ALLIANCE MUNICIPAL INCOME FUND
ANNUAL REPORT
OCTOBER 31, 1996
LETTER TO SHAREHOLDERS ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
December 10, 1996
Dear Shareholder:
We are pleased to report municipal market activity and investment results for
Alliance Municipal Income Fund's fiscal year ended October 31, 1996.
During the fiscal year, the Portfolios had attractive returns relative to their
respective peer groups, according to Lipper Analytical Services, Inc., with
four of the five Portfolios outperforming at least 90% of funds with similar
investment objectives. Lipper rankings are based on total returns for Class A
shares at net asset value, and do not take into account sales charges, which
reduce total return figures.
PEER GROUP RANKINGS
as of October 31, 1996
SINCE
1-YEAR INCEPTION
PORTFOLIO RANKING RANKING*
- ------------------ ---------------- --------------
NATIONAL #25 of 228 funds #5 of 66 funds
INSURED NATIONAL #1 of 49 funds #2 of 15 funds
CALIFORNIA #7 of 95 funds #1 of 30 funds
INSURED CALIFORNIA #15 of 28 funds #2 of 2 funds
NEW YORK #6 of 99 funds #9 of 22 funds
Portfolio highlights are listed below, and investment results for each
Portfolio appear on page 4. Also provided, on pages 5 and 6, are charts that
show how a hypothetical $10,000 investment in an Alliance Municipal Income Fund
Portfolio has increased in value over time. Each hypothetical $10,000
investment is based on a purchase of Class A shares from Portfolio inception
through October 31.
HIGHLIGHTS OF INDIVIDUAL PORTFOLIOS
ISSUES RATED A
OR BETTER WEIGHTED
(BY STANDARD AVERAGE
& POOR'S) MATURITY
-------------- ----------
NATIONAL 74% 27 Years
INSURED NATIONAL 100% 23 Years
CALIFORNIA 75% 26 Years
INSURED CALIFORNIA 100% 26 Years
NEW YORK 89% 28 Years
MARKET OVERVIEW
The municipal bond market has outperformed most other sectors of the domestic
fixed- income market in 1996, recovering from the negative impact of the flat
tax debate earlier in the year. The tax-exempt market's positive performance
has been largely due to very favorable supply and demand factors brought about
by the continued high pace of early redemptions of outstanding securities by
municipal issuers.
This shortage of securities has not been helped by the relatively low new-issue
volume of municipal bonds, which continues to be stable at an annual rate of
approximately $150 billion, down dramatically from 1993 volume of nearly $300
billion. At Alliance, we believe that pricing of tax-exempt securities is
driven first and foremost by the continuing supply/demand imbalance. Therefore,
we attempt to take advantage of the resulting market cycles to maximize total
return to our shareholders.
Credit ratings have generally improved during 1996. This improvement is a
direct reflection of the more stable economic environment for state and local
governments as a result of the recent economic expansion. Orange County emerged
from bankruptcy in early July, having paid all principal and interest due on
its defaulted note issues. As we mentioned at the end of fiscal year 1995, we
believe that the Orange County bankruptcy has resulted in better financial
disclosure by state and local government agencies and stricter investment
guidelines for their investment advisors.
INVESTMENT STRATEGY
The bond market volatility of early 1996, combined with the media attention
granted to various flat tax proposals from Republican presidential candidates,
provided the Alliance Municipal Income Fund with ample opportunity to follow
its investment philosophy of "buy on weakness, sell on strength." The
portfolios were repositioned following the March decline in bond prices to take
advantage of any rally in the second half of the Fund's fiscal year. Indeed,
the bond market has rallied in recent months, allowing the portfolios to
realize the gains provided by the March repositioning.
* Inception date for the Insured California Portfolio was 11/85. Inception
date for all other Portfolios was 12/86.
1
ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
Consistent with our fundamental investment objective of providing high current
income and high after-tax total returns for the fund's shareholders, we
continue to have the Portfolios fully invested in long-term securities. We seek
out bonds that offer both high current income and excellent call protection,
which have the potential for outstanding total returns from price appreciation.
To make room in the portfolios for attractive new issues, we sold older bonds
with shorter maturity dates and high early redemption risk. We also sold bonds
that had been pre-refunded by their issuers, which causes securities to reach
maximum price appreciation potential earlier than normal. Finally, our core
strategy of buying bonds that are undervalued or out of favor was particularly
successful in the second half of the fiscal year.
MARKET OUTLOOK
We expect a more stable environment in the municipal markets over the coming
year. Despite rising energy prices and signs of wage pressure in the economy,
we believe that inflation will remain in check for the foreseeable future and
that interest rates will continue to be relatively stable. The flat tax debate
looks to be dormant, but is likely to arise again before the presidential
elections in the year 2000. Nevertheless, municipal bonds continue to trade at
very cheap prices relative to fully taxable investments. We believe that the
greatest risk to investors in the long term will be a scarcity of attractively
priced municipal investments offering high after-tax returns.
We appreciate your continued confidence in Alliance Capital and your investment
in the Alliance Muncipal Income Fund.
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 FISCAL YEAR ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
Total returns for the periods ended October 31 are shown below. For comparison,
we've also included returns for the overall municipal bond market, represented
by the unmanaged Lehman Brothers Long Municipal Bond Index, which includes
approximately 15,000 issues with maturities exceeding 22 years.
TOTAL RETURNS FOR THE PERIODS
ENDED OCTOBER 31, 1996
6 MONTHS 12 MONTHS
------------ -------------
NATIONAL PORTFOLIO
Class A 5.66% 6.32%
Class B 5.41% 5.61%
Class C 5.41% 5.62%
INSURED NATIONAL PORTFOLIO
Class A 6.12% 7.43%
Class B 5.87% 6.74%
Class C 5.87% 6.74%
CALIFORNIA PORTFOLIO
Class A 5.75% 7.15%
Class B 5.36% 6.37%
Class C 5.36% 6.38%
INSURED CALIFORNIA PORTFOLIO
Class A 6.43% 5.79%
Class B 5.94% 4.99%
Class C 6.02% 4.99%
NEW YORK PORTFOLIO
Class A 5.32% 6.30%
Class B 4.92% 5.52%
Class C 4.92% 5.52%
LEHMAN BROTHERS LONG
MUNICPAL BOND INDEX 6.02% 7.14%
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 increased
credit risk.
3
INVESTMENT RESULTS
AS OF OCTOBER 31, 1996 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 +6.32% +7.80% +8.14% +1.83% +6.87% +7.66% 5.24% 8.59%
Class B Shares +5.61 N/A +6.01 +2.61 N/A +6.01 4.77 7.56
Class C Shares +5.62 N/A +5.29 +4.62 N/A +5.29 4.77 7.58
INSURED NATIONAL
PORTFOLIO
Class A Shares +7.43% +7.79% +7.77% +2.84% +6.86% +7.29% 4.77% 7.88%
Class B Shares +6.74 N/A +6.29 +3.74 N/A +6.29 4.27 6.86
Class C Shares +6.74 N/A +5.48 +5.74 N/A +5.48 4.28 6.86
NEW YORK PORTFOLIO
Class A Shares +6.30% +7.34% +7.11% +1.75% +6.42% +6.63% 5.43% 10.06%
Class B Shares +5.52 N/A +5.44 +2.52 N/A +5.44 4.97 8.74
Class C Shares +5.52 N/A +4.57 +4.52 N/A +4.57 4.97 8.74
CALIFORNIA PORTFOLIO
Class A Shares +7.15% +7.61% +8.00% +2.63% +6.68% +7.52% 5.44% 9.51%
Class B Shares +6.37 N/A +6.16 +3.37 N/A +6.16 4.98 8.25
Class C Shares +6.38 N/A +5.44 +5.38 N/A +5.44 4.99 8.25
INSURED CALIFORNIA
PORTFOLIO
Class A Shares +5.79% +7.21% +7.87% +1.30% +6.28% +7.44% 4.63% 8.70%
Class B Shares +4.99 N/A +5.54 +1.99 N/A +5.54 4.13 7.41
Class C Shares +4.99 N/A +4.72 +3.99 N/A +4.72 4.13 7.41
</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). 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 October 31, 1996.
4
ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
ALLIANCE MUNICIPAL INCOME FUND
GROWTH OF A $10,000 INVESTMENT
NATIONAL PORTFOLIO
12/31/86 TO 10/31/96
$21,575
$19,575
$17,575
$15,575
$13,575
$11,575
$9,575
NATIONAL PORTFOLIO CLASS A $20,411
National Portfolio
LB Long Municipal Bond Index
Lipper General Municipal Debt Funds Average
12/31/86 10/31/96
INSURED NATIONAL PORTFOLIO
12/31/86 TO 10/31/96
$23,000
$21,000
$19,000
$17,000
$15,000
$13,000
$11,000
$9,000
INSURED NATIONAL PORTFOLIO CLASS A $19,993
Insured National Portfolio
LB Long Municipal Bond Index
Lipper Insured Municipal Debt Funds Average
12/31/86 10/31/96
NEW YORK PORTFOLIO
12/31/86 TO 10/31/96
$24,500
$22,500
$20,500
$18,500
$16,500
$14,500
$12,500
$10,500
$8,500
NEW YORK PORTFOLIO CLASS A $18,812
New York Portfolio
LB Long Municipal Bond Index
Lipper New York Municipal Debt Funds Average
12/31/86 10/31/96
5
ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
ALLIANCE MUNICIPAL INCOME FUND
$10,000 INVESTMENT OVER LIFE OF FUND
CALIFORNIA PORTFOLIO
12/31/86 TO 10/31/96
$23,000
$21,000
$19,000
$17,000
$15,000
$13,000
$11,000
$9,000
CALIFORNIA PORTFOLIO CLASS A $20,441
California Portfolio
LB Long Municipal Bond Index
Lipper California Municipal Debt Funds Average
12/31/86 10/31/96
INSURED CALIFORNIA PORTFOLIO
11/30/85 TO 10/31/96
$29,000
$27,000
$25,000
$23,000
$21,000
$19,000
$17,000
$15,000
$13,000
$11,000
$9,000
INSURED CALIFORNIA PORTFOLIO CLASS A $21,941
Insured California Portfolio
LB Long Municipal Bond Index
Lipper Insured California Municipal Debt Funds Average
11/30/85 10/31/96
These charts illustrate the total value of a hypothetical $10,000 investment in
Class A shares. The charts reflect the deduction of the maximum 4.25% sales
charge from initial $10,000 Portfolio investments and assume the reinvestment
of dividends and capital gains. Performance for Class B and C shares will vary
from the results shown above due to differences in expenses charged to those
classes. Results should not be considered representative of future gains or
losses in capital value or dividend income.
The Lehman Brothers Long Municipal Bond Index reflects 15,000 bond issues with
maturities exceeding 22 years. The bonds in the Index are a combination of both
revenue and general obligation issues, and carry a rating of BAA/Baa or higher.
The Lipper General Municipal Debt Funds Average reflects performance of 45
funds; the Lipper New York Municipal Debt Funds Average reflects performance of
89 funds; the Lipper California Municipal Debt Funds Average reflects
performance of 99 funds; the Lipper Insured California Municipal Debt Funds
Average reflects performance of 26 funds. The funds tracked by Lipper
Analytical Services have investment objectives that are generally similar to
the applicable Alliance Municipal Income Fund Portfolio.
When comparing Alliance Portfolios to the indices shown above, remember that
sales charges and expenses are not reflected in the performance of Lehman
Brothers indices, and sales charges are not reflected in the performance of
Lipper averages.
