-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Du+eRXNUs/+fyZAPuUlIfKPZsSxTyZ11aP0hyLqu8Hz9k9pExCxlfKkTIVEFIYi/ jLJ2TIWI0T5WoQhFW+lY5A== /in/edgar/work/20000821/0000936772-00-000243/0000936772-00-000243.txt : 20000922 0000936772-00-000243.hdr.sgml : 20000922 ACCESSION NUMBER: 0000936772-00-000243 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20000630 FILED AS OF DATE: 20000821 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALLIANCE VARIABLE PRODUCTS SERIES FUND INC CENTRAL INDEX KEY: 0000825316 STANDARD INDUSTRIAL CLASSIFICATION: [ ] FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-05398 FILM NUMBER: 706745 BUSINESS ADDRESS: STREET 1: 500 PLAZA DRIVE STREET 2: 1345 AVENUE OF THE AMERICAS 31ST FL CITY: NEW YORK STATE: NY ZIP: 10105 BUSINESS PHONE: 2013194105 MAIL ADDRESS: STREET 1: ALLIANCE CAPITAL MANGEMENT LP STREET 2: 1345 AVENUE OF THE AMERICAS CITY: NEW YORK STATE: NY ZIP: 10105 N-30D 1 0001.txt ALLIANCE ------------------------- VARIABLE PRODUCTS ------------------------- SERIES FUND ------------------------- TOTAL RETURN PORTFOLIO ------------------------- SEMI-ANNUAL REPORT JUNE 30, 2000 (UNAUDITED) Investment Products Offered --------------------------- > Are Not FDIC Insured > May Lose Value > Are Not Bank Guaranteed --------------------------- TOTAL RETURN PORTFOLIO TEN LARGEST HOLDINGS June 30, 2000 (unaudited) Alliance Variable Products Series Fund ================================================================================ - -------------------------------------------------------------------------------- U.S. $ VALUE PERCENT OF NET ASSETS - -------------------------------------------------------------------------------- U.S. Treasury Notes $ 6,744,995 8.7% - -------------------------------------------------------------------------------- U.S. Treasury Bonds 3,915,633 5.0 - -------------------------------------------------------------------------------- United Technologies Corp. 2,107,725 2.7 - -------------------------------------------------------------------------------- Kroger Co. 1,974,594 2.5 - -------------------------------------------------------------------------------- Pepsi Bottling Group, Inc. 1,850,487 2.4 - -------------------------------------------------------------------------------- First Data Corp. 1,831,162 2.3 - -------------------------------------------------------------------------------- Chase Manhattan Corp. 1,812,559 2.3 - -------------------------------------------------------------------------------- Tenet Healthcare Corp. 1,787,400 2.3 - -------------------------------------------------------------------------------- Tyco International, Ltd. 1,752,875 2.3 - -------------------------------------------------------------------------------- Household International, Inc. 1,720,687 2.2 - -------------------------------------------------------------------------------- $25,498,117 32.7% - -------------------------------------------------------------------------------- 1 TOTAL RETURN PORTFOLIO PORTFOLIO OF INVESTMENTS June 30, 2000 (unaudited) Alliance Variable Products Series Fund ================================================================================ Company Shares U.S. $ Value - -------------------------------------------------------------------------------- COMMON STOCKS - 61.6% FINANCE - 12.2% BANKING - MONEY CENTERS - 5.0% Bank One Corp. ............................. 15,400 $ 409,063 BankAmerica Corp. .......................... 34,100 1,466,300 Chase Manhattan Corp. ...................... 39,350 1,812,559 FleetBoston Financial Corp. ................ 6,700 227,800 ---------- 3,915,722 ---------- INSURANCE - 2.7% AFLAC, Inc. ................................ 10,900 500,719 Citigroup, Inc. ............................ 16,400 988,100 MGIC Investment Corp. ...................... 4,900 222,950 PMI Group, Inc. ............................ 8,400 399,000 ---------- 2,110,769 ---------- MISCELLANEOUS - 4.5% Associates First Capital Corp. Cl.A .................................... 52,800 1,178,100 Household International, Inc. .............. 41,400 1,720,687 MBNA Corp. ................................. 14,250 386,531 The CIT Group, Inc. Cl.A ................... 11,430 185,738 ---------- 3,471,056 ---------- 9,497,547 ---------- TECHNOLOGY - 8.4% COMPUTER HARDWARE - 1.1% Compaq Computer Corp. ...................... 14,300 365,544 Gateway, Inc. (a) .......................... 8,200 465,350 ---------- 830,894 ---------- COMPUTER SERVICES - 3.5% Computer Sciences Corp. (a) ................ 5,700 425,719 Electronic Data Systems Corp. .............. 11,500 474,375 First Data Corp. ........................... 36,900 1,831,162 ---------- 2,731,256 ---------- SEMI-CONDUCTOR COMPONENTS - 2.0% Altera Corp. (a) ........................... 4,900 499,494 Fairchild Semiconductor Corp. (a) ............................... 5,200 210,600 Micron Technology, Inc. (a) ................ 9,400 827,787 ---------- 1,537,881 ---------- MISCELLANEOUS - 1.8% Sanmina Corp. (a) .......................... 12,000 1,026,000 Solectron Corp. (a) ........................ 9,400 393,625 ---------- 1,419,625 ---------- 6,519,656 ---------- CONSUMER STAPLES - 7.8% BEVERAGES - 2.4% Pepsi Bottling Group, Inc. ................. 63,400 1,850,487 ---------- COSMETICS - 0.4% Avon Products, Inc. ........................ 7,500 333,750 ---------- FOOD - 1.3% General Mills, Inc. ........................ 8,400 $ 321,300 Heinz (H.J.) Co. ........................... 4,100 179,375 Nabisco Group Holding Corp .................................... 19,100 495,406 ---------- 996,081 ---------- RETAIL - FOOD & DRUG - 2.5% Kroger Co. (a) ............................. 89,500 1,974,594 ---------- TOBACCO - 1.2% Philip Morris Cos., Inc. ................... 34,200 908,438 ---------- 6,063,350 ---------- UTILITIES - 6.2% ELECTRIC & GAS UTILITIES - 2.9% Allegheny Energy, Inc. ..................... 5,400 147,825 CMS Energy Corp. ........................... 9,200 203,550 Duke Energy Corp. .......................... 7,000 394,625 Dynegy, Inc. ............................... 