<PAGE>
Letter To Shareholders ACM Managed Income Fund, Inc.
- --------------------------------------------------------------------------------
October 28, 1996
Dear Shareholder:
Throughout 1995, the U.S. bond market enjoyed a sustained broad-based rally
which lasted into January 1996. However, since February, domestic bond market
returns have generally been negative. The market has been reacting to stronger
than expected data on the U.S. economy and the belief that the Federal Reserve
may raise interest rates to reduce inflationary pressures.
Although Treasury securities showed a negative return during the period,
mortgage obligations were able to post a modest gain as prepayment expectations
stabilized. High yield securities continued their strong performance as the
strengthening economy provided support for higher prices for these securities.
INVESTMENT RESULTS
For the six months ended August 31, 1996, the Managed Income Fund returned 1.81%
on a net asset value basis. The current dividend distribution rate is 9.47%
based on the August 31, 1996 market price of $9.50 per share. Over the 12-month
period ended August 31, the Fund achieved a total return of 12.89% on a net
asset value basis. Given the 135 basis point (1.35%) rise in 10-year Treasury
note yields since December 1995, the performance of the Fund has been quite
strong. Much of this good relative performance is due to strong positive returns
in the high yield sector of the market. Over the past eight months, the total
return of the Merrill Lynch High Yield Index has been 4.81%, compared to -1.77%
in U.S. Government securities.
The investment guidelines of your Fund, at least 50% in U.S. Government
securities and up to 50% in high yielding, lower rated securities allow it to
benefit from exposure to both the interest rate and credit cycles of the
economy. 1996 is a case in point where performance was hindered by interest
rates but benefited from strong performance in the credit sensitive sectors such
as high yield.
ECONOMIC REVIEW
Rebounding from a slowdown at the end of 1995, the U.S. economy gathered steam
as 1996 progressed. During the first quarter, real growth was 2.0% while final
demand increased by a healthy 3.3%. Moreover, consumer confidence improved, debt
service burdens remained at manageable levels and retail sales continued to
climb. Payroll gains, including February's strong increase of 705,000, ignited
concerns over higher inflation, but the comparisons showed employment had risen
a moderate 1.5% year-over-year, and hours worked had increased 1.6% year-over-
year. The economic resurgence gained strength in the second quarter, led by a
rapidly improving labor market. Employment gains averaged 265,000 per month, and
total hours worked climbed by an annualized 5.6%. Consumer confidence remained
elevated and real household spending continued to grow at a healthy clip. These
factors combined to produce overall Gross Domestic Product (GDP) growth of 4.7%
for the second quarter.
The most recent data point to an economy that is slowing from its strong first
half pace. Retail sales have essentially remained flat and both housing starts
and new building permits have fallen sharply from their springtime highs.
Furthermore, the August home builders survey posted a decline for the fourth
month in a row.
Inflation was boosted this past spring by rising food and energy prices.
However, after briefly touching 3% (annualized) in July, Consumer Price Index
(CPI) inflation retreated to 2.9% in August while core CPI (which excludes the
volatile food and energy components), estimated at 2.7%, hovered near a
1
<PAGE>
ACM Managed Income Fund, Inc.
- --------------------------------------------------------------------------------
30-year low. The Federal Reserve has been in a holding pattern since January and
is expected to maintain that stance for the foreseeable future.
INVESTMENT OUTLOOK
For the remainder of the year, we expect U.S. economic growth to subside from
the rapid pace of the second quarter to a more sustainable level of 2%-2.5%. As
this occurs, recent upward pressures on inflation should dissipate. Until clear
signs of a slowing economy emerge, concerns about inflation will keep U.S.
interest rates within their recent ranges with a tendency toward the lower end
of the yield range.
In our forecasted economic and interest rate environment, we do not anticipate
any dramatic changes in portfolio strategy. We continue to have a favorable
outlook for the high yield sector but believe additional caution will be
necessary in selecting individual securities. We currently have no significant
shifts in industry or sector weightings driving our security selection; rather
we are looking at the market on a credit by credit basis.
Thank you for your continued interest in ACM Managed Income Fund. We look
forward to reporting the Fund's progress and market activity to you in the
coming months.
