UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-07964
ACM MANAGED DOLLAR INCOME FUND, INC.
(Exact name of registrant as specified in charter)
1345 Avenue of the Americas, New York, New York 10105
(Address of principal executive offices) (Zip code)
Mark R. Manley
AllianceBernstein L.P.
1345 Avenue of the Americas
New York, New York 10105
(Name and address of agent for service)
Registrant's telephone number, including area code: (800) 221-5672
Date of fiscal year end: September 30, 2006
Date of reporting period: September 30, 2006
ITEM 1. REPORTS TO STOCKHOLDERS.
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ANNUAL REPORT
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ACM Managed Dollar Income Fund
Annual Report
September 30, 2006
[LOGO]
ALLIANCEBERNSTEIN
INVESTMENTS
Investment Products Offered
o Are Not FDIC Insured
o May Lose Value
o Are Not Bank Guaranteed
You may obtain a description of the Fund's proxy voting policies and
procedures, and information regarding how the Fund voted proxies relating to
portfolio securities during the most recent 12-month period ended June 30,
without charge. Simply visit AllianceBernstein's web site at
www.alliancebernstein.com, or go to the Securities and Exchange Commission's
(the "Commission") web site at www.sec.gov, or call AllianceBernstein(R) at
(800) 227-4618.
The Fund files its complete schedule of portfolio holdings with the Commission
for the first and third quarters of each fiscal year on Form N-Q. The Fund's
Forms N-Q are available on the Commission's web site at www.sec.gov. The Fund's
Forms N-Q may also be reviewed and copied at the Commission's Public Reference
Room in Washington, DC; information on the operation of the Public Reference
Room may be obtained by calling (800) SEC-0330.
AllianceBernstein Investments, Inc. is an affiliate of AllianceBernstein L.P.,
the manager of the AllianceBernstein funds, and is a member of the NASD.
AllianceBernstein(R) and the AB Logo are registered trademarks and service
marks used by permission of the owner, AllianceBernstein L.P.
November 14, 2006
Annual Report
This report provides management's discussion of fund performance for ACM
Managed Dollar Income Fund (the "Fund") for the annual reporting period ended
September 30, 2006. The Fund is a closed-end fund that trades under the New
York Stock Exchange symbol "ADF".
Investment Objective and Policies
This closed-end fund is designed for investors who seek high current income and
capital appreciation over a period of years. The Fund normally invests at least
35% of its assets in U.S. corporate fixed-income securities. The balance of the
Fund's investment portfolio will be invested in fixed-income securities issued
or guaranteed by foreign governments and non-U.S. corporate fixed-income
securities. Substantially all of the Fund's assets will be invested in
high-yield, high-risk securities rated below investment-grade and considered to
be predominantly speculative. For more information regarding the Fund's risks,
please see "A Word About Risk" on pages 4-5 and "Note E--Risks Involved in
Investing in the Fund" of the Notes to Financial Statements on page 35.
Investment Results
The table on page 6 shows the Fund's performance compared to its new composite
benchmark, a 65%/35% blend of the J.P. Morgan Emerging Markets Bond Index
Global (JPM EMBI Global) and the Credit Suisse First Boston High Yield (CSFBHY)
Index, respectively, for the six- and 12-month periods ended September 30,
2006. In addition, performance for the Fund's old composite benchmark, a
65%/35% blend of the J.P. Morgan Emerging Markets Bond Index Plus (JPM EMBI+)
and the Credit Suisse First Boston High Yield (CSFBHY) Index, respectively, for
the same time periods is also included. The JPM EMBI Global is a more
appropriate index for the Fund because it contains a broader representation of
the emerging market debt universe than the JPM EMBI+. The JPM EMBI Global
tracks total returns for U.S. dollar-denominated debt instruments issued by
emerging market sovereign and quasi-sovereign entities: Brady bonds, loans,
Eurobonds. The JPM EMBI+ is a standard measure of the performance of a basket
of unmanaged emerging market debt securities. The CSFBHY Index is a standard
measure of the performance of a basket of unmanaged U.S. high yield debt
securities. The Fund's performance is compared to a composite benchmark of both
indices because this new composite more closely resembles the composition of
the Fund's portfolio.
The Fund underperformed its new composite benchmark for both the six- and
12-month periods ended September 30, 2006. Within the Fund's high yield
allocation, underweights to the automotive and airline industries, both of
which outperformed during the annual period, detracted from relative
performance. Security selection within the lodging/leisure and financial
industries, as well as regional homebuilders within the housing industry, also
detracted from performance. Contributing positively to relative performance
within high yield was security selection within
ACM MANAGED DOLLAR INCOME FUND o 1
the automotive industry as well as the Fund's pipeline subsidiary holdings
within the utilities industry.
Within the Fund's emerging market allocation, contributing positively to
performance for both the six- and 12-month periods were overweight positions in
Latin America, particularly Brazil and Argentina. Brazil's stable growth,
central bank easing and debt buy backs helped support its bond prices.
Argentina benefited during the year from a completion of its debt restructuring
and very strong economic growth. Both Brazil and Argentina were top performing
countries within the Fund's benchmark.
Detracting from performance within the Fund's emerging market allocation for
both the six- and 12-month periods was security selection in Argentina.
Although the Fund's country selection of Argentina contributed positively to
performance, its shorter-maturity bond selection in the country detracted from
performance as Argentina's longer-duration bonds vastly outperformed.
Leverage had a minimal impact on the Fund's overall performance relative to its
new composite benchmark during both the six and 12-month periods ended
September 30, 2006.
Market Review and Investment Strategy
U.S. dollar denominated emerging market debt posted the strongest returns
within fixed-income sectors for the 12-month reporting period, returning 7.81%,
according to the JPM EMBI Global. Dollar reserve accumulation in major emerging
market countries as well as positive supply-demand technicals continued to
support that sector. Performance during the annual period was not even,
however. Emerging market debt, along with high yield and the equity market,
suffered periods of negative performance in the first half of 2006 due to the
cumulative effects of U.S. interest rate hikes. During the year, the U.S.
Federal Reserve (the "Fed") continued to raise official rates an additional
1.5% in quarter point increments.
Emerging market debt, along with other asset classes, bounced back strongly in
the third quarter of 2006, sparked by evidence of a cooling U.S. economy led by
a slowdown in the housing market, fading inflation concerns and the first U.S.
monetary-policy shift in more than two years. The Fed left the Fed funds rate
unchanged at 5.25% in August and September, following 425 basis points of
consecutive rate hikes.
All 31 emerging countries represented within the JPM EMBI Global posted
positive returns for the 12-month period ended September 30, 2006 with Latin
countries, returning 9.59%, outperforming the non-Latin region which returned
5.46%. Outperforming countries for the year included Argentina at 22.53%, the
Philippines at 16.64% and Brazil at 14.59%. Underperforming countries included
Hungary at 1.04%, the Ukraine at 2.25% and Russia at 2.28%. Emerging market
spreads tightened 27 basis points during the 12-month period to end the period
at 208 basis points.
2 o ACM MANAGED DOLLAR INCOME FUND
Countries favored within the Fund during the annual period included Brazil,
Argentina, Russia, Peru and Panama. Brazil's creditworthiness was enhanced by
extensive dollar reserve accumulation and a reduction of its debt-to-gross
domestic product (GDP) ratio through the scheduled repurchase of approximately
$24 billion in bonds (in U.S. dollar terms). Moody's Investors Service recently
upgraded Brazil's sovereign credit rating from Ba3 to Ba2, placing the country
two steps below investment grade.
Russia continued to amass tremendous reserves and repaid its entire Paris Club
debt. (The Paris Club is an informal group of financial officials from 19 of
the world's wealthiest nations which provide financial concessions such as debt
restructuring, debt relief, and debt cancellation to indebted countries).
Argentina continued to post strong growth during the period with GDP at 7.9% in
the second quarter. Exports in Argentina remained solid with its economy
benefiting from soft commodity prices. Peru was favored due to continued strong
growth, low debt and low inflation.
Ecuador was underweighted in the Fund's portfolio due to rising political risk.
Bond prices declined sharply late in the period as the less market friendly
presidential candidate, Rafael Correa, showed strength in pre-election polls.
Correa rattled bond markets with statements that he would renegotiate Ecuador's
$11 billion in (U.S. dollar terms) in outstanding debt.
The high yield market outperformed investment-grade fixed-income assets which
are more sensitive to the negative effects of rising interest rates. As
represented by the CSFBHY Index, high yield posted a return of 7.76% for the
12-month period ended September 30, 2006. On an industry level, top performers
included telecommunications at 14.29%, aerospace at 12.93% and manufacturing at
12.56%. Airlines helped the aerospace industry as fare prices increased while
capacity was reduced. Underperforming industries included housing at 3.77% and
health care at 5.26%. Housing was negatively impacted by higher mortgage rates
and a slowdown in the real estate market, while health care was dragged down by
Hospital Corporation of America (HCA) after it became a target for a leveraged
buyout.
Within the Fund's high yield allocation, a defensive posture was maintained
given perceived insufficient compensation for assuming risk and a lack of
specific credit opportunities. Quantitative analysis indicated that the reward
for assuming incremental risk is greatly diminished in times of a flat or
inverted yield curve. At the same time, strong corporate profits and a low
default rate have allowed high yield spreads to remain well below their long
term average even as market and leveraged buy out risks increased. In this
environment, therefore, the Fund is modestly underweighted in more volatile
credits and thoroughly diversified to minimize risk.
ACM MANAGED DOLLAR INCOME FUND o 3
HISTORICAL PERFORMANCE
An Important Note About the Value of Historical Performance
The performance on page 6 represents past performance and does not guarantee
future results. Current performance may be lower or higher than the performance
information shown. All fees and expenses related to the operation of the Fund
have been deducted. Performance assumes reinvestment of distributions and does
not account for taxes.
ACM Managed Dollar Income Fund Shareholder Information
The daily net asset value of the Fund's shares is available from the Fund's
Transfer Agent by calling 800.219.4218. The Fund also distributes its daily net
asset value to various financial publications or independent organizations such
as Lipper Inc., Morningstar, Inc. and Bloomberg. 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." For additional shareholder information
regarding this Fund, please see page 59.
Benchmark Disclosure
The unmanaged J.P. Morgan Emerging Markets Bond Index Global (JPM EMBI Global),
the unmanaged J.P. Morgan Emerging Markets Bond Index Plus (JPM EMBI+) and the
unmanaged Credit Suisse First Boston High Yield (CSFBHY) Index do not reflect
fees and expenses associated with the active management of a mutual fund
portfolio. The JPM EMBI Global tracks total returns for U.S.-dollar denominated
debt instruments issued by emerging market sovereign and quasi-sovereign
entities: Brady bonds, loans, Eurobonds. The JPM EMBI+ is composed of
dollar-denominated restructured sovereign bonds; a large percentage of the
index is made up of Brady bonds. The CSFBHY Index is a standard 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. An investor cannot invest directly in
an index, and its results are not indicative of the performance for any
specific investment, including the Fund.
A Word About Risk
The Fund may use certain investment techniques that have increased risks. For
example, the Fund may use leverage, through borrowings, to enhance its returns.
For this purpose, the Fund may use reverse repurchase agreements and dollar
rolls, which are considered borrowings, as part of its investment strategy.
Borrowings allow the Fund to increase the amount of money available to invest
in debt securities. As long as the income from the securities financed is
greater than the interest cost of the borrowings, the Fund's investors benefit
from higher returns than if the Fund were not leveraged.
Reverse repurchase agreements involve sales by a fund of portfolio assets
concurrently with an agreement by the fund to repurchase the same assets at a
later date at a fixed price. During the reverse repurchase agreement period,
the fund continues to receive principal and interest payments on these
securities. Generally, the effect of such a transaction is that a fund can
recover all or most of the cash invested in the portfolio securities involved
during the term of the reverse repurchase agreement, while it will be able to
keep the interest income associated with those portfolio securities. Such
transactions are advantageous only if the interest cost to a fund of the
reverse repurchase transaction is less than the cost of otherwise obtaining the
cash.
(Historical Performance continued on next page)
4 o ACM MANAGED DOLLAR INCOME FUND
HISTORICAL PERFORMANCE
(continued from previous page)
The Fund may enter into dollar rolls in which the Fund sells securities for
delivery in the current month and simultaneously contracts to repurchase
substantially similar (same type and coupon) securities on a specified future
date. During the roll period, the Fund forgoes principal and interest paid on
the securities. The Fund is compensated by the difference between the current
sales price and the lower forward price for the future purchase (often referred
to as the "drop") as well as by the interest earned on the cash proceeds of the
initial sale.
The use of leverage, which is usually considered speculative, involves certain
risks to stockholders. These include a higher volatility of the NAV of the
common stock caused by favorable or adverse changes in interest rates. In
addition, fluctuations in the interest rates on a fund's borrowings will affect
the return to stockholders, with increases in interest rates decreasing the
fund's return.
To the extent that the current interest rate on a fund's borrowings approaches
the net return on the leveraged portion of the fund's investment portfolio, the
benefit of leverage to stockholders will be reduced. If the current interest
rate on the borrowings were to exceed the net return on that portion of the
fund's portfolio, the fund's leverage would result in a lower rate of return to
stockholders and in a lower NAV than if a fund were not leveraged.
Part of the Fund's assets will be invested in foreign and emerging markets
fixed-income securities which may magnify asset value fluctuations due to
changes in foreign exchange rates and the possibility of substantial volatility
due to political and economic uncertainties in foreign countries. This may have
a significant effect on the Fund's asset value. Price fluctuations may be
caused by changes in the general level of interest rates or changes in bond
credit quality ratings. Please note, as interest rates rise, existing bond
prices fall and can cause the value of an investment in the Fund to decline.
Changes in interest rates have a greater effect on bonds with longer maturities
than on those with shorter maturities. High yield bonds (i.e., "junk bonds")
involve a greater risk of default and price volatility than other bonds.
Investing in non-investment grade securities presents special risks, including
credit risk. While the Fund invests principally in fixed-income securities, in
order to achieve its investment objectives, the Fund may at times use certain
types of investment derivatives, such as options, forwards and swaps. These
instruments involve risks different from, and in certain cases, greater than,
the risks presented by more traditional investments.
(Historical Performance continued on next page)
ACM MANAGED DOLLAR INCOME FUND o 5
HISTORICAL PERFORMANCE
(continued from previous page)
THE FUND VS. ITS BENCHMARK
PERIODS ENDED SEPTEMBER 30, 2006
Returns
------------------------
6 Months 12 Months
------------------------
ACM Managed Dollar Income Fund (NAV) 4.02% 7.46%
New Composite: 65% JPM EMBI Global /
35% CSFBHY Index 4.16% 7.79%
Old Composite: 65% JPM EMBI+ /
35% CSFBHY Index 4.20% 8.14%
JPM EMBI Global 4.28% 7.81%
JPM EMBI+ 4.34% 8.35%
CSFBHY Index 3.93% 7.76%
The Fund's Market Price per share on September 30, 2006 was $7.37. The Fund's
Net Asset Value Price per share on September 30, 2006 was $8.22. For additional
Financial Highlights, please see page 42.
GROWTH OF A $10,000 INVESTMENT IN THE FUND
9/30/96 TO 9/30/06
ACM Managed Dollar Income Fund (NAV): $21,630
Old Composite: $26,093
New Composite: $25,518
[THE FOLLOWING DATA WAS REPRESENTED BY A MOUNTAIN CHART IN THE PRINTED MATERIAL]
ACM Managed Dollar
Income Fund (NAV) New Composite Old Composite
-------------------------------------------------------------------------------
9/30/96 $10,000 $10,000 $10,000
9/30/97 $13,364 $12,201 $12,255
9/30/98 $ 8,514 $10,255 $10,218
9/30/99 $10,092 $12,027 $11,887
9/30/00 $11,100 $14,055 $14,133
9/30/01 $ 9,981 $14,116 $14,052
9/30/02 $10,004 $14,301 $14,088
9/30/03 $15,484 $18,961 $19,151
9/30/04 $17,567 $21,268 $21,532
9/30/05 $20,127 $23,673 $24,128
9/30/06 $21,630 $25,518 $26,093
This chart illustrates the total value of an assumed $10,000 investment in ACM
Managed Dollar Income Fund at net asset value (NAV) (from 9/30/96 to 9/30/06)
as compared to the performance of the Fund's new composite benchmark, a 65%/35%
blend of the J.P. Morgan (JPM) Emerging Markets Bond Index (EMBI) Global and
the Credit Suisse First Boston High Yield (CSFBHY) Index, respectively, and its
old composite benchmark, a 65%/35% blend of the J.P. Morgan (JPM) Emerging
Markets Bond Index (EMBI) Plus and the CSFBHY Index, respectively. The chart
assumes the reinvestment of dividends and capital gains distributions at prices
obtained pursuant to the Fund's dividend reinvestment plan.
See Historical Performance and Benchmark disclosures on pages 4-5.
6 o ACM MANAGED DOLLAR INCOME FUND
PORTFOLIO SUMMARY
September 30, 2006
PORTFOLIO STATISTICS
Net Assets ($mil): $168.4
SECURITY TYPE BREAKDOWN*
[ ] 47.9% Sovereign Debt Obligations [PIE CHART OMITTED]
[ ] 43.3% Corporate Debt Obligations
[ ] 3.9% Emerging Market-Corporate Debt Obligation
[ ] 2.3% Structured Note
[ ] 0.3% Preferred Stock & Warrants
[ ] 2.3% Short-Term
* All data are as of September 30, 2006. The Fund's security type breakdown
is expressed as a percentage of total investments (excluding security lending
collateral) and may vary over time.
