ALLIANCE MUNICIPAL INCOME FUND II
SEMI-ANNUAL REPORT
MARCH 31, 1999
ALLIANCE CAPITAL
LETTER TO SHAREHOLDERS ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
May 26, 1999
Dear Shareholder:
We are pleased to report municipal market activity and investment results for
Alliance Municipal Income
Fund II's six-month fiscal reporting period ending March 31, 1999.
ALLIANCE MUNICIPAL INCOME FUND II--CLASS A SHARES
Period Ended March 31, 1999
<TABLE>
<CAPTION>
6 MONTHS
FUND SINCE
PORTFOLIO 1 YEAR 3 YEARS 5 YEARS INCEPTION 3 YEAR
TOTAL LIPPER LIPPER LIPPER LIPPER MORNINGSTAR
PORTFOLIO RETURNS* RANKINGS** RANKINGS** RANKINGS** RANKINGS** RATINGS***
- ------------- --------- --------- ---------- ----------- ------------ -----------
<C> <C> <C> <C> <C> <C>
Arizona 1.89% 1/39 1/34 n/a 1/22 5 stars
Florida 1.38% 3/64 2/57 1/36 2/25 5 stars
Massachusetts 2.16% 1/57 1/52 1/37 1/37 5 stars
Michigan 2.20% 2/49 1/41 1/31 1/31 5 stars
Minnesota 2.22% 4/47 1/45 1/28 2/22 5 stars
New Jersey 2.51% 1/55 1/48 1/31 1/26 5 stars
Ohio 1.92% 9/51 1/47 1/35 1/28 5 stars
Pennsylvania 1.59% 1/62 1/57 1/42 1/35 5 stars
Virginia 1.32% 15/35 1/32 n/a 1/26 5 stars
Number of Funds in Morningstar Municipal Bond Fund Category 1,578
</TABLE>
* THE FUND'S INVESTMENT RESULTS ARE BASED ON THE NET ASSET VALUE OF CLASS A
SHARES. ALL FEES AND EXPENSES RELATED TO THE OPERATION OF THE FUND HAVE BEEN
DEDUCTED, BUT NO ADJUSTMENT HAS BEEN MADE FOR SALES CHARGES THAT MAY APPLY WHEN
SHARES ARE PURCHASED OR REDEEMED. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE
RESULTS. ADDITIONAL PERFORMANCE INFORMATION CAN BE FOUND ON PAGES 3-5.
** LIPPER RANKINGS CORRESPOND TO THE PORTFOLIO'S RETURN AMONG THE RETURNS OF
ITS PEER GROUP OF FUNDS, AS REPRESENTED BY THE RESPECTIVE STATE SPECIFIC LIPPER
MUNICIPAL DEBT FUNDS AVERAGE. FUNDS IN THE LIPPER AVERAGES GENERALLY HAVE
SIMILAR INVESTMENT OBJECTIVES TO THE FUND, ALTHOUGH SOME MAY HAVE DIFFERENT
INVESTMENT POLICIES. FUND PORTFOLIO INCEPTION DATES ARE: ARIZONA (6/1/94);
FLORIDA (6/25/93); MASSACHUSETTS (3/29/94); MICHIGAN (2/25/94); MINNESOTA
(6/25/93); NEW JERSEY (6/25/93); OHIO (6/25/93); PENNSYLVANIA (6/25/93); AND
VIRGINIA (4/29/94). SINCE INCEPTION LIPPER RANKINGS ARE BASED ON THE CLOSEST
MONTH-END TO EACH PORTFOLIO'S INCEPTION DATE. AN INVESTOR CANNOT INVEST
DIRECTLY IN AN AVERAGE.
*** MORNINGSTAR PROPRIETARY RATINGS REFLECT HISTORICAL RISK-ADJUSTED
PERFORMANCE AS OF MARCH 31, 1999. EACH PORTFOLIO'S 5-YEAR (WHERE APPLICABLE)
AND OVERALL MORNINGSTAR RATINGS WERE: ARIZONA 5 STARS; FLORIDA 5 STARS AND 5
STARS; MASSACHUSETTS 5 STARS AND 5 STARS; MICHIGAN 5 STARS AND 5 STARS;
MINNESOTA 4 STARS AND 4 STARS; NEW JERSEY 4 STARS AND 4 STARS; OHIO 5 STARS AND
5 STARS; PENNSYLVANIA 5 STARS AND 5 STARS; VIRGINIA 5 STARS AMONG 1,131
MUNICIPAL BOND FUNDS FOR THE 5-YEAR PERIOD AND AMONG 1,578 MUNICIPAL BOND FUNDS
FOR THE OVERALL PERIOD. THESE RATINGS MAY CHANGE MONTHLY AND ARE CALCULATED
FROM EACH PORTFOLIO'S 3-YEAR, 5-YEAR (WHERE APPLICABLE) AND OVERALL AVERAGE
ANNUAL RETURNS IN EXCESS OF 90-DAY TREASURY BILL RETURNS WITH APPROPRIATE FEE
ADJUSTMENTS AND A RISK FACTOR THAT REFLECTS PORTFOLIO PERFORMANCE BELOW 90-DAY
TREASURY BILL RETURNS. IF THE PORTFOLIO SCORES IN THE TOP 10% OF ITS CLASS, IT
RECEIVES 5 STARS; IF IT FALLS IN THE NEXT 22.5%, IT RECEIVES 4 STARS; A PLACE
IN THE MIDDLE 35% EARNS IT 3 STARS; IF IT FALLS IN THE NEXT 22.5%, IT RECEIVES
2 STARS; AND IF IT SCORES AT THE BOTTOM 10%, IT GETS 1 STAR. EACH PORTFOLIO'S
SEC AVERAGE ANNUAL TOTAL RETURNS CAN BE FOUND ON PAGE 4.
MARKET OVERVIEW
For the six months ended March 31, 1999, the municipal bond market continued to
perform well compared to the U.S. government bond (Treasury) market. Part of
this positive performance was attributable to a declining yield ratio, or
relationship of municipal bond yields to Treasury yields, over the period. In
the latter part of calendar 1998, investors seeking the "safe haven" of U.S.
government bonds during the emerging markets crisis pushed the yield ratio
toward 100%, compared with traditional levels of roughly 85%. The markets
reversed course in recent months, retracing much of the ground lost in 1998. In
addition to the easing of international financial tensions, continued investor
demand for tax-exempt
1
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
income and the absence of any significant tax reform legislation contributed to
the price appreciation we have seen throughout the municipal market.
Another significant contributor to the health of the municipal bond market is
the continuing improvement of the creditworthiness of state and local
governments. The strong domestic economy continues to produce record levels of
sales, income and property tax receipts. State and local government spending
has increased at a lower rate than tax revenues, resulting in overall budget
surpluses.
INVESTMENT STRATEGY
In response to the unusually high yields on municipal bonds compared with
government bonds (on an after-tax basis) during the reporting period, your
management team selectively added new municipal positions to the portfolios. In
particular, we have continued to focus our research efforts on project-specific
financings, primarily basic infrastructure improvement projects. Over time, we
expect that the underlying credit fundamentals of the issuers of these
securities will improve and that the original, higher-yielding debt that we
hold will outperform the broader municipal market. We have also continued our
strategy of selectively adding new, non-rated positions to our single state
portfolios, which offer substantially more income for acceptable incremental
risk.
In addition to our overall portfolio strategy built on fundamental credit
analysis, we attempt, when market conditions are favorable, to make
opportunistic purchases and sales of securities at advantageous prices. A good
example of such a time in the market was December 1998, when dealers and
investors provided lower levels of liquidity during holiday and year-end
reporting periods. In December, we made several purchases at attractive prices.
We also use these market opportunities to improve the call protection in the
portfolios and to increase overall risk-adjusted return profile. Over time, we
have found that this type of opportunistic investing provides an important part
of our total return advantage compared with our peer group of competing mutual
funds.
MARKET OUTLOOK
The U.S. economy's low inflation, steady growth and federal budget surplus
should lead to further stability in all sectors of the bond market. The
municipal market should continue to perform in line with the broader market. In
this type of trading-range environment, we anticipate that the yield ratio of
municipals to Treasuries should continue to decline to its historic mean level
of approximately 85%. This room for improvement should allow municipals to
continue to perform well relative to Treasuries and corporate bonds. However,
more new infrastructure projects are under consideration at the state level and
the local level than in the recent past. This may lead to an increased supply
of new issues of tax-exempt bonds. We expect, however, that the overall supply
and demand characteristics of the market will remain in approximate equilibrium
and that neither new issues nor net redemptions will move the market
appreciably.
As always, we will continue to pursue our tactics of buying on weakness and
selling on strength within the overall strategy of fundamental credit analysis.
We appreciate your investment in Alliance Municipal Income Fund II and look
forward to reporting future investment results.
Sincerely,
John D. Carifa
Chairman and President
Susan P. Keenan
Senior Vice President
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, GUARANTEED OR ENDORSED
BY, ANY BANK; FURTHER, SUCH SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY.
SHARES OF THE FUND INVOLVE INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF
PRINCIPAL.
2
INVESTMENT OBJECTIVE AND POLICIES ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
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 personal income tax (or for Florida, the
intangible tax) that is available without assuming undue risk. These securities
generally offer current yields above those of higher quality municipal
obligations.
HOW YOUR PORTFOLIO PERFORMED OVER THE PAST SIX MONTHS
The Portfolios' Class A share total returns at net asset value (NAV) for the
6-month and 1-year periods ended March 31, 1999 are shown below. For
comparison, we have also shown returns for the overall municipal bond market,
represented by the unmanaged state specific Lipper Municipal Debt Funds
Average, for the 1-year, 3-year and 5-year periods ended March 31, 1999.
Current yields and returns for Class B and Class C shares are on the next two
pages.
INVESTMENT RESULTS
MUNICIPAL INCOME FUND II--CLASS A SHARES COMPARED TO LIPPER MUNICIPAL DEBT
FUNDS AVERAGE*
Period Ended March 31, 1999
<TABLE>
<CAPTION>
FUND PORTFOLIO FUND PORTFOLIO
TOTAL RETURNS TOTAL RETURNS LIPPER LIPPER LIPPER
(AT NAV) (AT NAV) AVERAGE AVERAGE AVERAGE
PORTFOLIO 6 MONTHS 1 YEAR 1 YEAR 3 YEARS 5 YEARS
- ------------- -------------- --------------- --------- ------- -------
<C> <C> <C> <C> <C>
Arizona 1.89% 7.20% 5.15% 6.77% 7.10%#
Florida 1.38% 5.89% 4.90% 6.61% 6.85%
Massachusetts 2.16% 6.52% 4.96% 6.69% 6.80%
Michigan 2.20% 6.47% 4.91% 6.52% 6.70%
Minnesota 2.22% 5.96% 5.06% 6.42% 6.51%
New Jersey 2.51% 6.94% 5.22% 6.61% 6.68%
Ohio 1.92% 5.58% 4.98% 6.58% 6.70%
Pennsylvania 1.59% 6.39% 4.66% 6.59% 6.70%
Virginia 1.32% 5.11% 4.95% 6.80% 6.95%#
</TABLE>
* Total returns for the Fund's portfolios are based on the net asset value
of Class A shares as of March 31, 1999. All fees and expenses related to the
operation of the Fund have been deducted, but no adjustment has been made for
sales charges that may apply when shares are purchased or redeemed. Past
performance is no guarantee of future results. The state specific Lipper
Municipal Debt Funds Averages have generally similar investment objectives to
your Fund's portfolios, although some may have different investment policies.
# Portfolios that are not yet 5 years old show since inception Lipper
returns, rather than 5-year returns.
3
INVESTMENT RESULTS
AS OF MARCH 31, 1999 ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
NAV AND SEC TOTAL RETURNS
--------------------------------------------------------------
WITHOUT SALES CHARGE WITH SALES CHARGE
----------------------------- -----------------------------
1 5 SINCE 1 5 SINCE
YEAR YEAR INCEPTION YEAR YEAR INCEPTION
------- ------- --------- ------- ------- ---------
ARIZONA
Class A 7.20% n/a 8.23% 2.62% n/a 7.27%
Class B 6.42% n/a 7.48% 3.42% n/a 7.48%
Class C 6.42% n/a 7.48% 5.42% n/a 7.48%
FLORIDA
Class A 5.89% 8.54% 6.42% 1.36% 7.61% 5.63%
Class B 5.17% 7.75% 5.66% 2.17% 7.75% 5.66%
Class C 5.17% 7.75% 5.65% 4.17% 7.75% 5.65%
MASSACHUSETTS
Class A 6.52% 9.42% 9.40% 1.98% 8.48% 8.46%
Class B 5.86% 8.67% 8.66% 2.86% 8.67% 8.66%
Class C 5.86% 8.68% 8.66% 4.86% 8.68% 8.66%
MICHIGAN
Class A 6.47% 9.15% 7.90% 1.98% 8.20% 6.99%
Class B 5.67% 8.38% 7.14% 2.67% 8.38% 7.14%
Class C 5.67% 8.38% 7.14% 4.67% 8.38% 7.14%
MINNESOTA
Class A 5.96% 7.74% 6.06% 1.45% 6.82% 5.27%
Class B 5.22% 6.97% 5.29% 2.22% 6.97% 5.29%
Class C 5.22% 6.95% 5.29% 4.22% 6.95% 5.29%
NEW JERSEY
Class A 6.94% 8.20% 6.43% 2.36% 7.26% 5.63%
Class B 6.20% 7.41% 5.66% 3.20% 7.41% 5.66%
Class C 6.20% 7.41% 5.66% 5.20% 7.41% 5.66%
OHIO
Class A 5.58% 8.23% 6.40% 1.08% 7.30% 5.61%
Class B 4.86% 7.45% 5.63% 1.86% 7.45% 5.63%
Class C 4.86% 7.45% 5.63% 3.86% 7.45% 5.63%
PENNSYLVANIA
Class A 6.39% 8.48% 6.79% 1.90% 7.55% 5.99%
Class B 5.67% 7.69% 6.02% 2.67% 7.69% 6.02%
Class C 5.67% 7.69% 6.02% 4.67% 7.69% 6.02%
VIRGINIA
Class A 5.11% n/a 8.74% 0.68% n/a 7.80%
Class B 4.44% n/a 8.00% 1.46% n/a 8.00%
Class C 4.44% n/a 8.01% 3.45% n/a 8.01%
The Fund's investment results represent total returns. The NAV and SEC returns
reflect reinvestment of dividends and/or capital gains distributions in
additional shares, without (NAV) and with (SEC) the effect of the 4.25% maximum
front-end sales charge for Class A shares or applicable contingent deferred
sales charge for Class B shares (3% year 1, 2% year 2, 1% year 3, 0% year 4);
and for Class C shares (1% year 1). Returns for Class A shares do not reflect
the imposition of the 1 year 1% contingent deferred sales charge for accounts
over $1,000,000.
Past performance does not guarantee future results. Investment return and
principal value will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost.
n/a: not applicable.
4
INVESTMENT RESULTS
AS OF MARCH 31, 1999 ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
TAXABLE
EQUIVALENT
YIELD IN
30 DAY 36% TAX BRACKET
PORTFOLIO SEC YIELD* (AT NAV)
- --------- ---------- -----------------
ARIZONA
Class A 4.20% 8.24%
Class B 3.68% 7.18%
Class C 3.69% 7.18%
FLORIDA
Class A 4.58% 7.95%
Class B 4.09% 6.88%
Class C 4.09% 6.88%
MASSACHUSETTS
Class A 4.47% 8.57%
Class B 3.97% 7.53%
Class C 3.97% 7.53%
MICHIGAN
Class A 4.06% 7.73%
Class B 3.54% 6.65%
Class C 3.54% 6.65%
MINNESOTA
Class A 4.48% 8.52%
Class B 3.96% 7.31%
Class C 3.97% 7.31%
NEW JERSEY
Class A 4.11% 8.26%
Class B 3.58% 7.11%
Class C 3.59% 7.11%
OHIO
Class A 4.11% 8.63%
Class B 3.59% 7.48%
Class C 3.60% 7.48%
PENNSYLVANIA
Class A 4.22% 8.10%
Class B 3.70% 7.01%
Class C 3.71% 7.01%
VIRGINIA
Class A 4.44% 8.42%
Class B 3.94% 7.36%
Class C 3.93% 7.36%
* SEC yields are based on SEC guidelines and are calculated on 30 days ended
March 31, 1999
5
ARIZONA PORTFOLIO
PORTFOLIO OF INVESTMENTS
MARCH 31, 1999 (UNAUDITED) ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS(A) (000) VALUE
- --------------------------------------------------------------------------
MUNICIPAL BONDS-97.9%
LONG TERM MUNICIPAL BONDS-96.2%
ARIZONA-91.2%
AAA Glendale Connie Lee
(Midwestern Univ) Ser 96A
6.00%, 5/15/26 $ 475 $ 526,675
AAA Glendale Connie Lee
(Midwestern Univ) Ser 96A
6.00%, 5/15/06 Pre-refunded 1,025 1,160,710
NR Goodyear Assessment
District No 1 Ser 96C
7.25%, 7/01/16 4,668 5,107,119
NR Hassayampa Cmnty Fac
Dist Spec Assessment Lien Ser 96
7.75%, 7/01/21 6,910 7,765,665
AAA Maricopa Cnty MFHR
(Mesa Ridge Apts Proj)
MBIA Ser 99A
5.15%, 7/01/29 1,250 1,253,275
AAA Maricopa Cnty MFHR
(Shadow Creek Apts Proj)
FNMA Ser 94C
5.20%, 12/15/21 5,600 5,599,552
AAA Maricopa Cnty GO
School Dist No. 28
(Kyrene Elem) FGIC Ser 95B
6.00%, 7/01/14 2,000 2,158,720
AAA Maricopa Cnty Hlth Fac Rev
(Catholic Healthcare West)
MBIA Ser 93
7.902%, 7/01/13 (a) 2,590 2,918,412
AA- Maricopa Cnty IDR
(Citizens Utilities) Ser 95 AMT
6.20%, 5/01/30 2,630 2,867,752
AAA Mesa Cnty Health Care Fac
(Lutheran Hlth Sys) MBIA Ser 98A
5.00%, 1/01/19 2,903 2,870,486
AA Mohave Cnty IDR
(Cargill /North Star Steel)
Ser 95A AMT
6.70%, 3/01/20 6,000 6,769,560
AAA Mohave Cnty IDR
Hlth Care Rev
(Chris Ridge & Silver)
GNMA Ser 96
6.375%, 11/01/31 1,000 1,090,770
AAA Phoenix Arpt Rev
(Sky Harbor/Goodyear/Deer Valley)
MBIA Ser 94D AMT
6.30%, 7/01/10 1,795 1,975,182
AA+ Phoenix Excise Tax Rev
(Civic Plaza Bldg Corp)
Sr Lien Ser 94
6.00%, 7/01/12 1,015 1,095,408
AA Phoenix MFHR
(Woodstone & Silver Springs)
Asset Gty Ser 93
6.25%, 4/01/23 2,000 2,116,961
AAA Pima Cnty
SFMR GNMA/FNMA/FHLMC
Ser 97A AMT
6.25%, 11/01/30 2,195 2,312,213
AAA Tempe MFHR
(Quadrangles) FHA Ser 93
6.25%, 6/01/26 2,740 2,903,989
AAA Yuma MFHR
(Alexandrite Sands Apts)
FHA Ser 90 AMT
7.70%, 12/01/29 3,000 3,131,250
53,623,699
PUERTO RICO-5.0%
AAA Puerto Rico Hsg Fin Corp Rev
SFMR GNMA Ser 98 AMT
5.20%, 12/01/32 2,905 2,903,402
TOTAL LONG TERM MUNICIPAL BONDS
(cost $55,169,233) 56,527,101
6
ARIZONA PORTFOLIO
PORTFOLIO OF INVESTMENTS
(CONTINUED) ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS(A) (000) VALUE
- --------------------------------------------------------------------------
SHORT TERM MUNICIPAL NOTE-1.7%
A-2 Tucson IDR MFHR
(Lincoln Garden Apts)
Ser 89 VRDN
4.85%, 2/01/06 (b)
(cost $1,000,000) $ 1,000 $ 1,000,000
TOTAL INVESTMENTS-97.9%
(cost $56,169,233) 57,527,101
Other assets less liabilities-2.1% 1,261,403
NET ASSETS-100% $ 58,788,504
See footnote summary on page 21.
