UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-07964
ACM MANAGED DOLLAR INCOME FUND, INC.
(Exact name of registrant as specified in charter)
1345 Avenue of the Americas, New York, New York 10105
(Address of principal executive offices) (Zip code)
Mark R. Manley
AllianceBernstein L.P.
1345 Avenue of the Americas
New York, New York 10105
(Name and address of agent for service)
Registrant's telephone number, including area code: (800) 221-5672
Date of fiscal year end: September 30, 2007
Date of reporting period: March 31, 2007
ITEM 1. REPORTS TO STOCKHOLDERS.
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SEMI-ANNUAL REPORT
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ACM Managed Dollar Income Fund
Semi-Annual Report
March 31, 2007
[LOGO]
ALLIANCEBERNSTEIN
INVESTMENTS
Investment Products Offered
O Are Not FDIC Insured
O May Lose Value
O Are Not Bank Guaranteed
You may obtain a description of the Fund's proxy voting policies and
procedures, and information regarding how the Fund voted proxies relating to
portfolio securities during the most recent 12-month period ended June 30,
without charge. Simply visit AllianceBernstein's web site at
www.alliancebernstein.com, or go to the Securities and Exchange Commission's
(the "Commission") web site at www.sec.gov, or call AllianceBernstein(R) at
(800) 227-4618.
The Fund files its complete schedule of portfolio holdings with the Commission
for the first and third quarters of each fiscal year on Form N-Q. The Fund's
Forms N-Q are available on the Commission's web site at www.sec.gov. The Fund's
Forms N-Q may also be reviewed and copied at the Commission's Public Reference
Room in Washington, DC; information on the operation of the Public Reference
Room may be obtained by calling (800) SEC-0330.
AllianceBernstein Investments, Inc. is an affiliate of AllianceBernstein L.P.,
the manager of the AllianceBernstein funds, and is a member of the NASD.
AllianceBernstein(R) and the AB Logo are registered trademarks and service
marks used by permission of the owner, AllianceBernstein L.P.
May 25, 2007
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, 2007. The Fund is a closed-end fund that trades under the New
York Stock Exchange symbol "ADF".
Investment Objectives and Policies
This closed-end fund is designed for investors who seek high current income and
capital appreciation over a period of years. The Fund normally invests at least
35% of its assets in U.S. corporate fixed-income securities. The balance of the
Fund's investment portfolio will be invested in fixed-income securities issued
or guaranteed by foreign governments and non-U.S. corporate fixed-income
securities. Substantially all of the Fund's assets will be invested in
high-yield, high-risk securities rated below investment-grade and considered to
be predominantly speculative. For more information regarding the Fund's risks,
please see "A Word About Risk" on pages 4-5 and "Note E--Risks Involved in
Investing in the Fund" of the Notes to Financial Statements on page 36-37.
Investment Results
The table on page 6 shows the Fund's performance compared to its new composite
benchmark, a 65%/35% blend of the J.P. Morgan Emerging Markets Bond Index
Global (JPM EMBI Global) and the Credit Suisse First Boston High Yield (CSFBHY)
Index, respectively, for the six- and 12-month periods ended March 31, 2007. In
addition, performance for the Fund's old composite benchmark, a 65%/35% blend
of the J.P. Morgan Emerging Markets Bond Index Plus (JPM EMBI+) and the CSFBHY
Index, respectively, for the same time periods is also included. The JPM EMBI
Global is a more appropriate index for the Fund because it contains a broader
representation of the emerging market sovereign and quasi-sovereign entities:
Brady bonds, loans, Eurobonds. The JPM EMBI+ is a standard measure of the
performance of a basket of unmanaged U.S. high yield debt securities. The
Fund's performance is compared to a composite benchmark of both indices because
this new composite more closely resembles the composition of the Fund's
portfolio.
The Fund outperformed its new composite benchmark for both the six- and
12-month periods ended March 31, 2007. Contributing positively to performance
for both periods were the Fund's overweight positions in Latin America,
particularly in Brazil and Argentina, which outperformed the benchmark.
Although the Fund's country selection of Argentina contributed positively to
performance, security selection within Argentina detracted from the Fund's
performance during both periods: the Fund's shorter maturity bond selection
underperformed Argentina's longer duration bonds.
Within the Fund's high-yield allocation, security selection within the cable,
financial and housing industries, as well as the Fund's overweight positions in
metal/mining and wireless communications, added to relative performance during
the period under review. The Fund's overweight position in the financial sector
detracted from perfor-
ACM MANAGED DOLLAR INCOME FUND o 1
mance over the six-month period, as did security selection within the paper/
packaging, utilities and wireless communication industries.
The Fund's use of leverage, at a time when both emerging-market debt and high
yield posted strong returns, also contributed to the Fund's outperformance for
both periods.
In January of 2007, the Fund received proceeds as a result of the WorldCom
class action settlement. The addition of these proceeds positively impacted
relative performance for both the six- and 12-month periods ended March 31,
2007.
Market Review and Investment Strategy
The emerging-market debt class, as represented by the J.P. Morgan EMBI Global,
posted a solid return of 6.32% for the six-month period ended March 31, 2007,
outperforming all fixed-income sectors with the exception of high yield.
Emerging-market debt was supported by solid global growth, strong investor
demand and ample financial-market liquidity. A temporary spike in volatility,
however, returned to the bond market at the end of February as global equity
markets sold-off sharply, led by declines in China, then in Europe and the
United States. China's sell-off was prompted by the government's proposals to
control the market, curbing speculative activity. Emerging-market debt
impressed with a quicker recovery than most fixed-income sectors and ended the
reporting period with the yield spread returning to near record low levels of
170 basis points over comparable Treasuries.
All countries within the J.P. Morgan EMBI Global posted positive returns, with
Latin countries, which returned 7.18%, outpacing the non-Latin countries, which
returned 5.32% for the period under review. Emerging debt countries favored
during the period included Brazil, Argentina, Peru and Panama. Like most Latin
American countries, Brazil benefited from a virtuous cycle of robust net
exports, capital inflows, and prudent fiscal and monetary policy. Brazil has
shown impressive progress in building dollar reserves and has made great
strides in decreasing its external and sovereign debt ratios, two of the most
critical factors for advancing to investment-grade.
Argentina continued to be supported by strong growth (8.6% in the fourth
quarter of 2007), fiscal surplus and robust trade with the economy benefiting
from soft commodity prices. Peru has benefited from strong economic growth and
progress in building dollar reserves and decreasing its external and sovereign
debt. Panama was supported by a strengthening economy and canal-related fees,
services and expansion. Also within the Fund, holdings in Ecuador were
eliminated due to political risk.
2 o ACM MANAGED DOLLAR INCOME FUND
The high-yield market, as represented by the CSFBHY Index, posted a solid
return of 7.59% for the six-month period ended March 31, 2007, outperforming
all fixed-income sectors. High yield continued to be supported by a low default
risk environment, strong investor demand for yield and a decline in new
issuance. Market volatility remained relatively subdued despite the limited
spike in late February and early March due to concerns over subprime mortgage
delinquincies. The bout of volatility roiled the lowest subprime mortgage
sector but was limited without contagion.
Within its high-yield allocation, the Fund maintained a cautious posture given
what the Fund's portfolio management team (the "team") perceived as
insufficient compensation for assuming risk and a lack of specific credit
opportunities. The team's quantitative analysis indicated that the reward for
assuming incremental risk is greatly diminished in times of a flat or inverted
yield curve and narrow spreads. Specific credit opportunities remained scarce.
At the same time, strong corporate profits, a low default rate and investor
demand for yield allowed high yield spreads to remain well below their
long-term average even as market and leveraged buyout risks increased. In this
environment, the team modestly underweighted more volatile credits and provided
thorough diversification to minimze risk.
ACM MANAGED DOLLAR INCOME FUND o 3
HISTORICAL PERFORMANCE
An Important Note About the Value of Historical Performance
The performance on page 6 represents past performance and does not guarantee
future results. Current performance may be lower or higher than the performance
information shown. All fees and expenses related to the operation of the Fund
have been deducted. Performance assumes reinvestment of distributions and does
not account for taxes.
ACM Managed Dollar Income Fund Shareholder Information
The 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 in other newspapers in a table called "Closed-End Funds." For
additional shareholder information regarding this Fund, please see page 55.
Benchmark Disclosure
The unmanaged J.P. Morgan Emerging Markets Bond Index Global (JPM EMBI Global),
the unmanaged J.P. Morgan Emerging Markets Bond Index Plus (JPM EMBI+) and the
unmanaged Credit Suisse First Boston High Yield (CSFBHY) Index do not reflect
fees and expenses associated with the active management of a mutual fund
portfolio. The JPM EMBI Global tracks total returns for U.S.-dollar denominated
debt instruments issued by emerging market sovereign and quasi-sovereign
entities: Brady bonds, loans, Eurobonds. The JPM EMBI+ is composed of
dollar-denominated restructured sovereign bonds; a large percentage of the
index is made up of Brady bonds. The CSFBHY Index is a standard measure of
lower-rated, fixed-income, non-convertible U.S. dollar-denominated securities
meeting certain criteria developed by Credit Suisse designed to enable the
index to reflect the high yield market. An investor cannot invest directly in
an index, and its results are not indicative of the performance for any
specific investment, including the Fund.
A Word About Risk
The Fund may use certain investment techniques that have increased risks. For
example, the Fund may use leverage, through borrowings, to enhance its returns.
For this purpose the Fund may use reverse repurchase agreements and dollar
rolls, which are considered borrowings, as part of its investment strategy.
Borrowings allow the Fund to increase the amount of money available to invest
in debt securities. As long as the income from the securities financed is
greater than the interest cost of the borrowings, the Fund's investors benefit
from higher returns than if the Fund were not leveraged.
Reverse repurchase agreements involve sales by a fund of portfolio assets
concurrently with an agreement by the fund to repurchase the same assets at a
later date at a fixed price. During the reverse repurchase agreement period,
the fund continues to receive principal and interest payments on these
securities. Generally, the effect of such a transaction is that a fund can
recover all or most of the cash invested in the portfolio securities involved
during the term of the reverse repur-
(Historical Performance continued on next page)
4 o ACM MANAGED DOLLAR INCOME FUND
HISTORICAL PERFORMANCE
(continued from previous page)
chase agreement, while it will be able to keep the interest income associated
with those portfolio securities. Such transactions are advantageous only if the
interest cost to a fund of the reverse repurchase transaction is less than the
cost of otherwise obtaining the cash.
The Fund may enter into dollar rolls in which the Fund sells securities for
delivery in the current month and simultaneously contracts to repurchase
substantially similar (same type and coupon) securities on a specified future
date. During the roll period, the Fund forgoes principal and interest paid on
the securities. The Fund is compensated by the difference between the current
sales price and the lower forward price for the future purchase (often referred
to as the "drop") as well as by the interest earned on the cash proceeds of the
initial sale.
The use of leverage, which is usually considered speculative, involves certain
risks to stockholders. These include a higher volatility of the NAV of the
common stock caused by favorable or adverse changes in interest rates. In
addition, fluctuations in the interest rates on a fund's borrowings will affect
the return to stockholders, with increases in interest rates decreasing the
fund's return.
To the extent that the current interest rates on a fund's borrowings approach
the net return on the leveraged portion of the fund's investment portfolio, the
benefit of leverage to stockholders will be reduced. If the current interest
rate on the borrowings were to exceed the net return on that portion of the
fund's portfolio, the fund's leverage would result in a lower rate of return to
stockholders and in a lower NAV than if a fund were not leveraged.
Part of the Fund's assets will be invested in foreign and emerging markets
fixed-income securities which may magnify asset value fluctuations due to
changes in foreign exchange rates and the possibility of substantial volatility
due to political and economic uncertainties in foreign countries. This may have
a significant effect on the Fund's asset value. Price fluctuations may be
caused by changes in the general level of interest rates or changes in bond
credit quality ratings. Please note, as interest rates rise, existing bond
prices fall and can cause the value of an investment in the Fund to decline.
Changes in interest rates have a greater effect on bonds with longer maturities
than on those with shorter maturities. High yield bonds (i.e., "junk bonds")
involve a greater risk of default and price volatility than other bonds.
Investing in below-investment grade securities presents special risks,
including credit risk. While the Fund invests principally in fixed-income
securities, in order to achieve its investment objectives, the Fund may at
times use certain types of investment derivatives, such as options, forwards
and swaps. These instruments involve risks different from, and in certain
cases, greater than, the risks presented by more traditional investments.
(Historical Performance continued on next page)
ACM MANAGED DOLLAR INCOME FUND o 5
HISTORICAL PERFORMANCE
(continued from previous page)
Returns
THE FUND VS. ITS BENCHMARK ----------------------------------
PERIODS ENDED MARCH 31, 2007 6 Months 12 Months
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ACM Managed Dollar Income Fund (NAV)* 7.27% 11.58%
New Benchmark: 65% JPM EMBI Global /
35% CSFBHY Index 6.76% 11.22%
Old Benchmark: 65% JPM EMBI+ /
35% CSFBHY Index 7.04% 11.55%
JPM EMBI Global 6.32% 10.86%
JPM EMBI+ 6.73% 11.35%
CSFBHY Index 7.59% 11.83%
The Fund's Market Price per share on March 31, 2007 was $8.15. The Fund's Net
Asset Value Price per share on March 31, 2007 was $8.51. For additional
Financial Highlights, please see page 43.