ACM MANAGED DOLLAR INCOME FUND o 7
PORTFOLIO OF INVESTMENTS
September 30, 2006
Principal
Amount
(000) U.S. $ Value
-------------------------------------------------------------------------------
SOVEREIGN DEBT OBLIGATIONS-51.9%
Argentina-4.6%
Republic of Argentina
7.00%, 3/28/11 $ 275 $ 264,642
8.28%, 12/31/33 2,969 2,862,165
Republic of Argentina FRN
5.59%, 8/03/12(a) 5,051 4,659,465
----------
7,786,272
Brazil-8.2%
Republic of Brazil
7.125%, 1/20/37(b) 3,776 3,857,184
8.00%, 1/15/18 2,099 2,303,653
8.25%, 1/20/34 4,247 4,852,198
8.875%, 10/14/19 2,329 2,769,181
----------
13,782,216
Bulgaria-0.3%
Republic of Bulgaria
8.25%, 1/15/15(c) 355 417,657
Colombia-1.1%
Republic of Colombia
7.375%, 9/18/37 160 162,000
10.75%, 1/15/13 237 289,496
11.75%, 2/25/20 1,028 1,434,060
----------
1,885,556
Costa Rica-0.2%
Republic of Costa Rica
8.05%, 1/31/13(c) 181 194,394
8.11%, 2/01/12(c) 188 201,630
----------
396,024
Dominican Republic-0.2%
Dominican Republic
8.625%, 4/20/27(c) 270 285,795
9.50%, 9/27/11(c) 100 107,046
----------
392,841
Ecuador-0.4%
Republic of Ecuador
9.00%, 8/15/30(a)(c) 645 590,175
9.375%, 12/15/15(c) 87 84,390
----------
674,565
8 o ACM MANAGED DOLLAR INCOME FUND
Principal
Amount
(000) U.S. $ Value
-------------------------------------------------------------------------------
El Salvador-0.6%
Republic of El Salvador
7.625%, 9/21/34(c) $ 150 $ 163,875
7.65%, 6/15/35(c) 441 472,973
8.50%, 7/25/11(c) 400 441,000
----------
1,077,848
Indonesia-1.1%
Republic of Indonesia
6.75%, 3/10/14(c) 945 958,230
6.875%, 3/09/17(c) 378 386,505
7.25%, 4/20/15(c) 476 494,564
----------
1,839,299
Jamaica-0.3%
Government of Jamaica
9.25%, 10/17/25 100 106,600
10.625%, 6/20/17 270 314,550
----------
421,150
Lebanon-0.6%
Lebanese Republic
7.875%, 5/20/11(c) 325 317,362
10.125%, 8/06/08(c) 556 582,410
11.625%, 5/11/16(c) 146 172,937
----------
1,072,709
Mexico-6.5%
United Mexican States
8.00%, 9/24/22(b) 2,472 2,960,220
8.125%, 12/30/19(b) 5,135 6,162,000
11.375%, 9/15/16 1,296 1,858,464
----------
10,980,684
Nigeria-0.9%
Central Bank of Nigeria
6.25%, 11/15/20(a) 1,500 1,500,000
Panama-3.0%
Republic of Panama
6.70%, 1/26/36 433 433,000
7.125%, 1/29/26 927 977,985
7.25%, 3/15/15 2,050 2,188,375
8.875%, 9/30/27 559 691,763
9.375%, 7/23/12-4/01/29 541 683,267
9.625%, 2/08/11 135 153,562
----------
5,127,952
ACM MANAGED DOLLAR INCOME FUND o 9
Principal
Amount
(000) U.S. $ Value
-------------------------------------------------------------------------------
Peru-3.3%
Republic of Peru
7.35%, 7/21/25 $ 2,611 $2,787,243
8.375%, 5/03/16 996 1,145,400
8.75%, 11/21/33(b) 1,299 1,591,275
9.875%, 2/06/15 23 28,462
----------
5,552,380
Philippines-4.0%
Republic of Philippines
7.75%, 1/14/31 340 354,450
8.25%, 1/15/14(b) 226 246,340
8.375%, 2/15/11 31 33,294
8.875%, 3/17/15 1,888 2,147,600
9.00%, 2/15/13 44 49,456
9.50%, 2/02/30 431 531,207
9.875%, 1/15/19 2,628 3,242,952
10.625%, 3/16/25 130 173,095
----------
6,778,394
Russia-6.5%
Ministry Finance of Russia
3.00%, 5/14/08-5/14/11 2,380 2,260,100
Russian Federation
5.00%, 3/31/30(a)(c) 7,191 8,010,774
11.00%, 7/24/18(c) 435 624,007
----------
10,894,881
Turkey-4.1%
Republic of Turkey
6.875%, 3/17/36 1,161 1,053,608
7.00%, 6/05/20 1,150 1,114,350
7.375%, 2/05/25 680 671,500
9.50%, 1/15/14 151 171,762
11.00%, 1/14/13 610 734,440
11.50%, 1/23/12 1,447 1,745,806
11.75%, 6/15/10 883 1,033,110
11.875%, 1/15/30(b) 254 374,650
----------
6,899,226
Ukraine-0.6%
Government of Ukraine
6.875%, 3/04/11(c) 526 531,260
7.65%, 6/11/13(c) 191 201,982
11.00%, 3/15/07(c) 219 224,003
----------
957,245
Uruguay-1.1%
Republic of Uruguay
7.50%, 3/15/15 93 97,092
7.875%, 1/15/33(d) 1,072 1,109,829
9.25%, 5/17/17 505 590,345
----------
1,797,266
10 o ACM MANAGED DOLLAR INCOME FUND
Principal
Amount
(000) U.S. $ Value
-------------------------------------------------------------------------------
Venezuela-4.3%
Republic of Venezuela
5.75%, 2/26/16 $ 733 $ 672,069
6.511%, 4/20/11 FRN(a)(c) 120 118,704
7.00%, 12/01/18(c) 315 311,062
8.50%, 10/08/14 1,102 1,220,465
9.25%, 9/15/27(b) 2,339 2,847,732
10.75%, 9/19/13 1,659 2,028,127
13.625%, 8/15/18 35 51,625
----------
7,249,784
Total Sovereign Debt Obligations
(cost $77,935,380) 87,483,949
CORPORATE DEBT OBLIGATIONS-47.0%
Aerospace & Defense-0.4%
DRS Technologies, Inc.
6.875%, 11/01/13 150 148,125
L-3 Communications Corp.
5.875%, 1/15/15 345 327,750
Sequa Corp.
9.00%, 8/01/09 235 250,569
----------
726,444
Automotive-2.7%
Autonation Inc.
7.507%, 4/15/13 FRN(a)(c) 55 55,688
Ford Motor Co.
7.45%, 7/16/31* 561 433,373
Ford Motor Credit Co.
4.95%, 1/15/08 380 369,525
7.00%, 10/01/13 533 494,538
General Motors Acceptance Corp.
6.875%, 9/15/11 765 760,947
8.375%, 7/15/33 580 501,700
Keystone Automotive Operations, Inc.
9.75%, 11/01/13 310 291,400
Lear Corp.
8.11%, 5/15/09* 205 197,825
Tenneco Inc.
8.625%, 11/15/14 130 128,375
TRW Automotive, Inc.
9.375%, 2/15/13 186 198,090
11.00%, 2/15/13 176 191,840
United Auto Group, Inc.
9.625%, 3/15/12 290 307,400
Visteon Corp.
7.00%, 3/10/14* 635 568,325
----------
4,499,026
ACM MANAGED DOLLAR INCOME FUND o 11
Principal
Amount
(000) U.S. $ Value
-------------------------------------------------------------------------------
Broadcasting & Media-0.5%
Allbritton Communications Co.
7.75%, 12/15/12 $ 375 $ 377,813
Sirius Satellite Radio, Inc.
9.625%, 8/01/13 190 185,725
XM Satellite Radio Inc.
9.75%, 5/01/14 245 233,975
----------
797,513
Building & Real Estate-1.1%
Associated Materials, Inc.
11.25%, 3/01/14(a) 530 291,500
D.R. Horton, Inc.
6.875%, 5/01/13 345 352,407
Goodman Global Holdings Company, Inc.
7.875%, 12/15/12* 280 266,700
KB HOME
7.75%, 2/01/10 480 480,000
William Lyon Homes, Inc.
10.75%, 4/01/13 525 483,000
----------
1,873,607
Cable-3.7%
Cablevision Systems Corp.
8.00%, 4/15/12 435 440,437
Charter Communications Operating LLC
8.00%, 4/30/12(c) 890 896,675
CSC Holdings, Inc.
6.75%, 4/15/12 325 323,781
7.625%, 7/15/18 410 419,737
DirectTV Holdings LLC
6.375%, 6/15/15 480 451,200
Echostar DBS Corp.
6.375%, 10/01/11 325 316,469
7.125%, 2/1/16(c) 160 154,600
Inmarsat Finance PLC
7.625%, 6/30/12 372 383,160
Insight Midwest LP
9.75%, 10/01/09 295 300,162
Intelsat Bermuda, Ltd.
8.625%, 1/15/15 285 291,412
10.484%, 1/15/12 FRN(a) 115 116,581
11.25%, 6/15/16(c) 702 745,875
PanAmSat Corp.
9.00%, 8/15/14 313 323,172
Quebecor Media
7.75%, 3/15/16 520 520,650
Rogers Cable, Inc.
6.75%, 3/15/15 620 626,200
----------
6,310,111
12 o ACM MANAGED DOLLAR INCOME FUND
Principal
Amount
(000) U.S. $ Value
-------------------------------------------------------------------------------
Chemicals-1.7%
Equistar Chemical Funding LP
10.125%, 9/01/08 $ 480 $ 508,200
10.625%, 5/01/11 145 155,513
Hexion Nova Scotia Finance, ULC
9.00%, 7/15/14 290 295,800
Huntsman International LLC
9.875%, 3/01/09 203 211,628
Ineos Group Holdings
8.50%, 2/15/16(c) 385 366,712
Lyondell Chemical Co.
8.00%, 9/15/14 155 156,937
8.25%, 9/15/16 95 96,425
Nell AF S.a.r.l.
8.375%, 8/15/15(c)* 369 366,232
Rhodia S.A.
8.875%, 6/01/11 625 645,312
----------
2,802,759
Communications - Fixed-2.5%
Citizens Communications Co.
6.25%, 1/15/13 490 476,525
Hawaiian Telcom Communications, Inc.
9.75%, 5/01/13* 285 292,838
L-3 Financing Inc.
11.50%, 3/01/10 135 138,712
12.25%, 3/15/13* 906 1,010,190
Qwest Corp.
8.875%, 3/15/12 1,610 1,756,913
Time Warner Telecommunications Holdings
9.25%, 2/15/14 205 215,762
Windstream Corp.
8.125%, 8/01/13(c) 198 210,127
8.625%, 8/01/16(c) 156 166,920
----------
4,267,987
Communications - Mobile-1.5%
American Tower Corp.
7.125%, 10/15/12 627 642,675
Digicel, Ltd.
9.25%, 9/01/12(c) 349 362,087
Dobson Communications Corp.
8.375%, 11/01/11(c) 143 148,541
8.875%, 10/01/13* 185 183,381
Rogers Wireless, Inc.
7.25%, 12/15/12 335 350,494
7.50%, 3/15/15 508 542,290
Rural Cellular Corp.
8.25%, 3/15/12 255 262,650
----------
2,492,118
ACM MANAGED DOLLAR INCOME FUND o 13
Principal
Amount
(000) U.S. $ Value
-------------------------------------------------------------------------------
Consumer Manufacturing-0.7%
ACCO Brands Corp.
7.625%, 8/15/15 $ 470 $ 454,725
Broder Brothers Co.
11.25%, 10/15/10 292 284,700
Jostens, Inc.
7.625%, 10/01/12 210 211,050
Levi Strauss & Co.
8.875%, 4/01/16 225 223,875
----------
1,174,350
Diversified Media-1.0%
Dex Media East LLC
9.875%, 11/15/09 125 131,719
12.125%, 11/15/12 220 245,575
Dex Media West LLC
8.50%, 8/15/10 180 185,850
Lamar Media Corp.
6.625%, 8/15/15 100 95,875
Liberty Media Corp.
5.70%, 5/15/13 150 141,543
7.875%, 7/15/09 120 125,630
8.25%, 2/01/30 150 149,725
Rainbow National Services LLC
8.75%, 9/01/12(c) 205 219,350
R.H. Donnelley Corp.
6.875%, 1/15/13 387 353,137
----------
1,648,404
Energy-3.0%
Chesapeake Energy Corp.
6.625%, 1/15/16 655 632,075
7.50%, 9/15/13 185 187,775
7.75%, 1/15/15 485 494,700
El Paso Corp.
7.75%, 6/01/13-1/15/32 956 978,938
Grant Prideco, Inc.
6.125%, 8/15/15 245 233,975
Hilcorp Energy
10.50%, 9/01/10(c) 266 286,283
Kerr-McGee Corp.
6.875%, 9/15/11 420 444,905
6.95%, 7/01/24 260 278,559
Kinder Morgan Finance Co.
5.35%, 1/05/11 190 184,789
Newfield Exploration Co.
6.625%, 4/15/16 110 106,975
Petrohawk Energy Corp.
9.125%, 7/15/13(c) 217 218,085
Pride International, Inc.
7.375%, 7/15/14 400 412,000
14 o ACM MANAGED DOLLAR INCOME FUND
Principal
Amount
(000) U.S. $ Value
-------------------------------------------------------------------------------
Range Resources Corp.
7.50%, 5/15/16 $ 265 $ 266,325
Tesoro Corp.
6.25%, 11/01/12(c) 400 385,500
----------
5,110,884
Entertainment & Leisure-1.3%
Gaylord Entertainment Co.
8.00%, 11/15/13 350 356,125
Intrawest Corp.
7.50%, 10/15/13 195 209,381
NCL Corp.
10.625%, 7/15/14 250 241,875
Royal Caribbean Cruises
8.00%, 5/15/10 385 407,996
Six Flags Inc.
9.625%, 6/01/14* 290 258,100
Universal City Development
11.75%, 4/01/10 335 360,962
Universal City Florida Holding, Co.
8.375%, 5/01/10 110 110,412
Univision Communmications Inc.
7.85%, 7/15/11 190 188,924
----------
2,133,775
Financial-1.9%
C&M Finance Ltd.
8.10%, 2/01/16(c) 250 245,000
Crum & Foster Holdings Corp.
10.375%, 6/15/13 220 225,500
E*Trade Financial Corp.
7.375%, 9/15/13 200 204,500
7.875%, 12/01/15 643 676,758
8.00%, 6/15/11 190 196,650
Iirsa Norte Finance LTD.
8.75%, 5/30/24(c) 150 154,875
Liberty Mutual Group
5.75%, 3/15/14(c) 280 275,354
TNK-BP Financial SA
7.50%, 7/18/16(c) 575 599,763
TRAINS HY-1-2006
7.548%, 5/01/16(c) 595 595,268
----------
3,173,668
Food & Beverage-1.8%
Altria Group, Inc.
7.75%, 1/15/27 415 502,487
Dean Foods Co.
7.00%, 6/01/16 360 360,000
Del Monte Food Co.
8.625%, 12/15/12 125 131,094
ACM MANAGED DOLLAR INCOME FUND o 15
Principal
Amount
(000) U.S. $ Value
-------------------------------------------------------------------------------
Dole Food Company, Inc.
8.625%, 5/01/09 $ 180 $ 175,950
8.875%, 3/15/11 92 88,090
Domino's, Inc.
8.25%, 7/01/11 262 275,100
Reynolds American, Inc.
7.25%, 6/01/12-6/01/13(c) 825 848,723
7.625%, 6/01/16(c) 190 197,089
Rite Aid Corp.
6.875%, 8/15/13 230 193,200
9.25%, 6/01/13 210 205,800
----------
2,977,533
Gaming-3.3%
Boyd Gaming Corp.
7.75%, 12/15/12 255 261,694
Greektown Holdings LLC
10.75%, 12/01/13(c) 240 253,200
Mandalay Resort Group
10.25%, 8/01/07 535 552,387
MGM Mirage, Inc.
6.625%, 7/15/15 455 436,800
8.375%, 2/01/11 620 646,381
Mohegan Tribal Gaming Authority
6.375%, 7/15/09 155 153,837
7.125%, 8/15/14 150 149,250
Park Place Entertainment
7.00%, 4/15/13 305 313,551
7.875%, 3/15/10 150 156,000
9.375%, 2/15/07 255 258,187
Penn National Gaming, Inc.
6.875%, 12/01/11 430 432,150
Riviera Holdings Corp.
11.00%, 6/15/10 385 406,175
Seneca Gaming Corp.
7.25%, 5/01/12 305 305,000
Station Casinos, Inc.
6.625%, 3/15/18 235 212,087
Turning Stone Casino Resort Enterprise
9.125%, 12/15/10(c) 300 303,750
Wynn Las Vegas LLC
6.625%, 12/01/14 695 674,150
----------
5,514,599
Health Care-2.4%
Concentra Operating Corp.
9.125%, 6/01/12 5 5,200
9.50%, 8/15/10 280 291,200
Coventry HealthCare, Inc.
5.875%, 1/15/12 160 158,747
6.125%, 1/15/15 170 168,698
16 o ACM MANAGED DOLLAR INCOME FUND
Principal
Amount
(000) U.S. $ Value
-------------------------------------------------------------------------------
DaVita, Inc.
7.25%, 3/15/15 $ 350 $ 343,875
Extendicare Health Services
9.50%, 7/01/10 160 167,800
Hanger Orthopedic Group
10.25%, 6/01/14 190 192,850
HCA, Inc.
6.375%, 1/15/15 905 730,788
6.50%, 2/15/16 395 316,000
6.75%, 7/15/13 10 8,463
7.875%, 2/01/11 415 396,844
Healthsouth Corp.
10.75%, 6/15/16(c) 250 255,313
IASIS Healthcare/CAP CRP Healthcare
8.75%, 6/15/14 270 261,225
Select Medical Corp.
7.625%, 2/01/15 285 240,112
Universal Hospital Services, Inc.
10.125%, 11/01/11 260 273,000
Ventas Realty LP
6.75%, 4/01/17 157 157,981
----------
3,968,096
Hotels & Lodging-0.8%
Host Marriott LP
6.75%, 6/01/16 225 221,906
9.25%, 10/01/07 110 113,437
9.50%, 1/15/07 310 312,712
Starwood Hotels & Resorts Worldwide, Inc.
