LETTER TO SHAREHOLDERS ALLIANCE MUNICIPAL INCOME FUND
- - -------------------------------------------------------------------------------
May 30, 1995
Dear Shareholder:
For the six months ended April 30, 1995, the five Portfolios of Alliance
Municipal Income Fund-National, Insured National, New York, California and
Insured California-have provided high current tax-free income and taxable
equivalent yields. Below are some highlights of your Portfolios as of April 30.
Investment results for each Portfolio appear on page 3.
HIGHLIGHTS OF INDIVIDUAL PORTFOLIOS
Weighted
Issues Rated Average
A or Better Maturity
National 79% 24 yrs.
Insured National 100 23
New York 93 28
California 82 26
Insured California 100 24
MARKET OVERVIEW
Alliance Municipal Income Fund's fiscal half year ending April 30 saw a
dramatic rebound from the tumultuous markets of 1994. While municipal bond
portfolios generally underperformed other sectors of the fixed income markets
during 1994, this group has had by far the most dramatic recovery in 1995. The
rebound in bond prices is primarily a result of the economy showing signs of
slowing in response to higher short-term interest rates and confirmation that
despite the continuing economic expansion, price inflation remains subdued.
Favorable technical conditions in the municipal market have also contributed to
the rally along with declining new issue supply from state and local debt
issuers and improved demand from investors.
Your Fund's fiscal year 1995 began in November amid negative trends in the
municipal market that had prevailed since early 1994 when the Federal Reserve
began to increase short-term interest rates. An imbalance between buyers and
sellers was exacerbated when municipal bond dealers, in an effort to prevent
further losses in a disappointing year for trading profits, cut back their
bidding for securities in the secondary market. This caused prices to drop
precipitously, which accelerated redemptions by frustrated mutual fund
investors. As a result, yields increased by approximately 1.00%, from 6.50% in
late September to 7.50% by late November on triple-A rated 30-year municipal
bonds. This translated into an approximate 11.30% decline in the price of a
typical long municipal issue.
The market began its turnaround in early December as bargain hunters, including
many non-traditional municipal investors such as tax-exempt pension funds and
hedge funds, began purchasing undervalued state and local government debt at
yields ranging from 90-95% of comparable maturity U.S. Treasury bonds. The
rally continued in January with the return of individual investors and mutual
funds reinvesting proceeds from bond calls, bond maturities and interest
payments. January 1, 1995, was a record-breaking date for municipal bonds
either maturing or being called for early redemption. January 1995 also saw a
decline in terms of new issuance of over 60% compared with the same period in
1994. This sharp reduction in the supply of municipal securities available in
the marketplace continued to have a positive impact on prices throughout the
remainder of the Fund's fiscal second quarter ending in April 1995.
INVESTMENT STRATEGY
As we said to you in our last letter, we believe that the dramatic rise in
municipal bond yields during 1994 represented excellent value for long-term
tax-exempt investors and one of the best buying opportunities for municipal
investors in recent years. Therefore, our focus in managing your Portfolios
throughout the period was to take advantage of weak bond prices by selling off
older, higher coupon bonds which we expect to be called for early redemption
over the next few years. We replaced these call-vulnerable positions with new
issue current coupon bonds having a minimum of ten years' call protection. This
repositioning has allowed us to lock in higher current income and it led to
excellent performance results for the Portfolios during the first quarter of
1995.
1
ALLIANCE MUNICIPAL INCOME FUND
- - -------------------------------------------------------------------------------
The Orange County, California bankruptcy protection filing early last December
has caused increased investor focus on the credit quality of state and local
government debt issuers. The highly fragmented nature of the municipal market
and the difficulty that bond rating services have tracking both new and
existing issues makes credit analysis a crucial part of municipal bond
investing. Nevertheless, we do not expect the Orange County bankruptcy filing
to start a trend among municipal issuers. On the contrary, the events in Orange
County should lead to better disclosure and mandatory updating of financial
statements by local government issuers which is a major long-term benefit for
the entire marketplace, which includes both issuers and investors.
OUTLOOK
After a tremendous rebound in the first quarter, we anticipate that municipal
bonds will continue to perform well throughout the rest of calendar year 1995.
Any weakness in prices should represent an opportunity to purchase undervalued
bonds, given the continuing favorable market technicals of low new-issue volume
and continued investor interest in the tax-exempt market. Fundamental trends in
the economy should also favor municipal bonds, with short-term interest rates
stabilizing and inflation remaining low. Price volatility such as that
experienced in late 1994 should also decline significantly, a trend which has
historically been beneficial for municipal bond returns. Municipals also offer
good relative value on an after-tax basis relative to other fixed income
sectors, which would indicate further potential for price appreciation relative
to taxable bonds.
The prospect that tax reforms could diminish the after-tax yield advantage of
municipal bonds could cause some price volatility relative to other fixed
income investments. However, the longer-term probability of such legislation
being enacted appears to be extremely low. We will seek to take advantage of
opportunities to add value to the Portfolios of Alliance Municipal Income Fund
in the second half of the year, and to preserve the gains made year to date.
We appreciate your investment in Alliance Municipal Income Fund and look
forward to reporting its progress to you in the coming months.
Sincerely,
John D. Carifa
Chairman and President
Susan P. Keenan
Senior Vice President
2
INVESTMENT RESULTS
AS OF APRIL 30, 1995 (UNAUDITED) ALLIANCE MUNICIPAL INCOME FUND
- - -------------------------------------------------------------------------------
SEC
AVERAGE ANNUAL TOTAL RETURNS TAXABLE
----------------------------------------------- EQUIVALENT
WITHOUT SALES CHARGE WITH SALES CHARGE 30-DAY YIELD IN
----------------------- ----------------------- SEC 36% TAX
1 5 SINCE 1 5 SINCE YIELD BRACKET
YEAR YEARS INCEPTION* YEAR YEARS INCEPTION* ** **
------ ------ -------- ------ ------ -------- ----- --------
NATIONAL
PORTFOLIO
Class A Shares +7.30% +8.38% +7.90% +2.72% +7.43% +7.34% 5.61% 8.77%
Class B Shares +6.52 N/A +4.28 +3.52 N/A +3.89 5.14 8.03
Class C Shares +6.53 N/A +2.80 +6.53 N/A +2.80 5.14 8.03
INSURED NATIONAL
PORTFOLIO
Class A Shares +7.03% 8.38% +7.45% +2.53% +7.44% +6.88% 5.07% 7.92%
Class B Shares +6.15 N/A +4.62 +3.15 N/A +4.23 4.57 7.14
Class C Shares +6.26 N/A +3.02 +6.26 N/A +3.02 4.58 7.16
NEW YORK
PORTFOLIO
Class A Shares +6.18% 8.00% +6.76% +1.68% +7.06% +6.20% 5.78% 9.03%
Class B Shares +5.34 N/A +3.64 +2.35 N/A +3.25 5.32 8.31
Class C Shares +5.34 N/A +1.91 +5.34 N/A +1.91 5.33 8.33
CALIFORNIA
PORTFOLIO
Class A Shares +7.10% +8.03% +7.69% +2.56% +7.09% +7.12% 5.81% 9.08%
Class B Shares +6.26 N/A +4.38 +3.26 N/A +3.98 5.35 8.36
Class C Shares +6.26 N/A +2.90 +6.26 N/A +2.90 5.36 8.38
INSURED CALIFORNIA
PORTFOLIO
Class A Shares +7.78% +7.90% +7.71% +3.24% +6.97% +7.22% 5.02% 7.84%
Class B Shares +6.82 N/A +3.92 +3.82 N/A +3.54 4.53 7.08
Class C Shares +6.82 N/A +2.29 +6.82 N/A +2.29 4.54 7.09
The average annual total returns reflect investment of dividends and/or capital
gains distributions in additional shares with and without the effect of the
4.25% maximum sales charge (Class A) or applicable contingent deferred sales
charge (Class B); Class C shares are not subject to front-end or contingent
deferred sales charges. Past performance does not guarantee future results.
Investment return and principal value will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than their original cost.
* Inception: Insured California Portfolio Class A Shares, 11/85; all other
Portfolios' Class A Shares, 12/86; Class B Shares, 1/93; Class C Shares, 5/93.
** Yields are for the 30 days ended April 30, 1995.
3
NATIONAL PORTFOLIO
PORTFOLIO OF INVESTMENTS
APRIL 30, 1995 (UNAUDITED) ALLIANCE MUNICIPAL INCOME FUND
- - -------------------------------------------------------------------------------
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS (000) VALUE
- - -------------------------------------------------------------------------------
LONG TERM MUNICIPAL BONDS-100.7%
ALASKA-0.8%
AAA Alaska International Arpt
AMBAC Ser 1 AMT
5.50%, 10/01/15 $ 6,500 $ 5,990,920
ARIZONA-3.3%
AAA Mohave Cnty IDA Util Rev
(Citizen's Utilities) Ser 93B AMT
5.80%, 11/15/28 2,000 1,858,440
NR Mohave Cnty IDR
(Cargill / No Star Steel Proj) Ser 95A AMT
6.70%, 3/01/20 8,500 8,469,315
BBB Navajo Cnty PCR
(Arizona Pub Serv) Ser A
5.875%, 8/15/28 3,680 3,386,483
AAA Phoenix Arpt Rev
Arpt Improvement
MBIA Ser 94D AMT
6.40%, 7/01/12 750 766,718
AA- Phoenix Civic Imp Corp
(Junior Lien Wtr Sys) Ser 94
5.50%, 7/01/24 2,750 2,511,548
AA+ Phoenix Civic Plaza
Bldg Corp Ser 94
(Senior Lien Excise Tax)
6.00%, 7/01/12 4,770 4,784,930
AA Salt River Proj
(Agri Imp & Pwr Dist Elec Sys)
5.75%, 1/01/19 1,790 1,714,068
23,491,502
CALIFORNIA-13.4%
A+ California HFA
MFHR (Multi Unit Rental Hsg) Ser 92A AMT
6.50%, 2/01/14 4,865 4,838,291
A+ California Poll Ctr Fin Auth
PCR (San Diego Gas & Elec) Ser 93A-C AMT
5.85%, 6/01/21 31,335 29,386,903
A California Poll Ctr Fin Auth
PCR (Pacific Gas & Elec) Ser 93A AMT
5.875%, 6/01/23 $48,345 $44,816,298
AA- Long Beach Harbor Rev Ser 93 AMT
5.125%, 5/15/18 17,325 14,924,275
93,965,767
COLORADO-6.8%
BB Denver City & Cnty
(Arpt System Rev) Ser 91A AMT
Zero coupon, 11/15/02 7,015 4,249,687
BB Denver City & Cnty
(Arpt System Rev) Ser 91D AMT
Zero coupon, 11/15/04 13,140 6,903,887
BB Denver City & Cnty
(Arpt System Rev) Ser 92B AMT
7.25%, 11/15/23 6,375 6,409,553
BB Denver City & Cnty
(Arpt System Rev) Ser 91D AMT
7.75%, 11/15/21 29,435 30,509,083
48,072,210
DISTRICT OF COLUMBIA-0.6%
AAA Metro Wash Arpt Auth
Arpt Rev
MBIA Ser 94A AMT
5.75%, 10/01/20 4,860 4,534,720
FLORIDA-3.9%
AAA Dade Cnty Arpt Rev
(Miami Int'l Arpt) Ser 95B AMT MBIA
6.00%, 10/01/24 7,250 7,016,405
BBB Escambia Cnty PCR
(Champion Int'l Corp) Ser 94
6.90%, 8/01/22 1,750 1,778,455
AAA Florida HFA
SFMR (Mtg Hsg Fin Agy Rev) Ser 94B AMT
6.65%, 7/01/26 4,895 4,952,027
4
ALLIANCE MUNICIPAL INCOME FUND
- - -------------------------------------------------------------------------------
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS (000) VALUE
- - -------------------------------------------------------------------------------
