ALLIANCE
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MUNICIPAL
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INCOME
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FUND
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Annual Report
October 31, 1999
AllianceCapital [LOGO](R)
<PAGE>
LETTER TO SHAREHOLDERS Alliance Municipal Income Fund
================================================================================
December 24, 1999
Dear Shareholder:
The following report reviews municipal market activity and investment results
for Alliance Municipal Income Fund's twelve-month fiscal reporting period ending
October 31, 1999.
- --------------------------------------------------------------------------------
ALLIANCE MUNICIPAL INCOME FUND -- CLASS A SHARES
Period Ended October 31, 1999 (unless otherwise noted)
<TABLE>
<CAPTION>
5 Year
Morningstar
Ratings***
1 Year 1 Year 3 Year 5 Year (period ended
Fund Portfolio Lipper Lipper Lipper November 30,
Portfolio Total Returns* Rankings** Rankings** Rankings** 1999)
- ------------- -------------- ------------ ------------ ------------ --------------
<S> <C> <C> <C> <C> <C>
National -3.93% 122/263 47/215 3/163 4
California -1.80% 3/106 1/93 1/75 5
New York -3.27% 11/99 4/88 1/70 5
Insured National -5.28% 37/48 17/45 2/37 3
Insured California -3.74% 7/23 3/22 1/19 3
Number of Funds in Morningstar Municipal Bond Fund Category 1,330
</TABLE>
* The Fund's investment results are based on the net asset value of Class A
shares. All fees and expenses related to the operation of the Fund have
been deducted, but no adjustment has been made for sales charges that may
apply when shares are purchased or redeemed. Past performance is no
guarantee of future results. Additional performance information can be
found on pages 4 - 5.
** Lipper Rankings correspond to the Portfolio's return among the returns of
its peer group of funds, as represented by the respective state specific
Lipper Municipal Debt Funds Average. Funds in the Lipper averages
generally have similar investment objectives to the Fund, although some
may have different investment policies. An investor cannot invest directly
in an average.
*** Morningstar proprietary ratings reflect historical risk-adjusted
performance as of November 30, 1999. Each Portfolio's overall, 3-year and
10-year Morningstar ratings were: National 3 stars, 3 stars and 3 stars;
California 5 stars, 5 stars and 4 stars; New York 4 stars, 4 stars and 3
stars; Insured National 2 stars, 1 stars and 2 stars; and Insured
California 3 stars, 3 stars and 2 stars. The number of funds in the
Morningstar Municipal Bond Fund Category for the overall, 3-year and
10-year periods ended October 31, 1999 were: 1610, 1610, and 383. These
ratings may change monthly and are calculated from each Portfolio's
overall, 3-, 5- and 10-year average annual returns in excess of 90-day
Treasury bill returns with appropriate fee adjustments and a risk factor
that reflects portfolio performance below 90-day Treasury bill returns. If
the portfolio scores in the top 10% of its class, it receives 5 stars; if
it falls in the next 22.5%, it receives 4 stars; a place in the middle 35%
earns it 3 stars; if it falls in the next 22.5%, it receives 2 stars; and
if it scores at the bottom 10%, it gets 1 star. Each Portfolio's SEC
average annual total returns can be found on page 5.
- --------------------------------------------------------------------------------
MARKET OVERVIEW
Over the past year, municipal bonds performed well on a relative basis but saw
prices decline on an absolute basis. This price decline was caused by a rise in
long-term interest rates as a result of tremendous growth in the US economy.
This rise in rates was not unexpected, however, given the cyclical nature of
financial markets. On a relative basis, the municipal bond market performed well
compared to the taxable fixed-income markets. Municipal yields began the year at
parity with comparable Treasury bond yields, which is historically uncommon due
to the tax-advantaged nature of municipal bonds. Over the course of the year,
the yield ratio of municipals to Treasuries declined from parity to
approximately 95% of long-term Treasury bond yields. As a result, the total
return of most municipal indexes was well ahead of other comparable benchmarks
as of October 31, 1999 on an absolute basis as well as a tax-adjusted basis.
1
<PAGE>
Alliance Municipal Income Fund
================================================================================
We attribute the strength in the municipal bond market relative to Treasuries to
two factors. First, new issuance of municipal bonds was down roughly 20% on a
year-over-year basis, primarily due to the rising-rate environment making it
less attractive for issuers to refinance outstanding bonds. Second, demand for
municipals has been very strong, as investors are attracted to the high
taxable-equivalent yields of both bond funds and individual securities. Market
participants attribute this strong demand to the changing savings needs of
maturing baby boomers, and to reinvestment of gains from surging equity markets
into municipal bonds. This strong demand has been somewhat offset by pockets of
selling in the market, particularly from insurance companies raising cash to pay
catastrophe-related claims. Additional selling came from certain institutional
investors who do not benefit from the tax-free benefit of municipal bonds but
had purchased them as a total-return strategy when yield ratios were at parity
with Treasury bonds.
Credit fundamentals within the municipal market continue to be strong with most
investment sectors showing improved credit quality. State and local governments
are in excellent financial condition, in most cases, due to strong local
economies that have generated increased sales tax and personal income tax
collections. The only area of weakness has been in the corporate-backed
tax-exempt sector. This sector has experienced a number of downgrades primarily
due to merger activity. Most of the issues affected have been older bonds with
relatively high coupons and short-dated call features, which minimizes the
negative price impact resulting from ratings downgrades. Merger activity and
credit-quality activity also affected the health care sector, but unlike the
corporate-backed market, these securities received credit upgrades or in some
cases outstanding bonds were called. Bonds receiving upgrades were either
pre-refunded to a specific call date or escrowed to maturity. These upgrades
created positive price appreciation in an otherwise weak market.
INVESTMENT STRATEGY
At Alliance, we are value-oriented municipal bond investors. Because we take a
longer-term view of interest rate and credit cycles, we see the recent rise in
interest rates as an excellent opportunity to reposition our portfolios. Our
repositioning strategy, similar to the repositioning we conducted in 1994 and
1995, has been to sell our older, higher coupon bonds that are subject to calls
within the next five years or less, and to purchase new bonds with attractive
coupons and ten-year call protection. In addition, we are investing cash
positions accumulated over the past year in longer-maturity issues, which we
believe offer good value in the current rate environment. This repositioning
program will help us to maintain the highest possible distribution rates going
forward and, at the same time, minimize long-term reinvestment risk consistent
with the objectives and guidelines of the Fund. We are also continuing to reap
the benefits of the pre-refunding of certain obligations held by the Fund, which
we typically sell when the full benefit of credit-quality improvement can be
realized by selling the securities. This portfolio repositioning, in addition to
helping us maintain the highest possible distribution rates, allows us to
prepare for the next phase of the interest rate cycle.
MARKET OUTLOOK
Through the end of 1999, we expect that the fixed-income market in general and
the municipal bond market in particular will be in a period of uncertainty. In
addition to the usual concerns of changes in credit quality, supply factors, and
the overall direction of long-term interest rates, the unknown impact of Y2K on
financial markets will create an atmosphere of uncertainty and caution for this
calendar year-end. We view this phenomenon as temporary, and we believe that any
resulting market weakness will create an excellent buying opportunity.
2
<PAGE>
Alliance Municipal Income Fund
================================================================================
The Alliance Municipal Income team is proud of the strong relative performance
we have delivered in fiscal year 1999 and our excellent long-term investment
record. We look forward to the opportunity to continue to serve our shareholders
over the next year.
Sincerely,
/s/ John D. Carifa
John D. Carifa
Chairman and President
/s/ Susan P. Keenan
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.
- --------------------------------------------------------------------------------
3
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES Alliance Municipal Income Fund
================================================================================
The five portfolios of Alliance Municipal Income Fund, by investing principally
in high-yielding, predominantly medium-quality municipal securities, seek to
provide their shareholders with the highest level of income exempt from Federal
and state personal income tax that is available without assuming undue risk.
These securities generally offer current yields above those of higher-quality
municipal obligations.
HOW YOUR PORTFOLIO PERFORMED OVER THE PAST TWELVE MONTHS
================================================================================
The Portfolios' Class A share total returns at net asset value (NAV) for the
twelve-month period ended October 31, 1999 are shown below. For comparison, we
have also shown returns for the overall municipal bond market, represented by
the unmanaged state-specific Lipper Municipal Debt Funds Average, for the one-,
three- and five-year periods ended October 31, 1999. Current yields and returns
for Class A, Class B and Class C shares are on the next two pages.
MUNICIPAL INCOME FUND -- CLASS A SHARES COMPARES TO LIPPER
MUNICIPAL DEBT FUNDS AVERAGE*
Period Ended October 31, 1999
================================================================================
<TABLE>
<CAPTION>
Fund Portfolio Fund Portfolio Fund Portfolio
Total Returns Lipper Total Returns Lipper Total Returns Lipper
(at NAV) Average (at NAV) Average (at NAV) Average
Portfolio 12 Months 12 Months 3 Years 3 Years 5 Years 5 Years
- ------------- -------------- ----------- -------------- --------- -------------- -----------
<S> <C> <C> <C> <C> <C> <C>
National -3.93% -4.18% 4.08% 3.53% 7.13% 5.87%
California -1.80% -4.57% 5.36% 3.60% 8.05% 6.06%
New York -3.27% -4.44% 4.68% 3.47% 7.38% 5.76%
Insured National -5.28% -4.42% 3.35% 3.21% 7.08% 5.81%
Insured California -3.74% -4.46% 4.19% 3.52% 7.37% 6.29%
</TABLE>
- --------------------------------------------------------------------------------
* Total returns for the Fund's portfolios are based on the net asset value
of Class A shares as of October 31, 1999. All fees and expenses related to
the operation of the Fund have been deducted, but no adjustment has been
made for sales charges that may apply when shares are purchased or
redeemed. Past performance is no guarantee of future results. The state
specific Lipper Municipal Debt Funds Averages have generally similar
investment objectives to your Fund's portfolios, although some may have
different investment policies.
4
<PAGE>
INVESTMENT RESULTS
As of October 31, 1999 Alliance Municipal Income Fund
================================================================================
<TABLE>
<CAPTION>
NAV and SEC Total Returns
--------------------------------------------------------------------------------------------------
Without Sales Charge With Sales Charge
------------------------------------------------- -----------------------------------------------
Since Since
1 Year 5 Year 10 Year Inception 1 Year 5 Year 10 Year Inception
------------ ------------ ---------- ------------ --------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NATIONAL PORTFOLIO
- ----------------------------------------------------------------------------------------------------------------------------
Class A -3.93% 7.13% 7.01% 7.17% -8.00% 6.20% 6.55% 6.81%
Class B -4.65% 6.39% n/a 4.92%(a) -7.36% 6.39% n/a 4.92%(a)
Class C -4.65% 6.40% n/a 4.36% -5.55% 6.40% n/a 4.36%
CALIFORNIA PORTFOLIO
- ----------------------------------------------------------------------------------------------------------------------------
Class A -1.80% 8.05% 7.24% 7.38% -5.95% 7.11% 6.77% 7.01%
Class B -2.47% 7.28% n/a 5.56%(a) -5.27% 7.28% n/a 5.56%(a)
Class C -2.39% 7.28% n/a 5.07% -3.32% 7.28% n/a 5.07%
NEW YORK PORTFOLIO
- ----------------------------------------------------------------------------------------------------------------------------
Class A -3.27% 7.38% 6.95% 6.53% -7.41% 6.45% 6.49% 6.16%
Class B -3.96% 6.60% n/a 4.86%(a) -6.71% 6.60% n/a 4.86%(a)
Class C -3.96% 6.60% n/a 4.29% -4.88% 6.60% n/a 4.29%
INSURED NATIONAL PORTFOLIO
- ----------------------------------------------------------------------------------------------------------------------------
Class A -5.28% 7.08% 6.72% 6.72% -9.34% 6.15% 6.26% 6.36%
Class B -6.10% 6.34% n/a 4.75%(a) -8.75% 6.34% n/a 4.75%(a)
Class C -6.00% 6.36% n/a 4.18% -6.88% 6.36% n/a 4.18%
INSURED CALIFORNIA PORTFOLIO
- ----------------------------------------------------------------------------------------------------------------------------
Class A -3.74% 7.37% 6.63% 7.07% -7.81% 6.45% 6.17% 6.74%
Class B -4.44% 6.57% n/a 4.70%(a) -7.20% 6.57% n/a 4.70%(a)
Class C -4.44% 6.57% n/a 4.13% -5.36% 6.57% n/a 4.13%
</TABLE>
- --------------------------------------------------------------------------------
The Fund's investment results represent total returns. The NAV and SEC
returns reflect reinvestment of dividends and/or capital gains
distributions in additional shares, without (NAV) and with (SEC) the
effect of the 4.25% maximum front-end sales charge for Class A shares or
applicable contingent deferred sales charge for Class B shares (3% year 1,
2% year 2, 1% year 3, 0% year 4); and for Class C shares (1% year 1).
Returns for Class A shares do not reflect the imposition of the 1 year 1%
contingent deferred sales charge for accounts over $1,000,000.
Past performance does not guarantee future results. Investment return and
principal value will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
(a) Assumes conversion of Class B shares into Class A shares after six years.
n/a: Not applicable.
5
<PAGE>
INVESTMENT RESULTS
As of October 31, 1999 Alliance Municipal Income Fund
================================================================================
Alliance Municipal Income Fund
-----------------------------------
Taxable-
Equivalent
Yield in 36%
30 Day Tax Bracket
SEC Yield* (at NAV)**
---------- ------------
NATIONAL PORTFOLIO
Class A 5.21% 8.58%
Class B 4.72% 7.50%
Class C 4.72% 7.50%
CALIFORNIA PORTFOLIO
Class A 5.21% 9.04%
Class B 4.71% 7.79%
Class C 4.72% 7.79%
NEW YORK PORTFOLIO
Class A 5.39% 9.71%
Class B 4.91% 8.37%
Class C 4.92% 8.37%
INSURED NATIONAL PORTFOLIO
Class A 4.98% 7.31%
Class B 4.28% 6.22%
Class C 4.29% 6.20%
INSURED CALIFORNIA PORTFOLIO
Class A 4.94% 8.20%
Class B 4.45% 6.87%
Class C 4.45% 6.87%
- --------------------------------------------------------------------------------
* SEC yields are based on SEC guidelines and are calculated on 30 days ended
October 31, 1999.
** The taxable-equivalent yield is based on NAV and a 36% marginal Federal
income tax rate and maximum state, city and local taxes, where applicable.
6
<PAGE>
Alliance Municipal Income Fund
================================================================================
NATIONAL PORTFOLIO
10/31/89 to 10/31/99
National Portfolio
Class A at NAV: $19,681
National Portfolio
Class A at offering: $18,853
Lipper General Muni Funds
Average: $18,671
<MOUNTAIN CHART PLOT POINTS TO COME>
INSURED NATIONAL PORTFOLIO
10/31/89 to 10/31/99
Insured National Portfolio
Class A at NAV: $19,161
Insured National Portfolio
Class A at offering: $18,349
Lipper Insured Muni Funds
Average: $18,222
<MOUNTAIN CHART PLOT POINTS TO COME>
CALIFORNIA PORTFOLIO
10/31/89 to 10/31/99
California Portfolio
Class A at NAV: $20,118
California Portfolio
Class A at offering: $19,260
Lipper CA Muni Funds
Average: $18,491
<MOUNTAIN CHART PLOT POINTS TO COME>
7
<PAGE>
Alliance Municipal Income Fund
================================================================================
INSURED CALIFORNIA PORTFOLIO
10/31/89 to 10/31/99
Lipper Insured CA Muni
Funds Average: $19,147
Insured California Portfolio
Class A at NAV: $19,003
Insured California Portfolio
Class A at offering: $18,199
<MOUNTAIN CHART PLOT POINTS TO COME>
NEW YORK PORTFOLIO
10/31/89 to 10/31/99
New York Portfolio
Class A at NAV: $19,588
New York Portfolio
Class A at offering: $18,748
Lipper NY Muni Funds
Average: $18,547
<MOUNTAIN CHART PLOT POINTS TO COME>
These charts illustrate the total value of an assumed $10,000 investment
in each of Alliance Municipal Income Fund's Class A shares. The charts reflect
the deduction of the maximum 4.25% sales charges from initial $10,000
investments and assume the reinvestment of dividends and capital gains.
Performance at NAV (net asset value) does not reflect sales charges, which
reduce total return figures, while performance at offering does reflect such
charges. Performance for Class B and Class C shares will vary from the results
shown in these illustrations due to differences in expenses charged to those
classes. Past performance is not indicative of future results, and is not
representative of future gain or loss in capital value or dividend income.
The Lipper General Municipal Debt Funds Average reflects performance of 78
funds; the Lipper Insured Municipal Debt Funds Average reflects performance of
17 funds; the Lipper California Municipal Debt Funds Average reflects
performance of 36 funds; the Lipper Insured California Municipal Debt Funds
Average reflects performance of 7 funds; the Lipper New York Municipal Debt
Funds Average reflects performance of 32 funds. The funds tracked by Lipper Inc.
have generally similar investment objectives to the applicable Alliance
Municipal Income Fund Portfolios, although some of the funds may have investment
policies that are somewhat different than those of Alliance Municipal Income
Fund.
When comparing an Alliance Municipal Income Fund Portfolio to the
corresponding Lipper Average, you should note that the Portfolio's performance
reflects the maximum sales charge of 4.25%, while no such sales charges are
reflected in the performance of the Lipper Averages.
