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: 811-05207
ACM 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)
Edmund P. Bergan, Jr.
Alliance Capital Management, L.P.
1345 Avenue of the Americas
New York, New York 10105
(Name and address of agent for service)
Registrant's telephone number, including area code: (800) 221-5672
Date of fiscal year end: December 31, 2003
Date of reporting period: June 30, 2003
ITEM 1. REPORTS TO STOCKHOLDERS.
[LOGO] AllianceBernstein(SM)
Investment Research and Management
ACM Income Fund
Semi-Annual Report--June 30, 2003
Investment Products Offered
===================================
o Are Not FDIC Insured
o May Lose Value
o Are Not Bank Guaranteed
===================================
AllianceBernstein Investment Research and Management, Inc., the principal
underwriter of the AllianceBernstein mutual funds and an affiliate of Alliance
Capital Management L.P., the manager of the funds, is a member of the NASD.
August 12, 2003
Semi-Annual Report
This report provides management's discussion of fund performance for ACM Income
Fund (the "Fund") for the semi-annual reporting period ended June 30, 2003.
Investment Objectives and Policies
This closed-end fund is designed to provide high current income consistent with
the preservation of capital. The Fund invests principally in U.S. government
obligations. The Fund may also invest a portion of its assets in other fixed
income securities, including those issued by foreign governments. Additionally,
the Fund may utilize other investment instruments, including options and futures
and employs leverage.
Investment Performance
The following table shows how the Fund performed over the past six- and 12-month
periods ended June 30, 2003. For comparison, we have included the performance of
the Fund's benchmark, the Lehman Brothers (LB) Aggregate Bond Index.
INVESTMENT RESULTS*
Periods Ended June 30, 2003
=============================
Returns
=============================
6 Months 12 Months
--------------------------------------------------------------------------------
ACM Income
Fund (NAV) 15.30% 35.46%
--------------------------------------------------------------------------------
Lehman Brothers
Aggregate
Bond Index 3.93% 10.40%
--------------------------------------------------------------------------------
* The Fund's investment results are for the periods shown and are based on
the net asset value (NAV) of the Fund as of June 30, 2003. All fees
and expenses related to the operation of the Fund have been deducted.
Returns for the Fund include the reinvestment of any distributions paid
during each period. Past performance is no guarantee of future results.
The unmanaged Lehman Brothers (LB) Aggregate Bond Index is composed of the
LB Mortgage-Backed Securities Index, the LB Asset-Backed Securities Index and
the LB Government/Credit Bond Index. It includes Treasury, agency and
corporate bond issues, as well as mortgage-backed securities. The index does
not reflect fees and expenses. An investor cannot invest directly in an
index, and its results are not indicative of any particular investment,
including ACM Income Fund.
The Fund posted strong returns and significantly outperformed its benchmark, the
LB Aggregate Bond Index, for both the six- and 12-month periods ended June 30,
2003. The Fund's high yield and emerging market allocation, which outperformed
the traditional fixed income sectors within the index, contributed to its
outperformance. In addition, the Fund's use of leverage also contributed to
outperformance.
Within the emerging market sector, the Fund's holdings in Brazil and Russia
materially helped performance, as both countries performed in the top tier of
that asset class. Russia continued to show strong economic numbers, reflecting
in part reduced debt, an increase in the budget surplus and strong industrial
production. Brazilian debt performed strongly, in response to tight fiscal
policy and positive initiatives including tax and social security
-------------------------------------------------------------------------------
ACM INCOME FUND o 1
reforms. Within the high yield sector, both the Fund's sector allocation and
security selection added to relative performance.
Market Review and Investment Strategy
Fixed income securities posted solid returns for the semi-annual reporting
period in an environment of a stagnant economic recovery and uncertainty arising
from the Iraqi conflict. Treasury yields reached 45-year record lows by
mid-June, as worries about a weak economy and the potential for deflation
filtered through the marketplace. However, by the end of the reporting period,
we saw a swift end to the war, the avoidance of a SARS epidemic and increased
speculation that the economy would turn. Equity markets began to rebound, and
credit sectors within the fixed income markets performed strongly. With
government rates so low, the market saw increased demand for higher yielding
asset classes which benefited both the emerging debt and high yield markets.
For the period under review, the emerging market debt class, as measured by the
J.P. Morgan Emerging Markets Bond Index Plus, returned a strong 19.47%. Latin
countries outperformed non-Latin regions, returning 22.62% and 15.30%,
respectively. Top performing countries were Brazil, Ecuador, Argentina and
Russia, while Turkey, Poland, Morocco and Bulgaria lagged. All emerging market
debt countries, however, posted positive returns for the period.
The high yield market, as measured by the Credit Suisse First Boston High Yield
Index (Developed Countries Only) returned 17.26%. Technicals helped the high
yield market, as inflows into high yield mutual funds exceeded $22 billion--more
than double the amount that flowed into high yield mutual funds in all of 2002.
New issue supply was also robust, running 50% ahead of last year, as issuers
moved to refinance their debt. The default rate continued to decline during the
period from its highs of early 2002, and the downgrade-upgrade ratio continued
to show improvement.
During the semi-annual reporting period, we shortened the duration of the Fund's
government holdings, as yields reached multi-decade lows and our expectations of
a potential market sell-off increased. Shorter duration bonds are generally less
sensitive to changes in interest rate levels. Within the emerging market sector,
we maintained most of the Fund's holdings throughout the period, with a
continued focus on Russia and Brazil, both of which performed well during the
period. Within the high yield sector, we modestly reduced the Fund's allocation
as spreads tightened, after posting extraordinary gains in the last six months.
--------------------------------------------------------------------------------
2 o ACM INCOME FUND
PORTFOLIO SUMMARY
June 30, 2003 (unaudited)
INCEPTION DATE
8/28/87
PORTFOLIO STATISTICS
Net Assets ($mil): 1,958.5
SECURITY TYPE
65.6% Treasury & Government Agency
22.7% Sovereign (Pie Chart Omitted)
10.4% Corporate
0.6% Preferred Stock
0.7% Short-Term
COUNTRY BREAKDOWN
75.5% United States
6.8% Russia
6.1% Brazil
3.0% Turkey
2.7% Mexico (Pie Chart Omitted)
1.3% Colombia
0.7% Netherlands
0.7% Venezuela
0.5% Canada
0.5% Philippines
2.2% Other
All data as of June 30, 2003. The Fund's security type and country breakdown are
expressed as a percentage of total investments and may vary over time. "Other"
represents less than 0.5% weightings in the following countries: Ecuador, Peru,
Uruguay, Panama, United Kingdom, France, Luxembourg, and Ukraine.
