-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TsU76OkQAu31KtdMMa7iBZfnu5hRWm77296otbShIr5PyJEwKrkuwWE5JzHTI15Q 1ZvMQMtFHUMYpnOnc35rrQ== 0000936772-06-000137.txt : 20060808 0000936772-06-000137.hdr.sgml : 20060808 20060808155728 ACCESSION NUMBER: 0000936772-06-000137 CONFORMED SUBMISSION TYPE: N-CSRS PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20060531 FILED AS OF DATE: 20060808 DATE AS OF CHANGE: 20060808 EFFECTIVENESS DATE: 20060808 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALLIANCEBERNSTEIN FOCUSED GROWTH & INCOME FUND INC CENTRAL INDEX KEY: 0001090504 IRS NUMBER: 000000000 FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: N-CSRS SEC ACT: 1940 Act SEC FILE NUMBER: 811-09687 FILM NUMBER: 061012994 BUSINESS ADDRESS: STREET 1: C/O ALLIANCE CAPITAL MANAGEMENT LP STREET 2: 1345 AVENUE OF THE AMERICAS CITY: NEW YORK STATE: NY ZIP: 10105 BUSINESS PHONE: 2129692124 MAIL ADDRESS: STREET 1: C/O ALLIANCE CAPITAL MANAGEMENT LP STREET 2: 1345 AVENUE OF THE AMERICAS CITY: NEW YORK STATE: NY ZIP: 10105 FORMER COMPANY: FORMER CONFORMED NAME: ALLIANCEBERNSTEIN DISCIPLINED VALUE FUND INC DATE OF NAME CHANGE: 19990714 0001090504 S000009999 ALLIANCEBERNSTEIN FOCUSED GROWTH & INCOME FUND INC C000027654 Class A ADGAX C000027655 Class B ADGBX C000027656 Class C ADGCX C000027657 Class R ADGRX C000027658 Class K ADGKX C000027659 Class I ADGIX N-CSRS 1 edg11852_sr.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number: 811-09687 ALLIANCEBERNSTEIN FOCUSED GROWTH AND INCOME FUND, INC. (Exact name of registrant as specified in charter) 1345 Avenue of the Americas, New York, New York 10105 (Address of principal executive offices) (Zip code) Mark R. Manley AllianceBernstein L.P. 1345 Avenue of the Americas New York, New York 10105 (Name and address of agent for service) Registrant's telephone number, including area code: (800) 221-5672 Date of fiscal year end: November 30, 2006 Date of reporting period: May 31, 2006 ITEM 1. REPORTS TO STOCKHOLDERS. - ------------------------------------------------------------------------------- SEMI-ANNUAL REPORT - ------------------------------------------------------------------------------- AllianceBernstein Focused Growth & Income Fund Semi-Annual Report May 31, 2006 [LOGO] ALLIANCEBERNSTEIN INVESTMENTS Investment Products Offered o Are Not FDIC Insured o May Lose Value o Are Not Bank Guaranteed The investment return and principal value of an investment in the Fund will fluctuate as the prices of the individual securities in which it invests fluctuate, so that your shares, when redeemed, may be worth more or less than their original cost. You should consider the investment objectives, risks, charges and expenses of the Fund carefully before investing. For a free copy of the Fund's prospectus, which contains this and other information, visit our web site at www.alliancebernstein.com or call your financial advisor or AllianceBernstein(R) at (800) 227-4618. Please read the prospectus carefully before you invest. You may obtain performance information current to the most recent month-end by visiting www.alliancebernstein.com. This shareholder report must be preceded or accompanied by the Fund's prospectus for individuals who are not current shareholders of the Fund. You may obtain a description of the Fund's proxy voting policies and procedures, and information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30, without charge. Simply visit AllianceBernstein's web site at www.alliancebernstein.com, or go to the Securities and Exchange Commission's (the "Commission") web site at www.sec.gov, or call AllianceBernstein at (800) 227-4618. The Fund files its complete schedule of portfolio holdings with the Commission for the first and third quarters of each fiscal year on Form N-Q. The Fund's Forms N-Q are available on the Commission's web site at www.sec.gov. The Fund's Forms N-Q may also be reviewed and copied at the Commission's Public Reference Room in Washington, DC; information on the operation of the Public Reference Room may be obtained by calling (800) SEC-0330. AllianceBernstein publishes full portfolio holdings for the Fund monthly at www.alliancebernstein.com. AllianceBernstein Investments, Inc. is an affiliate of AllianceBernstein L.P., the manager of the funds, and is a member of the NASD. AllianceBernstein(R) and the AB Logo are registered trademarks and service marks used by permission of the owner, AllianceBernstein L.P. July 11, 2006 Semi-Annual Report This report provides management's discussion of fund performance for AllianceBernstein Focused Growth & Income Fund (the "Fund") for the semi-annual reporting period ended May 31, 2006. Investment Objective and Policies This open-end fund seeks long-term growth of capital. The Fund invests primarily in the equity securities of U.S. companies that AllianceBernstein believes are undervalued. We believe that, over time, a company's stock price will come to reflect its intrinsic economic value. We use a disciplined investment process to evaluate the companies in our extensive research universe and to identify the stocks of companies that offer the best combination of value and potential for price appreciation. The Fund may invest in companies of any size and in any industry. Investment Results The table on page 4 provides performance data for the Fund and its benchmark, the Russell 1000 Value Index, for the six- and 12-month periods ended May 31, 2006. Also included in the table are returns for the Fund's peer group, as represented by the Lipper Multi-Cap Core Funds Average (the "Lipper Average"). Funds in the Lipper Average have generally similar investment objectives to the Fund, although some may have different investment policies and sales and management fees. The Fund underperformed its primary style benchmark, the Russell 1000 Value Index, and also underperformed the Lipper Average, during both the six- and 12-month periods ended May 31, 2006. During both the six- and 12-month periods, the Fund's disappointing relative performance was sourced primarily from weak stock selection. In particular, security selection in technology and consumer manufacturing was especially weak. Technology results were negatively impacted by a large holding in Microsoft. Microsoft saw $40 billion of market value vaporize after the company's surprising announcement that it would spend an incremental $2 billion of capital to accelerate success-based growth initiatives and to better compete with Google over the next couple of years. The Fund's consumer manufacturing performance was weighed down by exposure to housing. The Fund's exposure to housing was in housing-related retailers where the fundamentals have remained intact, but the valuations have suffered as concern about the housing cycle has dampened investor enthusiasm for these types of companies. On the sector front, a near zero exposure to traditional value sectors like energy and materials continued to hurt Fund performance. The Fund continues to maintain a lower-than-benchmark and lower-than-peer group profile in winning "value" sectors like commodities (e.g., energy and basic materials). The Fund's Relative Value Investment Team (the "team") believes prices have detached from fundamentals in many of these areas as speculators have become more involved in the short-term direction of stock prices. In some respects, the momentum building in these areas is reminiscent of the excesses that defined the prior investment style cycle top in early 2000. In ALLIANCEBERNSTEIN FOCUSED GROWTH & INCOME FUND o 1 that period, "growth" style investing was all the rage and companies like Yahoo, Cisco and Intel were the "can't get enough of" stocks. Today, companies like Burlington Northern and Phelps Dodge, a railroad and a copper mining company, are now considered "growth" stocks. (These stocks are not held in the Fund.) Market Review and Investment Strategy U.S. stock market returns were moderately better than long-term trend during the trailing six- and 12-month periods as the economy and corporate profits remained buoyant despite escalating geopolitical tension, surging commodity prices and rising interest rates. However, as the end of the reporting period approached, stock returns weakened as investor concern about the impact of higher interest rates on growth forecasts began to weigh heavily on security prices. Until mid-May, as they have since the end of the internet bubble, smaller companies and deep value stocks had been outperforming. The team continues to see great investment opportunity in large, high-quality stocks which have severely underperformed the broad market over the past five years, despite delivering strong fundamental performance. In an investment period generally characterized by a low concern for risk, the best performers have been the riskiest asset classes: emerging markets, small companies and the stocks of volatile businesses. This phenomenon has been dominant around the world for a number of years now. The team's philosophy has always been centered on the notion of buying high quality businesses that are undervalued. It is the cornerstone of a disciplined investment process that has served our shareholders well over the long-term. The team remains fully committed to executing on this strategy and believes recent underperformance is mostly a function of the market's unusual appetite for the types of companies the Fund generally doesn't invest in. As the global economic and corporate profit cycles mature, the team expects investor appetite for risk taking to approach more historically normal levels. This should benefit many of the big, high quality holdings that the Fund currently holds. 2 o ALLIANCEBERNSTEIN FOCUSED GROWTH & INCOME FUND HISTORICAL PERFORMANCE An Important Note About the Value of Historical Performance The performance shown on the following pages represents past performance and does not guarantee future results. Current performance may be lower or higher than the performance information shown. You may obtain performance information current to the most recent month-end by visiting www.alliancebernstein.com. The investment return and principal value of an investment in the Fund will fluctuate, so that your shares, when redeemed, may be worth more or less than their original cost. You should consider the investment objectives, risks, charges and expenses of the Fund carefully before investing. For a free copy of the Fund's prospectus, which contains this and other information, visit our website at www.alliancebernstein.com or call your financial advisor or AllianceBernstein Investments at 800.227.4618. You should read the prospectus carefully before you invest. All fees and expenses related to the operation of the Fund have been deducted. NAV returns do not reflect sales charges; if sales charges were reflected, the Fund's quoted performance would be lower. SEC returns reflect the applicable sales charges for each share class: a 4.25% maximum front-end sales charge for Class A shares; the applicable contingent deferred sales charge for Class B shares (4% year 1, 3% year 2, 2% year 3, 1% year 4); a 1% 1 year contingent deferred sales charge for Class C shares. Returns for different share classes will vary due to different expenses associated with each class. Performance assumes reinvestment of distributions and does not account for taxes. Benchmark Disclosure The unmanaged Russell 1000 Value Index does not reflect fees and expenses associated with the active management of a mutual fund portfolio. The Index contains those securities in the Russell 1000 Index with a less-than-average growth orientation. The Russell 1000 Index is composed of 1000 of the largest capitalized companies that are traded in the United States. For the six- and 12-month periods ended May 31, 2006, the Lipper Multi-Cap Core Funds Average consisted of 880 and 803 funds, respectively. Funds in the Lipper Average have generally similar investment objectives to AllianceBernstein Focused Growth & Income Fund, although some may have different investment policies and sales and management fees. An investor cannot invest directly in an index or average, and their results are not indicative of the performance for any specific investment, including the Fund. A Word About Risk The Fund can invest in foreign securities, which may magnify fluctuations due to changes in foreign exchange rates and the possibility of substantial volatility due to political and economic uncertainties in foreign countries. The Fund can invest in small- to mid-capitalization companies. These investments may be more volatile than investments in large-capitalization companies. The Fund may at times be concentrated in a particular sector or industry group and, therefore, may be subject to greater risk. While the Fund invests principally in common stocks and other equity securities, in order to achieve its investment objectives, the Fund may at times use certain types of investment derivatives, such as options, futures, forwards and swaps. These instruments involve risks different from, and in certain cases, greater than, the risks presented by more traditional