See Glossary of Terms on page 21.
See notes to financial statements.
7
FLORIDA PORTFOLIO
PORTFOLIO OF INVESTMENTS
MARCH 31, 1999 (UNAUDITED) ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS(A) (000) VALUE
- --------------------------------------------------------------------------
MUNICIPAL BONDS-98.1%
FLORIDA LONG TERM MUNICIPAL BONDS-93.9%
Aaa Brevard Cnty Hsg Fin Auth
SFMR GNMA Ser 94 AMT
6.70%, 9/01/27 (c) $ 4,140 $ 4,396,141
A Broward Cnty Hsg Fin Auth MFHR
(Bridgewater Place Apts) Ser 99
5.50%, 4/01/41 5,640 5,644,681
Aaa Clay Cnty Hsg Fin Auth
SFMR GNMA/FNMA Ser 99 AMT
5.30%, 10/01/29 (c) 4,710 4,725,543
NR Collier Cnty Cmnty Dev Dist
(Fiddlers Creek) Ser 96
7.50%, 5/01/18 7,100 7,637,825
NR Collier Cnty Cmnty Dev Dist
(Heritage Greens) Ser 96
8.25%, 5/01/18 5,080 5,300,929
BBB+ Collier Cnty Hlth Fac
(The Moorings) Ser 94
7.00%, 12/01/19 2,000 2,227,040
AAA Dade Cnty Arpt Rev
(Miami Int'l) MBIA Ser 95B AMT
6.00%, 10/01/24 9,730 10,619,808
NR Dade Cnty Hsg Fin Auth
(Golden Lakes Apts) Ser 97A AMT
6.00%, 11/01/32 250 258,287
NR Dade Cnty Hsg Fin Auth
(Golden Lakes Apts) Ser 97A AMT
6.05%, 11/01/39 750 778,432
Aaa Duval Cnty Hsg Fin Auth
SFMR Ser 99 AMT
5.30%, 4/01/29 (c) 6,000 5,999,940
AAA Escambia Cnty Hsg Fin Auth
SFMR GNMA Ser 95B AMT
6.25%, 4/01/28 11,500 12,043,720
Aaa Escambia Cnty Hsg Fin Auth
SFMR MBIA Ser 99 AMT
5.20%, 4/01/32 (c) 5,000 4,976,500
Baa1 Escambia Cnty PCR
(Champion Int'l Corp)
Ser 96 AMT
6.40%, 9/01/30 (c) 5,000 5,345,550
AAA Florida Hsg Fin Agy MFHR
(Brittany of Rosemont)
AMBAC Ser 95G AMT
6.25%, 7/01/35 1,350 1,444,473
AAA Florida Hsg Fin Agy MFHR
(Landings at Boot Ranch)
AMBAC Ser 95K AMT
6.10%, 11/01/35 2,050 2,172,857
AAA Florida Hsg Fin Agy MFHR
(Turtle Creek Apts)
AMBAC Ser 96C AMT
6.20%, 5/01/36 3,245 3,462,642
AAA Florida Hsg Fin Agy
SFMR GNMA/FNMA Ser 94B AMT
6.65%, 7/01/26 3,780 3,960,419
AAA Florida Hsg Fin Agy
SFMR GNMA/FNMA Ser 95A AMT
6.65%, 1/01/24 6,690 7,082,369
AAA Florida Hsg Fin Corp MFHR
(Crossing at Univ Apts)
AMBAC Ser 98Q-1 AMT
5.25%, 12/01/38 6,545 6,479,812
Aaa Florida Hsg Fin Corp MFHR
(Waterbridge Apts) MBIA
Ser 98R-1 AMT
5.20%, 2/01/32 (c) 1,540 1,525,509
AAA Hillsborough Cnty Aviation Auth
(Tampa Int'l Arpt)
FGIC Ser 96A AMT
6.00%, 10/01/23 1,500 1,648,050
AAA Jacksonville Wtr & Swr Rev
(United Wtr Proj) AMBAC
6.35%, 8/01/25 1,500 1,667,550
Aaa Manatee Cnty Hsg Fin Auth
SFMR GNMA Ser 99 AMT
6.25%, 11/01/28 (c) 3,015 3,315,475
8
FLORIDA PORTFOLIO
PORTFOLIO OF INVESTMENTS
(CONTINUED) ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS(A) (000) VALUE
- --------------------------------------------------------------------------
Aa3 North Miami Hlth Fac Auth
(Catholic Hlth Svcs Oblig Grp) Ser 96
6.00%, 8/15/24 (c) $ 1,200 $ 1,268,508
NR Northern Palm Beach Cnty
(Abacoa) Ser 96A
7.30%, 8/01/27 15,600 17,124,120
A3 Orange Cnty Hsg Fin Auth
MFHR (Loma Vista Proj)
Ser 99G AMT
5.50%, 3/01/32 (c) 6,000 5,999,700
AA- Orlando Util Cmnty
Wtr & Elec Rev
Ser 93B
7.620%, 10/06/17 (a) 4,550 4,990,304
A+ Palm Beach Cnty IDR
(Lourdes McKeen Residence)
Ser 96
6.625%, 12/01/26 4,000 4,260,720
Aaa Pinellas Cnty Hsg Fin Auth
SFMR GNMA/FNMA
Ser 94A AMT
6.55%, 8/01/27 (c) 4,090 4,305,257
NR St. Johns Cnty Cmty Dev Dist
(Julington Creek)
7.125%, 5/01/19 5,925 6,475,492
Baa2 Volusia Cnty Ed Fac Auth
(Embry-Riddle Aero Univ)
Ser 96A
6.125%, 10/15/26 (c) 7,060 7,551,023
AA Volusia Cnty Hlth Fac Auth
(John Knox Village)
Asset Gty Ser 96A
6.00%, 6/01/17 3,000 3,298,590
AAA Volusia Cnty Hsg Fin Auth
MFHR (Spring Arbor Apts)
FNMA/GNMA Ser 98A AMT
5.25%, 8/01/31 1,955 1,936,819
TOTAL FLORIDA LONG TERM MUNICIPAL BONDS
(cost $157,461,928) 159,924,085
SHORT TERM MUNICIPAL NOTES-4.2%
VMIG2 Jacksonville Hosp Rev
(University Med Ctr Inc)
Ser 88 VRDN
4.50%, 2/01/18 (b)(c) 6,900 6,900,000
VMIG1 Palm Beach Cnty IDR
(Convalescent Cents Proj) VRDN
4.50%, 11/01/11 (b)(c) 275 275,000
TOTAL SHORT TERM MUNICIPAL NOTES
(cost $7,175,000) 7,175,000
TOTAL INVESTMENTS-98.1%
(cost $164,636,928) 167,099,085
Other assets less liabilities-1.9% 3,195,420
NET ASSETS-100% $ 170,294,505
See footnote summary on page 21.
See Glossary of Terms on page 21.
See notes to financial statements.
9
MASSACHUSETTS PORTFOLIO
PORTFOLIO OF INVESTMENTS
MARCH 31, 1999 (UNAUDITED) ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS(A) (000) VALUE
- --------------------------------------------------------------------------
MUNICIPAL BONDS-99.3%
MASSACHUSETTS-92.3%
BBB- Massachusetts Dev Fin Agy
(Boston Biomedical)
Ser 99
5.75%, 2/01/29 $ 1,800 $ 1,789,668
BBB- Massachusetts Dev Fin Agy
(Eastern Nazarene)
Ser 99
5.625%, 4/01/29 2,000 1,981,380
BBB- Massachusetts Dev Fin Agy
(Regis College)
Ser 98
5.50%, 10/01/28 5,665 5,684,091
AA Massachusetts Dev Fin Agy
(Seven Hills) Asset Gty
Ser 99
5.15%, 9/01/28 6,035 5,971,572
BBB+ Massachusetts Dev Fin Agy
(YMCA Greater Boston)
Ser 98
5.45%, 11/01/28 1,000 998,500
AAA Massachusetts Ed Fin Auth
(Educational Loan)
AMBAC Ser 94E AMT
6.00%, 1/01/12 2,415 2,547,922
AAA Massachusetts Hlth & Ed Fac Auth
(Beth Israel)
AMBAC Ser G-4
8.827%, 7/01/25 (a) 2,000 2,303,820
BBB Massachusetts Hlth & Ed Fac Auth
(Caritas Christi)
Ser 99A
5.75%, 7/01/28 14,440 14,462,960
AAA Massachusetts Hlth & Ed Fac Auth
(New England Med Ctr)
MBIA Ser 94
6.83%, 7/01/18 (a) 3,975 4,167,986
AA+ Massachusetts Hlth & Ed Fac Auth
(Wellesley College)
Ser 99F
5.125%, 7/01/39 4,870 4,857,241
AAA Massachusetts Hsg Fin Agy
MFHR AMBAC Ser 95E AMT
6.00%, 7/01/37 2,680 2,784,895
AAA Massachusetts Hsg Fin Agy
SFMR FNMA Ser 92A
6.90%, 11/15/24 2,500 2,719,425
AAA Massachusetts Hsg Fin Agy
MFHR (Harbor Point)
AMBAC Ser 96A AMT
6.40%, 12/01/15 4,180 4,534,004
AAA Massachusetts Hsg Fin Agy
MFHR AMBAC Ser 93A
6.15%, 10/01/15 3,500 3,699,990
A+ Massachusetts Hsg Fin Agy
Mortgage Rev SFMR
Ser 40 AMT
6.65%, 12/01/27 7,000 7,507,430
A3 Massachusetts Ind Fin Agy
(Brooks School)
Ser 93
5.95%, 7/01/03 Pre-refunded (c) 2,250 2,475,856
AA+ Massachusetts Ind Fin Agy
(Groton School Proj)
Ser 98A
5.00%, 3/01/28 3,440 3,367,760
AAA Massachusetts Ind Fin Agy
(Heights Crossing) FHA
Ser 95 AMT
6.15%, 2/01/35 7,000 7,368,900
AAA Massachusetts Port Auth Spec Fac
(US Air) MBIA
Ser 96A AMT
5.875%, 9/01/23 4,585 4,854,551
AAA Massachusetts Tpk Auth
AMBAC Ser 99A
5.00%, 1/01/39 5,000 4,791,850
A3 New England Ed Loan Mktg
Ser 93H AMT
6.90%, 11/01/09 (c) 4,000 4,625,040
93,494,841
10
MASSACHUSETTS PORTFOLIO
PORTFOLIO OF INVESTMENTS
(CONTINUED) ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS(A) (000) VALUE
- --------------------------------------------------------------------------
PUERTO RICO-7.0 %
AAA Puerto Rico Hsg Fin Corp Rev
SFMR GNMA Ser 98A AMT
5.20%, 12/01/32 $ 4,950 $ 4,947,277
BBB- Puerto Rico Port Auth
(American Airlines)
Ser 96A AMT
6.25%, 6/01/26 2,035 2,185,814
7,133,091
TOTAL INVESTMENTS-99.3%
(cost $99,174,333) 100,627,932
Other assets less liabilities-0.7% 731,706
NET ASSETS-100% $101,359,638
See footnote summary on page 21.
See Glossary of Terms on page 21.
See notes to financial statements.
11
MICHIGAN PORTFOLIO
PORTFOLIO OF INVESTMENTS
MARCH 31, 1999 (UNAUDITED) ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS(A) (000) VALUE
- --------------------------------------------------------------------------
MUNICIPAL BONDS-98.3 %
MICHIGAN-93.3 %
AAA Detroit GO
FGIC Ser 93
6.35%, 4/01/03 Pre-refunded $ 590 $ 646,563
BB- Detroit Local Dev Fin Auth
Daimler/Chrysler (Jefferson
North Assembly Plant)
Ser 98A
5.50%, 5/01/21 1,645 1,616,064
AAA Detroit Sew Disp Rev
FGIC 93A
7.992%, 7/01/03 Pre-refunded (a) 2,200 2,597,100
AAA Detroit Sew Disp Rev
FGIC Ser 93A
7.992%, 7/01/23 (a) 1,140 1,258,104
AAA Grand Rapids Swr Sys
MBIA Ser 92
6.00%, 1/01/22 1,500 1,618,080
Aa2 Independence MFHR
(Greenery Health)
FHA Ser 97A
6.15%, 8/01/17 (c) 1,850 2,012,541
AAA Kalamazoo Hosp Fin Auth Hosp Rev
(Borgess Med Ctr)
FGIC Ser 94A
6.538%, 6/01/11 (a) 1,510 1,632,038
AAA Kent Cnty Arpt Fac
(Kent Cnty Int'l)
Ser 95 AMT
6.10%, 1/01/05 Pre-refunded 1,000 1,115,450
AA+ Michigan Hosp Fin Auth Hosp Rev
(Charity Oblig Group) Ser 99A
5.125%, 11/01/29 1,665 1,618,613
AAA Michigan Hosp Fin Auth Hosp Rev
(St Johns)
AMBAC Ser 92A
6.00%, 5/15/13 1,000 1,078,170
Aaa Michigan Hsg Dev Auth
MFHR (Arbor Pointe)
GNMA Ser 99
5.40%, 6/20/40 (c) 1,810 1,813,059
AA+ Michigan Hsg Dev Auth
SFMR Mortgage Rev
Ser 96B AMT
6.20%, 6/01/27 4,250 4,498,284
AAA Michigan Strategic Fund
PCR (Detroit Edison)
MBIA Ser 95AA
6.40%, 9/01/25 1,440 1,617,466
A Michigan Strategic Fund
PCR (General Motors)
Ser 95
6.20%, 9/01/20 1,495 1,616,544
NR Michigan Strategic Fund
PCR (Holland Home)
5.75%, 11/15/28 2,200 2,178,220
BBB+ Romulus Tax Increment
Fin Auth Ser 94
6.75%, 11/01/19 1,585 1,722,578
AA Troy Downtown Dev Auth
Asset Gty Ser 95A
6.375%, 11/01/18 1,475 1,625,229
30,264,103
PUERTO RICO-5.0 %
AAA Puerto Rico Hsg Fin Corp Rev
SFMR GNMA Ser 98A AMT
5.20%, 12/01/32 1,630 1,629,104
TOTAL INVESTMENTS-98.3%
(cost $30,946,212) 31,893,207
Other assets less liabilities-1.7% 548,584
NET ASSETS-100% $ 32,441,791
See footnote summary on page 21.
See Glossary of Terms on page 21.
See notes to financial statements.