--------------------------------------------------------------------------------
ACM INCOME FUND o 3
PORTFOLIO OF INVESTMENTS
June 30, 2003 (unaudited)
Principal
Amount
(000) U.S. $ Value
--------------------------------------------------------------------------------
U.S. GOVERNMENT AND AGENCY
OBLIGATIONS-88.0%
U.S. Treasury Bonds-46.9%
3.375%, 4/15/32 (TIPS)(a) ............... $ 97,344 $117,877,040
5.250%, 11/15/28(a) ..................... 60,000 65,332,080
11.25%, 2/15/15(a)(b) ................... 160,000 272,700,000
12.00%, 8/15/13(a) ...................... 82,000 119,191,510
12.50%, 8/15/14(a) ...................... 70,300 108,462,496
13.25%, 5/15/14(a)(b) ................... 150,000 234,843,750
------------
918,406,876
------------
U.S. Treasury Strips-13.2%
Zero coupon, 5/15/17(a) ................. 260,000 141,194,040
Zero coupon, 11/15/21(a) ................ 285,350 116,623,401
------------
257,817,441
------------
U.S. Treasury Notes-12.9%
2.00%, 5/15/06(a) ....................... 65,000 65,710,970
2.625%, 5/15/08(a) ...................... 85,000 85,803,590
3.625%, 1/15/08(a)(c) ................... 56,889 63,840,153
3.625%, 5/15/13(a)(c) ................... 29,001 29,236,662
3.875%, 2/15/13(a) ...................... 3,030 3,118,888
4.00%, 11/15/12(a) ...................... 4,664 4,854,753
4.375%, 8/15/12(a) ...................... 700 750,778
-------------
253,315,794
-------------
Mortgage Related Securities-11.8%
Federal Home Loan Mortgage
Corporation
4.05%, TBA(a) ........................... 25,000 25,685,500
Federal National Mortgage
Association
5.00%, TBA .............................. 75,000 75,914,100
7.00%, TBA .............................. 100,000 106,406,200
Government National Mortgage
Association
7.50%, 3/15/32(c) .......................... 21,644 23,012,523
-------------
231,018,323
-------------
Resolution Funding Corp.-3.2%
Zero coupon, 10/15/20 ................... 150,000 62,977,500
-------------
Total U.S. Government and Agency
Obligations
(cost $1,573,125,171)..................... 1,723,535,934
-------------
SOVEREIGN DEBT OBLIGATIONS-30.5%
Sovereign Debt Securities-27.8%
Argentina-0.0%
Republic of Argentina, FRN
1.37%, 8/03/12(c)................. 1,041 616,793
-------------
--------------------------------------------------------------------------------
4 o ACM INCOME FUND
Principal
Amount
(000) U.S. $ Value
--------------------------------------------------------------------------------
Belize-0.0%
Republic of Belize
9.50%, 8/15/12(c) .................... $ 350 $ 355,029
-------------
Brazil-6.0%
Republic of Brazil
8.875%, 4/15/24(c) ................ 2,775 2,150,625
9.375%, 4/07/08(c) ................ 850 835,125
10.00%, 1/16/07(c) ................ 3,900 4,017,000
10.125%, 5/15/27(c) ............... 1,150 993,600
11.00%, 1/11/12(c) ................ 12,250 12,145,875
11.00%, 8/17/40(c)(d) ............. 28,149 25,485,845
11.25%, 7/26/07(c) ................ 2,825 2,993,087
11.50%, 3/12/08(c) ................ 200 209,800
12.00%, 4/15/10(c) ................ 14,550 15,204,750
12.75%, 1/15/20(c) ................ 1,575 1,638,000
14.50%, 10/15/09(c) ............... 11,535 13,224,877
Brazilian Real Structured Notes
19.70%, 7/01/03(e) ................ BRL 23,040 10,221,400
Zero Coupon, 2/16/06(e) ........... 141,317 27,373,146
-----------
116,493,130
-----------
Bulgaria-0.0%
Republic of Bulgaria
8.25%, 1/15/15(e) ................. $ 200 236,300
-----------
Colombia-1.8%
Republic of Colombia
8.70%, 2/15/16(c) ................. 400 394,000
9.75%, 4/23/09(c) ................. 150 168,600
10.00%, 1/23/12(c) ................ 415 467,912
10.50%, 7/09/10(c) ................ 650 747,500
10.75%, 1/15/13(c) ................ 2,275 2,659,475
11.75%, 2/25/20(c) ................ 19,950 24,787,875
Columbian Peso Structured Note
15.00%, 3/15/07(e) ...............COP 15,237,183 5,685,600
-----------
34,910,962
-----------
Costa Rica-0.0%
Republic of Costa Rica
8.05%, 1/31/13(e) .................... 225 243,000
-----------
Ecuador-0.6%
Republic of Ecuador
6.00%, 8/15/30(e)(f) .............. 675 405,000
6.00%, 8/15/30(e) ................. 17,000 10,200,000
12.00%, 11/15/12(e) ............... 175 139,387
-----------
10,744,387
-----------
El Salvador-0.0%
Republic of El Salvador
7.75%, 1/24/23(e) .................... 300 309,000
-------------
--------------------------------------------------------------------------------
ACM INCOME FUND o 5
--------------------------------------------------------------------------------
Principal
Amount
(000) U.S. $ Value
--------------------------------------------------------------------------------
Mexico-3.6%
Mexican Bonos
9.00%, 12/20/12, Series MI10(c) ... MXP 117,939 $ 11,786,574
9.50%, 3/08/07 Series M5L(c) ...... 328,855 34,362,177
10.50%, 7/14/11(c) ................ 115,276 12,482,584
United Mexican States
6.625%, 3/03/15(c) ................ $ 4,675 4,990,562
11.375%, 9/15/16(c) ............... 4,705 6,834,012
---------------
70,455,909
---------------
Panama-0.4%
Republic of Panama
9.375%, 7/23/12(c) ................ 2,000 2,310,000
9.625%, 2/08/11(c) ................ 450 519,750
10.75%, 5/15/20(c) ................ 4,025 4,980,937
---------------
7,810,687
---------------
Peru-0.5%
Republic of Peru
9.125%, 1/15/08(c) ................ 3,825 4,169,250
9.125%, 2/21/12(c) ................ 5,225 5,592,056
---------------
9,761,306
---------------
Philippines-0.7%
Republic of Philippines
9.00%, 2/15/13(c) ................. 5,925 6,369,375
9.875%, 1/15/19(c) ................ 4,750 5,244,000
10.625%, 3/16/25(c) ............... 1,425 1,669,387
----------------
13,282,762
---------------
Russia-9.1%
Russian Federation
5.00%, 3/31/30(e)(f) .............. 172,555 167,486,197
Russian Ministry of Finance
3.00%, 5/14/06(c) ................. 10,330 10,059,354
3.00%, 5/14/08(c) ................. 600 546,720
---------------
178,092,271
---------------
South Africa-0.0%
Republic of South Africa
7.375%, 4/25/12(c) ................... 750 862,500
---------------
Turkey-4.0%
Republic of Turkey
11.00%, 1/14/13(c) ................ 500 504,500
11.875%, 1/15/30(c) ............... 425 439,450
12.375%, 6/15/09(c) ............... 200 213,800
Turkish Lira Structured Notes
Zero Coupon, 10/09/03(e) ..........TRL 36,053,835,041 23,245,050
Zero Coupon, 12/04/03(e) .......... 49,061,686,005 29,375,040
Zero Coupon, 1/29/04(e) ........... 42,574,092,239 24,364,935
---------------
78,142,775
---------------
--------------------------------------------------------------------------------
6 o ACM INCOME FUND
Principal
Amount
(000) U.S. $ Value
--------------------------------------------------------------------------------
Ukraine-0.1%
Republic of Ukraine
7.65%, 6/11/13(e) ................. $ 500 $ 497,500
11.00%, 3/15/07(c) ................ 1,169 1,283,055
------------
1,780,555
------------
Uruguay-0.5%
Republic of Uruguay
7.25%, 2/15/11(c) ................. 935 752,675
7.50%, 3/15/15(c) ................. 4,526 3,507,844
7.875%, 1/15/33(c)(g) ............. 8,130 5,508,075
------------
9,768,594
------------
Venezuela-0.5%
Republic of Venezuela
9.25%, 9/15/27(c) .................... 13,375 9,864,063
------------
Total Sovereign Debt Securities
(cost $397,765,114) ............... 543,730,023
------------
Non-Collateralized Brady Bonds-2.7%
Brazil-2.2%
Republic of Brazil
C-Bonds
8.00%, 4/15/14(c) .................... 48,949 43,015,984
DCB FRN
2.188%, 4/15/12(c) ................... 425 319,673
------------
43,335,657
------------
Peru-0.0%
Republic of Peru FLIRB
4.50%, 3/07/17(c)(f) ................. 50 39,375
Republic of Peru
5.00%, 3/07/17(c) .................... 288 244,800
------------
284,175
------------
Venezuela-0.5%
Republic of Venezuela
DCB FRN
1.875%, 12/18/07(c) .................. 10,929 8,742,857
------------
Total Non-Collateralized Brady
Bonds
(cost $44,669,025) ................. 52,362,689
------------
Total Sovereign Debt Obligations
(cost $442,434,139) ................ 596,092,712
------------
CORPORATE DEBT OBLIGATIONS-13.9%
Australia-0.0%
WMC Finance USA
5.125%, 5/15/13(e) ................... 500 517,394
------------
--------------------------------------------------------------------------------
ACM INCOME FUND o 7
Principal
Amount
(000) U.S. $ Value
--------------------------------------------------------------------------------
Brazil-0.0%
Banco Nac De Desen Econo
6.50%, 6/15/06(e) ............. $ 150 $ 152,625
Petrobras International Finance
9.875%, 5/09/08(c) ............ 300 332,250
Unibanco Uniao De Banco
9.375%, 4/30/12(e)(f) ......... 225 224,750
-----------
709,625
-----------
Canada-0.6%
Doman Industries
12.00%, 7/01/04(c) ......... 3,000 3,090,000
Fairfax Financial Holdings
7.375%, 4/15/18(c) ......... 4,500 3,960,000
8.30%, 4/15/26(c) .......... 5,000 4,450,000
Falconbridge Ltd. .............
5.375%, 6/01/15(c) ............ 450 431,822
-----------
11,931,822
-----------
France-0.1%
Crown Euro Holdings SA
10.875%, 3/01/13(e) ........... 2,105 2,304,975
-----------
Luxembourg-0.1%
Mobile Telesystems Finance S.A
9.75%, 1/30/08(e) ............. 2,110 2,299,900
-----------
Malaysia-0.0%
Petronas Capital Ltd. .........
7.875%, 5/22/22(e) ............ 500 594,995
-----------
Netherlands-0.9%
Hurricane Finance BV
9.625%, 2/12/10(e) ......... 200 217,000
Kazkommerts International BV
8.50%, 4/16/13(e) .......... 875 872,813
Mobifon Holdings BV
12.50%, 7/31/10(e) ......... 5,205 5,439,225
TPSA Finance BV
7.75%, 12/10/08(e) ......... 10,000 11,600,000
-----------
18,129,038
-----------
Russia-0.1%
Gazprom OAO
9.625%, 3/01/13(e) ......... 450 497,250
Tyumen Oil
11.00%, 11/06/07(c) ........ 225 261,685
11.00%, 11/06/07(e) ........ 200 232,250
-----------
991,185
-----------
--------------------------------------------------------------------------------
8 o ACM INCOME FUND
Principal
Amount
(000) U.S. $ Value
--------------------------------------------------------------------------------
United Kingdom-0.5%
Avecia Group PLC
11.00%, 7/01/09(c).............. $ 7,500 $ 6,825,000
British Telecommunications PLC
8.125%, 12/15/10(c)(f).......... 1,500 1,900,317
---------------
8,725,317
---------------
United States-11.6%
Alabama Power Co. Series S
5.875%, 12/01/22(c)............... 900 968,482
Allied Waste North America, Inc.
