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: 811-7964
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, 2005
Date of reporting period: March 31, 2005
ITEM 1. REPORTS TO STOCKHOLDERS.
[LOGO] ALLIANCEBERNSTEIN (SM)
Investment Research and Management
ACM Managed Dollar Income Fund
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Semi-Annual Report--March 31, 2005
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Closed End
Investment Products Offered
o Are Not FDIC Insured
o May Lose Value
o Are Not Bank Guaranteed
You may obtain a description of the Fund's proxy voting policies and
procedures, and information regarding how the Fund voted proxies relating to
portfolio securities during the most recent 12-month period ended June 30,
without charge. Simply visit AllianceBernstein's web site at
www.alliancebernstein.com, or go to the Securities and Exchange Commission's
(the "Commission") web site at www.sec.gov, or call AllianceBernstein at (800)
227-4618.
The Fund files its complete schedule of portfolio holdings with the Commission
for the first and third quarters of each fiscal year on Form N-Q. The Fund's
Forms N-Q are available on the Commission's web site at www.sec.gov. The Fund's
Forms N-Q may also be reviewed and copied at the Commission's Public Reference
Room in Washington, DC; information on the operation of the Public Reference
Room may be obtained by calling (800) SEC-0330.
AllianceBernstein 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.
May 25, 2005
Semi-Annual Report
This report provides management's discussion of fund performance for ACM
Managed Dollar Income Fund (the "Fund") for the semi-annual reporting period
ended March 31, 2005. The Fund is a closed-end fund that trades under the New
York Stock Exchange symbol "ADF".
Investment Objective and Policies
This closed-end fund is designed for investors who seek high current income and
capital appreciation. 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 34.
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 March 31, 2005. 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 six-month period ended March 31, 2005, the Fund outperformed its
blended composite benchmark. The primary contribution to outperformance was the
Fund's use of leverage in both its emerging-market and high yield holdings.
Within the emerging-market allocation, the Fund's sector weightings were
generally positive while security selection was generally negative.
Contributing positively to performance within the high yield allocation was the
Fund's underweighted position in the automotive sector and its overweighted
positions in property and casualty insurance holdings. Although the Fund's
property and casualty insurance overweight helped, security selection within
the sector detracted as some of the Fund's insurance holdings were negatively
impacted by news of accounting irregularities within the industry. Also
contributing positively to relative performance was the Fund's security
selection within the cable, diversified media and wireless industries. During
the reporting period, the Fund held some of the best performing cable issuers.
Detracting from performance within the Fund's high yield allocation was an
underweighted position in the chemicals industry which outperformed, in
addition to an overweighted position in the cable sectors which underperformed.
The Fund's security selection within the airline and telecommunications
industries also detracted from performance during the period under review.
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ACM MANAGED DOLLAR INCOME FUND o 1
Market Review and Investment Strategy
During the semi-annual reporting period, emerging market debt and high yield
posted the strongest returns within the fixed-income market despite some
volatility and a broad fixed-income market sell-off in March 2005. Both sectors
provided relatively strong monthly returns in the months leading up to March.
The earlier strong gains in emerging market debt were a result of relatively
low global interest rates, ample global liquidity, higher commodity prices and
improved economic fundamentals in emerging countries. Between September 2004
and the end of February 2005, emerging market debt posted a strong 6.66%, as
measured by the JPM EMBI+.
The high yield market continued to benefit early in the period as well from an
expanding economy and resulting corporate profits. Consequently, credit quality
improved and the default rate remained low. As with emerging-market debt, high
yield posted strong returns until the sell-off in March, returning 5.92% in the
first five months of the reporting period, according to the CSFBHY Index.
Late in the reporting period, however, market sentiment abruptly changed.
Unlike the second half of 2004 and beginning of 2005, when the market's mood
had been uncharacteristically sanguine in the context of rising rates, market
sentiment soured late in the first quarter of 2005 and bond prices fell.
Fixed-income markets were rattled primarily by two concerns: the fear that
official rate hikes could become more aggressive this year and fallout from
General Motors' profit warning. Late in the period, yields jumped after the
U.S. Federal Reserve (the "Fed") stated that inflation pressures had increased
in recent months. Inflation fears were further stoked by sharply higher oil and
commodities prices. At the end of the reporting period, crude oil hit a new
high of $57. The strong returns posted by both emerging market debt and high
yield, were partially offset by March's decline. For the month of March,
emerging market debt lost 2.65% while high yield fell 2.39%.
During the semi-annual reporting period, the average emerging market and
high-yield spread reached lows of 330 and 250 basis points versus Treasuries,
respectively. In mid-March, spreads widened sharply on the heels of the General
Motors news and increased event risk. At the end of the period, the high yield
market, as measured by the CSFBHY Index, yielded 7.84%, for a spread of 373
basis points over Treasuries. By industry, airlines, telecommunications and
wireless communications outperformed. Underperforming industries for the period
included autos, retail, transportation and consumer durables.
In the emerging markets, the JPM EMBI+ ended the period yielding 8.31% with a
spread of 384 basis points over Treasuries. By country, outperformers included
Ecuador at 11.86%, Russia at 8.57% and the Ukraine at 7.33%. Underperforming
for the period were Poland at 0.36%, South Africa at 0.43% and Morocco at 1.47%.
Within the Fund's emerging market holdings, allocations to its core emerging
market countries (Russia, Colombia, Brazil, Ecuador, Venezuela, Mexico and
Turkey), were maintained but individual country weightings were
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2 o ACM MANAGED DOLLAR INCOME FUND
adjusted during the period. The Fund maintained its overweight position in
Latin America as these countries benefited from improving macroeconomic
fundamentals and higher commodity prices. The Fund was overweighted in Russia
as liquidity and debt levels in that country continued to improve, and there
were expectations of a ratings upgrade. On January 31, 2005, Standard & Poor's
raised Russia's credit rating to investment-grade from BB+ to BBB-. The team
also maintained its overweight position in the Ukraine based on a promising
economic outlook despite political noise. Industrial production in the Ukraine
continued to grow, buoyed by metal prices, increased transit revenue and
concessions on fuel prices received from Russia.
Although it was believed that industry selection would be less critical within
the Fund's high yield allocation, the Fund continued to over- and underweight
industries based on research. The Fund was overweight in those industries that,
based on research and analysis, had favorable fundamental outlooks and
attractive valuations, such as manufacturing and cable. In general, the
industrial-oriented sectors were preferred to the consumer-oriented sectors.
Corporations had healthy cash balances to deploy, while the consumer began to
feel increased pressure due to high energy prices.
The Fund was underweight in industries with uncertain or poor credit trends,
such as automotive suppliers and utilities. In fact, the Fund has been
underweight in the auto sector for some time. This was due to concern about the
ability of the suppliers to pass increases in raw-materials prices through to
the original-equipment manufacturers (OEMs), as well as an expectation that the
OEMs will cut production levels this year.
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ACM MANAGED DOLLAR INCOME FUND o 3
HISTORICAL PERFORMANCE
An Important Note About the Value of Historical Performance
The performance on page 6 represents past performance and does not guarantee
future results. Current performance may be lower or higher than the performance
information shown. 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 44.
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
(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.
Part of the Fund's assets will be invested in foreign and emerging markets
fixed-income securities which may magnify asset value fluctuations due to
changes in foreign exchange rates and the possibility of substantial volatility
due to political and economic uncertainties in foreign countries. This may have
a significant effect on the Fund's asset value. Price fluctuations may be
caused by changes in the general level of interest rates or changes in bond
credit quality ratings. Please note, as interest rates rise, existing bond
prices fall and can cause the value of an investment in the Fund to decline.
