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: 811-06730
ALLIANCEBERNSTEIN LARGE-CAP GROWTH FUND, INC.
(Exact name of registrant as specified in charter)
1345 Avenue of the Americas, New York, New York 10105
(Address of principal executive offices) (Zip code)
Mark R. Manley
Alliance Capital Management L.P.
1345 Avenue of the Americas
New York, New York 10105
(Name and address of agent for service)
Registrant's telephone number, including area code: (800) 221-5672
Date of fiscal year end: July 31, 2006
Date of reporting period: January 31, 2006
ITEM 1. REPORTS TO STOCKHOLDERS.
AllianceBernstein Large Cap Growth Fund
Semi-Annual Report
January 31, 2006
[LOGO]
ALLIANCEBERNSTEIN
INVESTMENTS
SEMI-ANNUAL REPORT
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(R) at (800) 227-4618. Please read the prospectus carefully
before you invest.
You may obtain performance information current to the most recent month-end by
visiting www.alliancebernstein.com.
This shareholder report must be preceded or accompanied by the Fund's
prospectus for individuals who are not current shareholders of the Fund.
You may obtain a description of the Fund's proxy voting policies and
procedures, and information regarding how the Fund voted proxies relating to
portfolio securities during the most recent 12-month period ended June 30,
without charge. Simply visit AllianceBernstein's web site at
www.alliancebernstein.com, or go to the Securities and Exchange Commission's
(the "Commission") web site at www.sec.gov, or call AllianceBernstein at (800)
227-4618.
The Fund files its complete schedule of portfolio holdings with the Commission
for the first and third quarters of each fiscal year on Form N-Q. The Fund's
Forms N-Q are available on the Commission's web site at www.sec.gov. The Fund's
Forms N-Q may also be reviewed and copied at the Commission's Public Reference
Room in Washington, DC; information on the operation of the Public Reference
Room may be obtained by calling (800) SEC-0330. AllianceBernstein publishes
full portfolio holdings for the Fund monthly at www.alliancebernstein.com.
AllianceBernstein Investments, Inc. is an affiliate of AllianceBernstein L.P.,
the manager of the funds, and is a member of the NASD.
AllianceBernstein(R) and the AB Logo are registered trademarks and service
marks used by permission of the owner, AllianceBernstein L.P.
March 13, 2006
Semi-Annual Report
This report provides management's discussion of fund performance for
AllianceBernstein Large Cap Growth Fund (the "Fund") for the semi-annual
reporting period ended January 31, 2006.
Investment Objective and Policies
This open-end fund seeks long-term growth of capital by investing predominately
in the securities of a limited number of large, carefully selected,
high-quality U.S. companies that are judged likely to achieve superior earnings
growth. Normally, about 40 to 60 companies will be represented in the Fund's
portfolio, with the 25 most highly regarded of these usually constituting 70%
of the Fund's net assets.
Investment Results
The table on page 4 shows the Fund's performance compared to its benchmark, the
Russell 1000 Growth Index, for the six- and 12-month periods ended January 31,
2006. For comparison to the overall market, returns for the Standard & Poor's
(S&P) 500 Stock Index, a common measure of the broad U.S. stock market, have
also been provided.
For both the six- and 12-month periods ended January 31, 2006, the Fund
significantly outperformed its benchmark, the Russell 1000 Growth Index,
primarily due to better stock selection.
For the six-month period under review, the Fund gained over 5% and 2% relative
to its benchmark in the technology and consumer discretionary sectors,
respectively, entirely due to outstanding stock selection. In addition, the
Fund outperformed its benchmark by approximately 1% in both the financial
services and health care sectors due to strong stock selection. The Fund gained
over 1% relative to its benchmark in the energy sector primarily due to
overweighting this best performing sector in the Index for the reporting period.
For the 12-month period ended January 31, 2006, the Fund gained over 7% and 2%
relative to its benchmark in the technology and consumer discretionary sectors,
respectively, entirely due to outstanding stock selection. In addition, the
Fund gained over 2% relative to its benchmark in the health care sector and
modestly outperformed its benchmark in the financial services sector, again
entirely due to better stock selection. The Fund gained almost 2% relative to
its benchmark in the energy sector primarily due to overweighting this best
performing sector in its benchmark for the 12-month period ended January 31,
2006.
Market Review and Investment Strategy
The fundamentals of the U.S. economy and corporate profitability were at odds
with the performance of the equity markets in both 2005 and 2004. Based upon
consensus estimates, 2005 earnings for the S&P 500 Stock Index companies will
be up almost 14% year-over-year, yet the Index was up less than 5%. In 2004,
earnings growth was 20%, but the Russell 1000 Growth Index gained only 6%.
After two consecutive years of price-to-earnings multiple compression, the
Russell 1000
ALLIANCEBERNSTEIN LARGE CAP GROWTH FUND o 1
Growth Index closed the year at 16.4 times estimated 2005 earnings, its lowest
price-to-earnings ratio in 10 years.
Gross domestic product (GDP) growth fell off significantly to 1.1% in the
fourth quarter of 2005. The consensus expects a rebound in the first quarter of
2006, but not to the previous level of about 4%. Historically, growth stocks
have tended to outperform value stocks during periods of decelerating economic
growth. That may be the case in the coming months, since the premium for growth
stocks relative to the broad market is as low as it has been in 25 years. It
remains to be seen whether growth's outperformance over the past three quarters
is any indication that the market is in the early innings of a growth cycle.
As of January 31, 2006, relative to the Russell 1000 Growth Index, the Fund was
overweighted in the energy, financial services, health care, technology and
consumer discretionary sectors and underweighted in the producer durables,
consumer staples, materials and processing, auto and transportation and
utilities sectors.
2 o ALLIANCEBERNSTEIN LARGE CAP GROWTH FUND
HISTORICAL PERFORMANCE
An Important Note About the Value of Historical Performance
The performance shown on the following pages represents past performance and
does not guarantee future results. Current performance may be lower or higher
than the performance information shown. You may obtain performance information
current to the most recent month-end by visiting www.alliancebernstein.com.
The investment return and principal value of an investment in the Fund will
fluctuate, so that your shares, when redeemed, may be worth more or less than
their original cost. You should consider the investment objectives, risks,
charges and expenses of the Fund carefully before investing. For a free copy of
the Fund's prospectus, which contains this and other information, visit our web
site at www.alliancebernstein.com or call your financial advisor or
AllianceBernstein at (800) 227-4618. You should read the prospectus carefully
before you invest.
Returns are annualized for periods longer than one year. All fees and expenses
related to the operation of the Fund have been deducted. NAV returns do not
reflect sales charges; if sales charges were reflected, the Fund's quoted
performance would be lower. SEC returns reflect the applicable sales charges
for each share class: a 4.25% maximum front-end sales charge for Class A
shares; the applicable contingent deferred sales charge for Class B shares (4%
year 1, 3% year 2, 2% year 3, 1% year 4); a 1% 1 year contingent deferred sales
charge for Class C shares. Returns for the different share classes will vary
due to different expenses associated with each class. Performance assumes
reinvestment of distributions and does not account for taxes.
Benchmark Disclosure
Neither the unmanaged Russell 1000 Growth Index nor the unmanaged Standard &
Poor's (S&P) 500 Stock Index reflects fees and expenses associated with the
active management of a mutual fund portfolio. The Russell 1000 Growth Index
contains those securities in the Russell 1000 Index with a greater-than-average
growth orientation. The unmanaged Russell 1000 Index is comprised of 1000 of
the largest capitalized companies that are traded in the United States. The S&P
500 Stock Index is comprised of 500 U.S. companies and is a common measure of
the performance of the overall U.S. stock market. An investor cannot invest
directly in an index, and its results are not indicative of the performance for
any specific investment, including the Fund.
A Word About Risk
The Fund concentrates its investments in a limited number of issues and an
investment in the Fund is therefore subject to greater risk and volatility than
investments in a more diversified portfolio. Growth investing does not
guarantee a profit or eliminate risk. The stocks of these companies can have
relatively high valuations. Because of these high valuations, an investment in
a growth stock can be more risky than an investment in a company with more
modest growth expectations. While the Fund invests principally in common stocks
and other equity securities, in order to achieve its investment objectives, the
Fund may at times use certain types of investment derivatives, such as options,
futures, forwards and swaps. These instruments involve risks different from,
and in certain cases, greater than, the risks presented by more traditional
investments. These risks are fully discussed in the Fund's prospectus.
(Historical Performance continued on next page)
ALLIANCEBERNSTEIN LARGE CAP GROWTH FUND o 3
HISTORICAL PERFORMANCE
(continued from previous page)
THE FUND VS. ITS BENCHMARK Returns
PERIODS ENDED JANUARY 31, 2006 6 Months 12 Months
- -------------------------------------------------------------------------------
AllianceBernstein Large Cap Growth Fund
Class A 12.95% 23.81%
Class B 12.56% 22.87%
Class C 12.58% 22.94%
Advisor Class 13.16% 24.22%
Class R 12.98% 23.81%
Class K** 13.18% 23.20%*
Class I** 13.33% 23.43%*
Russell 1000 Growth Index 3.91% 10.81%
S&P 500 Stock Index 4.67% 10.37%
* Since Inception: see inception dates below.
** Please note that this is a new share class offering for investors purchasing
shares through institutional pension plans. The inception date for Class K and
Class I shares is 3/1/05.
See Historical Performance and Benchmark disclosures on previous page.
(Historical Performance continued on next page)
4 o ALLIANCEBERNSTEIN LARGE CAP GROWTH FUND
HISTORICAL PERFORMANCE
(continued from previous page)
AVERAGE ANNUAL RETURNS AS OF JANUARY 31, 2006
NAV Returns SEC Returns
- -------------------------------------------------------------------------------
Class A Shares
1 Year 23.81% 18.52%
5 Years -5.43% -6.24%
10 Years 7.18% 6.72%
Class B Shares
1 Year 22.87% 18.87%
5 Years -6.14% -6.14%
10 Years(a) 6.58% 6.58%
Class C Shares
1 Year 22.94% 21.94%
5 Years -6.12% -6.12%
10 Years 6.44% 6.44%
Advisor Class Shares#
1 Year 24.22% 24.22%
5 Years -5.15% -5.15%
Since Inception* 7.19% 7.19%
Class R Shares#
1 Year 23.81% 23.81%
Since Inception* 12.43% 12.43%
Class K Shares#
Since Inception* 23.20% 23.20%
Class I Shares#
Since Inception* 23.43% 23.43%
SEC AVERAGE ANNUAL RETURNS (WITH ANY APPLICABLE SALES CHARGES)
AS OF THE MOST RECENT CALENDAR QUARTER-END (DECEMBER 31, 2005)
Class A Shares
1 Year 9.29%
5 Years -5.69%
10 Years 6.61%
Class B Shares
1 Year 9.31%
5 Years -5.58%
10 Years(a) 6.47%
Class C Shares
1 Year 12.40%
5 Years -5.55%
10 Years 6.34%
Advisor Class Shares
1 Year 14.54%
5 Years -4.58%
Since Inception* 6.81%
Class R Shares#
1 Year 14.18%
Since Inception* 10.97%
Class K Shares#
Since Inception* 18.55%
Class I Shares#
Since Inception* 18.72%
(a) Assumes conversion of Class B shares into Class A shares after eight
years.
