--------------------------------------------------------------------------------
CLOSED END
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ACM Managed
Dollar Income Fund
Semi-Annual Report
March 31, 2002
[GRAPHIC OMITTED]
Alliance Capital [LOGO](R)
The Investment Professional's Choice
Investment Products Offered
---------------------------
o Are Not FDIC Insured
o May Lose Value
o Are Not Bank Guaranteed
---------------------------
Alliance Fund Distributors, Inc., the principal underwriter of the Alliance
mutual funds and an affiliate of Alliance Capital Management L.P., the manager
of the funds, is a member of the NASD.
----------------------
LETTER TO SHAREHOLDERS
----------------------
LETTER TO SHAREHOLDERS
May 22, 2002
Dear Shareholder:
This report provides investment results, performance information and market
outlook for ACM Managed Dollar Income Fund (the "Fund") for the semi-annual
reporting period ended March 31, 2002.
Investment Objective and Policies
This closed-end fund is designed for investors who seek high current income and
capital appreciation. To achieve this objective, it invests primarily in
high-yielding, high-risk U.S. and non-U.S. fixed income securities, denominated
in U.S. dollars, that we expect to benefit from improving economic and credit
fundamentals.
Investment Results
The following table shows how the Fund performed over the six- and 12-month
periods ended March 31, 2002. For comparison, we have included a composite
benchmark consisting of 65% of the J.P. Morgan Emerging Markets Bond Index Plus
(JPM EMBI+)--a standard measure of the performance of a basket of unmanaged
emerging market debt securities--and 35% of the Credit Suisse First Boston High
Yield (CSFBHY) Index--a standard measure of the performance of a basket of
unmanaged U.S. high yield debt securities. We compare the Fund's performance to
this composite benchmark because it more closely resembles the composition of
the Fund's portfolio.
INVESTMENT RESULTS*
Periods Ended March 31, 2002
-------------------------
Total Returns
-------------------------
6 Months 12 Months
--------------------------------------------------------------------------------
ACM Managed
Dollar Income
Fund (NAV) 19.54% 11.05%
--------------------------------------------------------------------------------
J.P. Morgan
Emerging
Markets Bond
Index Plus 5.65% 3.62%
--------------------------------------------------------------------------------
Credit Suisse
First Boston
High Yield
Index 8.32% 3.36%
--------------------------------------------------------------------------------
Composite:
65%/35%
(65% JPM
EMBI+ 35%
(CSFBHY) 6.58% 3.53%
--------------------------------------------------------------------------------
* The Fund's investment results represent total returns for the periods
shown and are based on the net asset value (NAV) of the Fund as of March
31, 2002. 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 J.P. Morgan Emerging Markets Bond Index Plus is comprised of
dollar-denominated restructured sovereign bonds; a large percentage of the
index is made up of Brady bonds. The unmanaged Credit Suisse First Boston
High Yield Index is a measure of lower-rated, fixed income,
non-convertible
--------------------------------------------------------------------------------
ACM MANAGED DOLLAR INCOME FUND o 1
----------------------
LETTER TO SHAREHOLDERS
----------------------
U.S. dollar-denominated securities meeting certain criteria developed by
Credit Suisse designed to enable the index to reflect the high yield
market. The composite is from the inception of the JPM EMBI+, which was
12/31/93. The indices are unmanaged and reflect no fees or expenses. An
investor cannot invest directly in an index, and its results are not
indicative of any specific investment, including ACM Managed Dollar Income
Fund.
Additional investment results appear on pages 6-8.
The Fund significantly outperformed the composite benchmark for the six- and
12-month periods ended March 31, 2002. This was primarily due to the Fund's
security selection in both its emerging market and high yield holdings. The
Fund's use of financial leverage during a period of strong returns further
enhanced the outperformance relative to the index.
Within the emerging market sector, the Fund's overweight position in Russia and
its overall security selection were the primary contributors to outperformance.
Positions in Mexico, Brazil, the Philippines and Ukraine also enhanced
performance. Eliminating the Fund's position in Argentina in November of 2001
was a key decision that contributed positively to performance.
Russia, which benefited from strong economic growth in spite of lower oil
prices, continued to outperform all other emerging market countries during the
six-month period, posting a return of 33.48% as measured by the JPM EMBI+. News
that Russia does not plan to issue any foreign debt in 2002 and will revamp its
outdated debt management system also had a positive effect on Russian bond
prices.
Mexico posted a return of 9.58% for the six-month period even though it was
negatively impacted by a slowing U.S. economy and lower oil prices. Bond prices
strengthened as Standard & Poor's (S&P) increased Mexico's credit rating to a
BBB investment-grade level, the government began implementing much needed fiscal
reforms and the economy continued to align itself with the U.S.
In Brazil, greater than expected trade surpluses and a strengthening currency
led to declining debt ratios, enabling the central bank to lower interest rates.
Growth prospects improved as heavy rains filled the reservoirs of the country's
hydroelectric power plants, enabling the government to put an end to electricity
rationing. Brazil's ability to withstand the crisis in neighboring Argentina
also improved its outlook. For the six-month period, Brazil returned 25.90% and
was the largest country weight within the JPM EMBI+.
In the Philippines, a robust agricultural sector supported the economy, which
outperformed despite weak demand for electronics exports. During the period
under review, the Philippine central bank cut interest rates to their lowest
level since 1995, fueling economic growth. An improved credit rating, falling
inflation and a stable currency further supported bond prices, with the
Philippines posting a return of 23.28% for the period.
--------------------------------------------------------------------------------
2 o ACM MANAGED DOLLAR INCOME FUND
----------------------
LETTER TO SHAREHOLDERS
----------------------
The Fund's position in Ukraine enhanced performance as economic growth and
improving credit boosted the country's bond prices, with Ukraine returning
29.53% for the six-month period.
The Fund's high yield holdings also contributed positively to performance. Our
focus on domestic cable selections such as Charter Communication Holdings and
Mediacom Broadband, which benefit from stable cash flows, were significant
positive contributors to the Fund. In addition, holdings in the automotive,
chemical, diversified media and hotel sectors helped performance. On the other
hand, the Fund's overweight position in the wireless telecommunications sector,
relative to the benchmark, had a negative effect on performance. The wireless
telecommunications sector was impacted by concerns regarding future subscriber
growth rates that adversely affected valuations. However, the Fund's security
selection within the telecommunications sector was a positive contributor to
performance.
Market Overview
In the U.S., economic growth surpassed expectations for the fourth quarter of
2001. Gross domestic product (GDP), which is the broadest measure of U.S.
economic activity, grew a revised 1.7% in real terms. Unemployment levels
appeared to have peaked as the U.S. economy began adding jobs in March for the
first time in eight months. An increase in industrial production levels further
indicated that the U.S. economy was beginning to rebound. The U.S. Federal
Reserve ended its easing cycle as signs of an economic recovery began to emerge.
In addition, in March 2002 the President signed into law a retroactive tax bill
designed to enhance corporate cash flow and trigger a faster recovery in capital
spending.
Emerging market debt, as measured by the JPM EMBI+, posted a return of 5.65% for
the six-month period under review. Expansionary U.S. fiscal and monetary policy,
increased production levels, low interest rates and the bottoming out of
economic decline in Europe created a favorable environment for emerging market
debt. These factors combined with high levels of liquidity and increasing
investor confidence contributed to a steady inflow of funds into emerging market
bonds during the period under review. However, the overall performance of the
sector was significantly dampened by the negative performance of Argentina,
which fell 59.29% for the period. Apart from Argentina, the JPM EMBI+ returned a
strong 19.03% for the period.
Most other individual emerging market countries posted strong returns as the
market de-coupled from the events in Argentina. In addition to the top
performing countries already mentioned in the investment results section,
Ecuador returned 37.37%, Turkey, 25.06%, Nigeria, 18.89%, Peru, 19.02% and
Bulgaria 16.56%. Besides Argentina, the only countries that underperformed the
index were Poland and Korea, which respectively returned 3.81% and 3.26%.
For the six-month reporting period ended March 31, 2002, the high yield market,
as represented by the CSFBHY
--------------------------------------------------------------------------------
ACM MANAGED DOLLAR INCOME FUND o 3
----------------------
LETTER TO SHAREHOLDERS
----------------------
Index, returned 8.32%. Strong performance in the first quarter of 2002 reflected
an improved economic outlook and investors' willingness to assume additional
risk. The high yield market was also the beneficiary of large inflows into high
yield mutual funds. Inflows in March alone totaled approximately $3.2 billion,
the largest single monthly addition on record. However, default rates remained
high throughout the six-month period, reflecting the low financial flexibility
of highly leveraged companies. Default levels peaked in January 2002 with $15.1
billion in defaulted bonds. For the six-month period, higher rated securities
outperformed as investors sought higher quality issuers.