Changes in interest rates have a greater effect on bonds with longer maturities
than on those with shorter maturities. While the Fund invests principally in
fixed-income securities, in order to achieve its investment objectives, the
Fund may at times use certain types of investment derivatives, such as options,
forwards and swaps. These instruments involve risks different from, and in
certain cases, greater than, the risks presented by more traditional
investments.
(Historical Performance continued on next page)
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ACM MANAGED DOLLAR INCOME FUND o 5
HISTORICAL PERFORMANCE
(continued from previous page)
THE FUND VS. ITS BENCHMARK Returns
PERIODS ENDED MARCH 31, 2005 6 Months 12 Months
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ACM Managed Dollar Income Fund (NAV) 4.77% 6.25%
Composite: 65% JPM EMBI+ / 35% CSFBHY Index 3.69% 7.26%
JPM EMBI+ 3.84% 6.94%
CSFBHY Index 3.40% 7.84%
The Fund's Market Price per share on March 31, 2005 was $7.67.
For additional Financial Highlights, please see page 39.
See Historical Performance and Benchmark disclosures on pages 4-5.
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6 o ACM MANAGED DOLLAR INCOME FUND
PORTFOLIO SUMMARY
March 31, 2005 (unaudited)
PORTFOLIO STATISTICS
Net Assets ($mil): $179.4
SECURITY TYPE BREAKDOWN*
o 52.5% Sovereign Debt Obligations
o 45.1% Corporate Debt Obligations
o 0.6% Preferred Stock
o 1.8% Short-Term
* All data are as of March 31, 2005. The Fund's security type breakdown is
expressed as a percentage of total investments (excluding security lending
collateral) and may vary over time.
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ACM MANAGED DOLLAR INCOME FUND o 7
PORTFOLIO OF INVESTMENTS
March 31, 2005 (unaudited)
Principal
Amount
(000) U.S. $ Value
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SOVEREIGN DEBT OBLIGATIONS-61.5%
Argentina-3.5%
Republic of Argentina FRN
3.01%, 8/03/12(a) $ 4,782 $ 4,036,008
11.375%, 3/15/10(b) 190 53,200
11.75%, 6/15/15(b) 350 107,625
12.00%, 6/19/31(b) 1,171 357,246
12.25%, 6/19/18(b) 2,781 834,142
15.50%, 12/19/08(a)(b) 2,788 836,400
-----------
6,224,621
Brazil-11.8%
Republic of Brazil
9.25%, 10/22/10 625 656,250
10.50%, 7/14/14 1,750 1,929,375
11.00%, 8/17/40(c) 6,007 6,676,781
12.00%, 4/15/10 1,150 1,338,599
12.75%, 1/15/20 1,965 2,416,950
14.50%, 10/15/09 530 665,945
Republic of Brazil-DCB FRN
Series L
3.125%, 4/15/12(a) 1,041 977,464
C-Bonds
8.00%, 4/15/14(c) 6,504 6,447,704
-----------
21,109,068
Bulgaria-0.3%
Republic of Bulgaria
8.25%, 1/15/15(d) 355 434,520
Colombia-1.8%
Republic of Colombia
10.75%, 1/15/13 237 264,847
11.75%, 2/25/20(c) 2,545 3,028,550
-----------
3,293,397
Ecuador-3.1%
Ecuador Structured Note
6.50%, 10/11/05 591 573,382
Republic of Ecuador
8.00%, 8/15/30(a)(c)(d) 5,554 4,984,715
8.00%, 8/15/30(a)(d) 75 67,313
-----------
5,625,410
El Salvador-0.3%
Republic of El Salvador
7.625%, 9/21/34(d) 150 153,750
8.50%, 7/25/11(d) 400 443,800
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597,550
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8 o ACM MANAGED DOLLAR INCOME FUND
Principal
Amount
(000) U.S. $ Value
-------------------------------------------------------------------------------
Indonesia-0.5%
Republic of Indonesia
6.75%, 3/10/14(d) $ 945 $ 936,731
Jamaica-0.4%
Government of Jamaica
10.625%, 6/20/17 662 695,100
12.75%, 9/01/07(d) 65 74,262
-----------
769,362
Lebanon-0.5%
Lebanese Republic
7.875%, 5/20/11(d) 325 315,250
10.125%, 8/06/08(d) 325 354,900
11.625%, 5/11/16(d) 146 161,111
-----------
831,261
Mexico-7.7%
United Mexican States
7.50%, 1/14/12 875 966,000
8.00%, 9/24/22(c) 4,472 5,075,720
8.125%, 12/30/19(c) 5,135 5,874,440
11.375%, 9/15/16 1,296 1,845,504
-----------
13,761,664
Panama-1.3%
Republic of Panama
3.75%, 7/17/14(a) 554 528,875
8.875%, 9/30/27 100 107,500
9.375%, 7/23/12 170 191,505
9.375%, 4/01/29 306 348,840
9.625%, 2/08/11 225 254,250
10.75%, 5/15/20 680 873,800
-----------
2,304,770
Peru-1.2%
Republic of Peru
8.375%, 5/03/16 345 360,525
8.75%, 11/21/33 355 369,200
9.125%, 2/21/12 290 324,800
9.875%, 2/06/15 876 1,011,780
-----------
2,066,305
Philippines-2.1%
Republic of Philippines
9.00%, 2/15/13 75 77,250
9.50%, 2/02/30 537 524,918
9.875%, 1/15/19(c) 2,600 2,707,900
10.625%, 3/16/25 464 496,480
-----------
3,806,548
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ACM MANAGED DOLLAR INCOME FUND o 9
Principal
Amount
(000) U.S. $ Value
-------------------------------------------------------------------------------
Russia-20.7%
Ministry Finance of Russia
Series V
3.00%, 5/14/08 $ 2,905 $2,672,600
Series VII
3.00%, 5/14/11 1,420 1,180,446
Russian Federation
5.00%, 3/31/30(a)(d) 32,410 33,301,275
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37,154,321
Turkey-2.6%
Republic of Turkey
7.375%, 2/05/25 440 413,600
11.00%, 1/14/13 610 739,015
11.50%, 1/23/12 1,054 1,284,826
11.75%, 6/15/10 750 909,375
11.875%, 1/15/30(c) 1,019 1,370,555
------------
4,717,371
Ukraine-1.4%
Ukraine Government
6.875%, 3/04/11(d) 925 950,437
7.65%, 6/11/13(d) 604 646,280
11.00%, 3/15/07(d) 877 942,035
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2,538,752
Uruguay-0.7%
Republic of Uruguay
7.875%, 1/15/33 1,506 1,302,332
Venezuela-1.6%
Republic of Venezuela
3.6925%, 4/20/11(a)(d) 120 106,500
5.375%, 8/07/10(d) 690 614,099
8.50%, 10/08/14 35 34,387
9.25%, 9/15/27 2,053 2,035,549
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2,790,535
Total Sovereign Debt Securities
(cost $89,291,693) 110,264,518
U.S. CORPORATE DEBT OBLIGATIONS-48.1%
Aerospace/Defense-0.9%
Bombardier, Inc. (Canada)
6.30%, 5/01/14(d) 400 336,000
DRS Technologies, Inc.
6.875%, 11/01/13 325 325,000
L-3 Communications Corp.
