ALLIANCE MUNICIPAL INCOME FUND II
ANNUAL REPORT
SEPTEMBER 30, 1999
ALLIANCE CAPITAL
LETTER TO SHAREHOLDERS ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
November 10, 1999
Dear Shareholder:
We are pleased to report municipal market activity and investment results for
Alliance Municipal Income Fund II's twelve-month fiscal reporting period ending
September 30, 1999.
ALLIANCE MUNICIPAL INCOME FUND II--CLASS A SHARES
Period Ended September 30, 1999
1 YEAR 1 YEAR 3 YEAR 5 YEAR OVERALL
FUND PORTFOLIO LIPPER LIPPER LIPPER MORNINGSTAR
PORTFOLIO TOTAL RETURNS* RANKINGS** RANKING RANKINGS** RATINGS***
- ------------- -------------- ---------- -------- ------------ -----------
Arizona -0.45% 1/38 1/36 1/22 5 stars
Florida -1.38% 4/58 2/52 1/36 5 stars
Massachusetts -1.24% 3/51 1/45 1/35 5 stars
Michigan 0.03% 2/43 1/37 1/29 5 stars
Minnesota -0.48% 1/45 1/43 1/28 4 stars
New Jersey -0.29% 3/52 1/42 1/32 5 stars
Ohio -0.70% 2/49 1/45 1/36 5 stars
Pennsylvania -2.43% 19/55 1/51 1/43 4 stars
Virginia -1.10% 2/35 1/32 1/26 5 stars
Number of Funds in Morningstar Municipal Bond Fund Category 1,611
* 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 4-6.
** LIPPER RANKINGS ARE BASED ON 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). AN INVESTOR CANNOT INVEST DIRECTLY IN AN AVERAGE.
*** MORNINGSTAR PROPRIETARY RATINGS REFLECT HISTORICAL RISK-ADJUSTED
PERFORMANCE AS OF SEPTEMBER 30, 1999. EACH PORTFOLIO'S 3- AND 5-YEAR
MORNINGSTAR RATINGS WERE: ARIZONA 5 STARS AND 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 5 STARS; OHIO 5 STARS AND
5 STARS; PENNSYLVANIA 4 STARS AND 4 STARS; VIRGINIA 5 STARS AND 5 STARS AMONG
1,611 MUNICIPAL BOND FUNDS FOR THE 3-YEAR PERIOD AND AMONG 1,241 MUNICIPAL BOND
FUNDS FOR THE 5-YEAR PERIOD. THESE RATINGS MAY CHANGE MONTHLY AND ARE
CALCULATED FROM EACH PORTFOLIO'S 3-YEAR, 5-YEAR 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 5.
MARKET OVERVIEW
Over the past year, municipal bonds performed well on a relative basis but saw
prices decline on an absolute basis. This price decline was caused by a rise in
long-term interest rates as a result of tremendous growth in the US economy.
This rise in rates was not unexpected, however, given the cyclical nature of
financial markets. On a relative basis, the municipal bond market performed
well compared to the taxable fixed-income markets. Municipal yields began the
year at parity with comparable Treasury bond yields, which is historically
uncommon due to the tax-advantaged nature of municipal bonds. Over the course
of the year, the yield ratio of municipals to Treasuries declined from parity
to approximately 95% of long-term Treasury bond yields. As a result, the total
return of most municipal indexes was well ahead of other
1
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
comparable benchmarks as of September 30, 1999 on an absolute basis as well as
a tax-adjusted basis.
We attribute the strength in the municipal bond market relative to Treasuries
to two factors. First, new issuance of municipal bonds was down roughly 20% on
a year-over-year basis, primarily due to the rising-rate environment making it
less attractive for issuers to refinance outstanding bonds. Second, demand for
municipals has been very strong, as investors are attracted to the high
taxable-equivalent yields of both bond funds and individual securities. Market
participants attribute this strong demand to the changing savings needs of
maturing baby boomers, and to reinvestment of gains from surging equity markets
into municipal bonds. This strong demand has been somewhat offset by pockets of
selling in the market, particularly from insurance companies raising cash to
pay catastrophe-related claims. Additional selling came from certain
institutional investors who do not benefit from the tax-free benefit of
municipal bonds but had purchased them as a total-return strategy when yield
ratios were at parity with Treasury bonds.
Credit fundamentals within the municipal market continue to be strong with most
investment sectors showing improved credit quality. State and local governments
are in excellent financial condition, in most cases, due to strong local
economies that have generated increased sales tax and personal income tax
collections. The only area of weakness has been in the corporate-backed
tax-exempt sector. This sector has experienced a number of downgrades primarily
due to merger activity. Most of the issues affected have been older bonds with
relatively high coupons and short-dated call features, which minimizes the
negative price impact resulting from ratings downgrades. Merger activity and
credit-quality activity also affected the health care sector, but unlike the
corporate-backed market, these securities received credit upgrades or in some
cases outstanding bonds were called. Bonds receiving upgrades were either
pre-refunded to a specific call date or escrowed to maturity. These upgrades
created positive price appreciation in an otherwise weak market.
INVESTMENT STRATEGY
At Alliance, we are value-oriented municipal bond investors. Because we take a
longer-term view of interest rate and credit cycles, we see the recent rise in
interest rates as an excellent opportunity to reposition our portfolios. Our
repositioning strategy, similar to the repositioning we conducted in 1994 and
1995, has been to sell our older, higher coupon bonds that are subject to calls
within the next five years or less, and to purchase new bonds with attractive
coupons and ten-year call protection. In addition, we are investing cash
positions accumulated over the past year in longer-maturity issues, which we
believe offer good value in the current rate environment. This repositioning
program will help us to maintain the highest possible distribution rates going
forward and, at the same time, minimize long-term reinvestment risk consistent
with the objectives and guidelines of the Fund. We are also continuing to reap
the benefits of the pre-refunding of certain obligations held by the Fund,
which we typically sell when the full benefit of credit-quality improvement can
be realized by selling the securities. This portfolio repositioning, in
addition to helping us maintain the highest possible distribution rates, allows
us to prepare for the next phase of the interest rate cycle.
MARKET OUTLOOK
During the fourth quarter we expect that the fixed-income market in general and
the municipal bond market in particular will be in a period of uncertainty. In
addition to the usual concerns of changes in credit quality, supply factors,
and the overall direction of long-term interest rates, the unknown impact of
Y2K on financial markets will create an atmosphere of uncertainty and caution
for this calendar year-end. We view this phenomenon as temporary, and we
believe that any resulting market weakness will create an excellent buying
opportunity.
2
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
The Alliance Municipal Income team is proud of the strong relative performance
we have delivered in fiscal year 1999 and our excellent long-term investment
record. We look forward to the opportunity to continue to serve our
shareholders over the next year.
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.
3
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 TWELVE MONTHS
The Portfolios' Class A share total returns at net asset value (NAV) for the
twelve-month period ended September 30, 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
one-, three- and five-year periods ended September 30, 1999. Current yields and
returns for Class A, Class B and Class C shares are on the next two pages.
MUNICIPAL INCOME FUND II--CLASS A SHARES COMPARED TO LIPPER MUNICIPAL DEBT
FUNDS AVERAGE*
Period Ended September 30, 1999
<TABLE>
<CAPTION>
FUND PORTFOLIO
TOTAL RETURNS LIPPER LIPPER LIPPER
(AT NAV) AVERAGE AVERAGE AVERAGE
PORTFOLIO 12 MONTHS 12 MONTHS 3 YEARS 5 YEARS
- ----------------------------------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Arizona -0.45% -2.30% 4.55% 5.97%
Florida -1.38% -2.85% 4.35% 5.88%
Massachusetts -1.24% -2.86% 4.31% 5.79%
Michigan 0.03% -2.70% 4.29% 5.74%
Minnesota -0.48% -2.22% 4.34% 5.62%
New Jersey -0.29% -2.53% 4.40% 5.72%
Ohio -0.70% -2.36% 4.43% 5.80%
Pennsylvania -2.43% -2.81% 4.34% 5.72%
Virginia -1.10% -2.24% 4.69% 6.16%
</TABLE>
* TOTAL RETURNS FOR THE FUND'S PORTFOLIOS ARE BASED ON THE NET ASSET VALUE OF
CLASS A SHARES AS OF SEPTEMBER 30, 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.
4
INVESTMENT RESULTS
AS OF SEPTEMBER 30, 1999 ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
<TABLE>
<CAPTION>
NAV AND SEC TOTAL RETURNS
------------------------------------------------------------------------------
WITHOUT SALES CHARGES WITH SALES CHARGES
----------------------------------- ------------------------------------
1 5 SINCE 1 5 SINCE
YEAR YEARS INCEPTION YEAR YEARS INCEPTION
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
ARIZONA PORTFOLIO
Class A -0.45% 7.51% 6.96% -4.68% 6.59% 6.10%
Class B -1.19% 6.78% 6.23% -4.01% 6.78% 6.23%
Class C -1.19% 6.78% 6.23% -2.13% 6.78% 6.23%
FLORIDA PORTFOLIO
Class A -1.38% 7.80% 5.43% -5.61% 6.87% 4.71%
Class B -2.06% 7.02% 4.71% (a) -4.87% 7.02% 4.71% (a)
Class C -2.06% 7.02% 4.67% -3.00% 7.02% 4.67%
MASSACHUSETTS PORTFOLIO
Class A -1.24% 7.80% 7.84% -5.47% 6.87% 7.00%
Class B -1.87% 7.07% 7.12% -4.68% 7.07% 7.12%
Class C -1.87% 7.08% 7.12% -2.81% 7.08% 7.12%
MICHIGAN PORTFOLIO
Class A 0.03% 8.31% 6.76% -4.21% 7.36% 5.94%
Class B -0.64% 7.55% 6.01% -3.48% 7.55% 6.01%
Class C -0.64% 7.55% 6.01% -1.59% 7.55% 6.01%
MINNESOTA PORTFOLIO
Class A -0.48% 6.72% 5.12% -4.68% 5.80% 4.40%
Class B -1.19% 5.96% 4.36% (a) -4.03% 5.96% 4.36% (a)
Class C -1.19% 5.94% 4.35% -2.14% 5.94% 4.35%
NEW JERSEY PORTFOLIO
Class A -0.29% 7.42% 5.43% -4.49% 6.50% 4.71%
Class B -0.99% 6.63% 4.71% (a) -3.84% 6.63% 4.71% (a)
Class C -0.99% 6.63% 4.67% -1.94% 6.63% 4.67%
OHIO PORTFOLIO
Class A -0.70% 7.41% 5.43% -4.88% 6.49% 4.71%
Class B -1.38% 6.64% 4.69% (a) -4.21% 6.64% 4.69% (a)
Class C -1.38% 6.64% 4.67% -2.33% 6.64% 4.67%
PENNSYLVANIA PORTFOLIO
Class A -2.43% 7.24% 5.55% -6.55% 6.31% 4.82%
Class B -3.10% 6.47% 4.82% (a) -5.88% 6.47% 4.82% (a)
Class C -3.10% 6.47% 4.79% -4.03% 6.47% 4.79%
VIRGINIA PORTFOLIO
Class A -1.10% 8.23% 7.43% -5.30% 7.29% 6.58%
Class B -1.73% 7.50% 6.70% -4.54% 7.50% 6.70%
Class C -1.73% 7.48% 6.70% -2.67% 7.48% 6.70%
</TABLE>
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.
5
(a) Assumes conversion of Class B shares into Class A shares after six years.
INVESTMENT RESULTS
AS OF SEPTEMBER 30, 1999 ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
TAXABLE-
EQUIVALENT
YIELD IN
30 DAY 36% TAX BRACKET
PORTFOLIO SEC YIELD* (AT NAV)**
- --------- ---------- ---------------
ARIZONA
Class A 4.83% 8.65%
Class B 4.35% 7.55%
Class C 4.35% 7.55%
FLORIDA
Class A 5.03% 8.39%
Class B 4.56% 7.25%
Class C 4.56% 7.25%
MASSACHUSETTS
Class A 5.13% 8.64%
Class B 4.66% 7.53%
Class C 4.66% 7.53%
MICHIGAN
Class A 4.63% 8.09%
Class B 4.14% 6.96%
Class C 4.14% 6.96%
MINNESOTA
Class A 5.08% 8.97%
Class B 4.58% 7.70%
Class C 4.60% 7.70%
NEW JERSEY
Class A 4.78% 8.34%
Class B 4.27% 7.13%
Class C 4.29% 7.13%
OHIO
Class A 4.75% 8.72%
Class B 4.24% 7.51%
Class C 4.25% 7.51%
PENNSYLVANIA
Class A 4.82% 8.39%
Class B 4.32% 7.22%
Class C 4.33% 7.22%
VIRGINIA
Class A 5.02% 8.85%
Class B 4.55% 7.74%
Class C 4.55% 7.74%
* SEC yields are based on SEC guidelines and are calculated on 30 days ended
September 30, 1999.
** The Taxable-Equivalent Yield Is Based On NAV And A 36% Marginal Federal
Income Tax Rate And Maximum State, City And Local Taxes, Where Applicable.
6
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
ALLIANCE MUNICIPAL INCOME FUND II
GROWTH OF A $10,000 INVESTMENT
ARIZONA PORTFOLIO
6/30/94 TO 9/30/99
$14,000
$13,000
$12,000
$11,000
$10,000
$9,000
ARIZONA PORTFOLIO CLASS A AT NAV: $14,397
ARIZONA PORTFOLIO CLASS A AT OFFERING: $13,783
LIPPER AZ MUNI FUNDS AVERAGE: $13,423
6/30/94 9/30/94 9/30/95 9/30/96 9/30/97 9/30/98 9/30/99
FLORIDA PORTFOLIO
6/30/93 TO 9/30/99
$14,000
$13,000
$12,000
$11,000
$10,000
$9,000
FLORIDA PORTFOLIO CLASS A AT NAV: $13,934
FLORIDA PORTFOLIO CLASS A AT OFFERING: $13,347
LIPPER FL MUNI FUNDS AVERAGE: $13,151
6/30/93 9/30/93 9/30/94 9/30/95 9/30/96 9/30/97 9/30/98 9/30/99
MASSACHUSETTS PORTFOLIO
3/31/94 TO 9/30/99
$15,000
$14,000
$13,000
$12,000
$11,000
$10,000
$9,000
MASSACHUSETTS PORTFOLIO CLASS A AT NAV: $15,160
MASSACHUSETTS PORTFOLIO CLASS A AT OFFERING: $14,521
LIPPER MA MUNI FUNDS AVERAGE: $13,394
3/31/94 9/30/94 9/30/95 9/30/96 9/30/97 9/30/98 9/30/99
7
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
ALLIANCE MUNICIPAL INCOME FUND II
GROWTH OF A $10,000 INVESTMENT
MICHIGAN PORTFOLIO
2/28/94 TO 9/30/99
$14,000
$13,000
$12,000
$11,000
$10,000
$9,000
MICHIGAN PORTFOLIO CLASS A AT NAV: $14,422
MICHIGAN PORTFOLIO CLASS A AT OFFERING: $13,814
LIPPER MI MUNI FUNDS AVERAGE: $12,801
2/28/94 9/30/94 9/30/95 9/30/96 9/30/97 9/30/98 9/30/99
MINNESOTA PORTFOLIO
6/30/93 TO 9/30/99
$14,000
$13,000
$12,000
$11,000
$10,000
$9,000
MINNESOTA PORTFOLIO CLASS A AT NAV: $13,673
LIPPER MN MUNI FUNDS AVERAGE: $13,153
MINNESOTA PORTFOLIO CLASS A AT OFFERING: $13,097
6/30/93 9/30/93 9/30/94 9/30/95 9/30/96 9/30/97 9/30/98 9/30/99
NEW JERSEY PORTFOLIO
6/30/93 TO 9/30/99
$14,000
$13,000
$12,000
$11,000
$10,000
$9,000
NEW JERSEY PORTFOLIO CLASS A AT NAV: $13,933
NEW JERSEY PORTFOLIO CLASS A AT OFFERING: $13,346
LIPPER NJ MUNI FUNDS AVERAGE: $13,152
6/30/93 9/30/93 9/30/94 9/30/95 9/30/96 9/30/97 9/30/98 9/30/99
8
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
ALLIANCE MUNICIPAL INCOME FUND II
GROWTH OF A $10,000 INVESTMENT
OHIO PORTFOLIO
6/30/93 TO 9/30/99
$14,000
$13,000
$12,000
$11,000
$10,000
$9,000
OHIO PORTFOLIO CLASS A AT NAV: $13,934
OHIO PORTFOLIO CLASS A AT OFFERING: $13,347
LIPPER OH MUNI FUNDS AVERAGE: $13,271
6/30/93 9/30/93 9/30/94 9/30/95 9/30/96 9/30/97 9/30/98 9/30/99
PENNSYLVANIA PORTFOLIO
6/30/93 TO 9/30/99
$14,000
$13,000
$12,000
$11,000
$10,000
$9,000
PENNSYLVANIA PORTFOLIO CLASS A AT NAV: $14,029
PENNSYLVANIA PORTFOLIO CLASS A AT OFFERING: $13,437
LIPPER PA MUNI FUNDS AVERAGE: $13,189
6/30/93 9/30/93 9/30/94 9/30/95 9/30/96 9/30/97 9/30/98 9/30/99
9
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
ALLIANCE MUNICIPAL INCOME FUND II
GROWTH OF A $10,000 INVESTMENT
VIRGINIA PORTFOLIO
4/30/94 TO 9/30/99
$15,000
$14,000
$13,000
$12,000
$11,000
$10,000
$9,000
VIRGINIA PORTFOLIO CLASS A AT NAV: $14,745
VIRGINIA PORTFOLIO CLASS A AT OFFERING: $14,123
LIPPER VA MUNI FUNDS AVERAGE: $13,526
4/30/94 9/30/94 9/30/95 9/30/96 9/30/97 9/30/98 9/30/99
Each chart illustrates the total value of an assumed $10,000 investment in each
of Alliance Municipal Income Fund II's Class A shares (since the month-end
closest to each Portfolio's inception). The charts reflect the deduction of the
maximum 4.25% sales charges from initial $10,000 investments and assume the
reinvestment of dividends and capital gains. Performance at NAV (net asset
value) does not reflect sales charges, which reduce total return figures.