12
MINNESOTA PORTFOLIO
PORTFOLIO OF INVESTMENTS
MARCH 31, 1999 (UNAUDITED) ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS(A) (000) VALUE
- --------------------------------------------------------------------------
MUNICIPAL BONDS-102.7%
MINNESOTA LONG TERM MUNICIPAL BONDS-98.1 %
A Bass Brook PCR
(Minn Power & Light)
Ser 92
6.00%, 7/01/22 $ 1,420 $ 1,489,069
AAA Duluth Arpt Lease St
Secured GO Ser 95C AMT
6.25%, 8/01/14 1,485 1,613,690
Aaa Eagan MFHR
(Woodbridge Apts)
GNMA Ser 97A
5.95%, 2/01/32 (c) 1,490 1,583,200
Aaa Little Canada MFHR
(Cedars Lakeside)
GNMA Ser 97A
5.95%, 2/01/32 (c) 1,490 1,583,200
Aaa Minneapolis & St. Paul Hsg &
Redev Auth
SFMR GNMA/FNMA Ser 96B
5.125%, 6/01/32 (c) 1,300 1,301,625
A- Minneapolis Common Bond
Fund Cmnty Dev Agy
Ser 95-2 AMT
6.625%, 12/01/15 1,245 1,343,019
A- Minneapolis Common Bond
Fund Cmnty Dev Agy
Ser 97-2 AMT
6.20%, 6/01/17 1,795 1,913,021
AAA Minneapolis COP Spec
School Dist No. 1
MBIA Ser 96A
5.90%, 2/01/17 1,480 1,595,011
NR Minneapolis Hlth Care Fac
(Walker Methodist)
Ser 98A
6.00%, 11/15/28 5,000 5,070,600
AAA Minneapolis MFHR
(Riverside Plaza) GNMA
Ser 98 AMT
5.20%, 12/20/30 1,590 1,589,873
NR Minnesota Agric & Econ Dev Brd
(Small Business Loan Prog)
Ser 96A AMT
6.75%, 8/01/16 1,450 1,585,633
NR Minnesota Agric & Econ Dev Brd
(Small Business Loan Prog)
Ser 96B AMT
7.00%, 8/01/16 750 789,682
Baa1 Minnesota Higher Ed Fac Auth
(Hamline Univ)
Ser 4-I
6.00%, 10/01/16 790 826,285
AA+ Minnesota Hsg Fin Agy
SFMR Ser 96G AMT
6.25%, 7/01/26 5,100 5,396,412
AA+ Rochester Hlth Care Fac
(Mayo Med Ctr)
Ser 92H
8.528%, 11/15/15 (a) 1,380 1,598,080
AAA St. Francis GO Ind
Sch dist No. 15
FSA Ser 95A
6.375%, 2/01/24 1,000 1,118,310
Aaa St. Paul FHLMC
(Wellington Proj)
Ser 99A
5.10%, 2/01/24 (c) 1,600 1,605,520
TOTAL MINNESOTA LONG TERM MUNICIPAL BONDS
(cost $30,854,579) 32,002,230
13
MINNESOTA PORTFOLIO
PORTFOLIO OF INVESTMENTS
(CONTINUED) ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS(A) (000) VALUE
- --------------------------------------------------------------------------
A-1+ SHORT TERM MUNICIPAL NOTE-4.6 %
Minneapolis Hosp Rev
(Catholic Charities Proj)
VDRN Ser 96
3.10%, 11/01/16 (b)
(cost $1,500,000) $ 1,500 $ 1,500,000
TOTAL INVESTMENTS-102.7%
(cost $32,354,579) 33,502,230
Other assets less liabilities-(2.7%) (869,789)
NET ASSETS-100% $ 32,632,441
See footnote summary on page 21.
See Glossary of Terms on page 21.
See notes to financial statements.
14
NEW JERSEY PORTFOLIO
PORTFOLIO OF INVESTMENTS
MARCH 31, 1999 (UNAUDITED) ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS(A) (000) VALUE
- --------------------------------------------------------------------------
NEW JERSEY MUNICIPAL BONDS-96.1 %
AAA Essex Cnty Imp Auth Util
Rev (Orange Twp)
MBIA Ser 93
6.00%, 12/01/17 $ 2,510 $ 2,749,329
BBB- New Jersey Eco Dev
(American Airlines) AMT
7.10%, 11/01/31 4,500 4,843,890
AAA New Jersey Eco Dev
(NJ American Wtr Co) FGIC
Ser 94 AMT
6.875%, 11/01/34 5,000 5,667,700
A+ New Jersey Eco Dev
(Anheuser-Busch)
Ser 95 AMT
5.85%, 12/01/30 5,060 5,358,742
AAA New Jersey Eco Dev
(Hackensack Wtr Co)
MBIA Ser 94B AMT
5.90%, 3/01/24 4,000 4,229,280
NR New Jersey Eco Dev
(Kapkowski Rd/Jersey Gardens)
Ser 98B AMT
6.50%, 4/01/31 19,985 20,715,252
BBB New Jersey Eco Dev
(NUI Corp)
Ser 94A AMT
5.25%, 11/01/33 17,860 17,606,924
AAA New Jersey Eco Dev
(Pub Ser Elec & Gas)
MBIA Ser 94A AMT
6.40%, 5/01/32 5,000 5,503,550
BBB New Jersey Hlth Care Fac
(Englewood Hosp)
Ser 94
6.75%, 7/01/24 4,230 4,636,333
BBB New Jersey Hlth Care Fac
(Franciscan Sisters, St. Mary's Hosp)
Ser 93
5.875%, 7/01/12 2,755 2,852,720
AAA New Jersey Hlth Care Fac
(Monmouth Med Ctr)
CGIC Ser C
6.25%, 7/01/24 2,750 3,100,927
AAA New Jersey Hsg & Mtg
MFHR AMBAC Ser 96A AMT
6.25%, 5/01/28 5,000 5,342,000
A+ New Jersey Hsg & Mtg
MFHR (Sect 8) Ser 1
6.70%, 11/01/28 930 997,286
AAA New Jersey Hsg & Mtg
SFMR MBIA Ser 95O AMT
6.35%, 10/01/27 5,000 5,304,400
AA- New Jersey Hwy Auth
Garden State Pkwy Rev
6.25%, 1/01/14 1,250 1,340,150
AAA Passaic Valley Sewer
AMBAC Ser 92D
5.75%, 12/01/15 3,400 3,615,866
AAA Port Auth of NY & NJ
(JFK Int'l Airport)
MBIA Ser 6 AMT
5.75%, 12/01/22 7,590 8,119,934
AA- Port Auth of NY & NJ
95th Ser94 AMT
6.125%, 7/15/29 5,250 5,651,887
AA- Salem Cnty NJ Waste
Disposal Auth (E.I. Dupont)
Ser 92A AMT
6.125%, 7/15/22 3,500 3,772,825
BBB South Jersey Transportation
Auth NJ Lease Rev
(Raytheon Aircraft Service)
Ser 97A AMT
6.15%, 1/01/22 500 537,070
AAA Vineland NJ Sewer Auth
(Landis) FGIC
Ser 93C
7.77%, 9/19/19 (a) 1,625 1,909,814
TOTAL INVESTMENTS-96.1%
(cost $107,893,806) 113,855,879
Other assets less liabilities-3.9% 4,682,161
NET ASSETS-100% $ 118,538,040
See footnote summary on page 21.
See Glossary of Terms on page 21.
See notes to financial statements.
15
OHIO PORTFOLIO
PORTFOLIO OF INVESTMENTS
MARCH 31, 1999 (UNAUDITED) ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS(A) (000) VALUE
- ---------------------------------------------------------------------------
MUNICIPAL BONDS-98.4%
OHIO-93.6%
BBB Akron (Canal Park)
Ser 96
Zero Coupon, 12/01/16 $ 5,000 $ 4,882,300
BBB- Butler Cnty Hosp Rev
(Fort Hamilton Hughes)
7.50%, 1/01/10 1,400 1,521,044
BB Cleveland Arpt
(Continental Airlines)
Ser 98 AMT
5.375%, 9/15/27 7,620 7,387,742
AAA Cleveland Arpt Sys
FGIC Ser 94A AMT
6.25%, 1/01/20 2,950 3,201,045
AAA Columbus Municipal Arpt Rev
(Columbus Int'l Arpt)
MBIA Ser 94A AMT
6.25%, 1/01/24 1,200 1,302,120
AAA Cuyahoga Cnty Hosp Rev
(Meridia Health Sys) Ser 95
6.25%, 8/15/24 2,320 2,649,254
AAA Cuyahoga Cnty MFHR
(Nat'l Terminal Apts)
FNMA Ser 96 AMT
6.40%, 7/01/16 5,180 5,618,539
BBB Dayton Spec Fac Rev
(Emery Air Freight)
Ser 96D AMT
6.20%, 10/01/09 3,880 4,249,725
A Franklin Cnty Rev
(OCLC Online Computer
Library Ctr) Ser 98A
5.20%, 10/01/20 4,885 4,900,632
BBB Hamilton Cnty Hlth Sys
(Franciscan Sisters/Providence Hosp)
Ser 92
6.875%, 7/01/15 2,500 2,776,075
Aaa Kent Ohio MFHR
(Silver Meadows Apt)
GNMA Ser 95 AMT
7.15%, 12/20/26 (c) 3,100 3,467,598
NR Mahoning Valley Sanitary
Dist Ser 94
7.75%, 5/15/14 1,500 1,669,020
Baa1 Ohio Air Quality Dev Auth
(Columbus Southern Pwr)
Ser 85B
6.25%, 12/01/20 (c) 3,895 4,115,496
AAA Ohio Air Quality Dev Auth
(JMG Funding/Ohio Pwr)
AMBAC Ser 94B AMT
6.375%, 4/01/29 3,185 3,484,836
BB+ Ohio Air Quality Dev Auth
(Toledo Edison Co)
Ser 97A AMT
6.10%, 8/01/27 5,000 5,095,300
AAA Ohio Capital Corp MFHR (Sect 8)
FHA MBIA Ser 95E
6.35%, 1/01/22 1,965 2,103,336
Aa2 Ohio Hsg Fin Agy MFHR
(Bridgeview Villa II)
FHA AMT
6.45%, 12/01/33 (c) 1,965 2,077,280
AAA Ohio Hsg Fin Agy
SFMR GNMA Ser 94 B2 AMT
6.70%, 3/01/25 5,590 5,939,319
AAA Ohio Hsg Fin Agy
SFMR GNMA Ser 97 A1 AMT
6.15%, 3/01/29 8,785 9,325,893
BB+ Ohio St Wtr Dev Auth
(Cleveland Electric)
Ser 97A AMT
6.10%, 8/01/20 2,000 2,038,120
A Ohio St Wtr Dev Auth
(North Star/BHP) AMT
6.45%, 9/01/20 2,560 2,776,371
Aa3 Toledo-Lucas Cnty Port Fac (Cargill Inc)
5.90%, 12/01/15 (c) 1,150 1,245,370
81,826,415
16
OHIO PORTFOLIO
PORTFOLIO OF INVESTMENTS
(CONTINUED) ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS(A) (000) VALUE
- ---------------------------------------------------------------------------
PUERTO RICO-4.8%
AAA Puerto Rico Hsg Fin Corp Rev SFMR
GNMA Ser 98A AMT
5.20%, 12/01/32 $ 2,000 $ 1,998,900
BBB- Puerto Rico Port Auth
(American Airlines)
Ser 96A AMT
6.25% 6/01/26 2,075 2,228,778
4,227,678
TOTAL INVESTMENTS-98.4%
(cost $82,595,296) 86,054,093
Other assets less liabilities-1.6% 1,348,707
NET ASSETS-100% $ 87,402,800
See footnote summary on page 21.
See Glossary of Terms on page 21.
See notes to financial statements.
17
PENNSYLVANIA PORTFOLIO
PORTFOLIO OF INVESTMENTS
MARCH 31, 1999 (UNAUDITED) ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS(A) (000) VALUE
- ---------------------------------------------------------------------------
MUNICIPAL BONDS-98.3%
PENNSYLVANIA-90.1 %
AAA Allegheny Cnty Arpt Rev
(Pittsburgh Int'l) FSA
Ser 92B AMT
6.625%,1/01/22 $ 3,315 $ 3,568,001
BBB- Allegheny Cnty
IDR (USX) Ser 96
6.10%, 1/15/18 4,000 4,216,320
BBB- Allegheny Cnty
IDR (USX) Ser 98
5.50%, 12/01/29 14,000 13,920,760
Aaa Allegheny Cnty MFHR
(Green Meadow Apts)
FHA/GNMA
Ser 98 A1 AMT
5.125%, 10/20/40 (c) 5,845 5,785,264
BBB+ Bradford Cnty IDR
Solid Waste Disp Rev
(Int'l Paper)
Ser 95A AMT
6.60%, 3/01/19 2,500 2,738,150
BBB+ Cumberland Cnty Municipal Auth Rev
(Presbyterian Homes Inc)
Ser 96
6.00%, 12/01/26 3,000 3,092,400
BBB- Delaware Cnty Higher Ed Fac
(Eastern College)
Ser 99C
5.625%, 10/01/28 3,300 3,274,128
AAA Montgomery Cnty Hlth Fac
(Holy Redeemer Hlth Sys)
AMBAC Ser 97A
5.25%, 10/01/23 6,000 6,086,940
A- New Morgan IDR
Solid Waste Disp Rev
(Browning-Ferris)
Ser 94 AMT
6.50%, 4/01/19 4,000 4,313,360
AAA North East GO
School Dist FGIC Ser 98
5.20%, 9/01/23 2,300 2,306,670
AA Northampton Cnty Higher Ed
(Moravian College)
Asset Gty Ser 99
5.125%, 7/01/29 1,000 975,160
AAA Pennsylvania Convention Ctr Auth
MBIA Ser 94A
6.75%, 9/01/19 2,500 2,829,500
BBB Pennsylvania Econ Dev
(Sun Co Inc)
Ser 94A AMT
7.60%, 12/01/24 5,000 5,705,800
AAA Pennsylvania Higher Ed
Student Loan AMBAC
Ser 88D AMT
6.05%, 1/01/19 9,400 10,479,447
AAA Pennsylvania Higher Ed
(University of Pittsburgh Med Ctr)
FSA Ser 99A
5.00%, 8/01/29 500 483,310
AA+ Pennsylvania Hsg Fin Agy SFMR
Ser 92 35D AMT
8.577%, 4/01/25(a) 9,500 10,387,870
AA+ Pennsylvania Hsg Fin Agy SFMR
Ser 94 41B AMT
6.65%, 4/01/25 5,000 5,326,500
AA+ Pennsylvania Hsg Fin Agy SFMR
Ser 96 48 AMT
5.375%, 10/01/16 4,165 4,256,922
AAA Pennsylvania Turnpike
AMBAC Ser 94A
6.00%, 12/01/19 3,000 3,368,160
AAA Philadelphia Arpt Rev
AMBAC Ser 95A AMT
6.10%, 6/15/25 4,800 5,183,184
AAA Philadelphia GO
FSA Ser 98
5.00%, 3/15/28 2,400 2,342,544
BBB+ Philadelphia Hosp Rev
(Temple Univ) Ser 93A
6.625%, 11/15/23 3,250 3,461,120
AAA Pittsburgh Urban Redev Auth
SFMR FHA/GNMA/FNMA
Ser 97A AMT
6.25%, 10/01/28 920 968,852
AAA Pittsburgh Urban Redev Auth
SFMR Ser 95A AMT
7.15%, 10/01/27 520 556,187
18
PENNSYLVANIA PORTFOLIO
PORTFOLIO OF INVESTMENTS
(CONTINUED) ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS(A) (000) VALUE
- ---------------------------------------------------------------------------
AA Potter Cnty Hosp Auth
(Charles Cole Memorial)
Asset Gty Ser 96
6.05%, 8/01/24 $ 4,340 $ 4,662,418
AA+ Schuylkill Cnty IDR
(Charity Oblig Group)
Ser 99
5.00%, 11/01/28 1,675 1,612,405
BBB Warren Cnty Hosp Auth
(Warren General)
Ser 94A
7.00%, 4/01/19 2,200 2,414,170
114,315,542
PUERTO RICO-8.2%
AAA Puerto Rico Hsg Fin Corp Rev
SFMR GNMA Ser 98A AMT
5.20%, 12/01/32 8,950 8,945,078
BBB- Puerto Rico Port Auth
(American Airlines)
Ser 96A AMT
6.25%, 6/01/26 1,365 1,466,160
10,411,238
TOTAL INVESTMENTS-98.3%
(cost $120,560,599) 124,726,780
Other assets less liabilities-1.7% 2,095,354
NET ASSETS-100% $ 126,822,134
See footnote summary on page 21.
See Glossary of Terms on page 21.
See notes to financial statements.
19
VIRGINIA PORTFOLIO
PORTFOLIO OF INVESTMENTS
MARCH 31, 1999 (UNAUDITED) ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS(A) (000) VALUE
- ---------------------------------------------------------------------------
VIRGINIA MUNICIPAL BONDS-95.8%
A Alexandria MFHR
(Buckingham Village Apts)
Ser 96A AMT
6.15%, 1/01/29 $ 4,000 $ 4,178,040
A+ Giles Cnty IDR
(Hoechst Celanese Corp)
Ser 96 AMT
6.45%, 5/01/26 2,480 2,700,447
Baa2 Goochland Cnty IDR
(Nekoosa Pkg/GA Pacific)
Ser 98 AMT
5.65%, 12/01/25 (c) 9,000 9,037,350
AAA Harrisonburg MFHR
(Battery Heights Assoc)
GNMA Ser 96A
6.25%, 4/20/36 2,515 2,705,335
AAA Harrisonburg MFHR
(Greens of Salem Run) FSA
Ser 97 AMT
6.30%, 4/01/29 2,505 2,709,408
AA Henrico Cnty IDR
(Henrico Cnty Regl Jail)
Ser 94
7.125%, 8/01/21 2,000 2,300,480
A+ Henry Cnty Hosp Rev
(Memorial Hosp Martinsville & Henry)
6.00%, 1/01/27 1,250 1,323,775
A- Isle of Wight Cnty Solid Waste Rev
(Union Camp Corp)
Ser 94 AMT
6.55%, 4/01/24 2,475 2,702,948
A+ James City Cnty Solid Waste Rev
(Anheuser Busch)
Ser 97 AMT
6.00%, 4/01/32 2,605 2,753,068
AAA Loudoun Cnty IDR Hosp Rev
(Loudoun Hosp Ctr)
Ser 95 FSA
5.80%, 6/01/20 2,500 2,688,425
AAA Newport News MFHR
(Mennowood Cmntys)
GNMA Ser 96A
6.25%, 8/01/36 2,620 2,779,270
Aaa Prince William Cnty Hosp Rev
(Potomac Hosp Group)
Ser 95
6.75%, 10/01/15 (c) 2,250 2,630,992
AAA Richmond Metro Auth Expwy Rev
Ser 92B FGIC
6.25%, 7/15/22 1,000 1,075,980
NR Staunton Ed Fac
(Mary Baldwin College)
Ser 96
6.75%, 11/01/21 3,145 3,406,916
AAA Suffolk MFHR
(Prince William Commons)
FNMA Ser 96A AMT
6.50%, 6/01/29 2,550 2,757,621
AA Virginia Beach Hlth Care
(Sentara Bayside Hosp)
6.30%, 11/01/21 1,000 1,085,200
AA+ Virginia Hsg Dev Auth SFMR
(Commonwealth Mtg)
Ser 96B AMT
6.375%, 1/01/26 5,000 5,219,850
AA Virginia Res Auth Sewer Sys Rev
(Hopewell Regl Wastewater Fac)
Ser 95A AMT
6.00%, 10/01/25 1,375 1,436,270
TOTAL INVESTMENTS-95.8%
(cost $53,150,228) 53,491,375
Other assets less liabilities-4.2% 2,327,288
NET ASSETS-100% $ 55,818,663
See footnote summary on page 21.
