N-CSRS 1 dncsrs.htm ALLIANCEBERNSTEIN FIXED-INCOME SHARES, INC. AllianceBernstein Fixed-Income Shares, Inc.

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: 811-06068

 

 

 

 

 

 

 

ALLIANCEBERNSTEIN FIXED-INCOME SHARES, 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)

 

 

Joseph J. Mantineo

Alliance Capital Management 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: April 30, 2009

 

Date of reporting period: October 31, 2008

ITEM 1. REPORTS TO STOCKHOLDERS.

SEMI-ANNUAL REPORT

 

 

AllianceBernstein Fixed Income Shares, Inc.

Government STIF Portfolio

 

 

LOGO

 

October 31, 2008

 

Semi-Annual Report

 

 

Investment Products Offered

  •  

Are Not FDIC Insured

  •  

May Lose Value

  •  

Are Not Bank Guaranteed

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.

Distribution of this report other than to shareholders must be preceded or accompanied by the Fund’s current prospectus, which contains further information about the Fund.

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 Investments, Inc. is an affiliate of AllianceBernstein L.P., the manager of the AllianceBernstein funds, and is a member of FINRA.

AllianceBernstein® and the AB Logo are registered trademarks and service marks used by permission of the owner, AllianceBernstein L.P.

FUND EXPENSES

 

As a shareholder of a mutual fund, you may 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 in this line, 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 in the first line 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 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
Account Value
May 1, 2008		   Ending
Account Value
October 31, 2008		   Expenses Paid
During Period*
    Actual   Hypothetical   Actual   Hypothetical**   Actual   Hypothetical
Government STIF Portfolio   $   1,000   $   1,000   $   1,010.77   $   1,025.00   $   0.20   $   0.20

 

* Expenses are equal to the classes’ annualized expense ratio of 0.04%. Hypothetical expense is equal to the class’ annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/366 (to reflect the one-half year period).

 

** Assumes 5% return before expenses.

 

ALLIANCEBERNSTEIN FIXED INCOME SHARES, INC.  •   1

 

Fund Expenses

 

PORTFOLIO OF INVESTMENTS

October 31, 2008 (unaudited)

 

     Yield*   Principal
Amount
(000)		   U.S. $ Value
 
      

SHORT-TERM INVESTMENTS – 100.0%

    

U.S. Government & Government Sponsored Agency
Obligations – 81.9%

       

Federal Farm Credit Bank
10/22/09(a)

    3.65%   $ 25,000   $ 24,990,136

Series 1
2/11/09(a)

    4.39%     20,000     20,000,000

Series 2
1/23/09(a)

    3.38%     14,000     13,997,874

Federal Farm Credit Discount Notes
11/19/08

    .65%-2.06%     40,000     39,979,111

11/26/08

    0.15%     25,000     24,997,604

11/06/08

    0.50%     30,000     29,998,750

11/12/08

    1.03%     8,300     8,297,863

12/11/08

    1.15%     12,770     12,754,499

12/15/08

    1.15%     15,000     14,979,875

12/16/08

    1.15%     20,000     19,972,528

11/21/08

    1.96%     15,000     14,985,375

11/18/08

    2.01%     20,000     19,983,333

1/15/09

    2.58%     10,429     10,375,073

Federal Home Loan Bank Discount Notes
11/14/08

    2.48%-2.51%     20,000     19,984,844

12/01/08

    1.22%-1.31%     20,000     19,980,672

12/05/08

    2.14%-2.16%     35,000     34,933,444

2/02/09

    2.21%-2.56%     31,657     31,469,833

2/24/09

    2.08%-2.67%     14,619     14,514,138

12/08/08

    1.25%     10,761     10,747,922

12/17/08

    1.33%     30,000     29,951,233

12/09/08

    2.15%     20,000     19,957,200

1/22/09

    2.15%     12,064     12,006,629

12/10/08

    2.16%     15,000     14,966,854

1/05/09

    2.22%     4,585     4,567,268

2/04/09

    2.32%     14,200     14,115,628

1/12/09

    2.34%     20,000     19,909,778

11/05/08

    2.48%     7,300     7,298,998

11/12/08

    2.48%     10,000     9,993,825

11/19/08

    2.55%     10,000     9,988,756

1/09/09

    2.77%     10,000     9,949,006

1/07/09

    3.02%     1,980     1,969,275

Federal Home Loan Banks
4/03/09

    3.24%     10,000     10,003,883

1/05/09(a)

    4.04%     15,000     14,999,156

Federal Home Loan Corp.
2/03/09

    2.01%     7,600     7,561,156

 

2   •  ALLIANCEBERNSTEIN FIXED INCOME SHARES, INC.

