrey L. Phlegar, Senior Vice President
David M. Dowden, Vice President
Terrance T. Hults, Vice President
William E. Oliver, Vice President
Mark D. Gersten, Treasurer & Chief Financial Officer
Thomas R. Manley, Controller
Mark R. Manley, Secretary
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 Registered Public
Accounting Firm
Ernst & Young LLP
5 Times Square
New York, NY 10036
Transfer Agent
Alliance Global Investor Services, Inc.
P.O. Box 786003
San Antonio, Texas 78278-6003
Toll-free (800) 227-5672
(1) Member of the Audit Committee, the Governance and Nominating Committee and
the Independent Directors Committee.
(2) The day-to-day management of and investment decisions for the Portfolios
are made by the Municipal Bond Investment Team.
- --------------------------------------------------------------------------------
150 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
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
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 Growth Fund*
International Research Growth Fund*
New Europe 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. Prior to
May 16, 2005, International Growth Fund was named Worldwide Privatization
Fund and International Research Growth Fund was named International
Premier Growth 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 MUNICIPAL INCOME FUND II - 151
NOTES
- --------------------------------------------------------------------------------
152 - ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
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.
MUNIIISR0305
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 during the second fiscal quarter of the period 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: May 27, 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: May 27, 2005
By: /s/ Mark D. Gersten
-------------------
Mark D. Gersten
Treasurer and Chief Financial Officer
Date: May 27, 2005