* The Fund's performance was positively affected by WorldCom settlement
proceeds received between December 26, 2006 and January 5, 2007. For further
information please visit:
www.alliancebernstein.com/CmsObjectABD/PDF/HistoricalPricing/WCST_DomFunds3.pdf
See Historical Performance and Benchmark disclosures on pages 4-5.
6 o ACM MANAGED DOLLAR INCOME FUND
PORTFOLIO SUMMARY
March 31, 2007 (unaudited)
PORTFOLIO STATISTICS
Net Assets ($mil): $174.3
SECURITY TYPE BREAKDOWN*
[ ] 43.2% Corporates-Non-Investment Grade [PIE CHART OMITTED]
[ ] 35.5% Emerging Markets-Non-Investment Grade
[ ] 13.1% Government Related-Non-U.S. Issuers
[ ] 3.7% Corporates-Investment Grade
[ ] 0.1% Preferred Stock
[ ] 0.1% Warrants
[ ] 4.3% Short-term
* All data are as of March 31, 2007. The Fund's security type breakdown is
expressed as a percentage of total investments and may vary over time.
ACM MANAGED DOLLAR INCOME FUND o 7
PORTFOLIO OF INVESTMENTS
March 31, 2007 (unaudited)
Principal
Amount
(000) U.S. $ Value
-------------------------------------------------------------------------------
CORPORATES - NON-INVESTMENT GRADE-47.0%
CORPORATES-47.0%
Financial Institutions-1.7%
Banking-0.5%
ALB Finance BV
9.25%, 9/25/13(a) $ 273 $ 265,233
Kazkommerts International BV
8.50%, 4/16/13(a) 350 369,208
Russian Standard Finance S.A.
7.50%, 10/07/10(a) 270 258,601
-------------
893,042
Brokerage-0.7%
E*Trade Financial Corp.
7.375%, 9/15/13 200 209,000
7.875%, 12/01/15 643 693,636
8.00%, 6/15/11 190 199,975
-------------
1,102,611
Insurance-0.2%
Crum & Foster Holdings Corp.
10.375%, 6/15/13 220 237,600
Liberty Mutual Group
7.80%, 3/15/37(a) 95 92,854
-------------
330,454
Other Finance-0.3%
TRAINS HY-1-2006
7.548%, 5/01/16(a) 553 562,657
-------------
2,888,764
Index-1.2%
Dow Jones CDX High Yield
8.25%, 6/29/10(a)* 945 983,651
8.375%, 12/29/11(a)* 1,000 1,028,438
-------------
2,012,089
Industrial-36.3%
Basic Industry-4.0%
AK Steel Corp.
7.875%, 2/15/09 215 215,000
Arch Western Finance LLC
6.75%, 7/01/13 165 162,319
BCP Crystal US Holdings Corp.
9.625%, 6/15/14 6 6,759
Citigroup (JSC Severstal)
9.25%, 4/19/14(a) 464 502,289
Equistar Chemical Funding LP
10.125%, 9/01/08 480 505,200
10.625%, 5/01/11 145 152,975
8 o ACM MANAGED DOLLAR INCOME FUND
Principal
Amount
(000) U.S. $ Value
-------------------------------------------------------------------------------
Evraz Group S.A.
8.25%, 11/10/15(a) $ 665 $ 682,622
Freeport McMoran Copper & Gold
8.375%, 4/01/17 475 513,594
Hexion US Finance Corp.
9.75%, 11/15/14(a) 115 120,606
9.86%, 11/15/14(a)(b) 115 117,875
Huntsman International LLC
7.875%, 11/15/14(a) 195 201,581
Ineos Group Holdings PLC
8.50%, 2/15/16(a) 385 368,638
Jefferson Smurfit Corp.
8.25%, 10/01/12 8 8,000
Lyondell Chemical Co.
8.00%, 9/15/14 155 162,363
8.25%, 9/15/16 425 454,750
Massey Energy Co.
6.875%, 12/15/13 165 156,544
Nell AF S.a.r.l.
8.375%, 8/15/15(a)* 369 384,682
NewMarket Corp.
7.125%, 12/15/16(a) 195 194,025
Newpage Corp.
10.00%, 5/01/12 285 311,719
Peabody Energy Corp.
6.875%, 3/15/13 660 671,550
Rhodia, SA
8.875%, 6/01/11 625 651,562
The Mosaic Co.
7.625%, 12/01/16(a) 445 469,475
-------------
7,014,128
Capital Goods-3.9%
Alion Science and Technology Corp.
10.25%, 2/01/15(a) 40 41,200
Allied Waste North America, Inc.
6.375%, 4/15/11 610 608,475
7.125%, 5/15/16 545 554,537
7.375%, 4/15/14 185 187,775
Associated Materials, Inc.
11.25%, 3/01/14(c) 440 309,100
Ball Corp.
6.875%, 12/15/12 450 454,500
Berry Plastics Holding Corp.
8.875%, 9/15/14 275 281,188
Bombardier, Inc.
8.00%, 11/15/14(a) 350 360,500
ACM MANAGED DOLLAR INCOME FUND o 9
Principal
Amount
(000) U.S. $ Value
-------------------------------------------------------------------------------
Case New Holland, Inc.
7.125%, 3/01/14 $ 205 $ 213,200
9.25%, 8/01/11 315 330,750
Covalence Specialty Materials
10.25%, 3/01/16(a) 130 130,000
Crown Americas
7.625%, 11/15/13 375 385,781
Goodman Global Holding Co., Inc.
7.875%, 12/15/12* 280 281,400
L-3 Communications Corp.
5.875%, 1/15/15 345 335,081
Owens Brockway Glass Container
8.875%, 2/15/09 655 668,100
Plastipak Holdings, Inc.
8.50%, 12/15/15(a) 135 143,100
Russell Stanley Holdings, Inc.
9.00%, 11/30/08(d) 365 45,667
Sequa Corp.
9.00%, 8/01/09 235 247,925
Trinity Industries, Inc.
6.50%, 3/15/14 535 529,650
United Rentals North America, Inc.
7.00%, 2/15/14 85 84,788
7.75%, 11/15/13 538 552,795
-------------
6,745,512
Communications-Media-4.9%
Allbritton Communications Co.
7.75%, 12/15/12 375 384,375
C&M Finance, Ltd.
8.10%, 2/01/16(a) 250 262,500
Cablevision Systems Corp.
Series B
8.00%, 4/15/12 435 441,525
Charter Communications Operations LLC
8.00%, 4/30/12(a) 890 926,712
Clear Channel Communications, Inc.
5.50%, 9/15/14 445 393,962
5.75%, 1/15/13 290 271,925
CSC Holdings, Inc.
6.75%, 4/15/12(a) 325 322,562
7.625%, 7/15/18 410 414,100
Dex Media East LLC
12.125%, 11/15/12 220 240,625
Dex Media West LLC
8.50%, 8/15/10 180 188,325
DirecTV Holdings LLC
6.375%, 6/15/15 605 574,750
Echostar DBS Corp.
6.375%, 10/01/11 325 327,031
7.125%, 2/01/16 160 165,200
10 o ACM MANAGED DOLLAR INCOME FUND
Principal
Amount
(000) U.S. $ Value
-------------------------------------------------------------------------------
Insight Midwest LP
9.75%, 10/01/09 $ 153 $ 155,486
Intelsat Bermuda, Ltd.
8.625%, 1/15/15 285 304,950
11.25%, 6/15/16(a) 702 796,770
Lamar Media Corp.
6.625%, 8/15/15 100 97,500
Liberty Media Corp.
5.70%, 5/15/13 150 143,816
7.875%, 7/15/09 120 125,892
8.25%, 2/01/30 150 149,956
Quebecor Media, Inc.
7.75%, 3/15/16 570 585,675
Rainbow National Services LLC
8.75%, 9/01/12(a) 205 218,069
RH Donnelley Corp.
6.875%, 1/15/13 387 376,358
Sirius Satellite Radio, Inc.
9.625%, 8/01/13 190 190,712
Univision Communications, Inc.
7.85%, 7/15/11 270 282,150
XM Satellite Radio, Inc.
9.75%, 5/01/14* 245 247,144
-------------
8,588,070
Communications-Telecommunications-4.1%
American Tower Corp.
7.125%, 10/15/12 627 645,810
Citizens Communications Co.
6.25%, 1/15/13 490 486,325
Cricket Communications, Inc.
9.375%, 11/01/14(a) 325 344,500
Digicel, Ltd.
9.25%, 9/01/12(a) 349 368,195
Dobson Communications Corp.
8.375%, 11/01/11 143 151,759
8.875%, 10/01/13 185 190,550
Idearc, Inc.
8.00%, 11/15/16(a) 345 355,781
Inmarsat Finance PLC
7.625%, 6/30/12 372 387,810
Kyivstar
7.75%, 4/27/12(a) 100 104,107
L-3 Financing, Inc.
9.25%, 11/01/14(a) 575 590,812
12.25%, 3/15/13 526 615,420
PanAmSat Corp.
9.00%, 8/15/14 313 338,823
Qwest Corp.
8.875%, 3/15/12 1,610 1,779,050
ACM MANAGED DOLLAR INCOME FUND o 11
Principal
Amount
(000) U.S. $ Value
-------------------------------------------------------------------------------
Rural Cellular Corp.
8.25%, 3/15/12 $ 255 $ 266,475
Time Warner Telecom Holdings, Inc.
9.25%, 2/15/14 205 219,350
Windstream Corp.
8.125%, 8/01/13 198 214,335
8.625%, 8/01/16 156 170,625
-------------
7,229,727
Consumer Cyclical - Automotive-3.3%
Ford Motor Co.
7.45%, 7/16/31* 716 554,005
Ford Motor Credit Co.
4.95%, 1/15/08 380 375,450
7.00%, 10/01/13 533 495,470
8.11%, 1/13/12(b) 630 615,840
General Motors Acceptance Corp.
6.875%, 9/15/11 765 765,741
General Motors Corp.
8.25%, 7/15/23 740 666,000
8.375%, 7/15/33* 720 646,200
Goodyear Tire & Rubber Co.
8.625%, 12/01/11(a) 90 96,750
9.00%, 7/01/15 360 395,100
Keystone Automotive Operations, Inc.
9.75%, 11/01/13 310 301,475
Lear Corp.
8.50%, 12/01/13 80 77,300
8.75%, 12/01/16 420 401,100
Tenneco, Inc.
8.625%, 11/15/14 130 135,525
TRW Automotive, Inc.
9.375%, 2/15/13 1 1,024
Visteon Corp.
7.00%, 3/10/14 310 271,250
-------------
5,798,230
Consumer Cyclical-Other-5.0%
Boyd Gaming Corp.
7.75%, 12/15/12 255 263,288
Broder Brothers Co.
11.25%, 10/15/10 142 144,840
Gaylord Entertainment Co.
8.00%, 11/15/13 350 358,313
Greektown Holdings
10.75%, 12/01/13(a) 240 256,800
Harrah's Operating Co., Inc.
5.625%, 6/01/15 695 599,437
Host Hotels & Resorts LP
6.875%, 11/01/14 85 86,275
Host Marriott LP
6.75%, 6/01/16 590 594,425
12 o ACM MANAGED DOLLAR INCOME FUND
Principal
Amount
(000) U.S. $ Value
-------------------------------------------------------------------------------
KB HOME
7.75%, 2/01/10 $ 480 $ 474,000
Levi Strauss & Co.
8.875%, 4/01/16 225 240,750
Mandalay Resort Group
10.25%, 8/01/07 535 541,687
MGM MIRAGE
6.625%, 7/15/15 620 595,200
8.375%, 2/01/11 620 652,550
Mohegan Tribal Gaming Authority
6.375%, 7/15/09 155 154,225
7.125%, 8/15/14 150 152,250
NCL Corp.
10.625%, 7/15/14 250 247,500
Park Place Entertainment
7.00%, 4/15/13 305 324,063
7.875%, 3/15/10 150 156,750
Penn National Gaming, Inc.
6.875%, 12/01/11 430 430,000
Riviera Holdings Corp.
11.00%, 6/15/10 385 401,362
Six Flags, Inc.
9.625%, 6/01/14* 290 272,600
Station Casinos, Inc.
6.625%, 3/15/18 85 75,650
Turning Stone Casino Resort Enterprise
9.125%, 12/15/10(a) 300 304,500
Universal City Development Partners
11.75%, 4/01/10 335 354,681
Universal City Florida Holding Co.
8.375%, 5/01/10 110 113,438
William Lyon Homes, Inc.
10.75%, 4/01/13 206 198,790
Wynn Las Vegas LLC
6.625%, 12/01/14 695 688,050
-------------
8,681,424
Consumer Cyclical - Retailers-1.1%
Autonation, Inc.
