ALLIANCE GROWTH & INCOME FUND
ANNUAL REPORT
OCTOBER 31, 1999
ALLIANCE CAPITAL
LETTER TO SHAREHOLDERS ALLIANCE GROWTH & INCOME FUND
_______________________________________________________________________________
December 28, 1999
Dear Shareholder:
This annual report provides you with an update of the performance and market
activity of Alliance Growth & Income Fund (the "Fund") for the period ended
October 31, 1999.
INVESTMENT RESULTS
We have recently changed the Fund's benchmark from the Standard & Poor's 500
Stock Index ("S&P 500") to the Russell 1000 Value Index, as the latter more
closely reflects the style and composition of the Fund's portfolio. For
comparative purposes, the S&P 500's returns will be included in this report,
but will be removed from all future reports.
The Fund underperformed the S&P 500 over the six- and 12-month periods ended
October 31, 1999. This was a period during which the value style of investing
practiced by the Fund remained out of favor, as can be seen by comparing the
results of the more growth-oriented S&P 500 with the Russell 1000 Value Index.
The Fund suffered versus the S&P 500 primarily due to its relative
underweighting in large technology stocks. Technology comprised more than 23%
of the S&P 500 at the end of October 1999, versus comprising about 15% of the
Fund. While technology stocks are driving the market, we believe that their
lofty valuations make many of them inappropriate for a fund oriented toward
less expensive securities.
The Fund did, however, exceed the returns of its benchmark, the Russell 1000
Value Index, as well as its peer group, as represented by the Lipper Multi-Cap
Value Funds Average. Compared to the S&P 500's heavy technology weighting,
technology makes up only about 4% of the Russell 1000 Value Index. The Fund's
higher technology weighting, combined with good performance from its bank
stocks, helped the Fund's results relative to the Russell 1000 Value Index. The
Fund's holdings in tobacco and hospital corporations were uniformly negative
for returns.
INVESTMENT RESULTS*
Periods Ended October 31, 1999
TOTAL RETURNS
6 MONTHS 12 MONTHS
---------- -----------
ALLIANCE GROWTH & INCOME FUND
Class A -2.11% 20.48%
Class B -2.45% 19.56%
Class C -2.45% 19.56%
RUSSELL 1000 VALUE INDEX -2.91% 16.52%
S&P 500 2.74% 25.66%
LIPPER MULTI-CAP VALUE FUNDS AVERAGE -3.58% 11.72%
* THE FUND'S INVESTMENT RESULTS ARE TOTAL RETURNS FOR THE PERIOD AND ARE
BASED ON THE NET ASSET VALUE OF EACH CLASS OF SHARES AS OF OCTOBER 31, 1999.
ALL FEES AND EXPENSES RELATED TO THE OPERATION OF THE FUND HAVE BEEN DEDUCTED,
BUT NO ADJUSTMENT HAS BEEN MADE FOR SALES CHARGES THAT MAY APPLY WHEN SHARES
ARE PURCHASED OR REDEEMED. TOTAL RETURN FOR ADVISOR CLASS SHARES WILL DIFFER
DUE TO DIFFERENT EXPENSES ASSOCIATED WITH THAT CLASS. PAST PERFORMANCE IS NO
GUARANTEE OF FUTURE RESULTS.
THE UNMANAGED RUSSELL 1000 VALUE INDEX CONTAINS THOSE SECURITIES IN THE
RUSSELL 1000 STOCK INDEX WITH A LESS THAN AVERAGE GROWTH ORIENTATION. THE
UNMANAGED RUSSELL 1000 STOCK INDEX IS COMPRISED OF 1000 OF THE LARGEST
CAPITALIZED COMPANIES THAT ARE TRADED IN THE UNITED STATES. THE UNMANAGED S&P
500 INCLUDES 500 U.S. STOCKS AND IS A COMMON MEASURE OF THE PERFORMANCE OF THE
OVERALL U.S. STOCK MARKET. THE UNMANAGED LIPPER MULTI-CAP VALUE FUNDS AVERAGE
REFLECTS THE PERFORMANCE OF 510 FUNDS FOR THE SIX-MONTH PERIOD AND 478 FUNDS
FOR THE 12-MONTH PERIOD ENDED OCTOBER 31, 1999. THESE FUNDS HAVE GENERALLY
SIMILAR INVESTMENT OBJECTIVES TO ALLIANCE GROWTH & INCOME FUND, ALTHOUGH THE
INVESTMENT POLICIES OF SOME FUNDS INCLUDED IN THE AVERAGE MAY VARY. AN INVESTOR
CANNOT INVEST DIRECTLY IN AN INDEX OR AVERAGE.
ADDITIONAL INVESTMENT RESULTS APPEAR ON PAGE 3.
1
ALLIANCE GROWTH & INCOME FUND
_______________________________________________________________________________
INVESTMENT DISCUSSION
The past year has continued the trend of growth stock domination that began
five years ago at the end of 1994. Through the end of October 1999, the Russell
1000 Growth Index has exhibited a trailing 12-month return of 34.3% compared to
the Russell 1000 Value Index's appreciation of 16.5%. Value funds, such as the
Alliance Growth & Income Fund, have generally seen their performance negatively
affected by this discrepancy.
We have been waiting for the stock market to broaden into value equities for
quite some time and believe that macroeconomic conditions continue to favor
such an occurrence. There are two primary reasons why we believe this is true.
First, the global economy has reaccelerated in 1999 and is forecast to continue
growing in 2000. When growth is slow, as it was in 1998, investors bid up the
premium that growth stocks command due to the stocks' scarcity value. But when
economic growth returns, the number of attractive investments broadens, and
economically cyclical stocks become desired investments. Second, the
disinflationary trend in the domestic economy has begun to reverse and mild
inflationary circumstances have returned. Disinflation helps growth stocks
because their future results, which make up a large portion of their valuation,
are discounted at smaller increments. This process is expected to reverse with
any impending pick up of inflation. We anticipate that value stocks will find
favor once again as global growth persists.
INVESTMENT OUTLOOK
Your Fund has been consistent in its portfolio characteristics of maintaining a
defensive dividend yield and price-to-earnings ratio, a fully invested posture,
and a high degree of sector and industry diversification. We continue to seek
the stocks of companies with reasonable valuation combined with growth
potential. Finally, we rely on Alliance's internal research capabilities in
selecting stocks that we expect to deliver superior performance.
Thank you for your continued interest and investment in Alliance Growth &
Income Fund. We look forward to reporting to you on market activity and the
Fund's investment results in the future.
