ALLIANCE MUNICIPAL INCOME FUND II
SEMI-ANNUAL REPORT
MARCH 31, 1996
LETTER TO SHAREHOLDERS ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
May 1, 1996
Dear Shareholder:
We're pleased to provide you with an update on municipal market activity and
the investment results for each of the nine Portfolios of Alliance Municipal
Income Fund II. The following pages include information that covers the period
from October 1, 1995, the beginning of the fiscal year, through March 31, 1996.
During the six months, the Portfolios have provided high current tax-free
income and favorable total returns. We are especially proud that four of the
Portfolios outperformed all state-specific municipal income funds in their
respective peer groups tracked by Lipper for the 12 months ended March 31. The
#1 rankings, which were based on Class A shares' total returns without sales
charges, included:
. FLORIDA PORTFOLIO RANKED #1
among 74 Florida funds
. MICHIGAN PORTFOLIO RANKED #1
among 45 Michigan funds
. NEW JERSEY PORTFOLIO RANKED #1
among 48 New Jersey funds
. VIRGINIA PORTFOLIO RANKED #1
among 30 Virginia funds
MARKET OVERVIEW
After posting superb performance results in fiscal year 1995, Alliance
Municipal Income Fund continued to perform well during the first half of fiscal
year 1996. A decline in the supply of new tax-exempt bond issues, combined with
ongoing strong demand, helped the municipal sector to do well in comparison to
other fixed-income investments. Also responsible for the relative
outperformance of long-term municipal bonds was a shift in focus from 'flat
tax' proposals to other issues in the ongoing public debate over tax reform.
After posting very strong returns through the end of February, municipal bond
prices followed the lead of the Treasury market and slipped in early March. The
decline was due to signs of a strengthening economy as well as diminishing
hopes for further short-term interest rate cuts by the Federal Reserve Board.
Despite generally rising interest rates, municipal bonds performed well due to
several key market factors. The tax reform debate, which had caused municipals
to underperform the market at times during the 1995 market rally, reversed
course in the first quarter of 1996. As we've seen in the past, tax reform
debate can lead institutional investors (who do not typically buy municipal
bonds) into the market, which is what happened in the last several months as
tax-exempt yields began to rise to levels on par with taxable yields.
Individual buyers also returned to the municipal market after a prolonged
absence, lured by higher overall yields and positive developments in the debate
over federal tax code reform.
Tax reform continues to be debated during this election year. We believe that
while the current tax code may be changed some time in the next several years,
any reform will be incremental in nature and will not drastically alter the tax
benefits associated with municipal bond investing. Furthermore, long-term bond
prices today appear to take into account the enactment of significant tax
reform legislation that would be negative for the municipal market. Should this
major tax reform legislation fail, municipal investors could benefit
considerably as the yield advantage over taxable investments would once again
rise. Furthermore, municipal bond income should remain exempt from state income
taxes in the state of issuance.
The improving U.S. economic performance experienced in the first quarter is
positive for state and local governments and should facilitate the meeting of
budgetary targets for fiscal year 1996. However, going forward, revenue growth
is expected to be modest which will require state and local governments to keep
expenditures under tight control. Fiscal flexibility will be further
constrained by voter antipathy toward many types of new tax-based spending.
This mood by taxpayers should keep new issue supply at a minimum which will
bode well for market stability and long-term performance.
INVESTMENT STRATEGY
The recent rise in interest rates has once again provided an opportunity to
reposition the Portfolios to take advantage of long-term trends in the economy
and the municipal bond market. Specifically, we continue to sell older bonds
with lower yields, shorter maturities and unfavorable early redemption features
in favor of securities which offer higher tax-free income and better call
1
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
protections. Our strategy of selling securities which have appreciated in price
because of improvement in the credit of the issuer and/or market conditions,
while looking for undervalued situations, has proven to be successful again in
the first half of 1996. Consistent with our fundamental investment objective of
providing high current income and high after-tax total returns for the Fund's
shareholders, we continue to be fully invested in long-term tax-exempt bonds.
MARKET OUTLOOK
The goods news for municipal bond investors is that inflation is expected to
remain benign despite a recent surge in commodity prices. We expect interest
rates to trade in a narrow range with some potential for volatility related to
the election year. We would view any backup in interest rates as a buying
opportunity for investors. Moreover, we believe that with the population aging,
demographic trends show that the personal savings rate will continue to
increase as will demand for income-generating investment products. This should
increase the demand for municipal bonds and will most likely mean excellent
long-term performance for investors that currently own municipal bonds.
We believe that the long-term bull market for bonds will continue thought the
remainder of the decade. The current interest rate environment provides
investors with new opportunities to lock in very attractive yields. We believe
that any potential short-term interest rate risk will be offset by the
potential for high current income and long-term capital appreciation.
Notwithstanding the uncertainties of an election year or possible tax reform,
we believe that the Fund should continue to deliver outstanding investment
results in 1996.
Thank you for your continued interest in Alliance Municipal Income Fund II. As
always, if you have questions concerning your account or other matters, please
contact your financial advisor or call us at (800) 221-5672. We look forward to
reporting to you again later in the year.
Sincerely,
John D. Carifa
Chairman and President
Susan P. Keenan
Senior Vice President
2
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
HOW YOUR PORTFOLIO PERFORMED OVER THE PAST SIX MONTHS
The Portfolios' Class A shares total returns for the periods ended March 31 are
shown below. We've also shown, for comparison, returns for the overall
municipal bond market, represented by the unmanaged Lehman Brothers Long
Municipal Bond Index, which includes approximately 15,000 issues with
maturities exceeding 22 years. Current yields and returns for Class B and Class
C shares are on the next page.
CUMULATIVE TOTAL RETURNS CLASS A SHARES
PERIODS ENDED MARCH 31, 1996
PAST 6 MONTHS PAST 12 MONTHS
------------- --------------
ARIZONA PORTFOLIO +1.54% +6.17%
FLORIDA PORTFOLIO +3.27% +10.44%
MASSACHUSETTS PORTFOLIO +2.49% +7.80%
MICHIGAN PORTFOLIO +2.63% +9.28%
MINNESOTA PORTFOLIO +1.73% +5.97%
NEW JERSEY PORTFOLIO +2.22% +8.45%
OHIO PORTFOLIO +3.41% +8.13%
PENNSYLVANIA PORTFOLIO +3.63% +9.06%
VIRGINIA PORTFOLIO +4.55% +9.95%
LB LONG MUNICIPAL BOND INDEX +2.88% +8.38%
TOTAL RETURNS ARE BASED ON THE NET ASSET VALUES OF EACH CLASS OF SHARES AS OF
MARCH 31.
OBJECTIVE AND POLICIES
The nine Portfolios of Alliance Municipal Income Fund II, by investing
principally in high-yielding, predominantly medium quality municipal
securities, seek to provide their shareholders with the highest level of income
exempt from Federal and state tax that is available without assuming undue
risk. These securities generally offer current yield above those of higher
quality municipal obligations.
3
INVESTMENT RESULTS
AS OF MARCH 31, 1996 ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
AVERAGE ANNUAL TOTAL RETURNS TAXABLE
------------------------------------ EQUIVALENT
WITHOUT SALES CHARGE WITH SALES CHARGE YIELD IN
------------------ ----------------- 30 DAY 36% TAX
1 SINCE 1 SINCE SEC BRACKET+
YEAR INCEPTION* YEAR INCEPTION* YIELD (AT NAV)
------- ---------- ------ ---------- ------ ---------
ARIZONA PORTFOLIO
Class A Shares +6.17% +6.85% +1.65% +4.37% 5.13% 8.89%
Class B Shares +5.45% +6.10% +2.46% +5.06% 4.66% 7.81%
Class C Shares +5.45% +6.10% +5.45% +6.10% 4.67% 7.81%
FLORIDA PORTFOLIO
Class A Shares +10.44% +4.56% +5.74% +2.94% 5.34% 8.89%
Class B Shares +9.74% +3.82% +6.74% +3.49% 4.87% 7.73%
Class C Shares +9.74% +3.82% +9.74% +3.82% 4.87% 7.73%
MASSACHUSETTS PORTFOLIO
Class A Shares +7.80% +8.40% +3.18% +6.10% 5.30% 9.22%
Class B Shares +6.96% +7.60% +3.96% +7.14% 4.82% 8.14%
Class C Shares +6.97% +7.61% +6.97% +7.61% 4.83% 8.14%
MICHIGAN PORTFOLIO
Class A Shares +9.28% +6.26% +4.67% +4.11% 4.98% 8.69%
Class B Shares +8.53% +5.51% +5.53% +5.06% 4.50% 7.59%
Class C Shares +8.42% +5.51% +8.42% +5.51% 4.49% 7.59%
MINNESOTA PORTFOLIO
Class A Shares +5.97% +3.55% +1.42% +1.95% 5.20% 9.22%
Class B Shares +5.17% +2.78% +2.17% +2.46% 4.71% 8.02%
Class C Shares +5.17% +2.78% +5.17% +2.78% 4.72% 8.02%
NEW JERSEY PORTFOLIO
Class A Shares +8.45% +4.34% +3.79% +2.73% 5.10% 8.97%
Class B Shares +7.64% +3.56% +4.64% +3.24% 4.61% 7.78%
Class C Shares +7.52% +3.56% +7.52% +3.56% 4.62% 7.78%
OHIO PORTFOLIO
Class A Shares +8.13% +4.34% +3.49% +2.73% 5.21% 8.94%
Class B Shares +7.32% +3.56% +4.32% +3.24% 4.73% 7.77%
Class C Shares +7.32% +3.56% +7.32% +3.56% 4.74% 7.77%
PENNSYLVANIA PORTFOLIO
Class A Shares +9.06% +4.94% +4.41% +3.32% 5.11% 9.00%
Class B Shares +8.37% +4.20% +5.37% +3.88% 4.62% 7.83%
Class C Shares +8.36% +4.20% +8.36% +4.20% 4.63% 7.83%
VIRGINIA PORTFOLIO
Class A Shares +9.95% +8.39% +5.24% +5.99% 5.29% 8.55%
Class B Shares +9.22% +7.65% +6.22% +6.67% 4.81% 7.50%
Class C Shares +9.23% +7.65% +9.23% +7.65% 4.81% 7.50%
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 March 31, 1996.
4
ARIZONA PORTFOLIO
PORTFOLIO OF INVESTMENTS
MARCH 31, 1996 (UNAUDITED) ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
STANDARD PRINCIPAL
& POOR'S AMOUNT
RATINGS (000) VALUE
- ------------------------------------------------------------------------
MUNICIPAL BONDS98.5%
ARIZONA-88.6%
AA+ Maricopa Cnty IDR
(Citizens Utilities) AMT
6.20%, 5/01/30 $ 365 $ 370,796
AAA Maricopa Cnty Sch Dist #28 GO
(Kyrene Elementary) FGIC Ser 93C
Zero Coupon, 7/01/11 1,900 792,376
AAA Maricopa Cnty Sch
Sch Dist #80 GO (Chandler) FGIC Ser 95
6.00%, 7/01/13 340 347,779
AA- Mohave Cnty IDR
(Cargill) AMT Ser 95A
6.70%, 3/01/20 1,115 1,175,834
BBB Navajo Cnty PCR
(Arizona Public Service) Ser 93A
5.875%, 8/15/28 375 353,558
AAA Oro Valley Muni Prop Corp
Water Sys Rev MBIA
5.375%, 7/01/26 400 373,696
AA+ Phoenix Civic Plaza Bldg Corp
Ser 94
6.00%, 7/01/12 350 360,213
AA Phoenix IDR
MFHR (Woodstone & Silver Springs)
6.25%, 4/01/23 380 380,255
A Pinal Cnty IDR Solid Waste Disposal
(Browning-Ferris)
AMT 5.00%, 2/01/06 1,250 1,193,800
AA Salt River Proj Agriculture
Imp & Pwr Dist Elec Sys
5.75%, 1/01/19 360 352,807
AAA Tempe IDR
(Quadrangles) FHA
6.25%, 6/01/26 390 390,495
AAA Yavapai Cnty Sch District #22
(Humboldt) FGIC Ser 95A
5.95%, 7/01/14 330 334,828
AAA Yuma IDR
(Alexandrite Sands Apt)
MFHR FHA Ser 90 AMT
7.70%, 12/01/29 340 349,707
----------
6,776,144
MICHIGAN-9.9%
AAA Detroit Sewage Disposal Rev.
Sys Rev FGIC
Ser 93A
7.623%, 7/01/23(a) 800 760,000
TOTAL INVESTMENTS98.5%
(cost $7,579,541) 7,536,144
Other assets less liabilities1.5% 116,313
NET ASSETS-100% $7,652,457
(a) Inverse floater security-the interest rate is subject to change
periodically.
See Glossary of Terms on page 13.
See notes to financial statements.
