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
Alliance Capital Management 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, 2004
Date of reporting period: September 30, 2004
ITEM 1. REPORTS TO STOCKHOLDERS.
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Closed End
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AllianceBernstein [LOGO](SM)
Investment Research and Management
ACM Managed Dollar Income Fund
Annual Report -- September 30, 2004
Investment Products Offered
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o Are Not FDIC Insured
o May Lose Value
o Are Not Bank Guaranteed
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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 Alliance Capital's web site at
www.alliancebernstein.com (click on Investors, then the "Proxy voting policies"
link or "Proxy voting records" link on the left side of the page), or go to the
Securities and Exchange Commission's, (The "Commission") web site at
www.sec.gov, or call AllianceBernstein at (800) 227-4618.
Beginning in February 2005, the Fund will file 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 will be available on the
Commission's web site at www.sec.gov. The Fund's Forms N-Q will also be able to
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 Investment Research and Management, Inc., is an affiliate of
Alliance Capital Management L.P., the manager of the funds, and is a member of
the NASD.
November 17, 2004
Annual Report
This report provides management's discussion of fund performance for ACM
Managed Dollar Income Fund (the "Fund"), a closed-end fund that trades under
the New York Stock Exchange symbol "ADF", for the annual reporting period ended
September 30, 2004.
Investment Objective and Policies
This closed-end fund is designed for investors who seek high current income and
capital appreciation. To achieve this objective, it invests primarily in
high-yielding, U.S. and non-U.S. fixed income securities, denominated in U.S.
dollars, that we expect to benefit from improving economic and credit
fundamentals. For more information regarding the Fund's risks, please see "A
Word About Risk" on page 4 and Note E--"Risks Involved in Investing in the
Fund" of the Notes to Financial Statements on page 33.
Investment Results
The table on page 6 shows the Fund's performance compared to the 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 six- and 12-month periods ended September 30, 2004. 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
it more closely resembles the composition of the Fund's portfolio.
For the 12-month period ended September 30, 2004, the Fund outperformed its
composite benchmark. During this time frame, the Fund benefited primarily from
its emerging market debt holdings, country selection and its ability to use
leverage. From a country perspective, the Fund's holdings in Brazil and Turkey,
as well as its underweighted position in Mexico, contributed positively to
performance. The Fund's overweighting of Ecuador early in the reporting period
also contributed positively to performance.
The Fund, however, underperformed its composite benchmark during the six-month
period ended September 30, 2004. Although the Fund's holdings in Ecuador helped
performance earlier in the year, the Fund's overweighted position in Ecuador
during the emerging market debt sell-off in April 2004 detracted from
performance during the six-month period. As a result of the sell-off, the
Fund's management team reduced the Fund's position in Ecuador. This reduction
also contributed to the Fund's underperformance when Ecuador subsequently
rebounded as a result of higher oil prices. The Fund's holdings in Russia also
dampened returns during the six-month period. Russia, which had been one of the
Fund's strongest performers, was weighed down by negative political factors and
policy missteps towards the end of the period.
Specific securities contributed both positively and negatively to the Fund's
performance during the 12-month period under review. Within the Fund's high
yield allocation, its overweighted
_______________________________________________________________________________
ACM MANAGED DOLLAR INCOME FUND o 1
position in finance, particularly property and casualty insurance, as well as
its holdings in the building materials sector, contributed positively to
performance. The Fund's overweighted position in wireless and cable securities,
as well as its underweighted position in utilities that performed well during
the reporting period, detracted from performance. Security selection within the
Fund's utilities holdings also detracted from performance.
Two additional factors impacted the Fund's performance during the annual
reporting period. The Fund's duration was shortened, as we expected interest
rates to rise. However, lower consumer confidence and sluggish employment
growth during the summer kept interest rates low. This decision dampened the
Fund's outperformance. The Fund's ability to avoid troubled credit issues
during the period under review aided its performance.
In summary, although some of the Fund's country weightings, high yield sector
allocations and the timing of some of our investment decisions detracted from
the Fund's performance, the use of leverage increased the rate of return
amplifying the strong positive performance generated by both the emerging
markets asset class as well as high yield during the 12-month period ended
September 30, 2004.
Market Review and Investment Strategy
The emerging market debt class, as represented by the JPM EMBI+, returned a
strong 11.96% for the annual period ended September 30, 2004. The emerging debt
markets benefited throughout the annual period from a lower global interest
rate environment, higher commodity prices and improving emerging country
fundamentals. Within the Fund's emerging market holdings, allocations to the
Fund's core emerging market countries (Brazil, Russia, Colombia, Mexico, Peru,
Turkey, Venezuela, and the Ukraine) were maintained; however, the Fund's
emerging market duration exposure was reduced later in the reporting period as
global liquidity tightened.
The Fund generally maintained an overweighted position in Russian debt
throughout most of the period as credit statistics continued to improve and
Russia benefited from higher oil prices. Late in the period, however, the
Fund's Russian holdings were reduced as positive economic fundamentals were
offset by administrative paralysis and the Yukos affair. Russia's Justice
Ministry had seized the assets of Yukos, the country's largest oil producer,
and was preparing to sell its main oil-producing unit in Siberia to recover
payment of back taxes.
The Fund's exposure in Brazil was reduced as concerns surfaced that political
scandal and the Central Bank's inability to lower interest rates would hurt
economic growth. Those concerns proved to be misplaced, however; so Brazilian
holdings have subsequently begun to be added back to the Fund's investment
portfolio. Furthermore, gross domestic product (GDP) growth in Brazil has
remained high, easing worries about debt sustainability, and is likely to
benefit from further ratings upgrades. Brazil was recently upgraded by both
Moody's Investors Service and Standard & Poor's rating agencies.
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2 o ACM MANAGED DOLLAR INCOME FUND
The Fund's position in the Ukraine was also increased during the annual period
under review due to strong economic growth and prospects for rating upgrades.
Toward the end of the reporting period, the Fund's Argentinean debt was
increased due to significant indications that a new, final restructuring offer
would benefit investors.
Within the high yield sector, improved balance sheets and access to capital led
to strong returns. Yield-seeking investors in the low-rate environment helped
to drive high-yield prices up, despite near-record issuance. For the annual
period under review, the high yield market posted a return of 13.32%, according
to the CSFBHY Index. Credit quality continued to improve, resulting in
declining default rates and more favorable upgrade/downgrade ratios. As spread
dispersion among high yield industries narrowed during the period, the Fund's
strategy turned more toward specific issuer selection and diversifying its
holdings across industry sectors--focusing on identifying sectors with positive
fundamental/valuation outlooks and avoiding those sectors with deteriorating
credit trends or limited upside potential. Underweighted positions in
industries with lower spread levels that would be more negatively impacted by a
rising interest rate environment were maintained.
One of the Fund's largest industry overweight positions during the period
continued to be wireless communications. Within the wireless sector, the Fund
focused on rural growth providers that, in our view, had the following
characteristics: those that had fewer competitive restraints, that would be
less affected by the implementation of number portability, and that had
improved balance sheets from recent capital-market transactions. More recently,
however, the Fund's longstanding overweight of the wireless-telecom sector has
been reduced due to concerns regarding the rural wireless carriers' ability to
generate profitable subscriber growth and to negotiate favorable agreements
with the soon-to-be merged AT&T Wireless Cingular. Additionally, the utilities
industry continued to be underweighted due to sustained margin pressure and
generally weak fundamentals.
In Memory
It is with sadness that we announce the passing of Clifford L. Michel, a member
of the Board of Directors of ACM Managed Dollar Income Fund. Mr. Michel served
the interests of the Fund's shareholders for the last 11 years. His hard work,
dedication and contributions to the Fund will be greatly missed.
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ACM MANAGED DOLLAR INCOME FUND o 3
Historical Performance
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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. Returns are annualized for periods longer than one year. 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) 426-5523. The Fund also distributes its daily
net asset value to various financial publications or independent organizations
such as Lipper Inc., Morningstar, Inc. and Bloomberg. For additional
shareholder information regarding this Fund, please see page 50.
Benchmark Disclosure
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+ is comprised of dollar-denominated restructured
sovereign bonds; a large percentage of the index is made up of Brady bonds. The
CSFBHY Index is a measure of lower-rated, fixed income, non-convertible U.S.
dollar-denominated securities meeting certain criteria developed by Credit
Suisse designed to enable the index to reflect the high yield market. Investors
cannot invest directly in indices, and their results are not indicative of the
performance for any specific investment, including the Fund.
A Word About Risk
The Fund may utilize additional leverage through the investment techniques of
reverse repurchase agreements and dollar rolls. Repurchase agreements involve
sales by the Fund of portfolio assets concurrently with an agreement by the
Fund to repurchase the same assets at a later date at a fixed price. Generally,
the effect of such a transaction is that the 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 only
advantageous if the interest cost to the Fund of the reverse repurchase
agreement transaction is less than the cost of otherwise obtaining the cash.
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.
Reverse repurchase agreements and dollar rolls are speculative techniques and
are considered borrowings by the Fund. The effect of leverage can realize
shareholders higher returns than if the Fund were not leveraged and the use of
leverage techniques can add to net asset value (NAV). However, the risks of
such techniques are potentially a higher volatility of the NAV of the Common
Stock, potentially more volatility in the market
(Historical Performance continued on next page)
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4 o ACM MANAGED DOLLAR INCOME FUND
Historical Performance
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HISTORICAL PERFORMANCE
(continued from previous page)
value of the Common Stock and the relatively greater effect on the NAV of the
Common Stock caused by favorable or adverse changes in the currency exchange
rates. In addition, changes in the interest rate environment can increase or
decrease shareholder returns. This additional leverage will not exceed 33% of
the Fund's total assets, less liabilities.
To the extent that the current interest rate on the Fund's indebtedness
approaches the net return on the leveraged portion of the Fund's investment
portfolio, then the benefit to the shareholders will be reduced. If the rate on
indebtedness were to exceed the net return on the same portion of the
portfolio, then this would result in a lower rate of return for the
shareholders. Similarly, the use of leverage in a declining market can advance
the decrease of the Fund's NAV more so than if the Fund were not leveraged,
which would likely be reflected in a greater decline in the market price for
shares of Common Stock than if the Fund were not leveraged. In extreme cases,
if the Fund's current investment income were not sufficient to meet interest
payments on indebtedness or if the Fund failed to maintain the asset coverage
required by the 1940 Act, then it could be necessary for the Fund to liquidate
certain investments at a time when it may be disadvantageous to do so, thereby
reducing its NAV.
