ALLIANCE UTILITY INCOME FUND
ANNUAL REPORT
NOVEMBER 30, 1999
ALLIANCE CAPITAL
LETTER TO SHAREHOLDERS ALLIANCE UTILITY INCOME FUND
_______________________________________________________________________________
January 28, 2000
Dear Shareholder,
This report provides you with investment results and market commentary for the
Alliance Utility Income Fund (the "Fund") for the annual reporting period ended
November 30, 1999.
INVESTMENT RESULTS
Total returns for the Fund are provided in the following table. For comparison,
we have also supplied performance data for the Fund's benchmark, the NYSE
Utility Index, as well as the Standard & Poor's 500 Stock Index (the "S&P 500")
and the Lipper Utility Funds Average (the "Lipper Average").
For the fiscal year, the Fund essentially matched the performance of its
benchmark, the NYSE Utility Index, and exceeded the performance of its peer
group as measured by the Lipper Average. Results were better during the first
six months of the Fund's fiscal year and slipped during the second half.
Electric utilities were hit hard by the Federal Reserve's tightening in the
latter part of the year. The past six-month performance of the Standard and
Poor's Utilities Sector was a negative 15%, while it was up almost 6% in the
first half. The telephone sector was up 7% for the first six months, but closed
the year up 15%.
What really drove the performance of the NYSE Utility Index, however, was the
telecom equipment sector. Lucent Technologies Inc., which comprises close to
10% of the NYSE Utility Index, appreciated 30% over the past six months and 72%
over the past year.
The Fund's underweight position in high tech holdings explains much of the
performance differential in the last six months of its fiscal year when
compared to its benchmarks.
INVESTMENT RESULTS*
Periods ended November 30, 1999
TOTAL RETURNS
6 MONTHS 12 MONTHS
-------- ---------
ALLIANCE UTILITY INCOME FUND
Class A 2.12% 20.27%
Class B 1.73% 19.45%
Class C 1.73% 19.34%
NYSE UTILITY INDEX 6.32% 20.19%
S&P 500 7.36% 20.89%
LIPPER UTILITY FUNDS AVERAGE 4.32% 16.96%
* THE FUND'S INVESTMENT RESULTS ARE TOTAL RETURNS FOR THE PERIOD AND ARE
BASED ON THE NET ASSET VALUE OF EACH CLASS OF SHARES. ALL FEES AND EXPENSES
RELATED TO THE OPERATION OF THE FUND HAVE BEEN DEDUCTED, BUT NO ADJUSTMENT HAS
BEEN MADE FOR SALES CHARGES THAT MAY APPLY WHEN SHARES ARE PURCHASED OR
REDEEMED. TOTAL RETURNS FOR ADVISOR CLASS SHARES WILL DIFFER DUE TO DIFFERENT
EXPENSES ASSOCIATED WITH THAT CLASS. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE
RESULTS.
THE UNMANAGED NYSE UTILITY INDEX IS COMPRISED OF 271 UTILITY STOCKS AND IS
ONE OF FOUR SUBGROUP INDICES OF THE NYSE COMPOSITE INDEX. THE NYSE COMPOSITE
INDEX IS A CAPITALIZATION-WEIGHTED PRICE ONLY INDICATOR THAT MEASURES THE
CHANGES IN AGGREGATE MARKET VALUE OF NYSE COMMON STOCKS, ADJUSTED TO ELIMINATE
THE EFFECTS OF CAPITALIZATION CHANGES, NEW LISTINGS AND DELISTINGS. THE S&P 500
IS AN UNMANAGED INDEX OF 500 U.S. COMPANIES AND IS A COMMON MEASURE OF THE
PERFORMANCE OF THE OVERALL U.S. STOCK MARKET. THE LIPPER UTILITY FUNDS AVERAGE
CONSISTS OF FUNDS WITH SIMILAR INVESTMENT OBJECTIVES TO THE ALLIANCE UTILITY
INCOME FUND ALTHOUGH THE INVESTMENT POLICIES OF FUNDS WITHIN THE LIPPER
UNIVERSE MAY DIFFER. FOR THE SIX- AND 12-MONTH PERIODS ENDED NOVEMBER 30, 1999,
THE LIPPER AVERAGE CONSISTED OF 103 FUNDS AND 100 FUNDS, RESPECTIVELY. AN
INVESTOR CANNOT INVEST DIRECTLY IN AN INDEX OR AN AVERAGE.
ADDITIONAL INVESTMENT RESULTS APPEAR ON PAGE 3.
INVESTMENT OUTLOOK
While utilities tend to experience choppy investment results during periods of
Federal Reserve tightening, electric utility stocks are now historically
undervalued. In our view, any sign of a slowdown in the U.S. economy will
benefit the group as money comes out of more economically sensitive issues. The
Fund continues to hold a
1
ALLIANCE UTILITY INCOME FUND
_______________________________________________________________________________
significant cash position to take advantage of this potential shift when it
occurs. In addition, the Fund continues to maintain an underweight position in
telephone utilities because of competitive concerns, and we continue to augment
the income characteristics of the Fund with convertible securities of higher
growth telecom service providers such as cable television companies.
Thank you for your continued interest in the Alliance Utility Income Fund. We
look forward to reporting to you in the future.
Sincerely,
John D. Carifa
Chairman and President
Paul Rissman
Senior Vice President
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, GUARANTEED OR ENDORSED
BY, ANY BANK; FURTHER, SUCH SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY.
SHARES OF THE FUND INVOLVE INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF
PRINCIPAL.
