<PAGE>
Letter To Shareholders ACM Managed Income Fund, Inc.
- --------------------------------------------------------------------------------
October 10, 1995
Dear Shareholder:
The U.S. bond market staged an impressive, broad-based rally in the first nine
months of 1995. The rally was sparked, in large part, by a slowing U.S. economy,
moderating inflationary pressures and a shift in Federal Reserve monetary
policy. We are pleased to report that ACM Managed Income Fund benefited from
this favorable investment environment.
INVESTMENT RESULTS
For the twelve months ended August 31, 1995, ACM Managed Income Fund achieved a
total return of +16.34% on a net asset value basis, and paid dividends for the
year totaling $1.08 per share. This represents a current dividend distribution
rate of 11.52% based on the August 31 market price of $9.375. Over the six-month
period through August 31, the Fund returned +16.67% on a net asset value basis.
These impressive gains are due, in large part, to performance during 1995.
During this period, nearly all sectors of the U.S. bond market gained, led by
corporate securities.
Effective with the October 20, 1995 dividend, which was payable to shareholders
of record on October 4, the monthly dividend rate was reduced by $0.015 per
share, representing the first dividend adjustment since August 1992. We believe
the new rate more accurately reflects the Fund's income-earning capabilities in
the current yield environment, consistent with its objective of high total
return through a combination of high current income and capital appreciation. A
notice of this change will appear with your October account statements and
dividend checks.
THE U.S. ECONOMIC ENVIRONMENT
The U.S. economy experienced a slowdown in the first six months of 1995. In the
second quarter, Gross Domestic Product growth fell to 1.3%, reflecting declines
in industrial production and lower final sales growth. More recent data,
however, point to a modest reacceleration in economic growth. The pickup in
economic growth is largely the result of increased consumer spending,
particularly in the automobile and housing sectors. Excluding automobile sales,
third quarter retail sales data have been flat, as gains in personal income and
high consumer confidence have not translated into improved sales. The
manufacturing sector appears to be recovering, after slumping for much of the
year. Industrial production rose modestly in July, followed by a sharp increase
in August. Despite the recent increase in economic activity, concerns regarding
inflation have largely subsided. Broad price indices such as the Consumer Price
Index and Producer Price Index have risen very modestly and labor costs remain
under control. The favorable inflation outlook and the continued sluggishness of
the economy led the Federal Reserve to cut short-term interest rates 0.25% in
early July.
BOND MARKET REVIEW
Since January, the U.S. bond market has posted impressive gains across nearly
all fixed income sectors. The rally was sparked, in large part, by the
aforementioned economic developments. Investment grade and high yield corporate
securities were the best-performing sectors. Treasury and mortgage obligations
also performed well, though mortgage returns were tempered by higher prepayment
activity. Across all major sectors of the U.S. fixed income market, longer
duration securities outperformed shorter duration securities as interest rates
for all maturities declined. Outside the U.S., emerging market and other foreign
debt prices rebounded sharply in response to positive developments in Mexico and
Argentina.
1
<PAGE>
ACM Managed Income Fund, Inc.
- --------------------------------------------------------------------------------
INVESTMENT OUTLOOK
It is our view that U.S. economic growth will reaccelerate modestly in the
second half of the year, to an annual growth rate of approximately 2.5%. This
projected rate of economic growth should not add significantly to inflationary
pressures, allowing the Federal Reserve to cut interest rates again if growth
stalls. If our forecast proves correct, the result should be further gains in
U.S. bond prices.
In this environment, we expect to maintain significant exposure to U.S. Treasury
and high yield securities, while avoiding mortgage-backed securities. Lower
interest rates typically favor Treasury and corporate securities over mortgages.
In addition, credit fundamentals for investment grade and high yield corporate
debt should strengthen due to continued economic growth. We expect to maintain
relatively little exposure to mortgage-backed securities due to concerns over
prepayments and the volatility this sector has exhibited over the past nine
months.
We appreciate your continued interest in ACM Managed Income Fund and look
forward to reporting its progress to you early in 1996.