Sincerely,
John D. Carifa
Chairman and President
Paul Rissman
Senior Vice President
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, GUARANTEED OR ENDORSED
BY, ANY BANK; FURTHER, SUCH SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY.
SHARES OF THE FUND INVOLVE INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF
PRINCIPAL.
2
INVESTMENT OBJECTIVE AND POLICIES ALLIANCE GROWTH & INCOME FUND
_______________________________________________________________________________
Alliance Growth & Income Fund seeks to provide income and appreciation. The
Fund invests principally in a diversified portfolio of dividend-paying common
stocks of good quality, and, under certain market conditions, other types of
securities, including bonds, convertible bonds, and preferred stocks.
INVESTMENT RESULTS
_______________________________________________________________________________
NAV AND SEC AVERAGE ANNUAL TOTAL RETURNS AS OF OCTOBER 31, 1999
CLASS A SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
One Year 20.48% 15.44%
Five Years 22.69% 21.67%
Ten Years 15.10% 14.61%
CLASS B SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
One Year 19.56% 15.56%
Five Years 21.77% 21.77%
Since Inception* (a) 15.18% 15.18%
CLASS C SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
One Year 19.56% 18.56%
Five Years 21.76% 21.76%
Since Inception* 17.44% 17.44%
SEC AVERAGE ANNUAL TOTAL RETURNS AS OF THE MOST RECENT QUARTER-END
(SEPTEMBER 30, 1999)
CLASS A CLASS B CLASS C
------------ ------------ ------------
1 Year 21.66% 22.22% 24.81%
5 Years 21.03% 21.03% 21.02%
10 Years 13.75% n/a n/a
Since Inception* 10.97% 14.71% (a) 16.83%
The Fund's investment results represent average annual total returns. The NAV
and SEC returns reflect reinvestment of dividends and/or capital gains
distributions in additional shares without (NAV) and with (SEC) the effect of
the 4.25% maximum front-end sales charge for Class A or applicable contingent
deferred sales charge for Class B (4% year 1, 3% year 2, 2% year 3, 1% year 4);
and for Class C shares (1% year 1). Returns for Class A shares do not reflect
the imposition of the 1 year 1% contingent deferred sales charge for accounts
over $1,000,000. Total return for Advisor Class shares will differ due to
different expenses associated with that class.
Past performance does not guarantee future results. Investment return and
principal value will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost.
* Inception: 7/1/32, Class A; 2/8/91, Class B; 5/3/93, Class C.
n/a: not applicable.
(a) Assumes conversion of Class B shares into Class A shares after 8 years.
3
ALLIANCE GROWTH & INCOME FUND
_______________________________________________________________________________
ALLIANCE GROWTH &INCOME FUND
GROWTH OF A $10,000 INVESTMENT
10/31/89 TO 10/31/99
$58,000
$48,000
$38,000
$28,000
$18,000
$10,000
$8,000
S&P 500 STOCK INDEX: $51,454
RUSSELL 1000 VALUE INDEX: $44,191
ALLIANCE GROWTH & INCOME FUND CLASS A: $39,107
LIPPER MULTI-CAP VALUE FUNDS AVERAGE: $34,892
10/31/89 10/31/90 10/31/91 10/31/92 10/31/93 10/31/94 10/31/95
10/31/96 10/31/97 10/31/98 10/31/99
This chart illustrates the total value of an assumed $10,000 investment in
Alliance Growth &Income Fund Class A shares (from 10/31/89 to 10/31/99) as
compared to the performance of an appropriate broad-based index. The chart
reflects the deduction of the maximum 4.25% sales charge from the initial
$10,000 investment in the Fund and assumes the reinvestment of dividends and
capital gains. Performance for Class B, Class C and Advisor Class shares will
vary from the results shown above due to differences in expenses charged to
those classes. Past performance is not indicative of future results, and is not
representative of future gain or loss in capital value or dividend income.
The unmanaged Standard &Poor's 500 Stock Index includes 500 U.S. stocks and is
a common measure of the performance of the overall U.S. stock market.
The unmanaged Russell 1000Value Index contains those securities in the Russell
1000 Stock Index with a less-than-average growth orientation. The unmanaged
Russell 1000 Stock Index is comprised of 1000 of the largest capitalized
companies that are traded in the United States.
The Lipper Multi-Cap Value Funds Average reflects performance of 87 funds
(based on the number of funds in the average from 10/31/89 to 10/31/99). These
funds have generally similar investment objectives to Alliance Growth &Income
Fund, although the investment policies of some funds included in the average
may vary.
When comparing Alliance Growth &Income Fund to the index and average shown
above, you should note that no charges or expenses are reflected in the
performance of the index. Lipper results include fees and expenses.
Alliance Growth &Income Fund
Standard &Poor's 500 StockIndex
Russell 1000Value Index
Lipper Multi-Cap Value Funds Average
4
TEN LARGEST HOLDINGS
OCTOBER 31, 1999 ALLIANCE GROWTH & INCOME FUND
_______________________________________________________________________________
PERCENT OF
COMPANY VALUE NET ASSETS
- -------------------------------------------------------------------------------
Household International, Inc. $ 160,650,000 4.1%
Bank of America Corp. 146,453,125 3.8
Tyco International Ltd. 122,208,750 3.1
Tenet Healthcare Corp. 115,071,944 3.0
Citigroup, Inc. 110,212,031 2.8
First Data Corp. 102,796,875 2.6
USX-Marathon Group 98,151,250 2.5
MediaOne Group, Inc. 97,065,700 2.5
Pepsi Bottling Group, Inc. 95,120,625 2.4
Schering-Plough Corp. 89,694,000 2.3
$1,137,424,300 29.1%
MAJOR PORTFOLIO CHANGES
SIX MONTHS ENDED OCTOBER 31, 1999
_______________________________________________________________________________
SHARES*
- -------------------------------------------------------------------------------
HOLDINGS
PURCHASES BOUGHT 10/31/99
- -------------------------------------------------------------------------------
Bank of America Corp. 1,145,000 2,275,000
BellSouth Corp. 1,560,000 1,560,000
First Data Corp. 1,500,000 2,250,000
Kroger Co. 3,295,700 3,701,000
Lyondell Chemical Co. 3,840,000 3,840,000
MediaOne Group, Inc. 897,600 1,217,600
Motorola, Inc. 600,000 600,000
Pepsi Bottling Group, Inc. 4,110,000 5,230,000
Schering-Plough Corp. 1,812,000 1,812,000
Tyco International Ltd. 2,210,000 3,060,000
HOLDINGS
SALES SOLD 10/31/99
- -------------------------------------------------------------------------------
Allied-Signal, Inc. 500,000 101,000
AMFM, Inc. 272,000 -0-
Apache Corp. 710,200 -0-
AT&T Corp. 395,000 956,923
BJ Services Co. 940,000 -0-
Bristol-Myers Squibb Co. 743,000 913,000
Electronic Data Systems Corp. 550,000 550,300
Harley-Davidson, Inc. 500,000 -0-
Procter & Gamble Co. 550,000 -0-
Tellabs, Inc. 100,000 250,000
* Adjusted for stock splits.