Series B
10.00%, 8/01/09................... 8,000 8,540,000
Anchor Glass Container
11.00%, 2/15/13(e)................ 5,025 5,514,938
Anthem, Inc.
6.80%, 8/01/12(c)................. 4,000 4,677,952
AOL Time Warner, Inc.
7.70%, 5/01/32(c)................. 167 195,703
Berry Plastics
10.75%, 7/15/12(c)................ 6,820 7,536,100
Charter Communications Holdings
Zero coupon, 5/15/11(c)(h)..... 10,000 5,100,000
10.75%, 10/01/09(c)............ 4,655 3,630,900
Citgo Petroleum Corp.
11.375%, 2/01/11(e)............... 10,450 11,704,000
CIT Group, Inc.
7.75%, 4/02/12.................... 2,000 2,388,622
Citigroup, Inc.
5.625%, 8/27/12................... 2,000 2,207,464
Clear Channel Communications
5.75%, 1/15/13(c)................. 220 238,461
Comerica Bank
8.375%, 7/15/24................... 2,000 2,414,332
Conocophillips
4.75%, 10/15/12(c)................ 1,525 1,614,702
Dominion Resource Capital Trust III
8.40%, 1/15/31(c)................. 500 629,657
EOP Operating LP
5.875%, 1/15/13(c)................ 500 540,053
Finova Group, Inc.
7.50%, 11/15/09................... 17,500 7,700,000
First Energy Corp. Series C
7.375%, 11/15/31(c)............... 1,020 1,146,780
Ford Motor Company
7.45%, 7/16/31(c)................. 1,200 1,102,327
Freeport-McMoran C&G
10.125%, 2/01/10(c)............... 500 560,000
General Motors Acceptance Corp.
8.00%, 11/01/31(c)................ 99 97,403
General Motors Corp.
8.375%, 7/15/33(c)................ 1,000 986,200
--------------------------------------------------------------------------------
ACM INCOME FUND o 9
Principal
Amount
(000) U.S. $ Value
--------------------------------------------------------------------------------
Goldman Sachs Group, Inc.
5.70%, 9/01/12................. $ 2,900 $ 3,191,772
HCA Inc.
6.25%, 2/15/13(c).............. 250 255,319
7.58%, 9/15/25(c).............. 630 657,872
7.69%, 6/15/25(c).............. 355 370,212
Household Finance Corp.
6.75%, 5/15/11(c).............. 1,500 1,744,771
Huntsman ICI Chemicals LLC
10.125%, 7/01/09(c)............ 7,500 7,237,500
J.P. Morgan Chase & Co.
5.75%, 1/02/13(c).............. 2,100 2,300,136
6.625%, 3/15/12................ 1,400 1,617,867
Lyondell Chemical Co.
10.875%, 5/01/09(c)............ 7,990 7,470,650
Meristar Hospitality Operations
Finance
10.50%, 6/15/09(c)............. 4,120 4,233,300
Merrill Lynch & Co.
6.00%, 2/17/09(c).............. 100 112,552
Nextel Communications
10.65%, 9/15/07(c)(f).......... 7,900 8,196,250
Nextel Partners, Inc.
12.50%, 11/15/09(c)(f)......... 8,500 9,605,000
Northrop Grumman Corp.
7.75%, 2/15/31(c).............. 2,950 3,796,523
On Semiconductor Corp.
12.00%, 3/15/10(c)............. 5,005 5,580,575
Pemex Project
9.125%, 10/13/10(c)............ 500 606,250
Pliant Corp.
13.00%, 6/01/10(c)............. 7,625 7,205,625
Progress Energy, Inc.
6.85%, 4/15/12(c).............. 600 691,901
Qwest Services Corp.
14.00%, 12/15/14(e)............ 19,907 23,191,655
Resolution Performance
13.50%, 11/15/10(c)............ 6,575 6,607,875
Rite Aid Corp.
11.25%, 7/01/08(c)............. 5,220 5,637,600
Rural Cellular Corp.
9.75%, 1/15/10................. 13,000 11,570,000
Six Flags, Inc.
9.75%, 4/15/13(e).............. 3,505 3,487,475
Sprint Capital Corp.
6.875%, 11/15/28(c)............ 7,000 7,047,894
8.75%, 3/15/32(c).............. 3,000 3,603,777
Swift & Co.
10.125%, 10/01/09(e)........... 6,580 6,876,100
Trump Holdings & Funding
11.625%, 3/15/10(e)............ 5,085 4,881,600
--------------------------------------------------------------------------------
10 o ACM INCOME FUND
Shares or
Principal
Amount
(000) U.S. $ Value
--------------------------------------------------------------------------------
TRW Automotive Inc.
11.00%, 2/15/13(e)................ $ 2,650 $ 2,901,750
Universal City Development
11.75%, 4/01/10(e)................ 2,525 2,783,813
Venetian Casino
11.00%, 6/15/10(c)................ 6,000 6,795,000
Verizon Global Funding Corp.
7.375%, 9/01/12(c)............. 1,440 1,760,026
7.75%, 6/15/32................. 1,215 1,552,159
Williams Cos Inc. Series A
7.50%, 1/15/31(c).............. 4,025 3,823,750
---------------
226,888,625
---------------
Total Corporate Debt Obligations
(cost $253,623,995)............ 273,092,876
---------------
PREFERRED STOCKS-0.7%
CSC Holding, Inc.(c)
(cost $7,056,176).............. 140,829 14,473,152
---------------
WARRANTS-0.0%
Central Bank of Nigeria
Warrants, expiring 11/15/20(i).... 4,500 -0-
Republic of Venezuela
Warrants, expiring 4/15/20(i)..... 1,785 -0-
---------------
Total Warrants
(cost $0)...................... -0-
---------------
SHORT-TERM INVESTMENTS-0.9%
Repurchase Agreement-0.7%
Deutsche Bank Securities Inc.(c)
1.00%, dated 6/30/03, due
7/01/03 in the amount of
$13,100,364 (collaterized by
$13,790,000 FHLMC, Zero
Coupon due 12/31/03 value--
$13,789,504)
(cost $13,100,000)................ 13,100 13,100,000
---------------
U.S. Treasury Obligation-0.2%
U.S. Treasury Bills
Zero Coupon, 9/18/03(j)
(cost $4,991,222)................. 5,000 4,991,222
---------------
Total Short-Term Investments
(cost $18,091,222)................ 18,091,222
---------------
TOTAL INVESTMENTS
(cost $2,294,330,703).......... 2,625,285,896
Other assets less liabilities*-(34.0%) (666,787,152)
---------------
NET ASSETS-100.0%................. $ 1,958,498,744
---------------
--------------------------------------------------------------------------------
ACM INCOME FUND o 11
SECURITY LENDING INFORMATION
Includes cash collateral received of $49,718,580 for securities on loan as of
June 30, 2003 (see Note E). The lending agent invested the cash collateral in a
short-term investment as follows:
Percent
Current U.S. $ of Net
Yield Shares Value Assets
--- ---- ---- ---
UBS Private Money
Market Fund LLC 1.15% 49,718,580 $49,718,580 2.5%
FINANCIAL FUTURES CONTRACTS SOLD (see Note C)
Value at
Number of Expiration Original June 30, Unrealized
Type Contracts Month Value 2003 Appreciation
--------------- ----------- ------------ --------- ---------- -------------
U.S.Treasury Note September
5 Year Futures 4,665 2003 $538,633,079 $537,058,125 $1,574,954
FORWARD EXCHANGE CURRENCY CONTRACTS (see Note C)
U.S. $
Contract Value on U.S. $ Unrealized
Amount Origination Current Appreciation/
(000) Date Value (Depreciation)
----------------------------------------------------------------------------------
Buy Contracts
Canadian Dollar,
settling 8/13/03..... 27,000 $19,986,971 $19,861,720 $(125,251)
Euro,
settling 8/27/03..... 18,089 20,846,026 20,771,174 (74,852)
Mexican Peso,
settling 7/22/03..... 8,422 794,944 805,829 10,885
Sale Contracts
Canadian Dollar,
settling 8/13/03..... 27,000 20,006,520 19,861,720 144,800
Mexican Peso,
settling 7/22/03..... 585,714 55,410,234 55,907,196 (496,962)
----------
$(541,380)
----------
CALL OPTIONS WRITTEN (see Note C)
Contracts(k)
(000) U.S. $ Value
--------------------------------------------------------------------------------
Federal Republic of Brazil,
11.00%, 8/17/40
expiring July '03 @ $90.25
(premium received $57,000)................ 2,000 $ (74,000)
--------------------------------------------------------------------------------
12 o ACM INCOME FUND
CREDIT DEFAULT SWAP CONTRACTS (see Note C)
Notional Unrealized
Amount Interest Termination Appreciation/
(000) Rate Date (Depreciation)
--------------------------------------------------------------------------------
Buy Contracts:
Deutsche Bank
Federal Republic of Brazil
12.25%, 3/06/30........... $ 2,900 17.00% 2/06/05 $(508,080)
Deutsche Bank
Republic of the Phillipines
9.00%, 2/15/03............ 550 6.10 2/14/08 (32,945)
Salomon Brothers, Inc.
