ALLIANCE MUNICIPAL TRUST
-VIRGINIA PORTFOLIO
ALLIANCECAPITAL
ANNUAL REPORT
JUNE 30, 1995
LETTER TO SHAREHOLDERS ALLIANCE MUNICIPAL TRUST - VIRGINIA PORTFOLIO
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August 3, 1995
Dear Shareholder:
On December 31, 1994, James P. Syrett retired as President of Alliance Cash
Management. His seven years as President were very productive and saw Alliance
become the dominant provider of money funds sold through regional brokerage
firms. On January 1, 1995, it was with great pride that I assumed Jim's
responsibilities, and I look forward to maintaining the high standard of
excellence to which you have grown accustomed.
Money fund assets continue to grow despite volatility in the stock and bond
markets. AMT-Virginia's assets have grown to $67 million in the past year, in
large part because of the effects of T+3-the accelerated settlement of most
security transactions.
Weakness in the fixed income markets has meant significantly higher yields for
money fund investors. Alliance Municipal Trust - Virginia Portfolio's 30 day
net yield as of June 30, 1995 was 3.31%.
Alliance has once again demonstrated its dependability. When Orange County
filed for bankruptcy protection last year, Alliance took action to protect the
$1.00 per share net asset value of the two Alliance tax-free money market funds
holding positions in Orange County securities: Alliance Municipal Trust -
General Portfolio and ACM Institutional Reserves - Tax Free Portfolio. Alliance
arranged for the issuance of a letter of credit from an unaffiliated bank
assuring the payment in full of principal and interest due to the Funds, to the
extent Orange County defaulted on the payments. Thereafter, on July 19, 1995,
in view of continuing uncertainty regarding Orange County's performance of its
financial obligations, Alliance purchased approximately $21 million of Orange
County securities from the two Alliance money market funds, thus eliminating
all Orange County securities from our Alliance money fund portfolios.
Speaking for myself and the entire division, we at Alliance look forward to
serving you with continued diligence in the future.
Very truly yours,
Ronald M. Whitehill
President
1
STATEMENT OF NET ASSETS
JUNE 30, 1995 ALLIANCE MUNICIPAL TRUST - VIRGINIA PORTFOLIO
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PRINCIPAL
AMOUNT
(000) SECURITY+ YIELD VALUE
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MUNICIPAL BONDS-79.6%
VIRGINIA-78.1%
ARLINGTON COUNTY
(Ballston Public Parking Facility)
Series '84 VRDN*
$ 2,700 8/01/17 4.00% $2,700,000
BEDFORD COUNTY IDR
(Nekoosa Packaging Project)
Series '93 VRDN*
2,700 10/01/04 4.25 2,700,000
CAMPBELL COUNTY IDR
(Georgia Pacific Power) AMT VRDN*
3,000 12/01/19 4.25 3,000,000
CHESTERFIELD GO BOND
Pre-Refunded
1,000 1/15/96 4.33 1,019,734
FAIRFAX COUNTY
Public Improvement Series '95A
1,000 6/01/96 3.90 1,027,618
FAIRFAX COUNTY IDA HOSPITAL REVENUE
(Nova Health Services) Series '88C VRDN*
1,000 10/01/25 4.15 1,000,000
FAIRFAX COUNTY IDA HOSPITAL REVENUE
(Nova Health Services) Series '93A
2,000 7/26/95 3.25 2,000,000
FAIRFAX COUNTY IDA HOSPITAL REVENUE
(Nova Health Services) Series '93A
500 9/06/95 3.85 500,000
FAIRFAX COUNTY IDA HOSPITAL REVENUE
(Nova Health Services) Series '93A
1,600 9/06/95 4.15 1,600,000
FAIRFAX COUNTY IDA HOSPITAL REVENUE
(Nova Health Services) Series '93B
