--------------------------------------------------------------------------------
LARGE CAP VALUE
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Alliance Growth &
Income Fund
Annual Report
October 31, 2000
[GRAPHIC OMITTED]
Alliance Capital[LOGO](R)
The Investment Professional's Choice
<PAGE>
Investment Products Offered
---------------------------
o Are Not FDIC Insured
o May Lose Value
o Are Not Bank Guaranteed
---------------------------
This shareholder report must be preceded or accompanied by the Fund's prospectus
for individuals who are not current shareholders of the Fund.
<PAGE>
----------------------
LETTER TO SHAREHOLDERS
----------------------
LETTER TO SHAREHOLDERS
December 22, 2000
Dear Shareholder:
This report provides the performance and market activity of Alliance Growth &
Income Fund (the "Fund") for the annual reporting period ended October 31, 2000.
Investment Objectives and Policies
This open-ended fund seeks capital appreciation. The Fund invests principally in
a diversified portfolio of dividend-paying common stocks of good quality, and
may also invest in other types of securities, including bonds, convertible
bonds, preferred stocks, and fixed-income securities. We manage the Fund with an
eye toward maintaining a defensive dividend yield and price-to-earnings (P/E)
ratio, a fully invested posture and a high degree of sector and industry
diversification.
Investment Results
The following table provides performance data for the Fund and its benchmarks as
represented by the Russell 1000 Value Index and the Standard & Poor's (S&P) 500
Stock Index, as well as the Lipper Multi-Cap Value Funds Average for the six-
and 12- month periods ended October 31, 2000.
INVESTMENT RESULTS*
Periods Ended October 31, 2000
---------------------
Total Returns
---------------------
6 Months 12 Months
--------------------------------------------------------------------------------
Alliance Growth
& Income Fund
Class A 9.37% 16.76%
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Class B 9.17% 15.93%
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Class C 9.17% 15.91%
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Russell 1000
Value Index 6.57% 5.52%
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S&P 500
Stock Index -1.03% 6.08%
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Lipper Multi-Cap
Value Funds
Average 6.59% 11.03%
--------------------------------------------------------------------------------
* The Fund's investment results represent total returns for the periods
shown and are based on the net asset value (NAV) of each class of shares
as of October 31, 2000. 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. Returns for
Advisor Class shares will vary due to different expenses associated with
that class. Returns for the Fund include the reinvestment of any
distributions paid during the period. Past performance is no guarantee of
future results.
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ALLIANCE GROWTH & INCOME FUND o 1
<PAGE>
----------------------
LETTER TO SHAREHOLDERS
----------------------
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
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
Lipper Multi-Cap Value Funds Average reflects the performance of 559 funds
for the six-month period and 513 funds for the 12-month period ended
October 31, 2000. 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, and its results are not indicative of the
performance for any specific investment, including Alliance Growth &
Income Fund.
Additional investment results appear on pages 5-8.
The Fund outperformed both of its benchmarks over the past six- and 12-month
periods ended October 31, 2000. Strong relative performance was driven in large
part by the outsized returns generated from some of our largest holdings. As the
market's tolerance for risky assets moderated throughout the calendar year,
conservative investments in well-managed, stable businesses benefited. Orphaned
last year as investors and traders bid up the valuations of high growth
technology companies, our disciplined value investment process identified many
of this year's winners as undervalued. As you know, our process mandates that we
respond to shifts in market risk and opportunity perceived by our valuation
framework. The consistent implementation of our process, resulting in an
attractively valued portfolio with favorable growth prospects, is largely
responsible for our strong performance this year.
Investment Discussion and Activity
Though market sentiment has been understandably fragile this year, given
confusing geopolitical and economic crosscurrents, the Fund's returns through
October were quite satisfactory. It appears that the combination of the Federal
Reserve's hostile interest rate policy, political unrest in the Middle East, and
recent disappointing U.S. company profit performance conspired to undermine
investor and consumer confidence. A tight domestic labor market and fears of a
global oil shortage contributed to heightened investor concern about inflation,
the
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2 o ALLIANCE GROWTH & INCOME FUND
<PAGE>
----------------------
LETTER TO SHAREHOLDERS
----------------------
nemesis of financial asset performance. Consequently, U.S. inflation has been
under the microscope, particularly with the recent revelation that higher energy
prices pushed producer prices up by 0.9% month-over-month in September, the
second biggest monthly increase in 10 years. The year-over-year increase of
3.3%, however, was a full percentage point below the March and June peaks. While
no one can predict with certainty the outcome of events in the Middle East, the
Federal Reserve's preemptive assault on inflation appears to be achieving its
desired effect as recent evidence suggests a more moderate level of U.S.
economic activity and lessened inflation risk.
Against the backdrop of these concerns, more conservative investment strategies
again captured the fancy of investors. We take great comfort in the notion that
the laws of financial gravity have not been repealed. Following two years of
extraordinary valuation inflation in the highest risk segments of the equity
market, the momentum bubble popped in early spring. Through October, "new
paradigm" investors and pundits were salvaged as corrective forces began
exerting tremendous downward pressure on the speculative valuations that had
become the norm of the past few years. As the pattern of history has been many
times over, high valuations are representative of high expectations, which are,
oftentimes, impossible to achieve.
The Fund's performance benefited from the market's heightened sensitivity to
risk, subsequent rotation into more conservatively valued investments, and good
stock selection. Areas where we have enjoyed particularly good success this year
include stable demand companies like Pepsi Bottling, Tenet Healthcare, and Avon
Products. Our stock model's proclivity to identify good business at cheap prices
has been the right recipe for success in this unstable market.
Market Outlook
The Federal Reserve's policy to slow U.S. economic activity and relieve
potential inflation pressure appears to be achieving its desired intent.
Although output growth for the third quarter likely slowed to 3% from the second
quarter's 5.6%, we believe that domestic demand actually accelerated. A positive
growth "surprise" in the fourth quarter cannot be ruled out, but, looking ahead
to 2001, we see U.S. growth downshifting into the 3%-4% range.
--------------------------------------------------------------------------------
ALLIANCE GROWTH & INCOME FUND o 3
<PAGE>
----------------------
LETTER TO SHAREHOLDERS
----------------------
[PHOTO OMITTED] John D. Carifa
[PHOTO OMITTED] Paul C. Rissman
[PHOTO OMITTED] Frank Caruso
Portfolio Managers, Paul Rissman and Frank Caruso, have over 25 years combined
investment experience.
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,
/s/ John D. Carifa
John D. Carifa
Chairman and President
/s/ Paul C. Rissman
Paul C. Rissman
Senior Vice President
/s/ Frank Caruso
Frank Caruso
Vice President
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4 o ALLIANCE GROWTH & INCOME FUND
<PAGE>
------------------
PERFORMANCE UPDATE
------------------
PERFORMANCE UPDATE
ALLIANCE GROWTH & INCOME FUND
GROWTH OF A $10,000 INVESTMENT
10/31/90 TO 10/31/00
[The following was depicted as a mountain chart in the printed material.]
