TAX-EXEMPT INCOME
Alliance Municipal
Income Fund II
Annual Report
September 30, 2000
[GRAPHIC OMITTED]
AllianceCapital[LOGO](R)
The Investment Professional's Choice
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Investment Products Offered
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o Are Not FDIC Insured
o May Lose Value
o Are Not Bank Guaranteed
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This shareholder report must be preceded or accompanied by the Fund's prospectus
for individuals who are not current shareholders of the Fund.
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LETTER TO SHAREHOLDERS
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LETTER TO SHAREHOLDERS
October 26, 2000
Dear Shareholder:
This report provides municipal market activity and investment results for
Alliance Municipal Income Fund II ("the Fund") for the annual reporting period
ended September 30, 2000.
Investment Objectives and Policies
The nine portfolios of this open-end Fund, 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.
INVESTMENT RESULTS*
Periods Ended September 30, 2000
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Total Returns
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Portfolio 6 Months 12 Months
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Arizona 4.05% 6.17%
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Florida 4.26% 5.10%
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Massachusetts 4.22% 4.86%
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Michigan 4.43% 6.39%
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Minnesota 4.13% 6.09%
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New Jersey 4.83% 5.31%
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Ohio 4.20% 4.54%
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Pennsylvania 3.93% 5.35%
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Virginia 4.13% 5.88%
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Lehman Brothers
Municipal
Bond Index 3.97% 6.17%
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ALLIANCE MUNICIPAL INCOME FUND II--CLASS A SHARES
Periods Ended September 30, 2000
1 Year Since
Fund 1 Year 5 Year Inception Overall
Portfolio Lipper Lipper Lipper Morningstar
Portfolio Total Returns* Rankings** Rankings** Rankings** Ratings***
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Arizona 6.17% 2/39 1/33 1/22 5
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Florida 5.10% 20/64 1/57 2/25 5
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Massachusetts 4.86% 28/57 1/48 1/33 4
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Michigan 6.39% 2/43 1/36 1/27 5
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Minnesota 6.09% 1/51 1/44 1/21 4
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New Jersey 5.31% 8/59 1/44 1/26 4
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Ohio 4.54% 23/50 1/45 2/26 5
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Pennsylvania 5.35% 8/62 1/55 1/35 4
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Virginia 5.88% 3/36 1/33 1/27 5
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Number of Funds in Morningstar Municipal Bond Fund Category 1720
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* The Fund's investment results represent total returns for the periods
shown and are based on the net asset value of Class A shares as of
September 30, 2000. All fees and expenses related to the operation of the
Fund have been deducted, but no
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ALLIANCE MUNICIPAL INCOME FUND II o 1
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LETTER TO SHAREHOLDERS
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adjustment has been made for sales charges that may apply when shares are
purchased or redeemed. Returns for the Fund include the reinvestment of
any distributions paid during the period. Past performance is no guarantee
of future results.
** Lipper Rankings are based on each 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, and its results are not indicative
of any specific investment, including Alliance Municipal Income Fund II.
*** Morningstar proprietary ratings reflect historical risk-adjusted
performance as of September 30, 2000. Each Portfolio's Class A 3- and
5-year Morningstar ratings were: Arizona 4 stars and 5 stars; Florida 4
stars and 5 stars; Massachusetts 3 stars and 5 stars; Michigan 4 stars and
5 stars; Minnesota 4 stars and 4 stars; New Jersey 4 stars and 4 stars;
Ohio 4 stars and 5 stars; Pennsylvania 3 stars and 4 stars; and Virginia 4
stars and 5 stars. Ratings 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. Ratings can change
monthly. Each Portfolio's SEC average annual total returns can be found on
page 15.
Additional performance information can be found on pages 7-15.
MUNICIPAL INCOME FUND II--CLASS A SHARES COMPARED TO
LIPPER MUNICIPAL DEBT FUNDS AVERAGE*
Periods Ended September 30, 2000
<TABLE>
<CAPTION>
Fund Portfolio Fund Portfolio Lipper
Total Returns Lipper Fund Portfolio Lipper Total Returns Average
(at NAV) Average Total Returns Average Since Since
Portfolio 12 Months 12 Months 5 Years 5 Years Inception Inception
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Arizona 6.17% 4.77% 6.45% 4.84% 6.84% 5.64%
----------------------------------------------------------------------------------
Florida 5.10% 4.62% 5.98% 4.70% 5.39% 4.58%
----------------------------------------------------------------------------------
Massachusetts 4.86% 4.79% 6.75% 4.69% 7.41% 5.39%
----------------------------------------------------------------------------------
Michigan 6.39% 4.75% 6.74% 4.72% 6.70% 4.65%
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Minnesota 6.09% 4.16% 6.03% 4.52% 5.26% 4.56%
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New Jersey 5.31% 4.45% 5.94% 4.57% 5.42% 4.51%
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Ohio 4.54% 4.54% 6.02% 4.66% 5.32% 4.66%
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Pennsylvania 5.35% 4.39% 6.04% 4.63% 5.52% 4.56%
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Virginia 5.88% 4.83% 6.94% 4.94% 7.18% 5.57%
----------------------------------------------------------------------------------
</TABLE>
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2 o ALLIANCE MUNICIPAL INCOME FUND II
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LETTER TO SHAREHOLDERS
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* Total returns for the Fund's portfolios are based on the net asset value
(NAV) of Class A shares as of September 30, 2000. 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. Returns for the Fund include the reinvestment of any
distributions paid during the period. 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. An investor cannot
invest directly in an average, and its results are not indicative of any
specific investment, including Alliance Municipal Income Fund II.
Investment Results
Each of the Fund's portfolio's Class A share total returns at net asset value
(NAV) for the six- and 12-month periods ended September 30, 2000 are shown on
the first page along with the Fund's benchmark, the Lehman Brothers Municipal
Bond Index and a comparison to the portfolio's peer groups, as measured by the
Municipal Debt Funds Average for each state. The Lehman Brothers Municipal Bond
Index is a total return performance benchmark for the long-term,
investment-grade, tax-exempt bond market. The Lipper Municipal Debt Funds
Average is comprised of funds with generally similar investment objectives to
your Fund's portfolios, although some may have different investment policies.
Over the past year, the Fund's portfolios, for the most part, underperformed the
Lehman Brothers Municipal Bond Index, but outperformed their respective Lipper
Averages when measured against the various state-specific peer groups. The
Fund's underperformance versus its benchmark is a result of the benchmark's
composition relative to the Fund. The benchmark is comprised of shorter, more
actively traded bonds, while the Fund tends to focus on longer maturity bonds
for specific states. While the benchmark's shorter term bonds fared better
during the period under review, our strategy is to focus on longer term bonds in
specific states with longer periods of call protection. Over the long-term, the
Fund's portfolios have consistently outperformed their respective Lipper peer
groups for the periods shown in the accompanying table on the previous pages.
Year-to-date, due to portfolio repositioning, we have outperformed the Fund's
portfolio's peer groups. We believe that this timely and strategic portfolio
repositioning will lead to consistent, superior long-term performance.
Investment Strategy
Market conditions over the past year allowed us to continue pursuing our
long-held investment strategy of maximizing current income while protecting
against the risk of early redemption of bonds we hold with attractive coupon
rates. During the market downturn earlier this year, we aggressively
repositioned the portfolios by selling shorter duration securities in favor of
bonds with equal or higher coupons, but longer periods of call protection. For
long-term investors such as ourselves, call protection is crucial because it
protects against reinvestment
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ALLIANCE MUNICIPAL INCOME FUND II o 3
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LETTER TO SHAREHOLDERS
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risk: when rates decline, call-protected bonds restrict the ability of borrowers
to pay down the debt prior to the first optional call date. Because we actively
seek out call-protected bonds for our portfolios when interest rates are high,
as interest rates decline, our portfolios benefit from enhanced price
appreciation potential and above-market interest income. Our investment strategy
relies on the premise that over time, call protection and strong current income
will deliver better performance than alternative strategies.
A second portion of our investment strategy is to rely upon strong fundamental
research into the credit quality of the issuers of the tax-exempt securities we
purchase. By having a dedicated research capability, we are able to look beyond
the credit ratings of a given issue assigned by the rating agencies to make our
own assessment of the relative value of the offering. Also, many smaller bond
issues come to market without credit ratings or as non-rated securities. Our
research team specializes in identifying which non-rated issuers offer the best
chance for continuing credit improvement, giving us a key competitive advantage
in the market. In addition to the work with non-rated securities, our research
process has supported investment decisions to both purchase lower-rated
securities with improving credit fundamentals and to sell higher-rated
securities with deteriorating financial strength.
The third leg of our investment strategy is to take maximum advantage of price
declines in the portfolio to offset future taxable gains. Because only the
interest earned from municipal bonds is tax-exempt, we must be careful to avoid
realizing net gains from price appreciation that could cause us to include
taxable income in distributions from the funds. To help manage the tax position
of the portfolios, during market downturns we will sell, at a loss, securities
which have performed well individually but are priced below our cost. This
creates a tax-loss carry forward that we can use during strong markets to offset
gains from sales or more often, early redemptions of other bonds in the
portfolios.
Market Overview
For the fiscal year ended September 30, 2000, municipal bonds delivered strong
after-tax performance both on an absolute basis and relative to other fixed
income sectors. The Lehman Brothers Municipal Bond Index outperformed its
comparable taxable bond U.S. Aggregate Bond Index by 1.89% on an after-tax
basis. The path to this performance, however, has been anything but smooth.
After declining in late 1999, municipal bond prices remained in a narrow trading
range for the first six months of this year. Over the summer months, however,
municipal bond prices rebounded sharply with price gains of over 4%. We believe
the rally in municipal bond prices was caused by the strong improvement in the
U.S. Treasury bond market, the ongoing dearth of new issues, and continued
demand for municipal bonds from individual investors. Despite the relative
strength of the municipal bond market, however, municipal bond yields are still
higher than after-tax yields on comparable Treasury and corporate bonds. We
believe this yield differential makes municipal bonds one
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4 o ALLIANCE MUNICIPAL INCOME FUND II
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----------------------
LETTER TO SHAREHOLDERS
----------------------
of the most attractive investments in the fixed income markets today.
Federal Reserve policy and U.S. Treasury Department policies have significantly
impacted municipal bond prices this year. The Federal Reserve Board's three
short-term interest rate hikes over the past nine months, and the uncertainty
regarding future Federal Reserve Board policy decisions, has led to considerable
market volatility. As the summer progressed and inflationary pressures subsided,
pressure for additional rate hikes subsided. This emerging consensus among
investors that the Federal Reserve would leave short-term rates unchanged
contributed to higher prices on long-term bonds. The U.S. Treasury's ongoing
repurchase of outstanding Treasury bonds and notes has also helped bond prices,
along with reduced issuance of new government debt, because of the large federal
budget surplus.
The most significant technical factor driving the direction of municipal bond
prices has been the imbalance between supply and demand. Increased demand for
municipal bonds continues to outstrip the available supply, pushing prices of
outstanding issues higher. In the current interest rate environment, few
municipal issuers find it economic to issue new bonds to refinance older debt.
As a result, the supply of new tax-exempt bond issues year-to-date was down 20%
when compared to the first nine months of 1999. On the demand side, traditional
buyers of municipal bonds are now competing with a new group of investors
seeking to conservatively invest new wealth created from their employment or
investments in the technology sector of the economy. Despite the recent stock
market downturn, we anticipate this new source of demand for municipal debt to
remain quite strong well into the future.
The overall strong fiscal health of state and local governments has continued to
improve the credit quality of municipal bonds. Fed by record sales and income
tax collections, state and local governments have been able to strengthen their
balance sheets by paying down higher cost debt, creating "rainy day" funds and
establishing other financial controls. This improving credit trend is supported
by data from the major bond credit rating services, Moody's and Standard &
Poor's. For example, Moody's reports that municipal bond credit upgrades
outpaced downgrades six to one, on a dollar volume basis, for the first half of
2000.
Outlook
The outlook for the municipal bond market remains favorable. The fundamental
strength of the domestic U.S. economy will continue to benefit the fiscal health
of state and local governments. As a result, we expect to see the improving
credit quality trend in the municipal bond market continuing. On the macro
level, we anticipate that the Federal Reserve will remain vigilant in its
efforts to contain the risk of inflation. Despite rising oil prices and other
inflationary pressures, we believe that productivity improvements in the
workplace and the large savings base created by the 1990s bull market in
equities will constrain price inflation. We anticipate that markets will remain
somewhat volatile due to high oil prices, political uncertainty and global
insta-
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ALLIANCE MUNICIPAL INCOME FUND II o 5
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LETTER TO SHAREHOLDERS
----------------------
bility in regions such as the Middle East. However, the long-term trend towards
lower inflation and lower interest rates should continue.
A broader demographic trend that is benefiting municipal bonds is the aging of
our population in a time when life expectancies are increasing. Retirees are
turning to municipal bonds for the same reasons as younger technology
entrepreneurs: safety and tax-exempt income. Volatility in stock market prices
also contributes to individuals and financial advisors seeking a safe haven for
assets in municipal bonds.
[PHOTO] John D.
Carifa
[PHOTO] Susan P.
Keenan
Portfolio Manager, Susan P. Keenan, also heads the Municipal Bond Department.
She has over 20 years of investment experience.
Our strategy in managing your assets has always been long-term in perspective.
In the current market, volatility enhances our ability to reposition your
portfolios. We view increases in interest rates as a buying opportunity. On
those occasions, we will look to improve the level of tax exempt income earned,
reduce the Fund's exposure to reinvestment risk and seek out municipal bonds
with improving credit potential.
The Alliance Municipal Income team is proud of the strong performance we have
delivered over the past 12 months and our excellent long-term investment record.
We look forward to the opportunity to serve our shareholders over the next year.
Sincerely,
/s/ John D. Carifa
John D. Carifa
Chairman and President
/s/ Susan P. Keenan
Susan P. Keenan
Senior Vice President
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6 o ALLIANCE MUNICIPAL INCOME FUND II
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PERFORMANCE UPDATE
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PERFORMANCE UPDATE
ALLIANCE MUNICIPAL INCOME FUND II
GROWTH OF A $10,000 INVESTMENT
Arizona Portfolio
6/30/94 to 9/30/00
[MOUNTAIN CHART OMITTED]
Arizona Portfolio
Class A at NAV: $15,285
Arizona Portfolio
Class A at offering: $14,634
Lipper AZ Muni Funds Average: $14,096
Florida Portfolio
6/30/93 to 9/30/00
[MOUNTAIN CHART OMITTED]
Florida Portfolio
Class A at NAV: $14,645
Florida Portfolio
Class A at offering: $14,028
Lipper FL Muni Funds Average: $13,842
Massachusetts Portfolio
3/31/94 to 9/30/00
[MOUNTAIN CHART OMITTED]
Massachusetts Portfolio
Class A at NAV: $15,898
Massachusetts Portfolio
Class A at offering: $15,228
Lipper MA Muni Funds Average: $14,072
Please see mountain chart footnotes on page 10.
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ALLIANCE MUNICIPAL INCOME FUND II o 7
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PERFORMANCE UPDATE
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PERFORMANCE UPDATE
ALLIANCE MUNICIPAL INCOME FUND II
GROWTH OF A $10,000 INVESTMENT
Michigan Portfolio
2/28/94 to 9/30/00
[MOUNTAIN CHART OMITTED]
Michigan Portfolio
Class A at NAV: $15,344
Michigan Portfolio
Class A at offering: $14,697
Lipper MI Muni
Funds Average: $13,501
Minnesota Portfolio
6/30/93 to 9/30/00
[MOUNTAIN CHART OMITTED]
Minnesota Portfolio
Class A at NAV: $14,507
Minnesota Portfolio
Class A at offering: $13,895
Lipper MN Muni
Funds Average: $13,823
New Jersey Portfolio
6/30/93 to 9/30/00
[MOUNTAIN CHART OMITTED]
New Jersey Portfolio
Class A at NAV: $14,674
New Jersey Portfolio
Class A at offering: $14,056
Lipper NJ Muni
Funds Average: $13,775
Please see mountain chart footnotes on page 10.
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8 o ALLIANCE MUNICIPAL INCOME FUND II
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PERFORMANCE UPDATE
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PERFORMANCE UPDATE
ALLIANCE MUNICIPAL INCOME FUND II
GROWTH OF A $10,000 INVESTMENT
Ohio Portfolio
6/30/93 to 9/30/00
[MOUNTAIN CHART OMITTED]
Ohio Portfolio
Class A at NAV: $14,567
Ohio Portfolio
Class A at offering: $13,953
Lipper OH Muni
Funds Average: $13,920
Pennsylvania Portfolio
6/30/93 to 9/30/00
[MOUNTAIN CHART OMITTED]
Pennsylvania Portfolio
Class A at NAV: $14,780
Pennsylvania Portfolio
Class A at offering: $14,157
Lipper PA Muni
Funds Average: $13,826
Please see mountain chart footnotes on page 10.
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ALLIANCE MUNICIPAL INCOME FUND II o 9
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PERFORMANCE UPDATE
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PERFORMANCE UPDATE
ALLIANCE MUNICIPAL INCOME FUND II
GROWTH OF A $10,000 INVESTMENT
Virginia Portfolio
4/30/94 to 9/30/00
[MOUNTAIN CHART OMITTED]
Virginia Portfolio
Class A at NAV: $15,612
Virginia Portfolio
Class A at offering: $14,954
Lipper VA Muni
Funds Average: $14,171
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 closest
month-end after each Portfolio's inception date through 9/30/00). The charts
reflect the deduction of the maximum 4.25% sales charges from initial $10,000
investments in the Portfolios and assume the reinvestment of dividends and
capital gains. Performance at NAV (net asset value) does not reflect sales
charges, which would 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 these 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 33 funds; the Lipper Michigan Municipal Debt Funds Average
reflects performance of 27 funds; the Lipper Minnesota Municipal Debt Funds
Average reflects performance of 21 funds; the Lipper New Jersey Municipal Debt
Funds Average reflects performance of 26 funds; the Lipper Ohio Municipal Debt
Funds Average reflects performance of 26 funds; the Lipper Pennsylvania
Municipal Debt Funds Average reflects performance of 35 funds; and the Lipper
Virginia Municipal Debt Funds Average reflects performance of 27 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 II Portfolio to the
corresponding Lipper Average, you should note that no charges are reflected in
the performance of the Lipper Averages.
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10 o ALLIANCE MUNICIPAL INCOME FUND II
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PORTFOLIO SUMMARY
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PORTFOLIO SUMMARY
September 30, 2000
ARIZONA PORTFOLIO
(CLASS A SHARES)
BOND QUALITY RATING [PIE CHART OMITTED]
50.08% AAA
15.03% AA
11.85% A
13.60% BBB
9.44% NR
INCEPTION DATE
(Class A Shares)
6/1/94
FLORIDA PORTFOLIO
(CLASS A SHARES)
BOND QUALITY RATING [PIE CHART OMITTED]
44.70% AAA
2.98% AA
8.13% A
20.30% BBB
23.89% NR
INCEPTION DATE
(Class A Shares)
6/25/93
MASSACHUSETTS PORTFOLIO
(CLASS A SHARES)
BOND QUALITY RATING [PIE CHART OMITTED]
40.56% AAA
20.96% AA
2.62% A
35.86% BBB
INCEPTION DATE
(Class A Shares)
3/29/94
All data as of September 30, 2000. Each portfolio's quality breakdown is
expressed as a percentage of the portfolio's total investments and may vary over
time.
NR: non-rated.
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ALLIANCE MUNICIPAL INCOME FUND II o 11
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PORTFOLIO SUMMARY
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PORTFOLIO SUMMARY
September 30, 2000
MICHIGAN PORTFOLIO
(CLASS A SHARES)
BOND QUALITY RATING [PIE CHART OMITTED]
36.83% AAA
5.67% AA
28.35% A
19.89% BBB
9.26% NR
INCEPTION DATE
(Class A Shares)
2/25/94
MINNESOTA PORTFOLIO
(CLASS A SHARES)
BOND QUALITY RATING [PIE CHART OMITTED]
53.12% AAA
17.28% AA
3.35% A
15.45% BBB
10.80% NR
INCEPTION DATE
(Class A Shares)
6/25/93
NEW JERSEY PORTFOLIO
(CLASS A SHARES)
BOND QUALITY RATING [PIE CHART OMITTED]
43.30% AAA
2.52% AA
12.04% A
21.87% BBB
20.27% NR
INCEPTION DATE
(Class A Shares)
6/25/93
All data as of September 30, 2000. Each portfolio's quality breakdown is
expressed as a percentage of the portfolio's total investments and may vary over
time.
NR: non-rated.
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12 o ALLIANCE MUNICIPAL INCOME FUND II
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PORTFOLIO SUMMARY
-----------------
PORTFOLIO SUMMARY
September 30, 2000
OHIO PORTFOLIO
(CLASS A SHARES)
BOND QUALITY RATING [PIE CHART OMITTED]
18.25% AAA
2.14% AA
22.77% A
56.84% BBB
INCEPTION DATE
(Class A Shares)
6/25/93
PENNSYLVANIA PORTFOLIO
(CLASS A SHARES)
BOND QUALITY RATING [PIE CHART OMITTED]
39.97% AAA
25.00% AA
4.20% A
29.87% BBB
0.96% NR
INCEPTION DATE
(Class A Shares)
6/25/93
VIRGINIA PORTFOLIO
(CLASS A SHARES)
BOND QUALITY RATING [PIE CHART OMITTED]
18.26% AAA
20.99% AA
21.16% A
36.32% BBB
3.27% NR
INCEPTION DATE
(Class A Shares)
4/29/94
All data as of September 30, 2000. Each portfolio's quality breakdown is
expressed as a percentage of the portfolio's total investments and may vary over
time.
NR: non-rated.
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ALLIANCE MUNICIPAL INCOME FUND II o 13
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INVESTMENT RESULTS
------------------
INVESTMENT RESULTS
Average Annual Total Returns as of September 30, 2000
<TABLE>
<CAPTION>
Without Sales Charge With Sales Charge
----------------------------------------------------------------------------------------
Since Since
1 Year 5 Years Inception 1 Year 5 Years Inception
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Arizona Portfolio
Class A 6.17% 6.45% 6.84% 1.67% 5.53% 6.10%
Class B 5.45% 5.73% 6.39% 2.45% 5.73% 6.39%
Class C 5.45% 5.71% 6.09% 4.45% 5.71% 6.09%
Florida Portfolio
Class A 5.10% 5.98% 5.39% 0.59% 5.05% 4.77%
Class B 4.43% 5.24% 4.77% 1.44% 5.24% 4.77%
Class C 4.43% 5.24% 4.64% 3.44% 5.24% 4.64%
Massachusetts Portfolio
Class A 4.86% 6.75% 7.40% 0.44% 5.81% 6.67%
Class B 4.06% 6.02% 7.29% 1.08% 6.02% 7.29%
Class C 4.06% 6.03% 6.64% 3.07% 6.03% 6.64%
Michigan Portfolio
Class A 6.39% 6.74% 6.70% 1.84% 5.82% 6.01%
Class B 5.65% 6.01% 6.03% 2.65% 6.01% 6.03%
Class C 5.55% 5.99% 5.94% 4.55% 5.99% 5.94%
Minnesota Portfolio
Class A 6.09% 6.03% 5.26% 1.58% 5.11% 4.63%
Class B 5.32% 5.26% 4.60% 2.32% 5.26% 4.60%
Class C 5.32% 5.23% 4.48% 4.32% 5.23% 4.48%
New Jersey Portfolio
Class A 5.31% 5.94% 5.42% 0.84% 5.01% 4.79%
Class B 4.53% 5.15% 4.79% 1.53% 5.15% 4.79%
Class C 4.63% 5.17% 4.67% 3.63% 5.17% 4.67%
Ohio Portfolio
Class A 4.54% 6.02% 5.32% 0.08% 5.11% 4.69%
Class B 3.78% 5.24% 4.67% 0.80% 5.24% 4.67%
Class C 3.78% 5.24% 4.55% 2.78% 5.24% 4.55%
Pennsylvania Portfolio
Class A 5.35% 6.04% 5.52% 0.86% 5.11% 4.90%
Class B 4.58% 5.25% 4.90% 1.58% 5.25% 4.90%
Class C 4.58% 5.25% 4.76% 3.58% 5.25% 4.76%
Virginia Portfolio
Class A 5.88% 6.94% 7.18% 1.36% 6.00% 6.46%
Class B 5.16% 6.22% 6.49% 2.16% 6.22% 6.49%
Class C 5.06% 6.20% 6.43% 4.06% 6.20% 6.43%
</TABLE>
The Fund's investment results represent average annual total returns. The
returns reflect reinvestment of dividends and/or capital gains distributions in
additional shares without and with 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.
Price fluctuation may be caused by changes in the general level of interest
rates or changes in bond credit quality ratings. Changes in interest rates have
a greater effect on bonds with longer maturities than on those with shorter
maturities.
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.