1,000 10/10/95 4.00% $1,000,000
FAIRFAX COUNTY REDEVELOPMENT HFA
(Chase Commons Project) Series '84A VRDN*
2,900 12/01/06 4.13 2,900,000
HAMPTON REDEVELOPMENT HFA
(Chase Hampton Project) Series '84A VRDN*
2,500 12/01/06 3.63 2,500,000
HENRICO COUNTY WATER AND SEWER REVENUE
Series '86 Pre-Refunded
700 5/01/96 3.80 736,274
KING GEORGE COUNTY IDR
(Birchwood Power) Series '94A AMT VRDN*
1,300 10/01/24 4.35 1,300,000
KING GEORGE COUNTY IDR
(Birchwood Power) Series '94B AMT VRDN*
1,400 12/01/24 4.35 1,400,000
LYNCHBURG IDA
(Pooled Hospital Finance) Series '85B VRDN*
AMBAC
2,300 12/01/25 4.20 2,300,000
LYNCHBURG IDA
(Pooled Hospital Finance) Series '85C VRDN*
AMBAC
300 12/01/25 4.20 300,000
LYNCHBURG IDA
(Pooled Hospital Finance) Series'85E VRDN*
AMBAC
100 12/01/25 4.20 100,000
NORFOLK GO EAGLE TRUST
Series 944601 VRDN*
3,900 6/01/06 4.25 3,900,000
PENINSULA PORT AUTHORITY
(Dominion Terminal Project)
Series '87C VRDN*
500 7/01/16 4.25 500,000
2
ALLIANCE MUNICIPAL TRUST - VIRGINIA PORTFOLIO
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PRINCIPAL
AMOUNT
(000) SECURITY+ YIELD VALUE
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PRINCE WILLIAM COUNTY WATER &
SEWER SYSTEM REVENUE
P-Float FGIC
$ 820 7/01/21 4.25% $820,000
RICHMOND GO BOND
Equipment Notes Series '95
960 5/15/96 3.70 965,677
RICHMOND HFA
(Tobacco Row) Series B AMT VRDN*
4,500 10/01/24 4.40 4,500,000
VIRGINIA EDUCATION LOAN AUTH.
Student Loan Revenue Series '92
2,000 9/01/95 4.10 2,001,843
VIRGINIA GO EAGLE TRUST
Series 954601 VRDN*
4,000 6/01/21 4.25 4,000,000
VIRGINIA HFA SFMR
(Commonwealth Mortgage) Series B PPB*
2,000 7/12/95 4.40 2,000,000
VIRGINIA HOUSING DEVELOPMENT AUTH.
(AHC Service Corp.- Lee Gardens)
Series '87A VRDN*
2,500 9/01/17 3.85 2,500,000
VIRGINIA HOUSING DEVELOPMENT AUTH. SFMR
Series '95I AMT PPB*
3,000 9/12/95 4.18 3,000,000
52,271,146
PUERTO RICO-1.5%
PUERTO RICO GOVERNMENT DEVELOPMENT BANK
Series '85 VRDN*
1,000 12/01/15 3.80% $1,000,000
Total Municipal Bonds
(amortized cost $53,271,146) 53,271,146
COMMERCIAL PAPER-19.8%
VIRGINIA-17.5%
CHESTERFIELD COUNTY PCR
(Electric & Power Co.) Series '85
2,000 9/11/95 4.20 2,000,000
CHESTERFIELD COUNTY PCR
(Electric & Power Co.) Series '87
1,585 10/02/95 4.10 1,585,000
CHESTERFIELD COUNTY PCR
(Electric & Power Co.) Series '87B
2,000 9/05/95 4.15 2,000,000
NORFOLK IDA
(Sentara Hospital) Series '90A
2,000 9/07/95 4.15 2,000,000
PENINSULA PORT AUTHORITY
(Chessie & Ohio Project)
2,000 8/08/95 4.05 2,000,000
PENINSULA PORT AUTHORITY
(Dominion Terminal Project) Series '87B
1,135 9/12/95 3.70 1,135,000
PENINSULA PORT AUTHORITY
(Dominion Terminal Project) Series '87B
1,000 8/24/95 4.13 1,000,000
11,720,000
3
STATEMENT OF NET ASSETS (CONTINUED)
ALLIANCE MUNICIPAL TRUST - VIRGINIA PORTFOLIO
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PRINCIPAL
AMOUNT
(000) SECURITY+ YIELD VALUE
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PUERTO RICO-2.3%
PUERTO RICO GOVERNMENT DEVELOPMENT BANK
$ 1,500 8/10/95 4.10% $ 1,500,000
Total Commercial Paper
(amortized cost $13,220,000) 13,220,000
TOTAL INVESTMENTS-99.4%
(amortized cost $66,491,146) $66,491,146
Other assets less liabilities-0.6% 429,960
NET ASSETS-100%
(offering and redemption price of $1.00
per share; 66,929,003 shares outstanding) $66,921,106
+ All securities either mature or their interest rate changes in one year or
less.