See Glossary of Terms on page 21.
See notes to financial statements.
20
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
(a) Inverse floater security--security with variable or floating interest rate
that moves in opposite direction of short-term interest rates.
(b) Variable Rate Demand Notes (VRDN) are instruments whose interest rates
change on a specific date (such as coupon date or interest payment date) or
whose interest rates vary with changes in a designated base rate (such as prime
interest rate). This instrument is payable on demand and is secured by letters
of credit or other credit support agreements from major banks.
(c) Moody's Rating.
See notes to financial statements.
Glossary of Terms:
AMBAC American Municipal Bond Assurance Corporation
AMT Alternative Minimum Tax
CGIC Capital Guaranty Insurance Company
COP Certificate of Participation
FGIC Financial Guaranty Insurance Company
FHA Federal Housing Administration
FHLMC Federal Home Loan Mortgage Corporation
FNMA Federal National Mortgage Association
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
NR Rating not applied for
PCR Pollution Control Revenue
SFMR Single Family Mortgage Revenue
VRDN Variable Rate Demand Note
21
STATEMENTS OF ASSETS AND LIABILITIES
MARCH 31, 1999 (UNAUDITED) ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
<TABLE>
<CAPTION>
ARIZONA FLORIDA MASSACHUSSETTS
------------ ------------ ------------
<S> <C> <C> <C>
ASSETS
Investment in securities, at value (cost: $56,169,233,
$164,636,928, $99,174,333, $30,946,212,
$32,354,579, $107,893,806, $82,595,296,
$120,560,599 and $53,150,228, respectively) $57,527,101 $167,099,085 $100,627,932
Cash 23,093 1,453,261 -0-
Interest receivable 939,729 2,783,610 1,442,830
Receivable for shares of beneficial interest sold 772,217 573,341 314,142
Receivable due from Adviser -0- -0- -0-
Receivable for investment securities sold -0- 4,615,835 -0-
Prepaid organization 1,480 -0- -0-
Total assets 59,263,620 176,525,132 102,384,904
LIABILITIES
Due to custodian -0- -0- 119,405
Payable for investment securities purchased 200,757 5,665,850 595,500
Payable for shares of beneficial interest redeemed 129,186 136,147 62,055
Dividends payable 80,357 231,986 142,387
Distribution fee payable 29,146 101,046 59,565
Advisory fee payable 6,980 39,220 21,898
Accrued expenses and other liabilities 28,690 56,378 24,456
Total liabilities 475,116 6,230,627 1,025,266
NET ASSETS $58,788,504 $170,294,505 $101,359,638
COMPOSITION OF NET ASSETS
Shares of beneficial interest, at par $53,856 $164,528 $89,664
Additional paid-in capital 57,433,335 171,694,326 99,788,585
Distributions in excess of net investment income (140,936) (490,469) (352,567)
Accumulated net realized gain (loss) on
investment transactions 84,381 (3,536,037) 380,357
Net unrealized appreciation of investments 1,357,868 2,462,157 1,453,599
$58,788,504 $170,294,505 $101,359,638
CLASS A SHARES
Net assets $31,935,981 $68,877,524 $41,831,020
Shares of beneficial interest outstanding 2,924,838 6,654,217 3,698,203
CLASS B SHARES
Net assets $20,407,041 $60,851,792 $34,110,248
Shares of beneficial interest outstanding 1,870,048 5,879,456 3,018,670
CLASS C SHARES
Net assets $ 6,445,482 $40,565,189 $25,418,370
Shares of beneficial interest outstanding 590,731 3,919,173 2,249,477
CALCULATION OF MAXIMUM OFFERING PRICE
CLASS A SHARES
Net asset value and redemption price per share $10.92 $10.35 $11.31
Sales charge--4.25% of public offering price 0.48 0.46 0.50
Maximum offering price $11.40 $10.81 $11.81
CLASS B SHARES
Net asset value and offering price per share $10.91 $10.35 $11.30
CLASS C SHARES
Net asset value and offering price per share $10.91 $10.35 $11.30
</TABLE>
22
See notes to financial statements.
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
<TABLE>
<CAPTION>
MICHIGAN MINNESOTA NEW JERSEY OHIO PENNSYLVANIA VIRGINIA
------------ ------------ ------------ ------------ ------------ ------------
<C> <C> <C> <C> <C> <C>
$31,893,207 $33,502,230 $113,855,879 $86,054,093 $124,726,780 $53,491,375
-0- -0- -0- 868,113 14,472 139,241
445,058 474,509 2,365,079 1,080,267 2,445,781 1,102,550
163,904 266,931 2,955,914 278,523 465,487 1,237,433
-0- 1,849 -0- -0- -0- 6,243
1,151,250 -0- -0- -0- 265,000 -0-
-0- -0- -0- -0- -0- 858
33,653,419 34,245,519 119,176,872 88,280,996 127,917,520 55,977,700
983,842 9,041 71,572 -0- -0- -0-
-0- 1,500,000 -0- 406,933 699,125 -0-
116,018 -0- 211,544 219,047 18,945 20,130
40,963 42,794 150,353 118,840 172,918 74,031
21,503 22,146 82,080 62,307 74,928 34,838
4,777 -0- 29,194 13,589 54,857 -0-
44,525 39,097 94,089 57,480 74,613 30,038
1,211,628 1,613,078 638,832 878,196 1,095,386 159,037
$32,441,791 $32,632,441 $118,538,040 $87,402,800 $126,822,134 $55,818,663
$30,842 $32,037 $113,327 $84,192 $120,113 $51,479
31,411,402 32,550,224 116,007,363 86,728,127 123,050,009 55,571,352
(91,870) (72,063) (244,722) (206,718) (367,966) (178,229)
144,422 (1,025,408) (3,300,001) (2,661,598) (146,203) 32,914
946,995 1,147,651 5,962,073 3,458,797 4,166,181 341,147
$32,441,791 $32,632,441 $118,538,040 $87,402,800 $126,822,134 $55,818,663
$10,195,782 $8,819,147 $25,797,116 $18,322,353 $51,810,136 $17,101,088
968,634 865,747 2,465,757 1,765,172 4,906,262 1,576,062
$11,579,837 $15,117,463 $61,406,064 $46,447,801 $50,980,382 $29,841,281
1,101,255 1,484,238 5,871,240 4,474,329 4,828,930 2,752,825
$10,666,172 $8,695,831 $31,334,860 $22,632,646 $24,031,616 $8,876,294
1,014,339 853,679 2,995,709 2,179,729 2,276,121 819,049
$10.53 $10.19 $10.46 $10.38 $10.56 $10.85
0.47 0.45 0.46 0.46 0.47 0.48
$11.00 $10.64 $10.92 $10.84 $11.03 $11.33
$10.52 $10.19 $10.46 $10.38 $10.56 $10.84
$10.52 $10.19 $10.46 $10.38 $10.56 $10.84
</TABLE>
23
STATEMENTS OF OPERATIONS
SIX MONTHS ENDED MARCH 31, 1999 (UNAUDITED)
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
<TABLE>
<CAPTION>
ARIZONA FLORIDA MASSACHUSSETTS
------------ ------------ --------------
<S> <C> <C> <C>
INVESTMENT INCOME
Interest $1,254,240 $3,931,402 $2,158,023
EXPENSES
Advisory fee 144,046 446,759 255,887
Distribution fee - Class A 37,421 85,006 50,018
Distribution fee - Class B 79,097 250,772 134,482
Distribution fee - Class C 26,639 180,688 107,190
Administrative 46,000 46,000 46,000
Custodian 41,181 45,499 41,924
Transfer agency 13,290 28,455 15,106
Audit & legal 10,215 17,403 7,462
Registration 9,086 9,306 6,552
Amortization of organization expenses 4,448 -0- 3,491
Trustees' fees 1,574 1,574 1,574
Printing 1,238 4,165 1,820
Miscellaneous 832 1,631 1,019
Total expenses 415,067 1,117,258 672,525
Less: expenses waived and reimbursed by Adviser
(see Note B) (161,283) (293,422) (207,860)
Net expenses 253,784 823,836 464,665
Net investment income 1,000,456 3,107,566 1,693,358
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Net realized gain on investment transactions 84,062 398,455 379,319
Net change in unrealized appreciation of investments (276,383) (1,787,541) (402,851)
Net gain (loss) on investments (192,321) (1,389,086) (23,532)
NET INCREASE IN NET ASSETS FROM
OPERATIONS $ 808,135 $1,718,480 $1,669,826
</TABLE>
See notes to financial statements.
24
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
<TABLE>
<CAPTION>
MICHIGAN MINNESOTA NEW JERSEY OHIO PENNSYLVANIA VIRGINIA
------------ ------------ ------------ ------------ ------------ ------------
<C> <C> <C> <C> <C> <C>
$793,994 $807,581 $2,924,978 $2,165,125 $2,907,261 $1,082,407
92,883 91,789 327,853 240,332 328,051 129,072
13,959 10,660 34,566 22,922 60,090 19,869
52,672 72,162 267,472 211,452 223,134 110,098
49,158 39,167 141,871 96,672 101,448 30,198
46,000 46,000 46,000 46,000 46,000 46,000
45,537 41,612 48,092 46,534 47,370 42,538
13,219 12,187 39,210 26,588 32,347 14,053
8,323 8,373 23,274 21,952 15,575 14,976
3,719 1,305 4,276 5,396 3,696 3,862
2,272 -0- -0- -0- -0- 2,856
1,574 1,574 1,574 1,574 1,574 1,574
3,048 2,658 7,378 4,448 9,100 1,392
715 949 1,436 590 1,092 1,393
333,079 328,436 943,002 724,460 869,477 417,881
(118,954) (139,638) (223,644) (218,260) (141,401) (181,315)
214,125 188,798 719,358 506,200 728,076 236,566
579,869 618,783 2,205,620 1,658,925 2,179,185 845,841
144,064 118,335 322,572 198,406 179,963 31,742
(150,843) (184,829) (214,180) (552,255) (906,747) (377,724)
(6,779) (66,494) 108,392 (353,849) (726,784) (345,982)
$573,090 $552,289 $2,314,012 $1,305,076 $1,452,401 $ 499,859
</TABLE>
25
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, 1999 SEPT. 30, MARCH 31, 1999 SEPT. 30, MARCH 31, 1999 SEPT. 30,
(UNAUDITED) 1998 (UNAUDITED) 1998 (UNAUDITED) 1998
------------ ------------ ------------ ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE IN NET ASSETS
FROM OPERATIONS
Net investment income $1,000,456 $1,390,473 $3,107,566 $3,993,694 $1,693,358 $1,762,833
Net realized gain
on investment
transactions 84,062 221,494 398,455 1,226,752 379,319 348,332
Net change in
unrealized
appreciation
of investments (276,383) 1,146,364 (1,787,541) 1,754,979 (402,851) 1,218,465
Net increase in
net assets from
operations 808,135 2,758,331 1,718,480 6,975,425 1,669,826 3,329,630
DIVIDENDS AND DISTRIBUTIONS
TO SHAREHOLDERS FROM:
Net investment income
Class A (625,979) (858,694) (1,485,106) (1,365,535) (860,129) (738,055)
Class B (345,725) (414,304) (1,141,130) (1,379,472) (612,097) (522,866)
Class C (116,677) (117,475) (823,361) (1,248,687) (492,342) (501,912)
Distributions in
excess of net
investment income
Class A -0- (43,709) -0- (35,676) -0- (61,754)
Class B -0- (28,034) -0- (43,750) -0- (60,479)
Class C -0- (8,101) -0- (37,351) -0- (57,462)
Net realized gain
on investments
Class A (79,250) (212,751) -0- -0- (80,419) (181,523)
Class B (55,031) (121,124) -0- -0- (63,701) (139,090)
Class C (18,802) (29,194) -0- -0- (54,163) (137,598)
TRANSACTIONS IN SHARES OF
BENEFICIAL INTEREST
Net increase 19,631,202 21,134,959 55,322,562 45,780,029 40,376,422 36,041,467
Total increase 19,197,873 22,059,904 53,591,445 48,644,983 39,883,397 36,970,358
NET ASSETS
Beginning of year 39,590,631 17,530,727 116,703,060 68,058,077 61,476,241 24,505,883
End of period $58,788,504 $39,590,631 $170,294,505 $116,703,060 $101,359,638 $61,476,241
</TABLE>
See notes to financial statements.
26
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, 1999 SEPT. 30, MARCH 31, 1999 SEPT. 30, MARCH 31, 1999 SEPTEMBER 30,
(UNAUDITED) 1998 (UNAUDITED) 1998 (UNAUDITED) 1998
------------ ------------ ------------ ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE IN NET ASSETS
FROM OPERATIONS
Net investment income $ 579,869 $ 888,888 $ 618,783 $ 1,040,289 $ 2,205,620 $ 3,654,968
Net realized gain
on investment
transactions 144,064 285,847 118,335 274,145 322,572 529,540
Net change in
unrealized
appreciation
of investments (150,843) 572,490 (184,829) 358,291 (214,180) 2,076,332
Net increase in
net assets from
operations 573,090 1,747,225 552,289 1,672,725 2,314,012 6,260,840
DIVIDENDS AND DISTRIBUTIONS
TO SHAREHOLDERS FROM:
Net investment income
Class A (220,830) (321,710) (178,058) (260,414) (569,562) (910,827)
Class B (215,364) (284,561) (309,970) (469,051) (1,148,187) (1,773,742)
Class C (202,191) (282,617) (168,434) (310,824) (614,021) (970,399)
Distributions in
excess of net
investment income
Class A -0- (28,794) -0- (12,557) -0- (16,544)
Class B -0- (33,663) -0- (27,032) -0- (40,961)
Class C -0- (33,194) -0- (16,330) -0- (20,260)
Net realized gain
on investments
Class A (58,573) (151,780) -0- -0- -0- -0-
Class B (65,313) (160,394) -0- -0- -0- -0-
Class C (63,713) (150,076) -0- -0- -0- -0-
TRANSACTIONS IN SHARES OF
BENEFICIAL INTEREST
Net increase 5,660,417 10,508,825 4,892,755 7,272,544 22,177,781 17,828,850
Total increase 5,407,523 10,809,261 4,788,582 7,849,061 22,160,023 20,356,957
NET ASSETS
Beginning of year 27,034,268 16,225,007 27,843,859 19,994,798 96,378,017 76,021,060
End of period $32,441,791 $27,034,268 $32,632,441 $27,843,859 $118,538,040 $96,378,017
</TABLE>
See notes to financial statements.
27
STATEMENTS OF CHANGES IN NET ASSETS
(CONTINUED) 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, 1999 SEPT. 30, MARCH 31, 1999 SEPT. 30, MARCH 31, 1999 SEPT. 30,
(UNAUDITED) 1998 (UNAUDITED) 1998 (UNAUDITED) 1998
------------ ------------ ------------ ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE IN NET ASSETS
FROM OPERATIONS
Net investment income $1,658,925 $2,569,409 $2,179,185 $3,692,305 $845,841 $740,489
Net realized gain
on investment
transactions 198,406 227,096 179,963 1,548,033 31,742 132,862
Net change in
unrealized
appreciation
of investments (552,255) 1,407,156 (906,747) 1,104,276 (377,724) 498,764
Net increase in
net assets from
operations 1,305,076 4,203,661 1,452,401 6,344,614 499,859 1,372,115
DIVIDENDS AND DISTRIBUTIONS
TO SHAREHOLDERS FROM:
Net investment income
Class A (399,698) (537,858) (1,012,361) (1,490,341) (344,202) (294,619)
Class B (948,023) (1,369,998) (975,064) (1,487,630) (502,196) (354,381)
Class C (432,670) (661,553) (442,956) (714,334) (137,413) (91,489)
Distributions in
excess of net
investment income
Class A -0- (12,445) -0- (34,321) -0- (20,332)
Class B -0- (41,754) -0- (46,978) -0- (34,779)
Class C -0- (18,701) -0- (21,194) -0- (9,563)
Net realized gain
on investments
Class A -0- -0- -0- -0- (31,533) (109,207)
Class B -0- -0- -0- -0- (51,651) (157,407)
Class C -0- -0- -0- -0- (14,082) (39,965)
TRANSACTIONS IN SHARES OF
BENEFICIAL INTEREST
Net increase 19,683,618 17,338,126 35,171,436 19,566,732 25,515,221 20,866,666
Total increase 19,208,303 18,899,478 34,193,456 22,116,548 24,934,003 21,127,039
NET ASSETS
Beginning of year 68,194,497 49,295,019 92,628,678 70,512,130 30,884,660 9,757,621
End of period $87,402,800 $68,194,497 $126,822,134 $92,628,678 $55,818,663 $30,884,660
</TABLE>
See notes to financial statements.
28
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1999 (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% for purchases not exceeding $1,000,000. With
respect to purchases of $1,000,000 or more, Class A shares redeemed within one
year of purchase may be subject to a contingent deferred sales charge of 1%.
Class B shares are currently sold with a contingent deferred sales charge which
declines from 3% to zero depending on the period of time the shares are held.
Class B shares will automatically convert to Class A shares six years after the
end of the calendar month of purchase. Class C shares are subject to a
contingent deferred sales charge of 1% on redemptions made within the first
year after purchase. All three classes of shares have identical voting,
dividend, liquidation and other rights 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 financial statements
have been prepared in conformity with generally accepted accounting principles
which require management to make certain estimates and assumptions that affect
the reported amounts of assets and liabilities in the financial statements and
amounts of income and expenses during the reporting period. Actual results
could differ from those estimates. The following is a summary of the
significant accounting policies followed by the Fund.
1. SECURITY VALUATION
Portfolio securities traded on a national securities exchange are valued at the
last sale price on such exchange on the day of valuation or, if there was no
sale on such day, the last bid price quoted on such day. If no bid prices are
quoted, then the security is valued at the mean of the bid and asked prices as
obtained on that day from one or more dealers regularly making a market in that
security. Securities traded on the over-the-counter market are valued at the
mean of the closing bid and asked price provided by two or more dealers
regularly making a market in such securities. U.S. government securities and
other debt securities which mature in 60 days or less are valued at amortized
cost unless this method does not represent fair value. Securities for which
market quotations are not readily available are valued at fair value as
determined in good faith by, or in accordance with procedures approved by, the
Board of Trustees. Fixed income securities may be valued on the basis of prices
provided by a pricing service when such prices are believed to reflect the fair
market value of such securities.