AAA Florida Hsg Fin Agy
SFMR (Home Mtg) Ser 95A AMT
6.65%, 1/01/24 $ 3,600 $ 3,634,452
AAA Hillsborough Cnty Aviation
Arpt Rev (Tampa Int'l)
FGIC Ser 93D AMT
5.40%, 10/01/13 2,750 2,532,970
BBB+ Lake Cnty Res Rec
(NRG Recovery Group) Ser 93A AMT
5.95%, 10/01/13 3,000 2,685,120
AA- Orlando Util Comm (Wtr & Elec Sub Rev)
6.638%, 10/06/17(a) 3,550 3,131,207
A* Venice Hlth Fac
(Venice Hosp) Ser 94
6.00%, 12/01/14 1,600 1,535,920
27,266,556
GEORGIA-4.4%
AAA Atlanta
Arpt Facilities Rev
MBIA AMT
Zero coupon, 1/01/10 75,535 30,912,699
HAWAII-0.9%
AAA Hawaii Dept Budget & Fin Spec Purpose
(Hawaiian Elec Co)
MBIA Ser 92 AMT
6.55%, 12/01/22 6,000 6,110,520
INDIANA-3.2%
AAA Indiana Dev Fin Auth
PCR (PSI Energy)
MBIA Ser 93B AMT
5.75%, 2/15/28 11,245 10,552,758
AA Warrick Cnty
PCR (So Indiana Gas & Elec Co) Ser 93B AMT
6.00%, 5/01/23 12,290 11,668,741
22,221,499
KENTUCKY-3.9%
AA- Kentucky Higher Ed
Student Loan Rev Ser 93B AMT
5.30%, 6/01/05 $28,390 $27,338,151
MAINE-0.9%
AA- Maine Hsg Auth
SFMR (Mortgage Purchase) Ser 94B-2 AMT
5.80%, 11/15/24 7,000 6,292,650
MARYLAND-0.2%
NR Maryland Ind Dev Fin
Auth Eco Dev
(Med Waste Assoc) Ser 89 AMT
8.75%, 11/15/10 1,510 1,552,944
MASSACHUSETTS-7.2%
AAA Massachusetts Ed
Fin Auth
Education Loan Rev
AMBAC Ser 94E AMT
6.00%, 1/01/12 4,855 4,759,454
AAA Massachusetts Hlth &
Ed Fac Auth Hosp Rev
(New England Med Ctr)
MBIA Ser D
5.24%, 7/01/17 9,850 8,968,130
Baa1* Massachusetts Hlth & Ed Fac Auth Hosp Rev
(Metro West Hlth) Ser C
6.50%, 11/15/18 4,430 4,200,482
A+ Massachusetts HFA
SFMR Ser 40 AMT
6.65%, 12/01/27 9,125 9,076,181
AA- Massachusetts Wtr
Pollution Abate
(South Essex Prog) Ser 94A
6.375%, 2/01/15 2,625 2,674,718
A Massachusetts Wtr
Res Auth Ser 92B
5.50%, 11/01/15 3,450 3,171,930
5
NATIONAL PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND
- - -------------------------------------------------------------------------------
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS (000) VALUE
- - -------------------------------------------------------------------------------
A- New England Ed
Loan Mktg
Student Loan Rev
Ser 93A AMT
5.70%, 7/01/05 $10,750 $10,578,430
A- New England Ed
Loan Mktg
Student Loan Rev
Ser 93F AMT
5.625%, 7/01/04 7,000 6,884,080
50,313,405
MICHIGAN-5.3%
BBB+ Battle Creek
Downtown Dev Auth
Ser 94
7.65%, 5/01/22 1,170 1,241,440
BBB Detroit GO
Ser 93
6.35%, 4/01/14 4,020 3,845,210
AAA Detroit Eco Dev Ctr
Res Rec Rev
FSA Ser 91A AMT
6.875%, 5/01/09 2,910 3,064,055
AAA Kent Cnty GO Arpt Rev
(Kent Cnty Int'l)
Ser 95 AMT
6.10%, 1/01/25 4,650 4,513,197
AAA Lowell GO Area
School Dist
FGIC
Zero coupon, 5/01/19 7,050 1,588,365
AAA Michigan Higher
Ed Auth
Student Loan Rev
AMBAC Ser X11-G AMT
5.40%, 10/01/08 3,795 3,504,796
A* Michigan Hosp Fin Auth
Hosp Rev
(Crittenton Hosp)
Ser 93A
5.25%, 3/01/14 4,665 3,977,985
A- Michigan Hosp Fin Auth
Hosp Rev
(Detroit Med Ctr) Ser 93B
5.50%, 8/15/23 5,610 4,741,796
A+ Michigan Hsg Dev Auth
MFHR (Rental Hsg) Ser 94B
5.80%, 4/01/19 $1,635 $1,534,578
AA Michigan Muni Bond
Auth
Revolving Fund Ser 93
5.40%, 10/01/14 4,630 4,273,814
AAA Wayne Cnty Arpt Rev
(Detroit Metro)
MBIA AMT
5.50%, 12/01/21 5,000 4,492,850
AAA Wayne Cnty Arpt Rev
(Detroit Metro)
MBIA Ser 91B AMT
6.75%, 12/01/21 710 731,336
37,509,422
MINNESOTA-2.3%
A- Bass Brook PCR
(Minnesota Pwr & Light)
6.00%, 7/01/22 1,150 1,103,839
AAA Minneapolis GO
SFMR (Home
Ownership/Renovation)
Ser 93 Stage III AMT
5.70%, 12/01/23 5,125 4,675,486
AA+ Minnesota Hsg Fin
Home Mortgage
Ser 93-C2 AMT
6.15%, 7/01/23 2,560 2,460,570
AA+ SFMR Ser 89A AMT
7.90%, 7/01/19 1,000 1,056,580
AA+ Rochester Hosp Rev
(Mayo Med Ctr) Ser F
6.25%, 11/15/21 1,200 1,211,100
A+ Southern Minnesota
Muni Pwr Auth
Pwr Supply System Ser 92A
5.75%, 1/01/18 2,270 2,197,247
BBB- South St Paul Hosp Rev
(Hlth East Proj) Ser 94
6.75%, 11/01/09 1,000 995,420
6
ALLIANCE MUNICIPAL INCOME FUND
- - -------------------------------------------------------------------------------
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS (000) VALUE
- - -------------------------------------------------------------------------------
A Western Minnesota
Muni Pwr Auth
Ser 87A
5.50%, 1/01/15 $ 2,490 $ 2,298,619
15,998,861
NEBRASKA-1.6%
A* Nebraska Higher Ed
Student Loan Rev
Ser 93B AMT
5.875%, 6/01/14 11,705 11,094,467
NEW HAMPSHIRE-0.6%
AAA New Hampshire PCR
(Conn Light & Pwr)
AMBAC AMT
7.375%, 12/01/19 4,000 4,331,320
NEW JERSEY-2.2%
AAA New Jersey Eco Dev
Auth Wtr Rev
(Middlesex Wtr)
AMBAC AMT
5.25%, 10/01/23 3,000 2,599,800
AAA New Jersey Eco Dev
Auth Wtr Fac
(Hackensack Wtr)
MBIA Ser 94B AMT
5.90%, 3/01/24 2,200 2,097,458
AAA New Jersey Eco Dev Auth
(Public Svc Elec & Gas) PCR
MBIA Ser 94A AMT
6.40%, 5/01/32 4,000 4,040,800
BBB New Jersey Hlth Care
Fac Hosp Rev
(Union Hosp/Mega Care)
5.50%, 7/01/03 2,730 2,559,020
A+ New Jersey Hsg &
Mtg Fin MFHR
Ser 1 Section 8
6.70%, 11/01/28 3,750 3,791,850
15,088,928
NEW YORK-7.4%
A- New York City GO
Ser 93A
6.25%, 8/01/18 6,000 5,669,880
A- New York City GO
Ser 95F
6.625%, 2/15/14 10,000 9,845,800
A- New York City GO
Ser 95B
7.25%, 8/15/19 $19,000 $19,708,320
AAA NYS Energy Res &
Dev Auth Gas Fac
(Brooklyn Union Gas)
MBIA AMT
5.60%, 6/01/25 3,000 2,725,590
5.635%, 7/08/26(a) 6,000 5,488,800
AAA NYS Energy Res &
Dev Auth Solid Waste
(NYS Elec & Gas)
MBIA Ser 93A AMT
5.70%, 12/01/28 9,300 8,536,191
51,974,581
OHIO-6.3%
A1* Cincinnati Student Loan
Funding Corp
Ser 86A AMT
5.50%, 12/01/01 6,000 5,989,860
A1* Cincinnati Student Loan
Funding Corp
Ser 93A AMT
6.15%, 8/01/10 2,000 1,988,040
AAA Clermont Cnty Wtr Sys
Rev (Clermont
Cnty Swr)
AMBAC Ser 93A
5.70%, 12/01/13 2,750 2,640,385
AAA Cleveland Arpt Rev
(Cleveland Int'l)
FGIC Ser 94A AMT
6.25%, 1/01/20 8,000 8,005,280
AAA Columbus Arpt Rev
(PT Columbus Int'l)
MBIA Ser 94A
6.25%, 1/01/24 4,000 4,005,720
Aaa* Kent (Silver
Medows Apt Proj)
MFHR Ser 95 AMT
7.15%, 12/20/26 1,100 1,133,957
Baa3* Ohio Air Quality
Dev Auth
PCR (Columbus So Pwr)
Ser 85B
6.25%, 12/01/20 1,700 1,636,998
7
NATIONAL PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND
- - -------------------------------------------------------------------------------
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS (000) VALUE
- - -------------------------------------------------------------------------------
AAA Ohio Air Quality
Dev Auth
(JMG Funding/Ohio
Pwr Co)
AMBAC Ser 94B AMT
6.375%, 4/01/29 $ 8,000 $ 8,047,680
AA Ohio GO
(Infrastructure Imp)
Ser 93
Zero coupon, 8/01/12 7,965 2,908,499
AAA Ohio Hsg Fin Agy
SFMR (Residential Mtg)
GNMA
Ser 94B-2 AMT
6.70%, 3/01/25 2,400 2,447,376
AA- Ohio Turnpike
Commission
Turnpike Rev
Ser 94A
5.75%, 2/15/24 2,500 2,375,250
Aa3* Toledo-Lucas Cnty
Port Auth (Cargill Inc. Proj)
5.90%, 12/01/15 2,800 2,750,776
43,929,821
PENNSYLVANIA-3.3%
AAA Allegheny Cnty
Arpt Rev
(Greater Pittsburgh Int'l)
FGIC Ser 93B AMT
6.625%, 1/01/22 1,500 1,528,965
A- Butler Cnty IDA
Hlth Fac (Sherwood Oaks Proj)
5.75%, 6/01/11 2,300 2,091,022
AAA Lehigh Cnty
Arpt Rev
(Allentown-Bethlehem)
AMT Ser 93A MBIA
5.60%, 1/01/23 2,700 2,443,932
A New Morgan IDA
Solid Wst (Browning Ferris)
Ser 94 AMT
6.50%, 4/01/19 2,800 2,766,316
BBB- Pennsylvania Eco
Dev Fin Auth IDR
(Macmillan/Bloedel
Clarion Proj)
Ser 95 AMT
7.60%, 12/01/20 1,750 1,842,382
BBB+ Pennsylvania Eco
Dev Auth Waste Wtr Rev
(Sun Co.)
Ser 94A AMT
7.60%, 12/01/24 $2,000 $2,120,020
A Pennsylvania Fin Auth
Muni Cap Imp Prog
Ser 93
6.60%, 11/01/09 2,150 2,225,615
AA Pennsylvania Hsg Fin Agy
SFMR (Home Mortgage)
Ser 94-41B AMT
6.65%, 4/01/25 2,750 2,742,657
AAA Pennsylvania Higher Ed
Student Loan Rev
AMBAC Ser 88D AMT
6.05%, 1/01/19 5,635 5,502,916
23,263,825
RHODE ISLAND-3.2%
AA+ Rhode Island Hsg &
Mtg Fin Corp
SFMR (Home Ownership)
Ser 92-7A AMT
6.75%, 10/01/25 10,000 10,075,200
AA+ Rhode Island Hsg & Mtg Fin
Corp
SFMR (Home Ownership)
Ser 91-8 AMT
9.586%, 4/01/24(a) 7,000 7,352,870
AAA Rhode Island Port Auth
Arpt Rev FSA
Ser 93A AMT
5.25%, 7/01/15 6,000 5,273,460
22,701,530
SOUTH DAKOTA-1.5%
AA+ South Dakota HDA
SFMR
(Home Ownership Mtg)
Ser 93II AMT
6.15%, 5/01/26 9,600 9,154,176
AA South Dakota HDA
(Home Ownership)
Ser 91D AMT
6.25%, 5/01/26 1,440 1,392,221
10,546,397
8
ALLIANCE MUNICIPAL INCOME FUND
- - -------------------------------------------------------------------------------
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS (000) VALUE
- - -------------------------------------------------------------------------------
TENNESSEE-1.7%
BBB Memphis Shelby Cnty
Spec Fac (Federal
Express) Ser 93 AMT
6.20%, 7/01/14 $ 8,000 $ 7,628,960
A* Volunteer Student Funding
Educational Loan Rev
Ser 93C AMT
5.85%, 12/01/08 4,100 4,069,455
11,698,415
TEXAS-6.6%
BB+ Alliance Arpt Auth Fac Imp
(American Airlines)
Ser 90 AMT
7.50%, 12/01/29 21,690 22,050,271
BB+ Dallas - Ft. Worth Arpt
Fac Imp
(American Airlines)
AMT
7.25%, 11/01/30 3,715 3,725,030
BB+ Dallas - Ft. Worth Arpt
Fac Imp
(American Airlines)
Ser 90 AMT
7.50%, 11/01/25 15,000 15,179,100
A* Panhandle Plains
Student Loan Rev
Ser 93E AMT
5.55%, 3/01/05 5,420 5,213,227
46,167,628
UTAH-2.0%
AAA Emery Cnty
PCR (Pacific Project)
AMBAC AMT
5.625%, 11/01/23 11,900 10,726,898
Aaa* Utah Board of Regents
Student Loan Rev
Ser 93 AMT
5.90%, 11/01/13 3,600 3,474,432
14,201,330
VIRGINIA-4.9%
AAA Chesapeake Bay Bridge &
Tunnel Auth MBIA
5.75%, 7/01/25 1,445 1,367,895
A- Hampton Museum Rev
Ser 94
5.25%, 1/01/14 2,395 2,189,772
AA Henrico Cnty IDR
(Henrico Cnty Reg Jail)
7.125%, 8/01/21 $ 3,800 $ 4,142,228
A- Isle of Wight Cnty IDR
Solid Waste (Union
Camp Corp)
Ser 94 AMT
6.55%, 4/01/24 4,890 4,950,391
BBB+ Peninsula Port Auth
Hlth Fac (Mary
Immaculate Proj)
Ser 94
7.00%, 8/01/17 1,910 1,934,906
A* Prince William Cnty IDA
Hosp Rev (Potomac Hosp)
6.75%, 10/01/15 2,160 2,242,620
AA Richmond GO
6.25%, 1/15/21 1,350 1,350,648
AAA Richmond Redev Hsg Auth
MFHR (Jefferson)
6.50%, 4/01/27 3,240 3,235,399
AA Virginia Beach Hlth Care
Hosp Rev (Sentara Bayside)
6.30%, 11/01/21 905 903,833
A* Virginia Ed Loan Auth
(Student Loan Prog)
Ser 93G AMT
6.15%, 9/01/09 3,500 3,463,530
A* Virginia Ed Loan Auth
Ser 92G AMT
6.625%, 9/01/03 1,800 1,876,249
AA+ Virginia HDA
SFMR (Commonwealth Mtg)
Ser 93G AMT
5.35%, 7/01/16 7,490 6,506,563
34,164,034
WASHINGTON-1.8%
BBB Pierce Cnty Eco Dev
PCR (Occidental Petroleum)
Ser 93 AMT
5.80%, 9/01/29 6,755 5,743,641
BBB Pilchuck Dev Pub Corp.
Spec Fac (BF Goodrich)
Ser 93 AMT
6.00%, 8/01/23 7,800 6,870,240
12,613,881
9
NATIONAL PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND
- - -------------------------------------------------------------------------------
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS (000) VALUE
- - -------------------------------------------------------------------------------
WEST VIRGINIA-0.5%
AAA West Virginia Eco Dev
Parkway Rev Ser 93 FGIC
7.068%, 5/16/19(a) $3,500 $3,233,230
Total Long Term
Municipal Bonds
(cost $697,642,501) 706,581,213
SHORT TERM MUNICIPAL BOND-0.9%
A-1 Colorado HFA
MFHR (Central Park Proj)
Ser 85 VRDN
LOC: Chemical Bank
4.75%, 5/01/97(b)
(cost $6,000,000) 6,000 6,000,000
TOTAL INVESTMENTS-101.6%
(cost $703,642,501) $712,581,213
Other assets less liabilities-(1.6%) (11,037,381)
NET ASSETS-100% $701,543,832
* Moody's or Fitch Rating.