* Variable Rate Demand Notes (VRDN) are instruments whose interest rates
change on a specified date (such as a coupon date or interest payment date) or
whose interest rates vary with changes in a designated base rate (such as the
prime interest rate). These instruments are payable on demand and are secured
by letters of credit or other credit support agreements from major banks.
Periodic Put Bonds (PPB) are payable on demand quarterly, semi-annually or
annually and their interest rates change less frequently than rates on Variable
Rate Demand Notes.
Glossary of Terms:
AMBAC American Municipal Bond Assurance Corporation
AMT Alternative Minimum Tax
FGIC Financial Guaranty Insurance Company
GO General Obligation
HFA Housing Finance Agency/Authority
IDA Industrial Development Authority
IDR Industrial Development Revenue
PCR Pollution Control Revenue
PPB Periodic Put Bond
SFMR Single Family Mortgage Revenue
VRDN Variable Rate Demand Note
See notes to financial statements.
4
STATEMENT OF OPERATIONS
OCTOBER 25, 1994* TO JUNE 30, 1995
ALLIANCE MUNICIPAL TRUST - VIRGINIA PORTFOLIO
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INVESTMENT INCOME
Interest $1,424,859
EXPENSES
Advisory fee (Note B) $ 181,919
Distribution assistance and administrative
service (Note C) 164,519
Custodian fees 36,861
Transfer agency 31,162
Registration fees 26,088
Audit and legal fees 19,916
Printing 6,970
Trustees' fees 2,693
Prepaid organization expense 1,161
Miscellaneous 1,764
Total expenses 473,053
Less: expense reimbursement and fee waiver (313,415)
159,638
Net investment income 1,265,221
REALIZED AND UNREALIZED GAIN/LOSS ON INVESTMENTS
Net realized loss on investments (7,897)
NET INCREASE IN NET ASSETS FROM OPERATIONS $1,257,324
STATEMENT OF CHANGES IN NET ASSETS
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OCTOBER 25, 1994*
TO JUNE 30, 1995
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INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment income $ 1,265,221
Net realized loss on investments (7,897)
Net increase in net assets from operations 1,257,324
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income (1,265,221)
TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST
Net increase 66,928,803
Total increase 66,920,906
NET ASSETS
Beginning of period 200
End of period $66,921,106
* Commencement of operations.
See notes to financial statements.
5
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1995 ALLIANCE MUNICIPAL TRUST - VIRGINIA PORTFOLIO
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NOTE A: SIGNIFICANT ACCOUNTING POLICIES
Alliance Municipal Trust (the 'Fund') is registered under the Investment
Company Act of 1940, as amended, as an open-end investment company. The Fund
operates as a series company currently issuing six classes of shares of
beneficial interest: Alliance Municipal Trust-General Portfolio, Alliance
Municipal Trust-New York Portfolio, Alliance Municipal Trust-California
Portfolio, Alliance Municipal Trust-Connecticut Portfolio, Alliance Municipal
Trust-New Jersey Portfolio and Alliance Municipal Trust-Virginia Portfolio (the
'Portfolio'). Each series is considered to be a separate entity for financial
reporting and tax purposes. The following is a summary of significant
accounting policies followed by the Portfolio.
1. VALUATION OF SECURITIES
Securities in which the Portfolio invests are traded primarily in the
over-the-counter market and are valued at amortized cost, under which method a
portfolio instrument is valued at cost and any premium or discount is amortized
on a constant basis to maturity. Amortization of premium is charged to income.
Accretion of market discount is credited to unrealized gains.
2. ORGANIZATION EXPENSES
The organization expenses of the Portfolio are being amortized against income
on a straight-line basis through October, 1999.
