-----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, Wa0nqBtfXqxaVKYv3nfh890jo2/6CceldeAxmbSHyWw8DKqzZR+LjO9EW24LRKwL TIYP377ZZbROxYBsIAC96g== 0000936772-01-500168.txt : 20010824 0000936772-01-500168.hdr.sgml : 20010824 ACCESSION NUMBER: 0000936772-01-500168 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010630 FILED AS OF DATE: 20010823 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: 1940 Act SEC FILE NUMBER: 811-05398 FILM NUMBER: 1721777 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 edg6675.txt VARP ALLIANCE BERNSTIEN SMALL CAP PORFOLIO ALLIANCE -------------------------- VARIABLE PRODUCTS -------------------------- SERIES FUND -------------------------- ALLIANCEBERNSTEIN -------------------------- SMALL CAP VALUE -------------------------- PORTFOLIO -------------------------- SEMI-ANNUAL REPORT JUNE 30, 2001 Investment Products Offered --------------------------- > Are Not FDIC Insured > May Lose Value > Are Not Bank Guaranteed --------------------------- ALLIANCEBERNSTEIN SMALL CAP VALUE PORTFOLIO TEN LARGEST HOLDINGS June 30, 2001 (unaudited) Alliance Variable Products Series Fund ================================================================================ - -------------------------------------------------------------------------------- COMPANY U.S. $ VALUE PERCENT OF NET ASSETS - -------------------------------------------------------------------------------- SCI Systems, Inc. $ 51,000 1.8% - -------------------------------------------------------------------------------- SUPERVALU, Inc. 49,140 1.7 - -------------------------------------------------------------------------------- Adaptec, Inc. 47,712 1.7 - -------------------------------------------------------------------------------- Avnet, Inc. 47,082 1.6 - -------------------------------------------------------------------------------- The Sherwin-Williams Co. 46,620 1.6 - -------------------------------------------------------------------------------- Cinergy Corp. 45,435 1.6 - -------------------------------------------------------------------------------- BorgWarner, Inc. 44,658 1.6 - -------------------------------------------------------------------------------- Nucor Corp. 44,001 1.6 - -------------------------------------------------------------------------------- General Semiconductor, Inc. 43,932 1.6 - -------------------------------------------------------------------------------- Potomac Electric Power Co. 43,932 1.5 - -------------------------------------------------------------------------------- $463,512 16.3% - -------------------------------------------------------------------------------- 1 ALLIANCEBERNSTEIN SMALL CAP VALUE PORTFOLIO PORTFOLIO OF INVESTMENTS June 30, 2001 (unaudited) Alliance Variable Products Series Fund ================================================================================ Company Shares U.S. $ Value - -------------------------------------------------------------------------------- COMMON STOCKS-94.7% FINANCIAL-21.0% INSURANCE-1.5% PartnerRe Holdings, Ltd. (Hong Kong) ................. 750 $ 41,550 ----------- MAJOR REGIONAL BANKS-10.1% BancorpSouth, Inc. ................................... 2,500 42,500 Hibernia Corp. Cl.A .................................. 2,400 42,720 Huntington Bancshares, Inc. .......................... 2,600 42,510 Pacific Century Financial Corp. ...................... 1,600 41,264 SouthTrust Corp. ..................................... 1,300 33,800 UnionBanCal Corp. .................................... 1,200 40,440 Whitney Holding Corp. ................................ 900 42,210 ----------- 285,444 ----------- REAL ESTATE INVESTMENT TRUST-7.0% Arden Realty, Inc. ................................... 1,500 40,050 Avalonbay Communities, Inc. .......................... 900 42,075 Duke Realty Investments, Inc. ........................ 1,700 42,245 Liberty Property Trust ............................... 1,100 32,560 Post Properties, Inc. ................................ 1,100 41,635 ----------- 198,565 ----------- SAVINGS AND LOAN-2.4% Commercial Federal Corp. ............................. 1,400 32,340 Washington Federal, Inc. ............................. 1,500 36,780 ----------- 69,120 ----------- 594,679 ----------- COMMODITIES-16.5% CHEMICALS-5.5% Crompton Corp. ....................................... 3,700 40,330 Cytec Industries, Inc. (a) ........................... 1,100 41,800 FMC Corp. (a) ........................................ 600 41,136 Lubrizol Corp. ....................................... 1,000 31,050 ----------- 154,316 ----------- METALS/GLASS/PAPER-1.1% Owens-Illinois, Inc. (a) ............................. 4,700 31,866 ----------- PAPER-8.3% Boise Cascade Corp. .................................. 1,200 42,204 Georgia-Pacific Corp. ................................ 1,100 37,235 Mead Corp. ........................................... 1,600 43,424 Smurfit-Stone Container Corp. (a) .................... 