ALLIANCE MUNICIPAL INCOME FUND II
ANNUAL REPORT
SEPTEMBER 30, 1995
LETTER TO SHAREHOLDERS ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
November 2, 1995
Dear Shareholder:
We are pleased to report municipal market activity and investment results for
Alliance Municipal Income Fund II's fiscal year ended September 30, 1995.
During the period, the Fund's nine Portfolios-Arizona, Florida, Massachusetts,
Michigan, Minnesota, New Jersey, Ohio, Pennsylvania and Virginia-have produced
superior total returns and high current tax-free income. Portfolio highlights
are listed below, and investment results and current yields for each Portfolio
appear on page 3. Also provided, on pages 4 through 7, are charts that show the
performance of $10,000 initial investments in Alliance Municipal Income Fund
Portfolios based on purchases of Class A shares from the time of the
Portfolio's inception date through the end of September.
HIGHLIGHTS OF INDIVIDUAL PORTFOLIOS
ISSUES RATED WEIGHTED
A OR BETTER AVG. MATURITY
------------ -------------
Arizona 95% 23 years
Florida 75 27
Massachusetts 91 22
Michigan 81 24
Minnesota 79 20
New Jersey 81 28
Ohio 79 25
Pennsylvania 78 25
Virginia 95 25
MARKET OVERVIEW
The superb performance of long-term municipal bonds in the first half of this
year continued through the end of October, producing the strongest investment
results experienced in this market since 1988.
The recovery from 1994's fixed income markets began in January and continued
throughout your Portfolios' fiscal year ended September 30, with prices and
yields approaching levels last seen in late 1993. This rally in bond prices was
due in part to continued signs of the United States' economy experiencing a
'soft landing' from its faster growth of 1994 while price inflation remained
subdued. The Federal Reserve Board also moved to lower short-term interest
rates for the first time since 1992, signaling an end to its aggressive policy
of monetary tightening that began early in 1994. Another contributor to
performance was favorable supply and demand conditions. Many state and local
governments had lower borrowing needs than in previous years, while the rapid
pace of redemptions through calls or maturities continued, reducing overall
supply of municipal bonds during the year.
As we anticipated, the Orange County, California, bankruptcy protection filing
has been an isolated event and the price dislocation that resulted from the
surprise filing has disappeared. Long term, we believe the bankruptcy filing
will serve to strengthen the municipal market. Specifically, financial
disclosure to investors has increased and many state and local governments have
enacted legislation to guard against future problems similar to those
experienced by the County.
The prospect of federal income tax legislation changing the tax benefits
associated with municipal securities has been the focus of the municipal market
during the past six months. Market fears of a flat tax, or worse, have caused
municipal bonds to trade near the high end of their historic range when
compared to U.S. Treasurys. We believe that any change in federal tax rates is
not likely until 1997 at the earliest, and that these changes will affect
tax-exempt bond holders less than currently projected. Furthermore, a decrease
in federal tax rates will most likely mean an increase in state tax rates as a
result of cutbacks in revenue sharing by Washington, creating a shift in the
tax burden but not lower combined tax rates.
INVESTMENT STRATEGY
As we discussed in our last letter, the market decline of 1994 provided a
unique opportunity to restructure the Portfolios to potentially profit from
longer-term economic and municipal market trends. Specifically, the Portfolios
were repositioned to prepare for a gradual decline in both interest rates and
the issuance of municipal securities. Bonds with unfavorable early redemption
provisions were sold in favor of securities with more call protection and more
total return (as opposed to just current income) potential than the bonds that
were sold. Also, our practice of staying fully invested in higher yielding,
long-term bonds has resulted in the Portfolios gaining maximum benefit from
favorable market conditions
1
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
this year. More recently we have been investing in securities we consider
undervalued while taking gains in bonds which have recently outperformed the
market, such as those issued by the new Denver International Airport. In
summary, the Portfolios' past performance combined with current market
conditions have afforded us the opportunity to selectively purchase undervalued
municipal bonds while gradually taking gains in bonds that have appreciated
fully in price.
MARKET OUTLOOK
The issue of tax reform will certainly be debated throughout the 1996
presidential election year. This will likely create market uncertainty, but we
believe that overall a hospitable environment for municipal bond investors will
prevail and that any market volatility will give us an opportunity to add value
to the Portfolios. Supply and demand technicals will provide some stability as
a record number of bonds will be called or mature in 1996. Furthermore, we
expect there is a strong possibility that legislation will be passed reducing
the capital gains tax rate, thus stimulating longer-term investing. Should
discussions on tax reform be resolved sooner rather than later, or if equity
markets were to decline significantly, we would expect very strong inflows of
new money into the municipal market. Notwithstanding the uncertainties of an
election year, we believe that the Portfolios will continue to deliver
outstanding relative investment results for shareholders in 1996.
We appreciate your investment in the Fund and look forward to reporting to you
again early next year.
Sincerely,
John D. Carifa
Chairman and President
Susan P. Keenan
Senior Vice President
2
INVESTMENT RESULTS
AS OF SEPTEMBER 30, 1995 ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
AVERAGE ANNUAL TOTAL RETURNS TAXABLE
----------------------------------- EQUIVALENT
WITHOUT WITH YIELD
SALES CHARGE SALES CHARGE 30 DAY IN 36%
---------------- ----------------- ------ -----------
1 SINCE 1 SINCE SEC TAX BRACKET+
YEAR INCEPTION* YEAR INCEPTION* YIELD (AT NAV)
------- --------- ------- --------- ------- -----------
ARIZONA PORTFOLIO
Class A Shares +11.56% +8.29% +6.86% +4.84% 5.00% 8.64%
Class B Shares +10.78% +7.53% +7.78% +6.05% 4.52% 7.66%
Class C Shares +10.89% +7.60% +10.89% +7.60% 4.50% 7.64%
FLORIDA PORTFOLIO
Class A Shares +14.44% +4.11% +9.64% +2.15% 5.21% 8.94%
Class B Shares +13.56% +3.33% +10.56% +2.92% 4.73% 7.77%
Class C Shares +13.56% +3.33% +13.56% +3.33% 4.73% 7.77%
MASSACHUSETTS PORTFOLIO
Class A Shares +10.19% +9.54% +5.50% +6.46% 5.12% 9.11%
Class B Shares +9.32% +8.71% +6.32% +7.44% 4.63% 8.05%
Class C Shares +9.32% +8.71% +9.32% +8.71% 4.65% 8.05%
MICHIGAN PORTFOLIO
Class A Shares +14.40% +6.56% +9.49% +3.73% 4.53% 8.55%
Class B Shares +13.58% +5.79% +10.58% +4.58% 4.03% 7.47%
Class C Shares +13.58% +5.79% +13.58% +5.79% 4.02% 7.47%
MINNESOTA PORTFOLIO
Class A Shares +9.63% +3.56% +4.94% +1.61% 5.15% 9.11%
Class B Shares +8.90% +2.80% +5.90% +2.39% 4.66% 7.92%
Class C Shares +8.89% +2.84% +8.89% +2.84% 4.67% 7.92%
NEW JERSEY PORTFOLIO
Class A Shares +12.91% +4.31% +8.14% +2.35% 5.06% 8.91%
Class B Shares +12.15% +3.58% +9.15% +3.17% 4.57% 7.72%
Class C Shares +12.14% +3.58% +12.14% +3.58% 4.58% 7.72%
OHIO PORTFOLIO
Class A Shares +11.63% +3.78% +6.91% +1.83% 5.25% 8.98%
Class B Shares +10.88% +3.05% +7.88% +2.65% 4.77% 7.80%
Class C Shares +10.88% +3.05% +10.88% +3.05% 4.78% 7.80%
PENNSYLVANIA PORTFOLIO
Class A Shares +11.53% +4.41% +6.76% +2.45% 5.08% 9.06%
Class B Shares +10.78% +3.68% +7.78% +3.27% 4.59% 7.89%
Class C Shares +10.78% +3.68% +10.78% +3.68% 4.59% 7.89%
VIRGINIA PORTFOLIO
Class A Shares +12.46% +8.07% +7.68% +4.85% 5.02% 8.72%
Class B Shares +11.67% +7.32% +8.67% +5.95% 4.54% 7.58%
Class C Shares +11.56% +7.32% +11.56% +7.32% 4.54% 7.58%
The average annual total returns reflect investment dividends and/or capital
gains distributions in additional shares with and without the effect of the
4.25% maximum sales charge (Class A) or 3% contingent deferred sales charge
(Class B); Class C shares are not subject to front-end or contingent deferred
sales charges. Past performance does not guarantee future results. Investment
return and principal value will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
* Inception: AZ, 6/1/94; MI, 2/25/94; FL, MN, NJ, OH, PA, 6/25/93; MA,
3/29/94; VA, 4/29/94.
+ Yields are for the 30 days ended September 30, 1995.
3
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
ALLIANCE MUNICIPAL INCOME FUND II
$10,000 INVESTMENT OVER LIFE OF FUND
ARIZONA PORTFOLIO
6/30/94 TO 9/30/95
FLORIDA PORTFOLIO
6/30/93 TO 9/30/95
MASSACHUSETTS PORTFOLIO
3/31/94 TO 9/30/95
4
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
ALLIANCE MUNICIPAL INCOME FUND II
$10,000 INVESTMENT OVER LIFE OF FUND
MICHIGAN PORTFOLIO
2/28/94 TO 9/30/95
MINNESOTA PORTFOLIO
6/30/93 TO 9/30/95
NEW JERSEY PORTFOLIO
6/30/93 TO 9/30/955
5
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
ALLIANCE MUNICIPAL INCOME FUND II
$10,000 INVESTMENT OVER LIFE OF FUND
OHIO PORTFOLIO
6/30/93 TO 9/30/95
PENNSYLVANIA PORTFOLIO
6/30/93 TO 9/30/95
6
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
ALLIANCE MUNICIPAL INCOME FUND II
$10,000 INVESTMENT OVER LIFE OF FUND
VIRGINIA PORTFOLIO
4/30/94 TO 9/30/95
ABOUT YOUR PORTFOLIO'S HYPOTHETICAL INVESTMENT...
These charts illustrate the total value of assumed $10,000 investments in each
of Alliance Municipal Income Fund's Portfolios' Class A shares (since
inception), after deducting the maximum 4.25% sales charge and with dividends
and capital gains reinvested. 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. Results should not be considered
representative of future gain or loss in capital value or dividend income.
The Lehman Brothers Long Municipal Bond Index includes 15,000 issues with
maturities exceeding 22 years. The bonds in this Index are a combination of
both revenue and general obligation issues, and carry a rating of BAA/Baa or
higher.
The Lipper Arizona Municipal Debt Funds Average reflects performance of 37
funds; the Lipper Florida Municipal Debt Funds Average reflects performance of
49 funds; the Lipper Massachusetts Municipal Debt Funds Average reflects
performance of 39 funds; the Lipper Michigan Municipal Debt Funds Average
reflects performance of 46 funds; the Lipper Minnesota Municipal Debt Funds
Average reflects performance of 46 funds; the Lipper New Jersey Municipal Debt
Funds Average reflects performance of 52 funds; the Lipper Ohio Municipal Debt
Funds Average reflects performance of 52 funds; the Lipper Pennsylvania
Municipal Debt Funds Average reflects performance of 36 funds, and the Lipper
Virginia Municipal Debt Funds Average reflects performance of 33 funds. The
funds tracked by Lipper Analytical Services have generally similar investment
objectives to the applicable Alliance Municipal Income Fund Portfolio, although
some of the funds may have somewhat different investment policies.
When comparing an Alliance Municipal Income Fund Portfolio to the corresponding
index and average, you should note that the Portfolios' performance reflects
the maximum sales charge of 4.25%, while no such charges are reflected in the
performance of the index or averages.
7
ARIZONA PORTFOLIO
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1995 ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS+ (000) VALUE
- ----------------------------------------------------------------------
ARIZONA MUNICIPAL BONDS-97.3%
AAA Maricopa Cnty IDR
(Citizens Utilities) AMT
6.20%, 5/01/30 $265 $268,994
AAA Maricopa Cnty Sch
Dist #28 GO (Kyrene Elementary)
FGIC Ser 95B
6.00%, 7/01/14 285 290,201
AAA Maricopa Cnty
Sch Dist #80 GO (Chandler) FGIC Ser 95
6.00%, 7/01/13 265 272,166
AAA Maricopa Cnty IDR
Hlth Fac (Samaritan Hlth) MBIA Ser 90A
7.00%, 12/01/13 555 599,761
AA- Mohave Cnty IDR
(Cargill) Ser 95A AMT
6.70%, 3/01/20 600 619,320
BBB Navajo Cnty PCR
(Arizona Public Service) Ser 93A
5.875%, 8/15/28 310 291,375
AAA Phoenix Arpt Rev
Arpt Improvement MBIA Ser 94D AMT
6.40%, 7/01/12 550 572,918
AA+ Phoenix Civic Plaza Bldg Corp
Ser 94
6.00%, 7/01/12 295 302,959
AA Phoenix IDR
MFHR (Woodstone & Silver Springs)
6.25%, 4/01/23 265 266,126
AAA Pima Cnty IDR
Hosp Rev (Tucson Med Ctr) MBIA Ser 93A
5.00%, 4/01/15 315 282,416
AAA Pima Cnty IDR
(Tucson Elec Pwr) FSA
Ser 88A
7.25%, 7/15/10 535 589,773
AA Salt River Proj Agriculture
Imp & Pwr Dist Elec Sys
5.75%, 1/01/19 300 295,059
AAA Tempe IDR
(Quadrangles) FHA
6.25%, 6/01/26 300 300,183
AAA Yavapai Cnty Sch
District #22 GO (Humboldt) FGIC
5.95%, 7/01/14 290 295,119
AAA Yuma IDR
(Alexandrite Sands Apt)
MFHR FHA Ser 90 AMT
7.70%, 12/01/29 595 615,284
TOTAL INVESTMENTS-97.3%
(cost $5,696,095) 5,861,654
Other assets less liabilities-2.7% 164,565
NET ASSETS-100% $6,026,219
+ Unaudited.