2
INVESTMENT OBJECTIVE AND POLICIES ALLIANCE UTILITY INCOME FUND
_______________________________________________________________________________
Alliance Utility Income Fund is an open-end, diversified investment portfolio
that seeks current income and capital appreciation primarily through
investments in the equity and fixed-income securities of companies in the
utilities industry.
INVESTMENT RESULTS
_______________________________________________________________________________
NAV AND SEC AVERAGE ANNUAL TOTAL RETURNS AS OF NOVEMBER 30, 1999
CLASS A SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
One Year 20.27% 15.17%
Five Years 19.14% 18.11%
Since Inception* 14.30% 13.49%
CLASS B SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
One Year 19.45% 15.45%
Five Years 18.32% 18.32%
Since Inception* 13.49% 13.49%
CLASS C SHARES
WITHOUT WITH
SALES CHARGE SALES CHARGE
------------ ------------
One Year 19.34% 18.34%
Five Years 18.32% 18.32%
Since Inception* 13.58% 13.58%
SEC AVERAGE ANNUAL TOTAL RETURNS
AS OF THE MOST RECENT QUARTER-END
(DECEMBER 31, 1999)
CLASS A CLASS B CLASS C
------------ ------------ ------------
1 Year 12.97% 13.23% 16.20%
Five Years 19.56% 19.76% 19.78%
Since Inception* 14.17% 14.15% 14.22%
The Fund's investment results represent average annual total returns. The NAV
and SEC returns reflect reinvestment of dividends and/or capital gains
distributions in additional shares without (NAV) and with (SEC) the effect of
the 4.25% maximum front-end sales charge for Class A or applicable contingent
deferred sales charge for Class B (4% year 1, 3% year 2, 2% year 3, 1% 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. Total return for Advisor Class shares will differ due to
different expenses associated with that class.
SEC Average Annual Total Returns as of the most recent quarter-end reflect
reinvestment of all distributions and deduction of the maximum 4.25% front-end
sales charges and applicable contingent deferred sales charges.
Past performance does not guarantee future results. Investment return and
principal value will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost.
* Inception: 10/18/93, Class A, Class B; 10/27/93, Class C.
3
ALLIANCE UTILITY INCOME FUND
_______________________________________________________________________________
ALLIANCE UTILITY INCOME FUND
GROWTH OF A $10,000 INVESTMENT
10/31/93* TO 11/30/99
$40,000
$32,000
$24,000
$16,000
$10,000
$8,000
S&P 500 STOCK INDEX: $33,665
ALLIANCE UTILITY INCOME FUND CLASS A: $21,700
NYSE UTILITY INDEX: $20,624
10/31/93 11/30/93 11/30/94 11/30/95 11/30/96 11/30/97 11/30/98 11/30/99
This chart illustrates the total value of an assumed $10,000 investment in
Alliance Utility Income Fund Class A shares (from 10/31/93 to 11/30/99) as
compared to the performance of appropriate broad-based indices. The chart
reflects the deduction of the maximum 4.25% sales charge from the initial
$10,000 investment in the Fund and assumes the reinvestment of dividends and
capital gains. Performance for Class B, Class C and Advisor Class shares will
vary from the results shown above due to differences in expenses charged to
those classes. Past performance is not indicative of future results, and is not
representative of future gain or loss in capital value or dividend income.
The unmanaged Standard &Poor's ("S&P") 500 Stock Index includes 500 U.S. stocks
and is a common measure of the performance of the overall U.S. stock market.
The unmanaged NYSEUtility Index is comprised of utility stocks traded on the
New YorkStock Exchange.
When comparing Alliance Utility Income Fund to the indices shown above, you
should note that no charges or expenses are reflected in the performance of the
indices.
Alliance Utility Income Fund
S&P 500 Stock Index
NYSEUtilityIndex
* Closest month-end after the Fund's Class A share inception date of
10/18/93.
4
TEN LARGEST HOLDINGS
NOVEMBER 30, 1999 ALLIANCE UTILITY INCOME FUND
_______________________________________________________________________________
PERCENT OF
COMPANY COUNTRY VALUE NET ASSETS
- -------------------------------------------------------------------------------
BCE, Inc. Canada $ 7,817,450 5.9%
FPL Group, Inc. United States 5,416,250 4.1
SBC Communications, Inc. United States 5,166,794 3.9
Consolidated Edison, Inc. United States 5,133,600 3.9
BellSouth Corp. United States 5,108,338 3.8
AT&T Corp. United States 4,448,935 3.3
Bell Atlantic Corp. United States 4,235,606 3.2
NTL, Inc. 7.00%, 12/15/08 United States 4,027,500 3.0
Edison International United States 3,975,000 3.0
Allegheny Energy, Inc. United States 3,596,000 2.7
$48,925,473 36.8%
MAJOR PORTFOLIO CHANGES
SIX MONTHS ENDED NOVEMBER 30, 1999
_______________________________________________________________________________
SHARES*
- -------------------------------------------------------------------------------
HOLDINGS
PURCHASES COUNTRY BOUGHT 11/30/99
- -------------------------------------------------------------------------------
BCE, Inc. Canada 69,600 115,600
Bell Atlantic Corp. United States 48,500 66,900
BellSouth Corp. United States 56,000 110,600
Calpine Capital Trust
cv. pfd. United States 40,000 40,000
Consolidated Edison, Inc. United States 84,600 148,800
Constellation Energy Group United States 84,000 84,000
Cox Communications, Inc. United States 40,000 40,000
Edison International United States 150,000 150,000
FPL Group, Inc. United States 107,000 123,800
Potomac Electric Power Co. United States 109,000 109,000
HOLDINGS
SALES SOLD 11/30/99
- -------------------------------------------------------------------------------
American Electric Power, Inc. United States 22,500 -0-
Ameritech Corp. United States 37,600 -0-
CINergy Corp. United States 28,200 -0-
CSC Holdings, Inc. Series I
8.50% cv. pfd. United States 20,000 -0-
Frontier Corp. United States 10,000 -0-
Merrill Lynch "Cox"
STRYPES United States 30,000 -0-
Qualcomm Financial Trust I
5.75% cv. pfd. United States 6,400 4,600
William Cos., Inc. 3.50% pfd. United States 7,500 -0-
* ADJUSTED FOR SPIN-OFFS.