12,000 819,750 FPL Group, Inc. ............................ 10,000 495,000 GPU, Inc. .................................. 2,500 67,656 Pinnacle West Capital Corp. ................ 3,800 128,725 ---------- 2,257,131 ---------- TELEPHONE UTILITIES - 3.3% AT&T Corp. ................................. 12,550 396,894 Sprint Corp. ............................... 15,800 805,800 U.S. WEST, Inc. ............................ 4,900 420,175 WorldCom, Inc. (a) ......................... 21,489 985,808 ---------- 2,608,677 ---------- 4,865,808 ---------- CONSUMER SERVICES - 6.0% AIRLINES - 1.0% Continental Airlines, Inc. Cl.B (a) ........................... 17,200 808,400 ---------- BROADCASTING & CABLE - 2.2% A.H. Belo Corp. Series A ................... 20,900 361,831 Clear Channel Communications, Inc. (a) ................ 6,600 495,000 Comcast Corp. Cl.A ......................... 13,900 562,950 MediaOne Group, Inc. (a) ................... 4,800 318,306 ---------- 1,738,087 ---------- ENTERTAINMENT & LEISURE - 0.3% Royal Caribbean Cruises, Ltd. .................................... 12,500 231,250 ---------- PRINTING & PUBLISHING - 0.7% Gannett Co., Inc. .......................... 9,000 538,313 ---------- 2 Alliance Variable Products Series Fund ================================================================================ Company Shares U.S. $ Value - -------------------------------------------------------------------------------- RETAIL - GENERAL MERCHANDISE - 1.8% Circuit City Stores-Circuit City Group .............................. 13,800 $ 457,987 Limited, Inc. .............................. 27,400 592,525 Saks, Inc. (a) ............................. 31,300 328,650 ---------- 1,379,162 ---------- 4,695,212 ---------- HEALTH CARE - 5.0% DRUGS - 2.7% Abbott Laboratories ........................ 17,500 779,844 Schering-Plough Corp. ...................... 26,200 1,323,100 ---------- 2,102,944 ---------- MEDICAL SERVICES - 2.3% Tenet Healthcare Corp. (a) ................ 66,200 1,787,400 ---------- 3,890,344 ---------- ENERGY - 4.8% DOMESTIC INTEGRATED - 1.8% Kerr-Mcgee Corp. ........................... 8,800 518,650 USX-Marathon Group ......................... 33,800 847,112 ---------- 1,365,762 ---------- DOMESTIC PRODUCERS - 0.2% Murphy Oil Corp. ........................... 2,650 157,509 ---------- INTERNATIONAL - 1.4% BP Amoco Plc (ADR) ......................... 10,496 593,680 Total Fina, SA (ADR) ....................... 6,600 506,963 ---------- 1,100,643 ---------- OIL SERVICES - 0.7% Noble Drilling Corp. (a) ................... 13,200 543,675 ---------- MISCELLANEOUS - 0.7% AES Corp. (a) .............................. 12,600 574,875 ---------- 3,742,464 ---------- MULTI-INDUSTRY COMPANIES - 4.0% Honeywell International, Inc. .............. 34,137 1,149,990 Tyco International, Ltd. ................... 37,000 1,752,875 U.S. Industries, Inc. ...................... 18,600 225,525 ---------- 3,128,390 ---------- BASIC INDUSTRIES - 2.8% CHEMICALS - 1.9% Eastman Chemical Co. ....................... 8,400 401,100 Lyondell Chemical Co. ...................... 45,000 753,750 Solutia, Inc. .............................. 24,700 339,625 ---------- 1,494,475 ---------- MINING & METALS - 0.9% Alcoa, Inc. ................................ 24,600 713,400 ---------- 2,207,875 ---------- CAPITAL GOODS - 2.7% MISCELLANEOUS - 2.7% United Technologies Corp. .................. 35,800 2,107,725 ---------- Shares or Principal Amount Company (000) U.S. $ Value - -------------------------------------------------------------------------------- CONSUMER MANUFACTURING - 0.8% BUILDING & RELATED - 0.8% Masco Corp. ........................................ 35,000 $ 632,188 ----------- TRANSPORTATION - 0.6% RAILROAD TRANSPORTATION - 0.6% Burlington Northern Santa Fe Corp. .................................. 20,000 458,750 ----------- CONSUMER NON-DURABLES - 0.3% TOYS - 0.3% Mattel, Inc. ....................................... 18,600 245,288 ----------- Total Common Stocks (cost $43,978,098) .............................. 48,054,597 ----------- U.S. GOVERNMENT OBLIGATIONS - 13.7% U.S. Treasury Bonds 6.25%, 8/15/23 .................................. 1,400 1,411,368 6.875%, 8/15/25 ................................. 1,000 1,089,840 8.125%, 8/15/19 ................................. 1,170 1,414,425 U.S. Treasury Notes 5.625%, 5/15/08 ................................. 2,500 2,411,725 6.50%, 10/15/06 ................................. 250 253,007 6.875%, 5/15/06 ................................. 1,750 1,801,135 7.25%, 5/15/04 .................................. 1,600 1,650,256 7.50%, 2/15/05 .................................. 600 628,872 ----------- Total U.S. Government Obligations (cost $10,723,620) .............................. 10,660,628 ----------- CORPORATE DEBT OBLIGATIONS - 11.6% AEROSPACE & DEFENSE - 0.3% Lockheed Martin Corp. .............................. 8.20%, 12/01/09 ................................. 150 151,671 Raytheon Co. ....................................... 8.20%, 3/01/06 .................................. 100 101,666 ----------- 253,337 ----------- AIR TRANSPORTATION - 0.2% Delta Air Lines, Inc. 8.30%, 12/15/29 ................................. 200 175,849 ----------- AUTOMOTIVE - 0.1% Delphi Automotive Systems Corp. 7.125%, 5/01/29 ................................. 100 86,051 ----------- BANKING - MONEY CENTERS - 1.3% Bank United Corp. 8.875%, 5/01/07 ................................. 150 134,247 BankAmerica Corp. 8.07%, 12/31/26 (b) ............................. 200 183,843 3 TOTAL RETURN PORTFOLIO PORTFOLIO OF INVESTMENTS (continued) Alliance Variable Products Series Fund ================================================================================ Principal Amount Company (000) U.S. $ Value - -------------------------------------------------------------------------------- Citicorp 6.375%, 11/15/08 .............................. $ 500 $ 463,257 HSBC Capital Funding LP 10.176%, 12/31/49 (b) ......................... 200 214,690 ---------- 996,037 ---------- BROADCASTING/MEDIA - 0.7% AT&T Corp.-Liberty Media Group 8.25%, 2/01/30 (b) ............................ 