UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-07618
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
(Exact name of registrant as specified in charter)
1345 Avenue of the Americas, New York, New York 10105
(Address of principal executive offices) (Zip code)
Mark R. Manley
Alliance Capital Management L.P.
1345 Avenue of the Americas
New York, New York 10105
(Name and address of agent for service)
Registrant's telephone number, including area code: (800) 221-5672
Date of fiscal year end: September 30, 2006
Date of reporting period: March 31, 2006
ITEM 1. REPORTS TO STOCKHOLDERS.
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SEMI-ANNUAL REPORT
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AllianceBernstein Municipal Income Fund II
Arizona Portfolio
Florida Portfolio
Massachusetts Portfolio
Michigan Portfolio
Minnesota Portfolio
New Jersey Portfolio
Ohio Portfolio
Pennsylvania Portfolio
Virginia Portfolio
Semi-Annual Report
March 31, 2006
[LOGO]
ALLIANCEBERNSTEIN
INVESTMENTS
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 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.
May 18, 2006
Semi-Annual Report
This report provides management's discussion of fund performance for the
portfolios of AllianceBernstein Municipal Income Fund II (the "Portfolios") for
the semi-annual reporting period ended March 31, 2006.
Investment Objectives and Policies
The nine portfolios of this open-end fund, by investing principally in
high-yielding, predominantly medium-quality municipal securities, seek to
provide their shareholders with the highest level of income exempt from Federal
and state personal income tax (or for Florida, the intangible tax) that is
available without assuming undue risk. These securities generally offer current
yields above those of higher-quality municipal obligations.
Investment Results
The tables on pages 5-7 show performance for each Portfolio compared to its
benchmark, the Lehman Brothers (LB) Municipal Index, for the six- and 12-month
periods ended March 31, 2006. For the six-month period ended March 31, 2006,
all of the AllianceBernstein Municipal Income Fund II Portfolios' Class A
shares, with the exception of the Massachusetts Portfolio, outperformed the
benchmark, the LB Municipal Index, which represents the municipal market and
posted a positive return of 0.98%. For the 12-month period, all of the
Portfolio's Class A shares outperformed the benchmark.
A description of each Portfolio's relative performance versus the benchmark for
the six-month reporting period ended March 31, 2006 follows.
Arizona Portfolio-The Arizona Portfolio's stronger relative performance was
largely the result of security selection in the hospital and special tax
sectors.
Florida Portfolio-The Florida Portfolio's stronger relative performance was
largely the result of security selection in the special tax, housing and
insured sectors. The Portfolio's relative weight in the housing sector also
contributed to positive relative performance.
Massachusetts Portfolio-The Massachusetts Portfolio's relative underperformance
compared to the benchmark was largely the result of security selection in the
transportation and general obligation sectors. The Portfolio's relative weight
in the airport, general obligation, hospital and housing sectors contributed
positively to performance.
Michigan Portfolio-The Michigan Portfolio's stronger relative performance was
largely the result of security selection in the special tax and pre-refunded
sectors. The Portfolio's relative weight in the hospital and housing sectors
also contributed positively to performance. Security selection in the power
sector detracted from the Portfolio's performance.
Minnesota Portfolio-The Minnesota Portfolio's stronger relative performance was
largely the result of its relative weight in the housing and pre-refunded
sectors. Security selection
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 1
in the housing sector also contributed to positive relative performance.
Security selection in the insured sector detracted from the Portfolio's
performance.
New Jersey Portfolio-The New Jersey Portfolio's stronger relative performance
was largely the result of security selection in the special tax sector. The
Portfolio's relative weight in the pre-refunded and hospital sectors also
contributed to positive relative performance.
Ohio Portfolio-The Ohio Portfolio's stronger relative performance was largely
the result of its relative weight in the industrial revenue bond, housing and
pre-refunded sectors. The Portfolio benefited from security selection in the
general obligation and insured sectors. Security selection in the industrial
revenue bond sector detracted from the Portfolio's performance.
Pennsylvania Portfolio-The Pennsylvania Portfolio's stronger relative
performance was largely the result of its relative weight in the pre-refunded,
hospital and housing sectors. The Portfolio benefited from security selection
in the insured and pre-refunded sectors. Security selection in the housing
sector detracted from the Portfolio's performance.
Virginia Portfolio-The Virginia Portfolio's stronger relative performance was
largely the result of security selection in the pre-refunded, education and
special tax sectors. The Portfolio's relative weight in the housing sector also
contributed to positive relative performance.
Market Review and Investment Strategy
Since March 2005, the U.S. Federal Reserve (the "Fed") has raised the target
for the Federal Funds rate from 2.75% to 4.75%; 0.75% of that increase was
since September 2005. In response to the Fed's action, the yields for most
maturities of domestic bonds increased. Municipal bond yields in general rose,
but less than U.S. Treasury bonds increased. For example, over the six-month
period ended March 31, 2006, 10-year and 30-year municipal bond yields
increased 0.26% and 0.04%, respectively. Over the same time period, 10-year and
30-year U.S. Treasury bond yields rose 0.52% and 0.38%, respectively. The
outperformance for municipal bonds largely resulted from relatively light
supply-the amount of bonds issued in the first quarter of 2006 was down 29%
from the first quarter of 2005. Municipal bond prices have also been supported
by ongoing demand from a diverse set of investors. These investors include
traditional buyers such as U.S. individuals, as well as relatively newer
municipal market participants, such as hedge funds and other institutional
leveraged investors. The municipal market showed similar relative performance
over the 12-month period ended March 31, 2005. For this 12-month period,
despite 10-year U.S. Treasury
2 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
yields increasing 0.38% and 30-year U.S. Treasury yields increasing 0.17%,
10-year municipal yields only rose 0.15%, and 30-year municipal yields actually
declined 0.10%.
The market for lower-credit quality, or high-yield, municipal bonds continues
to post even stronger returns than the general municipal market. The LB High
Yield Municipal Index returned 4.68% over six-month period ended March 31, 2006
and 9.12% over the 12-month period ended March 31, 2006. This compares to 0.98%
and 3.81% for the same periods for the LB Municipal Index, which represents the
overall general market for investment grade municipal bonds. The strong
performance for lower-credit quality municipal bonds was in part due to the
relatively favorable credit environment, but of more importance, due to the
continued, very strong demand for higher yielding bonds. According to AMG Data,
a provider of mutual fund money flow and holdings data, new money into high
yield municipal bond mutual funds accounted for 40% of the flow in municipal
bond mutual funds in the first quarter of 2006. By comparison, high-yield bonds
represent only approximately 4% of the municipal market.
For most of the past year, the Portfolios' Municipal Bond Investment Team (the
"team") has followed a similar strategy. Given that interest rates are still
relatively low compared to the level of inflation, the team continues to
maintain less interest rate exposure than that of the Portfolios' benchmark.
Also, because high-yield municipals have displayed such strong performance, the
team has reduced the Portfolios' exposure to such holdings and further
diversified the Portfolios' remaining holdings. Recently, as market conditions
allow, the team has also been selling longer-maturity holdings and replacing
them with bonds with shorter maturities. In the team's view, these
shorter-maturity holdings should outperform longer-maturity bonds if rates rise
and the difference between long and short yields increases.
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 3
HISTORICAL PERFORMANCE
An Important Note About the Value of Historical Performance
The performance shown on the following pages represents past performance and
does not guarantee future results. Current performance may be lower or higher
than the performance information shown. You may obtain performance information
current to the most recent month-end by visiting www.alliancebernstein.com.
The investment return and principal value of an investment in the Portfolios
will fluctuate, so that your shares, when redeemed, may be worth more or less
than their original cost. You should consider the investment objectives, risks,
charges and expenses of the Portfolios carefully before investing. For a free
copy of the Portfolios' prospectus, which contains this and other information,
visit our web site at www.alliancebernstein.com or call your financial advisor
or AllianceBernstein Investments at (800) 227-4618. You should read the
prospectus carefully before you invest.
Returns are annualized for periods longer than one year. All fees and expenses
related to the operation of the Portfolios have been deducted. NAV returns do
not reflect sales charges; if sales charges were reflected, the Portfolios'
quoted performance would be lower. SEC returns reflect the applicable sales
charges for each share class: a 4.25% maximum front-end sales charge for Class
A shares; the applicable contingent deferred sales charge for Class B shares
(3% year 1, 2% year 2, 1% year 3, 0% year 4); a 1% 1 year contingent deferred
sales charge for Class C shares. 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
The unmanaged Lehman Brothers (LB) Municipal Index does not reflect fees and
expenses associated with the active management of a mutual fund portfolio. The
Index is a total return performance benchmark for the long-term investment
grade, tax-exempt bond market. An investor cannot invest directly in an index,
and its results are not indicative of the performance for any specific
investment, including the Portfolios.
A Word About Risk
Price fluctuations may be caused by changes in the general level of interest
rates or changes in bond credit quality ratings. Please note, as interest rates
rise, existing bond prices fall and can cause the value of an investment in the
Portfolios to decline. Changes in interest rates have a greater effect on bonds
with longer maturities than on those with shorter maturities. The individual
state municipal portfolios are non-diversified and are subject to geographic
risk based on their narrow investment objectives. The Portfolios may invest in
high yield bonds (i.e., "junk bonds") which involves a greater risk of default
and price volatility than other bonds. Investing in non-investment grade
presents special risks, including credit risk. While the Portfolios invest
principally in bonds and other fixed-income securities, in order to achieve
their investment objectives, the Portfolios may at times use certain types of
investment derivatives, such as options, futures, forwards and swaps. These
instruments involve risks different from, and in certain cases, greater than,
the risks presented by more traditional investments. These risks are fully
discussed in the Portfolios' prospectus.
(Historical Performance continued on next page)
4 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
HISTORICAL PERFORMANCE
(continued from previous page)
THE PORTFOLIOS VS. THEIR BENCHMARKS
PERIODS ENDED MARCH 31, 2006
Returns
--------------------------
6 Months 12 Months
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Arizona Portfolio
Class A 1.08% 4.03%
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Class B 0.73% 3.34%
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Class C 0.73% 3.33%
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LB Municipal Index 0.98% 3.81%
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Returns
--------------------------
6 Months 12 Months
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Florida Portfolio
Class A 1.37% 4.38%
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Class B 1.02% 3.77%
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Class C 1.02% 3.75%
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LB Municipal Index 0.98% 3.81%
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Returns
--------------------------
6 Months 12 Months
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Massachusetts Portfolio
Class A 0.91% 4.02%
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Class B 0.57% 3.33%
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Class C 0.57% 3.31%
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LB Municipal Index 0.98% 3.81%
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See Historical Performance and Benchmark disclosures on page 4.
(Historical Performance continued on next page)
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 5
HISTORICAL PERFORMANCE
(continued from previous page)
THE PORTFOLIOS VS. THEIR BENCHMARKS
PERIODS ENDED MARCH 31, 2006
Returns
--------------------------
6 Months 12 Months
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Michigan Portfolio
Class A 1.26% 4.43%
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Class B 0.91% 3.63%
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Class C 0.82% 3.61%
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LB Municipal Index 0.98% 3.81%
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Returns
--------------------------
6 Months 12 Months
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Minnesota Portfolio
Class A 1.20% 3.92%
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Class B 0.84% 3.29%
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Class C 0.84% 3.19%
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LB Municipal Index 0.98% 3.81%
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Returns
--------------------------
6 Months 12 Months
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New Jersey Portfolio
Class A 1.24% 4.05%
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Class B 0.88% 3.21%
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Class C 0.89% 3.22%
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LB Municipal Index 0.98% 3.81%
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See Historical Performance and Benchmark disclosures on page 4.
(Historical Performance continued on next page)
6 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
HISTORICAL PERFORMANCE
(continued from previous page)
THE PORTFOLIOS VS. THEIR BENCHMARKS
PERIODS ENDED MARCH 31, 2006
Returns
--------------------------
6 Months 12 Months
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Ohio Portfolio
Class A 1.07% 3.91%
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Class B 0.72% 3.09%
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Class C 0.72% 3.09%
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LB Municipal Index 0.98% 3.81%
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Returns
--------------------------
6 Months 12 Months
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Pennsylvania Portfolio
Class A 1.17% 4.28%
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Class B 0.81% 3.55%
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Class C 0.81% 3.56%
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LB Municipal Index 0.98% 3.81%
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Returns
--------------------------
6 Months 12 Months
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Virginia Portfolio
Class A 1.54% 4.60%
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Class B 1.19% 3.85%
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Class C 1.28% 3.90%
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LB Municipal Index 0.98% 3.81%
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See Historical Performance and Benchmark disclosures on page 4.
(Historical Performance continued on next page)
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 7
ARIZONA PORTFOLIO
HISTORICAL PERFORMANCE
(continued from previous page)
AVERAGE ANNUAL RETURNS AS OF MARCH 31, 2006
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NAV Returns SEC Returns
Class A Shares
1 Year 4.03% -0.42%
5 Years 5.27% 4.37%
10 Years 6.19% 5.73%
SEC Yield* 3.57%
Taxable Equivalent Yield** 5.78%
Class B Shares
1 Year 3.34% 0.34%
5 Years 4.56% 4.56%
10 Years(a) 5.75% 5.75%
SEC Yield* 3.04%
Taxable Equivalent Yield** 4.93%
Class C Shares
1 Year 3.33% 2.33%
5 Years 4.56% 4.56%
10 Years 5.46% 5.46%
SEC Yield* 3.04%
Taxable Equivalent Yield** 4.93%
SEC AVERAGE ANNUAL RETURNS (WITH ANY APPLICABLE SALES CHARGES)
AS OF THE MOST RECENT CALENDAR QUARTER-END (MARCH 31, 2006)
- --------------------------------------------------------------
Class A Shares
1 Year -0.42%
5 Years 4.37%
10 Years 5.73%
Class B Shares
1 Year 0.34%
5 Years 4.56%
10 Years(a) 5.75%
Class C Shares
1 Year 2.33%
5 Years 4.56%
10 Years 5.46%
(a) Assumes conversion of Class B shares into Class A shares after six years.
* SEC Yields are calculated based on SEC guidelines for the 30-day period
ended March 31, 2006.
** Taxable equivalent yields are based on SEC yields and a 35% marginal
Federal income tax rate and maximum state, city and local taxes where
applicable.
See Historical Performance disclosures on page 4.
(Historical Performance continued on next page)
8 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
FLORIDA PORTFOLIO
HISTORICAL PERFORMANCE
(continued from previous page)
AVERAGE ANNUAL RETURNS AS OF MARCH 31, 2006
- --------------------------------------------------------------
NAV Returns SEC Returns
Class A Shares
1 Year 4.38% -0.03%
5 Years 5.29% 4.38%
10 Years 5.91% 5.44%
SEC Yield* 3.80%
Taxable Equivalent Yield** 5.85%
Class B Shares
1 Year 3.77% 0.77%
5 Years 4.58% 4.58%
10 Years(a) 5.45% 5.45%
SEC Yield* 3.26%
Taxable Equivalent Yield** 5.02%
Class C Shares
1 Year 3.75% 2.75%
5 Years 4.58% 4.58%
10 Years 5.16% 5.16%
SEC Yield* 3.26%
Taxable Equivalent Yield** 5.02%
SEC AVERAGE ANNUAL RETURNS (WITH ANY APPLICABLE SALES CHARGES)
AS OF THE MOST RECENT CALENDAR QUARTER-END (MARCH 31, 2006)
- --------------------------------------------------------------
Class A Shares
1 Year -0.03%
5 Years 4.38%
10 Years 5.44%
Class B Shares
1 Year 0.77%
5 Years 4.58%
10 Years(a) 5.45%
Class C Shares
1 Year 2.75%
5 Years 4.58%
10 Years 5.16%
(a) Assumes conversion of Class B shares into Class A shares after six years.
* SEC Yields are calculated based on SEC guidelines for the 30-day period
ended March 31, 2006.
** Taxable equivalent yields are based on SEC yields and a 35% marginal
Federal income tax rate and maximum state, city and local taxes where
applicable.
See Historical Performance disclosures on page 4.
(Historical Performance continued on next page)
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 9
MASSACHUSETTS PORTFOLIO
HISTORICAL PERFORMANCE
(continued from previous page)
AVERAGE ANNUAL RETURNS AS OF MARCH 31, 2006
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NAV Returns SEC Returns
Class A Shares
1 Year 4.02% -0.38%
5 Years 4.69% 3.77%
10 Years 6.06% 5.60%
SEC Yield* 3.41%
Taxable Equivalent Yield** 5.54%
Class B Shares
1 Year 3.33% 0.33%
5 Years 3.98% 3.98%
10 Years(a) 5.64% 5.64%
SEC Yield* 2.87%
Taxable Equivalent Yield** 4.66%
Class C Shares
1 Year 3.31% 2.32%
5 Years 3.98% 3.98%
10 Years 5.35% 5.35%
SEC Yield* 2.86%
Taxable Equivalent Yield** 4.65%
SEC AVERAGE ANNUAL RETURNS (WITH ANY APPLICABLE SALES CHARGES)
AS OF THE MOST RECENT CALENDAR QUARTER-END (MARCH 31, 2006)
- --------------------------------------------------------------
Class A Shares
1 Year -0.38%
5 Years 3.77%
10 Years 5.60%
Class B Shares
1 Year 0.33%
5 Years 3.98%
10 Years(a) 5.64%
Class C Shares
1 Year 2.32%
5 Years 3.98%
10 Years 5.35%
(a) Assumes conversion of Class B shares into Class A shares after six years.
* SEC Yields are calculated based on SEC guidelines for the 30-day period
ended March 31, 2006.
** Taxable equivalent yields are based on SEC yields and a 35% marginal
Federal income tax rate and maximum state, city and local taxes where
applicable.
See Historical Performance disclosures on page 4.
(Historical Performance continued on next page)
10 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
MICHIGAN PORTFOLIO
HISTORICAL PERFORMANCE
(continued from previous page)
AVERAGE ANNUAL RETURNS AS OF MARCH 31, 2006
- --------------------------------------------------------------
NAV Returns SEC Returns
Class A Shares
1 Year 4.43% -0.03%
5 Years 5.49% 4.58%
10 Years 6.36% 5.90%
SEC Yield* 3.26%
Taxable Equivalent Yield** 5.22%
Class B Shares
1 Year 3.63% 0.63%
5 Years 4.75% 4.75%
10 Years(a) 5.92% 5.92%
SEC Yield* 2.70%
Taxable Equivalent Yield** 4.32%
Class C Shares
1 Year 3.61% 2.61%
5 Years 4.75% 4.75%
10 Years 5.62% 5.62%
SEC Yield* 2.71%
Taxable Equivalent Yield** 4.34%
SEC AVERAGE ANNUAL RETURNS (WITH ANY APPLICABLE SALES CHARGES)
AS OF THE MOST RECENT CALENDAR QUARTER-END (MARCH 31, 2006)
- --------------------------------------------------------------
Class A Shares
1 Year -0.03%
5 Years 4.58%
10 Years 5.90%
Class B Shares
1 Year 0.63%
5 Years 4.75%
10 Years(a) 5.92%
Class C Shares
1 Year 2.61%
5 Years 4.75%
10 Years 5.62%
(a) Assumes conversion of Class B shares into Class A shares after six years.
* SEC Yields are calculated based on SEC guidelines for the 30-day period
ended March 31, 2006.
** Taxable equivalent yields are based on SEC yields and a 35% marginal
Federal income tax rate and maximum state, city and local taxes where
applicable.
See Historical Performance disclosures on page 4.
(Historical Performance continued on next page)
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 11
MINNESOTA PORTFOLIO
HISTORICAL PERFORMANCE
(continued from previous page)
AVERAGE ANNUAL RETURNS AS OF MARCH 31, 2006
- --------------------------------------------------------------
NAV Returns SEC Returns
Class A Shares
1 Year 3.92% -0.50%
5 Years 4.80% 3.88%
10 Years 5.85% 5.39%
SEC Yield* 3.58%
Taxable Equivalent Yield** 5.98%
Class B Shares
1 Year 3.29% 0.30%
5 Years 4.08% 4.08%
10 Years(a) 5.40% 5.40%
SEC Yield* 3.04%
Taxable Equivalent Yield** 5.08%
Class C Shares
1 Year 3.19% 2.19%
5 Years 4.09% 4.09%
10 Years 5.11% 5.11%
SEC Yield* 3.04%
Taxable Equivalent Yield** 5.08%
SEC AVERAGE ANNUAL RETURNS (WITH ANY APPLICABLE SALES CHARGES)
AS OF THE MOST RECENT CALENDAR QUARTER-END (MARCH 31, 2006)
- --------------------------------------------------------------
Class A Shares
1 Year -0.50%
5 Years 3.88%
10 Years 5.39%
Class B Shares
1 Year 0.30%
5 Years 4.08%
10 Years(a) 5.40%
Class C Shares
1 Year 2.19%
5 Years 4.09%
10 Years 5.11%
(a) Assumes conversion of Class B shares into Class A shares after six years.
* SEC Yields are calculated based on SEC guidelines for the 30-day period
ended March 31, 2006.
** Taxable equivalent yields are based on SEC yields and a 35% marginal
Federal income tax rate and maximum state, city and local taxes where
applicable.
See Historical Performance disclosures on page 4.
(Historical Performance continued on next page)
12 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
NEW JERSEY PORTFOLIO
HISTORICAL PERFORMANCE
(continued from previous page)
AVERAGE ANNUAL RETURNS AS OF MARCH 31, 2006
- --------------------------------------------------------------
NAV Returns SEC Returns
Class A Shares
1 Year 4.05% -0.41%
5 Years 3.90% 3.01%
10 Years 5.29% 4.83%
SEC Yield* 3.57%
Taxable Equivalent Yield** 6.03%
Class B Shares
1 Year 3.21% 0.22%
5 Years 3.17% 3.17%
10 Years(a) 4.83% 4.83%
SEC Yield* 3.03%
Taxable Equivalent Yield** 5.12%
Class C Shares
1 Year 3.22% 2.23%
5 Years 3.17% 3.17%
10 Years 4.54% 4.54%
SEC Yield* 3.02%
Taxable Equivalent Yield** 5.10%
SEC AVERAGE ANNUAL RETURNS (WITH ANY APPLICABLE SALES CHARGES)
AS OF THE MOST RECENT CALENDAR QUARTER-END (MARCH 31, 2006)
- --------------------------------------------------------------
Class A Shares
1 Year -0.41%
5 Years 3.01%
10 Years 4.83%
Class B Shares
1 Year 0.22%
5 Years 3.17%
10 Years(a) 4.83%
Class C Shares
1 Year 2.23%
5 Years 3.17%
10 Years 4.54%
(a) Assumes conversion of Class B shares into Class A shares after six years.
* SEC Yields are calculated based on SEC guidelines for the 30-day period
ended March 31, 2006.
** Taxable equivalent yields are based on SEC yields and a 35% marginal
Federal income tax rate and maximum state, city and local taxes where
applicable.
See Historical Performance disclosures on page 4.
(Historical Performance continued on next page)
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 13
OHIO PORTFOLIO
HISTORICAL PERFORMANCE
(continued from previous page)
AVERAGE ANNUAL RETURNS AS OF MARCH 31, 2006
- --------------------------------------------------------------
NAV Returns SEC Returns
Class A Shares
1 Year 3.91% -0.53%
5 Years 4.66% 3.75%
10 Years 5.61% 5.15%
SEC Yield* 3.52%
Taxable Equivalent Yield** 5.83%
Class B Shares
1 Year 3.09% 0.10%
5 Years 3.92% 3.92%
10 Years(a) 5.16% 5.16%
SEC Yield* 2.98%
Taxable Equivalent Yield** 4.94%
Class C Shares
1 Year 3.09% 2.09%
5 Years 3.90% 3.90%
10 Years 4.87% 4.87%
SEC Yield* 2.98%
Taxable Equivalent Yield** 4.94%
SEC AVERAGE ANNUAL RETURNS (WITH ANY APPLICABLE SALES CHARGES)
AS OF THE MOST RECENT CALENDAR QUARTER-END (MARCH 31, 2006)
- --------------------------------------------------------------
Class A Shares
1 Year -0.53%
5 Years 3.75%
10 Years 5.15%
Class B Shares
1 Year 0.10%
5 Years 3.92%
10 Years(a) 5.16%
Class C Shares
1 Year 2.09%
5 Years 3.90%
10 Years 4.87%
(a) Assumes conversion of Class B shares into Class A shares after six years.
* SEC Yields are calculated based on SEC guidelines for the 30-day period
ended March 31, 2006.
** Taxable equivalent yields are based on SEC yields and a 35% marginal
Federal income tax rate and maximum state, city and local taxes where
applicable.
See Historical Performance disclosures on page 4.
(Historical Performance continued on next page)
14 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
PENNSYLVANIA PORTFOLIO
HISTORICAL PERFORMANCE
(continued from previous page)
AVERAGE ANNUAL RETURNS AS OF MARCH 31, 2006
- --------------------------------------------------------------
NAV Returns SEC Returns
Class A Shares
1 Year 4.28% -0.12%
5 Years 5.21% 4.31%
10 Years 5.88% 5.42%
SEC Yield* 3.57%
Taxable Equivalent Yield** 5.67%
Class B Shares
1 Year 3.55% 0.55%
5 Years 4.48% 4.48%
10 Years(a) 5.42% 5.42%
SEC Yield* 3.03%
Taxable Equivalent Yield** 4.81%
Class C Shares
1 Year 3.56% 2.56%
5 Years 4.49% 4.49%
10 Years 5.13% 5.13%
SEC Yield* 3.03%
Taxable Equivalent Yield** 4.81%
SEC AVERAGE ANNUAL RETURNS (WITH ANY APPLICABLE SALES CHARGES)
AS OF THE MOST RECENT CALENDAR QUARTER-END (MARCH 31, 2006)
- --------------------------------------------------------------
Class A Shares
1 Year -0.12%
5 Years 4.31%
10 Years 5.42%
Class B Shares
1 Year 0.55%
5 Years 4.48%
10 Years(a) 5.42%
Class C Shares
1 Year 2.56%
5 Years 4.49%
10 Years 5.13%
(a) Assumes conversion of Class B shares into Class A shares after six years.
* SEC Yields are calculated based on SEC guidelines for the 30-day period
ended March 31, 2006.
** Taxable equivalent yields are based on SEC yields and a 35% marginal
Federal income tax rate and maximum state, city and local taxes where
applicable.
See Historical Performance disclosures on page 4.
(Historical Performance continued on next page)
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 15
VIRGINIA PORTFOLIO
HISTORICAL PERFORMANCE
(continued from previous page)
AVERAGE ANNUAL RETURNS AS OF MARCH 31, 2006
- --------------------------------------------------------------
NAV Returns SEC Returns
Class A Shares
1 Year 4.60% 0.12%
5 Years 5.32% 4.40%
10 Years 6.12% 5.66%
SEC Yield* 3.52%
Taxable Equivalent Yield** 5.75%
Class B Shares
1 Year 3.85% 0.85%
5 Years 4.58% 4.58%
10 Years(a) 5.69% 5.69%
SEC Yield* 2.98%
Taxable Equivalent Yield** 4.86%
Class C Shares
1 Year 3.90% 2.90%
5 Years 4.61% 4.61%
10 Years 5.40% 5.40%
SEC Yield* 2.98%
Taxable Equivalent Yield** 4.86%
SEC AVERAGE ANNUAL RETURNS (WITH ANY APPLICABLE SALES CHARGES)
AS OF THE MOST RECENT CALENDAR QUARTER-END (MARCH 31, 2006)
- --------------------------------------------------------------
Class A Shares
1 Year 0.12%
5 Years 4.40%
10 Years 5.66%
Class B Shares
1 Year 0.85%
5 Years 4.58%
10 Years(a) 5.69%
Class C Shares
1 Year 2.90%
5 Years 4.61%
10 Years 5.40%
(a) Assumes conversion of Class B shares into Class A shares after six years.
* SEC Yields are calculated based on SEC guidelines for the 30-day period
ended March 31, 2006.
** Taxable equivalent yields are based on SEC yields and a 35% marginal
Federal income tax rate and maximum state, city and local taxes where
applicable.
See Historical Performance disclosures on page 4.
16 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
FUND EXPENSES
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including sales charges (loads) on purchase payments, contingent
deferred sales charges on redemptions and (2) ongoing costs, including
management fees; distribution (12b-1) fees; and other Fund expenses. This
example is intended to help you understand your ongoing costs (in dollars) of
investing in the Fund and to compare these costs with the ongoing costs of
investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of
the period and held for the entire period as indicated below.
Actual Expenses
The first line of the table below provides information about actual account
values and actual expenses. You may use the information in this line, together
with the amount you invested, to estimate the expenses that you paid over the
period. Simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
in the first line under the heading entitled "Expenses Paid During Period" to
estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio and an assumed annual rate of return of 5% before expenses, which is not
the Fund's actual return. The hypothetical account values and expenses may not
be used to estimate the actual ending account balance or expenses you paid for
the period. You may use this information to compare the ongoing costs of
investing in the Fund and other funds by comparing this 5% hypothetical example
with the 5% hypothetical examples that appear in the shareholder reports of
other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads), or contingent deferred sales charges on redemptions.
Therefore, the second line of the table is useful in comparing ongoing costs
only, and will not help you determine the relative total costs of owning
different funds. In addition, if these transactional costs were included, your
costs would have been higher.
Arizona Portfolio
Beginning Ending
Account Value Account Value Expenses Paid Annualized
October 1, 2005 March 31, 2006 During Period* Expense Ratio*
- ------------------------------------------------------------------------------------------
Class A
Actual $1,000 $1,010.79 $3.91 0.78%
Hypothetical ** $1,000 $1,021.04 $3.93 0.78%
- ------------------------------------------------------------------------------------------
Class B
Actual $1,000 $1,007.32 $7.41 1.48%
Hypothetical ** $1,000 $1,017.55 $7.44 1.48%
- ------------------------------------------------------------------------------------------
Class C
Actual $1,000 $1,007.32 $7.41 1.48%
Hypothetical ** $1,000 $1,017.55 $7.44 1.48%
- ------------------------------------------------------------------------------------------
(Fund Expenses continued on next page)
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 17
FUND EXPENSES
(continued from previous page)
Florida Portfolio
Beginning Ending
Account Value Account Value Expenses Paid Annualized
October 1, 2005 March 31, 2006 During Period* Expense Ratio*
- ------------------------------------------------------------------------------------------
Class A
Actual $1,000 $1,013.71 $3.92 0.78%
Hypothetical ** $1,000 $1,021.04 $3.93 0.78%
- ------------------------------------------------------------------------------------------
Class B
Actual $1,000 $1,010.18 $7.42 1.48%
Hypothetical ** $1,000 $1,017.55 $7.44 1.48%
- ------------------------------------------------------------------------------------------
Class C
Actual $1,000 $1,010.15 $7.42 1.48%
Hypothetical ** $1,000 $1,017.55 $7.44 1.48%
- ------------------------------------------------------------------------------------------
Massachusetts Portfolio
Beginning Ending
Account Value Account Value Expenses Paid Annualized
October 1, 2005 March 31, 2006 During Period* Expense Ratio*
- ------------------------------------------------------------------------------------------
Class A
Actual $1,000 $1,009.13 $4.11 0.82%
Hypothetical ** $1,000 $1,020.84 $4.13 0.82%
- ------------------------------------------------------------------------------------------
Class B
Actual $1,000 $1,005.72 $7.60 1.52%
Hypothetical ** $1,000 $1,017.35 $7.64 1.52%
- ------------------------------------------------------------------------------------------
Class C
Actual $1,000 $1,005.69 $7.60 1.52%
Hypothetical ** $1,000 $1,017.35 $7.64 1.52%
- ------------------------------------------------------------------------------------------
Michigan Portfolio
Beginning Ending
Account Value Account Value Expenses Paid Annualized
October 1, 2005 March 31, 2006 During Period* Expense Ratio*
- ------------------------------------------------------------------------------------------
Class A
Actual $1,000 $1,012.60 $4.87 0.97%
Hypothetical ** $1,000 $1,020.09 $4.89 0.97%
- ------------------------------------------------------------------------------------------
Class B
Actual $1,000 $1,009.11 $8.42 1.68%
Hypothetical ** $1,000 $1,016.55 $8.45 1.68%
- ------------------------------------------------------------------------------------------
Class C
Actual $1,000 $1,008.18 $8.41 1.68%
Hypothetical ** $1,000 $1,016.55 $8.45 1.68%
- ------------------------------------------------------------------------------------------
(Fund Expenses continued on next page)
18 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
FUND EXPENSES
(continued from previous page)
Minnesota Portfolio
Beginning Ending
Account Value Account Value Expenses Paid Annualized
October 1, 2005 March 31, 2006 During Period* Expense Ratio*
- ------------------------------------------------------------------------------------------
Class A
Actual $1,000 $1,011.95 $4.51 0.90%
Hypothetical ** $1,000 $1,020.44 $4.53 0.90%
- ------------------------------------------------------------------------------------------
Class B
Actual $1,000 $1,008.40 $8.01 1.60%
Hypothetical ** $1,000 $1,016.95 $8.05 1.60%
- ------------------------------------------------------------------------------------------
Class C
Actual $1,000 $1,008.40 $8.01 1.60%
Hypothetical ** $1,000 $1,016.95 $8.05 1.60%
- ------------------------------------------------------------------------------------------
New Jersey Portfolio
Beginning Ending
Account Value Account Value Expenses Paid Annualized
October 1, 2005 March 31, 2006 During Period* Expense Ratio*
- ------------------------------------------------------------------------------------------
Class A
Actual $1,000 $1,012.39 $4.36 0.87%
Hypothetical ** $1,000 $1,020.59 $4.38 0.87%
- ------------------------------------------------------------------------------------------
Class B
Actual $1,000 $1,008.84 $7.86 1.57%
Hypothetical ** $1,000 $1,017.10 $7.90 1.57%
- ------------------------------------------------------------------------------------------
Class C
Actual $1,000 $1,008.89 $7.86 1.57%
Hypothetical ** $1,000 $1,017.10 $7.90 1.57%
- ------------------------------------------------------------------------------------------
Ohio Portfolio
Beginning Ending
Account Value Account Value Expenses Paid Annualized
October 1, 2005 March 31, 2006 During Period* Expense Ratio*
- ------------------------------------------------------------------------------------------
Class A
Actual $1,000 $1,010.68 $4.26 0.85%
Hypothetical ** $1,000 $1,020.69 $4.28 0.85%
- ------------------------------------------------------------------------------------------
Class B
Actual $1,000 $1,007.18 $7.76 1.55%
Hypothetical ** $1,000 $1,017.20 $7.80 1.55%
- ------------------------------------------------------------------------------------------
Class C
Actual $1,000 $1,007.20 $7.76 1.55%
Hypothetical ** $1,000 $1,017.20 $7.80 1.55%
- ------------------------------------------------------------------------------------------
(Fund Expenses continued on next page)
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 19
FUND EXPENSES
(continued from previous page)
Pennsylvania Portfolio
Beginning Ending
Account Value Account Value Expenses Paid Annualized
October 1, 2005 March 31, 2006 During Period* Expense Ratio*
- ------------------------------------------------------------------------------------------
Class A
Actual $1,000 $1,011.70 $4.76 0.95%
Hypothetical ** $1,000 $1,020.19 $4.78 0.95%
- ------------------------------------------------------------------------------------------
Class B
Actual $1,000 $1,008.08 $8.26 1.65%
Hypothetical ** $1,000 $1,016.70 $8.30 1.65%
- ------------------------------------------------------------------------------------------
Class C
Actual $1,000 $1,008.14 $8.26 1.65%
Hypothetical ** $1,000 $1,016.70 $8.30 1.65%
- ------------------------------------------------------------------------------------------
Virginia Portfolio
Beginning Ending
Account Value Account Value Expenses Paid Annualized
October 1, 2005 March 31, 2006 During Period* Expense Ratio*
- ------------------------------------------------------------------------------------------
Class A
Actual $1,000 $1,015.41 $3.62 0.72%
Hypothetical ** $1,000 $1,021.34 $3.63 0.72%
- ------------------------------------------------------------------------------------------
Class B
Actual $1,000 $1,011.89 $7.12 1.42%
Hypothetical ** $1,000 $1,017.85 $7.14 1.42%
- ------------------------------------------------------------------------------------------
Class C
Actual $1,000 $1,012.84 $7.13 1.42%
Hypothetical ** $1,000 $1,017.85 $7.14 1.42%
- ------------------------------------------------------------------------------------------
* Expenses are equal to each Class' annualized expense ratio, multiplied by
the average account value over the period, multiplied by 182/365 (to reflect
the one-half year period).
** Assumes 5% return before expenses.
20 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
BOND RATING SUMMARY*
March 31, 2006 (unaudited)
ARIZONA PORTFOLIO
Quality Rating
[ ] 60.6% AAA [PIE CHART OMITTED]
[ ] 10.4% AA
[ ] 7.2% A
[ ] 16.5% BBB
[ ] 5.3% BB
FLORIDA PORTFOLIO
Quality Rating
[ ] 59.5% AAA [PIE CHART OMITTED]
[ ] 12.0% AA
[ ] 10.5% A
[ ] 7.6% BBB
[ ] 10.4% BB
MASSACHUSETTS PORTFOLIO
Quality Rating
[ ] 67.1% AAA [PIE CHART OMITTED]
[ ] 15.5% AA
[ ] 5.0% A
[ ] 7.2% BBB
[ ] 4.8% BB
[ ] 0.4% B
* All data are as of March 31, 2006. Each Portfolio's quality rating
distribution is expressed as a percentage of the Portfolio's total investments
rated in particular ratings categories by Standard & Poor's Rating Services and
Moody's Investors Service. The distributions may vary over time. If ratings are
not available, the Fund's Adviser will assign ratings that are considered to be
of equivalent quality to such ratings.
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 21
BOND RATING SUMMARY*
March 31, 2006 (unaudited)
MICHIGAN PORTFOLIO
Quality Rating
[ ] 59.4% AAA [PIE CHART OMITTED]
[ ] 22.6% AA
[ ] 4.1% A
[ ] 5.5% BBB
[ ] 8.4% BB
MINNESOTA PORTFOLIO
Quality Rating
[ ] 55.5% AAA [PIE CHART OMITTED]
[ ] 15.8% AA
[ ] 19.2% A
[ ] 5.8% BBB
[ ] 3.7% BB
NEW JERSEY PORTFOLIO
Quality Rating
[ ] 53.7% AAA [PIE CHART OMITTED]
[ ] 19.4% AA
[ ] 14.4% A
[ ] 6.4% BBB
[ ] 6.1% BB
* All data are as of March 31, 2006. Each Portfolio's quality rating
distribution is expressed as a percentage of the Portfolio's total investments
rated in particular ratings categories by Standard & Poor's Rating Services and
Moody's Investors Service. The distributions may vary over time. If ratings are
not available, the Fund's Adviser will assign ratings that are considered to be
of equivalent quality to such ratings.