2,600 42,120 Temple-Inland, Inc. .................................. 700 37,303 Westvaco Corp. ....................................... 1,400 34,006 ----------- 236,292 ----------- STEEL-1.6% Nucor Corp. .......................................... 900 44,001 ----------- 466,475 ----------- UTILITIES-16.1% ELECTRIC COMPANIES-16.1% Cinergy Corp. ........................................ 1,300 45,435 Consolidated Edison, Inc. ............................ 1,000 39,800 GPU, Inc. ............................................ 1,100 38,665 Northeast Utilities .................................. 2,100 43,575 NSTAR ................................................ 1,000 42,560 OGE Energy Corp. ..................................... 1,900 42,959 Potomac Electric Power Co. ........................... 2,100 43,932 Public Service Co. of New Mexico ..................... 1,000 32,100 Sierra Pacific Resources ............................. 2,600 41,574 Wisconsin Energy Corp. ............................... 1,800 42,786 WPS Resources Corp. .................................. 1,200 42,300 ----------- 455,686 ----------- CAPITAL EQUIPMENT-12.1% AUTO TRUCKS - PARTS-6.9% BorgWarner, Inc. ..................................... 900 44,658 Dana Corp. ........................................... 1,500 35,010 Eaton Corp. .......................................... 600 42,060 Modine Manufacturing Co. ............................. 1,600 33,096 PACCAR, Inc. ......................................... 800 41,136 ----------- 195,960 ----------- ELECTRICAL EQUIPMENT-1.4% Cooper Industries, Inc. .............................. 1,000 39,590 ----------- MACHINERY-2.3% Kennametal, Inc. ..................................... 900 33,210 Lincoln Electric Holdings, Inc. ...................... 1,300 33,150 ----------- 66,360 ----------- MISCELLANEOUS CAPITAL GOODS-1.5% Parker-Hannifin Corp. ................................ 1,000 42,440 ----------- 344,350 ----------- TECHNOLOGY-10.7% COMMUNICATION - EQUIP. MFRS.-1.5% Andrew Corp. (a) ..................................... 2,300 42,435 ----------- COMPUTER/INSTRUMENTATION-2.9% Adaptec, Inc. ........................................ 4,800 47,712 Arrow Electronics, Inc. (a) .......................... 1,400 34,006 ----------- 81,718 ----------- MISCELLANEOUS INDUSTRIAL TECHNOLOGY-4.8% Avnet, Inc. .......................................... 2,100 47,082 SCI Systems, Inc. (a) ................................ 2,000 51,000 Tech Data Corp. (a) .................................. 1,100 36,696 ----------- 134,778 ----------- 2 Alliance Variable Products Series Fund ================================================================================ Company Shares U.S. $ Value - -------------------------------------------------------------------------------- SEMICONDUCTORS-1.5% General Semiconductor, Inc. (a) ...................... 4,200 $ 43,932 ----------- 302,863 ----------- CONSUMER CYCLICALS-7.1% AUTOS & AUTO PARTS-1.5% Johnson Controls, Inc. ............................... 600 43,482 ----------- HOME FURNISHINGS-1.5% Leggett & Platt, Inc. ................................ 1,900 41,857 ----------- MISCELLANEOUS CONSUMER CYCLICALS-1.4% Newell Rubbermaid, Inc. .............................. 1,600 40,160 ----------- TEXTILES/SHOES-APPAREL MFG.-1.2% V. F. Corp. .......................................... 900 32,742 ----------- TIRES & RUBBER GOODS-1.5% Goodyear Tire & Rubber Co. ........................... 1,500 42,000 ----------- 200,241 ----------- CONSUMER STAPLES-4.1% FOODS-2.4% Corn Products International, Inc. .................... 1,100 35,200 Interstate Bakeries Corp. ............................ 2,100 33,600 ----------- 68,800 ----------- RETAIL STORES - FOOD-1.7% SUPERVALU, Inc. ...................................... 2,800 49,140 ----------- 117,940 ----------- Shares or Principal Amount Company (000) U.S. $ Value - -------------------------------------------------------------------------------- ENERGY-2.9% OIL - CRUDE PRODUCTS-0.6% Valero Energy Corp. .................................. 450 $ 16,551 ----------- OILS - INTEGRATED DOMESTIC-2.3% Amerada Hess Corp. ................................... 500 40,400 Tosco Corp. .......................................... 600 26,430 ----------- 66,830 ----------- 83,381 ----------- NON-FINANCIAL-2.8% MISCELLANEOUS BUILDING-2.8% Harsco Corp. ......................................... 1,200 32,556 Sherwin-Williams Co. ................................. 2,100 46,620 ----------- 79,176 ----------- CONSUMER GROWTH-1.4% HOSPITAL SUPPLIES-1.4% Beckman Coulter, Inc. ................................ 1,000 40,800 ----------- Total Common Stocks (cost $2,645,660) ................ 2,685,591 ----------- SHORT-TERM INVESTMENT-11.4% TIME DEPOSIT-11.4% State Street Euro Dollar 3.50%, 7/02/01 (amortized cost $322,000) .......................... $322 322,000 ----------- TOTAL INVESTMENTS-106.1% (cost $2,967,660) .................................. 