<PLOT POINTS TO COME>
S&P 500 Stock Index: $58,993
Russell 1000 Value Stock Index: $53,805
Alliance Growth & Income Fund Class A: $49,896
Lipper Multi-Cap Value Funds Average: $45,774
This chart illustrates the total value of an assumed $10,000 investment in
Alliance Growth & Income Fund Class A shares (from 10/31/90 to 10/31/00) as
compared to the performance of appropriate broad-based indices and the Lipper
Multi-Cap Value Funds Average. 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 these 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 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 Lipper Multi-Cap Value Funds Average reflects performance of 96
funds (based on the number of funds in the average from 10/31/90 to 10/31/00).
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 indices and average shown
above, you should note that no charges or expenses are reflected in the
performance of the indices. Lipper results include fees and expenses. An
investor cannot invest directly in an index or average, and its results are not
indicative of any specific investment, including Alliance Growth & Income Fund.
--------------------------------------------------------------------------------
ALLIANCE GROWTH & INCOME FUND o 5
<PAGE>
------------------
PERFORMANCE UPDATE
------------------
PERFORMANCE UPDATE
ALLIANCE GROWTH & INCOME FUND
HISTORY OF RETURNS
YEARLY PERIODS ENDED 10/31
[BAR CHART OMITTED]
Alliance Growth & Income Fund-Yearly Periods Ended 10/31
--------------------------------------------------------------------------------
Alliance Growth & Russell 1000
Income Fund Value Index
--------------------------------------------------------------------------------
10/31/91 31.03% 32.89%
10/31/92 7.23% 10.67%
10/31/93 14.98% 25.16%
10/31/94 -0.67% 0.77%
10/31/95 24.21% 24.68%
10/31/96 21.51% 23.74%
10/31/97 33.28% 33.19%
10/31/98 14.70% 14.83%
10/31/99 20.48% 16.52%
10/31/00 16.76% 5.52%
Past performance is no guarantee of future results. The Fund's investment
results represent total returns for Class A shares and are based on the net
asset value (NAV). 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. Returns for the Fund include the
reinvestment of any distributions paid during the period.
Total returns for Class B, Class C and Advisor Class shares will differ due to
different expenses associated with these classes.
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. An investor cannot invest
directly in an index or average, and its results are not indicative of the
performance for any specific investment, including Alliance Growth & Income
Fund.
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6 o ALLIANCE GROWTH & INCOME FUND
<PAGE>
-----------------
PORTFOLIO SUMMARY
-----------------
PORTFOLIO SUMMARY
October 31, 2000
INCEPTION DATE PORTFOLIO STATISTICS
Class A Shares Net Assets ($mil): $5,707.0
7/1/32 Median Market Capitalization ($mil): $21,493
Class B Shares
2/8/91
Class C Shares
5/3/93
SECTOR BREAKDOWN [PIE CHART OMITTED]
20.42% Finance
12.40% Technology
12.30% Consumer Staples
11.65% Consumer Services
8.89% Utilities
8.87% Energy
6.31% Healthcare
4.98% Short-Term
4.68% Multi-Industry Companies
3.86% Basic Industry
3.26% Capital Goods
1.62% Consumer Manufacturing
0.76% Transportation
HOLDING TYPE [PIE CHART OMITTED]
95.02% Equity
4.98% Short-Term Securities
All data as of October 31, 2000. The Fund's sector breakdown and holding type
may vary over time. These breakdowns are expressed as a percentage of total
investments.
--------------------------------------------------------------------------------
ALLIANCE GROWTH & INCOME FUND o 7
<PAGE>
------------------
INVESTMENT RESULTS
------------------
INVESTMENT RESULTS
AVERAGE ANNUAL TOTAL RETURNS AS OF OCTOBER 31, 2000
Class A Shares
--------------------------------------------------------------------------------
Without Sales Charge With Sales Charge
1 Year 16.76% 11.92%
5 Years 21.18% 20.14%
10 Years 17.94% 17.44%
Class B Shares
--------------------------------------------------------------------------------
Without Sales Charge With Sales Charge
1 Year 15.93% 11.93%
5 Years 20.36% 20.36%
Since Inception*(a) 15.34% 15.34%
Class C Shares
--------------------------------------------------------------------------------
Without Sales Charge With Sales Charge
1 Year 15.91% 14.91%
5 Years 20.26% 20.26%
Since Inception* 17.23% 17.23%
SEC AVERAGE ANNUAL TOTAL RETURNS (WITH SALES CHARGES)
AS OF THE MOST RECENT QUARTER END (SEPTEMBER 30, 2000)
Class A Class B Class C
Shares Shares Shares
--------------------------------------------------------------------------------
1 Year 14.78% 14.86% 18.14%
5 Years 19.49% 19.55% 19.52%
10 Years 17.06% n/a n/a
Since Inception* 11.10% 15.25%(a) 17.14%
The Fund's investment results represent average annual total returns. The
returns reflect reinvestment of dividends and/or capital gains distributions in
additional shares without and with 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.
The Fund can invest in foreign securities, which may magnify these fluctuations
due to changes in foreign exchange rates and the possibility of substantial
volatility due to political and economic uncertainties in foreign countries.
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 Date: 7/1/32, Class A; 2/8/91, Class B; 5/3/93, Class C.
(a) Assumes conversion of Class B shares into Class A shares after 8 years.