8
<PAGE>
NATIONAL PORTFOLIO
PORTFOLIO OF INVESTMENTS
October 31, 1999 Alliance Municipal Income Fund
================================================================================
Standard & Principal
Poor's Amount
Ratings (a) (000) Value
- -------------------------------------------------------------
MUNICIPAL BONDS - 102.2%
LONG TERM MUNICIPAL BONDS - 93.8%
ALASKA - 3.7%
AAA Alaska Hsg Fin Corp
(Mtg Rev)
MBIA Ser 97A
6.00%, 6/01/27.............. $25,000 $ 24,568,500
------------
ARIZONA - 3.1%
AAA Maricopa Cnty IDA MFHR
(Shadow Creek)
FNMA Ser 98C AMT
5.20%, 12/15/21............. 1,500 1,369,395
AA- Mohave Cnty IDR
(Cargill/No Star Steel Proj)
Ser 95A AMT
6.70%, 3/01/20.............. 7,300 7,825,965
B Pima Cnty IDR
(Elec Pwr Co Proj)
Ser 97B Tuscon
6.00%, 9/01/29.............. 13,000 11,677,250
------------
20,872,610
------------
CALIFORNIA - 14.1%
NR Corona Comm
Fac Dist #97-2
(Eagle Glen)
Ser 98
5.75%, 9/01/16.............. 2,505 2,326,293
5.88%, 9/01/23.............. 3,260 2,988,703
Aaa Encinitas Comm
(Encinitas Ranch)
Fac Dist #1
Ser 95A Pre-refunded
7.38%, 9/01/05 (b).......... 18,155 20,782,936
NR Encinitas Comm
(Encinitas Ranch)
Fac Dist #1
Ser 98A
5.88%, 9/01/20.............. 10,020 9,451,265
NR Fontana Comm
Fac Dist #11
(Heritage West End)
Ser 99B
6.50%, 9/01/28.............. 8,150 7,816,013
NR La Verne Comm
Fac Dist #88-1 Spec Tax
5.88%, 3/01/14.............. 6,920 6,695,031
NR Los Angeles Cnty Comm
Fac Dist #3
(Valencia/Newhall Area)
Ser 95A
7.13%, 9/01/20.............. 5,500 5,807,615
NR Los Angeles Cnty Comm
Fac Dist #4
(Calabasas Area)
Ser 92A Pre-refunded
7.65%, 9/01/01.............. 5,000 5,404,700
NR Los Angeles Cnty Comm
Fac Dist #92-1 (Castaic
Union SD/Northlake Proj)
Ser 92
9.00%, 10/01/19............. 8,710 9,517,417
AAA No Calif Trans Agy
Elec Rev
(Calif-Oregon Trans)
MBIA Ser 93
7.34%, 4/29/24.............. 10,000 8,700,700
NR Sacramento Comm
Fac Lease/Rev
(No Natomas Proj)
Ser 99A
6.25%, 9/01/23.............. 6,435 6,188,025
NR San Diego Comm
Fac Dist #1
(Miramar Ranch North)
Ser 95B Pre-refunded
7.10%, 9/01/20 ............. 7,000 7,984,760
NR Santa Margarita Wtr Dist
Fac Dist #99-1 (Talega)
Ser 99
6.20%, 9/01/20.............. 1,100 1,066,164
------------
94,729,622
------------
COLORADO - 1.5%
Aaa Denver City & Cnty
(Arpt Sys Rev)
Ser 92C AMT Pre-refunded
6.75%, 11/15/02 (b) ........ 1,995 2,151,628
BBB+ Denver City & Cnty
(Arpt Sys Rev)
Ser 92C AMT
6.75%, 11/15/22............. 7,505 7,716,716
------------
9,868,344
------------
9
<PAGE>
NATIONAL PORTFOLIO
PORTFOLIO OF INVESTMENTS (continued) Alliance Municipal Income Fund
================================================================================
Standard & Principal
Poor's Amount
Ratings (a) (000) Value
- -------------------------------------------------------------
CONNECTICUT - 1.5%
BB- Connecticut Dev Auth PCR
(Ct Light & Pwr Co Proj)
Ser 93 AMT
5.95%, 9/01/28.............. $11,000 $ 9,836,420
------------
DISTRICT OF COLUMBIA - 0.3%
AAA Washington DC GO
Ser 98B MBIA
5.75%, 6/01/09.............. 1,900 1,966,367
------------
FLORIDA - 12.2%
Aaa Clay Cnty HFA SFMR
(Mortgage Rev)
Ser 99 GNMA/FNMA
5.30%, 10/01/29 (b)......... 4,710 4,253,978
NR Collier Cnty Comm
Fac Dist
(Fiddlers Creek)
Ser 99A
5.88%, 5/01/21.............. 9,305 8,733,580
NR Collier Cnty Comm
Dev Dist (Heritage Greens)
Ser 97
8.25%, 5/01/18.............. 4,150 4,279,771
A Collier Cnty HFA MFHR
(Whistlers Grn Apts)
Ser 99A AMT
5.40%, 12/01/27............. 1,890 1,706,141
NR Collier Cnty IDR
(Southern St Util)
Ser 96 AMT
6.50%, 10/01/25............. 12,605 12,746,554
Aaa Escambia Cnty HFA SFMR
MBIA Ser 99 AMT
5.20%, 4/01/32 (b).......... 5,000 4,348,300
AA+ Florida GO
Board of Education
Ser 98B
6.00%, 6/01/04.............. 1,900 2,007,787
AAA Florida HFC MFHR
(Crossing at Univ Apt)
AMBAC Ser 98Q-1 AMT
5.25%, 12/01/38............. 6,545 5,745,921
NR Lee Cnty Comm Fac
(Stoneybrook)
Ser 98B
5.70%, 5/01/08 ............. 3,350 3,251,376
Aa3 North Miami Hlth Fac Auth
(Catholic Hlth Svcs Oblig Grp)
Ser 96
6.00%, 8/15/24 (b).......... 1,200 1,171,164
NR Northern Palm Beach Cnty
Imp Dist #9A (ABACOA)
Ser 96A
7.30%, 8/01/27.............. 15,600 16,505,580
A3 Orange Cnty HFA MFHR
(Seminole Pt Proj)
Ser 99L AMT
5.80%, 6/01/32 (b).......... 6,855 6,400,513
A Pasco Cnty HFA MFHR
(Pasco Woods Apts)
Ser 99A
5.90%, 8/01/39.............. 3,690 3,449,892
NR St. John's Cnty Comm Dev
(Julington Creek Plantation)
Ser 97
6.70%, 5/01/07.............. 2,830 2,927,465
7.13%, 5/01/19.............. 1,695 1,785,123
A Suwannee Cnty Hlth Fac
(Advent Christian Vlg Inc.)
ACA Ser 99
5.25%, 4/01/24.............. 1,300 1,136,759
Baa2 Volusia Cnty Ed Fac Auth
(Embry-Riddle Aero Univ)
Ser A
5.75%, 10/15/29 (b)......... 2,000 1,860,160
------------
82,310,064
------------
INDIANA - 8.0%
BB+ Indianapolis Arpt Auth
(United Airlines
Maintenance Ctr Proj)
Ser 95A AMT
6.50%, 11/15/31............. 55,570 54,039,046
------------
MARYLAND - 0.2%
NR Maryland Dev Fin Auth Eco Dev
(Med Waste Assoc)
Ser 89 AMT
8.75%, 11/15/10............. 1,365 1,383,796
------------
MASSACHUSETTS - 4.5%
BBB Massachusetts Dev Fin Agcy
(Ogden Haverhill Proj)
Ser 98B AMT
5.50%, 12/01/19............. 2,735 2,422,171
AAA Massachusetts HFA MFHR
AMBAC Ser 95E AMT
6.00%, 7/01/37.............. 2,680 2,613,375
10
<PAGE>
Alliance Municipal Income Fund
================================================================================
Standard & Principal
Poor's Amount
Ratings (a) (000) Value
- -------------------------------------------------------------
A+ Massachusetts HFA SFMR
(Residential Mtg)
Ser 40 AMT
6.65%, 12/01/27............. $ 5,000 $ 5,140,150
AAA Massachusetts HFA SFMR
(Residential Mtg)
Ser 73 AMT
5.90%, 12/01/23............. 8,000 7,740,240
Baa3 Massachusetts Hlth & Ed
Fac Auth
(Lasell College)
Ser 99A
5.63%, 7/01/29 (b).......... 7,490 6,640,709
AAA Massachusetts Port Auth
Spec Fac (US Air Proj)
MBIA Ser 96A AMT
5.88%, 9/01/23.............. 5,600 5,374,432
------------
29,931,077
------------
MICHIGAN - 3.6%
BB- Detroit
(Daimler/Chrysler Jefferson
North Assembly Plant)
Ser 98A
5.50%, 5/01/21.............. 2,070 1,862,958
AAA Detroit Swr Sys Rev
FGIC Ser 93
7.62%, 7/01/23 ............. 1,300 1,182,909
AAA Kent Cnty Arpt Rev
(Kent Cnty Int'l)
Ser 95 AMT Pre-refunded
6.10%, 1/01/25.............. 3,300 3,526,677
AAA Michigan HDA MFHR
(Rental Hsg Rev)
MBIA Ser 99A AMT
5.30%, 10/01/37............. 14,520 12,868,060
AA+ Michigan HDA SFMR
Ser 96B AMT
6.20%, 6/01/27.............. 4,945 4,964,236
------------
24,404,840
------------
MINNESOTA - 4.3%
AAA Brooklyn Park MFHR
(Brooks Landing)
FNMA Ser 99A AMT
5.50%, 7/01/19.............. 1,355 1,283,253
AAA Duluth (Arpt Lease Rev) GO
Ser 95C AMT
6.25%, 8/01/14.............. 3,430 3,539,554
A- Golden Valley Hlth Fac
(Covenant Retmt Cmnty)
Ser 99A
5.50%, 12/01/29............. 3,750 3,265,688
AAA Minneapolis HFA MFHR
(Riverside Plaza Proj)
GNMA Ser 98 AMT
5.20%, 12/20/30............. 4,400 3,940,156
AAA Minnesota HFA MFHR
(Rental Hsg)
MBIA Ser 95D
6.00%, 2/01/22.............. 3,685 3,708,215
AA+ Minnesota HFA SFMR
(Home Mortgage)
Ser 96G AMT
6.25%, 7/01/26.............. 5,675 5,703,205
Baa1 Minnesota Higher Ed Fac Auth
(Hamline Univ)
Ser 99-5B
6.00%, 10/01/29 (b)......... 1,250 1,204,575
AA+ Rochester Hosp Rev
(Mayo Med Ctr)
Ser 92H
8.08%, 11/15/15 (c)......... 3,000 3,063,840
Aaa Saint Paul MFHR
(Wellington Proj)
FHMLC Ser 99A
5.10%, 2/01/24 (b).......... 2,280 2,076,168
BBB- So St Paul Hosp Rev
(Healtheast Proj)
Ser 94
6.75%, 11/01/09............. 1,370 1,367,041
------------
29,151,695
------------
NEW HAMPSHIRE - 1.4%
BB- New Hampshire PCR
(Conn Pwr & Light Co Proj)
Ser 86 AMT
5.90%, 11/01/16............. 10,000 9,186,000
------------
NEW JERSEY - 4.0%
NR New Jersey Eco Dev Auth
(Kapkowski Rd)
Ser 98B AMT
6.50%, 4/01/31.............. 1,000 990,670
Baa1 New Jersey Eco Dev Auth
(NUI Corp)
Ser 98A AMT
5.25%, 11/01/33 (b)......... 12,700 10,731,881
11
<PAGE>
NATIONAL PORTFOLIO
PORTFOLIO OF INVESTMENTS (continued) Alliance Municipal Income Fund
================================================================================
Standard & Principal
Poor's Amount
Ratings (a) (000) Value
- -------------------------------------------------------------
A+ New Jersey Eco Dev Auth
Swr Rev (Anheuser-Busch)
Ser 95 AMT
5.85%, 12/01/30............. $ 2,600 $ 2,527,382
AAA New Jersey Hgr Ed Loan
(Student Loan) MBIA
Ser 99A
5.25%, 6/01/18.............. 1,500 1,413,360
AAA New Jersey Hsg & Mort Fin
Agy Rev SFMR
(Home Buyer Rev)
MBIA AMT
5.90%, 10/01/29............. 11,350 10,948,210
------------
26,611,503
------------
NEW YORK - 2.6%
Aaa Glen Cove IDR
(The Regency At
Glen Cove)
ETM Ser 92B
Zero coupon, 10/15/19 (b)... 15,000 4,445,400
AAA Niagara Frontier Trans
Airport Rev (Buffalo Niagara)
MBIA AMT
5.63%, 4/01/29.............. 2,000 1,863,020
A+ NYS Energy Res &
Dev Auth
(Consolidated Edison)
Ser 94A AMT
7.13%, 12/01/29............. 5,000 5,419,750
AAA NYS Energy Res &
Dev Auth PCR
(NYS Elec & Gas)
MBIA Ser 88 AMT
5.95%, 12/01/27............. 3,500 3,462,130
AA- Port Auth of NY & NJ
Cons Rev (95th Ser) AMT
6.13%, 7/15/29.............. 2,000 2,000,320
------------
17,190,620
------------
OHIO - 5.1%
AAA Akron Hgr Ed
(Univ of Akron)
FGIC Ser 99
5.75%, 1/01/29.............. 3,000 2,873,160
BBB Dayton Spec Fac
(Emery Air Freight)
Ser 96D AMT
6.20%, 10/01/09............. 3,620 3,714,048
A Hamilton Cnty Hlth Fac
(Twin Towers)
Ser 99A
5.80%, 10/01/23............. 1,775 1,661,826
Baa1 Ohio Air Quality Dev Auth
PCR (Columbus So Pwr)
Ser 85B
6.25%, 12/01/20 (b)......... 5,000 5,009,700
AAA Ohio Air Quality Dev Auth
(JMG Funding/
Ohio Pwr Co)
AMBAC Ser 94B AMT
6.38%, 4/01/29.............. 5,315 5,474,450
AAA Ohio HFA SFMR
(Residental Dev)
GNMA Ser 97 AMT
6.15%, 3/01/29.............. 8,700 8,711,832
A+ Ohio Wtr Dev Auth Swr Rev
(Anheuser-Busch Proj)
Ser 99 AMT
6.00%, 8/01/38.............. 2,250 2,194,920
A- Ohio Wtr Dev Auth
Solid Waste
(North Star/BHP) AMT
6.45%, 9/01/20.............. 4,600 4,712,884
------------
34,352,820
------------
OKLAHOMA - 0.3%
Aaa Oklahoma HFA SFMR
(Mortgage Rev)
Ser 99B-2 AMT
5.40%, 3/01/25 (b).......... 2,000 1,825,200
------------
PENNSYLVANIA - 5.3%
NR Harrisburg Air Fac
(Susquehanna Aero Proj)
AMT
5.50%, 1/01/24.............. 1,490 1,267,841
A Allegheny Cnty Higher Ed
(Thiel College)
ACA Ser 99A
5.38%, 11/15/29............. 2,000 1,761,600
BBB Crawford Cnty Hosp Hlth Fac
(Wesbury Methodist)
Ser 99
6.25%, 8/15/29.............. 2,100 1,953,063
BB- New Morgan IDA
Solid Waste
(Browning-Ferris)
Ser 94 AMT
6.50%, 4/01/19.............. 4,000 3,846,440
12
<PAGE>
Alliance Municipal Income Fund
================================================================================
Standard & Principal
Poor's Amount
Ratings (a) (000) Value
- -------------------------------------------------------------
AA Northampton Cnty Higher Ed
(Moravian College)
Ser 99
5.13%, 7/01/29.............. $ 1,000 $ 839,530
BBB Pennsylvania Eco Dev Auth
Waste Wtr Revs (Sun Co)
Ser 94A AMT
7.60%, 12/01/24............. 5,000 5,435,500
AA+ Pennsylvania HFA SFMR
(Home Mortgage)
Ser 94-41B AMT
6.65%, 4/01/25.............. 5,000 5,122,500
AA+ Pennsylvania HFA SFMR
(Home Mortgage)
Ser 99-66A AMT
5.65%, 4/01/29.............. 6,900 6,424,245
AAA Pennsylvania Higher Ed
Student Loan Rev
AMBAC Ser 88D AMT
6.05%, 1/01/19.............. 5,900 5,866,370
BBB+ Philadelphia Hosp Rev
(Temple Univ)
Ser A
6.63%, 11/15/23............. 3,250 3,141,677
------------
35,658,766
------------
TENNESSEE - 0.1%
BBB Memphis Shelby Cnty Spec Fac
(Federal Express)
Ser 93 AMT
6.20%, 7/01/14........... 1,000 1,017,050
------------
TEXAS - 13.1%
BBB- Alliance Arpt Auth
Fac Imp (American Airlines)
Ser 90 AMT
7.50%, 12/01/29............. 11,690 12,197,580
BBB Alliance Arpt Auth
Spec Fac (Federal Express)
Ser 96 AMT
6.38%, 4/01/21.............. 23,000 22,720,780
BBB- Dallas Fort Wrth Texas
International Airport
American Airlines
Series 99 AMT
6.38%, 5/01/35.............. 15,000 14,381,550
BB Harris Cnty Arpt Rev
(Continental Airlines)
Ser 98 AMT
5.38%, 7/01/19.............. 3,155 2,644,079
BB Houston Arpt Rev
(Continental Airlines)
Ser 97B AMT
6.13%, 7/15/27.............. 8,000 7,283,360
AAA Houston Arpt Sys Rev
FGIC Ser 98B AMT
5.00%, 7/01/25.............. 29,000 24,523,270
AA San Antonio Util Rev
(Elec & Gas)
Ser 92
5.80%, 2/01/06 ............. 3,825 4,005,272
------------
87,755,891
------------
VIRGINIA - 4.0%
Baa2 Bedford Cnty IDR
(Nekoosa Pkg/GA-Pacific)
Ser 99 AMT
6.30%, 12/01/25 (b)......... 3,000 2,910,270
Baa2 Goochland Cnty IDR
(Nekoosa Pkg/GA-Pacific)
Ser 98 AMT
5.65%, 12/01/25 (b)......... 12,600 11,276,748
A+ James Cnty Swr
(Anheuser-Busch Proj)
Ser 97 AMT
6.00%, 4/01/32.............. 2,200 2,153,734
AAA Metro Wash DC Arpt
Auth Rev
Ser A FGIC AMT
5.00%, 10/01/27............. 5,000 4,237,150
AA- Metro Washington Arpt Auth
Ser 97B AMT
5.50%, 10/01/23............. 6,700 6,126,614
------------
26,704,516
------------
WASHINGTON - 0.6%
A- Pilchuck Dev Pub Corp
Spec Fac
(BF Goodrich)
Ser 93 AMT
6.00%, 8/01/23.............. 4,500 4,213,665
------------
WISCONSIN - 0.3%
AA Wisconsin GO
(Veterans Hsg)
Ser 99-1 AMT
5.30%, 5/01/20.............. 2,505 2,256,128
------------
TOTAL LONG TERM
MUNICIPAL BONDS
(cost $635,198,454)...... 629,834,540
------------
13
<PAGE>
NATIONAL PORTFOLIO
PORTFOLIO OF INVESTMENTS (continued) Alliance Municipal Income Fund
================================================================================
Standard & Principal
Poor's Amount
Ratings (a) (000) Value
- -------------------------------------------------------------
SHORT TERM
MUNICIPAL NOTES (d) - 8.4%
CALIFORNIA - 0.3%
A-2 Assoc Bay Area Gov't IDR
(Reliance Tech Service Inc.)