250 230,253 CBS Corp. 7.15%, 5/20/05 ................................ 150 147,635 Clear Channel Communications, Inc 7.875%, 6/15/05 ............................... 150 150,878 ---------- 528,766 ---------- CABLE - 0.8% Classic Cable, Inc. 10.50%, 3/01/10 (b) ........................... 150 139,125 Continental Cablevision, Inc. 9.00%, 9/01/08 ................................ 300 321,607 Shaw Communications, Inc. 8.25%, 4/11/10 ................................ 150 152,002 ---------- 612,734 ---------- CHEMICALS - 0.6% ICI North America, Inc. 8.875%, 11/15/06 .............................. 150 158,339 Lyondell Chemical Co. 9.875%, 5/01/07 ............................... 150 148,500 Rohm and Haas Co. 7.40%, 7/15/09 ................................ 150 149,407 ---------- 456,246 ---------- COMMUNICATIONS - 1.9% Cable & Wireless Optus Finance 8.00%, 6/22/10 (b) ............................ 150 148,682 Crown Castle International Corp. 10.75%, 8/01/11 (c) ........................... 75 76,406 Exodus Communications, Inc. 11.625%, 7/15/10 (b) .......................... 150 150,562 Global TeleSystems, Inc. 11.00%, 12/01/09 (c) .......................... 100 77,947 News America Holdings, Inc. 9.50%, 7/15/24 ................................ 250 269,489 Nextel Communications, Inc. 9.375%, 11/15/09 .............................. 100 96,000 Paramount Communications, Inc. 7.50%, 7/15/23 ................................ 300 266,349 Qwest Communications International, Inc. 7.50%, 11/01/08 ............................... 150 145,808 Sprint Capital Corp. 6.875%, 11/15/28 .............................. 300 260,262 ---------- 1,491,505 ---------- ENERGY - 0.4% Conoco, Inc. 5.90%, 4/15/04 ................................ 150 143,007 Union Pacific Resources Group, Inc. 7.30%, 4/15/09 ................................ 150 144,992 ---------- 287,999 ---------- ENTERTAINMENT & LEISURE - 0.2% SFX Entertainment, Inc. 9.125%, 2/01/08 ............................... 150 151,500 ---------- FINANCIAL - 1.4% First Union Capital II Series A 7.95%, 11/15/29 ............................... 150 130,830 Goldman Sachs Group, Inc. 6.65%, 5/15/09 ................................ 200 183,492 Household Finance Corp. 7.875%, 3/01/07 ............................... 150 149,454 Merrill Lynch & Co., Inc. 6.00%, 2/17/09 ................................ 500 443,102 Washington Mutual Finance Corp. 8.25%, 6/15/05 ................................ 250 252,565 ---------- 1,159,443 ---------- INDUSTRIAL - 0.2% Deere & Co. 7.85%, 5/15/10 ................................ 150 151,364 ---------- PAPER / PACKAGING - 0.3% Temple-Inland, Inc. 6.75%, 3/01/09 ................................ 250 232,979 ---------- PETROLEUM PRODUCTS - 0.3% Apache Finance PTY, Ltd. 6.50%, 12/15/07 ............................... 250 232,685 ---------- ELECTRIC & GAS UTILITIES - 1.2% Dominion Resources, Inc. 8.125%, 6/15/10 ............................... 150 151,638 DPL, Inc. 8.25%, 3/01/07 (b) ............................ 500 499,052 PSEG Energy Holdings, Inc. 10.00%, 10/01/09 (b) .......................... 150 157,647 Yorkshire Power 8.25%, 2/15/05 (b) ......................... 150 153,293 ---------- 961,630 ---------- GAS UTILITY - 0.3% Yosemite Security Trust I 8.25%, 11/15/04 (b) ........................... 200 199,298 ---------- RETAIL - 0.4% K Mart Funding Corp. 9.44%, 7/01/18 ................................ 150 146,881 Kohl's Corp. 7.25%, 6/01/29 (b) ............................ 150 133,630 ---------- 280,511 ---------- 4 Alliance Variable Products Series Fund ================================================================================ Principal Amount Company (000) U.S. $ Value - -------------------------------------------------------------------------------- TRANSPORTATION - 0.8% Union Pacific Corp. 6.625%, 2/01/29 ............................... $ 800 $ 663,039 ------------ MISCELLANEOUS - 0.2% AES Corp. 9.50%, 6/01/09 ................................ 150 147,750 ------------ Total Corporate Debt Obligations (cost $9,483,007) ............................. 9,068,723 YANKEE BONDS - 1.4% Bank of Tokyo-Mitsubishi, Ltd. 8.40%, 4/15/10 ................................ 150 151,688 Cho Hung Bank Co., Ltd. 11.875%, 4/01/10 (b) .......................... 80 77,200 Deutsche Capital Bank 7.872%, 12/29/49 (b) .......................... 100 92,875 Hanvit Bank 12.75%, 3/01/10 (b) ........................... 200 198,000 KPNQwest NV 8.125%, 6/01/09 ............................... 200 189,000 Metronet Communications Corp. 0.00%, 6/01/03 (d) ............................ 150 122,190 Philippine Long Distance Telephone Co. 10.50%, 4/15/09 ............................... 150 134,150 Telewest Communications Plc 11.00%, 10/01/07 (d) .......................... 150 142,875 ------------ Total Yankee Bonds (cost $1,125,982) ............................. 1,107,978 ------------ SOVEREIGN DEBT OBLIGATIONs - 0.5% BRAZIL - 0.2% Republic of Brazil 12.75%, 1/15/20 ............................... 150 142,875 ------------ Shares or Principal Amount Company (000) U.S. $ Value - -------------------------------------------------------------------------------- MEXICO - 0.3% United Mexican States 10.375%, 2/17/09 ........................... $ 220 $ 233,200 ------------ Total Sovereign Debt Obligations (cost $381,882) ............................... 376,075 PREFERRED STOCK - 0.5% CABLE - 0.5% CSC Holdings, Inc. Series M (e) (cost $341,155) ............................... 3,351 353,495 ------------ SHORT-TERM INVESTMENTS - 10.8% U.S. GOVERNMENT OBLIGATIONS - 6.0% U.S. Treasury Bills 6.04%, 9/14/00 ................................ $ 2,100 2,073,593 6.22%, 11/16/00 ............................... 2,650 2,586,815 ------------ 4,660,408 ------------ TIME DEPOSIT - 4.8% State Street Euro Dollar 6.00%, 7/03/00 ................................ 3,778 3,778,000 ------------ Total Short-Term Investments (amortized cost $8,438,408) ................................... 8,438,408 ------------ TOTAL INVESTMENTS - 100.1% (cost $74,472,152) ............................ 