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: 811-06554
ALLIANCEBERNSTEIN AMERICAS GOVERNMENT INCOME TRUST, INC.
(Exact name of registrant as specified in charter)
1345 Avenue of the Americas, New York, New York 10105
(Address of principal executive offices) (Zip code)
Mark R. Manley
Alliance Capital Management L.P.
1345 Avenue of the Americas
New York, New York 10105
(Name and address of agent for service)
Registrant's telephone number, including area code: (800) 221-5672
Date of fiscal year end: September 30, 2005
Date of reporting period: September 30, 2005
ITEM 1. REPORTS TO STOCKHOLDERS.
[LOGO] ALLIANCEBERNSTEIN (R)
Investment Research and Management
AllianceBernstein Americas
Government Income Trust
Annual Report
September 30, 2005
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Investment Products Offered
===========================
o Are Not FDIC Insured
o May Lose Value
o Are Not Bank Guaranteed
===========================
The investment return and principal value of an investment in the Fund will
fluctuate as the prices of the individual securities in which it invests
fluctuate, so that your shares, when redeemed, may be worth more or less than
their original cost. You should consider the investment objectives, risks,
charges and expenses of the Fund carefully before investing. For a free copy of
the Fund's prospectus, which contains this and other information, visit our web
site at www.alliancebernstein.com or call your financial advisor or
AllianceBernstein at (800) 227-4618. Please read the prospectus carefully
before you invest.
You may obtain performance information current to the most recent month-end by
visiting www.alliancebernstein.com.
This shareholder report must be preceded or accompanied by the Fund's
prospectus for individuals who are not current shareholders of the Fund.
You may obtain a description of the Fund's proxy voting policies and
procedures, and information regarding how the Fund voted proxies relating to
portfolio securities during the most recent 12-month period ended June 30,
without charge. Simply visit AllianceBernstein's web site at
www.alliancebernstein.com, or go to the Securities and Exchange Commission's
(the "Commission") web site at www.sec.gov, or call AllianceBernstein at (800)
227-4618.
The Fund files its complete schedule of portfolio holdings with the Commission
for the first and third quarters of each fiscal year on Form N-Q. The Fund's
Forms N-Q are available on the Commission's web site at www.sec.gov. The Fund's
Forms N-Q may also be reviewed and copied at the Commission's Public Reference
Room in Washington, DC; information on the operation of the Public Reference
Room may be obtained by calling (800) SEC-0330.
AllianceBernstein 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.
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November 22, 2005
ANNUAL REPORT
This report provides management's discussion of fund performance for
AllianceBernstein Americas Government Income Trust (the "Fund") for the annual
reporting period ended September 30, 2005.
INVESTMENT OBJECTIVES AND POLICIES
This open-end fund seeks the highest level of current income, consistent with
what we believe to be prudent investment risk that is available from a
portfolio of debt securities issued or guaranteed (i.e., Brady Bonds) by the
governments of the United States, Canada or Mexico, their political
subdivisions (including Canadian Provinces but excluding states of the U.S.),
agencies, instrumentalities or authorities. Investments in the Fund include
debt securities issued by governmental entities of Caribbean and Latin American
nations.
INVESTMENT RESULTS
The table on page 4 shows the Fund's performance compared to its benchmark, a
composite consisting of 50% Lehman Brothers (LB) Government Index--a broad
measure of the performance of U.S. government bonds--and 50% J.P. Morgan
Emerging Markets Bond Index Plus (JPM EMBI+) Latin Only--composed of
dollar-denominated restructured sovereign bonds of emerging markets in Latin
America (the "Composite"), for the six- and 12-month periods ended September
30, 2005.
The Fund outperformed its blended benchmark, a 50%/50% composite as described
above, for both the six- and 12-month periods ended September 30, 2005. The
Fund's Mexican and Canadian local currency holdings were the primary positive
contributors to performance relative to the benchmark. During the year, both
the Canadian dollar and Mexican peso gained significant value against the U.S.
dollar. According to J.P. Morgan, local Mexican government debt returned 16.19%
and local Canadian debt returned 9.24%. Additionally, the Fund's longer
duration positioning in Mexican debt further enhanced returns.
The Fund also benefited from an allocation to Canadian real return bonds and
TIPS (inflation-linked securities). Lastly, the Fund's ability to leverage
during a period of both strong bond and foreign currency returns also added to
the Fund's premium. Leverage, which is a mutual fund's ability to borrow
against the value of securities in its portfolio, gives a portfolio manager
more flexibility to add to a fund's premium; however, this could increase share
price fluctuation.
MARKET REVIEW AND INVESTMENT STRATEGY
The emerging market debt class posted the strongest returns within fixed-income
sectors for the annual reporting period, returning 14.79% according to the JPM
EMBI+ (Latin Only). The emerging markets have enjoyed strong investor demand, a
favorable low global interest rate environment, strong global liquidity and
improving individual country fundamentals. Additionally, many emerging debt
countries markedly improved their ex-
ALLIANCEBERNSTEIN AMERICAS GOVERNMENT INCOME TRUST 1
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ternal debt dynamics and pre-funded their debt obligations through 2006.
For the annual period, all emerging market countries posted positive returns.
The Latin region benefited from both export demand and strong commodity prices,
particularly oil. Sustained growth in the Latin region and a resulting decline
in fiscal deficits improved their macroeconomic fundamentals. Countries
outperforming for the annual period included oil producing Ecuador and
Venezuela, which both returned 22.32%. Brazil, which returned 16.01%, was
upgraded by both Moody's Investors Service and Standard & Poor's rating
agencies. In local currency terms, Mexico returned 16.19%.
Canadian government bonds outperformed most global government bond markets at
9.41% in local terms. Canadian government bonds were supported by a sluggish
domestic economy, stable interest rates, a steep yield curve and a strong
currency. The U.S. Treasury market, however, posted a weaker return of 2.65% as
Treasury prices reflected mixed economic news throughout the reporting period.
The U.S. mortgage market fared better, but still only produced a modest return
of 3.29%.
During the reporting period, the Fund's positions in U.S. government bonds were
reduced in market and duration terms on prospects for U.S. economic growth and
the dampening effect of higher interest rates. The Fund's allocation to
Canadian bonds was also increased as Canadian growth remained generally
sluggish and interest rates steady. Inflation protected securities were also
utilized in the portfolio as a buffer against rising rates. Additionally, the
Fund's position in longer maturity local Mexican debt and its exposure to
Brazil were maintained. The Fund's exposure to Peru was also increased as
economic growth continued to outpace many Latin countries on strong demand for
its exports.
2 ALLIANCEBERNSTEIN AMERICAS GOVERNMENT INCOME TRUST
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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 Fund will
fluctuate, so that your shares, when redeemed, may be worth more or less than
their original cost. You should consider the investment objectives, risks,
charges and expenses of the Fund carefully before investing. For a free copy of
the Fund's prospectus, which contains this and other information, visit our web
site at www.alliancebernstein.com or call your financial advisor or
AllianceBernstein at (800) 227-4618. You should read the prospectus carefully
before you invest.
Returns are annualized for periods longer than one year. All fees and expenses
related to the operation of the Fund have been deducted. NAV returns do not
reflect sales charges; if sales charges were reflected, the Fund's quoted
performance would be lower. SEC returns reflect the applicable sales charges
for each share class: a 4.25% maximum front-end sales charge for Class A
shares; the applicable contingent deferred sales charge for Class B shares (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
Neither the unmanaged Lehman Brothers (LB) Government Index nor the unmanaged
J.P. Morgan Emerging Markets Bond Index Plus (JPM EMBI+) Latin Only reflects
fees and expenses associated with the active management of a mutual fund
portfolio. The Composite benchmark represents a 50%/50% blend of both the LB
Government Index and the JPM EMBI+ Latin Only. The LB Government Index is
composed of the LB Treasury Index and the LB Agency Index. The unmanaged JPM
EMBI+ Latin Only is composed of dollar-denominated restructured sovereign bonds
of emerging markets in Latin America; a large percentage of the Index is made
up of Brady Bonds. An investor cannot invest directly in indices, and their
results are not indicative of the performance for any specific investment,
including the Fund.
A WORD ABOUT RISK
The Fund invests a significant amount of its assets in foreign securities which
may magnify fluctuations due to changes in foreign exchange rates and the
possibility of political and economic uncertainties in foreign countries. These
risks may be magnified for investments in emerging markets. To increase yield,
the Fund can use leverage, a speculative technique, which may increase share
price fluctuation. Price fluctuation in the Fund's portfolio securities 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 Fund to decline.
Changes in interest rates have a greater effect on bonds with longer maturities
than on those with shorter maturities. High yield bonds, otherwise known as
"junk bonds," involve a greater risk of default and price volatility than other
bonds. Investing in non-investment grade securities presents special risks,
including credit risk. Investments in the Fund are not guaranteed because of
fluctuation in the net asset value of the underlying fixed-income related
investments. Similar to direct bond ownership, bond funds have the same
interest rate, inflation and credit risks that are associated with the
underlying bonds owned by the Fund. Fund purchasers should understand that, in
contrast to owning individual bonds, there are ongoing fees and expenses
associated with owning shares of bond funds. While the Fund invests principally
in bonds and other fixed-income securities, in order to achieve its investment
objectives, the Fund may at times use certain types of investment derivatives,
such as options, futures, forwards and swaps. These instruments involve risks
different from, and in certain cases, greater than, the risks presented by more
traditional investments. These risks are fully discussed in the Fund's
prospectus.
ALLIANCEBERNSTEIN AMERICAS GOVERNMENT INCOME TRUST 3
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HISTORICAL PERFORMANCE
(continued from previous page)
Returns
THE FUND VS. ITS BENCHMARK ------------------------
PERIODS ENDED SEPTEMBER 30, 2005 6 Months 12 Months
- -------------------------------------------------------------------
AllianceBernstein Americas Government
Income Trust
Class A 9.56% 11.83%
Class B 9.02% 10.89%
Class C 9.15% 10.87%
Composite: 50% Lehman Brothers
Government Index and 50% J.P. Morgan EMBI+
Latin Only 6.89% 8.63%
Lehman Brothers Government Bond Index 2.39% 2.47%
J.P. Morgan EMBI+ Latin Only 11.38% 14.79%
GROWTH OF A $10,000 INVESTMENT IN THE FUND
9/30/95 TO 9/30/05
[THE FOLLOWING TABLE WAS DEPICTED BY A MOUNTAIN CHART IN THE PRINTED MATERIAL.]
AllianceBernstein
Americas Government Lehman Brothers J.P. Morgan
Income Trust Class A Composite Government Index EMBI+ Latin Only
- -------------------------------------------------------------------------------
9/30/95 $9,575 $10,000 $10,000 $10,000
9/30/96 $11,802 $12,123 $10,442 $13,805
9/30/97 $14,801 $14,222 $11,398 $17,319
9/30/98 $14,708 $14,009 $12,948 $14,447
9/30/99 $16,658 $15,281 $12,727 $17,317
9/30/00 $19,242 $17,468 $13,641 $21,030
9/30/01 $20,997 $18,224 $15,450 $20,061
9/30/02 $21,192 $17,638 $17,001 $16,757
9/30/03 $25,326 $22,367 $17,605 $25,148
9/30/04 $26,522 $24,322 $18,048 $28,909
9/30/05 $29,659 $26,421 $18,494 $33,185
AllianceBernstein Americas Government Income Trust Class A: $29,659
Composite: $26,421
Lehman Brothers Government Index: $18,494
J.P. Morgan EMBI + Latin Only: $33,185
This chart illustrates the total value of an assumed $10,000 investment in
AllianceBernstein Americas Government Income Trust Class A shares (from 9/30/95
to 9/30/05) as compared to the performance of the Fund's benchmark, a composite
consisting of 50% Lehman Brothers Government Index and 50% J.P. Morgan EMBI+
Latin Only, as well as each benchmark separately. The chart reflects the
deduction of the maximum 4.25% sales charge from the initial $10,000 investment
in the Fund and assumes the reinvestment of dividends and capital gains.
See Historical Performance and Benchmark Disclosures on previous page.
(Historical Performance continued on next page)
4 ALLIANCEBERNSTEIN AMERICAS GOVERNMENT INCOME TRUST
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HISTORICAL PERFORMANCE
(continued from previous page)
AVERAGE ANNUAL RETURNS AS OF SEPTEMBER 30, 2005
NAV Returns SEC Returns
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Class A Shares
1 Year 11.83% 7.03%
5 Years 9.04% 8.08%
10 Years 11.97% 11.48%
SEC Yield* 5.25%
Class B Shares
1 Year 10.89% 7.89%
5 Years 8.16% 8.16%
10 Years(a) 11.44% 11.44%
SEC Yield* 4.78%
Class C Shares
1 Year 10.87% 9.87%
5 Years 8.23% 8.23%
10 Years 11.12% 11.12%
SEC Yield* 4.78%
SEC AVERAGE ANNUAL RETURNS (WITH SALES CHARGES)
AS OF THE MOST RECENT CALENDAR QUARTER-END (SEPTEMBER 30, 2005)
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Class A Shares
1 Year 7.03%
5 Years 8.08%
10 Years 11.48%
Class B Shares
1 Year 7.89%
5 Years 8.16%
10 Years(a) 11.44%
Class C Shares
1 Year 9.87%
5 Years 8.23%
10 Years 11.12%
(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 September 30, 2005.
See Historical Performance disclosures on page 3.
ALLIANCEBERNSTEIN AMERICAS GOVERNMENT INCOME TRUST 5
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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 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 table below provides information about hypothetical account values and
hypothetical expenses based on the Fund's actual expense ratio and an assumed
annual rate of return of 5% before expenses, which is not the Fund's actual
return. The hypothetical account values and expenses may not be used to
estimate the actual ending account balance or expenses you paid for the period.
You may use this information to compare the ongoing costs of investing in the
Fund and other funds by comparing this 5% hypothetical example with the 5%
hypothetical examples that appear in the shareholder reports of other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads), or contingent deferred sales charges on redemptions.
Therefore, the second line of the table is useful in comparing ongoing costs
only, and will not help you determine the relative total costs of owning
different funds. In addition, if these transactional costs were included, your
costs would have been higher.
Beginning Ending
Account Value Account Value Expenses Paid
April 1, 2005 September 30, 2005 During Period*
---------------------- ---------------------- ---------------------
Actual Hypothetical Actual Hypothetical Actual Hypothetical
- -------------------------------------------------------------------------------
Class A $ 1,000 $ 1,000 $ 1,095.59 $ 1,019.65 $ 5.67 $ 5.47
Class B $ 1,000 $ 1,000 $ 1,091.64 $ 1,016.04 $ 9.44 $ 9.10
Class C $ 1,000 $ 1,000 $ 1,091.46 $ 1,016.14 $ 9.33 $ 9.00
* Expenses are equal to the classes' annualized expense ratios of 1.08%, 1.80%
and 1.78%, respectively, multiplied by the average account value over the
period, multiplied by the number of days in the most recent fiscal
half-year/365 (reflect the one-half year period).