See Glossary of Terms on page 17.
See notes to financial statements.
8
FLORIDA PORTFOLIO
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1995 ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS+ (000) VALUE
- -----------------------------------------------------------------------
MUNICIPAL BONDS-98.6%
FLORIDA-90.4%
Aaa* Brevard Cnty Hsg Fin Agy
SFMR FHA/VA Ser 94 AMT
6.70%, 9/01/27 $5,000 $ 5,076,850
AAA Brevard Cnty IDR
(NUI Corp Project) AMBAC
6.40%, 10/01/24 2,975 3,094,030
BBB+ Collier Cnty Hlth Fac
(The Moorings Proj) Ser 94
7.00%, 12/01/19 2,000 2,054,280
AAA Dade Cnty Arpt Rev
(Miami Int'l Arpt) MBIA Ser 95B AMT
6.00%, 10/01/24 4,500 4,475,430
A* Dade Cnty Spec Obl
(Courthouse Ctr Proj) Ser 95
6.10%, 4/01/20 5,000 4,993,650
BBB Escambia Cnty PCR
(Champion Int'l Corp) Ser 94 AMT
6.90%, 8/01/22 2,980 3,113,653
AAA Florida Hsg Fin Agy
Home Mtg SFMR Ser 95A AMT
6.65%, 1/01/24 5,200 5,378,256
AAA Florida St Turnpike
Auth Rev FGIC Ser 95A
5.625%, 7/01/25 3,200 3,068,320
AAA Hillsborough Cnty Aviation
Auth (Tampa Int'l Arpt) FGIC Ser 93D AMT
5.40%, 10/01/13 4,800 4,546,224
AAA Jacksonville Wtr & Swr
(United Waterworks) AMBAC Ser 95 AMT
6.35%, 8/01/25 1,500 1,545,120
BBB+ Lake Cnty Res Rec
(NRG Rec Group) Ser 93A AMT
5.95%, 10/01/13 $3,250 $3,058,672
BBB- Martin Cnty IDR
(Indiantown Co-Generation Proj) Ser 94A AMT
7.875%, 12/15/25 4,000 4,390,840
AA- Orlando Util Comm
Wtr & Elec Sub Rev
5.60%, 10/06/17 3,200 3,117,120
AAA Pinellas Cnty Hlth Fac
(Morton Plant Hlth) MBIA
5.50%, 11/15/18 3,300 3,134,373
Aaa* Pinellas Cnty Hsg Fin Auth
SFMR Ser A AMT
6.55%, 8/01/27 2,500 2,534,500
A* Venice Hlth Fac
(Venice Hosp) Ser 94
6.00%, 12/01/04 1,650 1,803,698
AAA Volusia Cnty (Daytona
Beach Int'l) MBIA Ser 93 AMT
5.625%, 10/01/21 2,000 1,927,320
57,312,336
WASHINGTON-4.9%
BBB Pilchuck Wtr Dev Pub Corp
Spec Fac Arpt (BF Goodrich)
Ser 93 AMT
6.00%, 8/01/23 3,350 3,131,312
ALASKA-3.3%
A+ Alaska Hsg Fin Corp
SFMR Ser 93I
5.90%, 12/01/33 2,200 2,079,220
TOTAL INVESTMENTS-98.6%
(cost $60,792,693) 62,522,868
Other assets less liabilities-1.4% 879,881
NET ASSETS-100% $63,402,749
+ Unaudited.
* Moody's Rating.
See Glossary of Terms on page 17.
See notes to financial statements.
9
MASSACHUSETTS PORTFOLIO
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1995 ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS+ (000) VALUE
- ----------------------------------------------------------------------
MASSACHUSETTS MUNICIPAL BONDS-97.5%
AAA Chelsea GO AMBAC
6.00%, 6/15/14 $250 $ 252,725
AAA Essex Cnty
So Essex Sew Dist MBIA Ser 94B
7.00%, 6/01/24 565 616,658
AAA Lowell GO
FSA Ser 93A
5.50%, 1/15/10 265 261,113
AAA Massachusetts Ed Fin Auth
Educational Loan Rev AMBAC Ser 94E AMT
6.00%, 1/01/12 270 268,034
AAA Massachusetts GO
MBIA Ser 95A
5.75%, 2/01/15 285 283,002
A- Massachusetts Hlth & Ed
Fac Auth Hosp Rev (Jordan Hosp) Ser 92B
6.875%, 10/01/15 215 221,897
Baal* Massachusetts Hlth & Ed
Fac Auth Hosp Rev
(Metro West Hlth) Ser 92C
6.50%, 11/15/18 520 509,007
AAA Massachusetts Hlth & Ed
Fac Auth Hosp Rev (New England Med Ctr.)
MBIA Ser 94
5.38%, 7/01/18 230 214,482
AAA Massachusetts Hsg Fin Auth
MFHR Residential Dev AMBAC Ser 93A
6.15%, 10/01/15 280 278,088
AAA Massachusetts Hsg Fin Auth
MFHR Residential Dev FNMA Ser 92F
6.25%, 11/15/12 245 249,748
A+ Massachusetts Hsg Fin Auth
SFMR Ser 40 AMT
6.65%, 12/01/27 830 836,590
AAA Massachusetts Muni
Wholesale Elec Pwr Supply Sys MBIA Ser 92A
6.00%, 7/01/18 265 266,572
A Massachusetts Wtr Res Auth
Ser 92B
5.50%, 11/01/15 290 273,838
AA- Massachusetts Wtr Pollution
Abatement (So Essex Prog) Ser 94A
6.375%, 2/01/15 265 275,224
A1* New England Ed Loan Mktg
(Student Loan Rev) Ser 92H AMT
6.90%, 11/01/09 645 695,774
TOTAL INVESTMENTS-97.5%
(cost $5,388,233) 5,502,752
Other assets less liabilities-2.5% 143,804
NET ASSETS-100% $5,646,556
+ Unaudited.
* Moody's Rating.
See Glossary of Terms on page 17.
See notes to financial statements.
10
MICHIGAN PORTFOLIO
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1995 ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS+ (000) VALUE
- -----------------------------------------------------------------------
MICHIGAN MUNICIPAL BONDS-100.7%
BBB+ Battle Creek
Downtown Dev Auth Ser 94
7.65%, 5/01/22 $ 430 $ 475,443
AAA Brighton Area School Dist
GO AMBAC Ser 92 II
Zero coupon, 5/01/20 2,130 498,228
BBB Detroit GO Ser 93
6.35%, 4/01/14 400 392,328
AAA Detroit Econ Dev Corp
Res Rec Rev FSA Ser 91A AMT
6.875%, 5/01/09 1,055 1,126,761
AAA Detroit Sewage Disposal
Sys Rev FGIC Ser 93A
5.70%, 7/01/23 400 387,932
AAA Grand Ledge
Sch Dist GO MBIA Ser 94
7.875%, 5/01/11 300 354,663
AAA Grand Rapids Swr Sys
Rev MBIA
6.00%, 1/01/22 505 503,616
AAA Kalamazoo Hosp Fin Auth
(Borgess Med Ctr) FGIC
5.244%, 6/01/11 410 393,969
AAA Kent Cnty Arpt Fac
Rev Ser 95 AMT
6.10%, 1/01/25 450 451,035
AAA Lowell Area School Dist GO FGIC
Zero coupon, 5/01/19 2,000 491,780
AAA Michigan Hosp Fin Auth
Hosp Rev (St Johns Hosp) AMBAC Ser 92A
6.00%, 5/15/13 450 455,202
AA+ Michigan Hsg Dev Auth
Mtg Rev SFMR Ser 95B AMT
7.05%, 6/01/26 935 973,363
BBB+ Michigan Strategic Fund
PCR (General Motors)
6.20%, 9/01/20 1,100 1,110,989
AAA Monroe Cnty PCR
(Detroit Edison) MBIA Ser I-B AMT
6.55%, 9/01/24 1,000 1,033,770
AA Troy MI Downtown Dev Auth
Asset Gty Ser 95A
6.375%, 11/01/18 470 471,340
AAA Wayne Charter Cnty Arpt
Rev (Detroit Metro Arpt) MBIA Ser 91B AMT
6.75%, 12/01/21 905 944,630
AAA Yale Pub Sch Dist GO AMBAC
5.50%, 5/01/23 500 470,950
TOTAL INVESTMENTS-100.7%
(cost $10,198,487) 10,535,999
Other assets less liabilities-(0.7%) (68,176)
NET ASSETS-100% $10,467,823
+ Unaudited.
See Glossary of Terms on page 17.
See notes to financial statements.
11
MINNESOTA PORTFOLIO
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1995 ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS+ (000) VALUE
- ----------------------------------------------------------------------
MINNESOTA MUNICIPAL BONDS-97.5%
A- Bass Brook PCR
(Minn Power & Light)
6.00%, 7/01/22 $600 $ 584,358
AAA Burnsville Eagan Savage
Ind Sch Dist #191 GO CGIC Ser 95A
6.20%, 2/01/17 600 623,604
AA+ Duluth Arpt Lease Rev St
Secured GO Ser 95C AMT
6.25%, 8/01/14 800 821,168
Aa* Fairbault Ind Sch Dist #656 GO
6.20%, 6/01/12 600 619,806
AAA Lakeville Ind
Sch Dist #194 GO FGIC
5.60%, 2/01/18 800 784,944
BBB+ Minneapolis Community Dev
Agy Supported Ser 95-2 AMT
6.625%, 12/01/15 1,245 1,249,868
AAA Minneapolis GO SFMR
Homeownership Renov Stage III
Ser 93 AMT
5.70%, 12/01/23 650 604,467
AA+ Minnesota Hsg Fin Agy
SFMR Ser 89A AMT
7.90%, 7/01/19 1,945 2,020,369
AAA Minnesota Pub Fac Auth
Wtr Pol Ctl Rev Ser 95A
6.25%, 3/01/16 610 640,927
AAA Northern MN Muni Pwr Agy
AMBAC Ser 92B
5.50%, 1/01/18 800 772,072
AAA Northern St Paul Maplewood
Ind Sch Dist #622 GO MBIA Ser 94A
6.875%, 2/01/15 2,000 2,202,920
AAA Pierz Ind Sch Dist #484 GO AMBAC
5.375%, 6/01/15 650 625,157
AAA Robbinsdale Hosp Rev
(No. Memorial Med Ctr) AMBAC Ser 93A
5.45%, 5/15/13 600 576,336
AA+ Rochester Hosp Rev
(Mayo Med Ctr) Ser 92F
6.25%, 11/15/21 700 717,521
BBB- South St. Paul Hsg & Redev
(Health East Proj) Ser 94
6.75%, 11/01/09 2,100 2,154,180
AAA St Francis Ind
Sch Dist # 15 GO CGIC Ser 95A
6.375%, 2/01/16 800 841,624
A Western MN Muni Pwr Ser 87A
5.50%, 1/01/15 800 752,016
TOTAL INVESTMENTS-97.5%
(cost $15,717,752) 16,591,337
Other assets less liabilities-2.5% 426,264
NET ASSETS-100% $17,017,601
+ Unaudited.
* Moody's Rating.
See Glossary of Terms on page 17.
See notes to financial statements.