Ser 95A AMT VRDN
5.10%, 10/01/19............. $ 1,891 $ 1,891,000
------------
CONNECTICUT - 0.5%
A-1+ Connecticut Hlth & Ed Fac
Auth (Yale Univ)
Ser 99U VRDN
3.55%, 7/01/33.............. 3,500 3,500,000
------------
DISTRICT OF
COLUMBIA - 0.3%
A-1+ District of Columbia GO
Ser 91B-3 VRDN
3.75%, 6/01/03.............. 2,200 2,200,000
------------
FLORIDA - 0.0%
VMIG-1 Palm Beach IDR
(Florida Convalescent
Ctr Proj)
AMT VRDN
4.00%, 11/01/11 (b)......... 275 275,000
------------
HAWAII - 0.2%
VMIG-2 Hawaii Hsg Fin &
Dev Corp MFHR
(Rental Hsg)
Ser 90B VRDN
4.30%, 7/01/25 (b).......... 1,100 1,100,000
------------
ILLINOIS - 0.6%
VMIG-2 Illinois Dev Fin
Auth IDR
(THK America Proj)
Ser 91 AMT VRDN
4.85%, 7/01/11 (b).......... 3,700 3,700,000
------------
KENTUCKY - 0.4%
A-2 Russellville IDR
(JS Technos Corp Proj)
Ser 89 AMT VRDN
4.85%, 12/01/09............. 2,900 2,900,000
------------
MASSACHUSETTS - 0.5%
VMIG-1 Massachusetts HFA
MFHR
(Princeton Crossing Proj)
Ser 96A AMT VRDN
3.65%, 6/01/31 (b).......... 3,300 3,300,000
------------
MICHIGAN - 0.4%
A-1+ Detroit MBIA
(Sewage Disposal Sys Rev)
Ser 98B VRDN
3.55%, 7/01/23.............. 3,000 3,000,000
------------
NEW YORK - 1.6%
A-2 New York City IDA
(Nippon Cargo Air Proj)
Ser 92 AMT VRDN
4.75%, 11/01/15............. 10,600 10,600,000
------------
NORTH CAROLINA - 0.3%
A-1+ Halifax Cnty
(Louisville Gas & Elec)
Ser 93 AMT VRDN
3.70%, 6/01/21.............. 2,300 2,300,000
------------
OHIO - 1.1%
A-1+ Ohio Air Qual Dev Auth
Rev IDR (Jmg Funding LP)
Ser 94A AMT VRDN
3.55%, 4/01/28 ............. 5,100 5,100,000
A-2 Ohio HFA MFHR
(Pine Crossing)
GNMA
Ser 97A AMT VRDN
4.80%, 9/01/36.............. 2,065 2,065,000
------------
7,165,000
------------
PENNSYLVANIA - 1.7%
A-1+ Emmaus GO
Ser 89G-12 VRDN
3.55%, 3/01/24.............. 5,000 5,000,000
A-1 Northampton GO
(Citizens Utilities Co Proj)
Ser 96 AMT VRDN
3.55%, 9/01/18.............. 3,500 3,500,000
A-1+ Pennsylvania Hgr Ed Fac
(Univ Penn)
Ser 94B VRDN
3.55%, 1/01/24.............. 3,000 3,000,000
------------
11,500,000
------------
VIRGINIA - 0.3%
A-1+ Richmond Arpt Rev
(Richmond Intl Proj)
AMBAC
Ser 95C AMT VRDN
3.70%, 7/01/23.............. 2,000 2,000,000
------------
14
<PAGE>
Alliance Municipal Income Fund
================================================================================
Standard & Principal
Poor's Amount
Ratings (a) (000) Value
- -------------------------------------------------------------
WISCONSIN - 0.2%
P-1 Carlton Elec Rev
(Wisconsin Pwr & Light Proj)
AMT VRDN
3.55%, 8/01/15 (b).......... $ 1,200 $ 1,200,000
------------
TOTAL SHORT TERM
MUNICIPAL NOTES
(cost $56,631,000)....... 56,631,000
------------
TOTAL INVESTMENTS - 102.2%
(cost $691,829,454)...... $686,465,540
Other assets less
liabilities - (2.2%)..... (14,713,693)
------------
NET ASSETS - 100%........... $671,751,847
============
- --------------------------------------------------------------------------------
See footnote summary on page 28.
See Glossary of Terms on page 28.
See notes to financial statements.
15
<PAGE>
INSURED NATIONAL PORTFOLIO
PORTFOLIO OF INVESTMENTS
October 31, 1999 Alliance Municipal Income Fund
================================================================================
Standard & Principal
Poor's Amount
Ratings (a) (000) Value
- -------------------------------------------------------------
MUNICIPAL BONDS - 97.9%
LONG TERM MUNICIPAL BONDS - 88.2%
ALASKA - 4.5%
AAA Alaska Hsg Fin Corp SFMR
(Mtg Rev)
MBIA Ser 97A
6.10%, 12/01/37............. $10,000 $ 9,940,800
------------
ARIZONA - 3.5%
AAA Mesa IDA Hlth Fac
(Discovery Hlth Sys)
MBIA Ser 99A
5.75%, 1/01/25.............. 2,300 2,216,947
AAA Mesa IDA Hlth Fac
(Lutheran Hlth Sys)
MBIA Series 98A
5.00%, 1/01/19.............. 2,000 1,769,720
AAA Pima Cnty IDR
(Tucson Elec Pwr)
FSA Ser 88A
7.25%, 7/15/10.............. 2,140 2,308,675
AAA Tempe MFHR
(Quadrangles)
FHA Ser 93A
6.25%, 6/01/26.............. 1,300 1,326,351
------------
7,621,693
------------
CALIFORNIA - 3.8%
A California Infra & Eco Dev
(American Ctr/Wine
Food & Art)
Ser 99 ACA
5.75%, 12/01/24............. 3,000 2,818,320
5.80%, 12/01/29............. 6,000 5,650,920
------------
8,469,240
------------
COLORADO - 2.8%
AAA Denver City & Cnty
(Arpt Sys Rev)
MBIA Ser 95A
5.70%, 11/15/25............. 6,375 6,206,318
------------
DELAWARE - 0.7%
AAA Sussex Cunty Swr Rev
(West Rehoboth)
MBIA Ser 94 Pre-refunded
6.60%, 6/15/04.............. 1,500 1,631,010
------------
DISTRICT OF COLUMBIA - 1.9%
AAA Washington DC
(Natl Academy/Science)
AMBAC Ser 99A
5.00%, 1/01/28.............. 5,000 4,182,050
------------
GEORGIA - 3.7%
AAA Atlanta Wtr & Swr Rev
FGIC Ser 99
5.00%, 11/01/38............. 10,000 8,243,400
------------
ILLINOIS - 8.6%
AAA Chicago Parking Rev
(Lakefront Facs)
MBIA Ser 98
5.13%, 1/01/28.............. 4,500 3,848,580
AAA Illinois Hlth Fac Auth
(Alexian Brothers Hlth)
FSA Ser 99
5.13%, 1/01/28.............. 12,145 10,401,099
AAA Metro Pier & Expo Auth
(McCormick Place Expo)
FGIC Ser 93A
Zero coupon, 6/15/19........ 15,850 4,812,060
------------
19,061,739
------------
MASSACHUSETTS - 8.2%
AAA Chelsea GO
AMBAC Ser 94 Pre-refunded
6.00%, 6/15/04.............. 1,965 2,108,288
AAA Holyoke GO
FSA Ser 93B
6.13%, 8/01/13.............. 1,435 1,508,773
AA Massachusetts Dev Fin Auth
(Worcester Redev)
Asset Gty Ser 99
6.00%, 6/01/24.............. 1,300 1,291,667
AA+ Massachusetts Hlth & Ed Fac
(Wellesley College)
Series 99F
5.13%, 7/01/39.............. 8,500 7,134,730
AAA Massachusetts Muni
Wholesale Elec
(Pwr Supply Sys)
MBIA Ser 92A
6.00%, 7/01/18.............. 1,000 1,001,120
Aaa Massachusetts Trpk Auth
(Metro Highway System)
AMBAC Ser 99A
5.00%, 1/01/39 (b).......... 6,000 4,982,220
------------
18,026,798
------------
16
<PAGE>
Alliance Municipal Income Fund
================================================================================
Standard & Principal
Poor's Amount
Ratings (a) (000) Value
- -------------------------------------------------------------
MICHIGAN - 14.1%
AAA Detroit GO
FGIC Ser 93
6.35%, 4/01/14.............. $ 1,690 $ 1,781,023
AAA Detroit Swr Sys Rev
FGIC Ser 93 Pre-refunded
7.62%, 7/01/03 (c).......... 10,100 11,216,555
AAA Grand Rapids Swr Sys Rev
MBIA
Ser 92 Pre-refunded
6.00%, 1/01/02.............. 2,500 2,625,875
AAA Kalamazoo Hosp Fin Auth
Hosp Rev (Borgess Med Ctr)
FGIC Ser 94
6.31%, 6/01/11 (c).......... 7,500 7,170,000
AAA Michigan Hosp Fin Auth
(St. John's Hospital)
ETM AMBAC Ser A
6.00%, 5/15/13.............. 1,000 1,028,350
AAA Michigan Strategic Fund
(Detroit Edison Co)
MBIA Ser 95AA
6.40%, 9/01/25.............. 3,310 3,462,856
AAA Saginaw Hosp Fin Auth
Hosp Rev (Covenant
Med Ctr)
MBIA Ser 99E
5.50%, 7/01/24.............. 2,000 1,838,260
AAA Three Rivers GO
Dist MBIA
Ser 96 Pre-refunded
6.00%, 5/01/06.............. 1,000 1,069,580
AA Troy Downtown
Dev Auth
Ser 95A
6.38%, 11/01/18............. 1,000 1,031,850
------------
31,224,349
------------
MINNESOTA - 4.1%
AAA Bloomington Port Auth
(Mall of America Proj)
FSA Series 96A
5.35%, 2/01/13 (b).......... 2,025 2,002,138
AAA Minneapolis COP
(Spec School Dist 1)
MBIA Ser 96A
5.90%, 2/01/17.............. 3,330 3,334,795
AAA Minnesota Agric & Econ
Dev Brd Hlth Fac
(Benedictine Hlth Sys)
MBIA Ser 99A
5.13%, 2/15/29.............. 4,200 3,638,712
------------
8,975,645
------------
NEBRASKA - 1.5%
AAA Nebraska Inv Fin Auth
Hosp Rev (Bishop Clarkson
Mem) MBIA Ser 91
9.23%, 12/08/16 (c)......... 3,000 3,215,700
------------
OHIO - 6.2%
AAA Cuyahoga Cnty Hosp Rev
(Meridia Hlth Sys)
Ser 95 Pre-refunded
6.25%, 8/15/05.............. 2,600 2,831,868
AAA Ohio Air Quality
Dev Auth
(Ohio Pwr)
AMBAC Ser 99C
5.15%, 5/01/26.............. 10,000 8,795,200
AAA Ohio Capital Corp MFHR
(Sect 8 Assist)
FHA MBIA Ser 95E
6.35%, 1/01/22.............. 1,965 2,003,730
------------
13,630,798
------------
PENNSYLVANIA - 21.3%
Aaa Lehigh Cnty Gen Auth Hosp Rev
(Lehigh Valley Hlth)
MBIA Ser 99A
5.25%, 7/01/29 (b).......... 3,500 3,068,170
AAA Pennsylvania Conv Ctr
MBIA Ser 94A
6.75%, 9/01/19.............. 2,500 2,712,425
AAA Pennsylvania Gas Rev
FSA 16th Ser
5.25%, 7/01/29.............. 7,500 6,620,775
5.50%, 7/01/15.............. 2,000 1,940,640
FSA 2nd Ser
5.50%, 7/01/15.............. 3,410 3,308,791
AAA Pennsylvania Higher Ed
Hlth Fac (Univ of Pitt Med Ctr)
FSA Ser 99A
5.00%, 8/01/29.............. 25,000 20,857,750
AAA Philadelphia GO
FSA Ser 98
5.00%, 3/15/28.............. 10,000 8,429,600
------------
46,938,151
------------
17
<PAGE>
INSURED NATIONAL PORTFOLIO
PORTFOLIO OF INVESTMENTS (continued) Alliance Municipal Income Fund
================================================================================
Standard & Principal
Poor's Amount
Ratings (a) (000) Value
- -------------------------------------------------------------
VIRGINIA - 2.4%
AAA Harrisonburg Redev &
Hsg Auth MFHR
(Battery Heights Assoc)
GNMA Ser 96A
6.25%, 4/20/36.............. $ 5,185 $ 5,301,300
------------
WEST VIRGINIA - 0.9%
AAA West Virginia Eco Dev
(Parkway Proj)
FGIC Ser 93
7.54%, 5/16/19 (c).......... 2,100 2,014,131
------------
TOTAL LONG TERM
MUNICIPAL BONDS
(cost $196,013,261)...... 194,683,122
------------
SHORT TERM MUNICIPAL
NOTES (d) - 9.7%
GEORGIA - 4.7%
A-1+ Burke Cnty GA
Dev Authority FRN
(Oglethorpe Power)
Ser 93A FGIC VRDN
3.50%, 1/01/16 (b).......... 10,500 10,500,000
------------
ILLINOIS - 5.0%
VMIG-1 Illinois Dev Fin Auth
(Jewish Federation Proj)
AMBAC Ser 99 VRDN
3.50%, 9/01/24 (b).......... 11,000 11,000,000
------------
TOTAL SHORT TERM
MUNICIPAL NOTES
(cost $21,500,000)........ 21,500,000
------------
TOTAL INVESTMENTS - 97.9%
(cost $217,513,261)....... 216,183,122
Other assets less
liabilities - 2.1%........ 4,652,116
------------
NET ASSETS - 100%........... $220,835,238
============
- --------------------------------------------------------------------------------
See footnote summary on page 28.
See Glossary of Terms on page 28.
See notes to financial statements.
18
<PAGE>
NEW YORK PORTFOLIO
PORTFOLIO OF INVESTMENTS
October 31, 1999 Alliance Municipal Income Fund
================================================================================
Standard & Principal
Poor's Amount
Ratings (a) (000) Value
=============================================================
MUNICIPAL BONDS - 98.7%
A- Essex Cnty IDR
(Int'l Paper)
Ser 95A AMT
5.80%, 12/01/19............. $ 7,000 $ 6,665,120
AAA Glen Cove IDR
(The Regency at Glen Cove)
ETM Ser 92B
Zero coupon, 10/15/19....... 20,010 5,930,164
Aaa Horseheads NY Series 99
(Appleridge Retirement Comm)
5.75%, 9/01/41 (b).......... 4,000 3,835,240
AAA Islip Res Rec Agy
AMBAC
Ser 94B AMT
6.13%, 7/01/12.............. 2,020 2,111,183
AA Monroe County IDA
Hgr Ed (St John Fisher
Coll Asset Gty)
Ser 99
5.38%, 6/01/24.............. 3,070 2,784,674
AAA Nassau Cnty NY FSA Hlth Fac
(Nassau Hlth Sys Rev)
Ser 99
5.75%, 8/01/29.............. 10,000 9,534,400
AAA New York City GO
MBIA Ser 93E Pre-refunded
6.00%, 5/15/03.............. 4,050 4,299,601
Ser 93D
6.00%, 5/15/11.............. 950 985,198
A- New York City GO
Ser 92A Pre-refunded
6.25%, 8/01/02.............. 1,975 2,093,559
Ser 92A
6.25%, 8/01/18.............. 4,025 4,067,223
A- New York City GO
Ser 93D
8.92%, 8/01/14 (c).......... 10,000 10,260,500
A- New York City GO
Ser 94B Pre-refunded
7.25%, 8/15/04.............. 3,465 3,879,622
A-1 New York City GO
Ser 96-J Pre-refunded
6.00%, 2/15/06.............. 2,380 2,550,265
Ser 96-J
6.00%, 2/15/24.............. 11,200 11,016,096
A- New York City GO
Ser 96A
6.25%, 8/01/17.............. 21,250 21,590,425
Baa1 New York City IDR
(American Airlines)
Ser 90 AMT
5.40%, 7/01/20 (b).......... 3,500 3,157,140
BBB- New York City IDR
(American Airlines)
Ser 94 AMT
6.90%, 8/01/24.............. 7,000 7,273,630
A New York City IDR
(British Airways)
Ser 98 AMT
5.25%, 12/01/32............. 36,805 31,728,854
AAA New York City IDR
(Japan Airlines)
FSA AMT
Ser 91 6.00%, 11/01/15...... 4,155 4,350,950
A New York City IDR
(Terminal One LP)
Ser 94 AMT
6.13%, 1/01/24.............. 36,500 35,753,210
AAA Niagara Frontier Trans
Arpt Rev (Gtr Buffalo Int'l)
AMBAC
Ser 94A AMT
6.25%, 4/01/24.............. 16,125 16,482,008
AAA Niagara Frontier Trans Rev
(Buffalo Niagara )
MBIA AMT
5.63%, 4/01/29.............. 1,900 1,769,869
Aaa NYS Dorm Auth Rev
(Brooklyn Hosp Ctr)
FHA Ser 99
5.20%, 2/01/39 (b).......... 3,000 2,563,770
AA NYS Dorm Auth Rev
(Long Island Univ)
Asset 6th Ser 99
5.13%, 9/01/23.............. 1,750 1,525,090
5.25%, 9/01/28.............. 1,400 1,220,576
AAA NYS Energy Res &
Dev Auth
(Brooklyn Union Gas)
MBIA AMT
7.41%, 7/08/26.............. 6,000 5,268,180
AAA NYS Energy Res &
Dev Auth
(Brooklyn Union Gas)
MBIA
Ser 89B AMT
6.75%, 2/01/24.............. 7,500 7,887,600
19
<PAGE>
NEW YORK PORTFOLIO
PORTFOLIO OF INVESTMENTS (continued) Alliance Municipal Income Fund
================================================================================
Standard & Principal
Poor's Amount
Ratings (a) (000) Value
=============================================================
A+ NYS Energy Res &
Dev Auth
(Consolidated Edison)
Ser 94A AMT
7.13%, 12/01/29............. $ 17,000 $ 18,427,150
A- NYS Energy Res &
Dev Auth
(Long Island Ltg Co)
Ser 95A
5.30%, 8/01/25.............. 7,500 6,716,100
AAA NYS Energy Res &
Dev Auth
(Rochester Gas & Elec)
MBIA AMT
6.50%, 5/15/32.............. 6,460 6,702,831
AAA NYS Energy Res &
Dev Auth PCR
(NYS Elec & Gas)
MBIA Ser 87A AMT
6.15%, 7/01/26.............. 15,000 15,291,750
AAA NYS Energy Res &
Dev Auth PCR
(NYS Elec & Gas)
MBIA Ser 88 AMT
5.95%, 12/01/27............. 3,200 3,165,376
BBB+ NYS Envir Fac Auth IDR
(Occidental Petroleum)
Ser 93A AMT
5.70%, 9/01/28.............. 6,950 6,262,437
AAA NYS Envir Fac Corp
Wtr Fac (Spring Valley Wtr)
AMBAC Ser 94A AMT
6.30%, 8/01/24.............. 11,800 12,104,322
Aa1 NYS HFA MFHR
(Westchester/
Onondaga/Rockland Proj)
Ser 92F AMT
6.70%, 8/15/25 (b).......... 6,000 6,187,620
Aa2 NYS Mtg Agy SFMR
(Homeowner Mort)
Ser 73A AMT
5.30%, 10/01/28 (b)......... 5,000 4,440,850
Aa2 NYS Mtg Agy SFMR
(Homeowner Mort)
Ser 82
5.65%, 4/01/30 (b).......... 20,000 18,578,800
Aa2 NYS Mtg Agy SFMR
Ser 42
6.65%, 4/01/26 (b).......... 4,500 4,615,875
Aa2 NYS Mtg Agy
SFMR Ser 46 AMT
6.65%, 10/01/25 (b)......... 18,785 19,241,475
Aa2 NYS Mtg Agy
SFMR Ser 79 AMT
5.30%, 4/01/29 (b).......... 12,750 11,299,560
A Oneida County IDA
(Mohawk Valley Proj)
ACA Ser 99
5.35%, 3/15/29.............. 1,000 878,340
AAA Onondaga Cnty PCR
(Bristol-Myers Squibb)
AMT 5.75%, 3/01/24.......... 4,000 3,907,520
AAA Port Auth of NY & NJ
(JFK Int'l Proj)
MBIA
Ser 97-6 AMT
5.75%, 12/01/22............. 16,205 15,662,132
AA- Port Auth of NY & NJ
Cons Rev (95th Ser) AMT
6.13%, 7/15/29.............. 7,775 7,776,244
AAA Port Auth of NY & NJ
Cons Rev (96th Ser)
FGIC AMT
6.60%, 10/01/23............. 10,000 10,574,700
NR Suffolk County IDR
(Nissequogue Cogen Fac)
Ser 98 AMT
5.50%, 1/01/23.............. 3,000 2,630,100
AAA Yonkers IDA
Health Fac (Malotz Pavil proj)
Ser 99
5.65%, 2/01/39.............. 4,500 4,211,595
------------
TOTAL INVESTMENTS - 98.7%
(cost $388,026,129)...... 389,258,924
Other assets less
liabilities - 1.3% ....... 5,064,473
------------
NET ASSETS - 100%........... $394,323,397
============
================================================================================
See footnote summary on page 28.