5
FLORIDA PORTFOLIO
PORTFOLIO OF INVESTMENTS
MARCH 31, 1996 (UNAUDITED) ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
STANDARD PRINCIPAL
& POOR'S AMOUNT
RATINGS (000) VALUE
- ------------------------------------------------------------------------
MUNICIPAL BONDS99.5%
FLORIDA-93.4%
AAA Brevard Cnty IDR
(NUI Corp Project) AMBAC
6.40%, 10/01/24 $ 3,000 $ 3,147,210
BBB+ Collier Cnty Hlth Fac
(The Moorings Proj) Ser 94
7.00%, 12/01/19 2,000 2,046,460
NR Collier Cnty IDR
(Southern States Utils) Ser 95 AMT
6.50%, 10/01/25 12,500 12,148,875
AAA Dade Cnty Arpt Rev
(Miami Int'l Arpt) MBIA Ser 95B AMT
6.00%, 10/01/24 7,170 7,205,420
A* Dade Cnty Spec Obl
(Courthouse Ctr Proj) GO Ser 95
6.10%, 4/01/20 3,000 3,035,910
A Duval Cnty Hsg Fin Auth
(St. Augustine Apts Proj) MFHR
5.90%, 9/01/16 2,555 2,489,822
BBB Escambia Cnty PCR
(Champion Int'l Corp) Ser 94 AMT
6.90%, 8/01/22 2,000 2,088,300
AAA Florida Hsg Fin Agy
(Brittany of Rosemont) MFHR AMBAC AMT
6.25%, 7/01/35 1,350 1,341,994
AAA Florida Hsg Fin Agy (Landings at
Boot Ranch) MFHR AMBAC Ser 95K AMT
6.10%, 11/01/35 2,050 2,007,914
AAA Florida Hsg Fin Agy (Turtle Creek
Apts Proj) AMBAC Ser 96C AMT
6.20%, 5/01/36 3,245 3,255,741
AAA Florida Hsg Fin Agy
Home Mtg SFMR Ser 95A AMT
6.65%, 1/01/24 6,845 7,077,661
AAA Florida St Turnpike
Auth Rev FGIC Ser 95A
5.625%, 7/01/25 2,500 2,421,400
AAA Hillsborough Cnty Aviation Auth
(Tampa Int'l Arpt) FGIC Ser 93D AMT
5.40%, 10/01/13 3,250 3,097,965
AAA Jacksonville Wtr & Swr
(United Waterworks) AMBAC Ser 95 AMT
6.35%, 8/01/25 1,500 1,558,800
AAA Pinellas Cnty Hlth Fac
(Morton Plant Hlth) MBIA
5.50%, 11/15/18 3,300 3,175,887
Aaa* Pinellas Cnty Hsg Fin Auth
SFMR Ser A AMT
6.55%, 8/01/27 2,775 2,824,645
AAA Volusia Cnty (Daytona Beach Int'l)
MBIA Ser 93 AMT
5.625%, 10/01/21 2,000 1,915,240
-----------
60,839,244
ILLINOIS-6.1%
AAA Metropolitan Pier & Exposition Auth
(McCormick Pl Expo) FGIC Ser 93A
Zero Coupon, 6/15/19 15,850 3,985,324
TOTAL INVESTMENTS99.5%
(cost $64,201,532) 64,824,568
Other assets less liabilities0.5% 319,082
NET ASSETS-100% $65,143,650
* Moody's Rating.
See Glossary of Terms on page 13.
See notes to financial statements.
6
MASSACHUSETTS PORTFOLIO
PORTFOLIO OF INVESTMENTS
MARCH 31, 1996 (UNAUDITED) ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
STANDARD PRINCIPAL
& POOR'S AMOUNT
RATINGS (000) VALUE
- ------------------------------------------------------------------------
MUNICIPAL BONDS101.3%
MASSACHUSETTS-94.9%
AAA Holyoke GO
FSA Ser 93B
6.125%, 8/01/13 $ 450 $ 464,301
AAA Lowell GO
FSA Ser 93A
5.50%, 1/15/10 480 471,768
A+ Massachusetts Bay
Transportation Auth Ser 92C
6.10%, 3/01/23 465 471,366
AAA Massachusetts Ed Fin Auth Educational
Loan Rev AMBAC Ser 94E AMT
6.00%, 1/01/12 480 476,088
AAA Massachusetts GO
MBIA Ser 95A
5.75%, 2/01/15 460 455,262
AAA Massachusetts Hlth & Ed
Fac Auth Hosp Rev
6.58%, 7/01/18(a) 1,100 958,100
Baal* Massachusetts Hlth & Ed Fac Auth
(New England Med Cntr)
(Metro West Hlth) Ser 92C
6.50%, 11/15/18 1,340 1,305,830
AAA Massachusetts Hsg Fin Agy MFHR
(Harbor Pt Development) AMBAC Ser 96A AMT
6.40%, 12/01/15 450 451,499
A+ Massachusetts Hsg Fin Auth
SFMR Ser 40 AMT
6.65%, 12/01/27 465 472,263
AAA Massachusetts Ind Fin Auth Rev
(Heights Crossing Ltd) FHA Ser 95AMT
6.15%, 2/01/35 490 473,139
AAA Massachusetts Muni Wholesale Elec Pwr
Supply Sys MBIA Ser 92A
6.00%, 7/01/18 470 472,613
A Massachusetts Wtr Res Auth
Ser 92B
5.50%, 11/01/15 1,790 1,693,519
AA- Massachusetts Wtr Pollution
Abatement (So Essex Prog) Ser 94A
6.375%, 2/01/15 440 461,732
A1* New England Ed Loan Mktg
(Student Loan Rev) Ser 92H AMT
6.90%, 11/01/09 455 480,057
-----------
9,107,537
MICHIGAN-6.4%
AAA Brighton Sch Dist GO AMBAC Ser 92 II
Zero Coupon, 5/01/18 2,295 618,227
TOTAL INVESTMENTS101.3%
(cost $9,780,958) 9,725,764
Other assets less liabilities(1.3%) (126,885)
NET ASSETS-100% $9,598,879
* Moody's Rating.
(a) Inverse floater security-the interest rate is subject to change
periodically.
See Glossary of Terms on page 13.
See notes to financial statements.
7
MICHIGAN PORTFOLIO
PORTFOLIO OF INVESTMENTS
MARCH 31, 1996 (UNAUDITED) ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
STANDARD PRINCIPAL
& POOR'S AMOUNT
RATINGS (000) VALUE
- ------------------------------------------------------------------------
MICHIGAN MUNICIPAL BONDS96.9%
BBB Detroit GO
Ser 93
6.35%, 4/01/14 $ 585 $ 588,972
AAA Grand Rapids Swr Sys
Rev MBIA Ser 92
6.00%, 1/01/22 555 558,003
AAA Kalamazoo Hosp Fin Auth
(Borgess Med Cntr) FGIC Ser 94A
6.728%, 6/01/11(a) 1,450 1,312,250
AAA Kent Cnty Arpt Fac
Rev Ser 95 AMT
6.10%, 1/01/25 550 553,377
AAA Lowell Area School Dist
GO FGIC
Zero coupon, 5/01/19 7,050 1,773,639
AAA Michigan Hosp Fin Auth Hosp Rev
(St Johns Hosp) AMBAC Ser 92A
6.00%, 5/15/13 520 529,823
A+ Michigan Hosp Fin Auth Rev
(Crittenton Hosp) Ser 94A
5.25%, 3/01/14 600 541,224
AA+ Michigan Hsg Dev Auth
SFMR Ser 95B AMT
7.05%, 6/01/26 840 877,514
AA Michigan Muni Bond Auth
Revolving Fund Ser 93
5.40%, 10/01/14 540 520,431
AAA Michigan Strategic Fund
(Detroit Edison) MBIA Ser 95AA
6.40%, 9/01/25 525 548,315
A- Michigan Strategic Fund PCR
(General Motors) Ser 95
6.20%, 9/01/20 560 564,054
AA Troy MI Downtown Dev Auth
Asset Gty Ser 95A
6.375%, 11/01/18 1,855 1,869,209
AAA Wayne Charter Cnty Arpt Rev
(Detroit Metro Arpt) MBIA Ser 93B AMT
5.50%, 12/01/21 625 584,281
AAA Yale Pub Sch Dist GO
AMBAC
5.50%, 5/01/23 580 544,330
TOTAL INVESTMENTS96.9%
(cost $11,382,116) 11,365,422
Other assets less liabilities3.1% 363,854
NET ASSETS-100% $11,729,276
(a) Inverse floater security-the interest rate is subject to change
periodically.
See Glossary of Terms on page 13.
See notes to financial statements.
8
MINNESOTA PORTFOLIO
PORTFOLIO OF INVESTMENTS
MARCH 31, 1996 (UNAUDITED) ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
STANDARD PRINCIPAL
& POOR'S AMOUNT
RATINGS (000) VALUE
- ------------------------------------------------------------------------
MINNESOTA MUNICIPAL BONDS98.7%
A- Bass Brook PCR
(Minn Power & Light) Ser 92
6.00%, 7/01/22 $ 880 $ 867,319
AAA Burnsville Eagan Savage
Ind Sch Dist #191 GO CGIC Ser 95A
6.20%, 2/01/17 850 880,269
AA+ Duluth Arpt Lease Rev St
Secured GO Ser 95C AMT
6.25%, 8/01/14 850 872,856
AAA Lakeville Ind
Sch Dist #194 GO FGIC Ser 93
5.60%, 2/01/18 875 850,246
BBB+ Minneapolis Community Dev Agy
Common Bond Fund Ser 95-2 AMT
6.625%, 12/01/15 1,245 1,244,166
AAA Minneapolis GO SFMR
Homeownership Renov Ser 93 AMT
5.70%, 12/01/23 3,025 2,863,979
NR Minnesota Agric & Econ Dev Brd
IDR Small Business Loan Prog.
6.75%, 8/01/16 1,450 1,426,220
A1* Minnesota Higher Ed Fac Auth
(Univ. St. Thomas) Ser 4-A1
5.625%, 10/01/21 1,000 952,590
AAA Minnesota Hsg Fin Agy
MFHR Rental Hsg MBIA Ser 95D
6.00%, 2/01/22 870 869,913
AAA Northern MN Muni Pwr Agy
AMBAC Ser 92B
5.50%, 1/01/18 915 876,872
AAA Robbinsdale Hosp Rev
(No. Memorial Med Ctr) AMBAC Ser 93A
5.45%, 5/15/13 910 875,657
AA+ Rochester Hosp Rev
(Mayo Med Ctr) Ser 92F
6.25%, 11/15/21 810 830,517
BBB- South St. Paul Hsg & Redev
(Health East Proj) Ser 94
6.75%, 11/01/09 850 866,660
AAA Southern MN Muni Pwr Auth
Power Supply System MBIA Ser 94A
Zero Coupon, 1/01/26 13,060 2,192,643
AAA St Francis Ind MN
Sch Dist # 15 GO CGIC Ser 95A
6.375%, 2/01/16 825 875,944
TOTAL INVESTMENTS98.7%
(cost $17,473,182) 17,345,851
Other assets less liabilities1.3% 236,773
NET ASSETS-100% $17,582,624
* Moody's Rating.
See Glossary of Terms on page 13.
See notes to financial statements.
9
NEW JERSEY PORTFOLIO
PORTFOLIO OF INVESTMENTS
MARCH 31, 1996 (UNAUDITED) ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
STANDARD PRINCIPAL
& POOR'S AMOUNT
RATINGS (000) VALUE
- -------------------------------------------------------------------------
MUNICIPAL BONDS102.9%
NEWJERSEY-98.4%
AAA Cape May Cnty Util Auth
Sewer Rev MBIA Ser A
5.75%, 1/01/16 $ 3,000 $ 2,978,700
AAA Essex Cnty Imp Auth Util Rev
(Orange Twp) Ser 93 MBIA
6.00%, 12/01/17 2,510 2,557,640
AA Gloucester Cnty PCR
(Mobil Oil Refining) Ser 93
5.625%, 12/01/28 3,000 2,880,810
AA- New Jersey Eco Dev Auth
(Anheuser-Busch Proj) Ser 95 AMT
5.85%, 12/01/30 3,800 3,605,782
AAA New Jersey Eco Dev Auth
(Pub Ser Elec & Gas) MBIA Ser 94A AMT
6.40%, 5/01/32 5,000 5,172,200
AAA New Jersey Eco Dev Auth (Elizabethtown
Wtr Co) MBIA Ser 95 AMT
5.60%, 12/01/25 10,750 10,057,807
AAA New Jersey Eco Dev Auth
(Hackensack Wtr Co) MBIA Ser 94B AMT
5.90%, 3/01/24 3,775 3,723,924
BB+ New Jersey Eco Dev Auth Spec Fac
(American Airlines) AMT
7.10%, 11/01/31 4,500 4,667,355
AAA New Jersey Eco Dev Auth Wtr Fac
(NJ American Wtr Co) FGIC AMT
6.875%, 11/01/34 2,700 2,922,480
BBB- New Jersey Hlth Care Fac (Franciscan
Sisters/St. Mary's Hosp) Ser 93
5.875%, 7/01/12 2,755 2,609,894
AAA New Jersey Hlth Care Fac Fin Hlth Fac
(Monmouth Med Ctr) CGIC Ser 93
6.25%, 7/01/24 2,750 2,855,023
BBB New Jersey Hlth Care Fac
(Englewood Hosp) Ser 94
6.75%, 7/01/24 3,730 3,778,975
AA- New Jersey Hwy Auth
Garden State Parkway
6.25%, 1/01/14 1,250 1,290,050
A+ New Jersey Hsg & Mtg Fin
MFHR (Sect 8) Ser 1
6.70%, 11/01/28 8,500 8,795,970
AAA Passaic Valley Sewer Comm
AMBAC Ser 92D
5.75%, 12/01/15 3,400 3,379,906
AA- Port Auth of NY & NJ
Cons Rev 95th Ser AMT
6.125%, 7/15/29 9,300 9,408,531
AA Salem Cnty NJ Waste Disposal
(E. I. Dupont)
6.125%, 7/15/22 3,500 3,534,650
------------
74,219,697
WESTVIRGINIA-4.5%
AAA West Virginia Pkwys Eco
Dev & Tourism Auth FGIC Ser 93
7.849%, 5/16/19(a) 3,500 3,412,500
TOTAL INVESTMENTS102.9%
(cost $76,854,756) 77,632,197
Other assets less liabilities(2.9%) (2,157,096)
NET ASSETS-100% $75,475,101
(a) Inverse floater security-the interest rate is subject to change
periodically.