investments. These risks are fully discussed in the Fund's prospectus. (Historical Performance continued on next page) ALLIANCEBERNSTEIN FOCUSED GROWTH & INCOME FUND o 3 HISTORICAL PERFORMANCE (continued from previous page) THE FUND VS. ITS BENCHMARK PERIODS ENDED MAY 31, 2006 Returns ---------------------------- 6 Months 12 Months - ------------------------------------------------------------------------------- AllianceBernstein Focused Growth & Income Fund Class A -1.21% 1.83% Class B -1.54% 1.11% Class C -1.54% 1.11% Class R* -1.29% 1.69% Class K* -1.08% 1.96% Class I* -1.00% 2.24% Russell 1000 Value Index 6.51% 12.61% Lipper Multi-Cap Core Funds Average 3.47% 10.76% * Please note that these share classes are for investors purchasing shares through institutional pension plans. See Historical Performance and Benchmark disclosures on previous page. (Historical Performance continued on next page) 4 o ALLIANCEBERNSTEIN FOCUSED GROWTH & INCOME FUND HISTORICAL PERFORMANCE (continued from previous page) AVERAGE ANNUAL RETURNS AS OF MAY 31, 2006 - ------------------------------------------------------------------------------- NAV Returns SEC Returns Class A Shares 1 Year 1.83% -2.48% 5 Years 1.33% 0.46% Since Inception* 7.13% 6.42% Class B Shares 1 Year 1.11% -2.69% 5 Years 0.61% 0.61% Since Inception* 6.39% 6.39% Class C Shares 1 Year 1.11% 0.16% 5 Years 0.63% 0.63% Since Inception* 6.38% 6.38% Class R Shares+ 1 Year 1.69% 1.69% Since Inception* 6.32% 6.32% Class K Shares+ 1 Year 1.96% 1.96% Since Inception* -0.03% -0.03% Class I Shares+ 1 Year 2.24% 2.24% Since Inception* 0.24% 0.24% * Inception dates: 12/22/99 for Class A, Class B and Class C shares; 11/3/03 for Class R shares; 3/1/05 for Class K and Class I shares. + These share classes are offered at net asset value (NAV) to eligible investors and their SEC returns are the same as the NAV returns. Please note that these share classes are for investors purchasing shares through institutional pension plans. The inception dates for these share classes are listed above. See Historical Performance disclosures on page 3. (Historical Performance continued on next page) ALLIANCEBERNSTEIN FOCUSED GROWTH & INCOME FUND o 5 HISTORICAL PERFORMANCE (continued from previous page) SEC AVERAGE ANNUAL RETURNS (WITH ANY APPLICABLE SALES CHARGES) AS OF THE MOST RECENT CALENDAR QUARTER-END (JUNE 30, 2006) SEC Returns - ------------------------------------------------------------------------------- Class A Shares 1 Year -2.71% 5 Year 0.95% Since Inception* 6.24% Class B Shares 1 Year -2.92% 5 Year 1.09% Since Inception* 6.20% Class C Shares 1 Year -0.08% 5 Year 1.11% Since Inception* 6.19% Class R Shares+ 1 Year 1.39% Since Inception* 5.86% Class K Shares+ 1 Year 1.66% Since Inception* -0.50% Class I Shares+ 1 Year 2.01% Since Inception* -0.20% * Inception dates: 12/22/99 for Class A, Class B and Class C shares; 11/3/03 for Class R shares; 3/1/05 for Class K and Class I shares. + Please note that these share classes are for investors purchasing shares through institutional pension plans. The inception dates for these share classes are listed above. See Historical Performance disclosures on page 3. 6 o ALLIANCEBERNSTEIN FOCUSED GROWTH & INCOME FUND FUND EXPENSES As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments, contingent deferred sales charges on redemptions and (2) ongoing costs, including management fees; distribution (12b-1) fees; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period as indicated below. Actual Expenses The table below provides information about actual account values and actual expenses. You may use the information, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. Hypothetical Example for Comparison Purposes The table below also provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed annual rate of return of 5% before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds by comparing this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), or contingent deferred sales charges on redemptions. Therefore, the hypothetical example is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Beginning Ending Account Value Account Value Expenses Paid December 1, 2005 May 31, 2006 During Period* ---------------------- ------------------------ ---------------------- Actual Hypothetical Actual Hypothetical** Actual Hypothetical -------- ------------ -------- -------------- -------- ------------ Class A $1,000 $1,000 $ 987.88 $1,018.50 $ 6.39 $ 6.49 Class B $1,000 $1,000 $ 984.58 $1,014.91 $ 9.95 $10.10 Class C $1,000 $1,000 $ 984.57 $1,015.01 $ 9.85 $10.00 Class R $1,000 $1,000 $ 987.15 $1,017.60 $ 7.28 $ 7.39 Class K $1,000 $1,000 $ 989.22 $1,019.35 $ 5.55 $ 5.64 Class I $1,000 $1,000 $ 989.98 $1,020.94 $ 3.97 $ 4.03
* Expenses are equal to the classes' annualized expense ratios of 1.29%, 2.01%, 1.99%, 1.47%, 1.12% and 0.80%, respectively, multiplied by the average account value over the period, multiply by 182/365 (to reflect the one-half year period). ** Assumes 5% return before expenses. ALLIANCEBERNSTEIN FOCUSED GROWTH & INCOME FUND o 7 PORTFOLIO SUMMARY May 31, 2006 (unaudited) PORTFOLIO STATISTICS Net Assets ($mil): $325.4 SECTOR BREAKDOWN [ ] 25.1% Finance [PIE CHART OMITTED] [ ] 18.3% Technology [ ] 16.7% Consumer Services [ ] 11.9% Consumer Staples [ ] 7.8% Capital Goods [ ] 6.2% Health Care [ ] 4.3% Utilities [ ] 3.1% Transportation [ ] 2.9% Basic Industry [ ] 1.5% Consumer Manufacturing [ ] 2.2% Short-Term TEN LARGEST HOLDINGS May 31, 2006 (unaudited) Percent of Company U.S. $ Value Net Assets - ------------------------------------------------------------------------------- Citigroup, Inc. $ 16,022,500 4.9% Axis Capital Holdings, Ltd. 14,491,220 4.5 Time Warner, Inc. 14,026,150 4.3 Federal National Mortgage Association 13,681,250 4.2 JPMorgan Chase & Co. 12,792,000 3.9 The Home Depot, Inc. 12,770,200 3.9 American International Group, Inc. 12,160,000 3.8 Loews Corp. 11,711,900 3.6 Microsoft Corp. 11,325,000 3.5 News Corp. Cl. A 10,202,450 3.1 $129,182,670 39.7% * All data are as of May 31, 2006. The Fund's sector breakdown is expressed as a percentage of total investments (excluding security lending collateral) and may vary over time. Please Note: The sector classifications presented herein are based on the sector categorization methodology of the Adviser. These sector classifications are broadly defined. The "Portfolio of Investments" section of the report reflects more specific industry information and is consistent with the investment restrictions discussed in the Fund's prospectus. 8 o ALLIANCEBERNSTEIN FOCUSED GROWTH & INCOME FUND PORTFOLIO OF INVESTMENTS May 31, 2006 (unaudited) Company Shares U.S. $ Value - ------------------------------------------------------------------------------- COMMON STOCKS-99.6% Finance-25.5% Banking-0.4% The Bank of New York, Inc. 40,000 $ 1,329,200 Banking-Money Center-4.0% JPMorgan Chase & Co. 300,000 12,792,000 Banking-Regional-1.9% Bank of America Corp. 41,800 2,023,120 Northern Trust Corp. 75,000 4,194,000 ------------ 6,217,120 Insurance-10.1% ACE, Ltd. 98,000 5,073,460 American International Group, Inc. 200,000 12,160,000 Axis Capital Holdings, Ltd. 553,100 14,491,220 The Hartford Financial Services Group, Inc. 13,800 1,213,572 ------------ 32,938,252 Mortgage Banking-4.2% Federal National Mortgage Association 275,000 13,681,250 Miscellaneous-4.9% Citigroup, Inc. 325,000 16,022,500 ------------ 82,980,322 Technology-18.6% Communication Equipment-2.3% Cisco Systems, Inc.(a) 300,000 5,904,000 Juniper Networks, Inc.(a) 100,000 1,593,000 ------------ 7,497,000 Computer Hardware/Storage-8.2% EMC Corp.(a) 650,000 8,320,000 International Business Machines Corp. 115,000 9,188,500 Sun Microsystems, Inc.(a) 2,000,000 9,320,000 ------------ 26,828,500 Computer Software-4.1% BEA Systems, Inc.(a) 140,000 1,898,400 Microsoft Corp. 500,000 11,325,000 ------------ 13,223,400 Semiconductor Capital Equipment-2.6% Applied Materials, Inc. 500,000 8,455,000 Semiconductor Components-1.4% Advanced Micro Devices, Inc.(a) 150,000 4,633,500 ------------ 60,637,400 ALLIANCEBERNSTEIN FOCUSED GROWTH & INCOME FUND o 9 Company Shares U.S. $ Value - ------------------------------------------------------------------------------- Consumer Services-17.0% Broadcasting & Cable-9.1% News Corp. Cl.A 535,000 $ 10,202,450 Time Warner, Inc. 815,000 14,026,150 Viacom, Inc. Cl.B(a) 125,000 4,718,750 Westwood One, Inc. 100,000 802,000 ------------ 29,749,350 Restaurants & Lodging-2.1% Hilton Hotels Corp. 140,000 3,844,400 McDonald's Corp. 85,000 2,819,450 ------------ 6,663,850 Retail-General Merchandise-5.8% Lowe's Cos., Inc. 100,000 6,228,000 The Home Depot, Inc. 335,000 12,770,200 ------------ 18,998,200 ------------ 55,411,400 Consumer Staples-12.1% Household Products-5.0% Fortune Brands, Inc.* 135,000 9,990,000 The Procter & Gamble Co. 115,000 6,238,750 ------------ 16,228,750 Retail-Food & Drug-0.7% CVS Corp. 83,000 2,315,700 Tobacco-6.4% Altria Group, Inc. 125,000 9,043,750 Loews Corp.* 85,000 2,888,300 Loews Corp.-Carolina Group 190,000 8,823,600 ------------ 20,755,650 ------------ 39,300,100 Capital Goods-8.0% Electrical Equipment-1.6% Emerson Electric Co. 63,600 5,248,272 Machinery-0.9% ITT Industries, Inc. 55,000 2,868,250 Miscellaneous-5.5% General Electric Co. 263,200 9,017,232 Illinois Tool Works, Inc. 49,200 2,442,780 United Technologies Corp. 100,000 6,252,000 ------------ 17,712,012 ------------ 25,828,534 10 o ALLIANCEBERNSTEIN FOCUSED GROWTH & INCOME FUND Shares or Principal Amount Company (000) U.S. $ Value - ------------------------------------------------------------------------------- Health Care-6.3% Biotechnology-0.7% Amgen, Inc.(a) 35,000 $ 2,365,650 Drugs-0.7% Forest Laboratories, Inc.(a)* 45,000 1,686,600 Wyeth 12,100 553,454 ------------ 2,240,054 Medical Services-4.9% UnitedHealth Group, Inc. 143,700 6,317,052 WellPoint, Inc.(a) 135,000 9,663,300 ------------ 15,980,352 ------------ 20,586,056 Utilities-4.4% Telephone Utility-4.4% AT&T, Inc. 309,400 8,062,964 Verizon Communications, Inc. 201,200 6,279,452 ------------ 14,342,416 Transportation-3.2% Air Freight-2.6% United Parcel Service, Inc. Cl.B 106,500 8,578,575 Railroad-0.6% Union Pacific Corp. 19,800 1,837,440 ------------ 10,416,015 Basic Industry-3.0% Chemicals-3.0% Air Products & Chemicals, Inc.* 150,000 9,727,500 Consumer Manufacturing-1.5% Textile Products-1.5% Building Materials Holding Corp.* 175,000 4,991,000 Total Common Stocks (cost $293,807,008) 324,220,743 SHORT-TERM INVESTMENT-2.2% Time Deposit-2.2% State Street Euro Dollar 4.35%, 6/01/06 (cost $7,163,000) $ 7,163 7,163,000 Total Investments Before Security Lending Collateral-101.8% (cost $300,970,008) 331,383,743 ALLIANCEBERNSTEIN FOCUSED GROWTH & INCOME FUND o 11 Shares U.S. $ Value - ------------------------------------------------------------------------------- INVESTMENT OF CASH COLLATERAL FOR SECURITIES LOANED-5.7% Short-Term Investment UBS Private Money Market Fund, LLC, 4.90% (cost $18,415,605) 18,415,605 $ 18,415,605 Total Investments-107.5% (cost $319,385,613) 349,799,348 Other assets less liabilities-(7.5)% (24,359,668) ------------- Net Assets-100% $325,439,680 * Represents entire or partial securities out on loan. See Note E for securities lending information. (a) Non-income producing security. See notes to financial statements. 12 o ALLIANCEBERNSTEIN FOCUSED GROWTH & INCOME FUND STATEMENT OF ASSETS & LIABILITIES May 31, 2006 (unaudited) Assets Investments in securities, at value (cost $319,385,613--including investment of cash collateral for securities loaned of $18,415,605) $349,799,348(a) Cash 206 Receivable for investment securities sold 4,312,815 Receivable for capital stock sold 659,680 Dividends receivable 436,954 Total assets 355,209,003 Liabilities Payable for collateral on securities loaned 18,415,605 Payable for investment securities purchased 8,925,854 Payable for capital stock redeemed 1,611,895 Distribution fee payable 200,105 Advisory fee payable 159,126 Transfer Agent fee payable 87,338 Accrued expenses 369,400 Total liabilities 29,769,323 Net Assets $325,439,680 Composition of Net Assets Capital stock, at par $ 23,235 Additional paid-in capital 280,720,358 Undistributed net investment income 24,323 Accumulated net realized gain on investment transactions 14,258,029 Net unrealized appreciation of investments 30,413,735 $325,439,680 Net Asset Value Per Share--18 billion shares of capital stock authorized, $.001 par value Shares Net Asset Class Net Assets Outstanding Value - ------------------------------------------------------------------------------- A $142,682,286 9,953,778 $14.33* B $128,711,627 9,355,392 $13.76 C $ 52,760,012 3,836,380 $13.75 R $ 1,128,554 78,975 $14.29 K $ 137,934 9,605 $14.36 I $ 19,267 1,337 $14.41 * The maximum offering price per share for Class A shares was $14.97 which reflects a sales charge of 4.25%. (a) Includes securities on loan with a value of $17,994,226 (see Note E). See notes to financial statements. ALLIANCEBERNSTEIN FOCUSED GROWTH & INCOME FUND o 13 STATEMENT OF OPERATIONS Six Months Ended May 31, 2006 (unaudited) Investment Income Dividends $ 3,062,909 Interest 92,463 $ 3,155,372 Expenses Advisory fee 1,027,110 Distribution fee--Class A 241,995 Distribution fee--Class B 749,097 Distribution fee--Class C 305,617 Distribution fee--Class R 2,741 Distribution fee--Class K 136 Transfer agency--Class A 208,947 Transfer agency--Class B 208,417 Transfer agency--Class C 81,310 Transfer agency--Class R 1,341 Transfer agency--Class K 58 Transfer agency--Class I 7 Custodian 94,222 Registration 60,020 Legal 49,028 Administrative 42,000 Audit 29,676 Printing 14,659 Directors' fees 14,558 Miscellaneous 13,393 Total expenses 3,144,332 Less: expense offset arrangement (see Note B) (13,283) Net expenses 3,131,049 Net investment income 24,323 Realized and Unrealized Gain (Loss) on Investment Transactions Net realized gain on investment transactions 20,221,160 Net change in unrealized appreciation/ depreciation of investments (23,678,575) Net loss on investment transactions (3,457,415) Net Decrease in Net Assets from Operations $ (3,433,092) See notes to financial statements. 