78,059,904 Other assets less liabilities - (0.1%) .......................... (62,856) ------------ NET ASSETS - 100% ................................ $ 77,997,048 ============ - -------------------------------------------------------------------------------- (a) Non-income producing security. (b) Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration normally applied to certain qualified buyers. At June 30, 2000, the aggregate market value of these securities amounted to $2,679,816 or 3.4% of net assets. (c) Securities, or portion thereof, with an aggregate market value of $154,353 have been segregated to collateralize forward exchange currency contracts. (d) Indicates a security that has a zero coupon that remains in effect until a predetermined date at which time the stated coupon rate becomes effective until final maturity. (e) PIK (Paid-in kind) preferred quarterly stock payments. Glossary: ADR - American Depositary Receipt See Notes to Financial Statements. 5 TOTAL RETURN PORTFOLIO STATEMENT OF ASSETS AND LIABILITIES June 30, 2000 (unaudited) Alliance Variable Products Series Fund ================================================================================ ASSETS Investment in securities, at value (cost $74,472,152) ............................ $78,059,904 Cash ............................................................................. 472 Foreign cash, at value (cost $10,259) ............................................ 10,301 Dividends and interest receivable ................................................ 454,347 Receivable for investment securities sold ........................................ 295,586 Unrealized appreciation of forward exchange currency contracts ................... 118 ----------- Total assets ..................................................................... 78,820,728 ----------- LIABILITIES Payable for investment securities purchased ...................................... 732,799 Advisory fee payable ............................................................. 40,326 Accrued expenses ................................................................. 50,555 ----------- Total liabilities ................................................................ 823,680 ----------- NET ASSETS .......................................................................... $77,997,048 =========== COMPOSITION OF NET ASSETS Capital stock, at par ............................................................ $ 4,674 Additional paid-in capital ....................................................... 71,966,297 Undistributed net investment income .............................................. 1,035,350 Accumulated net realized gain on investments and foreign currency transactions ... 1,402,811 Net unrealized appreciation of investments and foreign currency denominated assets and liabilities ............................................. 3,587,916 ----------- $77,997,048 =========== Class A Shares Net assets ....................................................................... $77,997,048 =========== Shares of capital stock outstanding .............................................. 4,674,247 =========== Net asset value per share ........................................................ $ 16.69 ===========
- -------------------------------------------------------------------------------- See Notes to Financial Statements. 6 TOTAL RETURN PORTFOLIO STATEMENT OF OPERATIONS Six Months Ended June 30, 2000 (unaudited) Alliance Variable Products Series Fund ================================================================================ INVESTMENT INCOME Interest ...................................................... $1,024,369 Dividends (net of foreign tax withheld of $810) ............... 351,880 ---------- Total investment income ....................................... 1,376,249 ---------- EXPENSES Advisory fee ............................................... 233,687 Custodian ..................................................... 42,235 Administrative ................................................ 40,434 Audit and legal ............................................... 8,062 Printing ...................................................... 3,379 Directors' fees ............................................... 632 Transfer agency ............................................... 465 Miscellaneous ................................................. 3,048 ---------- Total expenses ................................................ 331,942 ---------- Net investment income ......................................... 1,044,307 ---------- REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS Net realized gain on investment transactions .................. 1,450,995 Net realized gain on foreign currency transactions ............ 2,557 Net change in unrealized appreciation/depreciation of: Investments ................................................. 630,407 Foreign currency denominated assets and liabilities.......... 360 ---------- Net gain on investments and foreign currency transactions ..... 2,084,319 ---------- NET INCREASE IN NET ASSETS FROM OPERATIONS ....................... $3,128,626 ========== - -------------------------------------------------------------------------------- See Notes to Financial Statements. 7 TOTAL RETURN PORTFOLIO STATEMENT OF CHANGES IN NET ASSETS June 30, 2000 (unaudited) Alliance Variable Products Series Fund ================================================================================