Performance for Class B and Class C shares will vary from the results shown in
these illustrations due to differences in expenses charged to those classes.
Past performance is not indicative of future results, and is not representative
of future gain or loss in capital value or dividend income.
The Lipper Arizona Municipal Debt Funds Average reflects performance of 22
funds; the Lipper Florida Municipal Debt Funds Average reflects performance of
25 funds; the Lipper Massachusetts Municipal Debt Funds Average reflects
performance of 34 funds; the Lipper Michigan Municipal Debt Funds Average
reflects performance of 30 funds; the Lipper Minnesota Municipal Debt Funds
Average reflects performance of 22 funds; the Lipper New Jersey Municipal Debt
Funds Average reflects performance of 26 funds; the Lipper Ohio Municipal Debt
Funds Average reflects performance of 28 funds; the Lipper Pennsylvania
Municipal Debt Funds Average reflects performance of 35 funds; and the Lipper
Virginia Municipal Debt Funds Average reflects performance of 26 funds. The
funds tracked by Lipper Inc. have generally similar investment objectives to
the applicable Alliance Municipal Income Fund II Portfolios, although some of
the funds may have investment policies that are somewhat different than those
of Alliance Municipal Income Fund II.
When comparing an Alliance Municipal Income Fund IIPortfolio to the
corresponding Lipper Average, you should note that the Portfolio's performance
reflects the maximum sales charge of 4.25%, while no such sales charges are
reflected in the performance of the Lipper Averages.
Alliance Portfolio
Lipper Average
10
ARIZONA PORTFOLIO
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1999 ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS (A) (000) VALUE
- -------------------------------------------------------------------------------
MUNICIPAL BONDS-94.9%
ARIZONA-88.3%
Aaa Arizona Student Loan
Acquisition Authority
(Student Loan Rev)
Ser 99B-2 AMT
5.90%, 5/01/24 (b) $ 1,500 $ 1,492,215
AAA Glendale IDR
(Midwestern Univ)
Connie Lee Ser 96A
6.00%, 5/15/26 475 490,756
AAA Glendale IDR
(Midwestern Univ)
Connie Lee Ser 96A,
Pre-refunded
6.00%, 5/15/06 1,025 1,116,215
NR Goodyear Assessment District # 1
Ser 96C
7.25%, 7/01/16 4,652 5,040,395
NR Goodyear Dev Auth
Water & Sewer Rev
(Litchfield Pk Svc Proj)
Ser 99 AMT
5.95%, 10/01/23 3,160 2,990,498
NR Hassayampa Cmnty Fac
Dist Spec Assessment Lien
Ser 96
7.75%, 7/01/21 6,795 7,488,702
AAA Maricopa Cnty GO
School Dist No. 28
(Kyrene Elem)
FGIC Ser 95B
6.00%, 7/01/14 2,000 2,056,120
AAA Maricopa Cnty Hosp Rev
(Catholic Healthcare West)
MBIA Ser 93
7.45%, 7/01/13 (c) 2,700 2,737,881
A+ Maricopa Cnty IDR
(Citizens Utilities)
Ser 95 AMT
6.20%, 5/01/30 8,550 8,649,607
AAA Maricopa Cnty MFHR
(Mesa Ridge Apts Proj)
MBIA Ser 99A
5.15%, 7/01/29 1,250 1,132,112
AAA Maricopa Cnty MFHR
(Shadow Creek Apts Proj)
FNMA Ser 98C AMT
5.20%, 12/15/21 4,100 3,838,420
AAA Mesa Cnty Health Care Fac
(Discovery Hlth Sys)
MBIA Ser 99A
5.75%, 1/01/25 7,000 6,953,170
AAA Mesa Cnty Health Care Fac
(Lutheran Hlth Sys)
MBIA Ser 98A
5.00%, 1/01/19 4,000 3,653,200
AAA Mohave Cnty IDR
(Cargill/North Star Steel)
Ser 95A AMT
6.70%, 3/01/20 2,500 2,713,700
AAA Mohave Cnty MFHR
(Chris Ridge & Silver)
GNMA Ser 96
6.375%, 11/01/31 1,000 1,038,960
AAA Phoenix Arpt Rev
(Sky Harbor/Goodyear/Deer Valley)
MBIA Ser 94D AMT
6.30%, 7/01/10 1,795 1,926,915
AA+ Phoenix Excise Tax Rev
(Civic Plaza Bldg Corp)
Sr Lien Ser 94
6.00%, 7/01/12 1,015 1,061,741
AA Phoenix MFHR
(Woodstone & Silver Springs)
Asset Gty Ser 93
6.25%, 4/01/23 3,000 3,084,210
AAA Pima Cnty SFMR
GNMA/FNMA/FHLMC
Ser 97A AMT
6.25%, 11/01/30 2,195 2,245,616
AAA Pima Cnty SFMR
GNMA/FNMA/FHLMC
Ser 99A AMT
5.20%, 5/01/31 3,500 3,150,805
NR Scottsdale GO Comm Fac
(McDowell Ranch)
Ser 97, Pre-refunded
6.50%, 7/15/07 2,000 2,228,040
11
ARIZONA PORTFOLIO
PORTFOLIO OF INVESTMENTS
(CONTINUED)
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS (A) (000) VALUE
- -------------------------------------------------------------------------------
AAA Tempe MFHR
(Quadrangles)
FHA Ser 93
6.25%, 6/01/26 $1,615 $ 1,661,366
AAA Yuma MFHR
(Alexandrite Sands Apts)
FHA Ser 90 AMT
7.70%, 12/01/29 3,000 3,074,610
------------
69,825,254
PUERTO RICO-6.6%
AAA Puerto Rico Hsg Fin
Corp Rev
SFMR GNMA
Ser 98A AMT
5.20%, 12/01/32 4,200 3,779,454
BBB- Puerto Rico Port Auth
(American Airlines)
Ser 96A AMT
6.25%, 6/01/26 1,400 1,414,756
------------
5,194,210
TOTAL INVESTMENTS-94.9%
(cost $74,571,422) $ 75,019,464
Other assets less liabilities-5.1% 4,062,273
NET ASSETS-100% $ 79,081,737
See footnote summary on page 25.
See Glossary of Terms on page 25.
See notes to financial statements.
12
FLORIDA PORTFOLIO
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1999 ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS (A) (000) VALUE
- -------------------------------------------------------------------------------
MUNICIPAL BONDS-98.2%
FLORIDA-90.1%
Aaa Brevard Cnty Hsg Fin Auth
SFMR GNMA Ser 94 AMT
6.70%, 9/01/27 (b) $ 4,140 $ 4,285,024
A Broward Cnty Hsg Fin Auth
MFHR
(Bridgewater Place Apts)
Ser 99A AMT
5.50%, 4/01/41 5,640 5,170,470
NR Collier Cnty Cmnty Dev Dist
(Fiddlers Creek) Ser 96
7.50%, 5/01/18 18,865 20,088,584
A Collier Cnty Cmnty Dev Dist
(Fiddlers Creek)
Ser 99B
5.80%, 5/01/21 (d) 7,940 7,665,117
BBB+ Collier Cnty Hlth Fac
(The Moorings) Ser 94
7.00%, 12/01/19 2,000 2,144,480
A Collier Cnty Hsg Fin Auth
MFHR
(Whistlers Green Apts)
Ser 99A AMT
5.45%, 6/01/39 5,040 4,628,938
A3 Dade Cnty
(Courthouse Ctr Proj)
Ser 95, Pre-refunded
6.10%, 4/01/05 (b) 3,000 3,262,830
AAA Dade Cnty Aviation Rev
(Miami Int'l)
MBIA Ser 95B AMT
6.00%, 10/01/24 9,730 10,003,024
NR Dade Cnty Hsg Fin Auth
(Golden Lakes Apts)
Ser 97A AMT
6.00%, 11/01/32 250 249,985
NR Dade Cnty Hsg Fin Auth
(Golden Lakes Apts)
Ser 97A AMT
6.05%, 11/01/39 750 752,198
Aaa Duval Cnty Hsg Fin Auth
SFMR Ser 99 AMT
5.30%, 4/01/29 (b) 6,000 5,476,260
AAA Escambia Cnty Hsg Fin Auth
SFMR GNMA/FNMA
Ser 95B AMT
6.25%, 4/01/28 11,500 11,729,540
Aaa Escambia Cnty Hsg Fin Auth
SFMR MBIA Ser 99 AMT
5.20%, 4/01/32 (b) 5,000 4,489,800
Baa1 Escambia Cnty PCR
(Champion Int'l Corp)
Ser 96 AMT
6.40%, 9/01/30 (b) 5,000 5,070,700
AAA Florida Hsg Fin Agy MFHR
(Brittany of Rosemont)
AMBAC Ser 95G AMT
6.25%, 7/01/35 1,350 1,390,176
AAA Florida Hsg Fin Agy MFHR
(Landings at Boot Ranch)
AMBAC Ser 95K AMT
6.10%, 11/01/35 2,050 2,089,729
AAA Florida Hsg Fin Agy MFHR
(Turtle Creek Apts)
AMBAC Ser 96C AMT
6.20%, 5/01/36 3,245 3,329,532
AAA Florida Hsg Fin Agy
SFMR GNMA/FNMA
Ser 94B AMT
6.65%, 7/01/26 3,600 3,713,652
AAA Florida Hsg Fin Agy
SFMR GNMA/FNMA
Ser 95A AMT
6.65%, 1/01/24 6,675 6,918,037
AAA Florida Hsg Fin Corp MFHR
(Crossing at Univ Apts)
AMBAC Ser 98Q-1 AMT
5.25%, 12/01/38 6,545 5,934,155
AAA Florida Hsg Fin Corp MFHR
(Logans Pointe Apts)
FSA Ser 99F-1 AMT
6.00%, 6/01/39 6,630 6,776,987
Aaa Florida Hsg Fin Corp MFHR
(Waterbridge Apts) MBIA
Ser 98R-1 AMT
5.20%, 2/01/32 (b) 1,540 1,403,571
A Florida Hsg Fin Corp MFHR
(Wentworth II Apts)
Ser 99A AMT
5.40%, 11/01/34 3,055 2,808,584
AAA Greater Orlando Aviation Auth
Orlando Arpt Facs Rev
FGIC Ser 99A AMT
5.13%, 10/01/28 6,000 5,419,260
13
FLORIDA PORTFOLIO
PORTFOLIO OF INVESTMENTS
(CONTINUED) ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS (A) (000) VALUE
- -------------------------------------------------------------------------------
AAA Hillsborough Cnty Aviation Auth
(Tampa Int'l Arpt)
FGIC Ser 96A AMT
6.00%, 10/01/23 $ 1,500 $ 1,551,540
AAA Jacksonville Wtr & Swr Rev
(United Wtr Proj)
AMBAC Ser 95 AMT
6.35%, 8/01/25 1,500 1,575,165
NR Lee Cnty Comm Fac Dist
(Herons Glen Recreational Dist)
Ser 99
5.90%, 5/01/19 5,380 5,269,764
Aaa Manatee Cnty Hsg Fin Auth
SFMR GNMA Ser 99 AMT
6.25%, 11/01/28 (b) 3,015 3,179,378
A Miami-Dade Cnty Hsg
Fin Auth
(Cntry Club Villas Apts)
Ser 99A AMT
6.20%, 10/01/39 5,145 5,114,593
AAA Miami-Dade Cnty
(Professional Sports
Franchise Fac Tax)
MBIA Ser 98
4.75%, 10/01/30 800 662,920
Aa3 North Miami Hlth Fac Auth
(Catholic Hlth Svcs
Oblig Grp) Ser 96
6.00%, 8/15/24 (b) 1,200 1,207,260
AA Orange Cnty Hlth Facs Auth Rev
(Mayflower Retirement Proj)
Asset Gty Ser 99
5.25%, 6/01/29 4,410 4,056,538
A+ Palm Beach Cnty IDR
(Lourdes McKeen Residence)
Ser 96
6.63%, 12/01/26 4,000 4,095,960
Aaa Pinellas Cnty Hsg Fin Auth
SFMR GNMA/FNMA
Ser 94A AMT
6.55%, 8/01/27 (b) 4,090 4,209,387
A Suwannee Cnty Hlth Care Facs Rev
(Advent Christian Village)
ACA Ser 99
5.25%, 4/01/24 1,300 1,175,694
Baa2 Volusia Cnty Ed Fac Auth
(Embry-Riddle Aero Univ)
Ser 99A
5.75%, 10/15/29 (b) 2,000 1,912,020
Baa2 Volusia Cnty Ed Fac Auth
(Embry-Riddle Aero Univ)
Ser 96A
6.13%, 10/15/26 (b) 7,060 7,091,346
AA Volusia Cnty Hlth Fac Auth
(John Knox Village)
Asset Gty Ser 96A
6.00%, 6/01/17 3,000 3,066,720
AAA Volusia Cnty Hlth Fin Auth
MFHR FNMA/GNMA
(Spring Arbor Apts)
Ser 98A AMT
5.25%, 8/01/31 1,955 1,783,703
------------
170,752,621
WEST VIRGINIA-8.1%
A Braxton Cnty Solid Waste
Disp Rev
(Weyerhaeuser Co Proj)
Ser 98 AMT
5.40%, 5/01/25 16,700 15,249,271
TOTAL INVESTMENTS-98.2%
(cost $186,201,910) 186,001,892
Other assets less liabilities-1.8% 3,451,434
NET ASSETS-100% $189,453,326
See footnote summary on page 25.
See Glossary of Terms on page 25.
See notes to financial statements.