Sincerely,
/s/ John D. Carifa
John D. Carifa
Chairman and President
/s/ Wayne D. Lyski
Wayne D. Lyski
Senior Vice President
2
<PAGE>
Portfolio Of Investments
August 31, 1995 ACM Managed Income Fund, Inc.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Moody's Principal
Investor Amount
Ratings+ (000) Value
- --------------------------------------------------------------------------------
<C> <S> <C> <C>
U.S. GOVERNMENT AND AGENCY
OBLIGATIONS--60.7%
U.S. TREASURY
SECURITIES--44.2%
U.S. Treasury Bonds
6.25%, 8/15/23......................... $ 1,250 $ 1,172,266
8.125%, 8/15/19........................ 12,500 14,449,213
12.375%, 5/15/04....................... 8,300 11,604,438
14.00%, 11/15/11....................... 29,660 47,038,891
U.S. Treasury Notes
6.50%, 8/15/05......................... 5,600 5,687,500
6.75%, 4/30/00......................... 9,500 9,749,375
7.50%, 2/15/05......................... 7,050 7,620,606
U.S. Treasury Strips
Zero coupon, 2/15/15................... 30,120 7,913,608
Zero coupon, 8/15/20................... 70,200 12,579,278
------------
Total U.S. Treasury Securities
(cost $114,320,008).................... 117,815,175
------------
FEDERAL AGENCY
SECURITIES--16.5%
Federal National Mortgage
Association
Zero coupon, 10/09/19,
REMIC.................................. 44,075 8,058,805
7.00%, 4/25/24......................... 22,250 21,193,125
Government National
Mortgage Association
8.00%, 7/15/25......................... 14,463 14,833,335
------------
Total Federal Agency Securities
(cost $42,378,616)..................... 44,085,265
------------
Total U.S. Government and
Agency Obligations
(cost $156,698,624).................... 161,900,440
------------
CORPORATE OBLIGATIONS--38.5%
BASIC INDUSTRIES--5.2%
B3 Communications & Power Industries
12.00%, 8/01/05 (a).................... 3,000 3,045,000
B3 Harvard Industries, Inc
11.125%, 8/01/05 (a)................... 5,000 5,075,000
B3 Johnstown America Industries, Inc
11.75%, 8/15/05........................ 3,500 3,508,750
Caa Terex Corp
13.75%, 5/15/02 (a) (b)................ 3,000 2,340,000
------------
13,968,750
------------
<CAPTION>
Moody's Principal
Investor Amount
Ratings+ (000) Value
- --------------------------------------------------------------------------------
<C> <S> <C> <C>
BROADCASTING
& CABLE--3.0%
B3 Pegasus Media
& Communications
12.50%, 7/01/05 (a) (c)................ $ 4,000 $ 4,080,000
B1 Sinclair Broadcast Group, Inc
10.00%, 9/30/05........................ 4,000 4,040,000
------------
8,120,000
------------
CHEMICALS--2.0%
Ba3 Terra Industries, Inc
10.50%, 6/15/05 (a).................... 5,000 5,237,500
------------
CONSUMER PRODUCTS
& SERVICES--4.9%
B1 American Safety Razor Co
9.875%, 8/01/2005 (a).................. 3,000 2,970,000
B3 Revlon Worldwide Corp
Zero Coupon, 3/15/98................... 10,000 7,125,000
Caa Sullivan Graphics Inc
12.75%, 8/01/05 (a).................... 3,000 2,996,250
------------
13,091,250
------------
ENERGY--2.2%
Ba3 California Energy Co, Inc
9.875%, 6/30/03........................ 3,000 3,045,000
Ba3 Gulf Canada Resources, Ltd
9.625%, 7/01/05........................ 3,000 3,000,000
------------
6,045,000
------------
GENERAL INDUSTRIES--2.0%
B3 Cabot Safety Corp
12.50%, 7/15/05 (a).................... 5,000 5,225,000
------------
LEISURE &
ENTERTAINMENT--2.5%
B2 GNF Corp
10.625%, 4/01/03....................... 3,000 2,610,000
B2 Premier Parks, Inc
12.00%, 8/15/03 (a).................... 4,000 4,030,000
------------
6,640,000
------------
METALS--1.9%
B3 International Wire Group
11.75%, 6/01/05 (a).................... 5,000 5,012,500
------------
OIL & GAS--1.6%
B2 TransTexas Gas Corp
11.50%, 6/15/02........................ 4,000 4,210,000
------------
</TABLE>
3
<PAGE>
Portfolio Of Investments (continued) ACM Managed Income Fund, Inc.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Moody's Principal
Investor Amount
Ratings+ (000) Value
- --------------------------------------------------------------------------------
<C> <S> <C> <C>
PAPER/FOREST PRODUCTS--2.8%
B3 Crown Paper Co
11.00%, 9/01/05........................ $ 4,000 $ 3,975,000
B1 Tembec Finance Corp
9.875%, 9/30/05........................ 3,500 3,526,250
------------
7,501,250
------------
PLASTICS--1.9%
B3 Crain Industries, Inc
13.50%, 8/15/05 (a).................... 5,000 5,050,000
------------
RETAILING--1.5%
B3 Mother's Work, Inc
12.625%, 8/01/05 (a)................... 4,000 3,900,000
------------
SUPERMARKETS--3.3%
B3 Bruno's, Inc
10.50%, 8/01/05........................ 4,000 3,940,000
B1 Ralph's Grocery Co
10.45%, 6/15/04........................ 5,000 4,918,750
------------
8,858,750
------------
TECHNOLOGY--0.7%
Caa In-Flight Phone Corp
14.00%, 5/15/02 (a) (d) (e)............ 5,000 1,925,000
------------
TELECOMMUNICATIONS--3.0%
B3 Nextel Communications, Inc
9.75%, 8/15/04 (e)..................... 10,000 4,850,000
B1 SHL Systemhouse, Inc
12.25%, 9/01/01 (f).................... 3,000 3,033,750
------------
7,883,750
------------
Total Corporate Obligations
(cost $104,669,445).................... 102,668,750
------------
<CAPTION>
Shares or
Moody's Principal
Investor Amount
Ratings+ (000) Value
- --------------------------------------------------------------------------------
<C> <S> <C> <C>
YANKEE OBLIGATIONS--6.8%
B1 Banco Rio De La Plata S.A.