5
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1999 ALLIANCE GROWTH & INCOME FUND
_______________________________________________________________________________
COMPANY SHARES VALUE
- -------------------------------------------------------------------------
COMMON & PREFERRED STOCKS-93.9%
FINANCE-19.8%
BANKING - MONEY CENTERS-4.6%
Chase Manhattan Corp. 811,000 $ 70,861,125
Citigroup, Inc. 2,036,250 110,212,031
------------
181,073,156
BANKING - REGIONAL-5.9%
Bank One Corp. 1,039,000 39,027,437
Bank of America Corp. 2,275,000 146,453,125
Wells Fargo Co. 911,000 43,614,125
------------
229,094,687
BROKERAGE & MONEY MANAGEMENT-0.9%
Merrill Lynch & Co., Inc. 440,000 34,540,000
INSURANCE-1.4%
PMI Group, Inc. 528,820 27,432,538
The Hartford Financial Services
Group, Inc. 220,000 11,398,750
Travelers Property Casualty
Corp. C1.A 391,900 14,108,400
------------
52,939,688
REAL ESTATE-1.4%
AvalonBay Communities, Inc. 299,957 9,692,361
Crescent Real Estate Equities Co. 168,700 2,815,181
Equity Office Properties Trust 907,700 20,082,862
MeriStar Hospitality Corp. 600,000 9,637,500
ProLogis Trust 400,000 7,725,000
Public Storage, Inc. 205,600 4,960,100
Regency Realty Corp. 19,200 380,400
------------
55,293,404
MISCELLANEOUS-5.6%
Associates First Capital Corp. C1.A 575,000 20,987,500
Household International, Inc. 3,600,000 160,650,000
MBNA Corp. 765,000 21,133,125
Newcourt Credit Group, Inc. (Canada) 324,700 5,337,256
The CIT Group, Inc. C1.A 520,100 12,417,388
------------
220,525,269
------------
773,466,204
TECHNOLOGY-14.3%
COMMUNICATION EQUIPMENT-3.3%
Morgan Stanley Group, Inc. Reset PERQS,
7.0% due 5/22/00 (a) 19,600 38,953,334
Motorola, Inc. 600,000 58,462,500
Nortel Networks Corp. 276,600 17,131,912
Tellabs, Inc. (b) 250,000 15,804,688
------------
130,352,434
COMPUTER HARDWARE-0.3%
Compaq Computer Corp. 545,600 10,366,400
COMPUTER PERIPHERALS-0.4%
Seagate Technology, Inc. (b) 496,000 14,601,000
COMPUTER SERVICES-5.1%
Computer Sciences Corp. (b) 958,000 65,802,625
Electronic Data Systems Corp. 550,300 32,192,550
First Data Corp. 2,250,000 102,796,875
------------
200,792,050
COMPUTER SOFTWARE-0.6%
Oracle Corp. (b) 510,000 24,272,812
SEMI-CONDUCTOR COMPONENTS-1.6%
Altera Corp. (b) 730,400 35,515,700
Atmel Corp. (b) 704,100 27,173,859
------------
62,689,559
6
ALLIANCE GROWTH & INCOME FUND
_______________________________________________________________________________
COMPANY SHARES VALUE
- -------------------------------------------------------------------------
MISCELLANEOUS-3.0%
Sanmina Corp. (b) 646,900 $ 58,241,216
Solectron Corp. (b) 760,200 57,205,050
------------
115,446,266
------------
558,520,521
CONSUMER SERVICES-11.4%
AIRLINES-1.2%
Continental Airlines, Inc. CI. B (b) 415,000 16,807,500
Delta Air Lines, Inc. 558,000 30,376,125
------------
47,183,625
BROADCASTING & CABLE-3.6%
A.H. Belo Corp. Series A 988,700 20,144,763
Cablevision Systems Corp. Cl.A (b) 363,286 24,544,510
MediaOne Group, Inc. (b) 897,600 63,785,700
Media One Group, Inc.
Premium Income Exchangeable Notes
6.25%, due 8/15/01 (c) 320,000 33,280,000
------------
141,754,973
ENTERTAINMENT & LEISURE-2.2%
Carnival Corp. 959,300 42,688,850
Royal Caribbean Cruises, Ltd. 359,500 19,075,969
7.25% preferred stock Series A 147,000 23,520,000
------------
85,284,819
PRINTING & PUBLISHING-1.4%
Gannett Co., Inc. 713,000 54,990,125
RETAIL-GENERAL MERCHANDISE-3.0%
Dayton Hudson Corp. 304,000 19,646,000
Saks, Inc. (b) 3,850,300 66,177,031
Tommy Hilfiger Corp. (b) 1,067,400 30,154,050
------------
115,977,081
------------
445,190,623
HEALTH CARE-10.4%
DRUGS-4.1%
Bristol-Myers Squibb Co. 913,000 70,129,813
Schering-Plough Corp. 1,812,000 89,694,000
------------
159,823,813
MEDICAL PRODUCTS-1.5%
Abbott Laboratories 1,450,000 58,543,750
MEDICAL SERVICES-4.8%
Columbia HCA/Healthcare Corp. 1,500,000 36,187,500
Health Management Associates, Inc.
