ALLIANCE
----------------------------
NORTH AMERICAN
----------------------------
GOVERNMENT
----------------------------
INCOME TRUST
----------------------------
Annual Report
November 30, 1999
Alliance Capital[LOGO](R)
<PAGE>
Alliance North American
LETTER TO SHAREHOLDERS Government Income Trust
================================================================================
December 28, 1999
Dear Shareholder:
We are pleased to report to you on our performance, investment strategy, and
outlook for the Alliance North American Government Income Trust (the "Fund"),
for the reporting period ended November 30, 1999. The Fund is designed for
investors who seek high current income, consistent with what we believe to be
prudent investment risk, from a portfolio of debt securities issued or
guaranteed by the governments of the United States, Canada, Mexico and
Argentina.
INVESTMENT RESULTS
The following table shows how your Fund performed over the six- and twelve-month
periods ended November 30, 1999. For comparison, we have included the
performance for the Lehman Brothers Aggregate Bond Index, which is a standard
measure of the performance of the overall U.S. bond market, and the Lehman
Brothers Intermediate-Term Government Bond Index, which measures the performance
of U.S. bonds in the one- to ten-year maturity range.
We are pleased to report to you that your Fund outperformed both the Lehman
Brothers Aggregate Bond Index and the Lehman Brothers Intermediate-Term
Government Bond Index for both the six- and twelve-month periods ended November
30, 1999. Your Fund's allocation to the emerging markets, Mexico and Argentina,
helped the Fund outperform the indexes for both periods. Neither index holds
emerging market debt.
INVESTMENT RESULTS*
Periods Ended November 30, 1999
Total Returns
6 Months 12 Months
------------- -------------
Alliance North American
Government Income
Trust
Class A 4.73% 8.56%
Class B 4.32% 7.79%
Class C 4.32% 7.79%
Lehman Brothers
Aggregate Bond
Index 0.72% -0.04%
Lehman Brothers
Intermediate-Term
Government Bond
Index 1.43% 1.20%
* The Fund's investment results are total returns for the periods and are
based on the net asset value of each class of shares. 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. Past performance is no guarantee of future results.
The Lehman Brothers Aggregate Bond Index is composed of the Lehman
Brothers Mortgage-Backed Securities Index, the Lehman Brothers
Asset-Backed Securities Index and the Lehman Brothers
Government~/~Corporate Bond Index. The Lehman Brothers Intermediate-Term
Government Bond Index measures performance of bonds in the one- to
ten-year maturity range. An investor cannot invest directly in an index.
Additional investment results appear on page 3.
MARKET OVERVIEW
During the six-month period ended November 30, 1999, global economic growth
improved and continued to broaden as Europe, Japan and Asia showed further signs
of strengthening. U.S. economic growth remained strong, while inflation and
unemployment stayed low. With economic activity remaining strong and global
liquidity concerns abating, the U.S. Federal Reserve increased the Federal Funds
rate three times during the period, from 4.75% to 5.50%. This reversed the three
interest rate cuts enacted late last year in response to the global liquidity
crisis. In aggregate, the U.S. bond market, as represented by the Lehman
Brothers U.S. Aggregate Index, gained 0.72% for the six-month period.
Emerging market debt performed well over the period as global economic growth
improved and commodity prices firmed. The emerging market debt sector, as
represented by the JP Morgan Emerging Markets Bond Index-Plus (the "JPM EMBI+"),
gained 13.43% outperforming all
1
<PAGE>
Alliance North American
Government Income Trust
================================================================================
other bond market sectors during the six-month period ended November 30, 1999.
Most individual country returns within the JPM EMBI+ were positive during the
period with Russia (+87%) posting the largest gains and Bulgaria (+29%) and
Brazil (+27%) also outperforming. Rising oil prices along with progress in
restructuring Soviet-era debt helped the performance of Russian debt. In Latin
America, Brazil exceeded investor expectations for fiscal reform after devaluing
its currency at the beginning of the year.
Over the six-month period ended November 30, 1999, Mexico continued to benefit
from its membership in the North American Free Trade Agreement and the long-term
convergence of its economy with that of the United States. Within the JPM EMBI+,
Mexican debt posted a strong 15% return during the six months. Mexico's
increasing integration with the U.S. continues to provide a stable platform for
economic growth. In addition, conservative fiscal policies and a free-floating
exchange rate have allowed the economy to recover more quickly from external
shocks, distinguishing Mexico from its regional peers.
Additionally, Argentinean government bonds, as represented in the JPM EMBI+,
performed well (+19%) over the period, helped by strong global growth, improving
regional economic fundamentals and a smooth political transition following
elections in October of 1999.
Conversely, Canadian government bonds, as represented within the JP Morgan
Global Bond Index, declined by 1% during the six-month period ended November 30,
1999, as economic growth picked up and the Canadian central bank followed the
U.S. Federal Reserve by raising official interest rates by 25 basis points in
November, to 5.00%.
INVESTMENT STRATEGY
Over the period, we maintained the portfolio's country weighting consistent with
the investment objectives of the Fund while securing a high level of current
income. The portfolio continued to be invested in Mexican, Argentinean and
Canadian debt, as well as U.S. government obligations.
OUTLOOK
The global economy continues to gather momentum. We expect the U.S. economy to
remain strong through year-end and into the millennium. The risk of tighter
monetary policy in the U.S. remains. Positive inflation fundamentals however,
should keep long-term interest rates trading in a range between 6.00% and 6.50%.
