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CLOSED END
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ACM Managed
Dollar Income Fund
Annual Report
September 30, 2000
[GRAPHIC OMITTED]
Alliance Capital[LOGO](R)
The Investment Professional's Choice
<PAGE>
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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<PAGE>
----------------------
LETTER TO SHAREHOLDERS
----------------------
LETTER TO SHAREHOLDERS
October 20, 2000
Dear Shareholder:
This report provides investment results, performance information and market
outlook for ACM Managed Dollar Income Fund (the "Fund") for the annual reporting
period ended September 30, 2000.
Investment Objectives and Policies
This closed-end fund is designed for investors who seek high current income and
capital appreciation over a period of years from investing in a portfolio of
high-yielding, high-risk U.S. and non-U.S. fixed income securities, denominated
in U.S. dollars, that we expect to benefit from improving economic and credit
fundamentals.
Investment Results
The following table shows how the Fund performed over the past six- and 12-month
periods ended September 30, 2000. For comparison, we have included the Fund's
benchmark, which is a composite consisting of 65% of the J.P. Morgan Emerging
Markets Bond Index Plus (JPM EMBI+--a standard measure of the performance of a
basket of unmanaged emerging market debt securities) and 35% of the Credit
Suisse First Boston High Yield Index (CSFB HYI--a standard measure of the
performance of a basket of unmanaged U.S. high yield debt securities.) We
compare the Fund's performance to the composite because it more closely
resembles the composition of the Fund's portfolio.
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INVESTMENT RESULTS*
Periods Ended September 30, 2000
-----------------------
Total Returns
-----------------------
6 Months 12 Months
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ACM Managed Dollar Income Fund -4.22% 9.99%
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J.P. Morgan Emerging Markets Bond Index Plus 5.67% 28.03%
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Credit Suisse First Boston High Yield Index 1.14% 1.92%
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Composite:
65%/35% (65% JPM EMBI+ + 35% CSFB HYI) 4.08% 18.89%
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* The Fund's investment results represent total returns for the periods
shown and are based on the net asset value (NAV) of the Fund as of
September 30, 2000. All fees and expenses related to the operation of the
Fund have been deducted. Returns for the Fund include the reinvestment of
any distributions paid during the period. Past performance is no guarantee
of future results.
The unmanaged J.P. Morgan Emerging Markets Bond Index Plus is composed of
dollar-denominated restructured sovereign bonds; a large percentage of the
index is made up of Brady bonds. The unmanaged Credit Suisse First Boston
High Yield Index is a measure of lower-rated, fixed-income,
non-convertible U.S. dollar denominated securities meeting certain
criteria developed by Credit Suisse designed to enable the index to
reflect the high yield market. The indices are unmanaged and reflect no
fees or expenses. An investor cannot invest directly in an
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ACM MANAGED DOLLAR INCOME FUND o 1
<PAGE>
----------------------
LETTER TO SHAREHOLDERS
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index, and its results are not indicative of any specific investment,
including ACM Managed Dollar Income Fund.
Additional investment results appear on pages 5-7.
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For both the six- and 12-month periods, the Fund underperformed the composite.
Fund performance suffered during the six-month period due to its relatively
large positions in U.S. corporate high yield securities and European corporate
high yield issues. Liquidity in many of the high yield issues held was low, as
high yield mutual funds have experienced significant outflows in 2000. Defaults,
as measured by Moody's for the trailing 12 months ending September 30, 2000,
were 5.13%, well above the historical average. Spreads widened significantly
over the last year with mid-quality high yield widening by 250 basis points. The
Fund has tended to overweight this sector of the market because of its
attractive current yields and long term risk/reward characteristics. As a less
diversified microcosm of the overall market, European high yield has done
significantly worse than the market as a whole. Performance of this subsector
has been more than 300 basis points worse than the negative returns of the high
yield market, according to Credit Suisse First Boston data.
In contrast, the emerging market sectors have done well during the period with
Russia, Venezuela and Bulgaria having particularly good performance. The Fund
was underweight in emerging markets and overweight in corporate high yield
relative to the composite, with a significant European corporate high yield
component. Given the difficult environment in high yield, this overweight
position was a significant drag on performance during the six-month period.
Market Overview
The global economy continued to improve during the six-month period ended
September 30, 2000. In the U.S., the economy remained strong, growing 4.8%
annualized in the first quarter and 5.3% during the second quarter. Unemployment
remained low and consumer confidence increased. Strong U.S. economic activity
prompted the Federal Reserve to increase official interest rates 50 basis points
from 6.00% to 6.50% early in the period. Recent signs of moderating economic
growth, however, shifted the Federal Reserve into a holding pattern late in the
reporting period. A spike in oil prices and a cooling off in the equity markets
helped to dampen the stronger growth exhibited earlier in the year.
The U.S. bond market, as represented by the Lehman Brothers Aggregate Bond
Index, posted a solid return of 4.80% during the six-month period. Among the
traditional sectors of the U.S. bond market, commercial mortgage-backed
securities posted the strongest return, 6.20%, followed by mortgage-backed
securities, 5.55%, and asset-backed securities, 5.04%. Corporate bonds returned
4.34% and U.S. Treasuries lagged but still posted a very respectable return,
4.15%, as a result of the Treasury buyback program.
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2 o ACM MANAGED DOLLAR INCOME FUND
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LETTER TO SHAREHOLDERS
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During the six-month period, short-term interest rates increased and
intermediate rates (two- to 10-year) de creased while the 30-year remained
essentially unchanged. The period was highlighted by volatility as bond
investors wrestled with a number of factors: 1) a less pessimistic outlook for
Federal Reserve policy, 2) continuing Treasury buybacks, 3) volatility in the
stock market, 4) a renewed appetite for corporate debt, 5) a sharp run-up in oil
prices, and 6) uncertainty about U.S. fiscal policy after the November
elections.
The high yield corporate sector, as represented by the CSFB HYI, returned 1.14%
for the six-month period. The market continued to be risk-averse with
substantive quality return distinctions. Double-B rated securities outperformed
single-B rated securities as investors focused on higher quality issues.
Double-B rated securities posted a 5.96% return, with single-B rated securities
returning 1.57%. Lower-rated high yield bonds fared worst, posting negative
returns.
Monetary tightening, historically high default rates, weak equity markets, and
mutual fund outflows dampened performance of this sector. Additionally, prices
weakened in the last two weeks of September as new issues coincided with falling
equity markets. The CSFB HYI, as of September 30, 2000, yielded 14.14%, or
8.29%, above Treasuries. The best performing industry sectors for the period
included the energy sector as well as real estate/building, gaming, media and
the interest rate sensitive utility sector. The worst performing sectors
included entertainment and retail. Issuance of high yield debt in the first
eight months of this year totaled approximately $32 billion, less than half of
the amount issued in the first eight months of 1999.
During the six-month period, emerging market debt performed well as global
economic growth improved and commodity prices firmed. The sector as represented
by the JPM EMBI+, returned a strong 5.67% during the period, outdistancing all
other fixed income sectors. Most individual country returns as represented by
individual country components of the JPM EMBI+, were positive during the period.
Ecuador posted the largest gain at 40.58%, based on continued progress in debt
re scheduling and reform efforts. Other individual outperformers included
Russia, at 10.82%, Venezuela, returning 10.80%, Mexico, with 6.76%, and Brazil,
at 6.24%. Argentina and Peru were the worst performers for the period, returning
-2.14% and -4.09%, respectively.