See Glossary of Terms on page 28.
See notes to financial statements.
20
<PAGE>
CALIFORNIA PORTFOLIO
PORTFOLIO OF INVESTMENTS
October 31, 1999 Alliance Municipal Income Fund
================================================================================
Standard & Principal
Poor's Amount
Ratings (a) (000) Value
=============================================================
MUNICIPAL BONDS - 97.1%
LONG TERM MUNICIPAL BONDS - 92.3%
CALIFORNIA - 84.4%
NR Alameda
Assess Dist
(Harbor Bay Bus Park)
5.00%, 9/02/05.............. $ 1,870 $ 1,820,127
5.50%, 9/02/12.............. 9,830 9,402,100
AAA Assoc Bay Area Gov
MFHR (Civic Cntr Dr Apt)
Ser 99-A AMT
5.88%, 3/01/32.............. 7,705 7,476,624
NR Calabasas Comm
Fac Dist 98-1 Spec Tax
5.75%, 9/01/28.............. 1,000 888,580
A+ California GO
(Veterans Hsg)
Ser 95 AMT
6.40%, 2/01/20.............. 17,400 17,451,504
AAA California GO
(Veterans Hsg)
Ser 95 AMT
6.38%, 2/01/27.............. 4,835 4,838,916
AAA California HFA MFHR
(Home Mtg Rev)
MBIA Ser 91A AMT
7.20%, 2/01/26.............. 3,450 3,583,481
AAA California HFA MFHR
(Home Mtg Rev)
MBIA Ser 91C AMT
7.00%, 8/01/23.............. 1,475 1,520,474
AAA California HFA SFHR
(Home Mtg Rev)
MBIA Ser 97I AMT
5.75%, 2/01/29.............. 14,075 13,460,626
A+ California HFA MFHR
(Multi-Unit Rental Hsg)
Ser 92A AMT
6.50%, 2/01/14.............. 4,865 4,992,706
AAA California HFA SFMR
(Home Mtg Rev)
AMBAC Ser 96H AMT
6.20%, 2/01/27.............. 8,000 8,025,840
AA- California HFA SFMR
(Home Mtg Rev)
Ser 91G AMT
7.05%, 8/01/27.............. 3,030 3,091,509
AA- California HFA SFMR
(Home Mtg Rev)
Ser 94E AMT
6.70%, 8/01/25.............. 7,335 7,515,441
AA- California HFA SFMR
(Home Mtg Rev)
Ser 94H AMT
7.50%, 8/01/25.............. 1,155 1,176,760
AAA California HFA SFMR
(Home Mtg Rev)
Ser 95A-2 AMT
6.45%, 8/01/25.............. 12,160 12,339,968
AA California HFA SFMR
(Home Mtg Rev)
Ser 99A-2 AMT
5.25%, 8/01/26.............. 7,550 6,708,100
AAA California HFA SFMR
(Home Mtg Rev)
Ser R AMT
6.15%, 8/01/27.............. 3,285 3,287,004
AAA California HFA SFMR
(Mtg Rev)
Ser 97M AMT
5.60%, 8/01/29.............. 4,350 4,024,707
A California Poll Ctl Fin Auth
(Tracy Material Recovery)
Ser 99A ACA AMT
5.70%, 8/01/14.............. 3,670 3,605,078
BB- California Poll Ctl Fin Auth
PCR (Keller Canyon/
Browning-Ferris Ind)
Ser 92 AMT
6.88%, 11/01/27............. 5,000 5,005,200
AA- California Poll Ctl Fin Auth
PCR (Pacific Gas & Elec)
Ser 93A AMT
5.88%, 6/01/23.............. 45,345 44,520,174
AA- California Poll Ctl Fin Auth
PCR (Pacific Gas & Elec)
Ser 93B AMT
5.85%, 12/01/23............. 56,000 54,794,320
A+ California Poll Ctl Fin Auth
PCR (San Diego Gas & Elec)
Ser 93A AMT
5.85%, 6/01/21 ............. 32,335 31,865,819
AAA California Poll Ctl Fin Auth
PCR (So Calif Edison)
MBIA Ser 99C AMT
5.55%, 9/01/31.............. 7,950 7,369,730
A+ California Poll Ctl Fin Auth
PCR (So Calif Edison)
Ser 92B AMT
6.40%, 12/01/24............. 36,030 37,816,367
21
<PAGE>
CALIFORNIA PORTFOLIO
PORTFOLIO OF INVESTMENTS (continued) Alliance Municipal Income Fund
================================================================================
Standard & Principal
Poor's Amount
Ratings (a) (000) Value
=============================================================
AAA California Rural MFA SFMR
(Mtg Rev)
GNMA FNMA
Ser 99A AMT
5.40%, 12/01/30............. $ 5,000 $ 4,514,600
NR California Statewide Comm
Dev Auth
(San Diego Space & Science)
Ser 96
7.50%, 12/01/16............. 3,410 3,709,296
NR California Statewide Comm
Dev Auth
(Sonoma Cntry Day Schl)
Ser 99
6.00%, 1/01/29 ............. 14,000 13,036,660
BB+ California Statewide Comm
Dev Auth
(United Airlines)
Ser 97 AMT
5.63%, 10/01/34 ............ 26,000 22,873,500
AAA California Statewide Comm
Dev Auth MFHR
(Santa Paula
VLG Apt) FNMA
Ser 98D AMT
5.43%, 5/01/28.............. 2,090 1,915,004
NR Capistrano Sch Dist
Comm Fac 98-1(Ladera)
Ser 99
5.30%, 9/01/11.............. 1,800 1,669,734
NR Capistrano Sch Dist
Comm Fac 98-2 (Ladera)
Ser 99
5.70%, 9/01/20.............. 9,500 8,568,335
NR Chino Comm
Fac Dist 99-1
(Spectrum West)
6.35%, 9/01/29.............. 3,000 2,929,110
A+ Chula Vista
(San Diego Gas & Elec)
Ser 92A AMT
6.40%, 12/01/27............. 28,240 29,599,191
Aaa Contra Costa Cnty MFHR
(Byron Park Proj)
GNMA Ser 93C AMT
6.40%, 1/20/31 (b).......... 11,860 12,145,470
NR Encinitas Comm
Fac Dist 1
(Encinitas Ranch)
Ser 98A
4.80%, 9/01/03 ............. 1,675 1,653,661
6.00%, 9/01/30 ............. 21,170 19,845,816
NR Encinitas Rec Rev
(Encinitas Ranch Golf
Course)
Ser 96A
7.75%, 9/01/26.............. 10,660 11,478,795
NR Fontana Comm
Fac Dist 11
Ser 99A
6.50%, 9/01/27.............. 2,350 2,254,261
NR Fontana Comm
Fac Dist 3
(Hunters Ridge)
Ser 90A Pre-refunded
8.70%, 10/01/00............. 8,000 8,505,680
AAA Fremont FHA MFHR
(Regency Sq Apts)
Ser 86A AMT
7.75%, 11/01/28 ............ 1,500 1,583,610
AAA Garden Grove MFHR
(Tudor Grove)
GNMA Collat AMT
7.25%, 5/20/32 ............. 7,095 7,077,901
AA- Long Beach
(Harbor Rev)
Ser 93 AMT
5.13%, 5/15/18 ............. 17,325 15,500,158
AAA Los Angeles Cnty Arpt
(Ontario Int'l Arpt)
FGIC Ser 96A AMT
6.00%, 5/15/22 ............. 12,780 12,686,067
NR Los Angeles Cnty Comm
Fac Dist 4 (Calabasas Area)
Ser 92A Pre-refunded
7.65%, 9/01/01.............. 2,500 2,702,350
BB Los Angeles Comm Redev
MFHR (Grand Ctrl Proj)
Ser 93A AMT
5.85%, 12/01/26............. 4,030 3,702,845
AAA Los Angeles Harbor Rev
MBIA Ser 96B AMT
6.20%, 8/01/25.............. 10,000 10,215,200
AA Los Angeles Harbor Rev
Ser 95B AMT
6.63%, 8/01/25.............. 24,000 25,259,760
22
<PAGE>
Alliance Municipal Income Fund
================================================================================
Standard & Principal
Poor's Amount
Ratings (a) (000) Value
=============================================================
AA Los Angeles Harbor Rev
Ser 96B AMT
5.38%, 11/01/23............. $13,250 $ 12,063,065
AAA Mojave Wtr Agy
Imp Dist M
(Morongo Basin Pipeline)
FGIC Ser 96
5.80%, 9/01/22.............. 5,000 4,955,800
AAA North Calif Trans Agy
Elec Rev
(Calif-Oregon Trans)
MBIA Ser 93A
7.34%, 4/29/24.............. 9,250 8,048,147
NR Novato Comm
Fac Dist 94-1
(Hamilton Field)
ETM Ser 95
7.38%, 9/01/25.............. 12,400 13,244,316
AAA Orange Cnty Arpt Rev
(John Wayne Int'l)
MBIA Ser 93 AMT
5.50%, 7/01/18.............. 4,500 4,287,825
NR Orange Cnty Comm
Fac Dist 87-2
(Portola Hills)
Ser 91A Pre-refunded
9.30%, 8/15/01.............. 8,750 9,683,362
NR Orange Cnty Comm
Fac Dist 92-1
(Las Flores/Capistrano USD)
Ser 97 Pre-refunded
7.10%, 9/01/07.............. 3,200 3,597,856
BBB- Orange Cnty Sr Lien
Foothill/Eastern Corridor
ETM Ser 95A
Zero coupon, 1/01/25........ 15,000 3,323,550
Zero coupon, 1/01/27........ 10,000 1,945,000
Zero coupon, 1/01/28........ 10,000 1,831,200
AAA Orange Cnty Sr Lien
San Joaquin Hills
Trans Corridor
ETM Ser 93
Zero coupon, 1/01/17........ 16,000 5,898,720
Zero coupon, 1/01/19........ 20,000 6,442,800
Zero coupon, 1/01/20........ 20,000 5,990,400
Zero coupon, 1/01/21........ 20,000 5,642,600
Zero coupon, 1/01/23........ 35,000 8,781,500
Zero coupon, 1/01/25........ 18,100 4,010,417
7.00%, 1/01/30.............. 13,400 14,696,182
AAA Palm Springs COP
ETM Ser 91B
Zero coupon, 4/15/21........ 35,525 9,628,341
AAA Palm Springs Fin Auth
Arpt Rev
(Palm Springs
Regional Arpt)
MBIA
Ser 92 AMT
6.00%, 1/01/22.............. 6,860 6,851,013
A- Placer Cnty Res Rec
(Wtrn Placer Wst Mgmt)
Ser 94 AMT
6.75%, 7/01/14.............. 5,800 6,019,240
AAA Port of Oakland
MBIA
Ser 92E AMT
6.40%, 11/01/22............. 23,370 24,319,056
6.50%, 11/01/16............. 8,000 8,376,720
BBB+ Port of Oakland Spec Fac
(Mitsui OSK Lines)
Ser 92A AMT
6.80%, 1/01/19.............. 3,700 3,863,466
NR Riverside Cnty Asses
Dist 161
(Winchester Prop)
Ser 94C
10.00%, 9/02/14............. 5,035 5,402,102
NR Roseville Comm
Fac Dist 1
(No Central Roseville)
Ser 99
5.00%, 9/01/04.............. 1,015 1,000,831
5.10%, 9/01/05.............. 2,590 2,542,525
5.80%, 9/01/17.............. 15,250 14,643,507
AAA Sacramento Cnty Arpt
Sys Rev
FGIC Ser 92A AMT
Pre-refunded
6.00%, 7/01/02.............. 7,045 7,401,900
FGIC Ser 92A AMT
6.00%, 7/01/20.............. 4,705 4,708,340
AAA Sacramento Cnty Arpt
Sys Rev
MBIA Ser 96A AMT
5.90%, 7/01/24.............. 5,050 4,965,817
23
<PAGE>
CALIFORNIA PORTFOLIO
PORTFOLIO OF INVESTMENTS (continued) Alliance Municipal Income Fund
================================================================================
Standard & Principal
Poor's Amount
Ratings (a) (000) Value
=============================================================
NR Sacramento Comm
Fac Dist 97-01
(No Natomas Proj)
Ser 97A
6.70%, 9/01/17.............. $ 6,615 $ 6,792,216
6.75%, 9/01/27.............. 9,370 9,620,554
NR Sacramento Con Ctr Hotel
(Sheraton Grand)
Ser 99A
6.25%, 1/01/30.............. 12,000 11,347,440
NR Sacramento City &
Cnty Comm
Fac Dist4
(No Natomas Proj)
Ser 99A
5.70%, 9/01/23.............. 6,215 5,750,304
AAA San Bernardino Cnty
Solid Waste
(Inland Empire)
FSA Ser 96B AMT
6.00%, 8/01/16.............. 2,500 2,538,775
NR San Clemente
Assessment Dist 98-1
Ser 99
6.05%, 9/02/28.............. 4,000 3,806,320
AAA San Diego HFA
MFHR Rental Housing Rev
Ser 98C AMT
5.25%, 1/20/40.............. 6,380 5,673,415
AAA San Francisco City & Cnty
Int'l Arpt
AMBAC Ser 94 II-6 AMT
6.60%, 5/01/24.............. 5,000 5,298,850
AAA San Francisco City & Cnty
Int'l Arpt
FGIC Ser 94 II-5 AMT
6.50%, 5/01/24.............. 11,000 11,544,940
AAA San Francisco City & Cnty
Int'l Arpt
FGIC Ser 96-II AMT
6.25%, 5/01/26.............. 7,000 7,138,110
AAA San Francisco City & Cnty
Int'l Arpt
MBIA Ser 10A AMT
5.70%, 5/01/26 ............. 9,385 8,977,785
AAA San Francisco City & Cnty
Int'l Arpt
MBIA Ser 93 AMT
6.10%, 5/01/13 ............. 2,650 2,746,089
AAA San Francisco City & Cnty
Int'l Arpt
MBIA Ser 93-3 AMT
Pre-refunded
6.20%, 5/01/03.............. 8,920 9,575,977
AAA San Francisco City & Cnty
Int'l Arpt
MBIA Ser 93 AMT
Pre-refunded
6.10%, 5/01/03.............. 4,240 4,538,241
MBIA Ser 93 AMT
6.20%, 5/01/20.............. 5,580 5,715,315
AAA San Jose Arpt Rev
(San Jose Arpt)
FGIC Ser 93 AMT
5.70%, 3/01/18.............. 8,825 8,696,067
NR Santa Margarita Wtr
Fac Dist 99-1
Ser 99
6.25%, 9/01/29.............. 27,545 26,569,632
AAA So Calif HFA
SFMR GNMA/FNMA
Ser 91B AMT
6.90%, 10/01/24............. 1,290 1,323,992
AAA So Calif HFA
SFMR GNMA/FNMA
Ser 92A AMT
6.75%, 9/01/22.............. 1,110 1,130,679
NR Stockton
(West 8th St Proj)
Ser 99
6.30%, 9/02/21.............. 4,200 4,091,766
BBB+ Westminster Redev Agy
MFHR
(Rose Garden Apt)
Ser 93A AMT
6.75%, 8/01/24.............. 4,300 4,369,316
NR Winchester Hills Comm
Fac Dist 98-1
(Winchester Hills)
Ser 98A
6.30%, 9/01/18.............. 4,555 4,437,071
6.38%, 9/01/28.............. 6,700 6,514,343
AAA Yolo Cnty Hsg Auth
MFHR
(Waggener
Ranch Apts)
FHA Ser 91 AMT
7.00%, 10/01/33............. 9,000 9,509,490
------------
901,880,444
------------
24
<PAGE>
Alliance Municipal Income Fund
================================================================================
Standard & Principal
Poor's Amount
Ratings (a) (000) Value
- -------------------------------------------------------------
MASSACHUSETTS - 1.9%
AAA Massachusetts Port Auth
(Boston fuel Corp)
MBIA Ser 97 AMT
6.00%, 7/01/36.............. $20,960 $ 20,353,837
------------
NEW YORK - 2.5%
Aa2 New York Mtg Agy
SFMR (Homeowner Mort)
Ser 84 AMT
5.95%, 4/01/30 (b).......... 28,035 27,116,293
------------
PENNSYLVANIA - 1.2%
AA+ Pennsylvania HFA
SFMR (Home Mtg)
Ser 99-67A
5.90%, 10/01/30............. 13,300 12,806,038
------------
PUERTO RICO - 2.3%
AAA Puerto Rico HFC
SFMR (Home Mtg Rev)
GNMA Ser 98A AMT
5.20%, 12/01/32............. 22,040 19,232,545
BBB- Puerto Rico Port Auth
(American Airlines)
Series 96A AMT
6.25%, 6/01/26.............. 5,475 5,349,896
------------
24,582,441
------------
TOTAL LONG TERM
MUNICIPAL BONDS
(cost $962,786,542)...... 986,739,053
------------
SHORT TERM
MUNICIPAL NOTES (d) - 4.8%
CALIFORNIA - 4.8%
NR Auburn IDR
(Coherent Inc Proj)
Ser 88 AMT VRDN
4.90%, 10/01/08............. 1,600 1,600,000
A-1+ Calif Statewide IDR
(Pasco Proj)
Ser 94B AMT VRDN
3.55%, 12/01/14............. 2,295 2,295,000
A-1+ California IDR
(APM Inc Proj)
Ser 94A AMT VRDN
3.55%, 6/01/04.............. 750 750,000
A-1+ California IDR
(DV Industries Inc Proj)
Ser 94A AMT VRDN
3.55%, 8/01/19.............. 1,450 1,450,000
A-1+ California IDR
(Johnson Proj)
Ser 95E AMT VRDN
3.55%, 11/01/20............. 1,600 1,600,000
A-1+ California IDR
(Merrill Packaging Proj)
Ser 93 AMT VRDN
3.55%, 12/01/18............. 1,510 1,510,000
A-1+ California IDR
(Packaging Innovators Corp)
Ser 94A AMT VRDN
3.55%, 6/01/19.............. 2,675 2,675,000
A-1+ California IDR
(Sunclipse Union City Proj)
Ser 89 VRDN
3.55%, 9/01/04.............. 2,135 2,135,000
A-1+ California IDR
(Watt Four, LLC)
Ser 97 AMT VRDN
3.55%, 5/01/22.............. 2,630 2,630,000
A-1 California Poll Ctl
Fin Auth PCR
(Wadham Energy Proj)
Ser 87A ATM VRDN
3.90%, 11/01/17............. 5,475 5,475,000
A-1 California Poll Ctl
Fin Auth PCR
(Wadham Energy Proj)
Series 87C AMT VRDN
3.90%, 11/01/17............. 4,700 4,700,000
A-1+ California Poll Ctl
Fin Auth
Solid Waste Rev
(Nummi Mfg)
Ser 98A AMT VRDN
3.20%, 4/01/18.............. 9,015 9,015,000
VMIG-1 California Statewide
Dev Auth Indl Dev
(Karcher Property)
Ser 94C AMT VRDN
3.55%, 12/01/19............. 2,000 2,000,000
A-1 Chula Vista
(San Diego Gas & Elec)
Ser 96B AMT VRDN
3.80%, 12/01/21............. 1,500 1,500,000
A-1+ San Bernardino IDR
(NRI Inc Proj)
Ser 89 AMT VRDN
3.55%, 5/01/09.............. 1,425 1,425,000
25
<PAGE>
CALIFORNIA PORTFOLIO
PORTFOLIO OF INVESTMENTS (continued) Alliance Municipal Income Fund
================================================================================
Standard & Principal
Poor's Amount
Ratings (a) (000) Value
- -------------------------------------------------------------
A-2 Santa Cruz Cnty HFA
MFHR
(Paloma Del Mar Apts)
Ser 92A AMT VRDN
5.00%, 6/01/22.............. $ 7,700 $ 7,700,000
A-1+ Santa Cruz Cnty IDR
Wilson Entities Ltd)
Ser 93 AMT VRDN
2.60%, 11/01/18............. 2,505 2,505,000
--------------
TOTAL SHORT TERM
MUNICIPAL NOTES
(cost $50,965,000)....... 50,965,000
--------------
TOTAL INVESTMENTS - 97.1%
(cost $1,013,751,542).... $1,037,704,053
Other assets less
liabilities - 2.9% ....... 30,842,527
--------------
NET ASSETS - 100%........... $1,068,546,580
==============
- --------------------------------------------------------------------------------
See footnote summary on page 28.