22 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
BOND RATING SUMMARY*
March 31, 2006 (unaudited)
OHIO PORTFOLIO
Quality Rating
[ ] 57.2% AAA [PIE CHART OMITTED]
[ ] 12.3% AA
[ ] 15.8% A
[ ] 9.1% BBB
[ ] 5.6% BB
PENNSYLVANIA PORTFOLIO
Quality Rating
[ ] 56.3% AAA [PIE CHART OMITTED]
[ ] 13.6% AA
[ ] 12.3% A
[ ] 7.5% BBB
[ ] 10.0% BB
[ ] 0.3% B
VIRGINIA PORTFOLIO
Quality Rating
[ ] 51.2% AAA [PIE CHART OMITTED]
[ ] 26.7% AA
[ ] 7.6% A
[ ] 5.1% BBB
[ ] 9.4% BB
* All data are as of March 31, 2006. Each Portfolio's quality rating
distribution is expressed as a percentage of the Portfolio's total investments
rated in particular ratings categories by Standard & Poor's Rating Services and
Moody's Investors Service. The distributions may vary over time. If ratings are
not available, the Fund's Adviser will assign ratings that are considered to be
of equivalent quality to such ratings.
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 23
ARIZONA PORTFOLIO
PORTFOLIO OF INVESTMENTS
March 31, 2006 (unaudited)
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
MUNICIPAL BONDS & NOTES-98.4%
Long-Term Municipal Bonds-93.3%
Arizona-83.0%
Arizona Cap Facs Fin Corp Student Hsg Rev
(Arizona State University Proj) Ser 00
6.25%, 9/01/32 $ 2,000 $ 2,060,420
Arizona Health Facs Auth Rev
(Blood System, Inc.) Ser 04
5.00%, 4/01/19 750 768,855
Arizona Sch Brd Fac Rev
Ser 01
5.00%, 7/01/19 6,730 7,136,223
Arizona State Trans Brd Hwy Rev
Ser 04B
5.00%, 7/01/24 4,300 4,515,817
Arizona State University COP
(Research Infrastructure Projs)
AMBAC Ser 05A
5.00%, 9/01/23 2,000 2,087,540
Arizona Student Loan Auth
(Student Loan Rev)
Ser 99B-1 AMT
5.90%, 5/01/24 1,500 1,581,885
Arizona Tourism & Sports Auth Tax Rev
(Multipurpose Stadium Fac) MBIA Ser 03A
5.00%, 7/01/25 2,400 2,497,344
Estrella Mtn Ranch Cmnty Fac Dist
(Desert Village)
7.375%, 7/01/27 1,833 1,966,937
(Golf Village) Ser 01A
7.875%, 7/01/25 3,531 3,839,221
Gilbert Wtr Res Municipal Ppty Corp
(Wastewater Sys & Util Rev) Ser 04
4.90%, 4/01/19 2,500 2,500,775
Glendale Indl Dev Auth
(John C Lincoln Health) Ser 05B
5.25%, 12/01/22 1,000 1,043,020
Glendale Indl Dev Auth Ed Fac
(Midwestern University)
Ser 01A
5.875%, 5/15/31 3,770 4,035,936
CONNIE LEE Ser 96A
6.00%, 5/15/26 475 485,569
Goodyear Cmnty Fac Dist
(Palm Valley) Ser 96C
7.25%, 7/01/16 2,900 2,971,398
24 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
Goodyear Indl Dev Auth Water & Sewer Rev
(Litchfield Pk Svc Proj) Ser 99 AMT
5.95%, 10/01/23 $ 3,160 $ 3,257,360
Greater Arizona Dev Auth Infrastructure Rev
MBIA Ser 05A
5.00%, 8/01/21 1,600 1,681,408
MBIA Ser 05B
5.00%, 8/01/25 4,320 4,502,779
Hassayampa Cmnty Fac Dist
Ser 96
7.75%, 7/01/21 2,775 2,856,974
Hassayampa Cmnty Fac Dist No. 2
(Forest Ridge Estates) Ser 00
7.50%, 7/01/24 805 873,618
Maricopa Cnty MFHR
(Tierra Antigua Proj) AMBAC Ser 01A-1 AMT
5.40%, 6/01/34 2,765 2,811,894
Maricopa Cnty SFMR
(Mortgage Rev)
GNMA/FNMA/FHLMC AMT
Ser 00-1C
6.25%, 12/01/30 60 60,662
Ser 01
5.63%, 3/01/33 940 963,368
Ser 02-B1
6.20%, 3/01/34 380 387,653
Mesa Cnty Indl Dev Auth Health Fac
(Discovery Health Sys) MBIA Ser 99A
5.75%, 1/01/25 15,000 16,156,200
Mesa Street & Highway Rev FSA
Ser 05
5.00%, 7/01/24 5,000 5,252,550
Mohave Cnty Indl Dev Auth MFHR
(Chris & Silver Ridge) GNMA Ser 96
6.375%, 11/01/31 295 304,470
Nogales Municipal Dev Auth
AMBAC Ser 05
5.00%, 6/01/27 1,000 1,033,330
Northern Arizona University COP
(Northern Arizona University Research Projs)
AMBAC Ser 04
5.125%, 9/01/21-9/01/24 7,140 7,606,603
Phoenix Civic Impt Corp Excise Tax Rev
(Civic Plaza Exp Proj) Sub Ser 05A
5.00%, 7/01/23 10,250 10,743,213
Phoenix Indl Dev Auth
(Capitol Mall LLC Proj) AMBAC Ser 05
5.00%, 9/15/25 5,935 6,170,382
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 25
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
Phoenix Indl Dev Auth SFMR
(Mortgage Rev) GNMA Ser 02A-1 AMT
5.75%, 9/01/33 $ 170 $ 172,795
Phoenix Health Facs Auth Hosp Rev
(Children's Hospital) Ser 02A
6.00%, 2/15/32 5,700 6,006,204
Pima Cnty Indl Dev Auth Ed Rev
(Horizon Cmnty Learning Ctr) Ser 05
5.125%, 6/01/20 1,500 1,483,485
Pima Cnty Indl Dev Auth MFHR
(La Hacienda) GNMA Ser 99
7.00%, 12/20/31 1,290 1,382,209
Pima Cnty Indl Dev Auth SFMR
(Mortgage Rev) GNMA/FNMA AMT
Ser 99B-1
6.10%, 5/01/31 145 145,902
Ser 01A-1
5.35%, 11/01/24 110 110,416
Pinal Cnty COP
Ser 04
5.00%, 12/01/24 3,780 3,867,734
Pinal Cnty Indl Dev Auth Correctional
Facs Contract
(Florence West Prison Proj) Ser 06A ACA
5.25%, 10/01/22 1,400 1,462,006
Pinal Cnty Prop Corp
AMBAC Ser 01
5.125%, 6/01/21 1,000 1,051,320
Pronghorn Ranch Cmnty Fac Dist
Ser 01
7.00%, 7/15/27 2,000 2,081,120
Show Low Assessment Dist No. 6
(Torreon) ACA Ser 00
6.00%, 1/01/18 955 1,008,938
Show Low Indl Dev Auth Hosp Rev
(Navapache Regl Med Ctr) RADIAN Ser 05
5.00%, 12/01/25 1,415 1,459,756
Stoneridge Cmnty Fac Dist
Ser 01
6.75%, 7/15/26 1,650 1,824,900
Sundance Cmnty Fac Dist
Ser 02
7.75%, 7/01/22 2,575 2,812,466
Tax Exempt Municipal Infrastructure Trust
Ser 04B Cl. A
4.05%, 12/01/08(a) 4,470 4,338,403
Tempe Excise Tax Rev
5.00%, 7/01/24 1,035 1,084,059
Tolleson Indl Dev Auth MFHR
(Copper Cove) GNMA Ser 01A AMT
5.50%, 11/20/41 5,825 5,960,839
26 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
Tuscon & Pima Cnty Indl Dev Auth SFMA
(Mtg Bkd Secs Prog) GNMA/FNMA/FHLMC
Ser 01A-1 AMT
6.35%, 1/01/34 $ 1,205 $ 1,220,219
Tucson & Pima Hsg Fin Auth SFMR
(Mortgage Rev) GNMA
Ser 02A AMT
5.50%, 1/01/35 630 642,556
Tucson Airport Auth Rev
AMBAC Ser 01 AMT
5.35%, 6/01/31 6,475 6,704,215
Tucson COP
MBIA Ser 04A
5.00%, 7/01/23-7/01/24 6,100 6,365,100
Tucson Higher Ed
(University of Arizona) AMBAC Ser 02A
5.00%, 7/15/32 1,000 1,029,220
University of Arizona COP
(University of Arizona Projs) Ser 03B
5.00%, 6/01/12 3,040 3,224,710
5.25%, 6/01/14-6/01/15 5,000 5,401,890
University Med Ctr Corp Hosp Rev
5.00%, 7/01/35 3,500 3,504,865
West Campus Hsg LLC Student Hsg Rev
(Arizona State University West Campus)
AMBAC Ser 05
5.00%, 7/01/30 1,500 1,557,225
Yavapai Cnty Hosp Rev
(Regional Med Ctr)
RADIAN Ser 03A
5.25%, 8/01/21 4,000 4,159,800
-------------
172,215,756
-------------
California-0.7%
California State GO
5.00%, 2/01/33 1,405 1,435,924
-------------
Florida-0.8%
Double Branch Cmnty Dev Dist
(Oakleaf Village) Ser 02A
6.70%, 5/01/34 1,000 1,080,500
Fiddler's Creek Cmnty Dev Dist
Ser 99B
5.80%, 5/01/21 595 610,280
-------------
1,690,780
-------------
Puerto Rico-7.9%
Puerto Rico Elec Pwr Auth Rev
XLCA Ser 02-1
5.25%, 7/01/22(b) 8,000 8,554,400
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 27
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
Puerto Rico GO
FGIC Ser 02A
5.00%, 7/01/32 $ 2,500 $ 2,665,100
Puerto Rico Hwy & Trans Auth Rev
FSA Ser 02D
5.00%, 7/01/32 3,400 3,510,024
Puerto Rico Ind Fin Auth Health Fac
(Ascension Health) Ser 00A
6.125%, 11/15/30 1,500 1,651,425
-------------
16,380,949
-------------
Texas-0.9%
Texas Turnpike Auth Rev
AMBAC Ser 02A
5.50%, 8/15/39 1,750 1,856,698
-------------
Total Long-Term Municipal Bonds
(cost $188,448,241) 193,580,107
-------------
Short-Term Municipal Notes(c)-5.1%
Alaska-1.7%
Valdez Marine Term Rev
(BP Pipelines, Inc. Proj) Ser 03B
3.19%, 7/01/37 3,500 3,500,000
-------------
Massachusetts-2.7%
Massachusetts State
(Central Artery)
Ser 00A
3.18%, 12/01/30 4,000 4,000,000
Ser 00B
3.18%, 12/01/30 1,500 1,500,000
-------------
5,500,000
-------------
New York-0.7%
Port Auth of NY & NJ Spl Oblig Rev
(Versatile Structure Oblig)
3.17%, 8/01/24 1,500 1,500,000
-------------
Total Short-Term Municipal Notes
(cost $10,500,000) 10,500,000
-------------
Total Municipal Bonds & Notes
(cost $198,948,241) 204,080,107
-------------
SHORT TERM INVESTMENT-0.1%
Time Deposit-0.1%
The Bank of New York
3.75%, 4/03/06
(cost $253,000) 253 253,000
-------------
28 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Value
- -------------------------------------------------------------------------------
Total Investments-98.5%
(cost $199,201,241) $ 204,333,107
Other assets less liabilities-1.5% 3,053,693
-------------
Net Assets-100% $ 207,386,800
=============
INTEREST RATE SWAP CONTRACTS (see Note D)
Rate Type
--------------------------
Payment Payment
Notional made received Unrealized
Swap Amount Termination by the by the Appreciation/
Counterparty (000) Date Portfolio Portfolio (Depreciation)
- ---------------------------------------------------------------------------------------------------
Citigroup, Inc. $ 9,500 6/01/06 MMD+ 3.820% $ (178,880)
Citigroup, Inc. 1,900 6/22/07 BMA* 2.962% (14,775)
Goldman Sachs & Co. 1,000 7/05/06 BMA* 3.283% 661
Goldman Sachs & Co. 1,000 1/05/07 BMA* 3.405% 51
JPMorgan Chase & Co. 1,800 4/05/07 BMA* 2.988% (11,182)
Merrill Lynch 1,000 8/09/26 BMA* 4.063% 25,583
Morgan Stanley 1,000 4/06/06 BMA* 3.081% 124
Morgan Stanley 1,000 10/06/06 BMA* 3.217% (475)
+ MMD (Municipal Market Data)
* Variable interest based on the BMA (Bond Market Association)
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 29
(a) Security is exempt from registration under Rule 144A of the Securities Act
of 1933. This security is considered liquid and may be resold in transactions
exempt from registration, normally to qualified institutional buyers. At March
31, 2006, the aggregate market value of this security amounted to $4,338,403 or
2.1% of net assets.
(b) Represents entire or partial position segregated as collateral for
interest rate swaps.
(c) Variable rate coupon, rate shown as of March 31, 2006.
Glossary of Terms:
ACA - American Capital Access
AMBAC - American Municipal Bond Assurance Corporation
AMT - Alternative Minimum Tax
CONNIE LEE - Connie Lee Insurance Company
COP - Certificate of Participation
FGIC - Financial Guaranty Insurance Company
FHLMC - Federal Home Loan Mortgage Corporation
FNMA - Federal National Mortgage Association
FSA - Financial Security Assurance, Inc.
GNMA - Government National Mortgage Association
GO - General Obligation
MBIA - Municipal Bond Investors Assurance
MFHR - Multi-Family Housing Revenue
RADIAN - Radian Group, Inc.
SFMR - Single Family Mortgage Revenue
XLCA - XL Capital Assurance, Inc.
See notes to financial statements.
30 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
FLORIDA PORTFOLIO
PORTFOLIO OF INVESTMENTS
March 31, 2006 (unaudited)
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
MUNICIPAL BONDS & NOTES-98.5%
Long-Term Municipal Bonds-98.3%
Florida-93.7%
Beacon Tradeport Cmnty Dev Dist
Ser 02B
7.25%, 5/01/33 $ 970 $ 1,032,381
Bonnet Creek Resort Cmnty Dev Dist
Ser 02
7.25%, 5/01/18 2,000 2,170,620
Brevard Cnty Loc Opt Fuel Tax Rev
FGIC Ser 05
5.00%, 8/01/24-8/01/25 5,320 5,541,553
Capital Trust Agy Arpt Fac
(Cargo Acq Grp)
Ser 02 AMT
6.25%, 1/01/19 500 522,730
Ser 03 AMT
5.75%, 1/01/32 2,000 2,037,480
Concorde Estates Cmnty Dev Dist
Ser 04B
5.00%, 5/01/11 1,300 1,297,218
Crossings at Fleming Island Cmnty Dev Dist
(Eagle Harbor) Ser 00C
7.10%, 5/01/30 2,240 2,356,301
Dade Cnty Hsg Fin Auth MFHR
(Golden Lakes Apts) Ser 97A AMT
6.00%, 11/01/32 250 255,207
6.05%, 11/01/39 750 766,830
Deltona Util Sys Rev
MBIA Ser 03
5.125%, 10/01/27 2,440 2,553,387
Escambia Cnty PCR
(Champion Int'l Corp) Ser 96 AMT
6.40%, 9/01/30 2,500 2,582,975
Florida Hsg Fin Agy MFHR
(Turtle Creek Apts) AMBAC Ser 96C AMT
6.20%, 5/01/36 3,245 3,312,172
Florida Hsg Fin Corp MFHR
(Cobblestone Apts)
GNMA Ser 00K-1 AMT
6.10%, 6/01/42 7,765 8,193,473
(Logans Pointe Apts) FSA Ser 99 AMT
6.00%, 6/01/39 5,080 5,311,038
(Mystic Pointe II) GNMA Ser 00 AMT
6.30%, 12/01/41 1,165 1,235,564
(Raintree Apts) GNMA Ser 00 AMT
6.05%, 3/01/42(a) 5,790 6,045,281
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 31
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
(Sabal Chase Apts) FSA Ser 00 AMT
6.00%, 5/01/40 $ 3,650 $ 3,831,332
(Spring Harbor Apts) Ser 99C-1 AMT
5.90%, 8/01/39 2,540 2,608,834
(Walker Ave Club) FSA Ser 00L-1 AMT
6.00%, 12/01/38 3,435 3,559,965
(Waverly Apts) FSA Ser 00C-1 AMT
6.50%, 7/01/40 2,790 2,950,732
Florida State Brd of Ed Lottery Rev
Ser 03A
5.00%, 7/01/19 4,890 5,175,185
Florida State Brd of Ed GO
MBIA Ser 02A
5.00%, 6/01/32(b) 2,500 2,578,700
Florida State Correctional Privatization
Comm COP
AMBAC Ser 04B
5.00%, 8/01/24 3,330 3,489,074
Gateway Cmnty Dev Dist
(Sun City) Ser 03B
5.50%, 5/01/10 490 492,852
Hamal Cmnty Dev Dist
Ser 01
6.65%, 5/01/21 1,100 1,144,869
Herons Glen Recreation Dis
Ser 99
5.90%, 5/01/19 2,680 2,740,246
Highlands Cnty Health Facs Auth
(Adventist/Sunbelt Hosp) Ser 01A
6.00%, 11/15/31 2,000 2,153,500
Hillsborough Cnty Rev
(Tampa Bay Arena)
5.00%, 10/01/25 3,000 3,131,280
Indian River Cnty Sch Brd COP
Ser 05
5.00%, 7/01/23 2,480 2,572,727
Indian Trace Dev Dist Spl Assessment
(Water Management Spl Benefit)
MBIA Ser 05
5.00%, 5/01/22 680 717,264
Jacksonville Elec Auth
AMBAC Ser 02B
5.00%, 10/01/26 3,925 4,067,870
MBIA Ser 02A
5.50%, 10/01/41 5,000 5,088,050
Ser 02A
5.50%, 10/01/41 3,750 3,855,113
Jacksonville Excise Tax Rev
Ser 06A
5.00%, 10/01/30 5,200 5,390,840
32 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
Lakeland Wtr & Wastewater Floater Rev
Ser 04
7.00%, 10/01/10(c) $ 5,000 $ 5,527,100
Lee Cnty Arpt Rev
(Southwest Int'l Arpt) FSA Ser 00A AMT
6.00%, 10/01/32 13,500 14,625,494
Lee Cnty Trans Facs
(Sanibel Brdgs & Causeway) CIFG Ser 05B
5.00%, 10/01/30 700 730,086
Lee Cnty Health Facs Auth Rev
(Shell Point) Ser 99A
5.50%, 11/15/29 2,000 2,010,220
Manatee Cnty Hsg Fin Agy SFMR
(Mortgage Rev) GNMA
Ser 96-1 AMT
5.625%, 11/01/14 40 40,858
Ser 99 AMT
6.25%, 11/01/28 470 473,182
Marshall Creek Cmnty Dev Dist
Ser 02A
6.625%, 5/01/32 1,000 1,048,050
Miami Beach Health Facs Auth Rev
(Mt Sinai Med Ctr) Ser 01A
6.80%, 11/15/31 1,600 1,764,016
Miami-Dade Cnty Hsg Fin Agy MFHR
(Cntry Club Villas Apts) Ser 99A AMT
6.20%, 10/01/39 5,145 5,354,762
(Marbrisa Apts) FSA Ser 00-2A AMT
6.15%, 8/01/38 1,515 1,603,279
Miami-Dade Cnty Hsg Fin Auth SFMR
(Home Ownership Mortgage ) GNMA/FNMA
Ser 00A-1 AMT
6.00%, 10/01/32 1,030 1,041,886
Miromar Lakes Cmnty Dev Dist
Ser 00A
7.25%, 5/01/12 3,225 3,380,929
North Broward Hosp Dist Rev
Ser 01
Prerefunded
6.00%, 1/15/31 1,500 1,650,540
Unrefunded
6.00%, 1/15/31 200 214,458
North Miami Health Facs Auth Rev
(Catholic Health Svcs Oblig Grp)
6.00%, 8/15/24 1,200 1,228,968
Northern Palm Beach Assessment Dist
(Unit Dev 27B) Ser 02
6.40%, 8/01/32 1,120 1,151,035
Northern Palm Beach Cnty Impt Dist
(Mirasol Unit #43)
6.10%, 8/01/21 690 714,164
6.125%, 8/01/31 1,000 1,030,940
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 33
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
Orange Cnty Hosp Rev
(Orlando Regional) Ser 02
5.75%, 12/01/32 $ 1,320 $ 1,461,860
Orange Cnty Hsg Fin Auth MFHR
(Loma Vista Proj) Ser 99G AMT
5.50%, 3/01/32 2,000 1,988,680
Orange Cnty Health Facs Auth Rev
(Mayflower Retirement Proj)
Asset Gty Ser 99
5.25%, 6/01/29 1,060 1,095,139
Orlando Util Cmnty Wtr & Elec Rev
Ser 02C
5.00%, 10/01/27 7,000 7,250,810
Osceola Cnty Sch Brd COP
FGIC Ser 04A
5.00%, 6/01/23 2,955 3,081,297
Palm Beach Cnty Ind Dev Rev
(Lourdes-McKeen Residence) Ser 96
6.625%, 12/01/26 4,000 4,159,600
Palm Beach Cnty Pub Impt Rev
(Biomedical Research Pk Proj) Ser 05A
5.00%, 6/01/22 7,000 7,329,420
Preserve at Wilderness Lake
Cmnty Dev Dist
Ser 02A
7.10%, 5/01/33 1,485 1,610,735
South Miami Health Facs Hosp Rev
(Baptist Health)
5.25%, 11/15/33 2,000 2,061,080
St. Johns Cmnty Dev Dist
(Julington Creek Plantation) Ser 97
7.125%, 5/01/19 7,725 8,161,540
St. Lucie Cnty Sch Brd COP
FSA Ser 05
5.00%, 7/01/29 6,730 6,955,926
Tallahassee Energy Sys Rev
Ser 05
5.00%, 10/01/23 4,570 4,795,301
Tallahassee Hosp Rev
(Tallahassee Memorial) Ser 00
6.375%, 12/01/30 2,750 2,903,945
Tampa Higher Ed
(Tampa University Proj) RADIAN Ser 02
5.625%, 4/01/32 3,175 3,401,949
Village Ctr Cmnty Dev Dist
5.125%, 10/01/28 1,000 1,048,720
Volusia Cnty Ed Fac Auth
(Embry Riddle Aero University) Ser 99A
5.75%, 10/15/29 2,000 2,074,000
34 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
Waterlefe Cmnty Dev Dist
Ser 01
6.95%, 5/01/31 $ 710 $ 753,104
West Palm Beach Cmnty Redev Agy
(Northwood-Pleasant Cmnty Redev)
5.00%, 3/01/25-3/01/29 3,640 3,710,666
-------------
208,196,382
-------------
California-1.3%
California State GO
5.00%, 2/01/32 2,850 2,912,900
-------------
Illinois-0.4%
Manhattan
(No. 04-1-Brookstone Springs Proj) Ser 05
5.875%, 3/01/28 775 752,548
-------------
Minnesota-0.3%
St. Paul Hsg & Redev Auth Hosp Rev
(Healtheast Proj) Ser 05
6.00%, 11/15/25 500 540,875
-------------
New Jersey-1.2%
Garden State Preservation Trust
(Open Space & Farmland)
FSA Ser 05A
5.80%, 11/01/16 2,400 2,720,256
-------------
Ohio-1.4%
Cleveland Cuyahoga Port Auth
Ser 01
7.35%, 12/01/31 3,000 3,136,650
-------------
Total Long-Term Municipal Bonds
(cost $210,332,835) 218,259,611
-------------
Short-Term Municipal Note(d)-0.2%
Florida-0.2%
Jacksonville Health Facs Auth Hosp Rev
Ser 03C
3.14%, 8/15/33
(cost $500,000) 500 500,000
-------------
Total Investments-98.5%
(cost $210,832,835) 218,759,611
Other assets less liabilities-1.5% 3,440,899
-------------
Net Assets-100% $ 222,200,510
=============
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 35
FINANCIAL FUTURES CONTRACTS (see Note D)
Value at
Number of Expiration Original March 31, Unrealized
Type Contracts Position Month Value 2006 Depreciation
- -----------------------------------------------------------------------------------------------------
U.S. Treasury Note June
10 Yr Futures 77 Long 2006 $8,292,226 $8,192,078 $(100,148)
INTEREST RATE SWAP CONTRACTS (see Note D)
Rate Type
---------------------------
Payment Payment
Notional made received Unrealized
Swap Amount Termination by the by the Appreciation/
Counterparty (000) Date Portfolio Portfolio (Depreciation)
- ---------------------------------------------------------------------------------------------------
Citigroup, Inc. $ 2,200 6/22/07 BMA* 2.962% $ (17,108)
Goldman Sachs & Co. 1,100 7/05/06 BMA* 3.283% 728
Goldman Sachs & Co. 1,100 1/05/07 BMA* 3.405% 57
JPMorgan Chase & Co. 2,000 4/05/07 BMA* 2.988% (12,425)
Morgan Stanley 1,100 4/06/06 BMA* 3.081% 136
Morgan Stanley 1,100 10/06/06 BMA* 3.217% (522)
* Variable interest based on the BMA (Bond Market Association)
(a) Represents entire or partial position segregated as collateral for
interest rate swap.
(b) Position, or portion thereof with an aggregate market value of $134,092,
has been segregated to collateralize margin requirements for open futures
contracts.
(c) Security is exempt from registration under Rule 144A of the Securities Act
of 1933. This security is considered liquid and may be resold in transactions
exempt from registration, normally to qualified institutional buyers. At March
31, 2006, the aggregate market value of this security amounted to $5,527,100 or
2.5% of net assets.
(d) Variable rate coupon, rate shown as of March 31, 2006.
Glossary of Terms:
AMBAC - American Municipal Bond Assurance Corporation
AMT - Alternative Minimum Tax
CIFG - CIFG Assurance North America, Inc.
COP - Certificate of Participation
FGIC - Financial Guaranty Insurance Company
FNMA - Federal National Mortgage Association
FSA - Financial Security Assurance, Inc.
GNMA - Government National Mortgage Association
GO - General Obligation
MBIA - Municipal Bond Investors Assurance
MFHR - Multi-Family Housing Revenue
PCR - Pollution Control Revenue
RADIAN - Radian Group, Inc.
SFMR - Single Family Mortgage Revenue
See notes to financial statements.
36 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
MASSACHUSETTS PORTFOLIO
PORTFOLIO OF INVESTMENTS
March 31, 2006 (unaudited)
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
MUNICIPAL BONDS & NOTES-98.9%
Long-Term Municipal Bonds-93.9%
Massachusetts-70.8%
Massachusetts Bay Trans Auth
Ser 04A
5.25%, 7/01/21(a) $ 2,000 $ 2,176,800
Massachusetts Dev Fin Agy
(Massachusetts Biomedical) Ser 00C
6.25%, 8/01/20 3,000 3,258,210
(Worcester Redev) Asset Gty Ser 99
5.25%, 6/01/19 2,350 2,456,878
Massachusetts Ed Fac
(Massachusetts College of Pharmacy)
Ser 99B
6.75%, 7/01/30 3,350 3,736,423
(Suffolk University) Ser 99
5.85%, 7/01/29 1,375 1,474,399
Massachusetts Ed Fin Auth
(Educational Loan) MBIA Ser 00G AMT
6.00%, 12/01/16 1,135 1,154,999
Massachusetts Health & Edl Fac Auth
(Berkshire Healthcare) Asset Gty Ser 01E
5.70%, 10/01/25 4,000 4,325,280
(Cape Cod Healthcare) Asset Gty Ser 01C
5.25%, 11/15/31 2,600 2,715,882
(Covenant Med Ctr) Ser 02
6.00%, 7/01/31 2,500 2,701,700
(New England Med Ctr) FGIC Ser 02H
5.00%, 5/15/25 2,000 2,070,100
(Partners Healthcare Sys) Ser 01C
5.75%, 7/01/32 4,000 4,318,760
(University of Massachusetts Proj) MBIA Ser 02C
5.25%, 10/01/31(b) 6,440 6,816,804
(Winchester Hosp) Ser 00E
6.75%, 7/01/30 4,500 5,012,235
Massachusetts Hsg Fin Agy MFHR
(Harbor Point) AMBAC Ser 96A AMT
6.40%, 12/01/15 4,880 4,988,678
(Rental Mtg) AMT
AMBAC Ser 95E
6.00%, 7/01/41 4,125 4,366,601
MBIA Ser 00H
6.65%, 7/01/41 4,765 5,106,746
Massachusetts Ind Fin Agy MFHR
(Heights Crossing) FHA Ser 95 AMT
6.15%, 2/01/35 6,000 6,134,760
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 37
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
Massachusetts Port Auth Spec Fac
(Bosfuel Corp) MBIA Ser 97 AMT
6.00%, 7/01/36 $ 6,155 $ 6,357,561
(US Air Proj) MBIA Ser 96A AMT
5.875%, 9/01/23 2,000 2,054,980
Massachusetts State Dev Fin Agy
(Pharmacy & Allied Health) Ser 05D
5.00%, 7/01/24 3,500 3,609,480
Massachusetts State GO
Ser 02
Prerefunded
5.25%, 11/01/30 3,075 3,313,528
Unrefunded
5.25%, 11/01/30 1,925 2,074,322
Massachusetts State Health & Edl Facs Auth Rev
(Lahey Clinic Med Ctr) FGIC Ser 05C
5.00%, 8/15/22 5,000 5,216,200
Massachusetts State Sch Bldg Auth
(Dedicated Sales Tax Rev) Ser 05A
5.00%, 8/15/27 7,000 7,308,140
Massachusetts State Spl Oblig Rev
(Cons Ln) Ser 05A
5.00%, 6/01/23 1,500 1,581,015
Massachusetts State Wtr Pollutn Abatement
(Pool Proj Bds) Ser 10
5.00%, 8/01/24 5,000 5,224,600
-------------
99,555,081
-------------
Arizona-3.3%
Goodyear Ind Dev Auth Wtr & Sewer Rev
(Litchfield Pk Svc Proj) Ser 01 AMT
6.75%, 10/01/31 2,160 2,327,357
Quailwood Meadows Cmnty Facs Dist
6.125%, 7/15/29 1,000 1,001,890
Stoneridge Cmnty Fac Dist
Ser 01
6.75%, 7/15/26 1,265 1,399,090
-------------
4,728,337
-------------
California-0.7%
California State GO
5.25%, 11/01/25 1,000 1,056,840
-------------
Colorado-0.4%
Murphy Creek Met Dist No. 3
(Ref & Impt) Ser 06
6.00%, 12/01/26 500 522,585
-------------
Florida-1.3%
Crossings at Fleming Island
Cmnty Dev Dist
(Eagle Harbor) Ser 00C
7.10%, 5/01/30 1,750 1,840,860
-------------
38 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
Georgia-0.4%
Atlanta Tax Allocation
(Eastside Proj) Ser 05B
5.60%, 1/01/30 $ 500 $ 511,020
-------------
Illinois-0.6%
Bolingbrook Sales Tax Rev
6.25%, 1/01/24 500 445,590
Plano Spl Svc Area No. 3 Spl Tax
(Lakewood Springs Proj) Ser 05A
5.95%, 3/01/28 395 390,647
-------------
836,237
-------------
Nevada-1.4%
Clark Cnty Impt Dist No. 142
Ser 03
6.10%, 8/01/18 1,000 1,015,020
Henderson Loc Impt Dist
Ser 03
5.80%, 3/01/23 945 975,618
-------------
1,990,638
-------------
New Jersey-2.0%
Garden State Preservation Trust
(Open Space & Farmland) Ser 05A
5.80%, 11/01/17 2,500 2,833,600
-------------
Puerto Rico-13.0%
Puerto Rico Elec Pwr Auth Rev
XLCA Ser 02-1
5.25%, 7/01/22 6,400 6,843,520
Puerto Rico Hsg Fin Auth
(Cap Fd Prog) HD LN
5.00%, 12/01/20 1,740 1,801,422
Puerto Rico Comwlth Hwy & Trans Auth Rev
FGIC Ser 03G
5.25%, 7/01/14 4,410 4,758,963
FGIC Subordinate Ser 03
5.25%, 7/01/14 4,225 4,559,324
Puerto Rico Municipal Fin Agy
Ser 05A
5.25%, 8/01/23 275 289,047
-------------
18,252,276
-------------
Total Long-Term Municipal Bonds
(cost $126,628,505) 132,127,474
-------------
Short-Term Municipal Notes(c)-5.0%
Alaska-0.4%
Valdez Marine Term Rev
(BP Pipelines, Inc. Proj) Ser 01
3.19%, 7/01/37 500 500,000
-------------
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 39
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
Massachusetts-4.6%
Massachusetts State Health & Edl Facs Auth Rev
(Harvard University) Ser 99R
2.92%, 11/01/49 $ 6,500 $ 6,500,000
-------------
Total Short-Term Municipal Notes
(cost $7,000,000) 7,000,000
-------------
Total Investments-98.9%
(cost $133,628,505) 139,127,474
Other assets less liabilities-1.1% 1,538,877
-------------
Net Assets-100% $ 140,666,351
=============
FINANCIAL FUTURES CONTRACTS (see Note D)
Value at
Number of Expiration Original March 31, Unrealized
Type Contracts Position Month Value 2006 Depreciation
- -----------------------------------------------------------------------------------------------------
U.S. Treasury Note June
10 Yr Futures 31 Long 2006 $3,338,428 $3,298,109 $ (40,319)
INTEREST RATE SWAP CONTRACTS (see Note D)
Rate Type
---------------------------
Payment Payment
Notional made received Unrealized
Swap Amount Termination by the by the Appreciation/
Counterparty (000) Date Portfolio Portfolio (Depreciation)
- ---------------------------------------------------------------------------------------------------
Citigroup, Inc. $ 5,000 5/30/06 MMD+ 3.69% $ (55,907)
Citigroup, Inc. 1,400 6/22/07 BMA* 2.962% (10,887)
Goldman Sachs & Co. 700 7/05/06 BMA* 3.283% 463
Goldman Sachs & Co. 700 1/05/07 BMA* 3.405% 36
JPMorgan Chase & Co. 1,200 4/05/07 BMA* 2.988% (7,455)
Morgan Stanley 700 4/06/06 BMA* 3.081% 86
Morgan Stanley 700 10/06/06 BMA* 3.217% (332)
+ MMD (Municipal Market Data)
* Variable interest based on the BMA (Bond Market Association)
40 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
(a) Position, or portion thereof with an aggregate market value of $65,304 has
been segregated to collateralize margin requirements for open futures contracts.
(b) Represents entire or partial position segregated as collateral for
interest rate swaps.
(c) Variable rate coupon, rate shown as of March 31, 2006.
Glossary of Terms:
AMBAC - American Municipal Bond Assurance Corporation
AMT - Alternative Minimum Tax
FGIC - Financial Guaranty Insurance Company
FHA - Federal Housing Authority
GO - General Obligation
MBIA - Municipal Bond Investors Assurance
MFHR - Multi-Family Housing Revenue
XLCA - XL Capital Assurance, Inc.
See notes to financial statements.