Outlook
Our outlook for financial markets assumes that the U.S. economy will finally
achieve a soft landing in 2001 as Federal Reserve rate increases impact the
economy. A short-lived restrengthening, however, could trigger disruptive
concerns about inflationary imbalances in the U.S. labor market and trade
deficit. Elsewhere, growth is stable or moderating. Further tightening by
central banks will be limited, and most bond markets should be range-bound.
Improving demand out side the United States is benefiting U.S. exports, but the
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ACM MANAGED DOLLAR INCOME FUND o 3
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----------------------
LETTER TO SHAREHOLDERS
----------------------
disequilibrium in U.S. external accounts is so great that downward pressure on
the dollar is a major risk at some point. Productivity should cap U.S. inflation
at 4% and eventually pull it lower in 2001.
With a relatively healthy economy and high yield securities yielding over 14%,
we believe high yield offers significant value. The stabilization of interest
rates could help this segment move in a positive direction. However, we expect
the high yield market will continue to experience some volatility due to the
possibility of weaker corporate earnings in many industry sectors.
--------------------------------------------------------------------------------
[PHOTO] John D.
Carifa
[PHOTO] Wayne D.
Lyski
Portfolio Manager, Wayne D. Lyski, oversees fixed-income investment at Alliance
and manages assets in both domestic and international markets.
Mr. Lyski has over 26 years of investment experience.
--------------------------------------------------------------------------------
The global economic environment remains fundamentally supportive of the emerging
markets and emerging countries' reform efforts, although the sector may exhibit
some volatility. Despite the inevitable variation across countries, we believe
that most emerging market governments remain committed to necessary economic and
financial reforms. Going forward, we believe this asset class will continue to
produce attractive returns, albeit with some measure of volatility.
Thank you for your continued interest and investment in ACM Managed Dollar
Income Fund. We look forward to reporting to you on market activity and the
Fund's investment results in the coming periods.
Sincerely,
/s/ John D. Carifa
John D. Carifa
Chairman
/s/ Wayne D. Lyski
Wayne D. Lyski
President
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4 o ACM MANAGED DOLLAR INCOME FUND
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PERFORMANCE UPDATE
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PERFORMANCE UPDATE
ACM MANAGED DOLLAR INCOME FUND (NAV)
GROWTH OF A $10,000 INVESTMENT
10/31/93* TO 9/30/00
[MOUNTAIN CHART OMITTED]
ACM Managed Dollar Income Fund: $14,568
Composite: $19,274
This chart illustrates the total value of an assumed $10,000 investment in ACM
Managed Dollar Income Fund at net asset value (NAV) (from 10/31/93 to 9/30/00)
as compared to the performance of an appropriate composite. The composite
represents 65% of the J.P. Morgan Emerging Markets Bond Index Plus (JPM EMBI+)
and 35% of the Credit Suisse First Boston High Yield Index (CSFB HYI). The
composite is from inception of the JPM EMBI+, which was 1/1/94. For the period
10/31/93 through 9/30/94, the J.P. Morgan Emerging Markets Bond Index was used
in place of the JPM EMBI+. The chart assumes the reinvestment of dividends and
capital gains. Past performance is not indicative of future results, and is not
representative of future gain or loss in capital value or dividend income.
The JPM EMBI+ is composed of dollar-denominated restructured sovereign bonds; a
large percentage of the index is made up of Brady bonds. The CSFB HYI is a
measure of lower-rated, fixed-income, non-convertible U.S. dollar denominated
securities meeting certain criteria developed by Credit Suisse designed to
enable the index to reflect the high yield market. The indices are unmanaged and
reflect no fees or expenses. When comparing ACM Managed Dollar Income Fund to
the composite shown above, you should note that no charges or expenses are
reflected in the performance of the composite. An investor cannot invest
directly in a composite, and its results are not indicative of any specific
investment, including ACM Managed Dollar Income Fund.
* Closest month-end after Fund's inception date of 10/22/93.
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ACM MANAGED DOLLAR INCOME FUND o 5
<PAGE>
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PERFORMANCE UPDATE
------------------
PERFORMANCE UPDATE
ACM MANAGED DOLLAR INCOME FUND (NAV)
HISTORY OF RETURNS
YEARLY PERIODS ENDED 9/30
[BAR CHART OMITTED]
ACM Managed Dollar Income Fund (NAV) - Yearly Periods Ended 9/30
--------------------------------------------------------------------------------
ACM Managed Dollar
Income Fund (NAV) Composite
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9/30/94* -11.64% n/a
9/30/95 6.11% 8.31%
9/30/96 40.86% 30.95%
9/30/97 33.64% 22.55%
9/30/98 -36.22% -16.62%
9/30/99 18.69% 16.33%
9/30/00 9.99% 18.89%
Past performance is no guarantee of future results. The Fund's investment
results represent total returns and are based on the Fund's net asset value
(NAV). All fees and expenses related to the operation of the Fund have been
deducted. Returns for the Fund include the reinvestment of any distribution paid
during the period.
The composite represents 65% of the J.P. Morgan Emerging Markets Bond Index Plus
(JPM EMBI+) and 35% of the Credit Suisse First Boston High Yield Index (CSFB
HYI). The JPM EMBI+ is composed of dollar-denominated restructured sovereign
bonds; a large percentage of the index is made up of Brady bonds. The CSFB HYI
is a measure of lower-rated, fixed-income, non-convertible U.S. dollar
denominated securities meeting certain criteria developed by Credit Suisse
designed to enable the index to reflect the high yield market. The indices are
unmanaged and reflect no fees or expenses. An investor cannot invest directly in
an index, and its results are not indicative of any specific investment,
including ACM Managed Dollar Income Fund.
* The Fund's return for the period ended 9/30/94 is from the Fund's
inception date of 10/22/93 through 9/30/94. The J.P. Morgan Emerging
Markets Bond Index Plus was not available (n/a) until 1/1/94. Therefore,
returns for the benchmark are unavailable for the period ended 9/30/94.
The benchmark's return for the period ended 9/30/94 is from 10/31/93
through 9/30/94.
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6 o ACM MANAGED DOLLAR INCOME FUND
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PORTFOLIO SUMMARY
-----------------
PORTFOLIO SUMMARY
September 30, 2000
INCEPTION DATE PORTFOLIO STATISTICS
10/22/93 Net Assets ($mil): $179.7
SECURITY TYPE
38.4% Sovereign
35.0% Corporate
13.2% Yankee Bonds
6.9% Brady Bonds [PIE CHART OMITTED]
3.0% Preferred Stock
1.2% Loan Participation
0.4% Common Stock/Warrants
1.9% Short-term
COUNTRY BREAKDOWN
40.9% United States
12.9% Brazil
10.6% Mexico
10.0% Russia [PIE CHART OMITTED]
4.1% Argentina
2.9% Venezuela
2.8% Netherlands
1.7% Canada
1.6% Bulgaria
1.6% Qatar
1.4% Hong Kong
1.2% Morocco
1.1% Colombia
1.1% Panama
1.1% United Kingdom
1.0% Ecuador
0.9% Turkey
0.9% Philippines
0.9% Trinidad & Tobago
0.9% South Korea
0.4% Peru
All data as of September 30, 2000. The Fund's security type and country
breakdowns are expressed as a percentage of total investments and may vary over
time.