Stronger global growth coupled with the recent firming in commodity prices will
continue to provide the environment necessary for emerging countries to
gradually improve their credit profiles. In Mexico, a stronger-than-expected
third quarter economic growth rate, along with a positive political outlook,
increase the chances that Mexico will be upgraded to investment-grade status in
2000. In Argentina, reasonable fiscal budget expectations combined with
strengthening economic growth underpin our positive outlook for Argentinean
debt.
Thank you for your continued interest and investment in the Alliance North
American Government Income Trust. We look forward to reporting to you again on
market activity and the Fund's investment results in the coming periods.
Sincerely,
/s/ John D. Carifa
John D. Carifa
Chairman
/s/ Wayne D. Lyski
Wayne D. Lyski
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
- --------------------------------------------------------------------------------
2
<PAGE>
Alliance North American
INVESTMENT OBJECTIVE AND POLICIES Government Income Trust
================================================================================
Alliance North American Government Income Trust is an open-end, non-diversified
investment company with an investment objective of seeking the highest level of
current income, consistent with what we believe to be prudent investment risk,
from a portfolio of debt securities issued or guaranteed by the governments of
the United States, Canada, and Mexico. The Trust's investment policies provide
that the Trust expects to maintain at least 25% of its assets in
U.S.-dollar-denominated securities and may invest up to 25% of its total assets
in debt securities issued by governmental entities in Argentina.
INVESTMENT RESULTS
================================================================================
NAV and SEC Average Annual Total Returns as of November 30, 1999
------------------
CLASS A SHARES
------------------
Without With
Sales Charge Sales Charge
----------------------------
1 Year 8.56% 3.91%
5 Years 11.34% 10.38%
Since Inception* 8.52% 7.92%
SEC Yield** 9.89%
------------------
CLASS B SHARES
------------------
Without With
Sales Charge Sales Charge
----------------------------
One Year 7.79% 4.90%
Five Years 10.40% 10.40%
Since Inception* (a) 7.83% 7.83%
SEC Yield** 9.56%
------------------
CLASS C SHARES
------------------
Without With
Sales Charge Sales Charge
----------------------------
One Year 7.79% 6.83%
Five Years 10.40% 10.40%
Since Inception* 7.15% 7.15%
SEC Yield** 9.56%
SEC Average Annual Total Returns as of the most recent quarter-end (December 31,
1999)
Class A Class B Class C
------- ------- -------
1 Year 3.24% 4.10% 6.15%
5 Years 15.54% 15.52% 15.56%
Since Inception* 7.89% 7.80% 7.12%
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 (3% year 1, 2% year 2, 1% year 3, 0% 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.
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: 3/27/92 Class A and Class B; 5/3/93 Class C.
** SEC yields are for the 30 days ended November 30, 1999.
(a) Assumes conversion of Class B shares into Class A shares after six years.
3
<PAGE>
Alliance North American
Government Income Trust
================================================================================
ALLIANCE NORTH AMERICAN GOVERNMENT INCOME TRUST
GROWTH OF A $10,000 INVESTMENT
3/31/92* to 11/30/99
[GRAPHIC OMITTED]
[The following information was depicted as a chart in the printed material.]
Alliance North American Government Income Trust Class A:
$17,930
Lehman Brothers Aggregate Bond Index:
$16,904
Lehman Brothers Intermediate-Term Government Bond Index
$16,108
This chart illustrates the total value of an assumed $10,000 investment in
Alliance North American Government Income Trust Class A shares (from 3/31/92 to
11/30/99) as compared to the performance of appropriate broad-based indices. 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 and Class C 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 Lehman Brothers (LB) Aggregate Bond Index is composed of the
LB Mortgage-Backed Securities Index, the LB Asset-Backed Securities Index and
the LB Government/ Corporate Bond Index.
The unmanaged Lehman Brothers Intermediate-Term Government Bond Index
measures the performance of bonds with maturities of one to ten years.
When comparing Alliance North American Government Income Trust to the
indices shown above, you should note that no charges or expenses are reflected
in the performance of the indices.
- -------------------------------------------------------------------------
[GRAPHIC OMITTED] Alliance North American Government Income Trust
[GRAPHIC OMITTED] Lehman Brothers Aggregate Bond Index
[GRAPHIC OMITTED] Lehman Brothers Intermediate-Term Government Bond Index
- -------------------------------------------------------------------------
- --------------------------------------------------------------------------------
* Closest month-end after the Fund's Class A share inception date of
3/27/92.