Six Months Ended Year Ended June 30, 2000 December 31, (unaudited) 1999 ================ ============ INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS Net investment income ............................................................... $ 1,044,307 $ 1,671,752 Net realized gain on investments and foreign currency transactions .................. 1,453,552 5,107,162 Net change in unrealized appreciation/depreciation of investments and foreign currency denominated assets and liabilities ........................... 630,767 (2,585,020) ------------ ------------ Net increase in net assets from operations .......................................... 3,128,626 4,193,894 DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM: Net investment income Class A ........................................................................... (1,673,146) (1,231,521) Net realized gain on investments Class A ........................................................................... (5,117,607) (4,690,187) CAPITAL STOCK TRANSACTIONS Net increase ........................................................................ 6,489,572 17,433,667 ------------ ------------ Total increase ...................................................................... 2,827,445 15,705,853 NET ASSETS Beginning of period ................................................................. 75,169,603 59,463,750 ------------ ------------ End of period (including undistributed net investment income of $1,035,350 and $1,664,189, respectively) ....................................... $ 77,997,048 $ 75,169,603 ============ ============
- -------------------------------------------------------------------------------- See Notes to Financial Statements. 8 TOTAL RETURN PORTFOLIO NOTES TO FINANCIAL STATEMENTS June 30, 2000 (unaudited) Alliance Variable Products Series Fund ================================================================================ NOTE A: Significant Accounting Policies The Total Return Portfolio (the "Portfolio") is a series of Alliance Variable Products Series Fund, Inc. (the "Fund"). The Portfolio's investment objective is to seek to achieve a high return through a combination of current income and capital appreciation. The Fund was in cor porated in the State of Maryland on November 17, 1987, as an open-end series investment company. The Fund had no operations prior to November 28, 1990. The Fund offers nineteen separately managed pools of assets which have differing investment objectives and policies. The Fund currently issues shares of the Conservative Investors Portfolio, Growth Investors Portfolio, Total Return Portfolio, Growth and Income Portfolio, Growth Portfolio, International Portfolio, Premier Growth Portfolio, Quasar Portfolio, Real Estate Investment Portfolio, Technology Portfolio, Utility Income Portfolio, Worldwide Privatization Portfolio, Global Bond Portfolio, Global Dollar Government Portfolio, High-Yield Portfolio, North American Government Income Portfolio, Short-Term Multi-Market Portfolio, U.S. Government/High Grade Securities Portfolio and Money Market Portfolio (the "Portfolios"). On January 5, 1999, the creation of a second class of shares, Class B shares, was approved by the Board of Directors. The Fund offers Class A and Class B shares. Both classes of shares have identical voting, dividend, liquidating and other rights, except that Class B shares bear a distribution expense and have exclusive voting rights with respect to the Class B distribution plan. As of June 30, 2000, the following Portfolios had Class B shares issued and outstanding: Growth and Income Portfolio, Growth Portfolio, Premier Growth Portfolio, Technology Portfolio, Global Bond Portfolio, U.S. Government/High Grade Securities Portfolio and Money Market Portfolio. The Fund offers and sells its shares only to separate accounts of certain life insurance companies for the purpose of funding variable annuity contracts and variable life insurance policies. Sales are made without a sales charge at each Portfolio's net asset value per share. The financial statements have been prepared in con formity with accounting principles generally accepted in the United States, which require management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements and amounts of income and expenses during the reporting period. Actual results could differ from those estimates. The following is a summary of significant accounting policies followed by the Fund. 1. Security Valuation Portfolio securities traded on a national securities exchange or on a foreign securities exchange (other than foreign securities exchanges whose operations are similar to those of the United States over-the-counter market) or on The Nasdaq Stock Market, Inc., are generally valued at the last reported sales price or if no sale occurred, at the mean of the closing bid and asked price on that day. Readily marketable securities traded in the over-the-counter market, securities listed on a foreign securities exchange whose operations are similar to the U.S. over-the-counter market, and securities listed on a national securities exchange whose primary market is believed to be over-the-counter (but excluding securities traded on The Nasdaq Stock Market, Inc.), are valued at the mean of the current bid and asked price. U.S. government and fixed income securities which mature in 60 days or less are valued at amortized cost, unless this method does not represent fair value. Securities for which current market quotations are not readily available are valued at their fair value as determined in good faith by, or in accordance with procedures adopted by, the Board of Directors. Fixed income securities may be valued on the basis of prices obtained from a pricing service when such prices are believed to reflect the fair market value of such securities. Securities in which the Money Market Portfolio invests are valued at amortized cost which approximates fair value, under which method a portfolio instrument is valued at cost and any premium or discount is amortized on a straight-line basis to maturity. 