14 o ALLIANCEBERNSTEIN FOCUSED GROWTH & INCOME FUND STATEMENT OF CHANGES IN NET ASSETS Statement of Changes in Net Assets Six Months Ended Year Ended May 31, 2006 November 30, (unaudited) 2005 ---------------- --------------- Increase (Decrease) in Net Assets from Operations Net investment income (loss) $ 24,323 $ (218,678) Net realized gain on investment transactions 20,221,160 22,464,325 Net change in unrealized appreciation/depreciation of investments (23,678,575) 5,926,478 Net increase (decrease) in net assets from operations (3,433,092) 28,172,125 Dividends and Distributions to Shareholders from Net investment income Class A -0- (1,514,182) Class R -0- (1,155) Net realized gain on investment transactions Class A (10,387,971) (2,195,466) Class B (10,014,550) (2,044,514) Class C (4,131,885) (831,037) Class R (55,743) (2,393) Class K (610) -0- Class I (606) -0- Capital Stock Transactions Net decrease (54,585,119) (122,923,053) Total decrease (82,609,576) (101,339,675) Net Assets Beginning of period 408,049,256 509,388,931 End of period (includes undistributed net investment income of $24,323 and $0, respectively) $325,439,680 $408,049,256 See notes to financial statements. ALLIANCEBERNSTEIN FOCUSED GROWTH & INCOME FUND o 15 NOTES TO FINANCIAL STATEMENTS May 31, 2006 (unaudited) NOTE A Significant Accounting Policies AllianceBernstein Focused Growth & Income Fund, Inc. (the "Fund"), organized as a Maryland corporation on July 6, 1999, 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, Class R, Class K and Class I shares. Class A shares are sold with a front-end sales charge of up to 4.25% for purchases not exceeding $1,000,000. With respect to purchases of $1,000,000 or more, Class A shares redeemed within one year of purchase may be subject to a contingent deferred sales charge of 1%. Class B shares are currently sold with a contingent deferred sales charge which declines from 4% to zero depending on the period of time the shares are held. Class B shares will automatically convert to Class A shares eight years after the end of the calendar month of purchase. Class C shares are subject to a contingent deferred sales charge of 1% on redemptions made within the first year after purchase. Class R and Class K shares are sold without an initial or contingent deferred sales charge. Class I shares are sold without any initial or contingent deferred sales charge and are not subject to ongoing distribution expenses. All six 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 U.S. generally accepted accounting principles which require management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements and amounts of income and expenses during the reporting period. Actual results could differ from those estimates. Additional information about some of the items discussed in these Notes to Financial Statements is contained in the Fund's Statement of Additional Information, which is available upon request. The following is a summary of significant accounting policies followed by the Fund. 1. Security Valuation Portfolio securities are valued at their current market value determined on the basis of market quotations or, if market quotations are not readily available or are deemed unreliable, at "fair value" as determined in accordance with procedures established by and under the general supervision of the Fund's Board of Directors. In general, the market value of securities which are readily available and deemed reliable are determined as follows. Securities listed on a national securities exchange or on a foreign securities exchange are valued at the last sale price at the close of the exchange or foreign securities exchange. If there has been no sale on such day, the securities are valued at the mean of the closing bid and asked prices on such day. Securities listed on more than one exchange are valued by reference to the principal exchange on which the securities are traded; securities not listed on an exchange but traded on The NASDAQ Stock Market, Inc. ("NASDAQ") 16 o ALLIANCEBERNSTEIN FOCUSED GROWTH & INCOME FUND are valued in accordance with the NASDAQ Official Closing Price; listed put or call options are valued at the last sale price. If there has been no sale on that day, such securities will be valued at the closing bid prices on that day; open futures contracts and options thereon are valued using the closing settlement price or, in the absence of such a price, the most recent quoted bid price. If there are no quotations available for the day of valuation, the last available closing settlement price is used; securities traded in the over-the-counter market, ("OTC") (but excluding securities traded on NASDAQ) are valued at the mean of the current bid and asked prices as reported by the National Quotation Bureau or other comparable sources; U.S. Government securities and other debt instruments having 60 days or less remaining until maturity are valued at amortized cost if their original maturity was 60 days or less; or by amortizing their fair value as of the 61st day prior to maturity if their original term to maturity exceeded 60 days; fixed-income securities, including mortgage backed and asset backed securities, may be valued on the basis of prices provided by a pricing service or at a price obtained from one or more of the major broker/dealers. In cases where broker/dealer quotes are obtained, AllianceBernstein L.P. (prior to February 24, 2006 known as Alliance Capital Management L.P.) (the "Adviser") may establish procedures whereby changes in market yields or spreads are used to adjust, on a daily basis, a recently obtained quoted price on a security; and OTC and other derivatives are valued on the basis of a quoted bid price or spread from a major broker/dealer in such security. Securities for which market quotations are not readily available (including restricted securities) or are deemed unreliable are valued at fair value. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, analysis of the issuer's financial statements or other available documents. In addition, the Fund may use fair value pricing for securities primarily traded in non-U.S. markets because most foreign markets close well before the Fund values its securities at 4:00 p.m., Eastern Time. The earlier close of these foreign markets gives rise to the possibility that significant events, including broad market moves, may have occurred in the interim and may materially affect the value of those securities. To account for this, the Fund may frequently value many of its foreign equity securities using fair value prices based on third party vendor modeling tools to the extent available. 2. Currency Translation Assets and liabilities denominated in foreign currencies and commitments under forward exchange currency contracts are translated into U.S. dollars at the mean of the quoted bid and asked prices of such currencies against the U.S. dollar. Purchases and sales of portfolio securities are translated into U.S. dollars at the rates of exchange prevailing when such securities were acquired or sold. Income and expenses are translated into U.S. dollars at rates of exchange prevailing when accrued. ALLIANCEBERNSTEIN FOCUSED GROWTH & INCOME FUND o 17 Net realized gain or loss on foreign currency transactions represents foreign exchange gains and losses from sales and maturities of foreign fixed income investments, foreign currency exchange contracts, holding of foreign currencies, currency gains or losses realized between the trade and settlement dates on foreign investment transactions, and the difference between the amounts of dividends, interest and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized currency gains and losses from valuing foreign currency denominated assets and liabilities at period end exchange rates are reflected as a component of net unrealized appreciation or depreciation of investments and foreign currency denominated assets and liabilities. 3. Taxes It is the policy of the Fund to meet the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its investment company taxable income and net realized gains, if any, to shareholders. Therefore, no provisions for federal income or excise taxes are required. The Fund may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on income and/or capital gains earned or repatriated. Taxes are accrued and applied to net investment income, net realized gains and net unrealized appreciation/depreciation as such income and/or gains are earned. 4. Investment Income and Investment Transactions Dividend income is recorded on the ex-dividend date or as soon as the Fund is informed of the dividend. Interest income is accrued daily. Investment transactions are accounted for on the trade date securities are purchased or sold. Investment gains and losses are determined on the identified cost basis. The Fund amortizes premiums and accretes discounts as adjustments to interest income. 5. Class Allocations All income earned and expenses incurred by the Fund are borne on a pro-rata basis by each outstanding class of shares, based on the proportionate interest in the Fund represented by the net assets of such class, except for class specific expenses which are allocated to the respective class. Realized and unrealized gains and losses are allocated among the various share classes based on their relative net assets. 6. Dividends and Distributions Dividends and distributions to shareholders, if any, 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 U.S. generally accepted accounting principles. To the extent these differences are permanent, such amounts are reclassified within the capital 18 o ALLIANCEBERNSTEIN FOCUSED GROWTH & INCOME FUND accounts based on their federal tax basis treatment; temporary differences do not require such reclassification. NOTE B Advisory Fee and Other Transactions with Affiliates Under the terms of the investment advisory agreement, the Fund pays the Adviser an advisory fee at an annual rate of .55% of the first $2.5 billion, .45% of the next $2.5 billion and .40% in excess of $5 billion, of the Fund's average daily net assets. Prior to September 7, 2004, the Fund paid the Adviser an advisory fee at an annual rate of .75% of the Fund's average daily net assets. The fee is accrued daily and paid monthly. The Adviser has agreed to waive its fees and bear certain expenses to the extent necessary to limit total operating expenses on an annual basis to 2.50%, 3.20%, 3.20%, 2.70%, 2.45% and 2.20% of the daily average net assets for the Class A, Class B, Class C, Class R, Class K and Class I shares, respectively. For the six months ended May 31, 2006, there were no fees waived by the Adviser. Pursuant to the advisory agreement, the Fund paid $42,000 to the Adviser representing the cost of certain legal and accounting services provided to the Fund by the Adviser for the six months ended May 31, 2006. The Fund compensates AllianceBernstein Investor Services, Inc. (prior to February 24, 2006 known as Alliance Global Investor Services, Inc.) ("ABIS"), a wholly-owned subsidiary of the Adviser, under a Transfer Agency Agreement for providing personnel and facilities to perform transfer agency services for the Fund. ABIS may make payments to intermediaries that provide omnibus account services, sub-accounting services and/or networking services. Such compensation retained by ABIS amounted to $207,601 for the six months ended May 31, 2006. For the six months ended May 31, 2006, the Fund's expenses were reduced by $13,283 under an expense offset arrangement with ABIS. AllianceBernstein Investments, Inc. (prior to February 24, 2006 known as AllianceBernstein Investment Research and Management, Inc.) (the "Distributor"), a wholly-owned subsidiary of the Adviser, serves as the distributor of the Fund's shares. The Distributor has advised the Fund that it has retained front-end sales charges of $4,452 from the sale of Class A shares and received $3,571, $94,777 and $4,900 in contingent deferred sales charges imposed upon redemptions by shareholders of Class A, Class B and Class C shares, respectively, for the six months ended May 31, 2006. Brokerage