3,007,591 Other assets less liabilities-(6.1%) ................. (172,107) ----------- NET ASSETS-100% ...................................... $ 2,835,484 =========== - -------------------------------------------------------------------------------- (a) Non-income producing security. See Notes to Financial Statements. 3 ALLIANCEBERNSTEIN SMALL CAP VALUE PORTFOLIO STATEMENT OF ASSETS AND LIABILITIES June 30, 2001 (unaudited) Alliance Variable Products Series Fund ================================================================================ ASSETS Investments in securities, at value (cost $2,967,660) ........ $3,007,591 Cash ......................................................... 49 Dividends and interest receivable ............................ 4,505 Receivable due from Adviser .................................. 1,955 Receivable for capital stock sold ............................ 1,800 ---------- Total assets ................................................. 3,015,900 ---------- LIABILITIES Payable for investment securities purchased .................. 177,218 Accrued expenses ............................................. 3,198 ---------- Total liabilities ............................................ 180,416 ---------- NET ASSETS ..................................................... $2,835,484 ========== COMPOSITION OF NET ASSETS Capital stock, at par ........................................ $ 279 Additional paid-in capital ................................... 2,790,396 Undistributed net investment income .......................... 4,878 Net unrealized appreciation of investments ................... 39,931 ---------- $2,835,484 ========== Class A Shares Net assets ................................................... $2,832,444 ========== Shares of capital stock outstanding .......................... 278,927 ========== Net asset value per share .................................... $ 10.15 ========== Class B Shares Net assets ................................................... $ 3,040 ========== Shares of capital stock outstanding .......................... 299 ========== Net asset value per share .................................... $ 10.16 ========== - -------------------------------------------------------------------------------- See Notes to Financial Statements. 4 ALLIANCEBERNSTEIN SMALL CAP VALUE PORTFOLIO STATEMENT OF OPERATIONS June 4, 2001(a) to June 30, 2001 (unaudited) Alliance Variable Products Series Fund ================================================================================ INVESTMENT INCOME Dividends ....................................................... $ 4,661 Interest ........................................................ 1,460 -------- Total investment income ......................................... 6,121 -------- EXPENSES Advisory fee .................................................... 1,314 Administrative .................................................. 4,701 Audit and legal ................................................. 1,118 Custodian ....................................................... 1,040 Printing ........................................................ 624 Directors' fees ................................................. 130 Transfer agency ................................................. 78 Miscellaneous ................................................... 208 -------- Total expenses .................................................. 9,213 Less: expenses waived and reimbursed ............................ (7,970) -------- Net expenses .................................................... 1,243 -------- Net investment income ........................................... 4,878 -------- REALIZED AND UNREALIZED GAIN ON INVESTMENTS Net change in unrealized appreciation/depreciation of investments 39,931 -------- NET INCREASE IN NET ASSETS FROM OPERATIONS ........................ $ 44,809 ======== - -------------------------------------------------------------------------------- (a) Commencement of operations. See Notes to Financial Statements. 5 ALLIANCEBERNSTEIN SMALL CAP VALUE PORTFOLIO STATEMENT OF CHANGES IN NET ASSETS Alliance Variable Products Series Fund ================================================================================
June 4, 2001(a) to June 30, 2001 (unaudited) ---------------- INCREASE IN NET ASSETS FROM OPERATIONS Net investment income....................................................... $ 4,878 Net change in unrealized appreciation/depreciation of investments .......... 39,931 ----------- Net increase in net assets from operations ................................. 44,809 CAPITAL STOCK TRANSACTIONS Net increase ............................................................... 2,790,675 ----------- Total increase ............................................................. 2,835,484 NET ASSETS Beginning of period ........................................................ -0- ----------- End of period (including undistributed net investment income of $4,878)..... $ 2,835,484 ===========