n/a: not applicable
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8 o ALLIANCE GROWTH & INCOME FUND
<PAGE>
--------------------
TEN LARGEST HOLDINGS
--------------------
TEN LARGEST HOLDINGS
October 31, 2000
Percent of
Company Value Net Assets
--------------------------------------------------------------------------------
Tyco International, Ltd. $ 259,912,188 4.6%
--------------------------------------------------------------------------------
Tenet Healthcare Corp. 188,684,275 3.3
--------------------------------------------------------------------------------
United Technologies Corp. 185,505,775 3.2
--------------------------------------------------------------------------------
Kroger Co. 184,380,750 3.2
--------------------------------------------------------------------------------
Household International, Inc. 181,125,000 3.2
--------------------------------------------------------------------------------
The Pepsi Bottling Group, Inc. 166,200,000 2.9
--------------------------------------------------------------------------------
Associates First Capital Corp. Cl.A 163,977,412 2.9
--------------------------------------------------------------------------------
First Data Corp. 163,407,500 2.9
--------------------------------------------------------------------------------
AT&T Corp. 160,821,961 2.8
--------------------------------------------------------------------------------
Chase Manhattan Corp. 154,768,250 2.7
--------------------------------------------------------------------------------
$1,808,783,111 31.7%
MAJOR PORTFOLIO CHANGES
Six Months Ended October 31, 2000
--------------------------------
Shares*
--------------------------------
Purchases Bought Holdings 10/31/00
--------------------------------------------------------------------------------
AT&T Corp. 5,978,795 6,935,718
--------------------------------------------------------------------------------
AT&T Corp.-Liberty Media Corp. Cl.A 3,200,000 3,200,000
--------------------------------------------------------------------------------
Bank One Corp. 3,230,000 3,230,000
--------------------------------------------------------------------------------
BP Amoco Plc (ADR) 2,040,000 2,979,720
--------------------------------------------------------------------------------
Circuit City Stores-Circuit City Group 1,910,000 1,910,000
--------------------------------------------------------------------------------
Comcast Corp. Cl.A 3,300,000 3,300,000
--------------------------------------------------------------------------------
Lowe's Cos., Inc. 1,750,000 1,750,000
--------------------------------------------------------------------------------
Micron Technology, Inc. 1,588,100 1,588,100
--------------------------------------------------------------------------------
Sprint Corp.(Fon Group) 1,100,000 1,455,000
--------------------------------------------------------------------------------
Tyco International, Ltd. 1,260,000 4,585,000
--------------------------------------------------------------------------------
Sales Sold Holdings 10/31/00
--------------------------------------------------------------------------------
Citigroup, Inc. 785,250 669,000
--------------------------------------------------------------------------------
Honeywell International, Inc. 3,214,125 -0-
--------------------------------------------------------------------------------
MediaOne Group, Inc. 897,600 -0-
--------------------------------------------------------------------------------
Motorola, Inc. 480,000 -0-
--------------------------------------------------------------------------------
Sanmina Corp. 590,000 703,800
--------------------------------------------------------------------------------
Schering-Plough Corp. 1,425,000 1,800,000
--------------------------------------------------------------------------------
Shell Transport & Trading Co. (ADR) 1,100,000 -0-
--------------------------------------------------------------------------------
The Pepsi Bottling Group, Inc. 1,440,000 4,800,000
--------------------------------------------------------------------------------
Total, SA (ADR) 600,000 -0-
--------------------------------------------------------------------------------
Warner-Lambert Co. 440,000 -0-
--------------------------------------------------------------------------------
* Adjusted for spin-offs and stock splits.
--------------------------------------------------------------------------------
ALLIANCE GROWTH & INCOME FUND o 9
<PAGE>
------------------------
PORTFOLIO OF INVESTMENTS
------------------------
PORTFOLIO OF INVESTMENTS
October 31, 2000
Company Shares Value
--------------------------------------------------------------------------------
COMMON & PREFERRED STOCKS-94.6%
Finance-20.3%
Banking-Money Center-4.2%
Chase Manhattan Corp. ........................ 3,401,500 $ 154,768,250
Citigroup, Inc. .............................. 669,000 35,206,125
Morgan J.P. & Co., Inc. ...................... 303,000 50,146,500
--------------
240,120,875
--------------
Banking-Regional-5.1%
Bank of America Corp. ........................ 3,185,000 153,079,062
Bank One Corp. ............................... 3,230,000 117,895,000
FleetBoston Financial Corp. .................. 600,000 22,800,000
--------------
293,774,062
--------------
Insurance-2.2%
AFLAC, Inc. .................................. 970,000 70,870,625
PMI Group, Inc. .............................. 528,820 39,066,578
The Hartford Financial Services Group, Inc. .. 220,000 16,376,250
--------------
126,313,453
--------------
Real Estate-1.2%
AvalonBay Communities, Inc. .................. 299,957 13,779,275
Crescent Real Estate Equities, Inc. .......... 168,700 3,395,088
Equity Office Properties Trust................ 907,700 27,344,462
MeriStar Hospitality Corp. ................... 600,000 11,475,000
ProLogis Trust................................ 400,000 8,400,000
Public Storage, Inc. ......................... 205,600 4,626,000
Regency Realty Corp........................... 19,200 432,000
--------------
69,451,825
--------------
Miscellaneous-7.6%
Associates First Capital Corp. Cl.A........... 4,416,900 163,977,412
Household International, Inc. ................ 3,600,000 181,125,000
MBNA Corp. ................................... 765,000 28,735,313
MGIC Investment Corp. ........................ 455,000 30,996,875
The CIT Group, Inc. Cl.A...................... 1,497,390 26,110,738
--------------
430,945,338
--------------
1,160,605,553
Technology-12.3%
Computer Hardware-2.2%
Compaq Computer Corp. ........................ 1,365,600 41,527,896
Gateway, Inc.(a).............................. 1,636,000 84,433,960
--------------
125,961,856
--------------
Computer Services-4.3%
Computer Sciences Corp.(a).................... 488,000 30,744,000
Electronic Data Systems Corp. ................ 1,100,300 51,645,331
First Data Corp. ............................. 3,260,000 163,407,500
--------------
245,796,831
--------------
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10 o ALLIANCE GROWTH & INCOME FUND
<PAGE>
------------------------
PORTFOLIO OF INVESTMENTS
------------------------
Company Shares Value
--------------------------------------------------------------------------------
Contract Manufacturing-2.1%
Sanmina Corp.(a).............................. 703,800 $ 80,453,138
Solectron Corp.(a)............................ 938,100 41,276,400