See Glossary of Terms on page 13.
See notes to financial statements.
10
OHIO PORTFOLIO
PORTFOLIO OF INVESTMENTS
MARCH 31, 1996 (UNAUDITED) ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
STANDARD PRINCIPAL
& POOR'S AMOUNT
RATINGS (000) VALUE
- -------------------------------------------------------------------------
OHIO MUNICIPAL BONDS95.8%
BBB- Butler Cnty Hosp Rev
(Fort Hamilton Hughes)
7.50%, 1/01/10 $ 1,400 $ 1,462,776
AAA Clermont Cnty Wtr Sys Rev
(Clermont Cnty Swr) AMBAC Ser 93
5.70%, 12/01/13 2,250 2,249,797
AAA Cleveland Arpt Rev
(Cleveland Int'l Arpt) FGIC Ser A AMT
6.25%, 1/01/20 10,000 10,270,300
BBB Hamilton Cnty Hlth Sys (Franciscan
Sisters/Providence Hosp) Ser 92
6.875%, 7/01/15 2,300 2,316,169
Aaa* Kent Ohio (Silver Meadows Apt Proj)
MFHR Ser 95 AMT
7.15%, 12/20/26 2,000 2,098,420
AAA Lucas Cnty Hosp Rev
(St. Vincent Med Ctr) MBIA
5.45%, 8/15/14 4,375 4,183,987
NR Mahoning Valley Sanitary
Dist (Wtr Rev) Ser 94
7.75%, 5/15/14 2,500 2,624,775
Baa2* Ohio Air Quality Dev Auth
(Columbus Southern Pwr) PCR Ser 85B
6.25%, 12/01/20 2,250 2,249,752
AAA Ohio Air Quality Dev Auth
(JMG Funding/Ohio Pwr) AMBAC AMT
6.375%, 4/01/29 2,150 2,213,791
AA- Ohio Air Quality Dev Auth
PCR (Dayton Pwr & Light) Ser 92B
6.40%, 8/15/27 2,100 2,180,997
AAA Ohio Capital Corp
SFMR Sect 8 Assist MBIA
6.35%, 1/01/22 1,000 1,006,450
AAA Ohio Higher Ed Fac
Ohio Northern Univ Proj
5.60%, 5/01/13 2,100 2,079,399
Aa* Ohio Hsg Fin Agy Mtg
MFHR (Bridgeview Villas II) AMT
6.45%, 12/01/33 1,965 1,979,620
AAA Ohio Hsg Fin Agy SFMR Residential
Mtg GNMA Coll Ser B2 AMT
6.70%, 3/01/25 2,135 2,184,596
AA- Ohio Turnpike Commission
Turnpike Rev Ser 94A
5.75%, 2/15/24 4,000 3,912,720
Aa3 Toledo-Lucas Cnty
Port Fac (Cargill Inc Proj)
5.90%, 12/01/15 2,300 2,307,843
TOTAL INVESTMENTS-95.8%
(cost $44,364,834) 45,321,392
Other assets less liabilities4.2% 1,979,768
NET ASSETS-100% $47,301,160
* Moody's Rating.
See Glossary of Terms on page 13.
See notes to financial statements.
11
PENNSYLVANIA PORTFOLIO
PORTFOLIO OF INVESTMENTS
MARCH 31, 1996 (UNAUDITED) ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
STANDARD PRINCIPAL
& POOR'S AMOUNT
RATINGS (000) VALUE
- ------------------------------------------------------------------------
MUNICIPAL BONDS97.8%
PENNSYLVANIA93.8%
AAA Allegheny Cnty Arpt Rev
(Pittsburgh Int'l) FSA Ser 92B AMT
6.625%, 1/01/22 $ 1,500 $ 1,558,140
A- Bradford Cnty IDR Solid Waste Disposal
(Int'l Paper) Series 95A AMT
6.60%, 3/01/19 2,500 2,540,600
A- Series 95B AMT
5.90%, 12/01/19 5,620 5,285,722
A New Morgan IDA Solid Waste
(Browning Ferris) Ser 94 AMT
6.50%, 4/01/19 2,700 2,775,843
AAA Pennsylvania Convention Ctr
Auth Ser 94A
6.75%, 9/01/19 2,500 2,725,525
BBB- Pennsylvania Econ Dev Fin Auth
(Macmillan Bloedel Clarion Proj)
Ser 95 AMT
7.60%, 12/01/20 5,000 5,481,150
BBB+ Pennsylvania Econ Dev Auth Wastewater
Rev (Sun Company) Ser 94A AMT
7.60%, 12/01/24 2,500 2,725,750
AA+ Pennsylvania Hsg Fin Agy
SFMR Ser 41B AMT
6.65%, 4/01/25 3,000 3,065,820
AA Pennsylvania Hsg Fin Agy
SFMR Ser 92D AMT
8.11%, 4/01/25(a) 4,500 4,572,180
AAA Pennsylvania Higher Ed
Student Loan AMBAC Ser 88D AMT
6.05%, 1/01/19 2,700 2,712,960
AAA Pennsylvania Intergov Coop
Auth (Special Tax Rev) FGIC Ser 94
7.00%, 6/15/14 2,225 2,471,686
AAA Pennsylvania Turnpike Commission Oil
Franchise Tax Rev Ser 94A AMBAC
6.00%, 12/01/19 3,000 3,027,930
AAA Philadelphia Airport System
Rev Ser 95A AMBAC AMT
6.10%, 6/15/25 2,750 2,751,898
A- Philadelphia Hosp
Rev (Temple Univ) Ser 93A
6.625%, 11/15/23 3,250 3,334,435
AAA Philadelphia Muni Auth
(Criminal Justice Proj) Ser 93A FGIC
5.625%, 11/15/18 2,000 1,922,000
A Pittsburgh Urban Redev
Mtg Rev Ser 95A AMT
7.15%, 10/01/27 1,550 1,614,666
BBB+ Warren Cnty Hosp Rev
(Warren Gen Hosp Proj) Ser 94B
7.00%, 4/01/19 2,200 2,252,316
AAA Westmoreland Cnty GO
FGIC Ser 93C
Zero Coupon, 8/15/17 3,160 900,947
-----------
51,719,568
GEORGIA4.0%
AAA Atlanta Arpt Facs Rev
MBIA AMT
Zero Coupon, 1/01/10 5,000 2,236,450
TOTAL INVESTMENTS97.8%
(cost $52,967,175) 53,956,018
Other assets less liabilities2.2% 1,201,305
NET ASSETS-100% $55,157,323
(a) Inverse floater security-the interest rate is subject to change
periodically.
See Glossary of Terms on page 13.
See notes to financial statements.
12
VIRGINIA PORTFOLIO
PORTFOLIO OF INVESTMENTS
MARCH 31, 1996 (UNAUDITED) ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
STANDARD PRINCIPAL
& POOR'S AMOUNT
RATINGS (000) VALUE
- ------------------------------------------------------------------------
VIRGINIA MUNICIPAL BONDS89.8%
A Alexandria Redev & Hsg Auth (Buckingham
Village Apts) MFHR Ser 96A AMT
6.15%, 1/01/29 $600 $ 589,962
AAA Chesapeake Bay MBIA
(Bridge & Tunnel Auth)
5.75%, 7/01/25 220 217,521
Aa3* Chesapeake Ind Dev Auth
IDR (Cargill Inc Proj) Ser 93
5.875%, 3/01/13 215 213,508
AAA Harrisonburg Redev & Hsg Auth
(Battery Heights) MFHR Ser 96A GNMA
6.25%, 4/20/36 210 212,115
A Henrico Cnty IDR
(Browning-Ferris) Ser 95 AMT
5.30%, 12/01/11 240 233,964
AA Henrico Cnty IDR
(Henrico Cnty Reg Jail)
7.125%, 8/01/21 185 208,628
A- Isle of Wight Cnty IDR Solid Waste
(Union Camp Corp) Ser 94 AMT
6.55%, 4/01/24 230 237,137
AAA Loudon Cnty IDR Hosp Rev
(Loudon Hospital Ctr.) FSA Ser 95
5.80%, 6/1/20 235 231,675
AAA Richmond Metro Auth Expwy Rev
Ser 92B FGIC
6.25%, 7/15/22 225 229,927
AA Virginia Beach Hlth Care
Hosp Rev (Sentara Bayside)
6.30%, 11/01/21 500 508,995
AA Virginia College Bldg Auth Ed Fac Rev
(Washington & Lee)
5.80%, 1/01/24 235 231,785
AA+ Virginia Hsg Dev Auth
(Commonwealth Mtg) SFMR Ser 94G AMT
7.125%, 7/01/22 650 686,120
AA Virginia Resources Auth Swr Rev
(Hopewell Regl Waste Wtr) Ser 95A AMT
6.00%, 10/01/25 220 217,004
AAA Washington Metro Airport Auth
MBIA Ser 94A AMT
5.75%, 10/01/20 240 231,751
TOTAL INVESTMENTS89.8%
(cost $4,260,736) 4,250,092
Other assets less liabilities10.2% 485,075
NET ASSETS-100% $4,735,167
* Moody's Rating.
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
FSA Financial Security Assurance, Inc.
GNMA Government National Mortgage Association
GO General Obligation
IDR Industrial Development Revenue
MBIA Municipal Bond Investors Assurance
MFHR Multi-Family Housing Revenue
PCR Pollution Control Revenue
SFMR Single Family Mortgage Revenue
See notes to financial statements.
13
STATEMENTS OF ASSETS AND LIABILITIES
MARCH 31, 1996 (UNAUDITED) ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
<TABLE>
<CAPTION>
ARIZONA FLORIDA MASSACHUSETTS MICHIGAN
------------ ----------- ------------- ------------
<S> <C> <C> <C> <C>
ASSETS
Investment in securities, at value (cost: $7,579,541,
$64,201,532, $9,780,958, $11,382,116, $17,473,182,
$76,854,756, $44,364,834, $52,967,175,
$4,260,736, respectively) $7,536,144 $64,824,568 $ 9,725,764 $11,365,422
Cash 32,437 -0- 30,344 -0-
Receivable for investment securities sold 1,132,803 2,734,563 1,122,659 785,279
Interest receivable 84,117 1,244,799 161,633 180,556
Receivable due from Adviser 61,767 -0- 44,456 34,059
Receivable for shares of beneficial interest sold 25,546 94,962 22,823 28,085
Other assets 28,241 32,693 21,332 16,515
Total assets 8,901,055 68,931,585 11,129,011 12,409,916
LIABILITIES
Payable for investment securities purchased 1,177,406 3,255,059 1,468,335 549,492
Dividends payable 11,837 97,318 15,189 17,841
Distribution fee payable 4,652 47,779 6,854 6,745
Payable for shares of beneficial interest redeemed 1,502 320,419 2,046 50,212
Due to custodian -0- 4,834 -0- 17,891
Advisory fee payable -0- 7,968 -0- -0-
Accrued expenses and other liabilities 53,201 54,558 37,708 38,459
Total liabilities 1,248,598 3,787,935 1,530,132 680,640
NETASSETS $7,652,457 $65,143,650 $ 9,598,879 $11,729,276
CLASS A SHARES
Net assets $3,126,572 $12,942,665 $ 2,031,186 $ 5,387,128
Shares of beneficial interest outstanding 309,920 1,344,741 195,762 542,505
CLASS B SHARES
Net assets $4,074,490 $22,460,082 $ 2,533,759 $ 2,984,459
Shares of beneficial interest outstanding 403,917 2,332,298 244,356 300,565
CLASS C SHARES
Net assets $ 451,395 $29,740,903 $ 5,033,934 $ 3,357,689
Shares of beneficial interest outstanding 44,746 3,088,083 485,513 338,164
COMPOSITION OF NET ASSETS
Shares of beneficial interest, at par $ 7,586 $ 67,651 $ 9,256 $ 11,812
Additional paid-in capital 7,666,387 71,166,840 9,633,468 11,616,443
Distributions in excess of net investment income (15,059) (71,921) (25,668) (30,944)
Accumulated net realized gain (loss) 36,940 (6,641,956) 37,017 148,659
Net unrealized appreciation (depreciation) of investments (43,397) 623,036 (55,194) (16,694)
----------- ------------ ------------ ------------
$7,652,457 $65,143,650 $ 9,598,879 $11,729,276
CALCULATION OF MAXIMUM OFFERING PRICE
CLASS A SHARES
Net asset value and redemption price per share $10.09 $ 9.62 $10.38 $ 9.93
Sales charge-4.25% of public offering price .45 .43 .46 .44
Maximum offering price $10.54 $10.05 $10.84 $10.37
CLASS B SHARES
Net asset value and offering price per share $10.09 $ 9.63 $10.37 $ 9.93
CLASS C SHARES
Net asset value, redemption and offering price per share $10.09 $ 9.63 $10.37 $ 9.93
</TABLE>
See notes to financial statements.