6
NATIONAL PORTFOLIO
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1996 ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
STANDARD PRINCIPAL
& POOR'S AMOUNT
RATINGS# (000) VALUE
- -------------------------------------------------------------------------
MUNICIPAL BONDS-98.3%
LONG TERM MUNICIPAL BONDS-98.1%
ARIZONA-4.4%
NR Goodyear
Assess Dist #1 Ser 96C
7.25%, 7/01/16 $ 4,200 $ 4,248,804
AA+ Maricopa Cnty
Util Rev (Citizen's Util) Ser 95 AMT
6.20%, 5/01/30 8,020 8,313,532
AA+ Mohave Cnty IDA
Util Rev (Citizen's Util) Ser 93B AMT
5.80%, 11/15/28 2,000 1,997,060
AA- Mohave Cnty IDR
(Cargill/No Star Steel Proj)
Ser 95A AMT
6.70%, 3/01/20 11,000 11,887,480
AAA Phoenix Arpt Rev
MBIA Ser 94D AMT
6.30%, 7/01/10 1,270 1,349,121
------------
27,795,997
CALIFORNIA-15.0%
A California Poll Ctl Fin Auth
PCR (Pacific Gas & Elec) Ser 93A AMT
5.875%, 6/01/23 41,145 40,410,151
A+ California Poll Ctl Fin Auth
PCR (San Diego Gas & Elec)
Ser 93A-C AMT
5.85%, 6/01/21 6,000 5,945,640
AA- Long Beach Harbor Rev
Ser 93 AMT
5.125%, 5/15/18 31,325 28,528,304
NR Novato Comm Fac Dist #94-1
(Hamilton Field) Ser 95 ETM
7.375%, 9/01/25 6,300 6,568,569
AAA San Francisco City & Cnty Int'l Arpt
MBIA Ser 10A AMT
5.70%, 5/01/26 14,385 14,122,905
------------
95,575,569
COLORADO-3.7%
Baa* Arapahoe Cnty
Public Highway Auth
7.00%, 8/31/26 1,500 1,621,560
BBB Denver City & Cnty
(Arpt System Rev) Ser C AMT
6.75%, 11/15/22 9,500 9,911,540
BB Denver City & Cnty Arpt Auth
(United Airlines) Ser 92A AMT
6.875%, 10/01/32 11,775 12,109,410
------------
23,642,510
FLORIDA-8.0%
NR Collier Cnty IDR
(Southern St Util) Ser 96 AMT
6.50%, 10/01/25 14,605 14,614,785
AAA Dade Cnty Arpt Rev
(Miami Int'l Arpt) MBIA Ser 95B AMT
6.00%, 10/01/24 7,160 7,279,859
AAA Escambia Cnty HFA
SFMR (Multi County Proj)
GNMA Ser 95B AMT
6.25%, 4/01/28 8,955 9,042,938
AAA Florida HFA
SFMR (Mtg Hsg Fin Agy)
GNMA Coll Ser 94B AMT
6.65%, 7/01/26 3,190 3,320,981
AAA Hillsborough Cnty Aviation
Arpt Rev (Tampa Int'l)
FGIC Ser 96A AMT
6.00%, 10/01/23 1,500 1,543,635
NR Northern Palm Beach Cnty
Imp Dist #9A (ABACOA) Ser 96A
7.20%, 8/01/16 5,000 5,070,350
AA- Orlando Util Comm
(Wtr & Elec Rev) Ser 93B
7.266%, 10/06/17 (a) 4,550 4,484,708
Aaa* Pinellas Cnty HFA
SFMR GNMA Ser 94A AMT
6.55%, 8/01/27 1,855 1,911,262
Baa* Volusia Cnty Ed Fac Auth Rev
(Embry-Riddle Aero Univ) Ser 96A
6.125%, 10/15/26 3,860 3,907,092
------------
51,175,610
7
NATIONAL PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
STANDARD PRINCIPAL
& POOR'S AMOUNT
RATINGS# (000) VALUE
- -------------------------------------------------------------------------
GEORGIA-5.5%
AAA Atlanta
Arpt Fac Rev MBIA AMT
Zero coupon, 1/01/10 $75,535 $35,150,212
INDIANA-8.5%
BB Indianapolis Arpt Auth
(United Airlines Maint Ctr Proj)
Ser 95A AMT
6.50%, 11/15/31 41,570 41,796,141
AA Warrick Cnty
PCR (So Indiana Gas & Elec Co)
Ser 93B AMT
6.00%, 5/01/23 12,290 12,535,308
------------
54,331,449
MARYLAND-0.2%
NR Maryland Ind Dev Fin Auth Eco Dev
(Med Waste Assoc) Ser 89 AMT
8.75%, 11/15/10 1,440 1,494,245
MASSACHUSETTS-4.0%
A+ Massachusetts Bay Trans Auth
Ser 92C
6.10%, 3/01/23 1,715 1,770,960
AAA Massachusetts Ed Fin Auth
Education Loan Rev AMBAC Ser 94E AMT
6.00%, 1/01/12 4,440 4,478,406
AAA Massachusetts HFA
MFHR (Harbor Point Dev)
AMBAC Ser 96A AMT
6.40%, 12/01/15 6,940 7,041,532
AAA Massachusetts HFA
MFHR (Rental Hsg) AMBAC Ser 95E AMT
6.00%, 7/01/37 2,680 2,623,854
AAA Massachusetts Ind Fin Agy
Elec Rev Sys
(Nantucket Elec Proj)
AMBAC Ser 96A AMT
5.875%, 7/01/17 1,435 1,446,308
A* Massachusetts Ind Fin Auth
Ed Fac (Brooks School) Ser 93
5.95%, 7/01/23 1,670 1,684,446
AAA Massachusetts Ind Fin Auth
MFHR (Heights Crossing) FHA Ser 95 AMT
6.15%, 2/01/35 6,445 6,475,356
------------
25,520,862
MICHIGAN-2.8%
BBB Detroit GO
Ser 93
6.35%, 4/01/14 4,250 4,349,577
AAA Kent Cnty GO Arpt Rev
(Kent Cnty Int'l) Ser 95 AMT
6.10%, 1/01/25 4,340 4,461,911
AA+ Michigan HDA
SFMR (Mortgage Rev) Ser 96B AMT
6.20%, 6/01/27 5,805 5,828,394
A- Michigan Strategic Fund
PCR (General Motors Corp) Ser 95
6.20%, 9/01/20 2,810 2,896,829
------------
17,536,711
MINNESOTA-4.2%
BBB+ Bass Brook PCR
(Minnesota Pwr & Light) Ser 92
6.00%, 7/01/22 1,350 1,353,969
AAA Burnsville-Eagan-Savage GO
Ind Sch Dist #191 CGIC Ser 95A
6.20%, 2/01/17 1,150 1,210,410
AA+ Duluth GO
Arpt Lease Rev Ser 95C AMT
6.25%, 8/01/14 4,140 4,311,893
AAA Minneapolis GO
SFMR (Home Ownership/Renovation)
Ser 93 Stage III AMT
5.70%, 12/01/23 3,525 3,458,095
AAA Minnesota HFA
MFHR (Rental Housing) MBIA Ser 95D
6.00%, 2/01/22 1,000 1,006,730
AA+ Minnesota HFA
SFMR (Home Mortgage) Ser 93-C2 AMT
6.15%, 7/01/23 2,460 2,481,082
8
ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
STANDARD PRINCIPAL
& POOR'S AMOUNT
RATINGS# (000) VALUE
- -------------------------------------------------------------------------
AA+ Minnesota HFA
SFMR (Home Mortgage) Ser 96F AMT
6.30%, 1/01/28 $ 4,600 $ 4,650,922
AA+ Minnesota HFA
SFMR (Home Mortgage) Ser 96G AMT
6.25%, 7/01/26 8,500 8,560,180
------------
27,033,281
NEBRASKA-1.2%
A* Nebraska Higher Ed
Student Loan Rev Ser 93B AMT
5.875%, 6/01/14 7,705 7,535,413
NEW JERSEY-2.1%
AAA New Jersey Eco Dev Auth
(Elizabethtown Wtr Co)
MBIA Ser 95 AMT
5.60%, 12/01/25 6,000 5,881,560
AAA New Jersey Eco Dev Auth
(Hackensack Wtr Co) MBIA Ser 94B AMT
5.90%, 3/01/24 1,345 1,361,207
AAA New Jersey Eco Dev Auth
PCR (Public Svc Elec & Gas)
MBIA Ser 94A AMT
6.40%, 5/01/32 1,420 1,484,653
AA- New Jersey Eco Dev Auth
Swr Rev (Anheuser-Busch) Ser 95 AMT
5.85%, 12/01/30 1,400 1,411,270
AAA New Jersey Hsg & Mtg Fin Agy
MFHR Pooled Loan AMBAC Ser 96A AMT
6.25%, 5/01/28 2,950 2,974,013
------------
13,112,703
NEW YORK-9.6%
AAA Monroe Cnty Arpt Auth
Arpt Rev (Gtr Rochester Int'l)
MBIA Ser 93 AMT
5.50%, 1/01/13 2,450 2,398,501
BBB+ New York City GO
Ser 95B
7.25%, 8/15/19 1,350 1,461,132
AAA Niagara Frontier Trans Auth Arpt Rev
(Gtr Buffalo Int'l)
AMBAC Ser 94A AMT
6.25%, 4/01/24 1,200 1,248,336
A+ NYS Energy Res & Dev
Auth (Consolidated Edison) Ser 94A AMT
7.125%, 12/01/29 13,000 14,439,100
AAA NYS Energy Res & Dev Auth Gas Fac
(Brooklyn Union Gas) MBIA AMT
5.60%, 6/01/25 10,000 9,614,200
AAA NYS Energy Res & Dev Auth Solid Waste
(NYS Elec & Gas) MBIA Ser 93A AMT
5.70%, 12/01/28 8,000 7,770,400
BBB NYS Envir Fac Auth IDR
(Occidental Petroleum) Ser 93A AMT
5.70%, 9/01/28 3,350 3,113,825
Aa* NYS HFA MFHR (Syracuse/Springville Proj)
Ser 93A AMT
5.95%, 8/15/24 5,650 5,588,811
AA- Port Auth of NY & NJ
Cons (95th Ser) AMT
6.125%, 7/15/29 4,600 4,688,688
AAA Port Auth of NY & NJ
Cons (96th Ser) FGIC AMT
6.60%, 10/01/23 10,000 10,768,600
------------
61,091,593
OHIO-5.5%
AAA Cleveland Arpt Rev
(Cleveland Int'l) FGIC Ser 94A AMT
6.25%, 1/01/20 10,000 10,467,000
AAA Columbus Arpt Rev
(PT Columbus Int'l) MBIA Ser 94A AMT
6.25%, 1/01/24 1,695 1,766,749
A Cuyahoga Cnty Hosp Rev
(Meridia Hlth Sys) Ser 95
6.25%, 8/15/24 2,560 2,632,474
9
NATIONAL PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
STANDARD PRINCIPAL
& POOR'S AMOUNT
RATINGS# (000) VALUE
- -------------------------------------------------------------------------
AAA Ohio Air Quality Dev Auth
(JMG Funding/Ohio Pwr Co)
AMBAC Ser 94B AMT
6.375%, 4/01/29 $ 7,850 $ 8,258,435
NR Ohio Air Quality Dev Auth
PCR (Columbus So Pwr) Ser 85B
6.25%, 12/01/20 2,600 2,630,316
AA- Ohio Air Quality Dev Auth PCR
(Dayton Power & Light Proj) Ser 92B
6.40%, 8/15/27 1,900 1,992,131
A Ohio Wtr Dev Auth Solid Waste
(North Star BHP) AMT
6.45%, 9/01/20 4,275 4,426,036
Aa3* Toledo-Lucas Cnty Port Auth IDR
(Cargill Inc. Proj)
5.90%, 12/01/15 2,640 2,698,608
------------
34,871,749
PENNSYLVANIA-2.6%
AAA Allegheny Cnty Arpt Rev
(Gtr Pittsburgh Int'l) FSA
Ser 92B AMT
6.625%, 1/01/22 1,980 2,113,175
A- Cambria Township Wtr Auth
Ser 93A AMT
6.00%, 12/01/12 1,400 1,459,822
AAA Pennsylvania Higher Ed Student Loan Rev
AMBAC Ser 88D AMT
6.05%, 1/01/19 7,700 7,797,482
AAA Philadelphia Arpt Sys Rev
AMBAC Ser 95A AMT
6.10%, 6/15/25 4,950 5,066,077
------------
16,436,556
RHODE ISLAND-1.3%
AA+ Rhode Island Hsg & Mtg Fin Corp
SFMR (Home Ownership) Ser 92-7A AMT
6.75%, 10/01/25 8,000 8,306,480
SOUTH DAKOTA-1.7%
AA+ South Dakota HDA
SFMR (Home Ownership) Ser 91D-93-II AMT
6.15%, 5/01/26 9,600 9,445,920
6.25%, 5/01/26 1,440 1,436,126
------------
10,882,046
TENNESSEE-1.3%
BBB Memphis Shelby Cnty Spec Fac
(Federal Express) Ser 93 AMT
6.20%, 7/01/14 8,000 8,052,320
TEXAS-3.6%
BB+ Alliance Arpt Auth Fac Imp
(American Airlines) Ser 90 AMT
7.50%, 12/01/29 11,690 12,467,619
BBB Alliance Arpt Auth Spec Fac
(Federal Express) Ser 96 AMT
6.375%, 4/01/21 10,200 10,219,686
------------
22,687,305
UTAH-1.7%
AAA Emery Cnty
PCR (Pacific Proj) AMBAC AMT
5.625%, 11/01/23 11,400 10,949,472
VIRGINIA-5.1%
A Alexandria Redev & Hsg
MFHR (Buckingham Village) Ser 96A AMT
6.15%, 1/01/29 4,000 4,005,960
Aa* Chesapeake IDA
(Cargill Inc. Proj) Ser 93
5.875%, 3/01/13 1,705 1,752,655
A+ Giles Cnty IDR
(Hoechst-Celanese Corp) Ser 96 AMT
6.45%, 5/01/26 3,460 3,590,788
A- Isle of Wight Cnty IDA
Solid Waste (Union Camp Corp)
Ser 94 AMT
6.55%, 4/01/24 3,685 3,863,870
10
ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
STANDARD PRINCIPAL
& POOR'S AMOUNT
RATINGS# (000) VALUE
- -------------------------------------------------------------------------
AAA Metro Wash Arpt Auth
MBIA Ser 94A AMT
5.75%, 10/01/20 $ 4,680 $ 4,602,078
A* Prince William Cnty IDA
Hosp Rev (Potomac Hosp Grp) Ser 95
6.75%, 10/01/15 1,920 2,046,566
NR Staunton IDA
Ed Fac (Mary Baldwin College) Ser 96
6.75%, 11/01/21 2,000 2,019,600
AA Virginia Beach
Hosp Rev (Sentara Bayside)
6.30%, 11/01/21 700 720,678
AA Virginia College Bldg Auth Ed Fac Rev
(Washington & Lee)
5.80%, 1/01/24 3,500 3,507,070
AA+ Virginia HDA
SFMR (Commonwealth Mtg) Ser 96B AMT
6.375%, 1/01/26 5,000 5,042,400
AA Virginia Res Auth Swr Rev
(Hopewell Fac) Ser 95A AMT
6.00%, 10/01/25 1,065 1,083,691
------------
32,235,356
WASHINGTON-2.9%
BBB+ Pilchuck Dev Pub Corp Spec Fac
(BF Goodrich) Ser 93 AMT
6.00%, 8/01/23 19,000 18,408,340
WEST VIRGINIA-0.9%
AAA West Virginia Eco Dev
Pkwy Rev FGIC Ser 93
7.817%, 5/16/19 (a) 6,000 6,013,740
WISCONSIN-2.3%
AAA Wisconsin GO
MBIA Ser 96B AMT
6.20%, 11/01/26 13,930 14,315,861
TOTAL LONG TERM MUNICIPAL BONDS
(cost $606,953,830) 624,155,380
SHORT TERM MUNICIPAL NOTE-0.2%
ILLINOIS-0.2%
NR Illinois Health Fac Auth
(Ingalls Mem Hosp) Ser 85B VRDN
3.55%, 1/01/16 (b)
(cost $1,400,000) 1,400 1,400,000
TOTAL INVESTMENTS-98.3%
(cost $608,353,830) 625,555,380
Other assets less liabilities-1.7% 10,861,102
NET ASSETS-100% $636,416,482
# Unaudited.
* Moody's or Fitch Rating.