commissions paid on investment transactions for the six months ended May 31, 2006, amounted to $610,538, of which $81,616 and $0, respectively, was paid to Sanford C. Bernstein & Co. LLC and Sanford C. Bernstein Limited, affiliates of the Adviser. ALLIANCEBERNSTEIN FOCUSED GROWTH & INCOME FUND o 19 NOTE C Distribution Services Agreement The Fund has adopted a Distribution Services Agreement (the "Agreement") pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the Agreement, the Fund pays distribution and servicing fees to the Distributor at an annual rate of up to .30% of the Fund's average daily net assets attributable to Class A shares, 1% of the Fund's average daily net assets attributable to both Class B and Class C shares, .50% of the Fund's average daily net assets attributable to Class R shares and .25% of the Fund's average daily net assets attributable to Class K shares. There are no distribution and servicing fees on Class I 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 incurred expenses in excess of the distribution costs reimbursed by the Fund in the amounts of $602,856, $1,260,768, $19,294 and $58 for Class B, Class C, Class R and Class K shares, respectively; such costs may be recovered from the Fund in future periods so long as the Agreement is in effect. In accordance with the Agreement, there is no provision for recovery of unreimbursed distribution costs incurred by the Distributor beyond the current fiscal year for Class A shares. The Agreement also provides that the 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) for the six months ended May 31, 2006, were as follows: Purchases Sales -------------- -------------- Investment securities (excluding U.S. government securities) $206,623,739 $279,424,680 U.S. government securities -0- -0- The cost of investments for federal income tax purposes was substantially the same as the cost for financial reporting purposes. Accordingly, gross unrealized appreciation and unrealized depreciation are as follows: Gross unrealized appreciation $39,614,825 Gross unrealized depreciation (9,201,090) Net unrealized appreciation $30,413,735 1. Financial Futures Contracts The Fund may buy or sell financial futures contracts for the purpose of hedging its portfolio against adverse effects of anticipated movements in the market. The Fund bears the market risk that arises from changes in the value of these financial 20 o ALLIANCEBERNSTEIN FOCUSED GROWTH & INCOME FUND instruments and the imperfect correlation between movements in the price of the futures contracts and movements in the price of the securities hedged or used for cover. At the time the Fund enters into a futures contract, the Fund deposits and maintains as collateral an initial margin with the broker, as required by the exchange on which the transaction is effected. Pursuant to the contract, the Fund agrees to receive from or pay to the broker an amount of cash equal to the daily fluctuation in the value of the contract. Such receipts or payments are known as variation margin and are recorded by the Fund as unrealized gains or losses. Risks may arise from the potential inability of a counterparty to meet the terms of the contract. When the contract is closed, the Fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the time it was closed. NOTE E Securities Lending The Fund has entered into a securities lending agreement with UBS Warburg LLC (the"Lending Agent"). Under the terms of the agreement, the Lending Agent, on behalf of the Fund, administers the lending of portfolio securities to certain broker-dealers. In return, the Fund receives fee income from the lending transactions or it retains a portion of interest on the investment of any cash received as collateral. The Fund also continues to receive dividends or interest on the securities loaned. Unrealized gain or loss on the value of the securities loaned that may occur during the term of the loan will be reflected in the accounts of the Fund. All loans are continuously secured by collateral exceeding the value of the securities loaned. All collateral consists of either cash or U.S. government securities. The Lending Agent may invest the cash collateral received in an eligible money market vehicle in accordance with the investment restrictions of the Fund. The Lending Agent will indemnify the Fund for any loss resulting from a borrower's failure to return a loaned security when due. As of May 31, 2006, the Fund had loaned securities with a value of $17,994,226 and received cash collateral which was invested in a money market fund valued at $18,415,605 as included in the accompanying portfolio of investments. For the six months ended May 31, 2006, the Fund earned fee income of $854 which is included in interest income in the accompanying statement of operations. ALLIANCEBERNSTEIN FOCUSED GROWTH & INCOME FUND o 21 NOTE F Capital Stock Each class consists of 3,000,000,000 authorized shares. Transactions in capital shares for each class were as follows: Shares Amount --------------------------- ------------------------------ Six Months Ended Year Ended Six Months Ended Year Ended May 31, 2006 November 30, May 31, 2006 November 30, (unaudited) 2005 (unaudited) 2005 ------------ ------------ -------------- -------------- Class A Shares sold 800,860 3,146,956 $ 11,846,834 $ 47,329,068 Shares issued in reinvestment of dividends and distributions 633,054 226,157 9,261,571 3,412,711 Shares converted from Class B 170,864 300,476 2,511,593 4,509,940 Shares redeemed (3,017,017) (7,580,567) (44,593,604) (113,693,130) Net decrease (1,412,239) (3,906,978) $(20,973,606) $(58,441,411) Class B Shares sold 281,366 945,079 $ 3,987,308 $ 13,737,539 Shares issued in reinvestment of distributions 585,469 114,511 8,249,255 1,679,878 Shares converted to Class A (177,768) (310,682) (2,511,593) (4,509,940) Shares redeemed (2,362,176) (3,980,552) (33,641,558) (57,816,219) Net decrease (1,673,109) (3,231,644) $(23,916,588) $(46,908,742) Class C Shares sold 129,432 456,930 $ 1,839,647 $ 6,649,779 Shares issued in reinvestment of distributions 233,067 44,538 3,281,581 652,931 Shares redeemed (1,070,040) (1,758,535) (15,231,685) (25,543,365) Net decrease (707,541) (1,257,067) $(10,110,457) $(18,240,655) Class R Shares sold 26,446 49,008 $ 389,293 $ 725,512 Shares issued in reinvestment of dividends and distributions 2,781 26 40,611 385 Shares redeemed (10,561) (5,184) (156,404) (78,278) Net increase 18,666 43,850 $ 273,500 $ 647,619 22 o ALLIANCEBERNSTEIN FOCUSED GROWTH & INCOME FUND Shares Amount --------------------------- ------------------------------ Six Months March 1, Six Months March 1, Ended 2005(a) to Ended 2005(a) to May 31, 2006 November 30, May 31, 2006 November 30, (unaudited) 2005 (unaudited) 2005 ------------ ------------ -------------- -------------- Class K Shares sold 11,186 661 $ 164,811 $ 10,100 Shares issued in reinvestment of distributions -0-(b) -0- 3 -0- Shares redeemed (2,242) -0- (32,784) -0- Net increase 8,944 661 $ 132,030 $ 10,100 Class I Shares sold 680 657 $ 10,000 $ 10,036 Shares issued in reinvestment of distributions -0-(b) -0- 2 -0- Net increase 680 657 $ 10,002 $ 10,036 (a) Commencement of distribution. (b) Share amounts less than one full share. NOTE G Risks Involved in Investing in the Fund Foreign Securities Risk--Investing in securities of foreign companies or foreign governments involves special risks which include changes in foreign exchange rates and the possibility of the future political and economic developments which could adversely affect the value of such securities. Moreover, securities of many foreign companies or foreign governments and their markets may be less liquid and their prices more volatile than those of comparable U.S. companies or of the U.S. Government. Indemnification Risk--In the ordinary course of business, the Fund enters into contracts that contain a variety of indemnifications. The Fund's maximum exposure under these arrangements is unknown. However, the Fund has not had prior claims or losses pursuant to these indemnification provisions and expects the risk of loss thereunder to be remote. NOTE H Joint Credit Facility A number of open-end mutual funds managed by the Adviser, including the Fund, participate in a $250 million revolving credit facility (the "Facility") intended to provide short-term financing, if necessary, subject to certain restrictions in connection with abnormal redemption activity. Commitment fees ALLIANCEBERNSTEIN FOCUSED GROWTH & INCOME FUND o 23 related to the Facility are paid by the participating funds and are included in miscellaneous expenses in the statement of operations. The Fund did not utilize the Facility during the six months ended May 31, 2006. NOTE I Distributions to Shareholders The tax character of distributions to be paid for the year ending November 30, 2006 will be determined at the end of the current fiscal year. The tax character of distributions paid during the fiscal year ended November 30, 2005 was as follows: 2005 ----------- Distributions paid from: Ordinary income $ 1,515,337 Net long-term capital gains 5,073,410 Total taxable distributions 6,588,747 Total distributions paid $ 6,588,747 As of November 30, 2005, the components of accumulated earnings/(deficit) on a tax basis were as follows: Undistributed long term capital gain $11,110,815 Undistributed ordinary income 13,408,064 Unrealized appreciation/(depreciation) 48,201,665(a) Total accumulated earnings/(deficit) $72,720,544 (a) The difference between book-basis and tax-basis unrealized appreciation/(depreciation) is attributable primarily to the tax deferral of losses on wash sales. NOTE J Legal Proceedings As has been previously reported, the staff of the U.S. Securities and Exchange Commission ("SEC") and the Office of New York Attorney General ("NYAG") have been investigating practices in the mutual fund industry identified as "market timing" and "late trading" of mutual fund shares. Certain other regulatory authorities have also been conducting investigations into these practices within the industry and have requested that the Adviser provide information to them. The Adviser has been cooperating and will continue to cooperate with all of these authorities. On December 18, 2003, the Adviser confirmed that it had reached terms with the SEC and the NYAG for the resolution of regulatory claims relating to the practice of "market timing" mutual fund shares in some of the AllianceBernstein Mutual Funds. The agreement with the SEC is reflected in an Order of the Commission ("SEC Order"). The agreement with the NYAG is memorialized 24 o ALLIANCEBERNSTEIN FOCUSED GROWTH & INCOME FUND in an Assurance of Discontinuance dated September 1, 2004 ("NYAG Order"). Among the key provisions of these agreements are the following: (i) The Adviser agreed to establish a $250 million fund (the "Reimbursement Fund") to compensate mutual fund shareholders for the adverse effects of market timing attributable to market timing relationships described in the SEC Order. According to the SEC Order, the Reimbursement Fund is to be paid, in order of priority, to fund investors based on (i) their aliquot share of losses suffered by the fund due to market timing, and (ii) a proportionate share of advisory fees paid by such fund during the period of such market timing; (ii) The Adviser agreed to reduce the advisory fees it receives from some of the AllianceBernstein long-term, open-end retail funds until December 31, 2008; and (iii) The Adviser agreed to implement changes to its governance and compliance procedures. Additionally, the SEC Order and the NYAG Order contemplate that the Adviser's registered investment company clients, including the Fund, will introduce governance and compliance changes. In anticipation of final, definitive documentation of the NYAG Order and effective January 1, 2004, the Adviser began waiving a portion of its advisory fee. On September 7, 2004, the Fund's investment advisory agreement was amended to reflect the reduced advisory fee. For more information on this waiver and amendment to the Fund's investment advisory agreement, please see "Advisory Fee and Other Transactions with Affiliates" above. A special committee of the Adviser's Board of Directors, comprised of the members of the Adviser's Audit Committee and the other independent member of the Adviser's Board, directed and oversaw an internal investigation and a comprehensive review of the facts and circumstances relevant to the SEC's and the NYAG's investigations. In addition, the Independent Directors of the Fund ("the Independent Directors") have initiated an investigation of the above-mentioned matters with the advice of an independent economic consultant and independent counsel. The Independent Directors have formed a special committee to supervise the investigation. On October 2, 2003, a purported class action complaint entitled Hindo, et al. v. AllianceBernstein Growth & Income Fund, et al. ("Hindo Complaint") was filed against the Adviser, Alliance Capital Management Holding L.P. ("Alliance Holding"), Alliance Capital Management Corporation, AXA Financial, Inc., the AllianceBernstein