2. ORGANIZATION EXPENSES
Organization expenses of approximately $41,750 for the Arizona, $31,450 for the
Massachusetts, $25,550 for the Michigan and $27,200 for the Virginia Portfolios
have been deferred and are being amortized on a straight-line basis through
June, March, February and April, 1999, respectively.
3. TAXES
It is the policy of each Portfolio to meet the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute all
of its investment company taxable income and net realized gains, if any, to its
shareholders. Therefore, no provisions for federal income or excise taxes are
required.
4. INVESTMENT INCOME AND INVESTMENT TRANSACTIONS
Interest income is accrued daily. Investment transactions are accounted for on
the date securities are purchased or sold. Investment gains and losses are
determined on the identified cost basis. The Portfolios amortize premium and
accrete 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. INCOME AND EXPENSES
All income earned and expenses incurred by the Portfolios are borne on a
pro-rata basis by each settled class
29
NOTES TO FINANCIAL STATEMENTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
of shares, based on the proportionate interest in the Portfolios represented by
the net assets of such class, except that the Portfolio's Class B and Class C
shares bear higher distribution and transfer agent fees than Class A shares.
6. DIVIDENDS AND DISTRIBUTIONS
Dividends and distributions to shareholders are recorded on the ex-dividend
date.
Income and capital gains distribution are determined in accordance with federal
tax regulations and may differ from those determined in accordance with
generally accepted accounting principles. To the extent these differences are
permanent, such amounts are reclassified with the capital accounts based on
their federal tax basis treatment; temporary differences, do not require such
reclassification.
NOTE B: ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Under the terms of an investment advisory agreement, the Fund pays Alliance
Capital Management L.P. (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. For the six months ended March 31, 1999, the Adviser
agreed to waive all or a portion of its advisory fees. The aggregate amounts of
such fee waivers were: Arizona Portfolio, $115,283; Florida Portfolio,
$270,422; Massachusetts Portfolio, $184,860; Michigan Portfolio, $72,954;
Minnesota Portfolio, $91,789; New Jersey Portfolio, $200,644; Ohio Portfolio,
$195,260; Pennsylvania Portfolio, $118,401; and Virginia Portfolio, $129,072.
Pursuant to the advisory agreement, the Adviser provides to each Portfolio
certain legal and accounting services. For the six months ended March 31, 1999,
the Adviser agreed to waive all or a portion of its fees for such services.
The aggregate amounts of such fee waivers were $46,000 for the Arizona,
Michigan, Minnesota and Virginia Portfolios and $23,000 for the Florida,
Massachusetts, New Jersey, Ohio and Pennsylvania Portfolios. In addition, the
Adviser agreed to reimburse each Portfolio for certain operating expenses. Such
expenses amounted to: Minnesota Portfolio, $1,849; and Virginia Portfolio,
$6,243. There was no such reimbursement for the Arizona Portfolio, the Florida
Portfolio, the Massachusetts Portfolio, the Michigan Portfolio, the New Jersey
Portfolio, the Ohio Portfolio and the Pennsylvania Portfolio.
Each Portfolio compensates Alliance Fund Services, Inc. (a wholly-owned
subsidiary of the Adviser) under a Transfer Agency Agreement for providing
personnel and facilities to perform transfer agency services for each
Portfolio. Such compensation amounted to: Arizona Portfolio, $9,000; Florida
Portfolio, $22,362; Massachusetts Portfolio, $14,024; Michigan Portfolio,
$9,487; Minnesota Portfolio, $10,017; New Jersey Portfolio, $26,458; Ohio
Portfolio, $18,490; Pennsylvania Portfolio, $24,602; and Virginia Portfolio,
$10,724.
Alliance Fund Distributors, Inc. (a wholly owned subsidiary of the Adviser)
serves as the distributor of the Fund's shares.
For the six months ended March 31, 1999, the amount of front-end sales charges
received by the Distributor from sales of Class A shares and the amount of
contingent deferred sales charges imposed upon redemptions by shareholders of
Class A, Class B and Class C shares were as follows:
FRONT END CONTINGENT DEFERRED
SALES CHARGES SALES CHARGES
----------- ------------------------------------
PORTFOLIO CLASS A CLASS A CLASS B CLASS C
- -------------- ----------- --------- --------- ---------
Arizona $ -0- $ -0- $ 7,831 $ 360
Florida 26,096 984 8,767 9,228
Massachusetts 10,551 -0- 8,357 11,646
Michigan 4,460 -0- 9,493 2,150
Minnesota 3,958 -0- 5,020 1,129
New Jersey 9,521 19,250 30,489 828
Ohio 7,757 4,016 14,100 3,460
30
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
FRONT END CONTINGENT DEFERRED
SALES CHARGES SALES CHARGES
----------- ------------------------------------
PORTFOLIO CLASS A CLASS A CLASS B CLASS C
- -------------- ----------- --------- --------- ---------
Pennsylvania $ 3,577 $ 689 $10,573 $ 91
Virginia 14,610 683 8,503 3,945
NOTE C: DISTRIBUTION SERVICES AGREEMENT
Each Portfolio has adopted a Distribution Services Agreement (the "Agreement")
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the
Agreement, each Portfolio pays 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 Class A shares and 1% of each Portfolio's average daily net
assets attributable to both Class B and Class C shares. Such fee is accrued
daily and paid monthly. The Agreement provides that the Distributor will use
such payments in their entirety for distribution assistance and promotional
activities. Since the commencement of operations of each Portfolio the
Distributor has incurred expenses in excess of the distribution costs
reimbursed by each Portfolio as follows:
PORTFOLIO CLASS B CLASS C
- -------------- ------------- -----------
Arizona $1,412,135 $ 327,697
Florida 2,309,654 1,499,604
Massachusetts 1,653,933 1,000,249
Michigan 1,159,408 1,102,700
Minnesota 1,664,107 964,971
New Jersey 2,833,172 1,116,303
Ohio 2,428,397 1,080,947
Pennsylvania 2,140,554 992,774
Virginia 2,067,912 449,519
Such costs may be recovered from each Portfolio in future periods so long as
the Agreement is in effect. In accordance with the Agreement, there is no
provision for recovery of unreimbursed distribution costs incurred by the
Distributor beyond the current fiscal year for Class A shares. The Agreement
also provides that the Adviser may use its own resources to finance the
distribution of each Portfolio's shares.
NOTE D: INVESTMENT TRANSACTIONS
Purchases and sales of investment securities (excluding short-term investments
and U.S. government securities) for the six months ended March 31, 1999 were as
follows:
PORTFOLIO PURCHASES SALES
- -------------- ------------- -------------
Arizona $26,990,262 7,314,528
Florida 91,684,674 28,376,727
Massachusetts 69,113,265 25,693,055
Michigan 16,874,116 9,205,472
Minnesota 17,032,071 10,114,049
New Jersey 39,727,040 17,067,194
Ohio 27,728,447 7,574,494
Pennsylvania 72,409,594 23,385,360
Virginia 30,900,332 6,664,924
At March 31, 1999, the cost of investments for federal income tax purposes,
gross unrealized appreciation, gross unrealized depreciation and net unrealized
appreciation of investments for each Portfolio were as follows:
GROSS GROSS NET
UNREALIZED UNREALIZED UNREALIZED
PORTFOLIO TAX COST APPRECIATION (DEPRECIATION) APPRECIATION
- -------------- ------------ ------------ -------------- ------------
Arizona $ 56,169,233 $1,378,832 $ (20,964) $1,357,868
Florida 164,646,688 2,648,523 (196,126) 2,452,397
Massachusetts 99,174,333 1,469,495 (15,896) 1,453,599
Michigan 30,946,212 970,500 (23,505) 946,995
31
NOTES TO FINANCIAL STATEMENTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
GROSS GROSS NET
UNREALIZED UNREALIZED UNREALIZED
PORTFOLIO TAX COST APPRECIATION (DEPRECIATION) APPRECIATION
- -------------- ------------ ------------ -------------- ------------
Minnesota $ 32,354,579 $1,147,651 $ -0- $1,147,651
New Jersey 107,893,806 5,969,206 (7,133) 5,962,073
Ohio 82,595,296 3,462,488 (3,691) 3,458,797
Pennsylvania 120,563,503 4,271,014 (107,737) 4,163,277
Virginia 53,150,228 399,342 (58,195) 341,147
For Federal income tax purposes at September 30, 1998, the Fund had capital
loss carryforwards for the following Portfolios: $3,931,206 expiring in 2003,
for Florida Portfolio; $650,584 expiring in 2003, and $492,981 expiring in
2004, for Minnesota Portfolio; $3,270,077 expiring in 2003, and $349,704
expiring in 2004, for New Jersey Portfolio; $2,526,403 expiring in 2003, and
$332,000 expiring in 2004, for Ohio Portfolio; and $316,038 expiring in 2003,
for Pennsylvania 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. None of the
Portfolios had post October losses.
NOTE E: 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, 1999 SEPT. 30, MARCH 31, 1999 SEPT. 30,
ARIZONA PORTFOLIO (UNAUDITED) 1998 (UNAUDITED) 1998
- ----------------- ------------ ------------ -------------- --------------
CLASS A
Shares sold 1,200,432 1,731,764 $13,123,265 $18,634,736
Shares issued in
reinvestment of
dividends and
distributions 31,191 45,597 341,152 491,757
Shares converted
from Class B 12,074 10,448 132,242 163,390
Shares redeemed (238,660) (723,933) (2,620,392) (7,863,841)
Net increase 1,005,037 1,063,876 $10,976,267 $11,426,042
CLASS B
Shares sold 660,562 730,287 $ 7,214,587 $ 7,895,448
Shares issued in
reinvestment of
dividends and
distributions 21,524 30,944 235,290 333,822
Shares converted
to Class A (12,071) (10,458) (132,242) (163,390)
Shares redeemed (41,621) (115,125) (455,103) (1,192,886)
Net increase 628,394 635,648 $ 6,862,532 $ 6,872,994
CLASS C
Shares sold 188,978 287,268 $ 2,066,619 $ 3,107,936
Shares issued in
reinvestment of
dividends and
distributions 8,112 9,267 88,669 100,059
Shares redeemed (33,124) (34,469) (362,885) (372,072)
Net increase 163,966 262,066 $ 1,792,403 $ 2,835,923
32
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
SHARES AMOUNT
--------------------------- ------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
MARCH 31, 1999 SEPT.30, MARCH 31, 1999 SEPT. 30,
FLORIDA PORTFOLIO (UNAUDITED) 1998 (UNAUDITED) 1998
- ----------------- ------------ ------------ -------------- --------------
CLASS A
Shares sold 2,818,788 3,074,851 $29,292,811 $31,787,286
Shares issued in
reinvestment of
dividends 62,389 53,907 648,769 557,235
Shares converted
from Class B 29,630 60,032 307,251 668,487
Shares redeemed (495,297) (676,944) (5,150,583) (7,012,672)
Net increase 2,415,510 2,511,846 $25,098,248 $26,000,336
CLASS B
Shares sold 2,155,180 1,752,957 $22,409,203 $18,139,164
Shares issued in
reinvestment of
dividends 56,668 65,852 589,111 680,172
Shares converted
to Class A (29,630) (60,032) (307,251) (668,487)
Shares redeemed (188,778) (319,776) (1,960,273) (3,256,349)
Net increase 1,993,440 1,439,001 $20,730,790 $14,894,500
CLASS C
Shares sold 1,093,678 930,521 $11,377,634 $ 9,625,371
Shares issued in
reinvestment of
dividends 41,840 58,806 435,148 607,695
Shares redeemed (223,179) (518,362) (2,319,258) (5,347,873)
Net increase 912,339 470,965 $ 9,493,524 $ 4,885,193
SHARES AMOUNT
--------------------------- ------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
MASSACHUSETTS MARCH 31, 1999 SEPT. 30, MARCH 31, 1999 SEPT. 30,
PORTFOLIO (UNAUDITED) 1998 (UNAUDITED) 1998
- ------------- ------------ ------------ -------------- --------------
CLASS A
Shares sold 2,316,507 1,525,593 $26,254,179 $17,085,284
Shares issued in
reinvestment of
dividends and
distributions 51,042 50,570 577,858 566,795
Shares converted
from Class B -0- 717 -0- 58,037
Shares redeemed (691,235) (400,515) (7,824,257) (4,495,983)
Net increase 1,676,314 1,176,365 $19,007,780 $13,214,133
CLASS B
Shares sold 1,262,306 1,237,850 $14,280,056 $13,890,559
Shares issued in
reinvestment of
dividends and
distributions 36,645 36,577 414,558 409,785
Shares converted
to Class A -0- (717) -0- (58,037)
Shares redeemed (72,927) (127,210) (825,727) (1,375,179)
Net increase 1,226,024 1,146,500 $13,868,887 $12,867,128
CLASS C
Shares sold 871,828 1,013,035 $ 9,858,308 $11,364,712
Shares issued in
reinvestment of
dividends and
distributions 32,757 46,652 370,612 522,783
Shares redeemed (241,205) (171,986) (2,729,165) (1,927,289)
Net increase 663,380 887,701 $ 7,499,755 $ 9,960,206
33
NOTES TO FINANCIAL STATEMENTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
SHARES AMOUNT
--------------------------- ------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
MICHIGAN MARCH 31, 1999 SEPT. 30, MARCH 31, 1999 SEPT. 30,
PORTFOLIO (UNAUDITED) 1998 (UNAUDITED) 1998
- ------------ ------------ ------------ -------------- --------------
CLASS A
Shares sold 205,481 434,869 $ 2,164,428 $ 4,494,329
Shares issued in
reinvestment of
dividends and
distributions 16,198 32,622 170,432 340,581
Shares converted
from Class B 982 2,043 10,333 71,547
Shares redeemed (67,507) (210,595) (709,833) (2,208,136)
Net increase 155,154 258,939 $ 1,635,360 $ 2,698,321
CLASS B
Shares sold 264,195 447,245 $ 2,779,407 $ 4,685,103
Shares issued in
reinvestment of
dividends and
distributions 21,617 31,065 226,967 323,917
Shares converted
to Class A (982) (2,043) (10,333) (71,547)
Shares redeemed (70,332) (93,242) (741,047) (927,923)
Net increase 214,498 383,025 $ 2,254,994 $ 4,009,550
CLASS C
Shares sold 265,028 489,303 $ 2,791,680 $ 5,126,475
Shares issued in
reinvestment of
dividends and
distributions 19,544 39,986 205,462 417,372
Shares redeemed (116,729) (166,391) (1,227,079) (1,742,893)
Net increase 167,843 362,898 $ 1,770,063 $ 3,800,954
SHARES AMOUNT
--------------------------- ------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
MINNESOTA MARCH 31, 1999 SEPT. 30, MARCH 31, 1999 SEPT. 30,
PORTFOLIO (UNAUDITED) 1998 (UNAUDITED) 1998
- ------------ ------------ ------------ -------------- --------------
CLASS A
Shares sold 271,592 240,220 $ 2,774,936 $ 2,376,324
Shares issued in
reinvestment of
dividends 10,570 15,544 107,947 157,123
Shares converted
from Class B 4,242 5,897 43,361 109,403
Shares redeemed (33,418) (62,015) (340,392) (628,217)
Net increase 252,986 199,646 $ 2,585,852 $ 2,014,633
CLASS B
Shares sold 185,020 641,379 $ 1,888,682 $ 6,478,136
Shares issued in
reinvestment of
dividends 19,929 32,588 203,472 329,386
Shares converted
to Class A (4,242) (5,897) (43,361) (109,403)
Shares redeemed (73,543) (164,976) (749,669) (1,616,471)
Net increase 127,164 503,094 $ 1,299,124 $ 5,081,648
CLASS C
Shares sold 180,088 170,118 $ 1,838,057 $ 1,720,113
Shares issued in
reinvestment of
dividends 12,744 26,170 130,139 264,223
Shares redeemed (94,196) (179,084) (960,417) (1,808,073)
Net increase 98,636 17,204 $ 1,007,779 $ 176,263
34
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
SHARES AMOUNT
--------------------------- ------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
NEW JERSEY MARCH 31, 1999 SEPT. 30, MARCH 31, 1999 SEPT. 30,
PORTFOLIO (UNAUDITED) 1998 (UNAUDITED) 1998
- ------------ ------------ ------------ -------------- --------------
CLASS A
Shares sold 657,673 751,262 $ 6,885,045 $ 7,705,304
Shares issued in
reinvestment of
dividends 30,947 54,575 324,323 561,562
Shares converted
from Class B 18,583 21,774 194,634 268,704
Shares redeemed (376,347) (298,768) (3,955,769) (3,073,637)
Net increase 330,856 528,843 $ 3,448,233 $ 5,461,933
CLASS B
Shares sold 1,575,408 1,449,989 $16,497,089 $14,941,581
Shares issued in
reinvestment of
dividends 72,104 113,069 755,426 1,163,362
Shares converted
to Class A (18,580) (21,774) (194,634) (268,704)
Shares redeemed (349,093) (722,074) (3,658,083) (7,381,335)
Net increase 1,279,839 819,210 $13,399,798 $ 8,454,904
CLASS C
Shares sold 608,387 668,420 $ 6,371,187 $ 6,885,939
Shares issued in
reinvestment of
dividends 38,930 65,486 408,010 673,386
Shares redeemed (138,385) (354,535) (1,449,447) (3,647,312)
Net increase 508,932 379,371 $ 5,329,750 $ 3,912,013
SHARES AMOUNT
--------------------------- ------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
MARCH 31, 1999 SEPT. 30, MARCH 31, 1999 SEPT. 30,
OHIO PORTFOLIO (UNAUDITED) 1998 (UNAUDITED) 1998
- --------------- ------------ ------------ -------------- --------------
CLASS A
Shares sold 613,198 639,331 $ 6,379,750 $ 6,566,039
Shares issued in
reinvestment of
dividends 20,938 33,356 217,757 344,655
Shares converted
from Class B 21,224 58,121 220,349 646,153
Shares redeemed (250,807) (117,443) (2,606,701) (1,213,183)
Net increase 404,553 613,365 $ 4,211,155 $ 6,343,664
CLASS B
Shares sold 1,042,271 1,207,646 $10,830,534 $12,480,119
Shares issued in
reinvestment of
dividends 59,609 100,554 619,813 1,038,805
Shares converted to Class A(21,217) (58,121) (220,349) (646,153)
Shares redeemed (174,954) (320,073) (1,818,110) (3,263,624)
Net increase 905,709 930,006 $ 9,411,888 $ 9,609,147
CLASS C
Shares sold 677,887 372,776 $ 7,046,406 $ 3,860,583
Shares issued in
reinvestment of
dividends 27,785 46,608 288,956 480,928
Shares redeemed (122,623) (286,393) (1,274,787) (2,956,196)
Net increase 583,049 132,991 $ 6,060,575 $ 1,385,315
35
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, 1999 SEPT. 30, MARCH 31, 1999 SEPT. 30,
PORTFOLIO (UNAUDITED) 1998 (UNAUDITED) 1998
- ------------ ------------ ------------ -------------- --------------
CLASS A
Shares sold 1,840,068 1,354,357 $19,497,158 $14,149,149
Shares issued in
reinvestment of
dividends 60,605 96,257 642,139 1,006,799
Shares converted
from Class B 23,400 64,196 247,343 722,138
Shares redeemed (360,448) (586,559) (3,816,037) (6,149,684)
Net increase 1,563,625 928,251 $16,570,603 $ 9,728,402
CLASS B
Shares sold 1,334,206 1,163,458 $14,126,633 $12,209,270
Shares issued in
reinvestment of
dividends 54,671 85,232 579,108 891,248
Shares converted
to Class A (23,400) (64,196) (247,343) (722,138)
Shares redeemed (239,258) (392,609) (2,534,214) (4,075,590)
Net increase 1,126,219 791,885 $11,924,184 $ 8,302,790
CLASS C
Shares sold 684,297 428,757 $ 7,237,971 $ 4,483,838
Shares issued in
reinvestment of
dividends 25,282 38,019 267,804 397,062
Shares redeemed (78,276) (320,592) (829,126) (3,345,360)
Net increase 631,303 146,184 $ 6,676,649 $ 1,535,540
SHARES AMOUNT
--------------------------- ------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
VIRGINIA MARCH 31, 1999 SEPT. 30, MARCH 31, 1999 SEPT. 30,
PORTFOLIO (UNAUDITED) 1998 (UNAUDITED) 1998
- ------------ ------------ ------------ -------------- --------------
CLASS A
Shares sold 678,167 657,077 $ 7,389,775 $ 7,125,472
Shares issued in
reinvestment of
dividends and
distributions 17,805 23,268 194,005 252,054
Shares converted
from Class B 2,247 5,107 24,380 105,746
Shares redeemed (58,419) (72,986) (636,985) (800,978)
Net increase 639,800 612,466 $ 6,971,175 $ 6,682,294
CLASS B
Shares sold 1,325,219 1,005,543 $14,431,007 $10,994,477
Shares issued in
reinvestment of
dividends and
distributions 32,979 37,823 358,996 409,683
Shares converted
to Class A (2,249) (5,107) (24,380) (105,746)
Shares redeemed (53,897) (47,923) (587,234) (472,693)
Net increase 1,302,052 990,336 $14,178,389 $10,825,721
CLASS C
Shares sold 436,154 311,389 $ 4,744,168 $ 3,408,930
Shares issued in
reinvestment of
dividends and
distributions 10,870 11,402 118,335 123,580
Shares redeemed (45,619) (15,874) (496,846) (173,859)
Net increase 401,405 306,917 $ 4,365,657 $ 3,358,651
36
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
------------------------------------------------------------------------------
SIX MONTHS JUNE 1, 1994(A)
ENDED YEAR ENDED SEPTEMBER 30, TO
MARCH 31, 1999 -------------------------------------------------- SEPTEMBER 30,
(UNAUDITED) 1998 1997 1996 1995 1994
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $11.03 $10.78 $10.32 $10.29 $ 9.77 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (b) .25(c) .54(c) .57(c) .55(c) .56 .20
Net realized and unrealized gain (loss) on
investment transactions (.05) .45 .48 .14 .53 (.23)
Net increase (decrease) in net asset value
from operations .20 .99 1.05 .69 1.09 (.03)
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.27) (.54) (.57) (.55) (.56) (.20)
Distributions in excess of net
investment income -0- (.02) -0- (.03) (.01) -0-
Distributions from net realized gains (.04) (.18) (.02) (.08) -0- -0-
Total dividends and distributions (.31) (.74) (.59) (.66) (.57) (.20)
Net asset value, end of period $10.92 $11.03 $10.78 $10.32 $10.29 $ 9.77
TOTAL RETURN
Total investment return based on net
asset value (d) 1.89% 9.54% 10.54% 6.84% 11.56% (.35)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $31,936 $21,185 $9,225 $4,409 $2,379 $930
Ratio to average net assets of:
Expenses, net of waivers/reimbursements .78%(e) .78% .78% .78% .78% .78%(e)
Expenses, before waivers/reimbursements 1.48%(e) 1.55% 2.71% 3.69% 4.88% 7.71%(e)
Net investment income, net of waivers/
reimbursements 4.66%(e) 4.92% 5.42% 5.33% 5.56% 5.82%(e)
Portfolio turnover rate 16% 45% 193% 244% 85% 81%
</TABLE>
See footnote summary on page 63.