6 ALLIANCEBERNSTEIN AMERICAS GOVERNMENT INCOME TRUST
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PORTFOLIO SUMMARY
September 30, 2005
PORTFOLIO STATISTICS
Net Assets ($mil): $1,584.0
SECURITY TYPE BREAKDOWN*
54.4% Sovereign
45.5% U.S. Government and Sponsored Agency Obligations
0.1% Short-Term
* All data are as of September 30, 2005. The Fund's security type breakdown is
expressed as a percentage of total investments and may vary over time.
ALLIANCEBERNSTEIN AMERICAS GOVERNMENT INCOME TRUST 7
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PORTFOLIO OF INVESTMENTS
September 30, 2005
Principal
Amount
(000) U.S. $ Value
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GOVERNMENT/AGENCY
OBLIGATIONS-115.5%
Argentina-0.8%
Republic of Argentina
4.01%, 8/03/12(a)(b) US$ 10,154 $ 9,294,798
8.28%, 12/31/33 3,849 3,971,795
--------------
Total Argentinian Securities
(cost $13,192,132) 13,266,593
--------------
Brazil-11.0%
Brazilian Real Structured Product
Zero Coupon, 9/20/07(b) BRL 139,046 45,631,832
Federal Republic of Brazil
4.31%, 4/15/12(a)(b) 3,885 3,826,356
4.31%, 4/15/12(a)(b) 3,669 3,613,838
8.00%, 1/15/18(b) 6,074 6,408,070
9.25%, 10/22/10(b) 2,090 2,349,160
10.50%, 7/14/14(b) 2,520 3,049,200
11.00%, 8/17/40(b) 26,242 32,146,450
11.50%, 3/12/08(b) 50,675 57,769,500
12.00%, 4/15/10(b) 625 765,625
12.50%, 1/05/16(b) BRL 16,178 6,978,404
12.75%, 1/15/20(b) US$ 6,529 9,075,310
14.50%, 10/15/09(b) 1,775 2,307,500
--------------
Total Brazilian Securities
(cost $147,753,748) 173,921,245
--------------
Canada-14.9%
Canada Real Return
3.00%, 12/01/36(b) CAD 10,819 12,376,106
Government of Canada
3.00%, 6/01/07(b) 47,900 41,002,812
4.25%, 9/01/09(b) 17,283 15,258,399
5.00%, 6/01/14(b) 7,063 6,554,282
5.25%, 6/01/13(b) 38,000 35,681,428
5.75%, 6/01/33(b) 58,674 62,938,906
10.25%, 3/15/14(b) 17,000 21,312,662
Province of Ontario
2.00%, 12/01/36 6,000 5,311,384
5.60%, 6/02/35(b) 6,882 6,759,870
Province of Quebec
5.50%, 12/01/14(b) 30,000 28,198,968
--------------
Total Canadian Securities
(cost $213,502,824) 235,394,817
--------------
8 ALLIANCEBERNSTEIN AMERICAS GOVERNMENT INCOME TRUST
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Portfolio of Investments
Principal
Amount
(000) U.S. $ Value
- --------------------------------------------------------------------------
Colombia-2.0%
Republic of Colombia
8.63%, 4/01/08(b) US$ 3,000 $ 3,252,000
10.75%, 1/15/13(b) 1,330 1,671,145
11.75%, 3/01/10(b) COP 6,027,000 3,050,455
11.75%, 2/25/20(b) US$ 17,000 23,655,500
12.00%, 10/22/15(b) COP 550,000 295,733
--------------
Total Colombian Securities
(cost $23,429,001) 31,924,833
--------------
El Salvador-0.3%
Republic of El Salvador
7.65%, 6/15/35(b)(c) US$ 1,889 1,969,282
8.50%, 7/25/11(c) 1,950 2,247,375
--------------
Total Salvadoran Securities
(cost $3,971,820) 4,216,657
--------------
Jamaica-0.2%
Government of Jamaica
10.63%, 6/20/17(b)
(cost $3,473,193) 3,130 3,474,300
--------------
Mexico-28.3%
Banco Nacional de Comercio
11.00%, 12/10/05(c) MXN 90,000 8,366,645
Mexican Bonos
8.00%, 12/24/08(b) 893,879 82,391,079
8.00%, 12/19/13(b) 784,637 70,320,000
8.00%, 12/07/23(b) 872,057 74,842,305
9.00%, 12/24/09(b) 1,152,011 109,878,534
9.00%, 12/22/11(b) 215,900 20,552,347
9.00%, 12/20/12(b) 120,526 11,473,322
10.00%, 12/05/24(b) 688,690 70,779,731
--------------
Total Mexican Securities
(cost $399,952,225) 448,603,963
--------------
Panama-1.0%
Republic of Panama
9.38%, 4/01/29(b) US$ 616 782,320
9.63%, 2/08/11(b) 1,885 2,252,575
10.75%, 5/15/20(b) 9,250 12,894,500
--------------
Total Panamanian Securities
(cost $12,826,005) 15,929,395
--------------
ALLIANCEBERNSTEIN AMERICAS GOVERNMENT INCOME TRUST 9
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Portfolio of Investments
Principal
Amount
(000) U.S. $ Value
- --------------------------------------------------------------------------
Peru-3.5%
Peru Bono Soberano
8.60%, 8/12/17(b) PEN 22,510 $ 7,349,249
9.91%, 5/05/15(b) 48,440 17,243,075
Republic of Peru
8.38%, 5/03/16(b) US$ 3,900 4,559,100
8.75%, 11/21/33(b) 9,026 10,898,895
9.88%, 2/06/15(b) 11,665 14,902,038
--------------
Total Peruvian Securities
(cost $48,251,347) 54,952,357
--------------
United States-52.6%
Federal Home Loan Mortgage 30 Year TBA
6.50%, 10/01/34 116,950 120,239,219
Federal National Mortgage Association
30 Year TBA
6.50%, 10/01/34 133,685 137,570,153
U.S. Treasury Bonds
1.63%, 1/15/15 (TIPS)(b) 40,605 40,122,323
8.75%, 5/15/17(b) 50,000 69,265,600
8.75%, 5/15/20(b) 20,000 28,865,620
9.13%, 5/15/18(b) 50,000 72,123,050
12.50%, 8/15/14(b)(d) 90,000 116,381,250
U.S. Treasury Strips
8.00%, 11/15/21(b) 350,000 165,279,450
8.75%, 5/15/17(b) 140,000 83,108,200
--------------
Total United States Securities
(cost $785,981,796) 832,954,865
--------------
Uruguay-0.7%
Republic of Uruguay
7.50%, 3/15/15(b) 6,501 6,657,024
9.25%, 5/17/17(b) 451 506,248
17.75%, 2/04/06(b) UYU 73,550 3,268,889
--------------
Total Uruguayan Securities
(cost $7,948,424) 10,432,161
--------------
Venezuela-0.2%
Republic of Venezuela
4.64%, 4/20/11(a)(b) US$ 2,095 2,060,013
5.38%, 8/07/10(b) 125 121,750
8.50%, 10/08/14(b) 1,335 1,481,850
--------------
Total Venezuelan Securities
(cost $3,085,145) 3,663,613
--------------
Total Government/Agency Obligations
(cost $1,663,367,660) 1,828,734,799
--------------
10 ALLIANCEBERNSTEIN AMERICAS GOVERNMENT INCOME TRUST
- -------------------------------------------------------------------------------
Portfolio of Investments
Principal
Amount
(000) U.S. $ Value
- --------------------------------------------------------------------------
SHORT-TERM INVESTMENTS-0.1%
Repurchase Agreement-0.1%
Deutsche Bank
3.70%, dated 9/30/05, due 10/03/05
in the amount of $1,000,308 (cost
$1,000,000; collateralized by
$1,010,000 FNMA, 4.75%,
due 1/02/07, value $1,025,662) $ 1,000 $ 1,000,000
--------------
Total Investments-115.6%
(cost $1,664,367,660) 1,829,734,799
Other assets less liabilities-(15.6%) (246,362,989)
--------------
NET ASSETS-100% $1,583,371,810
==============
CALL OPTIONS WRITTEN (see Note D)
Contracts(e)
(000) U.S. $ Value
- --------------------------------------------------------------------------
Brazilian Real
expiring Oct '05 @ $119.80 3,531 $ (95,337)
Brazilian Real
expiring Oct '05 @ $120.25 3,531 (81,566)
Brazilian Real
expiring Oct '05 @ $120.25 3,240 (76,788)
Brazilian Real
expiring Oct '05 @ $120.30 3,531 (83,332)
Brazilian Real
expiring Oct '05 @ $121.00 3,531 (60,380)
--------------
Total Call Options Written
(premiums received $179,202) $ (397,403)
--------------
FORWARD EXCHANGE CURRENCY CONTRACTS (see Note D)
U.S. $
Contract Value on Value at Unrealized
Amount Origination September 30, Appreciation/
(000) Date 2005 (Depreciation)
- -------------------------------------------------------------------------------
BUY CONTRACTS:
Canadian Dollar,
settling 11/04/05 41,348 $ 34,866,212 $ 35,600,424 $ 734,212
Mexican Peso,
settling 11/10/05 41,348 9,207,057 9,321,930 114,873
SALE CONTRACTS:
Canadian Dollar,
settling
10/14/05-11/04/05 287,046 240,212,520 247,051,115 (6,838,595)
Mexican Peso,
settling
10/19/05-11/21/05 2,765,277 254,084,281 255,753,641 (1,669,360)
ALLIANCEBERNSTEIN AMERICAS GOVERNMENT INCOME TRUST 11
- -------------------------------------------------------------------------------
Portfolio of Investments
FINANCIAL FUTURES CONTRACTS SOLD (see Note D)
U.S. $
Value at
Number of Expiration Original September 30, Unrealized
Type Contracts Month Value 2005 Appreciation
- -------------------------------------------------------------------------------
U.S Treasury Note
Note 10 Yr December
Futures 330 2005 $ 36,630,000 $ 36,274,219 $ 355,781
U.S Treasury Note
Note 10 Yr December
Futures 200 2005 22,203,125 21,984,375 218,750
U.S Treasury Note
Note 10 Yr December
Futures 591 2005 65,637,937 64,963,828 674,109
U.S Treasury Note
Note 10 Yr December
Futures 396 2005 43,983,225 43,529,062 454,163
-----------
$ 1,702,803
-----------
CREDIT DEFAULT SWAP CONTRACTS (see Note D)
Swap
Counterparty Notional Unrealized
& Referenced Amount Interest Termination Appreciation/
Obligation (000) Rate Date (Depreciation)
- -------------------------------------------------------------------------------
BUY CONTRACTS:
Citigroup Global
Markets, Ltd.
Republic of
Colombia
8.375%, 2/15/27 1,700 3.02% 1/20/10 $ (102,720)
Citigroup Global
Markets, Ltd.
Federal Republic
of Brazil
12.25%, 3/06/30 3,970 4.14 4/20/10 (381,616)
Deutsche Bank, AG
London
Federal Republic
of Brazil
12.25%, 3/06/30 3,970 4.02 4/20/10 (342,232)
SALE CONTRACTS:
Citigroup Global
Markets, Ltd.
Republic of
Colombia
8.375%, 2/15/27 3,350 1.13 1/20/07 34,476
Morgan Stanley Capital
Services, Inc.
Federal Republic
of Brazil
12.25%, 3/06/30 1,940 3.80 8/20/06 63,675
12 ALLIANCEBERNSTEIN AMERICAS GOVERNMENT INCOME TRUST
- -------------------------------------------------------------------------------
Portfolio of Investments
Swap
Counterparty Notional Unrealized
& Referenced Amount Interest Termination Appreciation/
Obligation (000) Rate Date (Depreciation)
- -------------------------------------------------------------------------------
SALE CONTRACTS:
(continued)
Citigroup Global
Markets, Ltd.
Federal Republic
of Brazil
12.25%, 3/06/30 2,525 4.40% 5/20/06 $ 105,236
Citigroup Global
Markets, Ltd.
Federal Republic
of Brazil
12.25%, 3/06/30 8,337 1.98 4/20/07 235,312
Deutsche Bank, AG
London
Federal Republic
of Brazil
12.25%, 3/06/30 8,337 1.90 4/20/07 206,132
(a) Coupon rate adjusts on a predetermined schedule to a rate based on a
specific Index. Stated interest rate was in effect at September 30, 2005.
(b) Positions, or a portion thereof, with an aggregate market value of
$1,518,632,624 have been segregated to collateralize forward exchange currency
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 September 30, 2005, the aggregate market value of these securities
amounted to $12,583,302 or 0.8% of net assets.
(d) A portion of this position, with a market value of $1,810,375 has been
segregated to collateralize margin requirements for the open futures contracts.
(e) One contract relates to principal amount of $1.
Glossary of Terms:
FNMA - Federal National Mortgage Association
TBA - (To Be Assigned) - Securities are purchased on a forward
commitment with an appropriate principal amount (generally +/-1.0%) and no
definite maturity date. The actual principal amount and maturity date will be
determined upon settlement when the specific mortgage pools are assigned.
TIPS - Treasury Inflation Protected Security
Currency Abbreviations:
BRL - Brazilian Real
CAD - Canadian Dollar
CLP - Chilean Peso
MXN - Mexican Peso
PEN - Peruvian New Sol
US$ - United States Dollar
UYU - Uruguayan Peso
See notes to financial statements.
ALLIANCEBERNSTEIN AMERICAS GOVERNMENT INCOME TRUST 13
- -------------------------------------------------------------------------------
STATEMENT OF ASSETS & LIABILITIES
September 30, 2005
ASSETS
Investments in securities, at value (cost $1,664,367,660) $1,829,734,799
Cash 862,512
Foreign cash, at value (cost $1,788,476) 1,878,659
Interest receivable 22,930,391
Receivable for investment securities sold 13,025,240
Receivable for capital stock sold 5,560,020
Unrealized appreciation of forward exchange currency
contracts 849,085
Unrealized appreciation of swap contracts 644,831
Receivable for variation margin on futures contracts 497,810
--------------
Total assets 1,875,983,347
--------------
LIABILITIES
Payable for investment securities purchased 272,739,360
Unrealized depreciation of forward exchange currency
contracts 8,507,955
Payable for capital stock redeemed 5,851,639
Dividends payable 2,561,444
Unrealized depreciation on swap contracts 826,568
Advisory fee payable 656,998
Option premiums received 397,403
Transfer Agent fee payable 182,925
Distribution fee payable 125,367
Accrued expenses and other liabilities 761,878
--------------
Total liabilities 292,611,537
--------------
Net Assets $1,583,371,810
==============
COMPOSITION OF NET ASSETS
Capital stock, at par $ 205,900
Additional paid-in capital 1,695,357,779
Distributions in excess of net investment income (47,952,220)
Accumulated net realized loss on investments and foreign
currency transactions (223,369,756)
Net unrealized appreciation of investments and foreign
currency denominated assets and liabilities 159,130,107
--------------
$1,583,371,810
==============
CALCULATION OF MAXIMUM OFFERING PRICE PER SHARE
Net Asset Value and:
---------------------- Maximum
Shares Offering Redemption Offering
Class Net Assets Outstanding Price Price Price *
- -------------------------------------------------------------------------------
A $ 957,697,079 124,588,166 -- $ 7.69 $ 8.03
B $ 373,922,562 48,658,248 $ 7.68 -- --
C $ 251,752,169 32,653,125 $ 7.71 -- --
* The maximum offering price per share for Class A shares includes a sales
charge of 4.25%.