Republic of Venezuela
LIBOR# 0.875%, 12/18/07... 290 20.50 2/11/06 (73,422)
Salomon Brothers, Inc.
Republic of Venezuela
1.875%, 12/18/07.......... 290 21.25 2/11/05 (62,052)
Salomon Brothers, Inc.
Republic of Venezuela
1.875%, 12/18/07.......... 290 19.25 2/11/08 (88,238)
Salomon Brothers, Inc.
Republic of Venezuela
1.875%, 12/18/07.......... 290 20.00 2/11/07 (82,914)
Salomon Brothers, Inc.
Republic of Venezuela
1.875%, 12/18/07.......... 290 21.00 2/11/04 (40,716)
Sell Contracts:
Deutsche Bank
Federal Republic of Brazil
12.25%, 3/06/30........... 1,000 14.50 3/08/08 204,100
Deutsche Bank
Federal Republic of Brazil
12.25%, 3/06/30........... 2,900 17.85 2/06/08 936,990
Deutsche Bank
Republic of Romania
8.50%, 5/08/12............ 1,000 3.55 4/03/10 5,200
JP Morgan Chase
Russian Federation
5.00%, 3/31/30............ 1,000 3.20 6/25/13 (11,200)
JP Morgan Chase
Russian Federation
5.00%, 3/31/30............ 1,000 3.20 6/26/13 (11,200)
------------
$235,523
------------
--------------------------------------------------------------------------------
ACM INCOME FUND o 13
REVERSE REPURCHASE AGREEMENTS (see Note C)
Interest
Broker Maturity Rate Amount
-------- -------- -------- ------------
Greenwich Capital Markets July 23, 2003 0.91% $ 10,155,257
Greenwich Capital Markets July 28, 2003 1.02 107,715,552
------------
$117,870,809
------------
See footnote summary on page 15.
--------------------------------------------------------------------------------
14 o ACM INCOME FUND
(a) Positions, or portion thereof, with an aggregate market value of
$1,310,202,461 have been segregated to collateralize the loan outstanding.
(b) Positions, or portion thereof, with an aggregate market value of
$119,820,000 have been segregated to collateralize reverse repurchase
agreements.
(c) Positions, or portion thereof, with an aggregate market value of
$511,691,580 have been segregated to collateralize open forward exchange
currency contracts.
(d) Position, or portion thereof, with an aggregate market value of $1,810,000
has been segregated to collaterize the call option written.
(e) Securities exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At June 30, 2003,
these securities amounted to $386,076,063 or 19.7% of net assets.
(f) Coupon increases periodically based upon a predetermined schedule. Stated
interest rate in effect at June 30, 2003.
(g) PIK (Paid-in-kind) preferred quarterly stock payments.
(h) Indicates a security that has a zero coupon that remains in effect until a
predetermined date at which time the stated coupon rate becomes effective
until final maturity.
(i) Non-income producing security.
(j) Position with a market value of $4,991,222 has been segregated to
collateralize margin requirements for the open futures contracts.
(k) One contract relates to principal amount of $1.
Currency Abbreviations
BRL -Brazilian Real
COP -Colombian Peso
DCB -Debt Conversion Bonds
MXP -Mexican Peso
TRL -Turkish Lira
Glossary of Terms:
FHLMC -Federal Home Loan Mortgage Corporation
FLIRB -Front Loaded Interest Rate Bond
FRN -Floating Rate Note
PIK -Payment In Kind
TBA -(To Be Assigned)-Securities are purchased on a forward commitment
with an approximate principal amount (generally +/- 1.0%) and no
definite maturity date. The actual principal amount and maturity
date will be determined upon settlement when the specific mortgage
pools are assigned.
TIPS -Treasury Inflation Protected Security
See notes to financial statements.
--------------------------------------------------------------------------------
ACM INCOME FUND o 15
STATEMENT OF ASSETS & LIABILITIES
June 30, 2003 (unaudited)
Assets
Investments in securities,
at value (cost $2,281,230,703) .................... $2,612,185,896(a)
Repurchase agreement, at value (cost $13,100,000).... 13,100,000
Receivable for investment securities sold............ 132,841,324
Collateral held for securities loaned................ 49,718,580
Interest and dividends receivable.................... 38,218,485
Net unrealized appreciation on credit default
swap contracts.................................... 235,523
Prepaid expenses..................................... 134,971
---------------
Total assets......................................... 2,846,434,779
---------------
Liabilities
Outstanding option written, at value
(premium received $57,000)........................... 74,000
Due to custodian..................................... 2,653,951
Loan payable......................................... 400,000,000
Payable for investment securities purchased.......... 313,120,093
Reverse repurchase agreements........................ 117,870,809
Payable for collateral received on securities loaned. 49,718,580
Advisory fee payable................................. 1,297,721
Variation margin on futures contracts................ 1,239,141
Loan interest payable................................ 731,971
Net unrealized depreciation on forward exchange
currency contracts................................ 541,380
Administrative fee payable........................... 232,659
Accrued expenses..................................... 455,730
---------------
Total liabilities.................................... 887,936,035
---------------
Net Assets........................................... $ 1,958,498,744
---------------
Composition of Net Assets
Capital stock, at par................................ $ 2,265,627
Additional paid-in capital........................... 2,115,378,095
Distributions in excess of net investment income..... (32,336,049)
Accumulated net realized loss on investments,
option contracts and foreign currency
transactions...................................... (459,140,769)
Net unrealized appreciation of investments and
foreign currency denominated assets and
liabilities....................................... 332,331,840
---------------
$ 1,958,498,744
---------------
Net Asset Value Per Share
(based on 226,562,702 shares outstanding)............ $8.64
-----
(a) Includes securities on loan with a value of $47,569,560 (see Note E).
See notes to financial statements.
--------------------------------------------------------------------------------
16 o ACM INCOME FUND
STATEMENT OF OPERATIONS
Six Months Ended June 30, 2003 (unaudited)
Investment Income
Interest............................... $ 105,533,353
Dividends.............................. 794,230 $ 106,327,583
---------------
Expenses
Advisory fee........................... 7,987,549
Administrative fee..................... 1,403,888
Custodian.............................. 269,834
Printing............................... 224,174
Transfer agency........................ 182,832
Registration fee....................... 114,381
Audit and legal........................ 66,183
Directors' fees........................ 19,339
Miscellaneous.......................... 58,055
---------------
Total expenses before interest......... 10,326,235
Interest expense....................... 5,823,970
---------------
Total expenses......................... 16,150,205
---------------
Net investment income.................. 90,177,378
---------------
Realized and Unrealized Gain (Loss) on
Investment and Foreign Currency
Transactions Net realized gain (loss) on:
Investment transactions............. (1,722,488)
Written options..................... 265,163
Foreign currency transactions....... 2,806,322
Net change in unrealized
appreciation/depreciation of:
Investments......................... 170,079,262
Swap contracts ..................... 235,523
Written options..................... (24,000)
Futures contracts................... 8,478,773
Foreign currency denominated
assets and liabilities............ (1,114,141)
---------------
Net gain on investment and
foreign currency transactions....... 179,004,414
---------------
Net Increase in Net Assets
from Operations..................... $ 269,181,792
---------------
See notes to financial statements.
--------------------------------------------------------------------------------
ACM INCOME FUND o 17
STATEMENT OF CHANGES IN NET ASSETS
Six Months
Ended Year Ended
June 30, 2003 December 31,
(unaudited) 2002
--------------- ---------------
Increase (Decrease) in Net Assets
from Operations
Net investment income.................. $ 90,177,378 $ 200,052,459
Net realized gain (loss) on investment
and foreign currency transactions... 1,348,997 (120,290,580)
Net change in unrealized
appreciation/depreciation of
investments and foreign currency
denominated assets and liabilities..... 177,655,417 136,284,119
--------------- ---------------
Net increase in net assets
from operations..................... 269,181,792 216,045,998
Dividends and Distributions
to Shareholders from:
Net investment income.................. (102,865,690) (191,884,640)
Tax return of capital.................. -0- (15,245,936)
Common Stock Transactions
Reinvestment of dividends resulting in
issuance of Common Stock............ 7,018,649 11,353,634
--------------- ---------------
Total increase......................... 173,334,751 20,269,056
Net Assets
Beginning of period.................... 1,785,163,993 1,764,894,937
--------------- ---------------
End of period.......................... $ 1,958,498,744 $ 1,785,163,993
--------------- ---------------
See notes to financial statements.