(a) Inverse floater security - the interest rate is subject to change
periodically.
(b) Variable Rate Demand Notes (VRDN) are instruments whose interest rates
change on a specific 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). This instrument is payable on demand and is secured by
letters of credit or other credit support agreements from major banks.
See Glossary of Terms on page 21.
See notes to financial statements.
10
INSUREDNATIONAL PORTFOLIO
PORTFOLIO OF INVESTMENTS
APRIL 30, 1995 (UNAUDITED) ALLIANCE MUNICIPAL INCOME FUND
- - -------------------------------------------------------------------------------
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS (000) VALUE
- - -------------------------------------------------------------------------------
MUNICIPAL BONDS-97.0%
LONG TERM MUNICIPAL BONDS-94.1%
ALABAMA-8.0%
AAA West Jefferson PCR
(Alabama Pwr) Ser 93C
FGIC
6.05%, 5/01/23 $19,500 $19,317,870
ARIZONA-10.1%
AAA Arizona Pwr Auth
(Hoover Uprating Proj) MBIA
5.375%, 10/01/13 865 807,927
AAA Maricopa Cnty GO
Sch Dist #28
FGIC Ser 93C
Zero coupon, 7/01/11 6,000 2,315,940
AAA Maricopa Cnty GO
Chandler Sch Imp #80
FGIC Ser 95
6.00%, 7/01/13 1,300 1,305,434
AAA Maricopa Cnty
Hlth Fac (Catholic Hlth Care)
MBIA Ser 94
5.00%, 7/01/15 4,770 4,155,672
AAA Maricopa Cnty
Hlth Fac
(Samaritan Hlth)
MBIA Ser 90A
7.00%, 12/01/13 645 691,704
AA Phoenix MFHR
(Woodstone & Silver Springs)
6.25%, 4/01/23 2,790 2,760,705
AAA Pima Cnty Hosp
(Tucson Med Ctr)
MBIA Ser 93A
5.00%, 4/01/15 2,855 2,498,639
AAA Pima Cnty IDR
(Tucson Elec Pwr)
FSA Ser 88A
7.25%, 7/15/10 2,605 2,842,211
AAA Tempe MFHR
(Mtg-Quadrangles) FHA
6.25%, 6/01/26 4,605 4,524,182
AAA Tucson GO FGIC
Zero coupon, 7/01/13 3,800 1,274,178
AAA Yavapai Cnty GO
(Humboldt Sch Imp #22)
FGIC Ser 95A
5.95%, 7/01/14 1,250 1,228,862
24,405,454
CALIFORNIA-8.4%
Aa* California Statewide
Comm Dev Hosp
(Cedars-Sinai Med Ctr)
Ser 93
5.40%, 11/01/15 $12,500 $11,340,500
AAA Los Angeles
Community Redev
Tax Alloc (Bunker Hill Proj) FSA Ser 93H
5.60%, 12/01/28 5,000 4,532,650
AAA Northern Calif Trans Agy
Elec Rev (Calif-Oregon Trans) MBIA
5.358%, 4/29/24(c) 5,000 4,548,600
20,421,750
FLORIDA-0.8%
AAA Palm Beach Cnty FSA
Hlth Fac (JFK Med Ctr, Inc)
5.75%, 12/01/14 960 928,234
AAA Pinellas Cnty Hlth Fac
(Morton Plant Hlth)
MBIA
5.50%, 11/15/18 1,200 1,126,284
2,054,518
ILLINOIS-3.3%
AAA Illinois Health Fac Auth
Hosp Rev (Alexian Brothers) FSA Ser 90
7.125%, 1/01/21 5,000 5,243,800
AAA Metro Pier & Expo Auth
(McCormick Place Expo)
FGIC Ser 93A
Zero coupon, 6/15/19 12,150 2,678,832
7,922,632
MARYLAND-3.2%
AAA Baltimore Cnty MFHR
(Dunfield Township Proj)
FHA Ser 92A
6.90%, 8/01/28 7,500 7,712,925
MASSACHUSETTS-15.7%
AAA Essex Cnty
(South Essex Swr Dist)
MBIA Ser 94B
7.00%, 6/01/24 2,595 2,783,008
AAA Holyoke GO
FSA Ser B
6.125%, 8/01/13 1,435 1,446,222
11
INSUREDNATIONAL PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND
- - -------------------------------------------------------------------------------
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS (000) VALUE
- - -------------------------------------------------------------------------------
AAA Lowell GO
FSA Ser 93A
5.50%, 1/15/10 $ 4,795 $ 4,576,060
AAA Massachusetts GO
MBIA Ser 95A
5.75%, 2/01/15 4,850 4,693,976
AAA Massachusetts Hlth & Ed
Fac Auth (Lahey Med Ctr)
MBIA Ser 93B
5.375%, 7/01/23 2,345 2,105,833
AAA Massachusetts HFA
MFHR (Residential Dev)
AMBAC Ser 93A
6.15%, 10/01/15 9,350 9,189,460
AAA Massachusetts HFA
MFHR (Residential Dev)
FNMA Ser 92F
6.25%, 11/15/12 4,815 4,873,406
AAA Massachusetts HFA
SFMR (Residential Dev)
FNMA Ser 92
6.90%, 11/15/24 2,500 2,582,900
AAA Massachusetts Muni Wholesale
(Elec Pwr Supply Sys)
MBIA Ser 92A
6.00%, 7/01/18 5,790 5,661,983
37,912,848
MICHIGAN-11.8%
AAA Brighton GO AMBAC
Area Sch Dist Ser 92II
Zero coupon, 5/01/20 5,000 1,068,950
AAA Detroit Sewer Disposal System
FGIC Ser 93A
6.908%, 7/01/23(a) 8,140 7,089,207
AAA Kalamazoo Hosp Fin Auth
Hosp Rev (Borgess Med Ctr)
FGIC Ser 94A
5.244%, 6/01/11(c) 15,000 13,914,450
AAA Michigan Hosp Fin Auth
Hosp Rev (St. John's Hospital)
AMBAC Ser A
6.00%, 5/15/13 700 693,140
AAA Michigan Hosp Fin Auth
Hosp Rev (Sisters of Mercy)
MBIA
5.375%, 8/15/14 4,000 3,703,320
AAA Yale Pub Sch Dist GO
AMBAC
5.50%, 5/01/23 2,315 2,100,909
28,569,976
MINNESOTA-9.3%
AAA Buffalo Hanover Montrose GO
(Ind Sch Dist #877)
CGIC Ser 94
6.15%, 2/01/22 $1,800 $1,812,996
AAA Burnsville-Eagan-Savage GO
(Ind Sch Dist #191)
CGIC Ser 95A
6.20%, 2/01/17 1,200 1,224,456
AAA Eden Prairie GO
(Ind Sch Dist #272)
FGIC Ser 93A
5.50%, 2/01/09 1,550 1,510,506
Aa* Fairbault GO
(Ind Sch Dist #656)
6.20%, 6/01/12 1,530 1,553,210
AAA Lakeville GO
(Ind Sch Dist #194)
FGIC
5.60%, 2/01/18 3,810 3,612,756
AA+ Minnesota GO
5.40%, 8/01/09 3,000 2,892,900
AAA Minnesota Pub Fac Auth
(Wtr Poll Ctr Rev)
Ser 95A
6.25%, 3/01/15 1,225 1,261,088
AAA No Minnesota Muni Pwr Agy
AMBAC Ser 92B
5.50%, 1/01/18 1,100 1,034,836
AAA Pierz GO
(Ind Sch Dist # 484)
AMBAC
5.375%, 6/01/15 1,000 930,880
AAA Robbinsdale Hosp Rev
(No Memorial Med Ctr)
AMBAC Ser 93A
5.45%, 5/15/13 2,650 2,501,839
AAA St. Francis GO
(Ind Sch Dist #15)
CGIC Ser 95A
6.375%, 2/01/16 1,200 1,237,980
AAA St. Paul Hsg & Redev
(Downtown & Seventh)
AMBAC Ser 93
5.35%, 9/01/07 3,000 2,894,820
22,468,267
12
ALLIANCE MUNICIPAL INCOME FUND
- - -------------------------------------------------------------------------------
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS (000) VALUE
- - -------------------------------------------------------------------------------
NEBRASKA-1.3%
AAA Nebraska Inv Fin Auth
Hosp Rev
(Bishop Clarkson Mem)
MBIA Ser 91
8.726%, 11/15/16(a) $ 3,000 $ 3,167,460
NEW JERSEY-4.3%
AAA Burlington Cnty Wtr Rev
(Evesham Muni Util Auth)
MBIA
5.60%, 7/01/15 2,500 2,364,175
AAA Essex Cnty Imp Auth
Util Rev (Orange Township)
MBIA Ser 93
6.00%, 12/01/17 2,510 2,488,414
AAA Salem Cnty PCR
(Public Service Elec & Gas)
MBIA Ser 93C
5.55%, 11/01/33 6,000 5,537,340
10,389,929
OHIO-3.8%
AAA Hamilton Cnty Swr Rev
(Met Swr Gtr Cincinati)
FGIC Ser 93A
5.25%, 12/01/16 2,000 1,824,240
AAA Lucas Cnty Hosp Rev
(St. Vincent Med Ctr)
MBIA
5.45%, 8/15/14 2,125 1,971,704
AAA Ohio Muni Generating Auth
(Belleville Hydro Elec)
AMBAC
5.375%, 2/15/13 2,500 2,351,175
AAA Ohio Wtr Dev Auth
Util Rev (Cincinnati
G & E) MBIA
5.45%, 1/01/24 3,250 2,961,206
9,108,325
PENNSYLVANIA-7.2%
A Allegheny Cnty
Hosp Rev (St. Francis)
FHA Ser 88
8.25%, 8/01/28 3,555 3,886,148
AAA Berks Cnty
Swr Rev (Exeter Twp)
MBIA Ser 93
6.20%, 7/15/22 7,800 7,834,944
AAA Butler Cnty Hosp Rev
(Butler Mem Hosp)
FSA Ser 93A
5.25%, 7/01/12 $5,000 $4,556,300
AAA Pennsylvania Trpk Comm
(Oil Franchise Tax Rev)
AMBAC Ser 94A
6.00%, 12/01/19 1,200 1,184,748
17,462,140
TEXAS-1.4%
AAA Amarillo Hosp Rev
(High Plains Baptist)
FSA Ser 92B
8.582%, 12/01/19(a) 3,200 3,307,456
VIRGINIA-3.2%
AAA Loudoun Cnty Sani Auth
Water & Sewer Sys Rev
MBIA Ser 94
5.25%, 1/01/20 910 810,874
AAA Richmond Met Auth
(Expressway)
FGIC Ser B
6.25%, 7/15/22 910 920,028
AAA Virginia Beach Dev Auth
Hosp Rev (VA Beach
Gen Hosp)
AMBAC Ser 93
5.125%, 2/15/18 970 856,480
AA Virginia College Bldg Auth
Ed Fac (Washington & Lee)
5.80%, 1/01/24 3,425 3,264,094
AAA Washington/Virginia
Area Trans
Gross Rev Transit
FGIC Ser 93
5.25%, 7/01/14 2,000 1,819,800
7,671,276
WISCONSIN-2.3%
AAA Wisconsin Hlth & Ed
Hosp Rev (Novus Health)
MBIA Ser 91B
6.75%, 12/15/20 5,500 5,680,455
Total Long Term Municipal Bonds
(cost $223,545,338) 227,573,281
13
INSUREDNATIONAL PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND
- - -------------------------------------------------------------------------------
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS (000) VALUE
- - -------------------------------------------------------------------------------
SHORT TERM MUNICIPAL BOND-2.9%
ILLINOIS-1.7%
A-1+ Illinois Hlth Fac
(Sisters Hosp)
MBIA Ser 85E VRDN
BPA: Morgan Guaranty Trust Co
4.60%, 12/01/14(b) $ 4,200 $ 4,200,000
TEXAS-1.2%
A-1+ Gulf Coast Solid Waste
(Citgo Petro Corp)
AMT VRDN
LOC: Wachovia Bank & Trust
5.10%, 4/01/26(b) 2,800 2,800,000
Total Short Term Municipal Bonds
(cost $7,000,000) 7,000,000
TOTAL INVESTMENTS-97.0%
(cost $230,545,338) $234,573,281
Other assets less liabilities-3.0% 7,216,999
NET ASSETS-100% $241,790,280
* Moody's or Fitch Rating.
(a) Inverse floater security - the interest rate is subject to change
periodically.
(b) Variable Rate Demand Notes (VRDN) are instruments whose interest rates
change on a specific 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). This instrument is payable on demand and is secured by
letters of credit or other credit support agreements from major banks.
(c) Link security.
See Glossary of Terms on page 21.
See notes to financial statements.
14
NEWYORK PORTFOLIO
PORTFOLIO OF INVESTMENTS
APRIL 30, 1995 (UNAUDITED) ALLIANCE MUNICIPAL INCOME FUND
- - -------------------------------------------------------------------------------
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS (000) VALUE
- - -------------------------------------------------------------------------------
NEW YORK MUNICIPAL BONDS-98.2%
Aaa* Cohoes IDR
(Norlite Corp Proj)
Ser 92B AMT
LOC: Dresdner Bank
6.75%, 5/01/09 $ 8,500 $ 8,730,010
AAA Glen Cove IDR
(The Regency At Glen Cove)
ETM Ser 92B
Zero coupon, 10/15/19 60,010 13,018,569
AA Hempstead IDR
(Nassau District Energy Corp)
Ser 90 AMT
LOC: Toronto Dominion
7.75%, 9/15/15 2,000 2,075,760
AAA Islip Res Rec Agy
Ser 94B AMBAC AMT
6.125%, 7/01/12 2,020 2,018,727
AAA Monroe Cnty Airport
Auth (Greater Rochester Int'l)
Ser 93 MBIA AMT
5.50%, 1/01/13 4,450 4,172,543
A- New York City GO
Ser 93D
6.00%, 8/01/09 9,750 9,154,178
A- New York City GO
Ser 93E
6.00%, 5/15/11 10,000 9,346,100
A- New York City GO
Ser 93D
7.245%, 8/29/14(a) 10,000 9,083,200
A- New York City GO
Ser 95B
7.25%, 8/15/19 5,750 5,964,360
AA New York City HDC
MFHR
(So Williamsburg Coop)
AMT Ser 90A
7.90%, 2/01/23 3,880 4,051,729
A New York City IDR
Spec Fac (Terminal One L.P.)