8.75%, 12/15/03........................ $10,000 7,500,000
NR Compania Brasileira De Projertos
12.50%, 12/22/97(a).................... 7,000 6,947,500
NR Tribasa Toll Road Trust 1
10.50%, 12/01/11 (a)................... 5,000 3,750,000
------------
Total Yankee Obligations
(cost $19,796,245)..................... 18,197,500
------------
NON-CONVERTIBLE
PREFERRED STOCK--0.9%
NR Prime Retail, Inc
10.50%, Series A
(cost $3,187,500)...................... 127 2,438,438
------------
SOVEREIGN DEBT RELATED--1.3%
NR Bayerische Landesbank
Spread Notes--U.S. Treasury Bond
6.25%, 8/15/23 vs Brazil
Par Bonds 4.00%, 4/15/24 (g)
9.125%, 9/28/95........................ $2,000 1,666,100
9.125%, 10/13/95....................... 2,000 1,674,600
------------
Total Sovereign Debt Related
(cost $4,000,000)...................... 3,340,700
------------
TIME DEPOSIT--3.6%
State Street Bank and Trust Co,
5.5625%, 9/01/95
(cost $9,591,000)...................... 9,591,000
------------
TOTAL INVESTMENTS--111.8%
(cost $297,942,814).................... 298,136,828
Other assets less
liabilities--(11.8%)................... (31,567,829)
------------
NET ASSETS--100% $266,568,999
============
</TABLE>
- --------------------------------------------------------------------------------
+ Unaudited
(a) Restricted security (See Note A). These securities are exempt from
registration under Rule 144A of the Securities Act of 1933. These securities
may be resold in transactions exempt from registration, normally to
qualified institutional buyers. At August 31, 1995, the market value of
these securities aggregated $61,583,750 or 23.1% of net assets.
(b) Rights are attached. The rights entitle the subscriber to four shares of
Common Stock for each right.
(c) Warrants are attached. The warrants entitle the subscriber to 0.10 share of
Common Stock for each warrant.
(d) Warrants are attached. The warrants entitle the subscriber to one share of
Common Stock for each warrant until 5/15/98.
(e) Indicates a security that has a zero coupon that remains in effect until a
predetermined date at which time the stated coupon rate becomes effective.
(f) Warrants are attached. The warrants entitle the subscriber to 7.67 shares of
Common Stock for each warrant until 9/01/00.
(g) The redemption value of these securities is indexed to the spread between
the referenced U.S. Treasury yield and the referenced emerging market debt
yield.
Glossary of Terms:
NR Not Rated.
REMIC Real Estate Mortgage Investment Conduit.
See notes to financial statements.
4
<PAGE>
Statement Of Assets And Liabilities
August 31, 1995 ACM Managed Income Fund, Inc.
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS
Investments in securities, at value (cost $297,942,814)................................. $298,136,828
Interest receivable..................................................................... 4,073,286
Receivable for investment securities sold............................................... 341,679
Other assets............................................................................ 141,699
------------
Total assets............................................................................ 302,693,492
------------
LIABILITIES
Payable for investment securities purchased............................................. 33,800,034
Dividend payable........................................................................ 1,896,569
Advisory fee payable.................................................................... 144,255
Administrative fee payable.............................................................. 44,386
Accrued expenses and other liabilities.................................................. 239,249
------------
Total liabilities....................................................................... 36,124,493
------------
NET ASSETS................................................................................ $266,568,999
============
COMPOSITION OF NET ASSETS
Preferred Stock, $.01 par value per share; 1,900 shares Remarketed Preferred
Stock authorized, 950 shares issued and outstanding at $100,000 per share
liquidation preference................................................................ $ 95,000,000
Common Stock, $.01 par value per share; 299,998,100 shares
authorized, 21,072,987 shares issued and outstanding.................................. 210,730
Additional paid-in capital.............................................................. 189,479,450
Distributions in excess of net investment income........................................ (1,896,569)
Accumulated net realized loss........................................................... (16,418,626)
Net unrealized appreciation of investments.............................................. 194,014
------------
$266,568,999
============
NET ASSET VALUE PER SHARE OF COMMON STOCK
($266,568,999 less Remarketed Preferred Stock at liquidation
value of $95,000,000 divided by 21,072,987 shares of Common
Stock outstanding)...................................................................... $8.14
=====
</TABLE>
- --------------------------------------------------------------------------------
See notes to financial statements.