--------------
121,729,538
--------------
Semi-Conductor Capital Equipment-1.0%
Applied Materials, Inc.(a).................... 1,070,000 56,843,750
--------------
Semi-Conductor Components-2.7%
Altera Corp.(a)............................... 2,079,900 85,145,906
Fairchild Semiconductor Int'l. Cl.A(a)........ 662,100 13,945,481
Micron Technology, Inc.(a).................... 1,588,100 55,186,475
--------------
154,277,862
--------------
704,609,837
--------------
Consumer Staples-12.3%
Beverages-2.9%
The Pepsi Bottling Group, Inc. ............... 4,800,000 166,200,000
--------------
Cosmetics-2.0%
Avon Products, Inc. .......................... 2,380,000 115,430,000
--------------
Food-1.0%
Nabisco Group Holdings Corp. ................. 1,933,900 55,841,363
--------------
Household Products-1.2%
Colgate-Palmolive Co. ........................ 1,150,000 67,574,000
--------------
Retail-Food & Drug-3.3%
Kroger Co.(a)................................. 8,172,000 184,380,750
--------------
Tobacco-1.9%
Philip Morris Cos., Inc. ..................... 2,997,250 109,774,281
--------------
699,200,394
--------------
Consumer Services-11.6%
Airlines-1.3%
Continental Airlines, Inc. Cl.B(a)............ 1,435,000 75,337,500
--------------
Broadcasting & Cable-4.4%
A.H. Belo Corp. Series A...................... 988,700 18,970,681
AT&T Corp.-Liberty Media Corp. CI.A(a)........ 3,200,000 57,600,000
Clear Channel Communications, Inc.(a)......... 717,000 43,064,813
Comcast Corp. Cl.A(a)......................... 3,300,000 134,475,000
--------------
254,110,494
--------------
Entertainment & Leisure-1.1%
Royal Caribbean Cruises, Ltd. 7.25%
preferred stock Series A................... 2,303,500 51,828,750
Walt Disney Co. .............................. 304,100 10,890,581
--------------
62,719,331
--------------
--------------------------------------------------------------------------------
ALLIANCE GROWTH & INCOME FUND o 11
<PAGE>
------------------------
PORTFOLIO OF INVESTMENTS
------------------------
Company Shares Value
--------------------------------------------------------------------------------
Gaming-0.1%
Park Place Entertainment Corp.(a)............. 301,800 $ 3,847,950
--------------
Printing & Publishing-0.9%
Gannett Co., Inc. ............................ 893,000 51,794,000
--------------
Retail-General Merchandise-3.2%
Circuit City Stores-Circuit City Group........ 1,910,000 25,307,500
Lowe's Cos., Inc. ............................ 1,750,000 79,953,125
Saks, Inc.(a)................................. 1,589,900 16,197,106
The Limited, Inc. ............................ 2,323,200 58,660,800
--------------
180,118,531
--------------
Toys-0.6%
Mattel, Inc. ................................. 2,650,000 34,284,375
--------------
662,212,181
--------------
Utilities-8.8%
Electric & Gas Utility-2.6%
CMS Energy Corp. ............................. 620,000 16,740,000
Duke Power Energy Corp. ...................... 630,000 54,455,625
FPL Group, Inc. .............................. 918,000 60,588,000
Pinnacle West Capital Corp. .................. 415,000 18,026,562
--------------
149,810,187
--------------
Telephone Utility-5.6%
AT&T Corp. ................................... 6,935,718 160,821,961
BellSouth Corp. .............................. 1,560,000 75,367,500
Sprint Corp.(Fon Group)....................... 1,455,000 37,102,500
WorldCom, Inc.(a)............................. 1,940,925 46,096,969
--------------
319,388,930
--------------
Miscellaneous-0.6%
AES Corp.(a).................................. 632,600 35,741,900
--------------
504,941,017
--------------
Energy-8.8%
Domestic Integrated-2.7%
Kerr-McGee Corp. ............................. 999,000 65,247,187
USX-Marathon Group............................ 3,370,000 91,621,875
--------------
156,869,062
--------------
Domestic Producers-0.3%
Murphy Oil Corp. ............................. 306,500 17,757,844
--------------
International-2.8%
BP Amoco Plc (ADR) (United Kingdom)........... 2,979,720 151,779,487
Repsol SA (ADR) (Spain)....................... 371,400 5,919,188
--------------
157,698,675
--------------
--------------------------------------------------------------------------------
12 o ALLIANCE GROWTH & INCOME FUND
<PAGE>
------------------------
PORTFOLIO OF INVESTMENTS
------------------------
Company Shares Value
--------------------------------------------------------------------------------
Oil Service-0.9%
Noble Drilling Corp.(a)....................... 1,184,400 $ 49,226,625
--------------
Miscellaneous-2.1%
Dynegy, Inc. ................................. 2,645,400 122,515,088
--------------
504,067,294
--------------
Health Care-6.3%
Drugs-1.6%
Schering-Plough Corp. ........................ 1,800,000 93,037,500
--------------
Medical Products-1.4%
Abbott Laboratories........................... 1,450,000 76,578,125
--------------
Medical Services-3.3%
Tenet Healthcare Corp. ....................... 4,799,600 188,684,275
--------------
358,299,900
--------------
Multi-Industry Companies-4.7%
Tyco International, Ltd. ..................... 4,585,000 259,912,188
U.S. Industries, Inc. ........................ 700,000 6,212,500
--------------
266,124,688
--------------
Basic Industry-3.8%
Chemicals-3.0%
Dow Chemical Co. ............................. 2,070,000 63,393,750
Eastman Chemical Co. ......................... 520,000 22,295,000
Lyondell Chemical Co. ........................ 4,540,000 65,262,500
Solutia, Inc. ................................ 1,780,000 22,695,000
--------------
173,646,250
--------------
Mining & Metals-0.8%
Alcoa, Inc. .................................. 1,600,000 45,900,000
--------------
219,546,250
--------------
Capital Goods-3.3%
Miscellaneous-3.3%
United Technologies Corp. .................... 2,657,200 185,505,775
--------------
Consumer Manufacturing-1.6%
Auto & Related-0.5%
Delphi Automotive Systems Corp. .............. 1,669,000 26,182,437
--------------
Building & Related-1.1%
Masco Corp. .................................. 3,516,500 65,714,594
--------------
91,897,031
--------------
--------------------------------------------------------------------------------
ALLIANCE GROWTH & INCOME FUND o 13
<PAGE>
------------------------
PORTFOLIO OF INVESTMENTS
------------------------
Shares or
Principal
Amount
Company (000) Value
--------------------------------------------------------------------------------
Transportation-0.8%
Railroad-0.8%
Burlington Northern Santa Fe Corp. ........... 870,000 $ 23,109,375
Union Pacific Capital Trust
6.25%, 4/01/28,
Convertible preferred stock(a)(b).......... 444,000 20,091,000
--------------
43,200,375
--------------
Total Common & Preferred Stocks
(cost $4,713,113,438)...................... 5,400,210,295
--------------
SHORT-TERM INVESTMENT-5.0%
Time Deposit-5.0%
State Street Euro Dollar
6.00%, 11/01/00
(amortized cost $282,805,000).............. $282,805 282,805,000
--------------
Total Investments-99.6%
(cost $4,995,918,438)...................... 5,683,015,295
Other assets less liabilities-0.4%............ 23,943,105
--------------
Net Assets-100%............................... $5,706,958,400
==============
(a) Non-income producing security.
(b) 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,
2000, this security amounted to $20,091,000 or 0.4% of net assets.
Glossary:
ADR - American Depositary Receipt
See notes to financial statements.
