ALLIANCE MUNICIPAL INCOME FUND
SEMI-ANNUAL REPORT
APRIL 30, 1997
ALLIANCE CAPITAL
LETTER TO SHAREHOLDERS ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
June 5, 1997
Dear Shareholder:
We are pleased to report municipal market activity and investment results for
Alliance Municipal Income Fund's semi-annual reporting period ended April 30,
1997. Over the past six and twelve month periods, all of the Fund's
Portfolios--National, Insured National, California, Insured California, and New
York--produced excellent total returns and outperformed their respective
benchmarks, the state specific Lipper Municipal Debt Funds Average. We are no
longer using the Lehman Brothers Long Municipal Bond Index as one of the Fund's
benchmarks because we believe that the Lipper Municipal Debt Fund Averages
offer better comparisons in terms of overall Fund performance.
Additionally, Insured California Portfolio achieved the #1 ranking of all
insured California municipal income funds tracked by Lipper Analytical Services
for the 12 months ended April 30, 1997. The California Portfolio outperformed
all other funds in its peer group for the period since its inception (December
29, 1986) through April 30, 1997. Lipper rankings are based on total returns at
net asset value, without the imposition of the maximum 4.25% sales charge,
which would reduce total return figures.
LIPPER RANKINGS
For the period ended April 30, 1997
SINCE INCEPTION*
PORTFOLIO* 1 YEAR RANKING RANKING
- ------------------- --------------- ----------------
NATIONAL #7 of 231 funds #4 of 64 funds
INSURED NATIONAL #3 of 51 funds #2 of 15 funds
NEW YORK #5 of 96 funds #8 of 22 funds
CALIFORNIA #9 of 99 funds #1 of 30 funds
INSURED CALIFORNIA #1 of 25 funds #2 of 2 funds
* INVESTMENT RESULTS AND PORTFOLIO INCEPTION DATES CAN BE FOUND ON PAGE 4.
MARKET OVERVIEW
Much like the market trend established in early 1996, the municipal bond market
returned inconsistent performance in the first quarter of 1997. After posting
strong returns through early February, the bond market became weaker as
investors became increasingly comfortable with the economy. Confirming this
strong economic growth outlook, in early March, the Federal Reserve Board
raised its benchmark Federal funds rate by one quarter of one percent, or 25
basis points, in an effort to contain present and future inflationary
pressures. Volatility continued through the remainder of the first quarter. At
this writing, it is still widely believed by the investment community that the
Federal Reserve will need to increase rates at least one more time this year to
complete the current round of money supply tightening.
THE MUNICIPAL BOND MARKET
One theme that we have discussed over the last several years has been the
importance of various technical factors affecting the relative value of
municipal bonds versus taxable bonds. Since late 1995, municipal bonds have
been trading at inexpensive prices when compared to their fully taxable
counterparts. This was due to the threat of "tax reform" during the last
election. However, now that the election and the tax reform debate seem well
behind us, we expect that municipal bond prices will improve relative to their
taxable counterparts. The volume of new issues of municipal securities
accelerated in the first quarter of 1997 for the first time in years. This
trend is attributable to an increase in voter authorized state and local
government debt and a low interest rate environment. As a result of this influx
of new issues, municipal bonds currently offer excellent value relative to
other fixed-income investments, especially when compared on a tax-adjusted
basis.
Credit ratings of municipal issuers improved as state and local governments
benefited from a robust economy which resulted in higher-than-expected tax
receipts. Many large states such as California, New York, Massachusetts and
Michigan are in their best fiscal condition in years. In most cases, many of
these states have built up substantial "rainy day" funds to cushion against
future economic downturns. These funds will be critical in maintaining strong
fiscal performance, especially if economic growth slows and big budget items
such as Medicaid costs begin to rise. For state and local governments, the
continuation of tax reduction programs and the likely continuation of anti-tax
sentiment, will be con-
1
ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
straining factors in maintaining budgetary balances in the next couple of
years. The recent proposal by the State of New Jersey to close a budget gap by
selling a $2.75 billion pension funding bond may be a precursor of future
budgetary actions in other states where large tax cuts have severely cut the
revenue base. This phenomenon could result in weakening credit quality of
issuers who pursue these types of stop-gap measures.
INVESTMENT STRATEGY
The first quarter volatility in the bond market once again provided your
portfolio managers with an opportunity to capture higher incremental after-tax
yield and to further improve overall call protection in the Fund's portfolios.
At Alliance, we continue to believe that long-term interest rates will decline
modestly over the next several years and, therefore, any market weakness will
provide an opportunity for us to purchase quality securities at advantageous
prices. To make room for these attractive new issues, we continue to sell
lower-coupon bonds with call protection of less than 10 years. We also continue
to sell bonds that have been "pre-refunded" by their issuers and have realized
their maximum price appreciation potential relative to other investment
opportunities.
The overall theme of our municipal bond portfolio strategy continues to be one
of active management in terms of the performance factors we can control (namely
the securities owned in your portfolios) without attempting to manage the
portfolios for those factors that are out of our control (such as the future
direction of interest rates). This strategy is centered on selecting securities
with price appreciation potential, either through credit improvements,
structural features or technical factors. By continuing to keep a "buy low,
sell high" philosophy as part of our strategy, we expect to once again post
strong performance relative to our peers in the mutual fund industry.
MARKET OUTLOOK
Barring any unforeseen drama in the global financial markets, we expect 1997 to
be a relatively calm year for municipal bond investors. Municipal bond prices
should continue to trade in a relatively narrow range and yields will most
likely peak on or around current levels in the near future. Any increase in
short-term rates on the part of the Federal Reserve should be viewed as a
positive for long-term fixed income investors because such action will help
curb inflationary pressures in the economy. Finally, we believe that the
municipal bond market offers excellent value at current prices, especially on a
tax-adjusted basis.
We appreciate your investment in Alliance Municipal Income Fund and look
forward to reporting to you again at the end of our fiscal year in October.
Sincerely,
John D. Carifa
Chairman and President
Susan P. Keenan
Senior Vice President
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, GUARANTEED OR ENDORSED
BY, ANY BANK; FURTHER, SUCH SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY.
SHARES OF THE FUND INVOLVE INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF
PRINCIPAL.
2
HOW YOUR PORTFOLIO PERFORMED
OVER THE PAST SIX MONTHS ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
The Portfolios' Class A shares total returns for the periods ended April 30,
1997 are shown below. We have also shown, for comparison, returns for the
overall municipal bond market, represented by the unmanaged state specific
Lipper Municipal Debt Funds Average. Current yields and returns for Class B and
Class C shares are on the next page.
INVESTMENT RESULTS
MUNICIPAL INCOME FUND I - CLASS A SHARES
Period Ended April 30, 1997
TOTAL RETURNS
6 MONTHS 12 MONTHS
---------- ----------
NATIONAL PORTFOLIO 2.18% 7.96%
INSURED NATIONAL PORTFOLIO 0.83% 6.99%
NEW YORK PORTFOLIO 2.43% 7.87%
CALIFORNIA PORTFOLIO 2.01% 7.87%
INSURED CALIFORNIA PORTFOLIO 1.64% 8.18%
LIPPER AVERAGES
6 MONTHS 12 MONTHS
---------- ----------
NATIONAL 1.68% 6.13%
INSURED NATIONAL 1.18% 5.75%
NEW YORK 1.69% 6.17%
CALIFORNIA 1.59% 6.58%
INSURED CALIFORNIA 1.38% 6.54%
INVESTMENT OBJECTIVE AND POLICIES
_______________________________________________________________________________
The five Portfolios of Alliance Municipal Income Fund seek to provide the
highest level of tax-exempt income consistent with moderate investment risk by
investing principally in high-yielding, predominantly medium-quality,
intermediate- and long-term municipal securities. These securities generally
offer higher yields than higher-quality municipal obligations, with interested
credit risk.
3
INVESTMENT RESULTS
AS OF APRIL 30, 1997 (UNAUDITED) ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
---------------------------------------------------------- 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 +7.96% +7.26% +7.95% +3.41% +6.32% +7.50% 5.42% 8.64%
Class B Shares +7.36 N/A +5.74 +4.36 N/A +5.74 4.95 7.61
Class C Shares +7.36 N/A +5.11 +6.36 N/A +5.11 4.96 7.63
INSURED NATIONAL PORTFOLIO
Class A Shares +6.99% +7.16% +7.47% +2.45% +6.24% +7.01% 4.74% 8.11%
Class B Shares +6.40 N/A +5.66 +3.40 N/A +5.66 4.22 7.08
Class C Shares +6.40 N/A +4.93 +5.40 N/A +4.93 4.25 7.08
NEW YORK PORTFOLIO
Class A Shares +7.87% +6.96% +7.00% +3.27% +6.03% +6.55% 5.54% 10.09%
Class B Shares +7.08 N/A +5.29 +4.08 N/A +5.29 5.08 8.78
Class C Shares +7.08 N/A +4.53 +6.08 N/A +4.53 5.09 8.78
CALIFORNIA PORTFOLIO
Class A Shares +7.87% +7.23% +7.81% +3.26% +6.31% +7.35% 5.51% 9.58%
Class B Shares +7.09 N/A +5.83 +4.09 N/A +5.83 5.05 8.32
Class C Shares +7.09 N/A +5.18 +6.09 N/A +5.18 5.06 8.32
INSURED CALIFORNIA PORTFOLIO
Class A Shares +8.18% +6.85% +7.67% +3.60% +5.93% +7.26% 4.80% 9.23%
Class B Shares +7.28 N/A +5.19 +4.28 N/A +5.19 4.31 7.92
Class C Shares +7.36 N/A +4.45 +6.36 N/A +4.45 4.32 7.92
</TABLE>
The average annual total returns reflect reinvestment 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) and Class
C shares (1% year 1). Returns for Class A shares do not reflect the imposition
of the 1 year 1% contingent deferred sales charge for accounts over $1,000,000.
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-day period ended 4/30/97.