5
PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1999 ALLIANCE UTILITY INCOME FUND
_______________________________________________________________________________
COMPANY SHARES VALUE
- -------------------------------------------------------------------------
COMMON & PREFERRED STOCKS-75.7%
UNITED STATES INVESTMENTS-67.0%
UTILITIES-56.8%
ELECTRIC & GAS UTILITY-37.9%
AGL Resources, Inc. 9,700 $ 179,450
Allegheny Energy, Inc. 124,000 3,596,000
Calpine Capital Trust cv.
preferred stock 40,000 2,465,000
CMS Energy Corp. 72,200 2,400,650
Consolidated Edison, Inc. 148,800 5,133,600
Constellation Energy
Group 84,000 2,472,750
DPL, Inc. 34,200 611,325
Edison International 150,000 3,975,000
Energy East Corp. 74,000 1,739,000
FPL Group, Inc. 123,800 5,416,250
GPU, Inc. 64,000 2,048,000
Illinova Corp. 71,000 2,280,875
KeySpan Corp. 14,800 380,175
MCN Energy Group, Inc. 7,400 184,538
Montana Power Co. 26,000 802,750
New Jersey Resources
Corp. 7,000 281,750
NIPSCO Industries, Inc. 15,000 571,875
Nisource, Inc. 59,000 1,109,937
Northern States Power Co. 60,000 1,226,250
Northwest Natural Gas
Co. 8,400 211,050
NSTAR 60,500 2,510,750
People's Energy Corp. 5,700 209,475
Pinnacle West Capital
Corp. 74,900 2,485,744
Potomac Electric Power
Co. 109,000 2,595,562
Questar Corp. 11,000 189,063
Reliant Energy, Inc. 120,000 2,977,500
Sempra Energy 9,774 180,819
Unicom Corp. 65,000 2,075,937
------------
50,311,075
TELEPHONE UTILITY-18.9%
AT&T Corp. 79,623 4,448,935
Bell Atlantic Corp. 66,900 4,235,606
BellSouth Corp. 110,600 5,108,338
GTE Corp. 27,000 1,971,000
MCI WorldCom, Inc. (a) 22,500 1,860,469
SBC Communications,
Inc. 99,481 5,166,794
U.S. West, Inc. 37,000 2,296,313
------------
25,087,455
------------
75,398,530
CONSUMER SERVICES-6.1%
BROADCASTING & CABLE-6.1%
Cablevision Systems Corp.
Cl.A (a) 14,828 1,016,645
Cox Communications,
Inc. 40,000 2,535,000
MediaOne Group, Inc.
Premium Income
Exchangeable Notes
6.25%, due 8/15/01 (b) 25,600 2,611,200
Omnipoint Corp.
7.00% cv.
preferred stock (c) 14,000 2,003,750
------------
8,166,595
ENERGY-2.1%
DOMESTIC PRODUCERS-0.2%
Washington Gas Light Co. 8,900 249,200
PIPELINES-0.9%
Williams Cos., Inc. 35,156 1,186,515
MISCELLANEOUS-1.0%
AES Trust I Series A
5.375% cv.
preferred stock 16,000 1,312,000
------------
2,747,715
6
ALLIANCE UTILITY INCOME FUND
_______________________________________________________________________________
SHARES OR
PRINCIPAL
AMOUNT
COMPANY (000) VALUE
- -------------------------------------------------------------------------
TECHNOLOGY-1.8%
MISCELLANEOUS-1.8%
Qualcomm Financial Trust I
5.75% cv.
preferred stock 4,600 $ 2,325,875
MULTI INDUSTRY COMPANY-0.2%
Southwest Gas Corp. 11,100 260,156
Total United States
Investments
(cost $79,893,234) 88,898,871
FOREIGN INVESTMENTS-8.7%
ARGENTINA-0.6%
Telecom Argentina, SA
(ADR) 15,000 440,625
Telefonica De Argentina, SA
(ADR) 15,000 394,687
------------
835,312
AUSTRALIA-0.7%
Telstra Corp., Ltd. 150,000 874,551
CANADA-5.9%
BCE, Inc. 115,600 7,817,450
MEXICO-1.1%
Telefonos de Mexico SA
Series L (ADR) 15,600 1,443,975
PHILIPPINES-0.2%
Philippine Long Distance
Telephone Co.
3.50% cv.
preferred stock (GDS) 7,800 $317,850
SOUTH KOREA-0.2%
Korea Electric Power
Corp. 6,890 273,401
Total Foreign Investments
(cost $8,345,450) 11,562,539
Total Common & Preferred
Stocks
(cost $88,238,684) 100,461,410
CONVERTIBLE BOND-3.0%
NTL, Inc.
