ALLIANCE MUNICIPAL INCOME FUND
ANNUAL REPORT
OCTOBER 31, 1995
LETTER TO SHAREHOLDERS ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
December 4, 1995
Dear Shareholder:
We are pleased to report municipal market activity and investment results for
Alliance Municipal Income Fund's fiscal year ended October 31, 1995. During the
period, the Fund's five Portfolios-National, Insured National, New York,
California and Insured California-have produced superior total returns and high
current tax-free income. The Portfolios' total returns for the fiscal year and
for the six-month period since we last reported, shown below, are based on the
net asset values of each class of shares as of October 31; additional
investment results and current yields appear on page 3. Also provided, on pages
4 and 5, are charts that show the performance of $10,000 initial investments in
each Portfolio based on a purchase of Class A shares from the inception date
through the end of October.
TOTAL RETURNS FOR INDIVIDUAL PORTFOLIOS
Twelve Months Six Months
Through October 31, 1995
------------------------
NATIONAL
Class A +17.73% +7.71%
Class B +16.91% +7.34%
Class C +16.93% +7.35%
INSURED NATIONAL
Class A +18.72% +6.83%
Class B +17.91% +6.47%
Class C +17.91% +6.47%
NEW YORK
Class A +17.10% +7.15%
Class B +16.19% +6.75%
Class C +16.19% +6.75%
CALIFORNIA
Class A +17.55% +7.31%
Class B +16.64% +6.90%
Class C +16.64% +6.90%
INSURED CALIFORNIA
Class A +19.29% +7.42%
Class B +18.35% +7.01%
Class C +18.35% +7.01%
MARKET OVERVIEW
The superb performance of long-term municipal bonds in the first three quarters
of this year produced the strongest investment results experienced in this
market since 1988.
The recovery from 1994's fixed income markets began in January and continued
throughout your Portfolios' fiscal year ended October 31, with prices and
yields approaching levels last seen in late 1993. This rally in bond prices was
due in part to continued signs of the United States' economy experiencing a
'soft landing' from its faster growth of 1994 while price inflation remained
subdued. The Federal Reserve Board also moved to lower short-term interest
rates for the first time since 1992, signaling an end to its aggressive policy
of monetary tightening that began early in 1994. Another contributor to
performance was favorable supply and demand conditions. Many state and local
governments had lower borrowing needs than in previous years, while the rapid
pace of redemptions through calls or maturities continued, reducing overall
supply of municipal bonds during the year.
As we anticipated, the Orange County, California, bankruptcy protection filing
has been an isolated event and the price dislocation that resulted from the
surprise filing has disappeared. Long term, we believe the bankruptcy filing
will serve to strengthen the municipal market. Specifically, financial
disclosure to investors has increased and many state and local governments have
enacted legislation to guard against future problems similar to those
experienced by the County.
The prospect of federal income tax legislation changing the tax benefits
associated with municipal securities has been the focus of the municipal market
during the past several months. Market fears of a flat tax, or worse, have
caused municipal bond yields to trade near the high end of their historic range
when compared to U.S. Treasurys, but in our view municipal bonds represent
excellent value at today's prices even with the possibility of lower tax rates.
We believe that any change in federal tax rates is not likely until 1997 at the
earliest, and that these changes will affect tax-exempt bond holders less than
currently projected. Furthermore, a decrease in federal tax rates will most
likely mean increases at the state level as a result of cutbacks in revenue
sharing by Washington, creating a shift in the tax burden but not lower
combined
1
ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
tax rates. This means that state-specific municipal bond funds may outperform
as a result of increased demand.
INVESTMENT STRATEGY
As we discussed in our last letter, the market decline of 1994 provided a
unique opportunity to restructure the Portfolios to potentially profit from
longer-term economic and municipal market trends. Specifically, the Portfolios
were repositioned to prepare for a gradual decline in both interest rates and
the issuance of municipal securities. Bonds with unfavorable early redemption
provisions were sold in favor of securities with more call protection and more
total return potential (as opposed to just current income) than the bonds that
were sold. Also, our practice of staying fully invested in higher yielding,
long-term bonds has resulted in the Portfolios gaining maximum benefit from
favorable market conditions this year. More recently we have been investing in
securities we consider undervalued while taking gains in bonds that have
recently outperformed the market, such as those issued by the new Denver
International Airport. In summary, the Portfolios' past performance combined
with current market conditions have afforded us the opportunity to selectively
purchase undervalued municipal bonds while gradually taking gains in bonds that
have appreciated fully in price.
MARKET OUTLOOK
The issue of tax reform will certainly be debated throughout the 1996
presidential election year. This will create market uncertainty, but we believe
that overall a hospitable environment for municipal bond investors will prevail
and that any market volatility will give us an opportunity to add value to the
Portfolios. Supply and demand technicals will provide some stability as a
record number of bonds will be called or mature in 1996. Furthermore, we expect
there is a strong possibility that legislation will be passed reducing the
capital gains tax rate, thus stimulating longer-term investing. Should
discussions on tax reform be resolved sooner rather than later, or if equity
markets were to decline significantly, we would expect very strong inflows of
new money into the municipal market. Notwithstanding the uncertainties of an
election year, we believe that the Fund is well positioned as we enter 1996.
We appreciate your investment in Alliance Municipal Income Fund and look
forward to reporting to you again in the coming period.
Sincerely,
John D. Carifa
Chairman and President
Susan P. Keenan
Senior Vice President
2
INVESTMENT RESULTS
AS OF OCTOBER 31, 1995 ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNSEQUIVALENT
------------------------------------------------------- TAXABLE
WITHOUT SALES CHARGE WITH SALES CHARGE EQUIVALENT
---------------------------- -------------------------- 30-DAY YIELD IN 36%
1 5 SINCE 1 5 SINCE SEC TAX BRACKET+
YEAR YEARS INCEPTION* YEAR YEARS INCEPTION* YIELD+ (AT NAV)
------- ------ ---------- ------- ------ ---------- ------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NATIONAL PORTFOLIO
Class A Shares +17.73% +9.04% +8.34% +12.70% +8.10% +7.81% 5.31% 8.65%
Class B Shares +16.91 N/A +6.15 +13.91 N/A +5.83 4.83 7.61
Class C Shares +16.93 N/A +5.15 +16.93 N/A +5.15 4.84 7.63
INSURED NATIONAL
PORTFOLIO
Class A Shares +18.72% +8.71% +7.81% +13.65% +7.76% +7.28% 4.71% 8.03%
Class B Shares +17.91 N/A +6.13 +14.91 N/A +5.81 4.21 7.01
Class C Shares +17.91 N/A +4.99 +17.91 N/A +4.99 4.22 7.01
NEW YORK PORTFOLIO
Class A Shares +17.10% +8.73% +7.20% +12.08% +7.79% +6.67% 5.47% 8.88%
Class B Shares +16.19 N/A +5.42 +13.19 N/A +5.09 5.01 7.72
Class C Shares +16.19 N/A +4.19 +16.19 N/A +4.19 5.02 7.72
CALIFORNIA PORTFOLIO
Class A Shares +17.55% +8.45% +8.10% +12.53% +7.50% +7.56% 5.53% 8.74%
Class B Shares +16.64 N/A +6.09 +13.64 N/A +5.77 5.07 7.59
Class C Shares +16.64 N/A +5.06 +16.64 N/A +5.06 5.07 7.59
INSURED CALIFORNIA
PORTFOLIO
Class A Shares +19.29% +8.37% +8.09% +14.25% +7.43% +7.62% 4.91% 7.94%
Class B Shares +18.35 N/A +5.74 +15.35 N/A +5.42 4.42 6.76
Class C Shares +18.35 N/A +4.61 +18.35 N/A +4.61 4.43 6.76
</TABLE>
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 for Class B (3% year 1, 2% year 2, 1% year 3, 0% year 4); 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 October 31, 1995.
3
ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
ALLIANCE MUNICIPAL INCOME FUND
GROWTH OF A $10,000 INVESTMENT
NATIONAL PORTFOLIO
12/31/86 TO 10/31/95
NATIONAL PORTFOLIO CLASS A $19,439
$21,500
$19,000
$16,500
$14,000
$11,500
$9,000
12/31/86 10/31/95
National Portfolio
LB Long Municipal Bond Index
Lipper General Municipal Debt
Funds Average
INSURED NATIONAL PORTFOLIO
12/31/86 TO 10/31/95
INSURED NATIONAL PORTFOLIO CLASS A $18,610
$21,500
$19,000
$16,500
$14,000
$11,500
$9,000
12/31/86 10/31/95
Insured National Portfolio
LB Long Municipal Bond Index
Lipper Insured Municipal Debt Funds Average
NEW YORK PORTFOLIO
12/31/86 TO 10/31/95
NEW YORK PORTFOLIO CLASS A $17,698
$21,500
$19,000
$16,500
$14,000
$11,500
$9,000
12/31/86 10/31/95
New York Portfolio
LB Long Municipal Bond Index
Lipper New York Municipal Debt Funds Average
4
ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
ALLIANCE MUNICIPAL INCOME FUND
$10,000 INVESTMENT OVER LIFE OF FUND
CALIFORNIA PORTFOLIO
12/31/86 TO 10/31/95
CALIFORNIA PORTFOLIO CLASS A $19,049
$21,500
$19,000
$16,500
$14,000
$11,500
$9,000
12/31/86 10/31/95
California Portfolio
LB Long Municipal Bond Index
Lipper California Municipal Debt Funds Average
INSURED CALIFORNIA PORTFOLIO
11/30/85 TO 10/31/95
INSURED CALIFORNIA PORTFOLIO CLASS A $20,741
$26,500
$24,000
$21,500
$19,000
$16,500
$14,000
$11,500
$9,000
11/30/85 10/31/95
Insured California Portfolio
LB Long Municipal Bond Index
Lipper Insured California Municipal Debt Funds Average
These charts illustrate the total value of assumed $10,000 investments in each
of Alliance Municipal Income Fund's Portfolios' Class A shares (since
inception), after deducting the maximum 4.25% sales charge, and with dividends
and capital gains reinvested. Performance for Class B and Class C shares will
vary from the results shown above due to differences in expenses charged to
those classes. Results should not be considered representative of future gain
or loss in capital value or dividend income.
The Lehman Brothers Long Municipal Bond Index includes 15,000 issues with
maturities exceeding 22 years. The bonds in this Index are a combination of
both revenue and general obligation issues, and carry a rating of BAA/Baa or
higher.
The Lipper General Municipal Debt Funds index reflects performance of 230
funds; the Lipper Insured Municipal Debt Funds Average reflects performance of
45 funds; the Lipper New York Municipal Debt Funds Average reflects performance
of 89 funds; the Lipper California Municipal Debt Funds Average reflects
performance of 99 funds; the Lipper Insured California Municipal Debt Funds
Average reflects performance of 26 funds. The funds tracked by Lipper
Analytical Services have generally similar investment objectives to the
applicable Alliance Municipal Income Fund Portfolio, though some of the funds
may have somewhat different investment policies.
When comparing an Alliance Municipal Income Fund Portfolio to the bond market
index shown above, you should note that the Portfolios' performance reflects
the maximum sales charge of 4.25%, while no such charges are reflected in the
performance of the index. Sales charges, where applicable, have been deducted
from the funds included in the averages.