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 41
MICHIGAN PORTFOLIO
PORTFOLIO OF INVESTMENTS
March 31, 2006 (unaudited)
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
MUNICIPAL BONDS & NOTES-98.8%
Long-Term Municipal Bonds-94.1%
Michigan-76.4%
Allen Park Pub Sch Dist GO
(Sch Bldg & Site) Ser 03
5.00%, 5/01/13-5/01/22 $ 15,510 $ 16,333,079
Cedar Springs Pub Sch Dist
Ser 03
5.00%, 5/01/28 1,835 1,894,472
Charles Stewart Mott Cmnty College
(Cmnty College Facs) MBIA
5.00%, 5/01/21 1,675 1,760,978
Detroit GO
Ser 04A-1
5.25%, 4/01/22 6,930 7,318,357
Detroit Sch Brd
(Sch Brd Loan Fund) FSA Ser 01A
5.125%, 5/01/31 2,900 3,096,823
Detroit Tax Increment
(Diamler/Chrysler Assembly Plant)
Ser 98A
5.50%, 5/01/21 1,640 1,530,514
Detroit Water Supply Sys
FGIC Ser 01B
5.50%, 7/01/33 3,550 3,793,317
Genesee County GO
(Water Supply Sys) AMBAC Ser 04
5.00%, 11/01/26 3,000 3,136,020
Kalamazoo Hosp Fin Auth
(Borgess Med Ctr) FGIC Ser 94A
7.01%, 6/01/11(a) 2,360 2,377,370
Kent Hosp Fin Auth Rev
(Metropolitan Hosp Proj) Ser 05A
5.75%, 7/01/25 210 222,478
Lansing Water & Elec Sys
FSA Ser 03A
5.00%, 7/01/25 2,200 2,287,846
Michigan Higher Ed Fac
(Hope College) Ser 02A
5.90%, 4/01/32 3,465 3,698,437
Michigan Higher Ed Student Loan Auth
AMBAC Ser 17G AMT
5.20%, 9/01/20 3,500 3,664,605
Michigan Hosp Fin Auth
(Crittenton Hosp) Ser 02A
5.625%, 3/01/27 1,250 1,322,738
(Trinity Health) Ser 00A
6.00%, 12/01/27 1,485 1,613,705
42 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
Michigan Hosp Fin Auth Rev
(Chelsea Cmnty Hosp Oblig)
5.00%, 5/15/25 $ 415 $ 409,949
Michigan Hsg Dev Auth MFHR
(Arbor Pointe) GNMA Ser 99
5.40%, 6/20/40 1,810 1,840,209
(Danbury Manor) FNMA Ser 02A AMT
5.30%, 6/01/35(a) 2,490 2,540,049
(Oakbrook Village Proj) GNMA Ser 00A AMT
6.50%, 1/20/42 2,970 3,157,080
(Rental Rev) AMBAC Ser 97A AMT
6.10%, 10/01/33(b) 5,400 5,625,612
(Rental Rev) GNMA Ser 02A AMT
5.50%, 10/20/43 1,950 2,002,182
Michigan Municipal Bond Auth Rev
(Clean Water State Revolving Fd)
5.00%, 10/01/24 5,960 6,282,257
(Sch Dist City Of Detroit) FSA
5.00%, 6/01/20 2,000 2,097,200
Michigan State Hosp Fin Auth Rev
(Marquette Gen Hosp Oblig Grp A)
5.00%, 5/15/26 785 785,526
Michigan State
(Trunk Line Fund) FSA
Ser 01A
5.25%, 11/01/30 4,000 4,263,880
Michigan Strategic Fund
(Detroit Edison) XLCA Ser 02C AMT
5.45%, 12/15/32 3,000 3,168,270
Michigan Strategic Fund Health Fac
(Autumn Wood) GNMA Ser 02A
5.20%, 12/20/22 3,000 3,134,220
(Holland Home) Ser 98
5.75%, 11/15/18-11/15/28 2,000 2,120,780
Midland Cnty PCR
(CMS Energy) Ser 00A AMT
6.875%, 7/23/09 850 855,423
North Muskegon Sch Dist
Ser 03
5.25%, 5/01/28 1,500 1,624,065
Olivet Sch Brd Fund
Ser 02
5.125%, 5/01/28 1,065 1,143,160
Ovid Elsie Schs Brd Fund
Ser 02
5.00%, 5/01/25 2,650 2,825,404
Plymouth Edl Ctr Chrtr Sch Pub Sch Academy Rev
Ser 05
5.125%, 11/01/18 1,050 1,050,882
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 43
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
Pontiac Tax Increment Fin Auth
(Dev Area No. 3) Ser 02
6.25%, 6/01/22 $ 1,280 $ 1,369,664
Romulus Tax Increment Fin Auth
Ser 94
6.75%, 11/01/19 1,585 1,613,879
Royal Oak Hosp Fin Auth
(William Beaumont Hosp) MBIA Ser 01M
5.25%, 11/15/35 3,200 3,300,096
Saginaw Hosp Fin Auth
(Convenant Med Ctr) Ser 00F
6.50%, 7/01/30 1,770 1,937,654
Southfield Michigan Libr Bldg Auth MBIA
5.00%, 5/01/25 3,340 3,475,771
-------------
110,673,951
-------------
California-1.6%
California Health Fac Fin Auth
(Sutter Heath) Ser 00A
6.25%, 8/15/35 1,100 1,213,839
California State GO
5.25%, 11/01/25 1,000 1,056,840
-------------
2,270,679
-------------
Florida-4.2%
Collier Cnty Cmnty Dist
(Fiddlers Creek) Ser 96
7.50%, 5/01/18 1,355 1,395,582
Crossings at Fleming Island Cmnty Dev Dist
(Eagle Harbor) Ser 00C
7.10%, 5/01/30 1,835 1,930,273
Double Branch Cmnty Dev Dist
(Oakleaf Village) Ser 02A
6.70%, 5/01/34 985 1,064,293
Gateway Cmnty Dev Dist
(Sun City) Ser 03B
5.50%, 5/01/10 510 512,968
Northern Palm Beach Assessment Dist
(Unit Dev 27B) Ser 02
6.40%, 8/01/32 800 822,168
Waterlefe Cmnty Dev Dist
Ser 01B
6.25%, 5/01/10 385 386,209
-------------
6,111,493
-------------
Illinois-1.0%
Antioch Village Spcl Svc Area
(Clublands Proj) Ser 03
6.625%, 3/01/33 500 520,730
(Deercrest Proj) Ser 03
6.625%, 3/01/33 500 520,730
44 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
Plano Spl Svc Area No. 3 Spl Tax
(Lakewood Springs Proj) Ser 05A
5.95%, 3/01/28 $ 395 $ 390,647
-------------
1,432,107
-------------
Puerto Rico-10.9%
Puerto Rico Elec Pwr Auth Rev
XLCA Ser 02-1
5.25%, 7/01/22 5,000 5,346,500
Puerto Rico Hsg Fin Corp SFMR
(Mortgage Rev) AMT
Ser 01B GNMA
5.50%, 12/01/23 2,015 2,047,341
(Mortgage Rev) Ser 01C AMT
5.30%, 12/01/28 1,770 1,788,142
Puerto Rico Ind Fin Auth Health Fac
(Ascension Health) Ser 00A
6.125%, 11/15/30 3,000 3,302,850
Puerto Rico Municipal Fin Agy
Ser 05A
5.25%, 8/01/23 275 289,047
Puerto Rico Pub Fin Corp
MBIA Ser 01A
5.00%, 8/01/31 2,875 3,051,065
-------------
15,824,945
-------------
Total Long-Term Municipal Bonds
(cost $132,005,223) 136,313,175
-------------
Short-Term Municipal Notes(c)-4.7%
Alaska-1.4%
Valdez Alaska Marine Term Rev
(BP Pipelines Proj) Ser 03B
3.19%, 7/01/37 2,000 2,000,000
-------------
Michigan-2.6%
Caledonia Cmnty Schs GO
MBIA Ser 05
3.20%, 5/01/25 3,500 3,500,000
Michigan University Revs
(Med Svc Plan) Ser 98A-1
3.14%, 12/01/21 365 365,000
-------------
3,865,000
-------------
Virginia-0.7%
Loudoun Cnty Indl Dev Auth Rev
(Howard Hughes Med) Ser 03A
3.17%, 2/15/38 1,000 1,000,000
-------------
Total Short-Term Municipal Notes
(cost $6,865,000) 6,865,000
-------------
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 45
Value
- -------------------------------------------------------------------------------
Total Investments-98.8%
(cost $138,870,223) $ 143,178,175
Other assets less liabilities-1.2% 1,730,745
-------------
Net Assets-100% $ 144,908,920
=============
INTEREST RATE SWAP CONTRACTS (see Note D)
Rate Type
---------------------------
Payment Payment
Notional made received Unrealized
Swap Amount Termination by the by the Appreciation/
Counterparty (000) Date Portfolio Portfolio (Depreciation)
- ---------------------------------------------------------------------------------------------------
Citigroup, Inc. $ 1,400 6/22/07 BMA* 2.962% $ (10,887)
Goldman Sachs & Co. 700 7/05/06 BMA* 3.283% 463
Goldman Sachs & Co. 700 1/05/07 BMA* 3.405% 36
JPMorgan Chase & Co. 1,300 4/05/07 BMA* 2.988% (8,076)
Morgan Stanley 700 4/06/06 BMA* 3.081% 87
Morgan Stanley 700 10/06/06 BMA* 3.217% (332)
* Variable interest based on the BMA (Bond Market Association)
(a) Inverse floater-security with variable or floating interest rate that
moves in opposite direction of short-term interest rates.
(b) Represents entire or partial position segregated as collateral for
interest rate swaps.
(c) Variable rate coupon, rate not shown as of March 31, 2006.
Glossary of Terms:
AMBAC - American Municipal Bond Assurance Corporation
AMT - Alternative Minimum Tax
FGIC - Financial Guaranty Insurance Company
FNMA - Federal National Mortgage Association
FSA - Financial Security Assurance, Inc.
GNMA - Government National Mortgage Association
GO - General Obligation
MBIA - Municipal Bond Investors Assurance
MFHR - Multi-Family Housing Revenue
PCR - Pollution Control Revenue
SFMR - Single Family Mortgage Revenue
XLCA - XL Capital Assurance, Inc.
See notes to financial statements.
46 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
MINNESOTA PORTFOLIO
PORTFOLIO OF INVESTMENTS
March 31, 2006 (unaudited)
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
MUNICIPAL BONDS & NOTES-98.8%
Long-Term Municipal Bonds-97.1%
Minnesota-97.1%
Bemidji Health Fac
(North Country Health Svcs) RADIAN Ser 02
5.00%, 9/01/31 $ 1,500 $ 1,527,900
Brooklyn Park MFHR
(Brooks Landing) FNMA Ser 99A AMT
5.50%, 7/01/19 1,355 1,397,100
Cass Lake Sch Dist FGIC
5.00%, 2/01/26 1,760 1,832,072
Chaska Elec Rev
(Generating Facs) Ser 05A
5.25%, 10/01/25 1,000 1,058,990
Dakota Cnty MFHR
(Grande Market Place Proj)
GNMA Ser 02A AMT
5.40%, 11/20/43 4,750 4,826,285
Farmington Indpt Sch Dist 192
FSA Ser 05B
5.00%, 2/01/24 3,875 4,066,347
Golden Valley Health Fac
(Convenant Retirement Cmnty) Ser 99A
5.50%, 12/01/29 1,000 1,025,730
Little Canada MFHR
(Cedars Lakeside Apts) GNMA Ser 97A
5.95%, 2/01/32 2,650 2,723,299
Minneapolis & St Paul Arpt Rev
FGIC Ser 00B AMT
6.00%, 1/01/21 3,455 3,702,378
MBIA Ser 03A
5.00%, 1/01/28 1,500 1,549,245
Minneapolis Common Bond Fund
Ser 97-2 AMT
6.20%, 6/01/17 1,485 1,521,605
Ser 01G-3
5.45%, 12/01/31 1,500 1,623,225
Minneapolis Health Care Sys Rev
(Fairview Health Svcs) Ser 05D
5.00%, 11/15/30 1,000 1,041,790
Minneapolis Hosp Rev
(Allina Health Sys) Ser 02A
5.75%, 11/15/32 1,500 1,595,535
Minneapolis MFHR
(Bottineau Commons Proj) GNMA Ser 02 AMT
5.45%, 4/20/43 2,000 2,064,480
(Sumner Field) GNMA Ser 02 AMT
5.60%, 11/20/43 2,505 2,560,386
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 47
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
Minneapolis Pkg Assmt GO
MBIA Ser 02
5.25%, 12/01/26 $ 2,000 $ 2,154,400
Minnesota Agric & Eco Dev
(Small Business Loan Proj) AMT
Ser 96A
6.75%, 8/01/16 1,450 1,486,641
Ser 00C
7.25%, 8/01/20 1,000 1,058,560
Ser 00D
7.25%, 8/01/20 1,000 1,058,560
Minnesota Agric & Eco Dev Health Fac
(Benedictine Health Sys) MBIA Ser 99
5.13%, 2/15/29(a) 4,000 4,120,160
(Evangelical Lutheran Proj) Ser 02
6.00%, 2/01/22-2/01/27 2,880 3,100,122
Minnesota Agric & Eco Dev Brd Rev
(Prerefunded-Health Care Sys) Ser 00A
6.375%, 11/15/29 1,700 1,900,821
Minnesota Higher Ed Fac Auth
(College Art & Design) Ser 00-5D
6.75%, 5/01/26 1,000 1,076,660
(Hamline University) Ser 99-5B
6.00%, 10/01/29 1,250 1,310,738
(St Catherine College)
5.38%, 10/01/32 1,000 1,038,500
(University St Thomas) Ser 04-5
5.00%, 10/01/24 1,000 1,033,520
5.25%, 10/01/34 1,000 1,044,540
Minnesota Hsg Fin Agy SFMR
Ser 96F AMT
6.30%, 1/01/28 770 782,882
Ser 96G AMT
6.25%, 7/01/26 1,095 1,113,155
Ser 98H AMT
6.05%, 7/01/31 2,085 2,131,516
Minnesota Municipal Pwr Agy Elec
Ser 04A
5.25%, 10/01/24 500 527,660
Minnesota Municipal Pwr Agy Elec Rev
5.25%, 10/01/21 3,000 3,188,880
Minnetonka MFHR
(Archer Heights Apts Proj)
GNMA Ser 99A AMT
5.30%, 1/20/27 1,620 1,657,568
Prior Lake Indpt Sch Dist No. 719
(School Bldg) Ser 05B FSA
5.00%, 2/01/23 3,350 3,520,448
48 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
Seaway Port Auth Duluth
Indl Dev Dock & Wharf
(Cargill, Inc. Proj) Ser 04
4.20%, 5/01/13 $ 2,150 $ 2,113,794
Shakopee Health Care Facs TBD
(St Francis Regl Med Ctr) Ser 04
5.10%, 9/01/25 600 614,388
Shoreview MFHR
(Lexington Shores Proj)
GNMA Ser 01A AMT
5.55%, 8/20/42 1,445 1,471,689
St. Paul Recreational Facs Gross Rev
(Highland National Proj)
5.00%, 10/01/20-10/01/26 1,750 1,832,910
St. Cloud Hosp Rev
(Saint Cloud Hosp) FSA Ser 00A
5.875%, 5/01/30 3,750 4,046,550
St. Paul Hsg & Redev Auth Hosp Rev
(Healtheast Proj) Ser 05
6.00%, 11/15/25 500 540,875
St. Paul MFHR
(Burlington Apt-8) GNMA
5.35%, 5/01/31 1,550 1,550,325
St. Paul Pkg Auth Rev
(Block 19 Ramp) FSA Ser 02A
5.35%, 8/01/29 3,075 3,265,558
St. Paul Port Auth Lease Rev
(Cedar Street Office Building) Ser 03
5.00%, 12/01/23 1,000 1,037,920
Ser 02
5.25%, 12/01/27 1,725 1,807,679
Waconia Health Care Fac Rev
(Ridgeview Med Ctr) RADIAN Ser 99A
6.125%, 1/01/29 3,415 3,660,778
Western Power Agy
MBIA Ser 03A
5.00%, 1/01/26-1/01/30 3,100 3,212,580
White Bear Lake MFHR
(Renova Partners Proj)
FNMA Ser 01 AMT
5.60%, 10/01/30 1,000 1,027,530
Willmar Hosp Rev
(Rice Mem Hosp Proj) FSA Ser 02
5.00%, 2/01/32 2,000 2,066,360
-------------
Total Long-Term Municipal Bonds
(cost $92,120,277) 95,670,634
-------------
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 49
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
Short-Term Municipal Notes Notes(b)-1.7%
California-0.2%
California State GO
Ser 03A-2
3.07%, 5/01/33 $ 200 $ 200,000
-------------
New York-1.5%
New York City Municipal Wtr Fin Auth Wtr & Swr
Sys Rev (2nd Gen Resolution) Ser 05
3.18%, 6/15/32 1,500 1,500,000
-------------
Total Short-Term Municipal Notes
(cost $1,700,000) 1,700,000
-------------
Total Investments-98.8%
(cost $93,820,277) 97,370,634
Other assets less liabilities-1.2% 1,177,961
-------------
Net Assets-100% $ 98,548,595
=============
INTEREST RATE SWAP CONTRACTS (see Note D)
Rate Type
---------------------------
Payment Payment
Notional made received Unrealized
Swap Amount Termination by the by the Appreciation/
Counterparty (000) Date Portfolio Portfolio (Depreciation)
- ---------------------------------------------------------------------------------------------------
Citigroup, Inc. $ 5,000 5/17/06 MMD+ 3.90% $(58,487)
Citigroup, Inc. 1,000 6/22/07 BMA* 2.962% (7,776)
Goldman Sachs & Co. 500 7/05/06 BMA* 3.283% 331
Goldman Sachs & Co. 500 1/05/07 BMA* 3.405% 25
JPMorgan Chase & Co. 900 4/05/07 BMA* 2.988% (5,591)
Morgan Stanley 500 4/06/06 BMA* 3.081% 62
Morgan Stanley 500 10/06/06 BMA* 3.217% (238)
+ MMD (Municipal Market Data)
* Variable interest based on the BMA (Bond Market Association)
50 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
(a) Represents entire or partial position segregated as collateral for
interest rate swaps.
(b) Variable rate coupon, rate shown as of March 31, 2006.
Glossary of Terms:
AMT - Alternative Minimum Tax
FGIC - Financial Guaranty Insurance Company
FNMA - Federal National Mortgage Association
FSA - Financial Security Assurance, Inc.
GNMA - Government National Mortgage Association
GO - General Obligation
MBIA - Municipal Bond Investors Assurance
MFHR - Multi-Family Housing Revenue
RADIAN - Radian Group, Inc.
SFMR - Single Family Mortgage Revenue
TBD - To Be Determined
See notes to financial statements.
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 51
NEW JERSEY PORTFOLIO
PORTFOLIO OF INVESTMENTS
March 31, 2006 (unaudited)
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
MUNICIPAL BONDS & NOTES-98.9%
Long-Term Municipal Bonds-94.8%
New Jersey-85.9%
Bergen Cnty Impt Auth Sch
(Wyckoff Twp Brd Ed Proj) Ser 05
5.00%, 4/01/25 $ 1,555 $ 1,623,638
Hoboken Parking Auth
AMBAC Ser 01A
5.30%, 5/01/27 3,700 4,029,226
Lafayette Yard Com Dev Corp
(Conv Ctr Hotel Proj) MBIA Ser 00
5.80%, 4/01/35 2,100 2,282,742
Middlesex Cnty MFHR
FNMA Ser 01 AMT
5.25%, 7/01/21 750 789,517
Morris-Union Jointure Commn COP
RADIAN Ser 04
5.00%, 5/01/24 2,200 2,264,592
New Jersey Eco Dev Auth
(American Wtr Co.) FGIC AMT
6.875%, 11/01/34 5,000 5,060,550
(Anheuser-Busch) Ser 95 AMT
5.85%, 12/01/30 5,000 5,112,800
(Hackensack Wtr Co.)
MBIA Ser 94B AMT
5.90%, 3/01/24 4,000 4,006,400
(Kapkowski Rd) Ser 98B
6.50%, 4/01/28 4,500 5,306,355
(Liberty State Park Proj)
Ser A
5.00%, 3/01/24 1,500 1,565,595
Ser C
5.00%, 3/01/27 2,000 2,078,580
(Masonic Charity Foundation Proj)
Ser 01
5.50%, 6/01/31 1,000 1,067,600
Ser 02
5.25%, 6/01/24 540 572,162
(NUI Corp.) ACA Ser 98A AMT
5.25%, 11/01/33 3,700 3,749,321
(Pub Svc Elec & Gas) MBIA Ser 94A AMT
6.40%, 5/01/32 5,000 5,011,200
(Sch Facs Construction)
5.25%, 3/01/25 3,300 3,479,817
52 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
New Jersey Eco Dev Auth Sch Fac
Ser 04-I
5.25%, 9/01/24 $ 2,510 $ 2,735,749
AMBAC Ser 03
7.121%, 6/15/21(a)(b) 2,250 2,789,100
New Jersey Health Care Fac
(Atlantic City Med Ctr) Ser 02
5.75%, 7/01/25 1,875 1,972,988
(Bayshore Cmnty Hosp) RADIAN Ser 02
5.125%, 7/01/32 9,250 9,524,725
(Capital Health Sys) Ser 03
5.00%, 7/01/26 1,250 1,268,100
(Good Shepherd) RADIAN Ser 01A
5.20%, 7/01/31 1,350 1,398,033
(Kennedy Health Sys) Ser 01
5.625%, 7/01/31 2,700 2,837,592
(Newton Memorial Hosp) FSA Ser 01
5.00%, 7/01/26 1,500 1,548,180
(Palisades Med Ctr) ACA Ser 99
5.25%, 7/01/28 1,000 1,010,500
(Southern Ocean County Hosp) RADIAN Ser 01
5.125%, 7/01/31 4,500 4,640,265
(Wood Johnson) Ser 00
5.75%, 7/01/31 3,350 3,570,899
New Jersey Health Care Facs Fin Auth Rev
(RWJ Health Care Corp) RADIAN Ser 05B
5.00%, 7/01/25 960 988,570
(St. Clare's Hosp, Inc.) RADIAN Ser 04A
5.25%, 7/01/23 2,085 2,184,204
New Jersey Higher Ed
(Student Loan) MBIA Ser 00A AMT
6.15%, 6/01/19 950 962,901
New Jersey Hsg & Mtg Fin Agy MFHR
(Pooled Loan) AMBAC Ser 96A AMT
6.25%, 5/01/28 5,000 5,109,500
(Rental Hsg) FSA Ser 00A1 AMT
6.35%, 11/01/31 2,000 2,094,600
New Jersey State Ed Facs Auth Rev
(Higher Ed Cap Impt) Ser 02A
5.125%, 9/01/22 2,500 2,627,175
(Princeton University) Ser 05A
5.00%, 7/01/23 3,480 3,666,598
(Ramapo College of New Jersey)
AMBAC Ser 01D
5.00%, 7/01/31 1,000 1,030,090
FGIC Ser 04E
5.00%, 7/01/23-7/01/28 3,250 3,400,753
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 53
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
New Jersey State Trans Auth
(Trans Sys) Ser 03C
5.50%, 6/15/24 $ 3,750 $ 4,115,625
Newark Hsg Auth
(Newark Marine Terminal) MBIA Ser 04
5.25%, 1/01/21-1/01/22(c) 3,580 3,838,154
North Hudson Swr Auth
MBIA Ser 01A
Zero Coupon, 8/01/24 12,340 5,202,421
Port Auth of NY & NJ
(121st) MBIA Ser 00
5.375%, 10/15/35 5,000 5,176,550
(126th) FGIC Ser 02
5.25%, 5/15/37 2,500 2,629,075
(JFK Int'l Airport Proj) MBIA Ser 97-6 AMT
5.75%, 12/01/22 7,675 8,036,492
Salem Cnty PCR
(PSE&G Pwr) Ser 01A AMT
5.75%, 4/01/31 1,500 1,587,105
South Jersey Port Corp
(Marine Terminal) AMT
5.20%, 1/01/23 1,000 1,036,700
South Jersey Trans Auth
(Raytheon Aircraft Svcs) Ser 97A AMT
6.15%, 1/01/22 335 338,822
Union Cnty Impt Auth
MBIA Ser 03A
5.25%, 8/15/23 2,885 3,090,037
Vineland Swr Rev
(Landis Sewerage) FGIC Ser 93C
7.90%, 9/19/19(b) 3,250 3,895,255
-------------
142,306,853
-------------
California-0.7%
California State GO
5.25%, 11/01/25 1,000 1,056,840
-------------
Colorado-0.3%
Northwest Met Dist No. 3 GO
6.125%, 12/01/25 500 523,785
-------------
Florida-3.3%
Crossings at Fleming Island Cmnty Dev Dist
(Eagle Harbor) Ser 00C
7.10%, 5/01/30 2,500 2,629,800
Double Branch Cmnty Dev Dist
(Oakleaf Village) Ser 02A
6.70%, 5/01/34 1,000 1,080,500
Hammock Bay Cmnty Dev Dist
(Special Assessment) Ser 04A
6.15%, 5/01/24 500 499,835
54 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
Northern Palm Beach Assessment Dist
(Unit Dev 27B) Ser 02
6.40%, 8/01/32 $ 1,270 $ 1,305,192
-------------
5,515,327
-------------
Guam-0.3%
Guam Govt Wtrwks Auth Wtr & Wastewtr Sys Rev
6.00%, 7/01/25 500 533,430
-------------
Illinois-1.0%
Antioch Village Spcl Svc Area
(Clublands Proj) Ser 03
6.625%, 3/01/33 1,000 1,041,460
Plano Spl Svc Area No. 3 Spl Tax
(Lakewood Springs Proj) Ser 05A
5.95%, 3/01/28 550 543,939
-------------
1,585,399
-------------
Nevada-1.2%
Henderson Loc Impt Dist
Ser 03
5.80%, 3/01/23 925 954,970
North Las Vegas Cmnty Fac Dist
(No. 60 Aliante)
6.40%, 12/01/22 990 1,020,254
-------------
1,975,224
-------------
Ohio-0.3%
Port Auth Columbiana Cnty
Ohio Solid Waste Fac Rev
(Apex Environmental LLC) Ser 04A AMT
7.125%, 8/01/25 500 497,640
-------------
Pennsylvania-1.0%
Delaware Riv Jt Toll Bridge Rev
(PA/NJ Bridge) Ser 03
5.00%, 7/01/28 1,625 1,673,604
-------------
Virginia-0.8%
Broad Street Cmnty Dev Dist
(Parking Fac) Ser 03
7.50%, 6/01/33 1,200 1,305,792
-------------
Total Long-Term Municipal Bonds
(cost $149,073,198) 156,973,894
-------------
Short-Term Municipal Notes(d)-4.1%
California-1.5%
Irvine Impt Bd Act 1915
(Ltd Oblig-Assmt Dist No. 93-14)
3.16%, 9/02/25 2,500 2,500,000
-------------
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 55
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
New Jersey-2.3%
New Jersey State Edl Facs Auth Rev
(Princeton University) Ser 01B
2.90%, 7/01/21 $ 3,795 $ 3,795,000
-------------
New York-0.3%
New York City Municipal Wtr Fin Auth
Wtr & Swr Sys Rev
Ser 05 AA-1
3.18%, 6/15/32 500 500,000
-------------
Total Short-Term Municipal Notes
(cost $6,795,000) 6,795,000
-------------
Total Investments-98.9%
(cost $155,868,198) 163,768,894
Other assets less liabilities-1.1% 1,855,603
-------------
Net Assets-100% $ 165,624,497
=============
INTEREST RATE SWAP CONTRACTS (see Note D)
Rate Type
---------------------------
Payment Payment
Notional made received Unrealized
Swap Amount Termination by the by the Appreciation/
Counterparty (000) Date Portfolio Portfolio (Depreciation)
- ---------------------------------------------------------------------------------------------------
Citigroup, Inc. $ 1,800 6/22/07 BMA* 2.962% $ (13,997)
Goldman Sachs & Co. 900 7/05/06 BMA* 3.283% 595
Goldman Sachs & Co. 900 1/05/07 BMA* 3.405% 46
JPMorgan Chase & Co. 1,700 4/05/07 BMA* 2.988% (10,561)
Morgan Stanley 900 4/06/06 BMA* 3.081% 112
Morgan Stanley 900 10/06/06 BMA* 3.217% (428)
* Variable interest based on the BMA (Bond Market Association)
(a) Security is exempt from registration under Rule 144A of the Securities Act
of 1933. This security is considered liquid and may be resold in transactions
exempt from registration, normally to qualified institutional buyers. At March
31, 2006, the aggregate market value of this security amounted to $2,789,100 or
1.7% of net assets.
(b) Inverse floater-security with variable or floating interest rate that
moves in opposite direction of short-term interest rates.
(c) Represents entire or partial position segregated as collateral for
interest rate swaps.
(d) Variable rate coupon, rate shown as of March 31, 2006.
56 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
New Jersey Portfolio--Portfolio of Investments
Glossary of Terms:
ACA - American Capital Access
AMBAC - American Municipal Bond Assurance Corporation
AMT - Alternative Minimum Tax
FGIC - Financial Guaranty Insurance Company
FNMA - Federal National Mortgage Association
FSA - Financial Security Assurance, Inc.
GO - General Obligation
MBIA - Municipal Bond Investors Assurance
MFHR - Multi-Family Housing Revenue
PCR - Pollution Control Revenue
RADIAN - Radian Group, Inc.
See notes to financial statements.
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 57
OHIO PORTFOLIO
PORTFOLIO OF INVESTMENTS
March 31, 2006 (unaudited)
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
MUNICIPAL BONDS & NOTES-101.0%
Long-Term Municipal Bonds-94.6%
Ohio-85.2%
Akron GO
MBIA Ser 02
5.00%, 12/01/23 $ 1,000 $ 1,041,260
Akron Stadium Rev
(Canal Park) Ser 96
6.90%, 12/01/16 5,000 5,208,350
Brookville Sch Dist GO
FSA Ser 03
5.00%, 12/01/26 2,000 2,081,120
Canton City Sch Dist
MBIA Ser 04B
5.00%, 12/01/22-12/01/23 2,150 2,260,121
Central Ohio Solid Waste Auth
AMBAC Ser 04B
5.00%, 12/01/21 2,035 2,139,945
Cincinnati Tech & Cmnty College
AMBAC Ser 02
5.00%, 10/01/28 5,000 5,186,400
Cleveland Cuyahoga Port Auth
Ser 01
7.35%, 12/01/31 2,000 2,091,100
(Rita Proj) RADIAN Ser 04
5.00%, 11/15/19 1,850 1,916,674
Cleveland GO
Ser 02 MBIA
5.25%, 12/01/27 4,380 4,610,607
Ser 04 AMBAC
5.25%, 12/01/24 1,200 1,285,176
Columbus Sch Dist
FGIC Ser 03
5.00%, 12/01/24-12/01/25 4,730 4,924,679
Cuyahoga Cnty Hosp Rev
(UHHS) Ser 00
7.50%, 1/01/30 1,900 2,099,215
Cuyahoga Cnty MFHR
(Livingston Park Apts) GNMA Ser 02A
5.45%, 9/20/39 1,500 1,528,440
(Longwood Proj) GNMA Ser 01 AMT
5.60%, 1/20/43 3,620 3,719,876
(West Tech Apts Proj) GNMA Ser 02A AMT
5.45%, 3/20/44 1,075 1,095,457
Dayton Arpt Rev
(James M Cox Dayton Intl) RADIAN Ser 03A
5.00%, 12/01/23 1,280 1,308,506
58 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
Dayton Sch Dist
(Administrative Fac Proj) Ser 03
6.00%, 12/01/19-12/01/21 $ 3,040 $ 3,347,198
Delaware Sch Dist
MBIA Ser 04
5.00%, 12/01/19 1,340 1,418,042
Dublin Sch Dist GO
FSA Ser 03
5.00%, 12/01/22 1,500 1,571,775
Erie Cnty Hosp Rev
(Firelands Med Ctr) Ser 02A
5.625%, 8/15/32 1,500 1,578,735
Fairfield Cnty Hosp Facs Rev
(Fairfield Med Ctr Proj) RADIAN Ser 03
5.00%, 6/15/24 1,000 1,020,740
Fairview Park
MBIA Ser 05
5.00%, 12/01/25 4,000 4,180,520
Franklin Cnty
(Online Computer Library Ctr) Ser 98A
5.20%, 10/01/20 2,800 2,905,560
Franklin Cnty MFHR
(Agler Green) GNMA Ser 02A AMT
5.65%, 5/20/32 770 797,835
5.80%, 5/20/44 1,150 1,189,019
(Wellington Village Proj)
GNMA Ser 01A AMT
5.40%, 2/20/43 3,845 3,884,027
Greater Cleveland Regl Trans Auth
MBIA Ser 04
5.00%, 12/01/24 1,350 1,416,623
Hamilton Cnty Health Fac
(Twin Towers) Ser 99A
5.80%, 10/01/23 1,775 1,804,057
Hamilton City Sch Dist MBIA
5.00%, 12/01/24 1,000 1,047,830
Hamilton Cnty Convention Facs Auth Rev
FGIC Ser 04
5.00%, 12/01/23 1,330 1,395,263
Hamilton Cnty Sales Tax
AMBAC Ser 00B
5.25%, 12/01/32(a) 13,185 13,764,743
Hilliard Sch Dist
(Sch Constr) MBIA
5.00%, 12/01/26 1,850 1,940,909
Lucas Cnty Health Fac
(Altenheim Proj) GNMA Ser 99
5.50%, 7/20/40 3,200 3,356,640
Madeira City Sch Dist GO
MBIA Ser 04
5.00%, 12/01/22-12/01/23 2,665 2,804,351
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 59
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
Oak Hills Loc Sch Dist
FSA Ser 05
5.00%, 12/01/25 $ 1,000 $ 1,047,530
Ohio Air Quality Dev Auth PCR
(Toledo Edison Co) Ser 97A AMT
6.10%, 8/01/27 5,000 5,219,849
Ohio Capital Corp MFHR
(Rental Hsg) MBIA Ser 95E Pre Re
6.35%, 1/01/22 755 767,397
Ohio Hsg Fin Agy MFHR
(Park Trails Apt) AMBAC Ser 01A AMT
5.50%, 12/01/34 1,480 1,514,913
Ohio Hsg Fin Agy SFMR
(Mortgage Rev) GNMA AMT
Ser 02
5.375%, 9/01/33 1,790 1,806,182
Ser 02-A2
5.60%, 9/01/34 375 381,379
Ser 02-A3
5.50%, 9/01/34 1,340 1,368,341
Ohio Swr & Solid Waste Disp Facs
(Anheuser-Busch) Ser 01 AMT
5.50%, 11/01/35 3,000 3,113,370
Ohio State Bldg Auth
(Adult Correctl Proj) MBIA Ser 04A
5.00%, 4/01/22 2,975 3,122,739
(State Facs-Admin Bldg Fd Proj) Ser 05A
5.00%, 4/01/24 1,500 1,574,175
Ohio State GO
Ser 04A
5.00%, 6/15/22 3,000 3,158,370
Ohio State Higher Ed Fac Cmnty
(Denison University Proj) Ser 04
5.00%, 11/01/21-11/01/24 3,440 3,602,783
Ohio State University
MBIA Ser 04
5.00%, 12/01/22 1,950 2,048,436
Ohio Wtr Dev Auth
(Anheuser-Busch) Ser 99 AMT
6.00%, 8/01/38(b) 2,250 2,323,463
Ohio Wtr Dev Auth PCR
(Cleveland Electric) Ser 97A AMT
6.10%, 8/01/20 2,000 2,078,720
Pinnacle Cmnty Fin Auth
Series A
6.00%, 12/01/22 2,155 2,224,413
Port Auth Columbiana Cnty Solid Waste Fac Rev
(Apex Environmental LLC) Ser 04A AMT
7.125%, 8/01/25 500 497,640
60 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
Princeton Sch Dist
MBIA Ser 03
5.00%, 12/01/24 $ 1,600 $ 1,671,248
Riversouth Auth Rev
(Area Redevelopment)
Series 04A
5.25%, 12/01/21-12/01/22 2,000 2,145,780
Ser 05
5.00%, 12/01/24 3,590 3,746,273
Steubenville Hosp Rev
(Trinity Health) Ser 00
6.50%, 10/01/30 2,500 2,725,550
Teays Valley Loc Sch Dist
MBIA Ser 05
5.00%, 12/01/27 3,040 3,172,331
Toledo Sch Dist
FGIC Ser 03B
5.00%, 12/01/23 2,940 3,070,918
Toledo-Lucas Cnty Port Auth
(Cargill, Inc. Proj) Ser 04B
4.50%, 12/01/15 2,500 2,521,325
(Crocker Park Proj) Ser 03
5.375%, 12/01/35 2,000 2,095,780
Toledo-Lucas Cnty Port Fac
(CSX Trans) Ser 92
6.45%, 12/15/21 1,270 1,452,054
University of Cincinnati COP
(University Cincinnati Ctr Proj) MBIA
5.00%, 6/01/24 4,470 4,666,635
155,038,387
California-1.7%
California State GO
5.20%, 4/01/26 1,000 1,054,770
5.25%, 4/01/29 2,000 2,101,080
3,155,850
Colorado-0.3%
Northwest Met Dist No. 3 GO
6.125%, 12/01/25 500 523,785
Florida-3.6%
Collier Cnty Cmnty Dev Dist
(Fiddlers Creek) Ser 96
7.50%, 5/01/18 1,255 1,292,587
Collier Cnty Ind Dev Rev
(Southern States Utils) Ser 96 AMT
6.50%, 10/01/25 1,500 1,533,390
Crossings at Fleming Island Cmnty Dev Dist
(Eagle Harbor) Ser 00C
7.10%, 5/01/30 2,000 2,103,840
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 61
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
Double Branch Cmnty Dev Dist
(Oakleaf Village) Ser 02A
6.70%, 5/01/34 $ 950 $ 1,026,475
Hammock Bay Cmnty Dev Dist-Fla Spl Assmt Rev
Ser 04A
6.15%, 5/01/24 500 499,835
Manatee Cnty Cmnty Dev Dist
(Heritage Harbor South) Ser 02B
5.40%, 11/01/08 55 54,621
-------------
6,510,748
-------------
Georgia-0.3%
Atlanta Tax Allocation
(Eastside Proj) Ser 05B
5.60%, 1/01/30 500 511,020
-------------
Illinois-0.9%
Antioch Village Spl Svc Area
(Deercrest Proj) Ser 03
6.625%, 3/01/33 1,000 1,041,460
Plano Spl Svc Area No. 3 Spl Tax
(Lakewood Springs Proj) Ser 05A
5.95%, 3/01/28 565 558,774
-------------
1,600,234
-------------
Puerto Rico-2.6%
Puerto Rico Municipal Fin Agy GO
Ser 05A
5.25%, 8/01/23 375 394,155
Puerto Rico Tobacco Settlement Rev
(Childrens Trust Fund) Ser 00
6.00%, 7/01/26 4,000 4,347,800
-------------
4,741,955
-------------
Total Long-Term Municipal Bonds
(cost $166,345,282) 172,081,979
-------------
Short-Term Municipal Notes(c)-6.4%
Alaska-0.9%
Valdez Marine Term Rev
(BP Pipelines, Inc. Proj) Ser 03B
3.19%, 7/01/37 1,700 1,700,000
-------------
Nevada-1.1%
Clark Cnty Sch Dist GO
Ser 01A
3.15%, 6/15/21 2,000 2,000,000
-------------
New Mexico-2.2%
Hurley PCR
(Updates-Kennecott Santa Fe)
3.19%, 12/01/15 4,000 4,000,000
-------------
62 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
New York-2.2%
New York City Transitional Fin Auth
(NYC Recovery) Ser 02E
3.16%, 11/01/22 $ 4,000 $ 4,000,000
-------------
Total Short-Term Municipal Notes
(cost $11,700,000) 11,700,000
-------------
Total Investments-101.0%
(cost $178,045,282) 183,781,979
Other assets less liabilities-(1.0%) (1,844,549)
-------------
Net Assets-100% $ 181,937,430
=============
INTEREST RATE SWAP CONTRACTS (see Note D)
Rate Type
---------------------------
Payment Payment
Notional made received Unrealized
Swap Amount Termination by the by the Appreciation/
Counterparty (000) Date Portfolio Portfolio (Depreciation)
- ---------------------------------------------------------------------------------------------------
Citigroup, Inc. $10,000 6/01/06 MMD+ 3.82% $(188,295)
Citigroup, Inc. 2,000 6/22/07 BMA* 2.962% (15,552)
Goldman Sachs & Co. 900 7/05/06 BMA* 3.283% 595
Goldman Sachs & Co. 900 1/05/07 BMA* 3.405% 46
JPMorgan Chase & Co. 1,800 4/05/07 BMA* 2.988% (11,182)
Morgan Stanley 900 4/06/06 BMA* 3.081% 112
Morgan Stanley 900 10/06/06 BMA* 3.217% (428)
+ MMD (Municipal Market Data)
* Variable interest based on the BMA (Bond Market Association)
(a) Represents entire or partial position segregated as collateral for
interest rate swaps.
(b) Inverse floater-security with variable or floating interest rate that
moves in opposite direction of short-term interest rates.
(c) Variable rate coupon, rate shown as of March 31, 2006.
Glossary of Terms:
AMBAC - American Municipal Bond Assurance Corporation
AMT - Alternative Minimum Tax
FGIC - Financial Guaranty Insurance Company
FSA - Financial Security Assurance, Inc.
GNMA - Government National Mortgage Association
GO - General Obligation
MBIA - Municipal Bond Investors Assurance
MFHR - Multi-Family Housing Revenue
PCR - Pollution Control Revenue
RADIAN - Radian Group, Inc.
SFMR - Single Family Mortgage Revenue
See notes to financial statements.