Outlook
The world economic outlook continues to improve for 2002, sparked by the
evidence of a stronger than anticipated rebound in the U.S. economy, coupled
with the initial success of the war on terrorism. Given the amount of fiscal and
monetary stimulus, the rebound in economic growth in the U.S. should prove to be
stronger than initially anticipated, paving the way for stronger global growth.
Liquidity, already at historically high levels, continues to rise, further
improving the outlook for a sustainable economic recovery.
We expect growth to accelerate in most emerging market economies, particularly
in Latin America (excluding Argentina) and Asia (excluding Japan), as the demand
for imports increases in developed economies and global risk aversion continues
to subside. With Federal Funds rate increases imminent and higher Treasury
yields expected, emerging market bonds will have difficulty turning in further
strong performance. Nonetheless, the rapid global economic recovery and rising
liquidity in all market sectors bodes well for the asset class. Within the Fund,
we will continue to favor holdings in Russian debt. We also favor oil-related
credits such as Ecuador and Venezuela, as oil prices have firmed. We will be
somewhat more cautious with Brazil, as elections are due to be held in the fall.
The high yield market continues to build momentum into 2002 as the economy
recovers. We believe that high yield will outperform relative to other fixed
income sectors. We are currently focused on cable issuers that we expect to
outperform in the near-term, as well as the wireless telecommunications sector
that we believe is undervalued. With an improving economy, we also favor
cyclical industries and will maintain a focus on single B-rated securities,
which we expect to outperform.
--------------------------------------------------------------------------------
4 o ACM MANAGED DOLLAR INCOME FUND
----------------------
LETTER TO SHAREHOLDERS
----------------------
Thank you for your continued interest and investment in the ACM Managed Dollar
Income Fund. We look forward to reporting to you on market activity and the
Fund's investment results in the coming periods.
Sincerely,
/s/ John D. Carifa
John D. Carifa
Chairman
/s/ Wayne D. Lyski
Wayne D. Lyski
President
/s/ Paul J. DeNoon
Paul J. DeNoon
Vice President
/s/ George D. Caffrey
George D. Caffrey
Vice President
[PHOTO] John D. Carifa
[PHOTO] Wayne D. Lyski
[PHOTO] Paul J. DeNoon
[PHOTO] George D. Caffrey
Wayne D. Lyski, Paul J. DeNoon and George D. Caffrey, Portfolio Managers, have
over 50 years of combined investment experience. Wayne D. Lyski oversees fixed
income investments at Alliance Capital and manages assets in both domestic and
international markets.
--------------------------------------------------------------------------------
ACM MANAGED DOLLAR INCOME FUND o 5
------------------
PERFORMANCE UPDATE
------------------
PERFORMANCE UPDATE
ACM MANAGED DOLLAR INCOME FUND (NAV)
GROWTH OF A $10,000 INVESTMENT
10/31/93* TO 3/31/02
ACM Managed Dollar Income Fund (NAV): $15,667
Composite: $20,969
[The following table was depicted as a mountain chart in the printed material.]
ACM Managed Dollar Income Fund Composite
-------------------------------------------------------------------------------
10/31/93 $10,000 $10,000
3/31/94 $ 8,324 $ 9,110
3/31/95 $ 7,079 $ 8,758
3/31/96 $10,554 $11,949
3/31/97 $14,252 $15,156
3/31/98 $17,998 $17,688
3/31/99 $12,648 $15,978
3/31/00 $15,209 $19,011
3/31/01 $14,108 $20,254
3/31/02 $15,667 $20,969
This chart illustrates the total value of an assumed $10,000 investment in ACM
Managed Dollar Income Fund at net asset value (NAV) (from 10/31/93 to 3/31/02)
as compared to the performance of an appropriate composite. The composite
represents 65% of the J.P. Morgan Emerging Markets Bond Index Plus (JPM EMBI+)
and 35% of the Credit Suisse First Boston High Yield (CSFBHY) Index. The
composite is from the inception of the JPM EMBI+, which was 12/31/93. For the
period 10/31/93 through 3/31/94, the J.P. Morgan Emerging Markets Bond Index was
used in place of the JPMEMBI+. All other periods used the composite benchmark.
The chart assumes the reinvestment of dividends and capital gains. Past
performance is not indicative of future results, and is not representative of
future gain or loss in capital value or dividend income.
The JPM EMBI+ is comprised of dollar-denominated restructured sovereign bonds; a
large percentage of the index is made up of Brady bonds. The CSFBHY Index is a
measure of lower-rated, fixed-income, non-convertible U.S. dollar-denominated
securities meeting certain criteria developed by Credit Suisse designed to
enable the index to reflect the high yield market. The indices are unmanaged and
reflect no fees or expenses. When comparing ACM Managed Dollar Income Fund to
the composite shown above, you should note that no charges or expenses are
reflected in the performance of the composite. An investor cannot invest
directly in a composite, and its results are not indicative of any specific
investment, including ACM Managed Dollar Income Fund.
* Closest month-end after Fund's inception date of 10/22/93.
--------------------------------------------------------------------------------
6 o ACM MANAGED DOLLAR INCOME FUND
------------------
PERFORMANCE UPDATE
------------------
PERFORMANCE UPDATE
ACM MANAGED DOLLAR INCOME FUND (NAV)
HISTORY OF RETURNS
YEARLY PERIODS ENDED 3/31
[BAR CHART OMITTED]
ACM Managed Dollar Income Fund (NAV)--Yearly Periods Ended 3/31
--------------------------------------------------------------------------------
ACM Managed Dollar
Income Fund (NAV) Composite*
--------------------------------------------------------------------------------
3/31/94** -16.76% N/A
3/31/95 -14.95% -3.86%
3/31/96 49.08% 36.44%
3/31/97 35.04% 26.84%
3/31/98 26.28% 16.74%
3/31/99 -29.73% -9.67%
3/31/00 20.25% 18.99%
3/31/01 -7.24% 6.54%
3/31/02 11.05% 3.53%
Past performance is no guarantee of future results. The Fund's investment
results represent total returns and are based on the net asset value (NAV). 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.
* The composite represents 65% of the J.P. Morgan Emerging Markets Bond
Index Plus (JPM EMBI+) and 35% of the Credit Suisse First Boston High
Yield (CSFBHY) Index. The unmanaged JPM EMBI+ is comprised of
dollar-denominated restructured sovereign bonds; a large percentage of the
index is made up of Brady bonds. The unmanaged CSFBHY Index is a measure
of lower-rated, fixed-income, non-convertible U.S. dollar-denominated
securities meeting certain criteria developed by Credit Suisse designed to
enable the index to reflect the high yield market. The indices are
unmanaged and reflect no fees or expenses. An investor cannot invest
directly in an index, and its results are not indicative of any specific
investment, including ACM Managed Dollar Income Fund.
** Fund returns for the period 3/31/94 are from the Fund's inception date of
10/22/93 through 3/31/94. The J.P. Morgan Emerging Markets Bond Index Plus
was not available until 1/1/94. Therefore, returns for the benchmark are
unavailable for the period ended 3/31/94.
--------------------------------------------------------------------------------
ACM MANAGED DOLLAR INCOME FUND o 7
-----------------
PORTFOLIO SUMMARY
-----------------
PORTFOLIO SUMMARY
March 31, 2002 (unaudited)
INCEPTION DATE PORTFOLIO STATISTICS
10/22/93 Net Assets ($mil): $157.9
SECURITY TYPE
45.9% Sovereign
36.9% Corporate
3.9% Brady Bonds [PIE CHART OMITTED]
3.8% Yankee Bonds
2.4% Preferred Stock
7.1% Short-term
COUNTRY BREAKDOWN
46.4% United States
16.7% Brazil
15.7% Russia
9.2% Mexico
3.4% Philippines
1.5% Ecuador [PIE CHART OMITTED]
1.2% Panama
1.1% Turkey
1.0% Luxembourg
1.0% Ukraine
0.6% Peru
0.6% Colombia
1.6% Other
All data as of March 31, 2002. The Fund's security type and country breakdowns
are expressed as a percentage of total investments and may vary over time.