5
<PAGE>
Statement Of Operations
Year Ended August 31, 1995 ACM Managed Income Fund, Inc.
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME
Interest................................................................. $26,162,094
Dividends................................................................ 1,299,273 $27,461,367
-----------
EXPENSES
Advisory fee............................................................. 1,658,565
Administrative fee....................................................... 510,327
Remarketed Preferred Stock-remarketing agent's fees...................... 201,545
Transfer agency.......................................................... 89,514
Audit and legal.......................................................... 86,142
Custodian................................................................ 48,675
Directors' fees.......................................................... 37,522
Reports and notices to shareholders...................................... 24,731
Taxes.................................................................... 20,625
Miscellaneous............................................................ 57,169
-----------
Total expenses........................................................... 2,734,815
-----------
Net investment income.................................................... 24,726,552
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND OPTIONS
Net realized loss on investment transactions............................. (813,481)
Net realized loss on option transactions................................. (225,266)
Net change in unrealized depreciation of investments..................... 7,548,130
-----------
Net gain on investments and options...................................... 6,509,383
-----------
NET INCREASE IN NET ASSETS FROM OPERATIONS................................. $31,235,935
===========
</TABLE>
Statement Of Changes In Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended August 31,
--------------------------------
1995 1994
------------ ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment income.................................................... $ 24,726,552 $ 23,122,493
Net realized loss on investment and option transactions.................. (1,038,747) (11,647,115)
Net change in unrealized appreciation (depreciation) of investments...... 7,548,130 (11,313,222)
------------ ------------
Net increase in net assets from operations............................... 31,235,935 162,156
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Common Stock:
Dividends from net investment income..................................... (17,251,646) (21,574,282)
Distributions from net realized gains.................................... -0- (28,389,569)
Distributions in excess of net investment income......................... (1,754,800) (1,836,437)
Tax return of capital distribution....................................... (3,432,274) (926,028)
Remarketed Preferred Stock:
Dividends from net investment income..................................... (5,638,469) (3,880,646)
COMMON STOCK TRANSACTIONS
Reinvestment of dividends resulting in the issuance of Common Stock...... 5,391,850 13,084,186
------------ ------------
Total increase (decrease)................................................ 8,550,596 (43,360,620)
NET ASSETS
Beginning of year........................................................ 258,018,403 301,379,023
------------ ------------
End of year.............................................................. $266,568,999 $258,018,403
============ ============
</TABLE>
- --------------------------------------------------------------------------------
See notes to financial statements.
6
<PAGE>
Notes To Financial Statements
August 31, 1995 ACM Managed Income Fund, Inc.
- --------------------------------------------------------------------------------
NOTE A: Significant Accounting Policies
ACM Managed Income Fund, Inc., (the "Fund") is registered under the Investment
Company Act of 1940 as a non-diversified, closed-end management investment
company. 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. Listed securities not
traded and securities traded in the over-the-counter market, including listed
debt securities whose primary market is believed to be over-the-counter, are
valued at the mean between the most recently quoted bid and asked prices
provided by the principal market makers. Options are valued at market value or
fair value using methods determined by the Board of Directors. Securities for
which market quotations are not readily available and restricted securities
which are subject to limitations as to their resale are valued in good faith at
fair value using methods determined by the Board of Directors. Readily
marketable fixed-income securities are valued on the basis of prices provided by
a pricing service when such prices are believed by the Adviser to reflect the
fair value of such securities. Securities which mature in 60 days or less are
valued at amortized cost, which approximates market value, unless this method
does not represent fair value.
2. Taxes
It is the Fund's policy to meet the requirements of the Internal Revenue Code
applicable to regulated investment companies and to distribute all of its
investment company taxable income and net realized gains, if applicable, to
shareholders. Therefore, no provisions for federal income or excise taxes are
required.
3. Investment Income and Investment Transactions
Interest income is accrued daily. Dividend income is recorded on the ex-dividend
date. Investment transactions are accounted for on the date the investments are
purchased or sold. Investment gains and losses are determined on the identified
cost basis. The Fund accretes discounts as adjustments to interest income.
