UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number: 811-00204 ALLIANCEBERNSTEIN MID-CAP GROWTH FUND, INC. (Exact name of registrant as specified in charter) 1345 Avenue of the Americas, New York, New York 10105 (Address of principal executive offices) (Zip code) Mark R. Manley AllianceBernstein L.P. 1345 Avenue of the Americas New York, New York 10105 (Name and address of agent for service) Registrant's telephone number, including area code: (800) 221-5672 Date of fiscal year end: July 31, 2007 Date of reporting period: January 31, 2007 ITEM 1. REPORTS TO STOCKHOLDERS. - ------------------------------------------------------------------------------- SEMI-ANNUAL REPORT - ------------------------------------------------------------------------------- AllianceBernstein Mid-Cap Growth Fund Semi-Annual Report January 31, 2007 [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 publishes full portfolio holdings for the Fund monthly at www.alliancebernstein.com. AllianceBernstein Investments, Inc. is an affiliate of AllianceBernstein L.P., the manager of the AllianceBernstein funds, and is a member of the NASD. AllianceBernstein(R) and the AB Logo are registered trademarks and service marks used by permission of the owner, AllianceBernstein L.P. March 21, 2007 Semi-Annual Report This report provides management's discussion of fund performance for AllianceBernstein Mid-Cap Growth Fund (the "Fund") for the semi-annual reporting period ended January 31, 2007. Investment Objective and Policies The Fund's investment objective is long-term growth of capital. The Fund normally invests substantially all of its assets in equity securities that the Adviser believes offer the possibility of above-average long-term growth rates. Under normal circumstances, the Fund invests at least 80% of its net assets in common stocks of mid-capitalization companies. For these purposes, "mid-capitalization companies" are those that, at the time of investment, have market capitalizations within the range of market capitalizations of companies constituting the Russell Midcap Growth Index. The capitalization range of companies in the Russell Midcap Growth Index will change with the markets, and the Fund typically invests in common stocks with market capitalizations of between $1 billion and $15 billion at time of purchase. The Adviser looks for companies whose prospective earnings growth is not fully reflected in current market valuations. Normally, the Fund invests in securities of a smaller number of companies, usually about 40-70 companies. Investment Results The table on page 4 shows the Fund's performance compared to its benchmark, the Russell Midcap Growth Index, for the six- and 12-month periods ended January 31, 2007. During the six-month period ended January 31, 2007, the Fund slightly outperformed its benchmark. The Fund's outperformance relative to the benchmark was attributable to both stock and sector selection. In terms of sector selection, the Fund's significant underweight in the energy sector made the largest contribution to its outperformance. An underweight in the consumer staples sector also contributed positively to performance. The largest negative contributor to relative performance on a sector-level basis came from the Fund's underweight positions in the materials and processing and consumer discretionary sectors. During the 12-month period ended January 31, 2007, the Fund significantly underperformed its benchmark. The Fund's relative underperformance was due primarily to negative stock selection within the consumer discretionary and health care sectors. On a sector-selection basis, the Fund's significant overweight in the technology sector was the largest detractor from relative performance. An underweight in the materials and processing sector also detracted from performance. The most notable positive contribution was attributable to the Fund's significant underweight position in the energy sector, followed by the impact of a modest overweight position in utilities. Market Review and Investment Strategy During the six-month period ended January 31, 2007, the equity markets rose steadily in the United States. Concurrently, oil prices fell from a peak of $77 per barrel to roughly $50 per barrel in mid-January 2007. During ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 1 this time, other measures of inflation, such as the Consumer Price Index (CPI), also declined from higher levels seen earlier in the year. The bond market rallied as well, sending the 10-year U.S. Treasury yield back below 4.50% by December 2006. The 12-month period ended January 31, 2007 was a volatile period in which the markets overcame a sharp correction mid-year to finish with strong returns. The U.S. Federal Reserve (the "Fed") finally ceased its interest-rate hike cycle with a suspension in August, after what was roughly a two-year pattern of 25 basis-point hikes. The equity markets climbed steadily from July 2006 through January 2007, with materials stocks leading the migration higher. The underlying commodities themselves, however, did not exhibit the same price performance. The price of oil reached its peak in early August at $77 per barrel, but had fallen to roughly $50 per barrel by January 2007. As the year progressed, economic activity in the United States moderated with the continued softening of the housing market. Corporate profit growth remained in the double-digits when measured on a year-over-year basis. In terms of investment strategy for the six-month period ended January 31, 2007, the Fund's exposure to financials was trimmed to a weight more aligned with that of the benchmark. Many of the Fund's stocks in this sector had appreciated significantly, and the U.S. Mid Cap Growth Team (the "team") deemed the risk/reward tradeoff less favorable. Another notable change was the increase in consumer discretionary names that benefit from moderating energy prices. The team maintained the Fund's overweight position in the technology sector. This sector thrived, as video content began to proliferate on the Internet and a strong demand for products that upgrade existing internet infrastructure continued. The Fund's underweight position in the energy sector also remained intact, as there continued to be signs of ample supply for crude oil and as indicators of energy demand remained muted. Over the 12-month period ended January 31, 2007, the team maintained the Fund's overweight position in the technology sector for the reasons discussed earlier. The Fund also remained underweight in the energy sector, as the supply/demand imbalance persisted. The Fund's exposure to the consumer discretionary sector decreased modestly over the 12-month period, as the impact of higher energy prices continued to pressure discretionary spending. The Fund's holdings are classified throughout this report according to AllianceBernstein's sector classification scheme (for a visual representation of the Fund's sector breakdown, please see the pie chart on page 8). For readers specifically interested in the Russell sector classification of this Fund, the sector breakdown according to Russell's classification scheme is as follows: technology 34.33%, consumer discretionary 20.04%, health care 14.33%, financial services 12.98%, producer durables 8.78%, utilities 6.48%, auto & transportation 2.45% and cash 0.61%. Discussions above regarding overweight or underweight positions in a specific sector refer to Russell's sector classifications. 2 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND HISTORICAL PERFORMANCE An Important Note About the Value of Historical Performance The performance shown on the following pages represents past performance and does not guarantee future results. Current performance may be lower or higher than the performance information shown. You may obtain performance information current to the most recent month-end by visiting www.alliancebernstein.com. The investment return and principal value of an investment in the Fund will fluctuate, so that your shares, when redeemed, may be worth more or less than their original cost. You should consider the investment objectives, risks, charges and expenses of the Fund carefully before investing. For a free copy of the Fund's prospectus, which contains this and other information, visit our website 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. All fees and expenses related to the operation of the Fund have been deducted. NAV returns do not reflect sales charges; if sales charges were reflected, the Fund's quoted performance would be lower. SEC returns reflect the applicable sales charges for each share class: a 4.25% maximum front-end sales charge for Class A shares; the applicable contingent deferred sales charge for Class B shares (4% year 1, 3% year 2, 2% year 3, 1% year 4); a 1% 1 year contingent deferred sales charge for Class C shares. Returns for the different share classes will vary due to different expenses associated with each class. Performance assumes reinvestment of distributions and does not account for taxes. Benchmark Disclosure The unmanaged Russell Midcap Growth Index does not reflect fees and expenses associated with the active management of a mutual fund portfolio. The Index measures the performance of those Russell mid-cap companies with higher price-to-book ratios and higher forecasted growth values. The stocks are also members of the Russell 1000 Growth Index. An investor cannot invest directly in an index, and its results are not indicative of the performance for any specific investment, including the Fund. A Word About Risk The Fund concentrates its investments in a limited number of issues and an investment in the Fund is therefore subject to greater risk and volatility than investments in a more diversified portfolio. The Fund can invest in foreign securities. Foreign markets can be more volatile than the U.S. market due to increased risks of adverse issuer, political, regulatory, market or economic developments. In addition, fluctuations in the value of investments in foreign currency denominated securities may be magnified by changes in foreign exchange rates. Please note, mid-cap stocks may have limited marketability and may be subject to more abrupt or erratic market movements than large-cap stocks. Growth investing does not guarantee a profit of eliminate risk. The stocks of these companies can have relatively high valuations. Because of these high valuations, an investment in a growth stock can be more risky than an investment in a company with more modest growth expectations. If a growth stock company should fail to meet these high earnings expectations, the price of these stocks can be severely negatively affected. While the Fund invests principally in common stocks and other equity securities, in order to achieve its investment objectives, the Fund may at times use certain types of investment derivatives, such as options, futures, forwards and swaps. These instruments involve risks different from, and in certain cases, greater than, the risks presented by more traditional investments. These risks are fully discussed in the Fund's prospectus. (Historical Performance continued on next page) ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 3 HISTORICAL PERFORMANCE (continued from previous page) Returns THE FUND VS. ITS BENCHMARK ---------------------------- PERIODS ENDED JANUARY 31, 2007 6 Months 12 Months - ------------------------------------------------------------------------------- AllianceBernstein Mid-Cap Growth Fund Class A 17.06% -6.49% Class B 16.37% -7.26% Class C 16.62% -7.10% Advisor Class* 17.06% -6.23% Class R* 16.76% -6.79% Class K* 16.88% -6.63% Class I* 17.16% -6.17% Russell Midcap Growth Index 15.98% 8.20% * Please note that these share classes are for investors purchasing shares through accounts established under certain fee-based programs sponsored and maintained by certain broker-dealers and financial intermediaries, institutional pension plans and/or investment advisory clients of, and certain other persons associated with, the Adviser and its affiliates or the Funds. See Historical Performance and Benchmark disclosures on previous page. (Historical Performance continued on next page) 4 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND HISTORICAL PERFORMANCE (continued from previous page) AVERAGE ANNUAL RETURNS AS OF JANUARY 31, 2007 - -------------------------------------------------------------- NAV Returns SEC Returns Class A Shares 1 Year -6.49% -10.45% 5 Years 9.46% 8.52% 10 Years 5.28% 4.82% Class B Shares 1 Year -7.26% -10.58% 5 Years 8.47% 8.47% 10 Years(a) 4.57% 4.57% Class C Shares 1 Year -7.10% -7.93% 5 Years 8.53% 8.53% 10 Years 4.37% 4.37% Advisor Class Shares+ 1 Year -6.23% -6.23% 5 Years 9.65% 9.65% 10 Years 5.51% 5.51% Class R Shares+ 1 Year -6.79% -6.79% Since Inception* 8.74% 8.74% Class K Shares+ 1 Year -6.63% -6.63% Since Inception* 8.99% 8.99% Class I Shares+ 1 Year -6.17% -6.17% Since Inception* 9.43% 9.43% (a) Assumes conversion of Class B shares into Class A shares after eight years. * Inception date: 3/1/05 for Class R, Class K and Class I shares. + These share classes are offered at net asset value (NAV) to eligible investors and their SEC returns are the same as their NAV returns. Please note that these share classes are for investors purchasing shares through accounts established under certain fee-based programs sponsored and maintained by certain broker-dealers and financial intermediaries, institutional pension plans and/or investment advisory clients of, and certain other persons associated with, the Adviser and its affiliates or the Funds. The inception date for Class R shares, Class K shares and Class I shares is listed above. See Historical Performance disclosures on page 3. (Historical Performance continued on next page) ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 5 HISTORICAL PERFORMANCE (continued from previous page) SEC AVERAGE ANNUAL RETURNS (WITH ANY APPLICABLE SALES CHARGES) AS OF THE MOST RECENT CALENDAR QUARTER-END (DECEMBER 31, 2006) - -------------------------------------------------------------- SEC Returns Class A Shares 1 Year -2.91% 5 Years 6.62% 10 Years 5.35% Class B Shares 1 Year -3.10% 5 Years 6.61% 10 Years(a) 5.07% Class C Shares 1 Year -0.22% 5 Years 6.66% 10 Years 4.88% Advisor Class Shares+ 1 Year 1.65% 5 Years 7.82% 10 Years 6.03% Class R Shares+ 1 Year 1.22% Since Inception* 8.36% Class K Shares+ 1 Year 1.38% Since Inception* 8.63% Class I Shares+ 1 Year 1.85% Since Inception* 8.99% (a) Assumes conversion of Class B shares into Class A shares after eight years. * Inception Date: 3/1/05 for Class R, Class K and Class I Shares. + Please note that these share classes are for investors purchasing shares through accounts established under certain fee-based programs sponsored and maintained by certain broker-dealers and financial intermediaries, institutional pension plans and/or investment advisory clients of, and certain other persons associated with, the Adviser and its affiliates or the Funds. The inception date for Class R shares, Class K shares and Class I shares is listed above. See Historical Performance disclosures on page 3. 6 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND FUND EXPENSES As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments, contingent deferred sales charges on redemptions and (2) ongoing costs, including management fees; distribution (12b-1) fees; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period as indicated below. Actual Expenses The table below provides information about actual account values and actual expenses. You may use the information, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. Hypothetical Example for Comparison Purposes The table below also provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed annual rate of return of 5% before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds by comparing this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), or contingent deferred sales charges on redemptions. Therefore, the hypothetical example is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher. Beginning Ending Account Value Account Value Expenses Paid August 1, 2006 January 31, 2007 During Period* ------------------------------ ------------------------------- --------------------------- Actual Hypothetical Actual Hypothetical** Actual Hypothetical ----------- ---------------- ----------- ----------------- ----------- ------------- Class A $1,000 $1,000 $1,170.60 $1,019.11 $ 6.62 $ 6.16 Class B $1,000 $1,000 $1,163.71 $1,014.97 $11.07 $10.31 Class C $1,000 $1,000 $1,166.21 $1,015.12 $10.92 $10.16 Advisor Class $1,000 $1,000 $1,170.55 $1,020.27 $ 5.36 $ 4.99 Class R $1,000 $1,000 $1,167.61 $1,017.85 $ 7.98 $ 7.43 Class K $1,000 $1,000 $1,168.81 $1,018.90 $ 6.83 $ 6.36 Class I $1,000 $1,000 $1,171.64 $1,021.02 $ 4.54 $ 4.23 * Expenses are equal to the classes' annualized expense ratios of 1.21%, 2.03%, 2.00%, 0.98%, 1.46%, 1.25% and 0.83%, respectively, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). ** Assumes 5% return before expenses. ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 7 PORTFOLIO SUMMARY January 31, 2007 (unaudited) PORTFOLIO STATISTICS Net Assets ($mil): $793.3 SECTOR BREAKDOWN* [ ] 46.8% Technology [PIE CHART OMITTED] [ ] 22.2% Consumer Services [ ] 14.4% Health Care [ ] 13.0% Finance [ ] 1.9% Utilities [ ] 0.9% Consumer Staples [ ] 0.4% Transportation [ ] 0.4% Short-Term TEN LARGEST HOLDINGS** January 31, 2007 (unaudited) Percent of Company U.S. $ Value Net Assets - ------------------------------------------------------------------------------- JDS Uniphase Corp. $ 34,922,925 4.4% Juniper Networks, Inc. 32,223,448 4.1 Level 3 Communications, Inc. 30,925,943 3.9 Advanced Micro Devices, Inc. 30,902,702 3.9 XM Satellite Radio Holdings, Inc.-Class A 29,130,742 3.7 KLA-Tencor Corp. 28,630,396 3.6 Red Hat, Inc. 23,826,041 3.0 Nasdaq Stock Market, Inc. 23,490,253 3.0 Shanda Interactive Entertainment Ltd. (ADR) 23,374,533 2.9 Broadcom Corp.-Class A 23,246,570 2.9 $ 280,673,553 35.4% * All data are as of January 31, 2007. The Fund's sector breakdown is expressed as a percentage of total investments (excluding security lending collateral) and may vary over time. The Fund's sector breakdown is classified in the above pie chart and throughout this report according to AllianceBernstein's sector classification scheme. For readers specifically interested in the Russell sector classification of this Fund, the sector breakdown according to Russell's classification scheme is as follows: technology 34.33%, consumer discretionary 20.04%, health care 14.33%, financial services 12.98%, producer durables 8.78%, utilities 6.48%, auto & transportation 2.45% and cash 0.61%. Please Note: The sector classifications presented herein are based on the sector categorization methodology of the Adviser. These sector classifications are broadly defined. The "Portfolio of Investments" section of the report reflects more specific industry information and is consistent with the investment restrictions discussed in the Fund's prospectus. ** Long-term investments 8 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND PORTFOLIO OF INVESTMENTS January 31, 2007 (unaudited) Company Shares U.S. $ Value - ------------------------------------------------------------------------------- COMMON STOCKS-99.7% Technology-46.9% Communication Equipment-8.5% JDS Uniphase Corp. (a) 1,964,169 $ 34,922,925 Juniper Networks, Inc. (a)(b) 1,778,336 32,223,448 ------------- 67,146,373 Communication Services-6.1% Level 3 Communications, Inc. (a) 4,980,023 30,925,943 NeuStar, Inc.-Class A (a)(b) 568,551 17,562,540 ------------- 48,488,483 Computer Hardware/Storage-1.2% Sun Microsystems, Inc. (a)(b) 1,434,970 9,528,201 Computer Peripherals-1.3% Network Appliance, Inc. (a) 269,545 10,134,892 Miscellaneous-0.6% Trimble Navigation Ltd. (a) 80,820 4,572,796 Semiconductor Capital Equipment-9.4% FormFactor, Inc. (a) 409,502 16,646,256 KLA-Tencor Corp. 581,564 28,630,396 Lam Research Corp. (a) 470,393 21,548,703 Varian Semiconductor Equipment (a) 195,950 8,063,343 ------------- 74,888,698 Semiconductor Components-12.9% Advanced Micro Devices, Inc. (a)(b) 1,987,312 30,902,702 Broadcom Corp.-Class A (a) 728,276 23,246,570 International Rectifier Corp. (a) 265,000 11,058,450 Netlogic Microsystems, Inc. (a)(b) 734,680 17,544,158 Silicon Laboratories, Inc. (a) 619,292 19,885,466 ------------- 102,637,346 Software-6.9% NAVTEQ Corp. (a) 572,375 20,307,865 Red Hat, Inc. (a)(b) 1,048,220 23,826,041 Salesforce.com, Inc. (a) 236,650 10,372,369 ------------- 54,506,275 ------------- 371,903,064 Consumer Services-22.2% Advertising-1.0% Audible, Inc. (a)(b) 1,139,503 8,147,446 Airlines-2.0% Continental Airlines, Inc.-Class B (a)(b) 388,145 16,104,136 ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 9 Company Shares U.S. $ Value - ------------------------------------------------------------------------------- Apparel-1.8% Under Armour, Inc.-Class A (a)(b) 140,350 $ 7,129,780 Urban Outfitters, Inc. (a)(b) 303,670 7,409,548 ------------- 14,539,328 Broadcasting & Cable-3.7% XM Satellite Radio Holdings, Inc.-Class A (a)(b) 2,050,017 29,130,742 Entertainment & Leisure-0.3% Gaylord Entertainment Co. (a) 35,900 1,983,834 Gaming-2.1% Melco PBL Entertainment Macau Ltd. (ADR) (a) 387,094 7,486,398 Wynn Resorts Ltd. (b) 82,700 9,240,898 ------------- 16,727,296 Miscellaneous-7.3% Apollo Group, Inc.-Class A (a) 414,998 18,010,913 Monster Worldwide, Inc. (a) 331,200 16,364,592 Shanda Interactive Entertainment Ltd. (ADR) (a)(b) 1,043,972 23,374,533 ------------- 57,750,038 Printing & Publishing-1.0% VistaPrint, Ltd. (a) 192,045 8,275,219 Restaurants & Lodging-1.3% Chipotle Mexican Grill, Inc.-Class A (a)(b) 178,315 10,595,477 Retail-General Merchandise-1.7% Coldwater Creek, Inc. (a)(b) 708,150 13,206,998 ------------- 176,460,514 Health Care-14.4% Biotechnology-7.2% Affymetrix, Inc. (a)(b) 854,724 21,333,911 Applera Corp.-Celera Group (a) 945,026 14,988,112 Compugen Ltd. (a) 1,658,850 4,993,138 Myriad Genetics, Inc. (a)(b) 99,700 3,563,278 Qiagen Nv (a)(b) 152,800 2,638,856 Vertex Pharmaceuticals, Inc. (a) 269,585 9,529,830 ------------- 57,047,125 Medical Products-4.7% Cerus Corp. (a)(b) 1,906,866 11,059,823 Given Imaging Ltd. (a)(b) 1,019,093 21,441,717 Kinetic Concepts, Inc. (a) 97,350 4,788,646 ------------- 37,290,186 Medical Services-2.5% Cepheid, Inc. (a)(b) 2,386,481 19,736,198 ------------- 114,073,509 10 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND Company Shares U.S. $ Value - ------------------------------------------------------------------------------- Finance-13.0% Brokerage & Money Management-3.8% International Securities Exchange Holdings, Inc.