See Glossary of Terms on page 28.
See notes to financial statements.
26
<PAGE>
INSURED CALIFORNIA PORTFOLIO
PORTFOLIO OF INVESTMENTS
October 31, 1999 Alliance Municipal Income Fund
================================================================================
Standard & Principal
Poor's Amount
Ratings (a) (000) Value
- -------------------------------------------------------------
CALIFORNIA MUNICIPAL BONDS - 98.4%
AAA Alhambra COP
Assess Dist 91-1 (Police Fac)
AMBAC Ser 92
6.75%, 9/01/23.............. $ 5,000 $ 5,252,750
AAA Brea Pub Fin Auth
Tax Alloc Redev (Proj B)
MBIA Ser 91A
7.00%, 8/01/15.............. 1,470 1,552,202
AAA California HFA MFHR
(Home Mtg Rev)
AMBAC Ser 95A
6.25%, 2/01/37.............. 5,000 5,089,550
AAA Castaic Lake Wtr Agy
(Wtr Sys Proj)
AMBAC Ser 99
Zero coupon, 8/01/28........ 10,445 1,800,823
Zero coupon, 8/01/29........ 10,445 1,693,970
AAA Coronado Comm Dev Proj
Tax Alloc FSA Ser 96
6.00%, 9/01/26.............. 8,700 8,764,293
AAA Encinitas Comm
Fac Dist 1
(Encinitas Ranch)
Ser 95A Pre-refunded
7.38%, 9/01/05.............. 4,600 5,265,850
AAA Fontana Pub Fin Auth
Tax Alloc (No Fontana)
MBIA Ser 93A
5.63%, 9/01/24.............. 8,805 8,501,756
AAA Glendale Hlth Fac Rev
(Glendale Mem Hosp)
CONNIE LEE
ETM Ser 95A
5.60%, 11/15/25............. 2,000 1,910,420
AAA La Mirada Redev Agy
Tax Alloc
(Commercial Redev)
FSA Ser 95B
5.90%, 8/15/24.............. 5,000 5,002,550
Aa Lancaster Redev Agy
MFHR (High Valley Apts)
FHA Ser 96A
6.00%, 6/01/27 (b).......... 4,170 4,177,298
AAA Los Angeles Cnty
Metro Trans Auth
MBIA Ser 93A
5.63%, 7/01/18.............. 3,000 2,947,080
AAA Los Angeles Cnty Comm Redev
Tax Alloc (Bunker Hill Proj)
FSA Ser 93H
5.60%, 12/01/28 ............ 9,000 8,626,230
AAA Los Angeles Cnty Trans
Comm
FGIC Ser 91B
6.50%, 7/01/15 ............. 5,000 5,219,650
AAA Madera Cnty COP
Hosp Rev (Valley Children's
Hosp)
MBIA Ser 95 Pre-refunded
6.13%, 3/15/05.............. 4,000 4,365,600
AAA Mojave Wtr Agy Imp Dist M
(Morongo Basin Pipeline)
FGIC Ser 96
5.80%, 9/01/22.............. 5,000 4,955,800
AAA Orange Cnty
(Saddleback Valley)
FSA Ser 95A
5.65%, 9/01/17.............. 2,000 1,982,100
AAA Orange Cnty Recovery
MBIA Ser 96A
6.00%, 7/01/26 ............. 3,000 3,021,840
AAA Orange Cnty Sr Lien
Foothill/Eastern Corr Agy
ETM Ser 95A
Zero coupon, 1/01/24........ 10,255 2,418,129
Zero coupon, 1/01/30........ 27,935 4,534,409
AAA Rancho Wtr Dist Fin Auth
AMBAC Ser 91 Pre-refunded
9.27%, 9/11/01.............. 3,000 3,354,540
AAA Redding COP
Elec Sys Rev
MBIA Ser 92
9.12%, 7/01/22 (c).......... 2,000 2,235,120
NR Riverside Comm
Fac Dist 90-1
(Highlander Proj)
Ser 91A
8.50%, 9/01/15.............. 2,000 2,136,060
AAA Sacramento Cnty Arpt
Sys Rev
MBIA Ser 96B Pre-refunded
5.75%, 7/01/06 ............. 3,260 3,517,018
AAA Sacramento Muni Util Dist
Elec Rev
MBIA Ser 93E
5.75%, 5/15/22.............. 5,000 4,925,400
27
<PAGE>
INSURED CALIFORNIA PORTFOLIO
PORTFOLIO OF INVESTMENTS (continued) Alliance Municipal Income Fund
================================================================================
Standard & Principal
Poor's Amount
Ratings (a) (000) Value
- -------------------------------------------------------------
AAA San Bernardino Cnty Redev
(Ontario Proj 1)
ETM MBIA Ser 93
5.80%, 8/01/23.............. $10,000 $ 10,238,900
AAA San Bernardino Cnty
Redev Agy
Tax Alloc (Joint Pwr Fin)
FSA Ser 95A
5.75%, 10/01/25............. 5,000 4,907,250
AAA San Francisco City & Cnty
Int'l Arpt
MBIA Ser 93 II-4
6.00%, 5/01/14.............. 4,095 4,241,929
A San Francisco Univ Ed Fac
(Student Hsg Rev)
ACA Ser 99
5.25%, 7/01/32.............. 18,000 15,548,760
AAA Shasta Lake
Elec Sys Rev FSA
Ser 96-2
6.00%, 4/01/16.............. 2,895 2,967,809
AAA So Tahoe Joint Pwr Fin Auth
CAP MAC Ser 95A
5.75%, 10/01/25............. 4,500 4,416,525
AAA Univ of California Regents
(UCLA Med Ctr)
MBIA Ser 94
5.50%, 12/01/20 ............ 1,685 1,606,159
------------
TOTAL INVESTMENTS - 98.4%
(cost $144,341,034)...... 147,177,770
Other assets less
liabilities - 1.6% ....... 2,376,370
------------
NET ASSETS - 100%........... $149,554,140
============
- --------------------------------------------------------------------------------
(a) Unaudited.
(b) Moody's or Fitch Rating (unaudited).
(c) Inverse floater security - security with variable or floating interest
rate that moves in opposite direction of short-term interest rates.
(d) 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.
Glossary of Terms:
ACA American Capital Access Financial Guaranty Corporation
AMBAC American Municipal Bond Assurance Corporation
AMT Alternative Minimum Tax
CAP MAC Capital Markets Assurance Corporation
CONNIE LEE Connie Lee Insurance Company
COP Certificate of Participation
ETM Escrow to Maturity
FGIC Financial Guaranty Insurance Company
FHA Federal Housing Administration
FHLMC Federal Home Loan Mortgage Corp
FNMA Federal National Mortgage Association
FSA Financial Security Assurance Inc.
GNMA Government National Mortgage Association
GO General Obligation
HDA Housing Development Authority
HFA Housing Finance Authority
HFC Home Finance Corporation
IDA Industrial Development Authority
IDR Industrial Development Revenue
MBIA Municipal Bond Investors Assurance
MFA Mortgage Finance Authority
MFHR Multi-Family Housing Revenue
NR Rating not applied for
PCR Pollution Control Revenue
SFMR Single Family Mortgage Revenue
See notes to financial statements.
28
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
October 31, 1999 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: $691,829,454; $217,513,261;
$388,026,129; $1,013,751,542 and
$144,341,034, respectively) ............... $686,465,540 $216,183,122 $389,258,924 $1,037,704,053 $147,177,770
Cash.......................................... -0- 1,181,865 764,430 480,062 194,612
Interest receivable........................... 11,904,945 3,394,581 6,031,324 18,558,567 2,382,941
Receivable for capital stock sold............. 7,036,509 2,667,187 3,593,372 7,958,205 878,775
Receivable for investment securities sold..... 1,127,814 2,679,541 372,908 18,846,840 -0-
------------ ------------ ------------ -------------- ------------
Total assets.................................. 706,534,808 226,106,296 400,020,958 1,083,547,727 150,634,098
------------ ------------ ------------ -------------- ------------
LIABILITIES
Due to custodian.............................. 324,485 -0- -0- -0- -0-
Payable for investment securities purchased... 26,138,253 2,213,961 -0- 3,904,561 -0-
Payable for capital stock redeemed............ 6,669,658 2,540,840 4,780,933 8,526,480 627,406
Dividends payable ............................ 1,033,185 293,747 604,840 1,577,788 180,010
Distribution fee payable...................... 338,108 89,872 196,965 505,413 61,053
Advisory fee payable.......................... 115,597 95,034 49,904 274,151 70,188
Unclaimed dividends........................... 78,007 -0- -0- 90,989 90,989
Accrued expenses.............................. 85,668 37,604 64,919 121,765 50,312
------------ ------------ ------------ -------------- ------------
Total liabilities............................. 34,782,961 5,271,058 5,697,561 15,001,147 1,079,958
------------ ------------ ------------ -------------- ------------
NET ASSETS....................................... $671,751,847 $220,835,238 $394,323,397 $1,068,546,580 $149,554,140
============ ============ ============ ============== ============
COMPOSITION OF NET ASSETS
Capital stock, at par......................... $ 67,108 $ 23,676 $ 41,713 $ 100,964 $ 11,411
Additional paid-in capital.................... 709,373,695 232,448,742 403,373,391 1,072,863,860 150,919,614
Distributions in excess of net investment
income..................................... (1,033,185) (293,747) (604,840) (1,577,788) (67,665)
Accumulated net realized loss on
investment transactions.................... (31,290,937) (10,013,294) (9,719,662) (26,792,967) (4,145,956)
Net unrealized appreciation (depreciation)
of investments............................. (5,364,834) (1,330,139) 1,232,795 23,952,511 2,836,736
------------ ------------ ------------ -------------- ------------
$671,751,847 $220,835,238 $394,323,397 $1,068,546,580 $149,554,140
============ ============ ============ ============== ============
Class A Shares
Net assets.................................... $402,922,170 $168,571,546 $234,835,219 $ 684,403,255 $111,535,451
============ ============ ============ ============== ============
Shares of capital stock outstanding........... 40,229,105 18,065,329 24,839,812 64,660,148 8,510,750
============ ============ ============ ============== ============
Class B Shares
Net assets.................................... $157,090,148 $ 32,585,168 $111,283,440 $ 224,924,226 $ 21,627,704
============ ============ ============ ============== ============
Shares of capital stock outstanding........... 15,707,147 3,498,379 11,774,538 21,256,860 1,650,085
============ ============ ============ ============== ============
Class C Shares
Net assets.................................... $111,739,529 $ 19,678,524 $48,204,738 $ 159,219,099 $ 16,390,985
============ ============ ============ ============== ============
Shares of capital stock outstanding........... 11,171,754 2,111,833 5,098,486 15,047,147 1,250,331
============ ============ ============ ============== ============
</TABLE>
29
<PAGE>
Statements Of Assets And Liabilities (cont.) Alliance Municipal Income Fund
================================================================================
<TABLE>
<CAPTION>
Insured Insured
National National New York California California
------------ ------------ ------------ -------------- ------------
<S> <C> <C> <C> <C> <C>
CALCULATION OF MAXIMUM
OFFERING PRICE
Class A Shares
Net asset value and redemption price
per share.................................. $10.02 $9.33 $9.45 $10.58 $13.11
Sales charge -- 4.25% of public offering
price...................................... .44 .41 .42 .47 .58
------ ----- ----- ------ ------
Maximum offering price........................ $10.46 $9.74 $9.87 $11.05 $13.69
====== ===== ===== ====== ======
Class B Shares
Net asset value and offering price per
share...................................... $10.00 $9.31 $9.45 $10.58 $13.11
====== ===== ===== ====== ======
Class C Shares
Net asset value and offering price per
share...................................... $10.00 $9.32 $9.45 $10.58 $13.11
====== ===== ===== ====== ======
</TABLE>
- --------------------------------------------------------------------------------
See notes to financial statements.
30
<PAGE>
STATEMENTS OF OPERATIONS
Year Ended October 31, 1999 Alliance Municipal Income Fund
================================================================================
<TABLE>
<CAPTION>
Insured Insured
National National New York California California
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Interest......................................... $ 38,407,090 $ 12,715,851 $ 22,293,746 $ 56,332,469 $ 8,969,894
------------ ------------ ------------ ------------ ------------
EXPENSES
Advisory fee .................................... 4,354,805 1,462,721 2,434,115 6,312,842 875,130
Distribution fee - Class A....................... 1,178,257 524,176 660,634 1,903,085 346,078
Distribution fee - Class B....................... 1,893,298 454,104 1,196,573 2,281,628 267,312
Distribution fee - Class C....................... 1,146,865 224,087 495,897 1,475,303 170,241
Transfer agency.................................. 546,831 146,561 288,060 472,038 73,518
Custodian........................................ 178,455 100,070 122,587 213,208 83,765
Registration..................................... 100,181 35,648 13,440 35,747 3,880
Administrative................................... 92,000 92,000 92,000 92,000 92,000
Printing......................................... 86,009 24,616 39,144 93,495 15,918
Audit and legal.................................. 67,713 35,194 48,762 76,996 33,149
Taxes............................................ 51,068 20,948 28,205 66,980 13,324
Directors' fees.................................. 6,151 6,151 6,151 6,151 6,151
Miscellaneous.................................... 26,912 13,652 11,403 32,653 3,737
------------ ------------ ------------ ------------ ------------
Total expenses................................... 9,728,545 3,139,928 5,436,971 13,062,126 1,984,203
------------ ------------ ------------ ------------ ------------
Less: advisory fee waived (see note B)........... (2,961,268) (250,000) (1,849,928) (3,282,677) -0-
------------ ------------ ------------ ------------ ------------
Net expenses..................................... 6,767,277 2,889,928 3,587,043 9,779,449 1,984,203
------------ ------------ ------------ ------------ ------------
Net investment income ........................... 31,639,813 9,825,923 18,706,703 46,553,020 6,985,691
------------ ------------ ------------ ------------ ------------
REALIZED AND UNREALIZED LOSS
ON INVESTMENTS
Net realized loss on investment transactions..... (31,290,937) (10,013,294) (8,256,144) (20,431,904) (3,924,423)
Net change in unrealized appreciation/depreciation
of investments................................ (31,236,200) (12,859,783) (25,161,193) (49,987,983) (9,384,578)
------------ ------------ ------------ ------------ ------------
Net loss on investments.......................... (62,527,137) (22,873,077) (33,417,337) (70,419,887) (13,309,001)
------------ ------------ ------------ ------------ ------------
NET DECREASE IN NET ASSETS FROM
OPERATIONS ......................................... $(30,887,324) $(13,047,154) $(14,710,634) $(23,866,867) $ (6,323,310)
============ ============ ============ ============ ============
</TABLE>
- --------------------------------------------------------------------------------
See notes to financial statements.
31
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS Alliance Municipal Income Fund
================================================================================
<TABLE>
<CAPTION>
National Insured National
----------------------------------------- -----------------------------------------
Year Ended Year Ended Year Ended Year Ended
October 31, 1999 October 31, 1998 October 31, 1999 October 31, 1998
------------------- ------------------- ------------------- -------------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS
Net investment income................ $ 31,639,813 $ 29,641,197 $ 9,825,923 $ 9,694,579
Net realized gain (loss) on
investment transactions........... (31,290,937) 11,054,812 (10,013,294) 6,650,920
Net change in unrealized
appreciation/depreciation
of investments.................... (31,236,200) (660,042) (12,859,783) (168,400)
------------ ------------ ------------ ------------
Net increase (decrease) in net
assets from operations............ (30,887,324) 40,035,967 (13,047,154) 16,177,099
DIVIDENDS AND
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income
Class A........................... (18,867,293) (17,277,432) (7,389,653) (7,331,490)
Class B........................... (7,943,915) (8,200,493) (1,629,052) (1,655,195)
Class C........................... (4,828,605) (4,163,272) (807,218) (707,894)
Distributions in excess of net
investment income
Class A........................... (1,721,256) (1,076,316) (328,139) (882,481)
Class B........................... (724,721) (510,858) (72,338) (199,233)
Class C........................... (440,512) (259,356) (35,845) (85,208)
Net realized gain on investments
Class A........................... (3,219,099) -0- (3,797,073) (3,321,194)
Class B........................... (1,765,332) -0- (1,065,551) (878,080)
Class C........................... (974,028) -0- (476,055) (370,918)
CAPITAL STOCK
TRANSACTIONS
Net increase (decrease).............. 72,852,855 51,860,472 (261,978) 13,768,898
------------ ------------ ------------ ------------
Total increase (decrease)............ 1,480,770 60,408,712 (28,910,056) 14,514,304
NET ASSETS
Beginning of year.................... 670,271,077 609,862,365 249,745,294 235,230,990
------------ ------------ ------------ ------------
End of year.......................... $671,751,847 $670,271,077 $220,835,238 $249,745,294
============ ============ ============ ============
</TABLE>
- --------------------------------------------------------------------------------
See notes to financial statements.
32
<PAGE>
Alliance Municipal Income Fund
================================================================================
<TABLE>
<CAPTION>
New York
-----------------------------------------
Year Ended Year Ended
October 31, 1999 October 31, 1998
------------------- -------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS
Net investment income............................................................ $ 18,706,703 $ 15,989,493
Net realized gain (loss) on investment
transactions.................................................................. (8,256,144) 2,109,069
Net change in unrealized
appreciation of investments................................................... (25,161,193) 4,593,642
------------ ------------
Net increase (decrease) in net assets from
operations.................................................................... (14,710,634) 22,692,204
DIVIDENDS AND
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income
Class A....................................................................... (11,259,004) (9,784,034)
Class B....................................................................... (5,262,517) (4,539,871)
Class C....................................................................... (2,185,182) (1,665,588)
Distributions in excess of net
investment income
Class A....................................................................... (141,491) (329,150)
Class B....................................................................... (66,134) (152,729)
Class C....................................................................... (27,461) (56,033)
CAPITAL STOCK
TRANSACTIONS
Net increase..................................................................... 61,469,975 43,586,484
------------ ------------
Total increase................................................................... 27,817,552 49,751,283
NET ASSETS
Beginning of year................................................................ 366,505,845 316,754,562
------------ ------------
End of year...................................................................... $394,323,397 $366,505,845
============ ============
</TABLE>
- --------------------------------------------------------------------------------
See notes to financial statements.