"Other" represents less than 0.5% weightings in each of the following countries:
Venezuela, Canada, United Kingdom, Argentina, Bulgaria, Bahamas, and the
Netherlands.
--------------------------------------------------------------------------------
8 o ACM MANAGED DOLLAR INCOME FUND
------------------------
PORTFOLIO OF INVESTMENTS
------------------------
PORTFOLIO OF INVESTMENTS
March 31, 2002 (unaudited)
Principal
Amount
(000) U.S. $ Value
--------------------------------------------------------------------------------
SOVEREIGN DEBT OBLIGATIONS-69.8%
Sovereign Debt Securities-64.4%
Brazil-19.0%
Republic of Brazil
11.00%, 8/17/40(a) ............................ $ 33,450 $ 27,562,800
12.75%, 1/15/20 ............................... 2,500 2,447,500
------------
30,010,300
------------
Colombia-0.8%
Republic of Colombia
8.375%, 2/15/27 ............................... 625 447,812
11.75%, 2/25/20 ............................... 835 832,912
------------
1,280,724
------------
Ecuador-2.2%
Republic of Ecuador
5.00%, 8/15/30(b)(c) .......................... 1,850 1,003,625
12.00%, 11/15/12 .............................. 3,000 2,407,500
------------
3,411,125
------------
Mexico-10.3%
United Mexican States
11.375%, 9/15/16(a) ........................... 13,025 16,300,788
------------
Panama-1.7%
Republic of Panama
2.625%, 7/17/16(b) ............................ 1,833 1,565,750
10.75%, 5/15/20 ............................... 1,000 1,109,000
------------
2,674,750
------------
Philippines-4.7%
Republic of Philippines
9.375%, 1/18/17 ............................... 300 304,500
9.875%, 1/15/19 ............................... 3,500 3,531,500
10.625%, 3/16/25 .............................. 3,450 3,639,750
------------
7,475,750
------------
Russia-22.0%
Ministry Finance of Russia
Series V
3.00%, 5/14/08 ................................ 1,500 1,014,450
Series VI
3.00%, 5/14/06 ................................ 3,600 2,794,680
Russian Federation
5.00%, 3/31/30(a)(b)(c) ....................... 46,650 30,874,594
------------
34,683,724
------------
Turkey-1.6%
Republic of Turkey
11.75%, 6/15/10 ............................... 1,500 1,548,750
11.875%, 1/15/30 .............................. 1,000 1,011,500
------------
2,560,250
------------
--------------------------------------------------------------------------------
ACM MANAGED DOLLAR INCOME FUND o 9
------------------------
PORTFOLIO OF INVESTMENTS
------------------------
Principal
Amount
(000) U.S. $ Value
--------------------------------------------------------------------------------
Ukraine-1.4%
Ukraine Government
11.00%, 3/15/07 ............................... $ 2,136 $ 2,156,292
------------
Venezuela-0.7%
Republic of Venezuela
9.25%, 9/15/27 ................................ 1,500 1,029,750
------------
Total Sovereign Debt Securities
(cost $85,416,757) ............................ 101,583,453
------------
Collateralized Brady Bonds-0.2%
Bulgaria-0.2%
Republic of Bulgaria
Discount FRN
Series A
2.81%, 7/28/24(b)
(cost $335,374) ............................... 450 402,750
------------
Non-Collateralized Brady Bonds-5.2%
Brazil-4.3%
Republic of Brazil
3.25%, 4/15/12(b) ............................. 8,900 6,815,670
------------
Peru-0.9%
Republic of Peru FLIRB
4.00%, 3/07/17(b) ............................. 1,850 1,387,500
------------
Total Non-Collateralized Brady Bonds
(cost $7,885,957) ............................. 8,203,170
------------
Total Sovereign Debt Obligations
(cost $93,638,088) ............................ 110,189,373
------------
U.S. CORPORATE DEBT OBLIGATIONS-51.6%
Aerospace/Defense-0.4%
Sequa Corp.
9.00%, 8/01/09 ................................ 565 567,825
Transdigm, Inc.
10.375%, 12/01/08 ............................. 120 121,800
------------
689,625
------------
Automotive-1.1%
ArvinMeritor, Inc.
8.75%, 3/01/12 ................................ 325 335,562
Collins & Aikman Products Co.
10.75%, 12/31/11(c) ........................... 385 390,775
--------------------------------------------------------------------------------
10 o ACM MANAGED DOLLAR INCOME FUND
------------------------
PORTFOLIO OF INVESTMENTS
------------------------
Principal
Amount
(000) U.S. $ Value
--------------------------------------------------------------------------------
Dana Corp.
10.125%, 3/15/10(c) ........................... $ 410 $ 426,400
Dura Operating Corp.
Series D
9.00%, 5/01/09 ................................ 632 632,000
------------
1,784,737
------------
Broadcasting & Media-2.7%
Allbritton Communications Co.
Series B
8.875%, 2/01/08 ............................... 680 714,850
American Media Operations, Inc.
10.25%, 5/01/09(c) ............................ 255 265,200
Corus Entertainment, Inc.
8.75%, 3/01/12(c) ............................. 250 258,125
Fox Family Worldwide, Inc.
10.25%, 11/01/07 .............................. 905 972,735
Lin Holdings Corp.
10.00%, 3/01/08(d) ............................ 1,050 929,250
Paxson Communications Corp.
10.75%, 7/15/08 ............................... 480 525,600
Sinclair Broadcast Group, Inc.
8.00%, 3/15/12(c) ............................. 315 314,213
8.75%, 12/15/11(c) ............................ 270 279,450
------------
4,259,423
------------
Building/Real Estate-2.2%
D.R. Horton, Inc.
8.00%, 2/01/09 ................................ 730 740,950
LNR Property Corp.
10.50%, 1/15/09 ............................... 1,200 1,254,000
Meritage Corp.
9.75%, 6/01/11 ................................ 535 563,088
Schuler Homes, Inc.
10.50%, 7/15/11 ............................... 805 865,375
------------
3,423,413
------------
Cable-6.0%
Adelphia Communications Corp.
10.25%, 6/15/11 ............................... 560 509,600
10.875%, 10/01/10 ............................. 1,695 1,584,825
Charter Communication Holdings
9.625%, 11/15/09 .............................. 310 296,050
10.00%, 5/15/11 ............................... 10 9,600
10.75%, 10/01/09 .............................. 2,600 2,600,000
11.75%, 5/15/11(d) ............................ 1,985 1,161,225
12.125%, 1/15/12(c)(d) ........................ 480 261,600
Echostar DBS Corp.
9.25%, 2/01/06 ................................ 1,060 1,091,800
9.375%, 2/01/09 ............................... 1,285 1,342,825
Mediacom Broadband LLC
11.00%, 7/15/13 ............................... 550 610,500
------------
9,468,025
------------
--------------------------------------------------------------------------------
ACM MANAGED DOLLAR INCOME FUND o 11
------------------------
PORTFOLIO OF INVESTMENTS
------------------------
Principal
Amount
(000) U.S. $ Value
--------------------------------------------------------------------------------
Chemicals-3.5%
Airgas, Inc.
9.125%, 10/01/11 .............................. $ 275 $ 292,875
Compass Minerals Group, Inc.
10.00%, 8/15/11(c) ............................ 140 148,225
Equistar Chemical Funding L.P.
10.125%, 9/01/08 .............................. 385 396,550
Ferro Corp.
9.125%, 1/01/09 ............................... 310 322,024
Georgia Gulf Corp.
10.375%, 11/01/07 ............................. 770 831,600
Huntsman ICI Chemicals
10.125%, 7/01/09 .............................. 1,110 1,026,750
Lyondell Chemical Co.
9.50%, 12/15/08(c) ............................ 190 191,900
Series A
9.625%, 5/01/07 ............................... 185 190,087
Series B
10.875%, 5/01/09 .............................. 995 977,588
OM Group, Inc.
9.25%, 12/15/11(c) ............................ 470 491,150
Resolution Performance Products
13.50%, 11/15/10 .............................. 520 585,000
------------
5,453,749
------------
Communications - Fixed-0.3%
Intermedia Communications, Inc.
Series B
11.25%, 7/15/07(d) ............................ 215 198,875
Time Warner Telecom, Inc.
10.125%, 2/01/11 .............................. 500 345,000
------------
543,875
------------
Communications - Mobile-6.5%
American Cellular Corp.
9.50%, 10/15/09 ............................... 915 677,100
Dobson/Sygnet Communications
12.25%, 12/15/08 .............................. 750 738,750
Iridium LLC Capital Corp.