4
NATIONAL PORTFOLIO
PORTFOLIO OF INVESTMENTS
APRIL 30, 1997 (UNAUDITED) ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
STANDARD PRINCIPAL
& POOR'S AMOUNT
RATINGS# (000) VALUE
- -------------------------------------------------------------------------
MUNICIPAL BONDS-98.4%
LONG TERM MUNICIPAL BONDS-97.9%
ARIZONA-6.6%
NR Goodyear
Assess Dist #1 Ser 96C
7.25%, 7/01/16 $ 5,375 $ 5,448,046
AA+ Maricopa Cnty
Util Rev (Citizen's Util)
Ser 95 AMT
6.20%, 5/01/30 7,930 8,186,139
AAA Maricopa Cnty IDA
MFHR (Temple Grove Apts)
GNMA Ser 96A AMT
6.20%, 1/20/39 5,320 5,345,749
AA+ Mohave Cnty IDA
Util Rev (Citizen's Util)
Ser 93B AMT
5.80%, 11/15/28 2,000 1,985,620
AA- Mohave Cnty IDR
(Cargill/No Star Steel Proj)
Ser 95A AMT
6.70%, 3/01/20 11,000 11,820,820
AAA Phoenix Arpt Rev
(Sky Hbr/Gdyear/Dr Vly)
MBIA Ser 94D AMT
6.30%, 7/01/10 1,180 1,243,614
AAA Pima Cnty IDA
SFHR (Mortgage Rev)
FNMA Ser 97A AMT
6.25%, 11/01/30 1,150 1,153,830
NR Prescott Comm Fac Dist
(Hassayampa) Ser 96
7.75%, 7/01/21 4,585 4,602,010
------------
39,785,828
CALIFORNIA-10.7%
A California Poll Ctl Fin Auth
PCR (Pacific Gas & Elec)
Ser 93A AMT
5.875%, 6/01/23 15,145 14,798,634
A+ California Poll Ctl Fin Auth
PCR (So Calif Edison)
Ser 92B AMT
6.40%, 12/01/24 2,600 2,648,152
NR Fontana Comm
Fac Dist. #3 (Hunters Ridge)
Ser 90A
8.70%, 10/01/15 8,000 8,290,320
AA- Long Beach Harbor Rev
Ser 93 AMT
5.125%, 5/15/13 16,150 14,863,653
5.125%, 5/15/18 20,325 18,215,468
AAA Los Angeles Harbor Rev
MBIA Ser 96B AMT
6.20%, 8/01/25 5,000 5,171,250
------------
63,987,477
COLORADO-4.0%
Baa* Arapahoe Cnty
(E-470 Public Highway Auth) Ser 86
7.00%, 8/31/26 1,600 1,714,960
BBB Denver City & Cnty
(Arpt System Rev) Ser 92C AMT
6.75%, 11/15/22 9,500 9,920,375
BB+ Denver City & Cnty Arpt Auth
(United Airlines) Ser 92A AMT
6.875%, 10/01/32 11,775 12,183,828
------------
23,819,163
FLORIDA-15.3%
NR Collier Cnty Comm Fac Dist
(Fiddler's Creek) Ser 96
7.50%, 5/01/18 8,310 8,322,133
BBB+ Collier Cnty Hlth Fac
(The Moorings Proj) Ser 94
7.00%, 12/01/19 2,000 2,117,040
NR Collier Cnty IDR
(Southern St Util) Ser 96 AMT
6.50%, 10/01/25 14,605 14,647,793
AAA Dade Cnty Arpt Rev
(Miami Int'l Arpt)
MBIA Ser 95B AMT
6.00%, 10/01/24 6,510 6,539,555
AAA Escambia Cnty HFA
SFMR (Multi County)
GNMA Ser 95B AMT
6.25%, 4/01/28 9,410 9,485,280
AAA Florida HFA
MFHR (Landings at Boot Ranch)
AMBAC Ser 95K AMT
6.10%, 11/01/35 2,050 2,034,912
5
NATIONAL PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
STANDARD PRINCIPAL
& POOR'S AMOUNT
RATINGS# (000) VALUE
- -------------------------------------------------------------------------
AAA Florida HFA
SFMR (Home Mtg) Ser 95A AMT
6.65%, 1/01/24 $ 2,545 $ 2,638,223
AAA Florida HFA
SFMR (Mtg Hsg Fin Agy)
GNMA Coll Ser 94B AMT
6.65%, 7/01/26 3,800 3,928,402
AAA Jacksonville Wtr & Swr Rev
(United Waterworks)
AMBAC Ser 95 AMT
6.35%, 8/01/25 1,500 1,558,155
NR Northern Palm Beach Cnty
Imp Dist #9A (ABACOA) Ser 96A
7.20%, 8/01/16 3,350 3,448,289
7.30%, 8/01/27 15,600 16,055,364
A+ Palm Beach Cnty IDR
(Lourdes-McKeen Residence) Ser 96
6.625%, 12/01/26 2,850 2,984,776
Aaa* Pinellas Cnty HFA
SFMR GNMA Ser 94A AMT
6.55%, 8/01/27 1,855 1,906,476
NR St John's Cnty Comm Dev
(Julington Creek Plantation) Ser 97
6.70%, 5/01/07 3,090 3,096,644
7.125%, 5/01/19 8,695 8,708,738
Baa2* Volusia Cnty Ed Fac Auth
(Embry-Riddle Aero Univ) Ser 96A
6.125%, 10/15/26 3,865 3,869,522
------------
91,341,302
GEORGIA-6.0%
AAA Atlanta
Arpt Fac Rev MBIA AMT
Zero coupon, 1/01/10 75,535 35,789,238
INDIANA-8.8%
BB+ Indianapolis Arpt Auth
(United Airlines) Ser 95A AMT
6.50%, 11/15/31 41,570 42,105,838
AA Warrick Cnty
PCR (So Indiana Gas & Elec Co)
Ser 93B AMT
6.00%, 5/01/23 10,290 10,426,548
------------
52,532,386
MARYLAND-0.2%
NR Maryland Ind Dev Fin Auth Eco Dev
(Med Waste Assoc) Ser 89 AMT
8.75%, 11/15/10 1,440 1,491,394
MASSACHUSETTS-3.9%
AAA Massachusetts HFA
MFHR (Harbor Point Dev)
AMBAC Ser 96A AMT
6.40%, 12/01/15 5,665 5,813,763
AAA Massachusetts HFA
MFHR (Rental Hsg)
AMBAC Ser 95E AMT
6.00%, 7/01/37 2,680 2,616,216
AAA Massachusetts Ind Fin Agy
Elec Rev Sys
(Nantucket Elec Proj)
AMBAC Ser 96A AMT
5.875%, 7/01/17 1,330 1,329,096
AAA Massachusetts Ind Fin Auth
MFHR (Heights Crossing)
FHA Ser 95 AMT
6.15%, 2/01/35 6,285 6,289,148
AAA Massachusetts Port Auth
(USAir Proj) MBIA Ser 96A AMT
5.875%, 9/01/23 7,500 7,308,225
------------
23,356,448
MICHIGAN-3.6%
AAA Kent Cnty GO Arpt Rev
(Kent Cnty Int'l) Ser 95 AMT
6.10%, 1/01/25 4,270 4,347,500
AAA Michigan HDA
MFHR (Rental Hsg Rev )
AMBAC Ser 97A AMT
6.10%, 10/01/33 8,400 8,278,536
6
ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
STANDARD PRINCIPAL
& POOR'S AMOUNT
RATINGS# (000) VALUE
- -------------------------------------------------------------------------
AA+ Michigan HDA
SFMR (Mortgage Rev) Ser 96B AMT
6.20%, 6/01/27 $ 5,805 $ 5,818,468
A- Michigan Strategic Fund
PCR (General Motors Corp) Ser 95
6.20%, 9/01/20 2,770 2,844,042
------------
21,288,546
MINNESOTA-3.4%
BBB+ Bass Brook PCR
(Minnesota Pwr & Light) Ser 92
6.00%, 7/01/22 1,315 1,311,476
AA+ Duluth GO
Arpt Lease Rev Ser 95C AMT
6.25%, 8/01/14 4,100 4,229,847
AA+ Minnesota HFA
SFMR (Home Mortgage) Ser 93-C2 AMT
6.15%, 7/01/23 2,410 2,406,626
AA+ Minnesota HFA
SFMR (Home Mortgage) Ser 96F AMT
6.30%, 1/01/28 3,760 3,794,441
AA+ Minnesota HFA
SFMR (Home Mortgage) Ser 96G AMT
6.25%, 7/01/26 8,500 8,545,050
------------
20,287,440
NEW JERSEY-2.4%
AAA New Jersey Eco Dev Auth
(Hackensack Wtr Co)
MBIA Ser 94B AMT
5.90%, 3/01/24 1,610 1,612,029
AAA New Jersey Eco Dev Auth
PCR (Pub Svc Elec & Gas)
MBIA Ser 94A AMT
6.40%, 5/01/32 5,000 5,165,350
AA- New Jersey Eco Dev Auth
Swr Rev (Anheuser-Busch) Ser 95 AMT
5.85%, 12/01/30 5,425 5,393,101
AAA New Jersey Eco Dev Auth
Wtr Fac (NJ American Wtr Co)
FGIC AMT
6.875%, 11/01/34 825 897,410
AAA New Jersey Hsg & Mtg Fin Agy
MFHR Pooled Loan AMBAC Ser 96A AMT
6.25%, 5/01/28 1,565 1,583,576
------------
14,651,466
NEW YORK-5.1%
AAA Niagara Frontier Trans Auth
Arpt Rev
(Gtr Buffalo Int'l) AMBAC
Ser 94A AMT
6.25%, 4/01/24 1,550 1,596,779
AAAA NYS Energy Res & Dev Auth Gas Rev
(Brooklyn Union Gas) MBIA AMT
5.60%, 6/01/25 1,000 942,090
AAA NYS Energy Res & Dev Auth
PCR (NYS Elec & Gas)
MBIA Ser 87A AMT
6.15%, 7/01/26 15,000 15,122,400
AAA NYS Energy Res & Dev Auth
PCR (NYS Elec & Gas)
MBIA Ser 88A AMT
5.95%, 12/01/27 2,900 2,847,742
AA- Port Auth of NY & NJ
Cons Rev (95th Ser) AMT
6.125%, 7/15/29 10,095 10,196,253
------------
30,705,264
OHIO-5.7%
AAA Cleveland Arpt Rev
(Cleveland Int'l) FGIC Ser 94A AMT
6.25%, 1/01/20 8,750 9,062,287
AAA Columbus Arpt Rev
(PT Columbus Int'l) MBIA Ser 94A AMT
6.25%, 1/01/24 2,390 2,467,054
BBB- Dayton Spec Fac
(Emery Air Freight) Ser 96D AMT
6.20%, 10/01/09 5,775 5,879,701
AAA Ohio Air Quality Dev Auth
(JMG Funding/Ohio Pwr Co)
AMBAC Ser 94B AMT
6.375%, 4/01/29 7,850 8,092,801
7
NATIONAL PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
STANDARD PRINCIPAL
& POOR'S AMOUNT
RATINGS# (000) VALUE
- -------------------------------------------------------------------------
Baa1* Ohio Air Quality Dev Auth
PCR (Columbus So Pwr) Ser 85B
6.25%, 12/01/20 $ 2,795 $ 2,818,785
AAA Ohio HFA
SFMR (Residential Mtg)
GNMA Ser 94B-2 AMT
6.70%, 3/01/25 1,950 2,008,285
A Ohio Wtr Dev Auth Solid
Waste (North Star BHP) AMT
6.45%, 9/01/20 3,745 3,861,245
------------
34,190,158
PENNSYLVANIA-3.4%
AAA Allegheny Cnty Arpt Rev
(Gtr Pittsburgh Int'l)
FSA Ser 92B AMT
6.625%, 1/01/22 2,460 2,599,654
A- Bradford Cnty IDA Solid
Waste (Int'l Paper) Ser 95B AMT
5.90%, 12/01/19 1,000 980,400
BBB Pennsylvania Eco Dev Auth
Waste Wtr (Sun Co) Ser 94A AMT
7.60%, 12/01/24 1,990 2,208,084
AAA Pennsylvania Higher Ed
Student Loan Rev
AMBAC Ser 88D AMT
6.05%, 1/01/19 7,575 7,632,343
AAA Philadelphia Arpt Sys Rev
AMBAC Ser 95A AMT
6.10%, 6/15/25 6,655 6,744,643
------------
20,165,124
RHODE ISLAND-1.4%
AA+ Rhode Island Hsg & Mtg Fin Corp
SFMR (Home Ownership)
Ser 92-7A AMT
6.75%, 10/01/25 8,000 8,262,240
SOUTH DAKOTA-1.6%
AA+ South Dakota HDA
SFMR (Home Ownership)
Ser 93-II AMT
6.15%, 5/01/26 9,600 9,421,632
TENNESSEE-1.4%
BBB Memphis Shelby Cnty Spec Fac
(Federal Express) Ser 93 AMT
6.20%, 7/01/14 8,000 8,096,080
TEXAS-3.9%
BB+ Alliance Arpt Auth Fac Imp
(American Airlines) Ser 90 AMT
7.50%, 12/01/29 11,690 12,497,078
BBB Alliance Arpt Auth Spec Fac
(Federal Express) Ser 96 AMT
6.375%, 4/01/21 3,370 3,373,673
B+ Houston Arpt Rev
(Continental Airlines) Ser 97B AMT
6.125%, 7/15/27 8,000 7,594,320
------------
23,465,071
VIRGINIA-5.0%
A Alexandria Redev & Hsg
MFHR (Buckingham Village)
Ser 96A AMT
6.15%, 1/01/29 4,000 3,999,600
A+ Giles Cnty IDR
(Hoechst-Celanese Corp)
Ser 96 AMT
6.45%, 5/01/26 3,390 3,528,041
AAA Harrisonburg Redev & Hsg Auth
MFHR (Greens of Salem Run)
FSA Ser 97 AMT
6.30%, 4/01/29 3,060 3,075,025
A Henrico Cnty Swr Rev
(Browning-Ferris) Ser 97A AMT
5.875%, 3/01/17 2,750 2,716,450
A- Isle of Wight Cnty IDA
Solid Waste (Union Camp Corp)
Ser 94 AMT
6.55%, 4/01/24 4,000 4,175,000
8
ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
STANDARD PRINCIPAL
& POOR'S AMOUNT
RATINGS# (000) VALUE
- -------------------------------------------------------------------------
AA- James Cnty IDA Swr Rev
(Anheuser-Busch Proj) Ser 97 AMT
6.00%, 4/01/32 $ 3,810 $ 3,812,743
NR Staunton IDA
Ed Fac (Mary Baldwin College) Ser 96
6.75%, 11/01/21 1,355 1,371,165
AA Virginia Beach
Hosp Rev (Sentara Bayside)
6.30%, 11/01/21 1,000 1,031,060
AA+ Virginia HDA SFMR
(Commonwealth Mtg) Ser 96B AMT
6.375%, 1/01/26 5,000 5,045,100
AA Virginia Res Auth Swr Rev
(Hopewell Fac) Ser 95A AMT
6.00%, 10/01/25 1,375 1,378,066
------------
30,132,250
WASHINGTON-3.1%
BBB+ Pilchuck Dev Pub Corp Spec Fac
(BF Goodrich) Ser 93 AMT
6.00%, 8/01/23 19,000 18,317,900
WISCONSIN-2.4%
AAA Wisconsin GO
MBIA Ser 96B AMT
6.20%, 11/01/26 13,930 14,260,698
TOTAL LONG TERM MUNICIPAL BONDS
(cost $578,591,700) 585,347,105
SHORT TERM MUNICIPAL NOTES-0.5%
INDIANA-0.3%
Aaa* Portage Eco Dev Auth
MFHR (Pedcor Invest Apts Proj)
Ser 95A AMT VRDN
4.70%, 8/01/30 (a) 1,900 1,900,000
TEXAS-0.2%
A1 Rockwall Ind Dev Corp
IDR (Columbia Extrusion Corp)
Ser 89 AMT VRDN
4.70%, 7/01/14 (a) 1,200 1,200,000
TOTAL SHORT TERM MUNICIPAL NOTES
(cost $3,100,000) 3,100,000
TOTAL INVESTMENTS-98.4%
(cost $581,691,700) 588,447,105
Other assets less liabilities-1.6% 9,558,215
NET ASSETS-100% $598,005,320
See footnote summary on page 20.
See notes to financial statements.