12
NEW JERSEY PORTFOLIO
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1995 ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS+ (000) VALUE
- ----------------------------------------------------------------------
NEW JERSEY MUNICIPAL BONDS-98.5%
AAA Burlington Cnty
(Evesham Muni Util Auth) MBIA Ser A
5.60%, 7/01/15 $1,500 $ 1,468,290
AAA Camden Cnty Muni Util
Sewer Rev FGIC Ser 90A
Zero coupon, 9/01/17 5,000 1,437,950
BBB+ Camden Cnty Pol Ctl Fin
Solid Waste Resource Recovery
Ser 91B AMT
7.50%, 12/01/09 2,100 2,149,728
AAA Cape May Cnty Util Auth
Sewer Rev MBIA Ser A
5.75%, 1/01/16 3,000 3,006,060
AAA Cape May Cnty Pol Ctl
PCR (Atlantic City Elec Co)
MBIA Ser 94A AMT
7.20%, 11/01/29 5,000 5,646,350
AAA Essex Cnty Imp Auth Util
Rev (Orange Twp) Ser 93 MBIA
6.00%, 12/01/17 2,510 2,557,539
AA Gloucester Cnty PCR
(Mobil Oil Refining) Ser 93
5.625%, 12/01/28 3,000 2,859,300
AAA New Jersey Eco Dev Auth
(Hackensack Wtr Co) MBIA Ser 94B AMT
5.90%, 3/01/24 3,600 3,605,292
BB+ New Jersey Eco Dev Auth
Spec Fac (American Airlines) AMT
7.10%, 11/01/31 4,500 4,684,410
AAA New Jersey Eco Dev Auth
Wtr Fac (NJ American Wtr Co) FGIC AMT
6.875%, 11/01/34 5,000 5,362,500
BBB- New Jersey Hlth Care Fac
Hlth Fac (Franciscan Sisters,
St. Mary's Hosp) Ser 93
5.875%, 7/01/12 2,755 2,591,243
AAA New Jersey Hlth Care Fac
Fin Hlth Fac (Monmouth Med Ctr)
CGIC Ser 93
6.25%, 7/01/24 2,750 2,856,508
BBB New Jersey Hlth Care Fac
(Englewood Hosp & Med Ctr) Ser 94
6.75%, 7/01/24 3,230 3,283,812
AA- New Jersey Hwy Auth
Garden State Parkway
6.25%, 1/01/14 1,250 1,283,000
AAA New Jersey Hsg & Mtg Fin Agy AMT
6.35%, 10/01/27 3,000 3,017,460
A+ New Jersey Hsg & Mtg Fin
Agy MFHR (Sect 8) Ser 1
6.70%, 11/01/28 5,450 5,644,238
AA- Port Auth of NY & NJ Cons
Rev 95th Ser AMT
6.125%, 7/15/29 3,000 2,980,560
AA Salem Cnty NJ Auth
Waste Disposal Rev (E. I. Dupont)
6.125%, 7/15/22 3,500 3,526,740
A- Union Cnty Util Auth Solid
Waste Rev Ser 91A AMT
7.15%, 6/15/09 5,000 5,266,900
AAA Vineland Swr Rev
(Landis Sewerage Auth)
Reg linked Stars & Cars FGIC
5.65%, 9/19/19 3,400 3,350,972
TOTAL INVESTMENTS-98.5%
(cost $63,952,197) 66,578,852
Other assets less liabilities-1.5% 983,141
NET ASSETS-100% $67,561,993
+ Unaudited.
See Glossary of Terms on page 17.
See notes to financial statements.
13
OHIO PORTFOLIO
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1995 ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS+ (000) VALUE
- ----------------------------------------------------------------------
OHIO MUNICIPAL BONDS-100.7%
BBB- Butler Cnty Hosp Rev
(Fort Hamilton Hughes)
7.50%, 1/01/10 $1,400 $ 1,445,178
A1* Cincinnati Student Loan
Funding Corp AMT Ser 93A
6.15%, 8/01/10 2,000 2,003,460
AAA Clermont Cnty Wtr Sys Rev
(Clermont Cnty Swr) AMBAC Ser 93
5.70%, 12/01/13 2,250 2,234,723
AAA Cleveland Arpt Rev
(Cleveland Int'l Arpt) FGIC Ser A AMT
6.25%, 1/01/20 2,000 2,039,140
A Cuyahoga Cnty Hosp Rev
(Meridia Health Sys)
6.25%, 8/15/24 2,500 2,548,025
BBB Hamilton Cnty Hlth Sys
(Hlth Fac & Franciscan
Sisters Providence Hosp)
6.875%, 7/01/15 2,500 2,524,950
Aaa* Kent Ohio
(Silver Meadows Apt Proj)
Ser 95 MFHR AMT
7.15%, 12/20/26 2,000 2,088,320
AAA Lucas Cnty Hosp Rev
(St. Vincent Med Ctr) MBIA
5.45%, 8/15/14 1,575 1,494,848
NR Mahoning Valley Sanitary
Dist (Wtr Rev) Ser 94
7.75%, 5/15/14 2,500 2,642,350
Baa2* Ohio Air Quality Dev Auth
(Columbus Southern Pwr) PCR Ser 85B
6.25%, 12/01/20 3,000 2,980,860
AAA Ohio Air Quality Dev Auth
(JMG Funding/Ohio Pwr) AMBAC AMT
6.375%, 4/01/29 2,000 2,051,620
AA- Ohio Air Quality Dev Auth
PCR (Dayton Pwr & Light) Ser 92B
6.40%, 8/15/27 $2,500 $2,588,575
AAA Ohio Capital Corp
Sect 8 Assist MBIA
6.35%, 1/01/22 1,965 1,976,377
AAA Ohio Higher Ed Fac
Ohio Northern Univ Proj
5.60%, 5/01/13 2,100 2,069,886
Aa* Ohio Hsg Fin Agy Mtg
FHA (Insured Bridgeview Villas II)
MFHR AMT
6.45%, 12/01/33 1,965 1,978,794
AAA Ohio Hsg Fin Agy
Residential Mtg SFMR GNMA Coll Ser B2 AMT
6.70%, 3/01/25 3,890 3,980,287
AAA Ohio Muni Elec
Generation Agy (Belleville Hydroelec)
AMBAC
5.375%, 2/15/13 2,500 2,410,975
AA- Ohio Turnpike Commission
Turnpike Rev Ser 94A
5.75%, 2/15/24 1,750 1,713,898
AAA Ohio Wtr Dev Auth Rev
Ref-Coll (Cincinnati G&E) MBIA
5.45%, 1/01/24 2,000 1,871,580
A Ohio Wtr Dev Auth
(North Star BHP) AMT
6.45%, 9/01/20 2,500 2,524,625
TOTAL INVESTMENTS-100.7%
(cost $43,021,896) 45,168,471
Other assets less liabilities-(0.7%) (303,665)
NET ASSETS-100% $44,864,806
+ Unaudited.
* Moody's Rating.
See Glossary of Terms on page 17.
See notes to financial statements.
14
PENNSYLVANIA PORTFOLIO
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1995 ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS+ (000) VALUE
- ----------------------------------------------------------------------
PENNSYLVANIA MUNICIPAL BONDS-98.5%
AAA Allegheny Cnty Arpt Rev
(Pittsburgh Int'l) FSA Ser 92B AMT
6.625%, 1/01/22 $5,000 $ 5,173,950
AAA Allegheny Cnty
(Elizabeth Forward) MBIA-Ser 95B
Zero Coupon, 9/01/16 2,170 634,291
Zero Coupon, 9/01/17 2,170 591,715
AAA Berks Cnty Sewer Rev
(Exeter Twp) MBIA
6.20%, 7/15/22 2,905 2,957,668
A- Bradford Cnty IDA
Solid Waste Disposal (Int'l Paper)
95A AMT
6.60%, 3/01/19 2,500 2,533,775
AAA Butler Cnty Hospital Auth
(Butler Mem Hosp) FSA Ser A,
5.25%, 7/01/12 2,500 2,328,375
AAA Delaware County IDA
Higher Ed (Villanova University) MBIA
5.50%, 8/01/23 2,500 2,363,875
A New Morgan IDA Solid
Waste (Browning Ferris) Ser 94 AMT
6.50%, 4/01/19 2,500 2,561,050
BBB- Pennsylvania Convention Ctr
Auth Ref Rev Ser 94A
6.75%, 9/01/19 2,500 2,631,950
BBB- Pennsylvania Econ Dev
Fin Auth (Macmillan Bloedel Clarion Proj)
95 AMT
7.60%, 12/01/20 3,000 3,271,170
BBB+ Pennsylvania Econ Dev
Auth Wastewater Rev
(Sun Company) Ser 94A AMT
7.60%, 12/01/24 3,000 3,273,330
AA Pennsylvania Hsg Fin Agy
7.604%, 4/01/25(a) 4,500 4,435,965
AAA Pennsylvania Higher Ed
Student Loan AMBAC Ser 88D AMT
6.05%, 1/01/19 700 704,011
AAA Pennsylvania Intergov Coop
Auth (Special Tax Rev) FGIC Ser 94
7.00%, 6/15/14 4,425 4,841,570
AAA Pennsylvania Turnpike
Commission Oil Franchise
Tax Rev Ser 94A AMBAC
6.00%, 12/01/19 2,400 2,411,376
AAA Philadelphia Airport System
Rev Ser 95A AMBAC AMT
6.10%, 6/15/25 2,600 2,571,556
A- Philadelphia Hosp
Rev (Temple Univ) Ser 93A
6.625%, 11/15/23 2,000 1,983,420
AAA Philadelphia Muni Auth
(Criminal Justice Proj) Ser 93A FGIC
5.625%, 11/15/18 2,000 1,923,620
A Pittsburgh Urban Redev
Mtg Rev Ser 95A AMT
7.15%, 10/01/27 2,000 2,076,180
BBB+ Warren Cnty Hosp Rev
(Warren Gen Hosp Proj) Ser 94B
7.00%, 4/01/19 2,200 2,260,808
TOTAL INVESTMENTS-98.5%
(cost $49,322,240) 51,529,655
Other assets less liabilities-1.5% 802,302
NET ASSETS-100% $52,331,957
+ Unaudited
* Moody's Rating.
(a) Inverse floater security-the interest rate is subject to change
periodically.
See Glossary of Terms on page 17.
See notes to financial statements.
15
VIRGINIA PORTFOLIO
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1995 ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS+ (000) VALUE
- ----------------------------------------------------------------------
VIRGINIA MUNICIPAL BONDS-97.7%
AAA Chesapeake Bay MBIA
(Bridge & Tunnel Auth)
5.75%, 7/01/25 $ 155 $ 150,474
A+ Fairfax Cnty Econ Dev Auth
Res Rec (Ogden Martin System) Ser 88A AMT
7.75%, 2/01/11 135 147,959
A- Hampton Museum Rev Ref Ser 94
5.25%, 1/01/14 160 148,966
AA Henrico Cnty IDR
(Henrico Cnty Reg Jail)
7.125%, 8/01/21 270 306,987
A- Isle of Wight Cnty IDA
Solid Waste (Union Camp Corp) Ser 94 AMT
6.55%, 4/01/24 110 112,002
AAA Washington Metro Airport
Auth Airport Rev Ser 94A MBIA AMT
5.75%, 10/01/20 140 134,621
BBB+ Peninsula Port Auth Hlth
Fac (Mary Immaculate Proj) Ser 94
7.00%, 8/01/17 150 156,101
A* Prince William Cnty
Hosp Rev IDA (Potomac Hosp Group)
6.75%, 10/01/15 190 203,066
AAA Richmond Metro Auth
Expwy Rev Ser B FGIC
6.25%, 7/15/22 145 147,826
AAA Richmond Redev & Hsg Auth
Mtg Rev (Ref-Multi-Jefferson-A) FHA
6.50%, 4/01/27 250 252,455
AA Richmond GO Pub Impt Ser 91A
6.25%, 1/15/21 290 293,341
AA Virginia Beach Hlth Care
Hosp Rev (Sentara Bayside)
6.30%, 11/01/21 120 122,424
AA Virginia College Bldg Auth
Ed Fac Rev (Washington & Lee)
5.80%, 1/01/24 190 190,560
A* Virginia Ed Loan Auth
Student Loan Program Ser 93G AMT
6.15%, 9/01/09 160 159,397
AA+ Virginia Hsg Dev Auth
(Commonwealth Mtg) SFMR Ser 94G AMT
7.125%, 7/01/22 430 452,541
AA Virginia Resources Auth Swr
Rev (Hopewell Regl Waste Wtr)
Ser 95A AMT
6.00%, 10/01/25 120 118,194
TOTAL INVESTMENTS-97.7%
(cost $3,006,168) 3,096,914
Other assets less liabilities-2.3% 73,525
NET ASSETS-100% $3,170,439
+ Unaudited.
* Moody's Rating.
See Glossary of Terms on page 17.
See notes to financial statements.
16
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
GLOSSARY OF TERMS
AMBAC American Municipal Bond Assurance Corporation
AMT Alternative Minimum Tax - Subject to
CGIC Capital Guaranty Insurance Company
FGIC Financial Guaranty Insurance Company
FHA Federal Housing Administration
FNMA Federal National Mortgage Association
FSA Financial Security Assurance, Inc.