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, 1996 ACM Managed Income Fund, Inc.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount
(000) Value
- --------------------------------------------------------------------------------
<S> <C> <C>
U.S. GOVERNMENT AND AGENCY
OBLIGATIONS-56.3%
U.S. TREASURY
SECURITIES-48.8%
U.S. Treasury Bonds:
6.25%, 8/15/23..................................... $ 1,250 $ 1,101,952
12.375%, 5/15/04................................... 32,300 42,706,640
14.00%, 11/15/11................................... 8,700 13,044,562
U.S. Treasury Notes:
6.00%, 8/31/97..................................... 10,000 10,006,250
6.25%, 7/31/98..................................... 2,600 2,596,750
7.00%, 7/15/06..................................... 25,000 25,101,550
8.125%, 8/15/19.................................... 12,500 13,656,250
U.S. Treasury Strips:
Zero coupon, 5/15/09............................... 2,880 1,165,856
Zero coupon, 5/15/10............................... 19,130 7,164,166
Zero coupon, 5/15/14............................... 65,100 17,899,701
------------
Total U.S. Treasury Securities
(cost $138,913,394)................................ 134,443,677
------------
FEDERAL AGENCY
SECURITIES-7.5%
Federal National Mortgage
Association
Zero Coupon, 10/09/19,
REMIC.............................................. 20,075 3,520,954
Government National
Mortgage Association
7.50%, 5/15/26..................................... 17,434 17,003,618
------------
Total Federal Agency
Securities
(cost $21,116,371)................................. 20,524,572
------------
Total U.S. Government and
Agency Obligations
(cost $160,029,765)................................ 154,968,249
------------
<CAPTION>
Moody's Principal
Investor Amount
Ratings+ (000) Value
- --------------------------------------------------------------------------------
<S> <C> <C>
CORPORATE OBLIGATIONS-49.4%
BASIC INDUSTRIES-1.9%
Caa Terex Corp.,
13.75%, 5/15/02 (a)(b)......................... $ 5,000 $ 5,250,000
------------
BROADCASTING
& CABLE-9.0%
B3 Allbritton Communications Co.,
9.75%, 11/30/07 (a)............................ 5,000 4,662,500
B3 Galaxy Telecom L.P.,
12.375%, 10/01/05.............................. 1,500 1,560,000
B2 Intermedia Capital Partners,
11.25%, 8/01/06 (a)............................ 5,000 5,087,500
B2 Park Broadcasting Inc.,
11.75%, 5/15/04 (a)............................ 3,000 3,427,500
B3 Pegasus Media &
Communications,
12.50%, 7/01/05 (a)............................ 4,000 4,260,000
B1 Telemundo Group, Inc.,
7.00%, 2/15/06 (c)............................. 6,000 5,617,500
------------
24,615,000
------------
CHEMICALS-1.5%
B3 Sterling Chemicals, Inc.
11.75%, 8/15/06................................ 4,000 4,120,000
------------
CONSUMER PRODUCTS
& SERVICES-3.8%
Caa Apparel Retailers Inc.,
12.75%, 8/15/05 (f)............................ 5,000 4,012,500
B3 Eye Care Centers,
12.00%, 10/01/03............................... 3,000 3,180,000
B2 Park Newspapers Inc.,
11.875%, 5/15/04 (a)........................... 3,000 3,378,750
------------
10,571,250
------------
</TABLE>
3
<PAGE>
Portfolio Of Investments (continued) ACM Managed Income Fund, Inc.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Moody's Principal
Investor Amount
Ratings+ (000) Value
- --------------------------------------------------------------------------------
<S> <C> <C>
INDUSTRIAL-3.4%
B3 Alpine Group, Inc.,
12.25%, 7/15/03............................ $2,700 $ 2,821,500
B3 Haynes International, Inc.,
11.625%, 9/01/04........................... 5,000 4,962,500
B3 MVE, Inc.,
12.50%, 2/15/02............................ 1,500 1,582,500
-----------
9,366,500
-----------
LEISURE &
ENTERTAINMENT-4.9%
B2 Alliance Gaming Corp.,
12.875%, 6/30/03........................... 5,000 4,950,000
B3 American Skiing Corp.,
12.00%, 7/15/06 (a)........................ 3,000 2,910,000
NR Showboat Marina Casino,
13.50%, 3/15/03 (a)........................ 5,000 5,375,000
-----------
13,235,000
-----------
MANUFACTURING-1.0%
B3 Tokheim Corp.,
11.50%, 8/01/06 (a)........................ 2,500 2,543,750
-----------
NATURAL RESOURCES-1.8%
B3 Royal Oak Mines Inc.,
