0000919574-08-001897.txt : 20151006 0000919574-08-001897.hdr.sgml : 20151006 20080215171818 ACCESSION NUMBER: 0000919574-08-001897 CONFORMED SUBMISSION TYPE: N-14 PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 20080215 DATE AS OF CHANGE: 20080319 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND INC CENTRAL INDEX KEY: 0000825316 IRS NUMBER: 000000000 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-14 SEC ACT: 1933 Act SEC FILE NUMBER: 333-149286 FILM NUMBER: 08623717 BUSINESS ADDRESS: STREET 1: ALLIANCEBERNSTEIN LP STREET 2: 1345 AVENUE OF THE AMERICAS CITY: NEW YORK STATE: NY ZIP: 10105 BUSINESS PHONE: 2129691000 MAIL ADDRESS: STREET 1: ALLIANCEBERNSTEIN LP STREET 2: 1345 AVENUE OF THE AMERICAS CITY: NEW YORK STATE: NY ZIP: 10105 FORMER COMPANY: FORMER CONFORMED NAME: ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND INC DATE OF NAME CHANGE: 19920703 CENTRAL INDEX KEY: 0000825316 S000010437 AllianceBernstein U.S. Government/High Grade Securities Portfolio CENTRAL INDEX KEY: 0000825316 S000010427 AllianceBernstein Americas Government Income Portfolio C000028820 Class A C000028821 Class B S000010428 AllianceBernstein High Yield Portfolio C000028822 Class A C000028823 Class B S000010444 AllianceBernstein Global Bond Portfolio C000028854 Class A C000028855 Class B S000010445 AllianceBernstein Global Dollar Government Portfolio C000028856 Class A C000028857 Class B N-14 1 d854666_n-14.txt As filed with the Securities and Exchange Commission on February 15, 2008 Registration No : Investment Company Act Registration No. 811-5398 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-14 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 Pre-Effective Amendment No. Post-Effective Amendment No. -------------------------------------------- ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND, INC. (Exact Name of Registrant as Specified in Charter) 1345 Avenue of the Americas, New York, New York 10105 (Address of Principal Executive Office) (Zip Code) Registrant's Telephone Number, including Area Code: (800) 221-5672 --------------------------------------------------------------- EMILIE D. WRAPP AllianceBernstein L.P. 1345 Avenue of the Americas New York, New York l0105 (Name and address of agent for service) Copies of communications to: Kathleen K. Clarke Seward & Kissel LLP 1200 G Street, Nw Suite 350 Washington, DC 20005 Approximate Date of Proposed Public Offering: As soon as practicable after this Registration Statement becomes effective. It is proposed that this filing will become effective on March 17, 2008 pursuant to Rule 488 under the Securities Act of 1933. No filing fee is required because an indefinite number of shares has previously been registered pursuant to Rule 24f-2 under the Investment Company Act of 1940, as amended. ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND, INC. CONTENTS OF FORM N-14 REGISTRATION STATEMENT This Registration Statement contains the following papers and documents: o Cover Sheet o Contents of Registration Statement o Form N-14 Cross Reference Sheet o Letter to Shareholders o Notice of Special Meetings of Shareholders o Part A - Proxy Statement/Prospectus o Part B - Statement of Additional Information o Part C - Other Information o Signatures o Exhibits CROSS REFERENCE SHEET ITEM NO. PROXY/PROSPECTUS Part A 1. Beginning of Registration Statement and Cover Page/Questions & Answers Outside Front Cover Page of Prospectus 2. Beginning of Outside Back Cover Page of Questions & Answers Prospectus 3. Fee Table, Synopsis Information and Risk Summary, Appendix A Factors 4. Information about the Transaction Letter to Stockholders, Questions and Answers, Summary, Information About the Proposed Transaction 5. Information about the Registrant Letters to Stockholders, Questions and Answers, Summary, Information About the Funds 6. Information about the Company Being Letters to Stockholders, Questions and Answers, Acquired Summary, Information About the Funds 7. Voting Information Voting Information 8. Interest of Certain Persons and Experts Experts 9. Additional Information Required for Not Applicable Reoffering by Persons Deemed to be Underwriters Part B 10. Cover Page Cover Page 11. Table of Contents Table of Contents 12. Additional Information About the SAI Registrant 13. Additional Information about the Company SAI being Acquired 14. Financial Statements Incorporated by Reference to the SAI 15-17. Information required to be included in Part C is set forth under the appropriate item, so numbered, in Part C of this Registration Statement [LOGO] ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND, INC. -- ALLIANCEBERNSTEIN HIGH YIELD PORTFOLIO ALLIANCEBERNSTEIN GLOBAL BOND PORTFOLIO ALLIANCEBERNSTEIN AMERICAS GOVERNMENT INCOME PORTFOLIO ALLIANCEBERNSTEIN GLOBAL DOLLAR GOVERNMENT PORTFOLIO 1345 Avenue of the Americas New York, New York 10105 [____________], 2008 INFORMATION ABOUT ACQUISITIONS Dear Variable Annuity Contractholder: We are sending this information to you because you hold an interest in a separate account offered by an insurance company that funds a variable insurance product. Certain of the purchase payments made under your contract by you as a contractholder have been allocated to portfolios of AllianceBernstein Variable Products Series Fund, Inc. ("AVP") that invest in fixed-income securities, including AllianceBernstein High Yield Portfolio ("High Yield"), AllianceBernstein Global Bond Portfolio ("Global Bond"), AllianceBernstein Americas Government Income Portfolio ("AGI") and AllianceBernstein Global Dollar Government Portfolio ("Global Dollar"). We sometimes refer to each of High Yield, Global Bond, AGI and Global Dollar as an "Acquired Portfolio" and together, the "Acquired Portfolios". The Board of Directors (the "Directors") of AVP is pleased to announce the acquisitions of the assets and liabilities of the Acquired Portfolios by AllianceBernstein U.S. Government/High Grade Securities Portfolio ("High Grade"), another AVP portfolio, which also invests in fixed-income securities but, as described below, will have a broader investment mandate. We sometimes refer to each of the Acquired Portfolios and High Grade as a "Portfolio" and together, the "Portfolios". The acquisitions, which are expected to become effective early in the second quarter of 2008, do not require a shareholder vote and are described in more detail in the attached Prospectus. You should review the Prospectus carefully and retain it for future reference. The Portfolios currently pursue different investment strategies, exploiting different sectors of the fixed-income market. The Acquired Portfolios are relatively small Portfolios that focus on quality (Global Bond), region (AGI) or sector (High Yield, Global Dollar). After the proposed acquisitions, High Grade will be renamed AllianceBernstein Intermediate Bond Portfolio and will have broadened investment policies as a multi-sector bond fund that invests in a diversified portfolio of fixed-income securities. We anticipate that the acquisitions will result in benefits to the shareholders of the Acquired Portfolios as discussed more fully in the Prospectus. As a general matter, we believe that acquisitions will provide the potential for a more efficient investment opportunities for the Acquired Portfolio shareholders in light of Intermediate Bond's multi-sector investment strategy, which includes investments in corporate debt, foreign currency-denominated debt (including emerging market debt), and below investment grade debt (subject to 25% maximum), as well as U.S. Government debt. The acquisitions should also result in a lower expense ratio for the Acquired Portfolio shareholders. In approving the acquisitions, the Directors have considered, among other things, the investment objectives and investment policies of the Portfolios, the changes in the marketplace for variable annuity contracts since the Acquired Portfolios commenced operations and their prospects for future sales, expense ratio reductions expected to result from the acquisitions, changes in portfolio management, the comparison of fees for the Portfolios and the pro forma combined Portfolio, repositioning of the securities held by the Acquired Portfolios as a result of the acquisitions, the costs of the acquisitions and the allocation thereof, and the tax-free nature of the acquisitions and have concluded that the acquisitions are in the best interests of the Portfolios. Upon the acquisitions of the Acquired Portfolios by High Grade, insurance company shareholders of the Acquired Portfolios will receive shares of High Grade of the same class of shares as the shares they currently own, which have an aggregate net asset value ("NAV") equal to the aggregate NAV of the shareholder's shares in the Acquired Portfolios. The Acquired Portfolios would then terminate. The contractholders of Acquired Portfolios will not be assessed any sales charges or other shareholder fees in connection with the acquisitions. Sincerely, Marc O. Mayer President PROSPECTUS Acquisition of the Assets and Assumption of the Liabilities of ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND, INC. -- ALLIANCEBERNSTEIN HIGH YIELD PORTFOLIO ALLIANCEBERNSTEIN GLOBAL BOND PORTFOLIO ALLIANCEBERNSTEIN AMERICAS GOVERNMENT INCOME PORTFOLIO ALLIANCEBERNSTEIN GLOBAL DOLLAR GOVERNMENT PORTFOLIO By, and in Exchange for Shares of, ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND, INC. -- ALLIANCEBERNSTEIN U.S. GOVERNMENT/HIGH GRADE SECURITIES PORTFOLIO [____________], 2008 TABLE OF CONTENTS Questions and Answers [__] Acquisitions of High Yield, Global Bond, AGI and Global Dollar by High Grade [__] Summary [__] Comparison of Fees [__] Comparison of Investment Advisory Fees [__] Comparison of Investment Objectives and Policies [__] Principal Risks [__] Federal Income Tax Consequences [__] Comparison of Distribution and Purchase Procedures [__] Service Providers [__] Comparison of Business Structures [__] Information about the Transactions [__] Description of the Plans [__] Reasons for the Acquisitions [__] Description of Securities to be Issued [__] Dividends and Other Distributions [__] Federal Income Tax Consequences [__] Capitalization Information [__] Information about the Portfolios [__] Management of the Portfolios [__] Advisory Agreement and Fees [__] Distributor [__] Other Service Providers [__] Legal Matters [__] Experts [__] Financial Highlights [__] Appendix A -- Comparison of Investment Objectives and Policies [__] Appendix B -- Portfolio Performance [__] Appendix C -- Description of Principal Risks of the Portfolios [__] Appendix D -- Certain Information Applicable to Class A and Class B Shares of High Grade [__] Appendix E -- Other Information [__] Appendix F -- Form of Plan of Acquisition and Liquidation [__] Appendix G -- Capitalization [__] Appendix H -- Legal Proceedings [__] Appendix I -- Share Ownership Information [__] Appendix J -- Financial Highlights [__] QUESTIONS AND ANSWERS The following questions and answers provide an overview of key features of the acquisitions and of the information contained in this Prospectus. 1. What is this document and why did we send this document to you? This is a Prospectus that provides you with information about the acquisitions (the "Acquisitions") by AllianceBernstein U.S. Government/High Grade Securities Portfolio ("High Grade"), a series of AllianceBernstein Variable Products Series Fund, Inc. ("AVP"), of the assets and liabilities of the following series of AVP: o AllianceBernstein High Yield Portfolio ("High Yield"); o AllianceBernstein Global Bond Portfolio ("Global Bond"); o AllianceBernstein Americas Government Income Portfolio ("AGI"); and o AllianceBernstein Global Dollar Government Portfolio ("Global Dollar"). We refer to each of High Yield, Global Bond, AGI and Global Dollar as an "Acquired Portfolio" and collectively, the "Acquired Portfolios". We also refer to each of the Acquired Portfolios and High Grade as a "Portfolio" and, collectively, the "Portfolios." On February 7, 2008, the Board of Directors (the "Directors") of AVP approved and declared advisable the Acquisitions of the Acquired Portfolios by High Grade. The Acquisitions do not require approval by the Acquired Portfolios' shareholders. The Directors also approved a modification of High Grade's investment objective and certain changes in High Grade's non-fundamental investment policies to enable it to pursue a multi-sector strategy and provide greater diversification. For a more complete discussion of the investment objective and investment policy revisions of High Grade, see "Comparison of Investment Objectives and Policies" in the Summary. Shares of the Portfolios are not sold directly to individuals. The Portfolios only offer their shares through the separate accounts of life insurance companies ("Insurers"). As a contractholder, you hold a contract with an Insurer that offers the Portfolios as an investment option. The Insurers are the shareholders of record but the contractholders have a beneficial interest in the Portfolios. References to "you" or "shareholders" in this prospectus include the Insurers, as the shareholders of record, and contractholders. Shareholders may contact a Portfolio at 1-800-221-5672 or write to a Portfolio at 1345 Avenue of the Americas, New York, NY 10105. 2. How will the Acquisitions work? The Plans of Acquisition and Liquidation dated as of [_____________], 2008 (the "Plans") provide for (i) the transfer of all the assets of the Acquired Portfolios to High Grade, (ii) the assumption by High Grade of all the liabilities of the Acquired Portfolios, (iii) the issuance to the Acquired Portfolios' shareholders of the equivalent class of shares of High Grade, equal in aggregate net asset value ("NAV") to the NAV of their former Acquired Portfolio shares in redemption of their Acquired Portfolio shares, and (iv) the termination of the Acquired Portfolios. The shareholders of the Acquired Portfolios are insurance company separate accounts ("Separate Accounts") used to fund variable life and annuity products ("Variable Products"). As a Variable Product owner, you have a beneficial interest in the insurance company's shares of the Acquired Portfolios. The insurance companies will receive shares of a class of High Grade corresponding to the class of shares of the Acquired Portfolios they now own. The High Grade shares that shareholders of the Acquired Portfolios receive will have the same aggregate NAV as the shares of the Acquired Portfolios held before the Acquisitions. Shareholders of the Acquired Portfolios will not be assessed any sales charges or other shareholder fees in connection with the Acquisitions. Class B shares of both the Acquired Portfolios and High Grade are subject to distribution fees. 3. Why are the Acquisitions taking place? After considering the recommendation of AllianceBernstein L.P. (the "Adviser"), the Directors concluded that participation by each of the Acquired Portfolios in the Acquisitions is in the best interests of each of the Acquired Portfolios. The Directors also concluded that the Acquisitions would benefit each Acquired Portfolio's shareholders by resulting in, among other things, a reduction in expenses, and would not dilute shareholders' interests. In reaching this conclusion, the Directors considered, among other things, the investment objectives and investment policies of the Portfolios, the changes in the marketplace for Variable Products since Acquired Portfolios commenced operations, the expense ratio reductions expected to result from the Acquisitions, changes in portfolio management, the comparison of fees for the Portfolios and the pro forma combined Portfolio, the costs of the Acquisitions and the allocation thereof, and the tax-free nature of the Acquisitions. 4. When will the Acquisitions take place? The Acquisitions are expected to take place early in the second quarter of 2008. 5. Who will bear the expenses of the Acquisitions? The expenses of the Acquisitions will be borne proportionately by the Acquired Portfolios based on their net assets at the time of the Acquisitions. 6. Where may I find additional information regarding the Portfolios? Additional information about the Portfolios is available in the Statement of Additional Information ("SAI") dated [__________], 2008 that has been filed with the Securities and Exchange Commission ("SEC") in connection with this Prospectus. The SAI and each Portfolio's Annual Report to Shareholders, which contains audited financial statements for the Portfolios' fiscal year ended December 31, 2007, are incorporated by reference into this Prospectus. In addition, the Prospectus and SAI for each Portfolio dated May 1, 2007 (the "Prospectuses") and each Portfolio's Semi-Annual Report dated June 30, 2007 are also incorporated by reference into this Prospectus. Additional copies of the Annual and Semi-Annual Reports and the Prospectus for each Portfolio are available at www.AllianceBernstein.com and are also available, along with this Prospectus and SAI, upon request, without charge, by writing to the address or calling the telephone number listed below. By mail: AllianceBernstein Investor Services, Inc. P.O. Box 786003 San Antonio, TX 78278-6003 By phone: For Information: 1-800-221-5672 For Literature: 1-800-227-4618 All of this additional information is also available in documents filed with the SEC. You may view or obtain these documents from the SEC: In person: at the SEC's Public Reference Room in Washington, DC By phone: 1-202-551-8090 (for information on the operations of the Public Reference Room only) By mail: Public Reference Section, Securities and Exchange Commission, Washington, DC 20549-0102 (duplicating fee required) By electronic mail: publicinfo@sec.gov (duplicating fee required) On the Internet: www.sec.gov Other Important Things to Note: o You may lose money by investing in the Portfolios. o The SEC has not approved or disapproved these securities or passed upon the adequacy of this Prospectus. Any representation to the contrary is a criminal offense. ACQUISITIONS OF HIGH YIELD, GLOBAL BOND, AGI AND GLOBAL DOLLAR BY HIGH GRADE On February 7, 2008, the Directors declared advisable and voted to approve the Plans and the Acquisitions. The Plans provide for (i) the transfer of all the assets of the Acquired Portfolios to High Grade, (ii) the assumption by High Grade of all the liabilities of the Acquired Portfolios, (iii) the issuance to the Acquired Portfolios' shareholders of shares of an equivalent class of shares of High Grade, equal in aggregate NAV to the NAV of their former Acquired Portfolio shares in redemption of their Acquired Portfolio shares, and (iv) the termination of the Acquired Portfolios. Each Acquired Portfolio shareholder will receive the number of full and fractional shares of an equivalent class of shares of High Grade having an aggregate NAV that, on the effective date of the Acquisitions, is equal to the aggregate NAV of the shareholder's shares of the Acquired Portfolio. Shareholders of the Acquired Portfolios will recognize no gain or loss. The Acquisitions are expected to occur early in the second quarter of 2008. The Acquisitions do not require shareholder approval. The Directors concluded that participation by each of the Acquired Portfolios in the Acquisitions is in the best interests of each of the Acquired Portfolios. The Directors also concluded that the Acquisitions would not dilute shareholders' interests. In reaching this conclusion, the Directors considered, among other things, the investment objectives and investment policies of the Portfolios, the changes in the marketplace for Variable Products since the Acquired Portfolios commenced operations, expense ratio reductions for shareholders expected to result from the Acquisitions, changes in portfolio management, the comparison of fees for the Portfolios and the pro forma combined Portfolio, the costs of the Acquisitions and the allocation thereof, and the tax-free nature of the Acquisitions. For a more complete discussion of the factors considered by the Directors in approving the Acquisitions, see "Reasons for the Acquisitions" in "Information about the Transactions." SUMMARY The following summary highlights differences between High Grade and the Acquired Portfolios. This summary is not complete; for more complete information, please read this entire document. Note that certain information is presented as of September 30, 2007. At the February 5-7, 2008 Regular Board Meeting (the "Board Meeting"), the Portfolios' Adviser, AllianceBernstein L.P., represented to the Directors that, if the information were updated, it would not differ in any material respect. The following is a brief summary of information about each Portfolio: o High Yield is a diversified open-end fund, with assets, as of September 30, 2007, of approximately $36 million, that invests primarily in high yield debt securities, also known as "junk bonds", which are rated below investment grade; o Global Bond is a non-diversified open-end fund, with assets, as of September 30, 2007, of approximately $39 million, that invests primarily in a globally diversified portfolio of high-quality debt securities denominated in the U.S. Dollar and a range of currencies other than the U.S. Dollar; o AGI is a non-diversified open-end fund, with assets, as of September 30, 2007, of approximately $38 million, that invests primarily in debt securities issued or guaranteed by the governments of the United States, Canada, and Mexico, their political subdivisions, agencies, instrumentalities or authorities; and o Global Dollar is a non-diversified open-end fund, with assets, as of September 30, 2007, of approximately $26 million, that invests primarily in government securities, including sovereign debt obligations, and substantially all of its assets in lower-rated securities. The average annual total returns for Class A shares of each of the Portfolios, as of December 31, 2007, were as follows: 1 year 5 years 10 years ------ ------- -------- High Grade 4.85% 3.68% 5.08% High Yield 0.89% 8.16% 2.79% Global Bond 10.35% 5.84% 5.32% AGI 8.38% 6.50% 7.21% Global Dollar 4.53% 13.11% 10.23% These performance numbers do not reflect charges associated with the Variable Products or contractholders' accounts. As discussed below, at the Board Meeting the Directors approved revisions to High Grade's investment policies to enable the Portfolio to pursue a multi-sector strategy and invest in a diversified portfolio of fixed-income securities. In particular, High Grade will no longer be required to limit its investments to U.S. Dollar-denominated debt securities and investment grade securities and will be able to invest up to 25% of its assets in non-U.S. Dollar-denominated foreign fixed-income securities and up to 25% of its assets in securities rated below investment grade. To reflect High Grade's broader policies, the Directors also approved a change in its name to AllianceBernstein Intermediate Bond Portfolio ("Intermediate Bond"). Comparison of Fees The expense ratios of the High Grade Class A and Class B shares are lower than the expense ratios of the Acquired Portfolios' Class A and Class B shares. In addition, the larger asset size of the combined Portfolio will result in a decrease in expenses. As the table below shows, High Grade would have a significantly lower expense ratio after the Acquisitions. The following table shows the Portfolios' expense ratios and pro forma expense ratio of the combined Portfolio for Class A and Class B shares as of September 30, 2007. Class A Class A Class B Class B Total Annual Total Annual Total Annual Total Annual Expense Expense Expense Expense Ratio Ratio Ratio Ratio (excluding (including (excluding (including interest interest interest interest expense) expense) expense expense) -------- -------- ------- -------- High Yield 1.32% - 1.57% - Global Bond 1.26% - 1.51% - AGI 1.26% 2.61% 1.51% 2.86% Global Dollar 1.61% 1.63% 1.86% 1.88% High Grade 0.81% - 1.06% - High Grade (pro forma) 0.63% - 0.88% - As the table indicates, the expense per share would be reduced for both Class A and Class B shares of High Yield and Global Bond by .69% and .63%, respectively, after the Acquisitions. The expense per share would be reduced for both Class A and Class B shares of AGI and Global Dollar by .63% and .98%, respectively, excluding interest expense, and by 1.98% and 1.00%, respectively, including interest expense. This expense information does not include any fees and expenses that may be applied at the separate account level or contract level for any charges that may be incurred under a contract. Inclusion of these charges would increase the expenses reflected above. The following Fee Table provides more information about the expenses of the Portfolios. The purpose of the table below is to assist an investor in understanding the various costs and expenses that a shareholder bears directly and indirectly from an investment in the Portfolios. The table allows you to compare the expenses of each Portfolio and estimates for the pro forma combined Portfolio in its first year following the Acquisitions. Fee Table Shareholder Fees (fees paid directly from your investment) N/A Annual Portfolio Operating Expenses (expenses that are deducted from Portfolio assets) The operating expenses information below is designed to assist contractholders of variable products that invest in the Portfolios in understanding the fees and expenses that they may pay as an investor. Because the information does not reflect deductions at the separate account level or contract level for any charges that may be incurred under a contract, contractholders that invest in a Portfolio should refer to the variable contract prospectus for a description of fees and expenses that apply to contractholders. Inclusion of these charges would increase the fees and expenses provided below. High High Global Global High Grade Yield Bond AGI Dollar Grade (pro forma) Class A Class A Class A Class A Class A Class A ------- ------- ------- ------- ------- ------- Management Fees .50% .45% .50% .50% .45% .45% Other Expenses .79% .78% .70% 1.02% .33% .18% Interest Expense - - 1.08% .04% - - Total Portfolio Operating Expenses 1.29%* 1.23%* 2.28%* 1.56%* .78%* .63%
High High Global Global High Grade Yield Bond AGI Dollar Grade (pro forma) Class B Class B Class B Class B Class B Class B ------- ------- ------- ------- ------- ------- Management Fees .50% .45% .50% .50% .45% .45% Distribution and/or Service (12b-1) Fees .25% .25% .25% .25% .25% .25% Other Expenses .79% .77% .70% 1.02% .33% .18% Interest Expense - - 1.10% .03% - - Total Portfolio Operating Expenses 1.54%* 1.47%* 2.55%* 1.80%* 1.03%* .88%
* The ratio includes expenses attributable to costs of proxy solicitation. Examples The Examples are to help you compare the cost of investing in each Portfolio with the cost of investing in the combined Portfolio on a pro forma combined basis. The Examples do not give effect to any separate account or contract level fees that might be paid by a contractholder. They assume that you invest $10,000 in a Portfolio for the time periods indicated and then redeem all of your shares at the end of those periods. They also assume that your investment has a 5% return each year, that a Portfolio's operating expenses stay the same and that all dividends and distributions are reinvested. High Grade High Yield Global Bond AGI Global Dollar High Grade (pro forma) Class A Class A Class A Class A Class A Class A ------- ------- ------- ------- ------- ----------- After 1 Year $131 $125 $231 $159 $80 $64 After 3 Years $409 $390 $712 $493 $249 $202 After 5 Years $708 $676 $1,220 $850 $433 $351 After 10 Years $1,556 $1,489 $2,615 $1,856 $966 $786
High Grade High Yield Global Bond AGI Global Dollar High Grade (pro forma) Class B Class B Class B Class B Class B Class B ------- ------- ------- ------- ------- ------- After 1 Year $157 $150 $258 $183 $105 $90 After 3 Years $486 $465 $793 $566 $328 $281 After 5 Years $839 $803 $1,355 $975 $569 $488 After 10 Years $1,834 $1,757 $2,885 $2,116 $1,259 $1,084
The projected post-Acquisition pro forma Annual Portfolio Operating Expenses and Examples presented above are based upon numerous material assumptions. Although these projections represent good faith estimates, there can be no assurance that any particular level of expenses or expense reductions will be achieved, because expenses depend on a variety of factors, including the future level of fund assets, many of which are beyond the control of High Grade and the Adviser. Comparison of Investment Advisory Fees High Grade pays investment advisory fees to the Adviser at the same rate as does Global Bond and at a lower rate than does High Yield, AGI and Global Dollar. The advisory fees paid by each Portfolio are: Advisory Fee Rate --------------- High Yield 0.50% Global Bond 0.45% AGI 0.50% Global Dollar 0.50% High Grade 0.45% High Grade (pro forma) 0.45% In addition, the advisory agreements provide for the Portfolios to reimburse the Adviser for expenses incurred in providing administrative services to the Portfolios. In 2006, these reimbursements amounted to .10% for High Grade, .20% for High Yield, .20% for Global Bond, .20% for AGI and .30% for Global Dollar. Comparison of Investment Objectives and Policies At the Board Meeting, the Directors approved changes to High Grade's investment objective and certain of its non-fundamental investment policies to allow High Grade to pursue broader investment opportunities by revising or eliminating restrictions regarding, among other things, types of investments, credit quality and currencies. The changes to High Grade's investment objective and strategies are designed to match one of Adviser's retail fund offerings, as well as an investment strategy currently provided to institutional investors. The revised investment objective and policies include: o Adopting a new investment objective for High Grade. Its new investment objective will be "to generate income and price appreciation without assuming what the Adviser considers undue risk" replacing its former investment objective of seeking "high current income with preservation of capital". o Changing its policy to invest, under normal circumstances, at least 80% of its net assets in U.S. Government or high grade fixed-income securities rated A or better by S&P and Moody's or equivalent rating. High Grade's revised policy will require it to invest, under normal circumstances, at least 80% of its net assets in fixed-income securities. o Permitting High Grade to invest up to 25% of its net assets in below investment grade securities. As noted above, High Grade currently invests 80% of its assets investment grade securities. While it will continue to invest primarily in investment grade securities, High Grade will have the flexibility to seek investment opportunities with higher return potential by investing a portion of its assets in lower rated securities. o Permitting High Grade to invest up to 25% of its net assets in non-U.S. Dollar-denominated foreign fixed-income securities. All of High Grade's investments are currently U.S. Dollar-denominated and High Grade will continue to be able to invest without limit in U.S. Dollar-denominated fixed-income securities with the added flexibility to make investments denominated in other currencies. o Adopting a maturity policy consistent with the Portfolio's name. As noted above, in connection with these policy changes, the Directors approved a change in High Grade's name to Intermediate Bond Portfolio. The use of the name "intermediate" in the Portfolio's name will be reflected in its maturity policy, which will be to maintain a dollar-weighted average maturity of three to ten years and an average duration of three to six years. The name, investment objective and non-fundamental investment policy changes are expected to become effective upon the completion of the Acquisitions, which are expected to occur early in the second quarter of 2008. As noted above, in connection with these policy changes, the Directors approved a change in High Grade's name. For the purposes of this discussion and the discussion of principal risks below, we will refer to High Grade by its new name, Intermediate Bond. The following table shows the investment objective and principal investment strategies of each Portfolio. Investment Objective Principal Investment Strategies -------------------- ------------------------------- High Yield The Portfolio's investment objective is The Portfolio invests, under normal to earn the highest level of current circumstances, at least 80% of its net income available without assuming undue assets in high yield fixed-income risk by investing principally in securities. high-yielding fixed-income securities rated Baa or lower by Moody's or BBB or The Portfolio invests in a diversified lower by S&P or Fitch or, if unrated, of mix of high yield, below investment comparable quality as determined by the grade fixed-income securities, known as Adviser. "junk bonds." As a secondary objective, the Portfolio The Portfolio may invest up to 25% of seeks capital appreciation. its net assets in U.S. Dollar-denominated securities issued by non-U.S. entities and up to 20% of its net assets in non-U.S. Dollar-denominated securities of such issuers. Global Bond The Portfolio's investment The Portfolio invests, under normal objective is to provide a high circumstances, at least 80% of its level of return through a net assets in bonds and other combination of current income and fixed-income securities. capital appreciation by investing in a globally diversified portfolio The Portfolio normally invests at of high-quality debt securities least 65% of its net assets in denominated in the U.S. Dollar and fixed-income securities of at least a range of currencies other than three countries. the U.S. Dollar. The Portfolio invests in U.S. Government securities, securities issued by governments other than the U.S. Government or supranational organization debt securities, corporate debt obligations, and commercial paper of banks and bank holding companies. The Portfolio's non-U.S. investments are generally denominated in currencies other than the U.S. Dollar. The Portfolio invests approximately 25% of its net assets in U.S. Dollar-denominated fixed-income securities. AGI The Portfolio's investment The Portfolio normally invests at objective is to maximize current least 80% of its net assets in income, consistent with what the fixed-income securities of issuers Adviser considers to be prudent located in countries in North, investment risk, that is available Central, or South America and at from a portfolio of debt securities least 80% of its net assets in issued or guaranteed by the government securities. governments of the United States, Canada, and Mexico, their political The Portfolio primarily invests in subdivisions (including Canadian fixed-income securities issued or Provinces, but excluding states of guaranteed by (i) the federal the United States), agencies, governments of the United States, instrumentalities or authorities Canada, and Mexico; (ii) ("Government Securities"). government-related entities in the United States, Canada, and Mexico; and (iii) the provincial governments of Canada and Mexico. To the extent that its assets are not invested in Government Securities, the Portfolio may invest the balance of its net assets in investment grade fixed-income securities issued by, and denominated in the local currencies of, governments of countries located in Central and South America or any of their political subdivisions, agencies, instrumentalities or authorities, provided that such securities are denominated in their local currencies. The Portfolio limits its investments in fixed-income securities issued by the governmental entities of any one such country to 10% of its net assets. The Portfolio invests in investment grade securities denominated in the U.S. Dollar, the Canadian Dollar, and the Mexican Peso and expects to maintain at least 25% of its assets in U.S. Dollar denominated securities Intermediate The Portfolio's investment The combined Portfolio will invest, Bond objective is to generate income and under normal circumstances, at price appreciation without assuming least 80% of its net assets in what the Adviser considers undue fixed-income securities. The risk. Portfolio expects to maintain a dollar-weighted average maturity of three to ten years and an average duration of three to six years. The Portfolio expects to invest in readily marketable fixed-income securities. The Portfolio may invest in mortgage-related and other asset-backed securities, loan participations, inflation-protected securities, structured securities, variable, floating and inverse floating rate instruments, preferred stocks, and may use other investment techniques. The Portfolio may invest without limit in U.S. Dollar-denominated foreign fixed-income securities and may invest up to 25% of its assets in non-U.S. Dollar-denominated foreign fixed-income securities. These investments may include, in each case, developed and emerging market securities
Each of the Portfolios invests primarily in the fixed-income securities but, as noted in the table above, focuses on different sectors of the bond market. All of the Portfolios may invest in foreign fixed-income securities, but Global Dollar's investments are all U.S. Dollar-denominated, while the other Portfolios have greater flexibility to invest in non-U.S. Dollar-denominated securities. In addition, while High Yield and Global Dollar invest substantially all of their assets in below investment grade securities, or junk bonds, Global Bond and AGI generally limit their investments to higher-quality fixed-income securities and Intermediate Bond's investments in below investment grade securities will be limited to 25% of its net assets. Global Bond, AGI and Global Dollar are non-diversified funds and High Yield and Intermediate Bond are diversified, which means that they can invest in a larger number of issuers of fixed-income securities and that they may be less risky investments. Intermediate Bond's investment strategy will be less restricted by sector limitations than the Acquired Portfolios' and the combined Portfolio will be able to pursue income opportunities from government, corporate, emerging market and high yield sources. All of the Portfolios may use leverage techniques, such as reverse repurchase agreements. A more detailed comparison of the investment strategies and policies of the Portfolios is provided in Appendix A and the historical performance of the Portfolios is provided in Appendix B. You can find additional information on the Portfolios in the SAI. The Portfolios currently pursue different investment strategies, exploiting different sectors of the fixed-income market. Because of the multi-sector approach to be followed by the combined Portfolio, the Adviser expects to reposition the Acquired Portfolios' portfolios. The Adviser expects that up to one-half of the assets of each Acquired Portfolio, other than AGI, will be repositioned as a result of the Acquisitions. The Adviser currently expects that the combined Portfolio will retain all of AGI's assets. The remaining securities will be transferred or liquidated prior to the acquisitions. The costs associated with this repositioning are expected to total approximately $150,000. Principal Risks The Portfolios are subject to substantially similar principal risks. Those risks are noted in the table below. A description of each of these risks and other risks of the Portfolios are provided in Appendix C. Interest Inflation Non-U.S. Emerging Market Rate Credit Rate (Foreign) Currency Market PORTFOLIO Risk Risk Risk Risk Risk Risk Risk ------------------------------------------------------------------------------------------------------------------------------------ AllianceBernstein High Yield Portfolio o o o o o o AllianceBernstein Global Bond Portfolio o o o o o o AllianceBernstein Americas Government Income Portfolio o o o o o o o AllianceBernstein Global Dollar Government Portfolio o o o o o o o AllianceBernstein Intermediate Bond Portfolio o o o o o o o
Federal Income Tax Consequences As long as the contracts funded through the separate accounts of the insurance company shareholders qualify as annuity contracts under section 72 of the Internal Revenue Code of 1986, as amended (the "Code"), the Acquisitions will not create any tax liability for contractholders. No gain or loss will be recognized by the Acquired Portfolios or their shareholders as a result of the Acquisitions. The aggregate tax basis of the shares of High Grade received by a shareholder of an Acquired Portfolio (including any fractional shares to which the shareholder may be entitled) will be the same as the aggregate tax basis of the shareholder's shares of the Acquired Portfolio. The holding period of the shares of High Grade received by a shareholder of an Acquired Portfolio (including any fractional share to which the shareholder may be entitled) will include the holding period of the shares of the Acquired Portfolio held by the shareholder, provided that such shares are held as capital assets by the shareholder of the Acquired Portfolio at the time of the Acquisition. The holding period and tax basis of each asset of the Acquired Portfolios in the hands of High Grade as a result of the Acquisitions will be the same as the holding period and tax basis of each such asset in the hands of the Acquired Portfolios prior to the Acquisitions. Provided that the Acquired Portfolio shares surrendered constitute capital assets in the hands of the shareholder, such gain or loss realized by the shareholder will be capital gain or loss upon disposition of the shares. This tax information is based on the advice of Seward & Kissel LLP, counsel to each of the Portfolios. It is a condition to the closing of the Acquisitions that such advice be confirmed in a written opinion of counsel. An opinion of counsel is not binding on the Internal Revenue Service ("IRS"). No distribution of capital gains to the Acquired Portfolios shareholders prior to the closing of the Acquisitions is anticipated. Prior to the closing of the Acquisitions, AVP, if necessary, will declare a distribution to the Acquired Portfolios shareholders which, together with all previous distributions, will have the effect of distributing to the Acquired Portfolios shareholders all of the Acquired Portfolio's investment company taxable income (computed without regard to the deduction for dividends paid) and net realized capital gains, if any, through the closing. A portion of the assets of the Acquired Portfolios may be sold in connection with the Acquisitions. The actual tax impact of such sales will depend on the difference between the price at which such portfolio assets are sold and the Acquired Portfolios' basis in such assets. Any capital gains recognized in these sales will be distributed to the Acquired Portfolios' shareholders (but not contractholders) as capital gain dividends (to the extent of the excess of net realized long-term capital gains over net realized short-term capital losses) and ordinary dividends (to the extent of net realized short-term capital gains) during or with respect to the year of sale, and such distributions will be taxable to shareholders (but not to the contractholders). Additional tax considerations are discussed under the section on "Federal Income Tax Consequences" in "Information about the Transactions". Comparison of Distribution and Purchase Procedures The purchase procedures for the Portfolios are the same. The Portfolios offer their shares through the separate accounts of life insurance companies (the "Insurers"). You may only purchase and sell shares through these separate accounts. See the prospectus of the separate account of the participating insurance company for information on the purchase and sale of the Portfolios' shares. AllianceBernstein Investments, Inc. ("ABI") may from time to time receive payments from Insurers in connection with the sale of the Portfolios' shares through the Insurer's separate accounts. More information on distribution and purchase procedures of High Grade is provided in Appendix D. Service Providers The Portfolios have the same service providers, which will continue in their capacity after the Acquisitions. Comparison of Business Structures Each Portfolio is a series of AVP, which is organized as a Maryland corporation and is governed by its Charter, Bylaws and Maryland law. For more information on the organizational structure and governance of the Portfolios, see Appendix E. INFORMATION ABOUT THE TRANSACTIONS Description of the Plans As provided in the Plans, High Grade will acquire all the assets and assume all the liabilities, expenses and obligations of the Acquired Portfolios at the effective time of the Acquisitions (the "Effective Time"). In return, High Grade will issue, and the Acquired Portfolios will distribute to their shareholders, a number of full and fractional shares of High Grade, determined by dividing the net value of all the assets of each of the Acquired Portfolios by the NAV of one share of High Grade. For this purpose, the Plans provide the times for and methods of determining the net value of the assets of each Portfolio. The Plans provide that shareholders of the Acquired Portfolios will be credited with shares of High Grade corresponding to the aggregate NAV of the Acquired Portfolio shares that the shareholder holds of record at the Effective Time. Following the distribution of High Grade shares in full liquidation of the Acquired Portfolios, the Acquired Portfolios will wind up their affairs and terminate as soon as is reasonably possible after the Acquisitions. The projected expenses of the Acquisitions, largely those for legal, accounting, printing and proxy solicitation expenses, are estimated to total approximately $301,000. The projected expenses will be borne proportionately by the Acquired Portfolios based on their net assets at the time of the Acquisitions. The Acquisitions are expected to occur early in the second quarter of 2008. Under applicable legal and regulatory requirements, none of the Acquired Portfolio's shareholders will be entitled to exercise objecting shareholders' appraisal rights, i.e., to demand the fair value of their shares in connection with the Acquisitions. Therefore, shareholders will be bound by the terms of the Acquisitions under the Plan. However, any shareholder of the Acquired Portfolios may redeem shares of common stock prior to the Acquisitions. Completion of the Acquisitions are subject to certain conditions set forth in the Plans. The Directors may terminate a Plan under certain circumstances. Among other circumstances, the Directors may terminate a Plan upon a determination that proceeding with the Plan is not in the best interests of a Portfolio or of its shareholders. A copy of a form of the Plans for the Acquisitions is attached as Appendix F. Reasons for the Acquisitions At the Board Meeting, the Adviser recommended that the Directors approve the proposed Plans and Acquisitions. The Directors considered the factors discussed below from the point of view of the interests of the Acquired Portfolios and its shareholders. The Directors also considered each Acquisition from the point of view of High Grade and its shareholders. After careful consideration, the Directors (including all Directors who are not "interested persons" of the Portfolios, the Adviser or its affiliates) determined that each Acquisition would be in the best interests of the respective Acquired Portfolio and that the interests of existing shareholders of such Portfolio would not be diluted as a result of the Acquisitions. The Directors have unanimously approved the Plans and Acquisitions. The Adviser presented the following reasons in favor of the Acquisitions: o The Adviser discussed with the Directors that there has been a shift away from a multiple series fund, such as AVP as the preferred funding vehicle for Variable Products, to a customized "private-labeled" platform of investment options subadvised by a number of different investment advisers. While AVP's style-pure and blended equity portfolios remain desirable for some insurance companies, the Adviser believes that combining its smaller and expensive sector and region specific AVP portfolios, such as the Acquired Portfolios, into a more general, multi-sector fixed-income fund offering, such as High Grade after its policy changes, will satisfy the existing insurance company shareholders' needs and may attract new issuers of Variable Products. The combination of the smaller portfolios will allow insurance companies and underlying contractholders to benefit from lower expense ratios, which should result in improved risk-adjusted performance. o The Adviser also discussed with the Directors that it believes that each Acquisition would benefit the respective Acquired Portfolio and its shareholders by resulting in lower expenses. At the Board Meeting, the Directors (with the advice and assistance of independent counsel) also considered, among other things: o potential shareholder benefits, including the fact that total expenses of each class of shares of the combined Portfolio are expected to be significantly lower than the current expenses of comparable classes of shares of each Acquired Portfolio; o planned repositioning of the Acquired Portfolios, which are anticipated to occur shortly after the Acquisitions, (assets of High Grade are not expected to be repositioned as a result of the Acquisitions) including that the Adviser expects that (i) High Grade with its proposed multi-sector approach will be able to retain approximately 50% of the assets of the Acquired Portfolios, which invest in different sectors of the fixed-income market except for AGI, for which 100% of its assets will be retained, (ii) approximately 50% of each Acquired Portfolio's assets, except for AGI will be repositioned as a result of the Acquisition, and (iii) transaction costs associated with the repositioning will be approximately $150,000, or approximately .06% of the combined Portfolio's pro forma net assets; o the current asset levels of each of the Acquired Portfolios and the combined pro forma asset level of the combined Portfolio; o the historical performance of the Portfolios; o the investment objectives and principal investment strategies of the Portfolios; and o the fact that the portfolio managers with day-to-day responsibility for managing the Acquired Portfolios and High Grade are different, but that High Grade's portfolio managers are composed of members of the Core Fixed Income Investment Team, and that, following the Acquisition, the same portfolio managers will share responsibility for management of the combined Portfolio. The Directors also considered, among other things: o the fact that, because the Separate Accounts are not subject to federal income tax on a current basis, there is no need to consider the impact on shareholders of the Acquisition on the Portfolios' capital loss carryforwards; o the form of the Plan and the terms and conditions of the Acquisition; o the fact that the Portfolios have identical investment advisory agreements and pay the same or (in the case of High Yield, AGI and Global Dollar ) higher advisory fee rates; o whether the Acquisition would result in the dilution of shareholders' interests; o the fact that no changes in service providers would result from the Acquisition; o the benefits of the Acquisition to the Adviser, which will benefit from the elimination of separate monitoring and administration of the Acquired Portfolios; o the fact that High Grade will assume all the liabilities, expenses and obligations of the Acquired Portfolios; o the expected federal income tax consequences of the Acquisition; o the costs of the Acquisition, which will be borne proportionately by the Acquired Portfolios based on their assets at the time of the Acquisitions; and o the fact that the Adviser has agreed to indemnify the Acquired Portfolios for a three-year period against any undisclosed or other liabilities not disclosed or not reflected in the NAV of the Acquired Portfolios at the time of the Acquisition, to reimburse High Grade for any costs in connection with investigating any such liability, and to continue certain insurance coverage for a six-year period. Also at the Board Meeting, the Directors approved the Plan on behalf of High Grade, after finding that it was in the best interests of High Grade and that the interests of High Grade's shareholders would not be diluted as a result of the Acquisitions. Description of Securities to be Issued Under the Plans, High Grade will issue additional shares of its Class A and Class B common stock for distribution to corresponding classes of shares of the Acquired Portfolios. Under AVP's Charter, High Grade may issue up to 500,000,000 shares of common stock, par value $.001 per share, for each of these Classes. When the acquisitions of the Acquired Portfolios by High Grade are consummated, Class A and Class B shareholders of each Acquired Portfolio will receive shares of a corresponding class of High Grade having an aggregate NAV equal to the aggregate NAV of the shareholder's shares in the Acquired Portfolio. Each share of High Grade represents an equal proportionate interest with other shares of High Grade. Each share has equal earnings, assets, and voting privileges, and is entitled to dividends and other distributions out of the income earned and gain realized on the assets belonging to High Grade as authorized by the Directors. Shares of High Grade entitle their holders to one vote per full share and fractional votes for fractional shares held. Shares of High Grade received by the Acquired Portfolios in the Acquisitions will be issued at NAV, without a sales charge, and will be fully paid and non-assessable. Dividends and Other Distributions On or before the Closing Date, as defined in the Plans, the Acquired Portfolios will, if necessary, declare and pay as a distribution substantially all their undistributed net investment income, net short-term capital gain, net long-term capital gain and net gains from foreign currency transactions as applicable to maintain their treatment as a regulated investment company. Federal Income Tax Consequences As long as the variable contracts funded through the separate accounts of the insurance company shareholders qualify as annuity contracts under section 72 of the Code, the Acquisitions will not create any tax liability for contractholders. Subject to certain stated assumptions contained therein, each Acquired Portfolio will receive an opinion of Seward & Kissel LLP, its counsel, substantially to the following effect: (i) the Acquisition will constitute a "reorganization" within the meaning of section 368(a) of the Code and that the Acquired Portfolio and High Grade will each be "a party to a reorganization" within the meaning of section 368(b) of the Code; (ii) a shareholder of the Acquired Portfolio will recognize no gain or loss on the exchange of the shareholder's shares of the Acquired Portfolio solely for shares of High Grade; (iii) neither the Acquired Portfolio nor High Grade will recognize any gain or loss upon the transfer of all of the assets of the Acquired Portfolio to High Grade in exchange for shares of High Grade and the assumption by High Grade of the liabilities of the Acquired Portfolio pursuant to the Plan or upon the distribution of shares of High Grade to shareholders of the Acquired Portfolio in exchange for their respective shares of the Acquired Portfolio; (iv) the holding period and tax basis of the assets of the Acquired Portfolio acquired by High Grade will be the same as the holding period and tax basis that the Acquired Portfolio had in such assets immediately prior to the Acquisition; (v) the aggregate tax basis of shares of High Grade received in connection with the Acquisition by each shareholder of the Acquired Portfolio (including any fractional share to which the shareholder may be entitled) will be the same as the aggregate tax basis of the shares of the Acquired Portfolio surrendered in exchange therefor; (vi) the holding period of shares of High Grade received in connection with the Acquisition by each shareholder of the Acquired Portfolio (including any fractional share to which the shareholder may be entitled) will include the holding period of the shares of the Acquired Portfolio surrendered in exchange therefore, provided that such the Acquired Portfolio shares constitute capital assets in the hands of the shareholder as of the Closing Date; and (vii) High Grade will succeed to the capital loss carryovers of the Acquired Portfolio but the use of High Grade's existing capital loss carryovers (as well as the carryovers of the Acquired Portfolio) may be subject to limitation under section 383 of the Code after the Acquisition. This opinion of counsel will not be binding on the IRS or a court and there is no assurance that the IRS or a court will not take a view contrary to those expressed in the opinion. A portion of the assets of the Acquired Portfolios may be sold in connection with the Acquisitions. The actual tax impact of such sales will depend on the difference between the price at which such portfolio assets are sold and the Acquired Portfolios' basis in such assets. Any capital gains recognized in these sales will be distributed to the Acquired Portfolios' shareholders (but not to the contractholders) as capital gain dividends (to the extent of the excess of net realized long-term capital gains over net realized short-term capital losses) and ordinary dividends (to the extent of net realized short-term capital gains) during or with respect to the year of sale, and such distributions will be taxable to shareholders (but not to the contractholders). No distribution of capital gains to the Acquired Portfolios' shareholders prior to the closing of the Acquisitions is anticipated. Prior to the closing of the Acquisitions, AVP, if necessary, will declare a distribution to the Acquired Portfolio shareholders which, together with all previous distributions, will have the effect of distributing to the Acquired Portfolio shareholders all of the Acquired Portfolios' investment company taxable income (computed without regard to the deduction for dividends paid) and net realized capital gains, if any, through the closing. Shareholders of the Acquired Portfolios are encouraged to consult their tax advisers regarding the effect, if any, of the Acquisitions in light of their individual circumstances. Because the foregoing discussion only relates to the federal income tax consequences of the Acquisitions, those shareholders also should consult their tax advisers as to state and local tax consequences, if any, of the Acquisitions. Capitalization Information For information on the existing capitalization of the Portfolios and the pro forma capitalization of High Grade, see Appendix G. INFORMATION ABOUT THE PORTFOLIOS The Portfolios are each a series of AVP, an open-end management investment company registered under the Investment Company Act of 1940, as amended (the "1940 Act") and organized as a Maryland corporation in 1987 under the name Alliance Variable Products Series Fund, Inc. The company's name became AllianceBernstein Variable Products Series Fund, Inc. on April 30, 2003. Management of the Portfolios The Directors of AVP direct the management of the business and affairs of the Portfolios. The Directors approve all significant agreements between the respective Portfolio and persons or companies furnishing services to it, including a Portfolio's agreements with the Adviser and the Portfolio's custodian, transfer and dividend disbursing agent. The day-to-day operations of a Portfolio are delegated to its officers and the Portfolio's Adviser, subject to the Portfolio's investment objective and policies and to general supervision by the Directors. The management of and investment decisions for each of the Portfolio's portfolios are made by certain Investment Policy Groups or Investment Teams. Each Investment Policy Group or Investment Team relies heavily on the fundamental analysis and research of the Adviser's large internal research staff. No one person is principally responsible for making recommendations for each Portfolio's portfolio. The Portfolios are managed by different portfolio management teams, although some of the individual team members serve on more than one team. Subsequent to the consummation of the Acquisitions, the Adviser's Core Fixed-Income Investment Team, which is currently primarily responsible for the day-to-day management of High Grade, will continue to be primarily responsible for day-to-day management of the combined Portfolio. The following table lists the Investment Policy Groups or Investment Teams, the persons within each Investment Policy Group or Investment Team with the most significant responsibility for the day-to-day management of the Portfolio's portfolio, the length of time that each person has been jointly and primarily responsible for the Portfolio, and each person's principal occupation during the past five years. The SAI provides additional information about the portfolio managers' compensation, other accounts managed by the portfolio managers, and the portfolio managers' ownership of securities of the Portfolios. Portfolio and Principal Occupation During Responsible Group Employee; Year; Title The Past Five (5) Years ----------------- --------------------- ----------------------- AllianceBernstein U.S Alison Martier; since 2005; Senior Vice Senior Vice President of the Adviser Government/High Grade President of the Adviser and Director of U.S. with which she has been associated since Securities Portfolio Core Fixed-Income prior to 2002, and Director of U.S. Core Fixed-Income. U.S. Core Fixed-Income Greg Wilensky; since 2005; Senior Vice Senior Vice President of the Adviser, Investment Management President of the Adviser and Director of with which he has been associated since Team Stable Value Investments prior to 2002, and Director of Stable Value Investments. Shawn E. Keegan, since 2007, Vice Vice President of the Adviser, with President of the Adviser which he has been associated since prior to 2002. Joran Laird, since 2007, Vice President Vice President of the Adviser, with of the Adviser which he has been associated since prior to 2002. Jeffery S. Phlegar, since 2007, Executive Vice President of the Adviser, Executive Vice President of the Adviser, with which he has been associated since Chief Investment Officer and Co-Head of prior to 2002, and Chief Investment Fixed Income Officer and Co-Head of Fixed Income. Douglas J. Peebles; since 2007; Executive Vice President of the Adviser, Executive Vice President of the Adviser, with which he has been associated since Chief Investment Officer and Co-Head of prior to 2002, and Chief Investment Fixed Income Officer and Co-Head of Fixed Income. AllianceBernstein High Douglas J. Peebles; since 2006; (see (see above) Yield Portfolio above) Global Credit Team Andrew M. Aran; since 2006; Senior Vice Senior Vice President of the Adviser, with President of the Adviser and Director of which he has been associated since prior Global Strategies to 2002, and Director of Global Credit Strategies. Joel J. McKoan; since 2006; Senior Vice Senior Vice President of the Adviser, President of the Adviser and Director of with which he has been associated since Global Credit 2003 and Director of the Global Credit Team. Prior to 2003, he was a Managing Director at UBS Warburg where he headed the North American Debt Syndicate Group, with responsibility for primary trading of corporate debt, emerging market debt and structured products and was Global Co-Head of the CDO Group at UBS Warburg since prior to 2002. Gershon Distenfield; since 2005; Vice Vice President of the Adviser, with President of the Adviser which he has been associated since prior to 2002. AllianceBernstein Global Michael L. Mon; since 2005; Vice Vice President of the Adviser with which Bond Portfolio President of the Adviser he has been associated since prior to 2002. Global Fixed-Income Douglas J. Peebles; since 2006; (see (see above) Investment Team above) Matthew Sheridan; since 2005; Vice Vice President of the Adviser with which he President of the Adviser has been associated since prior to 2002. AllianceBernstein Paul J. DeNoon; since 2002; Senior Vice Senior Vice President of the Adviser Americas Government President of the Adviser and Director of with which he has been associated since Income Portfolio Emerging Market Debt prior to 2002, and Director Emerging Market Debt. Global Fixed-Income Fernando Grisales; since 2007; Assistant Assistant Vice President of the Adviser, Investment Team Vice President of the Adviser with which he has been associated since prior to 2002. Michael L. Mon; since 2003; (see above) (see above) Douglas J. Peebles; since 2006; (see above) (see above) Scott DiMaggio; since 2005; Senior Vice Senior Vice President of the Adviser, President of the Adviser and Director of with which he has been associated since Canada Fixed Income prior to 2002, and Director of Canada Fixed Income. Matthew Sheridan; since 2007; (see above) (see above) AllianceBernstein Global Paul J. DeNoon; since August 2002; (see (see above) Dollar Government above) Portfolio Global Fixed Income Fernando Grisales; since January 2005; (see above) Emerging Markets (see above) Investment Team Michael L. Mon; since July 1999; (see above) (see above) Douglas J. Peebles; since inception; (see (see above) above) Matthew Sheridan; since October 2005; (see (see above) above) Combined Portfolio Alison Martier; (see above) (see above) Core Fixed-Income Greg Wilensky; (see above) (see above) Investment Team Shawn E. Keegan; (see above) (see above) Joran Laird; (see above) (see above) Jeffery S. Phlegar; (see above) (see above)