4
<PAGE>
PORTFOLIO OF INVESTMENTS Alliance North American
November 30, 1999 Government Income Trust
================================================================================
Principal
Amount
(000) U.S. $ Value
- --------------------------------------------------------------------------------
ARGENTINA-27.5%
GOVERNMENT
OBLIGATIONS-27.5%
Republic of Argentina
Supplier-Bocon
Pre III Series 2 FRN
2.79%, 9/01/02................... ARS 112,564 $ 96,721,009
Pro 1 FRN
2.79%, 4/01/07................... 668,027 453,764,964
-------------
Total Argentinian Securities
(cost $571,926,332).............. 550,485,973
-------------
CANADA-12.0%
GOVERNMENT/AGENCY
OBLIGATIONS-12.0%
Province of British
Columbia
7.88%, 11/30/23.................. CA$ 36,000 27,304,950
8.00%, 9/08/23................... 24,600 19,258,057
9.00%, 8/23/24................... 25,000 21,649,352
Province of Manitoba
7.75%, 12/22/25.................. 60,200 46,555,157
Province of Ontario
7.75%, 12/08/03.................. 20,000 14,249,338
Province of Quebec
9.38%, 1/16/23................... 53,600 47,373,781
Province of Saskatchewan
9.60%, 2/04/22................... 24,600 22,462,387
Quebec Hydro
Zero coupon, 8/15/20 (a) ........ 250,000 40,931,622
-------------
Total Canadian Securities
(cost $231,103,802).............. 239,784,644
-------------
MEXICO-28.8%
GOVERNMENT/AGENCY
OBLIGATIONS-28.8%
Bankers Acceptances
Nacional Financiera
S.N.C. (b)
16.50%, 12/26/03................. MXP 414,125 $ 13,604,213
16.95%, 12/24/03................. 81,401 2,676,536
17.50%, 12/11/03................. 55,253 1,827,824
22.00%, 5/20/02 (c).............. 580,000 63,859,705
Mexican Treasury Bills (b)
20.49%, 10/12/00................. 189,902 17,321,513
21.42%, 5/11/00.................. 250,000 24,487,955
21.63%, 6/08/00.................. 40,000 3,867,134
21.85%, 4/13/00.................. 645,463 64,080,528
22.44%, 9/07/00.................. 802,421 74,383,401
23.17%, 7/13/00.................. 731,315 69,576,969
23.75%, 3/09/00.................. 437,633 44,213,751
25.33%, 1/13/00.................. 707,350 73,527,467
26.03%, 2/10/00.................. 1,190,608 121,865,769
-------------
Total Mexican Securities
(cost $641,999,172).............. 575,292,765
-------------
UNITED STATES-47.3%
GOVERNMENT
OBLIGATIONS-47.3%
U.S. Treasury Bonds
5.25%, 11/15/28.................. US$ 35,000 29,564,080
5.25%, 2/15/29................... 155,700 132,101,797
6.75%, 8/15/26................... 55,000 56,581,250
8.13%, 8/15/19................... 208,850 243,114,558
11.75%,11/15/14.................. 64,000 88,180,032
12.38%, 5/15/04.................. 60,700 74,926,562
12.50%, 8/15/14.................. 69,000 98,217,222
13.75%, 8/15/04.................. 60,000 78,000,000
14.00%, 11/15/11................. 11,900 16,875,688
U.S. Treasury Notes
5.50%, 5/15/09................... 48,000 45,675,024
U.S. Treasury Strips
Zero coupon, 8/15/12............. 52,000 22,562,956
Zero coupon, 5/15/13............. 137,000 56,367,965
Zero coupon, 5/15/14............. 13,400 5,146,752
-------------
Total United States
Securities
(cost $1,018,889,354) ........... 947,313,886
-------------
5
<PAGE>
Alliance North American
PORTFOLIO OF INVESTMENTS (continued) Government Income Trust
================================================================================
U.S. $ Value
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS-115.6%
(cost $2,463,918,660) $2,312,877,268
Other assets less
liabilities-(15.6)%.............. (312,317,908)
--------------
NET ASSETS-100%..................... $2,000,559,360
==============
- --------------------------------------------------------------------------------
(a) Private Placement.
(b) Interest rate represents annualized yield to maturity at purchase date.
(c) 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 November 30,
1999, the value of this security amounted to $63,859,705 or 3.2% of net
assets.
Glossary:
FRN - Floating Rate Note.
See notes to financial statements.
6
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES Alliance North American
November 30, 1999 Government Income Trust
================================================================================
<TABLE>
<S> <C>
ASSETS
Investments in securities, at value (cost $2,463,918,660) .......................... $ 2,312,877,268
Interest receivable ................................................................ 29,788,702
Receivable for capital stock sold .................................................. 29,668,793
Receivable for investment securities sold .......................................... 11,079,507
Other assets ....................................................................... 188,407
---------------
Total assets ....................................................................... 2,383,602,677
---------------
LIABILITIES
Due to custodian ................................................................... 4,705,505
Loan payable ....................................................................... 250,000,000
Payable for investment securities purchased ........................................ 84,041,032
Payable for capital stock redeemed ................................................. 30,527,475
Dividend payable ................................................................... 6,150,828
Loan interest payable .............................................................. 3,733,813
Advisory fee payable ............................................................... 1,216,589
Distribution fee payable ........................................................... 375,026
Accrued expenses and other liabilities ............................................. 2,293,049
---------------
Total liabilities .................................................................. 383,043,317
---------------
NET ASSETS ............................................................................ $ 2,000,559,360
===============
COMPOSITION OF NET ASSETS
Capital stock, at par .............................................................. $ 274,146
Additional paid-in capital ......................................................... 2,290,784,471
Distributions in excess of net investment income ................................... (22,511,086)
Accumulated net realized loss on investments and foreign currency transactions ..... (117,404,017)
Net unrealized depreciation of investments and foreign currency denominated assets
and liabilities .................................................................... (150,584,154)
---------------
$ 2,000,559,360
===============
CALCULATION OF MAXIMUM OFFERING PRICE
Class A Shares
Net asset value and redemption price per share ($730,468,481 / 100,330,172 shares of
capital stock issued and outstanding) ............................................ $7.28
Sales Charge--4.25% of public offering price ....................................... 0.32
-----
Maximum offering price ............................................................. $7.60
=====
Class B Shares
Net asset value and offering price per share ($1,011,394,495 / 138,415,536 shares of
capital stock issued and outstanding) ............................................ $7.31
=====
Class C Shares
Net asset value and offering price per share ($258,696,384 / 35,400,690 shares of
capital stock issued and outstanding) ............................................ $7.31
</TABLE>
- --------------------------------------------------------------------------------
See notes to financial statements.
