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Alliance
Municipal
Trust
- Massachusetts
Portfolio
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Alliance Capital [LOGO](R)
Annual Report
June 30, 2000
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<PAGE>
LETTER TO SHAREHOLDERS Alliance Municipal Trust - Massachusetts Portfolio
===============================================================================
August 2, 2000
Dear Shareholder:
We are pleased to provide you with an update of Alliance Municipal
Trust-Massachusetts Portfolio for the annual reporting period ended June 30,
2000.
U.S. financial markets were anticipating some signs of a slowdown for the first
half of 2000--some sign that past Fed rate hikes were having an effect and that
little, if any, further tightening would be necessary. The U.S. economy,
however, has continued to grow. The U.S. Commerce Department recently reported
that the U.S. economy grew at an impressive, seasonally-adjusted annual rate of
+5.2% during the spring quarter. Inflation, as measured by the broad and
reliable gross domestic purchases and personal consumption price indices, held
stable at 2.5% on a year-earlier basis. The second-quarter growth number, well
above the 3.5% to 4.0%, consensus and actually faster than a downward-revised
quarter-one growth rate of +4.8%, created immediate anxiety. As a result,
interest rates headed higher and stock prices headed lower.
The U.S. economy's gross domestic product report does, however, give evidence
to some signs of cooling off. For example, a key measure of aggregate demand
(real final sales) slowed sharply to +4.2% from +6.7% in the first quarter.
Monthly evidence that consumers had taken a break from their long-running
shopping spree was confirmed. Household spending dipped to just +3.0% in the
second quarter versus +7.6% in the first quarter. Unwanted inventories added a
full percentage point to second-quarter growth. We also believe that a more
meaningful comparison can be made between growth during the second half of 1999
(+7.0%) and growth during the first half of this year (+5.0%).
In his late-July Congressional testimony, Fed Chairman Alan Greenspan laid out
an upbeat forecast for the U.S. economy and rendered a somewhat
self-congratulatory assessment of the role the Federal Reserve has played in
securing that future. To be sure, we welcome his endorsement of both the "New
Economy" paradigm and our own bullishness about accelerating productivity. The
subsequent report on employment costs, showing a quarter-to-quarter gain of
only 1.0% in the spring versus a 1.4% rise in the first quarter, and the
soon-to-be-released report on second-quarter productivity, should help to
validate the Chairman's optimism. Mr. Greenspan is repositioning the Fed to
play a more reactive role going forward. He understands that financial markets
should and must take the lead role in terms of steering the New Economy. As a
consequence, although we still believe the Fed will tighten further, we look
for that tightening to come late in the year and only after the bond market has
laid the groundwork.
As for U.S. financial markets, the road to higher prices will be a bit bumpier
than we expected. Inaction by the Fed toward the end of August could open the
window to the upside, but for now we see more volatility than opportunity. With
an election in front of us, the next several months could be a difficult time
for investors. Therefore investors may want to use periods of asset market
strength to establish more defensive positions.
We appreciate your investment in the portfolios of Alliance Municipal
Trust-Massachusetts Portfolio and look forward to reporting further investment
progress in the coming period.