5.875%, 1/15/15 340 326,400
Sequa Corp.
9.00%, 8/01/09 210 225,750
TD Funding Corp.
8.375%, 7/15/11 450 461,812
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1,674,962
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10 o ACM MANAGED DOLLAR INCOME FUND
Principal
Amount
(000) U.S. $ Value
-------------------------------------------------------------------------------
Automotive-0.9%
Asbury Automotive Group, Inc.
8.00%, 3/15/14 $ 191 $ 185,270
Cooper Standard Auto
7.00%, 12/15/12(d) 295 274,350
HLI Operating, Inc.
10.50%, 6/15/10* 306 284,580
Keystone Automotive Operations, Inc.
9.75%, 11/01/13 405 407,025
TRW Automotive, Inc.
9.375%, 2/15/13 91 97,825
11.00%, 2/15/13 156 174,720
United Auto Group, Inc.
9.625%, 3/15/12 260 274,300
------------
1,698,070
Broadcasting & Media-0.4%
Albritton Communications Co.
7.75%, 12/15/12 385 379,225
Radio One, Inc.
8.875%, 7/01/11 235 251,450
------------
630,675
Building & Real Estate-2.0%
Associated Materials, Inc.
11.25%, 3/01/14(e) 650 451,750
Dayton Superior Corp.
10.75%, 9/15/08 180 176,400
D.R. Horton, Inc.
6.875%, 5/01/13 340 352,750
KB HOME
7.75%, 2/01/10 520 546,753
M/I Homes, Inc.
6.875%, 4/01/12(d) 355 351,450
Meritage Homes Corp.
6.25%, 3/15/15(d) 475 446,500
Schuler Homes, Inc.
10.50%, 7/15/11 360 398,150
WCI Communities, Inc.
6.625%, 3/15/15(d) 280 266,000
William Lyon Homes, Inc.
10.75%, 4/01/13 510 561,000
------------
3,550,753
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ACM MANAGED DOLLAR INCOME FUND o 11
Principal
Amount
(000) U.S. $ Value
-------------------------------------------------------------------------------
Cable-3.5%
Cablevision Systems Corp.
8.00%, 4/15/12(d) $ 670 $ 688,425
Charter Communications Operating LLC
8.00%, 4/30/12(d) 1,560 1,552,200
CSC Holdings, Inc.
6.75%, 4/15/12(d) 270 267,975
7.625%, 7/15/18 405 421,200
DirectTV Holdings LLC
8.375%, 3/15/13 285 308,513
Echostar DBS Corp.
6.375%, 10/01/11 220 215,600
Insight Midwest LP
9.75%, 10/01/09 380 397,100
Intelsat Bermuda Ltd. (Bermuda)
7.805%, 1/15/12(a)(d) 105 106,575
8.625%, 1/15/15(d) 425 433,500
PanAmsat Corp.
9.00%, 8/15/14 905 954,775
Rogers Cable, Inc.
6.75%, 3/15/15 885 871,725
------------
6,217,588
Chemicals-0.9%
Equistar Chemical Funding LP
10.125%, 9/01/08 520 574,600
10.625%, 5/01/11 130 145,925
Huntsman Advanced Materials LLC
11.00%, 7/15/10(d) 275 315,563
Huntsman International LLC
9.875%, 3/01/09 325 351,000
Westlake Chemical Corp.
8.75%, 7/15/11 270 295,312
------------
1,682,400
Communications - Fixed-2.5%
Cincinnati Bell, Inc.
8.375%, 1/15/14* 635 625,475
Citizens Communications Co.
6.25%, 1/15/13 485 455,900
Eircom Funding (Ireland)
8.25%, 8/15/13 430 467,625
MCI, Inc.
7.688%, 5/01/09 265 275,600
Qwest Communications International, Inc.
8.00%, 2/15/14(a)(d) 205 200,388
Qwest Corp.
9.125%, 3/15/12(d) 1,420 1,544,250
Time Warner Telecom, Inc.
9.25%, 2/15/14 460 441,600
VALOR Telecom Enterprise
7.75%, 2/15/15(d) 475 472,625
------------
4,483,463
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12 o ACM MANAGED DOLLAR INCOME FUND
Principal
Amount
(000) U.S. $ Value
-------------------------------------------------------------------------------
Communications - Mobile-1.8%
Inmarsat Finance PLC (United Kingdom)
7.625%, 6/30/12 $ 560 $ 557,200
Iridium LLC Capital Corp.
Series B
14.00%, 7/15/05(b) 5,000 850,000
Nextel Communications, Inc.
5.95%, 3/15/14 240 238,800
6.875%, 10/31/13 480 500,400
Rogers Wireless Inc. (Canada)
7.25%, 12/15/12 330 336,600
Rural Cellular Corp.
8.25%, 3/15/12 240 244,800
TeleCorp PCS, Inc.
10.625%, 7/15/10 203 217,508
UBS Luxem (Vimpelcom) (Luxembourg)
8.00%, 2/11/10(d) 215 211,775
------------
3,157,083
Consumer Manufacturing-1.7%
Broder Brothers Co.
11.25%, 10/15/10 500 547,500
11.25%, 10/15/10(d) 132 144,540
Jostens, Inc.
7.625%, 10/01/12 335 331,650
12.75%, 5/01/10 605 650,375
Playtex Products, Inc.
8.00%, 3/01/11 315 339,413
Rayovac Corp.
7.375, 2/01/15(d) 795 761,212
St. John Knits International, Inc.
12.50%, 7/01/09 200 213,250
------------
2,987,940
Energy-2.8%
Amerada Hess Corp.
7.30%, 8/15/31 435 490,538
Chesapeake Energy Corp.
7.75%, 1/15/15 350 370,125
Enterprise Products Operating L.P.
5.60%, 10/15/14 465 458,922
Grant Prideco, Inc.
9.00%, 12/15/09 360 388,800
Hilcorp Energy
10.50%, 9/01/10(d) 770 854,700
Premco Refining Group, Inc.
9.50%, 2/01/13 250 279,375
Pride International, Inc.
7.375%, 7/15/14 395 418,700
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ACM MANAGED DOLLAR INCOME FUND o 13
Principal
Amount
(000) U.S. $ Value
-------------------------------------------------------------------------------
Universal Compression, Inc.
7.25%, 5/15/10 $ 220 $ 224,950
Williams Cos, Inc.
7.625%, 7/15/19 1,345 1,455,962
------------
4,942,072
Entertainment & Leisure-1.5%
Gaylord Entertainment Co.
8.00%, 11/15/13 315 326,025
Intrawest Corp. (Canada)
7.50%, 10/15/13 195 195,488
K2, Inc.
7.375%, 7/01/14 355 367,425
NCL Corp. LTD (Bermuda)
10.625%, 7/15/14(d) 465 480,694
Royal Caribbean Cruises, Ltd. (Liberia)
8.00%, 5/15/10 625 686,719
Universal City Development Partners
11.75%, 4/01/10 425 484,500
Universal City Florida Holdings
8.375%, 5/01/10(d) 110 112,200
------------
2,653,051
Financial-2.2%
Crum & Foster Holdings Corp.
10.375%, 6/15/13 195 218,400
Fairfax Financial Holdings (Canada)
7.375%, 4/15/18 505 449,450
7.75%, 4/26/12 510 492,150
Markel Capital Trust I
Series B
8.71%, 1/01/46(f) 615 656,571
Navistar International
6.25%, 3/01/12(d) 325 308,750
PXRE Capital Trust I
8.85%, 2/01/27 510 530,400
Western Financial Bank
9.625%, 5/15/12 420 466,200
Williams Scotsman, Inc.