(Historical Performance continued on next page)
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ACM MANAGED DOLLAR INCOME FUND o 5
Historical Performance
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HISTORICAL PERFORMANCE
(continued from previous page)
Returns
THE FUND VS. ITS BENCHMARK -------------------------
PERIODS ENDED SEPTEMBER 30, 2004 6 Months 12 Months
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ACM Managed Dollar Income Fund (NAV) 1.41% 13.45%
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JPM EMBI+ 2.99% 11.96%
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CSFBHY Index 4.30% 13.32%
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Composite: 65% JPM EMBI+ / 35% CSFBHY Index 3.44% 12.43%
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The Fund's Market Price per share on September 30, 2004 was $7.87. For
additional Financial Highlights, please see page 39.
GROWTH OF A $10,000 INVESTMENT IN THE FUND
9/30/94 TO 9/30/04
ACM Managed Dollar Income Fund (NAV): $26,176
Composite: 65% JPM EMBI+ / 35% CSFBHY Index: $30,537
[THE FOLLOWING TABLE WAS DEPICTED BY A MOUNTAIN CHART IN THE PRINTED MATERIAL.]
ACM Managed Dollar Composite: 65% JPM EMBI+ /
Income Fund (NAV) 35% CSFBHY Index
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9/30/94 $ 10,000 $ 10,000
9/30/95 $ 10,611 $ 10,831
9/30/96 $ 14,947 $ 14,183
9/30/97 $ 19,975 $ 17,381
9/30/98 $ 12,740 $ 14,492
9/30/99 $ 15,121 $ 16,858
9/30/00 $ 16,539 $ 20,043
9/30/01 $ 14,872 $ 19,928
9/30/02 $ 14,906 $ 19,979
9/30/03 $ 23,071 $ 27,160
9/30/04 $ 26,176 $ 30,537
This chart illustrates the total value of an assumed $10,000 investment in ACM
Managed Dollar Income Fund at net asset value (NAV) (from 9/30/94 to 9/30/04)
as compared to the performance of the Fund's composite benchmark (65% JPM EMBI+
/ 35% CSFBHY Index). The chart assumes the reinvestment of dividends and
capital gains.
See Historical Performance and Benchmark disclosures on pages 4-5.
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6 o ACM MANAGED DOLLAR INCOME FUND
Portfolio Summary
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PORTFOLIO SUMMARY
September 30, 2004
PORTFOLIO STATISTICS
Net Assets ($mil): $178.7
SECURITY TYPE BREAKDOWN*
52.4% Sovereign Debt Obligations
45.2% Corporate Debt Obligations [PIE CHART OMITTED]
0.6% Preferred Stock
1.8% Short-Term
* All data is as of September 30, 2004. The Fund's security type breakdown is
expressed as a percentage of total investments and may vary over time.
_______________________________________________________________________________
ACM MANAGED DOLLAR INCOME FUND o 7
Portfolio of Investments
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PORTFOLIO OF INVESTMENTS
September 30, 2004
Principal
Amount
(000) U.S. $ Value
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SOVEREIGN DEBT OBLIGATIONS-63.0%
Argentina-2.1%
Republic of Argentina FRN
1.98%, 8/03/12(a) $ 2,315 $ 1,710,785
6.00%, 3/31/23(b) 1,225 643,125
11.375%, 1/30/17(b) 175 53,375
11.75%, 6/15/15(b) 350 105,875
12.25%, 6/19/18(b) 833 244,926
15.50%, 12/19/08(a)(b) 3,093 927,900
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3,685,986
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Brazil-13.7%
Republic of Brazil
7.72%, 6/29/09(a) 682 746,108
8.25%, 1/20/34 250 222,875
10.125%, 5/15/27 650 689,000
10.50%, 7/14/14 1,785 1,988,490
11.00%, 8/17/40(c) 5,546 6,214,293
12.00%, 4/15/10 1,350 1,606,500
12.75%, 1/15/20 1,145 1,451,287
Republic of Brazil-DCB FRN
Series L
2.125%, 4/15/12(a) 1,313 1,217,756
C-Bonds
8.00%, 4/15/14(c) 10,432 10,314,953
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24,451,262
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Bulgaria-0.5%
Republic of Bulgaria
8.25%, 1/15/15(d) 451 556,985
8.25%, 1/15/15 355 438,425
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995,410
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Colombia-2.7%
Republic of Colombia
8.25%, 12/22/14 510 503,625
10.75%, 1/15/13 237 271,721
11.75%, 2/25/20(c) 3,290 4,030,250
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4,805,596
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Ecuador-0.9%
Republic of Ecuador
8.00%, 8/15/30(a) 1,805 1,471,075
8.00%, 8/15/30(a)(d) 75 61,125
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1,532,200
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8 o ACM MANAGED DOLLAR INCOME FUND
Portfolio of Investments
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Principal
Amount
(000) U.S. $ Value
- -------------------------------------------------------------------------------
El Salvador-0.3%
Republic of El Salvador
7.625%, 9/21/34(d) $ 150 $ 153,750
8.50%, 7/25/11(d) 400 444,400
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598,150
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Indonesia-0.5%
Republic of Indonesia
6.75%, 3/10/14(d) 945 922,556
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Jamaica-0.4%
Government of Jamaica
11.75%, 5/15/11 565 658,225
12.75%, 9/01/07 65 75,725
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733,950
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Mexico-7.9%
United Mexican States
8.00%, 9/24/22(c) 4,472 5,042,180
8.125%, 12/30/19(c) 2,085 2,376,900
11.375%, 9/15/16(c) 4,508 6,638,030
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14,057,110
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Panama-1.2%
Republic of Panama
8.875%, 9/30/27 200 209,400
9.375%, 4/01/29 306 342,567
9.625%, 2/08/11 300 344,700
10.75%, 5/15/20 1,050 1,248,450
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2,145,117
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Peru-1.9%
Republic of Peru
8.375%, 5/03/16 775 806,000
9.125%, 2/21/12 1,300 1,443,000
9.875%, 2/06/15 979 1,125,850
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3,374,850
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Philippines-2.0%
Republic of Philippines
8.25%, 1/15/14 25 24,600
9.00%, 2/15/13 100 103,000
9.875%, 1/15/19(c) 2,600 2,688,400
10.625%, 3/16/25 779 833,530
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3,649,530
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Russia-19.5%
Ministry Finance of Russia
Series V
3.00%, 5/14/08 3,530 3,194,650
Series VII
3.00%, 5/14/11 1,420 1,127,196
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ACM MANAGED DOLLAR INCOME FUND o 9
Portfolio of Investments
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Principal
Amount
(000) U.S. $ Value
- -------------------------------------------------------------------------------
Russian Federation
5.00%, 3/31/30(a)(d) $ 30,060 $ 28,895,175
5.00%, 3/31/30(a) 1,775 1,706,219
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34,923,240
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Turkey-3.1%
Republic of Turkey
9.875%, 3/19/08 400 449,000
11.50%, 1/23/12(c) 1,325 1,649,625
11.75%, 6/15/10 750 930,375
12.375%, 6/15/09(c) 2,000 2,490,000
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5,519,000
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Ukraine-2.2%
Ukraine Government
6.875%, 3/04/11(d) 500 490,000
7.65%, 6/11/13 1,765 1,765,000
11.00%, 3/15/07 1,528 1,665,931
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3,920,931
-------------
Uruguay-0.7%
Republic of Uruguay
7.875%, 1/15/33 1,483 1,197,795
-------------
Venezuela-3.4%
Republic of Venezuela
5.375%, 8/07/10 975 878,963
9.25%, 9/15/27(c) 5,200 5,124,600
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6,003,563
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Total Sovereign Debt Securities
(cost $90,396,410) 112,516,246
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U.S. CORPORATE DEBT OBLIGATIONS-45.7%
Aerospace/Defense-0.7%
DRS Technologies, Inc.
6.875%, 11/01/13 325 338,000
K&F Industries, Inc.
Series B
9.625%, 12/15/10 175 194,687
Sequa Corp.
9.00%, 8/01/09 210 232,050
TD Funding Corp.
8.375%, 7/15/11 450 481,500
-------------
1,246,237
-------------
Air Transportation-0.4%
American Trans Air, Inc.
6.99%, 4/15/16(d) 490 362,331
Series RJ04
9.558%, 9/01/19 283 283,377
-------------
645,708
-------------
_______________________________________________________________________________
10 o ACM MANAGED DOLLAR INCOME FUND
Portfolio of Investments
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Principal
Amount
(000) U.S. $ Value
- -------------------------------------------------------------------------------
Automotive-1.3%
Dana Corp.
10.125%, 3/15/10 $ 235 $ 266,725
Dura Operating Corp.
Series D
9.00%, 5/01/09 392 348,880
HLI Operating, Inc.
10.50%, 6/15/10 266 289,940
Keystone Automotive Operations, Inc.
9.75%, 11/01/13 365 392,375
TRW Automotive, Inc.
9.375, 2/15/13 91 103,968
11.00%, 2/15/13 156 185,640
United Auto Group, Inc.
9.625%, 3/15/12 260 286,650
United Rentals North America, Inc.
6.50%, 2/15/12 494 475,475
-------------
2,349,653
-------------
Broadcasting & Media-1.1%
Albritton Communications Co.
7.75%, 12/15/12 385 398,475
Emmis Operating Co.
6.875%, 5/15/12 335 347,563
PRIMEDIA, Inc.
8.00%, 5/15/13(d) 80 76,100
8.875%, 5/15/11 305 305,000
Radio One, Inc.
8.875%, 7/01/11 235 259,088
Sinclair Broadcast Group, Inc.
8.00%, 3/15/12 90 93,375
8.75%, 12/15/11 265 287,525
Young Broadcasting, Inc.
8.50%, 12/15/08 180 191,250
-------------
1,958,376
-------------
Building & Real Estate-2.4%
Associated Materials, Inc.
11.25%, 3/01/14(d)(e) 935 680,212
Dayton Superior Corp.