14
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
MINNESOTA NEW JERSEY OHIO PENNSYLVANIA VIRGINIA
------------ ------------ ------------ ------------ ------------
$17,345,851 $77,632,197 $45,321,392 $53,956,018 $ 4,250,092
190,099 -0- 12,018 -0- 22,222
512,629 3,523,581 355,977 467,596 590,809
237,013 1,579,266 737,454 1,173,835 73,324
44,132 -0- 1,088 -0- 56,557
89,810 122,470 1,038,151 56,428 12,010
30,825 30,825 32,410 41,833 18,039
18,450,359 82,888,339 47,498,490 55,695,710 5,023,053
685,589 6,388,222 -0- -0- 230,139
27,367 113,960 69,013 84,069 7,115
13,459 55,738 35,907 40,866 2,740
81,805 568,487 27,580 54,926 8,093
-0- 215,544 -0- 282,534 -0-
-0- 13,512 -0- 19,316 -0-
59,515 57,775 64,830 56,676 39,799
867,735 7,413,238 197,330 538,387 287,886
$17,582,624 $75,475,101 $47,301,160 $55,157,323 $ 4,735,167
$ 2,632,612 $14,693,072 $ 5,499,084 $10,222,832 $ 2,085,417
280,644 1,532,609 574,281 1,052,414 200,642
$ 8,038,677 $38,239,044 $23,111,076 $29,981,914 $ 2,098,087
856,874 3,986,806 2,413,091 3,085,298 201,863
$ 6,911,335 $22,542,985 $18,691,000 $14,952,577 $ 551,663
736,689 2,349,796 1,951,611 1,538,481 53,081
$ 18,742 $ 78,692 $ 49,390 $ 56,762 $ 4,556
19,207,108 80,075,188 50,610,451 57,324,109 4,626,918
(45,914) (216,654) (77,233) (164,466) (6,572)
(1,469,981) (5,239,566) (4,238,006) (3,047,925) 120,909
(127,331) 777,441 956,558 988,843 (10,644)
------------ ------------ ------------ ------------ ------------
$17,582,624 $75,475,101 $47,301,160 $55,157,323 $ 4,735,167
$ 9.38 $ 9.59 $ 9.58 $ 9.71 $10.39
.42 .43 .43 .43 .46
$ 9.80 $10.02 $10.01 $10.14 $10.85
$ 9.38 $ 9.59 $ 9.58 $ 9.72 $10.39
$ 9.38 $ 9.59 $ 9.58 $ 9.72 $10.39
15
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED MARCH 31, 1996 (UNAUDITED)
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
<TABLE>
<CAPTION>
ARIZONA FLORIDA MASSACHUSETTS MICHIGAN
--------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME
Interest $210,777 $2,005,395 $ 234,177 $ 338,855
EXPENSES
Advisory fee 21,857 204,459 24,557 35,177
Distribution fee - Class A 4,179 19,284 2,636 7,912
Distribution fee - Class B 18,454 111,030 10,190 14,170
Distribution fee - Class C 2,588 151,823 20,313 15,737
Administrative 41,000 41,000 41,000 41,000
Custodian 30,476 45,403 26,574 35,288
Transfer agency 17,911 20,501 12,462 14,797
Audit & legal 15,632 13,565 8,879 11,393
Printing 4,909 1,587 397 610
Amortization of organizational expenses 4,472 7,351 3,576 2,855
Trustees' fees 1,200 1,200 1,200 1,200
Registration 1,142 2,261 1,465 2,698
Taxes 366 366 366 366
Miscellaneous 2,445 1,728 1,262 2,001
Total expenses 166,631 621,558 154,877 185,204
Less: expenses waived and assumed by Adviser
(see Note B) (124,624) (200,389) (110,013) (110,236)
Net expenses 42,007 421,169 44,864 74,968
Net investment income 168,770 1,584,226 189,313 263,887
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Net realized gain on investments 79,774 1,433,044 56,000 329,647
Net change in unrealized appreciation of
investments (208,956) (1,107,139) (169,713) (354,206)
Net gain (loss) on investments (129,182) 325,905 (113,713) (24,559)
NETINCREASEINNETASSETSFROM OPERATIONS $ 39,588 $1,910,131 $ 75,600 $ 239,328
</TABLE>
See notes to financial statements.
16
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
MINNESOTA NEW JERSEY OHIO PENNSYLVANIA VIRGINIA
----------- ------------ ------------ ------------ ------------
$ 541,983 $ 2,225,227 $ 1,419,214 $ 1,716,590 $ 115,092
55,082 230,843 143,348 170,996 12,154
4,020 20,440 7,272 14,887 3,009
38,577 185,678 114,279 148,732 7,716
36,157 115,543 90,836 75,237 1,702
41,000 41,000 41,000 41,000 41,000
35,518 47,679 45,855 44,665 29,712
15,098 32,465 23,276 32,082 12,202
17,304 17,932 15,824 16,335 11,569
1,098 6,292 4,281 3,528 3,396
6,930 6,930 7,245 9,401 2,871
1,200 1,200 1,200 1,200 1,200
889 6,432 1,064 1,101 975
366 366 366 366 366
2,249 2,761 2,922 3,556 1,460
255,488 715,561 498,768 563,086 129,332
(140,214) (199,981) (185,436) (131,227) (109,711)
115,274 515,580 313,332 431,859 19,621
426,709 1,709,647 1,105,882 1,284,731 95,471
789,270 1,315,796 1,390,422 1,650,068 136,181
(1,000,916) (1,849,214) (1,190,017) (1,218,572) (101,390)
(211,646) (533,418) 200,405 431,496 34,791
$ 215,063 $ 1,176,229 $ 1,306,287 $ 1,716,227 $ 130,262
17
STATEMENTS OF CHANGES IN NET ASSETS ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
<TABLE>
<CAPTION>
ARIZONA FLORIDA MASSACHUSETTS
-------------------------- -------------------------- --------------------------
SIX MONTHS SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED ENDED YEAR ENDED
MARCH 31,1996 SEP. 30, MARCH 31,1996 SEP. 30, MARCH 31,1996 SEP. 30,
(UNAUDITED) 1995 (UNAUDITED) 1995 (UNAUDITED) 1995
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS
Net investment income $168,770 $230,706 $1,584,226 $3,383,708 $189,313 $171,242
Net realized gain (loss) on
investments 79,774 37,377 1,433,044 (1,403,139) 56,000 42,515
Net change in unrealized
appreciation (depreciation)
of investments (208,956) 209,846 (1,107,139) 5,767,509 (169,713) 130,631
Net increase in net assets
from operations 39,588 477,929 1,910,131 7,748,078 75,600 344,388
DIVIDENDSAND DISTRIBUTIONS
TOSHAREHOLDERSFROM:
Net investment income
Class A (77,144) (95,444) (359,373) (574,240) (50,591) (51,642)
Class B (89,472) (113,965) (538,651) (1,000,470) (51,818) (44,254)
Class C (12,509) (21,297) (736,836) (1,808,998) (102,499) (75,346)
Distributions in excess of net
investment income
Class A -0- (2,415) -0- (3,384) -0- (3,443)
Class B -0- (2,883) -0- (5,895) -0- (2,950)
Class C -0- (539) -0- (10,659) -0- (5,024)
Net realized gain on investments
Class A (18,449) -0- -0- -0- (12,500) -0-
Class B (25,982) -0- -0- -0- (13,699) -0-
Class C (3,713) -0- -0- -0- (30,280) -0-
TRANSACTIONS INSHARESOF
BENEFICIALINTEREST
Net increase (decrease) 1,813,919 2,692,697 1,465,630 (9,621,625) 4,138,110 3,420,458
Total increase (decrease) 1,626,238 2,934,083 1,740,901 (5,277,193) 3,952,323 3,582,187
NETASSETS
Beginning of year 6,026,219 3,092,136 63,402,749 68,679,942 5,646,556 2,064,369
End of period $7,652,457 $6,026,219 $65,143,650 $63,402,749 $9,598,879 $5,646,556
</TABLE>
See notes to financial statements.
18
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
<TABLE>
<CAPTION>
MICHIGAN MINNESOTA NEW JERSEY
-------------------------- -------------------------- --------------------------
SIX MONTHS SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED ENDED YEAR ENDED
MARCH 31,1996 SEP. 30, MARCH 31,1996 SEP. 30, MARCH 31,1996 SEP. 30,
(UNAUDITED) 1995 (UNAUDITED) 1995 (UNAUDITED) 1995
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS
Net investment income $ 263,887 $ 378,382 $ 426,709 $ 850,853 $ 1,709,647 $ 3,306,560
Net realized gain (loss) on
investments 329,647 126,954 789,270 (1,158,947) 1,315,796 (1,275,992)
Net change in unrealized
appreciation (depreciation)
of investments (354,206) 489,511 (1,000,916) 1,686,335 (1,849,214) 5,130,792
Net increase in net assets
from operations 239,328 994,847 215,063 1,378,241 1,176,229 7,161,360
DIVIDENDSANDDISTRIBUTIONS
TOSHAREHOLDERSFROM:
Net investment income
Class A (142,211) (171,195) (76,967) (132,290) (380,381) (594,213)
Class B (66,813) (90,481) (192,521) (319,841) (902,708) (1,568,929)
Class C (73,877) (116,706) (180,584) (398,722) (561,813) (1,143,418)
Distributions in excess of net
investment income
Class A -0- (14,065) -0- (5,501) -0- (14,954)
Class B -0- (7,434) -0- (13,299) -0- (39,484)
Class C -0- (9,588) -0- (16,579) -0- (28,776)
Net realized gain on investments
Class A (83,366) -0- -0- -0- -0- -0-
Class B (44,698) -0- -0- -0- -0- -0-
Class C (49,542) -0- -0- -0- -0- -0-
TRANSACTIONS INSHARESOF
BENEFICIALINTEREST
Net increase (decrease) 1,482,632 2,909,212 800,032 (1,238,319) 8,581,781 (2,398,032)
Total increase (decrease) 1,261,453 3,494,590 565,023 (746,310) 7,913,108 1,373,554
NETASSETS
Beginning of year 10,467,823 6,973,233 17,017,601 17,763,911 67,561,993 66,188,439
End of period $11,729,276 $10,467,823 $17,582,624 $17,017,601 $75,475,101 $67,561,993
</TABLE>
See notes to financial statements.
19
STATEMENTS OF CHANGES IN NET ASSETS (CONT.) ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
<TABLE>
<CAPTION>
OHIO PENNSYLVANIA VIRGINIA
-------------------------- -------------------------- --------------------------
SIX MONTHS SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED ENDED YEAR ENDED
MARCH 31,1996 SEP. 30, MARCH 31,1996 SEP. 30, MARCH 31,1996 SEP. 30,
(UNAUDITED) 1995 (UNAUDITED) 1995 (UNAUDITED) 1995
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS
Net investment income $ 1,105,882 $ 2,328,229 $ 1,284,731 $ 2,580,960 $ 95,471 $ 112,959
Net realized gain (loss) on
investments 1,390,422 (2,332,469) 1,650,068 (1,548,029) 136,181 17,096
Net change in unrealized
appreciation (depreciation)
of investments (1,190,017) 4,348,549 (1,218,572) 3,927,440 (101,390) 132,592
Net increase in net assets
from operations 1,306,287 4,344,309 1,716,227 4,960,371 130,262 262,647
DIVIDENDSAND DISTRIBUTIONS
TOSHAREHOLDERSFROM:
Net investment income
Class A (136,629) (184,425) (281,947) (465,490) (54,353) (72,700)
Class B (560,464) (1,041,482) (734,808) (1,330,120) (36,468) (36,282)
Class C (446,326) (1,102,322) (371,455) (785,350) (7,988) (3,977)
Distributions in excess of net
investment income
Class A -0- (3,226) -0- (16,051) -0- (2,164)
Class B -0- (18,217) -0- (45,868) -0- (1,080)
Class C -0- (19,282) -0- (27,082) -0- (119)
Net realized gain on investments
Class A -0- -0- -0- -0- (15,668) -0-
Class B -0- -0- -0- -0- (10,549) -0-
Class C -0- -0- -0- -0- (1,013) -0-
TRANSACTIONS INSHARESOF
BENEFICIALINTEREST
Net increase (decrease) 2,273,486 (6,481,382) 2,497,349 (941,588) 1,560,505 1,509,328
Total increase (decrease) 2,436,354 (4,506,027) 2,825,366 1,348,822 1,564,728 1,655,653
NETASSETS
Beginning of year 44,864,806 49,370,833 52,331,957 50,983,135 3,170,439 1,514,786
End of period $47,301,160 $44,864,806 $55,157,323 $52,331,957 $ 4,735,167 $ 3,170,439
</TABLE>
See notes to financial statements.
20
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1996 (UNAUDITED) ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
NOTE A: SIGNIFICANT ACCOUNTING POLICIES
Alliance Municipal Income Fund II (the 'Fund') which is a Massachusetts
Business Trust, 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'). 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
$25,550 for the Michigan, $31,450 for the Massachusetts, $27,200 for the
Virginia and $41,750 for the Arizona 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.