Funds, certain officers of the Adviser ("Alliance defendants"), and certain other defendants not affiliated with the Adviser, as well as unnamed ALLIANCEBERNSTEIN FOCUSED GROWTH & INCOME FUND o 25 Doe defendants. The Hindo Complaint was filed in the United States District Court for the Southern District of New York by alleged shareholders of two of the AllianceBernstein Funds. The Hindo Complaint alleges that certain of the Alliance defendants failed to disclose that they improperly allowed certain hedge funds and other unidentified parties to engage in "late trading" and "market timing" of AllianceBernstein Fund securities, violating Sections 11 and 15 of the Securities Act, Sections 10(b) and 20(a) of the Exchange Act and Sections 206 and 215 of the Advisers Act. Plaintiffs seek an unspecified amount of compensatory damages and rescission of their contracts with the Adviser, including recovery of all fees paid to the Adviser pursuant to such contracts. Since October 2, 2003, 43 additional lawsuits making factual allegations generally similar to those in the Hindo Complaint were filed in various federal and state courts against the Adviser and certain other defendants. The plaintiffs in such lawsuits have asserted a variety of theories for recovery including, but not limited to, violations of the Securities Act, the Exchange Act, the Advisers Act, the Investment Company Act, the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), certain state securities laws and common law. All state court actions against the Adviser either were voluntarily dismissed or removed to federal court. On February 20, 2004, the Judicial Panel on Multidistrict Litigation transferred all actions to the United States District Court for the District of Maryland (the "Mutual Fund MDL"). On September 29, 2004, plaintiffs filed consolidated amended complaints with respect to four claim types: mutual fund shareholder claims; mutual fund derivative claims; derivative claims brought on behalf of Alliance Holding; and claims brought under ERISA by participants in the Profit Sharing Plan for Employees of the Adviser. All four complaints include substantially identical factual allegations, which appear to be based in large part on the SEC Order and the NYAG Order. The claims in the mutual fund derivative consolidated amended complaint are generally based on the theory that all fund advisory agreements, distribution agreements and 12b-1 plans between the Adviser and the AllianceBernstein Funds should be invalidated, regardless of whether market timing occurred in each individual fund, because each was approved by fund trustees on the basis of materially misleading information with respect to the level of market timing permitted in funds managed by the Adviser. The claims asserted in the other three consolidated amended complaints are similar to those that the respective plaintiffs asserted in their previous federal lawsuits. All of these lawsuits seek an unspecified amount of damages. On April 21, 2006, the Adviser and attorneys for the plaintiffs in the mutual fund shareholder claims, mutual fund derivative claims, and ERISA claims entered into a confidential memorandum of understanding ("MOU") containing their agreement to settle these claims. The agreement will be documented by a stipulation of settlement and will be submitted for court approval at a later date. 26 o ALLIANCEBERNSTEIN FOCUSED GROWTH & INCOME FUND On February 10, 2004, the Adviser received (i) a subpoena duces tecum from the Office of the Attorney General of the State of West Virginia and (ii) a request for information from West Virginia's Office of the State Auditor, Securities Commission (the "West Virginia Securities Commissioner") (together, the "Information Requests"). Both Information Requests require the Adviser to produce documents concerning, among other things, any market timing or late trading in the Adviser's sponsored mutual funds. The Adviser responded to the Information Requests and has been cooperating fully with the investigation. On April 11, 2005, a complaint entitled The Attorney General of the State of West Virginia v. AIM Advisors, Inc., et al. ("WVAG Complaint") was filed against the Adviser, Alliance Holding, and various other defendants not affiliated with the Adviser. The WVAG Complaint was filed in the Circuit Court of Marshall County, West Virginia by the Attorney General of the State of West Virginia. The WVAG Complaint makes factual allegations generally similar to those in the Hindo Complaint. On October 19, 2005, the WVAG Complaint was transferred to the Mutual Fund MDL. On August 30, 2005, the deputy commissioner of securities of the West Virginia Securities Commissioner signed a Summary Order to Cease and Desist, and Notice of Right to Hearing addressed to the Adviser and Alliance Holding. The Summary Order claims that the Adviser and Alliance Holding violated the West Virginia Uniform Securities Act, and makes factual allegations generally similar to those in the Commission Order and the NYAGOrder. On January 26, 2006, the Adviser, Alliance Holding, and various unaffiliated defendants filed a Petition for Writ of Prohibition and Order Suspending Proceedings in West Virginia state court seeking to vacate the Summary Order and for other relief. On April 12, 2006, respondents' petition was denied. On May 4, 2006, respondents appealed the court's determination. On June 22, 2004, a purported class action complaint entitled Aucoin, et al. v. Alliance Capital Management L.P., et al. ("Aucoin Complaint") was filed against the Adviser, Alliance Holding, Alliance Capital Management Corporation, AXA Financial, Inc., AllianceBernstein Investment Research & Management, Inc., certain current and former directors of the AllianceBernstein Mutual Funds, and unnamed Doe defendants. The Aucoin Complaint names certain of the AllianceBernstein mutual funds as nominal defendants. The Aucoin Complaint was filed in the United States District Court for the Southern District of New York by alleged shareholders of an AllianceBernstein mutual fund. The Aucoin Complaint alleges, among other things, (i) that certain of the defendants improperly authorized the payment of excessive commissions and other fees from fund assets to broker-dealers in exchange for preferential marketing services, (ii) that certain of the defendants misrepresented and omitted from registration statements and other reports material facts concerning such payments, and (iii) ALLIANCEBERNSTEIN FOCUSED GROWTH & INCOME FUND o 27 that certain defendants caused such conduct as control persons of other defendants. The Aucoin Complaint asserts claims for violation of Sections 34(b), 36(b) and 48(a) of the Investment Company Act, Sections 206 and 215 of the Advisers Act, breach of common law fiduciary duties, and aiding and abetting breaches of common law fiduciary duties. Plaintiffs seek an unspecified amount of compensatory damages and punitive damages, rescission of their contracts with the Adviser, including recovery of all fees paid to the Adviser pursuant to such contracts, an accounting of all fund-related fees, commissions and soft dollar payments, and restitution of all unlawfully or discriminatorily obtained fees and expenses. Since June 22, 2004, nine additional lawsuits making factual allegations substantially similar to those in the Aucoin Complaint were filed against the Adviser and certain other defendants. All nine of the lawsuits (i) were brought as class actions filed in the United States District Court for the Southern District of New York, (ii) assert claims substantially identical to the Aucoin Complaint, and (iii) are brought on behalf of shareholders of the Funds. On February 2, 2005, plaintiffs filed a consolidated amended class action complaint ("Aucoin Consolidated Amended Complaint") that asserts claims substantially similar to the Aucoin Complaint and the nine additional lawsuits referenced above. On October 19, 2005, the District Court dismissed each of the claims set forth in the Aucoin Consolidated Amended Complaint, except for plaintiffs' claim under Section 36(b) of the Investment Company Act. On January 11, 2006, the District Court granted defendants' motion for reconsideration and dismissed the remaining Section 36(b) claim. On May 31, 2006 the District Court denied plaintiffs' motion for leave to file an amended complaint. It is possible that these matters and/or other developments resulting from these matters could result in increased redemptions of the AllianceBernstein Mutual Funds' shares or other adverse consequences to the AllianceBernstein Mutual Funds. This may require the AllianceBernstein Mutual Funds to sell investments held by those funds to provide for sufficient liquidity and could also have an adverse effect on the investment performance of the AllianceBernstein Mutual Funds. However, the Adviser believes that these matters are not likely to have a material adverse effect on its ability to perform advisory services relating to the AllianceBernstein Mutual Funds. 28 o ALLIANCEBERNSTEIN FOCUSED GROWTH & INCOME FUND FINANCIAL HIGHLIGHTS Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class A ------------------------------------------------------------------------------- Six Months Ended May 31, Year Ended November 30, 2006 ---------------------------------------------------------------- (unaudited) 2005 2004 2003 2002 2001 ----------- ----------- ----------- ----------- ----------- ----------- Net asset value, beginning of period $15.42 $14.69 $13.27 $10.85 $13.09 $11.42 Income From Investment Operations Net investment income (loss)(a) .03 .05 .10(b) (.01) (.01) (.07)(b) Net realized and unrealized gain (loss) on investment transactions (.20) .93 1.32 2.43 (2.23) 1.82 Net increase (decrease) in net asset value from operations (.17) .98 1.42 2.42 (2.24) 1.75 Less: Dividends and Distributions Dividends from net investment income -0- (.10) -0- -0- -0- -0- Distributions from net realized gain on investment transactions (.92) (.15) -0- -0- -0- -0- Distributions in excess of net realized gain on investment transactions -0- -0- -0- -0- -0- (.08) Total dividends and distributions (.92) (.25) -0- -0- -0- (.08) Net asset value, end of period $14.33 $15.42 $14.69 $13.27 $10.85 $13.09 Total Return Total investment return based on net asset value(c) (1.21)% 6.67% 10.70% 22.30% (17.11)% 15.40% Ratios/Supplemental Data Net assets, end of period (000's omitted) $142,682 $175,285 $224,377 $163,169 $75,413 $76,617 Ratio to average net assets of: Expenses, net of waivers/ reimbursements 1.29%(d)(e) 1.27% 1.19% 1.51% 1.59% 1.85% Expenses, before waivers/ reimbursements 1.29%(d)(e) 1.27% 1.34% 1.51% 1.59% 1.88% Net investment income (loss) .40%(d)(e) .36% .73%(b) (.12)% (.10)% (.55)%(b) Portfolio turnover rate 56% 152% 132% 159% 218% 299%
See footnote summary on page 34. ALLIANCEBERNSTEIN FOCUSED GROWTH & INCOME FUND o 29 Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class B --------------------------------------------------------------------------------- Six Months Ended May 31, Year Ended November 30, 2006 ------------------------------------------------------------------ (unaudited) 2005 2004 2003 2002 2001 ----------- ----------- ----------- ----------- ----------- ----------- Net asset value, beginning of period $14.89 $14.20 $12.92 $10.64 $12.93 $11.36 Income From Investment Operations Net investment loss(a) (.02) (.05) -0-(b)(f) (.10) (.10) (.16)(b) Net realized and unrealized gain (loss) on investment transactions (.19) .89 1.28 2.38 (2.19) 1.81 Net increase (decrease) in net asset value from operations (.21) .84 1.28 2.28 (2.29) 1.65 Less: Distributions Distributions from net realized gain on investment transactions (.92) (.15) -0- -0- -0- -0- Distributions in excess of net realized gain on investment transactions -0- -0- -0- -0- -0- (.08) Total distributions (.92) (.15) -0- -0- -0- (.08) Net asset value, end of period $13.76 $14.89 $14.20 $12.92 $10.64 $12.93 Total Return Total investment return based on net asset value(c) (1.54)% 5.90% 9.91% 21.43% (17.71)% 14.60% Ratios/Supplemental Data Net assets, end of period (000's omitted) $128,712 $164,194 $202,459 $183,098 $110,968 $98,204 Ratio to average net assets of: Expenses, net of waivers/ reimbursements 2.01%(d)(e) 2.00% 1.92% 2.25% 2.32% 2.55% Expenses, before waivers/ reimbursements 2.01%(d)(e) 2.00% 2.07% 2.25% 2.32% 2.60% Net investment loss (.32)%(d)(e) (.37)% (.03)%(b) (.87)% (.84)% (1.28)%(b) Portfolio turnover rate 56% 152% 132% 159% 218% 299%