14
MASSACHUSETTS PORTFOLIO
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1999 ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS (A) (000) VALUE
- -------------------------------------------------------------------------------
MUNICIPAL BONDS-95.4%
MASSACHUSETTS-90.5%
BBB- Massachusetts Dev Fin Agy
(Boston Biomedical)
Ser 99
5.75%, 2/01/29 $ 1,800 $ 1,639,206
BBB- Massachusetts Dev Fin Agy
(Eastern Nazarene)
Ser 99
5.63%, 4/01/29 2,000 1,815,160
AA Massachusetts Dev Fin Agy
(Landmark Sch)
Asset Gty Ser 99
5.25%, 6/01/29 2,815 2,516,723
BBB+ Massachusetts Dev Fin Agy
(Ogden Haverhill Proj)
Ser 98B AMT
5.50%, 12/01/19 2,735 2,573,033
AA Massachusetts Dev Fin Agy
(Seven Hills)
Asset Gty Ser 99
5.15%, 9/01/28 6,035 5,372,236
BBB Massachusetts Dev Fin Agy
(Suffolk Univ)
Ser 99
5.85%, 7/01/29 1,375 1,302,730
AA Massachusetts Dev Fin Agy
(Worcester Redev Auth)
Asset Gty Ser 99
6.00%, 6/01/24 1,300 1,316,185
BBB+ Massachusetts Dev Fin Agy
(YMCA Greater Boston)
Ser 98
5.45%, 11/01/28 1,000 911,970
AAA Massachusetts Ed Fin Auth
(Educational Loan)
AMBAC Ser 99A AMT
5.00%, 7/01/15 1,890 1,772,234
AAA Massachusetts Hlth &
Ed Fac Auth
(Beth Israel)
AMBAC Ser G-4
8.826%, 7/01/25 (c) 2,000 2,015,900
BBB Massachusetts Hlth &
Ed Fac Auth
(Caritas Christi)
Ser 99A
5.75%, 7/01/28 16,940 15,457,750
Baa3 Massachusetts Hlth &
Ed Fac Auth
(Lasell College)
Ser 99A
5.625%, 7/01/29 (b). 7,490 6,841,516
AAA Massachusetts Hlth & Ed Fac Auth
(New England Med Ctr)
MBIA Ser 94
6.73%, 7/01/18 (c) 5,000 4,544,900
AA+ Massachusetts Hlth & Ed Fac Auth
(Wellesley College)
Ser 99F
5.13%, 7/01/39 6,500 5,739,240
AAA Massachusetts Hsg Fin Agy
AMBAC Ser 93A
6.15%, 10/01/15 3,500 3,598,490
AAA Massachusetts Hsg Fin Agy
MFHR
AMBAC Ser 95E AMT
6.00%, 7/01/37 2,680 2,683,163
AAA Massachusetts Hsg Fin Agy
SFMR
FSA Ser 73 AMT
5.90%, 12/01/23 10,000 9,935,400
A3 Massachusetts Ind Fin Agy
(Brooks School)
Ser 93, Pre-refunded
5.95%, 7/01/03 (b) 2,250 2,407,095
AAA Massachusetts Ind Fin Agy
(Heights Crossing)
FHA Ser 95 AMT
6.15%, 2/01/35 7,000 7,049,070
AAA Massachusetts Muni
Wholesale Elec
Power Supply Sys Rev
MBIA Ser 92A
6.00%, 7/01/18 4,940 5,025,363
AAA Massachusetts Port Auth
(Bosfuel Corp)
MBIA Ser 97 AMT
6.00%, 7/01/36 12,460 12,476,821
15
MASSACHUSETTS PORTFOLIO
PORTFOLIO OF INVESTMENTS
(CONTINUED) ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS (A) (000) VALUE
- -------------------------------------------------------------------------------
AAA Massachusetts Port Auth Spec Fac
(US Air)
MBIA Ser 96A AMT
5.88%, 9/01/23 $ 5,600 $ 5,511,352
AA+ Massachusetts Wtr Poll Abate
(South Essex Program)
Ser 94A
6.38%, 2/01/15 3,000 3,167,760
------------
105,673,297
PUERTO RICO-4.9%
AAA Puerto Rico Hsg Fin Corp Rev
SFMR GNMA
Ser 98A AMT
5.20%, 12/01/32 6,300 5,669,181
TOTAL INVESTMENTS-95.4%
(cost $111,026,406) 111,342,478
Other assets less liabilities-4.6% 5,409,119
NET ASSETS-100% $116,751,597
See footnotes summary on page 25.
See Glossary of Terms on page 25.
See notes to financial statements.
16
MICHIGAN PORTFOLIO
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1999 ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS (A) (000) VALUE
- -------------------------------------------------------------------------------
MICHIGAN MUNICIPAL
BONDS-99.7%
AAA Detroit GO
FGIC Ser 93, Pre-refunded
6.35%, 4/01/03 $ 1,690 $ 1,792,330
BB- Detroit Local Dev Fin Auth
Daimler/Chrysler
(Jefferson North Assembly Plant)
Ser98A
5.50%, 5/01/21 7,000 6,483,680
AAA Genessee Cnty Arpt Rev
(Bishop Int'l)
AMBAC Ser 99A
5.00%, 12/01/23 1,000 889,530
AAA Grand Rapids Swr Sys
MBIA Ser 92
6.00%, 1/01/22 1,500 1,581,690
Aa2 Independence Eco
Dev Auth
(Greenery Health)
FHA Ser 97A
6.15%, 8/01/17 (b) 1,850 1,924,296
AAA Kent Cnty Arpt Fac
(Kent Cnty Int'l)
Ser 95 AMT, Pre-refunded
6.10%, 1/01/05 1,700 1,829,320
AA+ Michigan Hosp Fin Auth
(Charity Oblig Group)
Ser 99A
5.13%, 11/01/29 2,080 1,827,841
Aaa Michigan Hsg Dev Auth
MFHR/GNMA
(Arbor Pointe) Ser 99
5.40%, 6/20/40 (b) 1,810 1,663,046
AAA Michigan Hsg Dev Auth
MFHR
AMBAC Ser 97A AMT
6.10%, 10/01/33 4,680 4,737,049
AAA Michigan Hsg Dev Auth
MFHR
MBIASer 99A AMT
5.30%, 10/01/37 3,500 3,192,945
AAA Michigan Strategic Fund
(Detroit Edison)
MBIA Ser 95AA
6.40%, 9/01/25 1,690 1,795,135
A Michigan Strategic Fund
(General Motors)
Ser 95
6.20%, 9/01/20 1,715 1,803,356
NR Michigan Strategic Fund
(Holland Home)
Ser 98
5.75%, 11/15/28 2,200 1,993,354
BBB+ Romulus Tax Increment
Fin Auth Ser 94
6.75%, 11/01/19 1,585 1,649,827
AAA Three Rivers GO
MBIA Ser 96, Pre-refunded
6.00%, 5/01/06 1,400 1,509,676
AA Troy Downtown Dev
Auth Asset Gty Ser 95A
6.375%, 11/01/18 1,500 1,568,655
TOTAL INVESTMENTS-99.7%
(cost $35,916,628) 36,241,730
Other assets less liabilities-0.3% 110,242
NET ASSETS-100% $36,351,972
See footnotes summary on page 25.
See Glossary of Terms on page 25.
See notes to financial statements.
17
MINNESOTA PORTFOLIO
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1999 ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS (A) (000) VALUE
- -------------------------------------------------------------------------------
MINNESOTA MUNICIPAL
BONDS-95.4%
A Bass Brook PCR
(Minn Power & Light)
Ser 92
6.00%, 7/01/22 $ 1,680 $ 1,693,574
AAA Brooklyn Park MFHR
(Brooklyn Landing)
FNMA Ser 99A AMT
5.60%, 7/01/24 1,370 1,330,598
AAA Duluth Arpt Lease Rev
GO
Ser 95C AMT
6.25%, 8/01/14 1,570 1,639,739
A- Golden Valley Health Fac
Covenant Retmt Cmty
Ser 99A
5.50%, 12/01/29 3,750 3,388,725
A- Minneapolis Common
Bond Fund Cmnty Dev Agy
Ser 95-2 AMT
6.63%, 12/01/15 1,245 1,300,154
NR Minneapolis Hlth Fac
(Walker Methodist)
Ser 98A
6.00%, 11/15/28 5,000 4,631,850
AAA Minneapolis Spec School Dist No. 1
COP MBIA Ser 96A
5.90%, 2/01/17 1,670 1,692,662
AAA Minnesota Agric & Eco Dev
(Benedictine Health)
Ser 99A
5.13%, 2/15/29 1,000 900,080
NR Minnesota Agric & Eco Dev
(Small Business Loan Prog)
Ser 96A AMT
6.75%, 8/01/16 1,450 1,511,393
NR Minnesota Agric & Eco Dev
(Small Business Loan Prog)
Ser 96B AMT
7.00%, 8/01/16 750 773,385
Baa1 Minnesota Higher Ed Fac Auth
(Hamline Univ)
Ser 4-I
6.00%, 10/01/16 (b) 790 789,163
AA+ Minnesota Hsg Fin Agy
SFMR Ser 96G AMT
6.25%, 7/01/26 3,500 3,564,925
Aaa Minnetonka MFHR
(Archer Heights Apts)
GNMA Ser 99A AMT
5.30%, 1/20/27 (b) 1,620 1,517,940
AA+ Rochester Hosp Rev
(Mayo Med Ctr)
Ser 92H
8.07%, 11/15/15 (c) 3,000 3,151,950
BBB- So. St. Paul Hosp Rev
(Healtheast Proj)
Ser 94B
6.75%, 11/01/09 1,630 1,669,381
AAA St. Francis GO
Ind Sch Dist No. 15
FSA Ser 95A
6.38%, 2/01/16 1,000 1,078,150
Aaa St. Paul MFHR
(Wellington Proj)
FHLMC Ser 99A
5.10%, 2/01/24 (b) 1,720 1,608,527
TOTAL INVESTMENTS-95.4%
(cost $31,950,094) 32,242,196
Other assets less liabilities-4.6% 1,550,361
NET ASSETS-100% $ 33,792,557
See footnote summary on page 25.
See Glossary of Terms on page 25.
See notes to financial statements.
18
NEW JERSEY PORTFOLIO
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1999 ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS (A) (000) VALUE
- -------------------------------------------------------------------------------
MUNICIPAL BONDS-96.0%
NEW JERSEY-91.1%
AAA Essex Cnty Imp Auth Util Rev
(Orange Twp)
MBIA Ser 93
6.00%, 12/01/17 $ 2,510 $ 2,679,927
BBB- New Jersey Eco Dev
(American Airlines)
AMT
7.10%, 11/01/31 4,500 4,729,320
A+ New Jersey Eco Dev
(Anheuser-Busch)
Ser 95 AMT
5.85%, 12/01/30 6,400 6,403,520
NR New Jersey Eco Dev
(Kapkowski Rd)
Ser 98B AMT
6.50%, 4/01/31 28,085 28,403,765
BBB New Jersey Eco Dev
(NUI Corp)
Ser 98A AMT
5.25%, 11/01/33 12,000 10,605,240
AAA New Jersey Eco Dev
(Pub Ser Elec & Gas)
MBIA Ser 94A AMT
6.40%, 5/01/32 5,000 5,292,950
BBB New Jersey Hlth Care Fac
(Englewood Hosp)
Ser 94
6.75%, 7/01/24 4,230 4,460,661
BBB New Jersey Hlth Care Fac
(Franciscan Sisters,
St. Mary's Hosp)
Ser 93
5.88%, 7/01/12 2,755 2,743,732
AAA New Jersey Hlth Care Fac
(Monmouth Med Ctr)
FSA Ser C
6.25%, 7/01/24 2,750 2,996,400
A New Jersey Hlth Care Fac
(Palisades Med Ctr)
ACA Ser 99
5.25%, 7/01/28 3,840 3,461,914
AAA New Jersey Hlth Care
Fac Auth
(St. Barnabas Hosp)
Ser 98B
5.00%, 7/01/24 5,000 4,447,550
AAA New Jersey Higher Ed
Student Loan MBIA
Ser 99A AMT
5.25%, 6/01/18 1,500 1,426,260
AAA New Jersey Hsg & Mtg
MFHR AMBAC
Ser 96A AMT
6.25%, 5/01/28 5,000 5,136,800
A+ New Jersey Hsg & Mtg
(Sect 8) Ser 1
6.70%, 11/01/28 4,665 4,897,830
AAA New Jersey Hsg & Mtg
SFMR MBIA
Ser 95O AMT
6.35%, 10/01/27 5,000 5,132,050
AA- New Jersey Hwy Auth
Garden State Pkwy Rev
6.25%, 1/01/14 1,250 1,311,500
AAA Passaic Valley Sewer
AMBAC Ser 92D
5.75%, 12/01/15 3,400 3,435,904
AAA Port Auth of NY & NJ
(JFK Int'l Airport)
MBIA Ser 6 AMT
5.75%, 12/01/22 7,690 7,611,716
AA- Port Auth of NY & NJ
95th Ser 94 AMT
6.13%, 7/15/29 6,300 6,496,875
AA- Salem Cnty NJ Waste
Disposal Auth (E.I. Dupont)
Ser 92A AMT
6.13%, 7/15/22 3,500 3,555,230
BBB South Jersey Transportation
Auth NJ Lease Rev
(Raytheon Aircraft Service)
Ser 97A AMT
6.15%, 1/01/22 500 503,440
AAA NJ Sewer Auth
(Landis)
FGIC Ser 93C
7.12%, 9/19/19 (c) 3,250 3,287,993
------------
119,020,577
19
NEW JERSEY PORTFOLIO
PORTFOLIO OF INVESTMENTS
(CONTINUED) ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS (A) (000) VALUE
- -------------------------------------------------------------------------------
PUERTO RICO-4.9%
AAA Puerto Rico Hsg Fin
Corp Rev SFMR
GNMA, Ser 98A AMT
5.20%, 12/01/32 $ 7,100 $ 6,389,077
TOTAL INVESTMENTS-96.0%
(cost $123,050,683) 125,409,654
Other assets less liabilities-4.0% 5,206,297
NET ASSETS-100% $130,615,951
See footnotes summary on page 25.
See Glossary of Terms on page 25.
See notes to financial statements.
20
OHIO PORTFOLIO
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1999 ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS (A) (000) VALUE
- -------------------------------------------------------------------------------
OHIO MUNICIPAL BONDS-92.5%
BBB Akron
COP Ser 96
Zero Coupon to 12/01/01
Converts to 6.907 to
12/01/16 $ 5,000 $ 4,769,850
BBB- Butler Cnty Hosp Rev
(Fort Hamilton Hughes)
7.50%, 1/01/10 1,400 1,489,572
BB Cleveland Arpt
(Continental Airlines)
Ser 98 AMT
5.38%, 9/15/27 20,015 17,016,553
AAA Cleveland Arpt Sys
FGIC Ser 94A AMT
6.25%, 1/01/20 10,000 10,390,500
BBB Dayton Spec Fac Rev
(Emery Air Freight)
Ser 96D AMT
6.20%, 10/01/09 4,380 4,585,772
A Franklin Cnty Rev
(OCLC Online Computer Library Ctr)
Ser 98A
5.20%, 10/01/20 4,885 4,548,619
BBB Hamilton Cnty Hlth Sys
(Franciscan Sisters/Providence Hosp)
Ser 92
6.875%, 7/01/15 2,500 2,706,900
NR Kent Ohio MFHR
(Silver Meadows Apt)
GNMA Ser 95 AMT
7.15%, 12/20/26 3,100 3,326,424
Aaa Lucas Cnty Health Fac
(Altenheim)
GNMA Ser 99
5.50%, 7/20/40 (b) 3,200 2,961,472
NR Mahoning Valley Sanitary
Dist Ser 94
7.75%, 5/15/14 1,500 1,632,975
A+ Ohio Air Quality Dev Auth
(Anheuser-Busch)
Ser 99 AMT
6.00%, 8/01/29 2,250 2,254,725
AA- Ohio Air Quality Dev Auth
(Dayton Pwr & Light)
Ser 92B
6.40%, 8/15/27 2,000 2,118,280
AAA Ohio Air Quality Dev Auth
(JMG Funding)
AMBAC Ser 94B AMT
6.38%, 4/01/29 4,685 4,889,828
AAA Ohio Air Quality Dev Auth
(Ohio Pwr Co)
AMBAC Ser 99C
5.15%, 5/01/26 3,000 2,733,480
BB+ Ohio Air Quality Dev Auth
(Toledo Edison Co)
Ser 97A AMT
6.10%, 8/01/27 5,000 4,837,200
Aa2 Ohio Hsg Fin Agy MFHR
(Bridgeview Villa II)
FHA AMT
6.45%, 12/01/33 (b) 1,965 2,016,228
AAA Ohio Hsg Fin Agy
SFMR GNMA
Ser 94 B2 AMT
6.70%, 3/01/25 5,325 5,520,640
AAA Ohio Hsg Fin Agy
SFMR GNMA
Ser 95 A2 AMT
6.63%, 3/01/26 4,445 4,595,419
AAA Ohio Hsg Fin Agy
SFMR GNMA
Ser 99C AMT
5.75%, 9/01/30 5,700 5,555,049
A- Ohio St Wtr Dev Auth
(North Star/BHP) AMT
6.45%, 9/01/20 4,750 4,931,070
TOTAL INVESTMENTS-92.5%
(cost $91,763,037) 92,880,556
Other assets less liabilities-7.5% 7,529,177
NET ASSETS-100% $100,409,733
See footnote summary on page 25.
See Glossary of Terms on page 25.
See notes to financial statements.