--------------------------------------------------------------------------------
14 o ALLIANCE GROWTH & INCOME FUND
<PAGE>
---------------------------------
STATEMENT OF ASSETS & LIABILITIES
---------------------------------
STATEMENT OF ASSETS & LIABILITIES
October 31, 2000
Assets
Investments in securities, at value (cost $4,995,918,438) .... $5,683,015,295
Cash ......................................................... 167
Receivable for capital stock sold ............................ 37,956,613
Receivable for investment securities sold .................... 15,045,452
Dividends and interest receivable ............................ 3,148,787
--------------
Total assets ................................................. 5,739,166,314
--------------
Liabilities
Payable for investment securities purchased .................. 19,814,975
Payable for capital stock redeemed ........................... 8,217,793
Advisory fee payable ......................................... 2,085,984
Distribution fee payable ..................................... 821,336
Accrued expenses and other liabilities ....................... 1,267,826
--------------
Total liabilities ............................................ 32,207,914
--------------
Net Assets ................................................... $5,706,958,400
==============
Composition of Net Assets
Capital stock, at par ........................................ $ 14,122,353
Additional paid-in capital ................................... 4,668,417,807
Accumulated net realized gain on investments and
foreign currency transactions ............................. 337,321,383
Net unrealized appreciation of investments ................... 687,096,857
--------------
$5,706,958,400
==============
Calculation of Maximum Offering Price
Class A Shares
Net asset value and redemption price per share
($2,128,381,280 / 522,410,769 shares of capital stock
issued and outstanding) ................................... $4.07
Sales charge--4.25% of public offering price ................. .18
-----
Maximum offering price ....................................... $4.25
=====
Class B Shares
Net asset value and offering price per share
($2,567,250,370 / 639,090,763 shares of capital stock
issued and outstanding) ................................... $4.02
=====
Class C Shares
Net asset value and offering price per share
($825,572,288 / 205,244,251 shares of capital stock
issued and outstanding) ...................................... $4.02
=====
Advisor Class Shares
Net asset value, redemption and offering price per share
($185,754,462 / 45,489,532 shares of capital stock
issued and outstanding) ...................................... $4.08
=====
See notes to financial statements.
--------------------------------------------------------------------------------
ALLIANCE GROWTH & INCOME FUND o 15
<PAGE>
-----------------------
STATEMENT OF OPERATIONS
-----------------------
STATEMENT OF OPERATIONS
Year Ended October 31, 2000
Investment Income
Dividends (net of foreign taxes
withheld of $337,821) ..................... $ 71,294,987
Interest ..................................... 14,068,749 $ 85,363,736
------------
Expenses
Advisory fee ................................. 21,015,784
Distribution fee - Class A ................... 4,490,527
Distribution fee - Class B ................... 21,137,525
Distribution fee - Class C ................... 6,346,253
Transfer agency .............................. 7,152,680
Printing ..................................... 652,657
Registration ................................. 568,129
Custodian .................................... 388,596
Administrative ............................... 133,000
Audit and legal .............................. 110,722
Directors' fees .............................. 29,500
Miscellaneous ................................ 129,215
------------
Total expenses ............................... 62,154,588
------------
Net investment income ........................ 23,209,148
------------
Realized and Unrealized Gain on
Investment Transactions
Net realized gain on investments and
foreign currency transactions ............. 352,235,620
Net change in unrealized
appreciation/depreciation of
investments and other assets .............. 332,086,072
------------
Net gain on investments ...................... 684,321,692
------------
Net Increase in Net Assets
from Operations ........................... $707,530,840
============
See notes to financial statements.
--------------------------------------------------------------------------------
16 o ALLIANCE GROWTH & INCOME FUND
<PAGE>
----------------------------------
STATEMENT OF CHANGES IN NET ASSETS
----------------------------------
STATEMENT OF CHANGES
IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended Year Ended
October 31, October 31,
2000 1999
============== ==============
<S> <C> <C>
Increase in Net Assets
from Operations
Net investment income ......................... $ 23,209,148 $ 12,924,582
Net realized gain on investments and
foreign currency transactions .............. 352,235,620 192,308,395
Net change in unrealized
appreciation/depreciation of
investments and other assets ............... 332,086,072 178,150,302
-------------- --------------
Net increase in net assets from operations .... 707,530,840 383,383,279
Dividends and Distributions to
Shareholders from:
Net investment income
Class A .................................... (18,495,434) (10,978,013)
Class B .................................... (9,079,593) (1,193,038)
Class C .................................... (2,716,235) (340,026)
Advisor Class .............................. (1,072,598) (413,505)
Distribution in excess of net investment income
Class A .................................... -0- (2,635,795)
Class B .................................... -0- (4,325,312)
Class C .................................... -0- (1,051,612)
Advisor Class .............................. -0- (68,102)
Net realized gain on investments
Class A .................................... (71,182,289) (101,835,187)
Class B .................................... (89,586,700) (83,069,507)
Class C .................................... (25,544,119) (18,905,921)
Advisor Class .............................. (1,994,261) (2,466,651)
Capital Stock Transactions
Net increase .................................. 1,315,255,591 1,768,774,181
-------------- --------------
Total increase ................................ 1,803,115,202 1,924,874,791
Net Assets
Beginning of period ........................... 3,903,843,198 1,978,968,407
-------------- --------------
End of period ................................. $5,706,958,400 $3,903,843,198
============== ==============
</TABLE>
See notes to financial statements.
--------------------------------------------------------------------------------
ALLIANCE GROWTH & INCOME FUND o 17
<PAGE>
-----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
NOTES TO FINANCIAL STATEMENTS
October 31, 2000
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 accounting principles generally
accepted in the United States, 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, on a foreign
securities exchange (other than foreign securities exchanges whose operations
are similar to those of the United States over-the-counter market) or on The
Nasdaq Stock Market, Inc. 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 (but
excluding securities traded on The Nasdaq Stock Market, Inc.), 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.
--------------------------------------------------------------------------------
18 o ALLIANCE GROWTH & INCOME FUND
<PAGE>
-----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
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 accounting principles generally accepted in the United States.
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. During the current
fiscal year, permanent differences, primarily due to a distribution
reclassification, resulted in a net decrease in distributions in excess of net
investment income and a corresponding decrease in accumulated net realized gain
on investments 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. Subsequent to the Fund's fiscal year end, the Fund's
shareholders approved an amendment to the advisory fee (see Note G).
Pursuant to the advisory agreement, the Fund paid $133,000 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, 2000.
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
--------------------------------------------------------------------------------
ALLIANCE GROWTH & INCOME FUND o 19
<PAGE>
-----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
compensation amounted to $4,694,806 for the year ended October 31, 2000.
For the year ended October 31, 2000, the Fund's expenses were reduced by
$301,724 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 $929,096
from the sale of Class A shares and $51,247, $4,647,768 and $324,165 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, 2000.
Brokerage commissions paid on investment transactions for the year ended October
31, 2000 amounted to $8,052,193, of which $1,183,776 was paid to Donaldson,
Lufkin & Jenrette ("DLJ"), and none was paid to brokers utilizing the services
of the Pershing Division of DLJ, each 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 $72,427,539 and $5,769,939 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 $3,374,035,602 and $2,320,558,163,
respectively, for the year ended October 31, 2000. There were no purchases and
sales of U.S. government and government agency obligations for the year ended
October 31, 2000.