7
<PAGE>
STATEMENT OF OPERATIONS Alliance North American
Year Ended November 30, 1999 Government Income Trust
================================================================================
<TABLE>
<S> <C> <C>
INVESTMENT INCOME
Interest (net of foreign taxes withheld of $185,367)................. $ 289,123,699
EXPENSES
Advisory fee......................................................... $ 15,278,301
Distribution fee - Class A........................................... 1,923,561
Distribution fee - Class B........................................... 11,921,297
Distribution fee - Class C........................................... 2,671,912
Transfer agency...................................................... 3,183,363
Custodian............................................................ 2,878,809
Printing............................................................. 363,814
Taxes................................................................ 191,551
Audit and legal...................................................... 186,297
Administrative....................................................... 131,752
Registration......................................................... 106,622
Directors' fees...................................................... 24,183
Miscellaneous........................................................ 39,322
--------------
Total expenses before interest....................................... 38,900,784
Interest expense..................................................... 14,985,644
--------------
Total expenses....................................................... 53,886,428
--------------
Net investment income................................................ 235,237,271
--------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS
Net realized gain on investment transactions......................... 14,072,829
Net realized loss on foreign currency transactions................... (52,400,330)
Net change in unrealized depreciation of:
Investments........................................................ (39,525,587)
Foreign currency denominated assets and liabilities................ 2,900,649
--------------
Net loss on investments.............................................. (74,952,439)
--------------
NET INCREASE IN NET ASSETS FROM OPERATIONS.............................. $ 160,284,832
==============
</TABLE>
- --------------------------------------------------------------------------------
See notes to financial statements.
8
<PAGE>
Alliance North American
STATEMENT OF CHANGES IN NET ASSETS Government Income Trust
================================================================================
<TABLE>
<CAPTION>
Year Ended Year Ended
November 30, November 30,
1999 1998
--------------- ---------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment income ................................................... $ 235,237,271 $ 245,862,749
Net realized gain (loss) on investments and foreign currency transactions (38,327,501) 20,178,723
Net change in unrealized depreciation of investments and foreign currency
denominated assets and liabilities .................................... (36,624,938) (130,364,332)
--------------- ---------------
Net increase in net assets from operations .............................. 160,284,832 135,677,140
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A ............................................................... (55,301,588) (74,201,378)
Class B ............................................................... (95,738,434) (141,961,151)
Class C ............................................................... (21,442,440) (29,700,220)
Distributions in excess of net investment income
Class A ............................................................... (9,084,333) (5,401,762)
Class B ............................................................... (15,726,851) (10,316,188)
Class C ............................................................... (3,522,327) (2,143,419)
Tax return of captial
Class A ............................................................... (15,397,175) (2,554,780)
Class B ............................................................... (26,655,679) (4,887,773)
Class C ............................................................... (5,970,046) (1,022,589)
CAPITAL STOCK TRANSACTIONS
Net increase (decrease) ................................................. (227,545,571) 279,531,511
--------------- ---------------
Total increase (decrease) ............................................... (316,099,612) 143,019,391
NET ASSETS
Beginning of year ....................................................... 2,316,658,972 2,173,639,581
--------------- ---------------
End of year ............................................................. $ 2,000,559,360 $ 2,316,658,972
=============== ===============
</TABLE>
- --------------------------------------------------------------------------------
See notes to financial statements.
9
<PAGE>
STATEMENT OF CASH FLOWS Alliance North American
Year Ended November 30, 1999 Government Income Trust
================================================================================
<TABLE>
<S> <C> <C>
INCREASE (DECREASE) IN CASH FROM:
OPERATING ACTIVITIES:
Interest received.................................................... $ 104,493,302
Interest paid........................................................ (14,847,903)
Operating expenses paid.............................................. (39,084,035)
--------------
Net increase in cash from operating activities....................... $ 50,561,364
INVESTING ACTIVITIES:
Proceeds from sale of short-term portfolio investments, net.......... 458,056,440
Purchases of long-term portfolio investments......................... (3,061,448,381)
Proceeds from disposition of long-term portfolio investments......... 3,029,084,976
--------------
Net increase in cash from investing activities....................... 425,693,035
FINANCING ACTIVITIES*:
Redemptions of capital stock, net.................................... (225,403,553)
Cash dividends paid.................................................. (250,488,926)
Cash overdraft....................................................... 4,705,505
--------------
Net decrease in cash from financing activities....................... (471,186,974)
Effect of exchange rate on cash...................................... (5,156,351)
--------------
Net decrease in cash................................................. (88,926)
Cash at beginning of year............................................ 88,926
--------------
Cash at end of year.................................................. $ -0-
==============
- ---------------------------------------------------------------------------------------------------------------
RECONCILIATION OF NET INCREASE IN NET ASSETS
FROM OPERATIONS TO NET INCREASE IN CASH FROM
OPERATING ACTIVITIES:
Net increase in net assets from operations........................... $ 160,284,832
ADJUSTMENTS:
Increase in interest receivable...................................... $ (5,997,191)
Net realized gain on investment transactions......................... (14,072,829)
Net change in unrealized depreciation................................ 36,624,938
Accretion of bond discount........................................... (178,633,205)
Decrease in accrued expenses and other liabilities................... (45,511)
Net realized loss on foreign currency transactions................... 52,400,330
--------------
(109,723,468)
--------------
Net increase in cash from operating activities....................... $ 50,561,364
==============
</TABLE>
- --------------------------------------------------------------------------------
* Non-cash financing activities not included herein consist of reinvestment
of dividends.