21
PENNSYLVANIA PORTFOLIO
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1999 ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS (A) (000) VALUE
- -------------------------------------------------------------------------------
PENNSYLVANIA MUNICIPAL
BONDS-98.2%
AAA Allegheny Cnty Arpt Rev
(Pittsburgh Int'l)
FSA Ser 92A AMT
6.40%, 1/01/02 $ 1,000 $ 1,041,680
AAA Allegheny Cnty Arpt Rev
(Pittsburgh Int'l)
FSA Ser 92B AMT
6.63%, 1/01/22 3,315 3,481,015
A Allegheny Cnty Higher Ed
(Thiel College)
ACA Ser 99A
5.38%, 11/15/19 2,300 2,148,476
A Allegheny Cnty Higher Ed
(Thiel College)
ACA Ser 99A
5.38%, 11/15/29 2,000 1,818,920
BBB- Allegheny Cnty
IDR (USX) Ser 96
6.10%, 1/15/18 4,000 3,995,160
BBB- Allegheny Cnty
IDR (USX) Ser 98
5.50%, 12/01/29 14,000 12,512,080
Aaa Allegheny Cnty MFHR
(Green Meadow Apts)
FHA
Ser 98 A1 AMT
5.13%, 10/20/40 (b) 8,440 7,317,649
BBB+ Bradford Cnty IDR
Solid Waste Disp Rev
(Int'l Paper)
Ser 95A AMT
6.60%, 3/01/19 2,500 2,614,275
BBB Crawford Cnty Hosp Auth
(Wesbury Methodist Cmnty)
Ser 99
6.25%, 8/15/29 (d) 2,100 2,041,746
BBB+ Cumberland Cnty
Municipal Auth Rev
(Presbyterian Homes Inc)
Ser 96
6.00%, 12/01/26 3,000 2,932,920
BBB- Delaware Cnty
(Eastern College)
Ser 99C
5.63%, 10/01/28 3,300 3,025,407
BB- New Morgan IDR
Solid Waste Disp Rev
(Browning-Ferris)
Ser 94 AMT
6.50%, 4/01/19 4,000 4,162,720
AAA Pennsylvania Higher Ed
Student Loan AMBAC
Ser 88D AMT
6.05%, 1/01/19 5,900 5,936,226
AAA Pennsylvania Higher Ed
(University of Pittsburgh
Med Ctr)
FSA Ser 99A
5.00%, 8/01/29 18,500 16,058,740
AA+ Pennsylvania Hsg
Fin Agy SFMR
Ser 92 35D AMT
8.69%, 4/01/25 (c) 9,500 9,860,430
AA+ Pennsylvania Hsg
Fin Agy SFMR
Ser 99 67A AMT
5.90%, 10/01/30 19,020 18,859,281
AAA Pennsylvania Turnpike
AMBAC Ser 94A,
Pre-refunded
6.00%, 12/01/04 3,000 3,251,040
AAA Philadelphia Arpt Rev
Ser 95A AMT
6.10%, 6/15/25 6,750 6,957,968
AAA Philadelphia Gas Wks Rev
FSA Ser 99
5.25%, 7/01/29 7,500 6,888,225
AAA Philadelphia GO
FSA Ser 98
5.00%, 3/15/28 7,900 6,925,140
BBB+ Philadelphia Hosp Rev
(Temple Univ)
Ser 93A
6.625%, 11/15/23 3,250 3,330,697
AAA Philadelphia Pkg Auth Rev
AMBAC Ser 99A
5.25%, 2/15/29 4,600 4,196,672
AA Potter Cnty Hosp Auth
(Charles Cole Memorial)
Asset Gty Ser 96
6.05%, 8/01/24 4,340 4,422,677
22
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS (A) (000) VALUE
- -------------------------------------------------------------------------------
BBB Pottsville Hosp Rev
(Pottsville Hospital &
Warne Clinic)
Ser 98
5.50%, 7/01/05 $ 1,000 $ 973,560
AA Schuylkill Cnty IDR
(Charity Oblig Group)
Ser 99A
5.00%, 11/01/28 1,675 1,451,990
NR Susquehanna Regl Arpt Auth
(Aero Harrisburg LLC)
Ser 99 AMT
5.50%, 1/01/24 1,490 1,310,887
BBB Warren Cnty Hosp Auth
(Warren General)
Ser 94A
7.00%, 4/01/19 2,200 2,333,474
TOTAL INVESTMENTS-98.2%
(cost $138,534,119) 139,849,055
Other assets less liabilities-1.8% 2,557,111
NET ASSETS-100% $142,406,166
See footnote summary on page 25.
See Glossary of Terms on page 25.
See notes to financial statements.
23
VIRGINIA PORTFOLIO
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1999 ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATINGS (A) (000) VALUE
- -------------------------------------------------------------------------------
MUNICIPAL BONDS-97.0%
VIRGINIA-85.5%
A Alexandria MFHR
(Buckingham Village Apts)
Ser 96A AMT
6.15%, 1/01/29 $ 4,000 $ 4,025,200
AAA Arlington Cnty IDR
(Ogden Martin)
FSA Ser 98B AMT
5.25%, 1/01/29 2,500 2,508,875
BBB Giles Cnty IDR
(Hoechst Celanese Corp)
Ser 96 AMT
6.45%, 5/01/26 7,500 7,794,450
Baa2 Goochland Cnty IDR
(Nekoosa Pkg/GA Pacific)
Ser 98 AMT
5.65%, 12/01/25 (b) 14,000 12,923,400
AAA Harrisonburg MFHR
(Battery Heights Assoc)
GNMA Ser 96A
6.25%, 4/20/36 3,760 3,888,178
AA Henrico Cnty IDR
(Henrico Cnty Jail)
Ser 94
7.13%, 8/01/21 2,000 2,210,100
BBB+ Isle of Wight Cnty
Solid Waste Rev
(Union Camp Corp)
Ser 94 AMT
6.55%, 4/01/24 1,015 1,052,342
AAA Loudoun Cnty IDR
Hosp Rev
(Loudoun Hosp Ctr)
FSA Ser 95
5.80%, 6/01/20 2,500 2,535,225
AA- Metropolitan Washington DC
Arpt Rev
Ser 97B AMT
5.50%, 10/01/23 5,910 5,615,859
Aaa Prince William Cnty Hosp Rev
(Potomac Hosp Group)
Ser 95
6.75%, 10/01/15 (b) 2,250 2,531,205
AAA Richmond Metro Auth Expwy Rev
FGIC Ser 92B
6.25%, 7/15/22 1,000 1,044,870
AAA Russell Cnty IDR
(Appalachian Pwr)
MBIA Ser 98H
5.00%, 11/01/21 2,000 1,804,440
NR Staunton Ed Fac
(Mary Baldwin College)
Ser 96
6.75%, 11/01/21 3,145 3,290,079
AAA Suffolk MFHR
(Prince William Commons)
FNMA Ser 96A AMT
6.50%, 6/01/29 3,250 3,393,098
AA Virginia Beach Hosp Rev
(Sentara Bayside)
6.30%, 11/01/21 1,000 1,059,980
AA+ Virginia Hsg Dev Auth
MFHR
Ser 99 AMT
5.95%, 2/01/23 5,525 5,517,541
AA+ Virginia Hsg Dev Auth
(Rental Hsg)
Ser 99F AMT
5.25%, 5/01/22 5,165 4,754,899
AA+ Virginia Hsg Dev Auth
(Commonwealth Mtg)
Ser 96B AMT
6.375%, 1/01/26 5,000 5,101,650
------------
71,051,391
PUERTO RICO-11.5%
A Puerto Rico GO
Ser 98
5.00%, 7/01/05 1,400 1,424,332
AAA Puerto Rico Hsg Fin
Corp Rev SFMR
GNMA Ser 98A AMT
5.20%, 12/01/32 4,440 3,995,423
BBB- Puerto Rico Port Auth
(American Airlines)
Ser 96A AMT
6.25%, 6/01/26 4,075 4,117,951
------------
9,537,706
24
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
PRINCIPAL
AMOUNT
(000) VALUE
- -------------------------------------------------------------------------------
TOTAL INVESTMENTS-97.0%
(cost $80,254,745) $ 80,589,097
Other assets less liabilities-3.0% 2,527,080
NET ASSETS-100% $ 83,116,177
(a) Unaudited.
(b) Moody's Rating--unaudited.
(c) Inverse floater security--security with variable or floating interest rate
that moves in opposite direction of short-term interest rates.
(d) Fitch's Rating--unaudited.
See notes to financial statements.
Glossary of Terms:
ACA American Capital Access
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
25
STATEMENTS OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1999 ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
<TABLE>
<CAPTION>
ARIZONA FLORIDA MASSACHUSETTS
---------- ----------- ---------------
<S> <C> <C> <C>
ASSETS
Investment in securities, at value (cost: $74,571,422,
$186,201,910, $111,026,406, $35,916,628,
$31,950,094, $123,050,683, $91,763,037,
$138,534,119 and $80,254,745, respectively) $75,019,464 $186,001,892 $111,342,478
Cash -0- 75,133 -0-
Receivable for investment securities sold 3,103,694 -0- 4,376,939
Interest receivable 1,349,683 4,346,028 1,807,030
Receivable for shares of beneficial interest sold 391,419 1,463,517 444,593
Receivable due from Adviser -0- -0- 31,789
Total assets 79,864,260 191,886,570 118,002,829
LIABILITIES
Due to custodian 466,836 -0- 193,379
Dividends payable 107,231 259,576 155,683
Payable for shares of beneficial interest redeemed 96,003 994,562 736,184
Distribution fee payable 41,921 110,529 69,946
Advisory fee payable 2,138 10,216 -0-
Payable for investment securities purchased -0- 939,496 -0-
Accrued expenses and other liabilities 68,394 118,865 96,040
Total liabilities 782,523 2,433,244 1,251,232
NET ASSETS $79,081,737 $189,453,326 $116,751,597
COMPOSITION OF NET ASSETS
Shares of beneficial interest, at par $ 76,107 $ 193,048 $ 109,621
Additional paid-in capital 81,028,344 200,431,682 121,542,222
Distributions in excess of net investment income (107,231) (259,575) (155,684)
Accumulated net realized loss on investment transactions (2,363,525) (10,711,811) (5,060,634)
Net unrealized appreciation (depreciation) of investments 448,042 (200,018) 316,072
$79,081,737 $189,453,326 $116,751,597
CLASS A SHARES
Net assets $38,471,630 $ 79,751,726 $ 44,758,278
Shares of beneficial interest outstanding 3,700,882 8,126,355 4,199,425
CLASS B SHARES
Net assets $31,242,282 $ 67,532,387 $ 42,628,248
Shares of beneficial interest outstanding 3,007,861 6,881,653 4,004,144
CLASS C SHARES
Net assets $ 9,367,825 $ 42,169,213 $ 29,365,071
Shares of beneficial interest outstanding 901,995 4,296,822 2,758,484
CALCULATION OF MAXIMUM OFFERING PRICE
CLASS A SHARES
Net asset value and redemption price per share $10.40 $ 9.81 $10.66
Sales charge--4.25% of public offering price 0.46 0.44 0.47
Maximum offering price $10.86 $10.25 $11.13
CLASS B SHARES
Net asset value and offering price per share $10.39 $ 9.81 $10.65
CLASS C SHARES
Net asset value and offering price per share $10.39 $ 9.81 $10.65
</TABLE>
26
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
<TABLE>
<CAPTION>
MICHIGAN MINNESOTA NEW JERSEY OHIO PENNSYLVANIA VIRGINIA
------------ ------------ ------------- ------------ -------------- ------------
<C> <C> <C> <C> <C> <C>
$36,241,730 $32,242,196 $125,409,654 $92,880,556 $139,849,055 $80,589,097
-0- 325,406 62,052 27,615 -0- 806,985
-0- 2,810,527 11,406,625 6,434,660 958,924 5,187,628
805,183 410,167 2,604,864 1,166,246 2,514,529 1,751,457
138,348 57,793 928,463 779,158 1,317,960 872,472
-0- 11,314 -0- 1,587 -0- 12,694
37,185,261 35,857,403 140,411,658 101,289,822 144,640,468 89,220,333
100,536 -0- -0- -0- 648,761 -0-
45,019 44,601 160,806 129,591 187,879 111,668
96,582 139,287 1,052,179 575,777 1,170,675 338,278
23,224 21,792 88,239 67,084 81,486 51,121
8,694 -0- 27,447 -0- 36,272 -0-
500,000 1,799,494 8,357,379 -0- -0- 5,525,000
59,234 59,672 109,657 107,637 109,229 78,089
833,289 2,064,846 9,795,707 880,089 2,234,302 6,104,156
$36,351,972 $33,792,557 $130,615,951 $100,409,733 $142,406,166 $83,116,177
$ 36,147 $ 34,956 $ 131,527 $ 101,845 $ 143,956 $ 80,563
36,855,423 35,427,942 134,674,113 104,505,129 147,251,176 86,185,988
(45,019) (44,601) (160,806) (129,590) (187,879) (111,668)
(819,681) (1,917,842) (6,387,854) (5,185,170) (6,116,023) (3,373,058)
325,102 292,102 2,358,971 1,117,519 1,314,936 334,352
$36,351,972 $33,792,557 $130,615,951 $100,409,733 $142,406,166 $83,116,177
$11,760,327 $10,600,844 $ 33,109,063 $ 27,229,414 $ 62,478,746 $28,147,847
1,168,498 1,096,502 3,333,282 2,761,802 6,314,697 2,726,191
$13,844,496 $14,111,140 $ 64,928,776 $ 49,054,679 $ 52,011,686 $42,006,657
1,377,167 1,459,812 6,539,259 4,976,079 5,258,815 4,072,952
$10,747,149 $ 9,080,573 $ 32,578,112 $ 24,125,640 $ 27,915,734 $12,961,673
1,069,061 939,255 3,280,150 2,446,623 2,822,089 1,257,140
$10.06 $ 9.67 $ 9.93 $ 9.86 $ 9.89 $10.32
0.45 0.43 0.44 0.44 0.44 0.46
$10.51 $10.10 $10.37 $10.30 $10.33 $10.78
$10.05 $ 9.67 $ 9.93 $ 9.86 $ 9.89 $10.31
$10.05 $ 9.67 $ 9.93 $ 9.86 $ 9.89 $10.31
</TABLE>
See notes to financial statements.
26
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
27
STATEMENTS OF OPERATIONS
YEAR ENDED SEPTEMBER 30, 1999 ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
<TABLE>
<CAPTION>
ARIZONA FLORIDA MASSACHUSETTS
---------- ----------- ---------------
<S> <C> <C> <C>
INVESTMENT INCOME
Interest $ 3,197,527 $ 9,315,443 $ 5,288,933
EXPENSES
Advisory fee 361,666 1,026,151 604,352
Distribution fee - Class A 90,011 201,093 116,339
Distribution fee - Class B 211,334 579,037 330,332
Distribution fee - Class C 67,296 392,495 248,837
Custodian 93,292 100,874 95,915
Administrative 92,000 92,000 92,000
Transfer agency 30,266 74,555 52,569
Audit & legal 28,147 47,458 29,543
Registration 26,791 35,660 30,712
Printing 7,635 17,413 12,736
Amortization of organization expenses 5,928 -0- 3,491
Trustees' fees 2,457 2,457 2,457
Miscellaneous 4,225 7,165 1,215
Total expenses 1,021,048 2,576,358 1,620,498
Less: expenses waived and reimbursed by Adviser
(see Note B) (374,649) (697,741) (518,867)
Net expenses 646,399 1,878,617 1,101,631
Net investment income 2,551,128 7,436,826 4,187,302
REALIZED AND UNREALIZED LOSS ON INVESTMENTS
Net realized loss on investment transactions (2,363,497) (6,777,319) (5,060,634)
Net change in unrealized appreciation of investments (1,186,209) (4,449,716) (1,540,378)
Net loss on investments (3,549,706) (11,227,035) (6,601,012)
NET DECREASE IN NET ASSETS FROM OPERATIONS $ (998,578) $(3,790,209) $(2,413,710)
</TABLE>
28
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
<TABLE>
<CAPTION>
MICHIGAN MINNESOTA NEW JERSEY OHIO PENNSYLVANIA VIRGINIA
------------ ------------ ------------- ------------ -------------- ------------
<C> <C> <C> <C> <C> <C>
$ 1,775,970 $ 1,772,652 $ 6,551,455 $ 4,860,872 $ 6,805,296 $ 2,996,554
203,931 196,871 726,481 539,593 755,932 350,775
30,935 25,126 77,731 56,225 144,368 53,553
118,090 146,798 598,368 457,799 489,744 295,978
105,082 84,442 304,898 218,133 238,521 86,751
90,302 87,672 89,352 95,240 97,664 97,453
92,000 92,000 92,000 92,000 92,000 92,000
27,157 28,034 75,054 58,287 81,505 41,149
20,273 18,994 37,856 40,909 30,157 34,226
7,755 4,340 16,601 20,336 13,371 21,128
6,156 7,834 16,847 13,723 20,294 8,035
2,272 -0- -0- -0- -0- 3,714
2,457 2,457 2,457 2,457 2,457 2,457
3,946 5,198 8,523 7,765 7,301 7,618
710,356 699,766 2,046,168 1,602,467 1,973,314 1,094,837
(240,898) (300,185) (454,754) (477,227) (309,615) (450,896)
469,458 399,581 1,591,414 1,125,240 1,663,699 643,941
1,306,512 1,373,071 4,960,041 3,735,632 5,141,597 2,352,613
(794,295) (774,099) (2,765,281) (2,325,166) (5,789,857) (3,373,058)
(772,736) (1,040,378) (3,817,282) (2,893,533) (3,757,992) (384,519)
(1,567,031) (1,814,477) (6,582,563) (5,218,699) (9,547,849) (3,757,577)
$ (260,519) $ (441,406) $(1,622,522) $(1,483,067) $(4,406,252) $(1,404,964)
</TABLE>
See notes to financial statements.