2. Currency Translation Assets and liabilities denominated in foreign currencies and commitments under forward exchange currency contracts are translated into U.S. dollars at the mean of the quoted bid and asked price of such currencies against the U.S. dollar. Purchases and sales of portfolio securities are translated at the rates of exchange prevailing when such securities were acquired or sold. Income and ex penses are translated at rates of exchange prevailing when accrued. The Portfolios isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Net realized gains and losses on foreign currency transactions represent foreign exchange gains and losses from sales and maturities of securities and forward exchange currency contracts, holdings of foreign currencies, exchange gains and losses realized between the trade and 9 TOTAL RETURN PORTFOLIO NOTES TO FINANCIAL STATEMENTS (continued) Alliance Variable Products Series Fund ================================================================================ settlement dates on investment transactions, and the difference between the amounts of interest, dividends and foreign witholding tax reclaims recorded on the Portfolio's books and the U.S. dollar equivalent amounts actually received or paid. Net 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 (depreciation) of in vestments and foreign currency denominated assets and liabilities. 3. Taxes It is the Fund's policy to meet the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its investment company taxable income and net realized gains, if any, to shareholders. Therefore, no provisions for federal income or excise taxes are required. 4. Investment Income and Investment Transactions Dividend income is recorded on the ex-dividend date. Interest income is accrued daily. Investment trans actions are accounted for on the date securities are purchased or sold. The Fund accretes discounts as adjustments to interest income and in the case of the Money Market Portfolio, amortizes premium as well. Investment gains and losses are determined on the identified cost basis. 5. Dividends and Distributions Each Portfolio declares and distributes dividends and distributions from net investment income and net realized gains, respectively, if any, at least annually, except for dividends on the Money Market Portfolio, which are declared daily and paid monthly. 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 accounting principles generally accepted in the United States. To the extent these differences are permanent, such amounts are reclassified within the capital accounts based on their federal tax basis treatment; temporary differences do not require such reclassification. - -------------------------------------------------------------------------------- NOTE B: Advisory Fee and Other Transactions with Affiliates Under the terms of an investment advisory agreement, the Portfolio pays Alliance Capital Management L.P. (the "Adviser"), an investment advisory fee at an annualized rate of .625% of the Portfolio's average daily net assets. Pursuant to the advisory agreement, the Portfolio paid $40,434 to the Adviser representing the cost of certain legal and accounting services provided to the Portfolio by the Adviser for the six months ended June 30, 2000. During the six months ended June 30, 2000, the Adviser agreed to waive its fee and to reimburse the additional operating expenses to the extent necessary to limit total operating expenses on an annual basis to .95% and 1.20% of the average daily net assets for Class A and Class B shares, respectively. Expense waivers/reimbursements, if any, are accrued daily and paid monthly. For the six months ended June 30, 2000, the Portfolio received no such waivers/reimbursements. Brokerage commissions paid on investment transactions for the six months ended June 30, 2000, amounted to $42,774, none of which was paid to brokers utilizing the services of the Pershing Division of Donaldson, Lufkin & Jenrette Securities Corp. ("DLJ"), an affiliate of the Adviser, and of which $2,873 was paid to DLJ directly. The Fund compensates Alliance Fund 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 the Fund. For the six months ended June 30, 2000, the Fund paid a total of $9,000 which was allocated evenly among the Portfolios. - -------------------------------------------------------------------------------- NOTE C: Distribution Plan The Portfolios have each adopted a Plan for Class B shares of the Fund pursuant to Rule 12b-1 under the Investment Company Act of 1940 (each a "Plan" and collectively the "Plans"). Under the Plans, the Portfolios pay distribution and servicing fees to the Distributor at an annual rate of up to .50% of each portfolio's average daily net assets attributable to the Class B shares. The fees are accrued daily and paid monthly. The Board of Directors currently limit payments under the Plan to .25% of each Portfolio's average daily net assets attributable to Class B shares. The Plans provide that the Distributor will use such payments in their entirety for distribution assistance and promotional activities. The Portfolios are not obligated under the Plans to pay any distribution services fee in excess of the amounts set forth above. The purpose of the payments to the Distribu- 10 Alliance Variable Products Series Fund ================================================================================ tor under the Plans is to compensate the Distributor for its distribution services with respect to the sale of each Portfolio's shares. Since the Distributor's compensation is not directly tied to its expenses, the amount of compensation received by it under the Plan during any year may be more or less than its actual expenses. For this reason, the Plans are characterized by the staff of the Commission as being of the "compensation" variety. In the event that a Plan is terminated or not continued, no distribution services fees (other than current amounts accrued but not yet paid) would be owed by the Portfolios to the Distributor with respect to the relevant Plan. The Plan also provides that the Adviser may use its own resources to finance the distribution of each Portfolio's shares. - -------------------------------------------------------------------------------- NOTE D: Investment Transactions Purchases and sales of investment securities (excluding short-term investments) for the six months ended June 30, 2000, were as follows: Purchases: Stocks and debt obligations ............................ $ 26,512,192 U.S. government and agencies ........................... 7,250,727 Sales: Stocks and debt obligations ............................ $ 21,017,251 U.S. government and agencies ........................... 