Advisory Agreement and Fees Each Portfolio's investment adviser is AllianceBernstein L.P., 1345 Avenue of the Americas, New York, New York 10105. The Adviser is a leading international investment adviser managing client accounts with assets as of September 30, 2007 totaling more than $813.0 billion (of which approximately $104.1 billion represented the assets of investment companies). As of September 30, 2007, the Adviser managed retirement assets for many of the largest public and private employee benefit plans (including 55 of the nation's FORTUNE 100 companies), for public employee retirement funds in 37 states, for investment companies, and for foundations, endowments, banks and insurance companies worldwide. The 40 registered investment companies managed by the Adviser, comprising 122 separate investment portfolios, currently have approximately 4.0 million shareholder accounts. The Adviser also serves as administrator for each Portfolio. Under each Portfolio's advisory agreement with the Adviser (each, an "Advisory Agreement"), the Adviser provides investment advisory services and order placement facilities for the Portfolio and pays all compensation of directors and officers of the Portfolio who are affiliated persons of the Adviser. Under the Advisory Agreements of Global Bond and High Grade, each Portfolio pays the Adviser an advisory fee at an annual rate of .45% of its average daily net assets. Under the Advisory Agreements of High Yield, Global Dollar and AGI, each Portfolio pays the Adviser an advisory fee at an annual rate of .50% of its average daily net assets. The Advisory Agreements, by their terms, continue in effect from year to year if such continuance is specifically approved, at least annually, by a majority vote of the Directors of a Portfolio who neither are interested persons of the Portfolio nor have any direct or indirect financial interest in the Advisory Agreement, cast in person at a meeting called for the purpose of voting on such approval. A discussion regarding the basis for the Directors' approval of the investment advisory contracts of the Portfolios is available in each Portfolio's Annual Report to Shareholders for the fiscal year ended December 31, 2007. The Adviser is the subject of certain legal proceedings and a discussion of those proceedings is presented in Appendix H. Distributor AllianceBernstein Investments, Inc. ("ABI" or the "Distributor"), a wholly-owned subsidiary of the Adviser, serves as the distributor of each Portfolio's shares. Under a Distribution Services Agreement, adopted under each Portfolio's Rule 12b-1 plan, the Portfolios pay distribution and service fees to the Distributor at an annual rate of 25% of each Portfolio's average daily net assets attributable to their Class B shares. The Distribution Agreement provides that the Distributor will use such payments in their entirety for distribution assistance and promotional activities. Other Service Providers The Portfolios will have the same service providers after the Acquisitions. AllianceBernstein Investor Services, Inc. ("ABIS"), an affiliate of the Adviser, provides shareholder services for the Portfolios. The Portfolios compensate ABIS for these services. The Bank of New York, 1 Wall Street, New York, New York 10286, serves as custodian for the Portfolios. ABIS, P.O. Box 786003, San Antonio, TX 78278-6003, serves as transfer agent for the Portfolios. After the Acquisitions, The Bank of New York and ABIS will serve, respectively, as custodian and transfer agent for the combined Portfolio. Ernst & Young LLP serves as the independent registered public accounting firm for the Portfolios and will continue to serve in that capacity for the combined Portfolio after the Acquisition. LEGAL MATTERS The validity of the shares of High Grade offered hereby will be passed upon for High Yield, Global Bond, AGI and Global Dollar by Seward & Kissel LLP. EXPERTS The audited financial statements and financial highlights in the Prospectus and the SAI have been included in reliance on the report of Ernst & Young LLP, 5 Times Square, New York, New York, 10036, the independent registered public accounting firm for each of the Portfolios, given on its authority as experts in auditing and accounting. FINANCIAL HIGHLIGHTS Financial highlights information for the Portfolios is available at Appendix J. APPENDIX A COMPARISON OF INVESTMENT POLICIES ------------------------------------------------------------------------------------------------------------------------------------ Combined Portfolio Proposed High Yield High Grade Policy Changes ------------------------------------------------------------------------------------------------------------------------------------ Investment Objective The Portfolio's The Portfolio's The Portfolio's investment objective is investment objective is investment objective is to earn the highest level high current income to generate income and of current income consistent with price appreciation available without preservation of capital. without assuming what the assuming undue risk by Adviser considers undue investing principally in risk. high-yielding fixed-income securities rated Baa or lower by Moody's or BBB or lower by S&P or Fitch or, if unrated, of comparable quality as determined by the Adviser. As a secondary objective, the Portfolio seeks capital appreciation. ------------------------------------------------------------------------------------------------------------------------------------ Investment Policies(1) ------------------------------------------------------------------------------------------------------------------------------------ Status The Portfolio is The Portfolio is No change. diversified. (F) diversified. (F) Rule 35d-1-80% Policy The Portfolio invests, The Portfolio invests, The combined Portfolio under normal under normal will invest, under normal circumstances, at least circumstances, at least circumstances, at least 80% of its net assets in 80% of its net assets in 80% of its net assets in high yield fixed-income U.S. Government or fixed-income securities. securities. high-grade fixed-income securities rated A or The combined Portfolio better by S&P and will be renamed the Moody's or equivalent Intermediate Bond rating. Portfolio. Other Investments The Portfolio invests in The Portfolio's The Portfolio expects to a diversified mix of high investments include invest in readily yield, below investment mortgage-backed marketable fixed-income grade fixed-income securities and securities. The securities, known as repurchase agreements Portfolio may invest in "junk bonds." relating to U.S. mortgage-related and The Portfolio may invest Government securities. other asset-backed up to 25% of its net U.S. Government securities, loan assets in U.S. securities in which the participations, Dollar-denominated Portfolio invests may inflation-protected securities issued by include a significant securities, structured non-U.S. entities and up amount of securities securities, variable, to 20% of its net assets issued by floating and inverse in non-U.S. government-sponsored floating rate Dollar-denominated entities, such as the instruments, preferred securities of such Federal National stocks, and may use other issuers. Mortgage Association, or investment techniques. FNMA, or the Federal Home Loan Mortgage The Portfolio may invest Corporation, or FHLMC, without limit in U.S. which are neither issued Dollar-denominated nor guaranteed by the foreign fixed-income U.S. Government. securities and may invest up to 25% of its assets The Portfolio may also in non-U.S. invest in investment Dollar-denominated grade corporate and foreign fixed-income other debt securities. securities. These These include hybrid and investments may include, structured debt in each case, developed instruments as well as and emerging market U.S. Dollar-denominated securities. securities issued by non-U.S. corporations and governments. ------------------------------------------------------------------------------------------------------------------------------------ Credit Quality The Portfolio normally The Portfolio will not The combined Portfolio does not invest in invest in any security will be able to invest up securities rated below rated below BBB- by S&P to 25% of its assets in Caa3 by Moody's or CCC- or Baa3 by Moody's or below investment grade by S&P or equivalent equivalent quality. securities. rating. ------------------------------------------------------------------------------------------------------------------------------------ Maturity The Portfolio may invest The Portfolio may invest In addition, the in fixed-income in fixed-income Portfolio expects to securities with a range securities with a range invest in fixed-income of maturities from short- of maturities from securities with a to long-term. short- to long-term. dollar-weighted average maturity of generally between three to ten years and an average duration of three to six years. ------------------------------------------------------------------------------------------------------------------------------------ Mortgage-Related and The Portfolio may invest Same. No change. Other Asset-Backed in mortgage-backed Securities securities and other asset-backed securities. ------------------------------------------------------------------------------------------------------------------------------------ Structured The Portfolio may invest Same. In addition, the Securities/Basket in securities issued in Portfolio may invest in Securities structured financing basket securities. transactions, which generally involve aggregating types of debt assets in a pool or special purpose entity and then issuing new securities. ------------------------------------------------------------------------------------------------------------------------------------ Inflation-Protected The Portfolio may invest The Portfolio may invest No change. Securities in inflation-protected in inflation-protected securities. securities. ------------------------------------------------------------------------------------------------------------------------------------ Derivatives The Portfolio may, but is Same. No change. not required to, use derivatives for risk management purposes or as part of its investment strategies. The Portfolio may use forward contracts, forward currency exchange contracts, futures contracts and options on futures contracts, options, swap transactions and credit default swap agreements. ------------------------------------------------------------------------------------------------------------------------------------ Credit Default Swap The Portfolio will not None. No change. Agreements enter into a credit default swap if the swap provides for settlement by physical delivery and such delivery would result in the Portfolio investing less than 80% of its net assets in high yield debt securities. ------------------------------------------------------------------------------------------------------------------------------------ Foreign Currencies/Forward The Portfolio may buy and None. The Adviser will actively Currency Exchange sell currencies other manage the Portfolio's Contracts than the U.S. Dollar or currency exposures and enter into currency may seek investment exchange contracts opportunities by taking principally for the long or short positions purpose of preserving the in currencies through the value of securities use of currency-related denominated in currencies derivatives, including other than the U.S. forward currency exchange Dollar or in anticipation contracts, futures and of purchasing such options on futures, swaps securities. and options. The Portfolio may also conduct currency exchange contracts on a spot basis (i.e., for cash at the spot rate prevailing in the currency exchange market for buying and selling currencies). ------------------------------------------------------------------------------------------------------------------------------------ Preferred Stock The Portfolio may invest None. The Portfolio may invest in preferred stocks. in preferred stocks. ------------------------------------------------------------------------------------------------------------------------------------ Repurchase The Portfolio may enter The Portfolio may enter The Portfolio may enter Agreements into repurchase into repurchase into repurchase agreements terminable agreements pertaining to agreements. within seven days and so U.S. Government long as such investments Securities. do not in the aggregate exceed the Portfolio's investment restrictions. ------------------------------------------------------------------------------------------------------------------------------------ Variable and The Portfolio may invest Same. No change. Floating Rate in variable, floating and Instruments inverse floating rate instruments. ------------------------------------------------------------------------------------------------------------------------------------ Forward The Portfolio may The Portfolio may enter No change. Commitment purchase or sell into forward commitments Transactions and securities on a forward for the purchase or sale When-Issued commitment basis and may of securities. Such Delayed Delivery purchase securities transactions may include Securities offered on a when-issued purchases on a basis. The value of the "when-issued" basis or Portfolio's commitments purchases or sales on a to purchase the "delayed delivery" basis. securities of any one issuer, together with the value of all securities of such issuer owned by the Portfolio, may not exceed 5% of the value of the Portfolio's total assets at the time the initial commitment to purchase such securities is made. ------------------------------------------------------------------------------------------------------------------------------------ Zero Coupon Securities None. The Portfolio may invest No change. in zero coupon Treasury securities. ------------------------------------------------------------------------------------------------------------------------------------ Reverse Repurchase None. The Portfolio may enter No change. Agreements and into reverse repurchase Dollar Rolls agreements and dollar rolls, subject to the Portfolio's limitations on borrowings.. ------------------------------------------------------------------------------------------------------------------------------------ Rights and None. None. No change. Warrants ------------------------------------------------------------------------------------------------------------------------------------ Loan Participations The Portfolio may invest Same. No change. in corporate loans either by participating as co-lender at the time the loan is originated or by buying an interest in the loan in the secondary market from a financial institution or institutional investor. ------------------------------------------------------------------------------------------------------------------------------------ Standby None. None. No change. Commitment Agreements ------------------------------------------------------------------------------------------------------------------------------------ Other Investment The Portfolio may invest Same. No change. Companies in other investment companies as permitted by the Investment Company Act of 1940, as amended, or the rules and regulations thereunder. The Portfolio intends to invest uninvested cash balances in an affiliated money market fund as permitted by Rule 12d1-1 under the 1940 Act. ------------------------------------------------------------------------------------------------------------------------------------ Illiquid Securities The Portfolio will limit Same. No change. its investments in illiquid securities to no more than 15% of its net assets or such other amount permitted by guidance regarding the 1940 Act. ------------------------------------------------------------------------------------------------------------------------------------ Margin The Portfolio may not Same. No change. purchase securities on margin, except (i) as otherwise provided under rules adopted by the Commission under the 1940 Act or by guidance regarding the 1940 Act, or interpretations thereof, and (ii) that the Portfolio may obtain such short-term credits as are necessary for the clearance of portfolio transactions, and the Portfolio may make margin payments in connection with futures contracts, options, forward contracts, swaps, caps, floors, collars and other financial instruments. ------------------------------------------------------------------------------------------------------------------------------------ Short Sales The Portfolio may make Same. No change. short sales a part of overall portfolio management or to offset a potential decline in the value of a security. ------------------------------------------------------------------------------------------------------------------------------------ Securities Lending For the purposes of Same. No change. achieving income, the Portfolio may make secured loans of portfolio securities to brokers, dealers and financial institutions, provided a number of conditions are satisfied, including that the loan is fully collateralized. The Portfolio may pay reasonable finders', administrative, and custodial fees in connection with a loan. ------------------------------------------------------------------------------------------------------------------------------------ Borrowing The Portfolio may not Same. No change. issue any senior security (as that term is defined in the 1940 Act) or borrow money, except to the extent permitted by the 1940 Act or the rules and regulations thereunder (as such statute, rules or regulations may be amended from time to time) or by guidance regarding, or interpretations of, or exemptive orders under, the 1940 Act or the rules or regulations thereunder published by appropriate regulatory authorities. For the purposes of this restriction, margin and collateral arrangements, including, for example, with respect to permitted borrowings, options, futures contracts, options on futures contracts and other derivatives such as swaps, are not deemed to be the issuance of a senior security. (F) ------------------------------------------------------------------------------------------------------------------------------------ Lending The Portfolio may not Same. No change. make loans except through (i) the purchase of debt obligations in accordance with its investment objective and policies; (ii) the lending of portfolio securities; (iii) the use of repurchase agreements; or (iv) the making of loans to affiliated funds as permitted under the 1940 Act, the rules and regulations thereunder (as such statutes, rule or regulations may be amended from time to time), or by guidance regarding, and interpretations of, or exemptive orders under, the 1940 Act. (F) ------------------------------------------------------------------------------------------------------------------------------------ Underwriting The Portfolio may not act Same. No change. as an underwriter of securities, except that the Portfolio may acquire restricted securities under circumstances in which, if such securities were sold, the Portfolio might be deemed to be an underwriter for purposes of the Securities Act of 1933, as amended. (F) ------------------------------------------------------------------------------------------------------------------------------------ Industry The Portfolio may not Same. No change. Concentration concentrate investments in an industry, as concentration may be defined under the 1940 Act or the rules and regulations thereunder (as such statute, rules or regulations may be amended from time to time) or by guidance regarding, interpretations of, or exemptive orders under, the 1940 Act or the rules or regulations thereunder published by appropriate regulatory authorities.(F) ------------------------------------------------------------------------------------------------------------------------------------ Real Estate The Portfolio may not Same. No change. purchase or sell real estate except that it may dispose of real estate acquired as a result of the ownership of securities or other instruments. This restriction does not prohibit the Portfolio from investing in securities or other instruments backed by real estate or in securities of companies engaged in the real estate business. (F) ------------------------------------------------------------------------------------------------------------------------------------ Commodities The Portfolio may not Same. No change. purchase or sell commodities regulated by the Commodity Futures Trading Commission under the Commodity Exchange Act or commodities contracts except for futures contracts and options on futures contracts. (F)
---------- (1) Policies with the notation "F" are fundamental polices. ------------------------------------------------------------------------------------------------------------------------------------ Combined Portfolio Global Bond High Grade Proposed Policy Changes ------------------------------------------------------------------------------------------------------------------------------------ Investment Objective The Portfolio's investment The Portfolio's The Portfolio's objective is to provide a investment objective is investment objective is high level of return high current income to generate income and through a combination of consistent with price appreciation current income and capital preservation of capital. without assuming what appreciation by investing the Adviser considers in a globally diversified undue risk. portfolio of high-quality debt securities denominated in the U.S. Dollar and a range of currencies other than the U.S. Dollar. ------------------------------------------------------------------------------------------------------------------------------------ Investment Policies ------------------------------------------------------------------------------------------------------------------------------------ Status The Portfolio is The Portfolio is No change. non-diversified. diversified. (F) ------------------------------------------------------------------------------------------------------------------------------------ Rule 35d-1-80% Policy The Portfolio invests, The Portfolio invests, The combined Portfolio under normal circumstances, under normal will invest, under at least 80% of its net circumstances, at least normal circumstances, at assets in bonds and other 80% of its net assets in least 80% of its net fixed-income securities. U.S. Government or assets in fixed-income high-grade fixed-income securities. securities rated A or better by S&P and Moody's The combined Portfolio or equivalent rating. will be renamed the Intermediate Bond Portfolio. ------------------------------------------------------------------------------------------------------------------------------------ Other Investments The Portfolio normally The Portfolio's The Portfolio expects to invests at least 65% of its investments include invest in readily net assets in fixed-income mortgage-backed marketable fixed-income securities of at least securities and repurchase securities. The three countries. agreements relating to Portfolio may invest in The Portfolio invests in U.S. Government mortgage-related and U.S. Government securities, securities. U.S. other asset-backed securities issued by Government securities in securities, loan governments other than the which the Portfolio participations, U.S. Government or invests may include a inflation-protected supranational organization significant amount of securities, structured debt securities, corporate securities issued by securities, variable, debt obligations, and government-sponsored floating and inverse commercial paper of banks entities, such as the floating rate and bank holding Federal National Mortgage instruments, preferred companies. The Portfolio's Association, or FNMA, or stocks, and may use non-U.S. investments are the Federal Home Loan other investment generally denominated in Mortgage Corporation, or techniques. currencies other than the FHLMC, which are neither U.S. Dollar. issued nor guaranteed by The Portfolio may invest the U.S. Government. without limit in U.S. The Portfolio invests Dollar-denominated approximately 25% of its The Portfolio may also foreign fixed-income net assets in U.S. invest in investment securities and may Dollar-denominated grade corporate and other invest up to 25% of its fixed-income securities. debt securities. These assets in non-U.S. include hybrid and Dollar-denominated structured debt foreign fixed-income instruments as well as securities. These U.S. Dollar-denominated investments may include, securities issued by in each case, developed non-U.S. corporations and and emerging market governments. securities. ------------------------------------------------------------------------------------------------------------------------------------ Credit Quality The Portfolio seeks to The Portfolio will not The combined Portfolio minimize investment risk by invest in any security will be able to invest limiting its investments to rated below BBB- by S&P up to 25% of its assets high-quality fixed-income or Baa3 by Moody's or in below investment securities and normally equivalent quality. grade securities. invests in securities rated in the two highest ratings categories. Investments in securities rated below AA will be considered, but the Adviser does not anticipate such investments to exceed 5% of net assets. ------------------------------------------------------------------------------------------------------------------------------------ Maturity The Portfolio's investments The Portfolio may invest In addition, the are expected to have an in fixed-income Portfolio expects to average weighted maturity securities with a range invest in fixed-income that varies between one of maturities from short- securities with a year or less and 10 years. to long-term. dollar-weighted average maturity of generally between three to ten years and an average duration of three to six years. ------------------------------------------------------------------------------------------------------------------------------------ Mortgage-Related and Other The Portfolio may invest in Same. No change. Asset-Backed Securities mortgage-backed securities and other asset-backed securities. ------------------------------------------------------------------------------------------------------------------------------------ Structured The Portfolio may invest in Same. In addition, the Securities/Basket securities issued in Portfolio may invest in Securities structured financing basket securities. transactions, which generally involve aggregating types of debt assets in a pool or special purpose entity and then issuing new securities. ------------------------------------------------------------------------------------------------------------------------------------ Inflation-Protected None. The Portfolio may invest No change. Securities in inflation-protected securities. ------------------------------------------------------------------------------------------------------------------------------------ Derivatives The Portfolio may, but is Same. No change. not required to, use derivatives for risk management purposes or as part of its investment strategies. The Portfolio may use forward contracts, forward currency exchange contracts, futures contracts and options on futures contracts, options, swap transactions and credit default swap agreements. ------------------------------------------------------------------------------------------------------------------------------------ Credit Default Swap The Portfolio will not None. No change. Agreements enter into a credit default swap if the swap provides for settlement by physical delivery and such delivery would result in the Portfolio investing inconsistently with its policy of investing in high-quality debt securities. ------------------------------------------------------------------------------------------------------------------------------------ Foreign Currencies/Forward None. None. The Adviser will actively Currency Exchange Contracts manage the Portfolio's currency exposures and may seek investment opportunities by taking long or short positions in currencies through the use of currency-related derivatives, including forward currency exchange contracts, futures and options on futures, swaps and options. The Portfolio may also conduct currency exchange contracts on a spot basis (i.e., for cash at the spot rate prevailing in the currency exchange market for buying and selling currencies). ------------------------------------------------------------------------------------------------------------------------------------ Preferred Stock None. None. The Portfolio may invest in preferred stocks. ------------------------------------------------------------------------------------------------------------------------------------ Repurchase The Portfolio may enter The Portfolio may enter The Portfolio may enter Agreements into repurchase agreements. into repurchase agreements into repurchase pertaining to U.S. agreements. Government Securities. ------------------------------------------------------------------------------------------------------------------------------------ Variable and The Portfolio may invest in Same. No change. Floating Rate variable, floating and Instruments inverse floating rate instruments. ------------------------------------------------------------------------------------------------------------------------------------ Forward None. The Portfolio may enter No change. Commitment into forward commitments Transactions and for the purchase or sale When-Issued of securities. Such Delayed Delivery transactions may include Securities purchases on a "when-issued" basis or purchases or sales on a "delayed delivery" basis. ------------------------------------------------------------------------------------------------------------------------------------ Zero Coupon Securities None. The Portfolio may invest No change. in zero coupon Treasury securities. ------------------------------------------------------------------------------------------------------------------------------------ Reverse Repurchase None. The Portfolio may enter No change. Agreements and into reverse repurchase Dollar Rolls agreements and dollar rolls, subject to the Portfolio's limitations on borrowings. ------------------------------------------------------------------------------------------------------------------------------------ Rights and The Portfolio may invest in None. No change. Warrants rights and warrants. ------------------------------------------------------------------------------------------------------------------------------------ Loan Participations The Portfolio may invest in Same. No change. corporate loans either by participating as co-lender at the time the loan is originated or by buying an interest in the loan in the secondary market from a financial institution or institutional investor. ------------------------------------------------------------------------------------------------------------------------------------ Standby None. None. No change. Commitment Agreements ------------------------------------------------------------------------------------------------------------------------------------ Other Investment The Portfolio may invest in Same. No change. Companies other investment companies as permitted by the Investment Company Act of 1940, as amended, or the rules and regulations thereunder. The Portfolio intends to invest uninvested cash balances in an affiliated money market fund as permitted by Rule 12d1-1 under the 1940 Act. ------------------------------------------------------------------------------------------------------------------------------------ Illiquid Securities The Portfolio will limit Same. No change. its investments in illiquid securities to no more than 15% of its net assets or such other amount permitted by guidance regarding the 1940 Act. ------------------------------------------------------------------------------------------------------------------------------------ Margin The Portfolio may not Same. No change. purchase securities on margin, except (i) as otherwise provided under rules adopted by the Commission under the 1940 Act or by guidance regarding the 1940 Act, or interpretations thereof, and (ii) that the Portfolio may obtain such short-term credits as are necessary for the clearance of portfolio transactions, and the Portfolio may make margin payments in connection with futures contracts, options, forward contracts, swaps, caps, floors, collars and other financial instruments. ------------------------------------------------------------------------------------------------------------------------------------ Short Sales The Portfolio may make Same. No change. short sales a part of overall portfolio management or to offset a potential decline in the value of a security. ------------------------------------------------------------------------------------------------------------------------------------ Securities Lending For the purposes of Same. No change. achieving income, the Portfolio may make secured loans of portfolio securities to brokers, dealers and financial institutions, provided a number of conditions are satisfied, including that the loan is fully collateralized. The Portfolio may pay reasonable finders', administrative, and custodial fees in connection with a loan. ------------------------------------------------------------------------------------------------------------------------------------ Borrowing The Portfolio may not issue Same. No change. any senior security (as that term is defined in the 1940 Act) or borrow money, except to the extent permitted by the 1940 Act or the rules and regulations thereunder (as such statute, rules or regulations may be amended from time to time) or by guidance regarding, or interpretations of, or exemptive orders under, the 1940 Act or the rules or regulations thereunder published by appropriate regulatory authorities. For the purposes of this restriction, margin and collateral arrangements, including, for example, with respect to permitted borrowings, options, futures contracts, options on futures contracts and other derivatives such as swaps, are not deemed to be the issuance of a senior security. (F) ------------------------------------------------------------------------------------------------------------------------------------ Lending The Portfolio may not make Same. No change. loans except through (i) the purchase of debt obligations in accordance with its investment objective and policies; (ii) the lending of portfolio securities; (iii) the use of repurchase agreements; or (iv) the making of loans to affiliated funds as permitted under the 1940 Act, the rules and regulations thereunder (as such statutes, rule or regulations may be amended from time to time), or by guidance regarding, and interpretations of, or exemptive orders under, the 1940 Act. (F) ------------------------------------------------------------------------------------------------------------------------------------ Underwriting The Portfolio may not act Same. No change. as an underwriter of securities, except that the Portfolio may acquire restricted securities under circumstances in which, if such securities were sold, the Portfolio might be deemed to be an underwriter for purposes of the Securities Act of 1933, as amended. (F) ------------------------------------------------------------------------------------------------------------------------------------ Industry The Portfolio may not Same. No change. Concentration concentrate investments in an industry, as concentration may be defined under the 1940 Act or the rules and regulations thereunder (as such statute, rules or regulations may be amended from time to time) or by guidance regarding, interpretations of, or exemptive orders under, the 1940 Act or the rules or regulations thereunder published by appropriate regulatory authorities. (F) ------------------------------------------------------------------------------------------------------------------------------------ Real Estate The Portfolio may not Same. No change. purchase or sell real estate except that it may dispose of real estate acquired as a result of the ownership of securities or other instruments. This restriction does not prohibit the Portfolio from investing in securities or other instruments backed by real estate or in securities of companies engaged in the real estate business. (F) ------------------------------------------------------------------------------------------------------------------------------------ Commodities The Portfolio may not Same. No change. purchase or sell commodities regulated by the Commodity Futures Trading Commission under the Commodity Exchange Act or commodities contracts except for futures contracts and options on futures contracts. (F)
------------------------------------------------------------------------------------------------------------------------------------ Combined Portfolio Proposed AGI High Grade Policy Changes ------------------------------------------------------------------------------------------------------------------------------------ Investment Objective The Portfolio's investment The Portfolio's investment The Portfolio's objective is to maximize objective is high current investment objective is current income, consistent income consistent with to generate income and with what the Adviser preservation of capital. price appreciation considers to be prudent without assuming what the investment risk, that is Adviser considers undue available from a portfolio risk. of debt securities issued or guaranteed by the governments of the United States, Canada, and Mexico, their political subdivisions (including Canadian Provinces, but excluding states of the United States), agencies, instrumentalities or authorities ("Government Securities"). ------------------------------------------------------------------------------------------------------------------------------------ Investment Policies ------------------------------------------------------------------------------------------------------------------------------------ Status The Portfolio is The Portfolio is No change. non-diversified. diversified. (F) ------------------------------------------------------------------------------------------------------------------------------------ Rule 35d-1-80% Policy The Portfolio normally The Portfolio invests, The combined Portfolio invests at least 80% of its under normal will invest, under normal net assets in fixed-income circumstances, at least circumstances, at least securities of issuers 80% of its net assets in 80% of its net assets in located in countries in U.S. Government or fixed-income securities. North, Central, or South high-grade fixed-income America and at least 80% of securities rated A or The combined Portfolio its net assets in government better by S&P and Moody's will be renamed the securities. or equivalent rating. Intermediate Bond Portfolio. ------------------------------------------------------------------------------------------------------------------------------------ Other Investments The Portfolio primarily The Portfolio's The Portfolio expects to invests in fixed-income investments include invest in readily securities issued or mortgage-backed securities marketable fixed-income guaranteed by (i) the and repurchase agreements securities. The federal governments of the relating to U.S. Portfolio may invest in United States, Canada, and Government securities. mortgage-related and Mexico; (ii) U.S. Government securities other asset-backed government-related entities in which the Portfolio securities, loan in the United States, invests may include a participations, Canada, and Mexico; and significant amount of inflation-protected (iii) the provincial securities issued by securities, structured governments of Canada and government-sponsored securities, variable, Mexico. entities, such as the floating and inverse To the extent that its Federal National Mortgage floating rate assets are not invested in Association, or FNMA, or instruments, preferred Government Securities, the the Federal Home Loan stocks, and may use other Portfolio may invest the Mortgage Corporation, or investment techniques. balance of its net assets in FHLMC, which are neither investment grade issued nor guaranteed by The Portfolio may invest fixed-income securities the U.S. Government. without limit in U.S. issued by, and denominated Dollar-denominated in the local currencies of, The Portfolio may also foreign fixed-income governments of countries invest in investment grade securities and may invest located in Central and South corporate and other debt up to 25% of its assets America or any of their securities. These include in non-U.S. political subdivisions, hybrid and structured debt Dollar-denominated agencies, instrumentalities instruments as well as foreign fixed-income or authorities, provided U.S. Dollar-denominated securities. These that such securities are securities issued by investments may include, denominated in their local non-U.S. corporations and in each case, developed currencies. The Portfolio governments. and emerging market limits its investments in securities. fixed-income securities issued by the governmental entities of any one such country to 10% of its net assets. The Portfolio invests in investment grade securities denominated in the U.S. Dollar, the Canadian Dollar, and the Mexican Peso and expects to maintain at least 25% of its assets in U.S. Dollar denominated securities. ------------------------------------------------------------------------------------------------------------------------------------ Credit Quality The Portfolio expects that The Portfolio will not The combined Portfolio it will not retain a debt invest in any security will be able to invest up security that is downgraded rated below BBB- by S&P or to 25% of its assets in below BBB- or Baa3, or, if Baa3 by Moody's or below investment grade unrated, determined by the equivalent quality. securities. Adviser to have undergone similar credit quality deterioration. ------------------------------------------------------------------------------------------------------------------------------------ Maturity The Portfolio may invest in The Portfolio may invest In addition, the fixed-income securities with in fixed-income securities Portfolio expects to a range of maturities from with a range of maturities invest in fixed-income short- to long-term. from short- to long-term. securities with a dollar-weighted average maturity of generally between three to ten years and an average duration of three to six years. ------------------------------------------------------------------------------------------------------------------------------------ Mortgage-Related and Other The Portfolio may invest in Same. No change. mortgage-backed securities Asset-Backed Securities and other asset-backed securities. ------------------------------------------------------------------------------------------------------------------------------------ Structured The Portfolio may invest in Same. In addition, the Securities/Basket securities issued in Portfolio may invest in Securities structured financing basket securities. transactions, which generally involve aggregating types of debt assets in a pool or special purpose entity and then issuing new securities. ------------------------------------------------------------------------------------------------------------------------------------ Inflation-Protected The Portfolio may invest in The Portfolio may invest No change. Securities inflation-protected in inflation-protected securities. securities. ------------------------------------------------------------------------------------------------------------------------------------ Derivatives The Portfolio may, but is Same. No change. not required to, use derivatives for risk management purposes or as part of its investment strategies. The Portfolio may use forward contracts, forward currency exchange contracts, futures contracts and options on futures contracts, options, swap transactions and credit default swap agreements. ------------------------------------------------------------------------------------------------------------------------------------ Credit Default Swap The Portfolio will not enter None. No change. Agreements into a credit default swap if the swap provides for settlement by physical delivery and such delivery would result in the Portfolio investing (i) less than 80% of its net assets in investment grade securities, or (ii) more than 20% of its net assets in non-investment grade securities rated, at the time of investment, at least B- or B3. ------------------------------------------------------------------------------------------------------------------------------------ Foreign Currencies/Forward None. None. The Adviser will actively Currency Exchange Contracts manage the Portfolio's currency exposures and may seek investment opportunities by taking long or short positions in currencies through the use of currency-related derivatives, including forward currency exchange contracts, futures and options on futures, swaps and options. The Portfolio may also conduct currency exchange contracts on a spot basis (i.e., for cash at the spot rate prevailing in the currency exchange market for buying and selling currencies). ------------------------------------------------------------------------------------------------------------------------------------ Preferred Stock None. None. The Portfolio may invest in preferred stocks. ------------------------------------------------------------------------------------------------------------------------------------ Repurchase The Portfolio may enter into The Portfolio may enter The Portfolio may enter Agreements repurchase agreements into repurchase agreements into repurchase pertaining to the types of pertaining to U.S. agreements. securities in which it Government Securities. invests. ------------------------------------------------------------------------------------------------------------------------------------ Variable and The Portfolio may invest in Same. No change. Floating Rate variable, floating and Instruments inverse floating rate instruments. ------------------------------------------------------------------------------------------------------------------------------------ Forward The Portfolio may enter into The Portfolio may enter No change. Commitment forward commitments. into forward commitments Transactions and for the purchase or sale When-Issued of securities. Such Delayed Delivery transactions may include Securities purchases on a "when-issued" basis or purchases or sales on a "delayed delivery" basis. ------------------------------------------------------------------------------------------------------------------------------------ Zero Coupon Securities The Portfolio may invest in The Portfolio may invest No change. zero coupon Treasury in zero coupon Treasury securities. securities. ------------------------------------------------------------------------------------------------------------------------------------ Reverse Repurchase The Portfolio may enter into Same. No change. Agreements and reverse repurchase Dollar Rolls agreements and dollar rolls, subject to the Portfolio's limitations on borrowings. ------------------------------------------------------------------------------------------------------------------------------------ Rights and The Portfolio may invest in None. No change. Warrants warrants. ------------------------------------------------------------------------------------------------------------------------------------ Loan Participations Same. Same. No change. ------------------------------------------------------------------------------------------------------------------------------------ Standby The Portfolio may enter into None. No change. Commitment standby commitment Agreements agreements. ------------------------------------------------------------------------------------------------------------------------------------ Other Investment The Portfolio may invest in Same. No change. Companies other investment companies as permitted by the Investment Company Act of 1940, as amended, or the rules and regulations thereunder. The Portfolio intends to invest uninvested cash balances in an affiliated money market fund as permitted by Rule 12d1-1 under the 1940 Act. ------------------------------------------------------------------------------------------------------------------------------------ Illiquid Securities The Portfolio will limit its Same. No change. investments in illiquid securities to no more than 15% of its net assets or such other amount permitted by guidance regarding the 1940 Act. ------------------------------------------------------------------------------------------------------------------------------------ Margin The Portfolio may not purchase Same. No change. securities on margin, except (i) as otherwise provided under rules adopted by the Commission under the 1940 Act or by guidance regarding the 1940 Act, or interpretations thereof, and (ii) that the Portfolio may obtain such short-term credits as are necessary for the clearance of portfolio transactions, and the Portfolio may make margin payments in connection with futures contracts, options, forward contracts, swaps, caps, floors, collars and other financial instruments. ------------------------------------------------------------------------------------------------------------------------------------ Short Sales The Portfolio may make short Same. No change. sales a part of overall portfolio management or to offset a potential decline in the value of a security. ------------------------------------------------------------------------------------------------------------------------------------ Securities Lending For the purposes of Same. No change. achieving income, the Portfolio may make secured loans of portfolio securities to brokers, dealers and financial institutions, provided a number of conditions are satisfied, including that the loan is fully collateralized. The Portfolio may pay reasonable finders', administrative, and custodial fees in connection with a loan. ------------------------------------------------------------------------------------------------------------------------------------ Borrowing The Portfolio may not Same. No change. issue any senior security (as that term is defined in the 1940 Act) or borrow money, except to the extent permitted by the 1940 Act or the rules and regulations thereunder (as such statute, rules or regulations may be amended from time to time) or by guidance regarding, or interpretations of, or exemptive orders under, the 1940 Act or the rules or regulations thereunder published by appropriate regulatory authorities. For the purposes of this restriction, margin and collateral arrangements, including, for example, with respect to permitted borrowings, options, futures contracts, options on futures contracts and other derivatives such as swaps, are not deemed to be the issuance of a senior security. (F) ------------------------------------------------------------------------------------------------------------------------------------ Lending The Portfolio may not make Same. No change. loans except through (i) the purchase of debt obligations in accordance with its investment objective and policies; (ii) the lending of portfolio securities; (iii) the use of repurchase agreements; or (iv) the making of loans to affiliated funds as permitted under the 1940 Act, the rules and regulations thereunder (as such statutes, rule or regulations may be amended from time to time), or by guidance regarding, and interpretations of, or exemptive orders under, the 1940 Act. (F) ------------------------------------------------------------------------------------------------------------------------------------ Underwriting The Portfolio may not act as Same. No change. an underwriter of securities, except that the Portfolio may acquire restricted securities under circumstances in which, if such securities were sold, the Portfolio might be deemed to be an underwriter for purposes of the Securities Act of 1933, as amended. (F) ------------------------------------------------------------------------------------------------------------------------------------ Industry The Portfolio may not Same. No change. Concentration concentrate investments in an industry, as concentration may be defined under the 1940 Act or the rules and regulations thereunder (as such statute, rules or regulations may be amended from time to time) or by guidance regarding, interpretations of, or exemptive orders under, the 1940 Act or the rules or regulations thereunder published by appropriate regulatory authorities. (F) ------------------------------------------------------------------------------------------------------------------------------------ Real Estate The Portfolio may not Same. No change. purchase or sell real estate except that it may dispose of real estate acquired as a result of the ownership of securities or other instruments. This restriction does not prohibit the Portfolio from investing in securities or other instruments backed by real estate or in securities of companies engaged in the real estate business. (F) ------------------------------------------------------------------------------------------------------------------------------------ Commodities The Portfolio may not Same. No change. purchase or sell commodities regulated by the Commodity Futures Trading Commission under the Commodity Exchange Act or commodities contracts except for futures contracts and options on futures contracts. (F) ------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------ Combined Portfolio Proposed Global Dollar High Grade Policy Changes ------------------------------------------------------------------------------------------------------------------------------------ Investment Objective The Portfolio's investment The Portfolio's investment The Portfolio's investment objective is to seek a high objective is high current objective is to generate level of current income. income consistent with income and price preservation of capital. appreciation without Its secondary objective is assuming what the Adviser capital appreciation. considers undue risk. ------------------------------------------------------------------------------------------------------------------------------------ Investment Policies ------------------------------------------------------------------------------------------------------------------------------------ Status The Portfolio is The Portfolio is No change. non-diversified. diversified. (F) ------------------------------------------------------------------------------------------------------------------------------------ Rule 35d-1-80% Policy The Portfolio invests, under The Portfolio invests, The combined Portfolio will normal circumstances, at under normal circumstances, invest, under normal least 80% of its net assets at least 80% of its net circumstances, at least 80% in government securities. assets in U.S. Government of its net assets in or high-grade fixed-income fixed-income securities. securities rated A or better by S&P and Moody's The combined Portfolio will or equivalent rating. be renamed the Intermediate Bond Portfolio. ------------------------------------------------------------------------------------------------------------------------------------ Other Investments The Portfolio invests at The Portfolio may, In addition, the combined least 65% of its net assets consistent with its Portfolio will be able to in interests in entities investment objectives, invest up to 25% of its organized and operated invest up to 20% of its net assets in non-U.S. solely for the purpose of assets in securities other Dollar-denominated restructuring the investment than U.S. Government securities. characteristics of sovereign securities and high grade debt obligations. debt securities, including (i) investment grade corporate debt securities The Portfolio's investments of a type other than the in sovereign debt high grade debt securities obligations will emphasize high grade debt securities debt obligations issued by collateralized mortgage countries in the J.P. Morgan obligations) and (ii) Emerging Markets Bond Index certificates of deposit, Global, which currently bankers' acceptances and includes approximately 31 interest-bearing savings countries whose economies deposits of banks having are concluded to be total assets of more than developing or emerging from $1 billion and which are underdevelopment. members of the FDIC. The Portfolio's non-U.S. investments emphasize The Portfolio may invest in emerging markets and qualifying bank deposits. developing countries. The Portfolio limits its The Portfolio may invest up investments in the sovereign to 20% of its net assets in debt obligations of any one foreign/Yankee debt country to less than 25% of (sovereign and corporate its net assets, although the debt of developed and Portfolio may invest up to emerging markets). 30% of its net assets in the sovereign debt obligations and corporate fixed-income securities of issuers in each of the countries that constitute part of the Portfolio's focus, including Brazil, Mexico, the Philippines, Russia, Turkey and Venezuela. The Portfolio expects that it will not invest more than 10% of its net assets in any other single country outside the U.S. The Portfolio's investments in sovereign debt obligations and corporate debt securities are U.S. Dollar-denominated. The Portfolio invests substantially all of its assets in lower-rated securities or unrated securities of equivalent investment quality. The Portfolio also may invest in U.S. and non-U.S. corporate fixed-income securities. ------------------------------------------------------------------------------------------------------------------------------------ Credit Quality The Portfolio invests The Portfolio will not The combined Portfolio substantially all of its invest in any security will be able to invest up assets in lower-rated rated below BBB- by S&P or to 25% of its assets in securities, which may Baa3 by Moody's or below investment grade include securities having equivalent quality. securities. the lowest rating for non-subordinated debt (i.e., rated C by Moody's or CCC or lower by S&P and Fitch) or unrated securities of equivalent investment quality. ------------------------------------------------------------------------------------------------------------------------------------ Maturity The Portfolio may invest in The Portfolio may invest in No change. fixed-income securities with fixed-income securities a range of maturities from with a range of maturities short- to long-term. from short- to long-term. ------------------------------------------------------------------------------------------------------------------------------------ Mortgage-Related and The Portfolio may invest in Same. No change. Other Asset-Backed mortgage-backed securities Securities and other asset-backed securities. ------------------------------------------------------------------------------------------------------------------------------------ Structured The Portfolio may invest in Same. No change. Securities/Basket securities issued in Securities structured financing transactions, which generally involve aggregating types of debt assets in a pool or special purpose entity and then issuing new securities. ------------------------------------------------------------------------------------------------------------------------------------ Inflation-Protected None. The Portfolio may invest in No change. Securities inflation-protected securities. ------------------------------------------------------------------------------------------------------------------------------------ Derivatives The Portfolio may, but is Same. No change. not required to, use derivatives for risk management purposes or as part of its investment strategies. The Portfolio may use forward contracts, forward currency exchange contracts, futures contracts and options on futures contracts, options, swap transactions and credit default swap agreements. ------------------------------------------------------------------------------------------------------------------------------------ Credit Default Swap The Portfolio will not enter None. No change. Agreements into a credit default swap if the swap provides for settlement by physical delivery and such delivery would result in the Portfolio investing less than 65% of its total assets in sovereign debt obligations or in investments inconsistent with its restrictions on investing in specific countries. ------------------------------------------------------------------------------------------------------------------------------------ Foreign Currencies/Forward None. None. No change. Currency Exchange Contracts ------------------------------------------------------------------------------------------------------------------------------------ Preferred Stock The Portfolio may invest in None. No change. preferred stocks of corporate issuers. ------------------------------------------------------------------------------------------------------------------------------------ Repurchase The Portfolio may enter into The Portfolio may enter No change. Agreements repurchase agreements. into repurchase agreements pertaining to U.S. Government Securities. ------------------------------------------------------------------------------------------------------------------------------------ Variable and The Portfolio may invest in Same. No change. Floating Rate variable, floating and Instruments inverse floating rate instruments. ------------------------------------------------------------------------------------------------------------------------------------ Forward The Portfolio may enter into The Portfolio may enter No change. Commitment forward commitments for the into forward commitments Transactions and purchase or sale of for the purchase or sale of When-Issued securities. Such securities. Such Delayed Delivery transactions may include transactions may include Securities purchases on a "when-issued" purchases on a basis or purchases or sales "when-issued" basis or on a "delayed delivery" purchases or sales on a basis. "delayed delivery" basis. ------------------------------------------------------------------------------------------------------------------------------------ Zero Coupon Securities None. The Portfolio may invest in No change. zero coupon Treasury securities. ------------------------------------------------------------------------------------------------------------------------------------ Reverse Repurchase The Portfolio may enter into Same. No change. Agreements and reverse repurchase Dollar Rolls agreements and dollar rolls, subject to the Portfolio's limitations on borrowings. ------------------------------------------------------------------------------------------------------------------------------------ Rights and The Portfolio may invest in None. No change. Warrants warrants for debt securities or warrants for equity securities that are acquired in connection with debt instruments. ------------------------------------------------------------------------------------------------------------------------------------ Loan Participations The Portfolio may invest in Same. No change. corporate loans either by participating as co-lender at the time the loan is originated or by buying an interest in the loan in the secondary market from a financial institution or institutional investor. ------------------------------------------------------------------------------------------------------------------------------------ Standby The Portfolio may enter into None. No change. Commitment standby commitment Agreements agreements. ------------------------------------------------------------------------------------------------------------------------------------ Other Investment The Portfolio may invest in Same. No change. Companies other investment companies as permitted by the Investment Company Act of 1940, as amended, or the rules and regulations thereunder. The Portfolio intends to invest uninvested cash balances in an affiliated money market fund as permitted by Rule 12d1-1 under the 1940 Act. ------------------------------------------------------------------------------------------------------------------------------------ Illiquid Securities The Portfolio will limit its Same. No change. investments in illiquid securities to no more than 15% of its net assets or such other amount permitted by guidance regarding the 1940 Act. ------------------------------------------------------------------------------------------------------------------------------------ Margin The Portfolio may not Same. No change. purchase securities on margin, except (i) as otherwise provided under rules adopted by the Commission under the 1940 Act or by guidance regarding the 1940 Act, or interpretations thereof, and (ii) that the Portfolio may obtain such short-term credits as are necessary for the clearance of portfolio transactions, and the Portfolio may make margin payments in connection with futures contracts, options, forward contracts, swaps, caps, floors, collars and other financial instruments. ------------------------------------------------------------------------------------------------------------------------------------ Short Sales The Portfolio may make short Same. No change. sales a part of overall portfolio management or to offset a potential decline in the value of a security. ------------------------------------------------------------------------------------------------------------------------------------ Securities Lending For the purposes of Same. No change. achieving income, the Portfolio may make secured loans of portfolio securities to brokers, dealers and financial institutions, provided a number of conditions are satisfied, including that the loan is fully collateralized. The Portfolio may pay reasonable finders', administrative, and custodial fees in connection with a loan. ------------------------------------------------------------------------------------------------------------------------------------ Borrowing The Portfolio may not issue Same. No change. any senior security (as that term is defined in the 1940 Act) or borrow money, except to the extent permitted by the 1940 Act or the rules and regulations thereunder (as such statute, rules or regulations may be amended from time to time) or by guidance regarding, or interpretations of, or exemptive orders under, the 1940 Act or the rules or regulations thereunder published by appropriate regulatory authorities. For the purposes of this restriction, margin and collateral arrangements, including, for example, with respect to permitted borrowings, options, futures contracts, options on futures contracts and other derivatives such as swaps, are not deemed to be the issuance of a senior security. (F) ------------------------------------------------------------------------------------------------------------------------------------ Lending The Portfolio may not make Same. No change. loans except through (i) the purchase of debt obligations in accordance with its investment objective and policies; (ii) the lending of portfolio securities; (iii) the use of repurchase agreements; or (iv) the making of loans to affiliated funds as permitted under the 1940 Act, the rules and regulations thereunder (as such statutes, rule or regulations may be amended from time to time), or by guidance regarding, and interpretations of, or exemptive orders under, the 1940 Act. (F) ------------------------------------------------------------------------------------------------------------------------------------ Underwriting The Portfolio may not act as Same. No change. an underwriter of securities, except that the Portfolio may acquire restricted securities under circumstances in which, if such securities were sold, the Portfolio might be deemed to be an underwriter for purposes of the Securities Act of 1933, as amended. (F) ------------------------------------------------------------------------------------------------------------------------------------ Industry The Portfolio may not Same. No change. Concentration concentrate investments in an industry, as concentration may be defined under the 1940 Act or the rules and regulations thereunder (as such statute, rules or regulations may be amended from time to time) or by guidance regarding, interpretations of, or exemptive orders under, the 1940 Act or the rules or regulations thereunder published by appropriate regulatory authorities. (F) ------------------------------------------------------------------------------------------------------------------------------------ Real Estate The Portfolio may not Same. No change. purchase or sell real estate except that it may dispose of real estate acquired as a result of the ownership of securities or other instruments. This restriction does not prohibit the Portfolio from investing in securities or other instruments backed by real estate or in securities of companies engaged in the real estate business. (F) ------------------------------------------------------------------------------------------------------------------------------------ Commodities The Portfolio may not Same. No change. purchase or sell commodities regulated by the Commodity Futures Trading Commission under the Commodity Exchange Act or commodities contracts except for futures contracts and options on futures contracts. (F) ------------------------------------------------------------------------------------------------------------------------------------
APPENDIX B PORTFOLIO PERFORMANCE The charts below show the percentage gain or loss in each calendar year for the ten-year period ended December 31, 2007, for Class A shares of High Yield, Class A shares of Global Bond, Class A shares of AGI, Class A shares of Global Dollar and Class A shares of High Grade. They should give you a general idea of how each Portfolio's return has varied from year to year. The charts include the effects of Portfolio expenses but do not reflect charges associated with the Variable Products or contractholders' accounts. The calculations of annual total return assume the reinvestment of all dividends and capital gain distributions on the reinvestment date. Performance results included the effect of expense reduction arrangements, if any. If these arrangements had not been in place, the performance results would have been lower. As with all mutual funds, past performance is not an indication of future results. No assurance can be given that High Grade will achieve any particular level of performance after the Acquisitions. Additional discussion of the manner of calculation of total return is contained in the Prospectuses of each Portfolio. Calendar Year Total Returns High Yield ---------- The annual returns in the bar chart are for the Portfolio's Class A shares. [The following table was depicted as a bar chart in the printed material.] -3.7 -2.6 -5.2 3.0 -3.0 22.4 8.0 1.8 9.1 0.89 -------------------------------------------------------------------------------- 98 99 00 01 02 03 04 05 06 07 Calendar Year End You should consider an investment in the Portfolio as a long-term investment. The Portfolio's returns will fluctuate over long and short periods. For example, during the period shown in the bar chart, the Portfolio's: Best quarter was up 7.04% in the 2nd quarter, 2003; and worst quarter was down -11.29% in the 3rd quarter, 1998. Global Bond ----------- The annual returns in the bar chart are for the Portfolio's Class A shares. [The following table was depicted as a bar chart in the printed material.] 14.1 -6.1 1.2 -0.3 17.0 13.3 9.6 -7.7 4.8 10.35 -------------------------------------------------------------------------------- 98 99 00 01 02 03 04 05 06 07 Calendar Year End You should consider an investment in the Portfolio as a long-term investment. The Portfolio's returns will fluctuate over long and short periods. For example, during the period shown in the bar chart, the Portfolio's: Best quarter was up 10.25% in the 2nd quarter, 2002; and worst quarter was down -4.27% in the 1st quarter, 1999. AGI --- The annual returns in the bar chart are for the Portfolio's Class A shares. [The following table was depicted as a bar chart in the printed material.] 4.1 8.9 12.4 3.6 11.0 7.4 4.9 8.7 3.3 8.38 -------------------------------------------------------------------------------- 98 99 00 01 02 03 04 05 06 07 Calendar Year End You should consider an investment in the Portfolio as a long-term investment. The Portfolio's returns will fluctuate over long and short periods. For example, during the period shown in the bar chart, the Portfolio's: Best quarter was up 6.58% in the 2nd quarter, 2003; and worst quarter was down -5.14% in the 2nd quarter, 2004. Global Dollar ------------- The annual returns in the bar chart are for the Portfolio's Class A shares. [The following table was depicted as a bar chart in the printed material.] -21.7 26.1 14.1 9.4 16.1 33.4 10.1 9.6 10.0 4.53 -------------------------------------------------------------------------------- 98 99 00 01 02 03 04 05 06 07 Calendar Year End You should consider an investment in the Portfolio as a long-term investment. The Portfolio's returns will fluctuate over long and short periods. For example, during the period shown in the bar chart, the Portfolio's: Best quarter was up 16.02% in the 4th quarter, 1999; and worst quarter was down -27.11% in the 3rd quarter, 1998. High Grade ---------- The annual returns in the bar chart are for the Portfolio's Class A shares. [The following table was depicted as a bar chart in the printed material.] 8.2 -2.5 11.1 7.9 7.8 3.9 3.8 2.0 3.9 4.85 -------------------------------------------------------------------------------- 98 99 00 01 02 03 04 05 06 07 Calendar Year End You should consider an investment in the Portfolio as a long-term investment. The Portfolio's returns will fluctuate over long and short periods. For example, during the period shown in the bar chart, the Portfolio's: Best quarter was up 4.62% in the 3rd quarter, 2001; and worst quarter was down -2.45% in the 2nd quarter, 2004. The following tables list the average annual total returns for the one-year, five-year, ten-year, and since inception periods ending December 31, 2007 for each Portfolio. These tables are intended to provide you with some indication of the risks of investing in the Portfolios. At the bottom of each table, you can compare the Portfolios' performance with the performance of several broad-based market indices. Average Annual Total Returns High Yield (Class A) -------------------- PERFORMANCE TABLE Average Annual Total Returns (For the periods ended December 31, 2007) 1 Year 5 Years 10 Years ------ ------- -------- Class A 0.89% 8.16% 2.79% Lehman Brothers U.S. High Yield -2% Issuer Cap Index 2.27% 10.74% 5.59% ----------------------------------------------- * Since inception return information is from October 27, 1997.
High Yield (Class B) -------------------- PERFORMANCE TABLE Average Annual Total Returns (For the periods ended December 31, 2007) Since 1 Year 5 Years Inception* ------ ------- ---------- Class B 0.62% 7.89% 8.39% Lehman Brothers U.S. High Yield -2% Issuer Cap Index 2.27% 10.74% 10.72% ----------------------------------------------- * Since inception return information is from July 22, 2002.
Global Bond (Class A) --------------------- PERFORMANCE TABLE Average Annual Total Returns (For the periods ended December 31, 2007) 1 Year 5 Years 10 Years ------ ------- -------- Class A 10.35% 5.84% 5.32% S&P/Citigroup World Government Bond Index (unhedged) 10.95% 6.81% 6.31%
Global Bond (Class B) --------------------- PERFORMANCE TABLE Average Annual Total Returns (For the periods ended December 31, 2007) Since 1 Year 5 Years Inception* ------ ------- ---------- Class B 10.15% 5.60% 5.48% S&P/Citigroup World Government Bond Index (unhedged) 10.95% 6.81% 6.37%** ----------------------------------------------- * Since inception return information is from July 15, 1999. ** Since inception return information is from July 31, 1999.
AGI (Class A) ------------- PERFORMANCE TABLE Average Annual Total Returns (For the periods ended December 31, 2007) 1 Year 5 Years 10 Years ------ ------- -------- Class A 8.38% 6.50% 7.21% Lehman Brothers U.S. Aggregate Index 6.97% 4.42% 5.97% Lehman Brothers Intermediate-Term Government Index 8.47% 3.69% 5.55%
AGI (Class B) ------------- PERFORMANCE TABLE Average Annual Total Returns (For the periods ended December 31, 2007) Since 1 Year 5 Years Inception* ------ ------- ---------- Class A 8.10% 6.24% 6.71% Lehman Brothers U.S. Aggregate Index 6.97% 4.42% 4.93% Lehman Brothers Intermediate-Term Government Index 8.47% 3.69% 4.16% ----------------------------------------------- * Since inception return information is from July 22, 2002.
Global Dollar (Class A) ----------------------- PERFORMANCE TABLE Average Annual Total Returns (For the periods ended December 31, 2007) 1 Year 5 Years 10 Years ------ ------- -------- Class A 4.53% 13.11% 10.23% JPM EMBI+ Index 6.45% 13.63% 10.36% JPM EMBI Global Index 6.28% 12.67% 10.09%
Global Dollar (Class B) ----------------------- PERFORMANCE TABLE Average Annual Total Returns (For the periods ended December 31, 2007) Since 1 Year 5 Years Inception* ------ ------- ---------- Class A 4.27% 12.88% 14.11% JPM EMBI+ Index 6.45% 13.63% 14.90% JPM EMBI Global Index 6.28% 12.67% 13.79% ----------------------------------------------- * Since inception return information is from July 22, 2002.
High Grade (Class A) -------------------- PERFORMANCE TABLE Average Annual Total Returns (For the periods ended December 31, 2007) 1 Year 5 Years 10 Years ------ ------- -------- Class A 4.85% 3.68% 5.03% Lehman Brothers U.S. Aggregate Index 6.97% 4.42% 5.97%
High Grade (Class B) -------------------- PERFORMANCE TABLE Average Annual Total Returns (For the periods ended December 31, 2007) Since 1 Year 5 Years Inception* ------ ------- ---------- Class B 4.60% 3.41% 5.01% Lehman Brothers U.S. Aggregate Index 6.97% 4.42% 5.97% ----------------------------------------------- * Since inception return information is from June 2, 1999.