9
INSURED NATIONAL PORTFOLIO
PORTFOLIO OF INVESTMENTS
APRIL 30, 1997 (UNAUDITED) ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
STANDARD PRINCIPAL
& POOR'S AMOUNT
RATINGS# (000) VALUE
- -------------------------------------------------------------------------
MUNICIPAL BONDS-99.0%
LONG TERM MUNICIPAL BONDS-96.6%
ALABAMA-2.0%
AAA West Jefferson PCR
(Alabama Power) MBIA Ser 93C
6.05%, 5/01/23 $ 4,470 $ 4,513,582
ALASKA-18.6%
AAA Alaska Hsg Fin Corp
MFHR (Mtg Rev) MBIA Ser 96A
6.00%, 12/01/15 6,400 6,371,264
6.05%, 12/01/17 2,000 2,009,500
AAA Alaska Hsg Fin Corp
SFMR Mtg Rev MBIA Ser 97A
6.00%, 6/01/27 25,000 24,689,750
6.10%, 12/01/37 10,000 9,866,200
------------
42,936,714
ARIZONA-4.6%
AAA Glendale IDA
Ed Fac (Midwestern Univ)
CONNIE LEE Ser 96A
6.00%, 5/15/26 840 848,072
AAA Maricopa Cnty GO
Kyrene Elem Sch Imp #28
FGIC Ser 95B
6.00%, 7/01/14 1,800 1,848,204
AA Phoenix IDA
MFHR (Woodstone & Silver Springs)
Ser 93 Asset Gty
6.25%, 4/01/23 2,360 2,395,046
AA+ Phoenix Sr Lien
(Civic Plaza Bldg Corp) Ser 94
6.00%, 7/01/12 1,015 1,045,876
AAA Tempe IDR
MFHR (Quadrangles) FHA Ser 93
6.25%, 6/01/26 4,525 4,593,373
------------
10,730,571
CALIFORNIA-15.2%
AAA Fairfield Pub Fin Auth
Tax Alloc (Fairfield Proj)
FSA Ser 93C
5.50%, 8/01/23 3,000 2,848,200
AAA Mojave Wtr Agy
Imp Dist M (Morongo Basin Pipeline)
FGIC Ser 96
5.80%, 9/01/22 5,000 4,979,750
AAA No Calif Trans Agy Elec
Rev (Calif-Oregon Trans)
MBIA Ser 93A
6.929%, 4/29/24 (b) 4,250 3,849,948
AAA Orange Cnty
(Saddleback Valley Sch Dist)
FSA Ser 95A
5.65%, 9/01/17 5,000 4,893,150
AAA Palm Springs ETM COP
Ser 91B
Zero coupon, 4/15/21 44,025 10,589,773
AAA So Tahoe Joint Pwr Fin Auth
Ser 95A CAP MAC
5.75%, 10/01/25 4,500 4,419,360
AAA Univ of California Regents
Hosp Rev (UCLA Med Ctr) MBIA Ser 94
5.50%, 12/01/20 3,685 3,530,046
------------
35,110,227
COLORADO-2.7%
AAA Denver City & Cnty Arpt Sys Rev
MBIA Ser 95A
5.70%, 11/15/25 6,375 6,251,580
FLORIDA-2.2%
A* Dade Cnty GO
(Courthouse Ctr Proj) Ser 95
6.10%, 4/01/20 900 916,668
AA- Orlando Util Comm
(Wtr & Elec) Ser 93B
7.037%, 10/06/17 (b) 4,550 4,255,615
------------
5,172,283
ILLINOIS-1.8%
AAA Metro Pier & Expo Auth
(McCormick Place Expo)
FGIC Ser 93A
Zero coupon, 6/15/19 15,850 4,252,080
10
ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
STANDARD PRINCIPAL
& POOR'S AMOUNT
RATINGS# (000) VALUE
- -------------------------------------------------------------------------
MASSACHUSETTS-13.2%
AAA Chelsea GO
AMBAC Ser 94
6.00%, 6/15/14 $ 1,345 $ 1,389,667
AAA Holyoke GO
FSA Ser 93B
6.125%, 8/01/13 1,435 1,495,557
AAA Massachusetts Bay Tran
Auth Trans Sys MBIA Ser 92C
6.10%, 3/01/23 2,265 2,342,508
AAA Massachusetts HFA
MFHR (Residential Dev)
AMBAC Ser 93A
6.15%, 10/01/15 4,500 4,569,930
AAA Massachusetts HFA
MFHR (Residential Dev)
FNMA Coll Sec 8 Ser 92F
6.25%, 11/15/12 5,000 5,150,900
AAA Massachusetts HFA
SFMR (Residential Dev) FNMA Ser 92A
6.90%, 11/15/24 2,500 2,639,125
AAA Massachusetts Hlth & Ed
Fac Hosp Rev
(New England Med Ctr) MBIA
6.98%, 7/01/18 (b) 4,175 3,606,449
A3* Massachusetts Ind Fin Auth
Ed Fac (Brooks School) Ser 93
5.95%, 7/01/23 1,530 1,530,000
AAA Massachusetts Muni Wholesale Elec
(Pwr Supply Sys) MBIA Ser 92A
6.00%, 7/01/18 5,220 5,249,284
AA- Massachusetts Wtr Poll
(So Essex Proj) Ser 94A
6.375%, 2/01/15 2,315 2,421,120
------------
30,394,540
MICHIGAN-8.7%
AAA Detroit GO
FGIC Ser 93
6.35%, 4/01/14 4,115 4,293,673
AAA Grand Rapids Swr Sys Rev
MBIA Ser 92
6.00%, 1/01/22 1,795 1,820,345
AAA Kalamazoo Hosp Fin Auth Hosp Rev
(Borgess Med Ctr) FGIC Ser 94A
6.608%, 6/01/11 (b) 6,740 6,180,715
AAA Michigan Strategic Fund
PCR (Detroit Edison Co)
MBIA Ser 95AA
6.40%, 9/01/25 4,300 4,501,240
AAA Three Rivers GO
Sch Dist MBIA Ser 96
6.00%, 5/01/23 1,690 1,747,697
AA Troy Downtown Dev Auth
Ser 95A Asset Gty
6.375%, 11/01/18 1,400 1,452,556
------------
19,996,226
MINNESOTA-5.6%
Aaa* Eagan
MFHR (Woodridge Apts Proj)
GNMA Ser 97A
5.95%, 2/01/32 1,470 1,469,838
Aaa* Little Canada
MFHR (Cedars Lakeside Apt)
GNMA Ser 97A
5.95%, 2/01/32 1,715 1,714,812
AAA Minneapolis COP
(Spec Sch Dist #1) MBIA Ser 96A
5.90%, 2/01/17 4,080 4,118,352
AAA Minnesota HFA
MFHR (Rental Hsg) MBIA Ser 95D
6.00%, 2/01/22 4,350 4,365,399
AAA St Francis GO
(Ind Sch Dist #15) FSA Ser 95A
6.375%, 2/01/16 1,135 1,214,427
------------
12,882,828
NEBRASKA-1.5%
AAA Nebraska Inv Fin Auth Hosp Rev
(Bishop Clarkson Mem) MBIA Ser 91
9.234%, 12/08/16 (b) 3,000 3,376,650
11
INSURED NATIONAL PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
STANDARD PRINCIPAL
& POOR'S AMOUNT
RATINGS# (000) VALUE
- -------------------------------------------------------------------------
NEW JERSEY-0.6%
AA- New Jersey Hwy Auth
(Garden State Pkwy)
6.25%, 1/01/14 $ 1,250 $ 1,295,213
NEW YORK-3.9%
Aaa* Glen Cove IDR
(The Regency at Glen Cove)
Ser 92B ETM
Zero coupon, 10/15/19 15,000 3,919,350
AAA New York City GO
MBIA Ser 93D
6.00%, 5/15/11 5,000 5,105,100
------------
9,024,450
OHIO-5.0%
A Cuyahoga Cnty Hosp Rev
(Meridia Hlth Sys) Ser 95
6.25%, 8/15/24 2,785 2,854,681
AA- Ohio Air Quality Dev Auth
PCR (Dayton Power & Light) Ser 92B
6.40%, 8/15/27 2,000 2,104,100
AA- Ohio Trpk Comm Rev
Ser 94A
5.75%, 2/15/24 2,700 2,656,233
Aa3* Toledo-Lucas Cnty Port Auth IDR
(Cargill Inc Proj)
5.90%, 12/01/15 4,000 4,017,600
------------
11,632,614
PENNSYLVANIA-1.8%
AAA Pennsylvania Trpk Comm
(Oil Franchise Tax Rev)
AMBAC Ser 94A
6.00%, 12/01/19 3,000 3,045,630
AA Potter Cnty Hosp Auth Hosp Rev
(Charles Cole Mem Hosp)
Ser 96 Asset Gty
6.05%, 8/01/24 1,005 1,005,693
------------
4,051,323
VIRGINIA-6.7%
Aa* Chesapeake IDR
(Cargill Inc. Proj) Ser 93
5.875%, 3/01/13 1,000 1,019,330
AAA Harrisonburg Redev & Hsg Auth
MFHR (Battery Heights Assoc)
GNMA Ser 96A
6.25%, 4/20/36 5,185 5,271,175
AA Henrico Cnty IDR
(Henrico Cnty Reg Jail) Ser 94
7.125%, 8/01/21 1,650 1,857,174
AAA Loudoun Cnty IDA
(Loudoun Hosp Ctr) FSA Ser 95
5.80%, 6/01/20 2,110 2,099,260
AAA Newport News Hlth Fac
(Mennowood) GNMA Ser 96A
6.25%, 8/01/36 2,240 2,280,006
A2* Prince William Cnty
Hosp Rev (Potomac Hosp Grp) Ser 95
6.75%, 10/01/15 1,905 2,021,815
AAA Richmond Met Auth
(Expressway Rev) FGIC Ser 92B
6.25%, 7/15/22 1,000 1,029,610
------------
15,578,370
WEST VIRGINIA-2.5%
AAA West Virginia Pkwys Eco Dev
(Parkway Rev) FGIC Ser 93
7.555%, 5/16/19 (b) 6,000 5,825,040
TOTAL LONG TERM MUNICIPAL BONDS
(cost $220,504,754) 223,024,291
12
ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
STANDARD PRINCIPAL
& POOR'S AMOUNT
RATINGS# (000) VALUE
- -------------------------------------------------------------------------
SHORT TERM MUNICIPAL NOTES-2.4%
ILLINOIS-0.6%
Aa3* Illinois Ed Fac Auth
(Cultural Pooled Financial Proj)
Ser 85 VRDN
4.50%, 12/01/25 (a) $1,400 $ 1,400,000
INDIANA-1.8%
A1 Indiana Hlth Fac Fin Auth
(Capital Access Designated Pool)
Ser 91 VRDN
4.55%, 8/01/06 (a) $4,100 $ 4,100,000
TOTAL SHORT TERM MUNICIPAL NOTES
(cost $5,500,000) 5,500,000
TOTAL INVESTMENTS-99.0%
(cost $226,004,754) 228,524,291
Other assets less liabilities-1.0% 2,274,751
NET ASSETS-100% $230,799,042
See footnote summary on page 20.
See notes to financial statements.
13
NEW YORK PORTFOLIO
PORTFOLIO OF INVESTMENTS
APRIL 30, 1997 (UNAUDITED) ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
STANDARD PRINCIPAL
& POOR'S AMOUNT
RATINGS# (000) VALUE
- -------------------------------------------------------------------------
NEW YORK MUNICIPAL BONDS-100.4%
A- Essex County IDA
(Int'l Paper) Ser 95A AMT
5.80%, 12/01/19 $ 7,000 $ 6,810,860
Aaa* Glen Cove IDR
(The Regency at Glen Cove)
Ser 92B ETM
Zero coupon, 10/15/19 45,010 11,760,663
AAA Islip Res Rec Agy
AMBAC Ser 94B AMT
6.125%, 7/01/12 2,020 2,074,580
BBB+ New York City GO
Ser 93A
6.25%, 8/01/18 6,000 6,026,940
BBB+ New York City GO
Ser 93D
7.499%, 8/29/14 (b) 10,000 9,646,300
BBB+ New York City GO
Ser 96J
6.00%, 2/15/24 13,580 13,054,590
BBB+ New York City GO
Ser 97A
6.25%, 8/01/17 16,750 16,855,357
BB+ New York City IDA
(American Airlines) Ser 94 AMT
6.90%, 8/01/24 12,000 12,928,440
AAA New York City IDA
(Japan Airlines) FSA Ser 91 AMT
6.00%, 11/01/15 4,500 4,643,235
A New York City IDA
(Terminal One LP) Ser 94 AMT
6.125%, 1/01/24 41,500 41,360,560
AAA Niagara Frontier Trans Arpt Auth
(Gtr Buffalo Int'l)
AMBAC Ser 94A AMT
6.25%, 4/01/24 14,575 15,014,874
AAA NYS Energy Res & Dev Auth
(Brooklyn Union Gas) MBIA AMT
5.60%, 6/01/25 2,000 1,884,180
7.214%, 7/08/26 (b) 6,000 5,306,280
AAA NYS Energy Res & Dev Auth
(Brooklyn Union Gas)
MBIA Ser 89B AMT
6.75%, 2/01/24 7,500 8,079,825
A+ NYS Energy Res & Dev Auth
NYS Elec & Gas
(Consolidated Edison)
Ser 94A AMT
7.125%, 12/01/29 22,000 24,350,260
AAA NYS Energy Res & Dev Auth
NYS Elec & Gas MBIA Ser 93A AMT
5.70%, 12/01/28 12,050 11,409,784
AAA NYS Energy Res & Dev Auth
(Rochester Gas & Elec) MBIA AMT
6.50%, 5/15/32 6,460 6,824,473
AAA NYS Energy Res & Dev Auth
PCR (NYS Elec & Gas)
MBIA Ser 88A AMT
5.95%, 12/01/27 3,800 3,731,524
BBB NYS Envir Fac Auth IDR
(Occidental Petroleum)
Ser 93A AMT
5.70%, 9/01/28 13,950 12,917,421
NR NYS Envir Fac Corp Wtr Fac
(Long Island Wtr Corp)
Ser 87A AMT
10.00%, 10/01/17 3,200 3,307,680
AAA NYS Envir Fac Corp Wtr Fac
(Spring Valley Wtr)
AMBAC Ser 94A AMT
6.30%, 8/01/24 11,800 12,164,974
AAA NYS HFA
MFHR (Erie/Monroe Cnty Proj) AMBAC
Ser 89B AMT
7.55%, 11/01/29 9,315 9,717,035
Aa2* NYS HFA
MFHR (Westchester/Onondaga/
Rockland Proj) Ser 92F AMT
6.70%, 8/15/25 6,000 6,200,820
14
ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
STANDARD PRINCIPAL
& POOR'S AMOUNT
RATINGS# (000) VALUE
- -------------------------------------------------------------------------
Aa2* NYS Mtg Agy
SFMR Ser 42 AMT
6.65%, 4/01/26 $ 4,500 $ 4,634,775
Aa2* NYS Mtg Agy
SFMR Ser 46 AMT
6.65%, 10/01/25 19,915 20,579,365
AAA Onondaga Cnty
PCR (Bristol-Myers Squibb) AMT
5.75%, 3/01/24 4,000 3,983,360
AAA Port Auth of NY & NJ
(JFK Int'l Arpt) MBIA Ser 97-6 AMT
5.75%, 12/01/22 7,495 7,308,524
AA- Port Auth of NY & NJ
Cons Rev (95th Ser) AMT
6.125%, 7/15/29 5,555 5,610,717
AAA Port Auth of NY & NJ
Cons Rev (96th Ser) FGIC AMT
6.60%, 10/01/23 10,000 10,740,600
AAA Troy HDC
MFHR (Ninth St #2) FHA Ser 90B
8.10%, 2/01/24 3,535 3,882,596
AAA Troy HDC
MFHR (TUR Proj) FHA Ser 90C
8.10%, 2/01/24 3,760 4,129,721
TOTAL NEW YORK MUNICIPAL BONDS
(cost $298,362,636) 306,940,313
PUERTO RICO-0.3%
BB+ Puerto Rico Port Auth
(American Airlines) Ser 96A AMT
6.25%, 6/01/26
(cost $802,640) 800 807,584
TOTAL INVESTMENTS-100.7%
(cost $299,165,276) 307,747,897
Other assets less liabilities -(0.7%) (2,185,443)
NET ASSETS-100% $305,562,454
See footnote summary on page 20.