Ser 94 AMT
6.125%, 1/01/24 15,000 14,178,600
BB+ New York City IDR
Spec Fac (American Airlines)
Ser 94 AMT
6.90%, 8/01/24 $ 6,000 $ 6,031,680
AAA NYS Energy Res & Dev Auth Elec
(Brooklyn Union Gas)
MBIA AMT
5.60%, 6/01/25 7,000 6,359,710
AAA NYS Energy Res & Dev Auth Elec
(Brooklyn Union Gas)
MBIA Ser 89B AMT
6.75%, 2/01/24 7,500 7,801,050
A+ NYS Energy Res & Dev
(Consolidated Edison)
Ser 94A AMT
7.125%, 12/01/29 32,000 34,008,640
AAA NYS Energy Res & Dev Auth Solid Waste
(NYS Elec & Gas)
MBIA Ser 93A AMT
5.70%, 12/01/28 15,750 14,456,453
AAA NYS Energy Res & Dev Auth PCR
(NYS Elec & Gas)
MBIA Ser 88A AMT
5.95%, 12/01/27 11,700 11,150,919
AAA NYS Energy Res & Dev Auth Elec PCR
(Rochester Gas & Elec)
MBIA AMT
6.50%, 5/15/32 4,460 4,523,644
AAA NYS Energy Res & Dev Auth Elec PCR
(Rochester Gas & Elec)
FSA Ser 88C AMT
8.125%, 12/01/28 4,500 4,942,980
NR NYS Envir Fac Corp
Wtr Fac
(Long Island Wtr Corp)
Ser 87A AMT
10.00%, 10/01/17 3,200 3,486,752
BBB NYS Envir Fac Auth IDR
(Occidental Petroleum)
Ser 93A AMT
5.70%, 9/01/28 12,500 10,708,750
15
NEWYORK PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND
- - -------------------------------------------------------------------------------
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS (000) VALUE
- - -------------------------------------------------------------------------------
AAA NYS Envir Fac Corp
Wtr Fac
(Spring Valley Wtr)
AMBAC Ser 94A AMT
6.30%, 8/01/24 $11,800 $11,817,346
AAA NYS HFA
MFHR (Erie/Monroe Cnty Proj)
AMBAC Ser 89B AMT
7.55%, 11/01/29 9,585 10,116,009
Aa* NYS HFA SONYMA
MFHR (Syracuse/Springville Proj)
Ser 93A AMT
5.85%, 8/15/13 3,000 2,826,420
5.95%, 8/15/24 5,650 5,217,041
Aa* NYS HFA SONYMA
MFHR (Westchester/Onondaga/Rockland Proj)
Ser 92F AMT
6.70%, 8/15/25 6,000 6,011,940
Aa* NYS Mtg Agy
SFMR Homeowner Mtg
Ser 46 AMT
6.65%, 10/01/25 20,000 19,920,600
Aa* NYS Mtg Agy
SFMR Homeowner Mtg
Ser 42 AMT
6.65%, 4/01/26 4,500 4,510,080
AAA Niagara Frontier Trans
Auth Arpt
(Gtr Buffalo Int'l)
AMBAC Ser 94A AMT
6.25%, 4/01/24 16,125 16,149,026
AAA Onondaga Cnty
PCR (Bristol-Myers Squibb) AMT
5.75%, 3/01/24 $8,000 $7,559,360
AA- Port Auth of NY & NJ
Cons (95th Ser)
AMT
6.125%, 7/15/29 6,750 6,584,220
AAA Port Auth of NY & NJ
Cons (96th Ser)
FGIC AMT
6.60%, 10/01/23 10,000 10,331,100
Baa* St. Lawrence Cnty
Res Rec
(Solid Waste Disposal)
Ser 88 AMT
8.375%, 1/01/11 2,500 2,787,250
AAA Troy HDC
MFHR (Ninth St #2) FHA
Ser 90B
8.10%, 2/01/24 3,535 3,909,108
AAA Troy HDC
MFHR (T.U.R.) FHA
Ser 90C
8.10%, 2/01/24 3,835 4,225,825
TOTAL INVESTMENTS-98.2%
(cost $291,764,864) 297,229,679
Other assets less liabilities-1.8% 5,564,802
NET ASSETS-100% $302,794,481
* Moody's or Fitch Rating.
(a) Inverse floater security - the interest rate is subject to change
periodically.
See Glossary of Terms on page 21.
See notes to financial statements.
16
CALIFORNIA PORTFOLIO
PORTFOLIO OF INVESTMENTS
APRIL 30, 1995 (UNAUDITED) ALLIANCE MUNICIPAL INCOME FUND
- - -------------------------------------------------------------------------------
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS (000) VALUE
- - -------------------------------------------------------------------------------
CALIFORNIA MUNICIPAL BONDS-99.2%
A+ California Dept of Vet
Affairs Home Pur Rev
Ser 86A AMT
7.375%, 8/01/12 $ 4,140 $ 4,262,296
A+ California GO
Vet Hsg
Ser 95 AMT
6.40%, 2/01/20 30,000 29,448,600
A+ California HFA
MFHR (Multi-Unit Rental)
Ser 93A AMT
5.60%, 8/01/25 12,000 10,591,560
AA- California HFA
SFMR (Home Mtg Rev)
Ser 93D AMT
5.75%, 8/01/22 12,000 10,786,200
AA- California HFA
SFMR (Home Mtg Rev)
Ser 93D AMT
5.85%, 2/01/23 9,050 8,243,555
AA- California HFA
SFMR (Home Mtg Rev)
Ser E AMT
6.70%, 8/01/25 10,000 10,136,500
AA- California HFA
SFMR (Home Mtg Rev)
Ser 91G AMT
7.05%, 8/01/27 5,570 5,708,749
AA- California HFA
SFMR (Home Mtg Rev)
Ser 94H AMT
7.50%, 8/01/25 12,435 13,019,694
A+ California Poll Ctl Fin
Auth Res Rec (West Cnty Res Rec) AMT
5.55%, 1/01/09 5,490 4,962,137
A+ California Poll Ctl Fin
Auth PCR (San Diego Gas & Electric)
Ser 93A-C AMT
5.85%, 6/01/21 7,000 6,564,810
A California Poll Ctl Fin
Auth PCR (Pacific Gas & Elec) Ser 93B AMT
5.85%, 12/01/23 75,000 69,247,500
A+ California Poll Ctl Fin
Auth PCR (Southern Calif Edison)
Ser 92B AMT
6.40%, 12/01/24 43,530 43,712,391
A California Poll Ctl Fin
Auth PCR (Pacific Gas & Elec) Ser 92A AMT
6.625%, 6/01/09 $ 5,350 $ 5,539,390
A California Poll Ctl Fin
Auth Browning-Ferris Ind
(Keller Canyon) AMT
6.875%, 11/01/27 5,000 5,071,150
Aa* California Statewide
Comm Dev Hosp Rev
(Cedars-Sinai Med Ctr)
5.40%, 11/01/15(b) 28,000 25,402,720
A+ Chula Vista PCR
(San Diego Gas & Electric) Ser 92A AMT
6.40%, 12/01/27 28,240 28,084,962
Aaa* Contra Costa Cnty
MFHR (Byron Park Proj)
GNMA Ser 93A AMT
6.40%, 1/20/31 11,860 11,662,294
NR Fairfield Assess Dist
(No Cordelia Imp Dist)
Ser 93
7.375%, 9/02/18 2,670 2,709,890
NR Fontana Redev Agcy
(Jurupa Hills Proj) Ser 94
8.00%, 1/01/98 5,000 5,078,750
AAA Garden Grove
MFHR (Tudor Grove)
GNMA Collat AMT
7.25%, 5/20/32 7,340 7,559,172
AA- Long Beach
Harbor Rev
Ser 93 AMT
5.125%, 5/15/13 26,150 23,071,622
5.125%, 5/15/18 36,000 31,011,480
A Los Angeles Comm Redev
MFHR (Grand Ctrl Proj)
Ser 93A AMT
5.85%, 12/01/26 6,260 5,747,932
NR Los Angeles Cnty
Comm Fac Dist #4
(Calabasas Area) Ser 92A
7.65%, 9/01/17 7,500 7,702,650
7.70%, 9/01/17 5,750 5,926,755
17
CALIFORNIA PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND
- - -------------------------------------------------------------------------------
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS (000) VALUE
- - -------------------------------------------------------------------------------
NR Los Angeles Cnty
Comm Fac Dist #92-1
(Castaic Union SD Northlake Proj)
Ser 92
9.00%, 10/01/19 $ 8,710 $ 8,993,162
AA Los Angeles
Harbor Rev
Ser 95A AMT
6.625%, 8/01/25 25,000 25,612,000
AAA Northern Calif Trans Agy
Elec Rev (Calif-Oregon Trans) MBIA
5.358%, 4/29/24(b) 15,000 13,645,800
6.459%, 4/29/24(a) 1,250 1,038,038
NR Ontario Assess Dist #107
(CA Commerce Ctr So)
7.70%, 9/02/10 6,255 6,447,591
AAA Orange Cnty Airport Rev
(John Wayne Int'l)
MBIA Ser 93 AMT
5.50%, 7/01/13 11,000 10,088,430
5.50%, 7/01/18 16,500 14,864,355
A- Orange Cnty Airport Rev
(John Wayne Int'l)
Ser 87 AMT
6.625%, 7/01/18 6,780 6,379,166
NR Orange Cnty Ltd Ob
Assess Dist #88-1
(Irvine Coast Pelican Hill Proj)
Ser 92A
8.25%, 9/02/18 3,990 4,082,967
NR Orange Cnty
Comm Fac Dist #87-2
(Portola Hills) Ser 91A
9.30%, 8/15/16 8,950 9,388,908
BBB* Orange Cnty Sr Lien
San Joaquin Hills
Transp Corridor
7.00%, 1/01/30 15,000 15,060,600
BBB* Orange Cnty Sr Lien
San Joaquin Hills
Transp Corridor
Zero coupon, 1/01/17 16,000 3,372,640
Zero coupon, 1/01/18 $29,400 $ 5,767,398
Zero coupon, 1/01/19 20,000 3,651,200
Zero coupon, 1/01/20 20,000 3,398,000
Zero coupon, 1/01/21 20,000 3,162,200
Zero coupon, 1/01/22 50,000 7,357,000
Zero coupon, 1/01/23 35,000 4,792,550
Zero coupon, 1/01/25 33,100 3,925,329
AAA Palm Springs COP
Ser 91B ETM
Zero coupon, 4/15/21 67,075 12,133,868
AAA Palm Springs Fin Auth
Airport Rev
(Palm Springs Regional)
MBIA Ser 92 AMT
6.00%, 1/01/22 6,860 6,578,054
A- Placer Cnty
(Western Placer Waste Mgmt Auth)
Ser 94 AMT
6.75%, 7/01/14 12,000 11,884,080
AAA Port of Oakland
MBIA Ser 92E AMT
6.40%, 11/01/22 23,370 23,501,573
6.50%, 11/01/16 11,000 11,218,130
A+ Port of Oakland Spec Fac
(Mitsui O.S.K. Lines)
Ser 92A AMT
LOC: Bank of Japan
6.80%, 1/01/19 3,700 3,767,599
NR Riverside Comm
Fac Dist #90-1
(Highlander Proj)
Ser 91A
8.50%, 9/01/15 3,000 3,184,620
NR Rocklin Spec Tax
Comm Fac Dist #3
(Stanford Ranch) Ser 90
7.70%, 11/01/15 4,000 4,218,080
AAA Sacramento Cnty
Airport Systems
FGIC Ser 92A AMT
6.00%, 7/01/20 11,750 11,278,238
AAA Sacramento Inflos
Muni Util Dist
FGIC Ser 92A
8.311%, 8/15/18(a) 2,500 2,551,450
18
ALLIANCE MUNICIPAL INCOME FUND
- - -------------------------------------------------------------------------------
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS (000) VALUE
- - -------------------------------------------------------------------------------
NR Saddleback Valley
Comm Fac Dist #89-1
(Robinson Ranch) Ser 91A
7.70%, 9/01/16 $4,000 $4,261,920
NR Salinas Asses Dist #90-1
(Harden Ranch) Ser A
6.875%, 9/02/11 5,735 5,621,447
AAA San Francisco City &
Cnty Int'l Airport
MBIA Ser 93 II-3 AMT
6.10%, 5/01/13 7,990 7,886,929
6.20%, 5/01/20 14,500 14,282,645
AAA San Francisco City &
Cnty Int'l Airport
FGIC Ser 94 II-5 AMT
6.50%, 5/01/24 11,000 11,242,440
AAA San Francisco City &
Cnty Int'l Airport
AMBAC Ser 94 II-6 AMT
6.60%, 5/01/24 5,000 5,149,550
AAA San Jose
(San Jose Airport)
FGIC Ser 93 AMT
5.625%, 3/01/13 6,480 6,067,548
5.70%, 3/01/18 8,825 8,217,840
NR San Marcos
Comm Fac Dist Ser 88-1
7.625%, 9/01/19 1,600 1,619,264
AAA Southern Calif HFA
SFMR Ser 92A AMT
GNMA/FNMA Collat
6.75%, 9/01/22 1,445 1,485,373
AAA Southern Calif HFA
SFMR Ser 91B AMT
GNMA/FNMA
Ser 91B AMT
6.90%, 10/01/24 $1,665 $1,725,988
NR Tracy Pub Fac Fin Agy
Comm Fac Dist #87-1
Ser 89B
7.50%, 10/01/15 5,000 5,189,850
NR Tracy Pub Fac Fin Agy
Comm Fac Dist #87-1
Ser 92E
7.50%, 10/01/18 3,500 3,631,775
A Vacaville Comm Hsg
MFHR Ser 94A
7.85%, 11/01/24 4,625 4,905,505
BBB+ Westminister Redev Agy
MFHR (Rose Garden Apt) AMT
6.75%, 8/01/24 4,300 4,154,918
AAA Yolo Cnty Hsg Auth
MFHR (Waggener Ranch Apts) FHA Ser 91 AMT
7.00%, 10/01/33 9,000 9,446,760
TOTAL INVESTMENTS-99.2%
(cost $725,034,717) 717,485,537
Other assets less liabilities-0.8% 5,852,736
NET ASSETS-100% $723,338,273
* Moody's or Fitch Rating.