7.00%, 12/15/08 (c)
(cost $2,010,861) 2,000 4,027,500
SHORT-TERM INVESTMENTS-22.1%
TIME DEPOSIT-22.1%
State Street Euro Dollar
5.00%, 12/01/99
(cost $29,386,000) $29,386 29,386,000
TOTAL INVESTMENTS-100.8%
(cost $119,635,545) 133,874,910
Other assets less
liabilities-(0.8%) (1,091,019)
NET ASSETS-100% $132,783,891
(a) Non-income producing security.
(b) Premium Income Exchangeable note which is convertible to Vodafone Airtouch
PLC until 8/15/01 at a rate of 2.0253 shares of Vodafone Airtouch for every
share of the exchangeable note.
(c) Securities are exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At November 30, 1999,
these securities amounted to $6,031,250 or 4.5% of net assets.
Glossary of Terms:
ADR - American Depositary Receipt.
GDS - Global Depositary Shares.
See notes to financial statements.
7
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1999 ALLIANCE UTILITY INCOME FUND
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $119,635,545) $133,874,910
Cash 892
Receivable for capital stock sold 645,498
Dividends and interest receivable 295,859
Total assets 134,817,159
LIABILITIES
Payable for investment securities purchased 1,290,051
Payable for capital stock redeemed 430,735
Distribution fee payable 90,088
Advisory fee payable 9,952
Accrued expenses 212,442
Total liabilities 2,033,268
NET ASSETS $132,783,891
COMPOSITION OF NET ASSETS
Capital stock, at par $ 7,889
Additional paid-in capital 110,781,878
Undistributed net investment income 364,934
Accumulated net realized gain on investments and foreign
currency transactions 7,389,825
Net unrealized appreciation of investments 14,239,365
$132,783,891
CALCULATION OF MAXIMUM OFFERING PRICE
CLASS A SHARES
Net asset value and redemption price per share
($29,840,693/1,764,502 shares of capital stock issued and
outstanding) $16.91
Sales charge--4.25% of public offering price .75
Maximum offering price $17.66
CLASS B SHARES
Net asset value and offering price per share
($80,806,209/4,809,488 shares of capital stock issued and
outstanding) $16.80
CLASS C SHARES
Net asset value and offering price per share
($20,605,443/1,225,050 shares of capital stock issued and
outstanding) $16.82
ADVISOR CLASS SHARES
Net asset value, redemption and offering price per share
($1,531,546/90,340 shares of capital stock issued and
outstanding) $16.95
See notes to financial statements.
8
STATEMENT OF OPERATIONS
YEAR ENDED NOVEMBER 30, 1999 ALLIANCE UTILITY INCOME FUND
_______________________________________________________________________________
INVESTMENT INCOME
Dividends (net of foreign taxes withheld
of $15,490) $ 2,463,707
Interest 964,803 $ 3,428,510
EXPENSES
Advisory fee 684,771
Distribution fee - Class A 53,207
Distribution fee - Class B 588,156
Distribution fee - Class C 135,914
Transfer agency 165,472
Administrative 124,000
Custodian 98,364
Printing 70,782
Audit and legal 70,553
Registration 68,806
Directors' fees 25,000
Miscellaneous 5,328
Total expenses 2,090,353
Less: expenses waived and reimbursed by
the Adviser (see Note B) (217,443)
Net expenses 1,872,910
Net investment income 1,555,600
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS
Net realized gain on investment
transactions 7,401,620
Net realized loss on foreign currency
transactions (3,742)
Net change in unrealized appreciation of
investments 4,745,935
Net gain on investments and foreign
currency transactions 12,143,813
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 13,699,413
See notes to financial statements.
9
STATEMENT OF CHANGES IN NET ASSETS ALLIANCE UTILITY INCOME FUND
_______________________________________________________________________________
YEAR ENDED YEAR ENDED
NOVEMBER 30, NOVEMBER 30,
1999 1998
------------ ------------
INCREASE IN NET ASSETS FROM OPERATIONS
Net investment income $ 1,555,600 $ 560,091
Net realized gain on investments and
foreign currency transactions 7,397,878 1,421,608
Net change in unrealized appreciation of
investments 4,745,935 5,059,359
Net increase in net assets from operations 13,699,413 7,041,058
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income
Class A (325,907) (145,708)
Class B (858,807) (362,844)
Class C (193,406) (78,247)
Advisor Class (23,518) (1,520)
Net realized gain on investments
Class A (233,506) (157,473)
Class B (872,536) (561,587)
Class C (174,312) (128,179)
Advisor Class (12,855) (1,582)
CAPITAL STOCK TRANSACTIONS
Net increase 68,615,036 25,206,430
Total increase 79,619,602 30,810,348
NET ASSETS
Beginning of year 53,164,289 22,353,941
End of year (including undistributed net
investment income of $364,934 and
$78,086, respectively) $132,783,891 $ 53,164,289
See notes to financial statements.
10
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1999 ALLIANCE UTILITY INCOME FUND
_______________________________________________________________________________
NOTE A: SIGNIFICANT ACCOUNTING POLICIES
Alliance Utility Income Fund, Inc. (the "Fund") organized as a Maryland
corporation on July 28, 1993, is registered under the Investment Company Act of
1940 as a diversified, open-end management investment company. The Fund offers
Class A, Class B, Class C and Advisor Class 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 4% to zero depending on the period of
time the shares are held. Class B shares will automatically convert to Class A
shares eight 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. Advisor Class shares are sold
without an initial or contingent deferred sales charge and are not subject to
ongoing distribution expenses. Advisor Class shares are offered to investors
participating in fee-based programs and to certain retirement plan accounts.