See notes to financial statements.
15
CALIFORNIA PORTFOLIO
PORTFOLIO OF INVESTMENTS
APRIL 30, 1997 (UNAUDITED) ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
STANDARD PRINCIPAL
& POOR'S AMOUNT
RATINGS# (000) VALUE
- -------------------------------------------------------------------------
CALIFORNIA MUNICIPAL BONDS-98.5%
A+ California GO
(Veterans Hsg) Ser 95 AMT
6.40%, 2/01/20 $33,800 $34,814,000
AAA California HFA
MFHR (Home Mtg Rev)
MBIA Ser 91A AMT
7.20%, 2/01/26 3,450 3,616,704
AAA California HFA
MFHR (Home Mtg Rev)
MBIA Ser 91C AMT
7.00%, 8/01/23 1,475 1,537,348
A+ California HFA
MFHR (Multi-Unit Rental Hsg)
Ser 92A AMT
6.50%, 2/01/14 4,865 4,976,992
AAA California HFA
SFMR (Home Mtg Rev)
AMBAC Ser 96H AMT
6.20%, 2/01/27 8,000 8,018,240
AA- California HFA
SFMR (Home Mtg Rev) Ser 91G AMT
7.05%, 8/01/27 5,265 5,438,008
AA- California HFA
SFMR (Home Mtg Rev) Ser 94E AMT
6.70%, 8/01/25 9,525 9,839,897
AAA California HFA
SFMR (Home Mtg Rev) Ser 95A-2 AMT
6.45%, 8/01/25 13,400 13,726,692
A California Poll Ctl Fin Auth
(Browning-Ferris Ind) Keller
Canyon Gty Ser 92 AMT
6.875%, 11/01/27 5,000 5,316,450
A California Poll Ctl Fin Auth
PCR (Pacific Gas & Elec)
Ser 93A AMT
5.875%, 6/01/23 33,200 32,440,716
A California Poll Ctl Fin Auth
PCR (Pacific Gas & Elec)
Ser 93B AMT
5.85%, 12/01/23 70,000 68,156,900
A+ California Poll Ctl Fin Auth
PCR (San Diego Gas & Elec)
Ser 93A-C AMT
5.85%, 6/01/21 32,335 31,679,246
A+ California Poll Ctl Fin Auth
PCR (So Calif Edison) Ser 92B AMT
6.40%, 12/01/24 33,430 34,049,124
A+ Chula Vista
PCR (San Diego Gas & Elec)
Ser 92A AMT
6.40%, 12/01/27 28,240 29,195,077
Aaa* Contra Costa Cnty
MFHR (Byron Park Proj)
GNMA Ser 93A AMT
6.40%, 1/20/31 11,860 12,115,464
NR Encinitas Comm
Fac Dist #1 (Encinitas Ranch)
Ser 95A
7.375%, 9/01/26 23,000 23,429,180
NR Encinitas Rec Rev
(Encinitas Ranch Golf Course)
Ser 96A
7.75%, 9/01/26 10,760 10,928,179
NR Fairfield Assess Dist
(No Cordelia Imp Dist) Ser 93
7.375%, 9/02/18 2,390 2,453,335
AAA Fairfield Pub Fin Auth
Tax Alloc (Fairfield Proj)
FSA Ser 93C
5.50%, 8/01/23 1,000 949,400
AAA Fremont FHA
MFHR (Regency Sq Apts) Ser 86A AMT
7.75%, 11/01/28 1,500 1,582,260
A Lancaster Redev Agy FHA
MFHR (High Valley Apts) Ser 96A
6.00%, 6/01/27 4,170 4,101,320
AAA Los Angeles Cnty Arpt Rev
(Ontario Int'l Arpt) FGIC
Ser 96A AMT
6.00%, 5/15/22 12,780 12,846,584
NR Los Angeles Cnty Comm
Fac Dist #3 (Valencia/Newhall Area)
Ser 95A
7.125%, 9/01/20 5,500 5,577,385
16
ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
STANDARD PRINCIPAL
& POOR'S AMOUNT
RATINGS# (000) VALUE
- -------------------------------------------------------------------------
NR Los Angeles Cnty Comm
Fac Dist #4 (Calabasas Area)
Ser 92A
7.65%, 9/01/17 $ 7,500 $ 7,721,400
NR Los Angeles Cnty Comm
Fac Dist #92-1
(Castaic Union SD Northlake Proj)
Ser 92
9.00%, 10/01/19 8,710 9,011,976
BB Los Angeles Comm Redev
MFHR (Grand Ctrl Proj) Ser 93A AMT
5.85%, 12/01/26 4,030 3,643,724
AAA Los Angeles Harbor Rev
MBIA Ser 96B AMT
6.20%, 8/01/25 5,000 5,171,250
AA Los Angeles Harbor Rev
Ser 95A AMT
6.625%, 8/01/25 24,000 25,211,760
NR Novato Comm
Fac Dist #94-1
(Hamilton Field) Ser 95
7.375%, 9/01/25 4,400 4,565,000
NR Ontario Assess Dist #107
(CA Commerce Ctr So)
7.70%, 9/02/10 6,130 6,315,862
NR Orange Cnty
Comm Fac Dist # 92-1:
Las Flores/Capistrano USD Ser 97
7.10%, 9/01/21 3,200 3,257,408
AAA Orange Cnty Arpt Rev
(John Wayne Int'l Arpt)
MBIA Ser 93 AMT
5.50%, 7/01/18 16,500 15,649,590
NR Orange Cnty Comm
Fac Dist #87-2 (Portola Hills)
Ser 91A
9.30%, 8/15/16 8,950 9,339,146
BBB- Orange Cnty Sr Lien
Foothill/Eastern Corridor Agy
Ser 95A
Zero coupon, 1/01/15 18,500 6,031,185
Zero coupon, 1/01/25 15,000 2,523,450
Zero coupon, 1/01/27 10,000 1,478,800
Zero coupon, 1/01/28 10,000 1,386,500
BBB Orange Cnty Sr Lien
San Joaquin Hills Trans
Corridor Ser 93
Zero coupon, 1/01/17 16,000 4,585,440
Zero coupon, 1/01/19 20,000 5,100,600
Zero coupon, 1/01/20 20,000 4,736,600
Zero coupon, 1/01/21 20,000 4,444,800
Zero coupon, 1/01/23 35,000 6,849,500
Zero coupon, 1/01/25 33,100 5,628,324
7.00%, 1/01/30 15,000 15,823,650
AAA Palm Springs COP
Ser 91B ETM
Zero coupon, 4/15/21 10,000 2,405,400
AAA Palm Springs Fin Auth
Arpt Rev
(Palm Springs Regional Arpt)
MBIA Ser 92 AMT
6.00%, 1/01/22 6,860 6,904,110
A Port of Oakland
(Mitsui OSK Lines) Ser 92A AMT
6.80%, 1/01/19 3,700 3,837,122
AAA Port of Oakland
MBIA Ser 92E AMT
6.40%, 11/01/22 23,370 24,125,786
6.50%, 11/01/16 8,000 8,346,000
NR Riverside Comm
Fac Dist #90-1 (Highlander Proj)
Ser 91A
8.50%, 9/01/15 2,000 2,047,500
NR Riverside Cnty Assess Dist #161
(Winchester Prop) Ser 94C
10.00%, 9/02/14 7,005 7,383,130
AAA Sacramento Cnty Arpt Sys Rev
FGIC Ser 92A AMT
6.00%, 7/01/20 11,750 11,796,177
AAA Sacramento Cnty Arpt Sys Rev
MBIA Ser 96A AMT
5.90%, 7/01/24 5,050 4,995,561
AAA San Bernardino Cnty Solid Waste
(Inland Empire) FSA Ser 96B AMT
6.00%, 8/01/16 2,500 2,503,750
17
CALIFORNIA PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
STANDARD PRINCIPAL
& POOR'S AMOUNT
RATINGS# (000) VALUE
- -------------------------------------------------------------------------
NR San Diego Comm
Fac Dist #1 (Miramar Ranch North)
Ser 95B
7.10%, 9/01/20 $ 7,000 $ 7,101,150
AAA San Francisco City & Cnty
Int'l Arpt
AMBAC Ser 94 II-6 AMT
6.60%, 5/01/24 5,000 5,302,200
AAA San Francisco City & Cnty
Int'l Arpt
FGIC Ser 94 II-5 AMT
6.50%, 5/01/24 11,000 11,509,850
AAA San Francisco City & Cnty
Int'l Arpt
FGIC Ser 96-II AMT
6.25%, 5/01/26 7,000 7,159,110
AAA San Francisco City & Cnty
Int'l Arpt
MBIA Ser 10A AMT
5.70%, 5/01/26 14,385 13,833,335
AAA San Francisco City & Cnty
Int'l Arpt MBIA Ser 10B
5.50%, 5/01/26 5,000 4,790,600
AAA San Francisco City & Cnty
Int'l Arpt
MBIA Ser 93 II-3 AMT
6.10%, 5/01/13 7,990 8,177,286
6.20%, 5/01/20 14,500 14,792,175
AAA San Jose Arpt Rev
(San Jose Arpt) FGIC Ser 93 AMT
5.70%, 3/01/18 8,825 8,634,821
AAA So Calif HFA
SFMR GNMA/FNMA Ser 92A AMT
6.75%, 9/01/22 1,425 1,476,699
Ser 91B
6.90%, 10/01/24 1,635 1,699,860
A Vacaville Redev Agy
MFHR (Vacaville Comm Hsg) Ser 94A
7.85%, 11/01/24 4,625 4,943,755
BBB+ Westminster Redev Agy
MFHR (Rose Garden Apt) AMT Ser 93A
6.75%, 8/01/24 4,300 4,346,440
AAA Yolo Cnty Hsg Auth
MFHR (Waggener Ranch Apts)
FHA Ser 91 AMT
7.00%, 10/01/33 9,000 9,543,960
TOTAL INVESTMENTS-98.5%
(cost $655,504,791) 682,920,243
Other assets less liabilities-1.5% 10,422,089
NET ASSETS-100% $693,342,332
See footnote summary on page 20.
See notes to financial statements.
18
INSURED CALIFORNIA PORTFOLIO
PORTFOLIO OF INVESTMENTS
APRIL 30, 1997 (UNAUDITED) ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
STANDARD PRINCIPAL
& POOR'S AMOUNT
RATINGS# (000) VALUE
- -------------------------------------------------------------------------
CALIFORNIA MUNICIPAL BONDS-98.7%
LONG TERM MUNICIPAL BONDS-97.5%
AAA Alhambra COP
Assess Dist #91-1:
Police Fac AMBAC Ser 92
6.75%, 9/01/23 $ 5,000 $ 5,360,050
AAA Brea Pub Fin Auth
Tax Alloc Redev Proj B MBIA Ser 91A
7.00%, 8/01/15 1,470 1,600,022
AAA California HFA
MFHR (Home Mtg Rev) AMBAC Ser 95A
6.25%, 2/01/37 5,000 5,069,650
AAA Coronado Comm Dev Proj
Tax Alloc FSA Ser 96
6.00%, 9/01/26 8,700 8,856,513
AAA Fontana Pub Fin Auth
Tax Alloc (No Fontana) MBIA Ser 93A
5.625%, 9/01/24 9,805 9,530,950
NR Fontana Redev Agy
BAN (Jurupa Hills Proj) Ser 94
8.00%, 1/01/98 5,000 5,033,000
AAA Glendale Hlth Fac Rev
(Glendale Mem Hosp)
CONNIE LEE Ser 95A
5.60%, 11/15/25 2,000 1,899,140
AAA La Mirada Redev Agy
Tax Alloc (Commercial Redev)
FSA Ser 95B
5.90%, 8/15/24 5,000 5,026,250
AAA Los Angeles Cnty Comm Redev
Tax Alloc (Bunker Hill Proj)
FSA Ser 93H
5.60%, 12/01/28 10,000 9,572,100
AAA Los Angeles Cnty
Metro Trans Auth MBIA Ser 93A
5.625%, 7/01/18 3,000 2,925,510
AAA Los Angeles Cnty Trans Comm
FGIC Ser 91B
6.50%, 7/01/15 5,000 5,295,400
AAA Madera Cnty COP
Hosp Rev (Valley Children's)
MBIA Ser 95
6.125%, 3/15/23 4,000 4,093,200
AAA Mojave Wtr Agy
Imp Dist M
(Morongo Basin Pipeline)
FGIC Ser 96
5.80%, 9/01/22 5,000 4,979,750
AAA No Calif Trans Agy
Elec Rev (Calif-Oregon Trans)
MBIA Ser 93A
6.929%, 4/29/24 (b) 15,000 13,588,050
AAA Orange Cnty COP
(Loma Ridge Data Ctr Proj)
AMBAC Ser 91
6.00%, 6/01/19 1,000 1,019,650
AAA Orange Cnty Recovery Certificate
MBIA Ser 96A
6.00%, 7/01/26 3,000 3,021,540
AAA Palm Springs ETM COP
Ser 91B
Zero coupon, 4/15/21 32,475 7,811,536
AAA Rancho Wtr Dist Fin Auth
AMBAC Ser 91 Pre-refunded
8.924%, 9/11/01 (b) 3,000 3,501,690
AAA Redding COP
Elec Sys Rev MBIA Ser 92A
8.244%, 7/01/22 (b) 2,000 2,323,940
AAA Sacramento Cnty Arpt Sys Rev
MBIA Ser 96B
5.75%, 7/01/26 3,260 3,200,929
AAA Sacramento Muni Util Dist
Elec Rev
MBIA Ser 93E
5.75%, 5/15/22 5,000 4,980,150
AAA San Bernardino Cnty Redev
(Ontario Proj #1) ETM MBIA Ser 93
5.80%, 8/01/23 10,000 9,866,300
19
INSURED CALIFORNIA PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
STANDARD PRINCIPAL
& POOR'S AMOUNT
RATINGS# (000) VALUE
- -------------------------------------------------------------------------
AAA San Bernardino Redev Agy Tax Alloc
(Joint Pwr Fin Auth) FSA Ser 95A
5.75%, 10/01/25 $5,000 $ 4,944,450
AAA San Dimas Redev Agy
(Creative Growth) FSA Ser 91A
6.75%, 9/01/16 1,000 1,070,010
AAA San Francisco City & Cnty Int'l Arpt
MBIA Ser 93 II-4
6.00%, 5/01/14 5,000 5,085,500
AAA Shasta Lake COP
Elec Sys Rev FSA Ser 96-2
6.00%, 4/01/16 2,895 2,931,448
TOTAL LONG TERM MUNICIPAL BONDS
(cost $130,496,722) 132,586,728
SHORT TERM MUNICIPAL NOTES-1.2%
AAA Irvine Ranch Wtr Dist
Ser 85B VRDN
3.75%, 10/01/04 (a) $1,700 $ 1,700,000
TOTAL INVESTMENTS-98.7%
(cost $132,196,722) 134,286,728
Other assets less liabilities-1.3% 1,750,877
NET ASSETS-100% $136,037,605
# Unaudited.
* Moody's or Fitch Rating.