4. Dividends and Distributions
Dividends and distributions to shareholders are recorded on the ex-dividend date
and are determined in accordance with income tax regulations.
5. Reclassification of Components of Net Assets
During the year, the Fund reclassified certain components of net assets. The
reclassifications were the result of permanent book to tax differences as well
as the reclassification of a tax return of capital. The reclassifications
resulted in a net increase to distributions in excess of net investment income
of $141,769, a net decrease to accumulated net realized loss of $141,769, and a
corresponding decrease to additional paid-in capital of $3,432,274. Net assets
were not affected by the change.
- --------------------------------------------------------------------------------
NOTE B: Advisory and Administrative Fees
Under the terms of an Investment Advisory Agreement, the Fund pays Alliance
Capital Management L.P., (the "Adviser") an advisory fee equal to an annualized
rate of .65 of 1% of the average adjusted weekly net assets of the Fund during
the month.
Under the terms of an Administration Agreement, the Fund pays Princeton
Administrators, L.P. (the "Administrator") a monthly fee equal to an annualized
rate of .20 of 1% of the Fund's average adjusted weekly net assets. The
Administrator prepares financial and regulatory reports for the Fund and
provides clerical and other services.
7
<PAGE>
Notes To Financial Statements (continued) ACM Managed Income Fund, Inc.
- --------------------------------------------------------------------------------
NOTE C: Investment Transactions
Purchases and sales of investment securities (excluding U.S. government
securities, short-term investments and options) aggregated $565,086,275 and
$571,828,579 respectively, for the year ended August 31, 1995. At August 31,
1995 the cost of securities for federal income tax purposes was $300,190,216.
Accordingly, gross unrealized appreciation of investments was $4,980,779 and
gross unrealized depreciation of investments was $7,034,167 resulting in net
unrealized depreciation of $2,053,388.
For federal income tax purposes, the Fund had a capital loss carryforward at
August 31, 1995 of $6,192,707 which will expire in 2003.
Option Transactions
For hedging purposes, the Fund purchases and writes (sells) put and call options
on U.S. and foreign government securities that are traded on U.S. and foreign
securities exchanges and over-the-counter markets.
The risk associated with purchasing an option is that the Fund pays a premium
whether or not the option is exercised. Additionally, the Fund bears the risk of
loss of premium and change in market value should the counterparty not perform
under the contract. Put and call options purchased are accounted for in the same
manner as portfolio securities. The cost of securities acquired through the
exercise of call options is increased by premiums paid. The proceeds from
securities sold through the exercise of put options are decreased by the
premiums paid.
When the Fund writes an option, the premium received by the Fund is recorded as
a liability and is subsequently adjusted to the current market value of the
option written. Premiums received from writing options which expire unexercised
are recorded by the Fund on the expiration date as realized gains from option
transactions. The difference between the premium and the amount paid on
effecting a closing purchase transaction, including brokerage commissions, is
also treated as a realized gain, or if the premium is less than the amount paid
for the closing purchase transaction, as a realized loss. If a call option is
exercised, the premium is added to the proceeds from the sale of the underlying
security or currency in determining whether the Fund has realized a gain or
loss. If a put option is exercised, the premium reduces the cost basis of the
security or currency purchased by the Fund. In writing an option, the Fund bears
the market risk of an unfavorable change in the price of the security underlying
the written option. Exercise of an option written by the Fund could result in
the Fund selling or buying a security at a price different from the current
market value.
Transactions in options written for the year ended August 31, 1995 were as
follows:
<TABLE>
<CAPTION>
Number of
Contracts Premiums
--------- --------
<S> <C> <C>
Options outstanding at
beginning of year...................... 0 $ -0-
Options written.......................... 1 23,437
--------- ---------
Options terminated in
closing purchase
transactions........................... (1) (23,437)
--------- ---------
Options outstanding at
end of year............................ 0 $ -0-
========= =========
</TABLE>
- --------------------------------------------------------------------------------
NOTE D: Capital Stock
There are 300,000,000 shares of $.01 par value capital stock authorized.
Common Stock
Of the 21,072,987 shares of Common Stock outstanding at August 31, 1995, the
Adviser owned 10,753 shares. During the years ended August 31, 1995 and
August 31, 1994 the Fund issued 668,127 and 1,282,267 shares, respectively, in
connection with the Fund's dividend reinvestment plan.
Preferred Stock
The Fund has issued and outstanding 950 shares of Remarketed Preferred Stock
each at a liquidation value of $100,000 per share. The dividend rate on the
Remarketed Preferred Stock may change generally every 28 days as set by the
remarketing agent. Commencing on August 24, 1995, the Remarketed Preferred Stock
had a rate of 5.86% set for a special dividend period of 203 days.