13,671,635 At June 30, 2000, the cost of investments for federal income tax purposes was substantially the same as the cost for financial reporting purposes. Accordingly, gross unrealized appreciation and unrealized depreciation are as follows (excluding foreign currency transactions): Gross unrealized appreciation .......................... $ 8,094,075 Gross unrealized depreciation .......................... (4,506,323) ------------ Net unrealized appreciation ............................ $ 3,587,752 ============ 1. Forward Exchange Currency Contracts All Portfolios (except for the Global Dollar Government Portfolio, U.S. Government/High Grade Securities Portfolio and Money Market Portfolio) may enter into forward exchange currency contracts to hedge exposure to changes in foreign currency ex change rates on foreign portfolio holdings, to hedge certain firm purchase and sales commitments denominated in foreign currencies and for investment purposes. A forward exchange currency contract is a commitment to purchase or sell a foreign currency at a future date at a negotiated forward rate. The Portfolios may enter into contracts to deliver or receive foreign currency it will receive from or require for its normal investment activities. It may also use contracts in a manner intended to protect for eign currency denominated securities from declines in value due to unfavorable exchange rate movements. The gain or loss arising from the difference between the original contracts and the closing of such contracts is included in realized gains or losses from foreign currency transactions. Fluctuations in the value of forward exchange currency contracts are recorded for financial reporting purposes as unrealized gains or losses by the Portfolio. Each Portfolio's custodian will place and maintain cash not available for investment or other liquid assets in a separate account of the Portfolio having an approximate value equal to the aggregate amount of the respective portfolio's commitments under forward exchange currency contracts entered into with respect to position hedges. Risks may arise from the potential inability of a counterparty to meet the terms of a contract and from unanticipated movements in the value of a foreign currency relative to the U.S. dollar. The face or contract amount, in U.S. dollars, reflects the total exposure each Portfolio has in that particular currency contract. 11 TOTAL RETURN PORTFOLIO NOTES TO FINANCIAL STATEMENTS (continued) Alliance Variable Products Series Fund ================================================================================ At June 30, 2000, the Portfolio had an outstanding forward ex change currency contract as follows:
Contract U.S. $ Value on U.S. $ Amount Origination Current Unrealized (000) Date Value Appreciation ---------------- ---------------- ---------------- ---------------- Foreign Currency Sale Contracts - ------------------------------- Euro, settling 7/12/00............ 100 $ 95,663 $ 95,545 $ 118 ======
2. Option Transactions For hedging and investment purposes, all Portfolios (except for the Money Market Portfolio) may purchase and write call options and purchase put options on U.S. securities that are traded on U.S. securities exchanges and over-the-counter markets. The risk associated with purchasing an option is that the Portfolio pays a premium whether or not the option is exercised. Additionally, the Portfolio bears the risk of loss of premium and change in market value should the counterparty not perform under the contract. Put and call options purchased are accounted for in the same manner as portfolio securities. The cost of securities acquired through the exercise of call options is increased by premiums paid. The proceeds from securities sold through the exercise of put options are decreased by the premiums paid. When the Portfolio writes an option, the premium received by the Portfolio is recorded as a liability and is subsequently adjusted to the current market value of the option written. Premiums received from which written options expire unexercised are recorded by the Portfolio on the expiration date as realized gains from written options. The difference between the premium received and the amount paid on effecting a closing purchase transaction, including brokerage commissions, is also treated as a realized gain, or if the premium received is less than the amount paid for the closing purchase transaction, as a realized loss. If a call option is exercised, the premium received is added to the proceeds from the sale of the underlying security or currency in determining whether the Portfolio has realized a gain or loss. In writing an option, the Portfolio bears the market risk of an unfavorable change in the price of the security or currency underlying the written option. Exercise of an option written by the Portfolio could result in the Portfolio selling or buying a security or currency at a price different from the current market value. The Portfolio had no transactions in options written for the six months ended June 30, 2000. - -------------------------------------------------------------------------------- NOTE E: Capital Stock There are 20,000,000,000 shares of capital stock, $.001 par value per share of the Fund authorized divided into two classes, designated Class A and Class B. Each class consists of 10,000,000,000 authorized shares. Transactions in capital stock were as follows:
------------------------------------- ------------------------------------- Shares Amount ------------------------------------- ------------------------------------- Six Months Ended Year Ended Six Months Ended Year Ended June 30, 2000 December 31, June 30, 2000 December 31, (unaudited) 1999 (unaudited) 1999 ---------------- ------------ ---------------- ------------ Class A Shares sold ................................ 379,558 1,313,899 $ 6,614,518 $ 23,372,094 Shares issued in reinvestment of dividends and distributions ............. 395,731 346,907 6,790,753 5,921,708 Shares redeemed ............................ (397,783) (656,997) (6,915,699) (11,860,135) ------------ ------------ ------------ ------------ Net increase ............................... 377,506 1,003,809 $ 6,489,572 $ 17,433,667 ============ ============ ============ ============