- -------------------------------------------------------------------------------- (a) Commencement of operations. See Notes to Financial Statements. 6 ALLIANCEBERNSTEIN SMALL CAP VALUE PORTFOLIO NOTES TO FINANCIAL STATEMENTS June 4, 2001 (unaudited) Alliance Variable Products Series Fund ================================================================================ NOTE A: Significant Accounting Policies The AllianceBernstein Small Cap Value Portfolio (the "Portfolio") is a series of Alliance Variable Products Series Fund, Inc. (the "Fund"). The Portfolio's investment objective is to seek long-term growth of capital. 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 Portfolio commenced operations on June 4, 2001. The Portfolio 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. The Portfolio 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 the 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 Portfolio. 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. 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 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 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 Portfolio'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 Portfolio accretes discounts as adjustments to interest income. Investment gains and losses are determined on the identified cost basis. 5. Income and Expenses Expenses attributable to a single portfolio are charged to that portfolio. Expenses of the Fund are charged to each portfolio in proportion to net assets. All income earned and expenses incurred by a portfolio with multi-class 7 ALLIANCEBERNSTEIN SMALL CAP VALUE PORTFOLIO NOTES TO FINANCIAL STATEMENTS (continued) Alliance Variable Products Series Fund ================================================================================ shares outstanding are borne on a pro-rata basis by each outstanding class of shares, based on the proportionate interest in the portfolio represented by the net assets of such class, except that the portfolio's Class B shares bear the distribution fees. 6. Dividends and Distributions The Portfolio 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 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 1% of the Portfolio's average daily net assets. During the period ended June 30, 2001, 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 period ended June 30, 2001, such waivers/reimbursements amounted to $7,970. Brokerage commissions paid on investment transactions for the period ended June 30, 2001, amounted to $4,636, of which $526 was paid to Sanford C. Bernstein & Co. LLC, an affiliate of the Adviser. The Portfolio compensates Alliance Global 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 the Portfolio. Such compensation amounted to $78 for the period ended June 30, 2001. - -------------------------------------------------------------------------------- NOTE C: Distribution Plan The Portfolio has adopted a Plan for Class B shares pursuant to Rule 12b-1 under the Investment Company Act of 1940 (the "Plan"). Under the Plan, the Portfolio pays distribution and servicing fees to the Distributor at an annual rate of up to .50% of the 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 the Portfolio'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. The Portfolio is not obligated under the Plan to pay any distribution services fee in excess of the amounts set forth above. The purpose of the payments to the Distributor under the Plan is to compensate the Distributor for its distribution services with respect to the sale of the 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 Plan is characterized by the staff of the Commission as being of the "compensation" variety. In the event that the Plan is terminated or not continued, no distribution services fees (other than current amounts accrued but not yet paid) would be owed by the Portfolio to the Distributor. The Plan also provides that the Adviser may use its own resources to finance the distribution of the Portfolio's shares. 8 Alliance Variable Products Series Fund ================================================================================ NOTE D: Investment Transactions Purchases and sales of investment securities (excluding short-term investments) for the period ended June 30, 2001, were as follows: Purchases: Stocks and debt obligations.................................... $2,656,276 U.S. government and agencies................................... -0- Sales: Stocks and debt obligations.................................... $ -0- U.S. government and agencies................................... -0- At June 30, 2001, 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: Gross unrealized appreciation.................................. $ 75,905 Gross unrealized depreciation.................................. (35,974) ---------- Net unrealized appreciation.................................... $ 39,931 ========== 1. Forward Exchange Currency Contracts The 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 Portfolio 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. The 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 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 the Portfolio has in that particular currency contract. At June 30, 2001, the Portfolio had no outstanding forward exchange currency contracts. 