--------------------------------------------------------------------------------
14 o ALLIANCE MUNICIPAL INCOME FUND II
<PAGE>
------------------
INVESTMENT RESULTS
------------------
INVESTMENT RESULTS
As of September 30, 2000
ALLIANCE MUNICIPAL INCOME FUND II
--------------------------------------------------------------------------------
Taxable-Equivalent Yield in
30 Day SEC Yield* 36% Tax Bracket (at NAV)**
--------------------------------------------------------------------------------
Arizona Portfolio
Class A 4.99% 8.57%
Class B 4.51% 7.49%
Class C 4.51% 7.49%
Florida Portfolio
Class A 5.25% 8.42%
Class B 4.77% 7.28%
Class C 4.77% 7.28%
Massachusetts Portfolio
Class A 5.15% 8.94%
Class B 4.68% 7.84%
Class C 4.68% 7.84%
Michigan Portfolio
Class A 5.08% 8.56%
Class B 4.61% 7.45%
Class C 4.62% 7.47%
Minnesota Portfolio
Class A 5.26% 9.22%
Class B 4.76% 8.05%
Class C 4.78% 8.05%
New Jersey Portfolio
Class A 5.04% 8.86%
Class B 4.55% 7.64%
Class C 4.55% 7.63%
Ohio Portfolio
Class A 5.12% 9.15%
Class B 4.62% 8.01%
Class C 4.63% 8.01%
Pennsylvania Portfolio
Class A 5.12% 8.65%
Class B 4.63% 7.52%
Class C 4.64% 7.52%
Virginia Portfolio
Class A 5.21% 8.84%
Class B 4.74% 7.73%
Class C 4.75% 7.73%
* SEC yields are based on SEC guidelines and are calculated on 30 days ended
September 30, 2000.
** 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.
--------------------------------------------------------------------------------
ALLIANCE MUNICIPAL INCOME FUND II o 15
<PAGE>
------------------------
ARIZONA PORTFOLIO
PORTFOLIO OF INVESTMENTS
------------------------
ARIZONA PORTFOLIO
PORTFOLIO OF INVESTMENTS
September 30, 2000
Standard & Principal
Poor's Amount
Ratings(a) (000) Value
--------------------------------------------------------------------------------
Municipal Bonds-98.2%
Arizona-88.1%
Aaa Arizona Student Loan Acquisition Authority
(Student Loan Rev) Ser 99B-1 AMT
5.90%, 5/01/24(b)........................... $ 1,500 $ 1,514,490
AAA Glendale IDR
(Midwestern Univ)
Connie Lee Ser 96A
6.00%, 5/15/26.............................. 475 483,374
NR Goodyear Assessment District 1
(Palm Valley) Ser 96C
7.25%, 7/01/16.............................. 4,256 4,526,894
NR Goodyear Dev Auth Water & Sewer Rev
(Litchfield Pk Svc Proj) Ser 99 AMT
5.95%, 10/01/23............................. 3,160 2,915,195
NR Hassayampa Cmnty Fac District 2
Spec Assessment Lien Ser 00
7.50%, 7/01/24.............................. 1,240 1,318,542
NR Hassayampa Cmnty Fac District 1
Spec Assessment Lien Ser 96
7.75%, 7/01/21.............................. 6,540 7,065,554
AAA Maricopa Cnty GO School Dist No. 28
(Kyrene Elem) FGIC Ser 95B
6.00%, 7/01/14.............................. 2,000 2,051,540
A+ Maricopa Cnty IDR
(Citizens Utilities) Ser 95 AMT
6.20%, 5/01/30.............................. 8,550 8,596,683
AA Maricopa Cnty MFHR
(Avalon Apts Proj) Asset Gty Ser 00A
6.35%, 4/01/30.............................. 1,550 1,576,536
AAA Maricopa Cnty SFMR
GNMA/FNMA/FHLMC Ser 00C-1 AMT
6.25%, 12/01/30............................. 1,860 1,902,910
AAA Mesa Cnty Health Care Fac
(Discovery Hlth Sys) MBIA Ser 99A
5.75%, 1/01/25.............................. 13,500 13,540,095
AA- Mohave Cnty IDR
(Cargill/North Star Steel) Ser 95A AMT
6.70%, 3/01/20.............................. 4,175 4,461,322
A+ Mohave Cnty IDR
(Citizens Utilities) Ser 93B AMT
5.80%, 11/15/28............................. 2,000 1,927,440
AAA Mohave Cnty MFHR
(Chris Ridge & Silver) GNMA Ser 96
6.375%, 11/01/31............................ 1,000 1,032,910
AA+ Phoenix Excise Tax Rev
(Civic Plaza Bldg Corp) Sr Lien Ser 94
6.00%, 7/01/12.............................. 1,015 1,065,547
--------------------------------------------------------------------------------
16 o ALLIANCE MUNICIPAL INCOME FUND II
<PAGE>
------------------------
ARIZONA PORTFOLIO
PORTFOLIO OF INVESTMENTS
------------------------
Standard & Principal
Poor's Amount
Ratings(a) (000) Value
--------------------------------------------------------------------------------
AA Phoenix MFHR
(Woodstone & Silver Springs) Asset Gty Ser 93
6.25%, 4/01/23.............................. $3,000 $ 3,069,330
AAA Phoenix SFMR
FNMA/GNMA/FHLMC Ser 00B-1 AMT
6.00%, 6/01/31.............................. 2,640 2,945,976
B+ Pima Cnty IDR
(Tucson Electric Pwr) Ser 97C
6.00%, 9/01/29.............................. 8,000 7,373,840
AAA Pima Cnty MFHR
(La Hacienda) GNMA Ser 99
7.00%, 12/20/31............................. 1,290 1,425,901
AAA Pima Cnty SFMR
GNMA Ser 99B-1 AMT
6.10%, 5/01/31.............................. 4,260 4,314,102
AAA Pima Cnty SFMR
GNMA/FNMA/FHLMC Ser 97A AMT
6.25%, 11/01/30............................. 2,195 2,241,556
AAA Tempe MFHR
(Quadrangles) FHA Ser 93
6.25%, 6/01/26.............................. 4,255 4,352,652
------------
79,702,389
------------
Puerto Rico-10.1%
AA Puerto Rico Fin Auth
(Ascension Hlth) Ser 00A
6.125%, 11/15/30............................ 3,100 3,176,353
AAA Puerto Rico Hsg Fin Corp Rev SFMR
GNMA Ser 98A AMT
5.20%, 12/01/32............................. 4,510 4,168,368
BBB- Puerto Rico Port Auth
(American Airlines) Ser 96A AMT
6.25%, 6/01/26.............................. 1,775 1,792,005
------------
9,136,726
------------
Total Investments-98.2%
(cost $86,168,507)....................... 88,839,115
Other assets less liabilities-1.8%.......... 1,591,449
------------
Net Assets-100%............................. $ 90,430,564
============
See footnote summary on page 36.
See Glossary of Terms on page 36.
See notes to financial statements.
--------------------------------------------------------------------------------
ALLIANCE MUNICIPAL INCOME FUND II o 17
<PAGE>
------------------------
FLORIDA PORTFOLIO
PORTFOLIO OF INVESTMENTS
------------------------
FLORIDA PORTFOLIO
PORTFOLIO OF INVESTMENTS
September 30, 2000
Standard & Principal
Poor's Amount
Ratings(a) (000) Value
--------------------------------------------------------------------------------
Municipal Bonds-98.1%
Florida-91.4%
A Broward Cnty Hsg Fin Auth MFHR
(Bridgewater Place Apts) Ser 99A AMT
5.50%, 4/01/41.............................. $ 5,640 $ 5,220,892
NR Clay Cnty Cmnty Dev Dist
(Crossings at Fleming Island)
Spec Assessment Ser 00C
7.10%, 5/01/30.............................. 21,860 22,580,287
NR Clay Cnty Cmnty Dev Dist
(Fleming Island Plantation)
Spec Assessment Ser 00B
7.375%, 5/01/31............................. 3,000 3,160,740
NR Collier Cnty Cmnty Dev Dist
(Fiddlers Creek) Ser 99B
5.80%, 5/01/21.............................. 6,640 6,116,303
A Collier Cnty Hsg Fin Auth MFHR
(Whistlers Green Apts) Ser 99A AMT
5.40%, 12/01/27............................. 1,890 1,746,190
NR Collier Cnty IDR
(Southern States Utils) Ser 96 AMT
6.50%, 10/01/25............................. 8,000 8,067,760
A Dade Cnty Hsg Fin Auth MFHR
(Golden Lakes Apts) Ser 97A AMT
6.00%, 11/01/32(c).......................... 250 250,853
A Dade Cnty Hsg Fin Auth MFHR
(Golden Lakes Apts) Ser 97A AMT
6.05%, 11/01/39(c).......................... 750 734,557
AAA Dade Cnty Hsg Fin Auth MFHR
(Marbrisa Apts) FSA Ser 002-A AMT
6.15%, 8/01/38.............................. 5,715 5,805,640
AAA Escambia Cnty Hsg Fin Auth SFMR
GNMA Ser 95B AMT
6.25%, 4/01/28.............................. 11,500 11,646,510
Baa1 Escambia Cnty PCR
(Champion Int'l Corp) Ser 96 AMT
6.40%, 9/01/30(b)........................... 5,000 4,999,600
--------------------------------------------------------------------------------
18 o ALLIANCE MUNICIPAL INCOME FUND II
<PAGE>
------------------------
FLORIDA PORTFOLIO
PORTFOLIO OF INVESTMENTS
------------------------
Standard & Principal
Poor's Amount
Ratings(a) (000) Value
--------------------------------------------------------------------------------
AAA Florida Hsg Fin Agy MFHR
(Turtle Creek Apts) AMBAC
Ser 96C AMT
6.20%, 5/01/36.............................. $ 3,245 $ 3,325,476
AAA Florida Hsg Fin Agy SFMR
Ser 95A AMT
6.65%, 1/01/24.............................. 6,565 6,787,094
AAA Florida Hsg Fin Corp MFHR
(Logans Pointe Apts) FSA Ser 99 AMT
6.00%, 6/01/39.............................. 5,080 5,216,754
AAA Florida Hsg Fin Corp MFHR
(Mystic Pointe II) GNMA Ser 00
6.30%, 12/01/41............................. 1,165 1,192,913
AAA Florida Hsg Fin Corp MFHR
(Raintree Apts) GNMA Ser 00 AMT
6.05%, 3/01/42.............................. 5,885 5,889,531
A Florida Hsg Fin Corp MFHR
(Spring Harbor Apts) Ser 99C-1 AMT
5.90%, 8/01/39.............................. 4,540 4,424,866
AAA Florida Hsg Fin Corp MFHR
(Waverly Apts) Ser 00C-1 AMT
6.50%, 7/01/40.............................. 2,790 2,908,408
A Florida Hsg Fin Corp MFHR
(Wentworth II Apts) Ser 99A AMT
5.40%, 11/01/34............................. 3,055 2,802,474
AAA Lee Cnty Arpt Rev
(Southwest Int'l) FSA Ser 00A AMT
6.00%, 10/01/32............................. 23,000 23,595,470
BBB- Lee Cnty Hlth Facs Auth Rev
(Shell Point Vlg Proj) Ser 99A
5.50%, 11/15/29............................. 8,550 7,138,651
NR Manatee Cnty Cmnty Dev Tara District 1
Spec Assessment Ser 00A
7.15%, 5/01/31.............................. 2,000 2,100,120
Aaa Manatee Cnty Hsg Fin Auth SFMR
GNMA Ser 96-1 AMT
5.625%, 11/01/14(b)......................... 465 465,423
Aaa Manatee Cnty Hsg Fin Auth SFMR
GNMA Ser 99 AMT
6.25%, 11/01/28(b) ......................... 3,015 3,181,066
AA Orange Cnty Hlth Facs Auth Rev
(Mayflower Retirement Proj) Asset Gty Ser 99
5.25%, 6/01/29 ............................. 4,410 3,993,079
AA- Orlando Util Cmnty Wtr & Elec Rev
Ser 93B
6.607%, 10/06/17(d)......................... 1,235 1,247,189
--------------------------------------------------------------------------------
ALLIANCE MUNICIPAL INCOME FUND II o 19
<PAGE>
------------------------
FLORIDA PORTFOLIO
PORTFOLIO OF INVESTMENTS
------------------------
FLORIDA PORTFOLIO
PORTFOLIO OF INVESTMENTS
September 30, 2000
Standard & Principal
Poor's Amount
Ratings(a) (000) Value
--------------------------------------------------------------------------------
A Pasco Cnty Hsg Fin Auth MFHR
(Pasco Woods Apts) Ser 99A AMT
5.90%, 8/01/39.............................. $3,690 $ 3,553,913
Aaa Pinellas Cnty Hsg Fin Auth SFMR
GNMA Ser 94A AMT
6.55%, 8/01/27(b) .......................... 4,090 4,186,688
NR St. Johns Cnty
(Julington Creek Plantation) Ser 97
6.70%, 5/01/07.............................. 2,495 2,588,587
NR St. Johns Cnty
(Julington Creek Plantation) Ser 97
7.125%, 5/01/19............................. 8,480 8,903,152
------------
163,830,186
------------
Illinois-2.2%
BB+ Chicago Arpt Rev
(United Airlines Proj) Ser 99A
5.35%, 9/01/16.............................. 4,500 3,943,530
------------
Texas-4.5%
BBB Alliance Arpt Rev
(Fed Express Proj) Ser 96 AMT
6.375%, 4/01/21............................. 8,200 8,139,730
------------
Total Investments-98.1%
(cost $ 171,140,748)..................... 175,913,446
Other assets less liabilities-1.9%.......... 3,363,836
------------
Net Assets-100%............................. $179,277,282
============
See footnote summary on page 36.
See Glossary of Terms on page 36.
See notes to financial statements.
--------------------------------------------------------------------------------
20 o ALLIANCE MUNICIPAL INCOME FUND II
<PAGE>
------------------------
MASSACHUSETTS PORTFOLIO
PORTFOLIO OF INVESTMENTS
------------------------
MASSACHUSETTS PORTFOLIO
PORTFOLIO OF INVESTMENTS
September 30, 2000
Standard & Principal
Poor's Amount
Ratings(a) (000) Value
--------------------------------------------------------------------------------
Municipal Bonds-98.0%
Massachusetts-98.0%
BBB- Massachusetts Dev Fin Agy
(Boston Biomedical) Ser 99
5.75%, 2/01/29.............................. $1,800 $ 1,563,534
BBB- Massachusetts Dev Fin Agy
(Eastern Nazarene) Ser 99
5.625%, 4/01/29............................. 2,000 1,776,620
A Massachusetts Dev Fin Agy
(Massachusetts Biomedical) Ser 00C
6.25%, 8/01/20.............................. 3,000 2,999,670
BBB Massachusetts Dev Fin Agy
(Massachusetts College of Pharmacy)
Ser 99B
6.75%, 7/01/30.............................. 6,600 6,809,022
BBB Massachusetts Dev Fin Agy
(Ogden Haverhill Proj) Ser 98B AMT
5.50%, 12/01/19............................. 2,735 2,349,228
BBB- Massachusetts Dev Fin Agy
(Regis College) Ser 98
5.50%, 10/01/28............................. 5,865 5,178,795
BBB Massachusetts Dev Fin Agy
(Suffolk Univ) Ser 99
5.85%, 7/01/29.............................. 1,375 1,324,909
AA Massachusetts Dev Fin Agy
(Worcester Redev Auth) Asset Gty Ser 99
5.25%, 6/01/19.............................. 2,350 2,203,642
AA Massachusetts Dev Fin Agy
(Worcester Redev Auth) Asset Gty Ser 99
6.00%, 6/01/24.............................. 1,300 1,331,759
BBB+ Massachusetts Dev Fin Agy
(YMCA Greater Boston) Ser 98
5.45%, 11/01/28............................. 1,000 894,440
AAA Massachusetts Ed Fin Auth
(Educational Loan) MBIA Ser 00G AMT
6.00%, 12/01/16............................. 2,000 2,036,340
AAA Massachusetts Hlth & Ed Fac Auth
(Beth Israel) AMBAC Ser G-4
7.457%, 7/01/25(d).......................... 2,000 2,018,720
BBB Massachusetts Hlth & Ed Fac Auth
(Caritas Christi) Ser 99A
5.75%, 7/01/28.............................. 6,990 5,793,312
BBB+ Massachusetts Hlth & Ed Fac Auth
(Jordan Hosp) Ser 92B
6.875%, 10/01/15............................ 1,500 1,531,065
Baa3 Massachusetts Hlth & Ed Fac Auth
(Lasell College) Ser 99A
5.625%, 7/01/29(b) ......................... 7,490 6,769,837
--------------------------------------------------------------------------------
ALLIANCE MUNICIPAL INCOME FUND II o 21
<PAGE>
------------------------
MASSACHUSETTS PORTFOLIO
PORTFOLIO OF INVESTMENTS
------------------------
MASSACHUSETTS PORTFOLIO
PORTFOLIO OF INVESTMENTS
September 30, 2000
Standard & Principal
Poor's Amount
Ratings(a) (000) Value
--------------------------------------------------------------------------------
BBB Massachusetts Hlth & Ed Fac Auth
(Winchester Hosp) Ser 00E
6.75%, 7/01/30.............................. $ 7,000 $ 6,990,130
AAA Massachusetts Hsg Fin Agy
AMBAC Ser 93A
6.15%, 10/01/15............................. 3,500 3,592,225
AAA Massachusetts Hsg Fin Agy MFHR
(Harbor Point) AMBAC Ser 96A AMT
6.40%, 12/01/15............................. 4,880 5,166,651
AAA Massachusetts Hsg Fin Agy MFHR
(Rental Hsg) AMBAC Ser 95E AMT
6.00%, 7/01/37.............................. 2,680 2,687,504
A+ Massachusetts Hsg Fin Agy SFMR
Ser 40 AMT
6.65%, 12/01/27............................. 9,420 9,756,294
AAA Massachusetts Hsg Fin Agy SFMR
FSA Ser 71 AMT
5.65%, 6/01/31.............................. 3,500 3,366,755
AAA Massachusetts Hsg Fin Agy SFMR
FSA Ser 73 AMT
5.90%, 12/01/23............................. 10,000 9,986,500
AA+ Massachusetts Ind Fin Agy
(Groton School Proj) Ser 98A
5.00%, 3/01/28.............................. 3,440 3,051,452
AAA Massachusetts Ind Fin Agy
(Heights Crossing) FHA Ser 95 AMT
6.15%, 2/01/35.............................. 5,800 5,864,032
AA- Massachusetts Port Auth
Ser 99D AMT
6.00%, 7/01/29.............................. 7,500 7,608,000
AAA Massachusetts Port Auth Spec Fac
(Bosfuel Corp) MBIA Ser 97 AMT
6.00%, 7/01/36 ............................. 5,795 5,857,180
AAA Massachusetts Port Auth Spec Fac
(US Air) MBIA Ser 96A AMT
5.875%, 9/01/23............................. 5,750 5,765,870
------------
Total Investments-98.0%
(cost $110,596,396)...................... 114,273,486
Other assets less liabilities-2.0%.......... 2,316,016
------------
Net Assets-100%............................. $116,589,502
============
See footnote summary on page 36.
See Glossary of Terms on page 36.
See notes to financial statements.
--------------------------------------------------------------------------------
22 o ALLIANCE MUNICIPAL INCOME FUND II
<PAGE>
------------------------
MICHIGAN PORTFOLIO
PORTFOLIO OF INVESTMENTS
------------------------
MICHIGAN PORTFOLIO
PORTFOLIO OF INVESTMENTS
September 30, 2000
Standard & Principal
Poor's Amount
Ratings(a) (000) Value
--------------------------------------------------------------------------------
Municipal Bonds-96.3%
Michigan-87.1%
AAA Detroit Sew Disp Rev
FGIC Ser 93A, Pre-refunded
6.655%, 7/01/23(d).......................... $3,100 $ 3,046,587
Aa2 Independence Eco Dev Auth
(Greenery Health) FHA Ser 97A
6.15%, 8/01/17(b)........................... 255 259,623
AAA Kalamazoo Hosp Fin Auth ETM
(Borgess Med Ctr) FGIC Ser 94A
5.858%, 6/01/11(d).......................... 1,990 2,012,706
Aaa Michigan Hsg Dev Auth MFHR
(Arbor Pointe) GNMA Ser 99
5.40%, 6/20/40(b)........................... 1,810 1,674,268
Aaa Michigan Hsg Dev Auth MFHR
(Oakbrook Villa) GNMA Ser 00A AMT
6.50%, 1/20/42(b)........................... 1,915 1,983,423
AAA Michigan Hsg Dev Auth SFMR
MBIA Ser 99B-1 AMT
6.375%, 6/01/29............................. 1,945 1,997,690
AAA Michigan Strategic Fund
(Detroit Edison) MBIA Ser 95AA
6.40%, 9/01/25.............................. 1,945 2,038,671
NR Michigan Strategic Fund
(Holland Home) Ser 98
5.75%, 11/15/18............................. 1,500 1,276,290
NR Michigan Strategic Fund
(Holland Home) Ser 98
5.75%, 11/15/28............................. 3,000 2,435,490
A Michigan Strategic Fund PCR
(General Motors Corp) Ser 95
6.20%, 9/01/20.............................. 1,920 1,971,859
BB+ Midland Cnty PCR
(CMS Energy) Ser 00A AMT
6.875%, 7/23/09............................. 6,055 6,153,394
A Romulus Tax Increment Fin Auth
Ser 94
6.75%, 11/01/19(c).......................... 1,585 1,653,678
A Saginaw Hosp Fin Auth
(Convenant Medical Ctr) Ser 00F
6.50%, 7/01/30.............................. 7,710 7,732,667
AA Troy Downtown Dev Auth
Asset Gty Ser 95A
6.375%, 11/01/18............................ 1,915 2,012,014
------------
36,248,360
------------
--------------------------------------------------------------------------------
ALLIANCE MUNICIPAL INCOME FUND II o 23
<PAGE>
------------------------
MICHIGAN PORTFOLIO
PORTFOLIO OF INVESTMENTS
------------------------
MICHIGAN PORTFOLIO
PORTFOLIO OF INVESTMENTS
September 30, 2000
Standard & Principal
Poor's Amount
Ratings(a) (000) Value
--------------------------------------------------------------------------------
Puerto Rico-9.2%
AAA Puerto Rico Hsg Fin Corp Rev SFMR
GNMA Ser 98 AMT
5.20%, 12/01/32............................. $2,170 $ 2,005,623
BBB- Puerto Rico Port Auth
(American Airlines) Ser 96A AMT
6.25%, 6/01/26.............................. 1,800 1,817,244
------------
3,822,867
------------
Total Investments-96.3%
(cost $39,090,386)....................... 40,071,227
Other assets less liabilities-3.7%.......... 1,541,858
------------
Net Assets-100%............................. $ 41,613,085
============
See footnote summary on page 36.
See Glossary of Terms on page 36.
See notes to financial statements.