--------------------------------------------------------------------------------
18 o ACM INCOME FUND
STATEMENT OF CASH FLOWS
Six Months Ended June 30, 2003 (unaudited)
Increase (Decrease) in Cash from
Operating Activities:
Interest and dividends received........ $ 83,681,643
Interest expense paid.................. (5,437,690)
Operating expenses paid................ (10,388,540)
---------------
Net increase in cash from
operating activities............... $ 67,855,413
Investing Activities:
Purchases of long-term investments..... (3,568,734,109)
Proceeds from disposition of
long-term investments.................. 3,564,224,881
Proceeds of short-term
investments--net.................... 351,799,576
Premiums paid on written options....... (38,000)
Variation margin received on
futures contracts................... 10,113,227
---------------
Net increase in cash from
investing activities................ 357,365,575
Financing Activities*:
Cash dividends paid.................... (95,847,041)
Due to Custodian....................... 2,476,240
Proceeds from reverse repurchase
agreements.......................... (331,850,187)
---------------
Net decrease in cash from
financing activities................ (425,220,988)
---------------
Net decrease in cash.................... -0-
Cash at beginning of period............. -0-
---------------
Cash at end of period................... $ -0-
---------------
Reconciliation of Net Increase in
Net Assets from Operations to
Net Increase in Cash from
Operating Activities:
Net increase in net assets from
operations.......................... $ 269,181,792
Adjustments:
Decrease in interest and
dividend receivable................. $ 4,100,601
Accretion of bond discount and
amortization of bond premium........ (26,746,541)
Increase in interest payable........... 386,280
Decrease in accrued expenses........... (62,305)
Net realized gain on investments, options
and foreign currency transactions... (1,348,997)
Net change in unrealized appreciation/
depreciation of investments and
foreign currency denominated assets
and liabilities..................... (177,655,417)
---------------
Total adjustments...................... (201,326,379)
---------------
Net Increase in Cash from Operating
Activities............................. $ 67,855,413
---------------
* Non-cash financing activities not included herein consist of reinvestment of
dividends.
See notes to financial statements.
--------------------------------------------------------------------------------
ACM INCOME FUND o 19
NOTES TO FINANCIAL STATEMENTS
June 30, 2003 (unaudited)
NOTE A
Significant Accounting Policies
ACM Income Fund, Inc. (the "Fund") is registered under the Investment Company
Act of 1940 as a non-diversified, closed-end management investment company. The
financial statements have been prepared in conformity with accounting principles
generally accepted in the United States which require management to make certain
estimates and assumptions that affect the reported amounts of assets and
liabilities in the financial statements and amounts of income and expenses
during the reporting period. Actual results could differ from those estimates.
Additional information about some of the items discussed in these Notes to
Financial Statements is contained in the Fund's Statement of Additional
Information, which is available upon request. The following is a summary of
significant accounting policies followed by the Fund.
1. Security Valuation
In accordance with Pricing Policies adopted by the Board of Directors of the
Fund (the "Pricing Policies") and applicable law, portfolio securities are
valued at current market value or at fair value. The Board of Directors has
delegated to the Adviser, subject to the Board's continuing oversight, certain
responsibilities with respect to the implementation of the Pricing Policies.
Pursuant to the Pricing Policies, securities for which market quotations are
readily available are valued at their current market value. In general, the
market value of these securities is determined as follows:
Securities listed on a national securities exchange or on a foreign securities
exchange are valued at the last sale price at the close of the exchange or
foreign securities exchange. If there has been no sale on such day, the
securities are valued at the mean of the closing bid and asked prices on such
day. If no bid or asked prices are quoted on such day, then the security is
valued in good faith at fair value in accordance with the Pricing Policies.
Securities listed on more than one exchange are valued by reference to the
principal exchange on which the securities are traded; securities not listed on
an exchange but traded on The Nasdaq Stock Market, Inc. ("NASDAQ") are valued in
accordance with the NASDAQ Official Closing Price; listed put or call options
are valued at the last sale price. If there has been no sale on that day, such
securities will be valued at the closing bid prices on that day; open futures
contracts and options thereon are valued using the closing settlement price or,
in the absence of such a price, the most recent quoted bid price. If there are
no quotations available for the day of valuations, the last available closing
settlement price is used; securities traded in the over-the-counter market, (but
excluding securities traded on NASDAQ) are valued at the mean of the current bid
and asked prices as reported by the National Quotation Bureau or other
comparable sources; U.S. Government securities and other debt instruments having
60 days or less remaining until maturity are valued at amortized cost if their
original maturity was 60 days or less, or by amortizing their fair value as of
the 61st day prior to maturity if their
--------------------------------------------------------------------------------
20 o ACM INCOME FUND
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, the
Pricing Policies provide that 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 are valued at fair value in accordance with the Pricing Policies.
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.
3. Investment Income and Investment Transactions
Interest income is accrued daily. Dividend income is recorded on the ex-dividend
date. Investment transactions are accounted for on the date securities are
purchased or sold. Investment gains and losses are determined on the identified
cost basis. The Fund accretes discount as an adjustment to interest income.
Additionally, the Fund amortizes premium on debt securities as adjustments to
interest income for financial statement reporting purposes only.
4. Currency Translation
Assets and liabilities denominated in foreign currencies and commitments under
forward exchange currency contracts are translated into U.S. dollars at the mean
of the quoted bid and asked prices of such currencies against the U.S. dollar.
Purchases and sales of portfolio securities are translated into U.S. dollars at
the rates of exchange prevailing when such securities were acquired or sold.
Income and expenses are translated into U.S. dollars at the rates of exchange
prevailing when accrued.
Net realized gain or loss on foreign currency transactions represents foreign
exchange gains and losses from sales and maturities of foreign fixed income
investments, foreign currency exchange contracts, holding of foreign currencies,
currency gains or losses realized between the trade and settlement dates on
foreign investment transactions, and the difference between the amounts of
dividends, interest and foreign withholding taxes recorded on the Fund's books
and the U.S. dollar equivalent amounts actually received or paid. Net unrealized
currency gains and losses from valuing foreign currency denominated assets and
liabilities at period end exchange rates are reflected as a component of net
unrealized appreciation or depreciation of investments and foreign currency
denominated assets and liabilities.
--------------------------------------------------------------------------------
ACM INCOME FUND o 21
5. 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
accounting principles generally accepted in the United States. To the extent
these differences are permanent, such amounts are reclassified within the
capital accounts based on their federal tax basis treatment; temporary
differences, do not require such reclassification.
6. 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 whether
the value of such securities are sufficient to cover the value of the repurchase
agreements. If the seller defaults and the value of the collateral declines or
if bankruptcy proceedings are commenced with respect to the seller of the
security, realization of collateral by the Fund may be delayed or limited.
NOTE B
Advisory, Administrative Fees and Other Transactions with Affiliates
Under the terms of an investment advisory agreement, the Fund pays Alliance
Capital Management L.P. (the "Adviser") a monthly advisory fee in an amount
equal to the sum of 1/12th of .30 of 1% of the Fund's average weekly net assets
up to $250 million, 1/12th of .25 of 1% of the Fund's average weekly net assets
in excess of $250 million, and 5.25% of the Fund's daily gross income (i.e.,
income other than gains from the sale of securities and foreign currency
transactions or gains realized from options and futures contracts less interest
on money borrowed by the Fund) accrued by the Fund during the month. However,
such monthly advisory fee shall not exceed in the aggregate 1/12th of 1% of the
Fund's average weekly net assets during the month (approximately 1% on an annual
basis).
Under the terms of a Shareholder Inquiry Agency Agreement with Alliance Global
Investor Services, Inc. (AGIS), a wholly-owned subsidiary of the Adviser, the
Fund reimburses AGIS for costs relating to servicing phone inquiries on behalf
of the Fund. During the six months ended June 30, 2003, the Fund reimbursed AGIS
$13,060 for such costs.
Under the terms of an Administrative Agreement, the Fund pays its Administrator,
UBS Global Asset Management (US) Inc. ("UBS Global AM"), a monthly fee equal to
the annual rate of .18 of 1% of the Fund's average weekly net assets up to $100
million, .16 of 1% of the Fund's next $200 million of average weekly net assets,
and .15 of 1% of the Fund's average weekly net assets in excess of $300 million.
Such fee is accrued daily and paid monthly. UBS Global AM is an indirect
wholly-owned asset management subsidiary of UBS AG. The Administrator prepares
financial and regulatory reports for the Fund and provides other clerical
services.
--------------------------------------------------------------------------------
22 o ACM INCOME FUND
NOTE C
Investment Transactions
Purchases and sales of investment securities (excluding short-term investments)
for the six months ended June 30, 2003 were as follows:
Purchases Sales
--------------- ---------------
Investment securities (excluding
U.S. government securities)............$ 386,461,105 $ 617,719,267
U.S. government securities............. 3,038,386,861 2,955,336,624
The cost of investments for federal income tax purposes was substantially the
same as the cost for financial reporting purposes. Accordingly, gross unrealized
appreciation and unrealized depreciation (excluding futures, written options,
swap contracts and foreign currency transactions) are as follows:
Gross unrealized appreciation .......................... $ 342,200,422
Gross unrealized depreciation........................... (11,245,229)
---------------
Net unrealized appreciation............................. $ 330,955,193
---------------
1. Financial Futures Contracts
The Fund may buy or sell financial futures contracts for the purpose of hedging
its portfolio against adverse affects of anticipated movements in the market.
The Fund bears the market risk that arises from changes in the value of these
financial instruments.