(a) Inverse floater security--security with variable or floating interest rate
that moves in opposite direction of short-term interest rates.
(b) Variable Rate Demand Notes (VRDN) are instruments whose interest rates
change on a specific date (such as coupon date or interest payment date) or
whose interest rates vary with changes in a designated base rate (such as the
prime interest rate). This instrument is payable on demand and is secured by
letters of credit or other credit support agreements from major banks.
See Glossary of Terms on page 22.
See notes to financial statements.
11
INSURED NATIONAL PORTFOLIO
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1996 ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
STANDARD PRINCIPAL
& POOR'S AMOUNT
RATINGS# (000) VALUE
- -------------------------------------------------------------------------
MUNICIPAL BONDS-96.8%
LONG TERM MUNICIPAL BONDS-95.1%
ALABAMA-8.2%
AAA West Jefferson PCR
(Alabama Power) MBIA Ser 93C
6.05%, 5/01/23 $19,000 $19,303,430
ALASKA-4.3%
AAA Alaska Hsg Fin Corp
MFHR Mtg Rev MBIA Ser 96A
6.00%, 12/01/15 6,400 6,385,216
6.05%, 12/01/17 2,000 1,995,160
A+ Alaska Hsg Fin Corp SFMR
Insured Mtg Prog Ser 93I
5.90%, 12/01/33 1,850 1,793,131
------------
10,173,507
ARIZONA-9.2%
AAA Glendale IDA
Ed Fac (Midwestern Univ)
CONNIE LEE Ser 96A
6.00%, 5/15/26 960 988,157
AAA Maricopa Cnty
Hosp Rev (Cath Hlth West)
MBIA Ser 93
7.472%, 7/01/13 (a) 1,305 1,304,961
AAA Maricopa Cnty GO
Chandler Sch Imp #80 FGIC Ser 95
6.00%, 7/01/13 970 1,015,852
AAA Maricopa Cnty GO
Kyrene Elem Sch Imp #28 FGIC Ser 95B
6.00%, 7/01/14 2,000 2,074,260
AAA Maricopa Cnty GO
Sch Dist #28 FGIC Ser 93C
Zero coupon, 7/01/11 6,000 2,632,860
AAA Maricopa Cnty Hlth Fac
(Samaritan Hlth) MBIA Ser 90A
7.00%, 12/01/13 545 597,407
AAA Mohave Cnty IDA
(Baptist Hospital) MBIA Ser 96
5.75%, 9/01/26 560 561,372
AA Phoenix IDA
MFHR (Woodstone & Silver Springs)
Ser 93 Asset Gty
6.25%, 4/01/23 2,460 2,501,574
AA+ Phoenix Sr Lien
(Civic Plaza Bldg Corp) Ser 94
6.00%, 7/01/12 3,485 3,619,173
AAA Tempe IDR
MFHR (Mtg-Quadrangles) FHA Ser 93
6.25%, 6/01/26 4,625 4,704,411
AAA Yavapai Cnty GO
Humboldt Sch Imp #22 FGIC Ser 95A
5.95%, 7/01/14 1,500 1,542,780
------------
21,542,807
CALIFORNIA-12.4%
AAA Los Angeles Cnty
Metro Trans Auth MBIA Ser 93A
5.625%, 7/01/18 8,000 7,895,840
AAA Orange Cnty
Saddleback Valley Sch Dist FSA Ser 95A
5.65%, 9/01/17 5,000 4,981,350
AAA Palm Springs ETM Ser 91B
Zero coupon, 4/15/21 34,025 7,907,070
AAA San Francisco City & Cnty Int'l Arpt
MBIA Ser 10B
5.50%, 5/01/26 5,000 4,906,950
AAA Univ of California Regents
Hosp Rev (UCLA Med Ctr) MBIA Ser 94
5.50%, 12/01/20 3,685 3,598,366
------------
29,289,576
COLORADO-4.8%
AAA Denver City & Cnty Arpt Sys Rev
MBIA Ser 95A-96A
5.50%, 11/15/25 5,000 4,838,100
5.70%, 11/15/25 6,375 6,347,906
------------
11,186,006
12
ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
STANDARD PRINCIPAL
& POOR'S AMOUNT
RATINGS# (000) VALUE
- -------------------------------------------------------------------------
FLORIDA-1.1%
A Duval Cnty HFA
MFHR (St Augustine Apts)
5.90%, 9/01/16 $ 2,555 $ 2,531,187
ILLINOIS-1.8%
AAA Metro Pier & Expo Auth
(McCormick Place Expo) FGIC Ser 93A
Zero coupon, 6/15/19 15,850 4,209,760
MASSACHUSETTS-14.0%
AAA Chelsea GO
AMBAC Ser 94
6.00%, 6/15/14 1,965 2,046,371
AAA Holyoke GO
FSA Ser 93B
6.125%, 8/01/13 1,435 1,502,502
AAA Massachusetts Muni
Wholesale (Elec Pwr Supply Sys)
MBIA Ser 92A
6.00%, 7/01/18 4,850 4,909,703
AAA Massachusetts HFA
MFHR (Residential Dev) AMBAC Ser 93A
6.15%, 10/01/15 9,500 9,623,595
AAA Massachusetts HFA
MFHR (Residential Dev) FNMA Ser 92F
6.25%, 11/15/12 5,000 5,142,650
AAA Massachusetts HFA
SFMR (Residential Dev) FNMA Ser 92A
6.90%, 11/15/24 2,500 2,659,500
AAA Massachusetts Hlth & Ed
Fac Hosp Rev
(New England Med Ctr) MBIA
6.63%, 7/01/18 (a) 5,000 4,463,350
AA- Massachusetts Wtr Poll
(So Essex Proj) Ser 94A
6.375%, 2/01/15 2,470 2,613,631
------------
32,961,302
MICHIGAN-13.9%
AAA Brighton GO AMBAC
Sch Dist Ser 92-II
Zero coupon, 5/01/18 7,295 2,112,997
AAA Detroit Swr Sys Rev
Ser 93A
7.491%, 7/01/23 (a) 11,080 10,732,199
AAA Grand Rapids Swr Disp Rev Sys
MBIA Ser 92
6.00%, 1/01/22 1,825 1,865,223
AAA Kalamazoo Hosp Fin Auth Hosp Rev
(Borgess Med Ctr) FGIC Ser 94A
6.668%, 6/01/11 (a) 5,750 5,445,365
AAA Lowell Area Schools GO
FGIC Ser 92
Zero coupon, 5/01/19 7,050 1,953,061
AAA Michigan Hosp Fin Auth Hosp Rev
(St. John's Hospital) AMBAC Ser 92A
6.00%, 5/15/13 330 340,649
AA Michigan Muni Bond Auth
Revolving Fund Rev Ser 93
5.40%, 10/01/14 3,000 2,942,490
AAA Michigan Strategic Fund
PCR (Detroit Edison Co.) MBIA Ser 95AA
6.40%, 9/01/25 4,375 4,630,237
AAA Three Rivers GO
Sch Dist MBIA Ser 96
6.00%, 5/01/23 1,745 1,812,532
AAA Yale Pub Sch Dist GO
AMBAC Ser 93
5.50%, 5/01/23 990 965,725
------------
32,800,478
MINNESOTA-5.7%
AAA Lakeville GO
(Ind Sch Dist #194) FGIC Ser 93
5.60%, 2/01/18 1,000 985,250
AAA Minneapolis
(Spec Sch Dist #1) MBIA Ser 96A
5.90%, 2/01/17 4,120 4,204,790
13
INSURED NATIONAL PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
STANDARD PRINCIPAL
& POOR'S AMOUNT
RATINGS# (000) VALUE
- -------------------------------------------------------------------------
AAA Minnesota HFA
MFHR (Rental Hsg) MBIA Ser 95D
6.00%, 2/01/22 $ 3,500 $ 3,523,555
AAA Minnesota Pub Fac Auth
(Wtr Poll Ctr Rev) Ser 95A
6.25%, 3/01/15 1,005 1,064,325
AAA So Minnesota Muni Pwr Auth
(Pwr Supply Sys) MBIA Ser 94
Zero coupon, 1/01/26 13,060 2,452,015
AAA St Francis GO
(Ind Sch Dist #15) CGIC Ser 95A
6.375%, 2/01/16 1,165 1,253,668
------------
13,483,603
NEBRASKA-1.5%
AAA Nebraska Inv Fin Auth Hosp Rev
(Bishop Clarkson Mem) MBIA Ser 91
9.507%, 11/15/16 (a) 3,000 3,473,280
NEW YORK-5.5%
AAA Glen Cove IDR
(The Regency at Glen Cove) Ser 92B ETM
Zero coupon, 10/15/19 30,000 7,796,400
AAA New York City GO
MBIA Ser 93D
6.00%, 5/15/11 5,000 5,237,550
------------
13,033,950
OHIO-1.2%
AA- Ohio Trpk Comm Rev
Ser 94A
5.75%, 2/15/24 2,700 2,705,481
PENNSYLVANIA-2.5%
AAA Pennsylvania Conv Ctr
MBIA Ser 94A
6.75%, 9/01/19 2,500 2,764,325
AAA Pennsylvania Trpk Comm
(Oil Franchise Tax Rev) AMBAC Ser 94A
6.00%, 12/01/19 1,900 1,969,635
AA Potter Cnty Hosp Auth Hosp Rev
(Charles Cole Mem Hosp)
Ser 96 Asset Gty
6.05%, 8/01/24 1,150 1,162,386
------------
5,896,346
VIRGINIA-9.0%
AAA Chesapeake Bay Bridge & Tunnel Auth
MBIA Ser 91
5.75%, 7/01/25 1,620 1,606,360
AAA Harrisonburg Redev & Hsg Auth
MFHR (Battery Heights Assoc)
GNMA Ser 96
6.25%, 4/20/36 5,185 5,282,478
AA Henrico Cnty IDR
(Henrico Cnty Reg Jail) Ser 94
7.125%, 8/01/21 3,735 4,262,195
AAA Loudoun Cnty IDA
(Loudoun Hosp Ctr) FSA Ser 95
5.80%, 6/01/20 2,200 2,222,396
AAA Newport News IDA
MFHR (Mennowood) GNMA
6.25%, 8/01/36 1,925 1,963,769
AAA Richmond Met Auth
(Expressway Rev) FGIC Ser 92B
6.25%, 7/15/22 700 727,167
AAA Virginia HFA
SFMR (Home Mtg Rev) MBIA Ser 95D
5.75%, 1/01/19 5,000 5,031,200
------------
21,095,565
TOTAL LONG TERM MUNICIPAL BONDS
(cost $215,340,978) 223,686,278
14
ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
STANDARD PRINCIPAL
& POOR'S AMOUNT
RATINGS# (000) VALUE
- -------------------------------------------------------------------------
SHORT TERM MUNICIPAL NOTES-1.7%
ILLINOIS-0.5%
VMIG-1* Illinois Ed Fac Auth
(Cultural Pooled Financial Prog)
Ser 85 VRDN
3.50%, 12/01/25 (b) $ 500 $ 500,000
VMIG-1* Illinois Health Fac
(Ingalls Mem Hosp) Ser 85B VRDN
3.55%, 1/01/16 (b) 600 600,000
------------
1,100,000
INDIANA-1.2%
A-1 Indiana Hosp Fin Auth
MBIA Ser 85A VRDN
3.55%, 12/01/15 (b) 2,940 2,940,000
TOTAL SHORT TERM MUNICIPAL NOTES
(cost $4,040,000) 4,040,000
TOTAL INVESTMENTS-96.8%
(cost $219,380,978) 227,726,278
Other assets less liabilities-3.2% 7,617,427
NET ASSETS-100% $235,343,705
# Unaudited.
* Moody's or Fitch Rating.
(a) Inverse floater security--security with variable or floating interest rate
that moves in opposite direction of short-term interest rates.
(b) Variable Rate Demand Notes (VRDN) are instruments whose interest rates
change on a specific date (such as coupon date or interest payment date) or
whose interest rates vary with changes in a designated base rate (such as the
prime interest rate). This instrument is payable on demand and is secured by
letters of credit or other credit support agreements from major banks.
See Glossary of Terms on page 22.
See notes to financial statements.