10.75%, 9/15/08 180 192,600
D.R. Horton, Inc.
6.875%, 5/01/13 340 371,450
KB HOME
7.75%, 2/01/10 520 565,500
LNR Property Corp.
7.25%, 10/15/13 500 545,000
7.625%, 7/15/13 125 136,875
Meritage Corp.
9.75%, 6/01/11(a) 440 493,900
Nortek, Inc.
8.50%, 9/01/14(d) 490 513,275
_______________________________________________________________________________
ACM MANAGED DOLLAR INCOME FUND o 11
Portfolio of Investments
- -------------------------------------------------------------------------------
Principal
Amount
(000) U.S. $ Value
- -------------------------------------------------------------------------------
Schuler Homes, Inc.
10.50%, 7/15/11 $ 360 $ 414,000
William Lyon Homes, Inc.
10.75%, 4/01/13 265 306,075
-------------
4,218,887
-------------
Cable-2.6%
Cablevision Systems Corp.
8.00%, 4/15/12(d) 895 935,275
Charter Communications Operating LLC
8.00%, 4/30/12(d) 1,000 997,500
CSC Holdings, Inc.
6.75%, 4/15/12(d) 880 882,200
7.625%, 7/15/18 405 413,100
DirectTV Holdings LLC
8.375%, 3/15/13 285 324,187
Echostar DBS Corp.
6.375%, 10/01/11 650 658,125
Insight Midwest LP
9.75%, 10/01/09 380 397,100
-------------
4,607,487
-------------
Chemicals-1.2%
Equistar Chemical Funding LP
10.125%, 9/01/08 520 586,300
10.625%, 5/01/11 130 148,200
Huntsman Advanced Materials LLC
11.00%, 7/15/10(d) 275 319,000
Huntsman International LLC
9.875%, 3/01/09 325 358,313
Resolution Performance Products LLC
9.50%, 4/15/10 410 423,325
Westlake Chemical Corp.
8.75%, 7/15/11 270 303,075
-------------
2,138,213
-------------
Communications - Fixed-1.9%
Cincinnati Bell, Inc.
8.375%, 1/15/14 535 488,187
FairPoint Communications, Inc.
11.875%, 3/01/10 300 342,000
Qwest Communications International, Inc.
7.50%, 2/15/14(d) 205 188,088
Qwest Corp.
9.125%, 3/15/12(d) 1,420 1,562,000
Time Warner Telecom, Inc.
9.25%, 2/15/14* 875 870,625
-------------
3,450,900
-------------
Communications - Mobile-1.9%
Iridium LLC Capital Corp.
Series B
14.00%, 7/15/05(b) 5,000 462,500
_______________________________________________________________________________
12 o ACM MANAGED DOLLAR INCOME FUND
Portfolio of Investments
- -------------------------------------------------------------------------------
Principal
Amount
(000) U.S. $ Value
- -------------------------------------------------------------------------------
Nextel Communications, Inc.
6.875%, 10/31/13 $ 480 $ 499,200
7.375%, 8/01/15 430 462,250
9.50%, 2/01/11 465 527,775
PanAmSat Corp.
9.00%, 8/15/14(d) 690 717,600
Rural Cellular Corp.
8.25%, 3/15/12(d) 240 244,200
TeleCorp PCS, Inc.
10.625%, 7/15/10 203 225,514
Tritel PCS, Inc.
10.375%, 1/15/11 234 267,004
-------------
3,406,043
-------------
Consumer Manufacturing-1.3%
Broder Brothers Co.
11.25%, 10/15/10 500 500,000
Jostens, Inc.
7.625%, 10/01/12(d) 275 276,375
12.75%, 5/01/10 605 680,195
K2, Inc
7.375%, 7/01/14(d) 355 376,300
Playtex Products, Inc.
8.00%, 3/01/11 315 333,900
St. John Knits International, Inc.
12.50%, 7/01/09 200 214,000
-------------
2,380,770
-------------
Energy-3.1%
Belden & Blake Corp.
8.75%, 7/15/12(d) 340 362,100
Chesapeake Energy Corp.
7.75%, 1/15/15 350 381,500
Grant Prideco, Inc.
9.00%, 12/15/09 360 402,300
Hilcorp Energy
10.50%, 9/01/10(d) 770 852,775
Northwest Pipelines Corp.
8.125%, 3/01/10 310 347,587
Premco Refining Group, Inc.
9.50%, 2/01/13 250 294,375
Pride International, Inc.
7.375%, 7/15/14(d) 395 438,450
Southern Natural Gas Co.
7.35%, 2/15/31 365 360,438
8.875%, 3/15/10 290 326,250
Universal Compression, Inc.
7.25%, 5/15/10 220 233,200
Williams Cos., Inc.
7.625%, 7/15/19 1,345 1,472,775
-------------
5,471,750
-------------
_______________________________________________________________________________
ACM MANAGED DOLLAR INCOME FUND o 13
Portfolio of Investments
- -------------------------------------------------------------------------------
Principal
Amount
(000) U.S. $ Value
- -------------------------------------------------------------------------------
Entertainment & Leisure-0.5%
Gaylord Entertainment Co.
8.00%, 11/15/13 $ 315 $ 331,538
Universal City Development Partners
11.75%, 4/01/10 425 495,125
-------------
826,663
-------------
Financial-2.0%
Crum & Foster Holdings Corp.
10.375%, 6/15/13 195 208,162
Markel Capital Trust I
Series B
8.71%, 1/01/46(f) 615 651,900
Nationwide CSN Trust
9.875%, 2/15/25(d) 1,000 1,067,831
PXRE Capital Trust I
8.85%, 2/01/27 510 525,300
Western Financial Bank
9.625%, 5/15/12 420 474,600
Williams Scotsman, Inc.
9.875%, 6/01/07 740 708,550
-------------
3,636,343
-------------
Food/Beverage-1.1%
Del Monte Food Co.
8.625%, 12/15/12 145 161,312
9.25%, 5/15/11 255 280,500
DIMON, Inc.
7.75%, 6/01/13 110 107,250
Series B
9.625%, 10/15/11 395 416,725
Dole Food Company, Inc.
8.625%, 5/01/09(a) 240 261,600
8.875%, 3/15/11 145 157,687
Merisant Co.
9.50%, 7/15/13(d) 300 285,000
North Atlantic Trading Co.
9.25%, 3/01/12 250 240,000
-------------
1,910,074
-------------
Gaming-3.3%
Ameristar Casinos, Inc.
10.75%, 2/15/09 215 244,025
Argosy Gaming Co.
9.00%, 9/01/11 220 246,950
Boyd Gaming Corp.
7.75%, 12/15/12 255 273,487
Harrah's Operating Company, Inc.
7.875%, 12/15/05 215 227,631
MGM Mirage, Inc.
8.375%, 2/01/11* 575 634,656
Mandalay Resort Group
10.25%, 8/01/07 530 601,550
_______________________________________________________________________________
14 o ACM MANAGED DOLLAR INCOME FUND
Portfolio of Investments
- -------------------------------------------------------------------------------
Principal
Amount
(000) U.S. $ Value
- -------------------------------------------------------------------------------
Mohegan Tribal Gaming
6.375%, 7/15/09 $ 140 $ 145,250
7.125%, 8/15/14(d) 695 728,012
Park Place Entertainment
7.00%, 4/15/13 305 339,313
7.875%, 3/15/10 135 152,550
9.375%, 2/15/07 230 257,025
Riviera Holdings Corp.
11.00%, 6/15/10 300 330,000
Seneca Gaming Corp.
7.25%, 5/01/12* 765 789,863
Turning Stone Casino Resort Enterprise
9.125%, 12/15/10(d) 270 291,600
Venetian Casino Resort, LLC
11.00%, 6/15/10 570 659,775
-------------
5,921,687
-------------
Healthcare-3.1%
Alliance Imaging, Inc.
10.375%, 4/15/11* 395 429,069
Concentra Operating Corp.
9.125%, 6/01/12(d) 175 191,625
9.50%, 8/15/10 200 221,000
Extendicare Health Services
9.50%, 7/01/10 315 353,588
Genesis HealthCare Corp.
8.00%, 10/15/13 330 359,700
HCA, Inc.
7.875%, 2/01/11 455 514,566
Hanger Orthopedic Group, Inc.
10.375%, 2/15/09 595 547,400
IASIS Healthcare LLC
8.75%, 6/15/14(d) 490 513,275
PacifiCare Health Systems, Inc.
10.75%, 6/01/09 380 437,950
Select Medical Corp.
7.50%, 8/01/13 690 724,500
Tenet Healthcare Corp.
7.375%, 2/01/13 310 291,400
Triad Hospitals, Inc.
7.00%, 11/15/13 520 529,100
Universal Hospital Services, Inc.
10.125%, 11/01/11 440 446,600
-------------
5,559,773
-------------
Hotels & Lodging-1.2%
Corrections Corp. of America
7.50%, 5/01/11 40 42,250
9.875%, 5/01/09 260 290,225
10.00%, 9/15/08 28 29,400
Host Marriott LP
9.25%, 10/01/07 100 112,000
9.50%, 1/15/07 310 343,325
_______________________________________________________________________________
ACM MANAGED DOLLAR INCOME FUND o 15
Portfolio of Investments
- -------------------------------------------------------------------------------
Principal
Amount
(000) U.S. $ Value
- -------------------------------------------------------------------------------
La Quinta Corp.
8.875%, 3/15/11 $ 375 $ 420,000
Starwood Hotels & Resorts Worldwide, Inc.
7.875%, 5/01/12 400 452,500
Vail Resorts, Inc.
6.75%, 2/15/14 355 358,550
-------------
2,048,250
-------------
Index-2.5%
Dow Jones CDX HY
7.75%, 12/29/09(d)* 4,500 4,556,250
-------------
Industrial-2.5%
AMSTED Industries, Inc.
10.25%, 10/15/11(d) 465 511,500
Case New Holland, Inc.
9.25%, 8/01/11(d) 645 722,400
FastenTech, Inc.
11.50%, 5/01/11(d) 325 365,625
Flowserve Corp.
12.25%, 8/15/10 370 419,950
H & E Equipment/Finance
11.125%, 6/15/12 600 618,000
NMHG Holding Co.