--------------------------------------------------------------------------------
24 o ALLIANCE MUNICIPAL INCOME FUND II
<PAGE>
------------------------
MINNESOTA PORTFOLIO
PORTFOLIO OF INVESTMENTS
------------------------
MINNESOTA PORTFOLIO
PORTFOLIO OF INVESTMENTS
September 30, 2000
Standard & Principal
Poor's Amount
Ratings(a) (000) Value
--------------------------------------------------------------------------------
Municipal Bonds-92.9%
Minnesota-92.9%
AAA Brooklyn Park MFHR
(Brooks Landing) FNMA Ser 99A AMT
5.50%, 7/01/19.............................. $1,355 $ 1,325,434
Aaa Eagan MFHR
(Woodridge Apts Proj) GNMA Ser 97A
5.95%, 2/01/32(b)........................... 1,580 1,596,369
Aaa Little Canada MFHR
(Cedars Lakeside Apts) GNMA Ser 97A
5.95%, 2/01/32(b)........................... 1,650 1,667,094
A- Minneapolis Common Bond Fund
Cmnty Dev Agy
Ser 95-2 AMT
6.625%, 12/01/15............................ 1,245 1,287,977
NR Minneapolis Hlth Fac
(Walker Methodist) Ser 98A
6.00%, 11/15/28............................. 6,195 5,238,168
AAA Minneapolis MFHR
(Riverside Plaza Proj) GNMA Ser 98 AMT
5.20%, 12/20/30............................. 2,020 1,829,312
AAA Minneapolis & St. Paul Arpt Rev
FGIC Ser 00B AMT
6.00%, 1/01/21.............................. 1,780 1,824,981
AAA Minnesota Agric & Eco Dev
(Benedictine Health) MBIA Ser 99
5.125%, 2/15/29............................. 2,000 1,792,360
NR Minnesota Agric & Eco Dev
(Small Business Loan Prog)
Ser 00A AMT
7.25%, 8/01/20.............................. 1,000 1,038,260
Ser 00B AMT
7.25%, 8/01/20.............................. 1,000 1,038,260
Ser 00C AMT
7.25%, 8/01/20.............................. 1,000 1,038,260
Ser 00D AMT
7.25%, 8/01/20.............................. 1,000 1,038,260
Baa2 Minnesota Higher Ed Fac Auth
(College Art & Design) Ser 00-5D
6.75%, 5/01/26(b)........................... 1,000 1,008,340
Baa1 Minnesota Higher Ed Fac Auth
(Hamline Univ) Ser 4-I
6.00%, 10/01/16(b).......................... 790 794,724
Baa1 Minnesota Higher Ed Fac Auth
(Hamline Univ) Ser 99-5B
6.00%, 10/01/29(b).......................... 1,250 1,255,163
--------------------------------------------------------------------------------
ALLIANCE MUNICIPAL INCOME FUND II o 25
<PAGE>
------------------------
MINNESOTA PORTFOLIO
PORTFOLIO OF INVESTMENTS
------------------------
MINNESOTA PORTFOLIO
PORTFOLIO OF INVESTMENTS
September 30, 2000
Standard & Principal
Poor's Amount
Ratings(a) (000) Value
--------------------------------------------------------------------------------
AA+ Minnesota Hsg Fin Agy SFMR
Ser 96G AMT
6.25%, 7/01/26.............................. $3,440 $ 3,491,531
Aaa Minnetonka MFHR
(Archer Heights Apts Proj)
GNMA Ser 99A AMT
5.30%, 1/20/27(b)........................... 1,620 1,494,077
AA+ Rochester Hosp Rev
(Mayo Med Ctr) Ser 92H
7.509%, 11/15/15(c)......................... 3,000 3,148,680
BBB- So. St. Paul Hosp Rev
(Health East Proj) Ser 94
6.75%, 11/01/09............................. 1,480 1,421,821
Aaa St. Cloud Hosp Rev
(St Cloud Hospital) FSA Ser 00A
5.875%, 5/01/30(b).......................... 1,800 1,820,250
Aaa St. Paul MFHR
(Wellington Proj) FHLMC Ser 99A
5.10%, 2/01/24(b)........................... 1,980 1,828,015
------------
Total Investments-92.9%
(cost $35,835,241)....................... 36,977,336
Other assets less liabilities-7.1%.......... 2,822,698
------------
Net Assets-100%............................. $ 39,800,034
============
See footnote summary on page 36.
See Glossary of Terms on page 36.
See notes to financial statements.
--------------------------------------------------------------------------------
26 o ALLIANCE MUNICIPAL INCOME FUND II
<PAGE>
------------------------
NEW JERSEY PORTFOLIO
PORTFOLIO OF INVESTMENTS
------------------------
NEW JERSEY PORTFOLIO
PORTFOLIO OF INVESTMENTS
September 30, 2000
Standard & Principal
Poor's Amount
Ratings(a) (000) Value
--------------------------------------------------------------------------------
Municipal Bonds-98.3%
New Jersey-92.0%
Aaa Lafayette Yard NJ Com Dev Corp
(Conv Ctr Hotel Proj) MBIA Ser 00
5.80%, 4/01/35(b)........................... $ 2,100 $ 2,124,675
BBB- New Jersey Eco Dev
(American Airlines) AMT
7.10%, 11/01/31............................. 4,500 4,586,355
AAA New Jersey Eco Dev
(American Water Co) FGIC AMT
6.875%, 11/01/34............................ 2,900 3,086,847
A+ New Jersey Eco Dev
(Anheuser-Busch) Ser 95 AMT
5.85%, 12/01/30............................. 6,750 6,739,875
AAA New Jersey Eco Dev
(Hackensack Water Co)
MBIA Ser 94B AMT
5.90%, 3/01/24.............................. 4,000 4,027,320
NR New Jersey Eco Dev
(Kapkowski Rd) Ser 98B AMT
6.50%, 4/01/31.............................. 29,085 28,480,904
BBB New Jersey Eco Dev PCR
(NUI Corp) Ser 98A AMT
5.25%, 11/01/33............................. 23,250 19,873,867
AAA New Jersey Eco Dev
(Pub Ser Elec & Gas) MBIA Ser 94A AMT
6.40%, 5/01/32.............................. 5,000 5,201,150
AAA New Jersey Higher Ed
(Student Loan) MBIA Ser 99A AMT
5.25%, 6/01/18.............................. 1,500 1,423,680
AAA New Jersey Higher Ed
(Student Loan) MBIA Ser 00A AMT
6.15%, 6/01/19.............................. 1,500 1,544,775
BBB- New Jersey Hlth Care Fac
(Englewood Hosp & Med Ctr) Ser 94
6.75%, 7/01/24.............................. 4,230 3,866,939
A New Jersey Hlth Care Fac
(Palisades Med Ctr) ACA Ser 99
5.25%, 7/01/28.............................. 3,840 3,354,816
A+ New Jersey Hlth Care Fac
(Robert Wood Johnson) Ser 00
5.75%, 7/01/31.............................. 7,000 6,822,060
AAA New Jersey Hsg & Mtg Fin Agy MFHR
AMBAC Ser 96A AMT
6.25%, 5/01/28.............................. 5,000 5,148,400
--------------------------------------------------------------------------------
ALLIANCE MUNICIPAL INCOME FUND II o 27
<PAGE>
------------------------
NEW JERSEY PORTFOLIO
PORTFOLIO OF INVESTMENTS
------------------------
NEW JERSEY PORTFOLIO
PORTFOLIO OF INVESTMENTS
September 30, 2000
Standard & Principal
Poor's Amount
Ratings(a) (000) Value
--------------------------------------------------------------------------------
AAA New Jersey Hsg & Mtg Fin Agy MFHR
FSA Ser 00 A1 AMT
6.35%, 11/01/31............................. $2,000 $ 2,069,980
AAA New Jersey Hsg & Mtg Fin Agy SFMR
(Home Buyers) MBIA AMT
6.35%, 10/01/27............................ 5,000 5,115,850
AAA New Jersey Hsg & Mtg Fin Agy SFMR
(Home Buyers) MBIA AMT
5.90%, 10/01/29............................. 7,000 6,932,800
AAA Port Auth of NY & NJ
(JFK Int'l Airport Proj) MBIA Ser 97-6 AMT
5.75%, 12/01/22............................. 6,810 6,838,262
AAA Port Auth of NY & NJ 96th
FGIC Ser 94 AMT
6.60%, 10/01/23............................. 6,550 6,901,015
AA- Salem Cnty NJ Waste Disposal Auth
(E.I. Dupont) Ser 92A AMT
6.13%, 7/15/22.............................. 3,500 3,538,920
BBB- South Jersey Transportation Auth
NJ Lease Rev
(Raytheon Aircraft Service) Ser 97A AMT
6.15%, 1/01/22.............................. 500 481,045
AAA Vineland NJ Sewer Auth
(Landis) FGIC Ser 93C
6.52%, 9/19/19(d).......................... 3,250 3,389,913
------------
131,549,448
------------
Puerto Rico-6.3%
AAA Puerto Rico Hsg Fin Corp Rev SFMR
GNMA Ser 98 AMT
5.20%, 12/01/32............................. 7,600 7,024,300
BBB- Puerto Rico Port Auth
(American Airlines) Ser 96A AMT
6.25%, 6/01/26.............................. 1,900 1,918,202
------------
8,942,502
------------
Total Investments-98.3%
(cost $134,872,461)...................... 140,491,950
Other assets less liabilities-1.7%.......... 2,438,978
------------
Net Assets-100%............................. $142,930,928
============
See footnote summary on page 36.
See Glossary of Terms on page 36.
See notes to financial statements.
--------------------------------------------------------------------------------
28 o ALLIANCE MUNICIPAL INCOME FUND II
<PAGE>
------------------------
OHIO PORTFOLIO
PORTFOLIO OF INVESTMENTS
------------------------
OHIO PORTFOLIO
PORTFOLIO OF INVESTMENTS
September 30, 2000
Standard & Principal
Poor's Amount
Ratings(a) (000) Value
--------------------------------------------------------------------------------
Municipal Bonds-97.7%
Ohio-97.7%
BBB Akron (Canal Park) COP Ser 96
Zero Coupon, 12/01/01(e).................... $ 5,000 $ 4,955,750
BB Cleveland Arpt Rev
(Continental Airlines) Ser 98 AMT
5.375%, 9/15/27............................. 19,015 14,910,803
AAA Columbus Municipal Arpt Rev
(Columbus Int'l Arpt) MBIA Ser 94A AMT
6.25%, 1/01/24.............................. 4,000 4,098,040
BBB Cuyahoga Cnty Hosp Rev
(University Hosp) Ser 00
7.50%, 1/01/30.............................. 22,250 23,145,340
A Franklin Cnty
(OCLC Online Computer Library Ctr)
Ser 98
5.20%, 10/01/20............................. 4,885 4,442,370
A Hamilton Cnty Health Fac
(Twin Towers) Ser 99A
5.80%, 10/01/23............................. 1,775 1,658,933
Aaa Lucas Cnty Health Fac
(Altenheim Project) GNMA Ser 99
5.50%, 7/20/40(b)........................... 3,200 2,958,400
BBB+ Ohio Air Quality Dev Auth PCR
(Columbus Southern Pwr) Ser 85B
6.25%, 12/01/20............................. 4,000 4,003,080
BB+ Ohio Air Quality Dev Auth PCR
(Toledo Edison Co) Ser 97A AMT
6.10%, 8/01/27.............................. 5,000 4,692,950
AAA Ohio Capital Corp MFHR
(Sect 8 Assist) FHA/MBIA Ser 95E
6.35%, 1/01/22.............................. 1,965 2,038,648
A Ohio Environmental Fac Rev
(Ford Motor Co) Ser 00
6.15%, 6/01/30.............................. 4,500 4,585,815
Aa2 Ohio Hsg Fin Agy MFHR
(Bridgeview Villa ll) FHA AMT
6.45%, 12/01/33(b).......................... 1,965 2,017,092
AAA Ohio Hsg Fin Agy SFMR
GNMA Ser 94B-2 AMT
6.70%, 3/01/25.............................. 3,760 3,887,163
A+ Ohio Wtr Dev Auth
(Anheuser-Busch) Ser 99 AMT
6.00%, 8/01/29.............................. 2,250 2,252,835
A- Ohio Wtr Dev Auth
(North Star/BHP) AMT
6.45%, 9/01/20.............................. 3,425 3,514,769
--------------------------------------------------------------------------------
ALLIANCE MUNICIPAL INCOME FUND II o 29
<PAGE>
------------------------
OHIO PORTFOLIO
PORTFOLIO OF INVESTMENTS
------------------------
OHIO PORTFOLIO
PORTFOLIO OF INVESTMENTS
September 30, 2000
Standard & Principal
Poor's Amount
Ratings(a) (000) Value
--------------------------------------------------------------------------------
BB+ Ohio Wtr Dev Auth PCR
(Cleveland Electric) Ser 97A AMT
6.10%, 8/01/20.............................. $2,000 $ 1,892,180
AAA Summit Cnty GO FGIC Ser 00
6.00%, 12/01/21............................. 4,000 4,178,360
Baa2 Toledo-Lucas Cnty Port Fac
(CSX Transportation) Ser 92
6.45%, 12/15/21(b).......................... 4,700 4,808,993
------------
Total Investments-97.7%
(cost $91,174,392)....................... 94,041,521
Other assets less liabilities-2.3%.......... 2,169,299
------------
Net Assets-100%............................. $ 96,210,820
============
See footnote summary on page 36.
See Glossary of Terms on page 36.
See notes to financial statements.
--------------------------------------------------------------------------------
30 o ALLIANCE MUNICIPAL INCOME FUND II
<PAGE>
------------------------
PENNSYLVANIA PORTFOLIO
PORTFOLIO OF INVESTMENTS
------------------------
PENNSYLVANIA PORTFOLIO
PORTFOLIO OF INVESTMENTS
September 30, 2000
Standard & Principal
Poor's Amount
Ratings(a) (000) Value
--------------------------------------------------------------------------------
Municipal Bonds-97.0%
Pennsylvania-94.3%
A Allegheny Cnty Higher Ed
(Thiel College) ACA Ser 99A
5.375%, 11/15/19............................ $ 1,300 $ 1,172,301
A Allegheny Cnty Higher Ed
(Thiel College) ACA Ser 99A
5.375%, 11/15/29............................ 2,000 1,767,460
A2 Allegheny Cnty Hosp
(South Hills Hlth) Ser 99
6.75%, 5/01/25(b)........................... 2,555 2,608,962
BBB Allegheny Cnty IDR PCR
(USX Corp) Ser 96
6.10%, 1/15/18.............................. 4,000 3,903,720
BBB Allegheny Cnty IDR PCR
(USX Corp) Ser 98
5.50%, 12/01/29............................. 14,000 12,162,360
Aaa Allegheny Cnty MFHR
(Green Meadow Apts)
GNMA Ser 98A-1 AMT
5.125%, 10/20/40(b)......................... 7,375 6,480,118
BBB+ Bradford Cnty IDR Solid Waste Disp Rev
(Int'l Paper) Ser 95A AMT
6.60%, 3/01/19.............................. 2,500 2,545,450
BBB Crawford Cnty Hosp Auth
(Wesbury Methodist Cmnty) Ser 99
6.25%, 8/15/29(c) .......................... 3,100 2,806,058
BBB+ Cumberland Cnty Municipal Auth Rev
(Presbyterian Homes Inc) Ser 96
6.00%, 12/01/26............................. 2,250 2,082,645
BBB- Delaware Cnty Higher Ed
(Eastern College) Ser 99
5.625%, 10/01/28............................ 3,300 2,899,875
NR Harrisburg PA
(Susquehanna Aero Proj) AMT
5.50%, 1/01/24.............................. 1,490 1,275,991
Aaa Lehigh Northampton Arpt
MBIA Ser 00 AMT
6.00%, 5/15/30(b)........................... 4,400 4,467,056
AA Montgomery Cnty Higher Ed
(Beaver College) Asset Gty Ser 99
5.70%, 4/01/27.............................. 6,000 5,832,360
AAA Montgomery Cnty Hlth Fac
(Holy Redeemer Hlth Sys) AMBAC Ser 97A
5.25%, 10/01/23............................. 6,600 6,142,224
--------------------------------------------------------------------------------
ALLIANCE MUNICIPAL INCOME FUND II o 31
<PAGE>
------------------------
PENNSYLVANIA PORTFOLIO
PORTFOLIO OF INVESTMENTS
------------------------
PENNSYLVANIA PORTFOLIO
PORTFOLIO OF INVESTMENTS
September 30, 2000
Standard & Principal
Poor's Amount
Ratings(a) (000) Value
--------------------------------------------------------------------------------
BB- New Morgan IDR Solid Waste Disp Rev
(Browning-Ferris) Ser 94 AMT
6.50%, 4/01/19.............................. $ 9,115 $ 8,424,630
BBB Pennsylvania Economic Dev Auth
Waste Water Rev
(Sun Co) Ser 94A AMT
7.60%, 12/01/24............................. 5,000 5,375,850
AAA Pennsylvania Higher Ed
(Student Loan) AMBAC Ser 88D AMT
6.05%, 1/01/19.............................. 5,900 5,952,451
AA+ Pennsylvania Hsg Fin Agy SFMR
Ser 92-35D AMT
7.614%, 4/01/25(d).......................... 9,500 9,787,660
AA+ Pennsylvania Hsg Fin Agy SFMR
Ser 94-41B AMT
6.65%, 4/01/25.............................. 4,950 5,107,954
AA+ Pennsylvania Hsg Fin Agy SFMR
Ser 99-67A AMT
5.90%, 10/01/30............................. 2,780 2,752,978
AA+ Pennsylvania Hsg Fin Agy SFMR
Ser 00-69A AMT
6.25%, 4/01/31.............................. 5,065 5,151,915
AAA Philadelphia Arpt Sys Rev
AMBAC Ser 95A AMT
6.10%, 6/15/25.............................. 10,000 10,208,000
AAA Pittsburgh Urban Redev Auth SFMR
Ser 00A AMT
6.40%, 10/01/31............................. 5,340 5,531,920
AAA Pittsburgh Urban Redev Auth SFMR
FHA Ser 97A AMT
6.25%, 10/01/28............................. 910 922,540
AA Potter Cnty Hosp Auth
(Charles Cole Memorial) Asset Gty Ser 96
6.05%, 8/01/24.............................. 4,340 4,428,927
BBB Warren Cnty Hosp Auth
(Warren General) Ser 94B
7.00%, 4/01/19.............................. 2,200 2,200,968
AAA Washington Cnty Auth Rev
(Capital Funding) AMBAC Ser 99
6.15%, 12/01/29............................. 6,100 6,560,428
------------
128,552,801
------------
--------------------------------------------------------------------------------
32 o ALLIANCE MUNICIPAL INCOME FUND II
<PAGE>
------------------------
PENNSYLVANIA PORTFOLIO
PORTFOLIO OF INVESTMENTS
------------------------
Standard & Principal
Poor's Amount
Ratings(a) (000) Value
--------------------------------------------------------------------------------
Puerto Rico-2.7%
AAA Puerto Rico Hsg Fin Corp Rev SFMR
GNMA Ser 98 AMT
5.20%, 12/01/32............................. $4,005 $ 3,701,621
------------
Total Investments-97.0%
(cost $128,321,243)...................... 132,254,422
Other assets less liabilities-3.0%.......... 4,052,222
------------
Net Assets-100%............................. $136,306,644
============
See footnote summary on page 36.
See Glossary of Terms on page 36.
See notes to financial statements.
--------------------------------------------------------------------------------
ALLIANCE MUNICIPAL INCOME FUND II o 33
<PAGE>
------------------------
VIRGINIA PORTFOLIO
PORTFOLIO OF INVESTMENTS
------------------------
VIRGINIA PORTFOLIO
PORTFOLIO OF INVESTMENTS
September 30, 2000
Standard & Principal
Poor's Amount
Ratings(a) (000) Value
--------------------------------------------------------------------------------
Municipal Bonds-95.0%
Virginia-92.1%
A+ Alexandria MFHR
(Buckingham Village Apts) Ser 96A AMT
6.15%, 1/01/29.............................. $ 4,000 $ 4,020,400
AAA Arlington Cnty IDR
(Ogden Martin) FSA Ser 98B AMT
5.25%, 1/01/09.............................. 2,500 2,544,975
Baa2 Bedford Cnty IDR
(Nekoosa Pkg/GA Pacific) Ser 99 AMT
6.30%, 12/01/25(b).......................... 3,000 2,951,370
Baa2 Bedford Cnty IDR
(Nekoosa Pkg/GA Pacific) Ser 99A AMT
6.55%, 12/01/25(b).......................... 16,000 16,086,240
BBB Giles Cnty IDR
(Hoechst Celanese Corp) Ser 96 AMT
6.45%, 5/01/26.............................. 7,500 7,316,250
Baa2 Goochland Cnty IDR
(Nekoosa Pkg/GA Pacific) Ser 98 AMT
5.65%, 12/01/25(b).......................... 1,435 1,286,406
A- Greater Richmond
(Convention Ctr Proj) Ser 00
6.25%, 6/15/32.............................. 11,000 11,396,110
AAA Harrisonburg MFHR
(Battery Heights Assoc) GNMA Ser 96A
6.25%, 4/20/36.............................. 4,185 4,314,065
AAA Harrisonburg MFHR
(Greens of Salem Run) FSA Ser 97 AMT
6.30%, 4/01/29.............................. 4,160 4,312,006
BB- Henrico Cnty IDR Solid Waste Rev
(Browning-Ferris) Ser 97A AMT
5.875%, 3/01/17............................. 4,750 4,141,098
A+ Henry Cnty Hosp Rev
(Memorial Hosp Martinsville & Henry) Ser 97
6.00%, 1/01/27.............................. 1,250 1,243,325
BBB+ Isle of Wight Cnty Solid Waste Rev
(Union Camp Corp) Ser 94 AMT
6.55%, 4/01/24.............................. 4,000 4,068,000
A+ James City Cnty Solid Waste Rev
(Anheuser Busch Proj) Ser 97 AMT
6.00%, 4/01/32.............................. 4,200 4,225,116
AAA Loudoun Cnty IDR Hosp Rev
(Loudoun Hosp Ctr) FSA Ser 95
5.80%, 6/01/20.............................. 2,500 2,527,250
AA- Metropolitan Washington DC Arpt Rev
Ser 97B AMT
5.50%, 10/01/23............................. 5,300 5,099,448
--------------------------------------------------------------------------------
34 o ALLIANCE MUNICIPAL INCOME FUND II
<PAGE>
------------------------
VIRGINIA PORTFOLIO
PORTFOLIO OF INVESTMENTS
------------------------
Standard & Principal
Poor's Amount
Ratings(a) (000) Value
--------------------------------------------------------------------------------
AAA Newport News
(Mennowood Cmntys) GNMA Ser 96A
6.25%, 8/01/36.............................. $2,610 $ 2,700,906
NR Staunton Ed Fac
(Mary Baldwin College) Ser 96
6.75%, 11/01/21............................. 3,145 3,231,488
AA+ Virginia Hsg Dev Auth
(Commonwealth Mtg) Ser 00B
6.125%, 7/01/18............................. 5,500 5,668,135
AA+ Virginia Hsg Dev Auth
(Commonwealth Mtg) Ser 96B AMT
6.375%, 1/01/26............................. 1,540 1,572,294
AA+ Virginia Hsg Dev Auth MFHR
Ser 99 AMT
5.95%, 2/01/23.............................. 5,525 5,547,984
AA Virginia Res Auth Sewer Sys Rev
(Hopewell Regl Wastewater Fac)
Ser 95A AMT
6.00%, 10/01/25............................. 1,375 1,392,971
------------
95,645,837
------------
Puerto Rico-2.9%
AA Puerto Rico Fin Auth
(Ascension Hlth) Ser 00A
6.125%, 11/15/30............................ 1,400 1,434,482
AAA Puerto Rico Hsg Fin Corp Rev SFMR
GNMA Ser 98A AMT
5.20%, 12/01/32............................. 1,755 1,622,059
------------
3,056,541
------------
Total Investments-95.0%
(cost $95,711,796)....................... 98,702,378
Other assets less liabilities-5.0%.......... 5,146,155
------------
Net Assets-100%............................. $103,848,533
============
See footnote summary on page 36.
See Glossary of Terms on page 36.
See notes to financial statements.
--------------------------------------------------------------------------------
ALLIANCE MUNICIPAL INCOME FUND II o 35
<PAGE>
------------------------
VIRGINIA PORTFOLIO
PORTFOLIO OF INVESTMENTS
------------------------
(a) Unaudited.
(b) Moody's Rating-unaudited.
(c) Fitch's Rating-unaudited.
(d) Inverse floater security-security with variable or floating interest rate
that moves in opposite direction of short-term interest rates.
(e) Indicates a security that has a zero coupon that remains in effect until
12/01/01. On 12/01/01 it converts to 6.907% and will remain in effect
until 12/01/16.
Glossary of Terms:
ACA American Capital Access
AMBAC American Municipal Bond Assurance Corporation
AMT Alternative Minimum Tax
COP Certificate of Participation
ETM Escrow to Maturity
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
See notes to financial statements.
--------------------------------------------------------------------------------
36 o ALLIANCE MUNICIPAL INCOME FUND II
<PAGE>
---------------------------------
STATEMENT OF ASSETS & LIABILITIES
---------------------------------
STATEMENT OF ASSETS & LIABILITIES
September 30, 2000
Arizona Florida
============= =============
Assets
Investment in securities, at value
(cost: $86,168,507 and $171,140,748,
respectively) ............................. $ 88,839,115 $ 175,913,446
Cash ......................................... 271,197 7,648
Interest receivable .......................... 1,646,399 4,396,493
Receivable for shares of beneficial
interest sold ............................. 179,648 638,024
Receivable for investment securities sold .... -0- 6,455,649
------------- -------------
Total assets ................................. 90,936,359 187,411,260
------------- -------------
Liabilities
Payable for shares of beneficial
interest redeemed ......................... 254,355 458,597
Dividends payable ............................ 123,056 245,569
Distribution fee payable ..................... 47,005 104,575
Advisory fee payable ......................... 12,126 41,858
Payable for investment securities
purchased ................................. -0- 7,201,070
Accrued expenses and other liabilities ....... 69,253 82,309
------------- -------------
Total liabilities ............................ 505,795 8,133,978
------------- -------------
Net Assets ................................... $ 90,430,564 $ 179,277,282
============= =============
Composition Of Net Assets
Shares of beneficial interest, at par ........ $ 86,445 $ 183,611
Additional paid-in capital ................... 91,588,907 191,499,978
Distributions in excess of net investment
income .................................... (107,900) (148,512)
Accumulated net realized loss on
investment transactions ................... (3,807,496) (17,030,493)
Net unrealized appreciation of investments ... 2,670,608 4,772,698
------------- -------------
$ 90,430,564 $ 179,277,282
============= =============
Class A Shares
Net assets ................................... $ 47,258,484 $ 75,422,390
------------- -------------
Shares of beneficial interest outstanding .... 4,515,596 7,727,021
------------- -------------
Class B Shares
Net assets ................................... $ 34,231,517 $ 65,391,102
------------- -------------
Shares of beneficial interest outstanding .... 3,273,909 6,695,823
------------- -------------
Class C Shares
Net assets ................................... $ 8,940,563 $ 38,463,790
------------- -------------
Shares of beneficial interest outstanding .... 855,014 3,938,239
------------- -------------
Calculation Of Maximum Offering Price
Class A Shares
Net asset value and redemption price
per share ................................. $10.47 $9.76
Sales charge--4.25% of public
offering price ............................ .46 .43
------ ------
Maximum offering price ....................... $10.93 $10.19
====== ======
Class B Shares
Net asset value and offering price
per share ................................. $10.46 $9.77
====== ======
Class C Shares
Net asset value and offering price
per share ................................. $10.46 $9.77
====== ======
See notes to financial statements.