Cl. A (b) 4,079,500 36,205,562
Tenet Healthcare Corp. (b) 5,920,100 115,071,944
------------
187,465,006
------------
405,832,569
CONSUMER STAPLES-10.1%
BEVERAGES-3.1%
Coca-Cola Enterprises, Inc. 1,030,000 26,329,375
Pepsi Bottling Group, Inc. 5,230,000 95,120,625
------------
121,450,000
COSMETICS-0.9%
Avon Products, Inc. 1,110,000 35,797,500
FOOD-1.7%
General Mills, Inc. 168,000 14,647,500
Heinz (H.J.) Co. 270,000 12,892,500
Nabisco Group Holdings Corp. 1,933,900 24,778,094
Tyson Foods, Inc. C1.A 800,000 12,200,000
------------
64,518,094
HOUSEHOLD PRODUCTS-1.7%
Colgate-Palmolive Co. 1,100,000 66,550,000
RETAIL-FOOD & DRUG-2.0%
Kroger Co. (b) 3,701,000 77,027,063
TOBACCO-0.7%
Philip Morris Cos., Inc. 1,097,250 27,636,984
------------
392,979,641
7
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE GROWTH & INCOME FUND
_______________________________________________________________________________
COMPANY SHARES VALUE
- -------------------------------------------------------------------------
ENERGY-9.4%
DOMESTIC INTEGRATED-4.4%
Atlantic Richfield Co. 400,000 $ 37,275,000
Kerr-McGee Corp. 679,300 36,512,375
USX-Marathon Group 3,370,000 98,151,250
------------
171,938,625
DOMESTIC PRODUCERS-1.7%
Murphy Oil Corp. 306,500 17,183,156
Shell Transport & Trading Co.
(ADR) (United Kingdom) 1,100,000 50,462,500
------------
67,645,656
INTERNATIONAL-0.6%
Repsol S.A. (ADR) (Spain) 1,196,800 24,534,400
OIL SERVICE-2.2%
Noble Drilling Corp. (b) 2,969,400 65,883,563
Transocean Offshore, Inc. 730,000 19,846,875
------------
85,730,438
MISCELLANEOUS-0.5%
AES Corp. (b) 316,300 17,851,181
------------
367,700,300
UTILITIES-8.5%
ELECTRIC & GAS UTILITY-5.0%
CMS Energy Corp. 620,000 22,862,500
Consolidated Edison, Inc. 1,490,300 56,910,831
Duke Power Energy Corp. 630,000 35,595,000
FPL Group, Inc. 918,000 46,186,875
GPU, Inc. 530,000 17,986,875
Pinnacle West Capital Corp. 415,000 15,303,125
------------
194,845,206
TELEPHONE UTILITY-3.5%
AT&T Corp. 956,923 44,736,150
BellSouth Corp. 1,560,000 70,200,000
MCI WorldCom, Inc. (b) 251,950 21,612,586
------------
136,548,736
------------
331,393,942
MULTI-INDUSTRY
COMPANIES-4.6%
Honeywell, Inc. 255,000 26,886,562
Tyco International Ltd. 3,060,000 122,208,750
U.S. Industries, Inc. 2,069,200 30,650,025
------------
179,745,337
BASIC INDUSTRY-2.6%
CHEMICALS-2.6%
Dow Chemical Co. 180,000 21,285,000
Eastman Chemical Co. 350,000 13,496,875
Lyondell Chemical Co. 3,840,000 46,560,000
Solutia, Inc. 1,075,000 18,476,563
------------
99,818,438
CAPITAL GOODS-1.3%
MISCELLANEOUS-1.3%
Allied-Signal, Inc. 101,000 5,750,688
United Technologies Corp. 748,200 45,266,100
------------
51,016,788
CONSUMER MANUFACTURING-1.0%
BUILDING & RELATED-1.0%
Masco Corp. 1,270,000 38,735,000
TRANSPORTATION-0.5%
RAILROAD-0.5%
Union Pacific Capital Trust
6.25%, 4/01/28
Convertible preferred stock (d) 444,000 21,478,500
Total Common & Preferred Stocks
(cost $3,310,867,078) 3,665,877,863
------------
8
ALLIANCE GROWTH & INCOME FUND
_______________________________________________________________________________
PRINCIPAL
AMOUNT
COMPANY (000) VALUE
- -------------------------------------------------------------------------
SHORT-TERM INVESTMENTS-6.0%
COMMERCIAL PAPER-3.1%
Prudential Funding Corp.
5.18%, 11/01/99 $ 30,000 $ 30,000,000
5.22%, 11/15/99 45,000 44,908,650
5.25%, 11/01/99 45,000 45,000,000
Total Commercial Paper
(cost $119,908,650) 119,908,650
TIME DEPOSIT-2.9%
State Street Euro Dollar
4.875%, 11/01/99
(cost $115,939,000) 115,939 115,939,000
Total Short-Term Investments
(cost $235,847,650) 235,847,650
TOTAL INVESTMENTS-99.9%
(cost $3,546,714,728) $3,901,725,513
Other assets less liabilities-0.1% 2,117,685
NET ASSETS-100% $3,903,843,198
(a) Reset performance equity-linked redemption quarterly pay security. Based
on Nokia 7.00%, 5/22/00 convertible bond.
(b) Non-income producing security.
(c) Premium Income Exchangeable note which is convertible to Vodafone Airtouch
PLC until 8/15/01 at a rate of 2.0253 shares of Vodafone Airtouch for every
share of the exchangeable note.
(d) Security is exempt from registration under Rule 144A of the Securities Act
of 1933. This security may be resold in transactions exempt from registration,
normally to qualified institutional buyers. At October 31, 1999, this security
amounted to $21,478,500 or 0.5% of net assets.
Glossary:
ADR - American Depositary Receipt
See notes to financial statements.
9
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1999 ALLIANCE GROWTH & INCOME FUND
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $3,546,714,728) $3,901,725,513
Cash 606
Receivable for investment securities sold 46,536,933
Receivable for capital stock sold 30,808,598
Dividends and interest receivable 3,727,973
Total assets 3,982,799,623
LIABILITIES
Payable for investment securities purchased 66,479,251
Payable for capital stock redeemed 8,779,354
Advisory fee payable 1,442,134
Distribution fee payable 784,635
Accrued expenses and other liabilities 1,471,051
Total liabilities 78,956,425
NET ASSETS $3,903,843,198
COMPOSITION OF NET ASSETS
Capital stock, at par $ 10,626,192
Additional paid-in capital 3,356,658,377
Accumulated net realized gain on investments and foreign
currency transactions 181,547,844
Net unrealized appreciation of investments 355,010,785
$3,903,843,198
CALCULATION OF MAXIMUM OFFERING PRICE
CLASS A SHARES
Net asset value and redemption price per share
($1,503,873,725/406,370,981 shares of capital stock
issued and outstanding) $3.70
Sales charge--4.25% of public offering price .16
Maximum offering price $3.86
CLASS B SHARES
Net asset value and offering price per share
($1,842,045,354/503,914,159 shares of capital stock
issued and outstanding) $3.66
CLASS C SHARES
Net asset value and offering price per share
($518,184,744/141,615,022 shares of capital stock
issued and outstanding) $3.66
ADVISOR CLASS SHARES
Net asset value, redemption and offering price per share
($39,739,375/10,719,077 shares of capital stock issued
and outstanding) $3.71
See notes to financial statements.