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 63
PENNSYLVANIA PORTFOLIO
PORTFOLIO OF INVESTMENTS
March 31, 2006 (unaudited)
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
MUNICIPAL BONDS & NOTES-98.9%
Long-Term Municipal Bonds-95.4%
Pennsylvania-77.4%
Allegheny Cnty Arpt Rev
MBIA Ser 97 AMT
5.75%, 1/01/10 $ 2,540 $ 2,685,542
Allegheny Cnty GO
FGIC Ser 05C-57
5.00%, 11/01/23 6,390 6,717,039
Allegheny Cnty Health Fac
(South Hills Health) Ser 00B
6.75%, 5/01/25 1,555 1,633,636
Allegheny Cnty Health Rev
(Residential Resources) Ser 01
6.60%, 9/01/31 1,540 1,606,436
Allegheny Cnty Higher Ed
(Thiel College) ACA Ser 99A
5.375%, 11/15/19-11/15/29 2,500 2,540,380
Allegheny Cnty PCR
(USX Corp.) Ser 98
5.50%, 12/01/29 2,680 2,775,462
Allegheny Cnty Redev Auth Rev
(Pittsburgh Mills Proj)
5.60%, 7/01/23 1,500 1,568,790
Allegheny Cnty San Auth Swr Rev
MBIA Ser 05A
5.00%, 12/01/24 7,490 7,834,016
Butler Cnty
FGIC Ser 03
5.25%, 7/15/26 1,625 1,759,534
Chester Upland Sch Dist
4.30%, 5/15/14 1,705 1,695,708
Crawford Cnty Health Fac
(Wesbury Methodist) Ser 99
6.25%, 8/15/29 1,600 1,620,544
Delaware Cnty Higher Ed
(Eastern College) Ser 99
5.625%, 10/01/28 2,500 2,523,975
Ephrata Area Sch Dist FGIC
5.00%, 3/01/22 1,000 1,052,810
Harrisburg Arpt Auth
(Susquehanna Arpt Proj) Ser 99 AMT
5.50%, 1/01/24 3,490 3,342,373
Lancaster Swr Auth Rev
MBIA Ser 04
5.00%, 4/01/22 1,330 1,392,377
64 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
Lehigh Northampton Airport Rev
MBIA Ser 00 AMT
6.00%, 5/15/30 $ 4,400 $ 4,689,124
Lycoming Cnty Higher Ed
(College of Technology) AMBAC Ser 02
5.25%, 5/01/32 2,250 2,344,792
McKean Cnty Hosp Auth Rev
(Bradford Hosp Proj) ACA
5.25%, 10/01/30 1,000 1,019,460
Montgomery Cnty Higher Ed
(Beaver College) RADIAN Ser 99
5.70%, 4/01/27 6,000 6,348,780
Montgomery Cnty Hosp Rev
(Abington Memorial Hosp) Ser 02A
5.125%, 6/01/32 3,000 3,067,380
Montgomery Cnty Indl Dev Auth Rev
(Whitemarsh Continuing Care)
6.00%, 2/01/21 415 437,481
Pennsylvania Eco Dev Auth
(30th St Station) ACA Ser 02 AMT
5.875%, 6/01/33 3,485 3,658,344
(Amtrak) Ser 01A AMT
6.375%, 11/01/41 5,000 5,329,500
Pennsylvania Higher Ed
(Dickinson College) RADIAN Ser 03AA-1
5.00%, 11/01/26 1,000 1,020,810
(UPMC Health Sys) Ser 01A
6.00%, 1/15/31 2,405 2,612,359
Pennsylvania Higher Edl Facs Auth Rev
(University Health Sys) AMBAC Ser 05A
5.00%, 8/15/20 2,000 2,108,420
Pennsylvania Hsg Fin Agy SFMR
(Mortgage Rev) Ser 02-74B AMT
5.25%, 4/01/32 3,165 3,185,984
Philadelphia Auth Indl Dev Revs
(Leadership Learning Partners) Ser 05A
5.25%, 7/01/24 350 337,145
Philadelphia Auth Indl Dev Lease Rev
FSA Ser 01B
5.25%, 10/01/30 8,000 8,320,640
Philadephia Gas Wks Rev
Ser 04A-1
5.25%, 9/01/19 1,015 1,081,635
Philadelphia Redev Auth Rev
(Neighborhood Transformation) FGIC Ser 05C
5.00%, 4/15/28 3,160 3,297,555
Philadelphia Sch Dist Lease Rev
FSA Ser 03
5.25%, 6/01/26(a) 5,000 5,299,100
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 65
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
Pittsburgh Pub Pkg Auth Pkg Rev
FGIC Ser 05A
5.00%, 12/01/19-12/01/25 $ 3,435 $ 3,582,419
FGIC Ser 05B
5.00%, 12/01/23 3,900 4,072,887
Pittsburgh Urban Redev Auth SFMR
(Mortgage Rev) FHA AMT
Ser 97A
6.25%, 10/01/28 790 811,369
Potter Cnty Hosp Rev
(Charles Cole Memorial) RADIAN Ser 96
6.05%, 8/01/24 4,340 4,444,551
Southcentral Gen Auth Rev
(Hanover Hosp, Inc.)
5.00%, 12/01/25 1,570 1,622,140
(Prerefunded Wellspan Health)
5.25%, 5/15/31 3,905 4,212,948
(Wellspan Health)
5.25%, 5/15/31 795 835,927
State Pub Sch Bldg Auth Sch Rev
(Colonial Northampton Inter Unit 20)
FGIC Ser 05
5.00%, 5/15/26 2,025 2,109,118
-------------
116,598,490
-------------
California-0.7%
California State GO
5.00%, 2/01/33 1,000 1,022,010
-------------
Colorado-0.4%
Northwest Met Dist No. 3 GO
6.125%, 12/01/25 500 523,785
-------------
Florida-5.2%
Collier Cnty Cmnty Dev Dist
(Fiddlers Creek) Ser 96
7.50%, 5/01/18 1,145 1,179,293
Collier Cnty Ind Dev Rev
(Southern States Utils) Ser 96 AMT
6.50%, 10/01/25 2,000 2,044,520
Crossings at Fleming Island Cmnty Dev Dist
(Eagle Harbor) Ser 00C
7.10%, 5/01/30 2,000 2,103,840
Double Branch Cmnty Dev Dist
(Oakleaf Village) Ser 02A
6.70%, 5/01/34 1,045 1,129,122
Hammock Bay Cmnty Dev Dist-Fla Spl Assmt Rev
Ser 04A
6.15%, 5/01/24 440 439,855
66 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
Northern Palm Beach Assessment Dist
(Unit Dev 27B) Ser 02
6.40%, 8/01/32 $ 960 $ 986,602
-------------
7,883,232
-------------
Guam-0.7%
Guam Govt Wtrwks Auth
(Water & Waste Sys Rev) Ser 05
6.00%, 7/01/25 500 533,430
Guam Intl Arpt Auth
MBIA Ser 03B
5.25%, 10/01/23 500 535,090
-------------
1,068,520
-------------
Illinois-1.6%
Antioch Village Spl Svc Area
(Deercrest Proj) Ser 03
6.625%, 3/01/33 1,000 1,041,460
Plano Spl Svc Area No. 3 Spl Tax
(Lakewood Springs Proj) Ser 05A
5.95%, 3/01/28 465 459,876
Yorkville Cmnty Fac Dist
(Raintree Village Proj) Ser 03
6.875%, 3/01/33 900 952,677
-------------
2,454,013
-------------
Puerto Rico-7.6%
Puerto Rico Comwlth Hwy & Trans Auth Rev
FGIC Ser 03G
5.25%, 7/01/14 3,335 3,598,899
FGIC Subordinate Ser 03
5.25%, 7/01/14 3,195 3,447,820
FSA Ser 02D
5.00%, 7/01/27 4,000 4,151,520
Puerto Rico Municipal Fin Agy GO
Ser 05A
5.25%, 8/01/23 300 315,324
-------------
11,513,563
-------------
Virgin Islands-1.8%
Virgin Islands Pub Fin Auth Rev
(Gross Rcpts Taxes) Ser 03 FSA
5.00%, 10/01/13-10/01/14 675 721,898
5.25%, 10/01/15-10/01/17 1,840 1,998,241
-------------
2,720,139
-------------
Total Long-Term Municipal Bonds
(cost $138,399,919) 143,783,752
-------------
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 67
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
Short-Term Municipal Note(b)-3.5%
Pennsylvania-3.5%
Pennsylvania Hsg Fin Agy SFMR
(Mortgage Rev) FSA Ser 03 AMT
3.69%, 6/01/08
(cost $5,200,000) $ 5,200 $ 5,200,000
-------------
Total Investments-98.9%
(cost $143,599,919) 148,983,752
Other assets less liabilities-1.1% 1,679,083
-------------
Net Assets-100% $ 150,662,835
=============
INTEREST RATE SWAP CONTRACTS (see Note D)
Rate Type
---------------------------
Payment Payment
Notional made received Unrealized
Swap Amount Termination by the by the Appreciation/
Counterparty (000) Date Portfolio Portfolio (Depreciation)
- ---------------------------------------------------------------------------------------------------
Citigroup, Inc. $ 1,600 6/22/07 BMA* 2.962% $ (12,442)
Goldman Sachs & Co. 800 7/05/06 BMA* 3.283% 529
Goldman Sachs & Co. 800 1/05/07 BMA* 3.405% 41
JPMorgan Chase & Co. 1,500 4/05/07 BMA* 2.988% (9,318)
Morgan Stanley 800 4/06/06 BMA* 3.081% 99
Morgan Stanley 800 10/06/06 BMA* 3.217% (380)
* Variable interest based on the BMA (Bond Market Association)
(a) Represents entire or partial position segregated as collateral for
interest rate swaps.
(b) Variable rate coupon, rate shown as of March 31, 2006.
Glossary of Terms:
ACA - American Capital Access
AMBAC - American Municipal Bond Assurance Corporation
AMT - Alternative Minimum Tax
FGIC - Financial Guaranty Insurance Company
FHA - Federal Housing Authority
FSA - Financial Security Assurance, Inc.
GO - General Obligation
MBIA - Municipal Bond Investors Assurance
PCR - Pollution Control Revenue
RADIAN - Radian Group, Inc.
SFMR - Single Family Mortgage Revenue
See notes to financial statements.
68 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
VIRGINIA PORTFOLIO
PORTFOLIO OF INVESTMENTS
March 31, 2006 (unaudited)
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
MUNICIPAL BONDS & NOTES-98.5%
Long-Term Municipal Bonds-95.6%
Virginia-82.7%
Albemarle Cnty Ed Fac
(The Convent Sch) Ser 01A
7.75%, 7/15/32 $ 4,260 $ 4,683,487
Alexandria MFHR
(Buckingham Village Apts) Ser 96A AMT
6.15%, 1/01/29 4,000 4,068,320
Arlington Cnty Hosp Rev
(Arlington Health Sys) Ser 01
5.25%, 7/01/31 5,900 6,359,787
Arlington Cnty Ind Dev Rev Swr Rev
(Ogden Martin) FSA Ser 98B AMT
5.25%, 1/01/09 2,295 2,383,679
Arlington Cnty MFHR
(Arlington View Terrace)
FNMA Ser 01 AMT
5.15%, 11/01/31 1,550 1,588,006
Bell Creek Cmnty Dev Dist
Ser 03A
6.75%, 3/01/22 700 717,577
Broad Street Cmnty Dev Dist
(Parking Fac) Ser 03
7.50%, 6/01/33 1,500 1,632,240
Celebrate North Cmnty Dev Dist
Ser 03B
6.60%, 3/01/25 1,250 1,309,800
Chesterfield Cnty
(Elec & Pwr Co) Ser 02
5.875%, 6/01/17 3,800 4,117,604
Dinwiddie Cnty Indl Dev Auth
(Lease Rev) MBIA Ser 04B
5.00%, 2/15/24 3,200 3,334,912
Dulles Town Cmnty Dev Auth
(Dulles Town Ctr Proj) Ser 98
6.25%, 3/01/26 2,050 2,104,694
Fairfax Water Auth Rev
Ser 02
5.00%, 4/01/32(a) 3,380 3,496,542
Greater Richmond Hotel Tax Rev
(Convention Ctr Proj) Ser 00
6.25%, 6/15/32 6,000 6,637,980
Hampton Convention Ctr Rev
AMBAC Ser 02
5.00%, 1/15/35(b) 5,150 5,307,745
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 69
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
Harrisonburg MFHR
(Battery Heights Assoc) GNMA Ser 96A
6.25%, 4/20/36 $ 5,185 $ 5,282,997
(Greens of Salem Run) FSA Ser 97 AMT
6.30%, 4/01/29 1,110 1,158,063
Henry Cnty Hosp Rev
(Memorial Hosp Martinsville & Henry)
Ser 97
6.00%, 1/01/27 1,250 1,283,775
James City Cnty Solid Waste Rev
(Anheuser Busch Proj) Ser 97 AMT
6.00%, 4/01/32 4,200 4,313,610
Metropolitan Washington Arpt Rev
Ser 97B AMT
5.50%, 10/01/23 9,410 9,742,267
Newport News Health Care Fac
(Mennowood) GNMA Ser 96A
6.25%, 8/01/36 2,590 2,676,713
Newport News MFHR
(Walker Village Proj) GNMA Ser 02A AMT
5.55%, 9/20/34 1,880 1,931,211
5.65%, 3/20/44 1,660 1,700,487
Norfolk Arpt Auth Rev
(Air Cargo) Ser 02 AMT
6.25%, 1/01/30 995 1,040,233
FGIC Ser 01B AMT
5.30%, 7/01/25 10,000 10,364,199
Northwestern Regl Jail Auth Facs Rev MBIA
5.00%, 7/01/25 1,500 1,568,775
Pocahontas Pkwy Assoc Toll Rd Rev
Ser 98B
Zero Coupon, 8/15/15 750 450,510
Portsmouth Util Rev
FGIC Ser 01B
5.00%, 6/01/26 1,500 1,520,700
Prince William MFHR
(Woodwind Gables)
AMBAC Ser 01A AMT
5.30%, 12/01/34 2,860 2,929,898
Richmond FSA
Ser 05A
5.00%, 7/15/22 2,500 2,646,300
Staunton Ed Fac
(Mary Baldwin College) Ser 96
6.75%, 11/01/21 3,645 3,782,890
Upper Occoquan Swr Auth Rev FSA
5.00%, 7/01/25 2,500 2,634,050
70 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
Virginia Beach MFHR
(Beth Sholom Terrace) GNMA Ser 02
5.40%, 4/01/44 $ 2,900 $ 3,024,091
Virginia Beach Wtr & Swr Rev
5.00%, 10/01/30 2,000 2,082,800
Virginia Biotechnology Auth
(Consolidated Laboratories Proj) Ser 01
5.00%, 9/01/21 4,170 4,352,229
Virginia College Bldg Auth Facs Rev
(Pub Higher Ed Financing Prog) Ser 05A
5.00%, 9/01/16-9/01/17 11,725 12,555,371
Virginia Hsg Dev Auth MFHR
(Rental Hsg)
Ser 99 AMT
5.95%, 2/01/23 5,525 5,701,248
Ser 02B AMT
5.50%, 4/01/27 5,000 5,122,450
Virginia Hsg Dev Auth SFMR
(Mortgage Rev) Ser 01D AMT
5.40%, 6/01/24 3,155 3,224,442
Virginia Port Auth Rev
(Newport News) Ser 02 AMT
5.00%, 7/01/27 1,000 1,030,560
5.125%, 7/01/24 4,000 4,162,480
-------------
144,024,722
-------------
California-0.6%
California State GO
5.25%, 4/01/29 1,000 1,050,540
-------------
Colorado-0.3%
Northwest Met Dist No. 3 GO
6.125%, 12/01/25 500 523,785
-------------
Florida-1.8%
Fleming Island Plantation Cmnty Dev Dist
Ser 00B
7.375%, 5/01/31 3,000 3,199,890
-------------
Georgia-0.3%
Atlanta Tax Allocation
(Eastside Project) Ser 05B
5.60%, 1/01/30 500 511,020
-------------
Illinois-0.9%
Plano Spl Svc Area No. 3 Spl Tax
(Lakewood Springs Proj) Ser 05A
5.95%, 3/01/28 465 459,876
Yorkville Cmnty Fac Dist
(Raintree Village Proj) Ser 03
6.875%, 3/01/33 1,000 1,058,530
-------------
1,518,406
-------------
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 71
Principal
Amount
(000) Value
- -------------------------------------------------------------------------------
New Jersey-3.0%
Garden State Preservation Trust
(Open Space & Farmland) Ser 05A
5.80%, 11/01/16 $ 4,600 $ 5,213,824
-------------
Puerto Rico-6.0%
Puerto Rico Comwlth Hwy & Trans Auth Rev
FGIC Ser 03G
5.25%, 7/01/14 3,600 3,884,868
Puerto Rico Elec Pwr Auth
XLCA Ser 02-1
5.25%, 7/01/22 1,100 1,176,230
Puerto Rico HFA
(Capital Fund Prg)
5.00%, 12/01/20 4,870 5,041,911
Puerto Rico Municipal Fin Agy GO
Ser 05A
5.25%, 8/01/23 340 357,367
-------------
10,460,376
-------------
Total Long-Term Municipal Bonds
(cost $160,406,202) 166,502,563
-------------
Short-Term Municipal Notes(c)-2.9%
Virginia-2.9%
Loudon Cnty Indl Dev Auth Rev
(Howard Hughes Med)
Ser 03A
3.17%, 2/15/38 1,300 1,300,000
Ser 03C
3.14%, 2/15/38 2,000 2,000,000
Richmond Indl Dev Auth
(Church Schs)
3.17%, 5/01/35 1,800 1,800,000
-------------
Total Short-Term Municipal Notes
(cost $5,100,000) 5,100,000
-------------
Total Investments-98.5%
(cost $165,506,202) 171,602,563
Other assets less liabilities-1.5% 2,618,724
-------------
Net Assets-100% $ 174,221,287
=============
FINANCIAL FUTURES CONTRACTS (see Note D)
Value at
Number of Expiration Original March 31, Unrealized
Type Contracts Position Month Value 2006 Depreciation
- -----------------------------------------------------------------------------------------------------
U.S. Treasury Note June
10 Yr Futures 26 Long 2006 $2,799,972 $2,766,156 $(33,816)
72 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
INTEREST RATE SWAP CONTRACTS (see Note D)
Rate Type
---------------------------
Payment Payment
Notional made received Unrealized
Swap Amount Termination by the by the Appreciation/
Counterparty (000) Date Portfolio Portfolio (Depreciation)
- ---------------------------------------------------------------------------------------------------
Citigroup, Inc. $ 1,600 6/22/07 BMA* 2.962% $ (12,442)
Goldman Sachs & Co. 800 7/05/06 BMA* 3.283% 529
Goldman Sachs & Co. 800 1/05/07 BMA* 3.405% 41
JPMorgan Chase & Co. 1,500 4/05/07 BMA* 2.988% (9,318)
Morgan Stanley 800 4/06/06 BMA* 3.081% 99
Morgan Stanley 800 10/06/06 BMA* 3.217% (380)
* Variable interest based on the BMA (Bond Market Association)
(a) Position, or position thereof, with an aggregate market value of $129,310
has been segregated to collateralize margin requirements for open futures
contracts.
(b) Represents entire or partial position segregated as collateral for
interest rate swaps.
(c) Variable rate coupon, rate shown as of March 31, 2006.
Glossary of Terms:
AMBAC - American Municipal Bond Assurance Corporation
AMT - Alternative Minimum Tax
FGIC - Financial Guaranty Insurance Company
FNMA - Federal National Mortgage Association
FSA - Financial Security Assurance, Inc.
GNMA - Government National Mortgage Association
GO - General Obligation
HFA - Housing Finance Agency/Authority
MBIA - Municipal Bond Investors Assurance
MFHR - Multi-Family Housing Revenue
SFMR - Single Family Mortgage Revenue
XLCA - XL Capital Assurance, Inc.
See notes to financial statements.
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 73
STATEMENT OF ASSETS & LIABILITIES
March 31, 2006 (unaudited)
Arizona Florida
============ ============
Assets
Investments in securities, at value (cost:
$199,201,241 and $210,832,835, respectively) $204,333,107 $218,759,611
Cash 781 -0-
Unrealized appreciation of interest rate swap
contracts 26,419 921
Interest receivable 2,656,943 4,305,280
Receivable for shares of beneficial interest
sold 1,412,584 578,117
Receivable for investment securities sold 1,000,000 30,000
Variation margin on futures contracts -0- 6,016
------------ ------------
Total assets 209,429,834 223,679,945
------------ ------------
Liabilities
Due to custodian -0- 264,490
Unrealized depreciation of interest rate swap
contracts 205,312 30,055
Payable for investment securities purchased 1,000,000 -0-
Payable for shares of beneficial interest
redeemed 306,240 555,969
Dividends payable 277,267 338,327
Distribution fee payable 109,252 115,021
Advisory fee payable 49,036 62,984
Transfer agent fee payable 6,853 2,927
Administrative fee payable 275 472
Accrued expenses and other liabilities 88,799 109,190
------------ ------------
Total liabilities 2,043,034 1,479,435
------------ ------------
Net Assets $207,386,800 $222,200,510
============ ============
Composition of Net Assets
Shares of beneficial interest, at par $ 189,584 $ 217,927
Additional paid-in capital 203,119,197 222,817,995
Distributions in excess of net investment
income (223,443) (268,560)
Accumulated net realized loss on investment
transactions (651,511) (8,364,346)
Net unrealized appreciation of investments 4,952,973 7,797,494
------------ ------------
$207,386,800 $222,200,510
============ ============
Net Asset Value Per Share--unlimited shares authorized, $.01 par value
Shares Net Asset
Arizona Portfolio Net Assets Outstanding Value
- -------------------------------------------------------------------------------
Class A $122,781,484 11,216,999 $10.95*
Class B $58,453,758 5,348,450 $10.93
Class C $26,151,558 2,392,980 $10.93
Florida Portfolio
- -------------------------------------------------------------------------------
Class A $137,324,998 13,471,122 $10.19*
Class B $44,996,535 4,412,052 $10.20
Class C $39,878,977 3,909,532 $10.20
* The maximum offering price per share for Class A shares of Arizona Portfolio
and Florida Portfolio were $11.44 and $10.64, respectively, which reflects a
sales charge of 4.25%.
See notes to financial statements.
74 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Massachusetts Michigan
============ ============
Assets
Investments in securities, at value (cost:
$133,628,505 and $138,870,223, respectively) $139,127,474 $143,178,175
Cash 8,463 -0-
Unrealized appreciation of interest rate swap
contracts 585 586
Interest receivable 1,979,195 2,625,480
Receivable for shares of beneficial interest
sold 369,364 111,936
Variation margin on futures contracts 2,422 -0-
------------ ------------
Total assets 141,487,503 145,916,177
------------ ------------
Liabilities
Due to custodian -0- 243,431
Unrealized depreciation of interest rate swap
contracts 74,581 19,295
Payable for shares of beneficial interest
redeemed 340,255 321,261
Dividends payable 189,182 177,018
Distribution fee payable 91,694 91,394
Advisory fee payable 30,819 59,437
Transfer agent fee payable 6,610 9,808
Administrative fee payable 270 -0-
Accrued expenses and other liabilities 87,741 85,613
------------ ------------
Total liabilities 821,152 1,007,257
------------ ------------
Net Assets $140,666,351 $144,908,920
============ ============
Composition of Net Assets
Shares of beneficial interest, at par $ 130,016 $ 134,484
Additional paid-in capital 144,722,072 139,942,310
Distributions in excess of net investment
income (148,928) (162,312)
Accumulated net realized gain (loss) on
investment transactions (9,421,463) 705,195
Net unrealized appreciation of investments 5,384,654 4,289,243
------------ ------------
$140,666,351 $144,908,920
============ ============
Net Asset Value Per Share--unlimited shares authorized, $.01 par value
Shares Net Asset
Massachusetts Portfolio Net Assets Outstanding Value
- -------------------------------------------------------------------------------
Class A $56,295,768 5,197,558 $10.83*
Class B $45,837,683 4,240,072 $10.81
Class C $38,532,900 3,563,952 $10.81
Michigan Portfolio
- -------------------------------------------------------------------------------
Class A $64,104,625 5,943,688 $10.79*
Class B $37,838,759 3,514,683 $10.77
Class C $42,965,536 3,990,043 $10.77
* The maximum offering price per share for Class A shares of Massachusetts
Portfolio and Michigan Portfolio were $11.31 and $11.27, respectively, which
reflects a sales charge of 4.25%.
See notes to financial statements.
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 75
Minnesota New Jersey
============ ============
Assets
Investments in securities, at value (cost:
$93,820,277 and $155,868,198, respectively) $ 97,370,634 $163,768,894
Cash 20,376 -0-
Unrealized appreciation of interest rate swap
contracts 418 753
Interest receivable 1,491,798 2,530,913
Receivable for shares of beneficial interest
sold 184,549 1,037,689
------------ ------------
Total assets 99,067,775 167,338,249
------------ ------------
Liabilities
Due to cusodian -0- 40,581
Unrealized depreciation of interest rate swap
contracts 72,092 24,986
Dividends payable 140,394 227,777
Payable for shares of beneficial interest
redeemed 122,294 1,116,071
Distribution fee payable 44,546 100,673
Advisory fee payable 31,589 48,802
Transfer agent fee payable 5,758 10,820
Administrative fee payable -0- 265
Accrued expenses and other liabilities 102,507 143,777
------------ ------------
Total liabilities 519,180 1,713,752
------------ ------------
Net Assets $ 98,548,595 $165,624,497
============ ============
Composition of Net Assets
Shares of beneficial interest, at par $ 97,548 $ 168,824
Additional paid-in capital 96,792,179 171,396,675
Distributions in excess of net investment
income (117,809) (206,036)
Accumulated net realized loss on investment
transactions (1,702,006) (13,611,429)
Net unrealized appreciation of investments 3,478,683 7,876,463
------------ ------------
$ 98,548,595 $165,624,497
============ ============
Net Asset Value Per Share--unlimited shares authorized, $.01 par value
Shares Net Asset
Minnesota Portfolio Net Assets Outstanding Value
- -------------------------------------------------------------------------------
Class A $70,595,282 6,988,696 $10.10*
Class B $11,593,049 1,147,928 $10.10
Class C $16,360,264 1,618,201 $10.11
New Jersey Portfolio
- -------------------------------------------------------------------------------
Class A $79,976,468 8,154,112 $9.81*
Class B $50,023,081 5,098,284 $9.81
Class C $35,624,948 3,629,973 $9.81
* The maximum offering price per share for Class A shares of Minnesota
Portfolio and New Jersey Portfolio were $10.55 and $10.25, respectively, which
reflects a sales charge of 4.25%.
See notes to financial statements.
76 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Ohio Pennsylvania
============ ============
Assets
Investments in securities, at value (cost:
$178,045,282 and $143,599,919 respectively) $183,781,979 $148,983,752
Cash 175,088 -0-
Unrealized appreciation of interest rate swap
contracts 753 669
Interest receivable 3,036,497 2,698,667
Receivable for shares of beneficial interest
sold 624,924 458,647
Receivable for investment securities sold 580,000 5,000
------------ ------------
Total assets 188,199,241 152,146,735
------------ ------------
Liabilities
Due to custodian -0- 80,341
Unrealized depreciation of interest rate swap
contracts 215,457 22,140
Payable for investment securities purchased 4,722,525 -0-
Payable for shares of beneficial interest
redeemed 805,335 922,614
Dividends payable 240,099 196,734
Distribution fee payable 109,849 86,983
Advisory fee payable 53,834 53,317
Transfer agent fee payable 10,131 10,609
Administrative fee payable 448 495
Accrued expenses and other liabilities 104,133 110,667
------------ ------------
Total liabilities 6,261,811 1,483,900
------------ ------------
Net Assets $181,937,430 $150,662,835
============ ============
Composition of Net Assets
Shares of beneficial interest, at par $ 181,346 $ 144,361
Additional paid-in capital 183,127,485 147,505,688
Distributions in excess of net investment
income (177,041) (168,763)
Accumulated net realized loss on investment
transactions (6,716,353) (2,180,813)
Net unrealized appreciation of investments 5,521,993 5,362,362
------------ ------------
$181,937,430 $150,662,835
============ ============
Net Asset Value Per Share--unlimited shares authorized, $.01 par value
Shares Net Asset
Ohio Portfolio Net Assets Outstanding Value
- -------------------------------------------------------------------------------
Class A $88,908,790 8,859,158 $10.04
Class B $47,909,989 4,777,747 $10.03
Class C $45,118,651 4,497,710 $10.03
Pennsylvania Portfolio
- -------------------------------------------------------------------------------
Class A $79,221,142 7,591,319 $10.44
Class B $37,289,091 3,572,478 $10.44
Class C $34,152,602 3,272,274 $10.44
* The maximum offering price per share for Class A shares of Ohio Portfolio
and Pennsylvania Portfolio were $10.49 and $10.90, respectively, which reflects
a sales charge of 4.25%.
See notes to financial statements.
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 77
Virginia
============
Assets
Investment in securities, at value (cost $165,506,202) $171,602,563
Cash 80,438
Unrealized appreciation of interest rate swap contracts 669
Interest receivable 2,637,221
Receivable for shares of beneficial interest sold 1,430,643
Variation margin on futures contracts 2,031
------------
Total assets 175,753,565
------------
Liabilities
Unrealized depreciation of interest rate swap contracts 22,140
Payable for shares of beneficial interest redeemed 1,044,838
Dividends payable 252,034
Distribution fee payable 93,900
Advisory fee payable 35,631
Transfer agent fee payable 7,012
Accrued expenses and other liabilities 76,723
------------
Total liabilities 1,532,278
------------
Net Assets $174,221,287
============
Composition of Net Assets
Shares of beneficial interest, at par $ 162,173
Additional paid-in capital 170,905,882
Undistributed net investment income 102,062
Accumulated net realized loss on investment transactions (2,989,904)
Net unrealized appreciation of investments 6,041,074
------------
$174,221,287
============
Net Asset Value Per Share--unlimited shares authorized, $.01 par value
Shares Net Asset
Virginia Portfolio Net Assets Outstanding Value
- -------------------------------------------------------------------------------
Class A $101,226,247 9,414,517 $10.75*
Class B $ 41,471,449 3,863,605 $10.73
Class C $ 31,523,591 2,939,224 $10.73
* The maximum offering price per share for Class A shares of Virginia
Portfolio were $11.23 which reflects a sales charge of 4.25%.
See notes to financial statements.
78 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
STATEMENT OF OPERATIONS
Six Months Ended March 31, 2006 (unaudited)
Arizona Florida
============ ============
Investment Income
Interest $ 5,013,603 $ 5,939,013
------------ ------------
Expenses
Advisory fee 457,117 506,567
Distribution fee--Class A 173,637 203,067
Distribution fee--Class B 307,850 247,673
Distribution fee--Class C 129,178 201,141
Transfer agency--Class A 22,921 18,238
Transfer agency--Class B 15,010 8,937
Transfer agency--Class C 5,495 5,801
Custodian 68,685 67,151
Administrative 38,000 38,000
Audit 18,898 19,129
Legal 15,094 13,976
Printing 12,561 8,460
Registration 6,719 8,258
Trustees' fees 1,500 1,600
Miscellaneous 8,191 7,184
------------ ------------
Total expenses 1,280,856 1,355,182
Less: expenses waived and reimbursed
by the Adviser (see Note B) (181,512) (162,119)
Less: expense offset arrangement
(see Note B) (1,088) (844)
------------ ------------
Net expenses 1,098,256 1,192,219
------------ ------------
Net investment income 3,915,347 4,746,794
------------ ------------
Realized and Unrealized Gain (Loss)
on Investment Transactions
Net realized gain (loss) on:
Investment transactions 355,304 677,502
Futures contracts 183,815 (122,341)
Swap contracts (68,829) (14,542)
Net change in unrealized
appreciation/depreciation of:
Investments (2,342,445) (2,298,638)
Futures contracts (55,152) (100,148)
Swap contracts (179,448) (41,117)
------------ ------------
Net loss on investment transactions (2,106,755) (1,899,284)
------------ ------------
Net Increase in Net Assets from
Operations $ 1,808,592 $ 2,847,510
============ ============
See notes to financial statements.
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 79
Massachusetts Michigan
============ ============
Investment Income
Interest $ 3,534,264 $ 3,591,743
------------ ------------
Expenses
Advisory fee 314,448 325,282
Distribution fee--Class A 81,956 91,486
Distribution fee--Class B 241,195 201,429
Distribution fee--Class C 184,393 216,468
Transfer agency--Class A 13,652 16,960
Transfer agency--Class B 14,002 12,889
Transfer agency--Class C 9,595 12,806
Custodian 63,452 68,453
Administrative 38,000 38,000
Audit 18,462 20,719
Legal 13,406 12,108
Printing 11,553 13,115
Registration 9,607 8,435
Trustees' fees 1,600 1,700
Miscellaneous 7,220 2,805
------------ ------------
Total expenses 1,022,541 1,042,655
Less: expenses waived and reimbursed
by the Adviser (see Note B) (150,655) (38,000)
Less: expense offset arrangement
(see Note B) (980) (1,120)
------------ ------------
Net expenses 870,906 1,003,535
------------ ------------
Net investment income 2,663,358 2,588,208
------------ ------------
Realized and Unrealized Gain (Loss)
on Investment Transactions
Net realized gain (loss) on:
Investment transactions 642,076 732,932
Futures contracts (9,184) -0-
Swap contracts 7,509 16,093
Net change in unrealized
appreciation/depreciation of:
Investments (2,145,834) (1,881,836)
Futures contracts (40,319) -0-
Swap contracts (71,309) (20,665)
------------ ------------
Net loss on investment transactions (1,617,061) (1,153,476)
------------ ------------
Net Increase in Net Assets from
Operations $ 1,046,297 $ 1,434,732
============ ============
See notes to financial statements.
80 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Minnesota New Jersey
============ ============
Investment Income
Interest $ 2,538,610 $ 4,389,322
------------ ------------
Expenses
Advisory fee 226,163 382,669
Distribution fee--Class A 105,867 118,566
Distribution fee--Class B 65,427 276,658
Distribution fee--Class C 84,267 178,497
Transfer agency--Class A 20,318 27,754
Transfer agency--Class B 4,328 21,339
Transfer agency--Class C 5,034 12,886
Custodian 60,714 86,950
Administrative 38,000 38,000
Audit 15,022 16,246
Legal 13,441 11,473
Printing 6,533 16,724
Registration 4,441 5,749
Trustees' fees 1,500 1,400
Miscellaneous 5,887 8,315
------------ ------------
Total expenses 656,942 1,203,226
Less: expenses waived and reimbursed by
the Adviser (see Note B) (99,252) (143,699)
Less: expense offset arrangement
(see Note B) (579) (1,092)
------------ ------------
Net expenses 557,111 1,058,435
------------ ------------
Net investment income 1,981,499 3,330,887
------------ ------------
Realized and Unrealized Gain (Loss)
on Investment Transactions
Net realized gain (loss) on:
Investment transactions 172,085 957,460
Futures contracts -0- 324,770
Swap contracts 10,200 (130,182)
Net change in unrealized
appreciation/depreciation of:
Investments (999,048) (2,487,011)
Futures contracts -0- (118,986)
Swap contracts (71,754) (26,448)
------------ ------------
Net loss on investment transactions (888,517) (1,480,397)
------------ ------------
Net Increase in Net Assets from
Operations $ 1,092,982 $ 1,850,490
============ ============
See notes to financial statements.
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 81
Ohio Pennsylvania
============ ============
Investment Income
Interest $ 4,639,222 $ 3,854,370
------------ ------------
Expenses
Advisory fee 419,573 347,407
Distribution fee--Class A 131,057 119,402
Distribution fee--Class B 262,151 199,494
Distribution fee--Class C 233,376 174,521
Transfer agency--Class A 25,048 25,178
Transfer agency--Class B 16,934 13,759
Transfer agency--Class C 13,822 11,411
Custodian 69,506 57,200
Administrative 38,000 38,000
Printing 19,293 11,958
Audit 18,065 13,601
Legal 14,761 12,869
Registration 5,850 12,142
Trustees' fees 2,100 1,600
Miscellaneous 7,773 7,188
------------ ------------
Total expenses 1,277,309 1,045,730
Less: expenses waived and reimbursed by
the Adviser (see Note B) (136,587) (49,528)
Less: expense offset arrangement
(see Note B) (1,327) (971)
------------ ------------
Net expenses 1,139,395 995,231
------------ ------------
Net investment income 3,499,827 2,859,139
------------ ------------
Realized and Unrealized Gain (Loss)
on Investment Transactions
Net realized gain on:
Investment transactions 562,904 247,935
Futures contracts 40,917 -0-
Swap contracts 7,234 7,202
Net change in unrealized
appreciation/depreciation of:
Investments (2,170,323) (1,569,014)
Futures contracts (33,607) -0-
Swap contracts (230,029) (32,959)
------------ ------------
Net loss on investment transactions (1,822,904) (1,346,836)
------------ ------------
Net Increase in Net Assets from
Operations $ 1,676,923 $ 1,512,303
============ ============
See notes to financial statements.
82 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Virginia
============
Investment Income
Interest $ 4,341,623
------------
Expenses
Advisory fee 384,499
Distribution fee--Class A 143,560
Distribution fee--Class B 223,064
Distribution fee--Class C 152,842
Transfer agency--Class A 22,341
Transfer agency--Class B 11,550
Transfer agency--Class C 7,387
Custodian 61,512
Administrative 38,000
Audit 17,800
Printing 14,247
Legal 13,298
Registration 5,701
Trustees' fees 1,400
Miscellaneous 7,281
------------
Total expenses 1,104,482
Less: expenses waived and reimbursed by the Adviser
(see Note B) (225,351)
Less: expense offset arrangement (see Note B) (799)
------------
Net expenses 878,332
------------
Net investment income 3,463,291
------------
Realized and Unrealized Gain (Loss) on Investment
Transactions
Net realized gain (loss) on:
Investment transactions (51,012)
Futures contracts (63,705)
Swap contracts 9,475
Net change in unrealized appreciation/depreciation of:
Investments (868,454)
Futures contracts (17,816)
Swap contracts (27,223)
------------
Net loss on investment transactions (1,018,735)
------------
Net Increase in Net Assets from Operations $ 2,444,556
============
See notes to financial statements.