5
NATIONAL PORTFOLIO
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1995 ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS+ (000) VALUE
- ---------------------------------------------------------------------------
MUNICIPAL BONDS-99.6%
LONG TERM MUNICIPAL BONDS-99.0%
ALASKA-0.9%
AAA Alaska International Arpt
MBIA Ser 1 AMT
5.50%, 10/01/15 $ 6,500 $ 6,271,070
ARIZONA-3.5%
AAA Mohave Cnty IDA
Util Rev (Citizen's Util) Ser 93B AMT
5.80%, 11/15/28 2,000 1,982,500
AA Mohave Cnty IDA
(Cargill/No Star Steel Proj) Ser 95A AMT
6.70%, 3/01/20 10,240 10,821,939
BBB Navajo Cnty PCR
(Arizona Pub Serv) Ser A
5.875%, 8/15/28 3,640 3,504,119
AA+ Phoenix Civic Plaza
Bldg Corp Ser 94 (Senior Lien Excise Tax)
6.00%, 7/01/12 3,720 3,874,268
AA Phoenix IDA
MFHR (Woodstone & Silver Springs)
6.25%, 4/01/23 2,715 2,751,381
AA Salt River Proj
(Agri Imp & Pwr Dist Elec Sys)
5.75%, 1/01/19 1,700 1,700,714
24,634,921
CALIFORNIA-14.8%
A+ California HFA
MFHR (Multi-Unit Rental Hsg) Ser 92A AMT
6.50%, 2/01/14 4,865 4,976,214
A California Poll Ctl Fin Auth
PCR (Pacific Gas & Elec) Ser 92A AMT
6.625%, 6/01/09 5,350 5,740,710
A California Poll Ctl Fin Auth
PCR (Pacific Gas & Elec) Ser 93A AMT
5.875%, 6/01/23 48,345 47,024,215
A+ California Poll Ctl Fin Auth
PCR (San Diego Gas & Elec) Ser 93A-C AMT
5.85%, 6/01/21 35,335 35,147,371
AA- Long Beach Harbor Rev
Ser 93 AMT
5.125%, 5/15/18 12,000 10,848,600
103,737,110
COLORADO-9.7%
NR Arapahoe Cnty
Public Highway Auth
7.00%, 8/31/26 7,000 7,394,310
AAA Denver City & Cnty
(Arpt System Rev) MBIA Ser 91D AMT
Zero coupon, 11/15/04 13,140 8,242,328
7.75%, 11/15/21 17,435 19,821,503
AAA Denver City & Cnty
(Arpt System Rev) MBIA Ser 92B AMT
7.25%, 11/15/23 6,375 7,105,320
AAA Denver City & Cnty
(Arpt System Rev) Ser 91A AMT
Zero coupon, 11/15/02 7,015 4,929,370
BB Denver City & Cnty
Arpt Auth (United Airlines) Ser 92A AMT
6.875%, 10/01/32 20,000 20,310,600
67,803,431
DISTRICT OF COLUMBIA-0.7%
AAA Metro Wash Arpt Auth
Arpt Rev MBIA Ser 94A AMT
5.75%, 10/01/20 4,835 4,734,480
FLORIDA-5.8%
AAA Dade Cnty Arpt Rev
(Miami Int'l Arpt) MBIA Ser 95B AMT
6.00%, 10/01/24 5,650 5,716,783
BBB Escambia Cnty PCR
(Champion Int'l Corp) Ser 94
6.90%, 8/01/22 2,020 2,137,564
AAA Florida HFA
SFMR (Home Mtg) Ser 95A AMT
6.65%, 7/01/24 4,300 4,492,511
AAA Florida HFA
SFMR (Mtg Hsg Fin Agy Rev) Ser 94B AMT
6.65%, 7/01/26 4,855 5,065,367
6
ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS+ (000) VALUE
- ---------------------------------------------------------------------------
AAA Hillsborough Cnty Aviation
Arpt Rev (Tampa Int'l) FGIC Ser 93D AMT
5.40%, 10/01/13 $ 2,960 $ 2,860,958
BBB+ Lake Cnty Res Rec
(NRG Recovery Grp) Ser 93A AMT
5.95%, 10/01/13 1,750 1,677,428
AA- Orlando Util Comm
(Wtr & Elec Sub Rev) Ser 93B
5.60%, 10/01/17 (a) 18,900 18,633,888
40,584,499
GEORGIA-4.8%
AAA Atlanta Arpt Facilities Rev
MBIA AMT
Zero coupon, 1/01/10 75,535 33,705,983
INDIANA4.3%
AAA Indiana Dev Fin Auth
PCR (PSI Energy) MBIA Ser 93B AMT
5.75%, 2/15/28 11,245 11,243,875
AAA Indianapolis Arpt, Port & Marina
AMT MBIA
5.875%, 1/01/13 6,000 6,035,280
AA Warrick Cnty
PCR (So Indiana Gas & Elec Co) Ser 93B AMT
6.00%, 5/01/23 12,290 12,458,496
29,737,651
MARYLAND-0.2%
NR Maryland Ind Dev Fin Auth Eco Dev
(Med Waste Assoc) Ser 89 AMT
8.75%, 11/15/10 1,475 1,545,092
MASSACHUSETTS-3.1%
A+ Massachusetts Bay Trans Auth
Ser 92C
6.10%, 3/01/23 1,990 2,032,745
AAA Massachusetts Ed Fin Auth
Education Loan Rev AMBAC Ser 94E AMT
6.00%, 1/01/12 4,730 4,755,400
A+ Massachusetts HFA
SFMR Ser 40 AMT
6.65%, 12/01/27 8,770 8,932,333
AA- Massachusetts Wtr Pollution Abatement
(South Essex Prog) Ser 94A
6.375%, 2/01/15 2,735 2,882,964
A Massachusetts Wtr Res Auth
Ser 92B
5.50%, 11/01/15 3,460 3,365,957
21,969,399
MICHIGAN-4.5%
AAA Detroit Eco Dev Ctr
Res Rec Rev FSA Ser 91A AMT
6.875%, 5/01/09 3,765 4,041,200
BBB Detroit GO
Ser 93
6.35%, 4/01/14 2,970 2,986,484
AAA Kent Cnty GO Arpt Rev
(Kent Cnty Int'l) Ser 95 AMT
6.10%, 1/01/25 4,480 4,559,386
A1* Michigan Hosp Fin Auth Hosp Rev
(Crittenton Hosp) Ser 93A
5.25%, 3/01/14 4,420 3,994,884
A Michigan Hosp Fin Auth Hosp Rev
(Detroit Med Ctr) Ser 93B
5.50%, 8/15/23 5,250 4,791,203
A+ Michigan HDA
MFHR (Rental Hsg) Ser 94B
5.80%, 4/01/19 2,000 1,942,560
AA Michigan Muni Bond Auth
Revolving Fund Ser 93
5.40%, 10/01/14 4,460 4,356,483
AAA Wayne Cnty Arpt Rev
(Detroit Metro) MBIA AMT
5.50%, 12/01/21 5,000 4,728,800
31,401,000
7
NATIONAL PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS+ (000) VALUE
- ---------------------------------------------------------------------------
MINNESOTA-3.2%
A- Bass Brook PCR
(Minnesota Pwr & Light)
6.00%, 7/01/22 $ 1,400 $ 1,379,714
AA+ Duluth GO
Arpt Lease Rev Ser 95C AMT
6.25%, 8/01/14 4,200 4,370,436
A2* Fairbault GO
(Ind Sch Dist #656)
6.20%, 6/01/12 1,730 1,804,615
AAA Minneapolis GO
SFMR (Home Ownership/Renovation)
Ser 93 Stage III AMT
5.70%, 12/01/23 5,375 5,087,437
AA+ Minnesota Hsg Fin
Home Mortgage Ser 93-C2 AMT
6.15%, 7/01/23 2,530 2,523,043
AA+ Rochester Hosp Rev
(Mayo Med Ctr) Ser D
6.25%, 11/15/21 1,300 1,349,894
BBB- South St Paul Hosp Rev
(Hlth East Proj) Ser 94
6.75%, 11/01/09 800 831,456
A+ Southern Minnesota Muni Pwr Auth
Pwr Supply System Ser 92A
5.75%, 1/01/18 2,870 2,855,506
A Western Minnesota Muni Pwr Auth
Ser 87A
5.50%, 1/01/15 2,190 2,116,854
22,318,955
NEBRASKA-1.6%
A Nebraska Higher Ed
Student Loan Rev Ser 93B AMT
5.875%, 6/01/14 11,705 11,477,572
NEW JERSEY-2.4%
AAA New Jersey Eco Dev Auth
(Public Svc Elec & Gas) PCR
MBIA Ser 94A AMT
6.40%, 5/01/32 5,000 5,229,350
AAA New Jersey Eco Dev Auth
Wtr Fac (American Wtr Co.) FGIC AMT
5.95%, 11/01/29 $5,000 $4,999,950
AAA New Jersey Eco Dev Auth
Wtr Fac (Hackensack Wtr) MBIA Ser 94B AMT
5.90%, 3/01/24 1,850 1,854,070
BBB New Jersey Hlth Care Fac Fin Auth Hosp Rev
(Englewood Hosp & Med Ctr) Ser 94
6.75%, 7/01/24 1,000 1,029,740
A+ New Jersey Hsg & Mtg Fin Agy MFHR
Ser 1 Section 8
6.70%, 11/01/28 1,500 1,566,855
AAA New Jersey Hsg & Mtg Fin Agy Rev
SFMR (Home Buyer Rev) MBIA AMT
6.35%, 10/01/27 1,800 1,829,952
16,509,917
NEW YORK-9.7%
BBB+ New York City GO
Ser 93A
6.25%, 8/01/18 6,000 6,047,460
BBB+ New York City GO
Ser 95B
7.25%, 8/15/19 6,000 6,485,700
BBB+ New York City GO
Ser 95F
6.625%, 2/15/14 10,000 10,397,700
AAA Niagara Frontier Trans Auth Arpt Rev
(Gtr Buffalo Int'l) AMBAC Ser 94A AMT
6.25%, 4/01/24 1,500 1,549,725
AAA NYS Energy Res & Dev Auth Gas Fac
(Brooklyn Union Gas) MBIA AMT
5.60%, 6/01/25 4,000 3,849,000
AAA NYS Energy Res & Dev Auth Gas Fac
(Brooklyn Union Gas) MBIA Ser 91D AMT
5.635%, 7/08/26 (a) 6,000 5,697,900
8
ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS+ (000) VALUE
- ---------------------------------------------------------------------------
AAA NYS Energy Res & Dev Auth Solid Waste
(NYS Elec & Gas) MBIA Ser 93A AMT
5.70%, 12/01/28 $25,050 $24,287,979
BBB NYS Envir Fac Auth IDR
(Occidental Petroleum) Ser 93A AMT
5.70%, 9/01/28 2,450 2,253,192
Aa* NYS Mtg Agy Rev
(Homeowner Mtg) Ser 30-C1 AMT
5.85%, 10/01/25 5,150 4,932,670
AAA Port Auth of NY & NJ
Cons (96th Ser) FGIC AMT
6.60%, 10/01/23 2,250 2,388,847
67,890,173
OHIO-5.6%
Aaa* Cincinnati Student Loan Funding Corp
Ser 86A AMT
5.50%, 12/01/01 3,000 3,057,180
AAA Cleveland Arpt Rev
(Cleveland Int'l) FGIC Ser 94A
6.25%, 1/01/20 7,800 8,065,824
AAA Columbus Arpt Rev
(PT Columbus Int'l) MBIA Ser 94A
6.25%, 1/01/24 4,000 4,139,440
A Cuyahoga Cnty Hosp Rev
(Meridia Hlth Sys) Ser 95
6.25%, 8/15/24 2,500 2,584,000
AAA Ohio Air Quality Dev Auth
(JMG Funding/Ohio Pwr Co) AMBAC Ser 94B AMT
6.375%, 4/01/29 7,850 8,172,007
Baa3* Ohio Air Quality Dev Auth
PCR (Columbus So Pwr) Ser 85B
6.25%, 12/01/20 1,000 1,008,860
AA- Ohio Air Quality Dev Auth
PCR (Dayton Power & Light Proj) Ser 92B
6.40%, 8/15/27 1,900 1,989,357
AA- Ohio Turnpike Commission Turnpike Rev
Ser 94A
5.75%, 2/15/24 5,000 5,014,850
Aa3* Toledo-Lucas Cnty
Port Auth (Cargill Inc. Proj)
5.90%, 12/01/15 5,000 5,054,350
39,085,868
PENNSYLVANIA-3.2%
AAA Allegheny Cnty Arpt Rev
(Gtr Pittsburgh Int'l) FGICSer 92B AMT
6.625%, 1/01/22 2,500 2,617,450
A Allegheny Cnty Hosp Rev
(St. Francis) FHA Ser 88
8.25%, 8/01/28 3,505 3,844,074
AAA Pennsylvania Higher Ed Student Loan Rev
Ser 88D AMT
AMBAC 6.05%, 1/01/19 5,435 5,521,851
AA Pennsylvania Hsg Fin Agy
SFMR (Home Mortgage) Ser 94-41B AMT
6.65%, 4/01/25 3,000 3,095,220
AAA Philadelphia Aprt Sys Rev
Ser 95A AMT
6.10%, 6/15/25 7,400 7,516,328
22,594,923
RHODE ISLAND-2.6%
AA+ Rhode Island Hsg & Mtg Fin Corp
SFMR ( Home Ownership) Ser 91-8
9.987%, 4/01/24 7,000 7,657,370
AA+ Rhode Island Hsg & Mtg Fin Corp
SFMR (Home Ownership) Ser 92-7A AMT
6.75%, 10/01/25 10,000 10,254,600
17,911,970
SOUTH DAKOTA-1.6%
AA+ South Dakota HDA
(Home Ownership) Ser 91D AMT
6.25%, 5/01/26 1,440 1,446,120
9
NATIONAL PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS+ (000) VALUE
- ---------------------------------------------------------------------------
AA+ South Dakota HDA
SFMR (Home Ownership Mtg) Ser 93II AMT
6.15%, 5/01/26 $ 9,600 $ 9,547,488