Series B
14.00%, 7/15/05(e) ............................ 5,000 325,000
Nextel Communications, Inc.
5.25%, 1/15/10 ................................ 885 446,925
9.375%, 11/15/09 .............................. 1,085 724,238
9.95%, 2/15/08(d) ............................. 1,035 618,412
10.65%, 9/15/07(d) ............................ 190 126,825
Nextel Partners, Inc.
11.00%, 3/15/10 ............................... 600 379,500
12.50%, 11/15/09(c) ........................... 295 199,125
Rural Cellular Corp.
9.75%, 1/15/10(c) ............................. 635 527,050
--------------------------------------------------------------------------------
12 o ACM MANAGED DOLLAR INCOME FUND
------------------------
PORTFOLIO OF INVESTMENTS
------------------------
Principal
Amount
(000) U.S. $ Value
--------------------------------------------------------------------------------
TeleCorp PCS, Inc.
10.625%, 7/15/10 .............................. $ 820 $ 924,550
11.625%, 4/15/09(d) ........................... 1,235 1,092,975
Tritel PCS, Inc.
10.375%, 1/15/11 .............................. 590 666,700
12.75%, 5/15/09(d) ............................ 430 380,550
Triton PCS, Inc.
8.75%, 11/15/11 ............................... 495 462,825
11.00%, 5/01/08(d) ............................ 990 868,725
Voicestream Wire
10.375%, 11/15/09 ............................. 1,050 1,139,250
------------
10,298,500
------------
Consumer Manufacturing-1.7%
Collins & Aikman Floorcovering, Inc.
9.75%, 2/15/11(c) ............................. 160 168,200
Jostens, Inc.
12.75%, 5/01/10 ............................... 980 1,100,050
Pennzoil-Quaker State Co.
10.00%, 11/01/08(c) ........................... 445 518,425
Playtex Products, Inc.
9.375%, 6/01/11 ............................... 275 293,563
Sealy Mattress Co.
9.875%, 12/15/07 .............................. 550 563,750
------------
2,643,988
------------
Containers-0.3%
Russell Stanley Holdings, Inc.
9.00%, 11/30/08(c)(f)(h) ...................... 684 513,026
------------
Energy-0.9%
EOTT Energy Partners, L.P.
11.00%, 10/01/09 .............................. 300 283,500
Grey Wolf, Inc.
8.875%, 7/01/07 ............................... 265 271,625
Lomak Petroleum
8.75%, 1/15/07 ................................ 280 281,400
Pride International, Inc.
9.375%, 5/01/07 ............................... 270 282,488
Tesoro Petroleum Corp.
Series B
9.625%, 11/01/08 .............................. 250 255,000
------------
1,374,013
------------
Entertainment & Leisure-1.1%
Premier Parks
9.75%, 6/15/07 ................................ 510 537,413
10.00%, 4/01/08(d) ............................ 320 305,600
Regal Cinemas, Inc.
9.375%, 2/01/12(c) ............................ 215 225,750
Six Flags, Inc.
9.50%, 2/01/09 ................................ 600 627,000
------------
1,695,763
------------
--------------------------------------------------------------------------------
ACM MANAGED DOLLAR INCOME FUND o 13
------------------------
PORTFOLIO OF INVESTMENTS
------------------------
Principal
Amount
(000) U.S. $ Value
--------------------------------------------------------------------------------
Financial-1.5%
iStar Financial, Inc.
8.75%, 8/15/08 ................................ $ 550 $ 567,264
Markel Capital Trust I
Series B
8.71%, 1/01/46 ................................ 280 224,328
Nationwide CSN Trust
9.875%, 2/15/25(c) ............................ 1,000 1,055,000
PXRE Capital Trust I
8.85%, 2/01/27 ................................ 440 281,600
Williams Scotsman, Inc.
9.875%, 6/01/07(c) ............................ 180 180,900
------------
2,309,092
------------
Food/Beverage-0.3%
B&G Foods, Inc.
9.625%, 8/01/07(c) ............................ 115 117,587
Del Monte Corp.
9.25%, 5/15/11 ................................ 165 173,250
DIMON, Inc.
Series B
9.25%, 10/15/11 ............................... 145 154,425
------------
445,262
------------
Gaming-3.1%
Argosy Gaming Co.
9.00%, 9/01/11 ................................ 275 291,500
Boyd Gaming Corp.
8.75%, 4/15/12(c) ............................. 165 166,650
9.25%, 8/01/09 ................................ 570 602,775
Harrahs Operating Company, Inc.
7.875%, 12/15/05 .............................. 260 269,100
MGM Mirage
8.375%, 2/01/11 ............................... 790 813,700
Mandalay Resort Group
10.25%, 8/01/07 ............................... 715 777,563
Mohegan Tribal Gaming
8.375%, 7/01/11 ............................... 590 600,325
Park Place Entertainment
7.875%, 3/15/10(c) ............................ 295 293,156
9.375%, 2/15/07 ............................... 1,100 1,168,750
------------
4,983,519
------------
Healthcare-2.9%
Concentra Operating Corp.
13.00%, 8/15/09 ............................... 720 817,200
Hanger Orthopedic Group, Inc.
10.375%, 2/15/09(c) ........................... 180 189,000
HCA - The Healthcare Co.
7.875%, 2/01/11 ............................... 880 919,600
Iasis Healthcare Corp.
13.00%, 10/15/09 .............................. 1,085 1,087,712
--------------------------------------------------------------------------------
14 o ACM MANAGED DOLLAR INCOME FUND
------------------------
PORTFOLIO OF INVESTMENTS
------------------------
Principal
Amount
(000) U.S. $ Value
--------------------------------------------------------------------------------
Rotech Healthcare, Inc.
9.25%, 4/01/12(c) ............................. $ 260 $ 269,750
Triad Hospitals Holdings
Series B
8.75%, 5/01/09 ................................ 95 101,650
11.00%, 5/15/09 ............................... 750 841,875
Vanguard Health Systems, Inc.
9.75%, 8/01/11 ................................ 275 291,500
------------
4,518,287
------------
Hotels & Lodging-2.7%
Extended Stay America, Inc.
9.875%, 6/15/11 ............................... 785 824,250
Felcor Lodging, L.P.
8.50%, 6/01/11 ................................ 197 200,447
9.50%, 9/15/08 ................................ 625 659,375
Host Marriott, L.P.
9.25%, 10/01/07 ............................... 850 884,000
9.50%, 1/15/07(c) ............................. 600 631,500
MeriStar Hospitality Corp.
9.125%, 1/15/11(c) ............................ 455 466,944
MeriStar Hospitality Operating Partnership, L.P.
10.50%, 6/15/09(c) ............................ 275 293,906
Vail Resorts, Inc. ...............................
8.75%, 5/15/09(c) ............................. 345 348,450
------------
4,308,872
------------
Industrial-1.2%
Applied Extrusion Technologies, Inc. .............
10.75%, 7/01/11 ............................... 555 591,075
Flowserve Corp. ..................................
12.25%, 8/15/10 ............................... 520 590,200
Universal Compression, Inc. ......................
9.875%, 2/15/08(d) ............................ 750 723,750
------------
1,905,025
------------
Metals/Mining-0.5%
Commonwealth Industries, Inc. ....................
10.75%, 10/01/06 .............................. 30 30,150
Steel Dynamics, Inc. .............................
9.50%, 3/15/09(c) ............................. 260 271,700
United States Steel LLC
10.75%, 8/01/08(c) ............................ 540 542,700
------------
844,550
------------
Paper/Packaging-3.4%
Crown Paper Co.
11.00%, 9/01/05(e) ............................ 5,000 0
Owens-Brockway Glass Container, Inc.
8.875%, 2/15/09(c) ............................ 375 384,375
Owens-Illinois, Inc.
7.80%, 5/15/18 ................................ 385 335,913
7.85%, 5/15/04 ................................ 230 226,550
--------------------------------------------------------------------------------
ACM MANAGED DOLLAR INCOME FUND o 15
------------------------
PORTFOLIO OF INVESTMENTS
------------------------
Principal
Amount
(000) U.S. $ Value
--------------------------------------------------------------------------------
Plastipak Holdings, Inc.
10.75%, 9/01/11(c) ............................ $ 550 $ 601,563
Riverwood International Corp.
10.625%, 8/01/07 .............................. 510 539,325
Sealed Air Corp.