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ACM MANAGED DOLLAR INCOME FUND o 7
<PAGE>
------------------------
PORTFOLIO OF INVESTMENTS
------------------------
PORTFOLIO OF INVESTMENTS
September 30, 2000
Principal
Amount
(000) U.S. $ Value
--------------------------------------------------------------------------------
SOVEREIGN DEBT OBLIGATIONS-60.0%
Sovereign Debt Securities-49.5%
Argentina-1.6%
Republic of Argentina
10.25%, 7/21/30 ......................... $ 3,500 $ 2,856,875
-----------
Brazil-12.3%
Republic of Brazil
14.50%, 10/15/09 ........................ 20,000 22,000,000
-----------
Colombia-1.4%
Republic of Colombia
8.375%, 2/15/27 ......................... 4,000 2,565,200
-----------
Ecuador-1.4%
Republic of Ecuador
12.00%, 11/15/12(a) ..................... 3,500 2,458,750
-----------
Mexico-10.1%
United Mexican States
Series XW
10.375%, 2/17/09 ........................ 12,500 13,562,500
United Mexican States
11.375%, 9/15/16 ........................ 4,000 4,640,000
-----------
18,202,500
-----------
Panama-1.4%
Republic of Panama
10.75%, 5/15/20 ......................... 2,500 2,440,750
-----------
Philippines-1.1%
Republic of Philippines
9.875%, 1/15/19 ......................... 2,500 2,050,000
-----------
Qatar-2.0%
State of Qatar
9.75%, 6/15/30(a) ....................... 2,000 2,055,000
9.75%, 6/15/30 .......................... 1,500 1,535,700
-----------
3,590,700
-----------
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8 o ACM MANAGED DOLLAR INCOME FUND
<PAGE>
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PORTFOLIO OF INVESTMENTS
------------------------
Principal
Amount
(000) U.S. $ Value
--------------------------------------------------------------------------------
Russia-12.9%
Ministry Finance of Russia
Series IV
3.00%, 5/14/03 .......................... $ 5,800 $ 3,299,040
Russian Federation
2.25%, 3/31/30(a) ....................... 12,250 4,731,562
12.75%, 6/24/28 ......................... 17,500 15,207,500
-----------
23,238,102
-----------
Trinidad & Tobago-1.1%
Republic of Trinidad & Tobago
9.75%, 7/01/20(a) ....................... 2,000 2,025,000
-----------
Turkey-1.2%
Republic of Turkey
11.875%, 1/15/30 ........................ 1,180 1,180,000
12.375%, 6/15/09 ........................ 960 985,200
-----------
2,165,200
-----------
Venezuela-3.0%
Republic of Venezuela
9.25%, 9/15/27 .......................... 8,000 5,410,400
-----------
Total Sovereign Debt Securities
(cost $88,109,088) ...................... 89,003,477
-----------
Collateralized Brady Bonds-8.3%
Brazil-4.4%
Federal Republic of Brazil
Discount FRN
7.625%, 4/15/24 ......................... 10,000 7,913,000
-----------
Bulgaria-2.1%
Republic of Bulgaria
Discount FRN
Series A
7.75%, 7/28/24 .......................... 5,000 3,825,000
-----------
Mexico-1.1%
United Mexican States
Discount FRN
7.515%, 12/31/19 ........................ 2,000 2,065,000
-----------
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ACM MANAGED DOLLAR INCOME FUND o 9
<PAGE>
------------------------
PORTFOLIO OF INVESTMENTS
------------------------
Principal
Amount
(000) U.S. $ Value
--------------------------------------------------------------------------------
Venezuela-0.7%
Republic of Venezuela
Discount FRN
Series W-A
7.5625%, 3/31/20 .......................... $ 1,500 $ 1,215,000
------------
Total Collateralized Brady Bonds
(cost $14,412,079) ........................ 15,018,000
------------
Non-Collateralized Brady Bonds-0.6%
Peru-0.6%
Republic of Peru FLIRB
3.75%, 3/07/17(b) ......................... 1,850 1,040,625
------------
Total Non-Collateralized Brady Bonds
(cost $993,104) ........................... 1,040,625
------------
Loan Participation -1.6%
Morocco-1.6%
Kingdom of Morocco
Loan Participation FRN
Series A
7.75%, 1/01/09
(cost $2,722,562) ......................... 3,100 2,789,662
------------
Total Sovereign Debt Obligations
(cost $106,236,833) ....................... 107,851,764
------------
U.S. CORPORATE DEBT
OBLIGATIONS-45.9%
Banking-1.1%
Bank United Corporation
8.875%, 5/01/07 ........................... 2,000 1,937,494
------------
Broadcasting & Media-1.5%
Allbritton Communications
Series B
8.875%, 2/01/08 ........................... 500 470,000
Fox Family Worldwide, Inc.
9.25%, 11/01/07 ........................... 2,000 1,905,000
10.25%, 11/01/07(c) ....................... 500 361,250
------------
2,736,250
------------
Building & Construction-0.4%
Morrison Knudsen Corporation
11.00%, 7/01/10(a) ........................ 650 656,500
------------
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10 o ACM MANAGED DOLLAR INCOME FUND
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PORTFOLIO OF INVESTMENTS
------------------------
Principal
Amount
(000) U.S. $ Value
--------------------------------------------------------------------------------
Cable-3.5%
Adelphia Communications
10.875%, 10/01/10 ....................... $ 450 $ 443,250
Charter Communication Holdings
10.25%, 1/15/10 ......................... 950 934,562
CSC Holdings, Inc.
9.25%, 11/01/05 ......................... 1,000 1,012,500
Echostar DBS Corp.
9.25%, 2/01/06 .......................... 1,000 991,250
Echostar DBS Corp.
9.375%, 2/01/09 ......................... 1,000 985,000
NTL Communications Corp.
Series B
11.50%, 10/01/08 ........................ 2,000 1,940,000
----------
6,306,562
----------
Chemicals-3.2%
Huntsman ICI Chemicals
10.125%, 7/01/09 ........................ 2,250 2,219,062
Lyondell Chemical Company
10.875%, 5/01/09 ........................ 1,800 1,748,250
Sterling Chemicals, Inc.
Series B
12.375%, 7/15/06 ........................ 1,250 1,268,750
Trans-Resources, Inc.
Series B
10.75%, 3/15/08 ......................... 3,750 543,750
----------
5,779,812
----------
Communications-Fixed-11.6%
Colo.com
13.875%, 3/15/10(a) ..................... 1,000 1,025,000
Econophone, Inc.
13.50%, 7/15/07 ......................... 4,000 2,220,000
Exodus Communications
11.625%, 7/15/10(a) ..................... 1,000 1,007,500
Global Crossing Holding, Ltd.
9.50%, 11/15/09 ......................... 2,000 2,000,000
Level 3 Communications
11.00%, 3/15/08 ......................... 1,750 1,680,000
McLeodUSA, Inc.
10.50%, 3/01/07(c) ...................... 1,000 825,000
Metromedia Fiber Network
10.00%, 12/15/09 ........................ 2,000 1,880,000
Nextel Partners, Inc.
11.00%, 3/15/10(a) ...................... 600 606,000
Nextlink Communications
10.50%, 12/01/09 ........................ 2,000 1,840,000
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ACM MANAGED DOLLAR INCOME FUND o 11
<PAGE>
------------------------
PORTFOLIO OF INVESTMENTS
------------------------
Principal
Amount
(000) U.S. $ Value
--------------------------------------------------------------------------------
PSINet, Inc.
11.00%, 8/01/09 ........................... $ 1,200 $ 786,000
Tritel PCS, Inc.
12.75%, 5/15/09(c) ........................ 1,250 850,000
Viatel, Inc.
11.50%, 3/15/09 ........................... 2,750 1,471,250
Williams Communications Group, Inc.
11.70%, 8/01/08(a) ........................ 2,000 1,920,000
Winstar Communications, Inc.