See notes to financial statements.
10
<PAGE>
NOTES TO FINANCIAL STATEMENTS Alliance North American
November 30, 1999 Government Income Trust
================================================================================
NOTE A: Significant Accounting Policies
Alliance North American Government Income Trust, Inc. (the "Fund") was
incorporated in the State of Maryland on February 3, 1992 as a non-diversified,
open-end management investment company. The Fund offers Class A, Class B and
Class C shares. Class A shares are sold with a front-end sales charge of up to
4.25% for purchases not exceeding $1,000,000. With respect to purchases of
$1,000,000 or more, Class A shares redeemed within one year of purchase may be
subject to a contingent deferred sales charge of 1%. Class B shares are sold
with a contingent deferred sales charge which declines from 3% to zero depending
on the period of time the shares are held. Class B shares will automatically
convert to Class A shares six years after the end of the calendar month of
purchase. Class C shares are subject to a contingent deferred sales charge of 1%
on redemptions made within the first year after purchase. All three classes of
shares have identical voting, dividend, liquidation and other rights 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 sale price or, if there was no sale on such day, the
last bid price quoted on such day. If no bid prices are quoted, then the
security is valued at the mean of the bid and asked prices as obtained on that
day from one or more dealers regularly making a market in that security.
Securities traded on the over-the-counter market, securities listed on a foreign
securities exchange whose operations are similar to the United States
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 closing bid and asked price provided by two or more dealers regularly
making a market in such securities. U.S. government securities and other debt
securities which mature in 60 days or less are valued at amortized cost unless
this method does not represent fair value. Securities for which market
quotations are not readily available are valued at fair value as determined in
good faith by, or in accordance with procedures approved by, the Board of
Directors. Fixed income securities may be valued on the basis of prices provided
by a pricing service when such prices are believed to reflect the fair market
value of such securities.
2. Currency Translation
Assets and liabilities denominated in foreign currencies and commitments under
forward exchange currency contracts are translated into U.S. dollars at the mean
of the quoted bid and asked price of such currencies against the U.S. dollar.
Purchases and sales of portfolio securities are translated at the rates of
exchange prevailing when such securities were acquired or sold. Income and
expenses are translated at rates of exchange prevailing when accrued.
Net realized gains or losses on foreign currency transactions represent foreign
exchange gains and losses from sales and maturities of foreign securities and
forward exchange currency contracts, holding of foreign currencies, exchange
gains or losses realized between the trade and settlement dates on investment
transactions, and the difference between the amounts of interest recorded on the
Fund's books and the U.S. dollar equivalent of the amounts actually received or
paid. Net change in unrealized appreciation/depreciation of foreign currency
denominated assets and liabilities represents net currency gains and losses from
valuing foreign currency denominated assets and liabilities at period end
exchange rates.
3. Taxes
It is the Fund's policy to meet the requirements of the Internal Revenue Code
applicable to regulated investment companies and to distribute all of its
investment company taxable income and net realized gains, if any, to
shareholders. Therefore, no provisions for federal income or excise taxes are
required.
11
<PAGE>
Alliance North American
NOTES TO FINANCIAL STATEMENTS (continued) Government Income Trust
================================================================================
4. Investment Income and Investment Transactions
Interest income is accrued daily. Investment transactions are accounted for on
the date securities are purchased or sold. Investment gains and losses are
determined on the identified cost basis. The Fund accretes discount as an
adjustment to interest income.
5. Income and Expenses
All income earned and expenses incurred by the Fund are borne on a pro-rata
basis by each settled class of shares, based on the proportionate interest in
the Fund represented by the shares 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.
6. Dividends and Distributions
Dividends and distributions to shareholders are recorded on the ex-dividend
date. Income and capital gains distributions are determined in accordance with
federal tax regulations and may differ from those determined in accordance with
generally accepted accounting principles. To the extent these differences are
permanent, such amounts are reclassified within the capital accounts based on
their federal tax basis treatment; temporary differences do not require such
reclassification. During the current fiscal year, permanent differences,
primarily due to foreign currency losses, tax return of capital and distribution
in excess of net investment income, resulted in a net decrease in accumulated
net realized loss on investments and foreign currency transactions, a decrease
in distributions in excess of net investment income and a corresponding decrease
to additional paid-in capital. This reclassification had no effect on net
assets.
- --------------------------------------------------------------------------------
NOTE B: Advisory Fee and Other Transactions with Affiliates
Under the terms of an investment advisory agreement, the Fund pays Alliance
Capital Management L.P. (the "Adviser") an advisory fee at an annual rate of .65
of 1% of the average adjusted daily net assets of the Fund. Such fee is accrued
daily and paid monthly.
Pursuant to the advisory agreement, the Fund paid the Adviser $131,752
representing the cost of certain legal and accounting services provided to the
Fund by the Adviser for the year ended November 30, 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 $2,027,211 for the year ended November 30, 1999.
For the year ended November 30, 1999, the Fund's expenses were reduced by
$143,408 under an expense offset arrangement with Alliance Fund Services, Inc.