(a) Variable Rate Demand Notes (VRDN) are instruments whose interest rates
change on a specific date (such as coupon date or interest payment date) or
whose interest rates vary with changes in a designated base rate (such as the
prime interest rate). This instrument is payable on demand and is secured by
letters of credit or other credit support agreements from major banks.
(b) Inverse floater security--security with variable or floating interest rate
that moves in opposite direction of short-term interest rates.
See Glossary of Terms below.
See notes to financial statements.
Glossary of Terms:
AMBAC American Municipal Bond Assurance Corporation
AMT Alternative Minimum Tax--(subject to)
BAN Bond Anticipation Note
CAP MAC Capital Markets Assurance Corporation
CONNIE LEE Connie Lee Insurance Company
COP Certificate of Participation
ETM Escrow to Maturity
FGIC Financial Guaranty Insurance Company
FHA Federal Housing Administration
FNMA Federal National Mortgage Association
FSA Financial Security Assurance Inc.
GNMA Government National Mortgage Association
GO Government Obligation
HDA Housing Development Authority
HDC Housing Development Corporation
HFA Housing Finance Authority
IDA Industrial Development Authority
IDR Industrial Development Revenue
MBIA Municipal Bond Investors Assurance
MFHR Multi-Family Housing Revenue
NR Rating not applied for
PCR Pollution Control Revenue
SFHR Single Family Housing Revenue
SFMR Single Family Mortgage Revenue
20
STATEMENTS OF ASSETS AND LIABILITIES
APRIL 30, 1997 (UNAUDITED) ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
<TABLE>
<CAPTION>
INSURED INSURED
NATIONAL NATIONAL NEW YORK CALIFORNIA CALIFORNIA
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments in securities, at value (cost:
National-$581,691,700; Ins. National-
$226,004,754; New York-$299,165,276;
California-$655,504,791; Ins. California-
$132,196,722, respectively) $588,447,105 $228,524,291 $307,747,897 $682,920,243 $134,286,728
Cash -0- -0- 958,070 -0- -0-
Interest receivable 10,836,236 3,187,223 4,761,073 13,567,982 2,205,578
Receivable for investment securities sold 379,016 1,293,166 -0- -0- -0-
Receivable for capital stock sold 328,361 47,512 195,993 743,628 64,765
Prepaid expenses and other assets 88,962 43,828 15,007 34,059 7,175
Total assets 600,079,680 233,096,020 313,678,040 697,265,912 136,564,246
LIABILITIES
Due to custodian 71,064 1,603,138 -0- 1,549,023 23,939
Payable for capital stock redeemed 449,563 98,577 101,832 633,743 44,181
Distribution fee payable 309,602 95,299 149,558 312,220 54,915
Advisory fee payable 98,039 94,351 37,319 169,907 60,935
Payable for investment securities purchased -0- -0- 7,264,470 -0- -0-
Accrued expenses and other liabilities 1,146,092 405,613 562,407 1,258,687 342,671
Total liabilities 2,074,360 2,296,978 8,115,586 3,923,580 526,641
NET ASSETS $598,005,320 $230,799,042 $305,562,454 $693,342,332 $136,037,605
COMPOSITION OF NET ASSETS
Capital stock, at par $ 57,231 $ 23,143 $ 31,752 $ 65,970 $ 10,251
Additional paid-in capital 603,106,475 226,886,636 302,830,986 683,022,154 134,590,315
Distribution in excess of net investment income (206,935) (512,098) (197,760) (31,232) -0-
Undistributed net investment income -0- -0- -0- -0- 271,856
Accumulated net realized gain (loss) on
investments (11,706,856) 1,881,824 (5,685,145) (17,130,012) (924,823)
Net unrealized appreciation of investments 6,755,405 2,519,537 8,582,621 27,415,452 2,090,006
$598,005,320 $230,799,042 $305,562,454 $693,342,332 $136,037,605
CLASS A SHARES
Net Assets $315,866,304 $164,508,520 $174,364,293 $443,843,660 $ 97,753,027
Shares of capital stock outstanding 30,229,353 16,495,589 18,119,935 42,232,463 7,367,015
CLASS B SHARES
Net Assets $194,976,076 $ 46,685,680 $ 92,696,376 $158,492,766 $ 25,878,051
Shares of capital stock outstanding 18,660,104 4,681,906 9,631,132 15,079,124 1,949,722
CLASS C SHARES
Net assets $ 87,162,940 $ 19,604,842 $ 38,501,785 $ 91,005,906 $ 12,406,527
Shares of capital stock outstanding 8,341,971 1,965,998 4,000,537 8,658,002 934,723
CALCULATION OF MAXIMUM OFFERING PRICE
CLASS A SHARES
Net asset value and redemption price per share $10.45 $ 9.97 $ 9.62 $10.51 $13.27
Sales charge--4.25% of public offering price .46 .44 .43 .47 .59
Maximum offering price $10.91 $10.41 $10.05 $10.98 $13.86
CLASS B SHARES
Net asset value and offering price per share $10.45 $ 9.97 $ 9.62 $10.51 $13.27
CLASS C SHARES
Net asset value and offering price per share $10.45 $ 9.97 $ 9.62 $10.51 $13.27
</TABLE>
See notes to financial statements.
21
STATEMENTS OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1997 (UNAUDITED) ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
<TABLE>
<CAPTION>
INSURED INSURED
NATIONAL NATIONAL NEW YORK CALIFORNIA CALIFORNIA
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Interest $19,166,149 $ 6,901,928 $ 9,525,247 $22,240,423 $ 4,404,200
EXPENSES
Advisory Fee 1,923,110 706,010 953,098 2,192,890 380,804
Distribution fee - Class A 478,565 244,294 263,744 675,846 149,661
Distribution fee - Class B 1,021,354 247,844 468,491 802,682 129,936
Distribution fee - Class C 460,406 101,919 177,318 453,121 63,564
Transfer agency 295,777 79,767 150,636 218,675 40,050
Custodian 81,491 48,468 52,674 83,958 45,295
Administrative 49,500 49,500 49,500 49,500 49,500
Audit and legal 36,804 30,169 34,122 32,317 25,371
Registration 36,507 33,955 3,168 2,353 1,441
Printing 24,511 11,876 17,768 32,455 5,119
Taxes 18,237 7,211 9,217 23,746 5,259
Directors' fees 2,300 2,300 2,300 2,300 2,300
Miscellaneous 25,596 6,708 6,881 1,475 2,785
Total expenses 4,454,158 1,570,021 2,188,917 4,571,318 901,085
Less advisory fee waived (see note B) (1,210,972) (123,973) (724,354) (824,647) -0-
Net expenses 3,243,186 1,446,048 1,464,563 3,746,671 901,085
Net investment income 15,922,963 5,455,880 8,060,684 18,493,752 3,503,115
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on investment transactions 6,855,573 1,940,871 2,061,762 468,348 1,149,210
Net change in unrealized appreciation of
investments (10,435,547) (5,825,763) (3,250,674) (5,747,399) (2,555,230)
Net loss on investments (3,579,974) (3,884,892) (1,188,912) (5,279,051) (1,406,020)
NET INCREASE IN NET ASSETS FROM OPERATIONS $12,342,989 $ 1,570,988 $ 6,871,772 $13,214,701 $ 2,097,095
</TABLE>
See notes to financial statements.
22
STATEMENTS OF CHANGES IN NET ASSETS ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
<TABLE>
<CAPTION>
NATIONAL INSURED NATIONAL
------------------------------ -----------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1997 OCTOBER 31, APRIL 30,1997 OCTOBER 31,
(UNAUDITED) 1996 (UNAUDITED) 1996
-------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS
Net investment income $ 15,922,963 $ 34,751,054 $ 5,455,880 $ 11,513,311
Net realized gain on
investment transactions 6,855,573 16,964,535 1,940,871 8,542,348
Net change in unrealized
appreciation of investments (10,435,547) (13,559,055) (5,825,763) (3,328,071)
Net increase in net assets
from operations 12,342,989 38,156,534 1,570,988 16,727,588
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income
Class A (8,800,266) (18,357,293) (4,179,348) (8,246,992)
Class B (4,952,143) (11,489,379) (1,109,393) (2,490,145)
Class C (2,239,803) (5,041,417) (456,546) (998,865)
Net realized gain on investments
Class A -0- -0- (2,137,301) -0-
Class B -0- -0- (675,181) -0-
Class C -0- -0- (283,681) -0-
CAPITAL STOCK TRANSACTIONS
Net increase (decrease) (34,761,939) (65,588,040) 2,725,799 (16,451,516)
Total decrease (38,411,162) (62,319,595) (4,544,663) (11,459,930)
NET ASSETS
Beginning of year 636,416,482 698,736,077 235,343,705 246,803,635
End of period $598,005,320 $636,416,482 $230,799,042 $235,343,705
</TABLE>
See notes to financial statements.
23
STATEMENTS OF CHANGES IN NET ASSETS (CONT.) ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
NEW YORK
------------------------------
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1997 OCTOBER 31,
(UNAUDITED) 1996
--------------- -------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment income $ 8,060,684 $ 16,689,380
Net realized gain on investment transactions 2,061,762 4,364,814
Net change in unrealized appreciation of
investments (3,250,674) (3,048,492)
Net increase in net assets from operations 6,871,772 18,005,702
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income
Class A (4,990,730) (10,253,521)
Class B (2,312,506) (4,792,337)
Class C (880,932) (1,717,798)
CAPITAL STOCK TRANSACTIONS
Net decrease (4,098,351) (914,884)
Total increase (decrease) (5,410,747) 327,162
NET ASSETS
Beginning of year 310,973,201 310,646,039
End of period $305,562,454 $310,973,201
See notes to financial statements.
24
ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
<TABLE>
<CAPTION>
CALIFORNIA INSURED CALIFORNIA
------------------------------- -----------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1997 OCTOBER 31, APRIL 30, 1997 OCTOBER 31,
(UNAUDITED) 1996 (UNAUDITED) 1996
--------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS
Net investment income $ 18,493,752 $ 38,549,087 $ 3,503,115 $ 7,251,129
Net realized gain (loss) on
investment transactions 468,348 (2,028,050) 1,149,210 1,834,892
Net change in unrealized
appreciation of investments (5,747,399) 11,344,019 (2,555,230) (1,363,432)
Net increase in net assets
from operations 13,214,701 47,865,056 2,097,095 7,722,589
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income
Class A (12,483,158) (26,160,727) (2,545,246) (5,222,731)
Class B (3,861,775) (8,034,602) (564,029) (1,268,940)
Class C (2,180,098) (4,353,711) (276,204) (605,238)
CAPITAL STOCK TRANSACTIONS
Net decrease (17,603,768) (26,146,521) (3,738,393) (5,640,530)
Total decrease (22,914,098) (16,830,505) (5,026,777) (5,014,850)
NET ASSETS
Beginning of year 716,256,430 733,086,935 141,064,382 146,079,232
End of period (including
undistributed net investment
income of $271,856 for the
Insured California portfolio) $693,342,332 $716,256,430 $136,037,605 $141,064,382
</TABLE>
See notes to financial statements.
25
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1997 (UNAUDITED) ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
NOTE A: SIGNIFICANT ACCOUNTING POLICIES
Alliance Municipal Income Fund, (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% for purchases not exceeding $1,000,000.
With respect to purchases of $1,000,000 or more, Class A shares redeemed within
one year of purchase will be subject to a contingent deferred sales charge of
1%. 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 purchased on or after
July 1, 1996 are subject to a contingent deferred sales charge of 1% on
redemptions made within the first year after purchase. 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 policy 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 INVESTMENT TRANSACTIONS
Interest income is accrued daily. Investment transactions are accounted for on
the date the securities are purchased or sold. Investment 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.
For federal income tax purposes, the Fund's distributions of income and capital
gains are subject to recharacterization, which may include a tax return of
capital, at the end of the year to reflect the final investment results for
that year.
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
26
ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
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.
For the six months ended April 30, 1997 the Adviser voluntarily agreed to waive
part of its advisory fee for the National, Insured National, New York and
California Portfolios. The aggregate amounts of such fee waivers were: National
Portfolio, $1,210,972; Insured National Portfolio, $123,973; New York
Portfolio, $724,354 and California Portfolio, $824,647. Pursuant to the
Advisory Agreement, the Fund paid $247,500 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: the National Portfolio, $213,872; the Insured
National Portfolio, $57,824; the New York Portfolio, $101,514; the California
Portfolio, $158,407 and Insured California Portfolio, $24,889.