APPENDIX C DESCRIPTION OF PRINCIPAL RISKS OF THE PORTFOLIOS Among the principal risks of investing in a Portfolio are market risk, interest rate risk, credit risk, inflation rate risk, non-U.S. (foreign) risk, emerging market risk, and currency risk. Each of these risks is more fully described below. Each Portfolio could become subject to additional risks as described below or because the types of investments made by each Portfolio can change over time. Market Risk This is the risk that the value of a Portfolio's investments will fluctuate as the stock or bond markets fluctuate and that prices overall will decline over shorter- or longer-term periods. Interest Rate Risk Changes in interest rates will affect the value of a Portfolio's investments in fixed-income securities. When interest rates rise, the value of a Portfolio's investments tends to fall and this decrease in value may not be offset by higher interest income from new investments. Interest rate risk is generally greater for those Portfolios that invest in fixed-income securities with longer maturities or durations. Credit Risk This is the risk that the issuer or the guarantor of a fixed-income security, or the counterparty to a derivatives or other contract, will be unable or unwilling to make timely payments of interest or principal, or to otherwise honor its obligations. The issuer or guarantor may default causing a loss of the full principal amount of a security. The degree of risk for a particular security may be reflected in its credit rating. Investments in fixed-income securities with lower ratings tend to have a higher probability that an issuer will default or fail to meet its payment obligations. Inflation Risk This is the risk that the value of assets or income from investments will be less in the future as inflation decreases the value of money. As inflation increases, the value of each Portfolio's assets can decline as can the value of the Portfolio's distributions. This risk is significantly greater for those Portfolios that invest a significant portion of their assets in fixed-income securities with longer maturities. Foreign (Non-U.S.) Risk A Portfolio's investments in non-U.S. (foreign) securities may experience more rapid and extreme changes in value than investments in securities of U.S. companies. The securities markets of many foreign countries are relatively small, with a limited number of companies representing a small number of securities. Non-U.S. issuers usually are not subject to the same degree of regulation as U.S. issuers. Reporting, accounting, and auditing standards of foreign countries differ, in some cases significantly, from U.S. standards. Nationalization, expropriation or confiscatory taxation, currency blockage, political changes, or diplomatic development could adversely affect a Portfolio's investments in a country other than the United States. These risks are heightened for emerging market countries because there may be more economic, political and social instability, and investments in companies in emerging markets may have more risk because these securities may be more volatile and less liquid. To the extent a Portfolio invests in a particular country or geographic region, the Portfolio may have more significant risk due to market changes or other factors affecting that country or region, including political instability and unpredictable economic conditions. Currency Risk This is the risk that changes in foreign (non-U.S.) currency exchange rates may negatively affect the value of a Portfolio's investments or reduce the returns of a Portfolio. For example, the value of a Portfolio's investments in foreign stocks or currencies may decrease if the U.S. Dollar is strong (i.e., gaining value relative to other currencies) and other currencies are weak (i.e., losing value relative to the U.S. Dollar). Currency markets generally are not as regulated as securities markets. Emerging Market Risk Foreign investment risk may be particularly high to the extent a Portfolio invests in emerging market securities of issuers based in countries with developing economies. These securities may present market, credit, currency, liquidity, legal, political and other risks different from, or greater than, the risk of investing in developed foreign (non-U.S.) countries. Prepayment Risk The value of mortgage-related or asset-backed securities may be particularly sensitive to changes in prevailing interest rates. Early prepayments of principal on some mortgage-related securities may occur during periods of falling mortgage interest rates and expose a Portfolio to a lower rate of return upon reinvestment of principal. Early payments associated with mortgage-related securities cause these securities to experience significantly greater price and yield volatility than is experienced by traditional fixed-income securities. During periods of rising interest rates, a reduction in prepayments may increase the effective life of mortgage-related securities, subjecting them to greater risk of decline in market value in response to rising interest rates. If the life of a mortgage-related security is inaccurately predicted, a Portfolio may not be able to realize the rate of return it expected. Diversification A Portfolio may have more risk if it is "non-diversified", meaning that it can invest more or its Risk assets in a smaller number of companies than many other funds. Derivatives Risk The Portfolios may use derivatives transactions. These investment strategies may be riskier than other investment strategies and may result in greater volatility for a Portfolio, particularly during periods of market decline. Leverage Risk When a Portfolio borrows money or otherwise leverages its portfolio, it may be more volatile because leverage tends to exaggerate the effect of any increase or decrease in the value of a Portfolio's investments. A Portfolio may create leverage through the use of reverse repurchase arrangements, forward contracts or dollar rolls or by borrowing money. Liquidity Risk Liquidity risk exists when particular investments are difficult to purchase or sell, possibly preventing a Portfolio from selling out of these illiquid securities at an advantageous time or price. Derivatives and securities involving substantial market and credit risk tend to involve greater liquidity risk. Management Risk Each Portfolio is subject to management risk because it is an actively managed investment portfolio. The Adviser will apply its investment techniques and risk analyses in making investment decisions for the Portfolios, but there can be no guarantee that its decisions will produce the desired results. APPENDIX D CERTAIN INFORMATION APPLICABLE TO CLASS A AND CLASS B SHARES OF HIGH GRADE How to Buy and Sell Shares The Portfolio offers its shares through the separate accounts of life insurance companies (the "Insurers"). You may only purchase and sell shares through these separate accounts. See the prospectus of the separate account of the participating insurance company for information on the purchase and sale of the Portfolio's shares. AllianceBernstein Investments, Inc. ("ABI") may from time to time receive payments from Insurers in connection with the sale of the Portfolio's shares through the Insurer's separate accounts. The Insurers maintain omnibus account arrangements with the Portfolio in respect of the Portfolio and place aggregate purchase, redemption and exchange orders for shares of the Portfolio corresponding to orders placed by the contractholders who have purchased contracts from the Insurers, in each case, in accordance with the terms and conditions of the relevant contract. Omnibus account arrangements maintained by the Insurers are discussed below under "Limitations on Ability to Detect and Curtail Excessive Trading Practices." ABI may refuse any order to purchase shares. The Portfolio reserves the right to suspend the sale of its shares to the public in response to conditions in the securities markets or for other reasons. Payments to Financial Intermediaries Financial intermediaries, such as the Insurers, market and sell shares of the Portfolio and typically receive compensation for selling shares of the Portfolio. This compensation is paid from various sources. Insurers or your financial intermediary receive compensation from ABI and/or the Adviser in several ways from various sources, which include some or all of the following: o defrayal of costs for educational seminars and training; o additional distribution support; and o payments related to providing contractholder recordkeeping and/or administrative services. ABI and/or the Adviser may pay Insurers or other financial intermediaries to perform record-keeping and administrative services in connection with the Portfolio. Such payments will generally not exceed 0.35% of the average daily net assets of the Portfolio attributable to the Insurer. Other Payments for Distribution Services and Educational Support In addition to the fees described above, ABI, at its expense, currently provides additional payments to the Insurers that sell shares of the Portfolio. These sums include payments to reimburse directly or indirectly the costs incurred by the Insurers and their employees in connection with educational seminars and training efforts about the Portfolio for the Insurers' employees and/or their clients and potential clients. The costs and expenses associated with these efforts may include travel, lodging, entertainment and meals. For 2008, ABI's additional payments to these firms for educational support and distribution assistance related to the AVP Portfolios is expected to be approximately $1.5 million. In 2007, ABI paid additional payments of approximately $1.2 million for the AVP Portfolios. If one mutual fund sponsor that offers shares to separate accounts of an Insurer makes greater distribution assistance payments than another, the Insurer may have an incentive to recommend or offer the shares of funds of one fund sponsor over another. Please speak with your financial intermediary to learn more about the total amounts paid to your financial intermediary by the Adviser, ABI and by other mutual fund sponsors that offer shares to Insurers that may be recommended to you. You should also consult disclosures made by your financial intermediary at the time of purchase. ABI anticipates that the Insurers or their affiliates that will receive additional payments for educational support include: AIG SunAmerica Ameriprise Financial AXA Advisors AXA Distributors Genworth Financial Great West Life & Annuity Co. Hartford Life Insurance ING Reliastar Life ING USA Annuity and Life Insurance Co. Lincoln Financial Distributors Mass Mutual Merrill Lynch Pacific Life Insurance Co. Phoenix Annuity Principal Financial Group Prudential Financial Reliastar Life Insurance Co. RiverSource Distributors, Inc. Transamerica Capital, Inc. Although the Portfolio may use brokers and dealers who sell shares of the Portfolio to effect Portfolio transactions, the Portfolio does not consider the sale of AllianceBernstein Mutual Fund shares as a factor when selecting brokers or dealers to effect Portfolio transactions. Frequent Purchases and Redemptions of Portfolio Shares AVP's Board of Directors has adopted policies and procedures designed to detect and deter frequent purchases and redemptions of Portfolio shares or excessive or short-term trading that may disadvantage long-term contractholders. These policies are described below. The Portfolio reserves the right to restrict, reject or cancel, without any prior notice, any purchase or exchange order for any reason, including any purchase or exchange order accepted by any Insurer or a contractholder's financial intermediary. Risks Associated With Excessive Or Short-term Trading Generally ---------------------------------------------------------------- While the Portfolio will try to prevent market timing by utilizing the procedures described below, these procedures may not be successful in identifying or stopping excessive or short-term trading in all circumstances. By realizing profits through short-term trading, contractholders that engage in rapid purchases and sales or exchanges of the Portfolio's shares dilute the value of shares held by long-term contractholders. Volatility resulting from excessive purchases and sales or exchanges of Portfolio shares, especially involving large dollar amounts, may disrupt efficient portfolio management. In particular, the Portfolio may have difficulty implementing its long-term investment strategies if it is forced to maintain a higher level of its assets in cash to accommodate significant short-term trading activity. Excessive purchases and sales or exchanges of the Portfolio's shares may force the Portfolio to sell portfolio securities at inopportune times to raise cash to accommodate short-term trading activity. In addition, the Portfolio may incur increased expenses if one or more contractholders engage in excessive or short-term trading. For example, a Portfolio may be forced to liquidate investments as a result of short-term trading and incur increased brokerage costs and realization of taxable capital gains without attaining any investment advantage. Similarly, the Portfolio may bear increased administrative costs due to asset level and investment volatility that accompanies patterns of short-term trading activity. All of these factors may adversely affect Portfolio performance. Investments in foreign securities may be particularly susceptible to short-term trading strategies. This is because foreign securities are typically traded on markets that close well before the time a Portfolio calculates its NAV at 4:00 p.m., Eastern time, which gives rise to the possibility that developments may have occurred in the interim that would affect the value of these securities. The time zone differences among international stock markets can allow a contractholder engaging in a short-term trading strategy to exploit differences in Portfolio share prices that are based on closing prices of foreign securities established some time before the Portfolio calculates its own share price (referred to as "time zone arbitrage"). The Portfolio has procedures, referred to as fair value pricing, designed to adjust closing market prices of foreign securities to reflect what is believed to be the fair value of those securities at the time the Portfolio calculates its NAV. While there is no assurance, the Portfolio expects that the use of fair value pricing, in addition to the short-term trading policies discussed below, will significantly reduce a contractholder's ability to engage in time zone arbitrage to the detriment of other contractholders. Contractholders engaging in a short-term trading strategy may also target a Portfolio that does not invest primarily in foreign securities. If the Portfolio invests in securities that are, among other things, thinly traded, traded infrequently, or relatively illiquid, it has the risk that the current market price for the securities may not accurately reflect current market values. Contractholders may seek to engage in short-term trading to take advantage of these pricing differences (referred to as "price arbitrage"). The Portfolio may be adversely affected by price arbitrage, in particular, to the extent that it significantly invests in small-cap securities or specific industry sector securities. Policy Regarding Short-term Trading ------------------------------------ Purchases and exchanges of shares of the Portfolio should be made for investment purposes only. The Portfolio seeks to prevent patterns of excessive purchases and sales or exchanges of Portfolio shares. The Portfolio will seek to prevent such practices to the extent they are detected by the procedures described below. The Portfolio reserves the right to modify this policy, including any surveillance or account blocking procedures established from time to time to effectuate this policy, at any time without notice. Transaction Surveillance Procedures. The Portfolio, through its agents, ABI and ABIS, maintains surveillance procedures to detect excessive or short-term trading in Portfolio shares. This surveillance process involves several factors, which include scrutinizing individual Insurer's omnibus transaction activity in Portfolio shares in order to ascertain whether any such activity attributable to one or more contractholders might constitute excessive or short-term trading. Insurers' omnibus transaction activity identified by these surveillance procedures, or as a result of any other information actually available at the time, will be evaluated to determine whether such activity might indicate excessive or short-term trading activity attributable to one or more contractholders. These surveillance procedures may be modified from time to time, as necessary or appropriate to improve the detection of excessive or short-term trading or to address specific circumstances. Account Blocking Procedures. If the Portfolio determines, in its sole discretion, that a particular transaction or pattern of transactions identified by the transaction surveillance procedures described above is excessive or short-term trading in nature, the relevant Insurer's omnibus account(s) will be immediately "blocked" and no future purchase or exchange activity will be permitted, except to the extent the Portfolio, ABI or ABIS has been informed in writing that the terms and conditions of a particular contract may limit the Portfolio's ability to apply its short-term trading policy to contractholder activity as discussed below. As a result, any contractholder seeking to engage through an Insurer in purchase or exchange activity in shares of the Portfolio under a particular contract will be prevented from doing so. However, sales of Portfolio shares back to the Portfolio or redemptions will continue to be permitted in accordance with the terms of the Portfolio's current Prospectus. In the event an account is blocked, certain account-related privileges, such as the ability to place purchase, sale and exchange orders over the internet or by phone, may also be suspended. An Insurer's omnibus account that is blocked will generally remain blocked unless and until the Insurer provides evidence or assurance acceptable to the Portfolio one or more contractholders did not or will not in the future engage in excessive or short-term trading. Applications of Surveillance Procedures and Restrictions to Omnibus Accounts. The Portfolio applies its surveillance procedures to Insurers. As required by SEC rules, the Portfolio has entered into agreements with all of its financial intermediaries, including Insurers, that require the financial intermediaries to provide the Portfolio, upon the request of the Portfolio or its agents, with individual account level information about their transactions. If the Portfolio detects excessive trading through its monitoring of omnibus accounts, including trading at the individual account level, an Insurer will also execute instructions from the Portfolio to take actions to curtail the activity, which may include applying blocks to accounts to prohibit future purchases and exchanges of Portfolio shares. Risks to Contractholders Resulting From Imposition of Account Blocks in Response to Excessive Short-term Trading Activity ------------------------------------------ A contractholder identified as having engaged in excessive or short-term trading activity whose account is "blocked" and who may not otherwise wish to redeem his or her shares effectively may be "locked" into an investment in shares of the Portfolio that the contractholder did not intend to hold on a long-term basis or that may not be appropriate for the contractholder's risk profile. To rectify this situation, a contractholder with a "blocked" account may be forced to redeem Portfolio shares, which could be costly if, for example, these shares have declined in value. To avoid this risk, a contractholder should carefully monitor the purchases, sales, and exchanges of Portfolio shares and avoid frequent trading in Portfolio shares. Limitations on Ability to Detect and Curtail Excessive Trading Practices ------------------------------------------------------------------------- Insurers utilizing omnibus account arrangements may not identify to the Portfolio, ABI or ABIS contractholders' transaction activity relating to shares of the Portfolio on an individual basis. Consequently, the Portfolio, ABI and ABIS may not be able to detect excessive or short-term trading in shares of the Portfolio attributable to a particular contractholder who effects purchase and redemption and/or exchange activity in shares of the Portfolio through an Insurer acting in an omnibus capacity. In seeking to prevent excessive or short-term trading in shares of the Portfolio, including the maintenance of any transaction surveillance or account blocking procedures, the Portfolio, ABI and ABIS consider the information actually available to them at the time. How the Portfolio Values Its Shares The Portfolio's NAV is calculated at the close of regular trading on the Exchange (ordinarily, 4:00 p.m., Eastern time), only on days when the Exchange is open for business. To calculate NAV, the Portfolio's assets are valued and totaled, liabilities are subtracted, and the balance, called net assets, is divided by the number of shares outstanding. If the Portfolio invests in securities that are primarily traded on foreign exchanges that trade on weekends or other days when the Portfolio does not price its shares, the NAV of the Portfolio's shares may change on days when contractholders will not be able to purchase or redeem their shares in the Portfolio. The Portfolio values its securities at their current market value determined on the basis of market quotations or, if market quotations are not readily available or are unreliable, at "fair value" as determined in accordance with procedures established by and under the general supervision of the Directors. When the Portfolio uses fair value pricing, it may take into account any factor it deems appropriate. The Portfolio may determine fair value based upon developments related to a specific security, current valuations of non-U.S. (foreign) stock indices (as reflected in U.S. futures markets) and/or U.S. sector or broader stock market indices. The prices of securities used by the Portfolio to calculate its NAV may differ from quoted or published prices for the same securities. Fair value pricing involves subjective judgments and it is possible that the fair value determined for a security is materially different than the value that could be realized upon the sale of that security. The Portfolio expects to use fair value pricing for securities primarily traded on U.S. exchanges only under very limited circumstances, such as the early closing of the exchange on which a security is traded or suspension of trading in the security. The Portfolio may use fair value pricing more frequently for securities primarily traded in non-U.S. (foreign) markets because, among other things, most non-U.S. (foreign) markets close well before the Portfolio values its securities at 4:00 p.m., Eastern time. The earlier close of these non-U.S. (foreign) markets gives rise to the possibility that significant events, including broad market moves, may have occurred in the interim. For example, the Portfolio believes that non-U.S. (foreign) security values may be affected by events that occur after the close of non-U.S. (foreign) securities markets. To account for this, the Portfolio may frequently value many of its non-U.S. (foreign) equity securities using fair value prices based on third party vendor modeling tools to the extent available. Subject to the Directors' oversight, the Directors have delegated responsibility for valuing the Portfolio's assets to the Adviser. The Adviser has established a Valuation Committee, which operates under the policies and procedures approved by the Directors, to value the Portfolio's assets on behalf of the Portfolio. The Valuation Committee values Portfolio assets as described above. Your order for purchase, sale, or exchange of shares is priced at the next-determined NAV after your order is received in proper form by the Portfolio. APPENDIX E OTHER INFORMATION The following information provides only a summary of the key features of the organizational structure and governing documents of the Portfolios. Each Portfolio is organized as a series of the same Maryland corporation. The Charter and Bylaw provisions that govern AVP apply to High Yield, Global Bond, AGI, Global Dollar and High Grade. Accordingly, there are no differences among the Portfolios in terms of their corporate organizational structures. General Each Portfolio has procedures available to its respective shareholders for calling shareholders' meetings and for the removal of directors. Under Maryland law, unless the charter provides otherwise (which AVP's does not), a director may be removed, either with or without cause, at a meeting duly called and at which a quorum is present by the affirmative vote of the holders of a majority of the votes entitled to be cast for the election of directors. Under the Bylaws, shareholder-requested special meetings of shareholders for any other purpose shall be called by AVP's Secretary only upon the written request of shareholders entitled to cast not less than a majority of all the votes entitled to be cast at the meeting. For each Portfolio, the presence in person or by proxy of the holders of one-third of the shares entitled to be cast constitutes a quorum at any meeting of shareholders of the Portfolio. When a quorum is present at any meeting, the affirmative vote of a majority of the votes (or with respect to the election of directors, a plurality of votes) cast shall decide any question brought before such meeting, except as otherwise required by law. Shares of Common Stock of the Portfolios The Portfolios' shares have no preemptive rights. Each share has equal voting, dividend, distribution and liquidation rights. Shareholders are entitled to one vote per share. All voting rights for the election of directors are non-cumulative, which means that the holders of more than 50% of the shares of common stock of AVP can elect 100% of the directors then nominated for election if they choose to do so and, in such event, the holders of the remaining shares of common stock will not be able to elect any directors. The Portfolios are organized as series of the same Maryland corporation and thus their shareholders have the same rights due to them under state law. The Portfolios are not required to, and do not, hold annual meetings of shareholders and have no current intention to hold such meetings, except as required by the 1940 Act. Under the 1940 Act, the Portfolios are required to hold a shareholder meeting if, among other reasons, the number of Directors elected by shareholders is less than a majority of the total number of Directors, or if a Portfolio seeks to change its fundamental investment policies. Dividends and Distributions The Portfolios have the same dividends and distributions policies. The Portfolios declare dividends on their shares at least annually. The income and capital gains distribution is made in shares of each Portfolio. Indemnification and Liability of Directors and Officers The charter of AVP generally provides for the indemnification of officers and directors, as applicable, to the full extent permitted by Maryland law. This indemnification does not protect any such person against any liability to a Portfolio or any shareholder thereof to which such person would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the satisfaction of such person's office. Maryland law permits a Maryland corporation to include in its charter a provision limiting the liability of its directors and officers to the corporation and its shareholders for money damages except for liability resulting from (a) actual receipt of an improper benefit or profit in money, property or services or (b) active and deliberate dishonesty established by a final judgment as being material to the cause of action. AVP's charter contains such a provision that eliminates directors' and officers' liability to the maximum extent permitted by Maryland law. This exculpation does not protect any such person against any liability to a Portfolio or any shareholder thereof to which such person would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the satisfaction of such person's office. APPENDIX F FORM OF PLAN OF ACQUISITION AND LIQUIDATION ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND, INC. WITH RESPECT TO ITS SERIES ALLIANCEBERNSTEIN [______________________] PORTFOLIO AND ALLIANCEBERNSTEIN U.S. GOVERNMENT/HIGH GRADE SECURITIES PORTFOLIO As of [____________], 2008 This Plan of Acquisition and Liquidation (the "Plan") has been adopted by the Board of Directors of AllianceBernstein Variable Products Series Fund, Inc., a Maryland corporation (the "Corporation"), as of this [_____] day of [____________], 2008, to provide for the reorganization of AllianceBernstein [______________________] Portfolio (the "Acquired Portfolio") into AllianceBernstein U.S. Government/High Grade Securities Portfolio (the "Acquiring Portfolio"). The Acquired Portfolio and the Acquiring Portfolio (together, the "Portfolios") are each separate series of the Corporation, an open-end management investment company registered with the Securities and Exchange Commission (the "SEC") under the Investment Company Act of 1940, as amended (the "1940 Act"). The Board of Directors (the "Board") has determined that it is in the best interest of the Acquiring Portfolio and the Acquired Portfolio that the Acquired Portfolio transfer all of the assets attributable to its Class A shares held by its stockholders ("Stockholders") in exchange for Class A shares of equal net asset value of the Acquiring Portfolio ("Class A Acquisition Shares"), transfer all of the assets attributable to its Class B shares held by its Stockholders in exchange for Class B shares of equal net asset value of the Acquiring Portfolio ("Class B Acquisition Shares" and together with Class A Acquisition Shares, the "Acquisition Shares") and distribute Class A Acquisition Shares and Class B Acquisition Shares, respectively, of the Acquired Portfolio and that the Corporation redeem the outstanding shares (the "Acquired Portfolio Shares") of the Acquired Portfolio, all as provided for below (the "Acquisition"). In this Plan of Acquisition, any references to a Portfolio taking action shall mean and include all necessary actions of the Corporation on behalf of a Portfolio, unless the context of this Plan of Acquisition or the 1940 Act requires otherwise. The Corporation intends that the Acquisition qualify as a "reorganization" within the meaning of Section 368(a) of the United States Internal Revenue Code of 1986, as amended (the "Code"), and any successor provisions, and that with respect to the Acquisition, the Acquiring Portfolio and the Acquired Portfolio will each be a "party to a reorganization" within the meaning of Section 368(b) of the Code. 1. Definitions In addition to the terms elsewhere defined herein, each of the following terms shall have the meaning indicated for that term as follows: 1933 Act Securities Act of 1933, as amended. Assets All assets of any kind and all interests, rights, privileges and powers of or attributable to the Acquired Portfolio or its shares, as appropriate, whether or not determinable at the Effective Time (as defined herein) and wherever located, including, without limitation, all cash, cash equivalents, securities, claims (whether absolute or contingent, known or unknown, accrued or unaccrued or conditional or unmatured), contract rights and receivables (including dividend and interest receivables) owned by the Acquired Portfolio or attributable to its shares and any deferred or prepaid expense, other than unamortized organizational expenses, shown as an asset on the Acquired Portfolio's books. Closing Date Such date as the officers of the Corporation shall designate. Effective Time 5:00 p.m., Eastern Time, on the Closing Date, or such other time as the officers of the Corporation shall designate. Financial Statements The audited financial statements of the relevant Portfolio for its most recently completed fiscal year and, if applicable, the unaudited financial statements of that Portfolio for its most recently completed semi-annual period. Liabilities All liabilities, expenses and obligations of any kind whatsoever of the Acquired Portfolio, whether known or unknown, accrued or unaccrued, absolute or contingent or conditional or unmatured. N-14 Registration Statement The Registration Statement of the Acquiring Portfolio on Form N-14 under the 1940 Act that will register the Acquisition Shares to be issued in the Acquisition. Valuation Time The close of regular session trading on the New York Stock Exchange ("NYSE") on the Closing Date, when for purposes of the Plan, the Corporation determines the net asset value per Acquisition Share of the Acquiring Portfolio and the net value of the assets of the Acquired Portfolio. NAV A Portfolio's net asset value is calculated by valuing and totaling assets and then subtracting liabilities and then dividing the balance by the number of shares that are outstanding. 2. Regulatory Filings The Acquiring Portfolio shall promptly prepare and file the N-14 Registration Statement with the SEC, and the Acquiring Portfolio and the Acquired Portfolio also shall make any other required or appropriate filings with respect to the actions contemplated hereby. 3. Transfer of the Acquired Portfolio's Assets The Acquiring Portfolio and the Acquired Portfolio shall take the following steps with respect to the Acquisition, as applicable: (a) On or prior to the Closing Date, the Acquired Portfolio shall pay or provide for the payment of all of the Liabilities, expenses, costs and charges of or attributable to the Acquired Portfolio that are known to the Acquired Portfolio and that are due and payable prior to or as of the Closing Date. (b) Prior to the Effective Time, except to the extent prohibited by Rule 19b-1 under the 1940 Act, the Acquired Portfolio will declare to Acquired Portfolio Stockholders of record a dividend or dividends which, together with all previous such dividends, shall have the effect of distributing (a) all the excess of (i) the Acquired Portfolio's investment income excludable from gross income under Section 103(a) of the Code over (ii) the Acquired Portfolio's deductions disallowed under Sections 265 and 171(a)(2) of the Code, (b) all of the Acquired Portfolio's investment company taxable income (as defined in Code Section 852), (computed in each case without regard to any deduction for dividends paid), and (c) all of the Acquired Portfolio's net realized capital gain (as defined in Code Section 1222), if any (after reduction for any capital loss carryover), for the taxable year ending on December 31, 2007 and for the short taxable year beginning on January 1, 2008, and ending on the Closing Date. Such dividends will be declared and paid to ensure continued qualification of the Acquired Portfolio as a "regulated investment company" for tax purposes and to eliminate fund-level tax. (c) At the Effective Time, the Acquired Portfolio shall assign, transfer, deliver and convey the Assets to the Acquiring Portfolio, subject to the Liabilities, and the Acquiring Portfolio shall then accept the Assets and assume the Liabilities such that at and after the Effective Time (i) the Assets at and after the Effective Time shall become and be assets of the Acquiring Portfolio, and (ii) the Liabilities at the Effective Time shall attach to the Acquiring Portfolio, and shall be enforceable against the Acquiring Portfolio to the same extent as if initially incurred by the Acquiring Portfolio. The Corporation shall redeem the outstanding shares of the Acquired Portfolio by issuance of shares of Acquiring Portfolio as described more fully below. (d) Within a reasonable time prior to the Closing Date, the Acquired Portfolio shall provide, if requested, a list of the Assets to the Acquiring Portfolio. The Acquired Portfolio may sell any asset on such list prior to the Effective Time. After the Acquired Portfolio provides such list, the Acquired Portfolio will not acquire any additional securities or permit to exist any encumbrances, rights, restrictions or claims not reflected on such list, without the approval of the Acquiring Portfolio. Within a reasonable time after receipt of the list and prior to the Closing Date, the Acquiring Portfolio will advise the Acquired Portfolio in writing of any investments shown on the list that the Acquiring Portfolio has determined to be inconsistent with its investment objective, policies and restrictions. The Acquired Portfolio will dispose of any such securities prior to the Closing Date to the extent practicable and consistent with applicable legal requirements, including the Acquired Portfolio's investment objectives, policies and restrictions. In addition, if the Acquiring Portfolio determines that, as a result of the Acquisition, the Acquiring Portfolio would own an aggregate amount of an investment that would exceed a percentage limitation applicable to the Acquiring Portfolio, the Acquiring Portfolio will advise the Acquired Portfolio in writing of any such limitation and the Acquired Portfolio shall dispose of a sufficient amount of such investment as may be necessary to avoid the limitation as of the Effective Time, to the extent practicable and consistent with applicable legal requirements, including the Acquired Portfolio's investment objectives, policies and restrictions. (e) The Acquired Portfolio shall assign, transfer, deliver and convey the Assets to the Acquiring Portfolio at the Effective Time on the following basis: (1) The value of the Assets less the Liabilities of the Acquired Portfolio attributable to shares of Class A held by Stockholders and shares of Class B held by Stockholders, determined as of the Valuation Time, shall be divided by the then NAV of one Class A and Class B Acquisition Share, as applicable, and, in exchange for the transfer of the Assets, the Acquiring Portfolio shall simultaneously issue and deliver to the Acquired Portfolio the number of Class A and Class B Acquisition Shares (including fractional shares) so determined, rounded to the second decimal place or such other decimal place as the officers of the Corporation shall designate; (2) The NAV of Class A and Class B Acquisition Shares to be delivered to the Acquired Portfolio shall be determined as of the Valuation Time in accordance with the Acquiring Portfolio's then applicable valuation procedures, and the net value of the Assets to be conveyed to the Acquiring Portfolio shall be determined as of the Valuation Time in accordance with the then applicable valuation procedures of the Acquired Portfolio; and (3) The portfolio securities of the Acquired Portfolio shall be made available by the Acquired Portfolio to The Bank of New York, as custodian for the Acquiring Portfolio (the "Custodian"), for examination no later than five business days preceding the Valuation Time. On the Closing Date, such portfolio securities and all the Acquired Portfolio's cash shall be delivered by the Acquired Portfolio to the Custodian for the account of the Acquiring Portfolio, such portfolio securities to be duly endorsed in proper form for transfer in such manner and condition as to constitute good delivery thereof in accordance with the custom of brokers or, in the case of portfolio securities held in the U.S. Treasury Department's book-entry system or by The Depository Trust Company, Participants Trust Company or other third party depositories, by transfer to the account of the Custodian in accordance with Rule 17f-4, Rule 17f-5 or Rule 17f-7, as the case may be, under the 1940 Act and accompanied by all necessary federal and state stock transfer stamps or a check for the appropriate purchase price thereof. The cash delivered shall be in the form of currency or certified or official bank checks, payable to the order of the Custodian, or shall be wired to an account pursuant to instructions provided by the Acquiring Portfolio. (f) Promptly after the Closing Date, the Acquired Portfolio will deliver to the Acquiring Portfolio a Statement of Assets and Liabilities of the Acquired Portfolio as of the Closing Date. 4. Termination of the Acquired Portfolio, Registration of Acquisition Shares and Access to Records The Acquired Portfolio and the Acquiring Portfolio also shall take the following steps, as applicable: (a) At or as soon as reasonably practical after the Effective Time, the Acquired Portfolio shall terminate by transferring pro rata to its Class A Stockholders of record Class A Acquisition Shares received by the Acquired Portfolio pursuant to Section 3(e)(1) of this Plan and to its Class B Stockholders of record Class B Acquisition Shares received by the Acquired Portfolio pursuant to Section 3(e)(1) of this Plan. The Acquiring Portfolio shall establish accounts on its share records and note on such accounts the names of the former Acquired Portfolio Stockholders and the types and amounts of the Acquisition Shares that former Acquired Portfolio Stockholders are due based on their respective holdings of the Acquired Portfolio Shares as of the close of business on the Closing Date. Fractional Acquisition Shares shall be carried to the second decimal place. The Acquiring Portfolio shall not issue certificates representing the Acquisition Shares in connection with such exchange. All issued and outstanding Acquired Portfolio Shares will be simultaneously redeemed and cancelled on the books of the Acquired Portfolio. Ownership of the Acquisition Shares will be shown on the books of the Acquiring Portfolio's transfer agent. Following distribution by the Acquired Portfolio to its Stockholders of all Acquisition Shares delivered to the Acquired Portfolio, the Acquired Portfolio shall wind up its affairs and shall take all steps as are necessary and proper to terminate as soon as is reasonably possible after the Effective Time. (b) At and after the Closing Date, the Acquired Portfolio shall provide the Acquiring Portfolio and its transfer agent with immediate access to: (i) all records containing the names, addresses and taxpayer identification numbers of all of the Acquired Portfolio's Stockholders and the number and percentage ownership of the outstanding shares of the Acquired Portfolio owned by Stockholders as of the Effective Time, and (ii) all original documentation (including all applicable Internal Revenue Service forms, certificates, certifications and correspondence) relating to the Acquired Portfolio Stockholders' taxpayer identification numbers and their liability for or exemption from back-up withholding. The Acquired Portfolio shall preserve and maintain, or shall direct its service providers to preserve and maintain, records with respect to the Acquired Portfolio as required by Section 31 of, and Rules 31a-1 and 31a-2 under, the 1940 Act. 5. Conditions to Consummation of the Acquisition The consummation of the Acquisition shall be subject to the following conditions precedent: (a) There shall have been no material adverse change in the financial condition, results of operations, business, properties or assets of the Acquiring Portfolio or the Acquired Portfolio since the date of the most recent Financial Statements. Negative investment performance shall not be considered a material adverse change. (b) The Corporation shall have received an opinion of Seward & Kissel LLP, substantially to the effect that for federal income tax purposes: (1) The Acquisition will constitute a "reorganization" within the meaning of Section 368(a) of the Code and that the Acquiring Portfolio and the Acquired Portfolio will each be "a party to a reorganization" within the meaning of Section 368(b) of the Code; (2) A Stockholder of the Acquired Portfolio will recognize no gain or loss on the exchange of the Stockholder's shares of the Acquired Portfolio solely for Acquisition Shares; (3) Neither the Acquired Portfolio nor the Acquiring Portfolio will recognize any gain or loss upon the transfer of all of the Assets to the Acquiring Portfolio in exchange for Acquisition Shares and the assumption by the Acquiring Portfolio of the Liabilities pursuant to this Plan or upon the distribution of Acquisition Shares to Stockholders of the Acquired Portfolio in exchange for their respective shares of the Acquired Portfolio; (4) The holding period and tax basis of the Assets acquired by the Acquiring Portfolio will be the same as the holding period and tax basis that the Acquired Portfolio had in such Assets immediately prior to the Acquisition; (5) The aggregate tax basis of Acquisition Shares received in connection with the Acquisition by each Stockholder of the Acquired Portfolio (including any fractional share to which the Stockholder may be entitled) will be the same as the aggregate tax basis of the shares of the Acquired Portfolio surrendered in exchange therefor, and increased by any gain recognized on the exchange; (6) The holding period of Acquisition Shares received in connection with the Acquisition by each Stockholder of the Acquired Portfolio (including any fractional share to which the stockholder may be entitled) will include the holding period of the shares of the Acquired Portfolio surrendered in exchange therefor, provided that such Acquired Portfolio shares constitute capital assets in the hands of the Stockholder as of the Closing Date; and (7) The Acquiring Portfolio will succeed to the capital loss carryovers of the Acquired Portfolio but the use of the Acquiring Portfolio's existing capital loss carryovers (as well as the carryovers of the Acquired Portfolio) may be subject to limitation under Section 383 of the Code after the Acquisition. The opinion will be based on certain factual certifications made by officers of the Portfolios and will also be based on customary assumptions and subject to certain qualifications. The opinion is not a guarantee that the tax consequences of the Acquisition will be as described above. Notwithstanding this subparagraph (b), Seward & Kissel LLP will express no view with respect to the effect of the Acquisition on any transferred asset as to which any unrealized gain or loss is required to be recognized at the end of a taxable year (or on the termination or transfer thereof) under federal income tax principles. Each Portfolio shall provide additional factual representations to Seward & Kissel LLP with respect to the Portfolios that are reasonably necessary to enable Seward & Kissel LLP to deliver the tax opinion. Notwithstanding anything in this Plan to the contrary, neither Portfolio may waive in any material respect the conditions set forth under this subparagraph (b). (c) The N-14 Registration Statement shall have become effective under the 1933 Act as to the Acquisition Shares, and the SEC shall not have instituted and, to the knowledge of the Acquiring Portfolio, is not contemplating instituting any stop order suspending the effectiveness of the N-14 Registration Statement. (d) No action, suit or other proceeding shall be threatened or pending before any court or governmental agency in which it is sought to restrain or prohibit, or obtain damages or other relief in connection with the Acquisition. (e) The SEC shall not have issued any unfavorable advisory report under Section 25(b) of the 1940 Act nor instituted any proceeding seeking to enjoin consummation of the Acquisition under Section 25(c) of the 1940 Act. (f) The Acquired Portfolio shall have received a letter from AllianceBernstein L.P. (the "Adviser") with respect to insurance matters in form and substance satisfactory to the Acquired Portfolio. (g) The Acquiring Portfolio shall have received a letter from the Adviser agreeing to indemnify the Acquiring Portfolio in respect of certain liabilities of the Acquired Portfolio in form and substance satisfactory to the Acquiring Portfolio. 6. Closing (a) The Closing shall be held at the offices of the Corporation, 1345 Avenue of the Americas, New York, New York 10105, or at such other place as the officers of the Corporation may designate. (b) In the event that at the Valuation Time (i) the NYSE shall be closed to trading or trading thereon shall be restricted, or (ii) trading or the reporting of trading on said Exchange or elsewhere shall be disrupted so that accurate appraisal of the value of the net assets of the Acquired Portfolio or the Acquiring Portfolio is impracticable, the Closing Date shall be postponed until the first business day after the day when trading shall have been fully resumed and reporting shall have been restored; provided that if trading shall not be fully resumed and reporting restored within three business days of the Valuation Time, this Plan may be terminated by the Board. (c) The Acquiring Portfolio will provide to the Acquired Portfolio evidence satisfactory to the Acquired Portfolio that Acquisition Shares issuable pursuant to the Acquisition have been credited to the Acquired Portfolio's account on the books of the Acquiring Portfolio. After the Closing Date, the Acquiring Portfolio will provide to the Acquired Portfolio evidence satisfactory to the Acquired Portfolio that such Shares have been credited pro rata to open accounts in the names of the Acquired Portfolio Stockholders. (d) At the Closing, each party shall deliver to the other such bills of sale, instruments of assumption of liabilities, checks, assignments, stock certificates, receipts or other documents as such other party or its counsel may reasonably request in connection with the transfer of assets, assumption of liabilities and liquidation contemplated by this Plan. 7. Termination of Plan A majority of the Corporation's Board may terminate this Plan before the applicable Effective Time if: (i) any of the conditions precedent set forth herein are not satisfied; or (ii) the Board determines that the consummation of the Acquisition is not in the best interests of either Portfolio or its Stockholders. 8. Termination of the Acquired Portfolio If the Acquisition is consummated, the Acquired Portfolio shall terminate its registration under the 1940 Act and the 1933 Act and will terminate. 9. Expenses The Acquisition expenses shall be borne proportionately by the Acquired Portfolio and other portfolios of the Corporation expected to be acquired by the Acquiring Portfolio concurrently with the Acquired Portfolio based on its net assets. APPENDIX G CAPITALIZATION The following table shows on an unaudited basis the capitalization of each of High Yield, Global Bond, AGI, Global Dollar and High Grade as of September 30, 2007 and on a pro forma combined basis, giving effect to the acquisitions of the assets and liabilities of High Yield, Global Bond, AGI and Global Dollar by High Grade at net asset value as of September 30, 2007.
Pro Forma High Grade High Yield Global Bond AGI Global Dollar High Grade Adjustments (pro forma)(a) ---------- ----------- ------- ------------- --------- ----------- -------------- Class A Class A Class A Class A Class A Class A ------- ------- ------- ------- ------- ------- Net Asset Value $26,254,269 $27,807,775 $31,738,114 $20,902,760 $69,267,676 230,497(b) $175,970,594 Shares outstanding 3,743,544 2,318,618 2,625,472 1,585,450 5,977,348 (1,085,303) 15,165,129 Net asset value per share $7.01 $11.99 $12.09 $13.18 $11.59 $11.60 Class B Class B Class B Class B Class B Class B ------- ------- ------- ------- ------- ------- Net Asset Value $ 9,610,035 $11,497,959 $6,245,408 $5,284,499 $20,585,476 70,503(b) $53,223,377 Shares outstanding 1,372,624 967,535 516,531 402,392 1,791,143 (424,417) 4,625,809 Net asset value per share $7.00 $11.88 12.09 13.13 $11.49 $11.51 ----------------------------------------- (a) Assumes the Acquisitions were consummated on January 25, 2008 and is for information purposes only. No assurance can be given as to how many shares of High Grade will be received by the shareholders of High Yield, Global Bond, AGI and Global Dollar on the date the Acquisitions take place, and the foregoing should not be relied upon to reflect the number of shares of High Grade that actually will be received on or after such date. (b) Includes adjustments for estimated proxy costs.
APPENDIX H LEGAL PROCEEDINGS On October 2, 2003, a purported class action complaint entitled Hindo, et al. v. AllianceBernstein Growth & Income Fund, et al. ("Hindo Complaint") was filed against the Adviser, AllianceBernstein Holding L.P. ("Holding"), AllianceBernstein Corporation, AXA Financial, Inc., the AllianceBernstein Funds, certain officers of the Adviser ("AllianceBernstein defendants"), and certain other unaffiliated defendants, as well as unnamed Doe defendants. The Hindo Complaint was filed in the United States District Court for the Southern District of New York by alleged shareholders of two of the AllianceBernstein Mutual Funds. The Hindo Complaint alleges that certain of the AllianceBernstein defendants failed to disclose that they improperly allowed certain hedge funds and other unidentified parties to engage in "late trading" and "market timing" of AllianceBernstein Mutual Fund securities, violating Sections 11 and 15 of the Securities Act of 1933, as amended, Sections 10(b) and 20(a) of the Securities and Exchange Act of 1934, as amended, and Sections 206 and 215 of the Investment Advisers Act of 1940, as amended. Plaintiffs seek an unspecified amount of compensatory damages and rescission of their contracts with the Adviser, including recovery of all fees paid to the Adviser pursuant to such contracts. Following October 2, 2003, additional lawsuits making factual allegations generally similar to those in the Hindo Complaint were filed in various federal and state courts against the Adviser and certain other defendants. All state court actions against the Adviser either were voluntarily dismissed or removed to federal court. On February 20, 2004, the Judicial Panel on Multidistrict Litigation transferred all federal actions to the United States District Court for the District of Maryland (the "Mutual Fund MDL"). On September 29, 2004, plaintiffs filed consolidated amended complaints with respect to four claim types: mutual fund shareholder claims; mutual fund derivative claims; derivative claims brought on behalf of Holding; and claims brought under ERISA by participants in the Profit Sharing Plan for Employees of the Adviser. All four complaints include substantially identical factual allegations, which appear to be based in large part on the Order of the SEC dated December 18, 2003 as amended and restated January 15, 2004 (the "SEC Order") and the New York State Attorney General Assurance of Discontinuance dated September 1, 2004 (the "NYAG Order"). On April 21, 2006, the Adviser and attorneys for the plaintiffs in the mutual fund shareholder claims, mutual fund derivative claims, and ERISA claims entered into a confidential memorandum of understanding ("MOU") containing their agreement to settle these claims. The agreement will be documented by a stipulation of settlement and will be submitted for court approval at a later date. The settlement amount ($30 million), which we previously accrued and disclosed, has been disbursed. The derivative claims brought on behalf of Holding, in which plaintiffs seek an unspecified amount of damages, remain pending. It is possible that these matters and/or other developments resulting from these matters could result in increased redemptions of the AllianceBernstein Mutual Funds' shares or other adverse consequences to the AllianceBernstein Mutual Funds. This may require the AllianceBernstein Mutual Funds to sell investments held by those funds to provide for sufficient liquidity and could also have an adverse effect on the investment performance of the AllianceBernstein Mutual Funds. However, the Adviser believes that these matters are not likely to have a material adverse effect on its ability to perform advisory services relating to the AllianceBernstein Mutual Funds. APPENDIX I SHARE OWNERSHIP INFORMATION Shares Outstanding As of January 11, 2008, each Portfolio had the following number of shares of common stock outstanding. Number of Outstanding Shares of Portfolio Class Common Stock --------- ----- ------------ High Yield A 3,451,047.6100 B 1,289,827.8580 Global Bond A 2,292,708.7170 B 989,484.6900 AGI A 2,527,405.3550 B 490,488.8400 Global Dollar A 1,455,017.5620 B 381,515.8400 High Grade A 5,622,479.6130 B 1,742,356.0110 Ownership of Shares As of January 11, 2008, the Directors and officers of each Portfolio as a group beneficially owned less than 1% of the outstanding shares of common stock of that Portfolio. To the knowledge of each Portfolio, the following table shows the persons owning, as of January 11, 2008, either of record or beneficially, 5% or more of the outstanding shares of the Portfolio and the percentage of the combined Portfolio's shares to be owned by the persons if the Acquisition had been consummated as of that date.
Percentage of Outstanding Shares Number of Percentage of of Combined Name and Address of Outstanding Shares Outstanding Shares Portfolio Class Portfolio and Class Shareholder of Class Owned of Class Owned Owned ------------------- ----------- -------------- -------------- ----- High Yield American International Life 325,141.789 9.43% 2.14% Class A Insurance Co of NY Attn: Ed Bacon 600 N. King Street Wilmington, DE 19801-3708 AIG Life Insurance Company 3,019,876.465 87.56% 19.89% Attn: Ed Bacon 2727A Allen Parkway #4D1 Houston, TX 77019-2107 Anchor National Life Ins Co 1,285,198.944 99.72% 27.75% Class B Attn: Variable Annuity Accounting 21650 Oxnard St MSC 6-7 Woodland Hills, CA 91367-4901 Global Bond Sun Life Assurance Company of 586,802.449 25.59% 3.87% Class A Canada (US) Attn: James Joseph P.O. Box 9133 Wellesley Hills, MA 02481-9131 AIG Life Insurance Company 1,224,052.081 53.38% 8.06% Attn: Ed Bacon 2727A Allen Parkway #4D1 Houston, TX 77019-2107 American Int'l Group GVUL PS 119,005.198 5.19% 0.78% Attn: Ed Bacom 2727A Allen Parkway #4D1 Houston, TX 77019-2107 Hartford Life Separate Account 202,883.157 20.48% 4.38% Class B 200 Hopmeadow Street P.O. Box 2999 Hartford, CT 06104-2999 Sun Life Assurance Company 226,158.404 22.83% 4.88% of Canada (US) Attn: James Joseph P.O. Box 9133 Wellesley Hills, MA 02481-9133 Anchor National Life Ins Co. 518,089.400 52.31% 11.19% Attn: Variable Annuity Accounting 21650 Oxnard Street MSC 6-7 Woodland Hills, CA 91367-4901 AGI American International Life Insurance 265,817.922 10.53% 1.75% Class A Company of NY Attn: Ed Bacon 600 N. King Street Wilmington, DE 19801-3708 AIG Life Insurance Company 2,221,766.543 88.04% 14.63% Attn: Ed Bacon 2727A Allen Parkway #4D1 Houston, TX 77019-2107 Anchor National Life Ins Co 487,552.553 99.41% 10.53% Class B Attn: Variable Annuity Accounting 21650 Oxnard St MSC 6-7 Woodland Hills, CA 91367-4901 Global Dollar American International Life 143,542.365 9.88% 0.95% Class A Insurance Company of NY Attn: Ed Bacon 2727 A-Allen Parkway Houston, TX 77019-2115 AIG Life Insurance Company 1,282,201.138 88.25% 8.45% Attn: Ed Bacon 2727A Allen Parkway #4D1 Houston, TX 77019-2107 Anchor National Life Ins Co 375,895.742 98.21% 8.12% Class B Attn: Variable Annuity Accounting 21650 Oxnard St MSC 6-7 Woodland Hills, CA 91367-4901 High Grade American International Life Insurance 561,037.506 9.97% 3.00% Class A Company of NY Attn: Ed Bacon 2727 A-Allen Parkway Houston, TX 77019-2115 AIG Life Insurance Company 4,857,090.155 86.33% 28.19% Attn: Ed Bacon 2727A Allen Parkway #4D1 Houston, TX 77019-2115 AIG Life Insurance Company 139,066.052 7.99% 3.00% Class B Attn: Ed Bacon 2727A Allen Parkway #4D1 Houston, TX 77019-2107 Anchor National Life Insurance Co. 1,305,606.575 75.03% 28.19% Attn: Variable Annuity Accounting 21650 Oxnard Street MSC 6-7 Woodland Hills, CA 91367-4901 American Enterprise Life Insurance 281,613.482 16.18% 6.08% Company 1438 - AXP Minneapolis, MN 55474-0001
APPENDIX J FINANCIAL HIGHLIGHTS The financial highlights table is intended to help you understand each Portfolio's financial performance for the past 5 years (or, if shorter, the period of the Portfolio's operations). Certain information reflects financial results for a single share of each Portfolio. The total returns in the table represent the rate that an investor would have earned (or lost) on an investment in the Portfolio (assuming reinvestment of all dividends and distributions). Except as otherwise indicated, this information has been audited by Ernst & Young LLP, the independent registered public accounting firm for the Portfolios as of the end of the Portfolios' last fiscal year, whose reports, along with each Portfolio's financial statements, are included in the Portfolios' annual report and available upon request. High Yield ---------- Class A
Year Ended December 31, ------------------------------------------------------- 2007 2006 2005 2004 2003 --------- --------- --------- --------- --------- Net asset value, beginning of period $7.40 $7.43 $7.97 $7.91 $6.83 --------- --------- --------- --------- --------- Income From Investment Operations Net investment income (a) .48 .51 .58 .60(b) .55 Net realized and unrealized gain (loss) on investment and foreign currency transactions (.40) .12 (.45) (.01) .95 --------- --------- --------- --------- --------- Net increase (decrease) in net asset value from operations .08 .63 .13 .59 1.50 --------- --------- --------- --------- --------- Less: Dividends Dividends from net investment income (.58) (.66) (.67) (.53) (.42) Net asset value, end of period $6.90 $7.40 $7.43 $7.97 $7.91 ========= ========= ========= ========= ========= Total Return Total investment return based on net asset value (c) .89% 9.05% 1.78% 7.98% 22.44% Ratios/Supplemental Data Net assets, end of period (000's omitted) $24,082 $31,701 $34,968 $42,842 $48,076 Ratio to average net assets of: Expenses, net of waivers and reimbursements 1.29% 1.20%(d) 1.09% 1.04% 1.46% Expenses, before waivers and reimbursements 1.29% 1.20%(d) 1.09% 1.21% 1.46% Net investment income 6.61% 6.98%(d) 7.58% 7.74%(b) 7.48% Portfolio turnover rate 39% 57% 54% 80% 105% -----------------------------------------------------------------------------------------------------------------------------------
See footnotes on pages 76-77. High Yield ---------- Class B
Year Ended December 31, -------------------------------------------------------------- 2007 2006 2005 2004 2003 ----------- --------- --------- --------- ------- Net asset value, beginning of period $7.38 $7.41 $7.95 $7.91 $6.84 ----------- --------- --------- --------- ------- Income From Investment Operations Net investment income (a) .46 .49 .56 .58(b) .52 Net realized and unrealized gain (loss) on investment and foreign currency transactions (.40) .12 (.45) (.02) .97 ----------- --------- --------- --------- ------- Net increase in net asset value from operations .06 .61 .11 .56 1.49 ----------- --------- --------- --------- ------- Less: Dividends Dividends from net investment income (.56) (.64) (.65) (.52) (.42) Net asset value, end of period $6.88 $7.38 $7.41 $7.95 $7.91 =========== ========= ========= ========= ======= Total Return Total investment return based on net asset value (c) .62% 8.76% 1.54% 7.62% 22.24% Ratios/Supplemental Data Net assets, end of period (000's omitted) $8,964 $10,823 $11,085 $12,558 $7,962 Ratio to average net assets of: Expenses, net of waivers and reimbursements 1.54% 1.45%(d) 1.34% 1.30% 1.70% Expenses, before waivers and reimbursements 1.54% 1.45%(d) 1.34% 1.47% 1.70% Net investment income 6.36% 6.72%(d) 7.33% 7.51%(b) 7.19% Portfolio turnover rate 39% 57% 54% 80% 105% -----------------------------------------------------------------------------------------------------------------------------------
Global Bond ----------- Class A Year Ended December 31, ------------------------------------------------------- 2007 2006 2005 2004 2003 --------- --------- -------- --------- --------- Net asset value, beginning of period $11.59 $11.32 $13.63 $13.50 $12.63 --------- --------- -------- --------- --------- Income From Investment Operations Net investment income (a) .31 .29 .28 .25(b) .25 Net realized and unrealized gain (loss) on investment and foreign currency transactions .85 .26 (1.26) .93 1.40 --------- --------- -------- --------- --------- Net increase (decrease) in net asset value from operations 1.16 .55 (.98) 1.18 1.65 --------- --------- -------- --------- --------- Less Dividends and Distributions Dividends from net investment income (.38) (.18) (1.18) (.78) (.78) Distributions from net realized gain on investment and foreign currency transactions -0- (.10) (.15) (.27) -0- --------- --------- -------- --------- --------- Total dividends and distributions (.38) (.28) (1.33) (1.05) (.78) --------- --------- -------- --------- --------- Net asset value, end of period $12.37 $11.59 $11.32 $13.63 $13.50 ========= ========= ======== ========= ========= Total Return Total investment return based on net asset value (c) 10.35% 4.97% (7.65)% 9.63% 13.26% Ratios/Supplemental Data Net assets, end of period (000's omitted) $27,930 $29,755 $47,443 $56,043 $58,658 Ratio to average net assets of: Expenses, net of waivers and reimbursements 1.23% 1.03%(d) .87% .88% 1.15% Expenses, before waivers and reimbursements 1.23% 1.03%(d) .87% 1.02% 1.15% Net investment income 2.67% 2.53%(d) 2.30% 1.93%(b) 1.93% Portfolio turnover rate 193% 156% 148% 107% 197% -----------------------------------------------------------------------------------------------------------------------------------
See footnotes on pages 76-77.
Global Bond Class B Year Ended December 31, ------------------------------------------------------- 2007 2006 2005 2004 2003 --------- --------- --------- --------- --------- Net asset value, beginning of period $11.47 $11.21 $13.51 $13.40 $12.54 --------- --------- --------- --------- --------- Income From Investment Operations Net investment income (a) .28 .26 .25 .22(b) .21 Net realized and unrealized gain (loss) on investment and foreign currency transactions .85 .25 (1.25) .91 1.41 --------- --------- --------- --------- --------- Net increase (decrease) in net asset value from operations 1.13 .51 (1.00) 1.13 1.62 --------- --------- --------- --------- --------- Less: Dividends and Distributions Dividends from net investment income (.35) (.15) (1.15) (.75) (.76) Distributions from net realized gain on investment and foreign currency transactions -0- (.10) (.15) (.27) -0- --------- --------- --------- --------- --------- Total dividends and distributions (.35) (.25) (1.30) (1.02) (.76) --------- --------- --------- --------- --------- Net asset value, end of period $12.25 $11.47 $11.21 $13.51 $13.40 ========= ========= ========= ========= ========= Total Return Total investment return based on net asset value (c) 10.15% 4.64% (7.87)% 9.33% 13.08% Ratios/Supplemental Data Net assets, end of period, (000's omitted) $11,957 $12,566 $12,986 $13,997 $11,399 Ratio to average net assets of: Expenses, net of waivers and reimbursements 1.47% 1.30%(d) 1.12% 1.13% 1.40% Expenses, before waivers and reimbursements 1.47% 1.30%(d) 1.12% 1.27% 1.40% Net investment income 2.42% 2.30%(d) 2.05% 1.72%(b) 1.66% Portfolio turnover rate 193% 156% 148% 107% 197% -----------------------------------------------------------------------------------------------------------------------------------
See footnotes on pages 76-77.
AGI --- Class A Year Ended December 31, -------------------------------------------------------------------- 2007 2006 2005 2004 2003 ------------ ----------- ---------- --------- ---------- Net asset value, beginning of period $12.49 $13.06 $12.91 $13.01 $12.65 ------------ ----------- ---------- --------- ---------- Income From Investment Operations Net investment income (a) .58 .59 .70 .65(b) .61 Net realized and unrealized gain (loss) on investment and foreign currency transactions .39 (.22) .38 (.06) .34 ------------ ----------- ---------- --------- ---------- Net increase (decrease) in net asset value from operations .97 .37 1.08 .59 .95 ------------ ----------- ---------- --------- ---------- Less: Dividends and Distributions Dividends from net investment income (.77) (.90) (.93) (.69) (.59) Distributions from net realized gain on investment and foreign currency transactions (.11) (.04) -0- -0- -0- ------------ ----------- ---------- --------- ---------- Total dividends and distributions (.88) (.94) (.93) (.69) (.59) ------------ ----------- ---------- --------- ---------- Net asset value, end of period $12.58 $12.49 $13.06 $12.91 $13.01 ============ =========== ========== ========= ========== Total Return Total investment return based on net asset value (c) 8.38% 3.31% 8.67% 4.89% 7.35% Ratios/Supplemental Data Net assets, end of period (000's omitted) $31,802 $35,767 $45,730 $47,776 $60,550 Ratio to average net assets of: Expenses, net of waivers and (d) reimbursements 2.28% 1.50% 1.28% 1.00% 1.04% Expenses, before waivers and (d) reimbursements 2.28% 1.50% 1.28% 1.11% 1.04% Expenses, before waivers and (d) reimbursements, excluding interest expense 1.20% 1.08% 1.02% .98% 1.04% Net investment income 4.69% 4.74%(d) 5.42% 5.07%(b) 4.75% Portfolio turnover rate 8% 43% 75% 69% 73% -----------------------------------------------------------------------------------------------------------------------------------
See footnotes on pages 76-77.