See notes to financial statements.
14 ALLIANCEBERNSTEIN AMERICAS GOVERNMENT INCOME TRUST
- -------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
Year Ended September 30, 2005
INVESTMENT INCOME
Interest (net of foreign taxes
withheld of $77,748) $ 124,568,397
EXPENSES
Advisory fee $ 8,045,244
Distribution fee--Class A 2,825,692
Distribution fee--Class B 4,206,890
Distribution fee--Class C 2,464,625
Transfer agency 2,224,025
Custodian 925,326
Printing 369,884
Proxy solicitation 227,777
Administrative 93,000
Registration 82,166
Legal 79,113
Audit 75,668
Directors' fees 24,276
Miscellaneous 81,092
-----------
Total expenses 21,724,778
Less: expense offset arrangement
(see Note B) (11,698)
-----------
Net expenses 21,713,080
-------------
Net investment income 102,855,317
-------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS AND FOREIGN CURRENCY
TRANSACTIONS
Net realized gain (loss) on:
Investment Transactions 23,309,164
Futures Contracts (1,379,419)
Swap Contracts 278,478
Written Options 1,855,434
Foreign currency transactions (28,698,523)
Net change in unrealized
appreciation/depreciation of:
Investments 69,624,831
Futures Contracts 1,843,397
Swap Contracts (416,819)
Written Options (218,201)
Foreign currency denominated assets
and liabilities 4,227,460
-------------
Net gain on investment and foreign
currency transactions 70,425,802
-------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS $ 173,281,119
=============
See notes to financial statements.
ALLIANCEBERNSTEIN AMERICAS GOVERNMENT INCOME TRUST 15
- -------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
September 30, September 30,
2005 2004
-------------- --------------
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment income $ 102,855,317 $ 119,545,128
Net realized gain (loss) on investments
and foreign currency transactions (4,634,866) 46,529,750
Net change in unrealized
appreciation/depreciation of
investments and foreign currency
denominated assets and liabilities 75,060,668 (89,337,929)
-------------- --------------
Net increase in net assets from
operations 173,281,119 76,736,949
DIVIDENDS TO SHAREHOLDERS FROM
Net investment income
Class A (63,028,146) (71,658,911)
Class B (25,124,988) (37,624,530)
Class C (14,692,112) (17,616,033)
CAPITAL STOCK TRANSACTIONS
Net decrease (171,591,238) (316,892,817)
-------------- --------------
Total decrease (101,155,365) (367,055,342)
NET ASSETS
Beginning of period 1,684,527,175 2,051,582,517
-------------- --------------
End of period (including distributions in
excess of net investment income of
($47,952,220) and ($32,195,412),
respectively) $1,583,371,810 $1,684,527,175
============== ==============
See notes to financial statements.
16 ALLIANCEBERNSTEIN AMERICAS GOVERNMENT INCOME TRUST
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
September 30, 2005
NOTE A
SIGNIFICANT ACCOUNTING POLICIES
AllianceBernstein Americas Government Income Trust, Inc. (the "Fund") was
incorporated as a Maryland corporation on February 3, 1992 and is registered
under the Investment Company Act of 1940 as a non-diversified, open-end
management investment company. The Fund 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 sold currently
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 with respect to its distribution plan. The financial statements have
been prepared in conformity with U.S. generally accepted accounting principles,
which require management to make certain estimates and assumptions that affect
the reported amounts of assets and liabilities in the financial statements and
amounts of income and expenses during the reporting period. Actual results
could differ from those estimates. Additional information about some of the
items discussed in these Notes to Financial Statements is contained in the
Fund's Statement of Additional Information, which is available upon request.
The following is a summary of significant accounting policies followed by the
Fund.
1. SECURITY VALUATION
Portfolio securities are valued at their current market value determined on the
basis of market quotations or, if market quotations are not readily available
or are deemed unreliable, at "fair value" as determined in accordance with
procedures established by and under the general supervision of the Fund's Board
of Directors.
In general, the market value of securities which are readily available and
deemed reliable are determined as follows. Securities listed on a national
securities exchange or on a foreign securities exchange are valued at the last
sale price at the close of the exchange or foreign securities exchange. If
there has been no sale on such day, the securities are valued at the mean of
the closing bid and asked prices on such day. Securities listed on more than
one exchange are valued by reference to the principal exchange on which the
securities are traded; securities not listed on an exchange but traded on The
NASDAQ Stock Market, Inc. ("NASDAQ") 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
ALLIANCEBERNSTEIN AMERICAS GOVERNMENT INCOME TRUST 17
- -------------------------------------------------------------------------------
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. CURRENCY TRANSLATION
Asset and liabilities denominated in foreign currencies and commitments under
forward exchange currency contracts are translated into U.S. dollars at the
mean of the quoted bid and asked prices of such currencies against the U.S.
dollar. Purchases and sales of portfolio securities are translated into U.S.
dollars at the rates of exchange prevailing when such securities were acquired
or sold. Income and expenses are translated into U.S. dollars at the rates of
exchange prevailing when accrued.
Net realized gain or loss on foreign currency transactions represents foreign
exchange gains and losses from sales and maturities of foreign fixed income
investments, foreign currency exchange contracts, holding of foreign
currencies, currency gains or losses realized between the trade and settlement
dates on foreign investment transactions, and the difference between the
amounts of dividends, interest and foreign withholding taxes recorded on the
Fund's books and the U.S. dollar equivalent amounts actually received or paid.
Net unrealized cur-
18 ALLIANCEBERNSTEIN AMERICAS GOVERNMENT INCOME TRUST
- -------------------------------------------------------------------------------
rency gains and losses from valuing foreign currency denominated assets and
liabilities at period end exchange rates are reflected as a component of
unrealized appreciation and depreciation of investments and foreign currency
denominated assets and liabilities.
3. TAXES
It is the Fund's policy to meet the requirements of the Internal Revenue Code
applicable to regulated investment companies and to distribute all of its
investment company taxable income and net realized gains, if any, to
shareholders. Therefore, no provisions for federal income or excise taxes are
required. The Fund may be subject to taxes imposed by countries in which it
invests. Such taxes are generally based on income and/or capital gains earned
or repatriated. Taxes are accrued and applied to net investment income, net
realized gains and net unrealized appreciation/depreciation as such income
and/or gains are earned.
4. INVESTMENT INCOME AND INVESTMENT TRANSACTIONS
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. The Fund accretes discounts and
amortizes premiums as adjustments to interest income.
5. INCOME AND EXPENSES
All income earned and expenses incurred by the Fund are borne on a pro-rata
basis by each settled class of shares, based on the proportionate interest in
the Fund represented by the shares of such class, except that the Fund's Class
B and Class C shares bear higher distribution and transfer agent fees than
Class A shares.
6. 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.
7. REPURCHASE AGREEMENTS
It is the Fund's policy that its custodian or designated subcustodian take
control of securities as collateral under repurchase agreements and to
determine on a daily basis that the value of such securities are sufficient to
cover the value of the repurchase agreements. If the seller defaults and the
value of the collateral declines, or if bankruptcy proceedings are commenced
with respect to seller of the security, realization of collateral by the Fund
may be delayed or limited.
ALLIANCEBERNSTEIN AMERICAS GOVERNMENT INCOME TRUST 19
- -------------------------------------------------------------------------------
8. REVERSE REPURCHASE AGREEMENTS
Under a reverse repurchase agreement, the Fund sells securities and agrees to
repurchase them at a mutually agreed upon date and price. At the time the Fund
enters into a reverse repurchase agreement, it will establish a segregated
account with the custodian containing liquid assets having at least equal to
the repurchase price.
NOTE B
ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Under the terms of the investment advisory agreement, the Fund pays the Adviser
an advisory fee at an annual rate of .50% of the first $2.5 billion, .45% of
the next $2.5 billion and .40% in excess of $5 billion, of the Fund's average
daily adjusted net assets. Prior to September 7, 2004, the Fund paid the
Adviser an advisory fee at an annual rate of .65% of the Fund's average daily
adjusted net assets. The fee is accrued daily and paid monthly.
Effective January 1, 2004 through September 6, 2004, in contemplation of the
final agreement with the office of New York Attorney General ("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.
Pursuant to the advisory agreement, the Fund may reimburse the Adviser for
certain legal and accounting services provided to the Fund by the Adviser. For
the year ended September 30, 2005, such fees amounted to $93,000.
The Fund compensates AGIS, a wholly-owned subsidiary of the Adviser, under a
Transfer Agency Agreement for providing personnel and facilities to perform
transfer agency services for the Fund. AGIS may make payments to intermediaries
that provide omnibus account services, sub-accounting services and/or
networking services. Such compensation retained by AGIS amounted to $1,000,886
for the year ended September 30, 2005.
For the year ended September 30, 2005, the Fund's expenses were reduced by
$11,698 under an expense offset arrangement with AGIS.
AllianceBernstein Investment Research and Management, Inc., (the
"Distributor"), 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 of $94,828 from the sales of Class A
shares and received $6,130, $308,615 and $23,733 in contingent deferred sales
charges imposed upon redemptions by shareholders of Class A, Class B and Class
C shares for the year ended September 30, 2005.
20 ALLIANCEBERNSTEIN AMERICAS GOVERNMENT INCOME TRUST
- -------------------------------------------------------------------------------
NOTE C
DISTRIBUTION SERVICES AGREEMENT
The Fund has adopted a Distribution Services Agreement (the "Agreement")
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the
Agreement the Fund pays distribution and servicing fees to the Distributor at
an annual rate of up to .30% of the average daily net assets attributable to
Class A shares and 1% of the average daily net assets attributable to the Class
B and Class C shares. The 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 incurred expenses in excess of the distribution costs
reimbursed by the Fund in the amounts of $30,264,742 and $8,060,875 for Class B
and Class C shares, respectively; such costs may be recovered from the Fund in
future periods so long as the Agreement is in effect. In accordance with the
Agreement, there is no provision for recovery of unreimbursed distribution
costs incurred by the Distributor beyond the current year for Class A shares.
The Agreement also provides that the Adviser may use its own resources to
finance the distribution of the Fund's shares.
NOTE D
INVESTMENT TRANSACTIONS
Purchases and sales of investment securities (excluding short-term investments)
for the year ended September 30, 2005, were as follows:
Purchases Sales
--------------- ---------------
Investment securities (excluding
U.S. government securities) $ 992,001,380 $ 1,114,116,944
U.S. government securities 66,597,267 168,118,026
At September 30, 2005, the cost of investments for federal income tax purposes,
gross unrealized appreciation and unrealized depreciation (excluding foreign
currency contracts, options written, futures and swap contracts) are as follows:
Cost $ 1,674,030,740
===============
Gross unrealized appreciation $ 176,588,628
Gross unrealized depreciation (20,884,569)
---------------
Net unrealized appreciation $ 155,704,059
===============
1. FINANCIAL FUTURES CONTRACTS
The Fund may buy or sell financial futures contracts for the purpose of hedging
its portfolio against adverse affects of anticipated movements in the market.
The Fund bears 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 future contracts and movements in the price of the securities
hedged or used for cover.
ALLIANCEBERNSTEIN AMERICAS GOVERNMENT INCOME TRUST 21
- -------------------------------------------------------------------------------
At the time the Fund enters into a futures contract, the Fund deposits and
maintains as collateral an initial margin as required by the exchange on which
the transaction is effected. Pursuant to the contract, the Fund agrees 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 Fund as unrealized gains or losses.
Risks may arise from the potential inability of a counterparty to meet the
terms of the contract. When the contract is closed, the Fund records 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.
2. FORWARD EXCHANGE CURRENCY CONTRACTS
The Fund may enter into forward exchange currency contracts in order to hedge
its exposure to changes in foreign currency exchange rates on its foreign
portfolio holdings and to hedge certain firm purchase and sales commitments
denominated in foreign currencies and for investment purposes. A forward
exchange currency contract is a commitment to purchase or sell a foreign
currency on a future date at a negotiated forward rate. The gain or loss
arising from the difference between the original contract and the closing of
such contract would be included in net realized gain or loss on foreign
currency transactions.
Fluctuations in the value of open forward exchange currency contracts are
recorded for financial reporting purposes as unrealized appreciation and
depreciation by the Fund.
The Fund's custodian will place and maintain cash not available for investment
or other liquid assets in a separate account of the Fund having a value at
least equal to the aggregate amount of the Fund's commitments under forward
exchange currency contracts entered into with respect to position hedges.
Risks may arise from the potential inability of the counterparty to meet the
terms of a contract and from unanticipated movements in the value of a foreign
currency relative to the U.S. dollar. The face or contract amount, in U.S.
dollars reflects the total exposure the Fund has in that particular currency
contract.
3. OPTION TRANSACTIONS
For hedging and investment purposes, the Fund may purchase and write (sell) put
and call options on U.S. and foreign government securities and foreign
currencies that are traded on U.S. and foreign securities exchanges and
over-the-counter markets.
The risk associated with purchasing an option is that the Fund pays a premium
whether or not the option is exercised. Additionally, the Fund bears the risk
of loss of premium and change in market value should the counterparty not
perform under the contract. Put and call options purchased are accounted for in
the same manner as portfolio securities. The cost of securities acquired
through the
22 ALLIANCEBERNSTEIN AMERICAS GOVERNMENT INCOME TRUST
- -------------------------------------------------------------------------------
Notes to Financial Statements
exercise of call options is increased by premiums paid. The proceeds from
securities sold through the exercise of put options are decreased by the
premiums paid.