* Inception Dates: 10/1/96 for Advisor Class shares; 11/3/03 for Class R
shares; 3/1/05 for Class K and Class I shares.
# These share classes are offered at net asset value (NAV) to eligible
investors and their SEC returns are the same as the NAV returns. Please note
that Class K and Class I shares are new share class offerings for investors
purchasing shares through institutional pension plans. The inception dates for
these share classes are listed above.
See Historical Performance disclosures on page 3.
ALLIANCEBERNSTEIN LARGE CAP GROWTH FUND o 5
FUND EXPENSES
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including sales charges (loads) on purchase payments, contingent
deferred sales charges on redemptions and (2) ongoing costs, including
management fees; distribution (12b-1) fees; and other Fund expenses. This
example is intended to help you understand your ongoing costs (in dollars) of
investing in the Fund and to compare these costs with the ongoing costs of
investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of
the period and held for the entire period as indicated below.
Actual Expenses
The table below provides information about actual account values and actual
expenses. You may use the information, 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 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 also 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 hypothetical example is useful in comparing ongoing costs only,
and will not help you determine the relative total costs of owning different
funds. In addition, if these transactional costs were included, your costs
would have been higher.
Beginning Ending
Account Value Account Value Expenses Paid
August 1, 2005 January 31, 2006 During Period*
- ----------------------------------------------------------------------------------------------------
Actual Hypothetical Actual Hypothetical** Actual Hypothetical
- ----------------------------------------------------------------------------------------------------
Class A $1,000 $1,000 $1,129.50 $1,016.48 $9.29 $8.79
Class B $1,000 $1,000 $1,125.57 $1,012.70 $13.29 $12.58
Class C $1,000 $1,000 $1,125.79 $1,012.85 $13.13 $12.43
Advisor
Class $1,000 $1,000 $1,131.57 $1,018.30 $7.36 $6.97
Class R $1,000 $1,000 $1,129.84 $1,016.48 $9.29 $8.79
Class K $1,000 $1,000 $1,131.83 $1,018.05 $7.63 $7.22
Class I $1,000 $1,000 $1,133.33 $1,019.71 $5.86 $5.55
* Expenses are equal to the classes' annualized expense ratios of 1.73%,
2.48%, 2.45%, 1.37%, 1.73%, 1.42% and 1.09%, respectively, multiplied by the
average account value over the period, multiplied by 184/365 (to reflect the
one-half year period).
** Assumes 5% return before expenses.
6 o ALLIANCEBERNSTEIN LARGE CAP GROWTH FUND
PORTFOLIO SUMMARY
January 31, 2006 (unaudited)
PORTFOLIO STATISTICS
Net Assets ($mil): $3,751.9
SECTOR BREAKDOWN*
o 31.2% Technology [PIE CHART OMITTED]
o 22.1% Health Care
o 12.9% Consumer Services
o 12.6% Finance
o 9.0% Energy
o 5.7% Consumer Staples
o 2.7% Capital Goods
o 2.0% Aerospace & Defense
o 1.8% Short-Term
TEN LARGEST HOLDINGS
January 31, 2006 (unaudited)
Percent of
Company U.S. $ Value Net Assets
- -------------------------------------------------------------------------------
Google, Inc., Cl.A $183,741,325 4.9%
Halliburton Co. 165,352,630 4.6
The Procter & Gamble Co. 156,266,509 4.2
Broadcom Corp., Cl.A 150,353,720 4.0
QUALCOMM, Inc. 144,489,092 3.7
Genentech, Inc. 135,667,680 3.6
eBay, Inc. 126,907,950 3.4
Teva Pharmaceutical Industries, Ltd. (ADR) 124,202,505 3.3
Apple Computer, Inc. 119,207,637 3.2
WellPoint, Inc. 118,248,960 3.1
$1,424,438,008 38.0%
* All data are as of January 31, 2006. The Fund's sector breakdown is
expressed as a percentage of total investments (excluding security lending
collateral) and may vary over time.
Please Note: The sector classifications presented herein are based on the
sector categorization methodology of the Adviser.
ALLIANCEBERNSTEIN LARGE CAP GROWTH FUND o 7
PORTFOLIO OF INVESTMENTS
January 31, 2006 (unaudited)
Company Shares U.S. $ Value
- -------------------------------------------------------------------------------
COMMON STOCKS-99.4%
Technology-31.6%
Communication Equipment-9.0%
Corning, Inc.(a) 4,590,750 $111,784,762
Juniper Networks, Inc.(a)* 4,527,300 82,079,949
QUALCOMM, Inc. 3,012,700 144,489,092
------------
338,353,803
Communications Equipment-0.5%
Motorola, Inc. 846,300 19,219,473
Computer Hardware/Storage-3.2%
Apple Computer, Inc.(a) 1,578,700 119,207,637
Computer Peripherals-1.6%
Network Appliance, Inc.(a)* 1,976,390 61,663,368
Internet Media-7.7%
Google, Inc. Cl.A(a) 424,100 183,741,325
Yahoo!, Inc.(a) 3,012,900 103,462,986
------------
287,204,311
Semiconductor Components-8.1%
Advanced Micro Devices, Inc.(a) 961,100 40,231,646
Broadcom Corp. Cl.A(a) 2,204,600 150,353,720
Marvell Technology Group, Ltd.(a) 1,631,000 111,593,020
------------
302,178,386
Software-1.5%
Adobe Systems, Inc. 513,900 20,412,108
Microsoft Corp. 1,342,500 37,791,375
------------
58,203,483
------------
1,186,030,461
Health Care-22.4%
Biotechnology-6.4%
Affymetrix, Inc.(a)* 591,200 22,572,016
Amgen, Inc.(a) 455,800 33,223,262
Genentech, Inc.(a) 1,579,000 135,667,680
Gilead Sciences, Inc.(a) 766,600 46,662,942
------------
238,125,900
Drugs-3.3%
Teva Pharmaceutical Industries, Ltd. (ADR)* 2,913,500 124,202,505
Medical Products-4.9%
Alcon, Inc.* 702,000 89,799,840
St. Jude Medical, Inc.(a) 1,898,500 93,273,305
------------
183,073,145
8 o ALLIANCEBERNSTEIN LARGE CAP GROWTH FUND
Company Shares U.S. $ Value
- -------------------------------------------------------------------------------
Medical Services-7.8%
Caremark Rx, Inc.(a) 1,207,400 $59,524,820
UnitedHealth Group, Inc. 1,955,530 116,197,593
WellPoint, Inc.(a) 1,539,700 118,248,960
------------
293,971,373
------------
839,372,923
Consumer Services-13.1%
Advertising-0.7%
Getty Images, Inc.(a)* 177,100 14,460,215
Lamar Advertising Co. Cl.A(a)* 236,900 10,878,448
------------
25,338,663
Broadcasting & Cable-1.1%
The E.W. Scripps Co. Cl.A* 881,380 42,605,909
Cellular Communications-0.5%
America Movil S.A. de C.V. (ADR) 550,500 18,568,365
Entertainment & Leisure-3.4%
eBay, Inc.(a) 2,944,500 126,907,950
Restaurants & Lodging-0.9%
Las Vegas Sands Corp.(a)* 335,900 17,248,465
McDonald's Corp. 317,000 11,098,170
Starbucks Corp.(a) 129,600 4,108,320
------------
32,454,955
Retail - General Merchandise-5.3%
Lowe's Cos., Inc. 1,337,400 84,991,770
Target Corp. 2,073,000 113,496,750
------------
198,488,520
Miscellaneous-1.2%
Electronic Arts, Inc.(a)* 845,200 46,131,016
------------
490,495,378
Finance-12.7%
Banking - Money Center-2.1%
JPMorgan Chase & Co. 940,000 37,365,000
UBS AG* 389,400 42,366,720
------------
79,731,720
Banking - Regional-0.5%
Northern Trust Corp. 332,100 17,338,941
Brokerage & Money Management-6.2%
Franklin Resources, Inc. 763,393 75,194,210
Legg Mason, Inc. 316,900 41,101,930
Merrill Lynch & Co., Inc.* 578,900 43,458,023
The Goldman Sachs Group, Inc. 523,650 73,965,563
------------
233,719,726
ALLIANCEBERNSTEIN LARGE CAP GROWTH FUND o 9
Company Shares U.S. $ Value
- -------------------------------------------------------------------------------
Insurance-3.9%
Ace Ltd. 641,000 $35,094,750
American International Group, Inc. 1,296,050 84,839,433
The Progressive Corp.* 250,001 26,260,105
------------
146,194,288
------------
476,984,675
Energy-9.1%
Domestic Producers-0.2%
Noble Energy, Inc. 216,200 10,005,736
Oil Service-8.9%
Baker Hughes, Inc. 252,300 19,538,112
GlobalSantaFe Corp.* 643,200 39,267,360
Halliburton Co.* 2,078,600 165,352,630
Nabors Industries, Ltd.(a)* 1,339,860 108,863,625
------------
333,021,727
------------
343,027,463
Consumer Staples-5.8%
Household Products-4.2%
The Procter & Gamble Co. 2,638,300 156,266,509
Retail - Food & Drug-1.6%
Walgreen Co. 643,400 27,846,352
Whole Foods Market, Inc.* 452,800 33,448,336
------------
61,294,688
------------
217,561,197
Capital Goods-2.7%
Electrical Equipment-0.8%
Emerson Electric Co. 403,900 31,282,055
Miscellaneous-1.9%
General Electric Co. 2,109,300 69,079,575
------------
100,361,630
Aerospace & Defense-2.0%
Aerospace-2.0%
The Boeing Co. 1,087,150 74,263,217
Total Common Stocks
(cost $2,601,492,299) 3,728,096,944
10 o ALLIANCEBERNSTEIN LARGE CAP GROWTH FUND
Shares or
Principal
Amount
Company (000) U.S. $ Value
- -------------------------------------------------------------------------------
SHORT-TERM INVESTMENT-1.8%
Time Deposit-1.8%
State Street Euro Dollar
3.60%, 2/01/06
(cost $69,676,000) $69,676 $69,676,000
Total Investment before Security
Lending Collateral-101.2%
(cost $2,671,168,299) 3,797,772,944
INVESTMENT OF CASH COLLATERAL
FOR SECURITIES LOANED-10.7%
Short-Term Investment
UBS Private Money Market Fund, LLC, 4.35%
(cost $400,291,002) 400,291,002 400,291,002
Total Investments-111.9%
(cost $3,071,459,301) 4,198,063,946
Other assets less liabilities-(11.9%) (446,201,440)
Net Assets-100% $3,751,862,506
* Represents entire or partial securities out on loan. See Note E for
securities lending information.