At October 31, 2000, the cost of investments for federal income tax purposes
--------------------------------------------------------------------------------
20 o ALLIANCE GROWTH & INCOME FUND
<PAGE>
-----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
was 5,007,142,258. Accordingly, gross unrealized appreciation of investments was
$1,022,115,791 and gross unrealized depreciation of investments was $346,242,754
resulting in net unrealized appreciation of $675,873,037.
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, 2000, 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 con-
--------------------------------------------------------------------------------
ALLIANCE GROWTH & INCOME FUND o 21
<PAGE>
-----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
sists of 3,000,000,000 authorized shares. Transactions in capital stock were as
follows:
<TABLE>
<CAPTION>
---------------------------------- ----------------------------------
Shares Amount
---------------------------------- ----------------------------------
Year Ended Year Ended Year Ended Year Ended
October 31, October 31, October 31, October 31,
2000 1999 2000 1999
------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A
Shares sold 487,064,653 266,731,095 $ 1,829,910,853 $ 985,863,971
---------------------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends and
distributions 22,255,971 29,166,983 77,405,766 95,788,917
---------------------------------------------------------------------------------------------
Shares converted
from Class B 9,239,245 8,428,713 34,148,405 30,944,166
---------------------------------------------------------------------------------------------
Shares redeemed (402,520,081) (185,377,812) (1,502,358,489) (679,918,852)
---------------------------------------------------------------------------------------------
Net increase 116,039,788 118,948,979 $ 439,106,535 $ 432,678,202
=============================================================================================
Class B
Shares sold 252,761,952 315,902,586 $ 931,187,311 $ 1,159,077,903
---------------------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends and
distributions 26,889,604 25,381,823 91,466,838 82,271,405
---------------------------------------------------------------------------------------------
Shares converted
to Class A (9,358,491) (8,521,989) (34,148,405) (30,944,166)
---------------------------------------------------------------------------------------------
Shares redeemed (135,116,461) (60,128,994) (485,327,296) (216,203,721)
---------------------------------------------------------------------------------------------
Net increase 135,176,604 272,633,426 $ 503,178,448 $ 994,201,421
=============================================================================================
Class C
Shares sold 124,294,263 118,343,783 $ 458,133,872 $ 434,581,429
---------------------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends and
distributions 7,742,587 5,905,999 26,425,253 19,162,910
---------------------------------------------------------------------------------------------
Shares redeemed (68,407,621) (35,284,710) (245,520,287) (127,778,856)
---------------------------------------------------------------------------------------------
Net increase 63,629,229 88,965,072 $ 239,038,838 $ 325,965,483
=============================================================================================
Advisor Class
Shares sold 40,665,871 8,361,148 $ 155,973,468 $ 31,420,736
---------------------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends and
distributions 771,894 880,164 2,734,123 2,915,175
---------------------------------------------------------------------------------------------
Shares redeemed (6,667,310) (5,138,358) (24,775,821) (18,406,836)
---------------------------------------------------------------------------------------------
Net increase 34,770,455 4,102,954 $ 133,931,770 $ 15,929,075
=============================================================================================
</TABLE>
--------------------------------------------------------------------------------
22 o ALLIANCE GROWTH & INCOME FUND
<PAGE>
-----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
NOTE F
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, 2000.
NOTE G
Subsequent Event
On December 7, 2000, the Fund's stockholders approved an amendment of the
advisory fee payable by the Fund to Alliance Capital Management L.P., the Fund's
Adviser. Effective December 7, 2000, the advisory fee will be .625 of 1% of the
first $5 billion of the average daily net assets of the Fund, .60 of 1% of the
excess over $5 billion up to $7.5 billion, .575 of 1% of the excess over $7.5
billion up to $10 billion and .55 of 1% of the excess over $10 billion.
--------------------------------------------------------------------------------
ALLIANCE GROWTH & INCOME FUND o 23
<PAGE>
--------------------
FINANCIAL HIGHLIGHTS
--------------------
FINANCIAL HIGHLIGHTS
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
<TABLE>
<CAPTION>
---------------------------------------------------------------------------
Class A
---------------------------------------------------------------------------
Year Ended October 31,
---------------------------------------------------------------------------
2000 1999 1998 1997 1996
---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ....... $ 3.70 $ 3.44 $ 3.48 $ 3.00 $ 2.71
---------------------------------------------------------------------------
Income From Investment
Operations
Net investment income ........ .04(a) .03(a) .03(a) .04(a) .05
Net realized and unrealized
gain on investment
transactions .............. .54 .62 .43 .87 .50
---------------------------------------------------------------------------
Net increase in net asset
value from operations ..... .58 .65 .46 .91 .55
---------------------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income ......... (.04) (.03) (.04) (.05) (.05)
Distributions in excess of net
investment income ......... -0- (.01) -0- -0- -0-
Distributions from net
realized gains ............ (.17) (.35) (.46) (.38) (.21)
---------------------------------------------------------------------------
Total dividends and
distributions ............. (.21) (.39) (.50) (.43) (.26)
---------------------------------------------------------------------------
Net asset value,
end of period ............. $ 4.07 $ 3.70 $ 3.44 $ 3.48 $ 3.00
===========================================================================
Total Return
Total investment return based
on net asset value(b) ..... 16.76% 20.48% 14.70% 33.28% 21.51%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) ........... $2,128,381 $1,503,874 $988,965 $787,566 $553,151
Ratio of expenses to
average net assets ........ .91% .93% .93%(c) .92%(c) .97%
Ratio of net investment
income to average
net assets ................ .96% .87% .96% 1.39% 1.73%
Portfolio turnover rate ...... 53% 48% 89% 88% 88%
</TABLE>
See footnote summary on page 28.
--------------------------------------------------------------------------------
24 o ALLIANCE GROWTH & INCOME FUND
<PAGE>
--------------------
FINANCIAL HIGHLIGHTS
--------------------
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
<TABLE>
<CAPTION>
---------------------------------------------------------------------------
Class B
---------------------------------------------------------------------------
Year Ended October 31,
---------------------------------------------------------------------------
2000 1999 1998 1997 1996
---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ....... $ 3.66 $ 3.41 $ 3.45 $ 2.99 $ 2.69
---------------------------------------------------------------------------
Income From Investment
Operations
Net investment income ........ .01(a) -0-(a) .01(a) .02(a) .03
Net realized and unrealized
gain on investment
transactions .............. .54 .62 .43 .85 .51
---------------------------------------------------------------------------
Net increase in net asset
value from operations ..... .55 .62 .44 .87 .54
---------------------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income ......... (.02) -0- (.02) (.03) (.03)
Distributions in excess of net
investment income ......... -0- (.02) -0- -0- -0-
Distributions from net
realized gains ............ (.17) (.35) (.46) (.38) (.21)
---------------------------------------------------------------------------
Total dividends and
distributions ............. (.19) (.37) (.48) (.41) (.24)
---------------------------------------------------------------------------
Net asset value,
end of period ............. $ 4.02 $ 3.66 $ 3.41 $ 3.45 $ 2.99
===========================================================================
Total Return
Total investment return based
on net asset value(b) ..... 15.93% 19.56% 14.07% 31.83% 21.20%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) ........... $2,567,250 $1,842,045 $787,730 $456,399 $235,263
Ratio of expenses to
average net assets ........ 1.67% 1.70% 1.72%(c) 1.72%(c) 1.78%
Ratio of net investment
income to average
net assets ................ .20% .09% .17% .56% .91%
Portfolio turnover rate ...... 53% 48% 89% 88% 88%
</TABLE>
See footnote summary on page 28.