8.75%, 7/01/08(c) ............................. 1,260 1,279,830
Stone Container
9.25%, 2/01/08 ................................ 750 806,250
9.75%, 2/01/11 ................................ 1,085 1,177,225
------------
5,351,031
------------
Petroleum Products-0.5%
Frontier Oil Corp.
11.75%, 11/15/09 .............................. 700 749,000
------------
Retail-0.5%
Advance Stores Company, Inc.
10.25%, 4/15/08 ............................... 460 485,300
United Auto Group, Inc.
9.625%, 3/15/12(c) ............................ 245 252,656
------------
737,956
------------
Service-4.1%
Alderwoods Group, Inc.
12.25%, 1/02/09 ............................... 295 312,700
Allied Waste North America
8.50%, 12/01/08(c) ............................ 540 544,050
8.875%, 4/01/08 ............................... 810 832,275
10.00%, 8/01/09 ............................... 2,580 2,625,150
Coinmach Corp.
9.00%, 2/01/10(c) ............................. 250 258,750
Iron Mountain, Inc.
8.625%, 4/01/13 ............................... 410 432,550
Service Corporation International
6.00%, 12/15/05 ............................... 455 420,306
6.30%, 3/15/20(g) ............................. 45 44,325
6.50%, 3/15/08 ................................ 240 215,400
7.70%, 4/15/09 ................................ 575 541,938
Stewart Enterprises, Inc.
10.75%, 7/01/08 ............................... 230 254,150
------------
6,481,594
------------
Supermarket/Drug-0.9%
Fleming Companies, Inc.
Series B
10.50%, 12/01/04 .............................. 490 503,475
10.625%, 7/31/07 .............................. 25 25,594
Pathmark Stores, Inc.
8.75%, 2/01/12(c) ............................. 280 289,800
--------------------------------------------------------------------------------
16 o ACM MANAGED DOLLAR INCOME FUND
------------------------
PORTFOLIO OF INVESTMENTS
------------------------
Principal
Amount
(000) U.S. $ Value
--------------------------------------------------------------------------------
Rite Aid Corp.
11.25%, 7/01/08 ............................... $ 815 $ 639,775
Stater Brothers Holdings
10.75%, 8/15/06 ............................... 75 79,500
------------
1,538,144
------------
Technology-0.8%
Fairchild Semiconductor
10.125%, 3/15/07 .............................. 350 365,750
10.50%, 2/01/09 ............................... 780 863,850
------------
1,229,600
------------
Utilities - Electric & Gas-2.5%
AES Corp.
8.875%. 2/15/11 ............................... 730 551,150
9.375%, 9/15/10 ............................... 250 196,250
CMS Energy Corp.
8.50%, 4/15/11 ................................ 275 285,162
Misson Energy Holding Co.
13.50%, 7/15/08 ............................... 670 731,975
PG&E National Energy Group, Inc.
10.375%, 5/16/11 .............................. 670 694,677
PSEG Energy Holdings
9.125%, 2/10/04 ............................... 1,000 1,003,931
10.00%, 10/01/09 .............................. 280 287,683
South Point Energy Center LLC
9.825%, 5/30/19(c) ............................ 320 262,400
------------
4,013,228
------------
Total U.S. Corporate Debt Obligations
(cost $93,530,609) ............................ 81,563,297
------------
NON-U.S. CORPORATE DEBT
OBLIGATIONS-5.3%
Argentina-0.3%
Supercanal Holdings, SA
10.75%, 11/07/02(e)(h) ........................ 3,478 417,315
------------
Bahamas-0.1%
Sun International Hotels, Ltd.
8.875%, 8/15/11 ............................... 100 101,500
------------
Canada-0.5%
Fairfax Financial Holdings
7.375%, 4/15/18 ............................... 25 17,514
7.75%, 7/15/37 ................................ 165 108,516
Microcell Telecommunications
Series B
14.00%, 6/01/06(d) ............................ 700 490,000
Rogers Wireless, Inc.
9.625%, 5/01/11 ............................... 275 257,125
------------
873,155
------------
--------------------------------------------------------------------------------
ACM MANAGED DOLLAR INCOME FUND o 17
------------------------
PORTFOLIO OF INVESTMENTS
------------------------
Shares or
Principal
Amount
(000) U.S. $ Value
--------------------------------------------------------------------------------
Mexico-2.6%
Innova S. de R.L.
12.875%, 4/01/07 .............................. $ 4,500 $ 4,083,750
------------
Luxembourg-1.4%
Mobile Telesystems Finance S.A.
10.95%, 12/21/04(c) ........................... 2,130 2,172,600
------------
Netherlands-0.0%
Netia Holdings BV
Series B
11.25%, 11/01/07(d)(e) ........................ 475 78,375
------------
United Kingdom-0.4 %
Intertek Finance Plc
Series B
10.25%, 11/01/06 .............................. 650 663,000
------------
Total Non-U.S. Corporate Debt Obligations
(cost $11,825,181) ............................ 8,389,695
------------
Convertible Preferred Stock-0.0%
PSINet, Inc.
7.00%(c)(e)
(cost $600,000) ............................... 15,000 1,050
------------
Non-Convertible Preferred Stock-3.3%
CSC Holdings, Inc.
Series M
11.125% ....................................... 26,009 2,672,425
Intermedia Communications, Inc.
Series B
13.50%(i) ..................................... 1,144 932,360
Nextel Communications
Series E
11.125%(i) .................................... 1,573 566,280
Sinclair Capital
11.625%(i) .................................... 850 89,250
Sovereign REIT
12.00%(c) ..................................... 870 957,000
------------
Total Non-Convertible Preferred Stock
(cost $6,278,071) ............................. 5,217,315
------------
--------------------------------------------------------------------------------
18 o ACM MANAGED DOLLAR INCOME FUND
------------------------
PORTFOLIO OF INVESTMENTS
------------------------
Shares or
Principal
Amount
(000) U.S. $ Value
--------------------------------------------------------------------------------
Common Stock, Warrants & Rights-0.0%
Jostens, Inc. Cl. E
Warrants, expiring 5/01/10(j)(k) .............. 655 $ 9,989
Russell Stanley Holdings, Inc.
Common Stock(j)(l) ............................ 100,000 1
United Mexican States Recovery Rights(j) ......... 3,538,000 6,899
------------
Total Common Stock, Warrants & Rights
(cost $13,100) ................................ 16,889
------------
Short-Term Investment-10.0%
Time Deposit-10.0%
State Street Bank & Trust Co.
1.25%, 4/01/02
(cost $15,716,000) ............................ $ 15,716 15,716,000
------------
Total Investments-140.0%
(cost $221,601,049) ........................... 221,093,619
Other assets less liabilities-(40.0%) ............ (63,220,107)
------------
Net Assets-100.00% ............................... $157,873,512
============
(a) Securities, or portions thereof, with an aggregate market value of
$67,019,376 have been segregated to collateralize reverse repurchase
agreement.
(b) Coupon changes periodically based upon a predetermined schedule. Stated
interest rate in effect at March 31, 2002.
(c) Securities are exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At March 31,
2002, the market value of these securities aggregated $48,888,150 or 31.0%
of net assets.
(d) 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.
(e) Security is in default and is non-income producing.
(f) Coupon is paid-in-kind
(g) Coupon is fixed until March 15, 2003. At that time, the security may then
be remarketed at a new fixed rate.
(h) Illiquid security, valued at fair market value (See Note A.)
(i) Paid-in-kind preferred, quarterly stock payments.
(j) Non-income producing security.
(k) Each warrant entitles the holder to purchase 1.889 shares of common stock
at $.01 per share. The warrants are exercisable until 5/01/10.
(l) Common stock, par value is $0.01 per share.
Glossary of Terms:
FLIRB - Front Loaded Interest Reduction Bond.
FRN - Floating Rate Note.
See notes to financial statements.