-Class A 381,102 $ 15,789,056 TD Ameritrade Holding Corp. (a)(b) 793,996 14,045,789 ------------- 29,834,845 Financial Services-2.6% Move, Inc. (a) 3,276,158 20,705,319 Miscellaneous-6.6% Chicago Mercantile Exchange Holdings, Inc.-Class A 31,316 17,640,303 Nasdaq Stock Market, Inc. (a)(b) 689,268 23,490,253 NYSE Group, Inc. (a)(b) 117,005 11,698,160 ------------- 52,828,716 ------------- 103,368,880 Utilities-1.9% Electric & Gas Utility-1.9% The AES Corp. (a) 150,600 3,130,974 Itron, Inc. (a)(b) 202,090 11,648,468 ------------- 14,779,442 Consumer Staples-0.9% Miscellaneous-0.9% Panera Bread Co.-Class A (a)(b) 124,390 7,334,034 Transportation-0.4% Air Freight-0.4% UTI Worldwide, Inc. 111,850 3,400,240 Total Common Stocks (cost $661,259,309) 791,319,683 SHORT-TERM INVESTMENTS-0.4% Investment Companies-0.4% AllianceBernstein Fixed-Income Shares, Inc. - Government STIF Portfolio (c) (cost $2,954,988) 2,954,988 2,954,988 Total Investments Before Security Lending Collateral-100.1% (cost $664,214,297) 794,274,671 ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 11 Company Shares U.S. $ Value - ------------------------------------------------------------------------------- INVESTMENT OF CASH COLLATERAL FOR SECURITIES LOANED-24.9% Short-Terms-24.9% UBS Private Money Market Fund, LLC (cost $197,786,916) 197,786,916 $ 197,786,916 Total Investments-125.0% (cost $862,001,213) 992,061,587 Other assets less liabilities-(25.0)% (198,685,433) Net Assets-100.0% $ 793,376,154 (a) Non-income producing security. (b) Represents entire or partial securities out on loan. See Note E for securities lending information. (c) Investment in affiliated money market mutual fund. Glossary: ADR - American Depositary Receipt See notes to financial statements. 12 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND STATEMENT OF ASSETS & LIABILITIES January 31, 2007 (unaudited) Assets Investments in securities, at value Unaffiliated issuers (cost $859,046,225--including investment of cash collateral for securities loaned of $197,786,916) $ 989,106,599(a) Affiliated issuers (cost $ 2,954,988) 2,954,988 Receivable for investment securities sold 7,111,091 Receivable for capital stock sold 1,254,949 Dividends and interest receivable 5,506 Total assets 1,000,433,133 Liabilities Payable for collateral on securities loaned 197,786,916 Payable for investment securities purchased 5,269,611 Payable for capital stock redeemed 2,897,768 Advisory fee payable 484,590 Distribution fee payable 187,177 Transfer Agent fee payable 103,263 Administrative fee payable 25,220 Accrued expenses 302,434 Total liabilities 207,056,979 Net Assets $ 793,376,154 Composition of Net Assets Capital stock, at par $ 1,351,008 Additional paid-in capital 727,832,542 Accumulated net investment loss (3,506,443) Accumulated net realized loss on investment transactions (62,361,327) Net unrealized appreciation of investments 130,060,374 $ 793,376,154 Net Asset Value Per Share--21 billion shares of capital stock authorized, $.01 par value Shares Net Asset Class Net Assets Outstanding Value - ------------------------------------------------------------------------ A $ 635,460,177 106,313,770 $ 5.98* B $ 44,394,173 9,130,624 $ 4.86 C $ 24,839,714 5,114,987 $ 4.86 Advisor $ 73,996,822 12,093,119 $ 6.12 R $ 3,642,533 612,973 $ 5.94 K $ 413,384 69,197 $ 5.97 I $ 10,629,351 1,766,125 $ 6.02 * The maximum offering price per share for Class A shares was $6.25 which reflects a sales charge of 4.25%. (a) Includes securities on loan with a value of $187,050,693 (see Note E). See notes to financial statements. ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 13 STATEMENT OF OPERATIONS Six Months Ended January 31, 2007 (unaudited) Investment Income Securities lending income $ 903,000 Dividends 600,376 Interest Unaffiliated issuers 54,416 Affiliated issuers 9,974 $ 1,567,766 Expenses Management fee 2,874,951 Distribution fee--Class A 737,305 Distribution fee--Class B 244,756 Distribution fee--Class C 133,681 Distribution fee--Class R 6,489 Distribution fee--Class K 474 Transfer agency--Class A 613,517 Transfer agency--Class B 60,636 Transfer agency--Class C 28,214 Transfer agency--Advisor Class 73,448 Transfer agency--Class R 2,169 Transfer agency--Class K 397 Transfer agency--Class I 2,206 Custodian 116,172 Printing 69,670 Registration 47,674 Administrative 42,500 Legal 35,957 Audit 23,545 Directors' fees 17,821 Miscellaneous 7,373 Total expenses 5,138,955 Less: expense offset arrangement (see Note B) (64,746) Net expenses 5,074,209 Net investment loss (3,506,443) Realized and Unrealized Gain (Loss) on Investment Transactions Net realized loss on investment transactions (25,612,473) Net change in unrealized appreciation/depreciation of investments 153,986,275 Net gain on investment transactions 128,373,802 Net Increase in Net Assets from Operations $ 124,867,359 See notes to financial statements. 14 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND STATEMENT OF CHANGES IN NET ASSETS Six Months Ended Year Ended January 31, 2007 July 31, (unaudited) 2006 -------------- -------------- Increase (Decrease) in Net Assets from Operations Net investment loss $ (3,506,443) $ (6,180,460) Net realized gain (loss) on investment transactions (25,612,473) 119,539,281 Net change in unrealized appreciation/depreciation of investments 153,986,275 (159,939,097) Net increase (decrease) in net assets from operations 124,867,359 (46,580,276) Distributions to Shareholders from Net realized gain on investment transactions Class A (59,777,160) (58,655,957) Class B (5,342,530) (6,996,484) Class C (2,901,436) (2,585,689) Advisor Class (7,088,682) (6,024,760) Class R (224,759) (1,092) Class K (36,956) (982) Class I (944,478) (928,477) Capital Stock Transactions Net increase (decrease) (8,266,755) 58,391,000 Total increase (decrease) 40,284,603 (63,382,717) Net Assets Beginning of period 753,091,551 816,474,268 End of period (including accumulated net investment loss of ($3,506,443) and $0, respectively) $ 793,376,154 $ 753,091,551 See notes to financial statements. ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 15 NOTES TO FINANCIAL STATEMENTS January 31, 2007 (unaudited) NOTE A Significant Accounting Policies The AllianceBernstein Mid-Cap Growth Fund, Inc. (the "Fund") is registered under the Investment Company Act of 1940 as a diversified, open-end management investment company. The Fund offers Class A, Class B, Class C, Advisor Class, Class R, Class K and Class I shares. Class A shares are sold with a front-end sales charge of up to 4.25% for purchases not exceeding $1,000,000. With respect to purchases of $1,000,000 or more, Class A shares redeemed within one year of purchase may be subject to a contingent deferred sales charge of 1%. Class B shares are currently sold with a contingent deferred sales charge which declines from 4% to zero depending on the period of time the shares are held. Class B shares will automatically convert to Class A shares eight years after the end of the calendar month of purchase. Class Cshares are subject to a contingent deferred sales charge of 1% on redemptions made within the first year after purchase. Class R and Class K shares are sold without an initial or contingent deferred sales charge. Advisor Class and Class I shares are sold without an initial or contingent deferred sales charge and are not subject to ongoing distribution expenses. All seven classes of shares have identical voting, dividend, liquidation and other rights, except that the classes bear different distribution and transfer agency expenses. Each class 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. The following is a summary of significant accounting policies followed by the Fund. 1. Security Valuation Portfolio securities are valued at their current market value determined on the basis of market quotations or, if market quotations are not readily available or are deemed unreliable, at "fair value" as determined in accordance with procedures established by and under the general supervision of the Fund's Board of Directors. In general, the market value of securities which are readily available and deemed reliable are determined as follows. Securities listed on a national securities exchange (other than securities listed on The NASDAQ Stock Market, Inc. ("NASDAQ")) or on a foreign securities exchange are valued at the last sale price at the close of the exchange or foreign securities exchange. If there has been no sale on such day, the securities are valued at the mean of the closing bid and asked prices on such day. Securities listed on more than one exchange are valued by reference to the principal exchange on which the securities are traded; securities listed only on 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 16 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND 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") 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. (the "Manager") may establish procedures whereby changes in market yields or spreads are used to adjust, on a daily basis, a recently obtained quoted price on a security; and OTC and other derivatives are valued on the basis of a quoted bid price or spread from a major broker/dealer in such security. Securities for which market quotations are not readily available (including restricted securities) or are deemed unreliable are valued at fair value. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, analysis of the issuer's financial statements or other available documents. In addition, the Fund may use fair value pricing for securities primarily traded in non-U.S. markets because, most foreign markets close well before the Fund values its securities at 4:00 p.m., Eastern Time. The earlier close of these foreign markets gives rise to the possibility that significant events, including broad market moves, may have occurred in the interim and may materially affect the value of those securities. To account for this, the Fund may frequently value many of its foreign equity securities using fair value prices based on third party vendor modeling tools to the extent available. 2. Currency Translation Assets and liabilities denominated in foreign currencies and commitments under forward currency exchange contracts are translated into U.S. dollars at the mean of the quoted bid and asked prices of such currencies against the U.S. dollar. Purchases and sales of portfolio securities are translated into U.S. dollars at the rates of exchange prevailing when such securities were acquired or sold. Income and expenses are translated into U.S. dollars at rates of exchange prevailing when accrued. Net realized gain or loss on foreign currency transactions represents foreign exchange gains and losses from sales and maturities of foreign fixed income investments, foreign currency exchange contracts, holding of foreign currencies, ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 17 currency gains or losses realized between the trade and settlement dates on foreign investment transactions, and the difference between the amounts of dividends, interest and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized currency gains and losses from valuing foreign currency denominated assets and liabilities at period end exchange rates are reflected as a component of net unrealized appreciation or depreciation of investments and foreign currency denominated assets and liabilities. 