7.875%, 5/01/12 405 425,250
Vail Resorts, Inc.
6.75%, 2/15/14 360 351,900
----------
1,425,205
Index-1.4%
Dow Jones CDX HY
8.25%, 6/29/10(c)* 955 959,976
8.375%, 12/29/11(c) 454 454,284
8.625%, 6/29/11(c)* 983 995,287
----------
2,409,547
Industrial-1.3%
AMSTED Industries, Inc.
10.25%, 10/15/11(c) 265 283,550
Case New Holland, Inc.
9.25%, 8/01/11 315 333,900
FastenTech, Inc.
11.50%, 5/01/11 170 176,800
Invensys PLC
9.875%, 3/15/11(c) 221 238,680
RBS Global & Rexnord Corp.
9.50%, 8/01/14(c) 250 255,000
11.75%, 8/01/16(c) 115 119,025
ACM MANAGED DOLLAR INCOME FUND o 17
Principal
Amount
(000) U.S. $ Value
-------------------------------------------------------------------------------
Trinity Industries, Inc.
6.50%, 3/15/14 $ 535 $ 522,962
Tyco International Group SA
6.875%, 1/15/29 188 209,289
----------
2,139,206
Metals & Mining-1.3%
AK Steel Corp.
7.875%, 2/15/09 430 428,387
Arch Western Finance
6.75%, 7/01/13 165 158,400
International Steel Group, Inc.
6.50%, 4/15/14 272 268,600
Ispat Inland ULC
9.75%, 4/01/14 239 269,174
Massey Energy Co.
6.875%, 12/15/13 165 149,325
Peabody Energy Corp.
6.875%, 3/15/13 660 650,100
Southern Peru Copper Corp.
7.50%, 7/27/35 300 313,984
----------
2,237,970
Paper & Packaging-1.5%
Ball Corp.
6.875%, 12/15/12 450 453,375
Berry Plastics Corp.
8.875%, 9/15/14(c) 275 276,375
Covalence Specialty Materials Corp.
10.25%, 3/01/16(c) 130 126,100
Crown Americas, Inc.
7.625%, 11/15/13 375 379,687
Jefferson Smurfit Corp.
8.25%, 10/01/12 8 7,660
Newpage Corp.
10.00%, 5/01/12 285 294,262
Owens-Brockway Glass Container, Inc.
8.875%, 2/15/09 655 673,012
Plastipak Holdings, Inc.
8.50%, 12/15/15(c) 135 136,350
Russell-Stanley Holdings, Inc.
9.00%, 11/30/08(c)(d)(f) 913 240,757
Stone Container Corp.
9.75%, 2/01/11 10 10,300
----------
2,597,878
Retail-0.6%
Burlington Coat Factory
11.125%, 4/15/14(c) 130 125,450
GSC Holdings Corp.
8.00%, 10/01/12 610 628,300
18 o ACM MANAGED DOLLAR INCOME FUND
Principal
Amount
(000) U.S. $ Value
-------------------------------------------------------------------------------
J.C. Penney Corporation, Inc.
7.625%, 3/01/97 $ 205 $ 210,635
----------
964,385
Service-2.2%
Allied Waste North America
6.375%, 4/15/11 610 594,750
7.125%, 5/15/16 545 537,506
7.375%, 4/15/14* 185 182,225
Gallery Capital SA
10.125%, 5/15/13(c) 149 145,767
Iron Mountain Inc.
6.625%, 1/01/16 335 314,900
Service Corp. International
6.50%, 3/15/08 605 605,000
7.70%, 4/15/09 270 277,087
United Rentals North America, Inc.
6.50%, 2/15/12 454 438,110
7.00%, 2/15/14 85 79,900
7.75%, 11/15/13 538 529,930
----------
3,705,175
Supermarket & Drugstore-0.5%
Couche-Tard, Inc.
7.50%, 12/15/13 333 337,995
Elan Finance Corp.
7.75%, 11/15/11 355 345,681
Stater Bros. Holdings, Inc.
8.125%, 6/15/12 165 165,825
----------
849,501
Technology-2.2%
Amkor Technologies Inc.
9.25%, 6/01/16 175 164,063
Avago Technologies Finance
10.125%, 12/01/13(c) 230 243,800
Computer Associates Inc.
5.25%, 12/01/09(c) 200 194,569
Electronic Data Systems Corp
6.50%, 8/01/13 178 180,568
Flextronics International, Ltd.
6.50%, 5/15/13 535 529,650
Freescale Semiconductor
7.125%, 7/15/14 220 235,950
Nortel Networks Corp.
6.875%, 9/01/23 280 231,000
Seagate Technology
6.375%, 10/01/11 443 440,785
6.80%, 10/01/16 221 219,895
Serena Software, Inc.
10.375%, 3/15/16 270 282,825
ACM MANAGED DOLLAR INCOME FUND o 19
Principal
Amount
(000) U.S. $ Value
-------------------------------------------------------------------------------
SunGard Data Systems, Inc.
9.125%, 8/15/13 $ 735 $ 760,725
Xerox Corp.
6.40%, 3/15/16 240 238,800
----------
3,722,630
Transportation-0.9%
AMR Corp.
9.00%, 8/01/12* 232 233,160
Avis Budget Car Rental
7.75%, 5/15/16(c) 315 304,762
BNSF Funding Trust
6.613%, 12/15/55 VRN(a) 555 557,824
Hertz Corp.
8.875%, 1/01/14(c) 205 214,738
10.50%, 1/01/16(c)* 235 258,500
----------
1,568,984
Utilities - Electric & Gas-4.8%
AES Corporation
7.75%, 3/01/14 490 509,600
8.75%, 5/15/13(c) 75 80,438
9.00%, 5/15/15(c) 115 123,913
Allegheny Energy Supply
7.80%, 3/15/11 280 298,900
8.25%, 4/15/12(c) 495 539,550
Aquila, Inc.
14.875%, 7/01/12 260 341,250
CMS Energy Corp.
8.50%, 4/15/11 215 232,200
Edison Mission Energy
7.50%, 6/15/13(c)* 500 505,000
7.75%, 6/15/16(c) 170 172,125
FirstEnergy Corp.
6.45%, 11/15/11 205 213,851
Northwest Pipeline Corp.
8.125%, 3/01/10 315 327,600
NRG Energy, Inc.
7.25%, 2/01/14 85 84,362
7.375%, 2/01/16 475 472,031
Reliant Energy, Inc.
6.75%, 12/15/14 65 61,831
9.50%, 7/15/13 390 404,625
Sierra Pacific Resources
8.625%, 3/15/14 260 280,726
Southern Natural Gas Co.
7.35%, 2/15/31 405 419,671
8.875%, 3/15/10 325 340,816
TECO Energy, Inc.
7.00%, 5/01/12 425 439,875
20 o ACM MANAGED DOLLAR INCOME FUND
Principal
Amount
(000) U.S. $ Value
-------------------------------------------------------------------------------
The Williams Companies, Inc.
7.625%, 7/15/19 $ 1,365 $1,419,600
TXU Corp.
5.55%, 11/15/14 475 448,770
6.50%, 11/15/24 379 359,082
----------
8,075,816
Total Corporate Debt Obligations
(cost $82,945,436) 79,167,171
EMERGING MARKET - CORPORATE DEBT
OBLIGATIONS-4.2%
Brazil-0.8%
Banco BMG SA
9.15%, 1/15/16(c) 350 350,875
PF Export Receivables Master Trust
6.436%, 6/01/15(c) 1,059 1,069,687
----------
1,420,562
China-0.3%
Chaoda Modern Agriculture
7.75%, 2/08/10(c) 519 499,538
El Salvador-0.2%
AES El Salvador Trust
6.75%, 2/01/16(c) 270 266,613
Hong Kong-0.2%
Noble Group, Ltd.
6.625%, 3/17/15(c) 401 354,896
Kazakhstan-0.3%
ALB Finance BV
9.25%, 9/25/13(c) 173 171,139
Kazkommerts International BV
8.50%, 4/16/13(c) 350 368,375
----------
539,514
Romania-0.3%
Mobifon Holdings BV
12.50%, 7/31/10 425 476,531
Russia-2.0%
Alfa Bond ISS (Alpha Bank)
8.625%, 12/09/15 VRN(a) 225 223,821
Citigroup (JSC Severstal)
9.25%, 4/19/14(c) 464 493,130
Evraz Group SA
8.25%, 11/10/15(c) 665 666,663
ACM MANAGED DOLLAR INCOME FUND o 21
Shares or
Principal
Amount
(000) U.S. $ Value
-------------------------------------------------------------------------------
Gazprom OAO
9.625%, 3/01/13(c) $ 890 $1,052,021
Mobile Telesystems Finance S.A.
9.75%, 1/30/08(c) 625 648,037
Russian Standard Finance SA
7.50%, 10/07/10(c) 270 261,900
Tyumen Oil Co.
11.00%, 11/06/07(c) 70 73,500
----------
3,419,072
Ukraine-0.1%
Dresdner Bank AG (Kyivstar)
7.75%, 4/27/12(c) 100 101,250
Total Emerging Market - Corporate Debt
Obligations
(cost $6,898,580) 7,077,976
STRUCTURED NOTE-2.5%
RACERS Series 06-6-T
5.429%, 5/01/07 FRN(a)(c)
(cost $4,200,000) 4,200 4,246,137
NON-CONVERTIBLE PREFERRED
STOCK-0.2%
Sovereign Real Estate Investment Trust
12.00%(c)
(cost $168,350) 185 260,850
WARRANTS-0.1%
Central Bank of Nigeria
Warrants, expiring 11/15/20(g) 1,000 200,000
Republic of Venezuela
Warrants, expiring 4/15/20(g) 7,140 -0-
Total Warrants (cost $0) 200,000
SHORT-TERM INVESTMENT-2.5%
Time Deposit-2.5%
Societe Generale
5.32%, 10/02/06
(cost $4,200,000) 4,200 4,200,000
Total Investments Before Security Lending
Collateral-108.4%
(cost $176,347,746) 182,636,083
22 o ACM MANAGED DOLLAR INCOME FUND
Shares U.S. $ Value
-------------------------------------------------------------------------------
INVESTMENT OF CASH COLLATERAL FOR
SECURITIES LOANED-2.2%
Short-Term Investment
UBS Private Money Market Fund, LLC
(cost $3,725,518) 3,725,518 $ 3,725,518
Total Investments-110.6%
(cost $180,073,264) 186,361,601
Other assets less liabilities-(10.6)% (17,912,316)
Net Assets-100.0% $168,449,285
CREDIT DEFAULT SWAP CONTRACTS (see Note C)
Notional Unrealized
Swap Counterparty & Amount Interest Termination Appreciation/
Referenced Obligation (000) Rate Date (Depreciation)
--------------------------------------------------------------------------------------------
Buy Contracts:
Citigroup Global Markets, Inc.
Republic of Hungary
4.50%, 2/06/13 $350 0.50% 11/26/13 $ 396
JP Morgan Chase
Republic of Hungary
4.75%, 2/03/15 1,380 0.30 10/20/15 30,349
Sale Contracts:s
Citigroup Global Markets, Inc.
Republic of Brazil
12.25%, 3/06/30 2,562 1.98 4/20/07 45,098
Citigroup Global Markets, Inc.
Republic of Philippines
10.625%, 3/16/25 510 4.95 3/20/09 48,508
Credit Suisse First Boston
Republic of Brazil
12.25%, 3/06/30 750 6.90 6/20/07 50,281
Credit Suisse First Boston
Republic of Venezuela
9.25%, 9/15/27 730 3.17 10/20/15 47,845
Deutsche Bank AG
Republic of Brazil
12.25%, 3/06/30 2,562 1.90 4/20/07 47,307
JP Morgan Chase
Gazprom OAO
10.50%, 10/21/09 1,490 1.04 10/20/10 12,721
ACM MANAGED DOLLAR INCOME FUND o 23
REVERSE REPURCHASE AGREEMENTS (see Note C)
Interest
Broker Rate Maturity Amount
-------------------------------------------------------------------------------
Barclays Securties 5.00% 12/29/06 $6,138,699
Barclays Securties 5.00 12/29/06 3,043,061
Chase Manhattan Bank 1.85 12/29/06 378,672
Chase Manhattan Bank 3.05 12/29/06 243,526
Chase Manhattan Bank 4.65 12/29/06 2,879,013
Chase Manhattan Bank 5.00 12/29/06 1,421,114
Chase Manhattan Bank 5.00 12/29/06 1,747,233
Chase Manhattan Bank 5.00 12/29/06 1,885,781
------------
$17,737,099
* Represents entire or partial securities out on loan. See Note F for
securities lending information.
(a) Variable rate coupon, rate shown as of September 30, 2006.
(b) Positions, or portions thereof, with an aggregate market value of
$18,039,402 have been segregated to collateralize reverse repurchase agreements.
(c) Security is exempt from registration under Rule 144A of the Securities Act
of 1933. These securities are considered liquid and may be resold in
transactions exempt from registration, normally to qualified institutional
buyers. At September 30, 2006, the aggregate market value of these securities
amounted to $42,082,352 or 25.0% of net assets.
(d) Payment in kind (PIK) quarterly coupon payment.
(e) 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.
(f) Security is exempt from registration under Rule 144A of the Securites Act
of 1933. This security, which represents 0.14% of net assets as of September
30, 2006, is considered illiquid and restricted. Security is in default, is
non-income producing, and valued at fair value.
Percentage
Acquisition Acquisition Market of Net
Restricted Security Date Cost Value Assets
-------------------------------------------------------------------------------
Russell-Stanley Holdings, Inc. 2/26/99 $4,895,369 $240,757 0.14%
9.00%, 11/30/08
(g) Non-income producing security.
Glossary of Terms:
FRN - Floating Rate Note
VRN - Variable Rate Note
Please note: The sector classifications presented herein are based on the
sector categorization methodology of the Adviser.
See notes to financial statements.
24 o ACM MANAGED DOLLAR INCOME FUND
STATEMENT OF ASSETS & LIABILITIES
September 30, 2006
Assets
Investments in securities, at value
(cost $180,073,264--including investment of cash
collateral for securities loaned of $3,725,518)
$186,361,601(a)
Cash 640,352
Interest receivable 3,217,367
Receivable for investment securities sold 1,207,196
Unrealized appreciation on credit default swap contracts 282,505
Total assets 191,709,021
Liabilities
Reverse repurchase agreements 17,737,099
Payable for collateral received on securities loaned 3,725,518
Payable for investment securities purchased 1,424,048
Advisory fee payable 123,861
Tender fees payable 121,949
Administrative fee payable 19,818
Accrued expenses and other liabilities 107,443
Total liabilities 23,259,736
Net Assets $168,449,285
Composition of Net Assets
Common stock, at par $ 204,937
Additional paid-in capital 278,179,061
Distributions in excess of net investment income (384,956)
Accumulated net realized loss on investment transactions (116,120,599)
Net unrealized appreciation of investments 6,570,842
$168,449,285
Net Asset Value Per Share--300 million shares of
capital stock authorized, $.01 par value
(based on 20,493,702 shares outstanding) $8.22
(a) Includes securities on loan with a value of $3,551,583 (see Note F).
See notes to financial statements.
ACM MANAGED DOLLAR INCOME FUND o 25
STATEMENT OF OPERATIONS
Year Ended September 30, 2006
Investment Income
Interest $15,118,438
Dividends 147,360 $15,265,798
Expenses
Advisory fee 1,299,642
Administrative fee 207,928
Printing 97,897
Legal 83,922
Audit 78,945
Custodian 60,918
Directors' fees 41,432
Transfer agency 13,806
Registration 23,750
Miscellaneous 45,973
Total expenses before interest expense 1,954,213
Interest expense 1,005,993
Total expenses 2,960,206
Net investment income 12,305,592
Realized and Unrealized Gain (Loss)
on Investment Transactions
Net realized gain (loss) on:
Investment transactions 13,257,982
Swap contracts (126,352)
Written options 10,802
Net change in unrealized
appreciation/depreciation of:
Investments (14,651,725)
Swap contracts 221,195
Net loss on investment transactions (1,288,098)
Net Increase in Net Assets from
Operations $11,017,494
See notes to financial statements.
26 o ACM MANAGED DOLLAR INCOME FUND
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
September 30, September 30,
2006 2005
Increase (Decrease) in Net Assets
Resulting from Operations
Net investment income $12,305,592 $14,589,844
Net realized gain on investment
transactions 13,142,432 3,564,731
Net change in unrealized
appreciation/depreciation
of investments (14,430,530) 6,022,473
Net increase in net assets from
operations 11,017,494 24,177,048
Dividends and Distributions to
Shareholders from
Net investment income (12,533,183) (15,094,355)
Common Stock Transactions
Reinvestment of dividends resulting in
the issuance of Common Stock -0- 79,572
Tender offer (resulting in the redemption
of 1,078,616 and 1,135,385 shares of
common stock, respectively) (8,434,777) (9,162,557)
Tender offer costs (160,449) (175,000)
Total decrease (10,110,915) (175,292)
Net Assets
Beginning of period 178,560,200 178,735,492
End of period (including distributions
in excess of net investment income
of $384,956 and $186,090,
respectively) $168,449,285 $178,560,200
See notes to financial statements.
ACM MANAGED DOLLAR INCOME FUND o 27
STATEMENT OF CASH FLOWS
Year Ended September 30, 2006
Increase (Decrease) in Cash from
Operation Activities:
Interest and dividends received $14,624,467
Interest expense paid (1,061,669)
Operating expenses paid (1,966,478)
Net increase in cash from operating
activities $11,596,320
Investing Activities:
Purchases of long-term investments (112,365,095)
Proceeds from disposition of long-term
investments 139,113,918
Purchases of short-term investments, net (1,800,000)
Premiums received on option
transactions 10,802
Proceeds from swap contracts (126,352)
Net increase in cash from investing
activities 24,833,273
Financing Activities:*
Cash dividends paid (12,533,183)
Proceeds from reverse repurchase
agreements (15,661,449)
Tender offer (8,535,259)
Net decrease in cash from financing
activities (36,729,891)
Net decrease in cash (300,298)
Cash at beginning of period 940,650
Cash at end of period $640,352
Reconciliation of Net Increase in
Net Assets from Operations to Net
Increase in Cash from Operating
Activities:
Net increase in net assets from
operations $11,017,494
Adjustments:
Increase in interest and dividends
receivable $ (49,696)
Accretion of bond discount and
amortization of bond premium (591,635)
Decrease in accrued expenses (12,265)
Decrease in interest payable (55,676)
Net realized gain on investment
transactions (13,142,432)
Net change in unrealized
appreciation/depreciation
of investments 14,430,530
Total adjustments 578,826
Net Increase in Cash from
Operating Activities $11,596,320
* Non-cash financing activities not included herein consist of reinvestment of
dividends and distributions.