 

Portfolio of Investments

 

     Yield*   Principal
Amount
(000)		   U.S. $ Value
 
      

Federal Home Loan Mortgage Corp.
10/07/09(a)

    4.03%   $ 20,000   $ 20,005,671

12/16/09(a)

    4.36%     25,000     24,993,057

Federal Home Loan Mortgage Discount Notes
1/26/09

    2.41%-2.43%     42,409     42,170,231

12/29/08

    1.25%     15,000     14,970,833

11/21/08

    2.13%     15,000     14,984,100

12/01/08

    2.14%     15,000     14,975,150

12/22/08

    2.15%     15,000     14,956,288

11/20/08

    2.16%     20,000     19,979,694

12/16/08

    2.18%     20,000     19,948,161

1/05/09

    2.22%     15,000     14,942,224

2/10/09

    2.32%     15,000     14,905,125

2/02/09

    2.39%     12,600     12,524,516

11/19/08

    2.53%     14,000     13,984,320

2/24/09

    2.63%     19,000     18,844,342

Federal National Mortgage Association Discount Notes
11/25/08

    1.25%     9,000     8,993,153

12/05/08

    1.25%     50,000     49,944,444

12/17/08

    1.25%     13,945     13,923,695

12/15/08

    1.31%     25,000     24,961,792

11/10/08

    2.11%     15,000     14,993,875

1/05/09

    2.11%     10,307     10,269,122

1/20/09

    2.11%     15,000     14,931,750

11/03/08

    2.14%     15,000     15,000,000

11/24/08

    2.14%     15,000     14,981,363

11/06/08

    2.15%     15,000     14,997,325

11/26/08

    2.16%     18,400     18,374,726

1/14/09

    2.16%     15,000     14,935,500

12/03/08

    2.18%     20,000     19,963,833

12/08/08

    2.19%     20,000     19,957,611

1/15/09

    2.23%     15,000     14,932,475

1/07/09

    2.24%     15,000     14,939,767

11/19/08

    2.50%     10,000     9,988,956

2/09/09

    2.52%     10,000     9,931,944

2/17/09

    2.57%     10,000     9,924,917
          
         1,152,311,479
          

 

ALLIANCEBERNSTEIN FIXED INCOME SHARES, INC.  •   3

 

Portfolio of Investments

 

         Principal
Amount
(000)		   U.S. $ Value
 
      

Repurchase
Agreements – 18.1%

       

Barclays Bank, 1.20%, dated 10/28/08 due 11/7/08 in the amount of $20,006,667 (collateralized by $17,837,000 Tenn Valley Auth, 6.75%, due 11/1/25, value $20,401,069)

      $ 20,000   $ 20,000,000

Barclays Bank, 1.20%, dated 10/28/08 due 11/28/08 in the amount of $20,022,389 (collateralized by $17,837,000 Tenn Valley Auth, 6.75%, due 11/1/25, value $20,401,069)

        20,000     20,000,000

Credit Suisse, 1.10%, dated 10/28/08 due 11/17/08 in the amount of $20,012,222 (collateralized by $20,565,000 FHLDN, 0.00%, due 3/2/09, value $20,404,593)

        20,000     20,000,000

Deutsche Bank, 0.20%, dated 10/31/08 due 11/3/08 in the amount of $35,000,583 (collateralized by $34,997,000 FHLB, FHLMC, FNMA, 4.375% to 5.125%, due 8/15/19 to 10/18/10, value $35,700,312)

        35,000     35,000,000

Dresdner Bank, 0.20%, dated 10/31/08 due 11/3/08 in the amount of $45,000,750 (collateralized by $46,130,000 FHLDN, 0.00%, due 1/30/09 value $45,903,964)

        45,000     45,000,000

HSBC Bank, 0.20%, dated 10/31/08 due 11/3/08 in the amount of $40,000,667 (collateralized by $41,005,000 FFDN, 0.00%, due 1/29/09, value $40,804,076)

       40,000     40,000,000

 

4   •  ALLIANCEBERNSTEIN FIXED INCOME SHARES, INC.

 

Portfolio of Investments

 

         Principal
Amount
(000)		   U.S. $ Value
 
      

Mizuho Securities, 0.20%, dated 10/31/08 due 11/3/08 in the amount of 40,000,667 (collateralized by $40,809,000 FHLDN, 0.00%, due 11/25/08 value $40,800,838)

      $ 40,000   $ 40,000,000

UBS Securities LLC, 0.17%, dated 10/31/08 due 11/3/08 in the amount of $34,900,494 (collateralized by $103,120,000 Resolution Funding Strip, 0.00%, due 4/15/30, value $35,598,054)

        34,900     34,900,000
          
         254,900,000
          

Total Investments – 100.0%
(cost $1,407,211,479)

         1,407,211,479

Other assets less liabilities – 0.0%

          346,529
          

Net Assets – 100.0%

        $ 1,407,558,008
          

 

 

(a) Floating Rate Security. Stated interest rate was in effect at October 31, 2008.

 

* Represents annualized yield from date of purchase for discount securities, and stated interest rate for interest-bearing securities.

Glossary:

FHLB – Federal Home Loan Bank

FHLMC – Federal Home Loan Mortgage Corporation

FNMA – Federal National Mortgage Association

See notes to financial statements.

 

ALLIANCEBERNSTEIN FIXED INCOME SHARES, INC.  •   5

 

Portfolio of Investments

STATEMENT OF ASSETS & LIABILITIES

October 31, 2008 (unaudited)

 

Assets   

Investments in securities, at value (cost $1,152,311,479)

    $     1,152,311,479

Repurchase agreement, at value (cost $254,900,000)

      254,900,000

Cash

      10,970

Interest receivable

      307,740

Prepaid expenses

      77,651
      

Total assets

      1,407,607,840
      
Liabilities   

Administrative fee payable

      24,232

Audit fee payable

      12,205

Printing fee payable

      9,327

Transfer Agent fee payable

      1,532

Accrued expenses

      2,536
      

Total liabilities

      49,832
      

Net Assets

    $ 1,407,558,008
      
Composition of Net Assets   

Capital stock, at par

    $ 703,716

Additional paid-in capital

      1,406,728,880

Accumulated net realized gain on investment transactions

      125,412
      

Net Assets

    $ 1,407,558,008
      

Capital stock outstanding—32.5 billion shares authorized, $0.0005 par value

      1,407,432,596
      

Net Asset Value Per Share

    $ 1.00
      

 

See notes to financial statements.