7.36%, 4/15/13(b) 55 55,550
Bon-Ton Department Stores, Inc.
10.25%, 3/15/14* 235 252,331
Burlington Coat Factory Warehouse Corp.
11.125%, 4/15/14 130 132,600
Couche-Tard
7.50%, 12/15/13 333 342,158
GSC Holdings Corp
8.00%, 10/01/12 610 646,600
ACM MANAGED DOLLAR INCOME FUND o 13
Principal
Amount
(000) U.S. $ Value
-------------------------------------------------------------------------------
Rite Aid Corp.
6.875%, 8/15/13 $ 230 $ 202,400
9.25%, 6/01/13 210 208,950
-------------
1,840,589
Consumer Non-Cyclical-4.3%
Aramark Corp.
8.50%, 2/01/15(a) 385 400,400
Chaoda Modern Agriculture
7.75%, 2/08/10 519 525,487
Concentra Operating Corp.
9.125%, 6/01/12 5 5,338
9.50%, 8/15/10 280 295,400
DaVita, Inc.
7.25%, 3/15/15 350 353,937
Dole Food Co.
8.875%, 3/15/11 92 90,850
Dole Food Co., Inc.
7.25%, 6/15/10 5 4,775
8.625%, 5/01/09 180 179,550
Elan Finance Corp.
7.75%, 11/15/11 590 579,675
Hanger Orthopedic Group, Inc.
10.25%, 6/01/14 190 201,875
HCA, Inc.
6.25%, 2/15/13 5 4,544
6.375%, 1/15/15 415 354,306
6.50%, 2/15/16 290 246,863
6.75%, 7/15/13 10 9,225
7.875%, 2/01/11 415 422,781
9.625%, 11/15/16(a) 485 523,800
Healthsouth Corp.
10.75%, 6/15/16(a) 250 271,875
Iasis Healthcare LLC
8.75%, 6/15/14 270 279,450
Reynolds American, Inc.
7.25%, 6/01/12-6/01/13 825 864,510
7.625%, 6/01/16 290 308,511
Select Medical Corp.
7.625%, 2/01/15 285 256,500
Stater Brothers Holdings
8.125%, 6/15/12 165 169,950
Tenet Healthcare Corp.
7.375%, 2/01/13 270 250,763
9.875%, 7/01/14 150 151,500
Universal Hospital Services, Inc.
10.125%, 11/01/11 260 276,250
Ventas Realty LP
6.75%, 4/01/17 157 162,495
Visant Corp.
7.625%, 10/01/12 210 213,675
-------------
7,404,285
14 o ACM MANAGED DOLLAR INCOME FUND
Principal
Amount
(000) U.S. $ Value
-------------------------------------------------------------------------------
Energy-1.1%
Chesapeake Energy Corp.
7.50%, 9/15/13 $ 185 $ 193,325
7.75%, 1/15/15 485 505,612
Compagnie Generale de Geophysique-Veritas
7.50%, 5/15/15 10 10,300
7.75%, 5/15/17 25 26,063
Complete Production Services, Inc.
8.00%, 12/15/16(a) 140 143,500
Hilcorp Energy
7.75%, 11/01/15(a) 100 98,250
OPTI Canada, Inc.
8.25%, 12/15/14(a) 68 70,805
PetroHawk Energy Corp.
9.125%, 7/15/13 217 231,105
Range Resources Corp.
7.50%, 5/15/16 265 272,950
Tesoro Corp.
6.25%, 11/01/12 400 405,500
-------------
1,957,410
Other Industrial-0.3%
FastenTech, Inc.
11.50%, 5/01/11 170 180,412
RBS Global & Rexnord Corp.
9.50%, 8/01/14 250 260,000
RBS Global, Inc. & Rexnord Corp.
11.75%, 8/01/16 115 123,913
-------------
564,325
Services-1.0%
Avis Budget Car Rental
7.75%, 5/15/16(a) 315 321,300
Noble Group, Ltd.
6.625%, 3/17/15(a) 401 376,591
Service Corp. International
6.50%, 3/15/08 605 608,025
7.70%, 4/15/09 270 280,800
West Corp.
9.50%, 10/15/14(a) 80 82,800
-------------
1,669,516
Technology-2.7%
Amkor Technology, Inc.
9.25%, 6/01/16 175 182,437
Avago Technologies Finance
10.125%, 12/01/13 230 248,975
Computer Associates, Inc.
4.75%, 12/01/09(a) 200 196,424
Flextronics International, Ltd.
6.50%, 5/15/13 535 529,650
ACM MANAGED DOLLAR INCOME FUND o 15
Principal
Amount
(000) U.S. $ Value
-------------------------------------------------------------------------------
Freescale Semiconductor, Inc.
8.875%, 12/15/14(a)(e) $ 580 $ 580,725
10.125%, 12/15/16(a) 145 145,363
Iron Mountain, Inc.
6.625%, 1/01/16 335 323,275
Nortel Networks Corp.
6.875%, 9/01/23 280 260,400
Nortel Networks, Ltd.
10.125%, 7/15/13(a) 235 257,912
NXP BV
8.11%, 10/15/13(a)(b) 170 174,888
9.50%, 10/15/15(a) 80 82,600
Seagate Technology HDD Holdings
6.375%, 10/01/11 443 443,000
6.80%, 10/01/16 221 222,105
SERENA Software, Inc.
10.375%, 3/15/16 270 291,600
SunGard Data Systems, Inc.
9.125%, 8/15/13 740 793,650
-------------
4,733,004
Transportation - Airlines-0.3%
AMR Corp.
9.00%, 8/01/12* 242 254,100
Continental Airlines, Inc.
7.875%, 7/02/18 84 87,774
8.75%, 12/01/11 260 254,800
-------------
596,674
Transportation - Services-0.3%
Hertz Corp.
Class A
8.875%, 1/01/14 205 220,887
10.50%, 1/01/16 235 267,900
-------------
488,787
-------------
63,311,681
Non Corporates-2.5%
Derivative-2.5%
Racers
Series 06-6-T
5.30%, 5/01/07(a)(b) 4,200 4,447,191
Utilities-5.3%
Electric-3.7%
AES Corp.
7.75%, 3/01/14 555 582,750
8.75%, 5/15/13(a) 75 79,875
9.00%, 5/15/15(a) 115 122,906
Allegheny Energy Supply Co. LLC
7.80%, 3/15/11 280 297,500
8.25%, 4/15/12(a) 495 542,025
16 o ACM MANAGED DOLLAR INCOME FUND
Principal
Amount
(000) U.S. $ Value
-------------------------------------------------------------------------------
Aquila, Inc.
14.875%, 7/01/12* $ 260 $ 338,650
CMS Energy Corp.
8.50%, 4/15/11 215 233,813
Dynegy Holdings, Inc.
8.375%, 5/01/16 390 405,600
Edison Mission Energy
7.50%, 6/15/13 500 516,250
7.75%, 6/15/16 170 177,225
Mirant Americas Generation LLC
8.50%, 10/01/21 210 213,150
NRG Energy, Inc.
7.25%, 2/01/14 85 87,125
7.375%, 2/01/16-1/15/17 920 944,743
Reliant Energy, Inc.
6.75%, 12/15/14 65 68,656
9.50%, 7/15/13 390 424,613
Sierra Pacific Resources
8.625%, 3/15/14 260 281,250
TECO Energy, Inc.
7.00%, 5/01/12 425 448,375
TXU Corp.
5.55%, 11/15/14 475 420,697
6.50%, 11/15/24 379 319,430
-------------
6,504,633
Natural Gas-1.6%
El Paso Corp.
7.375%, 12/15/12 265 283,550
El Paso Production Holding Co.
7.75%, 6/01/13 385 402,325
Northwest Pipeline Corp.
8.125%, 3/01/10 315 327,798
Regency Energy Partners LP
8.375%, 12/15/13(a) 300 306,000
The Williams Cos., Inc.
7.625%, 7/15/19 1,365 1,484,438
-------------
2,804,111
-------------
9,308,744
Total Corporates - Non-Investment Grade
(cost $84,457,698) 81,968,469
EMERGING MARKETS -
NON-INVESTMENT GRADE-38.7%
CORPORATES-1.3%
Financial Institutions-0.6%
Banking-0.3%
Alpha Bond Issuance PLC for OJC
8.625%, 12/09/15(b) 225 224,795
ACM MANAGED DOLLAR INCOME FUND o 17
Principal
Amount
(000) U.S. $ Value
-------------------------------------------------------------------------------
Banco BMG S.A.
9.15%, 1/15/16(a) $ 350 $ 375,375
-------------
600,170
Finance-0.3%
Iirsa Norte Finance, Ltd.
8.75%, 5/30/24(a) 391 $459,284
-------------
1,059,454
Industrial-0.7%
Communications - Media-0.1%
Gallery Capital
10.125%, 5/15/13(a) 249 241,530
Communications - Telecommunication-0.4%
Mobile Telesystems Finance S.A.
9.75%, 1/30/08(a) 625 643,438
Consumer Cyclical - Other-0.2%
Royal Caribbean Cruises, Ltd.
8.00%, 5/15/10 385 409,464
-------------
1,294,432
-------------
2,353,886
SOVEREIGNS-37.4%
Argentina-4.5%
Republic of Argentina
5.475%, 8/03/12(b) 3,275 3,104,472
7.00%, 3/28/11 275 272,297
8.28%, 12/31/33(f) 3,871 4,509,263
-------------
7,886,032
Brazil-8.5%
Republic of Brazil
7.125%, 1/20/37 4,602 5,057,598
8.00%, 1/15/18 2,099 2,369,771
8.25%, 1/20/34 3,519 4,404,028
8.875%, 10/14/19 2,329 2,943,856
-------------
14,775,253
Columbia-1.6%
Republic of Colombia
7.375%, 9/18/37 824 896,512
10.75%, 1/15/13 237 293,643
11.75%, 2/25/20 1,028 1,506,020
-------------
2,696,175
Costa Rica-0.2%
Republic of Costa Rica
8.05%, 1/31/13(a) 181 198,376
8.11%, 2/01/12(a) 188 202,852
-------------
401,228
Dominican Republic-0.3%
Dominican Republic
8.625%, 4/20/27(a) 370 425,500
18 o ACM MANAGED DOLLAR INCOME FUND
Principal
Amount
(000) U.S. $ Value
-------------------------------------------------------------------------------
El Salvador-0.5%
Republic of El Salvador
7.625%, 9/21/34(a) $ 150 $ 172,875
7.65%, 6/15/35(a) 280 319,900
8.50%, 7/25/11(a) 400 441,600
-------------
934,375
Indonesia-1.5%
Republic of Indonesia
6.75%, 3/10/14(a) 945 982,800
6.875%, 3/09/17(a) 378 397,935
7.25%, 4/20/15(a) 476 511,700
7.50%, 1/15/16(a) 270 295,645
8.50%, 10/12/35(a) 390 477,578
-------------
2,665,658
Jamaica-0.3%
Government of Jamaica
9.25%, 10/17/25 100 114,500
10.625%, 6/20/17 270 328,050
-------------
442,550
Lebanon-0.6%
Lebanese Republic
7.875%, 5/20/11(a) 325 318,988
10.125%, 8/06/08(a) 556 565,452
11.625%, 5/11/16(a) 146 171,550
-------------
1,055,990
Panama-2.9%
Republic of Panama
6.70%, 1/26/36 3 3,113
7.125%, 1/29/26 927 1,001,160
7.25%, 3/15/15 2,055 2,224,537
8.875%, 9/30/27 559 712,166
9.375%, 7/23/12-4/01/29 928 1,153,658
-------------
5,094,634
Peru-3.2%
Republic of Peru
7.35%, 7/21/25 2,611 2,970,012
8.375%, 5/03/16 778 923,875
8.75%, 11/21/33(f) 1,299 1,708,185
9.875%, 2/06/15 19 24,159
-------------
5,626,231
Philippines-4.6%
Republic of Philippines
7.50%, 9/25/24 700 769,125
7.75%, 1/14/31 340 383,350
8.25%, 1/15/14 226 253,459
8.375%, 2/15/11 31 33,837
8.875%, 3/17/15 1,888 2,213,680
9.00%, 2/15/13 44 50,666
ACM MANAGED DOLLAR INCOME FUND o 19
Principal
Amount
(000) U.S. $ Value
-------------------------------------------------------------------------------
9.50%, 2/02/30 $ 431 $ 572,152
9.875%, 1/15/19(f) 2,628 3,387,492
10.625%, 3/16/25 205 290,587
-------------
7,954,348
Turkey-4.3%
Republic of Turkey
6.875%, 3/17/36 1,161 1,110,206
7.00%, 6/05/20 1,150 1,157,475
7.375%, 2/05/25 1,523 1,561,075
9.50%, 1/15/14 151 175,432
11.00%, 1/14/13 610 745,725
11.50%, 1/23/12 1,447 1,763,893
11.75%, 6/15/10 883 1,035,318
-------------
7,549,124
Ukraine-0.3%
Government of Ukraine
6.58%, 11/21/16(a) 334 338,676
7.65%, 6/11/13(a) 217 235,228
-------------
573,904
Uruguay-1.2%
Republic of Uruguay
7.625%, 3/21/36 140 155,218
7.875%, 1/15/33(e) 1,078 1,219,372
8.00%, 11/18/22 92 104,427
9.25%, 5/17/17 505 618,625
-------------
2,097,642
Venezuela-2.9%
Republic of Venezuela
5.75%, 2/26/16 733 687,817
6.00%, 12/09/20 127 117,031
6.36%, 4/20/11(a)(b) 120 118,776
7.00%, 12/01/18(a) 501 508,014
9.25%, 9/15/27 1,317 1,644,933
10.75%, 9/19/13 1,500 1,822,500
13.625%, 8/15/18 35 51,503
-------------
4,950,574
-------------
65,129,218
Total Emerging Markets -
Non-Investment Grade
(cost $59,646,658) 67,483,104
GOVERNMENT-RELATED -
NON-US ISSUERS-14.3%
SOVEREIGNS-14.3%
Bulgaria-0.3%
Republic of Bulgaria
8.25%, 1/15/15(a) 355 419,788
20 o ACM MANAGED DOLLAR INCOME FUND
Principal
Amount
(000) U.S. $ Value
-------------------------------------------------------------------------------
Malaysia-0.9%
Government of Malaysia
7.50%, 7/15/11 $ 1,461 $ 1,588,367
Mexico-6.4%
United Mexican States
8.00%, 9/24/22(f) 2,472 3,046,740
8.125%, 12/30/19(f) 5,135 6,303,212
11.375%, 9/15/16 1,296 1,863,000
-------------
11,212,952
Russia-6.6%
Russian Federation
5.00%, 3/31/30(a) 7,155 8,114,280
11.00%, 7/24/18(a) 435 628,140
Russian Ministry of Finance
3.00%, 5/14/08-5/14/11 2,880 2,772,644
-------------
11,515,064
South Africa-0.1%
Republic of South Africa
7.375%, 4/25/12 142 154,248
Total Government-Related - Non-US Issuers
(cost $19,955,773) 24,890,419
CORPORATES-INVESTMENT GRADE-4.0%
CORPORATES-4.0%
Financial Institutions-0.3%
Insurance-0.3%
Coventry Health Care, Inc.