--------------------------------------------------------------------------------
ALLIANCE MUNICIPAL INCOME FUND II o 37
<PAGE>
---------------------------------
STATEMENT OF ASSETS & LIABILITIES
---------------------------------
Massachusetts Michigan
============= =============
Assets
Investment in securities, at value
(cost: $110,596,396 and $39,090,386,
respectively) ............................. $ 114,273,486 $ 40,071,227
Cash ......................................... 63,908 420,094
Receivable for investment securities sold .... 6,589,160 993,545
Interest receivable .......................... 2,040,844 653,321
Receivable for shares of beneficial
interest sold ............................. 207,658 307,945
------------- -------------
Total assets ................................. 123,175,056 42,446,132
------------- -------------
Liabilities
Payable for investment securities
purchased ................................. 6,073,208 685,994
Dividends payable ............................ 173,504 55,099
Payable for shares of beneficial
interest redeemed ......................... 154,582 24,627
Distribution fee payable ..................... 70,077 25,583
Advisory fee payable ......................... 28,718 10,340
Accrued expenses and other liabilities ....... 85,465 31,404
------------- -------------
Total liabilities ............................ 6,585,554 833,047
------------- -------------
Net Assets ................................... $ 116,589,502 $ 41,613,085
============= =============
Composition Of Net Assets
Shares of beneficial interest, at par ........ $ 110,207 $ 41,002
Additional paid-in capital ................... 122,236,299 41,687,154
Distributions in excess of net investment
income .................................... (42,894) (13,814)
Accumulated net realized loss on
investment transactions ................... (9,391,200) (1,082,098)
Net unrealized appreciation of investments ... 3,677,090 980,841
------------- -------------
$ 116,589,502 $ 41,613,085
============= =============
Class A Shares
Net assets ................................... $ 45,418,261 $ 14,608,939
------------- -------------
Shares of beneficial interest outstanding .... 4,289,623 1,438,380
------------- -------------
Class B Shares
Net assets ................................... $ 39,964,033 $ 14,943,254
------------- -------------
Shares of beneficial interest outstanding .... 3,779,628 1,472,935
------------- -------------
Class C Shares
Net assets ................................... $ 31,207,208 $ 12,060,892
------------- -------------
Shares of beneficial interest outstanding .... 2,951,490 1,188,903
------------- -------------
Calculation Of Maximum Offering Price
Class A Shares
Net asset value and redemption price
per share ................................. $10.59 $10.16
Sales charge--4.25% of public
offering price ............................ .47 .45
------ ------
Maximum offering price ....................... $11.06 $10.61
====== ======
Class B Shares
Net asset value and offering price
per share ................................. $10.57 $10.15
====== ======
Class C Shares
Net asset value and offering price
per share ................................. $10.57 $10.14
====== ======
See notes to financial statements.
--------------------------------------------------------------------------------
38 o ALLIANCE MUNICIPAL INCOME FUND II
<PAGE>
---------------------------------
STATEMENT OF ASSETS & LIABILITIES
---------------------------------
Minnesota New Jersey
============= =============
Assets
Investment in securities, at value
(cost: $35,835,241, $134,872,461,
respectively) ............................. $ 36,977,336 $ 140,491,950
Cash ......................................... 164,352 44,294
Receivable for investment securities sold .... 1,499,295 2,263,868
Receivable for shares of beneficial
interest sold ............................. 998,637 1,280,306
Interest receivable .......................... 617,156 3,400,016
------------- -------------
Total assets ................................. 40,256,776 147,480,434
------------- -------------
Liabilities
Payable for investment securities
purchased ................................. 256,112 3,583,887
Payable for shares of beneficial
interest redeemed ......................... 84,630 576,966
Dividends payable ............................ 53,347 190,388
Distribution fee payable ..................... 20,638 88,776
Advisory fee payable ......................... 5,335 540
Accrued expenses and other liabilities ....... 36,680 108,949
------------- -------------
Total liabilities ............................ 456,742 4,549,506
------------- -------------
Net Assets ................................... $ 39,800,034 $ 142,930,928
============= =============
Composition Of Net Assets
Shares of beneficial interest, at par ........ $ 40,960 $ 144,010
Additional paid-in capital ................... 41,248,711 146,923,219
Undistributed net investment income (loss) ... 11,612 (31,179)
Accumulated net realized loss on
investment transactions ................... (2,643,344) (9,724,611)
Net unrealized appreciation of
investments ............................... 1,142,095 5,619,489
------------- -------------
$ 39,800,034 $ 142,930,928
============= =============
Class A Shares
Net assets ................................... $ 20,212,466 $ 49,666,629
------------- -------------
Shares of beneficial interest outstanding .... 2,080,253 5,004,701
------------- -------------
Class B Shares
Net assets ................................... $ 12,063,872 $ 62,149,063
------------- -------------
Shares of beneficial interest outstanding .... 1,241,552 6,262,065
------------- -------------
Class C Shares
Net assets ................................... $ 7,523,696 $ 31,115,236
------------- -------------
Shares of beneficial interest outstanding .... 774,150 3,134,272
------------- -------------
Calculation Of Maximum Offering Price
Class A Shares
Net asset value and redemption price
per share ................................. $9.72 $9.92
Sales charge--4.25% of public
offering price ............................ .43 .44
------ ------
Maximum offering price ....................... $10.15 $10.36
====== ======
Class B Shares
Net asset value and offering price
per share ................................. $9.72 $9.92
====== ======
Class C Shares
Net asset value and offering price
per share ................................. $9.72 $9.93
====== ======
See notes to financial statements.
--------------------------------------------------------------------------------
ALLIANCE MUNICIPAL INCOME FUND II o 39
<PAGE>
---------------------------------
STATEMENT OF ASSETS & LIABILITIES
---------------------------------
Ohio Pennsylvania
============= =============
Assets
Investment in securities, at value
(cost: $91,174,392 and $128,321,243,
respectively) ............................. $ 94,041,521 $ 132,254,422
Receivable for investment securities sold .... 3,071,327 3,129,876
Interest receivable .......................... 1,290,884 3,120,279
Receivable for shares of beneficial
interest sold ............................. 462,056 922,305
------------- -------------
Total assets ................................. 98,865,788 139,426,882
------------- -------------
Liabilities
Due to custodian ............................. 39,175 98,117
Payable for investment securities
purchased ................................. 1,911,071 2,274,693
Payable for shares of beneficial
interest redeemed ......................... 393,668 339,935
Dividends payable ............................ 132,568 188,716
Distribution fee payable ..................... 59,046 72,680
Advisory fee payable ......................... 22,170 42,032
Accrued expenses and other liabilities ....... 97,270 104,065
------------- -------------
Total liabilities ............................ 2,654,968 3,120,238
------------- -------------
Net Assets ................................... $ 96,210,820 $ 136,306,644
============= =============
Composition Of Net Assets
Shares of beneficial interest, at par ........ $ 98,486 $ 137,939
Additional paid-in capital ................... 101,408,254 141,614,938
Undistributed net investment income (loss) ... 73,521 (47,116)
Accumulated net realized loss on
investment transactions ................... (8,236,570) (9,332,296)
Net unrealized appreciation of investments ... 2,867,129 3,933,179
------------- -------------
$ 96,210,820 $ 136,306,644
============= =============
Class A Shares
Net assets ................................... $ 32,489,621 $ 68,287,930
------------- -------------
Shares of beneficial interest outstanding .... 3,326,614 6,911,019
------------- -------------
Class B Shares
Net assets ................................... $ 40,812,183 $ 44,713,097
------------- -------------
Shares of beneficial interest outstanding .... 4,177,701 4,524,441
------------- -------------
Class C Shares
Net assets ................................... $ 22,909,016 $ 23,305,617
------------- -------------
Shares of beneficial interest outstanding .... 2,344,283 2,358,464
------------- -------------
Calculation Of Maximum Offering Price
Class A Shares
Net asset value and redemption price
per share ................................. $9.77 $9.88
Sales charge--4.25% of public
offering price ............................ .43 .44
------ ------
Maximum offering price ....................... $10.20 $10.32
====== ======
Class B Shares
Net asset value and offering price
per share ................................. $9.77 $9.88
====== ======
Class C Shares
Net asset value and offering price
per share ................................. $9.77 $9.88
====== ======
See notes to financial statements.
--------------------------------------------------------------------------------
40 o ALLIANCE MUNICIPAL INCOME FUND II
<PAGE>
---------------------------------
STATEMENT OF ASSETS & LIABILITIES
---------------------------------
Virginia
=============
Assets
Investment in securities, at value
(cost: $95,711,796) ..................................... $ 98,702,378
Cash ....................................................... 520,274
Receivable for investment securities sold .................. 2,822,288
Interest receivable ........................................ 2,055,496
Receivable for shares of beneficial interest
sold .................................................... 116,312
-------------
Total assets ............................................... 104,216,748
-------------
Liabilities
Dividends payable .......................................... 141,618
Payable for shares of beneficial interest redeemed ......... 104,743
Distribution fee payable ................................... 63,303
Advisory fee payable ....................................... 17,399
Accrued expenses and other liabilities ..................... 41,152
-------------
Total liabilities .......................................... 368,215
-------------
Net Assets ................................................. $ 103,848,533
=============
Composition Of Net Assets
Shares of beneficial interest, at par ...................... $ 100,411
Additional paid-in capital ................................. 106,291,647
Distributions in excess of net investment
income .................................................. (26,791)
Accumulated net realized loss on
investment transactions ................................. (5,507,316)
Net unrealized appreciation of investments ................. 2,990,582
-------------
$ 103,848,533
=============
Class A Shares
Net assets ................................................. $ 37,784,113
-------------
Shares of beneficial interest outstanding .................. 3,650,248
-------------
Class B Shares
Net assets ................................................. $ 49,216,113
-------------
Shares of beneficial interest outstanding .................. 4,760,574
-------------
Class C Shares
Net assets ................................................. $ 16,848,307
-------------
Shares of beneficial interest outstanding .................. 1,630,321
-------------
Calculation Of Maximum Offering Price
Class A Shares
Net asset value and redemption price
per share ............................................... $10.35
Sales charge--4.25% of public
offering price .......................................... .46
------
Maximum offering price ..................................... $10.81
======
Class B Shares
Net asset value and offering price
per share ............................................... $10.34
======
Class C Shares
Net asset value and offering price
per share ............................................... $10.33
======
See notes to financial statements.
--------------------------------------------------------------------------------
ALLIANCE MUNICIPAL INCOME FUND II o 41
<PAGE>
-----------------------
STATEMENT OF OPERATIONS
-----------------------
STATEMENT OF OPERATIONS
Year Ended September 30, 2000
Arizona Florida
============ ============
Investment Income
Interest ................................... $ 5,059,479 $ 11,205,913
------------ ------------
Expenses
Advisory fee ............................... 517,679 1,119,008
Distribution fee - Class A ................. 124,512 219,512
Distribution fee - Class B ................. 323,271 652,939
Distribution fee - Class C ................. 89,974 405,769
Custodian .................................. 98,454 113,152
Administrative ............................. 93,000 93,000
Transfer agency ............................ 41,491 87,880
Audit and legal ............................ 31,220 54,663
Registration ............................... 26,808 16,500
Printing ................................... 4,161 22,513
Trustees' fees ............................. 3,500 3,500
Miscellaneous .............................. 4,028 5,742
------------ ------------
Total expenses ............................. 1,358,098 2,794,178
Less: expenses waived and reimbursed by
Adviser (see Note B) .................... (422,763) (738,686)
------------ ------------
Net expenses ............................... 935,335 2,055,492
------------ ------------
Net investment income ...................... 4,124,144 9,150,421
------------ ------------
Realized And Unrealized Gain (Loss)
On Investments
Net realized loss on investment
transactions ............................ (1,443,971) (6,318,682)
Net change in unrealized
appreciation/depreciation
of investments .......................... 2,222,566 4,972,716
------------ ------------
Net gain (loss) on investments ............. 778,595 (1,345,966)
------------ ------------
Net Increase In Net Assets
From Operations ......................... $ 4,902,739 $ 7,804,455
============ ============
See notes to financial statements.
--------------------------------------------------------------------------------
42 o ALLIANCE MUNICIPAL INCOME FUND II
<PAGE>
-----------------------
STATEMENT OF OPERATIONS
-----------------------
Massachusetts Michigan
============= ===========
Investment Income
Interest ..................................... $ 7,374,350 $ 2,387,991
----------- -----------
Expenses
Advisory fee ................................. 731,359 237,658
Distribution fee - Class A ................... 142,271 39,731
Distribution fee - Class B ................... 401,078 134,600
Distribution fee - Class C ................... 294,859 113,215
Custodian .................................... 105,520 90,790
Administrative ............................... 93,000 93,000
Transfer agency .............................. 74,933 36,866
Audit and legal .............................. 40,667 21,992
Printing ..................................... 22,927 8,172
Registration ................................. 17,590 14,699
Trustees' fees ............................... 3,500 3,500
Miscellaneous ................................ 2,867 3,919
----------- -----------
Total expenses ............................... 1,930,571 798,142
Less: expenses waived and reimbursed by
Adviser (see Note B) ...................... (543,195) (249,856)
----------- -----------
Net expenses ................................. 1,387,376 548,286
----------- -----------
Net investment income ........................ 5,986,974 1,839,705
----------- -----------
Realized And Unrealized Gain (Loss)
On Investments
Net realized loss on investment
transactions .............................. (4,330,566) (262,417)
Net change in unrealized
appreciation/depreciation
of investments ............................ 3,361,018 655,739
----------- -----------
Net gain (loss) on investments ............... (969,548) 393,322
----------- -----------
Net Increase In Net Assets
From Operations ........................... $ 5,017,426 $ 2,233,027
=========== ===========
See notes to financial statements.
--------------------------------------------------------------------------------
ALLIANCE MUNICIPAL INCOME FUND II o 43
<PAGE>
-----------------------
STATEMENT OF OPERATIONS
-----------------------
Minnesota New Jersey
=========== ===========
Investment Income
Interest ..................................... $ 2,250,695 $ 8,329,477
----------- -----------
Expenses
Advisory fee ................................. 221,496 840,466
Distribution fee - Class A ................... 44,734 128,368
Distribution fee - Class B ................... 125,150 609,523
Distribution fee - Class C ................... 80,132 307,330
Custodian .................................... 93,728 107,534
Administrative ............................... 93,000 93,000
Transfer agency .............................. 34,293 130,899
Audit and legal .............................. 18,969 40,958
Printing ..................................... 9,558 23,055
Registration ................................. 5,818 13,999
Trustees' fees ............................... 3,500 3,500
Miscellaneous ................................ 3,134 3,852
----------- -----------
Total expenses ............................... 733,512 2,302,484
Less: expenses waived and reimbursed by
Adviser (see Note B) ...................... (304,502) (517,731)
----------- -----------
Net expenses ................................. 429,010 1,784,753
----------- -----------
Net investment income ........................ 1,821,685 6,544,724
----------- -----------
Realized And Unrealized Gain (Loss)
On Investments
Net realized loss on investment
transactions .............................. (725,502) (3,336,757)
Net change in unrealized
appreciation/depreciation
of investments ............................ 849,993 3,260,518
----------- -----------
Net gain (loss) on investments ............... 124,491 (76,239)
----------- -----------
Net Increase In Net Assets
From Operations ........................... $ 1,946,176 $ 6,468,485
=========== ===========
See notes to financial statements.
--------------------------------------------------------------------------------
44 o ALLIANCE MUNICIPAL INCOME FUND II
<PAGE>
-----------------------
STATEMENT OF OPERATIONS
-----------------------
Ohio Pennsylvania
=========== ============
Investment Income
Interest ..................................... $ 5,981,506 $ 8,408,665
----------- -----------
Expenses
Advisory fee ................................. 592,243 827,046
Distribution fee - Class A ................... 85,333 185,013
Distribution fee - Class B ................... 434,220 468,401
Distribution fee - Class C ................... 228,930 238,167
Custodian .................................... 101,842 106,803
Administrative ............................... 93,000 93,000
Transfer agency .............................. 72,683 100,791
Audit and legal .............................. 37,143 47,754
Registration ................................. 19,949 18,694
Printing ..................................... 15,518 33,155
Trustees' fees ............................... 3,500 3,500
Miscellaneous ................................ 4,033 3,337
----------- -----------
Total expenses ............................... 1,688,394 2,125,661
Less: expenses waived and reimbursed by
Adviser (see Note B) ...................... (501,276) (369,269)
----------- -----------
Net expenses ................................. 1,187,118 1,756,392
----------- -----------
Net investment income ........................ 4,794,388 6,652,273
----------- -----------
Realized And Unrealized Gain (Loss)
On Investments
Net realized loss on investment
transactions .............................. (3,051,400) (3,216,273)
Net change in unrealized
appreciation/depreciation
of investments ............................ 1,749,610 2,618,243
----------- -----------
Net loss on investments ...................... (1,301,790) (598,030)
----------- -----------
Net Increase In Net Assets
From Operations ........................... $ 3,492,598 $ 6,054,243
=========== ===========
See notes to financial statements.
--------------------------------------------------------------------------------
ALLIANCE MUNICIPAL INCOME FUND II o 45
<PAGE>
-----------------------
STATEMENT OF OPERATIONS
-----------------------
Virginia
===========
Investment Income
Interest .................................................. $ 5,673,609
-----------
Expenses
Advisory fee .............................................. 571,793
Distribution fee - Class A ................................ 96,432
Distribution fee - Class B ................................ 447,568
Distribution fee - Class C ................................ 145,861
Custodian ................................................. 100,580
Administrative ............................................ 93,000
Transfer agency ........................................... 62,103
Audit and legal ........................................... 23,833
Printing .................................................. 13,862
Registration .............................................. 9,736
Trustees' fees ............................................ 3,500
Miscellaneous ............................................. 4,120
-----------
Total expenses ............................................ 1,572,388
Less: expenses waived and reimbursed by
Adviser (see Note B) ................................... (539,769)
-----------
Net expenses .............................................. 1,032,619
-----------
Net investment income ..................................... 4,640,990
-----------
Realized And Unrealized Gain (Loss)
On Investments
Net realized loss on investment
transactions ........................................... (2,134,258)
Net change in unrealized
appreciation/depreciation
of investments ......................................... 2,656,230
-----------
Net gain on investments ................................... 521,972
-----------
Net Increase In Net Assets
From Operations ........................................ $ 5,162,962
===========
See notes to financial statements.
--------------------------------------------------------------------------------
46 o ALLIANCE MUNICIPAL INCOME FUND II
<PAGE>
----------------------------------
STATEMENT OF CHANGES IN NET ASSETS
----------------------------------
STATEMENT OF CHANGES
IN NET ASSETS
Arizona
==============================
Year Ended Year Ended
September 30, September 30,
2000 1999
============= =============
Increase (Decrease) In Net
Assets From Operations
Net investment income ........................ $ 4,124,144 $ 2,551,128
Net realized loss on investment
transactions .............................. (1,443,971) (2,363,497)
Net change in unrealized
appreciation/depreciation
of investments ............................ 2,222,566 (1,186,209)
------------ ------------
Net increase (decrease) in net assets
from operations ........................... 4,902,739 (998,578)
Dividends And Distributions
To Shareholders From:
Net investment income
Class A ................................... (2,210,559) (1,422,629)
Class B ................................... (1,496,494) (856,109)
Class C ................................... (417,091) (272,390)
Distributions in excess of net investment
income
Class A ................................... -0- (93,745)
Class B ................................... (523) (75,448)
Class C ................................... (146) (24,429)
Net realized gain on investments
Class A ................................... -0- (79,250)
Class B ................................... -0- (55,031)
Class C ................................... -0- (18,802)
Transactions In Shares
Of Beneficial Interest
Net increase ................................. 10,570,901 43,387,517
------------ ------------
Total increase ............................... 11,348,827 39,491,106
Net Assets
Beginning of period .......................... 79,081,737 39,590,631
------------ ------------
End of period ................................ $ 90,430,564 $ 79,081,737
============ ============
See notes to financial statements.
--------------------------------------------------------------------------------
ALLIANCE MUNICIPAL INCOME FUND II o 47
<PAGE>
----------------------------------
STATEMENT OF CHANGES IN NET ASSETS
----------------------------------
Florida
==============================
Year Ended Year Ended
September 30, September 30,
2000 1999
============= =============
Increase (Decrease) In Net
Assets From Operations
Net investment income ........................ $ 9,150,421 $ 7,436,826
Net realized loss on investment
transactions .............................. (6,318,682) (6,777,319)
Net change in unrealized
appreciation/depreciation
of investments ............................ 4,972,716 (4,449,716)
------------- -------------
Net increase (decrease) in net assets
from operations ........................... 7,804,455 (3,790,209)
Dividends And Distributions
To Shareholders From:
Net investment income
Class A ................................... (4,014,035) (3,312,718)
Class B ................................... (3,097,119) (2,459,083)
Class C ................................... (1,928,204) (1,665,025)
Distributions in excess of net investment
income
Class A ................................... -0- (171,909)
Class B ................................... -0- (150,028)
Class C ................................... -0- (106,023)
Transactions In Shares
Of Beneficial Interest
Net increase (decrease) ...................... (8,941,141) 84,405,261
------------- -------------
Total increase (decrease) .................... (10,176,044) 72,750,266
Net Assets
Beginning of period .......................... 189,453,326 116,703,060
------------- -------------
End of period ................................ $ 179,277,282 $ 189,453,326
============= =============
See notes to financial statements.
--------------------------------------------------------------------------------
48 o ALLIANCE MUNICIPAL INCOME FUND II
<PAGE>
----------------------------------
STATEMENT OF CHANGES IN NET ASSETS
----------------------------------
Massachusetts
==============================
Year Ended Year Ended
September 30, September 30,
2000 1999
============= =============
Increase (Decrease) In Net
Assets From Operations
Net investment income ........................ $ 5,986,974 $ 4,187,302
Net realized loss on investment
transactions .............................. (4,330,566) (5,060,634)
Net change in unrealized
appreciation/depreciation
of investments ............................ 3,361,018 (1,540,378)
------------- -------------
Net increase (decrease) in net assets
from operations ........................... 5,017,426 (2,413,710)
Dividends And Distributions
To Shareholders From:
Net investment income
Class A ................................... (2,571,130) (1,836,597)
Class B ................................... (1,903,093) (1,342,251)
Class C ................................... (1,399,961) (1,008,454)
Distributions in excess of net investment
income
Class A ................................... -0- (135,677)
Class B ................................... -0- (131,050)
Class C ................................... -0- (102,932)
Net realized gain on investments
Class A ................................... -0- (80,419)
Class B ................................... -0- (63,701)
Class C ................................... -0- (54,163)
Transactions In Shares
Of Beneficial Interest
Net increase ................................. 694,663 62,444,310
------------- -------------
Total increase (decrease) .................... (162,095) 55,275,356
Net Assets
Beginning of period .......................... 116,751,597 61,476,241
------------- -------------
End of period ................................ $ 116,589,502 $ 116,751,597
============= =============
See notes to financial statements.
--------------------------------------------------------------------------------
ALLIANCE MUNICIPAL INCOME FUND II o 49
<PAGE>
----------------------------------
STATEMENT OF CHANGES IN NET ASSETS
----------------------------------
Michigan
==============================
Year Ended Year Ended
September 30, September 30,
2000 1999
============= =============
Increase (Decrease) In Net
Assets From Operations
Net investment income ........................ $ 1,839,705 $ 1,306,512
Net realized loss on investment
transactions .............................. (262,417) (794,295)
Net change in unrealized
appreciation/depreciation
of investments ............................ 655,739 (772,736)
------------ ------------
Net increase (decrease) in net assets
from operations ........................... 2,233,027 (260,519)
Dividends And Distributions
To Shareholders From:
Net investment income
Class A ................................... (690,808) (461,761)
Class B ................................... (606,607) (447,452)
Class C ................................... (511,085) (397,299)
Distributions in excess of net investment
income
Class A ................................... -0- (30,996)
Class B ................................... -0- (38,763)
Class C ................................... -0- (35,476)
Net realized gain on investments
Class A ................................... -0- (58,573)
Class B ................................... -0- (65,313)
Class C ................................... -0- (63,713)
Transactions In Shares
Of Beneficial Interest
Net increase ................................. 4,836,586 11,177,569
------------ ------------
Total increase ............................... 5,261,113 9,317,704
Net Assets
Beginning of period .......................... 36,351,972 27,034,268
------------ ------------
End of period ................................ $ 41,613,085 $ 36,351,972
============ ============
See notes to financial statements.