When the Fund writes an option, the premium received by the Fund is recorded as
a liability and is subsequently adjusted to the current market value of the
option written. Premiums received from written options which expire unexercised
are recorded by the Fund on the expiration date as realized gains from options
written. The difference between the premium received and the amount paid on
effecting a closing purchase transaction, including brokerage commissions, is
also treated as a realized gain, or if the premium received is less than the
amount paid for the closing purchase transaction, as a realized loss. If a call
option is exercised, the premium received is added to the proceeds from the
sale of the underlying security or currency in determining whether the Fund has
realized a gain or loss. If a put option is exercised, the premium received
reduces the cost basis of the security or currency purchased by the Fund. In
writing an option, the Fund bears the market risk of an unfavorable change in
the price of the security or currency underlying the written option. Exercise
of an option written by the Fund could result in the Fund selling or buying a
security or currency at a price different from the current market value.
Transactions in written options for the year ended September 30, 2005 were as
follows:
Number of Premium
Contracts Received
--------------- ---------------
OPTIONS OUTSTANDING AT
SEPTEMBER 30, 2004 -0- $ -0-
Options written 122,601,000 (1,548,901)
Options terminated in closing
purchase transactions (7,331,000) 105,217
Options expired (97,906,000) 1,264,482
--------------- ---------------
OPTIONS OUTSTANDING AT
SEPTEMBER 30, 2005 17,364,000 $ (179,202)
--------------- ---------------
4. SWAP AGREEMENTS
The Fund may enter into swaps to hedge its exposure to foreign currency
interest rates and credit risk or for investment purposes. A swap is an
agreement that obligates two parties to exchange a series of cash flows at
specified intervals based upon or calculated by reference to changes in
specified prices or rates for a specified amount of an underlying asset. The
payment flows are usually netted against each other, with the difference being
paid by one party to the other.
Risks may arise as a result of the failure of the counterparty to the swap
contract to comply with the terms of the swap contract. The loss incurred by
the failure of a counterparty is generally limited to the net interim payment
to be received by the Fund, and/or the termination value at the end of the
contract. Therefore, the Fund considers the creditworthiness of each
counterparty to a swap contract in evaluating potential credit risk.
Additionally, risks may arise from unantici-
ALLIANCEBERNSTEIN AMERICAS GOVERNMENT INCOME TRUST 23
- -------------------------------------------------------------------------------
pated movements in interest rates or in the value of the underlying securities
or currencies.
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 Fund accrues 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 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.
The Fund may enter into credit default swaps. The Fund may purchase credit
protection on the referenced obligation of the credit default swap ("Buy
Contract") or provide credit protection on the referenced obligation of the
credit default swap ("Sale Contract"). A sale/(buy) in a credit default swap
provides upon the occurrence of a credit event, as defined in the swap
agreement, for the Fund to buy/(sell) from/(to) the counterparty at the
notional amount (the "Notional Amount") and receive/(deliver) the principal
amount of the referenced obligation. If a credit event occurs, the maximum
payout amount for a Sale Contract is limited to the Notional Amount of the swap
contract ("Maximum Payout Amount"). During the term of the swap agreement, the
Fund receives/(pays) semi-annual fixed payments from/(to) the respective
counterparty, calculated at the agreed upon interest rate applied to the
Notional Amount. These interim payments are recorded within unrealized
appreciation/depreciation of swap contracts on the statement of assets and
liabilities.
Credit default swaps may involve greater risks than if a Fund had invested in
the referenced obligation directly. Credit default swaps are subject to general
market risk, liquidity risk, counterparty risk and credit risk. If the Fund is
a buyer and no credit event occurs, it will lose its investment. In addition,
if the Fund is a seller and a credit event occurs, the value of the referenced
obligation received by the Fund coupled with the periodic payments previously
received, may be less than the Maximum Payout Amount it pays to the buyer,
resulting in a loss to the Fund.
At September 30, 2005, the Fund had Sale Contracts outstanding with Maximum
Payout Amounts aggregating $24,489,000, with net unrealized appreciation of
$644,831 and terms up to two years, as reflected in the portfolio of
investments.
In certain circumstances, the Fund may hold Sale Contracts on the same
referenced obligation and with the same counterparty it has purchased credit
protec-
24 ALLIANCEBERNSTEIN AMERICAS GOVERNMENT INCOME TRUST
- -------------------------------------------------------------------------------
tion, which may reduce its obligation to make payments on Sale Contracts, if a
credit event occurs. The Fund had Buy Contracts outstanding with a Notional
Amount of $9,640,000 with respect to the same referenced obligations and same
counterparties of certain Sale Contracts outstanding, which reduced its
obligation to make payments on Sale Contracts to $14,849,000 as of September
30, 2005.
NOTE E
CAPITAL STOCK
There are 9,000,000,000 shares of $0.001 par value capital stock authorized,
divided into three classes, designated Class A, Class B, and Class C shares.
Each class consists of 3,000,000,000 authorized shares. Transactions in capital
stock were as follows:
Shares Amount
---------------------------- ------------------------------
Year Ended Year Ended Year Ended Year Ended
September 30, September 30, September 30, September 30,
2005 2004 2005 2004
- -------------------------------------------------------------------------------
CLASS A
Shares sold 10,573,774 9,805,711 $ 79,517,459 $ 72,911,900
Shares issued in
reinvestment
of dividends
and distributions 4,082,809 4,359,020 29,916,957 32,291,935
Shares converted
from Class B 7,703,362 11,492,227 57,827,493 85,071,349
Shares redeemed (27,878,859) (36,107,067) (207,952,705) (267,523,898)
Net decrease (5,518,914) (10,450,109) $ (40,690,796) $ (77,248,714)
CLASS B
Shares sold 4,427,842 6,425,112 $ 33,157,946 $ 47,930,119
Shares issued in
reinvestment
of dividends
and distributions 1,674,043 2,281,306 12,443,631 16,918,985
Shares converted
to Class A (7,728,725) (11,492,227) (57,827,493) (85,071,349)
Shares redeemed (14,471,457) (24,720,851) (107,817,977) (183,297,887)
Net decrease (16,098,297) (27,506,660) $ (120,043,893) $ (203,520,132)
CLASS C
Shares sold 3,714,213 4,181,811 $ 27,866,586 $ 31,353,715
Shares issued
in reinvestments
of dividends
and distributions 1,065,900 1,224,520 8,028,962 9,103,868
Shares redeemed (6,246,148) (10,314,487) (46,752,097) (76,581,554)
Net decrease (1,466,035) (4,908,156) $ (10,856,549) $ (36,123,971)
ALLIANCEBERNSTEIN AMERICAS GOVERNMENT INCOME TRUST 25
- -------------------------------------------------------------------------------
NOTE F
SECURITY LENDING
The Fund may make secured loans of portfolio securities to brokers, dealers and
financial institutions, provided that cash, liquid high-grade debt securities
or bank letters of credit equal to at least 100% of the market values of the
securities loaned is deposited and maintained by the borrower with the Fund.
The risks in lending portfolio securities, as with other extensions of credit,
consist of possible loss of rights in the collateral should the borrower fail
financially. In determining whether to lend securities to a particular
borrower, the Adviser will consider all relevant facts and circumstances,
including the creditworthiness of the borrower. While securities are on loan,
the borrower will pay the Fund any income earned thereon and the Fund may
invest any cash collateral in portfolio securities, thereby earning additional
income, or receive an agreed upon amount of income from a borrower who has
delivered equivalent collateral. When such securities are borrowed against
cash, the Fund agrees to pay the borrower of such securities a "rebate rate"
for the use of the cash the borrower has pledged as collateral. As of September
30, 2005, the Fund had no securities on loan.
NOTE G
RISKS INVOLVED IN INVESTING IN THE FUND
Interest Rate Risk and Credit Risk--Interest rate risk is the risk that changes
in interest rates will affect the value of the Fund's investments in
fixed-income debt securities such as bonds or notes. Increases in interest
rates may cause the value of the Fund's investments to decline. Credit risk is
the risk that the issuer or guarantor of a debt security, or the counterparty
to a derivative contract, will be unable or unwilling to make timely principal
and/or interest payments, or to otherwise honor its obligations. The degree of
risk for a particular security may be reflected in its credit risk rating.
Credit risk is greater for medium quality and lower-rated securities.
Lower-rated debt securities and similar unrated securities (commonly known as
"junk bonds") have speculative elements or are predominantly speculative risks.
Concentration of Risk--Investing in securities of foreign companies or foreign
governments involves special risks which include changes in foreign exchange
rates and the possibility of future political and economic developments which
could adversely affect the value of such securities. Moreover, securities of
many foreign companies or foreign governments and their markets may be less
liquid and their prices more volatile than those of comparable United States
companies or of the United States government.
Indemnification Risk--In the ordinary course of business, the Fund enters into
contracts that contain a variety of indemnifications. The Fund's maximum
exposure under these arrangements is unknown. However, the Fund has not had
prior claims or losses pursuant to these indemnification provisions and expects
the risk of loss thereunder to be remote.
26 ALLIANCEBERNSTEIN AMERICAS GOVERNMENT INCOME TRUST
- -------------------------------------------------------------------------------
NOTE H
JOINT CREDIT FACILITY
A number of open-end mutual funds managed by the Adviser, including the Fund,
participate in a $250 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 year ended September 30, 2005.
NOTE I
DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions paid for the year ending September 30, 2005
and September 30, 2004 were as follows:
2005 2004
--------------- ---------------
Distributions paid from:
Ordinary income $ 102,845,246 $ 126,899,474
--------------- ---------------
Total taxable distributions 102,845,246 126,899,474
Tax return of capital -0- -0-
--------------- ---------------
Total distributions paid $ 102,845,246 $ 126,899,474
--------------- ---------------
As of September 30, 2005, the components of accumulated earnings/(deficit) on a
tax basis were as follows:
Undistributed ordinary income $ 24,516,830
Accumulated capital and other losses (289,671,202)(a)
Unrealized appreciation/(depreciation) 155,523,947(b)
---------------
Total accumulated earnings/(deficit) $ 109,630,425(c)
===============
(a) On September 30, 2005, the Fund had a net capital loss carryforward of
$220,209,221, of which $680,821 expires in the year 2008, $206,928,807 expires
in the year 2009 and $12,599,593 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, the Fund utilized capital loss
carryforwards of $11,960,592. As of September 30, 2005, the Fund had deferred
tax straddle losses of $69,461,981.
(b) The difference between book-basis and tax basis unrealized
appreciation/(depreciation) is attributable primarily to the tax deferral of
losses on wash sales, the realization for tax purposes of unrealized
gains/losses on certain derivative instruments, the difference between book and
tax amortization methods for premium and the difference between book and tax
treatment of swap income.
(c) The difference between book-basis and tax-basis components of accumulated
earnings/(deficit) is attributable to dividends payable.
During the current fiscal year, permanent differences, primarily due to the tax
treatment of bond premium, the tax treatment of swap income and the tax
treatment of foreign currency gains and losses, resulted in a net increase in
distributions in excess of net investment income and a decrease in accumulated
net realized loss on investments and foreign currency transactions. This
reclassification had no effect on net assets.
ALLIANCEBERNSTEIN AMERICAS GOVERNMENT INCOME TRUST 27
- -------------------------------------------------------------------------------
NOTE J
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 Adviser provide information to them. The Adviser has been cooperating and
will continue to cooperate with all of these authorities.
On December 18, 2003, the Adviser confirmed that it had reached terms with the
SEC and the NYAG for the resolution of regulatory claims relating to the
practice of "market timing" mutual fund shares in some of the AllianceBernstein
Mutual Funds. The agreement with the SEC is reflected in an Order of the
Commission ("SEC Order"). The agreement with the NYAG is memorialized in an
Assurance of Discontinuance dated September 1, 2004 ("NYAG Order"). Among the
key provisions of these agreements are the following:
(i) The Adviser agreed to establish a $250 million fund (the "Reimbursement
Fund") to compensate mutual fund shareholders for the adverse 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
28 ALLIANCEBERNSTEIN AMERICAS GOVERNMENT INCOME TRUST
- -------------------------------------------------------------------------------
Adviser's Board, is continuing to direct and oversee an internal investigation
and a comprehensive review of the facts and circumstances relevant to the SEC's
and the NYAG's investigations.
In addition, the Independent Directors of the Fund ("the Independent
Directors") have initiated an investigation of the above-mentioned matters with
the advice of an independent economic consultant and independent counsel. The
Independent Directors have formed a special committee to supervise the
investigation.
On October 2, 2003, a purported class action complaint entitled HINDO, ET AL.
V. ALLIANCEBERNSTEIN GROWTH & INCOME FUND, ET AL. ("Hindo Complaint") was filed
against the Adviser, Alliance Capital Management Holding L.P. ("Alliance
Holding"), Alliance Capital Management Corporation, AXA Financial, Inc., the
AllianceBernstein Funds, certain officers of the Adviser ("Alliance
defendants"), and certain other defendants not affiliated with the Adviser, as
well as unnamed Doe defendants. 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 Funds. The Hindo Complaint alleges
that certain of the Alliance 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
generally similar to those in the Hindo Complaint were filed in various federal
and state courts against the Adviser and certain other defendants, and others
may be filed. The plaintiffs in such lawsuits have asserted a variety of
theories for recovery including, but not limited to, violations of the
Securities Act, the Exchange Act, the Advisers Act, the Investment Company Act,
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
certain state securities laws, and common law. On February 20, 2004, the
Judicial Panel on Multidistrict Litigation transferred all federal actions, and
removed all state court actions, to the United States District Court for the
District of Maryland (the "Mutual Fund MDL"). The plaintiffs in the removed
actions have since moved for remand, and that motion is pending.
On September 29, 2004, plaintiffs filed consolidated amended complaints with
respect to four claim types: mutual fund shareholder claims; mutual fund
derivative claims; derivative claims brought on behalf of Alliance Holding; and
claims brought under ERISA by participants in the Profit Sharing Plan for
Employees of the Adviser. All four complaints include substantially identical
factual allega-
ALLIANCEBERNSTEIN AMERICAS GOVERNMENT INCOME TRUST 29
- -------------------------------------------------------------------------------
tions, which appear to be based in large part on the SEC Order and the NYAG
Order. The claims in the mutual fund derivative consolidated amended complaint
are generally based on the theory that all fund advisory agreements,
distribution agreements and 12b-1 plans between the Adviser and the
AllianceBernstein Funds should be invalidated, regardless of whether market
timing occurred in each individual fund, because each was approved by fund
trustees on the basis of materially misleading information with respect to the
level of market timing permitted in funds managed by the Adviser. The claims
asserted in the other three consolidated amended complaints are similar to
those that the respective plaintiffs asserted in their previous federal
lawsuits. All of these lawsuits seek an unspecified amount of damages. The
Alliance defendants have moved to dismiss the complaints, and those motions are
pending.
On February 10, 2004, the Adviser received (i) a subpoena duces tecum from the
Office of the Attorney General of the State of West Virginia and (ii) a request
for information from West Virginia's Office of the State Auditor, Securities
Commission (the "West Virginia Securities Commission") (together, the
"Information Requests"). Both Information Requests require the Adviser to
produce documents concerning, among other things, any market timing or late
trading in the Adviser's sponsored mutual funds. The Adviser responded to the
Information Requests and has been cooperating fully with the investigation.