5.875%, 1/15/12 160 162,550
Liberty Mutual Group
5.75%, 3/15/14(a) 280 279,236
-------------
441,786
-------------
441,786
Industrial-2.8%
Basic Industry-0.8%
International Steel Group, Inc.
6.50%, 4/15/14 577 600,801
Ispat Inland ULC
9.75%, 4/01/14 239 263,766
Southern Peru Copper Corp.
7.50%, 7/27/35 300 323,363
Vale Overseas, Ltd.
6.875%, 11/21/36 279 288,120
-------------
1,476,050
Communications - Media-0.4%
Rogers Cable, Inc.
6.75%, 3/15/15 620 641,700
ACM MANAGED DOLLAR INCOME FUND o 21
Shares or
Principal
Amount
(000) U.S. $ Value
-------------------------------------------------------------------------------
Communications - Telecommunications-0.5%
Rogers Wireless Communications, Inc.
7.25%, 12/15/12 $ 335 $ 358,031
7.50%, 3/15/15 508 550,545
-------------
908,576
Consumer Non-Cyclical-0.1%
Cadbury Schweppes Finance
5.125%, 10/01/13(a) 145 140,295
Energy-0.9%
Petronas Capital, Ltd.
7.00%, 5/22/12(a) 794 856,782
TNK-BP Finance
7.50%, 7/18/16(a) 575 606,713
Tyumen Oil Co.
11.00%, 11/06/07(a) 70 71,988
-------------
1,535,483
Technology-0.1%
Electronic Data Systems Corp.
6.50%, 8/01/13 178 181,854
-------------
4,883,958
Non Corporate Sector-0.6%
Agency - Not Government Guaranteed-0.6%
Gazprom OAO
9.625%, 3/01/13(a) 890 1,052,514
Utilities-0.3%
Electric-0.1%
MMG Fiduciary (AES EL Salvador)
6.75%, 2/01/16(a) 270 269,966
Natural Gas-0.2%
Tennessee Gas Pipeline Co.
7.00%, 10/15/28 290 310,493
-------------
580,459
Total Corporates - Investment Grade
(cost $6,809,197) 6,958,717
PREFERRED STOCK-0.2%
Financial Institutions-0.2%
Real Estate Investment Trust-0.2%
Sovereign Real Estate Investment Corp.
(cost $168,350) 185 287,848
22 o ACM MANAGED DOLLAR INCOME FUND
Shares U.S. $ Value
-------------------------------------------------------------------------------
WARRANTS-0.1%
SOVEREIGNS-0.1%
Nigeria-0.1%
Central Bank of Nigeria Warrants, expiring
11/15/20 1,000 $ 255,000
Venezuela-0.0%
Republic of Venezuela Warrants, expiring
4/15/20 7,140 --
Total WARRANTS
(cost $0) 255,000
SHORT-TERM INVESTMENT-4.7%
Mutual Fund-4.7%
AllianceBernstein Fixed Income Shares, Inc.-
Prime STIF Portfolio
(cost $8,106,978) 8,106,978 8,106,978
Total Investments Before Security Lending
Collateral-108.9%
(cost $179,144,653) 189,950,535
INVESTMENT OF CASH COLLATERAL
FOR SECURITIES LOANED-1.5%
Short-Term Investment-1.5%
UBS Private Money Market Fund, LLC
(cost $2,670,898) 2,670,898 2,670,898
Total Investments-110.5%
(cost $181,815,552) 192,621,433
Other assets less liabilities-(10.5)% (18,260,133)
Net Assets-100% $ 174,361,300
CREDIT DEFAULT SWAP CONTRACTS (see Note C)
Notional Unrealized
Swap Counterparty & Amount Interest Termination Appreciation/
Referenced Obligations (000) Rate Date (Depreciation)
-------------------------------------------------------------------------------
Buy Contracts:
Citigroup Global
Markets, Inc. 350 .50% 11/26/13 (4,991)
Republic of Hungary
4.50%, 2/06/13
JP Morgan Chase 1,380 .30 10/20/15 2,301
Republic of Hungary
4.75%, 2/03/15
Lehman Brothers 1,920 1.26 3/21/10 (7,532)
Republic of Venezuela
9.25%, 9/15/27
ACM MANAGED DOLLAR INCOME FUND o 23
Notional Unrealized
Swap Counterparty & Amount Interest Termination Appreciation/
Referenced Obligations (000) Rate Date (Depreciation)
-------------------------------------------------------------------------------
Sale Contracts:
Citigroup Global
Markets, Inc. 2,562 1.98 4/20/07 25,660
Republic of Brazil
12.25%, 3/06/30
Citigroup Global
Markets, Inc. 510 4.95 3/20/09 42,945
Republic of Philippines
10.625%, 3/16/25
Credit Suisse First Boston 750 6.90 6/20/07 26,031
Republic of Brazil
12.25%, 3/06/30
Deutsche Bank AG 2,562 1.90 4/20/07 24,480
Republic of Brazil
12.25%, 3/06/30
JP Morgan Chase 1,490 1.04 10/20/10 27,261
Gazprom OAO
10.50%, 10/21/09
Lehman Brothers 3,510 0.69 3/21/08 3,250
Republic of Venezuela
9.25%, 9/15/27
REVERSE REPURCHASE AGREEMENTS (see Note C)
Broker Interest Rate Maturity Amount
-------------------------------------------------------------------------------
Barclays Capital, Inc. 5.00% 12/31/07 $ 6,293,614
Barclays Capital, Inc. 5.00 12/31/07 3,119,950
Barclays Capital, Inc. 5.15 12/31/07 3,511,210
Chase Manhattan Bank 0.10 12/31/07 4,366,849
Chase Manhattan Bank 5.00 12/31/07 1,687,585
$ 18,979,208
* Represents entire or partial securities out on loan. See Note F for
securities lending information.
(a) Security is exempt from registration under Rule 144A of the Securities Act
of 1933. These securities are considered liquid and may be resold in
transactions exempt from registration, normally to qualified institutional
buyers. At March 31, 2007, the aggregate market value of these securities
amounted to $42,396,432 or 24.3% of net assets.
(b) Variable rate coupon, rate shown as of March 31, 2007.
(c) Indicates a security with a step coupon. The security is issued with a
zero coupon and steps to the stated coupon at a predetermined date and remains
in effect until final maturity.
(d) Security is exempt from registration under Rule 144A of the Securities Act
of 1933. This Security, which represents 0.0% of net assets as of March 31,
2007, is considered illiquid and restricted. Security is in default, is
non-income producing and valued at fair value.
24 o ACM MANAGED DOLLAR INCOME FUND
Acquisition Acquisition Market Percentage of
Restricted Security Date Cost Value Net Assets
-------------------------------------------------------------------------------
Russell-Stanley Holdings, Inc. 2/26/99 $5,111,352 $45,667 0.03%
9.00%, 11/30/08
(e) Pay-In-Kind Payments (PIK).
(f) Positions, or portions thereof, with a market value of $18,413,414 have
been segregated to collateralize reverse repurchase agreements.
Glossary of Terms:
TBA - To Be Announced.
See notes to financial statements.
ACM MANAGED DOLLAR INCOME FUND o 25
STATEMENT OF ASSETS & LIABILITIES
March 31, 2007 (unaudited)
Assets
Investments in securities, at value
Unaffiliated issuers (cost $173,708,574--including
investment cash collateral for securities loaned of
$2,670,898) $ 184,514,455(a)
Affiliated issuers (cost $8,106,978) 8,106,978
Cash 403,173
Interest and dividends receivable 3,205,766
Unrealized appreciation of swap agreements 151,928
Receivable for investment securities sold 35,955
Total assets 196,418,255
Liabilities
Payable for reverse repurchase agreement 18,979,208
Payable for collateral received on securities loaned 2,670,898
Advisory fee payable 128,638
Tender fess payable 75,514
Payable for investment securities purchased 14,533
Administrative fee payable 20,579
Unrealized depreciation of swap agreements 12,523
Transfer Agent fee payable 2,055
Accrued expenses and other liabilities 153,007
Total liabilities 22,056,955
Net Assets $ 174,361,300
Composition of Net Assets
Common stock, at par $ 204,937
Additional paid-in capital 278,179,061
Distributions in excess of net investment income (488,398)
Accumulated net realized loss on investment transactions (114,526,283)
Net unrealized appreciation of investments 10,991,983
$ 174,361,300
Net Asset Value Per Share--300 million shares of
capital stock authorized, $.01 par value
(based on 20,493,702 common shares outstanding) $8.51
(a) Includes securities on loan with a value of $2,566,295 (see Note F).
See notes to financial statements.
26 o ACM MANAGED DOLLAR INCOME FUND
STATEMENT OF OPERATIONS
Six Months Ended March 31, 2007 (unaudited)
Investment Income
Interest
Unaffiliated issuers $ 6,856,732
Affiliated issuers 130,971
Dividends 26,100 $ 7,013,803
Expenses
Advisory fee 642,918
Administrative fee 102,877
Legal 53,809
Audit 40,212
Printing 38,096
Custodian 35,652
Directors' fees and expenses 21,596
Registration fees 11,788
Transfer agency 5,765
Miscellaneous 8,165
Total expenses 960,878
Interest expense 438,757
Net expenses 1,399,635
Net investment income 5,614,168
Realized and Unrealized Gain
on Investment Transactions
Net realized gain on:
Investment transactions 1,440,016
Swap contracts 154,300
Net change in unrealized
appreciation/depreciation of:
Investments 4,564,242
Swap contracts (143,101)
Net gain on investment transactions 6,015,457
Net Increase in Net Assets
from Operations $ 11,629,625
See notes to financial statements.
ACM MANAGED DOLLAR INCOME FUND o 27
STATEMENT OF CHANGES IN NET ASSETS
Six Months
Ended Year Ended
March 31, 2007 September 30,
(unaudited) 2006
-------------- --------------
Increase (Decrease) in Net Assets
Net investment income $ 5,614,168 $ 12,305,592
Net realized gain on investment
transactions 1,594,316 13,142,432
Net change in unrealized
appreciation/depreciation
of investments 4,421,141 (14,430,530)
Net increase in net assets
resulting from operations 11,629,625 11,017,494
Dividends to
Shareholders from
Net investment income (5,717,610) (12,533,183)
Common Stock Transactions
Tender offer (resulting in the redemption
of 0 and 1,078,616 shares of
common stock, respectively) -0- (8,434,777)
Tender offer costs -0- (160,449)
Total increase (decrease) 5,912,015 (10,110,915)
Net Assets
Beginning of period 168,449,285 178,560,200
End of period (including distributions in
excess of net investment income of
$488,398 and $384,956, respectively) $ 174,361,300 $ 168,449,285
See notes to financial statements.
