ALLIANCE MUNICIPAL TRUST - CONNECTICUT PORTFOLIO
ALLIANCECAPITAL
ANNUAL REPORT
JUNE 30, 1995
ALLIANCE MUNICIPAL TRUST - CONNECTICUT PORTFOLIO
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ALC507071
ACTAR
LETTER TO SHAREHOLDERS ALLIANCE MUNICIPAL TRUST - CONNECTICUT 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 dominantprovider 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-Connecticut's assets have grown 32.6% to over $75 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 - Connecticut Portfolio's 30 day
net yield as of June 30, 1995 was 2.91% vs. 1.81% for the same period ending
June 30, 1994.
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 - CONNECTICUT PORTFOLIO
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PRINCIPAL
AMOUNT
(000) SECURITY+ YIELD VALUE
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MUNICIPAL BONDS-103.6%
CONNECTICUT-101.4%
CONNECTICUT DEVELOPMENT AUTH.
(Bridgeport Hydraulic Co. Project)
Series '95 AMT VRDN*
$ 2,000 5/01/35 3.85% $2,000,000
CONNECTICUT DEVELOPMENT AUTH.
Res. Rec.:(Exeter Energy Project)
Series '89B AMT VRDN*
2,700 12/01/19 4.15 2,700,000
CONNECTICUT DEVELOPMENT AUTH.
HEALTH FACILITY
(Independent Living) Series'90 VRDN*
6,700 7/01/15 3.95 6,700,000
CONNECTICUT DEVELOPMENT AUTH.
IDR
(International Ice Cream Project)
Series '86 AMT VRDN*
1,500 12/01/06 4.05 1,500,000
CONNECTICUT DEVELOPMENT AUTH.
IDR
(Zotos International Project)
Series '84 VRDN*
3,315 12/01/04 4.00 3,315,000
CONNECTICUT DEVELOPMENT AUTH.
PCR
(Central Vermont Public Service)
Series '85 VRDN*
1,000 12/01/15 3.75 1,000,000
CONNECTICUT DEVELOPMENT AUTH.
PCR
(Connecticut Light and Power Co.)
Series '93A VRDN*
3,100 9/01/28 4.10 3,100,000
CONNECTICUT DEVELOPMENT AUTH.
PCR
(Connecticut Light and Power Co.)
Series '93B VRDN*
500 9/01/28 4.25 500,000
CONNECTICUT DEVELOPMENT AUTH.
PCR
(Western Mass. Elec. Co.)
Series '93A VRDN*
4,700 9/01/28 3.95 4,700,000
CONNECTICUT DEVELOPMENT AUTH.
REVENUE
(Rand Whitney Container Board Project)
Series '93 AMT VRDN*
3,000 8/01/23 3.90 3,000,000
CONNECTICUT GO
Economic Recovery Note
Series '91A
2,850 6/15/96 4.05% $2,888,152
CONNECTICUT GO
Economic Recovery Note
Series '91B VRDN*
2,900 6/01/96 3.95 2,900,000
CONNECTICUT GO
Series D
1,000 8/01/95 4.00 1,000,367
CONNECTICUT HEFA
(Bridgeport Hospital)
Series '95B VRDN*
4,000 7/01/25 4.00 4,000,000
CONNECTICUT HEFA
(Charlotte Hungerford Hospital)
Series '90B VRDN*
2,900 7/01/10 4.10 2,900,000
CONNECTICUT HEFA
(Kent School) Series '90 A VRDN*
2,800 7/01/23 3.80 2,800,000
CONNECTICUT HEFA
(Pomfret School Issue)
Series '95A VRDN*
1,000 7/01/24 4.05 1,000,000
CONNECTICUT HFA
(Home Mortgage Finance Project)
Series E2 AMT PPB*
4,290 11/15/95 4.50 4,290,046
CONNECTICUT SPECIAL ASSESSMENT
UNEMPLOYMENT COMPENSATION
Series '93C FGIC PPB*
5,000 7/01/95 3.85 5,000,000
CONNECTICUT SPECIAL ASSESSMENT
UNEMPLOYMENT COMPENSATION
Series '93C FGIC PPB*
4,000 7/01/96 3.90 4,000,000
CONNECTICUT SPECIAL TAX OBLIGATION
Pre-Refunded
(Transportation Infrastructure)
2,000 10/15/95 3.45 2,069,390
2
ALLIANCE MUNICIPAL TRUST - CONNECTICUT PORTFOLIO
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PRINCIPAL
AMOUNT
(000) SECURITY+ YIELD VALUE
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CONNECTICUT SPECIAL TAX OBLIGATION
Pre-Refunded
(Transportation Infrastructure)
$ 750 10/15/95 4.10% $ 774,187
CONNECTICUT SPECIAL TAX OBLIGATION
Series '94 VRDN*
1,000 12/01/10 4.00 1,000,000
HARTFORD REDEV. AGY. MFHR
(Underwood Towers Project)
FSA Series '90 VRDN*
3,100 6/01/20 4.10 3,100,000
MADISON GO BAN
Series '95
2,525 3/27/96 4.05 2,528,584
MERIDEN GO BOND
Series '94 AMBAC
1,825 10/15/95 4.00 1,840,428
MIDDLETOWN GO BAN
Series '95
2,000 4/15/96 4.05 2,003,031
SOUTH CENTRAL WATER SYSTEMS
Series MGT 6B FGIC VRDN*
2,800 8/01/07 4.05 2,800,000
STAMFORD HFA MFHR
(Morgan Street Project)
Series '94 AMT VRDN*
1,600 8/01/24 4.00 1,600,000
77,009,185
PUERTO RICO-2.2%
PUERTO RICO HIGHWAY & TRANSPORTATION AUTHORITY
Series X VRDN*
1,700 7/01/99 3.80% $1,700,000
TOTAL MUNICIPAL BONDS
(amortized cost $78,709,185) 78,709,185
COMMERCIAL PAPER-4.6%
CONNECTICUT-4.6%
CONNECTICUT MUNICIPAL ELECTRIC ENERGY
Cooperative Power Supply
Systems Rev. Series '95A
1,000 9/08/95 4.00 1,000,000
CONNECTICUT HEFA
(Yale University) Series L
2,500 7/12/95 4.20 2,500,000
TOTAL COMMERCIAL PAPER
(amortized cost $3,500,000) 3,500,000
TOTAL INVESTMENTS-108.2%
(amortized cost $82,209,185) 82,209,185
Other assets less liabilities-(8.2%) (6,218,453)
NET ASSETS-100%
(offering and redemption price of
$1.00 per share; 76,020,324 shares
outstanding) $75,990,732
+ 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
BAN Bond Anticipation Note
FGIC Financial Guaranty Insurance Company
GO General Obligation
HEFA Health & Educational Facility Authority
HFA Housing Finance Agency/Authority
IDR Industrial Development Revenue
MFHR Multi-Family Housing Revenue
PCR Pollution Control Revenue
PPB Periodic Put Bond
VRDN Variable Rate Demand Note
See notes to financial statements.