9.875%, 6/01/07 765 761,175
------------
3,883,096
Food/Beverage-0.6%
Del Monte Food Co.
8.625%, 12/15/12 145 156,963
DIMON, Inc.
7.75%, 6/01/13 110 123,200
Series B
9.625%, 10/15/11 395 445,856
-------------------------------------------------------------------------------
14 o ACM MANAGED DOLLAR INCOME FUND
Principal
Amount
(000) U.S. $ Value
-------------------------------------------------------------------------------
Dole Food Company, Inc.
8.625%, 5/01/09 $ 240 $ 252,000
8.875%, 3/15/11 145 155,875
------------
1,133,894
Gaming-2.9%
Ameristar Casinos, Inc.
10.75%, 2/15/09 215 234,887
Argosy Gaming Co.
9.00%, 9/01/11 220 240,625
Boyd Gaming Corp.
7.75%, 12/15/12 255 267,112
Harrah's Operating Company, Inc.
7.875%, 12/15/05 215 219,838
MGM Mirage, Inc.
8.375%, 2/01/11 575 621,000
Mandalay Resort Group
10.25%, 8/01/07 530 576,375
Mohegan Tribal Gaming
6.375%, 7/15/09 140 138,950
7.125%, 8/15/14 695 696,738
Penn National Gaming, Inc.
6.875%, 12/01/11 375 375,938
Park Place Entertainment
7.00%, 4/15/13 305 327,113
7.875%, 3/15/10 135 147,150
9.375%, 2/15/07 230 245,238
Riviera Holdings Corp.
11.00%, 6/15/10 385 425,425
Seneca Gaming Corp.
7.25%, 5/01/12 450 447,750
Turning Stone Casino Resort Enterprise
9.125%, 12/15/10(d) 270 280,462
------------
5,244,601
Healthcare-3.1%
Concentra Operating Corp.
9.125%, 6/01/12 175 185,500
9.50%, 8/15/10 200 214,000
Coventry HealthCare, Inc.
5.875%, 1/15/12(d) 160 160,000
6.125%, 1/15/15(d) 170 169,788
Davita, Inc.
7.25%, 3/15/15(d) 470 460,600
Extendicare Health Services
9.50%, 7/01/10 315 344,531
Genesis HealthCare Corp.
8.00%, 10/15/13 330 359,700
HCA, Inc.
6.375%, 1/15/15 625 620,401
7.875%, 2/01/11 455 492,266
-------------------------------------------------------------------------------
ACM MANAGED DOLLAR INCOME FUND o 15
Principal
Amount
(000) U.S. $ Value
-------------------------------------------------------------------------------
IASIS Healthcare LLC
8.75%, 6/15/14 $ 490 $ 510,825
PacifiCare Health Systems, Inc.
10.75%, 6/01/09 380 419,900
Select Medical Corp.
7.625%, 2/01/15(d) 685 685,000
Triad Hospitals, Inc.
7.00%, 11/15/13 520 510,900
Universal Hospital Services, Inc.
10.125%, 11/01/11 440 451,000
------------
5,584,411
Hotels & Lodging-0.9%
Corrections Corp. of America
7.50%, 5/01/11 40 40,500
Host Marriott LP
9.25%, 10/01/07 100 107,000
9.50%, 1/15/07 310 327,050
La Quinta Corp.
8.875%, 3/15/11 375 405,000
Starwood Hotels & Resorts Worldwide, Inc.
7.875%, 5/01/12 400 437,000
Vail Resorts, Inc.
6.75%, 2/15/14 355 347,900
------------
1,664,450
Index-2.4%
Dow Jones CDX HY
7.75%, 12/29/09(d)* 4,500 4,393,125
Industrial-2.6%
AMSTED Industries, Inc.
10.25%, 10/15/11(d) 465 506,850
Case New Holland, Inc.
9.25%, 8/01/11(d) 645 686,925
FastenTech, Inc.
12.50%, 5/01/11(d) 325 349,375
Flowserve Corp.
12.25%, 8/15/10 370 404,225
Goodman Global Holdings, Inc.
7.875%, 12/15/12(d) 475 434,625
H & E Equipment/Finance
11.125%, 6/15/12 600 675,000
NMHG Holding Co.
10.00%, 5/15/09 220 237,050
Terex Corp.
10.375%, 4/01/11 375 407,812
TriMas Corp.
9.875%, 6/15/12 470 479,400
Trinity Industries, Inc.
6.50%, 3/15/14 530 511,450
------------
4,692,712
-------------------------------------------------------------------------------
16 o ACM MANAGED DOLLAR INCOME FUND
Principal
Amount
(000) U.S. $ Value
-------------------------------------------------------------------------------
Insurance-0.6%
Liberty Mutual Group
5.75%, 3/15/14(d) $ 475 $ 466,852
Royal & Sun Alliance Insurance Group PLC
(United Kingdom)
8.95%, 10/15/29 420 534,835
------------
1,001,687
Metals/Mining-0.9%
AK Steel Corp.
7.875%, 2/15/09 355 347,900
International Steel Group, Inc.
6.50%, 4/15/14 437 445,740
Ispat Inland ULC (Canada)
9.75%, 4/01/14 114 133,380
Peabody Energy Corp.
6.875%, 3/15/13 380 391,400
Russel Metals, Inc. (Canada)
6.375%, 3/01/14 345 334,650
------------
1,653,070
Paper & Packaging-3.1%
Ball Corp.
6.875%, 12/15/12 1,000 1,031,250
Berry Plastics Corp.
10.75%, 7/15/12 390 439,725
Crown Euro Holdings S.A. (France)
9.50%, 3/01/11 405 444,488
Georgia-Pacific Corp.
8.875%, 5/15/31 230 277,150
9.375%, 2/01/13 715 799,013
Graphic Packaging Int'l Corp.
9.50%, 8/15/13 655 694,300
Greif Bros. Corp.
8.875%, 8/01/12 260 280,800
Owens-Brockway Glass Container, Inc.
8.875%, 2/15/09 735 784,613
Russell-Stanley Holdings, Inc.
9.00%, 11/30/08(d)(g)(h) 894 151,874
Stone Container Corp.
9.25%, 2/01/08 535 572,450
9.75%, 2/01/11 12 12,840
------------
5,488,503
Petroleum Products-0.2%
Kerr-McGee Corp.
6.875%, 9/15/11 260 278,054
Publishing-1.3%
American Media, Inc.
8.875%, 1/15/11 105 108,150
10.25%, 5/01/09 475 490,437
-------------------------------------------------------------------------------
ACM MANAGED DOLLAR INCOME FUND o 17
Principal
Amount
(000) U.S. $ Value
-------------------------------------------------------------------------------
Dex Media East LLC
9.875%, 11/15/09 $ 110 $ 121,000
12.125%, 11/15/12 195 231,075
Dex Media West LLC
8.50%, 8/15/10 160 170,800
9.875%, 8/15/13 571 636,665
PRIMEDIA, Inc.
8.00%, 5/15/13 315 321,300
8.875%, 5/15/11 305 317,963
------------
2,397,390
Restaurants-0.1%
Domino's, Inc.
8.25%, 7/01/11 237 247,665
Retail-0.4%
J.C. Penney Corporation, Inc.