GNMA Government National Mortgage Association
GO General Obligation
IDA Industrial Development Authority
IDR Industrial Development Revenue
MBIA Municipal Bond Investors Assurance
MFHR Multi-Family Housing Revenue
PCR Pollution Control Revenue
SFMR Single Family Mortgage Revenue
VA Veterans Administration
17
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1995 ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
ARIZONA FLORIDA MASSACHUSETTS
------------ ------------ -------------
ASSETS
Investment in securities, at value
(cost $5,696,095, $60,792,693,
$5,388,233, $10,198,487, $15,717,752,
$63,952,197, $43,021,896,$49,322,240,
$3,006,168,respectively) $5,861,654 $62,522,868 $5,502,752
Interest receivable 113,800 1,207,232 127,681
Receivable due from Adviser 73,562 -0- 93,484
Receivable for shares of beneficial
interest sold 27,004 158,128 40,611
Receivable for investment securities
sold -0- -0- -0-
Other assets 32,714 40,044 24,906
Total assets 6,108,734 63,928,272 5,789,434
LIABILITIES
Due to custodian 37,259 327,483 31,394
Dividends payable 8,600 88,898 8,163
Distribution fee payable 3,487 45,178 3,778
Advisory fee payable -0- 5,380 -0-
Payable for investment securities
purchased -0- -0- -0-
Payable for shares of beneficial
interest redeemed -0- 13,365 61,000
Accrued expenses and other liabilities 33,169 45,219 38,543
Total liabilities 82,515 525,523 142,878
NETASSETS $6,026,219 $63,402,749 $5,646,556
CLASS A SHARES
Net assets $2,378,902 $11,955,489 $1,336,932
Shares of beneficial interest
outstanding 231,097 1,248,497 127,383
CLASS B SHARES
Net assets $3,166,496 $20,659,780 $1,753,755
Shares of beneficial interest
outstanding 307,652 2,156,648 167,145
CLASS C SHARES
Net assets $ 480,821 $30,787,480 $2,555,869
Shares of beneficial interest
outstanding 46,698 3,213,407 243,574
COMPOSITION OF NET ASSETS
Shares of beneficial interest, at par $ 5,855 $ 66,186 $ 5,381
Additional paid-in capital 5,854,199 69,702,675 5,499,233
Distributions in excess of
net investment income (4,704) (21,287) (10,073)
Accumulated net realized gain (loss) 5,310 (8,075,000) 37,496
Net unrealized appreciation of
investments 165,559 1,730,175 114,519
----------- ------------ ------------
$6,026,219 $63,402,749 $5,646,556
CALCULATION OF MAXIMUM OFFERING PRICE
CLASS A SHARES
Net asset value and redemption price
per share $10.29 $ 9.58 $10.50
Sales charge-4.25% of public
offering price .46 .43 .47
Maximum offering price $10.75 $10.01 $10.97
CLASS B SHARES
Net asset value and offering price
per share $10.29 $ 9.58 $10.49
CLASS C SHARES
Net asset value, redemption and
offering price per share $10.30 $ 9.58 $10.49
See notes to financial statements.
18
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
<TABLE>
<CAPTION>
MICHIGAN MINNESOTA NEW JERSEY OHIO PENNSYLVANIA VIRGINIA
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
$10,535,999 $16,591,337 $66,578,852 $45,168,471 $51,529,655 $3,096,914
178,317 296,002 1,197,300 668,735 1,066,968 58,408
29,292 79,301 -0- 18,505 -0- 82,065
89,577 9,859 268,947 92,967 297,067 20,792
750,547 154,734 -0- 2,221,517 -0- -0-
18,988 37,755 37,755 39,475 51,233 20,911
11,602,720 17,168,988 68,082,854 48,209,670 52,944,923 3,279,090
56,944 27,835 305,103 3,174,513 165,336 73,872
14,588 24,647 94,816 62,860 74,586 4,503
5,495 12,639 48,560 35,030 37,956 1,484
-0- -0- 11,689 -0- 8,499 -0-
1,030,655 -0- -0- -0- 99,999 -0-
-0- 44,423 29,284 26,929 185,954 -0-
27,215 41,843 31,409 45,532 40,636 28,792
1,134,897 151,387 520,861 3,344,864 612,966 108,651
$10,467,823 $17,017,601 $67,561,993 $44,864,806 $52,331,957 $3,170,439
$ 5,157,780 $2,413,420 $11,611,727 $ 4,169,466 $ 8,721,280 $1,855,165
510,755 254,269 1,203,112 437,391 904,319 180,265
$ 2,424,459 $7,299,371 $34,695,571 $21,821,426 $28,558,363 $1,193,045
240,155 768,809 3,593,479 2,287,840 2,960,544 115,917
$ 2,885,584 $7,304,810 $21,254,695 $18,873,914 $15,052,314 $ 122,229
285,821 769,089 2,201,042 1,978,893 1,560,259 11,877
$ 10,367 $ 17,922 $ 69,976 $ 47,041 $ 54,251 $ 3,081
10,135,256 18,407,896 71,502,123 48,339,314 54,829,271 3,067,888
(11,930) (22,551) (81,399) (39,696) (60,987) (3,234)
(3,382) (2,259,251) (6,555,362) (5,628,428) (4,697,993) 11,958
337,512 873,585 2,626,655 2,146,575 2,207,415 90,746
$10,467,823 $17,017,601 $67,561,993 $44,864,806 $52,331,957 $3,170,439
$10.10 $ 9.49 $ 9.65 $ 9.53 $ 9.64 $10.29
.45 .42 .43 .42 .43 .46
$10.55 $ 9.91 $10.08 $ 9.95 $10.07 $10.75
$10.10 $ 9.49 $ 9.66 $ 9.54 $ 9.65 $10.29
$10.10 $ 9.50 $ 9.66 $ 9.54 $ 9.65 $10.29
19
FOR THE YEAR ENDED SEPTEMBER 30, 1995 ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
ARIZONA FLORIDA MASSACHUSETTS
---------- ----------- ----------
INVESTMENT INCOME
Interest $ 285,013 $4,216,537 $ 208,617
EXPENSES
Advisory fee 28,005 395,106 21,032
Distribution fee - Class A 5,147 29,151 2,731
Distribution fee - Class B 23,308 191,797 9,023
Distribution fee - Class C 4,344 343,209 15,526
Administrative 82,000 82,000 82,000
Audit & legal 26,499 45,582 26,904
Transfer agency 21,680 44,128 19,506
Custodian 18,497 42,343 21,815
Amortization of organizational expenses 8,463 14,662 6,458
Printing 2,662 4,974 6,854
Trustees' fees 2,411 2,936 3,022
Registration 1,673 1,073 3,245
Taxes 690 1,112 687
Miscellaneous 12,495 17,106 15,088
Total expenses 237,874 1,215,179 233,891
Less: expenses waived and assumed by
Adviser (see Note B) (183,567) (382,350) (196,516)
Net expenses 54,307 832,829 37,375
Net investment income 230,706 3,383,708 171,242
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Net realized gain (loss) on investments 37,377 (1,403,139) 42,515
Net change in unrealized depreciation
of investments 209,846 5,767,509 130,631
Net gain on investments 247,223 4,364,370 173,146
NET INCREASE IN NET ASSETS FROM
OPERATIONS $ 477,929 $7,748,078 $ 344,388
See notes to financial statements.
20
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
MICHIGAN MINNESOTA NEW JERSEY OHIO PENNSYLVANIA VIRGINIA
---------- ----------- ----------- ----------- ----------- -----------
$514,675 $1,070,043 $4,209,725 $2,960,264 $3,372,661 $133,158
48,242 104,056 399,945 282,217 310,293 13,370
9,747 6,945 31,122 9,643 23,564 3,903
19,821 64,331 311,612 205,009 268,526 7,553
24,877 79,009 224,560 214,393 149,397 828
82,000 82,000 82,000 82,000 82,000 82,000
30,080 50,254 49,382 45,164 42,385 24,334
28,305 30,096 64,899 42,905 62,657 20,380
22,930 30,711 37,789 48,048 37,864 22,026
5,120 13,823 13,823 14,450 18,750 5,237
5,173 4,475 8,623 5,752 3,518 479
2,193 2,157 2,335 3,349 2,676 2,525
3,575 1,211 872 844 3,032 1,667
576 706 1,482 1,499 1,523 730
13,188 14,773 16,504 17,834 15,423 12,602
295,827 484,547 1,244,948 973,107 1,021,608 197,634
(159,534) (265,357) (341,783) (341,072) (229,907) (177,435)
136,293 219,190 903,165 632,035 791,701 20,199
378,382 850,853 3,306,560 2,328,229 2,580,960 112,959
126,954 (1,158,947) (1,275,992) (2,332,469) (1,548,029) 17,096
489,511 1,686,335 5,130,792 4,348,549 3,927,440 132,592
616,465 527,388 3,854,800 2,016,080 2,379,411 149,688
$994,847 $1,378,241 $7,161,360 $4,344,309 $4,960,371 $262,647
21
STATEMENTS OF CHANGES IN NET ASSETS ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
</TABLE>
<TABLE>
<CAPTION>
ARIZONA FLORIDA MASSACHUSETTS
------------------------- -------------------------- ---------------------------
JUNE 1,1994* MARCH 29,1994*
YEAR ENDED TO YEAR ENDED YEAR ENDED YEAR ENDED TO
SEP. 30, SEP. 30, SEP. 30, SEP. 30, SEP. 30, SEP. 30,
1995 1994 1995 1994 1995 1994
----------- ----------- ------------ ------------ ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS
Net investment income $ 230,706 $ 41,493 $ 3,383,708 $ 3,638,255 $ 171,242 $ 34,380
Net realized gain (loss) on investments 37,377 (32,067) (1,403,139) (6,668,189) 42,515 (5,019)
Net change in unrealized appreciation
(depreciation) of investments 209,846 (44,287) 5,767,509 (4,555,788) 130,631 (16,112)
Net increase (decrease) in net
assets from operations 477,929 (34,861) 7,748,078 (7,585,722) 344,388 13,249
DIVIDENDS AND DISTRIBUTIONS
TO SHAREHOLDERS FROM:
Net investment income
Class A (95,444) (12,405) (574,240) (408,558) (51,642) (14,562)
Class B (113,965) (21,771) (1,000,470) (761,434) (44,254) (14,649)
Class C (21,297) (6,184) (1,808,998) (2,469,612) (75,346) (3,825)
Distributions in excess of net
investment income
Class A (2,415) -0- (3,384) -0- (3,443) -0-
Class B (2,883) -0- (5,895) -0- (2,950) -0-
Class C (539) -0- (10,659) -0- (5,024) -0-
Net realized gain on investments
Class A -0- -0- -0- (6,309) -0- -0-
Class B -0- -0- -0- (12,873) -0- -0-
Class C -0- -0- -0- (45,607) -0- -0-
TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST
Net increase (decrease) 2,692,697 3,167,057 (9,621,625) 37,987,116 3,420,458 2,083,856
Total increase (decrease) 2,934,083 3,091,836 (5,277,193) 26,697,001 3,582,187 2,064,069
NET ASSETS
Beginning of period 3,092,136 300 68,679,942 41,982,941 2,064,369 300
End of period** $6,026,219 $3,092,136 $63,402,749 $68,679,942 $5,646,556 $2,064,369
</TABLE>
* Commencement of operations.
** Including undistributed net investment income of $1,133 and $1,344 for
Arizona and Massachusetts portfolios as of September 30, 1994, respectively.
See notes to financial statements.
22
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
<TABLE>
<CAPTION>
MICHIGAN MINNESOTA NEW JERSEY
------------------------- -------------------------- --------------------------
FEBRUARY 25,
YEAR ENDED 1994* TO YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
SEP. 30, SEP. 30, SEP. 30, SEP. 30, SEP. 30, SEP. 30,
1995 1994 1995 1994 1995 1994
------------ ----------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS
Net investment income $ 378,382 $ 142,170 $ 850,853 $ 849,761 $ 3,306,560 $ 3,157,064
Net realized gain (loss) on investments 126,954 (111,432) (1,158,947) (1,100,304) (1,275,992) (5,289,187)
Net change in unrealized appreciation
(depreciation) of investments 489,511 (151,999) 1,686,335 (971,979) 5,130,792 (3,271,420
Net increase (decrease) in net
assets from operations 994,847 (121,261) 1,378,241 (1,222,522) 7,161,360 (5,403,543)
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income
Class A (171,195) (43,193) (132,290) (96,139) (594,213) (511,479)
Class B (90,481) (37,028) (319,841) (249,268) (1,568,929) (1,260,934)
Class C (116,706) (61,696) (398,722) (504,760) (1,143,418) (1,382,836)
Distributions in excess of net
investment income
Class A (14,065) -0- (5,501) -0- (14,954) -0-
Class B (7,434) -0- (13,299) -0- (39,484) -0-
Class C (9,588) -0- (16,579) -0- (28,776) -0-
TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST
Net increase (decrease) 2,909,212 7,236,111 (1,238,319) 9,480,689 (2,398,032) 31,237,763
Total increase (decrease) 3,494,590 6,972,933 (746,310) 7,408,000 1,373,554 22,678,971
NETASSETS
Beginning of period 6,973,233 300 17,763,911 10,355,911 66,188,439 43,509,468
End of period** $10,467,823 $6,973,233 $17,017,601 $17,763,911 $67,561,993 $66,188,439
</TABLE>
* Commencement of operations.
** Including undistributed net investment income of $253 and $1,815 for the
Michigan and New Jersey portfolios as of September 30, 1994, respectively.
See notes to financial statements.