(a) Non-income producing security.
Glossary:
ADR - American Depositary Receipt.
See notes to financial statements.
ALLIANCEBERNSTEIN LARGE CAP GROWTH FUND o 11
STATEMENT OF ASSETS & LIABILITIES
January 31, 2006 (unaudited)
Assets
Investments in securities, at value
(cost $3,071,459,301 -including investment of cash
collateral for securities loaned of $400,291,002) $4,198,063,946(a)
Cash 986
Receivable for investment securities sold 78,382,399
Receivable for capital stock sold 6,053,999
Dividends and interest receivable 943,404
-----------------
Total assets 4,283,444,734
-----------------
Liabilities
Payable for collateral on securities loaned 400,291,002
Payable for investment securities purchased 104,526,166
Payable for capital stock redeemed 13,800,610
Advisory fee payable 2,291,250
Transfer Agent fee payable 2,217,280
Distribution fee payable 617,325
Administrative fee payable 5,051
Accrued expenses 7,833,544
-----------------
Total liabilities 531,582,228
-----------------
Net Assets $3,751,862,506
-----------------
Composition of Net Assets
Capital stock, at par $183,786
Additional paid-in capital 10,804,103,493
Accumulated net investment loss (32,211,278)
Accumulated net realized loss on investment transactions (8,146,818,140)
Net unrealized appreciation of investments 1,126,604,645
-----------------
$3,751,862,506
-----------------
Calculation of Maximum Offering Price Per Share
Net Asset Value and:
----------------------
Shares Offering Redemption
Class Net Assets Outstanding Price Price
- --------------------------------------------------------------------
A $1,515,169,523 70,036,279 $22.59* $21.63
B $1,527,916,354 78,551,101 $19.45 --
C $534,969,009 27,420,145 $19.51 --
Advisor $170,445,402 7,623,938 $22.36 $22.36
R $688,294 31,894 $21.58 $21.58
K $69,491 3,199 $21.72 $21.72
I $2,604,433 119,701 $21.76 $21.76
* Represents the maximum offering price per share which includes a sales
charge of 4.25%.
(a) Includes securities on loan with a value of $385,738,784 (see Note E).
See notes to financial statements.
12 o ALLIANCEBERNSTEIN LARGE CAP GROWTH FUND
STATEMENT OF OPERATIONS
Six Months Ended January 31, 2006 (unaudited)
Investment Income
Dividends (net of foreign taxes withheld
of $77,516) $9,021,797
Interest 524,564 $9,546,361
----------
Expenses
Advisory fee 13,194,878
Distribution fee--Class A 2,112,914
Distribution fee--Class B 7,675,955
Distribution fee--Class C 2,653,969
Distribution fee--Class R 496
Distribution fee--Class K 40
Transfer agency--Class A 3,422,264
Transfer agency--Class B 4,123,196
Transfer agency--Class C 1,346,700
Transfer agency--Advisor Class 455,923
Transfer agency--Class R 265
Transfer agency--Class K 33
Transfer agency--Class I 1,015
Printing 5,959,678
Legal 475,264
Custodian 226,180
Registration fees 64,973
Administrative 42,214
Audit 29,353
Directors' fees and expenses 12,376
Miscellaneous 95,922
----------
Total expenses 41,893,608
Less: expense offset arrangement
(see Note B) (135,969)
----------
Net expenses 41,757,639
----------
Net investment loss (32,211,278)
----------
Realized and Unrealized Gain
on Investment Transactions
Net realized gain on investment
transactions 621,695,140(a)
Net change in unrealized
appreciation/depreciation
of investments (161,634,680)
------------
Net gain on investment transactions 460,060,460
------------
Net Increase in Net Assets from
Operations $427,849,182
------------
(a) On August 5, 2005, the Fund had a redemption-in-kind with total proceeds
in the amount of $889,298,358. The net realized gain on the transactions of
$337,021,310 will not be realized for tax purposes.
See notes to financial statements.
ALLIANCEBERNSTEIN LARGE CAP GROWTH FUND o 13
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended Year Ended
January 31, 2006 July 31,
(unaudited) 2005
------------------ -------------
Increase (Decrease) in Net Assets
from Operations
Net investment loss $(32,211,278) $(51,583,251)
Net realized gain on investment
transactions 621,695,140 287,552,147
Net change in unrealized
appreciation/depreciation
of investments (161,634,680) 490,377,829
------------------ -------------
Net increase in net assets
from operations 427,849,182 726,346,725
Capital Stock Transactions
Net decrease (1,161,860,307) (1,090,829,489)
------------------ -------------
Total decrease (734,011,125) (364,482,764)
Net Assets
Beginning of period 4,485,873,631 4,850,356,395
------------------ -------------
End of period, (including accumulated
net investment loss of ($32,211,278)
and $0, respectively) $3,751,862,506 $4,485,873,631
------------------ -------------
See notes to financial statements.
14 o ALLIANCEBERNSTEIN LARGE CAP GROWTH FUND
NOTES TO FINANCIAL STATEMENTS
January 31, 2006 (unaudited)
NOTE A
Significant Accounting Policies
AllianceBernstein Large Cap Growth Fund, Inc. (the "Fund"), organized as a
Maryland corporation on July 9, 1992, is registered under the Investment
Company Act of 1940 as a diversified, open-end management investment company.
The Fund offers Class A, Class B, Class C, Advisor Class, Class R, Class K and
Class I shares. Class A shares are sold with a front-end sales charge of up to
4.25% for purchases not exceeding $1,000,000. With respect to purchases of
$1,000,000 or more, Class A shares redeemed within one year of purchase may be
subject to a contingent deferred sales charge of 1%. Class B shares are
currently sold with a contingent deferred sales charge which declines from 4%
to zero depending on the period of time the shares are held. Class B shares
purchased before July 11, 1998 will convert to Class A shares six years after
the end of the calendar month of purchase. Class B shares purchased on or after
July 11, 1998 will convert to Class A shares eight years after the end of the
calendar month of purchase. Class C shares are subject to a contingent deferred
sales charge of 1% on redemptions made within the first year after purchase.
Class R and Class K shares are sold without an initial or contingent deferred
sales charge. Advisor Class and Class I shares are sold without an initial or
contingent deferred sales charge and are not subject to ongoing distribution
expenses. All seven classes of shares have identical voting, dividend,
liquidation and other rights, except that each class bears different
distribution expenses and has exclusive voting rights with respect to its
distribution plan. The financial statements have been prepared in conformity
with U.S. generally accepted accounting principles which require management to
make certain estimates and assumptions that affect the reported amounts of
assets and liabilities in the financial statements and amounts of income and
expenses during the reporting period. Actual results could differ from those
estimates. Additional information about some of the items discussed in these
Notes to Financial Statements is contained in the Fund's Statement of
Additional Information, which is available upon request. The following is a
summary of significant accounting policies followed by the Fund.
1. Security Valuation
Portfolio securities are valued at their current market value determined on the
basis of market quotations or, if market quotations are not readily available
or are deemed unreliable, at "fair value" as determined in accordance with
procedures established by and under the general supervision of the Fund's Board
of Directors.
In general, the market value of securities which are readily available and
deemed reliable are determined as follows. Securities listed on a national
securities exchange or on a foreign securities exchange are valued at the last
sale price at the close of the exchange or foreign securities exchange. If
there has been no sale on such day, the securities are valued at the mean of
the closing bid and asked prices on such day. Securities listed on more than
one exchange are valued by reference to the principal exchange on which the
securities are traded; securities not listed
ALLIANCEBERNSTEIN LARGE CAP GROWTH FUND o 15
on an exchange but traded on The NASDAQ Stock Market, Inc. ("NASDAQ") are
valued in accordance with the NASDAQ Official Closing Price; listed put or call
options are valued at the last sale price. If there has been no sale on that
day, such securities will be valued at the closing bid prices on that day; open
futures contracts and options thereon are valued using the closing settlement
price or, in the absence of such a price, the most recent quoted bid price. If
there are no quotations available for the day of valuation, the last available
closing settlement price is used; securities traded in the over-the-counter
market, ("OTC") (but excluding securities traded on NASDAQ) are valued at the
mean of the current bid and asked prices as reported by the National Quotation
Bureau or other comparable sources; U.S. Government securities and other debt
instruments having 60 days or less remaining until maturity are valued at
amortized cost if their original maturity was 60 days or less; or by amortizing
their fair value as of the 61st day prior to maturity if their original term to
maturity exceeded 60 days; fixed-income securities, including mortgage backed
and asset backed securities, may be valued on the basis of prices provided by a
pricing service or at a price obtained from one or more of the major
broker/dealers. In cases where broker/dealer quotes are obtained, Alliance
Capital Management, L.P. (the "Adviser") (see Note K) may establish procedures
whereby changes in market yields or spreads are used to adjust, on a daily
basis, a recently obtained quoted price on a security; and OTC and other
derivatives are valued on the basis of a quoted bid price or spread from a
major broker/dealer in such security.
Securities for which market quotations are not readily available (including
restricted securities) or are deemed unreliable are valued at fair value.
Factors considered in making this determination may include, but are not
limited to, information obtained by contacting the issuer, analysts, analysis
of the issuer's financial statements or other available documents. In addition,
the Fund may use fair value pricing for securities primarily traded in non-U.S.
markets because, most foreign markets close well before the Fund values its
securities at 4:00 p.m., Eastern Time. The earlier close of these foreign
markets gives rise to the possibility that significant events, including broad
market moves, may have occurred in the interim and may materially affect the
value of those securities. To account for this, the Fund may frequently value
many of its foreign equity securities using fair value prices based on third
party vendor modeling tools to the extent available.
2. Currency Translation
Assets and liabilities denominated in foreign currencies and commitments under
forward exchange currency contracts are translated into U.S. dollars at the
mean of the quoted bid and asked prices of such currencies against the U.S.
dollar. Purchases and sales of portfolio securities are translated into U.S.
dollars at the rates of exchange prevailing when such securities were acquired
or sold. Income and expenses are translated into U.S. dollars at rates of
exchange prevailing when accrued.
16 o ALLIANCEBERNSTEIN LARGE CAP GROWTH FUND
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 currency gains and losses from valuing foreign currency
denominated assets and liabilities at period end exchange rates are reflected
as a component of net unrealized appreciation or depreciation of investments
and foreign currency denominated assets and liabilities.