12.75%, 4/15/10(a) ........................ 2,545 1,857,850
14.75%, 4/15/10(a)(c) ..................... 3,000 975,000
-----------
20,943,600
-----------
Communications-Mobile-3.9%
Crown Castle Int'l Corp.
10.75%, 8/01/11 ........................... 1,000 1,032,500
Dobson/Sygnet Communications
12.25%, 12/15/08 .......................... 750 746,250
Iridium LLC Capital Corp.
Series B
14.00%, 7/15/05 (d) ....................... 5,000 200,000
Nextel Communications, Inc.
9.375%, 11/15/09 .......................... 1,500 1,470,000
Spectrasite Holdings, Inc.
12.875%, 3/15/10(c) ....................... 2,750 1,430,000
TeleCorp PCS, Inc.
10.625%, 7/15/10(a) ....................... 1,500 1,522,500
11.625%, 4/15/09(c) ....................... 1,000 682,500
-----------
7,083,750
-----------
Consumer Manufacturing-1.5%
Generac Portable Products, LLC
11.25%, 7/01/06 ........................... 4,000 2,615,000
-----------
Energy-2.6%
Chesapeake Energy Corp.
Series B
9.625%, 5/01/05 ........................... 1,000 997,500
EOTT Energy Partners LP
11.00%, 10/01/09 .......................... 1,500 1,590,000
Gothic Production Corp.
Series B
11.125%, 5/01/05 .......................... 1,000 1,052,500
PSEG Energy Holdings
9.125%, 2/10/04(a) ........................ 1,000 1,023,582
-----------
4,663,582
-----------
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12 o ACM MANAGED DOLLAR INCOME FUND
<PAGE>
------------------------
PORTFOLIO OF INVESTMENTS
------------------------
Principal
Amount
(000) U.S. $ Value
--------------------------------------------------------------------------------
Entertainment & Leisure-1.3%
Marvel Enterprises, Inc.
12.00%, 6/15/09 ......................... $ 3,000 $2,422,500
----------
Finance-0.6%
MBNA America Bank
7.75%, 9/15/05 .......................... 1,000 1,008,787
----------
Gaming-2.0%
Mandalay Resort Group
10.25%, 8/01/07(a) ...................... 1,000 1,036,250
Mohegan Tribal Gaming
8.75%, 1/01/09 .......................... 1,000 995,000
Park Place Entertainment
9.375%, 2/15/07 ......................... 1,500 1,530,000
----------
3,561,250
----------
Healthcare -1.5%
HCA - The Healthcare Company
8.75%, 9/01/10 .......................... 1,000 1,023,168
Iasis Healthcare Corporation
13.00%, 10/15/09 ........................ 800 830,000
Triad Hospitals Holdings
Series B
11.00%, 5/15/09 ...................... 750 772,500
----------
2,625,668
----------
Hotels & Lodging-0.3%
Host Marriott LP
9.25%, 10/01/07(a) ...................... 650 644,313
----------
Industrial-5.4%
Allied Waste North America
Series B
10.00%, 8/01/09 ......................... 1,800 1,579,500
Flowserve Corporation
12.25%, 8/15/10(a) ...................... 1,000 1,027,500
Global Telesystems, Inc.
9.875%, 2/15/05 ......................... 2,000 870,000
Kaiser Aluminum & Chemicals
9.875%, 2/15/02 ......................... 1,500 1,488,750
Russell-Stanley Holdings, Inc.
10.875%, 2/15/09 ........................ 5,000 1,875,000
Tenent Healthcare Corporation
7.875%, 1/15/03 ......................... 1,000 997,500
Universal Compression, Inc.
9.875%, 2/15/08(c) ...................... 1,250 971,875
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ACM MANAGED DOLLAR INCOME FUND o 13
<PAGE>
------------------------
PORTFOLIO OF INVESTMENTS
------------------------
Principal
Amount
(000) U.S. $ Value
--------------------------------------------------------------------------------
Waste Management, Inc.
6.875%, 5/15/09 ........................... $ 1,000 $ 913,214
-----------
9,723,339
-----------
Metal/Minerals-0.4%
Republic Technologies
13.75%, 7/15/09 ........................... 4,000 740,000
-----------
Paper Packaging-1.2%
Crown Paper Co.
11.00%, 9/01/05(d) ........................ 5,000 1,150,000
Riverwood International Corp.
10.625%, 8/01/07 .......................... 1,000 1,006,250
-----------
2,156,250
-----------
Plastics-0.9%
Foamex LP
13.50%, 8/15/05(e) ........................ 2,000 1,600,000
-----------
Technology-1.0%
Concentric Networks
12.75%, 12/15/07 .......................... 100 100,500
Viasystems, Inc.
9.75%, 6/01/07 ............................ 1,750 1,658,125
-----------
1,758,625
-----------
Utilities - Electric & Gas-2.0%
AES Corporation
9.375%, 9/15/10 ........................... 1,500 1,530,000
Cogentrix Energy, Inc.
8.75%, 10/15/08(a) ........................ 1,000 1,002,500
Dominion Resources
Series B
7.625%, 7/15/05 ........................... 1,000 1,014,911
-----------
3,547,411
-----------
Total U.S. Corporate Debt Obligations
(cost $107,336,747) ....................... 82,510,693
-----------
NON-U.S. CORPORATE DEBT
OBLIGATIONS-16.4%
Argentina-3.7%
IMPSA Metalurgicas Pescarm
9.50%, 5/31/02(a) ......................... 5,000 3,162,500
Supercanal Holdings, SA
12.00%, 11/07/02(d) ....................... 3,477 3,477,625
-----------
6,640,125
-----------
--------------------------------------------------------------------------------
14 o ACM MANAGED DOLLAR INCOME FUND
<PAGE>
------------------------
PORTFOLIO OF INVESTMENTS
------------------------
Principal
Amount
(000) U.S. $ Value
--------------------------------------------------------------------------------
Canada-2.3%
360Networks, Inc.
13.00%, 5/01/08 ............................. $ 700 $ 640,500
Doman Industries Limited
12.00%, 7/01/04 ............................. 2,000 1,997,500
Pierce Leahy Command Company
8.125%, 5/15/08 ............................. 1,500 1,410,000
-----------
4,048,000
-----------
Hong Kong-1.7%
Guangdong Enterprises
8.875%, 5/22/07(a)(d) ....................... 7,900 3,160,000
-----------
Korea-1.1%
Hanvit Bank
12.75%, 3/01/10(b) .......................... 2,000 2,030,000
-----------
Mexico-2.4%
Innova S. de R.L
12.875%, 4/01/07 ............................ 4,500 4,275,000
-----------
Netherlands-3.7%
Cellco Finance
15.00%, 8/01/05 ............................. 4,000 4,130,000
Hermes Europe Railtel
10.375%, 1/15/09 ............................ 500 252,500
United Pan-Europe Communications
Series B
13.75%, 2/01/10(c) .......................... 1,000 457,500
Versatel Telecom International
11.875%, 7/15/09 ............................ 2,000 1,740,000
-----------
6,580,000
-----------
United Kingdom-1.5%
Avecia Group PLC
11.00%, 7/01/09 ............................. 1,200 1,188,000
Comcast UK Cable Partners
11.20%, 11/15/07(c) ......................... 1,500 1,447,500
-----------
2,635,500
-----------
Total Non-U.S. Corporate Debt Obligations
(cost $29,428,323) .......................... 29,368,625
-----------
CONVERTIBLE PREFERRED STOCK-0.1%
PSINet, Inc.