23
STATEMENTS OF CHANGES IN NET ASSETS (CONT.) ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
<TABLE>
<CAPTION>
OHIO PENNSYLVANIA VIRGINIA
-------------------------- -------------------------- -------------------------
APRIL 29,1994*
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED TO
SEP. 30, SEP. 30, SEP. 30, SEP. 30, SEP. 30, SEP. 30,
1995 1994 1995 1994 1995 1994
------------ ------------ ------------ ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS
Net investment income $ 2,328,229 $ 2,234,378 $ 2,580,960 $ 2,357,547 $ 112,959 $ 26,804
Net realized gain (loss) on investments (2,332,469) (3,280,561) (1,548,029) (3,140,943) 17,096 (5,138)
Net change in unrealized appreciation
(depreciation) of investments 4,348,549 (2,669,693) 3,927,440 (2,204,273) 132,592 (41,846)
Net increase (decrease) in net
assets from operations 4,344,309 (3,715,876) 4,960,371 (2,987,669) 262,647 (20,180)
DIVIDENDS AND DISTRIBUTIONS
TO SHAREHOLDERS FROM:
Net investment income
Class A (184,425) (116,690) (465,490) (341,767) (72,700) (22,567)
Class B (1,041,482) (802,092) (1,330,120) (1,028,876) (36,282) (3,681)
Class C (1,102,322) (1,314,567) (785,350) (990,266) (3,977) (427)
Distributions in excess of net
investment income
Class A (3,226) -0- (16,051) -0- (2,164) -0-
Class B (18,217) -0- (45,868) -0- (1,080) -0-
Class C (19,282) -0- (27,082) -0- (119) -0-
Net realized gain on investments
Class A -0- (1,496) -0- (4,917) -0- -0-
Class B -0- (12,611) -0- (16,713) -0- -0-
Class C -0- (26,124) -0- (18,485) -0- -0-
TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST
Net increase (decrease) (6,481,382) 25,463,451 (941,588) 26,487,307 1,509,328 1,561,341
Total increase (decrease) (4,506,027) 19,473,995 1,348,822 21,098,614 1,655,653 1,514,486
NET ASSETS
Beginning of period 49,370,833 29,896,838 50,983,135 29,884,521 1,514,786 300
End of period** $44,864,806 $49,370,833 $52,331,957 $50,983,135 $3,170,439 $1,514,786
</TABLE>
* Commencement of operations.
** Including undistributed net investment income of $1,029 and $129 for the
Ohio and Virginia portfolios as of September 30, 1994, respectively.
See notes to financial statements.
24
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1995 ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
NOTE A: SIGNIFICANT ACCOUNTING POLICIES
Alliance Municipal Income Fund II (the 'Fund') which was organized as a
Massachusetts Business Trust on April 2, 1993 is registered under the
Investment Company Act of 1940 as a non-diversified open-end management
investment company. The Fund operates as a series company currently comprised
of nine portfolios: Arizona Portfolio, Florida Portfolio, Massachusetts
Portfolio, Michigan Portfolio, Minnesota Portfolio, New Jersey Portfolio, Ohio
Portfolio, Pennsylvania Portfolio and Virginia Portfolio (the 'Portfolios'). On
February 25, March 29, April 29, and June 1, 1994, the Michigan, Massachusetts,
Virginia and Arizona Portfolios, respectively, all new Portfolios of the series
company, were added to the Fund. These portfolios commenced operations by the
sale to Alliance Capital Management L.P. (the 'Adviser'), of 10 shares of Class
A, Class B and Class C shares, respectively, in the aggregate amount of $300.
Each series is considered to be a separate entity for financial reporting and
tax purposes. Each portfolio offers Class A, Class B and Class C shares. Class
A shares are sold with a front-end sales charge of up to 4.25%. Class B shares
are sold with a contingent deferred sales charge which declines from 3% to zero
depending on the period of time the shares are held. Class B shares will
automatically convert to Class A shares six years after the end of the calendar
month of purchase. Class C shares are sold without an initial or contingent
deferred sales charge. All three classes of shares have identical voting,
dividend, liquidation and other rights and the same terms and conditions,
except that each class bears different distribution expenses and has exclusive
voting rights with respect to its distribution plan. The following is a summary
of the significant accounting policies followed by the Fund.
1. SECURITY VALUATION
The Fund values municipal securities at fair value based on prices provided by
a recognized pricing service which uses information with respect to
transactions in bonds, quotations from bond dealers, market transactions in
comparable securities and various relationships between securities in
determining values.
If market quotations are not readily available from such pricing service, a
municipal security is valued by appraisal at its fair value as determined in
good faith by the Fund's Adviser under procedures established by the Fund's
Board of Trustees. Short-term securities which mature in 60 days or less are
valued at amortized cost, which approximates market value.
2. ORGANIZATION EXPENSES
Organization expenses of approximately $68,000 for the Minnesota, $68,000 for
the New Jersey, $87,200 for the Pennsylvania, $71,000 for the Ohio, and $72,000
for the Florida Portfolios have been deferred and are being amortized on a
straight-line basis through June, 1998. Organization expenses of approximately
$41,750 for the Arizona, $25,550 for the Michigan, $31,450 for the
Massachusetts, and $27,200 for the Virginia Portfolios have been deferred and
are being amortized on a straight-line basis through February, March, April and
June, 1999, respectively.
3. TAXES
It is the intention of each Portfolio to meet the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute all
of its investment company taxable income and net realized gains, if applicable,
to its shareholders. Therefore, no provisions for federal income or excise
taxes are required.
4. INVESTMENT INCOME AND SECURITY TRANSACTIONS
Interest income is accrued daily. Security transactions are accounted for on
the date the securities are purchased or sold. Security gains and losses are
determined on the identified cost basis. The Fund amortizes premium and accrues
original issue discount and market discount as adjustments to interest income.
The 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.
5. DIVIDENDS AND DISTRIBUTIONS
Dividends and distributions to shareholders are recorded on the ex-dividend
date and are determined in accordance with income tax regulations.
6. RECLASSIFICATION OF NET ASSETS
As a result of book to tax differences in the classification
25
NOTES TO FINANCIAL STATEMENTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
of short-term capital gain distributions and other items, the Fund has
reclassified certain components of net assets. The reclassifications resulted
in a net decrease to distributions in excess of net investment income and a
corresponding decrease to additional paid-in capital for the Minnesota and
Pennsylvania Portfolios of $13,234 and $31,376, respectively. Net investment
income, net realized gains and net assets were not affected by these
reclassifications.
NOTE B: ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Under the terms of an investment advisory agreement, the Fund pays the Adviser
an advisory fee at an annual rate of .625 of 1% of each Portfolio's average
daily net assets. Such fees are accrued daily and paid monthly. The Adviser has
agreed, under the terms of the investment advisory agreement, to reimburse the
Fund to the extent that the expenses of each of its Portfolios (exclusive of
interest, taxes, brokerage, distribution fees, and extraordinary expenses)
exceed the limits prescribed by any state in which that Portfolio's shares are
qualified for sale. No such reimbursement was required for the year ended
September 30, 1995. For the period ended September 30, 1995 the Adviser
voluntarily agreed to waive all or a portion of its advisory fees. The
aggregate amounts of such fee waivers were: Arizona Portfolio, $28,005; Florida
Portfolio, $300,350; Massachusetts Portfolio, $21,032; Michigan Portfolio,
$48,242; Minnesota Portfolio, $104,056; New Jersey Portfolio, $259,783; Ohio
Portfolio, $259,072; Pennsylvania Portfolio, $147,907; and Virginia Portfolio
$13,370.
Pursuant to the advisory agreement, the Adviser provides to each Portfolio
certain legal and accounting services. For the year ended September 30, 1995,
the Adviser voluntarily agreed to waive its fees for such services. In
addition, the Adviser agreed to reimburse each Portfolio for certain operating
expenses. Such expenses amounted to $73,562 for the Arizona Portfolio, $93,484
for the Massachusetts Portfolio, $29,292 for the Michigan Portfolio, $79,301
for the Minnesota Portfolio and $82,065 for the Virginia Portfolio. There was
no such reimbursement for the Florida Portfolio, the New Jersey Portfolio, the
Ohio Portfolio and the Pennsylvania Portfolio.
Each Portfolio compensates Alliance Fund Services, Inc. (a wholly-owned
subsidiary of the Adviser) under a Services Agreement for providing personnel
and facilities to perform transfer agency services for each Portfolio. Such
compensation amounted to $14,093 for the Arizona Portfolio, $21,939 for the
Florida Portfolio, $13,836 for the Massachusetts Portfolio, $14,432 for the
Michigan Portfolio, $16,680 for the Minnesota Portfolio, $32,067 for the New
Jersey Portfolio, $21,854 for the Ohio Portfolio, $32,346 for the Pennsylvania
Portfolio and $13,847 for the Virginia Portfolio.
Alliance Fund Distributors, Inc. (a wholly-owned subsidiary of the Adviser)
serves as the Distributor of the Fund's shares. The amount of front-end sales
charges received by the Distributor from sales of each respective Portfolio's
Class A shares for the year ended September 30, 1995 were: Arizona Portfolio,
$3,098; Florida Portfolio, $7,186; Massachusetts Portfolio, $1,736; Michigan
Portfolio, $999; Minnesota Portfolio, $1,073; New Jersey Portfolio, $6,558;
Ohio Portfolio, $3,299; Pennsylvania Portfolio, $4,741; and Virginia Portfolio,
$694. The amount of contingent deferred sales charge imposed upon redemptions
by shareholders of Class B shares for the same period were: Arizona Portfolio,
$5,862; Florida Portfolio, $59,396; Massachusetts Portfolio, $6,273; Michigan
Portfolio, $20,509; Minnesota Portfolio, $17,775; New Jersey Portfolio,
$87,046; Ohio Portfolio, $47,836; Pennsylvania Portfolio, $68,849; and Virginia
Portfolio, $240.
26
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
NOTE C: DISTRIBUTION SERVICES AGREEMENT
Each Portfolio has adopted a Distribution Services Agreement (the 'Agreement')
pursuant to Rule 12b-1 under the Investment Company Act of 1940 for Class A,
Class B and Class C shares. Under the Agreement, each Portfolio pays a
distribution fee to the Distributor at an annual rate of up to .30 of 1% of
each Portfolio's average daily net assets attributable to the Class A shares
and 1% of each Portfolio's average daily net assets attributable to the Class B
and Class C shares, respectively. Such fee is accrued daily and paid monthly.
The Agreement provides that the Distributor will use such payments in their
entirety for distribution assistance and promotional activities. Since the
commencement of operations of each Portfolio the Distributor has incurred
expenses in excess of the distribution costs reimbursed by each Portfolio as
follows:
PORTFOLIO CLASS B CLASS C
- ---------------- ---------- --------
Arizona $ 333,848 $ 82,644
Florida 756,410 689,466
Massachusetts 293,674 250,539
Michigan 272,393 326,746
Minnesota 582,028 437,224
New Jersey 1,390,839 426,141
Ohio 939,849 518,440
Pennsylvania 1,088,987 430,536
Virginia 276,543 35,816
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)
for the year ended September 30, 1995 were as follows:
PORTFOLIO PURCHASES SALES
- --------------- ----------- ------------
Arizona $ 6,373,810 $ 3,811,785
Florida 93,414,385 107,718,835
Massachusetts 8,442,115 5,136,423
Michigan 15,270,377 12,299,070
Minnesota 19,819,027 21,139,563
New Jersey 55,775,712 57,700,250
Ohio 50,050,331 60,323,413
Pennsylvania 58,254,765 57,093,687
Virginia 4,219,549 2,750,256
NOTE E: TAXES
For Federal income tax purposes at September 30, 1995, the Series had capital
loss carryforwards for the following Portfolios: $7,678 expiring in 2002,
$5,261,151 expiring in 2003, for New Jersey Portfolio; $7,571,805 expiring in
2003, for Florida Portfolio; $3,714,202 expiring in 2003, for Ohio Portfolio;
$3,137,952 expiring in 2003, for Pennsylvania Portfolio; and $1,185,373
expiring in 2003 for Minnesota Portfolio. Any net capital losses incurred after
October 31 ('Post October losses') within the taxable year are deemed to arise
on the first business day of each Portfolio's next taxable year. Pursuant to
Federal income tax regulations, the Series had net capital losses of $499,523
for Florida Portfolio, $3,382 for the Michigan Portfolio, $1,074,383 for the
Minnesota Portfolio, $1,296,350 for New Jersey Portfolio, $1,898,828 for Ohio
Portfolio and $1,551,030 for the Pennsylvania Portfolio which will be deferred
to fiscal year 1996. These capital losses will be available in fiscal 1996 to
offset capital gains and reduce amounts distributable to shareholders.
27
NOTES TO FINANCIAL STATEMENTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
At September 30, 1995, the cost of securities for federal income tax purposes,
gross unrealized appreciation, gross unrealized depreciation and net unrealized
appreciation of investments for each Portfolio were as follows:
GROSS GROSS NET
UNREALIZED UNREALIZED UNREALIZED
PORTFOLIO TAX COST APPRECIATION (DEPRECIATION) APPRECIATION
- ---------------- ----------- ------------ -------------- ------------
Arizona $ 5,696,095 $ 165,559 $ -0- $ 165,559
Florida 60,792,693 1,902,389 (172,214) 1,730,175
Massachusetts 5,388,233 117,228 (2,709) 114,519
Michigan 10,198,487 337,512 -0- 337,512
Minnesota 15,717,752 907,791 (34,206) 873,585
New Jersey 63,952,197 2,930,912 (304,257) 2,626,655
Ohio 43,021,896 2,159,237 (12,662) 2,146,575
Pennsylvania 49,322,240 2,276,610 (69,195) 2,207,415
Virginia 3,006,168 90,746 -0- 90,746
NOTE F: SHARES OF BENEFICIAL INTEREST
There is an unlimited number of $.01 par value shares of beneficial interest
authorized for Class A, Class B and Class C shares.