10,993,608
TENNESSEE-1.8%
BBB Memphis Shelby Cnty Spec Fac
(Federal Express) Ser 93 AMT
6.20%, 7/01/14 8,000 8,103,520
A* Volunteer Student Funding
Educational Loan Rev
Ser 93C AMT
5.85%, 12/01/08 4,100 4,151,578
12,255,098
TEXAS-6.1%
BB+ Alliance Arpt Auth Fac Imp
(American Airlines) Ser 90 AMT
7.50%, 12/01/29 21,690 22,966,240
BB+ Dallas-Ft. Worth Arpt Fac Imp
(American Airlines) AMT
7.25%, 11/01/30 3,715 3,902,496
BB+ Dallas-Ft. Worth Arpt Fac Imp
(American Airlines) Ser 90 AMT
7.50%, 11/01/25 15,000 15,941,250
42,809,986
UTAH-2.1%
AAA Emery Cnty
PCR (Pacific Project) AMBAC AMT
5.625%, 11/01/23 11,400 10,912,764
Aaa* Utah Board of Regents
Student Loan Rev Ser 93 AMT
5.90%, 11/01/13 3,600 3,552,876
14,465,640
VIRGINIA-4.2%
A- Hampton Museum Rev
Ser 94
5.25%, 1/01/14 2,320 2,205,160
AA Henrico Cnty IDR
(Henrico Cnty Reg Jail)
7.125%, 8/01/21 3,730 4,293,454
A- Isle of Wight Cnty IDA
Solid Waste (Union Camp Corp) Ser 94 AMT
6.55%, 4/01/24 3,845 4,009,720
BBB+ Peninsula Port Auth Hlth Fac
(Mary Immaculate Proj) Ser 94
7.00%, 8/01/17 1,850 1,949,733
A1* Prince William Cnty IDA
Hosp Rev (Potomac Hosp Grp)
6.75%, 10/01/15 1,910 2,005,615
AA Richmond GO
6.25%, 1/15/21 1,060 1,078,285
AAA Richmond Redev & Hsg Auth
MFHR (Jefferson)
6.50%, 4/01/27 3,250 3,250,000
AA Virginia Beach Hlth Care
Hosp Rev (Sentara Bayside)
6.30%, 11/01/21 1,000 1,030,970
A* Virginia Ed Loan Auth
(Student Loan Prog) Ser 93G AMT
6.15%, 9/01/09 3,340 3,363,180
AA+ Virginia HDA
SFMR (Commonwealth Mtg) Ser 93G AMT
5.35%, 7/01/16 5,490 5,045,749
AA Virginia Res Auth Swr Rev
(Hopewell Fac) Ser 95A AMT
6.00%, 10/01/25 1,355 1,371,016
29,602,882
WASHINGTON-2.6%
BBB Pierce Cnty Eco Dev
PCR (Occidental Petroleum) Ser 93 AMT
5.80%, 9/01/29 6,755 6,170,220
10
ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS+ (000) VALUE
- ---------------------------------------------------------------------------
BBB Pilchuck Dev Pub Corp.Spec Fac
(BF Goodrich) Ser 93 AMT
6.00%, 8/01/23 $12,250 $11,707,815
17,878,035
Total Long Term Municipal Bonds
(cost $661,169,907) 691,919,263
SHORT TERM MUNICIPAL NOTES-0.6%
NEW YORK-0.1%
AAA New York City Mun Wtr Fin Auth
Wtr & Swr Sys Rev FGIC Ser 94C VRDN
4.00%, 6/15/23 500 500,000
OREGON-0.4%
A-1* Port Morrow
(Portland General Elec)
VRDN LOC: The Industrial Bank of Japan
4.05%, 10/01/13 $3,000 $3,000,000
TEXAS-0.1%
A-1+* Gulf Coast Waste Disp Auth
(Amoco Oil Co. Proj) Ser 94 AMT VRDN
4.05%, 8/01/23 (b) 500 500,000
Total Short Term Municipal Notes
(cost $4,000,000) 4,000,000
TOTAL INVESTMENTS-99.6%
(cost $665,169,907) 695,919,263
Other assets less liabilities-0.4% 2,816,814
NET ASSETS-100% $698,736,077
+ Unaudited.
* Moody's or Fitch Rating.
(a) Inverse floater security-the interest rate is subject to change
periodically.
Airport Revenue Bonds represent 28% of net assets at October 31, 1995.
See Glossary of Terms on page 21.
See notes to financial statements.
11
INSURED NATIONAL PORTFOLIO
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1995 ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS+ (000) VALUE
- ---------------------------------------------------------------------------
MUNICIPAL BONDS-98.7%
ALABAMA-7.8%
AAA West Jefferson PCR
(Alabama Power) MBIA Ser 93C
6.05%, 5/01/23 $19,000 $19,185,440
ARIZONA-5.9%
AAA Maricopa Cnty GO
Chandler Sch Imp #80 FGIC Ser 95
6.00%, 7/01/13 1,215 1,247,708
AAA Maricopa Cnty GO
Kyrene Elem Sch Imp #28 FGIC Ser 95B
6.00%, 7/01/14 1,715 1,751,975
AAA Maricopa Cnty GO
Sch Dist #28 FGIC Ser 93C
Zero coupon, 7/01/11 6,000 2,530,200
AAA Maricopa Cnty Hlth Fac
(Samaritan Hlth) MBIA Ser 90A
7.00%, 12/01/13 335 364,711
AAA Pima Cnty Hosp
(Tucson Med Ctr) MBIA Ser 93A
5.00%, 4/01/15 1,185 1,093,518
AAA Tempe IDR
(Mtg-Quadrangles) FHA
6.25%, 6/01/26 4,865 4,913,504
AAA Tucson GO FGIC
Zero coupon, 7/01/13 3,800 1,410,712
AAA Yavapai Cnty
Humboldt Sch Imp #22 FGIC Ser 95A
5.95%, 7/01/14 1,210 1,246,845
14,559,173
CALIFORNIA-7.3%
Aa* California Statewide Comm Dev Hosp
(Cedars-Sinai Med Ctr) Ser 93
5.40%, 11/01/15 12,500 11,841,875
AAA Northern Calif Trans Agy Elec Rev
(Calif-Oregon Trans) MBIA Ser 93A
6.062%, 4/29/24 (a) 6,550 6,097,460
17,939,335
COLORADO-2.5%
AAA Denver City & Cnty Arpt System Rev
MBIA Ser 95A
5.70%, 11/15/25 6,375 6,284,603
FLORIDA-2.2%
AAA Florida Trpk Auth Rev
Ser 95A
5.625%, 7/01/25 1,800 1,783,170
Aaa* Venice Hlth Fac
(Venice Hosp) Ser 94 Pre-refunded
6.00%, 12/01/14 3,350 3,673,376
5,456,546
ILLINOIS-3.3%
AAA Illinois Health Fac Auth Hosp Rev
(Alexian Brothers) FSA Ser 90
7.125%, 1/01/21 4,860 5,229,020
AAA Metro Pier & Expo Auth
(McCormick Place Expo) FGIC Ser 93A
Zero coupon, 6/15/19 12,150 2,973,348
8,202,368
MARYLAND-3.2%
AAA Baltimore Cnty MFHR
(Dunfield Township Proj) FHA Ser 92A
6.90%, 8/01/28 7,500 7,848,075
MASSACHUSETTS-18.8%
AAA Chelsea GO
AMBAC
6.00%, 6/15/14 1,965 2,009,743
AAA Essex Cnty
(South Essex Swr Dist) MBIA Ser 94B
7.00%, 6/01/24 2,435 2,735,722
AAA Holyoke GO
FSA Ser B
6.125%, 8/01/13 1,195 1,241,497
AAA Lowell GO
FSA Ser 93A
5.50%, 1/15/10 3,735 3,680,432
AAA Massachusetts GO
MBIA Ser 95A
5.75%, 2/01/15 4,715 4,753,333
12
ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS+ (000) VALUE
- ---------------------------------------------------------------------------
AAA Massachusetts HFA
MFHR (Residential Dev) AMBAC Ser 93A
6.15%, 10/01/15 $ 9,220 $ 9,265,086
AAA Massachusetts HFA
MFHR (Residential Dev) FNMA Ser 92F
6.25%, 11/15/12 5,000 5,142,150
AAA Massachusetts HFA
SFMR (Residential Dev) FNMA Ser 92
6.90%, 11/15/24 2,500 2,641,650
AAA Massachusetts Hlth & Ed Fac Auth Rev
(New England Med Ctr) MBIA Ser D
5.38%, 7/01/18 9,770 9,214,185
AAA Massachusetts Muni Wholesale
(Elec Pwr Supply Sys) MBIA Ser 92A
6.00%, 7/01/18 5,675 5,764,608
46,448,406
MICHIGAN-18.2%
AAA Brighton GO AMBAC
Area Sch Dist Ser 92II
Zero coupon, 5/01/20 5,000 1,217,800
AAA Detroit Swr Disp Rev Sys
FGIC Ser 93A
5.70%, 7/01/23 (a) 17,850 17,531,556
AAA Grand Rapids Swr Sys Rev
MBIA
6.00%, 1/01/22 2,500 2,527,050
AAA Kalamazoo Hosp Fin Auth Hosp Rev
(Borgess Med Ctr) FGIC Ser 94A
5.244%, 6/01/11 15,000 14,500,350
AAA Lowell Area Schools GO
FGIC
Zero coupon, 5/01/19 5,050 1,291,133
AAA Michigan Hosp Fin Auth Hosp Rev
(St. John's Hospital) AMBAC Ser A
6.00%, 5/15/13 480 492,240
AAA Michigan Strategic Fund PCR
(Detroit Edison Co.) MBIA Ser 95A
6.40%, 9/01/25 5,000 5,249,300
AAA Yale Pub Sch Dist GO
AMBAC
5.50%, 5/01/23 2,150 2,067,569
44,876,998
MINNESOTA-5.7%
AAA Buffalo Hanover Montrose GO
(Ind Sch Dist #877) CGIC Ser 94
6.15%, 2/01/22 2,500 2,571,700
AAA Burnsville-Eagan-Savage GO
(Ind Sch Dist #191) CGIC Ser 95A
6.20%, 2/01/17 1,400 1,464,960
AAA Lakeville GO
(Ind Sch Dist #194) FGIC
5.60%, 2/01/18 3,710 3,709,629
AAA Minnesota Pub Fac Auth
(Wtr Poll Ctr Rev) Ser 95A
6.25%, 3/01/15 1,225 1,309,660
AAA No Minnesota Muni Pwr Agy
AMBAC Ser 92B
5.50%, 1/01/18 1,200 1,186,272
AAA Robbinsdale Hosp Rev
(No Memorial Med Ctr) AMBAC Ser 93A
5.45%, 5/15/13 2,500 2,452,925
AAA St. Francis GO
(Ind Sch Dist #15) CGIC Ser 95A
6.375%, 2/01/16 1,200 1,279,332
13,974,478
NEBRASKA-1.4%
AAA Nebraska Inv Fin Auth Hosp Rev
(Bishop Clarkson Mem) MBIA Ser 91
9.141%, 12/08/16 (a) 3,000 3,324,120
13
INSURED NATIONAL PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS+ (000) VALUE
- ---------------------------------------------------------------------------
NEW JERSEY-4.2%
AAA Burlington Cnty Wtr Rev
(Evesham Muni Util Auth) MBIA
5.60%, 7/01/15 $ 3,750 $ 3,752,438
AAA Passaic Valley Swr Comm
Ser 92D AMBAC
5.75%, 12/01/15 3,400 3,438,114
AAA Vineyard Swr Rev
(Landis Sewage Auth) FGIC Ser 93C
5.65%, 9/19/19 3,100 3,089,305
10,279,857
OHIO-3.9%
AAA Clermont Cnty Wtr Sys Rev
(Clermont Cnty Swr) AMBAC Ser 93
5.70%, 12/01/13 2,750 2,780,965
AAA Hamilton Cnty Swr Rev
(Met Swr Gtr Cincinnati) FGIC Ser 93A
5.25%, 12/01/16 2,000 1,913,920
AAA Lucas Cnty Hosp Rev
(St. Vincent Med Ctr) MBIA
5.45%, 8/15/14 2,650 2,570,977
AAA Ohio Muni Generating Auth
(Belleville Hydro Elec) AMBAC
5.375%, 2/15/13 2,500 2,462,450
9,728,312
PENNSYLVANIA-5.5%
AAA Berks Cnty
Swr Rev (Exeter Twp) MBIA Ser 93
6.20%, 7/15/22 8,495 8,737,447
AAA Butler Cnty Hosp Rev
(Butler Mem Hosp)
Ser 93A FSA
5.25%, 7/01/12 2,500 2,377,225
AAA Pennsylvania Intergov Coop Auth
Special Tax Rev FGIC Ser 94
7.00%, 6/15/14 2,200 2,429,878
13,544,550
TEXAS-2.7%
AAA Amarillo Hosp Rev
(High Plains Baptist) FSA Ser 92B
6.562%, 1/03/22 (a) 6,400 6,660,928
VIRGINIA-3.3%
AAA Chesapeake Bay Bridge & Tunnel Auth
MBIA
5.75%, 7/01/25 1,465 1,460,722
AAA Loudoun Cnty IDA
(Loudoun Hosp Ctr) FSA
5.80%, 6/01/20 2,340 2,343,767
AAA Richmond Met Auth
(Expressway Revenue) FGIC Ser. B
6.25%, 7/15/22 1,000 1,032,360
AA Virginia College Bldg Auth Ed Fac Rev
(Washington & Lee Univ)
5.80%, 1/01/24 3,350 3,408,860
8,245,709
WEST VIRGINIA-2.8%
AAA West Virginia Eco Dev
Pkwy Auth Rev Ser 93 FGIC
5.831%, 5/16/19 7,000 7,015,470
TOTAL INVESTMENTS-98.7%
(cost $231,900,997) 243,574,368
Other assets less liabilities-1.3% 3,229,267
NET ASSETS-100% $246,803,635
+ Unaudited.