See notes to financial statements.
28 o ACM MANAGED DOLLAR INCOME FUND
NOTES TO FINANCIAL STATEMENTS
September 30, 2006
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 U.S. generally accepted accounting principles, which requires 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 are valued at their current market value determined on the
basis of market quotations or, if market quotations are not readily available
or are deemed unreliable, at "fair value" as determined in accordance with
procedures established by and under the general supervision of the Fund's Board
of Directors.
In general, the market value of securities which are readily available and
deemed reliable are determined as follows. Securities listed on a national
securities exchange (other than securities listed on the NASDAQ Stock Market,
Inc. ("NASDAQ")) or on a foreign securities exchange are valued at the last
sale price at the close of the exchange or foreign securities exchange. If
there has been no sale on such day, the securities are valued at the mean of
the closing bid and asked prices on such day. Securities listed on more than
one exchange are valued by reference to the principal exchange on which the
securities are traded; securities listed only on NASDAQ are valued in
accordance with the NASDAQ Official Closing Price; listed put or call options
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; open futures
contracts and options thereon are valued using the closing settlement price or,
in the absence of such a price, the most recent quoted bid price. If there are
no quotations available for the day of valuation, the last available closing
settlement price is used; securities traded in the over-the-counter market,
(OTC) are valued at the mean of the current bid and asked prices as reported by
the National Quotation Bureau or other comparable sources; U.S. Government
securities and other debt instruments having 60 days or less remaining until
maturity are valued at amortized cost if their original maturity was 60 days or
less; or by amortizing their fair value as of the 61st day prior to maturity if
their original term to maturity exceeded 60 days; fixed-income securities,
including mortgage backed and asset backed securities, may be valued on the
basis of prices provided by a pricing service or at a price obtained from one
or more of the major broker/dealers. In cases where broker/dealer quotes are
obtained, AllianceBernstein L.P. (prior to February 24, 2006 known
ACM MANAGED DOLLAR INCOME FUND o 29
as Alliance Capital Management L.P.) (the "Adviser") may establish procedures
whereby changes in market yields or spreads are used to adjust, on a daily
basis, a recently obtained quoted price on a security; and OTC and other
derivatives are valued on the basis of a quoted bid price or spread from a
major broker/dealer in such security.
Securities for which market quotations are not readily available (including
restricted securities) or are deemed unreliable are valued at fair value.
Factors considered in making this determination may include, but are not
limited to, information obtained by contacting the issuer, analysts, analysis
of the issuer's financial statements or other available documents. In addition,
the Fund may use fair value pricing for securities primarily traded in non-U.S.
markets because, most foreign markets close well before the Fund values its
securities at 4:00 p.m., Eastern Time. The earlier close of these foreign
markets gives rise to the possibility that significant events, including broad
market moves, may have occurred in the interim and may materially affect the
value of those securities.
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 any, to
shareholders. Therefore, no provisions for federal income or excise taxes are
required. The Fund may be subject to taxes imposed by countries in which it
invests. Such taxes are generally based on income and/or capital gains earned
or required. Taxes are accrued and applied to net investment income, net
realized gains and net unrealized appreciation/depreciation as such income
and/or gains are earned.
3. Investment Income and Investment Transactions
Interest income is accrued daily. Dividend income is recorded on the
ex-dividend date or as soon as the Fund is informed of the dividend. Investment
transactions are accounted for on the date the securities are purchased or
sold. Investment gains and losses are determined on the identified cost basis.
The Fund amortizes premiums and accretes discounts as adjustments to interest
income.
4. Dividends and Distributions
Dividends and distributions to shareholders are recorded on the ex-dividend
date. Income and capital gains distributions are determined in accordance with
federal tax regulations and may differ from those determined in conformity with
U.S. 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.
30 o ACM MANAGED DOLLAR INCOME FUND
5. Repurchase Agreements
The Fund's custodian or designated subcustodian will take control of securities
as collateral under repurchase agreements and determine on a daily basis that
the value of such securities are sufficient to cover the value of the
repurchase agreements. If the seller defaults and the value of collateral
declines, or if bankruptcy proceedings are commenced with respect to the seller
of the security, realization of collateral by the Fund may be delayed or
limited.
NOTE B
Advisory, Administrative Fees and Other Transactions with Affiliates
Under the terms of the Investment Advisory Agreement, the Fund pays
AllianceBernstein, L.P. an advisory fee at an annual rate of .75 of 1% of the
average weekly adjusted net assets of the Fund. Such fee is accrued daily and
paid monthly.
Under the terms of the Shareholder Inquiry Agency Agreement with
AllianceBernstein Investor Services, Inc. (prior to February 24, 2006 known as
Alliance Global Investor Services, Inc.) ("ABIS"), a wholly-owned subsidiary of
the Adviser, the Fund reimburses ABIS for costs relating to servicing phone
inquiries on behalf of the Fund. During the year ended September 30, 2006, the
Fund reimbursed $335 to ABIS.
Under the terms of the Administration Agreement, the Fund pays Princeton
Administrators, LLC (the "Administrator") a fee at an annual rate of .12 of 1%
of the average weekly adjusted net assets of the Fund, but in no event less
than $12,500 per month. Such fee is accrued daily and paid monthly. The
Administrator prepares certain 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)
for the year ended September 30, 2006, were as follows:
Purchases Sales
Investment securities (excluding
U.S. government securities) $104,935,409 $113,118,337
U.S. government securities -0- -0-
ACM MANAGED DOLLAR INCOME FUND o 31
At September 30, 2006, the cost of investments for federal income tax purposes,
gross unrealized appreciation and gross unrealized depreciation (excluding
written options and swap contracts) are as follows:
Cost $180,426,372
Gross unrealized appreciation $11,974,709
Gross unrealized depreciation (6,039,480)
Net unrealized appreciation $5,935,229
1. Option Transactions
For hedging and investment purposes, the Fund may purchase and write (sell) put
and call options on U.S. and foreign government securities and foreign
currencies that are traded 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 a 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 the 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 recorded as
a liability and is subsequently adjusted to the current market value of the
option written. Premiums received from written options which expire unexercised
are recorded by the Fund on the expiration date as realized gains from options
written. The difference between the premium received and the amount paid on
effecting a closing purchase transaction, including brokerage commissions, is
also treated as a realized gain, or if the premium received is less than the
amount paid for the closing purchase transaction, as a realized loss. If a call
option is exercised, the premium received is added to the proceeds from the
sale of the underlying security or currency in determining whether the Fund has
realized a gain or loss. If a put option is exercised, the premium received
reduces the cost basis of the security or currency purchased by the Fund. In
writing an option, the Fund bears the market risk of an unfavorable change in
the price of the security or currency underlying the written option. Exercise
of an option written by the Fund could result in the Fund selling or buying a
security or currency at a price different from the current market value.
32 o ACM MANAGED DOLLAR INCOME FUND
Transactions in written options for the year ended September 30, 2006 were as
follows:
Number of
Contracts Premiums
(000) Received
Options outstanding at
September 30, 2005 -0- $ -0-
Options written 950 10,802
Options exercised -0- -0-
Options terminated in closing purchase
transactions (360) (4,280)
Options expired (590) (6,522)
Options outstanding at
September 30, 2006 -0- $ -0-
2. Swap Agreements
The Fund may enter into swaps on sovereign debt obligations to hedge its
exposure to interest rates and credit risk or 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 the counterparty 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 accrues for the interim payments on swap contracts on a daily basis,
with the net amount recorded within unrealized appreciation/depreciation of
swap contracts on the statement of assets and liabilities. Once the interim
payments are settled in cash, the net amount is recorded as realized gain/loss
on swaps, in addition to realized gain/loss recorded upon the termination of
swaps contracts on the statements of operations. Fluctuations in the value of
swap contracts are recorded as a component of net change in unrealized
appreciation/depreciation of investments.
The Fund may enter into credit default swaps. The Fund may purchase credit
protection on the referenced obligation of the credit default swap ("Buy
Contract") or provide credit protection on the referenced obligation of the
credit default swap ("Sale Contract"). A sale/(buy) in a credit default swap
pro-
ACM MANAGED DOLLAR INCOME FUND o 33
vides upon the occurrence of a credit event, as defined in the swap agreement,
for the Fund to buy/(sell) from/(to) the counterparty at the notional amount
(the "Notional Amount") and receive/(deliver) the principal amount of the
referenced obligation. If a credit event occurs, the maximum payout amount for
a Sale Contract is limited to the Notional Amount of the swap contract
("Maximum Payout Amount"). During the term of the swap agreement, the Fund
receives/(pays) interim fixed payments from/(to) the respective counterparty,
calculated at the agreed upon interest rate applied to the Notional Amount.
These interim payments are recorded within unrealized appreciation/depreciation
of swap contracts on the statement of assets and liabilities.
Credit default swaps may involve greater risks than if a Fund had invested in
the referenced obligation directly. Credit default swaps are subject to general
market risk, liquidity risk, counterparty risk and credit risk. If the Fund is
a buyer and no credit event occurs, it will lose its investment. In addition,
if the Fund is a seller and a credit event occurs, the value of the referenced
obligation received by the Fund coupled with the periodic payments previously
received, may be less than the Maximum Payout Amount it pays to the buyer,
resulting in a loss to the Fund.
At September 30, 2006, the Fund had Sale Contracts outstanding with Maximum
Payout Amounts aggregating $8,604,000, with net unrealized appreciation of
$251,760 and terms ranging from 1 year to 9 years, as reflected in the
portfolio of investments.
In certain circumstances, the Fund may hold Sale Contracts on the same
referenced obligation and with the same counterparty it has purchased credit
protection, which may reduce its obligation to make payments on Sale Contracts,
if a credit event occurs. As of September 30, 2006, the Fund did not have Buy
Contracts outstanding with respect to the same referenced obligation and same
counterparty of certain Sale Contracts outstanding.
3. Reverse Repurchase Agreements
Under a reverse repurchase agreement, the Fund sells securities and agrees to
repurchase them at a mutually agreed upon date and price. At the time the Fund
enters into a reverse repurchase agreement, it will establish a segregated
account with the custodian containing liquid assets having a value at least
equal to the repurchase price.
For the year ended September 30, 2006, the average amount of reverse repurchase
agreements outstanding was $25,287,925 and the daily weighted average annual
interest rate was 3.92%.
34 o ACM MANAGED DOLLAR INCOME FUND
NOTE D
Capital Stock
During the year ended September 30, 2006, the Fund did not issue any shares in
connection with the Fund's dividend reinvestment plan. During the year ended
September 30, 2005, the Fund issued 9,984 shares in connection with the Fund's
dividend reinvestment plan.
On July 5, 2006, the Fund purchased and retired 1,078,616 shares of its
outstanding common stock for $7.82 per share pursuant to a tender offer. The
Fund incurred costs of $170,000, which were charged to additional paid in
capital. At July 5, 2006, 20,493,702 shares of common stock were outstanding.
The purpose of the tender offer was to fulfill an undertaking made in
connection with the initial public offering price of the Fund's shares.
NOTE E
Risks Involved in Investing in the Fund
Interest Rate Risk and Credit Risk--Interest rate risk is the risk that changes
in interest rates will affect the value of the Fund's investments in
fixed-income debt securities such as bonds or notes. Increases in interest
rates may cause the value of the Fund's investments to decline. Credit risk is
the risk that the issuer or guarantor of a debt security, or the counterparty
to a derivative contract, will be unable or unwilling to make timely principal
and/or interest payments, or to otherwise honor its obligations. The degree of
risk for a particular security may be reflected in its credit risk rating.
Credit risk is greater for medium quality and lower-rated securities.
Lower-rated debt securities and similar unrated securities (commonly known as
"junk bonds") have speculative elements or are predominantly speculative risks.
Concentration of Risk--Investing in securities of foreign companies and foreign
governments involves special risks which include changes in foreign currency
exchange rates and the possibility of future political and economic
developments 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 U.S. 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 economics 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.
Leverage Risk--The Fund may use certain investment techniques that have
increased risks. For example, the Fund may use leverage, through borrowings, to
ACM MANAGED DOLLAR INCOME FUND o 35
enhance its returns. For this purpose, the Fund may use reverse repurchase
agreements and dollar rolls, which are considered borrowings, as part of its
investment strategy. Borrowings allow the Fund to increase the amount of money
available to invest in debt securities. As long as the income from the
securities financed is greater than the interest cost of the borrowings, the
Fund's investors benefit from higher returns than if the Fund were not
leveraged.
The use of leverage, which is usually considered speculative, involves certain
risks to stockholders. These include a higher volatility of the NAV of the
common stock caused by favorable or adverse changes in interest rates. In
addition, fluctuations in the interest rates on a fund's borrowings will affect
the return to stockholders, with increases in interest rates decreasing the
fund's return.
To the extent that the current interest rate on a fund's borrowings approaches
the net return on the leveraged portion of the fund's investment portfolio, the
benefit of leverage to stockholders will be reduced. If the current interest
rate on the borrowings were to exceed the net return on that portion of the
fund's portfolio, the fund's leverage would result in a lower rate of return to
stockholders and in a lower NAV than if a fund were not leveraged.
Indemnification Risk--In the ordinary course of business, the Fund enters into
contracts that contain a variety of indemnifications. The Fund's maximum
exposure under these arrangements is unknown. However, theFund has not had
prior claims or losses pursuant to these indemnification provisions and expects
the risk of loss thereunder to be remote.
NOTE F
Securities Lending
The Fund has entered into a securities lending agreement with AG Edwards &
Sons, Inc. (the "Lending Agent"). Under the terms of the agreement, the Lending
Agent, on behalf of the Fund, administers the lending of portfolio securities
to certain broker-dealers. In return, the Fund receives fee income from the
lending transactions or it retains a portion of interest on the investment of
any cash received as collateral. The Fund also continues to receive dividends
or interest on the securities loaned. Unrealized gain or loss on the value of
the securities loaned that may occur during the term of the loan will be
reflected in the accounts of the Fund. All loans are continuously secured by
collateral exceeding the value of the securities loaned. All collateral
consists of either cash or U.S. Government securities. The Lending Agent may
invest the cash collateral received in accordance with the investment
restrictions of the Fund in one or more of the following investments: U.S.
Government or U.S. Government agency obligations, bank obligations, corporate
debt obligations, asset-backed securities, structured products, repurchase
agreements and an eligible money
36 o ACM MANAGED DOLLAR INCOME FUND
market fund. The Lending Agent will indemnify the Fund for any loss resulting
from a borrower's failure to return a loaned security when due. As of September
30, 2006, the Fund had loaned securities with a value of $3,551,583 and
received cash collateral of $3,725,518, which was invested in a money market
fund as included in the portfolio of investments. For the year ended September
30, 2006, the Fund earned fee income of $44,443, which is included in interest
income in the accompanying statement of operations.
NOTE G
Distributions to Shareholders
The tax character of the distributions paid to shareholders during the fiscal
years ended September 30, 2006 and September 30, 2005 were as follows:
2006 2005
Distributions paid from:
Ordinary income $12,533,183 $15,094,355
Total taxable distributions 12,533,183 15,094,355
Tax return of capital -0- -0-
Total distributions paid $12,533,183 $15,094,355
As of September 30, 2006, the components of accumulated earnings/(deficit) on a
tax basis were as follows:
Accumulated capital and other losses $(115,812,596)(a)
Unrealized appreciation/(depreciation) 5,877,883(b)
Total accumulated earnings/(deficit) $(109,934,713)
(a) On September 30, 2006, the Fund had a net capital loss carryforward of
$115,812,596 of which $26,804,736 expires in the year 2007, $24,635,181 expires
in the year 2008, $10,899,598 expires in the year 2009, $33,249,705 expires in
2010 and $20,223,376 expires in the year 2011. To the extent future capital
gains are offset by capital loss carryforwards, such gains will not be
distributed. During the fiscal year, the Fund utilized capital loss
carryforwards of $13,260,337.
(b) The difference between book-basis and tax-basis unrealized
appreciation/(depreciation) is attributable primarily to the tax deferral of
losses on wash sales, the difference between book and tax amortization methods
for premium and the difference between book and tax treatment of swap income.
During the current fiscal year, permanent differences, primarily due to
distributions in excess of net investment income, the tax character of paydown
gains/losses, tax treatment of swap income and the tax treatment of bond
premium, resulted in a net decrease in distributions in excess of net
investment income, a net decrease in accumulated net realized loss on
investments and a decrease in additional paid-in capital. This reclassification
had no effect on net assets.
ACM MANAGED DOLLAR INCOME FUND o 37
NOTE H
Legal Proceedings
As has been previously reported, the staff of the U.S. Securities and Exchange
Commission ("SEC") and the Office of the New York Attorney General ("NYAG")
have been investigating practices in the mutual fund industry identified as
"market timing" and "late trading" of mutual fund shares. Certain other
regulatory authorities have also been conducting investigations into these
practices within the industry and have requested that the Adviser provide
information to them. The Adviser has been cooperating and will continue to
cooperate with all of these authorities. The shares of the Fund are not
redeemable by the Fund, but are traded on an exchange at prices established by
the market. Accordingly, the Fund and its shareholders are not subject to the
market timing and late trading practices that are the subject of the
investigations mentioned above or the lawsuits described below. Please see
below for a description of the agreements reached by the Adviser and the SEC
and NYAG in connection with the investigations mentioned above.