 

6   •  ALLIANCEBERNSTEIN FIXED INCOME SHARES, INC.

 

Statement of Assets & Liabilities

STATEMENT OF OPERATIONS

Six Months Ended October 31, 2008 (unaudited)

 

Investment Income      

Interest

       $     16,126,946
         
Expenses      

Custodian

    $     92,478   

Administrative

      54,686   

Temporary Guarantee Program (see Note H)

      52,330   

Audit

      23,228   

Legal

      20,123   

Directors’ fees

      17,238   

Printing

      5,942   

Transfer agency

      4,134   

Registration fees

      138   

Miscellaneous

      15,990   
         

Total expenses

      286,287   
         

Net investment income

         15,840,659
         
     
Realized and Unrealized Gain on Investment Transactions      

Net realized gain on investment transactions

         86,731
         
     

Net Increase in Net Assets from Operations

       $     15,927,390
         

 

See notes to financial statements.

 

ALLIANCEBERNSTEIN FIXED INCOME SHARES, INC.  •   7

 

Statement of Operations

STATEMENT OF CHANGES IN NET ASSETS

 

     Six Months Ended
October 31, 2008
(unaudited)		     Year Ended
April 30,
2008		  
Increase in Net Assets from Operations     

Net investment income

    $ 15,840,659     $ 43,918,465  

Net realized gain on investment transactions

      86,731       39,101  
                

Net increase in net assets from operations

      15,927,390       43,957,566  
Dividends to Shareholders from     

Net investment income

      (15,840,659 )     (43,918,465 )
Capital Stock Transactions     

Net increase (decrease)

      (384,022,678 )     644,220,489  
                

Total increase (decrease)

      (383,935,947 )     644,259,590  
Net Assets     

Beginning of period

      1,791,493,955       1,147,234,365  
                

End of period (including undistributed net investment income of $0 and $0, respectively)

    $     1,407,558,008     $     1,791,493,955  
                

 

See notes to financial statements.

 

8   •  ALLIANCEBERNSTEIN FIXED INCOME SHARES, INC.

 

Statement of Changes in Net Assets

NOTES TO FINANCIAL STATEMENTS

October 31, 2008 (unaudited)

 

NOTE A

Significant Accounting Policies

AllianceBernstein Fixed-Income Shares, Inc. (the “Fund”) is registered under the Investment Company Act of 1940 as an open-end investment company. The Fund operates as a series company currently consisting of the Government STIF Portfolio (the “Portfolio”) which commenced operations on December 13, 2006. The Prime STIF Portfolio, formerly a series of the Fund. ceased operations on February 29, 2008. The investment objective of the Portfolio is maximum current income to the extent consistent with safety of principal and liquidity. The Portfolio offers one class of shares exclusively to institutional clients of AllianceBernstein L.P. (the “Adviser”), including the mutual funds managed by the Adviser. The financial statements have been prepared in conformity with U.S. generally accepted accounting principles which require management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements and amounts of income and expenses during the reporting period. Actual results could differ from those estimates. The following is a summary of significant accounting policies followed by the Fund.

1. Security Valuation

Securities in which the Portfolio invests are traded primarily in the over-the-counter market and are valued at amortized cost, which approximates market value. Under such method a portfolio instrument is valued at cost and any premium or discount is amortized on a constant basis to maturity.

2. Fair Value Measurements

The Fund adopted Financial Accounting Standards Board Statement of Financial Accounting Standards No. 157, Fair Value Measurements (“FAS 157”), effective December 1, 2007. In accordance with FAS 157, fair value is defined as the price that the Fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. FAS 157 also establishes a framework for measuring fair value, and a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability. Inputs may be observable or unobservable and refer broadly to the assumptions that market participants would use in pricing the asset or liability. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Fund. Unobservable inputs reflect the Fund’s own assumptions about the assumptions that market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. Each investment is assigned a level based upon the observability of the inputs which are significant to the overall valuation. The three-tier hierarchy of inputs is summarized below.

 

  •  

Level 1—quoted prices in active markets for identical investments

 

ALLIANCEBERNSTEIN FIXED INCOME SHARES, INC.  •   9

 

Notes to Financial Statements

 

  •  

Level 2—other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

  •  

Level 3—significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)

The following table summarizes the valuation of the Fund’s investments by the above fair value hierarchy levels as of October 31, 2008:

 

Level

    Investments in
Securities		      Other
Financial
Instruments*		  

Level 1

    $ – 0  –    $     – 0  –

Level 2

          1,407,211,479        – 0  –

Level 3

      – 0  –      – 0  –
                 

Total

    $ 1,407,211,479      $ – 0  –
                 

 

* Other financial instruments are derivative instruments not reflected in the Portfolio of Investments, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation /depreciation on the instrument.

3. Taxes

It is the Fund’s policy to meet the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its investment company taxable income and net realized gains, if any, to shareholders. Therefore, no provisions for federal income or excise taxes are required.

In accordance with the Financial Accounting Standards Board (“FASB”) Interpretation No. 48, “Accounting for Uncertainties in Income Taxes” (“FIN 48”), management has analyzed the Fund’s tax positions taken on federal and state income tax returns for all open tax years (the current and the prior three tax years) and has concluded that no provision for income tax is required in the Fund’s financial statements.