28 o ACM MANAGED DOLLAR INCOME FUND
STATEMENT OF CASH FLOWS
Six Months Ended March 31, 2007 (unaudited)
Increase (Decrease) in Cash from
Operating Activities:
Interest and dividends received $ 6,802,785
Interest expense paid (239,507)
Operating expenses paid (887,647)
Net increase in cash from
operating activities $ 5,675,631
Investing Activities:
Purchases of long-term investments (38,601,030)
Proceeds from disposition of
long-term investments 40,916,399
Proceeds from disposition of short-term
investments, net (3,906,978)
Proceeds from swap contracts 154,300
Net decrease in cash from
investing activities (1,437,309)
Financing Activities*:
Cash dividends paid (5,717,610)
Proceeds from reverse
repurchase agreements 1,242,109
Net decrease in cash from
financing activities (4,475,501)
Net decrease in cash (237,179)
Cash at beginning of period 640,352
Cash at end of period $ 403,173
-------------------------------------------------------------------------------
Reconciliation of Net Increase in Net
Assets from Operations to Net Increase
in Cash from Operating Activities:
Net increase in net assets from
operations $ 11,629,625
Adjustments:
Decrease in interest and
dividends receivable $ 122,169
Accretion of bond discount and
amortization of bond premium (133,937)
Increase in accrued expenses 73,231
Net realized gain on investment
transactions (1,594,316)
Net change in unrealized
appreciation/depreciation of
investments (4,421,141)
Total adjustments (5,953,994)
Net increase in cash from operating
Activities $ 5,675,631
* 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 29
NOTES TO FINANCIAL STATEMENTS
March 31, 2007 (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 (other than securities listed on the NASDAQ Stock Market,
Inc. ("NASDAQ")) or on a foreign securities exchange are valued at the last
sale price at the close of the exchange or foreign securities exchange. If
there has been no sale on such day, the securities are valued at the mean of
the closing bid and asked prices on such day. Securities listed on more than
one exchange are valued by reference to the principal exchange on which the
securities are traded; securities listed only on NASDAQ are valued in
accordance with the NASDAQ Official Closing Price; listed put or call options
are valued at the last sale price. If there has been no sale on that day, such
securities will be valued at the closing bid prices on that day; open futures
contracts and options thereon are valued using the closing settlement price or,
in the absence of such a price, the most recent quoted bid price. If there are
no quotations available for the day of valuation, the last available closing
settlement price is used; securities traded in the over-the-counter market,
(OTC) are valued at the mean of the current bid and asked prices as reported by
the National Quotation Bureau or other comparable sources; U.S. government
securities and other debt instruments having 60 days or less remaining until
maturity are valued at amortized cost if their original maturity was 60 days or
less; or by amortizing their fair value as of the 61st day prior to maturity if
their original term to maturity exceeded 60 days; fixed-income securities,
including mortgage backed and asset backed securities, may be valued on the
basis of prices provided by a pricing service or at a price obtained from one
or more of the major broker/dealers. In cases where broker/dealer quotes are
obtained, AllianceBernstein L.P. (prior to February 24, 2006 known
30 o ACM MANAGED DOLLAR INCOME FUND
as Alliance Capital Management L.P.) (the "Adviser") may establish procedures
whereby changes in market yields or spreads are used to adjust, on a daily
basis, a recently obtained quoted price on a security; and OTC and other
derivatives are valued on the basis of a quoted bid price or spread from a
major broker/dealer in such security.
Securities for which market quotations are not readily available (including
restricted securities) or are deemed unreliable are valued at fair value.
Factors considered in making this determination may include, but are not
limited to, information obtained by contacting the issuer, analysts, analysis
of the issuer's financial statements or other available documents. In addition,
the Fund may use fair value pricing for securities primarily traded in non-U.S.
markets because, most foreign markets close well before the Fund values its
securities at 4:00 p.m., Eastern Time. The earlier close of these foreign
markets gives rise to the possibility that significant events, including broad
market moves, may have occurred in the interim and may materially affect the
value of those securities.
2. Taxes
It is the Fund's policy to meet the requirements of the Internal Revenue Code
applicable to regulated investment companies and to distribute 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 repatriated. 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
Dividend income is recorded on the ex-dividend date or as soon as the Fund is
informed of the dividend. Interest income is accrued daily. Investment
transactions are accounted for on the trade date the securities are purchased
or sold. Investment gains and losses are determined on the identified cost
basis. The Fund amortizes premiums and accretes discounts as adjustments to
interest income.
4. Dividends and Distributions
Dividends and distributions to shareholders are recorded on the ex-dividend
date. Income and capital gains distributions are determined in accordance with
federal tax regulations and may differ from those determined in accordance 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.
ACM MANAGED DOLLAR INCOME FUND o 31
5. Repurchase Agreements
The Fund's custodian or designated subcustodian will take control of securities
as collateral under repurchase agreements and determine on a daily basis that
the value of such securities are sufficient to cover the value of the
repurchase agreements. If the seller defaults and the value of collateral
declines, or if bankruptcy proceedings are commenced with respect to the seller
of the security, realization of collateral by the Fund may be delayed or
limited.
NOTE B
Advisory, Administrative Fees and Other Transactions with Affiliates
Under the terms of the Investment Advisory Agreement, the Fund pays the Adviser
an advisory fee at an annual rate of .75 of 1% of the average weekly adjusted
net assets of the Fund. Such fee is accrued daily and paid monthly.
Under the terms of the Shareholder Inquiry Agency Agreement with
AllianceBernstein Investor Services, Inc. ("ABIS"), a wholly-owned subsidiary
of the Adviser, the Fund reimburses ABIS for costs relating to servicing phone
inquiries on behalf of the Fund. During the six months ended March 31, 2007,
the Fund reimbursed $280 to ABIS.
Under the terms of the Administration Agreement, the Fund pays Princeton
Administrators, LLC (the "Administrator") a fee at an annual rate of .12 of 1%
of the average weekly adjusted net assets of the Fund, but in no event less
than $12,500 per month. Such fee is accrued daily and paid monthly. The
Administrator prepares certain financial and regulatory reports for the Fund
and provides clerical and other services.
The Fund may invest in the AllianceBernstein Fixed-Income Shares, Inc.--Prime
STIF Portfolio and the AllianceBernstein Fixed-Income Shares, Inc.--Government
STIF Portfolio (collectively, the "STIF Portfolios"), open-end management
investment companies managed by the Adviser. The STIF Portfolios are offered as
cash management options to mutual funds, trusts, and other accounts managed by
the Adviser, and are not available for direct purchase by members of the
public. The STIF Portfolios pay no investment management fees.
NOTE C
Investment Transactions
Purchases and sales of investment securities (excluding short-term investments)
for the six months ended March 31, 2007, were as follows:
Purchases Sales
-------------- --------------
Investment securities (excluding
U.S. government securities) $ 37,191,515 $ 39,355,965
U.S. government securities -0- -0-
32 o ACM MANAGED DOLLAR INCOME FUND
The cost of investments for federal income tax purposes, gross unrealized
appreciation and gross unrealized depreciation (excluding written options and
swap contracts) are as follows:
Gross unrealized appreciation $ 15,940,811
Gross unrealized depreciation (5,134,930)
Net unrealized appreciation $ 10,805,881
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.
For the six months ended March 31, 2007 the Fund had no transactions in written
options.
ACM MANAGED DOLLAR INCOME FUND o 33
2. Swap Agreements
The Fund may enter into swaps on sovereign debt obligations to hedge its
exposure to interest rates and credit risk or for investment purposes. A swap
is an agreement that obligates two parties to exchange a series of cash flows
at specified intervals based upon or calculated by reference to changes in
specified prices or rates for a specified amount of an underlying asset. The
payment flows are usually netted against each other, with the difference being
paid by one party to the other.
Risks may arise as a result of the failure of the counterparty to the swap
contract to comply with the terms of the swap contract. The loss incurred by
the failure of a counterparty is generally limited to the net interest payment
to be received by the Fund, and/or the termination value at the end of the
contract. Therefore the Fund considers the creditworthiness of each
counterparty to a swap contract in evaluating potential credit risk.
Additionally, risks may arise from unanticipated movements in interest rates or
in the value of the underlying securities.
The Fund accrues for the interim payments on swap contracts on a daily basis,
with the net amount recorded within unrealized appreciation/depreciation of
swap contracts on the statement of assets and liabilities. Once the interim
payments are settled in cash, the net amount is recorded as realized gain/loss
on swaps, in addition to realized gain/loss recorded upon the termination of
swaps contracts on the statements of operations. Fluctuations in the value of
swap contracts are recorded as a component of net change in unrealized
appreciation/depreciation of investments.
The Fund may enter into credit default swaps. The Fund may purchase credit
protection on the referenced obligation of the credit default swap ("Buy
Contract") or provide credit protection on the referenced obligation of the
credit default swap ("Sale Contract"). A sale/(buy) in a credit default swap
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) interim fixed payments from/(to) the respective
counterparty, calculated at the agreed upon interest rate applied to the
Notional Amount. These interim payments are recorded within unrealized
appreciation/depreciation of swap contracts on the statement of assets and
liabilities.
Credit default swaps may involve greater risks than if a Fund had invested in
the referenced obligation directly. Credit default swaps are subject to general
market risk, liquidity risk, counterparty risk and credit risk. If the Fund is
a buyer and no
34 o ACM MANAGED DOLLAR INCOME FUND
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, 2007, the Fund had Sale Contracts outstanding with Maximum Payout
Amounts aggregating $11,384,000, with net unrealized appreciation of $251,760
and terms ranging from less than 1 year to 3 years, as reflected in the
portfolio of investments.
In certain circumstances, the Fund may hold Sale Contracts on the same
referenced obligation and with the same counterparty it has purchased credit
protection, which may reduce its obligation to make payments on Sale Contracts,
if a credit event occurs. As of March 31, 2007, the Fund did not have Buy
Contracts outstanding with respect to the same referenced obligation and same
counterparty of certain Sale Contracts outstanding.
3. Reverse Repurchase Agreements
Under a reverse repurchase agreement, the Fund sells securities and agrees to
repurchase them at a mutually agreed upon date and price. At the time the Fund
enters into a reverse repurchase agreement, it will establish a segregated
account with the custodian containing liquid assets having a value at least
equal to the repurchase price.
For the six months ended March 31, 2007, the average amount of reverse
repurchase agreements outstanding was $19,694,080 and the daily weighted
average annual interest rate was 4.41%.
NOTE D
Capital Stock
During the six months ended March 31, 2007 and the year ended September 30,
2006, the Fund did not issue any shares in connection with the Fund's dividend
reinvestment plan.
On July 5, 2006, the Fund purchased and retired 1,078,616 shares of its
outstanding common stock for $7.82 per share pursuant to a tender offer. The
Fund incurred costs of $170,000, which were charged to additional paid in
capital. At July 5, 2006, 20,493,702 shares of common stock were outstanding.
The purpose of the tender offer was to fulfill an undertaking made in
connection with the initial public offering price of the Fund's shares.
ACM MANAGED DOLLAR INCOME FUND o 35
NOTE E
Risks Involved in Investing in the Fund
Interest Rate Risk and Credit Risk--Interest rate risk is the risk that changes
in interest rates will affect the value of the Fund's investments in
fixed-income debt securities such as bonds or notes. Increases in interest
rates may cause the value of the Fund's investments to decline. Credit risk is
the risk that the issuer or guarantor of a debt security, or the counterparty
to a derivative contract, will be unable or unwilling to make timely principal
and/or interest payments, or to otherwise honor its obligations. The degree of
risk for a particular security may be reflected in its credit risk rating.
Credit risk is greater for medium quality and lower-rated securities.
Lower-rated debt securities and similar unrated securities (commonly known as
"junk bonds") have speculative elements or are predominantly speculative risks.
Concentration of Risk--Investing in securities of foreign companies and foreign
governments involves special risks which include changes in foreign currency
exchange rates and the possibility of future political and economic
developments which could adversely affect the value of such securities.
Moreover, securities of many foreign companies and foreign governments and
their markets may be less liquid and their prices more volatile than those of
comparable U.S. companies and the U.S. government.
The Fund invests in the sovereign debt obligations of countries that are
considered emerging market countries at the time of purchase. Therefore, the
Fund is susceptible to governmental factors and economic and debt restructuring
developments adversely affecting the economics of these emerging market
countries. In addition, these debt obligations may be less liquid and subject
to greater volatility than debt obligations of more developed countries.
Leverage Risk--The Fund may use certain investment techniques that have
increased risks. For example, the Fund may use leverage, through borrowings, to
enhance its returns. For this purpose, the Fund may use reverse repurchase
agreements and dollar rolls, which are considered borrowings, as part of its
investment strategy. Borrowings allow the Fund to increase the amount of money
available to invest in debt securities. As long as the income from the
securities financed is greater than the interest cost of the borrowings, the
Fund's investors benefit from higher returns than if the Fund were not
leveraged.
The use of leverage, which is usually considered speculative, involves certain
risks to stockholders. These include a higher volatility of the NAV of the
common stock caused by favorable or adverse changes in interest rates. In
addition, fluctuations in the interest rates on a fund's borrowings will affect
the return to stockholders, with increases in interest rates decreasing the
fund's return.