10.00%, 5/15/09 220 242,000
SPX Corp.
7.50%, 1/01/13 205 208,331
Terex Corp.
10.375%, 4/01/11 375 423,750
Trinity Industries, Inc.
6.50%, 3/15/14 530 522,050
TriMas Corp.
9.875, 6/15/12 470 487,625
-------------
4,521,231
-------------
Metals/Mining-0.7%
AK Steel Corp.
7.875%, 2/15/09 355 352,337
International Steel Group, Inc.
6.50%, 4/15/14(d) 437 437,000
Peabody Energy Corp.
6.875%, 3/15/13 380 410,400
-------------
1,199,737
-------------
Paper & Packaging-3.0%
Ball Corp.
6.875%, 12/15/12 1,000 1,065,000
Berry Plastics Corp.
10.75%, 7/15/12 390 440,700
Crown Paper Co.
11.00%, 9/01/05(b) 5,000 1
Georgia-Pacific Corp.
9.375%, 2/01/13* 715 841,913
_______________________________________________________________________________
16 o ACM MANAGED DOLLAR INCOME FUND
Portfolio of Investments
- -------------------------------------------------------------------------------
Principal
Amount
(000) U.S. $ Value
- -------------------------------------------------------------------------------
Graphic Packaging Int'l Corp.
9.50%, 8/15/13 $ 655 $ 748,338
Greif Bros. Corp.
8.875%, 8/01/12 260 289,900
Owens-Brockway Glass Container, Inc.
8.875%, 2/15/09 735 799,312
Pliant Corp.
11.125%, 9/01/09 520 540,800
Russell-Stanley Holdings, Inc.
9.00%, 11/30/08(d)(g) 855 85,449
Stone Container Corp.
9.25%, 2/01/08 535 597,863
9.75%, 2/01/11 12 13,290
-------------
5,422,566
-------------
Publishing-1.3%
American Media, Inc.
8.875%, 1/15/11 105 108,937
10.25%, 5/01/09 475 499,937
Dex Media East LLC
9.875%, 11/15/09 110 126,500
12.125%, 11/15/12 195 242,775
Dex Media West LLC
8.50%, 8/15/10 160 181,600
9.875%, 8/15/13 571 670,925
PEI Holdings, Inc.
11.00%, 3/15/10 143 166,059
RH Donnelley, Inc.
10.875%, 12/15/12(d) 255 309,188
-------------
2,305,921
-------------
Restaurants-0.1%
Domino's, Inc.
8.25%, 7/01/11 237 256,552
-------------
Retail-0.4%
J.C. Penney Corporation, Inc.
8.00%, 3/01/10 455 518,131
Petro Stopping Centers LP
9.00%, 2/15/12 250 265,000
-------------
783,131
-------------
Service-1.1%
Allied Waste North America
8.50%, 12/01/08 80 86,800
8.875%, 4/01/08 600 651,000
Iron Mountain, Inc.
7.75%, 1/15/15 115 121,900
8.625%, 4/01/13 350 379,750
National Waterworks, Inc.
10.50%, 12/01/12 235 266,725
_______________________________________________________________________________
ACM MANAGED DOLLAR INCOME FUND o 17
Portfolio of Investments
- -------------------------------------------------------------------------------
Principal
Amount
(000) U.S. $ Value
- -------------------------------------------------------------------------------
Service Corp. International
6.50%, 3/15/08 $ 240 $ 249,900
7.70%, 4/15/09 240 258,600
-------------
2,014,675
-------------
Supermarket & Drugstore-1.4%
Couche-Tard, Inc.
7.50%, 12/15/13 298 317,370
Pathmark Stores, Inc.
8.75%, 2/01/12* 610 570,350
Rite Aid Corp.
9.25%, 6/01/13 75 76,875
9.50%, 2/15/11 615 676,500
Roundy's, Inc.
Series B
8.875%, 6/15/12 250 269,375
Stater Bros. Holdings, Inc.
8.125%, 6/15/12(d) 595 623,263
-------------
2,533,733
-------------
Technology-1.8%
Amkor Technologies, Inc.
7.75%, 5/15/13 1,165 955,300
Fairchild Semiconductor
10.50%, 2/01/09 470 502,900
ON Semiconductor Corp.
12.00%, 3/15/10 465 534,750
Unisys Corp.
6.875%, 3/15/10 1,000 1,042,500
7.875%, 4/01/08 185 190,088
-------------
3,225,538
-------------
Transportation-0.1%
Horizon Lines, LLC
9.00%, 11/01/12(d) 195 205,725
-------------
Utilities - Electric & Gas-1.7%
AES Corporation
8.75%, 5/15/13(d) 65 73,287
9.00%, 5/15/15(d) 105 118,387
10.00%, 7/15/05(d) 172 174,224
Calpine Corp.
8.50%, 7/15/10(d) 715 546,975
Dynegy Holdings, Inc.
10.125%, 7/15/13(d) 305 350,750
NRG Energy, Inc.
8.00%, 12/15/13(d) 490 524,912
Ormat Funding Corp.
8.25%, 12/30/20(d) 395 390,607
PG&E Corp.
6.875%, 7/15/08 370 400,525
_______________________________________________________________________________
18 o ACM MANAGED DOLLAR INCOME FUND
Portfolio of Investments
- -------------------------------------------------------------------------------
Principal
Amount
(000) U.S. $ Value
- -------------------------------------------------------------------------------
SEMCO Energy, Inc.
7.125%, 5/15/08 $ 125 $ 131,875
7.75%, 5/15/13 235 253,213
-------------
2,964,755
-------------
Total U.S. Corporate Debt Obligations
(cost $90,625,683) 81,766,628
-------------
NON-U.S. CORPORATE DEBT
OBLIGATIONS-8.6%
Bahamas-0.2%
Sun International Hotels, Ltd.
8.875%, 8/15/11 245 268,581
-------------
Bermuda-0.4%
NCL Corp
10.625%, 7/15/14(d) 685 717,538
-------------
Brazil-0.7%
PF Export Receivables Master Trust
6.436%, 6/01/15(d) 1,309 1,313,608
-------------
Canada-1.0%
Celestica, Inc.
7.875%, 7/01/11 610 632,875
Fairfax Financial Holdings
7.375%, 4/15/18 250 202,500
7.75%, 4/26/12 285 257,925
Intrawest Corp.
7.50%, 10/15/13 195 202,069
10.50%, 2/01/10 140 151,200
Russel Metals, Inc.
6.375%, 3/01/14 345 345,000
-------------
1,791,569
-------------
France-0.3%
Crown Euro Holdings S.A.
9.50%, 3/01/11 405 451,575
-------------
Great Britian-0.6%
Inmarsat Finance PLC
7.625%, 6/30/12(d) 560 555,800
Royal & Sun Alliance Insurance Group PLC
8.95%, 10/15/29 420 522,510
-------------
1,078,310
-------------
Ireland-0.4%
Eircom Funding
8.25%, 8/15/13 230 251,850
MDP Acquisitions PLC
9.625%, 10/01/12 390 440,700
-------------
692,550
-------------
_______________________________________________________________________________
ACM MANAGED DOLLAR INCOME FUND o 19
Portfolio of Investments
- -------------------------------------------------------------------------------
Shares or
Principal
Amount
(000) U.S. $ Value
- -------------------------------------------------------------------------------
Kazakhstan-0.4%
Hurricane Finance BV
9.625%, 2/12/10(d) $ 400 $ 432,000
Kazkommerts International BV
8.50%, 4/16/13(d) 350 355,250
-------------
787,250
-------------
Liberia-0.4%
Royal Caribbean Cruises, Ltd.
8.00%, 5/15/10 625 703,906
-------------
Mexico-2.6%
Innova S. de R.L.
9.375%, 9/19/13 2,865 3,115,687
12.875%, 4/01/07 1,003 1,025,772
Vitro Envases Norteamerica
10.75%, 7/23/11(d) 420 411,600
-------------
4,553,059
-------------
Romania-0.3%
Mobifon Holdings BV
12.50%, 7/31/10 425 497,250
-------------
Russia-1.1%
Gazprom OAO
9.625%, 3/01/13(d) 150 166,500
Mobile Telesystems Finance S.A.
9.75%, 1/30/08 525 561,750
9.75%, 1/30/08(d) 100 106,250
10.95%, 12/21/04 1,105 1,116,050
Tyumen Oil
11.00%, 11/06/07(d) 70 78,575
-------------
2,029,125
-------------
Singapore-0.2%
Flextronics International, Ltd.
6.50%, 5/15/13 425 434,563
-------------
Total Non-U.S. Corporate Debt Obligations
(cost $14,393,799) 15,318,884
-------------
NON-CONVERTIBLE PREFERRED
STOCK-0.7%
Sovereign Real Estate Investment Trust
12.00%(d) 870 1,278,900
-------------
Total Non-Convertible Preferred Stock
(cost $818,725) 1,278,900
-------------
_______________________________________________________________________________
20 o ACM MANAGED DOLLAR INCOME FUND
Portfolio of Investments
- -------------------------------------------------------------------------------
Contracts(h),
or Shares U.S. $ Value
- -------------------------------------------------------------------------------
WARRANTS(i)-0.0%
Central Bank of Nigeria
Warrants, expiring 11/15/20(i) 1,000 $ 0
Republic of Venezuela
Warrants, expiring 4/15/20(i) 7,140 0
-------------
Total Warrants
(cost $0) 0
-------------
CALL OPTIONS PURCHASED(i)-0.0%
Republic of Brazil C-Bonds
Expiring Oct '04 @ 111.50 150,000 2,850
Expiring Oct '04 @ 112.50 300,000 4,500
Expiring Oct '04 @ 113.00 300,000 3,900
-------------
Total Call Options Purchased
(cost $14,595) 11,250
-------------
Total Investments Before Security
Lending Collateral-118.0%
(cost $196,249,212) 210,891,908
-------------
Investments of Cash Collateral for
Securites Loaned-2.1%
Short-Term Investment
UBS Private Money Market Fund, LLC
1.66%
(cost $3,828,575) 3,828,575 3,828,575
-------------
Total Investments-120.1%
(cost $200,077,787) 214,720,483
Other Assets Less Liabilities-(20.1)% (35,984,991)
-------------
Net Assets-100.0% $ 178,735,492
=============
CREDIT DEFAULT SWAP CONTRACTS (see Note C)
Notional Unrealized
Swap Counterparty & Amount Interest Termination Appreciation/
Reference Obligation (000) Rate Date (Depreciation)
- --------------------------------------------------------------------------------------------
Buy Contracts:
Citigroup Global Markets, Inc.