3. Taxes
It is the Fund's policy to meet the requirements of the Internal Revenue Code
applicable to regulated investment companies and to distribute all of its
investment company taxable income and net realized gains, if any, to
shareholders. Therefore, no provisions for federal income or excise taxes are
required. The Fund may be subject to taxes imposed by countries in which it
invests. Such taxes are generally based on income and/or capital gains earned
or repatriated. Taxes are accrued and applied to net investment income, net
realized gains and net unrealized appreciation/depreciation as such income
and/or gains are earned.
4. Investment Income and Investment Transactions
Dividend income is recorded on the ex-dividend date or as soon as the Fund is
informed of the dividend. Interest income is accrued daily. Investment
transactions are accounted for on the trade date the securities are purchased
or sold. Investment gains and losses are determined on the identified cost
basis. The Fund amortizes premiums and accretes discounts as adjustments to
interest income.
5. Income and Expenses
All income earned and expenses incurred by the Fund are borne on a pro-rata
basis by each outstanding class of shares, based on the proportionate interest
in the Fund represented by the net assets of such class, except for class
specific expenses which are allocated to the respective class. Realized and
unrealized gains and losses are allocated among the various share classes based
on their relative net assets.
6. Dividends and Distributions
Dividends and distributions to shareholders, if any, are recorded on the
ex-dividend date. Income dividends and capital gains distributions are
determined in accordance with federal tax regulations and may differ from those
determined in accordance with U.S. generally accepted accounting principles. To
the extent these differences are permanent, such amounts are reclassified
within the capital accounts based on their federal tax basis treatment;
temporary differences, do not require such reclassification.
ALLIANCEBERNSTEIN LARGE CAP GROWTH FUND o 17
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 .75% of the first $2.5 billion, .65% of
the next $2.5 billion and .60% in excess of $5 billion of the Fund's average
daily net assets. Prior to September 7, 2004, the Fund paid the Adviser an
advisory fee at an annual rate of 1.00% of the Fund's average daily net assets
up to $5 billion, .95% of the next $2.5 billion, .90% of the next $2.5 billion,
and .85% of the Fund's average daily net assets over $10 billion. The fee is
accrued daily and paid monthly.
Pursuant to the advisory agreement, the Fund paid $42,214 to the Adviser
representing the cost of certain legal and accounting services provided to the
Fund by the Adviser for the six months ended January 31, 2006.
The Fund compensates Alliance Global Investor Services, Inc. (AGIS), a
wholly-owned subsidiary of the Adviser, under a Transfer Agency Agreement for
providing personnel and facilities to perform transfer agency services for the
Fund (see Note K). 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 $3,959,007 for the six months
ended January 31, 2006.
For the six months ended January 31, 2006, the Fund's expenses were reduced by
$135,969 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 (see Note K). The Distributor has advised the
Fund that it has retained front-end sales charges of $20,556 from the sale of
Class A shares and received $24,974, $365,373 and $16,939 in contingent
deferred sales charges imposed upon redemptions by shareholders of Class A,
Class B and Class C shares, respectively, for the six months ended January 31,
2006.
Brokerage commissions paid on investment transactions for the six months ended
January 31, 2006 amounted to $2,174,477, of which $32,660 and $0, respectively,
was paid to Sanford C. Bernstein &Co. LLC and Sanford C. Bernstein Limited,
affiliates of the Adviser.
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 .50% of the Fund's average daily net assets
attributable to
18 o ALLIANCEBERNSTEIN LARGE CAP GROWTH FUND
Class A and Class R shares, 1% of the Fund's average daily net assets
attributable to both Class B and Class C shares and .25% of the Fund's average
daily net assets attributable to Class K shares. There are no distribution and
servicing fees on the Advisor Class and Class I shares. The fees are accrued
daily and paid monthly. The Directors currently limit payments under the Class
A plan to .30% of the average net assets attributable to Class A shares. The
Agreement provides that the Distributor will use such payments in their
entirety for distribution assistance and promotional activities. The
Distributor has incurred expenses in excess of the distribution costs
reimbursed by the Fund in the amounts of $194,417,388, $16,660,689, $0 and $0
for Class B, Class C, Class R and Class K shares, respectively; such costs may
be recovered from the Fund in future periods so long as the Agreement is in
effect. In accordance with the Agreement, there is no provision for recovery of
unreimbursed distribution costs incurred by the Distributor beyond the current
fiscal year for Class A shares. The Agreement also provides that the 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 six months ended January 31, 2006, were as follows:
Purchases Sales
- -------------------------------------------------------------------------------
Investment securities (excluding
U.S. government securities) $1,258,157,723 $1,563,856,283
U.S. government securities -0- -0-
The cost of investments for federal income tax purposes was substantially the
same as the cost for financial reporting purposes. Accordingly, gross
unrealized appreciation and unrealized depreciation are as follows:
Gross unrealized appreciation $1,147,771,361
Gross unrealized depreciation (21,166,716)
Net unrealized appreciation $1,126,604,645
NOTE E
Securities Lending
The Fund has entered into a securities lending agreement with UBS Warburg LLC
(the "Lending Agent"). Under the terms of the agreement, the Lending Agent, on
behalf of the Fund, administers the lending of portfolio securities to certain
broker-dealers. In return, the Fund receives fee income from the lending
transactions or it retains a portion of interest on the investment of any cash
received as collateral. The Fund also continues to receive dividends or
interest on the securities loaned. Unrealized gain or loss on the value of the
securities loaned that may occur during the term of the loan will be reflected
in the accounts of the
ALLIANCEBERNSTEIN LARGE CAP GROWTH FUND o 19
Fund. All loans are continuously secured by collateral exceeding the value of
the securities loaned. All collateral consists of either cash or U.S.
government securities. The Lending Agent may invest the cash collateral
received in an eligible money market vehicle in accordance with the investment
restrictions of the Fund. The Lending Agent will indemnify the Fund for any
loss resulting from a borrower's failure to return a loaned security when due.
As of January 31, 2006, the Fund had loaned securities with a value of
$385,738,784 and received cash collateral which was invested in a money market
fund valued at $400,291,002 as included in the accompanying portfolio of
investments. For the six months ended January 31, 2006, the Fund earned fee
income of $44,479 which is included in interest income in the accompanying
statement of operations.
NOTE F
Capital Stock
There are 21,000,000,000 shares of $0.001 par value capital stock authorized,
divided into seven classes, designated Class A, Class B, Class C, Advisor
Class, Class R, Class K and Class I shares. Each Class consists of
3,000,000,000 authorized shares. Transactions in capital stock were as follows:
Shares Amount
----------------------------------------------------------
Six Months Six Months
Ended Ended
January 31, January 31,
2006 Year Ended 2006 Year Ended
(unaudited) July 31, 2005 (unaudited) July 31, 2005
-----------------------------------------------------------
Class A
Shares sold 10,283,853 9,120,152 $211,541,747 $158,058,675
Shares converted
from Class B 509,972 1,194,471 10,362,074 21,393,988
Shares redeemed (11,185,042) (35,137,620) (225,896,043) (610,166,042)
Net decrease (391,217) (24,822,997) $(3,992,222) $(430,713,379)
Class B
Shares sold 1,254,563 3,076,383 $22,979,584 $48,139,464
Shares converted
to Class A (569,603) (1,325,136) (10,362,074) (21,393,988)
Shares redeemed (12,361,709) (37,997,391) (223,302,346) (595,688,318)
Net decrease (11,676,749) (36,246,144) $(210,684,836) $(568,942,842)
Class C
Shares sold 911,258 1,152,760 $17,085,652 $18,127,392
Shares redeemed (4,466,262) (15,133,060) (80,931,609) (237,393,792)
Net decrease (3,555,004) (13,980,300) $(63,845,957) $(219,266,400)
20 o ALLIANCEBERNSTEIN LARGE CAP GROWTH FUND
Shares Amount
----------------------------------------------------------
Six Months Six Months
Ended Ended
January 31, January 31,
2006 Year Ended 2006 Year Ended
(unaudited) July 31, 2005 (unaudited) July 31, 2005
-----------------------------------------------------------
Advisor Class
Shares sold 1,394,892 12,095,279 $29,239,803 $216,904,743
Shares redeemed (46,449,540) (4,934,526) (915,537,611) (88,916,350)
Net increase
(decrease) (45,054,648) 7,160,753 $(886,297,808) $127,988,393
Class R
Shares sold 27,776 5,735 $587,021 $97,611
Shares redeemed (1,475) (744) (29,973) (12,872)
Net increase 26,301 4,991 $557,048 $84,739
March 1, March 1,
2005(a) to 2005(a) to
July 31, 2005 July 31, 2005
-----------------------------------------------------------
Class K
Shares sold 2,653 567 $53,842 $10,000
Shares redeemed (21) -0- (436) -0-
Net increase 2,632 567 $53,406 $10,000
Class I
Shares sold 133,752 567 $2,655,937 $10,000
Shares redeemed (14,618) -0- (305,875) -0-
Net increase 119,134 567 $2,350,062 $10,000
(a) Commencement of distributions.
NOTE G
Risks Involved in Investing in the Fund
Foreign Securities Risk--Investing in securities of foreign companies or
foreign governments involves special risks which include changes in foreign
exchange rates and the possibility of the 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.
ALLIANCEBERNSTEIN LARGE CAP GROWTH FUND o 21
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 six months ended January 31, 2006.
NOTE I
Components of Accumulated Earnings (Deficit)
The tax character of distributions to be paid for the year ending July 31, 2006
will be determined at the end of the current fiscal year. As of July 31, 2005,
the components of accumulated earnings/(deficit) on a tax basis were as follows:
Accumulated capital and other losses $(8,723,403,793)(a)
Unrealized appreciation/(depreciation) 1,243,129,841(b)
-------------------
Total accumulated earnings/(deficit) $(7,480,273,952)
-------------------
(a) On July 31, 2005, the Fund had a net capital loss carryforward of
$8,723,403,793, of which $5,548,844,576 expires in the year 2009,
$2,082,402,414 expires in the year 2010 and $1,092,156,803 which expires in the
year 2011. To the extent future capital gains are offset by capital loss
carryforward, such gains will not be distributed.
(b) The difference between book-basis and tax-basis unrealized
appreciation/(depreciation) is attributable primarily to the tax deferral of
losses on wash sales. During the fiscal year, the Fund utilized capital loss
carryforward of $235,364,533.