--------------------------------------------------------------------------------
ACM MANAGED DOLLAR INCOME FUND o 19
---------------------------------
STATEMENT OF ASSETS & LIABILITIES
---------------------------------
STATEMENT OF ASSETS & LIABILITIES
March 31, 2002 (unaudited)
Assets
Investments in securities, at value
(cost $221,601,049) ..................................... $ 221,093,619
Cash ....................................................... 137,879
Interest receivable ........................................ 4,962,697
Receivable for investment securities sold .................. 1,691,009
Dividend receivable ........................................ 105,638
-------------
Total assets ............................................... 227,990,842
-------------
Liabilities
Reverse repurchase agreements .............................. 69,095,859
Payable for investment securities purchased ................ 598,803
Advisory fee payable ....................................... 151,416
Tender fees payable ........................................ 113,138
Administrative fee payable ................................. 30,279
Accrued expenses and other liabilities ..................... 127,835
-------------
Total liabilities .......................................... 70,117,330
-------------
Net Assets ................................................. $ 157,873,512
=============
Composition of Net Assets
Common stock, at par ....................................... $ 222,608
Additional paid-in capital ................................. 294,969,031
Distributions in excess of net investment income ........... (1,649,148)
Accumulated net realized loss on investment
transactions ............................................ (135,161,549)
Net unrealized depreciation of investments ................. (507,430)
-------------
$ 157,873,512
=============
Net Asset Value Per Share
(based on 22,260,769 shares outstanding) ................ $7.09
=====
See notes to financial statements.
--------------------------------------------------------------------------------
20 o ACM MANAGED DOLLAR INCOME FUND
-----------------------
STATEMENT OF OPERATIONS
-----------------------
STATEMENT OF OPERATIONS
Six Months Ended March 31, 2002 (unaudited)
Investment Income
Interest ......................................... $11,009,007
Dividends ........................................ 296,882 $ 11,305,889
-----------
Expenses
Advisory fee ..................................... 768,432
Administrative fee ............................... 153,691
Audit and legal .................................. 55,896
Printing ......................................... 43,011
Custodian ........................................ 37,363
Transfer agency .................................. 22,924
Directors' fees .................................. 17,241
Loan fees ........................................ 16,372
Registration fees ................................ 12,531
Miscellaneous .................................... 24,273
-----------
Total expenses before interest expense ........... 1,151,734
Interest expense ................................. 1,103,766
-----------
Total expenses ................................... 2,255,500
------------
Net investment income ............................ 9,050,389
------------
Realized and Unrealized Gain (Loss)
on Investments
Net realized loss on investment
transactions .................................. (15,502,798)
Net change in unrealized
appreciation/depreciation
of investments ................................ 33,836,208
------------
Net gain on investments .......................... 18,333,410
------------
Net Increase in Net Assets
from Operations ............................... $ 27,383,799
============
See notes to financial statements.
--------------------------------------------------------------------------------
ACM MANAGED DOLLAR INCOME FUND o 21
----------------------------------
STATEMENT OF CHANGES IN NET ASSETS
----------------------------------
STATEMENT OF CHANGES
IN NET ASSETS
Six Months Ended Year Ended
March 31, 2002 September 30,
(unaudited) 2001
---------------- -------------
Increase (Decrease) in Net Assets
from Operations
Net investment income .......................... $ 9,050,389 $ 21,776,043
Net realized loss on investment
transactions ................................ (15,502,798) (27,137,698)
Net change in unrealized
appreciation/depreciation
of investments .............................. 33,836,208 (10,959,081)
------------ ------------
Net increase (decrease) in net assets
from operations ............................. 27,383,799 (16,320,736)
Dividends and Distributions
to Shareholders from:
Net investment income .......................... (10,538,122) (21,047,520)
Tax return of capital .......................... -0- (1,562,731)
------------ ------------
Net decrease in net assets resulting
from dividends and distributions
to shareholders ............................. (10,538,122) (22,610,251)
Common Stock Transactions
Reinvestment of dividends resulting in
the issuance of Common Stock ................ 918,285 1,365,636
Tender offer (resulting in the redemption
of 0 and 248,723 shares of
common stock, respectively) ................. -0- (1,766,095)
Tender offer costs ............................. -0- (212,169)
------------ ------------
Total increase (decrease) ...................... 17,763,962 (39,543,615)
Net Assets
Beginning of period ............................ 140,109,550 179,653,165
------------ ------------
End of period .................................. $157,873,512 $140,109,550
============ ============
See notes to financial statements.
--------------------------------------------------------------------------------
22 o ACM MANAGED DOLLAR INCOME FUND
-----------------------
STATEMENT OF CASH FLOWS
-----------------------
STATEMENT OF CASH FLOWS
Six Months Ended March 31, 2002 (unaudited)
Increase (Decrease) in Cash from
Operating Activities:
Interest and dividends received ............... $ 10,037,095
Interest expense paid ......................... (1,593,845)
Operating expenses paid ....................... (1,215,507)
------------
Net increase in cash from operating
activities ................................. $ 7,227,743
Investing Activities:
Purchases of long-term investments ............ (83,655,419)
Proceeds from disposition of
long-term investments ...................... 89,302,838
Purchases of short-term investments, net ...... (9,680,000)
------------
Net decrease in cash from
investing activities ....................... (4,032,581)
Financing Activities:(a)
Cash dividends paid ........................... (9,619,837)
Increase in reverse repurchase
agreements, net ............................ 69,062,500
Repayment of bank loan ........................ (62,500,000)
------------
Net decrease in cash from
financing activities ....................... (3,057,337)
------------
Net increase in cash .......................... 137,825
Cash at beginning of period ................... 54
------------
Cash at end of period ......................... $ 137,879
============
--------------------------------------------------------------------------------
Reconciliation of Net Increase in
Net Assets from Operations to Net
Increase in Cash from Operating Activities:
Net increase in net assets from
operations ................................. $ 27,383,799
Adjustments:
Decrease in dividends and interest
receivable ................................. $ 365,701
Accretion of bond discount and
amortization of bond premium ............... (1,634,495)
Decrease in accrued expenses and
other assets ............................... (63,773)
Decrease in interest payable .................. (490,079)
Net realized loss on investment
transactions ............................... 15,502,798
Net change in unrealized
appreciation/depreciation
on investments ............................. (33,836,208)
------------
Total adjustments ............................. (20,156,056)
------------
Net Increase in Cash from Operating
Activities ................................. $ 7,227,743
============
(a) 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 23
-----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
NOTES TO FINANCIAL STATEMENTS
March 31, 2002 (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 accounting principles generally accepted in the United States 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 traded on a national securities exchange or on a foreign
securities exchange (other than foreign securities exchanges whose operations
are similar to those of the United States over-the-counter market) are generally
valued at the last reported sale price or, if there was no sale on such day, the
last bid price quoted on such day. If no bid prices are quoted, then the
security is valued at the mean of the bid and asked prices as obtained on that
day from one or more dealers regularly making a market in that security.
Securities traded on the over-the-counter market, and securities listed on a
foreign securities exchange whose operations are similar to the United States
over-the-counter market and securities listed on a national securities exchange
whose primary market is believed to be over-the-counter are valued at the mean
of the closing bid and asked price provided by two or more dealers regularly
making a market in such securities. U.S. government securities and other debt
securities which mature in 60 days or less are valued at amortized cost unless
this method does not represent fair value. Securities for which market
quotations are not readily available are valued at fair value as determined in
good faith by, or in accordance with procedures approved by, the Board of
Directors. Fixed income securities may be valued on the basis of prices provided
by a pricing service when such prices are believed to reflect the fair market
value of such securities. Listed put and call options purchased by the Fund 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.
2. Taxes
It is the Fund's policy to meet the requirements of the Internal Revenue Code
applicable to regulated investment companies and to distribute substantially all
of its investment company taxable income and net realized gains if applicable,
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 the
--------------------------------------------------------------------------------
24 o ACM MANAGED DOLLAR INCOME FUND
-----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
investments are purchased or sold. Investment gains and losses are determined on
the identified cost basis. The Fund 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
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.
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 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.
6. Change in Accounting Principle
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. This change has no impact on the net assets of the Fund. Prior to October
1, 2001, the Fund did not amortize premiums on debt securities.
The cumulative effect of this accounting change resulted in a $161,415 decrease
in cost of investments and a corresponding $161,415 decrease in net unrealized
depreciation, based on investments owned by the Fund on October 1, 2001.
The effect of this change for the period ended March 31, 2002, was to decrease
net investment income by $78,036, increase net unrealized depreciation by $2,664
and decrease net realized loss on investment transactions by $80,700. The
statements of changes in net assets and financial highlights for prior periods
have not been restated to reflect the change in accounting principle.
NOTE B
Advisory and Administrative Fees
Under the terms of the Investment Advisory Agreement, the Fund pays Alliance
Capital Management, L.P. (the "Adviser") an advisory fee equal to an annualized
rate of .75 of 1% of the average adjusted weekly net assets of the Fund during
the month.
Under the terms of a Shareholder Inquiry Agency Agreement with Alliance Global
Investor Services, Inc. ("AGIS"), an affiliate of the Adviser, the Fund
reimburses AGIS for costs relating to servicing phone inquiries for the Fund.