Alliance Fund Distributors, Inc. (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 $255,507 from the sale of
Class A shares and $10,654, $1,428,955 and $90,934 in contingent deferred sales
charges imposed upon redemptions by shareholders of Class A, Class B and Class C
shares, respectively, for the year ended November 30, 1999.
- --------------------------------------------------------------------------------
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 1% 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. Such fee is 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 $34,244,966 and
$5,083,412 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 accor-
12
<PAGE>
Alliance North American
Government Income Trust
================================================================================
dance with the Agreement, there is no provision for recovery of unreimbursed
distribution costs, incurred by the Distributor, beyond the current 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 $330,356,862 and $453,151,135,
respectively, for the year ended November 30, 1999. There were purchases of
$2,678,459,629 and sales of $2,575,234,861 of U.S. government and government
agency obligations for the year ended November 30, 1999.
At November 30, 1999, the cost of investments for federal income tax purposes
$2,499,155,536. Accordingly, gross unrealized appreciation of investments was
$30,135,230 and gross unrealized depreciation of investments was $216,413,498
resulting in net unrealized depreciation of $186,278,268 excluding foreign
currency transactions.
At November 30, 1999, the Fund had a capital loss carryforward totaling
$82,167,141 of which $42,670,032 expires in the year 2003, $39,497,109 expires
in the year 2004.
Forward Exchange Currency Contracts
The Fund enters into forward exchange currency contracts to hedge its exposure
to changes in foreign currency exchange rates on its foreign portfolio holdings,
to hedge certain firm purchase and sales commitments denominated in foreign
currencies and for investment purposes. A forward exchange currency contract is
a commitment to purchase or sell a foreign currency at a future date at a
negotiated forward rate. The gain or loss arising from the difference between
the original contracts and the closing of such contracts is included in realized
gains or losses from foreign currency transactions.
Fluctuations in the value of forward exchange currency contracts are recorded
for financial reporting purposes as unrealized gains or losses by the Fund.
The Fund's custodian will place and maintain cash not available for investment
or other liquid assets in a separate account of the Fund having a value equal to
the aggregate amount of the Fund's commitments under forward exchange currency
contracts entered into with respect to position hedges.
Risks may arise from the potential inability of the counterparty to meet the
terms of a contract and from unanticipated movements in the value of a foreign
currency relative to the U.S. dollar. The face or contract amount, in U.S.
dollars, reflects the total exposure of the Fund in that particular currency
contract.
At November 30, 1999, the Fund had no outstanding forward exchange currency
contracts.
- --------------------------------------------------------------------------------
NOTE E: Bank Borrowing
The Fund entered into a Revolving Credit Agreement with Deutsche Bank AG, New
York Branch on June 4, 1998. The maximum credit available under the credit
facility is $250,000,000 and requires no collateralization. The loan
outstanding, under the Credit Agreement for the year ended November 30, 1999 was
$250,000,000 with a related weighted average interest rate at period end of
6.34% and a weighted average annualized interest rate of 5.83%. The $250,000,000
balance will mature on March 9, 2000. Interest payments on current borrowings
are based on the European Euro margin plus the applicable European Euro rate.
The Fund is also obligated to pay Deutsche Bank AG, New York Branch a facility
fee computed at the rate of .10% per annum on the daily amount of the total
commitment as in effect.
13
<PAGE>
Alliance North American
NOTES TO FINANCIAL STATEMENTS (continued) Government Income Trust
================================================================================
NOTE F: Capital Stock
There are 9,000,000,000 shares of $0.001 par value capital stock authorized,
divided into three classes, designated Class A, Class B, and Class C shares.
Each class consists 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
November 30, November 30, November 30, November 30,
1999 1998 1999 1998
---------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Class A
Shares sold....................... 16,598,781 40,930,531 $ 123,458,324 $ 325,348,092
Shares issued in reinvestment of
dividends...................... 3,527,038 3,181,255 26,110,820 24,821,621
Shares converted from Class B..... 30,085,478 7,799,684 220,797,037 59,480,464
Shares redeemed................... (47,381,426) (18,195,141) (353,021,863) (139,838,724)
-------------- -------------- -------------- --------------
Net increase...................... 2,829,871 33,716,329 $ 17,344,318 $ 269,811,453
============== ============== ============== ==============
Class B
Shares sold....................... 26,632,531 40,837,786 $ 198,604,722 $ 320,851,480
Shares issued in reinvestment of
dividends...................... 5,591,905 5,700,319 41,603,715 44,452,518
Shares converted to Class A....... (29,974,756) (7,799,684) (220,797,037) (59,480,464)
Shares redeemed................... (34,769,876) (39,600,299) (257,969,562) (305,507,405)
-------------- -------------- -------------- --------------
Net increase (decrease)........... (32,520,196) (861,878) $ (238,558,162) $ 316,129
============== ============== ============== ==============
Class C
Shares sold....................... 10,104,131 11,845,488 $ 75,431,739 $ 93,169,906
Shares issued in reinvestment of
dividends...................... 1,583,383 1,368,044 11,747,610 10,660,900
Shares redeemed................... (12,569,473) (12,263,001) (93,511,076) (94,426,877)
-------------- -------------- -------------- --------------
Net increase (decrease)........... (881,959) 950,531 $ (6,331,727) $ 9,403,929
============== ============== ============== ==============
</TABLE>
- --------------------------------------------------------------------------------
NOTE G: Litigation
On July 25, 1995, a Consolidated and Supplemental Class Action Complaint
("Original Complaint") was filed against the Fund, Alliance and certain other
defendants affiliated with Alliance alleging violations of federal securities
laws, fraud and breach of fiduciary duty in connection with the Fund's
investments in Mexican and Argentine securities. On September 26, 1996, the
United States District Court for the Southern District of New York granted the
defendants' motion to dismiss all counts of the Original Complaint, and on July
15, 1997, the Court denied plaintiffs' motion for leave to file an amended
complaint.