Numerous lawsuits have been filed against the Adviser and certain other
defendants in which plaintiffs make claims purportedly based on or related to
the same practices that are the subject of the SEC and NYAG investigations
referred to above. Some of these lawsuits name the Fund as a party. The
lawsuits are now pending in the United States District Court for the District
of Maryland pursuant to a ruling by the Judicial Panel on Multidistrict
Litigation transferring and centralizing all of the mutual funds involving
market and late trading in the District of Maryland (the "Mutual Fund MDL").
Management of the Adviser believes that these private lawsuits are not likely
to have a material adverse effect on the results of operations or financial
condition of the Fund.
On December 18, 2003, the Adviser confirmed that it had reached terms with the
SEC and the NYAG for the resolution of regulatory claims relating to the
practice of "market timing" mutual fund shares in some of the AllianceBernstein
Mutual Funds. The agreement with the SEC is reflected in an Order of the
Commission ("SEC Order"). The agreement with the NYAG is memorialized in an
Assurance of Discontinuation dated September 1, 2004 ("NYAGOrder"). Among the
key provisions of these agreements are the following:
(i) The Adviser agreed to establish a $250 million fund (the "Reimbursement
Fund") to compensate mutual fund shareholders for the adverse effects of market
timing attributable to market timing relationships described in the SEC Order.
According to the SEC Order, the Reimbursement Fund is to be paid, in order of
priority, to fund investors based on (i) their aliquot share of losses suffered
by the fund due to market timing, and (ii) a proportionate share of advisory
fees paid by such fund during the period of such market timing;
38 o ACM MANAGED DOLLAR INCOME FUND
(ii) The Adviser agreed to reduce the advisory fees it receives from some of
the AllianceBernstein long-term, open-end retail funds, commencing January 1,
2004, for a period of at least five years; and
(iii) The Adviser agreed to implement changes to its governance and compliance
procedures. Additionally, the SEC Order contemplates that the Adviser's
registered investment company clients, including the Fund, will introduce
governance and compliance changes.
The shares of the Fund are not redeemable by the Fund, but are traded on an
exchange at prices established by the market. Accordingly, the Fund and its
shareholders are not subject to the market timing practices described in the
SEC Order and are not expected to participate in the Reimbursement Fund. Since
the Fund is a closed-end fund, it will not have its advisory fee reduced
pursuant to the terms of the agreements mentioned above.
On February 10, 2004, the Adviser received (i) a subpoena duces tecum from the
Office of the Attorney General of the State of West Virginia and (ii) a request
for information from West Virginia's Office of the State Auditor, Securities
Commission (the "West Virginia Securities Commissioner") (together, the
"Information Requests"). Both Information Requests require the Adviser to
produce documents concerning, among other things, any market timing or late
trading in the Adviser's sponsored mutual funds. The Adviser responded to the
Information Requests and has been cooperating fully with the investigation.
On April 11, 2005, a complaint entitled The Attorney General of the State of
West Virginia v. AIM Advisors, Inc., et al. ("WVAG Complaint") was filed
against the Adviser, Alliance Capital Management Holding L.P. ("Alliance
Holding"), and various other defendants not affiliated with the Adviser. The
WVAG Complaint was filed in the Circuit Court of Marshall County, West Virginia
by the Attorney General of the State of West Virginia. The WVAG Complaint makes
factual allegations generally similar to those in certain of the complaints
related to the lawsuits discussed above. On October 19, 2005, the WVAG
Complaint was transferred to the Mutual Fund MDL.
On August 30, 2005, the West Virginia Securities Commissioner signed a Summary
Order to Cease and Desist, and Notice of Right to Hearing addressed to the
Adviser and Alliance Holding. The Summary Order claims that the Adviser and
Alliance Holding violated the West Virginia Uniform Securities Act, and makes
factual allegations generally similar to those in the SEC Order and the NYAG
Order. On January 26, 2006, the Adviser, Alliance Holding, and various
unaffiliated defendants filed a Petition for Writ of Prohibition and Order
Suspending Proceedings in West Virginia state court seeking to vacate the
Summary Order and for other relief. The court denied the writ and in September
2006 the Supreme Court of Appeals declined the defendants' petition for appeal.
ACM MANAGED DOLLAR INCOME FUND o 39
On September 22, 2006, Alliance and Alliance Holding filed an answer and motion
to dismiss the Summary Order with the Securities Commissioner.
On June 22, 2004, a purported class action complaint entitled Aucoin, et al. v.
Alliance Capital Management L.P., et al. ("Aucoin Complaint") was filed against
the Adviser, Alliance Capital Management Holding L.P., Alliance Capital
Management Corporation, AXA Financial, Inc., AllianceBernstein Investment
Research & Management, Inc., certain current and former directors of the
AllianceBernstein Mutual Funds, and unnamed Doe defendants. The Aucoin
Complaint names certain of the AllianceBernstein mutual funds as nominal
defendants. The Fund was not named as a defendant in the Aucoin Complaint. The
Aucoin Complaint was filed in the United States District Court for the Southern
District of New York by alleged shareholders of an AllianceBernstein mutual
fund. The Aucoin Complaint alleges, among other things, (i) that certain of the
defendants improperly authorized the payment of excessive commissions and other
fees from fund assets to broker-dealers in exchange for preferential marketing
services, (ii) that certain of the defendants misrepresented and omitted from
registration statements and other reports material facts concerning such
payments, and (iii) that certain defendants caused such conduct as control
persons of other defendants. The Aucoin Complaint asserts claims for violation
of Sections 34(b), 36(b) and 48(a) of the Investment Company Act, Sections 206
and 215 of the Advisers Act, breach of common law fiduciary duties, and aiding
and abetting breaches of common law fiduciary duties. Plaintiffs seek an
unspecified amount of compensatory damages and punitive damages, rescission of
their contracts with the Adviser, including recovery of all fees paid to the
Adviser pursuant to such contracts, an accounting of all fund-related fees,
commissions and soft dollar payments, and restitution of all unlawfully or
discriminatorily obtained fees and expenses.
Since June 22, 2004, nine additional lawsuits making factual allegations
substantially similar to those in the Aucoin Complaint were filed against the
Adviser and certain other defendants. All nine of the lawsuits (i) were brought
as class actions filed in the United States District Court for the Southern
District of New York, (ii) assert claims substantially identical to the Aucoin
Complaint, and (iii) are brought on behalf of shareholders of the Funds.
On February 2, 2005, plaintiffs filed a consolidated amended class action
complaint ("Aucoin Consolidated Amended Complaint") that asserts claims
substantially similar to the Aucoin Complaint and the nine additional lawsuits
referenced above. On October 19, 2005, the District Court dismissed each of the
claims set forth in the Aucoin Consolidated Amended Complaint, except for
plaintiffs' claim under Section 36(b) of the Investment Company Act. On January
11, 2006, the District Court granted defendants' motion for reconsideration and
dismissed the remaining Section 36(b) claim. On May 31, 2006 the District Court
denied plaintiffs' motion for leave to file an amended complaint. On
40 o ACM MANAGED DOLLAR INCOME FUND
July 5, 2006, plaintiffs filed a notice of appeal. On October 4, 2006 the
appeal was withdrawn by stipulation, with plaintiffs reserving the right to
reinstate it at a later date.
The Adviser believes that these matters are not likely to have a material
adverse effect on the Fund or the Adviser's ability to perform advisory
services relating to the Fund.
NOTE I
Recent Accounting Pronouncements
On July 13, 2006, the Financial Accounting Standards Board ("FASB") released
FASB Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" ("FIN
48"). FIN 48 provides guidance for how uncertain tax positions should be
recognized, measured, presented and disclosed in the financial statements. FIN
48 requires the evaluation of tax positions taken or expected to be taken in
the course of preparing the Fund's tax returns to determine whether the tax
positions are "more-likely-than-not" of being sustained by the applicable tax
authority. Tax positions not deemed to meet the more-likely-than-not threshold
would be recorded in the current period. Adoption of FIN 48 is required for
fiscal years beginning after December 15, 2006 and is to be applied to all open
tax years as of the effective date. At this time, management is evaluating the
implications of FIN 48 and its impact on the financial statements has not yet
been determined.
On September 20, 2006, the FASB released Statement of Financial Accounting
Standards No. 157 "Fair Value Measurements" ("FAS 157"). FAS 157 establishes an
authoritative definition of fair value, sets out a framework for measuring fair
value, and requires additional disclosures about fair-value measurements. The
application of FAS 157 is required for fiscal years beginning after November
15, 2007 and interim periods within those fiscal years. At this time,
management is evaluating the implications of FAS 157 and its impact on the
financial statements has not yet been determined.
ACM MANAGED DOLLAR INCOME FUND o 41
FINANCIAL HIGHLIGHTS
Selected Data For A Share Of Common Stock Outstanding Throughout Each Period
Year Ended September 30,
---------------------------------------------------------------------------
2006 2005 2004(a) 2003 2002(b)
---------------------------------------------------------------------------
Net asset value,
beginning of period $8.28 $7.87 $7.68 $5.58 $6.33
Income From Investment
Operations
Net investment income(c) 0.58 0.65 0.76 0.81 0.84
Net realized and unrealized
gain (loss) on investment
transactions (0.05) 0.43 0.23 2.10 (0.71)
Net increase (decrease) in net
asset value from operations 0.53 1.08 0.99 2.91 0.13
Less: Dividends and
Distributions
Dividends from net investment
income (0.59) (0.67) (0.80) (0.81) (0.85)
Tax return of capital -0- -0- -0- -0- (0.03)
Total dividends and
distributions (0.59) (0.67) (0.80) (0.81) (0.88)
Net asset value, end of period $8.22 $8.28 $7.87 $7.68 $5.58
Market value, end of period $7.37 $7.74 $7.87 $8.15 $6.29
Premium/(Discount) (10.34)% (6.52)% 0.00% 6.12% 12.72%
Total Return
Total investment return based
on:(d)
Market value 3.07% 7.10% 6.91% 45.71% (6.14)%
Net asset value 7.46% 14.57% 13.45% 54.77% .23%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $168,449 $178,560 $178,735 $173,182 $124,834
Ratios to average net assets of:
Expenses 1.71% 1.49% 1.44% 1.72% 2.12%
Expenses, excluding
interest expense(e) 1.13% 1.13% 1.15% 1.21% 1.15%
Net investment income 7.10% 8.06% 9.76% 11.88% 10.81%
Portfolio turnover rate 55% 63% 95% 80% 63%
See footnote summary on page 43.
42 o ACM MANAGED DOLLAR INCOME FUND
(a) As of October 1, 2003, the Fund has adopted the method of accounting for
interim payments on swap contracts in accordance with Financial Accounting
Standards Board Statement No. 133. These interim payments are reflected within
net realized and unrealized gain (loss) on swap contracts, however, prior to
October 1, 2003, these interim payments were reflected within interest
income/expense on the statement of operations. The effect of this change for
the fiscal year ended September 30, 2006, was to decrease net investment income
per share by $0.01 and increase net realized and unrealized gain (loss) on
investment transactions per share by $0.01 and decrease the ratio of net
investment income to average net assets by 0.15%.
(b) As required, effective October 1, 2001, the Fund has adopted the
provisions of the AICPA Audit and Accounting Guide, Audits of Investment
Companies, and began amortizing premium on debt securities for financial
statement reporting purposes only. The effect of this change for the year end
September 30, 2002 was to decrease net investment income per share by $0.01,
decrease net realized and unrealized loss on investment by $0.01 and decrease
the ratio of net investment income to average net assets from 10.91% to 10.81%.
Per share, ratios and supplemental data for periods prior to October 1, 2001
have not been restated to reflect this change in presentation.
(c) Based on average shares outstanding.
(d) 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
each 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 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.
(e) Excludes net interest expense of .61%, .36%, .29%, .51%, .97% and 1.62%,
respectively, on borrowings.
ACM MANAGED DOLLAR INCOME FUND o 43
REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
To the Shareholders and Board of Directors of 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, 2006, and the related statement 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 five years in the period then ended. 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 the standards of the Public Company
Accounting Oversight Board (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. We were not engaged to perform an audit of the Fund's internal
control over financial reporting. Our audits included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Fund's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights, assessing the accounting
principles used and significant estimates made by management, and evaluating
the overall financial statement presentation. Our procedures included
confirmation of securities owned as of September 30, 2006 by correspondence
with the custodian and others or by other appropriate auditing procedures where
replies from others were not received. 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, 2006, 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 five years in the period then ended, in conformity
with U.S. generally accepted accounting principles.
/s/ Ernst & Young LLP
New York, New York
November 17, 2006
44 o ACM MANAGED DOLLAR INCOME FUND
TAX INFORMATION
(unaudited)
57.2% of the ordinary income dividends paid by the Fund during the fiscal year
ended September, 2006, qualify as "interest related dividends" for non-U.S.
shareholders.
ACM MANAGED DOLLAR INCOME FUND o 45
ADDITIONAL INFORMATION
(unaudited)
ACM Managed Dollar Income Fund
Shareholders whose shares are registered in their own names may elect to be
participants in the Dividend Reinvestment Plan (the "Plan"), pursuant to which
distributions to shareholders will be paid in or reinvested in additional
shares of the Fund. Computershare Trust Company N.A. (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 a 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 Agent will receive the 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 Exchange or elsewhere, for the participants'
accounts. Such purchases will be made on or shortly after the payment date for
such 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 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 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 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, of any shares purchased in the open market
plus the cost of any shares issued by the Fund.
46 o ACM MANAGED DOLLAR INCOME FUND
The automatic reinvestment of distributions will not relieve participants of
any income taxes that may be payable (or required to be withheld) on
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
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
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 Computershare Trust
Company N.A., P.O. Box 43010, Providence, RI 02940-3010.
ACM MANAGED DOLLAR INCOME FUND o 47
BOARD OF DIRECTORS
William H. Foulk, Jr.,(1) Chairman
Marc O. Mayer, President
David H. Dievler(1)
John H. Dobkin(1)
Michael J. Downey(1)
D. James Guzy(1)
Nancy P. Jacklin(1)
Marshall C. Turner, Jr.(1)
OFFICERS
Philip L. Kirstein, Senior Vice President & Independent Compliance Officer
Paul J. DeNoon(2), Vice President
Gershon Distenfeld(2), Vice President
Emilie D. Wrapp, Secretary
Joseph J. Mantineo, Treasurer and Chief Financial Officer
Vincent S. Noto, Controller
Administrator
Princeton Administrators, LLC
P.O.Box 9095
Princeton, NJ 08543-9095
Custodian
State Street Bank and Trust Company
One Lincoln Street
Boston, MA 02111
Dividend Paying Agent, Transfer Agent and Registrar
ComputerShare Trust Company, N.A.
P.O. Box 43010
Providence, RI 02940-3010
Independent Registered Public
Accounting Firm
Ernst & Young LLP
5 Times Square
New York,NY 10036
Legal Counsel
Seward & Kissel LLP
One Battery Park Plaza
New York, NY 10004
(1) Member of the Audit Committee, the Governance and Nominating Committee, and
the Independent Directors Committee.
(2) The day-to-day management of, and investment decisions for, the Fund's
portfolio are made by the Global Fixed Income and Global Credit Teams. While
all members of the team work jointly to determine the majority of the
investment stategy including security selection for the Fund, Messrs. Paul J.
DeNoon and Gershon M. Distenfeld, members of the Global Fixed Income Emerging
Market Investment Team and Global Credit Team, respectively, are primarily
responsible for the day-to-day management of the Fund's portfolio.
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. The
financial information included hserein is taken from the records of the Fund.
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.
Annual Certifications - As required, on April 20, 2006, the Fund submitted
to the New York Stock Exchange ("NYSE") the annual certification of the Fund's
Chief Executive Officer certifying that he is not aware of any violation of the
NYSE's Corporate Governance listing standards. The Fund also has included the
certifications of the Fund's Chief Executive Officer and Chief Financial
Officer required by Section 302 of the Sarbanes-Oxley Act of 2002 as exhibits
to the Fund's Form N-CSR filed with the Securities and Exchange Commission for
the annual period.
48 o ACM MANAGED DOLLAR INCOME FUND
MANAGEMENT OF THE FUND
Board of Directors Information
The business and affairs of the Fund are managed under the direction of the
Board of Directors. Certain information concerning the Fund's Directors is set
forth below.
NAME, PORTFOLIOS
ADDRESS, PRINCIPAL IN FUND OTHER
AGE OCCUPATION(S) COMPLEX DIRECTORSHIP
OF DIRECTOR DURING PAST OVERSEEN BY HELD BY
(YEAR ELECTED*) 5 YEARS DIRECTOR DIRECTOR
-------------------------------------------------------------------------------------------------
INTERESTED DIRECTOR
Marc O. Mayer, + Executive Vice President of 111 SCB Partners,
1345 Avenue of the the Adviser since 2001 and Inc. and
Americas Executive Managing Director SCB, Inc.
New York, NY 10105 of AllianceBernstein Investments,
49 Inc. ("ABI") since 2003; prior thereto
(2003) he was head of AllianceBernstein
Institutional Investments, a unit of
the Adviser, from 2001-2003. Prior
thereto, Chief Executive Officer of
Sanford C. Bernstein & Co., LLC
(institutional research and broker-
age arm of Bernstein & Co. LLC)
and its predecessor since prior to
2001.
DISINTERESTED DIRECTORS
William H. Foulk, Jr.,# Investment adviser and an 113 None
P.O. Box 5060 independent consultant. He
Greenwich, CT 06831-0505 was formerly Senior Manager
74 of Barrett Associates, Inc., a
(1993) registered investment adviser,
Chairman of the Board with which he had been
associated since prior to 2001. He
was formerly Deputy Comptroller
and Chief Investment Officer of
the State of New York and, prior
thereto, Chief Investment Officer of
the New York Bank for Savings.
David H. Dievler,# Independent consultant. Until 112 None
P.O. Box 167 December 1994 he was Senior
Spring Lake, NJ 07762 Vice President of AllianceBernstein
77 Corporation ("AB Corp") (formerly
(1993) Alliance Capital Management
Corporation ("ACMC")) responsible
for mutual fund administration.