NOTE J
Legal Proceedings
On September 12, 2002, a complaint entitled Lawrence E. Jaffe Pension Plan,
Lawrence E. Jaffe Trustee U/A 1198 v. Alliance Capital Management L.P., Alfred
Harrison and Alliance Premier Growth Fund, Inc. ("Jaffe Complaint") was filed
in the United States District Court for the Southern District of New York
against the Adviser, Alfred Harrison and the Fund alleging violation of the
Investment Company Act. Plaintiff seeks damages equal to the Fund's losses as a
result of the Fund's investment in shares of Enron and a recovery of all fees
paid by the Fund to the Adviser beginning November 1, 2000. On March 24, 2003,
the court granted the Adviser's motion to transfer the Jaffe Complaint to the
United States District Court for the District of New Jersey for coordination
with the now dismissed Benak v. Alliance Capital Management L.P. and Alliance
Premier Growth Fund action then pending. On December 5, 2003, plaintiff filed
an amended complaint ("Amended Jaffe Complaint") in the United States District
Court for the District of New Jersey alleging violations of Section 36(a) of
the Investment Company Act, common law negligence, and negligent
misrepresentation. Specifically, the Amended Jaffe Complaint alleges that: (i)
the defendants
22 o ALLIANCEBERNSTEIN LARGE CAP GROWTH FUND
breached their fiduciary duties of loyalty, care and good faith to the Fund by
causing the Fund to invest in securities of Enron, (ii) the defendants were
negligent for investing in securities of Enron, and (iii) through prospectuses
and other documents defendants misrepresented material facts related to the
Fund's investment objective and policies. On January 23, 2004, defendants moved
to dismiss the Amended Jaffe Complaint. On May 23, 2005, the court granted
defendant's motion and dismissed the case on the ground that plaintiff failed
to make a demand on the Fund's Board of Directors ("LCG Board") pursuant to
Rule 23.1 of the Federal Rules of Civil Procedure. Plaintiff's time to file an
appeal has expired. On June 15, 2005, plaintiff made a demand on the LCG Board,
requesting that the LCG Board take action against the Adviser for the reasons
set forth in the Amended Jaffe Complaint. In December 2005, the LCG Board
rejected plaintiff's demand. The Adviser and the Fund believe that plaintiff's
allegations in the Amended Jaffe Complaint are without merit and intend to
vigorously defend against these allegations.
On December 13, 2002, a putative class action complaint entitled Patrick J.
Goggins, et al. v. Alliance Capital Management L.P., et al. ("Goggins
Complaint") was filed in the United States District Court for the Southern
District of New York against the Adviser, the Fund and individual directors and
certain officers of the Fund. On August 13, 2003, the court granted the
Adviser's motion to transfer the Goggins Complaint to the United States
District Court for the District of New Jersey. On December 5, 2003, plaintiffs
filed an amended complaint ("Amended Goggins Complaint") in the United States
District Court for the District of New Jersey, which alleges that defendants
violated Sections 11, 12(a)(2) and 15 of the Securities Act because the Fund's
registration statements and prospectuses contained untrue statements of
material fact and omitted material facts. More specifically, the Amended
Goggins Complaint alleges that the Fund's investment in Enron was inconsistent
with the the Fund's stated strategic objectives and investment strategies.
Plaintiffs seek rescissionary relief or an unspecified amount of compensatory
damages on behalf of a class of persons who purchased shares of the Fund during
the period October 31, 2000 through February 14, 2002. On January 23, 2004, the
Adviser moved to dismiss the Amended Goggins Complaint. On December 10, 2004,
the court granted the Adviser's motion and dismissed the case. On January 5,
2005, plaintiffs appealed the court's decision. On January 13, 2006, the U.S.
Court of Appeals for the Third Circuit affirmed the dismissal. Plaintiffs' time
to seek further review of the court's decision expires on April 13, 2006. The
Adviser, the Fund and the other defendants believe that plaintiffs' allegations
in the Amended Goggins Complaint are without merit and intend to vigorously
defend against these allegations.
On October 1, 2003, a class action complaint entitled Erb, et al. v. Alliance
Capital Management L.P. ("Erb Complaint") was filed in the Circuit Court of St.
Clair County, Illinois, against the Adviser. The plaintiff, purportedly a share-
ALLIANCEBERNSTEIN LARGE CAP GROWTH FUND o 23
holder in the Fund, alleged that the Adviser breached unidentified provisions
of the Fund's prospectus and subscription and confirmation agreements that
allegedly required that every security bought for the Fund's portfolio must be
a "1-rated" stock, the highest rating that the Adviser's research analysts
could assign. Plaintiff alleges that the Adviser impermissibly purchased shares
of stocks that were not 1-rated. On June 24, 2004, plaintiff filed an amended
complaint ("Amended Erb Complaint") in the Circuit Court of St. Clair County,
Illinois. The Amended Erb Complaint allegations are substantially similar to
those contained in the previous complaint, however, the Amended Erb Complaint
adds a new plaintiff and seeks to allege claims on behalf of a purported class
of persons or entities holding an interest in any portfolio managed by the
Adviser's Large Cap Growth Team. The Amended Erb Complaint alleges that the
Adviser breached its contracts with these persons or entities by impermissibly
purchasing shares of stocks that were not 1-rated. Plaintiffs seek rescission
of all purchases of any non-1-rated stocks the Adviser made for the Fund and
other Large Cap Growth Team clients' portfolios over the past eight years, as
well as an unspecified amount of damages. On July 13, 2004, the Adviser removed
the Erb action to the United States District Court for the Southern District of
Illinois on the basis that plaintiffs' claims are preempted under the
Securities Litigation Uniform Standards Act. On August 30, 2004, the District
Court remanded the action to the Circuit Court. On September 15, 2004, the
Adviser filed a notice of appeal with respect to the District Court's order. On
December 23, 2004, plaintiffs moved to dismiss the Adviser's appeal. On
September 2, 2005, the Adviser's appeal was denied. The Adviser believes that
plaintiffs' allegations in the Amended Erb Complaint are without merit and
intend to vigorously defend against these allegations.
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
24 o ALLIANCEBERNSTEIN LARGE CAP GROWTH FUND
effects of market timing attributable to market timing relationships described
in the SEC Order. According to the SEC Order, the Reimbursement Fund is to be
paid, in order of priority, to fund investors based on (i) their aliquot share
of losses suffered by the fund due to market timing, and (ii) a proportionate
share of advisory fees paid by such fund during the period of such market
timing;
(ii) The Adviser agreed to reduce the advisory fees it receives from some
of the AllianceBernstein long-term, open-end retail funds until December 31,
2008; and
(iii) The Adviser agreed to implement changes to its governance and
compliance procedures. Additionally, the SEC Order and the NYAG Order
contemplate that the Adviser's registered investment company clients, including
the Fund, will introduce governance and compliance changes.
In anticipation of final, definitive documentation of the NYAG Order and
effective January 1, 2004, the Adviser began waiving a portion of its advisory
fee. On September 7, 2004, the Fund's investment advisory agreement was amended
to reflect the reduced advisory fee. For more information on this waiver and
amendment to the Fund's investment advisory agreement, please see "Advisory Fee
and Other Transactions with Affiliates" above.
A special committee of the Adviser's Board of Directors, comprised of the
members of the Adviser's Audit Committee and the other independent member of
the Adviser's Board, is continuing to direct and oversee an internal
investigation and a comprehensive review of the facts and circumstances
relevant to the SEC's and the NYAG's investigations.
In addition, the Independent Directors of the Fund ("the Independent
Directors") have initiated an investigation of the above-mentioned matters with
the advice of an independent economic consultant and independent counsel. The
Independent Directors have formed a special committee to supervise the
investigation.
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
ALLIANCEBERNSTEIN LARGE CAP GROWTH FUND o 25
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. All state court actions against
the Adviser either were voluntarily dissmissed or removed to federal court. On
February 20, 2004, the Judicial Panel on Multidistrict Litigation transferred
all federal actions to the United States District Court for the District of
Maryland (the "Mutual Fund MDL"). All of the actions removed to federal court
were also transferred to 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 allegations, 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
26 o ALLIANCEBERNSTEIN LARGE CAP GROWTH FUND
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 transferred 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 NYAGOrder. On January 26, 2006, the
Adviser, Alliance Holding, and various unaffiliated defendants filed a Petition
for Writ of Prohibition and Order Suspending Proceedings in West Virginia state
court seeking to vacate the Summary Order and for other relief. The Adviser
intends to vigorously defend against the allegations in the WVAG Complaint.
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 Holding, 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
ALLIANCEBERNSTEIN LARGE CAP GROWTH FUND o 27
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, nine additional lawsuits making factual allegations
substantially similar to those in the Aucoin Complaint were filed against the
Adviser and certain other defendants. All nine of the lawsuits (i) were brought
as class actions filed in the United States District Court for the Southern
District of New York, (ii) assert claims substantially identical to the Aucoin
Complaint, and (iii) are brought on behalf of shareholders of the Funds.
On February 2, 2005, plaintiffs filed a consolidated amended class action
complaint ("Aucoin Consolidated Amended Complaint") that asserts claims
substantially similar to the Aucoin Complaint and the nine additional lawsuits
referenced above. On October 19, 2005, the District Court dismissed each of the
claims set forth in the Aucoin Consolidated Amended Complaint, except for
plaintiff's claim under Section 36(b) of the Investment Company Act. On January
11, 2006, the District Court granted defendants' motion for reconsideration and
dismissed the remaining Section 36(b) claim. Plaintiffs have moved for leave to
amend their consolidated complaint.
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. This may require the AllianceBernstein Mutual Funds to sell
investments held by those funds to provide for sufficient liquidity and could
also have an adverse effect on the investment performance of the
AllianceBernstein Mutual Funds. 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.
NOTE K
Subsequent Event
Effective February 24, 2006, the names of Alliance Capital Management L.P.,
AllianceBernstein Investment Research and Management, Inc. and Alliance Global
Investor Services, Inc. were changed to AllianceBernstein L.P.,
AllianceBernstein Investments, Inc. and AllianceBernstein Investor Services,
Inc., respectively.
28 o ALLIANCEBERNSTEIN LARGE CAP GROWTH FUND
FINANCIAL HIGHLIGHTS
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class A
-------------------------------------------------------------------------------------------------------------
Six Months
Ended December 1,
January 31, Year Ended July 31, 2002 to Year Ended November 30,
2006 ----------------------------- July 31, ---------------------------------------
(unaudited) 2005 2004 2003(a) 2002 2001 2000
-------------------------------------------------------------------------------------------------------------
Net asset value,
beginning of
period $19.15 $16.28 $15.58 $15.07 $20.24 $29.51 $35.82
-------------------------------------------------------------------------------------------------------------
Income From
Investment
Operations
Net investment
loss(b) (.14) (.14)(c) (.15)(c)(d) (.10) (.19) (.19) (.26)
Net realized and
unrealized gain
(loss) on
investment
transactions 2.62 3.01 .85 .61 (4.98) (6.43) (3.69)
-------------------------------------------------------------------------------------------------------------
Net increase
(decrease) in
net asset value
from operations 2.48 2.87 .70 .51 (5.17) (6.62) (3.95)
-------------------------------------------------------------------------------------------------------------
Less: Distributions
Distributions from
net realized gain
on investment
transactions -0- -0- -0- -0- -0- (2.38) (2.36)
Distributions in
excess of net
realized gain
on investment
transactions -0- -0- -0- -0- -0- (.27) -0-
-------------------------------------------------------------------------------------------------------------
Total distributions -0- -0- -0- -0- -0- (2.65) (2.36)
-------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $21.63 $19.15 $16.28 $15.58 $15.07 $20.24 $29.51
-------------------------------------------------------------------------------------------------------------
Total Return
Total investment
return based
on net asset
value(e) 12.95% 17.63% 4.49% 3.38% (25.54)% (24.90)% (11.91)%
Ratios/Supplemental
Data
Net assets, end of
period
(000's omitted) $1,515,170 $1,348,678 $1,550,292 $1,757,243 $2,098,623 $3,556,040 $4,817,131
Ratio to average
net assets of:
Expenses,
net of waivers/
reimbursements 1.73%(f)(g) 1.50% 1.58% 1.89%(g) 1.73% 1.53% 1.44%
Expenses,
before waivers/
reimbursements 1.73%(f)(g) 1.53% 1.76% 1.89%(g) 1.73% 1.53% 1.44%
Net investment loss (1.20)%(f)(g) (.82)%(c) (.90)%(c)(d) (1.08)%(g) (1.09)% (.83)% (.71)%
Portfolio turnover rate 34% 56% 61% 60% 93% 135% 125%
See footnote summary on page 35.