* 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.
14
NEW YORK PORTFOLIO
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1995 ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS+ (000) VALUE
- ---------------------------------------------------------------------------
NEW YORK MUNICIPAL BONDS-98.9%
Aaa* Cohoes IDR
(Norlite Corp Proj) Ser 92B AMT
LOC: Dresdner Bank
6.75%, 5/01/09 $ 8,500 $ 9,000,480
AAA Glen Cove IDR
(The Regency At Glen Cove) ETM Ser 92B
Zero coupon, 10/15/19 60,010 14,396,999
AAA Islip Res Rec Agy
AMBAC Ser 94B AMT
6.125%, 7/01/12 2,020 2,084,438
AAA Monroe Cnty Airport Auth
(Greater Rochester Int'l) MBIA Ser 93 AMT
5.50%, 1/01/13 4,450 4,362,513
BBB+ New York City GO
Ser 93D
6.00%, 8/01/14 9,750 9,721,822
7.702%, 8/29/14 (a) 10,000 9,961,300
BBB+ New York City GO
Ser 93E
6.00%, 5/15/11 10,000 9,920,000
BBB+ New York City GO
Series 95B
7.25%, 8/15/19 9,000 9,728,550
A2 New York City HDC
MFHR (So Williamsburg Coop) Ser 90A AMT
7.90%, 2/01/23 3,860 4,056,513
BB+ New York City IDR
(American Airlines) Ser 94 AMT
6.90%, 8/01/24 6,000 6,281,940
A New York City IDR
(Terminal One L.P.) Ser 94 AMT
6.125%, 1/01/24 21,500 21,199,645
AAA Niagara Frontier Trans Auth Arpt
(Gtr Buffalo Int'l) AMBAC Ser 94A AMT
6.25%, 4/01/24 14,625 15,109,819
A+ NYS Energy Res & Dev
(Consolidated Edison) Ser 94A AMT
7.125%, 12/01/29 27,000 29,877,660
AAA NYS Energy Res & Dev Auth PCR
(Brooklyn Union Gas) MBIA AMT
5.60%, 6/01/25 6,000 5,773,500
AAA NYS Energy Res & Dev Auth PCR
(Brooklyn Union Gas) MBIA Ser 89B AMT
6.75%, 2/01/24 7,500 7,972,875
AAA NYS Energy Res & Dev Auth PCR
(NYS Elec & Gas) MBIA Ser 87A AMT
6.15%, 7/01/26 15,000 15,260,850
AAA NYS Energy Res & Dev Auth PCR
(NYS Elec & Gas) MBIA Ser 88A AMT
5.95%, 12/01/27 11,700 11,760,840
AAA NYS Energy Res & Dev Auth PCR
(Rochester Gas & Elec) MBIA AMT
6.50%, 5/15/32 6,460 6,673,051
BBB NYS Envir Fac Auth IDR
(Occidental Petroleum) Ser 93A AMT
5.70%, 9/01/28 15,000 13,795,050
NR NYS Envir Fac Corp Wtr Fac
(Long Island Wtr Corp) Ser 87A AMT
10.00%, 10/01/17 3,200 3,466,560
AAA NYS Envir Fac Corp Wtr Fac
(Spring Valley Wtr) AMBAC Ser 94A AMT
6.30%, 8/01/24 11,800 12,179,724
AAA NYS HFA
MFHR (Erie/Monroe Cnty Proj)
AMBAC Ser 89B AMT
7.55%, 11/01/29 9,585 10,148,406
Aa* NYS HFA SONYMA
MFHR (Syracuse/Springville Proj) Ser 93A AMT
5.85%, 8/15/13 3,000 2,967,030
5.95%, 8/15/24 5,650 5,535,079
15
NEW YORK PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS+ (000) VALUE
- ---------------------------------------------------------------------------
Aa* NYS HFA SONYMA
MFHR (Westchester/Onondaga/Rock-land Proj)
Ser 92F AMT
6.70%, 8/15/25 $ 6,000 $ 6,208,560
Aa* NYS Mtg Agy
SFMR Homeowner Mtg Ser 42 AMT
6.65%, 4/01/26 4,500 4,650,300
Aa* NYS Mtg Agy
SFMR Homeowner Mtg Ser 46 AMT
6.65%, 10/01/25 19,995 20,602,248
AAA Onondaga Cnty PCR
(Bristol-Myers Squibb) AMT
5.75%, 3/02/24 8,000 8,203,280
AA- Port Auth of NY & NJ
Cons (95th Ser) AMT
6.125%, 7/15/29 7,000 7,100,660
AAA Port Auth of NY & NJ
Cons (96th Ser) FGIC AMT
6.60%, 10/01/23 7,750 8,228,252
Baa* St. Lawrence Cnty Res Rec
(Solid Waste Disposal) Ser 88 AMT
8.375%, 1/01/11 2,500 2,794,200
AAA Troy HDC
MFHR (Ninth St #2) FHA Ser 90B
8.10%, 2/01/24 3,535 3,991,227
AAA Troy HDC
MFHR FHA Ser 90C
8.10%, 2/01/24 3,820 4,297,615
TOTAL INVESTMENTS-98.9%
(cost $292,429,199) 307,310,986
Other assets less liabilities-1.1% 3,335,053
NET ASSETS-100% $310,646,039
+ Unaudited.
* 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
OCTOBER 31, 1995 ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS+ (000) VALUE
- ---------------------------------------------------------------------------
CALIFORNIA MUNICIPAL BONDS-98.8%
A+ California GO
(Veterans Hsg) Ser 95 AMT
6.40%, 2/01/20 $35,000 $35,565,950
A+ California HFA
MFHR (Multi-Unit Rental) Ser 93A AMT
5.60%, 8/01/25 12,000 11,210,880
AA- California HFA
SFMR (Home Mtg Rev) Ser 91G AMT
7.05%, 8/01/27 5,570 5,839,532
AA- California HFA
SFMR (Home Mtg Rev) Ser 93D AMT
5.75%, 8/01/22 10,500 9,924,810
5.85%, 2/01/23 7,920 7,586,806
AA- California HFA
SFMR (Home Mtg Rev) Ser 94H AMT
7.50%, 8/01/25 12,435 13,443,976
AAA California HFA
SFMR (Home Mtg Rev) Ser 95A-2 AMT
6.45%, 8/01/25 9,000 9,175,500
AA- California HFA
SFMR (Home Mtg Rev) Ser E AMT
6.70%, 8/01/25 10,000 10,423,900
A California Poll Ctl Fin Auth
Browning-Ferris Ind (Keller Canyon) AMT
6.875%, 11/01/27 5,000 5,258,100
A+ California Poll Ctl Fin Auth
Res Rec (West Cnty Res Rec) AMT
LOC:Union Bank
5.55%, 1/01/09 5,490 5,199,908
A California Poll Ctl Fin Auth PCR
(Pacific Gas & Elec) Ser 93B AMT
5.85%, 12/01/23 75,000 72,686,250
A+ California Poll Ctl Fin Auth PCR
(San Diego Gas & Elec) Ser 93A-C AMT
5.85%, 6/01/21 3,000 2,984,070
A+ California Poll Ctl Fin Auth PCR
(Southern Calif Edison) Ser 92B AMT
6.40%, 12/01/24 46,030 47,075,341
A1* California Statewide Comm Dev Hosp
(Cedars-Sinai Med Ctr) Ser 93
5.40%, 11/01/15 28,000 26,525,800
A+ Chula Vista PCR
(San Diego Gas & Electric) Ser 92A AMT
6.40%, 12/01/27 28,240 29,259,746
AAA Contra Costa Cnty
MFHR (Byron Park Proj) GNMA Ser 93A AMT
6.40%, 1/20/31 11,860 12,138,473
NR Fairfield Assess Dist
(No Cordelia Imp Dist) Ser 93
7.375%, 9/02/18 2,560 2,636,570
NR Fontana Redev Agy
(Jurupa Hills Proj) Ser 94
8.00%, 1/01/98 5,000 5,107,800
AAA Garden Grove
MFHR (Tudor Grove) GNMA Collat AMT
7.25%, 5/20/32 7,300 7,550,828
AA- Long Beach Harbor Rev
Ser 93 AMT
5.125%, 5/15/13 26,150 24,087,550
5.125%, 5/15/18 36,325 32,839,616
NR Los Angeles Cnty Comm Fac Dist #4
(Calabasas Area) Ser 92A
7.65%, 9/01/17 7,500 7,756,950
7.70%, 9/01/17 5,750 5,967,522
NR Los Angeles Cnty Comm Fac Dist #92-1
(Castaic Union SD Northlake Proj) Ser 92
9.00%, 10/01/19 8,710 9,060,316
BBB+ Los Angeles Comm Redev
MFHR (Grand Ctrl Proj) Ser 93A AMT
5.85%, 12/01/26 7,030 6,701,488
17
CALIFORNIA PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS+ (000) VALUE
- ---------------------------------------------------------------------------
AA Los Angeles Harbor Rev
Ser 95A AMT
6.625%, 8/01/25 $15,600 $16,460,184
AAA Northern Calif Trans Agy Elec Rev
(Calif-Oregon Trans) MBIA
5.50%, 4/29/24 15,000 14,293,950
NR Ontario Assess Dist #107
(CA Commerce Ctr So)
7.70%, 9/02/10 6,255 6,450,719
BBB-* Orange Cnty
Foothill/Eastern Trans Corridor Agy Ser 95A
Zero coupon, 1/01/15 18,500 5,042,730
AAA Orange Cnty Airport Rev
(John Wayne Int'l) MBIA Ser 93 AMT
5.50%, 7/01/13 11,000 10,473,980
5.50%, 7/01/18 16,500 15,406,215
A- Orange Cnty Airport Rev
(John Wayne Int'l) Ser 87 AMT
6.625%, 7/01/18 6,780 6,780,746
NR Orange Cnty Comm Fac Dist #87-2
(Portola Hills) Ser 91A
9.30%, 8/15/16 8,950 9,427,393
NR Orange Cnty Ltd Ob Assess Dist #88-1
(Irvine Coast Pelican Hill Proj) Ser 92A
8.25%, 9/02/18 3,990 4,090,229
BBB* Orange Cnty Sr Lien
San Joaquin Hills Transportation Corridor
Zero coupon, 1/01/17 16,000 3,983,200
Zero coupon, 1/01/18 29,400 6,853,728
Zero coupon, 1/01/19 20,000 4,365,800
Zero coupon, 1/01/20 20,000 4,069,200
Zero coupon, 1/01/21 20,000 3,809,600
Zero coupon, 1/01/22 50,000 8,962,000
Zero coupon, 1/01/23 35,000 5,843,600
Zero coupon, 1/01/25 33,100 4,843,854
7.00%, 1/01/30 15,000 15,593,700
AAA Palm Springs COP
Ser 91B ETM
Zero coupon, 4/15/21 50,575 10,431,600
AAA Palm Springs Fin Auth Airport Rev
(Palm Springs Regional) MBIA Ser 92 AMT
6.00%, 1/01/22 6,860 6,885,656
A- Placer Cnty
(Western Placer Waste Mgmt Auth) Ser 94 AMT
6.75%, 7/01/14 6,900 7,105,206
AAA Port of Oakland
MBIA Ser 92E AMT
6.40%, 11/01/22 23,370 24,275,354
6.50%, 11/01/16 11,000 11,580,910
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 3,887,072
NR Riverside Comm Fac Dist #90-1
(Highlander Proj) Ser 91A
8.50%, 9/01/15 3,000 3,198,570
NR Rocklin Spec Tax Comm Fac Dist #3
(Stanford Ranch) Ser 90
7.70%, 11/01/15 4,000 4,238,720
AAA Sacramento Cnty Airport Systems
FGIC Ser 92A AMT
6.00%, 7/01/20 11,750 11,756,697
NR Saddleback Valley Comm Fac Dist #89-1
(Robinson Ranch) Ser 91A
7.70%, 9/01/16 4,000 4,280,320