28
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
29
STATEMENTS OF CHANGES IN NET ASSETS ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
<TABLE>
<CAPTION>
ARIZONA FLORIDA MASSACHUSETTS
------------------------------------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
SEPT. 30, SEPT. 30, SEPT. 30, SEPT. 30, SEPT. 30, SEPT. 30,
1999 1998 1999 1998 1999 1998
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS
Net investment income $ 2,551,128 $ 1,390,473 $ 7,436,826 $ 3,993,694 $ 4,187,302 $ 1,762,833
Net realized gain (loss) on
investment transactions (2,363,497) 221,494 (6,777,319) 1,226,752 (5,060,634) 348,332
Net change in unrealized
appreciation/depreciation
of investments (1,186,209) 1,146,364 (4,449,716) 1,754,979 (1,540,378) 1,218,465
Net increase (decrease) in net
assets from operations (998,578) 2,758,331 (3,790,209) 6,975,425 (2,413,710) 3,329,630
DIVIDENDS AND DISTRIBUTIONS
TO SHAREHOLDERS FROM:
Net investment income
Class A (1,422,629) (858,694) (3,312,718) (1,365,535) (1,836,597) (738,055)
Class B (856,109) (414,304) (2,459,083) (1,379,472) (1,342,251) (522,866)
Class C (272,390) (117,475) (1,665,025) (1,248,687) (1,008,454) (501,912)
Distributions in excess of net
investment income
Class A (93,745) (43,709) (171,909) (35,676) (135,677) (61,754)
Class B (75,448) (28,034) (150,028) (43,750) (131,050) (60,479)
Class C (24,429) (8,101) (106,023) (37,351) (102,932) (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 43,387,517 21,134,959 84,405,261 45,780,029 62,444,310 36,041,467
Total increase 39,491,106 22,059,904 72,750,266 48,644,983 55,275,356 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 year $79,081,737 $39,590,631 $189,453,326 $116,703,060 $116,751,597 $61,476,241
</TABLE>
See notes to financial statements.
30
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
<TABLE>
<CAPTION>
MICHIGAN MINNESOTA NEW JERSEY
------------------------------------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
SEPT. 30, SEPT. 30, SEPT. 30, SEPT. 30, SEPT. 30, SEPT. 30,
1999 1998 1999 1998 1999 1998
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS
Net investment income $ 1,306,512 $ 888,888 $ 1,373,071 $ 1,040,289 $ 4,960,041 $ 3,654,968
Net realized gain (loss) on
investment transactions (794,295) 285,847 (774,099) 274,145 (2,765,281) 529,540
Net change in unrealized
appreciation/depreciation
of investments (772,736) 572,490 (1,040,378) 358,291 (3,817,282) 2,076,332
Net increase (decrease) in net
assets from operations (260,519) 1,747,225 (441,406) 1,672,725 (1,622,522) 6,260,840
DIVIDENDS AND DISTRIBUTIONS
TO SHAREHOLDERS FROM:
Net investment income
Class A (461,761) (321,710) (410,462) (260,414) (1,250,108) (910,827)
Class B (447,452) (284,561) (610,472) (469,051) (2,454,054) (1,773,742)
Class C (397,299) (282,617) (352,137) (310,824) (1,255,879) (970,399)
Distributions in excess of net
investment income
Class A (30,996) (28,794) (13,422) (12,557) (16,310) (16,544)
Class B (38,763) (33,663) (25,067) (27,032) (57,365) (40,961)
Class C (35,476) (33,194) (13,957) (16,330) (32,337) (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 11,177,569 10,508,825 7,815,621 7,272,544 40,926,509 17,828,850
Total increase 9,317,704 10,809,261 5,948,698 7,849,061 34,237,934 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 year $36,351,972 $27,034,268 $33,792,557 $27,843,859 $130,615,951 $96,378,017
</TABLE>
See notes to financial statements.
31
STATEMENTS OF CHANGES IN NET ASSETS
(CONTINUED) ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
<TABLE>
<CAPTION>
OHIO PENNSYLVANIA VIRGINIA
------------------------------------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
SEPT. 30, SEPT. 30, SEPT. 30, SEPT. 30, SEPT. 30, SEPT. 30,
1999 1998 1999 1998 1999 1998
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS
Net investment income $ 3,735,632 $ 2,569,409 $ 5,141,597 $ 3,692,305 $ 2,352,613 $ 740,489
Net realized gain (loss) on
investment transactions (2,325,166) 227,096 (5,789,857) 1,548,033 (3,373,058) 132,862
Net change in unrealized
appreciation/depreciation
of investments (2,893,533) 1,407,156 (3,757,992) 1,104,276 (384,519) 498,764
Net increase (decrease) in net
assets from operations (1,483,067) 4,203,661 (4,406,252) 6,344,614 (1,404,964) 1,372,115
DIVIDENDS AND DISTRIBUTIONS
TO SHAREHOLDERS FROM:
Net investment income
Class A (914,541) (537,858) (2,252,014) (1,490,341) (833,405) (294,619)
Class B (1,908,969) (1,369,998) (1,940,681) (1,487,630) (1,174,902) (354,381)
Class C (912,122) (661,553) (948,902) (714,334) (344,306) (91,489)
Distributions in excess of net
investment income
Class A (44,837) (12,445) (167,279) (34,321) (91,739) (20,332)
Class B (108,943) (41,754) (181,017) (46,978) (167,735) (34,779)
Class C (49,086) (18,701) (84,332) (21,194) (48,628) (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 37,636,801 17,338,126 59,757,965 19,566,732 56,394,462 20,866,666
Total increase 32,215,236 18,899,478 49,777,488 22,116,548 52,231,517 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 year $100,409,733 $68,194,497 $142,406,166 $92,628,678 $83,116,177 $30,884,660
</TABLE>
See notes to financial statements.
32
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1999 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 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
33
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.
During the current fiscal year, permanent differences, primarily due to
distributions in excess of net tax exempt income, resulted in a net decrease in
distributions in excess of net investment income and a corresponding decrease
in additional paid-in capital. This reclassification had no effect on net
assets.
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 year ended September 30, 1999, the Adviser
agreed to waive all or a portion of its advisory fees. The aggregate amounts of
such fee waivers were: Arizona Portfolio, $282,649; Florida Portfolio,
$674,741; Massachusetts Portfolio, $495,867; Michigan Portfolio, $148,898;
Minnesota Portfolio, $196,871; New Jersey Portfolio, $431,754; Ohio Portfolio,
$454,227; Pennsylvania Portfolio, $286,615; and Virginia Portfolio, $350,775.
Pursuant to the advisory agreement, the Adviser provides to each Portfolio
certain legal and accounting services. For the year ended September 30, 1999,
the Adviser agreed to waive all or a portion of its fees for such services.
The aggregate amounts of such fee waivers were $92,000 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, $11,314; and Virginia Portfolio,
$8,121. 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, $21,050; Florida
Portfolio, $50,964; Massachusetts Portfolio, $34,602; Michigan Portfolio,
$20,827; Minnesota Portfolio, $19,050; New Jersey Portfolio, $58,448; Ohio
Portfolio, $40,636; Pennsylvania Portfolio, $55,971; and Virginia Portfolio,
$27,757.
For the year ended September 30, 1999, each Portfolio's expenses were reduced
under an expense offset arrangement with Alliance Fund Services as follows:
Arizona Portfolio, by $1,384; Florida Portfolio, by $3,446; Massachusetts
Portfolio, by $2,448; Michigan Portfolio, by $1,423; Minnesota Portfolio, by
$1,451; New Jersey Portfolio, by $3,882; Ohio Portfolio, by $2,425;
Pennsylvania Portfolio, by $3,739; and Virginia Portfolio, by $1,980.
Alliance Fund Distributors, Inc. (the "Distributor"), a wholly-owned subsidiary
of the Adviser serves as the Distributor of the Fund's shares. The Distributor
has advised the Fund that it has received front-end sales charges from sales of
Class A shares and contingent deferred sales charges imposed upon redemptions
by shareholders of Class A, Class B and Class C shares for the year ended
September 30, 1999 as follows:
34
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
FRONT END CONTINGENT DEFERRED
SALES CHARGES SALES CHARGES
------------- -------------------------------------
PORTFOLIO CLASS A CLASS A CLASS B CLASS C
------------- ----------- ----------- -----------
Arizona $3,796 $-0- $33,429 $2,509
Florida 56,932 10,571 39,825 20,482
Massachusetts 36,411 354 45,353 17,435
Michigan 12,277 -0- 17,666 5,242
Minnesota 6,975 -0- 11,382 2,941
New Jersey 17,643 21,196 70,246 7,142
Ohio 17,040 4,016 52,549 12,623
Pennsylvania 7,843 699 49,284 4,135
Virginia 33,074 683 36,018 9,839
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 distribution and servicing fees 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
fees are accrued daily and paid monthly. The Agreement provides that the
Distributor will use such payments in their entirety for distribution
assistance and promotional activities. The Distributor has advised the Fund
that it has incurred expenses in excess of the distribution costs reimbursed by
each Portfolio as follows:
PORTFOLIO CLASS B CLASS C
- --------- ---------- ----------
Arizona $1,956,413 $ 411,760
Florida 2,846,389 1,586,538
Massachusetts 2,161,884 1,128,353
Michigan 1,406,873 1,254,875
Minnesota 1,789,761 1,106,874
New Jersey 3,427,343 1,244,916
Ohio 2,804,973 1,215,073
Pennsylvania 2,546,313 1,131,897
Virginia 2,707,431 575,874
Such costs may be recovered from each Portfolio at an annual rate of up to .30
of 1% of each Portfolio's daily net assets 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 year ended September 30, 1999 were as
follows:
PORTFOLIO PURCHASES SALES
- --------- ------------ ------------
Arizona $163,497,312 $121,826,159
Florida 470,923,241 371,580,939
Massachusetts 345,379,729 284,571,327
Michigan 80,316,928 66,688,497
Minnesota 89,136,503 80,204,578
New Jersey 189,695,270 148,699,970
Ohio 210,215,531 178,401,316
Pennsylvania 364,356,494 291,275,161
Virginia 222,843,398 167,970,623
35
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
At September 30, 1999, the cost of investments for federal income tax purposes,
gross unrealized appreciation, gross unrealized depreciation and net unrealized
appreciation (depreciation) of investments for each Portfolio were as follows:
GROSS GROSS NET UNREALIZED
UNREALIZED UNREALIZED APPRECIATION/
PORTFOLIO TAX COST APPRECIATION (DEPRECIATION) (DEPRECIATION)
- --------- ------------ ------------ ------------- --------------
Arizona $ 74,712,244 $ 656,264 $ (349,044) $ 307,220
Florida 186,406,879 761,795 (1,166,782) (404,987)
Massachusetts 111,691,615 826,999 (1,176,136) (349,137)
Michigan 35,916,628 392,792 (67,690) 325,102
Minnesota 31,950,094 361,734 (69,632) 292,102
New Jersey 123,220,075 2,487,967 (298,388) 2,189,579
Ohio 91,860,302 1,268,572 (248,318) 1,020,254
Pennsylvania 138,535,435 1,778,590 (464,970) 1,313,620
Virginia 80,700,662 477,905 (589,470) (111,565)
For Federal income tax purposes at September 30, 1999, the Fund had capital
loss carryforwards for the following Portfolios: $3,931,206 expiring in 2003
and 4,853 expiring in 2007, for Florida Portfolio; $650,584 expiring in 2003,
and $492,981 expiring in 2004, for Minnesota Portfolio; $3,041,366 expiring in
2003, and $349,704 expiring in 2004, for New Jersey Portfolio; $2,526,402
expiring in 2003, and $332,000 expiring in 2004, for Ohio Portfolio; and
$316,038 expiring in 2003, and 1,363 expiring in 2007, 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.