ALLIANCEBERNSTEIN LARGE CAP GROWTH FUND o 29
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class B
-------------------------------------------------------------------------------------------------------------
Six Months
Ended December 1,
January 31, Year Ended July 31, 2002 to Year Ended November 30,
2006 ------------------------------- July 31, ---------------------------------------
(unaudited) 2005 2004 2003(a) 2002 2001 2000
-------------------------------------------------------------------------------------------------------------
Net asset value,
beginning of
period $17.28 $14.80 $14.27 $13.88 $18.78 $27.76 $34.05
-------------------------------------------------------------------------------------------------------------
Income From
Investment
Operations
Net investment
loss(b) (.19) (.25)(c) (.25)(c)(d) (.16) (.29) (.35) (.48)
Net realized and
unrealized gain
(loss) on
investment
transactions 2.36 2.73 .78 .55 (4.61) (5.98) (3.45)
-------------------------------------------------------------------------------------------------------------
Net increase
(decrease) in net
asset value
from operations 2.17 2.48 .53 .39 (4.90) (6.33) (3.93)
-------------------------------------------------------------------------------------------------------------
Less: Distributions
Distributions from
net realized gain
on investment
transactions -0- -0- -0- -0- -0- (2.38) (2.36)
Distributions in
excess of net
realized gain
on investment
transactions -0- -0- -0- -0- -0- (.27) -0-
-------------------------------------------------------------------------------------------------------------
Total distributions -0- -0- -0- -0- -0- (2.65) (2.36)
-------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $19.45 $17.28 $14.80 $14.27 $13.88 $18.78 $27.76
-------------------------------------------------------------------------------------------------------------
Total Return
Total investment
return based
on net asset
value(e) 12.56% 16.76% 3.71% 2.81% (26.09)% (25.48)% (12.51)%
Ratios/Supplemental
Data
Net assets, end of
period
(000's omitted) $1,527,916 $1,559,369 $1,871,308 $2,670,330 $3,080,955 $5,774,836 $8,797,132
Ratio to average
net assets of:
Expenses,
net of waivers/
reimbursements 2.48%(f)(g) 2.25% 2.34% 2.65%(g) 2.47% 2.25% 2.13%
Expenses,
before waivers/
reimbursements 2.48%(f)(g) 2.28% 2.52% 2.65%(g) 2.47% 2.25% 2.13%
Net investment loss (1.95)%(f)(g) (1.57)%(c) (1.66)%(c)(d) (1.84)%(g) (1.84)% (1.59)% (1.40)%
Portfolio turnover rate 34% 56% 61% 60% 93% 135% 125%
See footnote summary on page 35.
30 o ALLIANCEBERNSTEIN LARGE CAP GROWTH FUND
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class C
---------------------------------------------------------------------------------------------------------
Six Months
Ended December 1,
January 31, Year Ended July 31, 2002 to Year Ended November 30,
2006 ------------------------- July 31, ---------------------------------------
(unaudited) 2005 2004 2003(a) 2002 2001 2000
---------------------------------------------------------------------------------------------------------
Net asset value,
beginning of period $17.33 $14.83 $14.30 $13.90 $18.81 $27.80 $34.09
---------------------------------------------------------------------------------------------------------
Income From Investment
Operations
Net investment loss(b) (.19) (.24)(c) (.25)(c)(d) (.16) (.29) (.35) (.48)
Net realized and
unrealized gain (loss)
on investment
transactions 2.37 2.74 .78 .56 (4.62) (5.99) (3.45)
---------------------------------------------------------------------------------------------------------
Net increase (decrease)
in net asset value
from operations 2.18 2.50 .53 .40 (4.91) (6.34) (3.93)
---------------------------------------------------------------------------------------------------------
Less: Distributions
Distributions from
net realized gain
on investment
transactions -0- -0- -0- -0- -0- (2.38) (2.36)
Distributions in excess
of net realized gain
on investment
transactions -0- -0- -0- -0- -0- (.27) -0-
---------------------------------------------------------------------------------------------------------
Total distributions -0- -0- -0- -0- -0- (2.65) (2.36)
---------------------------------------------------------------------------------------------------------
Net asset value,
end of period $19.51 $17.33 $14.83 $14.30 $13.90 $18.81 $27.80
---------------------------------------------------------------------------------------------------------
Total Return
Total investment return
based on net asset
value(e) 12.58% 16.86% 3.71% 2.88% (26.10)% (25.48)% (12.49)%
Ratios/Supplemental
Data
Net assets, end of period
(000's omitted) $534,969 $536,804 $666,851 $943,029 $1,116,314 $2,173,671 $3,361,307
Ratio to average
net assets of:
Expenses,
net of waivers/
reimbursements 2.45%(f)(g) 2.22% 2.31% 2.62%(g) 2.45% 2.26% 2.13%
Expenses,
before waivers/
reimbursements 2.45%(f)(g) 2.25% 2.49% 2.62%(g) 2.45% 2.26% 2.13%
Net investment loss (1.92)%(f)(g) (1.53)%(c) (1.62)%(c)(d) (1.81)%(g) (1.81)% (1.59)% (1.40)%
Portfolio turnover rate 34% 56% 61% 60% 93% 135% 125%
See footnote summary on page 35.
ALLIANCEBERNSTEIN LARGE CAP GROWTH FUND o 31
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Advisor Class
--------------------------------------------------------------------------------------------------------
Six Months
Ended December 1,
January 31, Year Ended July 31, 2002 to Year Ended November 30,
2006 ---------------------------- July 31, --------------------------------------
(unaudited) 2005 2004 2003(a) 2002 2001 2000
--------------------------------------------------------------------------------------------------------
Net asset value,
beginning of period $19.76 $16.74 $15.97 $15.42 $20.65 $29.99 $36.25
--------------------------------------------------------------------------------------------------------
Income From Investment
Operations
Net investment loss(b) (.08) (.09)(c) (.10)(c)(d) (.08) (.14) (.14) (.14)
Net realized and
unrealized gain (loss)
on investment
transactions 2.68 3.11 .87 .63 (5.09) (6.55) (3.76)
--------------------------------------------------------------------------------------------------------
Net increase (decrease)
in net asset value
from operations 2.60 3.02 .77 .55 (5.23) (6.69) (3.90)
--------------------------------------------------------------------------------------------------------
Less: Distributions
Distributions from
net realized gain
on investment
transactions -0- -0- -0- -0- -0- (2.38) (2.36)
Distributions in excess
of net realized gain
on investment
transactions -0- -0- -0- -0- -0- (.27) -0-
--------------------------------------------------------------------------------------------------------
Total distributions -0- -0- -0- -0- -0- (2.65) (2.36)
--------------------------------------------------------------------------------------------------------
Net asset value,
end of period $22.36 $19.76 $16.74 $15.97 $15.42 $20.65 $29.99
--------------------------------------------------------------------------------------------------------
Total Return
Total investment return
based on net asset
value(e) 13.16% 18.04% 4.82% 3.57% (25.33)% (24.72)% (11.61)%
Ratios/Supplemental
Data
Net assets, end of period
(000's omitted) $170,446 $1,040,894 $761,895 $793,162 $590,508 $510,603 $523,315
Ratio to average
net assets of:
Expenses,
net of waivers/
reimbursements 1.37%(f)(g) 1.20% 1.28% 1.60%(g) 1.45% 1.25% 1.11%
Expenses,
before waivers/
reimbursements 1.37%(f)(g) 1.23% 1.46% 1.60%(g) 1.45% 1.25% 1.11%
Net investment loss (.93)%(f)(g) (.53)%(c) (.60)(c)(d) (.78)%(g) (.79)% (.59)% (.38)%
Portfolio turnover rate 34% 56% 61% 60% 93% 135% 125%
See footnote summary on page 35.
32 o ALLIANCEBERNSTEIN LARGE CAP GROWTH FUND
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class R
-----------------------------------------------------
Six Months November 3,
Ended Year 2003(h)
January 31, Ended to
2006 July 31, July 31,
(unaudited) 2005 2004
-----------------------------------------------------
Net asset value, beginning of period $19.10 $16.25 $16.59
-----------------------------------------------------
Income From Investment Operations
Net investment loss(b) (.12) (.17)(c) (.20)(c)(d)
Net realized and unrealized gain
(loss) on investment transactions 2.60 3.02 (.14)
-----------------------------------------------------
Net increase (decrease) in net asset
value from operations 2.48 2.85 (.34)
-----------------------------------------------------
Net asset value, end of period $21.58 $19.10 $16.25
-----------------------------------------------------
Total Return
Total investment return based on net
asset value(e) 12.98% 17.54%(e) (2.05)%
Ratios/Supplemental Data
Net assets, end of period (000's
omitted) $688 $107 $10
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 1.73%(f)(g) 1.59% 1.70%(g)
Expenses, before waivers/reimbursements 1.73%(f)(g) 1.62% 1.95%(g)
Net investment loss (1.17)%(f)(g) (.90)%(c) (1.08)%(c)(d)(g)
Portfolio turnover rate 34% 56% 61%
See footnote summary on page 35
ALLIANCEBERNSTEIN LARGE CAP GROWTH FUND o 33
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class K
----------------------------------
Six Months
Ended March 1,
January 31, 2005(h) to
2006 July 31,
(unaudited) 2005
----------------------------------
Net asset value, beginning of period $19.19 $17.63
----------------------------------
Income From Investment Operations
Net investment loss(b) (.10) (.04)
Net realized and unrealized gain on
investment transactions 2.63 1.60
----------------------------------
Net increase in net asset value from
operations 2.53 1.56
----------------------------------
Net asset value, end of period $21.72 $19.19
----------------------------------
Total Return
Total investment return based on net
asset value(e) 13.18% 8.85%
Ratios/Supplemental Data
Net assets, end of period (000's
omitted) $69 $11
Ratio to average net assets of:
Expenses(g) 1.42%(f) 1.03%
Net investment loss(g) (.86)%(f) (.48)%
Portfolio turnover rate 34% 56%
See footnote summary on page 35.