8.00%, 3/01/10 455 455,000
Petro Stopping Centers LP
9.00%, 2/15/12 250 257,500
------------
712,500
Service-1.5%
Allied Waste North America
6.375%, 4/15/11 400 372,000
8.875%, 4/01/08 305 315,294
National Waterworks, Inc.
10.50%, 12/01/12 235 261,438
Service Corp. International
6.50%, 3/15/08 595 596,487
7.70%, 4/15/09 240 247,200
Stewart Enterprises, Inc.
6.25% 2/15/13(d) 385 373,450
United Rentals North America, Inc.
6.50%, 2/15/12 494 480,415
------------
2,646,284
Supermarket & Drugstore-1.0%
Couche-Tard, Inc.
7.50%, 12/15/13 298 312,900
Rite Aid Corp.
9.50%, 2/15/11 615 651,900
Roundy's, Inc.
Series B
8.875%, 6/15/12 250 267,500
Stater Bros. Holdings, Inc.
8.125%, 6/15/12 595 574,175
------------
1,806,475
Technology-1.8%
Amkor Technologies, Inc.
7.75%, 5/15/13 775 651,000
Celestica, Inc. (Canada)
7.875%, 7/01/11 610 617,625
-------------------------------------------------------------------------------
18 o ACM MANAGED DOLLAR INCOME FUND
Principal
Amount
(000) U.S. $ Value
-------------------------------------------------------------------------------
Lucent Technologies
6.45%, 3/15/29 $ 100 $ 86,250
6.50%, 1/15/28 145 124,338
Nortel Networks Corp. (Canada)
6.875%, 9/01/23 245 226,625
Telecordia Technologies, Inc.
10.00%, 3/15/13(d) 245 243,163
Unisys Corp.
6.875%, 3/15/10 1,000 997,500
7.875%, 4/01/08 185 185,925
------------
3,132,426
Utilities - Electric & Gas-3.6%
Aquila, Inc
14.875%, 7/01/12(a) 235 321,950
AES Corporation
8.75%, 5/15/13(d) 65 70,850
9.00%, 5/15/15(d) 105 115,500
Calpine Corp.
8.50%, 7/15/10(d) 715 561,275
DPL, Inc.
6.875%, 9/01/11 225 239,056
DPL Capital Trust II
8.125%, 9/01/31 405 466,730
Dynegy Holdings, Inc.
10.125%, 7/15/13(d) 610 664,900
FirstEnergy Corp.
6.45%, 11/15/11 515 543,348
Northwest Pipelines Corp.
8.125%, 3/01/10 310 331,700
NRG Energy, Inc.
8.00%, 12/15/13(d) 383 405,023
Ormat Funding Corp.
8.25%, 12/30/20 394 395,907
Reliant Energy, Inc.
6.75%, 12/15/14 330 307,725
9.50%, 7/15/13 430 467,625
SEMCO Energy, Inc.
7.125%, 5/15/08 125 127,234
7.75%, 5/15/13 235 242,795
Southern Natural Gas Co.
7.35%, 2/15/31 365 372,807
8.875%, 3/15/10 290 314,447
TECO Energy, Inc.
7.00%, 5/01/12 305 318,344
Texas Genco LLC
6.875%, 12/15/14(d) 285 285,712
------------
6,552,928
Total U.S. Corporate Debt Obligations
(cost $92,336,621) 86,191,328
-------------------------------------------------------------------------------
ACM MANAGED DOLLAR INCOME FUND o 19
Principal
Amount
(000) U.S. $ Value
-------------------------------------------------------------------------------
NON-U.S. CORPORATE DEBT OBLIGATIONS-4.7%
Bahamas-0.2%
Sun International Hotels, Ltd.
8.875%, 8/15/11 $ 245 $ 262,762
Brazil-0.7%
PF Export Receivables Master Trust
6.436%, 6/01/15(d) 1,241 1,248,554
China-0.1%
Chaoda Modern Agriculture
7.75%, 2/08/10(d) 200 183,000
Kazakhstan-0.4%
Hurricane Finance BV
9.625%, 2/12/10(d) 400 436,000
Kazkommerts International BV
8.50%, 4/16/13(d) 350 353,500
------------
789,500
Mexico-2.0%
Innova S. de R.L.
9.375%, 9/19/13 2,865 3,172,988
Vitro Envases
10.75%, 7/23/11(d) 420 428,400
------------
3,601,388
Romania-0.3%
Mobifon Holdings BV
12.50%, 7/31/10 425 519,031
Russia-0.8%
Citigroup (JSC Severstal)
9.25%, 4/19/14(d) 464 476,064
Gazprom OAO
9.625%, 3/01/13(d) 150 171,375
Mobile Telesystems Finance S.A.
9.75%, 1/30/08(d) 625 666,412
Tyumen Oil Co.
11.00%, 11/06/07(d) 70 78,155
------------
1,392,006
Singapore-0.2%
Flextronics International, Ltd.
6.50%, 5/15/13 420 416,850
Total Non-U.S. Corporate Debt Obligations
(cost $7,883,886) 8,413,091
-------------------------------------------------------------------------------
20 o ACM MANAGED DOLLAR INCOME FUND
Shares or
Principal
Amount
(000) U.S. $ Value
-------------------------------------------------------------------------------
NON-CONVERTIBLE PREFERRED STOCK-0.7%
Sovereign Real Estate Investment Trust
12.00%(d) $ 870 $1,331,100
Total Non-Convertible Preferred Stock
(cost $818,725) 1,331,100
WARRANTS(i)-0.0%
Central Bank of Nigeria
Warrants, expiring 11/15/20 1,000 -0-
Republic of Venezuela
Warrants, expiring 4/15/20 7,140 -0-
Total Warrants
(cost $0) -0-
SHORT-TERM INVESTMENT-0.5%
Time Deposit-0.5%
Societe Generale
2.875%, 4/01/05,
(cost $900,000) 900 900,000
Total Investments Before Security
Lending Collateral-115.5%
(cost $191,230,925) 207,100,037
INVESTMENT OF CASH COLLATERAL FOR
SECURITIES LOANED-1.6%
Short-Term Investment
UBS Private Money Market Fund, LLC
2.66%
(cost $2,799,990) 2,799,900 2,799,990
Total Investments-117.1%
(cost $194,030,915) 209,900,027
Other assets less liabilities-(17.1)% (30,592,839)
Net Assets-100.0% $179,307,188
-------------------------------------------------------------------------------
ACM MANAGED DOLLAR INCOME FUND o 21
CREDIT DEFAULT SWAP CONTRACTS (see Note C)
Notional Unrealized
Swap Counterparty & Amount Interest Termination Appreciation/
Referenced Obligation (000) Rate Date (Depreciation)
-------------------------------------------------------------------------------
Buy Contracts:
Citigroup Global
Markets, Inc
Federal Republic
of Hungary
4.50%, 2/06/13 350 0.50% 11/26/13 $ (7,371)
Citigroup Global
Markets, Inc.
Federal Republic
of Philippines
10.625%, 3/16/25 510 5.60 3/20/14 (23,241)
Sale Contracts:
Citigroup Global
Markets, Inc.
Federal Republic
of Brazil
12.25%, 3/06/30 900 4.40 5/20/06 48,680
Citigroup Global
Markets, Inc.
Federal Republic
of Brazil
12.25%, 3/06/30 1,000 6.35 8/20/05 30,003
Credit Suisse
First Boston Int'l.