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
--------------------------- ------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
ARIZONA PORTFOLIO 1999 1998 1999 1998
- ----------------- ------------ ------------ -------------- --------------
CLASS A
Shares sold 2,277,927 1,731,764 $24,623,422 $18,634,736
Shares issued in
reinvestment of
dividends and
distributions 72,186 45,597 777,242 491,757
Shares converted
from Class B 19,950 10,448 215,625 163,390
Shares redeemed (588,982) (723,933) (6,374,579) (7,863,841)
Net increase 1,781,081 1,063,876 $19,241,710 $11,426,042
CLASS B
Shares sold 1,905,927 730,287 $20,514,932 $ 7,895,448
Shares issued in
reinvestment of
dividends and
distributions 51,041 30,944 548,786 333,822
Shares converted
to Class A (19,950) (10,458) (215,625) (163,390)
Shares redeemed (170,811) (115,125) (1,824,014) (1,192,886)
Net increase 1,766,207 635,648 $19,024,079 $ 6,872,994
36
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
SHARES AMOUNT
--------------------------- ------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
ARIZONA PORTFOLIO 1999 1998 1999 1998
- ----------------- ------------ ------------ -------------- --------------
CLASS C
Shares sold 552,598 287,268 $5,960,967 $3,107,936
Shares issued in
reinvestment of
dividends and
distributions 16,202 9,267 174,860 100,059
Shares redeemed (93,570) (34,469) (1,014,099) (372,072)
Net increase 475,230 262,066 $5,121,728 $2,835,923
SHARES AMOUNT
--------------------------- ------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
FLORIDA PORTFOLIO 1999 1998 1999 1998
- ----------------- ------------ ------------ -------------- --------------
CLASS A
Shares sold 4,938,321 3,074,851 $50,810,230 $31,787,286
Shares issued in
reinvestment of
dividends 157,067 53,907 1,602,230 557,235
Shares converted
from Class B 307,992 60,032 3,065,724 668,487
Shares redeemed (1,515,732) (676,944) (15,363,283) (7,012,672)
Net increase 3,887,648 2,511,846 $40,114,901 $26,000,336
CLASS B
Shares sold 3,874,899 1,752,957 $39,796,253 $18,139,164
Shares issued in
reinvestment of
dividends 132,982 65,852 1,358,222 680,172
Shares converted
to Class A (307,992) (60,032) (3,065,724) (668,487)
Shares redeemed (704,252) (319,776) (7,164,709) (3,256,349)
Net increase 2,995,637 1,439,001 $30,924,042 $14,894,500
CLASS C
Shares sold 1,798,383 930,521 $18,543,697 $ 9,625,371
Shares issued in
reinvestment of
dividends 95,440 58,806 975,564 607,695
Shares redeemed (603,835) (518,362) (6,152,943) (5,347,873)
Net increase 1,289,988 470,965 $13,366,318 $ 4,885,193
37
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
SHARES AMOUNT
--------------------------- ------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
MASSACHUSETTS SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
PORTFOLIO 1999 1998 1999 1998
- ------------ ------------- ------------- -------------- -------------
CLASS A
Shares sold 3,312,860 1,525,593 $37,219,332 $17,085,284
Shares issued in
reinvestment of
dividends and
distributions 114,805 50,570 1,280,006 566,795
Shares converted
from Class B 18,753 717 202,106 58,037
Shares redeemed (1,268,882) (400,515) (14,120,578) (4,495,983)
Net increase 2,177,536 1,176,365 $24,580,866 $13,214,133
CLASS B
Shares sold 2,527,508 1,237,850 $28,165,325 $13,890,559
Shares issued in
reinvestment of
dividends and
distributions 81,618 36,577 910,840 409,785
Shares converted
to Class A (18,753) (717) (202,106) (58,037)
Shares redeemed (378,875) (127,210) (4,147,852) (1,375,179)
Net increase 2,211,498 1,146,500 $24,726,207 $12,867,128
CLASS C
Shares sold 1,554,684 1,013,035 $17,399,768 $11,364,712
Shares issued in
reinvestment of
dividends and
distributions 73,064 46,652 814,318 522,783
Shares redeemed (455,361) (171,986) (5,076,849) (1,927,289)
Net increase 1,172,387 887,701 $13,137,237 $9,960,206
SHARES AMOUNT
--------------------------- ------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
MICHIGAN SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
PORTFOLIO 1999 1998 1999 1998
- ------------ ------------- ------------- -------------- -------------
CLASS A
Shares sold 487,789 434,869 $5,078,916 $4,494,329
Shares issued in
reinvestment of
dividends and
distributions 32,476 32,622 337,440 340,581
Shares converted
from Class B 2,666 2,043 28,003 71,547
Shares redeemed (167,913) (210,595) (1,734,568) (2,208,136)
Net increase 355,018 258,939 $3,709,791 $2,698,321
CLASS B
Shares sold 623,638 447,245 $6,488,521 $4,685,103
Shares issued in
reinvestment of
dividends and
distributions 36,531 31,065 379,775 323,917
Shares converted
to Class A (2,666) (2,043) (28,003) (71,547)
Shares redeemed (167,093) (93,242) (1,729,098) (927,923)
Net increase 490,410 383,025 $5,111,195 $4,009,550
CLASS C
Shares sold 498,274 489,303 $5,196,724 $5,126,475
Shares issued in
reinvestment of
dividends and
distributions 38,412 39,986 398,957 417,372
Shares redeemed (314,121) (166,391) (3,239,098) (1,742,893)
Net increase 222,565 362,898 $2,356,583 $3,800,954
38
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
SHARES AMOUNT
--------------------------- ------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
MINNESOTA SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
PORTFOLIO 1999 1998 1999 1998
- ------------ ------------- ------------- -------------- -------------
CLASS A
Shares sold 497,561 240,220 $5,020,946 $2,376,324
Shares issued in
reinvestment of
dividends 27,350 15,544 273,996 157,123
Shares converted
from Class B 82,720 5,897 805,502 109,403
Shares redeemed (123,890) (62,015) (1,231,987) (628,217)
Net increase 483,741 199,646 $4,868,457 $2,014,633
CLASS B
Shares sold 352,879 641,379 $3,549,698 $6,478,136
Shares issued in
reinvestment of
dividends 40,642 32,588 408,744 329,386
Shares converted
to Class A (82,720) (5,897) (805,502) (109,403)
Shares redeemed (208,063) (164,976) (2,072,985) (1,616,471)
Net increase 102,738 503,094 $1,079,955 $5,081,648
CLASS C
Shares sold 311,979 170,118 $3,153,964 $1,720,113
Shares issued in
reinvestment of
dividends 28,240 26,170 283,659 264,223
Shares redeemed (156,007) (179,084) (1,570,414) (1,808,073)
Net increase 184,212 17,204 $1,867,209 $ 176,263
SHARES AMOUNT
--------------------------- ------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
NEW JERSEY SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
PORTFOLIO 1999 1998 1999 1998
- ------------ ------------- ------------- -------------- -------------
CLASS A
Shares sold 1,418,607 751,262 $14,654,659 $ 7,705,304
Shares issued in
reinvestment of
dividends 71,338 54,575 736,677 561,562
Shares converted
from Class B 501,257 21,774 5,056,860 268,704
Shares redeemed (792,821) (298,768) (8,182,428) (3,073,637)
Net increase 1,198,381 528,843 $12,265,768 $ 5,461,933
CLASS B
Shares sold 3,200,774 1,449,989 $33,167,812 $14,941,581
Shares issued in
reinvestment of
dividends 162,998 113,069 1,683,868 1,163,362
Shares converted
to Class A (501,257) (21,774) (5,056,860) (268,704)
Shares redeemed (914,657) (722,074) (9,402,931) (7,381,335)
Net increase 1,947,858 819,210 $20,391,889 $ 8,454,904
CLASS C
Shares sold 1,216,161 668,420 $12,623,102 $ 6,885,939
Shares issued in
reinvestment of
dividends 84,996 65,486 878,529 673,386
Shares redeemed (507,784) (354,535) (5,232,779) (3,647,312)
Net increase 793,373 379,371 $ 8,268,852 $ 3,912,013
39
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
SHARES AMOUNT
--------------------------- ------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
OHIO PORTFOLIO 1999 1998 1999 1998
- -------------- ------------ ------------ -------------- --------------
CLASS A
Shares sold 1,475,518 639,331 $15,096,494 $ 6,566,039
Shares issued in
reinvestment of
dividends 48,567 33,356 496,061 344,655
Shares converted
from Class B 290,049 58,121 2,897,413 646,153
Shares redeemed (412,951) (117,443) (4,253,626) (1,213,183)
Net increase 1,401,183 613,365 $14,236,342 $ 6,343,664
CLASS B
Shares sold 2,157,546 1,207,646 $22,134,341 $12,480,119
Shares issued in
reinvestment of
dividends 136,727 100,554 1,403,955 1,038,805
Shares converted
to Class A (290,049) (58,121) (2,897,413) (646,153)
Shares redeemed (596,765) (320,073) (6,060,731) (3,263,624)
Net increase 1,407,459 930,006 $14,580,152 $ 9,609,147
CLASS C
Shares sold 1,196,091 372,776 $12,324,925 $ 3,860,583
Shares issued in
reinvestment of
dividends 64,479 46,608 659,657 480,928
Shares redeemed (410,627) (286,393) (4,164,275) (2,956,196)
Net increase 849,943 132,991 $ 8,820,307 $ 1,385,315
SHARES AMOUNT
--------------------------- ------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
PENNSYLVANIA SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
PORTFOLIO 1999 1998 1999 1998
- ------------ ------------- ------------- -------------- -------------
CLASS A
Shares sold 3,024,140 1,354,357 $31,598,359 $14,149,149
Shares issued in
reinvestment of
dividends 150,874 96,257 1,566,915 1,006,799
Shares converted
from Class B 477,975 64,196 4,823,033 722,138
Shares redeemed (680,929) (586,559) (7,066,429) (6,149,684)
Net increase 2,972,060 928,251 $30,921,878 $ 9,728,402
CLASS B
Shares sold 2,668,536 1,163,458 $27,855,387 $12,209,270
Shares issued in
reinvestment of
dividends 122,280 85,232 1,271,826 891,248
Shares converted
to Class A (477,975) (64,196) (4,823,033) (722,138)
Shares redeemed (756,737) (392,609) (7,843,288) (4,075,590)
Net increase 1,556,104 791,885 $16,460,892 $ 8,302,790
CLASS C
Shares sold 1,404,524 428,757 $14,722,908 $ 4,483,838
Shares issued in
reinvestment of
dividends 59,984 38,019 624,110 397,062
Shares redeemed (287,237) (320,592) (2,971,823) (3,345,360)
Net increase 1,177,271 146,184 $12,375,195 $ 1,535,540
40
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
SHARES AMOUNT
--------------------------- ------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
VIRGINIA SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
PORTFOLIO 1999 1998 1999 1998
- ------------ ------------- ------------- -------------- -------------
CLASS A
Shares sold 1,961,441 657,077 $20,961,953 $ 7,125,472
Shares issued in
reinvestment of
dividends and
distributions 64,215 23,268 684,946 252,054
Shares converted
from Class B 9,212 5,107 96,919 105,746
Shares redeemed (244,939) (72,986) (2,603,335) (800,978)
Net increase 1,789,929 612,466 $19,140,483 $ 6,682,294
CLASS B
Shares sold 2,789,674 1,005,543 $29,989,497 $10,994,477
Shares issued in
reinvestment of
dividends and
distributions 104,702 37,823 1,116,887 409,683
Shares converted
to Class A (9,212) (5,107) (96,919) (105,746)
Shares redeemed (262,985) (47,923) (2,787,282) (472,693)
Net increase 2,622,179 990,336 $28,222,183 $10,825,721
CLASS C
Shares sold 979,841 311,389 $10,520,143 $ 3,408,930
Shares issued in
reinvestment of
dividends and
distributions 29,968 11,402 319,844 123,580
Shares redeemed (170,313) (15,874) (1,808,191) (173,859)
Net increase 839,496 306,917 $ 9,031,796 $ 3,358,651
41
FINANCIAL HIGHLIGHTS ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
YEAR
<TABLE>
<CAPTION>
ARIZONA PORTFOLIO
-----------------------------------------------------------------
CLASS A
-----------------------------------------------------------------
YEAR ENDED SEPTEMBER 30,
1999 1998 1997 1996 1995
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $11.03 $10.78 $10.32 $10.29 $9.77
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a) .51(b) .54(b) .57(b) .55(b) .56
Net realized and unrealized gain (loss)
on investment transactions (.55) .45 .48 .14 .53
Net increase (decrease) in net asset
value from operations (.04) .99 1.05 .69 1.09
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.51) (.54) (.57) (.55) (.56)
Distributions in excess of net
investment income (.04) (.02) -0- (.03) (.01)
Distributions from net realized gains (.04) (.18) (.02) (.08) -0-
Total dividends and distributions (.59) (.74) (.59) (.66) (.57)
Net asset value, end of year $10.40 $11.03 $10.78 $10.32 $10.29
TOTAL RETURN
Total investment return based on net
asset value (c) (.45)% 9.54% 10.54% 6.84% 11.56%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's omitted) $38,472 $21,185 $9,225 $4,409 $2,379
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements .78% .78% .78% .78% .78%
Expenses, before waivers/
reimbursements 1.39% 1.55% 2.71% 3.69% 4.88%
Net investment income, net of
waivers/reimbursements 4.74% 4.92% 5.42% 5.33% 5.56%
Portfolio turnover rate 217% 45% 193% 244% 85%
</TABLE>
See footnote summary on page 68.
42
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
YEAR
<TABLE>
<CAPTION>
ARIZONA PORTFOLIO
-----------------------------------------------------------------
CLASS B
-----------------------------------------------------------------
YEAR ENDED SEPTEMBER 30,
1999 1998 1997 1996 1995
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $11.03 $10.78 $10.32 $10.29 $9.77
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a) .43(b) .45(b) .50(b) .47(b) .49
Net realized and unrealized gain (loss)
on investment transactions (.55) .47 .48 .14 .53
Net increase (decrease) in net asset
value from operations (.12) .92 .98 .61 1.02
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.43) (.45) (.50) (.47) (.49)
Distributions in excess of net
investment income (.05) (.04) -0- (.03) (.01)
Distributions from net realized gains (.04) (.18) (.02) (.08) -0-
Total dividends and distributions (.52) (.67) (.52) (.58) (.50)
Net asset value, end of year $10.39 $11.03 $10.78 $10.32 $10.29
TOTAL RETURN
Total investment return based on net
asset value (c) (1.19)% 8.84% 9.80% 6.10% 10.78%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's omitted) $31,242 $13,698 $6,531 $5,199 $3,166
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.48% 1.48% 1.48% 1.48% 1.48%
Expenses, before waivers/
reimbursements 2.16% 2.30% 3.40% 4.40% 5.58%
Net investment income, net of
waivers/reimbursements 4.05% 4.21% 4.73% 4.62% 4.89%
Portfolio turnover rate 217% 45% 193% 244% 85%
</TABLE>
See footnote summary on page 68.
43
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
YEAR
<TABLE>
<CAPTION>
ARIZONA PORTFOLIO
-----------------------------------------------------------------
CLASS C
-----------------------------------------------------------------
YEAR ENDED SEPTEMBER 30,
1999 1998 1997 1996 1995
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $11.03 $10.78 $10.32 $10.30 $9.77
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a) .43(b) .45(b) .50(b) .47(b) .49
Net realized and unrealized gain (loss)
on investment transactions (.55) .47 .48 .13 .54
Net increase (decrease) in net asset
value from operations (.12) .92 .98 .60 1.03
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.43) (.45) (.50) (.47) (.49)
Distributions in excess of net
investment income (.05) (.04) -0- (.03) (.01)
Distributions from net realized gains (.04) (.18) (.02) (.08) -0-
Total dividends and distributions (.52) (.67) (.52) (.58) (.50)
Net asset value, end of year $10.39 $11.03 $10.78 $10.32 $10.30
TOTAL RETURN
Total investment return based on net
asset value (c) (1.19)% 8.83% 9.80% 6.00% 10.89%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's omitted) $9,368 $4,708 $1,775 $710 $481
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.48% 1.48% 1.48% 1.48% 1.48%
Expenses, before waivers/
reimbursements 2.17% 2.34% 3.39% 4.41% 5.58%
Net investment income, net of
waivers/reimbursements 4.05% 4.19% 4.70% 4.61% 4.90%
Portfolio turnover rate 217% 45% 193% 244% 85%
</TABLE>
See footnote summary on page 68.
44
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
YEAR
<TABLE>
<CAPTION>
FLORIDA PORTFOLIO
-----------------------------------------------------------------
CLASS A
-----------------------------------------------------------------
YEAR ENDED SEPTEMBER 30,
1999 1998 1997 1996 1995
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $10.48 $10.14 $9.73 $9.58 $8.89
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a) .51(b) .52(b) .55(b) .54(b) .55
Net realized and unrealized gain
(loss) on investment transactions (.65) .37 .41 .16 .69
Net increase (decrease) in net asset
value from operations (.14) .89 .96 .70 1.24
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.51) (.52) (.55) (.54) (.55)
Distributions in excess of net
investment income (.02) (.03) -0- (.01) -0-
Total dividends and distributions (.53) (.55) (.55) (.55) (.55)
Net asset value, end of year $9.81 $10.48 $10.14 $9.73 $9.58
TOTAL RETURN
Total investment return based on net
asset value (c) (1.38)% 8.97% 10.14% 7.45% 14.44%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's omitted) $79,752 $44,440 $17,516 $14,297 $11,956
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements .73% .73% .73% .73% .73%
Expenses, before waivers/
reimbursements 1.18% 1.27% 1.35% 1.33% 1.33%
Net investment income, net of
waivers/reimbursements 4.94% 5.14% 5.58% 5.52% 5.91%
Portfolio turnover rate 244% 65% 204% 237% 146%
</TABLE>
See footnote summary on page 68.
45
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
YEAR
<TABLE>
<CAPTION>
FLORIDA PORTFOLIO
-----------------------------------------------------------------
CLASS B
-----------------------------------------------------------------
YEAR ENDED SEPTEMBER 30,
1999 1998 1997 1996 1995
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $10.48 $10.14 $9.74 $9.58 $8.89
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a) .43(b) .46(b) .48(b) .47(b) .47
Net realized and unrealized gain (loss)
on investment transactions (.64) .36 .40 .17 .70
Net increase (decrease) in net asset
value from operations (.21) .82 .88 .64 1.17
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.43) (.46) (.48) (.47) (.47)
Distributions in excess of net
investment income (.03) (.02) -0- (.01) (.01)
Total dividends and distributions (.46) (.48) (.48) (.48) (.48)
Net asset value, end of year $9.81 $10.48 $10.14 $9.74 $9.58
TOTAL RETURN
Total investment return based on net
asset value (c) (2.06)% 8.22% 9.24% 6.78% 13.56%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's omitted) $67,532 $40,740 $24,820 $22,235 $20,660
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.43% 1.43% 1.43% 1.43% 1.42%
Expenses, before waivers/
reimbursements 1.91% 1.97% 2.05% 2.03% 2.03%
Net investment income, net of
waivers/reimbursements 4.25% 4.46% 4.87% 4.81% 5.22%
Portfolio turnover rate 244% 65% 204% 237% 146%
</TABLE>
See footnote summary on page 68.
46
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
YEAR
<TABLE>
<CAPTION>
FLORIDA PORTFOLIO
-----------------------------------------------------------------
CLASS C
-----------------------------------------------------------------
YEAR ENDED SEPTEMBER 30,
1999 1998 1997 1996 1995
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $10.48 $10.14 $9.74 $9.58 $8.89
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a) .43(b) .46(b) .49(b) .47(b) .47
Net realized and unrealized gain (loss)
on investment transactions (.64) .36 .39 .17 .70
Net increase (decrease) in net asset
value from operations (.21) .82 .88 .64 1.17
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.43) (.46) (.48) (.47) (.47)
Distributions in excess of net
investment income (.03) (.02) -0- (.01) (.01)
Total dividends and distributions (.46) (.48) (.48) (.48) (.48)
Net asset value, end of year $9.81 $10.48 $10.14 $9.74 $9.58
TOTAL RETURN
Total investment return based on net
asset value (c) (2.06)% 8.22% 9.23% 6.78% 13.56%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's omitted) $42,169 $31,524 $25,722 $30,121 $30,787
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.43% 1.43% 1.43% 1.43% 1.42%
Expenses, before waivers/
reimbursements 1.91% 1.99% 2.03% 2.02% 2.03%
Net investment income, net of
waivers/reimbursements 4.24% 4.48% 4.89% 4.81% 5.27%
Portfolio turnover rate 244% 65% 204% 237% 146%
</TABLE>
See footnote summary on page 68.