NR Salinas Assess Dist #90-1
(Harden Ranch) Ser A
6.875%, 9/02/11 5,735 5,698,755
AAA San Francisco City & Cnty Int'l Airport
AMBAC Ser 94 II-6 AMT
6.60%, 5/01/24 5,000 5,315,150
AAA San Francisco City & Cnty Int'l Airport
FGIC Ser 94 II-5 AMT
6.50%, 5/01/24 11,000 11,607,750
18
ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS+ (000) VALUE
- ---------------------------------------------------------------------------
AAA San Francisco City & Cnty Int'l Airport
MBIA Ser 93 II-3 AMT
6.10%, 5/01/13 $ 7,990 $ 8,168,896
6.20%, 5/01/20 14,500 14,770,425
AAA San Jose Airport FGIC Ser 93 AMT
5.625%, 3/01/13 6,480 6,328,821
5.70%, 3/01/18 8,825 8,564,045
NR San Marcos
Comm Fac Dist Ser 88-1
7.625%, 9/01/19 1,595 1,623,535
AAA Southern Calif HFA
SFMR Ser 91B AMT GNMA/FNMA Collat
6.90%, 10/01/24 1,665 1,751,747
AAA Southern Calif HFA
SFMR Ser 92A AMT GNMA/FNMA Collat
6.75%, 9/01/22 1,445 1,509,288
NR Tracy Pub Fac Fin Agy
Comm Fac Dist #87-1 Ser 89B
7.50%, 10/01/15 5,000 5,204,800
NR Tracy Pub Fac Fin Agy
Comm Fac Dist #87-1 Ser 92E
7.50%, 10/01/18 3,500 3,647,630
A+ Yolo Cnty Hsg Auth
MFHR (Waggener Ranch Apts) FHA Ser 91 AMT
7.00%, 10/01/33 9,000 9,615,870
TOTAL INVESTMENTS-98.8%
(cost $702,386,495) 724,205,327
Other assets less liabilities-1.2% 8,881,608
NET ASSETS-100% $733,086,935
+ Unaudited.
* 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.
19
INSURED CALIFORNIA PORTFOLIO
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1995 ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS+ (000) VALUE
- ---------------------------------------------------------------------------
CALIFORNIA MUNICIPAL BONDS-102.4%
LONG TERM MUNICIPAL BONDS-100.5%
AAA Alhambra COP
Assess Dist #91-1: Police Fac AMBAC Ser 92
6.75%, 9/01/23 $ 5,000 $ 5,357,100
AAA Brea Pub Fin Auth
Tax Alloc Redev Proj B MBIA Ser 91A
7.00%, 8/01/15 1,470 1,610,899
AAA California HFA
MFHR (Home Mtg Rev) AMBAC Ser 95A
6.25%, 2/01/37 5,000 4,992,000
Aa* California Statewide Comm Dev Hosp
(Cedars-Sinai Med Ctr) Ser 93
5.40%, 11/01/15 14,500 13,736,575
AAA Contra Costa Cnty
Sanitation Dist (Delta Diablo) MBIA
Zero coupon, 12/01/16 3,210 934,688
AAA Coronado Comm Dev Proj
Tax Alloc MBIA Ser 90
7.25%, 9/01/12 2,000 2,196,000
AAA Fairfield Cnty Pub Fin
Auth Tax Alloc (Fairfield Proj) CGIC Ser 93C
5.50%, 8/01/23 9,000 8,581,230
AAA Fontana Pub Fin Auth
Tax Alloc (Fontana Redev) MBIA Ser 93A
5.625%, 9/01/24 9,805 9,578,603
AAA Los Angeles Cnty
Met Trans Auth Ser 93A MBIA
5.625%, 7/01/18 8,000 7,933,520
AAA Los Angeles Cnty
Transportation Comm FGIC Ser 91B
6.50%, 7/01/15 5,000 5,248,150
AAA Los Angeles Cnty Community Redev Tax Alloc
(Bunker Hill Project) FSA Ser 93H
5.60%, 12/01/28 10,000 9,579,200
AAA Madera Cnty COP
Hosp Rev (Valley Childrens Hosp)
MBIA Ser 95
6.125%, 3/15/23 4,000 4,093,360
AAA Mt. Diablo School Dist
Comm Fac FGIC Ser 90
7.05%, 8/01/20 5,000 5,475,600
AAA Northern Calif Trans Agy Elec Rev
(Calif-Oregon Trans) MBIA
5.50%, 4/29/24 5,000 4,764,650
6.062%, 4/29/24 (a) 2,700 2,513,457
AAA Orange Cnty COP
(Loma Ridge Data Ctr Proj) AMBAC
6.00%, 6/01/21 1,000 1,000,540
AAA Palm Springs ETM COP
Ser 91B Zero coupon, 4/15/21 35,925 7,409,890
AAA Rancho Wtr Dist Fin Auth
AMBAC Ser 91
6.427%, 8/17/21 (a) 6,000 6,741,840
AAA Redding Elec Sys Rev COP
MBIA Ser 92A
6.368%, 7/01/22 (a) 4,000 4,314,840
AAA Sacramento Muni Util Dist Elec Rev
FGIC Ser 92A
6.30%, 8/01/18 5,000 5,204,150
AAA San Bernardino Cnty
Joint Pwr Fin Auth CGIC Ser 95A
5.75%, 9/01/25 5,000 4,936,400
AAA San Bernardino Cnty
Redev (Ontario Red Proj 1) MBIA Ser 93
5.80%, 8/01/23 10,000 9,796,300
20
ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS+ (000) VALUE
- ---------------------------------------------------------------------------
AAA San Dimas Redev Agy
(Creative Growth) CGIC Ser 91A
6.75%, 9/01/16 $ 1,000 $ 1,068,840
AAA San Francisco City & Cnty Int'l Arpt
MBIA Ser 93 II-4
6.00%, 5/01/14 5,000 5,094,100
AAA Stockton Cnty Wastewater Treatment COP
FGIC Ser 95A
6.80%, 9/01/24 5,000 5,477,950
AAA Univ of California Regents Hosp Rev
(UCLA Med Ctr) MBIA Ser 94
5.50%, 12/01/20 8,685 8,353,494
AAA Yorba Linda Redev Agy
Tax Alloc Bonds MBIA Ser 93A
Zero coupon, 9/01/19 3,300 799,326
Total Long Term Municipal Bonds
(cost $140,784,034) 146,792,702
SHORT TERM MUNICIPAL NOTES-1.9%
A-1 Chula Vista IDR
(San Diego Gas & Elec) Series '92B AMT VRDN
3.75%, 12/01/27 1,400 1,400,000
A-1 Irvine Ranch Wtr Dist
VRDN LOC: The Industrial Bank of Japan
4.10%, 6/01/15 1,000 1,000,000
A-1 Irvine Ranch Wtr Imp Dist
Swr Imp #284 VRDN LOC: The Sumitomo Bank, Ltd.
4.10%, 11/15/13 400 400,000
Total Short Term Municipal Notes
(cost $2,800,000) 2,800,000
TOTAL INVESTMENTS-102.4%
(cost $143,584,034) 149,592,702
Other assets less liabilities-(2.4%) (3,513,470)
NET ASSETS-100% $146,079,232
+ Unaudited.
* Moody's or Fitch Rating.
(a) Inverse floater security-the interest rate is subject to change
periodically.
See notes to financial statements.
Glossary of Terms:
AMBAC American Municipal Bond Assurance Corporation
AMT Alternative Minimum Tax - (subject to)
CGIC Capital Guaranty Insurance Corporation
COP Certificate of Participation
ETM Escrowed 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
2
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1995 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-$665,169,907; Ins. National-
$231,900,997; New York-$292,429,199;
California-$702,386,495; Ins. California
-$143,584,034, respectively) $695,919,263 $243,574,368 $307,310,986 $724,205,327 $149,592,702
Cash -0- -0- 2,478,627 -0- -0-
Receivable for investment securities sold 13,400,355 4,508,651 -0- 15,000 -0-
Interest receivable 12,632,324 3,700,937 5,084,938 13,874,613 1,916,670
Receivable for capital stock sold 1,721,949 256,519 574,894 532,007 676,941
Prepaid expenses and other assets 23,838 17,217 -0- -0- -0-
Total assets 723,697,729 252,057,692 315,449,445 738,626,947 152,186,313
LIABILITIES
Due to custodian 1,555,031 2,186,423 -0- 3,400,411 319,127
Payable for investment securities purchased 21,551,054 2,553,368 4,256,569 -0- 5,039,931
Payable for capital stock redeemed 1,154,637 225,216 269,028 1,476,615 452,810
Distribution fee payable 391,457 110,724 153,122 336,830 61,382
Advisory fee payable 118,460 104,012 39,292 124,007 67,588
Accrued expenses and other liabilities 191,013 74,314 85,395 202,149 166,243
Total liabilities 24,961,652 5,254,057 4,803,406 5,540,012 6,107,081
NET ASSETS $698,736,077 $246,803,635 $310,646,039 $733,086,935 $146,079,232
CLASS A SHARES
Net assets $338,311,466 $165,548,283 $183,986,827 $478,534,916 $103,940,326
Shares of capital stock outstanding 32,371,886 16,440,035 19,130,133 45,807,699 7,805,988
CLASS B SHARES
Net assets $252,356,966 $ 58,989,972 $ 94,399,998 $166,758,707 $ 27,815,741
Shares of capital stock outstanding 24,148,680 5,859,651 9,811,101 15,951,828 2,088,924
CLASS C SHARES
Net assets $108,067,645 $ 22,265,380 $ 32,259,214 $ 87,793,312 $ 14,323,165
Shares of capital stock outstanding 10,341,745 2,211,718 3,352,670 8,399,074 1,075,626
COMPOSITION OF NET ASSETS
Capital stock, at par $ 66,862 $ 24,511 $ 32,294 $ 70,159 $ 10,971
Additional paid-in capital 703,446,823 240,610,985 307,843,679 726,768,254 143,968,518
Accumulated net realized loss (35,526,964) (5,505,232) (12,111,721) (15,570,310) (3,908,925)
Net unrealized appreciation of investments 30,749,356 11,673,371 14,881,787 21,818,832 6,008,668
$698,736,077 $246,803,635 $310,646,039 $733,086,935 $146,079,232
CALCULATION OF MAXIMUM OFFERING PRICE
CLASS A SHARES
Net asset value and redemption price per share $10.45 $10.07 $ 9.62 $10.45 $13.32
Sales charge-4.25% of public offering price .46 .45 .43 .46 .59
Maximum offering price $10.91 $10.52 $10.05 $10.91 $13.91
CLASS B SHARES
Net asset value and offering price per share 10.45 10.07 9.62 10.45 13.32
CLASS C SHARES
Net asset value, redemption and offering price
per share $10.45 $10.07 $ 9.62 $10.45 $13.32
</TABLE>
See notes to financial statements.