AGI --- Class B Year Ended December 31, ----------------------------------------------------------------- 2007 2006 2005 2004 2003 ------------ ----------- ---------- --------- ---------- Net asset value, beginning of period $12.47 $13.03 $12.90 $13.01 $12.67 ----------- -------- ------------------- ------- Income From Investment Operations Net investment income (a) .54 .55 .66 .62(b) .57 Net realized and unrealized gain (loss) on investment and foreign currency transactions .40 (.21) .38 (.06) .36 ----------- -------- ------------------- ------- Net increase (decrease) in net asset value from operations .94 .34 1.04 .56 .93 ----------- -------- ------------------- ------- Less: Dividends and Distributions Dividends from net investment income (.73) (.86) (.91) (.67) (.59) Distributions from net realized gain on investment and foreign currency transactions (.11) (.04) -0- -0- -0- ----------- -------- ------------------- ------- Total dividends and distributions (.84) (.90) (.91) (.67) (.59) ----------- -------- ------------------- ------- Net asset value, end of period $12.57 $12.47 $13.03 $12.90 $13.01 =========== ======== =================== ======= Total Return Total investment return based on net asset value (c) 8.10% 3.01% 8.33% 4.67% 7.18% Ratios/Supplemental Data Net assets, end of period (000's omitted) $6,147 $7,129 $13,310 $9,393 $5,698 Ratio to average net assets of: Expenses, net of waivers and (d) reimbursements 2.55% 1.69% 1.53% 1.27% 1.30% Expenses, before waivers and (d) reimbursements 2.55% 1.69% 1.53% 1.37% 1.30% Expenses, before waivers and (d) reimbursements, excluding interest expense 1.45% 1.31% 1.27% 1.24% 1.30% Net investment income 4.44% 4.50%(d) 5.17% 4.88%(b) 4.42% Portfolio turnover rate 8% 43% 75% 69% 73% -----------------------------------------------------------------------------------------------------------------------------------
Global Dollar ------------- Class A Year Ended December 31, ------------------------------------------------------- 2007 2006 2005 2004(e) 2003 --------- --------- --------- --------- --------- Net asset value, beginning of period $14.22 $14.42 $14.79 $14.53 $11.43 --------- --------- --------- --------- --------- Income From Investment Operations Net investment income (a) .72 .76 .84 .86(b) .95 Net realized and unrealized gain (loss) on investment transactions (.11) .53 .46 .45 2.83 --------- --------- --------- --------- --------- Net increase in net asset value from operations .61 1.29 1.30 1.31 3.78 --------- --------- --------- --------- --------- Less: Dividends and Distributions Dividends from net investment income (.85) (.83) (.95) (1.05) (.68) Distributions from net realized gain on investment transactions (.55) (.66) (.72) -0- -0- --------- --------- --------- --------- --------- Total dividends and distributions (1.40) (1.49) (1.67) (1.05) (.68) --------- --------- --------- --------- --------- Net asset value, end of period $13.43 $14.22 $14.42 $14.79 $14.53 ========= ========= ========= ========= ========= Total Return Total investment return based on net asset value (c) 4.53% 10.01% 9.62% 10.12% 33.41% Ratios/Supplemental Data Net assets, end of period (000's omitted) $19,664 $23,279 $23,073 $22,932 $26,433 Ratio to average net assets of: Expenses, net of waivers and reimbursements 1.56% 1.76%(d) 1.69% 1.76% 1.90% Expenses, before waivers and reimbursements 1.56% 1.76%(d) 1.69% 1.93% 1.90% Expenses, before waivers and reimbursements (d) excluding interest expense 1.52% 1.69% 1.68% 1.92% 1.88% Net investment income 5.23% 5.41%(d) 5.83% 6.07%(b) 7.20% Portfolio turnover rate 40% 50% 91% 188% 150% -----------------------------------------------------------------------------------------------------------------------------------
Global Dollar ------------- Class B Year Ended December 31, ------------------------------------------------------------ 2007 2006 2005 2004(e) 2003 ------------- ------- -------- ------- ------- Net asset value, beginning of period $14.16 $14.36 $14.74 $14.51 $11.42 ------------- ------- -------- ------- ------- Income From Investment Operations Net investment income (a) .68 .72 .80 .82(b) .88 Net realized and unrealized gain (loss) on investment transactions (.11) .54 .46 .45 2.89 ------------- ------- -------- ------- ------- Net increase in net asset value from operations .57 1.26 1.26 1.27 3.77 ------------- ------- -------- ------- ------- Less: Dividends and Distributions Dividends from net investment income (.81) (.80) (.92) (1.04) (.68) Distributions from net realized gain on investment transactions (.55) (.66) (.72) -0- -0- ------------- ------- -------- ------- ------- Total dividends and distributions (1.36) (1.46) (1.64) (1.04) (.68) ------------- ------- -------- ------- ------- Net asset value, end of period $13.37 $14.16 $14.36 $14.74 $14.51 ============= ======= ======== ======= ======= Total Return Total investment return based on net asset value (c) 4.27% 9.77% 9.35% 9.81% 33.34% Ratios/Supplemental Data Net assets, end of period (000's omitted) $5,114 $5,756 $5,382 $4,979 $3,162 Ratio to average net assets of: Expenses, net of waivers and (d) reimbursements 1.80% 2.01% 1.93% 2.07% 2.14% Expenses, before waivers and (d) reimbursements 1.80% 2.01% 1.93% 2.24% 2.14% Expenses, before waivers and (d) reimbursements excluding interest expense 1.77% 1.94% 1.93% 2.23% 2.12% Net investment income 4.98% 5.16%(d) 5.60% 5.74%(b) 6.67% Portfolio turnover rate 40% 50% 91% 188% 150% -----------------------------------------------------------------------------------------------------------------------------------
High Grade ---------- Class A Year Ended December 31, ------------------------------------------------------- 2007 2006 2005 2004 2003 --------- --------- --------- ---------- ---------- Net asset value, beginning of period $11.78 $11.82 $12.28 $12.56 $12.54 Income From Investment Operations Net investment income (a) .54 .50 .41 .32(b) .26 Net realized and unrealized gain (loss) on investment transactions .01 (.06) (.17) .12 .23 --------- --------- --------- ---------- ---------- Net increase in net asset value from operations .55 .44 .24 .44 .49 --------- --------- --------- ---------- ---------- Less: Dividends and Distributions Dividends from net investment income (.55) (.48) (.36) (.36) (.37) Distributions from net realized gain on investment transactions -0- -0- (.34) (.36) (.10) --------- --------- --------- ---------- ---------- Total dividends and distributions (.55) (.48) (.70) (.72) (.47) --------- --------- --------- ---------- ---------- Net asset value, end of period $11.78 $11.78 $11.82 $12.28 $12.56 ========= ========= ========= ========== ========== Total Return Total investment return based on net asset value (c) 4.85% 3.93% 1.98% 3.77% 3.88% Ratios/Supplemental Data Net assets, end of period (000's omitted) $66,305 $71,655 $83,329 $102,543 $129,194 Ratio to average net assets of: Expenses, net of waivers and reimbursements .78% .77%(d) .71% .68% .77% Expenses, before waivers and reimbursements .78% .77%(d) .71% .78% .77% Net investment income 4.58% 4.25%(d) 3.37% 2.46%(b) 2.10% Portfolio turnover rate 90% 327% 529% 662% 748% -----------------------------------------------------------------------------------------------------------------------------------
See footnotes on pages 76-77.
High Grade ---------- Class B Year Ended December 31, ------------------------------------------------------- 2007 2006 2005 2004 2003 --------- --------- --------- --------- --------- Net asset value, beginning of period $11.67 $11.72 $12.18 $12.47 $12.47 --------- --------- --------- --------- --------- Income From Investment Operations Net investment income (a) .50 .46 .38 .28(b) .24 Net realized and unrealized gain (loss) on investment transactions .02 (.06) (.17) .13 .21 --------- --------- --------- --------- --------- Net increase in net asset value from operations .52 .40 .21 .41 .45 --------- --------- --------- --------- --------- Less: Dividends and Distributions Dividends from net investment income (.52) (.45) (.33) (.34) (.35) Distributions from net realized gain on investment transactions -0- -0- (.34) (.36) (.10) --------- --------- --------- --------- --------- Total dividends and distributions (.52) (.45) (.67) (.70) (.45) --------- --------- --------- --------- --------- Net asset value, end of period $11.67 $11.67 $11.72 $12.18 $12.47 ========= ========= ========= ========= ========= Total Return Total investment return based on net asset value (c) 4.60% 3.59% 1.75% 3.52% 3.61% Ratios/Supplemental Data Net assets, end of period (000's omitted) $20,289 $22,340 $24,716 $25,744 $21,982 Ratio to average net assets of: Expenses, net of waivers and reimbursements 1.03% 1.02%(d) .96% .93% 1.03% Expenses, before waivers and reimbursements 1.03% 1.02%(d) .96% 1.03% 1.03% Net investment income 4.32% 4.01%(d) 3.14% 2.19%(b) 1.89% Portfolio turnover rate 90% 327% 529% 662% 748% -----------------------------------------------------------------------------------------------------------------------------------
(a) Based on average shares outstanding. (b) Net of expenses waived or reimbursed by the Adviser. (c) Total investment return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption on the last day of the period. Total return does not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares. Total investment return calculated for a period of less than one year is not annualized. (d) The ratio includes expenses attributable to costs of proxy solicitation. (e) As of January 1, 2004, the Portfolio has adopted the method of accounting for interim payments on swap contracts in accordance with Financial Accounting Standards Board Statement No. 133. These interim payments are reflected within net realized and unrealized gain (loss) on swap contracts, however, prior to January 1, 2004, these interim payments were reflected within interest income/expense on the statement of operations. The effect of this change for the year ended December 31, 2004, was to decrease net investment income per share by $.02 and increase net realized and unrealized gain (loss) on investment transactions per share by $.02 for Class A and B. Consequently, the ratios of net investment income to average net assets were decreased by .17% for Class A and B respectively. (1) Policies with the notation "F" are fundamental policies. ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND, INC. -------------------------------------------------------------------------------- - ALLIANCEBERNSTEIN U.S. GOVERNMENT/HIGH GRADE SECURITIES PORTFOLIO -------------------------------------------------------------------------------- 1345 Avenue of the Americas -------------------------------------------------------------------------------- New York, New York Toll Free (800) 221-5672 STATEMENT OF ADDITIONAL INFORMATION February [__], 2008 This Statement of Additional Information (the "SAI") relates to the acquisitions (the "Acquisitions") of all of the assets and liabilities of AllianceBernstein High Yield Portfolio ("High Yield"), AllianceBernstein Global Bond Portfolio ("Global Bond"), AllianceBernstein Americas Government Income Portfolio ("AGI") and AllianceBernstein Global Dollar Government Portfolio "(Global Dollar"), each a series of AllianceBernstein Variable Products Series Fund, Inc., by AllianceBernstein U.S. Government/High Grade Securities Portfolio ("High Grade"), another series of AllianceBernstein Variable Products Series Fund, Inc. (High Yield, Global Bond, AGI and Global Dollar are each an "Acquired Portfolio" and collectively, the "Acquired Portfolios." High Grade and the Acquired Portfolios are each a "Portfolio" and collectively, the "Portfolios.") This SAI contains information which may be of interest to shareholders but which is not included in the Prospectus dated February [__], 2008 (the "Prospectus") of High Grade which relates to the Acquisitions. As described in the Prospectus, the Acquisitions would involve the transfer of all the assets of the Acquired Portfolios in exchange for shares of High Grade and the assumption by High Grade of all the liabilities of the Acquired Portfolios. The Acquired Portfolios would distribute the High Grade shares they receive to their shareholders in complete liquidation of the Acquired Portfolios. High Grade will be the survivor for accounting purposes. This SAI is not a prospectus and should be read in conjunction with the Prospectus. The Prospectus has been filed with the Securities and Exchange Commission (the "SEC") and is available upon request and without charge by writing to an Acquired Portfolio at 1345 Avenue of the Americas, New York, New York 10105, or by calling 1-800-221-5672. -------------------------------------------------------------------------------- TABLE OF CONTENTS Page ADDITIONAL INFORMATION ABOUT THE PORTFOLIOS FINANCIAL STATEMENTS Additional Information about the Portfolios Further information about the Portfolios is contained in their Statements of Additional Information each dated May 1, 2007, which are incorporated herein by reference and available upon request and without charge by writing to a Portfolio at 1345 Avenue of the Americas, New York, New York 10105, or by calling 1-800-221-5672. Financial Statements The financial statements and Report of Independent Registered Public Accounting Firm contained in the Annual Report for the twelve months ended December 31, 2007, of each of the Portfolios, which report contains historical financial information regarding the Portfolio, has been filed with the SEC and is incorporated herein by reference. The following represents the pro forma financial information. The pro forma financial statements give effect to the Acquisitions of the assets and liabilities of the Acquired Portfolios by High Grade in exchange for shares of High Grade pursuant to the Plans of Acquisition and Liquidation. High Grade's unaudited pro forma Portfolio of Investments, Statement of Assets and Liabilities and Statement of Operations are prepared as though the Acquisitions were effective for the period October 1, 2006 - September 30, 2007. PRO FORMA ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND, INC. FINANCIAL STATEMENTS ALLIANCEBERNSTEIN U.S. GOVERNMENT/HIGH GRADE SECURITIES PORTFOLIO ALLIANCEBERNSTEIN HIGH YIELD PORTFOLIO ALLIANCEBERNSTEIN GLOBAL BOND PORTFOLIO ALLIANCEBERNSTEIN AMERICAS GOVERNMENT INCOME PORTFOLIO ALLIANCEBERNSTEIN GLOBAL DOLLAR GOVERNMENT PORTFOLIO September 30, 2007 (unaudited) PRO FORMA PORTFOLIO OF INVESTMENTS ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND U.S. GOVERNMENT/HIGH GRADE SECURITIES PORTFOLIO September 30, 2007 (unaudited) AllianceBernstein Variable Products Series Fund U.S. Government/High Grade Securities Portfolio AllianceBernstein Variable Products Series Fund Global Dollar Government Portfolio AllianceBernstein Variable Products Series Fund High Yield Portfolio AllianceBernstein Variable Products Series Fund Americas Government Income Portfolio AllianceBernstein Variable Products Series Fund Global Bond Portfolio
AllianceBernstein AllianceBernstein Variable Variable Products AllianceBernstein Products Series Fund U.S. Variable Products Series Fund AllianceBernstein Government/High Series Fund Global Dollar Variable Products Grade Securities U.S. Government/High Government Series Fund Portfolio Grade Securities Portfolio Global Dollar Principal Portfolio Principal Government Portfolio Amount (000) (U.S. $ Value) Amount (000) (U.S. $ Value) ---------------------------------------- ---------------------------------------- MORTGAGE PASS-THRU'S - 17.5% FIXED RATE 30-YEAR - 12.9% Federal Gold Loan Mortgage Corp. Series 2005 4.50%, 8/01/35 - 11/01/35 US$ 1,339 $ 1,244,039 US$ -0- $ -0- Series 2007 6.00%, 8/01/37 1,583 1,584,984 -0- -0- 7.00%, 2/01/37 1,077 1,111,629 -0- -0- Federal National Mortgage Association 4.50%, 9/01/37 745 693,083 -0- -0- Series 2002 7.00%, 3/01/32 (a) -0- -0- -0- -0- Series 2003 5.50%, 3/01/33 - 7/01/33 3,574 3,510,922 -0- -0- Series 2004 5.50%, 4/01/34 - 11/01/34 1,148 1,127,414 -0- -0- 6.00%, 9/01/34 718 720,573 -0- -0- Series 2005 4.50%, 8/01/35 1,030 956,470 -0- -0- 5.50%, 2/01/35 - 7/01/35 2,728 2,678,280 -0- -0- Series 2006 5.00%, 2/01/36 2,430 2,321,981 -0- -0- 5.50%, 1/01/36 - 11/01/36 5,277 5,174,549 -0- -0- 6.50%, 9/01/36 813 828,148 -0- -0- Series 2007 4.50%, 8/01/37 459 426,205 -0- -0- 5.50%, 5/01/36 1,098 1,076,440 -0- -0- 6.00%, 7/01/37 - 8/01/37 504 504,359 -0- -0- 6.50%, 6/01/37 839 854,065 -0- -0- Government National Mortgage Association Series 1994 9.00%, 9/15/24 (a) -0- -0- -0- -0- Series 2006 6.00%, 7/15/36 (a) -0- -0- -0- -0- ------------- ------------- 24,813,141 -0- ------------- ------------- FIXED RATE 15-YEAR - 1.7% Federal Gold Loan Mortgage Corp. Series 2006 5.00%, 4/01/21 997 977,853 -0- -0- Federal National Mortgage Association Series 2005 5.00%, 4/01/19 1,666 1,638,842 -0- -0- Series 2006 5.00%, 4/01/21 1,383 1,355,723 -0- -0- ------------- ------------- 3,972,418 -0- ------------- ------------- AGENCY ARMS - 1.6% Federal Home Loan Mortgage Corp. Series 2007 6.05%, 4/01/37 (b) 443 447,718 -0- -0- 6.102%, 1/01/37 (b) 270 274,343 -0- -0- Federal National Mortgage Association 6.034%, 11/01/36 (b) 157 158,602 -0- -0- 6.107%, 3/01/37 (b) 445 452,758 -0- -0- Series 2005 4.382%, 9/01/35 (b) 323 324,976 -0- -0- Series 2006 5.807%, 3/01/36 (b) 468 473,567 -0- -0- 5.852%, 11/01/36 (b) 712 721,033 -0- -0- Series 2007 5.775%, 1/01/37 (b) 508 513,820 -0- -0- 6.051%, 2/01/37 (b) 435 440,770 -0- -0- ------------- ------------- 3,807,587 -0- ------------- ------------- NON-AGENCY ARMS - 1.3% Banc of America Funding Corp. Series 2007-C, Class 1A3 5.761%, 5/20/36 (b) 417 415,103 -0- -0- Bear Stearns Alt-A Trust Series 2006-3, Class 22A1 6.222%, 5/25/36 (c) 185 186,343 -0- -0- Series 2007-1, Class 21A1 5.733%, 1/25/47 (c) 261 260,949 -0- -0- Citigroup Mortgage Loan Trust, Inc. Series 2005-2, Class 1A4 5.105%, 5/25/35 (c) 477 468,140 -0- -0- Series 2006-AR1, Class 3A1 5.50%, 3/25/36 (b) 569 563,565 -0- -0- Indymac Index Mortgage Loan Trust Series 2006-AR7, Class 4A1 6.234%, 5/25/36 (c) 247 248,531 -0- -0- JPMorgan Alternative Loan Trust Series 2006-A3, Class 2A1 6.066%, 7/25/36 (c) 495 496,948 -0- -0- Residential Funding Mortgage Securities, Inc. Series 2005-SA3, Class 3A 5.237%, 8/25/35 (c) 316 309,099 -0- -0- ------------- ------------- 2,948,678 -0- ------------- ------------- TOTAL MORTGAGE PASS-THRU'S (cost $40,376,461) 35,541,824 -0- ------------- ------------- GOVERNMENT-RELATED - NON-U.S. ISSUERS - 14.6% SOVEREIGNS - 14.6% ARGENTINA-0.4% Republic of Argentina 5.389%, 8/03/12 (b) -0- -0- 547 490,863 8.28%, 12/31/33 -0- -0- 431 390,864 Series V 7.00%, 3/28/11 -0- -0- 95 89,350 ------------- ------------- -0- 971,077 ------------- ------------- BRAZIL-1.8% Republic of Brazil 6.00%, 1/17/17 -0- -0- 729 734,468 7.125%, 1/20/37 -0- -0- 1,152 1,287,360 8.25%, 1/20/34 -0- -0- 591 744,364 8.875%, 10/14/19-4/15/24 -0- -0- 832 1,048,380 11.00%, 8/17/40 -0- -0- 141 188,587 ------------- ------------- -0- 4,003,159 ------------- ------------- BULGARIA-0.0% Republic of Bulgaria Series REGS 8.25%, 1/15/15 (d) -0- -0- 94 109,745 ------------- ------------- CANADA-0.7% Government of Canada Series VW17 8.00%, 6/01/27 (a) CAD -0- -0- CAD -0- -0- ------------- -------------
AllianceBernstein AllianceBernstein AllianceBernstein Variable Products AllianceBernstein Variable Products Variable Products Series Fund Variable Products Series Fund Series Fund High Yield Series Fund Americas Government Americas Portfolio High Yield Income Portfolio Government Principal Portfolio Principal Income Portfolio Amount (000) (U.S. $ Value) Amount (000) (U.S. $ Value) ---------------------------------------- ---------------------------------------- MORTGAGE PASS-THRU'S - 17.5% FIXED RATE 30-YEAR - 12.9% Federal Gold Loan Mortgage Corp. Series 2005 4.50%, 8/01/35 - 11/01/35 US$ -0- $ -0- US$ -0- $ -0- Series 2007 6.00%, 8/01/37 -0- -0- -0- -0- 7.00%, 2/01/37 -0- -0- -0- -0- Federal National Mortgage Association 4.50%, 9/01/37 -0- -0- -0- -0- Series 2002 7.00%, 3/01/32 (a) -0- -0- 54 55,933 Series 2003 5.50%, 3/01/33 - 7/01/33 -0- -0- -0- -0- Series 2004 5.50%, 4/01/34 - 11/01/34 -0- -0- -0- -0- 6.00%, 9/01/34 -0- -0- -0- -0- Series 2005 4.50%, 8/01/35 -0- -0- -0- -0- 5.50%, 2/01/35 - 7/01/35 -0- -0- -0- -0- Series 2006 5.00%, 2/01/36 -0- -0- -0- -0- 5.50%, 1/01/36 - 11/01/36 -0- -0- -0- -0- 6.50%, 9/01/36 -0- -0- -0- -0- Series 2007 4.50%, 8/01/37 -0- -0- -0- -0- 5.50%, 5/01/36 -0- -0- -0- -0- 6.00%, 7/01/37 - 8/01/37 -0- -0- -0- -0- 6.50%, 6/01/37 -0- -0- -0- -0- Government National Mortgage Association Series 1994 9.00%, 9/15/24 (a) -0- -0- 7 7,664 Series 2006 6.00%, 7/15/36 (a) -0- -0- 4,591 4,620,747 ------------- ------------- -0- 4,684,344 ------------- ------------- FIXED RATE 15-YEAR - 1.7% Federal Gold Loan Mortgage Corp. Series 2006 5.00%, 4/01/21 -0- -0- -0- -0- Federal National Mortgage Association Series 2005 5.00%, 4/01/19 -0- -0- -0- -0- Series 2006 5.00%, 4/01/21 -0- -0- -0- -0- ------------- ------------- -0- -0- ------------- ------------- AGENCY ARMS - 1.6% Federal Home Loan Mortgage Corp. Series 2007 6.05%, 4/01/37 (b) -0- -0- -0- -0- 6.102%, 1/01/37 (b) -0- -0- -0- -0- Federal National Mortgage Association 6.034%, 11/01/36 (b) -0- -0- -0- -0- 6.107%, 3/01/37 (b) -0- -0- -0- -0- Series 2005 4.382%, 9/01/35 (b) -0- -0- -0- -0- Series 2006 5.807%, 3/01/36 (b) -0- -0- -0- -0- 5.852%, 11/01/36 (b) -0- -0- -0- -0- Series 2007 5.775%, 1/01/37 (b) -0- -0- -0- -0- 6.051%, 2/01/37 (b) -0- -0- -0- -0- ------------- ------------- -0- -0- ------------- ------------- NON-AGENCY ARMS - 1.3% Banc of America Funding Corp. Series 2007-C, Class 1A3 5.761%, 5/20/36 (b) -0- -0- -0- -0- Bear Stearns Alt-A Trust Series 2006-3, Class 22A1 6.222%, 5/25/36 (c) -0- -0- -0- -0- Series 2007-1, Class 21A1 5.733%, 1/25/47 (c) -0- -0- -0- -0- Citigroup Mortgage Loan Trust, Inc. Series 2005-2, Class 1A4 5.105%, 5/25/35 (c) -0- -0- -0- -0- Series 2006-AR1, Class 3A1 5.50%, 3/25/36 (b) -0- -0- -0- -0- Indymac Index Mortgage Loan Trust Series 2006-AR7, Class 4A1 6.234%, 5/25/36 (c) -0- -0- -0- -0- JPMorgan Alternative Loan Trust Series 2006-A3, Class 2A1 6.066%, 7/25/36 (c) -0- -0- -0- -0- Residential Funding Mortgage Securities, Inc. Series 2005-SA3, Class 3A 5.237%, 8/25/35 (c) -0- -0- -0- -0- ------------- ------------- -0- -0- ------------- ------------- TOTAL MORTGAGE PASS-THRU'S (cost $40,376,461) -0- 4,684,344 ------------- ------------- GOVERNMENT-RELATED - NON-U.S. ISSUERS - 14.6% SOVEREIGNS - 14.6% ARGENTINA-0.4% Republic of Argentina 5.389%, 8/03/12 (b) -0- -0- -0- -0- 8.28%, 12/31/33 -0- -0- -0- -0- Series V 7.00%, 3/28/11 -0- -0- -0- -0- ------------- ------------- -0- -0- ------------- ------------- BRAZIL-1.8% Republic of Brazil 6.00%, 1/17/17 -0- -0- -0- -0- 7.125%, 1/20/37 -0- -0- -0- -0- 8.25%, 1/20/34 -0- -0- -0- -0- 8.875%, 10/14/19-4/15/24 -0- -0- -0- -0- 11.00%, 8/17/40 -0- -0- -0- -0- ------------- ------------- -0- -0- ------------- ------------- BULGARIA-0.0% Republic of Bulgaria Series REGS 8.25%, 1/15/15 (d) -0- -0- -0- -0- ------------- ------------- CANADA-0.7% Government of Canada Series VW17 8.00%, 6/01/27 (a) CAD -0- -0- CAD 1,132 1,657,911 ------------- -------------
Pro Forma Pro Forma AllianceBernstein AllianceBernstein AllianceBernstein Variable Products AllianceBernstein Variable Products Variable Products Series Fund Variable Products Series Fund U.S. Series Fund U.S. Global Bond Series Fund Government/High Government/High Portfolio Global Bond Grade Securities Grade Securities Principal Portfolio Portfolio Principal Portfolio Amount (000) (U.S. $ Value) Amount (000) (U.S. $ Value) ---------------------------------------- ---------------------------------------- MORTGAGE PASS-THRU'S - 17.5% FIXED RATE 30-YEAR - 12.9% Federal Gold Loan Mortgage Corp. Series 2005 4.50%, 8/01/35 - 11/01/35 US$ -0- $ -0- US$ 1,339 $ 1,244,039 Series 2007 6.00%, 8/01/37 -0- -0- 1,583 1,584,984 7.00%, 2/01/37 -0- -0- 1,077 1,111,629 Federal National Mortgage Association 4.50%, 9/01/37 -0- -0- 745 693,083 Series 2002 7.00%, 3/01/32 (a) -0- -0- 54 55,933 Series 2003 5.50%, 3/01/33 - 7/01/33 -0- -0- 3,574 3,510,922 Series 2004 5.50%, 4/01/34 - 11/01/34 -0- -0- 1,148 1,127,414 6.00%, 9/01/34 -0- -0- 718 720,573 Series 2005 4.50%, 8/01/35 -0- -0- 1,030 956,470 5.50%, 2/01/35 - 7/01/35 -0- -0- 2,728 2,678,280 Series 2006 5.00%, 2/01/36 -0- -0- 2,430 2,321,981 5.50%, 1/01/36 - 11/01/36 -0- -0- 5,277 5,174,549 6.50%, 9/01/36 -0- -0- 813 828,148 Series 2007 4.50%, 8/01/37 -0- -0- 459 426,205 5.50%, 5/01/36 -0- -0- 1,098 1,076,440 6.00%, 7/01/37 - 8/01/37 -0- -0- 504 504,359 6.50%, 6/01/37 -0- -0- 839 854,065 Government National Mortgage Association Series 1994 9.00%, 9/15/24 (a) -0- -0- 7 7,664 Series 2006 6.00%, 7/15/36 (a) -0- -0- 4,591 4,620,747 ------------- ------------- -0- 29,497,485 ------------- ------------- FIXED RATE 15-YEAR - 1.7% Federal Gold Loan Mortgage Corp. Series 2006 5.00%, 4/01/21 -0- -0- 997 977,853 Federal National Mortgage Association Series 2005 5.00%, 4/01/19 -0- -0- 1,666 1,638,842 Series 2006 5.00%, 4/01/21 -0- -0- 1,383 1,355,723 ------------- ------------- -0- 3,972,418 ------------- ------------- AGENCY ARMS - 1.6% Federal Home Loan Mortgage Corp. Series 2007 6.05%, 4/01/37 (b) -0- -0- 443 447,718 6.102%, 1/01/37 (b) -0- -0- 270 274,343 Federal National Mortgage Association 6.034%, 11/01/36 (b) -0- -0- 157 158,602 6.107%, 3/01/37 (b) -0- -0- 445 452,758 Series 2005 4.382%, 9/01/35 (b) -0- -0- 323 324,976 Series 2006 5.807%, 3/01/36 (b) -0- -0- 468 473,567 5.852%, 11/01/36 (b) -0- -0- 712 721,033 Series 2007 5.775%, 1/01/37 (b) -0- -0- 508 513,820 6.051%, 2/01/37 (b) -0- -0- 435 440,770 ------------- ------------- -0- 3,807,587 ------------- ------------- NON-AGENCY ARMS - 1.3% Banc of America Funding Corp. Series 2007-C, Class 1A3 5.761%, 5/20/36 (b) -0- -0- 417 415,103 Bear Stearns Alt-A Trust Series 2006-3, Class 22A1 6.222%, 5/25/36 (c) -0- -0- 185 186,343 Series 2007-1, Class 21A1 5.733%, 1/25/47 (c) -0- -0- 261 260,949 Citigroup Mortgage Loan Trust, Inc. Series 2005-2, Class 1A4 5.105%, 5/25/35 (c) -0- -0- 477 468,140 Series 2006-AR1, Class 3A1 5.50%, 3/25/36 (b) -0- -0- 569 563,565 Indymac Index Mortgage Loan Trust Series 2006-AR7, Class 4A1 6.234%, 5/25/36 (c) -0- -0- 247 248,531 JPMorgan Alternative Loan Trust Series 2006-A3, Class 2A1 6.066%, 7/25/36 (c) -0- -0- 495 496,948 Residential Funding Mortgage Securities, Inc. Series 2005-SA3, Class 3A 5.237%, 8/25/35 (c) -0- -0- 316 309,099 ------------- ------------- -0- 2,948,678 ------------- ------------- TOTAL MORTGAGE PASS-THRU'S (cost $40,376,461) -0- 40,226,168 ------------- ------------- GOVERNMENT-RELATED - NON-U.S. ISSUERS - 14.6% SOVEREIGNS - 14.6% ARGENTINA-0.4% Republic of Argentina 5.389%, 8/03/12 (b) -0- -0- 547 490,863 8.28%, 12/31/33 -0- -0- 431 390,864 Series V 7.00%, 3/28/11 -0- -0- 95 89,350 ------------- ------------- -0- 971,077 ------------- ------------- BRAZIL-1.8% Republic of Brazil 6.00%, 1/17/17 -0- -0- 729 734,468 7.125%, 1/20/37 -0- -0- 1,152 1,287,360 8.25%, 1/20/34 -0- -0- 591 744,364 8.875%, 10/14/19-4/15/24 -0- -0- 832 1,048,380 11.00%, 8/17/40 -0- -0- 141 188,587 ------------- ------------- -0- 4,003,159 ------------- ------------- BULGARIA-0.0% Republic of Bulgaria Series REGS 8.25%, 1/15/15 (d) -0- -0- 94 109,745 ------------- ------------- CANADA-0.7% Government of Canada Series VW17 8.00%, 6/01/27 (a) CAD -0- -0- CAD 1,132 1,657,911 ------------- -------------
AllianceBernstein AllianceBernstein Variable Variable Products AllianceBernstein Products Series Fund U.S. Variable Products Series Fund AllianceBernstein Government/High Series Fund Global Dollar Variable Products Grade Securities U.S. Government/High Government Series Fund Portfolio Grade Securities Portfolio Global Dollar Principal Portfolio Principal Government Portfolio Amount (000) (U.S. $ Value) Amount (000) (U.S. $ Value) ---------------------------------------- ---------------------------------------- COLOMBIA-0.2% Republic of Colombia 7.375%, 9/18/37 US$ -0- $ -0- US$ 245 $ 269,132 10.75%, 1/15/13 -0- -0- 88 107,360 11.75%, 2/25/20 -0- -0- 94 137,710 ------------- ------------- -0- 514,202 ------------- ------------- COSTA RICA-0.1% Republic of Costa Rica 8.05%, 1/31/13 (d) -0- -0- 53 57,770 Series REGS 8.11%, 2/01/12 (d) -0- -0- 51 55,335 ------------- ------------- 0 113,105 ------------- ------------- DOMINICAN REPUBLIC-0.1% Dominican Republic 8.625%, 4/20/27 (d) -0- -0- 100 112,500 ------------- ------------- ECUADOR-0.1% Republic of Ecuador 10.00%, 8/15/30 (d)(e) -0- -0- 272 251,600 ------------- ------------- EL SALVADOR-0.1% Republic of El Salvador 7.625%, 9/21/34 (d) -0- -0- 72 81,360 7.65%, 6/15/35 (d) -0- -0- 112 125,440 8.50%, 7/25/11 (d) -0- -0- 100 109,400 ------------- ------------- -0- 316,200 ------------- ------------- INDONESIA-0.3% Republic of Indonesia 6.625%, 2/17/37 (d) -0- -0- 100 95,625 6.75%, 3/10/14 (d) -0- -0- 260 268,190 7.25%, 4/20/15 (d) -0- -0- 59 62,540 7.50%, 1/15/16 (d) -0- -0- 100 107,650 8.50%, 10/12/35 (d) -0- -0- 222 261,960 ------------- ------------- -0- 795,965 ------------- ------------- JAMAICA-0.1% Government of Jamaica 10.625%, 6/20/17 -0- -0- 95 113,192 ------------- ------------- LEBANON-0.1% Lebanese Republic 11.625%, 5/11/16 (d) -0- -0- 33 36,630 Series REGS 7.875%, 5/20/11 (d) -0- -0- 75 71,625 10.125%, 8/06/08 (d) -0- -0- 207 208,035 ------------- ------------- -0- 316,290 ------------- ------------- MALAYSIA-0.3% Malaysia 7.50%, 7/15/11 -0- -0- 303 328,383 8.75%, 6/01/09 -0- -0- 230 243,559 ------------- ------------- -0- 571,942 ------------- ------------- MEXICO-4.4% Mexican Bonos Series M 20 8.00%, 12/07/23 (a) MXN -0- -0- MXN -0- -0- 10.00%, 12/05/24 (a) -0- -0- -0- -0- Series M7 8.00%, 12/24/08 (a) -0- -0- -0- -0- United Mexican States 5.625%, 1/15/17 US$ 1,490 1,485,530 US$ -0- -0- 7.50%, 1/14/12 425 464,525 -0- -0- 8.125%, 12/30/19 -0- -0- 375 456,188 11.375%, 9/15/16 -0- -0- 364 514,150 Series A 8.00%, 9/24/22 -0- -0- 833 1,011,262 ------------- ------------- 1,950,055 1,981,600 ------------- ------------- PAKISTAN-0.1% Republic of Pakistan 6.875%, 6/01/17 (d) -0- 146 128,480 ------------- ------------- PANAMA-0.5% Republic of Panama 6.70%, 1/26/36 -0- -0- 299 306,924 7.125%, 1/29/26 -0- -0- 173 186,840 8.875%, 9/30/27 -0- -0- 97 123,675 9.375%, 7/23/12-4/01/29 -0- -0- 473 606,593 ------------- ------------- -0- 1,224,032 ------------- ------------- PERU-0.5% Republic of Peru 7.35%, 7/21/25 -0- -0- 317 362,173 8.375%, 5/03/16 -0- -0- 284 332,990 8.75%, 11/21/33 -0- -0- 393 516,402 ------------- ------------- -0- 1,211,565 ------------- ------------- PHILIPPINES-0.9% Republic of Philippines 7.50%, 9/25/24 -0- -0- 105 115,369 7.75%, 1/14/31 -0- -0- 162 179,415 8.25%, 1/15/14 -0- -0- 426 476,055 8.875%, 3/17/15 -0- -0- 246 285,975 9.00%, 2/15/13 -0- -0- 177 201,780 9.50%, 2/02/30 -0- -0- 137 178,785 9.875%, 1/15/19 -0- -0- 237 301,582 10.625%, 3/16/25 -0- -0- 280 392,700 ------------- ------------- -0- 2,131,661 ------------- ------------- RUSSIA-2.0% Russian Federation 7.50%, 3/31/30 (d)(e) 1,292 1,443,754 1,168 1,305,463 Series REGS 11.00%, 7/24/18 (d) -0- -0- 240 337,560 Russian Ministry of Finance Series V 3.00%, 5/14/08 -0- -0- 1,405 1,378,727 Series VII 3.00%, 5/14/11 -0- -0- 160 146,000 ------------- ------------- 1,443,754 3,167,750 ------------- ------------- SOUTH AFRICA-0.3% Republic of South Africa 5.875%, 5/30/22 455 447,606 100 98,375 7.375%, 4/25/12 -0- -0- 142 153,360 ------------- ------------- 447,606 251,735 ------------- ------------- TURKEY-0.6% Republic of Turkey 6.875%, 3/17/36 -0- -0- 577 551,035 7.00%, 6/05/20 -0- -0- 450 452,273 7.375%, 2/05/25 -0- -0- 256 265,280 8.00%, 2/14/34 -0- -0- 30 32,512 ------------- ------------- -0- 1,301,100 ------------- -------------
AllianceBernstein AllianceBernstein AllianceBernstein Variable Products AllianceBernstein Variable Products Variable Products Series Fund Variable Products Series Fund Series Fund High Yield Series Fund Americas Government Americas Portfolio High Yield Income Portfolio Government Principal Portfolio Principal Income Portfolio Amount (000) (U.S. $ Value) Amount (000) (U.S. $ Value) ---------------------------------------- ---------------------------------------- COLOMBIA-0.2% Republic of Colombia 7.375%, 9/18/37 US$ -0- $ -0- US$ -0- $ -0- 10.75%, 1/15/13 -0- -0- -0- -0- 11.75%, 2/25/20 -0- -0- -0- -0- ------------- ------------- -0- -0- ------------- ------------- COSTA RICA-0.1% Republic of Costa Rica 8.05%, 1/31/13 (d) -0- -0- -0- -0- Series REGS 8.11%, 2/01/12 (d) -0- -0- -0- -0- ------------- ------------- -0- -0- ------------- ------------- DOMINICAN REPUBLIC-0.1% Dominican Republic 8.625%, 4/20/27 (d) -0- -0- -0- -0- ------------- ------------- ECUADOR-0.1% Republic of Ecuador 10.00%, 8/15/30 (d)(e) -0- -0- -0- -0- ------------- ------------- EL SALVADOR-0.1% Republic of El Salvador 7.625%, 9/21/34 (d) -0- -0- -0- -0- 7.65%, 6/15/35 (d) -0- -0- -0- -0- 8.50%, 7/25/11 (d) -0- -0- -0- -0- ------------- ------------- -0- -0- ------------- ------------- INDONESIA-0.3% Republic of Indonesia 6.625%, 2/17/37 (d) -0- -0- -0- -0- 6.75%, 3/10/14 (d) -0- -0- -0- -0- 7.25%, 4/20/15 (d) -0- -0- -0- -0- 7.50%, 1/15/16 (d) -0- -0- -0- -0- 8.50%, 10/12/35 (d) -0- -0- -0- -0- ------------- ------------- -0- -0- ------------- ------------- JAMAICA-0.1% Government of Jamaica 10.625%, 6/20/17 -0- -0- -0- -0- ------------- ------------- LEBANON-0.1% Lebanese Republic 11.625%, 5/11/16 (d) -0- -0- -0- -0- Series REGS 7.875%, 5/20/11 (d) -0- -0- -0- -0- 10.125%, 8/06/08 (d) -0- -0- -0- -0- ------------- ------------- -0- -0- ------------- ------------- MALAYSIA-0.3% Malaysia 7.50%, 7/15/11 -0- -0- -0- -0- 8.75%, 6/01/09 -0- -0- -0- -0- ------------- ------------- -0- -0- ------------- ------------- MEXICO-4.4% Mexican Bonos Series M 20 8.00%, 12/07/23 (a) MXN -0- -0- MXN 15,500 1,425,658 10.00%, 12/05/24 (a) -0- -0- 16,205 1,769,856 Series M7 8.00%, 12/24/08 (a) -0- -0- 31,257 2,870,520 United Mexican States 5.625%, 1/15/17 US$ -0- -0- US$ -0- -0- 7.50%, 1/14/12 -0- -0- -0- -0- 8.125%, 12/30/19 -0- -0- -0- -0- 11.375%, 9/15/16 -0- -0- -0- -0- Series A 8.00%, 9/24/22 -0- -0- -0- -0- ------------- ------------- -0- 6,066,034 ------------- ------------- PAKISTAN-0.1% Republic of Pakistan 6.875%, 6/01/17 (d) -0- -0- -0- -0- ------------- ------------- PANAMA-0.5% Republic of Panama 6.70%, 1/26/36 -0- -0- -0- -0- 7.125%, 1/29/26 -0- -0- -0- -0- 8.875%, 9/30/27 -0- -0- -0- -0- 9.375%, 7/23/12-4/01/29 -0- -0- -0- -0- ------------- ------------- -0- -0- ------------- ------------- PERU-0.5% Republic of Peru 7.35%, 7/21/25 -0- -0- -0- -0- 8.375%, 5/03/16 -0- -0- -0- -0- 8.75%, 11/21/33 -0- -0- -0- -0- ------------- ------------- -0- -0- ------------- ------------- PHILIPPINES-0.9% Republic of Philippines 7.50%, 9/25/24 -0- -0- -0- -0- 7.75%, 1/14/31 -0- -0- -0- -0- 8.25%, 1/15/14 -0- -0- -0- -0- 8.875%, 3/17/15 -0- -0- -0- -0- 9.00%, 2/15/13 -0- -0- -0- -0- 9.50%, 2/02/30 -0- -0- -0- -0- 9.875%, 1/15/19 -0- -0- -0- -0- 10.625%, 3/16/25 -0- -0- -0- -0- ------------- ------------- -0- -0- ------------- ------------- RUSSIA-2.0% Russian Federation 7.50%, 3/31/30 (d)(e) -0- -0- -0- -0- Series REGS 11.00%, 7/24/18 (d) -0- -0- -0- -0- Russian Ministry of Finance Series V 3.00%, 5/14/08 -0- -0- -0- -0- Series VII 3.00%, 5/14/11 -0- -0- -0- -0- ------------- ------------- -0- -0- ------------- ------------- SOUTH AFRICA-0.3% Republic of South Africa 5.875%, 5/30/22 -0- -0- -0- -0- 7.375%, 4/25/12 -0- -0- -0- -0- ------------- ------------- -0- -0- ------------- ------------- TURKEY-0.6% Republic of Turkey 6.875%, 3/17/36 -0- -0- -0- -0- 7.00%, 6/05/20 -0- -0- -0- -0- 7.375%, 2/05/25 -0- -0- -0- -0- 8.00%, 2/14/34 -0- -0- -0- -0- ------------- ------------- -0- -0- ------------- -------------
Pro Forma Pro Forma AllianceBernstein AllianceBernstein AllianceBernstein Variable Products AllianceBernstein Variable Products Variable Products Series Fund Variable Products Series Fund U.S. Series Fund U.S. Global Bond Series Fund Government/High Government/High Portfolio Global Bond Grade Securities Grade Securities Principal Portfolio Portfolio Principal Portfolio Amount (000) (U.S. $ Value) Amount (000) (U.S. $ Value) ---------------------------------------- ---------------------------------------- COLOMBIA-0.2% Republic of Colombia 7.375%, 9/18/37 US$ -0- $ -0- US$ 245 $ 269,132 10.75%, 1/15/13 -0- -0- 88 107,360 11.75%, 2/25/20 -0- -0- 94 137,710 ------------- ------------- -0- 514,202 ------------- ------------- COSTA RICA-0.1% Republic of Costa Rica 8.05%, 1/31/13 (d) -0- -0- 53 57,770 Series REGS 8.11%, 2/01/12 (d) -0- -0- 51 55,335 ------------- ------------- -0- 113,105 ------------- ------------- DOMINICAN REPUBLIC-0.1% Dominican Republic 8.625%, 4/20/27 (d) -0- -0- 100 112,500 ------------- ------------- ECUADOR-0.1% Republic of Ecuador 10.00%, 8/15/30 (d)(e) -0- -0- 272 251,600 ------------- ------------- EL SALVADOR-0.1% Republic of El Salvador 7.625%, 9/21/34 (d) -0- -0- 72 81,360 7.65%, 6/15/35 (d) -0- -0- 112 125,440 8.50%, 7/25/11 (d) -0- -0- 100 109,400 ------------- ------------- -0- 316,200 ------------- ------------- INDONESIA-0.3% Republic of Indonesia 6.625%, 2/17/37 (d) -0- -0- 100 95,625 6.75%, 3/10/14 (d) -0- -0- 260 268,190 7.25%, 4/20/15 (d) -0- -0- 59 62,540 7.50%, 1/15/16 (d) -0- -0- 100 107,650 8.50%, 10/12/35 (d) -0- -0- 222 261,960 ------------- ------------- -0- 795,965 ------------- ------------- JAMAICA-0.1% Government of Jamaica 10.625%, 6/20/17 -0- -0- 95 113,192 ------------- ------------- LEBANON-0.1% Lebanese Republic 11.625%, 5/11/16 (d) -0- -0- 33 36,630 Series REGS 7.875%, 5/20/11 (d) -0- -0- 75 71,625 10.125%, 8/06/08 (d) -0- -0- 207 208,035 ------------- ------------- -0- 316,290 ------------- ------------- MALAYSIA-0.3% Malaysia 7.50%, 7/15/11 -0- -0- 303 328,383 8.75%, 6/01/09 -0- -0- 230 243,559 ------------- ------------- -0- 571,942 ------------- ------------- MEXICO-4.4% Mexican Bonos Series M 20 8.00%, 12/07/23 (a) MXN -0- -0- MXN 15,500 1,425,658 10.00%, 12/05/24 (a) -0- -0- 16,205 1,769,856 Series M7 8.00%, 12/24/08 (a) -0- -0- 31,257 2,870,520 United Mexican States 5.625%, 1/15/17 US$ -0- -0- US$ 1,490 1,485,530 7.50%, 1/14/12 -0- -0- 425 464,525 8.125%, 12/30/19 -0- -0- 375 456,188 11.375%, 9/15/16 -0- -0- 364 514,150 Series A 8.00%, 9/24/22 -0- -0- 833 1,011,262 ------------- ------------- -0- 9,997,689 ------------- ------------- PAKISTAN-0.1% Republic of Pakistan 6.875%, 6/01/17 (d) -0- -0- 146 128,480 ------------- ------------- PANAMA-0.5% Republic of Panama 6.70%, 1/26/36 -0- -0- 299 306,924 7.125%, 1/29/26 -0- -0- 173 186,840 8.875%, 9/30/27 -0- -0- 97 123,675 9.375%, 7/23/12-4/01/29 -0- -0- 473 606,593 ------------- ------------- -0- 1,224,032 ------------- ------------- PERU-0.5% Republic of Peru 7.35%, 7/21/25 -0- -0- 317 362,173 8.375%, 5/03/16 -0- -0- 284 332,990 8.75%, 11/21/33 -0- -0- 393 516,402 ------------- ------------- -0- 1,211,565 ------------- ------------- PHILIPPINES-0.9% Republic of Philippines 7.50%, 9/25/24 -0- -0- 105 115,369 7.75%, 1/14/31 -0- -0- 162 179,415 8.25%, 1/15/14 -0- -0- 426 476,055 8.875%, 3/17/15 -0- -0- 246 285,975 9.00%, 2/15/13 -0- -0- 177 201,780 9.50%, 2/02/30 -0- -0- 137 178,785 9.875%, 1/15/19 -0- -0- 237 301,582 10.625%, 3/16/25 -0- -0- 280 392,700 ------------- ------------- -0- 2,131,661 ------------- ------------- RUSSIA-2.0% Russian Federation 7.50%, 3/31/30 (d)(e) -0- -0- 2,460 2,749,217 Series REGS 11.00%, 7/24/18 (d) -0- -0- 240 337,560 Russian Ministry of Finance Series V 3.00%, 5/14/08 -0- -0- 1,405 1,378,727 Series VII 3.00%, 5/14/11 -0- -0- 160 146,000 ------------- ------------- -0- 4,611,504 ------------- ------------- SOUTH AFRICA-0.3% Republic of South Africa 5.875%, 5/30/22 -0- -0- 555 545,981 7.375%, 4/25/12 -0- -0- 142 153,360 ------------- ------------- -0- 699,341 ------------- ------------- TURKEY-0.6% Republic of Turkey 6.875%, 3/17/36 -0- -0- 577 551,035 7.00%, 6/05/20 -0- -0- 450 452,273 7.375%, 2/05/25 -0- -0- 256 265,280 8.00%, 2/14/34 -0- -0- 30 32,512 ------------- ------------- -0- 1,301,100 ------------- -------------
AllianceBernstein AllianceBernstein Variable Variable Products AllianceBernstein Products Series Fund U.S. Variable Products Series Fund AllianceBernstein Government/High Series Fund Global Dollar Variable Products Grade Securities U.S. Government/High Government Series Fund Portfolio Grade Securities Portfolio Global Dollar Principal Portfolio Principal Government Portfolio Amount (000) (U.S. $ Value) Amount (000) (U.S. $ Value) ---------------------------------------- ---------------------------------------- UKRAINE-0.1% Government of Ukraine 6.58%, 11/21/16 (d) US$ -0- $ -0- US$ 144 $ 146,016 7.65%, 6/11/13 (d) -0- -0- 80 84,800 --------------- -------------- -0- 230,816 --------------- -------------- URUGUAY-0.3% Republic of Uruguay 7.875%, 1/15/33 (f) -0- -0- 138 153,194 8.00%, 11/18/22 -0- -0- 354 392,055 9.25%, 5/17/17 -0- -0- 200 236,800 --------------- -------------- -0- 782,049 --------------- -------------- VENEZUELA-0.6% Republic of Venezuela 5.75%, 2/26/16 -0- -0- 253 213,785 6.00%, 12/09/20 -0- -0- 45 35,600 7.65%, 4/21/25 -0- -0- 204 183,600 8.50%, 10/08/14 -0- -0- 92 92,230 9.25%, 9/15/27 -0- -0- 89 92,560 9.375%, 1/13/34 -0- -0- 85 88,825 13.625%, 8/15/18 -0- -0- 120 158,400 Series REGS 7.00%, 12/01/18 (d) -0- -0- 481 428,090 --------------- -------------- -0- 1,293,090 --------------- -------------- TOTAL GOVERNMENT RELATED - NON-U.S. ISSUERS (cost $30,776,994) 3,841,415 21,892,855 --------------- -------------- CORPORATES - NON-INVESTMENT GRADES - 14.5% INDUSTRIAL - 10.8% BASIC - 1.2% Arch Western Finance LLC 6.75%, 7/01/13 -0- -0- -0- -0- Basell AF SCA 8.375%, 8/15/15 (d) -0- -0- -0- -0- Citigroup (JSC Severstal) Series REGS 9.25%, 4/19/14 (d) -0- -0- -0- -0- Equistar Chemicals Funding LP 10.125%, 9/01/08 -0- -0- -0- -0- 10.625%, 5/01/11 -0- -0- -0- -0- Evraz Group, SA 8.25%, 11/10/15 (d) -0- -0- -0- -0- Freeport-McMoRan Copper & Gold, Inc. 8.375%, 4/01/17 -0- -0- -0- -0- Georgia-Pacific Corp. 7.00%, 1/15/15 (d) -0- -0- -0- -0- 7.125%, 1/15/17 (d) -0- -0- -0- -0- Hexion US Finance Corp./Hexion Nova Scotia Finance LLC 10.058%, 11/15/14 (b) -0- -0- -0- -0- Huntsman International LLC 7.875%, 11/15/14 -0- -0- -0- -0- Huntsman LLC 11.50%, 7/15/12 -0- -0- -0- -0- Ineos Group Holdings PLC 8.50%, 2/15/16 (d) -0- -0- -0- -0- Lyondell Chemical Co. 8.00%, 9/15/14 -0- -0- -0- -0- 8.25%, 9/15/16 -0- -0- -0- -0- The Mosaic Co. 7.625%, 12/01/16 (d)(e) -0- -0- -0- -0- NewPage Corp. 10.00%, 5/01/12 -0- -0- -0- -0- Packaging Corp. of America 5.75%, 8/01/13 155 153,461 -0- -0- Peabody Energy Corp. Series B 6.875%, 3/15/13 -0- -0- -0- -0- --------------- -------------- 153,461 -0- --------------- -------------- CAPITAL GOODS - 1.2% Allied Waste North America, Inc. 6.375%, 4/15/11 -0- -0- -0- -0- 6.875%, 6/01/17 -0- -0- -0- -0- Series B 7.125%, 5/15/16 -0- -0- -0- -0- 7.375%, 4/15/14 -0- -0- -0- -0- Associated Materials, Inc. 11.25%, 3/01/14 (g) -0- -0- -0- -0- Berry Plastics Holding Corp. 8.875%, 9/15/14 -0- -0- -0- -0- 10.25%, 3/01/16 -0- -0- -0- -0- Bombardier, Inc. 6.30%, 5/01/14 (d) -0- -0- -0- -0- 8.00%, 11/15/14 (d) -0- -0- -0- -0- Case Corp. 7.25%, 1/15/16 -0- -0- -0- -0- Case New Holland, Inc. 7.125%, 3/01/14 -0- -0- -0- -0- Crown Americas 7.625%, 11/15/13 -0- -0- -0- -0- Goodman Global Holdings, Inc. 7.875%, 12/15/12 -0- -0- -0- -0- L-3 Communications Corp. 5.875%, 1/15/15 -0- -0- -0- -0- Owens Brockway Glass Container, Inc. 8.875%, 2/15/09 -0- -0- -0- -0- Series $ 6.75%, 12/01/14 -0- -0- -0- -0- Russell-Stanley Holdings, Inc. 9.00%, 11/30/08 (h)(i)(j) -0- -0- -0- -0- Trinity Industries, Inc. 6.50%, 3/15/14 -0- -0- -0- -0- United Rentals North America, Inc. 7.75%, 11/15/13 -0- -0- -0- -0- --------------- -------------- -0- -0- --------------- -------------- COMMUNICATIONS - MEDIA - 1.9% Albritton Communications Co. 7.75%, 12/15/12 -0- -0- -0- -0- Cablevision Systems Corp. Series B 8.00%, 4/15/12 -0- -0- -0- -0- CCH I Holdings LLC 11.75%, 5/15/14 -0- -0- -0- -0- Clear Channel Communications, Inc. 5.50%, 9/15/14 -0- -0- -0- -0- 5.75%, 1/15/13 -0- -0- -0- -0- CSC Holdings, Inc. 7.625%, 7/15/18 -0- -0- -0- -0- 7.875%, 2/15/18 -0- -0- -0- -0- Series WI 6.75%, 4/15/12 -0- -0- -0- -0-
AllianceBernstein AllianceBernstein AllianceBernstein Variable Products AllianceBernstein Variable Products Variable Products Series Fund Variable Products Series Fund Series Fund High Yield Series Fund Americas Government Americas Portfolio High Yield Income Portfolio Government Principal Portfolio Principal Income Portfolio Amount (000) (U.S. $ Value) Amount (000) (U.S. $ Value) ---------------------------------------- ---------------------------------------- UKRAINE-0.1% Government of Ukraine 6.58%, 11/21/16 (d) US$ -0- $ -0- US$ -0- $ -0- 7.65%, 6/11/13 (d) -0- -0- -0- -0- --------------- -------------- -0- -0- --------------- -------------- URUGUAY-0.3% Republic of Uruguay 7.875%, 1/15/33 (f) -0- -0- -0- -0- 8.00%, 11/18/22 -0- -0- -0- -0- 9.25%, 5/17/17 -0- -0- -0- -0- --------------- -------------- -0- -0- --------------- -------------- VENEZUELA-0.6% Republic of Venezuela 5.75%, 2/26/16 -0- -0- -0- -0- 6.00%, 12/09/20 -0- -0- -0- -0- 7.65%, 4/21/25 -0- -0- -0- -0- 8.50%, 10/08/14 -0- -0- -0- -0- 9.25%, 9/15/27 -0- -0- -0- -0- 9.375%, 1/13/34 -0- -0- -0- -0- 13.625%, 8/15/18 -0- -0- -0- -0- Series REGS 7.00%, 12/01/18 (d) -0- -0- -0- -0- --------------- -------------- -0- -0- --------------- -------------- TOTAL GOVERNMENT RELATED - NON-U.S. ISSUERS (cost $30,776,994) -0- 7,723,945 --------------- -------------- CORPORATES - NON-INVESTMENT GRADES - 14.5% INDUSTRIAL - 10.8% BASIC - 1.2% Arch Western Finance LLC 6.75%, 7/01/13 90 88,200 -0- -0- Basell AF SCA 8.375%, 8/15/15 (d) 110 100,375 -0- -0- Citigroup (JSC Severstal) Series REGS 9.25%, 4/19/14 (d) 220 236,408 -0- -0- Equistar Chemicals Funding LP 10.125%, 9/01/08 47 48,527 -0- -0- 10.625%, 5/01/11 65 67,925 -0- -0- Evraz Group, SA 8.25%, 11/10/15 (d) 123 123,480 -0- -0- Freeport-McMoRan Copper & Gold, Inc. 8.375%, 4/01/17 275 300,437 -0- -0- Georgia-Pacific Corp. 7.00%, 1/15/15 (d) 85 82,875 -0- -0- 7.125%, 1/15/17 (d) 95 91,912 -0- -0- Hexion US Finance Corp./Hexion Nova Scotia Finance LLC 10.058%, 11/15/14 (b) 60 61,800 -0- -0- Huntsman International LLC 7.875%, 11/15/14 105 111,825 -0- -0- Huntsman LLC 11.50%, 7/15/12 143 155,513 -0- -0- Ineos Group Holdings PLC 8.50%, 2/15/16 (d) 179 171,393 -0- -0- Lyondell Chemical Co. 8.00%, 9/15/14 80 88,000 -0- -0- 8.25%, 9/15/16 110 124,025 -0- -0- The Mosaic Co. 7.625%, 12/01/16 (d)(e) 290 309,212 -0- -0- NewPage Corp. 10.00%, 5/01/12 100 105,250 -0- -0- Packaging Corp. of America 5.75%, 8/01/13 -0- -0- -0- -0- Peabody Energy Corp. Series B 6.875%, 3/15/13 190 191,900 -0- -0- --------------- -------------- 2,459,057 -0- --------------- -------------- CAPITAL GOODS - 1.2% Allied Waste North America, Inc. 6.375%, 4/15/11 174 174,435 -0- -0- 6.875%, 6/01/17 85 85,425 -0- -0- Series B 7.125%, 5/15/16 80 81,800 -0- -0- 7.375%, 4/15/14 90 90,450 -0- -0- Associated Materials, Inc. 11.25%, 3/01/14 (g) 235 148,050 -0- -0- Berry Plastics Holding Corp. 8.875%, 9/15/14 105 107,363 -0- -0- 10.25%, 3/01/16 35 34,300 -0- -0- Bombardier, Inc. 6.30%, 5/01/14 (d) 270 264,600 -0- -0- 8.00%, 11/15/14 (d) 225 231,750 -0- -0- Case Corp. 7.25%, 1/15/16 170 175,950 -0- -0- Case New Holland, Inc. 7.125%, 3/01/14 245 251,125 -0- -0- Crown Americas 7.625%, 11/15/13 155 159,069 -0- -0- Goodman Global Holdings, Inc. 7.875%, 12/15/12 110 108,075 -0- -0- L-3 Communications Corp. 5.875%, 1/15/15 130 124,800 -0- -0- Owens Brockway Glass Container, Inc. 8.875%, 2/15/09 176 178,640 -0- -0- Series $ 6.75%, 12/01/14 205 202,181 -0- -0- Russell-Stanley Holdings, Inc. 9.00%, 11/30/08 (h)(i)(j) 36 4,566 -0- -0- Trinity Industries, Inc. 6.50%, 3/15/14 180 172,800 -0- -0- United Rentals North America, Inc. 7.75%, 11/15/13 220 226,600 -0- -0- --------------- -------------- 2,821,979 -0- --------------- -------------- COMMUNICATIONS - MEDIA - 1.9% Albritton Communications Co. 7.75%, 12/15/12 165 166,650 -0- -0- Cablevision Systems Corp. Series B 8.00%, 4/15/12 120 116,400 -0- -0- CCH I Holdings LLC 11.75%, 5/15/14 580 536,500 -0- -0- Clear Channel Communications, Inc. 5.50%, 9/15/14 238 186,869 -0- -0- 5.75%, 1/15/13 157 131,406 -0- -0- CSC Holdings, Inc. 7.625%, 7/15/18 125 119,375 -0- -0- 7.875%, 2/15/18 45 43,650 -0- -0- Series WI 6.75%, 4/15/12 190 182,875 -0- -0-