7.00%(a)
(cost $600,000) ............................. 15,000 264,375
-----------
--------------------------------------------------------------------------------
ACM MANAGED DOLLAR INCOME FUND o 15
<PAGE>
------------------------
PORTFOLIO OF INVESTMENTS
------------------------
Shares or
Principal
Amount
(000) U.S. $ Value
--------------------------------------------------------------------------------
NON-CONVERTIBLE PREFERRED
STOCK-3.8%
CSC Holdings, Inc.
Series M
11.125%(f) ............................. 16,701 $ 1,774,481
Global Crossing Holding, Ltd
10.50%(g) .............................. 10,000 1,022,500
Intermedia Communication
Series B
13.50%(f) .............................. 775 744,000
Nextel Communications, Inc.
Series E
11.125%(f) ............................. 3,326 3,209,590
-------------
Total Non-Convertible Preferred Stock
(cost $6,951,492) ...................... 6,750,571
-------------
COMMON STOCK & WARRANTS-0.5%
OpTel, Inc. Common Stock(h)(i) ............ 8,500 85
Republic Technology
warrants, expiring 7/15/09(h)(j) ....... 4,000 40
Uniroyal Technology Corp.
warrants, expiring 6/01/03(h)(k) ....... 60,000 855,000
-------------
Total Common Stock & Warrants
(cost $593,730) ........................ 855,125
-------------
TIME DEPOSIT-2.4%
Societe Generale
6.688%, 10/02/00
(cost $4,400,000) ...................... $ 4,400 4,400,000
-------------
Total Investments-129.1%
(cost $255,547,125) .................... 232,001,153
Other assets less liabilities-(29.1%) ..... (52,347,988)
-------------
Net Assets-100% ........................... $ 179,653,165
-------------
--------------------------------------------------------------------------------
16 o ACM MANAGED DOLLAR INCOME FUND
<PAGE>
------------------------
PORTFOLIO OF INVESTMENTS
------------------------
(a) 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 September 30,
2000, these securities amounted to $32,161,682 or 17.9% of net assets.
(b) Coupon changes periodically based upon a predetermined schedule. Stated
interest rate in effect as of September 30, 2000.
(c) Indicates a security that has a zero coupon that remains in effect until a
predetermined date at which time the stated coupon rate becomes effective
until final maturity.
(d) Security is in default and is non-income producing.
(e) Illiquid security, valued at fair value (see Note A).
(f) Paid-in-kind preferred, quarterly stock payments.
(g) Paid-in-kind preferred, semi-annual stock payments.
(h) Non-income producing security.
(i) Common stock, par value is $0.01 per share.
(j) Each warrant entitles the holder to purchase one share of Class D Common
Stock at $0.01 per share. The warrants are exercisable until 7/15/09.
(k) Each warrant entitles the holder to purchase one share of Common Stock at
$2.1875 per share. The warrants are exercisable until 6/01/03.
Glossary of Terms:
FLIRB - Front Loaded Interest Reduction Bond.
FRN - Floating Rate Note.
--------------------------------------------------------------------------------
ACM MANAGED DOLLAR INCOME FUND o 17
<PAGE>
---------------------------------
STATEMENT OF ASSETS & LIABILITIES
---------------------------------
STATEMENT OF ASSETS & LIABILITIES
September 30, 2000
Assets
Investments in securities, at value (cost $255,547,125) ..... $ 232,001,153
Cash ........................................................ 81,303
Interest receivable ......................................... 7,262,689
Receivable for investment securities sold ................... 1,958,798
Dividend receivable ......................................... 71,692
Prepaid expenses and other assets ........................... 33,036
-------------
Total assets ................................................ 241,408,671
-------------
Liabilities
Loan payable ................................................ 57,500,000
Payable for investment securities purchased ................. 3,581,034
Interest payable ............................................ 290,104
Advisory fee payable ........................................ 163,694
Administrative fee payable .................................. 32,732
Accrued expenses and other liabilities ...................... 187,942
-------------
Total liabilities ........................................... 61,755,506
-------------
Net Assets .................................................. $ 179,653,165
=============
Composition of Net Assets
Common stock, at par ........................................ $ 221,964
Additional paid-in capital .................................. 296,226,749
Distributions in excess of net investment income ............ (728,523)
Accumulated net realized loss on
investment transactions .................................. (92,521,053)
Net unrealized depreciation of investments .................. (23,545,972)
-------------
$ 179,653,165
=============
Net Asset Value Per Share (based on 22,196,375
shares outstanding) ...................................... $8.09
=====
See notes to financial statements.
--------------------------------------------------------------------------------
18 o ACM MANAGED DOLLAR INCOME FUND
<PAGE>
-----------------------
STATEMENT OF OPERATIONS
-----------------------
STATEMENT OF OPERATIONS
Year Ended September 30, 2000
Investment Income
Interest .................................... $ 29,835,392
Dividends ................................... 739,726 $ 30,575,118
------------
Expenses
Advisory fee ................................ 1,867,443
Administrative fee .......................... 373,469
Loan fees ................................... 99,461
Printing .................................... 85,262
Custodian ................................... 79,317
Audit and legal ............................. 77,008
Transfer agency ............................. 43,312
Directors' fees and expenses ................ 36,773
Registration fees ........................... 32,363
Miscellaneous ............................... 28,023
------------
Total expenses before interest expense ...... 2,722,431
Interest expense ............................ 4,012,615
------------
Total expenses .............................. 6,735,046
------------
Net investment income ....................... 23,840,072
------------
Realized and Unrealized Gain (Loss)
on Investments
Net realized loss on investment
transactions ............................. (552,590)
Net realized gain on written option
transactions ............................. 48,678
Net change in unrealized
appreciation/depreciation
of investments ........................... (4,322,036)
------------
Net loss on investments ..................... (4,825,948)
------------
Net Increase in Net Assets from
Operations ............................... $ 19,014,124
============
See notes to financial statements.
--------------------------------------------------------------------------------
ACM MANAGED DOLLAR INCOME FUND o 19
<PAGE>
----------------------------------
STATEMENT OF CHANGES IN NET ASSETS
----------------------------------
STATEMENT OF CHANGES
IN NET ASSETS
Year Ended Year Ended
September 30, September 30,
2000 1999
============= =============
Increase (Decrease) in Net Assets
from Operations
Net investment income ....................... $ 23,840,072 $ 27,228,889
Net realized loss on investment and
written option transactions .............. (503,912) (56,696,741)
Net change in unrealized
appreciation/depreciation of
investments and other assets ............. (4,322,036) 63,688,493
------------- -------------
Net increase in net assets from operations .. 19,014,124 34,220,641
Dividends to Shareholders from
Net investment income ....................... (22,550,509) (27,228,889)
Distributions in excess of net investment
income ................................... -0- (2,893,503)
Tax return of Capital ....................... (3,123,919) -0-
------------- -------------
Net decrease in net assets resulting from
dividends to shareholders ................ (25,674,428) (30,122,392)
Common Stock Transactions
Reinvestment of dividends resulting in the
issuance of Common Stock ................. 1,695,549 3,599,304
------------- -------------
Total increase (decrease) ................... (4,964,755) 7,697,553
Net assets
Beginning of period ......................... 184,617,920 176,920,367
------------- -------------
End of period ............................... $ 179,653,165 $ 184,617,920
============= =============
See notes to financial statements.