21
NOTES TO FINANCIAL STATEMENTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
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 six months ended
March 31, 1996. For the six months ended March 31, 1996 the Adviser voluntarily
agreed to waive all or a portion of its advisory fees. The aggregate amounts of
such fee waivers were: Arizona Portfolio, $21,857; Florida Portfolio, $159,389;
Massachusetts Portfolio, $24,557; Michigan Portfolio, $35,177; Minnesota
Portfolio, $55,082; New Jersey Portfolio, $158,981; Ohio Portfolio, $143,348;
Pennsylvania Portfolio, $90,227; and Virginia Portfolio $12,154.
Pursuant to the advisory agreement, the Adviser provides to each Portfolio
certain legal and accounting services. For the six months ended March 31, 1996,
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 $61,767 for the Arizona Portfolio, $44,456
for the Massachusetts Portfolio, $34,059 for the Michigan Portfolio, $44,132
for the Minnesota Portfolio; $1,088 for the Ohio Portfolio and $56,557 for the
Virginia Portfolio. There was no such reimbursement for the Florida Portfolio,
the New Jersey 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 $9,000 for the Arizona Portfolio, $10,800 for the
Florida Portfolio, $9,000 for the Massachusetts Portfolio, $9,000 for the
Michigan Portfolio, $9,000 for the Minnesota Portfolio, $16,500 for the New
Jersey Portfolio, $10,500 for the Ohio Portfolio, $15,870 for the Pennsylvania
Portfolio and $9,000 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 six months ended March 31, 1996 were: Arizona Portfolio,
$2,241; Florida Portfolio, $3,437; Massachusetts Portfolio, $1,748; Michigan
Portfolio, $1,129; Minnesota Portfolio, $432; New Jersey Portfolio, $5,636;
Ohio Portfolio, $2,031; Pennsylvania Portfolio, $3,448; and Virginia Portfolio,
$819. The amount of contingent deferred sales charge imposed upon redemptions
by shareholders of Class B shares for the same period were: Arizona Portfolio,
$1,247; Florida Portfolio, $20,718; Massachusetts Portfolio, $646; Michigan
Portfolio, $2,505; Minnesota Portfolio, $8,349; New Jersey Portfolio, $35,536;
Ohio Portfolio, $20,984; Pennsylvania Portfolio, $18,794; and Virginia
Portfolio, $4,678.
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
22
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
Portfolio the Distributor has incurred expenses in excess of the distribution
costs reimbursed by each Portfolio as follows:
PORTFOLIO CLASS B CLASS C
- -------------- ----------- ---------
Arizona $ 455,637 $ 87,766
Florida 832,333 786,708
Massachusetts 357,287 359,667
Michigan 370,549 400,774
Minnesota 710,987 483,448
New Jersey 1,576,207 473,414
Ohio 1,046,841 582,478
Pennsylvania 1,133,144 500,730
Virginia 399,091 87,923
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 six months ended March 31, 1996, were as follows:
PORTFOLIO PURCHASES SALES
- --------------- ------------ ------------
Arizona $ 8,283,290 $ 6,479,935
Florida 98,625,674 96,678,352
Massachusetts 14,382,873 10,046,550
Michigan 15,312,200 14,470,526
Minnesota 15,664,813 14,708,288
New Jersey 60,507,392 48,924,205
Ohio 39,203,900 39,255,460
Pennsylvania 52,566,042 50,584,646
Virginia 6,972,818 5,851,816
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.
23
NOTES TO FINANCIAL STATEMENTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
At March 31, 1996, the cost of securities for federal income tax purposes,
gross unrealized appreciation, gross unrealized depreciation and net unrealized
appreciation/depreciation of investments for each Portfolio were as follows:
NET UNREALIZED
GROSS UNREALIZED GROSS UNREALIZED APPRECIATION
PORTFOLIO TAX COST APPRECIATION (DEPRECIATION) (DEPRECIATION)
- -------------- ----------- ---------------- --------------- --------------
Arizona $ 7,645,321 $ 42,587 $(151,764) $(109,177)
Florida 64,283,959 887,793 (347,184) 540,609
Massachusetts 9,893,565 37,680 (205,481) (167,801)
Michigan 11,382,247 66,124 (82,949) (16,825)
Minnesota 17,473,182 254,900 (382,231) (127,331)
New Jersey 76,854,756 1,557,730 (780,289) 777,441
Ohio 44,428,189 1,016,158 (122,955) 893,203
Pennsylvania 52,967,175 1,593,273 (604,430) 988,843
Virginia 4,261,951 26,450 (38,309) (11,859)
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
--------------------------- ------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
MARCH 31,1996 SEPTEMBER 30, MARCH 31,1996 SEPTEMBER 30,
ARIZONA PORTFOLIO (UNAUDITED) 1995 (UNAUDITED) 1995
- ------------------- ------------ ------------ -------------- --------------
CLASS A
Shares sold 90,290 179,031 $ 946,025 $1,777,357
Shares issued in
reinvestment of
dividends and
distributions 3,832 4,255 39,915 42,481
Shares redeemed (15,299) (47,391) (159,819) (477,515)
Net increase 78,823 135,895 $ 826,121 $1,342,323
CLASS B
Shares sold 100,222 161,670 $1,045,694 $1,621,211
Shares issued in
reinvestment of
dividends and
distributions 4,446 5,382 46,296 53,513
Shares redeemed (8,403) (31,136) (87,787) (312,965)
Net increase 96,265 135,916 $1,004,203 $1,361,759
CLASS C
Shares sold 9,760 70,824 $ 102,225 $ 699,946
Shares issued in
reinvestment of
dividends and
distributions 1,307 2,011 13,633 19,819
Shares redeemed (13,019) (75,752) (132,263) (731,150)
Net decrease (1,952) (2,917) $ (16,405) $ (11,385)
24
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
SHARES AMOUNT
--------------------------- ------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
MARCH 31,1996 SEPTEMBER 30, MARCH 31,1996 SEPTEMBER 30,
FLORIDA PORTFOLIO (UNAUDITED) 1995 (UNAUDITED) 1995
- ------------------- ------------ ------------ -------------- --------------
CLASS A
Shares sold 268,481 509,383 $ 2,645,920 $ 4,618,993
Shares issued in
reinvestment of
dividends 15,918 28,075 156,212 254,915
Shares redeemed (188,179) (214,506) (1,844,264) (1,942,117)
Net increase 96,220 322,952 $ 957,868 $ 2,931,791
CLASS B
Shares sold 405,801 692,583 $ 3,997,521 $ 6,210,101
Shares issued in
reinvestment of
dividends 23,861 52,413 234,333 473,711
Shares redeemed (254,012) (618,576) (2,498,196) (5,601,581)
Net increase 175,650 126,420 $ 1,733,658 $ 1,082,231
CLASS C
Shares sold 328,511 602,179 $ 3,256,281 $ 5,420,341
Shares issued in
reinvestment of
dividends 59,494 89,459 587,753 826,873
Shares redeemed (513,329) (2,248,394) (5,069,930) (19,882,861)
Net decrease (125,324) (1,556,756) $(1,225,896) $(13,635,647)
SHARES AMOUNT
--------------------------- ------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
MASSACHUSETTS MARCH 31,1996 SEPTEMBER 30, MARCH 31,1996 SEPTEMBER 30,
PORTFOLIO (UNAUDITED) 1995 (UNAUDITED) 1995
- ------------------ ------------ ------------ -------------- --------------
CLASS A
Shares sold 69,741 84,385 $ 747,002 $ 846,860
Shares issued in
reinvestment of
dividends and
distributions 1,880 1,677 20,017 16,995
Shares redeemed (3,242) (14,517) (34,681) (147,082)
Net increase 68,379 71,545 $ 732,338 $ 716,773
CLASS B
Shares sold 83,094 134,315 $ 886,104 $1,379,176
Shares issued in
reinvestment of
dividends and
distributions 2,839 1,760 30,233 17,847
Shares redeemed (8,722) (40,636) (92,649) (402,150)
Net increase 77,211 95,439 $ 823,688 $ 994,873
CLASS C
Shares sold 281,168 212,201 $3,000,886 $2,178,365
Shares issued in
reinvestment of
dividends and ]
distributions 10,375 7,004 110,422 71,499
Shares redeemed (49,604) (52,122) (529,224) (541,052)
Net increase 241,939 167,083 $2,582,084 $1,708,812
25
NOTES TO FINANCIAL STATEMENTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
SHARES AMOUNT
--------------------------- ------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
MARCH 31,1996 SEPTEMBER 30, MARCH 31,1996 SEPTEMBER 30
MICHIGAN PORTFOLIO (UNAUDITED) 1995 (UNAUDITED) 1995
- ------------------ ------------ ------------ -------------- --------------
CLASS A
Shares sold 40,470 276,931 $ 416,060 $ 2,738,565
Shares issued in
reinvestment of
dividends and
distributions 16,244 11,339 167,046 109,493
Shares redeemed (24,964) (41,977) (257,266) (385,329)
Net increase 31,750 246,293 $ 325,840 $ 2,462,729
CLASS B
Shares sold 70,908 156,377 $ 725,390 $ 1,459,362
Shares issued in
reinvestment of
dividends and
distributions 6,195 5,917 63,771 56,625
Shares redeemed (16,693) (106,263) (170,965) (978,875)
Net increase 60,410 56,031 $ 618,196 $ 537,112
CLASS C
Shares sold 113,873 248,250 $1,169,959 $ 2,360,494
Shares issued in
reinvestment of
dividends and
distributions 10,069 10,635 103,528 101,189
Shares redeemed (71,599) (270,068) (734,891) (2,552,312)
Net increase (decrease) 52,343 (11,183) $ 538,596 $ (90,629)
SHARES AMOUNT
--------------------------- ------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
MARCH 31,1996 SEPTEMBER 30, MARCH 31,1996 SEPTEMBER 30,
MINNESOTA PORTFOLIO (UNAUDITED) 1995 (UNAUDITED) 1995
- ------------------- ------------ ------------ -------------- --------------
CLASS A
Shares sold 43,612 59,025 $ 419,634 $ 535,578
Shares issued in
reinvestment of
dividends 6,205 11,459 59,737 105,730
Shares redeemed (23,442) (47,539) (222,352) (447,134)
Net increase 26,375 22,945 $ 257,019 $ 194,174
CLASS B
Shares sold 146,414 216,010 $ 1,419,647 $ 1,983,579
Shares issued in
reinvestment of
dividends 13,664 26,096 131,525 240,734
Shares redeemed (72,013) (142,922) (701,341) (1,290,257)
Net increase 88,065 99,184 $ 849,831 $ 934,056
CLASS C
Shares sold 85,454 72,048 $ 825,584 $ 667,481
Shares issued in
reinvestment of
dividends 15,658 37,923 150,835 348,475
Shares redeemed (133,512) (373,870) (1,283,237) (3,382,505)
Net decrease (32,400) (263,899) $ (306,818) $(2,366,549)
26
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
SHARES AMOUNT
--------------------------- ------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
MARCH 31,1996 SEPTEMBER 30, MARCH 31,1996 SEPTEMBER 30,
NEW JERSEY PORTFOLIO (UNAUDITED) 1995 (UNAUDITED) 1995
- -------------------- ------------ ------------ -------------- --------------
CLASS A
Shares sold 433,158 426,481 $ 4,248,748 $ 3,927,489
Shares issued in
reinvestment of
dividends 24,458 44,652 239,899 411,328
Shares redeemed (128,119) (288,408) (1,262,565) (2,664,713)
Net increase 329,497 182,725 $ 3,226,082 $ 1,674,104
CLASS B
Shares sold 671,977 921,717 $ 6,627,088 $ 8,533,273
Shares issued in
reinvestment of
dividends 54,471 109,495 534,318 1,007,537
Shares redeemed (333,121) (795,035) (3,281,026) (7,215,765)
Net increase 393,327 236,177 $ 3,880,380 $ 2,325,045
CLASS C
Shares sold 383,068 260,713 $ 3,769,682 $ 2,395,820
Shares issued in
reinvestment of
dividends 40,123 96,647 393,758 885,664
Shares redeemed (274,437) (1,074,250) (2,688,121) (9,678,665)
Net increase (decrease) 148,754 (716,890) $ 1,475,319 $(6,397,181)
SHARES AMOUNT
--------------------------- ------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
MARCH 31,1996 SEPTEMBER 30, MARCH 31,1996 SEPTEMBER 30,
OHIO PORTFOLIO (UNAUDITED) 1995 (UNAUDITED) 1995
- ------------------ ------------ ------------ -------------- --------------
CLASS A
Shares sold 180,889 187,714 $ 1,768,542 $ 1,745,161
Shares issued in
reinvestment of
dividends 9,047 14,798 87,777 136,073
Shares redeemed (53,046) (75,120) (515,284) (655,825)
Net increase 136,890 127,392 $ 1,341,035 $ 1,225,409
CLASS B
Shares sold 285,911 418,493 $ 2,778,048 $ 3,836,071
Shares issued in
reinvestment of
dividends 40,914 88,923 397,566 811,788
Shares redeemed (201,574) (455,507) (1,963,053) (4,110,296)
Net increase 125,251 51,909 $ 1,212,561 $ 537,563
CLASS C
Shares sold 208,915 184,387 $ 2,020,103 $ 1,674,321
Shares issued in
reinvestment of
dividends 30,598 83,246 297,210 763,381
Shares redeemed (266,795) (1,189,899) (2,597,423) (10,682,056)
Net decrease (27,282) (922,266) $ (280,110) $(8,244,354)
27
NOTES TO FINANCIAL STATEMENTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
SHARES AMOUNT
--------------------------- ------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
PENNSYLVANIA MARCH 31,1996 SEPTEMBER 30, MARCH 31,1996 SEPTEMBER 30,
PORTFOLIO (UNAUDITED) 1995 (UNAUDITED) 1995
- ------------------ ------------ ------------ -------------- --------------
CLASS A