Pro Forma Pro Forma AllianceBernstein AllianceBernstein AllianceBernstein Variable Products AllianceBernstein Variable Products Variable Products Series Fund Variable Products Series Fund U.S. Series Fund U.S. Global Bond Series Fund Government/High Government/High Portfolio Global Bond Grade Securities Grade Securities Principal Portfolio Portfolio Principal Portfolio Amount (000) (U.S. $ Value) Amount (000) (U.S. $ Value) ---------------------------------------- ---------------------------------------- UKRAINE-0.1% Government of Ukraine 6.58%, 11/21/16 (d) US$ -0- $ -0- US$ 144 $ 146,016 7.65%, 6/11/13 (d) -0- -0- 80 84,800 --------------- -------------- -0- 230,816 --------------- -------------- URUGUAY-0.3% Republic of Uruguay 7.875%, 1/15/33 (f) -0- -0- 138 153,194 8.00%, 11/18/22 -0- -0- 354 392,055 9.25%, 5/17/17 -0- -0- 200 236,800 --------------- -------------- -0- 782,049 --------------- -------------- VENEZUELA-0.6% Republic of Venezuela 5.75%, 2/26/16 -0- -0- 253 213,785 6.00%, 12/09/20 -0- -0- 45 35,600 7.65%, 4/21/25 -0- -0- 204 183,600 8.50%, 10/08/14 -0- -0- 92 92,230 9.25%, 9/15/27 -0- -0- 89 92,560 9.375%, 1/13/34 -0- -0- 85 88,825 13.625%, 8/15/18 -0- -0- 120 158,400 Series REGS 7.00%, 12/01/18 (d) -0- -0- 481 428,090 --------------- -------------- -0- 1,293,090 --------------- -------------- TOTAL GOVERNMENT RELATED - NON-U.S. ISSUERS (cost $30,776,994) -0- 33,458,215 --------------- -------------- CORPORATES - NON-INVESTMENT GRADES - 14.5% INDUSTRIAL - 10.8% BASIC - 1.2% Arch Western Finance LLC 6.75%, 7/01/13 -0- -0- 90 88,200 Basell AF SCA 8.375%, 8/15/15 (d) -0- -0- 110 100,375 Citigroup (JSC Severstal) Series REGS 9.25%, 4/19/14 (d) -0- -0- 220 236,408 Equistar Chemicals Funding LP 10.125%, 9/01/08 -0- -0- 47 48,527 10.625%, 5/01/11 -0- -0- 65 67,925 Evraz Group, SA 8.25%, 11/10/15 (d) -0- -0- 123 123,480 Freeport-McMoRan Copper & Gold, Inc. 8.375%, 4/01/17 -0- -0- 275 300,437 Georgia-Pacific Corp. 7.00%, 1/15/15 (d) -0- -0- 85 82,875 7.125%, 1/15/17 (d) -0- -0- 95 91,912 Hexion US Finance Corp./Hexion Nova Scotia Finance LLC 10.058%, 11/15/14 (b) -0- -0- 60 61,800 Huntsman International LLC 7.875%, 11/15/14 -0- -0- 105 111,825 Huntsman LLC 11.50%, 7/15/12 -0- -0- 143 155,513 Ineos Group Holdings PLC 8.50%, 2/15/16 (d) -0- -0- 179 171,393 Lyondell Chemical Co. 8.00%, 9/15/14 -0- -0- 80 88,000 8.25%, 9/15/16 -0- -0- 110 124,025 The Mosaic Co. 7.625%, 12/01/16 (d)(e) -0- -0- 290 309,212 NewPage Corp. 10.00%, 5/01/12 -0- -0- 100 105,250 Packaging Corp. of America 5.75%, 8/01/13 -0- -0- 155 153,461 Peabody Energy Corp. Series B 6.875%, 3/15/13 -0- -0- 190 191,900 --------------- -------------- -0- 2,612,518 --------------- -------------- CAPITAL GOODS - 1.2% Allied Waste North America, Inc. 6.375%, 4/15/11 -0- -0- 174 174,435 6.875%, 6/01/17 -0- -0- 85 85,425 Series B 7.125%, 5/15/16 -0- -0- 80 81,800 7.375%, 4/15/14 -0- -0- 90 90,450 Associated Materials, Inc. 11.25%, 3/01/14 (g) -0- -0- 235 148,050 Berry Plastics Holding Corp. 8.875%, 9/15/14 -0- -0- 105 107,363 10.25%, 3/01/16 -0- -0- 35 34,300 Bombardier, Inc. 6.30%, 5/01/14 (d) -0- -0- 270 264,600 8.00%, 11/15/14 (d) -0- -0- 225 231,750 Case Corp. 7.25%, 1/15/16 -0- -0- 170 175,950 Case New Holland, Inc. 7.125%, 3/01/14 -0- -0- 245 251,125 Crown Americas 7.625%, 11/15/13 -0- -0- 155 159,069 Goodman Global Holdings, Inc. 7.875%, 12/15/12 -0- -0- 110 108,075 L-3 Communications Corp. 5.875%, 1/15/15 -0- -0- 130 124,800 Owens Brockway Glass Container, Inc. 8.875%, 2/15/09 -0- -0- 176 178,640 Series $ 6.75%, 12/01/14 -0- -0- 205 202,181 Russell-Stanley Holdings, Inc. 9.00%, 11/30/08 (h)(i)(j) -0- -0- 36 4,566 Trinity Industries, Inc. 6.50%, 3/15/14 -0- -0- 180 172,800 United Rentals North America, Inc. 7.75%, 11/15/13 -0- -0- 220 226,600 --------------- -------------- -0- 2,821,979 --------------- -------------- COMMUNICATIONS - MEDIA - 1.9% Albritton Communications Co. 7.75%, 12/15/12 -0- -0- 165 166,650 Cablevision Systems Corp. Series B 8.00%, 4/15/12 -0- -0- 120 116,400 CCH I Holdings LLC 11.75%, 5/15/14 -0- -0- 580 536,500 Clear Channel Communications, Inc. 5.50%, 9/15/14 -0- -0- 238 186,869 5.75%, 1/15/13 -0- -0- 157 131,406 CSC Holdings, Inc. 7.625%, 7/15/18 -0- -0- 125 119,375 7.875%, 2/15/18 -0- -0- 45 43,650 Series WI 6.75%, 4/15/12 -0- -0- 190 182,875
AllianceBernstein AllianceBernstein Variable Products Variable Products Series Fund AllianceBernstein Series Fund AllianceBernstein U.S. Government/High Variable Products Global Dollar Variable Products Grade Securities Portfolio Series Fund Government Portfolio Series Fund Principal U.S. Government/High Principal Global Dollar Amount Grade Securities Portfolio Amount Government Portfolio (000) (U.S. $ Value) (000) (U.S. $ Value) ------------------------ ------------------------- --------------------- ------------------- Dex Media West LLC Series B 8.50%, 8/15/10 US$ -0- $ -0- US$ -0- $ -0- DirecTV Holdings LLC 6.375%, 6/15/15 -0- -0- -0- -0- EchoStar DBS Corp. 6.375%, 10/01/11 -0- -0- -0- -0- 6.625%, 10/01/14 -0- -0- -0- -0- 7.125%, 2/01/16 -0- -0- -0- -0- Idearc, Inc. 8.00%, 11/15/16 -0- -0- -0- -0- Insight Communications Co., Inc. 12.25%, 2/15/11 -0- -0- -0- -0- Insight Midwest LP 9.75%, 10/01/09 -0- -0- -0- -0- Intelsat Bermuda Ltd. 11.25%, 6/15/16 -0- -0- -0- -0- Intelsat Subsidiary Holding Co. Ltd. 8.625%, 1/15/15 -0- -0- -0- -0- Liberty Media Corp. 5.70%, 5/15/13 -0- -0- -0- -0- 7.875%, 7/15/09 -0- -0- -0- -0- 8.25%, 2/01/30 -0- -0- -0- -0- Quebecor Media, Inc. 7.75%, 3/15/16 -0- -0- -0- -0- Rainbow National Services LLC 8.75%, 9/01/12 (d) -0- -0- -0- -0- 10.375%, 9/01/14 (d) -0- -0- -0- -0- RH Donnelley Corp. Series A-2 6.875%, 1/15/13 -0- -0- -0- -0- Sirius Satellite Radio, Inc. 9.625%, 8/01/13 -0- -0- -0- -0- Univision Communications, Inc. 7.85%, 7/15/11 -0- -0- -0- -0- WDAC Subsidiary Corp. 8.375%, 12/01/14 (d) -0- -0- -0- -0- WMG Holdings Corp. 9.50%, 12/15/14 (g) -0- -0- -0- -0- XM Satellite Radio, Inc. 9.75%, 5/01/14 -0- -0- -0- -0- -------------------------- ----------------------- -0- -0- -------------------------- ----------------------- COMMUNICATIONS - TELECOMMUNICATIONS - 1.0% Alltel Corp. 7.875%, 7/01/32 -0- -0- -0- -0- American Tower Corp. 7.00%, 10/15/17 (d) -0- -0- -0- -0- Citizens Communications Co. 6.25%, 1/15/13 -0- -0- -0- -0- Cricket Communications, Inc. 9.375%, 11/01/14 -0- -0- -0- -0- Digicel Ltd. 9.25%, 9/01/12 (d) -0- -0- -0- -0- Dobson Cellular Systems, Inc. Series B 8.375%, 11/01/11 -0- -0- -0- -0- Dobson Communications Corp. 8.875%, 10/01/13 -0- -0- -0- -0- Inmarsat Finance PLC 7.625%, 6/30/12 -0- -0- -0- -0- 10.375%, 11/15/12 (g) -0- -0- -0- -0- Level 3 Financing, Inc. 9.25%, 11/01/14 -0- -0- -0- -0- Mobile Telesystems Finance SA 8.00%, 1/28/12 (d) -0- -0- -0- -0- PanAmSat Corp. 9.00%, 8/15/14 -0- -0- -0- -0- Qwest Capital Funding, Inc. 7.25%, 2/15/11 -0- -0- -0- -0- Time Warner Telecom Holdings, Inc. 9.25%, 2/15/14 -0- -0- -0- -0- Windstream Corp. 8.125%, 8/01/13 -0- -0- -0- -0- 8.625%, 8/01/16 -0- -0- -0- -0- -------------------------- ----------------------- -0- -0- -------------------------- ----------------------- CONSUMER CYCLICAL - AUTOMOTIVE - 1.1% Affinia Group, Inc. 9.00%, 11/30/14 -0- -0- -0- -0- Ford Motor Credit Co. 7.00%, 10/01/13 -0- -0- -0- -0- 7.45%, 7/16/31 -0- -0- -0- -0- 8.11%, 1/13/12 (b) -0- -0- -0- -0- General Motors Acceptance Corp. 6.75%, 12/01/14 -0- -0- -0- -0- 6.875%, 9/15/11 -0- -0- -0- -0- 8.00%, 11/01/31 -0- -0- -0- -0- General Motors Corp. 8.25%, 7/15/23 -0- -0- -0- -0- 8.375%, 7/15/33 -0- -0- -0- -0- The Goodyear Tire & Rubber Co. 9.00%, 7/01/15 -0- -0- -0- -0- Keystone Automotive Operations, Inc. 9.75%, 11/01/13 -0- -0- -0- -0- Lear Corp. Series B 5.75%, 8/01/14 -0- -0- -0- -0- 8.50%, 12/01/13 -0- -0- -0- -0- 8.75%, 12/01/16 -0- -0- -0- -0- Visteon Corp. 7.00%, 3/10/14 -0- -0- -0- -0- -------------------------- ----------------------- -0- -0- -------------------------- ----------------------- CONSUMER CYCLICAL - OTHER - 1.4% Broder Brothers Co. Series B 11.25%, 10/15/10 -0- -0- -0- -0- Greektown Holdings LLC 10.75%, 12/01/13 (d) -0- -0- -0- -0- Harrah's Operating Co., Inc 5.625%, 6/01/15 -0- -0- -0- -0- 5.75%, 10/01/17 -0- -0- -0- -0- 6.50%, 6/01/16 -0- -0- -0- -0- Host Hotels & Resorts LP 6.875%, 11/01/14 -0- -0- -0- -0- Host Marriott LP Series Q 6.75%, 6/01/16 -0- -0- -0- -0- KB Home 7.75%, 2/01/10 -0- -0- -0- -0- Levi Strauss & Co. 8.875%, 4/01/16 -0- -0- -0- -0-
AllianceBernstein AllianceBernstein Variable Products Variable Products Series Fund AllianceBernstein Series Fund AllianceBernstein High Yield Variable Products Americas Government Variable Products Portfolio Series Fund Income Portfolio Series Fund Principal High Yield Principal Americas Government Amount Portfolio Amount Income Portfolio (000) (U.S. $ Value) (000) (U.S. $ Value) ------------------ ---------------- ----------------- ------------------ Dex Media West LLC Series B 8.50%, 8/15/10 US$ 60 $ 61,650 US$ -0- $ -0- DirecTV Holdings LLC 6.375%, 6/15/15 291 276,086 -0- -0- EchoStar DBS Corp. 6.375%, 10/01/11 89 89,445 -0- -0- 6.625%, 10/01/14 305 306,525 -0- -0- 7.125%, 2/01/16 85 87,338 -0- -0- Idearc, Inc. 8.00%, 11/15/16 185 184,538 -0- -0- Insight Communications Co., Inc. 12.25%, 2/15/11 181 186,883 -0- -0- Insight Midwest LP 9.75%, 10/01/09 81 81,101 -0- -0- Intelsat Bermuda Ltd. 11.25%, 6/15/16 274 293,523 -0- -0- Intelsat Subsidiary Holding Co. Ltd. 8.625%, 1/15/15 135 137,700 -0- -0- Liberty Media Corp. 5.70%, 5/15/13 50 46,711 -0- -0- 7.875%, 7/15/09 58 59,693 -0- -0- 8.25%, 2/01/30 50 49,000 -0- -0- Quebecor Media, Inc. 7.75%, 3/15/16 230 219,362 -0- -0- Rainbow National Services LLC 8.75%, 9/01/12 (d) 55 57,062 -0- -0- 10.375%, 9/01/14 (d) 30 32,925 -0- -0- RH Donnelley Corp. Series A-2 6.875%, 1/15/13 128 120,960 -0- -0- Sirius Satellite Radio, Inc. 9.625%, 8/01/13 70 69,475 -0- -0- Univision Communications, Inc. 7.85%, 7/15/11 115 115,000 -0- -0- WDAC Subsidiary Corp. 8.375%, 12/01/14 (d) 70 70,000 -0- -0- WMG Holdings Corp. 9.50%, 12/15/14 (g) 333 233,100 -0- -0- XM Satellite Radio, Inc. 9.75%, 5/01/14 60 60,150 -0- -0- --------------------------- ------------------- 4,321,952 -0- --------------------------- ------------------- COMMUNICATIONS - TELECOMMUNICATIONS - 1.0% Alltel Corp. 7.875%, 7/01/32 170 137,740 -0- -0- American Tower Corp. 7.00%, 10/15/17 (d) 20 20,125 -0- -0- Citizens Communications Co. 6.25%, 1/15/13 210 204,750 -0- -0- Cricket Communications, Inc. 9.375%, 11/01/14 215 218,225 -0- -0- Digicel Ltd. 9.25%, 9/01/12 (d) 161 165,428 -0- -0- Dobson Cellular Systems, Inc. Series B 8.375%, 11/01/11 76 80,655 -0- -0- Dobson Communications Corp. 8.875%, 10/01/13 75 79,875 -0- -0- Inmarsat Finance PLC 7.625%, 6/30/12 145 149,350 -0- -0- 10.375%, 11/15/12 (g) 155 148,413 -0- -0- Level 3 Financing, Inc. 9.25%, 11/01/14 195 192,075 -0- -0- Mobile Telesystems Finance SA 8.00%, 1/28/12 (d) 231 236,636 -0- -0- PanAmSat Corp. 9.00%, 8/15/14 143 147,290 -0- -0- Qwest Capital Funding, Inc. 7.25%, 2/15/11 300 301,500 -0- -0- Time Warner Telecom Holdings, Inc. 9.25%, 2/15/14 50 51,875 -0- -0- Windstream Corp. 8.125%, 8/01/13 88 92,620 -0- -0- 8.625%, 8/01/16 77 82,101 -0- -0- --------------------------- ------------------- 2,308,658 -0- --------------------------- ------------------- CONSUMER CYCLICAL - AUTOMOTIVE - 1.1% Affinia Group, Inc. 9.00%, 11/30/14 85 79,900 -0- -0- Ford Motor Credit Co. 7.00%, 10/01/13 204 184,355 -0- -0- 7.45%, 7/16/31 364 285,740 -0- -0- 8.11%, 1/13/12 (b) 240 226,778 -0- -0- General Motors Acceptance Corp. 6.75%, 12/01/14 135 122,361 -0- -0- 6.875%, 9/15/11 321 305,484 -0- -0- 8.00%, 11/01/31 135 132,446 -0- -0- General Motors Corp. 8.25%, 7/15/23 350 306,250 -0- -0- 8.375%, 7/15/33 305 267,256 -0- -0- The Goodyear Tire & Rubber Co. 9.00%, 7/01/15 130 138,775 -0- -0- Keystone Automotive Operations, Inc. 9.75%, 11/01/13 108 88,020 -0- -0- Lear Corp. Series B 5.75%, 8/01/14 70 58,800 -0- -0- 8.50%, 12/01/13 45 43,088 -0- -0- 8.75%, 12/01/16 245 230,300 -0- -0- Visteon Corp. 7.00%, 3/10/14 165 128,288 -0- -0- --------------------------- ------------------- 2,597,841 -0- --------------------------- ------------------- CONSUMER CYCLICAL - OTHER - 1.4% Broder Brothers Co. Series B 11.25%, 10/15/10 77 66,990 -0- -0- Greektown Holdings LLC 10.75%, 12/01/13 (d) 90 89,100 -0- -0- Harrah's Operating Co., Inc 5.625%, 6/01/15 422 335,490 -0- -0- 5.75%, 10/01/17 16 12,240 -0- -0- 6.50%, 6/01/16 237 193,155 -0- -0- Host Hotels & Resorts LP 6.875%, 11/01/14 45 44,888 -0- -0- Host Marriott LP Series Q 6.75%, 6/01/16 300 297,000 -0- -0- KB Home 7.75%, 2/01/10 125 118,437 -0- -0- Levi Strauss & Co. 8.875%, 4/01/16 63 64,890 -0- -0-
Pro Forma AllianceBernstein AllianceBernstein Pro Forma Variable Products Variable Products AllianceBernstein Series Fund AllianceBernstein Series Fund Variable Products Global Bond Variable Products U.S. Government/High Series Fund Portfolio Series Fund Grade Securities Portfolio U.S. Government/High Principal Global Bond Principal Grade Securities Amount Portfolio Amount Portfolio (000) (U.S. $ Value) (000) (U.S. $ Value) ------------------- ----------------- ----------------------- ---------------------- Dex Media West LLC Series B 8.50%, 8/15/10 US$ -0- $ -0- US$ 60 $ 61,650 DirecTV Holdings LLC 6.375%, 6/15/15 -0- -0- 291 276,086 EchoStar DBS Corp. 6.375%, 10/01/11 -0- -0- 89 89,445 6.625%, 10/01/14 -0- -0- 305 306,525 7.125%, 2/01/16 -0- -0- 85 87,338 Idearc, Inc. 8.00%, 11/15/16 -0- -0- 185 184,538 Insight Communications Co., Inc. 12.25%, 2/15/11 -0- -0- 181 186,883 Insight Midwest LP 9.75%, 10/01/09 -0- -0- 81 81,101 Intelsat Bermuda Ltd. 11.25%, 6/15/16 -0- -0- 274 293,523 Intelsat Subsidiary Holding Co. Ltd. 8.625%, 1/15/15 -0- -0- 135 137,700 Liberty Media Corp. 5.70%, 5/15/13 -0- -0- 50 46,711 7.875%, 7/15/09 -0- -0- 58 59,693 8.25%, 2/01/30 -0- -0- 50 49,000 Quebecor Media, Inc. 7.75%, 3/15/16 -0- -0- 230 219,362 Rainbow National Services LLC 8.75%, 9/01/12 (d) -0- -0- 55 57,062 10.375%, 9/01/14 (d) -0- -0- 30 32,925 RH Donnelley Corp. Series A-2 6.875%, 1/15/13 -0- -0- 128 120,960 Sirius Satellite Radio, Inc. 9.625%, 8/01/13 -0- -0- 70 69,475 Univision Communications, Inc. 7.85%, 7/15/11 -0- -0- 115 115,000 WDAC Subsidiary Corp. 8.375%, 12/01/14 (d) -0- -0- 70 70,000 WMG Holdings Corp. 9.50%, 12/15/14 (g) -0- -0- 333 233,100 XM Satellite Radio, Inc. 9.75%, 5/01/14 -0- -0- 60 60,150 -------------------------- ----------------------- -0- 4,321,952 -------------------------- ----------------------- COMMUNICATIONS - TELECOMMUNICATIONS -- 1.0% Alltel Corp. 7.875%, 7/01/32 -0- -0- 170 137,740 American Tower Corp. 7.00%, 10/15/17 (d) -0- -0- 20 20,125 Citizens Communications Co. 6.25%, 1/15/13 -0- -0- 210 204,750 Cricket Communications, Inc. 9.375%, 11/01/14 -0- -0- 215 218,225 Digicel Ltd. 9.25%, 9/01/12 (d) -0- -0- 161 165,428 Dobson Cellular Systems, Inc. Series B 8.375%, 11/01/11 -0- -0- 76 80,655 Dobson Communications Corp. 8.875%, 10/01/13 -0- -0- 75 79,875 Inmarsat Finance PLC 7.625%, 6/30/12 -0- -0- 145 149,350 10.375%, 11/15/12 (g) -0- -0- 155 148,413 Level 3 Financing, Inc. 9.25%, 11/01/14 -0- -0- 195 192,075 Mobile Telesystems Finance SA 8.00%, 1/28/12 (d) -0- -0- 231 236,636 PanAmSat Corp. 9.00%, 8/15/14 -0- -0- 143 147,290 Qwest Capital Funding, Inc. 7.25%, 2/15/11 -0- -0- 300 301,500 Time Warner Telecom Holdings, Inc. 9.25%, 2/15/14 -0- -0- 50 51,875 Windstream Corp. 8.125%, 8/01/13 -0- -0- 88 92,620 8.625%, 8/01/16 -0- -0- 77 82,101 -------------------------- ----------------------- -0- 2,308,658 -------------------------- ----------------------- CONSUMER CYCLICAL - AUTOMOTIVE - 1.1% Affinia Group, Inc. 9.00%, 11/30/14 -0- -0- 85 79,900 Ford Motor Credit Co. 7.00%, 10/01/13 -0- -0- 204 184,355 7.45%, 7/16/31 -0- -0- 364 285,740 8.11%, 1/13/12 (b) -0- -0- 240 226,778 General Motors Acceptance Corp. 6.75%, 12/01/14 -0- -0- 135 122,361 6.875%, 9/15/11 -0- -0- 321 305,484 8.00%, 11/01/31 -0- -0- 135 132,446 General Motors Corp. 8.25%, 7/15/23 -0- -0- 350 306,250 8.375%, 7/15/33 -0- -0- 305 267,256 The Goodyear Tire & Rubber Co. 9.00%, 7/01/15 -0- -0- 130 138,775 Keystone Automotive Operations, Inc. 9.75%, 11/01/13 -0- -0- 108 88,020 Lear Corp. Series B 5.75%, 8/01/14 -0- -0- 70 58,800 8.50%, 12/01/13 -0- -0- 45 43,088 8.75%, 12/01/16 -0- -0- 245 230,300 Visteon Corp. 7.00%, 3/10/14 -0- -0- 165 128,288 -------------------------- ----------------------- -0- 2,597,841 -------------------------- ----------------------- CONSUMER CYCLICAL - OTHER - 1.4% Broder Brothers Co. Series B 11.25%, 10/15/10 -0- -0- 77 66,990 Greektown Holdings LLC 10.75%, 12/01/13 (d) -0- -0- 90 89,100 Harrah's Operating Co., Inc 5.625%, 6/01/15 -0- -0- 422 335,490 5.75%, 10/01/17 -0- -0- 16 12,240 6.50%, 6/01/16 -0- -0- 237 193,155 Host Hotels & Resorts LP 6.875%, 11/01/14 -0- -0- 45 44,888 Host Marriott LP Series Q 6.75%, 6/01/16 -0- -0- 300 297,000 KB Home 7.75%, 2/01/10 -0- -0- 125 118,437 Levi Strauss & Co. 8.875%, 4/01/16 -0- -0- 63 64,890
AllianceBernstein AllianceBernstein Variable Variable Products AllianceBernstein Products Series Fund U.S. Variable Products Series Fund AllianceBernstein Government/High Series Fund Global Dollar Variable Products Grade Securities U.S. Government/High Government Series Fund Portfolio Grade Securities Portfolio Global Dollar Principal Portfolio Principal Government Portfolio Amount (000) (U.S. $ Value) Amount (000) (U.S. $ Value) ----------------- -------------------- --------------- ---------------------- MGM Mirage 6.625%, 7/15/15 US$ -0- $ -0- US$ -0- $ -0- 7.625%, 1/15/17 -0- -0- -0- -0- 8.375%, 2/01/11 -0- -0- -0- -0- Mohegan Tribal Gaming Auth 7.125%, 8/15/14 -0- -0- -0- -0- NCL Corp. 10.625%, 7/15/14 -0- -0- -0- -0- Penn National Gaming, Inc. 6.875%, 12/01/11 -0- -0- -0- -0- Six Flags, Inc. 9.625%, 6/01/14 -0- -0- -0- -0- Station Casinos, Inc. 6.625%, 3/15/18 -0- -0- -0- -0- Turning Stone Resort Casino Enterprise 9.125%, 12/15/10 (d) -0- -0- -0- -0- Universal City Development Partners 11.75%, 4/01/10 -0- -0- -0- -0- Universal City Florida Holding Co. 8.375%, 5/01/10 -0- -0- -0- -0- William Lyon Homes, Inc. 10.75%, 4/01/13 -0- -0- -0- -0- Wynn Las Vegas LLC/Corp. 6.625%, 12/01/14 -0- -0- -0- -0- ---------------------- ---------------- -0- -0- ---------------------- ---------------- CONSUMER CYCLICAL - RETAILERS - 0.3% The Bon-Ton Dept Stores, Inc. 10.25%, 3/15/14 -0- -0- -0- -0- Burlington Coat Factory Warehouse Corp. 11.125%, 4/15/14 -0- -0- -0- -0- Couche-Tard, Inc. 7.50%, 12/15/13 -0- -0- -0- -0- GSC Holdings Corp. 8.00%, 10/01/12 -0- -0- -0- -0- Rite Aid Corp. 6.875%, 8/15/13 -0- -0- -0- -0- 9.25%, 6/01/13 -0- -0- -0- -0- 9.375%, 12/15/15 (d) -0- -0- -0- -0- 9.50%, 6/15/17 (d) -0- -0- -0- -0- ---------------------- ---------------- -0- -0- ---------------------- ---------------- CONSUMER NON-CYCLICAL - 1.1% Albertson's, Inc. 7.45%, 8/01/29 -0- -0- -0- -0- Aramark Corp. 8.50%, 2/01/15 -0- -0- -0- -0- Community Health Systems, Inc. 8.875%, 7/15/15 (d) -0- -0- -0- -0- DaVita, Inc. 7.25%, 3/15/15 -0- -0- -0- -0- Dole Food Company, Inc. 8.625%, 5/01/09 -0- -0- -0- -0- 8.875%, 3/15/11 -0- -0- -0- -0- Elan Finance PLC/Elan Finance Corp. 7.75%, 11/15/11 -0- -0- -0- -0- Hanger Orthopedic Group, Inc. 10.25%, 6/01/14 -0- -0- -0- -0- HCA, Inc. 6.375%, 1/15/15 -0- -0- -0- -0- 6.50%, 2/15/16 -0- -0- -0- -0- 6.75%, 7/15/13 -0- -0- -0- -0- 9.625%, 11/15/16 (d)(f) -0- -0- -0- -0- IASIS Healthcare Corp. 8.75%, 6/15/14 -0- -0- -0- -0- Select Medical Corp. 7.625%, 2/01/15 -0- -0- -0- -0- Spectrum Brands, Inc. 7.375%, 2/01/15 -0- -0- -0- -0- Stater Brothers Holdings 8.125%, 6/15/12 -0- -0- -0- -0- Tenet Healthcare Corp. 7.375%, 2/01/13 -0- -0- -0- -0- 9.875%, 7/01/14 -0- -0- -0- -0- Ventas Realty LP/CAP CRP 6.75%, 4/01/17 -0- -0- -0- -0- Viant Holdings, Inc. 10.125%, 7/15/17 (d) -0- -0- -0- -0- Visant Corp. 7.625%, 10/01/12 -0- -0- -0- -0- ---------------------- ---------------- -0- -0- ---------------------- ---------------- ENERGY - 0.4% Chesapeake Energy Corp. 7.50%, 9/15/13 -0- -0- -0- -0- 7.75%, 1/15/15 -0- -0- -0- -0- CIE Gener De Geophysique 7.50%, 5/15/15 -0- -0- -0- -0- 7.75%, 5/15/17 -0- -0- -0- -0- Hilcorp Energy I LP/Hilcorp Finance Co. 7.75%, 11/01/15 (d) -0- -0- -0- -0- PetroHawk Energy Corp. Series WI 9.125%, 7/15/13 -0- -0- -0- -0- Range Resources Corp. 7.50%, 5/15/16 -0- -0- -0- -0- Tesoro Corp. 6.25%, 11/01/12 -0- -0- -0- -0- 6.50%, 6/01/17 (d) -0- -0- -0- -0- ---------------------- ---------------- -0- -0- ---------------------- ---------------- OTHER INDUSTRIAL - 0.1% RBS Global, Inc. and Rexnord Corp. 9.50%, 8/01/14 -0- -0- -0- -0- 11.75%, 8/01/16 -0- -0- -0- -0- Sensus Metering Systems, Inc. 8.625%, 12/15/13 -0- -0- -0- -0- ---------------------- ---------------- -0- -0- ---------------------- ---------------- SERVICES - 0.1% Realogy Corp. 10.50%, 4/15/14 (d) -0- -0- -0- -0- West Corp. 9.50%, 10/15/14 -0- -0- -0- -0- ---------------------- ---------------- -0- -0- ---------------------- ---------------- TECHNOLOGY - 0.7% Amkor Technology, Inc. 9.25%, 6/01/16 -0- -0- -0- -0- Avago Technologies Finance 10.125%, 12/01/13 -0- -0- -0- -0- CA, Inc. 4.75%, 12/01/09 (d) -0- -0- -0- -0- Flextronics International Ltd. 6.50%, 5/15/13 -0- -0- -0- -0- Freescale Semiconductor, Inc. 8.875%, 12/15/14 -0- -0- -0- -0- 10.125%, 12/15/16 -0- -0- -0- -0-
AllianceBernstein AllianceBernstein AllianceBernstein Variable Products AllianceBernstein Variable Products Variable Products Series Fund Variable Products Series Fund Series Fund High Yield Series Fund Americas Government Americas Portfolio High Yield Income Portfolio Government Principal Portfolio Principal Income Portfolio Amount (000) (U.S. $ Value) Amount (000) (U.S. $ Value) ---------------------------------------- ---------------------------------------- MGM Mirage 6.625%, 7/15/15 US$ 302 $ 286,522 US$ -0- $ -0- 7.625%, 1/15/17 55 54,450 -0- -0- 8.375%, 2/01/11 280 291,900 -0- -0- Mohegan Tribal Gaming Auth 7.125%, 8/15/14 135 135,337 -0- -0- NCL Corp. 10.625%, 7/15/14 65 65,488 -0- -0- Penn National Gaming, Inc. 6.875%, 12/01/11 110 111,375 -0- -0- Six Flags, Inc. 9.625%, 6/01/14 115 95,019 -0- -0- Station Casinos, Inc. 6.625%, 3/15/18 270 226,125 -0- -0- Turning Stone Resort Casino Enterprise 9.125%, 12/15/10 (d) 140 142,800 -0- -0- Universal City Development Partners 11.75%, 4/01/10 120 125,400 -0- -0- Universal City Florida Holding Co. 8.375%, 5/01/10 60 60,450 -0- -0- William Lyon Homes, Inc. 10.75%, 4/01/13 112 82,880 -0- -0- Wynn Las Vegas LLC/Corp. 6.625%, 12/01/14 260 254,800 -0- -0- -------------------- ---------------- 3,154,736 -0- -------------------- ---------------- CONSUMER CYCLICAL - RETAILERS - 0.3% The Bon-Ton Dept Stores, Inc. 10.25%, 3/15/14 125 116,875 -0- -0- Burlington Coat Factory Warehouse Corp. 11.125%, 4/15/14 55 51,425 -0- -0- Couche-Tard, Inc. 7.50%, 12/15/13 144 146,520 -0- -0- GSC Holdings Corp. 8.00%, 10/01/12 215 223,600 -0- -0- Rite Aid Corp. 6.875%, 8/15/13 160 132,000 -0- -0- 9.25%, 6/01/13 85 80,750 -0- -0- 9.375%, 12/15/15 (d) 10 9,300 -0- -0- 9.50%, 6/15/17 (d) 15 14,025 -0- -0- -------------------- ---------------- 774,495 -0- -------------------- ---------------- CONSUMER NON-CYCLICAL - 1.1% Albertson's, Inc. 7.45%, 8/01/29 285 274,342 -0- -0- Aramark Corp. 8.50%, 2/01/15 105 107,100 -0- -0- Community Health Systems, Inc. 8.875%, 7/15/15 (d) 191 196,252 -0- -0- DaVita, Inc. 7.25%, 3/15/15 75 75,187 -0- -0- Dole Food Company, Inc. 8.625%, 5/01/09 60 60,150 -0- -0- 8.875%, 3/15/11 38 37,050 -0- -0- Elan Finance PLC/Elan Finance Corp. 7.75%, 11/15/11 265 259,700 -0- -0- Hanger Orthopedic Group, Inc. 10.25%, 6/01/14 80 82,000 -0- -0- HCA, Inc. 6.375%, 1/15/15 215 183,288 -0- -0- 6.50%, 2/15/16 155 131,750 -0- -0- 6.75%, 7/15/13 170 153,000 -0- -0- 9.625%, 11/15/16 (d)(f) 175 186,813 -0- -0- IASIS Healthcare Corp. 8.75%, 6/15/14 145 146,813 -0- -0- Select Medical Corp. 7.625%, 2/01/15 117 104,715 -0- -0- Spectrum Brands, Inc. 7.375%, 2/01/15 70 53,900 -0- -0- Stater Brothers Holdings 8.125%, 6/15/12 65 66,219 -0- -0- Tenet Healthcare Corp. 7.375%, 2/01/13 115 97,462 -0- -0- 9.875%, 7/01/14 80 73,200 -0- -0- Ventas Realty LP/CAP CRP 6.75%, 4/01/17 84 83,790 -0- -0- Viant Holdings, Inc. 10.125%, 7/15/17 (d) 85 79,050 -0- -0- Visant Corp. 7.625%, 10/01/12 80 81,400 -0- -0- -------------------- ---------------- 2,533,181 -0- -------------------- ---------------- ENERGY - 0.4% Chesapeake Energy Corp. 7.50%, 9/15/13 75 77,062 -0- -0- 7.75%, 1/15/15 210 216,037 -0- -0- CIE Gener De Geophysique 7.50%, 5/15/15 85 87,550 -0- -0- 7.75%, 5/15/17 15 15,450 -0- -0- Hilcorp Energy I LP/Hilcorp Finance Co. 7.75%, 11/01/15 (d) 55 53,763 -0- -0- PetroHawk Energy Corp. Series WI 9.125%, 7/15/13 107 112,885 -0- -0- Range Resources Corp. 7.50%, 5/15/16 110 112,200 -0- -0- Tesoro Corp. 6.25%, 11/01/12 140 140,350 -0- -0- 6.50%, 6/01/17 (d) 100 99,250 -0- -0- -------------------- ---------------- 914,547 -0- -------------------- ---------------- OTHER INDUSTRIAL - 0.1% RBS Global, Inc. and Rexnord Corp. 9.50%, 8/01/14 85 87,975 -0- -0- 11.75%, 8/01/16 60 63,900 -0- -0- Sensus Metering Systems, Inc. 8.625%, 12/15/13 125 121,250 -0- -0- -------------------- ---------------- 273,125 -0- -------------------- ---------------- SERVICES - 0.1% Realogy Corp. 10.50%, 4/15/14 (d) 100 85,250 -0- -0- West Corp. 9.50%, 10/15/14 40 41,300 -0- -0- -------------------- ---------------- 126,550 -0- -------------------- ---------------- TECHNOLOGY - 0.7% Amkor Technology, Inc. 9.25%, 6/01/16 180 181,800 -0- -0- Avago Technologies Finance 10.125%, 12/01/13 110 118,250 -0- -0- CA, Inc. 4.75%, 12/01/09 (d) 110 109,752 -0- -0- Flextronics International Ltd. 6.50%, 5/15/13 175 167,125 -0- -0- Freescale Semiconductor, Inc. 8.875%, 12/15/14 290 279,850 -0- -0- 10.125%, 12/15/16 80 74,400 -0- -0-
Pro Forma Pro Forma AllianceBernstein AllianceBernstein AllianceBernstein Variable Products AllianceBernstein Variable Products Variable Products Series Fund Variable Products Series Fund U.S. Series Fund U.S. Global Bond Series Fund Government/High Government/High Portfolio Global Bond Grade Securities Grade Securities Principal Portfolio Portfolio Principal Portfolio Amount (000) (U.S. $ Value) Amount (000) (U.S. $ Value) ------------------ ------------------- -------------------- ----------------- MGM Mirage 6.625%, 7/15/15 US$ -0- $ -0- US$ 302 $ 286,522 7.625%, 1/15/17 -0- -0- 55 54,450 8.375%, 2/01/11 -0- -0- 280 291,900 Mohegan Tribal Gaming Auth 7.125%, 8/15/14 -0- -0- 135 135,337 NCL Corp. 10.625%, 7/15/14 -0- -0- 65 65,488 Penn National Gaming, Inc. 6.875%, 12/01/11 -0- -0- 110 111,375 Six Flags, Inc. 9.625%, 6/01/14 -0- -0- 115 95,019 Station Casinos, Inc. 6.625%, 3/15/18 -0- -0- 270 226,125 Turning Stone Resort Casino Enterprise 9.125%, 12/15/10 (d) -0- -0- 140 142,800 Universal City Development Partners 11.75%, 4/01/10 -0- -0- 120 125,400 Universal City Florida Holding Co. 8.375%, 5/01/10 -0- -0- 60 60,450 William Lyon Homes, Inc. 10.75%, 4/01/13 -0- -0- 112 82,880 Wynn Las Vegas LLC/Corp. 6.625%, 12/01/14 -0- -0- 260 254,800 ----------------- ---------------- -0- 3,154,736 ----------------- ---------------- CONSUMER CYCLICAL - RETAILERS - 0.3% The Bon-Ton Dept Stores, Inc. 10.25%, 3/15/14 -0- -0- 125 116,875 Burlington Coat Factory Warehouse Corp. 11.125%, 4/15/14 -0- -0- 55 51,425 Couche-Tard, Inc. 7.50%, 12/15/13 -0- -0- 144 146,520 GSC Holdings Corp. 8.00%, 10/01/12 -0- -0- 215 223,600 Rite Aid Corp. 6.875%, 8/15/13 -0- -0- 160 132,000 9.25%, 6/01/13 -0- -0- 85 80,750 9.375%, 12/15/15 (d) -0- -0- 10 9,300 9.50%, 6/15/17 (d) -0- -0- 15 14,025 ----------------- ---------------- -0- 774,495 ----------------- ---------------- CONSUMER NON-CYCLICAL - 1.1% Albertson's, Inc. 7.45%, 8/01/29 -0- -0- 285 274,342 Aramark Corp. 8.50%, 2/01/15 -0- -0- 105 107,100 Community Health Systems, Inc. 8.875%, 7/15/15 (d) -0- -0- 191 196,252 DaVita, Inc. 7.25%, 3/15/15 -0- -0- 75 75,187 Dole Food Company, Inc. 8.625%, 5/01/09 -0- -0- 60 60,150 8.875%, 3/15/11 -0- -0- 38 37,050 Elan Finance PLC/Elan Finance Corp. 7.75%, 11/15/11 -0- -0- 265 259,700 Hanger Orthopedic Group, Inc. 10.25%, 6/01/14 -0- -0- 80 82,000 HCA, Inc. 6.375%, 1/15/15 -0- -0- 215 183,288 6.50%, 2/15/16 -0- -0- 155 131,750 6.75%, 7/15/13 -0- -0- 170 153,000 9.625%, 11/15/16 (d)(f) -0- -0- 175 186,813 IASIS Healthcare Corp. 8.75%, 6/15/14 -0- -0- 145 146,813 Select Medical Corp. 7.625%, 2/01/15 -0- -0- 117 104,715 Spectrum Brands, Inc. 7.375%, 2/01/15 -0- -0- 70 53,900 Stater Brothers Holdings 8.125%, 6/15/12 -0- -0- 65 66,219 Tenet Healthcare Corp. 7.375%, 2/01/13 -0- -0- 115 97,462 9.875%, 7/01/14 -0- -0- 80 73,200 Ventas Realty LP/CAP CRP 6.75%, 4/01/17 -0- -0- 84 83,790 Viant Holdings, Inc. 10.125%, 7/15/17 (d) -0- -0- 85 79,050 Visant Corp. 7.625%, 10/01/12 -0- -0- 80 81,400 ----------------- ---------------- -0- 2,533,181 ----------------- ---------------- ENERGY - 0.4% Chesapeake Energy Corp. 7.50%, 9/15/13 -0- -0- 75 77,062 7.75%, 1/15/15 -0- -0- 210 216,037 CIE Gener De Geophysique 7.50%, 5/15/15 -0- -0- 85 87,550 7.75%, 5/15/17 -0- -0- 15 15,450 Hilcorp Energy I LP/Hilcorp Finance Co. 7.75%, 11/01/15 (d) -0- -0- 55 53,763 PetroHawk Energy Corp. Series WI 9.125%, 7/15/13 -0- -0- 107 112,885 Range Resources Corp. 7.50%, 5/15/16 -0- -0- 110 112,200 Tesoro Corp. 6.25%, 11/01/12 -0- -0- 140 140,350 6.50%, 6/01/17 (d) -0- -0- 100 99,250 ----------------- ---------------- -0- 914,547 ----------------- ---------------- OTHER INDUSTRIAL - 0.1% RBS Global, Inc. and Rexnord Corp. 9.50%, 8/01/14 -0- -0- 85 87,975 11.75%, 8/01/16 -0- -0- 60 63,900 Sensus Metering Systems, Inc. 8.625%, 12/15/13 -0- -0- 125 121,250 ----------------- ---------------- -0- 273,125 ----------------- ---------------- SERVICES - 0.1% Realogy Corp. 10.50%, 4/15/14 (d) -0- -0- 100 85,250 West Corp. 9.50%, 10/15/14 -0- -0- 40 41,300 ----------------- ---------------- -0- 126,550 ----------------- ---------------- TECHNOLOGY - 0.7% Amkor Technology, Inc. 9.25%, 6/01/16 -0- -0- 180 181,800 Avago Technologies Finance 10.125%, 12/01/13 -0- -0- 110 118,250 CA, Inc. 4.75%, 12/01/09 (d) -0- -0- 110 109,752 Flextronics International Ltd. 6.50%, 5/15/13 -0- -0- 175 167,125 Freescale Semiconductor, Inc. 8.875%, 12/15/14 -0- -0- 290 279,850 10.125%, 12/15/16 -0- -0- 80 74,400
AllianceBernstein AllianceBernstein Variable Variable Products AllianceBernstein Products Series Fund U.S. Variable Products Series Fund AllianceBernstein Government/High Series Fund Global Dollar Variable Products Grade Securities U.S. Government/High Government Series Fund Portfolio Grade Securities Portfolio Global Dollar Principal Portfolio Principal Government Portfolio Amount (000) (U.S. $ Value) Amount (000) (U.S. $ Value) ---------------------------------------- ---------------------------------------- Iron Mountain, Inc. 6.625%, 1/01/16 US$ -0- $ -0- US$ -0- $ -0- Nortel Networks Ltd. 10.125%, 7/15/13 (d) -0- -0- -0- -0- NXP BV / NXP Funding LLC 8.11%, 10/15/13 (b) -0- -0- -0- -0- 9.50%, 10/15/15 -0- -0- -0- -0- Seagate Technology HDD Holding 6.375%, 10/01/11 -0- -0- -0- -0- Sungard Data Systems, Inc. 9.125%, 8/15/13 -0- -0- -0- -0- --------------- ------------ -0- -0- --------------- ------------ TRANSPORTATION - AIRLINES - 0.1% AMR Corp. 9.00%, 8/01/12 -0- -0- -0- -0- Continental Airlines, Inc. 8.75%, 12/01/11 -0- -0- -0- -0- Series RJO3 7.875%, 7/02/18 -0- -0- -0- -0- --------------- ------------ -0- -0- --------------- ------------ TRANSPORTATION - SERVICES - 0.2% Avis Budget Car Rental 7.75%, 5/15/16 -0- -0- -0- -0- Hertz Corp. 8.875%, 1/01/14 -0- -0- -0- -0- 10.50%, 1/01/16 -0- -0- -0- -0- --------------- ------------ -0- -0- --------------- ------------ 153,461 -0- --------------- ------------ UTILITY - 1.9% ELECTRIC - 1.4% The AES Corp. 7.75%, 3/01/14 -0- -0- -0- -0- 8.75%, 5/15/13 (d) -0- -0- -0- -0- Allegheny Energy Supply 7.80%, 3/15/11 -0- -0- -0- -0- 8.25%, 4/15/12 (d) -0- -0- -0- -0- Aramark Corp. 8.50%, 4/15/11 -0- -0- -0- -0- Dynegy Holdings, Inc. 7.75%, 6/01/19 (d) -0- -0- -0- -0- 8.375%, 5/01/16 -0- -0- -0- -0- Dynegy-Roseton Danskammer Series B 7.67%, 11/08/16 -0- -0- -0- -0- Edison Mission Energy 7.00%, 5/15/17 (d) -0- -0- -0- -0- 7.50%, 6/15/13 -0- -0- -0- -0- 7.75%, 6/15/16 -0- -0- -0- -0- Mirant Americas Generation LLC 8.50%, 10/01/21 -0- -0- -0- -0- NRG Energy, Inc. 7.25%, 2/01/14 -0- -0- -0- -0- 7.375%, 2/01/16 - 1/15/17 -0- -0- -0- -0- Reliant Energy, Inc. 7.625%, 6/15/14 -0- -0- -0- -0- 7.875%, 6/15/17 -0- -0- -0- -0- Sierra Pacific Resources 8.625%, 3/15/14 -0- -0- -0- -0- TXU Corp. Series P 5.55%, 11/15/14 -0- -0- -0- -0- Series Q 6.50%, 11/15/24 -0- -0- -0- -0- --------------- ------------ -0- -0- --------------- ------------ NATURAL GAS - 0.5% El Paso Corp. 7.375%, 12/15/12 -0- -0- -0- -0- Enterprise Products Operating LP 8.375%, 8/01/66 (c) -0- -0- -0- -0- Regency Energy Partners 8.375%, 12/15/13 -0- -0- -0- -0- Williams Cos, Inc. 7.625%, 7/15/19 -0- -0- -0- -0- 7.875%, 9/01/21 -0- -0- -0- -0- --------------- ------------ -0- -0- --------------- ------------ -0- -0- --------------- ------------ NON CORPORATE SECTORS - 1.6% DERIVATIVES - RACERS - 0.8% Racers SER 06-6-T 5.296%, 7/01/08 (b)(d) -0- -0- -0- -0- --------------- ------------ Derivatives - Total Return Swaps - 0.8% High Yield Total Return Trust 2007-1 5.30%, 7/01/08 (b)(d) -0- -0- -0- -0- --------------- ------------ -0- -0- --------------- ------------ FINANCIAL INSTITUTIONS - 0.2% FINANCE - 0.1% Residential Capital LLC 7.375%, 6/30/10 -0- -0- -0- -0- 7.875%, 6/30/15 -0- -0- -0- -0- --------------- ------------ -0- -0- --------------- ------------ INSURANCE - 0.1% Crum & Forster Holdings Corp. 7.75%, 5/01/17 -0- -0- -0- -0- Liberty Mutual Group, Inc. 7.80%, 3/15/37 (d) -0- -0- -0- -0- --------------- ------------ -0- -0- --------------- ------------ -0- -0- --------------- ------------ TOTAL CORPORATES - NON-INVESTMENT GRADES (cost $34,259,361) 153,461 -0- --------------- ------------ CORPORATES - INVESTMENT GRADES - 11.2% INDUSTRIAL - 6.0% BASIC - 0.6% The Dow Chemical Co. 7.375%, 11/01/29 20 21,885 -0- -0- International Paper Co. 5.30%, 4/01/15 190 183,435 -0- -0- Lubrizol Corp. 4.625%, 10/01/09 120 119,020 -0- -0- Southern Copper Corp. 7.50%, 7/27/35 195 211,714 -0- -0- United States Steel Corp. 6.65%, 6/01/37 239 220,491 -0- -0- Westvaco Corp. 8.20%, 1/15/30 50 52,673 -0- -0- Weyerhaeuser Co. 5.95%, 11/01/08 175 175,876 -0- -0- 7.375%, 3/15/32 230 230,774 -0- -0- --------------- ------------ 1,215,868 -0- --------------- ------------ CAPITAL GOODS - 0.2% Hutchison Whampoa International, Ltd. 7.45%, 11/24/33 (d) 185 208,000 -0- -0-
AllianceBernstein AllianceBernstein AllianceBernstein Variable Products AllianceBernstein Variable Products Variable Products Series Fund Variable Products Series Fund Series Fund High Yield Series Fund Americas Government Americas Portfolio High Yield Income Portfolio Government Principal Portfolio Principal Income Portfolio Amount (000) (U.S. $ Value) Amount (000) (U.S. $ Value) ---------------------------------------- ---------------------------------------- Iron Mountain, Inc. 6.625%, 1/01/16 US$ 145 $ 135,575 US$ -0- $ -0- Nortel Networks Ltd. 10.125%, 7/15/13 (d) 125 128,594 -0- -0- NXP BV / NXP Funding LLC 8.11%, 10/15/13 (b) 90 83,587 -0- -0- 9.50%, 10/15/15 40 37,300 -0- -0- Seagate Technology HDD Holding 6.375%, 10/01/11 119 116,918 -0- -0- Sungard Data Systems, Inc. 9.125%, 8/15/13 210 218,400 -0- -0- ------------ ------------- 1,651,551 -0- ------------ ------------- TRANSPORTATION - AIRLINES - 0.1% AMR Corp. 9.00%, 8/01/12 131 132,965 -0- -0- Continental Airlines, Inc. 8.75%, 12/01/11 145 139,200 -0- -0- Series RJO3 7.875%, 7/02/18 44 43,233 -0- -0- ------------ ------------- 315,398 -0- ------------ ------------- TRANSPORTATION - SERVICES - 0.2% Avis Budget Car Rental 7.75%, 5/15/16 145 142,100 -0- -0- Hertz Corp. 8.875%, 1/01/14 105 108,150 -0- -0- 10.50%, 1/01/16 100 108,000 -0- -0- ------------ ------------- 358,250 -0- ------------ ------------- 24,611,320 -0- ------------ ------------- UTILITY - 1.9% ELECTRIC - 1.4% The AES Corp. 7.75%, 3/01/14 250 253,750 -0- -0- 8.75%, 5/15/13 (d) 55 57,544 -0- -0- Allegheny Energy Supply 7.80%, 3/15/11 140 147,000 -0- -0- 8.25%, 4/15/12 (d) 175 187,688 -0- -0- Aramark Corp. 8.50%, 4/15/11 105 112,761 -0- -0- Dynegy Holdings, Inc. 7.75%, 6/01/19 (d) 105 100,406 -0- -0- 8.375%, 5/01/16 205 206,025 -0- -0- Dynegy-Roseton Danskammer Series B 7.67%, 11/08/16 195 195,975 -0- -0- Edison Mission Energy 7.00%, 5/15/17 (d) 255 251,175 -0- -0- 7.50%, 6/15/13 200 205,000 -0- -0- 7.75%, 6/15/16 80 82,800 -0- -0- Mirant Americas Generation LLC 8.50%, 10/01/21 275 261,937 -0- -0- NRG Energy, Inc. 7.25%, 2/01/14 45 45,112 -0- -0- 7.375%, 2/01/16 - 1/15/17 455 455,512 -0- -0- Reliant Energy, Inc. 7.625%, 6/15/14 120 120,900 -0- -0- 7.875%, 6/15/17 155 155,969 -0- -0- Sierra Pacific Resources 8.625%, 3/15/14 80 84,682 -0- -0- TXU Corp. Series P 5.55%, 11/15/14 185 149,204 -0- -0- Series Q 6.50%, 11/15/24 234 187,551 -0- -0- ------------ ------------- 3,260,991 -0- ------------ ------------- NATURAL GAS - 0.5% El Paso Corp. 7.375%, 12/15/12 145 149,640 -0- -0- Enterprise Products Operating LP 8.375%, 8/01/66 (c) 305 313,464 -0- -0- Regency Energy Partners 8.375%, 12/15/13 50 52,375 -0- -0- Williams Cos, Inc. 7.625%, 7/15/19 207 221,749 -0- -0- 7.875%, 9/01/21 255 277,313 -0- -0- ------------ ------------- 1,014,541 -0- ------------ ------------- 4,275,532 -0- ------------ ------------- NON CORPORATE SECTORS - 1.6% DERIVATIVES - RACERS - 0.8% Racers SER 06-6-T 5.296%, 7/01/08 (b)(d) 1,950 1,862,420 -0- -0- ------------ ------------- Derivatives - Total Return Swaps - 0.8% High Yield Total Return Trust 2007-1 5.30%, 7/01/08 (b)(d) 1,950 1,895,716 -0- -0- ------------ ------------- 3,758,136 -0- ------------ ------------- FINANCIAL INSTITUTIONS - 0.2% FINANCE - 0.1% Residential Capital LLC 7.375%, 6/30/10 175 145,250 -0- -0- 7.875%, 6/30/15 140 113,050 -0- -0- ------------ ------------- 258,300 -0- ------------ ------------- INSURANCE - 0.1% Crum & Forster Holdings Corp. 7.75%, 5/01/17 95 90,250 -0- -0- Liberty Mutual Group, Inc. 7.80%, 3/15/37 (d) 80 74,235 -0- -0- ------------ ------------- 164,485 -0- ------------ ------------- 422,785 -0- ------------ ------------- TOTAL CORPORATES - NON-INVESTMENT GRADES (cost $34,259,361) 33,067,773 -0- ------------ ------------- CORPORATES - INVESTMENT GRADES - 11.2% INDUSTRIAL - 6.0% BASIC - 0.6% The Dow Chemical Co. 7.375%, 11/01/29 -0- -0- -0- -0- International Paper Co. 5.30%, 4/01/15 -0- -0- -0- -0- Lubrizol Corp. 4.625%, 10/01/09 -0- -0- -0- -0- Southern Copper Corp. 7.50%, 7/27/35 -0- -0- -0- -0- United States Steel Corp. 6.65%, 6/01/37 -0- -0- -0- -0- Westvaco Corp. 8.20%, 1/15/30 -0- -0- -0- -0- Weyerhaeuser Co. 5.95%, 11/01/08 -0- -0- -0- -0- 7.375%, 3/15/32 220 220,741 -0- -0- ------------ ------------- 220,741 -0- ------------ ------------- CAPITAL GOODS - 0.2% Hutchison Whampoa International, Ltd. 7.45%, 11/24/33 (d) -0- -0- -0- -0-
Pro Forma Pro Forma AllianceBernstein AllianceBernstein AllianceBernstein Variable Products AllianceBernstein Variable Products Variable Products Series Fund Variable Products Series Fund U.S. Series Fund U.S. Global Bond Series Fund Government/High Government/High Portfolio Global Bond Grade Securities Grade Securities Principal Portfolio Portfolio Principal Portfolio Amount (000) (U.S. $ Value) Amount (000) (U.S. $ Value) ---------------------------------------- ---------------------------------------- Iron Mountain, Inc. 6.625%, 1/01/16 US$ -0- $ -0- US$ 145 $ 135,575 Nortel Networks Ltd. 10.125%, 7/15/13 (d) -0- -0- 125 128,594 NXP BV / NXP Funding LLC 8.11%, 10/15/13 (b) -0- -0- 90 83,587 9.50%, 10/15/15 -0- -0- 40 37,300 Seagate Technology HDD Holding 6.375%, 10/01/11 -0- -0- 119 116,918 Sungard Data Systems, Inc. 9.125%, 8/15/13 -0- -0- 210 218,400 ---------- ----------------- -0- 1,651,551 ---------- ----------------- TRANSPORTATION - AIRLINES - 0.1% AMR Corp. 9.00%, 8/01/12 -0- -0- 131 132,965 Continental Airlines, Inc. 8.75%, 12/01/11 -0- -0- 145 139,200 Series RJO3 7.875%, 7/02/18 -0- -0- 44 43,233 ---------- ----------------- -0- 315,398 ---------- ----------------- TRANSPORTATION - SERVICES - 0.2% Avis Budget Car Rental 7.75%, 5/15/16 -0- -0- 145 142,100 Hertz Corp. 8.875%, 1/01/14 -0- -0- 105 108,150 10.50%, 1/01/16 -0- -0- 100 108,000 ---------- ----------------- -0- 358,250 ---------- ----------------- -0- 24,764,781 ---------- ----------------- UTILITY - 1.9% ELECTRIC - 1.4% The AES Corp. 7.75%, 3/01/14 -0- -0- 250 253,750 8.75%, 5/15/13 (d) -0- -0- 55 57,544 Allegheny Energy Supply 7.80%, 3/15/11 -0- -0- 140 147,000 8.25%, 4/15/12 (d) -0- -0- 175 187,688 Aramark Corp. 8.50%, 4/15/11 -0- -0- 105 112,761 Dynegy Holdings, Inc. 7.75%, 6/01/19 (d) -0- -0- 105 100,406 8.375%, 5/01/16 -0- -0- 205 206,025 Dynegy-Roseton Danskammer Series B 7.67%, 11/08/16 -0- -0- 195 195,975 Edison Mission Energy 7.00%, 5/15/17 (d) -0- -0- 255 251,175 7.50%, 6/15/13 -0- -0- 200 205,000 7.75%, 6/15/16 -0- -0- 80 82,800 Mirant Americas Generation LLC 8.50%, 10/01/21 -0- -0- 275 261,937 NRG Energy, Inc. 7.25%, 2/01/14 -0- -0- 45 45,112 7.375%, 2/01/16 - 1/15/17 -0- -0- 455 455,512 Reliant Energy, Inc. 7.625%, 6/15/14 -0- -0- 120 120,900 7.875%, 6/15/17 -0- -0- 155 155,969 Sierra Pacific Resources 8.625%, 3/15/14 -0- -0- 80 84,682 TXU Corp. Series P 5.55%, 11/15/14 -0- -0- 185 149,204 Series Q 6.50%, 11/15/24 -0- -0- 234 187,551 ---------- ----------------- -0- 3,260,991 ---------- ----------------- NATURAL GAS - 0.5% El Paso Corp. 7.375%, 12/15/12 -0- -0- 145 149,640 Enterprise Products Operating LP 8.375%, 8/01/66 (c) -0- -0- 305 313,464 Regency Energy Partners 8.375%, 12/15/13 -0- -0- 50 52,375 Williams Cos, Inc. 7.625%, 7/15/19 -0- -0- 207 221,749 7.875%, 9/01/21 -0- -0- 255 277,313 ---------- ----------------- -0- 1,014,541 ---------- ----------------- -0- 4,275,532 ---------- ----------------- NON CORPORATE SECTORS - 1.6% DERIVATIVES - RACERS - 0.8% Racers SER 06-6-T 5.296%, 7/01/08 (b)(d) -0- -0- 1,950 1,862,420 ---------- ----------------- Derivatives - Total Return Swaps - 0.8% High Yield Total Return Trust 2007-1 5.30%, 7/01/08 (b)(d) -0- -0- 1,950 1,895,716 ---------- ----------------- -0- 3,758,136 ---------- ----------------- FINANCIAL INSTITUTIONS - 0.2% FINANCE - 0.1% Residential Capital LLC 7.375%, 6/30/10 -0- -0- 175 145,250 7.875%, 6/30/15 -0- -0- 140 113,050 ---------- ----------------- -0- 258,300 ---------- ----------------- INSURANCE - 0.1% Crum & Forster Holdings Corp. 7.75%, 5/01/17 -0- -0- 95 90,250 Liberty Mutual Group, Inc. 7.80%, 3/15/37 (d) -0- -0- 80 74,235 ---------- ----------------- -0- 164,485 ---------- ----------------- -0- 422,785 ---------- ----------------- TOTAL CORPORATES - NON-INVESTMENT GRADES (cost $34,259,361) -0- 33,221,234 ---------- ----------------- CORPORATES - INVESTMENT GRADES - 11.2% INDUSTRIAL - 6.0% BASIC - 0.6% The Dow Chemical Co. 7.375%, 11/01/29 -0- -0- 20 21,885 International Paper Co. 5.30%, 4/01/15 -0- -0- 190 183,435 Lubrizol Corp. 4.625%, 10/01/09 -0- -0- 120 119,020 Southern Copper Corp. 7.50%, 7/27/35 -0- -0- 195 211,714 United States Steel Corp. 6.65%, 6/01/37 -0- -0- 239 220,491 Westvaco Corp. 8.20%, 1/15/30 -0- -0- 50 52,673 Weyerhaeuser Co. 5.95%, 11/01/08 -0- -0- 175 175,876 7.375%, 3/15/32 -0- -0- 450 451,515 ---------- ----------------- -0- 1,436,609 ---------- ----------------- CAPITAL GOODS - 0.2% Hutchison Whampoa International, Ltd. 7.45%, 11/24/33 (d) -0- -0- 185 208,000