34 o ALLIANCEBERNSTEIN LARGE CAP GROWTH FUND
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class I
----------------------------------
Six Months
Ended March 1,
January 31, 2005(h) to
2006 July 31,
(unaudited) 2005
----------------------------------
Net asset value, beginning of period $19.20 $17.63
----------------------------------
Income From Investment Operations
Net investment loss(b) (.07) (.02)
Net realized and unrealized gain on
investment transactions 2.63 1.59
----------------------------------
Net increase in net asset value from
operations 2.56 1.57
----------------------------------
Net asset value, end of period $21.76 $19.20
----------------------------------
Total Return
Total investment return based on net
asset value(e) 13.33% 8.90%
Ratios/Supplemental Data
Net assets, end of period (000's
omitted) $2,605 $11
Ratio to average net assets of:
Expenses(g) 1.09%(f) .83%
Net investment loss(g) (.53)%(f) (.27)%
Portfolio turnover rate 34% 56%
(a) The Fund changed its fiscal year end from November 30 to July 31.
(b) Based on average shares outstanding.
(c) Net of fees and expenses waived/reimbursed by the Adviser.
(d) Net of fees and expenses waived/reimbursed by the Transfer Agent.
(e) 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.
(f) The ratio includes expenses attributable to estimated costs of proxy
solicitation.
(g) Annualized.
(h) Commencement of distributions.
ALLIANCEBERNSTEIN LARGE CAP GROWTH FUND o 35
RESULTS OF SHAREHOLDERS MEETING
(unaudited)
The Annual Meeting of Stockholders of AllianceBernstein Large Cap Growth Fund
(the "Fund") was held on November 15, 2005 and adjourned until December 6,
2005, December 19, 2005, December 21, 2005 and December 22, 2005. At the
November 15, 2005 Meeting, with respect to the first item of business, the
election of Directors, the required number of outstanding shares were voted in
favor of the proposal, and the proposal was approved. At the December 21, 2005
Meeting, the required number of outstanding shares voted in favor of the third
item of business, the amendment, elimination or reclassification as
non-fundamental of certain investment restrictions, and the fourth item of
business, the reclassification of the Fund's investment objective as
non-fundamental with changes to the Fund's investment objectives, and the
proposals were approved. With respect to the second item of business, the
amendment and restatement of the Fund's charter, an insufficient number of
required outstanding shares voted in favor of the proposal and therefore the
proposal was not approved. A description of each proposal and number of shares
voted at the Meetings are as follows (the proposal numbers shown below
correspond to the proposal numbers in the Fund's proxy statement):
1. The election of the Directors, each such Director to serve a term of an
indefinite duration and until his or her successor is duly elected and
qualifies.
Withheld
Voted For Authority
- -------------------------------------------------------------------
Ruth Block 107,385,397 4,085,161
David H. Dievler 107,378,784 4,091,775
John H. Dobkin 107,520,071 3,950,487
Michael J. Downey 107,522,680 3,947,878
William H. Foulk, Jr. 107,469,964 4,000,594
D. James Guzy 106,450,279 5,020,279
Marc O. Mayer 107,425,069 4,045,489
Marshall C. Turner, Jr. 107,517,602 3,952,956
Voted Broker
Voted For Against Abstained Non-Votes
- -------------------------------------------------------------------------------
2. Approve the 70,225,778 2,571,272 3,655,717 0
Amendment and
Restoration
Order
3. The amendment, elimination, or reclassification as non-fundamental, of
the fundamental investment restrictions regarding:
Voted Broker
Voted For Against Abstained Non-Votes
- -------------------------------------------------------------------------------
3.A. Diversification 73,487,770 3,663,397 1,892,663 24,819,307
3.B. Issuing Senior 73,308,926 3,885,599 1,849,305 24,819,307
Securities
and Borrowing
Money
3.C. Underwriting 73,365,966 3,801,212 1,876,652 24,819,3
Securities07
3.D. Concentration of 73,439,518 3,728,142 1,876,170 24,819,307
Investments
36 o ALLIANCEBERNSTEIN LARGE CAP GROWTH FUND
Voted Broker
Voted For Against Abstained Non-Votes
- -------------------------------------------------------------------------------
3.E. Real Estate and 73,391,336 3,783,703 1,868,791 24,819,307
Companies that
Deal in Real
Estate
3.F. Commodity 73,235,330 3,942,455 1,866,045 24,819,307
Contracts
and Futures
Contracts
3.G. Loans 73,223,880 3,977,378 1,842,572 24,819,307
3.H. Joint Securities 73,332,246 3,816,615 1,894,969 24,819,307
Trading Accounts
3.I. Exercising 73,483,001 3,664,351 1,896,477 24,819,307
Control
3.J. Other Investment 73,360,010 3,753,411 1,930,409 24,819,307
Companies
3.K. Oil, Gas and 73,470,042 3,675,327 1,898,461 24,819,307
Other Types of
Minerals or
Mineral Leases
3.L. Purchases of 73,204,904 3,992,378 1,846,547 24,819,307
Securities
on Margin
3.M. Short Sales 73,318,205 3,866,125 1,859,500 24,819,307
3.N. Pledging, 73,152,649 4,003,759 1,887,421 24,819,307
Hypothecating,
Mortgaging,
or Otherwise
Encumbering
Assets
3.P. Warrants 73,220,653 3,860,111 1,963,066 24,819,307
3.Q. Unseasoned 73,190,665 3,950,179 1,902,986 24,819,307
Companies
3.R. Requirement to 73,402,642 3,753,289 1,887,899 24,819,307
Invest in
Specific
Investments
3.T. Securities of 73,240,657 3,975,819 1,827,354 24,819,307
Issuers in
which Officers,
or Directors,
or Partners have
an Interest
3.V. Options 73,315,531 3,854,943 1,873,355 24,819,307
Transactions
3.Y. Transactions 73,305,221 3,864,904 1,873,704 24,819,307
Effected Through
Affiliated Broker-
Dealer
3.Z. Meetings Called 73,636,196 3,581,434 1,826,200 24,819,307
by Stockbrokers
4.B. The 70,613,502 4,191,093 4,239,235 24,819,307
Reclassification
as Non-Fundamental
and Changes to
Specific Fund's
Investment
Objectives
ALLIANCEBERNSTEIN LARGE CAP GROWTH FUND o 37
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(1)
Marshall C. Turner, Jr.(1)
OFFICERS
Philip L. Kirstein, Senior Vice President and Independent Compliance Officer
Thomas J. Bardong, Vice President
David P. Handke, Jr.(2), Vice President
Syed J. Hasnain(2), Vice President
Daniel Nordby, Vice President
Michael J. Reilly(2), Vice President
James G. Reilly(2), Vice President
P. Scott Wallace(2), Vice President
Emilie D. Wrapp, Secretary
Mark D. Gersten, Treasurer & Chief Financial Officer
Vincent S. Noto, Controller
Custodian
State Street Bank & Trust Company
One Lincoln Street
Boston, MA 02111
Principal Underwriter
AllianceBernstein Investments, Inc.
1345 Avenue of the Americas
New York, NY 10105
Transfer Agent
AllianceBernstein Investor Services, Inc.
P.O. Box 786003
San Antonio, TX 78278-6003
Toll-Free (800) 221-5672
Independent Registered
Public Accounting Firm
PricewaterhouseCoopers LLP
300 Madison Avenue
New York, NY 10017
Legal Counsel
Seward & Kissel LLP
One Battery Park Plaza
New York, NY 10004
(1) Member of the Audit Committee, the Governance and Nominating Committee
and the Independent Directors Committee.
(2) The day-to-day management of and investment decisions for the
AllianceBernstein Large Cap Growth Fund's portfolio are made by the Adviser's
Large Cap Growth Team, which is responsible for management of all of the
Adviser's Large Cap Growth accounts. While all members of the team work jointly
to determine the majority of the investment strategy, including stock selection
for the Adviser's Large Cap Growth accounts, Messrs. Syed J. Hasnain, David P.
Handke, Jr., Michael J. Reilly, James G. Reilly and P. Scott Wallace, members
of the Adviser's Large Cap Growth Investment Team, are primarily responsible
for day-to-day management of, and have oversight and trading responsibilities
for, the Fund's portfolio.
38 o ALLIANCEBERNSTEIN LARGE CAP GROWTH FUND
ALLIANCEBERNSTEIN FAMILY OF FUNDS
- -------------------------------------------------------------------------------
Wealth Strategies Funds
- -------------------------------------------------------------------------------
Balanced Wealth Strategy
Wealth Appreciation Strategy
Wealth Preservation Strategy
Tax-Managed Balanced Wealth Strategy
Tax-Managed Wealth Appreciation Strategy
Tax-Managed Wealth Preservation Strategy
- -------------------------------------------------------------------------------
Blended Style Funds
- -------------------------------------------------------------------------------
U.S. Large Cap Portfolio
International Portfolio
Tax-Managed International Portfolio
- -------------------------------------------------------------------------------
Growth Funds
- -------------------------------------------------------------------------------
Domestic
Growth Fund
Mid-Cap Growth Fund
Large Cap Growth Fund
Small Cap Growth Portfolio
Global & International
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
- -------------------------------------------------------------------------------
Global Government Income Trust*
Corporate Bond Portfolio
Emerging Market Debt Fund
Global Strategic Income Trust
High Yield Fund
Multi-Market Strategy Trust
Intermediate Bond Portfolio*
Short Duration Portfolio
U.S. Government Portfolio
- -------------------------------------------------------------------------------
Municipal Bond Funds
- -------------------------------------------------------------------------------
National Michigan
Insured National Minnesota
Arizona New Jersey
California New York
Insured California Ohio
Florida Pennsylvania
Massachusetts 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
- -------------------------------------------------------------------------------
Retirement Strategies Funds
- -------------------------------------------------------------------------------
2000 Retirement Strategy
2005 Retirement Strategy
2010 Retirement Strategy
2015 Retirement Strategy
2020 Retirement Strategy
2025 Retirement Strategy
2030 Retirement Strategy
2035 Retirement Strategy
2040 Retirement Strategy
2045 Retirement Strategy
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 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. Prior to February 1, 2006,
Global Government Income Trust was named Americas Government Income Trust and
Intermediate Bond Portfolio was named Quality Bond Portfolio.