33
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS (cont.) Alliance Municipal Income Fund
================================================================================
<TABLE>
<CAPTION>
California Insured California
----------------------------------------- -----------------------------------------
Year Ended Year Ended Year Ended Year Ended
October 31, 1999 October 31, 1998 October 31, 1999 October 31, 1998
------------------- ------------------- ------------------- -------------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS
Net investment income................ $ 46,553,020 $ 37,386,117 $ 6,985,691 $ 6,625,535
Net realized gain (loss) on
investment transactions........... (20,431,904) 6,234,155 (3,924,423) 112,114
Net change in unrealized.............
appreciation of investments....... (49,987,983) 16,056,939 (9,384,578) 4,135,620
-------------- ------------ ------------ ------------
Net increase (decrease) in net
assets from operations............ (23,866,867) 59,677,211 (6,323,310) 10,873,269
DIVIDENDS AND
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income
Class A........................... (30,803,448) (24,897,286) (5,199,011) (4,943,558)
Class B........................... (9,555,417) (7,973,937) (1,008,516) (1,139,926)
Class C........................... (6,194,155) (4,514,894) (644,427) (542,051)
Distributions in excess of net
investment income
Class A........................... (1,624,504) (1,151,725) -0- (287,347)
Class B........................... (503,931) (368,867) -0- (66,259)
Class C........................... (326,665) (208,855) -0- (31,507)
CAPITAL STOCK
TRANSACTIONS
Net increase......................... 258,928,720 134,072,838 3,657,065 10,150,493
-------------- ------------ ------------ ------------
Total increase (decrease)............ 186,053,733 154,634,485 (9,518,199) 14,013,114
NET ASSETS
Beginning of year.................... 882,492,847 727,858,362 159,072,339 145,059,225
-------------- ------------ ------------ ------------
End of year.......................... $1,068,546,580 $882,492,847 $149,554,140 $159,072,339
============== ============ ============ ============
</TABLE>
- --------------------------------------------------------------------------------
See notes to financial statements.
34
<PAGE>
NOTES TO FINANCIAL STATEMENTS
October 31, 1999 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 an 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 of the State Portfolios are non-diversified. Each series is
considered to be a separate entity for financial reporting and tax purposes.
Each Portfolio offers three classes of shares: Class A, Class B and Class C
Shares. Class A shares are sold with a front-end sales charge of up to 4.25% for
purchases not exceeding $1,000,000. With respect to purchases of $1,000,000 or
more, Class A shares redeemed within one year of purchase may be subject to a
contingent deferred sales charge of 1%. Class B shares are currently sold with a
contingent deferred sales charge which declines from 3% to zero depending on the
period of time the shares are held. Class B shares will automatically convert to
Class A shares six years after the end of the calendar month of purchase. Class
C shares are 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, except that each class
bears different distribution expenses and has exclusive voting rights with
respect to its distribution plan. The financial statements have been prepared in
conformity with generally accepted accounting principles which require
management to make certain estimates and assumptions that affect the reported
amounts of assets and liabilities in the financial statements and amounts of
income and expenses during the reporting period. Actual results could differ
from those estimates. The following is a summary of significant accounting
policies followed by the Fund.
1. Security Valuation
Portfolio securities traded on a national securities exchange are valued at the
last sale price on such exchange on the day of valuation or, if there was no
sale on such day, the last bid price quoted on such day. If no bid prices are
quoted, then the security is valued at the mean of the bid and asked prices as
obtained on that day from one or more dealers regularly making a market in that
security. Securities traded on the over-the-counter market are valued at the
mean of the closing bid and asked prices provided by two or more dealers
regularly making a market in such securities. U.S. government securities and
other debt securities which mature in 60 days or less are valued at amortized
cost unless this method does not represent fair value. Securities for which
market quotations are not readily available are valued at fair value as
determined in good faith by, or in accordance with procedures approved by, the
Board of Directors. Fixed income securities may be valued on the basis of prices
provided by a pricing service when such prices are believed to reflect the fair
market value of such securities.
2. Taxes
It is the policy of each Portfolio to meet the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute all
of its investment company taxable income and net realized gains, if any, to
shareholders. Therefore, no provisions for federal income or excise taxes are
required.
3. Investment Income and Investment Transactions
Interest income is accrued daily. Investment transactions are accounted for on
the trade date securities are purchased or sold. The Fund amortizes premiums,
accretes original issue discounts and market discounts as adjustments to
interest income. Investment gains and losses are determined on the identified
cost basis.
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. Income and Expenses
All income earned and expenses incurred by the Fund are borne on a pro-rata
basis by each settled class of shares, based on proportionate interest in the
Fund represented by the net assets of such class, except that the Fund's Class B
and Class C shares bear higher distribution and transfer agent fees than Class A
shares.
5. Dividends and Distributions
Dividends and distributions to shareholders are recorded on the ex-dividend
date.
35
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued) Alliance Municipal Income Fund
================================================================================
Income dividends and capital gains distributions are determined in accordance
with federal tax regulations and may differ from those determined in accordance
with generally accepted accounting principles. To the extent these differences
are permanent, such amounts are reclassified within the capital accounts based
on their federal tax basis treatment; temporary differences do not require such
reclassification. During the current fiscal year, certain portfolios had
permanent defferences, primarily due to distributions in excess of net
tax-exempt investment income which resulted in a net decrease in distributions
in excess of net investment income and a corresponding decrease in additional
paid-in capital for those portfolios. This reclassification had no effect on net
assets.
- --------------------------------------------------------------------------------
NOTE B: Advisory Fee and Other Transactions with Affiliates
Under the terms of an investment advisory agreement, the National, New York and
California Portfolios pay Alliance Capital Management L.P. (the "Adviser"), an
advisory fee at an annual rate of up to .625 of 1% of each Portfolio's average
daily net assets. For the Insured National Portfolio, the Agreement provides for
a fee at an annual rate of up to .625 of 1% of the first $200 million, .50 of 1%
of the next $200 million and .45 of 1% in excess of $400 million of its 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 its
average daily net assets. Such fees are accrued daily and paid monthly.
For the year ended October 31, 1999, the Adviser has 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: $2,961,268,
$250,000, $1,849,928 and $3,282,677, respectively. Pursuant to the advisory
agreement, the Fund paid $462,686 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 Transfer Agency Agreement for providing
personnel and facilities to perform transfer agency services for each Portfolio.
Such compensation amounted to: National Portfolio, $416,441; Insured National
Portfolio, $107,214; New York Portfolio, $214,608; California Portfolio,
$358,118 and Insured California Portfolio, $51,600 for the year ended October
31, 1999.
In addition, for the year ended October 31, 1999, the Fund's expenses were
reduced by: National Portfolio $28,827; Insured National Portfolio $7,598; New
York Portfolio $14,955; California Portfolio $24,716 and Insured California
Portfolio, $3,646 under an expense offset arrangement with Alliance Fund
Services, Inc.
Alliance Fund Distributors, Inc. (the "Distributor"), a wholly-owned subsidiary
of the Adviser, serves as the Distributor of the Fund's shares. The Distributor
has advised the Fund that it has recieved front-end sales charges for the
respective Portfolio's Class A shares for the year ended October 31, 1999 were:
National Portfolio, $118,269; Insured National Portfolio, $19,762; New York
Portfolio, $43,246; California Portfolio, $216,070; Insured California, $29,686.
The amount of contingent deferred sales charge imposed upon redemptions by
shareholders of Class A shares were: National Portfolio, $16,578; New York,
$18,246; California Portfolio, $64,334; Insured National, $11,949; Insured
California Portfolio, $5,819. The amount of contingent deferred sales charges
imposed upon redemptions by shareholders of Class B shares were: National
Portfolio, $212,153; Insured National Portfolio, $67,540; New York Portfolio,
$122,619; California Portfolio, $258,101; and Insured California Portfolio,
$16,686. The amount of contingent deferred sales charges imposed upon
redemptions by shareholders of Class C shares were: National Portfolio, $28,468;
Insured National Portfolio, $7,642; New York Portfolio, $34,467; California
Portfolio, $66,876; and Insured California, $7,659.
36
<PAGE>
Alliance Municipal Income Fund
================================================================================
NOTE C: Distribution Services Agreement
Each Portfolio has adopted a Distribution Services Agreement (the "Agreement")
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the
Agreement, each Portfolio pays distribution and servicing fees 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 both Class B and Class C shares. The
fees are accrued daily and paid monthly. The Agreement provides that the
Distributor will use such payments in their entirety for distribution assistance
and promotional activities. The Distributor has advised the Fund that it has
incurred expenses in excess of the distribution costs reimbursed by each
Portfolio as follows:
Portfolio Class B Class C
- --------- ---------- ----------
National...................... $4,329,603 $3,541,158
Insured National.............. 2,447,094 1,193,429
New York...................... 4,500,004 1,798,282
California.................... 7,426,911 3,575,665
Insured California............ 1,854,964 909,433
Such costs may be recovered from each Portfolio in future periods so long as the
Agreement is in effect. In accordance with the Agreement, there is no provision
for recovery of unreimbursed distribution costs incurred by the Distributor
beyond the current fiscal year for Class A shares. The Agreement also provides
that the Adviser may use its own resources to finance the distribution of each
Portfolio's shares.
- --------------------------------------------------------------------------------
NOTE D: Investment Transactions
Purchases and sales of investment securities (excluding short-term investments
and U.S. government securities) for the year ended October 31, 1999 were as
follows:
Portfolio Purchases Sales
- --------- -------------- --------------
National................. $2,476,271,975 $2,308,441,468
Insured National......... 688,826,837 629,014,936
New York................. 602,412,891 487,712,313
California............... 1,095,312,691 772,441,188
Insured California....... 176,906,398 145,250,127
There were no purchases or sales of U.S. government and government agency
obligations for the year ended October 31, 1999.
At October 31, 1999, the cost of investments for federal income tax purposes,
gross unrealized appreciation, gross unrealized depreciation and net unrealized
appreciation/depreciation of investments for each Portfolio were as follows:
<TABLE>
<CAPTION>
Net
Gross Unrealized Unrealized
------------------------------------------ Appreciation
Tax Cost Appreciation (Depreciation) (Depreciation)
------------------- ------------------- ------------------- -------------------
<S> <C> <C> <C> <C>
National................................ $ 695,390,013 $ 5,080,216 $(14,004,689) $(8,924,473)
Insured National........................ 218,640,832 1,674,986 (4,132,696) (2,457,710)
New York................................ 389,027,190 6,207,844 (5,976,110) 231,734
California.............................. 1,019,713,685 31,542,507 (13,552,139) 17,990,368
Insured California...................... 145,245,094 3,424,380 (1,491,704) 1,932,676
</TABLE>
NOTE E: Taxes
For Federal income tax purposes at October 31, 1999, the Fund had capital loss
carryforwards for the following Portfolios: $27,730,378 expiring in 2007 for the
National Portfolio; $8,885,723 expiring in 2007 for the Insured National
Portfolio; $1,444,926 expiring in 2003 and $7,273,675 expiring in 2007 for the
New York Portfolio; $4,309,001 expiring in 2003, $2,052,062 expiring in 2004 and
$14,469,769 expiring in 2007 for the California Portfolio; $221,533 expiring in
2002 and $3,020,363 expiring in 2007 for the Insured California Portfolio.
37
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued) Alliance Municipal Income Fund
================================================================================
NOTE F: Capital Stock
There are 3,000,000,000 shares of $.001 par value capital stock authorized,
divided into three classes, designated Class A, Class B and Class C shares. Each
class consists of 200,000,000 authorized shares. Transactions in capital stock
were as follows:
<TABLE>
<CAPTION>
National Portfolio
--------------------------------------- -----------------------------------------
SHARES AMOUNT
--------------------------------------- -----------------------------------------
Year Ended Year Ended Year Ended Year Ended
October 31, October 31, October 31, October 31,
1999 1998 1999 1998
------------------- ------------------- ------------------- -------------------
<S> <C> <C> <C> <C>
Class A
Shares sold............................. 8,506,866 7,594,850 $ 91,581,471 $ 83,693,512
Shares issued in reinvestment of
dividends and distributions.......... 1,335,920 958,894 14,384,705 10,582,438
Shares converted from Class B........... 5,270,047 899,961 56,148,358 9,934,458
Shares redeemed......................... (7,742,184) (6,731,237) (82,450,186) (74,127,641)
---------- ---------- ------------ ------------
Net increase............................ 7,370,649 2,722,468 $ 79,664,348 $ 30,082,767
========== ========== ============ ============
Class B
Shares sold............................. 5,776,146 4,004,496 $ 62,149,399 $ 44,261,765
Shares issued in reinvestment of
dividends and distributions.......... 652,921 532,635 7,053,644 5,876,000
Shares converted to Class A............. (5,270,047) (899,961) (56,148,358) (9,934,458)
Shares redeemed......................... (3,274,019) (3,238,840) (35,084,961) (35,717,016)
---------- ---------- ------------ ------------
Net increase (decrease)................. (2,114,999) 398,330 $(22,030,276) $ 4,486,291
========== ========== ============ ============
Class C
Shares sold............................. 3,122,435 2,677,765 $ 33,601,967 $ 29,579,521
Shares issued in reinvestment of
dividends and distributions.......... 492,277 392,655 5,318,617 4,329,223
Shares redeemed......................... (2,217,831) (1,506,893) (23,701,801) (16,617,330)
---------- ---------- ------------ ------------
Net increase............................ 1,396,881 1,563,527 $ 15,218,783 $ 17,291,414
========== ========== ============ ============
</TABLE>
<TABLE>
<CAPTION>
Insured National Portfolio
--------------------------------------- -----------------------------------------
SHARES AMOUNT
--------------------------------------- -----------------------------------------
Year Ended Year Ended Year Ended Year Ended
October 31, October 31, October 31, October 31,
1999 1998 1999 1998
------------------- ------------------- ------------------- -------------------
<S> <C> <C> <C> <C>
Class A
Shares sold............................. 1,460,910 1,642,188 $ 14,626,498 $ 17,152,883
Shares issued in reinvestment of
dividends and distributions.......... 735,233 702,615 7,458,642 7,318,564
Shares converted from Class B........... 1,461,900 111,070 14,407,154 1,163,290
Shares redeemed......................... (2,601,120) (1,706,766) (26,087,146) (17,848,065)
---------- ---------- ------------ ------------
Net increase............................ 1,056,923 749,107 $ 10,405,148 $ 7,786,672
========== ========== ============ ============
</TABLE>
38
<PAGE>
Alliance Municipal Income Fund
================================================================================
<TABLE>
<CAPTION>
Insured National Portfolio (continued)
---------------------------- ----------------------------
Shares Amount
---------------------------- ----------------------------
Year Ended Year Ended Year Ended Year Ended
October 31, October 31, October 31, October 31,
1999 1998 1999 1998
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Class B
Shares sold .................... 1,130,671 1,034,758 $ 11,487,371 $ 10,829,842
Shares issued in reinvestment of
dividends and distributions . 203,847 190,011 2,072,901 1,977,801
Shares converted to Class A .... (1,461,900) (111,070) (14,407,154) (1,163,290)
Shares redeemed ................ (1,010,373) (817,274) (10,137,552) (8,543,696)
------------ ------------ ------------ ------------
Net increase (decrease) ........ (1,137,755) 296,425 $(10,984,434) $ 3,100,657
============ ============ ============ ============
Class C
Shares sold .................... 532,822 402,996 $ 5,412,387 $ 4,220,683
Shares issued in reinvestment of
dividends and distributions . 118,257 115,304 1,203,366 1,200,682
Shares redeemed ................ (630,452) (243,043) (6,298,445) (2,539,796)
------------ ------------ ------------ ------------
Net increase ................... 20,627 275,257 $ 317,308 $ 2,881,569
============ ============ ============ ============
<CAPTION>
New York Portfolio
---------------------------- ----------------------------
Shares Amount
---------------------------- ----------------------------
Year Ended Year Ended Year Ended Year Ended
October 31, October 31, October 31, October 31,
1999 1998 1999 1998
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Class A
Shares sold .................... 6,028,955 4,204,543 $ 59,952,589 $ 43,008,797
Shares issued in reinvestment of
dividends and distributions . 692,717 610,190 6,951,513 6,244,173
Shares converted from Class B .. 2,262,106 70,171 22,454,536 719,730
Shares redeemed ................ (4,256,586) (2,761,081) (42,415,433) (28,246,100)
------------ ------------ ------------ ------------
Net increase ................... 4,727,192 2,123,823 $ 46,943,205 $ 21,726,600
============ ============ ============ ============
Class B
Shares sold .................... 4,452,853 2,973,222 $ 44,805,273 $ 30,435,248
Shares issued in reinvestment of
dividends and distributions . 369,247 336,709 3,709,916 3,444,476
Shares converted to Class A .... (2,262,106) (70,171) (22,454,536) (719,730)
Shares redeemed ................ (1,932,939) (1,605,906) (19,340,640) (16,421,860)
------------ ------------ ------------ ------------
Net increase ................... 627,055 1,633,854 $ 6,720,013 $ 16,738,134
============ ============ ============ ============
</TABLE>
39
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued) Alliance Municipal Income Fund
================================================================================
<TABLE>
<CAPTION>
New York Portfolio (continued)
------------------------------ ------------------------------
Shares Amount
------------------------------ ------------------------------
Year Ended Year Ended Year Ended Year Ended
October 31, October 31, October 31, October 31,
1999 1998 1999 1998
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Class C
Shares sold .................... 1,772,374 1,797,741 $ 18,029,331 $ 18,408,602
Shares issued in reinvestment of
dividends and distributions . 179,795 185,639 1,811,071 1,897,746
Shares redeemed ................ (1,199,740) (1,486,617) (12,033,645) (15,184,598)
------------- ------------- ------------- -------------
Net increase ................... 752,429 496,763 $ 7,806,757 $ 5,121,750
============= ============= ============= =============
<CAPTION>
California Portfolio
------------------------------ ------------------------------
Shares Amount
------------------------------ ------------------------------
Year Ended Year Ended Year Ended Year Ended
October 31, October 31, October 31, October 31,
1999 1998 1999 1998
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Class A
Shares sold .................... 19,207,355 10,042,110 $ 214,251,881 $ 112,726,624
Shares issued in reinvestment of
dividends and distributions . 1,409,134 1,185,228 15,636,654 13,289,149
Shares converted from Class B .. 4,408,895 114,030 48,518,625 1,283,090
Shares redeemed ................ (8,938,147) (5,372,737) (98,544,498) (60,189,528)
------------- ------------- ------------- -------------
Net increase ................... 16,087,237 5,968,631 $ 179,862,662 $ 67,109,335
============= ============= ============= =============
Class B
Shares sold .................... 9,703,601 5,018,694 $ 107,880,190 $ 56,293,953
Shares issued in reinvestment of
dividends and distributions . 540,254 488,172 6,008,232 5,472,448
Shares converted to Class A .... (4,408,895) (114,030) (48,518,625) (1,283,090)
Shares redeemed ................ (2,905,493) (2,159,593) (32,206,885) (24,224,615)
------------- ------------- ------------- -------------
Net increase ................... 2,929,467 3,233,243 $ 33,162,912 $ 36,258,696
============= ============= ============= =============
Class C
Shares sold .................... 6,358,649 3,787,068 $ 70,880,631 $ 42,523,071
Shares issued in reinvestment of
dividends and distributions . 479,445 411,862 5,335,024 4,614,537
Shares redeemed ................ (2,740,920) (1,466,724) (30,312,509) (16,432,801)
------------- ------------- ------------- -------------
Net increase ................... 4,097,174 2,732,206 $ 45,903,146 $ 30,704,807
============= ============= ============= =============
</TABLE>
40
<PAGE>
Alliance Municipal Income Fund
================================================================================
<TABLE>
<CAPTION>
Insured California Portfolio
---------------------------- ----------------------------
Shares Amount
---------------------------- ----------------------------
Year Ended Year Ended Year Ended Year Ended
October 31, October 31, October 31, October 31,
1999 1998 1999 1998
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Class A
Shares sold .................... 1,336,511 1,208,098 $ 18,648,962 $ 17,010,840
Shares issued in reinvestment of
dividends and distributions . 175,146 183,708 2,430,609 2,585,734
Shares converted from Class B .. 395,355 13,557 5,457,034 192,508
Shares redeemed ................ (1,334,892) (930,895) (18,418,230) (13,086,251)
------------ ------------ ------------ ------------
Net increase ................... 572,120 474,468 $ 8,118,375 $ 6,702,831
============ ============ ============ ============
Class B
Shares sold .................... 395,432 439,858 $ 5,504,873 $ 6,185,442
Shares issued in reinvestment of
dividends and distributions . 53,821 53,385 752,744 751,134
Shares converted to Class A .... (395,355) (13,557) (5,457,034) (192,508)
Shares redeemed ................ (506,189) (392,027) (7,072,654) (5,515,049)
------------ ------------ ------------ ------------
Net increase (decrease) ........ (452,291) 87,659 $ (6,272,071) $ 1,229,019
============ ============ ============ ============
Class C
Shares sold .................... 369,407 251,196 $ 5,117,248 $ 3,555,671
Shares issued in reinvestment of
dividends ................... 39,344 38,215 547,906 537,625
Shares redeemed ................ (282,163) (133,253) (3,854,393) (1,874,653)
------------ ------------ ------------ ------------
Net increase ................... 126,588 156,158 $ 1,810,761 $ 2,218,643
============ ============ ============ ============
</TABLE>
- --------------------------------------------------------------------------------
NOTE G: Bank Borrowing
A number of open-end mutual funds managed by the Adviser, including the Fund,
participate in a $750 million revolving credit facility (the "Facility")
intended to provide short-term financing if necessary, subject to certain
restrictions, in connection with abnormal redemption activity. Commitment fees
related to the Facility are paid by the participating funds and are included in
miscellaneous expenses in the statement of operations. The Fund did not utilize
the Facility during the year ended October 31, 1999.