--------------------------------------------------------------------------------
50 o ALLIANCE MUNICIPAL INCOME FUND II
<PAGE>
----------------------------------
STATEMENT OF CHANGES IN NET ASSETS
----------------------------------
Minnesota
==============================
Year Ended Year Ended
September 30, September 30,
2000 1999
============= =============
Increase (Decrease) In Net
Assets From Operations
Net investment income ........................ $ 1,821,685 $ 1,373,071
Net realized loss on investment
transactions .............................. (725,502) (774,099)
Net change in unrealized
appreciation/depreciation
of investments ............................ 849,993 (1,040,378)
------------ ------------
Net increase (decrease) in net assets
from operations ........................... 1,946,176 (441,406)
Dividends And Distributions
To Shareholders From:
Net investment income
Class A ................................... (809,194) (410,462)
Class B ................................... (582,388) (610,472)
Class C ................................... (373,890) (352,137)
Distributions in excess of net investment
income
Class A ................................... -0- (13,422)
Class B ................................... -0- (25,067)
Class C ................................... -0- (13,957)
Transactions In Shares
Of Beneficial Interest
Net increase ................................. 5,826,773 7,815,621
------------ ------------
Total increase ............................... 6,007,477 5,948,698
Net Assets
Beginning of period .......................... 33,792,557 27,843,859
------------ ------------
End of period ................................ $ 39,800,034 $ 33,792,557
============ ============
See notes to financial statements.
--------------------------------------------------------------------------------
ALLIANCE MUNICIPAL INCOME FUND II o 51
<PAGE>
----------------------------------
STATEMENT OF CHANGES IN NET ASSETS
----------------------------------
New Jersey
==============================
Year Ended Year Ended
September 30, September 30,
2000 1999
============= =============
Increase (Decrease) In Net
Assets From Operations
Net investment income ........................ $ 6,544,724 $ 4,960,041
Net realized loss on investment
transactions .............................. (3,336,757) (2,765,281)
Net change in unrealized
appreciation/depreciation
of investments ............................ 3,260,518 (3,817,282)
------------- -------------
Net increase (decrease) in net assets
from operations ........................... 6,468,485 (1,622,522)
Dividends And Distributions
To Shareholders From:
Net investment income
Class A ................................... (2,268,250) (1,250,108)
Class B ................................... (2,756,064) (2,454,054)
Class C ................................... (1,390,783) (1,255,879)
Distributions in excess of net investment
income
Class A ................................... -0- (16,310)
Class B ................................... -0- (57,365)
Class C ................................... -0- (32,337)
Transactions In Shares
Of Beneficial Interest
Net increase ................................. 12,261,589 40,926,509
------------- -------------
Total increase ............................... 12,314,977 34,237,934
Net Assets
Beginning of period .......................... 130,615,951 96,378,017
------------- -------------
End of period ................................ $ 142,930,928 $ 130,615,951
============= =============
See notes to financial statements.
--------------------------------------------------------------------------------
52 o ALLIANCE MUNICIPAL INCOME FUND II
<PAGE>
----------------------------------
STATEMENT OF CHANGES IN NET ASSETS
----------------------------------
Ohio
==============================
Year Ended Year Ended
September 30, September 30,
2000 1999
============= =============
Increase (Decrease) In Net
Assets From Operations
Net investment income ........................ $ 4,794,388 $ 3,735,632
Net realized loss on investment
transactions .............................. (3,051,400) (2,325,166)
Net change in unrealized
appreciation/depreciation
of investments ............................ 1,749,610 (2,893,533)
------------- -------------
Net increase (decrease) in net assets
from operations ........................... 3,492,598 (1,483,067)
Dividends And Distributions
To Shareholders From:
Net investment income
Class A ................................... (1,528,439) (914,541)
Class B ................................... (2,004,386) (1,908,969)
Class C ................................... (1,058,452) (912,122)
Distributions in excess of net investment
income
Class A ................................... -0- (44,837)
Class B ................................... -0- (108,943)
Class C ................................... -0- (49,086)
Transactions In Shares
Of Beneficial Interest
Net increase (decrease) ...................... (3,100,234) 37,636,801
------------- -------------
Total increase (decrease) .................... (4,198,913) 32,215,236
Net Assets
Beginning of period .......................... 100,409,733 68,194,497
------------- -------------
End of period ................................ $ 96,210,820 $ 100,409,733
============= =============
See notes to financial statements.
--------------------------------------------------------------------------------
ALLIANCE MUNICIPAL INCOME FUND II o 53
<PAGE>
----------------------------------
STATEMENT OF CHANGES IN NET ASSETS
----------------------------------
Pennsylvania
==============================
Year Ended Year Ended
September 30, September 30,
2000 1999
============= =============
Increase (Decrease) In Net
Assets From Operations
Net investment income ........................ $ 6,652,273 $ 5,141,597
Net realized loss on investment
transactions .............................. (3,216,273) (5,789,857)
Net change in unrealized
appreciation/depreciation
of investments ............................ 2,618,243 (3,757,992)
------------- -------------
Net increase (decrease) in net assets
from operations ........................... 6,054,243 (4,406,252)
Dividends And Distributions
To Shareholders From:
Net investment income
Class A ................................... (3,276,524) (2,252,014)
Class B ................................... (2,143,368) (1,940,681)
Class C ................................... (1,091,618) (948,902)
Distributions in excess of net investment
income
Class A ................................... -0- (167,279)
Class B ................................... -0- (181,017)
Class C ................................... -0- (84,332)
Transactions In Shares
Of Beneficial Interest
Net increase (decrease) ...................... (5,642,255) 59,757,965
------------- -------------
Total increase (decrease) .................... (6,099,522) 49,777,488
Net Assets
Beginning of period .......................... 142,406,166 92,628,678
------------- -------------
End of period ................................ $ 136,306,644 $ 142,406,166
============= =============
See notes to financial statements.
--------------------------------------------------------------------------------
54 o ALLIANCE MUNICIPAL INCOME FUND II
<PAGE>
----------------------------------
STATEMENT OF CHANGES IN NET ASSETS
----------------------------------
Virginia
==============================
Year Ended Year Ended
September 30, September 30,
2000 1999
============= =============
Increase (Decrease) In Net
Assets From Operations
Net investment income ........................ $ 4,640,990 $ 2,352,613
Net realized loss on investment
transactions .............................. (2,134,258) (3,373,058)
Net change in unrealized
appreciation/depreciation
of investments ............................ 2,656,230 (384,519)
------------- -------------
Net increase (decrease) in net assets
from operations ........................... 5,162,962 (1,404,964)
Dividends And Distributions
To Shareholders From:
Net investment income
Class A ................................... (1,740,980) (833,405)
Class B ................................... (2,122,937) (1,174,902)
Class C ................................... (692,196) (344,306)
Distributions in excess of net investment
income
Class A ................................... -0- (91,739)
Class B ................................... -0- (167,735)
Class C ................................... -0- (48,628)
Net realized gain on investments
Class A ................................... -0- (31,533)
Class B ................................... -0- (51,651)
Class C ................................... -0- (14,082)
Transactions In Shares
Of Beneficial Interest
Net increase ................................. 20,125,507 56,394,462
------------- -------------
Total increase ............................... 20,732,356 52,231,517
Net Assets
Beginning of period .......................... 83,116,177 30,884,660
------------- -------------
End of period ................................ $ 103,848,533 $ 83,116,177
============= =============
See notes to financial statements.
--------------------------------------------------------------------------------
ALLIANCE MUNICIPAL INCOME FUND II o 55
<PAGE>
-----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
NOTES TO FINANCIAL STATEMENTS
September 30, 2000
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 accounting principles generally accepted in the United States
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.
--------------------------------------------------------------------------------
56 o ALLIANCE MUNICIPAL INCOME FUND II
<PAGE>
-----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
2. 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.
3. 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.
4. Income and Expenses
All income earned and expenses incurred by the Portfolios are borne on a
pro-rata basis by each settled class 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.
5. Dividends and Distributions
Dividends and distributions to shareholders are recorded on the ex-dividend
date.
Income and capital gains distributions are determined in accordance with federal
tax regulations and may differ from those determined in accordance with
accounting principles generally accepted in the United States. To the extent
these differences are permanent, such amounts are reclassified with the capital
accounts based on their federal tax basis treatment; temporary differences do
not require such reclassification.
NOTE B
Advisory Fee and Other Transactions with Affiliates
Under the terms of an investment advisory agreement, the Fund pays Alliance
Capital Management L.P. (the "Adviser") an advisory fee at an annual rate of
.625 of 1% of each Portfolio's average daily net assets. Such fees are accrued
daily and paid monthly. For the year ended September 30, 2000, the Adviser
agreed to waive all or a portion of its advisory fees. The aggregate amounts of
such fee waivers were: Arizona Portfolio, $399,763; Florida Portfolio, $738,686;
Massachusetts Portfolio, $543,195; Michigan Portfolio, $156,856; Minnesota
Portfolio, $211,502; New Jersey Portfolio, $517,731; Ohio Portfolio, $501,276;
Pennsylvania Portfolio, $369,269; and Virginia Portfolio, $446,769.
--------------------------------------------------------------------------------
ALLIANCE MUNICIPAL INCOME FUND II o 57
<PAGE>
-----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
Pursuant to the advisory agreement, the Adviser provides to each Portfolio
certain legal and accounting services. For the year ended September 30, 2000,
the Adviser agreed to waive all or a portion of its fees for such services. The
aggregate amounts of such fee waivers were $93,000 for the Michigan, Minnesota
and Virginia Portfolios and $23,000 for the Arizona Portfolio. In addition, the
Adviser agreed to reimburse each Portfolio for certain operating expenses. There
were no such expenses for any of the Portfolios.
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, $28,565; Florida Portfolio,
$59,047; Massachusetts Portfolio, $46,249; Michigan Portfolio, $24,788;
Minnesota Portfolio, $22,395; New Jersey Portfolio, $69,864; Ohio Portfolio,
$45,631; Pennsylvania Portfolio, $60,578; and Virginia Portfolio, $44,325.
For the year ended September 30, 2000, each Portfolio's expenses were reduced
under an expense offset arrangement with Alliance Fund Services as follows:
Arizona Portfolio, by $1,573; Florida Portfolio, by $3,192; Massachusetts
Portfolio, by $2,529; Michigan Portfolio, by $1,373; Minnesota Portfolio, by
$1,255; New Jersey Portfolio, by $3,620; Ohio Portfolio, by $2,415; Pennsylvania
Portfolio, by $3,540; and Virginia Portfolio, by $2,436.
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, 2000 as follows:
Front End Contingent Deferred Sales Charges
Sales Charges ------------------------------------
Portfolio Class A Class A Class B Class C
--------------------------------------------------------------------------------
Arizona $ -0- $ 10,000 $ 91,403 $ 8,675
Florida -0- 6,110 117,614 11,244
Massachusetts 6,283 9,477 112,118 11,921
Michigan 14,830 -0- 29,524 4,767
Minnesota -0- 6,142 12,573 2,178
New Jersey 34,793 20 121,778 13,785
Ohio 4,162 41,250 116,762 11,661
Pennsylvania 18,386 230 71,782 19,083
Virginia 3,671 25,000 109,058 7,899
--------------------------------------------------------------------------------
58 o ALLIANCE MUNICIPAL INCOME FUND II
<PAGE>
-----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
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 .............................. $2,469,769 $ 475,168
Florida .............................. 3,279,733 1,815,271
Massachusetts ........................ 2,281,573 1,372,872
Michigan ............................. 1,841,187 1,593,556
Minnesota ............................ 2,055,557 1,229,533
New Jersey ........................... 3,940,227 1,480,257
Ohio ................................. 3,268,056 1,498,157
Pennsylvania ......................... 2,971,259 1,242,666
Virginia ............................. 3,199,307 803,433
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, 2000 were as
follows:
Portfolio Purchases Sales
--------------------------------------------------------------------------------
Arizona .......................... $175,840,932 $162,707,847
Florida .......................... 497,234,474 505,957,343
Massachusetts .................... 442,801,637 438,969,414
Michigan ......................... 110,954,485 107,532,775
Minnesota ........................ 111,837,858 107,243,629
New Jersey ....................... 312,358,899 297,157,712
Ohio ............................. 287,426,238 285,260,886
Pennsylvania ..................... 465,248,725 472,270,922
Virginia ......................... 279,040,486 261,474,294
--------------------------------------------------------------------------------
ALLIANCE MUNICIPAL INCOME FUND II o 59
<PAGE>
-----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
At September 30, 2000, 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:
<TABLE>
<CAPTION>
Gross Unrealized Gross Unrealized Net Unrealized
Portfolio Tax Cost Appreciation Depreciation Appreciation
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Arizona $ 86,509,137 $ 2,372,774 $ (42,796) $ 2,329,978
Florida 171,161,673 4,854,002 (102,229) 4,751,773
Massachusetts 110,777,177 3,496,309 -0- 3,496,309
Michigan 39,226,142 850,359 (5,274) 845,085
Minnesota 35,962,418 1,015,446 (528) 1,014,918
New Jersey 134,974,165 5,526,121 (8,336) 5,517,785
Ohio 91,741,713 2,454,448 (154,640) 2,299,808
Pennsylvania 128,542,643 3,871,517 (159,738) 3,711,779
Virginia 96,019,175 2,697,042 (13,839) 2,683,203
</TABLE>
For Federal income tax purposes at September 30, 2000, the Fund had capital loss
carryforwards for the following Portfolios:
Expiring Expiring Expiring Expiring
in 2003 in 2004 in 2007 in 2008
-------------------------------------------------------------------------------
Arizona $ -0- $ -0- $ -0- $ 2,626,903
Florida 3,931,206 -0- 4,853 7,457,727
Massachusetts -0- -0- -0- 7,248,317
Michigan -0- -0- -0- 910,031
Minnesota 650,584 492,981 -0- 1,051,696
New Jersey 3,051,602 349,704 -0- 3,327,295
Ohio 2,526,402 332,000 -0- 2,491,530
Pennsylvania 316,038 -0- 1,363 8,505,784
Virginia -0- -0- -0- 3,978,133
Capital losses incurred after October 31 ("post October" losses) within the
taxable year are deemed to arise on the first business day of the Fund's next
taxable year. The Fund incurred and elected to defer the following net capital
losses during the fiscal year 2000.
Post October Losses
-------------------
Arizona $ 839,963
Florida 5,615,782
Massachusetts 1,962,102
Michigan 36,311
Minnesota 320,906
New Jersey 2,894,306
Ohio 2,319,316
Pennsylvania 287,711
Virginia 1,221,804
To the extent that the carryover losses are used to offset future capital gains,
it is probable that the gain to offset will not be distributed to shareholders.
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:
--------------------------------------------------------------------------------
60 o ALLIANCE MUNICIPAL INCOME FUND II
<PAGE>
-----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
<TABLE>
<CAPTION>
----------------------------- -----------------------------
Shares Amount
----------------------------- -----------------------------
Year Ended Year Ended Year Ended Year Ended
September 30, September 30, September 30, September 30,
Arizona Portfolio 2000 1999 2000 1999
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A
Shares sold 1,856,655 2,277,927 $ 18,930,679 $ 24,623,422
---------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends and
distributions 108,731 72,186 1,115,566 777,242
---------------------------------------------------------------------------------
Shares converted
from Class B 93,637 19,950 956,418 215,625
---------------------------------------------------------------------------------
Shares redeemed (1,244,309) (588,982) (12,714,107) (6,374,579)
---------------------------------------------------------------------------------
Net increase 814,714 1,781,081 $ 8,288,556 $ 19,241,710
=================================================================================
Class B
Shares sold 975,420 1,905,927 $ 10,008,779 $ 20,514,932
---------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends and
distributions 76,864 51,041 786,969 548,786
---------------------------------------------------------------------------------
Shares converted
to Class A (93,680) (19,950) (956,418) (215,625)
---------------------------------------------------------------------------------
Shares redeemed (692,556) (170,811) (7,074,992) (1,824,014)
---------------------------------------------------------------------------------
Net increase 266,048 1,766,207 $ 2,764,338 $ 19,024,079
=================================================================================
Class C
Shares sold 273,926 552,598 $ 2,799,629 $ 5,960,967
---------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends and
distributions 21,744 16,202 222,385 174,860
---------------------------------------------------------------------------------
Shares redeemed (342,651) (93,570) (3,504,007) (1,014,099)
---------------------------------------------------------------------------------
Net increase
(decrease) (46,981) 475,230 $ (481,993) $ 5,121,728
=================================================================================
</TABLE>
--------------------------------------------------------------------------------
ALLIANCE MUNICIPAL INCOME FUND II o 61
<PAGE>
-----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
<TABLE>
<CAPTION>
----------------------------- -----------------------------
Shares Amount
----------------------------- -----------------------------
Year Ended Year Ended Year Ended Year Ended
September 30, September 30, September 30, September 30,
Florida Portfolio 2000 1999 2000 1999
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A
Shares sold 2,566,311 4,938,321 $ 24,438,087 $ 50,810,230
---------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 184,140 157,067 1,762,270 1,602,230
---------------------------------------------------------------------------------
Shares converted
from Class B 463,681 307,992 4,429,715 3,065,724
---------------------------------------------------------------------------------
Shares redeemed (3,613,466) (1,515,732) (34,473,817) (15,363,283)
---------------------------------------------------------------------------------
Net increase
(decrease) (399,334) 3,887,648 $ (3,843,745) $ 40,114,901
=================================================================================
Class B
Shares sold 1,802,032 3,874,899 $ 17,249,875 $ 39,796,253
---------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 163,330 132,982 1,562,651 1,358,222
---------------------------------------------------------------------------------
Shares converted
to Class A (463,533) (307,992) (4,429,715) (3,065,724)
---------------------------------------------------------------------------------
Shares redeemed (1,687,659) (704,252) (16,081,782) (7,164,709)
---------------------------------------------------------------------------------
Net increase
(decrease) (185,830) 2,995,637 $ (1,698,971) $ 30,924,042
=================================================================================
Class C
Shares sold 1,051,801 1,798,383 $ 10,079,336 $ 18,543,697
---------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 108,711 95,440 1,039,907 975,564
---------------------------------------------------------------------------------
Shares redeemed (1,519,095) (603,835) (14,517,668) (6,152,943)
---------------------------------------------------------------------------------
Net increase
(decrease) (358,583) 1,289,988 $ (3,398,425) $ 13,366,318
=================================================================================
</TABLE>
<TABLE>
<CAPTION>
----------------------------- -----------------------------
Shares Amount
----------------------------- -----------------------------
Year Ended Year Ended Year Ended Year Ended
September 30, September 30, September 30, September 30,
Massachusetts Portfolio 2000 1999 2000 1999
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A
Shares sold 3,870,727 3,312,860 $ 39,956,518 $ 37,219,332
--------------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends and
distributions 119,699 114,805 1,242,591 1,280,006
--------------------------------------------------------------------------------------
Shares converted
from Class B 53,711 18,753 557,445 202,106
--------------------------------------------------------------------------------------
Shares redeemed (3,953,939) (1,268,882) (40,717,058) (14,120,578)
--------------------------------------------------------------------------------------
Net increase 90,198 2,177,536 $ 1,039,496 $ 24,580,866
======================================================================================
</TABLE>
--------------------------------------------------------------------------------
62 o ALLIANCE MUNICIPAL INCOME FUND II
<PAGE>
-----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
<TABLE>
<CAPTION>
----------------------------- -----------------------------
Shares Amount
----------------------------- -----------------------------
Year Ended Year Ended Year Ended Year Ended
September 30, September 30, September 30, September 30,
Massachusetts Portfolio 2000 1999 2000 1999
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class B
Shares sold 701,960 2,527,508 $ 7,282,614 $ 28,165,325
--------------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends and
distributions 106,504 81,618 1,103,845 910,840
--------------------------------------------------------------------------------------
Shares converted
to Class A (53,776) (18,753) (557,445) (202,106)
--------------------------------------------------------------------------------------
Shares redeemed (979,204) (378,875) (10,141,966) (4,147,852)
--------------------------------------------------------------------------------------
Net increase
(decrease) (224,516) 2,211,498 $ (2,312,952) $ 24,726,207
======================================================================================
Class C
Shares sold 1,104,460 1,554,684 $ 11,373,666 $ 17,399,768
--------------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends and
distributions 100,372 73,064 1,040,730 814,318
--------------------------------------------------------------------------------------
Shares redeemed (1,011,826) (455,361) (10,446,277) (5,076,849)
--------------------------------------------------------------------------------------
Net increase 193,006 1,172,387 $ 1,968,119 $ 13,137,237
======================================================================================
</TABLE>
---------------------------- ----------------------------
Shares Amount
---------------------------- ----------------------------
Year Ended Year Ended Year Ended Year Ended
September 30, September 30, September 30, September 30,
Michigan Portfolio 2000 1999 2000 1999
-------------------------------------------------------------------------------
Class A
Shares sold 722,401 487,789 $ 7,130,569 $ 5,078,916
-------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends and
distributions 42,594 32,476 421,840 337,440
-------------------------------------------------------------------------------
Shares converted
from Class B 78,253 2,666 772,080 28,003
-------------------------------------------------------------------------------
Shares redeemed (573,366) (167,913) (5,684,298) (1,734,568)
-------------------------------------------------------------------------------
Net increase 269,882 355,018 $ 2,640,191 $ 3,709,791
===============================================================================
Class B
Shares sold 509,186 623,638 $ 5,037,342 $ 6,488,521
-------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends and
distributions 34,447 36,531 340,544 379,775
-------------------------------------------------------------------------------
Shares converted
to Class A (78,329) (2,666) (772,080) (28,003)
-------------------------------------------------------------------------------
Shares redeemed (369,536) (167,093) (3,623,920) (1,729,098)
-------------------------------------------------------------------------------
Net increase 95,768 490,410 $ 981,886 $ 5,111,195
===============================================================================
--------------------------------------------------------------------------------
ALLIANCE MUNICIPAL INCOME FUND II o 63
<PAGE>
-----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
---------------------------- ----------------------------
Shares Amount
---------------------------- ----------------------------
Year Ended Year Ended Year Ended Year Ended
September 30, September 30, September 30, September 30,
Michigan Portfolio 2000 1999 2000 1999
-------------------------------------------------------------------------------
Class C
Shares sold 527,572 498,274 $ 5,227,244 $ 5,196,724
-------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends and
distributions 40,772 38,412 403,193 398,957
-------------------------------------------------------------------------------
Shares redeemed (448,502) (314,121) (4,415,928) (3,239,098)
-------------------------------------------------------------------------------
Net increase 119,842 222,565 $ 1,214,509 $ 2,356,583
===============================================================================
---------------------------- ----------------------------
Shares Amount
---------------------------- ----------------------------
Year Ended Year Ended Year Ended Year Ended
September 30, September 30, September 30, September 30,
Minnesota Portfolio 2000 1999 2000 1999
-------------------------------------------------------------------------------
Class A
Shares sold 1,038,812 497,561 $ 9,954,253 $ 5,020,946
-------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 44,751 27,350 426,425 273,996
-------------------------------------------------------------------------------
Shares converted
from Class B 202,898 82,720 1,922,179 805,502
-------------------------------------------------------------------------------
Shares redeemed (302,710) (123,890) (2,863,592) (1,231,987)
-------------------------------------------------------------------------------
Net increase 983,751 483,741 $ 9,439,265 $ 4,868,457
===============================================================================
Class B
Shares sold 289,103 352,879 $ 2,761,982 $ 3,549,698
-------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 37,751 40,642 359,400 408,744
-------------------------------------------------------------------------------
Shares converted
to Class A (202,882) (82,720) (1,922,179) (805,502)
-------------------------------------------------------------------------------
Shares redeemed (342,232) (208,063) (3,250,404) (2,072,985)
-------------------------------------------------------------------------------
Net increase
(decrease) (218,260) 102,738 $(2,051,201) $ 1,079,955
===============================================================================
Class C
Shares sold 121,928 311,979 $ 1,164,949 $ 3,153,964
-------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 28,935 28,240 275,465 283,659