Federal Republic of Hungary
4.50%, 2/06/13 350 0.50% 11/26/13 $(7,436)
Citigroup Global Markets, Inc.
Federal Republic of Philippines
10.625%, 3/16/25 510 5.60 3/20/14 (12,001)
JP Morgan Chase Bank
Federal Republic of Ecuador
7.00%, 8/15/30 275 3.70 4/30/05 (7,478)
_______________________________________________________________________________
ACM MANAGED DOLLAR INCOME FUND o 21
Portfolio of Investments
- -------------------------------------------------------------------------------
CREDIT DEFAULT SWAP CONTRACTS (see Note C) (continued)
Notional Unrealized
Swap Counterparty & Amount Interest Termination Appreciation/
Reference Obligation (000) Rate Date (Depreciation)
- --------------------------------------------------------------------------------------------
Sale Contracts:
Citigroup Global Markets, Inc.
Federal Republic of Brazil
12.25%, 3/06/30 1,000 6.35% 8/20/05 $58,508
Citigroup Global Markets, Inc.
Federal Republic of Brazil
12.25%, 3/06/30 900 4.40 5/20/06 58,610
Credit Suisse First Boston Int'l.
Federal Republic of Brazil
12.25%, 3/06/30 750 6.90 6/20/07 92,625
Morgan Stanley Dean Witter
Federal Republic of Brazil
12.25%, 3/06/30 680 3.80 8/20/06 24,763
Citigroup Global Markets, Inc.
Federal Republic of Philippines
10.625%, 3/16/25 510 4.95 3/20/09 13,190
Citigroup Global Markets, Inc.
Federal Republic of Mexico
8.30%, 8/15/31 750 2.40 5/20/14 56,625
Citigroup Global Markets, Inc.
Federal Republic of Mexico
8.30%, 8/15/31 1,100 2.05 5/20/09 58,797
REVERSE REPURCHASE AGREEMENTS (see Note C)
Interest
Broker Rate Maturity Amount
- --------------------------------------------------------------------------------------------
Barclays Securities 1.50% 12/30/05 $ 2,275,189
Barclays Securities 1.40 12/30/05 4,410,343
Chase Manhattan Bank 0.25 12/30/05 6,472,665
Chase Manhattan Bank 0.75 12/30/05 2,556,250
Chase Manhattan Bank 1.65 12/30/05 2,480,796
Chase Manhattan Bank 1.65 12/30/05 1,234,500
Citigroup Global Markets, Inc 0.75 12/30/05 9,290,508
Citigroup Global Markets, Inc 1.35 12/30/05 5,467,977
Merrill Lynch 1.40 12/30/05 3,585,000
Merrill Lynch 1.70 12/30/05 962,891
Santander Investment Securities 1.70 12/30/05 3,740,751
-----------
$42,476,870
-----------
_______________________________________________________________________________
22 o ACM MANAGED DOLLAR INCOME FUND
Portfolio of Investments
- -------------------------------------------------------------------------------
* Represents entire or partial securities out on loan. See Note F for
securities lending information.
(a) Coupon changes periodically based upon a predetermined schedule. Stated
interest rate in effect at September 30, 2004.
(b) Security is in default and is non-income producing.
(c) Positions, or portions thereof, with an aggregate market value of
$42,597,463 have been segregated to collateralize reverse repurchase agreements.
(d) 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, 2004, the aggregate market value of these securities
amounted to $59,711,229 or 33.4% of net assets.
(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) Illiquid security, valued at fair market value (see Note A).
(g) Security exempt from registration under Rule 144A of the Securities Act of
1933. This security, which represents 0.05% of net assets as of September 30,
2004, is considered illiquid and restricted.
Market Value
Acquisition Acquisition Market Percentage of
Restricted Security Date Cost Value Net Assets
- ------------------------------ ------------ -------------- ------------- -------------
Russell-Stanley Holdings, Inc. 2/26/99- $4,978,465 $85,449 0.05%
9.00%; 11/30/08 8/16/04
(h) One contract relates to principal amount of $1.00.
(i) Non-income producing security.
Glossary of Terms:
DCB - Debt Conversion Bond
FRN - Floating Rate Note
See notes to financial statements.
_______________________________________________________________________________
ACM MANAGED DOLLAR INCOME FUND o 23
Statement of Assets & Liabilities
- -------------------------------------------------------------------------------
STATEMENT OF ASSETS & LIABILITIES
September 30, 2004
ASSETS
Investments in securities, at value
(cost $200,077,787--including investment of cash
collateral for securities loaned of $3,828,575) $ 214,720,483(a)
Cash 3,043,614
Receivable for investment securities sold 7,508,869
Interest and dividends receivable 4,091,523
Unrealized appreciation on credit default swap contracts 363,118
Prepaid expenses 9,570
-------------
Total assets 229,737,177
-------------
LIABILITIES
Reverse repurchase agreements 42,476,870
Payable for collateral received on securities loaned 3,828,575
Due to broker 3,115,728
Payable for investment securities purchased 1,305,371
Advisory fee payable 123,279
Unrealized depreciation on credit default swap contracts 26,915
Administrative fee payable 19,727
Accrued expenses and other liabilities 105,220
-------------
Total liabilities 51,001,685
-------------
Net Assets $ 178,735,492
=============
COMPOSITION OF NET ASSETS
Common stock, at par $ 226,977
Additional paid-in capital 296,774,513
Distributions in excess of net investment income (382,449)
Accumulated net realized loss on investment transactions (132,862,448)
Net unrealized appreciation of investments 14,978,899
-------------
$ 178,735,492
=============
NET ASSET VALUE PER SHARE
(based on 22,697,719 shares outstanding) $7.87
=====
(a) Includes securities on loan with a value of $3,674,409 (see Note F)
See notes to financial statements.
_______________________________________________________________________________
24 o ACM MANAGED DOLLAR INCOME FUND
Statement of Operations
- -------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
Year Ended September 30, 2004
INVESTMENT INCOME
Interest $ 19,551,527
Dividends 172,190 $ 19,723,717
------------
EXPENSES
Advisory fee 1,320,701
Administrative fee 251,049
Custodian 117,577
Audit and legal 112,883
Printing 64,772
Transfer agency 46,447
Directors' fees 33,857
Registration 26,125
Miscellaneous 45,616
------------
Total expenses before interest 2,019,027
Interest expense 525,478
------------
Total expenses 2,544,505
------------
Net investment income 17,179,212
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENT TRANSACTIONS
Net realized gain on:
Investment transactions 11,701,009
Swap contracts 2,295,256
Written options 224,373
Net change in unrealized
appreciation/depreciation of:
Investments (8,367,899)
Swap contracts (634,097)
------------
Net gain on investment transactions 5,218,642
------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS $ 22,397,854
============
See notes to financial statements.
_______________________________________________________________________________
ACM MANAGED DOLLAR INCOME FUND o 25
Statement of Changes in Net Assets
- -------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
Year Ended Year Ended
September 30, September 30,
2004 2003
============= =============
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS
Net investment income $ 17,179,212 $ 18,293,615
Net realized gain on investment
transactions 14,220,638 3,184,282
Net change in unrealized
appeciation/depreciation of
investments (9,001,996) 43,772,735
------------- -------------
Net increase in net assets from
operations 22,397,854 65,250,632
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM
Net investment income (18,071,829) (18,177,141)
COMMON STOCK TRANSACTIONS
Reinvestment of dividends resulting in the
issuance of Common Stock 1,227,800 1,273,690
------------- -------------
Total increase 5,553,825 48,347,181
NET ASSETS
Beginning of period 173,181,667 124,834,486
------------- -------------
End of period (including distributions in
excess of net investment income of
$382,449 and $123,407,
respectively.) $ 178,735,492 $ 173,181,667
============= =============
See notes to financial statements.
_______________________________________________________________________________
26 o ACM MANAGED DOLLAR INCOME FUND
Statement of Cash Flows
- -------------------------------------------------------------------------------
STATEMENT OF CASH FLOWS
Year Ended September 30, 2004
INCREASE (DECREASE) IN CASH FROM
OPERATION ACTIVITIES:
Interest and dividends received $ 19,354,791
Interest expense paid (572,479)
Operating expenses paid (2,057,932)
-------------
Net increase in cash from operating
activities $ 16,724,380
INVESTING ACTIVITIES:
Purchases of long-term investments (215,236,454)
Proceeds from disposition of long-term
investments 227,660,021
Proceeds from disposition of short-term
investments, net
Cash collateral received on securities
loaned 3,828,575
Net premium received on option
transactions 78,104
Net premium received on swaps
transactions 2,295,256
Net increase in cash from investing
activities 18,625,502
FINANCING ACTIVITIES:*
Cash dividends paid (16,844,029)
Proceeds from reverse repurchase
agreements (16,155,022)
Net decrease in cash from financing
activities (32,999,051)
------------
Net increase in cash 2,350,831
Cash at beginning of period 692,783
------------
Cash at end of period $ 3,043,614
============
- -------------------------------------------------------------------------------
RECONCILIATION OF NET INCREASE IN NET
ASSETS FROM OPERATIONS TO NET
INCREASE IN CASH FROM OPERATING
ACTIVITIES:
Net increase in net assets from
operations $ 22,397,854
ADJUSTMENTS:
Decrease in dividends and interest
receivable $ 1,475,867
Accretion of bond discount and
amortization of bond premium (1,844,793)
Decrease in accrued expenses and other
assets (38,905)
Decrease in interest payable (47,001)
Net realized gain on investment
transactions (14,220,638)
Net change in unrealized appreciation/
depreciation of investments 9,001,996
-------------
Total adjustments (5,673,474)
------------
NET INCREASE IN CASH FROM OPERATING
ACTIVITIES $ 16,724,380
============
* Non-cash financing activities not included herein consist of reinvestment of
dividends and distributions.