Prior to joining AB Corp in 1984 he
was Chief Financial Officer of
Eberstadt Asset Management
since 1968. Prior to that, he was a
Senior Manager at Price
Waterhouse & Co. Member of
American Institute of Certified
Public Accountants since 1953.
ACM MANAGED DOLLAR INCOME FUND o 49
NAME, PORTFOLIOS
ADDRESS, PRINCIPAL IN FUND OTHER
AGE OCCUPATION(S) COMPLEX DIRECTORSHIP
OF DIRECTOR DURING PAST OVERSEEN BY HELD BY
(YEAR ELECTED*) 5 YEARS DIRECTOR DIRECTOR
-------------------------------------------------------------------------------------------------
DISINTERESTED DIRECTORS
(continued)
John H. Dobkin,# Consultant. Formerly President of 111 None
P.O. Box 12 Save Venice, Inc. (preservation
Annandale, NY 12504 organization) from 2001-2002, a
64 Senior Advisor from June 1999-
(1993) June 2000 and President of
Historic Hudson Valley (historic
preservation) from December
1989-May 1999. Previously,
Director of the National Academy
of Design and during 1988-1992,
he was Director and Chairman of
the Audit Committee of AB Corp
(formerly ACMC).
Michael J. Downey, # Consultant since 2004. 111 Asia Pacific
c/o AllianceBernstein L.P. Formerly managing partner of Fund, Inc.
1345 Avenue of the Lexington Capital, LLC (investment and The
Americas advisory firm) from December 1997 Merger Fund
Attn: Philip L. Kirstein until December 2003. Prior thereto,
New York, NY 10105 Chairman and CEO of Prudential
62 Mutual Fund Management
(2005) (1987-1993).
D. James Guzy, # Chairman of the Board of PLX 111 Intel
P.O. Box 128 Technology (semi-conductors) and Corporation
Glenbrook, NV 89413 of SRC Computers Inc., with which (semi-
70 he has been associated since prior conductors);
(2005) to 2001. He is also President of the Cirrus Logic
Arbor Company (private family Corporation
investments). (semi-
conductors);
and the Davis
Selected
Advisors Group
of Mutual Funds
50 o ACM MANAGED DOLLAR INCOME FUND
NAME, PORTFOLIOS
ADDRESS, PRINCIPAL IN FUND OTHER
AGE OCCUPATION(S) COMPLEX DIRECTORSHIP
OF DIRECTOR DURING PAST OVERSEEN BY HELD BY
(YEAR ELECTED*) 5 YEARS DIRECTOR DIRECTOR
-------------------------------------------------------------------------------------------------
DISINTERESTED DIRECTORS
(continued)
Nancy P. Jacklin, # Formerly US Executive Director of 111 None
4046 Chancery Court NW the International Monetary Fund
Washington, DC 20007 (December 2002-May 2006); partner,
58 Clifford Chance (1992-2002); Senior
(2006) Counsel, International Banking and
Finance, and Associate General
Counsel, Citicorp (1985-1992);
Assistant General Counsel
(International), Federal Reserve
Board of Govenors (1982-1985);
and Attorney Advisor, US
Department of the Treasury (1973-
1982). Member of the Bar of the
District of Columbia and of New
York; member of the Council on
Foreign Relations.
Marshall C. Turner, Jr., # Principal of Turner Venture Associates 111 The George
220 Montgomery Street (venture capital and consulting) since Lucas
Penthouse 10 prior to 2001. From 2003 until May 31, Educational
San Francisco, CA 94104 2006, he was CEO of DuPont Foundation
65 Photomasks, Inc., Austin, Texas and National
(2005) (semi-conductor manufacturing Datacast, Inc.
services).
* There is no stated term of office for the Fund's directors.
# Member of the Audit Committee, the Governance and Nominating Committee, and
the Independent Directors Committee.
+ Mr. Mayer is an "interested person", as defined in the 1940 Act, due to his
position as an Executive Vice President of the Adviser.
ACM MANAGED DOLLAR INCOME FUND o 51
Officers of the Fund
Certain information concerning the Fund's Officers is listed below.
NAME,
ADDRESS* AND POSITION(S) PRINCIPAL OCCUPATION
AGE HELD WITH FUND DURING PAST 5 YEARS**
-------------------------------------------------------------------------------
Marc O. Mayer, President See biography above.
49
Philip L. Kirstein, Senior Vice President Senior Vice President and Independent
61 and Independent Compliance Officer of the
Compliance Officer AllianceBernstein Funds with which he
has been associated since October
2004. Prior thereto, he was Of Counsel
to Kirkpatrick & Lockhart, LLP from
October 2003 to October 2004, and
General Counsel of Merrill Lynch
Investment Managers, L.P. since prior
to 2001 until March 2003.
Paul J. DeNoon, Vice President Senior Vice President of the Adviser**,
44 with which he has been associated
since prior to 2001.
Gershon Distenfeld, Vice President Vice President of the Adviser**, with
30 which he has been associated since
prior to 2001.
Emilie D. Wrapp, Secretary Senior Vice President, Assistant
51 General Counsel and Assistant
Secretary of ABI**, with which she has
been associated since prior to 2001.
Joseph J. Mantineo Treasurer and Chief Senior Vice President of
47 Financial Officer AllianceBernstein Investor Services, Inc.
("ABIS")** with which he has been
associated since prior to 2001.
Vincent S. Noto, Controller Vice President of ABIS**, with which
41 he has been associated since prior to
2001.
* The address for each of the Fund's Officers is 1345 Avenue of the Americas,
New York, NY 10105.
** The Adviser, ABI and ABIS are affiliates of the Fund.
52 o ACM MANAGED DOLLAR INCOME FUND
Information Regarding the Review and Approval of the Fund's Advisory Agreement
The Fund's disinterested directors (the "directors") unanimously approved the
continuance of the Advisory Agreement between the Fund and the Adviser at a
meeting held on September 13, 2006.
In preparation for the meeting, the directors had requested from the Adviser
and received and evaluated extensive materials, including performance and
expense information for other investment companies with similar investment
objectives derived from data compiled by Lipper Inc. ("Lipper"), which is not
affiliated with the Adviser. Prior to voting, the directors reviewed the
proposed continuance of the Advisory Agreement with management and with
experienced counsel who are independent of the Adviser and received a
memorandum from such counsel discussing the legal standards for their
consideration of the proposed continuance. The directors also discussed the
proposed continuance in a private session at which only the directors, their
independent counsel and the Fund's Independent Compliance Officer were present.
In reaching their determinations relating to continuance of the Advisory
Agreement, the directors considered all factors they believed relevant,
including the following:
1. information comparing the performance of the Fund to other
investment companies with similar investment objectives and to an index;
2. the nature, extent and quality of investment, compliance,
administrative and other services rendered by the Adviser;
3. payments received by the Adviser from all sources in respect of the
Fund and all investment companies in the AllianceBernstein Funds complex;
4. the costs borne by, and profitability of, the Adviser and its
affiliates in providing services to the Fund and to all investment companies in
the AllianceBernstein Funds complex;
5. comparative fee and expense data for the Fund and other investment
companies with similar investment objectives;
6. the extent to which economies of scale would be realized to the
extent the Fund grows and whether fee levels reflect any economies of scale for
the benefit of investors;
7. the Adviser's policies and practices regarding allocation of
portfolio transactions of the Fund;
8. portfolio turnover rates for the Fund compared to other investment
companies with similar investment objectives;
9. fall-out benefits which the Adviser and its affiliates receive from
their relationships with the Fund;
ACM MANAGED DOLLAR INCOME FUND o 53
10. the Adviser's representation that there are no institutional
products managed by the Adviser which have a substantially similar investment
style as the Fund;
11. the professional experience and qualifications of the Fund's
portfolio management team and other senior personnel of the Adviser; and
12. the terms of the Advisory Agreement.
The directors also considered their knowledge of the nature and quality of the
services provided by the Adviser to the Fund gained from their experience as
directors or trustees of most of the registered investment companies advised by
the Adviser, their overall confidence in the Adviser's integrity and competence
they have gained from that experience and the Adviser's responsiveness to
concerns raised by them in the past, including the Adviser's willingness to
consider and implement organizational and operational changes designed to
improve investment results and the services provided to the AllianceBernstein
Funds.
In their deliberations, the directors did not identify any particular
information that was all-important or controlling, and different directors may
have attributed different weights to the various factors.
The directors determined that the overall arrangements between the Fund and the
Adviser, as provided in the Advisory Agreement, were fair and reasonable in
light of the services performed, expenses incurred and such other matters as
the directors considered relevant in the exercise of their business judgment.
The material factors and conclusions that formed the basis for the directors
reaching their determinations to approve the continuance of the Advisory
Agreement (including their determinations that the Adviser should continue to
be the investment adviser for the Fund, and that the fees payable to the
Adviser pursuant to the Advisory Agreement are appropriate) were separately
discussed by the directors.
Nature, Extent and Quality of Services Provided by the Adviser
The directors noted that, under the Advisory Agreement, the Adviser, subject to
the oversight of the directors, administers the Fund's business and other
affairs. The Adviser manages the investment of the assets of the Fund,
including making purchases and sales of portfolio securities consistent with
the Fund's investment objective and policies. The Adviser also provides the
Fund with such office space, administrative and other services (exclusive of,
and in addition to, any such services provided by any others retained by the
Fund) and executive and other personnel as are necessary for the Fund's
operations. The Adviser pays all of the compensation of directors of the Fund
who are affiliated persons of the Adviser and of the officers of the Fund.
54 o ACM MANAGED DOLLAR INCOME FUND
The directors noted that the Advisory Agreement for the Fund does not contain a
reimbursement provision for the cost of certain administrative and other
services provided by the Adviser. The directors noted that the Fund has a
separate administration agreement and pays separate administration fees to its
administrator.
The directors considered the scope and quality of services provided by the
Adviser under the Advisory Agreement and noted that the scope of services
provided by advisers and administrators of funds had expanded over time as a
result of regulatory and other developments. The directors noted that, for
example, the Adviser is responsible for maintaining and monitoring its own and,
to varying degrees, the Fund's compliance programs, and these compliance
programs have recently been refined and enhanced in light of new regulatory
requirements. The directors considered the quality of the in-house investment
research capabilities of the Adviser and the other resources it has dedicated
to performing services for the Fund. The quality of administrative and other
services, including the Adviser's role in coordinating the activities of the
Fund's other service providers, also were considered. The directors also
considered the Adviser's response to recent regulatory compliance issues
affecting a number of the investment companies in the AllianceBernstein Funds
complex. The directors concluded that, overall, they were satisfied with the
nature, extent and quality of services provided to the Fund under the Advisory
Agreement.
Costs of Services Provided and Profitability to the Adviser
The directors reviewed a schedule of the revenues, expenses and related notes
indicating the profitability of the Fund to the Adviser for calendar years 2004
and 2005 that had been prepared with an updated expense allocation methodology.
The directors noted that the updated methodology differed in various respects
from the methodology used in prior years. The directors reviewed the
assumptions and methods of allocation used by the Adviser in preparing
fund-specific profitability data, and noted the Adviser's representation to
them that it believed that the methods of allocation used in preparing the
profitability information were reasonable and appropriate and that the Adviser
had previously discussed with the directors that there is no generally accepted
allocation methodology for information of this type.
The directors recognized that it is difficult to make comparisons of
profitability from fund advisory contracts because comparative information is
not generally publicly available and is affected by numerous factors, including
the structure of the particular adviser, the types of funds it manages, its
business mix, numerous assumptions regarding allocations and the adviser's
capital structure and cost of capital. In considering profitability
information, the directors considered the effect of fall-out benefits on the
Adviser's expenses. The directors focused on the profitability of the Adviser's
relationship with the Fund before taxes. The directors recognized that the
Adviser should generally be entitled to earn a reasonable
ACM MANAGED DOLLAR INCOME FUND o 55
level of profits for the services it provides to the Fund and, based on their
review, concluded that they were satisfied that the Adviser's level of
profitability from its relationship with the Fund was not excessive.
Fall-Out Benefits
The directors considered that the Adviser benefits from soft dollar
arrangements whereby it receives brokerage and research services from many of
the brokers and dealers that execute purchases and sales of securities on
behalf of its clients on an agency basis. The directors noted that since the
Fund does not engage in brokerage transactions, the Adviser does not receive
soft dollar benefits in respect of portfolio transactions of the Fund. The
directors also noted that a subsidiary of the Adviser provides certain
shareholder services to the Fund and receives compensation from the Fund for
such services.
The directors recognized that the Adviser's profitability would be somewhat
lower if the Adviser's subsidiary did not receive the benefits described above.
The directors understood that the Adviser also might derive reputational and
other benefits from its association with the Fund.
Investment Results
In addition to the information reviewed by the directors in connection with the
meeting, the directors receive detailed comparative performance information for
the Fund at each regular Board meeting during the year. At the meeting, the
directors reviewed information prepared by the Adviser based on information
obtained from Lipper showing performance of the Fund as compared to other funds
in the Lipper Flexible Income Funds Average (the "Lipper Average") for periods
ended June 30, 2006 over the year to date ("YTD"), 1-, 3-, 5- and 10-year and
since inception periods (inception October 1993) and for each of the last ten
calendar years, and as compared to the JP Morgan Emerging Markets Bond Index
Plus (the "Index") for periods ended June 30, 2006 for the YTD, 1-, 3-, 5- and
10-year periods (information was not available for the since inception period).
The directors noted that in the Lipper Average comparison (seven funds in the
YTD period, including the Fund and ACM Managed Income Fund, Inc., another
closed-end fund advised by the Adviser), the Fund's performance was
significantly above the Lipper median in all periods reviewed except in the YTD
period when it was materially below the Lipper median and that the Fund's
calendar year performance was also significantly above the Lipper median in
every year except 2002 when it was materially below the Lipper median and 1998
and 2000 when it was significantly below the Lipper median. The directors
further noted that the Fund outperformed the Index in the YTD, 3- and 5-year
periods and underperformed the Index in the 1- and 10-year periods. Based on
their review, the directors concluded that the Fund's relative performance over
time was satisfactory.
56 o ACM MANAGED DOLLAR INCOME FUND
Advisory Fees and Other Expenses
The directors considered the latest fiscal period actual management fees paid
by the Fund (advisory fees paid to the Adviser and administration fees paid to
an entity that is not affiliated with the Adviser for administrative services)
and information prepared by Lipper concerning fee rates paid by other funds in
the same Lipper category as the Fund. They compared the combined advisory and
administration fees paid by the Fund to the advisory fees of other funds where
there is no separate administrator. The directors recognized that it is
difficult to make comparisons of advisory fees because there are variations in
the services that are included in the fees paid by other funds.
The directors noted that in connection with the settlement of the market timing
matter with the New York Attorney General ("NYAG"), the Adviser agreed to
material reductions (averaging 20%) in the fee schedules of most of the
open-end funds sponsored by the Adviser (other than money market funds) and
that the open-end funds had benefited from such reductions since 2004. The
directors noted that the Fund's contractual advisory fee rate was the same as
the rate charged to comparable open-end funds managed by the Adviser prior to
the reductions made as a result of the settlement with the NYAG. The directors
had previously requested a reduction in the advisory fees of the Fund to the
levels charged to comparable open-end funds managed by the Adviser, and had
considered the Adviser's position that no fee adjustments were warranted in the
Fund's particular circumstances on several occasions.
The Adviser informed the directors that there are no institutional products
managed by it that have a substantially similar investment style as the Fund.
The directors reviewed information in the Adviser's Form ADV and noted that it
charges institutional clients lower fees for advising comparably sized accounts
using strategies that differ from those of the Fund but which involve
investments in securities of the same type that the Fund invests in (i.e.,
fixed income). They had previously received an oral presentation from the
Adviser that supplemented such information.
The Adviser reviewed with the directors the significant differences in the
scope of services it provides to institutional clients and to the Fund. For
example, the Advisory Agreement requires the Adviser to provide, in addition to
investment advice, office facilities and officers (including officers to
provide required certifications). The Adviser also coordinates the provision of
services to the Fund by non-affiliated service providers and is responsible for
the compensation of the Fund's Independent Compliance Officer and certain
related expenses. The provision of these non-advisory services involves costs
and exposure to liability. The Adviser explained that many of these services
normally are not provided to non-investment company clients and that fees
charged to the Fund reflect the costs and risks of the additional obligations.
In light of these facts, the directors did not place significant weight on
these fee comparisons.
ACM MANAGED DOLLAR INCOME FUND o 57
The directors also considered the total expense ratio of the Fund in comparison
to the fees and expenses of funds within two comparison groups created by
Lipper: an Expense Group and an Expense Universe. Lipper described an Expense
Group as a representative sample of comparable funds and an Expense Universe as
a broader group, consisting of all funds in the Fund's investment
classification/ objective with a similar load type as the Fund. The directors
noted that because of the small number of funds in the Fund's Lipper category,
at the request of the Adviser and the Fund's Senior Officer, Lipper expanded
the Expense Group and Expense Universe of the Fund to include funds that are
allowed to utilize leverage but do not do so. The expense ratio of the Fund was
based on the Fund's latest fiscal year expense ratio. The directors recognized
that the expense ratio information for the Fund potentially reflected on the
Adviser's provision of services, as the Adviser is responsible for coordinating
services provided to the Fund by others. The directors noted that the expense
ratios of some funds in the Fund's Lipper category also were lowered by waivers
or reimbursements by those funds' investment advisers, which in some cases were
voluntary and perhaps temporary.
The information reviewed by the directors showed that the Fund's latest fiscal
period actual management fees of 87 basis points (combined advisory fee paid
under the Advisory Agreement and an administration fee paid to an entity that
is not affiliated with the Adviser) were significantly higher than the Expense
Group median and slightly higher than the Expense Universe median. The
directors also noted that the Fund's total expense ratio was the same as the
Expense Group median and significantly higher than the Expense Universe median.
The directors also noted that the Adviser had recently reviewed with them steps
being taken that are intended to reduce expenses of the AllianceBernstein
Funds. The directors concluded that the Fund's expense ratio was acceptable.