15
NEW YORK PORTFOLIO
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1996 ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
STANDARD PRINCIPAL
& POOR'S AMOUNT
RATINGS# (000) VALUE
- ------------------------------------------------------------------------
NEW YORKMUNICIPAL BONDS-98.7%
A- Essex County IDA
(Int'l Paper) Ser 95A AMT
5.80%, 12/01/19 $ 7,000 $ 6,842,990
AAA Glen Cove IDR
(The Regency At Glen Cove)
Ser 92B ETM
Zero coupon, 10/15/19 30,010 7,798,999
AAA Islip Res Rec Agy
AMBAC Ser 94B AMT
6.125%, 7/01/12 2,020 2,095,023
BBB+ New York City GO
Ser 92C
7.00%, 8/01/16 1,735 1,856,571
BBB+ New York City GO
Ser 93A
6.25%, 8/01/18 6,000 6,002,880
BBB+ New York City GO
Ser 93D
8.004%, 8/29/14 (a) 6,250 6,175,375
BBB+ New York City GO
Ser 95B
7.25%, 8/15/19 9,630 10,422,742
BBB+ New York City GO
Ser 96J
6.00%, 2/15/24 15,580 15,110,886
BBB+ New York City GO
Ser 97A
6.25%, 8/01/17 16,750 16,761,725
BB+ New York City IDA
(American Airlines) Ser 94 AMT
6.90%, 8/01/24 12,000 12,686,520
A New York City IDA
(Terminal One LP) Ser 94 AMT
6.125%, 1/01/24 41,500 41,625,330
NR New York City IDA
(Visy Paper) Ser 95 AMT
7.80%, 1/01/16 2,000 2,133,360
AAA Niagara Frontier Trans Arpt Auth
(Gtr Buffalo Int'l) AMBAC Ser 94A AMT
6.25%, 4/01/24 14,925 15,526,179
AAA NYS Energy Res & Dev Auth
(Brooklyn Union Gas) MBIA AMT
7.457%, 7/08/26 (a) 6,000 5,521,020
AAA NYS Energy Res & Dev Auth
(Brooklyn Union Gas) MBIA Ser 89B AMT
6.75%, 2/01/24 7,500 8,115,750
A+ NYS Energy Res & Dev Auth
(Consolidated Edison) Ser 94A AMT
7.125%, 12/01/29 14,000 15,549,800
AAA NYS Energy Res & Dev Auth
(Rochester Gas & Elec) MBIA AMT
6.50%, 5/15/32 6,460 6,756,514
AAA NYS Energy Res & Dev Auth
PCR (NYS Elec & Gas) MBIA Ser 87A AMT
6.15%, 7/01/26 15,000 15,399,450
AAA NYS Energy Res & Dev Auth
PCR (NYS Elec & Gas) MBIA Ser 88A AMT
5.95%, 12/01/27 6,700 6,736,917
AAA NYS Energy Res & Dev Auth Solid Waste
(NYS Elec & Gas) MBIA Ser 93A AMT
5.70%, 12/01/28 10,050 9,761,565
BBB NYS Envir Fac Auth IDR
(Occidental Petroleum) Ser 93A AMT
5.70%, 9/01/28 16,600 15,429,700
NR NYS Envir Fac Corp Wtr Fac
(Long Island Wtr Corp) Ser 87A AMT
10.00%, 10/01/17 3,200 3,360,160
AAA NYS Envir Fac Corp Wtr Fac
(Spring Valley Wtr) AMBAC Ser 94A AMT
6.30%, 8/01/24 11,800 12,286,396
Aa* NYS HFA MFHR (Westchester/Onondaga/
Rockland Proj) Ser 92F AMT
6.70%, 8/15/25 6,000 6,218,700
16
ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
STANDARD PRINCIPAL
& POOR'S AMOUNT
RATINGS# (000) VALUE
- -------------------------------------------------------------------------
Aa* NYS Mtg Agy
SFMR Ser 42 AMT
6.65%, 4/01/26 $ 4,500 $ 4,646,790
Aa* NYS Mtg Agy
SFMR Ser 46 AMT
6.65%, 10/01/25 19,960 20,665,786
AAA Onondaga Cnty
PCR (Bristol-Myers Squibb) AMT
5.75%, 3/01/24 8,000 8,087,600
AA- Port Auth of NY & NJ
Cons Rev (95th Ser) AMT
6.125%, 7/15/29 14,955 15,243,332
AAA Troy HDC
MFHR (Ninth St #2) FHA Ser 90B
8.10%, 2/01/24 3,535 3,898,257
AAA Troy HDC
MFHR (TUR Proj.) FHA Ser 90C
8.10%, 2/01/24 3,780 4,197,879
TOTAL INVESTMENTS-98.7%
(cost $295,080,901) 306,914,196
Other assets less liabilities-1.3% 4,059,005
NET ASSETS-100% $310,973,201
# Unaudited.
* Moody's or Fitch Rating.
(a) Inverse floater security--security with variable or floating interest rate
that moves in opposite direction of short-term interest rates.
See Glossary of Terms on page 22.
See notes to financial statements.
17
CALIFORNIA PORTFOLIO
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1996 ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
STANDARD PRINCIPAL
& POOR'S AMOUNT
RATINGS# (000) VALUE
- -------------------------------------------------------------------------
CALIFORNIA MUNICIPAL BONDS-98.6%
A+ California GO
(Veterans Hsg) Ser 95 AMT
6.40%, 2/01/20 $40,000 $40,848,400
AAA California HFA
MFHR (Home Mtg Rev) MBIA Ser 91A AMT
7.20%, 2/01/26 3,450 3,631,401
AAA California HFA
MFHR (Home Mtg Rev) MBIA Ser 91C AMT
7.00%, 8/01/23 1,475 1,542,791
A+ California HFA
MFHR (Multi-Unit Rental Hsg)
Ser 92A AMT
6.50%, 2/01/14 4,865 4,988,960
AAA California HFA
SFMR (Home Mtg Rev) AMBAC Ser 96H AMT
6.20%, 2/01/27 8,000 8,032,160
AA- California HFA
SFMR (Home Mtg Rev) Ser 91G AMT
7.05%, 8/01/27 5,570 5,771,021
AAA California HFA
SFMR (Home Mtg Rev) Ser 95A-2 AMT
6.45%, 8/01/25 13,400 13,759,254
AA- California HFA
SFMR (Home Mtg Rev) Ser E AMT
6.70%, 8/01/25 9,850 10,157,714
A California Poll Ctl Fin Auth
(Browning-Ferris Ind/Keller Canyon)
Ser 92 AMT
6.875%, 11/01/27 5,000 5,267,900
A California Poll Ctl Fin Auth
PCR (Pacific Gas & Elec) Ser 93A AMT
5.875%, 6/01/23 7,200 7,071,408
A+ California Poll Ctl Fin Auth
PCR (San Diego Gas & Elec)
Ser 93A-C AMT
5.85%, 6/01/21 32,335 32,042,045
A+ California Poll Ctl Fin Auth
Res Rec (Waste Mgmt Inc) Ser 91A AMT
7.15%, 2/01/11 2,400 2,607,696
A California Poll Ctl Fin Auth
PCR (Pacific Gas & Elec) Ser 93B AMT
5.85%, 12/01/23 70,000 68,507,600
A+ California Poll Ctl Fin Auth
PCR (So Calif Edison) Ser 92B AMT
6.40%, 12/01/24 36,030 37,078,473
A+ Chula Vista PCR
(San Diego Gas & Elec) Ser 92A AMT
6.40%, 12/01/27 28,240 29,318,203
Aaa* Contra Costa Cnty
MFHR (Byron Park Proj)
GNMA Ser 93A AMT
6.40%, 1/20/31 11,860 12,143,217
NR Encinitas Comm Fac Dist #1
(Encinitas Ranch) Ser 95A
7.375%, 9/01/26 23,000 23,533,830
NR Encinitas Rec Rev
(Encinitas Ranch Golf Course) Ser 96A
7.75%, 9/01/26 10,760 10,907,735
NR Fairfield Assess Dist
(No Cordelia Imp Dist) Ser 93
7.375%, 9/02/18 2,510 2,585,225
AAA Fairfield Pub Fin Auth
Tax Alloc (Fairfield Proj)
CGIC Ser 93C
5.50%, 8/01/23 4,000 3,874,480
NR Fontana Comm Fac Dist #3
(Hunters Ridge) Ser 90A
8.70%, 10/01/15 8,000 8,330,720
NR Fontana Redev Agy
(Jurupa Hills Proj) Ser 94
8.00%, 1/01/98 5,000 5,057,550
AAA Fremont FHA
MFHR (Regency Sq Apts) Ser 86A AMT
7.75%, 11/01/28 1,500 1,587,720
18
ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
STANDARD PRINCIPAL
& POOR'S AMOUNT
RATINGS# (000) VALUE
- -------------------------------------------------------------------------
AAA Garden Grove
MFHR (Tudor Grove) GNMA Coll AMT
7.25%, 5/20/32 $ 7,255 $ 7,463,436
AA- Long Beach Harbor Rev
Ser 93 AMT
5.125%, 5/15/13 16,150 15,147,569
AAA Los Angeles Cnty Arpt
(Ontario Int'l Arpt) FGIC Ser 96A AMT
6.00%, 5/15/22 12,780 13,049,658
NR Los Angeles Cnty Comm Fac Dist #3
(Valencia/Newhall Area) Ser 95A
7.125%, 9/01/20 5,500 5,600,870
NR Los Angeles Cnty Comm Fac Dist #4
(Calabasas Area) Ser 92A
7.65%, 9/01/17 7,500 7,755,600
NR Los Angeles Cnty Comm Fac Dist #92-1
(Castaic Union SD Northlake Proj)
Ser 92
9.00%, 10/01/19 8,710 9,052,042
BBB+ Los Angeles Comm Redev
MFHR (Grand Ctrl Proj) Ser 93A AMT
5.85%, 12/01/26 7,030 6,770,031
AAA Los Angeles Harbor Rev
MBIA Ser 96B AMT
6.20%, 8/01/25 10,000 10,440,000
AA Los Angeles Harbor Rev
Ser 95A AMT
6.625%, 8/01/25 24,000 25,432,320
AAA No Calif Trans Agy Elec Rev
(Calif-Oregon Trans) MBIA Ser 93A
6.822%, 4/29/24 (a) 14,250 13,384,170
NR Novato Comm Fac Dist #94-1
(Hamilton Field) Ser 95
7.375%, 9/01/25 6,100 6,360,043
NR Ontario Assess Dist #107
(CA Commerce Ctr So)
7.70%, 9/02/10 6,130 6,316,904
AAA Orange Cnty Arpt Rev
(John Wayne Int'l Arpt)
MBIA Ser 93 AMT
5.50%, 7/01/18 16,500 15,833,565
NR Orange Cnty Comm Fac Dist #87-2
(Portola Hills) Ser 91A
9.30%, 8/15/16 8,950 9,385,955
BBB- Orange Cnty Sr Lien
Foothill/Eastern Corridor Agy
Ser 95A
Zero coupon, 1/01/15 18,500 5,863,390
Zero coupon, 1/01/25 15,000 2,456,700
Zero coupon, 1/01/27 10,000 1,440,300
Zero coupon, 1/01/28 10,000 1,350,700
NR Orange Cnty Sr Lien
San Joaquin Hills Trans Corridor
Ser 93
Zero coupon, 1/01/17 16,000 4,556,320
Zero coupon, 1/01/19 20,000 5,027,800
Zero coupon, 1/01/20 20,000 4,671,400
Zero coupon, 1/01/21 20,000 4,387,000
Zero coupon, 1/01/23 35,000 6,771,100
Zero coupon, 1/01/25 33,100 5,571,061
7.00%, 1/01/30 15,000 15,944,700
AAA Palm Springs COP
Ser 91B ETM
Zero coupon, 4/15/21 20,000 4,647,800
AAA Palm Springs Fin Auth
Arpt Rev (Palm Springs Regional Arpt)
MBIA Ser 92 AMT
6.00%, 1/01/22 6,860 6,966,810
AAA Port of Oakland
MBIA Ser 92E AMT
6.40%, 11/01/22 23,370 24,514,663
6.50%, 11/01/16 8,000 8,469,120
A Port of Oakland Spec Fac
(Mitsui O.S.K. Lines) Ser 92A AMT
6.80%, 1/01/19 3,700 3,856,140
NR Riverside Cnty Assess Dist #161
(Winchester Prop) Ser 94C
10.00%, 9/02/14 7,005 7,175,011
19
CALIFORNIA PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
STANDARD PRINCIPAL
& POOR'S AMOUNT
RATINGS# (000) VALUE
- -------------------------------------------------------------------------
NR Riverside Comm Fac Dist #90-1
(Lusk-Highlander Proj) Ser 91A
8.50%, 9/01/15 $ 2,000 $ 2,053,520
AAA Sacramento Cnty Arpt Sys Rev
FGIC Ser 92A AMT
6.00%, 7/01/20 11,750 11,943,287
AAA Sacramento Cnty Arpt Sys Rev
MBIA Ser 96A AMT
5.90%, 7/01/24 5,050 5,079,139
AAA San Bernardino Cnty Solid Waste
(Inland Empire) FSA Ser 96B AMT
6.00%, 8/01/16 2,500 2,535,475
NR San Diego Comm Fac Dist #1
(Miramar Ranch North) Ser 95B
7.10%, 9/01/20 7,000 7,125,860
AAA San Francisco City & Cnty Int'l Arpt
AMBAC Ser 94 II-6 AMT
6.60%, 5/01/24 5,000 5,390,850
AAA San Francisco City & Cnty Int'l Arpt
FGIC Ser 94 II-5 AMT
6.50%, 5/01/24 11,000 11,695,970
AAA San Francisco City & Cnty Int'l Arpt
FGIC Ser 96-II AMT
6.25%, 5/01/26 7,000 7,263,480
AAA San Francisco City & Cnty Int'l Arpt
MBIA Ser 93 II-3 AMT
6.10%, 5/01/13 7,990 8,267,812
6.20%, 5/01/20 14,500 15,002,135
AAA San Jose Arpt Rev
(San Jose Arpt) FGIC Ser 93 AMT
5.70%, 3/01/18 8,825 8,738,250
AAA So Calif HFA
SFMR GNMA/FNMA Ser 92A AMT
6.75%, 9/01/22 1,425 1,488,270
Ser 91B
6.90%, 10/01/24 1,635 1,718,009
BBB+ Westminster Redev Agy
MFHR (Rose Garden Apt) AMT
6.75%, 8/01/24 4,300 4,354,438
AAA Yolo Cnty Hsg Auth
MFHR (Waggener Ranch Apts)
FHA Ser 91 AMT
7.00%, 10/01/33 9,000 9,581,310
TOTAL INVESTMENTS-98.6%
(cost $673,382,635) 706,545,486
Other assets less liabilities-1.4% 9,710,944
NET ASSETS-100% $716,256,430
# Unaudited.
* Moody's or Fitch Rating.