Shares sold 237,420 300,278 $ 2,341,341 $ 2,762,892
Shares issued in
reinvestment of
dividends 10,940 29,254 107,955 269,638
Shares redeemed (100,265) (203,919) (990,228) (1,876,487)
Net increase 148,095 125,613 $ 1,459,068 $ 1,156,043
CLASS B
Shares sold 287,655 680,168 $ 2,858,651 $ 6,247,762
Shares issued in
reinvestment of
dividends 41,104 91,028 405,626 839,841
Shares redeemed (204,005) (603,060) (2,020,652) (5,537,065)
Net increase 124,754 168,136 $ 1,243,625 $ 1,550,538
CLASS C
Shares sold 235,876 395,768 $ 2,348,983 $ 3,738,239
Shares issued in
reinvestment of
dividends 25,029 56,156 247,097 512,839
Shares redeemed (282,683) (873,994) (2,801,424) (7,899,247)
Net decrease (21,778) (422,070) $ (205,344) $(3,648,169)
SHARES AMOUNT
--------------------------- ------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
MARCH 31,1996 SEPTEMBER 30, MARCH 31,1996 SEPTEMBER 30,
VIRGINIA PORTFOLIO (UNAUDITED) 1995 (UNAUDITED) 1995
- ------------------ ------------ ------------ -------------- --------------
CLASS A
Shares sold 34,062 78,719 $ 357,088 $ 791,882
Shares issued in
reinvestment of
dividends and
distributions 4,891 6,335 51,395 62,455
Shares redeemed (18,576) (33,609) (194,301) (331,886)
Net increase 20,377 51,445 $ 214,182 $ 522,451
CLASS B
Shares sold 105,897 96,151 $1,124,329 $ 942,868
Shares issued in
reinvestment of
dividends and
distributions 3,178 2,972 33,390 29,586
Shares redeemed (23,129) (6,267) (241,127) (58,483)
Net increase 85,946 92,856 $ 916,592 $ 913,971
CLASS C
Shares sold 44,165 10,903 $ 460,890 $ 105,949
Shares issued in
reinvestment of
dividends and
distributions 723 306 7,618 3,042
Shares redeemed (3,684) (3,732) (38,777) (36,085)
Net increase 41,204 7,477 $ 429,731 $ 72,906
28
FINANCIAL HIGHLIGHTS ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
PERIOD
<TABLE>
<CAPTION>
ARIZONA PORTFOLIO
------------------------------------------------------------------------------
CLASS A CLASS B
--------------------------------------- -------------------------------------
SIX MONTHS JUNE 1,1994* SIX MONTHS JUNE 1,1994*
ENDED YEAR ENDED TO ENDED YEAR ENDED TO
MARCH 31,1996 SEP. 30, SEP. 30, MARCH 31,1996 SEP. 30, SEP. 30,
(UNAUDITED) 1995 1994 (UNAUDITED) 1995 1994
------------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $10.29 $ 9.77 $10.00 $10.29 $ 9.77 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income .27** .56** .20** .24** .49** .18**
Net realized and unrealized gain (loss)
on investments (.10) .53 (.23) (.11) .53 (.24)
Net increase (decrease) in net asset value
from operations .17 1.09 (.03) .13 1.02 (.06)
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.29) (.56) (.20) (.25) (.49) (.17)
Distributions in excess of net investment
income -0- (.01) -0- -0- (.01) -0-
Distributions from net realized gains (.08) -0- -0- (.08) -0- -0-
Total dividends and distributions (.37) (.57) (.20) (.33) (.50) (.17)
Net asset value, end of period $10.09 $10.29 $ 9.77 $10.09 $10.29 $ 9.77
TOTAL RETURN
Total investment return based on net asset
value (b) 1.54% 11.56% (.35)% 1.20% 10.78% (.58)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $3,127 $2,379 $930 $4,074 $3,166 $1,677
Ratio to average net assets of:
Expenses, net of waivers/reimbursements .78%(a) .78% .78%(a) 1.48%(a) 1.48% 1.48%(a)
Expenses, before waivers/reimbursements 4.34%(a) 4.88% 7.71%(a) 5.04%(a) 5.58% 8.41%(a)
Net investment income, net of waivers/
reimbursements 5.24%(a) 5.56% 5.82%(a) 4.54%(a) 4.89% 5.13%(a)
Portfolio turnover rate 94% 85% 81% 94% 85% 81%
</TABLE>
CLASS C
-----------------------------------
SIX MONTHS JUNE 1,
ENDED YEAR ENDED 1994* TO
MARCH 31,1996 SEP. 30, SEP. 30,
(UNAUDITED) 1995 1994
------------- -------- ----------
Net asset value, beginning of year $10.30 $ 9.77 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income .24** .49 .17**
Net realized and unrealized gain (loss)
on investments (.12) .54 (.24)
Net increase (decrease) in net asset
value from operations .12 1.03 (.06)
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.25) (.49) (.17)
Distributions in excess of net
investment income -0- (.01) -0-
Distributions from net realized gains (.08) -0- -0-
Total dividends and distributions (.33) (.50) (.17)
Net asset value, end of period $10.09 $10.30 $ 9.77
TOTAL RETURN
Total investment return based on net
asset value (b) 1.10% 10.89% (.58)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $451 $481 $485
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 1.48%(a) 1.48% 1.48%(a)
Expenses, before waivers/reimbursements 5.04%(a) 5.58% 8.41%(a)
Net investment income, net of waivers/
reimbursements 4.54%(a) 4.90% 5.13%(a)
Portfolio turnover rate 94% 85% 81%(a)
See footnote summary on page 43.
29
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
-----------------------------------------------------
SIX MONTHS JUNE 25,1993*
ENDED YEAR ENDED SEPTEMBER 30, TO
MARCH 31,1996 ------------------------ SEPTEMBER 30,
(UNAUDITED) 1995 1994 1993
------------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
Net asset value, beginning of year $9.58 $8.89 $10.25 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income .27** .55** .55** .16**
Net realized and unrealized gain (loss)
on investments .04 .69 (1.35) .25
Net increase (decrease) in net asset
value from operations .31 1.24 (.80) .41
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.27) (.55) (.55) (.16)
Distributions in excess of net
investment income -0- -0- -0- -0-
Distributions from net realized gains -0- -0- (.01) -0-
Total dividends and distributions (.27) (.55) (.56) (.16)
Net asset value, end of period $9.62 $9.58 $ 8.89 $10.25
TOTAL RETURN
Total investment return based on net
asset value (b) 3.27% 14.44% (8.03)% 4.10%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $12,943 $11,956 $8,227 $4,125
Ratio to average net assets of:
Expenses, net of waivers/reimbursements .73%(a) .73% .38% -0-%(a)
Expenses, before waivers/reimbursements 1.34%(a) 1.33% 1.27% 1.30%(a)
Net investment income, net of waivers/
reimbursements 5.42%(a) 5.91% 5.70% 5.44%(a)
Portfolio turnover rate 146% 146% 185% 82%
</TABLE>
<TABLE>
<CAPTION>
CLASS B
----------------------------------------------------
SIX MONTHS JUNE 25,
ENDED YEAR ENDED SEPTEMBER 30, 1993* TO
MARCH 31,1996 ------------------------ SEP. 30,
(UNAUDITED) 1995 1994 1993
------------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net asset value, beginning of year $9.58 $8.89 $10.25 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income .23** .47** .48** .14**
Net realized and unrealized gain (loss)
on investments .06 .70 (1.35) .25
Net increase (decrease) in net asset
value from operations .29 1.17 (.87) .39
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.24) (.47) (.48) (.14)
Distributions in excess of net
investment income -0- (.01) -0- -0-
Distributions from net realized gains -0- -0- (.01) -0-
Total dividends and distributions (.24) (.48) (.49) (.14)
Net asset value, end of period $9.63 $9.58 $ 8.89 $10.25
TOTAL RETURN
Total investment return based on net
asset value (b) 3.00% 13.56% (8.72)% 3.91%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $22,460 $20,660 $18,048 $9,588
Ratio to average net assets of
Expenses, net of waivers/reimbursements 1.43%(a) 1.42% 1.08% .61%(a)
Expenses, before waivers/reimbursements 2.04%(a) 2.03% 1.98% 2.00%(a)
Net investment income, net of waivers/
reimbursements 4.73%(a) 5.22% 4.99% 4.74%(a)
Portfolio turnover rate 146% 146% 185% 82%
</TABLE>
See footnote summary on page 43.
30
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
PERIOD
<TABLE>
<CAPTION>
FLORIDA PORTFOLIO
----------------------------------------------------
CLASS C
----------------------------------------------------
SIX MONTHS JUNE 25,
ENDED YEAR ENDED SEPTEMBER 30, 1993* TO
MARCH 31,1996 ------------------------ SEP. 30,
(UNAUDITED) 1995 1994 1993
------------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net asset value, beginning of year $9.58 $8.89 $10.25 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income .23** .47** .48** .14**
Net realized and unrealized gain (loss)
on investments .06 .70 (1.35) .25
Net increase (decrease) in net asset
value from operations .29 1.17 (.87) .39
Less: Dividends and Distributions
Dividends from net investment income (.24) (.47) (.48) (.14)
Distributions in excess of net
investment income -0- (.01) -0- -0-
Distributions from net realized gains -0- -0- (.01) -0-
Total dividends and distributions (.24) (.48) (.49) (.14)
Net asset value, end of period $9.63 $9.58 $ 8.89 $10.25
TOTAL RETURN
Total investment return based on
net asset value (b) 3.00% 13.56% (8.72)% 3.91%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period(000's omitted) $29,741 $30,787 $42,405 $28,249
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 1.43%(a) 1.42% 1.08% .61%(a)
Expenses, before waivers/reimbursements 2.04%(a) 2.03% 1.97% 2.00%(a)
Net investment income, net of waivers/
reimbursements 4.70%(a) 5.27% 4.97% 4.74%(a)
Portfolio turnover rate 146% 146% 185% 82%
</TABLE>
See footnote summary on page 43.
31
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
PERIOD
<TABLE>
<CAPTION>
MASSACHUSETTS PORTFOLIO
-----------------------------------------------------------------------------
CLASS A CLASS B
--------------------------------------- -------------------------------------
SIX MONTHS MARCH 29, SIX MONTHS MARCH 29,
ENDED YEAR ENDED 1994* TO ENDED YEAR ENDED 1994* TO
MARCH 31,1996 SEP. 30, SEP. 30, MARCH 31,1996 SEP. 30, SEP. 30,
(UNAUDITED) 1995 1994 (UNAUDITED) 1995 1994
------------- ----------- ----------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $10.50 $10.12 $10.00 $10.49 $10.12 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income .29** .58** .31** .25** .52** .27**
Net realized and unrealized gain (loss)
on investments (.02) .41 .11 (.02) .39 .11
Net increase in net asset value from
operations .27 .99 .42 .23 .91 .38
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.31) (.58) (.30) (.27) (.52) (.26)
Distributions in excess of net
investment income -0- (.03) -0- -0- (.02) -0-
Distributions from net realized gains (.08) -0- -0- (.08) -0- -0-
Total dividends and distributions (.39) (.61) (.30) (.35) (.54) (.26)
Net asset value, end of period $10.38 $10.50 $10.12 $10.37 $10.49 $10.12
TOTAL RETURN
Total investment return based on
net asset value (b) 2.49% 10.19% 4.14% 2.15% 9.32% 3.78%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period(000's omitted) $2,031 $1,337 $565 $2,534 $1,754 $725
Ratio to average net assets of:
Expenses, net of waivers/reimbursements .60%(a) .60% .60%(a) 1.30%(a) 1.30% 1.30%(a)
Expenses, before waivers/reimbursements 3.39%(a) 6.44% 13.20%(a) 4.09%(a) 7.14% 13.90%(a)
Net investment income, net of waivers/
reimbursements 5.39%(a) 5.67% 5.98%(a) 4.69%(a) 4.90% 5.13%(a)
Portfolio turnover rate 129% 155% 146% 129% 155% 146%
</TABLE>
CLASS C
------------------------------------
SIX MONTHS MARCH 29,
ENDED YEAR ENDED 1994* TO
MARCH 31,1996 SEP. 30, SEP. 30,
(UNAUDITED) 1995 1994
----------- --------- -----------
Net asset value, beginning of year $10.49 $10.12 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income .25** .52** .25**
Net realized and unrealized gainon
investments (.02) .39 .13
Net increase in net asset
value from operations .23 .91 .38
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.27) (.52) (.26)
Distributions in excess of net
investment income -0- (.02) -0-
Distributions from net realized gains (.08) -0- -0-
Total dividends and distributions (.35) (.54) (.26)
Net asset value, end of period $10.37 $10.49 $10.12
TOTAL RETURN
Total investment return based on net
asset value (b) 2.15% 9.32% 3.78%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $5,034 $2,556 $774
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 1.30%(a) 1.30% 1.30%(a)
Expenses, before waivers/reimbursements 4.09%(a) 7.14% 13.90%(a)
Net investment income, net of waivers/
reimbursements 4.64%(a) 4.85% 4.00%(a)
Portfolio turnover rate 129% 155% 146%
See footnote summary on page 43.