All four classes of shares have identical voting, dividend, liquidation and
other rights, except that each class bears different distribution expenses and
has exclusive voting rights with respect to its distribution plan. The
financial statements have been prepared in conformity with generally accepted
accounting principles which require management to make certain estimates and
assumptions that affect the reported amounts of assets and liabilities in the
financial statements and amounts of income and expenses during the reporting
period. Actual results could differ from those estimates. The following is a
summary of significant accounting policies followed by the Fund.
1. SECURITY VALUATION
Portfolio securities traded on a national securities exchange or on a foreign
securities exchange (other than foreign securities exchanges whose operations
are similar to those of the United States over-the-counter market) are
generally valued at the last reported sales price or if no sale occurred, at
the mean of the closing bid and asked prices on that day. Readily marketable
securities traded in the over-the-counter market, securities listed on a
foreign securities exchange whose operations are similar to the U.S.
over-the-counter market, and securities listed on a national securities
exchange whose primary market is believed to be over-the-counter, are valued at
the mean of the current bid and asked price. U.S. government and fixed income
securities which mature in 60 days or less are valued at amortized cost, unless
this method does not represent fair value. Securities for which current market
quotations are not readily available are valued at their fair value as
determined in good faith by, or in accordance with procedures adopted by, the
Board of Directors. Fixed income securities may be valued on the basis of
prices obtained from a pricing service when such prices are believed to reflect
the fair market value of such securities.
2. CURRENCY TRANSLATION
Assets and liabilities denominated in foreign currencies and commitments under
forward exchange currency contracts are translated into U.S. dollars at the
mean of the quoted bid and asked price of such currencies against the U.S.
dollar. Purchases and sales of portfolio securities are translated into U.S.
dollars at the rates of exchange prevailing when such securities were acquired
or sold. Income and expenses are translated into U.S. dollars at rates of
exchange prevailing when accrued.
Net realized foreign currency gains and losses represent foreign exchange gains
and losses from sales and maturities of debt securities and foreign exchange
currency contracts, currency gains and losses realized between the trade and
settlement dates on security transactions and the difference between the
amounts of dividends and interest recorded on the Fund's books and the U.S.
dollar equivalent amounts actually received or paid. The Fund does not isolate
the effect of fluctuations in foreign currency exchange rates when determining
the gain or loss upon the sale of equity securities. Net currency gains and
losses from valuing foreign currency denominated assets and liabilities at
period end exchange rates would be reflected as a component of net unrealized
appreciation of investments and foreign currency denominated assets and
liabilities.
3. TAXES
It is the Fund's policy 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
11
NOTES TO FINANCIAL STATEMENTS (CONTINUED) ALLIANCE UTILITY INCOME FUND
_______________________________________________________________________________
shareholders. Therefore, no provisions for federal income or excise taxes are
required.
4. INVESTMENT INCOME AND INVESTMENT TRANSACTIONS
Dividend income is recorded on the ex-dividend date. Interest income is accrued
daily. Investment transactions are accounted for on the date securities are
purchased or sold. The Fund accretes discounts as adjustments to interest
income. Investment gains and losses are determined on the identified cost basis.
5. INCOME AND EXPENSES
All income earned and expenses incurred by the Fund are borne on a pro-rata
basis by each outstanding class of shares, based on the proportionate interest
in the Fund represented by the net assets of such class, except that the Fund's
Class B and Class C shares bear higher distribution and transfer agent fees
than Class A shares and the Advisor Class shares have no distribution fees.
6. DIVIDENDS AND DISTRIBUTIONS
Dividends and distributions to shareholders are recorded on the ex-dividend
date.
Income dividends and capital gains distributions are determined in accordance
with federal tax regulations and may differ from those determined in accordance
with generally accepted accounting principles. To the extent these differences
are permanent, such amounts are reclassified within the capital accounts based
on their federal tax basis treatment; temporary differences, do not require
such reclassification. During the current fiscal year, permanent differences,
primarily due to net foreign currency losses and a distribution
reclassification, resulted in a net increase in undistributed net investment
income and a corresponding decrease in accumulated net realized gain on
investments and foreign currency transactions. This reclassification had no
effect on net assets.
NOTE B: ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Under the terms of an investment advisory agreement, the Fund pays Alliance
Capital Management L.P. (the "Adviser"), an advisory fee at an annual rate of
.75% of the Fund's average daily net assets. The fee is accrued daily and paid
monthly. The Adviser has agreed to waive its fees and bear certain expenses to
the extent necessary to limit total operating expenses on an annual basis to
1.50%, 2.20%, 2.20% and 1.20% of the daily average net assets for the Class A,
Class B, Class C and Advisor Class shares, respectively. For the year ended
November 30, 1999, such reimbursement amounted to $217,443.
Pursuant to the advisory agreement, the Fund paid $124,000 to the Adviser
representing the cost of certain legal and accounting services provided to the
Fund by the Adviser for the year ended November 30, 1999.
The Fund 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 the Fund. Such compensation
amounted to $105,307 for the year ended November 30, 1999.
For the year ended November 30, 1999, the Fund's expenses were reduced by
$7,737 under an expense offset arrangement with Alliance Fund Services, Inc.
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
of $28,108 from the sale of Class A shares and $487, $137,893 and $3,371 in
contingent deferred sales charges imposed upon redemptions by shareholders of
Class A, Class B and Class C shares, respectively, for the year ended November
30, 1999.