-------------------------------------------------------------------------------
Shares redeemed (315,968) (156,007) (3,001,705) (1,570,414)
-------------------------------------------------------------------------------
Net increase
(decrease) (165,105) 184,212 $(1,561,291) $ 1,867,209
===============================================================================
--------------------------------------------------------------------------------
64 o ALLIANCE MUNICIPAL INCOME FUND II
<PAGE>
-----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
<TABLE>
<CAPTION>
----------------------------- -----------------------------
Shares Amount
----------------------------- -----------------------------
Year Ended Year Ended Year Ended Year Ended
September 30, September 30, September 30, September 30,
New Jersey Portfolio 2000 1999 2000 1999
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A
Shares sold 2,110,449 1,418,607 $ 20,395,892 $ 14,654,659
-----------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 122,419 71,338 1,186,150 736,677
-----------------------------------------------------------------------------------
Shares converted
from Class B 741,480 501,257 7,152,154 5,056,860
-----------------------------------------------------------------------------------
Shares redeemed (1,302,929) (792,821) (12,525,557) (8,182,428)
-----------------------------------------------------------------------------------
Net increase 1,671,419 1,198,381 $ 16,208,639 $ 12,265,768
===================================================================================
Class B
Shares sold 1,695,875 3,200,774 $ 16,459,266 $ 33,167,812
-----------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 184,273 162,998 1,783,712 1,683,868
-----------------------------------------------------------------------------------
Shares converted
to Class A (741,372) (501,257) (7,152,154) (5,056,860)
-----------------------------------------------------------------------------------
Shares redeemed (1,415,970) (914,657) (13,650,743) (9,402,931)
-----------------------------------------------------------------------------------
Net increase
(decrease) (277,194) 1,947,858 $ (2,559,919) $ 20,391,889
===================================================================================
Class C
Shares sold 815,133 1,216,161 $ 7,916,397 $ 12,623,102
-----------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 96,313 84,996 932,437 878,529
-----------------------------------------------------------------------------------
Shares redeemed (1,057,324) (507,784) (10,235,965) (5,232,779)
-----------------------------------------------------------------------------------
Net increase
(decrease) (145,878) 793,373 $ (1,387,131) $ 8,268,852
===================================================================================
</TABLE>
<TABLE>
<CAPTION>
----------------------------- -----------------------------
Shares Amount
----------------------------- -----------------------------
Year Ended Year Ended Year Ended Year Ended
September 30, September 30, September 30, September 30,
Ohio Portfolio 2000 1999 2000 1999
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A
Shares sold 846,158 1,475,518 $ 8,165,215 $ 15,096,494
---------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 98,790 48,567 947,389 496,061
---------------------------------------------------------------------------------
Shares converted
from Class B 645,321 290,049 6,130,635 2,897,413
---------------------------------------------------------------------------------
Shares redeemed (1,025,457) (412,951) (9,805,778) (4,253,626)
---------------------------------------------------------------------------------
Net increase 564,812 1,401,183 $ 5,437,461 $ 14,236,342
=================================================================================
</TABLE>
--------------------------------------------------------------------------------
ALLIANCE MUNICIPAL INCOME FUND II o 65
<PAGE>
-----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
<TABLE>
<CAPTION>
----------------------------- -----------------------------
Shares Amount
----------------------------- -----------------------------
Year Ended Year Ended Year Ended Year Ended
September 30, September 30, September 30, September 30,
Ohio Portfolio 2000 1999 2000 1999
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class B
Shares sold 956,292 2,157,546 $ 9,174,916 $ 22,134,341
---------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 135,146 136,727 1,295,052 1,403,955
---------------------------------------------------------------------------------
Shares converted
to Class A (645,213) (290,049) (6,184,635) (2,897,413)
---------------------------------------------------------------------------------
Shares redeemed (1,244,603) (596,765) (11,873,682) (6,060,731)
---------------------------------------------------------------------------------
Net increase
(decrease) (798,378) 1,407,459 $ (7,588,349) $ 14,580,152
=================================================================================
Class C
Shares sold 621,261 1,196,091 $ 5,954,337 $ 12,324,925
---------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 67,130 64,479 644,074 659,657
---------------------------------------------------------------------------------
Shares redeemed (790,731) (410,627) (7,547,757) (4,164,275)
---------------------------------------------------------------------------------
Net increase
(decrease) (102,340) 849,943 $ (949,346) $ 8,820,307
=================================================================================
</TABLE>
<TABLE>
<CAPTION>
----------------------------- -----------------------------
Shares Amount
----------------------------- -----------------------------
Year Ended Year Ended Year Ended Year Ended
September 30, September 30, September 30, September 30,
Pennsylvania Portfolio 2000 1999 2000 1999
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A
Shares sold 1,759,176 3,024,140 $ 17,065,835 $ 31,598,359
-------------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 208,257 150,874 2,018,532 1,566,915
-------------------------------------------------------------------------------------
Shares converted
from Class B 567,875 477,975 5,501,230 4,823,033
-------------------------------------------------------------------------------------
Shares redeemed (1,938,986) (680,929) (18,774,423) (7,066,429)
-------------------------------------------------------------------------------------
Net increase 596,322 2,972,060 $ 5,811,174 $ 30,921,878
=====================================================================================
Class B
Shares sold 1,143,643 2,668,536 $ 11,092,896 $ 27,855,387
-------------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 136,473 122,280 1,321,432 1,271,826
-------------------------------------------------------------------------------------
Shares converted
to Class A (567,932) (477,975) (5,501,230) (4,823,033)
-------------------------------------------------------------------------------------
Shares redeemed (1,446,558) (756,737) (13,974,905) (7,843,288)
-------------------------------------------------------------------------------------
Net increase
(decrease) (734,374) 1,556,104 $ (7,061,807) $ 16,460,892
=====================================================================================
</TABLE>
--------------------------------------------------------------------------------
66 o ALLIANCE MUNICIPAL INCOME FUND II
<PAGE>
-----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
<TABLE>
<CAPTION>
----------------------------- -----------------------------
Shares Amount
----------------------------- -----------------------------
Year Ended Year Ended Year Ended Year Ended
September 30, September 30, September 30, September 30,
Pennsylvania Portfolio 2000 1999 2000 1999
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class C
Shares sold 562,077 1,404,524 $ 5,452,362 $ 14,722,908
-------------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends 70,224 59,984 680,054 624,110
-------------------------------------------------------------------------------------
Shares redeemed (1,095,926) (287,237) (10,524,038) (2,971,823)
-------------------------------------------------------------------------------------
Net increase
(decrease) (463,625) 1,177,271 $ (4,391,622) $ 12,375,195
=====================================================================================
</TABLE>
<TABLE>
<CAPTION>
----------------------------- -----------------------------
Shares Amount
----------------------------- -----------------------------
Year Ended Year Ended Year Ended Year Ended
September 30, September 30, September 30, September 30,
Virginia Portfolio 2000 1999 2000 1999
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A
Shares sold 1,643,283 1,961,441 $ 16,689,473 $ 20,961,953
-----------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends and
distributions 85,822 64,215 871,541 684,946
-----------------------------------------------------------------------------------
Shares converted
from Class B 33,791 9,212 344,049 96,919
-----------------------------------------------------------------------------------
Shares redeemed (838,839) (244,939) (8,577,211) (2,603,335)
-----------------------------------------------------------------------------------
Net increase 924,057 1,789,929 $ 9,327,852 $ 19,140,483
===================================================================================
Class B
Shares sold 1,287,195 2,789,674 $ 13,075,898 $ 29,989,497
-----------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends and
distributions 140,005 104,702 1,419,246 1,116,887
-----------------------------------------------------------------------------------
Shares converted
to Class A (33,832) (9,212) (344,049) (96,919)
-----------------------------------------------------------------------------------
Shares redeemed (705,746) (262,985) (7,113,912) (2,787,282)
-----------------------------------------------------------------------------------
Net increase 687,622 2,622,179 $ 7,037,183 $ 28,222,183
===================================================================================
Class C
Shares sold 606,560 979,841 $ 6,121,444 $ 10,520,143
-----------------------------------------------------------------------------------
Shares issued in
reinvestment of
dividends and
distributions 47,688 29,968 483,928 319,844
-----------------------------------------------------------------------------------
Shares redeemed (281,067) (170,313) (2,844,900) (1,808,191)
-----------------------------------------------------------------------------------
Net increase 373,181 839,496 $ 3,760,472 $ 9,031,796
===================================================================================
</TABLE>
--------------------------------------------------------------------------------
ALLIANCE MUNICIPAL INCOME FUND II o 67
<PAGE>
-----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
NOTE F
Bank Borrowing
A number of open-end mutual funds managed by the Adviser, including the Fund,
participate in a $750 million revolving credit facility (the "Facility")
intended to provide short-term financing if necessary, subject to certain
restrictions, in connection with abnormal redemption activity. Commitment fees
related to the Facility are paid by the participating funds and are included in
miscellaneous expenses in the statement of operations. The Fund did not utilize
the Facility during the year ended September 30, 2000.
--------------------------------------------------------------------------------
68 o ALLIANCE MUNICIPAL INCOME FUND II
<PAGE>
--------------------
FINANCIAL HIGHLIGHTS
--------------------
FINANCIAL HIGHLIGHTS
Selected Data For A Share Of Beneficial Interest Outstanding Throughout Each
Period
<TABLE>
<CAPTION>
Arizona Portfolio
----------------------------------------------------------------------
Class A
----------------------------------------------------------------------
Year Ended September 30,
2000 1999 1998 1997 1996
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ........ $ 10.40 $ 11.03 $ 10.78 $ 10.32 $ 10.29
----------------------------------------------------------------------
Income From Investment
Operations
Net investment income(a)(b) ... .55 .51 .54 .57 .55
Net realized and unrealized
gain (loss) on investment
transactions ............... .07 (.55) .45 .48 .14
----------------------------------------------------------------------
Net increase (decrease) in
net asset value from
operations ................. .62 (.04) .99 1.05 .69
----------------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income .......... (.55) (.51) (.54) (.57) (.55)
Distributions in excess of
net investment income ...... -0- (.04) (.02) -0- (.03)
Distributions from net
realized gains ............. -0- (.04) (.18) (.02) (.08)
----------------------------------------------------------------------
Total dividends and
distributions .............. (.55) (.59) (.74) (.59) (.66)
----------------------------------------------------------------------
Net asset value,
end of period .............. $ 10.47 $ 10.40 $ 11.03 $ 10.78 $ 10.32
======================================================================
Total Return
Total investment return based
on net asset value(c) ...... 6.17% (.45)% 9.54% 10.54% 6.84%
Ratios/Supplemental
Data
Net assets, end of period
(000's omitted) ............ $ 47,258 $ 38,472 $ 21,185 $ 9,225 $ 4,409
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements ........... .78% .78% .78% .78% .78%
Expenses, before waivers/
reimbursements ........... 1.29% 1.39% 1.55% 2.71% 3.69%
Net investment income, net
of waivers/reimbursements 5.33% 4.74% 4.92% 5.42% 5.33%
Portfolio turnover rate ....... 199% 217% 45% 193% 244%
</TABLE>
See footnote summary on page 95.
--------------------------------------------------------------------------------
ALLIANCE MUNICIPAL INCOME FUND II o 69
<PAGE>
--------------------
FINANCIAL HIGHLIGHTS
--------------------
Selected Data For A Share Of Beneficial Interest Outstanding Throughout Each
Period
<TABLE>
<CAPTION>
Arizona Portfolio
----------------------------------------------------------------------
Class B
----------------------------------------------------------------------
Year Ended September 30,
2000 1999 1998 1997 1996
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ........ $ 10.39 $ 11.03 $ 10.78 $ 10.32 $ 10.29
----------------------------------------------------------------------
Income From Investment
Operations
Net investment income(a)(b) ... .48 .43 .45 .50 .47
Net realized and unrealized
gain (loss) on investment
transactions ............... .07 (.55) .47 .48 .14
----------------------------------------------------------------------
Net increase (decrease) in
net asset value from
operations ................. .55 (.12) .92 .98 .61
----------------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income .......... (.48) (.43) (.45) (.50) (.47)
Distributions in excess of
net investment income ...... -0- (.05) (.04) -0- (.03)
Distributions from net
realized gains ............. -0- (.04) (.18) (.02) (.08)
----------------------------------------------------------------------
Total dividends and
distributions .............. (.48) (.52) (.67) (.52) (.58)
----------------------------------------------------------------------
Net asset value,
end of period .............. $ 10.46 $ 10.39 $ 11.03 $ 10.78 $ 10.32
======================================================================
Total Return
Total investment return based
on net asset value(c) ...... 5.45% (1.19)% 8.84% 9.80% 6.10%
Ratios/Supplemental
Data
Net assets, end of period
(000's omitted) ............ $ 34,232 $ 31,242 $ 13,698 $ 6,531 $ 5,199
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 ........... 1.99% 2.16% 2.30% 3.40% 4.40%
Net investment income, net
of waivers/reimbursements 4.63% 4.05% 4.21% 4.73% 4.62%
Portfolio turnover rate ....... 199% 217% 45% 193% 244%
</TABLE>
See footnote summary on page 95.
--------------------------------------------------------------------------------
70 o ALLIANCE MUNICIPAL INCOME FUND II
<PAGE>
--------------------
FINANCIAL HIGHLIGHTS
--------------------
Selected Data For A Share Of Beneficial Interest Outstanding Throughout Each
Period
<TABLE>
<CAPTION>
Arizona Portfolio
-----------------------------------------------------------------
Class C
-----------------------------------------------------------------
Year Ended September 30,
2000 1999 1998 1997 1996
-----------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ........ $ 10.39 $ 11.03 $ 10.78 $ 10.32 $ 10.30
-----------------------------------------------------------------
Income From Investment
Operations
Net investment income(a)(b) ... .48 .43 .45 .50 .47
Net realized and unrealized
gain (loss) on investment
transactions ............... .07 (.55) .47 .48 .13
-----------------------------------------------------------------
Net increase (decrease) in
net asset value from
operations ................. .55 (.12) .92 .98 .60
-----------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income .......... (.48) (.43) (.45) (.50) (.47)
Distributions in excess of
net investment income ...... -0- (.05) (.04) -0- (.03)
Distributions from net
realized gains ............. -0- (.04) (.18) (.02) (.08)
-----------------------------------------------------------------
Total dividends and
distributions .............. (.48) (.52) (.67) (.52) (.58)
-----------------------------------------------------------------
Net asset value,
end of period .............. $ 10.46 $ 10.39 $ 11.03 $ 10.78 $ 10.32
=================================================================
Total Return
Total investment return based
on net asset value(c) ...... 5.45% (1.19)% 8.83% 9.80% 6.00%
Ratios/Supplemental
Data
Net assets, end of period
(000's omitted) ............ $ 8,941 $ 9,368 $ 4,708 $ 1,775 $ 710
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 ........... 1.99% 2.17% 2.34% 3.39% 4.41%
Net investment income, net
of waivers/reimbursements 4.64% 4.05% 4.19% 4.70% 4.61%
Portfolio turnover rate ....... 199% 217% 45% 193% 244%
</TABLE>
See footnote summary on page 95.
--------------------------------------------------------------------------------
ALLIANCE MUNICIPAL INCOME FUND II o 71
<PAGE>
--------------------
FINANCIAL HIGHLIGHTS
--------------------
Selected Data For A Share Of Beneficial Interest Outstanding Throughout Each
Period
<TABLE>
<CAPTION>
Florida Portfolio
----------------------------------------------------------------------
Class A
----------------------------------------------------------------------
Year Ended September 30,
2000 1999 1998 1997 1996
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ........ $ 9.81 $ 10.48 $ 10.14 $ 9.73 $ 9.58
----------------------------------------------------------------------
Income From Investment
Operations
Net investment income(a)(b) ... .53 .51 .52 .55 .54
Net realized and unrealized
gain (loss) on investment
transactions ............... (.05) (.65) .37 .41 .16
----------------------------------------------------------------------
Net increase (decrease) in
net asset value from
operations ................. .48 (.14) .89 .96 .70
----------------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income .......... (.53) (.51) (.52) (.55) (.54)
Distributions in excess of net
investment income .......... -0- (.02) (.03) -0- (.01)
----------------------------------------------------------------------
Total dividends and
distributions .............. (.53) (.53) (.55) (.55) (.55)
----------------------------------------------------------------------
Net asset value,
end of period .............. $ 9.76 $ 9.81 $ 10.48 $ 10.14 $ 9.73
======================================================================
Total Return
Total investment return based
on net asset value(c) ...... 5.10% (1.38)% 8.97% 10.14% 7.45%
Ratios/Supplemental
Data
Net assets, end of period
(000's omitted) ............ $ 75,422 $ 79,752 $ 44,440 $ 17,516 $ 14,297
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements ........... .73% .73% .73% .73% .73%
Expenses, before waivers/
reimbursements ........... 1.14% 1.18% 1.27% 1.35% 1.33%
Net investment income, net
of waivers/reimbursements 5.52% 4.94% 5.14% 5.58% 5.52%
Portfolio turnover rate ....... 281% 244% 65% 204% 237%
</TABLE>
See footnote summary on page 95.
--------------------------------------------------------------------------------
72 o ALLIANCE MUNICIPAL INCOME FUND II
<PAGE>
--------------------
FINANCIAL HIGHLIGHTS
--------------------
Selected Data For A Share Of Beneficial Interest Outstanding Throughout Each
Period
<TABLE>
<CAPTION>
Florida Portfolio
----------------------------------------------------------------------
Class B
----------------------------------------------------------------------
Year Ended September 30,
2000 1999 1998 1997 1996
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ........ $ 9.81 $ 10.48 $ 10.14 $ 9.74 $ 9.58
----------------------------------------------------------------------
Income From Investment
Operations
Net investment income(a)(b) ... .46 .43 .46 .48 .47
Net realized and unrealized
gain (loss) on investment
transactions ............... (.05) (.64) .36 .40 .17
----------------------------------------------------------------------
Net increase (decrease) in
net asset value from
operations ................. .41 (.21) .82 .88 .64
----------------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income .......... (.45) (.43) (.46) (.48) (.47)
Distributions in excess of
net investment income ...... -0- (.03) (.02) -0- (.01)
----------------------------------------------------------------------
Total dividends and
distributions .............. (.45) (.46) (.48) (.48) (.48)
----------------------------------------------------------------------
Net asset value,
end of period .............. $ 9.77 $ 9.81 $ 10.48 $ 10.14 $ 9.74
======================================================================
Total Return
Total investment return based
on net asset value(c) ...... 4.43% (2.06)% 8.22% 9.24% 6.78%
Ratios/Supplemental
Data
Net assets, end of period
(000's omitted) ............ $ 65,391 $ 67,532 $ 40,740 $ 24,820 $ 22,235
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements ........... 1.43% 1.43% 1.43% 1.43% 1.43%
Expenses, before waivers/
reimbursements ........... 1.85% 1.91% 1.97% 2.05% 2.03%
Net investment income, net
of waivers/reimbursements 4.82% 4.25% 4.46% 4.87% 4.81%
Portfolio turnover rate ....... 281% 244% 65% 204% 237%
</TABLE>
See footnote summary on page 95.
--------------------------------------------------------------------------------
ALLIANCE MUNICIPAL INCOME FUND II o 73
<PAGE>
--------------------
FINANCIAL HIGHLIGHTS
--------------------
Selected Data For A Share Of Beneficial Interest Outstanding Throughout Each
Period
<TABLE>
<CAPTION>
Florida Portfolio
----------------------------------------------------------------------
Class C
----------------------------------------------------------------------
Year Ended September 30,
2000 1999 1998 1997 1996
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ........ $ 9.81 $ 10.48 $ 10.14 $ 9.74 $ 9.58
----------------------------------------------------------------------
Income From Investment
Operations
Net investment income(a)(b) ... .46 .43 .46 .49 .47
Net realized and unrealized
gain (loss) on investment
transactions ............... (.05) (.64) .36 .39 .17
----------------------------------------------------------------------
Net increase (decrease) in
net asset value from
operations ................. .41 (.21) .82 .88 .64
----------------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income .......... (.45) (.43) (.46) (.48) (.47)
Distributions in excess of
net investment income ...... -0- (.03) (.02) -0- (.01)
----------------------------------------------------------------------
Total dividends and
distributions .............. (.45) (.46) (.48) (.48) (.48)
----------------------------------------------------------------------
Net asset value,
end of period .............. $ 9.77 $ 9.81 $ 10.48 $ 10.14 $ 9.74
======================================================================
Total Return
Total investment return based
on net asset value(c) ...... 4.43% (2.06)% 8.22% 9.23% 6.78%
Ratios/Supplemental
Data
Net assets, end of period
(000's omitted) ............ $ 38,464 $ 42,169 $ 31,524 $ 25,722 $ 30,121
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements ........... 1.43% 1.43% 1.43% 1.43% 1.43%
Expenses, before waivers/
reimbursements ........... 1.85% 1.91% 1.99% 2.03% 2.02%
Net investment income, net
of waivers/reimbursements 4.83% 4.24% 4.48% 4.89% 4.81%
Portfolio turnover rate ....... 281% 244% 65% 204% 237%
</TABLE>
See footnote summary on page 95.
--------------------------------------------------------------------------------
74 o ALLIANCE MUNICIPAL INCOME FUND II
<PAGE>
--------------------
FINANCIAL HIGHLIGHTS
--------------------
Selected Data For A Share Of Beneficial Interest Outstanding Throughout Each
Period
<TABLE>
<CAPTION>
Massachusetts Portfolio
----------------------------------------------------------------------
Class A
----------------------------------------------------------------------
Year Ended September 30,
2000 1999 1998 1997 1996
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ........ $ 10.66 $ 11.39 $ 11.19 $ 10.85 $ 10.50
----------------------------------------------------------------------
Income From Investment
Operations
Net investment income(a)(b) ... .58 .53 .54 .58 .60
Net realized and unrealized
gain (loss) on investment
transactions ............... (.09) (.66) .45 .57 .44
----------------------------------------------------------------------
Net increase (decrease)
in net asset value from
operations ................. .49 (.13) .99 1.15 1.04
----------------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income .......... (.56) (.53) (.54) (.58) (.59)
Distributions in excess of
net investment income ...... -0- (.04) (.06) (.03) (.02)
Distributions from net
realized gains ............. -0- (.03) (.19) (.20) (.08)
----------------------------------------------------------------------
Total dividends and
distributions .............. (.56) (.60) (.79) (.81) (.69)
----------------------------------------------------------------------
Net asset value,
end of period .............. $ 10.59 $ 10.66 $ 11.39 $ 11.19 $ 10.85
======================================================================
Total Return
Total investment return based
on net asset value(c) ...... 4.86% (1.24)% 9.18% 11.14% 10.25%
Ratios/Supplemental
Data
Net assets, end of period
(000's omitted) ............ $ 45,418 $ 44,758 $ 23,026 $ 9,461 $ 3,211
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements ........... .77% .72% .72% .72% .62%
Expenses, before waivers/
reimbursements ........... 1.23% 1.24% 1.51% 2.40% 3.15%
Net investment income, net
of waivers/reimbursements 5.53% 4.74% 4.87% 5.40% 5.62%
Portfolio turnover rate ....... 389% 303% 69% 134% 246%
</TABLE>
See footnote summary on page 95.
--------------------------------------------------------------------------------
ALLIANCE MUNICIPAL INCOME FUND II o 75
<PAGE>
--------------------
FINANCIAL HIGHLIGHTS
--------------------
Selected Data For A Share Of Beneficial Interest Outstanding Throughout Each
Period
<TABLE>
<CAPTION>
Massachusetts Portfolio
----------------------------------------------------------------------
Class B
----------------------------------------------------------------------
Year Ended September 30,
2000 1999 1998 1997 1996
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ........ $ 10.65 $ 11.38 $ 11.19 $ 10.84 $ 10.49
----------------------------------------------------------------------
Income From Investment
Operations
Net investment income(a)(b) ... .50 .45 .46 .51 .52
Net realized and unrealized
gain (loss) on investment
transactions ............... (.09) (.65) .45 .58 .45
----------------------------------------------------------------------
Net increase (decrease) in
net asset value from
operations ................. .41 (.20) .91 1.09 .97
----------------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income .......... (.49) (.45) (.46) (.51) (.52)
Distributions in excess of
netinvestment income ....... -0- (.05) (.07) (.03) (.02)
Distributions from net
realized gains ............. -0- (.03) (.19) (.20) (.08)
----------------------------------------------------------------------
Total dividends and
distributions .............. (.49) (.53) (.72) (.74) (.62)
----------------------------------------------------------------------
Net asset value,
end of period .............. $ 10.57 $ 10.65 $ 11.38 $ 11.19 $ 10.84
======================================================================
Total Return
Total investment return based
on net asset value(c) ...... 4.06% (1.87)% 8.40% 10.52% 9.52%
Ratios/Supplemental
Data
Net assets, end of period
(000's omitted) ............ $ 39,964 $ 42,628 $ 20,400 $ 7,230 $ 3,683
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements ........... 1.47% 1.42% 1.42% 1.42% 1.32%
Expenses, before waivers/
reimbursements ........... 1.94% 1.97% 2.22% 3.07% 3.85%
Net investment income, net
of waivers/reimbursements 4.83% 4.06% 4.16% 4.73% 4.93%
Portfolio turnover rate ....... 389% 303% 69% 134% 246%
</TABLE>
See footnote summary on page 95.