Alliance Fund Distributors, Inc. (a wholly-owned subsidiary of the Adviser)
serves as the Distributor of the Fund's capital stock. The amount of front-end
sales charges received by the Distributor from sales of the respective
Portfolio's Class A shares for the six months ended April 30, 1997 were:
National Portfolio, $8,210; Insured National Portfolio, $7,420; New York
Portfolio, $13,397; California Portfolio, $29,292; and Insured California
Portfolio, $5,464. The amount of contingent deferred sales charge imposed upon
redemptions by shareholders of Class A shares were New York $1,271 and
California $4,923. National, Insured National and Insured California had no
contingent deferred sales. The amount of contingent deferred sales charge
imposed upon redemptions by shareholders of Class B shares were: National
Portfolio, $68,815; Insured National Portfolio, $18,665; New York Portfolio,
$44,924; California Portfolio, $57,596; and Insured California Portfolio,
$22,293. The amount of contingent deferred sales charges imposed upon
redemptions by shareholders of Class C shares were:National Portfolio, $10,570;
Insured National Portfolio, $8,744; New York Portfolio, $6,043; California
Portfolio, $11,522; and Insured California, $634.
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 $3,439,202 $2,410,185
Insured National 1,738,239 818,153
New York 2,917,282 1,064,732
California 4,398,470 2,094,302
Insured California 1,430,095 526,089
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.
27
NOTES TO FINANCIAL STATEMENTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
NOTE D: INVESTMENT TRANSACTIONS
Purchases and sales of investment securities (excluding short-term securities
and U.S. government securities) for the six months ended April 30, 1997 were as
follows:
PORTFOLIO PURCHASES SALES
- ------------------- ------------- -------------
National $243,916,395 $280,480,696
Insured National 150,736,363 148,228,525
New York 75,969,452 74,232,876
California 73,020,319 92,818,173
Insured California 40,265,715 42,259,225
There were no purchases and sales of U.S. government and government agency
obligations for the six months April 30, 1997.
At April 30, 1997, the cost of securities for federal income tax purposes,
gross unrealized appreciation, gross unrealized depreciation and net unrealized
appreciation/depreciation of investments for each Portfolio were as follows:
GROSS UNREALIZED NET
---------------------------- UNREALIZED
TAX COST APPRECIATION (DEPRECIATION) APPRECIATION
------------- ------------- ------------- -------------
National $581,697,325 $ 9,107,243 $(2,357,463) $ 6,749,780
Insured National 226,048,928 3,363,459 (888,096) 2,475,363
New York 299,165,276 9,070,987 (488,366) 8,582,621
California 655,504,791 28,052,662 (637,210) 27,415,452
Insured California 132,196,722 2,703,281 (613,275) 2,090,006
NOTE E: TAXES
For Federal income tax purposes at October 31, 1996, the Fund had capital loss
carryforwards for the following Portfolios: $235,124 expiring in 2002 and
$18,232,039 expiring in 2003 for the National Portfolio; $7,705,786 expiring in
2003 for the New York Portfolio; $4,748,470 expiring in 2002, $10,797,828
expiring in 2003 and $2,052,062 expiring in 2004 for the California Portfolio;
and $2,074,032 expiring in 2002 for the Insured California Portfolio.
28
ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
NOTE F: CAPITAL STOCK
There are 3,000,000,000 shares of $.001 par value capital stock authorized,
designated Class A, Class B and Class C shares. There are 200,000,000
authorized shares for each Class.
NATIONAL PORTFOLIO
-------------------------------------------------------------
SHARES AMOUNT
----------------------------- ------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1997 OCTOBER 31, APRIL 30, 1997 OCTOBER 31,
(UNAUDITED) 1996 (UNAUDITED) 1996
------------- ------------ -------------- --------------
CLASS A
Shares sold 1,460,638 5,575,925 $ 15,413,022 $ 58,487,725
Shares issued in
reinvestment of
dividends 487,372 1,019,710 5,135,484 10,606,458
Shares converted
from Class B 436,387 1,147,625 4,592,066 11,942,215
Shares redeemed (3,094,879) (9,175,311) (32,617,617) (95,864,424)
Net decrease (710,482) (1,432,051) $ (7,477,045) $(14,828,026)
CLASS B
Shares sold 879,336 2,083,622 $ 9,263,362 $ 21,678,779
Shares issued in
reinvestment of
dividends 308,036 691,706 3,245,758 7,193,169
Shares converted
to Class A (436,496) (1,147,625) (4,592,066) (11,942,215)
Shares redeemed (2,540,202) (5,326,953) (26,777,025) (55,286,254)
Net decrease (1,789,326) (3,699,250) $(18,859,971) $(38,356,521)
CLASS C
Shares sold 598,635 2,326,094 $ 6,302,224 $ 24,279,598
Shares issued in
reinvestment of
dividends 185,683 335,126 1,955,663 3,484,071
Shares redeemed (1,586,312) (3,859,000) (16,682,810) (40,167,162)
Net decrease (801,994) (1,197,780) $ (8,424,923) $(12,403,493)
INSURED NATIONAL PORTFOLIO
-------------------------------------------------------------
SHARES AMOUNT
----------------------------- ------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1997 OCTOBER 31, APRIL 30, 1997 OCTOBER 31,
(UNAUDITED) 1996 (UNAUDITED) 1996
------------- ------------ -------------- --------------
CLASS A
Shares sold 1,592,544 1,382,575 $ 16,266,714 $ 13,902,664
Shares issued in
reinvestment of
dividends and
distributions 371,307 414,861 3,756,197 4,198,610
Shares converted
from Class B 30,401 24,166 306,688 243,256
Shares redeemed (1,098,528) (2,661,772) (11,126,601) (26,886,521)
Net increase(decrease) 895,724 (840,170) $ 9,202,998 $ (8,541,991)
29
NOTES TO FINANCIAL STATEMENTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
INSURED NATIONAL PORTFOLIO
------------------------------------------------------------
SHARES AMOUNT
---------------------------- ------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1997 OCTOBER 31, APRIL 30, 1997 OCTOBER 31,
(UNAUDITED) 1996 (UNAUDITED) 1996
------------ ------------ -------------- --------------
CLASS B
Shares sold 229,917 725,416 $ 2,325,910 $ 7,364,166
Shares issued in
reinvestment of
dividends and
distributions 121,388 149,506 1,227,617 1,512,818
Shares converted
to Class A (30,401) (24,166) (306,688) (243,256)
Shares redeemed (711,519) (1,637,886) (7,194,639) (16,598,949)
Net decrease (390,615) (787,130) $ (3,947,800) $ (7,965,221)
CLASS C
Shares sold 126,934 713,617 $ 1,290,385 $ 7,183,108
Shares issued in
reinvestment of
dividends and
distributions 56,345 66,139 571,333 669,187
Shares redeemed (431,238) (777,517) (4,391,117) (7,796,599)
Net increase (decrease) (247,959) 2,239 $ (2,529,399) $ 55,696
NEW YORK PORTFOLIO
------------------------------------------------------------
SHARES AMOUNT
---------------------------- ------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1997 OCTOBER 31, APRIL 30, 1997 OCTOBER 31,
(UNAUDITED) 1996 (UNAUDITED) 1996
------------ ------------ -------------- --------------
CLASS A
Shares sold 701,330 1,703,514 $ 6,781,189 $ 16,329,024
Shares issued in
reinvestment of
dividends 316,392 661,612 3,059,863 6,340,256
Shares converted
from Class B 32,269 25,442 312,437 280,942
Shares redeemed (1,505,535) (2,945,222) (14,539,590) (28,238,945)
Net decrease (455,544) (554,654) $ (4,386,101) $ (5,288,723)
CLASS B
Shares sold 699,389 1,812,208 $ 6,761,777 $ 17,384,846
Shares issued in
reinvestment of
dividends 166,298 323,928 1,608,022 3,102,964
Shares converted
to Class A (32,269) (25,442) (312,437) (280,942)
Shares redeemed (1,238,678) (1,885,403) (11,976,112) (18,010,268)
Net increase(decrease) (405,260) 225,291 $ (3,918,750) $ 2,196,600
30
ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
NEW YORK PORTFOLIO
------------------------------------------------------------
SHARES AMOUNT
---------------------------- ------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1997 OCTOBER 31, APRIL 30, 1997 OCTOBER 31,
(UNAUDITED) 1996 (UNAUDITED) 1996
------------ ------------ -------------- --------------
CLASS C
Shares sold 1,109,809 1,388,105 $ 10,858,010 $ 13,398,638
Shares issued in
reinvestment of
dividends 88,241 132,115 852,490 1,265,387
Shares redeemed (775,098) (1,295,305) (7,504,000) (12,486,786)
Net increase 422,952 224,915 $ 4,206,500 $ 2,177,239
CALIFORNIA PORTFOLIO
------------------------------------------------------------
SHARES AMOUNT
---------------------------- ------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1997 OCTOBER 31, APRIL 30, 1997 OCTOBER 31,
(UNAUDITED) 1996 (UNAUDITED) 1996
------------ ------------ -------------- --------------
CLASS A
Shares sold 1,315,784 4,406,385 $ 13,939,481 $ 46,067,687
Shares issued in
reinvestment of
dividends 577,359 1,158,430 6,119,807 12,118,531
Shares converted
from Class B 88,993 108,411 943,069 1,125,538
Shares redeemed (3,226,684) (8,003,914) (34,165,120) (83,570,318)
Net decrease (1,244,548) (2,330,688) $(13,162,763) $(24,258,562)
CLASS B
Shares sold 934,013 2,529,481 $ 9,901,643 $ 26,499,615
Shares issued in
reinvestment of
dividends 211,439 404,752 2,240,835 4,234,295
Shares converted
to Class A (88,985) (108,411) (943,069) (1,125,538)
Shares redeemed (1,547,388) (3,207,605) (16,398,634) (33,548,529)
Net decrease (490,921) (381,783) $ (5,199,225) $ (3,940,157)
CLASS C
Shares sold 843,959 2,465,162 $ 8,925,049 $ 25,830,785
Shares issued in
reinvestment of
dividends 169,620 250,607 1,797,003 2,619,923
Shares redeemed (940,277) (2,530,143) (9,963,832) (26,398,510)
Net increase 73,302 185,626 $ 758,220 $ 2,052,198
31
NOTES TO FINANCIAL STATEMENTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
INSURED CALIFORNIA PORTFOLIO
------------------------------------------------------------
SHARES AMOUNT
---------------------------- ------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1997 OCTOBER 31, APRIL 30, 1997 OCTOBER 31,
(UNAUDITED) 1996 (UNAUDITED) 1996
------------ ------------ -------------- --------------
CLASS A
Shares sold 256,565 827,900 $ 3,434,257 $ 10,898,263
Shares issued in
reinvestment of
dividends 95,071 189,983 1,270,968 2,517,761
Shares converted
from Class B 5,082 1,804 68,104 23,470
Shares redeemed (571,261) (1,244,117) (7,626,894) (16,388,925)
Net decrease (214,543) (224,430) $ (2,853,565) $ (2,949,431)
CLASS B
Shares sold 201,429 558,000 $ 2,691,722 $ 7,459,223
Shares issued in
reinvestment of
dividends 29,343 51,658 391,997 684,457
Shares converted
to Class A (5,082) (1,804) (68,104) (23,470)
Shares redeemed (269,164) (703,582) (3,593,661) (9,300,020)
Net decrease (43,474) (95,728) $ (578,046) $ (1,179,810)
CLASS C
Shares sold 68,113 198,597 $ 912,371 $ 2,664,787
Shares issued in
reinvestment of
dividends 15,970 32,458 213,315 429,912
Shares redeemed (106,963) (349,078) (1,432,468) (4,605,988)
Net decrease (22,880) (118,023) $ (306,782) $ (1,511,289)
32
FINANCIAL HIGHLIGHTS ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
NATIONAL PORTFOLIO
-----------------------------------------------------------------------------
CLASS A
-----------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED OCTOBER 31,
APRIL 30,1997 --------------------------------------------------------------
(UNAUDITED) 1996 1995 1994 1993 1992
------------- ---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $10.51 $10.45 $ 9.41 $11.05 $10.19 $ 9.96
INCOME FROM INVESTMENT OPERATIONS
Net investment income .29(b) .58 .58 .57 .61 .65
Net realized and unrealized gain (loss)
on investment transactions (.06) .06 1.04 (1.37) .88 .28
Net increase (decrease) in net asset
value from operations .23 .64 1.62 (.80) 1.49 .93
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.29) (.58) (.58) (.57) (.62) (.65)
Distributions in excess of net
investment income -0- -0- -0- (.03) -0- -0-
Distributions from net realized gains -0- -0- -0- (.24) (.01) (.05)
Total dividends and distributions (.29) (.58) (.58) (.84) (.63) (.70)
Net asset value, end of period $10.45 $10.51 $10.45 $ 9.41 $11.05 $10.19
TOTAL RETURN
Total investment return based on net
asset value(c) 2.18% 6.32% 17.73% (7.65)% 14.94% 9.60%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $315,866 $325,288 $338,311 $338,814 $386,484 $261,895
Ratio to average net assets of:
Expenses, net of fee waivers .71%(d) .69% .71% .62% .65% .83%
Expenses, before fee waivers 1.11%(d) 1.10% 1.09% 1.09% 1.08% 1.11%
Net investment income, net of
fee waivers 5.52%(d) 5.55% 5.84% 5.61% 5.69% 6.35%
Portfolio turnover rate 39% 137% 118% 110% 233% 86%
</TABLE>
See footnote summary on page 47.