See footnote summary on page 34. 30 o ALLIANCEBERNSTEIN FOCUSED GROWTH & INCOME FUND Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class C ------------------------------------------------------------------------------ Six Months Ended May 31, Year Ended November 30, 2006 ----------------------------------------------------------------- (unaudited) 2005 2004 2003 2002 2001 ----------- ----------- ----------- ----------- ----------- ----------- Net asset value, beginning of period $14.88 $14.19 $12.91 $10.63 $12.92 $11.34 Income From Investment Operations Net investment loss(a) (.02) (.05) -0-(b)(f) (.10) (.10) (.16)(b) Net realized and unrealized gain (loss) on investment transactions (.19) .89 1.28 2.38 (2.19) 1.82 Net increase (decrease) in net asset value from operations (.21) .84 1.28 2.28 (2.29) 1.66 Less: Distributions Distributions from net realized gain on investment transactions (.92) (.15) -0- -0- -0- -0- Distributions in excess of net realized gain on investment transactions -0- -0- -0- -0- -0- (.08) Total distributions (.92) (.15) -0- -0- -0- (.08) Net asset value, end of period $13.75 $14.88 $14.19 $12.91 $10.63 $12.92 Total Return Total investment return based on net asset value(c) (1.54)% 5.90% 9.91% 21.45% (17.72)% 14.71% Ratios/Supplemental Data Net assets, end of period (000's omitted) $52,760 $67,622 $82,312 $71,348 $37,810 $35,790 Ratio to average net assets of: Expenses, net of waivers/ reimbursements 1.99%(d)(e) 1.99% 1.90% 2.22% 2.30% 2.56% Expenses, before waivers/ reimbursements 1.99%(d)(e) 1.99% 2.05% 2.22% 2.30% 2.60% Net investment loss (.31)%(d)(e) (.36)% (.01)%(b) (.84)% (.82)% (1.28)%(b) Portfolio turnover rate 56% 152% 132% 159% 218% 299%
See footnote summary on page 34. ALLIANCEBERNSTEIN FOCUSED GROWTH & INCOME FUND o 31 Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class R ---------------------------------------------------- Six Months Ended Year Ended November 3, May 31, November 30, 2003(g) to 2006 ------------------------ November 30, (unaudited) 2005 2004 2003 ----------- ----------- ----------- ----------- Net asset value, beginning of period $15.39 $14.66 $13.27 $13.16 Income From Investment Operations Net investment income (loss)(a) .02 .03 .18(b) -0-(f) Net realized and unrealized gain (loss) on investment transactions (.20) .92 1.21 .11 Net increase (decrease) in net asset value from operations (.18) .95 1.39 .11 Less: Dividends and Distributions Dividends from net investment income -0- (.07) -0- -0- Distributions from net realized gain on investment transactions (.92) (.15) -0- -0- Total dividends and distributions (.92) (.22) -0- -0- Net asset value, end of period $14.29 $15.39 $14.66 $13.27 Total Return Total investment return based on net asset value(c) (1.29)% 6.47% 10.48% .84% Ratios/Supplemental Data Net assets, end of period (000's omitted) $1,129 $928 $241 $10 Ratio to average net assets of: Expenses, net of waivers/ reimbursements 1.47%(d)(e) 1.60% 1.45% 1.83%(d) Expenses, before waivers/ reimbursements 1.47%(d)(e) 1.60% 1.59% 1.83%(d) Net investment income (loss) .24%(d)(e) .19% 1.25%(b) (.26)%(d) Portfolio turnover rate 56% 152% 132% 159%
See footnote summary on page 34. 32 o ALLIANCEBERNSTEIN FOCUSED GROWTH & INCOME FUND Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period Class K ------------------------ Six Months Ended March 1, May 31, 2005(g) to 2006 November 30, (unaudited) 2005 ----------- ----------- Net asset value, beginning of period $15.43 $15.27 Income From Investment Operations Net investment income(a) .05 .05 Net realized and unrealized gain (loss) on investment transactions (.20) .11 Net increase (decrease) in net asset value from operations (.15) .16 Less: Distributions Distributions from net realized gain on investment transactions (.92) -0- Net asset value, end of period $14.36 $15.43 Total Return Total investment return based on net asset value(c) (1.08)% 1.05% Ratios/Supplemental Data Net assets, end of period (000's omitted) $138 $10 Ratio to average net assets of: Expenses(d) 1.12%(e) 1.23% Net investment income(d) .68%(e) .48% Portfolio turnover rate 56% 152% See footnote summary on page 34. ALLIANCEBERNSTEIN FOCUSED GROWTH & INCOME FUND o 33 Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period Class I ------------------------ Six Months Ended March 1, May 31, 2005(g) to 2006 November 30, (unaudited) 2005 ----------- ----------- Net asset value, beginning of period $15.47 $15.27 Income From Investment Operations Net investment income(a) .08 .09 Net realized and unrealized gain (loss) on investment transactions (.22) .11 Net increase (decrease) in net asset value from operations (.14) .20 Less: Distributions Distributions from net realized gain on investment transactions (.92) -0- Net asset value, end of period $14.41 $15.47 Total Return Total investment return based on net asset value(c) (1.00)% 1.31% Ratios/Supplemental Data Net assets, end of period (000's omitted) $19 $10 Ratio to average net assets of: Expenses(d) .80%(e) .96% Net investment income(d) 1.02%(e) .77% Portfolio turnover rate 56% 152% (a) Based on average shares outstanding. (b) Net of fees and expenses waived by the Adviser and Transfer Agent. (c) Total investment return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption on the last day of the period. Initial sales charge or contingent defered sales charge is not reflected in the calculation of the total investment return. Total return does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Total investment return calculated for a period of less than one year is not annualized. (d) Annualized. (e) The ratio includes expenses attributable to estimated costs of proxy solicitation. (f) Amount is less than $0.005. (g) Commencement of distributions. 34 o ALLIANCEBERNSTEIN FOCUSED GROWTH & INCOME FUND BOARD OF DIRECTORS William H. Foulk, Jr.(1), Chairman Marc O. Mayer, President Ruth Block(1) David H. Dievler(1) John H. Dobkin(1) Michael J. Downey(1) D. James Guzy(1) Nancy P. Jacklin(1) Marshall C. Turner, Jr.(1) OFFICERS Philip L. Kirstein, Senior Vice President and Independent Compliance Officer Frank V. Caruso(2), Senior Vice President Paul C. Rissman, Senior Vice President Thomas J. Bardong, Vice President Stephen Pelensky, Vice President Emilie D. Wrapp, Secretary Mark D. Gersten, Treasurer and Chief Financial Officer Vincent S. Noto, Controller Custodian State Street Bank & Trust Company One Lincoln Street Boston, MA 02111 Principal Underwriter AllianceBernstein Investments, Inc. 1345 Avenue of the Americas New York, NY 10105 Transfer Agent AllianceBernstein Investor Services, Inc. P.O. Box 786003 San Antonio, TX 78278-6003 Toll-free (800) 221-5672 Independent Registered Public Accounting Firm Ernst & Young LLP 5 Times Square New York, NY 10036 Legal Counsel Seward & Kissel LLP One Battery Park Plaza New York, NY 10004 (1) Member of the Audit Committee, the Governance and Nominating Committee and the Independent Directors Committee. (2) The management of and investment decisions for the Fund are made by the Adviser's Relative Value Investment Team. While the members of the team work jointly to determine the investment strategy, including security selection, for the Fund, Mr. Frank Caruso, CIO of the Adviser's Relative Value Investment Team, is primarily responsible for the day-to-day management of the Fund. ALLIANCEBERNSTEIN FOCUSED GROWTH & INCOME FUND o 35 ALLIANCEBERNSTEIN FAMILY OF FUNDS - ------------------------------------------------- Wealth Strategies Funds - ------------------------------------------------- Balanced Wealth Strategy Wealth Appreciation Strategy Wealth Preservation Strategy Tax-Managed Balanced Wealth Strategy Tax-Managed Wealth Appreciation Strategy Tax-Managed Wealth Preservation Strategy - ------------------------------------------------- Blended Style Funds - ------------------------------------------------- U.S. Large Cap Portfolio International Portfolio Tax-Managed International Portfolio - ------------------------------------------------- Growth Funds - ------------------------------------------------- Domestic Growth Fund Mid-Cap Growth Fund Large Cap Growth Fund Small Cap Growth Portfolio Global & International Global Health Care Fund Global Research Growth Fund Global Technology Fund Greater China '97 Fund International Growth Fund International Research Growth Fund* - ------------------------------------------------- Value Funds - ------------------------------------------------- Domestic Balanced Shares Focused Growth & Income Fund Growth & Income Fund Real Estate Investment Fund Small/Mid-Cap Value Fund Utility Income Fund Value Fund Global & International Global Value Fund International Value Fund - ------------------------------------------------- Taxable Bond Funds - ------------------------------------------------- Global Government Income Trust* Corporate Bond Portfolio Emerging Market Debt Fund Global Strategic Income Trust High Yield Fund Multi-Market Strategy Trust Intermediate Bond Portfolio* Short Duration Portfolio U.S. Government Portfolio - ------------------------------------------------- Municipal Bond Funds - ------------------------------------------------- National Michigan Insured National Minnesota Arizona New Jersey California New York Insured California Ohio Florida Pennsylvania Massachusetts Virginia - ------------------------------------------------- Intermediate Municipal Bond Funds - ------------------------------------------------- Intermediate California Intermediate Diversified Intermediate New York - ------------------------------------------------- Closed-End Funds - ------------------------------------------------- All-Market Advantage Fund ACM Income Fund ACM Government Opportunity Fund ACM Managed Dollar Income Fund ACM Managed Income Fund ACM Municipal Securities Income Fund California Municipal Income Fund National Municipal Income Fund New York Municipal Income Fund The Spain Fund World Dollar Government Fund World Dollar Government Fund II - ------------------------------------------------- Retirement Strategies Funds - ------------------------------------------------- 2000 Retirement Strategy 2005 Retirement Strategy 2010 Retirement Strategy 2015 Retirement Strategy 2020 Retirement Strategy 2025 Retirement Strategy 2030 Retirement Strategy 2035 Retirement Strategy 2040 Retirement Strategy 2045 Retirement Strategy We also offer Exchange Reserves,** which serves as the money market fund exchange vehicle for the AllianceBernstein mutual funds. For more complete information on any AllianceBernstein mutual fund, including investment objectives and policies, sales charges, expenses, risks and other matters of importance to prospective investors, visit our website at www.alliancebernstein.com or call us at 800.227.4618 for a current prospectus. You should read the prospectus carefully before you invest. * On July 8, 2005, New Europe Fund merged into International Research Growth Fund. Prior to February 1, 2006, Global Government Income Trust was named Americas Government Income Trust and Intermediate Bond Portfolio was named Quality Bond Portfolio. ** An investment in the Fund is not a deposit in a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund. 36 o ALLIANCEBERNSTEIN FOCUSED GROWTH & INCOME FUND THE FOLLOWING IS NOT PART OF THE SHAREHOLDER REPORT OR THE FINANCIAL STATEMENTS SUMMARY OF SENIOR OFFICER'S EVALUATION OF INVESTMENT ADVISORY AGREEMENT(1) The following is a summary of the evaluation of the Investment Advisory Agreement between AllianceBernstein L.P. (the "Adviser") and AllianceBernstein Focused Growth & Income Fund, Inc. (the "Fund"), prepared by Philip L. Kirstein, the Senior Officer of the Fund for the Directors of the Fund, as required by an August 2004 agreement between the Adviser and the New York State Attorney General (the "NYAG").(2) The Senior Officer's evaluation of the Investment Advisory Agreement is not meant to diminish the responsibility or authority of the Board of Directors of the Fund to perform its duties pursuant to Section 15 of the Investment Company Act of 1940 (the "40 Act") and applicable state law. The purpose of the summary is to provide shareholders with a synopsis of the independent evaluation of the reasonableness of the advisory fees proposed to be paid by the Fund which was provided to the Directors in connection with their review of the proposed approval of the continuance of the Investment Advisory Agreement. The Senior Officer's evaluation considered the following factors: 1. Management fees charged to institutional and other clients of the Adviser for like services; 2. Management fees charged by other mutual fund companies for like services; 3. Costs to the Adviser and its affiliates of supplying services pursuant to the advisory agreement, excluding any intra-corporate profit; 4. Profit margins of the Adviser and its affiliates from supplying such services; 5. Possible economies of scale as the Fund grows larger; and 6. Nature and quality of the Adviser's services including the performance of the Fund. FUND ADVISORY FEES, EXPENSE CAPS, REIMBURSEMENTS & RATIOS The Adviser proposed that the Fund pay the advisory fee set forth in the table below for receiving the services to be provided pursuant to the Investment Advisory Agreement. The fee schedule below, implemented in January 2004 in connection with the Adviser's settlement with the NYAG in December 2003, is (1) It should be noted that the information in the fee summary was completed on June 2, 2006 and presented to the Board of Directors on June 14, 2006 in accordance with the Assurance of Discontinuance between the NYAG and the Adviser. It also should be noted that references in the fee summary pertaining to performance and expense ratios refer to Class A shares of the Fund. (2) Future references to the Fund do not include "AllianceBernstein." ALLIANCEBERNSTEIN FOCUSED GROWTH & INCOME FUND o 37 based on a master schedule that contemplates eight categories of funds with almost all funds in each category having the same advisory fee schedule.