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 83
STATEMENT OF CHANGES IN NET ASSETS
Arizona
===============================
Six Months
Ended Year Ended
March 31, 2006 September 30,
(unaudited) 2005
============== ==============
Increase (Decrease) in Net Assets
from Operations
Net investment income $ 3,915,347 $ 7,437,553
Net realized gain on investment
transactions 470,290 1,717,335
Net change in unrealized
appreciation/depreciation of
investments (2,577,045) 26,873
-------------- --------------
Net increase in net assets from
operations 1,808,592 9,181,761
Dividends to Shareholders from
Net investment income
Class A (2,411,343) (4,128,486)
Class B (1,070,880) (2,535,386)
Class C (449,069) (783,563)
Transactions in Shares of
Beneficial Interest
Net increase 9,624,929 12,193,038
-------------- --------------
Total increase 7,502,229 13,927,364
Net Assets
Beginning of period 199,884,571 185,957,207
-------------- --------------
End of period (including distributions in
excess of net investment income of
$(223,443) and $(207,498),
respectively) $ 207,386,800 $ 199,884,571
============== ==============
See notes to financial statements.
84 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Florida
===============================
Six Months
Ended Year Ended
March 31, 2006 September 30,
(unaudited) 2005
============== ==============
Increase (Decrease) in Net Assets
from Operations
Net investment income $ 4,746,794 $ 9,204,863
Net realized gain on investment
transactions 540,619 1,516,604
Net change in unrealized
appreciation/depreciation of
investments (2,439,903) (889,013)
-------------- --------------
Net increase in net assets from
operations 2,847,510 9,832,454
Dividends to Shareholders from
Net investment income
Class A (3,052,572) (4,995,087)
Class B (943,165) (2,662,613)
Class C (764,966) (1,551,635)
Transactions in Shares of
Beneficial Interest
Net increase 2,626,570 898,587
-------------- --------------
Total increase 713,377 1,521,706
Net Assets
Beginning of period 221,487,133 219,965,427
-------------- --------------
End of period (including distributions in
excess of net investment income of
$(268,560) and $(254,651)
respectively) $ 222,200,510 $ 221,487,133
============== ==============
See notes to financial statements.
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 85
Massachusetts
===============================
Six Months
Ended Year Ended
March 31, 2006 September 30,
(unaudited) 2005
============== ==============
Increase (Decrease) in Net Assets
from Operations
Net investment income $ 2,663,358 $ 5,243,913
Net realized gain on investment
transactions 640,401 1,186,775
Net change in unrealized
appreciation/depreciation of
investments (2,257,462) (756,714)
-------------- --------------
Net increase in net assets from
operations 1,046,297 5,673,974
Dividends to Shareholders from
Net investment income
Class A (1,156,091) (1,900,538)
Class B (856,708) (2,117,577)
Class C (654,197) (1,271,360)
Transactions in Shares of
Beneficial Interest
Net increase (decrease) 4,259,729 (1,134,517)
-------------- --------------
Total increase (decrease) 2,639,030 (750,018)
Net Assets
Beginning of period 138,027,321 138,777,339
-------------- --------------
End of period (including distributions in
excess of net investment income of
$(148,928) and $(145,290),
respectively) $ 140,666,351 $ 138,027,321
============== ==============
See notes to financial statements.
86 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Michigan
===============================
Six Months
Ended Year Ended
March 31, 2006 September 30,
(unaudited) 2005
============== ==============
Increase (Decrease) in Net Assets
from Operations
Net investment income $ 2,588,208 $ 5,165,876
Net realized gain on investment
transactions 749,025 1,502,788
Net change in unrealized
appreciation/depreciation of
investments (1,902,501) (287,093)
-------------- --------------
Net increase in net assets from
operations 1,434,732 6,381,571
Dividends to Shareholders from
Net investment income
Class A (1,218,652) (2,048,050)
Class B (665,048) (1,583,188)
Class C (717,086) (1,567,468)
Net realized gain on investments
Class A (57,135) -0-
Class B (37,261) -0-
Class C (39,589) -0-
Transactions in Shares of
Beneficial Interest
Net increase 6,832,766 1,844,200
-------------- --------------
Total increase 5,532,727 3,027,065
Net Assets
Beginning of period 139,376,193 136,349,128
-------------- --------------
End of period (including distributions in
excess of net investment income of
$(162,312) and $(149,734),
respectively) $ 144,908,920 $ 139,376,193
============== ==============
See notes to financial statements.
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 87
Minnesota
===============================
Six Months
Ended Year Ended
March 31, 2006 September 30,
(unaudited) 2005
============== ==============
Increase (Decrease) in Net Assets
from Operations
Net investment income $ 1,981,499 $ 3,874,918
Net realized gain on investment
transactions 182,285 252,581
Net change in unrealized
appreciation/depreciation of
investments (1,070,802) 254,911
-------------- --------------
Net increase in net assets from
operations 1,092,982 4,382,410
Dividends to Shareholders from
Net investment income
Class A (1,471,567) (2,767,647)
Class B (226,728) (544,815)
Class C (291,695) (564,193)
Transactions in Shares of
Beneficial Interest
Net increase (decrease) (1,305,747) 2,020,229
-------------- --------------
Total increase (decrease) (2,202,755) 2,525,984
Net Assets
Beginning of period 100,751,350 98,225,366
-------------- --------------
End of period (including distributions in
excess of net investment income of
$(117,809) and $(109,318),
respectively) $ 98,548,595 $ 100,751,350
============== ==============
See notes to financial statements.
88 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
New Jersey
===============================
Six Months
Ended Year Ended
March 31, 2006 September 30,
(unaudited) 2005
============== ==============
Increase (Decrease) in Net Assets
from Operations
Net investment income $ 3,330,887 $ 7,154,352
Net realized gain on investment
transactions 1,152,048 1,135,308
Net change in unrealized
appreciation/depreciation of
investments (2,632,445) 216,483
-------------- --------------
Net increase in net assets from
operations 1,850,490 8,506,143
Dividends to Shareholders from
Net investment income
Class A (1,706,079) (3,280,121)
Class B (999,610) (2,637,795)
Class C (646,038) (1,323,005)
Transactions in Shares of
Beneficial Interest
Net decrease (4,429,359) (27,635,191)
-------------- --------------
Total decrease (5,930,596) (26,369,969)
Net Assets
Beginning of period 171,555,093 197,925,062
-------------- --------------
End of period (including distributions in
excess of net investment income of
$(206,036) and $(185,196),
respectively) $ 165,624,497 $ 171,555,093
============== ==============
See notes to financial statements.
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 89
Ohio
===============================
Six Months
Ended Year Ended
March 31, 2006 September 30,
(unaudited) 2005
============== ==============
Increase (Decrease) in Net Assets
from Operations
Net investment income $ 3,499,827 $ 7,368,221
Net realized gain on investment
transactions 611,055 575,008
Net change in unrealized
appreciation/depreciation of
investments (2,433,959) 201,731
-------------- --------------
Net increase in net assets from
operations 1,676,923 8,144,960
Dividends to Shareholders from
Net investment income
Class A (1,807,552) (3,437,306)
Class B (901,916) (2,219,109)
Class C (802,930) (1,669,222)
Transactions in Shares of
Beneficial Interest
Net decrease (4,696,767) (8,887,469)
-------------- --------------
Total decrease (6,532,242) (8,068,146)
Net Assets
Beginning of period 188,469,672 196,537,818
-------------- --------------
End of period (including distributions in
excess of net investment income of
$(177,041) and $(164,470),
respectively) $ 181,937,430 $ 188,469,672
============== ==============
See notes to financial statements.
90 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Pennsylvania
===============================
Six Months
Ended Year Ended
March 31, 2006 September 30,
(unaudited) 2005
============== ==============
Increase (Decrease) in Net Assets
from Operations
Net investment income $ 2,859,139 $ 6,128,191
Net realized gain on investment
transactions 255,137 2,167,675
Net change in unrealized
appreciation/depreciation of
investments (1,601,973) (1,445,750)
-------------- --------------
Net increase in net assets from
operations 1,512,303 6,850,116
Dividends to Shareholders from
Net investment income
Class A (1,616,605) (3,168,680)
Class B (668,570) (1,703,571)
Class C (585,499) (1,220,485)
Transactions in Shares of
Beneficial Interest
Net decrease (2,915,352) (11,672,434)
-------------- --------------
Total decrease (4,273,723) (10,915,054)
Net Assets
Beginning of period 154,936,558 165,851,612
-------------- --------------
End of period (including distributions in
excess of net investment income of
$(168,763) and $(157,228),
respectively) $ 150,662,835 $ 154,936,558
============== ==============
See notes to financial statements.
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 91
Virginia
===============================
Six Months
Ended Year Ended
March 31, 2006 September 30,
(unaudited) 2005
============== ==============
Increase (Decrease) in Net Assets
from Operations
Net investment income $ 3,463,291 $ 6,676,372
Net realized gain (loss) on investment
transactions (105,242) 1,112,181
Net change in unrealized
appreciation/depreciation of
investments (913,493) (400,972)
-------------- --------------
Net increase in net assets from
operations 2,444,556 7,387,581
Dividends to Shareholders from
Net investment income
Class A (2,093,427) (3,470,089)
Class B (821,610) (2,174,673)
Class C (561,496) (1,075,706)
Transactions in Shares of
Beneficial Interest
Net increase 10,747,711 5,117,842
-------------- --------------
Total increase 9,715,734 5,784,955
Net Assets
Beginning of period 164,505,553 158,720,598
-------------- --------------
End of period (including undistributed net
investment income of $102,062 and
$115,304, respectively) $ 174,221,287 $ 164,505,553
============== ==============
See notes to financial statements.
92 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
NOTES TO FINANCIAL STATEMENTS
March 31, 2006 (unaudited)
NOTE A
Significant Accounting Policies
AllianceBernstein Municipal Income Fund II (the "Fund"), which is a
Massachusetts Business Trust, is registered under the Investment Company Act of
1940, as an open-end management investment company. The Arizona Portfolio,
Florida Portfolio, Massachusetts Portfolio, Michigan Portfolio, Minnesota
Portfolio and New Jersey Portfolio are each diversified Portfolios. Each of the
other Portfolios is non-diversified. The Fund operates as a series company
currently comprised of nine portfolios: Arizona Portfolio, Florida Portfolio,
Massachusetts Portfolio, Michigan Portfolio, Minnesota Portfolio, New Jersey
Portfolio, Ohio Portfolio, Pennsylvania Portfolio and Virginia Portfolio (the
"Portfolios"). Each series is considered to be a separate entity for financial
reporting and tax purposes. Each portfolio offers Class A, Class B and Class C
shares. Class A shares are sold with a front-end sales charge of up to 4.25%
for purchases not exceeding $1,000,000. With respect to purchases of $1,000,000
or more, Class A shares redeemed within one year of purchase may be subject to
a contingent deferred sales charge of 1%. Class B shares are currently sold
with a contingent deferred sales charge which declines from 3% to zero
depending on the period of time the shares are held. Class B shares will
automatically convert to Class A shares six years after the end of the calendar
month of purchase. Class C shares are subject to a contingent deferred sales
charge of 1% on redemptions made within the first year after purchase. All
three classes of shares have identical voting, dividend, liquidation and other
rights and the same terms and conditions, except that each class bears
different distribution expenses and has exclusive voting rights with respect to
its distribution plan. The financial statements have been prepared in
conformity with U.S. generally accepted accounting principles, which require
management to make certain estimates and assumptions that affect the reported
amounts of assets and liabilities in the financial statements and amounts of
income and expenses during the reporting period. Actual results could differ
from those estimates. Additional information about some of the items discussed
in these Notes to Financial Statements is contained in the Fund's Statement of
Additional Information, which is available upon request. The following is a
summary of the significant accounting policies followed by the Fund.
1. Security Valuation
Portfolio securities are valued at their current market value determined on the
basis of market quotations or, if market quotations are not readily available
or are deemed unreliable, at "fair value" as determined in accordance with
procedures established by and under the general supervision of the Fund's Board
of Directors.
In general, the market value of securities which are readily available and
deemed reliable are determined as follows. Securities listed on a national
securities exchange or on a foreign securities exchange are valued at the last
sale price at the close of the exchange or foreign securities exchange. If
there has been no sale on
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 93
such day, the securities are valued at the mean of the closing bid and asked
prices on such day. Securities listed on more than one exchange are valued by
reference to the principal exchange on which the securities are traded;
securities not listed on an exchange but traded on The NASDAQ Stock Market,
Inc. ("NASDAQ") are valued in accordance with the NASDAQ Official Closing
Price; listed put or call options are valued at the last sale price. If there
has been no sale on that day, such securities will be valued at the closing bid
prices on that day; open futures contracts and options thereon are valued using
the closing settlement price or, in 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, AllianceBernstein, L.P. (prior to February
24, 2006 known as Alliance Capital Management, L.P.) (the "Adviser") may
establish procedures whereby changes in market yields or spreads are used to
adjust, on a daily basis, a recently obtained quoted price on a security; and
OTC and other derivatives are valued on the basis of a quoted bid price or
spread from a major broker/dealer in such security.
Securities for which market quotations are not readily available (including
restricted securities) or are deemed unreliable are valued at fair value.
Factors considered in making this determination may include, but are not
limited to, information obtained by contacting the issuer, analysts, analysis
of the issuer's financial statements or other available documents. In addition,
the Fund may use fair value pricing for securities primarily traded in non-U.S.
markets because, most foreign markets close well before the Fund values its
securities at 4:00 p.m., Eastern Time. The earlier close of these foreign
markets gives rise to the possibility that significant events, including broad
market moves, may have occurred in the interim and may materially affect the
value of those securities.
2. Taxes
It is the policy of each Portfolio to meet the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute all
of its investment company taxable income and net realized gains to its
shareholders. Therefore, no provisions for federal income or excise taxes are
required. The Fund may be subject to taxes imposed by countries in which it
invests. Such taxes are generally based on income and/or capital gains earned
or repatriated.
94 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Taxes accrued and applied to net investment income, net realized gains and net
unrealized appreciation/depreciation as such income and/or gains are earned.
3. Investment Income and Investment Transactions
Interest income is accrued daily. Investment transactions are accounted for on
the date securities are purchased or sold. Investment gains and losses are
determined on the identified cost basis. As described more fully in the
prospectus for the Portfolios, each Portfolio may buy and sell securities from
other affiliated funds in accordance with the requirements of Rule 17a-7 of the
Investment Company Act of 1940. Each Portfolio has adopted procedures to ensure
that all such transactions are done in accordance with the requirements of Rule
17a-7. The Portfolios amortize premium and accrete original issue discount and
market discount as adjustments to interest income.
The Portfolios follow an investment policy of investing primarily in municipal
obligations of one state. Economic changes affecting the state and certain of
its public bodies and municipalities may affect the ability of issuers within
the state to pay interest on, or repay principal of, municipal obligations held
by the Portfolios.
4. Income and Expenses
All income earned and expenses incurred by the Portfolios are borne on a
pro-rata basis by each settled class of shares, based on the proportionate
interest in the Portfolios represented by the net assets of such class, except
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.
5. Dividends and Distributions
Dividends and distributions to shareholders are recorded on the ex-dividend
date. Income and capital gains distributions are determined in accordance with
federal tax regulations and may differ from those determined in accordance with
U.S. generally accepted accounting principles. To the extent these differences
are permanent, such amounts are reclassified within the capital accounts based
on their federal tax basis treatment; temporary differences do not require such
reclassification.
NOTE B
Advisory Fee and Other Transactions with Affiliates
Under the terms of the investment advisory agreement, the Fund pays the Adviser
an advisory fee at an annual rate of .45% of the first $2.5 billion, .40% of
the next $2.5 billion and .35% in excess of $5 billion, of the average daily
net assets of each Portfolio. Prior to September 7, 2004, the Fund paid the
Adviser an advisory fee at an annual rate of .625% of each Portfolio's average
daily net assets. Such fees are accrued daily and paid monthly.
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 95
The Adviser has voluntarily agreed to waive its fees and bear certain expenses
to the extent necessary to limit the total portfolio operating expenses on an
annual basis as follows:
Portfolios Class A Class B Class C
- -----------------------------------------------------------------------------
Arizona 0.78% 1.48% 1.48%
Florida 0.78% 1.48% 1.48%
Massachusetts 0.82% 1.52% 1.52%
Michigan 1.01% 1.71% 1.71%
Minnesota 0.90% 1.60% 1.60%
New Jersey 0.87% 1.57% 1.57%
Ohio 0.85% 1.55% 1.55%
Pennsylvania 0.95% 1.65% 1.65%
Virginia 0.72% 1.42% 1.42%
For the six months ended March 31, 2006, the Adviser has voluntarily agreed to
waive a portion of its advisory fees. The aggregate amounts of such fee waivers
were as follows: Arizona Portfolio, $181,512; Florida Portfolio, $162,119;
Massachusetts Portfolio, $150,655; Michigan Portfolio, $0; Minnesota Portfolio,
$61,252; New Jersey Portfolio, $143,699; Ohio Portfolio, $136,587; Pennsylvania
Portfolio, $49,528; and Virginia Portfolio, $187,351.
Pursuant to the advisory agreement, the Arizona, Florida, Massachusetts, New
Jersey, Ohio and Pennsylvania Portfolios each paid $38,000 to the Adviser
representing the cost of certain legal and accounting services provided to
these Portfolios by the Adviser for the six months ended March 31, 2006.
Additionally, the Adviser voluntarily agreed to waive all such fees for the
Michigan, Minnesota and Virginia Portfolios in the aggregate amount of $38,000
for each of these Portfolios.
Each Portfolio compensates AllianceBernstein Investor Services, Inc. (prior to
February 24, 2006 known as Alliance Global Investor Services, Inc.) ("ABIS"), a
wholly-owned subsidiary of the Adviser, under a Transfer Agency Agreement, for
providing personnel and facilities to perform transfer agency services for each
Portfolio. ABIS may make payments to intermediaries that provide omnibus
account services, sub-accounting services and/or networking services. For the
six months ended March 31, 2006, such compensation retained by ABIS amounted
to: Arizona Portfolio, $19.429; Florida Portfolio, $17,457; Massachusetts
Portfolio, $17,967; Michigan Portfolio, $24,554; Minnesota Portfolio, $14,671;
New Jersey Portfolio, $28,631; Ohio Portfolio, $25,087; Pennsylvania Portfolio,
$25,814; and Virginia Portfolio, $18,449.
For the six months ended March 31, 2006, each Portfolio's expenses were reduced
under an expense offset arrangement with ABIS, as follows: Arizona Portfolio,
by $1,088; Florida Portfolio, by $844; Massachusetts Portfolio, by $980;
Michigan Portfolio, by $1,120; Minnesota Portfolio, by $579; New Jersey
96 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Portfolio, by $1,092; Ohio Portfolio, by $1,327; Pennsylvania Portfolio, by
$971; and Virginia Portfolio, by $799.
AllianceBernstein Investments, Inc. (prior to February 24, 2006 known as
AllianceBernstein Investment Research and Management, Inc.), (the
"Distributor"), a wholly-owned subsidiary of the Adviser, serves as the
distributor of the Fund's shares. The Distributor has advised the Fund that it
has retained front-end sales charges from sales of Class A shares and received
contingent deferred sales charges imposed upon redemptions by shareholders of
Class A, Class B and Class C shares for each Portfolio for the six months ended
March 31, 2006 as follows:
Front End Contingent Deferred Sales Charges
Sales Charges -------------------------------------------
Portfolio Class A Class A Class B Class C
- -------------------------------------------------------------------------------
Arizona $ 23,281 $ 2 $ 8,846 $ 4,588
Florida 12,369 9 14,555 2,485
Massachusetts 6,531 -0- 8,124 189
Michigan 6,611 -0- 10,108 5,931
Minnesota 4,291 -0- 3,790 416
New Jersey 5,439 -0- 7,541 612
Ohio 8,491 -0- 16,056 2,264
Pennsylvania 5,446 -0- 3,321 355
Virginia 11,821 345 7,633 459
NOTE C
Distribution Services Agreement
Each Portfolio has adopted a Distribution Services Agreement (the "Agreement")
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the
Agreement, each Portfolio pays distribution and servicing fees to the
Distributor at an annual rate of up to .30% of each Portfolio's average daily
net assets attributable to Class A shares and 1% of each Portfolio's average
daily net assets attributable to both Class B and Class C shares. Such fees are
accrued daily and paid monthly. The Agreement provides that the Distributor
will use such payments in their entirety for distribution assistance and
promotional activities. The Distributor has incurred expenses in excess of the
distribution costs reimbursed by each Portfolio as follows:
Portfolio Class B Class C
- -------------------------------------------------------------------------------
Arizona $4,119,804 $1,215,961
Florida 4,280,604 2,686,474
Massachusetts 3,875,519 2,752,752
Michigan 3,468,955 3,309,024
Minnesota 2,749,157 2,145,279
New Jersey 5,664,355 2,791,704
Ohio 4,795,618 2,951,539
Pennsylvania 3,860,543 2,645,186
Virginia 4,011,320 1,969,246
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 97
Such costs may be recovered from each Portfolio in future periods so long as
the Agreement is in effect. In accordance with the Agreement, there is no
provision for recovery of unreimbursed distribution costs incurred by the
Distributor beyond the current fiscal year for Class A shares. The Agreement
also provides that the Adviser may use its own resources to finance the
distribution of each Portfolio's shares.
NOTE D
Investment Transactions
Purchases and sales of investment securities (excluding short-term investments
and U.S. government securities) for the six months ended March 31, 2006 were as
follows:
Portfolio Purchases Sales
- -------------------------------------------------------------------------------
Arizona $ 26,683,490 $ 23,673,518
Florida 29,375,654 12,517,980
Massachusetts 18,543,344 23,463,771
Michigan 17,879,532 14,163,310
Minnesota 7,191,631 8,385,530
New Jersey 1,025,975 13,061,176
Ohio 5,536,943 16,270,502
Pennsylvania 19,635,959 22,723,212
Virginia 47,709,394 40,272,837
There were no purchases or sales of U.S. government and government agency
obligations during the period.
At March 31, 2006, the cost of investments for federal income tax purposes,
gross unrealized appreciation, gross unrealized depreciation and net unrealized
appreciation/depreciation of investments for each Portfolio were as follows
(excluding futures and swap contracts):
Gross Gross
Unrealized Unrealized Net Unrealized
Portfolio Tax Cost Appreciation Depreciation Appreciation
- -------------------------------------------------------------------------------
Arizona $199,201,241 $5,953,484 $821,618 $5,131,866
Florida 210,832,835 8,302,631 375,855 7,926,776
Massachusetts 133,628,505 5,975,223 476,254 5,498,969
Michigan 138,870,223 4,819,709 511,757 4,307,952
Minnesota 93,820,277 3,671,712 121,355 3,550,357
New Jersey 155,868,198 8,029,181 128,485 7,900,696
Ohio 178,045,282 6,060,784 324,087 5,736,697
Pennsylvania 143,599,919 5,920,466 536,633 5,383,833
Virginia 165,506,202 6,543,022 446,661 6,096,361
1. Swap Agreements
The Portfolios may enter into swaps to hedge its exposure to interest rates and
credit risk or for investment purposes. A swap is an agreement that obligates
two parties to exchange a series of cash flows at specified intervals based
upon or calculated by reference to changes in specified prices or rates for a
specified amount
98 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
of an underlying asset. The payment flows are usually netted against each
other, with the difference being paid by one party to the other.
Risks may arise as a result of the failure of the counterparty to the swap
contract to comply with the terms of the swap contract. The loss incurred by
the failure of a counterparty is generally limited to the net interest payment
to be received by the Portfolios, and/or the termination value at the end of
the contract. Therefore, the Portfolios consider the creditworthiness of each
counterparty to a swap contract in evaluating potential credit risk.
Additionally, risks may arise from unanticipated movements in interest rates or
in the value of the underlying securities.
As of October 1, 2003, the Portfolios have adopted the method of accounting for
interim payments on swap contracts in accordance with Financial Accounting
Standards Board Statement No. 133. The Portfolios accrue for the interim
payments on swap contracts on a daily basis, with the net amount recorded
within unrealized appreciation/depreciation of swap contracts on the statement
of assets and liabilities. Once the interim payments are settled in cash, the
net amount is recorded as realized gain/loss on swaps, in addition to realized
gain/loss recorded upon the termination of swaps contracts on the statements of
operations. Prior to October 1, 2003, these interim payments were reflected
within interest income/expense in the statement of operations. Fluctuations in
the value of swap contracts are recorded as a component of net change in
unrealized appreciation/depreciation of investments.
The Portfolios may enter into credit default swaps. The Portfolios may purchase
credit protection on the referenced obligation of the credit default swap ("Buy
Contract") or provide credit protection on the referenced obligation of the
credit default swap ("Sale Contract"). A sale/(buy) in a credit default swap
provides upon the occurrence of a credit event, as defined in the swap
agreement, for the Portfolio to buy/(sell) from/(to) the counterparty at the
notional amount (the "Notional Amount") and receive/(deliver) the principal
amount of the referenced obligation. If a credit event occurs, the maximum
payout amount for a Sale Contract is limited to the Notional Amount of the swap
contract ("Maximum Payout Amount"). During the term of the swap agreement, the
Portfolio receives/(pays) semi-annual fixed payments from/(to) the respective
counterparty, calculated at the agreed upon interest rate applied to the
Notional Amount. These interim payments are recorded within unrealized
appreciation/depreciation of swap contracts on the statement of assets and
liabilities.
Credit default swaps may involve greater risks than if a Portfolio had invested
in the referenced obligation directly. Credit default swaps are subject to
general market risk, liquidity risk, counterparty risk and credit risk. If the
Portfolio is a buyer and no credit event occurs, it will lose its investment.
In addition, if the Portfolio is a seller and a credit event occurs, the value
of the referenced obliga-
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 99
tion received by the Portfolio coupled with the periodic payments previously
received, may be less than the Maximum Payout Amount it pays to the buyer,
resulting in a loss to the Portfolio.
2. Financial Futures Contracts
The Portfolios may buy or sell financial futures contracts for the purpose of
hedging its portfolio against adverse affects of anticipated movements in the
market. The Portfolios bear the market risk that arises from changes in the
value of these financial instruments and the imperfect correlation between
movements in the price of the futures contracts and movements in the price of
securities hedged or used to cover.
At the time the Portfolios enter into a futures contract, the Portfolios
deposit and maintain as collateral an initial margin as required by the
exchange on which the transaction is effected. Pursuant to the contract, the
Portfolios agree to receive from or pay to the broker an amount of cash equal
to the daily fluctuation in the value of the contract. Such receipts or
payments are known as variation margin and are recorded by the Portfolios as
unrealized gains or losses. Risk may arise from the potential inability of a
counterparty to meet the terms of a contract. When the contract is closed, the
Portfolios record a realized gain or loss equal to the difference between the
value of the contract at the time it was opened and the time it was closed.
NOTE E
Shares of Beneficial Interest
Transactions in shares of beneficial interest for each Portfolio were as
follows:
Shares Amount
--------------------------- ------------------------------
Six Months Six Months
Ended Year Ended Ended Year Ended
March 31, 2006 September 30, March 31, 2006 September 30,
Arizona Portfolio (unaudited) 2005 (unaudited) 2005
- ----------------- ------------ ------------ -------------- --------------
Class A
Shares sold 1,853,765 3,113,599 $ 20,415,467 $ 34,510,747
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 135,275 265,134 1,491,240 2,937,022
- -------------------------------------------------------------------------------
Shares converted
from Class B 143,848 581,305 1,581,782 6,441,636
- -------------------------------------------------------------------------------
Shares redeemed (1,015,892) (1,959,807) (11,182,570) (21,672,509)
- -------------------------------------------------------------------------------
Net increase 1,116,996 2,000,231 $ 12,305,919 $ 22,216,896
===============================================================================
100 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Shares Amount
--------------------------- ------------------------------
Six Months Six Months
Ended Year Ended Ended Year Ended
March 31, 2006 September 30, March 31, 2006 September 30,
Arizona Portfolio (unaudited) 2005 (unaudited) 2005
- ----------------- ------------ ------------ -------------- --------------
Class B
Shares sold 124,084 347,941 $ 1,364,565 $ 3,851,908
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 64,538 174,462 710,304 1,929,149
- -------------------------------------------------------------------------------
Shares converted
to Class A (144,081) (582,252) (1,581,782) (6,441,636)
- -------------------------------------------------------------------------------
Shares redeemed (424,205) (1,248,248) (4,665,533) (13,807,130)
- -------------------------------------------------------------------------------
Net decrease (379,664) (1,308,097) $ (4,172,446) $(14,467,709)
===============================================================================
Class C
Shares sold 268,542 753,354 $ 2,952,142 $ 8,347,411
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 29,291 50,413 322,288 557,696
- -------------------------------------------------------------------------------
Shares redeemed (162,186) (403,172) (1,782,974) (4,461,256)
- -------------------------------------------------------------------------------
Net increase 135,647 400,595 $ 1,491,456 $ 4,443,851
===============================================================================
Shares Amount
--------------------------- ------------------------------
Six Months Six Months
Ended Year Ended Ended Year Ended
March 31, 2006 September 30, March 31, 2006 September 30,
Florida Portfolio (unaudited) 2005 (unaudited) 2005
- ----------------- ------------ ------------ -------------- --------------
Class A
Shares sold 1,917,012 3,054,191 $ 19,648,204 $ 31,538,480
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 173,112 277,465 1,776,654 2,860,377
- -------------------------------------------------------------------------------
Shares converted
from Class B 293,779 1,201,167 3,008,326 12,402,455
- -------------------------------------------------------------------------------
Shares redeemed (1,316,047) (2,036,995) (13,512,878) (20,972,424)
- -------------------------------------------------------------------------------
Net increase 1,067,856 2,495,828 $ 10,920,306 $ 25,828,888
===============================================================================
Class B
Shares sold 133,607 395,639 $ 1,370,510 $ 4,081,616
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 59,646 171,181 612,243 1,764,739
- -------------------------------------------------------------------------------
Shares converted
to Class A (293,664) (1,200,412) (3,008,326) (12,402,455)
- -------------------------------------------------------------------------------
Shares redeemed (736,158) (1,846,855) (7,545,993) (19,026,418)
- -------------------------------------------------------------------------------
Net decrease (836,569) (2,480,447) $ (8,571,566) $(25,582,518)
===============================================================================
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 101
Shares Amount
--------------------------- ------------------------------
Six Months Six Months
Ended Year Ended Ended Year Ended
March 31, 2006 September 30, March 31, 2006 September 30,
Florida Portfolio (unaudited) 2005 (unaudited) 2005
- ----------------- ------------ ------------ -------------- --------------
Class C
Shares sold 345,456 558,919 $ 3,543,428 $ 5,767,085
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 47,674 96,268 489,422 992,651
- -------------------------------------------------------------------------------
Shares redeemed (366,314) (592,144) (3,755,020) (6,107,519)
- -------------------------------------------------------------------------------
Net increase 26,816 63,043 $ 277,830 $ 652,217
===============================================================================
Shares Amount
--------------------------- ------------------------------
Six Months Six Months
Ended Year Ended Ended Year Ended
Massachusetts March 31, 2006 September 30, March 31, 2006 September 30,
Portfolio (unaudited) 2005 (unaudited) 2005
- -------------- ------------ ------------ -------------- --------------
Class A
Shares sold 653,877 1,113,609 $ 7,125,844 $ 12,245,067
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 72,512 123,249 790,894 1,354,163
- -------------------------------------------------------------------------------
Shares converted
from Class B 87,749 537,902 954,252 5,914,420
- -------------------------------------------------------------------------------
Shares redeemed (456,636) (573,238) (4,973,847) (6,289,262)
- -------------------------------------------------------------------------------
Net increase 357,502 1,201,522 $ 3,897,143 $ 13,224,388
===============================================================================
Class B
Shares sold 124,482 285,376 $ 1,353,413 $ 3,124,965
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 60,206 148,378 655,410 1,626,839
- -------------------------------------------------------------------------------
Shares converted
to Class A (87,911) (538,867) (954,252) (5,914,420)
- -------------------------------------------------------------------------------
Shares redeemed (446,835) (1,120,985) (4,860,283) (12,282,946)
- -------------------------------------------------------------------------------
Net decrease (350,058) (1,226,098) $ (3,805,712) $(13,445,562)
===============================================================================
Class C
Shares sold 519,608 403,369 $ 5,649,460 $ 4,423,251
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 44,916 87,872 489,021 963,499
- -------------------------------------------------------------------------------
Shares redeemed (181,081) (574,758) (1,970,183) (6,300,093)
- -------------------------------------------------------------------------------
Net increase
(decrease) 383,443 (83,517) $ 4,168,298 $ (913,343)
===============================================================================
102 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Shares Amount
--------------------------- ------------------------------
Six Months Six Months
Ended Year Ended Ended Year Ended
Michigan March 31, 2006 September 30, March 31, 2006 September 30,
Portfolio (unaudited) 2005 (unaudited) 2005
- ----------- ------------ ------------ -------------- --------------
Class A
Shares sold 1,189,430 1,427,432 $ 12,873,806 $ 15,559,730
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 92,070 142,408 997,994 1,551,292
- -------------------------------------------------------------------------------
Shares converted
from Class B 49,099 130,504 531,784 1,419,836
- -------------------------------------------------------------------------------
Shares redeemed (406,424) (885,446) (4,394,309) (9,645,744)
- -------------------------------------------------------------------------------
Net increase 924,175 814,898 $ 10,009,275 $ 8,885,114
===============================================================================
Class B
Shares sold 100,728 264,822 $ 1,087,784 $ 2,879,800
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 50,315 113,996 544,282 1,239,254
- -------------------------------------------------------------------------------
Shares converted
to Class A (49,190) (130,719) (531,784) (1,419,836)
- -------------------------------------------------------------------------------
Shares redeemed (408,343) (845,977) (4,415,890) (9,199,199)
- -------------------------------------------------------------------------------
Net decrease (306,490) (597,878) $ (3,315,608) $ (6,499,981)
===============================================================================
Class C
Shares sold 251,049 654,424 $ 2,713,571 $ 7,118,899
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 56,368 120,364 610,143 1,308,696
- -------------------------------------------------------------------------------
Shares redeemed (294,889) (824,478) (3,184,615) (8,968,528)
- -------------------------------------------------------------------------------
Net increase
(decrease) 12,528 (49,690) $ 139,099 $ (540,933)
===============================================================================
Shares Amount
--------------------------- ------------------------------
Six Months Six Months
Ended Year Ended Ended Year Ended
Minnesota March 31, 2006 September 30, March 31, 2006 September 30,
Portfolio (unaudited) 2005 (unaudited) 2005
- ----------- ------------ ------------ -------------- --------------
Class A
Shares sold 525,585 1,005,853 $ 5,334,469 $ 10,290,189
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 73,531 143,633 747,369 1,468,164
- -------------------------------------------------------------------------------
Shares converted
from Class B 53,407 95,260 542,213 972,353
- -------------------------------------------------------------------------------
Shares redeemed (450,529) (853,580) (4,574,151) (8,730,657)
- -------------------------------------------------------------------------------
Net increase 201,994 391,166 $ 2,049,900 $ 4,000,049
===============================================================================
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 103
Shares Amount
--------------------------- ------------------------------
Six Months Six Months
Ended Year Ended Ended Year Ended
Minnesota March 31, 2006 September 30, March 31, 2006 September 30,
Portfolio (unaudited) 2005 (unaudited) 2005
- ----------- ------------ ------------ -------------- --------------
Class B
Shares sold 5,964 59,851 $ 55,366 $ 610,556
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 14,562 37,033 147,934 378,375
- -------------------------------------------------------------------------------
Shares converted
to Class A (53,421) (95,282) (542,213) (972,353)
- -------------------------------------------------------------------------------
Shares redeemed (234,636) (260,907) (2,376,150) (2,665,925)
- -------------------------------------------------------------------------------
Net decrease (267,531) (259,305) $ (2,715,063) $ (2,649,347)
===============================================================================
Class C
Shares sold 145,211 247,982 $ 1,475,340 $ 2,537,909
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 16,826 40,700 171,245 416,410
- -------------------------------------------------------------------------------
Shares redeemed (225,238) (223,533) (2,287,169) (2,284,792)
- -------------------------------------------------------------------------------
Net increase
(decrease) (63,201) 65,149 $ (640,584) $ 669,527
===============================================================================
Shares Amount
--------------------------- ------------------------------
Six Months Six Months
Ended Year Ended Ended Year Ended
New Jersey March 31, 2006 September 30, March 31, 2006 September 30,
Portfolio (unaudited) 2005 (unaudited) 2005
- ----------- ------------ ------------ -------------- --------------
Class A
Shares sold 640,313 698,884 $ 6,307,308 $ 6,934,437
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 108,935 212,447 1,074,555 2,109,626
- -------------------------------------------------------------------------------
Shares converted
from Class B 243,331 852,780 2,394,605 8,474,476
- -------------------------------------------------------------------------------
Shares redeemed (677,323) (1,668,847) (6,676,040) (16,555,950)
- -------------------------------------------------------------------------------
Net increase 315,256 95,264 $ 3,100,428 $ 962,589
===============================================================================
Class B
Shares sold 121,040 363,143 $ 1,194,406 $ 3,606,473
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 80,391 208,665 793,192 2,071,969
- -------------------------------------------------------------------------------
Shares converted
to Class A (243,295) (852,370) (2,394,605) (8,474,476)
- -------------------------------------------------------------------------------
Shares redeemed (789,956) (2,309,239) (7,783,620) (22,929,685)
- -------------------------------------------------------------------------------
Net decrease (831,820) (2,589,801) $ (8,190,627) $(25,725,719)
===============================================================================
104 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Shares Amount
--------------------------- ------------------------------
Six Months Six Months
Ended Year Ended Ended Year Ended
New Jersey March 31, 2006 September 30, March 31, 2006 September 30,
Portfolio (unaudited) 2005 (unaudited) 2005
- ----------- ------------ ------------ -------------- --------------
Class C
Shares sold 239,861 303,012 $ 2,364,448 $ 3,014,021
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 46,097 99,506 455,082 988,708
- -------------------------------------------------------------------------------
Shares redeemed (218,777) (692,695) (2,158,690) (6,874,790)
- -------------------------------------------------------------------------------
Net increase
(decrease) 67,181 (290,177) $ 660,840 $ (2,872,061)
===============================================================================
Shares Amount
--------------------------- ------------------------------
Six Months Six Months
Ended Year Ended Ended Year Ended
March 31, 2006 September 30, March 31, 2006 September 30,
Ohio Portfolio (unaudited) 2005 (unaudited) 2005
- -------------- ------------ ------------ -------------- --------------
Class A
Shares sold 809,579 1,499,480 $ 8,177,073 $ 15,258,582
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 132,346 261,022 1,336,762 2,657,680
- -------------------------------------------------------------------------------
Shares converted
from Class B 220,045 511,564 2,217,767 5,209,768
- -------------------------------------------------------------------------------
Shares redeemed (763,438) (1,555,717) (7,701,869) (15,860,873)
- -------------------------------------------------------------------------------
Net increase 398,532 716,349 $ 4,029,733 $ 7,265,157
===============================================================================
Class B
Shares sold 110,813 338,582 $ 1,115,919 $ 3,441,546
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 66,864 176,471 674,728 1,794,778
- -------------------------------------------------------------------------------
Shares converted
to Class A (220,179) (511,963) (2,217,767) (5,209,768)
- -------------------------------------------------------------------------------
Shares redeemed (621,605) (1,512,207) (6,266,184) (15,387,457)
- -------------------------------------------------------------------------------
Net decrease (664,107) (1,509,117) $ (6,693,304) $(15,360,901)
===============================================================================
Class C
Shares sold 190,422 679,901 $ 1,921,021 $ 6,922,394
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 57,154 120,262 577,016 1,223,960
- -------------------------------------------------------------------------------
Shares redeemed (449,497) (880,040) (4,531,233) (8,938,079)
- -------------------------------------------------------------------------------
Net decrease (201,921) (79,877) $ (2,033,196) $ (791,725)
===============================================================================
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 105
Shares Amount
--------------------------- ------------------------------
Six Months Six Months
Ended Year Ended Ended Year Ended
Pennsylvania March 31, 2006 September 30, March 31, 2006 September 30,
Portfolio (unaudited) 2005 (unaudited) 2005
- -------------- ------------ ------------ -------------- --------------
Class A
Shares sold 454,627 720,496 $ 4,771,562 $ 7,598,951
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 116,068 225,234 1,218,225 2,377,548
- -------------------------------------------------------------------------------
Shares converted
from Class B 169,472 567,538 1,774,429 5,992,252
- -------------------------------------------------------------------------------
Shares redeemed (602,154) (1,133,334) (6,306,660) (11,941,959)
- -------------------------------------------------------------------------------
Net increase 138,013 379,934 $ 1,457,556 $ 4,026,792
===============================================================================
Class B
Shares sold 74,720 220,882 $ 783,430 $ 2,332,381
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 51,641 129,930 542,077 1,371,107
- -------------------------------------------------------------------------------
Shares converted
to Class A (169,390) (567,461) (1,774,429) (5,992,252)
- -------------------------------------------------------------------------------
Shares redeemed (350,230) (1,117,373) (3,675,231) (11,785,503)
- -------------------------------------------------------------------------------
Net decrease (393,259) (1,334,022) $ (4,124,153) $(14,074,267)
===============================================================================
Class C
Shares sold 199,790 295,817 $ 2,094,571 $ 3,115,893
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 39,298 83,409 412,464 880,384
- -------------------------------------------------------------------------------
Shares redeemed (262,771) (533,727) (2,755,790) (5,621,236)
- -------------------------------------------------------------------------------
Net decrease (23,683) (154,501) $ (248,755) $ (1,624,959)
===============================================================================
Shares Amount
--------------------------- ------------------------------
Six Months Six Months
Ended Year Ended Ended Year Ended
Virginia March 31, 2006 September 30, March 31, 2006 September 30,
Portfolio (unaudited) 2005 (unaudited) 2005
- -------------- ------------ ------------ -------------- --------------
Class A
Shares sold 1,460,480 1,852,144 $ 15,781,793 $ 20,080,730
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 137,724 225,838 1,490,024 2,448,903
- -------------------------------------------------------------------------------
Shares converted
from Class B 223,073 1,040,313 2,405,001 11,278,931
- -------------------------------------------------------------------------------
Shares redeemed (598,527) (878,123) (6,468,791) (9,519,221)
- -------------------------------------------------------------------------------
Net increase 1,222,750 2,240,172 $ 13,208,027 $ 24,289,343
===============================================================================
106 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Shares Amount
--------------------------- ------------------------------
Six Months Six Months
Ended Year Ended Ended Year Ended
Virginia March 31, 2006 September 30, March 31, 2006 September 30,
Portfolio (unaudited) 2005 (unaudited) 2005
- -------------- ------------ ------------ -------------- --------------
Class B
Shares sold 101,358 246,812 $ 1,093,419 $ 2,669,914
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 62,132 165,916 670,938 1,794,786
- -------------------------------------------------------------------------------
Shares converted
to Class A (223,457) (1,042,236) (2,405,001) (11,278,931)
- -------------------------------------------------------------------------------
Shares redeemed (381,728) (1,203,697) (4,116,816) (13,017,637)
- -------------------------------------------------------------------------------
Net decrease (441,695) (1,833,205) $ (4,757,460) $(19,831,868)
===============================================================================
Class C
Shares sold 370,753 520,792 $ 4,000,101 $ 5,635,955
- -------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 44,630 85,500 481,637 924,567
- -------------------------------------------------------------------------------
Shares redeemed (202,297) (547,340) (2,184,594) (5,900,155)
- -------------------------------------------------------------------------------
Net increase 213,086 58,952 $ 2,297,144 $ 660,367
===============================================================================
NOTE F
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 March 31, 2006.