8
<PAGE>
ACM Managed Income Fund, Inc.
- --------------------------------------------------------------------------------
NOTE E: Quarterly Results of Operations (unaudited)
<TABLE>
<CAPTION>
Net Increase
Net Realized (Decrease)
and Unrealized in Net Assets
Net Investment Gain (Loss) Resulting from Market Price
Income on Investments Operations on NYSE
------------------- ---------------------- --------------------- -------------------
Per Per Per
Total Common Total Common Total Common
Quarter Ended (000) Share (000) Share (000) Share High Low
- ------------- ------- ----- -------- ------ -------- ------ ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
August 31, 1995...... $ 6,387 $ .30 $ (581) $ (.03) $ 5,806 $ .27 $ 9.500 $ 9.000
May 31, 1995......... 6,244 .30 16,898 .81 23,142 1.11 $ 9.375 $ 7.625
February 28, 1995.... 6,062 .29 1,543 .07 7,605 .36 $ 8.625 $ 7.625
November 30, 1994.... 6,034 .29 (11,351) (.55) (5,317) (.26) $ 9.000 $ 7.375
------- ----- -------- ------ -------- ------
$24,727 $1.18 $ 6,509 $ .30 $ 31,236 $ 1.48
======= ===== ======== ====== ======== ======
August 31, 1994...... $ 5,576 $ .27 $ (591) $ (.02) $ 4,985 $ .25 $10.000 $ 8.375
May 31, 1994......... 5,839 .29 (19,631) (.97) (13,792) (.68) $11.125 $ 8.750
February 28, 1994.... 5,601 .28 (5,175) (.21) 426 .07 $12.250 $10.625
November 30, 1993.... 6,106 .32 2,437 .13 8,543 .45 $11.875 $11.250
------- ----- -------- ------ -------- ------
$23,122 $1.16 $(22,960) $(1.07) $ 162 $ .09
======= ===== ======== ====== ======== ======
</TABLE>
9
<PAGE>
Financial Highlights ACM Managed Income Fund, Inc.
- --------------------------------------------------------------------------------
Selected Data For a Share Of Common Stock Outstanding Throughout Each Year
<TABLE>
<CAPTION>
Year Ended August 31,
--------------------------------------------------------------
1995 1994 1993 1992 1991
------ ------ ------- ------- ------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year.................. $ 7.99 $10.79 $ 9.32 $ 8.39 $ 7.93
------ ------ ------- ------- ------
Income From Investment Operations
- ---------------------------------
Net investment income............................... 1.18 1.16 1.18 1.33 1.45
Net realized and unrealized gain (loss) on
investments and option transactions............... .30 (1.07) 1.63 .83 .38
------ ------ ------- ------- ------
Net increase in net asset value from
operations........................................ 1.48 .09 2.81 2.16 1.83
------ ------ ------- ------- ------
Less: Distributions
- -------------------
Distributions to common shareholders:
Dividends from net investment income.............. (.83) (1.09) (1.08) (.98) (1.01)
Distributions from net realized gain on
investments..................................... -0- (1.48) (.09) -0- -0-
Distributions in excess of net investment
income.......................................... (.09) (.09) -0- -0- -0-
Tax return of capital distribution................ (.16) (.04) -0- -0- -0-
Distributions to preferred shareholders:
Common Stock equivalent of dividends
paid to Remarketed Preferred
shareholders.................................... (.25) (.19) (.17) (.24) (.36)
------ ------ ------- ------- ------
Total dividends and distributions................... (1.33) (2.89) (1.34) (1.22) (1.37)
------ ------ ------- ------- ------
Tender offer costs.................................. -0- -0- -0- (.01) -0-
------ ------ ------- ------- ------
Net asset value, end of year........................ $ 8.14 $ 7.99 $ 10.79 $ 9.32 $ 8.39
====== ====== ======= ======= ======
Market value, end of year........................... $9.375 $8.875 $11.375 $10.250 $8.375
====== ====== ======= ======= ======
Total Return
- ------------
Total investment return based on: (a)
Market value...................................... 20.63% .66% 24.82% 36.73% 31.02%
Net asset value................................... 16.34% (4.42%) 30.22% 24.10% 19.99%
Ratios/Supplemental Data
- ------------------------
Net assets, end of period (000's omitted)........... $266,569 $258,018 $301,379 $267,580 $257,905
Ratio of expenses to average net assets (b)......... 1.07% 1.14% 1.05% 1.09% 1.11%
Ratio of net investment income to average
net assets (b).................................... 9.69% 8.32% 8.06% 9.54% 11.20%
Portfolio turnover rate............................. 392% 366% 490% 630% 293%
</TABLE>
- --------------------------------------------------------------------------------
(a) Total investment return is calculated assuming a purchase of common stock on
the opening of the first day and a sale on the closing of the last day of
each period reported. Dividends and distributions, if any, are assumed for
purposes of this calculation, to be reinvested at prices obtained under the
Fund's dividend reinvestment plan. Generally, total investment return based
on net asset value will be higher than total investment return based on
market value in periods where there is an increase in the discount or a
decrease in the premium of the market value to the net asset value from the
beginning to the end of such years. Conversely, total investment return
based on net asset value will be lower than total investment return based on
market value in periods where there is a decrease in the discount or an
increase in the premium of the market value to the net asset value from the
beginning to the end of such periods.