Federal Republic
of Brazil
12.25%, 3/06/30 750 6.90 6/20/07 84,637
Morgan Stanley
Dean Witter
Federal Republic
of Brazil
12.25%, 3/06/30 680 3.80 8/20/06 21,563
Citigroup Global
Markets, Inc.
Federal Republic
of Philippines
10.625%, 3/16/25 510 4.95 3/20/09 25,114
REVERSE REPURCHASE AGREEMENTS (see Note C)
Interest
Broker Rate Maturity Amount
-------------------------------------------------------------------------
Barclays Securites 0.10% 4/04/05 $ 5,191,301
Barclays Securites 2.45 12/30/05 4,434,302
Barclays Securites 2.45 12/30/05 4,548,310
Barclays Securites 2.65 12/30/05 4,410,325
Chase Manhattan Bank 1.25 12/30/05 2,587,590
Chase Manhattan Bank 2.65 12/30/05 2,968,969
Merrill Lynch 0.85 12/30/05 1,331,531
Merrill Lynch 1.40 12/30/05 6,702,261
$32,174,589
-------------------------------------------------------------------------------
22 o ACM MANAGED DOLLAR INCOME FUND
* Represents entire or partial securities out on loan.
(a) Coupon changes periodically based upon a predetermined schedule. Stated
interest rate in effect at March 31, 2005.
(b) Security is in default and is non-income producing.
(c) Positions, or portions thereof, with an aggregate market value of
$36,166,365 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 may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At March 31, 2005,
the aggregate market value of these securities amounted to $71,454,559 or 39.9%
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 Securites Act of
1933. This security, which represents 0.09% of net assets as of March 31, 2005,
is considered illiquid and restricted.
Acquisition Acquisition Market Percentage of
Restricted Security Date Cost Value Net Assets
-------------------------------------------------------------------------------
Russell-Stanley
Holdings, Inc. 2/26/99- $5,085,494 $151,874 0.08%
9.00%, 11/30/08 2/28/05
(h) Payment in kind (PIK) semi-annual coupon payment.
(i) Non-income producing security.
Glossary of Terms:
DCB-Debt Conversion Bond
FRN-Floating Rate Note
Please note: The sector classifications presented herein are based on the
sector categorization methodology of the adviser.
See notes to financial statements.
-------------------------------------------------------------------------------
ACM MANAGED DOLLAR INCOME FUND o 23
STATEMENT OF ASSETS & LIABILITIES
March 31, 2005 (unaudited)
Assets
Investments in securities, at value
(cost $191,230,925--including investment of cash
collateral for securities loaned of $2,799,990) $209,900,027(a)
Cash 94,318
Interest and dividends receivable 4,196,935
Receivable for investment securities sold 411,776
Unrealized appreciation on credit default swap contracts 209,997
Paydown receivable 3,704
Prepaid expenses 9,570
Total assets 214,826,327
Liabilities
Reverse repurchase agreements 32,174,497
Payable for collateral received on securities loaned 2,799,990
Due to broker 196,682
Advisory fee payable 128,518
Unrealized depreciation on credit default swap contracts 30,612
Payable for investment securities purchased 25,788
Administrative fee payable 20,567
Accrued expenses and other liabilities 142,485
Total liabilities 35,519,139
Net Assets $179,307,188
Composition of Net Assets
Common stock, at par $ 227,077
Additional paid-in capital 296,853,985
Distributions in excess of net investment income (655,125)
Accumulated net realized loss on investment transactions (133,167,246)
Net unrealized appreciation of investments 16,048,497
$179,307,188
Net Asset Value Per Share
(based on 22,707,703 shares outstanding) $7.90
(a) Includes securities on loan with a value of $2,678,545 (see Note F).
See notes to financial statements.
-------------------------------------------------------------------------------
24 o ACM MANAGED DOLLAR INCOME FUND
STATEMENT OF OPERATIONS
Six Months Ended March 31, 2005 (unaudited)
Investment Income
Interest $ 8,678,208
Dividends 52,299 $ 8,730,507
Expenses
Advisory fee 686,672
Administrative fee 109,869
Custodian 50,840
Printing 42,507
Audit 42,062
Legal 22,046
Transfer agency 16,828
Directors' fees 16,411
Registration 12,167
Miscellaneous 19,770
Total expenses before interest 1,019,172
Interest expense 286,965
Total expenses 1,306,137
Net investment income 7,424,370
Realized and Unrealized Gain (Loss) on
Investment Transactions
Net realized gain (loss) on:
Investment transactions (686,266)
Swap contracts 218,633
Written options 162,835
Net change in unrealized
appreciation/depreciation of:
Investments 1,226,416
Swap contracts (156,818)
Net gain on investment transactions 764,800
Net Increase in Net Assets from
Operations $8,189,170
See notes to financial statements.
-------------------------------------------------------------------------------
ACM MANAGED DOLLAR INCOME FUND o 25
STATEMENTS OF CHANGES IN NET ASSETS
Six Months
Ended Year Ended
March 31, 2005 September 30,
(unaudited) 2004
------------- --------------
Increase (Decrease) in Net Assets
Resulting from Operations
Net investment income $7,424,370 $17,179,212
Net realized gain (loss) on
investment transactions (304,798) 14,220,638
Net change in unrealized
appeciation/depreciation
of investments 1,069,598 (9,001,996)
Net increase in net assets
from operations 8,189,170 22,397,854
Dividends to Shareholders from
Net investment income (7,697,046) (18,071,829)
Common Stock Transactions
Reinvestment of dividends resulting in
the issuance of Common Stock 79,572 1,227,800
Total increase 571,696 5,553,825
Net Assets
Beginning of period 178,735,492 173,181,667
End of period (including distributions
in excess of net investment income
of $655,125 and $382,449,
respectively) $179,307,188 $178,735,492
See notes to financial statements.
-------------------------------------------------------------------------------
26 o ACM MANAGED DOLLAR INCOME FUND
STATEMENT OF CASH FLOWS
Six Months Ended March 31, 2005 (unaudited)
Increase (Decrease) in Cash from
Operation Activities:
Interest and dividends received $ 7,807,402
Interest expense paid (287,949)
Operating expenses paid (975,828)
Net increase in cash from operating
activities $ 6,543,625
Investing Activities:
Purchases of long-term investments (73,202,303)
Proceeds from disposition of long-term
investments 82,236,972
Purchases of short-term investments (900,000)
Cash collateral received on securities
loaned 2,799,900
Net premium received on option
transactions 191,786
Net premium received on swaps
transactions 218,633
Net increase in cash from investing
activities 11,344,988
Financing Activities:*
Cash dividends paid (7,617,474)
Proceeds from reverse repurchase
agreements (13,220,435)
Net decrease in cash from financing
activities (20,837,909)
Net decrease in cash (2,949,296)
Cash at beginning of period 3,043,614
Cash at end of period $ 94,318
Reconciliation of Net Increase in Net
Assets from Operations to Net
Increase in Cash from Operating
Activities:
Net increase in net assets from
operations $ 8,189,170
Adjustments:
Increase in dividends and interest
receivable $ (105,412)
Accretion of bond discount and
amortization of bond premium (817,693)
Increase in accrued expenses and other
assets 43,344
Decrease in interest payable (984)
Net realized loss on investment
transactions 304,798
Net change in unrealized appreciation/
depreciation of investments (1,069,598)
Total adjustments (1,645,545)
Net Increase in Cash from
Operating Activities $ 6,543,625
* 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
March 31, 2005 (unaudited)
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
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 and amortizes premiums as adjustments to interest
income.