3. TAXES
It is the Portfolio's policy to comply with 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 applicable,
to its shareholders. Therefore, no provisions for federal income or excise
taxes are required.
4. DIVIDENDS
The Portfolio declares dividends daily from net investment income and
automatically reinvests such dividends in additional shares at net asset value.
Net realized capital gains on investments, if any, are expected to be
distributed near year end. Dividends paid from net investment income for the
period ended June 30, 1995, are exempt from federal income taxes. However,
certain shareholders may be subject to the alternative minimum tax (AMT).
5. GENERAL
Interest income is accrued daily. Security transactions are recorded on the
date securities are purchased or sold. Realized gain (loss) from security
transactions is recorded on the identified cost basis.
NOTE B: ADVISORY FEE AND TRANSACTIONS WITH AN AFFILIATE OF THE ADVISER
The Portfolio pays its Adviser, Alliance Capital Management L.P., an advisory
fee at the annual rate of .50 of 1% on the first $1.25 billion of average daily
net assets; .49 of 1% on the next $.25 billion; .48 of 1% on the next $.25
billion; .47 of 1% on the next $.25 billion; .46 of 1% on the next $1 billion;
and .45 of 1% in excess of $3 billion. The Adviser has agreed, pursuant to the
advisory agreement, to reimburse the Portfolio to the extent that its annual
aggregate expenses (excluding taxes, brokerage, interest and, where permitted,
extraordinary expenses) exceed 1% of its average daily net assets for any
fiscal year. The Adviser also voluntarily agreed to reimburse the Portfolio on
October 25, 1994 (commencement of operations) for all expenses, from October
26, 1994 to May 8, 1995 for expenses exceeding .40 of 1% of its average daily
net assets, from May 9, 1995 to May 31, 1995 for expenses exceeding .50 of 1%
of its average daily net assets and from June 1, 1995 to June 30, 1995 for
expenses exceeding .60 of 1% of its average daily net assets. For the period
ended June 30, 1995, the reimbursement amounted to $277,031. The Portfolio
compensates Alliance Fund Services, Inc. (a wholly-owned subsidiary of the
Adviser) for providing personnel and facilities to perform transfer agency
services for the Portfolio. Such compensation amounted to $20,520 for the
period ended June 30, 1995.
6
ALLIANCE MUNICIPAL TRUST - VIRGINIA PORTFOLIO
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NOTE C: DISTRIBUTION ASSISTANCE AND ADMINISTRATIVE SERVICES PLAN
Under this Plan, the Portfolio pays a distribution fee to the Adviser at an
annual rate of up to .25% of 1% of the Portfolio's average daily net assets.
The Plan provides that the Adviser will use such payments in their entirety for
distribution assistance and promotional activities. For the period ended June
30, 1995, the distribution amounted to $90,959 which $36,384 was waived. In
addition, the Portfolio reimbursed certain broker-dealers for administrative
costs incurred in connection with providing shareholder services, accounting,
bookkeeping, legal and compliance support. For the period ended June 30, 1995,
such payments by the Portfolio amounted to $73,560 of which $47,000 was paid to
the Adviser.
NOTE D: INVESTMENT TRANSACTIONS
At June 30, 1995, the cost of securities for federal income tax purposes was
the same as the cost for financial reporting purposes. At June 30, 1995 the
Portfolio had a capital loss carryforward of $7,897 which expires in the year
2003.
NOTE E: TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST
An unlimited number of shares ($.01 par value) are authorized. At June 30,
1995, capital paid-in aggregated $66,929,003. Transactions, all at $1.00 per
share, were as follows:
OCTOBER 25, 1994(A)
THROUGH
JUNE 30, 1995
-------------------
Shares sold 187,540,379
Shares issued on reinvestments of dividends 1,265,221
Shares redeemed (121,876,797)
Net increase 66,928,803
7
NOTES TO FINANCIAL STATEMENTS
(CONTINUED) ALLIANCE MUNICIPAL TRUST - VIRGINIA PORTFOLIO
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NOTE F: FINANCIAL HIGHLIGHTS
Per share operating performance for a share outstanding throughout each period.