4. Investment Income and Investment Transactions

Interest income is accrued daily. Investment transactions are accounted for on the date the securities are purchased or sold. Investment gains or losses are determined on the identified cost basis. The Fund amortizes premiums and accretes discounts as adjustments to interest income.

5. Dividends and Distributions

The Fund declares dividends daily from net investment income paid monthly. Net realized gains distributions, if any, will be made at least annually. Income dividends and capital gains distributions to shareholders are recorded on the ex-dividend date.

6. Repurchase Agreements

It is the Fund’s policy that its custodian or designated subcustodian take control of securities as collateral under repurchase agreements and to determine on a

 

10   •  ALLIANCEBERNSTEIN FIXED INCOME SHARES, INC.

 

Notes to Financial Statements

 

daily basis that the value of such securities are sufficient to cover the value of the repurchase agreements. If the seller defaults and the value of the collateral declines or if bankruptcy proceedings are commenced with respect to the seller of the security, realization of collateral by the Fund may be delayed or limited.

NOTE B

Advisory Fee and Other Transactions with Affiliates

Under the terms of the Advisory Agreement, the Fund pays no advisory fee to the Adviser. The Adviser serves as investment manager and adviser of the Fund and continuously furnishes an investment program for the Fund and manages, supervises and conducts the affairs of the Fund, subject to the supervision of the Fund’s Board of Directors. Pursuant to the Advisory Agreement, the Portfolio paid $54,686 to the Adviser representing the cost of certain legal and accounting services provided to the Portfolio by the Adviser for the six months ended October 31, 2008.

The Fund compensates AllianceBernstein 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 $4,857 for the six months ended October 31, 2008.

NOTE C

Investment Transactions, Income Taxes and Distributions to Shareholders

At October 31, 2008, the cost of investments for federal income tax purposes was the same as the cost for financial reporting purposes. The tax character of distributions to be paid for the year ending April 30, 2009 will be determined at the end of the current fiscal year. The tax character of distributions paid during the fiscal years ended April 30, 2008 and April 30, 2007 were as follows:

 

     2008    2007

Distributions paid from:

      

Ordinary income

    $     43,918,465    $     16,900,501

Total taxable distributions

      43,918,465      16,900,501
             

Total distributions paid

    $ 43,918,465    $ 16,900,501
             

As of April 30, 2008, the components of accumulated earnings/(deficit) on a tax basis were as follows:

 

Undistributed ordinary income

    $     38,681
      

Total accumulated earnings

    $ 38,681
      

 

ALLIANCEBERNSTEIN FIXED INCOME SHARES, INC.  •   11

 

Notes to Financial Statements

 

NOTE D

Capital Stock

Transactions, all at $1.00 per share, were as follows:

 

      
     Shares      
     Six Months Ended
October 31, 2008
(unaudited)		     Year Ended
April 30,
2008		      
        
Class A       

Shares sold

    9,630,226,970     16,442,916,437    
     

Shares issued in reinvestment of dividends

    15,840,659     43,918,465    
     

Shares redeemed

    (10,030,090,307 )   (15,842,614,413 )  
     

Net increase (decrease)

    (384,022,678 )   644,220,489    
                  

NOTE E

Risks Involved in Investing in the Fund

Interest Rate Risk and Credit Risk—The Fund’s primary risks are interest rate risk and credit risk. Because the Fund invests in short-term securities, a decline in interest rates will affect the Fund’s yield as the securities mature or are sold and the Fund purchases new short-term securities with a lower yield. Generally, an increase in interest rates causes the value of a debt instrument to decrease. The change in value for shorter-term securities is usually smaller than for securities with longer maturities. Because the Fund invests in securities with short maturities and seek to maintain stable net asset value of $1.00 per share, it is possible, though unlikely, that an increase in interest rates would change the value of your investment.

Credit risk is the possibility that a security’s credit rating will be downgraded or that the issuer of the security will default (fail to make scheduled interest and principal payments). The Fund invests in highly-rated securities to minimize credit risk.

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 F

Legal Proceedings

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 (“AllianceBernstein defendants”), and certain other unaffiliated defendants, as well as unnamed Doe

 

12   •  ALLIANCEBERNSTEIN FIXED INCOME SHARES, INC.

 

Notes to Financial Statements

 

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 AllianceBernstein 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.

Following 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. 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 Order of the SEC dated December 18, 2003 as amended and restated January 15, 2004 (“SEC Order”) and the New York State Attorney General Assurance of Discontinuance dated September 1, 2004 (“NYAG Order”).

On April 21, 2006, the Adviser and attorneys for the plaintiffs in the mutual fund shareholder claims, mutual fund derivative claims, and ERISA claims entered into a confidential memorandum of understanding containing their agreement to settle these claims. The agreement will be documented by a stipulation of settlement and will be submitted for court approval at a later date. The settlement amount ($30 million), which the Adviser previously accrued and disclosed, has been disbursed. The derivative claims brought on behalf of Alliance Holding, in which plaintiffs seek an unspecified amount of damages, remain pending.

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.

 

ALLIANCEBERNSTEIN FIXED INCOME SHARES, INC.  •   13

 

Notes to Financial Statements

 

NOTE G

Recent Accounting Pronouncements

On March 19, 2008, the FASB released Statement of Financial Accounting Standards No. 161, “Disclosures about Derivative Instruments and Hedging Activities” (“FAS 161”). FAS 161 requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative agreements. The application of FAS 161 is required for fiscal years beginning after November 15, 2008 and interim periods within those fiscal years. At this time, management is evaluating the implications of FAS 161 and believes the adoption of FAS 161 will have no material impact on the Fund’s financial statements.