--------------------------------------------------------------------------------
76 o ALLIANCE MUNICIPAL INCOME FUND II
<PAGE>
--------------------
FINANCIAL HIGHLIGHTS
--------------------
Selected Data For A Share Of Beneficial Interest Outstanding Throughout Each
Period
<TABLE>
<CAPTION>
Massachusetts Portfolio
----------------------------------------------------------------------
Class C
----------------------------------------------------------------------
Year Ended September 30,
2000 1999 1998 1997 1996
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ........ $ 10.65 $ 11.38 $ 11.19 $ 10.84 $ 10.49
----------------------------------------------------------------------
Income From Investment
Operations
Net investment income(a)(b) ... .50 .45 .47 .51 .52
Net realized and unrealized
gain (loss) on investment
transactions ............... (.09) (.65) .44 .58 .45
----------------------------------------------------------------------
Net increase (decrease) in
net asset value from
operations ................. .41 (.20) .91 1.09 .97
----------------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income .......... (.49) (.45) (.47) (.51) (.52)
Distributions in excess of
net investment income ...... -0- (.05) (.06) (.03) (.02)
Distributions from net
realized gains ............. -0- (.03) (.19) (.20) (.08)
----------------------------------------------------------------------
Total dividends and
distributions .............. (.49) (.53) (.72) (.74) (.62)
----------------------------------------------------------------------
Net asset value,
end of period .............. $ 10.57 $ 10.65 $ 11.38 $ 11.19 $ 10.84
======================================================================
Total Return
Total investment return based
on net asset value(c) ...... 4.06% (1.87)% 8.40% 10.52% 9.52%
Ratios/Supplemental
Data
Net assets, end of period
(000's omitted) ............ $ 31,207 $ 29,365 $ 18,050 $ 7,815 $ 4,514
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements ........... 1.47% 1.42% 1.42% 1.42% 1.31%
Expenses, before waivers/
reimbursements ........... 1.93% 1.96% 2.21% 3.09% 3.84%
Net investment income, net
of waivers/reimbursements 4.83% 4.05% 4.18% 4.75% 4.88%
Portfolio turnover rate ....... 389% 303% 69% 134% 246%
</TABLE>
See footnote summary on page 95.
--------------------------------------------------------------------------------
ALLIANCE MUNICIPAL INCOME FUND II o 77
<PAGE>
--------------------
FINANCIAL HIGHLIGHTS
--------------------
Selected Data For A Share Of Beneficial Interest Outstanding Throughout Each
Period
<TABLE>
<CAPTION>
Michigan Portfolio
----------------------------------------------------------------------
Class A
----------------------------------------------------------------------
Year Ended September 30,
2000 1999 1998 1997 1996
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ........ $ 10.06 $ 10.62 $ 10.52 $ 10.12 $ 10.10
----------------------------------------------------------------------
Income From Investment
Operations
Net investment income(a)(b) ... .53 .46 .48 .53 .52
Net realized and unrealized
gain (loss) on investment
transactions ............... .09 (.45) .44 .55 .22
----------------------------------------------------------------------
Net increase in net asset
value from operations ...... .62 .01 .92 1.08 .74
----------------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income .......... (.52) (.46) (.48) (.53) (.52)
Distributions in excess of
net investment income ...... -0- (.04) (.05) (.02) (.03)
Distributions from net
realized gains ............. -0- (.07) (.29) (.13) (.17)
----------------------------------------------------------------------
Total dividends and
distributions .............. (.52) (.57) (.82) (.68) (.72)
----------------------------------------------------------------------
Net asset value,
end of period .............. $ 10.16 $ 10.06 $ 10.62 $ 10.52 $ 10.12
======================================================================
Total Return
Total investment return based
on net asset value(c) ...... 6.39% .03% 9.08% 11.05% 7.54%
Ratios/Supplemental
Data
Net assets, end of period
(000's omitted) ............ $ 14,609 $ 11,760 $ 8,640 $ 5,836 $ 6,123
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements ........... .99% .96% .96% .96% .96%
Expenses, before waivers/
reimbursements ........... 1.63% 1.62% 1.89% 2.46% 2.77%
Net investment income, net
of waivers/reimbursements 5.30% 4.48% 4.57% 5.24% 5.21%
Portfolio turnover rate ....... 287% 213% 134% 161% 242%
</TABLE>
See footnote summary on page 95.
--------------------------------------------------------------------------------
78 o ALLIANCE MUNICIPAL INCOME FUND II
<PAGE>
--------------------
FINANCIAL HIGHLIGHTS
--------------------
Selected Data For A Share Of Beneficial Interest Outstanding Throughout Each
Period
<TABLE>
<CAPTION>
Michigan Portfolio
----------------------------------------------------------------------
Class B
----------------------------------------------------------------------
Year Ended September 30,
2000 1999 1998 1997 1996
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ........ $ 10.05 $ 10.61 $ 10.52 $ 10.12 $ 10.10
----------------------------------------------------------------------
Income From Investment
Operations
Net investment income(a)(b) ... .45 .39 .40 .46 .45
Net realized and unrealized
gain (loss) on investment
transactions ............... .10 (.45) .44 .55 .22
----------------------------------------------------------------------
Net increase (decrease) in
net asset value from
operations ................. .55 (.06) .84 1.01 .67
----------------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income .......... (.45) (.39) (.40) (.46) (.45)
Distributions in excess of
net investment income ...... -0- (.04) (.06) (.02) (.03)
Distributions from net
realized gains ............. -0- (.07) (.29) (.13) (.17)
----------------------------------------------------------------------
Total dividends and
distributions .............. (.45) (.50) (.75) (.61) (.65)
----------------------------------------------------------------------
Net asset value,
end of period .............. $ 10.15 $ 10.05 $ 10.61 $ 10.52 $ 10.12
======================================================================
Total Return
Total investment return based
on net asset value(c) ...... 5.55% (.64)% 8.26% 10.30% 6.80%
Ratios/Supplemental
Data
Net assets, end of period
(000's omitted) ............ $ 14,943 $ 13,844 $ 9,411 $ 5,300 $ 3,553
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements ........... 1.69% 1.66% 1.66% 1.66% 1.66%
Expenses, before waivers/
reimbursements ........... 2.34% 2.44% 2.61% 3.23% 3.48%
Net investment income, net
of waivers/reimbursements 4.59% 3.79% 3.87% 4.53% 4.51%
Portfolio turnover rate ....... 287% 213% 134% 161% 242%
</TABLE>
See footnote summary on page 95.
--------------------------------------------------------------------------------
ALLIANCE MUNICIPAL INCOME FUND II o 79
<PAGE>
--------------------
FINANCIAL HIGHLIGHTS
--------------------
Selected Data For A Share Of Beneficial Interest Outstanding Throughout Each
Period
<TABLE>
<CAPTION>
Michigan Portfolio
----------------------------------------------------------------------
Class C
----------------------------------------------------------------------
Year Ended September 30,
2000 1999 1998 1997 1996
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ........ $ 10.05 $ 10.61 $ 10.52 $ 10.12 $ 10.10
----------------------------------------------------------------------
Income From Investment
Operations
Net investment income(a)(b) ... .46 .40 .41 .46 .45
Net realized and unrealized
gain (loss) on investment
transactions ............... .08 (.46) .43 .55 .22
----------------------------------------------------------------------
Net increase (decrease) in
net asset value from
operations ................. .54 (.06) .84 1.01 .67
----------------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income .......... (.45) (.40) (.41) (.46) (.45)
Distributions in excess of
net investment income ...... -0- (.03) (.05) (.02) (.03)
Distributions from net
realized gains ............. -0- (.07) (.29) (.13) (.17)
----------------------------------------------------------------------
Total dividends and
distributions .............. (.45) (.50) (.75) (.61) (.65)
----------------------------------------------------------------------
Net asset value,
end of period .............. $ 10.14 $ 10.05 $ 10.61 $ 10.52 $ 10.12
======================================================================
Total Return
Total investment return based
on net asset value(c) ...... 5.55% (.64)% 8.26% 10.30% 6.80%
Ratios/Supplemental
Data
Net assets, end of period
(000's omitted) ............ $ 12,061 $ 10,747 $ 8,983 $ 5,089 $ 3,940
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements ........... 1.69% 1.66% 1.66% 1.66% 1.66%
Expenses, before waivers/
reimbursements ........... 2.34% 2.43% 2.59% 3.20% 3.48%
Net investment income, net
of waivers/reimbursements 4.60% 3.78% 3.88% 4.55% 4.50%
Portfolio turnover rate ....... 287% 213% 134% 161% 242%
</TABLE>
See footnote summary on page 95.
--------------------------------------------------------------------------------
80 o ALLIANCE MUNICIPAL INCOME FUND II
<PAGE>
--------------------
FINANCIAL HIGHLIGHTS
--------------------
Selected Data For A Share Of Beneficial Interest Outstanding Throughout Each
Period
<TABLE>
<CAPTION>
Minnesota Portfolio
----------------------------------------------------------------------
Class A
----------------------------------------------------------------------
Year Ended September 30,
2000 1999 1998 1997 1996
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ........ $ 9.67 $ 10.22 $ 9.97 $ 9.58 $ 9.49
----------------------------------------------------------------------
Income From Investment
Operations
Net investment income(a)(b) ... .53 .49 .50 .53 .53
Net realized and unrealized
gain (loss) on investment
transactions ............... .03 (.53) .27 .39 .11
----------------------------------------------------------------------
Net increase (decrease) in
net asset value from
operations ................. .56 (.04) .77 .92 .64
----------------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income .......... (.51) (.49) (.50) (.53) (.53)
Distributions in excess of
net investment income ...... -0- (.02) (.02) -0- (.02)
----------------------------------------------------------------------
Total dividends and
distributions .............. (.51) (.51) (.52) (.53) (.55)
----------------------------------------------------------------------
Net asset value,
end of period .............. $ 9.72 $ 9.67 $ 10.22 $ 9.97 $ 9.58
======================================================================
Total Return
Total investment return based
on net asset value(c) ...... 6.09% (.48)% 7.94% 9.93% 6.95%
Ratios/Supplemental
Data
Net assets, end of period
(000's omitted) ............ $ 20,212 $ 10,601 $ 6,261 $ 4,120 $ 3,165
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements ........... .81% .75% .75% .75% .72%
Expenses, before waivers/
reimbursements ........... 1.66% 1.63% 1.80% 2.22% 2.19%
Net investment income, net
of waivers/reimbursements 5.57% 4.90% 4.92% 5.44% 5.54%
Portfolio turnover rate ....... 307% 259% 30% 131% 195%
</TABLE>
See footnote summary on page 95.
--------------------------------------------------------------------------------
ALLIANCE MUNICIPAL INCOME FUND II o 81
<PAGE>
--------------------
FINANCIAL HIGHLIGHTS
--------------------
Selected Data For A Share Of Beneficial Interest Outstanding Throughout Each
Period
<TABLE>
<CAPTION>
Minnesota Portfolio
----------------------------------------------------------------------
Class B
----------------------------------------------------------------------
Year Ended September 30,
2000 1999 1998 1997 1996
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ........ $ 9.67 $ 10.22 $ 9.97 $ 9.58 $ 9.49
----------------------------------------------------------------------
Income From Investment
Operations
Net investment income(a)(b) ... .46 .42 .42 .46 .46
Net realized and unrealized
gain (loss) on investment
transactions ............... .03 (.53) .28 .39 .11
----------------------------------------------------------------------
Net increase (decrease) in
net asset value from
operations ................. .49 (.11) .70 .85 .57
----------------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income .......... (.44) (.42) (.42) (.46) (.46)
Distributions in excess of
net investment income ...... -0- (.02) (.03) -0- (.02)
----------------------------------------------------------------------
Total dividends and
distributions .............. (.44) (.44) (.45) (.46) (.48)
----------------------------------------------------------------------
Net asset value,
end of period .............. $ 9.72 $ 9.67 $ 10.22 $ 9.97 $ 9.58
======================================================================
Total Return
Total investment return based
on net asset value(c) ...... 5.32% (1.19)% 7.17% 9.13% 6.15%
Ratios/Supplemental
Data
Net assets, end of period
(000's omitted) ............ $ 12,064 $ 14,111 $ 13,867 $ 8,517 $ 8,291
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements ........... 1.51% 1.46% 1.46% 1.46% 1.42%
Expenses, before waivers/
reimbursements ........... 2.37% 2.43% 2.52% 2.91% 2.89%
Net investment income, net
of waivers/reimbursements 4.81% 4.16% 4.19% 4.75% 4.82%
Portfolio turnover rate ....... 307% 259% 30% 131% 195%
</TABLE>
See footnote summary on page 95.
--------------------------------------------------------------------------------
82 o ALLIANCE MUNICIPAL INCOME FUND II
<PAGE>
--------------------
FINANCIAL HIGHLIGHTS
--------------------
Selected Data For A Share Of Beneficial Interest Outstanding Throughout Each
Period
<TABLE>
<CAPTION>
Minnesota Portfolio
---------------------------------------------------------------------
Class C
---------------------------------------------------------------------
Year Ended September 30,
2000 1999 1998 1997 1996
---------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ........ $ 9.67 $ 10.22 $ 9.97 $ 9.58 $ 9.50
---------------------------------------------------------------------
Income From Investment
Operations
Net investment income(a)(b) ... .46 .42 .43 .46 .46
Net realized and unrealized
gain (loss) on investment
transactions ............... .03 (.53) .27 .39 .10
---------------------------------------------------------------------
Net increase (decrease) in
net asset value from
operations ................. .49 (.11) .70 .85 .56
---------------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income .......... (.44) (.42) (.43) (.46) (.46)
Distributions in excess of
net investment income ...... -0- (.02) (.02) -0- (.02)
---------------------------------------------------------------------
Total dividends and
distributions .............. (.44) (.44) (.45) (.46) (.48)
---------------------------------------------------------------------
Net asset value,
end of period .............. $ 9.72 $ 9.67 $ 10.22 $ 9.97 $ 9.58
=====================================================================
Total Return
Total investment return based
on net asset value(c) ...... 5.32% (1.19)% 7.18% 9.13% 6.03%
Ratios/Supplemental
Data
Net assets, end of period
(000's omitted) ............ $ 7,524 $ 9,081 $ 7,716 $ 7,358 $ 6,553
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements ........... 1.50% 1.45% 1.45% 1.45% 1.41%
Expenses, before waivers/
reimbursements ........... 2.36% 2.44% 2.48% 2.89% 2.88%
Net investment income, net
of waivers/reimbursements 4.84% 4.17% 4.23% 4.76% 4.82%
Portfolio turnover rate ....... 307% 259% 30% 131% 195%
</TABLE>
See footnote summary on page 95.
--------------------------------------------------------------------------------
ALLIANCE MUNICIPAL INCOME FUND II o 83
<PAGE>
--------------------
FINANCIAL HIGHLIGHTS
--------------------
Selected Data For A Share Of Beneficial Interest Outstanding Throughout Each
Period
<TABLE>
<CAPTION>
New Jersey Portfolio
----------------------------------------------------------------------
Class A
----------------------------------------------------------------------
Year Ended September 30,
2000 1999 1998 1997 1996
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ........ $ 9.93 $ 10.46 $ 10.15 $ 9.72 $ 9.65
----------------------------------------------------------------------
Income From Investment
Operations
Net investment income(a)(b) .. .52 .49 .51 .51 .51
Net realized and unrealized
gain (loss) on investment
transactions ............... (.02) (.51) .32 .44 .11
----------------------------------------------------------------------
Net increase (decrease) in
net asset value from
operations ................. .50 (.02) .83 .95 .62
----------------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income .......... (.51) (.49) (.51) (.51) (.51)
Distributions in excess of
net investment income ...... -0- (.02) (.01) (.01) (.04)
----------------------------------------------------------------------
Total dividends and
distributions .............. (.51) (.51) (.52) (.52) (.55)
----------------------------------------------------------------------
Net asset value,
end of period .............. $ 9.92 $ 9.93 $ 10.46 $ 10.15 $ 9.72
======================================================================
Total Return
Total investment return based
on net asset value(c) ...... 5.31% (.29)% 8.36% 10.01% 6.57%
Ratios/Supplemental
Data
Net assets, end of period
(000's omitted) ............ $ 49,667 $ 33,109 $ 22,333 $ 16,309 $ 15,520
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements ........... .85% .82% .82% .82% .82%
Expenses, before waivers/
reimbursements ........... 1.23% 1.25% 1.29% 1.34% 1.35%
Net investment income, net
of waivers/reimbursements 5.36% 4.82% 4.93% 5.16% 5.26%
Portfolio turnover rate ....... 224% 131% 35% 61% 132%
</TABLE>
See footnote summary on page 95.
--------------------------------------------------------------------------------
84 o ALLIANCE MUNICIPAL INCOME FUND II
<PAGE>
--------------------
FINANCIAL HIGHLIGHTS
--------------------
Selected Data For A Share Of Beneficial Interest Outstanding Throughout Each
Period
<TABLE>
<CAPTION>
New Jersey Portfolio
----------------------------------------------------------------------
Class B
----------------------------------------------------------------------
Year Ended September 30,
2000 1999 1998 1997 1996
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ........ $ 9.93 $ 10.46 $ 10.16 $ 9.72 $ 9.66
----------------------------------------------------------------------
Income From Investment
Operations
Net investment income(a)(b) ... .45 .42 .43 .44 .44
Net realized and unrealized
gain (loss) on investment
transactions ............... (.02) (.51) .32 .45 .10
----------------------------------------------------------------------
Net increase (decrease) in
net asset value from
operations ................. .43 (.09) .75 .89 .54
----------------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income .......... (.44) (.42) (.43) (.44) (.45)
Distributions in excess of
net investment income ...... -0- (.02) (.02) (.01) (.03)
----------------------------------------------------------------------
Total dividends and
distributions .............. (.44) (.44) (.45) (.45) (.48)
----------------------------------------------------------------------
Net asset value,
end of period .............. $ 9.92 $ 9.93 $ 10.46 $ 10.16 $ 9.72
======================================================================
Total Return
Total investment return based
on net asset value(c) ...... 4.53% (.99)% 7.50% 9.32% 5.66%
Ratios/Supplemental
Data
Net assets, end of period
(000's omitted) ............ $ 62,149 $ 64,929 $ 48,027 $ 38,308 $ 39,099
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements ........... 1.55% 1.53% 1.53% 1.53% 1.53%
Expenses, before waivers/
reimbursements ........... 1.94% 1.99% 2.00% 2.04% 2.05%
Net investment income, net
of waivers/reimbursements 4.63% 4.10% 4.23% 4.45% 4.56%
Portfolio turnover rate ....... 224% 131% 35% 61% 132%
</TABLE>
See footnote summary on page 95.
--------------------------------------------------------------------------------
ALLIANCE MUNICIPAL INCOME FUND II o 85
<PAGE>
--------------------
FINANCIAL HIGHLIGHTS
--------------------
Selected Data For A Share Of Beneficial Interest Outstanding Throughout Each
Period
<TABLE>
<CAPTION>
New Jersey Portfolio
----------------------------------------------------------------------
Class C
----------------------------------------------------------------------
Year Ended September 30,
2000 1999 1998 1997 1996
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ........ $ 9.93 $ 10.46 $ 10.16 $ 9.72 $ 9.66
----------------------------------------------------------------------
Income From Investment
Operations
Net investment income(a)(b) ... .45 .43 .43 .44 .44
Net realized and unrealized
gain (loss) on investment
transactions ............... (.01) (.52) .32 .45 .10
----------------------------------------------------------------------
Net increase (decrease) in
net asset value from
operations ................. .44 (.09) .75 .89 .54
----------------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income .......... (.44) (.43) (.43) (.44) (.45)
Distributions in excess of
net investment income ...... -0- (.01) (.02) (.01) (.03)
----------------------------------------------------------------------
Total dividends and
distributions .............. (.44) (.44) (.45) (.45) (.48)
----------------------------------------------------------------------
Net asset value,
end of period .............. $ 9.93 $ 9.93 $ 10.46 $ 10.16 $ 9.72
======================================================================
Total Return
Total investment return based
on net asset value(c) ...... 4.63% (.99)% 7.50% 9.32% 5.66%
Ratios/Supplemental
Data
Net assets, end of period
(000's omitted) ............ $ 31,115 $ 32,578 $ 26,018 $ 21,404 $ 22,579
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements ........... 1.54% 1.52% 1.52% 1.52% 1.52%
Expenses, before waivers/
reimbursements ........... 1.93% 1.98% 1.99% 2.03% 2.04%
Net investment income, net
of waivers/reimbursements 4.64% 4.12% 4.23% 4.47% 4.56%
Portfolio turnover rate ....... 224% 131% 35% 61% 132%
</TABLE>
See footnote summary on page 95.
--------------------------------------------------------------------------------
86 o ALLIANCE MUNICIPAL INCOME FUND II
<PAGE>
--------------------
FINANCIAL HIGHLIGHTS
--------------------
Selected Data For A Share Of Beneficial Interest Outstanding Throughout Each
Period
<TABLE>
<CAPTION>
Ohio Portfolio
----------------------------------------------------------------------
Class A
----------------------------------------------------------------------
Year Ended September 30,
2000 1999 1998 1997 1996
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ........ $ 9.86 $ 10.45 $ 10.16 $ 9.61 $ 9.53
----------------------------------------------------------------------
Income From Investment
Operations
Net investment income(a)(b) ... .54 .49 .52 .54 .52
Net realized and unrealized
gain (loss) on investment
transactions ............... (.12) (.55) .30 .54 .11
----------------------------------------------------------------------
Net increase (decrease) in
net asset value from
operations ................. .42 (.06) .82 1.08 .63
----------------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income ......... (.51) (.49) (.52) (.53) (.53)
Distributions in excess of
net investment income ...... -0- (.04) (.01) -0- (.02)
----------------------------------------------------------------------
Total dividends and
distributions .............. (.51) (.53) (.53) (.53) (.55)
----------------------------------------------------------------------
Net asset value,
end of period .............. $ 9.77 $ 9.86 $ 10.45 $ 10.16 $ 9.61
======================================================================
Total Return
Total investment return based
on net asset value(c) ...... 4.54% (.70)% 8.30% 11.60% 6.72%
Ratios/Supplemental
Data
Net assets, end of period
(000's omitted) ............ $ 32,490 $ 27,229 $ 14,220 $ 7,596 $ 6,054
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements ........... .76% .75% .75% .75% .75%
Expenses, before waivers/
reimbursements ........... 1.29% 1.30% 1.35% 1.52% 1.48%
Net investment income, net
of waivers/reimbursements 5.57% 4.88% 5.05% 5.49% 5.47%
Portfolio turnover rate ....... 307% 208% 16% 104% 182%
</TABLE>
See footnote summary on page 95.
--------------------------------------------------------------------------------
ALLIANCE MUNICIPAL INCOME FUND II o 87
<PAGE>
--------------------
FINANCIAL HIGHLIGHTS
--------------------
Selected Data For A Share Of Beneficial Interest Outstanding Throughout Each
Period
<TABLE>
<CAPTION>
Ohio Portfolio
----------------------------------------------------------------------
Class B
----------------------------------------------------------------------
Year Ended September 30,
2000 1999 1998 1997 1996
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ........ $ 9.86 $ 10.45 $ 10.16 $ 9.61 $ 9.54
----------------------------------------------------------------------
Income From Investment
Operations
Net investment income(a)(b) ... .46 .43 .45 .48 .46
Net realized and unrealized
gain (loss) on investment
transactions ............... (.11) (.57) .30 .53 .09
----------------------------------------------------------------------
Net increase (decrease) in
net asset value from
operations ................. .35 (.14) .75 1.01 .55
----------------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income .......... (.44) (.43) (.45) (.46) (.46)
Distributions in excess of
net investment income ...... -0- (.02) (.01) -0- (.02)
----------------------------------------------------------------------
Total dividends and
distributions .............. (.44) (.45) (.46) (.46) (.48)
----------------------------------------------------------------------
Net asset value,
end of period .............. $ 9.77 $ 9.86 $ 10.45 $ 10.16 $ 9.61
======================================================================
Total Return
Total investment return based
on net asset value(c) ...... 3.78% (1.38)% 7.56% 10.80% 5.82%
Ratios/Supplemental
Data
Net assets, end of period
(000's omitted) ............ $ 40,812 $ 49,055 $ 37,289 $ 26,821 $ 25,334
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements ........... 1.47% 1.46% 1.46% 1.46% 1.46%
Expenses, before waivers/
reimbursements ........... 2.00% 2.01% 2.05% 2.22% 2.18%
Net investment income, net
of waivers/reimbursements 4.84% 4.17% 4.34% 4.81% 4.77%
Portfolio turnover rate ....... 307% 208% 16% 104% 182%
</TABLE>
See footnote summary on page 95.