37
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
PERIOD
<TABLE>
<CAPTION>
ARIZONA PORTFOLIO
------------------------------------------------------------------------------
CLASS B
------------------------------------------------------------------------------
SIX MONTHS JUNE 1, 1994(A)
ENDED YEAR ENDED SEPTEMBER 30, TO
MARCH 31, 1999 -------------------------------------------------- SEPTEMBER 30,
(UNAUDITED) 1998 1997 1996 1995 1994
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $11.03 $10.78 $10.32 $10.29 $ 9.77 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (b) .21(c) .45(c) .50(c) .47(c) .49 .18
Net realized and unrealized gain (loss) on
investment transactions (.05) .47 .48 .14 .53 (.24)
Net increase (decrease) in net asset value
from operations .16 .92 .98 .61 1.02 (.06)
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.24) (.45) (.50) (.47) (.49) (.17)
Distributions in excess of net
investment income -0- (.04) -0- (.03) (.01) -0-
Distributions from net realized gains (.04) (.18) (.02) (.08) -0- -0-
Total dividends and distributions (.28) (.67) (.52) (.58) (.50) (.17)
Net asset value, end of period $10.91 $11.03 $10.78 $10.32 $10.29 $ 9.77
TOTAL RETURN
Total investment return based on net
asset value (d) 1.47% 8.84% 9.80% 6.10% 10.78% (.58)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $20,407 $13,698 $6,531 $5,199 $3,166 $1,677
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 1.48%(e) 1.48% 1.48% 1.48% 1.48% 1.48%(e)
Expenses, before waivers/reimbursements 2.18%(e) 2.30% 3.40% 4.40% 5.58% 8.41%(e)
Net investment income, net of waivers/
reimbursements 3.96%(e) 4.21% 4.73% 4.62% 4.89% 5.13%(e)
Portfolio turnover rate 16% 45% 193% 244% 85% 81%
</TABLE>
See footnote summary on page 63.
38
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
PERIOD
<TABLE>
<CAPTION>
ARIZONA PORTFOLIO
------------------------------------------------------------------------------
CLASS C
------------------------------------------------------------------------------
SIX MONTHS JUNE 1, 1994(A)
ENDED YEAR ENDED SEPTEMBER 30, TO
MARCH 31, 1999 -------------------------------------------------- SEPTEMBER 30,
(UNAUDITED) 1998 1997 1996 1995 1994
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $11.03 $10.78 $10.32 $10.30 $ 9.77 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (b) .21(c) .45(c) .50(c) .47(c) .49 .17
Net realized and unrealized gain (loss) on
investment transactions (.05) .47 .48 .13 .54 (.23)
Net increase (decrease) in net asset value
from operations .16 .92 .98 .60 1.03 (.06)
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.24) (.45) (.50) (.47) (.49) (.17)
Distributions in excess of net
investment income -0- (.04) -0- (.03) (.01) -0-
Distributions from net realized gains (.04) (.18) (.02) (.08) -0- -0-
Total dividends and distributions (.28) (.67) (.52) (.58) (.50) (.17)
Net asset value, end of period $10.91 $11.03 $10.78 $10.32 $10.30 $ 9.77
TOTAL RETURN
Total investment return based on net
asset value (d) 1.47% 8.83% 9.80% 6.00% 10.89% (.58)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $6,445 $4,708 $1,775 $710 $481 $485
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 1.48%(e) 1.48% 1.48% 1.48% 1.48% 1.48%(e)
Expenses, before waivers/reimbursements 2.17%(e) 2.34% 3.39% 4.41% 5.58% 8.41%(e)
Net investment income, net of waivers/
reimbursements 3.96%(e) 4.19% 4.70% 4.61% 4.90% 4.70%(e)
Portfolio turnover rate 16% 45% 193% 244% 85% 81%
</TABLE>
See footnote summary on page 63.
39
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
ENDED YEAR ENDED SEPTEMBER 30,
MARCH 31, 1999 ---------------------------------------------------------------
(UNAUDITED) 1998 1997 1996 1995 1994
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $10.48 $10.14 $ 9.73 $ 9.58 $ 8.89 $10.25
INCOME FROM INVESTMENT OPERATIONS
Net investment income (b) .25(c) .52(c) .55(c) .54(c) .55 .55
Net realized and unrealized gain (loss) on
investment transactions (.11) .37 .41 .16 .69 (1.35)
Net increase (decrease) in net asset value
from operations .14 .89 .96 .70 1.24 (.80)
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.27) (.52) (.55) (.54) (.55) (.55)
Distributions in excess of net
investment income -0- (.03) -0- (.01) -0- -0-
Distributions from net realized gains -0- -0- -0- -0- -0- (.01)
Total dividends and distributions (.27) (.55) (.55) (.55) (.55) (.56)
Net asset value, end of period $10.35 $10.48 $10.14 $ 9.73 $ 9.58 $ 8.89
TOTAL RETURN
Total investment return based on net
asset value (d) 1.38% 8.97% 10.14% 7.45% 14.44% (8.03)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $68,878 $44,440 $17,516 $14,297 $11,956 $8,227
Ratio to average net assets of:
Expenses, net of waivers/reimbursements .73%(e) .73% .73% .73% .73% .38%
Expenses, before waivers/reimbursements 1.11%(e) 1.27% 1.35% 1.33% 1.33% 1.27%
Net investment income, net of waivers/
reimbursements 4.76%(e) 5.14% 5.58% 5.52% 5.91% 5.70%
Portfolio turnover rate 23% 65% 204% 237% 146% 185%
</TABLE>
See footnote summary on page 63.
40
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
PERIOD
<TABLE>
<CAPTION>
FLORIDA PORTFOLIO
------------------------------------------------------------------------------
CLASS B
------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
MARCH 31, 1999 ---------------------------------------------------------------
(UNAUDITED) 1998 1997 1996 1995 1994
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $10.48 $10.14 $ 9.74 $ 9.58 $ 8.89 $10.25
INCOME FROM INVESTMENT OPERATIONS
Net investment income (b) .21(c) .46(c) .48(c) .47(c) .47 .48
Net realized and unrealized gain (loss) on
investment transactions (.10) .36 .40 .17 .70 (1.35)
Net increase (decrease) in net asset value
from operations .11 .82 .88 .64 1.17 (.87)
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.24) (.46) (.48) (.47) (.47) (.48)
Distributions in excess of net
investment income -0- (.02) -0- (.01) (.01) -0-
Distributions from net realized gains -0- -0- -0- -0- -0- (.01)
Total dividends and distributions (.24) (.48) (.48) (.48) (.48) (.49)
Net asset value, end of period $10.35 $10.48 $10.14 $ 9.74 $ 9.58 $ 8.89
TOTAL RETURN
Total investment return based on net
asset value (d) 1.03% 8.22% 9.24% 6.78% 13.56% (8.72)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $60,852 $40,740 $24,820 $22,235 $20,660 $18,048
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 1.43%(e) 1.43% 1.43% 1.43% 1.42% 1.08%
Expenses, before waivers/reimbursements 1.81%(e) 1.97% 2.05% 2.03% 2.03% 1.98%
Net investment income, net of waivers/
reimbursements 4.07%(e) 4.46% 4.87% 4.81% 5.22% 4.99%
Portfolio turnover rate 23% 65% 204% 237% 146% 185%
</TABLE>
See footnote summary on page 63.
41
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 C
------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
MARCH 31, 1999 ---------------------------------------------------------------
(UNAUDITED) 1998 1997 1996 1995 1994
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $10.48 $10.14 $ 9.74 $ 9.58 $ 8.89 $10.25
INCOME FROM INVESTMENT OPERATIONS
Net investment income (b) .21(c) .46(c) .49(c) .47(c) .47 .48
Net realized and unrealized gain (loss) on
investment transactions (.10) .36 .39 .17 .70 (1.35)
Net increase (decrease) in net asset value
from operations .11 .82 .88 .64 1.17 (.87)
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.24) (.46) (.48) (.47) (.47) (.48)
Distributions in excess of net
investment income -0- (.02) -0- (.01) (.01) -0-
Distributions from net realized gains -0- -0- -0- -0- -0- (.01)
Total dividends and distributions (.24) (.48) (.48) (.48) (.48) (.49)
Net asset value, end of period $10.35 $10.48 $10.14 $ 9.74 $ 9.58 $ 8.89
TOTAL RETURN
Total investment return based on net
asset value (d) 1.03% 8.22% 9.23% 6.78% 13.56% (8.72)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $40,565 $31,524 $25,722 $30,121 $30,787 $42,405
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 1.43%(e) 1.43% 1.43% 1.43% 1.42% 1.08%
Expenses, before waivers/reimbursements 1.81%(e) 1.99% 2.03% 2.02% 2.03% 1.97%
Net investment income, net of waivers/
reimbursements 4.08%(e) 4.48% 4.89% 4.81% 5.27% 4.97%
Portfolio turnover rate 23% 65% 204% 237% 146% 185%
</TABLE>
See footnote summary on page 63.
42
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
PERIOD
<TABLE>
<CAPTION>
MASSACHUSETTS PORTFOLIO
------------------------------------------------------------------------------
CLASS A
------------------------------------------------------------------------------
SIX MONTHS MARCH 29, 1994(A)
ENDED YEAR ENDED SEPTEMBER 30, TO
MARCH 31, 1999 -------------------------------------------------- SEPTEMBER 30,
(UNAUDITED) 1998 1997 1996 1995 1994
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $11.39 $11.19 $10.85 $10.50 $10.12 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (b) .25(c) .54(c) .58(c) .60(c) .58 .31
Net realized and unrealized gain on
investment transactions (.01) .45 .57 .44 .41 .11
Net increase in net asset value
from operations .24 .99 1.15 1.04 .99 .42
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.29) (.54) (.58) (.59) (.58) (.30)
Distributions in excess of net
investment income -0- (.06) (.03) (.02) (.03) -0-
Distributions from net realized gains (.03) (.19) (.20) (.08) -0- -0-
Total dividends and distributions (.32) (.79) (.81) (.69) (.61) (.30)
Net asset value, end of period $11.31 $11.39 $11.19 $10.85 $10.50 $10.12
TOTAL RETURN
Total investment return based on net
asset value (d) 2.16% 9.18% 11.14% 10.25% 10.19% 4.14%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $41,831 $23,026 $9,461 $3,211 $1,337 $565
Ratio to average net assets of:
Expenses, net of waivers/reimbursements .72%(e) .72% .72% .62% .60% .60%(e)
Expenses, before waivers/reimbursements 1.17%(e) 1.51% 2.40% 3.15% 6.44% 13.20%(e)
Net investment income, net of waivers/
reimbursements 4.02%(e) 4.87% 5.40% 5.62% 5.67% 5.98%(e)
Portfolio turnover rate 34% 69% 134% 246% 155% 146%
</TABLE>
See footnote summary on page 63.
43
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 B
------------------------------------------------------------------------------
SIX MONTHS MARCH 29, 1994(A)
ENDED YEAR ENDED SEPTEMBER 30, TO
MARCH 31, 1999 -------------------------------------------------- SEPTEMBER 30,
(UNAUDITED) 1998 1997 1996 1995 1994
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $11.38 $11.19 $10.84 $10.49 $10.12 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (b) .22(c) .46(c) .51(c) .52(c) .52 .27
Net realized and unrealized gain on
investment transactions (.01) .45 .58 .45 .39 .11
Net increase in net asset value
from operations .21 .91 1.09 .97 .91 .38
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.26) (.46) (.51) (.52) (.52) (.26)
Distributions in excess of net
investment income -0- (.07) (.03) (.02) (.02) -0-
Distributions from net realized gains (.03) (.19) (.20) (.08) -0- -0-
Total dividends and distributions (.29) (.72) (.74) (.62) (.54) (.26)
Net asset value, end of period $11.30 $11.38 $11.19 $10.84 $10.49 $10.12
TOTAL RETURN
Total investment return based on net
asset value (d) 1.84% 8.40% 10.52% 9.52% 9.32% 3.78%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $34,110 $20,400 $7,230 $3,683 $1,754 $725
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 1.42%(e) 1.42% 1.42% 1.32% 1.30% 1.30%(e)
Expenses, before waivers/reimbursements 1.88%(e) 2.22% 3.07% 3.85% 7.14% 13.90%(e)
Net investment income, net of waivers/
reimbursements 3.34%(e) 4.16% 4.73% 4.93% 4.90% 5.13%(e)
Portfolio turnover rate 34% 69% 134% 246% 155% 146%
</TABLE>
See footnote summary on page 63.