Brokerage commissions paid on investment transactions for the year ended
November 30, 1999 amounted to $97,332, none of which was paid to brokers
utilizing the services of the Pershing Division of Donaldson, Lufkin & Jenrette
Securities Corp. ("DLJ"), an affiliate of the Adviser, nor to DLJ directly.
12
ALLIANCE UTILITY INCOME FUND
_______________________________________________________________________________
NOTE C: DISTRIBUTION SERVICES AGREEMENT
The Fund has adopted a Distribution Services Agreement (the "Agreement")
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the
Agreement, the Fund pays distribution and servicing fees to the Distributor at
an annual rate of up to .30% of the Fund's average daily net assets
attributable to Class A shares and 1% of the average daily net assets
attributable to both Class B and Class C shares. There are no distribution and
servicing fees on the Advisor Class shares. The 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 the Fund in the amount of $4,267,239 and
$720,372 for Class B and Class C shares, respectively; such costs may be
recovered from the Fund in future periods as 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 the Fund's shares.
NOTE D: INVESTMENT TRANSACTIONS
Purchases and sales of investment securities (excluding short-term investments
and U.S. government securities) aggregated $63,160,934 and $13,883,941,
respectively, for the year ended November 30, 1999. There were no purchases or
sales of U.S. government and government agency obligations for the year ended
November 30, 1999.
At November 30, 1999, the cost of investments for federal income tax purposes
was substantially the same as the cost for financial reporting purposes. Gross
unrealized appreciation of investments was $21,074,369 and gross unrealized
depreciation of investments was $6,835,004 resulting in net unrealized
appreciation of $14,239,365.
NOTE E: CAPITAL STOCK
There are 12,000,000,000 shares of $.001 par value capital stock authorized,
divided into four classes, designated Class A, Class B, Class C and Advisor
Class shares. Each class consists of 3,000,000,000 authorized shares.
Transactions in capital stock were as follows:
SHARES AMOUNT
--------------------------- ------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
1999 1998 1999 1998
------------ ------------ -------------- --------------
CLASS A
Shares sold 1,337,932 468,890 $21,843,364 $ 6,379,213
Shares issued in
reinvestment of
dividends and
distributions 32,598 20,981 502,046 269,518
Shares converted
from Class B 41,986 40,217 686,298 545,405
Shares redeemed (314,966) (192,896) (5,112,880) (2,611,790)
Net increase 1,097,550 337,192 $17,918,828 $ 4,582,346
CLASS B
Shares sold 3,273,665 1,941,311 $52,611,977 $26,650,389
Shares issued in
reinvestment of
dividends and
distributions 87,785 36,970 1,338,724 472,569
Shares converted
to Class A (42,215) (40,339) (686,298) (545,405)
Shares redeemed (940,734) (693,665) (15,124,992) (9,518,629)
Net increase 2,378,501 1,244,277 $38,139,411 $17,058,924
13
NOTES TO FINANCIAL STATEMENTS (CONTINUED) ALLIANCE UTILITY INCOME FUND
_______________________________________________________________________________
SHARES AMOUNT
--------------------------- ------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
1999 1998 1999 1998
------------ ------------ -------------- --------------
CLASS C
Shares sold 904,340 297,300 $14,554,210 $ 4,120,508
Shares issued in
reinvestment of
dividends and
distributions 21,600 14,697 330,369 187,278
Shares redeemed (199,183) (87,264) (3,182,414) (1,199,168)
Net increase 726,757 224,733 $11,702,165 $ 3,108,618
ADVISOR CLASS
Shares sold 104,497 34,635 $ 1,672,400 $ 491,497
Shares issued in
reinvestment of
dividends and
distributions 1,609 228 24,901 2,921
Shares redeemed (51,377) (2,634) (842,669) (37,876)
Net increase 54,729 32,229 $ 854,632 $ 456,542
NOTE F: CONCENTRATION OF RISK
Investing in securities of foreign companies involves special risks which
include the possibility of future political and economic developments which
could adversely affect the value of such securities. Moreover, securities of
many foreign companies and their markets may be less liquid and their prices
more volatile than those of United States companies.
The investments in utility companies may be subject to a variety of risks
depending, in part, on such factors as the type of utility involved and its
geographic location. The revenues of domestic and foreign utilities companies
generally reflect the economic growth and development in the geographic areas
in which they do business.
NOTE G: 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 November 30, 1999.
14
FINANCIAL HIGHLIGHTS ALLIANCE UTILITY INCOME FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH YEAR
<TABLE>
<CAPTION>
CLASS A
-----------------------------------------------------------------
YEAR ENDED NOVEMBER 30,
---------------------------------------------------------------
1999 1998 1997 1996 1995
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $14.68 $12.48 $10.59 $10.22 $ 8.97
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a)(b) .36 .30 .32 .18 .27
Net realized and unrealized gain on
investment transactions 2.53 2.69 2.04 .65 1.43
Net increase in net asset value from
operations 2.89 2.99 2.36 .83 1.70
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.32) (.32) (.34) (.46) (.45)
Distributions from net realized gains (.34) (.47) (.13) -0- -0-
Total dividends and distributions (.66) (.79) (.47) (.46) (.45)
Net asset value, end of year $16.91 $14.68 $12.48 $10.59 $10.22
TOTAL RETURN
Total investment return based on net
asset value (c) 20.27% 24.99% 23.10% 8.47% 19.58%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's omitted) $29,841 $9,793 $4,117 $3,294 $2,748
Ratios to average net assets of:
Expenses, net of waivers/reimbursements 1.50% 1.50% 1.50% 1.50% 1.50%
Expenses, before waivers/reimbursements 1.73% 2.48% 3.55% 3.38% 4.86%
Net investment income 2.26% 2.23% 2.89% 1.67% 2.48%
Portfolio turnover rate 19% 16% 37% 98% 162%
</TABLE>
See footnote summary on page 18.