2. Option Transactions For hedging and investment purposes, the 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 writ- 9 ALLIANCEBERNSTEIN SMALL CAP VALUE PORTFOLIO NOTES TO FINANCIAL STATEMENTS (continued) Alliance Variable Products Series Fund ================================================================================ ing 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 period ended June 30, 2001. - -------------------------------------------------------------------------------- NOTE E: Capital Stock There are 1,000,000,000 shares of $.001 par value capital stock authorized, divided into two classes, designated Class A and Class B shares. Each class consists of 500,000,000 authorized shares. Transactions in capital stock were as follows: ------------------ ----------------- SHARES AMOUNT ------------------ ----------------- June 4, 2001(a) to June 4, 2001(a) to June 30, 2001 June 30, 2001 (unaudited) (unaudited) ================== ================= Class A Shares sold............................... 278,956 $2,787,991 Shares redeemed........................... (29) (296) ---------- ---------- Net increase.............................. 278,927 $2,787,695 ========== ========== Class B Shares sold............................... 299 $ 2,980 Shares redeemed........................... -0- -0- ---------- ---------- Net increase.............................. 299 $ 2,980 ========== ========== - -------------------------------------------------------------------------------- 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 period ended June 30, 2001. - -------------------------------------------------------------------------------- (a) Commencement of operations 10 ALLIANCEBERNSTEIN SMALL CAP VALUE PORTFOLIO FINANCIAL HIGHLIGHTS Alliance Variable Products Series Fund ================================================================================ Selected Data For A Share Of Capital Stock Outstanding Throughout The Period
------------------ ----------------- CLASS A CLASS B ------------------ ----------------- June 4, June 4, 2001(a) to 2001(a) to June 30, 2001 June 30, 2001 (unaudited) (unaudited) ================== ================= Net asset value, beginning of period..................... $10.00 $10.00 ------ ------ Income From Investment Operations Net investment income (b)(c)............................. .04 .03 Net realized and unrealized gain on investment transactions .11 .13 ------ ------ Net increase in net asset value from operations.......... .15 .16 ------ ------ Net asset value, end of period........................... $10.15 $10.16 ====== ====== Total Return Total investment return based on net asset value (d)..... .15% .16% Ratios/Supplemental Data Net assets, end of period (000's omitted)................ $2,832 $3 Ratio to average net assets of: Expenses, net of waivers and reimbursements (e)........ .95% 1.20% Expenses, before waivers and reimbursements (e)........ 7.01% 9.16% Net investment income (c)(e)........................... 3.71% 4.57%
================================================================================ (a) Commencement of operations. (b) Based on average shares outstanding. (c) Net of expenses reimbursed or waived by the Adviser. (d) 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. (e) Annualized. 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 Kathleen A. Corbet, Senior Vice President Alfred L. Harrison, Senior Vice President Peter Anastos, Vice President Andrew Aran, 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 Kenneth T. Carty, Vice President Frank Caruso, Vice President John F. Chiodi, Vice President Paul J. DeNoon, Vice President Joseph C. Dona, Vice President Gregory Dube, Vice President Marilyn G. Fedak, Vice President F. Jeanne Goetz, Vice President Jane Mack Gould, Vice President David A. Kruth, Vice President Alan E. Levi, Vice President Michael Levy, Vice President Gerald T. Malone, Vice President Andrew Moloff, Vice President Michael Mon, Vice President Raymond J. Papera, Vice President Douglas J. Peebles, Vice President Daniel G. Pine, Vice President Steven Pisarkiewicz, Vice President John Ricciardi, Vice President Paul C. Rissman, Vice President Gregory R. Sawers, Vice President Kevin F. Simms, Vice President Kenneth D. Smalley, Vice President Michael A. Snyder, Vice President Annie Tsao, 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 Global Investor 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.) -----END PRIVACY-ENHANCED MESSAGE-----