32
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
PERIOD
<TABLE>
<CAPTION>
MICHIGAN PORTFOLIO
-----------------------------------------------------------------------------
CLASS A CLASS B
--------------------------------------- ------------------------------------
SIX MONTHS FEBRUARY 25, SIX MONTHS FEBRUARY 25,
ENDED YEAR ENDED 1994* TO ENDED YEAR ENDED 1994* TO
MARCH 31,1996 SEP. 30, SEP. 30, MARCH 31,1996 SEP. 30, SEP. 30,
(UNAUDITED) 1995 1994 (UNAUDITED) 1995 1994
------------- ----------- ----------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $10.10 $9.35 $10.00 $10.10 $9.35 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income .26** .52** .33** .22** .45** .29**
Net realized and unrealized gain (loss)
on investments .02 .78 (.65) .02 .78 (.65)
Net increase (decrease) in net asset
value from operations .28 1.30 (.32) .24 1.23 (.36)
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.28) (.52) (.33) (.24) (.45) (.29)
Distributions in excess of net
investment income -0- (.03) -0- -0- (.03) -0-
Distributions from net realized gains (.17) -0- -0- (.17) -0- -0-
Total dividends and distributions (.45) (.55) (.33) (.41) (.48) (.29)
Net asset value, end of period $9.93 $10.10 $9.35 $9.93 $10.10 $9.35
TOTAL RETURN
Total investment return based on net
asset value (b) 2.63% 14.40% (3.24)% 2.28% 13.58% (3.65)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period(000's omitted) $5,387 $5,158 $2,473 $2,984 $2,424 $1,722
Ratio to average net assets of:
Expenses, net of waivers/reimbursements .96%(a) 1.36% .93%(a) 1.66%(a) 2.06% 1.63%(a)
Expenses, before waivers/reimbursements 2.92%(a) 3.43% 3.97%(a) 3.62%(a) 4.12% 4.67%(a)
Net investment income, net of waivers/
reimbursements 5.06%(a) 5.27% 5.83%(a) 4.36%(a) 4.57% 4.93%(a)
Portfolio turnover rate 130% 151% 222% 130% 151% 222%
</TABLE>
CLASS C
------------------------------------
SIX MONTHS FEB. 25,
ENDED YEAR ENDED 1994* TO
MARCH 31,1996 SEP. 30, SEP. 30,
(UNAUDITED) 1995 1994
------------- -------- -----------
Net asset value, beginning of year $10.10 $ 9.35 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income .22** .45** .29**
Net realized and unrealized gain (loss)
on investments .02 .78 (.65)
Net increase (decrease) in net asset
value from operations .24 1.23 (.36)
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.24) (.45) (.29)
Distributions in excess of net
investment income -0- (.03) -0-
Distributions from net realized gains (.17) -0- -0-
Total dividends and distributions (.41) (.48) (.29)
Net asset value, end of period $9.93 $10.10 $ 9.35
TOTAL RETURN
Total investment return based on
net asset value (b) 2.28% 13.58% (3.65)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period(000's omitted) $3,358 $2,886 $2,778
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 1.66%(a) 2.06% 1.63%
Expenses, before waivers/reimbursements 3.62%(a) 4.13% 4.67%(a)
Net investment income, net of waivers/
reimbursements 4.35%(a) 4.69% 4.92%(a)
Portfolio turnover rate 130% 151% 222%
See footnote summary on page 43.
33
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
PERIOD
<TABLE>
<CAPTION>
MINNESOTA PORTFOLIO
-----------------------------------------------------
CLASS A
-----------------------------------------------------
SIX MONTHS JUNE 25,
ENDED YEAR ENDED SEPTEMBER 30, 1993* TO
MARCH 31,1996 ------------------------ SEPTEMBER 30,
(UNAUDITED) 1995 1994 1993
------------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
Net asset value, beginning of year $9.49 $9.19 $10.28 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income .26** .53** .55** .15**
Net realized and unrealized gain (loss)
on investments (.09) .32 (1.09) .28
Net increase (decrease) in net asset
value from operations .17 .85 (.54) .43
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.28) (.53) (.55) (.15)
Distributions in excess of net
investment income -0- (.02) -0- -0-
Total dividends and distributions (.28) (.55) (.55) (.15)
Net asset value, end of period $9.38 $9.49 $ 9.19 $10.28
TOTAL RETURN
Total investment return based on
net asset value (b) 1.73% 9.63% (5.35)% 4.34%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $2,633 $2,414 $2,125 $994
Ratio to average net assets of:
Expenses, net of waivers/reimbursements .71%(a) .71% .09% -0-%(a)
Expenses, before waivers/reimbursements 2.30%(a) 2.30% 2.12% 1.89%(a)
Net investment income, net of waivers/
reimbursements 5.44%(a) 5.71% 5.71% 5.20%(a)
Portfolio turnover rate 83% 117% 143% 61%
</TABLE>
<TABLE>
<CAPTION>
CLASS B
----------------------------------------------------
SIX MONTHS JUNE 25,
ENDED YEAR ENDED SEPTEMBER 30, 1993* TO
MARCH 31,1996 ------------------------ SEP. 30,
(UNAUDITED) 1995 1994 1993
------------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net asset value, beginning of year $9.49 $9.18 $10.28 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income .23** .46** .48** .13**
Net realized and unrealized gain (loss)
on investments (.10) .33 (1.10) .28
Net increase (decrease) in net asset
value from operations .13 .79 (.62) .41
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.24) (.46) (.48) (.13)
Distributions in excess of net
investment income -0- (.02) -0- -0-
Total dividends and distributions (.24) (.48) (.48) (.13)
Net asset value, end of period $9.38 $9.49 $ 9.18 $10.28
TOTAL RETURN
Total investment return based on
net asset value (b) 1.35% 8.90% (6.15)% 4.16%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period(000's omitted) $8,039 $7,299 $6,150 $2,665
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 1.42%(a) 1.42% .80% .43%(a)
Expenses, before waivers/reimbursements 3.01%(a) 3.02% 2.83% 2.59%(a)
Net investment income, net of waivers/
reimbursements 4.73%(a) 4.97% 5.00% 4.50%(a)
Portfolio turnover rate 83% 117% 143% 61%
</TABLE>
See footnote summary on page 43.
34
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
PERIOD
<TABLE>
<CAPTION>
MINNESOTA PORTFOLIO
----------------------------------------------------
CLASS C
----------------------------------------------------
SIX MONTHS JUNE 25,
ENDED YEAR ENDED SEPTEMBER 30, 1993* TO
MARCH 31,1996 ------------------------ SEP. 30,
(UNAUDITED) 1995 1994 1993
------------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net asset value, beginning of year $9.50 $9.19 $10.27 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income .23** .46** .48** .13**
Net realized and unrealized gain (loss)
on investments (.11) .33 (1.08) .27
Net increase (decrease) in net asset
value from operations .12 .79 (.60) .40
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.24) (.46) (.48) (.13)
Distributions in excess of net
investment income -0- (.02) -0- -0-
Total dividends and distributions (.24) (.48) (.48) (.13)
Net asset value, end of period $9.38 $9.50 $ 9.19 $10.27
TOTAL RETURN
Total investment return based on
net asset value (b) 1.24% 8.89% (5.95)% 4.06%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $6,911 $7,305 $9,489 $6,697
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 1.41%(a) 1.41% .79% .43%(a)
Expenses, before waivers/reimbursements 3.00%(a) 3.00% 2.82% 2.59%(a)
Net investment income, net of waivers/
reimbursements 4.74%(a) 5.05% 4.90% 4.50%(a)
Portfolio turnover rate 83% 117% 143% 61%
</TABLE>
See footnote summary on page 43.
35
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
----------------------------------------------------
SIX MONTHS JUNE 25,
ENDED YEAR ENDED SEPTEMBER 30, 1993* TO
MARCH 31,1996 ------------------------ SEP. 30,
(UNAUDITED) 1995 1994 1993
------------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net asset value, beginning of year $9.65 $9.07 $10.29 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income .26** .54** .55** .15**
Net realized and unrealized gain (loss)
on investments (.04) .59 (1.22) .29
Net increase (decrease) in net asset
value from operations .22 1.13 (.67) .44
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.28) (.54) (.55) (.15)
Distributions in excess of net
investment income -0- (.01) -0- -0-
Total dividends and distributions (.28) (.55) (.55) (.15)
Net asset value, end of period $9.59 $9.65 $ 9.07 $10.29
TOTAL RETURN
Total investment return based on
net asset value (b) 2.22% 12.91% (6.67)% 4.44%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $14,693 $11,612 $9,257 $6,679
Ratio to average net assets of:
Expenses, net of waivers/reimbursements .82%(a) .82% .20% -0-%(a)
Expenses, before waivers/reimbursements 1.36%(a) 1.35% 1.33% 1.29%(a)
Net investment income, net of waivers/
reimbursements 5.18%(a) 5.73% 5.65% 5.37%(a)
Portfolio turnover rate 66% 86% 171% 47%
</TABLE>
<TABLE>
<CAPTION>
CLASS B
----------------------------------------------------
SIX MONTHS JUNE 25,
ENDED YEAR ENDED SEPTEMBER 30, 1993* TO
MARCH 31,1996 ------------------------ SEP. 30,
(UNAUDITED) 1995 1994 1993
------------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net asset value, beginning of year $9.66 $9.07 $10.28 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income .22** .47** .48** .13**
Net realized and unrealized gain (loss)
on investments (.05) .60 (1.21) .28
Net increase (decrease) in net asset
value from operations .17 1.07 (.73) .41
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.24) (.47) (.48) (.13)
Distributions in excess of net
investment income -0- (.01) -0- -0-
Total dividends and distributions (.24) (.48) (.48) (.13)
Net asset value, end of period $9.59 $9.66 $ 9.07 $10.28
TOTAL RETURN
Total investment return based on net
asset value (b) 1.73% 12.15% (7.28)% 4.16%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $38,239 $34,695 $30,459 $15,637
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 1.53%(a) 1.53% .91% .63%(a)
Expenses, before waivers/reimbursements 2.07%(a) 2.06% 2.03% 1.99%(a)
Net investment income, net of waivers/
reimbursements 4.48%(a) 5.03% 4.96% 4.67%(a)
Portfolio turnover rate 66% 86% 171% 47%
</TABLE>
See footnote summary on page 43.
36
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
PERIOD
<TABLE>
<CAPTION>
NEW JERSEY PORTFOLIO
----------------------------------------------------
CLASS C
----------------------------------------------------
SIX MONTHS JUNE 25,
ENDED YEAR ENDED SEPTEMBER 30, 1993* TO
MARCH 31,1996 ------------------------ SEP. 30,
(UNAUDITED) 1995 1994 1993
------------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net asset value, beginning of year $9.66 $9.07 $10.28 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income .22** .47** .48** .13**
Net realized and unrealized gain (loss)
on investments (.05) .60 (1.21) .28
Net increase (decrease) in net asset
value from operations .17 1.07 (.73) .41
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.24) (.47) (.48) (.13)
Distributions in excess of net
investment income -0- (.01) -0- -0-
Total dividends and distributions (.24) (.48) (.48) (.13)
Net asset value, end of period $9.59 $9.66 $ 9.07 $10.28
TOTAL RETURN
Total investment return based on
net asset value (b) 1.73% 12.14% (7.28)% 4.16%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $22,543 $21,255 $26,472 $21,193
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 1.52%(a) 1.52% .90% .63%(a)
Expenses, before waivers/reimbursements 2.06%(a) 2.06% 2.02% 1.99%(a)
Net investment income, net of waivers/
reimbursements 4.48%(a) 5.09% 4.93% 4.67%(a)
Portfolio turnover rate 66% 86% 171% 47%
</TABLE>
See footnote summary on page 43.
37
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
PERIOD
<TABLE>
<CAPTION>
OHIO PORTFOLIO
----------------------------------------------------
CLASS A
----------------------------------------------------
SIX MONTHS JUNE 25,
ENDED YEAR ENDED SEPTEMBER 30, 1993* TO
MARCH 31,1996 ------------------------ SEP. 30,
(UNAUDITED) 1995 1994 1993
------------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net asset value, beginning of year $9.53 $9.06 $10.26 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income .26** .54** .55** .15**
Net realized and unrealized gain (loss)
on investments .06 .48 (1.19) .26
Net increase (decrease) in net asset
value from operations .32 1.02 (.64) .41
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.27) (.54) (.55) (.15)
Distributions in excess of net
investment income -0- (.01) -0- -0-
Distributions from net realized gains -0- -0- (.01) -0-
Total dividends and distributions (.27) (.55) (.56) (.15)
Net asset value, end of period $9.58 $9.53 $ 9.06 $10.26
TOTAL RETURN
Total investment return based on
net asset value (b) 3.41% 11.63% (6.44)% 4.15%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $5,499 $4,170 $2,810 $1,050
Ratio to average net assets of:
Expenses, net of waivers/reimbursements .75%(a) .75% .04% -0-%(a)
Expenses, before waivers/reimbursements 1.55%(a) 1.51% 1.42% 1.32%(a)
Net investment income, net of waivers/
reimbursements 5.43%(a) 5.74% 5.67% 5.30%(a)
Portfolio turnover rate 86% 108% 161% 55%
</TABLE>
<TABLE>
<CAPTION>
CLASS B
----------------------------------------------------
SIX MONTHS JUNE 25,
ENDED YEAR ENDED SEPTEMBER 30, 1993* TO
MARCH 31,1996 ------------------------ SEP. 30,
(UNAUDITED) 1995 1994 1993
------------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net asset value, beginning of year $9.54 $9.06 $10.26 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income .23** .47** .48** .13**
Net realized and unrealized gain (loss)
on investments .05 .49 (1.19) .26
Net increase (decrease) in net asset
value from operations .28 .96 (.71) .39
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.24) (.47) (.48) (.13)
Distributions in excess of net
investment income -0- (.01) -0- -0-
Distributions from net realized gains -0- -0- (.01) -0-
Total dividends and distributions (.24) (.48) (.49) (.13)
Net asset value, end of period $9.58 $9.54 $ 9.06 $10.26
TOTAL RETURN
Total investment return based on
net asset value (b) 2.92% 10.88% (7.13)% 3.97%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $23,111 $21,821 $20,267 $8,952
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 1.46%(a) 1.46% .74% .17%(a)
Expenses, before waivers/reimbursements 2.25%(a) 2.21% 2.13% 2.02%(a)
Net investment income, net of waivers/
reimbursements 4.74%(a) 5.08% 4.95% 4.60%(a)
Portfolio turnover rate 86% 108% 161% 55%
</TABLE>
See footnote summary on page 43.