At the time the Fund enters into a future contract, the Fund deposits and
maintains as collateral an initial margin as required by the exchange on which
the transaction is effected. Pursuant to the contract, the Fund agrees to
receive from or pay to the broker an amount of cash equal to the daily
fluctuation in the value of the contract. Such receipts or payments are known as
variation margin and are recorded by the Fund as unrealized gains or losses.
Risks may arise from the potential inability of a counterparty to meet the terms
of a contract. When the contract is closed, the Fund records a realized gain or
loss equal to the difference between the value of the contract at the time it
was opened and at the time it was closed.
2. Forward Exchange Currency Contracts
The Fund may enter into forward exchange currency contracts to hedge its
exposure to changes in foreign currency exchange rates on its foreign portfolio
holdings, to hedge certain firm purchase and sale commitments denominated in
foreign currencies and for investment purposes. A forward exchange currency
contract is a commitment to purchase or sell a foreign currency at a future date
at a negotiated forward rate. The gain or loss arising from the difference
between the original contract and the closing of such contract would be included
in net realized gain or loss on foreign currency transactions.
--------------------------------------------------------------------------------
ACM INCOME FUND o 23
Fluctuations in the value of open forward exchange currency contracts are
recorded for financial reporting purposes as net unrealized appreciation or
depreciation by the Fund.
The Fund's custodian will place and maintain cash not available for investment
or other liquid assets in a separate account of the Fund having a value at least
equal to the aggregate amount of the Fund's commitments under forward exchange
currency contracts entered into with respect to position hedges.
Risks may arise from the potential inability of a counterparty to meet the terms
of a contract and from unanticipated movements in the value of a foreign
currency relative to the U.S. dollar. The face or contract amount in U.S.
dollars reflects the total exposure the Fund has in that particular currency
contract.
3. Option Transactions
For hedging and investment purposes, the Fund purchases and writes (sells) 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 premium and change in market value should the counterparty not perform
under the contract. Put and call options purchased are accounted for in the same
manner as portfolio securities. The cost of securities acquired through the
exercise of call options is increased by 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.
--------------------------------------------------------------------------------
24 o ACM INCOME FUND
Transactions in written options for the six months ended June 30, 2003, were as
follows:
Number of
Contracts Premium
(000) Received
--------------- ---------------
Options outstanding at
December 31, 2002...................... 1,000 $ 19,000
Options written........................ 25,003 447,274
Options terminated in closing purchase
transactions........................... (24,003) (409,274)
--------------- ---------------
Options outstanding at
June 30, 2003.......................... 2,000 $ 57,000
--------------- ---------------
4. Swap Agreements
The Fund may enters into swaps 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 records a net receivable or payable on a daily basis for the net
interest income or expense expected to be received or paid in the interest
period. Net interest received or paid on these contracts is recorded as interest
income (or as an offset to interest income). Fluctuations in the value of swap
contracts are recorded for financial statement purposes as a component of net
change in unrealized appreciation/depreciation of investments. Realized gains
and/or loss from terminated swap contracts are included in net realized gain or
loss on investment transactions.
The Fund may enter into credit default swaps. A sell/(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 par and
take/(deliver) the principal amount (the "Notional Amount") of the referenced
obligation. During the term of the swap agreement, the Fund receives/(pays)
semi-annual fixed interest payments from/(to) the respective Counterparty,
calculated at the agreed upon interest rate applied to the Notional Amount.
--------------------------------------------------------------------------------
ACM INCOME FUND o 25
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 and credit risk. If the Fund is a buyer and no
credit event occurs, it will lose its investment. In addition, the value of the
referenced obligation received by the Fund as a seller if a credit event occurs,
coupled with the periodic payments previously received, may be less than the
full notional value it pays to the buyer, resulting in a loss of value to the
Fund.
5. 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 June 30, 2003, the average amount of reverse repurchase
agreements outstanding was approximately $478,092,141 and the daily weighted
average annual interest rate was 1.81%.
NOTE D
Capital Stock
There are 300,000,000 shares of $0.01 par value common stock authorized, of
which 226,562,702 shares were outstanding at June 30, 2003. During the six
months ended June 30, 2003 and the year ended December 31, 2002, the Fund
issued 838,422 and 1,507,419 shares, respectively, in connection with the
Fund's dividend reinvestment plan.
NOTE E
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 an eligible money market vehicle in accordance with the investment
restrictions of the Fund. The Lending Agent will indemnify the Fund for any loss
--------------------------------------------------------------------------------
26 o ACM INCOME FUND
resulting from a borrower's failure to return a loaned security when due. As of
June 30, 2003, the Fund had loaned securities with a value of $47,569,560 and
received cash collateral of $49,718,580, which was invested in a money market
fund as included in the footnotes to the accompanying portfolio of investments.
For the six months ended June 30, 2003, the Fund earned fee income of $44,720
which is included in interest income in the accompanying statement of
operations.
NOTE F
Bank Borrowing
The Fund participated in a credit facility for a commercial paper asset
securitization program with Societe Generale ("SG") as Administrative Agent, and
Barton Capital Corporation ("Barton") as lender. The credit facility was
increased to a maximum of $400 million in January 2002. Under the SG Program,
Barton will fund advances to the Fund through the issuance of commercial paper
rated A-1+ by Standard & Poor's Ratings Services and P-1 by Moody's Investors
Service, Inc. The collateral value must be at least 171% of outstanding
borrowings. The borrowings under the SG program are secured by the pledging of
the Fund's portfolio securities as collateral. The interest rate on the Fund's
borrowings is based on the interest rate carried by the commercial paper. The
weighted average annual interest rate was 1.30% and the average borrowing was
$400,000,000 for the six months ended June 30, 2003. At June 30, 2003, the
interest rate in effect was 1.29% and the amount of borrowings outstanding was
$400,000,000.
NOTE G
Concentration of Risk
Investing in securities of foreign governments involves special risks which
include changes in foreign exchange rates and the possibility of future adverse
political and economic developments which could adversely affect the value of
such securities. Moreover, securities of many foreign governments and their
markets may be less liquid and their prices more volatile than those of the
United States Government.
The Fund invests in the Sovereign Debt Obligations of countries that are
considered emerging market countries at the time of purchase.Therefore, the Fund
is susceptible to governmental factors and economic and debt restructuring
developments adversely affecting the economics of these emerging market
countries. In addition, these debt obligations may be less liquid and subject to
greater volatility than debt obligations of more developed countries.
--------------------------------------------------------------------------------
ACM INCOME FUND o 27
NOTE H
Distributions to Shareholders
The tax character of distributions to be paid for the year ending December 31,
2003 will be determined at the end of the current fiscal year. Based on the
operations of the Fund as of the semi-annual date, and its distribution policy,
the Fund may have a non-taxable distribution at year end. The tax character of
distributions paid during the fiscal years ended December 31, 2002 and December
31, 2001 were as follows:
2002 2001
-------------- ---------------
Distributions paid from:
Ordinary income.................... $ 191,884,640 $ 143,680,532
-------------- ---------------
Total taxable distributions........... 191,884,640 143,680,532
Tax return of capital................. 15,245,936 -0-
-------------- ---------------
Total distributions paid.............. $ 207,130,576 $ 143,680,532(a)
-------------- ---------------
As of December 31, 2002, the components of accumulated earnings/(deficit) on a
tax basis were as follows:
Accumulated capital and other losses................... $ (443,493,716)(b)
Unrealized appreciation/(depreciation)................. 118,032,834(c)
----------------
Total accumulated earnings/(deficit)................... $ (325,460,882)
----------------
(a) Total distributions paid differ from the Statement of Changes in Net Assets
because for tax purposes dividends are recognized when actually paid.
(b) On December 31, 2002, the Fund had a net capital loss carryforward of
$430,445,919 of which $2,680,733 expires in the year 2003, $79,155 expires
in the year 2004, $34,157,206 expires in the year 2005, $131,355,099 expires
in the year 2006, $67,513,083 expires in the year 2007, $8,878,672 expires
in the year 2008, $48,113,872 expires in the year 2009 and $137,668,099
expires in the year 2010. To the extent future capital gains are offset by
capital loss carryforwards, it is anticipated such gains will not be
distributed. Based on certain provisions in the Internal Revenue Code,
various limitations regarding the future utilization of these carryforwards,
brought forward as a result of the Fund's merger with ACM Government
Securities Fund and ACM Government Spectrum Fund in December 2000, may
apply. Net capital losses incurred after October 31, and within the taxable
year are deemed to arise on the first business day of the Fund's next
taxable year. For the year ended December 31, 2002, the Fund deferred to
January 1, 2003, post October capital losses of $12,301,068 and post October
currency losses of $746,729.
(c) The difference between book-basis and tax-basis unrealized
appreciation/(depreciation) is attributable primarily to the tax deferral of
losses on wash sales, the realization for tax purposes of unrealized
gains/losses on certain derivative instruments and the difference between
book and tax amortization methods for premium.