Economies of Scale
The directors considered that the Fund is a closed-end Fund and that it was not
expected to have meaningful asset growth as a result. In such circumstances,
the directors did not view the potential for realization of economies of scale
as the Fund's assets grow to be a material factor in their deliberations. The
directors noted that if the Fund's net assets were to increase materially as a
result of, e.g., an acquisition or rights offering, they would review whether
potential economies of scale would be realized by the Adviser.
58 o ACM MANAGED DOLLAR INCOME FUND
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) 219-4218. The Fund also distributes its daily
net asset value to various financial publications or independent organizations
such as Lipper, Inc., Morningstar, Inc. and Bloomberg. 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."
Information Regarding New or Amended Investment Policies
The Fund's Board of Directors recently approved a broader investment policy
that permits the Fund to invest in other investment companies to the full
extent permitted by the Investment Company Act of 1940 (the "1940 Act") and the
rules thereunder. The Board of Directors also approved the Fund's investments
of uninvested cash balances in an affiliated money market fund as permitted by
Rule 12d1-1 under the 1940 Act.
Dividend Reinvestment Plan
Pursuant to the Fund's Dividend Reinvestment 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 ComputerShare Trust Company,
N.A., 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
paid by check mailed directly to the record holder by or under the direction of
ComputerShare Trust Company, N.A. For questions concerning Shareholder account
information, or if you would like a brochure describing the Dividend
Reinvestment Plan, please call ComputerShare Trust Company, N.A. at (800)
219-4218.
ACM MANAGED DOLLAR INCOME FUND o 59
THIS PAGE IS NOT PART OF THE SHAREHOLDER REPORT OR THE FINANCIAL STATEMENTS
ALLIANCEBERNSTEIN FAMILY OF FUNDS
--------------------------------------------
Wealth Strategies Funds
--------------------------------------------
Balanced Wealth Strategy
Wealth Appreciation Strategy
Wealth Preservation Strategy
Tax-Managed Balanced Wealth Strategy
Tax-Managed Wealth Appreciation Strategy
Tax-Managed Wealth Preservation Strategy
--------------------------------------------
Blended Style Funds
--------------------------------------------
U.S. Large Cap Portfolio
International Portfolio
Tax-Managed International Portfolio
--------------------------------------------
Growth Funds
--------------------------------------------
Domestic
Growth Fund
Mid-Cap Growth Fund
Large Cap Growth Fund
Small Cap Growth Portfolio
Global & International
Global Health Care Fund
Global Research Growth Fund
Global Technology Fund
Greater China '97 Fund
International Growth Fund
International Research Growth Fund
--------------------------------------------
Value Funds
--------------------------------------------
Domestic
Balanced Shares
Focused Growth & Income Fund
Growth & Income Fund
Real Estate Investment Fund
Small/Mid-Cap Value Fund
Utility Income Fund
Value Fund
Global & International
Global Value Fund
International Value Fund
--------------------------------------------
Taxable Bond Funds
--------------------------------------------
Global Government Income Trust*
Corporate Bond Portfolio
Emerging Market Debt Fund
Global Strategic Income Trust
High Yield Fund
Intermediate Bond Portfolio*
Short Duration Portfolio
U.S. Government Portfolio
--------------------------------------------
Municipal Bond Funds
--------------------------------------------
National Michigan
Insured National Minnesota
Arizona New Jersey
California New York
Insured California Ohio
Florida Pennsylvania
Massachusetts Virginia
--------------------------------------------
Intermediate Municipal Bond Funds
--------------------------------------------
Intermediate California
Intermediate Diversified
Intermediate New York
--------------------------------------------
Closed-End Funds
--------------------------------------------
All-Market Advantage Fund
ACM Income Fund
ACM Government Opportunity Fund
ACM Managed Dollar Income Fund
ACM Managed Income Fund
ACM Municipal Securities Income Fund
California Municipal Income Fund
National Municipal Income Fund
New York Municipal Income Fund
The Spain Fund
World Dollar Government Fund
World Dollar Government Fund II
--------------------------------------------
Retirement Strategies Funds
--------------------------------------------
2000 Retirement Strategy
2005 Retirement Strategy
2010 Retirement Strategy
2015 Retirement Strategy
2020 Retirement Strategy
2025 Retirement Strategy
2030 Retirement Strategy
2035 Retirement Strategy
2040 Retirement Strategy
2045 Retirement Strategy
We also offer Exchange Reserves,** which serves as the money market fund
exchange vehicle for the AllianceBernstein mutual funds.
For more complete information on any AllianceBernstein mutual fund, including
investment objectives and policies, sales charges, expenses, risks and other
matters of importance to prospective investors, visit our website at
www.alliancebernstein.com or call us at 800.227.4618 for a current prospectus.
You should read the prospectus carefully before you invest.
* Prior to February 1, 2006, Global Government Income Trust was named Americas
Government Income Trust and Intermediate Bond Portfolio was named Quality Bond
Portfolio.
** An investment in the Fund is not a deposit in a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. Although the Fund seeks to preserve the value of your investment at
$1.00 per share, it is possible to lose money by investing in the Fund.
60 o ACM MANAGED DOLLAR INCOME FUND
Privacy Notice
AllianceBernstein, the AllianceBernstein Family of Funds and AllianceBernstein
Investments, Inc. (collectively, "AllianceBernstein" or "we") understand the
importance of maintaining the confidentiality of our customers' nonpublic
personal information. In order to provide financial products and services to
our customers efficiently and accurately, we may collect nonpublic personal
information about our customers from the following sources: (1) information we
receive from account documentation, including applications or other forms
(which may include information such as a customer's name, address, social
security number, assets and income) and (2) information about our customers'
transactions with us, our affiliates and others (including information such as
a customer's account balances and account activity).
It is our policy not to disclose nonpublic personal information about our
customers (or former customers) except to our affiliates, or to others as
permitted or required by law. From time to time, AllianceBernstein may disclose
nonpublic personal information that we collect about our customers (or former
customers), as described above, to non-affiliated third party providers,
including those that perform processing or servicing functions and those that
provide marketing services for us or on our behalf pursuant to a joint
marketing agreement that requires the third party provider to adhere to
AllianceBernstein's privacy policy. We have policies and procedures to
safeguard nonpublic personal information about our customers (or former
customers) which include: (1) restricting access to such nonpublic personal
information and (2) maintaining physical, electronic and procedural safeguards
that comply with federal standards to safeguard such nonpublic personal
information.
ACM MANAGED DOLLAR INCOME FUND
1345 Avenue of the Americas
New York, NY 10105
(800) 221-5672
[LOGO]
ALLIANCEBERNSTEIN
INVESTMENTS
ACMV-0151-0906
ITEM 2. CODE OF ETHICS.
(a) The registrant has adopted a code of ethics that applies to its principal
executive officer, principal financial officer and principal accounting
officer. A copy of the registrant's code of ethics is filed herewith as
Exhibit 12(a)(1).
(b) During the period covered by this report, no material amendments were made
to the provisions of the code of ethics adopted in 2(a) above.
(c) During the period covered by this report, no implicit or explicit waivers
to the provisions of the code of ethics adopted in 2(a) above were granted.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The registrant's Board of Directors has determined that independent directors
David H. Dievler and William H. Foulk, Jr. qualify as audit committee financial
experts.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) - (c) The following table sets forth the aggregate fees billed by the
independent registered public accounting firm Ernst & Young LLP, for the
Fund's last two fiscal years for professional services rendered for: (i) the
audit of the Fund's annual financial statements included in the Fund's annual
report to stockholders; (ii) assurance and related services that are
reasonably related to the performance of the audit of the Fund's financial
statements and are not reported under (i), which include advice and education
related to accounting and auditing issues and quarterly press release review
(for those Funds that issue quarterly press releases), and preferred stock
maintenance testing (for those Funds that issue preferred stock); and (iii)
tax compliance, tax advice and tax return preparation.
Audit-Related
Audit Fees Fees Tax Fees
---------- ------------- --------
2005 $53,000 $8,355 $18,304
2006 $56,000 $8,460 $19,375
(d) Not applicable.
(e) (1) Beginning with audit and non-audit service contracts entered into on or
after May 6, 2003, the Fund's Audit Committee policies and procedures require
the pre-approval of all audit and non-audit services provided to the Fund by
the Fund's independent registered public accounting firm. The Fund's Audit
Committee policies and procedures also require pre-approval of all audit and
non-audit services provided to the Adviser and Service Affiliates to the
extent that these services are directly related to the operations or
financial reporting of the Fund.
(e) (2) All of the amounts for Audit Fees, Audit-Related Fees and Tax Fees in
the table under Item 4 (a) - (c) are for services pre-approved by the Fund's
Audit Committee.
(f) Not applicable.
(g) The following table sets forth the aggregate non-audit services provided to
the Fund, the Fund's Adviser and entities that control, are controlled by or
under common control with the Adviser that provide ongoing services to the
Fund, which include conducting an annual internal control report pursuant to
Statement on Auditing Standards No. 70 ("Service Affiliates"):
Total Amount of
Foregoing Column
Pre-approved by the
All Fees for Audit Committee
Non-Audit Services (Portion Comprised of
Provided to the Audit Related Fees)
Portfolio, the Adviser (Portion Comprised of
and Service Affiliates Tax Fees)
---------------------- ---------------------
2005 $903,852 [ $196,659 ]
( $178,355 )
( $18,304 )
2006 $691,479 [ $161,506 ]
( $142,131 )
( $19,375 )
(h) The Audit Committee of the Fund has considered whether the provision of any
non-audit services not pre-approved by the Audit Committee provided by the
Fund's independent auditor to the Adviser and Service Affiliates is compatible
with maintaining the auditor's independence.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
The registrant has a separately-designated standing audit committee established
in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934.
The audit committee members are as follows:
David H. Dievler William H. Foulk, Jr
John H. Dobkin D. James Guzy
Michael J. Downey Nancy P. Jacklin
Marshall C. Turner, Jr.
ITEM 6. SCHEDULE OF INVESTMENTS.
Please see Schedule of Investments contained in the Report to Shareholders
included under Item 1 of this Form N-CSR.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Statement of Policies and Procedures for Proxy Voting
October 2006
1. Introduction
As a registered investment adviser, AllianceBernstein L.P.
("AllianceBernstein", "we" or "us") has a fiduciary duty to act solely in the
best interests of our clients. We recognize that this duty requires us to vote
client securities in a timely manner and make voting decisions that are in the
best interests of our clients. Consistent with these obligations, we will
disclose our clients' voting records only to them and as required by mutual
fund vote disclosure regulations. In addition, the proxy committees may, after
careful consideration, choose to respond to surveys regarding past votes.
This statement is intended to comply with Rule 206(4)-6 of the Investment
Advisers Act of 1940. It sets forth our policies and procedures for voting
proxies for our discretionary investment advisory clients, including investment
companies registered under the Investment Company Act of 1940. This statement
applies to AllianceBernstein's growth, value and blend investment groups
investing on behalf of clients in both US and non-US securities.
2. Proxy Policies
This statement is designed to be responsive to the wide range of proxy voting
subjects that can have a significant effect on the investment value of the
securities held in our clients' accounts. These policies are not exhaustive
due to the variety of proxy voting issues that we may be required to consider.
AllianceBernstein reserves the right to depart from these guidelines in order
to avoid voting decisions that we believe may be contrary to our clients' best
interests. In reviewing proxy issues, we will apply the following general
policies:
2.1 Corporate Governance
AllianceBernstein's proxy voting policies recognize the importance of good
corporate governance in ensuring that management and the board of directors
fulfill their obligations to the shareholders. We favor proposals promoting
transparency and accountability within a company. We will vote for proposals
providing for equal access to the proxy materials so that shareholders can
express their views on various proxy issues. We also support the appointment
of a majority of independent directors on key committees and separating the
positions of chairman and chief executive officer. Finally, because we believe
that good corporate governance requires shareholders to have a meaningful voice
in the affairs of the company, we will support shareholder proposals that
request that companies amend their by-laws to provide that director nominees be
elected by an affirmative vote of a majority of the votes cast.
2.2 Elections of Directors
Unless there is a proxy fight for seats on the Board or we determine that there
are other compelling reasons for withholding votes for directors, we will vote
in favor of the management proposed slate of directors. That said, we believe
that directors have a duty to respond to shareholder actions that have received
significant shareholder support. We may withhold votes for directors (or vote
against in non-US markets) that fail to act on key issues such as failure to
implement proposals to declassify boards, failure to implement a majority vote
requirement, failure to submit a rights plan to a shareholder vote or failure
to act on tender offers where a majority of shareholders have tendered their
shares. In addition, we will withhold votes for directors who fail to attend
at least seventy-five percent of board meetings within a given year without a
reasonable excuse. Finally, we may abstain or vote against directors of
non-U.S. issuers where there is insufficient information about the nominees
disclosed in the proxy statement.
2.3 Appointment of Auditors
AllianceBernstein believes that the company remains in the best position to
choose the auditors and will generally support management's recommendation.
However, we recognize that there may be inherent conflicts when a company's
independent auditor performs substantial non-audit related services for the
company. The Sarbanes-Oxley Act of 2002 prohibited certain categories of
services by auditors to US issuers, making this issue less prevalent in the US.
Nevertheless, in reviewing a proposed auditor, we will consider the fees paid
for non-audit services relative to total fees as well as if there are other
reasons to question the independence of the auditors.
2.4 Changes in Legal and Capital Structure
Changes in a company's charter, articles of incorporation or by-laws are often
technical and administrative in nature. Absent a compelling reason to the
contrary, AllianceBernstein will cast its votes in accordance with the
company's management on such proposals. However, we will review and analyze on
a case-by-case basis any non-routine proposals that are likely to affect the
structure and operation of the company or have a material economic effect on
the company. For example, we will generally support proposals to increase
authorized common stock when it is necessary to implement a stock split, aid in
a restructuring or acquisition or provide a sufficient number of shares for an
employee savings plan, stock option or executive compensation plan. However, a
satisfactory explanation of a company's intentions must be disclosed in the
proxy statement for proposals requesting an increase of greater than one
hundred percent of the shares outstanding. We will oppose increases in
authorized common stock where there is evidence that the shares will be used to
implement a poison pill or another form of anti-takeover device. We will
support shareholder proposals that seek to eliminate dual class voting
structures.
2.5 Corporate Restructurings, Mergers and Acquisitions
AllianceBernstein believes proxy votes dealing with corporate reorganizations
are an extension of the investment decision. Accordingly, we will analyze such
proposals on a case-by-case basis, weighing heavily the views of our research
analysts that cover the company and our investment professionals managing the
portfolios in which the stock is held.
2.6 Proposals Affecting Shareholder Rights
AllianceBernstein believes that certain fundamental rights of shareholders must
be protected. We will generally vote in favor of proposals that give
shareholders a greater voice in the affairs of the company and oppose any
measure that seeks to limit those rights. However, when analyzing such
proposals we will weigh the financial impact of the proposal against the
impairment of shareholder rights.
2.7 Anti-Takeover Measures
AllianceBernstein believes that measures that impede corporate transactions
such as takeovers or entrench management not only infringe on the rights of
shareholders but may also have a detrimental effect on the value of the
company. We will generally oppose proposals, regardless of whether they are
advanced by management or shareholders, the purpose or effect of which is to
entrench management or excessively or inappropriately dilute shareholder
ownership. Conversely, we support proposals that would restrict or otherwise
eliminate anti-takeover or anti-shareholder measures that have already been
adopted by corporate issuers. For example, we will support shareholder
proposals that seek to require the company to submit a shareholder rights plan
to a shareholder vote. We will evaluate, on a case-by-case basis, proposals to
completely redeem or eliminate such plans. Furthermore, we will generally
oppose proposals put forward by management (including the authorization of
blank check preferred stock, classified boards and supermajority vote
requirements) that appear to be anti-shareholder or intended as management
entrenchment mechanisms.
2.8 Executive Compensation
AllianceBernstein believes that company management and the compensation
committee of the board of directors should, within reason, be given latitude to
determine the types and mix of compensation and benefit awards offered to
company employees. Whether proposed by a shareholder or management, we will
review proposals relating to executive compensation plans on a case-by-case
basis to ensure that the long-term interests of management and shareholders are
properly aligned. In general, we will analyze the proposed plan to ensure that
shareholder equity will not be excessively diluted taking into account shares
available for grant under the proposed plan as well as other existing plans.
We generally will oppose plans that have below market value grant or exercise
prices on the date of issuance or permit repricing of underwater stock options
without shareholder approval. Other factors such as the company's performance
and industry practice will generally be factored into our analysis. We
generally will support shareholder proposals seeking additional disclosure of
executive and director compensation. This policy includes proposals that seek
to specify the measurement of performance based compensation. In addition, we
will support proposals requiring managements to submit severance packages that
exceed 2.99 times the sum of an executive officer's base salary plus bonus that
are triggered by a change in control to a shareholder vote. Finally, we will
support shareholder proposals requiring companies to expense stock options
because we view them as a large corporate expense that should be appropriately
accounted for.
2.9 Social and Corporate Responsibility
AllianceBernstein will review and analyze on a case-by-case basis proposals
relating to social, political and environmental issues to determine whether
they will have a financial impact on shareholder value. We will vote against
proposals that are unduly burdensome or result in unnecessary and excessive
costs to the company. We may abstain from voting on social proposals that do
not have a readily determinable financial impact on shareholder value.
3. Proxy Voting Procedures
3.1 Proxy Voting Committees
Our growth and value investment groups have formed separate proxy voting
committees to establish general proxy policies for AllianceBernstein and
consider specific proxy voting matters as necessary. These committees
periodically review these policies and new types of corporate governance
issues, and decide how we should vote on proposals not covered by these
policies. When a proxy vote cannot be clearly decided by an application of our
stated policy, the proxy committee will evaluate the proposal. In addition,
the committees, in conjunction with the analyst that covers the company, may
contact corporate management and interested shareholder groups and others as
necessary to discuss proxy issues. Members of the committee include senior
investment personnel and representatives of the Legal and Compliance
Department. The committees may also evaluate proxies where we face a potential
conflict of interest (as discussed below). Finally, the committees monitor
adherence to these policies.