11.00%, 8/15/06 (a)........................ 5,000 5,000,000
-----------
OIL & GAS-6.2%
Caa Deep Tech International, Inc.,
12.00%, 12/15/00........................... 3,500 3,530,625
B3 Kelley Oil & Gas Corp.,
13.50%, 6/15/99............................ 5,120 5,580,800
B2 TransTexas Gas Corp.,
11.50%, 6/15/02............................ 7,550 7,965,250
-----------
17,076,675
-----------
PLASTICS-2.0%
B3 Crain Industries, Inc.,
13.50%, 8/15/05 (a)........................ 5,000 5,375,000
-----------
SUPERMARKETS-3.3%
B2 Jitney-Jungle Stores,
12.00%, 3/01/06............................ 4,000 4,190,000
B3 Ralphs Grocery Co.,
11.00%, 6/15/05............................ 5,000 4,900,000
-----------
9,090,000
-----------
<CAPTION>
Shares or
Moody's Principal
Investor Amount
Ratings+ (000) Value
- --------------------------------------------------------------------------------
<S> <C> <C>
TECHNOLOGY-4.4%
Ba1 Advanced Micro Devices,
11.00%, 8/01/03............................. $5,000 $ 5,075,000
B3 Exide Electronics Group, Inc.,
11.50%, 3/15/06 (a)......................... 2,000 1,970,000
UNISYS Corp.:
NR 12.00%, 4/15/03,
Series B.................................... 1,200 1,230,000
B1 12.00%, 4/15/03 (a)......................... 3,800 3,895,000
------------
12,170,000
------------
TELECOMMUNICATIONS-3.2%
NR IXC Communications, Inc.,
12.50%, 10/01/05 (a)(d)..................... 3,000 3,086,250
B3 Millicom International
Cellular S.A.,
13.50%, 6/01/06 (a)(f)...................... 5,000 2,700,000
B3 Wireless One Inc.,
13.50%, 8/01/06 (f)......................... 6,000 3,120,000
------------
8,906,250
------------
TEXTILES-1.2%
B1 CMI Industries, Inc.,
9.50%, 10/01/03............................. 3,800 3,372,500
------------
TRANSPORTATION-1.8%
Ba2 Stena AB,
10.50%, 12/15/05............................ 5,000 5,075,000
------------
Total Corporate Obligations
(cost $131,718,504)......................... 135,766,925
------------
YANKEE OBLIGATIONS-3.8%
B1 Grupo Industrial Durango,
12.625%, 8/01/03............................ 3,000 3,168,750
Ba3 Grupo Televisa S.A.,
Series B,
11.875%, 5/15/06 (a)........................ 7,000 7,385,000
------------
Total Yankee Obligations
(cost $10,122,500).......................... 10,553,750
------------
NON-CONVERTIBLE
PREFERRED STOCK-0.0%
Cablevision Systems Corp.
11.125%, Series M (g)
(cost $36,833).................................. 364 34,125
------------
</TABLE>
4
<PAGE>
Portfolio Of Investments (continued) ACM Managed Income Fund, Inc.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
- ---------------------------------------------------------
<S> <C> <C>
COMMON STOCKS & OTHER
INVESTMENTS-0.1%
Exide Electronics Groups, Inc.
Warrants, expiring
3/15/06 (e)(g)................. 2,000 $ 40,000
Eye Centers
Warrants, expiring
10/1/01 (e)(g)................. 3,000 30,000
Pegasus Media &
Communications (g)............ 400 240,000
--------
Total Common Stocks &
Other Investments
(cost $58,653)................ 310,000
--------
</TABLE>
<TABLE>
<CAPTION>
Value
- ---------------------------------------------------------
<S> <C>
TOTAL INVESTMENTS-109.6%
(cost $301,966,255)........... $301,633,049
Other Assets less
liabilities-(9.6%)............ (26,385,122)
------------
NET ASSETS-100.0% $275,247,927
============
</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, 1996, the market value of
these securities aggregated $66,306,250 or 24.1% of net assets.
(b) Rights are attached. The rights entitle the subscriber to four shares of
Common Stock for each right.
(c) Stated rate in effect until 2/15/99, 10.50% thereafter until maturity.
(d) Security will have an increased rate of 0.50% until registration under Rule
144A of the Securities Act of 1933 becomes effective. At that time interest
will accrue at the rate shown.
(e) Warrants entitle the Fund to purchase a predetermined number of shares of
stock at a predetermined price until the expiration date.
(f) 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.
(g) Non-income producing security.
Glossary of Terms:
NR - Not Rated.
REMIC - Real Estate Mortgage Investment Conduit.
See notes to financial statements.
5
<PAGE>
Statement Of Assets And Liabilities
August 31, 1996 ACM Managed Income Fund, Inc.
