-----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, A0Cupv21t3qNouPZAvXqXNEX95FUIrnts/QGEYKWDLQszsE5hfQavYIVv8RyQC91 bCZc8B62M7WN51iKaD8ZOA== 0000936772-01-000143.txt : 20010308 0000936772-01-000143.hdr.sgml : 20010308 ACCESSION NUMBER: 0000936772-01-000143 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20001231 FILED AS OF DATE: 20010306 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: 1562080 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 -------------------------------------- SHORT-TERM MULTI-MARKET -------------------------------------- PORTFOLIO -------------------------------------- ANNUAL REPORT DECEMBER 31, 2000 Investment Products Offered ----------------------------- > Are Not FDIC Insured > May Lose Value > Are Not Bank Guaranteed ----------------------------- SHORT-TERM MULTI-MARKET PORTFOLIO PORTFOLIO OF INVESTMENTS December 31, 2000 Alliance Variable Products Series Fund ================================================================================ Principal Amount (000) U.S. $ Value - -------------------------------------------------------------------------------- DENMARK-4.3% GOVERNMENT OBLIGATION-4.3% Kingdom of Denmark 8.00%, 11/15/01 (cost $116,513) (a) ................ DKK 750 $ 96,513 ---------- FRANCE-2.1% GOVERNMENT OBLIGATION-2.1% Government of France 4.50%, 7/12/02 (cost $47,572) (a) ................. EUR 51 47,875 ---------- GERMANY-18.0% GOVERNMENT OBLIGATION-18.0% Federal Republic of Germany 8.00%, 7/22/02 (cost $422,937) (a) ................ 410 404,484 ---------- ITALY-4.3% GOVERNMENT OBLIGATION-4.3% Republic of Italy 6.25%, 5/15/02 (cost $107,154) (a) ................ 100 95,858 ---------- JAPAN-4.5% DEBT OBLIGATION-4.5% Export-Import Bank 7.00%, 8/02/01 (cost $100,657) (a) ................ US$ 100 100,183 ---------- NETHERLANDS-12.6% DEBT OBLIGATIONS-8.5% DSL Finance NV 5.00%, 5/07/02 (a) ................. DEM 200 96,396 Rabobank Nederland 9.00%, 12/28/01 (a) ................ EUR 200 95,908 ---------- 192,304 ---------- GOVERNMENT OBLIGATION-4.1% Government of Netherlands 3.00%, 2/15/02 (a) ................. 100 92,228 ---------- Total Netherlands Securities (cost $315,946) .................... 284,532 ---------- NEW ZEALAND-2.9% DEBT OBLIGATION-2.9% International Bank for Reconstruction & Development 7.25%, 4/09/01 (cost $80,483) (a) ................. NZ 150 66,356 ---------- SPAIN-4.3% GOVERNMENT OBLIGATION-4.3% Government of Spain 7.90%, 2/28/02 (cost $102,389) (a) ................ EUR 100 97,213 ---------- SWEDEN-3.4% GOVERNMENT OBLIGATION-3.4% Kingdom of Sweden 13.00%, 6/15/01 (cost $96,619) (a) ................. SEK 700 76,915 ---------- UNITED KINGDOM-2.9% DEBT OBLIGATION-2.9% Halifax Plc 6.25%, 10/01/01 (cost $64,565) (a) ................. US$ 65 64,939 ---------- UNITED STATES-34.4% DEBT OBLIGATIONS-34.4% European Investment Bank 8.00%, 12/03/01 (a) ................ 100 101,560 General Electric Capital Corp. MTN 5.50%, 4/15/02 (a) ................. 150 149,323 7.375%, 5/09/01 .................... 125 125,375 Inter-American Development Bank 5.125%, 2/22/01 (a) ................ 100 99,850 KFW International Finance MTN 6.125%, 7/08/02 (a) ................ 100 100,179 Morgan Guaranty Trust Co. ............ 6.375%, 3/26/01 (a) ................ 200 199,882 ---------- Total United States Securities (cost $777,979) .................... 776,169 ---------- TOTAL INVESTMENTS-93.7% (cost $2,232,814) .................. 2,111,037 Other assets less liabilities-6.3% ................... 143,084 ---------- NET ASSETS-100% ..................... $2,254,121 ========== - -------------------------------------------------------------------------------- (a) Securities, or portion thereof, with an aggregate market value of $1,985,662 have been segregated to collateralize forward exchange currency contracts. Glossary: MTN - Medium Term Note. See Notes to Financial Statements 1 SHORT-TERM MULTI-MARKET PORTFOLIO STATEMENT OF ASSETS AND LIABILITIES December 31, 2000 Alliance Variable Products Series Fund ================================================================================ ASSETS Investments in securities, at value (cost $2,232,814) ......... $ 2,111,037 Cash .......................................................... 79,278 Foreign cash at value (cost $4,260) ........................... 4,321 Receivable for investment securities sold ..................... 117,117 Interest receivable ........................................... 66,522 Receivable from Adviser ....................................... 23,276 Receivable for capital stock sold ............................. 97 ----------- Total assets .................................................. 2,401,648 ----------- LIABILITIES Unrealized depreciation on forward exchange currency contracts 118,087 Payable for capital stock redeemed ............................ 4,358 Accrued expenses .............................................. 25,082 ----------- Total liabilities ............................................. 147,527 ----------- NET ASSETS ...................................................... $ 2,254,121 =========== COMPOSITION OF NET ASSETS Capital stock, at par ......................................... $ 237 Additional paid-in capital .................................... 3,496,011 Undistributed net investment income ........................... 276,634 Accumulated net realized loss on investments .................. (1,280,231) Net unrealized depreciation of investments and foreign currency denominated assets and liabilities .......................... (238,530) ----------- $ 2,254,121 =========== Class A shares Net assets .................................................... $ 2,254,121 =========== Shares of capital stock outstanding ........................... 