Sincerely,
/s/ Ronald M. Whitehill
Ronald M. Whitehill
President
1
<PAGE>
STATEMENT OF NET ASSETS
June 30, 2000 Alliance Municipal Trust - Massachusetts Portfolio
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Principal
Amount
(000) Security(a) Yield Value
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MUNICIPAL BONDS- 93.8%
MASSACHUSETTS-93.8%
Billerica GO
FGIC Series 99
$ 700 12/15/00............................ 4.10% $ 710,528
Boston Water & Sewer
Commission Revenue
Series 94A
1,300 11/01/24 (b)........................ 4.50 1,300,000
Bourne GO BAN
Series 99B
2,000 9/29/00............................. 3.75 2,002,372
Fitchburg GO
FSA Series 99
550 11/15/00............................ 3.90 555,198
Freetown GO BAN
Series 00 WI
3,000 7/16/01 (b)......................... 4.50 3,007,140
Holyoke Pollution
Control Revenue
(Holyoke Water Power)
Series 88
3,000 11/01/13 (b)........................ 4.60 3,000,000
Kingston GO
FGIC Series 99
445 11/15/00............................ 3.92 447,554
Massachusetts Bay
Transport Authority
(General Transportation
Systems)
Series 99
1,000 3/01/14 (b)......................... 4.65 1,000,000
Massachusetts
Development Finance
Agency
(Elderhostel, Inc. Project)
Series 00
3,000 8/01/30 (b)......................... 4.65 3,000,000
Massachusetts
Development Finance
Agency
(ICC Realty Project)
Series 97
AMT
1,700 12/01/16 (b)........................ 4.85 1,700,000
Massachusetts
Development Finance
Agency
(Marine Biological Lab
Issue)
Series 00
2,000 2/01/30 (b)......................... 4.65% 2,000,000
Massachusetts
Development Finance
Agency
(New Bedford Whaling
Museum)
Series 99
2,400 9/01/29 (b)......................... 4.70 2,400,000
Massachusetts
Development Finance
Agency
(Newton Country Day
School)
Series 00
2,200 1/01/30 (b)......................... 4.65 2,200,000
Massachusetts
Development Finance
Agency
(Waste Management)
Series 99
AMT
2,000 7/01/29 (b)......................... 4.90 2,000,000
Massachusetts GO
Series 97
500 8/01/00............................. 3.71 500,535
Massachusetts GO
Series 97 B
2,500 8/01/15 (b)......................... 4.60 2,500,000
Massachusetts GO
Series 98A
2,900 9/01/16 (b)......................... 4.50 2,900,000
Massachusetts Health &
Education
(Harvard University)
Series 89L
3,000 1/01/24 (b)......................... 4.40 3,000,000
Massachusetts Health &
Education
(Univer. of Massachusetts)
Series 00A
4,300 11/01/30 (b)........................ 4.55 4,300,000
2
<PAGE>
Alliance Municipal Trust - Massachusetts Portfolio
===============================================================================
Principal
Amount
(000) Security(a) Yield Value
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Massachusetts Health &
Education Facility
(Brigham & Women's
Hospital)
Series 85A
$ 2,440 7/01/17 (b)......................... 4.60% $ 2,440,000
Massachusetts Health &
Education Facility
(Wellesley College)
Series 92E
2,285 7/01/22 (b)......................... 4.40 2,285,000
Massachusetts Health &
Educational Facilities
Authority
(Boston University)
Series H
3,000 12/01/29 (b)........................ 4.65 3,000,000
Massachusetts Health &
Educational Facilities
Authority
(Partners Healthcare
System)
Series 97P-1
2,350 7/01/27 (b)......................... 4.60 2,350,000
Massachusetts Health &
Educational Facilities
Authority
(Partners Healthcare
System)
Series 97P-2
1,000 7/01/27 (b)......................... 4.70 1,000,000
Massachusetts IFA
(ADP Inc. Project)
Series 97
1,000 12/01/19 (b)........................ 4.85 1,000,000
Massachusetts IFA
(America Tech)
Series 97
AMT
500 8/01/22 (b)......................... 4.85 500,000
Massachusetts IFA
(Berkshire Project)
Series 90
3,700 9/01/20 (b)(c)...................... 4.75 3,700,000
Massachusetts IFA
(Buckingham Browne)
1,700 5/01/27 (b)......................... 4.65 1,700,000
Massachusetts IFA
(Carand Realty Trust)
AMT
725 5/01/17 (b)......................... 4.75 725,000
Massachusetts IFA
(KMS Companies)
Series 96
AMT
3,400 5/01/16 (b)......................... 4.75% 3,400,000
Massachusetts IFA
(Mount Ida College
Project)
Series 97
AMT
1,440 12/01/27 (b)........................ 4.65 1,440,000
Massachusetts IFA
(Nutramax Prods Inc.)
Series 96
AMT
2,600 5/01/16 (b)......................... 4.80 2,600,000
Massachusetts IFA
(Showa Womens
Institute, Inc.)
Series 94
3,500 3/15/04 (b)......................... 4.75 3,500,000
Massachusetts IFA
(Tamasi Family
Development)
Series 98
800 5/01/13 (b)......................... 4.75 800,000
Massachusetts IFA
(Techprint Issue)
Series 97
AMT
812 6/01/17 (b)......................... 4.65 812,000
Massachusetts IFA PCR
(Holyoke Water &
Power Co.)