AllianceBernstein AllianceBernstein Variable Products Variable Products Series Fund AllianceBernstein Series Fund AllianceBernstein U.S. Government/High Variable Products Global Dollar Variable Products Grade Securities Portfolio Series Fund Government Portfolio Series Fund Principal U.S. Government/High Principal Global Dollar Amount Grade Securities Portfolio Amount Government Portfolio (000) (U.S. $ Value) (000) (U.S. $ Value) ------------------------ --------------------------- ------------------- ------------------- Tyco International Group, SA 6.00%, 11/15/13 US$ 155 $ 156,460 US$ -0- $ -0- Waste Management, Inc. 6.875%, 5/15/09 205 211,890 -0- -0- ------------------ -------------- 576,350 -0- ------------------ -------------- COMMUNICATIONS - MEDIA - 0.9% British Sky Broadcasting Group PLC 6.875%, 2/23/09 100 102,330 -0- -0- BSKYB Finance UK PLC 5.625%, 10/15/15 (d) 170 163,582 -0- -0- Comcast Cable Communications Holdings, Inc. 9.455%, 11/15/22 125 158,962 -0- -0- Comcast Cable Communications LLC 6.875%, 6/15/09 250 256,867 -0- -0- Comcast Corp. 5.30%, 1/15/14 155 150,485 -0- -0- 5.50%, 3/15/11 185 185,356 -0- -0- News America, Inc. 6.55%, 3/15/33 100 98,590 -0- -0- RR Donnelley & Sons Co. 4.95%, 4/01/14 65 61,304 -0- -0- 5.50%, 5/15/15 185 179,377 -0- -0- TCI Communications, Inc. 7.875%, 2/15/26 210 231,343 -0- -0- Time Warner Entertainment Co. 8.375%, 3/15/23 235 272,066 -0- -0- WPP Finance Corp. 5.875%, 6/15/14 120 123,013 -0- -0- ------------------ -------------- 1,983,275 -0- ------------------ -------------- COMMUNICATIONS - TELECOMMUNICATIONS - 2.0% America Movil SAB de CV 5.75%, 1/15/15 230 228,776 -0- -0- AT&T Corp. 8.00%, 11/15/31 20 24,334 -0- -0- British Telecommunications PLC 8.625%, 12/15/10 310 341,293 -0- -0- Embarq Corp. 6.738%, 6/01/13 20 20,795 -0- -0- 7.082%, 6/01/16 355 368,025 -0- -0- New Cingular Wireless Services, Inc. 7.875%, 3/01/11 180 194,762 -0- -0- 8.75%, 3/01/31 105 132,935 -0- -0- Pacific Bell 6.625%, 10/15/34 280 274,096 -0- -0- Qwest Corp. 6.875%, 9/15/33 -0- -0- -0- -0- 7.50%, 10/01/14 225 234,000 -0- -0- 8.875%, 3/15/12 200 218,250 -0- -0- Sprint Capital Corp. 6.875%, 11/15/28 235 226,798 -0- -0- 8.375%, 3/15/12 365 401,878 -0- -0- Telecom Italia Capital SA 4.00%, 11/15/08 - 1/15/10 500 488,286 -0- -0- 6.375%, 11/15/33 40 38,604 -0- -0- Telefonos De Mexico SA 5.50%, 1/27/15 235 230,153 -0- -0- US Cellular Corp. 6.70%, 12/15/33 250 230,162 -0- -0- Verizon Communications, Inc. 4.90%, 9/15/15 115 109,543 -0- -0- Verizon New Jersey, Inc. Series A 5.875%, 1/17/12 170 172,928 -0- -0- Vodafone Group PLC 5.50%, 6/15/11 200 200,532 -0- -0- ------------------ -------------- 4,136,150 -0- ------------------ -------------- CONSUMER CYCLICAL - AUTOMOTIVE - 0.0% DaimlerChrysler North America 4.875%, 6/15/10 110 108,752 -0- -0- ------------------ -------------- CONSUMER CYCLICAL - OTHER - 0.3% Starwood Hotels & Resorts Worldwide, Inc. 7.375%, 11/15/15 (a) 179 185,219 -0- -0- 7.875%, 5/01/12 187 199,557 -0- -0- Toll Brothers Finance Corp. 5.15%, 5/15/15 40 34,258 -0- -0- 6.875%, 11/15/12 95 91,971 -0- -0- ------------------ -------------- 511,005 -0- ------------------ -------------- CONSUMER CYCLICAL - RETAILERS - 0.2% Ltd. Brands, Inc. 7.60%, 7/15/37 230 231,591 -0- -0- Wal-Mart Stores, Inc. 4.55%, 5/01/13 (a) -0- -0- -0- -0- ------------------ -------------- 231,591 -0- ------------------ -------------- CONSUMER NON-CYCLICAL - 1.3% Altria Group, Inc. 7.75%, 1/15/27 155 190,429 -0- -0- Bunge Ltd Finance Corp. 5.10%, 7/15/15 71 66,125 -0- -0- Cadbury Schweppes US Finance LLC 5.125%, 10/01/13 (d) 245 234,089 -0- -0- ConAgra Foods, Inc. 7.875%, 9/15/10 102 109,821 -0- -0- Fisher Scientific International, Inc. 6.125%, 7/01/15 230 225,804 -0- -0- 6.75%, 8/15/14 45 45,313 -0- -0- Fortune Brands, Inc. 5.125%, 1/15/11 115 114,010 -0- -0- Kraft Foods, Inc. 4.125%, 11/12/09 415 407,821 -0- -0- 5.25%, 10/01/13 220 215,894 -0- -0- The Kroger Co. 6.80%, 12/15/18 75 78,401 -0- -0- Pfizer, Inc. Series INTL 1.80%, 2/22/16 (a) JPY -0- -0- JPY -0- -0- Reynolds American, Inc. 7.25%, 6/01/13 US$ -0- -0- US$ -0- -0- 7.625%, 6/01/16 210 223,588 -0- -0- Safeway, Inc. 4.125%, 11/01/08 73 72,441 -0- -0- Tyson Foods, Inc. 6.85%, 4/01/16 220 226,714 -0- -0- Wyeth 5.50%, 2/01/14 141 140,211 -0- -0- ------------------ -------------- 2,350,661 -0- ------------------ -------------- ENERGY - 0.2% Amerada Hess Corp. 7.875%, 10/01/29 165 189,654 -0- -0- Valero Energy Corp. 6.875%, 4/15/12 180 189,674 -0- -0- ------------------ -------------- 379,328 -0- ------------------ --------------
AllianceBernstein AllianceBernstein Variable Products Variable Products Series Fund AllianceBernstein Series Fund AllianceBernstein High Yield Variable Products Americas Government Variable Products Portfolio Series Fund Income Portfolio Series Fund Principal High Yield Principal Americas Government Amount Portfolio Amount Income Portfolio (000) (U.S. $ Value) (000) (U.S. $ Value) ----------------- ----------------- -------------------- ------------------ Tyco International Group, SA 6.00%, 11/15/13 US$ -0- $ -0- US$ -0- $ -0- Waste Management, Inc. 6.875%, 5/15/09 -0- -0- -0- -0- --------------- -------------- -0- -0- --------------- -------------- COMMUNICATIONS - MEDIA - 0.9% British Sky Broadcasting Group PLC 6.875%, 2/23/09 -0- -0- -0- -0- BSKYB Finance UK PLC 5.625%, 10/15/15 (d) -0- -0- -0- -0- Comcast Cable Communications Holdings, Inc. 9.455%, 11/15/22 -0- -0- -0- -0- Comcast Cable Communications LLC 6.875%, 6/15/09 -0- -0- -0- -0- Comcast Corp. 5.30%, 1/15/14 -0- -0- -0- -0- 5.50%, 3/15/11 -0- -0- -0- -0- News America, Inc. 6.55%, 3/15/33 -0- -0- -0- -0- RR Donnelley & Sons Co. 4.95%, 4/01/14 -0- -0- -0- -0- 5.50%, 5/15/15 -0- -0- -0- -0- TCI Communications, Inc. 7.875%, 2/15/26 -0- -0- -0- -0- Time Warner Entertainment Co. 8.375%, 3/15/23 -0- -0- -0- -0- WPP Finance Corp. 5.875%, 6/15/14 -0- -0- -0- -0- --------------- -------------- -0- -0- --------------- -------------- COMMUNICATIONS - TELECOMMUNICATIONS - 2.0% America Movil SAB de CV 5.75%, 1/15/15 -0- -0- -0- -0- AT&T Corp. 8.00%, 11/15/31 -0- -0- -0- -0- British Telecommunications PLC 8.625%, 12/15/10 -0- -0- -0- -0- Embarq Corp. 6.738%, 6/01/13 -0- -0- -0- -0- 7.082%, 6/01/16 -0- -0- -0- -0- New Cingular Wireless Services, Inc. 7.875%, 3/01/11 -0- -0- -0- -0- 8.75%, 3/01/31 -0- -0- -0- -0- Pacific Bell 6.625%, 10/15/34 -0- -0- -0- -0- Qwest Corp. 6.875%, 9/15/33 190 177,650 -0- -0- 7.50%, 10/01/14 -0- -0- -0- -0- 8.875%, 3/15/12 165 180,056 -0- -0- Sprint Capital Corp. 6.875%, 11/15/28 150 144,765 -0- -0- 8.375%, 3/15/12 -0- -0- -0- -0- Telecom Italia Capital SA 4.00%, 11/15/08 - 1/15/10 -0- -0- -0- -0- 6.375%, 11/15/33 -0- -0- -0- -0- Telefonos De Mexico SA 5.50%, 1/27/15 -0- -0- -0- -0- US Cellular Corp. 6.70%, 12/15/33 -0- -0- -0- -0- Verizon Communications, Inc. 4.90%, 9/15/15 -0- -0- -0- -0- Verizon New Jersey, Inc. Series A 5.875%, 1/17/12 -0- -0- -0- -0- Vodafone Group PLC 5.50%, 6/15/11 -0- -0- -0- -0- --------------- -------------- 502,471 -0- --------------- -------------- CONSUMER CYCLICAL - AUTOMOTIVE - 0.0% DaimlerChrysler North America 4.875%, 6/15/10 -0- -0- -0- -0- --------------- -------------- CONSUMER CYCLICAL - OTHER - 0.3% Starwood Hotels & Resorts Worldwide, Inc. 7.375%, 11/15/15 (a) -0- -0- -0- -0- 7.875%, 5/01/12 -0- -0- -0- -0- Toll Brothers Finance Corp. 5.15%, 5/15/15 -0- -0- -0- -0- 6.875%, 11/15/12 -0- -0- -0- -0- --------------- -------------- -0- -0- --------------- -------------- CONSUMER CYCLICAL - RETAILERS - 0.2% Ltd. Brands, Inc. 7.60%, 7/15/37 -0- -0- -0- -0- Wal-Mart Stores, Inc. 4.55%, 5/01/13 (a) -0- -0- -0- -0- --------------- -------------- -0- -0- --------------- -------------- CONSUMER NON-CYCLICAL - 1.3% Altria Group, Inc. 7.75%, 1/15/27 -0- -0- -0- -0- Bunge Ltd Finance Corp. 5.10%, 7/15/15 -0- -0- -0- -0- Cadbury Schweppes US Finance LLC 5.125%, 10/01/13 (d) 105 100,324 -0- -0- ConAgra Foods, Inc. 7.875%, 9/15/10 -0- -0- -0- -0- Fisher Scientific International, Inc. 6.125%, 7/01/15 -0- -0- -0- -0- 6.75%, 8/15/14 -0- -0- -0- -0- Fortune Brands, Inc. 5.125%, 1/15/11 -0- -0- -0- -0- Kraft Foods, Inc. 4.125%, 11/12/09 -0- -0- -0- -0- 5.25%, 10/01/13 -0- -0- -0- -0- The Kroger Co. 6.80%, 12/15/18 -0- -0- -0- -0- Pfizer, Inc. Series INTL 1.80%, 2/22/16 (a) JPY -0- -0- JPY -0- -0- Reynolds American, Inc. 7.25%, 6/01/13 US$ 105 110,849 US$ -0- -0- 7.625%, 6/01/16 185 196,970 -0- -0- Safeway, Inc. 4.125%, 11/01/08 -0- -0- -0- -0- Tyson Foods, Inc. 6.85%, 4/01/16 -0- -0- -0- -0- Wyeth 5.50%, 2/01/14 -0- -0- -0- -0- --------------- -------------- 408,143 -0- --------------- -------------- ENERGY - 0.2% Amerada Hess Corp. 7.875%, 10/01/29 -0- -0- -0- -0- Valero Energy Corp. 6.875%, 4/15/12 -0- -0- -0- -0- --------------- -------------- -0- -0- --------------- --------------
Pro Forma AllianceBernstein AllianceBernstein Pro Forma Variable Products Variable Products AllianceBernstein Series Fund AllianceBernstein Series Fund Variable Products Global Bond Variable Products U.S. Government/High Series Fund Portfolio Series Fund Grade Securities U.S. Government/High Principal Global Bond Portfolio Principal Grade Securities Amount Portfolio Amount Portfolio (000) (U.S. $ Value) (000) (U.S. $ Value) ------------------- ------------------- ----------------------- --------------------- 8.50%, 8/15/10 US$ -0- $ -0- US$ 60 $ 61,650 Tyco International Group, SA 6.00%, 11/15/13 US$ -0- $ -0- US$ 155 $ 156,460 Waste Management, Inc. 6.875%, 5/15/09 -0- -0- 205 211,890 ------------ ------------------ -0- 576,350 ------------ ------------------ COMMUNICATIONS - MEDIA - 0.9% British Sky Broadcasting Group PLC 6.875%, 2/23/09 -0- -0- 100 102,330 BSKYB Finance UK PLC 5.625%, 10/15/15 (d) -0- -0- 170 163,582 Comcast Cable Communications Holdings, Inc. 9.455%, 11/15/22 -0- -0- 125 158,962 Comcast Cable Communications LLC 6.875%, 6/15/09 -0- -0- 250 256,867 Comcast Corp. 5.30%, 1/15/14 -0- -0- 155 150,485 5.50%, 3/15/11 -0- -0- 185 185,356 News America, Inc. 6.55%, 3/15/33 -0- -0- 100 98,590 RR Donnelley & Sons Co. 4.95%, 4/01/14 -0- -0- 65 61,304 5.50%, 5/15/15 -0- -0- 185 179,377 TCI Communications, Inc. 7.875%, 2/15/26 -0- -0- 210 231,343 Time Warner Entertainment Co. 8.375%, 3/15/23 -0- -0- 235 272,066 WPP Finance Corp. 5.875%, 6/15/14 -0- -0- 120 123,013 ------------ ------------------ -0- 1,983,275 ------------ ------------------ COMMUNICATIONS - TELECOMMUNICATIONS - 2.0% America Movil SAB de CV 5.75%, 1/15/15 -0- -0- 230 228,776 AT&T Corp. 8.00%, 11/15/31 -0- -0- 20 24,334 British Telecommunications PLC 8.625%, 12/15/10 -0- -0- 310 341,293 Embarq Corp. 6.738%, 6/01/13 -0- -0- 20 20,795 7.082%, 6/01/16 -0- -0- 355 368,025 New Cingular Wireless Services, Inc. 7.875%, 3/01/11 -0- -0- 180 194,762 8.75%, 3/01/31 -0- -0- 105 132,935 Pacific Bell 6.625%, 10/15/34 -0- -0- 280 274,096 Qwest Corp. 6.875%, 9/15/33 -0- -0- 190 177,650 7.50%, 10/01/14 -0- -0- 225 234,000 8.875%, 3/15/12 -0- -0- 365 398,306 Sprint Capital Corp. 6.875%, 11/15/28 -0- -0- 385 371,563 8.375%, 3/15/12 -0- -0- 365 401,878 Telecom Italia Capital SA 4.00%, 11/15/08 - 1/15/10 -0- -0- 500 488,286 6.375%, 11/15/33 -0- -0- 40 38,604 Telefonos De Mexico SA 5.50%, 1/27/15 -0- -0- 235 230,153 US Cellular Corp. 6.70%, 12/15/33 -0- -0- 250 230,162 Verizon Communications, Inc. 4.90%, 9/15/15 -0- -0- 115 109,543 Verizon New Jersey, Inc. Series A 5.875%, 1/17/12 -0- -0- 170 172,928 Vodafone Group PLC 5.50%, 6/15/11 -0- -0- 200 200,532 ------------ ------------------ -0- 4,638,621 ------------ ------------------ CONSUMER CYCLICAL - AUTOMOTIVE - 0.0% DaimlerChrysler North America 4.875%, 6/15/10 -0- -0- 110 108,752 ------------ ------------------ CONSUMER CYCLICAL - OTHER - 0.3% Starwood Hotels & Resorts Worldwide, Inc. 7.375%, 11/15/15 (a) 200 206,948 379 392,167 7.875%, 5/01/12 -0- -0- 187 199,557 Toll Brothers Finance Corp. 5.15%, 5/15/15 -0- -0- 40 34,258 6.875%, 11/15/12 -0- -0- 95 91,971 ------------ ------------------ 206,948 717,953 ------------ ------------------ CONSUMER CYCLICAL - RETAILERS - 0.2% Ltd. Brands, Inc. 7.60%, 7/15/37 -0- -0- 230 231,591 Wal-Mart Stores, Inc. 4.55%, 5/01/13 (a) 150 144,563 150 144,563 ------------ ------------------ 144,563 376,154 ------------ ------------------ CONSUMER NON-CYCLICAL - 1.3% Altria Group, Inc. 7.75%, 1/15/27 -0- -0- 155 190,429 Bunge Ltd Finance Corp. 5.10%, 7/15/15 -0- -0- 71 66,125 Cadbury Schweppes US Finance LLC 5.125%, 10/01/13 (d) -0- -0- 350 334,413 ConAgra Foods, Inc. 7.875%, 9/15/10 -0- -0- 102 109,821 Fisher Scientific International, Inc. 6.125%, 7/01/15 -0- -0- 230 225,804 6.75%, 8/15/14 -0- -0- 45 45,313 Fortune Brands, Inc. 5.125%, 1/15/11 -0- -0- 115 114,010 Kraft Foods, Inc. 4.125%, 11/12/09 -0- -0- 415 407,821 5.25%, 10/01/13 -0- -0- 220 215,894 The Kroger Co. 6.80%, 12/15/18 -0- -0- 75 78,401 Pfizer, Inc. Series INTL 1.80%, 2/22/16 (a) JPY 20,000 172,992 JPY 20,000 172,992 Reynolds American, Inc. 7.25%, 6/01/13 US$ -0- -0- US$ 105 110,849 7.625%, 6/01/16 -0- -0- 395 420,558 Safeway, Inc. 4.125%, 11/01/08 -0- -0- 73 72,441 Tyson Foods, Inc. 6.85%, 4/01/16 -0- -0- 220 226,714 Wyeth 5.50%, 2/01/14 -0- -0- 141 140,211 ------------ ------------------ 172,992 2,931,796 ------------ ------------------ ENERGY - 0.2% Amerada Hess Corp. 7.875%, 10/01/29 -0- -0- 165 189,654 Valero Energy Corp. 6.875%, 4/15/12 -0- -0- 180 189,674 ------------ ------------------ -0- 379,328 ------------ ------------------
AllianceBernstein AllianceBernstein Variable Variable Products AllianceBernstein Products Series Fund U.S. Variable Products Series Fund AllianceBernstein Government/High Series Fund Global Dollar Variable Products Grade Securities U.S. Government/High Government Series Fund Portfolio Grade Securities Portfolio Global Dollar Principal Portfolio Principal Government Portfolio Amount (000) (U.S. $ Value) Amount (000) (U.S. $ Value) ---------------------------------------- ---------------------------------------- TECHNOLOGY - 0.3% Electronic Data Systems Corp. 7.45%, 10/15/29 US$ 90 $ 91,069 US$ -0- $ -0- Series B 6.50%, 8/01/13 281 283,509 -0- -0- International Business Machines Corp. 4.375%, 6/01/09 90 89,888 -0- -0- Motorola, Inc. 6.50%, 9/01/25 125 121,040 -0- -0- 7.50%, 5/15/25 25 25,948 -0- -0- 7.625%, 11/15/10 22 23,360 -0- -0- Xerox Corp. 7.625%, 6/15/13 40 41,562 -0- -0- --------------- ------------ 676,376 -0- --------------- ------------ 12,169,356 -0- --------------- ------------ FINANCIAL INSTITUTIONS - 3.9% BANKING - 1.3% Barclays Bank PLC 5.75%, 9/14/26 (a) GBP -0- -0- GBP -0- -0- 8.55%, 6/15/11 (c)(d) 365 394,666 US$ -0- -0- Citigroup, Inc. US$ 4.625%, 8/03/10 (a) -0- -0- -0- -0- Huntington National Bank 4.375%, 1/15/10 250 244,860 -0- -0- JPMorgan Chase & Co. 6.75%, 2/01/11 285 299,426 -0- -0- MUFG Capital Finance 1 Ltd. 6.346%, 7/25/16 (c) 105 99,810 -0- -0- National Westminster Bank 6.50%, 9/07/21 (a) GBP -0- -0- GBP -0- -0- RBS Capital Trust III 5.512%, 9/30/14 (c) US$ 335 313,439 US$ -0- -0- Resona Preferred Global Securities 7.191%, 7/30/15 (c)(d) 135 135,475 -0- -0- Royal Bank of Scotland Group PLC 7.648%, 9/30/31 (c) 115 120,321 -0- -0- Suntrust Bank Series CD 5.70%, 6/02/09 (a)(b) -0- -0- -0- -0- UBS Preferred Funding Trust I 8.622%, 10/01/10 (c) 180 195,621 -0- -0- UFJ Finance Aruba AEC 6.75%, 7/15/13 240 248,402 -0- -0- Wachovia Capital Trust III 5.80%, 3/15/11 (c) 180 178,792 -0- -0- Zions Bancorporation 5.50%, 11/16/15 105 100,832 -0- -0- --------------- ------------ 2,331,644 -0- --------------- ------------ BROKERAGE - 0.5% The Bear Stearns Cos, Inc. 5.30%, 10/30/15 100 93,547 -0- -0- 5.55%, 1/22/17 -0- -0- -0- -0- Goldman Sachs Group, Inc. 4.75%, 7/15/13 125 119,308 -0- -0- 5.125%, 1/15/15 105 100,817 -0- -0- Lehman Brothers Holdings, Inc. 5.75%, 1/03/17 -0- -0- -0- -0- 6.00%, 5/03/32 (c) 225 205,932 -0- -0- 6.50%, 7/19/17 75 76,008 -0- -0- Merrill Lynch & Co. Inc 6.11%, 1/29/37 250 235,302 -0- -0- --------------- ------------ 830,914 -0- --------------- ------------ FINANCE - 1.3% Capital One Bank 4.25%, 12/01/08 100 98,851 -0- -0- 6.50%, 6/13/13 140 141,898 -0- -0- Capital One Financial Corp. 5.50%, 6/01/15 42 40,017 -0- -0- CIT Group, Inc. 5.65%, 2/13/17 240 222,980 -0- -0- Countrywide Financial Corp. 6.25%, 5/15/16 115 104,071 -0- -0- Series MTN 5.80%, 6/07/12 261 244,631 -0- -0- Countrywide Home Loans, Inc. 4.00%, 3/22/11 111 99,387 -0- -0- 4.25%, 12/19/07 265 261,933 -0- -0- General Electric Capital Corp. 4.375%, 11/21/11 35 33,980 -0- -0- 6.75%, 3/15/32 20 22,019 -0- -0- HSBC Finance Corp. 7.00%, 5/15/12 115 120,908 -0- -0- iStar Financial, Inc. 5.15%, 3/01/12 145 134,169 -0- -0- Series B 5.95%, 10/15/13 230 215,856 -0- -0- International Lease Finance Corp. 3.50%, 4/01/09 (a) -0- -0- -0- -0- Pershing Road Development Co. LLC 6.021%, 9/01/26 (a)(b)(d) -0- -0- -0- -0- SLM Corp. 4.50%, 7/26/10 -0- -0- -0- -0- 5.125%, 8/27/12 -0- -0- -0- -0- --------------- ------------ 1,740,700 -0- --------------- ------------ INSURANCE - 0.7% The Allstate Corp. 6.125%, 5/15/37 (c) 215 210,799 -0- -0- Assurant, Inc. 5.625%, 2/15/14 70 68,377 -0- -0- Genworth Financial, Inc. 1.60%, 6/20/11 (a) JPY -0- -0- JPY -0- -0- Hartford Financial Services Group, Inc. 6.10%, 10/01/41 US$ 205 196,518 US$ -0- -0- Humana, Inc. 6.30%, 8/01/18 215 214,976 -0- -0- Liberty Mutual Group, Inc. 5.75%, 3/15/14 (d) 145 141,823 -0- -0- WellPoint, Inc. 4.25%, 12/15/09 320 315,215 -0- -0- XL Capital Ltd. 5.25%, 9/15/14 235 225,011 -0- -0- 6.25%, 5/15/27 200 187,749 -0- -0- --------------- ------------ 1,560,468 -0- --------------- ------------ REITS - 0.1% Simon Property Group LP 6.375%, 11/15/07 145 145,061 -0- -0- --------------- ------------ 6,608,787 -0- --------------- ------------ UTILITY - 1.1% ELECTRIC - 0.7% Carolina Power & Light Co. 6.50%, 7/15/12 215 225,504 -0- -0-
AllianceBernstein AllianceBernstein AllianceBernstein Variable Products AllianceBernstein Variable Products Variable Products Series Fund Variable Products Series Fund Series Fund High Yield Series Fund Americas Government Americas Portfolio High Yield Income Portfolio Government Principal Portfolio Principal Income Portfolio Amount (000) (U.S. $ Value) Amount (000) (U.S. $ Value) ---------------------------------------- ---------------------------------------- TECHNOLOGY - 0.3% Electronic Data Systems Corp. 7.45%, 10/15/29 US$ -0- $ -0- US$ -0- $ -0- Series B 6.50%, 8/01/13 -0- -0- -0- -0- International Business Machines Corp. 4.375%, 6/01/09 -0- -0- -0- -0- Motorola, Inc. 6.50%, 9/01/25 -0- -0- -0- -0- 7.50%, 5/15/25 -0- -0- -0- -0- 7.625%, 11/15/10 -0- -0- -0- -0- Xerox Corp. 7.625%, 6/15/13 -0- -0- -0- -0- ------------ ------------- -0- -0- ------------ ------------- 1,131,355 -0- ------------ ------------- FINANCIAL INSTITUTIONS - 3.9% BANKING - 1.3% Barclays Bank PLC 5.75%, 9/14/26 (a) GBP -0- -0- GBP -0- -0- 8.55%, 6/15/11 (c)(d) US$ -0- -0- US$ -0- -0- Citigroup, Inc. 4.625%, 8/03/10 (a) -0- -0- -0- -0- Huntington National Bank 4.375%, 1/15/10 -0- -0- -0- -0- JPMorgan Chase & Co. 6.75%, 2/01/11 -0- -0- -0- -0- MUFG Capital Finance 1 Ltd. 6.346%, 7/25/16 (c) -0- -0- -0- -0- National Westminster Bank 6.50%, 9/07/21 (a) GBP -0- -0- GBP -0- -0- RBS Capital Trust III 5.512%, 9/30/14 (c) US$ -0- -0- US$ -0- -0- Resona Preferred Global Securities 7.191%, 7/30/15 (c)(d) -0- -0- -0- -0- Royal Bank of Scotland Group PLC 7.648%, 9/30/31 (c) -0- -0- -0- -0- Suntrust Bank Series CD 5.70%, 6/02/09 (a)(b) -0- -0- -0- -0- UBS Preferred Funding Trust I 8.622%, 10/01/10 (c) -0- -0- -0- -0- UFJ Finance Aruba AEC 6.75%, 7/15/13 -0- -0- -0- -0- Wachovia Capital Trust III 5.80%, 3/15/11 (c) -0- -0- -0- -0- Zions Bancorporation 5.50%, 11/16/15 -0- -0- -0- -0- ------------ ------------- -0- -0- ------------ ------------- BROKERAGE - 0.5% The Bear Stearns Cos, Inc. 5.30%, 10/30/15 -0- -0- -0- -0- 5.55%, 1/22/17 165 155,755 -0- -0- Goldman Sachs Group, Inc. 4.75%, 7/15/13 -0- -0- -0- -0- 5.125%, 1/15/15 -0- -0- -0- -0- Lehman Brothers Holdings, Inc. 5.75%, 1/03/17 155 148,962 -0- -0- 6.00%, 5/03/32 (c) -0- -0- -0- -0- 6.50%, 7/19/17 -0- -0- -0- -0- Merrill Lynch & Co. Inc 6.11%, 1/29/37 -0- -0- -0- -0- ------------ ------------- 304,717 -0- ------------ ------------- FINANCE - 1.3% Capital One Bank 4.25%, 12/01/08 -0- -0- -0- -0- 6.50%, 6/13/13 -0- -0- -0- -0- Capital One Financial Corp. 5.50%, 6/01/15 -0- -0- -0- -0- CIT Group, Inc. 5.65%, 2/13/17 -0- -0- -0- -0- Countrywide Financial Corp. 6.25%, 5/15/16 74 66,967 -0- -0- Series MTN 5.80%, 6/07/12 38 35,617 -0- -0- Countrywide Home Loans, Inc. 4.00%, 3/22/11 4 3,581 -0- -0- 4.25%, 12/19/07 -0- -0- -0- -0- General Electric Capital Corp. 4.375%, 11/21/11 -0- -0- -0- -0- 6.75%, 3/15/32 -0- -0- -0- -0- HSBC Finance Corp. 7.00%, 5/15/12 -0- -0- -0- -0- iStar Financial, Inc. 5.15%, 3/01/12 -0- -0- -0- -0- Series B 5.95%, 10/15/13 -0- -0- -0- -0- International Lease Finance Corp. 3.50%, 4/01/09 (a) -0- -0- -0- -0- Pershing Road Development Co. LLC 6.021%, 9/01/26 (a)(b)(d) -0- -0- -0- -0- SLM Corp. 4.50%, 7/26/10 90 84,252 -0- -0- 5.125%, 8/27/12 90 81,475 -0- -0- ------------ ------------- 271,892 -0- ------------ ------------- INSURANCE - 0.7% The Allstate Corp. 6.125%, 5/15/37 (c) -0- -0- -0- -0- Assurant, Inc. 5.625%, 2/15/14 -0- -0- -0- -0- Genworth Financial, Inc. 1.60%, 6/20/11 (a) JPY -0- -0- JPY -0- -0- Hartford Financial Services Group, Inc. 6.10%, 10/01/41 US$ -0- -0- US$ -0- -0- Humana, Inc. 6.30%, 8/01/18 -0- -0- -0- -0- Liberty Mutual Group, Inc. 5.75%, 3/15/14 (d) -0- -0- -0- -0- WellPoint, Inc. 4.25%, 12/15/09 -0- -0- -0- -0- XL Capital Ltd. 5.25%, 9/15/14 -0- -0- -0- -0- 6.25%, 5/15/27 -0- -0- -0- -0- ------------ ------------- -0- -0- ------------ ------------- REITS - 0.1% Simon Property Group LP 6.375%, 11/15/07 -0- -0- -0- -0- ------------ ------------- 576,609 -0- ------------ ------------- UTILITY - 1.1% ELECTRIC - 0.7% Carolina Power & Light Co. 6.50%, 7/15/12 -0- -0- -0- -0-
Pro Forma Pro Forma AllianceBernstein AllianceBernstein AllianceBernstein Variable Products AllianceBernstein Variable Products Variable Products Series Fund Variable Products Series Fund U.S. Series Fund U.S. Global Bond Series Fund Government/High Government/High Portfolio Global Bond Grade Securities Grade Securities Principal Portfolio Portfolio Principal Portfolio Amount (000) (U.S. $ Value) Amount (000) (U.S. $ Value) ---------------------------------------- ---------------------------------------- TECHNOLOGY - 0.3% Electronic Data Systems Corp. 7.45%, 10/15/29 US$ -0- $ -0- US$ 90 $ 91,069 Series B 6.50%, 8/01/13 -0- -0- 281 283,509 International Business Machines Corp. 4.375%, 6/01/09 -0- -0- 90 89,888 Motorola, Inc. 6.50%, 9/01/25 -0- -0- 125 121,040 7.50%, 5/15/25 -0- -0- 25 25,948 7.625%, 11/15/10 -0- -0- 22 23,360 Xerox Corp. 7.625%, 6/15/13 -0- -0- 40 41,562 ---------- --------------- -0- 676,376 ---------- --------------- 524,503 13,825,214 ---------- --------------- FINANCIAL INSTITUTIONS - 3.9% BANKING - 1.3% Barclays Bank PLC 5.75%, 9/14/26 (a) GBP 75 146,355 GBP 75 146,355 8.55%, 6/15/11 (c)(d) US$ -0- -0- US$ 365 394,666 Citigroup, Inc. 4.625%, 8/03/10 (a) 107 106,141 107 106,141 Huntington National Bank 4.375%, 1/15/10 -0- -0- 250 244,860 JPMorgan Chase & Co. 6.75%, 2/01/11 -0- -0- 285 299,426 MUFG Capital Finance 1 Ltd. 6.346%, 7/25/16 (c) -0- -0- 105 99,810 National Westminster Bank 6.50%, 9/07/21 (a) GBP 50 104,436 GBP 50 104,436 RBS Capital Trust III 5.512%, 9/30/14 (c) US$ -0- -0- US$ 335 313,439 Resona Preferred Global Securities 7.191%, 7/30/15 (c)(d) -0- -0- 135 135,475 Royal Bank of Scotland Group PLC 7.648%, 9/30/31 (c) -0- -0- 115 120,321 Suntrust Bank Series CD 5.70%, 6/02/09 (a)(b) 250 249,595 250 249,595 UBS Preferred Funding Trust I 8.622%, 10/01/10 (c) -0- -0- 180 195,621 UFJ Finance Aruba AEC 6.75%, 7/15/13 -0- -0- 240 248,402 Wachovia Capital Trust III 5.80%, 3/15/11 (c) -0- -0- 180 178,792 Zions Bancorporation 5.50%, 11/16/15 -0- -0- 105 100,832 ---------- --------------- 606,527 2,938,171 ---------- --------------- BROKERAGE - 0.5% The Bear Stearns Cos, Inc. 5.30%, 10/30/15 -0- -0- 100 93,547 5.55%, 1/22/17 -0- -0- 165 155,755 Goldman Sachs Group, Inc. 4.75%, 7/15/13 -0- -0- 125 119,308 5.125%, 1/15/15 -0- -0- 105 100,817 Lehman Brothers Holdings, Inc. 5.75%, 1/03/17 -0- -0- 155 148,962 6.00%, 5/03/32 (c) -0- -0- 225 205,932 6.50%, 7/19/17 -0- -0- 75 76,008 Merrill Lynch & Co. Inc 6.11%, 1/29/37 -0- -0- 250 235,302 ---------- --------------- -0- 1,135,631 ---------- --------------- FINANCE - 1.3% Capital One Bank 4.25%, 12/01/08 -0- -0- 100 98,851 6.50%, 6/13/13 -0- -0- 140 141,898 Capital One Financial Corp. 5.50%, 6/01/15 -0- -0- 42 40,017 CIT Group, Inc. 5.65%, 2/13/17 -0- -0- 240 222,980 Countrywide Financial Corp. 6.25%, 5/15/16 -0- -0- 189 171,038 Series MTN 5.80%, 6/07/12 -0- -0- 299 280,248 Countrywide Home Loans, Inc. 4.00%, 3/22/11 -0- -0- 115 102,968 4.25%, 12/19/07 -0- -0- 265 261,933 General Electric Capital Corp. 4.375%, 11/21/11 -0- -0- 35 33,980 6.75%, 3/15/32 -0- -0- 20 22,019 HSBC Finance Corp. 7.00%, 5/15/12 -0- -0- 115 120,908 iStar Financial, Inc. 5.15%, 3/01/12 -0- -0- 145 134,169 Series B 5.95%, 10/15/13 -0- -0- 230 215,856 International Lease Finance Corp. 3.50%, 4/01/09 (a) 350 342,777 350 342,777 Pershing Road Development Co. LLC 6.021%, 9/01/26 (a)(b)(d) 651 650,953 651 650,953 SLM Corp. 4.50%, 7/26/10 -0- -0- 90 84,252 5.125%, 8/27/12 -0- -0- 90 81,475 ---------- --------------- 993,730 3,006,322 ---------- --------------- INSURANCE - 0.7% The Allstate Corp. 6.125%, 5/15/37 (c) -0- -0- 215 210,799 Assurant, Inc. 5.625%, 2/15/14 -0- -0- 70 68,377 Genworth Financial, Inc. 1.60%, 6/20/11 (a) JPY 15,000 130,151 JPY 15,000 130,151 Hartford Financial Services Group, Inc. 6.10%, 10/01/41 US$ -0- -0- US$ 205 196,518 Humana, Inc. 6.30%, 8/01/18 -0- -0- 215 214,976 Liberty Mutual Group, Inc. 5.75%, 3/15/14 (d) -0- -0- 145 141,823 WellPoint, Inc. 4.25%, 12/15/09 -0- -0- 320 315,215 XL Capital Ltd. 5.25%, 9/15/14 -0- -0- 235 225,011 6.25%, 5/15/27 -0- -0- 200 187,749 ---------- --------------- 130,151 1,690,619 ---------- --------------- REITS - 0.1% Simon Property Group LP 6.375%, 11/15/07 -0- -0- 145 145,061 ---------- --------------- 1,730,408 8,915,804 ---------- --------------- UTILITY - 1.1% ELECTRIC - 0.7% Carolina Power & Light Co. 6.50%, 7/15/12 -0- -0- 215 225,504
AllianceBernstein AllianceBernstein Variable Variable Products AllianceBernstein Products Series Fund U.S. Variable Products Series Fund AllianceBernstein Government/High Series Fund Global Dollar Variable Products Grade Securities U.S. Government/High Government Series Fund Portfolio Grade Securities Portfolio Global Dollar Principal Portfolio Principal Government Portfolio Amount (000) (U.S. $ Value) Amount (000) (U.S. $ Value) ---------------------------------------- ---------------------------------------- Consumers Energy Co. Series C 4.25%, 4/15/08 US$ 130 $ 129,081 US$ -0- $ -0- Exelon Corp. 6.75%, 5/01/11 95 98,829 -0- -0- FirstEnergy Corp. Series B 6.45%, 11/15/11 95 98,217 -0- -0- Series C 7.375%, 11/15/31 105 114,905 -0- -0- MidAmerican Energy Holdings Co. 5.875%, 10/01/12 135 137,084 -0- -0- Nisource Finance Corp. 7.875%, 11/15/10 110 117,742 -0- -0- Pacific Gas & Electric Co. 4.80%, 3/01/14 215 204,952 -0- -0- Progress Energy, Inc. 7.10%, 3/01/11 73 76,775 -0- -0- Public Service Company of Colorado 7.875%, 10/01/12 100 110,631 -0- -0- TXU Australia Holdings Pty Ltd. 6.15%, 11/15/13 (d) 235 239,421 -0- -0- Wisconsin Energy Corp. 6.25%, 5/15/67 (c) 204 192,327 -0- -0- ------------- ------------ 1,745,468 -0- ------------- ------------ NATURAL GAS - 0.4% Duke Energy Field Services Corp. 7.875%, 8/16/10 70 74,660 -0- -0- Energy Transfer Partners 6.125%, 2/15/17 230 221,969 -0- -0- 6.625%, 10/15/36 245 231,048 -0- -0- Enterprise Products Operating LP Series B 5.60%, 10/15/14 95 93,056 -0- -0- TransCanada Pipelines Ltd. 6.35%, 5/15/67 (c) 235 225,540 -0- -0- ------------- ------------ 846,273 -0- ------------- ------------ 2,591,741 -0- ------------- ------------ NON CORPORATE SECTORS - 0.2% AGENCIES - NOT GOVERNMENT GUARANTEED - 0.2% Gaz Capital For Gazprom 6.212%, 11/22/16 (d) 460 453,238 -0- -0- ------------- ------------ TOTAL CORPORATES - INVESTMENT GRADES (cost $25,611,400) 21,823,122 -0- ------------- ------------ U.S. TREASURIES - 10.6% U.S. TREASURY STRIPS - 3.3% Zero Coupon, 2/15/16 (a) -0- -0- -0- -0- Zero Coupon, 11/15/21 (a) -0- -0- -0- -0- ------------- ------------ -0- -0- ------------- ------------ U.S. TREASURY BONDS - 7.3% 4.50%, 2/15/36 3,545 3,360,827 -0- -0- 4.75%, 2/15/37 (a) -0- -0- -0- -0- 6.25%, 5/15/30 (k) -0- -0- -0- -0- 8.75%, 5/15/17 400 526,812 -0- -0- U.S. TREASURY NOTES 4.125%, 8/15/10 (a) -0- -0- -0- -0- 4.625%, 11/15/16 (a) -0- -0- -0- -0- 4.875%, 5/31/11 1,935 1,985,794 -0- -0- ------------- ------------ 5,873,433 -0- ------------- ------------ TOTAL U.S. TREASURIES (cost $23,535,749) 5,873,433 -0- ------------- ------------ GOVERNMENT-RELATED-SOVEREIGNS-7.5% Bundesrepublik Deutschland Series 03 4.75%, 7/04/34 (a) EUR -0- -0- EUR -0- -0- France Government Bond OAT 3.75%, 4/25/21 (a) -0- -0- -0- -0- Germany (Federal Republic of) Series 97 6.50%, 7/04/27 (a) -0- -0- -0- -0- Government of Australia Series 909 7.50%, 9/15/09 (a) AUD -0- -0- AUD -0- -0- Government of Japan Series 48 2.50%, 12/21/20 (a) JPY -0- -0- JPY -0- -0- Government of Japan Ten Year Bond Series 252 1.00%, 6/20/13 (a) -0- -0- -0- -0- Series 268 1.50%, 3/20/15 (a) -0- -0- -0- -0- Government of Japan Twenty Year Bond Series 41 1.50%, 3/20/19 (a) -0- -0- -0- -0- Government of Sweden Series 1043 5.00%, 1/28/09 (a) SEK -0- -0- SEK -0- -0- Japan Government Ten Year Bond Series 217 1.80%, 12/21/09 (a) JPY -0- -0- JPY -0- -0- Kingdom of Belgium Series 31 5.50%, 3/28/28 (a) EUR -0- -0- EUR -0- -0- Mexican Bonos Series MI10 8.00%, 12/19/13 (a) MXN -0- -0- MXN -0- -0- Netherlands Government Bond 3.75%, 1/15/23 (a) EUR -0- -0- EUR -0- -0- 4.00%, 7/15/16 -0- -0- -0- -0- New Zealand Government Bond Series 708 6.00%, 7/15/08 (a) NZD -0- -0- NZD -0- -0- Singapore Government Bond 3.75%, 9/01/16 (a) SGD -0- -0- SGD -0- -0- Sweden Government Bond Series 1051 3.75%, 8/12/17 SEK -0- -0- SEK -0- -0- United Kingdom Gilt 4.00%, 3/07/09 (a) GBP -0- -0- GBP -0- -0- 7.25%, 12/07/07 (a) -0- -0- -0- -0- ------------- ------------ TOTAL GOVERNMENT-RELATED-SOVEREIGNS (cost $16,613,959) -0- -0- ------------- ------------ COMMERCIAL MORTGAGE-BACKED SECURITIES - 5.6% NON-AGENCY FIXED RATE CMBS - 5.5% Banc of America Commercial Mortgage, Inc. Series 2001-PB1, Class A2 5.787%, 5/11/35 US$ 330 334,713 US$ -0- -0- Series 2004-4, Class A3 4.128%, 7/10/42 410 401,873 -0- -0-
AllianceBernstein AllianceBernstein AllianceBernstein Variable Products AllianceBernstein Variable Products Variable Products Series Fund Variable Products Series Fund Series Fund High Yield Series Fund Americas Government Americas Portfolio High Yield Income Portfolio Government Principal Portfolio Principal Income Portfolio Amount (000) (U.S. $ Value) Amount (000) (U.S. $ Value) ---------------------------------------- ---------------------------------------- Consumers Energy Co. Series C 4.25%, 4/15/08 US$ -0- $ -0- US$ -0- $ -0- Exelon Corp. 6.75%, 5/01/11 -0- -0- -0- -0- FirstEnergy Corp. Series B 6.45%, 11/15/11 -0- -0- -0- -0- Series C 7.375%, 11/15/31 -0- -0- -0- -0- MidAmerican Energy Holdings Co. 5.875%, 10/01/12 -0- -0- -0- -0- Nisource Finance Corp. 7.875%, 11/15/10 -0- -0- -0- -0- Pacific Gas & Electric Co. 4.80%, 3/01/14 -0- -0- -0- -0- Progress Energy, Inc. 7.10%, 3/01/11 -0- -0- -0- -0- Public Service Company of Colorado 7.875%, 10/01/12 -0- -0- -0- -0- TXU Australia Holdings Pty Ltd. 6.15%, 11/15/13 (d) -0- -0- -0- -0- Wisconsin Energy Corp. 6.25%, 5/15/67 (c) -0- -0- -0- -0- ------------- ------------ -0- -0- ------------- ------------ NATURAL GAS - 0.4% Duke Energy Field Services Corp. 7.875%, 8/16/10 -0- -0- -0- -0- Energy Transfer Partners 6.125%, 2/15/17 -0- -0- -0- -0- 6.625%, 10/15/36 -0- -0- -0- -0- Enterprise Products Operating LP Series B 5.60%, 10/15/14 -0- -0- -0- -0- TransCanada Pipelines Ltd. 6.35%, 5/15/67 (c) -0- -0- -0- -0- ------------- ------------ -0- -0- ------------- ------------ -0- -0- ------------- ------------ NON CORPORATE SECTORS - 0.2% AGENCIES - NOT GOVERNMENT GUARANTEED - 0.2% Gaz Capital For Gazprom 6.212%, 11/22/16 (d) -0- -0- -0- -0- ------------- ------------ TOTAL CORPORATES - INVESTMENT GRADES (cost $25,611,400) 1,707,964 -0- ------------- ------------ U.S. TREASURIES - 10.6% U.S. TREASURY STRIPS - 3.3% Zero Coupon, 2/15/16 (a) -0- -0- 2,400 1,638,679 Zero Coupon, 11/15/21 (a) -0- -0- 11,700 5,792,998 ------------- ------------ -0- 7,431,677 ------------- ------------ U.S. TREASURY BONDS - 7.3% 4.50%, 2/15/36 -0- -0- -0- -0- 4.75%, 2/15/37 (a) -0- -0- -0- -0- 6.25%, 5/15/30 (k) -0- -0- 4,850 5,765,437 8.75%, 5/15/17 -0- -0- -0- -0- U.S. TREASURY NOTES 4.125%, 8/15/10 (a) -0- -0- -0- -0- 4.625%, 11/15/16 (a) -0- -0- -0- -0- 4.875%, 5/31/11 -0- -0- -0- -0- ------------- ------------ -0- 5,765,437 ------------- ------------ TOTAL U.S. TREASURIES (cost $23,535,749) -0- 13,197,114 ------------- ------------ GOVERNMENT-RELATED-SOVEREIGNS-7.5% Bundesrepublik Deutschland Series 03 4.75%, 7/04/34 (a) EUR -0- -0- EUR -0- -0- France Government Bond OAT 3.75%, 4/25/21 (a) -0- -0- -0- -0- Germany (Federal Republic of) Series 97 6.50%, 7/04/27 (a) -0- -0- -0- -0- Government of Australia Series 909 7.50%, 9/15/09 (a) AUD -0- -0- AUD -0- -0- Government of Japan Series 48 2.50%, 12/21/20 (a) JPY -0- -0- JPY -0- -0- Government of Japan Ten Year Bond Series 252 1.00%, 6/20/13 (a) -0- -0- -0- -0- Series 268 1.50%, 3/20/15 (a) -0- -0- -0- -0- Government of Japan Twenty Year Bond Series 41 1.50%, 3/20/19 (a) -0- -0- -0- -0- Government of Sweden Series 1043 5.00%, 1/28/09 (a) SEK -0- -0- SEK -0- -0- Japan Government Ten Year Bond Series 217 1.80%, 12/21/09 (a) JPY -0- -0- JPY -0- -0- Kingdom of Belgium Series 31 5.50%, 3/28/28 (a) EUR -0- -0- EUR -0- -0- Mexican Bonos Series MI10 8.00%, 12/19/13 (a) MXN -0- -0- MXN -0- -0- Netherlands Government Bond 3.75%, 1/15/23 (a) EUR -0- -0- EUR -0- -0- 4.00%, 7/15/16 -0- -0- -0- -0- New Zealand Government Bond Series 708 6.00%, 7/15/08 (a) NZD -0- -0- NZD -0- -0- Singapore Government Bond 3.75%, 9/01/16 (a) SGD -0- -0- SGD -0- -0- Sweden Government Bond Series 1051 3.75%, 8/12/17 SEK -0- -0- SEK -0- -0- United Kingdom Gilt 4.00%, 3/07/09 (a) GBP -0- -0- GBP -0- -0- 7.25%, 12/07/07 (a) -0- -0- -0- -0- ------------- ------------ TOTAL GOVERNMENT-RELATED-SOVEREIGNS (cost $16,613,959) -0- -0- ------------- ------------ COMMERCIAL MORTGAGE-BACKED SECURITIES - 5.6% NON-AGENCY FIXED RATE CMBS - 5.5% Banc of America Commercial Mortgage, Inc. Series 2001-PB1, Class A2 5.787%, 5/11/35 US$ -0- -0- US$ -0- -0- Series 2004-4, Class A3 4.128%, 7/10/42 -0- -0- -0- -0-
Pro Forma Pro Forma AllianceBernstein AllianceBernstein AllianceBernstein Variable Products AllianceBernstein Variable Products Variable Products Series Fund Variable Products Series Fund U.S. Series Fund U.S. Global Bond Series Fund Government/High Government/High Portfolio Global Bond Grade Securities Grade Securities Principal Portfolio Portfolio Principal Portfolio Amount (000) (U.S. $ Value) Amount (000) (U.S. $ Value) ---------------------------------------- ---------------------------------------- Consumers Energy Co. Series C 4.25%, 4/15/08 US$ -0- $ -0- US$ 130 $ 129,081 Exelon Corp. 6.75%, 5/01/11 -0- -0- 95 98,829 FirstEnergy Corp. Series B 6.45%, 11/15/11 -0- -0- 95 98,217 Series C 7.375%, 11/15/31 -0- -0- 105 114,905 MidAmerican Energy Holdings Co. 5.875%, 10/01/12 -0- -0- 135 137,084 Nisource Finance Corp. 7.875%, 11/15/10 -0- -0- 110 117,742 Pacific Gas & Electric Co. 4.80%, 3/01/14 -0- -0- 215 204,952 Progress Energy, Inc. 7.10%, 3/01/11 -0- -0- 73 76,775 Public Service Company of Colorado 7.875%, 10/01/12 -0- -0- 100 110,631 TXU Australia Holdings Pty Ltd. 6.15%, 11/15/13 (d) -0- -0- 235 239,421 Wisconsin Energy Corp. 6.25%, 5/15/67 (c) -0- -0- 204 192,327 ------------- ------------ -0- 1,745,468 ------------- ------------ NATURAL GAS - 0.4% Duke Energy Field Services Corp. 7.875%, 8/16/10 -0- -0- 70 74,660 Energy Transfer Partners 6.125%, 2/15/17 -0- -0- 230 221,969 6.625%, 10/15/36 -0- -0- 245 231,048 Enterprise Products Operating LP Series B 5.60%, 10/15/14 -0- -0- 95 93,056 TransCanada Pipelines Ltd. 6.35%, 5/15/67 (c) -0- -0- 235 225,540 ------------- ------------ -0- 846,273 ------------- ------------ -0- 2,591,741 ------------- ------------ NON CORPORATE SECTORS - 0.2% AGENCIES - NOT GOVERNMENT GUARANTEED - 0.2% Gaz Capital For Gazprom 6.212%, 11/22/16 (d) -0- -0- 460 453,238 ------------- ------------ TOTAL CORPORATES - INVESTMENT GRADES (cost $25,611,400) 2,254,911 25,785,997 ------------- ------------ U.S. TREASURIES - 10.6% U.S. TREASURY STRIPS - 3.3% Zero Coupon, 2/15/16 (a) -0- -0- 2,400 1,638,679 Zero Coupon, 11/15/21 (a) -0- -0- 11,700 5,792,998 ------------- ------------ -0- 7,431,677 ------------- ------------ U.S. TREASURY BONDS - 7.3% 4.50%, 2/15/36 -0- -0- 3,545 3,360,827 4.75%, 2/15/37 (a) 1,896 1,869,782 1,896 1,869,782 6.25%, 5/15/30 (k) -0- -0- 4,850 5,765,437 8.75%, 5/15/17 -0- -0- 400 526,812 U.S. TREASURY NOTES 4.125%, 8/15/10 (a) 1,483 1,487,866 1,483 1,487,866 4.625%, 11/15/16 (a) 1,822 1,830,968 1,822 1,830,968 4.875%, 5/31/11 -0- -0- 1,935 1,985,794 ------------- ------------ 5,188,616 16,827,486 ------------- ------------ TOTAL U.S. TREASURIES (cost $23,535,749) 5,188,616 24,259,163 ------------- ------------ GOVERNMENT-RELATED-SOVEREIGNS-7.5% Bundesrepublik Deutschland Series 03 4.75%, 7/04/34 (a) EUR 240 349,554 EUR 240 349,554 France Government Bond OAT 3.75%, 4/25/21 (a) 345 452,865 345 452,865 Germany (Federal Republic of) Series 97 6.50%, 7/04/27 (a) 489 866,769 489 866,769 Government of Australia Series 909 7.50%, 9/15/09 (a) AUD 1,150 1,040,170 AUD 1,150 1,040,170 Government of Japan Series 48 2.50%, 12/21/20 (a) JPY 80,000 746,325 JPY 80,000 746,325 Government of Japan Ten Year Bond Series 252 1.00%, 6/20/13 (a) 68,550 588,022 68,550 588,022 Series 268 1.50%, 3/20/15 (a) 98,000 857,261 98,000 857,261 Government of Japan Twenty Year Bond Series 41 1.50%, 3/20/19 (a) 190,000 1,603,783 190,000 1,603,783 Government of Sweden Series 1043 5.00%, 1/28/09 (a) SEK 4,200 660,232 SEK 4,200 660,232 Japan Government Ten Year Bond Series 217 1.80%, 12/21/09 (a) JPY 120,000 1,065,205 JPY 120,000 1,065,205 Kingdom of Belgium Series 31 5.50%, 3/28/28 (a) EUR 700 1,104,095 EUR 700 1,104,095 Mexican Bonos Series MI10 8.00%, 12/19/13 (a) MXN 6,000 553,040 MXN 6,000 553,040 Netherlands Government Bond 3.75%, 1/15/23 (a) EUR 1,055 1,369,684 EUR 1,055 1,369,684 4.00%, 7/15/16 1,875 2,600,493 1,875 2,600,493 New Zealand Government Bond Series 708 6.00%, 7/15/08 (a) NZD 651 489,210 NZD 651 489,210 Singapore Government Bond 3.75%, 9/01/16 (a) SGD 1,379 1,004,892 SGD 1,379 1,004,892 Sweden Government Bond Series 1051 3.75%, 8/12/17 SEK 2,700 400,552 SEK 2,700 400,552 United Kingdom Gilt 4.00%, 3/07/09 (a) GBP 233 469,904 GBP 233 469,904 7.25%, 12/07/07 (a) 528 1,083,148 528 1,083,148 ------------- ------------ TOTAL GOVERNMENT-RELATED-SOVEREIGNS (cost $16,613,959) 17,305,204 17,305,204 ------------- ------------ COMMERCIAL MORTGAGE-BACKED SECURITIES - 5.6% NON-AGENCY FIXED RATE CMBS - 5.5% Banc of America Commercial Mortgage, Inc. Series 2001-PB1, Class A2 5.787%, 5/11/35 US$ -0- -0- US$ 330 334,713 Series 2004-4, Class A3 4.128%, 7/10/42 -0- -0- 410 401,873
AllianceBernstein AllianceBernstein Variable Variable Products AllianceBernstein Products Series Fund U.S. Variable Products Series Fund AllianceBernstein Government/High Series Fund Global Dollar Variable Products Grade Securities U.S. Government/High Government Series Fund Portfolio Grade Securities Portfolio Global Dollar Principal Portfolio Principal Government Portfolio Amount (000) (U.S. $ Value) Amount (000) (U.S. $ Value) ------------------------------------ ---------------------------------------- Series 2004-6, Class A2 4.161%, 12/10/42 US$ 525 $ 513,866 US$ -0- $ -0- Series 2005-6, Class A4 5.353%, 9/10/47 (c) 680 662,663 -0- -0- Bear Stearns Commercial Mortgage Securities, Inc. Series 2005-PWR7, Class A3 5.116%, 2/11/41 (c) 505 493,465 -0- -0- Series 2005-T18, Class A4 4.933%, 2/13/42 (c) 530 511,437 -0- -0- Credit Suisse First Boston Mortgage Securities Corp. Series 2003-CK2, Class A2 3.861%, 3/15/36 326 322,740 -0- -0- Series 2005-C1, Class A4 5.014%, 2/15/38 (c) 450 428,842 -0- -0- GE Capital Commercial Mortgage Corp. Series 2005-C3, Class A3FX 4.863%, 7/10/45 455 449,331 -0- -0- Greenwich Capital Commercial Funding Corp. Series 2003-C1, Class A4 4.111%, 7/05/35 450 425,084 -0- -0- Series 2005-GG3, Class A2 4.305%, 8/10/42 530 522,239 -0- -0- GS Mortgage Securities Corp. II Series 2004-GG2, Class A6 5.396%, 8/10/38 (c) 300 297,321 -0- -0- JPMorgan Chase Commercial Mortgage Securities Corp. Series 2004-C1, Class A2 4.302%, 1/15/38 95 91,816 -0- -0- Series 2005-LDP1, Class A4 5.038%, 3/15/46 (c) 550 532,945 -0- -0- Series 2005-LDP3, Class A2 4.851%, 8/15/42 405 399,263 -0- -0- Series 2005-LDP4, Class A2 4.79%, 10/15/42 465 457,843 -0- -0- Series 2005-LDP5, Class A2 5.198%, 12/15/44 360 357,705 -0- -0- Series 2006-CB14, Class A4 5.481%, 12/12/44 (c) 195 192,640 -0- -0- Series 2006-CB15, Class A4 5.814%, 6/12/43 (c) 290 292,483 -0- -0- LB-UBS Commercial Mortgage Trust Series 2003-C3, Class A4 4.166%, 5/15/32 430 403,727 -0- -0- Series 2004-C4, Class A4 5.295%, 6/15/29 (c) 830 827,177 -0- -0- Series 2004-C8, Class A2 4.201%, 12/15/29 420 411,145 -0- -0- Series 2005-C1, Class A4 4.742%, 2/15/30 365 345,320 -0- -0- Series 2005-C7, Class A4 5.197%, 11/15/30 (c) 340 329,479 -0- -0- Series 2006-C1, Class A4 5.156%, 2/15/31 485 475,086 -0- -0- Series 2006-C6, Class A4 5.372%, 9/15/39 530 518,470 -0- -0- Merrill Lynch Mortgage Trust Series 2005-CKI1, Class A6 5.244%, 11/12/37 (c) 280 273,535 -0- -0- Series 2005-MKB2, Class A2 4.806%, 9/12/42 655 648,289 -0- -0- Merrill Lynch/Countrywide Commercial Mortgage Trust Series 2006-2, Class A4 5.91%, 6/12/46 (c) 145 147,925 -0- -0- Morgan Stanley Capital I Series 2005-T17, Class A5 4.78%, 12/13/41 655 626,172 -0- -0- ------------- ------------ 12,694,594 -0- ------------- ------------ NON-AGENCY ADJUSTABLE RATE CMBS - 0.1% GS Mortgage Securities Corp. II Series 2007-EOP, Class E 6.238%, 3/06/20 (b)(d) 115 112,125 -0- -0- ------------- ------------ TOTAL COMMERCIAL-MORTGAGE BACKED SECURITIES (cost $13,034,556) 12,806,719 -0- ------------- ------------ AGENCY DEBENTURES-3.2% Federal National Mortgage Association - 3.1% Series 2001 5.375%, 11/15/11 (a) -0- -0- -0- -0- Series 2004 4.125%, 4/15/14 (a) -0- -0- -0- -0- ------------- ------------ -0- -0- ------------- ------------ MEXICO-0.1% Pemex Project Funding Master Trust 8.00%, 11/15/11 -0- -0- 250 273,125 ------------- ------------ TOTAL AGENCY DEBENTURES (cost $7,063,578) -0- 273,125 ------------- ------------ INFLATION-LINKED SECURITIES - 2.3% U.S. TREASURY NOTES - 2.0% 1.625%, 1/15/15 (TIPS) (k) -0- -0- -0- -0- 2.00%, 1/15/16 (TIPS) (a) -0- -0- -0- -0- 2.375%, 4/15/11 (TIPS) 1,837 1,848,463 -0- -0- ------------- ------------ 1,848,463 -0- ------------- ------------ CANADA - 0.3% Government of Canada 3.00%, 12/01/36 (a) CAD -0- -0- CAD -0- -0- Province of Ontario 2.00%, 12/01/36 (a) -0- -0- -0- -0- ------------- ------------ -0- -0- ------------- ------------ TOTAL INFLATION-LINKED SECURITIES (cost $5,247,718) 1,848,463 -0- ------------- ------------ GOVERNMENT-RELATED-AGENCIES-1.9% Development Bank of Japan 2.30%, 3/19/26 (a) JPY -0- -0- JPY -0- -0- Japan Fin Corp. Muni Ent Series INTL 1.35%, 11/26/13 (a) -0- -0- -0- -0- Landwirtschaftliche Rentenbank 1.375%, 4/25/13 (a) -0- -0- -0- -0- ------------- ------------ TOTAL GOVERNMENT-RELATED - AGENCIES (cost $4,322,629) -0- -0- ------------- ------------ ASSET-BACKED SECURITIES - 1.8% HOME EQUITY LOANS - FLOATING RATE - 1.2% Asset Backed Funding Certificates Series 2003-WF1, Class A2 5.881%, 12/25/32 (b) US$ 136 136,133 US$ -0- -0- Bear Stearns Asset Backed Securities, Inc. Series 2005-SD1, Class 1A1 5.281%, 4/25/22 (b) 24 22,471 -0- -0-
AllianceBernstein AllianceBernstein AllianceBernstein Variable Products AllianceBernstein Variable Products Variable Products Series Fund Variable Products Series Fund Series Fund High Yield Series Fund Americas Government Americas Portfolio High Yield Income Portfolio Government Principal Portfolio Principal Income Portfolio Amount (000) (U.S. $ Value) Amount (000) (U.S. $ Value) ------------------------------------- ---------------------------------------- Series 2004-6, Class A2 4.161%, 12/10/42 US$ -0- $ -0- US$ -0- $ -0- Series 2005-6, Class A4 5.353%, 9/10/47 (c) -0- -0- -0- -0- Bear Stearns Commercial Mortgage Securities, Inc. Series 2005-PWR7, Class A3 5.116%, 2/11/41 (c) -0- -0- -0- -0- Series 2005-T18, Class A4 4.933%, 2/13/42 (c) -0- -0- -0- -0- Credit Suisse First Boston Mortgage Securities Corp. Series 2003-CK2, Class A2 3.861%, 3/15/36 -0- -0- -0- -0- Series 2005-C1, Class A4 5.014%, 2/15/38 (c) -0- -0- -0- -0- GE Capital Commercial Mortgage Corp. Series 2005-C3, Class A3FX 4.863%, 7/10/45 -0- -0- -0- -0- Greenwich Capital Commercial Funding Corp. Series 2003-C1, Class A4 4.111%, 7/05/35 -0- -0- -0- -0- Series 2005-GG3, Class A2 4.305%, 8/10/42 -0- -0- -0- -0- GS Mortgage Securities Corp. II Series 2004-GG2, Class A6 5.396%, 8/10/38 (c) -0- -0- -0- -0- JPMorgan Chase Commercial Mortgage Securities Corp. Series 2004-C1, Class A2 4.302%, 1/15/38 -0- -0- -0- -0- Series 2005-LDP1, Class A4 5.038%, 3/15/46 (c) -0- -0- -0- -0- Series 2005-LDP3, Class A2 4.851%, 8/15/42 -0- -0- -0- -0- Series 2005-LDP4, Class A2 4.79%, 10/15/42 -0- -0- -0- -0- Series 2005-LDP5, Class A2 5.198%, 12/15/44 -0- -0- -0- -0- Series 2006-CB14, Class A4 5.481%, 12/12/44 (c) -0- -0- -0- -0- Series 2006-CB15, Class A4 5.814%, 6/12/43 (c) -0- -0- -0- -0- LB-UBS Commercial Mortgage Trust Series 2003-C3, Class A4 4.166%, 5/15/32 -0- -0- -0- -0- Series 2004-C4, Class A4 5.295%, 6/15/29 (c) -0- -0- -0- -0- Series 2004-C8, Class A2 4.201%, 12/15/29 -0- -0- -0- -0- Series 2005-C1, Class A4 4.742%, 2/15/30 -0- -0- -0- -0- Series 2005-C7, Class A4 5.197%, 11/15/30 (c) -0- -0- -0- -0- Series 2006-C1, Class A4 5.156%, 2/15/31 -0- -0- -0- -0- Series 2006-C6, Class A4 5.372%, 9/15/39 -0- -0- -0- -0- Merrill Lynch Mortgage Trust Series 2005-CKI1, Class A6 5.244%, 11/12/37 (c) -0- -0- -0- -0- Series 2005-MKB2, Class A2 4.806%, 9/12/42 -0- -0- -0- -0- Merrill Lynch/Countrywide Commercial Mortgage Trust Series 2006-2, Class A4 5.91%, 6/12/46 (c) -0- -0- -0- -0- Morgan Stanley Capital I Series 2005-T17, Class A5 4.78%, 12/13/41 -0- -0- -0- -0- ------------- ------------ -0- -0- ------------- ------------ NON-AGENCY ADJUSTABLE RATE CMBS - 0.1% GS Mortgage Securities Corp. II Series 2007-EOP, Class E 6.238%, 3/06/20 (b)(d) -0- -0- -0- -0- ------------- ------------ TOTAL COMMERCIAL-MORTGAGE BACKED SECURITIES (cost $13,034,556) -0- -0- ------------- ------------ AGENCY DEBENTURES-3.2% Federal National Mortgage Association - 3.1% Series 2001 5.375%, 11/15/11 (a) -0- -0- 5,000 5,153,585 Series 2004 4.125%, 4/15/14 (a) -0- -0- 2,000 1,926,736 ------------- ------------ -0- 7,080,321 ------------- ------------ MEXICO-0.1% Pemex Project Funding Master Trust 8.00%, 11/15/11 -0- -0- -0- -0- ------------- ------------ TOTAL AGENCY DEBENTURES (cost $7,063,578) -0- 7,080,321 ------------- ------------ INFLATION-LINKED SECURITIES - 2.3% U.S. TREASURY NOTES - 2.0% 1.625%, 1/15/15 (TIPS) (k) -0- -0- 1,567 1,498,745 2.00%, 1/15/16 (TIPS) (a) -0- -0- 787 769,422 2.375%, 4/15/11 (TIPS) -0- -0- -0- -0- ------------- ------------ -0- 2,268,167 ------------- ------------ CANADA - 0.3% Government of Canada 3.00%, 12/01/36 (a) CAD -0- -0- CAD 66 80,224 Province of Ontario 2.00%, 12/01/36 (a) -0- -0- 601 547,684 ------------- ------------ -0- 627,908 ------------- ------------ TOTAL INFLATION-LINKED SECURITIES (cost $5,247,718) -0- 2,896,075 ------------- ------------ GOVERNMENT-RELATED-AGENCIES-1.9% Development Bank of Japan 2.30%, 3/19/26 (a) JPY -0- -0- JPY -0- -0- Japan Fin Corp. Muni Ent Series INTL 1.35%, 11/26/13 (a) -0- -0- -0- -0- Landwirtschaftliche Rentenbank 1.375%, 4/25/13 (a) -0- -0- -0- -0- ------------- ------------ TOTAL GOVERNMENT-RELATED - AGENCIES (cost $4,322,629) -0- -0- ------------- ------------ ASSET-BACKED SECURITIES - 1.8% HOME EQUITY LOANS - FLOATING RATE - 1.2% Asset Backed Funding Certificates Series 2003-WF1, Class A2 5.881%, 12/25/32 (b) US$ -0- -0- US$ -0- -0- Bear Stearns Asset Backed Securities, Inc. Series 2005-SD1, Class 1A1 5.281%, 4/25/22 (b) -0- -0- -0- -0-