On October 15, 1998, the United States Court of Appeals for the Second Circuit
affirmed the District Court's decision denying plaintiffs' leave to file an
amended complaint in all respects except reversed with respect to plaintiffs'
claim that defendants had misrepresented the Fund's ability to hedge against
currency risk. On February 12, 1999, plaintiffs filed a Corrected First Amended
Consolidated Complaint (the "Complaint") alleging that
14
<PAGE>
Alliance North American
Government Income Trust
================================================================================
defendants violated the federal securities laws by misrepresenting the Fund's
ability to hedge against currency risk. On December 1, 1999, the Court granted
summary judgment for defendants with respect to all of plaintiffs' claims in the
Complaint. On December 14 and 15, 1999, plaintiffs filed motions for
reconsideration of the Court's rulings.
The Fund and Alliance believe that the allegations in the Complaint are without
merit and intend to defend vigorously against this action.
- --------------------------------------------------------------------------------
NOTE H: Concentration of Risk
Investing in securities of foreign governments involves special risks which
include changes in foreign exchange rates and the possibility of future
political and economic developments which could adversely affect the value of
such securities. Moreover, securities of many foreign governments and their
markets may be less liquid and their prices more volatile than those of the
United States government. The Fund may invest in the sovereign debt obligations
of countries that are considered emerging market countries at the time of
purchase. Therefore, the Fund is susceptible to governmental factors and
economic and debt restructuring developments adversely affecting the economies
of these emerging market countries. In addition, these debt obligations may be
less liquid and subject to greater volatility than debt obligations of more
developed countries.
15
<PAGE>
Alliance North American
FINANCIAL HIGHLIGHTS Government Income Trust
================================================================================
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Year
<TABLE>
<CAPTION>
---------------------------------------------------------
CLASS A
---------------------------------------------------------
Year Ended November 30,
---------------------------------------------------------
1999 1998 1997 1996 1995
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year ................... $ 7.59 $ 8.02 $ 8.01 $ 6.75 $ 8.13
-------- -------- -------- -------- --------
Income From Investment Operations
Net investment income (a) ............................ .87 .87 1.03 1.09 1.18
Net realized and unrealized gain (loss) on investments
and foreign currency transactions ................. (.25) (.33) (.05) 1.14 (1.59)
-------- -------- -------- -------- --------
Net increase (decrease) in net asset value from
operations ........................................ .62 .54 .98 2.23 (.41)
-------- -------- -------- -------- --------
Less: Dividends and Distributions
Dividends from net investment income ................. (.64) (.87) (.97) (.75 -0-
Distributions in excess of net investment income ..... (.11) (.07) -0- -0- -0-
Tax return of capital ................................ (.18) (.03) -0- (.22) (.97)
-------- -------- -------- -------- --------
Total dividends and distributions .................... (.93) (.97) (.97) (.97) (.97)
-------- -------- -------- -------- --------
Net asset value, end of year ......................... $ 7.28 $ 7.59 $ 8.02 $ 8.01 $ 6.75
======== ======== ======== ======== ========
Total Return
Total investment return based on net asset value (b) . 8.56% 7.14% 12.85% 35.22% (3.59)%
Ratios/Supplemental Data
Net assets, end of year (000's omitted) .............. $730,468 $740,066 $511,749 $385,784 $252,608
Ratio of expenses to average net assets .............. 2.09% 2.04% 2.15% 2.34% 2.62%
Ratio of expenses to average net assets excluding
interest expense (c) .............................. 1.38% 1.36% 1.38% 1.41% 1.51%
Ratio of net investment income to average net assets . 11.72% 11.17% 12.78% 14.82% 18.09%
Portfolio turnover rate .............................. 158% 175% 118% 166% 180%
</TABLE>
- --------------------------------------------------------------------------------
See footnote summary on page 18.
16
<PAGE>
Alliance North American
Government Income Trust
================================================================================
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Year
<TABLE>
<CAPTION>
----------------------------------------------------------------------
CLASS B
----------------------------------------------------------------------
Year Ended November 30,
----------------------------------------------------------------------
1999 1998 1997 1996 1995
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year ................... $ 7.61 $ 8.02 $ 8.01 $ 6.75 $ 8.13
---------- ---------- ---------- ---------- ----------
Income From Investment Operations
Net investment income (a) ............................ .81 .81 .98 1.04 1.13
Net realized and unrealized gain (loss) on investments
and foreign currency transactions ................. (.25) (.32) (.07) 1.12 (1.61)
---------- ---------- ---------- ---------- ----------
Net increase (decrease) in net asset value from
operations ........................................ .56 .49 .91 2.16 (.48)
---------- ---------- ---------- ---------- ----------
Less: Dividends and Distributions
Dividends from net investment income ................. (.59) (.81) (.90) (.69) -0-
Distributions in excess of net investment income ..... (.10) (.06) -0- -0- -0-
Tax return of capital ................................ (.17) (.03) -0- (.21) (.90)
---------- ---------- ---------- ---------- ----------
Total dividends and distributions .................... (.86) (.90) (.90) (.90) (.90)
---------- ---------- ---------- ---------- ----------
Net asset value, end of year ......................... $ 7.31 $ 7.61 $ 8.02 $ 8.01 $ 6.75
========== ========== ========== ========== ==========
Total Return
Total investment return based on net asset value (b) . 7.79% 6.46% 11.88% 33.96% (4.63)%
Ratios/Supplemental Data
Net assets, end of year (000's omitted) .............. $1,011,395 $1,300,519 $1,378,407 $1,329,719 $1,123,074
Ratio of expenses to average net assets .............. 2.78% 2.75% 2.86% 3.05% 3.33%
Ratio of expenses to average net assets excluding
interest expense (c) .............................. 2.08% 2.07% 2.09% 2.12% 2.22%
Ratio of net investment income to average net assets . 10.97% 10.44% 12.15% 14.20% 17.31%
Portfolio turnover rate .............................. 158% 175% 118% 166% 180%
</TABLE>
- --------------------------------------------------------------------------------
See footnote summary on page 18.