36 o ACM MANAGED DOLLAR INCOME FUND
To the extent that the current interest rate on a fund's borrowings approaches
the net return on the leveraged portion of the fund's investment portfolio, the
benefit of leverage to stockholders will be reduced. If the current interest
rate on the borrowings were to exceed the net return on that portion of the
fund's portfolio, the fund's leverage would result in a lower rate of return to
stockholders and in a lower NAV than if a fund were not leveraged.
Indemnification Risk--In the ordinary course of business, the Fund enters into
contracts that contain a variety of indemnifications. The Fund's maximum
exposure under these arrangements is unknown. However, theFund has not had
prior claims or losses pursuant to these indemnification provisions and expects
the risk of loss thereunder to be remote.
NOTE F
Securities Lending
The Fund has entered into a securities lending agreement with AG Edwards &
Sons, Inc. (the "Lending Agent"). Under the terms of the agreement, the Lending
Agent, on behalf of the Fund, administers the lending of portfolio securities
to certain broker-dealers. In return, the Fund receives fee income from the
lending transactions or it retains a portion of interest on the investment of
any cash received as collateral. The Fund also continues to receive dividends
or interest on the securities loaned. Unrealized gain or loss on the value of
the securities loaned that may occur during the term of the loan will be
reflected in the accounts of the Fund. All loans are continuously secured by
collateral exceeding the value of the securities loaned. All collateral
consists of either cash or U.S. government securities. The Lending Agent may
invest the cash collateral received in accordance with the investment
restrictions of the Fund in one or more of the following investments: U.S.
government or U.S. government agency obligations, bank obligations, corporate
debt obligations, asset-backed securities, structured products, repurchase
agreements and an eligible money 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, 2007, the Fund had loaned securities with a
value of $2,566,295 and received cash collateral of $2,670,898, which was
invested in a money market fund as included in the portfolio of investments.
For the six months ended March 31, 2007, the Fund earned fee income of $6,368,
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 during the year ended September
30, 2007 will be determined at the end of the current fiscal year. The tax
ACM MANAGED DOLLAR INCOME FUND o 37
character of the distributions paid to shareholders during the fiscal years
ended September 30, 2006 and September 30, 2005 were as follows:
2006 2005
-------------- --------------
Distributions paid from:
Ordinary income $ 12,533,183 $ 15,094,355
Total taxable distributions 12,533,183 15,094,355
Tax return of capital -0- -0-
Total distributions paid $ 12,533,183 $ 15,094,355
As of September 30, 2006, the components of accumulated earnings/(deficit) on a
tax basis were as follows:
Accumulated capital and other losses $ (115,812,596)(a)
Unrealized appreciation/(depreciation) 5,877,883(b)
Total accumulated earnings/(deficit) $ (109,934,713)
(a) On September 30, 2006, the Fund had a net capital loss carryforward of
$115,812,596 of which $26,804,736 expires in the year 2007, $24,635,181 expires
in the year 2008, $10,899,598 expires in the year 2009, $33,249,705 expires in
2010 and $20,223,376 expires in the year 2011. To the extent future capital
gains are offset by capital loss carryforwards, such gains will not be
distributed. During the fiscal year, the Fund utilized capital loss
carryforwards of $13,260,337.
(b) The difference between book-basis and tax-basis unrealized
appreciation/(depreciation) is attributable primarily to the tax deferral of
losses on wash sales, the difference between book and tax amortization methods
for premium and the difference between book and tax treatment of swap income.
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
38 o ACM MANAGED DOLLAR INCOME FUND
practices that are the subject of the SEC and NYAG investigations referred to
above. Some of these lawsuits name the Fund as a party. The lawsuits are now
pending in the United States District Court for the District of Maryland
pursuant to a ruling by the Judicial Panel on Multidistrict Litigation
transferring and centralizing all of the mutual funds involving market and late
trading in the District of Maryland (the "Mutual Fund MDL"). Management of the
Adviser believes that these private lawsuits are not likely to have a material
adverse effect on the results of operations or financial condition of the Fund.
On December 18, 2003, the Adviser confirmed that it had reached terms with the
SEC and the NYAG for the resolution of regulatory claims relating to the
practice of "market timing" mutual fund shares in some of the AllianceBernstein
Mutual Funds. The agreement with the SEC is reflected in an Order of the
Commission ("SEC Order"). The agreement with the NYAG is memorialized in an
Assurance of Discontinuation dated September 1, 2004 ("NYAGOrder"). Among the
key provisions of these agreements are the following:
(i) The Adviser agreed to establish a $250 million fund (the "Reimbursement
Fund") to compensate mutual fund shareholders for the adverse effects of market
timing attributable to market timing relationships described in the SEC Order.
According to the SEC Order, the Reimbursement Fund is to be paid, in order of
priority, to fund investors based on (i) their aliquot share of losses suffered
by the fund due to market timing, and (ii) a proportionate share of advisory
fees paid by such fund during the period of such market timing;
(ii) The Adviser agreed to reduce the advisory fees it receives from some of
the AllianceBernstein long-term, open-end retail funds, commencing January 1,
2004, for a period of at least five years; and
(iii) The Adviser agreed to implement changes to its governance and compliance
procedures. Additionally, the SEC Order contemplates that the Adviser's
registered investment company clients, including the Fund, will introduce
governance and compliance changes.
The shares of the Fund are not redeemable by the Fund, but are traded on an
exchange at prices established by the market. Accordingly, the Fund and its
shareholders are not subject to the market timing practices described in the
SEC Order and are not expected to participate in the Reimbursement Fund. Since
the Fund is a closed-end fund, it will not have its advisory fee reduced
pursuant to the terms of the agreements mentioned above.
On February 10, 2004, the Adviser received (i) a subpoena duces tecum from the
Office of the Attorney General of the State of West Virginia and (ii) a request
for information from West Virginia's Office of the State Auditor, Securities
Com-
ACM MANAGED DOLLAR INCOME FUND o 39
mission (the "West Virginia Securities Commissioner") (together, the
"Information Requests"). Both Information Requests require the Adviser to
produce documents concerning, among other things, any market timing or late
trading in the Adviser's sponsored mutual funds. The Adviser responded to the
Information Requests and has been cooperating fully with the investigation.
On April 11, 2005, a complaint entitled The Attorney General of the State of
West Virginia v. AIM Advisors, Inc., et al. ("WVAG Complaint") was filed
against the Adviser, Alliance Capital Management Holding L.P. ("Alliance
Holding"), and various other defendants not affiliated with the Adviser. The
WVAG Complaint was filed in the Circuit Court of Marshall County, West Virginia
by the Attorney General of the State of West Virginia. The WVAG Complaint makes
factual allegations generally similar to those in certain of the complaints
related to the lawsuits discussed above. On October 19, 2005, the WVAG
Complaint was transferred to the Mutual Fund MDL.
On August 30, 2005, the West Virginia Securities Commissioner signed a Summary
Order to Cease and Desist, and Notice of Right to Hearing addressed to the
Adviser and Alliance Holding. The Summary Order claims that the Adviser and
Alliance Holding violated the West Virginia Uniform Securities Act, and makes
factual allegations generally similar to those in the SEC Order and the NYAG
Order. On January 26, 2006, the Adviser, Alliance Holding, and various
unaffiliated defendants filed a Petition for Writ of Prohibition and Order
Suspending Proceedings in West Virginia state court seeking to vacate the
Summary Order and for other relief. The court denied the writ and in September
2006 the Supreme Court of Appeals declined the defendants' petition for appeal.
On September 22, 2006, Alliance and Alliance Holding filed an answer and motion
to dismiss the Summary Order with the Securities Commissioner.
On June 22, 2004, a purported class action complaint entitled Aucoin, et al. v.
Alliance Capital Management L.P., et al. ("Aucoin Complaint") was filed against
the Adviser, Alliance Capital Management Holding L.P., Alliance Capital
Management Corporation, AXA Financial, Inc., AllianceBernstein Investment
Research & Management, Inc., certain current and former directors of the
AllianceBernstein Mutual Funds, and unnamed Doe defendants. The Aucoin
Complaint names certain of the AllianceBernstein mutual funds as nominal
defendants. The Fund was not named as a defendant in the Aucoin Complaint. The
Aucoin Complaint was filed in the United States District Court for the Southern
District of New York by alleged shareholders of an AllianceBernstein mutual
fund. The Aucoin Complaint alleges, among other things, (i) that certain of the
defendants improperly authorized the payment of excessive commissions and other
fees from fund assets to broker-dealers in exchange for preferential marketing
services, (ii) that certain of the defendants misrepresented and omitted from
registration statements and other reports material facts concerning such
payments, and (iii) that certain defendants caused such conduct as control per-
40 o ACM MANAGED DOLLAR INCOME FUND
sons of other defendants. The Aucoin Complaint asserts claims for violation of
Sections 34(b), 36(b) and 48(a) of the Investment Company Act, Sections 206 and
215 of the Advisers Act, breach of common law fiduciary duties, and aiding and
abetting breaches of common law fiduciary duties. Plaintiffs seek an
unspecified amount of compensatory damages and punitive damages, rescission of
their contracts with the Adviser, including recovery of all fees paid to the
Adviser pursuant to such contracts, an accounting of all fund-related fees,
commissions and soft dollar payments, and restitution of all unlawfully or
discriminatorily obtained fees and expenses.
Since June 22, 2004, nine additional lawsuits making factual allegations
substantially similar to those in the Aucoin Complaint were filed against the
Adviser and certain other defendants. All nine of the lawsuits (i) were brought
as class actions filed in the United States District Court for the Southern
District of New York, (ii) assert claims substantially identical to the Aucoin
Complaint, and (iii) are brought on behalf of shareholders of the Funds.
On February 2, 2005, plaintiffs filed a consolidated amended class action
complaint ("Aucoin Consolidated Amended Complaint") that asserts claims
substantially similar to the Aucoin Complaint and the nine additional lawsuits
referenced above. On October 19, 2005, the District Court dismissed each of the
claims set forth in the Aucoin Consolidated Amended Complaint, except for
plaintiffs' claim under Section 36(b) of the Investment Company Act. On January
11, 2006, the District Court granted defendants' motion for reconsideration and
dismissed the remaining Section 36(b) claim. On May 31, 2006 the District Court
denied plaintiffs' motion for leave to file an amended complaint. On July 5,
2006, plaintiffs filed a notice of appeal. On October 4, 2006 the appeal was
withdrawn by stipulation, with plaintiffs reserving the right to reinstate it
at a later date.
The Adviser believes that these matters are not likely to have a material
adverse effect on the Fund or the Adviser's ability to perform advisory
services relating to the Fund.
NOTE I
Recent Accounting Pronouncements
On July 13, 2006, the Financial Accounting Standards Board ("FASB") released
FASB Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" ("FIN
48"). FIN 48 provides guidance for how uncertain tax positions should be
recognized, measured, presented and disclosed in the financial statements. FIN
48 requires the evaluation of tax positions taken or expected to be taken in
the course of preparing a fund's tax returns to determine whether the tax
positions are "more-likely-than-not" of being sustained by the applicable tax
authority. Tax positions not deemed to meet the more-likely-than-not threshold
would be recorded in the current period. Adoption of FIN 48 is required for
fiscal years
ACM MANAGED DOLLAR INCOME FUND o 41
beginning after December 15, 2006 and is to be applied to all open tax years as
of the effective date. On December 22, 2006, the Securities and Exchange
Commission notified the industry that the implementation of FIN 48 by
registered investment companies could be delayed until the last business day of
the first required financial statement reporting period for fiscal years
beginning after December 15, 2006. At this time, management is evaluating the
implications of FIN 48 and its impact on the financial statements has not yet
been determined.
On September 20, 2006, the FASB released Statement of Financial Accounting
Standards No. 157 "Fair Value Measurements" ("FAS 157"). FAS 157 establishes an
authoritative definition of fair value, sets out a framework for measuring fair
value, and requires additional disclosures about fair-value measurements. The
application of FAS 157 is required for fiscal years beginning after November
15, 2007 and interim periods within those fiscal years. At this time,
management is evaluating the implications of FAS 157 and its impact on the
financial statements has not yet been determined.
NOTE J
Subsequent Events
At a meeting of the Board of Directors of the Fund held on November 2, 2006,
the Board appointed the Adviser as the Fund's administrator, effective April 1,
2007, to act pursuant to the terms of an Administration Agreement. Pursuant to
the Administration Agreement, the Fund will reimburse the Adviser for its costs
incurred for providing administrative services.