3. Taxes It is the Fund's policy to meet the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its investment company taxable income and net realized gains, if any, to shareholders. Therefore, no provisions for federal income or excise taxes are required. The Fund may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on income and/or capital gains earned or repatriated. Taxes are accrued and applied to net investment income, net realized gains and net unrealized appreciation/depreciation as such income and/or gains are earned. 4. Investment Income and Investment Transactions Dividend income is recorded on the ex-dividend date or as soon as the Fund is informed of the dividend. Interest income is accrued daily. Investment transactions are accounted for on the trade date securities are purchased or sold. Investment gains and losses are determined on the identified cost basis. The Fund amortizes premiums and accretes discounts as adjustments to interest income. 5. Class Allocations All income earned and expenses incurred by the Fund are borne on a pro rata basis by each outstanding class of shares, based on the proportionate interest in the Fund represented by the net assets of such class, except for class specific expenses which are allocated to the respective class. Realized and unrealized gains and losses are allocated among the various share classes based on respective net assets. 6. Dividends and Distributions Dividends and distributions to shareholders, if any, are recorded on the exdividend date. Income dividends and capital gains distributions are determined in accordance with federal tax regulations and may differ from those determined in accordance with U.S. generally accepted accounting principles. To the extent these differences are permanent, such amounts are reclassified within the capital accounts based on their federal tax basis treatment; temporary differences do not require such reclassification. 18 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND NOTE B Management Fee and Other Transactions With Affiliates Under the terms of the management agreement, the Fund pays the Manager a fee at an annual rate of .75% on the first $500 million of average daily net assets, ..65% on the next $500 million of average daily net assets and .55% on average daily net assets in excess of $1 billion. Such fee is accrued daily and paid monthly. Pursuant to the management agreement, the Fund paid $42,500 to the Manager representing the cost of certain legal and accounting services provided to the Fund by the Manager for the six months ended January 31, 2007. The Fund compensates AllianceBernstein Investor Services, Inc. ("ABIS"), a wholly-owned subsidiary of the Manager, under a Transfer Agency Agreement for providing personnel and facilities to perform transfer agency services for the Fund. ABIS may make payments to intermediaries that provide omnibus account services, sub accounting services and/or networking services. Such compensation retained by ABIS amounted to $468,795 for the six months ended January 31, 2007. For the six months ended January 31, 2007, the Fund's expenses were reduced by $64,746 under an expense offset arrangement with ABIS. AllianceBernstein Investments, Inc. (the "Distributor"), a wholly-owned subsidiary of the Manager, serves as the distributor of the Fund's shares. The Distributor has advised the Fund that it has retained front-end sales charges of $4,276 from the sale of Class A shares and received $31,155, $27,253 and $7,577 in contingent deferred sales charges imposed upon redemptions by shareholders of Class A, Class B and Class C shares, respectively, for the six months ended January 31, 2007. The Fund may invest in the AllianceBernstein Fixed-Income Shares, Inc.--Prime STIF Portfolio and the AllianceBernstein Fixed-Income Shares, Inc.--Government STIF Portfolio (collectively, the "STIF Portfolios"), open-end management investment companies managed by the Adviser. The STIF Portfolios are offered as cash management options to mutual funds, trusts, and other accounts managed by the Adviser, and are not available for direct purchase by members of the public. The STIF Portfolios pay no investment management fees. Brokerage commissions paid on investment transactions for the six months ended January 31, 2007 amounted to $1,285,986 of which $0 and $0, respectively, was paid to Sanford C. Bernstein &Co. LLC and Sanford C. Bernstein Limited, affiliates of the Manager. ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 19 NOTE C Distribution Services Agreement The Fund has adopted a Distribution Services Agreement (the "Agreement") pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the Agreement, the Fund pays distribution and servicing fees to the Distributor at an annual rate of up to .30% of the Fund's average daily net assets attributable to Class A shares, 1% of the average daily net assets attributable to both Class B and Class C shares, .50% of the Fund's average daily net assets attributable to Class R shares and .25% of the Fund's average daily net assets attributable to Class K shares. There are no distribution and servicing fees on the Advisor Class and Class I shares. The fees are accrued daily and paid monthly. Payments under the Class A plan are currently limited to .23% of average daily net assets attributable to Class A shares. Prior to April 1, 2006, payments under the Class A plan were limited to .22% of average daily net assets attributable to Class A shares. The Agreement provides that the Distributor will use such payments in their entirety for distribution assistance and promotional activities. The Distributor has incurred expenses in excess of the distribution costs reimbursed by the Fund in the amount of $6,375,095, $2,292,937, $52,235 and $3,932, for Class B, Class C, Class R and Class K shares, respectively. Such costs may be recovered from the Fund in future periods so long as the Agreement is in effect. In accordance with the Agreement, there is no provision for recovery of unreimbursed distribution costs incurred by the Distributor beyond the current fiscal year for Class A shares. The Agreement also provides that the Manager may use its own resources to finance the distribution of the Fund's shares. NOTE D Investment Transactions Purchases and sales of investment securities (excluding short-term investments) for the six months ended January 31, 2007, were as follows: Purchases Sales -------------- -------------- Investment securities (excluding U.S. government securities) $ 360,111,165 $ 448,225,250 U.S. government securities -0- -0- The cost of investments for federal income tax purposes was substantially the same as the cost for financial reporting puposes. Accordingly, gross unrealized appreciation and unrealized depreciation are as follows: Gross unrealized appreciation $ 164,014,389 Gross unrealized depreciation (33,954,015) Net unrealized appreciation $ 130,060,374 20 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND NOTE E Securities Lending The Fund has entered into a securities lending agreement with UBS Securities LLC (the"LendingAgent"). Under the terms of the agreement, the Lending Agent, on behalf of the Fund, administers the lending of portfolio securities to certain broker-dealers. In return, the Fund receives fee income from the lending transactions or it retains a portion of interest on the investment of any cash received as collateral. The Fund also continues to receive dividends or interest on the securities loaned. Unrealized gain or loss on the value of the securities loaned that may occur during the term of the loan will be reflected in the accounts of the Fund. All loans are continuously secured by collateral exceeding the value of the securities loaned. All collateral consists of either cash or U.S. Government securities. The Lending Agent may invest the cash collateral received in an eligible money market vehicle in accordance with the investment restrictions of the Fund. The Lending Agent will indemnify the Fund for any loss resulting from a borrower's failure to return a loaned security when due. As of January 31, 2007, the Fund had loaned securities with a value of $187,050,693 and received cash collateral which was invested in a money market fund valued at $197,786,916 as included in the accompanying portfolio of investments. For the six months ended January 31, 2007, the Fund earned fee income of $903,000 which is included in the accompanying statement of operations. NOTE F Capital Stock Each class consists of 3,000,000,000 authorized shares. Transactions in capital shares for each class were as follows: Shares Amount -------------------------- ------------------------------ Six Months Six Months Ended Year Ended Year January 31, Ended January 31, Ended 2007 July 31, 2007 July 31, (unaudited) 2006 (unaudited) 2006 ------------ ------------ -------------- -------------- Class A Shares sold 5,199,148 16,542,333 $ 31,178,255 $ 110,410,836 Shares issued in reinvestment of distributions 8,445,449 7,517,460 51,263,876 49,314,539 Shares converted from Class B 536,900 1,300,777 3,223,804 8,525,958 Shares redeemed (13,889,530) (20,640,025) (83,428,662) (134,106,218) Net increase 291,967 4,720,545 $ 2,237,273 $ 34,145,115 ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 21 Shares Amount -------------------------- ------------------------------ Six Months Six Months Ended Year Ended Year January 31, Ended January 31, Ended 2007 July 31, 2007 July 31, (unaudited) 2006 (unaudited) 2006 ------------ ------------ -------------- -------------- Class B Shares sold 396,293 1,880,472 $ 1,977,034 $ 10,649,559 Shares issued in reinvestment of distributions 979,948 1,160,609 4,840,941 6,371,746 Shares converted from Class A (652,554) (1,316,495) (3,223,804) (8,525,958) Shares redeemed (2,315,826) (3,754,226) (11,433,588) (19,259,532) Net decrease (1,592,139) (2,029,640) $ (7,839,417) $ (10,764,185) Class C Shares sold 380,410 3,085,785 $ 1,875,052 $ 17,467,907 Shares issued in reinvestment of distributions 496,979 403,673 2,455,078 2,216,164 Shares redeemed (1,490,996) (2,142,850) (7,418,218) (11,693,574) Net increase (decrease) (613,607) 1,346,608 $ (3,088,088) $ 7,990,497 Advisor Class Shares sold 659,109 3,525,633 $ 3,976,898 $ 24,177,409 Shares issued in reinvestment of distributions 1,117,552 888,634 6,939,997 5,936,074 Shares redeemed (2,075,377) (2,466,192) (12,726,545) (16,516,591) Net increase (decrease) (298,716) 1,948,075 $ (1,809,650) $ 13,596,892 Class R Shares sold 343,955 380,005 $ 2,040,087 $ 2,403,231 Shares issued in reinvestment of distributions 37,256 17 224,655 107 Shares redeemed (122,213) (27,714) (719,310) (176,565) Net increase 258,998 352,308 $ 1,545,432 $ 2,226,773 Class K Shares sold 11,478 51,774 $ 68,862 $344,194 Shares issued in reinvestment of distributions 5,939 -0- 35,990 -0- Shares redeemed (1,388) (259) (8,429) (1,532) Net increase 16,029 51,515 $ 96,423 $ 342,662 22 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND Shares Amount -------------------------- ------------------------------ Six Months Six Months Ended Year Ended Year January 31, Ended January 31, Ended 2007 July 31, 2007 July 31, (unaudited) 2006 (unaudited) 2006 ------------ ------------ -------------- -------------- Class I Shares sold 79,473 1,682,173 $ 466,723 $ 10,881,939 Shares issued in reinvestment of distributions 154,832 141,171 944,478 927,495 Shares redeemed (133,635) (159,542) (819,929) (956,188) Net increase 100,670 1,663,802 $ 591,272 $ 10,853,246 NOTE G Risks Involved in Investing in the Fund Foreign Securities Risk--Investing in securities of foreign companies or foreign governments involves special risks which include changes in foreign currency exchange rates and the possibility of future political and economic developments which could adversely affect the value of such securities. Moreover, securities of many foreign companies or foreign governments and their markets may be less liquid and their prices more volatile than those of comparable U.S. companies or of the U.S. government. Indemnification Risk--In the ordinary course of business, the Fund enters into contracts that contain a variety of indemnifications. The Fund's maximum exposure under these arrangements is unknown. However, the Fund has not had prior claims or losses pursuant to these indemnification provisions and expects the risk of loss thereunder to be remote. NOTE H Joint Credit Facility A number of open-end mutual funds managed by the Adviser, including the Fund, participate in a $250 million revolving credit facility (the "Facility") intended to provide short-term financing if necessary, subject to certain restrictions in connection with abnormal redemption activity. Commitment fees related to the Facility are paid by the participating funds and are included in miscellaneous expenses in the statement of operations. The Fund did not utilize the Facility during the six months ended January 31, 2007. ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 23 NOTE I Distributions to Shareholders The tax character of distributions to be paid for the year ending July 31, 2007 will be determined at the end of the current fiscal year. The tax character of distributions paid during the fiscal year ended July 31, 2006 were as follows: 2006 ------------- Distributions paid from: Long-term capital gain $ 75,193,441 Total taxable distributions 75,193,441 Total distributions paid $ 75,193,441 As of July 31, 2006, the components of accumulated earnings/(deficit) on a tax basis were as follows: Undistributed ordinary income $ 48,582,960 Undistributed long term capital gain 27,189,255 Unrealized appreciation/(depreciation) (60,130,969)(a) Total accumulated earnings/(deficit) $ 15,641,246 (a) The difference between book-basis and tax-basis unrealized appreciation/(depreciation) is attributable primarily to the tax deferral of losses on wash sales. NOTE J Legal Proceedings As has been previously reported, the staff of the U.S. Securities and Exchange Commission ("SEC") and the Office of New York Attorney General ("NYAG") have been investigating practices in the mutual fund industry identified as "market timing" and "late trading" of mutual fund shares. Certain other regulatory authorities have also been conducting investigations into these practices within the industry and have requested that the Adviser provide information to them. The Adviser has been cooperating and will continue to cooperate with all of these authorities. On December 18, 2003, the Adviser confirmed that it had reached terms with the SEC and the NYAG for the resolution of regulatory claims relating to the practice of "market timing" mutual fund shares in some of the AllianceBernstein Mutual Funds. The agreement with the SEC is reflected in an Order of the Commission ("SEC Order"). The agreement with the NYAG is memorialized in an Assurance of Discontinuance dated September 1, 2004 ("NYAG Order"). Among the key provisions of these agreements are the following: (i) The Adviser agreed to establish a $250 million fund (the "Reimbursement Fund") to compensate mutual fund shareholders for the adverse 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 24 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND on (i) their aliquot share of losses suffered by the fund due to market timing, and (ii) a proportionate share of advisory fees paid by such fund during the period of such market timing; (ii) The Adviser agreed to reduce the advisory fees it receives from some of the AllianceBernstein long-term, open-end retail funds until December 31, 2008; however, it is not expected that the fund will have its fee reduced; and (iii) The Adviser agreed to implement changes to its governance and compliance procedures. Additionally, the SEC Order and the NYAG Order contemplate that the Adviser's registered investment company clients, including the Fund, will introduce governance and compliance changes. A special committee of the Adviser's Board of Directors, comprised of the members of the Adviser's Audit Committee and the other independent member of the Adviser's Board, directed and oversaw an internal investigation and a comprehensive review of the facts and circumstances relevant to the SEC's and the NYAG's investigations. In addition, the Independent Directors of the Fund ("the Independent Directors") have conducted an investigation of the above-mentioned matters with the advice of an independent economic consultant and independent counsel. 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, 43 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. The plaintiffs in such lawsuits have asserted a variety of theories for recovery including, but not limited to, violations of the Securities Act, the Exchange Act, the Advisers Act, the ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 25 Investment Company Act, the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), certain state securities laws and common law. All state court actions against the Adviser either were voluntarily dismissed or removed to federal court. On February 20, 2004, the Judicial Panel on Multidistrict Litigation transferred all actions to the United States District Court for the District of Maryland (the "Mutual Fund MDL"). 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. On April 21, 2006, the Adviser and attorneys for the plaintiffs in the mutual fund shareholder claims, mutual fund derivative claims, and ERISA claims entered into a confidential memorandum of understanding ("MOU") containing their agreement to settle these claims. The agreement will be documented by a stipulation of settlement and will be submitted for court approval at a later date. The derivative claims brought on behalf of Alliance Holding remain 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 Commissioner") (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 October 19, 2005, the WVAG Complaint was transferred to the Mutual Fund MDL. On August 30, 2005, the West Virginia Securities Commissioner 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 26 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND the NYAG Order. On January 26, 2006, the Adviser, Alliance Holding, and various unaffiliated defendants filed a Petition for Writ of Prohibition and Order Suspending Proceedings in West Virginia state court seeking to vacate the Summary Order and for other relief. The court denied the writ and in September 2006 the Supreme Court of Appeals declined the defendants' petition for appeal. On September 22, 2006, Alliance and Alliance Holding filed an answer and motion to dismiss the Summary Order with the Securities Commissioner. 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 alleged shareholders 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, (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 plaintiffs' claim under Section 36(b) of the Investment Company Act. On January 11, ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 27 2006, the District Court granted defendants' motion for reconsideration and dismissed the remaining Section 36(b) claim. On May 31, 2006 the District Court denied plaintiffs' motion for leave to file an amended complaint. On July 5, 2006, plaintiffs filed a notice of appeal. On October 4, 2006 the appeal was withdrawn by stipulation, with plaintiffs reserving the right to reinstate it at a later date. It is possible that these matters and/or other developments resulting from these matters could result in increased redemptions of the AllianceBernstein Mutual Funds' shares or other adverse consequences to the AllianceBernstein Mutual Funds. This may require the AllianceBernstein Mutual Funds to sell investments held by those funds to provide for sufficient liquidity and could also have an adverse effect on the investment performance of the AllianceBernstein Mutual Funds. However, the Adviser believes that these matters are not likely to have a material adverse effect on its ability to perform advisory services relating to the AllianceBernstein Mutual Funds. NOTE K Recent Accounting Pronouncement On July 13, 2006, the Financial Accounting Standards Board ("FASB") released FASB Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" ("FIN 48"). FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. FIN 48 requires the evaluation of tax positions taken or expected to be taken in the course of preparing a fund's tax returns to determine whether the tax positions are "more-likely-than-not" of being sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold would be recorded in the current period. Adoption of FIN 48 is required for fiscal years beginning after December 15, 2006 and is to be applied to all open tax years as of the effective date. On December 22, 2006, the Securities and Exchange Commission notified the industry that the implementation of FIN 48 by registered investment companies could be delayed until the last business day of the first required financial statement reporting period for fiscal years beginning after December 15, 2006. At this time, management is evaluating the implications of FIN 48 and its impact on the financial statements has not yet been determined. On September 20, 2006, the FASB released Statement of Financial Accounting Standards No. 157 "Fair Value Measurements" ("FAS 157"). FAS 157 establishes an authoritative definition of fair value, sets out a framework for measuring fair value, and requires additional disclosures about fair-value measurements. The application of FAS 157 is required for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. At this time, management is evaluating the implications of FAS 157 and its impact on the financial statements has not yet been determined. 28 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND FINANCIAL HIGHLIGHTS Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period Class A ------------------------------------------------------------------------------------------------------- Six Months Ended December 1, Year Ended January 31, Year Ended July 31, 2002 to November 30, 2007 ------------------------------------- July 31, -------------- (unaudited) 2006 2005 2004 2003(a) 2002 2001 ------------- ------------- -------------- ------------- ------------- ------------- ------------- Net asset value, beginning of period $5.60 $6.45 $5.38 $4.46 $3.70 $4.79 $5.83 Income From Investment Operations Net investment loss(b) (.02) (.04) (.05) (.06)(c) (.03) (.04) (.04) Net realized and unrealized gain (loss) on investment transactions .98 (.22) 1.12 .98 .79 (1.05) (.71) Net increase (decrease) in net asset value from operations .96 (.26) 1.07 .92 .76 (1.09) (.75) Less: Distributions Distributions from net realized gain on investment transactions (.58) (.59) -0- -0- -0- -0- (.29) Net asset value, end of period $5.98 $5.60 $6.45 $5.38 $4.46 $3.70 $4.79 Total Return Total investment return based on net asset value(d) 17.06% (5.32)% 19.89% 20.63% 20.54% (22.76)% (13.64)% Ratios/Supplemental Data Net assets, end of period (000's omitted) $635,460 $593,870 $653,612 $610,854 $540,843 $469,570 $686,445 Ratio to average net assets of: Expenses, net of waivers/ reimbursements 1.22%(e)(f) 1.23%(g) 1.25% 1.25% 1.45%(e) 1.34% 1.22% Expenses, before waivers/ reimbursements 1.22%(e)(f) 1.23%(g) 1.25% 1.26% 1.45%(e) 1.34% 1.22% Net investment loss (.82)%(e) (.64)%(g) (.88)% (1.06)%(c) (1.11)%(e) (1.03)% (.69)% Portfolio turnover rate 45% 135% 88% 135% 75% 183% 226% See footnote summary on page 35. ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 29 Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period Class B -------------------------------------------------------------------------------------------------------- Six Months Ended December 1, Year Ended January 31, Year Ended July 31, 2002 to November 30, 2007 ------------------------------------- July 31, --------------------- (unaudited) 2006 2005 2004 2003(a) 2002 2001 ------------- ------------- -------------- ------------- ------------- ------------- ------------- Net asset value, beginning of period $4.67 $5.51 $4.63 $3.87 $3.23 $4.22 $5.21 Income From Investment Operations Net investment loss(b) (.04) (.08) (.09) (.09)(c) (.03) (.07) (.07) Net realized and unrealized gain (loss) on investment transactions .81 (.17) .97 .85 .67 (.92) (.63) Net increase (decrease) in net asset value from operations .77 (.25) .88 .76 .64 (.99) (.70) Less: Distributions Distributions from net realized gain on investment transactions (.58) (.59) -0- -0- -0- -0- (.29) Net asset value, end of period $4.86 $4.67 $5.51 $4.63 $3.87 $3.23 $4.22 Total Return Total investment return based on net asset value(d) 16.37% (6.08)% 19.01% 19.64% 19.81% (23.46)% (14.34)% Ratios/Supplemental Data Net assets, end of period (000's omitted) $44,394 $50,045 $70,236 $74,567 $53,461 $41,096 $61,816 Ratio to average net assets of: Expenses, net of waivers/ reimbursements 2.05%(e)(f) 2.05%(g) 2.07% 2.09% 2.32%(e) 2.20% 2.08% Expenses, before waivers/ reimbursements 2.05%(e)(f) 2.05%(g) 2.07% 2.10% 2.32%(e) 2.20% 2.08% Net investment loss (1.65)%(e) (1.46)%(g) (1.71)% (1.90)%(c) (1.98)%(e) (1.89)% (1.54)% Portfolio turnover rate 45% 135% 88% 135% 75% 183% 226% See footnote summary on page 35. 30 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period Class C -------------------------------------------------------------------------------------------------------- Six Months Ended December 1, Year Ended January 31, Year Ended July 31, 2002 to November 30, 2007 ------------------------------------------- July 31, -------------------------- (unaudited) 2006 2005 2004 2003(a) 2002 2001 ------------- ------------- -------------- ------------- ------------- ------------- ------------- Net asset value, beginning of period $4.66 $5.50 $4.62 $3.87 $3.22 $4.21 $5.20 Income From Investment Operations Net investment loss(b) (.04) (.08) (.08) (.09)(c) (.03) (.06) (.07) Net realized and unrealized gain (loss) on investment transactions .82 (.17) .96 .84 .68 (.93) (.63) Net increase (decrease) in net asset value from operations .78 (.25) .88 .75 .65 (.99) (.70) Less: Distributions Distributions from net realized gain on investment transactions (.58) (.59) -0- -0- -0- -0- (.29) Net asset value, end of period $4.86 $4.66 $5.50 $4.62 $3.87 $3.22 $4.21 Total Return Total investment return based on net asset value(d) 16.62% (6.11)% 19.05% 19.38% 20.19% (23.52)% (14.37)% Ratios/Supplemental Data Net assets, end of period (000's omitted) $24,840 $26,701 $24,098 $26,017 $14,415 $10,860 $15,391 Ratio to average net assets of: Expenses, net of waivers/ reimbursements 2.01%(e)(f) 2.01%(g) 2.05% 2.06% 2.27%(e) 2.16% 2.04% Expenses, before waivers/ reimbursements 2.01%(e)(f) 2.01%(g) 2.05% 2.07% 2.27%(e) 2.16% 2.04% Net investment loss (1.61)%(e) (1.44)%(g) (1.68)% (1.87)%(c) (1.94)%(e) (1.85)% (1.51)% Portfolio turnover rate 45% 135% 88% 135% 75% 183% 226% See footnote summary on page 35. ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 31 Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period Advisor Class ------------------------------------------------------------------------------------------------------- Six Months Ended December 1, Year Ended January 31, Year Ended July 31, 2002 to November 30, 2007 --------------------------------------------- July 31, -------------------------- (unaudited) 2006 2005 2004 2003(a) 2002 2001 ------------- ------------- -------------- ------------- ------------- ------------ ------------- Net asset value, beginning of period $5.72 $6.56 $5.45 $4.52 $3.74 $4.83 $5.86 Income From Investment Operations Net investment loss(b) (.02) (.03) (.04) (.05)(c) -0-(h) (.03) (.03) Net realized and unrealized gain (loss) on investment transactions 1.00 (.22) 1.15 .98 .78 (1.06) (.71) Net increase (decrease) in net asset value from operations .98 (.25) 1.11 .93 .78 (1.09) (.74) Less: Distributions Distributions from net realized gain on investment transactions (.58) (.59) -0- -0- -0- -0- (.29) Net asset value, end of period $6.12 $5.72 $6.56 $5.45 $4.52 $3.74 $4.83 Total Return Total investment return based on net asset value(d) 17.06% (5.05)% 20.37% 20.58% 20.86% (22.57)% (13.39)% Ratios/Supplemental Data Net assets, end of period (000's omitted) $73,997 $70,832 $68,495 $44,440 $21,251 $13,092 $131,032 Ratio to average net assets of: Expenses, net of waivers/ reimbursements .99%(e)(f) 1.00%(g) 1.04% 1.04% 1.23%(e) 1.08% 1.08% Expenses, before waivers/ reimbursements .99%(e)(f) 1.00%(g) 1.04% 1.05% 1.23%(e) 1.08% 1.08% Net investment loss (.59)%(e) (.42)%(g) (.64)% (.85)%(c) (.89)%(e) (.81)% (.64)% Portfolio turnover rate 45% 135% 88% 135% 75% 183% 226% See footnote summary on page 35. 32 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period Class R ------------------------------------- Six Months Ended Year March 1, January 31, Ended 2005(i) to 2007 July 31, July 31, (unaudited) 2006 2005 ----------- ----------- ----------- Net asset value, beginning of period $5.58 $6.45 $6.05 Income From Investment Operations Net investment loss(b) (.03) (.06) (.02) Net realized and unrealized gain (loss) on investment transactions .97 (.22) .42 Net increase (decrease) in net asset value from operations .94 (.28) .40 Less: Distributions Distributions from net realized gain on investment transactions (.58) (.59) -0- Net asset value, end of period $5.94 $5.58 $6.45 Total Return Total investment return based on net asset value(d) 16.76% (5.64)% 6.61% Ratios/Supplemental Data Net assets, end of period (000's omitted) $3,643 $1,974 $11 Ratio to average net assets of: Expenses 1.47%(e)(f) 1.54%(g) 1.42%(e) Net investment loss (1.07)%(e) (1.08)%(g) (.86)%(e) Portfolio turnover rate 45% 135% 88% See footnote summary on page 35. AllianceBernstein Mid-Cap GROWTH FUND o 33 Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period Class K ------------------------------------ Six Months Ended Year March 1, January 31, Ended 2005(i) to 2007 July 31, July 31, (unaudited) 2006 2005 ----------- ----------- ----------- Net asset value, beginning of period $5.60 $6.45 $6.05 Income From Investment Operations Net investment loss(b) (.03) (.05) (.01) Net realized and unrealized gain (loss) on investment transactions .98 (.21) .41 Net increase (decrease) in net asset value from operations .95 (.26) .40 Less: Distributions Distributions from net realized gain on investment transactions (.58) (.59) -0- Net asset value, end of period $5.97 $5.60 $6.45 Total Return Total investment return based on net asset value(d) 16.88% (5.32)% 6.61% Ratios/Supplemental Data Net assets, end of period (000's omitted) $413 $298 $11 Ratio to average net assets of: Expenses 1.26%(e)(f) 1.25%(g) 1.14%(e) Net investment loss (.85)%(e) (.86)%(g) (.58)%(e) Portfolio turnover rate 45% 135% 88% See footnote summary on page 35. 34 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period Class I ------------------------------------- Six Months Ended Year March 1, January 31, Ended 2005(i) to 2007 July 31, July 31, (unaudited) 2006 2005 ----------- ------------ ----------- Net asset value, beginning of period $5.63 $6.46 $6.05 Income From Investment Operations Net investment loss(b) (.01) (.02) (.01) Net realized and unrealized gain (loss) on investment transactions .98 (.22) .42 Net increase (decrease) in net asset value from operations .97 (.24) .41 Less: Distributions Distributions from net realized gain on investment transactions (.58) (.59) -0- Net asset value, end of period $6.02 $5.63 $6.46 Total Return Total investment return based on net asset value(d) 17.16% (4.97)% 6.78% Ratios/Supplemental Data Net assets, end of period (000's omitted) $10,629 $9,372 $11 Ratio to average net assets of: Expenses .84%(e)(f) .87%(g) .92%(e) Net investment loss (.44)%(e) (.25)%(g) (.35)%(e) Portfolio turnover rate 45% 135% 88% (a) The Fund changed its fiscal year end from November 30 to July 31. (b) Based on average shares outstanding. (c) Net of expenses waived/reimbursed by the Adviser and the Transfer Agent. (d) Total investment return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption on the last day of the period. Initial sales charges or contingent deferred sales charges are not reflected in the calculation of total investment return. Total return does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Total investment return calculated for a period of less than one year is not annualized. (e) Annualized. (f) Ratios reflect expenses grossed up for expense offset arrangement with the Transfer Agent. For the period shown below, the net expense ratios were as follows: Six Months Ended January 31, 2007 (unaudited) ----------------- Class A 1.21% Class B 2.03% Class C 2.00% Advisor Class .98% Class R 1.46% Class K 1.25% Class I .83% (g) The ratio includes expenses attributable to costs of proxy solicitation. (h) Amount is less than $(.005). (i) Commencement of distributions. ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 35 BOARD OF DIRECTORS William H. Foulk, Jr.(1), Chairman Marc O. Mayer, President and Chief Executive Officer David H. Dievler(1) John H. Dobkin(1) Michael J. Downey(1) D. James Guzy(1) Nancy P. Jacklin(1) Marshall C. Turner, Jr.(1) Earl D. Weiner(1) OFFICERS Marc O. Mayer, President Philip L. Kirstein, Senior Vice President and Independent Compliance Officer John H. Fogarty(2), Vice President Amy P. Raskin(2), Vice President Benjamin Ruegsegger(2), Vice President Catherine Wood(2), Vice President Thomas Zottner, Vice President Emilie D. Wrapp, Secretary Joseph J. Mantineo, Treasurer and Chief Financial Officer Vincent S. Noto, Controller Custodian State Street Bank & Trust Company One Lincoln Street Boston, MA 02111 Principal Underwriter AllianceBernstein Investments, Inc. 1345 Avenue of the Americas New York, NY 10105 Transfer Agent AllianceBernstein Investor Services, Inc. P.O. Box 786003 San Antonio, Texas 78278-6003 Toll-Free (800) 221-5672 Independent Registered Public Accounting Firm KPMG LLP 345 Park Avenue New York, NY 10154 Legal Counsel Seward & Kissel LLP One Battery Park Plaza New York, NY 10004 (1) Member of the Audit Committee, the Governance and Nominating Committee and the Independent Directors Committee. (2) The day-to-day management of and investment decisions for the Fund's portfolio are made by the Adviser's U.S. Mid Cap Growth Team. Mses. Wood and Raskin and Messrs. Fogarty, Ruegsegger and Zottner are the investment professionals with the most significant responsibility for the day-to-day management of the Fund's portfolio. 