NOTE H

Department of Treasury’s Temporary Guarantee Program for Money Market Funds

The Fund’s Board of Directors (the “Board”) has approved the participation by the Fund in the U.S. Treasury’s Temporary Guarantee Program for Money Market Funds (the “Program”). The initial term of the Program was from September 18, 2008 to December 18, 2008 and its term was recently extended to April 30, 2009. The Program may be extended for periods up to September 18, 2009, but no decision has been made to extend the Program beyond April 30, 2009. The Program applies to shares of the Fund held by shareholders as of the close of business as of September 19, 2008 (the “Covered Shareholders”). Subject to the limitations discussed below, the Program will protect Covered Shareholders if the Fund “breaks the buck”, meaning that the stable net asset value (“NAV”) of $1.00 per share that the Fund seeks to maintain falls below $.995 per share (the “Guarantee Event”). In order to qualify for this protection, the Fund must liquidate within approximately 30 days after the Guarantee Event. The Treasury will cover any shortfall between the NAV at the time of liquidation and the NAV of $1.00 per share.

Because payments under the Program apply to Covered Shareholders based on the number of shares held on September 19, 2008, a shareholder would receive no payments for any increase in the number of the Fund’s shares held after that date. If a shareholder closes his or her account, the shareholder will not be covered by the Program. If the number of shares held in an account fluctuates after September 19, 2008 due to purchases or sales of shares during the Program period, a shareholder would be covered for the number of shares held in the account as of the close of business on September 19 or the number of shares held on the date of the Guarantee Event, whichever is less. Initial purchases of shares by new shareholders after September 19 are not eligible for coverage under the Program. More information about the Program is available at www.ustreas.gov.

 

14   •  ALLIANCEBERNSTEIN FIXED INCOME SHARES, INC.

 

Notes to Financial Statements

 

FINANCIAL HIGHLIGHTS

Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period

 

   

Six Months

Ended
October 31,

2008

(unaudited)

    

Year Ended

April 30,
2008

    

December 13,
2006(a) to

April 30,
2007

  
     
     

Net asset value, beginning of period

   $  1.00     $  1.00     $  1.00  
     

Income From Investment Operations

      

Net investment income(b)

   .01     .04     .02  

Net realized and unrealized gain on investment transactions(c)

   .00     .00     .00  
     

Net increase in net asset value from operations

   .01     .04     .02  
     

Less: Dividends

      

Dividends from net investment income

   (.01 )   (.04 )   (.02 )
     

Net asset value, end of period

   $  1.00     $  1.00     $  1.00  
     

Total Return

      

Total investment return based on net asset value(d)

   1.08  %   4.40  %   1.99  %

Ratios/Supplemental Data

      

Net assets, end of period (000’s omitted)

   $1,407,558     $1,791,494     $1,147,235  

Ratio to average net assets of:

      

Expenses, net of waivers/reimbursements

   .04  %(e)   .03  %   .06  %(e)

Expenses, before waivers/reimbursements

   .04  %(e)   .03  %   .07  %(e)

Net investment income

   2.14  %(e)   4.16  %   5.14  %(e)

 

(a) Commencement of operations.

 

(b) Based on average shares outstanding.

 

(c) Amount is less than $0.005.

 

(d) Total investment return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption on the last day of the period. Total return does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Total investment return calculated for a period of less than one year is not annualized.

 

(e) Annualized.

 

ALLIANCEBERNSTEIN FIXED INCOME SHARES, INC.  •   15

 

Financial Highlights

 

BOARD OF DIRECTORS

William H. Foulk, Jr.(1), Chairman

Marc O. Mayer

John H. Dobkin(1)

Michael J. Downey(1)

D. James Guzy(1)

Nancy P. Jacklin(1)

Marshall C. Turner, Jr.(1)

Earl D. Weiner(1)

OFFICERS

Robert M. Keith, President and Chief Executive Officer

Philip L. Kirstein, Senior Vice President and Independent Compliance Officer

Raymond J. Papera, Senior Vice President

Edward J. Dombrowski, Vice President

John Giaquinta, Vice President

Maria R. Cona, Vice President

Emilie D. Wrapp, Secretary

Joseph J. Mantineo, Treasurer and Chief Financial Officer

Thomas R. Manley, Controller

 

Custodian and Accounting Agent

State Street Bank and Trust Company
One Lincoln Street
Boston, MA 02111

 

Principal Underwriter

AllianceBernstein Investments, Inc.

1345 Avenue of the Americas
New York, NY 10105

 

Legal Counsel

Seward & Kissel LLP
One Battery Park Plaza
New York, NY 10004

   

Independent Registered Public Accounting Firm

Ernst & Young LLP

5 Times Square
New York, NY 10036

 

Transfer Agent

AllianceBernstein Investor
Services, Inc.
P.O. Box 786003
San Antonio, TX 78278-6003
Toll-Free (800) 221-5672

 

(1) Member of the Audit Committee, Governance and Nominating Committee and Independent Directors Committee. Mr. Foulk is the sole member of the Fair Value Pricing Committee.

 

16   •  ALLIANCEBERNSTEIN FIXED INCOME SHARES, INC.