41
<PAGE>
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,
----------------------------------------------------------------
1999 1998 1997 1996 1995
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year ................... $ 11.09 $ 10.94 $ 10.51 $ 10.45 $ 9.41
-------- -------- -------- -------- --------
Income from Investment Operations
Net investment income (a) ............................ .52(b) .55(b) .57(b) .58 .58
Net realized and unrealized gain (loss) on investment
transactions ...................................... (.93) .18 .44 .06 1.04
-------- -------- -------- -------- --------
Net increase (decrease) in net asset value from
operations ........................................ (.41) .73 1.01 .64 1.62
-------- -------- -------- -------- --------
Less: Dividends and Distributions
Dividends from net investment income ................. (.52) (.55) (.58) (.58) (.58)
Distributions in excess of net investment income ..... (.04) (.03) -0- -0- -0-
Distributions from net realized gains ................ (.10) -0- -0- -0- -0-
-------- -------- -------- -------- --------
Total dividends and distributions .................... (.66) (.58) (.58) (.58) (.58)
-------- -------- -------- -------- --------
Net asset value, end of year ......................... $ 10.02 $ 11.09 $ 10.94 $ 10.51 $ 10.45
======== ======== ======== ======== ========
Total Return
Total investment return based on net asset value (c) . (3.93)% 6.82% 9.88% 6.32% 17.73%
Ratios/Supplemental Data
Net assets, end of year (000's omitted) .............. $402,922 $364,429 $329,540 $325,288 $338,311
Ratios to average net assets of:
Expenses, net of fee waivers ...................... .66% .66% .69% .69% .71%
Expenses, before fee waivers ...................... 1.12% 1.08% 1.11% 1.10% 1.09%
Net investment income, net of fee waivers ......... 4.86% 4.98% 5.40% 5.55% 5.84%
Portfolio turnover rate .............................. 393% 56% 72% 137% 118%
</TABLE>
- --------------------------------------------------------------------------------
See footnote summary on page 56.
42
<PAGE>
Alliance Municipal Income Fund
================================================================================
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Year
<TABLE>
<CAPTION>
National Portfolio
------------------------------------------------------------------
Class B
------------------------------------------------------------------
Year Ended October 31,
------------------------------------------------------------------
1999 1998 1997 1996 1995
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year ................... $ 11.08 $ 10.94 $ 10.51 $ 10.45 $ 9.41
-------- -------- -------- -------- --------
Income From Investment Operations
Net investment income (a) ............................ .44(b) .46(b) .50(b) .51 .51
Net realized and unrealized gain (loss) on investment
transactions ...................................... (.93) .19 .44 .06 1.04
-------- -------- -------- -------- --------
Net increase (decrease) in net asset value from
operations ........................................ (.49) .65 .94 .57 1.55
-------- -------- -------- -------- --------
Less: Dividends and Distributions
Dividends from net investment income ................. (.44) (.46) (.50) (.51) (.51)
Distributions in excess of net investment income ..... (.05) (.05) (.01) -0- -0-
Distributions from net realized gains ................ (.10) -0- -0- -0- -0-
-------- -------- -------- -------- --------
Total dividends and distributions .................... (.59) (.51) (.51) (.51) (.51)
-------- -------- -------- -------- --------
Net asset value, end of year ......................... $ 10.00 $ 11.08 $ 10.94 $ 10.51 $ 10.45
======== ======== ======== ======== ========
Total Return
Total investment return based on net asset value (c) . (4.65)% 6.05% 9.16% 5.61% 16.91%
Ratios/Supplemental Data
Net assets, end of year (000's omitted) .............. $157,090 $197,517 $190,530 $214,994 $252,357
Ratios to average net assets of:
Expenses, net of fee waivers ...................... 1.37% 1.37% 1.40% 1.40% 1.42%
Expenses, before fee waivers ...................... 1.74% 1.79% 1.79% 1.81% 1.80%
Net investment income, net of fee waivers ......... 4.12% 4.28% 4.69% 4.85% 5.13%
Portfolio turnover rate .............................. 393% 56% 72% 137% 118%
</TABLE>
- --------------------------------------------------------------------------------
See footnote summary on page 56.
43
<PAGE>
FINANCIAL HIGHLIGHTS (continued) Alliance Municipal Income Fund
================================================================================
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Year
<TABLE>
<CAPTION>
National Portfolio
----------------------------------------------------------------
Class C
----------------------------------------------------------------
Year Ended October 31,
----------------------------------------------------------------
1999 1998 1997 1996 1995
-------- -------- ------- ------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year ................... $ 11.08 $ 10.94 $ 10.51 $ 10.45 $ 9.41
-------- -------- ------- ------- --------
Income From Investment Operations
Net investment income (a) ............................ .45(b) .47(b) .50(b) .51 .51
Net realized and unrealized gain (loss) on investment
transactions ...................................... (.94) .18 .44 .06 1.04
-------- -------- ------- ------- --------
Net increase (decrease) in net asset value from
operations ........................................ (.49) .65 .94 .57 1.55
-------- -------- ------- ------- --------
Less: Dividends and Distributions
Dividends from net investment income ................. (.45) (.47) (.50) (.51) (.51)
Distributions in excess of net investment income ..... (.04) (.04) (.01) -0- -0-
Distributions from net realized gains ................ (.10) -0- -0- -0- -0-
-------- -------- ------- ------- --------
Total dividends and distributions .................... (.59) (.51) (.51) (.51) (.51)
-------- -------- ------- ------- --------
Net asset value, end of year ......................... $ 10.00 $ 11.08 $ 10.94 $ 10.51 $ 10.45
======== ======== ======= ======= ========
Total Return
Total investment return based on net asset value (c) . (4.65)% 6.06% 9.18% 5.62% 16.93%
Ratios/Supplemental Data
Net assets, end of year (000's omitted) .............. $111,740 $108,325 $89,792 $96,134 $108,068
Ratios to average net assets of:
Expenses, net of fee waivers ...................... 1.36% 1.36% 1.39% 1.39% 1.41%
Expenses, before fee waivers ...................... 1.79% 1.82% 1.81% 1.80% 1.78%
Net investment income, net of fee waivers ......... 4.15% 4.28% 4.70% 4.85% 5.16%
Portfolio turnover rate .............................. 393% 56% 72% 137% 118%
</TABLE>
- --------------------------------------------------------------------------------
See footnote summary on page 56.
44
<PAGE>
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,
------------------------------------------------------------------
1999 1998 1997 1996 1995
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year ................... $ 10.52 $ 10.49 $ 10.28 $ 10.07 $ 8.96
-------- -------- -------- -------- --------
Income From Investment Operations
Net investment income (a) ............................ .43(b) .44(b) .50(b) .51 .51
Net realized and unrealized gain (loss) on investment
transactions ...................................... (.95) .28 .37 .22 1.13
-------- -------- -------- -------- --------
Net increase (decrease) in net asset value from
operations ........................................ (.52) .72 .87 .73 1.64
-------- -------- -------- -------- --------
Less: Dividends and Distributions
Dividends from net investment income ................. (.43) (.44) (.50) (.52) (.51)
Distributions in excess of net investment income ..... (.02) (.05) (.02) -0- (.02)
Distributions from net realized gains ................ (.22) (.20) (.14) -0- -0-
-------- -------- -------- -------- --------
Total dividends and distributions .................... (.67) (.69) (.66) (.52) (.53)
-------- -------- -------- -------- --------
Net asset value, end of year ......................... $ 9.33 $ 10.52 $ 10.49 $ 10.28 $ 10.07
======== ======== ======== ======== ========
Total Return
Total investment return based on net asset value (c) . (5.28)% 7.15% 8.77% 7.43% 18.72%
Ratios/Supplemental Data
Net assets, end of year (000's omitted) .............. $168,572 $179,003 $170,631 $160,425 $165,548
Ratios to average net assets of:
Expenses, net of fee waivers ...................... .99% 1.00% 1.02% 1.02% 1.01%
Expenses, before fee waivers ...................... 1.10% 1.12% 1.15% 1.12% 1.12%
Net investment income, net of fee waivers ......... 4.25% 4.21% 4.85% 5.04% 5.37%
Portfolio turnover rate .............................. 322% 27% 98% 157% 171%
</TABLE>
- --------------------------------------------------------------------------------
See footnote summary on page 56.
45
<PAGE>
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 B
-------------------------------------------------------------
Year Ended October 31,
-------------------------------------------------------------
1999 1998 1997 1996 1995
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year ................... $ 10.52 $ 10.49 $ 10.28 $ 10.07 $ 8.96
------- ------- ------- ------- -------
Income From Investment Operations
Net investment income (a) ............................ .36(b) .37(b) .42(b) .44 .45
Net realized and unrealized gain (loss) on investment
transactions ...................................... (.97) .28 .38 .22 1.12
------- ------- ------- ------- -------
Net increase (decrease) in net asset value from
operations ........................................ (.61) .65 .80 .66 1.57
------- ------- ------- ------- -------
Less: Dividends and Distributions
Dividends from net investment income ................. (.36) (.37) (.42) (.45) (.45)
Distributions in excess of net investment income ..... (.02) (.05) (.03) -0- (.01)
Distributions from net realized gains ................ (.22) (.20) (.14) -0- -0-
------- ------- ------- ------- -------
Total dividends and distributions .................... (.60) (.62) (.59) (.45) (.46)
------- ------- ------- ------- -------
Net asset value, end of year ......................... $ 9.31 $ 10.52 $ 10.49 $ 10.28 $ 10.07
======= ======= ======= ======= =======
Total Return
Total investment return based on net asset value (c) . (6.10)% 6.48% 8.07% 6.74% 17.91%
Ratios/Supplemental Data
Net assets, end of year (000's omitted) .............. $32,585 $48,751 $45,542 $52,156 $58,990
Ratios to average net assets of:
Expenses, net of fee waivers ...................... 1.70% 1.71% 1.75% 1.73% 1.72%
Expenses, before fee waivers ...................... 1.79% 1.87% 1.86% 1.83% 1.83%
Net investment income, net of fee waivers ......... 3.52% 3.49% 4.12% 4.32% 4.65%
Portfolio turnover rate .............................. 322% 27% 98% 157% 171%
</TABLE>
- --------------------------------------------------------------------------------
See footnote summary on page 56.
46
<PAGE>
Alliance Municipal Income Fund
================================================================================
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Year
<TABLE>
<CAPTION>
Insured National Portfolio
-------------------------------------------------------------
Class C
-------------------------------------------------------------
Year Ended October 31,
-------------------------------------------------------------
1999 1998 1997 1996 1995
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year ................... $ 10.52 $ 10.49 $ 10.28 $ 10.07 $ 8.96
------- ------- ------- ------- -------
Income From Investment Operations
Net investment income (a) ............................ .36(b) .37(b) .42(b) .44 .45
Net realized and unrealized gain (loss) on investment
transactions ...................................... (.96) .28 .38 .22 1.12
------- ------- ------- ------- -------
Net increase (decrease) in net asset value from
operations ........................................ (.60) .65 .80 .66 1.57
------- ------- ------- ------- -------
Less: Dividends and Distributions
Dividends from net investment income ................. (.36) (.37) (.42) (.45) (.45)
Distributions in excess of net investment income ..... (.02) (.05) (.03) -0- (.01)
Distributions from net realized gains ................ (.22) (.20) (.14) -0- -0-
------- ------- ------- ------- -------
Total dividends and distributions .................... (.60) (.62) (.59) (.45) (.46)
------- ------- ------- ------- -------
Net asset value, end of year ......................... $ 9.32 $ 10.52 $ 10.49 $ 10.28 $ 10.07
======= ======= ======= ======= =======
Total Return
Total investment return based on net asset value (c) . (6.00)% 6.48% 8.07% 6.74% 17.91%
Ratios/Supplemental Data
Net assets, end of year (000's omitted) .............. $19,679 $21,992 $19,057 $22,763 $22,265
Ratios to average net assets of:
Expenses, net of fee waivers ...................... 1.70% 1.70% 1.72% 1.72% 1.71%
Expenses, before fee waivers ...................... 1.80% 1.83% 1.84% 1.82% 1.82%
Net investment income, net of fee waivers ......... 3.55% 3.51% 4.15% 4.34% 4.69%
Portfolio turnover rate .............................. 322% 27% 98% 157% 171%
</TABLE>
- --------------------------------------------------------------------------------
See footnote summary on page 56.
47
<PAGE>
FINANCIAL HIGHLIGHTS (continued) Alliance Municipal Income Fund
================================================================================
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Year
<TABLE>
<CAPTION>
New York Portfolio
------------------------------------------------------------------
Class A
------------------------------------------------------------------
Year Ended October 31,
------------------------------------------------------------------
1999 1998 1997 1996 1995
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year ................... $ 10.29 $ 10.10 $ 9.66 $ 9.62 $ 8.72
-------- -------- -------- -------- --------
Income From Investment Operations
Net investment income (a) ............................ .51(b) .51(b) .53(b) .55 .55
Net realized and unrealized gain (loss) on investment
transactions ...................................... (.83) .21 .46 .04 .90
-------- -------- -------- -------- --------
Net increase (decrease) in net asset value from
operations ........................................ (.32) .72 .99 .59 1.45
-------- -------- -------- -------- --------
Less: Dividends and Distributions
Dividends from net investment income ................. (.51) (.51) (.54) (.55) (.55)
Distributions in excess of net investment income ..... (.01) (.02) (.01) -0- -0-
-------- -------- -------- -------- --------
Total dividends and distributions .................... (.52) (.53) (.55) (.55) (.55)
-------- -------- -------- -------- --------
Net asset value, end of year ......................... $ 9.45 $ 10.29 $ 10.10 $ 9.66 $ 9.62
======== ======== ======== ======== ========
Total Return
Total investment return based on net asset value (c) . (3.27)% 7.31% 10.52% 6.30% 17.10%
Ratios/Supplemental Data
Net assets, end of year (000's omitted) .............. $234,835 $207,031 $181,745 $179,452 $183,987
Ratios to average net assets of:
Expenses, net of fee waivers ...................... .61% .61% .65% .64% .75%
Expenses, before fee waivers ...................... 1.11% 1.08% 1.12% 1.11% 1.12%
Net investment income, net of fee waivers ......... 5.12% 5.04% 5.45% 5.66% 5.93%
Portfolio turnover rate ........................... 134% 18% 34% 64% 69%
</TABLE>
- --------------------------------------------------------------------------------
See footnote summary on page 56.
48
<PAGE>
Alliance Municipal Income Fund
================================================================================
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Year
<TABLE>
<CAPTION>
New York Portfolio
---------------------------------------------------------------
Class B
---------------------------------------------------------------
Year Ended October 31,
---------------------------------------------------------------
1999 1998 1997 1996 1995
-------- -------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year ................... $ 10.29 $ 10.10 $ 9.66 $ 9.62 $ 8.72
-------- -------- ------- ------- -------
Income From Investment Operations
Net investment income (a) ......................... .44(b) .44(b) .46(b) .48 .48
Net realized and unrealized gain (loss) on investment
transactions ...................................... (.83) .21 .46 .04 .90
-------- -------- ------- ------- -------
Net increase (decrease) in net asset value from
operations ........................................ (.39) .65 .92 .52 1.38
-------- -------- ------- ------- -------
Less: Dividends and Distributions
Dividends from net investment income ................. (.44) (.44) (.47) (.48) (.48)
Distributions in excess of net investment income ..... (.01) (.02) (. 01) -0- -0-
-------- -------- ------- ------- -------
Total dividends and distributions .................... (.45) (.46) (.48) (.48) (.48)
-------- -------- ------- ------- -------
Net asset value, end of year ......................... $ 9.45 $ 10.29 $ 10.10 $ 9.66 $ 9.62
======== ======== ======= ======= =======
Total Return
Total investment return based on net asset value (c) . (3.96)% 6.57% 9.72% 5.52% 16.19%
Ratios/Supplemental Data
Net assets, end of year (000's omitted) .............. $111,283 $114,739 $96,119 $96,959 $94,400
Ratios to average net assets of:
Expenses, net of fee waivers ...................... 1.32% 1.32% 1.35% 1.35% 1.45%
Expenses, before fee waivers ...................... 1.76% 1.80% 1.84% 1.82% 1.83%
Net investment income, net of fee waivers ......... 4.38% 4.34% 4.75% 4.95% 5.21%
Portfolio turnover rate .............................. 134% 18% 34% 64% 69%
</TABLE>
- --------------------------------------------------------------------------------
See footnote summary on page 56.