42 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,
2007 ---------------------------------------------------------------
(unaudited) 2006 2005 2004(a) 2003 2002(b)
----------- ----------- ----------- ----------- ----------- -----------
Net asset value,
beginning of period $8.22 $8.28 $7.87 $7.68 $5.58 $6.33
Income From Investment
Operations
Net investment income(c) .27 .58 .65 .76 .81 .84
Net realized and unrealized
gain (loss) on investment
transactions .30 (.05) .43 .23 2.10 (.71)
Net increase (decrease) in net
asset value from operations .57 .53 1.08 .99 2.91 .13
Less: Dividends and
Distributions
Dividends from net investment
income (.28) (.59) (.67) (.80) (.81) (.85)
Tax return of capital -0- -0- -0- -0- -0- (.03)
Total dividends and
distributions (.28) (.59) (.67) (.80) (.81) (.88)
Net asset value, end of period $8.51 $8.22 $8.28 $7.87 $7.68 $5.58
Market value, end of period $8.15 $7.37 $7.74 $7.87 $8.15 $6.29
Premium/(Discount) (4.23)% (10.34)% (6.52)% 0.00% 6.12% 12.72%
Total Return
Total investment return based on:(d)
Market value 7.27% 3.07% 7.10% 6.91% 45.71% (6.14)%
Net asset value 14.58% 7.46% 14.57% 13.45% 54.77% .23%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $174,361 $168,449 $178,560 $178,735 $173,182 $124,834
Ratios to average net assets of:
Expenses 1.62%(e) 1.71% 1.49% 1.44% 1.72% 2.12%
Expenses, excluding
interest expense(f) 1.11%(e) 1.13% 1.13% 1.15% 1.21% 1.15%
Net investment income 6.51%(e) 7.10% 8.06% 9.76% 11.88% 10.81%
Portfolio turnover rate 21% 55% 63% 95% 80% 63%
See footnote summary on page 44.
ACM MANAGED DOLLAR INCOME FUND o 43
(a) As of October 1, 2003, the Fund has adopted the method of accounting for
interim payments on swap contracts in accordance with Financial Accounting
Standards Board Statement No. 133. These interim payments are reflected within
net realized and unrealized gain (loss) on swap contracts, however, prior to
October 1, 2003, these interim payments were reflected within interest
income/expense on the statement of operations. The effect of this change for
the fiscal year ended September 30, 2006, was to decrease net investment income
per share by $0.01 and increase net realized and unrealized gain (loss) on
investment transactions per share by $0.01 and decrease the ratio of net
investment income to average net assets by 0.15%.
(b) As required, effective October 1, 2001, the Fund has adopted the
provisions of the AICPA Audit and Accounting Guide, Audits of Investment
Companies, and began amortizing premium on debt securities for financial
statement reporting purposes only. The effect of this change for the year end
September 30, 2002 was to decrease net investment income per share by $0.01,
decrease net realized and unrealized loss on investment by $0.01 and decrease
the ratio of net investment income to average net assets from 10.91% to 10.81%.
Per share, ratios and supplemental data for periods prior to October 1, 2001
have not been restated to reflect this change in presentation.
(c) Based on average shares outstanding.
(d) Total investment return is calculated assuming a purchase of common stock
on the opening of the first day and a sale on the closing of the last day of
each period reported. Dividends and distributions, if any, are assumed for
purposes of this calculation, to be reinvested at prices obtained under the
Fund's dividend reinvestment plan. Generally, total investment return based on
net asset value will be higher than total investment return based on market
value in periods where there is an increase in the discount or a decrease in
the premium of the market value to the net asset value from the beginning to
the end of such periods. Conversely, total investment return based on net asset
value will be lower than total investment return based on market value in
periods where there is a decrease in the discount or an increase in the premium
of the market value to the net asset value from the beginning to the end of
such periods. Total investment return calculated for a period of less than one
year is not annualized.
(e) Annualized.
(f) Excludes net interest expense of 51%, .61%, .36%, .29%, .51% and .97%,
respectively, on borrowings.
44 o ACM MANAGED DOLLAR INCOME FUND
ADDITIONAL INFORMATION
(unaudited)
Supplemental Proxy Information
The Annual Meeting of Stockholders of the ACM Managed Dollar Income Fund, Inc.
was held on May 4, 2007.
A description of each proposal and number of shares voted at the meeting are as
follows:
Abstain/
Authority
Voted for Withheld
----------------------------------------------------------------------------------------
1. To elect Class One directors:
(terms expire in 2010) David H. Dievler 18,927,869 533,409
Michael J. Downey 18,939,426 521,852
Nancy P. Jacklin 18,938,781 522,496
2. To elect a Class Three director:
(term expires in 2009) Earl D. Weiner 18,941,550 519,728
ACM MANAGED DOLLAR INCOME FUND o 45
BOARD OF DIRECTORS
William H.Foulk, Jr.,(1) Chairman
Marc O.Mayer, President and Chief Executive Officer
David H. Dievler(1)
John H. Dobkin(1)
Michael J. Downey(1)
D. James Guzy(1)
Nancy P. Jacklin(1)
Marshall C. Turner, Jr.(1)
Earl D. Weiner(1)
OFFICERS
Philip L. Kirstein, Senior Vice President and Independent Compliance Officer
Paul J. DeNoon(2), Vice President
Gershon Distenfeld(2), Vice President
Emilie D. Wrapp, Secretary
Joseph J. Mantineo, Treasurer and Chief Financial Officer
Vincent S. Noto, Controller
Administrator(3)
AllianceBernstein L.P.
1345 Avenue of the Americas
New York, NY 10105
Custodian
State Street Bank and Trust Company
One Lincoln Street
Boston, MA 02111
Dividend Paying Agent, Transfer Agent and Registrar
ComputerShare Trust Company, N.A.
P.O. Box 43010
Providence, RI 02940-3010
Independent Registered Public Accounting Firm
Ernst& Young LLP
5 Times Square
New York,NY 10036
Legal Counsel
Seward & Kissel LLP
One Battery Park Plaza
New York, NY 10004
See footnote summary on page 47.
46 o ACM MANAGED DOLLAR INCOME FUND
(1) Member of the Audit Committee, the Governance and Nominating Committee,
and the Independent Directors Committee.
(2) The day-to-day management of, and investment decisions for, the Fund's
portfolio are made by the Global Fixed Income and Global Credit Teams. While
all members of the team work jointly to determine the majority of the
investment stategy including security selection for the Fund, Messrs. Paul J.
DeNoon and Gershon M. Distenfeld, members of the Global Fixed Income Emerging
Market Investment Team and Global Credit Team, respectively, are primarily
responsible for the day-to-day management of the Fund's portfolio.
Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940 that the Fund may purchase at market prices from time to
time shares of its Common Stock in the open market.
This report, including the financial statements therein, is transmitted to
the shareholders of 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 26, 2007, 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.
(3) Prior to April 1, 2007, the Fund's Administrator was Princeton
Administrators, L.P., P.O. Box 9095, Princeton, NJ 08543-9095.
ACM MANAGED DOLLAR INCOME FUND o 47
Information Regarding the Review and Approval of the Fund's Advisory and
Administration Agreements
The Fund's disinterested directors (the "directors") unanimously approved the
continuance of the Advisory Agreement between the Fund and the Adviser and an
Administration Agreement between the Adviser (in such capacity, the
"Administrator") and the Fund at a meeting held on October 31-November 2, 2006.
In preparation for the meeting, the directors had requested from the Adviser
and received and evaluated extensive materials, including performance and
expense information for other investment companies with similar investment
objectives derived from data compiled by Lipper Inc. ("Lipper"), which is not
affiliated with the Adviser. Prior to voting, the directors reviewed the
proposed continuance of the Advisory Agreement and approval of the
Administration Agreement with management and with experienced counsel who are
independent of the Adviser and received a memorandum from such counsel
discussing the legal standards for their consideration of the proposed
continuance. The directors also discussed the proposed continuance in three
private sessions at which only the directors, their independent counsel and the
Fund's Independent Compliance Officer were present. In reaching their
determinations relating to continuance of the Advisory Agreement and approval
of the Administration Agreement, the directors considered all factors they
believed relevant, including the following:
1. information comparing the performance of the Fund to other investment
companies with similar investment objectives and to an index;
2. the nature, extent and quality of investment, compliance, administrative
and other services rendered by the Adviser;
3. payments received by the Adviser from all sources in respect of the Fund
and all investment companies in the AllianceBernstein Funds complex;
4. the costs borne by, and profitability of, the Adviser and its affiliates in
providing services to the Fund and to all investment companies in the
AllianceBernstein Funds complex;
5. comparative fee and expense data for the Fund and other investment
companies with similar investment objectives;
6. the extent to which economies of scale would be realized to the extent the
Fund grows and whether fee levels reflect any economies of scale for the
benefit of investors;
7. the Adviser's policies and practices regarding allocation of portfolio
transactions of the Fund;
8. portfolio turnover rates for the Fund compared to other investment
companies with similar investment objectives;
48 o ACM MANAGED DOLLAR INCOME FUND
9. fall-out benefits which the Adviser and its affiliates receive from their
relationships with the Fund;
10. the Adviser's representation that there are no institutional products
managed by the Adviser which have a substantially similar investment style as
the Fund;
11. the professional experience and qualifications of the Fund's portfolio
management team and other senior personnel of the Adviser;
12. the terms of the Advisory Agreement; and
13. the terms of the Administration Agreement.
The directors also considered their knowledge of the nature and quality of the
services provided by the Adviser to the Fund gained from their experience as
directors or trustees of most of the registered investment companies advised by
the Adviser, their overall confidence in the Adviser's integrity and competence
they have gained from that experience and the Adviser's responsiveness to
concerns raised by them in the past, including the Adviser's willingness to
consider and implement organizational and operational changes designed to
improve investment results and the services provided to the AllianceBernstein
Funds.
In their deliberations, the directors did not identify any particular
information that was all-important or controlling, and different directors may
have attributed different weights to the various factors. The directors
determined that the overall arrangements (i) between the Fund and the Adviser,
as provided in the Advisory Agreement, and (ii) between the Fund and the
Administrator, as provided in the Administration Agreement were fair and
reasonable in light of the services performed, expenses incurred and such other
matters as the directors considered relevant in the exercise of their business
judgment.
The material factors and conclusions that formed the basis for the directors
reaching their determinations to approve the continuance of the Advisory
Agreement and to approve the Administration Agreement (including their
determinations that the Adviser should continue to be the investment adviser
for the Fund and that the Administrator should be the administrator of the
Fund, and that the fees payable to the Adviser pursuant to the Advisory
Agreement and to the Administrator pursuant to the Administration Agreement are
appropriate) were separately discussed by the directors.
Nature, Extent and Quality of Services Provided by the Adviser
The directors noted that, under the Advisory Agreement, the Adviser, subject to
the oversight of the directors, administers the Fund's business and other
affairs. The Adviser manages the investment of the assets of the Fund,
including making purchases and sales of portfolio securities consistent with
the Fund's investment objective and policies. The Adviser also provides the
Fund with such office space, administrative and other services (exclusive of,
and in addition to, any such
ACM MANAGED DOLLAR INCOME FUND o 49
services provided by any others retained by the Fund) and executive and other
personnel as are necessary for the Fund's operations. The Adviser pays all of
the compensation of directors of the Fund who are affiliated persons of the
Adviser and of the officers of the Fund.
The directors noted that the Advisory Agreement for the Fund does not contain a
reimbursement provision for the cost of certain administrative and other
services provided by the Adviser. The directors noted that the Fund had a
separate administration agreement with a third party and paid separate
administration fees to such third party, and that it was proposed that the
Administration Agreement be approved effective April 1, 2007.
The directors considered the scope and quality of services provided by the
Adviser under the Advisory Agreement and to be provided by the Administrator
under the Administration Agreement and noted that the scope of services
provided by advisers and administrators of funds had expanded over time as a
result of regulatory and other developments. The directors noted that, for
example, the Adviser (including in its capacity as Administrator of the Fund)
is responsible for maintaining and monitoring its own and, to varying degrees,
the Fund's compliance programs, and these compliance programs have recently
been refined and enhanced in light of current regulatory requirements. The
directors considered the quality of the in-house investment research
capabilities of the Adviser and the other resources it has dedicated to
performing services for the Fund. The quality of administrative and other
services, including the Adviser's role in coordinating the activities of the
Fund's other service providers, also were considered. The directors also
considered the Adviser's response to recent regulatory compliance issues
affecting a number of the investment companies in the AllianceBernstein Funds
complex. The directors concluded that, overall, they were satisfied with the
nature, extent and quality of services provided or to be provided to the Fund
under the Advisory Agreement and the Administration Agreement.
Costs of Services Provided and Profitability to the Adviser
The directors reviewed a schedule of the revenues, expenses and related notes
indicating the profitability of the Fund to the Adviser for calendar years 2004
and 2005 that had been prepared with an updated expense allocation methodology
arrived at in consultation with an independent consultant. The directors noted
that the updated methodology differed in various respects from the methodology
used in prior years. The directors reviewed the assumptions and methods of
allocation used by the Adviser in preparing fund-specific profitability data,
and noted the Adviser's representation to them that it believed that the
methods of allocation used in preparing the profitability information were
reasonable and appropriate and that the Adviser had previously discussed with
the directors that there is no generally accepted allocation methodology for
information of this type.