10
STATEMENT OF OPERATIONS
YEAR ENDED OCTOBER 31, 1999 ALLIANCE GROWTH & INCOME FUND
_______________________________________________________________________________
INVESTMENT INCOME
Dividends (net of foreign taxes withheld
of $105,344) $ 44,981,207
Interest 6,797,826 $ 51,779,033
EXPENSES
Advisory fee 13,402,371
Distribution fee - Class A 3,081,790
Distribution fee - Class B 12,625,937
Distribution fee - Class C 3,197,078
Transfer agency 4,465,567
Registration 658,192
Printing 553,878
Custodian 279,891
Taxes 171,750
Audit and legal 137,603
Administrative 130,000
Directors' fees 40,000
Miscellaneous 110,394
Total expenses 38,854,451
Net investment income 12,924,582
REALIZED AND UNREALIZED GAIN ON
INVESTMENT TRANSACTIONS
Net realized gain on investments and
foreign currency transactions 192,308,395
Net change in unrealized appreciation
of investments and other assets 178,150,302
Net gain on investments 370,458,697
NET INCREASE IN NET ASSETS FROM OPERATIONS $383,383,279
See notes to financial statements.
11
STATEMENT OF CHANGES IN NET ASSETS ALLIANCE GROWTH & INCOME FUND
_______________________________________________________________________________
YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31,
1999 1998
-------------- --------------
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment income $ 12,924,582 $ 10,090,007
Net realized gain on investments and
foreign currency transactions 192,308,395 208,599,998
Net change in unrealized appreciation
of investments and other assets 178,150,302 (20,404,838)
Net increase in net assets from
operations 383,383,279 198,285,167
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income
Class A (10,978,013) (11,056,910)
Class B (1,193,038) (3,430,012)
Class C (340,026) (790,836)
Advisor Class (413,505) (59,998)
Distributions in excess of net
investment income
Class A (2,635,795) -0-
Class B (4,325,312) -0-
Class C (1,051,612) -0-
Advisor Class (68,102) -0-
Net realized gain on investments
Class A (101,835,187) (104,156,500)
Class B (83,069,507) (62,542,206)
Class C (18,905,921) (14,674,879)
Advisor Class (2,466,651) (419,910)
CAPITAL STOCK TRANSACTIONS
Net increase 1,768,774,181 624,116,466
Total increase 1,924,874,791 625,270,382
NET ASSETS
Beginning of year 1,978,968,407 1,353,698,025
End of year (including undistributed net
investment income of $392,954 at
October 31, 1998) $3,903,843,198 $1,978,968,407
See notes to financial statements.
12
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1999 ALLIANCE GROWTH & INCOME FUND
_______________________________________________________________________________
NOTE A: SIGNIFICANT ACCOUNTING POLICIES
Alliance Growth and Income 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 and Advisor Class 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 C shares are subject to a contingent deferred sales charge of
1% on redemptions made within the first year after purchase. Advisor Class
shares are sold without an initial or contingent deferred sales charge and are
not subject to ongoing distribution expenses. Advisor Class shares are offered
to investors participating in fee-based programs and to certain retirement plan
accounts. All four classes of shares have identical voting, dividend,
liquidation and other rights, except that each class bears different
distribution expenses and has exclusive voting rights with respect to its
distribution plan. The financial statements have been prepared in conformity
with 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 traded on a national securities exchange or on a foreign
securities exchange (other than foreign securities exchanges whose operations
are similar to those of the United States over-the-counter market) are
generally valued at the last reported sales price or if no sale occurred, at
the mean of the closing bid and asked prices on that day. Readily marketable
securities traded in the over-the-counter market, securities listed on a
foreign securities exchange whose operations are similar to the U.S.
over-the-counter market, and securities listed on a national securities
exchange whose primary market is believed to be over-the-counter, are valued at
the mean of the current bid and asked prices. U.S. government and fixed income
securities which mature in 60 days or less are valued at amortized cost, unless
this method does not represent fair value. Securities for which current market
quotations are not readily available are valued at their fair value as
determined in good faith by, or in accordance with procedures adopted by, the
Board of Directors. Fixed income securities may be valued on the basis of
prices obtained from a pricing service when such prices are believed to reflect
the fair market value of such securities.
2. 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.
3. INVESTMENT INCOME AND INVESTMENT TRANSACTIONS
Dividend income is recorded on the ex-dividend date. Interest income is accrued
daily. Investment transactions are accounted for on the date the securities are
purchased or sold. The Fund accretes discounts as adjustments to interest
income. Investment gains and losses are determined on the identified cost basis.
4. INCOME AND EXPENSES
All income earned and expenses incurred by the Fund are borne on a pro-rata
basis by each outstanding class of shares, based on the proportionate interest
in the Fund represented by the net assets of such class, except that the Fund's
Class B and Class C shares bear higher distribution and transfer agent fees
than Class A shares and the Advisor Class shares have no distribution fees.
5. DIVIDENDS AND DISTRIBUTIONS
Dividends and distributions to shareholders are recorded on the ex-dividend
date. Income dividends and capital gains distributions are determined in
accordance with federal tax regulations and may differ from those determined in
accordance with generally accepted accounting principles. To the extent these
differences are permanent,
13
NOTES TO FINANCIAL STATEMENTS (CONTINUED) ALLIANCE GROWTH & INCOME FUND
_______________________________________________________________________________
such amounts are reclassified within the capital accounts based on their
federal tax basis treatment; temporary differences do not require such
reclassification. During the current fiscal year, permanent differences,
primarily due to a distribution reclass, resulted in a net increase in
undistributed net investment income and a corresponding decrease in accumulated
net realized gain on investment and foreign currency transactions. This
reclassification had no effect on net assets.
NOTE B: ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Under the terms of an advisory agreement, the Fund pays Alliance Capital
Management L.P. (the "Adviser"), an advisory fee at an annual rate of .625% of
the first $200 million, .50% of the next $200 million and .45% in excess of
$400 million of the average daily net assets of the Fund. Such fee is accrued
daily and paid monthly.
Pursuant to the advisory agreement, the Fund paid $130,000 to the Adviser
representing the cost of certain legal and accounting services provided to the
Fund by the Adviser for the year ended October 31, 1999.
The Fund compensates Alliance Fund Services, Inc., a wholly-owned subsidiary of
the Adviser, under a Transfer Agency Agreement for providing personnel and
facilities to perform transfer agency services for the Fund. Such compensation
amounted to $3,157,091 for the year ended October 31, 1999.