(a) Inverse floater security - the interest rate is subject to change
periodically.
(b) Link security.
See Glossary of Terms on page 21.
See notes to financial statements.
19
INSUREDCALIFORNIA PORTFOLIO
PORTFOLIO OF INVESTMENTS
APRIL 30, 1995 (UNAUDITED) ALLIANCE MUNICIPAL INCOME FUND
- - -------------------------------------------------------------------------------
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS (000) VALUE
- - -------------------------------------------------------------------------------
CALIFORNIA MUNICIPAL BONDS-88.7%
AAA Alhambra COP Assess Dist #91-1
Police Fac
AMBAC Ser 92
6.75%, 9/01/23 $ 5,000 $ 5,257,750
AAA Brea Pub Fin Auth
Tax Alloc Redev Proj B
MBIA Ser 91A
7.00%, 8/01/15 1,470 1,576,046
Aa* California Statewide
Comm Dev Hosp Rev
(Cedars-Sinai Med Ctr)
Ser 93
5.40%, 11/01/15 14,500 13,154,980
AAA Contra Costa Cnty COP
Sanitation Dist
(Delta Diablo) MBIA
Zero coupon, 12/01/16 3,210 838,613
AAA Coronado Comm Dev
Proj Tax Alloc
MBIA Ser 90
7.25%, 9/01/12 2,000 2,142,860
AAA Fairfield Cnty Pub Fin
Auth Tax Alloc
(Fairfield Proj)
CGIC Ser93C
5.50%, 8/01/23 9,000 8,141,940
AAA Fontana Pub Fin Auth
Tax Alloc (Fontana Redev)
MBIA Ser 93A
5.625%, 9/01/24 9,805 9,083,744
A+ Intermodal Container
Transfer (Southern Pacific) Ser 89A
LOC: Industrial Bank
of Japan
7.70%, 11/01/14 2,000 2,090,640
AAA Los Angeles Cnty
Community Redev
Tax Alloc (Bunker Hill Proj)
FSA Ser 93H
5.60%, 12/01/28 5,000 4,532,650
AAA Los Angeles Cnty
Ser 93A
Met Trans Auth MBIA
5.625%, 7/01/18 8,000 7,465,600
AAA Los Angeles Cnty
Transportation
Commission
FGIC Ser 91B
6.50%, 7/01/15 5,000 5,152,350
SP-1+ Los Angeles Cnty Tran
Unified Sch Dist
Ser 94
4.50%, 7/10/95 $ 2,500 $ 2,499,500
AAA Mt. Diablo School Dist
Comm Fac FGIC Ser 90
7.05%, 8/01/20 5,000 5,336,000
AAA Northern Calif Trans
Agy Elec Rev (Calif-Oregon Trans)
MBIA Ser 93A
6.457%, 4/29/24(a) 8,000 6,643,440
AAA Orange Cnty COP
(Loma Ridge Data Ctr Proj) AMBAC
6.00%, 6/01/21 1,000 971,730
AAA Palm Springs ETM COP
Ser 91B
Zero coupon, 4/15/21 19,425 3,513,983
AAA Rancho Wtr Dist Fin
Auth AMBAC Ser 91
8.374%, 8/17/21(a) 3,000 3,505,530
AAA Redding COP
Electric System Rev
MBIA Ser 92A
8.243%, 7/01/22(a) 2,000 2,117,140
AAA Sacramento Muni Util
Dist Elec Rev
FGIC Ser 93D
5.25%, 11/15/12 7,525 6,864,680
AAA Sacramento Muni Util
Dist FGIC Ser 91Z
6.35%, 7/01/05 1,060 1,122,752
6.45%, 7/01/10 1,350 1,395,617
AAA San Bernardino Cnty
Redev Fin (Ontario Red Proj 1)
MBIA Ser 93
5.80%, 8/01/23 10,000 9,443,300
AAA San Dimas
Redev Agy (Creative Growth) CGIC Ser 91A
6.75%, 9/01/16 1,000 1,051,550
AAA San Francisco City &
Cnty Int'l Arpt
MBIA Ser 93 II-4
6.00%, 5/01/14 5,000 4,960,800
AAA Stockton Cnty
Wastewater Treatment COP
FGIC Ser 95A
6.80%, 9/01/24 5,000 5,337,450
20
ALLIANCE MUNICIPAL INCOME FUND
- - -------------------------------------------------------------------------------
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS (000) VALUE
- - -------------------------------------------------------------------------------
AAA Univ of California
Regents Hosp Rev
(UCLA Med Ctr)
MBIA Ser 94
5.50%, 12/01/20 $8,685 $7,940,782
AAA Yorba Linda Redev Agy
Tax Alloc Bonds
MBIA Ser 93A
Zero coupon, 9/01/19 3,300 718,014
TOTAL INVESTMENTS-88.7%
(cost $121,897,156) $122,859,441
Other assets less liabilities-11.3% 15,669,793
NET ASSETS-100% $138,529,234
* Moody's or Fitch Rating.
(a) Inverse floater security - the interest rate is subject to change
periodically.
See Glossary of Terms below.
See notes to financial statements.
GLOSSARY OF TERMS:
AMBAC American Municipal Bond Assurance Corporation
AMT Alternative Minimum Tax -(subject to
BPA Bond Purchase Agreement
CGIC Capital Guaranty Insurance Corporation
COP Certificate of Participation
ETM Escrow to Maturity
FGIC Financial Guaranty Insurance Company
FHA Federal Housing Administration
FNMA Federal National Mortgage Association
FSA Financial Security Assurance, Inc.
GNMA Government National Mortgage Association
GO General Obligation
HDA Housing Development Authority
HDC Housing Development Corporation
HFA Housing Finance Authority
IDA Industrial Development Authority
IDR Industrial Development Revenue
LOC Letter of Credit
MBIA Municipal Bond Investors Assurance
MFHR Multi-Family Housing Revenue
NR Rating not applied for
PCR Pollution Control Revenue
SFMR Single Family Mortgage Revenue
SONYMA State of New York Mortgage Agency
VRDN Variable Rate Demand Note
21
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1995 (UNAUDITED) ALLIANCE MUNICIPAL INCOME FUND
- - -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INSURED INSURED
NATIONAL NATIONAL NEW YORK CALIFORNIA CALIFORNIA
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments in securities, at value (cost:
National-$703,642,501; Insured National-
$230,545,338; New York-$291,764,864;
California-$725,034,717; Insured California-
$121,897,156, respectively) $712,581,213 $234,573,281 $297,229,679 $717,485,537 $122,859,441
Cash -0- -0- -0- 2,149,287 -0-
Interest receivable 14,401,902 3,868,405 5,393,160 14,309,798 2,148,057
Receivable for capital stock sold 1,375,682 796,998 710,161 1,132,958 279,095
Receivable for investment securities sold -0- 6,331,868 1,457,949 -0- 18,528,752
Prepaid expenses and other assets 87,158 59,157 14,674 36,478 6,854
Total assets 728,445,955 245,629,709 304,805,623 735,114,058 143,822,199
LIABILITIES
Due to custodian 6,411,119 2,090,544 77,656 -0- 1,982,874
Payable for investment securities purchased 15,479,799 468,129 -0- 4,990,944 2,276,575
Payable for capital stock redeemed 1,394,025 100,310 367,023 3,088,699 222,023
Distribution fee payable 390,983 107,677 145,147 329,465 56,323
Advisory fee payable 132,191 100,968 41,702 127,974 63,755
Accrued expenses and other liabilities 3,094,006 971,801 1,379,614 3,238,703 691,415
Total liabilities 26,902,123 3,839,429 2,011,142 11,775,785 5,292,965
NET ASSETS $701,543,832 $241,790,280 $302,794,481 $723,338,273 $138,529,234
CLASS A SHARES
Net assets $333,039,805 $160,889,578 $182,746,275 $471,432,782 $101,741,470
Shares of capital stock outstanding 33,386,583 16,629,262 19,783,431 47,049,963 7,991,469
CLASS B SHARES
Net assets $253,702,119 $ 56,971,059 $ 88,040,122 $163,513,666 $ 24,855,406
Shares of capital stock outstanding 25,428,724 5,888,302 9,528,669 16,310,753 1,951,755
CLASS C SHARES
Net assets $114,801,908 $ 23,929,643 $ 32,008,084 $ 88,391,825 $ 11,932,358
Shares of capital stock outstanding 11,507,396 2,473,274 3,464,180 8,817,575 936,981
COMPOSITION OF NET ASSETS
Capital stock, at par $ 70,323 $ 24,991 $ 32,776 $ 72,178 $ 10,880
Additional paid-in capital 740,892,102 245,900,935 312,689,149 747,677,684 142,933,634
Distributions in excess of net investment
income (2,023,356) (204,353) (274,117) (311,185) (18,379)
Accumulated net realized loss (46,333,949) (7,959,236) (15,118,142) (16,551,224) (5,359,186)
Net unrealized appreciation (depreciation)
of investments 8,938,712 4,027,943 5,464,815 (7,549,180) 962,285
$701,543,832 $241,790,280 $302,794,481 $723,338,273 $138,529,234
CALCULATION OF MAXIMUM
OFFERING PRICE
CLASS A SHARES
Net asset value and redemption price per share $ 9.98 $ 9.68 $9.24 $10.02 $12.73
Sales charge-4.25% of public offering price .44 .43 .41 .44 .57
Maximum offering price $10.42 $10.11 $9.65 $10.46 $13.30
CLASS B SHARES
Net asset value and offering price per share $ 9.98 $ 9.68 $9.24 $10.02 $12.73
CLASS C SHARES
Net asset value, redemption and offering price
per share $ 9.98 $ 9.68 $9.24 $10.02 $12.73
</TABLE>
See notes to financial statements.
22
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1995 (UNAUDITED) ALLIANCE MUNICIPAL INCOME FUND
- - -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INSURED INSURED
NATIONAL NATIONAL NEW YORK CALIFORNIA CALIFORNIA
------------ ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Interest $23,370,050 $ 7,772,824 $10,048,837 $24,004,627 $ 4,359,395
EXPENSES
Advisory fee 2,147,312 703,538 907,074 2,191,053 361,627
Distribution fee-Class A 488,874 233,314 264,208 682,418 145,091
Distribution fee-Class B 1,219,211 265,792 412,144 778,223 117,612
Distribution fee-Class C 586,896 115,443 158,482 452,757 56,272
Transfer agency 363,027 96,828 136,067 247,652 42,018
Administrative 56,938 53,707 54,659 53,619 53,092
Printing 48,002 11,495 15,735 22,842 6,857
Custodian 34,912 15,502 21,076 29,669 11,879
Taxes 33,373 11,728 -0- 23,821 4,543
Registration 32,370 35,817 451 3,576 1,823
Audit and legal 29,106 19,350 16,414 15,669 22,713
Directors' fees 2,050 2,405 2,030 3,334 1,762
Miscellaneous 13,566 11,285 18,174 9,271 9,739
Total expenses 5,055,637 1,576,204 2,006,514 4,513,904 835,028
Less advisory fee waived (see Note B) (1,265,641) (146,631) (493,230) (1,059,776) (71,127)
Net expenses 3,789,996 1,429,573 1,513,284 3,454,128 763,901
Net investment income 19,580,054 6,343,251 8,535,553 20,550,499 3,595,494
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Net realized loss on investments (27,551,021) (4,004,170) (11,605,431) (11,654,376) (1,402,446)
Net change in unrealized depreciation of
investments 67,174,986 21,963,808 28,154,671 53,685,455 11,395,862
Net gain on investments 39,623,965 17,959,638 16,549,240 42,031,079 9,993,416
NET INCREASE IN NET ASSETS
FROM OPERATIONS $59,204,019 $24,302,889 $25,084,793 $62,581,578 $13,588,910
</TABLE>
See notes to financial statements.
23
STATEMENT OF CHANGES IN NET ASSETS ALLIANCE MUNICIPAL INCOME FUND
- - -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NATIONAL INSURED NATIONAL
----------------------------- -----------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1995 OCTOBER 31, APRIL 30, 1995 OCTOBER 31,
(UNAUDITED) 1994 (UNAUDITED) 1994
--------------- ------------- --------------- -------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETSFROM OPERATIONS
Net investment income $ 19,580,054 $ 41,336,843 $ 6,343,251 $ 13,270,616
Net realized loss on investments (27,551,021) (18,784,294) (4,004,170) (3,954,200)
Net change in unrealized appreciation
(depreciation) of investments 67,174,986 (90,162,931) 21,963,808 (33,116,428)
Net increase (decrease) in net assets
from operations 59,204,019 (67,610,382) 24,302,889 (23,800,012)
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A (9,899,645) (20,925,782) (4,438,755) (9,399,632)
Class B (6,519,318) (12,416,937) (1,326,371) (2,448,147)
Class C (3,161,091) (7,994,124) (578,125) (1,422,837)
Distribution in excess of net investment income
Class A (110,569) (913,522) (38,634) (105,638)
Class B (72,876) (542,066) (11,545) (27,513)
Class C (35,336) (348,986) (5,032) (15,991)
Net realized gain on investments
Class A -0- (8,514,421) -0- (6,773,608)
Class B -0- (5,076,543) -0- (1,677,888)
Class C -0- (3,549,000) -0- (1,176,244)
CAPITAL STOCK TRANSACTIONS
Net increase (decrease) (60,315,601) 96,419,820 (5,320,871) 18,362,280
Total increase (decrease) (20,910,417) (31,471,943) 12,583,556 (28,485,230)
NET ASSETS
Beginning of year 722,454,249 753,926,192 229,206,724 257,691,954
End of period $701,543,832 $722,454,249 $241,790,280 $229,206,724
</TABLE>
See notes to financial statements.