The Fund reimbursed AGIS $2,030 during the six months ended March 31, 2002.
--------------------------------------------------------------------------------
ACM Managed Dollar Income Fund o 25
-----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
Under the terms of an Administration Agreement, the Fund pays Princeton
Administrators, L.P. (the "Administrator") a monthly fee equal to the annualized
rate of .15 of 1% of the Fund's average adjusted weekly net assets of the Fund
during the month. The Administrator prepares financial and regulatory reports
for the Fund and provides clerical and other services.
NOTE C
Investment Transactions
Purchases and sales of investment securities (excluding short-term investments,
options and U.S. government securities) aggregated $84,224,822 and $85,285,249,
respectively, for the six months ended March 31, 2002. There were no purchases
or sales of U.S. government or government agency obligations for the six months
ended March 31, 2002.
At March 31, 2002, the cost of investments for federal income tax purposes was
substantially the same as the cost for financial reporting purposes.
Accordingly, gross unrealized appreciation of investments was $20,507,681 and
gross unrealized depreciation of investments was $21,015,111, resulting in net
unrealized depreciation of $507,430.
At September 30, 2001, the Fund had a capital loss carryforward of $92,990,518
of which $57,455,739 expires in the year 2007, $24,635,181 expires in the year
2008 and $10,899,598 expires in the year 2009.
Capital losses incurred after October 31 ("post-October" losses) within the
taxable year are deemed to arise on the first business day of the Fund's next
taxable year. The Fund incurred and will elect to defer net capital losses of
$25,917,547 during fiscal year 2001. To the extent they are so used, future
capital gains will not be distributed to shareholders until they exceed
available capital loss carryovers.
1. Options Transactions
For hedging and investment purposes, the Fund may purchase and write (sell) put
and call options on U.S. and foreign government securities 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 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 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 writing options which expire unexercised
are recorded by the Fund on the expiration date as realized gains from options
written. The differ-
--------------------------------------------------------------------------------
26 o ACM MANAGED DOLLAR INCOME FUND
-----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
ence between the premium and the amount paid on effecting a closing purchase
transaction, including brokerage commissions, is also treated as a realized
gain, or if the premium is less than the amount paid for the closing purchase
transaction, as a realized loss. If a call option is exercised, the premium is
added to the proceeds from the sale of the underlying security in determining
whether the Fund has realized a gain or loss. If a put option is exercised, the
premium reduces the cost basis of the security purchased by the Fund. In writing
an option, the Fund bears the market risk of an unfavorable change in the price
of the security underlying the written option. Exercise of an option written by
the Fund could result in the Fund selling or buying a security at a price
different from the current market value.
There were no transactions in options written for the six months ended March 31,
2002.
2. Interest Rate Swap Agreements
The Fund may enter into interest rate swaps on sovereign debt obligations to
protect itself from interest rate fluctuations on the underlying debt
instruments and 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 another party 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 net unrealized
appreciation or depreciation on interest rate swap contracts.
At March 31, 2002, the Fund had no outstanding interest rate swap contracts.
NOTE D
Capital Stock
There are 300,000,000 shares of $.01 par value capital stock authorized. During
the six months ended March 31, 2002 and for the year ended September 30, 2001,
the Fund issued 126,479 and 186,638 shares, respectively, in connection with the
dividend reinvestment plan.
NOTE E
Bank Borrowing
The Fund entered into a Revolving Credit Agreement with Citibank, N.A.
--------------------------------------------------------------------------------
ACM MANAGED DOLLAR INCOME FUND o 27
-----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
which was renewed on March 23, 2001. On March 22, 2002 the Fund terminated this
agreement. The maximum credit available was $85,000,000. The average daily
amount of the loan outstanding during the period ended March 22, 2002 was
approximately $57,586,705 with a related weighted average annualized interest
rate of 3.92%. The Fund was also obligated to pay Citibank, N.A. a facility fee
computed at the rate of .125% of 1% per annum on the average daily unused
portion of the revolving credit.
NOTE F
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, 2002, the average amount of reverse
repurchase agreements outstanding was $69,062,500 and the daily weighted average
interest rate was 1.76%.
As of March 31, 2002, the Fund had entered into the following reverse repurchase
agreements:
Amount Broker Interest Rate Maturity
=========== ==================== ============= ========
$30,773,305 Deutsche Banc 1.85% 12/31/02
$12,736,542 JPMorgan Chase & Co. 1.85% 12/31/02
$25,586,012 JPMorgan Chase & Co. 1.55% 12/31/02
NOTE G
Concentration of Risk
Investing in securities of foreign companies and foreign governments involves
special risks, which include the possibility of future political and economic
development, which could adversely affect the value of such securities.
Moreover, securities of many foreign companies and foreign governments and their
markets may be less liquid and their prices more volatile than those of
comparable U.S. companies and the United States Government. The Fund invests in
the sovereign debt obligations of countries that are considered emerging market
countries at the time of purchase. Therefore, the Fund is susceptible to
governmental factors and economic and debt restructuring developments adversely
affecting the economies 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.
--------------------------------------------------------------------------------
28 o ACM MANAGED DOLLAR INCOME FUND
--------------------
FINANCIAL HIGHLIGHTS
--------------------
FINANCIAL HIGHLIGHTS
Selected Data For A Share Of Common Stock Outstanding Throughout Each Period
Six Months Ended Year Ended September 30,
March 31, 2002(a) ------------------------------------------------------------
(unaudited) 2001 2000 1999 1998 1997
-------------------------------------------------------------------------------
Net asset value,
beginning of period ........... $6.33 $8.09 $8.39 $8.18 $15.84 $13.08
-------------------------------------------------------------------------------
Income From Investment
Operations
Net investment income(b) ......... .41 .98 1.08 1.25 1.41 1.45
Net realized and unrealized
gain (loss) on investment
and option transactions ....... .83 (1.72) (.22) .34 (6.30) 2.62
-------------------------------------------------------------------------------
Net increase (decrease) in
net asset value from
operations .................... 1.24 (.74) .86 1.59 (4.89) 4.07
-------------------------------------------------------------------------------
Less: Dividends and
Distributions
Dividends from net
investment income ............. (.48) (.95) (1.02) (1.25) (1.56) (1.31)
Distributions in excess of
net investment income ......... -0- -0- -0- (.13) -0- -0-
Distributions in excess of
net realized gain on
investments ................... -0- -0- -0- -0- (1.21) -0-
Tax return of capital ............ -0- (.07) (.14) -0- -0- -0-
-------------------------------------------------------------------------------
Total dividends and
distributions ................. (.48) (1.02) (1.16) (1.38) (2.77) (1.31)
-------------------------------------------------------------------------------
Net assets value, end of period .. $7.09 $6.33 $8.09 $8.39 $8.18 $15.84
===============================================================================
Market value, end of period ...... $7.23 $7.62 $8.50 $10.25 $9.31 $15.00
===============================================================================
Total Return
Total investment return
based on:(c)
Market value .................. 0.09% 3.02% (5.41)% 27.06% (23.44)% 40.87%
Net asset value ............... 19.54% (10.08)% 9.99% 18.69% (36.22)% 33.64%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) ............... $157,874 $140,110 $179,653 $184,618 $176,920 $336,514
Ratio to average net assets of:
Expenses ...................... 2.18%(d) 2.75% 2.70% 2.46% 2.56% 2.36%
Expenses, excluding
interest expense(e) ......... 1.11%(d) 1.13% 1.09% 1.11% 1.03% 1.01%
Net investment income ......... 8.74%(d) 9.90% 9.55% 11.27% 8.19% 8.00%
Portfolio turnover rate ....... 43% 129% 134% 223% 208% 274%
See footnote summary on page 30.
--------------------------------------------------------------------------------
ACM MANAGED DOLLAR INCOME FUND o 29
--------------------
FINANCIAL HIGHLIGHTS
--------------------
(a) 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
reporting purposes only. The effect of this change for the six months
ended March 31, 2002, was to decrease net investment income per share by
$0.004, increase net realized and unrealized gain on investment
transactions per share by $0.004 and decrease the ratio of net investment
income to average net assets from 8.81% to 8.74%. Per share, ratios and
supplemental data for periods prior to October 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 the 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 the 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.
(d) Annualized.
(e) Net interest expense of 1.07%, 1.62%, 1.61%, 1.35%, 1.53%, and 1.35%,
respectively, on loan agreements (See Notes E and F).