--------------------------------------------------------------------------------
20 o ACM MANAGED DOLLAR INCOME FUND
<PAGE>
-----------------------
STATEMENT OF CASH FLOWS
-----------------------
STATEMENT OF CASH FLOWS
Year Ended September 30, 2000
Increase (Decrease) in Cash from
Operating Activities
Interest and dividends received .............. $ 26,002,792
Interest expense paid ........................ (3,896,091)
Operating expenses paid ...................... (2,707,484)
-------------
Net increase in cash from operating activities $ 19,399,217
Investing Activities
Purchases of long-term investments ........... (331,852,591)
Proceeds from disposition of long-term
investments ............................... 331,666,740
Proceeds from options written ................ 48,678
Sales of short-term investments, net ......... 7,273,000
-------------
Net increase in cash from investing
activities ................................ 7,135,827
Financing Activities(a)
Cash dividends and distributions paid ........ (26,454,245)
-------------
Net decrease in cash from financing
activities ................................ (26,454,245)
------------
Net increase in cash ......................... 80,799
Cash at beginning of period .................. 504
------------
Cash at end of period ........................ $ 81,303
============
--------------------------------------------------------------------------------
Reconciliation of Net Increase in
Net Assets from Operations to
Net Increase in Cash from
Operating Activities
Net increase in net assets from operations ... $ 19,014,125
Adjustments
Decrease in dividend and interest
receivable ................................ $ 41,008
Accretion of bond discount ................... (4,613,334)
Decrease in accrued expenses and
other assets .............................. 14,946
Increase in interest payable ................. 116,524
Net loss on investments ...................... 4,825,948
-------------
Total adjustments ............................ 385,092
-----------
Net Increase in Cash from
Operating Activities ...................... $ 19,399,217
============
(a) Non-cash financing activities not included herein consist of reinvestment
of dividends and distributions.
See notes to financial statements.
--------------------------------------------------------------------------------
ACM MANAGED DOLLAR INCOME FUND O 21
<PAGE>
-----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
NOTES TO FINANCIAL STATEMENTS
September 30, 2000
NOTE A
Significant Accounting Policies
ACM Managed Dollar Income Fund, Inc. (the "Fund") was incorporated under the
laws of the State of Maryland on August 10, 1993 and is registered under the
Investment Company Act of 1940 as a non-diversified, closed-end management
investment company. 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 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 sale price 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, and securities listed on a
foreign securities exchange whose operations are similar to the United States
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 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
Directors. 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. Listed put and call options purchased by the Fund are
valued at the last sale price. If there has been no sale on that day, such
securities will be valued at the closing bid prices on that day.
2. Taxes
It is the Fund's policy to meet the requirements of the Internal Revenue Code
applicable to regulated investment companies and to distribute substantially all
of its investment company taxable income and net realized gains, if
applicable, to shareholders. There fore, no provisions for federal income or
excise taxes are required.
3. Investment Income and Investment Transactions
Interest income is accrued daily. Dividend income is recorded on the ex-dividend
date. Investment transactions are accounted for on the date the investments are
purchased or sold. Investment gains and losses are deter-
--------------------------------------------------------------------------------
22 o ACM MANAGED DOLLAR INCOME FUND
<PAGE>
-----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
mined on the identified cost basis. The Fund accretes discounts as adjustments
to interest income.
4. Dividends and Distributions
Dividends and distributions to shareholders are re-corded 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 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 a tax
return of capital, resulted in a decrease in distributions in excess of net
investment income and a corresponding decrease in additional paid-in-capital.
This reclassification had no effect on net assets.
NOTE B
Advisory and Administrative Fees
Under the terms of the Investment Advisory Agreement, the Fund pays Alliance
Capital Management, L.P. (the "Adviser") an advisory fee equal to an annualized
rate of .75 of 1% of the average adjusted weekly net assets of the Fund during
the month.
Under the terms of a Shareholder Inquiry Agency Agreement with Alliance Fund
Services, Inc. ("AFS"), an affiliate of the Adviser, the Fund reimburses AFS for
costs relating to servicing phone inquiries for the Fund. The Fund reimbursed
AFS $2,000 during the year ended September 30, 2000.
Under the terms of an Administration Agreement, the Fund pays Princeton
Administrators, L.P (the "Administrator") a monthly fee equal to the annualized
rate of .15 of 1% of the average adjusted weekly net assets of the Fund during
the month. The Administrator prepares financial and regulatory reports for the
Fund and provides clerical and other services.
NOTE C
Investment Transactions
Purchases and sales of investment securities (excluding short-term investments,
options and U.S. government securities) aggregated $319,426,571 and
$330,268,514, respectively, for the year ended September 30, 2000. There were no
purchases or sales of U.S. government or government agency obligations for the
year ended September 30, 2000.
At September 30, 2000, the cost of investments, for federal income tax purposes
was $255,696,633. According, gross unrealized appreciation of investments was
$5,221,649 and gross unrealized depreciation of investments was $28,917,129,
resulting in net unrealized depreciation of $23,695,480.
At September 30, 2000, the Fund had a capital loss carryforward of $82,090,920
of which $57,455,739 expires in the year 2007 and $24,635,181 expires in the
year 2008.
Capital losses incurred after October 31 ("post-October" losses) within the
taxable year are deemed to arise on the
--------------------------------------------------------------------------------
ACM MANAGED DOLLAR INCOME FUND o 23
<PAGE>
-----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
first business day of the Fund's next taxable year. The Fund incurred and will
elect to defer net capital losses of $10,280,625 during the fiscal year. These
carryover losses may be used to offset future capital gains. To the extent they
are so used, future capital gains will not be distributed to shareholders until
they exceed available capital loss carryovers.
1. Options Transactions
For hedging and investment purposes, the Fund purchases and writes (sells) put
and call options on U.S. and foreign securities exchanges and over-the-counter
markets.
The risk associated with purchasing an option is that the Fund pays a premium
whether or not the option is exercised. Additionally, the Fund bears the risk of
loss of the premium and change in market value should the counterparty not
perform under the contract. Put and call options purchased are accounted for in
the same manner as portfolio securities. The cost of securities acquired through
the exercise of call options is increased by premiums paid. The proceeds from
securities sold through the exercise of put options are decreased by the
premiums paid.
When the Fund writes an option, the premium received by the Fund is re corded as
a liability and is subsequently adjusted to the current market value of the
option written. Premiums received from writing options which expire unexercised
are recorded by the Fund on the expiration date as realized gains from options
written. The difference between the premium and the amount paid on effecting a
closing purchase transaction, including brokerage commissions, is also treated
as a realized gain, or if the premium is less than the amount paid for the
closing purchase transaction, as a realized loss. If a call option is exercised,
the premium is added to the proceeds from the sale of the underlying security in
determining whether the Fund has realized a gain or loss. If a put option is
exercised, the premium reduces the cost basis of the security purchased by the
Fund. In writing an option, the Fund bears the market risk of an unfavorable
change in the price of the security underlying the written option. Exercise of
an option written by the Fund could result in the Fund selling or buying a
security at a price different from the current market value.
Transactions in options written for the year ended September 30, 2000 were as
follows:
Number of
Contracts Premiums
========= ========
Options outstanding at the beginning of year ...... -0- $ -0-
Options written ................................... 100,000 48,678
Options terminated in closing purchase
transactions ................................... -0- -0-
Options expired ................................... (100,000) (48,678)
-------- --------
Options outstanding at September 30, 2000 ......... -0- $ -0-
======== ========
--------------------------------------------------------------------------------
24 o ACM MANAGED DOLLAR INCOME FUND
<PAGE>
-----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
2. Interest Rate Swap Agreements
The Fund may enter into interest rate swaps on sovereign debt obligations to
protect itself from interest rate fluctuations on the underlying debt
instruments and for investment purposes. A swap is an agreement that obligates
two parties to exchange a series of cash flows at specified intervals based
upon or calculated by reference to changes in specified prices or rates for a
specified amount of an underlying asset. The payment flows are usually netted
against each other, with the difference being paid by one party to the other.