24
ALLIANCE MUNICIPAL INCOME FUND
- - -------------------------------------------------------------------------------
NEW YORK
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1995 OCTOBER 31,
(UNAUDITED) 1994
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment income $ 8,535,553 $ 17,556,621
Net realized loss on investments (11,605,431) (3,511,913)
Net change in unrealized appreciation
(depreciation) of investments 28,154,671 (44,342,566)
Net increase (decrease) in net assets
from operations 25,084,793 (30,297,858)
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income
Class A (5,460,690) (11,785,597)
Class B (2,217,714) (3,814,288)
Class C (857,149) (1,956,736)
Distribution in excess of net investment income
Class A (57,116) (124,081)
Class B (23,196) (40,157)
Class C (8,966) (20,601)
Net realized gain on investments
Class A -0- (768,907)
Class B -0- (227,299)
Class C -0- (141,225)
CAPITAL STOCK TRANSACTIONS
Net increase (decrease) (12,422,168) 36,925,744
Total increase (decrease) 4,037,794 (12,251,005)
NET ASSETS
Beginning of year 298,756,687 311,007,692
End of period $302,794,481 $298,756,687
See notes to financial statements.
25
STATEMENTOFCHANGESINNETASSETS(CONT.) ALLIANCE MUNICIPAL INCOME FUND
- - -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CALIFORNIA INSURED CALIFORNIA
----------------------------- -----------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1995 OCTOBER 31, APRIL 30, 1995 OCTOBER 31,
(UNAUDITED) 1994 (UNAUDITED) 1994
-------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment income $ 20,550,499 $ 43,929,351 $ 3,595,494 $ 7,640,236
Net realized loss on investments (11,654,376) (4,867,241) (1,402,446) (3,956,924)
Net change in unrealized appreciation
(depreciation) of investments 53,685,455 (106,275,455) 11,395,862 (19,452,385)
Net increase (decrease) in net assets
from operations 62,581,578 (67,213,345) 13,588,910 (15,769,073)
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A (13,970,331) (29,886,237) (2,750,243) (5,838,387)
Class B (4,152,140) (7,898,002) (570,096) (1,139,688)
Class C (2,428,028) (6,145,112) (275,155) (662,161)
Distribution in excess of net investment income
Class A (130,632) (80,974) (14,058) -0-
Class B (38,825) (21,399) (2,914) -0-
Class C (22,704) (16,650) (1,407) -0-
Net realized gain on investments
Class A -0- (3,190,803) -0- (3,968,017)
Class B -0- (818,667) -0- (717,043)
Class C -0- (731,099) -0- (392,156)
CAPITAL STOCK TRANSACTIONS
Net increase (decrease) (53,309,868) 75,451,013 (3,365,933) 2,467,385
Total increase (decrease) (11,470,950) (40,551,275) 6,609,104 (26,019,140)
NET ASSETS
Beginning of year 734,809,223 775,360,498 131,920,130 157,939,270
End of period $723,338,273 $734,809,223 $138,529,234 $131,920,130
</TABLE>
See notes to financial statements.
26
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1995 (UNAUDITED) ALLIANCE MUNICIPAL INCOME FUND
- - -------------------------------------------------------------------------------
NOTE A: SIGNIFICANT ACCOUNTING POLICIES
Alliance Municipal Income Fund, Inc. (the 'Fund') is registered under the
Investment Company Act of 1940 as a diversified open-end management investment
company. The Fund, which is a Maryland corporation, operates as a series
company currently comprised of five portfolios: National Portfolio, Insured
National Portfolio, New York Portfolio, California Portfolio and Insured
California Portfolio (the 'Portfolios'). Each series is considered to be a
separate entity for financial reporting and tax purposes. Each portfolio offers
three classes of shares; Class A, Class B and Class C Shares. Class A shares
are sold with a front-end sales charge of up to 4.25%. Class B shares are sold
with a contingent deferred sales charge which declines from 3% to zero
depending on the period of time the shares are held. Class B shares will
automatically convert to Class A shares six years after the end of the calendar
month of purchase. Class C shares are sold without an initial or contingent
deferred sales charge. All three classes of shares have identical voting,
dividend liquidation and other rights and the same terms and conditions, except
that each class bears different distribution expenses and has exclusive voting
rights with respect to its distribution plan. Distribution of Class B and Class
C shares commenced on January 4, 1993 and May 3, 1993, respectively. The
following is a summary of the significant accounting policies followed by the
Fund.
1. SECURITY VALUATION
The Fund values municipal securities at fair value based on prices provided by
a recognized pricing service which uses information with respect to
transactions in bonds, quotations from bond dealers, market transactions in
comparable securities and various relationships between securities. Securities
for which market quotations are not readily available and restricted securities
which are subject to limitations as to their resale are valued in good faith at
fair value by the Fund's Adviser under procedures established by the Fund's
Board of Directors. Short-term securities which mature in 60 days or less are
valued at amortized cost, which approximates market value.
2. TAXES
It is the intention of each 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 applicable,
to its shareholders. Therefore, no provisions for federal income or excise
taxes are required.
3. INVESTMENT INCOME AND SECURITY TRANSACTIONS
Interest income is accrued daily. Security transactions are accounted for on
the date the securities are purchased or sold. Security gains and losses are
determined on the identified cost basis. The Fund amortizes premiums and
accrues original issue discounts and market discounts as adjustments to
interest income.
The New York and California Portfolios follow an investment policy of investing
primarily in municipal obligations of one state. Economic changes affecting the
state and certain of its public bodies and municipalities may affect the
ability of issuers within the state to pay interest on or repay principal of,
municipal obligations held by the Portfolios.
4. DIVIDENDS AND DISTRIBUTIONS
Dividends and distributions to shareholders are recorded on the ex-dividend
date. Income dividends and capital gains distributions are determined in
accordance with income tax regulations, which may differ from generally
accepted accounting principles.
27
NOTESTOFINANCIALSTATEMENTS(CONTINUED) ALLIANCE MUNICIPAL INCOME FUND
- - -------------------------------------------------------------------------------
NOTE B: ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Under the terms of an investment advisory agreement, the National, New York and
California Portfolios pay Alliance Capital Management L. P., (the 'Advisor') an
advisory fee at an annual rate of up to .625 of 1% of each Portfolio's average
daily net assets. For the Insured National Portfolio, the Agreement provides
for a fee at an annual rate of up to .625 of 1% of the first $200 million, .50
of 1% of the next $200 million, .45 of 1% in excess of $400 million of the
Portfolio's average daily net assets. For the Insured California Portfolio, the
Agreement provides for a fee at an annual rate of up to .55 of 1% of the first
$200 million, .50 of 1% of the next $200 million and .45 of 1% in excess of
$400 million of the Portfolio's average daily net assets.
Such fees are accrued daily and paid monthly. The Adviser has agreed, under the
terms of the investment advisory agreement, to reimburse the Fund to the extent
that the expenses of each of its Portfolios (exclusive of interest, taxes,
brokerage, distribution fees, and extraordinary expenses) exceed the limits
prescribed by any state in which that Portfolio's shares are qualified for
sale. The most restrictive expense limitation is believed to be 2.5% of the
first $30 million, 2% of the next $70 million, and 1.5% of the excess over $100
million of each Portfolio's average daily net assets. No such reimbursement was
required for the six months ended April 30, 1995. For the six months ended
April 30, 1995 the Adviser voluntarily agreed to waive part of its advisory fee
for the National, Insured National, New York, California and Insured California
Portfolios.
The aggregate amounts of such fee waivers were: National Portfolio, $1,265,641;
Insured National Portfolio, $146,631; New York Portfolio, $493,230; California
Portfolio, $1,059,776; and Insured California, $71,127. Pursuant to the
advisory agreement, the Fund paid $272,015 to the Adviser representing the cost
of certain legal and accounting services provided to each Portfolio by the
Adviser.
Each Portfolio compensates Alliance Fund Services, Inc. (a wholly-owned
subsidiary of the Adviser) under a Services Agreement for providing personnel
and facilities to perform transfer agency services for each Portfolio. Such
compensation amounted to $212,449 for the National Portfolio, $54,989 for the
Insured National Portfolio, $86,193 for the New York Portfolio, $151,117 for
the California Portfolio and $23,899 for the Insured California Portfolio.
Alliance Fund Distributors, Inc. (a wholly-owned subsidiary of the Adviser)
serves as the Distributor of the Fund's capital stock. The amount of front end
sales charges received by the Distributor from sales of the respective
Portfolio's Class A shares for the six months ended April 30, 1995 were:
National Portfolio, $29,870; Insured National Portfolio, $12,151; New York
Portfolio, $11,656; California Portfolio, $32,470; and Insured California
Portfolio, $12,001. The amount of contingent deferred sales charge imposed upon
redemptions by shareholders of Class B shares were: National Portfolio,
$322,547; Insured National Portfolio, $61,535; New York Portfolio, $105,875;
California Portfolio, $288,605; and Insured California Portfolio, $33,942.
NOTE C: DISTRIBUTION SERVICES AGREEMENT
Each Portfolio has adopted a Distribution Services Agreement (the 'Agreement')
pursuant to Rule 12b-1 under the Investment Company Act of 1940 for Class A,
Class B and Class C shares. Under the Agreement, each Portfolio pays a
distribution fee to the Distributor at an annual rate of up to .30 of 1% of
each Portfolio's average daily net assets attributable to the Class A shares
and 1% of each Portfolio's average daily net assets attributable to the Class B
and Class C shares. The Agreement provides that the Distributor will use such
payments in their entirety for distribution assistance and promotional
activities. The Distributor has incurred expenses in excess of the distribution
costs reimbursed by each Portfolio as follows:
28
ALLIANCE MUNICIPAL INCOME FUND
- - -------------------------------------------------------------------------------
PORTFOLIO CLASS B CLASS C
- - --------------------- ---------- ----------
National $4,159,814 $1,482,901
Insured National 1,687,122 533,805
New York 2,561,773 514,323
California 4,329,687 1,159,761
Insured California 1,067,024 316,791
Such costs may be recovered from each Portfolio in future periods so long as
the Agreement is in effect. In accordance with the Agreement, there is no
provision for recovery of unreimbursed distribution costs incurred by the
Distributor beyond the current fiscal year for Class A shares. The Agreement
also provides that the Adviser may use its own resources to finance the
distribution of each Portfolio's shares.
NOTE D: INVESTMENT TRANSACTIONS
Purchases and sales of investment securities for the six months ended April 30,
1995 were:
PORTFOLIO PURCHASES SALES
- - ------------------- ------------ ------------
National $468,539,110 $524,524,655
Insured National 185,033,351 199,726,656
New York 147,511,894 168,473,690
California 198,614,771 242,501,007
Insured California 35,999,245 49,640,360
At April 30, 1995, the cost of securities for federal income tax purposes,
gross unrealized appreciation, gross unrealized depreciation and net unrealized
depreciation of investments for each Portfolio were as follows:
GROSS UNREALIZED NET
---------------------------- UNREALIZED
TAX COST APPRECIATION (DEPRECIATION) (DEPRECIATION)
------------ ------------ -------------- --------------
National $704,576,499 $20,534,651 $(12,529,937) $8,004,714
Insured National 230,663,250 5,751,003 (1,840,972) 3,910,031
New York 293,614,721 8,920,870 (5,305,912) 3,614,958
California 725,058,729 13,253,201 (20,826,393) (7,573,192)
Insured California 121,929,853 3,616,233 (2,686,645) 929,588
NOTE E: TAXES
For Federal income tax purposes at October 31, 1994, the Series had capital
loss carryforwards expiring in 2002 for the following portfolios: National
Portfolio, $17,246,158; Insured National Portfolio, $3,946,364; New York
Portfolio, $1,550,512; California Portfolio, $4,748,470; and Insured California
Portfolio, $3,924,227.
29
NOTESTOFINANCIALSTATEMENTS(CONTINUED) ALLIANCE MUNICIPAL INCOME FUND
- - -------------------------------------------------------------------------------
NOTE F: CAPITAL STOCK
There are 3,000,000,000 shares of $.001 par value capital stock authorized,
designated Class A, Class B and Class C shares. There are 200,000,000
authorized shares for each Class.