See notes to financial statements.
_______________________________________________________________________________
ACM MANAGED DOLLAR INCOME FUND o 27
Notes to Financial Statements
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
September 30, 2004
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 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 not listed on an exchange but traded on The
NASDAQ Stock Market, Inc. ("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) (but excluding
securities traded on NASDAQ) 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, Alliance Capital Management, L.P. (the
"Adviser") may
_______________________________________________________________________________
28 o ACM MANAGED DOLLAR INCOME FUND
Notes to Financial Statements
- -------------------------------------------------------------------------------
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 accretes discounts as adjustments to interest income. Additionally,
the Fund amortizes premiums on debt securities for financial statement
reporting purposes only.
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.
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
_______________________________________________________________________________
ACM MANAGED DOLLAR INCOME FUND o 29
Notes to Financial Statements
- -------------------------------------------------------------------------------
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 an Investment Advisory Agreement, the Fund pays the Adviser
an advisory fee at an annual rate of .75 of 1% of the average adjusted weekly
net assets of the Fund. Such fee is accrued daily and paid monthly.
Under the terms of a Shareholder Inquiry Agency Agreement with Alliance Global
Investor Services, Inc. (AGIS), a wholly-owned subsidiary of the Adviser, the
Fund reimburses AGIS for costs relating to servicing phone inquiries on behalf
of the Fund. During the year ended September 30, 2004, the Fund reimbursed $265
to AGIS.
Under the terms of an Administration Agreement, the Fund paid Princeton
Administrators, L.P. (the "Administrator") a fee at an annual rate of .15 of 1%
of the average adjusted weekly net assets of the Fund for the period September
1, 2003 through June 30, 2004. Effective July 1, 2004, this fee was reduced so
as to charge the Fund at a reduced annual rate of .12 of 1% of the average
adjusted weekly 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, 2004, were as follows:
Purchases Sales
============= =============
Investment securities (excluding
U.S. government securities) $ 209,461,003 $ 230,120,754
U.S. government securities -0- -0-
At September 30, 2004, 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 $ 201,224,761
=============
Gross unrealized appreciation $ 28,690,049
Gross unrealized depreciation (15,194,327)
-------------
Net unrealized appreciation $ 13,495,722
=============
_______________________________________________________________________________
30 o ACM MANAGED DOLLAR INCOME FUND
Notes to Financial Statements
- -------------------------------------------------------------------------------
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.
Transactions in written options for the year ended September 30, 2004 were as
follows:
Number of
Contracts Premiums
(000) Received
============= =============
Options outstanding at
September 30, 2003 -0- $ -0-
Options written 12,258 224,373
Options exercised (770) (11,935)
Options terminated in closing purchase
transactions -0- -0-
Options expired (11,488) (212,438)
------------- -------------
Options outstanding at
September 30, 2004 -0- $ -0-
============= =============
_______________________________________________________________________________
ACM MANAGED DOLLAR INCOME FUND o 31
Notes to Financial Statements
- -------------------------------------------------------------------------------
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.
As of October 1, 2003, the Portfolios have adopted the method of accounting for
interim payments on swap contracts in accordance with Financial Accounting
Standards Board Statement No. 133. 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. Prior to October 1, 2003, these interim payments were reflected
within interest income in the statement 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
provides 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) semi-annual 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
_______________________________________________________________________________
32 o ACM MANAGED DOLLAR INCOME FUND
Notes to Financial Statements
- -------------------------------------------------------------------------------
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, 2004, the Fund had Sale Contracts outstanding with Maximum
Payout Amounts aggregating $5,690,000, with net unrealized appreciation of
$363,118 and terms ranging from 1 year to 10 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. The Fund had Buy Contracts outstanding with a
Notional Amount of $510,000 with respect to the same referenced obligation and
same counterparty of certain Sale Contracts outstanding, which reduced its
obligation to make payments on Sale Contracts to $5,180,000 as of September 30,
2004.
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, 2004, the average amount of reverse repurchase
agreements outstanding was $56,493,655 and the daily weighted average annual
interest rate was 0.93%.
NOTE D
Capital Stock
There are 300,000,000 shares of $.01 par value common stock authorized of which
22,697,719 shares were issued and outstanding at September 30, 2004. During the
year ended September 30, 2004 and the year ended September 30, 2003, the Fund
issued 157,097 and 182,814 shares, respectively, in connection with the Fund's
dividend reinvestment plan.
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 guar-
_______________________________________________________________________________
ACM MANAGED DOLLAR INCOME FUND o 33
Notes to Financial Statements
- -------------------------------------------------------------------------------
antor 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 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 United States government.
The Fund invests in the Sovereign Debt Obligations of countries that are
considered emerging market countries at the time of purchase. Therefore, the
Fund is susceptible to governmental factors and economic and debt restructuring
developments adversely affecting the 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.
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
_______________________________________________________________________________
34 o ACM MANAGED DOLLAR INCOME FUND
Notes to Financial Statements
- -------------------------------------------------------------------------------
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, 2004, the Fund had loaned securities with a value of $3,674,409 and
received cash collateral of $3,828,575, which was invested in a money market
fund as included in the portfolio of investments. For the year ended September
30, 2004, the Fund earned fee income of $20,102, 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, 2004 and September 30, 2003 were as follows:
2004 2003
============= =============
Distributions paid from:
Ordinary income $ 18,071,829 $ 18,177,141
------------- -------------
Total taxable distributions 18,071,829 18,177,141
Tax return of capital -0- -0-
------------- -------------
Total distributions paid $ 18,071,829 $ 18,177,141
============= =============
As of September 30, 2004, the components of accumulated earnings/(deficit) on a
tax basis were as follows:
Accumulated capital and other losses $(132,040,578)(a)
Unrealized appreciation/(depreciation) 13,774,580(b)
-------------
Total accumulated earnings/(deficit) $(118,265,998)
=============
(a) On September 30, 2004, the Fund had a net capital loss carryforward of
$132,040,578 of which $43,032,718 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 $14,423,021
(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 increase 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 35
Notes to Financial Statements
- -------------------------------------------------------------------------------
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. 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 Discontinuance dated September 1, 2004 ("NYAG Order"). 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;
_______________________________________________________________________________
36 o ACM MANAGED DOLLAR INCOME FUND
Notes to Financial Statements
- -------------------------------------------------------------------------------
(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.
The Adviser and approximately twelve other investment management firms were
publicly mentioned in connection with the settlement by the SEC of charges that
an unaffiliated broker/dealer violated federal securities laws relating to its
receipt of compensation for selling specific mutual funds and the disclosure of
such compensation. The SEC has indicated publicly that, among other things, it
is considering enforcement action in connection with mutual funds' disclosure
of such arrangements and in connection with the practice of considering mutual
fund sales in the direction of brokerage commissions from fund portfolio
transactions. The SEC has issued subpoenas to the Adviser in connection with
this matter and the Adviser has provided documents and other information to the
SEC and is cooperating fully with its investigation.
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 Aucoin Complaint was filed in the United States District Court
for the Southern District of New York by an alleged shareholder 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 puni-
_______________________________________________________________________________
ACM MANAGED DOLLAR INCOME FUND o 37
Notes to Financial Statements
- -------------------------------------------------------------------------------
tive 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, numerous additional lawsuits making factual allegations
substantially similar to those in the Aucoin Complaint were filed against the
Adviser and certain other defendants, and others may be filed.
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.
_______________________________________________________________________________
38 o ACM MANAGED DOLLAR INCOME FUND
Financial Highlights
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Selected Data For A Share Of Common Stock Outstanding Throughout Each Period
Year Ended September 30,
---------------------------------------------------------------
2004(a) 2003 2002(b) 2001 2000
----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $7.68 $5.58 $6.33 $8.09 $8.39
INCOME FROM INVESTMENT
OPERATIONS
Net investment income(c) 0.76 0.81 0.84 0.98 1.08
Net realized and unrealized
gain (loss) on investment
transactions 0.23 2.10 (0.71) (1.72) (0.22)
Net increase (decrease) in net
asset value from operations 0.99 2.91 0.13 (0.74) 0.86
LESS: DIVIDENDS AND
DISTRIBUTIONS
Dividends from net investment
income (0.80) (0.81) (0.85) (0.95) (1.02)
Tax return of capital -0- -0- (0.03) (0.07) (0.14)
Total dividends and
distributions (0.80) (0.81) (0.88) (1.02) (1.16)
Net asset value, end of period $7.87 $7.68 $5.58 $6.33 $8.09
Market value, end of period $7.87 $8.15 $6.29 $7.62 $8.50
Premium/Discount 0.00% 6.12% 12.72% 20.38% 5.07%
TOTAL RETURN
Total investment return
based on:(d)
Market value 6.91% 45.71% (6.14)% 3.02% (5.41)%
Net asset value 13.45% 54.77% .23% (10.08)% 9.99%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $178,735 $173,182 $124,834 $140,110 $179,653
Ratios to average net assets of:
Expenses 1.44% 1.72% 2.12% 2.75% 2.70%
Expenses, excluding
interest expense(e) 1.15% 1.21% 1.15% 1.13% 1.09%
Net investment income 9.76% 11.88% 10.81% 9.90% 9.55%
Portfolio turnover rate 95% 80% 63% 129% 134%
See footnote summary on page 40.
_______________________________________________________________________________
ACM MANAGED DOLLAR INCOME FUND o 39
Financial Highlights
- -------------------------------------------------------------------------------
(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, 2004, 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 0.17%.
(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 .29%, .51%, .97%, 1.62% and 1.61%,
respectively, on borrowings.
_______________________________________________________________________________
40 o ACM MANAGED DOLLAR INCOME FUND
Report of Independent Registered Public Accounting Firm
- -------------------------------------------------------------------------------
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, 2004, and the related statements of operations
and cash flows for the year then ended, the statement of changes in net assets
for each of the two years in the period then ended, and the financial
highlights for each of the 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 auditing 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. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements and financial
highlights. Our procedures included confirmation of securities owned as of
September 30, 2004, by correspondence with the custodian and others. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of ACM
Managed Dollar Income Fund, Inc. at September 30, 2004, 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 22, 2004
TAX INFORMATION (unaudited)
For the fiscal year ended September 30, 2004 certain dividends paid by the Fund
may be subject to a maximum tax rate of 15%, as provided for by the Jobs and
Growth Tax Relief Reconciliation Act of 2003. The Fund designates a maximum
amount of $172,190 as qualified dividend income, which is taxed at a maximum
rate of 15%.The information and distributions reported herein may differ from
the information and distributions taxable to the shareholders for the calendar
year ending December 31, 2004. Complete information will be computed and
reported in conjunction with year 2004 Form 1099-DIV.