 

Board of Directors

 

 

THE FOLLOWING IS NOT PART OF THE SHAREHOLDER REPORT OR THE FINANCIAL STATEMENTS

SUMMARY OF SENIOR OFFICER’S EVALUATION OF INVESTMENT ADVISORY AGREEMENT1

The following is a summary of the evaluation of the investment advisory agreement between AllianceBernstein L.P. (the “Adviser”) and AllianceBernstein Fixed-Income Shares, Inc. (the “Fund”) with respect to AllianceBernstein Government STIF Portfolio (the “Portfolio”).2 The evaluation of the Investment Advisory Agreement was prepared by Philip L. Kirstein, the Senior Officer of the Fund for the Directors of the Fund, as required by the September 1, 2004 Assurance of Discontinuance (“AoD”) between the Adviser and the New York State Attorney General. 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 Portfolio which was provided to the Directors in connection with their review of the proposed initial approval 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 Portfolio grow larger; and

 

  6. Nature and quality of the Adviser’s services including the performance of the Portfolio.

ADVISORY FEES AND EXPENSE REIMBURSEMENTS & RATIOS

The Portfolio is not charged a fee by the Adviser for advisory services. The Portfolio is meant to provide an investment option to institutional clients of the Adviser, including most of the AllianceBernstein Mutual Funds, for short-term investment of uninvested cash. The Portfolio is intended to offer clients competitive short-term returns and enable the Adviser to deliver more consistent and predictable returns while reducing expenses for clients. The Adviser will be indirectly compensated for its services to the Portfolio by compensation the Adviser receives from institutional clients that invest in the Portfolio.

 

1 It should be noted that the Senior Officer’s fee evaluation was completed on October 22, 2008.

 

2 Future references to the Portfolio does not include “AllianceBernstein.”

 

ALLIANCEBERNSTEIN FIXED INCOME SHARES, INC.  •   17

 

The Portfolio’s net assets on September 30, 2008 is set forth below:

 

Portfolio   Net Assets ($MM)
Government STIF Portfolio   $    896.0

The Adviser is reimbursed as specified in the Investment Advisory Agreement for certain clerical, legal, accounting, administrative and other services provided to the Portfolio. During the most recently completed fiscal year, the Adviser received $67,296 (0.01% of the Portfolio’s average daily net assets) for providing such service.

Set forth below is the total expense ratio of the Portfolio, annualized for the most recent semi-annual period:

 

Portfolio  

Total Expense

Ratio

    Fiscal
Year
Government STIF Portfolio   0.03%    April 30

 

I. MANAGEMENT FEES CHARGED TO INSTITUTIONAL AND OTHER CLIENTS

The advisory 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 Portfolio that is 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 Portfolio’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 Portfolio are more costly than those for institutional client assets due to the greater complexities and time required for investment companies, although as previously noted, the Adviser is entitled to be reimbursed by the Portfolio for a portion of these expenses. The Adviser also believes that it incurs substantial entrepreneurial risk when offering a new mutual fund since establishing a new mutual fund requires a large upfront investment and it may take a long time for the fund to achieve profitability since the fund must be priced to scale from inception in order to be competitive and assets are acquired one account at a time. 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 a Portfolio is in net redemption and the Adviser is frequently forced to sell securities to raise cash for redemptions. However, managing a Portfolio with positive cash flow may be easier at times than managing a stable pool of assets. Finally, in

 

18   •  ALLIANCEBERNSTEIN FIXED INCOME SHARES, INC.

 

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 an institutional account that has a somewhat similar investment style as the Portfolios. However, with respect to the Portfolio, the Adviser represented that there is no institutional product in the Adviser’s Form ADV that has a substantially similar investment style as that of the Portfolio.

The Adviser represented that it does not sub-advise any registered investment company with a substantially similar investment style as the Portfolio.

 

II. MANAGEMENT FEES CHARGED BY OTHER MUTUAL FUND COMPANIES FOR LIKE SERVICES.

As previously mentioned, the Adviser is not directly paid an advisory fee by the Portfolio. However, the Adviser is compensated by the Adviser’s institutional clients invested in the Portfolio at the rate set forth in the investment advisory agreement for each client. While the rate paid by clients will vary, the portion of the advisory fee of such rate attributable to cash management services (the “Implied Fee”) is deemed by the Adviser to be the same for each client. The Implied Fee should not be greater than the lowest advisory fee paid by any client which invests in the Portfolio.

Lipper, Inc. (“Lipper”), an analytical service that is not affiliated with the Adviser, compared the total expense ratios of the Portfolio to that of the Portfolio’s Lipper Expense Group (“EG”)3 and Lipper Expense Universe (“EU”)4 peers. Lipper describes an EG as a representative sample of comparable funds and an EU as a broader group, consisting of all funds in the same investment classification/objections with a similar load type as the subject Portfolio. Since the Portfolio does not pay an advisory fee, the Portfolio’s total expense ratio is compared to the non-management fee expense ratio, which excludes management fees, 12b-1 fees

 

3 Lipper’s standard methodology for screening funds to be included in an EG entails the consideration of several fund criteria, including fund type, investment classification/objective, load type and similar 12b-1/non-12b-1 service fees, asset (size) comparability, and expense components and attributes. An EG will typically consist of seven to twenty funds.

 

4 Except for asset (size) comparability and load type, Lipper uses the same EG criteria for selecting an EU peer. Unlike the EG, the EU allows for the same adviser to be represented by more than just one fund.