(3) Net Assets Advisory Fee Based 02/28/06 on % of Average Category (million) Daily Net Assets Fund - ------------------------------------------------------------------------------- Value $373.5 55 bp on 1st $2.5 billion Focused Growth 45 bp on next $2.5 billion & Income Fund, Inc. 40 bp on the balance The Adviser is reimbursed as specified in the Investment Advisory Agreement for certain clerical, legal, accounting, administrative and other services provided to the Fund. Indicated below is the reimbursement amount, which the Adviser received from the Fund in the Fund's most recently completed fiscal year, expressed in dollars and as a percentage of average daily net assets: As a % of Average Fund Amount Daily Net Assets - ------------------------------------------------------------------------------- Focused Growth & Income Fund, Inc. $89,751 0.02% The Adviser agreed to waive that portion of its management fees and/or reimburse the Fund for that portion of its total operating expenses to the degree necessary to limit the Fund's expense ratios to the amounts set forth below for the Fund's fiscal year. The waiver is terminable by the Adviser at the end of the Fund's fiscal year upon at least 60 days written notice prior to the termination date of the undertaking. It should be noted that the Fund was operating below its expense cap as of its most recent fiscal year end; accordingly the expense limitation undertaking of the Fund was of no effect. Expense Cap Pursuant to Gross Fiscal Expense Limitation Expense Year Fund Undertaking Ratio End - ------------------------------------------------------------------------------- Focused Growth & Class A 2.50% 1.27% November 30 Income Fund, Inc. Class B 3.20% 2.00% Class C 3.20% 1.99% Class R 2.70% 1.60% Class K 2.45% 1.23% Class I 2.20% 0.96% (3) Most of the AllianceBernstein Mutual Funds, which the Adviser manages, were affected by the Adviser's settlement with the NYAG. 38 o ALLIANCEBERNSTEIN FOCUSED GROWTH & INCOME FUND I. MANAGEMENT FEES CHARGED TO INSTITUTIONAL AND OTHER CLIENTS The management fees charged to investment companies which the Adviser manages and sponsors are normally higher than those charged to similar sized institutional accounts, including pension plans and sub-advised investment companies. The fee differential reflects, among other things, different services provided to such clients, and different liabilities assumed. Services provided by the Adviser to the Fund that are not provided to non-investment company clients include providing office space and personnel to serve as Fund Officers, who among other responsibilities make the certifications required under the Sarbanes-Oxley Act of 2002, and coordinating with and monitoring the Fund's third party service providers such as Fund counsel, auditors, custodians, transfer agents and pricing services. The accounting, administrative, legal and compliance requirements for the Fund are more costly than those for institutional assets due to the greater complexities and time required for investment companies, although as previously noted, a portion of these expenses is reimbursed by the Fund to the Adviser. Also, retail mutual funds managed by the Adviser are widely held. Servicing the Fund's investors is more time consuming and labor intensive compared to institutional clients since the Adviser needs to communicate with a more extensive network of financial intermediaries and shareholders. In addition, managing the cash flow of an investment company may be more difficult than that of a stable pool of assets, such as an institutional account with little cash movement in either direction, particularly, if the Fund is in net redemption and the Adviser is frequently forced to sell securities to raise cash for redemptions. However, managing a fund with positive cash flow may be easier at times than managing a stable pool of assets. Finally, in recent years, investment advisers have been sued by institutional clients and have suffered reputational damage both by the attendant publicity and outcomes other than complete victories. Accordingly, the legal and reputational risks associated with institutional accounts are greater than previously thought, although still not equal to those related to the mutual fund industry. Notwithstanding the Adviser's view that managing an investment company is not comparable to managing other institutional accounts because the services provided are different, it is worth considering information regarding the advisory fees charged to institutional accounts with a substantially similar investment style as the Fund. It should be noted that the Adviser has indicated that with respect to institutional accounts with assets greater than $300 million, it will negotiate a fee schedule. Discounts that are negotiated vary based upon each client relationship. In addition to the AllianceBernstein Institutional fee schedule, set forth below is what would have been the effective advisory fee of the Fund had the ALLIANCEBERNSTEIN FOCUSED GROWTH & INCOME FUND o 39 AllianceBernstein Institutional fee schedule been applicable to the Fund versus the Fund's advisory fee: Net Assets AllianceBernstein ("AB") Effective Fund 02/28/06 Institutional ("Inst.") AB Inst. Advisory Fund ($MIL) Fee Schedule Adv. Fee Fee(4) - ------------------------------------------------------------------------------- Focused Growth & $373.5 Relative Value 0.327% 0.550% Income Fund, Inc. 65 bp on 1st $25 million 50 bp on next $25 million 40 bp on next $50 million 30 bp on next $100 million 25 bp on the balance Minimum Account Size: $10 m The AllianceBernstein Variable Products Series Fund, Inc. ("AVPS"), which is managed by the Adviser and is available through variable annuity and variable life contracts offered by other financial institutions, offers investors the option to invest in a portfolio that has a similar investment style as the Fund. The following table shows the fee schedule of such AVPS portfolio: Fund AVPS Portfolio Fee Schedule - ------------------------------------------------------------------------------- Focused Growth & Growth & Income 0.55% on first $2.5 billion Income Fund, Inc. Portfolio 0.45% on next $2.5 billion 0.40% on the balance The Adviser also manages and sponsors retail mutual funds, which are organized in jurisdictions outside the United States, generally Luxembourg and Japan, and sold to non-United States resident investors. The Adviser charges the following "all-in" fee(5) for the Luxembourg fund that has a somewhat similar investment strategy as the Fund: Fund Fee - ------------------------------------------------------------------------------- Equity Value 1.50% (4) Fund advisory fee information was provided by Lipper. See Section II for additional discussion. (5) The "all-in" fee shown is for the class A shares of Equity Value. This includes a fee for investment advisory services and a separate fee for distribution related services. 40 o ALLIANCEBERNSTEIN FOCUSED GROWTH & INCOME FUND The Adviser provides sub-advisory investment services to certain other investment companies managed by other fund families. The Adviser charges the following fees for each of these sub-advisory relationships. Fund Sub-advised Fund Fee Schedule - ------------------------------------------------------------------------------- Focused Growth & Client # 1 0.30% on first $1 billion Income Fund, Inc. 0.25% on next $500 million 0.20% thereafter Client # 2 0.60% on first $1 billion 0.55% thereafter Client # 3(6) 0.60% on first $1 billion 0.55% on next $500 million 0.50% on next $500 million 0.45% on next $500 million 0.40% thereafter Client # 4(6) 0.30% It is fair to note that the services the Adviser provides pursuant to sub-advisory agreements are generally confined to the services related to the investment process; in other words, they are not as comprehensive as the services provided to the Fund by the Adviser. In addition, to the extent that certain of these sub-advisory relationships are with affiliates of the Adviser, the fee schedules may not reflect arms-length bargaining or negotiations. II. MANAGEMENT FEES CHARGED BY OTHER MUTUAL FUND COMPANIES FOR LIKE SERVICES. Lipper, Inc. ("Lipper"), an analytical service that is not affiliated with the Adviser, compared the fees charged to the Fund with fees charged to other investment companies for similar services by other investment advisers. Lipper's analysis included the Fund's ranking with respect to the proposed management fee relative to the Lipper group median at the approximate current asset level of the Fund.(7) (6) This is the fee schedule of a fund managed by an affiliate of the Adviser. (7) The effective management fee is calculated by Lipper using the Fund's contractual management fee rate at a hypothetical asset level. The hypothetical asset level is based on the combined net assets of all classes of the Fund, rounded up to the next $25 million. Lipper's total expense ratio information is based on the most recent annual report except as otherwise noted. A ranking of "1" means that the Fund has the lowest effective fee rate in the Lipper peer group. ALLIANCEBERNSTEIN FOCUSED GROWTH & INCOME FUND o 41 Effective Lipper Management Group Fund Fee(8) Median Rank - ------------------------------------------------------------------------------- Focused Growth & Income Fund, Inc. 0.550 0.750 1/12 Lipper also analyzed the total expense ratio of the Fund in comparison to its Lipper Expense Group(9) and Lipper Expense Universe.(10) Lipper describes a Lipper Expense Group as a representative sample of comparable funds and a Lipper Expense Universe as a broader group, consisting of all funds in the same investment classification/objective with a similar load type as the subject Fund. The result of that analysis is set forth below: Expense Lipper Lipper Lipper Lipper Ratio Group Group Universe Universe Fund (%)(11) Median (%) Rank Median (%) Rank - ------------------------------------------------------------------------------- Focused Growth & 1.277 1.276 7/12 1.302 37/79 Income Fund, Inc. Based on this analysis, the Fund has a more favorable ranking on a management fee basis than it does on a total expense ratio basis. III. COSTS TO THE ADVISER AND ITS AFFILIATES OF SUPPLYING SERVICES PURSUANT TO THE MANAGEMENT FEE ARRANGEMENT, EXCLUDING ANY INTRA-CORPORATE PROFIT. A consultant was retained by the Senior Officer to work with the Adviser's personnel to align the Adviser's two profitability reporting systems. The alignment, which now has been completed, allows the Adviser's management and the Directors to receive consistent presentations of the financial results and profitability although the two profitability reporting systems operate independently. See Section IV for additional discussion. (8) The effective management fee rate for the Fund does not reflect the aforementioned payments made by the Fund to the Adviser for certain clerical, legal, accounting, administrative, and other services. (9) Lipper uses the following criteria in screening funds to be included in the Fund's expense group: fund type, investment classification/objective, load type and similar 12b-1/non-12b-1 service fees, asset (size) comparability, and expense components and attributes. A Lipper Expense Group will typically consist of seven to twenty funds. (10) Except for asset (size) comparability, Lipper uses the same criteria for selecting a Lipper Expense Group when selecting a Lipper Expense Universe. Unlike the Lipper Expense Group, the Lipper Expense Universe allows for the same adviser to be represented by more than just one fund. (11) The total expense ratios shown are for the Fund's Class A shares. 42 o ALLIANCEBERNSTEIN FOCUSED GROWTH & INCOME FUND IV. PROFIT MARGINS OF THE ADVISER AND ITS AFFILIATES FOR SUPPLYING SUCH SERVICES. The profitability information for the Fund prepared by the Adviser for the Board of Directors was reviewed by the Senior Officer. The Adviser's profitability from providing investment advisory services to the Fund increased during calendar year 2005 relative to 2004. In addition to the Adviser's direct profits from managing the Fund, certain of the Adviser's affiliates have business relationships with the Fund and may earn a profit from providing other services to the Fund. The courts have referred to this type of business opportunity as "fall-out benefits" to the Adviser and indicated that they should be factored into the evaluation of the total relationship between the Fund and the Adviser. Neither case law nor common business practice precludes the Adviser's affiliates from earning a reasonable profit on this type of relationship. These affiliates provide transfer agent, distribution, and brokerage related services to the Fund and receive transfer agent fees, Rule 12b-1 payments, front-end sales loads, contingent deferred sales charges ("CDSC") and commissions for providing brokerage services. In addition, the Adviser benefits from soft dollar arrangements which offset expenses the Adviser would otherwise incur. Additional information regarding distribution related fees can be found in the prospectus of the Fund. AllianceBernstein Investments, Inc. ("ABI"), an affiliate of the Adviser, is the Fund's principal underwriter. ABI and the Adviser have disclosed in the Fund's prospectus that they may make revenue sharing payments from their own resources, in addition to resources derived from sales loads and Rule 12b-1 fees, to firms that sell shares of the Fund. In 2005, ABI paid approximately 0.042% of the average monthly assets of the AllianceBernstein Mutual Funds or approximately $18.0 million for distribution services and educational support (revenue sharing payments). For 2006, it is anticipated, ABI will pay approximately 0.04% of the average monthly assets of the AllianceBernstein Mutual Funds or approximately $17.5 million.