Risks may arise as a result of the failure of another party to the swap contract
to comply with the terms of the swap contract. The loss incurred by the failure
of a counterparty is generally limited to the net interest payment to be
received by the Fund, and/or the termination value at the end of the contract.
Therefore, the Fund considers the creditworthiness of each counterparty to a
swap contract in evaluating potential credit risk. Additionally, risks may
arise from unanticipated movements in interest rates or in the value of the
underlying securities.
The Fund records a net receivable or payable on a daily basis for the net
interest income or expense expected to be received or paid in the interest
period. Net interest received or paid on these contracts is recorded as interest
income (or as an offset to interest income). Fluctuations in the value of swap
contracts are recorded for financial statement purposes as net unrealized
appreciation or depreciation on interest rate swap contracts.
At September 30, 2000, the Fund had no outstanding interest rate swap contracts.
NOTE D
Capital Stock
There are 300,000,000 shares of $.01 par value capital stock authorized. Of the
22,196,375 shares of Common Stock outstanding at September 30, 2000, the Adviser
owned 7,100 shares.
During the year ended September 30, 2000 and for the year ended September 30,
1999 the Fund issued 193,135 and 380,881 shares, respectively, in connection
with the dividend reinvestment plan.
NOTE E
Bank Borrowing
The Fund entered into a Revolving Credit Agreement with Citibank, N.A. which was
renewed on March 23, 1998. The maximum credit available is $95,000,000 and the
amount outstanding as of September 30, 2000 was $57,500,000 with an average
interest rate of 6.87 %. Interest payments on current borrowings are based on
the London Interbank Offered Rate plus a premium. The average daily amount of
the loan outstanding during the year ended September 30, 2000 was approximately
$57,500,000 with a related weighted average annualized interest rate of 6.98%.
The Fund is also obligated to pay Citibank, N.A. a facility fee computed at the
rate of .125 of 1% per annum on the average daily unused portion of the
revolving credit.
--------------------------------------------------------------------------------
ACM MANAGED DOLLAR INCOME FUND o 25
<PAGE>
-----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
NOTE F
Concentration of Risk
Investing in securities of foreign companies and foreign governments involves
special risks which include the possibility of future political and economic
development which could adversely affect the value of such securities. Moreover,
securities of many foreign companies and foreign governments and their markets
may be less liquid and their prices more volatile than those of comparable U.S.
companies and the United States Government. The Fund invests in the sovereign
debt obligations of countries that are considered emerging market countries at
the time of purchase. Therefore, the Fund is susceptible to governmental factors
and economic and debt restructuring developments adversely affecting the
economies of these emerging market countries. In addition, these debt
obligations may be less liquid and subject to greater volatility than debt
obligations of more developed countries.
--------------------------------------------------------------------------------
26 o ACM MANAGED DOLLAR INCOME FUND
<PAGE>
--------------------
FINANCIAL HIGHLIGHTS
--------------------
FINANCIAL HIGHLIGHTS
Selected Data For A Share Of Common Stock Outstanding Throughout Each Period
<TABLE>
<CAPTION>
Year Ended September 30,
--------------------------------------------------------------
2000 1999 1998 1997 1996
--------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ...... $ 8.39 $ 8.18 $ 15.84 $ 13.08 $ 10.42
--------------------------------------------------------------
Income From Investment
Operations
Net investment income ...... 1.08(a) 1.25(a) 1.41(a) 1.45(a) 1.27
Net realized and unrealized
gain (loss) on investment
and option transactions .. (.22) .34 (6.30) 2.62 2.65
--------------------------------------------------------------
Net increase (decrease) in
net asset value from
operations ............... .86 1.59 (4.89) 4.07 3.92
--------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income ........ (1.02) (1.25) (1.56) (1.31) (1.26)
Distributions in excess from
net investment income .... -0- (.13) -0- -0- -0-
Distributions from net
realized gains on
investments .............. -0- -0- (1.21) -0- -0-
Tax return of capital
distribution ............. (.14) -0- -0- -0- -0-
--------------------------------------------------------------
Total dividends and
distributions ............ (1.16) (1.38) (2.77) (1.31) (1.26)
--------------------------------------------------------------
Net assets value,
end of period ............ $ 8.09 $ 8.39 $ 8.18 $ 15.84 $ 13.08
--------------------------------------------------------------
Market value, end of period $ 8.50 $ 10.25 $ 9.3125 $ 15.00 $ 11.75
==============================================================
Total Return(b)
Total investment return
based on:
Market value ............. (5.41)% 27.06% (23.44)% 40.87% 33.53%
Net asset value .......... 9.99% 18.69% (36.22)% 33.64% 40.86%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) .......... $179,653 $184,618 $176,920 $336,514 $370,546
Ratio of expenses to
average net assets ....... 2.70% 2.46% 2.56% 2.36% 2.59%
Ratio of expenses to average
net assets excluding
interest expense(c) ...... 1.09% 1.11% 1.03% 1.01% 1.07%
Ratio of net investment
income to average net
assets ................... 9.55% 11.27% 8.19% 8.00% 8.79%
Portfolio turnover rate .... 134% 223% 208% 274% 443%
</TABLE>
See footnote summary on page 28.
--------------------------------------------------------------------------------
ACM MANAGED DOLLAR INCOME FUND o 27
<PAGE>
--------------------
FINANCIAL HIGHLIGHTS
--------------------
(a) Based on average shares outstanding.
(b) Total investment return is calculated assuming a purchase of common stock
on the opening of the first day and a sale on the closing of the last day
of the period reported. Dividends and distributions, if any, are assumed
for purposes of this calculation, to be reinvested at prices obtained
under the Fund's dividend reinvestment plan. Generally, total investment
return based on net asset value will be higher than the total investment
return based on market value in periods where there is an increase in the
discount or a decrease in the premium of the market value to the net asset
value from the beginning to the end of such periods. Conversely, total
investment return based on net asset value will be lower than total
investment return based on market value in periods where there is a
decrease in the discount or an increase in the premium of the market value
to the net asset value from the beginning to the end of such periods.
Total investment return calculated for a period of less than one year is
not annualized.
(c) Net interest expense of 1.61%, 1.35%, 1.53%, 1.35%, and 1.52%,
respectively, on loan agreements (See Note E).
--------------------------------------------------------------------------------
28 o ACM MANAGED DOLLAR INCOME FUND
<PAGE>
---------------------------
REPORT OF ERNST & YOUNG LLP
INDEPENDENT AUDITORS
---------------------------
REPORT OF ERNST & YOUNG LLP
INDEPENDENT AUDITORS
To the Shareholders and Board of
Directors ACM Managed Dollar
Income Fund, Inc.
We have audited the accompanying statement of assets and liabilities of ACM
Managed Dollar Income Fund, Inc. (the "Fund"), including the portfolio of
investments, as of September 30, 2000, and the related statements of operations
and cash flows for the year then ended, the statement of changes in net assets
for each of the two years in the period then ended, and the financial highlights
for each of the periods indicated therein. These financial statements and
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with 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 ACM
Managed Dollar Income Fund, Inc. at September 30, 2000, the results of its
operations and its cash flows 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 indicated periods, in conformity with accounting
principles generally accepted in the United States.