 

ALLIANCEBERNSTEIN FIXED INCOME SHARES, INC.  •   19

 

and non 12b-1 service fees, of the Portfolio’s EG and EU peers that pay an advisory fee. The result of Lipper’s comparison is set forth below:

 

Portfolio  

Expense

Ratio
(%)

  

Lipper Exp.

Group
Median
(%)

  

Lipper

Group

Rank

  

Lipper Exp.

Universe

Median

(%)

  

Lipper
Universe

Rank

Government STIF Portfolio   0.030   0.200   1/13   0.200   1/55

 

III. COSTS TO THE ADVISER AND ITS AFFILIATES OF SUPPLYING SERVICES PURSUANT TO THE MANAGEMENT FEE ARRANGEMENT, EXCLUDING ANY INTRA-CORPORATE PROFIT.

The Adviser utilizes two profitability reporting systems, which operate independently but are aligned with each other, to estimate the Adviser’s profitability in connection with investment advisory services provided to the Portfolios. The Senior Officer has retained a consultant to provide independent advice regarding the alignment of the two profitability systems as well as the methodologies and allocations utilized by both profitability systems. See Section IV for additional discussion.

 

IV. PROFIT MARGINS OF THE ADVISER AND ITS AFFILIATES FOR SUPPLYING SUCH SERVICES.

The profitability information for the Portfolio, prepared by the Adviser for the Board of Directors, was reviewed by the Senior Officer and the consultant. The Portfolio does not pay an advisory fee to the Portfolio. The Portfolio does not pay an advisory fee to the Portfolio. However, the Adviser does profit indirectly through the advisory fees that it receives from the institutional clients that utilize the Portfolio to invest short-term cash. The profitability of the Portfolio, which was positive in 2007, was calculated using a weighted average of the profitability of the institutional clients that invest in the Portfolio, in addition to any fund specific revenue or expense item.

In addition to the indirect profits that the Adviser earns from managing assets of institutional clients that utilize the Portfolio to invest short-term cash, certain of the Adviser affiliates have a business relationship with the Portfolio and earn a profit from providing other services to the Portfolio. The courts have referred to this type of business relationships as “fall-out benefits” to the Adviser and indicated that such benefits should be factored into the evaluation of the total relationship between the Portfolio 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 provided the affiliates’ charges and services are competitive. AllianceBernstein Investments, Inc. (“ABI”), an affiliate of the Adviser and the Portfolio’s underwriter, does not receive a fee for its services. AllianceBernstein Investor Services, Inc. (“ABIS”), an affiliate of the Adviser and the Portfolio’s transfer agent, received $950 during the Portfolio’s most recently completed fiscal year.

 

20   •  ALLIANCEBERNSTEIN FIXED INCOME SHARES, INC.

 

V. POSSIBLE ECONOMIES OF SCALE

Although the Portfolio does not pay the Adviser an advisory fee, it is still worth considering information on possible economies of scale. The Adviser has indicated that economies of scale are being shared with shareholders through fee structures,5 subsidies and enhancement to services. Based on some of the professional literature that has considered economies of scale in the mutual fund industry, it is thought that to the extent economies of scale exist, they may more often exist across a fund family as opposed to a specific fund. This is because the costs incurred by the Adviser, such as investment research or technology for trading or compliance systems, can be spread across a greater asset base as the fund family increases in size. It is also possible that as the level of services required to operate a successful investment company has increased over time, and advisory firms have made such investments in their business to provide services, there may be a sharing of economies of scale without a reduction in advisory fees.

An independent consultant, retained by the Senior Officer, provided the Board of Directors an update of the Deli 6 study on advisory fees and various fund characteristics. The independent consultant first reiterated the results of his previous two dimensional comparison analysis (fund size and family size) with the Board of Directors.7 The independent consultant then discussed the results of the regression model that was utilized to study the effects of various factors on advisory fees. The regression model output indicated that the bulk of the variation in fees predicted were explained by various factors, but substantially by fund assets under management (“AUM”), family AUM, index fund indicator and investment style. The independent consultant also compared the advisory fees of the AllianceBernstein Mutual Funds to similar funds managed by 19 other large asset managers, regardless of fund size and the large asset manager’s proportion of mutual fund assets to non-mutual fund assets.

 

VI. NATURE AND QUALITY OF THE ADVISER’S SERVICES INCLUDING THE PERFORMANCE OF THE FUND.

With assets under management of $590 billion as of September 30, 2008, the Adviser has the investment experience to manage the portfolio assets of the Portfolio and provide non-investment services (described in Section II) to the Portfolio.

 

5 Fee structures include fee reductions, pricing at scale and breakpoints in advisory fee schedules.

 

6 The Deli study was originally published in 2002 based on 1997 data.

 

7 The two dimensional analysis showed patterns of lower advisory fees for funds with larger asset sizes and funds from larger family sizes compared to funds with smaller asset sizes and funds from smaller family sizes, which according to the independent consultant is indicative of a sharing of economies of scale and scope. However, in less liquid and active markets, such is not the case, as the empirical analysis showed potential for diseconomies of scale in those markets. The empirical analysis also showed diminishing economies of scale and scope as funds surpassed a certain high level of assets.