22
STATEMENT OF OPERATIONS
OCTOBER 31, 1995 ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
<TABLE>
<CAPTION>
INSURED INSURED
NATIONAL NATIONAL NEW YORK CALIFORNIA CALIFORNIA
------------- ------------ ------------ ------------- ------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Interest $ 45,682,704 $15,292,085 $20,054,551 $ 47,637,267 $8,791,624
EXPENSES
Advisory Fee 4,357,009 1,448,694 1,878,376 4,482,864 758,429
Distribution fee - Class A 999,923 481,707 543,333 1,401,092 301,648
Distribution fee - Class B 2,497,692 561,860 874,980 1,612,482 251,539
Distribution fee - Class C 1,140,444 229,840 319,313 889,794 121,930
Transfer agency 665,819 182,595 283,979 473,894 81,222
Custodian 119,117 70,483 75,194 114,662 59,095
Administrative 104,778 103,693 103,667 108,547 104,215
Printing 90,258 20,574 33,569 24,800 11,482
Registration 72,244 64,818 4,920 7,786 6,877
Taxes 67,668 23,458 23,925 60,299 11,429
Audit and legal 45,130 44,077 44,904 41,197 38,562
Directors' fees 4,442 5,288 5,006 5,166 4,462
Miscellaneous 21,298 15,699 17,401 31,022 15,256
Total expenses 10,185,822 3,252,786 4,208,567 9,253,605 1,766,146
Less advisory fees waived (see note B) (2,685,230) (273,143) (1,126,920) (2,183,908) (71,127)
Net expenses 7,500,592 2,979,643 3,081,647 7,069,697 1,695,019
Net investment income 38,182,112 12,312,442 16,972,904 40,567,570 7,096,605
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Net realized gain (loss) on investments (16,742,673) (1,551,031) (8,599,808) (10,675,369) 47,999
Net change in unrealized depreciation
of investments 88,985,630 29,609,236 37,571,643 83,053,467 16,442,245
Net gain on investments 72,242,957 28,058,205 28,971,835 72,378,098 16,490,244
NET INCREASE IN NET ASSETS FROM OPERATIONS $110,425,069 $40,370,647 $45,944,739 $112,945,668 $23,586,849
</TABLE>
See notes to financial statements.
23
STATEMENT OF CHANGES IN NET ASSETS ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
<TABLE>
<CAPTION>
NATIONAL INSURED NATIONAL
---------------------------- ----------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
OCT. 31,1995 OCT. 31,1994 OCT. 31,1995 OCT. 31,1994
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS
Net investment income $ 38,182,112 $ 41,336,843 $ 12,312,442 $ 13,270,616
Net realized loss on investments (16,742,673) (18,784,294) (1,551,031) (3,954,200)
Net change in unrealized
appreciation (depreciation)
of investments 88,985,630 (90,162,931) 29,609,236 (33,116,428)
Net increase (decrease) in net
assets from operations 110,425,069 (67,610,382) 40,370,647 (23,800,012)
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income
Class A (19,579,195) (20,925,782) (8,620,766) (9,399,632)
Class B (12,886,174) (12,416,937) (2,612,853) (2,448,147)
Class C (5,920,496) (7,994,124) (1,078,823) (1,422,837)
Distributions in excess of net
investment income
Class A -0- (913,522) (239,073) (105,638)
Class B -0- (542,066) (72,460) (27,513)
Class C -0- (348,986) (29,919) (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) (95,757,376) 96,419,820 (10,119,842) 18,362,280
Total increase (decrease) (23,718,172) (31,471,943) 17,596,911 (28,485,230)
NET ASSETS
Beginning of year 722,454,249 753,926,192 229,206,724 257,691,954
End of year $698,736,077 $722,454,249 $246,803,635 $229,206,724
</TABLE>
See notes to financial statements.
24
ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
NEW YORK
-----------------------------
YEAR ENDED YEAR ENDED
OCT. 31,1995 OCT. 31,1994
------------- -------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment income $ 16,972,904 $ 17,556,621
Net realized loss on investments (8,599,808) (3,511,913)
Net change in unrealized appreciation
(depreciation) of investments 37,571,643 (44,342,566)
Net increase (decrease) in net assets
from operations 45,944,739 (30,297,858)
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A (10,790,213) (11,785,597)
Class B (4,577,754) (3,814,288)
Class C (1,680,454) (1,956,736)
Distributions in excess of net investment income
Class A -0- (124,081)
Class B -0- (40,157)
Class C -0- (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) (17,006,966) 36,925,744
Total increase (decrease) 11,889,352 (12,251,005)
NET ASSETS
Beginning of year 298,756,687 311,007,692
End of year $310,646,039 $298,756,687
See notes to financial statements.
25
STATEMENT OF CHANGES IN NET ASSETS (CONT.) ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
<TABLE>
<CAPTION>
CALIFORNIA INSURED CALIFORNIA
---------------------------- ----------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
OCT. 31,1995 OCT. 31,1994 OCT. 31,1995 OCT. 31,1994
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS
Net investment income $ 40,567,570 $ 43,929,351 $ 7,096,605 $ 7,640,236
Net realized gain (loss)
on investments (10,675,369) (4,867,241) 47,999 (3,956,924)
Net change in unrealized
appreciation (depreciation)
of investments 83,053,467 (106,275,455) 16,442,245 (19,452,385)
Net increase (decrease) in net
assets from operations 112,945,668 (67,213,345) 23,586,849 (15,769,073)
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income
Class A (27,565,247) (29,886,237) (5,371,233) (5,838,387)
Class B (8,365,628) (7,898,002) (1,159,355) (1,139,688)
Class C (4,642,175) (6,145,112) (566,017) (662,161)
Distributions in excess of net
investment income
Class A -0- (80,974) (102,666) -0-
Class B -0- (21,399) (22,160) -0-
Class C -0- (16,650) (10,819) -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) (74,094,906) 75,451,013 (2,195,497) 2,467,385
Total increase (decrease) (1,722,288) (40,551,275) 14,159,102 (26,019,140)
NET ASSETS
Beginning of year 734,809,223 775,360,498 131,920,130 157,939,270
End of year $733,086,935 $734,809,223 $146,079,232 $131,920,130
</TABLE>
See notes to financial statements.
26
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1995 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. 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, Insured California 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 and are determined in accordance with income tax regulations, which may
differ from generally accepted accounting principles. These 'book/tax'
differences are either temporary or permanent in nature. Permanent differences
are reclassified within the capital accounts based on their federal tax-basis
treatment:temporary differences do not require reclassification.
27
NOTES TO FINANCIAL STATEMENTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
5. RECLASSIFICATION OF COMPONENTS OF NET ASSETS
The following represent reclassifications of components of net assets at
October 31, 1995:
ACCUMULATED
UNDISTRIBUTED
NET INVESTMENT PAID-IN-
INCOME CAPITAL
-------------- ------------
National Portfolio $2,006,965 $(2,006,965)
Insured National Portfolio 491,459 (491,459)
New York Portfolio 261,154 (261,154)
California Portfolio 126,411 (126,411)
Insured California Portfolio 135,461 (135,461)
These reclassifications were the result of permanent book-to-tax differences
resulting from distributions in excess of net tax-exempt income. These
reclassifications had no effect on net investment income, net realized gains or
net assets.
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 'Adviser') 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 and .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 year ended October31, 1995. For the year ended October 31,
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, $2,685,230;
Insured National Portfolio, $273,143; New York Portfolio, $1,126,920;
California Portfolio, $2,183,908; and Insured California, $71,127. Pursuant to
the Advisory Agreement, the Fund paid $524,900 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 $414,164 for the National Portfolio, $107,804 for the
Insured National Portfolio, $170,159 for the New York Portfolio, $295,422 for
the California Portfolio and $46,974 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 year ended October 31, 1995 were: National
Portfolio, $53,831; Insured National Portfolio, $24,091; New York Portfolio,
$25,809; California Portfolio, $62,269; and Insured California Portfolio,
$23,459. The amount of contingent deferred sales charge imposed upon
redemptions by shareholders of Class B shares were: National Portfolio,
$541,300; Insured National Portfolio, $117,707; New York Portfolio, $186,889;
California Portfolio, $466,603; and Insured California Portfolio, $61,832.
28
ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
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:
PORTFOLIO CLASS B CLASS C
- ------------------ ---------- ----------
National $4,580,693 $1,735,266
Insured National 1,879,251 582,379
New York 2,854,710 614,470
California 4,648,912 1,398,507
Insured California 1,235,161 379,783
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 (excluding short-term securities)
for the year ended October 31, 1995 were:
PORTFOLIO PURCHASES SALES
- ------------------- ------------ ------------
National $820,502,524 $927,705,612
Insured National 406,379,755 422,533,212
New York 207,293,535 231,156,932
California 278,480,824 348,033,596
Insured California 145,424,337 139,179,922
At October 31, 1995, the cost of securities for federal income tax purposes,
gross unrealized appreciation, gross unrealized depreciation and net unrealized
appreciation of investments for each Portfolio were as follows:
GROSS UNREALIZED NET
---------------------------- UNREALIZED
TAX COST APPRECIATION (DEPRECIATION) APPRECIATION
------------ ------------ -------------- ------------
National $665,218,675 $34,065,198 $(3,364,613) $30,700,585
Insured National 231,993,980 11,704,812 (124,424) 11,580,388
New York 292,444,938 15,478,345 (612,297) 14,866,048
California 702,410,507 28,674,454 (6,879,634) 21,794,820
Insured California 143,584,034 6,507,768 (499,100) 6,008,668
NOTE E: TAXES
For Federal income tax purposes at October 31, 1995, the Fund had capital loss
carryforwards for the following Portfolios: $17,246,158 expiring in 2002 and
$18,232,038 expiring in 2003 for the National Portfolio; $3,946,364 expiring in
2002 and $1,465,884 expiring in 2003 for the Insured National Portfolio;
$1,550,512 expiring in 2002 and $10,545,470 expiring in 2003 for the New York
Portfolio; $4,748,470 expiring in 2002 and $10,797,828 expiring in 2003 for the
California Portfolio; and $3,908,925 expiring in 2002 for the Insured
California Portfolio.