--------------------------------------------------------------------------------
28 o ACM INCOME FUND
FINANCIAL HIGHLIGHTS
Selected Data For A Share Of Common Stock Outstanding Throughout Each Period
Six Months
Ended
June 30,
2003 Year Ended December 31,
------------------------------------------------------------
(unaudited) 2002 2001(a) 2000 1999 1998
---------------------------------------------------------------------------------
Net asset value, beginning of period .......... $ 7.91 $ 7.87 $ 8.45 $ 7.64 $ 8.80 $ 10.51
---------------------------------------------------------------------------------
Income From Investment Operations
Net investment income(b) ...................... .40 .89 .76 .70 .79 .88
Net realized and unrealized gain (loss)
on investment and foreign
currency transactions... ................... .79 .07 (.11) .91 (1.11) (1.71)
---------------------------------------------------------------------------------
Net increase (decrease) in net
asset value from operations ................ 1.19 .96 .65 1.61 (.32) (.83)
---------------------------------------------------------------------------------
Less: Dividends and Distributions
Dividends from net investment income .......... (.46) (.85) (.77) (.70) (.79) (.88)
Distributions in excess of net
investment income....... ................... -0- -0- (.07) (.10) (.05) -0-
Tax return of capital ......................... -0- (.07) -0- -0- -0- -0-
---------------------------------------------------------------------------------
Total dividends and distributions ............. (.46) (.92) (.84) (.80) (.84) (.88)
---------------------------------------------------------------------------------
Less: Fund Share Transactions
Dilutive effect of rights offering ............ -0- -0- (.32) -0- -0- -0-
Offering costs charged to paid-in-
capital in excess of par ................... -0- -0- (.07) -0- -0- -0-
---------------------------------------------------------------------------------
Total fund share transactions ................. -0- -0- (.39) -0- -0- -0-
---------------------------------------------------------------------------------
Net asset value, end of period ................ $ 8.64 $ 7.91 $ 7.87 $ 8.45 $ 7.64 $ 8.80
---------------------------------------------------------------------------------
Market value, end of period ................... $9.49 $ 8.46 $ 7.30 $ 7.50 $ 6.50 $ 9.13
=================================================================================
Total Investment Return
Total investment return based on:(c)
Market value.......... ...................... 18.41% 30.60% 7.80% 28.97% (20.84)% (9.25)%
Net asset value....... ...................... 15.30% 13.27% 3.11% 23.58% (3.53)% (8.38)%
Ratios/Supplemental Data
Net assets, end of period (000's omitted) ..... $1,958,499 $1,785,164 $1,764,895 $1,390,542 $448,735 $512,296
Ratio to average net assets of:
Expenses.............. ...................... 1.76%(d) 1.87% 2.31% 2.54% 2.37% 2.09%
Expenses, excluding interest expense(e) ..... 1.12%(d) 1.26% 1.18% 1.19% 1.19% 1.12%
Net investment income. ...................... 9.08%(d) 11.69% 9.33% 9.40% 9.80% 9.04%
Portfolio turnover rate. ...................... 140% 414% 676% 538% 368% 409%
Asset coverage ratio.... ...................... 493% 376% 379% 339% 325% 325%
Bank borrowing outstanding (in millions) ...... $ 400 $ 400 $ 300 $ 300 $ 90 $ 90
(a) As required, effective January 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 reporting purposes
only. The effect of this change for the year ended December 31, 2001, was to
decrease net investment income per share by $.05, decrease net realized and
unrealized loss on investment transactions per share by $.05, and decrease
the ratio of net investment income to average net assets from 9.92% to
9.33%. Per share, ratios and supplemental data for periods prior to January
1, 2001 have not been restated to reflect this change in presentation.
(b) Based on average shares outstanding.
(c) 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.
(d) Annualized.
(e) Net of interest expense of .64%, .61%, 1.13%, 1.35%, 1.18% and .97%,
respectively, on borrowings (see Notes C, E and F).
--------------------------------------------------------------------------------
ACM INCOME FUND o 29
ADDITIONAL INFORMATION
(unaudited)
Supplemental Proxy Information
A Special Annual Meeting of Shareholders of ACM Income Fund, Inc. was held
on March 20, 2003. A description of each proposal and number of shares voted
at the meeting are as follows:
Voted
Abstain/
Authority
Voted For Withheld
----------------------------------------------------------------------------------
1. To elect two Directors of Class Directors
ACM I for a term of three (terms expire in 2006)
years and until his or her John D. Carifa 205,721,471 3,546,071
successor is duly elected Ruth Block 205,274,740 3,992,803
and qualifies.
Voted
Abstain/
Voted Authority
Voted For Against Withheld No Vote
--------------------------------------------------------------------------------
2. To approve, if properly
presented, a stockholder
proposal recommending
termination of the
Investment Management
Agreement and
other actions. 15,139,646 64,162,612 6,048,623 123,916,661
--------------------------------------------------------------------------------
30 o ACM INCOME FUND
BOARD OF DIRECTORS
John D. Carifa, Chairman and President
Ruth Block(1)
David H. Dievler(1)
John H. Dobkin(1)
William H. Foulk, Jr.(1)
Dr. James M. Hester(1)
Clifford L. Michel(1)
Donald J. Robinson(1)
OFFICERS
Kathleen A. Corbet, Senior Vice President
Andrew M. Aran, Vice President
Paul J. DeNoon, Vice President
S. Sean Kelleher, Vice President
Michael L. Mon, Vice President
Douglas J. Peebles, Vice President
Michael A. Snyder, Vice President
Edmund P. Bergan, Jr., Secretary
Mark D. Gersten, Treasurer & Chief Financial Officer
Vincent S. Noto, Controller
Administrator
UBS Global Asset Management (US) Inc.
51 West 52nd Street
New York, NY 10019
Dividend Paying Agent, Transfer Agent
and Registrar
Equiserve Trust Company, N.A.
P.O. Box 43011
Providence, RI 02940-3011
Custodian
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
Independent Auditors
Ernst & Young LLP
5 Times Square
New York, NY 10036
Legal Counsel
Seward & Kissel LLP
One Battery Park Plaza
New York, NY 10004
(1) Member of the Audit Committee.
Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940 that the Fund may purchase from time to time at market
prices shares of its Common Stock in the open market.
This report, including the financial statements herein, is transmitted to
the shareholders of ACM 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.
--------------------------------------------------------------------------------
ACM INCOME FUND o 31
MANAGEMENT OF THE FUND
(unaudited)
Board of Directors Information
The business and affairs of the Fund are managed under the direction of the
Board of Directors. Certain information concerning the Fund's Directors is set
forth below.
PORTFOLIOS
IN FUND OTHER
NAME, AGE OF DIRECTOR, PRINCIPAL COMPLEX DIRECTORSHIPS
ADDRESS OCCUPATION(S) OVERSEEN BY HELD BY
(YEARS OF SERVICE*) DURING PAST 5 YEARS DIRECTOR DIRECTOR
------------------------------------------------------------------------------------------------------------
INTERESTED DIRECTOR
John D. Carifa, **, 58 President, Chief Operating 113 None
1345 Avenue of the Officer and a Director of Alliance
Americas Capital Management Corporation
New York, NY 10105 (1) ("ACMC"), with which he has been
associated with since prior to 1998.
DISINTERESTED DIRECTORS
Ruth Block, #+, 72 Formerly an Executive Vice 94 None
P.O. Box 4623 President and Chief Insurance
Stamford, CT 06903 (1) Officer of The Equitable Life
Assurance Society of the United
States; Chairman and Chief
Executive Officer of Evlico.
Formerly a Director of Avon,
BP Amoco Corporation (oil and
gas), Ecolab Incorporated
(specialty chemicals), Tandem
Financial Group and Donaldson,
Lufkin & Jenrette Securities
Corporation. Formerly Governor
at Large National Association of
Securities Dealers, Inc.
David H. Dievler, #+, 73 Independent Consultant. Until 98 None
P.O. Box 167 December 1994, Senior Vice
Spring Lake, NJ 07762 (1) President of ACMC responsible
for mutual fund administration.
Prior to joining ACMC in 1984,
Chief Financial Officer of Eberstadt
Asset Management since 1968. Prior
to that, Senior Manager at
Price Waterhouse & Co. Member
of the American Institute of
Certified Public
Accountants since 1953.
John H. Dobkin, #+, 61 Consultant. Formerly a President 95 None
P.O. Box 12 of Save Venice, Inc. from 2001-
Annandale, NY 12504 (1) 2002, Senior Advisor from June
1999-June 2000 and President of
Historic Hudson Valley
from December 1989-May 1999.
Previously, Director of the
National Academy of Design and
during 1988-1992, Director
and Chairman of the Audit
Committee of ACMC.
--------------------------------------------------------------------------------
32 o ACM INCOME FUND
PORTFOLIOS
IN FUND OTHER
NAME, AGE OF DIRECTOR, PRINCIPAL COMPLEX DIRECTORSHIPS
ADDRESS OCCUPATION(S) OVERSEEN BY HELD BY
(YEARS OF SERVICE*) DURING PAST 5 YEARS DIRECTOR DIRECTOR
------------------------------------------------------------------------------------------------------------
DISINTERESTED DIRECTORS
(continued)
William H. Foulk, Jr., #+, 70 Investment Adviser and 110 None
2 Sound View Drive Independent Consultant. Formerly
Suite 100 Senior Manager of Barrett
Greenwich, CT 06830 (1) Associates, Inc., a registered
investment adviser, with which
he had been associated
since prior to 1998. Formerly
Deputy Comptroller of the
State of New York and, prior
thereto, Chief Investment
Officer of the New York Bank
for Savings.