12 Alliance Variable Products Series Fund ================================================================================ NOTE F: Concentration of Risk Investing in securities of foreign companies or foreign governments involves special risks which include changes in foreign exchange rates and the possibility of future political and economic developments which could adversely affect the value of such securities. Moreover, securities of many foreign companies or foreign governments and their markets may be less liquid and their prices more volatile than those of comparable United States companies or of the United States government. - -------------------------------------------------------------------------------- NOTE G: Bank Borrowing A number of open-end mutual funds managed by the Adviser, including the Fund, participate in a $750 million revolving credit facility (the "Facility") intended to provide short-term financing if necessary, subject to certain restrictions in connection with abnormal redemption activity. Commitment fees related to the Facility are paid by the participating funds and are included in the miscellaneous expenses in the statement of operations. The Fund did not utilize the Facility during the six months ended June 30, 2000. 13 TOTAL RETURN PORTFOLIO FINANCIAL HIGHLIGHTS Alliance Variable Products Series Fund ================================================================================ Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
------------------------------------------------------------------------------------- Class A ------------------------------------------------------------------------------------- Six Months Ended Year Ended December 31, June 30, 2000 ------------------------------------------------------------------- (unaudited) 1999 1998 1997 1996 1995 ------------- ------ ------ ------ --------- ------ Net asset value, beginning of period .... $17.49 $18.06 $16.92 $14.63 $12.80 $10.41 ------ ------ ------ ------ ----- ------ Income From Investment Operations Net investment income (b) ............... .24 .44 .41(a) .39(a) .27(a) .36(a) Net realized and unrealized gain on investment transactions .............. .55 .70 2.36 2.62 1.66 2.10 ------ ------ ------ ------ ----- ------ Net increase in net asset value from operations ........................... .79 1.14 2.77 3.01 1.93 2.46 ------ ------ ------ ------ ----- ------ Less: Dividends and Distributions Dividends from net investment income .... (.39) (.36) (.29) (.23) (.07) (.07) Distributions from net realized gains ... (1.20) (1.35) (1.34) (.49) (.03) -0- ------ ------ ------ ------ ----- ------ Total dividends and distributions ....... (1.59) (1.71) (1.63) (.72) (.10) (.07) ------ ------ ------ ------ ----- ------ Net asset value, end of period .......... $16.69 $17.49 $18.06 $16.92 $14.63 $12.80 ====== ====== ====== ====== ===== ====== Total Return Total investment return based on net asset value (c) .................. 4.27% 6.53% 16.99% 21.11% 15.17% 23.67% Ratios/Supplemental Data Net assets, end of period (000's omitted) $77,997 $75,170 $59,464 $42,920 $25,875 $8,242 Ratios to average net assets of: Expenses, net of waivers and reimbursements ..................... .89%(d) .86% .88% .88% .95% .95% Expenses, before waivers and reimbursements ..................... .89%(d) .86% .95% .88% 1.12% 4.49% Net investment income ................ 2.79%(d) 2.48% 2.41%(a) 2.46%(a) 2.76%(a) 3.16%(a) Portfolio turnover rate ................. 49% 91% 57% 65% 57% 30%
- -------------------------------------------------------------------------------- (a) Net of expenses reimbursed or waived by the Adviser. (b) Based on average shares outstanding. (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 investment return calculated for a period of less than one year is not annualized. (d) Annualized. 14 Alliance Variable Products Series Fund ================================================================================ BOARD OF DIRECTORS John D. Carifa, Chairman and President Ruth Block (1) David H. Dievler (1) John H. Dobkin (1) William H. Foulk, Jr. (1) Dr. James M. Hester (1) Clifford L. Michel (1) Donald J. Robinson (1) OFFICERS Andrew Aran, Senior Vice President Kathleen A. Corbet, Senior Vice President Gregory Dube, Senior Vice President Alfred L. Harrison, Senior Vice President Nelson Jantzen, Senior Vice President Wayne D. Lyski, Senior Vice President Raymond J. Papera, Senior Vice President Peter Anastos, Vice President Bruce K. Aronow, Vice President Edward Baker, Vice President Thomas J. Bardong, Vice President Matthew Bloom, Vice President Mark H. Breedon, Vice President Russell Brody, Vice President Nicholas D.P. Carn, Vice President Paul J. DeNoon, Vice President Joseph C. Dona, Vice President Vicki L. Fuller, Vice President F. Jeanne Goetz, Vice President Gerald T. Malone, Vice President Michael Mon, Vice President Douglas J. Peebles, Vice President Daniel G. Pine, Vice President Paul C. Rissman, Vice President Tyler J. Smith, Vice President Jean Van De Walle, Vice President Sandra Yeager, Vice President Edmund P. Bergan, Jr., Secretary Mark D. Gersten, Treasurer & Chief Financial Officer Thomas Manley, Controller CUSTODIAN State Street Bank and Trust Company 225 Franklin Street Boston, MA 02110 DISTRIBUTOR Alliance Fund Distributors, Inc. 1345 Avenue of the Americas New York, NY 10105 INDEPENDENT AUDITORS Ernst & Young LLP 787 Seventh Avenue New York, NY 10019 LEGAL COUNSEL Seward & Kissel One Battery Park Plaza New York, NY 10004 TRANSFER AGENT Alliance Fund Services, Inc. P.O. Box 1520 Secaucus, NJ 07096-1520 Toll-free 1-(800) 221-5672 - -------------------------------------------------------------------------------- (1) Member of the Audit Committee. 15 (This page left intentionally blank.) (This page left intentionally blank.) -----END PRIVACY-ENHANCED MESSAGE-----