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 107
NOTE G
Distributions To Shareholders
The tax character of distributions to be paid for the year ending September 30,
2006 will be determined at the end of the current fiscal year. The tax
character of distributions paid during the fiscal years ended September 30,
2005 and September 30, 2004 were as follows:
Arizona Portfolio 2005 2004
============ ============
Distributions paid from:
Tax-exempt income $ 7,400,654 $ 8,726,911
Ordinary income 46,781 1,347
------------ ------------
Total distributions paid $ 7,447,435 $ 8,728,258
============ ============
As of September 30, 2005, the components of accumulated earnings/(deficit) on a
tax basis were as follows:
Accumulated capital and other losses $ (1,048,274)(a)
Unrealized appreciation/(depreciation) 7,451,451(b)
------------
Total accumulated earnings/(deficit) $ 6,403,177(c)
============
(a) On September 30, 2005, the Portfolio had a net capital loss carryforward
for federal income tax purposes of $1,048,274 of which $577,141 expires in the
year 2008, $383,250 expires in the year 2010 and $87,883 expires in the year
2011. To the extent future capital gains are offset by capital loss
carryforwards, such gains will not be distributed. During the fiscal year ended
September 30, 2005, the Portfolio utilized capital loss carryforwards of
$1,731,528.
(b) The differences between book-basis and tax-basis unrealized
appreciation/(depreciation) are attributable primarily to the tax deferral of
losses on wash sales, the realization for tax purposes gains/losses on certain
derivative instruments and the difference between the book and tax treatment of
swap income.
(c) The difference between book-basis and tax-basis components of accumulated
earnings/(deficit) is attributable to dividends payable.
108 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Florida Portfolio 2005 2004
============ ============
Distributions paid from:
Tax-exempt income $ 9,106,816 $ 10,571,299
Ordinary income 102,519 59,862
------------ ------------
Total distributions paid $ 9,209,335 $ 10,631,161
============ ============
As of September 30, 2005, the components of accumulated earnings/(deficit) on a
tax basis were as follows:
Accumulated capital and other losses $ (8,759,470)(a)
Unrealized appreciation/(depreciation) 10,084,729(b)
------------
Total accumulated earnings/(deficit) $ 1,325,259(c)
============
(a) On September 30, 2005, the Portfolio had a net capital loss carryforward
for federal income tax purposes of $8,759,470 of which $5,279,565 expires in
the year 2008, $3,475,986 expires in the year 2009 and $3,919 expires in the
year 2010. To the extent future capital gains are offset by capital loss
carryforwards, such gains will not be distributed. During the fiscal year ended
September 30, 2005, the Portfolio utilized capital loss carryforwards of
$1,388,484.
(b) The differences between book-basis and tax-basis unrealized
appreciation/(depreciation) are attributable primarily to the tax deferral of
losses on wash sales and the difference between the book and tax treatment of
swap income.
(c) The difference between book-basis and tax-basis components of accumulated
earnings/(deficit) is attributable to dividends payable.
Massachusetts Portfolio 2005 2004
============ ============
Distributions paid from:
Tax-exempt income $ 5,160,022 $ 6,350,688
Ordinary income 129,453 19,660
------------ ------------
Total distributions paid $ 5,289,475 $ 6,370,348
============ ============
As of September 30, 2005, the components of accumulated earnings/(deficit) on a
tax basis were as follows:
Accumulated capital and other losses $ (9,987,612)(a)
Unrealized appreciation/(depreciation) 7,564,071(b)
------------
Total accumulated earnings/(deficit) $ (2,423,541)(c)
============
(a) On September 30, 2005, the Portfolio had a net capital loss carryforward
for federal income tax purposes of $9,987,612 of which $6,209,284 expires in
the year 2008, $1,585,051 expires in the year 2009 and $2,193,277 expires in
the year 2011. To the extent future capital gains are offset by capital loss
carryforwards, such gains will not be distributed. During the fiscal year ended
September 30, 2005, the Portfolio utilized capital loss carryforwards of
$990,309.
(b) The differences between book-basis and tax-basis unrealized
appreciation/(depreciation) are attributable primarily to the tax deferral of
losses on wash sales and the difference between the book and tax treatment of
swap income.
(c) The difference between book-basis and tax-basis components of accumulated
earnings/(deficit) is attributable to dividends payable.
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 109
Michigan Portfolio 2005 2004
============ ============
Distributions paid from:
Tax-exempt income $ 5,052,285 $ 6,024,571
Ordinary income 46,347 40,269
Long term capital gains 100,074 -0-
------------ ------------
Total distributions paid $ 5,198,706 $ 6,064,840
============ ============
As of September 30, 2005, the components of accumulated earnings/(deficit) on a
tax basis were as follows:
Long term capital gains $ 116,322
Unrealized appreciation/(depreciation) 6,160,210(a)
------------
Total accumulated earnings/(deficit) $ 6,276,532(b)
============
(a) The differences between book-basis and tax-basis unrealized
appreciation/(depreciation) are attributable primarily to the tax deferral of
losses on wash sales and the difference between the book and tax treatment of
swap income.
(b) The difference between book-basis and tax-basis components of accumulated
earnings/(deficit) is attributable to dividends payable.
During the fiscal year ended September 30, 2005, the Portfolio utilized capital
loss carryforwards of $668,763.
Minnesota Portfolio 2005 2004
============ ============
Distributions paid from:
Tax-exempt income $ 3,772,527 $ 4,361,565
Ordinary income 104,128 7,082
------------ ------------
Total distributions paid $ 3,876,655 $ 4,368,647
============ ============
As of September 30, 2005, the components of accumulated earnings/(deficit) on a
tax basis were as follows:
Accumulated capital and other losses $ (1,857,813)(a)
Unrealized appreciation/(depreciation) 4,520,472(b)
------------
Total accumulated earnings/(deficit) $ 2,662,659(c)
============
(a) On September 30, 2005, the Portfolio had a net capital loss carryforward
for federal income tax purposes of $1,857,813 of which $1,051,696 expires in
the year 2008, $160,146 expires in the year 2009, $46,432 expires in the year
2010, $179,795 expires in the year 2011, $142,635 expires in the year 2012 and
$277,109 expires in the year 2013. To the extent future capital gains are
offset by capital loss carryforwards, 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, and the difference between the book and tax treatment of
swap income.
(c) The difference between book-basis and tax-basis components of accumulated
earnings/(deficit) is attributable to dividends payable.
110 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
New Jersey Portfolio 2005 2004
============ ============
Distributions paid from:
Tax-exempt income $ 6,957,994 $ 8,996,884
Ordinary income 282,927 1,128
------------ ------------
Total distributions paid $ 7,240,921 $ 8,998,012
============ ============
As of September 30, 2005, the components of accumulated earnings/(deficit) on a
tax basis were as follows:
Accumulated capital and other losses $(14,542,787)(a)
Unrealized appreciation/(depreciation) 10,283,186(b)
------------
Total accumulated earnings/(deficit) $ (4,259,601)(c)
============
(a) On September 30, 2005, the Portfolio had a net capital loss carryforward
for federal income tax purposes of $14,542,787 of which $2,794,762 expires in
the year 2008, $1,077,263 expires in the year 2009, $4,688,584 expires in the
year 2010, $5,617,272 expires in the year 2011 and $364,906 expires in the year
2012. To the extent future capital gains are offset by capital loss
carryforwards, such gains will not be distributed. During the fiscal year ended
September 30, 2005, the Portfolio utilized capital loss carryforwards of
$532,533.
(b) The differences between book-basis and tax-basis unrealized
appreciation/(depreciation) are attributable primarily to the tax deferral of
losses on wash sales, the realization for tax purposes of gains/losses on
certain derivative instruments, and the difference between book and the
treatment of swap income.
(c) The difference between book-basis and tax-basis components of accumulated
earnings/(deficit) is attributable to dividends payable.
Ohio Portfolio 2005 2004
============ ============
Distributions paid from:
Tax-exempt income $ 7,265,838 $ 8,184,647
Ordinary income 59,799 121,101
------------ ------------
Total distributions paid $ 7,325,637 $ 8,305,748
============ ============
As of September 30, 2005, the components of accumulated earnings/(deficit) on a
tax basis were as follows:
Undistributed tax exempt income $ 37,927
Accumulated capital and other losses (7,249,248)(a)
Unrealized appreciation/(depreciation) 7,870,152(b)
------------
Total accumulated earnings/(deficit) $ 658,831(c)
============
(a) On September 30, 2005, the Portfolio had a net capital loss carryforward
for federal income tax purposes of $7,249,248 of which $1,952,430 expires in
the year 2008, $1,639,021 expires in the year 2009, $3,620,192 expires in the
year 2011 and $37,605 expires in the year 2012. To the extent future capital
gains are offset by capital loss carryforwards, such gains will not be
distributed. During the fiscal year ended September 30, 2005 the Portfolio
utilized capital loss carryforwards of $539,100.
(b) The differences between book-basis and tax-basis unrealized
appreciation/(depreciation) are attributable primarily to the tax deferral of
losses on wash sales , the realization for tax purposes of gains/losses on
certain derivative instruments, and the difference between book and tax
treatment of swap income.
(c) The difference between book-basis and tax-basis components of accumulated
earnings/(deficit) is attributable to dividends payable.
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 111
Pennsylvania Portfolio 2005 2004
============ ============
Distributions paid from:
Tax-exempt income $ 6,033,362 $ 7,539,043
Ordinary income 59,374 48,683
------------ ------------
Total distributions paid $ 6,092,736 $ 7,587,726
============ ============
As of September 30, 2005, the components of accumulated earnings/(deficit) on a
tax basis were as follows:
Undistributed Tax Exempt Income $ 8,595
Accumulated capital and other losses (2,420,483)(a)
Unrealized appreciation/(depreciation) 6,942,506(b)
------------
Total accumulated earnings/(deficit) $ 4,530,618(c)
============
(a) On September 30, 2005, the Portfolio had a net capital loss carryforward
for federal income tax purposes of $2,420,483 of which $1,699,951 expires in
the year 2008, $274,791 expires in the year 2010 and $445,741 expires in the
year 2011. To the extent future capital gains are offset by capital loss
carryforwards, such gains will not be distributed. During the fiscal year ended
September 30, 2005, the Portfolio utilized capital loss carryforwards of
$2,082,560.
(b) The difference between book-basis and tax-basis unrealized
appreciation/(depreciation)are attributable primarily to the tax deferral of
losses on wash sales, and the difference between book and tax treatment of swap
income.
(c) The difference between book-basis and tax-basis components of accumulated
earnings/(deficit) is attributable to dividends payable.
Virginia Portfolio 2005 2004
============ ============
Distributions paid from:
Tax-exempt income $ 6,674,553 $ 7,342,740
Ordinary income 45,915 49,328
------------ ------------
Total distributions paid $ 6,720,468 $ 7,392,068
============ ============
As of September 30, 2005, the components of accumulated earnings/(deficit) on a
tax basis were as follows:
Undistributed tax-exempt income $ 313,192
Accumulated capital and other losses (2,593,499)(a)
Unrealized appreciation/(depreciation) 6,656,866(b)
------------
Total accumulated earnings/(deficit) $ 4,376,559(c)
============
(a) On September 30, 2005, the Portfolio had a net capital loss carryforward
for federal income tax purposes of $2,593,499 of which $599,723 expires in the
year 2008, $1,200,330 expires in the year 2009 and $793,446 expires in the year
2010. To the extent future capital gains are offset by capital loss
carryforwards, such gains will not be distributed. During the fiscal year ended
September 30, 2005, the Portfolio utilized capital loss carryforwards of
$966,719.
(b) The differences between book-basis and tax-basis unrealized
appreciation/(depreciation) are attributable primarily to the tax deferral of
losses on wash sales the realization for tax purposes of gains/losses on
certain derivative instruments, and the difference between book and tax
treatment of swap income.
(c) The difference between book-basis and tax-basis components of accumulated
earnings/(deficit) is attributable to dividends payable.
112 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
NOTE H
Risks Involved in Investing in the Fund
Credit Risk--The Portfolios of the AllianceBernstein Municipal Income Fund II
are State Portfolios that may invest a large portion of their assets in a
particular state's municipal securities and their various political
subdivisions, and the performance of each of these Portfolios may be closely
tied to economic conditions within the applicable state and the financial
condition of that state and its agencies and municipalities.
Indemnification Risk--In the ordinary course of business, the Fund enters into
contracts that contain a variety of indemnifications.The Fund's maximum
exposure under these arrangements is unknown.However, the Fund has not had
prior claims or losses persuant to these contracts and expects the risk of loss
thereunder to be remote.
NOTE I
Legal Proceedings
As has been previously reported, the staff of the U.S. Securities and Exchange
Commission ("SEC") and the NYAG have been investigating practices in the mutual
fund industry identified as "market timing" and "late trading" of mutual fund
shares. Certain other regulatory authorities have also been conducting
investigations into these practices within the industry and have requested that
the Adviser provide information to them. The Adviser has been cooperating and
will continue to cooperate with all of these authorities.
On December 18, 2003, the Adviser confirmed that it had reached terms with the
SEC and the NYAG for the resolution of regulatory claims relating to the
practice of "market timing" mutual fund shares in some of the AllianceBernstein
Mutual Funds. The agreement with the SEC is reflected in an Order of the
Commission ("SEC Order"). The agreement with the NYAG is memorialized in an
Assurance of Discontinuance dated September 1, 2004 ("NYAG Order"). Among the
key provisions of these agreements are the following:
(i) The Adviser agreed to establish a $250 million fund (the "Reimbursement
Fund") to compensate mutual fund shareholders for the adverse effects of market
timing attributable to market timing relationships described in the SEC Order.
According to the SEC Order, the Reimbursement Fund is to be paid, in order of
priority, to fund investors based on (i) their aliquot share of losses suffered
by the fund due to market timing, and (ii) a proportionate share of advisory
fees paid by such fund during the period of such market timing;
(ii) The Adviser agreed to reduce the advisory fees it receives from some of
the AllianceBernstein long-term, open-end retail funds until December 31, 2008;
and
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 113
(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 Trustees of the Fund ("the Independent Trustees")
have initiated an investigation of the above-mentioned matters with the advice
of an independent economic consultant and independent counsel. The Independent
Trustees have formed a special committee to supervise the investigation.
On October 2, 2003, a purported class action complaint entitled Hindo, et al.
v. AllianceBernstein Growth & Income Fund, et al. ("Hindo Complaint") was filed
against the Adviser, Alliance Capital Management Holding L.P. ("Alliance
Holding"), Alliance Capital Management Corporation, AXA Financial, Inc., the
AllianceBernstein Funds, certain officers of the Adviser ("Alliance
defendants"), and certain other defendants not affiliated with the Adviser, as
well as unnamed Doe defendants. The Hindo Complaint was filed in the United
States District Court for the Southern District of New York by alleged
shareholders of two of the AllianceBernstein Funds. The Hindo Complaint alleges
that certain of the Alliance defendants failed to disclose that they improperly
allowed certain hedge funds and other unidentified parties to engage in "late
trading" and "market timing" of AllianceBernstein Fund securities, violating
Sections 11 and 15 of the Securities Act, Sections 10(b) and 20(a) of the
Exchange Act and Sections 206 and 215 of the Advisers Act. Plaintiffs seek an
unspecified amount of compensatory damages and rescission of their contracts
with the Adviser, including recovery of all fees paid to the Adviser pursuant
to such contracts.
Since October 2, 2003, numerous additional lawsuits making factual allegations
generally similar to those in the Hindo Complaint were filed in various federal
and state courts against the Adviser and certain other defendants, and others
may be filed. The plaintiffs in such lawsuits have asserted a variety of
theories for recovery including, but not limited to, violations of the
Securities Act, the
114 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
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 acting against the Adviser
either were voluntarily dismissed 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 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
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 115
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, th
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.
On April 11, 2006, the Court dismissed the Writ and later granted defendants a
30-day stay to file an appeal. 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 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,
116 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
(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.
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 117
FINANCIAL HIGHLIGHTS
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Arizona Portfolio
----------------------------------------------------------------------------
Class A
----------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2006 ---------------------------------------------------------------
(unaudited) 2005 2004(a) 2003 2002 2001
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $11.06 $10.95 $10.76 $11.02 $10.80 $10.47
Income From Investment
Operations
Net investment income(b)(c) .23 .47 .51 .51 .51 .54
Net realized and unrealized
gain (loss) on investment
transactions (.11) .11 .19 (.26) .26 .34
Net increase in net asset value
from operations .12 .58 .70 .25 .77 .88
Less: Dividends and
Distributions
Dividends from net investment
income (.23) (.47) (.51) (.51) (.51) (.54)
Distributions in excess of net
investment income -0- -0- -0- -0- (.04) (.01)
Total dividends and distributions (.23) (.47) (.51) (.51) (.55) (.55)
Net asset value, end of period $10.95 $11.06 $10.95 $10.76 $11.02 $10.80
Total Return
Total investment return based
on net asset value(d) 1.08% 5.36% 6.64% 2.35% 7.33% 8.56%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $122,781 $111,704 $88,701 $101,040 $121,245 $88,261
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements .78%(e)(f) .78% .78% .78% .78% .78%
Expenses, before waivers/
reimbursements .95%(e)(f) .97% 1.13% 1.11% 1.12% 1.22%
Net investment income, net of
waivers/reimbursements 4.15%(e)(f) 4.22% 4.69% 4.72% 4.73% 5.08%
Portfolio turnover rate 12% 25% 28% 28% 11% 119%
See footnote summary on page 145.
118 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Arizona Portfolio
----------------------------------------------------------------------------
Class B
----------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2006 ---------------------------------------------------------------
(unaudited) 2005 2004(a) 2003 2002 2001
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $11.04 $10.94 $10.74 $11.00 $10.78 $10.46
Income From Investment
Operations
Net investment income(b)(c) .19 .39 .43 .43 .43 .47
Net realized and unrealized
gain (loss) on investment
transactions (.11) .10 .20 (.26) .27 .33
Net increase in net asset value
from operations .08 .49 .63 .17 .70 .80
Less: Dividends and
Distributions
Dividends from net investment
income (.19) (.39) (.43) (.43) (.43) (.47)
Distributions in excess of net
investment income -0- -0- -0- -0- (.05) (.01)
Total dividends and distributions (.19) (.39) (.43) (.43) (.48) (.48)
Net asset value, end of period $10.93 $11.04 $10.94 $10.74 $11.00 $10.78
Total Return
Total investment return based
on net asset value(d) .73% 4.56% 5.98% 1.62% 6.65% 7.76%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $58,454 $63,255 $76,951 $89,938 $92,349 $56,024
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.48%(e)(f) 1.48% 1.48% 1.48% 1.48% 1.48%
Expenses, before waivers/
reimbursements 1.66%(e)(f) 1.68% 1.84% 1.82% 1.82% 1.93%
Net investment income, net of
waivers/reimbursements 3.46%(e)(f) 3.54% 4.00% 4.03% 4.02% 4.41%
Portfolio turnover rate 12% 25% 28% 28% 11% 119%
See footnote summary on page 145.
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 119
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Arizona Portfolio
----------------------------------------------------------------------------
Class C
----------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2006 ---------------------------------------------------------------
(unaudited) 2005 2004(a) 2003 2002 2001
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $11.04 $10.94 $10.74 $11.00 $10.78 $10.46
Income From Investment
Operations
Net investment income(b)(c) .19 .39 .43 .43 .43 .47
Net realized and unrealized
gain (loss) on investment
transactions (.11) .10 .20 (.26) .27 .33
Net increase in net asset value
from operations .08 .49 .63 .17 .70 .80
Less: Dividends and
Distributions
Dividends from net investment
income (.19) (.39) (.43) (.43) (.43) (.47)
Distributions in excess of net
investment income -0- -0- -0- -0- (.05) (.01)
Total dividends and distributions (.19) (.39) (.43) (.43) (.48) (.48)
Net asset value, end of period $10.93 $11.04 $10.94 $10.74 $11.00 $10.78
Total Return
Total investment return based
on net asset value(d) .73% 4.56% 5.98% 1.62% 6.65% 7.76%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $26,152 $24,926 $20,305 $25,110 $24,258 $13,407
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.48%(e)(f) 1.48% 1.48% 1.48% 1.48% 1.48%
Expenses, before waivers/
reimbursements 1.66%(e)(f) 1.67% 1.84% 1.82% 1.82% 1.93%
Net investment income, net of
waivers/reimbursements 3.46%(e)(f) 3.53% 4.00% 4.03% 4.00% 4.43%
Portfolio turnover rate 12% 25% 28% 28% 11% 119%
See footnote summary on page 145.
120 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Florida Portfolio
----------------------------------------------------------------------------
Class A
----------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2006 ---------------------------------------------------------------
(unaudited) 2005 2004(a) 2003 2002 2001
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $10.28 $10.25 $10.17 $10.34 $10.16 $9.76
Income From Investment
Operations
Net investment income(b)(c) .23 .47 .49 .49 .52 .53
Net realized and unrealized
gain (loss) on investment
transactions (.09) .03 .08 (.13) .19 .40
Net increase in net asset value
from operations .14 .50 .57 .36 .71 .93
Less: Dividends and
Distributions
Dividends from net investment
income (.23) (.47) (.49) (.53) (.52) (.53)
Distributions in excess of net
investment income -0- -0- -0- -0- (.01) -0-
Total dividends and distributions (.23) (.47) (.49) (.53) (.53) (.53)
Net asset value, end of period $10.19 $10.28 $10.25 $10.17 $10.34 $10.16
Total Return
Total investment return based
on net asset value(d) 1.37% 5.01% 5.78% 3.54% 7.21% 9.71%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $137,325 $127,541 $101,529 $109,543 $109,373 $97,714
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements .78%(e)(f) .78% .78% .78% .78% .78%
Expenses, before waivers/
reimbursements .92%(e)(f) .97% 1.10% 1.11% 1.09% 1.13%
Net investment income, net of
waivers/reimbursements 4.50%(e)(f) 4.60% 4.83% 4.80% 5.18% 5.33%
Portfolio turnover rate 6% 23% 22% 30% 20% 70%
See footnote summary on page 145.
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 121
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Florida Portfolio
----------------------------------------------------------------------------
Class B
----------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2006 ---------------------------------------------------------------
(unaudited) 2005 2004(a) 2003 2002 2001
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $10.29 $10.26 $10.18 $10.35 $10.17 $9.77
Income From Investment
Operations
Net investment income(b)(c) .20 .40 .42 .42 .45 .46
Net realized and unrealized
gain (loss) on investment
transactions (.09) .03 .08 (.14) .18 .39
Net increase in net asset value
from operations .11 .43 .50 .28 .63 .85
Less: Dividends
Dividends from net investment
income (.20) (.40) (.42) (.45) (.45) (.45)
Net asset value, end of period $10.20 $10.29 $10.26 $10.18 $10.35 $10.17
Total Return
Total investment return based
on net asset value(d) 1.02% 4.29% 4.96% 2.82% 6.45% 8.92%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $44,997 $53,996 $79,266 $104,874 $105,583 $87,603
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.48%(e)(f) 1.48% 1.48% 1.48% 1.48% 1.48%
Expenses, before waivers/
reimbursements 1.63%(e)(f) 1.67% 1.81% 1.81% 1.79% 1.84%
Net investment income, net of
waivers/reimbursements 3.80%(e)(f) 3.91% 4.12% 4.09% 4.47% 4.62%
Portfolio turnover rate 6% 23% 22% 30% 20% 70%
See footnote summary on page 145.
122 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Florida Portfolio
----------------------------------------------------------------------------
Class C
----------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2006 ---------------------------------------------------------------
(unaudited) 2005 2004(a) 2003 2002 2001
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $10.29 $10.25 $10.18 $10.35 $10.17 $9.77
Income From Investment
Operations
Net investment income(b)(c) .20 .40 .42 .42 .45 .46
Net realized and unrealized
gain (loss) on investment
transactions (.09) .04 .07 (.14) .18 .39
Net increase in net asset value
from operations .11 .44 .49 .28 .63 .85
Less: Dividends
Dividends from net investment
income (.20) (.40) (.42) (.45) (.45) (.45)
Net asset value, end of period $10.20 $10.29 $10.25 $10.18 $10.35 $10.17
Total Return
Total investment return based
on net asset value(d) 1.02% 4.38% 4.96% 2.82% 6.45% 8.93%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $39,879 $39,950 $39,170 $46,929 $49,102 $40,360
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.48%(e)(f) 1.48% 1.48% 1.48% 1.48% 1.48%
Expenses, before waivers/
reimbursements 1.62%(e)(f) 1.67% 1.81% 1.81% 1.79% 1.83%
Net investment income, net of
waivers/reimbursements 3.80%(e)(f) 3.90% 4.13% 4.09% 4.47% 4.64%
Portfolio turnover rate 6% 23% 22% 30% 20% 70%
See footnote summary on page 145.
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 123
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Massachusetts Portfolio
---------------------------------------------------------------------------
Class A
---------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2006 ---------------------------------------------------------------
(unaudited) 2005 2004(a) 2003 2002 2001
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $10.96 $10.92 $10.79 $11.06 $11.05 $10.59
Income From Investment
Operations
Net investment income(b)(c) .23 .47 .51 .51 .54 .56
Net realized and unrealized
gain (loss) on investment
transactions (.13) .05 .13 (.26) .04 .47
Net increase in net asset value
from operations .10 .52 .64 .25 .58 1.03
Less: Dividends and
Distributions
Dividends from net investment
income (.23) (.48) (.51) (.52) (.54) (.56)
Distributions in excess of net
investment income -0- -0- -0- -0- (.03) (.01)
Total dividends and distributions (.23) (.48) (.51) (.52) (.57) (.57)
Net asset value, end of period $10.83 $10.96 $10.92 $10.79 $11.06 $11.05
Total Return
Total investment return based
on net asset value(d) .91% 4.80% 6.13% 2.39% 5.46% 9.92%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $56,296 $53,035 $39,749 $46,342 $66,197 $63,384
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements .82%(e)(f) .82% .82% .82% .82% .82%
Expenses, before waivers/
reimbursements 1.03%(e)(f) 1.02% 1.19% 1.17% 1.12% 1.19%
Net investment income, net of
waivers/reimbursements 4.23%(e)(f) 4.29% 4.73% 4.71% 4.97% 5.20%
Portfolio turnover rate 14% 25% 26% 28% 27% 108%
See footnote summary on page 145.
124 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Massachusetts Portfolio
----------------------------------------------------------------------------
Class B
----------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2006 ---------------------------------------------------------------
(unaudited) 2005 2004(a) 2003 2002 2001
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $10.94 $10.91 $10.77 $11.03 $11.03 $10.57
Income From Investment
Operations
Net investment income(b)(c) .19 .40 .44 .44 .47 .49
Net realized and unrealized
gain (loss) on investment
transactions (.13) .03 .14 (.25) .03 .47
Net increase in net asset value
from operations .06 .43 .58 .19 .50 .96
Less: Dividends and
Distributions
Dividends from net investment
income (.19) (.40) (.44) (.45) (.47) (.49)
Distributions in excess of net
investment income -0- -0- -0- -0- (.03) (.01)
Total dividends and distributions (.19) (.40) (.44) (.45) (.50) (.50)
Net asset value, end of period $10.81 $10.94 $10.91 $10.77 $11.03 $11.03
Total Return
Total investment return based
on net asset value(d) .57% 4.00% 5.38% 1.76% 4.69% 9.22%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $45,837 $50,203 $63,430 $73,979 $79,216 $62,190
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.52%(e)(f) 1.52% 1.52% 1.52% 1.52% 1.52%
Expenses, before waivers/
reimbursements 1.74%(e)(f) 1.73% 1.90% 1.89% 1.83% 1.90%
Net investment income, net of
waivers/reimbursements 3.54%(e)(f) 3.61% 4.04% 4.02% 4.28% 4.53%
Portfolio turnover rate 14% 25% 26% 28% 27% 108%
See footnote summary on page 145.
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 125
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Massachusetts Portfolio
---------------------------------------------------------------------------
Class C
---------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2006 ---------------------------------------------------------------
(unaudited) 2005 2004(a) 2003 2002 2001
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $10.94 $10.91 $10.77 $11.03 $11.03 $10.57
Income From Investment
Operations
Net investment income(b)(c) .19 .40 .44 .44 .47 .49
Net realized and unrealized
gain(loss) on investment
transactions (.13) .03 .14 (.25) .03 .47
Net increase in net asset value
from operations .06 .43 .58 .19 .50 .96
Less: Dividends and
Distributions
Dividends from net investment
income (.19) (.40) (.44) (.45) (.47) (.49)
Distributions in excess of net
investment income -0- -0- -0- -0- (.03) (.01)
Total dividends and distributions (.19) (.40) (.44) (.45) (.50) (.50)
Net asset value, end of period $10.81 $10.94 $10.91 $10.77 $11.03 $11.03
Total Return
Total investment return based
on net asset value(d) .57% 3.99% 5.38% 1.76% 4.69% 9.22%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $38,533 $34,789 $35,598 $46,542 $53,156 $44,688
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.52%(e)(f) 1.52% 1.52% 1.52% 1.52% 1.52%
Expenses, before waivers/
reimbursements 1.73%(e)(f) 1.73% 1.89% 1.88% 1.82% 1.90%
Net investment income, net of
waivers/reimbursements 3.54%(e)(f) 3.61% 4.04% 4.02% 4.28% 4.53%
Portfolio turnover rate 14% 25% 26% 28% 27% 108%
See footnote summary on page 145.
126 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Michigan Portfolio
----------------------------------------------------------------------------
Class A
----------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2006 ---------------------------------------------------------------
(unaudited) 2005 2004(a) 2003 2002 2001
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $10.88 $10.79 $10.69 $10.91 $10.63 $10.16
Income From Investment
Operations
Net investment income(b)(c) .22 .46 .48 .47 .49 .52
Net realized and unrealized
gain (loss) on investment
transactions (.08) .09 .11 (.17) .32 .48
Net increase in net asset value
from operations .14 .55 .59 .30 .81 1.00
Less: Dividends and
Distributions
Dividends from net investment
income (.22) (.46) (.49) (.52) (.49) (.52)
Distributions in excess of net
investment income (.01) -0- -0- -0- (.04) (.01)
Total dividends and distributions (.23) (.46) (.49) (.52) (.53) (.53)
Net asset value, end of period $10.79 $10.88 $10.79 $10.69 $10.91 $10.63
Total Return
Total investment return based
on net asset value(d) 1.26% 5.16% 5.65% 2.66% 7.87% 10.11%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $64,105 $54,635 $45,362 $53,022 $55,396 $32,804
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements .97%(e)(f) .99% 1.01% 1.01% 1.01% 1.01%
Expenses, before waivers/
reimbursements 1.03%(e)(f) 1.05% 1.20% 1.20% 1.21% 1.44%
Net investment income, net of
waivers/reimbursements 3.98%(e)(f) 4.19% 4.51% 4.38% 4.57% 5.01%
Portfolio turnover rate 11% 18% 18% 46% 18% 115%
See footnote summary on page 145.
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 127
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Michigan Portfolio
---------------------------------------------------------------------------
Class B
---------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2006 ---------------------------------------------------------------
(unaudited) 2005 2004(a) 2003 2002 2001
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $10.86 $10.77 $10.67 $10.89 $10.62 $10.15
Income From Investment
Operations
Net investment income(b)(c) .18 .38 .41 .40 .41 .45
Net realized and unrealized
gain (loss) on investment
transactions (.08) .10 .10 (.18) .32 .48
Net increase in net asset value
from operations .10 .48 .51 .22 .73 .93
Less: Dividends and
Distributions
Dividends from net investment
income (.18) (.39) (.41) (.44) (.41) (.45)
Distributions in excess of net
investment income (.01) -0- -0- -0- (.05) (.01)
Total dividends and distributions (.19) (.39) (.41) (.44) (.46) (.46)
Net asset value, end of period $10.77 $10.86 $10.77 $10.67 $10.89 $10.62
Total Return
Total investment return based
on net asset value(d) .91% 4.47% 4.91% 1.95% 7.06% 9.39%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $37,839 $41,516 $47,605 $58,034 $53,097 $29,436
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.68%(e)(f) 1.70% 1.71% 1.71% 1.71% 1.71%
Expenses, before waivers/
reimbursements 1.74%(e)(f) 1.76% 1.91% 1.92% 1.92% 2.16%
Net investment income, net of
waivers/reimbursements 3.30%(e)(f) 3.50% 3.81% 3.69% 3.88% 4.34%
Portfolio turnover rate 11% 18% 18% 46% 18% 115%
See footnote summary on page 145.
128 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Michigan Portfolio
----------------------------------------------------------------------------
Class C
----------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2006 ---------------------------------------------------------------
(unaudited) 2005 2004(a) 2003 2002 2001
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $10.87 $10.77 $10.67 $10.89 $10.62 $10.14
Income From Investment
Operations
Net investment income(b)(c) .18 .38 .41 .40 .41 .45
Net realized and unrealized
gain (loss) on investment
transactions (.09) .10 .10 (.18) .32 .49
Net increase in net asset value
from operations .09 .48 .51 .22 .73 .94
Less: Dividends and
Distributions
Dividends from net investment
income (.18) (.38) (.41) (.44) (.41) (.45)
Distributions in excess of net
investment income (.01) -0- -0- -0- (.05) (.01)
Total dividends and distributions (.19) (.38) (.41) (.44) (.46) (.46)
Net asset value, end of period $10.77 $10.87 $10.77 $10.67 $10.89 $10.62
Total Return
Total investment return based
on net asset value(d) .82% 4.54% 4.91% 1.95% 7.06% 9.50%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $42,965 $43,225 $43,382 $54,996 $57,818 $24,142
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.68%(e)(f) 1.70% 1.71% 1.71% 1.71% 1.71%
Expenses, before waivers/
reimbursements 1.73%(e)(f) 1.75% 1.90% 1.90% 1.93% 2.16%
Net investment income, net of
waivers/reimbursements 3.30%(e)(f) 3.50% 3.82% 3.69% 3.86% 4.35%
Portfolio turnover rate 11% 18% 18% 46% 18% 115%
See footnote summary on page 145.