3.2 Conflicts of Interest
AllianceBernstein recognizes that there may be a potential conflict of interest
when we vote a proxy solicited by an issuer whose retirement plan we manage, or
we administer, who distributes AllianceBernstein sponsored mutual funds, or
with whom we or an employee has another business or personal relationship that
may affect how we vote on the issuer's proxy. Similarly, AllianceBernstein may
have a potential material conflict of interest when deciding how to vote on a
proposal sponsored or supported by a shareholder group that is a client. We
believe that centralized management of proxy voting, oversight by the proxy
voting committees and adherence to these policies ensures that proxies are
voted with only our clients' best interests in mind. Additionally, we have
implemented procedures to ensure that our votes are not the product of a
material conflict of interests, including: (i) on an annual basis, the proxy
committees will take reasonable steps to evaluate the nature of
AllianceBernstein's and our employees' material business and personal
relationships (and those of our affiliates) with any company whose equity
securities are held in client accounts and any client that has sponsored or has
material interest in a proposal upon which we will be eligible to vote; (ii)
requiring anyone involved in the decision making process to disclose to the
chairman of the appropriate proxy committee any potential conflict that they
are aware of (including personal relationships) and any contact that they have
had with any interested party regarding a proxy vote; (iii) prohibiting
employees involved in the decision making process or vote administration from
revealing how we intend to vote on a proposal in order to reduce any attempted
influence from interested parties; and (iv) where a material conflict of
interests exists, reviewing our proposed vote by applying a series of objective
tests and, where necessary, considering the views of third party research
services to ensure that our voting decision is consistent with our clients'
best interests. Because under certain circumstances AllianceBernstein
considers the recommendation of third party research services, the proxy
committees will take reasonable steps to verify that any third party research
service is in fact independent based on all of the relevant facts and
circumstances. This includes reviewing the third party research service's
conflict management procedures and ascertaining, among other things, whether
the third party research service (i) has the capacity and competency to
adequately analyze proxy issues; and (ii) can make such recommendations in an
impartial manner and in the best interests of our clients.
3.3 Proxies of Certain Non-US Issuers
Proxy voting in certain countries requires "share blocking." Shareholders
wishing to vote their proxies must deposit their shares shortly before the date
of the meeting with a designated depositary. During this blocking period,
shares that will be voted at the meeting cannot be sold until the meeting has
taken place and the shares are returned to the clients' custodian banks.
Absent compelling reasons to the contrary, AllianceBernstein believes that the
benefit to the client of exercising the vote does not outweigh the cost of
voting (i.e. not being able to sell the shares during this period).
Accordingly, if share blocking is required we generally abstain from voting
those shares.
In addition, voting proxies of issuers in non-US markets may give rise to a
number of administrative issues that may prevent AllianceBernstein from voting
such proxies. For example, AllianceBernstein may receive meeting notices
without enough time to fully consider the proxy or after the cut-off date for
voting. Other markets require AllianceBernstein to provide local agents with
power of attorney prior to implementing AllianceBernstein's voting
instructions. Although it is AllianceBernstein's policy to seek to vote all
proxies for securities held in client accounts for which we have proxy voting
authority, in the case of non-US issuers, we vote proxies on a best efforts
basis.
3.4 Loanned Securities
Many clients of AllianceBernstein have entered into securities lending
arrangements with agent lenders to generate additional revenue.
AllianceBernstein will not be able to vote securities that are on loan under
these types of arrangements. However, under rare circumstances, for voting
issues that may have a significant impact on the investment, we may request
that clients recall securities that are on loan if we determine that the
benefit of voting outweighs the costs and lost revenue to the client or fund
and the administrative burden of retrieving the securities.
3.5 Proxy Voting Records
You may obtain information regarding how the Fund voted proxies relating to
portfolio securities during the most recent 12-month period ended June 30,
without charge. Simply visit AllianceBernstein's web site at
www.alliancebernstein.com, go to the Securities and Exchange Commission's web
site at www.sec.gov or call AllianceBernstein at (800) 227-4618.
ITEM 8 PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
The day-to-day management of, and investment decisions for, the Fund's
portfolio are made by the Global Fixed Income Team and Global Credit Team.
While all members of the teams work jointly to determine the majority of the
investment strategy including security selection for the Fund, Messrs. Paul J.
DeNoon and Gershon M. Distenfeld, members of the Global Fixed Income Emerging
Market Investment Team and Global Credit Team, respectively, are primarily
responsible for the day-to-day management of the Fund's portfolio.
The following table sets forth when each person became involved in the
management of the Fund, and each person's principal occupation during the past
five years:
Employee; Year; Title Principal Occupation During
the Past Five (5) Years
----------------------------------------------------------------
Gershon Distenfeld; since Vice President of AB with which
May 2005-Vice President of he has been associated in a
AllianceBernstein L.P. ("AB") substantially similar capacity
to his current position since
prior to 2001.
----------------------------------------------------------------
Paul DeNoon; since 2001-Senior Senior Vice President of AB,
Vice President of AB with which he has been associated
in a substantially similar capacity
to his current position since prior
to 2001 and Director of Emerging
Market Debt.
(a) (2) The following tables provide information regarding registered
investment companies other than the Fund, other pooled investment vehicles and
other accounts over which the Fund's portfolio managers also have day-to-day
management responsibilities. The tables provide the numbers of such accounts,
the total assets in such accounts and the number of accounts and total assets
whose fees are based on performance. The information is provided as of the
Fund's fiscal year ended September 30, 2006.
REGISTERED INVESTMENT COMPANIES
(excluding the Fund)
----------------------------------------------------------------------------
Number of Total Assets
Registered of Registered
Total Number Total Assets Investment Investment
of Registered of Registered Companies Companies
Investment Investment Managed with Managed with
Portfolio Companies Companies Performance- Performance-
Manager Managed Managed based Fees based Fees
---------------------------------------------------------------------------
Paul DeNoon 9 $5,070,000,000 NONE NONE
---------------------------------------------------------------------------
Gershon
Distenfeld 3 $ 867,000,000 NONE NONE
---------------------------------------------------------------------------
POOLED INVESTMENT VEHICLES
----------------------------------------------------------------------------
Number of Total Assets
Pooled of Pooled
Total Number Total Assets Investment Investment
of Pooled of Pooled Vehicles Vehicles
Investment Investment Managed with Managed with
Portfolio Vehicles Vehicles Performance- Performance-
Managed Managed Managed based Fees based Fees
---------------------------------------------------------------------------
Paul DeNoon NONE $12,214,000,000 NONE NONE
---------------------------------------------------------------------------
Gershon
Distenfeld 1 NONE NONE NONE
---------------------------------------------------------------------------
OTHER ACCOUNTS
----------------------------------------------------------------------------
Number of
Other Total Assets
Total Number Total Assets Accounts of Other
of Other of Other Managed with Accounts with
Portfolio Accounts Accounts Performance- Performance-
Managed Managed Managed based Fees based Fees
---------------------------------------------------------------------------
Paul DeNoon NONE NONE NONE NONE
---------------------------------------------------------------------------
Gershon
Distenfeld 1 $57,000,000 NONE NONE
---------------------------------------------------------------------------
Investment Professional Conflict of Interest Disclosure
As an investment adviser and fiduciary, Alliance owes its clients and
shareholders an undivided duty of loyalty. We recognize that conflicts of
interest are inherent in our business and accordingly have developed policies
and procedures (including oversight monitoring) reasonably designed to detect,
manage and mitigate the effects of actual or potential conflicts of interest in
the area of employee personal trading, managing multiple accounts for multiple
clients, including AllianceBernstein Mutual Funds, and allocating investment
opportunities. Investment professionals, including portfolio managers and
research analysts, are subject to the above-mentioned policies and oversight
monitoring to ensure that all clients are treated equitably. We place the
interests of our clients first and expect all of our employees to meet their
fiduciary duties.
Employee Personal Trading. Alliance has adopted a Code of Business Conduct and
Ethics that is designed to detect and prevent conflicts of interest when
investment professionals and other personnel of Alliance own, buy or sell
securities which may be owned by, or bought or sold for, clients. Personal
securities transactions by an employee may raise a potential conflict of
interest when an employee owns or trades in a security that is owned or
considered for purchase or sale by a client, or recommended for purchase or
sale by an employee to a client. Subject to the reporting requirements and
other limitations of its Code of Business Conduct and Ethics, Alliance permits
its employees to engage in personal securities transactions, and also allows
them to acquire investments in the AllianceBernstein Mutual Funds through
direct purchase, 401K/profit sharing plan investment and/or notionally in
connection with deferred incentive compensation awards. Alliance's Code of
Ethics and Business Conduct requires disclosure of all personal accounts and
maintenance of brokerage accounts with designated broker-dealers approved by
Alliance. The Code also requires preclearance of all securities transactions
and imposes a one-year holding period for securities purchased by employees to
discourage short-term trading.
Managing Multiple Accounts for Multiple Clients. Alliance has compliance
policies and oversight monitoring in place to address conflicts of interest
relating to the management of multiple accounts for multiple clients.
Conflicts of interest may arise when an investment professional has
responsibilities for the investments of more than one account because the
investment professional may be unable to devote equal time and attention to
each account. The investment professional or investment professional teams for
each client may have responsibilities for managing all or a portion of the
investments of multiple accounts with a common investment strategy, including
other registered investment companies, unregistered investment vehicles, such
as hedge funds, pension plans, separate accounts, collective trusts and
charitable foundations. Among other things, Alliance's policies and procedures
provide for the prompt dissemination to investment professionals of initial or
changed investment recommendations by analysts so that investment professionals
are better able to develop investment strategies for all accounts they manage.
In addition, investment decisions by investment professionals are reviewed for
the purpose of maintaining uniformity among similar accounts and ensuring that
accounts are treated equitably. No investment professional that manages client
accounts carrying performance fees is compensated directly or specifically for
the performance of those accounts. Investment professional compensation
reflects a broad contribution in multiple dimensions to long-term investment
success for our clients and is not tied specifically to the performance of any
particular client's account, nor is it directly tied to the level or change in
level of assets under management.
Allocating Investment Opportunities. Alliance has policies and procedures
intended to address conflicts of interest relating to the allocation of
investment opportunities. These policies and procedures are designed to ensure
that information relevant to investment decisions is disseminated promptly
within its portfolio management teams and investment opportunities are
allocated equitably among different clients. The investment professionals at
Alliance routinely are required to select and allocate investment opportunities
among accounts. Portfolio holdings, position sizes, and industry and sector
exposures tend to be similar across similar accounts, which minimizes the
potential for conflicts of interest relating to the allocation of investment
opportunities. Nevertheless, investment opportunities may be allocated
differently among accounts due to the particular characteristics of an account,
such as size of the account, cash position, tax status, risk tolerance and
investment restrictions or for other reasons.
Alliance's procedures are also designed to prevent potential conflicts of
interest that may arise when Alliance has a particular financial incentive,
such as a performance-based management fee, relating to an account. An
investment professional may perceive that he or she has an incentive to devote
more time to developing and analyzing investment strategies and opportunities
or allocating securities preferentially to accounts for which Alliance could
share in investment gains.
To address these conflicts of interest, Alliance's policies and procedures
require, among other things, the prompt dissemination to investment
professionals of any initial or changed investment recommendations by analysts;
the aggregation of orders to facilitate best execution for all accounts; price
averaging for all aggregated orders; objective allocation for limited
investment opportunities (e.g., on a rotational basis) to ensure fair and
equitable allocation among accounts; and limitations on short sales of
securities. These procedures also require documentation and review of
justifications for any decisions to make investments only for select accounts
or in a manner disproportionate to the size of the account.
(a) (3) Portfolio Manager Compensation
Alliance's compensation program for investment professionals is designed to be
competitive and effective in order to attract and retain the highest caliber
employees. The compensation program for investment professionals is designed to
reflect their ability to generate long-term investment success for our clients,
including shareholders of the AllianceBernstein Mutual Funds. Investment
professionals do not receive any direct compensation based upon the investment
returns of any individual client account, nor is compensation tied directly to
the level or change in level of assets under management. Investment
professionals' annual compensation is comprised of the following:
(i) Fixed base salary: This is generally the smallest portion of compensation.
The base salary is a relatively low, fixed salary within a similar range for
all investment professionals. The base salary is determined at the outset of
employment based on level of experience, does not change significantly from
year-to-year and hence, is not particularly sensitive to performance.
(ii) Discretionary incentive compensation in the form of an annual cash bonus:
Alliance's overall profitability determines the total amount of incentive
compensation available to investment professionals. This portion of
compensation is determined subjectively based on qualitative and quantitative
factors. In evaluating this component of an investment professional's
compensation, Alliance considers the contribution to his/her team or discipline
as it relates to that team's overall contribution to the long-term investment
success, business results and strategy of Alliance. Quantitative factors
considered include, among other things, relative investment performance (e.g.,
by comparison to competitor or peer group funds or similar styles of
investments, and appropriate, broad-based or specific market indices), and
consistency of performance. There are no specific formulas used to determine
this part of an investment professional's compensation and the compensation is
not tied to any pre-determined or specified level of performance. Alliance
also considers qualitative factors such as the complexity and risk of
investment strategies involved in the style or type of assets managed by the
investment professional; success of marketing/business development efforts and
client servicing; seniority/length of service with the firm; management and
supervisory responsibilities; and fulfillment of Alliance's leadership criteria.
(iii) Discretionary incentive compensation in the form of awards under
Alliance's Partners Compensation Plan ("deferred awards"): Alliance's overall
profitability determines the total amount of deferred awards available to
investment professionals. The deferred awards are allocated among investment
professionals based on criteria similar to those used to determine the annual
cash bonus. There is no fixed formula for determining these amounts. Deferred
awards, for which there are various investment options, vest over a four-year
period and are generally forfeited if the employee resigns or Alliance
terminates his/her employment. Investment options under the deferred awards
plan include many of the same AllianceBernstein Mutual Funds offered to mutual
fund investors, thereby creating a close alignment between the financial
interests of the investment professionals and those of Alliance's clients and
mutual fund shareholders with respect to the performance of those mutual funds.
Alliance also permits deferred award recipients to allocate up to 50% of their
award to investments in Alliance's publicly traded equity securities.(1)
(iv) Contributions under Alliance's Profit Sharing/401(k) Plan: The
contributions are based on Alliance's overall profitability. The amount and
allocation of the contributions are determined at the sole discretion of
Alliance.
(a) (4) The dollar range of the Fund's equity securities owned directly or
beneficially by the Fund's portfolio managers as of the Fund's fiscal year
ended September 31, 2006 is set forth below:
DOLLAR RANGE OF EQUITY
SECURITIES IN THE FUND
---------------------------------------------------------
Gershon Distenfeld None
Paul DeNoon None
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
REGISTRANT PURCHASES OF EQUITY SECURITIES
(d)
(c) * Maximum
Total Number Number (or
of Shares Approximate
(or Units) Dollar Value)
Purchased of Shares
(a) as Part (or Units)
Total Number (b) of Publicly that May Yet
of Shares Average Price Announced Be Purchased
(or Units) Paid per Share Plans or Under the Plans
Period Purchased (or Unit) Programs or Programs
-------------------------------------------------------------------------------------------------------
June 1, 2006 -
June 30, 2006 1,078,616 $ 7.82 1,078,616 None
* On May 23, 2006, ACM Managed Dollar Income Fund, Inc. (the "Fund") announced
the basic terms of a tender offer conducted during the second quarter of 2006.
Under the terms approved by the Fund's Board of Directors, the Fund, pursuant
to due notification, commenced a tender offer on May 26, 2006 for 1,078,616
shares of its common stock representing approximately 5% of the Fund's
outstanding shares. The offer was for cash at a price equal to the net asset
value per share determined as of the close of the regular trading session of
the New York Stock Exchange on the date after the date the offer expired. The
offer expired at 12:00 Midnight Eastern Time on June 23, 2006. A total of
4,144,486 shares were properly tendered and not withdrawn prior to 5:00 p.m.
Eastern Time on June 27, 2006, the final date for withdrawals. The Fund
accepted 1,078,616 shares for payment at $7.82 per share. On a pro rated basis,
in accordance with the terms of the tender offer, 26% of the shares so tendered
by each tendering stockholder were accepted for payment. The offer was in
fulfillment of an undertaking in connection with the initial public offering of
shares stated in the Fund's prospectus dated October 22, 1993.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have been no material changes to the procedures by which shareholders may
recommend nominees to the Fund's Board of Directors since the Fund last
provided disclosure in response to this item.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive officer and principal financial
officer have concluded that the registrant's disclosure controls and procedures
(as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as
amended) are effective at the reasonable assurance level based on their
evaluation of these controls and procedures as of a date within 90 days of the
filing date of this document.
(b) There were no changes in the registrant's internal controls over financial
reporting that occurred during the second fiscal quarter of the period that has
materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
ITEM 12. EXHIBITS.
The following exhibits are attached to this Form N-CSR:
EXHIBIT NO. DESCRIPTION OF EXHIBIT
---------- ------------------------
12 (a) (1) Code of Ethics that is subject to the disclosure of Item
2 hereof
12 (b) (1) Certification of Principal Executive Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
12 (b) (2) Certification of Principal Financial Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
12 (c) Certification of Principal Executive Officer and
Principal Financial Officer Pursuant to Section 906
of the Sarbanes-Oxley Act of 2002
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant): ACM Managed Income Fund, Inc.
By: /s/ Marc O. Mayer
-----------------------
Marc O. Mayer
President
Date: November 28, 2006
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/ Marc O. Mayer
-----------------------
Marc O. Mayer
President
Date: November 28, 2006
By: /s/ Joseph J. Mantineo
-----------------------
Joseph J. Mantineo
Treasurer and Chief Financial Officer
Date: October 27, 2006
(1) Prior to 2002, investment professional compensation also included
discretionary long-term incentive in the form of restricted grants of Alliance
Capital's Master Limited Partnership Units.