Clifford L. Michel, #+, 64 Senior Counsel of the law firm of 94 Placer Dome, Inc.
15 St. Bernard's Road Cahill Gordon & Reindel since
Gladstone, NJ 07934 (1) February 2001 and a partner of
that firm for more than twenty-five
years prior thereto. President and Chief
Executive Officer of Wenonah Development
Company (investments) and a Director of
Placer Dome, Inc. (mining).
Donald J. Robinson, #+, 69 Senior Counsel of the law firm of 93 None
98 Hell's Peak Road Orrick, Herrington & Sutcliffe LLP
Weston, VT 05161 (1) since prior to 1998. Formerly a
senior partner and a member of the
Executive Committee of
that firm. Formerly a member and
Chairman of the Municipal
Securities Rulemaking Board and
a Trustee of the Museum of
the City of New York.
** Mr. Carifa is an "interested director", as defined in the 1940 Act, due to
his position as President and Chief Operating Officer of ACMC, the Fund's
investment adviser.
# Member of the Audit Committee.
+ Member of the Nominating Committee.
--------------------------------------------------------------------------------
ACM INCOME FUND o 33
Officer Information
Certain information concerning the Fund's Officers is listed below.
NAME, POSITION(S) PRINCIPAL OCCUPATION
ADDRESS* AND AGE HELD WITH FUND DURING PAST 5 YEARS**
--------------------------------------------------------------------------------------------------------------
John D. Carifa, 58 Chairman & President See biography above.
Marilyn G. Fedak, 56 Senior Vice President Executive Vice President and
Chief Investment Officer of
U.S. International and Global
Investment and support team
since June 2003. Chief Investment
Officer of U.S. Large Capitalization
Value Equities of ACMC since
October 2000. Prior thereto, Chief
Investment Officer and Chairman of
the U.S. Equity Investment Policy
Group at Sanford C. Bernstein
& Co., Inc. ("Bernstein") since
prior to 1998.
James, G. Reilly, 42 Senior Vice President Executive Vice President of ACMC,
with which he has been associated
since prior to 1998.
Lewis A. Sanders, 56 Senior Vice President Chief Executive Officer of ACMC since
July 2003. Prior thereto, he was Vice
Chairman and Chief Investment Officer of
ACMC since October 2000 and Chief
Executive Officer of Sanford C. Bernstein &
Co, since prior to 1998.
Thomas J. Bardong, 58 Vice President Senior Vice President of ACMC, with
which he has been associated since
prior to 1998.
Seth J. Masters, 44 Vice President Senior Vice President and Chief Investment
Officer of Style Blend Services at
ACMC, with which he has been associated
since October 2000. Prior thereto, he
was Chief Investment Officer for Emerging
Market Value at Bernstein since prior
to 1998.
Edmund P. Bergan, Jr., 53 Secretary Senior Vice President and General
Counsel of AllianceBernstein Investment
Research and Management, Inc. ("ABIRM")
and Alliance Global Investor Services,
Inc. ("AGIS"), with which he has been
associated since prior to 1998.
--------------------------------------------------------------------------------
34 o ACM INCOME FUND
NAME, POSITION(S) PRINCIPAL OCCUPATION
ADDRESS* AND AGE HELD WITH FUND DURING PAST 5 YEARS**
--------------------------------------------------------------------------------------------------------------
Mark D. Gersten, 52 Treasurer and Chief Senior Vice President of AGIS and a
Financial Officer Vice President of ABIRM, with which he
has been associated since prior to 1998.
Vincent S. Noto, 38 Controller Vice President of AGIS, with which he
has been associated since prior to 1998.
* The address for each of the Fund's Officers is 1345 Avenue of the Americas,
New York, NY 10105.
** ACMC, ABIRM and AGIS are affiliates of the Fund.
The Fund's Statement of Additional Information ("SAI") has additional
information about the Fund's Directors and Officers and is available without
charge upon request. Contact your financial representative or Alliance
Capital at 1-800-227-4618 for a free prospectus or SAI.
--------------------------------------------------------------------------------
ACM INCOME FUND o 35
ALLIANCEBERNSTEIN FAMILY OF FUNDS
U.S. Growth Funds
Growth Fund
Health Care Fund
Mid-Cap Growth Fund
Premier Growth Fund
Quasar Fund
Technology Fund
Value Funds
Balanced Shares
Disciplined Value Fund
Global Value Fund
Growth & Income Fund
International Value Fund
Real Estate Investment Fund
Small CapValue Fund
Utility Income Fund
Value Fund
Blended Style Series
U.S. Large Cap Portfolio
Global & International Stock Funds
All-Asia Investment Fund
Global Small Cap Fund
Greater China '97 Fund
International Premier Growth Fund
New Europe Fund
Worldwide Privatization Fund
Select Investor Series
Biotechnology Portfolio
Premier Portfolio
Technology Portfolio
Taxable Bond Funds
Americas Government Income Trust
Corporate Bond Portfolio
Emerging Market Debt Fund
Global Strategic Income Trust
High Yield Fund
Multi-Market Strategy Trust
Quality Bond Portfolio
U.S. Government Portfolio
Tax-Exempt Bond Funds
National
Intermediate Diversified
Insured National
Arizona
California
Intermediate California
Insured California
Florida
Massachusetts
Michigan
Minnesota
New Jersey
New York
Intermediate New York
Ohio
Pennsylvania
Virginia
Asset Allocation Funds
Conservative Investors Fund
Growth Investors Fund
Closed-End Funds
All-Market Advantage Fund
ACM Income Fund
ACM Government Opportunity Fund
ACM Managed Dollar Income Fund
ACM Managed Income Fund
ACM Municipal Securities Income Fund
California Municipal Income Fund
National Municipal Income Fund
New York Municipal Income Fund
The Spain Fund
World Dollar Government Fund
World Dollar Government Fund II
AllianceBernstein also offers AllianceBernstein Exchange Reserves, which serves
as the money market fund exchange vehicle for the AllianceBernstein mutual
funds.
To obtain a prospectus for any AllianceBernstein fund, call your investment
professional, or call AllianceBernstein at (800) 227-4618 or visit our web site
at www.alliancebernstein.com.
--------------------------------------------------------------------------------
36 o ACM INCOME FUND
SUMMARY OF GENERAL INFORMATION
ACM Income Fund Shareholder Information
The daily net asset value of the Fund's shares is available from the Fund's
Transfer Agent by calling (800) 432-5523. The Fund also distributes its daily
net asset value to various financial publications or independent organizations
such as Lipper Inc., Morningstar, Inc. and Bloomberg.
Daily market prices for the Fund's shares are published in the New York Stock
Exchange Composite Transaction section of newspapers under the designation
"ACMIn." The Fund's NYSE trading symbol is "ACG." Weekly comparative net asset
value (NAV) and market price information about the Fund is published each Monday
in The Wall Street Journal and each Sunday in The New York Times and other
newspapers in a table called "Closed-End Bond Funds."
Dividend Reinvestment Plan
A Dividend Reinvestment Plan provides automatic reinvestment of dividends and
capital gains distributions in additional Fund shares. The Plan also allows you
to make optional cash investments in Fund Shares through the Plan Agent. If you
wish to participate in the Plan and your shares are held in your name, simply
complete and mail the enrollment form in the brochure. If your shares are held
in the name of your brokerage firm, bank or other nominee, you should ask them
whether or how you can participate in the Plan.
For questions concerning shareholder account information, or if you would like a
brochure describing the Dividend Reinvestment Plan, please call Equiserve Trust
Company, N.A. at (800) 219-4218.
-------------------------------------------------------------------------------
ACM INCOME FUND o 37
ACM INCOME FUND
1345 Avenue of the Americas
New York, NY 10105
(800) 221-5672
[LOGO] AllianceBernstein(SM)
Investment Research and Management
(SM) This service mark used under license from the owner, Alliance Capital
Management L.P.
INCSR0603
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. [RESERVED]
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. [RESERVED]
ITEM 9. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive officer and principal financial officer
have concluded that the registrant's disclosure controls and procedures (as
defined in Rule 30a-2(c) under the Investment Company Act of 1940, as amended)
are effective at the reasonable assurance level based on their evaluation of
these controls and procedures as of a date within 90 days of the filing date of
this document.
(b) There were no significant changes in the registrant's internal controls that
could significantly affect these controls subsequent to the date of their
evaluation, including any corrective actions with regard to significant
deficiencies and material weaknesses.
ITEM 10. EXHIBITS.
The following exhibits are attached to this Form N-CSR:
Exhibit No. DESCRIPTION OF EXHIBIT
10 (b) (1) Certification of Principal Executive Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
10 (b) (2) Certification of Principal Financial Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
10 (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 Income Fund, Inc.
By: /s/John D. Carifa
---------------------------------
John D. Carifa
President
Date: August 22, 2003
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/John D. Carifa
---------------------------------
John D. Carifa
President
Date: August 22, 2003
By: /s/Mark D. Gersten
-------------------------------
Mark D. Gersten
Treasurer and Chief Financial Officer
Date: August 22, 2003