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 129
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Minnesota Portfolio
---------------------------------------------------------------------------
Class A
---------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2006 ---------------------------------------------------------------
(unaudited) 2005 2004(a) 2003 2002 2001
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $10.19 $10.14 $10.15 $10.31 $10.09 $9.72
Income From Investment
Operations
Net investment income(b)(c) .21 .42 .44 .45 .48 .52
Net realized and unrealized
gain (loss) on investment
transactions (.09) .05 (.01) (.15) .25 .38
Net increase in net asset value
from operations .12 .47 .43 .30 .73 .90
Less: Dividends and
Distributions
Dividends from net investment
income (.21) (.42) (.44) (.46) (.48) (.52)
Distributions in excess of net
investment income -0- -0- -0- -0- (.03) (.01)
Total dividends and distributions (.21) (.42) (.44) (.46) (.51) (.53)
Net asset value, end of period $10.10 $10.19 $10.14 $10.15 $10.31 $10.09
Total Return
Total investment return based
on net asset value(d) 1.20% 4.72% 4.41% 3.05% 7.46% 9.44%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $70,595 $69,174 $64,847 $67,521 $65,850 $30,501
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements .90%(e)(f) .90% .90% .90% .90% .90%
Expenses, before waivers/
reimbursements 1.09%(e)(f) 1.12% 1.27% 1.19% 1.29% 1.49%
Net investment income, net of
waivers/reimbursements 4.16%(e)(f) 4.12% 4.36% 4.42% 4.75% 5.23%
Portfolio turnover rate 7% 14% 19% 32% 29% 61%
See footnote summary on page 145.
130 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Minnesota Portfolio
----------------------------------------------------------------------------
Class B
----------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2006 ---------------------------------------------------------------
(unaudited) 2005 2004(a) 2003 2002 2001
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $10.19 $10.14 $10.15 $10.31 $10.08 $9.72
Income From Investment
Operations
Net investment income(b)(c) .18 .35 .37 .38 .40 .45
Net realized and unrealized
gain (loss) on investment
transactions (.09) .05 (.01) (.15) .27 .37
Net increase in net asset value
from operations .09 .40 .36 .23 .67 .82
Less: Dividends and
Distributions
Dividends from net investment
income (.18) (.35) (.37) (.39) (.40) (.45)
Distributions in excess of net
investment income -0- -0- -0- -0- (.04) (.01)
Total dividends and distributions (.18) (.35) (.37) (.39) (.44) (.46)
Net asset value, end of period $10.10 $10.19 $10.14 $10.15 $10.31 $10.08
Total Return
Total investment return based
on net asset value(d) .84% 3.99% 3.68% 2.34% 6.84% 8.61%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $11,593 $14,424 $16,976 $24,366 $24,340 $17,304
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.60%(e)(f) 1.60% 1.60% 1.60% 1.60% 1.60%
Expenses, before waivers/
reimbursements 1.80%(e)(f) 1.83% 1.99% 1.90% 1.99% 2.19%
Net investment income, net of
waivers/reimbursements 3.45%(e)(f) 3.43% 3.65% 3.72% 4.04% 4.52%
Portfolio turnover rate 7% 14% 19% 32% 29% 61%
See footnote summary on page 145.
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 131
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Minnesota Portfolio
---------------------------------------------------------------------------
Class C
---------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2006 ---------------------------------------------------------------
(unaudited) 2005 2004(a) 2003 2002 2001
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $10.20 $10.15 $10.16 $10.32 $10.10 $9.72
Income From Investment
Operations
Net investment income(b)(c) .18 .35 .37 .38 .40 .45
Net realized and unrealized
gain (loss) on investment
transactions (.09) .05 (.01) (.15) .26 .39
Net increase in net asset value
from operations .09 .40 .36 .23 .66 .84
Less: Dividends and
Distributions
Dividends from net investment
income (.18) (.35) (.37) (.39) (.40) (.45)
Distributions in excess of net
investment income -0- -0- -0- -0- (.04) (.01)
Total dividends and distributions (.18) (.35) (.37) (.39) (.44) (.46)
Net asset value, end of period $10.11 $10.20 $10.15 $10.16 $10.32 $10.10
Total Return
Total investment return based
on net asset value(d) .84% 3.98% 3.68% 2.34% 6.72% 8.82%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $16,360 $17,153 $16,402 $19,248 $20,401 $11,434
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.60%(e)(f) 1.60% 1.60% 1.60% 1.60% 1.60%
Expenses, before waivers/
reimbursements 1.80%(e)(f) 1.82% 1.98% 1.89% 1.99% 2.19%
Net investment income, net of
waivers/reimbursements 3.45%(e)(f) 3.42% 3.65% 3.70% 4.01% 4.51%
Portfolio turnover rate 7% 14% 19% 32% 29% 61%
See footnote summary on page 145.
132 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
New Jersey Portfolio
---------------------------------------------------------------------------
Class A
---------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2006 ---------------------------------------------------------------
(unaudited) 2005 2004(a) 2003 2002 2001
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $9.90 $9.84 $9.80 $10.03 $10.11 $9.92
Income From Investment
Operations
Net investment income(b)(c) .21 .42 .45 .45 .48 .52
Net realized and unrealized
gain (loss) on investment
transactions (.09) .07 .04 (.22) (.05) .20
Net increase in net asset value
from operations .12 .49 .49 .23 .43 .72
Less: Dividends and
Distributions
Dividends from net investment
income (.21) (.43) (.45) (.46) (.48) (.52)
Distributions in excess of net
investment income -0- -0- -0- -0- (.03) (.01)
Total dividends and distributions (.21) (.43) (.45) (.46) (.51) (.53)
Net asset value, end of period $9.81 $9.90 $9.84 $9.80 $10.03 $10.11
Total Return
Total investment return based
on net asset value(d) 1.24% 5.03% 5.05% 2.39% 4.42% 7.33%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $79,976 $77,570 $76,164 $81,632 $94,865 $80,489
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements .87%(e)(f) .87% .87% .87% .87% .87%
Expenses, before waivers/
reimbursements 1.03%(e)(f) 1.01% 1.16% 1.13% 1.11% 1.13%
Net investment income, net of
waivers/reimbursements 4.30%(e)(f) 4.26% 4.60% 4.53% 4.80% 5.04%
Portfolio turnover rate 1% 38% 15% 45% 49% 111%
See footnote summary on page 145.
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 133
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
New Jersey Portfolio
---------------------------------------------------------------------------
Class B
---------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2006 ---------------------------------------------------------------
(unaudited) 2005 2004(a) 2003 2002 2001
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $9.90 $9.84 $9.80 $10.04 $10.11 $9.92
Income From Investment
Operations
Net investment income(b)(c) .18 .35 .38 .38 .41 .44
Net realized and unrealized
gain (loss) on investment
transactions (.09) .07 .04 (.23) (.04) .20
Net increase in net asset value
from operations .09 .42 .42 .15 .37 .64
Less: Dividends and
Distributions
Dividends from net investment
income (.18) (.36) (.38) (.39) (.41) (.44)
Distributions in excess of net
investment income -0- -0- -0- -0- (.03) (.01)
Total dividends and distributions (.18) (.36) (.38) (.39) (.44) (.45)
Net asset value, end of period $9.81 $9.90 $9.84 $9.80 $10.04 $10.11
Total Return
Total investment return based
on net asset value(d) .88% 4.30% 4.41% 1.56% 3.79% 6.56%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $50,023 $58,706 $83,835 $110,294 $127,025 $103,889
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.57%(e)(f) 1.57% 1.57% 1.57% 1.57% 1.57%
Expenses, before waivers/
reimbursements 1.74%(e)(f) 1.72% 1.87% 1.84% 1.82% 1.84%
Net investment income, net of
waivers/reimbursements 3.59%(e)(f) 3.56% 3.89% 3.83% 4.10% 4.33%
Portfolio turnover rate 1% 38% 15% 45% 49% 111%
See footnote summary on page 145.
134 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
New Jersey Portfolio
---------------------------------------------------------------------------
Class C
---------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2006 ---------------------------------------------------------------
(unaudited) 2005 2004(a) 2003 2002 2001
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $9.90 $9.84 $9.81 $10.04 $10.11 $9.93
Income From Investment
Operations
Net investment income(b)(c) .18 .35 .38 .38 .41 .44
Net realized and unrealized
gain (loss) on investment
transactions (.09) .07 .03 (.22) (.04) .19
Net increase in net asset value
from operations .09 .42 .41 .16 .37 .63
Less: Dividends and
Distributions
Dividends from net investment
income (.18) (.36) (.38) (.39) (.41) (.44)
Distributions in excess of net
investment income -0- -0- -0- -0- (.03) (.01)
Total dividends and distributions (.18) (.36) (.38) (.39) (.44) (.45)
Net asset value, end of period $9.81 $9.90 $9.84 $9.81 $10.04 $10.11
Total Return
Total investment return based
on net asset value(d) .89% 4.31% 4.30% 1.66% 3.78% 6.45%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $35,625 $35,279 $37,926 $45,633 $56,295 $46,025
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.57%(e)(f) 1.57% 1.57% 1.57% 1.57% 1.57%
Expenses, before waivers/
reimbursements 1.73%(e)(f) 1.71% 1.86% 1.83% 1.81% 1.83%
Net investment income, net of
waivers/reimbursements 3.59%(e)(f) 3.56% 3.89% 3.83% 4.10% 4.34%
Portfolio turnover rate 1% 38% 15% 45% 49% 111%
See footnote summary on page 145.
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 135
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Ohio Portfolio
---------------------------------------------------------------------------
Class A
---------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2006 ---------------------------------------------------------------
(unaudited) 2005 2004(a) 2003 2002 2001
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $10.14 $10.10 $10.05 $10.02 $10.01 $9.77
Income From Investment
Operations
Net investment income(b)(c) .21 .43 .44 .46 .50 .54
Net realized and unrealized
gain (loss) on investment
transactions (.10) .03 .05 .05 .04 .23
Net increase in net asset value
from operations .11 .46 .49 .51 .54 .77
Less: Dividends and
Distributions
Dividends from net investment
income (.21) (.42) (.44) (.48) (.51) (.53)
Distributions in excess of net
investment income -0- -0- -0- -0- (.02) -0-
Total dividends and distributions (.21) (.42) (.44) (.48) (.53) (.53)
Net asset value, end of period $10.04 $10.14 $10.10 $10.05 $10.02 $10.01
Total Return
Total investment return based
on net asset value(d) 1.07% 4.67% 5.02% 5.20% 5.57% 8.04%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $88,909 $85,749 $78,184 $75,102 $70,223 $46,855
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements .85%(e)(f) .85% .85% .85% .85% .85%
Expenses, before waivers/
reimbursements .99%(e)(f) .99% 1.14% 1.15% 1.15% 1.20%
Net investment income, net of
waivers/reimbursements 4.13%(e)(f) 4.19% 4.38% 4.59% 4.99% 5.42%
Portfolio turnover rate 6% 23% 33% 23% 34% 32%
See footnote summary on page 145.
136 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Ohio Portfolio
---------------------------------------------------------------------------
Class B
---------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2006 ---------------------------------------------------------------
(unaudited) 2005 2004(a) 2003 2002 2001
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $10.13 $10.09 $10.04 $10.02 $10.01 $9.77
Income From Investment
Operations
Net investment income(b)(c) .17 .36 .37 .39 .43 .47
Net realized and unrealized
gain (loss) on investment
transactions (.10) .03 .05 .04 .05 .24
Net increase in net asset value
from operations .07 .39 .42 .43 .48 .71
Less: Dividends and
Distributions
Dividends from net investment
income (.17) (.35) (.37) (.41) (.44) (.47)
Distributions in excess of net
investment income -0- -0- -0- -0- (.03) -0-
Total dividends and distributions (.17) (.35) (.37) (.41) (.47) (.47)
Net asset value, end of period $10.03 $10.13 $10.09 $10.04 $10.02 $10.01
Total Return
Total investment return based
on net asset value(d) .72% 3.95% 4.30% 4.37% 4.87% 7.33%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $47,910 $55,111 $70,121 $83,422 $73,159 $54,575
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.55%(e)(f) 1.55% 1.55% 1.55% 1.55% 1.55%
Expenses, before waivers/
reimbursements 1.70%(e)(f) 1.69% 1.85% 1.86% 1.85% 1.91%
Net investment income, net of
waivers/reimbursements 3.43%(e)(f) 3.50% 3.69% 3.88% 4.29% 4.72%
Portfolio turnover rate 6% 23% 33% 23% 34% 32%
See footnote summary on page 145.
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 137
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Ohio Portfolio
---------------------------------------------------------------------------
Class C
---------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2006 ---------------------------------------------------------------
(unaudited) 2005 2004(a) 2003 2002 2001
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $10.13 $10.09 $10.05 $10.02 $10.02 $9.77
Income From Investment
Operations
Net investment income(b)(c) .17 .36 .37 .39 .43 .47
Net realized and unrealized
gain (loss) on investment
transactions (.10) .03 .04 .05 .04 .25
Net increase in net asset value
from operations .07 .39 .41 .44 .47 .72
Less: Dividends and
Distributions
Dividends from net investment
income (.17) (.35) (.37) (.41) (.44) (.47)
Distributions in excess of net
investment income -0- -0- -0- -0- (.03) -0-
Total dividends and distributions (.17) (.35) (.37) (.41) (.47) (.47)
Net asset value, end of period $10.03 $10.13 $10.09 $10.05 $10.02 $10.02
Total Return
Total investment return based
on net asset value(d) .72% 3.94% 4.19% 4.47% 4.77% 7.43%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $45,118 $47,610 $48,233 $54,062 $53,883 $36,500
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.55%(e)(f) 1.55% 1.55% 1.55% 1.55% 1.55%
Expenses, before waivers/
reimbursements 1.69%(e)(f) 1.69% 1.85% 1.85% 1.85% 1.90%
Net investment income, net of
waivers/reimbursements 3.43%(e)(f) 3.49% 3.69% 3.89% 4.29% 4.71%
Portfolio turnover rate 6% 23% 33% 23% 34% 32%
See footnote summary on page 145.
138 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Pennsylvania Portfolio
---------------------------------------------------------------------------
Class A
---------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2006 ---------------------------------------------------------------
(unaudited) 2005 2004(a) 2003 2002 2001
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $10.53 $10.48 $10.44 $10.58 $10.42 $9.88
Income From Investment
Operations
Net investment income(b)(c) .21 .44 .48 .50 .51 .52
Net realized and unrealized
gain (loss) on investment
transactions (.09) .05 .04 (.14) .18 .55
Net increase in net asset value
from operations .12 .49 .52 .36 .69 1.07
Less: Dividends and
Distributions
Dividends from net investment
income (.21) (.44) (.48) (.50) (.51) (.52)
Distributions in excess of net
investment income -0- -0- -0- -0- (.02) (.01)
Total dividends and distributions (.21) (.44) (.48) (.50) (.53) (.53)
Net asset value, end of period $10.44 $10.53 $10.48 $10.44 $10.58 $10.42
Total Return
Total investment return based
on net asset value(d) 1.17% 4.75% 5.06% 3.57% 6.88% 11.11%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $79,221 $78,472 $74,132 $84,053 $99,426 $96,834
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements .95%(e)(f) .95% .95% .95% .95% .95%
Expenses, before waivers/
reimbursements 1.01%(e)(f) 1.03% 1.17% 1.16% 1.13% 1.16%
Net investment income, net of
waivers/reimbursements 4.05%(e)(f) 4.19% 4.55% 4.91% 4.98% 5.15%
Portfolio turnover rate 14% 36% 19% 17% 38% 112%
See footnote summary on page 145.
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 139
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Pennsylvania Portfolio
----------------------------------------------------------------------------
Class B
----------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2006 ---------------------------------------------------------------
(unaudited) 2005 2004(a) 2003 2002 2001
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $10.53 $10.48 $10.44 $10.58 $10.41 $9.88
Income From Investment
Operations
Net investment income(b)(c) .18 .37 .40 .44 .45 .45
Net realized and unrealized
gain (loss) on investment
transactions (.09) .05 .04 (.15) .18 .54
Net increase in net asset value
from operations .09 .42 .44 .29 .63 .99
Less: Dividends and
Distributions
Dividends from net investment
income (.18) (.37) (.40) (.43) (.45) (.45)
Distributions in excess of net
investment income -0- -0- -0- -0- (.01) (.01)
Total dividends and distributions (.18) (.37) (.40) (.43) (.46) (.46)
Net asset value, end of period $10.44 $10.53 $10.48 $10.44 $10.58 $10.41
Total Return
Total investment return based
on net asset value(d) .81% 4.01% 4.32% 2.84% 6.26% 10.25%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $37,289 $41,760 $55,552 $68,409 $74,390 $62,038
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.65%(e)(f) 1.65% 1.65% 1.65% 1.65% 1.65%
Expenses, before waivers/
reimbursements 1.71%(e)(f) 1.73% 1.88% 1.87% 1.84% 1.86%
Net investment income, net of
waivers/reimbursements 3.34%(e)(f) 3.49% 3.85% 4.21% 4.35% 4.36%
Portfolio turnover rate 14% 36% 19% 17% 38% 112%
See footnote summary on page 145.
140 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Pennsylvania Portfolio
---------------------------------------------------------------------------
Class C
---------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2006 ---------------------------------------------------------------
(unaudited) 2005 2004(a) 2003 2002 2001
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $10.53 $10.48 $10.44 $10.58 $10.41 $9.88
Income From Investment
Operations
Net investment income(b)(c) .18 .37 .40 .44 .45 .45
Net realized and unrealized
gain (loss) on investment
transactions (.09) .05 .04 (.15) .18 .54
Net increase in net asset value
from operations .09 .42 .44 .29 .63 .99
Less: Dividends and
Distributions
Dividends from net investment
income (.18) (.37) (.40) (.43) (.45) (.45)
Distributions in excess of net
investment income -0- -0- -0- -0- (.01) (.01)
Total dividends and distributions (.18) (.37) (.40) (.43) (.46) (.46)
Net asset value, end of period $10.44 $10.53 $10.48 $10.44 $10.58 $10.41
Total Return
Total investment return based
on net asset value(d) .81% 4.02% 4.32% 2.84% 6.26% 10.25%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $34,153 $34,705 $36,168 $42,917 $46,296 $33,334
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.65%(e)(f) 1.65% 1.65% 1.65% 1.65% 1.65%
Expenses, before waivers/
reimbursements 1.71%(e)(f) 1.73% 1.87% 1.87% 1.83% 1.86%
Net investment income, net of
waivers/reimbursements 3.34%(e)(f) 3.49% 3.85% 4.20% 4.30% 4.42%
Portfolio turnover rate 14% 36% 19% 17% 38% 112%
See footnote summary on page 145.
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 141
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Virginia Portfolio
---------------------------------------------------------------------------
Class A
---------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2006 ---------------------------------------------------------------
(unaudited) 2005 2004(a) 2003 2002 2001
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $10.82 $10.77 $10.75 $10.77 $10.54 $10.35
Income From Investment
Operations
Net investment income(b)(c) .24 .49 .52 .52 .52 .54
Net realized and unrealized
gain (loss) on investment
transactions (.07) .05 .01 (.03) .25 .20
Net increase in net asset value
from operations .17 .54 .53 .49 .77 .74
Less: Dividends and
Distributions
Dividends from net investment
income (.24) (.49) (.51) (.51) (.52) (.54)
Distributions in excess of net
investment income -0- -0- -0- -0- (.02) (.01)
Total dividends and distributions (.24) (.49) (.51) (.51) (.54) (.55)
Net asset value, end of period $10.75 $10.82 $10.77 $10.75 $10.77 $10.54
Total Return
Total investment return based
on net asset value(d) 1.54% 5.11% 5.04% 4.66% 7.58% 7.32%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $101,226 $88,605 $64,089 $71,572 $76,797 $53,306
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements .72%(e)(f) .72% .72% .72% .72% .72%
Expenses, before waivers/
reimbursements .98%(e)(f) .99% 1.17% 1.15% 1.15% 1.21%
Net investment income, net of
waivers/reimbursements 4.36%(e)(f) 4.48% 4.82% 4.87% 4.95% 5.18%
Portfolio turnover rate 25% 23% 10% 25% 16% 134%
See footnote summary on page 145.
142 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Virginia Portfolio
---------------------------------------------------------------------------
Class B
---------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2006 ---------------------------------------------------------------
(unaudited) 2005 2004(a) 2003 2002 2001
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $10.80 $10.75 $10.73 $10.75 $10.53 $10.34
Income From Investment
Operations
Net investment income(b)(c) .20 .41 .44 .45 .45 .47
Net realized and unrealized
gain (loss) on investment
transactions (.07) .05 .01 (.04) .24 .20
Net increase in net asset value
from operations .13 .46 .45 .41 .69 .67
Less: Dividends and
Distributions
Dividends from net investment
income (.20) (.41) (.43) (.43) (.45) (.47)
Distributions in excess of net
investment income -0- -0- -0- -0- (.02) (.01)
Total dividends and distributions (.20) (.41) (.43) (.43) (.47) (.48)
Net asset value, end of period $10.73 $10.80 $10.75 $10.73 $10.75 $10.53
Total Return
Total investment return based
on net asset value(d) 1.19% 4.36% 4.32% 3.94% 6.78% 6.62%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $41,471 $46,489 $65,978 $82,541 $85,842 $69,534
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.42%(e)(f) 1.42% 1.42% 1.42% 1.42% 1.42%
Expenses, before waivers/
reimbursements 1.69%(e)(f) 1.70% 1.88% 1.85% 1.86% 1.92%
Net investment income, net of
waivers/reimbursements 3.67%(e)(f) 3.81% 4.13% 4.18% 4.27% 4.49%
Portfolio turnover rate 25% 23% 10% 25% 16% 134%
See footnote summary on page 145.
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 143
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Virginia Portfolio
----------------------------------------------------------------------------
Class C
----------------------------------------------------------------------------
Six Months
Ended
March 31, Year Ended September 30,
2006 ---------------------------------------------------------------
(unaudited) 2005 2004(a) 2003 2002 2001
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $10.79 $10.74 $10.73 $10.75 $10.52 $10.33
Income From Investment
Operations
Net investment income(b)(c) .20 .41 .44 .45 .45 .47
Net realized and unrealized
gain (loss) on investment
transactions (.06) .06 -0- (.04) .25 .20
Net increase in net asset value
from operations .14 .47 .44 .41 .70 .67
Less: Dividends and
Distributions
Dividends from net investment
income (.20) (.42) (.43) (.43) (.45) (.47)
Distributions in excess of net
investment income -0- -0- -0- -0- (.02) (.01)
Total dividends and distributions (.20) (.42) (.43) (.43) (.47) (.48)
Net asset value, end of period $10.73 $10.79 $10.74 $10.73 $10.75 $10.52
Total Return
Total investment return based
on net asset value(d) 1.28% 4.41% 4.23% 3.94% 6.88% 6.62%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $31,524 $29,412 $28,654 $33,486 $34,396 $24,116
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.42%(e)(f) 1.42% 1.42% 1.42% 1.42% 1.42%
Expenses, before waivers/
reimbursements 1.68%(e)(f) 1.69% 1.87% 1.85% 1.86% 1.92%
Net investment income, net of
waivers/reimbursements 3.67%(e)(f) 3.80% 4.13% 4.17% 4.26% 4.48%
Portfolio turnover rate 25% 23% 10% 25% 16% 134%
See footnote summary on page 145.
144 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
(a) As of October 1, 2003, the Portfolios have adopted the method of
accounting for interim payments on swap contracts in accordance with Financial
Accounting Standards Board Statement No. 133. These interim payments are
reflected within net realized and unrealized gain (loss) on swap contracts,
however prior to October 1, 2003, these interim payments were reflected within
interest income/expense on the statement of operations. For the year ended
September 30, 2004, the effect of this change to the net investment income and
the net realized and unrealized gain (loss) on investment transactions was less
than $0.01 per share. The effect on the ratio of net investment income to
average net assets was as follows:
Class A Class B Class C
------------ ------------ ------------
Arizona .01% .00% .00%
Florida (.02)% (.02)% (.02)%
Massachusetts (.01)% .00% (.01)%
Michigan .01% .01% .02%
Minnesota .00% .00% .00%
New Jersey .01% .01% .01%
Ohio (.04)% (.03)% (.04)%
Pennsylvania .00% .01% .00%
Virginia (.02)% (.01)% (.02)%
(b) Net of fees waived and expenses reimbursed by the Adviser.
(c) Based on average shares outstanding.
(d) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period. Initial sales charge or contingent
deferred sales charge is not reflected in the calculation of total investment
return. Total return does not reflect the deduction of taxes that a shareholder
would pay on Portfolio distributions or the redemption of Portfolio shares.
Total investment return calculated for a period of less than one year is not
annualized.
(e) The ratio includes expenses attributable to estimated costs of proxy
solicitation.
(f) Annualized.
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 145
ARIZONA PORTFOLIO
RESULTS OF SHAREHOLDERS MEETING
(unaudited)
A Special Meeting of the Stockholders of the AllianceBernstein Municipal Income
Fund II-Arizona Portfolio (the "Portfolio") was held on November 15, 2005. With
respect to the first item of business, the election of Trustees, the required
number of outstanding shares were voted in favor of the proposal, and the
proposal was approved. With respect to the third item of business, the
amendment, elimination, or reclassification as non-fundamental of the
fundamental investment restrictions, and the fourth item of business, the
reclassification of the Portfolio's fundamental investment objective as
non-fundamental with changes to the Portfolio's investment objective, the
required number of outstanding shares voted in favor of the proposal, and the
proposal was approved. A description of each proposal and number of shares
voted at the Meeting are as follows (the proposal numbers shown below
correspond to the proposal numbers in the Portfolio's proxy statement):
1. To elect eight Trustees of the Portfolio, each such Trustee to hold
office until his or her successor is duly elected and qualified.
Withheld
Voted For Authority
--------------------------------------------
Ruth Block 91,212,049 2,694,097
David H. Dievler 91,221,279 2,684,867
John H. Dobkin 91,242,278 2,663,867
Michael J. Downey 91,267,436 2,638,710
William H. Foulk, Jr. 91,239,025 2,667,120
D. James Guzy 90,901,764 3,004,382
Marc O. Mayer 91,231,955 2,674,190
Marshall C. Turner, Jr. 91,259,021 2,647,125
3. To amend, eliminate, or reclassify as non-fundamental, the fundamental
investment restrictions regarding:
Voted Broker
Voted For Against Abstained Non-Votes
- ------------------------------------------------------------------------------------------
3.B. Issuing Senior Securities 8,532,406 291,287 60,551 2,592,358
and Borrowing Money
3.C. Underwriting Securities 8,526,879 296,814 60,551 2,592,358
3.D. Concentration of 8,521,145 289,127 73,971 2,592,358
Investments
3.E. Real Estate and 8,520,059 302,547 61,637 2,592,358
Companies That Deal In
Real Estate
3.F. Commodity Contracts and 8,477,607 302,735 103,901 2,592,358
Futures Contracts
3.G. Loans 8,444,015 379,158 61,070 2,592,358
3.H. Joint Securities Trading 8,498,714 295,049 90,481 2,592,358
Accounts
3.L. Purchase of Securities on 8,482,189 312,140 89,914 2,592,358
Margin
146 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Voted Broker
Voted For Against Abstained Non-Votes
- ------------------------------------------------------------------------------------------
3.M. Short Sales 8,482,708 312,140 89,395 2,592,358
3.N. Pledging, Hypothecating, 8,419,706 374,057 90,481 2,592,358
Mortgaging, or Otherwise
Encumbering Assets
3.V. Option Transactions 8,504,066 296,127 84,051 2,592,358
4.B. The reclassification of 8,069,182 190,278 624,782 2,592,358
the Portfolio's fundamental
investment objective as
non-fundamental with
changes to the
Portfolio's investment
objective.
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 147
FLORIDA PORTFOLIO
RESULTS OF SHAREHOLDERS MEETING
(unaudited)
A Special Meeting of the Stockholders of the AllianceBernstein Municipal Income
Fund II-Florida Portfolio (the "Portfolio") was held on November 15, 2005 and
adjourned until December 6, 2005. At the November 15, 2005 Meeting, with
respect to the first item of business, the election of Trustees, the required
number of outstanding shares were voted in favor of the proposal, and the
proposal was approved. At the December 6, 2005 Meeting, with respect to the
third item of business, the amendment, elimination, or reclassification as
non-fundamental of the fundamental investment restrictions, and the fourth item
of business, the reclassification of the Portfolio's fundamental investment
objective as non-fundamental with changes to the Portfolio's investment
objective, the required number of outstanding shares voted in favor of the
proposal, and the proposal was approved. A description of each proposal and
number of shares voted at the Meeting are as follows (the proposal numbers
shown below correspond to the proposal numbers in the Portfolio's proxy
statement):
1. To elect eight Trustees of the Portfolio, each such Trustee to hold
office until his or her successor is duly elected and qualified.
Withheld
Voted For Authority
--------------------------------------------
Ruth Block 91,212,049 2,694,097
David H. Dievler 91,221,279 2,684,867
John H. Dobkin 91,242,278 2,663,867
Michael J. Downey 91,267,436 2,638,710
William H. Foulk, Jr. 91,239,025 2,667,120
D. James Guzy 90,901,764 3,004,382
Marc O. Mayer 91,231,955 2,674,190
Marshall C. Turner, Jr. 91,259,021 2,647,125
3. To amend, eliminate, or reclassify as non-fundamental, the fundamental
investment restrictions regarding:
Voted Broker
Voted For Against Abstained Non-Votes
- ------------------------------------------------------------------------------------------
3.B. Issuing Senior Securities 9,791,829 498,338 223,159 3,170,200
and Borrowing Money
3.C. Underwriting Securities 9,764,959 525,208 223,159 3,170,200
3.D. Concentration of 9,764,265 555,915 193,147 3,170,200
Investments
3.E. Real Estate and 9,802,137 474,542 236,647 3,170,200
Companies That Deal
In Real Estate
3.F. Commodity Contracts 9,768,523 521,645 223,159 3,170,200
and Futures Contracts
3.G. Loans 9,768,919 495,622 248,785 3,170,200
3.H. Joint Securities Trading 9,764,144 526,024 223,159 3,170,200
Accounts
148 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Voted Broker
Voted For Against Abstained Non-Votes
- ------------------------------------------------------------------------------------------
3.L. Purchase of Securities on 9,789,803 530,376 193,147 3,170,200
Margin
3.M. Short Sales 9,890,608 429,571 193,147 3,170,200
3.N. Pledging, Hypothecating, 9,889,101 395,051 229,174 3,170,200
Mortgaging, or Otherwise
Encumbering Assets
3.V. Option Transactions 9,787,543 532,637 193,147 3,170,200
4.B. The reclassification of the 9,440,405 415,398 657,523 3,170,200
Portfolio's fundamental
investment objective as
non-fundamental with
changes to the
Portfolio's investment
objective.
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 149
MASSACHUSETTS PORTFOLIO
RESULTS OF SHAREHOLDERS MEETING
(unaudited)
A Special Meeting of the Stockholders of the AllianceBernstein Municipal Income
Fund II-Massachusetts Portfolio (the "Portfolio") was held on November 15,
2005. With respect to the first item of business, the election of Trustees, the
required number of outstanding shares were voted in favor of the proposal, and
the proposal was approved. With respect to the third item of business, the
amendment, elimination, or reclassification as non-fundamental of the
fundamental investment restrictions, and the fourth item of business, the
reclassification of the Portfolio's fundamental investment objective as
non-fundamental with changes to the Portfolio's investment objective, the
required number of outstanding shares voted in favor of the proposal, and the
proposal was approved. A description of each proposal and number of shares
voted at the Meeting are as follows (the proposal numbers shown below
correspond to the proposal numbers in the Portfolio's proxy statement):
1. To elect eight Trustees of the Portfolio, each such Trustee to hold
office until his or her successor is duly elected and qualified.
Withheld
Voted For Authority
--------------------------------------------
Ruth Block 91,212,049 2,694,097
David H. Dievler 91,221,279 2,684,867
John H. Dobkin 91,242,278 2,663,867
Michael J. Downey 91,267,436 2,638,710
William H. Foulk, Jr. 91,239,025 2,667,120
D. James Guzy 90,901,764 3,004,382
Marc O. Mayer 91,231,955 2,674,190
Marshall C. Turner, Jr. 91,259,021 2,647,125
3. To amend, eliminate, or reclassify as non-fundamental, the fundamental
investment restrictions regarding:
Voted Broker
Voted For Against Abstained Non-Votes
- ------------------------------------------------------------------------------------------
3.B. Issuing Senior Securities 5,294,789 199,847 28,181 2,045,803
and Borrowing Money
3.C. Underwriting Securities 5,291,259 194,876 36,683 2,045,803
3.D. Concentration of 5,294,789 199,847 28,181 2,045,803
Investments
3.E. Real Estate and 5,286,288 203,006 33,523 2,045,803
Companies That Deal
In Real Estate
3.F. Commodity Contracts 5,290,087 204,550 28,181 2,045,803
and Futures Contracts
3.G. Loans 5,271,092 215,043 36,683 2,045,803
3.H. Joint Securities Trading 5,284,744 204,550 33,523 2,045,803
Accounts
3.L. Purchase of Securities on 5,261,217 228,274 33,326 2,045,803
Margin
150 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Voted Broker
Voted For Against Abstained Non-Votes
- ------------------------------------------------------------------------------------------
3.M. Short Sales 5,257,104 228,274 37,439 2,045,803
3.N. Pledging, Hypothecating, 5,260,398 229,094 33,326 2,045,803
Mortgaging, or Otherwise
Encumbering Assets
3.V. Option Transactions 5,265,920 223,572 33,326 2,045,803
4.B. The reclassification of the 5,088,323 145,704 288,790 2,045,803
Portfolio's fundamental
investment objective as
non-fundamental with
changes to the Portfolio's
investment objective.
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 151
MICHIGAN PORTFOLIO
RESULTS OF SHAREHOLDERS MEETING
(unaudited)
A Special Meeting of the Stockholders of the AllianceBernstein Municipal Income
Fund II-Michigan Portfolio (the "Portfolio") was held on November 15, 2005 and
adjourned until December 6, 2005. At the November 15, 2005 Meeting, with
respect to the first item of business, the election of Trustees, and the third
item of business, the amendment, elimination, or reclassification as
non-fundamental of the fundamental investment restrictions, the required number
of outstanding shares were voted in favor of the proposal, and the proposal was
approved. At the December 6, 2005 Meeting, with respect to the fourth item of
business, the reclassification of the Portfolio's fundamental investment
objective as non-fundamental with changes to the Portfolio's investment
objective, the required number of outstanding shares voted in favor of the
proposal, and the proposal was approved. A description of each proposal and
number of shares voted at the Meeting are as follows (the proposal numbers
shown below correspond to the proposal numbers in the Portfolio's proxy
statement):
1. To elect eight Trustees of the Portfolio, each such Trustee to hold
office until his or her successor is duly elected and qualified.
Withheld
Voted For Authority
--------------------------------------------
Ruth Block 91,212,049 2,694,097
David H. Dievler 91,221,279 2,684,867
John H. Dobkin 91,242,278 2,663,867
Michael J. Downey 91,267,436 2,638,710
William H. Foulk, Jr. 91,239,025 2,667,120
D. James Guzy 90,901,764 3,004,382
Marc O. Mayer 91,231,955 2,674,190
Marshall C. Turner, Jr. 91,259,021 2,647,125
3. To amend, eliminate, or reclassify as non-fundamental, the fundamental
investment restrictions regarding:
Voted Broker
Voted For Against Abstained Non-Votes
- ------------------------------------------------------------------------------------------
3.B. Issuing Senior Securities 5,366,193 316,797 63,318 2,137,056
and Borrowing Money
3.C. Underwriting Securities 5,373,247 304,525 68,537 2,137,056
3.D. Concentration of 5,401,903 293,818 50,587 2,137,056
Investments
3.E. Real Estate and 5,364,468 313,988 67,851 2,137,056
Companies That Deal
In Real Estate
3.F. Commodity Contracts and 5,367,990 327,731 50,587 2,137,056
Futures Contracts
3.G. Loans 5,357,476 338,882 49,951 2,137,056
152 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Voted Broker
Voted For Against Abstained Non-Votes
- ------------------------------------------------------------------------------------------
3.H. Joint Securities Trading 5,396,477 296,484 53,347 2,137,056
Accounts
3.L. Purchase of Securities on 5,360,350 329,103 56,855 2,137,056
Margin
3.M. Short Sales 5,337,961 339,435 68,912 2,137,056
3.N. Pledging, Hypothecating, 5,366,940 324,655 54,713 2,137,056
Mortgaging, or Otherwise
Encumbering Assets
3.V. Option Transactions 5,385,924 302,101 58,282 2,137,056
4.B. The reclassification of the 5,561,894 281,561 464,168 1,471,990
Portfolio's fundamental
investment objective as
non-fundamental with
changes to the Portfolio's
investment objective.
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 153
MINNESOTA PORTFOLIO
RESULTS OF SHAREHOLDERS MEETING
(unaudited)
A Special Meeting of the Stockholders of the AllianceBernstein Municipal Income
Fund II-Minnesota Portfolio (the "Portfolio") was held on November 15, 2005 and
adjourned until December 6, 2005. At the November 15, 2005 Meeting, with
respect to the first item of business, the election of Trustees, and the third
item of business, the amendment, elimination, or reclassification as
non-fundamental of the fundamental investment restrictions, the required number
of outstanding shares were voted in favor of the proposal, and the proposal was
approved. At the December 6, 2005 Meeting, with respect to the fourth item of
business, the reclassification of the Portfolio's fundamental investment
objective as non-fundamental with changes to the Portfolio's investment
objective, the required number of outstanding shares voted in favor of the
proposal, and the proposal was approved. A description of each proposal and
number of shares voted at the Meeting are as follows (the proposal numbers
shown below correspond to the proposal numbers in the Portfolio's proxy
statement):
1. To elect eight Trustees of the Portfolio, each such Trustee to hold
office until his or her successor is duly elected and qualified.