On April 11, 2005, a complaint entitled THE ATTORNEY GENERAL OF THE STATE OF
WEST VIRGINIA V. AIM ADVISORS, INC., ET AL. ("WVAG Complaint") was filed
against the Adviser, Alliance Holding, and various other defendants not
affiliated with the Adviser. The WVAG Complaint was filed in the Circuit Court
of Marshall County, West Virginia by the Attorney General of the State of West
Virginia. The WVAG Complaint makes factual allegations generally similar to
those in the Hindo Complaint. On May 31, 2005, defendants removed the WVAG
Complaint to the United States District Court for the Northern District of West
Virginia. On July 12, 2005, plaintiff moved to remand. On October 19, 2005, the
WVAG Complaint was transfered to the Mutual Fund MDL.
On August 30, 2005, the deputy commissioner of securities of the West Virginia
Securities Commission signed a "Summary Order to Cease and Desist, and Notice
of Right to Hearing" addressed to the Adviser and Alliance Holding. The Summary
Order claims that the Adviser and Alliance Holding violated the West Virginia
Uniform Securities Act, and makes factual allegations generally similar to
those in the Commission Order and the NYAG Order. The Adviser intends to
vigorously defend against the allegations in the WVAG Complaint.
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 pro-
30 ALLIANCEBERNSTEIN AMERICAS GOVERNMENT INCOME TRUST
- -------------------------------------------------------------------------------
vide for sufficient liquidity and could also have an adverse effect on the
investment performance of the AllianceBernstein Mutual Funds.
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. On October 19,
2005, the District Court granted in part, and denied in part, defendants'
motion to dismiss the Aucoin Complaint and as a result the only claim remaining
is plaintiffs' Section 36(b) claim.
It is possible that these matters and/or other developments resulting from
these matters could result in increased redemptions of the AllianceBernstein
Mutual Funds' shares or other adverse consequences to the AllianceBernstein
Mutual Funds. 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 AllianceBernstein Mutual Funds.
ALLIANCEBERNSTEIN AMERICAS GOVERNMENT INCOME TRUST 31
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class A
---------------------------------------------------------------------
Year Ended December
September 30, 1, 2002 to Year Ended November 30,
-------------------- September ---------------------------------
2005 2004(a) 30, 2003(b) 2002(c) 2001 2000
---------------------------------------------------------------------
Net asset value,
beginning of period $ 7.35 $ 7.54 $ 6.86 $ 7.07 $ 7.55 $ 7.28
---------------------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS
Net investment income(d) .50 .50(e) .44 .56 .77 .75
Net realized and unrealized
gain (loss) on investment
and foreign currency
transactions .34 (.16) .73 (.11) (.50) .34
---------------------------------------------------------------------
Net increase in net asset value
from operations .84 .34 1.17 .45 .27 1.09
---------------------------------------------------------------------
LESS: DIVIDENDS AND
DISTRIBUTIONS
Dividends from net investment
income (.50) (.53) (.49) (.60) (.75) (.49)
Tax return of capital -0- -0- -0- (.06) -0- (.33)
---------------------------------------------------------------------
Total dividends and distributions (.50) (.53) (.49) (.66) (.75) (.82)
---------------------------------------------------------------------
Net asset value, end of period $ 7.69 $ 7.35 $ 7.54 $ 6.86 $ 7.07 $ 7.55
=====================================================================
TOTAL RETURN
Total investment return based
on net asset value(f) 11.83% 4.72% 17.48% 6.69% 3.32% 15.80%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $957,697 $956,690 $1,060,244 $947,300 $1,009,606 $979,126
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.05% 1.25% 1.49%(g) 1.57% 1.96% 2.26%
Expenses, before waivers/
reimbursements 1.05% 1.41% 1.49%(g) 1.57% 1.96% 2.26%
Expenses, before waivers/
reimbursements excluding
interest expense 1.05% 1.27% 1.26%(g) 1.28% 1.23% 1.33%
Net investment income 6.78% 6.80%(e) 7.28%(g) 8.19% 10.07% 10.03%
Portfolio turnover rate 66% 76% 60% 160% 315% 234%
See footnote summary on page 35.
32 ALLIANCEBERNSTEIN AMERICAS GOVERNMENT INCOME TRUST
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class B
---------------------------------------------------------------------
Year Ended December
September 30, 1, 2002 to Year Ended November 30,
-------------------- September ---------------------------------
2005 2004(a) 30, 2003(b) 2002(c) 2001 2000
---------------------------------------------------------------------
Net asset value,
beginning of period $ 7.35 $ 7.54 $ 6.86 $ 7.07 $ 7.58 $ 7.31
---------------------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS
Net investment income(d) .44 .45(e) .40 .51 .69 .69
Net realized and unrealized
gain (loss) on investment
and foreign currency
transactions .33 (.16) .73 (.11) (.50) .36
---------------------------------------------------------------------
Net increase in net asset value
from operations .77 .29 1.13 .40 .19 1.05
---------------------------------------------------------------------
LESS: DIVIDENDS AND
DISTRIBUTIONS
Dividends from net investment
income (.44) (.48) (.45) (.55) (.70) (.48)
Tax return of capital -0- -0- -0- (.06) -0- (.30)
---------------------------------------------------------------------
Total dividends and distributions (.44) (.48) (.45) (.61) (.70) (.78)
---------------------------------------------------------------------
Net asset value, end of period $ 7.68 $ 7.35 $ 7.54 $ 6.86 $ 7.07 $ 7.58
=====================================================================
TOTAL RETURN
Total investment return based
on net asset value(f) 11.04% 3.98% 16.84% 5.92% 2.20% 14.99%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $373,923 $476,171 $696,043 $740,782 $888,457 $826,340
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.77% 1.98% 2.21%(g) 2.28% 2.66% 2.93%
Expenses, before waivers/
reimbursements 1.77% 2.15% 2.21%(g) 2.28% 2.66% 2.93%
Expenses, before waivers/
reimbursements excluding
interest expense 1.77% 1.99% 1.98%(g) 2.00% 1.94% 2.03%
Net investment income 5.82% 6.07%(e) 6.59%(g) 7.47% 9.06% 9.37%
Portfolio turnover rate 66% 76% 60% 160% 315% 234%
See footnote summary on page 35.
ALLIANCEBERNSTEIN AMERICAS GOVERNMENT INCOME TRUST 33
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class C
---------------------------------------------------------------------
Year Ended December
September 30, 1, 2002 to Year Ended November 30,
-------------------- September ---------------------------------
2005 2004(a) 30, 2003(b) 2002(c) 2001 2000
---------------------------------------------------------------------
Net asset value,
beginning of period $ 7.38 $ 7.57 $ 6.88 $ 7.09 $ 7.58 $ 7.31
---------------------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS
Net investment income(d) .44 .45(e) .40 .52 .71 .70
Net realized and unrealized
gain (loss) on investment
and foreign currency
transactions .34 (.16) .74 (.12) (.50) .35
---------------------------------------------------------------------
Net increase in net asset value
from operations .78 .29 1.14 .40 .21 1.05
---------------------------------------------------------------------
LESS: DIVIDENDS AND
DISTRIBUTIONS
Dividends from net investment
income (.45) (.48) (.45) (.55) (.70) (.47)
Tax return of capital -0- -0- -0- (.06) -0- (.31)
---------------------------------------------------------------------
Total dividends and distributions (.45) (.48) (.45) (.61) (.70) (.78)
---------------------------------------------------------------------
Net asset value, end of period $ 7.71 $ 7.38 $ 7.57 $ 6.88 $ 7.09 $ 7.58
=====================================================================
TOTAL RETURN
Total investment return based
on net asset value(f) 10.87% 3.97% 16.94% 5.91% 2.48% 14.99%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $251,752 $251,666 $295,295 $277,015 $310,985 $267,646
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.76% 1.96% 2.20%(g) 2.27% 2.65% 2.95%
Expenses, before waivers/
reimbursements 1.76% 2.12% 2.20%(g) 2.27% 2.65% 2.95%
Expenses, before waivers/
reimbursements excluding
interest expense 1.76% 1.97% 1.97%(g) 1.99% 1.93% 2.03%
Net investment income 5.88% 6.07%(e) 6.56%(g) 7.45% 9.34% 9.35%
Portfolio turnover rate 66% 76% 60% 160% 315% 234%
See footnote summary on page 35.
34 ALLIANCEBERNSTEIN AMERICAS GOVERNMENT INCOME TRUST
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(a) As of October 1, 2003, the Fund has 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. The effect of this change for
the fiscal year ended September 30, 2004, was to decrease net investment income
per share by $0.0002 for Class A, B and C and increase net realized and
unrealized gain (loss) on investment transactions per share by $0.0002 for
Class A, B and C. Consequently, the ratios of net investment income to average
net assets were decreased by 0.003% for Class A, B and C respectively.
(b) The Fund changed its fiscal year end from November 30 to September 30.
(c) As required, effective December 1, 2001, the Fund has adopted the
provisions of the AICPA Audit and Accounting Guide, Audits of Investment
Companies, and began amortizing premium on debt securities for financial
statement reporting purposes only. The effect of this change for the year ended
November 30, 2002 was to decrease net investment income per share by $.04,
decrease net realized and unrealized loss on investments per share by $.04 for
Class A, B and C, respectively, and decrease the ratio of net investment income
to average net assets from 8.83% to 8.19% for Class A, from 8.10% to 7.47% for
Class B and from 8.09% to 7.45% for Class C. Per share, ratios and supplemental
data for periods prior to December 1, 2001 have not been restated to reflect
this change in presentation.
(d) Based on average shares outstanding.
(e) Net of waivers/reimbursement by the Adviser.
(f) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period. Initial sales charges or contingent
deferred sales charges are not reflected in the calculation of total investment
return. Total return does not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares. Total
investment return calculated for a period of less than one year is not
annualized.
(g) Annualized.
ALLIANCEBERNSTEIN AMERICAS GOVERNMENT INCOME TRUST 35
- -------------------------------------------------------------------------------
REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
TO THE SHAREHOLDERS AND BOARD OF DIRECTORS OF ALLIANCEBERNSTEIN AMERICAS
GOVERNMENT INCOME TRUST, INC.
We have audited the accompanying statement of assets and liabilities of
AllianceBernstein Americas Government Income Trust, Inc. (the "Fund"),
including the portfolio of investments, as of September 30, 2005, and the
related statement of operations for the year then ended, the statement of
changes in net assets applicable to common shareholders for each of the two
years in the period then ended, and the financial highlights for each of the
five years in the period then ended. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material
misstatement. We were not engaged to perform an audit of the Fund's internal
control over financial reporting. Our audits included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Fund's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights, assessing the accounting
principles used and significant estimates made by management, and evaluating
the overall financial statement presentation. Our procedures included
confirmation of securities owned as of September 30, 2005 by correspondence
with the custodian and others or by other appropriate auditing procedures where
replies from others were not received. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
AllianceBernstein Americas Government Income Trust, Inc. at September 30, 2005,
the results of its operations for the year then ended, the changes in its net
assets applicable to common shareholders for each of the two years in the
period then ended, and the financial highlights for each of the five years in
the period then ended, in conformity with U.S. generally accepted accounting
principles.
/s/ Ernst & Young LLP
New York, New York
November 16, 2005
36 ALLIANCEBERNSTEIN AMERICAS GOVERNMENT INCOME TRUST
- -------------------------------------------------------------------------------
BOARD OF DIRECTORS
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)
D. James Guzy
Marshall C. Turner, Jr.
OFFICERS(2)
Philip L. Kirstein, Senior Vice President and Independent Compliance Officer
Paul J. DeNoon, Vice President
Scott DiMaggio, Vice President
Michael L. Mon, Vice President
Douglas J. Peebles, Vice President
Emilie D. Wrapp, Secretary
Mark D. Gersten, Treasurer and Chief Financial Officer
Vincent S. Noto, Controller
Custodian
Brown Brothers Harriman & Co.
40 Water Street
Boston, MA 02109
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
Transfer Agent
Alliance Global Investor Services, Inc.
P.O. Box 786003
San Antonio, TX 78278-6003
Toll-free (800) 221-5672
Independent Registered
Public Accounting Firm
Ernst & Young LLP
5 Times Square
New York, NY 10036
(1) Member of the Audit Committee, Governance and Nominating Committee and
Independent Directors Committee.
(2) The day-to-day management of and investment decisions for the Fund's
investment portfolio are made by the Global Fixed Income Investment Team,
comprised of senior Global Fixed Income Team members.
ALLIANCEBERNSTEIN AMERICAS GOVERNMENT INCOME TRUST 37
- -------------------------------------------------------------------------------
MANAGEMENT OF THE FUND
BOARD OF DIRECTORS INFORMATION
The business and affairs of the Fund are managed under the direction of the
Board of Directors. Certain information concerning the Fund's Directors is set
forth below.
PORTFOLIOS
IN FUND OTHER
NAME, ADDRESS, PRINCIPAL COMPLEX DIRECTORSHIPS
DATE OF BIRTH OCCUPATION(S) OVERSEEN BY HELD BY
(YEAR ELECTED*) DURING PAST 5 YEARS DIRECTOR DIRECTOR
- ----------------------------------------------------------------------------------------------------------------------
INTERESTED DIRECTOR
Marc O.Mayer, + Executive Vice President of Alliance 81 SCB Partners
1345 Avenue of the Capital Management Corporation Inc., SCB, Inc.
Americas, ("ACMC") since 2001 and Chairman
New York, NY 10105 of the Board of AllianceBernstein
10/2/57 Investment Research and Management,
(2003) Inc. ("ABIRM") since 2000; prior
thereto, Chief Executive Officer of
Sanford C. Bernstein &Co., LLC
(institutional research and brokerage
arm of Bernstein & Co., LLC ("SCB
& Co.")) and its predecessor since
prior to 2000.
DISINTERESTED DIRECTORS
William H. Foulk, Jr., #, ** Investment adviser and an inde- 108 None
2 Sound View Drive pendent consultant. He was
Suite 100 formerly Senior Manager of Barrett
Greenwich, CT 06830 Associates, Inc., a registered
9/7/32 investment adviser, with which
(1992) he had been associated since prior
Chairman of the Board to 2000. He was formerly Deputy
Comptroller and Chief Investment
Officer of the State of New York and,
prior thereto, Chief Investment
Officer of the New York Bank for
Savings.
Ruth Block, #, ++ Formerly Executive Vice President 106 None
500 SE Mizner Blvd. and Chief Insurance Officer of The
Boca Raton, FL 33432 Equitable Life Assurance Society
11/7/30 of the United States; Chairman and
(1992) Chief Executive Officer of Evlico
(insurance); Director of Avon, BP (oil
and gas), Ecolab Incorporated (spe-
cialty chemicals), Tandem Financial
Group and Donaldson, Lufkin &
Jenrette Securities Corporation;
Governor at Large, National
Association of Securities Dealers,
Inc.