Transactions in shares of beneficial interest in each Portfolio were as follows:
SHARES AMOUNT
------------------------- -------------------------
YEAR ENDED JUNE 1,1994* YEAR ENDED JUNE 1,1994*
SEP. 30, TO SEP. 30, TO
ARIZONA PORTFOLIO 1995 SEP. 30,1994 1995 SEP. 30,1994
- ------------------------ ---------- ------------ ----------- ------------
CLASS A
Shares sold 179,031 130,890 $1,777,357 $1,312,170
Shares issued in
reinvestment of
dividends 4,255 556 42,481 5,581
Shares redeemed (47,391) (36,254) (477,515) (364,123)
Net increase 135,895 95,192 $1,342,323 $ 953,628
CLASS B
Shares sold 161,670 204,005 $1,621,211 $2,041,252
Shares issued in
reinvestment of
dividends 5,382 620 53,513 6,222
Shares redeemed (31,136) (32,899) (312,965) (329,620)
Net increase 135,916 171,726 $1,361,759 $1,717,854
CLASS C
Shares sold 70,824 84,517 $ 699,946 $ 846,679
Shares issued in
reinvestment of
dividends 2,011 358 19,819 3,604
Shares redeemed (75,752) (35,270) (731,150) (354,708)
Net increase (decrease) (2,917) 49,605 $ (11,385) $ 495,575
28
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
SHARES AMOUNT
------------------------- --------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
SEP. 30, SEP. 30, SEP. 30, SEP. 30,
FLORIDA PORTFOLIO 1995 1994 1995 1994
- ---------------------- ----------- ------------ ------------ ------------
CLASS A
Shares sold 509,383 728,668 $ 4,618,993 $ 7,094,881
Shares issued in
reinvestment of
dividends and
distributions 28,075 19,095 254,915 147,498
Shares redeemed (214,506) (226,673) (1,942,117) (2,100,318)
Net increase 322,952 521,090 $ 2,931,791 $ 5,142,061
CLASS B
Shares sold 692,583 1,294,343 $ 6,210,101 $12,618,465
Shares issued in
reinvestment of
dividends and
distributions 52,413 41,340 473,711 359,693
Shares redeemed (618,576) (241,025) (5,601,581) (2,271,231)
Net increase 126,420 1,094,658 $ 1,082,231 $10,706,927
CLASS C
Shares sold 602,179 5,942,160 $ 5,420,341 $60,522,877
Shares issued in
reinvestment of
dividends and
distributions 89,459 252,842 826,873 1,666,591
Shares redeemed (2,248,394) (4,180,826) (19,882,861) (40,051,340)
Net increase (decrease) (1,556,756) 2,014,176 $(13,635,647) $22,138,128
SHARES AMOUNT
------------------------ --------------------------
MARCH 29, MARCH 29,
YEAR ENDED 1994* YEAR ENDED 1994*
SEP. 30, TO SEP. 30, TO
MASSACHUSETTS PORTFOLIO 1995 SEP. 30,1994 1995 SEP. 30,1994
- ------------------------- ---------- ------------- ----------- ------------
CLASS A
Shares sold 84,385 55,665 $ 846,860 $ 563,448
Shares issued in
reinvestment of
dividends 1,677 237 16,995 2,437
Shares redeemed (14,517) (74) (147,082) (750)
Net increase 71,545 55,828 $ 716,773 $ 565,135
CLASS B
Shares sold 134,315 91,592 $1,379,176 $ 928,527
Shares issued in
reinvestment of
dividends 1,760 266 17,847 2,733
Shares redeemed (40,636) (20,162) (402,150) (203,542)
Net increase 95,439 71,696 $ 994,873 $ 727,718
CLASS C
Shares sold 212,201 80,734 $2,178,365 $ 834,017
Shares issued in
reinvestment of
dividends 7,004 140 71,499 1,438
Shares redeemed (52,122) (4,393) (541,052) (44,452)
Net increase 167,083 76,481 $1,708,812 $ 791,003
29
NOTES TO FINANCIAL STATEMENTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
SHARES AMOUNT
------------------------ --------------------------
FEB. 25, FEB. 25,
YEAR ENDED 1994* YEAR ENDED 1994*
SEP. 30, TO SEP. 30, TO
MICHIGAN PORTFOLIO 1995 SEP. 30,1994 1995 SEP. 30,1994
- ------------------------ ---------- ------------ ----------- ------------
CLASS A
Shares sold 276,931 273,212 $2,738,565 $2,629,744
Shares issued in
reinvestment of
dividends 11,339 1,548 109,493 14,906
Shares redeemed (41,977) (10,308) (385,329) (98,466)
Net increase 246,293 264,452 $2,462,729 $2,546,184
CLASS B
Shares sold 156,377 216,322 $1,459,362 $2,110,827
Shares issued in
reinvestment of
dividends 5,917 1,705 56,625 16,370
Shares redeemed (106,263) (33,913) (978,875) (334,671)
Net increase 56,031 184,114 $ 537,112 $1,792,526
CLASS C
Shares sold 248,250 337,346 $2,360,494 $3,285,316
Shares issued in
reinvestment of
dividends 10,635 4,444 101,189 42,627
Shares redeemed (270,068) (44,796) (2,552,312) (430,542)
Net increase (decrease) (11,183) 296,994 $ (90,629) $2,897,401
SHARES AMOUNT
------------------------ --------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
SEP. 30, SEP. 30, SEP. 30, SEP. 30,
MINNESOTA PORTFOLIO 1995 1994 1995 1994
- ----------------------- ----------- ----------- ------------ ------------
CLASS A
Shares sold 59,025 162,212 $ 535,578 $ 1,578,544
Shares issued in
reinvestment of
dividends 11,459 7,074 105,730 68,488
Shares redeemed (47,539) (34,667) (447,134) (332,104)
Net increase 22,945 134,619 $ 194,174 $ 1,314,928
CLASS B
Shares sold 216,010 473,120 $ 1,983,579 $ 4,695,988
Shares issued in
reinvestment of
dividends 26,096 16,160 240,734 155,405
Shares redeemed (142,922) (78,972) (1,290,257) (779,794)
Net increase 99,184 410,308 $ 934,056 $ 4,071,599
CLASS C
Shares sold 72,048 1,013,568 $ 667,481 $10,150,228
Shares issued in
reinvestment of
dividends 37,923 42,210 348,475 409,762
Shares redeemed (373,870) (674,735) (3,382,505) (6,465,828)
Net increase (decrease) (263,899) 381,043 $(2,366,549) $4,094,162
30
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
SHARES AMOUNT
------------------------ --------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
SEP. 30, SEP. 30, SEP. 30, SEP. 30,
NEW JERSEY PORTFOLIO 1995 1994 1995 1994
- ------------------------ ---------- ----------- ------------ ------------
CLASS A
Shares sold 426,481 659,128 $ 3,927,489 $ 6,489,472
Shares issued in
reinvestment of
dividends 44,652 35,695 411,328 345,613
Shares redeemed (288,408) (323,450) (2,664,713) (2,983,190)
Net increase 182,725 371,373 $ 1,674,104 $ 3,851,895
CLASS B
Shares sold 921,717 1,982,961 $ 8,533,273 $19,529,992
Shares issued in
reinvestment of
dividends 109,495 75,083 1,007,537 720,377
Shares redeemed (795,035) (221,220) (7,215,765) (2,079,652)
Net increase 236,177 1,836,824 $ 2,325,045 $18,170,717
CLASS C
Shares sold 260,713 2,378,869 $ 2,395,820 $23,979,897
Shares issued in
reinvestment of
dividends 96,647 99,593 885,664 958,885
Shares redeemed (1,074,250) (1,621,204) (9,678,665) (15,723,631)
Net increase (decrease) (716,890) 857,258 $(6,397,181) $ 9,215,151
SHARES AMOUNT
------------------------ --------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
SEP. 30, SEP. 30, SEP. 30, SEP. 30,
OHIO PORTFOLIO 1995 1994 1995 1994
- ----------------------- ---------- ----------- ------------ ------------
CLASS A
Shares sold 187,714 272,769 $ 1,745,161 $ 2,671,686
Shares issued in
reinvestment of
dividends and
distributions 14,798 13,279 136,073 133,480
Shares redeemed (75,120) (78,425) (655,825) (773,132)
Net increase 127,392 207,623 $ 1,225,409 $ 2,032,034
CLASS B
Shares sold 418,493 1,569,467 $ 3,836,071 $15,405,470
Shares issued in
reinvestment of
dividends and
distributions 88,923 54,953 811,788 528,310
Shares redeemed (455,507) (261,093) (4,110,296) (2,508,640)
Net increase 51,909 1,363,327 $ 537,563 $13,425,140
CLASS C
Shares sold 184,387 2,571,690 $ 1,674,321 $25,742,850
Shares issued in
reinvestment of
dividends and
distributions 83,246 93,045 763,381 897,192
Shares redeemed (1,189,899) (1,702,639) (10,682,056) (16,633,765)
Net increase (decrease) (922,266) 962,096 $(8,244,354) $10,006,277
31
NOTES TO FINANCIAL STATEMENTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
SHARES AMOUNT
------------------------ --------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
SEP. 30, SEP. 30, SEP. 30, SEP. 30,
PENNSYLVANIA PORTFOLIO 1995 1994 1995 1994
- ------------------------ ---------- ----------- ------------ ------------
CLASS A
Shares sold 300,278 451,850 $ 2,762,892 $ 4,391,724
Shares issued in
reinvestment of
dividends and
distributions 29,254 20,521 269,638 198,538
Shares redeemed (203,919) (100,517) (1,876,487) (951,523)
Net increase 125,613 371,854 $ 1,156,043 $ 3,638,739
CLASS B
Shares sold 680,168 1,747,883 $ 6,247,762 $17,173,230
Shares issued in
reinvestment of
dividends and
distributions 91,028 55,570 839,841 537,680
Shares redeemed (603,060) (198,944) (5,537,065) (1,919,722)
Net increase 168,136 1,604,509 $ 1,550,538 $15,791,188
CLASS C
Shares sold 395,768 1,946,256 $ 3,738,239 $19,563,260
Shares issued in
reinvestment of
dividends and
distributions 56,156 72,010 512,839 699,308
Shares redeemed (873,994) (1,357,821) (7,899,247) (13,205,188)
Net increase (decrease) (422,070) 660,445 $(3,648,169) $ 7,057,380
SHARES AMOUNT
------------------------ --------------------------
APRIL 29, APRIL 29,
YEAR ENDED 1994* YEAR ENDED 1994*
SEP. 30, TO SEP. 30, TO
VIRGINIA PORTFOLIO 1995 SEP. 30,1994 1995 SEP. 30,1994
- ----------------------- ---------- ------------ ----------- ------------
CLASS A
Shares sold 78,719 127,630 $791,882 $1,274,133
Shares issued in
reinvestment of
dividends 6,335 1,375 62,455 13,695
Shares redeemed (33,609) (195) (331,886) (1,892)
Net increase 51,445 128,810 $522,451 $1,285,936
CLASS B
Shares sold 96,151 22,803 $942,868 $ 229,130
Shares issued in
reinvestment of
dividends 2,972 248 29,586 2,472
Shares redeemed (6,267) -0- (58,483) -0-
Net increase 92,856 23,051 $913,971 $ 231,602
CLASS C
Shares sold 10,903 4,367 $105,949 $ 43,576
Shares issued in
reinvestment of
dividends 306 23 3,042 227
Shares redeemed (3,732) -0- (36,085) -0-
Net increase 7,477 4,390 $ 72,906 $ 43,803
* Commencement of operations
32
FINANCIAL HIGHLIGHTS ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
PERIOD
ARIZONA PORTFOLIO
CLASS A CLASS B
------------------- --------------------
JUNE 1, JUNE 1
1994* 1994*
YEAR ENDED TO YEAR ENDED TO
SEP. 30, SEP. 30, SEP. 30, SEP. 30,
1995 1994 1995 1994
Net asset value, beginning of period $ 9.77 $10.00 $ 9.77 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income .56** .20** .49** .18**
Net realized and unrealized gain (loss)
on investments .53 (.23) .53 (.24)
Net increase (decrease) in net asset
value from operations 1.09 (.03) 1.02 (.06)
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.56) (.20) (.49) (.17)
Distributions in excess of
net investment income (.01) -0- (.01) -0-
Total dividends and distributions (.57) (.20) (.50) (.17)
Net asset value, end of period $10.29 $9.77 $10.29 $9.77
TOTAL RETURN
Total investment return based on
net asset value (b) 11.56% (.35)% 10.78% (.58)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $2,379 $930 $3,166 $1,677
Ratio to average net assets of:
Expenses, net of waivers/reimbursement .78% .78%(a) 1.48% 1.48%(a)
Expenses, before waivers/reimbursements 4.88% 7.71%(a) 5.58% 8.41%(a)
Net investment income, net of
waivers/reimbursements 5.56% 5.82%(a) 4.89% 5.13%(a)
Portfolio turnover rate 85% 81% 85% 81%
CLASS C
----------------------
JUNE 1,1994*
YEAR ENDED TO
SEP. 30, SEP. 30,
1995 1994
---------- ----------
Net asset value, beginning of period $9.77 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income .49** .17**
Net realized and unrealized gain (loss) on investments .54 (.23)
Net increase (decrease) in net asset value from operations 1.03 (.06)
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.49) (.17)
Distributions in excess of net investment income (.01) -0-
Total dividends and distributions (.50) (.17)
Net asset value, end of period $10.30 $9.77
TOTAL RETURN
Total investment return based on net asset value (b) 10.89% (.58)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $481 $485
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 1.48% 1.48%(a)
Expenses, before waivers/reimbursements 5.58% 8.41%(a)
Net investment income, net of waivers/reimbursements 4.90% 4.70%(a)
Portfolio turnover rate 85% 81%
See footnote summary on page 42.