44
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
PERIOD
<TABLE>
<CAPTION>
MASSACHUSETTS PORTFOLIO
------------------------------------------------------------------------------
CLASS C
------------------------------------------------------------------------------
SIX MONTHS MARCH 29, 1994(A)
ENDED YEAR ENDED SEPTEMBER 30, TO
MARCH 31, 1999 -------------------------------------------------- SEPTEMBER 30,
(UNAUDITED) 1998 1997 1996 1995 1994
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $11.38 $11.19 $10.84 $10.49 $10.12 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (b) .22(c) .47(c) .51(c) .52(c) .52 .25
Net realized and unrealized gain on
investment transactions (.01) .44 .58 .45 .39 .13
Net increase in net asset value
from operations .21 .91 1.09 .97 .91 .38
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.26) (.47) (.51) (.52) (.52) (.26)
Distributions in excess of net
investment income -0- (.06) (.03) (.02) (.02) -0-
Distributions from net realized gains (.03) (.19) (.20) (.08) -0- -0-
Total dividends and distributions (.29) (.72) (.74) (.62) (.54) (.26)
Net asset value, end of period $11.30 $11.38 $11.19 $10.84 $10.49 $10.12
TOTAL RETURN
Total investment return based on net
asset value (d) 1.84% 8.40% 10.52% 9.52% 9.32% 3.78%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $25,418 $18,050 $7,815 $4,514 $2,556 $774
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 1.42%(e) 1.42% 1.42% 1.31% 1.30% 1.30%(e)
Expenses, before waivers/reimbursements 1.87%(e) 2.21% 3.09% 3.84% 7.14% 13.90%(e)
Net investment income, net of waivers/
reimbursements 3.34%(e) 4.18% 4.75% 4.88% 4.85% 4.00%(e)
Portfolio turnover rate 34% 69% 134% 246% 155% 146%
</TABLE>
See footnote summary on page 63.
45
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
PERIOD
<TABLE>
<CAPTION>
MICHIGAN PORTFOLIO
------------------------------------------------------------------------------
CLASS A
------------------------------------------------------------------------------
SIX MONTHS FEBRUARY 25,
ENDED YEAR ENDED SEPTEMBER 30, 1994(A) TO
MARCH 31, 1999-------------------------------------------------- SEPTEMBER 30,
(UNAUDITED) 1998 1997 1996 1995 1994
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $10.62 $10.52 $10.12 $10.10 $ 9.35 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (b) .23(c) .48(c) .53(c) .52(c) .52 .33
Net realized and unrealized gain (loss) on
investment transactions -0- .44 .55 .22 .78 (.65)
Net increase (decrease) in net asset value
from operations .23 .92 1.08 .74 1.30 (.32)
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.25) (.48) (.53) (.52) (.52) (.33)
Distributions in excess of net
investment income -0- (.05) (.02) (.03) (.03) -0-
Distributions from net realized gains (.07) (.29) (.13) (.17) -0- -0-
Total dividends and distributions (.32) (.82) (.68) (.72) (.55) (.33)
Net asset value, end of period $10.53 $10.62 $10.52 $10.12 $10.10 $ 9.35
TOTAL RETURN
Total investment return based on net
asset value (d) 2.20% 9.08% 11.05% 7.54% 14.40% (3.24)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $10,196 $8,640 $5,836 $6,123 $5,158 $2,473
Ratio to average net assets of:
Expenses, net of waivers/reimbursements .96%(e) .96% .96% .96% 1.36% .93%(e)
Expenses, before waivers/reimbursements 1.75%(e) 1.89% 2.46% 2.77% 3.43% 3.97%(e)
Net investment income, net of waivers/
reimbursements 4.38%(e) 4.57% 5.24% 5.21% 5.27% 5.83%(e)
Portfolio turnover rate 32% 134% 161% 242% 151% 222%
</TABLE>
See footnote summary on page 63.
46
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
PERIOD
<TABLE>
<CAPTION>
MICHIGAN PORTFOLIO
------------------------------------------------------------------------------
CLASS B
------------------------------------------------------------------------------
SIX MONTHS FEBRUARY 25,
ENDED YEAR ENDED SEPTEMBER 30, 1994(A) TO
MARCH 31, 1999-------------------------------------------------- SEPTEMBER 30,
(UNAUDITED) 1998 1997 1996 1995 1994
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $10.61 $10.52 $10.12 $10.10 $ 9.35 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (b) .19(c) .40(c) .46(c) .45(c) .45 .29
Net realized and unrealized gain (loss) on
investment transactions -0- .44 .55 .22 .78 (.65)
Net increase (decrease) in net asset value
from operations .19 .84 1.01 .67 1.23 (.36)
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.21) (.40) (.46) (.45) (.45) (.29)
Distributions in excess of net
investment income -0- (.06) (.02) (.03) (.03) -0-
Distributions from net realized gains (.07) (.29) (.13) (.17) -0- -0-
Total dividends and distributions (.28) (.75) (.61) (.65) (.48) (.29)
Net asset value, end of period $10.52 $10.61 $10.52 $10.12 $10.10 $ 9.35
TOTAL RETURN
Total investment return based on net
asset value (d) 1.87% 8.26% 10.30% 6.80% 13.58% (3.65)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $11,580 $9,411 $5,300 $3,553 $2,424 $1,722
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 1.66%(e) 1.66% 1.66% 1.66% 2.06% 1.63%(e)
Expenses, before waivers/reimbursements 2.47%(e) 2.61% 3.23% 3.48% 4.12% 4.67%(e)
Net investment income, net of waivers/
reimbursements 3.68%(e) 3.87% 4.53% 4.51% 4.57% 4.93%(e)
Portfolio turnover rate 32% 134% 161% 242% 151% 222%
</TABLE>
See footnote summary on page 63.
47
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
PERIOD
<TABLE>
<CAPTION>
MICHIGAN PORTFOLIO
------------------------------------------------------------------------------
CLASS C
------------------------------------------------------------------------------
SIX MONTHS FEBRUARY 25,
ENDED YEAR ENDED SEPTEMBER 30, 1994(A) TO
MARCH 31, 1999-------------------------------------------------- SEPTEMBER 30,
(UNAUDITED) 1998 1997 1996 1995 1994
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $10.61 $10.52 $10.12 $10.10 $ 9.35 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (b) .19(c) .41(c) .46(c) .45(c) .45 .29
Net realized and unrealized gain (loss) on
investment transactions -0- .43 .55 .22 .78 (.65)
Net increase (decrease) in net asset value
from operations .19 .84 1.01 .67 1.23 (.36)
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.21) (.41) (.46) (.45) (.45) (.29)
Distributions in excess of net
investment income -0- (.05) (.02) (.03) (.03) -0-
Distributions from net realized gains (.07) (.29) (.13) (.17) -0- -0-
Total dividends and distributions (.28) (.75) (.61) (.65) (.48) (.29)
Net asset value, end of period $10.52 $10.61 $10.52 $10.12 $10.10 $ 9.35
TOTAL RETURN
Total investment return based on net
asset value (d) 1.87% 8.26% 10.30% 6.80% 13.58% (3.65)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $10,666 $8,983 $5,089 $3,940 $2,886 $2,778
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 1.66%(e) 1.66% 1.66% 1.66% 2.06% 1.63%(e)
Expenses, before waivers/reimbursements 2.46%(e) 2.59% 3.20% 3.48% 4.13% 4.67%(e)
Net investment income, net of waivers/
reimbursements 3.68%(e) 3.88% 4.55% 4.50% 4.69% 4.92%(e)
Portfolio turnover rate 32% 134% 161% 242% 151% 222%
</TABLE>
See footnote summary on page 63.
48
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
ENDED YEAR ENDED SEPTEMBER 30,
MARCH 31, 1999 ---------------------------------------------------------------
(UNAUDITED) 1998 1997 1996 1995 1994
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $10.22 $ 9.97 $ 9.58 $ 9.49 $ 9.19 $10.28
INCOME FROM INVESTMENT OPERATIONS
Net investment income (b) .24(c) .50(c) .53(c) .53(c) .53 .55
Net realized and unrealized gain (loss) on
investment transactions (.02) .27 .39 .11 .32 (1.09)
Net increase (decrease) in net asset value
from operations .22 .77 .92 .64 .85 (.54)
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.25) (.50) (.53) (.53) (.53) (.55)
Distributions in excess of net
investment income -0- (.02) -0- (.02) (.02) -0-
Total dividends and distributions (.25) (.52) (.53) (.55) (.55) (.55)
Net asset value, end of period $10.19 $10.22 $ 9.97 $ 9.58 $ 9.49 $ 9.19
TOTAL RETURN
Total investment return based on net
asset value (d) 2.22% 7.94% 9.93% 6.95% 9.63% (5.35)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $8,819 $6,261 $4,120 $3,165 $2,414 $2,125
Ratio to average net assets of:
Expenses, net of waivers/reimbursements .75%(e) .75% .75% .72% .71% .09%
Expenses, before waivers/reimbursements 1.70%(e) 1.80% 2.22% 2.19% 2.30% 2.12%
Net investment income, net of waivers/
reimbursements 4.76%(e) 4.92% 5.44% 5.54% 5.71% 5.71%
Portfolio turnover rate 35% 30% 131% 195% 117% 143%
</TABLE>
See footnote summary on page 63.
49
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 B
------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
MARCH 31, 1999 ---------------------------------------------------------------
(UNAUDITED) 1998 1997 1996 1995 1994
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $10.22 $ 9.97 $ 9.58 $ 9.49 $ 9.18 $10.28
INCOME FROM INVESTMENT OPERATIONS
Net investment income (b) .21(c) .42(c) .46(c) .46(c) .46 .48
Net realized and unrealized gain (loss) on
investment transactions (.02) .28 .39 .11 .33 (1.10)
Net increase (decrease) in net asset value
from operations .19 .70 .85 .57 .79 (.62)
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.22) (.42) (.46) (.46) (.46) (.48)
Distributions in excess of net
investment income -0- (.03) -0- (.02) (.02) -0-
Total dividends and distributions (.22) (.45) (.46) (.48) (.48) (.48)
Net asset value, end of period $10.19 $10.22 $ 9.97 $ 9.58 $ 9.49 $ 9.18
TOTAL RETURN
Total investment return based on net
asset value (d) 1.86% 7.17% 9.13% 6.15% 8.90% (6.15)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $15,117 $13,867 $8,517 $8,291 $7,299 $6,150
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 1.46%(e) 1.46% 1.46% 1.42% 1.42% .80%
Expenses, before waivers/reimbursements 2.41%(e) 2.52% 2.91% 2.89% 3.02% 2.83%
Net investment income, net of waivers/
reimbursements 4.04%(e) 4.19% 4.75% 4.82% 4.97% 5.00%
Portfolio turnover rate 35% 30% 131% 195% 117% 143%
</TABLE>
See footnote summary on page 63.
50
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
ENDED YEAR ENDED SEPTEMBER 30,
MARCH 31, 1999 ---------------------------------------------------------------
(UNAUDITED) 1998 1997 1996 1995 1994
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $10.22 $ 9.97 $ 9.58 $ 9.50 $ 9.19 $10.27
INCOME FROM INVESTMENT OPERATIONS
Net investment income (b) .20(c) .43(c) .46(c) .46(c) .46 .48
Net realized and unrealized gain (loss) on
investment transactions (.01) .27 .39 .10 .33 (1.08)
Net increase (decrease) in net asset value
from operations .19 .70 .85 .56 .79 (.60)
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.22) (.43) (.46) (.46) (.46) (.48)
Distributions in excess of net
investment income -0- (.02) -0- (.02) (.02) -0-
Total dividends and distributions (.22) (.45) (.46) (.48) (.48) (.48)
Net asset value, end of period $10.19 $10.22 $ 9.97 $ 9.58 $ 9.50 $ 9.19
TOTAL RETURN
Total investment return based on net
asset value (d) 1.86% 7.18% 9.13% 6.03% 8.89% (5.95)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $8,696 $7,716 $7,358 $6,553 $7,305 $ 9,489
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 1.45%(e) 1.45% 1.45% 1.41% 1.41% .79%
Expenses, before waivers/reimbursements 2.41%(e) 2.48% 2.89% 2.88% 3.00% 2.82%
Net investment income, net of waivers/
reimbursements 4.04%(e) 4.23% 4.76% 4.82% 5.05% 4.90%
Portfolio turnover rate 35% 30% 131% 195% 117% 143%
</TABLE>
See footnote summary on page 63.
51
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
ENDED YEAR ENDED SEPTEMBER 30,
MARCH 31, 1999 ---------------------------------------------------------------
(UNAUDITED) 1998 1997 1996 1995 1994
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $10.46 $10.15 $ 9.72 $ 9.65 $ 9.07 $10.29
INCOME FROM INVESTMENT OPERATIONS
Net investment income (b) .25(c) .51(c) .51(c) .51(c) .54 .55
Net realized and unrealized gain (loss) on
investment transactions .01 .32 .44 .11 .59 (1.22)
Net increase (decrease) in net asset value
from operations .26 .83 .95 .62 1.13 (.67)
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.26) (.51) (.51) (.51) (.54) (.55)
Distributions in excess of net
investment income -0- (.01) (.01) (.04) (.01) -0-
Total dividends and distributions (.26) (.52) (.52) (.55) (.55) (.55)
Net asset value, end of period $10.46 $10.46 $10.15 $ 9.72 $ 9.65 $ 9.07
TOTAL RETURN
Total investment return based on net
asset value (d) 2.51% 8.36% 10.01% 6.57% 12.91% (6.67)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $25,797 $22,333 $16,309 $15,520 $11,612 $ 9,257
Ratio to average net assets of:
Expenses, net of waivers/reimbursements .82%(e) .82% .82% .82% .82% .20%
Expenses, before waivers/reimbursements 1.21%(e) 1.29% 1.34% 1.35% 1.35% 1.33%
Net investment income, net of waivers/
reimbursements 4.76%(e) 4.93% 5.16% 5.26% 5.73% 5.65%
Portfolio turnover rate 17% 35% 61% 132% 86% 171%
</TABLE>
See footnote summary on page 63.
52
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
PERIOD
<TABLE>
<CAPTION>
NEW JERSEY PORTFOLIO
------------------------------------------------------------------------------
CLASS B
------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
MARCH 31, 1999 ---------------------------------------------------------------
(UNAUDITED) 1998 1997 1996 1995 1994
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $10.46 $10.16 $ 9.72 $ 9.66 $ 9.07 $10.28
INCOME FROM INVESTMENT OPERATIONS
Net investment income (b) .21(c) .43(c) .44(c) .44(c) .47 .48
Net realized and unrealized gain (loss) on
investment transactions .01 .32 .45 .10 .60 (1.21)
Net increase (decrease) in net asset value
from operations .22 .75 .89 .54 1.07 (.73)
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.22) (.43) (.44) (.45) (.47) (.48)
Distributions in excess of net
investment income -0- (.02) (.01) (.03) (.01) -0-
Total dividends and distributions (.22) (.45) (.45) (.48) (.48) (.48)
Net asset value, end of period $10.46 $10.46 $10.16 $ 9.72 $ 9.66 $ 9.07
TOTAL RETURN
Total investment return based on net
asset value (d) 2.15% 7.50% 9.32% 5.66% 12.15% (7.28)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $61,406 $48,027 $38,308 $39,099 $34,695 $30,459
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 1.53%(e) 1.53% 1.53% 1.53% 1.53% .91%
Expenses, before waivers/reimbursements 1.92%(e) 2.00% 2.04% 2.05% 2.06% 2.03%
Net investment income, net of waivers/
reimbursements 4.05%(e) 4.23% 4.45% 4.56% 5.03% 4.96%
Portfolio turnover rate 17% 35% 61% 132% 86% 171%
</TABLE>
See footnote summary on page 63.
53
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 C
------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
MARCH 31, 1999 ---------------------------------------------------------------
(UNAUDITED) 1998 1997 1996 1995 1994
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $10.46 $10.16 $ 9.72 $ 9.66 $ 9.07 $10.28
INCOME FROM INVESTMENT OPERATIONS
Net investment income (b) .21(c) .43(c) .44(c) .44(c) .47 .48
Net realized and unrealized gain (loss) on
investment transactions .01 .32 .45 .10 .60 (1.21)
Net increase (decrease) in net asset value
from operations .22 .75 .89 .54 1.07 (.73)
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.22) (.43) (.44) (.45) (.47) (.48)
Distributions in excess of net
investment income -0- (.02) (.01) (.03) (.01) -0-
Total dividends and distributions (.22) (.45) (.45) (.48) (.48) (.48)
Net asset value, end of period $10.46 $10.46 $10.16 $ 9.72 $ 9.66 $ 9.07
TOTAL RETURN
Total investment return based on net
asset value (d) 2.15% 7.50% 9.32% 5.66% 12.14% (7.28)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $31,335 $26,018 $21,404 $22,579 $21,255 $26,472
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 1.52%(e) 1.52% 1.52% 1.52% 1.52% .90%
Expenses, before waivers/reimbursements 1.91%(e) 1.99% 2.03% 2.04% 2.06% 2.02%
Net investment income, net of waivers/
reimbursements 4.06%(e) 4.23% 4.47% 4.56% 5.09% 4.93%
Portfolio turnover rate 17% 35% 61% 132% 86% 171%
</TABLE>
See footnote summary on page 63.
54
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
ENDED YEAR ENDED SEPTEMBER 30,
MARCH 31, 1999 ---------------------------------------------------------------
(UNAUDITED) 1998 1997 1996 1995 1994
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $10.45 $10.16 $ 9.61 $ 9.53 $ 9.06 $10.26
INCOME FROM INVESTMENT OPERATIONS
Net investment income (b) .25(c) .52(c) .54(c) .52(c) .54 .55
Net realized and unrealized gain (loss) on
investment transactions (.05) .30 .54 .11 .48 (1.19)
Net increase (decrease) in net asset value
from operations .20 .82 1.08 .63 1.02 (.64)
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.27) (.52) (.53) (.53) (.54) (.55)
Distributions in excess of net
investment income -0- (.01) -0- (.02) (.01) -0-
Distributions from net realized gains -0- -0- -0- -0- -0- (.01)
Total dividends and distributions (.27) (.53) (.53) (.55) (.55) (.56)
Net asset value, end of period $10.38 $10.45 $10.16 $ 9.61 $ 9.53 $ 9.06
TOTAL RETURN
Total investment return based on net
asset value (d) 1.92% 8.30% 11.60% 6.72% 11.63% (6.44)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $18,322 $14,220 $7,596 $6,054 $4,170 $2,810
Ratio to average net assets of:
Expenses, net of waivers/reimbursements .75%(e) .75% .75% .75% .75% .04%
Expenses, before waivers/reimbursements 1.27%(e) 1.35% 1.52% 1.48% 1.51% 1.42%
Net investment income, net of waivers/
reimbursements 4.87%(e) 5.05% 5.49% 5.47% 5.74% 5.67%
Portfolio turnover rate 10% 16% 104% 182% 108% 161%
</TABLE>
See footnote summary on page 63.