(b) The expense ratio and net investment income ratio do not reflect the effect
of dividend payments to preferred shareholders.
10
<PAGE>
Report Of Ernst & Young LLP
Independent Auditors ACM Managed Income Fund, Inc.
- --------------------------------------------------------------------------------
To the Shareholders and Board of Directors
ACM Managed Income Fund, Inc.
We have audited the accompanying statement of assets and liabilities of ACM
Managed Income Fund, Inc., including the portfolio of investments, as of
August 31, 1995, and the related statement of operations for the year then
ended, the statement of changes in net assets for each of the two years in the
period then ended, and the financial highlights for each of the five years in
the period then ended. These financial statements and financial highlights are
the responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
August 31, 1995, by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of ACM
Managed Income Fund, Inc. at August 31, 1995, and the results of its operations
for the year then ended, the changes in its net assets for each of the two years
in the period then ended, and the financial highlights for each of the five
years in the period then ended, in conformity with generally accepted accounting
principles.
/s/ Ernst & Young LLP
New York, New York
October 2, 1995
11
<PAGE>
Additional Information ACM Managed Income Fund, Inc.
- --------------------------------------------------------------------------------
Shareholders whose shares are registered in their own names will automatically
be participants in the Dividend Reinvestment and Cash Purchase Plan (the
"Plan"), pursuant to which dividends and capital gain distributions to
shareholders will be paid in or reinvested in additional shares of the Fund (the
"Dividend Shares"). State Street Bank and Trust Company (the "Agent") will act
as agent for participants under the Plan. Shareholders whose shares are held in
the name of a broker or nominee should contact such broker or nominee to
determine whether or how they may participate in the Plan.
If the Board declares an income distribution or determines to make a capital
gain distribution payable either in shares or in cash, as holders of the Common
Stock may have elected, non-participants in the Plan will receive cash and
participants in the Plan will receive the equivalent in shares of Common Stock
of the Fund valued as follows:
(i) If the shares of Common Stock are trading at net asset value or at a
premium above net asset value at the time of valuation, the Fund will issue
new shares at the greater of net asset value or 95% of the then current
market price.
(ii) If the shares of Common Stock are trading at a discount from net
asset value at the time of valuation, the Plan Agent will receive the
dividend or distribution in cash and apply it to the purchase of the Fund's
shares of Common stock in the open market, on the New York Stock Exchange or
elsewhere, for the participants' accounts. Such purchases will be made on or
shortly after the payment date for such dividend or distribution and in no
event more than 30 days after such date except where temporary curtailment or
suspension of purchase is necessary to comply with Federal securities laws.
If, before the Plan agent has completed its purchases, the market price
exceeds the net asset value of a share of Common Stock, the average purchase
price per share paid by the Plan agent may exceed the net asset value of the
Fund's shares of Common Stock, resulting in the acquisition of fewer shares
than if the dividend or distribution had been paid in shares issued by the
Fund.
The Agent will maintain all shareholders' accounts in the Plan and furnish
written confirmation of all transactions in the account, including information
needed by shareholders for tax records. Shares in the account of each Plan
participant will be held by the Agent in non-certificate form in the name of the
participant, and each shareholder's proxy will include those shares purchased or
received pursuant to the Plan.
There will be no charges with respect to shares issued directly by the Fund to
satisfy the dividend reinvestment requirements. However, each participant will
pay a pro rata share of brokerage commissions incurred with respect to the
Agent's open market purchases of shares. In each case, the cost per share of
shares purchased for each shareholder's account will be the average cost,
including brokerage commissions, of any shares purchased in the open market plus
the cost of any shares issued by the Fund.
The automatic reinvestment of dividends and distributions will not relieve
participants of any income taxes that may be payable (or required to be
withheld) on dividends and distributions.
Experience under the Plan may indicate that changes are desirable. Accordingly,
the Fund reserves the right to amend or terminate the Plan as applied to any
voluntary cash payments made and any dividend or distribution paid subsequent to
written notice of the change sent to participants in the Plan at least 90 days
before the record date for such dividend or distribution. The Plan may also be
amended or terminated by the Agent on at least 90 days' written notice to
participants in the Plan. All correspondence concerning the Plan should be
directed to the Agent at State Street Bank and Trust Company, P.O. Box 366,
Boston, Massachusetts 02101.