38 ALLIANCEBERNSTEIN AMERICAS GOVERNMENT INCOME TRUST
- -------------------------------------------------------------------------------
MANAGEMENT OF THE FUND
PORTFOLIOS
IN FUND OTHER
NAME, ADDRESS, PRINCIPAL COMPLEX DIRECTORSHIPS
DATE OF BIRTH OCCUPATION(S) OVERSEEN BY HELD BY
(YEAR ELECTED*) DURING PAST 5 YEARS DIRECTOR DIRECTOR
- ----------------------------------------------------------------------------------------------------------------------
David H. Dievler, # Independent consultant. Until 107 None
P.O. Box 167 December 1994, he was Senior
Spring Lake, NJ 07762 Vice President of ACMC
10/23/29 responsible for mutual fund
(1992) administration. Prior to joining
ACMC in 1984, he was Chief
Financial Officer of Eberstadt Asset
Management since 1968. Prior to
that, he was a Senior Manager at
Price Waterhouse & Co. Member of
American Institute of Certified Public
Accountants since 1953.
John H. Dobkin, # Consultant. Formerly President 106 None
P.O. Box 12 of Save Venice, Inc. (preservation
Annandale, NY 12504 organization) from 2001-2002,
2/19/42 a Senior Advisor from June
(1992) 1999-June 2000 and President
of Historic Hudson Valley (historic
preservation) from December 1989-
May 1999. Previously, Director of the
National Academy of Design and
during 1988-1992, he was Director
and Chairman of the Audit Committee
of ACMC.
Michael J. Downey, # Consultant since January 2004. 81 Asia Pacific
c/o Alliance Capital Formerly managing partner of Fund, Inc.,
Management L.P. Lexington Capital, LLC (investment and The
Attn: Philip L. Kirstein advisory firm) from December 1997 Merger Fund
1345 Avenue of the until December 2003. Prior thereto,
Americas Chairman and CEOof Prudential
New York, NY 10105 Mutual Fund Management from
1/26/44 1987 to 1993.
(2005)
D. James Guzy Chairman of the Board of PLX 58 Intel Corporation
P.O. Box 128 Technology (semi-conductors) (semi-conductors),
Glenbrook, NV 89413 and of SRC Computers, Inc. Cirrus Logic
3/7/36 with which he has been associated Corporation,
(2005) since prior to 2000. He is also (semi-conductors),
President of the Arbor Company Novellus
(private family investments). Corporation
(semi-conductor
equipment),
Micro Component
Technology
(semi-conductor
equipment), the
Davis Selected
Advisers Group
of Mutual Funds
and LogicVision
ALLIANCEBERNSTEIN AMERICAS GOVERNMENT INCOME TRUST 39
- -------------------------------------------------------------------------------
MANAGEMENT OF THE FUND
PORTFOLIOS
IN FUND OTHER
NAME, ADDRESS, PRINCIPAL COMPLEX DIRECTORSHIPS
DATE OF BIRTH OCCUPATION(S) OVERSEEN BY HELD BY
(YEAR ELECTED*) DURING PAST 5 YEARS DIRECTOR DIRECTOR
- ----------------------------------------------------------------------------------------------------------------------
Marshall C. Turner, Jr. Principal of Turner Venture 58 Toppan
220 Montgomery Street Associates (venture capital Photomasks, Inc.,
Penthouse 10 and consulting) since prior to the George
San Francisco, CA 2000. Chairman and CEO, Lucas
94104 DuPont Photomasks, Inc., Educational
10/10/41 Austin, Texas, 2003-2005, Foundation,
(2005) and President and CEO Chairman of the
since company acquired, and Board of the
name changed to Toppan Smithsonian's
Photomasks, Inc. in 2005 National
(semiconductor manufacturing Museum of
services). Natural History
* There is no stated term of office for the Fund's directors.
# Member of the Audit Committee, Governance & Nominating Committee and
Independent Directors Committee.
** Member of the Fair Value Pricing Committee.
+ Mr. Mayer is an "interested person", as defined in the 1940 Act, due to his
position as Executive Vice President of ACMC.
++ Ms. Block was an "interested person", as defined in the 1940 Act, from July
22, 1992 until October 21, 2004 by reason of her ownership of securities of a
control person of the Adviser. Ms. Block received shares of The Equitable
Companies Incorporated ("Equitable") as part of the demutualization of The
Equitable Life Assurance Society of the United States in 1992. Ms. Block's
Equitable shares were subsequently converted through a corporate action into
American Depositary Shares of AXA, which were sold for approximately $2,400 on
October 21, 2004. Equitable and AXA are control persons of the Adviser.
40 ALLIANCEBERNSTEIN AMERICAS GOVERNMENT INCOME TRUST
- -------------------------------------------------------------------------------
MANAGEMENT OF THE FUND
OFFICER INFORMATION
Certain information concerning the Fund's Officers is listed below.
NAME, ADDRESS* AND POSITION(S) PRINCIPAL OCCUPATION
DATE OF BIRTH HELD WITH FUND DURING PAST 5 YEARS**
- ----------------------------------------------------------------------------------------------------------------------
Marc O.Mayer, President and Chief See biography above.
10/2/57 Executive Officer
Philip L. Kirstein, Senior Vice President Senior Vice President and Independent
5/29/45 & Independent Compliance Officer of the
Compliance Officer AllianceBernstein Funds with which he
has been associated since October
2004. Prior thereto, he was Of Counsel
to Kirkpatrick & Lockhart, LLP from
October 2003 to October 2004, and
General Counsel of Merrill Lynch
Investment Managers, L.P. since prior to
2000 until March 2003.
Paul J. DeNoon, Vice President Senior Vice President of ACMC,** with
4/18/62 which he has been associated since prior
to 2000.
Scott DiMaggio, Vice President Vice President of ACMC,** with which he
8/9/71 has been associated since prior to 2000.
Michael L. Mon, Vice President Vice President of ACMC,** with which
3/2/69 he has been associated since prior to
June 2000.
Douglas J. Peebles, Vice President Executive Vice President of ACMC,** with
8/10/65 which he has been associated since
prior to 2000.
Emilie D. Wrapp, Secretary Senior Vice President, Assistant General
11/13/55 Counsel and Assistant Secretary of
ABIRM** with which she has been
associated since prior to 2000.
Mark D. Gersten, Treasurer and Chief Senior Vice President of Alliance Global
10/4/50 Financial Officer Investor Services Inc. ("AGIS"),** and
Vice President of ABIRM,** with which he
has been associated since prior to 2000.
Vincent S. Noto, Controller Vice President of AGIS,** with which
12/14/64 he has been associated since prior to
2000.
* The address for each of the Fund's Officers is 1345 Avenue of the Americas,
New York, NY 10105.
** ACMC, ABIRM, and AGIS are affiliates of the Fund.
The Fund's Statement of Additional Information ("SAI") has additional
information about the Fund's Directors and Officers and is available without
charge upon request. Contact your financial representative or Alliance Capital
at 1-800-227-4618 for a free prospectus or SAI.
ALLIANCEBERNSTEIN AMERICAS GOVERNMENT INCOME TRUST 41
- -------------------------------------------------------------------------------
INFORMATION REGARDING THE REVIEW AND APPROVAL OF THE FUND'S ADVISORY AGREEMENT
The Fund's disinterested directors (the "directors") unanimously approved the
continuance of the Advisory Agreement between the Fund and the Adviser at a
meeting held on September 14 and 16, 2005.
In preparation for the meeting, the directors had requested from the Adviser
and evaluated extensive materials, including performance and expense
information for other investment companies with similar investment objectives
derived from data compiled by Lipper Inc. ("Lipper"), which is not affiliated
with the Adviser. The directors also reviewed an independent evaluation from
the Fund's Senior Officer (who is also the Fund's Independent Compliance
Officer) of the reasonableness of the advisory fees in the Fund's Advisory
Agreement (as contemplated by the Assurance of Discontinuance between the
Adviser and the New York Attorney General) wherein the Senior Officer concluded
that such fees were reasonable. In addition, the directors received a
presentation from the Adviser and had an opportunity to ask representatives of
the Adviser various questions relevant to the proposed approval. The directors
noted that the Senior Officer's evaluation considered the following factors:
management fees charged to institutional and other clients of the Adviser for
like services; management fees charged by other mutual fund companies for like
services; cost to the Adviser and its affiliates of supplying services pursuant
to the Advisory Agreement, excluding any intra-corporate profit; profit margins
of the Adviser and its affiliates from supplying such services; possible
economies of scale as the Fund grows larger; and nature and quality of the
Adviser's services including the performance of the Fund.
Prior to voting, the directors reviewed the proposed continuance of the
Advisory Agreement with management and with experienced counsel who are
independent of the Adviser and received a memorandum from such counsel
discussing the legal standards for their consideration of the proposed
continuance. The directors also discussed the proposed continuance in four
private sessions at which only the directors, their independent counsel and the
Fund's Independent Compliance Officer were present. In reaching their
determinations relating to continuance of the Advisory Agreement, the directors
considered all factors they believed relevant, including the following:
1. information comparing the performance of the Fund to other investment
companies with similar investment objectives and to an index;
2. the nature, extent and quality of investment, compliance, administrative
and other services rendered by the Adviser;
42 ALLIANCEBERNSTEIN AMERICAS GOVERNMENT INCOME TRUST
- -------------------------------------------------------------------------------
3. payments received by the Adviser from all sources in respect of the Fund
and all investment companies in the AllianceBernstein Funds complex;
4. the costs borne by, and profitability of, the Adviser and its affiliates
in providing services to the Fund and to all investment companies in the
AllianceBernstein Funds complex;
5. comparative fee and expense data for the Fund and other investment
companies with similar investment objectives;
6. the extent to which economies of scale would be realized to the extent
the Fund grows and whether fee levels reflect any economies of scale for the
benefit of investors;
7. the Adviser's policies and practices regarding allocation of portfolio
transactions of the Fund, including the extent to which the Adviser benefits
from soft dollar arrangements;
8. information about "revenue sharing" arrangements that the Adviser has
entered into in respect of the Fund;
9. portfolio turnover rates for the Fund compared to other investment
companies with similar investment objectives;
10. fall-out benefits which the Adviser and its affiliates receive from
their relationships with the Fund;
11. The Adviser's representation that it does not advise other clients with
substantially similar investment objectives and strategies as the Fund;
12. The Senior Officer's evaluation of the reasonableness of the fee payable
to the Adviser in the Advisory Agreement.
13. the professional experience and qualifications of the Fund's portfolio
management team and other senior personnel of the Adviser; and
14. the terms of the Advisory Agreement.
The directors also considered their knowledge of the nature and quality of the
services provided by the Adviser to the Fund gained from their experience as
directors or trustees of most of the funds advised by the Adviser, their
overall confidence in the Adviser's integrity and competence they have gained
from that experience and the Adviser's responsiveness to concerns raised by
them in the past, including the Adviser's willingness to consider and implement
organiza-
ALLIANCEBERNSTEIN AMERICAS GOVERNMENT INCOME TRUST 43
- -------------------------------------------------------------------------------
tional and operational changes designed to improve investment results and the
services provided to the AllianceBernstein Funds.
In their deliberations, the directors did not identify any particular
information that was all-important or controlling, and each director attributed
different weights to the various factors.
The directors determined that the overall arrangements between the Fund and the
Adviser, as provided in the Advisory Agreement, were fair and reasonable in
light of the services performed, expenses incurred and such other matters as
the directors considered relevant in the exercise of their business judgment.
The material factors and conclusions that formed the basis for the directors
reaching their determinations to approve the continuance of the Advisory
Agreement (including their determinations that the Adviser should continue to
be the investment adviser for the Fund, and that the fees payable to the
Adviser pursuant to the Advisory Agreement are appropriate) were separately
discussed by the directors.
NATURE, EXTENT AND QUALITY OF SERVICES PROVIDED BY THE ADVISER
The directors noted that, under the Advisory Agreement, the Adviser, subject to
the control of the directors, administers the Fund's business and other
affairs. The Adviser manages the investment of the assets of the Fund,
including making purchases and sales of portfolio securities consistent with
the Fund's investment objective and policies. Under the Advisory Agreement, the
Adviser also provides the Fund with such office space, administrative and other
services (exclusive of, and in addition to, any such services provided by any
others retained by the Fund) and executive and other personnel as are necessary
for the Fund's operations. The Adviser pays all of the compensation of
directors of the Fund who are affiliated persons of the Adviser and of the
officers of the Fund.
The directors also considered that the Advisory Agreement provides that the
Fund will reimburse the Adviser for the cost of certain clerical, accounting,
administrative and other services provided at the Fund's request by employees
of the Adviser or its affiliates. Requests for these "at no more than cost"
reimbursements are approved by the directors on a quarterly basis and (to the
extent requested and paid) result in a higher rate of total compensation from
the Fund to the Adviser than the fee rates stated in the Fund's Advisory
Agreement.
The directors considered the scope and quality of services provided by the
Adviser under the Advisory Agreement and noted that the scope of services
provided by advisers of funds had expanded over time as a result of regulatory
and other developments. The directors noted, for example, that the Adviser is
responsible for maintaining and monitoring its own and, to varying degrees, the
Fund's compliance programs, and that these compliance programs have recently
44 ALLIANCEBERNSTEIN AMERICAS GOVERNMENT INCOME TRUST
- -------------------------------------------------------------------------------
been refined and enhanced in light of new regulatory requirements. The
directors considered the quality of the in-house investment research
capabilities of the Adviser and the other resources it has dedicated to
performing services for the Fund. The quality of administrative and other
services, including the Adviser's role in coordinating the activities of the
Fund's other service providers, also were considered. The directors also
considered the Adviser's response to recent regulatory compliance issues
affecting a number of the investment companies in the AllianceBernstein Funds
complex. The directors concluded that, overall, they were satisfied with the
nature, extent and quality of services provided to the Fund under the Advisory
Agreement.
COSTS OF SERVICES PROVIDED AND PROFITABILITY TO THE ADVISER
The directors reviewed a schedule of the revenues, expenses and related notes
indicating the profitability of the Fund to the Adviser for calendar years 2003
and 2004. The directors reviewed the assumptions and methods of allocation used
by the Adviser in preparing fund-specific profitability data, and noted the
Adviser's representation to them that it believed that the methods of
allocation used in preparing the profitability information were reasonable and
appropriate and that the Adviser had previously discussed with the directors
that there is no generally accepted allocation methodology for information of
this type. The directors also noted that the methodology for preparing
fund-by-fund profitability information was being reviewed and that it was
expected that an updated methodology would be used in 2005, and that it would
differ in various respects from the methodology used in 2004 and in prior years.