47
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
YEAR
<TABLE>
<CAPTION>
MASSACHUSETTS PORTFOLIO
-----------------------------------------------------------------
CLASS A
-----------------------------------------------------------------
YEAR ENDED SEPTEMBER 30,
1999 1998 1997 1996 1995
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $11.39 $11.19 $10.85 $10.50 $10.12
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a) .53(b) .54(b) .58(b) .60(b) .58
Net realized and unrealized gain (loss)
on investment transactions (.66) .45 .57 .44 .41
Net increase (decrease) in net asset
value from operations (.13) .99 1.15 1.04 .99
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.53) (.54) (.58) (.59) (.58)
Distributions in excess of net
investment income (.04) (.06) (.03) (.02) (.03)
Distributions from net realized gains (.03) (.19) (.20) (.08) -0-
Total dividends and distributions (.60) (.79) (.81) (.69) (.61)
Net asset value, end of year $10.66 $11.39 $11.19 $10.85 $10.50
TOTAL RETURN
Total investment return based on net
asset value (c) (1.24)% 9.18% 11.14% 10.25% 10.19%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's omitted) $44,758 $23,026 $9,461 $3,211 $1,337
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements .72% .72% .72% .62% .60%
Expenses, before waivers/
reimbursements 1.24% 1.51% 2.40% 3.15% 6.44%
Net investment income, net of
waivers/reimbursements 4.74% 4.87% 5.40% 5.62% 5.67%
Portfolio turnover rate 303% 69% 134% 246% 155%
</TABLE>
See footnote summary on page 68.
48
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
YEAR
<TABLE>
<CAPTION>
MASSACHUSETTS PORTFOLIO
-----------------------------------------------------------------
CLASS B
-----------------------------------------------------------------
YEAR ENDED SEPTEMBER 30,
1999 1998 1997 1996 1995
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $11.38 $11.19 $10.84 $10.49 $10.12
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a) .45(b) .46(b) .51(b) .52(b) .52
Net realized and unrealized gain (loss)
on investment transactions (.65) .45 .58 .45 .39
Net increase (decrease) in net asset
value from operations (.20) .91 1.09 .97 .91
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.45) (.46) (.51) (.52) (.52)
Distributions in excess of net
investment income (.05) (.07) (.03) (.02) (.02)
Distributions from net realized gains (.03) (.19) (.20) (.08) -0-
Total dividends and distributions (.53) (.72) (.74) (.62) (.54)
Net asset value, end of year $10.65 $11.38 $11.19 $10.84 $10.49
TOTAL RETURN
Total investment return based on net
asset value (c) (1.87)% 8.40% 10.52% 9.52% 9.32%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's omitted) $42,628 $20,400 $7,230 $3,683 $1,754
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.42% 1.42% 1.42% 1.32% 1.30%
Expenses, before waivers/
reimbursements 1.97% 2.22% 3.07% 3.85% 7.14%
Net investment income, net of
waivers/reimbursements 4.06% 4.16% 4.73% 4.93% 4.90%
Portfolio turnover rate 303% 69% 134% 246% 155%
</TABLE>
See footnote summary on page 68.
49
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
YEAR
<TABLE>
<CAPTION>
MASSACHUSETTS PORTFOLIO
-----------------------------------------------------------------
CLASS C
-----------------------------------------------------------------
YEAR ENDED SEPTEMBER 30,
1999 1998 1997 1996 1995
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $11.38 $11.19 $10.84 $10.49 $10.12
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a) .45(b) .47(b) .51(b) .52(b) .52
Net realized and unrealized gain(loss)
on investment transactions (.65) .44 .58 .45 .39
Net increase (decrease) in net asset
value from operations (.20) .91 1.09 .97 .91
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.45) (.47) (.51) (.52) (.52)
Distributions in excess of net
investment income (.05) (.06) (.03) (.02) (.02)
Distributions from net realized gains (.03) (.19) (.20) (.08) -0-
Total dividends and distributions (.53) (.72) (.74) (.62) (.54)
Net asset value, end of year $10.65 $11.38 $11.19 $10.84 $10.49
TOTAL RETURN
Total investment return based on net
asset value (c) (1.87)% 8.40% 10.52% 9.52% 9.32%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's omitted) $29,365 $18,050 $7,815 $4,514 $2,556
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.42% 1.42% 1.42% 1.31% 1.30%
Expenses, before waivers/
reimbursements 1.96% 2.21% 3.09% 3.84% 7.14%
Net investment income, net of
waivers/reimbursements 4.05% 4.18% 4.75% 4.88% 4.85%
Portfolio turnover rate 303% 69% 134% 246% 155%
</TABLE>
See footnote summary on page 68.
50
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
YEAR
<TABLE>
<CAPTION>
MICHIGAN PORTFOLIO
-----------------------------------------------------------------
CLASS A
-----------------------------------------------------------------
YEAR ENDED SEPTEMBER 30,
1999 1998 1997 1996 1995
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $10.62 $10.52 $10.12 $10.10 $9.35
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a) .46(b) .48(b) .53(b) .52(b) .52
Net realized and unrealized gain (loss)
on investment transactions (.45) .44 .55 .22 .78
Net increase (decrease) in net asset
value from operations .01 .92 1.08 .74 1.30
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.46) (.48) (.53) (.52) (.52)
Distributions in excess of net
investment income (.04) (.05) (.02) (.03) (.03)
Distributions from net realized gains (.07) (.29) (.13) (.17) -0-
Total dividends and distributions (.57) (.82) (.68) (.72) (.55)
Net asset value, end of year $10.06 $10.62 $10.52 $10.12 $10.10
TOTAL RETURN
Total investment return based on net
asset value (c) .03% 9.08% 11.05% 7.54% 14.40%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's omitted) $11,760 $8,640 $5,836 $6,123 $5,158
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements .96% .96% .96% .96% 1.36%
Expenses, before waivers/
reimbursements 1.62% 1.89% 2.46% 2.77% 3.43%
Net investment income, net of
waivers/reimbursements 4.48% 4.57% 5.24% 5.21% 5.27%
Portfolio turnover rate 213% 134% 161% 242% 151%
</TABLE>
See footnote summary on page 68.
51
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
YEAR
<TABLE>
<CAPTION>
MICHIGAN PORTFOLIO
-----------------------------------------------------------------
CLASS B
-----------------------------------------------------------------
YEAR ENDED SEPTEMBER 30,
1999 1998 1997 1996 1995
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $10.61 $10.52 $10.12 $10.10 $9.35
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a) .39(b) .40(b) .46(b) .45(b) .45
Net realized and unrealized gain (loss)
on investment transactions (.45) .44 .55 .22 .78
Net increase (decrease) in net asset
value from operations (.06) .84 1.01 .67 1.23
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.39) (.40) (.46) (.45) (.45)
Distributions in excess of net
investment income (.04) (.06) (.02) (.03) (.03)
Distributions from net realized gains (.07) (.29) (.13) (.17) -0-
Total dividends and distributions (.50) (.75) (.61) (.65) (.48)
Net asset value, end of year $10.05 $10.61 $10.52 $10.12 $10.10
TOTAL RETURN
Total investment return based on net
asset value (c) (.64)% 8.26% 10.30% 6.80% 13.58%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's omitted) $13,844 $9,411 $5,300 $3,553 $2,424
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.66% 1.66% 1.66% 1.66% 2.06%
Expenses, before waivers/
reimbursements 2.44% 2.61% 3.23% 3.48% 4.12%
Net investment income, net of
waivers/reimbursements 3.79% 3.87% 4.53% 4.51% 4.57%
Portfolio turnover rate 213% 134% 161% 242% 151%
</TABLE>
See footnote summary on page 68.
52
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
YEAR
<TABLE>
<CAPTION>
MICHIGAN PORTFOLIO
-----------------------------------------------------------------
CLASS C
-----------------------------------------------------------------
YEAR ENDED SEPTEMBER 30,
1999 1998 1997 1996 1995
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $10.61 $10.52 $10.12 $10.10 $9.35
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a) .40(b) .41(b) .46(b) .45(b) .45
Net realized and unrealized gain (loss)
on investment transactions (.46) .43 .55 .22 .78
Net increase (decrease) in net asset
value from operations (.06) .84 1.01 .67 1.23
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.40) (.41) (.46) (.45) (.45)
Distributions in excess of net
investment income (.03) (.05) (.02) (.03) (.03)
Distributions from net realized gains (.07) (.29) (.13) (.17) -0-
Total dividends and distributions (.50) (.75) (.61) (.65) (.48)
Net asset value, end of year $10.05 $10.61 $10.52 $10.12 $10.10
TOTAL RETURN
Total investment return based on net
asset value (c) (.64)% 8.26% 10.30% 6.80% 13.58%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's omitted) $10,747 $8,983 $5,089 $3,940 $2,886
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.66% 1.66% 1.66% 1.66% 2.06%
Expenses, before waivers/
reimbursements 2.43% 2.59% 3.20% 3.48% 4.13%
Net investment income, net of
waivers/reimbursements 3.78% 3.88% 4.55% 4.50% 4.69%
Portfolio turnover rate 213% 134% 161% 242% 151%
</TABLE>
See footnote summary on page 68.
53
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
YEAR
<TABLE>
<CAPTION>
MINNESOTA PORTFOLIO
-----------------------------------------------------------------
CLASS A
-----------------------------------------------------------------
YEAR ENDED SEPTEMBER 30,
1999 1998 1997 1996 1995
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $10.22 $9.97 $9.58 $9.49 $9.19
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a) .49(b) .50(b) .53(b) .53(b) .53
Net realized and unrealized gain (loss)
on investment transactions (.53) .27 .39 .11 .32
Net increase (decrease) in net asset
value from operations (.04) .77 .92 .64 .85
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.49) (.50) (.53) (.53) (.53)
Distributions in excess of net
investment income (.02) (.02) -0- (.02) (.02)
Total dividends and distributions (.51) (.52) (.53) (.55) (.55)
Net asset value, end of year $9.67 $10.22 $9.97 $9.58 $9.49
TOTAL RETURN
Total investment return based on net
asset value (c) (.48)% 7.94% 9.93% 6.95% 9.63%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's omitted) $10,601 $6,261 $4,120 $3,165 $2,414
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements .75% .75% .75% .72% .71%
Expenses, before waivers/
reimbursements 1.63% 1.80% 2.22% 2.19% 2.30%
Net investment income, net of
waivers/reimbursements 4.90% 4.92% 5.44% 5.54% 5.71%
Portfolio turnover rate 259% 30% 131% 195% 117%
</TABLE>
See footnote summary on page 68.
54
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
YEAR
<TABLE>
<CAPTION>
MINNESOTA PORTFOLIO
-----------------------------------------------------------------
CLASS B
-----------------------------------------------------------------
YEAR ENDED SEPTEMBER 30,
1999 1998 1997 1996 1995
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $10.22 $9.97 $9.58 $9.49 $9.18
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a) .42(b) .42(b) .46(b) .46(b) .46
Net realized and unrealized gain (loss)
on investment transactions (.53) .28 .39 .11 .33
Net increase (decrease) in net asset
value from operations (.11) .70 .85 .57 .79
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.42) (.42) (.46) (.46) (.46)
Distributions in excess of net
investment income (.02) (.03) -0- (.02) (.02)
Total dividends and distributions (.44) (.45) (.46) (.48) (.48)
Net asset value, end of year $9.67 $10.22 $9.97 $9.58 $9.49
TOTAL RETURN
Total investment return based on net
asset value (c) (1.19)% 7.17% 9.13% 6.15% 8.90%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's omitted) $14,111 $13,867 $8,517 $8,291 $7,299
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.46% 1.46% 1.46% 1.42% 1.42%
Expenses, before waivers/
reimbursements 2.43% 2.52% 2.91% 2.89% 3.02%
Net investment income, net of
waivers/reimbursements 4.16% 4.19% 4.75% 4.82% 4.97%
Portfolio turnover rate 259% 30% 131% 195% 117%
</TABLE>
See footnote summary on page 68.
55
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
YEAR
<TABLE>
<CAPTION>
MINNESOTA PORTFOLIO
-----------------------------------------------------------------
CLASS C
YEAR ENDED SEPTEMBER 30,
-----------------------------------------------------------------
1999 1998 1997 1996 1995
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $10.22 $9.97 $9.58 $9.50 $9.19
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a) .42(b) .43(b) .46(b) .46(b) .46
Net realized and unrealized gain (loss)
on investment transactions (.53) .27 .39 .10 .33
Net increase (decrease) in net asset
value from operations (.11) .70 .85 .56 .79
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.42) (.43) (.46) (.46) (.46)
Distributions in excess of net
investment income (.02) (.02) -0- (.02) (.02)
Total dividends and distributions (.44) (.45) (.46) (.48) (.48)
Net asset value, end of year $9.67 $10.22 $9.97 $9.58 $9.50
TOTAL RETURN
Total investment return based on net
asset value (c) (1.19)% 7.18% 9.13% 6.03% 8.89%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's omitted) $9,081 $7,716 $7,358 $6,553 $7,305
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.45% 1.45% 1.45% 1.41% 1.41%
Expenses, before waivers/
reimbursements 2.44% 2.48% 2.89% 2.88% 3.00%
Net investment income, net of
waivers/reimbursements 4.17% 4.23% 4.76% 4.82% 5.05%
Portfolio turnover rate 259% 30% 131% 195% 117%
</TABLE>
See footnote summary on page 68.
56
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
YEAR
<TABLE>
<CAPTION>
NEW JERSEY PORTFOLIO
-----------------------------------------------------------------
CLASS A
-----------------------------------------------------------------
YEAR ENDED SEPTEMBER 30,
1999 1998 1997 1996 1995
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $10.46 $10.15 $9.72 $9.65 $9.07
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a) .49(b) .51(b) .51(b) .51(b) .54
Net realized and unrealized gain (loss)
on investment transactions (.51) .32 .44 .11 .59
Net increase (decrease) in net asset
value from operations (.02) .83 .95 .62 1.13
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.49) (.51) (.51) (.51) (.54)
Distributions in excess of net
investment income (.02) (.01) (.01) (.04) (.01)
Total dividends and distributions (.51) (.52) (.52) (.55) (.55)
Net asset value, end of year $9.93 $10.46 $10.15 $9.72 $9.65
TOTAL RETURN
Total investment return based on net
asset value (c) (.29)% 8.36% 10.01% 6.57% 12.91%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's omitted) $33,109 $22,333 $16,309 $15,520 $11,612
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements .82% .82% .82% .82% .82%
Expenses, before waivers/
reimbursements 1.25% 1.29% 1.34% 1.35% 1.35%
Net investment income, net of
waivers/reimbursements 4.82% 4.93% 5.16% 5.26% 5.73%
Portfolio turnover rate 131% 35% 61% 132% 86%
</TABLE>
See footnote summary on page 68.
57
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
YEAR
<TABLE>
<CAPTION>
NEW JERSEY PORTFOLIO
-----------------------------------------------------------------
CLASS B
-----------------------------------------------------------------
YEAR ENDED SEPTEMBER 30,
1999 1998 1997 1996 1995
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $10.46 $10.16 $9.72 $9.66 $9.07
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a) .42(b) .43(b) .44(b) .44(b) .47
Net realized and unrealized gain (loss)
on investment transactions (.51) .32 .45 .10 .60
Net increase (decrease) in net asset
value from operations (.09) .75 .89 .54 1.07
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.42) (.43) (.44) (.45) (.47)
Distributions in excess of net
investment income (.02) (.02) (.01) (.03) (.01)
Total dividends and distributions (.44) (.45) (.45) (.48) (.48)
Net asset value, end of year $9.93 $10.46 $10.16 $9.72 $9.66
TOTAL RETURN
Total investment return based on net
asset value (c) (.99)% 7.50% 9.32% 5.66% 12.15%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's omitted) $64,929 $48,027 $38,308 $39,099 $34,695
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.53% 1.53% 1.53% 1.53% 1.53%
Expenses, before waivers/
reimbursements 1.99% 2.00% 2.04% 2.05% 2.06%
Net investment income, net of
waivers/reimbursements 4.10% 4.23% 4.45% 4.56% 5.03%
Portfolio turnover rate 131% 35% 61% 132% 86%
</TABLE>
See footnote summary on page 68.