(a) Inverse floater security--security with variable or floating interest rate
that moves in opposite direction of short-term interest rates.
See Glossary of Terms on page 22.
See notes to financial statements.
20
INSURED CALIFORNIA PORTFOLIO
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1996 ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
STANDARD PRINCIPAL
& POOR'S AMOUNT
RATINGS# (000) VALUE
- -------------------------------------------------------------------------
CALIFORNIA MUNICIPAL BONDS-98.8%
LONG TERM MUNICIPAL BONDS-96.0%
AAA Alhambra COP
Assess Dist #91-1: Police Fac
AMBAC Ser 92
6.75%, 9/01/23 $ 5,000 $ 5,408,850
AAA Brea Pub Fin Auth
Tax Alloc Redev Proj B MBIA Ser 91A
7.00%, 8/01/15 1,470 1,617,103
AAA California HFA
MFHR (Home Mtg Rev) AMBAC Ser 95A
6.25%, 2/01/37 5,000 5,080,100
AAA Coronado Comm Dev Proj
Tax Alloc FSA Ser 96
6.00%, 9/01/26 8,700 8,974,311
AAA Fontana Pub Fin Auth
Tax Alloc (No Fontana) MBIA Ser 93A
5.625%, 9/01/24 9,805 9,729,109
AAA Glendale Hlth Fac Rev
(Glendale Mem Hosp) CONNIE LEE Ser 95A
5.60%, 11/15/25 2,000 1,949,580
AAA La Mirada Redev Agy
Tax Alloc (Commercial Redev)
CGIC Ser 95B
5.90%, 8/15/24 5,000 5,067,100
A Lancaster Redev Agy FHA
MFHR (High Valley Apts) Ser 96A
6.00%, 6/01/27 4,170 4,100,945
AAA Los Angeles Cnty Comm Redev
Tax Alloc (Bunker Hill Proj)
FSA Ser 93H
5.60%, 12/01/28 10,000 9,809,600
AAA Los Angeles Trans Comm
FGIC Ser 91B
6.50%, 7/01/15 5,000 5,316,200
AAA Madera Cnty COP
Hosp Rev (Valley Children's Hosp)
MBIA Ser 95
6.125%, 3/15/23 4,000 4,169,440
AAA Mojave Water Agy
(Morongo Basin Pipeline) FGIC Ser 96
5.80%, 9/01/22 10,000 10,101,300
AAA Northern Calif Trans Agy Elec Rev
(Calif-Oregon Trans) MBIA Ser 93A
6.82%, 4/29/24 (a) 5,000 4,696,200
AAA Orange Cnty COP
(Loma Ridge Data Ctr Proj)
AMBAC Pre-refunded
6.00%, 6/01/21 1,000 1,013,580
AAA Orange Cnty Rec Cert
MBIA Ser 96A
6.00%, 7/01/26 3,000 3,055,110
AAA Palm Springs ETM COP
Ser 91B
Zero coupon, 4/15/21 32,475 7,546,865
AAA Rancho Wtr Dist Fin Auth
AMBAC Ser 91 Pre-refunded
9.024%, 8/17/21 (a) 3,000 3,587,430
AAA Redding COP
Elec Sys Rev MBIA Ser 92A
8.901%, 7/01/22 (a) 2,000 2,408,940
AAA Sacramento Cnty
Arpt Sys Rev MBIA Ser 96B
5.75%, 7/01/26 3,260 3,265,184
AAA Sacramento Muni Util Dist
Elec Rev MBIA Ser 93E
5.75%, 5/15/22 5,000 5,023,250
AAA San Bernardino
Joint Pwr Fin Auth CGIC Ser 95A
5.75%, 10/01/25 5,000 5,007,700
AAA San Bernardino Cnty Redev ETM
(Ontario Red Proj 1) MBIA Ser 93
5.80%, 8/01/23 10,000 9,931,700
AAA San Dimas Redev Agy
(Creative Growth Refunding)
CGIC Ser 91A
6.75%, 9/01/16 1,000 1,079,540
21
INSURED CALIFORNIA PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
STANDARD PRINCIPAL
& POOR'S AMOUNT
RATINGS# (000) VALUE
- -------------------------------------------------------------------------
AAA San Francisco City & Cnty Int'l Arpt
MBIA Ser 93 II-4
6.00%, 5/01/14 $5,000 $ 5,140,400
AAA Shasta Lake Elec Sys Rev FSA Ser 96-2
6.00%, 4/01/16 2,895 2,966,825
AAA So Tahoe Jnt Pwr Fin Auth
Ser 95A CAP MAC
5.75%, 10/01/25 4,500 4,480,830
A Vacaville
MFHR (Vacaville Comm Hsg) Ser 94A
7.85%, 11/01/24 4,625 4,962,486
TOTAL LONG TERM MUNICIPAL BONDS
(cost $130,844,442) 135,489,678
SHORT TERM MUNICIPAL NOTES-2.8%
A-1+ Orange Cnty COP
Sanitation Dist 1-3 VRDN
3.55%, 8/01/15 (b) 1,900 1,900,000
A-1+ San Jose Redev Agy
Ser B VRDN
3.55%, 7/01/26 (b) 2,000 2,000,000
TOTAL SHORT TERM MUNICIPAL NOTES
(cost $3,900,000) 3,900,000
TOTAL INVESTMENTS-98.8%
(cost $134,744,442) 139,389,678
Other assets less liabilities-1.2% 1,674,704
NET ASSETS-100% $141,064,382
# Unaudited.
* Moody's or Fitch Rating.
(a) Inverse floater security--security with variable or floating interest rate
that moves in opposite direction of short-term interest rates.
(b) Variable Rate Demand Notes (VRDN) are instruments whose interest rates
change on a specific date (such as coupon date or interest payment date) or
whose interest rates vary with changes in a designated base rate (such as the
prime interest rate). This instrument is payable on demand and is secured by
letters of credit or other credit support agreements from major banks.
See Glossary of Terms below.
See notes to financial statements.
Glossary of Terms:
AMBAC American Municipal Bond Assurance Corporation
AMT Alternative Minimum Tax--(subject to)
CAPMAC Capital Markets Assurance Corporation
CGIC Capital Guaranty Insurance Corporation
COP Certificate of Participation
ETM Escrow to Maturity
FGIC Financial Guaranty Insurance Company
FHA Federal Housing Administration
FNMA Federal National Mortgage Association
FSA Financial Security Assurance, Inc.
GNMA Government National Mortgage Association
GO General Obligation
HDA Housing Development Authority
HDC Housing Development Corporation
HFA Housing Finance Authority
IDA Industrial Development Authority
IDR Industrial Development Revenue
MBIA Municipal Bond Investors Assurance
MFHR Multi-Family Housing Revenue
NR Rating not applied for
PCR Pollution Control Revenue
SFMR Single Family Mortgage Revenue
VRDN Variable Rate Demand Note
22
STATEMENTS OF ASSETS AND LIABILITIES
OCTOBER 31, 1996 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-$608,353,830; Ins. National-
$219,380,978; New York-$295,080,901;
California-$673,382,635; Ins. California-
$134,744,442, respectively) $625,555,380 $227,726,278 $306,914,196 $706,545,486 $139,389,678
Cash 127,698 75,670 200,949 -0- 2,146
Interest receivable 11,621,130 3,432,758 4,790,939 13,840,343 2,115,903
Receivable for investment securities sold 3,855,289 4,961,543 -0- 65,000 -0-
Receivable for capital stock sold 634,476 121,461 429,487 959,682 128,527
Prepaid expenses and other assets 25,557 16,521 -0- -0- 21
Total assets 641,819,530 236,334,231 312,335,571 721,410,511 141,636,275
LIABILITIES
Due to custodian -0- -0- -0- 2,431,637 -0-
Payable for investment securities purchased 2,247,200 -0- -0- -0- -0-
Payable for capital stock redeemed 1,447,452 372,274 609,709 835,530 95,445
Distribution fee payable 348,429 103,766 156,803 332,745 59,264
Advisory fee payable 108,172 98,802 39,401 214,973 65,535
Accrued expenses and other liabilities 1,251,795 415,684 556,457 1,339,196 351,649
Total liabilities 5,403,048 990,526 1,362,370 5,154,081 571,893
NET ASSETS $636,416,482 $235,343,705 $310,973,201 $716,256,430 $141,064,382
COMPOSITION OF NET ASSETS
Capital stock, at par $60,533 $22,886 $32,189 $67,632 $10,532
Additional paid-in capital 637,865,112 224,161,094 306,928,900 700,624,260 138,328,427
Undistributed (Overdistributed) net
investment income (148,284) (222,691) (74,276) 47 154,220
Accumulated net realized gain (loss)
on investments (18,562,429) 3,037,116 (7,746,907) (17,598,360) (2,074,033)
Net unrealized appreciation of investments 17,201,550 8,345,300 11,833,295 33,162,851 4,645,236
------------- ------------- ------------- ------------- -------------
$636,416,482 $235,343,705 $310,973,201 $716,256,430 $141,064,382
CLASS A SHARES
Net assets $325,288,446 $160,425,266 $179,451,877 $460,443,830 $101,542,634
Shares of capital stock outstanding 30,939,835 15,599,865 18,575,479 43,477,011 7,581,558
CLASS B SHARES
Net assets $214,993,974 $52,155,579 $96,959,087 $164,895,496 $26,695,899
Shares of capital stock outstanding 20,449,430 5,072,521 10,036,392 15,570,045 1,993,196
CLASS C SHARES
Net assets $96,134,062 $22,762,860 $34,562,237 $90,917,104 $12,825,849
Shares of capital stock outstanding 9,143,965 2,213,957 3,577,585 8,584,700 957,603
CALCULATION OF MAXIMUM OFFERING PRICE
CLASS A SHARES
Net asset value and redemption price per share $10.51 $10.28 $ 9.66 $10.59 $13.39
Sales charge--4.25% of public offering price .47 .46 .43 .47 .59
Maximum offering price $10.98 $10.74 $10.09 $11.06 $13.98
CLASS B SHARES
Net asset value and offering price per share $10.51 $10.28 $ 9.66 $10.59 $13.39
CLASS C SHARES
Net asset value and offering price per share $10.51 $10.28 $ 9.66 $10.59 $13.39
</TABLE>
See notes to financial statements.
23
STATEMENTS OF OPERATIONS
YEAR ENDED OCTOBER 31, 1996 ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
<TABLE>
<CAPTION>
INSURED INSURED
NATIONAL NATIONAL NEW YORK CALIFORNIA CALIFORNIA
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Interest $41,749,682 $14,499,511 $19,614,502 $45,931,046 $ 9,132,446
EXPENSES
Advisory Fee 4,179,489 1,447,924 1,946,292 4,527,101 800,847
Distribution fee-Class A 991,717 484,186 539,859 1,406,123 307,307
Distribution fee-Class B 2,352,948 558,288 967,401 1,657,856 292,282
Distribution fee-Class C 1,028,510 223,607 347,137 898,428 139,446
Transfer agency 620,912 167,697 272,626 472,263 76,465
Custodian 169,895 100,701 103,004 151,928 93,305
Administrative 99,000 99,000 99,000 99,000 99,000
Printing 89,624 18,559 23,082 58,040 6,214
Audit and legal 81,076 55,929 52,352 70,841 43,528
Registration 58,409 53,103 8,174 5,643 2,958
Taxes 46,397 17,117 21,285 48,135 10,226
Directors' fees 4,370 4,370 4,370 4,370 4,370
Miscellaneous 36,615 5,719 9,360 7,445 5,369
Total expenses 9,758,962 3,236,200 4,393,942 9,407,173 1,881,317
Less advisory fee waived (see note B) (2,760,334) (250,000) (1,468,820) (2,025,214) -0-
Net expenses 6,998,628 2,986,200 2,925,122 7,381,959 1,881,317
Net investment income 34,751,054 11,513,311 16,689,380 38,549,087 7,251,129
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Net realized gain (loss) on investments 16,964,535 8,542,348 4,364,814 (2,028,050) 1,834,892
Net change in unrealized appreciation
of investments (13,559,055) (3,328,071) (3,048,492) 11,344,019 (1,363,432)
Net gain on investments 3,405,480 5,214,277 1,316,322 9,315,969 471,460
NET INCREASE IN NET ASSETS FROM
OPERATIONS $38,156,534 $16,727,588 $18,005,702 $47,865,056 $ 7,722,589
</TABLE>
See notes to financial statements.