NATIONAL PORTFOLIO
--------------------------------------------------------
SHARES AMOUNT
-------------------------- ----------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
APRIL 30,1995 OCT. 31, APRIL 30,1995 OCT. 31,
(UNAUDITED) 1994 (UNAUDITED) 1994
------------ ------------ ------------- -------------
CLASS A
Shares sold 2,408,199 8,763,506 $ 22,945,634 $ 91,292,397
Shares issued in
reinvestment of
dividends and
distributions 502,754 1,912,150 4,808,068 19,811,794
Shares redeemed (5,540,835) (9,648,259) (52,388,279) (98,831,346)
Net increase(decrease) (2,629,882) 1,027,397 $(24,634,577) $ 12,272,845
CLASS B
Shares sold 2,093,697 11,186,358 $ 19,933,781 $117,243,703
Shares issued in
reinvestment of
dividends and
distributions 350,673 1,232,690 3,359,258 12,747,638
Shares redeemed (3,632,022) (5,399,812) (34,187,062) (55,318,876)
Net increase(decrease) (1,187,652) 7,019,236 $(10,894,023) $ 74,672,465
CLASS C
Shares sold 1,569,713 13,213,233 $ 15,087,247 $139,780,039
Shares issued in
reinvestment of
dividends and
distributions 149,252 962,250 1,441,053 10,071,107
Shares redeemed (4,375,992) (13,675,221) (41,315,301) (140,376,636)
Net increase(decrease) (2,657,027) 500,262 $(24,787,001) $9,474,510
INSURED NATIONAL PORTFOLIO
--------------------------------------------------------
SHARES AMOUNT
-------------------------- ----------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
APRIL 30,1995 OCT. 31, APRIL 30,1995 OCT. 31,
(UNAUDITED) 1994 (UNAUDITED) 1994
------------ ------------ ------------- -------------
CLASS A
Shares sold 1,349,715 1,451,617 $12,189,717 $14,585,949
Shares issued in
reinvestment of
dividends and
distributions 208,251 973,251 1,922,911 9,757,292
Shares redeemed (2,068,891) (2,555,318) (18,953,296) (25,044,847)
Net decrease (510,925) (130,450) $(4,840,668) $ (701,606)
CLASS B
Shares sold 762,730 2,319,991 $ 6,994,133 $23,387,769
Shares issued in
reinvestment of
dividends and
distributions 74,352 303,499 687,024 3,033,047
Shares redeemed (686,797) (876,614) (6,265,209) (8,468,612)
Net increase 150,285 1,746,876 $ 1,415,948 $17,952,204
30
ALLIANCE MUNICIPAL INCOME FUND
- - -------------------------------------------------------------------------------
SHARES AMOUNT
-------------------------- ----------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
APRIL 30,1995 OCT. 31, APRIL 30,1995 OCT. 31,
(UNAUDITED) 1994 (UNAUDITED) 1994
------------ ------------ ------------- -------------
CLASS C
Shares sold 311,352 3,170,564 $ 2,825,951 $32,420,564
Shares issued in
reinvestment of
dividends and
distributions 42,875 203,843 394,301 2,055,363
Shares redeemed (570,712) (3,366,643) (5,116,403) (33,364,245)
Net increase (decrease) (216,485) 7,764 $(1,896,151) $ 1,111,682
NEW YORK PORTFOLIO
--------------------------------------------------------
SHARES AMOUNT
-------------------------- ----------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
APRIL 30,1995 OCT. 31, APRIL 30,1995 OCT. 31,
(UNAUDITED) 1994 (UNAUDITED) 1994
------------ ------------ ------------- -------------
CLASS A
Shares sold 808,155 3,168,916 $ 7,159,586 $ 30,501,075
Shares issued in
reinvestment of
dividends and
distributions 326,969 897,711 2,896,024 8,532,886
Shares redeemed (2,236,267) (4,249,500) (19,449,498) (39,961,104)
Net decrease (1,101,143) (182,873) $(9,393,888) $ (927,143)
CLASS B
Shares sold 943,387 4,324,083 $ 8,380,482 $ 41,717,290
Shares issued in
reinvestment of
dividends and
distributions 141,534 303,825 1,253,460 2,878,860
Shares redeemed (950,060) (986,606) (8,313,767) (9,238,391)
Net increase 134,861 3,641,302 $1,320,175 $35,357,759
CLASS C
Shares sold 341,110 3,280,476 $3,015,740 $32,182,546
Shares issued in
reinvestment of
dividends and
distributions 60,615 161,628 533,844 1,545,458
Shares redeemed (909,368) (3,230,822) (7,898,039) (31,232,876)
Net increase (decrease) (507,643) 211,282 $(4,348,455) $ 2,495,128
CALIFORNIA PORTFOLIO
--------------------------------------------------------
SHARES AMOUNT
-------------------------- ----------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
APRIL 30,1995 OCT. 31, APRIL 30,1995 OCT. 31,
(UNAUDITED) 1994 (UNAUDITED) 1994
------------ ------------ ------------- -------------
CLASS A
Shares sold 2,773,163 8,326,422 $ 26,367,739 $86,206,380
Shares issued in
reinvestment of
dividends and
distributions 541,343 1,695,587 5,193,456 17,454,436
Shares redeemed (6,163,362) (8,870,972) (57,888,397) (89,991,938)
Net increase(decrease) (2,848,856) 1,151,037 $(26,327,202) $13,668,878
31
NOTESTOFINANCIALSTATEMENTS(CONTINUED) ALLIANCE MUNICIPAL INCOME FUND
- - -------------------------------------------------------------------------------
CALIFORNIA PORTFOLIO
--------------------------------------------------------
SHARES AMOUNT
-------------------------- ----------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
APRIL 30,1995 OCT. 31, APRIL 30,1995 OCT. 31,
(UNAUDITED) 1994 (UNAUDITED) 1994
------------ ------------ ------------- -------------
CLASS B
Shares sold 1,364,786 7,617,761 $13,128,414 $79,269,903
Shares issued in
reinvestment of
dividends and
distributions 174,523 481,615 1,675,476 4,900,749
Shares redeemed (2,297,526) (2,654,651) (21,543,987) (26,837,236)
Net increase (decrease) (758,217) 5,444,725 $(6,740,097) $57,333,416
CLASS C
Shares sold 834,490 8,683,048 $8,043,123 $91,364,593
Shares issued in
reinvestment of
dividends and
distributions 74,497 523,322 721,345 5,406,737
Shares redeemed (3,085,558) (8,982,706) (29,007,037) (92,322,611)
Net increase(decrease) (2,176,571) 223,664 $(20,242,569) $ 4,448,719
INSURED CALIFORNIA PORTFOLIO
--------------------------------------------------------
SHARES AMOUNT
-------------------------- ----------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
APRIL 30,1995 OCT. 31, APRIL 30,1995 OCT. 31,
(UNAUDITED) 1994 (UNAUDITED) 1994
------------ ------------ ------------- -------------
CLASS A
Shares sold 1,140,577 1,853,715 $13,536,075 $24,454,733
Shares issued in
reinvestment of
dividends and
distributions 88,868 409,982 1,080,639 5,430,477
Shares redeemed (1,281,557) (2,689,879) (15,217,206) (34,914,619)
Net decrease (52,112) (426,182) $ (600,492) $(5,029,409)
CLASS B
Shares sold 513,484 939,403 $ 6,165,910 $12,556,744
Shares issued in
reinvestment of
dividends and
distributions 20,093 101,345 243,971 1,350,667
Shares redeemed (667,076) (445,132) (7,860,455) (5,789,369)
Net increase (decrease) (133,499) 595,616 $(1,450,574) $ 8,118,042
CLASS C
Shares sold 263,197 1,151,303 $ 3,140,775 $15,496,034
Shares issued in
reinvestment of
dividends and
distributions 10,230 59,428 124,109 790,742
Shares redeemed (394,026) (1,273,601) (4,579,751) (16,908,024)
Net decrease (120,599) (62,870) $(1,314,867) $ (621,248)
* Commencement of distribution.
32
FINANCIAL HIGHLIGHTS ALLIANCE MUNICIPAL INCOME FUND
- - -------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
NATIONAL PORTFOLIO
-----------------------------------------------------------------------------------
CLASS A
-----------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED OCTOBER 31,
APRIL 30, 1995 -------------------------------------------------------------------
(UNAUDITED) 1994 1993 1992 1991 1990
-------------- ------------- ------------ ------------ ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $9.41 $11.05 $10.19 $9.96 $9.47 $9.56
INCOME FROM INVESTMENT OPERATIONS
Net investment income .29** .57** .61** .65** .66** .68**
Net realized and unrealized
gain (loss) on investments .57 (1.37) .88 .28 .49 (.07)
Net increase (decrease) in net asset
value from operations .86 (.80) 1.49 .93 1.15 .61
LESS: DISTRIBUTIONS
Dividends from net investment income (.29) (.57) (.62) (.65) (.66) (.68)
Distribution in excess of net
investment income -0- (.03) -0- -0- -0- -0-
Distributions from net realized gains -0- (.24) (.01) (.05) -0- (.02)
Total dividends and distributions (.29) (.84) (.63) (.70) (.66) (.70)
Net asset value, end of period $9.98 $9.41 $11.05 $10.19 $9.96 $9.47
TOTAL RETURN
Total investment return based on
net asset value(b) 9.31% (7.65)% 14.94% 9.60% 12.55% 6.52%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $333,040 $338,814 $386,484 $261,895 $207,167 $185,832
Ratio to average net assets of:
Expenses, net of waivers/reimbursements .73%(a) .62% .65% .83% .75% .60%
Expenses, before waivers/reimbursements 1.10%(a) 1.09% 1.08% 1.11% 1.14% 1.15%
Net investment income, net of
waivers/reimbursements 6.07%(a) 5.61% 5.69% 6.35% 6.81% 7.06%
Portfolio turnover rate 67% 110% 233% 86% 64% 105%
</TABLE>
See footnote summary on page 42.
33
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND
- - -------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
NATIONAL PORTFOLIO
------------------------------------------------------------------------------------
CLASS B CLASS C
----------------------------------------- ------------------------------------------
SIX MONTHS JANUARY 4,1993* SIX MONTHS MAY 3,1993*
ENDED YEAR ENDED TO ENDED YEAR ENDED TO
APRIL 30, 1995 OCTOBER 31, OCTOBER 31, APRIL 30, 1995 OCTOBER 31, OCTOBER 31,
(UNAUDITED) 1994 1993 (UNAUDITED) 1994 1993
------------- ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $9.41 $11.05 $10.43 $9.41 $11.05 $10.70
INCOME FROM INVESTMENT OPERATIONS
Net investment income .25** .50** .44** .25** .50** .26**
Net realized and unrealized
gain (loss) on investments .58 (1.38) .63 .58 (1.38) .36
Net increase (decrease) in net asset
value from operations .83 (.88) 1.07 .83 (.88) .62
LESS: DISTRIBUTIONS
Dividends from net investment income (.26) (.50) (.45) (.26) (.50) (.27)
Distribution in excess of
net investment income -0- (.02) -0- -0- (.02) -0-
Distributions from net realized gains -0- (.24) -0- -0- (.24) -0-
Total dividends and distributions (.26) (.76) (.45) (.26) (.76) (.27)
Net asset value, end of period $9.98 $9.41 $11.05 $9.98 $9.41 $11.05
TOTAL RETURN
Total investment return based on
net asset value(b) 8.92% (8.34)% 10.43% 8.92% (8.33)% 5.84%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $253,702 $250,391 $216,489 $114,802 $133,249 $150,953
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 1.44%(a) 1.32% 1.36%(a) 1.43%(a) 1.31% 1.36%(a)
Expenses, before waivers/reimbursements 1.81%(a) 1.80% 1.78%(a) 1.80%(a) 1.79% 1.78%(a)
Net investment income, net of
waivers/reimbursements 5.36%(a) 4.91% 4.59%(a) 5.39%(a) 4.89% 4.17%(a)
Portfolio turnover rate 67% 110% 233% 67% 110% 233%
</TABLE>
See footnote summary on page 42.
34
ALLIANCE MUNICIPAL INCOME FUND
- - -------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
INSURED NATIONAL PORTFOLIO
-----------------------------------------------------------------------------------
CLASS A
-----------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED OCTOBER 31,
APRIL 30, 1995 -------------------------------------------------------------------
(UNAUDITED) 1994 1993 1992 1991 1990
-------------- ------------- ------------ ------------ ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $8.96 $10.76 $9.87 $9.88 $9.39 $9.49
INCOME FROM INVESTMENT OPERATIONS
Net investment income .26** .53** .56** .60** .61** .62**
Net realized and unrealized
gain (loss) on investments .72 (1.40) .96 .15 .49 (.03)
Net increase (decrease) in net asset
value from operations .98 (.87) 1.52 .75 1.10 .59
LESS: DISTRIBUTIONS
Dividends from net investment
income (.26) (.53) (.57) (.60) (.61) (.62)
Distribution in excess of
net investment income -0- (.01) -0- -0- -0- -0-
Distributions from net realized gains -0- (.39) (.06) (.16) -0- (.07)
Total dividends and distributions (.26) (.93) (.63) (.76) (.61) (.69)
Net asset value, end of period $9.68 $8.96 $10.76 $9.87 $9.88 $9.39
TOTAL RETURN
Total investment return based on
net asset value(b) 11.13% (8.69)% 15.82% 7.88% 12.08% 6.44%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $160,889 $153,656 $185,876 $149,632 $130,723 $118,240
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 1.00%(a) .66% .73% .81% .92% .92%
Expenses, before waivers/reimbursements 1.13%(a) 1.11% 1.11% 1.12% 1.17% 1.20%
Net investment income, net of
waivers/reimbursements 5.70%(a) 5.40% 5.40% 6.04% 6.34% 6.56%
Portfolio turnover rate 81% 149% 165% 105% 96% 69%
</TABLE>
See footnote summary on page 42.
35
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND
- - -------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
INSURED NATIONAL PORTFOLIO
------------------------------------------------------------------------------------
CLASS B CLASS C
----------------------------------------- ------------------------------------------
SIX MONTHS JANUARY 4,1993* SIX MONTHS MAY 3,1993*
ENDED YEAR ENDED TO ENDED YEAR ENDED TO
APRIL 30, 1995 OCTOBER 31, OCTOBER 31, APRIL 30, 1995 OCTOBER 31, OCTOBER 31,
(UNAUDITED) 1994 1993 (UNAUDITED) 1994 1993
------------- ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $8.96 $10.76 $10.10 $8.96 $10.76 $10.41
INCOME FROM INVESTMENT OPERATIONS
Net investment income .23** .46** .40** .23** .46** .24**
Net realized and unrealized
gain (loss) on investments .72 (1.40) .66 .72 (1.40) .35
Net increase (decrease) in net asset
value from operations .95 (.94) 1.06 .95 (.94) .59
LESS: DISTRIBUTIONS
Dividends from net investment income (.23) (.46) (.40) (.23) (.46) (.24)
Distribution in excess of net
investment income -0- (.01) -0- -0- (.01) -0-
Distributions from net realized gains -0- (.39) -0- -0- (.39) -0-
Total dividends and distributions (.23) (.86) (.40) (.23) (.86) (.24)
Net asset value, end of period $9.68 $8.96 $10.76 $9.68 $8.96 $10.76
TOTAL RETURN
Total invesment return based on
net asset value(b) 10.75% (9.38)% 10.68% 10.75% (9.38)% 5.75%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $56,971 $51,439 $42,954 $23,930 $24,112 $28,862
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 1.71%(a) 1.37% 1.45%(a) 1.70%(a) 1.36% 1.45%(a)
Expenses, before waivers/reimbursements 1.84%(a) 1.82% 1.83%(a) 1.83%(a) 1.81% 1.83%(a)
Net investment income, net of
waivers/reimbursements 4.99%(a) 4.71% 4.31%(a) 5.02%(a) 4.68% 3.98%(a)
Portfolio turnover rate 81% 149% 165% 81% 149% 165%
</TABLE>
See footnote summary on page 42.