33
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
PERIOD
<TABLE>
<CAPTION>
FLORIDA PORTFOLIO
------------------------------------------------------------------------
CLASS A CLASS B
---------------------------------- ------------------------------------
JUNE 25,1993* JUNE 25,1993*
YEAR ENDED SEP. 30, TO YEAR ENDED SEP. 30, TO
-------------------- SEP. 30, ----------------------- SEP. 30,
1995 1994 1993 1995 1994 1993
--------- --------- ------------ ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $8.89 $10.25 $10.00 $8.89 $10.25 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income .55** .55** .16** .47** .48** .14**
Net realized and unrealized gain (loss) on investments .69 (1.35) .25 .70 (1.35) .25
Net increase (decrease) in net asset value from operations 1.24 (.80) .41 1.17 (.87) .39
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.55) (.55) (.16) (.47) (.48) (.14)
Distributions in excess of net investment income -0- -0- -0- (.01) -0- -0-
Distributions from net realized gains -0- (.01) -0- -0- (.01) -0-
Total dividends and distributions (.55) (.56) (.16) (.48) (.49) (.14)
Net asset value, end of period $9.58 $8.89 $10.25 $9.58 $8.89 $10.25
TOTAL RETURN
Total investment return based on net asset value (b) 14.44% (8.03)% 4.10% 13.56% (8.72)% 3.91%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $11,956 $8,227 $4,145 $20,660 $18,048 $9,588
Ratio to average net assets of:
Expenses, net of waivers/reimbursements .73% .38% -0-%(a) 1.42% 1.08% .61%(a)
Expenses, before waivers/reimbursements 1.33% 1.27% 1.30%(a) 2.03% 1.98% 2.00%(a)
Net investment income, net of waivers/reimbursements 5.91% 5.70% 5.44%(a) 5.22% 4.99% 4.74%(a)
Portfolio turnover rate 146% 185% 82% 146% 185% 82%
</TABLE>
CLASS C
--------------------------------
JUNE 25,1993*
YEAR ENDED SEP. 30, TO
------------------- SEP. 30,
1995 1994 1993
-------- --------- -----------
Net asset value, beginning of period $8.89 $10.25 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income .47** .48** .14**
Net realized and unrealized gain (loss)
on investments .70 (1.35) .25
Net increase (decrease) in net asset value
from operations 1.17 (.87) .39
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.47) (.48) (.14)
Distributions in excess of net
investment income (.01) -0- -0-
Distributions from net realized gains -0- (.01) -0-
Total dividends and distributions (.48) (.49) (.14)
Net asset value, end of period $9.58 $ 8.89 $10.25
TOTAL RETURN
Total investment return based on
net asset value (b) 13.56% (8.72)% 3.91%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $30,787 $42,405 $28,249
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 1.42% 1.08% .61%(a)
Expenses, before waivers/reimbursements 2.03% 1.97% 2.00%(a)
Net investment income, net of waivers/
reimbursements 5.27% 4.97% 4.74%(a)
Portfolio turnover rate 146% 185% 82%
See footnote summary on page 42.
34
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
PERIOD
MASSACHUSETTS PORTFOLIO
CLASS A CLASS B
----------------------- --------------------
MARCH 29, MARCH 29,
1994* 1994*
YEAR ENDED TO YEAR ENDED TO
SEP. 30, SEP. 30, SEP. 30, SEP. 30,
1995 1994 1995 1994
---------- ----------- --------- ----------
Net asset value, beginning of
period $10.12 $10.00 $10.12 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income .58** .31** .52** .27**
Net realized and unrealized gain
on investments .41 .11 .39 .11
Net increase in net asset value
from operations .99 .42 .91 .38
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.58) (.30) (.52) (.26)
Distributions in excess of net
investment income (.03) -0- (.02) -0-
Total dividends and distributions (.61) (.30) (.54) (.26)
Net asset value, end of period $10.50 $10.12 $10.49 $10.12
TOTAL RETURN
Total investment return based on
net asset value (b) 10.19% 4.14% 9.32% 3.78%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $1,337 $565 $1,754 $725
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements .60% .60%(a) 1.30% 1.30%(a)
Expenses, before waivers/
reimbursements 6.44% 13.20%(a) 7.14% 13.90%(a)
Net investment income, net of
waivers/reimbursements 5.67% 5.98%(a) 4.90% 5.13%(a)
Portfolio turnover rate 155% 146% 155% 146%
CLASS C
---------------------
MARCH 29,
1994*
YEAR ENDED TO
SEP. 30, SEP. 30,
1995 1994
--------- ----------
Net asset value, beginning of period $10.12 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income .52** .25**
Net realized and unrealized gain on investments .39 .13
Net increase in net asset value from operations .91 .38
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.52) (.26)
Distributions in excess of net investment income (.02) -0-
Total dividends and distributions (.54) (.26)
Net asset value, end of period $10.49 $10.12
TOTAL RETURN
Total investment return based on net asset value (b) 9.32% 3.78%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $2,556 $774
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 1.30% 1.30%(a)
Expenses, before waivers/reimbursements 7.14% 13.90%(a)
Net investment income, net of waivers/reimbursements 4.85% 4.00%(a)
Portfolio turnover rate 155% 146%
See footnote summary on page 42.
35
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
PERIOD
MICHIGAN PORTFOLIO
CLASS A CLASS B
----------------------- --------------------
FEB. 25, FEB. 25,
1994* 1994*
YEAR ENDED TO YEAR ENDED TO
SEP. 30, SEP. 30, SEP. 30, SEP. 30,
1995 1994 1995 1994
--------- ----------- -------- ----------
Net asset value, beginning of
period $ 9.35 $10.00 $ 9.35 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income .52** .33** .45** .29**
Net realized and unrealized gain
(loss) on investments .78 (.65) .78 (.65)
Net increase (decrease) in net
asset value from operations 1.30 (.32) 1.23 (.36)
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.52) (.33) (.45) (.29)
Distributions in excess of net
investment income (.03) -0- (.03) -0-
Total dividends and distributions (.55) (.33) (.48) (.29)
Net asset value, end of period $10.10 $9.35 $10.10 $9.35
TOTAL RETURN
Total investment return based on
net asset value (b) 14.40% (3.24)% 13.58% (3.65)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $5,158 $2,473 $2,424 $1,722
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.36% .93%(a) 2.06% 1.63%(a)
Expenses, before waivers/
reimbursements 3.43% 3.97%(a) 4.12% 4.67%(a)
Net investment income, net of
waivers/reimbursements 5.27% 5.83%(a) 4.57% 4.93%(a)
Portfolio turnover rate 151% 222% 151% 222%
CLASS C
---------------------
FEB. 25,
1994*
YEAR ENDED TO
SEP. 30, SEP. 30,
1995 1994
--------- ----------
Net asset value, beginning of period $9.35 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income .45** .29**
Net realized and unrealized gain (loss) on investments .78 (.65)
Net increase (decrease) in net asset value from operations 1.23 (.36)
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.45) (.29)
Distributions in excess of net investment income (.03) -0-
Total dividends and distributions (.48) (.29)
Net asset value, end of period $10.10 $9.35
TOTAL RETURN
Total investment return based on net asset value (b) 13.58% (3.65)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $2,886 $2,778
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 2.06% 1.63%(a)
Expenses, before waivers/reimbursements 4.13% 4.67%(a)
Net investment income, net of waivers/reimbursements 4.69% 4.92%(a)
Portfolio turnover rate 151% 222%
See footnote summary on page 42.
36
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
PERIOD
<TABLE>
<CAPTION>
MINNESOTA PORTFOLIO
--------------------------------------------------------------------
CLASS A CLASS B
--------------------------------- ---------------------------------
JUNE 25,1993* JUNE 25,1993*
YEAR ENDED SEP. 30, TO YEAR ENDED SEP. 30, TO
------------------- SEP. 30, -------------------- SEP. 30,
1995 1994 1993 1995 1994 1993
--------- --------- ------------ --------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 9.19 $10.28 $10.00 $ 9.18 $10.28 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income .53** .55** .15** .46** .48** .13**
Net realized and unrealized gain (loss) on investments .32 (1.09) .28 .33 (1.10) .28
Net increase (decrease) in net asset value from
operations .85 (.54) .43 .79 (.62) .41
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.53) (.55) (.15) (.46) (.48) (.13)
Distributions in excess of net investment income (.02) -0- -0- (.02) -0- -0-
Total dividends and distributions (.55) (.55) (.15) (.48) (.48) (.13)
Net asset value, end of period $9.49 $ 9.19 $10.28 $ 9.49 $ 9.18 $10.28
TOTAL RETURN
Total investment return based on net asset value (b) 9.63% (5.35)% 4.34% 8.90% (6.15)% 4.16%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $2,414 $2,125 $994 $7,299 $6,150 $2,665
Ratio to average net assets of:
Expenses, net of waivers/reimbursements .71% .09% -0-%(a) 1.42% .80% .43%(a)
Expenses, before waivers/reimbursements 2.30% 2.12% 1.89%(a) 3.02% 2.83% 2.59%(a)
Net investment income, net of waivers/reimbursements 5.71% 5.71% 5.20%(a) 4.97% 5.00% 4.50%(a)
Portfolio turnover rate 117% 143% 61% 117% 143% 61%
</TABLE>
CLASS C
---------------------------------
JUNE 25,1993*
YEAR ENDED SEP. 30, TO
-------------------- SEP. 30,
1995 1994 1993
--------- --------- -----------
Net asset value, beginning of period $ 9.19 $10.27 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income .46** .48** .13**
Net realized and unrealized gain (loss)
on investments .33 (1.08) .27
Net increase (decrease) in net asset value
from operations .79 (.60) .40
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.46) (.48) (.13)
Distributions in excess of net investment
income (.02) -0- -0-
Total dividends and distributions (.48) (.48) (.13)
Net asset value, end of period $ 9.50 $ 9.19 $10.27
TOTAL RETURN
Total investment return based on
net asset value (b) 8.89% (5.95)% 4.06%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $7,305 $9,489 $6,697
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 1.41% .79% .43%(a)
Expenses, before waivers/reimbursements 3.00% 2.82% 2.59%(a)
Net investment income, net of waivers/
reimbursements 5.05% 4.90% 4.50%(a)
Portfolio turnover rate 117% 143% 61%
See footnote summary on page 42.
37
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
PERIOD
<TABLE>
<CAPTION>
NEW JERSEY PORTFOLIO
--------------------------------------------------------------------
CLASS A CLASS B
--------------------------------- ---------------------------------
JUNE 25,1993* JUNE 25,1993*
YEAR ENDED SEP. 30, TO YEAR ENDED SEP. 30, TO
------------------- SEP. 30, -------------------- SEP. 30,
1995 1994 1993 1995 1994 1993
--------- --------- ------------ --------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 9.07 $10.29 $10.00 $ 9.07 $10.28 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income .54** .55** .15** .47** .48** .13**
Net realized and unrealized gain (loss) on investments .59 (1.22) .29 .60 (1.21) .28
Net increase (decrease) in net asset value from
operations 1.13 (.67) .44 1.07 (.73) .41
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.54) (.55) (.15) (.47) (.48) (.13)
Distributions in excess of net investment income (.01) -0- -0- (.01) -0- -0-
Total dividends and distributions (.55) (.55) (.15) (.48) (.48) (.13)
Net asset value, end of period $ 9.65 $ 9.07 $10.29 $ 9.66 $ 9.07 $10.28
TOTAL RETURN
Total investment return based on net asset value (b) 12.91% (6.67)% 4.44% 12.15% (7.28)% 4.16%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $11,612 $9,257 $6,679 $34,695 $30,459 $15,637
Ratio to average net assets of:
Expenses, net of waivers/reimbursements .82% .20% -0-%(a) 1.53% .91% .63%(a)
Expenses, before waivers/reimbursements 1.35% 1.33% 1.29%(a) 2.06% 2.03% 1.99%(a)
Net investment income, net of waivers/reimbursements 5.73% 5.65% 5.37%(a) 5.03% 4.96% 4.67%(a)
Portfolio turnover rate 86% 171% 47% 86% 171% 47%
</TABLE>
CLASS C
---------------------------------
JUNE 25,1993*
YEAR ENDED SEP. 30, TO
-------------------- SEP. 30,
1995 1994 1993
--------- --------- -----------
Net asset value, beginning of period $ 9.07 $10.28 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income .47** .48** .13**
Net realized and unrealized gain (loss)
on investments .60 (1.21) .28
Net increase (decrease) in net asset value
from operations 1.07 (.73) .41
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.47) (.48) (.13)
Distributions in excess of net
investment income (.01) -0- -0-
Total dividends and distributions (.48) (.48) (.13)
Net asset value, end of period $ 9.66 $ 9.07 $10.28
TOTAL RETURN
Total investment return based on net
asset value (b) 12.14% (7.28)% 4.16%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $21,255 $26,472 $21,193
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 1.52% .90% .63%(a)
Expenses, before waivers/reimbursements 2.06% 2.02% 1.99%(a)
Net investment income, net of waivers/
reimbursements 5.09% 4.93% 4.67%(a)
Portfolio turnover rate 86% 171% 47%
See footnote summary on page 42.