--------------------------------------------------------------------------------
30 o ACM MANAGED DOLLAR INCOME FUND
---------------------------------
SUMMARY OF ADDITIONAL INFORMATION
---------------------------------
SUMMARY OF ADDITIONAL
INFORMATION
Supplemental Proxy Information
An Annual Meeting of Shareholders of ACM Managed Dollar Income Fund, Inc. was
held on March 20, 2002 and a subsequent meeting held on April 25, 2002. A
description of each proposal and number of shares voted at the meeting are as
follows:
Voted Authority
For Withheld
================================================================================
1. To elect directors: Class Two Directors
(term expires in 2005)
John H. Dobkin 19,581,785 927,202
William H. Foulk, Jr. 19,593,718 915,219
Dr. James M. Hester 19,554,255 954,682
Voted Voted
For Against Abstain
================================================================================
2. Approval of the
amendment to the
Charter authorizing the
Board of Directors from
time to time to
increase or decrease
the number of
authorized shares
of stock of the
Corporation. 11,942,504 1,834,937 515,148
--------------------------------------------------------------------------------
ACM MANAGED DOLLAR INCOME FUND o 31
----------------------------
GLOSSARY OF INVESTMENT TERMS
----------------------------
GLOSSARY OF INVESTMENT TERMS
benchmark
A standard by which a fund's performance can be measured. A benchmark is usually
an unmanaged index, such as the Standard & Poor's 500 Stock Index or the Lehman
Brothers Aggregate Bond Index.
bond
Bonds are issued by governments or corporations when they need to raise cash.
Bonds are sold, or issued, to investors and have a maturity date, which is the
date the issuer is obligated to repay the investor for the principal, or face
amount, of the bond. Bonds also pay interest until maturity. Bonds are also
called fixed-income securities.
credit rating
Credit ratings are issued by independent organizations, such as the Standard &
Poor's Ratings group or Moody's Investors Service. These groups attempt to
assess the likelihood that the issuer of the bond will be able to make timely
payments of principal and interest on the bond, based on such factors as the
issuer's financial condition and any collateral securing these obligations.
Ratings typically range from AAA, which is the highest rating, to D, which is
the lowest rating.
index
A compilation of securities of similar types of companies that is used to
measure the investment performance of securities within that specific market. An
index is often used as a benchmark for a mutual fund. An investor cannot invest
directly in an index.
liquidity
The ability of an asset to be quickly converted into cash and without penalty.
sector
A group of securities that are similar with respect to maturity, type, rating,
industry and/or coupon. Refers to a distinct part of the economy, for example,
the technology sector.
yield
The rate of return on an asset, usually referring to dividend or interest
payments, expressed as a percentage of current market price.
--------------------------------------------------------------------------------
32 o ACM MANAGED DOLLAR INCOME FUND
----------------
ALLIANCE CAPITAL
----------------
ALLIANCE CAPITAL
The Investment Professional's Choice
Alliance Capital is a leading global investment management firm with
approximately $452 billion in assets under management. In recognition of our
far-reaching investment capabilities, Alliance Capital has been selected by
employee benefit plans for 45 of the FORTUNE 100 companies and public retirement
funds in 43 states as well as by hundreds of foundations, endowments and foreign
institutions. By sharing this institutional money management experience with
millions of mutual fund investors as well, Alliance stands out as a "manager of
choice" for thousands of investment professionals around the world.
At Alliance Capital, we place a premium on investment research. We carefully
select securities based on our proprietary research, conducted by 605 investment
professionals in 36 cities and 19 countries. Our commitment to this process
means that our mutual fund shareholders have their portfolios managed by the
same experienced analysts and portfolio managers who manage the pension funds of
some of America's largest institutional investors.
All information on Alliance Capital is as of 3/31/02.
--------------------------------------------------------------------------------
ACM MANAGED DOLLAR INCOME FUND o 33
------------------
BOARD OF DIRECTORS
------------------
BOARD OF DIRECTORS
John D. Carifa, Chairman
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
Wayne D. Lyski, President
Kathleen A. Corbet, Senior Vice President
Gregory Dube, Senior Vice President
Paul J. DeNoon, Vice President
George D. Caffrey, Vice President
Edmund P. Bergan, Jr., Secretary
Mark D. Gersten, Treasurer & Chief Financial Officer
Vincent S. Noto, Controller
Administrator
Princeton Administrators, L.P.
P.O. Box 9095
Princeton, NJ 08543-9095
Custodian, Dividend Paying Agent,
Transfer Agent And Registrar
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
Legal Counsel
Seward & Kissel LLP
One Battery Park Plaza
New York, NY 10004
Independent Auditors
Ernst & Young LLP
787 Seventh Avenue
New York,NY 10019
(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 at market prices from time
to time shares of its Common Stock in the open market.
This report, including the financial statements therein, is transmitted to
the shareholders of ACM Managed Dollar Income Fund for their information.
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.
--------------------------------------------------------------------------------
34 o ACM MANAGED DOLLAR INCOME FUND
--------------------------------
ALLIANCE CAPITAL FAMILY OF FUNDS
--------------------------------
ALLIANCE CAPITAL FAMILY OF FUNDS
U.S. Stock Funds
Growth & Income Fund
Growth Fund
Health Care Fund
Mid-Cap Growth Fund*
Premier Growth Fund
Quasar Fund
Technology Fund
Global & International Stock Funds
All-Asia Investment Fund
Global Small Cap Fund
Greater China '97 Fund
International Fund
International Premier Growth Fund
The Korean Investment Fund
New Europe Fund
Worldwide Privatization Fund
AllianceBernstein Value Funds
Disciplined Value Fund
Global Value Fund
International Value Fund
Real Estate Investment Fund
Small Cap Value Fund
Utility Income Fund
Value Fund
Select Investor Series
Biotechnology Portfolio
Premier Portfolio
Small Cap Growth Portfolio
Technology Portfolio
Asset Allocation Funds
Balanced Shares
Conservative Investors Fund
Growth Investors Fund
Taxable Bond Funds
Americas Government Income Trust**
Corporate Bond Portfolio
Taxable Bond Funds (continued)
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
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 Southern Africa Fund
The Spain Fund
World Dollar Government Fund
World Dollar Government Fund II
Alliance also offers AFD Exchange Reserves, which serves as the money market
fund exchange vehicle for the Alliance mutual funds.
To obtain a prospectus for any Alliance Capital fund, call your investment
professional, or call Alliance at (800) 227-4618.
* The Alliance Fund changed its name to Alliance Mid-Cap Growth Fund on
February 1, 2002.
** Alliance North American Government Income Trust changed its name to
Alliance Americas Government Income Trust on March 1, 2002.
*** Alliance Global Dollar Government Fund changed its name to Alliance
Emerging Market Debt Fund on March 1, 2002.
--------------------------------------------------------------------------------
ACM MANAGED DOLLAR INCOME FUND o 35
------------------------------
SUMMARY OF GENERAL INFORMATION
------------------------------
SUMMARY OF GENERAL INFORMATION
Shareholder Information
The daily net asset value of the Fund's shares is available from the Fund's
Transfer Agent by calling (800) 426-5523. The Fund also distributes its daily
net asset value to various financial publications or independent organizations
such as Lipper Analytical Services, Inc., Morningstar, Inc. and Bloomberg. Daily
market prices for the Fund's shares are published in the New York Stock Exchange
Composite Transaction section of newspapers each day. The Fund's NYSE trading
symbol is "ADF." Weekly comparative net asset value (NAV) and market price
information about the Fund is published each Monday in The Wall Street Journal,
each Sunday in The New York Times and each Saturday in Barron's and other
newspapers in a table called "Closed-End Funds."
Dividend Reinvestment Plan
Pursuant to the Fund's Dividend Reinvestment Plan shareholders whose shares are
registered in their own names may elect to have all distributions reinvested
automatically in additional shares of the Fund by State Street Bank & Trust
Company, 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 aid
by check mailed directly to the record holder by or under the direction of State
Street Bank & Trust Company. For questions concerning Shareholder account
information, or if you would like a brochure describing the Dividend
Reinvestment Plan, please call State Street Bank and Trust Company at (800)
219-4218.
--------------------------------------------------------------------------------
36 o ACM MANAGED DOLLAR INCOME FUND
ACM Managed Dollar Income Fund
1345 Avenue of the Americas
New York, NY 10105
Alliance Capital [LOGO](R)
The Investment Professional's Choice
(R) These registered service marks used under license from the owner, Alliance
Capital Management L.P.
MDISR0602