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS
Investments in securities, at value (cost $301,966,255)....................... $301,633,049
Cash.......................................................................... 8,148,297
Interest receivable........................................................... 5,683,040
Prepaid expenses and other assets............................................. 79,831
------------
Total assets.................................................................. 315,544,217
------------
LIABILITIES
Payable for investment securities purchased................................... 39,931,868
Advisory fee payable.......................................................... 150,149
Administrative fee payable.................................................... 46,200
Accrued expenses and other liabilities........................................ 168,073
------------
Total liabilities............................................................. 40,296,290
------------
NET ASSETS..................................................................... $275,247,927
============
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, 21,552,979 shares issued and outstanding......................... 215,530
Additional paid-in capital.................................................... 193,644,060
Undistributed net investment income........................................... 1,892,480
Accumulated net realized loss................................................. (15,170,937)
Net unrealized depreciation of investments (333,206)
------------
$275,247,927
============
NET ASSET VALUE PER SHARE OF COMMON STOCK
($275,247,927 less Remarketed Preferred Stock at liquidation
value of $95,000,000 divided by 21,552,979 shares of Common
Stock outstanding) $8.36
=====
- ---------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
6
<PAGE>
Statement Of Operations
For the Year Ended August 31, 1996 ACM Managed Income Fund, Inc.
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME
Interest............................................. $28,684,119
-----------
EXPENSES
Advisory fee......................................... $ 1,795,410
Administrative fee................................... 552,434
Remarketed Preferred Stock-remarketing agent's fees.. 241,458
Transfer agency...................................... 114,537
Audit & legal........................................ 106,014
Custodian............................................ 41,625
Directors' fees and expenses......................... 41,604
Registration fees.................................... 34,452
Reports and notices to shareholders.................. 31,631
Taxes................................................ 17,625
Miscellaneous........................................ 23,927
-----------
Total expenses....................................... 3,000,717
-----------
Net investment income................................ 25,683,402
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on investment transactions......... 1,247,689
Net change in unrealized appreciation of investments. (527,220)
-----------
Net gain on investments.............................. 720,469
-----------
NET INCREASE IN NET ASSETS FROM OPERATIONS............ $26,403,871
===========
</TABLE>
Statement Of Changes In Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Year Ended August 31,
-----------------------------
1996 1995
------------ -------------
<S> <C> <C>
INCREASE IN NET ASSETS FROM OPERATIONS
Net investment income.................................................... $ 25,683,402 $ 24,726,552
Net realized gain (loss) on investment transactions...................... 1,247,689 (1,038,747)
Net change in unrealized appreciation of investments..................... (527,220) 7,548,130
------------ ------------
Net increase in net assets from operations............................... 26,403,871 31,235,935
DIVIDENDS & DISTRIBUTIONS TO SHAREHOLDERS
Common Stock:
Dividends from net investment income..................................... (17,586,112) (17,251,646)
Distributions in excess of net investment income......................... --0-- (1,754,800)
Tax return of capital distribution....................................... --0-- (3,432,274)
Remarketed Preferred Stock:
Dividend from net investment income...................................... (4,308,241) (5,638,469)
COMMON STOCK TRANSACTIONS
Reinvestment of dividends resulting in the issuance of Common Stock...... 4,169,410 5,391,850
------------ ------------
Total increase........................................................... 8,678,928 8,550,596
NET ASSETS:
Beginning of year........................................................ 266,568,999 258,018,403
------------ ------------
End of year (including undistributed net investment income of $1,892,480
at August 31, 1996)..................................................... $275,247,927 $266,568,999
============ ============
- -------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
7
<PAGE>
Notes To Financial Statements
August 31, 1996 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.
- --------------------------------------------------------------------------------
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.
On November 28, 1995, the Fund entered into a Shareholder Inquiry Agency
Agreement with Alliance Fund Services, Inc. ("AFS"), an affiliate of the
Investment Adviser whereby the Fund reimburses AFS for costs relating to
servicing calls for the Fund. The Fund reimbursed AFS $5,962 during the year
ended August 31, 1996 relating to shareholder servicing costs.
Under the terms of an Administrative 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.
8
<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 $631,588,106 and
$624,012,630 respectively, for the year ended August 31, 1996. At August 31,
1996 the cost of investments for federal income tax purposes was $306,541,394.
Accordingly, gross unrealized appreciation of investments was $6,096,277 and
gross unrealized depreciation of investments was $11,004,622, resulting in net
unrealized depreciation of $4,908,345.
For federal income tax purposes, the Fund had a capital loss carryforward at
August 31, 1996 of $9,505,219 of which $6,192,707 will expire in 2003 and
$3,312,512 expires in 2004.