Pro Forma Pro Forma AllianceBernstein AllianceBernstein AllianceBernstein Variable Products AllianceBernstein Variable Products Variable Products Series Fund Variable Products Series Fund U.S. Series Fund U.S. Global Bond Series Fund Government/High Government/High Portfolio Global Bond Grade Securities Grade Securities Principal Portfolio Portfolio Principal Portfolio Amount (000) (U.S. $ Value) Amount (000) (U.S. $ Value) -------------------------------------- -------------------------------------- Series 2004-6, Class A2 4.161%, 12/10/42 US$ -0- $ -0- US$ 525 $ 513,866 Series 2005-6, Class A4 5.353%, 9/10/47 (c) -0- -0- 680 662,663 Bear Stearns Commercial Mortgage Securities, Inc. Series 2005-PWR7, Class A3 5.116%, 2/11/41 (c) -0- -0- 505 493,465 Series 2005-T18, Class A4 4.933%, 2/13/42 (c) -0- -0- 530 511,437 Credit Suisse First Boston Mortgage Securities Corp. Series 2003-CK2, Class A2 3.861%, 3/15/36 -0- -0- 326 322,740 Series 2005-C1, Class A4 5.014%, 2/15/38 (c) -0- -0- 450 428,842 GE Capital Commercial Mortgage Corp. Series 2005-C3, Class A3FX 4.863%, 7/10/45 -0- -0- 455 449,331 Greenwich Capital Commercial Funding Corp. Series 2003-C1, Class A4 4.111%, 7/05/35 -0- -0- 450 425,084 Series 2005-GG3, Class A2 4.305%, 8/10/42 -0- -0- 530 522,239 GS Mortgage Securities Corp. II Series 2004-GG2, Class A6 5.396%, 8/10/38 (c) -0- -0- 300 297,321 JPMorgan Chase Commercial Mortgage Securities Corp. Series 2004-C1, Class A2 4.302%, 1/15/38 -0- -0- 95 91,816 Series 2005-LDP1, Class A4 5.038%, 3/15/46 (c) -0- -0- 550 532,945 Series 2005-LDP3, Class A2 4.851%, 8/15/42 -0- -0- 405 399,263 Series 2005-LDP4, Class A2 4.79%, 10/15/42 -0- -0- 465 457,843 Series 2005-LDP5, Class A2 5.198%, 12/15/44 -0- -0- 360 357,705 Series 2006-CB14, Class A4 5.481%, 12/12/44 (c) -0- -0- 195 192,640 Series 2006-CB15, Class A4 5.814%, 6/12/43 (c) -0- -0- 290 292,483 LB-UBS Commercial Mortgage Trust Series 2003-C3, Class A4 4.166%, 5/15/32 -0- -0- 430 403,727 Series 2004-C4, Class A4 5.295%, 6/15/29 (c) -0- -0- 830 827,177 Series 2004-C8, Class A2 4.201%, 12/15/29 -0- -0- 420 411,145 Series 2005-C1, Class A4 4.742%, 2/15/30 -0- -0- 365 345,320 Series 2005-C7, Class A4 5.197%, 11/15/30 (c) -0- -0- 340 329,479 Series 2006-C1, Class A4 5.156%, 2/15/31 -0- -0- 485 475,086 Series 2006-C6, Class A4 5.372%, 9/15/39 -0- -0- 530 518,470 Merrill Lynch Mortgage Trust Series 2005-CKI1, Class A6 5.244%, 11/12/37 (c) -0- -0- 280 273,535 Series 2005-MKB2, Class A2 4.806%, 9/12/42 -0- -0- 655 648,289 Merrill Lynch/Countrywide Commercial Mortgage Trust Series 2006-2, Class A4 5.91%, 6/12/46 (c) -0- -0- 145 147,925 Morgan Stanley Capital I Series 2005-T17, Class A5 4.78%, 12/13/41 -0- -0- 655 626,172 ------------- ------------ -0- 12,694,594 ------------- ------------ NON-AGENCY ADJUSTABLE RATE CMBS - 0.1% GS Mortgage Securities Corp. II Series 2007-EOP, Class E 6.238%, 3/06/20 (b)(d) -0- -0- 115 112,125 ------------- ------------ TOTAL COMMERCIAL-MORTGAGE BACKED SECURITIES (cost $13,034,556) -0- 12,806,719 ------------- ------------ AGENCY DEBENTURES-3.2% Federal National Mortgage Association - 3.1% Series 2001 5.375%, 11/15/11 (a) -0- -0- 5,000 5,153,585 Series 2004 4.125%, 4/15/14 (a) -0- -0- 2,000 1,926,736 ------------- ------------ -0- 7,080,321 ------------- ------------ MEXICO-0.1% Pemex Project Funding Master Trust 8.00%, 11/15/11 -0- -0- 250 273,125 ------------- ------------ TOTAL AGENCY DEBENTURES (cost $7,063,578) -0- 7,353,446 ------------- ------------ INFLATION-LINKED SECURITIES - 2.3% U.S. TREASURY NOTES - 2.0% 1.625%, 1/15/15 (TIPS) (k) -0- -0- 1,567 1,498,745 2.00%, 1/15/16 (TIPS) (a) 586 572,450 1,373 1,341,872 2.375%, 4/15/11 (TIPS) -0- -0- 1,837 1,848,463 ------------- ------------ 572,450 4,689,080 ------------- ------------ CANADA - 0.3% Government of Canada 3.00%, 12/01/36 (a) CAD -0- -0- CAD 66 80,224 Province of Ontario 2.00%, 12/01/36 (a) -0- -0- 601 547,684 ------------- ------------ -0- 627,908 ------------- ------------ TOTAL INFLATION-LINKED SECURITIES (cost $5,247,718) 572,450 5,316,988 ------------- ------------ GOVERNMENT-RELATED-AGENCIES-1.9% Development Bank of Japan 2.30%, 3/19/26 (a) JPY 120,000 1,058,721 JPY 120,000 1,058,721 Japan Fin Corp. Muni Ent Series INTL 1.35%, 11/26/13 (a) 147,000 1,278,372 147,000 1,278,372 Landwirtschaftliche Rentenbank 1.375%, 4/25/13 (a) 229,000 1,992,040 229,000 1,992,040 ------------- ------------ TOTAL GOVERNMENT-RELATED - AGENCIES (cost $4,322,629) 4,329,133 4,329,133 ------------- ------------ ASSET-BACKED SECURITIES - 1.8% HOME EQUITY LOANS - FLOATING RATE - 1.2% Asset Backed Funding Certificates Series 2003-WF1, Class A2 5.881%, 12/25/32 (b) US$ -0- -0- US$ 136 136,133 Bear Stearns Asset Backed Securities, Inc. Series 2005-SD1, Class 1A1 5.281%, 4/25/22 (b) -0- -0- 24 22,471
AllianceBernstein AllianceBernstein Variable Variable Products AllianceBernstein Products Series Fund U.S. Variable Products Series Fund AllianceBernstein Government/High Series Fund Global Dollar Variable Products Grade Securities U.S. Government/High Government Series Fund Portfolio Grade Securities Portfolio Global Dollar Principal Portfolio Principal Government Portfolio Amount (000) (U.S. $ Value) Amount (000) (U.S. $ Value) ---------------------------------------- ---------------------------------------- Credit-Based Asset Servicing & Securities, Inc. Series 2005-CB7, Class AF2 5.147%, 11/25/35 (e) US$ 218 $ 216,333 US$ -0- $ -0- GE-WMC Mortgage Securities LLC Series 2005-2, Class A2B 5.301%, 12/25/35 (b) 285 281,751 -0- -0- HFC Home Equity Loan Asset Backed Certificates Series 2005-3, Class A1 5.798%, 1/20/35 (b) 178 174,333 -0- -0- Home Equity Asset Trust Series 2007-2, Class M1 5.935%, 7/25/37 (b) 475 436,805 -0- -0- Indymac Residential Asset Backed Trust Series 2006-D, Class 2A2 5.241%, 11/25/36 (b) 490 484,717 -0- -0- Option One Mortgage Loan Trust Series 2007-2, Class M1 5.491%, 3/25/37 (b) 160 146,853 -0- -0- RAAC Series Series 2006-SP3, Class A1 5.211%, 8/25/36 (b) 119 118,481 -0- -0- Residential Asset Mortgage Products, Inc. Series 2005-RS3, Class AIA2 5.301%, 3/25/35 (b) 108 107,220 -0- -0- Series 2005-RZ1, Class A2 5.331%, 4/25/35 (b) 221 218,818 -0- -0- Saxon Asset Securities Trust Series 2005-4, Class A2B 5.311%, 11/25/37 (b) 171 171,156 -0- -0- Specialty Underwriting & Residential Finance Series 2006-BC1, Class A2A 5.211%, 12/25/36 (b) 96 95,319 -0- -0- Structured Asset Investment Loan Trust Series 2006-1, Class A1 5.211%, 1/25/36 (b) 45 44,446 -0- -0- --------------------- ------------------ 2,654,836 -0- --------------------- ------------------ HOME EQUITY LOANS - FIXED RATE - 0.5% Citifinancial Mortgage Securities, Inc. Series 2003-1, Class AFPT 3.36%, 1/25/33 (e) 116 103,472 -0- -0- Countrywide Asset-Backed Certificates Series 2007-S1, Class A3 5.81%, 11/25/36 (c) 475 435,285 -0- -0- Credit-Based Asset Servicing & Securities, Inc. Series 2003-CB1, Class AF 3.45%, 1/25/33 (e) 252 238,930 -0- -0- Home Equity Mortgage Trust Series 2005-4, Class A3 4.742%, 1/25/36 (e) 157 155,748 -0- -0- Series 2006-1, Class A2 5.30%, 5/25/36 (e) 120 102,151 -0- -0- Residential Funding Mortgage Securities, Inc. Series 2005-HI2, Class A3 4.46%, 5/25/35 157 155,885 -0- -0- --------------------- ------------------ 1,191,471 -0- --------------------- ------------------ AUTOS - FIXED RATE - 0.1% Capital One Prime Auto Receivables Trust Series 2005-1, Class A3 4.32%, 8/15/09 234 232,927 -0- -0- --------------------- ------------------ OTHER - FIXED RATE - 0.0% DUNKN Series 2006-1, Class A2 5.779%, 6/20/31 (d) 100 99,949 -0- -0- --------------------- ------------------ TOTAL ASSET-BACKED SECURITIES (cost $4,329,824) 4,179,183 -0- --------------------- ------------------ CORPORATES-1.6% BRAZIL-0.2% Banco Bmg SA 9.15%, 1/15/16 (d) -0- -0- 100 106,000 Republic of Brazil 8.75%, 2/04/25 -0- -0- 126 161,280 Vale Overseas Ltd. 6.875%, 11/21/36 -0- -0- 134 138,056 --------------------- ------------------ -0- 405,336 --------------------- ------------------ EL SALVADOR-0.0% MMG Fiduciary (AES El Salvador) 6.75%, 2/01/16 (d) -0- -0- 100 98,251 --------------------- ------------------ HONG KONG-0.1% Chaoda Modern Agriculture 7.75%, 2/08/10 (d) -0- -0- 115 111,837 Noble Group Ltd. 6.625%, 3/17/15 (d) -0- -0- 100 93,025 --------------------- ------------------ -0- 204,862 --------------------- ------------------ JAMAICA-0.1% Digicel Ltd. 9.25%, 9/01/12 (d) -0- -0- 100 102,750 --------------------- ------------------ KAZAKHSTAN-0.1% ALB Finance BV 9.25%, 9/25/13 (d) -0- -0- 100 89,657 Kazkommerts International BV 8.50%, 4/16/13 (d) -0- -0- 100 94,590 Tengizchevroil Finance Co. 6.124%, 11/15/14 (d) -0- -0- 100 98,490 --------------------- ------------------ -0- 282,737 --------------------- ------------------ MALAYSIA-0.2% Petronas Capital Ltd. 7.00%, 5/22/12 (d) -0- -0- 426 455,735 --------------------- ------------------ PERU-0.1% Southern Copper Corp. 7.50%, 7/27/35 -0- -0- 100 108,571 --------------------- ------------------ RUSSIA-0.8% Alfa Bond Issuance PLC 8.625%, 12/09/15 (c) -0- -0- 100 96,400 Citigroup (JSC Severstal) Series REGS 9.25%, 4/19/14 (d) -0- -0- 68 73,071 Evraz Group SA 8.25%, 11/10/15 (d) -0- -0- 100 100,250 Gallery Capital SA 10.125%, 5/15/13 (d) -0- -0- 100 94,850 Gazprom 6.51%, 3/07/22 (d) -0- -0- 300 296,970 Gazprom OAO 9.625%, 3/01/13 (d) -0- -0- 560 648,536 Gazstream SA 5.625%, 7/22/13 (d) -0- -0- 115 113,842
AllianceBernstein AllianceBernstein AllianceBernstein Variable Products AllianceBernstein Variable Products Variable Products Series Fund Variable Products Series Fund Series Fund High Yield Series Fund Americas Government Americas Portfolio High Yield Income Portfolio Government Principal Portfolio Principal Income Portfolio Amount (000) (U.S. $ Value) Amount (000) (U.S. $ Value) ---------------------------------------- ---------------------------------------- Credit-Based Asset Servicing & Securities, Inc. Series 2005-CB7, Class AF2 5.147%, 11/25/35 (e) US$ -0- $ -0- US$ -0- $ -0- GE-WMC Mortgage Securities LLC Series 2005-2, Class A2B 5.301%, 12/25/35 (b) -0- -0- -0- -0- HFC Home Equity Loan Asset Backed Certificates Series 2005-3, Class A1 5.798%, 1/20/35 (b) -0- -0- -0- -0- Home Equity Asset Trust Series 2007-2, Class M1 5.935%, 7/25/37 (b) -0- -0- -0- -0- Indymac Residential Asset Backed Trust Series 2006-D, Class 2A2 5.241%, 11/25/36 (b) -0- -0- -0- -0- Option One Mortgage Loan Trust Series 2007-2, Class M1 5.491%, 3/25/37 (b) -0- -0- -0- -0- RAAC Series Series 2006-SP3, Class A1 5.211%, 8/25/36 (b) -0- -0- -0- -0- Residential Asset Mortgage Products, Inc. Series 2005-RS3, Class AIA2 5.301%, 3/25/35 (b) -0- -0- -0- -0- Series 2005-RZ1, Class A2 5.331%, 4/25/35 (b) -0- -0- -0- -0- Saxon Asset Securities Trust Series 2005-4, Class A2B 5.311%, 11/25/37 (b) -0- -0- -0- -0- Specialty Underwriting & Residential Finance Series 2006-BC1, Class A2A 5.211%, 12/25/36 (b) -0- -0- -0- -0- Structured Asset Investment Loan Trust Series 2006-1, Class A1 5.211%, 1/25/36 (b) -0- -0- -0- -0- ---------------------- ------------------- -0- -0- ---------------------- ------------------- HOME EQUITY LOANS - FIXED RATE - 0.5% Citifinancial Mortgage Securities, Inc. Series 2003-1, Class AFPT 3.36%, 1/25/33 (e) -0- -0- -0- -0- Countrywide Asset-Backed Certificates Series 2007-S1, Class A3 5.81%, 11/25/36 (c) -0- -0- -0- -0- Credit-Based Asset Servicing & Securities, Inc. Series 2003-CB1, Class AF 3.45%, 1/25/33 (e) -0- -0- -0- -0- Home Equity Mortgage Trust Series 2005-4, Class A3 4.742%, 1/25/36 (e) -0- -0- -0- -0- Series 2006-1, Class A2 5.30%, 5/25/36 (e) -0- -0- -0- -0- Residential Funding Mortgage Securities, Inc. Series 2005-HI2, Class A3 4.46%, 5/25/35 -0- -0- -0- -0- ---------------------- ------------------- -0- -0- ---------------------- ------------------- AUTOS - FIXED RATE - 0.1% Capital One Prime Auto Receivables Trust Series 2005-1, Class A3 4.32%, 8/15/09 -0- -0- -0- -0- ---------------------- ------------------- OTHER - FIXED RATE - 0.0% DUNKN Series 2006-1, Class A2 5.779%, 6/20/31 (d) -0- -0- -0- -0- ---------------------- ------------------- TOTAL ASSET-BACKED SECURITIES (cost $4,329,824) -0- -0- ---------------------- ------------------- CORPORATES-1.6% BRAZIL-0.2% Banco Bmg SA 9.15%, 1/15/16 (d) -0- -0- -0- -0- Republic of Brazil 8.75%, 2/04/25 -0- -0- -0- -0- Vale Overseas Ltd. 6.875%, 11/21/36 -0- -0- -0- -0- ---------------------- ------------------- -0- -0- ---------------------- ------------------- EL SALVADOR-0.0% MMG Fiduciary (AES El Salvador) 6.75%, 2/01/16 (d) -0- -0- -0- -0- ---------------------- ------------------- HONG KONG-0.1% Chaoda Modern Agriculture 7.75%, 2/08/10 (d) -0- -0- -0- -0- Noble Group Ltd. 6.625%, 3/17/15 (d) -0- -0- -0- -0- ---------------------- ------------------- -0- -0- ---------------------- ------------------- JAMAICA-0.1% Digicel Ltd. 9.25%, 9/01/12 (d) -0- -0- -0- -0- ---------------------- ------------------- KAZAKHSTAN-0.1% ALB Finance BV 9.25%, 9/25/13 (d) -0- -0- -0- -0- Kazkommerts International BV 8.50%, 4/16/13 (d) -0- -0- -0- -0- Tengizchevroil Finance Co. 6.124%, 11/15/14 (d) -0- -0- -0- -0- ---------------------- ------------------- -0- -0- ---------------------- ------------------- MALAYSIA-0.2% Petronas Capital Ltd. 7.00%, 5/22/12 (d) -0- -0- -0- -0- ---------------------- ------------------- PERU-0.1% Southern Copper Corp. 7.50%, 7/27/35 -0- -0- -0- -0- ---------------------- ------------------- RUSSIA-0.8% Alfa Bond Issuance PLC 8.625%, 12/09/15 (c) -0- -0- -0- -0- Citigroup (JSC Severstal) Series REGS 9.25%, 4/19/14 (d) -0- -0- -0- -0- Evraz Group SA 8.25%, 11/10/15 (d) -0- -0- -0- -0- Gallery Capital SA 10.125%, 5/15/13 (d) -0- -0- -0- -0- Gazprom 6.51%, 3/07/22 (d) -0- -0- -0- -0- Gazprom OAO 9.625%, 3/01/13 (d) -0- -0- -0- -0- Gazstream SA 5.625%, 7/22/13 (d) -0- -0- -0- -0-
Pro Forma Pro Forma AllianceBernstein AllianceBernstein AllianceBernstein Variable Products AllianceBernstein Variable Products Variable Products Series Fund Variable Products Series Fund U.S. Series Fund U.S. Global Bond Series Fund Government/High Government/High Portfolio Global Bond Grade Securities Grade Securities Principal Portfolio Portfolio Principal Portfolio Amount (000) (U.S. $ Value) Amount (000) (U.S. $ Value) ---------------------------------------- ---------------------------------------- Credit-Based Asset Servicing & Securities, Inc. Series 2005-CB7, Class AF2 5.147%, 11/25/35 (e) US$ -0- $ -0- US$ 218 $ 216,333 GE-WMC Mortgage Securities LLC Series 2005-2, Class A2B 5.301%, 12/25/35 (b) -0- -0- 285 281,751 HFC Home Equity Loan Asset Backed Certificates Series 2005-3, Class A1 5.798%, 1/20/35 (b) -0- -0- 178 174,333 Home Equity Asset Trust Series 2007-2, Class M1 5.935%, 7/25/37 (b) -0- -0- 475 436,805 Indymac Residential Asset Backed Trust Series 2006-D, Class 2A2 5.241%, 11/25/36 (b) -0- -0- 490 484,717 Option One Mortgage Loan Trust Series 2007-2, Class M1 5.491%, 3/25/37 (b) -0- -0- 160 146,853 RAAC Series Series 2006-SP3, Class A1 5.211%, 8/25/36 (b) -0- -0- 119 118,481 Residential Asset Mortgage Products, Inc. Series 2005-RS3, Class AIA2 5.301%, 3/25/35 (b) -0- -0- 108 107,220 Series 2005-RZ1, Class A2 5.331%, 4/25/35 (b) -0- -0- 221 218,818 Saxon Asset Securities Trust Series 2005-4, Class A2B 5.311%, 11/25/37 (b) -0- -0- 171 171,156 Specialty Underwriting & Residential Finance Series 2006-BC1, Class A2A 5.211%, 12/25/36 (b) -0- -0- 96 95,319 Structured Asset Investment Loan Trust Series 2006-1, Class A1 5.211%, 1/25/36 (b) -0- -0- 45 44,446 --------------------- ------------------- -0- 2,654,836 --------------------- ------------------- HOME EQUITY LOANS - FIXED RATE - 0.5% Citifinancial Mortgage Securities, Inc. Series 2003-1, Class AFPT 3.36%, 1/25/33 (e) -0- -0- 116 103,472 Countrywide Asset-Backed Certificates Series 2007-S1, Class A3 5.81%, 11/25/36 (c) -0- -0- 475 435,285 Credit-Based Asset Servicing & Securities, Inc. Series 2003-CB1, Class AF 3.45%, 1/25/33 (e) -0- -0- 252 238,930 Home Equity Mortgage Trust Series 2005-4, Class A3 4.742%, 1/25/36 (e) -0- -0- 157 155,748 Series 2006-1, Class A2 5.30%, 5/25/36 (e) -0- -0- 120 102,151 Residential Funding Mortgage Securities, Inc. Series 2005-HI2, Class A3 4.46%, 5/25/35 -0- -0- 157 155,885 --------------------- ------------------- -0- 1,191,471 --------------------- ------------------- AUTOS - FIXED RATE - 0.1% Capital One Prime Auto Receivables Trust Series 2005-1, Class A3 4.32%, 8/15/09 -0- -0- 234 232,927 --------------------- ------------------- OTHER - FIXED RATE - 0.0% DUNKN Series 2006-1, Class A2 5.779%, 6/20/31 (d) -0- -0- 100 99,949 --------------------- ------------------- TOTAL ASSET-BACKED SECURITIES (cost $4,329,824) -0- 4,179,183 --------------------- ------------------- CORPORATES-1.6% BRAZIL-0.2% Banco Bmg SA 9.15%, 1/15/16 (d) -0- -0- 100 106,000 Republic of Brazil 8.75%, 2/04/25 -0- -0- 126 161,280 Vale Overseas Ltd. 6.875%, 11/21/36 -0- -0- 134 138,056 --------------------- ------------------- -0- 405,336 --------------------- ------------------- EL SALVADOR-0.0% MMG Fiduciary (AES El Salvador) 6.75%, 2/01/16 (d) -0- -0- 100 98,251 --------------------- ------------------- HONG KONG-0.1% Chaoda Modern Agriculture 7.75%, 2/08/10 (d) -0- -0- 115 111,837 Noble Group Ltd. 6.625%, 3/17/15 (d) -0- -0- 100 93,025 --------------------- ------------------- -0- 204,862 --------------------- ------------------- JAMAICA-0.1% Digicel Ltd. 9.25%, 9/01/12 (d) -0- -0- 100 102,750 --------------------- ------------------- KAZAKHSTAN-0.1% ALB Finance BV 9.25%, 9/25/13 (d) -0- -0- 100 89,657 Kazkommerts International BV 8.50%, 4/16/13 (d) -0- -0- 100 94,590 Tengizchevroil Finance Co. 6.124%, 11/15/14 (d) -0- -0- 100 98,490 --------------------- ------------------- -0- 282,737 --------------------- ------------------- MALAYSIA-0.2% Petronas Capital Ltd. 7.00%, 5/22/12 (d) -0- -0- 426 455,735 --------------------- ------------------- PERU-0.1% Southern Copper Corp. 7.50%, 7/27/35 -0- -0- 100 108,571 --------------------- ------------------- RUSSIA-0.8% Alfa Bond Issuance PLC 8.625%, 12/09/15 (c) -0- -0- 100 96,400 Citigroup (JSC Severstal) Series REGS 9.25%, 4/19/14 (d) -0- -0- 68 73,071 Evraz Group SA 8.25%, 11/10/15 (d) -0- -0- 100 100,250 Gallery Capital SA 10.125%, 5/15/13 (d) -0- -0- 100 94,850 Gazprom 6.51%, 3/07/22 (d) -0- -0- 300 296,970 Gazprom OAO 9.625%, 3/01/13 (d) -0- -0- 560 648,536 Gazstream SA 5.625%, 7/22/13 (d) -0- -0- 115 113,842
AllianceBernstein AllianceBernstein Variable Variable Products AllianceBernstein Products Series Fund U.S. Variable Products Series Fund AllianceBernstein Government/High Series Fund Global Dollar Variable Products Grade Securities U.S. Government/High Government Series Fund Portfolio Grade Securities Portfolio Global Dollar Principal Portfolio Principal Government Portfolio Amount (000) (U.S. $ Value) Amount (000) (U.S. $ Value) ---------------------------------------- ---------------------------------------- Mobile Telesystems Finance 9.75%, 1/30/08 (d) US$ -0- $ -0- US$ 100 $ 100,890 Series REGS 9.75%, 1/30/08 (d) -0- -0- 25 25,138 Russia Agriculture Bank Rshb C 6.299%, 5/15/17 (d) -0- -0- 147 138,386 Russian Standard Finance 7.50%, 10/07/10 (d) -0- -0- 100 87,740 TNK-BP Finance SA 7.50%, 7/18/16 (d) -0- -0- 100 99,310 Tyumen Oil Co. 11.00%, 11/06/07 (d) -0- -0- 55 55,165 ------------- ------------ -0- 1,930,548 ------------- ------------ TOTAL CORPORATES (cost $3,642,281) -0- 3,588,790 ------------- ------------ MORTGAGE CMO'S - 0.9% NON-AGENCY ADJUSTABLE RATE - 0.5% Countrywide Alternative Loan Trust Series 2005-62, Class 2A1 5.988%, 12/25/35 (b) 168 163,111 -0- -0- Series 2007-OA3, Class M1 5.441%, 4/25/47 (b) 145 118,217 -0- -0- Washington Mutual Mortgage Pass Through Series 2005-AR2, Class 2A22 5.351%, 1/25/45 (b) 6 5,536 -0- -0- Series 2007-OA1, Class A1A 5.683%, 2/25/47 (b) 389 374,955 -0- -0- Series 2007-OA3, Class B1 5.581%, 4/25/47 (b) 449 402,464 -0- -0- ------------- ------------ 1,064,283 -0- ------------- ------------ NON-AGENCY FIXED RATE - 0.4% Morgan Stanley Mortgage Loan Trust Series 2006-11, Class 1A2 6.354%, 8/25/36 (c) 290 291,098 -0- -0- Residential Accredit Loans, Inc. Series 2007-QS1, Class 1A1 6.00%, 1/25/37 308 312,239 -0- -0- Wells Fargo Mortgage Backed Securities Trust Series 2006-AR11, Class A4 5.525%, 8/25/36 (c) 397 394,899 -0- -0- ------------- ------------ 998,236 -0- ------------- ------------ AGENCY ADJUSTABLE RATE - 0.0% Fannie Mae Grantor Trust Series 2004-T5, Class AB4 5.582%, 5/28/35 (b) 50 48,059 -0- -0- ------------- ------------ TOTAL MORTGAGE CMO'S (cost $2,200,577) 2,110,578 -0- ------------- ------------ AGENCIES - 0.9% CANADA - 0.9% Canada Housing Trust No 1 3.55%, 9/15/10 (a) (cost $1,745,461) -0- -0- -0- -0- ------------- ------------ GOVERNMENT-RELATED-U.S. AGENCIES-0.8% AGENCY DEBENTURES-0.8% Federal Home Loan Mortgage Corp. 4.75%, 1/19/16 (a) (cost $1,782,649) -0- -0- -0- -0- ------------- ------------ GOVERNMENT-RELATED - PROVINCIALS - 0.7% CANADA - 0.7% Province of Ontario 5.60%, 6/02/35 (a) -0- -0- -0- -0- Province of Quebec 5.50%, 12/01/14 (a) -0- -0- -0- -0- 6.00%, 10/01/12 -0- -0- -0- -0- ------------- ------------ TOTAL GOVERNMENT-RELATED - PROVINCIALS (cost $1,416,213) -0- -0- ------------- ------------ TREASURY BILLS-0.3% TREASURY BILLS-0.3% Canada Treasury Bills Zero Coupon, 10/18/07 (a) (cost $644,125) CAD -0- -0- CAD -0- -0- ------------- ------------ EMERGING MARKETS - NON-INVESTMENT GRADES - 0.1% INDUSTRIAL - 0.1% CONSUMER CYCLICAL - OTHER - 0.1% Royal Caribbean Cruises Ltd. 8.75%, 2/02/11 (cost $133,252) US$ -0- -0- US$ -0- -0- ------------- ------------ NON-CONVERTIBLE - PREFERRED STOCKS - 0.1% FINANCIAL INSTITUTIONS - 0.1% REITS - 0.1% Sovereign REIT 12.00% (d) (cost $87,659) -0- -0- -0- -0- ------------- ------------ SHORT-TERM INVESTMENTS-4.0% TIME DEPOSIT-4.0% The Bank of New York 3.75%, 10/01/07 US$ 836 836,000 US$ 128 128,000 Societe Generale 4.95%, 10/01/07 -0- -0- -0- -0- ------------- ------------ (cost $9,186,000) 836,000 128,000 ------------- ------------ TOTAL INVESTMENTS-100.1% (cost $226,010,446) 89,014,198 25,882,770 OTHER ASSETS LESS LIABILITIES-(0.1%) 838,954 304,489 ------------- ------------ NET ASSETS-100.0% $ 89,853,152 $ 26,187,259 ------------- ------------
AllianceBernstein AllianceBernstein Variable Products Variable Products AllianceBernstein Series Fund AllianceBernstein Series Fund Variable Products High Yield Variable Products Americas Government Series Fund Portfolio Series Fund Income Portfolio Americas Shares of High Yield Shares of Government Principal Portfolio Principal Income Portfolio Amount (000) (U.S. $ Value) Amount (000) (U.S. $ Value) ---------------------------------------- ---------------------------------------- Mobile Telesystems Finance 9.75%, 1/30/08 (d) US$ -0- $ -0- US$ -0- $ -0- Series REGS 9.75%, 1/30/08 (d) -0- -0- -0- -0- Russia Agriculture Bank Rshb C 6.299%, 5/15/17 (d) -0- -0- -0- -0- Russian Standard Finance 7.50%, 10/07/10 (d) -0- -0- -0- -0- TNK-BP Finance SA 7.50%, 7/18/16 (d) -0- -0- -0- -0- Tyumen Oil Co. 11.00%, 11/06/07 (d) -0- -0- -0- -0- ------------- ------------ -0- -0- ------------- ------------ TOTAL CORPORATES (cost $3,642,281) -0- -0- ------------- ------------ MORTGAGE CMO'S - 0.9% NON-AGENCY ADJUSTABLE RATE - 0.5% Countrywide Alternative Loan Trust Series 2005-62, Class 2A1 5.988%, 12/25/35 (b) -0- -0- -0- -0- Series 2007-OA3, Class M1 5.441%, 4/25/47 (b) -0- -0- -0- -0- Washington Mutual Mortgage Pass Through Series 2005-AR2, Class 2A22 5.351%, 1/25/45 (b) -0- -0- -0- -0- Series 2007-OA1, Class A1A 5.683%, 2/25/47 (b) -0- -0- -0- -0- Series 2007-OA3, Class B1 5.581%, 4/25/47 (b) -0- -0- -0- -0- ------------- ------------ -0- -0- ------------- ------------ NON-AGENCY FIXED RATE - 0.4% Morgan Stanley Mortgage Loan Trust Series 2006-11, Class 1A2 6.354%, 8/25/36 (c) -0- -0- -0- -0- Residential Accredit Loans, Inc. Series 2007-QS1, Class 1A1 6.00%, 1/25/37 -0- -0- -0- -0- Wells Fargo Mortgage Backed Securities Trust Series 2006-AR11, Class A4 5.525%, 8/25/36 (c) -0- -0- -0- -0- ------------- ------------ -0- -0- ------------- ------------ AGENCY ADJUSTABLE RATE - 0.0% Fannie Mae Grantor Trust Series 2004-T5, Class AB4 5.582%, 5/28/35 (b) -0- -0- -0- -0- ------------- ------------ TOTAL MORTGAGE CMO'S (cost $2,200,577) -0- -0- ------------- ------------ AGENCIES - 0.9% CANADA - 0.9% Canada Housing Trust No 1 3.55%, 9/15/10 (a) (cost $1,745,461) -0- -0- 2,000 1,966,380 ------------- ------------ GOVERNMENT-RELATED-U.S. AGENCIES-0.8% AGENCY DEBENTURES-0.8% Federal Home Loan Mortgage Corp. 4.75%, 1/19/16 (a) (cost $1,782,649) -0- -0- -0- -0- ------------- ------------ GOVERNMENT-RELATED - PROVINCIALS - 0.7% CANADA - 0.7% Province of Ontario 5.60%, 6/02/35 (a) -0- -0- 300 331,374 Province of Quebec 5.50%, 12/01/14 (a) -0- -0- 600 633,883 6.00%, 10/01/12 -0- -0- 648 693,917 ------------- ------------ TOTAL GOVERNMENT-RELATED - PROVINCIALS (cost $1,416,213) -0- 1,659,174 ------------- ------------ TREASURY BILLS-0.3% TREASURY BILLS-0.3% Canada Treasury Bills Zero Coupon, 10/18/07 (a) (cost $644,125) CAD -0- -0- CAD -0- -0- ------------- ------------ EMERGING MARKETS - NON-INVESTMENT GRADES - 0.1% INDUSTRIAL - 0.1% CONSUMER CYCLICAL - OTHER - 0.1% Royal Caribbean Cruises Ltd. 8.75%, 2/02/11 (cost $133,252) US$ 140 149,294 US$ -0- -0- ------------- ------------ NON-CONVERTIBLE - PREFERRED STOCKS - 0.1% FINANCIAL INSTITUTIONS - 0.1% REITS - 0.1% Sovereign REIT 12.00% (d) (cost $87,659) 93 134,472 -0- -0- ------------- ------------ SHORT-TERM INVESTMENTS-4.0% TIME DEPOSIT-4.0% The Bank of New York 3.75%, 10/01/07 US$ 363 363,000 US$ 877 877,000 Societe Generale 4.95%, 10/01/07 -0- -0- -0- -0- ------------- ------------ (cost $9,186,000) 363,000 877,000 ------------- ------------ TOTAL INVESTMENTS-100.1% (cost $226,010,446) 35,422,503 40,084,353 OTHER ASSETS LESS LIABILITIES-(0.1%) 441,801 (2,100,831) ------------- ------------ NET ASSETS-100.0% $ 35,864,304 $ 37,983,522 ------------- ------------
Pro Forma Pro Forma AllianceBernstein AllianceBernstein AllianceBernstein Variable Products AllianceBernstein Variable Products Variable Products Series Fund Variable Products Series Fund U.S. Series Fund U.S. Global Bond Series Fund Government/High Government/High Portfolio Global Bond Grade Securities Grade Securities Principal Portfolio Portfolio Principal Portfolio Amount (000) (U.S. $ Value) Amount (000) (U.S. $ Value) ---------------------------------------- ---------------------------------------- Mobile Telesystems Finance 9.75%, 1/30/08 (d) US$ -0- $ -0- US$ 100 $ 100,890 Series REGS 9.75%, 1/30/08 (d) -0- -0- 25 25,138 Russia Agriculture Bank Rshb C 6.299%, 5/15/17 (d) -0- -0- 147 138,386 Russian Standard Finance 7.50%, 10/07/10 (d) -0- -0- 100 87,740 TNK-BP Finance SA 7.50%, 7/18/16 (d) -0- -0- 100 99,310 Tyumen Oil Co. 11.00%, 11/06/07 (d) -0- -0- 55 55,165 ------------- ------------ -0- 1,930,548 ------------- ------------ TOTAL CORPORATES (cost $3,642,281) -0- 3,588,790 ------------- ------------ MORTGAGE CMO'S - 0.9% NON-AGENCY ADJUSTABLE RATE - 0.5% Countrywide Alternative Loan Trust Series 2005-62, Class 2A1 5.988%, 12/25/35 (b) -0- -0- 168 163,111 Series 2007-OA3, Class M1 5.441%, 4/25/47 (b) -0- -0- 145 118,217 Washington Mutual Mortgage Pass Through Series 2005-AR2, Class 2A22 5.351%, 1/25/45 (b) -0- -0- 6 5,536 Series 2007-OA1, Class A1A 5.683%, 2/25/47 (b) -0- -0- 389 374,955 Series 2007-OA3, Class B1 5.581%, 4/25/47 (b) -0- -0- 449 402,464 ------------- ------------ -0- 1,064,283 ------------- ------------ NON-AGENCY FIXED RATE - 0.4% Morgan Stanley Mortgage Loan Trust Series 2006-11, Class 1A2 6.354%, 8/25/36 (c) -0- -0- 290 291,098 Residential Accredit Loans, Inc. Series 2007-QS1, Class 1A1 6.00%, 1/25/37 -0- -0- 308 312,239 Wells Fargo Mortgage Backed Securities Trust Series 2006-AR11, Class A4 5.525%, 8/25/36 (c) -0- -0- 397 394,899 ------------- ------------ -0- 998,236 ------------- ------------ AGENCY ADJUSTABLE RATE - 0.0% Fannie Mae Grantor Trust Series 2004-T5, Class AB4 5.582%, 5/28/35 (b) -0- -0- 50 48,059 ------------- ------------ TOTAL MORTGAGE CMO'S (cost $2,200,577) -0- 2,110,578 ------------- ------------ AGENCIES - 0.9% CANADA - 0.9% Canada Housing Trust No 1 3.55%, 9/15/10 (a) (cost $1,745,461) -0- -0- 2,000 1,966,380 ------------- ------------ GOVERNMENT-RELATED-U.S. AGENCIES-0.8% AGENCY DEBENTURES-0.8% Federal Home Loan Mortgage Corp. 4.75%, 1/19/16 (a) (cost $1,782,649) 1,810 1,791,341 1,810 1,791,341 ------------- ------------ GOVERNMENT-RELATED - PROVINCIALS - 0.7% CANADA - 0.7% Province of Ontario 5.60%, 6/02/35 (a) -0- -0- 300 331,374 Province of Quebec 5.50%, 12/01/14 (a) -0- -0- 600 633,883 6.00%, 10/01/12 -0- -0- 648 693,917 ------------- ------------ TOTAL GOVERNMENT-RELATED - PROVINCIALS (cost $1,416,213) -0- 1,659,174 ------------- ------------ TREASURY BILLS-0.3% TREASURY BILLS-0.3% Canada Treasury Bills Zero Coupon, 10/18/07 (a) (cost $644,125) CAD 665 667,126 CAD 665 667,126 ------------- ------------ EMERGING MARKETS - NON-INVESTMENT GRADES - 0.1% INDUSTRIAL - 0.1% CONSUMER CYCLICAL - OTHER - 0.1% Royal Caribbean Cruises Ltd. 8.75%, 2/02/11 (cost $133,252) US$ -0- -0- US$ 140 149,294 ------------- ------------ NON-CONVERTIBLE - PREFERRED STOCKS - 0.1% FINANCIAL INSTITUTIONS - 0.1% REITS - 0.1% Sovereign REIT 12.00% (d) (cost $87,659) -0- -0- 93 134,472 ------------- ------------ SHORT-TERM INVESTMENTS-4.0% TIME DEPOSIT-4.0% The Bank of New York 3.75%, 10/01/07 US$ 482 482,000 US$ 2,686 2,686,000 Societe Generale 4.95%, 10/01/07 6,500 6,500,000 6,500 6,500,000 ------------- ------------ (cost $9,186,000) 6,982,000 9,186,000 ------------- ------------ TOTAL INVESTMENTS-100.1% (cost $226,010,446) 39,090,781 229,494,605 OTHER ASSETS LESS LIABILITIES-(0.1%) 214,953 (300,634) ------------- ------------ NET ASSETS-100.0% $ 39,305,734 $ 229,193,971 ------------- ------------
FORWARD CURRENCY EXCHANGE CONTRACTS
Unrealized Contract Value on U.S. $ Value at Appreciation/ Amount (000) Origination Date September 30, 2007 (Depreciation) ------------ ---------------- ------------------ -------------- Buy Contracts: Australian Dollar settling 11/29/07 82 $70,281 $72,161 $1,880 Canadian Dollar settling 11/16/07 779 777,907 783,463 5,556 Canadian Dollar settling 11/16/07 2,381 2,374,801 2,394,867 20,066 Danish Krone settling 10/23/07 1,916 347,658 366,621 18,963 Euro settling 10/30/07 7,749 10,588,716 11,058,464 469,748 Euro settling 10/30/07 122 172,177 173,812 1,635 Great British Pound settling 11/28/07 924 1,846,256 1,888,613 42,357 Japanese Yen settling 10/16/07 48,711 427,521 424,820 (2,701) Japanese Yen settling 10/16/07 81,900 719,869 714,266 (5,603) Japanese Yen settling 11/28/07 242,508 2,106,949 2,126,164 19,215 Mexican Nuevo Peso settling 10/04/07 218 19,802 19,922 120 Mexican Nuevo Peso settling 10/04/07 5,038 462,947 460,579 (2,368) Mexican Nuevo Peso settling 10/04/07 8,605 784,531 786,610 2,079 New Zealand Dollar settling 11/19/07 565 402,452 425,921 23,469 Norwegian Krone settling 11/13/07 8,364 1,499,599 1,550,880 51,281 Swiss Franc settling 10/15/07 265 222,538 228,002 5,464 Sale Contracts: Canadian Dollar settling 11/16/07 57 54,657 57,719 (3,062) Canadian Dollar settling 11/16/07 3,691 3,514,271 3,712,829 (198,558) Euro settling 10/30/07 117 160,208 167,163 (6,955) Euro settling 10/30/07 330 456,939 470,526 (13,587) Euro settling 10/30/07 1,002 1,399,910 1,429,212 (29,302) Euro settling 10/30/07 20 28,106 28,379 (273) Japanese Yen settling 10/16/07 99,946 854,708 871,655 (16,947) Japanese Yen settling 10/16/07 123,201 1,063,326 1,074,469 (11,143) Mexican Nuevo Peso settling 10/04/07 36 3,313 3,296 17 Mexican Nuevo Peso settling 10/04/07 6,078 544,998 555,652 (10,654) Mexican Nuevo Peso settling 10/04/07 74,403 6,760,602 6,801,662 (41,060) New Zealand Dollar settling 11/19/07 824 586,762 621,822 (35,060) Norwegian Krone settling 11/13/07 7,623 1,323,645 1,413,450 (89,805) Singapore Dollar settling 10/29/07 1,283 845,752 865,118 (19,366) Swedish Krona settling 12/11/07 4,946 759,167 769,121 (9,954)
CREDIT DEFAULT SWAP CONTRACTS Notional Unrealized Amount Interest Termination Appreciation/ Swap Counterparty & Referenced Obligation (000) Rate Date (Depreciation) ----------------------------------------------------------------------------------------------------------------------------------- Sale Contracts: Citigroup Global Markets, Inc. (Federal Republic of Brazil 12.25% 3/6/30) $600 3.09% 8/20/10 $43,316 Citigroup Global Markets, Inc. (Republic of Philippines 10.625% 3/16/25) 130 4.95 3/20/09 8,396 JPMorgan Chase (OAO Gazprom 10.50% 10/21/09) 360 1.04 10/20/10 3,192 Lehman Brothers (Republic of Venezuela 9.25% 9/15/27) 280 0.69 4/20/08 (1,351)
INTEREST RATE SWAP TRANSACTIONS
Rate Type ----------------------------- Notional Payments Payments Unrealized Amount Termination made by received by Appreciation/ Swap Counterparty (000) Date the Portfolio the Portfolio (Depreciation) -------------------------------------------------------------------------------------------------------------------------- Lehman Brothers $3,505 11/2/07 3 month LIBOR+ 4.814% $35,935 Lehman Brothers 1,500 12/4/11 3 month LIBOR+ 4.8504% 19,038 Lehman Brothers 1,000 3/2/16 3 month LIBOR+ 5.0625% (5,002)
REVERSE REPURCHASE AGREEMENTS
Broker Interest Rate Maturity Amount -------------------------------------------------------------------------------------------- Greenwich Capital 4.65% 10/3/07 $ 5,866,981 Greenwich Capital 4.65 10/3/07 1,501,783 ------------ $ 7,368,764
---------- (a) Position, or a portion thereof, has been segregated to collateralize forward currency exchange contracts. The aggregate market value of these securities amounted to $58,236,581. (b) Floating Rate Security. Stated interest rate was in effect at September 30, 2007. (c) Variable rate coupon, rate shown as of September 30, 2007. (d) Security is exempt from registration under Rule 144A of the Securities Act of 1933. These securities are considered liquid and may be resold in transactions exempt from registration, normally to qualified institutional buyers. At September 30, 2007, the aggregate market value of these securities amounted to $19,859,482 or 8.7% of net assets. (e) Coupon rate adjusts periodically based upon a predetermined schedule. Stated interest rate in effect at September 30, 2007. (f) Pay-In-Kind Payments (PIK). (g) 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. (h) Illiquid security, valued at fair value. (i) Security is exempt from registration under Rule 144A of the Securities Act of 1933. This security, which represents 0.002% of net assets as of September 30, 2007, is considered illiquid and restricted. Acquisition Acquisition Market Percentage of Restricted Securities Date Cost Value Net Assets ------------------------------------------------------------------------------------------------------------------- Russell-Stanley Holdings, Inc. 11/09/01-6/06/05 $463,798 $4,566 0.002% 9.00%, 11/30/08
(j) Security is in default and is non-income producing. (k) Position, or a portion thereof, has been segregated to collateralize reverse repurchase agreements. The aggregate market value of these securities amounted to $7,384,074. Currency Abbreviations: AUD - Australian Dollar CAD - Canadian Dollar EUR - Euro Dollar GBP - Great British Pound JPY - Japanese Yen MXN - Mexican Peso NZD - New Zealand Dollar SEK - Swedish Krona SGD - Singapore Dollar Glossary: LIBOR - London Interbank Offered Rates TIPS - Treasury Inflation Protected Security PRO FORMA STATEMENT OF ASSETS AND LIABILITIES ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND U.S. GOVERNMENT/HIGH GRADE SECURITIES PORTFOLIO AllianceBernstein Variable Products Series Fund U.S. Government/High Grade Securities Portfolio AllianceBernstein Variable Products Series Fund Global Dollar Government Portfolio AllianceBernstein Variable Products Series Fund High Yield Portfolio AllianceBernstein Variable Products Series Fund Americas Government Income Portfolio September 30, 2007 (unaudited AllianceBernstein Variable Products Series Fund Global Bond Portfolio ------------------------------------------------------------------------------------------------------------------------------------
AllianceBernstein AllianceBernstein Variable Products Variable Products AllianceBernstein Series Fund Series Fund Variable Products U.S. Government/High Global Dollar Series Fund Grade Securities Government High Yield Portfolio Portfolio Portfolio --------------------- ---------------- ----------------- ASSETS Investments in securities, at value (cost $226,010,446).................. $ 89,014,198 $ 25,882,770 $ 35,422,503 Cash..................................................................... 160,435 14,313 24 Foreign cash, at value (cost $118,879)................................... -0- -0- -0- Unrealized appreciation of interest rate swap contracts.................. 54,973 -0- -0- Unrealized appreciation of credit default swap contracts................. -0- 54,904 -0- Unrealized appreciation of forward currency exchange contracts........... -0- -0- -0- Receivable for investment securities sold and foreign currency contracts................................................................ 1,797,580 9,316 -0- Dividends and interest receivable........................................ 800,160 435,202 720,922 Receivable for capital stock sold........................................ 8,296 1,449 14,503 --------------- -------------- -------------- Total assets............................................................. 91,835,642 26,397,954 36,157,952 --------------- -------------- -------------- LIABILITIES Due to custodian......................................................... -0- -0- -0- Unrealized depreciation of interest rate swap contracts.................. 5,002 -0- -0- Unrealized depreciation of credit default swap contracts................. -0- 1,351 -0- Unrealized depreciation of forward currency exchange contracts........... -0- -0- -0- Payable for investment securities purchased and foreign currency contracts................................................................ 1,600,560 13,130 20,000 Payable for capital stock redeemed....................................... 191,440 47,144 127,376 Custodian fee payable.................................................... 43,098 49,281 37,086 Printing fee payable..................................................... 39,379 22,615 20,983 Audit and legal fees payable............................................. 35,960 41,787 48,334 Advisory fee payable..................................................... 32,944 10,716 14,603 Administrative fee payable............................................... 21,373 21,335 21,373 Distribution fee payable................................................. 4,080 1,081 1,956 Transfer Agent fee payable............................................... 58 58 58 Reverse repurchase agreements............................................ -0- -0- -0- Accrued expenses......................................................... 8,596 2,197 1,879 --------------- -------------- -------------- Total liabilities........................................................ 1,982,490 210,695 293,648 --------------- -------------- -------------- NET ASSETS............................................................... $ 89,853,152 $ 26,187,259 $ 35,864,304 --------------- -------------- -------------- COMPOSITION OF NET ASSETS Capital stock, at par.................................................... $ 7,768 $ 1,988 $ 5,116 Additional paid-in capital............................................... 87,821,776 23,499,727 49,735,251 Undistributed net investment income/distributions in excess of net investment income........................................................ 3,321,620 973,928 1,886,142 Accumulated net realized gain (loss) on investment and foreign currency transactions......................................... (1,138,881) 347,655 (14,835,294) Net unrealized appreciation (depreciation) of investments and foreign currency denominated assets and liabilities.................. (159,131) 1,363,961 (926,911) --------------- -------------- -------------- $ 89,853,152 $ 26,187,259 $ 35,864,304 --------------- -------------- -------------- CLASS A SHARES Net Assets............................................................... $ 69,267,676 $ 20,902,760 $ 26,254,269 Shares of capital stock outstanding...................................... 5,977,348 1,585,450 3,743,544 --------------- -------------- -------------- Net asset value per share................................................ $ 11.59 $ 13.18 $ 7.01 --------------- -------------- -------------- CLASS B SHARES Net Assets............................................................... $ 20,585,476 $ 5,284,499 $ 9,610,035 Shares of capital stock outstanding...................................... 1,791,143 402,392 1,372,624 --------------- -------------- -------------- Net asset value per share................................................ $ 11.49 $ 13.13 $ 7.00 --------------- -------------- --------------
Pro Forma AllianceBernstein AllianceBernstein AllianceBernstein Variable Products Variable Products Variable Products Series Fund U.S. Series Fund Series Fund Government/High Americas Government Global Bond Grade Securites Income Portfolio Portfolio Adjustments Portfolio ---------------- ----------- ----------- --------------- ASSETS Investments in securities, at value (cost $226,010,446).......... $ 40,084,353 $ 39,090,781 $ -0- $ 229,494,605 Cash............................................................. 363 -0- -0- 175,135 Foreign cash, at value (cost $118,879)........................... 35,691 85,470 -0- 121,161 Unrealized appreciation of interest rate swap contracts.......... -0- -0- -0- 54,973 Unrealized appreciation of credit default swap contracts......... -0- -0- -0- 54,904 Unrealized appreciation of forward currency exchange contracts... 22,145 639,705 -0- 661,850 Receivable for investment securities sold and foreign currency contracts........................................................ 7,515,529 157,818 -0- 9,480,243 Dividends and interest receivable................................ 489,376 312,084 -0- 2,757,744 Receivable for capital stock sold................................ 436 30 -0- 24,714 ------------- -------------- ------------ -------------- Total assets..................................................... 48,147,893 40,285,888 -0- 242,825,329 ------------- -------------- ------------ -------------- LIABILITIES Due to custodian................................................. -0- 438,404 -0- 438,404 Unrealized depreciation of interest rate swap contracts.......... -0- -0- -0- 5,002 Unrealized depreciation of credit default swap contracts......... -0- -0- -0- 1,351 Unrealized depreciation of forward currency exchange contracts... 241,986 254,412 -0- 496,398 Payable for investment securities purchased and foreign currency contracts........................................................ 2,393,663 -0- -0- 4,027,353 Payable for capital stock redeemed............................... 31,884 133,434 -0- 531,278 Custodian fee payable............................................ 33,457 36,218 -0- 199,140 Printing fee payable............................................. 17,998 33,073 -0- 134,048 Audit and legal fees payable..................................... 34,666 45,885 -0- 206,632 Advisory fee payable............................................. 15,616 14,443 -0- 88,322 Administrative fee payable....................................... 21,335 21,335 -0- 106,751 Distribution fee payable......................................... 1,287 2,351 -0- 10,755 Transfer Agent fee payable....................................... 58 58 -0- 290 Reverse repurchase agreements.................................... 7,368,764 -0- -0- 7,368,764 Accrued expenses................................................. 3,657 541 -0- 16,870 ------------- -------------- ------------ -------------- Total liabilities................................................ 10,164,371 980,154 -0- 13,631,358 ------------- -------------- ------------ -------------- NET ASSETS....................................................... $ 37,983,522 $ 39,305,734 $ -0- $ 229,193,971 ------------- -------------- ------------ -------------- COMPOSITION OF NET ASSETS Capital stock, at par............................................ $ 3,142 $ 3,286 $ -0- $ 21,300 Additional paid-in capital....................................... 35,884,063 38,651,026 -0- 235,591,843 Undistributed net investment income/distributions in excess of net investment income......................................... (2,561,261) 6,721,461 -0- 10,341,890 Accumulated net realized gain (loss) on investment and foreign currency transactions............................................ 2,457,269 (7,362,663) -0- (20,531,914) Net unrealized appreciation (depreciation) of investments and foreign currency denominated assets and liabilities.............. 2,200,309 1,292,624 -0- 3,770,852 ------------- -------------- ------------ -------------- $ 37,983,522 $ 39,305,734 $ -0- $ 229,193,971 ------------- -------------- ------------ -------------- CLASS A SHARES Net Assets....................................................... $ 31,738,114 $ 27,807,775 $ 175,970,594 Shares of capital stock outstanding.............................. 2,625,472 2,318,618 (1,068,540)* 15,181,892 ------------- -------------- ------------ -------------- Net asset value per share........................................ $ 12.09 $ 11.99 $ 11.59 ------------- -------------- -------------- CLASS B SHARES Net Assets....................................................... $ 6,245,408 $ 11,497,959 $ 53,223,377 Shares of capital stock outstanding.............................. 516,531 967,535 (419,139)* 4,631,086 ------------- -------------- ------------ -------------- Net asset value per share........................................ $ 12.09 $ 11.88 $ 11.49 ------------- -------------- -------------- See Notes to Pro Forma AllianceBernstein Variable Products Series Fund U.S. Government/High Grade Securities Portfolio Financial Statements. * The pro forma net asset value per share for the combined Portfolio assumes the issuance of High Grade shares to the Acquired Portfolio shareholders in connection with the Acquisitions. The number of High Grade shares assumed to be issued is equal to the net asset value of the Acquired Portfolios divided by the net asset value per share of High Grade as of September 30, 2007.