Series 90
AMT
3,500 12/01/20 (b)........................ 4.70 3,500,000
Massachusetts Municipal
Wholesale Electric
AMBAC Series 92B
1,000 7/01/00............................. 3.90 1,000,000
Massachusetts Port
Authority
FGIC Series 90A
1,100 7/01/00............................. 3.70 1,100,000
Massachusetts Water
Resources Authority
FGIC Series 98D
1,000 11/01/26 (b)........................ 4.60 1,000,000
3
<PAGE>
STATEMENT OF NET ASSETS
(continued) Alliance Municipal Trust - Massachusetts Portfolio
===============================================================================
Principal
Amount
(000) Security(a) Yield Value
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Medfield GO
Series 99
$ 470 8/15/00............................. 3.75% $ 471,770
Salisbury GO
MBIA Series 99
510 8/01/00............................. 3.62 511,315
Upper Blackstone
(Water Pollution
Abatement Dist.)
AMBAC Series 99
335 8/01/00............................. 3.71 335,979
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Total Municipal Bonds
(amortized cost
$77,694,391)........................ 77,694,391
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COMMERCIAL PAPER- 6.3%
MASSACHUSETTS-6.3%
Massachusetts Water
Resources Authority
Series 94
3,235 9/07/00............................. 4.41% 3,235,000
Massachusetts Water
Resources Authority
Series 94
2,000 9/21/00............................. 4.30 2,000,000
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Total Commercial Paper
(amortized cost
$5,235,000)......................... 5,235,000
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TOTAL INVESTMENTS-100.1%
(amortized cost
$82,929,391)........................ 82,929,391
Other assets less
liabilities-(0.1%).................. (116,120)
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NET ASSETS-100%
(offering and redemption
price of $1.00 per share;
82,813,271 shares
outstanding)........................ $ 82,813,271
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(a) All securities either mature or their interest rate changes in one year
or less.
(b) Variable Rate Demand Notes (VRDN) are instruments whose interest rates
change on a specified date (such as 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.
(c) Security, or portion thereof, with an aggregate market value of
$3,700,000 has been segregated to collateralize when issued security.
Glossary of Terms:
AMBAC - American Municipal Bond Assurance Corporation
AMT - Alternative Minimum Tax
BAN - Bond Anticipation Note
FGIC - Financial Guaranty Insurance Company
FSA - Financial Security Assurance
GO - General Obligation
IFA - Industrial Finance Authority
MBIA - Municipal Bond Investors Assurance
PCR - Pollution Control Revenue
WI - When Issued
See notes to financial statements.
4
<PAGE>
STATEMENT OF OPERATIONS
Year Ended June 30, 2000 Alliance Municipal Trust - Massachusetts Portfolio
===============================================================================
<TABLE>
<S> <C> <C>
INVESTMENT INCOME
Interest ............................................ $ 3,193,732
EXPENSES
Advisory fee (Note B) ........................................ $ 425,987
Distribution assistance and administrative service (Note C) .. 422,480
Custodian fees ............................................... 71,419
Transfer agency (Note B) ..................................... 27,434
Registration fees ............................................ 27,427
Audit and legal fees ......................................... 15,350
Printing ..................................................... 8,895
Trustees' fees ............................................... 3,081
Amortization of organization expense ......................... 2,467
Miscellaneous ................................................ 2,450
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Total expenses ............................................... 1,006,990
Less: expense reimbursement .................................. (155,015)
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Net expenses ................................................. 851,975
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NET INCREASE IN NET ASSETS FROM OPERATIONS ..................... $ 2,341,757
===========
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
===============================================================================
Year Ended Year Ended
June 30, 2000 June 30, 1999
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INCREASE IN NET ASSETS FROM OPERATIONS
Net investment income ........................ $ 2,341,757 $ 896,822
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income ........................ (2,341,757) (896,822)
TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST
Net increase (Note E) ........................ 32,333,186 22,647,685
------------ ------------
Total increase ............................... 32,333,186 22,647,685
NET ASSETS
Beginning of period .......................... 50,480,085 27,832,400
------------ ------------
End of period ................................ $ 82,813,271 $ 50,480,085
============ ============
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See notes to financial statements.
5
<PAGE>
NOTES TO FINANCIAL STATEMENTS
June 30, 2000 Alliance Municipal Trust - Massachusetts Portfolio
===============================================================================
NOTE A: Significant Accounting Policies
Alliance Municipal Trust (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: 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, Alliance Municipal
Trust-Virginia Portfolio, Alliance Municipal Trust-Florida Portfolio and
Alliance Municipal Trust-Massachusetts Portfolio (the "Portfolio"). Each series
is considered to be a separate entity for financial reporting and tax purposes.