4. Dividends and Distributions
Dividends and distributions to shareholders are recorded on the ex-dividend
date. Income and capital gains distributions are determined in accordance with
federal tax regulations and may differ from those determined in conformity with
U.S. generally accepted accounting principles. To the extent these differences
are permanent, such amounts are reclassified within the capital accounts based
on their federal tax basis treatment; temporary differences do not require such
reclassification.
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ACM MANAGED DOLLAR INCOME FUND o 29
5. Repurchase Agreements
The Fund's custodian or designated subcustodian will take control of securities
as collateral under repurchase agreements and determine on a daily basis that
the value of such securities are sufficient to cover the value of the
repurchase agreements. If the seller defaults and the value of collateral
declines, or if bankruptcy proceedings are commenced with respect to the seller
of the security, realization of collateral by the Fund may be delayed or
limited.
NOTE B
Advisory, Administrative Fees and Other Transactions with Affiliates
Under the terms of 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 six months ended March 31, 2005, the Fund reimbursed
$440 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 six months ended March 31, 2005, were as follows:
Purchases Sales
----------- -----------
Investment securities (excluding
U.S. government securities) $69,098,198 $75,204,484
U.S. government securities -0- -0-
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30 o ACM MANAGED DOLLAR INCOME FUND
At March 31, 2005, the cost of investments for federal income tax purposes was
substantially the same as the cost for financial reporting purposes.
Accordingly, gross unrealized appreciation and gross unrealized depreciation
(excluding written options and swap contracts) are as follows:
Cost $191,230,925
Gross unrealized appreciation $ 26,607,025
Gross unrealized depreciation (10,737,913)
Net unrealized appreciation $ 15,869,112
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.
-------------------------------------------------------------------------------
ACM MANAGED DOLLAR INCOME FUND o 31
Transactions in written options for the six months ended March 31, 2005 were as
follows:
Number of
Contracts Premiums
(000) Received
--------- --------
Options outstanding at
September 30, 2004 -0- $ -0-
Options written 11,657 162,835
Options exercised -0- -0-
Options terminated in closing purchase
transactions -0- -0-
Options expired (11,657) (162,835)
Options outstanding at
March 31, 2005 -0- $ -0-
2. Swap Agreements
The Fund may enter into swaps on sovereign debt obligations to hedge its
exposure to interest rates and credit risk or for investment purposes. A swap
is an agreement that obligates two parties to exchange a series of cash flows
at specified intervals based upon or calculated by reference to changes in
specified prices or rates for a specified amount of an underlying asset. The
payment flows are usually netted against each other, with the difference being
paid by one party to the other.
Risks may arise as a result of the failure of the counterparty to the swap
contract to comply with the terms of the swap contract. The loss incurred by
the failure of a counterparty is generally limited to the net interest payment
to be received by the Fund, and/or the termination value at the end of the
contract. Therefore the Fund considers the creditworthiness of each
counterparty to a swap contract in evaluating potential credit risk.
Additionally, risks may arise from unanticipated movements in interest rates or
in the value of the underlying securities.
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.
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32 o ACM MANAGED DOLLAR INCOME FUND
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 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 March 31, 2005, the Fund had Sale Contracts outstanding with Maximum Payout
Amounts aggregating $3,840,000, with net unrealized appreciation of $209,997
and terms ranging from 1 year to 9 years, as reflected in the portfolio of
investments.
In certain circumstances, the Fund may hold Sale Contracts on the same
referenced obligation and with the same counterparty it has purchased credit
protection, which may reduce its obligation to make payments on Sale Contracts,
if a credit event occurs. 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 $3,330,000 as of March 31,
2005.
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.
-------------------------------------------------------------------------------
ACM MANAGED DOLLAR INCOME FUND o 33
For the six months ended March 31, 2005, the average amount of reverse
repurchase agreements outstanding was $33,829,813 and the daily weighted
average annual interest rate was 1.68%.
NOTE D
Capital Stock
There are 300,000,000 shares of $.01 par value common stock authorized of which
22,707,703 shares were issued and outstanding at March 31, 2005. During the six
months ended March 31, 2005 and the year ended September 30, 2004, the Fund
issued 9,984 and 157,097 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 guarantor of a debt security, or the counterparty
to a derivative contract, will be unable or unwilling to make timely principal
and/or interest payments, or to otherwise honor its obligations. The degree of
risk for a particular security may be reflected in its credit risk rating.
Credit risk is greater for medium quality and lower-rated securities.
Lower-rated debt securities and similar unrated securities (commonly known as
"junk bonds") have speculative elements or are predominantly speculative risks.
Concentration of Risk--Investing in securities of foreign companies and foreign
governments involves special risks which include 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.
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34 o ACM MANAGED DOLLAR INCOME FUND
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 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 March 31, 2005, the Fund had loaned securities with a
value of $2,678,545 and received cash collateral of $2,799,900, which was
invested in a money market fund as included in the portfolio of investments.
For the six months ended March 31, 2005, the Fund earned fee income of $14,699,
which is included in interest income in the accompanying statement of
operations.
NOTE G
Distributions to Shareholders
The tax character of distributions to be paid for the year ended September 30,
2005 will be determined at the end of the current fiscal year. 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
-------------------------------------------------------------------------------
ACM MANAGED DOLLAR INCOME FUND o 35
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.
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
-------------------------------------------------------------------------------
36 o ACM MANAGED DOLLAR INCOME FUND
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;
(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 consid-
-------------------------------------------------------------------------------
ACM MANAGED DOLLAR INCOME FUND o 37
ering 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, and the NASD has
issued requests for information, in connection with this matter and the Adviser
has provided documents and other information to the SEC and NASD and is
cooperating fully with the investigations. On March 11, 2005, discussions
commenced with the NASD that management believes will conclude these
investigations.
On June 22, 2004, a purported class action complaint entitled Aucoin, et al. v.
Alliance Capital Management L.P., et al. ("Aucoin Complaint") was filed against
the Adviser, Alliance Capital Management Holding L.P., Alliance Capital
Management Corporation, AXA Financial, Inc., AllianceBernstein Investment
Research & Management, Inc., certain current and former directors of the
AllianceBernstein Mutual Funds, and unnamed Doe defendants. The Aucoin
Complaint names certain of the AllianceBernstein mutual funds as nominal
defendants. The Fund was not named as a nominal defendant in the Aucoin
Complaint 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 punitive damages, rescission of their contracts with
the Adviser, including recovery of all fees paid to the Adviser pursuant to
such contracts, an accounting of all fund-related fees, commissions and soft
dollar payments, and restitution of all unlawfully or discriminatorily obtained
fees and expenses.
Since June 22, 2004, 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.