15
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE UTILITY INCOME FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH YEAR
<TABLE>
<CAPTION>
CLASS B
-----------------------------------------------------------------
YEAR ENDED NOVEMBER 30,
-----------------------------------------------------------------
1999 1998 1997 1996 1995
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $14.62 $12.46 $10.57 $10.20 $ 8.96
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a)(b) .25 .21 .25 .10 .18
Net realized and unrealized gain on
investment transactions 2.52 2.67 2.04 .67 1.45
Net increase in net asset value from
operations 2.77 2.88 2.29 .77 1.63
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.25) (.25) (.27) (.40) (.39)
Distributions from net realized gains (.34) (.47) (.13) -0- -0-
Total dividends and distributions (.59) (.72) (.40) (.40) (.39)
Net asset value, end of year $16.80 $14.62 $12.46 $10.57 $10.20
TOTAL RETURN
Total investment return based on net
asset value (c) 19.45% 24.02% 22.35% 7.82% 18.66%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's omitted) $80,806 $35,550 $14,782 $13,561 $10,988
Ratios to average net assets of:
Expenses, net of waivers/reimbursements 2.20% 2.20% 2.20% 2.20% 2.20%
Expenses, before waivers/reimbursements 2.44% 3.21% 4.28% 4.08% 5.34%
Net investment income 1.55% 1.56% 2.27% .95% 1.60%
Portfolio turnover rate 19% 16% 37% 98% 162%
</TABLE>
See footnote summary on page 18.
16
ALLIANCE UTILITY INCOME FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH YEAR
<TABLE>
<CAPTION>
CLASS C
-----------------------------------------------------------------
YEAR ENDED NOVEMBER 30,
-----------------------------------------------------------------
1999 1998 1997 1996 1995
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $14.65 $12.47 $10.59 $10.22 $ 8.97
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a)(b) .25 .21 .25 .11 .18
Net realized and unrealized gain on
investment transactions 2.51 2.69 2.03 .66 1.46
Net increase in net asset value from
operations 2.76 2.90 2.28 .77 1.64
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.25) (.25) (.27) (.40) (.39)
Distributions from net realized gains (.34) (.47) (.13) -0- -0-
Total dividends and distributions (.59) (.72) (.40) (.40) (.39)
Net asset value, end of year $16.82 $14.65 $12.47 $10.59 $10.22
TOTAL RETURN
Total investment return based on net
asset value (c) 19.34% 24.16% 22.21% 7.81% 18.76%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's omitted) $20,605 $7,298 $3,413 $3,376 $3,500
Ratios to average net assets of:
Expenses, net of waivers/reimbursements 2.20% 2.20% 2.20% 2.20% 2.20%
Expenses, before waivers/reimbursements 2.44% 3.22% 4.28% 4.07% 5.99%
Net investment income 1.56% 1.54% 2.27% .94% 1.88%
Portfolio turnover rate 19% 16% 37% 98% 162%
</TABLE>
See footnote summary on page 18.
17
FINANCIAL HIGHLIGHTS (CONTINUED) ALLIANCE UTILITY INCOME FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
ADVISOR CLASS
----------------------------------------------------
OCTOBER 2,
1996(D)
YEAR ENDED NOVEMBER 30, TO
------------------------------------- NOVEMBER 30,
1999 1998 1997 1996
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $14.70 $12.49 $10.59 $ 9.95
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a)(b) .42 .37 .36 .03
Net realized and unrealized gain on
investment transactions 2.52 2.66 2.04 .61
Net increase in net asset value from
operations 2.94 3.03 2.40 .64
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.35) (.35) (.37) -0-
Distributions from net realized gains (.34) (.47) (.13) -0-
Total dividends and distributions (.69) (.82) (.50) -0-
Net asset value, end of period $16.95 $14.70 $12.49 $10.59
TOTAL RETURN
Total investment return based on net
asset value (c) 20.62% 25.34% 23.57% 6.33%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $1,532 $523 $42 $33
Ratios to average net assets of:
Expenses, net of waivers/reimbursements 1.20% 1.20% 1.20% 1.20%(e)
Expenses, before waivers/reimbursements 1.41% 2.21% 3.29% 3.48%(e)
Net investment income 2.55% 2.83% 3.28% 4.02%(e)
Portfolio turnover rate 19% 16% 37% 98%
</TABLE>
(a) Net of fees waived and expenses reimbursed by the Adviser.
(b) Based on average shares outstanding.
(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 charges or contingent
deferred sales charges are not reflected in the calculation of total investment
return. Total investment return calculated for a period of less than one year
is not annualized.
(d) Commencement of distribution.
(e) Annualized.
18
REPORT OF INDEPENDENT ACCOUNTANTS ALLIANCE UTILITY INCOME FUND
_______________________________________________________________________________
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF ALLIANCE UTILITY INCOME FUND, INC.
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Alliance Utility Income Fund, Inc.