The directors recognized that it is difficult to make comparisons of
profitability from fund advisory contracts because comparative information is
not generally publicly available and is affected by numerous factors, including
the structure of the particular adviser, the types of funds it manages, its
business mix, numerous assumptions regarding allocations and the adviser's
capital structure and cost of capital. In considering profitability
information, the directors considered the effect of fall-out benefits on the
Adviser's expenses, as well as the "revenue sharing" arrangements the Adviser
has entered into with certain entities that distribute shares of the Fund. The
directors focused on the profitability of the Adviser's relationship with the
Fund before taxes and distribution expenses. The directors recognized that the
Adviser should generally be entitled to earn a reasonable level of profits for
the services it provides to the Fund and, based on their review, concluded that
they were satisfied that the Adviser's level of profitability from its
relationship with the Fund was not excessive.
FALL-OUT BENEFITS
The directors considered that the Adviser benefits from soft dollar
arrangements whereby it receives brokerage and research services from many of
the brokers and dealers that execute purchases and sales of securities on
behalf of its clients on an agency basis. The directors noted that since the
Fund does not engage in bro-
ALLIANCEBERNSTEIN AMERICAS GOVERNMENT INCOME TRUST 45
- -------------------------------------------------------------------------------
kerage transactions, the Adviser does not receive soft dollar benefits in
respect of portfolio transactions of the Fund.
The directors also considered that the Distributor, which is a wholly-owned
subsidiary of the Adviser: receives 12b-1 fees from the Fund in respect of
classes of shares of the Fund that are subject to the Fund's 12b-1 plan;
retains a portion of the 12b-1 fees from the Fund; and receives all or a
portion of the sales charges on sales or redemptions of certain classes of
shares. The directors also noted that certain affiliates of the Adviser
distribute shares of the Fund and receive compensation in that connection and
that a subsidiary of the Adviser provides transfer agency services to the Fund
and receives compensation from the Fund for such services.
The directors recognized that the Adviser's profitability would be somewhat
lower if the Adviser's affiliates did not receive the benefits described above.
The directors also believe that the Adviser derives reputational and other
benefits from its association with the Fund.
INVESTMENT RESULT
In addition to the information reviewed by the directors in connection with the
meeting, the directors receive detailed comparative performance information for
the Fund at each regular Board meeting during the year. At the meeting, the
directors reviewed information from a report prepared by Lipper showing
performance of the Class A Shares of the Fund as compared to a group of 9 to 6
funds (depending on the year) in its Lipper category selected by Lipper (the
"Performance Group") and as compared to a universe of 20 to 12 funds (depending
on the year) in its Lipper category selected by Lipper (the "Performance
Universe") for periods ended May 31, 2005 over the 1-, 3-, 5- and 10-year
periods. The directors also reviewed information prepared by the Adviser
showing performance of the Class A Shares of the Fund as compared to a
composite index (consisting of 50% JP Morgan Emerging Markets Bond Index Plus
Latin Only and 50% Lehman Brothers Government Bond Index) for periods ending
May 31, 2005 over the year to date ("YTD"), 1-, 3-, 5- and 10-year periods. The
directors noted that in the Performance Group comparison the Fund was in the
first quintile in all periods reviewed except in the 3-year period when the
Fund was in the second quintile and in the Performance Universe comparison the
Fund was in the first quintile in the 1- and 10-year periods and in the second
quintile in the 3- and 5-year periods. The comparative information showed that
the Fund underperformed the composite index in the 1- and 3-year periods and
outperformed the composite index in the YTD, 5- and 10-year periods. Based on
their review, the directors concluded that the Fund's relative performance over
time was satisfactory.
46 ALLIANCEBERNSTEIN AMERICAS GOVERNMENT INCOME TRUST
- -------------------------------------------------------------------------------
ADVISORY FEES AND OTHER EXPENSES
The directors considered the advisory fee rate paid by the Fund to the Adviser
and information prepared by Lipper concerning fee rates paid by other funds in
the same Lipper category as the Fund at a common asset level. The directors
recognized that it is difficult to make comparisons of advisory fees because
there are variations in the services that are included in the fees paid by
other funds.
The directors reviewed information in the Adviser's Form ADV and noted that it
charged institutional clients lower fees for advising comparably sized accounts
using strategies that differ from those of the Fund but which involve
investments in fixed income securities. They had previously received an oral
presentation from the Adviser that supplemented the information in the Form ADV.
The Adviser reviewed with the directors the significant differences in the
scope of services it provides to institutional clients and to the Fund. For
example, the Advisory Agreement requires the Adviser to provide, in addition to
investment advice, office facilities and officers (including officers to
provide required certifications). The Adviser also coordinates the provision of
services to the Fund by non-affiliated service providers and is responsible for
the compensation of the Fund's Independent Compliance Officer and certain
related expenses. The provision of these non-advisory services involves costs
and exposure to liability. The Adviser explained that many of these services
normally are not provided to non-investment company clients, and that fees
charged to the Fund reflect the costs and risks of the additional obligations.
The Adviser also noted that since the Fund is constantly issuing and redeeming
its shares, it is more difficult to manage than an institutional account, where
the assets are relatively stable. In light of these facts, the directors did
not place significant weight on these fee comparisons.
The directors also considered the total expense ratio of the Class A shares of
the Fund in comparison to the fees and expenses of funds within two comparison
groups of funds in the same Lipper category created by Lipper: an Expense Group
and an Expense Universe. Lipper described an Expense Group as a representative
sample of comparable funds and an Expense Universe as a broader group,
consisting of all funds in the Fund's investment classification/objective with
a similar load type as the Fund. The Class A expense ratio of the Fund was
based on the Fund's latest fiscal year expense ratio, adjusted to show the
effect of the new lower contractual advisory fees implemented in January 2004.
The directors recognized that the expense ratio information for the Fund
potentially reflected on the Adviser's provision of services, as the Adviser is
responsible for coordinating services provided to the Fund by others. The
directors noted that it was likely that the expense ratios of some funds in the
Fund's Lipper category also were lowered by waivers or reimbursements by those
funds' investment advisers, which in some cases were voluntary and perhaps
temporary.
ALLIANCEBERNSTEIN AMERICAS GOVERNMENT INCOME TRUST 47
- -------------------------------------------------------------------------------
The information reviewed by the directors showed that the Fund's at approximate
current size contractual effective fee rate of 50 basis points was materially
lower than the Expense Group median. The directors noted that the latest fiscal
year administrative expense reimbursement by the Fund pursuant to the Advisory
Agreement was 1 basis point. The directors also noted that the Adviser advises
another AllianceBernstein fund with a similar investment objective and
strategies as the Fund for the same fee rate as the Fund. The directors further
noted that the Fund's total expense ratio was somewhat lower than the medians
for the Expense Group and the Expense Universe. The directors concluded that
the Fund's expense ratio was satisfactory.
ECONOMIES OF SCALE
The directors noted that the advisory fee schedule for the Fund contains
breakpoints so that, if assets were to increase over the breakpoint levels, the
fee rates would be reduced on the incremental assets. The directors also
considered a presentation by an independent consultant discussing economies of
scale issues in the mutual fund industry. The directors believe that economies
of scale are realized (if at all) by the Adviser across a variety of products
and services, and not only in respect of a single fund. The directors noted
that there is no uniform methodology for establishing breakpoints that give
effect to fund-specific services provided by the Adviser and to the economies
of scale that the Adviser may realize in its overall mutual fund business or
those components of it which directly or indirectly affect the Fund's
operations. The directors observed that in the mutual fund industry as a whole,
as well as among funds similar to the Fund, there is no uniformity or pattern
in the fees and asset levels at which breakpoints (if any) apply. Depending on
the age and size of a particular fund and its adviser's cost structure,
different conclusions can be drawn as to whether there are economies of scale
to be realized at any particular level of assets, notwithstanding the intuitive
conclusion that such economies exist, or will be realized at some level of
total assets. Moreover, because different advisers have different cost
structures and service models, it is difficult to draw meaningful conclusions
from the comparison of a fund's advisory fee breakpoints with those of
comparable funds. The directors also noted that the advisory agreements for
many funds do not have breakpoints at all. Having taken these factors into
account, the directors concluded that the Fund's breakpoint arrangements would
result in a sharing of economies of scale in the event of a very significant
increase in the Fund's net assets.
48 ALLIANCEBERNSTEIN AMERICAS GOVERNMENT INCOME TRUST
- -------------------------------------------------------------------------------
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
Global Health Care Fund*
Global Research Growth Fund
Global Technology Fund*
Greater China '97 Fund
International Growth Fund*
International Research Growth 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. On June 24, 2005,
All-Asia Investment Fund merged into International Research GrowthFund. On July
8, 2005, New Europe Fund merged into International Research 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 AMERICAS GOVERNMENT INCOME TRUST 49
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THE FOLLOWING IS NOT PART OF THE SHAREHOLDER REPORT OR THE FINANCIAL STATEMENTS
SUMMARY OF SENIOR OFFICER'S EVALUATION OF INVESTMENT ADVISORY AGREEMENT(1)
The following is a summary of the evaluation of the investment advisory
agreement between Alliance Capital Management L.P. (the "Adviser") and
AllianceBernstein Americas Government Income Trust, Inc. (the "Fund"), prepared
by Philip L. Kirstein, the Senior Officer, for the independent directors of the
Fund, as required by the Assurance of Discontinuance between the New York State
Attorney General and the Adviser. The Senior Officer's evaluation of the
investment advisory agreement is not meant to diminish the responsibility or
authority of the Board of Directors of the Fund to perform their duties
pursuant to Section 15 of the Investment Company Act of 1940 (the "40 Act") and
applicable state law. The purpose of the summary is to provide shareholders
with a synopsis of the independent evaluation of the reasonableness of the
advisory fees which was provided to the independent directors in connection
with their review of the proposed continuance of the investment advisory
agreement. The Senior Officer's evaluation considered the following factors:
1. Management fees charged to institutional and other clients of the Adviser
for like services.
2. Management fees charged by other mutual fund companies for like services.
3. Costs to the Adviser and its affiliates of supplying services pursuant to
the advisory agreement, excluding any intra-corporate profit.
4. Profit margins of the Adviser and its affiliates from supplying such
services.
5. Possible economies of scale as the Fund grows larger.
6. Nature and quality of the Adviser's services including the performance of
the Fund.
FUND ADVISORY FEES, EXPENSE REIMBURSEMENTS & RATIOS
The table below describes the Fund's advisory fee pursuant to the Investment
Advisory Agreement. This is the fee schedule the Adviser implemented in January
2004 as a result of the settlement with the New York State Attorney General.(2)
(1) It should be noted that the information in the fee summary was completed
on September 2, 2005 and presented to the Board of Directors on September 14,
2005 in accordance with the Assurance of Discontinuance between the New York
State Attorney General and the Adviser. It also should be noted that references
in the fee summary pertaining to performance and expense ratios refer to Class
A shares of the Fund.
(2) The advisory fee schedule implemented in January 2004 contemplates eight
categories of the AllianceBernstein Mutual Funds with all AllianceBernstein
Funds in each category having the same advisory fee schedule.
50 ALLIANCEBERNSTEIN AMERICAS GOVERNMENT INCOME TRUST
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Advisory Fee Based on % of
Fund Average Daily Net Assets
- -------------------------------------------------------------------------------
AllianceBernstein Americas Government
Income Trust, Inc. First $2.5 billion 0.50%
Next $2.5 billion 0.45%
Excess of $5 billion 0.40%
The Adviser is reimbursed as specified in the Investment Advisory Agreement for
certain clerical, legal, accounting, administrative and other services provided
to the Fund as indicated below:
As a %
of average
Fund Amount daily net assets
- -------------------------------------------------------------------------------
AllianceBernstein Americas Government
Income Trust, Inc. $104,000 0.01
The table below shows the Fund's expense ratio calculated from the beginning of
the Fund's current fiscal year through May 31, 2005.
Fund Expense Ratio(3) Fiscal Year End
- -------------------------------------------------------------------------------
AllianceBernstein Americas
Government Income Trust, Inc Class A 1.02% September 30
Class B 1.74%
Class C 1.73%
I. MANAGEMENT FEES CHARGED TO INSTITUTIONAL AND OTHER CLIENTS
The management fees charged to investment companies which the Adviser manages
and sponsors is normally higher than those charged to similar sized
institutional accounts, including pension plans and sub-advised investment
companies. The fee differential reflects, among other things, different
services provided to such clients, and different liabilities assumed. Services
provided by the Adviser to the Fund that are not provided to non-investment
company clients include providing office space and personnel to serve as Fund
Officers, who among other responsibilities make the certifications required
under the Sarbanes-Oxley Act of 2002, and coordinating with and monitoring the
Fund's third party service providers such as Fund counsel, auditors,
custodians, transfer agents and pricing services. The accounting,
administrative, legal and compliance requirements for the Fund are more costly
than those for institutional assets due to the greater complexities and time
required for investment companies, although as previously noted, a portion of
these expenses are reimbursed by the Fund to the Adviser. In addition, managing
the cash flow of an investment company may be more difficult than that of a
stable pool of assets, such as an institutional account with little cash
movement in either direction, particularly, if the Fund is in net redemption
(3) This is the expense ratio calculated from the beginning of the Fund's
current fiscal year through May 31, 2005.
ALLIANCEBERNSTEIN AMERICAS GOVERNMENT INCOME TRUST 51
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and the Adviser is frequently forced to sell securities to raise cash for
redemptions. However, managing a fund with positive cash flow may be easier at
times than managing a stable pool of assets. Finally, in recent years,
investment advisers have been sued by institutional clients and have suffered
reputational damage both by the attendant publicity and outcomes other than
complete victories. Accordingly, the legal and reputational risks associated
with institutional accounts are greater than previously thought, although still
not equal to those related to the mutual fund industry.
Notwithstanding the Adviser's view that managing an investment company is not
comparable to managing other institutional accounts because the services
provided are different, it is worth considering information regarding the
advisory fees charged to institutional accounts with substantially similar
investment styles as the Fund. However, with respect to the Fund the Adviser
represented that there are no institutional products which have a substantially
similar investment style as the Fund.
The Adviser also manages and sponsors retail mutual funds which are organized
in jurisdictions outside the United States, generally Luxembourg, and sold to
non-United States resident investors. The Adviser charges the following fee for
an offshore mutual fund that invests in fixed income securities:
Asset Class Fee(4)
- -------------------------------------------------------------------------------
Fixed Income 0.65%
The Adviser represented that it does not sub-advise any registered investment
companies of other fund families with a similar investment style as the Fund.