The Portfolio pursues its objectives by maintaining a portfolio of high-quality
money market securities all of which, at the time of investment, have remaining
maturities of 397 days or less. The financial statements have been prepared in
conformity with accounting principles generally accepted in the United States,
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 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 July 2002.
3. Taxes
It is the policy of the Portfolio 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 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, 2000, are exempt from federal income taxes. However,
certain shareholders may be subject to the alternative minimum tax.
5. Investment Income and Investment Transactions
Interest income is accrued as earned. Investment transactions are recorded on a
trade date basis. Realized gain (loss) from investment transactions is recorded
on the identified cost basis.
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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% on the first $1.25 billion of average daily net
assets; .49% on the next $.25 billion; .48% on the next $.25 billion; .47% on
the next $.25 billion; .46% on the next $1 billion; and .45% 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. For
the year ended June 30, 2000, the reimbursement amounted to $155,015.
The Portfolio compensates Alliance Fund Services, Inc., a wholly-owned
subsidiary of the Adviser, under a Transfer Agency Agreement for providing
personnel and facilities to perform transfer agency services for the Portfolio.
Such compensation amounted to $18,000 for the year ended June 30, 2000.
For the year ended June 30, 2000, the Fund's expenses were reduced by $136
under an expense offset arrangement with Alliance Fund Services, Inc.
6
<PAGE>
Alliance Municipal Trust - Massachusetts Portfolio
===============================================================================
NOTE C: Distribution Assistance and Administrative Services Plan
Under this Plan, the Portfolio pays Alliance Fund Distributors, Inc., (the
"Distributor"), a wholly-owned subsidiary of the Adviser, a distribution fee at
the annual rate of .25% of the average daily value of the Portfolio's net
assets. The Plan provides that the Distributor will use such payments in their
entirety for distribution assistance and promotional activities. For the year
ended June 30, 2000, the distribution fee amounted to $212,994. In addition,
the Portfolio may reimburse certain broker-dealers for administrative costs
incurred in connection with providing shareholder services, and may reimburse
the Adviser for accounting and bookkeeping, and legal and compliance support.
For the year ended June 30, 2000, such payments by the Portfolio amounted to
$209,486, a substantial portion of which was paid to the Adviser and its
affiliates.
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NOTE D: Investment Transactions
At June 30, 2000, the cost of investments for federal income tax purposes was
the same as the cost for financial reporting purposes.
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NOTE E: Transactions in Shares of Beneficial Interest
An unlimited number of shares ($.01 par value) are authorized. At June 30,
2000, capital paid-in aggregated $82,813,271. Transactions, all at $1.00 per
share, were as follows:
Year Ended Year Ended
June 30, June 30,
2000 1999
------------ ------------
Shares sold .................................... 351,357,927 157,532,699
Shares issued on reinvestments of dividends .... 2,341,757 896,822
Shares redeemed ................................ (321,366,498) (135,781,836)
------------ ------------
Net increase ................................... 32,333,186 22,647,685
============ ============
7
<PAGE>
FINANCIAL HIGHLIGHTS Alliance Municipal Trust - Massachusetts Portfolio
===============================================================================
Selected Data For A Share Of Beneficial Interest Outstanding Throughout Each
Period
<TABLE>
<CAPTION>
Year Ended June 30, April 17, 1997(a)
------------------------------- through
2000 1999 1998 June 30, 1997
------- ------- ------- -------
<S> <C> <C> <C> <C>
Net asset value, beginning of period ........ $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- -------
Income From Investment Operations
Net investment income (b) ................... .027 .023 .028 .007
------- ------- ------- -------
Less: Dividends
Dividends from net investment income ........ (.027) (.023) (.028) (.007)
------- ------- ------- -------
Net asset value, end of period .............. $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= =======
Total Return
Total investment return based on net asset
value (c) ................................. 2.73% 2.31% 2.83% .72%
Ratios/Supplemental Data
Net assets, end of period (000's omitted) ... $82,813 $50,480 $27,832 $15,046
Ratios to average net assets of:
Expenses, net of waivers and
reimbursements .......................... 1.00% 1.00% .85% .50%(d)
Expenses, before waivers and
reimbursements .......................... 1.18% 1.47% 1.37% 2.99%(d)
Net investment income (b) ................. 2.75% 2.26% 2.80% 3.47%(d)
</TABLE>
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(a) Commencement of operations.