36
ALLIANCE MUNICIPAL INCOME FUND
- - -------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
NEW YORK PORTFOLIO
-----------------------------------------------------------------------------------
CLASS A
-----------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED OCTOBER 31,
APRIL 30, 1995 -------------------------------------------------------------------
(UNAUDITED) 1994 1993 1992 1991 1990
-------------- ------------- ------------ ------------ ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $8.72 $10.17 $9.53 $9.30 $8.78 $8.92
INCOME FROM INVESTMENT OPERATIONS
Net investment income .27** .55** .57** .60** .62** .64**
Net realized and unrealized
gain (loss) on investments .53 (1.40) .79 .24 .52 (.14)
Net increase (decrease) in net asset
value from operations .80 (.85) 1.36 .84 1.14 .50
LESS: DISTRIBUTIONS
Dividends from net investment income (.28) (.55) (.58) (.60) (.62) (.64)
Distribution in excess of net
investment income -0- (.01) -0- -0- -0- -0-
Distributions from net realized gains -0- (.04) (.14) (.01) -0- -0-
Total dividends and distributions (.28) (.60) (.72) (.61) (.62) (.64)
Net asset value, end of period $9.24 $8.72 $10.17 $9.53 $9.30 $8.78
TOTAL RETURN
Total investment return based on
net asset value(b) 9.28% (8.76)% 14.71% 9.39% 13.36% 5.71%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $182,746 $182,170 $214,259 $162,549 $136,484 $118,875
Ratio to average net assets of:
Expenses, net of waivers/reimbursements .77%(a) .66% .68% .70% .65% .44%
Expenses, before waivers/reimbursements 1.11%(a) 1.11% 1.13% 1.13% 1.20% 1.23%
Net investment income, net of
waivers/reimbursements 6.16%(a) 5.75% 5.76% 6.37% 6.81% 7.08%
Portfolio turnover rate 50% 69% 63% 69% 48% 101%
</TABLE>
See footnote summary on page 42.
37
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND
- - -------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
NEW YORK PORTFOLIO
------------------------------------------------------------------------------------
CLASS B CLASS C
----------------------------------------- ------------------------------------------
SIX MONTHS JANUARY 4,1993* SIX MONTHS MAY 3,1993*
ENDED YEAR ENDED TO ENDED YEAR ENDED TO
APRIL 30, 1995 OCTOBER 31, OCTOBER 31, APRIL 30, 1995 OCTOBER 31, OCTOBER 31,
(UNAUDITED) 1994 1993 (UNAUDITED) 1994 1993
------------- ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $8.72 $10.17 $9.61 $8.72 $10.17 $9.89
INCOME FROM INVESTMENT OPERATIONS
Net investment income .24** .48** .41** .24** .48** .24**
Net realized and unrealized
gain (loss) on investments .52 (1.41) .56 .52 (1.41) .29
Net increase (decrease) in net asset
value from operations .76 (.93) .97 .76 (.93) .53
LESS: DISTRIBUTIONS
Dividends from net investment income (.24) (.47) (.41) (.24) (.47) (.25)
Distribution in excess of net
investment income -0- (.01) -0- -0- (.01) -0-
Distributions from net realized gains -0- (.04) -0- -0- (.04) -0-
Total dividends and distributions (.24) (.52) (.41) (.24) (.52) (.25)
Net asset value, end of period $9.24 $8.72 $10.17 $9.24 $8.72 $10.17
TOTAL RETURN
Total investment return based on
net asset value(b) 8.84% (9.44)% 10.29% 8.84% (9.44)% 5.37%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $88,040 $81,941 $58,504 $32,008 $34,646 $38,245
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 1.47%(a) 1.36% 1.39%(a) 1.46%(a) 1.36% 1.38%(a)
Expenses, before waivers/reimbursements 1.81%(a) 1.82% 1.84%(a) 1.80%(a) 1.81% 1.84%(a)
Net investment income, net of
waivers/reimbursements 5.44%(a) 5.05% 4.70%(a) 5.47%(a) 5.03% 4.42%(a)
Portfolio turnover rate 50% 69% 63% 50% 69% 63%
</TABLE>
See footnote summary on page 42.
38
ALLIANCE MUNICIPAL INCOME FUND
- - -------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CALIFORNIA PORTFOLIO
-----------------------------------------------------------------------------------
CLASS A
-----------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED OCTOBER 31,
APRIL 30, 1995 -------------------------------------------------------------------
(UNAUDITED) 1994 1993 1992 1991 1990
-------------- ------------- ------------ ------------ ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $9.43 $10.90 $10.06 $9.97 $9.58 $9.65
INCOME FROM INVESTMENT OPERATIONS
Net investment income .29** .59** .61** .65** .67** .68**
Net realized and unrealized
gain (loss) on investments .59 (1.41) .85 .13 .39 (.03)
Net increase (decrease) in net asset
value from operations .88 (.82) 1.46 .78 1.06 .65
LESS: DISTRIBUTIONS
Dividends from net investment income (.29) (.59) (.61) (.65) (.67) (.68)
Distribution in excess of net
investment income -0- -0- -0- -0- -0- -0-
Distributions from net realized gains -0- (.06) (.01) (.04) -0- (.04)
Total dividends and distributions (.29) (.65) (.62) (.69) (.67) (.72)
Net asset value, end of period $10.02 $9.43 $10.90 $10.06 $9.97 $9.58
TOTAL RETURN
Total investment return based on
net asset value(b) 9.54% (7.73)% 14.90% 8.05% 11.42% 7.03%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $471,433 $470,308 $531,293 $361,661 $228,755 $143,557
Ratio to average net assets of:
Expenses, net of waivers/reimbursements .74%(a) .64% .74% .59% .39% .39%
Expenses, before waivers/reimbursements 1.04%(a) 1.05% 1.06% 1.07% 1.11% 1.13%
Net investment income, net of
waivers/reimbursements 6.11%(a) 5.78% 5.74% 6.38% 6.80% 7.04%
Portfolio turnover rate 28% 45% 83% 77% 106% 88%
</TABLE>
See footnote summary on page 42.
39
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND
- - -------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CALIFORNIA PORTFOLIO
------------------------------------------------------------------------------------
CLASS B CLASS C
----------------------------------------- ------------------------------------------
SIX MONTHS JANUARY 4,1993* SIX MONTHS MAY 3,1993*
ENDED YEAR ENDED TO ENDED YEAR ENDED TO
APRIL 30, 1995 OCTOBER 31, OCTOBER 31, APRIL 30, 1995 OCTOBER 31, OCTOBER 31,
(UNAUDITED) 1994 1993 (UNAUDITED) 1994 1993
------------- ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $9.43 $10.90 $10.27 $9.43 $10.90 $10.54
INCOME FROM INVESTMENT OPERATIONS
Net investment income .26** .52** .44** .26** .52** .26**
Net realized and unrealized
gain (loss) on investments .59 (1.41) .63 .59 (1.41) .36
Net increase (decrease) in net asset
value from operations .85 (.89) 1.07 .85 (.89) .62
LESS: DISTRIBUTIONS
Dividends from net investment income (.26) (.52) (.44) (.26) (.52) (.26)
Distribution in excess of net
investment income -0- -0- -0- -0- -0- -0-
Distributions from net realized gains -0- (.06) -0- -0- (.06) -0-
Total dividends and distributions (.26) (.58) (.44) (.26) (.58) (.26)
Net asset value, end of period $10.02 $9.43 $10.90 $10.02 $9.43 $10.90
TOTAL RETURN
Total investment return based on
net asset value(b) 9.11% (8.43)% 10.60% 9.11% (8.43)% 5.98%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $163,513 $160,879 $126,688 $88,392 $103,622 $117,379
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 1.44%(a) 1.35% 1.44%(a) 1.44%(a) 1.34% 1.44%(a)
Expenses, before waivers/reimbursements 1.75%(a) 1.75% 1.78%(a) 1.74%(a) 1.75% 1.78%(a)
Net investment income, net of
waivers/reimbursements 5.40%(a) 5.07% 4.66%(a) 5.43%(a) 5.06% 4.42%(a)
Portfolio turnover rate 28% 45% 83% 28% 45% 83%
</TABLE>
See footnote summary on page 42.
40
ALLIANCE MUNICIPAL INCOME FUND
- - -------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
INSURED CALIFORNIA PORTFOLIO
-----------------------------------------------------------------------------------
CLASS A
-----------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED OCTOBER 31,
APRIL 30, 1995 -------------------------------------------------------------------
(UNAUDITED) 1994 1993 1992 1991 1990
-------------- ------------- ------------ ------------ ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $11.79 $14.25 $12.99 $12.80 $12.19 $12.23
INCOME FROM INVESTMENT OPERATIONS
Net investment income .34** .69** .70** .76** .77** .78**
Net realized and unrealized
gain (loss) on investments .95 (1.99) 1.30 .18 .61 (.04)
Net increase (decrease) in net asset
value from operations 1.29 (1.30) 2.00 .94 1.38 .74
LESS: DISTRIBUTIONS
Dividends from net investment income (.35) (.69) (.71) (.75) (.77) (.78)
Distributions from net realized gains -0- (.47) (.03) -0- -0- -0-
Total dividends and distributions (.35) (1.16) (.74) (.75) (.77) (.78)
Net asset value, end of period $12.73 $11.79 $14.25 $12.99 $12.80 $12.19
TOTAL RETURN
Total investment return based on
net asset value(b) 11.05% (9.73)% 15.64% 7.52% 11.62% 6.29%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $101,742 $94,857 $120,734 $90,477 $69,757 $56,933
Ratio to average net assets of:
Expenses, net of waivers/reimbursements .98%(a) .82% .94% .78% .79% .86%
Expenses, before waivers/reimbursements 1.08%(a) 1.08% 1.08% 1.09% 1.20% 1.23%
Net investment income, net of
waivers/reimbursements 5.66%(a) 5.29% 5.06% 5.77% 6.13% 6.42%
Portfolio turnover rate 28% 100% 186% 60% 59% 104%
</TABLE>
See footnote summary on page 42.
41
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND
- - -------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
INSURED CALIFORNIA PORTFOLIO
------------------------------------------------------------------------------------
CLASS B CLASS C
----------------------------------------- ------------------------------------------
SIX MONTHS JANUARY 4,1993* SIX MONTHS MAY 3,1993*
ENDED YEAR ENDED TO ENDED YEAR ENDED TO
APRIL 30, 1995 OCTOBER 31, OCTOBER 31, APRIL 30, 1995 OCTOBER 31, OCTOBER 31,
(UNAUDITED) 1994 1993 (UNAUDITED) 1994 1993
------------- ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $11.79 $14.25 $13.37 $11.79 $14.25 $13.78
INCOME FROM INVESTMENT OPERATIONS
Net investment income .30** .60** .49** .30** .60** .29**
Net realized and unrealized
gain (loss) on investments .93 (2.00) .89 .93 (2.00) .48
Net increase (decrease) in net asset
value from operations 1.23 (1.40) 1.38 1.23 (1.40) .77
LESS: DISTRIBUTIONS
Dividends from net investment income (.29) (.59) (.50) (.29) (.59) (.30)
Distributions from net realized gains -0- (.47) -0- -0- (.47) -0-
Total dividends and distributions (.29) (1.06) (.50) (.29) (1.06) (.30)
Net asset value, end of period $12.73 $11.79 $14.25 $12.73 $11.79 $14.25
TOTAL RETURN
Total investment return based on
net asset value(b) 10.59% (10.43)% 10.43% 10.59% (10.43)% 5.63%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $24,855 $24,591 $21,234 $11,932 $12,472 $15,971
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 1.68%(a) 1.53% 1.65%(a) 1.68%(a) 1.52% 1.65%(a)
Expenses, before waivers/reimbursements 1.79%(a) 1.78% 1.79%(a) 1.78%(a) 1.77% 1.79%(a)
Net investment income, net of
waivers/reimbursements 4.92%(a) 4.60% 3.85%(a) 4.99%(a) 4.59% 3.74%(a)
Portfolio turnover rate 28% 100% 186% 28% 100% 186%
</TABLE>
* Commencement of distribution.
** Net of fee waived and expenses reimbursed by the Adviser.
(a) Annualized
(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. Initial sales charge or contingent
deferred sales charge is not reflected in the calculation of total investment
return. Total investment return calculated for a period less than one year is
not annualized.
42
ALLIANCE MUNICIPAL INCOME FUND
- - -------------------------------------------------------------------------------
BOARD OF DIRECTORS
JOHN D. CARIFA, CHAIRMAN AND PRESIDENT
RUTH BLOCK (1)
DAVID H. DIEVLER
JAMES R. GREENE (1)
DR. JAMES M. HESTER (1)
CLIFFORD L. MICHEL (1)
EUGENE F. O'NEIL (1)
ROBERT C. WHITE (1)
OFFICERS
SUSAN P. KEENAN, SENIOR VICE PRESIDENT
DAVID M. DOWDEN, VICE PRESIDENT
WILLIAM E. OLIVER, VICE PRESIDENT
EDMUND P. BERGAN, JR., SECRETARY
MARK D. GERSTEN, TREASURER & CHIEF FINANCIAL OFFICER
JOSEPH J. MANTINEO, CONTROLLER
CUSTODIAN
STATE STREET BANK & TRUST COMPANY
225 Franklin Street
Boston, MA 02110
PRINCIPAL UNDERWRITER
ALLIANCE FUND DISTRIBUTORS, INC.
1345 Avenue of the Americas
New York, NY 10105
LEGAL COUNSEL
SEWARD & KISSEL
One Battery Park Plaza
New York, NY 10004
INDEPENDENT AUDITORS
ERNST & YOUNG LLP
787 Seventh Avenue
New York, NY 10019
TRANSFER AGENT
ALLIANCE FUND SERVICES, INC.
P.O. Box 1520
Secaucus, NJ 07096-1520
Toll-free 1-(800) 221-5672
(1) Member of the Audit Committee.
43
ALLIANCE MUNICIPAL INCOME FUND
1345 Avenue of the Americas
New York, NY 10105
(800) 221-5672
THIS REPORT IS DISTRIBUTED SOLELY TO SHAREHOLDERS OF THE FUND
AND IS NOT TO BE USED AS SALES LITERATURE.
R THESE REGISTERED SERVICE MARKS USED UNDER LICENSE FROM THE OWNER,
ALLIANCE CAPITAL MANAGEMENT L.P.
MUNISR
BULK RATE
U.S. POSTAGE
PAID
New York, NY
Permit No. 7131
ALLIANCE
MUNICIPAL
INCOME
FUND
SEMI-ANNUAL
REPORT
APRIL 30, 1995