/s/ Ernst & Young LLP
New York, New York
November 6, 2000
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ACM MANAGED DOLLAR INCOME FUND o 29
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ADDITIONAL INFORMATION
----------------------
ADDITIONAL INFORMATION
Shareholders whose shares are registered in their own names may elect to be
participants in the Dividend Reinvestment and Cash Purchase Plan (the "Plan"),
pursuant to which dividends and capital gain distributions to shareholders will
be paid in or reinvested in additional shares of the Fund. State Street Bank and
Trust Company (the "Agent") will act as agent for participants under the Plan.
Shareholders whose shares are held in the name of a broker or nominee should
contact such broker or nominee to determine whether or how they may participate
in the Plan.
If the Board declares an income distribution or determines to make a capital
gain distribution payable either in shares or in cash, as holders of the Common
Stock may have elected, non-participants in the Plan will receive cash and
participants in the Plan will receive the equivalent in shares of Common Stock
of the Fund valued as follows:
(i) If the shares of Common Stock are trading at net asset value or at a
premium above net asset value at the time of valuation, the Fund will
issue new shares at the greater of net asset value or 95% of the then
current market price.
(ii) If the shares of Common Stock are trading at a discount from net
asset value at the time of valuation, the Plan Agent will receive the
dividend or distribution in cash and apply it to the purchase of the
Fund's shares of Common Stock in the open market on the New York Stock Ex
change or elsewhere, for the participants' accounts. Such purchases will
be made on or shortly after the payment date for such dividend or
distribution and in no event more than 30 days after such date except
where temporary curtailment or suspension of purchase is necessary to
comply with Federal securities laws. If, before the Plan agent has
completed its purchases, the market price exceeds the net asset value of a
share of Common Stock, the average purchase price per share paid by the
Plan agent may exceed the net asset value of the Fund's shares of Common
Stock, resulting in the acquisition of fewer shares than if the dividend
or distribution had been paid in shares issued by the Fund.
The Agent will maintain all shareholders' accounts in the Plan and furnish
written confirmation of all transactions in the account, including information
needed by shareholders for tax records. Shares in the account of each Plan
participant will be held by the Agent in non-certificate form in the name of the
participant, and each shareholder's proxy will include those shares purchased or
received pursuant to the Plan.
There will be no charges with respect to shares issued directly by the Fund to
satisfy the dividend reinvestment requirements. However, each participant will
pay a pro-rata share of brokerage commissions incurred with respect to the
Agent's open market purchases of shares. In each case, the cost per share of
shares purchased for each shareholder's account will be the average cost,
including brokerage commissions,
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30 o ACM MANAGED DOLLAR INCOME FUND
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ADDITIONAL INFORMATION
----------------------
of any shares purchased in the open market plus the cost of any shares issued by
the Fund.
The automatic reinvestment of dividends and distributions will not relieve
participants of any income taxes that may be payable (or required to be
withheld) on dividends and distributions.
Experience under the Plan may indicate that changes are desirable. Accordingly,
the Fund reserves the right to amend or terminate the Plan as applied to any
voluntary cash payments made and any dividend or distribution paid subsequent to
written notice of the change sent to participants in the Plan at least 90 days
before the record date for such dividend or distribution. The Plan may also be
amended or terminated by the Agent on at least 90 days written notice to
participants in the Plan. All correspondence concerning the Plan should be
directed to the Agent at State Street Bank and Trust Company, P.O. Box 366,
Boston, Massachusetts 02101.
Since the filing of the most recent amendment to the Fund's registration
statement with the Securities and Ex change Commission, there have been (i) no
material changes in the Fund's investment objectives or policies, (ii) no
changes to the Fund's charter or by-laws that would delay or prevent a change of
control of the Fund, (iii) no material changes in the principal risk factors
associated with investment in the Fund, and (iv) no change in the person
primarily responsible for the day-to-day management of the Fund's portfolio, who
is Wayne D. Lyski, the President of the Fund.
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ACM MANAGED DOLLAR INCOME FUND o 31
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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
Governments or corporations issue bonds 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.
Consumer Price Index (CPI)
An index that measures the cost of living. The CPI is published by the U.S.
Bureau of Labor Statistics.
credit rating
Credit ratings are issued by independent organizations, such as the Standard &
Poor's Ratings group or Moody's Investors Service. 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.
sector
Refers to a distinct part of the economy, for example, the technology sector.
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.
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32 o ACM MANAGED DOLLAR INCOME FUND
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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.
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ACM MANAGED DOLLAR INCOME FUND o 33
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BOARD OF DIRECTORS
------------------
BOARD OF DIRECTORS
John D. Carifa, Chairman
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)
Robert C. White(1)
OFFICERS
Wayne D. Lyski, President
Kathleen A. Corbet, Senior Vice President
Gregory Dube, Senior Vice President
Paul J. DeNoon, Vice President
Vicki L. Fuller, Vice President
Edmund P. Bergan, Jr., Secretary
Mark D. Gersten, Treasurer & Chief Financial Officer
Juan J. Rodriguez, Controller
Administrator
Princeton Administrators, L.P.
P.O. Box 9095
Princeton, NJ 08543-9095
Common Stock
Custodian, Dividend Paying Agent,
Transfer Agent And Registrar
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
Legal Counsel
Seward & Kissel LLP
One Battery Park Plaza
New York, NY 10004
Preferred Stock:
Dividend Paying Agent,
Transfer Agent And Registrar
IBJ Schroder Bank & Trust Co.
1 State Street
New York, NY 10004
Independent Auditors
Ernst & Young LLP
787 Seventh Avenue
New York, NY 10019
(1) Member of the Audit Committee
Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940 that the Fund may purchase at market prices from time
to time shares of its Common Stock in the open market.
This report, including the financial statements therein, is transmitted to
the shareholders of ACM Managed Dollar Income Fund for their information.
This is not a prospectus, circular or representation intended for use in
the purchase of shares of the Fund or any securities mentioned in this
report.
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34 o ACM MANAGED DOLLAR INCOME FUND
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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.
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ACM MANAGED DOLLAR INCOME FUND o 35
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SUMMARY OF GENERAL INFORMATION
------------------------------
SUMMARY OF GENERAL INFORMATION
Shareholder Information
The daily net asset value of the Fund's shares is available from the Fund's
Transfer Agent by calling (800) 426-5523. The Fund also distributes its daily
net asset value to various financial publications or independent orga nizations
such as Lipper Analytical Services, Inc., Morningstar, Inc. and Bloomberg. Daily
market prices for the Fund's shares are published in the New York Stock Exchange
Composite Transaction section of newspapers each day. The Fund's NYSE trading
symbol is "ADF." Weekly comparative net asset value (NAV) and market price
information about the Fund is published each Monday in The Wall Street Journal,
each Sunday in The New York Times and each Saturday in Barron's and other
newspapers in a table called "Closed-End Funds."
Dividend Reinvestment Plan
Pursuant to the Fund's Dividend Rein vestment Plan shareholders whose shares are
registered in their own names may elect to have all distributions reinvested
automatically in additional shares of the Fund by State Street Bank & Trust
Company, as agent under the Plan. Shareholders whose shares are held in the name
of a broker or nominee should contact the broker or nominee for details. All
distributions to investors who elect not to participate in the Plan will be aid
by check mailed directly to the record holder by or under the direction of State
Street Bank & Trust Company. For questions concerning Shareholder account
information, or if you would like a brochure describing the Dividend
Reinvestment Plan, please call State Street Bank and Trust Company at (800)
219-4218.
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36 o ACM MANAGED DOLLAR INCOME FUND
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ACM Managed Dollar Income Fund
1345 Avenue of the Americas
New York, NY 10105
(R) These registered service marks used under license from the owner, Alliance
Capital Management L.P.
MDIAR900