--------------------------------------------------------------------------------
ALLIANCE GROWTH & INCOME FUND o 25
<PAGE>
--------------------
FINANCIAL HIGHLIGHTS
--------------------
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
<TABLE>
<CAPTION>
----------------------------------------------------------------------
Class C
----------------------------------------------------------------------
Year Ended October 31,
----------------------------------------------------------------------
2000 1999 1998 1997 1996
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ....... $ 3.66 $ 3.41 $ 3.45 $ 2.99 $ 2.70
----------------------------------------------------------------------
Income From Investment
Operations
Net investment income ........ .01(a) -0-(a) .01(a) .02(a) .03
Net realized and unrealized
gain on investment
transactions .............. .54 .62 .43 .85 .50
----------------------------------------------------------------------
Net increase in net asset
value from operations ..... .55 .62 .44 .87 .53
----------------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income ......... (.02) -0- (.02) (.03) (.03)
Distributions in excess of net
investment income ......... -0- (.02) -0- -0- -0-
Distributions from net
realized gains ............ (.17) (.35) (.46) (.38) (.21)
----------------------------------------------------------------------
Total dividends and
distributions ............. (.19) (.37) (.48) (.41) (.24)
Net asset value,
end of period ............. $ 4.02 $ 3.66 $ 3.41 $ 3.45 $ 2.99
======================================================================
Total Return
Total investment return based
on net asset value(b) ..... 15.91% 19.56% 14.07% 31.83% 20.72%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) ........... $825,572 $518,185 $179,487 $106,526 $61,356
Ratio of expenses to
average net assets ........ 1.66% 1.69% 1.72%(c) 1.71%(c) 1.76%
Ratio of net investment
income to average
net assets ................ .21% .11% .18% .58% .93%
Portfolio turnover rate ...... 53% 48% 89% 88% 88%
</TABLE>
See footnote summary on page 28.
--------------------------------------------------------------------------------
26 o ALLIANCE GROWTH & INCOME FUND
<PAGE>
--------------------
FINANCIAL HIGHLIGHTS
--------------------
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,
2000 1999 1998 1997 1996
----------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ....... $ 3.71 $ 3.44 $ 3.48 $ 3.00 $ 2.97
----------------------------------------------------------------
Income From Investment
Operations
Net investment income ........ .05(a) .04(a) .04(a) .05(a) -0-
Net realized and unrealized
gain on investment
transactions .............. .54 .63 .43 .87 .03
----------------------------------------------------------------
Net increase in net asset
value from operations ..... .59 .67 .47 .92 .03
----------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income ......... (.05) (.04) (.05) (.06) -0-
Distributions in excess of net
investment income ......... -0- (.01) -0- -0- -0-
Distributions from net
realized gains ............ (.17) (.35) (.46) (.38) -0-
----------------------------------------------------------------
Total dividends and
distributions ............. (.22) (.40) (.51) (.44) -0-
----------------------------------------------------------------
Net asset value,
end of period ............. $ 4.08 $ 3.71 $ 3.44 $ 3.48 $ 3.00
================================================================
Total Return
Total investment return based
on net asset value(b) ..... 16.98% 21.03% 14.96% 33.61% 1.01%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) ........... $185,754 $39,739 $22,786 $3,207 $87
Ratio of expenses to
average net assets ........ .65% .68% .76%(c) .71%(c) .37%(e)
Ratio of net investment
income to average
net assets ................ 1.21% 1.12% 1.14% 1.42% 3.40%(e)
Portfolio turnover rate ...... 53% 48% 89% 88% 88%
</TABLE>
See footnote summary on page 28.
--------------------------------------------------------------------------------
ALLIANCE GROWTH & INCOME FUND o 27
<PAGE>
--------------------
FINANCIAL HIGHLIGHTS
--------------------
(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.
--------------------------------------------------------------------------------
28 o ALLIANCE GROWTH & INCOME FUND
<PAGE>
---------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
---------------------------------
REPORT OF INDEPENDENT
ACCOUNTANTS
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, 2000, 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 accounting principles generally accepted in the
United States of America. 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 auditing standards generally accepted in
the United States of America, 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, 2000 by
correspondence with the custodian and brokers, provide a reasonable basis for
our opinion.
PricewaterhouseCoopers LLP
New York, New York
December 8, 2000
TAX INFORMATION
(unaudited)
In order to meet certain requirements of the Internal Revenue Code we are
advising you that the Fund paid $149,988,524 of capital gain distributions
during the fiscal year ended October 31, 2000, 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 2001.
--------------------------------------------------------------------------------
ALLIANCE GROWTH & INCOME FUND o 29
<PAGE>
-------------------------------
RESULTS OF SHAREHOLDERS MEETING
-------------------------------
RESULTS OF SHAREHOLDERS MEETING
(unaudited)
On December 7, 2000, the Fund's stockholders approved an amendment of the
advisory fee payable by the Fund to Alliance Capital Management L.P., the Fund's
Adviser. The number of voted shares are as follows:
Voted
Abstain/
Voted Voted Authority
For Against Withheld
================================================================================
1. Approval of an amendment to
the Fund's Investment Advisory
Agreement: 558,935,197 119,080,896 319,655,301
--------------------------------------------------------------------------------
30 o ALLIANCE GROWTH & INCOME FUND
<PAGE>
----------------------------
GLOSSARY OF INVESTMENT TERMS
----------------------------
GLOSSARY OF INVESTMENT TERMS
basis point (bp)
One basis point equals 0.01%.
benchmark
A standard by which a fund's performance can be measured. A benchmark is usually
an unmanaged index, such as the Standard & Poor's 500 Stock Index or the Lehman
Brothers Aggregate Bond Index.
equity
Another term for stock.
Federal Reserve Board
The seven-member board that oversees Federal Reserve Banks, establishes monetary
policy and monitors the country's economic state.
index
A compilation of securities of similar types of companies that is used to
measure the investment performance of securities within that specific market. An
index is often used as a benchmark for a mutual fund. An investor cannot invest
directly in an index.
net asset value (NAV)
The value of a mutual fund's total assets, minus its liabilities, divided by the
number of shares outstanding.
portfolio
The collection of securities that make up a Fund's or an investor's investments.
sector
A distinct part of the economy, for example, the technology sector.
share
A unit which represents ownership in a mutual fund or stock.