Capital losses incurred after October 31 within the fiscal year are deemed to
arise on the first business day of the Fund's next fiscal year. In accordance
with the Internal Revenue Code, the Fund incurred and will elect to defer long-
term capital losses of approximately $1,090,579 until fiscal 1997.
- --------------------------------------------------------------------------------
NOTE D: Capital Stock
There are 300,000,000 shares of $.01 par value capital stock authorized.
Common Stock
There are 21,552,979 shares of common stock outstanding at August 31, 1996.
During the years ended August 31, 1996 and August 31, 1995 the Fund issued
479,992 and 668,127 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 June 6, 1996, the Remarketed Preferred Stock
had a rate of 5.55% set for a special dividend period of 189 days.
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,
------------------------------------------------------
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year........... $ 8.14 $ 7.99 $ 10.79 $ 9.32 $ 8.39
-------- -------- -------- -------- --------
Income From Investment Operations
- ---------------------------------
Net investment income........................ 1.20 1.18 1.16 1.18 1.33
Net realized and unrealized gain (loss) on
investments and option transactions........ .04 .30 (1.07) 1.63 .83
-------- -------- -------- -------- --------
Net increase in net asset value from
operations................................. 1.24 1.48 .09 2.81 2.16
-------- -------- -------- -------- --------
Less: Distributions
- -------------------
Distributions to common shareholders:
Dividends from net investment income....... (.83) (.83) (1.09) (1.08) (.98)
Distributions from net realized gain on
investments............................ --0-- --0-- (1.48) (.09) --0--
Distributions in excess of net investment
income................................. --0-- (.09) (.09) --0-- --0--
Tax return of capital distribution......... --0-- (.16) (.04) --0-- --0--
Distributions to preferred shareholders:
Common Stock equivalent of dividends
paid to Remarketed Preferred
shareholders........................... (.19) (.25) (.19) (.17) (.24)
-------- -------- -------- -------- --------
Total dividends and distributions............ (1.02) (1.33) (2.89) (1.34) (1.22)
-------- -------- -------- -------- --------
Tender offer costs........................... --0-- --0-- --0-- --0-- (.01)
-------- -------- -------- -------- --------
Net asset value, end of year................. $ 8.36 $ 8.14 $ 7.99 $ 10.79 $ 9.32
======== ======== ======== ======== ========
Market value, end of year.................... $ 9.500 $ 9.375 $ 8.875 $ 11.375 $ 10.250
======== ======== ======== ======== ========
Total Return
- ------------
Total investment return based on: (a)
Market value............................... 11.39% 20.63% .66% 24.82% 36.73%
Net asset value............................ 12.89% 16.34% (4.42%) 30.22% 24.10%
Ratios/Supplemental Data
- ------------------------
Net assets, end of year (000's omitted)...... $275,248 $266,569 $258,018 $301,379 $267,580
Ratio of expenses to average net assets (b).. 1.09% 1.07% 1.14% 1.05% 1.09%
Ratio of net investment income to average
net assets (b)............................. 9.30% 9.69% 8.32% 8.06% 9.54%
Portfolio turnover rate...................... 360% 392% 366% 490% 630%
- -----------------------------------------------------------------------------------------------------
</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 year 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 years 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 years 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 years.
(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, 1996, 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, 1996, by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of ACM
Managed Income Fund, Inc. at August 31, 1996, 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 3, 1996
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 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 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 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 Friday, May 24, 1996. 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: Class Two Directors
(term expires in 1999)
David H. Dievler 19,712,601 335,836
Dr. James M. Hester 19,703,943 344,494
The Hon. Dr. James D. Hodgson 19,701,359 347,078
<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, 1996: 19,735,449 77,778 235,210
</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
Donald J. Robinson
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 9095
Princeton, NJ 08543-9095
COMMON STOCK:
CUSTODIAN, DIVIDEND PAYING AGENT,
TRANSFER AGENT AND REGISTRAR
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
PREFERRED STOCK:
DIVIDEND PAYING AGENT,
TRANSFER AGENT AND REGISTRAR
IBJ Schroder Bank & Trust Co.
1 State Street
New York, NY 10004
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>
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<PAGE>
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 Sunday 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](R)
Investing without the Mystery /SM/
(R)These registered service marks used under license from the owner,
Alliance Capital Management L.P.
MIFAR
ACM
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Managed
-----------------------
Income Fund
-----------------------
Annual Report
August 31, 1996
[LOGO] Alliance (R)
Investing without the Mystery /SM/