50 o ACM MANAGED DOLLAR INCOME FUND
The directors recognized that it is difficult to make comparisons of
profitability from fund advisory contracts because comparative information is
not generally publicly available and is affected by numerous factors, including
the structure of the particular adviser, the types of funds it manages, its
business mix, numerous assumptions regarding allocations and the adviser's
capital structure and cost of capital. In considering profitability
information, the directors considered the effect of fall-out benefits on the
Adviser's expenses. The directors focused on the profitability of the Adviser's
relationship with the Fund before taxes. The directors recognized that the
Adviser should generally be entitled to earn a reasonable level of profits for
the services it provides to the Fund and, based on their review, concluded that
they were satisfied that the Adviser's level of profitability from its
relationship with the Fund was not excessive.
Fall-Out Benefits
The directors considered that the Adviser benefits from soft dollar
arrangements whereby it receives brokerage and research services from many of
the brokers and dealers that execute purchases and sales of securities on
behalf of its clients on an agency basis. The directors noted that since the
Fund does not engage in brokerage transactions, the Adviser does not receive
soft dollar benefits in respect of portfolio transactions of the Fund. The
directors also noted that a subsidiary of the Adviser provides certain
shareholder services to the Fund and receives compensation from the Fund for
such services.
The directors recognized that the Adviser's profitability would be somewhat
lower if the Adviser's subsidiary did not receive the benefits described above.
The directors understood that the Adviser also might derive reputational and
other benefits from its association with the Fund.
Investment Results
In addition to the information reviewed by the directors in connection with the
meeting, the directors receive detailed comparative performance information for
the Fund at each regular Board meeting during the year. At the meeting, the
directors reviewed information prepared by the Adviser based on information
obtained from Lipper showing performance of the Fund as compared to other funds
in the Lipper Flexible Income Funds Average (the "Lipper Average") for periods
ended June 30, 2006 over the year to date ("YTD"), 1-, 3-, 5- and 10-year and
since inception periods (inception October 1993) and for each of the last ten
calendar years, and as compared to the JP Morgan Emerging Markets Bond Index
Plus (the "Index") for periods ended June 30, 2006 for the YTD, 1-, 3-, 5- and
10-year periods (information was not available for the since inception period).
The directors noted that in the Lipper Average comparison (seven funds in the
YTD period, including the Fund and ACM Managed Income Fund, Inc., another
closed-end fund advised by the Adviser), the Fund's performance
ACM MANAGED DOLLAR INCOME FUND o 51
was significantly above the Lipper median in all periods reviewed except in the
YTD period when it was materially below the Lipper median and that the Fund's
calendar year performance was also significantly above the Lipper median in
every year except 2002 when it was materially below the Lipper median and 1998
and 2000 when it was significantly below the Lipper median. The directors
further noted that the Fund outperformed the Index in the YTD, 3- and 5-year
periods and underperformed the Index in the 1- and 10-year periods. Based on
their review, the directors concluded that the Fund's relative performance over
time was satisfactory.
Advisory Fees and Other Expenses
The directors considered the latest fiscal period actual management fees paid
by the Fund (advisory fees paid to the Adviser and administration fees paid to
an entity that is not affiliated with the Adviser for administrative services)
and information prepared by Lipper concerning fee rates paid by other funds in
the same Lipper category as the Fund. They compared the combined advisory and
administration fees paid by the Fund to the advisory fees of other funds where
there is no separate administrator. The directors recognized that it is
difficult to make comparisons of advisory fees because there are variations in
the services that are included in the fees paid by other funds.
The directors noted that in connection with the settlement of the market timing
matter with the New York Attorney General in December 2003, the Adviser agreed
to material reductions (averaging 20%) in the fee schedules of most of the
open-end funds sponsored by the Adviser and that such open-end funds had
benefited from such reductions since 2004. At the meeting the directors
considered and agreed to the Adviser's proposals for the termination of the
Fund's then current administration agreement with a third party for a 12 basis
point fee and the approval of the Administration Agreement with the
Administrator for an amount equal to no more than the cost to the Administrator
of providing administrative services. In evaluating the Adviser's proposals the
directors noted that the change was projected to result in cost savings to the
Fund.
The Adviser informed the directors that there are no institutional products
managed by it that have a substantially similar investment style as the Fund.
The directors reviewed information in the Adviser's Form ADV and noted that it
charges institutional clients lower fees for advising comparably sized accounts
using strategies that differ from those of the Fund but which involve
investments in securities of the same type that the Fund invests in (i.e.,
fixed income taxable securities).
The Adviser reviewed with the directors the significant differences in the
scope of services it provides to institutional clients and to the Fund. For
example, the Advisory Agreement requires the Adviser to provide, in addition to
investment advice, office facilities and officers (including officers to
provide required certifications). The Adviser also coordinates the provision of
services to the Fund by
52 o ACM MANAGED DOLLAR INCOME FUND
non-affiliated service providers and is responsible for the compensation of the
Fund's Independent Compliance Officer and certain related expenses. The
provision of these non-advisory services involves costs and exposure to
liability. The Adviser explained that many of these services normally are not
provided to non-investment company clients and that fees charged to the Fund
reflect the costs and risks of the additional obligations. In light of these
facts, the directors did not place significant weight on these fee comparisons.
In evaluating the Adviser's proposal, the directors took into account the fact
that the Fund utilizes leverage and that as a result the Fund's assets that the
Adviser invests and reinvests are materially greater than its net assets.
However, the advisory fee is calculated based on the Fund's net assets. The
directors noted that many leveraged funds pay advisory fees based on "adjusted
net assets" which results in such funds paying advisory fees on the assets
supported by leverage, and that if the advisory fee paid by the Fund was
expressed as a percentage of its adjusted net assets the fee rate would be
materially lower than the rate stated in the Advisory Agreement.
The directors also considered the total expense ratio of the Fund in comparison
to the fees and expenses of funds within two comparison groups created by
Lipper: an Expense Group and an Expense Universe. Lipper described an Expense
Group as a representative sample of comparable funds and an Expense Universe as
a broader group, consisting of all funds in the Fund's investment
classification/objective. The directors noted that because of the small number
of funds in the Fund's Lipper category, at the request of the Adviser and the
Fund's Senior Officer, Lipper had expanded the Expense Group and Expense
Universe of the Fund to include funds that are allowed to utilize leverage but
do not do so. The expense ratio of the Fund was based on the Fund's latest
fiscal year expense ratio. The directors recognized that the expense ratio
information for the Fund potentially reflected on the Adviser's provision of
services, as the Adviser is responsible for coordinating services provided to
the Fund by others. The directors noted that the expense ratios of some funds
in the Fund's Lipper category also were lowered by waivers or reimbursements by
those funds' investment advisers, which in some cases were voluntary and
perhaps temporary.
The information reviewed by the directors showed that the Fund's latest fiscal
period actual management fees of 87 basis points (combined advisory fee paid
under the Advisory Agreement and an administration fee paid to an entity that
is not affiliated with the Adviser) were significantly higher than the Expense
Group median and significantly higher than the Expense Universe median. The
directors also noted that the Fund's total expense ratio was the same as the
Expense Group median and significantly higher than the Expense Universe median.
The directors noted that the Fund's expense ratio was in part due to the Fund's
relatively small size (less than $175 million as of June 30, 2006). The
directors concluded that the Fund's expense ratio was acceptable.
ACM MANAGED DOLLAR INCOME FUND o 53
Economies of Scale
The directors considered that the Fund is a closed-end Fund and that it was not
expected to have meaningful asset growth as a result. In such circumstances,
the directors did not view the potential for realization of economies of scale
as the Fund's assets grow to be a material factor in their deliberations. The
directors noted that if the Fund's net assets were to increase materially as a
result of, e.g., an acquisition or rights offering, they would review whether
potential economies of scale would be realized by the Adviser.
54 o ACM MANAGED DOLLAR INCOME FUND
SUMMARY OF GENERAL INFORMATION
Shareholder Information
The daily net asset value of the Fund's shares is available from the Fund's
Transfer Agent by calling (800) 219-4218. The Fund also distributes its daily
net asset value to various financial publications or independent organizations
such as Lipper, Inc., Morningstar, Inc. and Bloomberg. The Fund's NYSE trading
symbol is "ADF." Weekly comparative net asset value (NAV) and market price
information about the Fund is published each Monday in The Wall Street Journal,
each Sunday in The New York Times and each Saturday in Barron's and other
newspapers in a table called "Closed-End Funds."
Information Regarding New or Amended Investment Policies
The Fund's Board of Directors recently approved a broader investment policy
that permits the Fund to invest in other investment companies to the full
extent permitted by the Investment Company Act of 1940 (the "1940 Act") and the
rules thereunder. The Board of Directors also approved the Fund's investments
of uninvested cash balances in an affiliated money market fund as permitted by
Rule 12d1-1 under the 1940 Act.
Dividend Reinvestment Plan
Pursuant to the Fund's Dividend Reinvestment Plan shareholders whose shares are
registered in their own names may elect to have all distributions reinvested
automatically in additional shares of the Fund by ComputerShare Trust Company,
N.A., as agent under the Plan. Shareholders whose shares are held in the name
of a broker or nominee should contact the broker or nominee for details. All
distributions to investors who elect not to participate in the Plan will be
paid by check mailed directly to the record holder by or under the direction of
ComputerShare Trust Company, N.A. For questions concerning Shareholder account
information, or if you would like a brochure describing the Dividend
Reinvestment Plan, please call ComputerShare Trust Company, N.A. at (800)
219-4218.
ACM MANAGED DOLLAR INCOME FUND o 55
THIS PAGE IS NOT PART OF THE SHAREHOLDER REPORT OR THE FINANCIAL STATEMENTS
ALLIANCEBERNSTEIN FAMILY OF FUNDS
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We also offer Exchange Reserves,** which serves as the money market fund
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You should consider the investment objectives, risks, charges and expenses of
any AllianceBernstein fund/portfolio carefully before investing. For free
copies of our prospectuses, which contain this and other information, visit us
online at www.alliancebernstein.com or contact your financial advisor. Please
read the prospectus carefully before investing.
* Prior to January 26, 2007, AllianceBernstein Global High Income Fund was
named Alliance World Dollar Government Fund II and AllianceBernstein Income
Fund was named ACM Income Fund. Prior to March 1, 2007, Global Real Estate
Investment Fund was named Real Estate Investment Fund. Prior to May 18, 2007,
AllianceBernstein National Municipal Income Fund was named National Municipal
Income Fund.
** An investment in the Fund is not a deposit in a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. Although the Fund seeks to preserve the value of your investment at
$1.00 per share, it is possible to lose money by investing in the Fund.
56 o ACM MANAGED DOLLAR INCOME FUND
Privacy Notice
AllianceBernstein, the AllianceBernstein Family of Funds and AllianceBernstein
Investments, Inc. (collectively, "AllianceBernstein" or "we") understand the
importance of maintaining the confidentiality of our customers' nonpublic
personal information. In order to provide financial products and services to
our customers efficiently and accurately, we may collect nonpublic personal
information about our customers from the following sources: (1) information we
receive from account documentation, including applications or other forms
(which may include information such as a customer's name, address, social
security number, assets and income) and (2) information about our customers'
transactions with us, our affiliates and others (including information such as
a customer's account balances and account activity).
It is our policy not to disclose nonpublic personal information about our
customers (or former customers) except to our affiliates, or to others as
permitted or required by law. From time to time, AllianceBernstein may disclose
nonpublic personal information that we collect about our customers (or former
customers), as described above, to non-affiliated third party providers,
including those that perform processing or servicing functions and those that
provide marketing services for us or on our behalf pursuant to a joint
marketing agreement that requires the third party provider to adhere to
AllianceBernstein's privacy policy. We have policies and procedures to
safeguard nonpublic personal information about our customers (or former
customers) which include: (1) restricting access to such nonpublic personal
information and (2) maintaining physical, electronic and procedural safeguards
that comply with federal standards to safeguard such nonpublic personal
information.
ACM MANAGED DOLLAR INCOME FUND
1345 Avenue of the Americas
New York, NY 10105
(800) 221-5672
[LOGO]
ALLIANCEBERNSTEIN
INVESTMENTS
ACMV-0152-0307
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. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable when filing a semi-annual report to shareholders.
ITEM 9. 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 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have been no material changes to the procedures by which shareholders
may recommend nominees to the Fund's Board of Directors since the Fund last
provided disclosure in response to this item.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive officer and principal financial
officer have concluded that the registrant's disclosure controls and procedures
(as defined in Rule 30a-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 changes in the registrant's internal controls over financial
reporting that occurred during the second fiscal quarter of the period that has
materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
ITEM 12. EXHIBITS.
The following exhibits are attached to this Form N-CSR:
EXHIBIT NO. DESCRIPTION OF EXHIBIT
---------- ----------------------
12 (b) (1) Certification of Principal Executive Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
12 (b) (2) Certification of Principal Financial Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
12 (c) Certification of Principal Executive Officer and Principal
Financial Officer Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant): ACM Managed Dollar Income Fund, Inc.
By: /s/ Marc O. Mayer
-----------------
Marc O. Mayer
President
Date: May 30, 2007
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 30, 2007
By: /s/ Joseph J. Mantineo
----------------------
Joseph J. Mantineo
Treasurer and Chief Financial Officer
Date: May 30, 2007