12
<PAGE>
ACM Managed Income Fund, Inc.
- --------------------------------------------------------------------------------
Since the filing of the most recent amendment to the Fund's registration
statement with the Securities and Exchange Commission, there have been (i) no
material changes in the Fund's investment objectives or policies, (ii) no
changes to the Fund's charter or by-laws that would delay or prevent a change of
control of the Fund, (iii) no material changes in the principal risk factors
associated with investment in the Fund, and (iv) no change in the person
primarily responsible for the day-to-day management of the Fund's portfolio, who
is Wayne D. Lyski, a Senior Vice President of the Fund.
Supplemental Proxy Information
The Annual Meeting of Shareholders of The ACM Managed Income Fund Inc. was held
on Thursday, May 25, 1995. The description of each proposal and number of shares
voted at the meeting are as follows:
<TABLE>
<CAPTION>
Shares Shares Voted
Voted For Without Authority
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. To elect directors: James R. Greene 19,073,558 450,112
Clifford L. Michel 19,073,242 450,428
<CAPTION>
Shares Shares Voted Shares Voted
Voted For Against Abstain
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
2. To ratify the selection of Ernst & Young LLP
as the Fund's independent auditors for the Fund's
fiscal year ending August 31, 1995: 19,116,728 119,256 287,686
</TABLE>
13
<PAGE>
ACM Managed Income Fund, Inc.
- --------------------------------------------------------------------------------
Board Of Directors
John D. Carifa, Chairman and President
Ruth Block
David H. Dievler
James R. Greene
Dr. James M. Hester
Hon. James D. Hodgson
Clifford L. Michel
Robert C. White
Officers
Wayne D. Lyski, Senior Vice President
Kathleen A. Corbet, Senior Vice President
Paul J. DeNoon, Vice President
Edmund P. Bergan, Jr., Secretary
Mark D. Gersten, Treasurer & Chief Financial Officer
Joseph J. Mantineo, Controller
ADMINISTRATOR
Princeton Administrators, L.P.
P.O. Box 9011
Princeton, NJ 08543-9011
PREFERRED STOCK:
DIVIDEND PAYING AGENT,
TRANSFER AGENT AND REGISTRAR
IBJ Schroder Bank & Trust Co.
1 State Street
New York, NY 10004
COMMON STOCK:
CUSTODIAN, DIVIDEND PAYING AGENT,
TRANSFER AGENT AND REGISTRAR
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
INDEPENDENT AUDITORS
Ernst & Young LLP
787 Seventh Avenue
New York, NY 10019
- --------------------------------------------------------------------------------
Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940 that the Fund may purchase at market prices from time to
time shares of its Common Stock in the open market.
This report, including the financial statements herein, is transmitted to the
shareholders of ACM Managed Income Fund, Inc. for their information. This is not
a prospectus, circular or representation intended for use in the purchase of
shares of the Fund or any securities mentioned in this report.
14
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
15
<PAGE>
ACM
- --------------------------------------------------------------------------------
Managed
- --------------------------------------------------------------------------------
Income Fund
- --------------------------------------------------------------------------------
Annual Report
August 31, 1995
Alliance/(R)/
Mutual funds without the Mystery./SM/
ACM Managed Income Fund, Inc.
Summary of General Information
The Fund
ACM Managed Income Fund, Inc. is a closed-end investment company whose shares
trade on the New York Stock Exchange. The Fund seeks to provide investors with a
high level of total return by seeking both high current income and capital
appreciation. In seeking this objective the Fund will invest primarily in U.S.
Government securities and corporate fixed income securities. In addition, the
Fund may utilize certain other investment techniques, including options and
futures contracts.
Shareholder Information
Daily market prices for the Fund's shares are published in the New York Stock
Exchange Composite Transaction section of newspapers. The Fund's NYSE trading
symbol is "AMF". Weekly comparative net asset value (NAV) and market price
information about the Fund is published each Monday in The Wall Street Journal
and each Saturday in The New York Times and other newspapers in a table called
"Closed-End Bond Funds".
Dividend Reinvestment Plan
A Dividend Reinvestment Plan provides automatic reinvestment of dividends and
capital gains distributions in additional Fund shares. A brochure describing the
Plan is available from the Plan Agent, State Street Bank and Trust Company, by
calling 1-800-219-4218.
ACM Managed Income Fund, Inc.
1345 Avenue of the Americas
New York, New York 10105
Alliance Capital [LOGO APPEARS HERE]
/(R)/These registered service marks used under license from the owner,
Alliance Capital Management L.P.
MIFAR