** 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 LARGE CAP GROWTH FUND o 39
THE FOLLOWING IS NOT PART OF THE SHAREHOLDER REPORT OR THE FINANCIAL STATEMENTS
SUMMARY OF SENIOR OFFICER'S EVALUATION OF
INVESTMENT ADVISORY AGREEMENT*
The following is a summary of the evaluation of the investment advisory
agreement between Alliance Capital Management L.P., (the "Adviser") and the
AllianceBernstein Large Cap Growth Fund, 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 Boards of Directors 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 providing 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
* It should be noted that the information in the fee summary was completed on
June 8, 2005 and presented to the Board of Directors and Trustees on June 15,
2005 in accordance with the Assurance of Discontinuance with the New York State
Attorney General. 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.
40 o ALLIANCEBERNSTEIN LARGE CAP GROWTH FUND
January 2004 as a result of the settlement with the New York State Attorney
General.
Advisory Fee Based on % of
Average Daily Net Assets
- -------------------------------------------------------------------------------
AllianceBernstein Large Cap Growth Fund, Inc. First $2.5 billion .75%
Next $2.5 billion .65%
Excess over $5 billion .60%
The table below shows pro-forma expense ratio information for the Fund for its
most recent fiscal year.
Pro-Forma Fiscal
Expense Ratio* Year End
- -------------------------------------------------------------------------------
AllianceBernstein Large Cap Growth Fund, Inc. Advisor-1.19% July 31, 2004
Class A-1.49%
Class B-2.24%
Class C-2.21%
Class R-1.15%
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:
Latest
Fiscal Year As % of Average
Amount Daily Net Assets
- -------------------------------------------------------------------------------
AllianceBernstein Large Cap Growth Fund, Inc. $111,000.00 .002
I. MANAGEMENT FEES CHARGED TO INSTITUTIONAL AND OTHER CLIENTS OF THE ADVISER
The management fees charged to investment companies which the Adviser manages
and sponsors may be higher than those charged to institutional accounts,
including pension plans and sub-advised investment companies. The fee
differential reflects, among other things, different services provided to such
clients, and different liabilities assumed. Services provided by the Adviser to
the Fund that are not provided to non-investment company clients include
providing office space and personnel to serve as Fund Officers and coordinating
with and monitoring the Fund's third party service providers such as Fund
counsel, auditors, custodians, transfer agents and pricing services. The
accounting, administrative and legal/compliance requirements for the Fund are
more costly than those for institutional assets due to the greater complexities
and time required for investment companies. A portion of the expenses related
to these services are reimbursed by the Fund to the Adviser. Managing the cash
flow of an investment company may be more difficult than for other accounts,
particularly if the Fund is in net redemptions, as the Adviser is forced to
sell securities to meet redemptions.
* This pro-forma expense ratio information shows what would have been the
Fund's expense ratio in the indicated fiscal year had the current fee been in
effect throughout the fiscal year.
ALLIANCEBERNSTEIN LARGE CAP GROWTH FUND o 41
Notwithstanding the Adviser's view that managing an investment company is not
comparable to managing other institutional accounts because the services
provided are different, the Senior Officer believes it is worth noting the
information from the Adviser's ADV regarding the advisory fees charged to
institutional accounts in the same asset class as the Fund.
Total
Net Assets Alliance
03/31/05 Institutional
($MIL) Fee Schedule
- -------------------------------------------------------------------------------
AllianceBernstein Large Cap
Growth Fund, Inc. 4,287 Large Cap
Growth Schedule
80bp on 1st $25m
50bp on next $25m
40bp on next $50m
30bp on next $100m
25bp on the balance
Minimum accounts size $10m
The Adviser provides sub-advisory investment services to certain other
investment companies managed by other fund families that have similar
investment styles as the Fund. Set forth below are the names and fee schedules
of the funds sub-advised by the Adviser that have the same investment style as
the Fund:
Sub-advised Fund Fee Schedule
- -------------------------------------------------------------------------------
AllianceBernstein AST Alliance Growth 0.40% flat
Large Cap Growth
Fund, Inc. Prudential Skandia Large 0.60% on first $500 million
Cap Growth Portfolio 0.50% thereafter
EQ / Alliance Premier 0.60% on the first $1 billion
Growth 0.55% on the next $500 million
0.50% on the next $500 million
0.45% on the next $500 million
0.40% thereafter
EQ / Bernstein Diversified 0.50% on first $1 billion
Value 0.40% on next $1 billion
0.30% on next $1 billion
0.20% thereafter
SunAmerica Alliance Growth 0.35% on first $50 million
0.30% on next $100 million
0.25% thereafter
MassMutual Large Cap 0.40% on first $300 million
Growth 0.37% on next $300 million
0.35% on next $300 million
0.32% on next $600 million
0.25% thereafter
42 o ALLIANCEBERNSTEIN LARGE CAP GROWTH FUND
The Adviser also manages and sponsors retail mutual funds organized in
jurisdictions outside the United States, generally Luxembourg, and sold to
non-United States investors. The Adviser charges the following fee for an
offshore mutual fund with a similar investment style as the Fund:
Asset Class Fee
- -------------------------------------------------------------------------------
Equity Growth .80%
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 advisory fees relative
to the Lipper group median at the approximate current asset level for the Fund.*
Lipper Group
Fee Median Rank
- -------------------------------------------------------------------------------
AllianceBernstein Large Cap Growth Fund, Inc. 0.708 0.708 8/14
Lipper also analyzed the expense ratio of the Fund in comparison to its Lipper
Expense Group** and Lipper Expense Universe***. Lipper describes a Lipper
Expense Group as a representative sample of comparable funds and a Lipper
Universe as a broader group, consisting of all funds in the investment
classification/objective with a similar load type as the subject Fund. The
results of that analysis are set forth below:
Lipper Lipper Lipper
Expense Universe Universe Lipper Group
Ratio Median Rank Group Rank Median
- -------------------------------------------------------------------------------
AllianceBernstein Large
Cap Growth Fund, Inc. 1.470 1.380 75/116 13/14 1.218
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.
* A ranking of "1" means that the AllianceBernstein Fund has the lowest
effective fee rate in the Lipper peer group.
** 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.
*** Except for asset (size) comparability, 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 advisor to be
represented by more than just one fund.
ALLIANCEBERNSTEIN LARGE CAP GROWTH FUND o 43
III. COSTS TO THE ADVISER AND ITS AFFILIATES OF SUPPLYING SERVICES PURSUANT TO
THE ADVISORY AGREEMENT, EXCLUDING ANY INTRA-CORPORATE PROFIT.
The profitability information for the Fund prepared by the Adviser for the
Board of the 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 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 for 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 pursuant to
the investment advisory agreement, certain of the Adviser's affiliates have
business relationships with the Fund and may earn a profit from providing other
services to the Fund. These affiliates provide transfer agency and distribution
related services and receive transfer agent fees, Rule 12b-1 payments,
front-end sales loads, contingent deferred sales charges ("CDSC") and
commissions for providing brokerage services. In addition, the Adviser benefits
from soft dollar arrangements which offset expenses the Adviser would otherwise
incur. Additional information regarding distribution related fees can be found
in the prospectus of the Fund.
Different classes of shares are charged different types of distribution fees.
The Adviser's affiliate, AllianceBernstein Investment Research and Management
Inc. ("ABIRM"), is the Fund's principal underwriter. ABIRM and the Adviser may
make payments* from their own resources, in addition to sales loads and Rule
12b-1 fees, to firms that sell shares of the Fund. In 2004, ABIRM paid from its
own resources approximately .04% of the average monthly assets of the Fund for
distribution services and educational support. For 2005, it is anticipated that
ABIRM will pay approximately .04% of average monthly assets of the Fund for
such purposes.
* 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.
44 o ALLIANCEBERNSTEIN LARGE CAP GROWTH FUND
After payments to third party intermediaries, ABIRM retained the following
amount in Class A front-end load sales charges from sales of the Fund's shares
in the Fund's most recent fiscal year:
Amount Received
- -------------------------------------------------------------------------------
AllianceBernstein Large Cap Growth Fund, Inc. $47,224
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-1Fee
Received* CDSC Received
- -------------------------------------------------------------------------------
AllianceBernstein Large Cap Growth Fund, Inc. $37,430,814 $3,164,195
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:
AGIS Fee
- -------------------------------------------------------------------------------
AllianceBernstein Large Cap Growth Fund $14,390,000
The Fund effected brokerage transactions through the Adviser's affiliate,
Sanford C. Bernstein & Co. LLC ("SCB"), and paid commissions during the Fund's
recent fiscal year. The Adviser represented that SCB's profitability from
business conducted with the Fund is comparable to the profitability of SCB's
dealings with other third party clients.
V. POSSIBLE ECONOMIES OF SCALE
The Adviser has indicated that the breakpoints in the fee schedule for the Fund
reflect a sharing of economies of scale to the extent they exist. Based on some
of the professional literature that have 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
* 12b-1 amounts are gross amounts paid to ABIRM.
ALLIANCEBERNSTEIN LARGE CAP GROWTH FUND o 45
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 the lack of cost
data which forced the researchers 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.
VI. NATURE AND QUALITY OF THE ADVISER'S SERVICES INCLUDING PERFORMANCE OF THE
FUND.
With assets under management of $534.4 billion as of March 31, 2005, the
Adviser has the investment experience and resources necessary to effectively
manage the Fund 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 relative to its Lipper universe:
Performance Year
Rank in Performance Universe for Periods
Ended March 31, 2005
- -------------------------------------------------------------------------------
1 3 5 10
- -------------------------------------------------------------------------------
AllianceBernstein Large Cap
Growth Fund, Inc. 93/132 106/118 83/102 12/37
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: July 22, 2005
46 o ALLIANCEBERNSTEIN LARGE CAP GROWTH FUND
NOTES
ALLIANCEBERNSTEIN LARGE CAP GROWTH FUND o 47
NOTES
48 o ALLIANCEBERNSTEIN LARGE CAP GROWTH FUND
ALLIANCEBERNSTEIN LARGE CAP GROWTH FUND
1345 Avenue of the Americas
New York, NY 10105
(800) 221-5672
[LOGO]
ALLIANCEBERNSTEIN
INVESTMENTS
LCG-0152-0106
ITEM 2. CODE OF ETHICS.
Not applicable when filing a semi-annual report to shareholders.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable when filing a semi-annual report to shareholders.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable when filing a semi-annual report to shareholders.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable to the registrant.
ITEM 6. SCHEDULE OF INVESTMENTS.
Please see Schedule of Investments contained in the Report to Shareholders
included under Item 1 of this Form N-CSR.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable to the registrant.
ITEM 8. 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 (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 Large-Cap Growth Fund, Inc.
By: /s/ Marc O. Mayer
-----------------
Marc O. Mayer
President
Date: March 31, 2006
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/ Marc O. Mayer
-----------------
Marc O. Mayer
President
Date: March 31, 2006
By: /s/ Mark D. Gersten
-----------------
Mark D. Gersten
Treasurer and Chief Financial Officer
Date: March 31, 2006