33
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
NATIONAL PORTFOLIO
------------------------------------------------------------------
CLASS B
------------------------------------------------------------------
JANUARY 4,
SIX MONTHS 1993(E)
ENDED YEAR ENDED OCTOBER 31, TO
APRIL 30,1997 ------------------------------------- OCTOBER 31,
(UNAUDITED) 1996 1995 1994 1993
------------- ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $10.51 $10.45 $ 9.41 $11.05 $10.43
INCOME FROM INVESTMENT OPERATIONS
Net investment income .25(b) .51 .51 .50 .44
Net realized and unrealized gain (loss)
on investment transactions (.06) .06 1.04 (1.38) .63
Net increase (decrease) in net asset
value from operations .19 .57 1.55 (.88) 1.07
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.25) (.51) (.51) (.50) (.45)
Distributions in excess of net
investment income -0- -0- -0- (.02) -0-
Distributions from net realized gains -0- -0- -0- (.24) -0-
Total dividends and distributions (.25) (.51) (.51) (.76) (.45)
Net asset value, end of period $10.45 $10.51 $10.45 $9.41 $11.05
TOTAL RETURN
Total investment return based on net
asset value(c) 1.85% 5.61% 16.91% (8.34)% 10.43%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $194,976 $214,994 $252,357 $250,391 $216,489
Ratio to average net assets of:
Expenses, net of fee waivers 1.42%(d) 1.40% 1.42% 1.32% 1.36%(d)
Expenses, before fee waivers 1.80%(d) 1.81% 1.80% 1.80% 1.78%(d)
Net investment income, net of
fee waivers 4.81%(d) 4.85% 5.13% 4.91% 4.59%(d)
Portfolio turnover rate 39% 137% 118% 110% 233%
</TABLE>
See footnote summary on page 47.
34
ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
NATIONAL PORTFOLIO
------------------------------------------------------------------
CLASS C
------------------------------------------------------------------
MAY 3,
SIX MONTHS 1993(E)
ENDED YEAR ENDED OCTOBER 31, TO
APRIL 30,1997, ------------------------------------- OCTOBER 31,
(UNAUDITED) 1996 1995 1994 1993
-------------- ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $10.51 $10.45 $ 9.41 $11.05 $10.70
INCOME FROM INVESTMENT OPERATIONS
Net investment income .25(b) .51 .51 .50 .26
Net realized and unrealized gain (loss)
on investment transactions (.06) .06 1.04 (1.38) .36
Net increase (decrease) in net asset
value from operations .19 .57 1.55 (.88) .62
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.25) (.51) (.51) (.50) (.27)
Distributions in excess of net
investment income -0- -0- -0- (.02) -0-
Distributions from net realized gains -0- -0- -0- (.24) -0-
Total dividends and distributions (.25) (.51) (.51) (.76) (.27)
Net asset value, end of period $10.45 $10.51 $10.45 $ 9.41 $11.05
TOTAL RETURN
Total investment return based on net
asset value(c) 1.85% 5.62% 16.93% (8.33)% 5.84%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $87,163 $96,134 $108,068 $133,249 $150,953
Ratio to average net assets of:
Expenses, net of fee waivers 1.41%(d) 1.39% 1.41% 1.31% 1.36%(d)
Expenses, before fee waivers 1.80%(d) 1.80% 1.78% 1.79% 1.78%(d)
Net investment income, net of
fee waivers 4.81%(d) 4.85% 5.16% 4.89% 4.17%(d)
Portfolio turnover rate 39% 137% 118% 110% 233%
</TABLE>
See footnote summary on page 47.
35
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
INSURED NATIONAL PORTFOLIO
------------------------------------------------------------------------------
CLASS A
------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED OCTOBER 31,
APRIL 30,1997 ---------------------------------------------------------------
(UNAUDITED) 1996 1995 1994 1993 1992
------------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $10.28 $10.07 $ 8.96 $10.76 $ 9.87 $ 9.88
INCOME FROM INVESTMENT OPERATIONS
Net investment income(a) .25(b) .51 .51 .53 .56 .60
Net realized and unrealized gain (loss)
on investment transactions (.16) .22 1.13 (1.40) .96 .15
Net increase (decrease) in net asset
value from operations .09 .73 1.64 (.87) 1.52 .75
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.26) (.52) (.51) (.53) (.57) (.60)
Distributions in excess of net
investment income -0- -0- (.02) (.01) -0- -0-
Distributions from net realized gains (.14) -0- -0- (.39) (.06) (.16)
Total dividends and distributions (.40) (.52) (.53) (.93) (.63) (.76)
Net asset value, end of period $ 9.97 $10.28 $10.07 $ 8.96 $10.76 $ 9.87
TOTAL RETURN
Total investment return based on net
asset value(c) .83% 7.43% 18.72% (8.69)% 15.82% 7.88%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $164,508 $160,425 $165,548 $153,656 $185,876 $149,632
Ratio to average net assets of:
Expenses, net of fee waivers 1.03%(d) 1.02% 1.01% .66% .73% .81%
Expenses, before fee waivers 1.14%(d) 1.12% 1.12% 1.11% 1.11% 1.12%
Net investment income, net of fee waivers 4.90%(d) 5.04% 5.37% 5.40% 5.40% 6.04%
Portfolio turnover rate 67% 157% 171% 149% 165% 105%
</TABLE>
See footnote summary on page 47.
36
ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
INSURED NATIONAL PORTFOLIO
-----------------------------------------------------------------
CLASS B
-----------------------------------------------------------------
JANUARY 4,
SIX MONTHS 1993(E)
ENDED YEAR ENDED OCTOBER 31, TO
APRIL 30,1997 ------------------------------------- OCTOBER 31,
(UNAUDITED) 1996 1995 1994 1993
------------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $10.28 $10.07 $ 8.96 $10.76 $10.10
INCOME FROM INVESTMENT OPERATIONS
Net investment income(a) .21(b) .44 .45 .46 .40
Net realized and unrealized gain (loss)
on investment transactions (.15) .22 1.12 (1.40) .66
Net increase (decrease) in net asset
value from operations .06 .66 1.57 (.94) 1.06
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.23) (.45) (.45) (.46) (.40)
Distributions in excess of net
investment income -0- -0- (.01) (.01) -0-
Distributions from net realized gains (.14) -0- -0- (.39) -0-
Total dividends and distributions (.37) (.45) (.46) (.86) (.40)
Net asset value, end of period $ 9.97 $10.28 $10.07 $ 8.96 $10.76
TOTAL RETURN
Total invesment return based on net
asset value(c) .50% 6.74% 17.91% (9.38)% 10.68%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $46,686 $52,156 $58,990 $51,439 $42,954
Ratio to average net assets of:
Expenses, net of fee waivers 1.75%(d) 1.73% 1.72% 1.37% 1.45%(d)
Expenses, before fee waivers 1.85%(d) 1.83% 1.83% 1.82% 1.83%(d)
Net investment income, net of fee waivers 4.18%(d) 4.32% 4.65% 4.71% 4.31%(d)
Portfolio turnover rate 67% 157% 171% 149% 165%
</TABLE>
See footnote summary on page 47.
37
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
INSURED NATIONAL PORTFOLIO
-----------------------------------------------------------------
CLASS C
-----------------------------------------------------------------
MAY 3,
SIX MONTHS 1993(E)
ENDED YEAR ENDED OCTOBER 31, TO
APRIL 30,1997 ------------------------------------- OCTOBER 31,
(UNAUDITED) 1996 1995 1994 1993
------------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $10.28 $10.07 $8.96 $10.76 $10.41
INCOME FROM INVESTMENT OPERATIONS
Net investment income(a) .21(b) .44 .45 .46 .24
Net realized and unrealized gain (loss)
on investment transactions (.15) .22 1.12 (1.40) .35
Net increase (decrease) in net asset
value from operations .06 .66 1.57 (.94) .59
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.23) (.45) (.45) (.46) (.24)
Distributions in excess of net
investment income -0- -0- (.01) (.01) -0-
Distributions from net realized gains (.14) -0- -0- (.39) -0-
Total dividends and distributions (.37) (.45) (.46) (.86) (.24)
Net asset value, end of period $ 9.97 $10.28 $10.07 $ 8.96 $10.76
TOTAL RETURN
Total invesment return based on net
asset value(c) .50% 6.74% 17.91% (9.38)% 5.75%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $19,605 $22,763 $22,265 $24,112 $28,862
Ratio to average net assets of:
Expenses, net of fee waivers 1.73%(d) 1.72% 1.71% 1.36% 1.45%(d)
Expenses, before fee waivers 1.84%(d) 1.82% 1.82% 1.81% 1.83%(d)
Net investment income, net of fee waivers 4.20%(d) 4.34% 4.69% 4.68% 3.98%(d)
Portfolio turnover rate 67% 157% 171% 149% 165%
</TABLE>
See footnote summary on page 47.
38
ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
NEW YORK PORTFOLIO
----------------------------------------------------------------------------
CLASS A
----------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED OCTOBER 31,
APRIL 30,1997 -------------------------------------------------------------
(UNAUDITED) 1996 1995 1994 1993 1992
------------- ----------- ----------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $9.66 $9.62 $8.72 $10.17 $ 9.53 $9.30
INCOME FROM INVESTMENT OPERATIONS
Net investment income(a) .27(b) .55 .55 .55 .57 .60
Net realized and unrealized gain (loss)
on investment transactions (.04) .04 .90 (1.40) .79 .24
Net increase (decrease) in net asset
value from operations .23 .59 1.45 (.85) 1.36 .84
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.27) (.55) (.55) (.55) (.58) (.60)
Distributions in excess of net
investment income -0- -0- -0- (.01) -0- -0-
Distributions from net realized gains -0- -0- -0- (.04) (.14) (.01)
Total dividends and distributions (.27) (.55) (.55) (.60) (.72) (.61)
Net asset value, end of period $9.62 $9.66 $9.62 $ 8.72 $10.17 $9.53
TOTAL RETURN
Total investment return based on net
asset value(c) 2.43% 6.30% 17.10% (8.76)% 14.71% 9.39%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $174,364 $179,452 $183,987 $182,170 $214,259 $162,549
Ratio to average net assets of:
Expenses, net of fee waivers .66%(d) .64% .75% .66% .68% .70%
Expenses, before fee waivers 1.13%(d) 1.11% 1.12% 1.11% 1.13% 1.13%
Net investment income, net of fee waivers 5.58%(d) 5.66% 5.93% 5.75% 5.76% 6.37%
Portfolio turnover rate 25% 64% 69% 69% 63% 69%
</TABLE>
See footnote summary on page 47.
39
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
NEW YORK PORTFOLIO
-----------------------------------------------------------------
CLASS B
-----------------------------------------------------------------
JANUARY 4,
SIX MONTHS 1993(E)
ENDED YEAR ENDED OCTOBER 31, TO
APRIL 30,1997 ------------------------------------- OCTOBER 31,
(UNAUDITED) 1996 1995 1994 1993
------------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $9.66 $9.62 $8.72 $10.17 $9.61
INCOME FROM INVESTMENT OPERATIONS
Net investment income(a) .23(b) .48 .48 .48 .41
Net realized and unrealized gain (loss)
on investment transactions (.03) .04 .90 (1.41) .56
Net increase (decrease) in net asset
value from operations .20 .52 1.38 (.93) .97
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.24) (.48) (.48) (.47) (.41)
Distributions in excess of net
investment income -0- -0- -0- (.01) -0-
Distributions from net realized gains -0- -0- -0- (.04) -0-
Total dividends and distributions (.24) (.48) (.48) (.52) (.41)
Net asset value, end of period $9.62 $9.66 $9.62 $ 8.72 $10.17
TOTAL RETURN
Total investment return based on net
asset value(c) 2.05% 5.52% 16.19% (9.44)% 10.29%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $92,696 $96,959 $94,400 $81,941 $58,504
Ratio to average net assets of:
Expenses, net of fee waivers 1.37%(d) 1.35% 1.45% 1.36% 1.39%(d)
Expenses, before fee waivers 1.83%(d) 1.82% 1.83% 1.82% 1.84%(d)
Net investment income, net of fee waivers 4.88%(d) 4.95% 5.21% 5.05% 4.70%(d)
Portfolio turnover rate 25% 64% 69% 69% 63%
</TABLE>
See footnote summary on page 47.
40
ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
NEW YORK PORTFOLIO
-----------------------------------------------------------------
CLASS C
-----------------------------------------------------------------
MAY 3,
SIX MONTHS 1993(E)
ENDED YEAR ENDED OCTOBER 31, TO
APRIL 30,1997 ------------------------------------- OCTOBER 31,
(UNAUDITED) 1996 1995 1994 1993
------------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $9.66 $9.62 $8.72 $10.17 $ 9.89
INCOME FROM INVESTMENT OPERATIONS
Net investment income(a) .23(b) .48 .48 .48 .24
Net realized and unrealized gain (loss)
on investment transactions (.03) .04 .90 (1.41) .29
Net increase (decrease) in net asset
value from operations .20 .52 1.38 (.93) .53
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.24) (.48) (.48) (.47) (.25)
Distributions in excess of net
investment income -0- -0- -0- (.01) -0-
Distributions from net realized gains -0- -0- -0- (.04) -0-
Total dividends and distributions (.24) (.48) (.48) (.52) (.25)
Net asset value, end of period $9.62 $9.66 $9.62 $ 8.72 $10.17
TOTAL RETURN
Total investment return based on net
asset value(c) 2.05% 5.52% 16.19% (9.44)% 5.37%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $38,502 $34,562 $32,259 $34,646 $38,245
Ratio to average net assets of:
Expenses, net of fee waivers 1.36%(d) 1.34% 1.44% 1.36% 1.38%(d)
Expenses, before fee waivers 1.83%(d) 1.81% 1.82% 1.81% 1.84%(d)
Net investment income, net of fee waivers 4.88%(d) 4.95% 5.24% 5.03% 4.42%(d)
Portfolio turnover rate 25% 64% 69% 69% 63%
</TABLE>
See footnote summary on page 47.