For the year ended October 31, 1999, the Fund's expenses were reduced by
$233,735 under an expense offset arrangement with Alliance Fund Services, Inc.
Alliance Fund Distributors, Inc., (the "Distributor"), a wholly-owned
subsidiary of the Adviser, serves as the Distributor of the Fund's shares. The
Distributor has advised the Fund that it has received front-end sales charges
of $887,635 from the sale of Class A shares and $44,509, $2,030,158 and $93,970
contingent deferred sales charges imposed upon redemptions by shareholders of
Class A, Class B and Class C shares, respectively, for the year ended October
31, 1999.
Brokerage commissions paid on investment transactions for the year ended
October 31, 1999 amounted to $5,724,116 of which $288,596 was paid to
Donaldson, Lufkin & Jenrette ("DLJ"), none was paid to brokers utilizing the
services of the Pershing Division of DLJ, an affiliate of the Adviser.
NOTE C: DISTRIBUTION SERVICES AGREEMENT
The Fund has adopted a Distribution Services Agreement (the "Agreement")
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the
Agreement, the Fund pays distribution and servicing fees to the Distributor at
an annual rate of up to .30% of the Fund's average daily net assets
attributable to Class A shares and 1% of the average daily net assets
attributable to both Class B and Class C shares. There are no distribution and
servicing fees on the Advisor Class shares. The fees are accrued daily and paid
monthly. The Agreement provides that the Distributor will use such payments in
their entirety for distribution assistance and promotional activities. The
Distributor has advised the Fund that it has incurred expenses in excess of the
distribution costs reimbursed by the Fund in the amount of $55,277,710 and
$4,475,791 for Class B and Class C shares, respectively; such costs may be
recovered from the Fund in future periods so long as the Agreement is in
effect. In accordance with the Agreement, there is no provision for recovery of
unreimbursed distribution costs incurred by the Distributor beyond the current
fiscal year for Class A shares. The Agreement also provides that the Adviser
may use its own resources to finance the distribution of the Fund's shares.
NOTE D: INVESTMENT TRANSACTIONS
Purchases and sales of investment securities (excluding short-term investments
and U.S. government securities) aggregated $2,773,470,247 and $1,307,872,291,
respectively, for the year ended October 31, 1999. There were no purchases and
sales of U.S. government and government agency obligations for the year ended
October 31, 1999.
14
ALLIANCE GROWTH & INCOME FUND
_______________________________________________________________________________
At October 31, 1999, the cost of investments for federal income tax purposes
was $3,546,714,728. Gross unrealized appreciation of investments was
$582,606,308 and gross unrealized depreciation of investments was $227,595,523
resulting in net unrealized appreciation of $355,010,785.
1. OPTION TRANSACTIONS
For hedging purposes, the Fund purchases and writes (sells) put and call
options on U.S. and foreign government securities and foreign currencies that
are traded on U.S. and foreign securities exchanges and over-the-counter
markets.
The risk associated with purchasing an option is that the Fund pays a premium
whether or not the option is exercised. Additionally, the Fund bears the risk
of loss of premium and change in market value should the counterparty not
perform under the contract. Put and call options purchased are accounted for in
the same manner as portfolio securities. The cost of securities acquired
through the exercise of call options is increased by premiums paid. The
proceeds from securities sold through the exercise of put options are decreased
by the premiums paid.
When the Fund writes an option, the premium received by the Fund is recorded as
a liability and is subsequently adjusted to the current market value of the
option written. Premiums received from writing options which expire unexercised
are recorded by the Fund on the expiration date as realized gains from option
transactions. The difference between the premium received and the amount paid
on effecting a closing purchase transaction, including brokerage commissions,
is also treated as a realized gain, or if the premium is less than the amount
paid for the closing purchase transaction, as a realized loss. If a call option
is exercised, the premium received is added to the proceeds from the sale of
the underlying security or currency in determining whether the Fund has
realized a gain or loss. If a put option is exercised, the premium received
reduces the cost basis of the security or currency purchased by the Fund. The
risk involved in writing an option is that, if the option was exercised the
underlying security could then be purchased or sold by the Fund at a
disadvantageous price.
For the year ended October 31, 1999, the Fund did not engage in any option
transactions.
NOTE E: CAPITAL STOCK
There are 12,000,000,000 shares of $0.01 par value capital stock authorized,
divided into four classes, designated Class A, Class B, Class C and Advisor
Class shares. Each class consists of 3,000,000,000 authorized shares.
Transactions in capital stock were as follows:
SHARES AMOUNT
--------------------------- ------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
1999 1998 1999 1998
------------ ------------ -------------- --------------
CLASS A
Shares sold 266,731,095 98,222,812 $ 985,863,971 $ 334,903,712
Shares issued in
reinvestment of
dividends and
distributions 29,166,983 29,831,349 95,788,917 93,523,259
Shares converted
from Class B 8,428,713 8,647,040 30,944,166 29,353,090
Shares redeemed (185,377,812) (75,720,075) (679,918,852) (257,505,502)
Net increase 118,948,979 60,981,126 $ 432,678,202 $ 200,274,559
15
NOTES TO FINANCIAL STATEMENTS (CONTINUED) ALLIANCE GROWTH & INCOME FUND
_______________________________________________________________________________
SHARES AMOUNT
--------------------------- ------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
1999 1998 1999 1998
------------ ------------ -------------- --------------
CLASS B
Shares sold 315,902,586 121,143,305 $1,159,077,903 $ 410,581,531
Shares issued in
reinvestment of
dividends and
distributions 25,381,823 19,847,882 82,271,405 61,492,874
Shares converted
to Class A (8,521,989) (8,725,071) (30,944,166) (29,353,090)
Shares redeemed (60,128,994) (33,250,320) (216,203,721) (109,755,296)
Net increase 272,633,426 99,015,796 $ 994,201,421 $ 332,966,019
CLASS C
Shares sold 118,343,783 33,804,199 $ 434,581,429 $ 114,565,500
Shares issued in
reinvestment of
dividends and
distributions 5,905,999 4,670,589 19,162,910 14,469,664
Shares redeemed (35,284,710) (16,673,562) (127,778,856) (55,675,053)
Net increase 88,965,072 21,801,226 $ 325,965,483 $ 73,360,111
ADVISOR CLASS
Shares sold 8,361,148 7,117,703 $ 31,420,736 $ 22,635,129
Shares issued in
reinvestment of
dividends and
distributions 880,164 143,377 2,915,175 450,418
Shares redeemed (5,138,358) (1,567,478) (18,406,836) (5,569,770)
Net increase 4,102,954 5,693,602 $ 15,929,075 $ 17,515,777
NOTEF: BANK BORROWING
A number of open-end mutual funds managed by the Adviser, including the Fund,
participate in a $750 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 expense in the statement of operations. The Fund did not utilize
the Facility during the year ended October 31, 1999.