II. MANAGEMENT FEES CHARGED BY OTHER MUTUAL FUND COMPANIES FOR LIKE SERVICES.
Lipper, Inc., an analytical service that is not affiliated with the Adviser,
compared the fees charged to the Fund with fees charged to other investment
companies for similar services by other investment advisers. Lipper's analysis
included the Fund's ranking with respect to the proposed management fees
relative to the Lipper group median at the approximate current asset level of
the Fund.(5)
(4) The fee charged to the fund includes a 0.10% fee for administrative
services.
(5) It should be noted that "effective management fee" is calculated by
Lipper using the Fund's contractual management fee rate at a hypothetical asset
level. The hypothetical asset level is based on the combined net assets of all
classes of the Fund, rounded up to the next $25 million. Lipper's total expense
ratio information is based on the most recent annual report except as otherwise
noted. A ranking of "1" means that the AllianceBernstein Fund has the lowest
effective fee rate in the Lipper peer group.
52 ALLIANCEBERNSTEIN AMERICAS GOVERNMENT INCOME TRUST
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Effective Lipper
Management Group
Fund Fee(6) Median Rank
- -------------------------------------------------------------------------------
AllianceBernstein Americas
Government Income Trust, Inc. 0.500 0.587 2/9
Lipper also analyzed the expense ratio of the Fund in comparison to its Lipper
Expense Group(7) and Lipper Expense Universe(8). Lipper describes a Lipper
Expense Group as a representative sample of comparable funds, consisting of all
funds in the investment classification/objective with a similar load type as
the subject Fund. The Lipper Expense Universe is a broader collection of funds.
The results of that analysis are set forth below:
Lipper Lipper Lipper Lipper
Expense Universe Universe Group Group
Fund Ratio(9) Median Rank Median Rank
- -------------------------------------------------------------------------------
AllianceBernstein Americas
Government Income
Trust, Inc.(10) 1.254 1.254 11/19 1.262 3/9
Based on this analysis the Fund has a more favorable ranking on an advisory fee
basis than on a total expense ratio basis. This has resulted in a variety of
efforts by the Adviser to lower non-management expenses.
III. COSTS TO THE ADVISER AND ITS AFFILIATES OF SUPPLYING SERVICES PURSUANT TO
THE MANAGEMENT FEE ARRANGEMENT, EXCLUDING ANY INTRA-CORPORATE PROFIT.
The profitability information for the Fund prepared by the Adviser for the
Board of Directors was reviewed by the Senior Officer. An independent
consultant is working with the Adviser's personnel on a new system to produce
profitability information at the Fund level which will reflect the Adviser's
management
(6) It should be noted that the "effective management fee" rate for the Fund
does not reflect the payments by the Fund to the Adviser for certain clerical,
legal, accounting, administrative and other services. The dollar amount and
basis point impact of such payments on the Fund is discussed in Section I.
(7) Lipper uses the following criteria in screening funds to be included in
each Fund's Expense Group: fund type, investment classification/objective, load
type and similar 12b-1/non-12b-1 service fees, asset (size) comparability, and
expense components and attributes. An Expense Group will typically consist of
seven to twenty funds.
(8) Except for asset (size) comparability and load type, Lipper uses the same
criteria for selecting an Expense Group when selecting an Expense Universe.
Unlike an Expense Group, an Expense Universe allows for the same adviser to be
represented by more than just one fund.
(9) Most recent fiscal year end Class A share expense ratio.
(10) Lipper estimated the Fund's pro-forma expense ratio to be 1.167 which
would rank the Fund 8/19 for the Lipper Expense Universe and 1/9 for the Lipper
Expense Group. The pro-forma expense ratio information shows what would have
been the Fund's expense ratio in the indicated fiscal year had the current
investment advisory fee been in effect throughout the fiscal year.
ALLIANCEBERNSTEIN AMERICAS GOVERNMENT INCOME TRUST 53
- -------------------------------------------------------------------------------
reporting approach. It is possible that future Fund profitability information
may differ from previously reviewed information due to changes in methodologies
and allocations. See Section IV for additional discussion.
IV. PROFIT MARGINS OF THE ADVISER AND ITS AFFILIATES FOR SUPPLYING SUCH
SERVICES.
The Adviser's profitability from providing investment advisory services to the
Fund decreased during calendar 2004 relative to 2003 primarily as a result of
the reduction in the advisory fee schedule implemented early in 2004.
In addition to the Adviser's direct profits from managing the Fund, certain of
the Adviser's affiliates have business relationships with the Fund and may earn
a profit from providing other services to the Fund. The courts have referred to
this type of business opportunity as "fall-out benefits" to the Adviser and
indicated that they should be factored into the evaluation of the total
relationship between the Fund and the Adviser. Neither case law nor common
business practice precludes the Adviser's affiliates from earning a reasonable
profit on this type of relationship. These affiliates provide transfer agent
and distribution services to the Fund and receive transfer agent fees, Rule
12b-1 payments, front-end sales loads and contingent deferred sales charges
("CDSC"). Additional information regarding distribution related fees can be
found in the prospectus of the Fund.
The Adviser's affiliate, AllianceBernstein Investment Research and Management,
Inc. ("ABIRM"), is the Fund's principal underwriter. ABIRM and the Adviser have
disclosed in the Fund's prospectus that they may make payments(11) from their
own resources, in addition to resources derived from sales loads and Rule 12b-1
fees, to firms that sell shares of the Fund. In 2004, ABIRM paid approximately
0.04% of the average monthly assets of the AllianceBernstein Mutual Funds for
distribution services and educational support. For 2005, it is anticipated,
ABIRM will pay approximately 0.04% of the average monthly assets of the Fund
for such purposes.
After payments to third party intermediaries, ABIRM retained the following
amount in Class A front-end load sales charge from sales of the Fund's shares
in the Fund's most recent fiscal year.
Fund Amount Received
- -------------------------------------------------------------------------------
AllianceBernstein Americas Government
Income Trust, Inc. $ 89,244
(11) The total amount paid to the financial intermediary in connection with
the sale of shares will generally not exceed the sum of (a) .25% of the current
year's Fund sales by that firm and (b) .10% of the average daily net assets
attributable to that firm over the year.
54 ALLIANCEBERNSTEIN AMERICAS GOVERNMENT INCOME TRUST
- -------------------------------------------------------------------------------
ABIRM received the amounts set forth below in Rule 12b-1 fees and CDSC for the
Fund during the Fund's most recent fiscal year. A significant percentage of
such amounts were paid out to third party intermediaries by ABIRM.
12b-1 Fees
Fund Received CDSC Received
- -------------------------------------------------------------------------------
AllianceBernstein Americas Government
Income Trust, Inc. $ 11,526,993 $ 863,604
Fees and reimbursements for out of pocket expenses charged by Alliance Global
Investor Services, Inc. ("AGIS"), the affiliated transfer agent, are based on
the level of the network account and the class of share held by the account.
AGIS also receives a fee per shareholder sub-account for each account
maintained by an intermediary on an omnibus basis. AGIS' after-tax
profitability decreased in 2004 in comparison to 2003.
AGIS received the following fee from the Fund in the most recent fiscal year:
Fund AGIS Fee
- -------------------------------------------------------------------------------
AllianceBernstein Americas Government Income Trust, Inc. $ 1,356,072
V. POSSIBLE ECONOMIES OF SCALE
The Adviser has indicated that the breakpoints in the fee schedule in the
Investment Advisory Agreement reflect a sharing of economies of scale to the
extent the breakpoints are reached. Based on some of the professional
literature that has considered economies of scale in the mutual fund industry
it is thought that to the extent economies of scale exist, they may more often
exist across a fund family as opposed to a specific fund. This is because the
costs incurred by the Adviser, such as investment research or technology for
trading or compliance systems can be spread across a greater asset base as the
fund family increases in size. It is also possible that as the level of
services required to operate a successful investment company has increased over
time, and advisory firms have made such investments in their business to
provide improved services, there may be a sharing of economies of scale without
a reduction in advisory fees.
An independent consultant made a presentation to the Board of Directors and the
Senior Officer regarding possible economies of scale or scope in the mutual
fund industry. Based on the presentation, it was evident that fund management
companies benefit from economies of scale. However, due to lack of cost data,
researchers had to infer facts about the costs from the behavior of fund
expenses; there was a lack of consensus among researchers as to whether
economies of scale were being passed on to the shareholders. It is contemplated
that additional work will be performed to determine if the benefits of
economies of scale or scope are being passed to shareholders by the Adviser. In
the meantime, it is clear that to the extent the Fund's assets exceed the
initial breakpoint its shareholders benefit from a lower fee rate.
ALLIANCEBERNSTEIN AMERICAS GOVERNMENT INCOME TRUST 55
- -------------------------------------------------------------------------------
VI. NATURE AND QUALITY OF THE ADVISER'S SERVICES INCLUDING THE PERFORMANCE OF
THE FUND.
With assets under management of $516 billion as of June 30, 2005, the Adviser
has the investment experience to manage and provide non-investment services
(described in Section II) to the Fund.
The information prepared by Lipper showed the 1, 3, 5 and 10 year performance
ranking of the Fund(12) relative to its Lipper group and universe for the
periods ended May 31, 2005:
AllianceBernstein Americas
Government Income Trust, Inc. Group Universe
- -------------------------------------------------------------------------------
1 year 2/9 4/20
3 year 3/9 6/20
5 year 2/6 4/14
10 year 1/6 1/12
Set forth below are the 1, 3, 5, 10 year and since inception performance
returns of the Fund (in bold)(13) versus its benchmarks(14).
Periods Ending May 31, 2005
Annualized Performance
- -------------------------------------------------------------------------------
1 3 5 10 Since
Funds Year Year Year Year Inception
- -------------------------------------------------------------------------------
AllianceBernstein Americas Government
Income Trust, Inc. 12.57 11.57 9.71 12.01 9.10
JP Morgan EMBI Plus Latin Only Index 22.32 17.78 10.35 12.89 N/A
Lehman Brothers Gov't Bond Index 6.48 5.70 7.31 6.65 7.05
Composite (50% JPM EMBI
Latin Only, 50% LB Gov't Bond Ind) 14.40 11.74 8.83 9.77 N/A
CONCLUSION:
Based on the factors discussed above the Senior Officer's conclusion is that
the proposed fee for the Fund is reasonable and within the range of what would
have been negotiated at arms-length in light of all the surrounding
circumstances. This conclusion in respect of the Fund is based on an evaluation
of all of these factors and no single factor was dispositive.
Dated: October 12, 2005
(12) The performance rankings are for the Class A shares of the Fund.
(13) The Fund's performance returns are for the Class A shares of the Fund.
(14) The Adviser provided Fund and benchmark performance return information
for periods through May 31, 2005 in order to maintain consistency with Lipper's
performance rankings in the analysis.
56 ALLIANCEBERNSTEIN AMERICAS GOVERNMENT INCOME TRUST
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- -------------------------------------------------------------------------------
ALLIANCEBERNSTEIN AMERICAS GOVERNMENT INCOME TRUST
1345 Avenue of the Americas
New York, NY 10105
(800) 221-5672
[LOGO] ALLIANCEBERNSTEIN (SM)
Investment Research and Management
AAGITAR0905
ITEM 2. CODE OF ETHICS.
(a) The registrant has adopted a code of ethics that applies to its principal
executive officer, principal financial officer and principal accounting
officer. A copy of the registrant's code of ethics is filed herewith as
Exhibit 12(a)(1).
(b) During the period covered by this report, no material amendments were made
to the provisions of the code of ethics adopted in 2(a) above.
(c) During the period covered by this report, no implicit or explicit waivers
to the provisions of the code of ethics adopted in 2(a) above were granted.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The registrant's Board of Directors has determined that independent directors
David H. Dievler and William H. Foulk, Jr. qualify as audit committee financial
experts.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) - (c) The following table sets forth the aggregate fees billed by the
independent registered public accounting firm Ernst & Young LLP, for the Fund's
last two fiscal years for professional services rendered for: (i) the audit of
the Fund's annual financial statements included in the Fund's annual report to
stockholders; (ii) assurance and related services that are reasonably related
to the performance of the audit of the Fund's financial statements and are not
reported under (i), which include advice and education related to accounting
and auditing issues, quarterly press release review (for those Funds that issue
press releases), and preferred stock maintenance testing (for those Funds that
issue preferred stock); and (iii) tax compliance, tax advice and tax return
preparation.
Audit-Related
Audit Fees Fees Tax Fees
---------- ------------- --------
2004 $54,000 $3,290 $24,804
2005 $56,000 $4,257 $18,304
(d) Not applicable.
(e) (1) Beginning with audit and non-audit service contracts entered into on or
after May 6, 2003, the Fund's Audit Committee policies and procedures require
the pre-approval of all audit and non-audit services provided to the Fund by
the Fund's independent auditors. The Fund's Audit Committee policies and
procedures also require pre-approval of all audit and non-audit services
provided to the Adviser and Service Affiliates to the extent that these
services are directly related to the operations or financial reporting of the
Fund.
(e) (2) All of the amounts for Audit Fees, Audit-Related Fees and Tax Fees in
the table under Item 4 (a) - (c) are for services pre-approved by the Fund's
Audit Committee.
(f) Not applicable.
(g) The following table sets forth the aggregate non-audit services provided to
the Fund, the Fund's Adviser and entities that control, are controlled by or
under common control with the Adviser that provide ongoing services to the
Fund, which include conducting an annual internal control report pursuant to
Statement on Auditing Standards No. 70 ("Service Affiliates"):
Total Amount of
Foregoing Column Pre-
approved by the Audit
All Fees for Committee
Non-Audit Services (Portion Comprised of
Provided to the Audit Related Fees)
Portfolio, the Adviser (Portion Comprised of
and Service Affiliates Tax Fees)
---------------------- ---------------------
2004 $1,229,826 [ $278,094 ]
( $253,290 )
( $24,804 )
2005 $897,457 [ $190,264 ]
( $171,960 )
( $18,304 )
(h) The Audit Committee of the Fund has considered whether the provision of any
non-audit services not pre-approved by the Audit Committee provided by the
Fund's independent auditor to the Adviser and Service Affiliates is compatible
with maintaining the auditor's independence.
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. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable to the registrant.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable to the registrant.
ITEM 10. 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 11. 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 changes in the registrant's internal controls over financial
reporting that occurred during the second fiscal quarter of the period that has
materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
ITEM 12. EXHIBITS.
The following exhibits are attached to this Form N-CSR:
EXHIBIT NO. DESCRIPTION OF EXHIBIT
12 (a) (1) Code of Ethics that is subject to the disclosure of Item 2
hereof
12 (b) (1) Certification of Principal Executive Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
12 (b) (2) Certification of Principal Financial Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
12 (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 Americas Government Income Trust, Inc.
By: /s/ Marc O. Mayer
-------------------
Marc O. Mayer
President
Date: November 29, 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: November 29, 2005
By: /s/ Mark D. Gersten
-------------------
Mark D. Gersten
Treasurer and Chief Financial Officer
Date: November 29, 2005