PRO FORMA STATEMENT OF OPERATIONS ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND U.S. GOVERNMENT/HIGH GRADE SECURITIES PORTFOLIO AllianceBernstein Variable Products Series Fund U.S. Government/High Grade Securities Portfolio AllianceBernstein Variable Products Series Fund Global Dollar Government Portfolio AllianceBernstein Variable Products Series Fund High Yield Portfolio AllianceBernstein Variable Products Series Fund Americas Government Income Portfolio AllianceBernstein Variable Products Series Fund Global Bond Portfolio Twelve Months Ended September 30, 2007 (unaudited) -----------------------------------------------------------------------------------------------------------------------------------
AllianceBernstein AllianceBernstein AllianceBernstein Variable Products Variable Products Variable Products Series Fund Series Fund Series Fund U.S. Government/High Global Dollar High Yield Grade Securities Portfolio Government Portfolio Portfolio -------------------------- -------------------- --------- INVESTMENT INCOME Interest (net of foreign taxes withheld of $0, $500, $0, $4,841 and $0, respectively).................... $ 4,844,937 $ 1,915,141 $ 3,133,129 Dividends................................ -0- -0- 23,880 ----------------- -------------------- ----------------- 4,844,937 1,915,141 3,157,009 ----------------- -------------------- ----------------- EXPENSES Advisory fee (see Note C)................ 416,784 139,842 200,852 Distribution fee - Class B............... 53,720 13,901 26,105 Transfer agency.......................... 4,481 3,605 3,323 Custodian................................ 134,165 116,343 137,187 Administrative........................... 98,533 98,495 98,533 Audit and legal.......................... 50,459 59,580 60,246 Printing................................. 14,174 19,756 24,337 Directors' fees.......................... 2,102 2,132 2,132 Miscellaneous............................ 2,683 6,151 4,582 ----------------- -------------------- ----------------- Total expenses before interest expense... 777,101 459,805 557,297 Interest expense......................... -0- 23,713 -0- ----------------- -------------------- ----------------- Total expenses........................... 777,101 483,518 557,297 ----------------- -------------------- ----------------- Net investment income.................... 4,067,836 1,431,623 2,599,712 ----------------- -------------------- ----------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENT AND FOREIGN CURRENCY TRANSACTIONS Net realized gain (loss) on: Investment transactions................ 226,101 508,563 695,020 Swap contracts......................... (51,330) 119,748 -0- Foreign currency transactions.......... -0- -0- 9,232 Net change in unrealized appreciation/depreciation of: Investments............................ (349,124) (101,474) (766,120) Swap contracts......................... 42,149 (82,840) -0- Foreign currency denominated assets and liabilities........................ -0- -0- (197) ----------------- -------------------- ----------------- Net gain (loss) on investment and foreign currency transactions............ (132,204) 443,997 (62,065) ----------------- -------------------- ----------------- NET INCREASE IN NET ASSETS FROM OPERATIONS............................... $ 3,935,632 $ 1,875,620 $ 2,537,647 ----------------- -------------------- ----------------- -----------------------------------------------------------------------------------------------------------------------------------
Pro Forma AllianceBernstein AllianceBernstein AllianceBernstein Variable Products Variable Products Variable Products Series Fund Series Fund Series Fund Americas Government Global Bond U.S. Government/High Income Portfolio Portfolio Adjustments Grade Securities Portfolio ---------------- --------- ----------- -------------------------- INVESTMENT INCOME Interest (net of foreign taxes withheld of $0, $500, $0, $4,841 and $0, respectively).................... $ 2,858,622 $ 1,591,071 $ -0- $ 14,342,900 Dividends................................ -0- -0- -0- 23,880 ----------------- ----------------- --------------- ----------------- 2,858,622 1,591,071 -0- 14,366,780 ----------------- ----------------- --------------- ----------------- EXPENSES Advisory fee (see Note C)................ 203,553 183,029 (70,572) 1,073,488 (a) Distribution fee - Class B............... 17,187 30,076 336,992 477,981 (b) Transfer agency.......................... 3,250 4,386 (14,962) 4,083 (c) Custodian................................ 111,523 136,522 (459,840) 175,900 (c) Administrative........................... 98,495 98,495 (398,551) 94,000 (c) Audit and legal.......................... 49,283 64,693 (227,261) 57,000 (c) Printing................................. -0- 34,214 (52,481) 40,000 (c) Directors' fees.......................... 2,134 2,252 (8,430) 2,322 (c) Miscellaneous............................ 10,513 1,670 (17,599) 8,000 (c) ----------------- ----------------- --------------- ----------------- Total expenses before interest expense... 495,938 555,337 (912,704) 1,932,774 Interest expense......................... 488,921 -0- -0- 512,634 ----------------- ----------------- --------------- ----------------- Total expenses........................... 984,859 555,337 (912,704) 2,445,408 ----------------- ----------------- --------------- ----------------- Net investment income.................... 1,873,763 1,035,734 912,704 11,921,372 ----------------- ----------------- --------------- ----------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENT AND FOREIGN CURRENCY TRANSACTIONS Net realized gain (loss) on: Investment transactions................ 196,050 18,064 -0- 1,643,798 Swap contracts......................... -0- -0- -0- 68,418 Foreign currency transactions.......... 266,582 1,047,992 -0- 1,323,806 Net change in unrealized appreciation/depreciation of: Investments............................ (201,572) 837,306 -0- (580,984) Swap contracts......................... -0- -0- -0- (40,691) Foreign currency denominated assets (193,711) 425,988 -0- 232,080 and liabilities........................----------------- ----------------- --------------- ----------------- Net gain (loss) on investment and 67,349 2,329,350 -0- 2,646,427 foreign currency transactions............----------------- ----------------- --------------- ----------------- NET INCREASE IN NET ASSETS FROM OPERATIONS............................... $ 1,941,112 $ 3,365,084 $ 912,704 $ 14,567,799 ----------------- ----------------- --------------- ----------------- ------------------------------------------------------------------------------------------------------------------------------ (a) Advisory fee based on an annual rate of .45% of the first $2.5 billion, .40% of the next $2.5 billion and .35% in excess of $5 billion, of the Portfolio's average daily net assets. (b) Distribution fee based on an annual rate of .25% of the Portfolio's average daily net assets attributable to Class B shares. (c) Expenses are based on one fund. See Notes to Pro Forma AllianceBernstein Variable Products Series Fund U.S. Government/High Grade Securities Portfolio Financial Statements.
NOTES TO PRO FORMA FINANCIAL STATEMENTS ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND U.S. GOVERNMENT/HIGH GRADE SECURITIES PORTFOLIO September 30, 2007 (unaudited) NOTE A: General The pro forma High Grade financial statements give effect to the proposed acquisitions (the "Acquisitions") of the assets and liabilities of each of Global Dollar, High Yield, AGI and Global Bond (collectively, the "Acquired Portfolios") by High Grade pursuant to Plans of Acquisition and Liquidation. The Acquisitions would be accomplished by a tax-free exchange of the assets and liabilities of each Global Dollar, High Yield, AGI and Global Bond for shares of High Grade. The AllianceBernstein Variable Products Series Fund (the "Fund") was incorporated under the laws in the state of Maryland on November 17, 1987. High Grade's unaudited pro forma Portfolio of Investments, Statement of Assets and Liabilities and Statement of Operations are prepared as though the Acquisitions were effective for the period October 1, 2006 - September 30, 2007. You should review these pro forma financial statements in conjunction with High Grade's historical financial statements, which are included in High Grade's Statement of Additional Information. High Grade's pro forma Statement of Operations reflects the assumption that certain expenses would be lower for the combined Portfolio as a result of the Acquisitions. Each Portfolio will bear the expenses of the Acquisitions on a relative net asset basis, including the cost of proxy solicitation, except that each will bear its own costs associated with the disposition of any assets or liabilities not being transferred to High Grade in connection with the Acquisitions. NOTE B: Significant Accounting Policies High Grade's pro forma financial statements have been prepared in conformity with U.S. generally accepted accounting principles, 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. 1. Security Valuation Portfolio securities are valued at their current market value determined on the basis of market quotations or, if market quotations are not readily available or are deemed unreliable, at "fair value" as determined in accordance with procedures established by and under the general supervision of the Fund's Board of Directors. In general, the market value of securities which are readily available and deemed reliable are determined as follows. Securities listed on a national securities exchange (other than securities listed on The NASDAQ Stock Market, Inc. ("NASDAQ")) or on a foreign securities exchange are valued at the last sale price at the close of the exchange or foreign securities exchange. If there has been no sale on such day, the securities are valued at the mean of the closing bid and asked prices on such day. Securities listed on more than one exchange are valued by reference to the principal exchange on which the securities are traded; securities listed only on NASDAQ are valued in accordance with the NASDAQ Official Closing Price; listed put or call options are valued at the last sale price. If there has been no sale on that day, such securities will be valued at the closing bid prices on that day; open futures contracts and options thereon are valued using the closing settlement price or, in the absence of such a price, the most recent quoted bid price. If there are no quotations available for the day of valuation, the last available closing settlement price is used; securities traded in the over-the-counter market, ("OTC") are valued at the mean of the current bid and asked prices as reported by the National Quotation Bureau or other comparable sources; U.S. Government securities and other debt instruments having 60 days or less remaining until maturity are valued at amortized cost if their original maturity was 60 days or less; or by amortizing their fair value as of the 61st day prior to maturity if their original term to maturity exceeded 60 days; fixed-income securities, including mortgage backed and asset backed securities, may be valued on the basis of prices provided by a pricing service or at a price obtained from one or more of the major broker/dealers. In cases where broker/dealer quotes are obtained, AllianceBernstein L.P. (the "Adviser") may establish procedures whereby changes in market yields or spreads are used to adjust, on a daily basis, a recently obtained quoted price on a security; and OTC and other derivatives are valued on the basis of a quoted bid price or spread from a major broker/dealer in such security. Securities for which market quotations are not readily available (including restricted securities) or are deemed unreliable are valued at fair value. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, analysis of the issuer's financial statements or other available documents. In addition, the Fund may use fair value pricing for securities primarily traded in non-U.S. markets because, most foreign markets close well before the Fund values its securities at 4:00 p.m., Eastern Time. The earlier close of these foreign markets gives rise to the possibility that significant events, including broad market moves, may have occurred in the interim and may materially affect the value of those securities. 2. Currency Translation Assets and liabilities denominated in foreign currencies and commitments under forward currency exchange 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 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 High Grade'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. 3. Taxes It is the policy of High Grade 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. High Grade may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on income and/or capital gains earned or repatriated. Taxes are accrued and applied to net investment income, net realized gains and net unrealized appreciation/depreciation as such income and/or gains are earned. 4. Investment Income and Investment Transactions Dividend income is recorded on the ex-dividend date or as soon as High Grade is informed of the dividend. Interest income is accrued daily. Investment transactions are accounted for on the trade date securities are purchased or sold. Investment gains and losses are determined on the identified cost basis. High Grade amortizes premiums and accretes discounts as adjustments to interest income. 5. Class Allocations All income earned and expenses incurred by High Grade are borne on a pro-rata basis by each outstanding class of shares, based on the proportionate interest in High Grade represented by the net assets of such class, except for class specific expenses which are allocated to the respective class. Realized and unrealized gains and losses are allocated among the various share classes based on their respective net assets. 6. Dividends and Distributions High Grade declares and distributes dividends and distributions from net investment income and net realized gains, respectively, if any, at least annually. Income dividends and capital gains distributions to shareholders are recorded on the ex-dividend date. Income dividends and capital gains distributions are determined in accordance with federal tax regulations and may differ from those determined in accordance with U.S. generally accepted accounting principles. To the extent these differences are permanent, such amounts are reclassified within the capital accounts based on their federal tax basis treatment; temporary differences do not require such reclassification. NOTE C: Advisory Fee and Other Transactions with Affiliates Under the terms of the investment advisory agreement, High Grade pays the Adviser an advisory fee at an annual rate of .45% of the first $2.5 billion, ..40% of the next $2.5 billion and .35% in excess $5 billion, of High Grade's average daily net assets. The fee is accrued daily and paid monthly. Pursuant to the advisory agreement, High Grade paid $94,000 to the Adviser representing the cost of certain legal and accounting services provided to the Portfolio by the Adviser for the twelve months ended September 30, 2007. High Grade compensates AllianceBernstein Investor Services, Inc., a wholly-owned subsidiary of the Adviser, under a Transfer Agency Agreement for providing personnel and facilities to perform transfer agency services for High Grade. NOTE D: Distribution Plan High Grade has adopted a Distribution Plan (the "Plan") for Class B shares pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the Plan, High Grade pays distribution and servicing fees to AllianceBernstein Investments, Inc. (the "Distributor"), a wholly owned subsidiary of the Adviser, at an annual rate of up to .50% of High Grade's average daily net assets attributable to Class B shares. The fees are accrued daily and paid monthly. The Board of Directors currently limits payments under the Plan to .25% of High Grade's average daily net assets attributable to Class B shares. The Plan provides that the Distributor will use such payments in their entirety for distribution assistance and promotional activities. NOTE E: Capital Stock The pro forma net asset value per share assumes the issuance of High Grade shares to Acquired Portfolio shareholders in connection with the Acquisitions. The number of shares assumed to be issued is equal to the net asset value of the Acquired Portfolio divided by the net asset value per share of High Grade as of September 30, 2007. The pro forma number of shares outstanding, by class for the combined entity consists of the following at September 30, 2007. Additional Shares Shares of Assumed Issued Total Shares High Grade with the Outstanding Class of Shares Pre-Combination Acquisitions Post-Acquisitions --------------- ------------------- ------------------ ----------------- Class A 5,977,348 9,204,544 15,181,892 Class B 1,791,143 2,839,943 4,631,086 SK 00250 0456 853881v1 PART C OTHER INFORMATION Item 15. Indemnification It is the Registrant's policy to indemnify its directors and officers, employees and other agents to the maximum extent permitted by Section 2-418 of the General Corporation Law of the State of Maryland, which is incorporated by reference herein and as set forth in Article EIGHTH of Registrant's Charter, filed as Exhibit (a), Article IX of the Registrant's Amended and Restated By-Laws filed as Exhibit (b) and Section 9 of the Distribution Services Agreement filed as Exhibit (e)(1) and Class B Distribution Services Agreement filed as Exhibit (e)(2) in response to Item 23 of the Registrant's Registration Statement filed on Form N-1A (filed Nos. 33-18647 and 811-5398), as set forth below. The Adviser's liability for any loss suffered by the Registrant or its shareholders is set forth in Section 4 of the Advisory Agreement filed as Exhibit (d)(1) in response to Item 23 of the Registrant's Registration Statement filed on Form N-1A (filed Nos. 33-18647 and 811-5398), as set forth below. Article EIGHTH of the Registrant's Charter reads as follows: EIGHTH: (1) To the maximum extent that Maryland law in effect from time to time permits limitation of the liability of directors and officers of a corporation, no present or former director or officer of the Corporation shall be liable to the Corporation or its stockholders for money damages. (2) The Corporation shall have the power, to the maximum extent permitted by Maryland law in effect from time to time, to obligate itself to indemnify, and to pay or reimburse reasonable expenses in advance of final disposition of a proceeding to, (a) any individual who is a present or former director or officer of the Corporation or (b) any individual who, while a director or officer of the Corporation and at the request of the Corporation, serves or has served as a director, officer, partner or trustee of another corporation, real estate investment trust, partnership, joint venture, trust, employee benefit plan or any other enterprise from and against any claim or liability to which such person may become subject or which such person may incur by reason of his status as a present or former director or officer of the Corporation. The Corporation shall have the power, with the approval of the Board of Directors, to provide such indemnification and advancement of expenses to a person who served a predecessor of the Corporation in any of the capacities described in (a) or (b) above and to any employee or agent of the Corporation or a predecessor of the Corporation. (3) The provisions of this Article EIGHTH shall be subject to the limitations of the Investment Company Act. (4) Neither the amendment nor repeal of this Article EIGHTH, nor the adoption or amendment of any other provision of the Charter or Bylaws inconsistent with this Article EIGHTH, shall apply to or affect in any respect the applicability of the preceding sections of this Article EIGHTH with respect to any act or failure to act which occurred prior to such amendment, repeal or adoption. The Advisory Agreement between the Registrant and AllianceBernstein L.P. provides that AllianceBernstein L.P. will not be liable under such agreements for any mistake of judgment or in any event whatsoever except for lack of good faith and that nothing therein shall be deemed to protect, or purport to protect, AllianceBernstein L.P. against any liability to Registrant or its security holders to which it would otherwise be subject by reason of willful misfeasance, bad faith or gross negligence in the performance of its duties thereunder, or by reason of reckless disregard of its obligations or duties thereunder. The Distribution Services Agreement between the Registrant and AllianceBernstein Investments, Inc. ("ABI") provides that the Registrant will indemnify, defend and hold ABI, and any person who controls it within the meaning of Section 15 of the Securities Act of 1933, as amended (the "Securities Act"), free and harmless from and against any and all claims, demands, liabilities and expenses which ABI or any controlling person may incur arising out of or based upon any alleged untrue statement of a material fact contained in Registrant's Registration Statement or Prospectus or Statement of Additional Information or arising out of, or based upon any alleged omission to state a material fact required to be stated in either thereof or necessary to make the statements in any thereof not misleading, provided that nothing therein shall be so construed as to protect ABI against any liability to Registrant or its security holders to which it would otherwise be subject by reason of willful misfeasance, bad faith or gross negligence in the performance of its duties, or be reason of reckless disregard of its obligations or duties thereunder. The foregoing summaries are qualified by the entire text of Registrant's Articles of Incorporation, the Advisory Agreement between the Registrant and AllianceBernstein L.P. and the Distribution Services Agreement between the Registrant and ABI. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that, in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. In accordance with Release No. IC-11330 (September 2, 1980), the Registrant will indemnify its directors, officers, investment manager and principal underwriters only if (1) a final decision on the merits was issued by the court or other body before whom the proceeding was brought that the person to be indemnified (the indemnitee) was not liable by reason or willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his office (disabling conduct) or (2) a reasonable determination is made, based upon a review of the facts, that the indemnitee was not liable by reason of disabling conduct, by (a) the vote of a majority of a quorum of the directors who are neither interested persons of the Registrant as defined in section 2(a)(19) of the Investment Company Act of 1940 nor parties to the proceeding (disinterested, non-party directors), or (b) an independent legal counsel in a written opinion. The Registrant will advance attorneys fees or other expenses incurred by its directors, officers, investment adviser or principal underwriters in defending a proceeding, upon the undertaking by or on behalf of the indemnitee to repay the advance unless it is ultimately determined that he is entitled to indemnification and, as a condition to the advance, (1) the indemnitee shall provide a security for his undertaking, (2) the Registrant shall be insured against losses arising by reason of any lawful advances, or (3) a majority of a quorum of disinterested, non-party directors of the Registrant, or an independent legal counsel in a written opinion, shall determine, based on a review of readily available facts (as opposed to a full trial-type inquiry), that there is reason to believe that the indemnitee ultimately will be found entitled to indemnification. ARTICLE IX of the Registrant's Amended and Restated By-laws reads as follows: ARTICLE IX. Indemnification. To the maximum extent permitted by Maryland law in effect from time to time, the Corporation shall indemnify and, without requiring a preliminary determination of the ultimate entitlement to indemnification, shall pay or reimburse reasonable expenses in advance of final disposition of a proceeding to (a) any individual who is a present or former director or officer of the Corporation and who is made or threatened to be made a party to the proceeding by reason of his or her service in any such capacity or (b) any individual who, while a director or officer of the Corporation and at the request of the Corporation, serves or has served as a director, officer, partner or trustee of another corporation, real estate investment trust, partnership, joint venture, trust, employee benefit plan or other enterprise and who is made or threatened to be made a party to the proceeding by reason of his or her service in any such capacity. The Corporation may, with the approval of its Board of Directors or any duly authorized committee thereof, provide such indemnification and advance for expenses to a person who served a predecessor of the Corporation in any of the capacities described in (a) or (b) above and to any employee or agent of the Corporation or a predecessor of the Corporation. The termination of any claim, action, suit or other proceeding involving any person, by judgment, settlement (whether with or without court approval) or conviction or upon a plea of guilty or nolo contendere, or its equivalent, shall not create a presumption that such person did not meet the standards of conduct required for indemnification or payment of expenses to be required or permitted under Maryland law, these Bylaws or the Charter. Any indemnification or advance of expenses made pursuant to this Article shall be subject to applicable requirements of the 1940 Act. The indemnification and payment of expenses provided in these Bylaws shall not be deemed exclusive of or limit in any way other rights to which any person seeking indemnification or payment of expenses may be or may become entitled under any bylaw, regulation, insurance, agreement or otherwise. Neither the amendment nor repeal of this Article, nor the adoption or amendment of any other provision of the Bylaws or Charter inconsistent with this Article, shall apply to or affect in any respect the applicability of the preceding paragraph with respect to any act or failure to act which occurred prior to such amendment, repeal or adoption. The Registrant participates in a joint directors and officers liability insurance policy issued by the ICI Mutual Insurance Company. Coverage under this policy has been extended to directors, trustees and officers of the investment companies managed by AllianceBernstein L.P. Under this policy, outside trustees and directors are covered up to the limits specified for any claim against them for acts committed in their capacities as trustee or director. A pro rata share of the premium for this coverage is charged to each investment company and to the Adviser. ITEM 16. EXHIBITS: (1) Articles of Amendment and Restatement of the Registrant dated February 1, 2006 - Incorporated by reference to Exhibit (a)(2) to Post-Effective Amendment No. 41 of Registrant's Registration Statement on Form N-1A (File Nos. 33-18647 and 811-5398) filed with the Securities and Exchange Commission on March 1, 2006. (2) Amended and Restated By-Laws of the Registrant - Incorporated by reference to Exhibit 99.77Q1 - Other Exhibits to Form NSAR-A for the Registrant filed with the Securities and Exchange Commission on August 29, 2006. (3) Not applicable. (4) Form of Plan of Acquisition and Liquidation between AllianceBernstein U.S Government/High Grade Securities Portfolio and AllianceBernstein High Yield Portfolio, AllianceBernstein Global Bond Portfolio, AllianceBernstein Americas Government Income Portfolio and AllianceBernstein Global Dollar Government Portfolio, each a series of AllianceBernstein Variable Products Series Fund, Inc. - Constitutes Appendix F to Part A hereof. (5) Not applicable. (6) (a) Form of Investment Advisory Agreement between Registrant and AllianceBernstein L.P. - Incorporated by reference to Exhibit (d)(1) to Post-Effective Amendment No. 40 of Registrant's Registration Statement on Form N-1A (File Nos. 33-18647 and 811-5398) filed with the Securities and Exchange Commission on April 27, 2005. (b) Sub-Advisory Agreement between AllianceBernstein L.P. and Law, Dempsey & Company Limited, relating to the Global Bond Portfolio - Incorporated by reference to Exhibit (5)(b) to Post-Effective Amendment No. 22 of Registrant's Registration Statement on Form N-1A (File Nos. 33-18647 and 811-5398) filed with the Securities and Exchange Commission on April 29, 1998. (7) (a) Distribution Services Agreement between the Registrant and AllianceBernstein Investments, Inc. - Incorporated by reference to Exhibit (6) to Post-Effective Amendment No. 22 of Registrant's Registration Statement on Form N-1A (File Nos. 33-18647 and 811-5398) filed with the Securities and Exchange Commission on April 29, 1998. (b) Class B Distribution Services Agreement between the Registrant and AllianceBernstein Investments, Inc. - Incorporated by reference to Exhibit (c)(2) to Post-Effective Amendment No. 27 of Registrant's Registration Statement on Form N-1A (File Nos. 33-18647 and 811-5398) filed with the Securities and Exchange Commission on May 3, 1999. (8) Not applicable. (9) Custody Agreement between the Registrant and The Bank of New York - Incorporated by reference to Exhibit (g)(1) to Post-Effective Amendment No. 42 of Registrant's Registration Statement on Form N-1A (File Nos. 33-18647 and 811-5398) filed with the Securities and Exchange Commission on April 28, 2006. 10) (a) Rule 12b-1 Class B Distribution Plan - Incorporated by reference to Exhibit (m) to Post-Effective Amendment No. 27 of Registrant's Registration Statement on Form N-1A (File Nos. 33-18647 and 811-5398) filed with the Securities and Exchange Commission on May 3, 1999. (b) Amended and Restated Rule 18f-3 Plan - Incorporated by reference to Exhibit (n) to Post-Effective Amendment No. 36 of the Registrant's Registration Statement on Form N-1A (File Nos. 33-18647 and 811-5398) filed with the Securities and Exchange Commission on February 11, 2004. (11) Form of Opinion and Consent of Seward & Kissel LLP regarding the legality of securities being registered - Filed herewith. (12) Form of Opinion and Consent of Seward & Kissel LLP as to Tax matters - To be filed by amendment. 13) (a) Transfer Agency Agreement between the Registrant and AllianceBernstein Investor Services, Inc. - Incorporated by reference to Exhibit (9) to Post-Effective Amendment No. 22 of Registrant's Registration Statement on Form N-1A (File Nos. 33-18647 and 811-5398) filed with the Securities and Exchange Commission on April 29, 1998. (b) Expense Limitation Undertaking by AllianceBernstein L.P. - Incorporated by reference to Exhibit (h)(2) to Post-Effective Amendment No. 40 of Registrant's Registration Statement on Form N-1A (File Nos. 33-18647 and 811-5398) filed with the Securities and Exchange Commission on April 27, 2005. (c) Form of Expense Limitation Undertaking by AllianceBernstein L.P. - Incorporated by reference to Post-Effective Amendment No. 41 of Registrant's Registration Statement on Form N-1A (File Nos. 33-18647 and 811-5398) filed with the Securities and Exchange Commission on March 1, 2006. (d) Code of Ethics for the Fund - Incorporated by reference to Exhibit (p)(1) to Post-Effective Amendment No. 31 of Registrant's Registration Statement on Form N-1A (File Nos. 33-18647 and 811-5398) filed with the Securities and Exchange Commission on April 26, 2001. (e) Code of Ethics for the AllianceBernstein L.P. and AllianceBernstein Investments, Inc. - Incorporated by reference to Exhibit (p)(2) to Post-Effective Amendment No. 4 of the Registration Statement on Form N-1A of The AllianceBernstein Pooling Portfolios (File Nos. 333-120487 and 811-21673) filed with the Securities and Exchange Commission on December 29, 2006. (14) Consent of Independent Registered Public Accounting Firm - Filed herewith. (15) Not applicable. (16) Powers of Attorney for: David H. Dievler, John H. Dobkin, Michael J. Downey, William H. Foulk, Jr., D. James Guzy, Nancy P. Jacklin, Marc O. Mayer, Marshall C. Turner, Jr. and Earl D. Weiner - Filed herewith. (17) Not applicable. ITEM 17. Undertakings (1) The undersigned registrant agrees that prior to any public reoffering of the securities registered through the use of a prospectus which is a part of this registration statement by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c) of the Securities Act 17 CFR 230.145(c), the reoffering prospectus will contain the information called for by the applicable registration form for reofferings by persons who may be deemed underwriters, in addition to the information called for by the other items of the applicable form. (2) The undersigned registrant agrees that every prospectus that is filed under paragraph (1) above will be filed as a part of an amendment to the registration statement and will not be used until the amendment is effective, and that, in determining any liability under the 1933 Act, each post-effective amendment shall be deemed to be a new registration statement for the securities offered therein, and the offering of the securities at that time shall be deemed to be the initial bona fide offering of them. (3) The undersigned registrant undertakes to file a post-effective amendment to this registration statement upon the closing of the Acquisition described in this registration statement that contains an opinion of counsel supporting the tax matters discussed in this registration statement. SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as the Registrant has duly caused this Registration Statement on Form N-14 to be signed on its behalf by the undersigned, duly authorized, in the City of New York and State of New York, on the 15th day of February, 2008. ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND, INC. By: Marc O. Mayer* -------------- Marc O. Mayer President Pursuant to the requirements of the Securities Act of 1933, as amended Registration Statement has been signed below by the following persons in the capacities and on the date indicated: SIGNATURE TITLE DATE --------- ----- ---- 1. Principal Executive Officer Marc O. Mayer* President and Chief Executive Officer February 15, 2008 2. Principal Financial and Accounting Officer /s/ Joseph J. Mantineo Treasurer and ------------------------- Joseph J. Mantineo Chief Financial Officer February 15, 2008 3. Majority of the Directors: David H. Dievler* John H. Dobkin* William H. Foulk, Jr.* Michael Downey* D. James Guzy* Nancy P. Jacklin* Marc O. Mayer* Marshall C. Turner, Jr.* Earl D. Weiner* *By: /s/ Andrew L. Gangolf February 15, 2008 ----------------------- Andrew L. Gangolf (Attorney-in-fact) INDEX TO EXHIBITS Exhibit No. Description of Exhibits (11) Form of Opinion and Consent of Seward & Kissel LLP (14) Consent of Independent Registered Public Accounting Firm (16) Powers of Attorney SK 00250 0455 854666 EX-11 2 d856364_ex-11.txt February 15, 2008 AllianceBernstein Variable Products Series Fund, Inc. 1345 Avenue of the Americas New York, New York 10105 Ladies and Gentlemen: We are counsel to AllianceBernstein Variable Products Series Fund, Inc., a Maryland corporation (the "Fund"). The opinions set forth below are being rendered in connection with the Fund's registration statement on Form N-14 (the "Registration Statement") to be filed with the Securities and Exchange Commission (the "Commission") under the Securities Act of 1933, as amended (the "Securities Act"), in which this letter is to be included as an exhibit. The Fund is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end management investment company (File No. 811-5398). The Registration Statement pertains to the proposed issuance by AllianceBernstein U.S. Government/High Grade Securities Portfolio ("High Grade"), a series of the Fund, of shares of High Grade's Class A Common Stock and Class B Common Stock, par value $.001 per share (each a "Class" and, collectively the "Shares"), pursuant to four Plans of Acquisition and Liquidation, a form of which is included as Appendix F to the Prospectus in Part A of the Registration Statement (the "Plan"). The Plan will provide for the transfer of all of the assets and liabilities of AllianceBernstein High Yield Portfolio, AllianceBernstein Global Bond Portfolio, AllianceBernstein Americas Government Income Portfolio and AllianceBernstein Global Dollar Government Portfolio, each a series of the Fund (collectively, the "Acquired Portfolios"), to High Grade. We have examined the Charter and By-Laws of the Fund, the Plan in the form approved by the Board of Directors of the Fund and a copy of the Registration Statement in which this letter is to be included as an exhibit. In addition, we have relied upon a certificate of an Assistant Secretary of the Fund certifying that the form of Plan presented to us is in the form approved by the Board of Directors of the Fund and further certifying the resolutions of the Board of Directors of the Fund approving the Plan and authorizing the issuance of the Shares pursuant thereto. We have also examined and relied upon such corporate records of the Fund and other documents and certificates with respect to factual matters as we have deemed necessary to render the opinion expressed herein. We have assumed, without independent verification, the genuineness of all signatures, the authenticity of all documents submitted to us as originals, and the conformity with originals of all documents submitted to us as copies. Based on such examination and assumptions, we are of the opinion and so advise you that: (i) The Fund has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Maryland and is registered under the 1940 Act, as an open-end, management investment company; and (ii) The Shares proposed to be issued in accordance with the terms of the Plan, to the extent that the number of Shares of the relevant Class or Classes to be issued and distributed to shareholders of the Acquired Portfolios does not exceed the number of authorized and unissued shares of such Class or Classes at the time of their issuance, when so issued, will constitute validly issued shares, fully paid and nonassessable, under the laws of the State of Maryland. We do not express an opinion with respect to any laws other than the laws of Maryland applicable to the due authorization, valid issuance and nonassessability of shares of common stock of corporations formed pursuant to the provisions of the Maryland General Corporation Law. Accordingly, our opinion does not extend to, among other laws, the federal securities laws or the securities or "blue sky" laws of Maryland or any other jurisdiction. We hereby consent to the filing of this opinion with the Commission as an exhibit to the Registration Statement and to the reference to our firm under the caption "General Information - Legal Matters" contained in the Registration Statement. In giving this consent, we do not admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the Commission. Please be advised that we are opining as set forth above as members of the bar in the State of New York and the District of Columbia. Very truly yours, SK 00250 0456 856364 EX-14 3 d839032_ex-14.txt CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM We consent to the reference to our firm under the captions "Information about the Portfolios - Other Service Providers", "Experts" and "Appendix J - Financial Highlights" and to the incorporation by reference of our reports,dated February 12, 2007, with respect to the financial statements, for the year ended December 31, 2006, of the AllianceBernstein U.S. Government/High Grade Portfolio, AllianceBernstein High Yield Portfolio, AllianceBernstein Global Bond Portfolio, AllianceBernstein Americas Government Income Portfolio, and the AllianceBernstein Global Dollar Government Portfolio, five of the Portfolios constituting the AllianceBernstein Variable Products Series Fund, Inc., included in this Registration Statement on Form N-14 under the Securities Act of 1933 of the AllianceBernstein Variable Products Series Fund, Inc. ERNST & YOUNG LLP New York, New York February 12, 2008 EX-99 4 d812282_poa.txt POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that the person whose signature appears below hereby revokes all prior powers granted by the undersigned to the extent inconsistent herewith and constitutes and appoints Marc O. Mayer, Andrew L. Gangolf, Emilie D. Wrapp, Nancy Hay, and, Stephen J. Laffey and each of them, to act severally as attorneys-in-fact and agents, with power of substitution and resubstitution, for the undersigned in any and all capacities, solely for the purpose of signing the Registration Statement, and any amendments thereto, on Form N-14 of AllianceBernstein Variable Products Series Fund, Inc. and filing the same, with exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorneys-in-fact, or their substitute or substitutes, may do or cause to be done by virtue hereof. /s/ David H. Dievler -------------------------- David H. Dievler Dated: September 25, 2007 POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that the person whose signature appears below hereby revokes all prior powers granted by the undersigned to the extent inconsistent herewith and constitutes and appoints Marc O. Mayer, Andrew L. Gangolf, Emilie D. Wrapp, Nancy Hay, and, Stephen J. Laffey and each of them, to act severally as attorneys-in-fact and agents, with power of substitution and resubstitution, for the undersigned in any and all capacities, solely for the purpose of signing the Registration Statement, and any amendments thereto, on Form N-14 of AllianceBernstein Variable Products Series Fund, Inc. and filing the same, with exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorneys-in-fact, or their substitute or substitutes, may do or cause to be done by virtue hereof. /s/ John H. Dobkin -------------------------- John H. Dobkin Dated: September 25, 2007 POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that the person whose signature appears below hereby revokes all prior powers granted by the undersigned to the extent inconsistent herewith and constitutes and appoints Marc O. Mayer, Andrew L. Gangolf, Emilie D. Wrapp, Nancy Hay, and, Stephen J. Laffey and each of them, to act severally as attorneys-in-fact and agents, with power of substitution and resubstitution, for the undersigned in any and all capacities, solely for the purpose of signing the Registration Statement, and any amendments thereto, on Form N-14 of AllianceBernstein Variable Products Series Fund, Inc. and filing the same, with exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorneys-in-fact, or their substitute or substitutes, may do or cause to be done by virtue hereof. /s/ Michael J. Downey -------------------------- Michael J. Downey Dated: September 25, 2007 POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that the person whose signature appears below hereby revokes all prior powers granted by the undersigned to the extent inconsistent herewith and constitutes and appoints Marc O. Mayer, Andrew L. Gangolf, Emilie D. Wrapp, Nancy Hay, and, Stephen J. Laffey and each of them, to act severally as attorneys-in-fact and agents, with power of substitution and resubstitution, for the undersigned in any and all capacities, solely for the purpose of signing the Registration Statement, and any amendments thereto, on Form N-14 of AllianceBernstein Variable Products Series Fund, Inc. and filing the same, with exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorneys-in-fact, or their substitute or substitutes, may do or cause to be done by virtue hereof. /s/ William H. Foulk, Jr. -------------------------- William H. Foulk, Jr. Dated: September 25, 2007 POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that the person whose signature appears below hereby revokes all prior powers granted by the undersigned to the extent inconsistent herewith and constitutes and appoints Marc O. Mayer, Andrew L. Gangolf, Emilie D. Wrapp, Nancy Hay, and, Stephen J. Laffey and each of them, to act severally as attorneys-in-fact and agents, with power of substitution and resubstitution, for the undersigned in any and all capacities, solely for the purpose of signing the Registration Statement, and any amendments thereto, on Form N-14 of AllianceBernstein Variable Products Series Fund, Inc. and filing the same, with exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorneys-in-fact, or their substitute or substitutes, may do or cause to be done by virtue hereof. /s/ D. James Guzy -------------------------- D. James Guzy Dated: September 25, 2007 POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that the person whose signature appears below hereby revokes all prior powers granted by the undersigned to the extent inconsistent herewith and constitutes and appoints Marc O. Mayer, Andrew L. Gangolf, Emilie D. Wrapp, Nancy Hay, and, Stephen J. Laffey and each of them, to act severally as attorneys-in-fact and agents, with power of substitution and resubstitution, for the undersigned in any and all capacities, solely for the purpose of signing the Registration Statement, and any amendments thereto, on Form N-14 of AllianceBernstein Variable Products Series Fund, Inc. and filing the same, with exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorneys-in-fact, or their substitute or substitutes, may do or cause to be done by virtue hereof. /s/ Nancy P. Jacklin -------------------------- Nancy P. Jacklin Dated: September 25, 2007 POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that the person whose signature appears below hereby revokes all prior powers granted by the undersigned to the extent inconsistent herewith and constitutes and appoints Marc O. Mayer, Andrew L. Gangolf, Emilie D. Wrapp, Nancy Hay, and, Stephen J. Laffey and each of them, to act severally as attorneys-in-fact and agents, with power of substitution and resubstitution, for the undersigned in any and all capacities, solely for the purpose of signing the Registration Statement, and any amendments thereto, on Form N-14 of AllianceBernstein Variable Products Series Fund, Inc. and filing the same, with exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorneys-in-fact, or their substitute or substitutes, may do or cause to be done by virtue hereof. /s/ Marshall C. Turner Jr. -------------------------- Marshall C. Turner Jr. Dated: September 25, 2007 POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that the person whose signature appears below hereby revokes all prior powers granted by the undersigned to the extent inconsistent herewith and constitutes and appoints Marc O. Mayer, Andrew L. Gangolf, Emilie D. Wrapp, Nancy Hay, and, Stephen J. Laffey and each of them, to act severally as attorneys-in-fact and agents, with power of substitution and resubstitution, for the undersigned in any and all capacities, solely for the purpose of signing the Registration Statement, and any amendments thereto, on Form N-14 of AllianceBernstein Variable Products Series Fund, Inc. and filing the same, with exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorneys-in-fact, or their substitute or substitutes, may do or cause to be done by virtue hereof. /s/ Marc O. Mayer -------------------------- Marc O. Mayer Dated: September 25, 2007 POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that the person whose signature appears below hereby revokes all prior powers granted by the undersigned to the extent inconsistent herewith and constitutes and appoints Marc O. Mayer, Andrew L. Gangolf, Emilie D. Wrapp, Nancy Hay, and, Stephen J. Laffey and each of them, to act severally as attorneys-in-fact and agents, with power of substitution and resubstitution, for the undersigned in any and all capacities, solely for the purpose of signing the Registration Statement, and any amendments thereto, on Form N-14 of AllianceBernstein Variable Products Series Fund, Inc. and filing the same, with exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorneys-in-fact, or their substitute or substitutes, may do or cause to be done by virtue hereof. /s/ Earl D. Weiner -------------------------- Earl D. Weiner Dated: September 25, 2007 SK 00250 0073 812282 COVER 5 filename5.txt SEWARD & KISSEL LLP 1200 G Street, N.W. Washington, D.C. 20005 Telephone: (202) 737-8833 Facsimile: (202) 737-5184 February 15, 2008 Ms. Linda Sterling Securities and Exchange Commission 100 F Street, N.E. Washington, D.C. 20549 RE: AllianceBernstein Variable Products Series Fund, Inc. (the "Fund") (File Nos. 33-18647 and 811-05398) Dear Sir or Madam: Attached for filing is the Fund's Registration Statement on Form N-14 in connection with the acquisitions of all of the assets and all of the liabilities of AllianceBernstein High Yield Portfolio, AllianceBernstein Global Bond Portfolio, AllianceBernstein Americas Government Income Portfolio and AllianceBernstein Global Dollar Government Portfolio, each a series of the Fund by AllianceBernstein U.S Government/High Grade Securities Portfolio, a series of the Fund. This Registration Statement is filed pursuant to Rule 488 under the 1933 Act. If you have any questions regarding the filing, you can contact Kathleen Clarke or the undersigned at 202-737-8833. Sincerely, /s/ Young Seo ------------- Young Seo cc: Kathleen Clarke SK 00250 0455 856356