--------------------------------------------------------------------------------
88 o ALLIANCE MUNICIPAL INCOME FUND II
<PAGE>
--------------------
FINANCIAL HIGHLIGHTS
--------------------
Selected Data For A Share Of Beneficial Interest Outstanding Throughout Each
Period
<TABLE>
<CAPTION>
Ohio Portfolio
----------------------------------------------------------------------
Class C
----------------------------------------------------------------------
Year Ended September 30,
2000 1999 1998 1997 1996
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ........ $ 9.86 $ 10.45 $ 10.16 $ 9.61 $ 9.54
----------------------------------------------------------------------
Income From Investment
Operations
Net investment income(a)(b) ... .47 .43 .45 .47 .46
Net realized and unrealized
gain (loss) on investment
transactions ............... (.12) (.57) .30 .54 .09
----------------------------------------------------------------------
Net increase (decrease) in
net asset value from
operations ................. .35 (.14) .75 1.01 .55
----------------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income .......... (.44) (.43) (.45) (.46) (.46)
Distributions in excess of
net investment income ...... -0- (.02) (.01) -0- (.02)
----------------------------------------------------------------------
Total dividends and
distributions .............. (.44) (.45) (.46) (.46) (.48)
----------------------------------------------------------------------
Net asset value,
end of period .............. $ 9.77 $ 9.86 $ 10.45 $ 10.16 $ 9.61
======================================================================
Total Return
Total investment return based
on net asset value(c) ...... 3.78% (1.38)% 7.56% 10.80% 5.82%
Ratios/Supplemental
Data
Net assets, end of period
(000's omitted) ............ $ 22,909 $ 24,126 $ 16,685 $ 14,878 $ 17,203
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements ........... 1.46% 1.45% 1.45% 1.45% 1.45%
Expenses, before waivers/
reimbursements ........... 1.99% 2.01% 2.04% 2.20% 2.16%
Net investment income, net
of waivers/reimbursements 4.85% 4.18% 4.36% 4.81% 4.78%
Portfolio turnover rate ....... 307% 208% 16% 104% 182%
</TABLE>
See footnote summary on page 95.
--------------------------------------------------------------------------------
ALLIANCE MUNICIPAL INCOME FUND II o 89
<PAGE>
--------------------
FINANCIAL HIGHLIGHTS
--------------------
Selected Data For A Share Of Beneficial Interest Outstanding Throughout Each
Period
<TABLE>
<CAPTION>
Pennsylvania Portfolio
----------------------------------------------------------------------
Class A
----------------------------------------------------------------------
Year Ended September 30,
2000 1999 1998 1997 1996
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ........ $ 9.89 $ 10.66 $ 10.33 $ 9.85 $ 9.64
----------------------------------------------------------------------
Income From Investment
Operations
Net investment income(a)(b) ... .52 .49 .53 .55 .49
Net realized and unrealized
gain (loss) on investment
transactions ............... (.01) (.73) .35 .49 .28
----------------------------------------------------------------------
Net increase (decrease) in
net asset value from
operations ................. .51 (.24) .88 1.04 .77
----------------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income .......... (.52) (.49) (.53) (.55) (.53)
Distributions in excess of
net investment income ...... -0- (.04) (.02) (.01) (.03)
----------------------------------------------------------------------
Total dividends and
distributions .............. (.52) (.53) (.55) (.56) (.56)
----------------------------------------------------------------------
Net asset value,
end of period .............. $ 9.88 $ 9.89 $ 10.66 $ 10.33 $ 9.85
======================================================================
Total Return
Total investment return based
on net asset value(c) ...... 5.35% (2.43)% 8.72% 10.85% 8.17%
Ratios/Supplemental
Data
Net assets, end of period
(000's omitted) ............ $ 68,288 $ 62,479 $ 35,632 $ 24,948 $ 21,104
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements ........... .95% .95% .95% .95% 1.00%
Expenses, before waivers/
reimbursements ........... 1.23% 1.24% 1.29% 1.40% 1.45%
Net investment income, net
of waivers/reimbursements 5.40% 4.68% 5.10% 5.44% 5.40%
Portfolio turnover rate ....... 356% 249% 70% 85% 185%
</TABLE>
See footnote summary on page 95.
--------------------------------------------------------------------------------
90 o ALLIANCE MUNICIPAL INCOME FUND II
<PAGE>
--------------------
FINANCIAL HIGHLIGHTS
--------------------
Selected Data For A Share Of Beneficial Interest Outstanding Throughout Each
Period
<TABLE>
<CAPTION>
Pennsylvania Portfolio
----------------------------------------------------------------------
Class B
----------------------------------------------------------------------
Year Ended September 30,
2000 1999 1998 1997 1996
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ........ $ 9.89 $ 10.66 $ 10.33 $ 9.86 $ 9.65
----------------------------------------------------------------------
Income From Investment
Operations
Net investment income(a)(b) ... .45 .41 .46 .47 .46
Net realized and unrealized
gain (loss) on investment
transactions ............... (.02) (.73) .34 .49 .24
----------------------------------------------------------------------
Net increase (decrease) in
net asset value from
operations ................. .43 (.32) .80 .96 .70
----------------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income .......... (.44) (.41) (.46) (.47) (.46)
Distributions in excess of
net investment income ...... -0- (.04) (.01) (.02) (.03)
----------------------------------------------------------------------
Total dividends and
distributions .............. (.44) (.45) (.47) (.49) (.49)
----------------------------------------------------------------------
Net asset value,
end of period .............. $ 9.88 $ 9.89 $ 10.66 $ 10.33 $ 9.86
======================================================================
Total Return
Total investment return based
on net asset value(c) ...... 4.58% (3.10)% 7.98% 9.95% 7.38%
Ratios/Supplemental
Data
Net assets, end of period
(000's omitted) ............ $ 44,713 $ 52,012 $ 39,465 $ 30,078 $ 30,440
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements ........... 1.66% 1.66% 1.66% 1.66% 1.71%
Expenses, before waivers/
reimbursements ........... 1.94% 1.98% 2.00% 2.09% 2.15%
Net investment income, net
of waivers/reimbursements 4.69% 3.96% 4.39% 4.72% 4.69%
Portfolio turnover rate ....... 356% 249% 70% 85% 185%
</TABLE>
See footnote summary on page 95.
--------------------------------------------------------------------------------
ALLIANCE MUNICIPAL INCOME FUND II o 91
<PAGE>
--------------------
FINANCIAL HIGHLIGHTS
--------------------
Selected Data For A Share Of Beneficial Interest Outstanding Throughout Each
Period
<TABLE>
<CAPTION>
Pennsylvania Portfolio
----------------------------------------------------------------------
Class C
----------------------------------------------------------------------
Year Ended September 30,
2000 1999 1998 1997 1996
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ........ $ 9.89 $ 10.66 $ 10.33 $ 9.86 $ 9.65
----------------------------------------------------------------------
Income From Investment
Operations
Net investment income(a)(b) ... .46 .41 .46 .47 .46
Net realized and unrealized
gain (loss) on investment
transactions ............... (.03) (.73) .34 .49 .24
----------------------------------------------------------------------
Net increase (decrease) in
net asset value from
operations ................. .43 (.32) .80 .96 .70
----------------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income .......... (.44) (.41) (.46) (.47) (.46)
Distributions in excess of
net investment income ...... -0- (.04) (.01) (.02) (.03)
----------------------------------------------------------------------
Total dividends and
distributions .............. (.44) (.45) (.47) (.49) (.49)
----------------------------------------------------------------------
Net asset value,
end of period .............. $ 9.88 $ 9.89 $ 10.66 $ 10.33 $ 9.86
======================================================================
Total Return
Total investment return based
on net asset value(c) ...... 4.58% (3.10)% 7.98% 9.95% 7.37%
Ratios/Supplemental
Data
Net assets, end of period
(000's omitted) ............ $ 23,306 $ 27,916 $ 17,531 $ 15,486 $ 13,996
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements ........... 1.65% 1.65% 1.65% 1.65% 1.70%
Expenses, before waivers/
reimbursements ........... 1.93% 1.98% 1.99% 2.10% 2.14%
Net investment income, net
of waivers/reimbursements 4.71% 3.98% 4.41% 4.73% 4.69%
Portfolio turnover rate ....... 356% 249% 70% 85% 185%
</TABLE>
See footnote summary on page 95.
--------------------------------------------------------------------------------
92 o ALLIANCE MUNICIPAL INCOME FUND II
<PAGE>
--------------------
FINANCIAL HIGHLIGHTS
--------------------
Selected Data For A Share Of Beneficial Interest Outstanding Throughout Each
Period
<TABLE>
<CAPTION>
Virginia Portfolio
----------------------------------------------------------------------
Class A
----------------------------------------------------------------------
Year Ended September 30,
2000 1999 1998 1997 1996
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ........ $ 10.32 $ 11.02 $ 10.90 $ 10.58 $ 10.29
----------------------------------------------------------------------
Income From Investment
Operations
Net investment income(a)(b) ... .56 .49 .52 .57 .57
Net realized and unrealized
gain (loss) on investment
transactions ............... .02 (.60) .49 .57 .37
----------------------------------------------------------------------
Net increase (decrease) in
net asset value from
operations ................. .58 (.11) 1.01 1.14 .94
----------------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income .......... (.55) (.49) (.52) (.57) (.57)
Distributions in excess of
net investment income ...... -0- (.07) (.05) -0- -0-
Distributions from net
realized gains ............. -0- (.03) (.32) (.25) (.08)
----------------------------------------------------------------------
Total dividends and
distributions .............. (.55) (.59) (.89) (.82) (.65)
----------------------------------------------------------------------
Net asset value,
end of period .............. $ 10.35 $ 10.32 $ 11.02 $ 10.90 $ 10.58
======================================================================
Total Return
Total investment return based
on net asset value(c) ...... 5.88% (1.10)% 9.65% 11.32% 9.39%
Ratios/Supplemental
Data
Net assets, end of period
(000's omitted) ............ $ 37,784 $ 28,148 $ 10,315 $ 3,530 $ 2,455
Ratio to average net assets of:
Expenses, net of waivers/
reimbursements ........... .67% .67% .67% .67% .67%
Expenses, before waivers/
reimbursements ........... 1.26% 1.43% 2.09% 3.57% 5.18%
Net investment income, net
of waivers/reimbursements 5.52% 4.67% 4.84% 5.39% 5.39%
Portfolio turnover rate ....... 289% 311% 62% 258% 298%
</TABLE>
See footnote summary on page 95.
--------------------------------------------------------------------------------
ALLIANCE MUNICIPAL INCOME FUND II o 93
<PAGE>
--------------------
FINANCIAL HIGHLIGHTS
--------------------
Selected Data For A Share Of Beneficial Interest Outstanding Throughout Each
Period
<TABLE>
<CAPTION>
Virginia Portfolio
----------------------------------------------------------------------
Class B
----------------------------------------------------------------------
Year Ended September 30,
2000 1999 1998 1997 1996
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ........ $ 10.31 $ 11.01 $ 10.90 $ 10.57 $ 10.29
----------------------------------------------------------------------
Income From Investment
Operations
Net investment income(a)(b) ... .49 .42 .44 .50 .50
Net realized and unrealized
gain (loss) on investment
transactions ............... .02 (.60) .49 .58 .36
----------------------------------------------------------------------
Net increase (decrease) in
net asset value from
operations ................. .51 (.18) .93 1.08 .86
----------------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income .......... (.48) (.42) (.44) (.50) (.50)
Distributions in excess of
net investment income ...... -0- (.07) (.06) -0- -0-
Distributions from net
realized gains ............. -0- (.03) (.32) (.25) (.08)
----------------------------------------------------------------------
Total dividends and
distributions .............. (.48) (.52) (.82) (.75) (.58)
----------------------------------------------------------------------
Net asset value,
end of period .............. $ 10.34 $ 10.31 $ 11.01 $ 10.90 $ 10.57
======================================================================
Total Return
Total investment return based
on net asset value(c) ...... 5.16% (1.73)% 8.85% 10.70% 8.57%
Ratios/Supplemental
Data
Net assets, end of period
(000's omitted) ............ $ 49,216 $ 42,007 $ 15,973 $ 5,020 $ 3,345
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 ........... 1.97% 2.20% 2.84% 4.29% 5.88%
Net investment income, net
of waivers/reimbursements 4.83% 3.97% 4.14% 4.68% 4.70%
Portfolio turnover rate ....... 289% 311% 62% 258% 298%
</TABLE>
See footnote summary on page 95.
--------------------------------------------------------------------------------
94 o ALLIANCE MUNICIPAL INCOME FUND II
<PAGE>
--------------------
FINANCIAL HIGHLIGHTS
--------------------
Selected Data For A Share Of Beneficial Interest Outstanding Throughout Each
Period
<TABLE>
<CAPTION>
Virginia Portfolio
----------------------------------------------------------------------
Class C
----------------------------------------------------------------------
Year Ended September 30,
2000 1999 1998 1997 1996
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ........ $ 10.31 $ 11.01 $ 10.90 $ 10.57 $ 10.29
----------------------------------------------------------------------
Income From Investment
Operations
Net investment income(a)(b) ... .49 .42 .44 .50 .50
Net realized and unrealized
gain (loss) on investment
transactions ............... .01 (.60) .49 .58 .36
----------------------------------------------------------------------
Net increase (decrease) in
net asset value from
operations ................. .50 (.18) .93 1.08 .86
----------------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income .......... (.48) (.42) (.44) (.50) (.50)
Distributions in excess of
net investment income ...... -0- (.07) (.06) -0- -0-
Distributions from net
realized gains ............. -0- (.03) (.32) (.25) (.08)
----------------------------------------------------------------------
Total dividends and
distributions .............. (.48) (.52) (.82) (.75) (.58)
----------------------------------------------------------------------
Net asset value,
end of period .............. $ 10.33 $ 10.31 $ 11.01 $ 10.90 $ 10.57
======================================================================
Total Return
Total investment return based
on net asset value(c) ...... 5.06% (1.73)% 8.85% 10.70% 8.58%
Ratios/Supplemental
Data
Net assets, end of period
(000's omitted) ............ $ 16,848 $ 12,962 $ 4,597 $ 1,207 $ 642
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 ........... 1.96% 2.19% 2.85% 4.25% 5.88%
Net investment income, net
of waivers/reimbursements 4.83% 3.97% 4.11% 4.66% 4.73%
Portfolio turnover rate ....... 289% 311% 62% 258% 298%
</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. Total investment return calculated for a period
of less than one year is not annualized.
--------------------------------------------------------------------------------
ALLIANCE MUNICIPAL INCOME FUND II o 95
<PAGE>
---------------------------
REPORT OF ERNST & YOUNG LLP
INDEPENDENT AUDITORS
---------------------------
REPORT OF ERNST & YOUNG LLP
INDEPENDENT AUDITORS
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, 2000,
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 based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. 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, 2000, by correspondence
with the custodian and others. 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, 2000, 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 accounting principles generally accepted in the United States.
/s/ Ernst & Young LLP
New York, New York
November 7, 2000
--------------------------------------------------------------------------------
96 o ALLIANCE MUNICIPAL INCOME FUND II
<PAGE>
-----------------------
FEDERAL TAX INFORMATION
-----------------------
FEDERAL TAX INFORMATION
(unaudited)
In accordance with Federal tax law, the following table represents each
portfolio's designation of "exempt-interest dividends" and paid during the
fiscal year ended September 30, 2000.
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 2000 calendar year on Form
1099-DIV which will be mailed by January 31, 2001.
Exempt-Interest
Portfolio Dividends
--------------------------------------------------------------------------------
Arizona .............................................. $4,071,989
Florida .............................................. 8,983,488
Massachusetts ........................................ 5,789,694
Michigan ............................................. 1,769,330
Minnesota ............................................ 1,732,559
New Jersey ........................................... 6,323,571
Ohio ................................................. 4,541,362
Pennsylvania ......................................... 6,424,701
Virginia ............................................. 4,481,645
--------------------------------------------------------------------------------
ALLIANCE MUNICIPAL INCOME FUND II o 97
<PAGE>
----------------------------
GLOSSARY OF INVESTMENT TERMS
----------------------------
GLOSSARY OF INVESTMENT TERMS
benchmark
A standard by which a Fund's performance can be measured. A benchmark is usually
an unmanaged index, such as the Standard & Poor's 500 Stock Index or the Lehman
Brothers Aggregate Bond Index.
bond
Bonds are issued by governments or corporations when they need to raise cash.
Bonds are sold, or issued, to investors and have a maturity date, which is the
date the issuer is obligated to repay the investor for the principal, or face
amount, of the bond. Bonds also pay interest until maturity. Bonds are also
called fixed-income securities.
credit rating
Credit ratings are issued by independent organizations, such as Standard &
Poor's Ratings group or Moody's Investors Services. These groups attempt to
assess the likelihood that the issuer of the bond will be able to make timely
payments of principal and interest on the bond, based on such factors as the
issuer's financial condition and any collateral securing these obligations.
Ratings typically range from AAA which is the highest rating, to D, which is the
lowest rating.
Federal Reserve Board
The seven-member board that oversees Federal Reserve Banks, establishes monetary
policy and monitors the country's economic state.
index
A compilation of securities of similar types of companies that is used to
measure the investment performance of securities within that specific market. An
index is often used as a benchmark for a mutual fund. An investor cannot invest
directly in an index.
net asset value (NAV)
The value of a mutual fund's total assets, minus its liabilities, divided by the
number of shares outstanding.
portfolio
The collection of securities that make up a Fund's or an investor's investments.
Treasuries
Negotiable U.S. Government debt obligations, backed by the full faith and credit
of the U.S. Government. Treasuries are issued either as bills, notes or bonds,
depending on the maturity. Treasuries are exempt from state and local taxes.
--------------------------------------------------------------------------------
98 o ALLIANCE MUNICIPAL INCOME FUND II
<PAGE>
----------------
ALLIANCE CAPITAL
----------------
ALLIANCE CAPITAL
The Investment Professional's Choice
Alliance Capital is a leading global investment management firm with over $474
billion in assets under management. In recognition of our far-reaching
investment capabilities, Alliance Capital has been selected by employee benefit
plans for 38 of the FORTUNE 100 companies and public retirement funds in 35
states as well as by hundreds of foundations, endowments and foreign
institutions. By sharing this institutional money management experience with
millions of mutual fund investors as well, Alliance stands out as a "manager of
choice" for thousands of investment professionals around the world.
At Alliance Capital, we place a premium on investment research. We carefully
select securities based on our proprietary research, conducted by over 585
investment professionals in 28 investment offices worldwide. Our commitment to
this process means that our mutual fund shareholders have their portfolios
managed by the same experienced analysts and portfolio managers who manage the
pension funds of some of America's largest institutional investors.
All information on Alliance Capital is as of 10/2/00.
--------------------------------------------------------------------------------
ALLIANCE MUNICIPAL INCOME FUND II o 99
<PAGE>
--------------------------------
ALLIANCE CAPITAL AT YOUR SERVICE
--------------------------------
ALLIANCE CAPITAL AT YOUR SERVICE
At Alliance Capital, shareholder satisfaction is among our top priorities.
That's why we provide our shareholders with a wide variety of products and
time-saving services to meet their needs.
o Low Minimum Investments
You can begin investing in Alliance Capital funds with as little as $250
(except for Alliance Select Investor Series Premier Portfolio, Alliance
Select Investor Series Technology Portfolio, and Alliance Select Investor
Series Biotechnology Portfolio which generally have a $10,000 minimum
initial investment) and may make subsequent investments of $50 or more.
o Automatic Reinvestment
You may choose to reinvest fund dividend and capital-gains distributions
automatically at no charge.
o Automatic Investment Program
Build your investment account by having money automatically transferred
from your bank account on a regular basis.
o Dividend Direction Plans
You may cross-invest dividends from one fund into the same class of shares
in any other fund without incurring a sales charge. This can be a good way
to diversify your assets.
o The Alliance Advance
A quarterly newsletter discussing investment strategies, economic news and
other matters that could affect your mutual fund investment.
o Auto Exchange
You may choose to automatically exchange money from one Alliance Capital
fund to another on a regular basis. This can be a good way to dollar cost
average*, helping you to invest with discipline.
o Systematic Withdrawals
Regular checks for specified amounts can be sent to you or to your
brokerage or bank account.
o A Choice of Purchase Plans
Most funds are available in A, B, and C Class shares. Many funds are also
available in Advisor Class shares.
o Telephone Transaction
Purchases, transfers and redemptions can be made by calling (800)
221-5672. Our knowledgeable representatives are available to assist you
Monday through Friday from 8:30 a.m. to 8:00 p.m. Eastern Standard Time.
o Alliance Answer: 24-Hour Information
For your convenience, our computerized audio response system is available
to you 24-hours a day by calling (800) 251-0539. Using any touch tone
phone, you can hear share prices, get account balances, review details of
your last transaction, obtain dividend information, order
statements/checkbooks, review fund objectives, literature and Watchlist
information, order additional copies of statements and request additional
year-end tax forms (available from February 1 to May 31).
o Alliance Capital on the World Wide Web at www.alliancecapital.com. Here,
you can access updated account information, make additional investments,
request more information, exchange between Alliance funds and view fund
performance, press releases and articles.
* Dollar cost averaging does not assure a profit nor protect against loss in
a declining market. Since this strategy involves continuous investments in
securities, regardless of fluctuating prices, investors should consider
their financial ability to invest during periods of low price levels.
--------------------------------------------------------------------------------
100 o ALLIANCE MUNICIPAL INCOME FUND II
<PAGE>
------------------
BOARD OF DIRECTORS
------------------
BOARD OF TRUSTEES
John D. Carifa, Chairman and President
Ruth Block(1)
David H. Dievler(1)
John H. Dobkin(1)
William H. Foulk, Jr.(1)
Dr. James M. Hester(1)
Clifford L. Michel(1)
Donald J. Robinson(1)
OFFICERS
Susan P. Keenan, Senior Vice President
David Dowden, Vice President
Terrance Hults, Vice President
Kathleen A. Corbet, Senior Vice President
Wayne D. Lyski, Senior Vice President
William E. Oliver, Vice President
Edmund P. Bergan, Jr., Secretary
Mark D. Gersten, Treasurer & Chief Financial Officer
Juan J. Rodriguez, Controller
Custodian
The Bank of New York
One Wall Street
New York, NY 10286
Principal Underwriter
Alliance Fund Distributors, Inc.
1345 Avenue of the Americas
New York, NY 10105
Legal Counsel
Seward & Kissel LLP
One Battery Park Plaza
New York, NY 10004
Independent Auditors
Ernst & Young LLP
787 Seventh Avenue
New York, NY 10019
Transfer Agent
Alliance Fund Services, Inc.
P.O. Box 1520
Secaucus, NJ 07096-1520
Toll-free (800) 221-5672
(1) Member of the Audit Committee.
--------------------------------------------------------------------------------
ALLIANCE MUNICIPAL INCOME FUND II o 101
<PAGE>
--------------------------------
ALLIANCE CAPITAL FAMILY OF FUNDS
--------------------------------
ALLIANCE CAPITAL FAMILY OF FUNDS
Domestic Equity Funds
Balanced Shares
Conservative Investors Fund
Disciplined Value Fund
Growth & Income Fund
Growth Fund
Growth Investors Fund
Health Care Fund
Premier Growth Fund
Quasar Fund
Real Estate Investment Fund
Technology Fund
The Alliance Fund
Utility Income Fund
Global & International Equity Funds
All-Asia Investment Fund
Global Small Cap Fund
Greater China '97 Fund
International Fund
International Premier Growth Fund
New Europe Fund
Worldwide Privatization Fund
Select Investor Series
Biotechnology Portfolio
Premier Portfolio
Technology Portfolio
Fixed Income Funds
Corporate Bond Portfolio
Global Dollar Government Fund
Global Strategic Income Trust
High Yield Fund
Multi-Market Strategy Trust
North American Government Income Trust
Quality Bond Portfolio
U.S. Government Portfolio
Municipal Income Funds
National
Insured National
Arizona
California
Insured California
Florida
Massachusetts
Michigan
Minnesota
New Jersey
New York
Ohio
Pennsylvania
Virginia
Closed-End Funds
All-Market Advantage Fund
The Austria Fund
ACM Government Income Fund
ACM Government Opportunity Fund
The Korean Investment Fund
ACM Managed Dollar Income Fund
ACM Managed Income Fund
ACM Municipal Securities Income Fund
The Southern Africa Fund
The Spain Fund
World Dollar Government Fund
World Dollar Government Fund II
Alliance also offers AFD Exchange Reserves, which serves as the money market
fund exchange vehicle for the Alliance mutual funds.
To obtain a prospectus for any Alliance Capital fund, call your investment
professional, or call Alliance at (800) 227-4618.
--------------------------------------------------------------------------------
102 o ALLIANCE MUNICIPAL INCOME FUND II
<PAGE>
NOTES
--------------------------------------------------------------------------------
ALLIANCE MUNICIPAL INCOME FUND II o 103
<PAGE>
NOTES
--------------------------------------------------------------------------------
104 o ALLIANCE MUNICIPAL INCOME FUND II
<PAGE>
Alliance Municipal Income Fund II -----------------
1345 Avenue of the Americas BULK RATE
New York, NY 10105 U.S. POSTAGE
(800) 221-5672 PAID
New York, NY
Permit No. 7131
-----------------
AllianceCapital [LOGO](R)
The Investment Professional's Choice
(R) These registered service marks used under license from the owner, Alliance
Capital Management L.P.
MUNIIIAR900
001129