236,804 =========== Net asset value per share ..................................... $ 9.52 =========== - -------------------------------------------------------------------------------- See Notes to Financial Statements. 2 SHORT-TERM MULTI-MARKET PORTFOLIO STATEMENT OF OPERATIONS Year Ended December 31, 2000 Alliance Variable Products Series Fund ================================================================================ INVESTMENT INCOME Interest ................................................................. $ 198,351 --------- EXPENSES Advisory fee ............................................................. 16,932 Administrative ........................................................... 66,000 Custodian ................................................................ 64,309 Audit and legal .......................................................... 20,216 Printing ................................................................. 14,970 Directors' fees .......................................................... 1,891 Transfer agency .......................................................... 948 Miscellaneous ............................................................ 3,234 --------- Total expenses ........................................................... 188,500 Less: expenses waived and reimbursed ..................................... (159,254) --------- Net expenses ............................................................. 29,246 --------- Net investment income .................................................... 169,105 --------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS Net realized loss on investment transactions ............................. (43,919) Net realized gain on written options transactions ........................ 336 Net realized gain on foreign currency transactions ....................... 153,105 Net change in unrealized appreciation/depreciation of: Investments ............................................................ (12,024) Foreign currency denominated assets and liabilities .................... (146,408) --------- Net loss on investments, written options and foreign currency transactions (48,910) --------- NET INCREASE IN NET ASSETS FROM OPERATIONS ................................. $ 120,195 =========
- -------------------------------------------------------------------------------- See Notes to Financial Statements. 3 SHORT-TERM MULTI-MARKET PORTFOLIO STATEMENT OF CHANGES IN NET ASSETS Alliance Variable Products Series Fund ================================================================================
Year Ended Year Ended December 31, December 31, 2000 1999 ----------- ----------- INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS Net investment income ............................................... $ 169,105 $ 317,303 Net realized gain (loss) on investments, written options and foreign currency transactions ............................................. 109,522 (85,147) Net change in unrealized appreciation/depreciation of investments and foreign currency denominated assets and liabilities ............... (158,432) (15,456) ----------- ----------- Net increase in net assets from operations .......................... 120,195 216,700 DIVIDENDS TO SHAREHOLDERS FROM: Net investment income Class A ........................................................... (246,153) (333,118) CAPITAL STOCK TRANSACTIONS Net decrease ........................................................ (2,035,787) (1,936,540) ----------- ----------- Total decrease ...................................................... (2,161,745) (2,052,958) NET ASSETS Beginning of period ................................................. 4,415,866 6,468,824 ----------- ----------- End of period (including undistributed net investment income of $276,634 and $200,788, respectively) .............................. $ 2,254,121 $ 4,415,866 =========== ===========
- -------------------------------------------------------------------------------- See Notes to Financial Statements. 4 SHORT-TERM MULTI-MARKET PORTFOLIO NOTES TO FINANCIAL STATEMENTS December 31, 2000 Alliance Variable Products Series Fund ================================================================================ NOTE A: Significant Accounting Policies The Short-Term Multi-Market Portfolio (the "Portfolio") is a series of Alliance Variable Products Series Fund, Inc. (the "Fund"). The Portfolio's investment objective is to seek the highest level of current income, consistent with what Alliance Capital Management L.P., considers to be prudent investment risk, that is available from a portfolio of high quality debt securities having remaining maturities of not more than three years. The Fund was incorporated in the State of Maryland on November 17, 1987, as an open-end series investment company. 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 December 31, 2000, the following Portfolios had Class B shares issued and outstanding: Growth and Income Portfolio, Growth Portfolio, Premier Growth Portfolio, Quasar Portfolio, Technology Portfolio, Worldwide Privatization 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 conformity with accounting principles generally accepted in the United States, which require management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements and amounts of income and expenses during the reporting period. Actual results could differ from those estimates. 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 expenses are translated at rates of exchange prevailing when accrued. 