OCTOBER 25,
1994(A)
THROUGH
JUNE 30, 1995
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Net asset value, beginning of period $1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income .023
LESS DISTRIBUTIONS
Dividends from net investment income (.023)
Net asset value, end of period $1.00
TOTAL RETURNS
Total investment return based on net asset value (b)(c) 3.48%(c)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $66,921
Ratio to average net assets of:
Expenses, net of waivers and reimbursements .44%(c)
Expenses, before waivers and reimbursements 1.30%(c)
Net investment income 3.48%(c)
(a) Commencement of operations.
(b) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period.
(c) Annualized.
8
INDEPENDENT AUDITOR'S REPORT ALLIANCE MUNICIPAL TRUST - VIRGINIA PORTFOLIO
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TO THE BOARD OF TRUSTEES AND SHAREHOLDERS
ALLIANCE MUNICIPAL TRUST - VIRGINIA PORTFOLIO
We have audited the accompanying statement of net assets of the Virginia
Portfolio of Alliance Municipal Trust as of June 30, 1995 and the related
statements of operations, changes in net assets, and financial highlights for
the periods indicated in the accompanying financial statements. The financial
statement and financial highlights are the responsibility of the Portfolio's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of June
30, 1995, by correspondence with the custodian.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Virginia Portfolio of Alliance Municipal Trust as of June 30, 1995, and the
results of its operations, changes in its net assets, and its financial
highlights for the periods indicated, in conformity with generally accepted
accounting principles.
McGladrey &Pullen LLP
New York, New York
August 8, 1995
9
ALLIANCE MUNICIPAL TRUST - VIRGINIA PORTFOLIO
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TRUSTEES
DAVE H. WILLIAMS, CHAIRMAN
JOHN D. CARIFA
SAM Y. CROSS
CHARLES H.P. DUELL
WILLIAM H. FOULK, JR.
ELIZABETH J. MCCORMACK
DAVID K. STORRS
SHELBY WHITE
JOHN WINTHROP
OFFICERS
RONALD M. WHITEHILL, PRESIDENT
JOHN R. BONCZEK, SENIOR VICE PRESIDENT
KATHLEEN A. CORBET, SENIOR VICE PRESIDENT
ROBERT I. KURZWEIL, SENIOR VICE PRESIDENT
PATRICIA NETTER, SENIOR VICE PRESIDENT
RONALD R. VALEGGIA, SENIOR VICE PRESIDENT
DREW BIEGEL, VICE PRESIDENT
DORIS T. CILIBERTI, VICE PRESIDENT
WILLIAM E. OLIVER, VICE PRESIDENT
RAYMOND J. PAPERA, VICE PRESIDENT
EDMUND P. BERGAN, JR., SECRETARY
MARK D. GERSTEN, TREASURER & CHIEF FINANCIAL OFFICER
JOSEPH J. MANTINEO, CONTROLLER
CUSTODIAN
STATE STREET BANK AND TRUST COMPANY
P.O. Box 1912
Boston, MA 02105
LEGAL COUNSEL
SEWARD & KISSEL
One Battery Park Plaza
New York, NY 10004
AUDITORS
MCGLADREY & PULLEN, LLP
555 Fifth Avenue
New York, NY 10017
TRANSFER AGENT
ALLIANCE FUND SERVICES, INC.
P.O. Box 1520
Secaucus, NJ 07096-1520
DISTRIBUTOR
ALLIANCE FUND DISTRIBUTORS, INC.
1345 Avenue of the Americas
New York, NY 10105
10
ALLIANCE MUNICIPAL TRUST - VIRGINIA PORTFOLIO
1345 Avenue of the Americas, New York, NY 10105
Toll free 1 (800) 221-5672
YIELDS. For current recorded yield information on Alliance
Municipal Trust, call on a touch-tone telephone toll-free
(800) 251-0539 and press the following sequence of keys:
1 # 1 # 2 1 #
For non-touch-tone telephones, call toll-free (800) 221-9513
ALLIANCECAPITAL
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.
R THESE REGISTERED SERVICE MARKS USED UNDER LICENSE FROM
THE OWNER, ALLIANCE CAPITAL MANAGEMENT L.P.
ALC507078
AVAAR