24
STATEMENTS OF CHANGES IN NET ASSETS ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
<TABLE>
<CAPTION>
NATIONALINSURED NATIONAL
----------------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
OCT. 31,1996 OCT. 31,1995 OCT. 31,1996 OCT. 31,1995
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS
Net investment income $ 34,751,054 $ 38,182,112 $ 11,513,311 $ 12,312,442
Net realized gain (loss) on
investments 16,964,535 (16,742,673) 8,542,348 (1,551,031)
Net change in unrealized
appreciation of investments (13,559,055) 88,985,630 (3,328,071) 29,609,236
Net increase in net assets
from operations 38,156,534 110,425,069 16,727,588 40,370,647
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income
Class A (18,357,293) (19,579,195) (8,246,992) (8,620,766)
Class B (11,489,379) (12,886,174) (2,490,145) (2,612,853)
Class C (5,041,417) (5,920,496) (998,865) (1,078,823)
Distributions in excess of
net investment income
Class A -0- -0- -0- (239,073)
Class B -0- -0- -0- (72,460)
Class C -0- -0- -0- (29,919)
CAPITAL STOCK TRANSACTIONS
Net decrease (65,588,040) (95,757,376) (16,451,516) (10,119,842)
Total increase (decrease) (62,319,595) (23,718,172) (11,459,930) 17,596,911
NET ASSETS
Beginning of year 698,736,077 722,454,249 246,803,635 229,206,724
End of year $636,416,482 $698,736,077 $235,343,705 $246,803,635
</TABLE>
See notes to financial statements.
25
STATEMENTS OF CHANGES IN NET ASSETS (CONT.) ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
NEW YORK
----------------------------
YEAR ENDED YEAR ENDED
OCT. 31, 1996 OCT. 31, 1995
------------- -------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment income $ 16,689,380 $ 16,972,904
Net realized gain (loss) on investments 4,364,814 (8,599,808)
Net change in unrealized appreciation
of investments (3,048,492) 37,571,643
Net increase in net assets from operations 18,005,702 45,944,739
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income
Class A (10,253,521) (10,790,213)
Class B (4,792,337) (4,577,754)
Class C (1,717,798) (1,680,454)
CAPITAL STOCK TRANSACTIONS
Net decrease (914,884) (17,006,966)
Total increase 327,162 11,889,352
NET ASSETS
Beginning of year 310,646,039 298,756,687
End of year $310,973,201 $310,646,039
See notes to financial statements.
26
ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
<TABLE>
<CAPTION>
CALIFORNIA INSURED CALIFORNIA
---------------------------- ----------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
OCT. 31,1996 OCT. 31,1995 OCT. 31,1996 OCT. 31,1995
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS
Net investment income $ 38,549,087 $ 40,567,570 $ 7,251,129 $ 7,096,605
Net realized gain (loss) on
investments (2,028,050) (10,675,369) 1,834,892 47,999
Net change in unrealized
appreciation of investments 11,344,019 83,053,467 (1,363,432) 16,442,245
Net increase in net assets
from operations 47,865,056 112,945,668 7,722,589 23,586,849
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income
Class A (26,160,727) (27,565,247) (5,222,731) (5,371,233)
Class B (8,034,602) (8,365,628) (1,268,940) (1,159,355)
Class C (4,353,711) (4,642,175) (605,238) (566,017)
Distributions in excess of
net investment income
Class A -0- -0- -0- (102,666)
Class B -0- -0- -0- (22,160)
Class C -0- -0- -0- (10,819)
CAPITAL STOCK TRANSACTIONS
Net decrease (26,146,521) (74,094,906) (5,640,530) (2,195,497)
Total increase (decrease) (16,830,505) (1,722,288) (5,014,850) 14,159,102
NET ASSETS
Beginning of year 733,086,935 734,809,223 146,079,232 131,920,130
End of year $716,256,430 $733,086,935 $141,064,382 $146,079,232
</TABLE>
See notes to financial statements.
27
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1996 ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
NOTE A: SIGNIFICANT ACCOUNTING POLICIES
Alliance Municipal Income Fund, Inc. (the "Fund") is registered under the
Investment Company Act of 1940 as a diversified open-end management investment
company. The Fund, which is a Maryland corporation, operates as a series
company currently comprised of five portfolios: National Portfolio, Insured
National Portfolio, New York Portfolio, California Portfolio and Insured
California Portfolio (the "Portfolios"). Each series is considered to be a
separate entity for financial reporting and tax purposes. Each portfolio offers
three classes of shares: Class A, Class B and Class C Shares. Class A shares
are sold with a front-end sales charge of up to 4.25%. Class B shares are sold
with a contingent deferred sales charge which declines from 3% to zero
depending on the period of time the shares are held. Class B shares will
automatically convert to Class A shares six years after the end of the calendar
month of purchase. Class C shares 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 intention of each Portfolio to meet the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute all
of its investment company taxable income and net realized gains, if applicable,
to its shareholders. Therefore, no provisions for federal income or excise
taxes are required.
3. INVESTMENT INCOME AND SECURITY TRANSACTIONS
Interest income is accrued daily. Security transactions are accounted for on
the date the securities are purchased or sold. Security gains and losses are
determined on the identified cost basis. The Fund amortizes premiums and
accrues original issue discounts and market discounts as adjustments to
interest income.
The New York, Insured California and California Portfolios follow an investment
policy of investing primarily in municipal obligations of one state. Economic
changes affecting the state and certain of its public bodies and municipalities
may affect the ability of issuers within the state to pay interest on, or repay
principal of, municipal obligations held by the Portfolios.
4. DIVIDENDS AND DISTRIBUTIONS
Dividends and distributions to shareholders are recorded on the ex-dividend
date and are determined in accordance with income tax regulations.
NOTE B: ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Under the terms of an investment advisory agreement, the National, New York and
California Portfolios pay Alliance Capital Management L.P., (the "Adviser") an
advisory fee at an annual rate of up to .625 of 1% of each Portfolio's average
daily net assets. For the Insured National Portfolio, the Agreement provides
for a fee at an annual rate of up to .625 of 1% of the first $200 million, .50
of 1% of the next $200 million and .45 of 1% in excess of $400 million of the
Portfolio's average daily net assets. For the Insured California Portfolio, the
Agreement provides for a fee at an annual rate of up to .55 of 1% of the first
$200 million, .50 of 1% of the next $200 million and .45 of 1% in excess of
$400 million of the Portfolio's average daily net assets. Such fees are accrued
daily and paid monthly.
28
ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
The Adviser has agreed, under the terms of the investment advisory agreement,
to reimburse the Fund to the extent that the expenses of each of its Portfolios
(exclusive of interest, taxes, brokerage, distribution fees, and extraordinary
expenses) exceed the limits prescribed by any state in which that Portfolio's
shares are qualified for sale. The most restrictive expense limitation is
believed to be 2.5% of the first $30 million, 2% of the next $70 million, and
1.5% of the excess over $100 million of each Portfolio's average daily net
assets. No such reimbursement was required for the year ended October 31, 1996.
For the year ended October 31, 1996 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, $2,760,334; Insured National Portfolio, $250,000; New York
Portfolio, $1,468,820 and California Portfolio, $2,025,214. Pursuant to the
Advisory Agreement, the Fund paid $495,000 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 $407,609 for the National Portfolio, $107,638 for the
Insured National Portfolio, $185,283 for the New York Portfolio, $296,481 for
the California Portfolio and $48,770 for the Insured California Portfolio.
Alliance Fund Distributors, Inc. (a wholly-owned subsidiary of the Adviser)
serves as the Distributor of the Fund's capital stock. The amount of front-end
sales charges received by the Distributor from sales of the respective
Portfolio's Class A shares for the year ended October 31, 1996 were: National
Portfolio, $50,984; Insured National Portfolio, $9,936; New York Portfolio,
$29,267; California Portfolio, $78,399; and Insured California Portfolio,
$14,356. The amount of contingent deferred sales charge imposed upon
redemptions by shareholders of Class B shares were: National Portfolio,
$264,900; Insured National Portfolio, $99,819; New York Portfolio, $115,061;
California Portfolio, $224,923; and Insured California Portfolio, $39,020. The
amount of contingent deferred sales charges imposed upon redemptions by
shareholders of Class C shares for the period from July 1, 1996 to October 31,
1996 were:National Portfolio, $1,118; Insured National Portfolio, $194; New
York Portfolio, $1,122; California Portfolio, $958; and Insured California had
no contingent deferred sales charge.
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 $3,752,255 $2,193,843
Insured National 1,813,206 789,090
New York 2,914,342 880,036
California 4,465,745 1,852,542
Insured California 1,344,057 479,829
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.
29
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 year ended October 31, 1996 were:
PORTFOLIO PURCHASES SALES
- ------------------ ------------ ------------
National $910,892,716 $985,367,960
Insured National 366,442,366 392,883,795
New York 197,981,284 200,413,580
California 354,330,716 383,892,499
Insured California 169,384,418 182,131,351
At October 31, 1996, 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 $608,449,095 $18,985,073 $(1,878,788) $17,106,285
Insured National 219,386,655 8,397,531 (57,908) 8,339,623
New York 295,121,818 11,875,445 (83,067) 11,792,378
California 673,382,635 34,251,197 (1,088,346) 33,162,851
Insured California 134,744,442 4,892,341 (247,105) 4,645,236
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.
30
ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
NOTE F: CAPITAL STOCK
There are 3,000,000,000 shares of $.001 par value capital stock authorized,
designated Class A, Class B and Class C shares. There are 200,000,000
authorized shares for each Class.
NATIONAL PORTFOLIO
-----------------------------------------------------------
SHARES AMOUNT
--------------------------- ------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
1996 1995 1996 1995
------------ ------------ -------------- --------------
Shares sold 5,575,925 4,787,898 $ 58,487,725 $ 47,317,764
Shares issued in
reinvestment of
dividends 1,019,710 1,139,057 10,606,458 11,273,668
Shares converted
from Class B 1,147,625 -0- 11,942,215 -0-
Shares redeemed (9,175,311) (9,571,534) (95,864,424) (93,714,112)
Net decrease (1,432,051) (3,644,579) $(14,828,026) $(35,122,680)
CLASS B
Shares sold 2,083,622 3,237,841 $ 21,678,779 $ 31,671,965
Shares issued in
reinvestment of
dividends 691,706 840,798 7,193,169 8,326,644
Shares converted
to Class A (1,147,625) -0- (11,942,215) -0-
Shares redeemed (5,326,953) (6,546,335) (55,286,254) (63,976,163)
Net decrease (3,699,250) (2,467,696) $(38,356,521) $(23,977,554)
CLASS C
Shares sold 2,326,094 2,513,404 $ 24,279,598 $ 24,850,658
Shares issued in
reinvestment of
dividends 335,126 506,602 3,484,071 5,001,846
Shares redeemed (3,859,000) (6,842,684) (40,167,162) (66,509,646)
Net decrease (1,197,780) (3,822,678) $(12,403,493) $(36,657,142)
INSURED NATIONAL PORTFOLIO
-----------------------------------------------------------
SHARES AMOUNT
--------------------------- ------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
1996 1995 1996 1995
------------ ------------ -------------- --------------
Shares sold 1,382,575 2,109,319 $ 13,902,664 $ 19,729,676
Shares issued in
reinvestment of
dividends and
distributions 414,861 463,475 4,198,610 4,426,013
Shares converted
from Class B 24,166 -0- 243,256 -0-
Shares redeemed (2,661,772) (3,272,946) (26,886,521) (30,921,711)
Net decrease (840,170) (700,152) $ (8,541,991) $ (6,766,022)
31
NOTES TO FINANCIAL STATEMENTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
NATIONAL PORTFOLIO
-----------------------------------------------------------
SHARES AMOUNT
--------------------------- ------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
1996 1995 1996 1995
------------ ------------ -------------- --------------
CLASS B
Shares sold 725,416 1,180,257 $ 7,364,166 $ 11,132,100
Shares issued in
reinvestment of
dividends and
distributions 149,506 173,416 1,512,818 1,661,573
Shares converted
to Class A (24,166) -0- (243,256) -0-
Shares redeemed (1,637,886) (1,232,039) (16,598,949) (11,659,140)
Net increase(decrease) (787,130) 121,634 $ (7,965,221) $ 1,134,533
CLASS C
Shares sold 713,617 488,859 $ 7,183,108 $ 4,578,511
Shares issued in
reinvestment of
dividends and
distributions 66,139 107,163 669,187 1,023,246
Shares redeemed (777,517) (1,074,063) (7,796,599) (10,090,110)
Net increase(decrease) 2,239 (478,041) $ 55,696 $ (4,488,353)
NEW YORK PORTFOLIO
-----------------------------------------------------------
SHARES AMOUNT
--------------------------- ------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
1996 1995 1996 1995
------------ ------------ -------------- --------------
Shares sold 1,703,514 1,541,732 $ 16,329,024 $ 14,097,320
Shares issued in
reinvestment of
dividends 661,612 730,643 6,340,256 6,699,094