Securities Exchange Commission (SEC)
The federal agency that regulates the United States' securities markets and
mutual funds.
--------------------------------------------------------------------------------
ALLIANCE GROWTH & INCOME FUND o 31
<PAGE>
----------------
ALLIANCE CAPITAL
----------------
ALLIANCE CAPITAL
The Investment Professional's Choice
Alliance Capital is a leading global investment management firm with over $474
billion in assets under management. In recognition of our far-reaching
investment capabilities, Alliance Capital has been selected by employee benefit
plans for 38 of the FORTUNE 100 companies and public retirement funds in 35
states as well as by hundreds of foundations, endowments and foreign
institutions. By sharing this institutional money management experience with
millions of mutual fund investors as well, Alliance stands out as a "manager of
choice" for thousands of investment professionals around the world.
At Alliance Capital, we place a premium on investment research. We carefully
select securities based on our proprietary research, conducted by over 585
investment professionals in 28 investment offices worldwide. Our commitment to
this process means that our mutual fund shareholders have their portfolios
managed by the same experienced analysts and portfolio managers who manage the
pension funds of some of America's largest institutional investors.
All information on Alliance Capital is as of 10/2/00.
--------------------------------------------------------------------------------
32 o ALLIANCE GROWTH & INCOME FUND
<PAGE>
--------------------------------
ALLIANCE CAPITAL AT YOUR SERVICE
--------------------------------
ALLIANCE CAPITAL AT YOUR SERVICE
At Alliance Capital, shareholder satisfaction is among our top priorities.
That's why we provide our shareholders with a wide variety of products and
time-saving services to meet their needs.
o Low Minimum Investments
You can begin investing in Alliance Capital funds with as little as $250
(except for Alliance Select Investor Series Premier Portfolio, Alliance
Select Investor Series Technology Portfolio, and Alliance Select Investor
Series Biotechnology Portfolio which generally have a $10,000 minimum
initial investment) and may make subsequent investments of $50 or more.
o Automatic Reinvestment
You may choose to reinvest fund dividend and capital-gains distributions
automatically at no charge.
o Automatic Investment Program
Build your investment account by having money automatically transferred
from your bank account on a regular basis.
o Dividend Direction Plans
You may cross-invest dividends from one fund into the same class of shares
in any other fund without incurring a sales charge. This can be a good way
to diversify your assets.
o The Alliance Advance
A quarterly newsletter discussing investment strategies, economic news and
other matters that could affect your mutual fund investment.
o Auto Exchange
You may choose to automatically exchange money from one Alliance Capital
fund to another on a regular basis. This can be a good way to dollar cost
average*, helping you to invest with discipline.
o Systematic Withdrawals
Regular checks for specified amounts can be sent to you or to your
brokerage or bank account.
o A Choice of Purchase Plans
Most funds are available in A, B, and C Class shares. Many funds are also
available in Advisor Class shares.
o Telephone Transaction
Purchases, transfers and redemptions can be made by calling (800)
221-5672. Our knowledgeable representatives are available to assist you
Monday through Friday from 8:30 a.m. to 8:00 p.m. Eastern Standard Time.
o Alliance Answer: 24-Hour Information
For your convenience, our computerized audio response system is available
to you 24-hours a day by calling (800) 251-0539. Using any touch tone
phone, you can hear share prices, get account balances, review details of
your last transaction, obtain dividend information, order
statements/checkbooks, review fund objectives, literature and Watchlist
information, order additional copies of statements and request additional
year-end tax forms (available from February 1 to May 31).
o Alliance Capital on the World Wide Web at www.alliancecapital.com. Here,
you can access updated account information, make additional investments,
request more information, exchange between Alliance funds and view fund
performance, press releases and articles.
* Dollar cost averaging does not assure a profit nor protect against loss in
a declining market. Since this strategy involves continuous investments in
securities, regardless of fluctuating prices, investors should consider
their financial ability to invest during periods of low price levels.
--------------------------------------------------------------------------------
ALLIANCE GROWTH & INCOME FUND o 33
<PAGE>
------------------
BOARD OF DIRECTORS
------------------
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
Joel Swanson, 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 (800)-221-5672
Independent Accountants
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, NY 10036-2798
(1) Member of the Audit Committee.
--------------------------------------------------------------------------------
34 o ALLIANCE GROWTH & INCOME FUND
<PAGE>
--------------------------------
ALLIANCE CAPITAL FAMILY OF FUNDS
--------------------------------
ALLIANCE CAPITAL FAMILY OF FUNDS
Domestic Equity Funds
Balanced Shares
Conservative Investors Fund
Disciplined Value Fund
Growth & Income Fund
Growth Fund
Growth Investors Fund
Health Care Fund
Premier Growth Fund
Quasar Fund
Real Estate Investment Fund
Technology Fund
The Alliance Fund
Utility Income Fund
Global & International Equity Funds
All-Asia Investment Fund
Global Small Cap Fund
Greater China '97 Fund
International Fund
International Premier Growth Fund
New Europe Fund
Worldwide Privatization Fund
Select Investor Series
Biotechnology Portfolio
Premier Portfolio
Technology Portfolio
Fixed Income Funds
Corporate Bond Portfolio
Global Dollar Government Fund
Global Strategic Income Trust
High Yield Fund
Multi-Market Strategy Trust
North American Government Income Trust
Quality Bond Portfolio
U.S. Government Portfolio
Municipal Income Funds
National
Insured National
Arizona
California
Insured California
Florida
Massachusetts
Michigan
Minnesota
New Jersey
New York
Ohio
Pennsylvania
Virginia
Closed-End Funds
All-Market Advantage Fund
The Austria Fund
ACM Government Income Fund
ACM Government Opportunity Fund
The Korean Investment Fund
ACM Managed Dollar Income Fund
ACM Managed Income Fund
ACM Municipal Securities Income Fund
The Southern Africa Fund
The Spain Fund
World Dollar Government Fund
World Dollar Government Fund II
Alliance also offers AFD Exchange Reserves, which serves as the money market
fund exchange vehicle for the Alliance mutual funds.
To obtain a prospectus for any Alliance Capital fund, call your investment
professional, or call Alliance at (800) 227-4618.
--------------------------------------------------------------------------------
ALLIANCE GROWTH & INCOME FUND o 35
<PAGE>
NOTES
--------------------------------------------------------------------------------
36 o ALLIANCE GROWTH & INCOME FUND
<PAGE>
Alliance Growth and Income Fund
1345 Avenue of the Americas
New York, NY 10105
(800) 221-5672
Alliance Capital[LOGO](R)
The Investment Professional's Choice
(R) These registered service marks used under license from the owner, Alliance
Capital Management L.P.
GTHAR1000