16
FINANCIAL HIGHLIGHTS ALLIANCE GROWTH & INCOME FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH YEAR
<TABLE>
<CAPTION>
CLASS A
---------------------------------------------------------------
YEAR ENDED OCTOBER 31,
---------------------------------------------------------------
1999 1998 1997 1996 1995
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $3.44 $3.48 $3.00 $2.71 $2.35
INCOME FROM INVESTMENT OPERATIONS
Net investment income .03(a) .03(a) .04(a) .05 .02
Net realized and unrealized gain on
investment transactions .62 .43 .87 .50 .52
Net increase in net asset value
from operations .65 .46 .91 .55 .54
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.03) (.04) (.05) (.05) (.06)
Distributions in excess of net
investment income (.01) -0- -0- -0- -0-
Distributions from net realized gains (.35) (.46) (.38) (.21) (.12)
Total dividends and distributions (.39) (.50) (.43) (.26) (.18)
Net asset value, end of year $3.70 $3.44 $3.48 $3.00 $2.71
TOTAL RETURN
Total investment return based on
net asset value (b) 20.48% 14.70% 33.28% 21.51% 24.21%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's omitted) $1,503,874 $988,965 $787,566 $553,151 $458,158
Ratio of expenses to average net assets .93% .93%(c) .92%(c) .97% 1.05%
Ratio of net investment income to
average net assets .87% .96% 1.39% 1.73% 1.88%
Portfolio turnover rate 48% 89% 88% 88% 142%
</TABLE>
See footnote summary on page 20.
17
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE GROWTH & INCOME FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH YEAR
<TABLE>
<CAPTION>
CLASS B
---------------------------------------------------------------
YEAR ENDED OCTOBER 31,
---------------------------------------------------------------
1999 1998 1997 1996 1995
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $3.41 $3.45 $2.99 $2.69 $2.34
INCOME FROM INVESTMENT OPERATIONS
Net investment income -0-(a) .01(a) .02(a) .03 .01
Net realized and unrealized gain on
investment transactions .62 .43 .85 .51 .49
Net increase in net asset value
from operations .62 .44 .87 .54 .50
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income -0- (.02) (.03) (.03) (.03)
Distributions in excess of net
investment income (.02) -0- -0- -0- -0-
Distributions from net realized gains (.35) (.46) (.38) (.21) (.12)
Total dividends and distributions (.37) (.48) (.41) (.24) (.15)
Net asset value, end of year $3.66 $3.41 $3.45 $2.99 $2.69
TOTAL RETURN
Total investment return based on
net asset value (b) 19.56% 14.07% 31.83% 21.20% 22.84%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's omitted) $1,842,045 $787,730 $456,399 $235,263 $136,758
Ratio of expenses to average net assets 1.70% 1.72%(c) 1.72%(c) 1.78% 1.86%
Ratio of net investment income to
average net assets .09% .17% .56% .91% 1.05%
Portfolio turnover rate 48% 89% 88% 88% 142%
</TABLE>
See footnote summary on page 20.
18
ALLIANCE GROWTH & INCOME FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH YEAR
<TABLE>
<CAPTION>
CLASS C
---------------------------------------------------------------
YEAR ENDED OCTOBER 31,
---------------------------------------------------------------
1999 1998 1997 1996 1995
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $3.41 $3.45 $2.99 $2.70 $2.34
INCOME FROM INVESTMENT OPERATIONS
Net investment income -0-(a) .01(a) .02(a) .03 .01
Net realized and unrealized gain on
investment transactions .62 .43 .85 .50 .50
Net increase in net asset value
from operations .62 .44 .87 .53 .51
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income -0- (.02) (.03) (.03) (.03)
Distributions in excess of net
investment income (.02) -0- -0- -0- -0-
Distributions from net realized gains (.35) (.46) (.38) (.21) (.12)
Total dividends and distributions (.37) (.48) (.41) (.24) (.15)
Net asset value, end of year $3.66 $3.41 $3.45 $2.99 $2.70
TOTAL RETURN
Total investment return based on
net asset value (b) 19.56% 14.07% 31.83% 20.72% 23.30%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's omitted) $518,185 $179,487 $106,526 $61,356 $35,835
Ratio of expenses to average net assets 1.69% 1.72%(c) 1.71%(c) 1.76% 1.84%
Ratio of net investment income to
average net assets .11% .18% .58% .93% 1.04%
Portfolio turnover rate 48% 89% 88% 88% 142%
</TABLE>
See footnote summary on page 20.
19
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE GROWTH & INCOME FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
ADVISOR CLASS
----------------------------------------------------
OCTOBER 2,
YEAR ENDED OCTOBER 31, 1996(D) TO
------------------------------------- OCTOBER 31,
1999 1998 1997 1996
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $3.44 $3.48 $3.00 $2.97
INCOME FROM INVESTMENT OPERATIONS
Net investment income .04(a) .04(a) .05(a) -0-
Net realized and unrealized gain on
investment transactions .63 .43 .87 .03
Net increase in net asset value
from operations .67 .47 .92 .03
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.04) (.05) (.06) -0-
Distributions in excess of net
investment income (.01) -0- -0- -0-
Distributions from net realized gains (.35) (.46) (.38) -0-
Total dividends and distributions (.40) (.51) (.44) -0-
Net asset value, end of period $3.71 $3.44 $3.48 $3.00
TOTAL RETURN
Total investment return based on
net asset value (b) 21.03% 14.96% 33.61% 1.01%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $39,739 $22,786 $3,207 $87
Ratio of expenses to average net assets .68% .76%(c) .71%(c) .37%(e)
Ratio of net investment income to
average net assets 1.12% 1.14% 1.42% 3.40%(e)
Portfolio turnover rate 48% 89% 88% 88%
</TABLE>
(a) Based on average shares outstanding.
(b) 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 investment return calculated for a period of less than one year
is not annualized.
(c) Ratios reflect expenses grossed up for expense offset arrangement with the
transfer agent. For the periods shown below, the net expense ratios were as
follows:
YEAR ENDED OCTOBER 31,
-----------------------
1998 1997
---------- ----------
Class A .92% .91%
Class B 1.71% 1.71%
Class C 1.71% 1.70%
Advisor Class .75% .70%
(d) Commencement of distribution.