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38 o ACM MANAGED DOLLAR INCOME FUND
FINANCIAL HIGHLIGHTS
Selected Data For A Share Of Common Stock Outstanding Throughout Each Period
Six Months
Ended
March 31, Year Ended September 30,
2005 ---------------------------------------------------------------
(unaudited) 2004(a) 2003 2002(b) 2001 2000
----------- ----------- ----------- ----------- ----------- -----------
Net asset value, beginning of period $7.87 $7.68 $5.58 $6.33 $8.09 $8.39
Income From Investment Operations
Net investment income(c) .33 0.76 0.81 0.84 0.98 1.08
Net realized and unrealized
gain (loss) on investment
transactions .04 0.23 2.10 (0.71) (1.72) (0.22)
Net increase (decrease) in
net asset value from operations .37 0.99 2.91 0.13 (0.74) 0.86
Less: Dividends and Distributions
Dividends from net
investment income (.34) (0.80) (0.81) (0.85) (0.95) (1.02)
Tax return of capital -0- -0- -0- (0.03) (0.07) (0.14)
Total dividends and distributions (.34) (0.80) (0.81) (0.88) (1.02) (1.16)
Net asset value, end of period $7.90 $7.87 $7.68 $5.58 $6.33 $8.09
Market value, end of period $7.67 $7.87 $8.15 $6.29 $7.62 $8.50
Premium/Discount (2.91)% 0.00% 6.12% 12.72% 20.38% 5.07%
Total Return
Total investment return
based on:(d)
Market value 1.72% 6.91% 45.71% (6.14)% 3.02% (5.41)%
Net asset value 4.77% 13.45% 54.77% .23% (10.08)% 9.99%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $179,307 $178,735 $173,182 $124,834 $140,110 $179,653
Ratios to average net assets of:
Expenses 1.48% 1.44% 1.72% 2.12% 2.75% 2.70%
Expenses, excluding
interest expense(e) 1.16% 1.15% 1.21% 1.15% 1.13% 1.09%
Net investment income 8.42% 9.76% 11.88% 10.81% 9.90% 9.55%
Portfolio turnover rate 33% 95% 80% 63% 129% 134%
See footnote summary on page 40.
-------------------------------------------------------------------------------
ACM MANAGED DOLLAR INCOME FUND o 39
(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 .32%, .29%, .51%, .97%, 1.62% and 1.61%,
respectively, on borrowings.
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40 o ACM MANAGED DOLLAR INCOME FUND
SUPPLEMENTAL PROXY INFORMATION
(unaudited)
A Special Meeting of Shareholders of ACM Managed Dollar Income Fund, Inc. was
held on March 24, 2005. A description of the proposal and number of shares
voted at the meeting are as follows:
Authority
Voted For Withheld
-------------------------------------------------------------------------------
1. Election of Directors. Class One Nominee
(term expires 2007):
Director Nominee
Michael J.Downey 20,141,518 567,534
Class Two Nominees
(terms expire 2008):
Director Nominee
William H.Foulk, Jr. 20,166,330 542,722
John H.Dobkin 20,176,231 532,821
James M.Hester 20,157,942 551,110
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ACM MANAGED DOLLAR INCOME FUND o 41
BOARD OF DIRECTORS
William H.Foulk, Jr.,(1) Chairman
Marc O.Mayer, President
Ruth Block(1)
David H. Dievler(1)
John H. Dobkin(1)
Michael J. Downey(1)
Dr. James M. Hester(1)
OFFICERS
Philip L. Kirstein, Senior Vice President and Independent Compliance Officer
Paul J. DeNoon(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) Mr. DeNoon is the person 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 ACMManaged 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.
Annual Certifications - As required, on April 21, 2005, the Fund submitted
to the New York Stock Exchange ("NYSE") the annual certification of the Fund's
Chief Executive Officer certifying that he is not aware of any violation of the
NYSE's Corporate Governance listing standards. The Fund also has included the
certifications of the Fund's Chief Executive Officer and Chief Financial
Officer required by Section 302 of the Sarbanes-Oxley Act of 2002 as exhibits
to the Fund's Form N-CSR filed with the Securities and Exchange Commission for
the annual period.
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42 o ACM MANAGED DOLLAR INCOME FUND
ALLIANCEBERNSTEIN FAMILY OF FUNDS
Wealth Strategies Funds
-------------------------------------------------------------------------------
Balanced Wealth Strategy
Wealth Appreciation Strategy
Wealth Preservation Strategy
Tax-Managed Balanced Wealth Strategy
Tax-Managed Wealth Appreciation Strategy
Tax-Managed Wealth Preservation Strategy
Blended Style Funds
-------------------------------------------------------------------------------
U.S. Large Cap Portfolio
International Portfolio
Tax-Managed International Portfolio
Growth Funds
-------------------------------------------------------------------------------
Domestic
Growth Fund
Mid-Cap Growth Fund
Large Cap Growth Fund*
Small Cap Growth Portfolio
Global & International
All-Asia Investment Fund
Global Health Care Fund*
Global Research Growth Fund
Global Technology Fund*
Greater China '97 Fund
International Growth Fund*
International Research Growth Fund*
New Europe Fund
Value Funds
-------------------------------------------------------------------------------
Domestic
Balanced Shares
Focused Growth & Income Fund*
Growth & Income Fund
Real Estate Investment Fund
Small/Mid-Cap Value Fund*
Utility Income Fund
Value Fund
Global & International
Global Value Fund
International Value Fund
Taxable Bond Funds
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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.
* Prior to December 15, 2004, these Funds were named as follows: Global
Health Care Fund was Health Care Fund; Large Cap Growth Fund was Premier Growth
Fund; Global Technology Fund was Technology Fund; and Focused Growth & Income
Fund was Disciplined Value Fund. Prior to February 1, 2005, Small/Mid-Cap Value
Fund was named Small Cap Value Fund. Prior to May 16, 2005, International
Growth Fund was named Worldwide Privatization Fund and International Research
Growth Fund was named International Premier Growth 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 43
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, 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.
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44 o ACM MANAGED DOLLAR INCOME FUND
Privacy Notice
Alliance, the AllianceBernstein Family of Funds and AllianceBernstein
Investment Research and Management, Inc. (collectively, "Alliance" or "we")
understand the importance of maintaining the confidentiality of our customers'
nonpublic personal information. In order to provide financial products and
services to our customers efficiently and accurately, we may collect nonpublic
personal information about our customers from the following sources: (1)
information we receive from account documentation, including applications or
other forms (which may include information such as a customer's name, address,
social security number, assets and income) and (2) information about our
customers' transactions with us, our affiliates and others (including
information such as a customer's account balances and account activity).
It is our policy not to disclose nonpublic personal information about our
customers (or former customers) except to our affiliates, or to others as
permitted or required by law. From time to time, Alliance may disclose
nonpublic personal information that we collect about our customers (or former
customers), as described above, to non-affiliated third party providers,
including those that perform processing or servicing functions and those that
provide marketing services for us or on our behalf pursuant to a joint
marketing agreement that requires the third party provider to adhere to
Alliance's privacy policy. We have policies and procedures to safeguard
nonpublic personal information about our customers (or former customers) which
include: (1) restricting access to such nonpublic personal information and (2)
maintaining physical, electronic and procedural safeguards that comply with
federal standards to safeguard such nonpublic personal information.
ACM MANAGED DOLLAR INCOME FUND
1345 Avenue of the Americas
New York, NY 10105
(800) 221-5672
[LOGO] ALLIANCEBERNSTEIN (SM)
Investment Research and Management
(SM) This service mark used under license from
the owner, Alliance Capital Management L.P.
MDISR0305
ITEM 2. CODE OF ETHICS.
Not applicable when filing a semi-annual report to shareholders.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable when filing a semi-annual report to shareholders.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable when filing a semi-annual report to shareholders
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable when filing a semi-annual report to shareholders
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.
Not applicable when filing a semi-annual report to shareholders
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 this item.
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
over financial reporting during the second fiscal quarter of the period 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 (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: May 27, 2005
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: May 27, 2005
By: /s/ Mark D. Gersten
-------------------
Mark D. Gersten
Treasurer and Chief Financial Officer
Date: May 27, 2005