(the "Fund") at November 30, 1999, the results of its operations for the year
then ended, the changes in its net assets for each of the two years in the
period then ended and the financial highlights for each of the periods
indicated, in conformity with generally accepted accounting principles. These
financial statements and financial highlights (hereafter referred to as
"financial statements") 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 of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement
presentation. We believe that our audits, which included confirmation of
securities at November 30, 1999 by correspondence with the custodian and
brokers, provide a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
New York, New York
January 24, 2000
TAX INFORMATION (UNAUDITED)
_______________________________________________________________________________
In order to meet certain requirements of the Internal Revenue Code we are
advising you that the Fund paid $1,168,759 of capital gain distributions during
the fiscal year ended November 30, 1999, which are subject to a maximum tax
rate of 20%.
Shareholders should not use the above information to prepare their tax returns.
The information necessary to complete your income tax returns will be included
with your Form 1099 DIV which will be sent to you separately in January 2000.
19
ALLIANCE UTILITY INCOME FUND
_______________________________________________________________________________
BOARD OF DIRECTORS
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
KATHLEEN A. CORBET, SENIOR VICE PRESIDENT
PAUL C. RISSMAN, SENIOR VICE PRESIDENT
THOMAS J. BARDONG, VICE PRESIDENT
ANNIE TSAO, VICE PRESIDENT
EDMUND P. BERGAN, JR., SECRETARY
MARK D. GERSTEN, TREASURER & CHIEF FINANCIAL OFFICER
VINCENT S. NOTO, CONTROLLER
CUSTODIAN
STATE STREET BANK & TRUST COMPANY
225 Franklin Street
Boston, MA 02110
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
TRANSFER AGENT
ALLIANCE FUND SERVICES, INC.
P.O. Box 1520
Secaucus, NJ 07096-1520
Toll-Free 1-(800) 221-5672
INDEPENDENT ACCOUNTANTS
PRICEWATERHOUSECOOPERS LLP
1177 Avenue of the Americas
New York, NY 10036
(1) Member of the Audit Committee.
20
THE ALLIANCE FAMILY OF MUTUAL FUNDS
_______________________________________________________________________________
FIXED INCOME
Alliance Bond Fund
U.S. Government Portfolio
Corporate Bond Portfolio
Quality Bond Portfolio
Alliance Global Dollar Government Fund
Alliance Global Strategic Income Trust
Alliance High Yield Fund
Alliance Limited Maturity Government Fund
Alliance Mortgage Securities Income Fund
Alliance Multi-Market Strategy Trust
Alliance North American Government Income Trust
Alliance Short-Term U.S. Government Fund
TAX-FREE INCOME
Alliance Municipal Income Fund
California Portfolio
Insured California Portfolio
Insured National Portfolio
National Portfolio
New York Portfolio
Alliance Municipal Income Fund II
Arizona Portfolio
Florida Portfolio
Massachusetts Portfolio
Michigan Portfolio
Minnesota Portfolio
New Jersey Portfolio
Ohio Portfolio
Pennsylvania Portfolio
Virginia Portfolio
MONEY MARKET
AFD Exchange Reserves
GROWTH
The Alliance Fund
Alliance Global Environment Fund
Alliance Growth Fund
Alliance Premier Growth Fund
Select Investors Series - Premier Portfolio
GROWTH & INCOME
Alliance Balanced Shares
Alliance Conservative Investors Fund
Alliance Growth & Income Fund
Alliance Growth Investors Fund
Alliance Real Estate Investment Fund
Alliance Utility Income Fund
AGGRESSIVE GROWTH
Alliance Global Small Cap Fund
Alliance Health Care Fund
Alliance Quasar Fund
Alliance Technology Fund
INTERNATIONAL
Alliance All-Asia Investment Fund
Alliance Greater China '97 Fund
Alliance International Fund
Alliance International Premier Growth Fund
Alliance New Europe Fund
Alliance Worldwide Privatization Fund
INSTITUTIONAL
Premier Growth
Quasar
Real Estate Investment
CLOSED-END FUNDS
Alliance All-Market Advantage Fund
ACM Government Income Fund
ACM Government Opportunity Fund
ACM Government Securities Fund
ACM Government Spectrum Fund
ACM Managed Dollar Income Fund
ACM Managed Income Fund
ACM Municipal Securities Income Fund
Alliance World Dollar Government Fund
Alliance World Dollar Government Fund II
The Austria Fund
The Korean Investment Fund
The Spain Fund
The Southern Africa Fund
CASH MANAGEMENT SERVICES
Alliance Capital Reserves
Alliance Government Reserves
Alliance Institutional Reserves
Prime Portfolio
Government Portfolio
Tax-Free Portfolio
Treasury Portfolio
Trust Portfolio
Alliance Insured Account
Alliance Money Reserves
Alliance Municipal Trust
California Portfolio
Connecticut Portfolio
Florida Portfolio
General Portfolio
Massachusetts Portfolio
New Jersey Portfolio
New York Portfolio
Virginia Portfolio
Alliance Treasury Reserves
Alliance Money Market Fund
Prime Portfolio
General Municipal Portfolio
Government Portfolio
21
ALLIANCE UTILITY INCOME FUND
1345 Avenue of the Americas
New York, NY 10105
(800) 221-5672
ALLIANCE CAPITAL
THIS REPORT IS INTENDED SOLELY FOR DISTRIBUTION TO CURRENT SHAREHOLDERS
OF THE FUND.
R THESE REGISTERED SERVICE MARKS USED UNDER LICENSE FROM THE OWNER,
ALLIANCE CAPITAL MANAGEMENT L.P.
UIFAR1199