3
STATEMENT OF OPERATIONS
YEAR ENDED JUNE 30, 1995 ALLIANCE MUNICIPAL TRUST - CONNECTICUT PORTFOLIO
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INVESTMENT INCOME
Interest $2,336,747
EXPENSES
Advisory fee (Note B) $327,216
Distribution assistance and administrative
service (Note C) 276,450
Transfer agency 71,772
Custodian fees 51,347
Audit and legal fees 28,632
Registration expense 20,309
Trustees' fees 4,469
Printing 3,869
Amortization of organization expenses 812
Miscellaneous 5,334
Total expenses 790,210
Less: expense reimbursement and fee waiver (266,646)
523,564
Net investment income 1,813,183
REALIZED GAIN/LOSS ON INVESTMENTS
Net realized loss on investments (2,026)
NET INCREASE IN NET ASSETS FROM OPERATIONS $1,811,157
See notes to financial statements.
4
STATEMENTS OF CHANGES
IN NET ASSETS ALLIANCE MUNICIPAL TRUST - CONNECTICUT PORTFOLIO
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YEAR ENDED YEAR ENDED
JUNE 30,1995 JUNE 30,1994
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INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment income $ 1,813,183 $ 1,044,516
Net realized loss on investments (2,026) (16,849)
Net increase in net assets from operations 1,811,157 1,027,667
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income (1,813,183) (1,044,516)
TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST
Net increase 18,678,491 1,106,888
Total increase 18,676,465 1,090,039
NET ASSETS
Beginning of year 57,314,267 56,224,228
End of year $75,990,732 $57,314,267
See notes to financial statements.
5
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1995 ALLIANCE MUNICIPAL TRUST - CONNECTICUT 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 (the "Portfolio"),
Alliance Municipal Trust-New Jersey Portfolio and Alliance Muncipal
Trust-Virginia 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 January, 1995.
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
year 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 for
the year ended June 30, 1995 for expenses exceeding .80 of 1% of its average
daily net assets. For the year ended June 30, 1995, the reimbursement amounted
to $201,203. 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 $40,562 for the year ended June 30, 1995.
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 year ended June 30,
1995, the distribution fee
6
ALLIANCE MUNICIPAL TRUST - CONNECTICUT PORTFOLIO
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amounted to $163,608 of which $65,443 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 year ended June 30, 1995, such payments by the
Portfolio amounted to $112,842 of which $91,700 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 $29,592 of which $10,717 expires
in the year 2000, $16,849 expires in the year 2002 and $2,026 expires in the
year 2003.
NOTE E: TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST
An unlimited number of shares ($.01 par value) are authorized. At June 30,
1995, capital paid-in aggregated $76,020,324. Transactions, all at $1.00 per
share, were as follows:
YEAR ENDED YEAR ENDED
JUNE 30, 1995 JUNE 30, 1994
------------- -------------
Shares sold 243,757,597 181,209,614
Shares issued on reinvestments of dividends 1,813,183 1,046,059
Shares redeemed (226,892,289) (181,148,785)
Net increase 18,678,491 1,106,888
NOTE F: FINANCIAL HIGHLIGHTS
Per share operating performance for a share outstanding throughout each period.
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
----------------------------------------------------
1995 1994 1993 1992 1991
-------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a) .028 .017 .020 .033 .045
LESS: DISTRIBUTIONS
Dividends from net investment income (.028) (.017) (.020) (.033) (.045)
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURNS
Total investment return based on net asset value (b) 2.78% 1.71% 2.00% 3.35% 4.57%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $75,991 $57,314 $56,224 $54,751 $48,482
Ratio to net assets of:
Expenses, net of waivers and .80% .77% .70% .58% .44%
Expenses, before waivers and reimbursements 1.21% 1.21% 1.16% 1.22% 1.16%
Net investment income 2.77% 1.69% 1.97% 3.28% 4.39%
</TABLE>
(a) Net of expenses reimbursed or waived by the Adviser.
(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.
7
INDEPENDENT AUDITOR'S REPORT ALLIANCE MUNICIPAL TRUST - CONNECTICUT PORTFOLIO
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TO THE BOARD OF TRUSTEES AND SHAREHOLDERS
ALLIANCE MUNICIPAL TRUST - CONNECTICUT PORTFOLIO
We have audited the accompanying statement of net assets of the Connecticut
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. These financial
statements 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 audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Connecticut 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
8
ALLIANCE MUNICIPAL TRUST - CONNECTICUT 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