36 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND 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 AllianceBernstein L.P. (the "Adviser") and AllianceBernstein Mid-Cap Growth Fund, Inc. (the "Fund"), prepared by Philip L. Kirstein, the Senior Officer of the Fund for the Directors of the Fund, as required by an August 2004 agreement between the Adviser and the New York State Attorney General (the "NYAG").(2) The Senior Officer's evaluation of the Investment Advisory Agreement is not meant to diminish the responsibility or authority of the Board of Directors of the Fund to perform 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 proposed to be paid by the Fund which was provided to the Directors in connection with their review of the proposed approval of the continuance of the Investment Advisory Agreement. The Senior Officer's evaluation considered the following factors: 1. Management fees charged to institutional and other clients of the Adviser for like services; 2. Management fees charged by other mutual fund companies for like services; 3. Costs to the Adviser and its affiliates of supplying services pursuant to the advisory agreement, excluding any intra-corporate profit; 4. Profit margins of the Adviser and its affiliates from supplying such services; 5. Possible economies of scale as the Fund grows larger; and 6. Nature and quality of the Adviser's services including the performance of the Fund. (1) It should be noted that the information in the fee summary was completed on June 2, 2006 and presented to the Board of Directors on June 14, 2006 in accordance with the Assurance of Discontinuance between the NYAG and the Adviser. It also should be noted that references in the fee summary pertaining to performance and expense ratios refer to Class A shares of the Fund. (2) Future references to the Fund do not include "AllianceBernstein." ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 37 FUND ADVISORY FEES, EXPENSE REIMBURSEMENTS & RATIOS The Adviser proposed that the Fund pay the advisory fee set forth in the table below for receiving the services to be provided pursuant to the Investment Advisory Agreement:(3) Net Assets 02/28/06 Advisory Fee Based on % of Fund (million) Average Daily Net Assets - ------------------------------------------------------------------------------- Mid-Cap Growth Fund, Inc. $923.6 75 bp on 1st $500 million 65 bp on next $500 million 55 bp on the balance The Adviser is reimbursed as specified in the Investment Advisory Agreement for certain clerical, legal, accounting, administrative and other services provided to the Fund. Indicated below is the reimbursement amount, which the Adviser received from the Fund in the Fund's most recently completed fiscal year, expressed in dollars and as a percentage of average daily net assets: As a % of Average Fund Amount Daily Net Assets - ------------------------------------------------------------------------------- Mid-Cap Growth Fund, Inc. $83,335 0.01% Set forth below are the Fund's total expense ratios, calculated from the beginning of the Fund's fiscal year through the Fund's semi-annual period: Fund Total Expense Ratio(4) Fiscal Year End - ------------------------------------------------------------------------------- Mid-Cap Growth Fund, Inc. Class A 1.29% July 31 Class B 2.10% (ratios as of Class C 2.08% January 31, 2006) Class R 1.63% Class K 1.30% Class I 0.91% Adv. Class 1.07% I. MANAGEMENT FEES CHARGED TO INSTITUTIONAL AND OTHER CLIENTS The management fees charged to investment companies which the Adviser manages and sponsors are normally higher than those charged to similar sized institutional accounts, including pension plans and sub-advised investment companies. The fee differential reflects, among other things, different services provided to such clients, and different liabilities assumed. Services provided by the Adviser to the Fund that are not provided to non-investment company clients include providing office space and personnel to serve as Fund Officers, who (3) The Fund's fee schedule was not amended in connection with the Adviser's settlement with the NYAG in December 2003 since the Fund's fee schedule already had lower breakpoints than the NYAG related fee schedule for AllianceBernstein Mutual Funds with a "Growth" category. (4) Annualized. 38 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND among other responsibilities make the certifications required under the Sarbanes-Oxley Act of 2002, and coordinating with and monitoring the Fund's third party service providers such as Fund counsel, auditors, custodians, transfer agents and pricing services. The accounting, administrative, legal and compliance requirements for the Fund are more costly than those for institutional assets due to the greater complexities and time required for investment companies, although as previously noted, a portion of these expenses is reimbursed by the Fund to the Adviser. Also, retail mutual funds managed by the Adviser are widely held. Servicing the Fund's investors is more time consuming and labor intensive compared to institutional clients since the Adviser needs to communicate with a more extensive network of financial intermediaries and shareholders. In addition, managing the cash flow of an investment company may be more difficult than that of a stable pool of assets, such as an institutional account with little cash movement in either direction, particularly, if the Fund is in net redemption and the Adviser is frequently forced to sell securities to raise cash for redemptions. However, managing a fund with positive cash flow may be easier at times than managing a stable pool of assets. Finally, in recent years, investment advisers have been sued by institutional clients and have suffered reputational damage both by the attendant publicity and outcomes other than complete victories. Accordingly, the legal and reputational risks associated with institutional accounts are greater than previously thought, although still not equal to those related to the mutual fund industry. Notwithstanding the Adviser's view that managing an investment company is not comparable to managing other institutional accounts because the services provided are different, it is worth considering information regarding the advisory fees charged to institutional accounts with a substantially similar investment style as the Fund. It should be noted that the Adviser has indicated that with respect to institutional accounts with assets greater than $300 million, it will negotiate a fee schedule. Discounts that are negotiated vary based upon each client relationship. In addition to the AllianceBernstein Institutional fee schedule, set forth below is what would have been the effective advisory fee of the Fund had the AllianceBernstein Institutional fee schedule been applicable to the Fund versus the Fund's advisory fee: Net Assets AllianceBernstein ("AB") Effective Fund 02/28/06 Institutional ("Inst.") AB Inst. Advisory Fund ($MIL) Fee Schedule Adv. Fee Fee(5) - ------------------------------------------------------------------------------- Mid-Cap Growth $923.6 Mid-Cap Growth 0.522% 0.750% Fund, Inc. 90 bp on 1st $25 million 70 bp on next $25 million 60 bp on next $50 million 50 bp on the balance Minimum Account Size: $10 m (5) Fund advisory fee information was provided by Lipper. See Section II for additional discussion. ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 39 The Adviser provides sub-advisory investment services to certain other investment companies managed by other fund families. The Adviser charges the following fee for the sub-advised fund that has a similar investment style as the Fund: Fund Sub-advised Fund Fee Schedule - ------------------------------------------------------------------------------- Mid-Cap Growth Fund, Inc. Client # 1 0.75% on first $10 million 0.625% on next $10 million 0.50% on next $20 million 0.375% on next $20 million 0.25% thereafter It is fair to note that the services the Adviser provides pursuant to sub-advisory agreements are generally confined to the services related to the investment process; in other words, they are not as comprehensive as the services provided to the Fund by the Adviser. II. MANAGEMENT FEES CHARGED BY OTHER MUTUAL FUND COMPANIES FOR LIKE SERVICES. Lipper, Inc. ("Lipper"), an analytical service that is not affiliated with the Adviser, compared the fees charged to the Fund with fees charged to other investment companies for similar services by other investment advisers. Lipper's analysis included the Fund's ranking with respect to the proposed management fee relative to the Lipper group median at the approximate current asset level of the Fund.(6) Effective Lipper Management Group Fund Fee(7) Median Rank - ------------------------------------------------------------------------------- Mid-Cap Growth Fund, Inc. 0.707 0.790 7/15 Lipper also analyzed the total expense ratio of the Fund in comparison to its Lipper Expense Group(8) and Lipper Expense Universe.(9) Lipper describes a Lipper (6) The effective management fee is calculated by Lipper using the Fund's contractual management fee rate at a hypothetical asset level. The hypothetical asset level is based on the combined net assets of all classes of the Fund, rounded up to the next $25 million. Lipper's total expense ratio information is based on the most recent annual report except as otherwise noted. A ranking of "1" means that the Fund has the lowest effective fee rate in the Lipper peer group. (7) The effective management fee rate for the Fund does not reflect the aforementioned payments made by the Fund to the Adviser for certain clerical, legal, accounting, administrative, and other services. (8) Lipper uses the following criteria in screening funds to be included in the 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. A Lipper Expense Group will typically consist of seven to twenty funds. (9) Except for asset (size) comparability, Lipper uses the same criteria for selecting a Lipper Expense Group when selecting a Lipper Expense Universe. Unlike the Lipper Expense Group, the Lipper Expense Universe allows for the same adviser to be represented by more than just one fund. 40 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND Expense Group as a representative sample of comparable funds and a Lipper Expense Universe as a broader group, consisting of all funds in the same investment classification/objective with a similar load type as the subject Fund. The result of that analysis is set forth below: Lipper Lipper Lipper Lipper Expense Group Group Universe Universe Fund Ratio(%)(10) Median(%) Rank Median(%) Rank - ------------------------------------------------------------------------------- Mid-Cap Growth Fund, Inc. 1.251 1.297 6/15 1.398 21/93 Based on this analysis, the Fund has a more favorable ranking on a total expense ratio basis than it does on a management fee basis. III. COSTS TO THE ADVISER AND ITS AFFILIATES OF SUPPLYING SERVICES PURSUANT TO THE MANAGEMENT FEE ARRANGEMENT, EXCLUDING ANY INTRA-CORPORATE PROFIT. A consultant was retained by the Senior Officer to work with the Adviser's personnel to align the Adviser's two profitability reporting systems. The alignment, which now has been completed, allows the Adviser's management and the Directors to receive consistent presentations of the financial results and profitability although the two profitability reporting systems operate independently. See Section IV for additional discussion. IV. PROFIT MARGINS OF THE ADVISER AND ITS AFFILIATES FOR SUPPLYING SUCH SERVICES. The profitability information for the Fund prepared by the Adviser for the Board of Directors was reviewed by the Senior Officer. The Adviser's profitability from providing investment advisory services to the Fund increased during calendar year 2005 relative to 2004. In addition to the Adviser's direct profits from managing the Fund, certain of the Adviser's affiliates have business relationships with the Fund and may earn a profit from providing other services to the Fund. The courts have referred to this type of business opportunity as "fall-out benefits" to the Adviser and indicated that they should be factored into the evaluation of the total relationship between the Fund and the Adviser. Neither case law nor common business practice precludes the Adviser's affiliates from earning a reasonable profit on this type of relationship. These affiliates provide transfer agent, distribution, and brokerage related services to the Fund and receive transfer agent fees, Rule 12b-1 payments, front-end sales loads, contingent deferred sales charges ("CDSC") and commissions for providing brokerage services. In addition, the Adviser benefits from soft dollar arrangements which offset expenses the Adviser would otherwise incur. Additional information regarding distribution related fees can be found in the prospectus of the Fund. (10) The total expense ratio shown is for the Fund's Class A shares. ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 41 AllianceBernstein Investments, Inc. ("ABI"), an affiliate of the Adviser, is the Fund's principal underwriter. ABI and the Adviser have disclosed in the Fund's prospectus that they may make revenue sharing payments from their own resources, in addition to resources derived from sales loads and Rule 12b-1 fees, to firms that sell shares of the Fund. In 2005, ABI paid approximately 0.042% of the average monthly assets of the AllianceBernstein Mutual Funds or approximately $18.0 million for distribution services and educational support (revenue sharing payments). For 2006, it is anticipated, ABI will pay approximately 0.04% of the average monthly assets of the AllianceBernstein Mutual Funds or approximately $17.5 million.(11) After payments to third party intermediaries, ABI retained the following amounts for Class A front-end load sales charges from sales of the Fund's Class A shares during the Fund's most recently completed fiscal year: Fund Amount Received - ------------------------------------------------------------------------------- Mid-Cap Growth Fund, Inc. $13,103 ABI received the amounts set forth below in Rule 12b-1 fees and CDSC for the Fund during the Fund's most recent fiscal year: Fund 12b-1 Fees Received CDSC Received - ------------------------------------------------------------------------------- Mid-Cap Growth Fund, Inc. $2,369,036 $106,942 Fees and reimbursements for out of pocket expenses charged by AllianceBernstein Investor Services, Inc. ("ABIS"), the affiliated transfer agent, are based on the level of the network account and the class of share held by the account. ABIS also receives a fee per shareholder sub-account for each account maintained by an intermediary on an omnibus basis. ABIS' after-tax profitability increased in 2005 in comparison to 2004. ABIS received the following fee from the Fund in the most recent fiscal year: Fund ABIS Fee(12) - ------------------------------------------------------------------------------- Mid-Cap Growth Fund, Inc. $1,140,662 The Fund effected brokerage transactions through the Adviser's affiliate, Sanford C. Bernstein & Co. LLC ("SCB & Co.") and/or its U.K. affiliate, Sanford C. Bernstein Limited ("SCB Ltd."), collectively "SCB," and paid commissions for (11) ABI currently inserts the "Advance" in quarterly account statements and pays the incremental costs associated with the mailing. The incremental cost is less than what an "independent mailing" would cost. (12) The fee disclosed is net of any waivers or any other expense offset arrangement with ABIS. An expense offset is created by the interest earned on the positive cash balance that occurs within the transfer agent account as there is a one day lag with regards to money movement from the shareholder's account to the transfer agent's account and then from the transfer agent's account to the Fund's account. 42 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND such transactions during the Fund's most recently completed fiscal year. The Adviser represented that SCB's profitability from business conducted with the Fund is comparable to the profitability of SCB's dealings with other similar third party clients. In the ordinary course of business, SCB receives and pays liquidity rebates from electronic communications networks ("ECNs") derived from trading for its clients, including the Fund. These credits and charges are not being passed on to any SCB client. The Adviser also receives certain soft dollar benefits from brokers that execute agency trades for the Fund and other clients. These soft dollar benefits reduce the Adviser's cost of doing business and increase its profitability. V. POSSIBLE ECONOMIES OF SCALE The Adviser has indicated that the breakpoints in the fee schedule in the Investment Advisory Agreement reflect a sharing of economies of scale to the extent the breakpoints are reached. Based on some of the professional literature that has considered economies of scale in the mutual fund industry it is thought that to the extent economies of scale exist, they may more often exist across a fund family as opposed to a specific fund. This is because the costs incurred by the Adviser, such as investment research or technology for trading or compliance systems can be spread across a greater asset base as the fund family increases in size. It is also possible that as the level of services required to operate a successful investment company has increased over time, and advisory firms have made such investments in their business to provide improved services, there may be a sharing of economies of scale without a reduction in advisory fees. An independent consultant made a presentation to the Board of Directors and the Senior Officer regarding possible economies of scale or scope in the mutual fund industry. Based on the presentation, it was evident that fund management companies benefit from economies of scale. However, due to lack of cost data, researchers had to infer facts about the costs from the behavior of fund expenses; there was a lack of consensus among researchers as to whether economies of scale were being passed on to the shareholders. It is contemplated that additional work will be performed to determine if the benefits of economies of scale or scope are being passed to shareholders by the Adviser. In the meantime, it is clear that to the extent a fund's assets exceeds its initial breakpoint its shareholders benefit from a lower fee rate. VI. NATURE AND QUALITY OF THE ADVISER'S SERVICES INCLUDING THE PERFORMANCE OF THE FUND. With assets under management of $635 billion as of April 30, 2006, the Adviser has the investment experience to manage and provide non-investment services (described in Section I) to the Fund. ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 43 The information below, prepared by Lipper, shows the 1, 3, 5 and 10 year performance ranking of the Fund(13) relative to its Lipper Performance Group(14) and Lipper Performance Universe(15) for the periods ended December 31, 2005: Mid-Cap Growth Fund, Inc. Group Universe - ------------------------------------------------------------- 1 year 12/15 83/116 3 year 1/14 1/101 5 year 2/12 19/81 10 year 5/8 25/39 Set forth below are the 1, 3, 5, 10 year and since inception performance returns of the Fund (in bold)(16) versus its benchmark:(17) Periods Ending December 31, 2005 Annualized Performance - ------------------------------------------------------------------------------- 1 3 5 10 Since Fund Year Year Year Year Inception - ------------------------------------------------------------------------------- Mid-Cap Growth Fund, Inc. 6.71 28.29 3.08 7.38 10.69 Russell Mid-Cap Growth Index 12.10 22.70 1.38 9.27 N/A CONCLUSION: Based on the factors discussed above the Senior Officer's conclusion is that the proposed fee for the Fund is reasonable and within the range of what would have been negotiated at arms-length in light of all the surrounding circumstances. This conclusion in respect of the Fund is based on an evaluation of all of these factors and no single factor was dispositive. Dated: July 17, 2006 (13) The performance rankings are for the Class A shares of the Fund. (14) The Lipper Performance Group is identical to the Lipper Expense Group. (15) For the Lipper Performance Universe, Lipper included the Fund and all of the funds of the same Lipper Classification/Objective and load type, regardless of asset size. (16) The performance returns shown are for the Class A shares of the Fund. (17) The Adviser provided Fund and benchmark performance return information for periods through December 31, 2005 in order to maintain consistency with Lipper's performance rankings in the analysis. 44 o ALLIANCEBERNSTEIN MID-CAP GROWTH FUND THIS PAGE IS NOT PART OF THE SHAREHOLDER REPORT OR THE FINANCIAL STATEMENTS 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 Small/Mid-Cap Value Fund Utility Income Fund Value Fund Global & International Global Real Estate Investment Fund* 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 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 AllianceBernstein Global High Income Fund* AllianceBernstein Income 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 - -------------------------------------------- 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. You should consider the investment objectives, risks, charges and expenses of any AllianceBernstein fund/portfolio carefully before investing. For free copies of our prospectuses, which contain this and other information, visit us online at www.alliancebernstein.com or contact your financial advisor. Please read the prospectus carefully before investing. * Prior to January 26, 2007, AllianceBernstein Income Fund was named ACM Income Fund and AllianceBernstein Global High Income Fund was named Alliance World Dollar Government Fund II. Prior to March 1, 2007, Global Real Estate Investment Fund was named Real Estate Investment Fund. ** An investment in the Fund is not a deposit in a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund. ALLIANCEBERNSTEIN MID-CAP GROWTH FUND o 45 ALLIANCEBERNSTEIN MID-CAP GROWTH FUND 1345 Avenue of the Americas New York, NY 10105 (800) 221-5672 [LOGO] ALLIANCEBERNSTEIN INVESTMENTS MCG-0152-0107 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-3(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 Mid-Cap Growth Fund, Inc. By: /s/ Marc O. Mayer ----------------- Marc O. Mayer President Date: March 30, 2007 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By: /s/ Marc O. Mayer ----------------- Marc O. Mayer President Date: March 30, 2007 By: /s/ Joseph J. Mantineo ---------------------- Joseph J. Mantineo Treasurer and Chief Financial Officer Date: March 30, 2007