Shares converted
from Class B 25,442 -0- 280,942 -0-
Shares redeemed (2,945,222) (4,026,816) (28,238,945) (36,382,127)
Net decrease (554,654) (1,754,441) $ (5,288,723) $(15,585,713)
CLASS B
Shares sold 1,812,208 1,765,580 $ 17,384,846 $ 16,166,559
Shares issued in
reinvestment of
dividends 323,928 330,093 3,102,964 3,029,271
Shares converted
to Class A (25,442) -0- (280,942) -0-
Shares redeemed (1,885,403) (1,678,380) (18,010,268) (15,223,910)
Net increase 225,291 417,293 $ 2,196,600 $ 3,971,920
32
ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
NEW YORK PORTFOLIO
-----------------------------------------------------------
SHARES AMOUNT
--------------------------- ------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
1996 1995 1996 1995
------------ ------------ -------------- --------------
CLASS C
Shares sold 1,388,105 774,912 $ 13,398,638 $ 7,137,932
Shares issued in
reinvestment of
dividends 132,115 145,723 1,265,387 1,332,925
Shares redeemed (1,295,305) (1,539,788) (12,486,786) (13,864,030)
Net increase(decrease) 224,915 (619,153) $ 2,177,239 $ (5,393,173)
CALIFORNIA PORTFOLIO
-----------------------------------------------------------
SHARES AMOUNT
--------------------------- ------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
1996 1995 1996 1995
------------ ------------ -------------- --------------
Shares sold 4,406,385 4,608,607 $ 46,067,687 $ 45,697,476
Shares issued in
reinvestment of
dividends 1,158,430 1,354,247 12,118,531 12,936,654
Shares converted
from Class B 108,411 -0- 1,125,538 -0-
Shares redeemed (8,003,914) (10,053,974) (83,570,318) (97,704,751)
Net decrease (2,330,688) (4,091,120) $(24,258,562) $(39,070,621)
CLASS B
Shares sold 2,529,481 2,379,727 $ 26,499,615 $ 23,517,537
Shares issued in
reinvestment of
dividends 404,752 477,127 4,234,295 4,724,963
Shares converted
to Class A (108,411) -0- (1,125,538) -0-
Shares redeemed (3,207,605) (3,973,996) (33,548,529) (38,724,734)
Net decrease (381,783) (1,117,142) $ (3,940,157) $(10,482,234)
CLASS C
Shares sold 2,465,162 1,828,084 $ 25,830,785 $ 18,294,426
Shares issued in
reinvestment of
dividends 250,607 335,322 2,619,923 3,304,549
Shares redeemed (2,530,143) (4,758,478) (26,398,510) (46,141,026)
Net increase(decrease) 185,626 (2,595,072) $ 2,052,198 $(24,542,051)
33
NOTES TO FINANCIAL STATEMENTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
INSURED CALIFORNIA PORTFOLIO
-----------------------------------------------------------
SHARES AMOUNT
--------------------------- ------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
1996 1995 1996 1995
------------ ------------ -------------- --------------
Shares sold 827,900 1,612,641 $ 10,898,263 $ 19,702,408
Shares issued in
reinvestment of
dividends and
distributions 189,983 201,630 2,517,761 2,542,607
Shares converted
from Class B 1,804 -0- 23,470 -0-
Shares redeemed (1,244,117) (2,051,864) (16,388,925) (25,275,836)
Net decrease (224,430) (237,593) $ (2,949,431) $ (3,030,821)
CLASS B
Shares sold 558,000 812,573 $ 7,459,223 $ 10,053,570
Shares issued in
reinvestment of
dividends and
distributions 51,658 50,558 684,457 638,689
Shares converted
to Class A (1,804) -0- (23,470) -0-
Shares redeemed (703,582) (859,461) (9,300,020) (10,363,603)
Net increase(decrease) (95,728) 3,670 $ (1,179,810) $ 328,656
CLASS C
Shares sold 198,597 474,208 $ 2,664,787 $ 5,898,558
Shares issued in
reinvestment of
dividends and
distributions 32,458 29,986 429,912 379,781
Shares redeemed (349,078) (486,148) (4,605,988) (5,771,671)
Net increase(decrease) (118,023) 18,046 $ (1,511,289) $ 506,668
34
FINANCIAL HIGHLIGHTS ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH YEAR
<TABLE>
<CAPTION>
NATIONAL PORTFOLIO
---------------------------------------------------------------
CLASS A
---------------------------------------------------------------
YEAR ENDED OCTOBER 31,
---------------------------------------------------------------
1996 1995 1994 1993 1992
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $10.45 $ 9.41 $11.05 $10.19 $ 9.96
INCOME FROM INVESTMENT OPERATIONS
Net investment income(a) .58 .58 .57 .61 .65
Net realized and unrealized gain (loss)
on investments .06 1.04 (1.37) .88 .28
Net increase (decrease) in net asset
value from operations .64 1.62 (.80) 1.49 .93
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.58) (.58) (.57) (.62) (.65)
Distributions in excess of net
investment income -0- -0- (.03) -0- -0-
Distributions from net realized gains -0- -0- (.24) (.01) (.05)
Total dividends and distributions (.58) (.58) (.84) (.63) (.70)
Net asset value, end of year $10.51 $10.45 $ 9.41 $11.05 $10.19
TOTAL RETURN
Total investment return based on net
asset value(b) 6.32% 17.73% (7.65)% 14.94% 9.60%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's omitted) $325,288 $338,311 $338,814 $386,484 $261,895
Ratio to average net assets of:
Expenses, net of waivers/reimbursements .69% .71% .62% .65% .83%
Expenses, before waivers/reimbursements 1.10% 1.09% 1.09% 1.08% 1.11%
Net investment income, net of waivers/
reimbursements 5.55% 5.84% 5.61% 5.69% 6.35%
Portfolio turnover rate 137% 118% 110% 233% 86%
</TABLE>
See footnote summary on page 49.
35
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,
1993(C)
YEAR ENDED OCTOBER 31, TO
------------------------------------- OCTOBER 31,
1996 1995 1994 1993
----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $10.45 $9.41 $11.05 $10.43
INCOME FROM INVESTMENT OPERATIONS
Net investment income(a) .51 .51 .50 .44
Net realized and unrealized gain (loss)
on investments .06 1.04 (1.38) .63
Net increase (decrease) in net asset
value from operations .57 1.55 (.88) 1.07
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.51) (.51) (.50) (.45)
Distributions in excess of net
investment income -0- -0- (.02) -0-
Distributions from net realized gains -0- -0- (.24) -0-
Total dividends and distributions (.51) (.51) (.76) (.45)
Net asset value, end of period $10.51 $10.45 $9.41 $11.05
TOTAL RETURN
Total investment return based on net
asset value(b) 5.61% 16.91% (8.34)% 10.43%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $214,994 $252,357 $250,391 $216,489
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 1.40% 1.42% 1.32% 1.36%(d)
Expenses, before waivers/reimbursements 1.81% 1.80% 1.80% 1.78%(d)
Net investment income, net of waivers/
reimbursements 4.85% 5.13% 4.91% 4.59%(d)
Portfolio turnover rate 137% 118% 110% 233%
</TABLE>
See footnote summary on page 49.
36
ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
NATIONAL PORTFOLIO
---------------------------------------------------
CLASS C
---------------------------------------------------
MAY 3,1993(C)
YEAR ENDED OCTOBER 31, TO
------------------------------------- OCTOBER 31,
1996 1995 1994 1993
----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $10.45 $ 9.41 $11.05 $10.70
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a) .51 .51 .50 .26
Net realized and unrealized gain (loss)
on investments .06 1.04 (1.38) .36
Net increase (decrease) in net asset
value from operations .57 1.55 (.88) .62
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.51) (.51) (.50) (.27)
Distributions in excess of net
investment income -0- -0- (.02) -0-
Distributions from net realized gains -0- -0- (.24) -0-
Total dividends and distributions (.51) (.51) (.76) (.27)
Net asset value, end of period $10.51 $10.45 $ 9.41 $11.05
TOTAL RETURN
Total investment return based on net
asset value(b) 5.62% 16.93% (8.33)% 5.84%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $96,134 $108,068 $133,249 $150,953
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 1.39% 1.41% 1.31% 1.36%(d)
Expenses, before waivers/reimbursements 1.80% 1.78% 1.79% 1.78%(d)
Net investment income, net of waivers/
reimbursements 4.85% 5.16% 4.89% 4.17%(d)
Portfolio turnover rate 137% 118% 110% 233%
</TABLE>
See footnote summary on page 49.
37
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH YEAR
<TABLE>
<CAPTION>
INSURED NATIONAL PORTFOLIO
--------------------------------------------------------------
CLASS A
--------------------------------------------------------------
YEAR ENDED OCTOBER 31,
--------------------------------------------------------------
1996 1995 1994 1993 1992
----------- ----------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $10.07 $ 8.96 $10.76 $ 9.87 $ 9.88
INCOME FROM INVESTMENT OPERATIONS
Net investment income(a) .51 .51 .53 .56 .60
Net realized and unrealized gain (loss)
on investments .22 1.13 (1.40) .96 .15
Net increase (decrease) in net asset
value from operations .73 1.64 (.87) 1.52 .75
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.52) (.51) (.53) (.57) (.60)
Distributions in excess of net
investment income -0- (.02) (.01) -0- -0-
Distributions from net realized gains -0- -0- (.39) (.06) (.16)
Total dividends and distributions (.52) (.53) (.93) (.63) (.76)
Net asset value, end of year $10.28 $10.07 $ 8.96 $10.76 $ 9.87
TOTAL RETURN
Total investment return based on net
asset value(b) 7.43% 18.72% (8.69)% 15.82% 7.88%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's omitted) $160,425 $165,548 $153,656 $185,876 $149,632
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 1.02% 1.01% .66% .73% .81%
Expenses, before waivers/reimbursements 1.12% 1.12% 1.11% 1.11% 1.12%
Net investment income, net of waivers/
reimbursements 5.04% 5.37% 5.40% 5.40% 6.04%
Portfolio turnover rate 157% 171% 149% 165% 105%
</TABLE>
See footnote summary on page 49.
38
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,
1993(C)
YEAR ENDED OCTOBER 31, TO
------------------------------------- OCTOBER 31,
1996 1995 1994 1993
----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $10.07 $ 8.96 $10.76 $10.10
INCOME FROM INVESTMENT OPERATIONS
Net investment income(a) .44 .45 .46 .40
Net realized and unrealized gain (loss)
on investments .22 1.12 (1.40) .66
Net increase (decrease) in net asset
value from operations .66 1.57 (.94) 1.06
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.45) (.45) (.46) (.40)
Distributions in excess of net
investment income -0- (.01) (.01) -0-
Distributions from net realized gains -0- -0- (.39) -0-
Total dividends and distributions (.45) (.46) (.86) (.40)
Net asset value, end of period $10.28 $10.07 $ 8.96 $10.76
TOTAL RETURN
Total invesment return based on net
asset value(b) 6.74% 17.91% (9.38)% 10.68%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $52,156 $58,990 $51,439 $42,954
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 1.73% 1.72% 1.37% 1.45%(d)
Expenses, before waivers/reimbursements 1.83% 1.83% 1.82% 1.83%(d)
Net investment income, net of waivers/
reimbursements 4.32% 4.65% 4.71% 4.31%(d)
Portfolio turnover rate 157% 171% 149% 165%
</TABLE>
See footnote summary on page 49.
39
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 3,1993(C)
YEAR ENDED OCTOBER 31, TO
------------------------------------- OCTOBER 31,
1996 1995 1994 1993
----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $10.07 $ 8.96 $10.76 $10.41
INCOME FROM INVESTMENT OPERATIONS
Net investment income(a) .44 .45 .46 .24
Net realized and unrealized gain (loss)
on investments .22 1.12 (1.40) .35
Net increase (decrease) in net asset
value from operations .66 1.57 (.94) .59
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.45) (.45) (.46) (.24)
Distributions in excess of net
investment income -0- (.01) (.01) -0-
Distributions from net realized gains -0- -0- (.39) -0-
Total dividends and distributions (.45) (.46) (.86) (.24)
Net asset value, end of period $10.28 $10.07 $ 8.96 $10.76
TOTAL RETURN
Total invesment return based on net
asset value(b) 6.74% 17.91% (9.38)% 5.75%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $22,763 $22,265 $24,112 $28,862
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 1.72% 1.71% 1.36% 1.45%(d)
Expenses, before waivers/reimbursements 1.82% 1.82% 1.81% 1.83%(d)
Net investment income, net of waivers/
reimbursements 4.34% 4.69% 4.68% 3.98%(d)
Portfolio turnover rate 157% 171% 149% 165%
</TABLE>
See footnote summary on page 49.
40
ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH YEAR
<TABLE>
<CAPTION>
NEW YORK PORTFOLIO
---------------------------------------------------------------
CLASS A
---------------------------------------------------------------
YEAR ENDED OCTOBER 31,
---------------------------------------------------------------
1996 1995 1994 1993 1992
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $ 9.62 $ 8.72 $10.17 $ 9.53 $ 9.30
INCOME FROM INVESTMENT OPERATIONS
Net investment income(a) .55 .55 .55 .57 .60
Net realized and unrealized gain (loss)
on investments .04 .90 (1.40) .79 .24
Net increase (decrease) in net asset
value from operations .59 1.45 (.85) 1.36 .84
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.55) (.55) (.55) (.58) (.60)
Distributions in excess of net
investment income -0- -0- (.01) -0- -0-
Distributions from net realized gains -0- -0- (.04) (.14) (.01)
Total dividends and distributions (.55) (.55) (.60) (.72) (.61)
Net asset value, end of year $ 9.66 $ 9.62 $ 8.72 $ 10.17 $ 9.53
TOTAL RETURN
Total investment return based on net
asset value(b) 6.30% 17.10% (8.76)% 14.71% 9.39%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's omitted) $179,452 $183,987 $182,170 $214,259 $162,549
Ratio to average net assets of:
Expenses, net of waivers/reimbursements .64% .75% .66% .68% .70%
Expenses, before waivers/reimbursements 1.11% 1.12% 1.11% 1.13% 1.13%
Net investment income, net of waivers/
reimbursements 5.66% 5.93% 5.75% 5.76% 6.37%
Portfolio turnover rate 64% 69% 69% 63% 69%
</TABLE>
See footnote summary on page 49.