29
NOTES TO FINANCIAL STATEMENTS (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
------------------------- ----------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
1995 1994 1995 1994
----------- ------------ ------------- -------------
CLASS A
Shares sold 4,787,898 8,763,506 $ 47,317,764 $ 91,292,397
Shares issued in
reinvestment of
dividends and
distributions 1,139,057 1,912,150 11,273,668 19,811,794
Shares redeemed (9,571,534) (9,648,259) (93,714,112) (98,831,346)
Net increase(decrease) (3,644,579) 1,027,397 $(35,122,680) $ 12,272,845
CLASS B
Shares sold 3,237,841 11,186,358 $ 31,671,965 $117,243,703
Shares issued in
reinvestment of
dividends and
distributions 840,798 1,232,690 8,326,644 12,747,638
Shares redeemed (6,546,335) (5,399,812) (63,976,163) (55,318,876)
Net increase(decrease) (2,467,696) 7,019,236 $(23,977,554) $ 74,672,465
CLASS C
Shares sold 2,513,404 13,213,233 $ 24,850,658 $139,780,039
Shares issued in
reinvestment of
dividends and
distributions 506,602 962,250 5,001,846 10,071,107
Shares redeemed (6,842,684) (13,675,221) (66,509,646) (140,376,636)
Net increase(decrease) (3,822,678) 500,262 $(36,657,142) $ 9,474,510
30
ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
INSURED NATIONAL PORTFOLIO
------------------------------------------------------
SHARES AMOUNT
------------------------- ---------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
1995 1994 1995 1994
----------- ------------ ------------ -------------
CLASS A
Shares sold 2,109,319 1,451,617 $19,729,676 $ 14,585,949
Shares issued in
reinvestment of
dividends and
distributions 463,475 973,251 4,426,013 9,757,292
Shares redeemed (3,272,946) (2,555,318) (30,921,711) (25,044,847)
Net decrease (700,152) (130,450) $(6,766,022) $ (701,606)
CLASS B
Shares sold 1,180,257 2,319,991 $11,132,100 $ 23,387,769
Shares issued in
reinvestment of
dividends and
distributions 173,416 303,499 1,661,573 3,033,047
Shares redeemed (1,232,039) (876,614) (11,659,140) (8,468,612)
Net increase 121,634 1,746,876 $ 1,134,533 $ 17,952,204
CLASS C
Shares sold 488,859 3,170,564 $ 4,578,511 $ 32,420,564
Shares issued in
reinvestment of
dividends and
distributions 107,163 203,843 1,023,246 2,055,363
Shares redeemed (1,074,063) (3,366,643) (10,090,110) (33,364,245)
Net increase(decrease) (478,041) 7,764 $(4,488,353) $ 1,111,682
31
NOTES TO FINANCIAL STATEMENTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
NEW YORK PORTFOLIO
--------------------------------------------------------
SHARES AMOUNT
-------------------------- ----------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
1995 1994 1995 1994
------------ ------------ ------------- -------------
CLASS A
Shares sold 1,541,732 3,168,916 $ 14,097,320 $ 30,501,075
Shares issued in
reinvestment of
dividends and
distributions 730,643 897,711 6,699,094 8,532,886
Shares redeemed (4,026,816) (4,249,500) (36,382,127) (39,961,104)
Net decrease (1,754,441) (182,873) $(15,585,713) $ (927,143)
CLASS B
Shares sold 1,765,580 4,324,083 $ 16,166,559 $ 41,717,290
Shares issued in
reinvestment of
dividends and
distributions 330,093 303,825 3,029,271 2,878,860
Shares redeemed (1,678,380) (986,606) (15,223,910) (9,238,391)
Net increase 417,293 3,641,302 $ 3,971,920 $ 35,357,759
CLASS C
Shares sold 774,912 3,280,476 $ 7,137,932 $ 32,182,546
Shares issued in
reinvestment of
dividends and
distributions 145,723 161,628 1,332,925 1,545,458
Shares redeemed (1,539,788) (3,230,822) (13,864,030) (31,232,876)
Net increase(decrease) (619,153) 211,282 $ (5,393,173) $ 2,495,128
CALIFORNIA PORTFOLIO
--------------------------------------------------------
SHARES AMOUNT
-------------------------- ----------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
1995 1994 1995 1994
------------ ------------ ------------- -------------
CLASS A
Shares sold 4,608,607 8,326,422 $ 45,697,476 $ 86,206,380
Shares issued in
reinvestment of
dividends and
distributions 1,354,247 1,695,587 12,936,654 17,454,436
Shares redeemed (10,053,974) (8,870,972) (97,704,751) (89,991,938)
Net increase(decrease) (4,091,120) 1,151,037 $(39,070,621) $ 13,668,878
CLASS B
Shares sold 2,379,727 7,617,761 $ 23,517,537 $ 79,269,903
Shares issued in
reinvestment of
dividends and
distributions 477,127 481,615 4,724,963 4,900,749
Shares redeemed (3,973,996) (2,654,651) (38,724,734) (26,837,236)
Net increase(decrease) (1,117,142) 5,444,725 $(10,482,234) $ 57,333,416
32
ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
CALIFORNIA PORTFOLIO
------------------------------------------------------
SHARES AMOUNT
------------------------ ----------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
1995 1994 1995 1994
----------- ----------- ------------- -------------
CLASS C
Shares sold 1,828,084 8,683,048 $ 18,294,426 $ 91,364,593
Shares issued in
reinvestment of
dividends and
distributions 335,322 523,322 3,304,549 5,406,737
Shares redeemed (4,758,478) (8,982,706) (46,141,026) (92,322,611)
Net increase(decrease) (2,595,072) 223,664 $(24,542,051) $ 4,448,719
INSURED CALIFORNIA PORTFOLIO
------------------------------------------------------
SHARES AMOUNT
------------------------ ----------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
1995 1994 1995 1994
----------- ----------- ------------- -------------
CLASS A
Shares sold 1,612,641 1,853,715 $ 19,702,408 $ 24,454,733
Shares issued in
reinvestment of
dividends and
distributions 201,630 409,982 2,542,607 5,430,477
Shares redeemed (2,051,864) (2,689,879) (25,275,836) (34,914,619)
Net decrease (237,593) (426,182) $ (3,030,821) $ (5,029,409)
CLASS B
Shares sold 812,573 939,403 $ 10,053,570 $ 12,556,744
Shares issued in
reinvestment of
dividends and
distributions 50,558 101,345 638,689 1,350,667
Shares redeemed (859,461) (445,132) (10,363,603) (5,789,369)
Net increase 3,670 595,616 $ 328,656 $ 8,118,042
CLASS C
Shares sold 474,208 1,151,303 $ 5,898,558 $ 15,496,034
Shares issued in
reinvestment of
dividends and
distributions 29,986 59,428 379,781 790,742
Shares redeemed (486,148) (1,273,601) (5,771,671) (16,908,024)
Net increase (decrease) 18,046 (62,870) $ 506,668 $ (621,248)
33
FINANCIAL HIGHLIGHTS ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH YEAR
<TABLE>
<CAPTION>
A NATIONAL PORTFOLIO
----------------------------------------------------------
CLASS A
----------------------------------------------------------
YEAR ENDED OCTOBER 31,
----------------------------------------------------------
1995 1994 1993 1992 1991
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $ 9.41 $11.05 $10.19 $ 9.96 $ 9.47
INCOME FROM INVESTMENT OPERATIONS
Net investment income .58** .57** .61** .65** .66**
Net realized and unrealized gain
(loss) on investments 1.04 (1.37) .88 .28 .49
Net increase (decrease) in net asset
value from operations 1.62 (.80) 1.49 .93 1.15
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.58) (.57) (.62) (.65) (.66)
Distributions in excess of net
investment income -0- (.03) -0- -0- -0-
Distributions from net realized gains -0- (.24) (.01) (.05) -0-
Total dividends and distributions (.58) (.84) (.63) (.70) (.66)
Net asset value, end of year $10.45 $ 9.41 $11.05 $10.19 $ 9.96
TOTAL RETURN
Total investment return based on net
asset value(b) 17.73% (7.65)% 14.94% 9.60% 12.55%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year(000's omitted) $338,311 $338,814 $386,484 $261,895 $207,167
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements .71% .62% .65% .83% .75%
Expenses, before waivers/
reimbursements 1.09% 1.09% 1.08% 1.11% 1.14%
Net investment income, net of
waivers/reimbursements 5.84% 5.61% 5.69% 6.35% 6.81%
Portfolio turnover rate 118% 110% 233% 86% 64%
</TABLE>
See footnote summary on page 43.
34
ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
NATIONAL PORTFOLIO
--------------------------------------------------------------------------
CLASS B CLASS C
------------------------------------ ------------------------------------
JAN. 4,1993* MAY 3,1993*
YEAR ENDED OCTOBER 31, TO YEAR ENDED OCTOBER 31, TO
---------------------- OCTOBER 31, ---------------------- OCTOBER 31,
1995 1994 1993 1995 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 .51** .50** .44** .51** .50** .26**
Net realized and unrealized gain
(loss) on investments 1.04 (1.38) .63 1.04 (1.38) .36
Net increase (decrease) in net asset
value from operations 1.55 (.88) 1.07 1.55 (.88) .62
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.51) (.50) (.45) (.51) (.50) (.27)
Distributions 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 (.51) (.76) (.45) (.51) (.76) (.27)
Net asset value, end of period $10.45 $9.41 $11.05 $10.45 $9.41 $11.05
TOTAL RETURN
Total investment return based on net
asset value(b) 16.91% (8.34)% 10.43% 16.93% (8.33)% 5.84%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period(000's omitted) $252,357 $250,391 $216,489 $108,068 $133,249 $150,953
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.42% 1.32% 1.36%(a) 1.41% 1.31% 1.36%(a)
Expenses, before waivers/
reimbursements 1.80% 1.80% 1.78%(a) 1.78% 1.79% 1.78%(a)
Net investment income, net of
waivers/reimbursements 5.13% 4.91% 4.59%(a) 5.16% 4.89% 4.17%(a)
Portfolio turnover rate 118% 110% 233% 118% 110% 233%
</TABLE>
See footnote summary on page 43.
35
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH YEAR
<TABLE>
<CAPTION>
INSURED NATIONAL PORTFOLIO
A ----------------------------------------------------------
CLASS A
----------------------------------------------------------
YEAR ENDED OCTOBER 31,
----------------------------------------------------------
1995 1994 1993 1992 1991
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $ 8.96 $10.76 $ 9.87 $ 9.88 $ 9.39
INCOME FROM INVESTMENT OPERATIONS
Net investment income .51** .53** .56** .60** .61**
Net realized and unrealized gain
(loss) on investments 1.13 (1.40) .96 .15 .49
Net increase (decrease) in net asset
value from operations 1.64 (.87) 1.52 .75 1.10
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.51) (.53) (.57) (.60) (.61)
Distributions in excess of net
investment income (.02) (.01) -0- -0- -0-
Distributions from net realized gains -0- (.39) (.06) (.16) -0-
Total dividends and distributions (.53) (.93) (.63) (.76) (.61)
Net asset value, end of year $10.07 $ 8.96 $10.76 $ 9.87 $ 9.88
TOTAL RETURN
Total investment return based on net
asset value(b) 18.72% (8.69)% 15.82% 7.88% 12.08%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year(000's omitted) $165,548 $153,656 $185,876 $149,632 $130,723
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.01% .66% .73% .81% .92%
Expenses, before waivers/
reimbursements 1.12% 1.11% 1.11% 1.12% 1.17%
Net investment income, net of
waivers/reimbursements 5.37% 5.40% 5.40% 6.04% 6.34%
Portfolio turnover rate 171% 149% 165% 105% 96%
</TABLE>
See footnote summary on page 43.
36
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
------------------------------------ ------------------------------------
JAN. 4,1993* MAY 3,1993*
YEAR ENDED OCTOBER 31, TO YEAR ENDED OCTOBER 31, TO
---------------------- OCTOBER 31, ---------------------- OCTOBER 31,
1995 1994 1993 1995 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 .45** .46** .40** .45** .46** .24**
Net realized and unrealized gain
(loss) on investments 1.12 (1.40) .66 1.12 (1.40) .35
Net increase (decrease) in net asset
value from operations 1.57 (.94) 1.06 1.57 (.94) .59
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.45) (.46) (.40) (.45) (.46) (.24)
Distributions in excess of net
investment income (.01) (.01) -0- (.01) (.01) -0-
Distributions from net realized gains -0- (.39) -0- -0- (.39) -0-
Total dividends and distributions (.46) (.86) (.40) (.46) (.86) (.24)
Net asset value, end of period $10.07 $ 8.96 $10.76 $10.07 $ 8.96 $10.76
TOTAL RETURN
Total invesment return based on net
asset value(b) 17.91% (9.38)% 10.68% 17.91% (9.38)% 5.75%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period(000's omitted) $58,990 $51,439 $42,954 $22,265 $24,112 $28,862
Ratio to average net assets of
Expenses, net of waivers/
reimbursements 1.72% 1.37% 1.45%(a) 1.71% 1.36% 1.45%(a)
Expenses, before waivers/
reimbursements 1.83% 1.82% 1.83%(a) 1.82% 1.81% 1.83%(a)
Net investment income, net of
waivers/reimbursements 4.65% 4.71% 4.31%(a) 4.69% 4.68% 3.98%(a)
Portfolio turnover rate 171% 149% 165% 171% 149% 165%
</TABLE>
See footnote summary on page 43.