(b) Net of expenses reimbursed or waived by the Adviser.
(c) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of
all dividends and distributions at net asset value during the period, and
redemption on the last day of the period. Total investment return
calculated for a period of less than one year is not annualized.
(d) Annualized.
8
<PAGE>
REPORT OF INDEPENDENT
ACCOUNTANTS Alliance Municipal Trust - Massachusetts Portfolio
===============================================================================
To the Board of Trustees and Shareholders of
Alliance Municipal Trust - Massachusetts Portfolio
In our opinion, the accompanying statement of net assets and the related
statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position of
Alliance Municipal Trust - Massachusetts Portfolio (the "Fund") at June 30,
2000, and the results of its operations, the changes in its net assets and the
financial highlights for the year then ended, in conformity with accounting
principles generally accepted in the United States. These financial statements
and financial highlights (hereafter referred to as "financial statements") are
the responsibility of the Fund's management; our responsibility is to express
an opinion on these financial statements based on our audit. We conducted our
audit of these financial statements in accordance with auditing standards
generally accepted in the United States, which require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement
presentation. We believe that our audit, which included confirmation of
securities at June 30, 2000, by correspondence with the custodian and brokers,
provides a reasonable basis for the opinion expressed above. The financial
statements for the year ended June 30, 1999, including the financial highlights
for each of the four years in the period then ended, were audited by other
independent accountants whose report dated July 23, 1999, expressed an
unqualified opinion on those financial statements.
PricewaterhouseCoopers LLP
New York, New York
July 28, 2000
9
<PAGE>
Alliance Municipal Trust - Massachusetts Portfolio
===============================================================================
Alliance Municipal Trust
1345 Avenue of the Americas
New York, NY 10105
Toll-free 1(800)221-5672
TRUSTEES
Dave H. Williams, Chairman
John D. Carifa
Sam Y. Cross (1)
Charles H.P. Duell (1)
William H. Foulk, Jr. (1)
David K. Storrs (1)
Shelby White (1)
OFFICERS
Dave H. Willliams, Chairman
Ronald M. Whitehill, President
Kathleen A. Corbet, Senior Vice President
Drew Biegel, Senior Vice President
John R. Bonczek, Senior Vice President
Doris T. Ciliberti, Senior Vice President
Robert I. Kurzweil, Senior Vice President
Wayne D. Lyski, Senior Vice President
Patricia Ittner, Senior Vice President
William E. Oliver, Senior Vice President
Raymond J. Papera, Senior Vice President
Frances M. Dunn, Vice President
William J. Fagan, Vice President
Linda D. Kelley, Vice President
Joseph R. LaSpina, Vice President
Eileen M. Murphy, Vice President
Maria C. Sazon, Vice President
Edmund P. Bergan, Jr., Secretary
Mark D. Gersten, Treasurer and
Chief Financial Officer
Vincent S. Noto, Controller
CUSTODIAN
State Street Bank and Trust Company
P.O. Box 1912
Boston, MA 02105
DISTRIBUTOR
Alliance Fund Distributors, Inc.
1345 Avenue of the Americas
New York, NY 10105
TRANSFER AGENT
Alliance Fund Services
P.O. Box 1520
Secaucus, NJ 07096-1520
Toll-Free 1-(800) 221-5672
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, NY 10036
LEGAL COUNSEL
Seward & Kissel LLP
One Battery Park Plaza
New York, NY 10004
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(1) Members of the Audit Committee.
10
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<PAGE>
Alliance Municipal Trust - Massachusetts Portfolio ---------------
1345 Avenue of the Americas, New York, NY 10105 BULK RATE
Toll free 1 (800) 221-5672 U.S. POSTAGE
PAID
Yields. For current recorded yield information on New York, NY
Alliance Municipal Trust, call on a touch-tone Permit No. 7131
telephone toll-free (800) 251-0539 and press the ---------------
following sequence of keys:
- - - - - - -
* * 1 2 1 5 #
- - - - - - -
For non-touch-tone telephones, call toll-free (800) 221-9513
------------------------------------------------------------
Alliance Capital[LOGO](R)
(R) These registered service marks used under license from the owner, Alliance
Capital Management L.P.
AMTMAAR600