(e) Annualized.
20
REPORT OF INDEPENDENT ACCOUNTANTS ALLIANCE GROWTH & INCOME FUND
_______________________________________________________________________________
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF
ALLIANCE GROWTH AND INCOME FUND, INC.
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Alliance Growth and Income Fund,
Inc. (the "Fund") at October 31, 1999, the results of its operations for the
year then ended, the changes in its net assets for each of the two years in the
period then ended and the financial highlights for each of the periods
presented, in conformity with generally accepted accounting principles. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement
presentation. We believe that our audits, which included confirmation of
securities at October 31, 1999 by correspondence with the custodian and
brokers, provide a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
New York, New York
December 16, 1999
TAX INFORMATION
_______________________________________________________________________________
In order to meet certain requirements of the Internal Revenue Code we are
advising you that the Fund paid $182,768,676 of capital gain distributions
during the fiscal year ended October 31, 1999, which are subject to a maximum
tax rate of 20%.
Shareholders should not use the above information to prepare their tax returns.
The information necessary to complete your income tax returns will be included
with your Form 1099 DIV which will be sent to you separately in January 2000.
21
ALLIANCE GROWTH & INCOME FUND
_______________________________________________________________________________
BOARD OF DIRECTORS
JOHN D. CARIFA, CHAIRMAN AND PRESIDENT
RUTH BLOCK (1)
DAVID H. DIEVLER (1)
JOHN H. DOBKIN (1)
WILLIAM H. FOULK, JR. (1)
DR. JAMES M. HESTER (1)
CLIFFORD L. MICHEL (1)
DONALD J. ROBINSON (1)
OFFICERS
KATHLEEN A. CORBET, SENIOR VICE PRESIDENT
PAUL C. RISSMAN, SENIOR VICE PRESIDENT
THOMAS J. BARDONG, VICE PRESIDENT
FRANK CARUSO, VICE PRESIDENT
EDMUND P. BERGAN, JR., SECRETARY
MARK D. GERSTEN, TREASURER & CHIEF FINANCIAL OFFICER
VINCENT S. NOTO, CONTROLLER
CUSTODIAN
STATE STREET BANK & TRUST COMPANY
225 Franklin Street
Boston, MA 02110
PRINCIPAL UNDERWRITER
ALLIANCE FUND DISTRIBUTORS, INC.
1345 Avenue of the Americas
New York, NY 10105
LEGAL COUNSEL
SEWARD & KISSEL LLP
One Battery Park Plaza
New York, NY 10004
TRANSFER AGENT
ALLIANCE FUND SERVICES, INC.
P.O. Box 1520
Secaucus, NJ 07096-1520
Toll-Free 1-(800)-221-5672
INDEPENDENT ACCOUNTANTS
PRICEWATERHOUSECOOPERS LLP
1177 Avenue of the Americas
New York, NY 10036-2798
(1) Member of the Audit Committee.
22
THE ALLIANCE FAMILY OF MUTUAL FUNDS
_______________________________________________________________________________
FIXED INCOME
Alliance Bond Fund
U.S. Government Portfolio
Corporate Bond Portfolio
Quality Bond Portfolio
Alliance Global Dollar Government Fund
Alliance Global Strategic Income Trust
Alliance High Yield Fund
Alliance Limited Maturity Government Fund
Alliance Mortgage Securities Income Fund
Alliance Multi-Market Strategy Trust
Alliance North American Government Income Trust
Alliance Short-Term U.S. Government Fund
TAX-FREE INCOME
Alliance Municipal Income Fund
California Portfolio
Insured California Portfolio
Insured National Portfolio
National Portfolio
New York Portfolio
Alliance Municipal Income Fund II
Arizona Portfolio
Florida Portfolio
Massachusetts Portfolio
Michigan Portfolio
Minnesota Portfolio
New Jersey Portfolio
Ohio Portfolio
Pennsylvania Portfolio
Virginia Portfolio
MONEY MARKET
AFD Exchange Reserves
GROWTH
The Alliance Fund
Alliance Global Environment Fund
Alliance Growth Fund
Alliance Premier Growth Fund
Select Investors Series - Premier Portfolio
GROWTH & INCOME
Alliance Balanced Shares
Alliance Conservative Investors Fund
Alliance Growth & Income Fund
Alliance Growth Investors Fund
Alliance Real Estate Investment Fund
Alliance Utility Income Fund
AGGRESSIVE GROWTH
Alliance Global Small Cap Fund
Alliance Health Care Fund
Alliance Quasar Fund
Alliance Technology Fund
INTERNATIONAL
Alliance All-Asia Investment Fund
Alliance Greater China '97 Fund
Alliance International Fund
Alliance International Premier Growth Fund
Alliance New Europe Fund
Alliance Worldwide Privatization Fund
INSTITUTIONAL
Premier Growth
Quasar
Real Estate Investment
CLOSED-END FUNDS
Alliance All-Market Advantage Fund
ACM Government Income Fund
ACM Government Opportunity Fund
ACM Government Securities Fund
ACM Government Spectrum Fund
ACM Managed Dollar Income Fund
ACM Managed Income Fund
ACM Municipal Securities Income Fund
Alliance World Dollar Government Fund
Alliance World Dollar Government Fund II
The Austria Fund
The Korean Investment Fund
The Spain Fund
The Southern Africa Fund
CASH MANAGEMENT SERVICES
Alliance Capital Reserves
Alliance Government Reserves
Alliance Institutional Reserves
Prime Portfolio
Government Portfolio
Tax-Free Portfolio
Treasury Portfolio
Trust Portfolio
Alliance Insured Account
Alliance Money Reserves
Alliance Municipal Trust
California Portfolio
Connecticut Portfolio
Florida Portfolio
General Portfolio
Massachusetts Portfolio
New Jersey Portfolio
New York Portfolio
Virginia Portfolio
Alliance Treasury Reserves
Alliance Money Market Fund
Prime Portfolio
General Municipal Portfolio
Government Portfolio
23
ALLIANCE GROWTH & INCOME FUND
1345 Avenue of the Americas
New York, NY 10105
(800) 221-5672
ALLIANCE CAPITAL
THIS REPORT IS INTENDED SOLELY FOR DISTRIBUTION TO CURRENT SHAREHOLDERS
OF THE FUND.
R THESE REGISTERED SERVICE MARKS USED UNDER LICENSE FROM THE OWNER,
ALLIANCE CAPITAL MANAGEMENT L.P.
GTHAR1099