_______________________________________________________________________________
ACM MANAGED DOLLAR INCOME FUND o 41
Additional Information
- -------------------------------------------------------------------------------
ADDITIONAL INFORMATION
(unaudited)
Shareholders whose shares are registered in their own names may elect to be
participants in the Dividend Reinvestment and Cash Purchase Plan (the "Plan"),
pursuant to which dividends and capital gain distributions to shareholders will
be paid in or reinvested in additional shares of the Fund. State Street Bank
and Trust Company (the "Agent") will act as agent for participants under the
Plan. Shareholders whose shares are held in the name of a broker or nominee
should contact such broker or nominee to determine whether or how they may
participate in the Plan.
If the Board declares an income distribution or determines to make a capital
gain distribution payable either in shares or in cash, as holders of the Common
Stock may have elected, non-participants in the Plan will receive cash and
participants in the Plan will receive the equivalent in shares of Common Stock
of the Fund valued as follows:
(i) If the shares of Common Stock are trading at net asset value or at a
premium above net asset value at the time of valuation, the Fund will issue new
shares at the greater of net asset value or 95% of the then current market
price.
(ii) If the shares of Common Stock are trading at a discount from net asset
value at the time of valuation, the Plan Agent will receive the dividend or
distribution in cash and apply it to the purchase of the Fund's shares of
Common Stock in the open market on the New York Stock Ex-change or elsewhere,
for the participants' accounts. Such purchases will be made on or shortly after
the payment date for such dividend or distribution and in no event more than 30
days after such date except where temporary curtailment or suspension of
purchase is necessary to comply with Federal securities laws. If, before the
Plan agent has completed its purchases, the market price exceeds the net asset
value of a share of Common Stock, the average purchase price per share paid by
the Plan agent may exceed the net asset value of the Fund's shares of Common
Stock, resulting in the acquisition of fewer shares than if the dividend or
distribution had been paid in shares issued by the Fund.
The Agent will maintain all shareholders' accounts in the Plan and furnish
written confirmation of all transactions in the account, including information
needed by shareholders for tax records. Shares in the account of each Plan
participant will be held by the Agent in non-certificate form in the name of
the participant, and each shareholders' 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.
_______________________________________________________________________________
42 o ACM MANAGED DOLLAR INCOME FUND
Additional Information
- -------------------------------------------------------------------------------
The automatic reinvestment of dividends and distributions will not relieve
participants of any income taxes that may be payable (or required to be
withheld) on dividends and distributions.
Experience under the Plan may indicate that changes are desirable. Accordingly,
the Fund reserves the right to amend or terminate the Plan as applied to any
voluntary cash payments made and any dividend or distribution paid subsequent
to written notice of the change sent to participants in the Plan at least 90
days before the record date for such dividend or distribution. The Plan may
also be amended or terminated by the Agent on at least 90 days' written notice
to participants in the Plan. All correspondence concerning the Plan should be
directed to the Agent at State Equiserve Trust Company, N.A., P.O. Box 43011,
Providence, RI02940-3011
Since the filing of the most recent amendment to the Fund's registration
statement with the Securities and Exchange Commission, there have been (i) no
material changes in the Fund's investment objectives or policies, (ii) no
changes to the Fund's charter or by-laws that would delay or prevent a change
of control of the Fund, (iii) no material changes in the principal risk factors
associated with investment in the Fund.
_______________________________________________________________________________
ACM MANAGED DOLLAR INCOME FUND o 43
Board of Directors
- -------------------------------------------------------------------------------
BOARD OF DIRECTORS
William H.Foulk, Jr.,(1) Chairman
Marc O.Mayer, President
Ruth Block(1)
David H. Dievler(1)
John H. Dobkin(1)
Dr. James M. Hester(1)
Donald J. Robinson(1)
OFFICERS
Philip L. Kirstein, Senior Vice President and Independent Compliance Officer
Paul J. DeNoon(2), Vice President
James E. Kennedy, Jr.(2), Vice President
Mark R. Manley, Secretary
Mark D. Gersten, Treasurer and Chief Financial Officer
Vincent S. Noto, Controller
Administrator
Princeton Administrators, L.P.
P.O.Box 9095
Princeton, NJ 08543-9095
Custodian
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
Dividend Paying Agent, Transfer Agent And Registrar
Equiserve Trust Company, N.A.
P.O. Box 43011
Providence, RI 02940-3011
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 and Governance and Nominating Committee.
(2) Messrs. DeNoon and Kennedy are the persons primarily responsible for the
day-to-day management of the Fund's investment 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 herein 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.
_______________________________________________________________________________
44 o ACM MANAGED DOLLAR INCOME FUND
Management of the 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
DATE OF BIRTH 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 68 None
1345 Avenue of the ACMC since 2001; prior thereto,
Americas Chief Executive Officer of
New York, NY 10105 Sanford C. Bernstein & Co., LLC
10/2/57 and its predecessor since prior to
(2003) 1999.
DISINTERESTED DIRECTORS
William H. Foulk, Jr.,# Investment adviser and an 116 None
2 Sound View Drive independent consultant. He was
Suite 100 formerly Senior Manager of
Greenwich, CT 06830 Barrett Associates, Inc., a
9/7/32 registered investment adviser,
(1993) with which he had been
Chairman of the Board associated since prior to 1999. 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.
Ruth Block,#+++ Formerly Executive Vice President 96 None
500 SE Mizner Blvd., and Chief Insurance Officer of
Boca Raton, FL 33432 The Equitable Life Assurance
11/7/30 Society of the United States;
(1993) Chairman and Chief Executive
Officer of Evlico; Director of
Avon, BP (oil and gas), Ecolab
Incorporated (specialty chemicals),
Tandem Financial Group and
Donaldson, Lufkin & Jenrette
Securities Corporation; former
Governor at Large National
Association of Securities Dealers,
Inc.
_______________________________________________________________________________
ACM MANAGED DOLLAR INCOME FUND o 45
Management of the Fund
- -------------------------------------------------------------------------------
NAME, PORTFOLIOS
ADDRESS, PRINCIPAL IN FUND OTHER
DATE OF BIRTH OCCUPATION(S) COMPLEX DIRECTORSHIP
OF DIRECTOR DURING PAST OVERSEEN BY HELD BY
(YEAR ELECTED*) 5 YEARS DIRECTOR DIRECTOR
- --------------------------------------------------------------------------------------------------------------
DISINTERESTED DIRECTORS
(continued)
David H. Dievler,# Independent consultant. Until 100 None
P.O. Box 167 December 1994 he was Senior
Spring Lake, NJ 07762 Vice President of Alliance Capital
10/23/29 Management Corporation
(1993) ("ACMC") responsible for mutual
fund administration. Prior to joining
ACMC 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.
John H. Dobkin,# Consultant. Formerly President of 98 None
P.O. Box 12 Save Venice, Inc. (preservation
Annandale, NY 12504 organization) from 2001-2002, a
2/19/42 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 ACMC.
Dr. James M. Hester, # Formerly President of the Harry Frank 11 None
25 Cleveland Lane Guggenheim Foundation, New York
Princeton, NJ 08540 University and the New York
4/19/24 Botanical Garden. Formerly Rector
(1993) of the United Nations University
and Vice Chairman of the Board
of the Federal Reserve Bank of
New York.
_______________________________________________________________________________
46 o ACM MANAGED DOLLAR INCOME FUND
Management of the Fund
- -------------------------------------------------------------------------------
NAME, PORTFOLIOS
ADDRESS, PRINCIPAL IN FUND OTHER
DATE OF BIRTH OCCUPATION(S) COMPLEX DIRECTORSHIP
OF DIRECTOR DURING PAST OVERSEEN BY HELD BY
(YEAR ELECTED*) 5 YEARS DIRECTOR DIRECTOR
- --------------------------------------------------------------------------------------------------------------
DISINTERESTED DIRECTORS
(continued)
Donald J. Robinson,# Senior Counsel to the law firm of 96 None
98 Hell's Peak Road Orrick, Herrington & Sutcliffe LLP
Weston, VT 05161 since prior to 1999. Formerly a
8/24/34 senior partner and a member of
(1996) the Executive Committee of that
firm. He was also a member
and Chairman of the Municipal
Securities Rulemaking Board and
Trustee of the Museum of the City
of New York.
* There is no stated term of office for the Fund's directors.
# Member of the Audit Committee and Governance and Nominating Committee.
++ Mr. Mayer is an "interested person", as defined in the 1940 Act, due to his
position as Executive Vice President of ACMC.
+++ Ms. Block was an "interested person" as defined in the 1940 Act, until
October 21, 2004 by reason of her ownership of 116 American Depositary Shares
of AXA, having a value of approximately $2,396. AXA is a controlling person of
ACMC. Ms. Block received shares of The Equitable Companies Incorporated as part
of the demutualization of The Equitable Life Assurance Society of the United
States, which was subsequently converted through a corporate action into 116
American Depositary Shares of AXA.
_______________________________________________________________________________
ACM MANAGED DOLLAR INCOME FUND o 47
Management of the Fund
- -------------------------------------------------------------------------------
Officers of the Fund
Certain information concerning the Fund's Officers is listed below.
NAME,
ADDRESS* AND POSITION(S) PRINCIPAL OCCUPATION
DATE OF BIRTH HELD WITH FUND DURING PAST 5 YEARS**
- --------------------------------------------------------------------------------------------------------------
Marc O. Mayer, President See biography above.
10/2/57
Philip L. Kirstein, Senior Vice President Senior Vice President and Independent
5/29/45 and Independent Compliance Officer--Mutual Funds of
Compliance Officer ACMC** with which he has been
associated since October 2004. Prior
thereto, he was Counsel of Kirkpatrick
& Lockhart, LLP from 2003 to October
2004, and General Counsel and First
Vice President of Merrill Lynch
Investment Managers since prior to
1999.