55
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 B
------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
MARCH 31, 1999 ---------------------------------------------------------------
(UNAUDITED) 1998 1997 1996 1995 1994
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $10.45 $10.16 $ 9.61 $ 9.54 $ 9.06 $10.26
INCOME FROM INVESTMENT OPERATIONS
Net investment income (b) .22(c) .45(c) .48(c) .46(c) .47 .48
Net realized and unrealized gain (loss) on
investment transactions (.06) .30 .53 .09 .49 (1.19)
Net increase (decrease) in net asset value
from operations .16 .75 1.01 .55 .96 (.71)
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.23) (.45) (.46) (.46) (.47) (.48)
Distributions in excess of net
investment income -0- (.01) -0- (.02) (.01) -0-
Distributions from net realized gains -0- -0- -0- -0- -0- (.01)
Total dividends and distributions (.23) (.46) (.46) (.48) (.48) (.49)
Net asset value, end of period $10.38 $10.45 $10.16 $ 9.61 $ 9.54 $ 9.06
TOTAL RETURN
Total investment return based on net
asset value (d) 1.57% 7.56% 10.80% 5.82% 10.88% (7.13)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $46,448 $37,289 $26,821 $25,334 $21,821 $20,267
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 1.46%(e) 1.46% 1.46% 1.46% 1.46% .74%
Expenses, before waivers/reimbursements 1.98%(e) 2.05% 2.22% 2.18% 2.21% 2.13%
Net investment income, net of waivers/
reimbursements 4.17%(e) 4.34% 4.81% 4.77% 5.08% 4.95%
Portfolio turnover rate 10% 16% 104% 182% 108% 161%
</TABLE>
See footnote summary on page 63.
56
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
ENDED YEAR ENDED SEPTEMBER 30,
MARCH 31, 1999 ---------------------------------------------------------------
(UNAUDITED) 1998 1997 1996 1995 1994
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $10.45 $10.16 $ 9.61 $ 9.54 $ 9.06 $10.26
INCOME FROM INVESTMENT OPERATIONS
Net investment income (b) .22(c) .45(c) .47(c) .46(c) .47 .48
Net realized and unrealized gain (loss) on
investment transactions (.06) .30 .54 .09 .49 (1.19)
Net increase (decrease) in net asset value
from operations .16 .75 1.01 .55 .96 (.71)
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.23) (.45) (.46) (.46) (.47) (.48)
Distributions in excess of net
investment income -0- (.01) -0- (.02) (.01) -0-
Distributions from net realized gains -0- -0- -0- -0- -0- (.01)
Total dividends and distributions (.23) (.46) (.46) (.48) (.48) (.49)
Net asset value, end of period $10.38 $10.45 $10.16 $ 9.61 $ 9.54 $ 9.06
TOTAL RETURN
Total investment return based on net
asset value (d) 1.57% 7.56% 10.80% 5.82% 10.88% (7.13)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $22,633 $16,685 $14,878 $17,203 $18,874 $26,294
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 1.45%(e) 1.45% 1.45% 1.45% 1.45% .74%
Expenses, before waivers/reimbursements 1.99%(e) 2.04% 2.20% 2.16% 2.20% 2.12%
Net investment income, net of waivers/
reimbursements 4.18%(e) 4.36% 4.81% 4.78% 5.14% 4.89%
Portfolio turnover rate 10% 16% 104% 182% 108% 161%
</TABLE>
See footnote summary on page 63.
57
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
ENDED YEAR ENDED SEPTEMBER 30,
MARCH 31, 1999 ---------------------------------------------------------------
(UNAUDITED) 1998 1997 1996 1995 1994
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $10.66 $10.33 $ 9.85 $ 9.64 $ 9.18 $10.25
INCOME FROM INVESTMENT OPERATIONS
Net investment income (b) .24(c) .53(c) .55(c) .49(c) .54 .56
Net realized and unrealized gain (loss) on
investment transactions (.07) .35 .49 .28 .48 (1.06)
Net increase (decrease) in net asset value
from operations .17 .88 1.04 .77 1.02 (.50)
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.27) (.53) (.55) (.53) (.54) (.56)
Distributions in excess of net
investment income -0- (.02) (.01) (.03) (.02) -0-
Distributions from net realized gains -0- -0- -0- -0- -0- (.01)
Total dividends and distributions (.27) (.55) (.56) (.56) (.56) (.57)
Net asset value, end of period $10.56 $10.66 $10.33 $ 9.85 $ 9.64 $ 9.18
TOTAL RETURN
Total investment return based on net
asset value (d) 1.59% 8.72% 10.85% 8.17% 11.53% (5.02)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $51,810 $35,632 $24,948 $21,104 $8,721 $7,149
Ratio to average net assets of:
Expenses, net of waivers/reimbursements .95%(e) .95% .95% 1.00% 1.00% .45%
Expenses, before waivers/reimbursements 1.17%(e) 1.29% 1.40% 1.45% 1.47% 1.46%
Net investment income, net of waivers/
reimbursements 4.58%(e) 5.10% 5.44% 5.40% 5.78% 5.73%
Portfolio turnover rate 23% 70% 85% 185% 114% 156%
</TABLE>
See footnote summary on page 63.
58
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
PERIOD
<TABLE>
<CAPTION>
PENNSYLVANIA PORTFOLIO
------------------------------------------------------------------------------
CLASS B
------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
MARCH 31, 1999 ---------------------------------------------------------------
(UNAUDITED) 1998 1997 1996 1995 1994
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $10.66 $10.33 $ 9.86 $ 9.65 $ 9.18 $10.25
INCOME FROM INVESTMENT OPERATIONS
Net investment income (b) .20(c) .46(c) .47(c) .46(c) .47 .49
Net realized and unrealized gain (loss) on
investment transactions (.07) .34 .49 .24 .49 (1.06)
Net increase (decrease) in net asset value
from operations .13 .80 .96 .70 .96 (.57)
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.23) (.46) (.47) (.46) (.47) (.49)
Distributions in excess of net
investment income -0- (.01) (.02) (.03) (.02) -0-
Distributions from net realized gains -0- -0- -0- -0- -0- (.01)
Total dividends and distributions (.23) (.47) (.49) (.49) (.49) (.50)
Net asset value, end of period $10.56 $10.66 $10.33 $ 9.86 $ 9.65 $ 9.18
TOTAL RETURN
Total investment return based on net
asset value (d) 1.24% 7.98% 9.95% 7.38% 10.78% (5.72)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $50,980 $39,465 $30,078 $30,440 $28,559 $25,637
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 1.66%(e) 1.66% 1.66% 1.71% 1.71% 1.16%
Expenses, before waivers/reimbursements 1.89%(e) 2.00% 2.09% 2.15% 2.17% 2.16%
Net investment income, net of waivers/
reimbursements 3.89%(e) 4.39% 4.72% 4.69% 5.09% 5.01%
Portfolio turnover rate 23% 70% 85% 185% 114% 156%
</TABLE>
See footnote summary on page 63.
59
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 C
------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
MARCH 31, 1999 ---------------------------------------------------------------
(UNAUDITED) 1998 1997 1996 1995 1994
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $10.66 $10.33 $ 9.86 $ 9.65 $ 9.18 $10.24
INCOME FROM INVESTMENT OPERATIONS
Net investment income (b) .20(c) .46(c) .47(c) .46(c) .47 .49
Net realized and unrealized gain (loss) on
investment transactions (.07) .34 .49 .24 .49 (1.05)
Net increase (decrease) in net asset value
from operations .13 .80 .96 .70 .96 (.56)
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.23) (.46) (.47) (.46) (.47) (.49)
Distributions in excess of net
investment income -0- (.01) (.02) (.03) (.02) -0-
Distributions from net realized gains -0- -0- -0- -0- -0- (.01)
Total dividends and distributions (.23) (.47) (.49) (.49) (.49) (.50)
Net asset value, end of period $10.56 $10.66 $10.33 $ 9.86 $ 9.65 $ 9.18
TOTAL RETURN
Total investment return based on net
asset value (d) 1.24% 7.98% 9.95% 7.37% 10.78% (5.63)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $24,032 $17,531 $15,486 $13,996 $15,052 $18,198
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 1.65%(e) 1.65% 1.65% 1.70% 1.70% 1.15%
Expenses, before waivers/reimbursements 1.90%(e) 1.99% 2.10% 2.14% 2.17% 2.15%
Net investment income, net of waivers/
reimbursements 3.89%(e) 4.41% 4.73% 4.69% 5.09% 4.99%
Portfolio turnover rate 23% 70% 85% 185% 114% 156%
</TABLE>
See footnote summary on page 63.
60
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
Selected Data For A Share Of Beneficial Interest Outstanding Throughout Each
Period
<TABLE>
<CAPTION>
VIRGINIA PORTFOLIO
------------------------------------------------------------------------------
CLASS A
------------------------------------------------------------------------------
SIX MONTHS APRIL 29, 1994(A)
ENDED YEAR ENDED SEPTEMBER 30, TO
MARCH 31, 1999 -------------------------------------------------- SEPTEMBER 30,
(UNAUDITED) 1998 1997 1996 1995 1994
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $11.02 $10.90 $10.58 $10.29 $ 9.69 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (b) .25(c) .52(c) .57(c) .57(c) .56 .24
Net realized and unrealized gain (loss) on
investment transactions (.11) .49 .57 .37 .61 (.31)
Net increase (decrease) in net asset value
from operations .14 1.01 1.14 .94 1.17 (.07)
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.28) (.52) (.57) (.57) (.56) (.24)
Distributions in excess of net
investment income -0- (.05) -0- -0- (.01) -0-
Distributions from net realized gains (.03) (.32) (.25) (.08) -0- -0-
Total dividends and distributions (.31) (.89) (.82) (.65) (.57) (.24)
Net asset value, end of period $10.85 $11.02 $10.90 $10.58 $10.29 $ 9.69
TOTAL RETURN
Total investment return based on net
asset value (d) 1.32% 9.65% 11.32% 9.39% 12.46% (.71)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $17,101 $10,315 $3,530 $2,455 $1,855 $1,249
Ratio to average net assets of:
Expenses, net of waivers/reimbursements .67%(e) .67% .67% .67% .67% .57%(e)
Expenses, before waivers/reimbursements 1.54%(e) 2.09% 3.57% 5.18% 8.96% 12.29%(e)
Net investment income, net of waivers/
reimbursements 4.57%(e) 4.84% 5.39% 5.39% 5.59% 5.62%(e)
Portfolio turnover rate 17% 62% 258% 298% 128% 65%
</TABLE>
See footnote summary on page 63.
61
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 B
------------------------------------------------------------------------------
SIX MONTHS APRIL 29, 1994(A)
ENDED YEAR ENDED SEPTEMBER 30, TO
MARCH 31, 1999 -------------------------------------------------- SEPTEMBER 30,
(UNAUDITED) 1998 1997 1996 1995 1994
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $11.01 $10.90 $10.57 $10.29 $ 9.69 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (b) .21(c) .44(c) .50(c) .50(c) .49 .22
Net realized and unrealized gain (loss) on
investment transactions (.10) .49 .58 .36 .61 (.32)
Net increase (decrease) in net asset value
from operations .11 .93 1.08 .86 1.10 (.10)
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.25) (.44) (.50) (.50) (.49) (.21)
Distributions in excess of net
investment income -0- (.06) -0- -0- (.01) -0-
Distributions from net realized gains (.03) (.32) (.25) (.08) -0- -0-
Total dividends and distributions (.28) (.82) (.75) (.58) (.50) (.21)
Net asset value, end of period $10.84 $11.01 $10.90 $10.57 $10.29 $ 9.69
TOTAL RETURN
Total investment return based on net
asset value (d) .99% 8.85% 10.70% 8.57% 11.67% (1.01)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $29,841 $15,973 $5,020 $3,345 $1,193 $224
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 1.37%(e) 1.37% 1.37% 1.37% 1.37% 1.27%(e)
Expenses, before waivers/reimbursements 2.25%(e) 2.84% 4.29% 5.88% 9.66% 12.99%(e)
Net investment income, net of waivers/
reimbursements 3.88%(e) 4.14% 4.68% 4.70% 4.80% 4.97%(e)
Portfolio turnover rate 17% 62% 258% 298% 128% 65%
</TABLE>
See footnote summary on page 63.
62
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
PERIOD
<TABLE>
<CAPTION>
VIRGINIA PORTFOLIO
------------------------------------------------------------------------------
CLASS C
------------------------------------------------------------------------------
SIX MONTHS APRIL 29, 1994(A)
ENDED YEAR ENDED SEPTEMBER 30, TO
MARCH 31, 1999 -------------------------------------------------- SEPTEMBER 30,
(UNAUDITED) 1998 1997 1996 1995 1994
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $11.01 $10.90 $10.57 $10.29 $ 9.70 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (b) .21(c) .44(c) .50(c) .50(c) .49 .21
Net realized and unrealized gain (loss) on
investment transactions (.10) .49 .58 .36 .60 (.30)
Net increase (decrease) in net asset value
from operations .11 .93 1.08 .86 1.09 (.09)
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.25) (.44) (.50) (.50) (.49) (.21)
Distributions in excess of net
investment income -0- (.06) -0- -0- (.01) -0-
Distributions from net realized gains (.03) (.32) (.25) (.08) -0- -0-
Total dividends and distributions (.28) (.82) (.75) (.58) (.50) (.21)
Net asset value, end of period $10.84 $11.01 $10.90 $10.57 $10.29 $ 9.70
TOTAL RETURN
Total investment return based on net
asset value (d) .99% 8.85% 10.70% 8.58% 11.56% (.91)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $8,876 $4,597 $1,207 $642 $122 $43
Ratio to average net assets of:
Expenses, net of waivers/reimbursements 1.37%(e) 1.37% 1.37% 1.37% 1.37% 1.27%(e)
Expenses, before waivers/reimbursements 2.25%(e) 2.85% 4.25% 5.88% 9.66% 12.99%(e)
Net investment income, net of waivers/
reimbursements 3.87%(e) 4.11% 4.66% 4.73% 4.81% 4.67%(e)
Portfolio turnover rate 17% 62% 258% 298% 128% 65%
</TABLE>
(a) Commencement of operations.
(b) Net of fee waived and expenses reimbursed by the Adviser.
(c) Based on average shares.
(d) 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.
(e) Annualized.
63
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
BOARD OF TRUSTEES
JOHN D. CARIFA, CHAIRMAN AND PRESIDENT
RUTH BLOCK (1)
DAVID H. DIEVLER (1)
JOHN H. DOBKIN (1)
WILLIAM H. FOULK, JR. (1)
DR. JAMES M. HESTER (1)
CLIFFORD L. MICHEL (1)
DONALD J. ROBINSON (1)
OFFICERS
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
One 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 LLP
One Battery Park Plaza
New York, NY 10004
INDEPENDENT AUDITORS
ERNST & YOUNG LLP
787 Seventh Avenue
New York, NY 10019
TRANSFER AGENT
ALLIANCE FUND SERVICES, INC.
P.O. Box 1520
Secaucus, NJ 07096-1520
Toll-free 1-(800) 221-5672
(1) Member of the Audit Committee.
64
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 High Yield Fund
Alliance Mortgage Securities Income Fund
Alliance Limited Maturity Government Fund
Alliance Multi-Market Strategy Trust
Alliance North American Government Income Trust
Alliance Short-Term U.S. Government Fund
TAX-FREE INCOME
Alliance Municipal Income Fund
California Portfolio
Insured California Portfolio
Insured National Portfolio
National Portfolio
New York Portfolio
Alliance Municipal Income Fund II
Arizona Portfolio
Florida Portfolio
Massachusetts Portfolio
Michigan Portfolio
Minnesota Portfolio
New Jersey Portfolio
Ohio Portfolio
Pennsylvania Portfolio
Virginia Portfolio
MONEY MARKET
AFD Exchange Reserves
GROWTH
The Alliance Fund
Alliance Global Environment Fund
Alliance Growth Fund
Alliance Premier Growth Fund
Select Investors Series - Premier Portfolio
GROWTH & INCOME
Alliance Balanced Shares
Alliance Conservative Investors Fund
Alliance Growth & Income Fund
Alliance Growth Investors Fund
Alliance Real Estate Investment Fund
Alliance Utility Income Fund
AGGRESSIVE GROWTH
Alliance Global Small Cap Fund
Alliance Quasar Fund
Alliance Technology Fund
INTERNATIONAL
Alliance All-Asia Investment Fund
Alliance Greater China '97 Fund
Alliance International Fund
Alliance International Premier Growth Fund
Alliance New Europe Fund
Alliance Worldwide Privatization Fund
INSTITUTIONAL
Premier Growth
Quasar
Real Estate Investment
CLOSED-END FUNDS
Alliance All-Market Advantage Fund
ACM Government Income Fund
ACM Government Opportunity Fund
ACM Government Securities Fund
ACM Government Spectrum Fund
ACM Managed Dollar Income Fund
ACM Managed Income Fund
ACM Municipal Securities Income Fund
Alliance World Dollar Government Fund
Alliance World Dollar Government Fund II
The Austria Fund
The Korean Investment Fund
The Spain Fund
The Southern Africa Fund
CASH MANAGEMENT SERVICES
Alliance Capital Reserves
Alliance Government Reserves
Alliance Institutional Reserves
Prime Portfolio
Government Portfolio
Tax-Free Portfolio
Treasury Portfolio
Trust Portfolio
Alliance Insured Account
Alliance Money Reserves
Alliance Municipal Trust
California Portfolio
Connecticut Portfolio
Florida Portfolio
General Portfolio
Massachusetts Portfolio
New Jersey Portfolio
New York Portfolio
Virginia Portfolio
Alliance Treasury Reserves
Alliance Money Market Fund
Prime Portfolio
General Municipal Portfolio
Government Portfolio
65
ALLIANCE MUNICIPAL INCOME FUND II
1345 Avenue of the Americas
New York, NY 10105
(800) 221-5672
ALLIANCE CAPITAL
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