(12) After payments to third party intermediaries, ABI retained the following amounts for Class A front-end load sales charges from sales of the Fund's Class A shares during the Fund's most recently completed fiscal year: Fund Amount Received - ------------------------------------------------------------------------------- Focused Growth & Income Fund, Inc. $11,148 (12) ABI currently inserts the "Advance" in quarterly account statements and pays the incremental costs associated with the mailing. The incremental cost is less than what an "independent mailing" would cost. ALLIANCEBERNSTEIN FOCUSED GROWTH & INCOME FUND o 43 ABI received the amounts set forth below in Rule 12b-1 fees and CDSC for the Fund during Fund's most recent fiscal year: 12b-1 Fees CDSC Fund Received Received - ------------------------------------------------------------------------------- Focused Growth & Income Fund, Inc. $3,265,417 $246,344 Fees and reimbursements for out of pocket expenses charged by AllianceBernstein Investor Services, Inc. ("ABIS"), the affiliated transfer agent, are based on the level of the network account and the class of share held by the account. ABIS also receives a fee per shareholder sub-account for each account maintained by an intermediary on an omnibus basis. ABIS' after-tax profitability increased in 2005 in comparison to 2004. ABIS received the following fee from the Fund in the most recent fiscal year: Fund ABIS Fee(13) - ------------------------------------------------------------------------------- Focused Growth & Income Fund, Inc. $492,725 The Fund effected brokerage transactions through the Adviser's affiliate, Sanford C. Bernstein & Co. LLC ("SCB & Co.") and/or its U.K. affiliate, Sanford C. Bernstein Limited ("SCB Ltd."), collectively "SCB," and paid commissions for such transactions during the Fund's most recently completed fiscal year. The Adviser represented that SCB's profitability from business conducted with the Fund is comparable to the profitability of SCB's dealings with other similar third party clients. In the ordinary course of business, SCB receives and pays liquidity rebates from electronic communications networks ("ECNs") derived from trading for its clients, including the Fund. These credits and charges are not being passed on to any SCB client. The Adviser also receives certain soft dollar benefits from brokers that execute agency trades for the Fund and other clients. These soft dollar benefits reduce the Adviser's cost of doing business and increase its profitability. V. POSSIBLE ECONOMIES OF SCALE The Adviser has indicated that the breakpoints in the fee schedule in the Investment Advisory Agreement reflect a sharing of economies of scale to the extent the breakpoints are reached. Based on some of the professional literature that has considered economies of scale in the mutual fund industry it is thought that to the extent economies of scale exist, they may more often exist across a fund family as opposed to a specific fund. This is because the costs incurred by the Adviser, such as investment research or technology for trading or compliance (13) The fee disclosed is net of any waivers or any other expense offset arrangement with ABIS. An expense offset is created by the interest earned on the positive cash balance that occurs within the transfer agent account as there is a one day lag with regards to money movement from the shareholder's account to the transfer agent's account and then from the transfer agent's account to the Fund's account. 44 o ALLIANCEBERNSTEIN FOCUSED GROWTH & INCOME FUND systems can be spread across a greater asset base as the fund family increases in size. It is also possible that as the level of services required to operate a successful investment company has increased over time, and advisory firms have made such investments in their business to provide improved services, there may be a sharing of economies of scale without a reduction in advisory fees. An independent consultant made a presentation to the Board of Directors and the Senior Officer regarding possible economies of scale or scope in the mutual fund industry. Based on the presentation, it was evident that fund management companies benefit from economies of scale. However, due to lack of cost data, researchers had to infer facts about the costs from the behavior of fund expenses; there was a lack of consensus among researchers as to whether economies of scale were being passed on to the shareholders. It is contemplated that additional work will be performed to determine if the benefits of economies of scale or scope are being passed to shareholders by the Adviser. In the meantime, it is clear that to the extent a fund's assets exceeds its initial breakpoint its shareholders benefit from a lower fee rate. VI. NATURE AND QUALITY OF THE ADVISER'S SERVICES INCLUDING THE PERFORMANCE OF THE FUND. With assets under management of $635 billion as of April 30, 2006, the Adviser has the investment experience to manage and provide non-investment services (described in Section I) to the Fund. The information below, which was prepared by Lipper, shows the 1, 3, and 5 year performance ranking of the Fund(14) relative to its Lipper Performance Group(15) and Lipper Performance Universe(16) for the periods ended December 31, 2005: Focused Growth & Income Fund, Inc. Group Universe - ------------------------------------------------------------------------------- 1 year 11/12 162/170 3 year 7/12 54/116 5 year 3/10 18/84 (14) The performance rankings are for the Class A shares of the Fund. (15) The Lipper Performance Group is identical to the Lipper Expense Group. (16) For the Lipper Performance Universe, Lipper included the Fund and all of the funds of the same Lipper Classification/Objective and load type, regardless of asset size. ALLIANCEBERNSTEIN FOCUSED GROWTH & INCOME FUND o 45 Set forth below are the 1, 3, and 5 year and since inception performance returns of the Fund (in bold)(17) versus its benchmark:(18) Periods Ending December 31, 2005 Annualized Performance - ------------------------------------------------------------------------------- 1 3 5 Since Fund Year Year Year Inception - ------------------------------------------------------------------------------- Focused Growth & 1.20 15.41 4.98 7.27 Income Fund, Inc. Russell 1000 Value Index 7.05 17.49 5.28 5.57 CONCLUSION: Based on the factors discussed above the Senior Officer's conclusion is that the proposed fee for the Fund is reasonable and within the range of what would have been negotiated at arms-length in light of all the surrounding circumstances. This conclusion in respect of the Fund is based on an evaluation of all of these factors and no single factor was dispositive. Dated: July 17, 2006 (17) The performance returns shown are for the Class A shares of the Fund. (18) The Adviser provided Fund and benchmark performance return information for periods through December 31, 2005 in order to maintain consistency with Lipper's performance rankings in the analysis. 46 o ALLIANCEBERNSTEIN FOCUSED GROWTH & INCOME FUND NOTES ALLIANCEBERNSTEIN FOCUSED GROWTH & INCOME FUND o 47 NOTES 48 o ALLIANCEBERNSTEIN FOCUSED GROWTH & INCOME FUND ALLIANCEBERNSTEIN FOCUSED GROWTH &INCOME 1345 Avenue of the Americas New York, NY 10105 (800) 221-5672 [LOGO] ALLIANCEBERNSTEIN INVESTMENTS FGI-0152-0506 ITEM 2. CODE OF ETHICS. Not applicable when filing a semi-annual report to shareholders. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. Not applicable when filing a semi-annual report to shareholders. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Not applicable when filing a semi-annual report to shareholders. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. Not applicable to the registrant. ITEM 6. SCHEDULE OF INVESTMENTS. Please see Schedule of Investments contained in the Report to Shareholders included under Item 1 of this Form N-CSR. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable to the registrant. ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable to the registrant. ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. Not applicable to the registrant. ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. There have been no material changes to the procedures by which shareholders may recommend nominees to the Fund's Board of Directors since the Fund last provided disclosure in response to this item. ITEM 11. CONTROLS AND PROCEDURES. (a) The registrant's principal executive officer and principal financial officer have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-2(c) under the Investment Company Act of 1940, as amended) are effective at the reasonable assurance level based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of this document. (b) There were no changes in the registrant's internal controls over financial reporting that occurred during the second fiscal quarter of the period that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. ITEM 12. EXHIBITS. The following exhibits are attached to this Form N-CSR: EXHIBIT NO. DESCRIPTION OF EXHIBIT - ----------- ---------------------- 12 (b) (1) Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 12 (b) (2) Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 12 (c) Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. (Registrant): AllianceBernstein Focused Growth and Income Fund, Inc. By: /s/ Marc O. Mayer ------------------- Marc O. Mayer President Date: July 28, 2006 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By: /s/ Marc O. Mayer ------------------- Marc O. Mayer President Date: July 28, 2006 By: /s/ Mark D. Gersten ------------------- Mark D. Gersten Treasurer and Chief Financial Officer Date: July 28, 2006 EX-99.CERT 2 edg11852_exc-906.txt EXHIBIT 12(c) CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT Pursuant to 18 U.S.C. 1350, each of the undersigned, being the Principal Executive Officer and Principal Financial Officer of AllianceBernstein Focused Growth and Income Fund, Inc. (the "Registrant"), hereby certifies that the Registrant's report on Form N-CSR for the period ended May 31, 2006 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant. Date: July 28, 2006 By: /s/ Marc O. Mayer ------------------- Marc O. Mayer President By: /s/ Mark D. Gersten ------------------- Mark D. Gersten Treasurer and Chief Financial Officer This certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and is not being filed as part of the Report or as a separate disclosure document. A signed original of this written statement required by Section 906 has been provided to the Registrant and will be retained by the Registrant and furnished to the Securities and Exchange Commission or its staff upon request. EX-99.906 CERT 3 edg11852_exb-302.txt Exhibit 12(b)(1) CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER I, Marc O. Mayer, President of AllianceBernstein Focused Growth and Income Fund, Inc., certify that: 1. I have reviewed this report on Form N-CSR of AllianceBernstein Focused Growth and Income Fund, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) designed such internal control over financial reporting to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officers and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: July 28, 2006 /s/ Marc O. Mayer ------------------- Marc O. Mayer President Exhibit 12(b)(2) CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER I, Mark D. Gersten, Treasurer and Chief Financial Officer of AllianceBernstein Focused Growth and Income Fund, Inc., certify that: 1. I have reviewed this report on Form N-CSR of AllianceBernstein Focused Growth and Income Fund, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) designed such internal control over financial reporting to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) evaluated the effectiveness of the registrant's disclosure controls and procedures presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officers and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: July 28, 2006 /s/ Mark D. Gersten ------------------- Mark D. Gersten Treasurer and Chief Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----