58
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
YEAR
<TABLE>
<CAPTION>
NEW JERSEY PORTFOLIO
-----------------------------------------------------------------
CLASS C
-----------------------------------------------------------------
YEAR ENDED SEPTEMBER 30,
1999 1998 1997 1996 1995
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $10.46 $10.16 $9.72 $9.66 $9.07
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a) .43(b) .43(b) .44(b) .44(b) .47
Net realized and unrealized gain (loss)
on investment transactions (.52) .32 .45 .10 .60
Net increase (decrease) in net asset
value from operations (.09) .75 .89 .54 1.07
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.43) (.43) (.44) (.45) (.47)
Distributions in excess of net
investment income (.01) (.02) (.01) (.03) (.01)
Total dividends and distributions (.44) (.45) (.45) (.48) (.48)
Net asset value, end of year $9.93 $10.46 $10.16 $9.72 $9.66
TOTAL RETURN
Total investment return based on net
asset value (c) (.99)% 7.50% 9.32% 5.66% 12.14%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's omitted) $32,578 $26,018 $21,404 $22,579 $21,255
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.52% 1.52% 1.52% 1.52% 1.52%
Expenses, before waivers/
reimbursements 1.98% 1.99% 2.03% 2.04% 2.06%
Net investment income, net of
waivers/reimbursements 4.12% 4.23% 4.47% 4.56% 5.09%
Portfolio turnover rate 131% 35% 61% 132% 86%
</TABLE>
See footnote summary on page 68.
59
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
YEAR
<TABLE>
<CAPTION>
OHIO PORTFOLIO
-----------------------------------------------------------------
CLASS A
-----------------------------------------------------------------
YEAR ENDED SEPTEMBER 30,
1999 1998 1997 1996 1995
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $10.45 $10.16 $9.61 $9.53 $9.06
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a) .49(b) .52(b) .54(b) .52(b) .54
Net realized and unrealized gain (loss)
on investment transactions (.55) .30 .54 .11 .48
Net increase (decrease) in net asset
value from operations (.06) .82 1.08 .63 1.02
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.49) (.52) (.53) (.53) (.54)
Distributions in excess of net
investment income (.04) (.01) -0- (.02) (.01)
Total dividends and distributions (.53) (.53) (.53) (.55) (.55)
Net sset value, end of year $9.86 $10.45 $10.16 $9.61 $9.53
TOTAL RETURN
Total investment return based on net
asset value (c) (.70)% 8.30% 11.60% 6.72% 11.63%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's omitted) $27,229 $14,220 $7,596 $6,054 $4,170
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements .75% .75% .75% .75% .75%
Expenses, before waivers/
reimbursements 1.30% 1.35% 1.52% 1.48% 1.51%
Net investment income, net of
waivers/reimbursements 4.88% 5.05% 5.49% 5.47% 5.74%
Portfolio turnover rate 208% 16% 104% 182% 108%
</TABLE>
See footnote summary on page 68.
60
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
YEAR
<TABLE>
<CAPTION>
OHIO PORTFOLIO
-----------------------------------------------------------------
CLASS B
-----------------------------------------------------------------
YEAR ENDED SEPTEMBER 30,
1999 1998 1997 1996 1995
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $10.45 $10.16 $9.61 $9.54 $9.06
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a) .43(b) .45(b) .48(b) .46(b) .47
Net realized and unrealized gain (loss)
on investment transactions (.57) .30 .53 .09 .49
Net increase (decrease) in net asset
value from operations (.14) .75 1.01 .55 .96
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.43) (.45) (.46) (.46) (.47)
Distributions in excess of net
investment income (.02) (.01) -0- (.02) (.01)
Total dividends and distributions (.45) (.46) (.46) (.48) (.48)
Net asset value, end of year $9.86 $10.45 $10.16 $9.61 $9.54
TOTAL RETURN
Total investment return based on net
asset value (c) (1.38)% 7.56% 10.80% 5.82% 10.88%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's omitted) $49,055 $37,289 $26,821 $25,334 $21,821
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.46% 1.46% 1.46% 1.46% 1.46%
Expenses, before waivers/
reimbursements 2.01% 2.05% 2.22% 2.18% 2.21%
Net investment income, net of
waivers/reimbursements 4.17% 4.34% 4.81% 4.77% 5.08%
Portfolio turnover rate 208% 16% 104% 182% 108%
</TABLE>
See footnote summary on page 68.
61
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
YEAR
<TABLE>
<CAPTION>
OHIO PORTFOLIO
-----------------------------------------------------------------
CLASS C
-----------------------------------------------------------------
YEAR ENDED SEPTEMBER 30,
1999 1998 1997 1996 1995
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $10.45 $10.16 $9.61 $9.54 $9.06
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a) .43(b) .45(b) .47(b) .46(b) .47
Net realized and unrealized gain (loss)
on investment transactions (.57) .30 .54 .09 .49
Net increase (decrease) in net asset
value from operations (.14) .75 1.01 .55 .96
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.43) (.45) (.46) (.46) (.47)
Distributions in excess of net
investment income (.02) (.01) -0- (.02) (.01)
Total dividends and distributions (.45) (.46) (.46) (.48) (.48)
Net asset value, end of year $9.86 $10.45 $10.16 $9.61 $9.54
TOTAL RETURN
Total investment return based on net
asset value (c) (1.38)% 7.56% 10.80% 5.82% 10.88%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's omitted) $24,126 $16,685 $14,878 $17,203 $18,874
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.45% 1.45% 1.45% 1.45% 1.45%
Expenses, before waivers/
reimbursements 2.01% 2.04% 2.20% 2.16% 2.20%
Net investment income, net of
waivers/reimbursements 4.18% 4.36% 4.81% 4.78% 5.14%
Portfolio turnover rate 208% 16% 104% 182% 108%
</TABLE>
See footnote summary on page 68.
62
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
YEAR
<TABLE>
<CAPTION>
PENNSYLVANIA PORTFOLIO
-----------------------------------------------------------------
CLASS A
-----------------------------------------------------------------
YEAR ENDED SEPTEMBER 30,
1999 1998 1997 1996 1995
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $10.66 $10.33 $9.85 $9.64 $9.18
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a) .49(b) .53(b) .55(b) .49(b) .54
Net realized and unrealized gain (loss)
on investment transactions (.73) .35 .49 .28 .48
Net increase (decrease) in net asset
value from operations (.24) .88 1.04 .77 1.02
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.49) (.53) (.55) (.53) (.54)
Distributions in excess of net
investment income (.04) (.02) (.01) (.03) (.02)
Total dividends and distributions (.53) (.55) (.56) (.56) (.56)
Net asset value, end of year $9.89 $10.66 $10.33 $9.85 $9.64
TOTAL RETURN
Total investment return based on net
asset value (c) (2.43)% 8.72% 10.85% 8.17% 11.53%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's omitted) $62,479 $35,632 $24,948 $21,104 $8,721
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements .95% .95% .95% 1.00% 1.00%
Expenses, before waivers/
reimbursements 1.24% 1.29% 1.40% 1.45% 1.47%
Net investment income, net of
waivers/reimbursements 4.68% 5.10% 5.44% 5.40% 5.78%
Portfolio turnover rate 249% 70% 85% 185% 114%
</TABLE>
See footnote summary on page 68.
63
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
YEAR
<TABLE>
<CAPTION>
PENNSYLVANIA PORTFOLIO
-----------------------------------------------------------------
CLASS B
-----------------------------------------------------------------
YEAR ENDED SEPTEMBER 30,
1999 1998 1997 1996 1995
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
INCOME FROM INVESTMENT OPERATIONS $10.66 $10.33 $9.86 $9.65 $9.18
Net investment income (a) .41(b) .46(b) .47(b) .46(b) .47
Net realized and unrealized gain (loss)
on investment transactions (.73) .34 .49 .24 .49
Net increase (decrease) in net asset
value from operations (.32) .80 .96 .70 .96
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.41) (.46) (.47) (.46) (.47)
Distributions in excess of net
investment income (.04) (.01) (.02) (.03) (.02)
Total dividends and distributions (.45) (.47) (.49) (.49) (.49)
Net asset value, end of year $9.89 $10.66 $10.33 $9.86 $9.65
TOTAL RETURN
Total investment return based on net
asset value (c) (3.10)% 7.98% 9.95% 7.38% 10.78%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's omitted) $52,012 $39,465 $30,078 $30,440 $28,559
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.66% 1.66% 1.66% 1.71% 1.71%
Expenses, before waivers/
reimbursements 1.98% 2.00% 2.09% 2.15% 2.17%
Net investment income, net of
waivers/reimbursements 3.96% 4.39% 4.72% 4.69% 5.09%
Portfolio turnover rate 249% 70% 85% 185% 114%
</TABLE>
See footnote summary on page 68.
64
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
YEAR
<TABLE>
<CAPTION>
PENNSYLVANIA PORTFOLIO
-----------------------------------------------------------------
CLASS C
-----------------------------------------------------------------
YEAR ENDED SEPTEMBER 30,
1999 1998 1997 1996 1995
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $10.66 $10.33 $9.86 $9.65 $9.18
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a) .41(b) .46(b) .47(b) .46(b) .47
Net realized and unrealized gain (loss)
on investment transactions (.73) .34 .49 .24 .49
Net increase (decrease) in net asset
value from operations (.32) .80 .96 .70 .96
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.41) (.46) (.47) (.46) (.47)
Distributions in excess of net
investment income (.04) (.01) (.02) (.03) (.02)
Total dividends and distributions (.45) (.47) (.49) (.49) (.49)
Net asset value, end of year $9.89 $10.66 $10.33 $9.86 $9.65
TOTAL RETURN
Total investment return based on net
asset value (c) (3.10)% 7.98% 9.95% 7.37% 10.78%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's omitted) $27,916 $17,531 $15,486 $13,996 $15,052
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.65% 1.65% 1.65% 1.70% 1.70%
Expenses, before waivers/
reimbursements 1.98% 1.99% 2.10% 2.14% 2.17%
Net investment income, net of
waivers/reimbursements 3.98% 4.41% 4.73% 4.69% 5.09%
Portfolio turnover rate 249% 70% 85% 185% 114%
</TABLE>
See footnote summary on page 68.
65
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
YEAR
<TABLE>
<CAPTION>
VIRGINIA PORTFOLIO
-----------------------------------------------------------------
CLASS A
-----------------------------------------------------------------
YEAR ENDED SEPTEMBER 30,
1999 1998 1997 1996 1995
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $11.02 $10.90 $10.58 $10.29 $9.69
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a) .49(b) .52(b) .57(b) .57(b) .56
Net realized and unrealized gain (loss)
on investment transactions (.60) .49 .57 .37 .61
Net increase (decrease) in net asset
value from operations (.11) 1.01 1.14 .94 1.17
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.49) (.52) (.57) (.57) (.56)
Distributions in excess of net
investment income (.07) (.05) -0- -0- (.01)
Distributions from net realized gains (.03) (.32) (.25) (.08) -0-
Total dividends and distributions (.59) (.89) (.82) (.65) (.57)
Net asset value, end of year $10.32 $11.02 $10.90 $10.58 $10.29
TOTAL RETURN
Total investment return based on net
asset value (c) (1.10)% 9.65% 11.32% 9.39% 12.46%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's omitted) $28,148 $10,315 $3,530 $2,455 $1,855
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements .67% .67% .67% .67% .67%
Expenses, before waivers/
reimbursements 1.43% 2.09% 3.57% 5.18% 8.96%
Net investment income, net of
waivers/reimbursements 4.67% 4.84% 5.39% 5.39% 5.59%
Portfolio turnover rate 311% 62% 258% 298% 128%
</TABLE>
See footnote summary on page 68.
66
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
YEAR
<TABLE>
<CAPTION>
VIRGINIA PORTFOLIO
-----------------------------------------------------------------
CLASS B
-----------------------------------------------------------------
YEAR ENDED SEPTEMBER 30,
1999 1998 1997 1996 1995
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $11.01 $10.90 $10.57 $10.29 $9.69
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a) .42(b) .44(b) .50(b) .50(b) .49
Net realized and unrealized gain (loss)
on investment transactions (.60) .49 .58 .36 .61
Net increase (decrease) in net asset
value from operations (.18) .93 1.08 .86 1.10
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.42) (.44) (.50) (.50) (.49)
Distributions in excess of net
investment income (.07) (.06) -0- -0- (.01)
Distributions from net realized gains (.03) (.32) (.25) (.08) -0-
Total dividends and distributions (.52) (.82) (.75) (.58) (.50)
Net asset value, end of year $10.31 $11.01 $10.90 $10.57 $10.29
TOTAL RETURN
Total investment return based on net
asset value (c) (1.73)% 8.85% 10.70% 8.57% 11.67%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's omitted) $42,007 $15,973 $5,020 $3,345 $1,193
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.37% 1.37% 1.37% 1.37% 1.37%
Expenses, before waivers/
reimbursements 2.20% 2.84% 4.29% 5.88% 9.66%
Net investment income, net of
waivers/reimbursements 3.97% 4.14% 4.68% 4.70% 4.80%
Portfolio turnover rate 311% 62% 258% 298% 128%
</TABLE>
See footnote summary on page 68.
67
ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
YEAR
<TABLE>
<CAPTION>
VIRGINIA PORTFOLIO
-----------------------------------------------------------------
CLASS C
-----------------------------------------------------------------
YEAR ENDED SEPTEMBER 30,
1999 1998 1997 1996 1995
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $11.01 $10.90 $10.57 $10.29 $9.70
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a) .42(b) .44(b) .50(b) .50(b) .49
Net realized and unrealized gain (loss)
on investment transactions (.60) .49 .58 .36 .60
Net increase (decrease) in net asset
value from operations (.18) .93 1.08 .86 1.09
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.42) (.44) (.50) (.50) (.49)
Distributions in excess of net
investment income (.07) (.06) -0- -0- (.01)
Distributions from net realized gains (.03) (.32) (.25) (.08) -0-
Total dividends and distributions (.52) (.82) (.75) (.58) (.50)
Net asset value, end of year $10.31 $11.01 $10.90 $10.57 $10.29
TOTAL RETURN
Total investment return based on net
asset value (c) (1.73)% 8.85% 10.70% 8.58% 11.56%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's omitted) $12,962 $4,597 $1,207 $642 $122
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements 1.37% 1.37% 1.37% 1.37% 1.37%
Expenses, before waivers/
reimbursements 2.19% 2.85% 4.25% 5.88% 9.66%
Net investment income, net of
waivers/reimbursements 3.97% 4.11% 4.66% 4.73% 4.81%
Portfolio turnover rate 311% 62% 258% 298% 128%
</TABLE>
(a) Net of fee waived and expenses reimbursed by the Adviser.
(b) Based on average shares.
(c) 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.
68
REPORT OF ERNST & YOUNG LLP
INDEPENDENT AUDITORS ALLIANCE MUNICIPAL INCOME FUND II
_______________________________________________________________________________
TO THE SHAREHOLDERS AND BOARD OF TRUSTEES
ALLIANCE MUNICIPAL INCOME FUND II
We have audited the accompanying statements of assets and liabilities,
including the portfolios of investments, of Alliance Municipal Income Fund II
(comprising, respectively, the Arizona, Florida, Massachusetts, Michigan,
Minnesota, New Jersey, Ohio, Pennsylvania and Virginia Portfolios), as of
September 30, 1999, and the related statements of operations for the year then
ended, the statements of changes in net assets for each of the two years in the
period then ended, and the financial highlights for each of the periods
indicated therein. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights. Our procedures included confirmation of
securities owned as of September 30, 1999, by correspondence with the custodian
and brokers. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the respective portfolios constituting the Alliance Municipal Income Fund II
at September 30, 1999, the results of their operations for the year then ended,
the changes in their net assets for each of the two years in the period then
ended, and the financial highlights for each of the indicated periods, in
conformity with generally accepted accounting principles.
New York, New York
November 4, 1999
FEDERAL TAX INFORMATION (UNAUDITED)
_______________________________________________________________________________
In accordance with Federal tax law, the following table represents each
portfolio's designation of "exempt-interest dividends" and long-term capital
gain distributions paid during the fiscal year ended September 30, 1999.
As required by Federal tax law rules, shareholders will receive notification of
their portion of each portfolio's taxable ordinary dividends (if any) and
capital gain distributions (if any) paid for the 1999 calendar year on Form
1099-DIV which will be mailed by January 31, 2000.
EXEMPT-INTEREST LONG-TERM CAPITAL
PORTFOLIO DIVIDENDS GAIN DISTRIBUTIONS
- --------- --------------- ------------------
Arizona 2,605,646 116,521
Florida 7,479,184 -0-
Massachusetts 4,257,237 56,799
Michigan 1,318,425 1,358
Minnesota 1,381,310 -0-
New Jersey 4,991,913 -0-
Ohio 3,779,032 -0-
Pennsylvania 5,189,166 -0-
Virginia 2,423,099 -0-
69
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
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.
70
THE ALLIANCE FAMILY OF MUTUAL FUNDS
_______________________________________________________________________________
FIXED INCOME
Alliance Bond Fund
U.S. Government Portfolio
Corporate Bond Portfolio
Quality 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 Health Care 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
71
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.
MUNIIIAR