Withheld
Voted For Authority
--------------------------------------------
Ruth Block 91,212,049 2,694,097
David H. Dievler 91,221,279 2,684,867
John H. Dobkin 91,242,278 2,663,867
Michael J. Downey 91,267,436 2,638,710
William H. Foulk, Jr. 91,239,025 2,667,120
D. James Guzy 90,901,764 3,004,382
Marc O. Mayer 91,231,955 2,674,190
Marshall C. Turner, Jr. 91,259,021 2,647,125
3. To amend, eliminate, or reclassify as non-fundamental, the fundamental
investment restrictions regarding:
Voted Broker
Voted For Against Abstained Non-Votes
- ------------------------------------------------------------------------------------------
3.B. Issuing Senior Securities 4,507,941 321,799 211,319 1,606,113
and Borrowing Money
3.C. Underwriting Securities 4,527,131 305,018 208,910 1,606,113
3.D. Concentration of 4,553,959 308,716 178,384 1,606,113
Investments
3.E. Real Estate and 4,540,083 299,905 201,070 1,606,113
Companies That Deal
In Real Estate
3.F. Commodity Contracts and 4,539,038 315,797 186,224 1,606,113
Futures Contracts
3.G. Loans 4,509,442 328,709 202,907 1,606,113
3.H. Joint Securities Trading 4,561,000 284,861 195,197 1,606,113
Accounts
154 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Voted Broker
Voted For Against Abstained Non-Votes
- ------------------------------------------------------------------------------------------
3.L. Purchase of Securities on 4,520,902 339,065 181,091 1,606,113
Margin
3.M. Short Sales 4,519,595 340,373 181,091 1,606,113
3.N. Pledging, Hypothecating, 4,517,041 322,947 201,070 1,606,113
Mortgaging, or Otherwise
Encumbering Assets
3.V. Option Transactions 4,541,646 314,464 184,949 1,606,113
4.B. The reclassification of the 5,902,727 298,443 390,765 1,293,485
Portfolio's fundamental
investment objective as
non-fundamental with
changes to the Portfolio's
investment objective.
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 155
NEW JERSEY PORTFOLIO
RESULTS OF SHAREHOLDERS MEETING
(unaudited)
A Special Meeting of the Stockholders of the AllianceBernstein Municipal Income
Fund II-New Jersey Portfolio (the "Portfolio") was held on November 15, 2005
and adjourned until December 6, 2005 and December 19, 2005. At the November 15,
2005 Meeting, with respect to the first item of business, the election of
Trustees the required number of outstanding shares were voted in favor of the
proposal, and the proposal was approved. At the December 6, 2005 Meeting, with
respect to the third item of business, the amendment, elimination, or
reclassification as non-fundamental of the fundamental investment restrictions,
the required number of outstanding shares were voted in favor of the proposal,
and the proposal was approved. At the December 19, 2005 Meeting, with respect
to the fourth item of business, the reclassification of the Portfolio's
fundamental investment objective as non-fundamental with changes to the
Portfolio's investment objective, the required number of outstanding shares
voted in favor of the proposal, and the proposal was approved. A description of
each proposal and number of shares voted at the Meeting are as follows (the
proposal numbers shown below correspond to the proposal numbers in the
Portfolio's proxy statement):
1. To elect eight Trustees of the Portfolio, each such Trustee to hold
office until his or her successor is duly elected and qualified.
Withheld
Voted For Authority
--------------------------------------------
Ruth Block 91,212,049 2,694,097
David H. Dievler 91,221,279 2,684,867
John H. Dobkin 91,242,278 2,663,867
Michael J. Downey 91,267,436 2,638,710
William H. Foulk, Jr. 91,239,025 2,667,120
D. James Guzy 90,901,764 3,004,382
Marc O. Mayer 91,231,955 2,674,190
Marshall C. Turner, Jr. 91,259,021 2,647,125
3. To amend, eliminate, or reclassify as non-fundamental, the fundamental
investment restrictions regarding:
Voted Broker
Voted For Against Abstained Non-Votes
- ------------------------------------------------------------------------------------------
3.B. Issuing Senior Securities 7,623,311 501,785 219,036 2,744,061
and Borrowing Money
3.C. Underwriting Securities 7,637,931 484,633 221,568 2,744,061
3.D. Concentration of 7,658,571 483,599 201,962 2,744,061
Investments
3.E. Real Estate and Companies 7,650,378 482,313 211,440 2,744,061
That Deal In Real Estate
3.F. Commodity Contracts and 7,655,824 480,505 207,802 2,744,061
Futures Contracts
156 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Voted Broker
Voted For Against Abstained Non-Votes
- ------------------------------------------------------------------------------------------
3.G. Loans 7,631,431 506,756 205,944 2,744,061
3.H. Joint Securities Trading 7,657,781 477,781 208,569 2,744,061
Accounts
3.L. Purchase of Securities on 7,636,882 500,815 206,435 2,744,061
Margin
3.M. Short Sales 7,639,331 495,950 208,851 2,744,061
3.N. Pledging, Hypothecating, 7,621,106 513,884 209,181 2,744,061
Mortgaging, or Otherwise
Encumbering Assets
3.V. Option Transactions 7,641,130 490,234 212,767 2,744,061
4.B. The reclassification of the 7,457,235 410,298 593,100 2,656,419
Portfolio's fundamental
investment objective as
non-fundamental with
changes to the Portfolio's
investment objective.
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 157
OHIO PORTFOLIO
RESULTS OF SHAREHOLDERS MEETING
(unaudited)
A Special Meeting of the Stockholders of the AllianceBernstein Municipal Income
Fund II-Ohio Portfolio (the "Portfolio") was held on November 15, 2005 and
adjourned until December 6, 2005. At the November 15, 2005 Meeting, with
respect to the first item of business, the election of Trustees, the required
number of outstanding shares were voted in favor of the proposal, and the
proposal was approved. At the December 6, 2005 Meeting, with respect to the
third item of business, the amendment, elimination, or reclassification as
non-fundamental of the fundamental investment restrictions, and the fourth item
of business, the reclassification of the Portfolio's fundamental investment
objective as non-fundamental with changes to the Portfolio's investment
objective, the required number of outstanding shares voted in favor of the
proposal, and the proposal was approved. A description of each proposal and
number of shares voted at the Meeting are as follows (the proposal numbers
shown below correspond to the proposal numbers in the Portfolio's proxy
statement):
1. To elect eight Trustees of the Portfolio, each such Trustee to hold
office until his or her successor is duly elected and qualified.
Withheld
Voted For Authority
--------------------------------------------
Ruth Block 91,212,049 2,694,097
David H. Dievler 91,221,279 2,684,867
John H. Dobkin 91,242,278 2,663,867
Michael J. Downey 91,267,436 2,638,710
William H. Foulk, Jr. 91,239,025 2,667,120
D. James Guzy 90,901,764 3,004,382
Marc O. Mayer 91,231,955 2,674,190
Marshall C. Turner, Jr. 91,259,021 2,647,125
3. To amend, eliminate, or reclassify as non-fundamental, the fundamental
investment restrictions regarding:
Voted Broker
Voted For Against Abstained Non-Votes
- ------------------------------------------------------------------------------------------
3.B. Issuing Senior Securities 8,914,415 523,251 198,803 2,374,871
and Borrowing Money
3.C. Underwriting Securities 8,921,987 507,343 207,139 2,374,871
3.D. Concentration of
Investments 8,914,117 513,464 208,888 2,374,871
3.E. Real Estate and Companies 8,912,035 511,164 213,270 2,374,871
That Deal In Real Estate
3.F. Commodity Contracts 8,908,829 518,637 209,003 2,374,871
and Futures Contracts
3.G. Loans 8,907,673 520,422 208,374 2,374,871
3.H. Joint Securities Trading 8,910,308 516,143 210,018 2,374,871
Accounts
3.L. Purchase of Securities on 8,933,715 500,050 202,704 2,374,871
Margin
158 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Voted Broker
Voted For Against Abstained Non-Votes
- ------------------------------------------------------------------------------------------
3.M. Short Sales 8,927,655 509,388 199,426 2,374,871
3.N. Pledging, Hypothecating, 8,934,231 503,677 198,560 2,374,871
Mortgaging, or Otherwise
Encumbering Assets
3.V. Option Transactions 8,917,314 518,460 200,694 2,374,871
4.B. The reclassification of the 8,377,144 479,055 780,270 2,374,871
Portfolio's fundamental
investment objective as
non-fundamental with
changes to the Portfolio's
investment objective.
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 159
PENNSYLVANIA PORTFOLIO
RESULTS OF SHAREHOLDERS MEETING
(unaudited)
A Special Meeting of the Stockholders of the AllianceBernstein Municipal Income
Fund II-Pennsylvania Portfolio (the "Portfolio") was held on November 15, 2005
and adjourned until December 6, 2005. At the November 15, 2005 Meeting, with
respect to the first item of business, the election of Trustees, the required
number of outstanding shares were voted in favor of the proposal, and the
proposal was approved. At the December 6, 2005 Meeting, with respect to the
third item of business, the amendment, elimination, or reclassification as
non-fundamental of the fundamental investment restrictions, and the fourth item
of business, the reclassification of the Portfolio's fundamental investment
objective as non-fundamental with changes to the Portfolio's investment
objective, the required number of outstanding shares voted in favor of the
proposal, and the proposal was approved. A description of each proposal and
number of shares voted at the Meeting are as follows (the proposal numbers
shown below correspond to the proposal numbers in the Portfolio's proxy
statement):
1. To elect eight Trustees of the Portfolio, each such Trustee to hold
office until his or her successor is duly elected and qualified.
Withheld
Voted For Authority
--------------------------------------------
Ruth Block 91,212,049 2,694,097
David H. Dievler 91,221,279 2,684,867
John H. Dobkin 91,242,278 2,663,867
Michael J. Downey 91,267,436 2,638,710
William H. Foulk, Jr. 91,239,025 2,667,120
D. James Guzy 90,901,764 3,004,382
Marc O. Mayer 91,231,955 2,674,190
Marshall C. Turner, Jr. 91,259,021 2,647,125
3. To amend, eliminate, or reclassify as non-fundamental, the fundamental
investment restrictions regarding:
Voted Broker
Voted For Against Abstained Non-Votes
- ------------------------------------------------------------------------------------------
3.B. Issuing Senior Securities 7,661,307 372,309 222,743 2,639,800
and Borrowing Money
3.C. Underwriting Securities 7,712,649 324,784 218,927 2,639,800
3.D. Concentration of 7,703,742 355,557 217,061 2,639,800
Investments
3.E. Real Estate and 7,659,531 360,101 236,727 2,639,800
Companies
That Deal In Real Estate
3.F. Commodity Contracts 7,670,083 349,281 236,995 2,639,800
and Futures Contracts
3.G. Loans 7,641,786 386,411 228,163 2,639,800
3.H. Joint Securities Trading 7,677,038 332,241 247,081 2,639,800
Accounts
160 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Voted Broker
Voted For Against Abstained Non-Votes
- ------------------------------------------------------------------------------------------
3.L. Purchase of Securities on 7,705,168 343,583 207,609 2,639,800
Margin
3.M. Short Sales 7,656,949 391,754 207,657 2,639,800
3.N. Pledging, Hypothecating, 7,645,195 395,303 215,861 2,639,800
Mortgaging, or Otherwise
Encumbering Assets
3.V. Option Transactions 7,706,491 344,864 205,005 2,639,800
4.B. The reclassification of the 7,411,857 271,194 573,309 2,639,800
Portfolio's fundamental
investment objective as
non-fundamental with
changes to the Portfolio's
investment objective.
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 161
VIRGINIA PORTFOLIO
RESULTS OF SHAREHOLDERS MEETING
(unaudited)
A Special Meeting of the Stockholders of the AllianceBernstein Municipal Income
Fund II-Virginia Portfolio (the "Portfolio") was held on November 15, 2005 and
adjourned until December 6, 2005. At the November 15, 2005 Meeting, with
respect to the first item of business, the election of Trustees, and the third
item of business, the amendment, elimination, or reclassification as
non-fundamental of the fundamental investment restrictions, the required number
of outstanding shares were voted in favor of the proposal, and the proposal was
approved. At the December 6, 2005 Meeting, with respect to the fourth item of
business, the reclassification of the Portfolio's fundamental investment
objective as non-fundamental with changes to the Portfolio's investment
objective, the required number of outstanding shares voted in favor of the
proposal, and the proposal was approved. A description of each proposal and
number of shares voted at the Meeting are as follows (the proposal numbers
shown below correspond to the proposal numbers in the Portfolio's proxy
statement):
1. To elect eight Trustees of the Portfolio, each such Trustee to hold
office until his or her successor is duly elected and qualified.
Withheld
Voted For Authority
--------------------------------------------
Ruth Block 91,212,049 2,694,097
David H. Dievler 91,221,279 2,684,867
John H. Dobkin 91,242,278 2,663,867
Michael J. Downey 91,267,436 2,638,710
William H. Foulk, Jr. 91,239,025 2,667,120
D. James Guzy 90,901,764 3,004,382
Marc O. Mayer 91,231,955 2,674,190
Marshall C. Turner, Jr. 91,259,021 2,647,125
3. To amend, eliminate, or reclassify as non-fundamental, the fundamental
investment restrictions regarding:
Voted Broker
Voted For Against Abstained Non-Votes
- ------------------------------------------------------------------------------------------
3.B. Issuing Senior Securities 7,670,797 690,513 36,746 2,856,463
and Borrowing Money
3.C. Underwriting Securities 7,679,859 681,451 36,746 2,856,463
3.D. Concentration of 7,667,007 693,211 37,837 2,856,463
Investments
3.E. Real Estate and 7,672,017 681,936 44,103 2,856,463
Companies That Deal In
Real Estate
3.F. Commodity Contracts 7,665,944 695,366 36,746 2,856,463
and Futures Contracts
3.G. Loans 7,669,378 691,767 36,910 2,856,463
3.H. Joint Securities Trading 7,662,852 691,450 43,754 2,856,463
Accounts
162 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Voted Broker
Voted For Against Abstained Non-Votes
- ------------------------------------------------------------------------------------------
3.L. Purchase of Securities on 7,641,699 719,611 36,746 2,856,463
Margin
3.M. Short Sales 7,658,125 703,184 36,746 2,856,463
3.N. Pledging, Hypothecating, 7,663,534 696,684 37,837 2,856,463
Mortgaging, or Otherwise
Encumbering Assets
3.V. Option Transactions 7,650,586 700,677 46,793 2,856,463
4.B. The reclassification of the 7,662,924 873,019 470,740 2,287,974
Portfolio's fundamental
investment objective as
non-fundamental with
changes to the Portfolio's
investment objective.
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 163
BOARD OF TRUSTEES
William H. Foulk, Jr.,(1) Chairman
Marc O. Mayer, President
Ruth Block(1)
David H. Dievler(1)
John H. Dobkin(1)
Michael J. Downey(1)
D. James Guzy(1)
Marshall C. Turner, Jr.(1)
OFFICERS
Philip L. Kirstein, Senior Vice President and Independent Compliance Officer
(Guy) Robert B. Davidson III, Senior Vice President
Douglas J. Peebles, Senior Vice President
Jeffrey S. Phlegar, Senior Vice President
Michael G. Brooks, Vice President
Fred S. Cohen, Vice President
Terrance T. Hults, Vice President
Mark D. Gersten, Treasurer and Chief Financial Officer
Thomas R. Manley, Controller
Emilie D. Wrapp, Secretary
Custodian
The Bank of New York
One Wall Street
New York, NY 10286
Principal Underwriter
AllianceBernstein Investments, Inc.
1345 Avenue of the Americas
New York, NY 10105
Legal Counsel
Seward & Kissel LLP
One Battery Park Plaza
New York, NY 10004
Independent Registered Public Accounting Firm
Ernst & Young LLP
5 Times Square
New York, NY 10036
Transfer Agent
AllianceBernstein Investor Services, Inc.
P.O. Box 786003
San Antonio, Texas 78278-6003
Toll-free (800) 227-5672
(1) Member of the Audit Committee, the Governance and Nominating Committee and
the Independent Directors Committee.
(2) The day-to-day management of and investment decisions for the Portfolios'
portfolios are made by the Municipal Bond Investment Team. Michael G. Brooks,
Fred S. Cohen, (Guy) Robert B. Davidson III and Terrance T. Hults are the
investment professionals with the most significant responsibility for the
day-to-day management of the Portfolios' portfolios.
164 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
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 MUNICIPAL INCOME FUND II o 165
THE FOLLOWING IS NOT PART OF THE SHAREHOLDER REPORT OR THE FINANCIAL STATEMENTS.
SUMMARY OF SENIOR OFFICER'S EVALUATION OF INVESTMENT ADVISORY AGREEMENT(1)
The following is a summary of the evaluation of the investment advisory
agreement between Alliance Capital Management L.P. (the "Adviser") and
AllianceBernstein Municipal Income Fund II (the "Trust") on behalf of Arizona
Portfolio, Florida Portfolio, Massachusetts Portfolio, Michigan Portfolio,
Minnesota Portfolio, New Jersey Portfolio, Ohio Portfolio, Pennsylvania
Portfolio and Virginia Portfolio (each a "Fund" and collectively the "Funds"),
prepared by Philip L. Kirstein, the Senior Officer, for the independent
Trustees of the Funds, as required by the Assurance of Discontinuance between
the New York State Attorney General and the Adviser. The Senior Officer's
evaluation of the investment advisory agreement is not meant to diminish the
responsibility or authority of the Board of Trustees to perform its 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 agreements, excluding any intra-corporate profit.
4. Profit margins of the Adviser and its affiliates from supplying such
services.
5. Possible economies of scale as the Funds grow larger.
6. Nature and quality of the Adviser's services including the performance of
the Funds.
(1) It should be noted that the information in the fee summary was completed
on September 2, 2005 and presented to the Board of Trustees on September 14,
2005 in accordance with the Assurance of Discontinuance between the New York
State Attorney General and the Adviser. It also should be noted that references
in the fee summary pertaining to performance and expense ratios refer to Class
A shares of the Funds.
166 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
FUNDS ADVISORY FEES, EXPENSE REIMBURSEMENTS, CAPS & RATIOS
The table below describes the Funds' advisory fees pursuant to the Investment
Advisory Agreement. This is the fee schedule the Adviser implemented in January
2004 as a result of the settlement with the New York State Attorney General.(2)
Advisory Fee Based on % of
Fund Average Daily Net Assets
- -------------------------------------------------------------------------------
Arizona Portfolio First $2.5 billion 0.45%
Next $2.5 billion 0.40%
Excess of $5 billion 0.35%
Florida Portfolio First $2.5 billion 0.45%
Next $2.5 billion 0.40%
Excess of $5 billion 0.35%
Massachusetts Portfolio First $2.5 billion 0.45%
Next $2.5 billion 0.40%
Excess of $5 billion 0.35%
Michigan Portfolio First $2.5 billion 0.45%
Next $2.5 billion 0.40%
Excess of $5 billion 0.35%
Minnesota Portfolio First $2.5 billion 0.45%
Next $2.5 billion 0.40%
Excess of $5 billion 0.35%
New Jersey Portfolio First $2.5 billion 0.45%
Next $2.5 billion 0.40%
Excess of $5 billion 0.35%
Ohio Portfolio First $2.5 billion 0.45%
Next $2.5 billion 0.40%
Excess of $5 billion 0.35%
Pennsylvania Portfolio First $2.5 billion 0.45%
Next $2.5 billion 0.40%
Excess of $5 billion 0.35%
Virginia Portfolio First $2.5 billion 0.45%
Next $2.5 billion 0.40%
Excess of $5 billion 0.35%
(2) The advisory fee schedule implemented in January 2004 contemplates eight
categories of the AllianceBernstein Mutual Funds with all AllianceBernstein
Funds in each category having the same advisory fee schedule.
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 167
The Adviser is reimbursed as specified in the Investment Advisory Agreement for
certain clerical, legal, accounting, administrative and other services provided
to the Funds as indicated below:
As a % of
Fund Amount average daily net assets
- -------------------------------------------------------------------------------
Arizona Portfolio $80,750 0.04
Florida Portfolio $80,750 0.03
Massachusetts Portfolio $80,750 0.05
Michigan Portfolio(3) $80,750 0.05
Minnesota Portfolio(3) $80,750 0.08
New Jersey Portfolio $80,750 0.04
Ohio Portfolio $80,750 0.04
Pennsylvania Portfolio $80,750 0.04
Virginia Portfolio(4) $80,750 0.05
The Adviser has agreed to waive that portion of its management fees and/or
reimburse each Fund for that portion of its total operating expenses to the
degree necessary to limit each Fund's expense ratio to the amounts set forth
below for each Fund's current fiscal year. The waiver agreement is terminable
by the Adviser at the end of the Funds' fiscal year upon at least 60 days
written notice.
Expense Cap Gross
Pursuant to Expense Expense
Fund Limitation Undertaking Ratio(5) Fiscal Year End
- -------------------------------------------------------------------------------
Arizona Portfolio Class A 0.78% 0.97% September 30
Class B 1.48% 1.67%
Class C 1.48% 1.67%
Florida Portfolio Class A 0.78% 0.96% September 30
Class B 1.48% 1.67%
Class C 1.48% 1.66%
Massachusetts Portfolio Class A 0.82% 1.03% September 30
Class B 1.52% 1.74%
Class C 1.52% 1.73%
Michigan Portfolio Class A 1.01% 1.01% September 30
Class B 1.71% 1.72%
Class C 1.71% 1.71%
Minnesota Portfolio Class A 0.90% 1.02% September 30
Class B 1.60% 1.74%
Class C 1.60% 1.73%
New Jersey Portfolio Class A 0.87% 1.01% September 30
Class B 1.57% 1.71%
Class C 1.57% 1.71%
(3) For the Fund's most recently completed fiscal year, the Adviser waived the
reimbursement amount.
(4) See footnote 3.
(5) These gross expense ratios are calculated from the beginning of the Funds'
current fiscal year through May 31, 2005.
168 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Expense Cap Gross
Pursuant to Expense Expense
Fund Limitation Undertaking Ratio(5) Fiscal Year End
- -------------------------------------------------------------------------------
Ohio Portfolio Class A 0.85% 0.98% September 30
Class B 1.55% 1.68%
Class C 1.55% 1.68%
Pennsylvania Portfolio Class A 0.95% 1.02% September 30
Class B 1.65% 1.73%
Class C 1.65% 1.72%
Virginia Portfolio Class A 0.72% 0.95% September 30
Class B 1.42% 1.66%
Class C 1.42% 1.66%
I. MANAGEMENT FEES CHARGED TO INSTITUTIONAL AND OTHER CLIENTS
The management fees charged to investment companies which the Adviser manages
and sponsors is normally higher than those charged to similar sized
institutional accounts, including pension plans and sub-advised investment
companies. The fee differential reflects, among other things, different
services provided to such clients, and different liabilities assumed. Services
provided by the Adviser to the Funds that are not provided to non-investment
company clients include providing office space and personnel to serve as Fund
Officers, who among other responsibilities make the certifications required
under the Sarbanes-Oxley Act of 2002, and coordinating with and monitoring the
Funds' third party service providers such as Fund counsel, auditors,
custodians, transfer agents and pricing services. The accounting,
administrative, legal and compliance requirements for the Funds are more costly
than those for institutional assets due to the greater complexities and time
required for investment companies, although as previously noted, a portion of
these expenses are reimbursed by the Funds to the Adviser. In addition,
managing the cash flow of an investment company may be more difficult than that
of a stable pool of assets, such as an institutional account with little cash
movement in either direction, particularly, if a Fund is in net redemption and
the Adviser is frequently forced to sell securities to raise cash for
redemptions. However, managing a fund with positive cash flow may be easier at
times than managing a stable pool of assets. Finally, in recent years,
investment advisers have been sued by institutional clients and have suffered
reputational damage both by the attendant publicity and outcomes other than
complete victories. Accordingly, the legal and reputational risks associated
with institutional accounts are greater than previously thought, although still
not equal to those related to the mutual fund industry.
Notwithstanding the Adviser's view that managing an investment company is not
comparable to managing other institutional accounts because the services
provided are different, it is worth considering information regarding the
advisory
(5) These gross expense ratios are calculated from the beginning of the Funds'
current fiscal year through May 31, 2005.
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 169
fees charged to institutional accounts with substantially similar investment
styles as the Funds. However, the Adviser represented that it does not manage
any separate managed account that has similar investment guidelines as the
Funds. The Adviser does manage separately managed accounts that invest
principally in municipal securities but those mandates have a substantially
lower risk profile (credit and interest rate risk) than the Funds.
The Adviser manages the Sanford C. Bernstein Fund, Inc., an open-end investment
company. The Adviser charges the following fees to the Portfolios that invest
in municipal securities like the Funds, although they invest in securities of
different maturities and qualities:
Fund Advisory Fee
- ----------------------------------------------------------------------------------------------
California Municipal Portfolio 0.50% of the first $1 billion; 0.45%
Diversified Municipal Portfolio in excess of $1 billion up to but not
New York Municipal Portfolio exceeding $3 billion; 0.40% in excess
of $3 billion
Short Duration California Municipal Portfolio 0.50% of the first $250 million; 0.45%
Short Duration Diversified Municipal Portfolio in excess of $250 million up to but not
Short Duration New York Municipal Portfolio exceeding $750 million; 0.40% in
excess of $750 million
The Adviser also manages and sponsors retail mutual funds which are organized
in jurisdictions outside the United States, generally Luxembourg, and sold to
non-United States resident investors. The Adviser charges the following fees
for an offshore mutual fund that invests in fixed income securities:
Asset Class Fee(6)
- ------------- ----------
Fixed Income 0.65%
The Adviser represented that it does not sub-advise any registered investment
companies of other fund families with a similar investment style as the Fund.
II. MANAGEMENT FEES CHARGED BY OTHER MUTUAL FUNDS COMPANIES FOR LIKE SERVICES.
Lipper, Inc., an analytical service that is not affiliated with the Adviser,
compared the fees charged to the Funds with fees charged to other investment
companies for similar services by other investment advisers. Lipper's analysis
included the Funds' ranking with respect to the proposed management fees
relative to the Lipper group median at the approximate current asset levels of
the Funds.(7)
(6) The fee charged to the fund includes a 0.10% fee for administrative
services provided by the Adviser or its affiliates.
(7) It should be noted that "effective management fee" is calculated by Lipper
using each Fund's contractual management fee rate at a hypothetical asset
level. The hypothetical asset level is based on the combined net assets of all
classes of each Fund, rounded up to the next $25 million. Lipper's total
expense ratio information is based on the most recent annual report except as
otherwise noted. A ranking of "1" means that the AllianceBernstein Fund has the
lowest effective fee rate in the Lipper peer group.
170 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Effective Lipper
Fund Management Fee(8) Group Median Rank
- -------------------------------------------------------------------------------
Arizona Portfolio(9) 0.450 0.500 2/8
Florida Portfolio(9) 0.450 0.550 1/9
Massachusetts Portfolio(9) 0.450 0.505 2/12
Michigan Portfolio(9) 0.450 0.530 1/8
Minnesota Portfolio(9) 0.450 0.550 1/9
New Jersey Portfolio 0.450 0.533 1/10
Ohio Portfolio(9) 0.450 0.510 1/9
Pennsylvania Portfolio(9) 0.450 0.500 2/11
Virginia Portfolio(9) 0.450 0.496 3/7
Lipper also analyzed the expense ratio of the Funds in comparison to its Lipper
Expense Group(10) and Lipper Expense Universe(11). Lipper describes a Lipper
Expense Group as a representative sample of comparable funds, consisting of all
funds in the investment classification/objective with a similar load type as
the subject Fund. The Lipper Expense Universe is a broader collection of. The
results of that analysis are set forth below:
Lipper Lipper Lipper Lipper
Expense Universe Universe Group Group
Fund Ratio(12) Median Rank Median Rank
- -------------------------------------------------------------------------------
Arizona Portfolio(13) 0.780 0.780 6/11 0.780 5/9
Florida Portfolio(13) 0.780 0.878 4/17 0.853 2/10
Massachusetts Portfolio(13) 0.820 0.900 3/17 0.887 3/13
Michigan Portfolio(13) 1.010 0.874 11/12 0.876 9/9
Minnesota Portfolio(13) 0.900 0.883 12/18 0.891 7/10
New Jersey Portfolio 0.870 0.918 6/18 0.900 3/10
Ohio Portfolio(13) 0.850 0.861 6/14 0.871 3/10
Pennsylvania Portfolio(13) 0.945 0.900 13/21 0.921 8/12
Virginia Portfolio(13) 0.720 0.863 3/9 0.882 2/8
(8) It should be noted that the "effective management fee" rate for the Funds
does not reflect the payments by the Funds to the Adviser for certain clerical,
legal, accounting, administrative and other services. The dollar amount and
basis point impact of such payments on the Funds is discussed in Section I.
(9) The number of funds used in Lipper's group ranking for management fees is
one less than the number of funds used in Lipper's group ranking for total
expenses. According to Lipper, the excluded fund's contractual management fee
cannot be computed because of its breakpoint gross income component.
(10) 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.
(11) Except for asset (size) comparability and load type, Lipper uses the same
criteria for selecting an Expense Group when selecting an Expense Universe.
Unlike an Expense Group, an Expense Universe allows for the same adviser to be
represented by more than just one fund.
(12) Most recent fiscal year end Class A share expense ratios.
(13) See footnote 9 on page 8.
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 171
Based on this analysis, the Funds have a more favorable ranking on a management
fee basis than they do on a total expense ratio basis. This has resulted in a
variety of efforts by the Adviser to lower non-management expenses.
III. COSTS TO THE ADVISER AND ITS AFFILIATES OF SUPPLYING SERVICES PURSUANT TO
THE MANAGEMENT FEE ARRANGEMENT, EXCLUDING ANY INTRA-CORPORATE PROFIT.
The profitability information for the Funds prepared by the Adviser for the
Board of Trustees 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 from providing investment advisory services to the
Funds 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 Funds, certain of
the Adviser's affiliates have business relationships with the Funds and may
earn a profit from providing other services to the Funds. The courts have
referred to this type of business opportunity as "fall-out benefits" to the
Adviser and and indicated that they should be factored into the evaluation of
the total relationship between the Funds and the Adviser. Neither case law nor
common business practice precludes the Adviser's affiliates from earning a
reasonable profit on this type of relationship. These affiliates provide
transfer agent and distribution services to the Funds and receive transfer
agent fees, Rule 12b-1 payments, front-end sales loads and contingent deferred
sales charges ("CDSC"). Additional information regarding distribution related
fees can be found in the prospectus of the Funds.
The Adviser's affiliate, AllianceBernstein Investment Research and Management,
Inc. ("ABIRM"), is the Funds' principal underwriter. ABIRM and the Adviser have
disclosed in the Funds prospectus that they may make payments(15) from their
own resources, in addition to resources derived from sales loads and Rule 12b-1
fees, to firms that sell shares of the Funds. In 2004, ABIRM paid approximately
0.04% of the average monthly assets of the AllianceBernstein Mutual Funds for
distribution services and educational support. For 2005, it is anticipated,
ABIRM will pay approximately 0.04% of the average monthly assets of each of the
Funds for such purposes.
(15) The total amount paid to the financial intermediary in connection with
the sale of shares will generally not exceed the sum of (a) 0.25% of the
current year's Fund sales by that firm and (b) 0.10% of the average daily net
assets attributable to that firm over the year.
172 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
After payments to third party intermediaries, ABIRM retained the following
amount in Class A front-end load sales charge from sales of the Funds' shares
in the Funds' most recent fiscal year.
Fund Amount Received
- -----------------------------------------------------------------------
Arizona Portfolio $27,736
Florida Portfolio $17,832
Massachusetts Portfolio $ 5,041
Michigan Portfolio $10,461
Minnesota Portfolio $ 9,996
New Jersey Portfolio $ 5,041
Ohio Portfolio $19,651
Pennsylvania Portfolio $12,348
Virginia Portfolio $12,243
ABIRM received the amounts set forth below in Rule 12b-1 fees for the Funds
during the Funds most recent fiscal year. A significant percentage of such
amounts were paid out to third party intermediaries by ABIRM.
Fund 12b-1 Fee Received CDSC Received
- ---------------------------------------------------------------------
Arizona Portfolio $1,350,483 $114,629
Florida Portfolio $1,659,761 $114,629
Massachusetts Portfolio $1,213,157 $ 94,638
Michigan Portfolio $1,159,656 $128,394
Minnesota Portfolio $ 588,525 $ 37,438
New Jersey Portfolio $1,616,775 $171,462
Ohio Portfolio $1,529,765 $117,011
Pennsylvania Portfolio $1,261,072 $ 64,097
Virginia Portfolio $1,248,745 $ 79,965
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 fees from the Funds in the most recent fiscal year:
Fund AGIS Fee
- ---------------------------------------------------------------------
Arizona Portfolio $41,282
Florida Portfolio $43,166
Massachusetts Portfolio $40,520
Michigan Portfolio $54,575
Minnesota Portfolio $38,092
New Jersey Portfolio $73,960
Ohio Portfolio $58,200
Pennsylvania Portfolio $64,526
Virginia Portfolio $45,118
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 173
V. POSSIBLE ECONOMIES OF SCALE
The Adviser has indicated that the breakpoints in the fee schedule in the
Investment Advisory Agreement reflect a sharing of economies of scale to the
extent the breakpoints are reached. Based on some of the professional
literature that has considered economies of scale in the mutual fund industry
it is thought that to the extent economies of scale exist, they may more often
exist across a fund family as opposed to a specific fund. This is because the
costs incurred by the Adviser, such as investment research or technology for
trading or compliance systems can be spread across a greater asset base as the
fund family increases in size. It is also possible that as the level of
services required to operate a successful investment company has increased over
time, and advisory firms have made such investments in their business to
provide improved services, there may be a sharing of economies of scale without
a reduction in advisory fees.
An independent consultant made a presentation to the Board of Trustees and the
Senior Officer regarding possible economies of scale or scope in the mutual
fund industry. Based on the presentation, it was evident that fund management
companies benefit from economies of scale. However, due to lack of cost data,
researchers had to infer facts about the costs from the behavior of fund
expenses; there was a lack of consensus among researchers as to whether
economies of scale were being passed on to the shareholders. It is contemplated
that additional work will be performed to determine if the benefits of
economies of scale or scope are being passed to shareholders by the Adviser. In
the meantime, it is clear that to the extent the Funds' assets exceed the
initial breakpoint its shareholders benefit from a lower fee rate.
VI. NATURE AND QUALITY OF THE ADVISER'S SERVICES INCLUDING THE PERFORMANCE OF
THE FUNDS.
With assets under management of $516 billion as of June 30, 2005, the Adviser
has the investment experience to manage and provide non-investment services
(described in Section II) to the Funds.
The information prepared by Lipper showed the 1, 3, 5 and 10 year performance
ranking of the Funds(16) relative to its Lipper group and universe for the
periods ended May 31, 2005:
Arizona Portfolio Group Universe
1 year 1/9 2/11
3 year 1/9 2/11
5 year 2/9 2/11
10 year 1/8 1/9
Florida Portfolio Group Universe
1 year 2/10 3/17
3 year 2/10 2/17
5 year 3/10 3/17
10 year 1/10 1/17
(16) The performance rankings are for the Class A shares of the Funds.
174 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
Massachuesetts Portfolio Group Universe
1 year 1/13 1/17
3 year 9/13 9/17
5 year 8/13 9/16
10 year 1/13 1/16
Michigan Portfolio Group Universe
1 year 1/9 1/13
3 year 2/9 2/13
5 year 1/9 2/13
10 year 1/9 1/13
Minnesota Portfolio Group Universe
1 year 1/10 3/18
3 year 3/10 5/18
5 year 3/9 7/17
10 year 1/9 1/16
New Jersey Portfolio Group Universe
1 year 3/10 5/18
3 year 7/10 11/18
5 year 8/10 15/17
10 year 3/9 6/16
Ohio Portfolio Group Universe
1 year 3/10 3/14
3 year 3/10 5/14
5 year 3/10 4/13
10 year 1/10 1/13
Pennsylvania Portfolio Group Universe
1 year 6/12 7/21
3 year 7/12 8/21
5 year 5/12 5/21
10 year 2/12 2/20
Virginia Portfolio Group Universe
1 year 3/8 4/9
3 year 2/8 2/9
5 year 1/8 1/9
10 year 1/8 1/9
Set forth below are the 1, 3, 5, 10 year and since inception performance
returns of the Funds (in bold)(17) versus its benchmarks(18). It should be
noted that each Fund has the Lehman Brothers Municipal Bond Index as its
benchmark. The Lehman Brothers Municipal Bond Index is a rules-based,
market-value-weighted index engineered for the long-term tax-exempt bond
market. To be included, bonds must be investment grade and be at least one year
from maturity. The index has four main sectors: general obligation bonds,
revenue bonds, insured
(17) The Funds' performance returns are for the Class A shares of the Funds.
(18) The Adviser provided Fund and benchmark performance return information
for periods through May 31, 2005 in order to maintain consistency with Lipper's
performance rankings in the analysis.
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II o 175
bonds and prerefunded bonds. The index represents a national municipal bond
index as opposed to a specific state index.
Periods Ending May 31, 2005
Annualized Performance
- -------------------------------------------------------------------------------
1 3 5 10 Since
Fund Year Year Year Year Inception
- -------------------------------------------------------------------------------
Arizona Portfolio 9.70 6.22 7.12 6.33 6.77
Lehman Brothers Municipal
Bond Index 7.96 6.00 7.30 6.22 6.59
Florida Portfolio 8.69 6.33 7.34 6.25 5.87
Lehman Brothers Municipal
Bond Index 7.96 6.00 7.30 6.22 6.04
Massachusetts Portfolio 9.27 5.63 6.82 6.32 6.83
Lehman Brothers Municipal
Bond Index 7.96 6.00 7.30 6.22 6.54
Michigan Portfolio 9.30 5.96 7.41 6.62 6.71
Lehman Brothers Municipal
Bond Index 7.96 6.00 7.30 6.22 6.10
Minnesota Portfolio 8.58 5.73 6.86 5.98 5.61
Lehman Brothers Municipal
Bond Index 7.96 6.00 7.30 6.22 6.04
New Jersey Portfolio 9.28 4.84 6.05 5.53 5.27
Lehman Brothers Municipal
Bond Index 7.96 6.00 7.30 6.22 6.04
Ohio Portfolio 8.80 5.57 6.75 5.94 5.60
Lehman Brothers Municipal
Bond Index 7.96 6.00 7.30 6.22 6.04
Pennsylvania Portfolio 8.04 5.83 7.24 6.21 5.96
Lehman Brothers Municipal
Bond Index 7.96 6.00 7.30 6.22 6.04
Virginia Portfolio 8.39 6.27 7.00 6.54 6.79
Lehman Brothers Municipal
Bond Index 7.96 6.00 7.30 6.22 6.51
CONCLUSION:
Based on the factors discussed above the Senior Officer's conclusion is that
the proposed fees for the Funds are 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 Funds is based on an
evaluation of all of these factors and no single factor was dispositive.
Dated: October 12, 2005
176 o ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
ALLIANCEBERNSTEIN MUNICIPAL INCOME FUND II
1345 Avenue of the Americas
New York, NY 10105
(800) 221-5672
[LOGO]
ALLIANCEBERNSTEIN
INVESTMENTS
MIF11-0152-0306
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 Municipal Income Fund II
By: /s/ Marc O. Mayer
-----------------
Marc O. Mayer
President
Date: May 29, 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
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Marc O. Mayer
President
Date: May 29, 2006
By: /s/ Mark D. Gersten
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Mark D. Gersten
Treasurer and Chief Financial Officer
Date: May 29, 2006