Paul J. DeNoon, Vice President Senior Vice President of ACMC**, with
4/18/62 which he has been associated since
prior to 1999.
James E. Kennedy, Jr., Vice President Senior Vice President of ACMC**, with
5/24/60 which he has been associated since
prior to 1999.
Mark R. Manley, Secretary Senior Vice President, Deputy General
10/23/62 Counsel and Chief Compliance Officer
of ACMC**, with which he has been
associated since prior to 1999.
Mark D. Gersten, Treasurer and Chief Senior Vice President of AGIS and a
10/4/50 Financial Officer Vice President of ABIRM**, with which
he has been associated since prior to
1999.
Vincent S. Noto, Controller Vice President of AGIS**, with which
12/14/64 he has been associated since prior to
1999.
* The address for each of the Fund's Officers is 1345 Avenue of the Americas,
New York, NY 10105.
** ACMC, ABIRM and AGIS are affiliates of the Fund.
_______________________________________________________________________________
48 o ACM MANAGED DOLLAR INCOME FUND
AllianceBernstein Family of Funds
- -------------------------------------------------------------------------------
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
Health Care Fund*
Mid-Cap Growth Fund
Premier Growth Fund*
Small Cap Growth Fund
Technology Fund*
Global & International
All-Asia Investment Fund
Global Research Growth Fund
Global Small Cap Fund
Greater China '97 Fund
International Premier Growth Fund
New Europe Fund
Worldwide Privatization Fund
Select Investor Series
Biotechnology Portfolio
Premier Portfolio
Technology Portfolio
- --------------------------------------------
Value Funds
- --------------------------------------------
Domestic
Balanced Shares
Disciplined Value Fund*
Growth & Income Fund
Real Estate Investment Fund
Small Cap Value Fund
Utility Income Fund
Value Fund
Global & International
Global Value Fund
International Value Fund
- --------------------------------------------
Taxable Bond Funds
- --------------------------------------------
Americas Government Income Trust
Corporate Bond Portfolio
Emerging Market Debt Fund
Global Strategic Income Trust
High Yield Fund
Multi-Market Strategy Trust
Quality Bond Portfolio
Short Duration Portfolio
U.S. Government Portfolio
- --------------------------------------------
Municipal Bond Funds
- --------------------------------------------
National
Insured National
Arizona
California
Insured California
Florida
Massachusetts
Michigan
Minnesota
New Jersey
New York
Ohio
Pennsylvania
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
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 web site at
www.alliancebernstein.com or call us at (800) 227-4618 for a current
prospectus. You should read the prospectus carefully before you invest or send
money.
* Effective December 15, 2004, these Funds will be renamed as follows: Health
Care Fund to Global Health Care Fund; Premier Growth Fund to Large Cap Growth
Fund; Technology Fund to Global Technology Fund; and Disciplined Value Fund to
Focused Growth & Income Fund.
** 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.
_______________________________________________________________________________
ACM MANAGED DOLLAR INCOME FUND o 49
Summary of General Information
- -------------------------------------------------------------------------------
SUMMARY OF GENERAL INFORMATION
Shareholder Information
The daily net asset value of the Fund's shares is available from the Fund's
Transfer Agent by calling (800) 426-5523. The Fund also distributes its daily
net asset value to various financial publications or independent organizations
such as Lipper Analytical Services, Inc., Morningstar, Inc. and Bloomberg.
Daily market prices for the Fund's shares are published in the New York Stock
Exchange Composite Transaction section of newspapers each day. The Fund's NYSE
trading symbol is "ADF." Weekly comparative net asset value (NAV) and market
price information about the Fund is published each Monday in The Wall Street
Journal, each Sunday in The New York Times and each Saturday in Barron's and
other newspapers in a table called "Closed-End Funds."
Dividend Reinvestment Plan
Pursuant to the Fund's Dividend 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 Equiserve 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
Equiserve Trust Company, N.A. For questions concerning Shareholder account
information, or if you would like a brochure describing the Dividend
Reinvestment Plan, please call Equiserve Trust Company, N.A. at (800) 219-4218.
_______________________________________________________________________________
50 o ACM MANAGED DOLLAR INCOME FUND
NOTES
_______________________________________________________________________________
ACM MANAGED DOLLAR INCOME FUND o 51
NOTES
_______________________________________________________________________________
52 o ACM MANAGED DOLLAR INCOME FUND
ACM MANAGED DOLLAR INCOME FUND
1345 Avenue of the Americas
New York, NY 10105
(800) 221-5672
AllianceBernstein [LOGO](SM)
Investment Research and Management
(SM) This service mark used under license from the owner, Alliance Capital
Management L.P.
MDIAR0904
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 11(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 auditor 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 on accounting and auditing issues and quarterly press
release review; and (iii) tax compliance, tax advice and tax return preparation.
Audit-Related
Audit Fees Fees Tax Fees
ACM Managed Dollar
Income Fund, Inc. 2003 $49,000 $9,750 $15,000
2004 $51,000 $9,785 $24,804
(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 auditors. 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
Audit Committee
All Fees for (Portion Comprised of
Non-Audit Services Audit Related Fees)
Provided to the (Portion Comprised of
Portfolio, the Adviser Tax Fees)
and Service Affiliates
ACM Managed Dollar
Income Fund, Inc. 2003 $ 837,015 [$ 311,750]
($ 296,750)
($ 15 000)
2004 $ 1,236,321 [$ 284,589]
($ 259,785)
($ 24,804)
(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:
Ruth Block William H. Foulk, Jr.
David H. Dievler Dr. James M. Hester
John H. Dobkin Donald J. Robinson
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.
The registrant has adopted the following proxy voting policies and procedures of
its investment adviser, Alliance Capital Management L.P.
October 2004
ALLIANCE CAPITAL MANAGEMENT L.P.
Statement of Policies and Procedures for Proxy Voting
INTRODUCTION
As a registered investment adviser, Alliance Capital Management L.P. ("Alliance
Capital", "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 Alliance Capital's growth and value investment groups investing on
behalf of clients in both US and non-US securities.
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.
Alliance Capital 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:
Corporate Governance: Alliance Capital'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.
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 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 withhold votes for directors of non-U.S.
issuers where there is insufficient information about the nominees disclosed in
the proxy statement.
Appointment of Auditors: Alliance Capital 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. While we will recognize that there may be special circumstances
that could lead to high non-audit fees in some years, we would normally consider
non-audit fees in excess of 70% to be disproportionate. Therefore, we may vote
against the appointment of auditors if the fees for non-audit related services
exceed 70% of the total audit fees paid by the company or there are other
reasons to question the independence of the company's auditors.
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, Alliance Capital 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, or if the
issuance of new shares could excessively dilute the value of the outstanding
shares upon issuance.
Corporate Restructurings, Mergers and Acquisitions: Alliance Capital 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 the research analysts that
cover the company and the investment professionals managing the portfolios in
which the stock is held.
Proposals Affecting Shareholder Rights: Alliance Capital 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.
Anti-Takeover Measures: Alliance Capital believes that measures that impede
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 dilute shareholder ownership. Conversely, we support proposals
that would restrict or otherwise eliminate anti-takeover 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 blank check
preferred stock, classified boards and supermajority vote requirements) that
appear to be intended as management entrenchment mechanisms.
Executive Compensation: Alliance Capital believes that company management and
the compensation committee of the board of directors should, within reason, be
given latitude to determine the types and
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mix of compensation and benefit awards offered. 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. We will analyze
the proposed plans to ensure that shareholder equity will not be excessively
diluted, the option exercise price is not below market price on the date of
grant and an acceptable number of employees are eligible to participate in such
programs. We will generally oppose plans that 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 will support proposals to submit severance packages that do not 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.
Social and Corporate Responsibility: Alliance Capital 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.
PROXY VOTING PROCEDURES
Proxy Voting Committees
Our growth and value investment groups have formed separate proxy voting
committees to establish general proxy policies for Alliance Capital 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.
Conflicts of Interest
Alliance Capital 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 Alliance Capital 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, Alliance 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. That said, we have implemented additional
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 Alliance Capital'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
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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 a third
party research service to ensure that our voting decision is consistent with our
clients' best interests.
Because under certain circumstances Alliance Capital 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.
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 (usually one-week) 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. Alliance Capital may determine that the benefit to the client
of exercising the vote does not outweigh the cost of voting, which is not being
able to transact in the shares during this period. Accordingly, if share
blocking is required we may 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 Alliance Capital from voting
such proxies. For example, Alliance Capital may receive meeting notices without
enough time to fully consider the proxy or after the cut-off date for voting.
Other markets require Alliance Capital to provide local agents with power of
attorney prior to implementing Alliance Capital's voting instructions. Although
it is Alliance Capital'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.
Proxy Voting Records
Clients may obtain information about how we voted proxies on their behalf by
contacting their Alliance Capital administrative representative. Alternatively,
clients may make a written request for proxy voting information to: Mark R.
Manley, Senior Vice President & Chief Compliance Officer, Alliance Capital
Management L.P., 1345 Avenue of the Americas, New York, NY 10105.
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ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
There have been no purchases of equity securities by the Fund or by affiliated
parties for the reporting period.
ITEM 9. 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 the requirements of Item 7(d)(2)(ii)(G) of Schedule
14A in its proxy statement filed with the Commission on February 23, 2004.
ITEM 10. 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-2(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 significant changes in the registrant's internal controls that
could significantly affect these controls subsequent to the date of their
evaluation, including any corrective actions with regard to significant
deficiencies and material weaknesses.
ITEM 11. EXHIBITS.
The following exhibits are attached to this Form N-CSR:
EXHIBIT NO. DESCRIPTION OF EXHIBIT
11 (a) (1) Code of ethics that is subject to the
disclosure of Item 2 hereof
11 (b) (1) Certification of Principal Executive Officer
Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002
11 (b) (2) Certification of Principal Financial Officer
Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002
11 (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 Dollar Income Fund, Inc.
By: /s/ Marc O. Mayer
--------------------
Marc O. Mayer
President
Date: November 29, 2004
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 29, 2004
By: /s/ Mark D. Gersten
-------------------
Mark D. Gersten
Treasurer and Chief Financial Officer
Date: November 29, 2004