38
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
PERIOD
<TABLE>
<CAPTION>
OHIO PORTFOLIO
--------------------------------------------------------------------
CLASS A CLASS B
--------------------------------- ---------------------------------
JUNE 25,1993* JUNE 25,1993*
YEAR ENDED SEP. 30, TO YEAR ENDED SEP. 30, TO
------------------- SEP. 30, -------------------- SEP. 30,
1995 1994 1993 1995 1994 1993
-------- --------- ------------ --------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 9.06 $10.26 $10.00 $ 9.06 $10.26 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income .54** .55** .15** .47** .48** .13**
Net realized and unrealized gain (loss) on investments .48 (1.19) .26 .49 (1.19) .26
Net increase (decrease) in net asset value from
operations 1.02 (.64) .41 .96 (.71) .39
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.54) (.55) (.15) (.47) (.48) (.13)
Distributions in excess of net investment income (.01) -0- -0- (.01) -0- -0-
Distributions from net realized gains -0- (.01) -0- -0- (.01) -0-
Total dividends and distributions (.55) (.56) (.15) (.48) (.49) (.13)
Net asset value, end of period $ 9.53 $ 9.06 $10.26 $ 9.54 $ 9.06 $10.26
TOTAL RETURN
Total investment return based on net asset value (b) 11.63% (6.44)% 4.15% 10.88% (7.13)% 3.97%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $4,170 $2,810 $1,050 $21,821 $20,267 $8,952
Ratio to average net assets of:
Expenses, net of waivers/reimbursements .75% .04% -0-%(a) 1.46% .74% .17%(a)
Expenses, before waivers/reimbursements 1.51% 1.42% 1.32%(a) 2.21% 2.13% 2.02%(a)
Net investment income, net of waivers/reimbursements 5.74% 5.67% 5.30%(a) 5.08% 4.95% 4.60%(a)
Portfolio turnover rate 108% 161% 55% 108% 161% 55%
</TABLE>
CLASS C
--------------------------------
JUNE 25,1993*
YEAR ENDED SEP. 30, TO
------------------- SEP. 30,
1995 1994 1993
-------- --------- -----------
Net asset value, beginning of period $ 9.06 $10.26 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income .47** .48** .13**
Net realized and unrealized gain (loss)
on investments .49 (1.19) .26
Net increase (decrease) in net asset value
from operations .96 (.71) .39
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.47) (.48) (.13)
Distributions in excess of net investment
income (.01) -0- -0-
Distributions from net realized gains -0- (.01) -0-
Total dividends and distributions (.48) (.49) (.13)
Net asset value, end of period $ 9.54 $ 9.06 $10.26
TOTAL RETURN
Total investment return based on net asset value (b)10.88% (7.13)% 3.97%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $18,874 $26,294 $19,894
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 1.45% .74% .17%(a)
Expenses, before waivers/reimbursements 2.20% 2.12% 2.02%(a)
Net investment income, net of waivers/
reimbursements 5.14% 4.89% 4.60%(a)
Portfolio turnover rate 108% 161% 55%
See footnote summary on page 42.
39
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
PERIOD
<TABLE>
<CAPTION>
PENNSYLVANIA PORTFOLIO
--------------------------------------------------------------------
CLASS A CLASS B
--------------------------------- ---------------------------------
JUNE 25,1993* JUNE 25,1993*
YEAR ENDED SEP. 30, TO YEAR ENDED SEP. 30, TO
------------------- SEP. 30, ------------------- SEP. 30,
1995 1994 1993 1995 1994 1993
-------- --------- ------------ --------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $9.18 $10.25 $10.00 $9.18 $10.25 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income .54** .56** .16** .47** .49** .14**
Net realized and unrealized gain (loss) on investments .48 (1.06) .25 .49 (1.06) .25
Net increase (decrease) in net asset value from
operations 1.02 (.50) .41 .96 (.57) .39
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.54) (.56) (.16) (.47) (.49) (.14)
Distributions in excess of net investment income (.02) -0- -0- (.02) -0- -0-
Distributions from net realized gains -0- (.01) -0- -0- (.01) -0-
Total dividends and distributions (.56) (.57) (.16) (.49) (.50) (.14)
Net asset value, end of period $9.64 $9.18 $10.25 $9.65 $9.18 $10.25
TOTAL RETURN
Total investment return based on net asset value (b) 11.53% (5.02)% 4.12% 10.78% (5.72)% 3.94%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $8,721 $7,149 $4,170 $28,559 $25,637 $12,173
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 1.00% .45% -0-%(a) 1.71% 1.16% .40%(a)
Expenses, before waivers/reimbursements 1.47% 1.46% 1.31%(a) 2.17% 2.16% 2.01%(a)
Net investment income, net of waivers/reimbursements 5.78% 5.73% 5.67%(a) 5.09% 5.01% 4.97%(a)
Portfolio turnover rate 114% 156% 75% 114% 156% 75%
</TABLE>
CLASS C
--------------------------------
JUNE 25,1993*
YEAR ENDED SEP. 30, TO
------------------- SEP. 30,
1995 1994 1993
-------- --------- -----------
Net asset value, beginning of period $ 9.18 $10.24 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income .47** .49** .14**
Net realized and unrealized gain (loss)
on investments .49 (1.05) .24
Net increase (decrease) in net asset value
from operations .96 (.56) .38
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.47) (.49) (.14)
Distributions in excess of net investment
income (.02) -0- -0-
Distributions from net realized gains -0- (.01) -0-
Total dividends and distributions (.49) (.50) (.14)
Net asset value, end of period $ 9.65 $ 9.18 $10.24
TOTAL RETURN
Total investment return based on
net asset value (b) 10.78% (5.63)% 3.84%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $15,052 $18,198 $13,541
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 1.70% 1.15% .40%(a)
Expenses, before waivers/reimbursements 2.17% 2.15% 2.01%(a)
Net investment income, net of waivers/
reimbursements 5.09% 4.99% 4.97%(a)
Portfolio turnover rate 114% 156% 75%
See footnote summary on page 42.
40
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
PERIOD
VIRGINIA PORTFOLIO
-----------------------------------------------
CLASS A CLASS B
----------------------- ----------------------
APRIL 29,1994* APRIL 29,1994*
YEAR ENDED TO YEAR ENDED TO
SEP. 30, SEP. 30, SEP. 30, SEP. 30,
1995 1994 1995 1994
-------- ----------- --------- -----------
Net asset value, beginning of
period $9.69 $10.00 $9.69 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income .56** .24** .49** .22**
Net realized and unrealized gain
(loss) on investments .61 (.31) .61 (.32)
Net increase (decrease) in net
asset value from operations 1.17 (.07) 1.10 (.10)
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment
income (.56) (.24) (.49) (.21)
Distributions in excess of
net investment income (.01) -0- (.01) -0-
Total dividends and distributions (.57) (.24) (.50) (.21)
Net asset value, end of period $10.29 $9.69 $10.29 $9.69
TOTAL RETURN
Total investment return based
on net asset value (b) 12.46% (.71)% 11.67% (1.01)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $1,855 $1,249 $1,193 $224
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements .67% .57%(a) 1.37% 1.27%(a)
Expenses, before waivers/
reimbursements 8.96% 12.29%(a) 9.66% 12.99%(a)
Net investment income, net
of waivers/reimbursements 5.59% 5.62%(a) 4.80% 4.97%(a)
Portfolio turnover rate 128% 65% 128% 65%
CLASS C
-----------------------
APRIL 29,1994*
YEAR ENDED TO
SEP. 30, SEP. 30,
1995 1994
-------- -----------
Net asset value, beginning of period $9.70 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income .49** .21**
Net realized and unrealized gain (loss) on investments .60 (.30)
Net increase(decrease) in net asset value from operations. 1.09 (.09)
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.49) (.21)
Distributions in excess of net investment income (.01) -0-
Total dividends and distributions (.50) (.21)
Net asset value, end of period $10.29 $9.70
TOTAL RETURN
Total investment return based on net asset value (b) 11.56% (.91)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $122 $43
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 1.37% 1.27%(a)
Expenses, before waivers/reimbursements 9.66% 12.99%(a)
Net investment income, net of waivers/reimbursements 4.81% 4.67%(a)
Portfolio turnover rate 128% 65%
See footnote summary on page 42.
41
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
FOOTNOTE SUMMARY
* Commencement of operations.
** Net of fee waived and expenses reimbursed by the Adviser.
(a) Annualized.
(b) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period. Initial sales charge or contingent
deferred sales charge is not reflected in the calculation of total investment
return. Total investment return calculated for a period less than one year is
not annualized.
42
REPORT OF ERNST &YOUNG LLP,
INDEPENDENT AUDITORS ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
TO THE SHAREHOLDERS AND BOARD OF TRUSTEES ALLIANCE MUNICIPAL INCOME FUND II
We have audited the accompanying statement of assets and liabilities, including
the portfolios of investments, of Alliance Municipal Income Fund II
(comprising, respectively, the Arizona, Florida, Massachusetts, Michigan,
Minnesota, New Jersey, Ohio, Pennsylvania and Virginia Portfolios), as of
September 30, 1995, and the related statement of operations for the year then
ended and the statement of changes in net assets and the financial highlights
for each of the periods indicated therein. These financial statements and
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
September 30, 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 each
of the respective portfolios constituting the Alliance Municipal Income Fund II
at September 30, 1995, the results of their operations for the year then ended
and the changes in their net assets and the financial highlights for each of
the indicated periods, in conformity with generally accepted accounting
principles.
Ernst &Young LLP
New York, New York
November 8, 1995
FEDERAL TAX INFORMATION (UNAUDITED)
In accordance with the Federal Requirements, the Fund designates substantially
all the dividends paid from investment income-net during the fiscal year ended
September 30, 1995 as 'exempt-interest dividends.' As required by Federal
regulations, shareholders will receive notification of their portion of the
Fund's taxable ordinary dividends and capital gains distributions paid (if any)
for the 1995 calendar year early in 1996.
43
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
BOARD OF TRUSTEES
JOHN D. CARIFA, CHAIRMAN AND PRESIDENT
RUTH BLOCK (1)
DAVID H. DIEVLER (1)
JAMES R. GREEN (1)
DR. JAMES M. HESTER (1)
CLIFFORD L. MICHEL (1)
EUGENE F. O'NEIL (1)
ROBERT C. WHITE (1)
OFFICERS
SUSAN P. KEENAN, SENIOR VICE PRESIDENT
DAVID DOWDEN, VICE PRESIDENT
TERRANCE HULTS, VICE PRESIDENT
WILLIAM E. OLIVER, VICE PRESIDENT
EDMUND P. BERGAN, JR., SECRETARY
MARK D. GERSTEN, TREASURER & CHIEF FINANCIAL OFFICER
PATRICK J. FARRELL, CONTROLLER
CUSTODIAN
THE BANK OF NEW YORK
48 Wall Street
New York, NY 10286
PRINCIPAL UNDERWRITER
ALLIANCE FUND DISTRIBUTORS, INC.
1345 Avenue of the Americas
New York, NY 10105
LEGAL COUNSEL
SEWARD & KISSEL
One Battery Park Plaza
New York, NY 10004
INDEPENDENT AUDITORS
ERNST & YOUNG LLP
787 Seventh Avenue
New York, NY 10019
TRANSFER AGENT
ALLIANCE FUND SERVICES, INC.
P.O. Box 1520
Secaucus, NJ 07096-1520
Toll-free 1-(800) 221-5672
(1) Member of the Audit Committee.
44
ALLIANCE MUNICIPAL INCOME FUND II
1345 Avenue of the Americas
New York, NY 10105
(800) 221-5672
ALLIANCECAPITAL
MUTUAL FUNDS WITHOUT THE MYSTERY.
THIS REPORT IS INTENDED SOLELY FOR DISTRIBUTION TO CURRENT SHAREHOLDERS
OF THE FUND.
R THESE REGISTERED SERVICE MARKS USED UNDER LICENSE FROM THE OWNER,
ALLIANCE CAPITAL MANAGEMENT L.P.
MUNIIIAR