17
<PAGE>
Alliance North American
FINANCIAL HIGHLIGHTS (continued) Government Income Trust
================================================================================
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Year
<TABLE>
<CAPTION>
------------------------------------------------------------
CLASS C
------------------------------------------------------------
Year Ended November 30,
------------------------------------------------------------
1999 1998 1997 1996 1995
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year ................... $ 7.61 $ 8.02 $ 8.01 $ 6.75 $ 8.13
-------- -------- -------- -------- --------
Income From Investment Operations
Net investment income (a) ............................ .81 .82 .98 1.05 1.13
Net realized and unrealized gain (loss) on investments
and foreign currency transactions ................. (.25) (.33) (.07) 1.11 (1.61)
-------- -------- -------- -------- --------
Net increase (decrease) in net asset value from
operations ........................................ .56 .49 .91 2.16 (.48)
-------- -------- -------- -------- --------
Less: Dividends and Distributions
Dividends from net investment income ................. (.59) (.82) (.90) (.69) -0-
Distributions in excess of net investment income ..... (.10) (.05) -0- -0- -0-
Tax return of capital ................................ (.17) (.03) -0- (.21) (.90)
-------- -------- -------- -------- --------
Total dividends and distributions .................... (.86) (.90) (.90) (.90) (.90)
-------- -------- -------- -------- --------
Net asset value, end of year ......................... $ 7.31 $ 7.61 $ 8.02 $ 8.01 $ 6.75
======== ======== ======== ======== ========
Total Return
Total investment return based on net asset value (b) . 7.79% 6.46% 11.88% 33.96% (4.63)%
Ratios/Supplemental Data
Net assets, end of year (000's omitted) .............. $258,696 $276,073 $283,483 $250,676 $219,009
Ratio of expenses to average net assets .............. 2.78% 2.74% 2.85% 3.04% 3.33%
Ratio of expenses to average net assets excluding
interest expense (c) .............................. 2.08% 2.06% 2.08% 2.12% 2.21%
Ratio of net investment income to average net assets . 10.98% 10.45% 12.14% 14.22% 17.32%
Portfolio turnover rate .............................. 158% 175% 118% 166% 180%
</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.
(c) Net of interest expense of .70%, .68%, .77%, .93% and 1.11% respectively,
on loan agreement (see Note E).
18
<PAGE>
REPORT OF ERNST & YOUNG LLP Alliance North American
INDEPENDENT AUDITORS Government Income Trust
================================================================================
To the Shareholders and Board of Directors Alliance North American Government
Income Trust, Inc.
We have audited the accompanying statement of assets and liabilities of Alliance
North American Government Income Trust, Inc. (the "Fund"), including the
portfolio of investments, as of November 30, 1999, and the related statements of
operations and cash flows for the year then ended, the statement of changes in
net assets for each of the two years in the period then ended and the financial
highlights for each of the periods indicated therein. These financial statements
and financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights. Our procedures included
confirmation of securities owned as of November 30, 1999, by correspondence with
the custodian and others. An audit also includes assessing the accounting
principles used and significant estimates made by management as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Alliance North American Government Income Trust, Inc. at November 30, 1999, the
results of its operations and its cash flows 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 indicated periods, in conformity
with accounting principles generally accepted in the United States.
/s/ Ernst & Young LLP
New York, New York
January 11, 2000
19
<PAGE>
Alliance North American
Government Income Trust
================================================================================
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
Wayne D. Lyski, Senior Vice President
Edmund P. Bergan, Jr., Secretary
Mark D. Gersten, Treasurer & Chief Financial Officer
Juan J. Rodriguez, Controller
CUSTODIAN
Brown Brothers Harriman & Co.
40 Water Street
Boston, MA 02109
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 AUDITORS
Ernst & Young LLP
787 Seventh Avenue
New York, NY 10019
- --------------------------------------------------------------------------------
(1) Member of the Audit Committee.
20
<PAGE>
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
21
<PAGE>
(This page left intentionally blank.)
<PAGE>
(This page left intentionally blank.)
<PAGE>
---------------
ALLIANCE NORTH AMERICAN GOVERNMENT INCOME TRUST BULK RATE
1345 Avenue of the Americas U.S. POSTAGE
New York, NY 10105 PAID
(800) 221-5672 New York, NY
Permit No. 7131
---------------
AllianceCapital [LOGO]
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.
NAGAR1199