41
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,
1993(C)
YEAR ENDED OCTOBER 31, TO
------------------------------------- OCTOBER 31,
1996 1995 1994 1993
----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 9.62 $ 8.72 $10.17 $ 9.61
INCOME FROM INVESTMENT OPERATIONS
Net investment income(a) .48 .48 .48 .41
Net realized and unrealized gain (loss)
on investments .04 .90 (1.41) .56
Net increase (decrease) in net asset
value from operations .52 1.38 (.93) .97
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.48) (.48) (.47) (.41)
Distributions in excess of net
investment income -0- -0- (.01) -0-
Distributions from net realized gains -0- -0- (.04) -0-
Total dividends and distributions (.48) (.48) (.52) (.41)
Net asset value, end of period $ 9.66 $ 9.62 $ 8.72 $10.17
TOTAL RETURN
Total investment return based on net
asset value(b) 5.52% 16.19% (9.44)% 10.29%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $96,959 $94,400 $81,941 $58,504
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 1.35% 1.45% 1.36% 1.39%(d)
Expenses, before waivers/reimbursements 1.82% 1.83% 1.82% 1.84%(d)
Net investment income, net of waivers/
reimbursements 4.95% 5.21% 5.05% 4.70%(d)
Portfolio turnover rate 64% 69% 69% 63%
</TABLE>
See footnote summary on page 49.
42
ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
NEW YORK PORTFOLIO
----------------------------------------------------
CLASS C
----------------------------------------------------
MAY 3,1993(C)
YEAR ENDED OCTOBER 31, TO
------------------------------------- OCTOBER 31,
1996 1995 1994 1993
----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 9.62 $ 8.72 $10.17 $ 9.89
INCOME FROM INVESTMENT OPERATIONS
Net investment income(a) .48 .48 .48 .24
Net realized and unrealized gain (loss)
on investments .04 .90 (1.41) .29
Net increase (decrease) in net asset
value from operations .52 1.38 (.93) .53
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.48) (.48) (.47) (.25)
Distributions in excess of net
investment income -0- -0- (.01) -0-
Distributions from net realized gains -0- -0- (.04) -0-
Total dividends and distributions (.48) (.48) (.52) (.25)
Net asset value, end of period $ 9.66 $ 9.62 $ 8.72 $10.17
TOTAL RETURN
Total investment return based on net
asset value(b) 5.52% 16.19% (9.44)% 5.37%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $34,562 $32,259 $34,646 $38,245
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 1.34% 1.44% 1.36% 1.38%(d)
Expenses, before waivers/reimbursements 1.81% 1.82% 1.81% 1.84%(d)
Net investment income, net of waivers/
reimbursements 4.95% 5.24% 5.03% 4.42%(d)
Portfolio turnover rate 64% 69% 69% 63%
</TABLE>
See footnote summary on page 49.
43
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH YEAR
<TABLE>
<CAPTION>
CALIFORNIA PORTFOLIO
---------------------------------------------------------------
CLASS A
---------------------------------------------------------------
YEAR ENDED OCTOBER 31,
---------------------------------------------------------------
1996 1995 1994 1993 1992
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $10.45 $ 9.43 $10.90 $10.06 $ 9.97
INCOME FROM INVESTMENT OPERATIONS
Net investment income(a) .58 .59 .59 .61 .65
Net realized and unrealized gain (loss)
on investments .14 1.02 (1.41) .85 .13
Net increase (decrease) in net asset
value from operations .72 1.61 (.82) 1.46 .78
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.58) (.59) (.59) (.61) (.65)
Distributions from net realized gains -0- -0- (.06) (.01) (.04)
Total dividends and distributions (.58) (.59) (.65) (.62) (.69)
Net asset value, end of year $10.59 $10.45 $ 9.43 $10.90 $10.06
TOTAL RETURN
Total investment return based on net
asset value(b) 7.15% 17.55% (7.73)% 14.90% 8.05%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's omitted) $460,444 $478,535 $470,308 $531,293 $361,661
Ratio to average net assets of:
Expenses, net of waivers/reimbursements .77% .74% .64% .74% .59%
Expenses, before waivers/reimbursements 1.05% 1.04% 1.05% 1.06% 1.07%
Net investment income, net of waivers/
reimbursements 5.57% 5.90% 5.78% 5.74% 6.38%
Portfolio turnover rate 49% 39% 45% 83% 77%
</TABLE>
See footnote summary on page 49.
44
ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
CALIFORNIA PORTFOLIO
---------------------------------------------------
CLASS B
---------------------------------------------------
JANUARY 4,
1993(C)
YEAR ENDED OCTOBER 31, TO
------------------------------------- OCTOBER 31,
1996 1995 1994 1993
----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $10.45 $9.43 $10.90 $10.27
INCOME FROM INVESTMENT OPERATIONS
Net investment income(a) .51 .51 .52 .44
Net realized and unrealized gain (loss)
on investments .14 1.02 (1.41) .63
Net increase (decrease) in net asset
value from operations .65 1.53 (.89) 1.07
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.51) (.51) (.52) (.44)
Distributions from net realized gains -0- -0- (.06) -0-
Total dividends and distributions (.51) (.51) (.58) (.44)
Net asset value, end of period $10.59 $10.45 $9.43 $10.90
TOTAL RETURN
Total investment return based on net
asset value(b) 6.37% 16.64% (8.43)% 10.60%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $164,895 $166,759 $160,879 $126,688
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 1.47% 1.45% 1.35% 1.44%(d)
Expenses, before waivers/reimbursements 1.75% 1.75% 1.75% 1.78%(d)
Net investment income, net of waivers/
reimbursements 4.87% 5.19% 5.07% 4.66%(d)
Portfolio turnover rate 49% 39% 45% 83%
</TABLE>
See footnote summary on page 49.
45
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 3,1993(C)
YEAR ENDED OCTOBER 31, TO
------------------------------------- OCTOBER 31,
1996 1995 1994 1993
----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $10.45 $ 9.43 $10.90 $10.54
INCOME FROM INVESTMENT OPERATIONS
Net investment income(a) .51 .51 .52 .26
Net realized and unrealized gain (loss)
on investments .14 1.02 (1.41) .36
Net increase (decrease) in net asset
value from operations .65 1.53 (.89) .62
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.51) (.51) (.52) (.26)
Distributions from net realized gains -0- -0- (.06) -0-
Total dividends and distributions (.51) (.51) (.58) (.26)
Net asset value, end of period $10.59 $10.45 $ 9.43 $10.90
TOTAL RETURN
Total investment return based on net
asset value(b) 6.38% 16.64% (8.43)% 5.98%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $90,917 $87,793 $103,622 $117,379
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 1.47% 1.44% 1.34% 1.44%(d)
Expenses, before waivers/reimbursements 1.75% 1.74% 1.75% 1.78%(d)
Net investment income, net of waivers/
reimbursements 4.87% 5.22% 5.06% 4.42%(d)
Portfolio turnover rate 49% 39% 45% 83%
</TABLE>
See footnote summary on page 49.
46
ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH YEAR
<TABLE>
<CAPTION>
INSURED CALIFORNIA PORTFOLIO
---------------------------------------------------------------
CLASS A
---------------------------------------------------------------
YEAR ENDED OCTOBER 31,
---------------------------------------------------------------
1996 1995 1994 1993 1992
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $13.32 $11.79 $14.25 $12.99 $12.80
INCOME FROM INVESTMENT OPERATIONS
Net investment income(a) .69 .68 .69 .70 .76
Net realized and unrealized gain (loss)
on investments .06 1.54 (1.99) 1.30 .18
Net increase (decrease) in net asset
value from operations .75 2.22 (1.30) 2.00 .94
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.68) (.68) (.69) (.71) (.75)
Dividends in excess of net
investment income -0- (.01) -0- -0- -0-
Distributions from net realized gains -0- -0- (.47) (.03) -0-
Total dividends and distributions (.68) (.69) (1.16) (.74) (.75)
Net asset value, end of year $13.39 $13.32 $11.79 $14.25 $12.99
TOTAL RETURN
Total investment return based on net
asset value(b) 5.79% 19.29% (9.73)% 15.64% 7.52%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's omitted) $101,542 $103,940 $94,857 $120,734 $90,477
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 1.08% 1.04% .82% .94% .78%
Expenses, before waivers/reimbursements 1.08% 1.09% 1.08% 1.08% 1.09%
Net investment income, net of waivers/
reimbursements 5.19% 5.34% 5.29% 5.06% 5.77%
Portfolio turnover rate 118% 103% 100% 186% 60%
</TABLE>
See footnote summary on page 49.
47
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,
1993(C)
YEAR ENDED OCTOBER 31, TO
------------------------------------- OCTOBER 31,
1996 1995 1994 1993
----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $13.32 $11.79 $14.25 $13.37
INCOME FROM INVESTMENT OPERATIONS
Net investment income(a) .60 .58 .60 .49
Net realized and unrealized gain (loss)
on investments .05 1.54 (2.00) .89
Net increase (decrease) in net asset
value from operations .65 2.12 (1.40) 1.38
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.58) (.58) (.59) (.50)
Distributions in excess of net
investment income -0- (.01) -0- -0-
Distributions from net realized gains -0- -0- (.47) -0-
Total dividends and distributions (.58) (.59) (1.06) (.50)
Net asset value, end of period $13.39 $13.32 $11.79 $14.25
TOTAL RETURN
Total investment return based on net
asset value(b) 4.99% 18.35% (10.43)% 10.43%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $26,696 $27,816 $24,591 $21,234
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 1.79% 1.74% 1.53% 1.65%(d)
Expenses, before waivers/reimbursements 1.79% 1.80% 1.78% 1.79%(d)
Net investment income, net of waivers/
reimbursements 4.49% 4.61% 4.60% 3.85%(d)
Portfolio turnover rate 118% 103% 100% 186%
</TABLE>
See footnote summary on page 49.
48
ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
INSURED CALIFORNIA PORTFOLIO
---------------------------------------------------
CLASS C
---------------------------------------------------
MAY 3,1993(C)
YEAR ENDED OCTOBER 31, TO
------------------------------------- OCTOBER 31,
1996 1995 1994 1993
----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $13.32 $11.79 $14.25 $13.78
INCOME FROM INVESTMENT OPERATIONS
Net investment income(a) .60 .58 .60 .29
Net realized and unrealized gain (loss)
on investments .05 1.54 (2.00) .48
Net increase (decrease) in net asset
value from operations .65 2.12 (1.40) .77
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.58) (.58) (.59) (.30)
Distributions in excess of net
investment income -0- (.01) -0- -0-
Distributions from net realized gains -0- -0- (.47) -0-
Total dividends and distributions (.58) (.59) (1.06) (.30)
Net asset value, end of period $13.39 $13.32 $11.79 $14.25
TOTAL RETURN
Total investment return based on net
asset value(b) 4.99% 18.35% (10.43)% 5.63%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $12,826 $14,323 $12,472 $15,971
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 1.78% 1.74% 1.52% 1.65%(d)
Expenses, before waivers/reimbursements 1.78% 1.79% 1.77% 1.79%(d)
Net investment income, net of waivers/
reimbursements 4.49% 4.64% 4.59% 3.74%(d)
Portfolio turnover rate 118% 103% 100% 186%
</TABLE>
(a) Net of fees waived and expenses reimbursed by the Adviser.
(b) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period. 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.
(c) Commencement of distribution.
(d) Annualized
49
REPORT OF ERNST & YOUNG LLP
INDEPENDENT AUDITORS ALLIANCE MUNICIPAL INCOME FUND
_______________________________________________________________________________
TO THE SHAREHOLDERS AND BOARD OF DIRECTORS ALLIANCE MUNICIPAL INCOME FUND, INC.
We have audited the accompanying statements of assets and liabilities,
including the portfolios of investments, of Alliance Municipal Income Fund,
Inc. (comprising, respectively, the National, Insured National, New York,
California, and Insured California Portfolios) as of October 31, 1996, and the
related statements of operations for the year then ended, the statements of
changes in net assets for each of the two years in the period then ended, and
the financial highlights for each of the periods indicated therein. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
October 31, 1996, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the respective portfolios constituting the Alliance Municipal Income Fund,
Inc. at October 31, 1996, the results of their operations for the year then
ended, the changes in their net assets for each of the two years in the period
then ended, and the financial highlights for each of the indicated periods, in
conformity with generally accepted accounting principles.
New York, New York
December 3, 1996
FEDERAL TAX INFORMATION (UNAUDITED)
_______________________________________________________________________________
In accordance with Federal Requirements, the National, New York and California
Portfolios hereby designate substantially all the dividends paid from
investment income-net during the fiscal year ended October 31, 1996 as
"exempt-interest dividends." The Insured National and Insured California
Portfolios hereby designate, approximately, 93% and 91%, respectively, of the
dividends paid from investment income-net during the fiscal year ended October
31, 1996 as "exempt-interest dividends."
As required by Federal regulations, shareholders will receive notification of
their portion of the Fund's taxable ordinary dividends and capital gains
distributions paid (if any) for the 1996 calendar year early in 1997.
50
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)
ROBERT C. WHITE (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
WILLIAM E. OLIVER, VICE PRESIDENT
TERRANCE HULTS, 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.
51
ALLIANCE MUNICIPAL INCOME FUND
1345 Avenue of the Americas
New York, NY 10105
(800) 221-5672
ALLIANCE CAPITAL
INVESTING WITHOUT THE MYSTERY
THIS REPORT IS INTENDED SOLELY FOR DISTRIBUTION TO CURRENT SHAREHOLDERS
OF THE FUND.
R THESE REGISTERED SERVICE MARKS USED UNDER LICENSE FROM THE OWNER,
ALLIANCE CAPITAL MANAGEMENT L.P.
MUNIAR