41
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CALIFORNIA PORTFOLIO
----------------------------------------------------------------------------
CLASS A
----------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED OCTOBER 31,
APRIL 30,1997 -------------------------------------------------------------
(UNAUDITED) 1996 1995 1994 1993 1992
------------- ----------- ----------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $10.59 $10.45 $9.43 $10.90 $10.06 $9.97
INCOME FROM INVESTMENT OPERATIONS
Net investment income(a) .29(b) .58 .59 .59 .61 .65
Net realized and unrealized gain (loss)
on investment transactions (.08) .14 1.02 (1.41) .85 .13
Net increase (decrease) in net asset
value from operations .21 .72 1.61 (.82) 1.46 .78
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.29) (.58) (.59) (.59) (.61) (.65)
Distributions from net realized gains -0- -0- -0- (.06) (.01) (.04)
Total dividends and distributions (.29) (.58) (.59) (.65) (.62) (.69)
Net asset value, end of period $10.51 $10.59 $10.45 $9.43 $10.90 $10.06
TOTAL RETURN
Total investment return based on net
asset value(c) 2.01% 7.15% 17.55% (7.73)% 14.90% 8.05%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $443,843 $460,444 $478,535 $470,308 $531,293 $361,661
Ratio to average net assets of:
Expenses, net of fee waivers .82%(d) .77% .74% .64% .74% .59%
Expenses, before fee waivers 1.05%(d) 1.05% 1.04% 1.05% 1.06% 1.07%
Net investment income, net of fee waivers 5.52%(d) 5.57% 5.90% 5.78% 5.74% 6.38%
Portfolio turnover rate 11% 49% 39% 45% 83% 77%
</TABLE>
See footnote summary on page 47.
42
ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CALIFORNIA PORTFOLIO
------------------------------------------------------------------
CLASS B
------------------------------------------------------------------
JANUARY 4,
SIX MONTHS 1993(E)
ENDED YEAR ENDED OCTOBER 31, TO
APRIL 30,1997 ------------------------------------- OCTOBER 31,
(UNAUDITED) 1996 1995 1994 1993
------------- ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $10.59 $10.45 $9.43 $10.90 $10.27
INCOME FROM INVESTMENT OPERATIONS
Net investment income(a) .25(b) .51 .51 .52 .44
Net realized and unrealized gain (loss)
on investment transactions (.08) .14 1.02 (1.41) .63
Net increase (decrease) in net asset
value from operations .17 .65 1.53 (.89) 1.07
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.25) (.51) (.51) (.52) (.44)
Distributions from net realized gains -0- -0- -0- (.06) -0-
Total dividends and distributions (.25) (.51) (.51) (.58) (.44)
Net asset value, end of period $10.51 $10.59 $10.45 $9.43 $10.90
TOTAL RETURN
Total investment return based on net
asset value(c) 1.64% 6.37% 16.64% (8.43)% 10.60%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $158,493 $164,895 $166,759 $160,879 $126,688
Ratio to average net assets of:
Expenses, net of fee waivers 1.52%(d) 1.47% 1.45% 1.35% 1.44%(d)
Expenses, before fee waivers 1.76%(d) 1.75% 1.75% 1.75% 1.78%(d)
Net investment income, net of fee waivers 4.82%(d) 4.87% 5.19% 5.07% 4.66%(d)
Portfolio turnover rate 11% 49% 39% 45% 83%
</TABLE>
See footnote summary on page 47.
43
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CALIFORNIA PORTFOLIO
-----------------------------------------------------------------
CLASS C
-----------------------------------------------------------------
MAY 3,
SIX MONTHS 1993(E)
ENDED YEAR ENDED OCTOBER 31, TO
APRIL 30,1997 ------------------------------------- OCTOBER 31,
(UNAUDITED) 1996 1995 1994 1993
------------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $10.59 $10.45 $9.43 $10.90 $10.54
INCOME FROM INVESTMENT OPERATIONS
Net investment income(a) .25(b) .51 .51 .52 .26
Net realized and unrealized gain (loss)
on investment transactions (.08) .14 1.02 (1.41) .36
Net increase (decrease) in net asset
value from operations .17 .65 1.53 (.89) .62
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.25) (.51) (.51) (.52) (.26)
Distributions from net realized gains -0- -0- -0- (.06) -0-
Total dividends and distributions (.25) (.51) (.51) (.58) (.26)
Net asset value, end of period $10.51 $10.59 $10.45 $9.43 $10.90
TOTAL RETURN
Total investment return based on net
asset value(c) 1.64% 6.38% 16.64% (8.43)% 5.98%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $91,006 $90,917 $87,793 $103,622 $117,379
Ratio to average net assets of:
Expenses, net of fee waivers 1.52%(d) 1.47% 1.44% 1.34% 1.44%(d)
Expenses, before fee waivers 1.75%(d) 1.75% 1.74% 1.75% 1.78%(d)
Net investment income, net of fee waivers 4.82%(d) 4.87% 5.22% 5.06% 4.42%(d)
Portfolio turnover rate 11% 49% 39% 45% 83%
</TABLE>
See footnote summary on page 47.
44
ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
INSURED CALIFORNIA PORTFOLIO
------------------------------------------------------------------------------
CLASS A
------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED OCTOBER 31,
APRIL 30,1997 ---------------------------------------------------------------
(UNAUDITED) 1996 1995 1994 1993 1992
------------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $13.39 $13.32 $11.79 $14.25 $12.99 $12.80
INCOME FROM INVESTMENT OPERATIONS
Net investment income .35(b) .69 .68(a) .69(a) .70(a) .76(a)
Net realized and unrealized gain (loss)
on investment transactions (.13) .06 1.54 (1.99) 1.30 .18
Net increase (decrease) in net asset
value from operations .22 .75 2.22 (1.30) 2.00 .94
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.34) (.68) (.68) (.69) (.71) (.75)
Dividends in excess of net
investment income -0- -0- (.01) -0- -0- -0-
Distributions from net realized gains -0- -0- -0- (.47) (.03) -0-
Total dividends and distributions (.34) (.68) (.69) (1.16) (.74) (.75)
Net asset value, end of period $13.27 $13.39 $13.32 $11.79 $14.25 $12.99
TOTAL RETURN
Total investment return based on net
asset value(c) 1.64% 5.79% 19.29% (9.73)% 15.64% 7.52%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $97,753 $101,542 $103,940 $94,857 $120,734 $90,477
Ratio to average net assets of:
Expenses, net of fee waivers 1.11%(d) 1.08% 1.04% .82% .94% .78%
Expenses, before fee waivers 1.11%(d) 1.08% 1.09% 1.08% 1.08% 1.09%
Net investment income, net of fee waivers 5.26%(d) 5.19% 5.34% 5.29% 5.06% 5.77%
Portfolio turnover rate 30% 118% 103% 100% 186% 60%
</TABLE>
See footnote summary on page 47.
45
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
INSURED CALIFORNIA PORTFOLIO
-----------------------------------------------------------------
CLASS B
-----------------------------------------------------------------
JANUARY 4,
SIX MONTHS 1993(E)
ENDED YEAR ENDED OCTOBER 31, TO
APRIL 30,1997 ------------------------------------- OCTOBER 31,
(UNAUDITED) 1996 1995 1994 1993
------------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $13.39 $13.32 $11.79 $14.25 $13.37
INCOME FROM INVESTMENT OPERATIONS
Net investment income .30(b) .60 .58(a) .60(a) .49(a)
Net realized and unrealized gain (loss)
on investment transactions (.13) .05 1.54 (2.00) .89
Net increase (decrease) in net asset
value from operations .17 .65 2.12 (1.40) 1.38
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.29) (.58) (.58) (.59) (.50)
Distributions in excess of net
investment income -0- -0- (.01) -0- -0-
Distributions from net realized gains -0- -0- -0- (.47) -0-
Total dividends and distributions (.29) (.58) (.59) (1.06) (.50)
Net asset value, end of period $13.27 $13.39 $13.32 $11.79 $14.25
TOTAL RETURN
Total investment return based on net
asset value(c) 1.26% 4.99% 18.35% (10.43)% 10.43%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $25,878 $26,696 $27,816 $24,591 $21,234
Ratio to average net assets of:
Expenses, net of fee waivers 1.81%(d) 1.79% 1.74% 1.53% 1.65%(d)
Expenses, before fee waivers 1.81%(d) 1.79% 1.80% 1.78% 1.79%(d)
Net investment income, net of fee waivers 4.55%(d) 4.49% 4.61% 4.60% 3.85%(d)
Portfolio turnover rate 30% 118% 103% 100% 186%
</TABLE>
See footnote summary on page 47.
46
ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
INSURED CALIFORNIA PORTFOLIO
------------------------------------------------------------------
CLASS C
------------------------------------------------------------------
MAY 3,
SIX MONTHS 1993(E)
ENDED YEAR ENDED OCTOBER 31, TO
APRIL 30,1997 ------------------------------------- OCTOBER 31,
(UNAUDITED) 1996 1995 1994 1993
------------- ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $13.39 $13.32 $11.79 $14.25 $13.78
INCOME FROM INVESTMENT OPERATIONS
Net investment income .30(b) .60 .58(a) .60(a) .29(a)
Net realized and unrealized gain (loss)
on investment transactions (.13) .05 1.54 (2.00) .48
Net increase (decrease) in net asset
value from operations .17 .65 2.12 (1.40) .77
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.29) (.58) (.58) (.59) (.30)
Distributions in excess of net
investment income -0- -0- (.01) -0- -0-
Distributions from net realized gains -0- -0- -0- (.47) -0-
Total dividends and distributions (.29) (.58) (.59) (1.06) (.30)
Net asset value, end of period $13.27 $13.39 $13.32 $11.79 $14.25
TOTAL RETURN
Total investment return based on net
asset value(c) 1.26% 4.99% 18.35% (10.43)% 5.63%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $12,407 $12,826 $14,323 $12,472 $15,971
Ratio to average net assets of:
Expenses, net of fee waivers 1.81%(d) 1.78% 1.74% 1.52% 1.65%(d)
Expenses, before fee waivers 1.81%(d) 1.78% 1.79% 1.77% 1.79%(d)
Net investment income, net of fee waivers 4.56%(d) 4.49% 4.64% 4.59% 3.74%(d)
Portfolio turnover rate 30% 118% 103% 100% 186%
</TABLE>
(a) Net of fees voluntarily waived by the Adviser.
(b) Based on average shares outstanding.
(c) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period. 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.
(d) Annualized
(e) Commencement of distribution.
47
ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
BOARD OF DIRECTORS
JOHN D. CARIFA, CHAIRMAN AND PRESIDENT
RUTH BLOCK (1)
DAVID H. DIEVLER (1)
JAMES R. GREENE (1)
DR. JAMES M. HESTER (1)
CLIFFORD L. MICHEL (1)
DONALD J. ROBINSON (1)
OFFICERS
KATHLEEN A. CORBET, SENIOR VICE PRESIDENT
SUSAN P. KEENAN, SENIOR VICE PRESIDENT
WAYNE D. LYSKI, SENIOR VICE PRESIDENT
DAVID M. DOWDEN, VICE PRESIDENT
TERRANCE HULTS, VICE PRESIDENT
WILLIAM E. OLIVER, VICE PRESIDENT
EDMUND P. BERGAN, JR., SECRETARY
MARK D. GERSTEN, TREASURER & CHIEF FINANCIAL OFFICER
JUAN J. RODRIGUEZ, 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.
48
THE ALLIANCE FAMILY OF MUTUAL FUNDS
_______________________________________________________________________________
FIXED INCOME
Alliance Bond Fund
U.S. Government Portfolio
Corporate Bond Portfolio
Alliance Global Dollar Government Fund
Alliance Global Strategic Income Trust
Alliance High Yield Fund
Alliance Mortgage Securities Income Fund
Alliance Limited Maturity Government Fund
Alliance Multi-Market Strategy Trust
Alliance North American Government Income Trust
Alliance Short-Term Multi-Market Trust
Alliance Short-Term U.S. Government Fund
Alliance World Income Trust
TAX-FREE INCOME
Alliance Municipal Income Fund
California Portfolio
Insured California Portfolio
Insured National Portfolio
National Portfolio
New York Portfolio
Alliance Municipal Income Fund II
Arizona Portfolio
Florida Portfolio
Massachusetts Portfolio
Michigan Portfolio
Minnesota Portfolio
New Jersey Portfolio
Ohio Portfolio
Pennsylvania Portfolio
Virginia Portfolio
MONEY MARKET
AFD Exchange Reserves
GROWTH
The Alliance Fund
Alliance Global Small Cap Fund
Alliance Growth Fund
Alliance Premier Growth Fund
Alliance/Regent Sector Opportunity Fund
GROWTH & INCOME
Alliance Strategic Balanced Fund
Alliance Balanced Shares
Alliance Conservative Investors Fund
Alliance Growth & Income Fund
Alliance Growth Investors Fund
Alliance Income Builder Fund
Alliance Real Estate Investment Fund
Alliance Utility Income Fund
AGGRESSIVE GROWTH
Alliance Quasar Fund
Alliance Technology Fund
INTERNATIONAL
Alliance All-Asia Investment Fund
Alliance International Fund
Alliance New Europe Fund
Alliance Worldwide Privatization Fund
CLOSED-END FUNDS
Alliance All-Market Advantage Fund
Alliance Global Environment Fund
ACM Government Income Fund
ACM Government Opportunity Fund
ACM Government Securities Fund
ACM Government Spectrum Fund
ACM Managed Dollar Income Fund
ACM Managed Income Fund
ACM Municipal Securities Income Fund
Alliance World Dollar Government Fund
Alliance World Dollar Government Fund II
The Austria Fund
The Korean Investment Fund
The Spain Fund
The Southern Africa Fund
CASH MANAGEMENT SERVICES
ACM Institutional Reserves
Government Portfolio
Prime Portfolio
Tax-Free Portfolio
Trust Portfolio
Alliance Capital Reserves
Alliance Government Reserves
Alliance Insured Account
Alliance Money Reserves
Alliance Municipal Trust
California Portfolio
Connecticut Portfolio
Florida Portfolio
General Portfolio
Massachusetts Portfolio
New Jersey Portfolio
New York Portfolio
Virginia Portfolio
Alliance Treasury Reserves
Alliance Money Market Fund
Prime Portfolio
Government Portfolio
General Municipal Portfolio
49
ALLIANCE MUNICIPAL INCOME FUND
1345 Avenue of the Americas
New York, NY 10105
(800) 221-5672
ALLIANCE CAPITAL
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.
MUNISR