49
<PAGE>
FINANCIAL HIGHLIGHTS (continued) Alliance Municipal Income Fund
================================================================================
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Year
<TABLE>
<CAPTION>
New York Portfolio
-------------------------------------------------------------
Class C
-------------------------------------------------------------
Year Ended October 31,
-------------------------------------------------------------
1999 1998 1997 1996 1995
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year ................... $ 10.29 $ 10.10 $ 9.66 $ 9.62 $ 8.72
------- ------- ------- ------- -------
Income From Investment Operations
Net investment income (a) ............................ .44(b) .44(b) .46(b) .48 .48
Net realized and unrealized gain (loss) on investment
transactions ...................................... (.83) .21 .46 .04 .90
------- ------- ------- ------- -------
Net increase (decrease) in net asset value from
operations ........................................ (.39) .65 .92 .52 1.38
------- ------- ------- ------- -------
Less: Dividends and Distributions
Dividends from net investment income ................. (.44) (.44) (.47) (.48) (.48)
Distributions in excess of net investment income ..... (.01) (.02) (.01) -0- -0-
------- ------- ------- ------- -------
Total dividends and distributions .................... (.45) (.46) (.48) (.48) (.48)
------- ------- ------- ------- -------
Net asset value, end of year ......................... $ 9.45 $ 10.29 $ 10.10 $ 9.66 $ 9.62
======= ======= ======= ======= =======
Total Return
Total investment return based on net asset value (c) . (3.96)% 6.57% 9.72% 5.52% 16.19%
Ratios/Supplemental Data
Net assets, end of year (000's omitted) .............. $48,205 $44,736 $38,890 $34,562 $32,259
Ratios to average net assets of:
Expenses, net of fee waivers ...................... 1.31% 1.31% 1.35% 1.34% 1.44%
Expenses, before fee waivers ...................... 1.77% 1.82% 1.82% 1.81% 1.82%
Net investment income, net of fee waivers ......... 4.41% 4.33% 4.75% 4.95% 5.24%
Portfolio turnover rate .............................. 134% 18% 34% 64% 69%
</TABLE>
- --------------------------------------------------------------------------------
See footnote summary on page 56.
50
<PAGE>
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,
------------------------------------------------------------------
1999 1998 1997 1996 1995
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year ................... $ 11.34 $ 11.04 $ 10.59 $ 10.45 $ 9.43
-------- -------- -------- -------- --------
Income From Investment Operations
Net investment income (a) ............................ .54(b) .56(b) .58(b) .58 .59
Net realized and unrealized gain (loss) on investment
transactions ...................................... (.73) .32 .45 .14 1.02
-------- -------- -------- -------- --------
Net increase (decrease) in net asset value from
operations ........................................ (.19) .88 1.03 .72 1.61
-------- -------- -------- -------- --------
Less: Dividends and Distributions
Dividends from net investment income ................. (.54) (.56) (.58) (.58) (.59)
Distributions in excess of net investment income ..... (.03) (.02) -0- -0- -0-
-------- -------- -------- -------- --------
Total dividends and distributions .................... (.57) (.58) (.58) (.58) (.59)
-------- -------- -------- -------- --------
Net asset value, end of year ......................... $ 10.58 $ 11.34 $ 11.04 $ 10.59 $ 10.45
======== ======== ======== ======== ========
Total Return
Total investment return based on net asset value (c) . (1.80)% 8.20% 10.07% 7.15% 17.55%
Ratios/Supplemental Data
Net assets, end of year (000's omitted) .............. $684,403 $550,626 $470,444 $460,444 $478,535
Ratios to average net assets of:
Expenses, net of fee waivers ...................... .71% .72% .78% .77% .74%
Expenses, before fee waivers ...................... 1.04% 1.04% 1.05% 1.05% 1.04%
Net investment income, net of fee waivers ......... 4.88% 4.99% 5.43% 5.57% 5.90%
Portfolio turnover rate .............................. 88% 22% 20% 49% 39%
</TABLE>
- --------------------------------------------------------------------------------
See footnote summary on page 56.
51
<PAGE>
FINANCIAL HIGHLIGHTS (continued) Alliance Municipal Income Fund
================================================================================
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Year
<TABLE>
<CAPTION>
California Portfolio
------------------------------------------------------------------
Class B
------------------------------------------------------------------
Year Ended October 31,
------------------------------------------------------------------
1999 1998 1997 1996 1995
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year ................... $ 11.34 $ 11.04 $ 10.59 $ 10.45 $ 9.43
-------- -------- -------- -------- --------
Income From Investment Operations
Net investment income (a) ............................ .46(b) .48(b) .51(b) .51 .51
Net realized and unrealized gain (loss) on investment
transactions ...................................... (.73) .33 .45 .14 1.02
-------- -------- -------- -------- --------
Net increase (decrease) in net asset value from
operations ........................................ (.27) .81 .96 .65 1.53
-------- -------- -------- -------- --------
Less: Dividends and Distributions
Dividends from net investment income ................. (.46) (.48) (.51) (.51) (.51)
Distributions in excess of net investment income ..... (.03) (.03) -0- -0- -0-
-------- -------- -------- -------- --------
Total dividends and distributions .................... (.49) (.51) (.51) (.51) (.51)
-------- -------- -------- -------- --------
Net asset value, end of year ......................... $ 10.58 $ 11.34 $ 11.04 $ 10.59 $ 10.45
======== ======== ======== ======== ========
Total Return
Total investment return based on net asset value (c) . (2.47)% 7.46% 9.29% 6.37% 16.64%
Ratios/Supplemental Data
Net assets, end of year (000's omitted) .............. $224,924 $207,751 $166,672 $164,895 $166,759
Ratios to average net assets of:
Expenses, net of fee waivers ...................... 1.41% 1.43% 1.48% 1.47% 1.45%
Expenses, before fee waivers ...................... 1.72% 1.75% 1.76% 1.75% 1.75%
Net investment income, net of fee waivers ......... 4.14% 4.30% 4.72% 4.87% 5.19%
Portfolio turnover rate .............................. 88% 22% 20% 49% 39%
</TABLE>
- --------------------------------------------------------------------------------
See footnote summary on page 56.
52
<PAGE>
Alliance Municipal Income Fund
================================================================================
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Year
<TABLE>
<CAPTION>
California Portfolio
---------------------------------------------------------------
Class C
---------------------------------------------------------------
Year Ended October 31,
---------------------------------------------------------------
1999 1998 1997 1996 1995
-------- -------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year ................... $ 11.33 $ 11.04 $ 10.59 $ 10.45 $ 9.43
-------- -------- ------- ------- -------
Income From Investment Operations
Net investment income (a) ............................ .46(b) .48(b) .51(b) .51 .51
Net realized and unrealized gain (loss) on investment
transactions ...................................... (.72) .32 .45 .14 1.02
-------- -------- ------- ------- -------
Net increase (decrease) in net asset value from
operations ........................................ (.26) .80 .96 .65 1.53
-------- -------- ------- ------- -------
Less: Dividends and Distributions
Dividends from net investment income ................. (.46) (.48) (.51) (.51) (.51)
Distributions in excess of net investment income ..... (.03) (.03) -0- -0- -0-
-------- -------- ------- ------- -------
Total dividends and distributions .................... (.49) (.51) (.51) (.51) (.51)
-------- -------- ------- ------- -------
Net asset value, end of year ......................... $ 10.58 $ 11.33 $ 11.04 $ 10.59 $ 10.45
======== ======== ======= ======= =======
Total Return
Total investment return based on net asset value (c) . (2.39)% 7.46% 9.29% 6.38% 16.64%
Ratios/Supplemental Data
Net assets, end of year (000's omitted) .............. $159,219 $124,115 $90,742 $90,917 $87,793
Ratios to average net assets of:
Expenses, net of fee waivers ...................... 1.41% 1.42% 1.48% 1.47% 1.44%
Expenses, before fee waivers ...................... 1.74% 1.76% 1.74% 1.75% 1.74%
Net investment income, net of fee waivers ......... 4.17% 4.29% 4.73% 4.87% 5.22%
Portfolio turnover rate .............................. 88% 22% 20% 49% 39%
</TABLE>
- --------------------------------------------------------------------------------
See footnote summary on page 56.
53
<PAGE>
FINANCIAL HIGHLIGHTS (continued) Alliance Municipal Income Fund
================================================================================
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Year
<TABLE>
<CAPTION>
Insured California Portfolio
------------------------------------------------------------------
Class A
------------------------------------------------------------------
Year Ended October 31,
------------------------------------------------------------------
1999 1998 1997 1996 1995
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year ................... $ 14.25 $ 13.89 $ 13.39 $ 13.32 $ 11.79
-------- -------- -------- -------- --------
Income From Investment Operations
Net investment income ................................ .64(b) .64(b) .69(b) .69 .68(a)
Net realized and unrealized gain (loss) on investment
transactions ...................................... (1.15) .39 .50 .06 1.54
-------- -------- -------- -------- --------
Net increase (decrease) in net asset value from
operations ........................................ (.51) 1.03 1.19 .75 2.22
-------- -------- -------- -------- --------
Less: Dividends and Distributions
Dividends from net investment income ................. (.63) (.64) (.68) (.68) (.68)
Distributions in excess of net investment income ..... -0- (.03) (.01) -0- (.01)
-------- -------- -------- -------- --------
Total dividends and distributions .................... (.63) (.67) (.69) (.68) (.69)
-------- -------- -------- -------- --------
Net asset value, end of year ......................... $ 13.11 $ 14.25 $ 13.89 $ 13.39 $ 13.32
======== ======== ======== ======== ========
Total Return
Total investment return based on net asset value (c) . (3.74)% 7.60% 9.18% 5.79% 19.29%
Ratios/Supplemental Data
Net assets, end of year (000's omitted) .............. $111,535 $113,102 $103,647 $101,542 $103,940
Ratios to average net assets of:
Expenses, net of fee waivers ...................... 1.05% 1.05% 1.11% 1.08% 1.04%
Expenses, before fee waivers ...................... 1.05% 1.05% 1.11% 1.08% 1.09%
Net investment income, net of fee waivers ......... 4.59% 4.52% 5.09% 5.19% 5.34%
Portfolio turnover rate .............................. 100% 0% 35% 118% 103%
</TABLE>
- --------------------------------------------------------------------------------
See footnote summary on page 56.
54
<PAGE>
Alliance Municipal Income Fund
================================================================================
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Year
<TABLE>
<CAPTION>
Insured California Portfolio
-------------------------------------------------------------
Class B
-------------------------------------------------------------
Year Ended October 31,
-------------------------------------------------------------
1999 1998 1997 1996 1995
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year ................... $ 14.25 $ 13.89 $ 13.39 $ 13.32 $ 11.79
------- ------- ------- ------- -------
Income From Investment Operations
Net investment income ................................ .53(b) .54(b) .59(b) .60 .58(a)
Net realized and unrealized gain (loss) on investment
transactions ...................................... (1.14) .39 .50 .05 1.54
------- ------- ------- ------- -------
Net increase (decrease) in net asset value from
operations ........................................ (.61) .93 1.09 .65 2.12
------- ------- ------- ------- -------
Less: Dividends and Distributions
Dividends from net investment income ................. (.53) (.54) (.59) (.58) (.58)
Distributions in excess of net investment income ..... -0- (.03) -0- -0- (.01)
------- ------- ------- ------- -------
Total dividends and distributions .................... (.53) (.57) (.59) (.58) (.59)
------- ------- ------- ------- -------
Net asset value, end of year ......................... $ 13.11 $ 14.25 $ 13.89 $ 13.39 $ 13.32
======= ======= ======= ======= =======
Total Return
Total investment return based on net asset value (c) . (4.44)% 6.84% 8.37% 4.99% 18.35%
Ratios/Supplemental Data
Net assets, end of year (000's omitted) .............. $21,628 $29,957 $27,976 $26,696 $27,816
Ratios to average net assets of:
Expenses, net of fee waivers ...................... 1.76% 1.76% 1.81% 1.79% 1.74%
Expenses, before fee waivers ...................... 1.76% 1.76% 1.81% 1.79% 1.80%
Net investment income, net of fee waivers ......... 3.85% 3.82% 4.39% 4.49% 4.61%
Portfolio turnover rate .............................. 100% 0% 35% 118% 103%
</TABLE>
- --------------------------------------------------------------------------------
See footnote summary on page 56.
55
<PAGE>
FINANCIAL HIGHLIGHTS (continued) Alliance Municipal Income Fund
================================================================================
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Year
<TABLE>
<CAPTION>
Insured California Portfolio
-------------------------------------------------------------
Class C
-------------------------------------------------------------
Year Ended October 31,
-------------------------------------------------------------
1999 1998 1997 1996 1995
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year ................... $ 14.25 $ 13.89 $ 13.39 $ 13.32 $ 11.79
------- ------- ------- ------- -------
Income From Investment Operations
Net investment income ................................ .54(b) .54(b) .59(b) .60 .58(a)
Net realized and unrealized gain (loss) on investment
transactions ...................................... (1.15) .39 .50 .05 1.54
------- ------- ------- ------- -------
Net increase (decrease) in net asset value from
operations ........................................ (.61) .93 1.09 .65 2.12
------- ------- ------- ------- -------
Less: Dividends and Distributions
Dividends from net investment income ................. (.53) (.54) (.59) (.58) (.58)
Distributions in excess of net investment income ..... -0- (.03) -0- -0- (.01)
------- ------- ------- ------- -------
Total dividends and distributions .................... (.53) (.57) (.59) (.58) (.59)
------- ------- ------- ------- -------
Net asset value, end of year ......................... $ 13.11 $ 14.25 $ 13.89 $ 13.39 $ 13.32
======= ======= ======= ======= =======
Total Return
Total investment return based on net asset value (c) . (4.44)% 6.84% 8.37% 4.99% 18.35%
Ratios/Supplemental Data
Net assets, end of year (000's omitted) .............. $16,391 $16,013 $13,436 $12,826 $14,323
Ratios to average net assets of:
Expenses, net of fee waivers ...................... 1.75% 1.75% 1.81% 1.78% 1.74%
Expenses, before fee waivers ...................... 1.75% 1.75% 1.81% 1.78% 1.79%
Net investment income, net of fee waivers ......... 3.89% 3.82% 4.39% 4.49% 4.64%
Portfolio turnover rate .............................. 100% 0% 35% 118% 103%
</TABLE>
- --------------------------------------------------------------------------------
(a) Net of fees waived by the Adviser.
(b) Based on average shares outstanding.
(c) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period. Initial sales charges or
contingent deferred sales charges are not reflected in the calculation of
total investment return. Deferred sales charge is not reflected in the
calculation of total investment return.
56
<PAGE>
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, 1999, 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 and financial highlights. Our procedures included confirmation of
securities owned as of October 31, 1999, 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, 1999, 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.
/s/ Ernst & Young LLP
New York, New York
December 8, 1999
FEDERAL TAX INFORMATION (unaudited)
================================================================================
In accordance with Federal tax law, the following table represents each
portfolio's designation of "exempt-interest dividends" and long-term capital
gain distributions paid during the fiscal year ended October 31, 1999. As
required by Federal tax law, shareholders will receive notification of their
portion of each portfolio's taxable ordinary dividends (if any) and long term
capital gain distributions (if any) paid for the 1999 calendar year on Form
1099-DIV which will be mailed by January 31, 2000.
Exempt-Interest Long-Term Capital
Portfolio Dividends Gain Distributions
- ----------- --------------- ------------------
California ............................ $45,897,630 $ -0-
Insured California .................... 6,495,227 -0-
Insured National ...................... 9,467,855 4,633,941
National .............................. 30,517,437 5,958,459
New York .............................. 18,466,575 -0-
57
<PAGE>
Alliance Municipal Income Fund
================================================================================
BOARD OF DIRECTORS
John D. Carifa, Chairman and President
Ruth Block (1)
David H. Dievler (1)
John H. Dobkin (1)
William H. Foulk, Jr. (1)
Dr. James M. Hester (1)
Clifford L. Michel (1)
Donald J. Robinson (1)
OFFICERS
Kathleen A. Corbet, Senior Vice President
Susan P. Keenan, Senior Vice President
Wayne D. Lyski, Senior Vice President
David M. Dowden, Vice President
Terrance Hults, Vice President
William E. Oliver, Vice President
Edmund P. Bergan, Jr., Secretary
Mark D. Gersten, Treasurer & Chief Financial Officer
Juan J. Rodriguez, Controller
CUSTODIAN
State Street Bank & Trust Company
225 Franklin Street
Boston, MA 02110
PRINCIPAL UNDERWRITER
Alliance Fund Distributors, Inc.
1345 Avenue of the Americas
New York, NY 10105
LEGAL COUNSEL
Seward & Kissel LLP
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.
58
<PAGE>
THE ALLIANCE FAMILY OF MUTUAL FUNDS
================================================================================
Fixed Income
Alliance Bond Fund
U.S. Government Portfolio
Corporate Bond Portfolio
Quality Bond Portfolio
Alliance Global Dollar Government Fund
Alliance Global Strategic Income Trust
Alliance High Yield Fund
Alliance Limited Maturity Government Fund
Alliance Mortgage Securities Income Fund
Alliance Multi-Market Strategy Trust
Alliance North American Government Income Trust
Alliance Short-Term U.S. Government Fund
Tax-Free Income
Alliance Municipal Income Fund
California Portfolio
Insured California Portfolio
Insured National Portfolio
National Portfolio
New York Portfolio
Alliance Municipal Income Fund II
Arizona Portfolio
Florida Portfolio
Massachusetts Portfolio
Michigan Portfolio
Minnesota Portfolio
New Jersey Portfolio
Ohio Portfolio
Pennsylvania Portfolio
Virginia Portfolio
Money Market
AFD Exchange Reserves
Growth
The Alliance Fund
Alliance Global Environment Fund
Alliance Growth Fund
Alliance Premier Growth Fund
Select Investors Series - Premier Portfolio
Growth & Income
Alliance Balanced Shares
Alliance Conservative Investors Fund
Alliance Growth & Income Fund
Alliance Growth Investors Fund
Alliance Real Estate Investment Fund
Alliance Utility Income Fund
Aggressive Growth
Alliance Global Small Cap Fund
Alliance Health Care Fund
Alliance Quasar Fund
Alliance Technology Fund
International
Alliance All-Asia Investment Fund
Alliance Greater China '97 Fund
Alliance International Fund
Alliance International Premier Growth Fund
Alliance New Europe Fund
Alliance Worldwide Privatization Fund
Institutional
Premier Growth
Quasar
Real Estate Investment
Closed-End Funds
Alliance All-Market Advantage Fund
ACM Government Income Fund
ACM Government Opportunity Fund
ACM Government Securities Fund
ACM Government Spectrum Fund
ACM Managed Dollar Income Fund
ACM Managed Income Fund
ACM Municipal Securities Income Fund
Alliance World Dollar Government Fund
Alliance World Dollar Government Fund II
The Austria Fund
The Korean Investment Fund
The Spain Fund
The Southern Africa Fund
Cash Management Services
Alliance Capital Reserves
Alliance Government Reserves
Alliance Institutional Reserves
Prime Portfolio
Government Portfolio
Tax-Free Portfolio
Treasury Portfolio
Trust Portfolio
Alliance Insured Account
Alliance Money Reserves
Alliance Municipal Trust
California Portfolio
Connecticut Portfolio
Florida Portfolio
General Portfolio
Massachusetts Portfolio
New Jersey Portfolio
New York Portfolio
Virginia Portfolio
Alliance Treasury Reserves
Alliance Money Market Fund
Prime Portfolio
General Municipal Portfolio
Government Portfolio
59
<PAGE>
---------------
ALLIANCE MUNICIPAL INCOME FUND BULK RATE
1345 Avenue of the Americas U.S. POSTAGE
New York, NY 10105 PAID
(800) 221-5672 New York, NY
Permit No. 7131
---------------
Alliance Capital [LOGO](R)
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.
MUNIAR1099