38
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
PERIOD
<TABLE>
<CAPTION>
OHIO PORTFOLIO
----------------------------------------------------
CLASS C
----------------------------------------------------
SIX MONTHS JUNE 25,
ENDED YEAR ENDED SEPTEMBER 30, 1993* TO
MARCH 31,1996 ------------------------ SEP. 30,
(UNAUDITED) 1995 1994 1993
------------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net asset value, beginning of year $9.54 $9.06 $10.26 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income .23** .47** .48** .13**
Net realized and unrealized gain (loss)
on investments .05 .49 (1.19) .26
Net increase (decrease) in net asset
value from operations .28 .96 (.71) .39
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.24) (.47) (.48) (.13)
Distributions in excess of net
investment income -0- (.01) -0- -0-
Distributions from net realized gains -0- -0- (.01) -0-
Total dividends and distributions (.24) (.48) (.49) (.13)
Net asset value, end of period $9.58 $9.54 $9.06 $10.26
TOTAL RETURN
Total investment return based on
net asset value (b) 2.92% 10.88% (7.13)% 3.97%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $18,691 $18,874 $26,294 $19,894
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 1.45%(a) 1.45% .74% .17%(a)
Expenses, before waivers/reimbursements 2.25%(a) 2.20% 2.12% 2.02%(a)
Net investment income, net of waivers/
reimbursements 4.76%(a) 5.14% 4.89% 4.60%(a)
Portfolio turnover rate 86% 108% 161% 55%
</TABLE>
See footnote summary on page 43.
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
-----------------------------------------------------
SIX MONTHS JUNE 25,
ENDED YEAR ENDED SEPTEMBER 30, 1993* TO
MARCH 31,1996 ------------------------ SEP. 30,
(UNAUDITED) 1995 1994 1993
------------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
Net asset value, beginning of year $9.64 $9.18 $10.25 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income .26** .54** .56** .16**
Net realized and unrealized gain (loss)
on investments .09 .48 (1.06) .25
Net increase (decrease) in net asset
value from operations .35 1.02 (.50) .41
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.28) (.54) (.56) (.16)
Distributions in excess of net
investment income -0- (.02) -0- -0-
Distributions from net realized gains -0- -0- (.01) -0-
Total dividends and distributions (.28) (.56) (.57) (.16)
Net asset value, end of period $9.71 $9.64 $9.18 $10.25
TOTAL RETURN
Total investment return based on
net asset value (b) 3.63% 11.53% (5.02)% 4.12%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $10,223 $8,721 $7,149 $4,170
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 1.00%(a) 1.00% .45% -0-%(a)
Expenses, before waivers/reimbursements 1.48%(a) 1.47% 1.46% 1.31%(a)
Net investment income, net of waivers/
reimbursements 5.27%(a) 5.78% 5.73% 5.67%(a)
Portfolio turnover rate 94% 114% 156% 75%
</TABLE>
<TABLE>
<CAPTION>
CLASS B
----------------------------------------------------
SIX MONTHS JUNE 25,
ENDED YEAR ENDED SEPTEMBER 30, 1993* TO
MARCH 31,1996 ------------------------ SEP. 30,
(UNAUDITED) 1995 1994 1993
------------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net asset value, beginning of year $9.65 $9.18 $10.25 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income .23** .47** .49** .14**
Net realized and unrealized gain (loss)
on investments .08 .49 (1.06) .25
Net increase (decrease) in net asset
value from operations .31 .96 (.57) .39
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.24) (.47) (.49) (.14)
Distributions in excess of net
investment income -0- (.02) -0- -0-
Distributions from net realized gains -0- -0- (.01) -0-
Total dividends and distributions (.24) (.49) (.50) (.14)
Net asset value, end of period $9.72 $9.65 $9.18 $10.25
TOTAL RETURN
Total investment return based on
net asset value (b) 3.25% 10.78% (5.72)% 3.94%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $29,982 $28,559 $25,637 12,173
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 1.71%(a) 1.71% 1.16% .40%(a)
Expenses, before waivers/reimbursements 2.19%(a) 2.17% 2.16% 2.01%(a)
Net investment income, net of waivers/
reimbursements 4.57%(a) 5.09% 5.01% 4.97%(a)
Portfolio turnover rate 94% 114% 156% 75%
</TABLE>
See footnote summary on page 43.
40
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
PERIOD
<TABLE>
<CAPTION>
PENNSYLVANIA PORTFOLIO
----------------------------------------------------
CLASS C
----------------------------------------------------
SIX MONTHS JUNE 25,
ENDED YEAR ENDED SEPTEMBER 30, 1993* TO
MARCH 31,1996 ------------------------ SEP. 30,
(UNAUDITED) 1995 1994 1993
------------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net asset value, beginning of year $9.65 $9.18 $10.24 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income .23** .47** .49** .14**
Net realized and unrealized gain (loss)
on investments .08 .49 (1.05) .24
Net increase (decrease) in net asset
value from operations .31 .96 (.56) .38
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.24) (.47) (.49) (.14)
Distributions in excess of net
investment income -0- (.02) -0- -0-
Distributions from net realized gains -0- -0- (.01) -0-
Total dividends and distributions (.24) (.49) (.50) (.14)
Net asset value, end of period $9.72 $9.65 $ 9.18 $10.24
TOTAL RETURN
Total investment return based on
net asset value (b) 3.24% 10.78% (5.63)% 3.84%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $14,952 $15,052 $18,198 $13,541
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 1.70%(a) 1.70% 1.15% .40%(a)
Expenses, before waivers/reimbursements 2.18%(a) 2.17% 2.15% 2.01%(a)
Net investment income, net of waivers/
reimbursements 4.57%(a) 5.09% 4.99% 4.97%(a)
Portfolio turnover rate 94% 114% 156% 75%(a)
</TABLE>
See footnote summary on page 43.
41
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
PERIOD
<TABLE>
<CAPTION>
VIRGINIA PORTFOLIO
------------------------------------------------------------------------------
CLASS A CLASS B
--------------------------------------- -------------------------------------
SIX MONTHS APRIL 29, SIX MONTHS APRIL 29,
ENDED YEAR ENDED 1994* TO ENDED YEAR ENDED 1994* TO
MARCH 31,1996 SEP. 30, SEP. 30, MARCH 31,1996 SEP. 30, SEP. 30,
(UNAUDITED) 1995 1994 (UNAUDITED) 1995 1994
------------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $10.29 $ 9.69 $10.00 $10.29 $ 9.69 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income .28** .56** .24** .24** .49** .22**
Net realized and unrealized gain (loss)
on investments .19 .61 (.31) .19 .61 (.32)
Net increase (decrease) in net asset
value from
operations .46 1.17 (.07) .43 1.10 (.10)
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.28) (.56) (.24) (.25) (.49) (.21)
Distributions in excess of net
investment income -0- (.01) -0- -0- (.01) -0-
Distributions from net realized gains (.08) -0- -0- (.08) -0- -0-
Total dividends and distributions (.36) (.57) (.24) (.33) (.50) (.21)
Net asset value, end of period $10.39 $10.29 $ 9.69 $10.39 $10.29 $ 9.69
TOTAL RETURN
Total investment return based on
net asset value (b) 4.55% 12.46% (.71)% 4.21% 11.67% (1.01)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $2,085 $1,855 $1,249 $2,098 $1,193 $224
Ratio to average net assets of:
Expenses, net of waivers/reimbursements .67%(a) .67% .57%(a) 1.37%(a) 1.37% 1.27%(a)
Expenses, before waivers/reimbursements 6.40%(a) 8.96% 12.29%(a) 7.10%(a) 9.66% 12.99%(a)
Net investment income, net of waivers/
reimbursements 5.25%(a) 5.59% 5.62%(a) 4.53%(a) 4.80% 4.97%(a)
Portfolio turnover rate 155% 128% 65% 155% 128% 65%
</TABLE>
CLASS C
-----------------------------------
SIX MONTHS APRIL 29,
ENDED YEAR ENDED 1994* TO
MARCH 31,1996 SEP. 30, SEP. 30,
(UNAUDITED) 1995 1994
------------- -------- ----------
Net asset value, beginning of year $10.29 $ 9.70 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income .22** .49** .21**
Net realized and unrealized gain (loss)
on investments .21 .60 (.30)
Net increase (decrease) in net asset
value from operations .43 1.09 (.09)
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.25) (.49) (.21)
Distributions in excess of net
investment income -0- (.01) -0-
Distributions from net realized gains (.08) -0- -0-
Total dividends and distributions (.33) (.50) (.21)
Net asset value, end of period $10.39 $10.29 $9.70
TOTAL RETURN
Total investment return based on
net asset value (b) 4.21% 11.56% (.91)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $552 $122 $43
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 1.37%(a) 1.37% 1.27%(a)
Expenses, before waivers/reimbursements 7.10%(a) 9.66% 12.99%(a)
Net investment income, net of waivers/
reimbursements 4.59%(a) 4.81% 4.67%(a)
Portfolio turnover rate 155% 128% 65%
See footnote summary on page 43.
42
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.
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
KATHLEEN A. CORBET, SENIOR VICE PRESIDENT
WAYNE D. LYSKI, SENIOR VICE PRESIDENT
WILLIAM E. OLIVER, VICE PRESIDENT
EDMUND P. BERGAN, JR., SECRETARY
MARK D. GERSTEN, TREASURER & CHIEF FINANCIAL OFFICER
JUAN J. RODRIGUEZ, 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
THE ALLIANCE FAMILY OF MUTUAL FUNDS
_______________________________________________________________________________
FIXED INCOME
Alliance Bond Fund
U.S. Government Portfolio
Corporate Bond Portfolio
Alliance Global Dollar Government Fund
Alliance Global Strategic Income Trust
Alliance Mortgage Securities Income Fund
Alliance Limited Maturity Government Fund
Alliance Multi-Market Strategy Trust
Alliance North American Government Income Trust
Alliance Short-Term Multi-Market Trust
Alliance Short-Term U.S. Government Fund
Alliance World Income Trust
TAX-FREE INCOME
Alliance Municipal Income Fund
California Portfolio
Insured California Portfolio
Insured National Portfolio
National Portfolio
New York Portfolio
Alliance Municipal Income Fund II
Arizona Portfolio
Florida Portfolio
Massachusetts Portfolio
Michigan Portfolio
Minnesota Portfolio
New Jersey Portfolio
Ohio Portfolio
Pennsylvania Portfolio
Virginia Portfolio
MONEY MARKET
AFD Exchange Reserves
GROWTH
The Alliance Fund
Alliance Global Small Cap Fund
Alliance Growth Fund
Alliance Premier Growth Fund
GROWTH & INCOME
Alliance Strategic Balanced Fund
Alliance Balanced Shares
Alliance Conservative Investors Fund
Alliance Growth & Income Fund
Alliance Growth Investors Fund
Alliance Income Builder Fund
Alliance Utility Income Fund
AGGRESSIVE GROWTH
Alliance Quasar Fund
Alliance Technology Fund
INTERNATIONAL
Alliance All-Asia Investment Fund
Alliance International Fund
Alliance New Europe Fund
Alliance Worldwide Privatization Fund
CLOSED-END FUNDS
Alliance All-Market Advantage Fund
Alliance Global Environment Fund
ACM Government Income Fund
ACM Government Opportunity Fund
ACM Government Securities Fund
ACM Government Spectrum Fund
ACM Managed Dollar Income Fund
ACM Managed Income Fund
ACM Municipal Securities Income Fund
Alliance World Dollar Government Fund
Alliance World Dollar Government Fund II
The Austria Fund
The Korean Investment Fund
The Spain Fund
The Southern Africa Fund
CASH MANAGEMENT SERVICES
ACM Institutional Reserves
Government Portfolio
Prime Portfolio
Tax-Free Portfolio
Trust Portfolio
Alliance Capital Reserves
Alliance Government Reserves
Alliance Insured Account
Alliance Money Reserves
Alliance Municipal Trust
California Portfolio
Connecticut Portfolio
Florida Portfolio
General Portfolio
New Jersey Portfolio
New York Portfolio
Virginia Portfolio
Alliance Treasury Reserves
Alliance Money Market Fund
Prime Portfolio
Government Portfolio
General Municipal Portfolio
45
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.
MUNIIISR