37
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH YEAR
<TABLE>
<CAPTION>
NEW YORK PORTFOLIO
----------------------------------------------------------
CLASS A
----------------------------------------------------------
YEAR ENDED OCTOBER 31,
----------------------------------------------------------
1995 1994 1993 1992 1991
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $ 8.72 $10.17 $ 9.53 $ 9.30 $ 8.78
INCOME FROM INVESTMENT OPERATIONS
Net investment income .55** .55** .57** .60** .62**
Net realized and unrealized gain
(loss) on investments .90 (1.40) .79 .24 .52
Net increase (decrease) in net asset
value from operations 1.45 (.85) 1.36 .84 1.14
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.55) (.55) (.58) (.60) (.62)
Distributions in excess of net
investment income -0- (.01) -0- -0- -0-
Distributions from net realized gains -0- (.04) (.14) (.01) -0-
Total dividends and distributions (.55) (.60) (.72) (.61) (.62)
Net asset value, end of year $ 9.62 $ 8.72 $10.17 $ 9.53 $ 9.30
TOTAL RETURN
Total investment return based on net
asset value(b) 17.10% (8.76)% 14.71% 9.39% 13.36%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year(000's omitted) $183,987 $182,170 $214,259 $162,549 $136,484
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements .75% .66% .68% .70% .65%
Expenses, before waivers/
reimbursements 1.12% 1.11% 1.13% 1.13% 1.20%
Net investment income, net of
waivers/reimbursements 5.93% 5.75% 5.76% 6.37% 6.81%
Portfolio turnover rate 69% 69% 63% 69% 48%
</TABLE>
See footnote summary on page 43.
38
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
------------------------------------ ------------------------------------
JAN. 4,1993* MAY 3,1993*
YEAR ENDED OCTOBER 31, TO YEAR ENDED OCTOBER 31, TO
---------------------- OCTOBER 31, ---------------------- OCTOBER 31,
1995 1994 1993 1995 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 .48** .48** .41** .48** .48** .24**
Net realized and unrealized gain
(loss) on investments .90 (1.41) .56 .90 (1.41) .29
Net increase (decrease) in net asset
value from operations 1.38 (.93) .97 1.38 (.93) .53
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.48) (.47) (.41) (.48) (.47) (.25)
Distributions 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 (.48) (.52) (.41) (.48) (.52) (.25)
Net asset value, end of period $ 9.62 $ 8.72 $10.17 $ 9.62 $ 8.72 $10.17
TOTAL RETURN
Total investment return based on net
asset value(b) 16.19% (9.44)% 10.29% 16.19% (9.44)% 5.37%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year(000's omitted) $94,400 $81,941 $58,504 $32,259 $34,646 $38,245
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.45% 1.36% 1.39%(a) 1.44% 1.36% 1.38%(a)
Expenses, before waivers/
reimbursements 1.83% 1.82% 1.84%(a) 1.82% 1.81% 1.84%(a)
Net investment income, net of
waivers/reimbursements 5.21% 5.05% 4.70%(a) 5.24% 5.03% 4.42%(a)
Portfolio turnover rate 69% 69% 63% 69% 69% 63%
</TABLE>
See footnote summary on page 43.
39
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH YEAR
<TABLE>
<CAPTION>
CALIFORNIA PORTFOLIO
----------------------------------------------------------
CLASS A
----------------------------------------------------------
YEAR ENDED OCTOBER 31,
----------------------------------------------------------
1995 1994 1993 1992 1991
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $ 9.43 $10.90 $10.06 $ 9.97 $ 9.58
INCOME FROM INVESTMENT OPERATIONS
Net investment income .59** .59** .61** .65** .67**
Net realized and unrealized gain
(loss) on investments 1.02 (1.41) .85 .13 .39
Net increase (decrease) in net asset
value from operations 1.61 (.82) 1.46 .78 1.06
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.59) (.59) (.61) (.65) (.67)
Distributions from net realized gains -0- (.06) (.01) (.04) -0-
Total dividends and distributions (.59) (.65) (.62) (.69) (.67)
Net asset value, end of year $10.45 $ 9.43 $10.90 $10.06 $ 9.97
TOTAL RETURN
Total investment return based on net
asset value(b) 17.55% (7.73)% 14.90% 8.05% 11.42%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year(000's omitted) $478,535 $470,308 $531,293 $361,661 $228,755
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements .74% .64% .74% .59% .39%
Expenses, before waivers/
reimbursements 1.04% 1.05% 1.06% 1.07% 1.11%
Net investment income, net of
waivers/reimbursements 5.90% 5.78% 5.74% 6.38% 6.80%
Portfolio turnover rate 39% 45% 83% 77% 106%
</TABLE>
See footnote summary on page 43.
40
ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CALIFORNIA PORTFOLIO
--------------------------------------------------------------------------
CLASS B CLASS C
------------------------------------ ------------------------------------
JAN. 4,1993* MAY 3,1993*
YEAR ENDED OCTOBER 31, TO YEAR ENDED OCTOBER 31, TO
---------------------- OCTOBER 31, ---------------------- OCTOBER 31,
1995 1994 1993 1995 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 .51** .52** .44** .51** .52** .26**
Net realized and unrealized gain
(loss) on investments 1.02 (1.41) .63 1.02 (1.41) .36
Net increase (decrease) in net asset
value from operations 1.53 (.89) 1.07 1.53 (.89) .62
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.51) (.52) (.44) (.51) (.52) (.26)
Distributions from net realized gains -0- (.06) -0- -0- (.06) -0-
Total dividends and distributions (.51) (.58) (.44) (.51) (.58) (.26)
Net asset value, end of period $10.45 $ 9.43 $10.90 $10.45 $ 9.43 $10.90
TOTAL RETURN
Total investment return based on net
asset value(b) 16.64% (8.43)% 10.60% 16.64% (8.43)% 5.98%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period(000's omitted) $166,759 $160,879 $126,688 $87,793 $103,622 $117,379
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.45% 1.35% 1.44%(a) 1.44% 1.34% 1.44%(a)
Expenses, before waivers/
reimbursements 1.75% 1.75% 1.78%(a) 1.74% 1.75% 1.78%(a)
Net investment income, net of
waivers/reimbursements 5.19% 5.07% 4.66%(a) 5.22% 5.06% 4.42%(a)
Portfolio turnover rate 39% 45% 83% 39% 45% 83%
</TABLE>
See footnote summary on page 43.
41
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH YEAR
<TABLE>
<CAPTION>
INSURED CALIFORNIA PORTFOLIO
----------------------------------------------------------
CLASS A
----------------------------------------------------------
YEAR ENDED OCTOBER 31,
----------------------------------------------------------
1995 1994 1993 1992 1991
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $11.79 $14.25 $12.99 $12.80 $12.19
INCOME FROM INVESTMENT OPERATIONS
Net investment income .68** .69** .70** .76** .77**
Net realized and unrealized gain
(loss) on investments 1.54 (1.99) 1.30 .18 .61
Net increase (decrease) in net asset
value from operations 2.22 (1.30) 2.00 .94 1.38
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.68) (.69) (.71) (.75) (.77)
Dividends in excess of net
investment income (.01) -0- -0- -0- -0-
Distributions from net realized gains -0- (.47) (.03) -0- -0-
Total dividends and distributions (.69) (1.16) (.74) (.75) (.77)
Net asset value, end of year $13.32 $11.79 $14.25 $12.99 $12.80
TOTAL RETURN
Total investment return based on net
asset value(b) 19.29% (9.73)% 15.64% 7.52% 11.62%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year(000's omitted) $103,940 $94,857 $120,734 $90,477 $69,757
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.04% .82% .94% .78% .79%
Expenses, before waivers/
reimbursements 1.09% 1.08% 1.08% 1.09% 1.20%
Net investment income, net of
waivers/reimbursements 5.34% 5.29% 5.06% 5.77% 6.13%
Portfolio turnover rate 103% 100% 186% 60% 59%
</TABLE>
See footnote summary on page 43.
42
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
------------------------------------ ------------------------------------
JAN. 4,1993* MAY 3,1993*
YEAR ENDED OCTOBER 31, TO YEAR ENDED OCTOBER 31, TO
---------------------- OCTOBER 31, ---------------------- OCTOBER 31,
1995 1994 1993 1995 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 .58** .60** .49** .58** .60** .29**
Net realized and unrealized gain
(loss) on investments 1.54 (2.00) .89 1.54 (2.00) .48
Net increase (decrease) in net asset
value from operations 2.12 (1.40) 1.38 2.12 (1.40) .77
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.58) (.59) (.50) (.58) (.59) (.30)
Distributions in excess of net
investment income (.01) -0- -0- (.01) -0- -0-
Distributions from net realized gains -0- (.47) -0- -0- (.47) -0-
Total dividends and distributions (.59) (1.06) (.50) (.59) (1.06) (.30)
Net asset value, end of period $13.32 $11.79 $14.25 $13.32 $11.79 $14.25
TOTAL RETURN
Total investment return based on net
asset value(b) 18.35% (10.43)% 10.43% 18.35% (10.43)% 5.63%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period(000's omitted) $27,816 $24,591 $21,234 $14,323 $12,472 $15,971
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.74% 1.53% 1.65%(a) 1.74% 1.52% 1.65%(a)
Expenses, before waivers/
reimbursements 1.80% 1.78% 1.79%(a) 1.79% 1.77% 1.79%(a)
Net investment income, net of
waivers/reimbursements 4.61% 4.60% 3.85%(a) 4.64% 4.59% 3.74%(a)
Portfolio turnover rate 103% 100% 186% 103% 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.
43
REPORT OF ERNST & YOUNG LLP
INDEPENDENT AUDITORS ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
TO THE SHAREHOLDERS AND BOARD OF DIRECTORS
ALLIANCE MUNICIPAL INCOME FUND, INC.
We have audited the accompanying statement of assets and liabilities, including
the portfolios of investments, of Alliance Municipal Income Fund, Inc.
(comprising, respectively, the National, Insured National, New York,
California, and Insured California Portfolios) as of October 31, 1995, and the
related statement of operations for the year then ended, the statement of
changes in net assets for each of the two years in the period then ended, and
the financial highlights for each of the periods indicated therein. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
October 31, 1995, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the respective portfolios constituting the Alliance Municipal Income Fund,
Inc. at October 31, 1995, the results of their operations for the year then
ended, the changes in their net assets for each of the two years in the period
then ended, and the financial highlights for each of the indicated periods, in
conformity with generally accepted accounting principles.
Ernst & Young LLP
New York, New York
December 8, 1995
FEDERAL TAX INFORMATION (UNAUDITED)
_______________________________________________________________________________
In accordance with Federal Requirements, the Fund designates substantially all
the dividends paid from investment income-net during the fiscal year ended
October 31, 1995 as 'exempt-interest dividends.'
As required by Federal regulations, shareholders will receive notification of
their portion of the Fund's taxable ordinary dividends and capital gains
distributions paid (if any) for the 1995 calendar year early in 1996.
44
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
WAYNE D. LYSKI, SENIOR VICE PRESIDENT
KATHLEEN A. CORBET, SENIOR VICE PRESIDENT
DAVID M. DOWDEN, VICE PRESIDENT
WILLIAM E. OLIVER, VICE PRESIDENT
TERRANCE HULTS, 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.
45
ALLIANCE MUNICIPAL INCOME FUND
1345 Avenue of the Americas
New York, NY 10105
(800) 221-5672
ALLIANCECAPITAL
MUTUAL FUNDS WITHOUT THE MYSTERY.
THIS REPORT IS INTENDED SOLELY FOR DISTRIBUTION TO CURRENT SHAREHOLDERS OF THE
FUND.
R THESE REGISTERED SERVICE MARKS USED UNDER LICENSE FROM THE OWNER, ALLIANCE
CAPITAL MANAGEMENT L.P.
MUNIAR