 

ALLIANCEBERNSTEIN FIXED INCOME SHARES, INC.  •   21

 

The information below, prepared by Lipper, shows the 1 year gross performance return of the Portfolio relative to the median of the Portfolio’s Lipper Performance Group (“PG”) and Lipper Performance Universe (“PU”) for the period ended July 31, 2008.8

 

Portfolio   Portfolio
Return
(%)		   PG Median
(%)		   PU Median
(%)		   PG Rank   PU Rank
Government STIF          
1 Year   3.57   3.87   3.80   13/13   56/58

Set forth below is the 1 year and since inception net performance returns of the Portfolio (in bold) versus its benchmark:9

 

     Periods Ending July 31, 2008
Annualized Net Performance
    

1 Year

(%)

  

Since Inception

(%)

Government STIF Portfolio   3.60   4.27
Lipper Money Market Funds Average   3.25   3.75
Inception Date: December 13, 2006    

CONCLUSION:

Based on the factors discussed above the Senior Officer’s conclusion is that the Investment Advisory Agreement for the Portfolio 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 Portfolio is based on an evaluation of all of these factors and no single factor was dispositive.

Dated: November 25, 2008

 

8 The Portfolio’s PG is identical to the Portfolio’s EG. The Portfolio’s PU is not identical to the Portfolio’s EU as the criteria for including/excluding a portfolio in/from a PU are somewhat different from that of an EU.

 

9 The Adviser provided Portfolio and benchmark performance return information for periods through July 31, 2008. The benchmark’s inception return is from the nearest month-end after the Portfolio’s actual inception.

 

22   •  ALLIANCEBERNSTEIN FIXED INCOME SHARES, INC.

THIS PAGE IS NOT PART OF THE SHAREHOLDER REPORT OR THE FINANCIAL STATEMENTS

ALLIANCEBERNSTEIN FAMILY OF FUNDS

 

Wealth Strategies Funds

Balanced Wealth Strategy

Wealth Appreciation Strategy

Wealth Preservation Strategy

Tax-Managed Balanced Wealth Strategy

Tax-Managed Wealth Appreciation Strategy

Tax-Managed Wealth Preservation Strategy

Blended Style Funds

U.S. Large Cap Portfolio

International Portfolio

Tax-Managed International Portfolio

Growth Funds

Domestic

Growth Fund

Large Cap Growth Fund

Small Cap Growth Portfolio

Small/Mid Cap Growth Fund*

Global & International

Global Growth Fund*

Global Thematic Growth Fund*

Greater China ‘97 Fund

International Growth Fund

Value Funds

Domestic

Balanced Shares

Focused Growth & Income Fund

Growth & Income Fund

Small/Mid Cap Value Fund

Utility Income Fund

Value Fund

Global & International

Global Real Estate Investment Fund

Global Value Fund

International Value Fund

 

Taxable Bond Funds

Diversified Yield Fund

Global Bond Fund

High Income Fund*

Intermediate Bond Portfolio

Short Duration Portfolio

Municipal Bond Funds

 

National
National II*
Arizona
California
California II*
Florida
Massachusetts

   

Michigan
Minnesota
New Jersey
New York
Ohio
Pennsylvania
Virginia

Intermediate Municipal Bond Funds

Intermediate California

Intermediate Diversified

Intermediate New York

Closed-End Funds

AllianceBernstein Global High Income Fund

AllianceBernstein Income Fund

AllianceBernstein National Municipal Income Fund

ACM Managed Dollar Income Fund

Alliance California Municipal Income Fund

Alliance New York Municipal Income Fund

The Spain Fund


Retirement Strategies Funds

 

2000 Retirement Strategy

  

2020 Retirement Strategy

  

2040 Retirement Strategy

2005 Retirement Strategy

  

2025 Retirement Strategy

  

2045 Retirement Strategy

2010 Retirement Strategy

  

2030 Retirement Strategy

  

2050 Retirement Strategy

2015 Retirement Strategy

  

2035 Retirement Strategy

  

2055 Retirement Strategy

We also offer Exchange Reserves,** which serves as the money market fund exchange vehicle for the AllianceBernstein mutual funds.

You should consider the investment objectives, risks, charges and expenses of any AllianceBernstein fund/portfolio carefully before investing. For free copies of our prospectuses, which contain this and other information, visit us online at www.alliancebernstein.com or contact your financial advisor. Please read the prospectus carefully before investing.

 

*   Prior to January 28, 2008, High Income Fund was named Emerging Market Debt Fund. Prior to November 3, 2008, Small/Mid Cap Growth Fund was named Mid Cap Growth Fund, Global Growth Fund was named Global Research Growth Fund, and Global Thematic Growth Fund was named Global Technology Fund. Prior to December 1, 2008, National II was named Insured National and California II was named Insured California.

 

** An investment in the Fund is not a deposit in a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund.

 

ALLIANCEBERNSTEIN FIXED INCOME SHARES, INC.  •   23

 

AllianceBernstein Family of Funds

NOTES

 

24   •  ALLIANCEBERNSTEIN FIXED INCOME SHARES, INC.

 

ALLIANCEBERNSTEIN FIXED INCOME SHARES, INC.

1345 Avenue of the Americas

New York, NY 10105

800.221.5672

LOGO

 

 

FIS-0152-1008    LOGO

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 Fixed-Income Shares, Inc

 

By:  

/s/    Robert M. Keith

 

Robert M. Keith

President

Date: December 27, 2008

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/    Robert M. Keith

  Robert M. Keith
  President
Date: December 27, 2008
By:  

/s/    Joseph J. Mantineo

  Joseph J. Mantineo
  Treasurer and Chief Financial Officer
Date: December 27, 2008