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 settlement dates on investment transactions, and the dif- 5 SHORT-TERM MULTI-MARKET PORTFOLIO NOTES TO FINANCIAL STATEMENTS (continued) Alliance Variable Products Series Fund ================================================================================ ference 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 investments 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 transactions 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 regula tions 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. During the current fiscal year, permanent differences, primarily due to tax treatment of foreign currency transactions and capital loss carryforward expiration, resulted in a net increase in undistributed net investment income, an increase in accumulated net realized loss on investments and foreign currency transactions and a corresponding decrease in additional paid-in capital. This reclassification had no effect on net assets. - -------------------------------------------------------------------------------- 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 .55% of the Portfolio's average daily net assets. During the year ended December 31, 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% of the average daily net assets for Class A shares. Expense waivers/reimbursements, if any, are accrued daily and paid monthly. For the year ended December 31, 2000, such waivers/reimbursements amounted to $159,254. 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 year ended December 31, 2000, the Fund paid a total of $18,000 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 Distributor 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 6 Alliance Variable Products Series Fund ================================================================================ 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 year ended December 31, 2000, were as follows: Purchases: Stocks and debt obligations.................................... $ 673,957 U.S. government and agencies................................... -0- Sales: Stocks and debt obligations.................................... $ 2,138,181 U.S. government and agencies................................... 398,426 At December 31, 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 (excluding foreign currency transactions) are as follows: Gross unrealized appreciation.................................. $ 2,217 Gross unrealized depreciation.................................. (123,994) ------------ Net unrealized depreciation.................................... $ (121,777) ============ At December 31, 2000, for federal income tax purposes, the Portfolio had net capital loss carryforwards of $1,277,080, of which $150,822 expires in the year 2002, $941,593 expires in the year 2003, $32,651 expires in the year 2005, $5,112 expires in the year 2006, $49,059 expires in the year 2007 and $97,843 expires in the year 2008. Capital and foreign currency losses incurred after October 31 ("post-October" losses) within the taxable year are deemed to arise on the first business day of the Portfolio's next taxable year. The Portfolio incurred and will elect to defer net capital losses of $3,151 and net foreign currency losses of $119,573 during the fiscal year. 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 exchange 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 foreign 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. 7 SHORT-TERM MULTI-MARKET PORTFOLIO NOTES TO FINANCIAL STATEMENTS (continued) Alliance Variable Products Series Fund ================================================================================ At December 31, 2000, the Portfolio had outstanding forward exchange currency contracts as follows:
Contract U.S. $ Value on U.S.$ Unrealized Amount Origination Current Appreciation (000) Date Value (Depreciation) ----------- --------------- ------------- ----------------- Forward Exchange Currency - ------------------------- Buy Contracts - ------------- Danish Krone, settling 1/31/01 ..... 258 $ 32,074 $ 32,525 $ 451 Euro, settling 1/24/01 ............. 90 83,728 84,736 1,008 Forward Exchange Currency - ------------------------- Sale Contracts - -------------- Danish Krone, settling 1/31/01 ..... 1,038 119,172 130,800 (11,628) Euro, settling 1/24/01 ............. 1,065 903,462 1,001,297 (97,835) Euro, settling 1/24/01 ............. 33 28,779 30,556 (1,777) New Zealand Dollar, settling 1/24/01 150 60,260 66,376 (6,116) Swedish Krona, settling 1/16/01 .... 760 78,431 80,621 (2,190) ---------- $ (118,087) ==========
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. 8 Alliance Variable Products Series Fund ================================================================================ Transactions in options written for the year ended December 31, 2000, were as follows: Number of Contracts Premiums ------------ ----------- Options outstanding at beginning of the period... -0- $ -0- Options written.................................. 80,000 336 Options terminated in closing purchase transactions (80,000) (336) ------------ ----------- Options outstanding at December 31, 2000......... -0- $ -0- ============ =========== 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. The Portfolio had no Class B shares outstanding during the year ended December 31, 2000. Transactions in capital stock were as follows:
---------------------------- ---------------------------- Shares Amount ---------------------------- ---------------------------- Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, 2000 1999 2000 1999 ----------- ------------ ------------ ------------ Class A Shares sold .................................... 21,457 150,040 $ 206,872 $ 1,514,086 Shares issued in reinvestment of dividends .................................... 26,727 34,201 246,152 333,119 Shares redeemed ................................ (257,176) (378,700) (2,488,811) (3,783,745) ---------- ---------- ----------- ---------- Net decrease ................................... (208,992) (194,459) $(2,035,787) $(1,936,540) ========== ========== =========== ===========
- -------------------------------------------------------------------------------- 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 Portfolio, 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 Portfolio did not utilize the Facility during the year ended December 31, 2000. - -------------------------------------------------------------------------------- NOTE H: Substitution On December 27, 2000, the Securities and Exchange Commission granted an order pursuant to Section 26(b) of the Investment Company Act of 1940, permitting the Portfolio's insurance company separate account shareholders to substitute shares of the Fund's Money Market Portfolio for shares of the Portfolio. Acting on instructions from the shareholders, the Portfolio redeemed all outstanding shares on February 26, 2001 for cash. 9 SHORT-TERM MULTI-MARKET PORTFOLIO FINANCIAL HIGHLIGHTS Alliance Variable Products Series Fund ================================================================================ Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
----------------------------------------------------------------- Class A ----------------------------------------------------------------- Year Ended December 31, ----------------------------------------------------------------- 2000 1999 1998 1997 1996 --------- --------- --------- --------- --------- Net asset value, beginning of period ............... $ 9.91 $ 10.10 $ 10.57 $ 10.73 $ 10.58 --------- --------- --------- --------- --------- Income From Investment Operations Net investment income (a)(b) ....................... .53 .51 .61 .59 .64 Net realized and unrealized gain (loss) on investments, written options and foreign currency transactions ............................ (.12) (.16) .03 (.11) .33 --------- --------- --------- --------- --------- Net increase in net asset value from operations .... .41 .35 .64 .48 .97 --------- --------- --------- --------- --------- Less: Dividends Dividends from net investment income ............... (.80) (.54) (1.11) (.64) (.82) --------- --------- --------- --------- --------- Net asset value, end of period ..................... $ 9.52 $ 9.91 $ 10.10 $ 10.57 $ 10.73 ========= ========= ========= ========= ========= Total Return Total investment return based on net asset value (c) 4.36% 3.51% 6.32% 4.59% 9.57% Ratios/Supplemental Data Net assets, end of period (000's omitted) .......... $ 2,254 $ 4,416 $ 6,469 $ 6,489 $ 7,112 Ratios to average net assets of: Expenses, net of waivers and reimbursements ...... .95% .95% .94% .94% .95% Expenses, before waivers and reimbursements ...... 6.12% 2.65% 2.69% 1.42% 2.09% Net investment income (a) ........................ 5.49% 5.09% 5.94% 5.50% 6.03% Portfolio turnover rate ............................ 25% 123% 18% 222% 159%
- -------------------------------------------------------------------------------- (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. 10 REPORT OF ERNST & YOUNG LLP INDEPENDENT AUDITORS Alliance Variable Products Series Fund ================================================================================ To the Shareholders and Board of Directors Short-Term Multi-Market Portfolio Alliance Variable Products Series Fund, Inc. We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of the Short-Term Multi-Market Portfolio (the "Portfolio"), a series of Alliance Variable Products Series Fund, Inc., as of December 31, 2000, and the related statement of operations for the year then ended, the statement of changes in net assets for the two years then ended, and the financial highlights for each of the periods indicated therein. These financial statements and financial highlights are the responsibility of the Portfolio's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2000, by correspondence with the custodian and brokers. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Short-Term Multi-Market Portfolio, a series of Alliance Variable Products Series Fund, Inc. at December 31, 2000, the results of its operations for the year then ended, the changes in its net assets for the two years then ended, and the financial highlights for each of the indicated periods, in conformity with accounting principles generally accepted in the United States. [Logo Ernst & Young LLP] New York, New York February 1, 2001 11 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) Clifford L. Michel (1) Donald J. Robinson (1) OFFICERS Matthew Bloom, Senior Vice President Kathleen A. Corbet, Senior Vice President Greg Dube, Senior Vice President Alfred L. Harrison, Senior Vice President Wayne D. Lyski, Senior Vice President Raymond J. Papera, Senior Vice President Peter Anastos, Vice President Andrew Aran, Vice President Bruce K. Aronow, Vice President Edward Baker, Vice President Mark H. Breedon, Vice President Russell Brody, Vice President Frank Caruso, Vice President F. Jeanne Goetz, Vice President Jane Mack Gould, Vice President Alan E. Levi, Vice President Gerald T. Malone, Vice President Michael Mon, Vice President Douglas J. Peebles, Vice President Daniel G. Pine, Vice President John Ricciardi, Vice President Paul C. Rissman, Vice President Kenneth D. Smalley, 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. 12 (This page left intentionally blank.) PAGE> -----END PRIVACY-ENHANCED MESSAGE-----