N-30D 1 edg6659.txt VARP - GLOBAL DOLLAR SAR ALLIANCE ---------------------- VARIABLE PRODUCTS ---------------------- SERIES FUND ---------------------- GLOBAL DOLLAR ---------------------- GOVERNMENT PORTFOLIO ---------------------- SEMI-ANNUAL REPORT JUNE 30, 2001 Investment Products Offered --------------------------- > Are Not FDIC Insured > May Lose Value > Are Not Bank Guaranteed --------------------------- GLOBAL DOLLAR GOVERNMENT PORTFOLIO PORTFOLIO OF INVESTMENTS June 30, 2001 (unaudited) Alliance Variable Products Series Fund ================================================================================ Principal Amount (000) U.S. $ Value -------------------------------------------------------------------------------- SOVEREIGN DEBT OBLIGATIONS-72.9% COLLATERALIZED BRADY BONDS-3.5% BULGARIA-3.5% Republic of Bulgaria FRN 6.312%, 7/28/24 (cost $397,512) ........................... $ 500 $ 391,900 ----------- NON-COLLATERALIZED BRADY BONDS-2.4% BRAZIL-1.8% Republic of Brazil 8.00%, 4/15/14 ............................ 271 200,474 ----------- PERU-0.6% Republic of Peru PDI 4.50%, 3/07/17 ............................ 100 68,880 ----------- Total Non-Collateralized Brady Bonds (cost $267,193) ........................... 269,354 ----------- SOVEREIGN DEBT SECURITIES-67.0% ARGENTINA-13.0% Republic of Argentina 7.00%, 12/19/08 ........................... 1,367 1,030,609 12.00%, 6/19/31 ........................... 414 285,418 12.25%, 6/19/18 ........................... 195 138,450 ----------- 1,454,477 ----------- BRAZIL-15.7% Republic of Brazil 9.625%, 7/15/05 ........................... 100 93,900 11.00%, 8/17/40 ........................... 2,250 1,665,000 ----------- 1,758,900 ----------- CAYMAN ISLANDS-0.9% Petrobas International Finance 9.75%, 7/06/11 (a) ........................ 100 99,749 ----------- COLOMBIA-3.4% Republic of Columbia 8.375%, 2/15/27 ........................... 330 226,875 10.50%, 6/13/06 ........................... 60 61,800 11.75%, 2/25/20 ........................... 100 95,250 ----------- 383,925 ----------- ECUADOR-1.1% Republic of Ecuador 4.00%, 8/15/30 (a) ........................ 300 127,890 ----------- EGYPT-0.9% Egypt CTF 8.75%, 7/11/11 (a) ........................ 100 99,881 ----------- MALAYSIA-0.9% Malaysia 7.50%, 7/15/11 ............................ 100 98,749 ----------- MEXICO-2.6% United Mexican States, Warrants, expiring 6/01/03 ................ 461 4,610 United Mexican States - Global Bonds 8.125%, 12/30/19 .......................... 300 283,500 ----------- 288,110 ----------- PANAMA-2.8% Repubic of Panama-Global Bonds 10.75%, 5/15/20 ........................... 200 210,260 Republic of Panama 9.375%, 4/01/29 ........................... 100 101,500 ----------- 311,760 ----------- PHILIPPINES-2.3% Republic of Philippines 9.875%, 1/15/19 ........................... 200 173,000 10.625%, 3/16/25 .......................... 100 90,750 ----------- 263,750 ----------- QATAR-1.8% State of Qatar 9.75%, 6/15/30 (a) ........................ 180 205,369 ----------- RUSSIA-17.7% Russia Ministry of Finance 3.00%, 5/14/03 ............................ 200 165,000 3.00%, 5/14/06 ............................ 270 167,076 3.00%, 5/14/08 ............................ 100 51,000 Russian Federation 5.00%, 3/31/30 (a) ........................ 3,400 1,607,350 ----------- 1,990,426 ----------- TRINIDAD & TOBAGO-1.9% Republic of Trinidad & Tobago 9.75%, 7/01/20 (a) ........................ 200 218,500 ----------- TURKEY-0.2% Republic of Turkey 11.75%, 6/15/10 ........................... 20 17,550 ----------- UKRAINE-0.7% Government of Ukraine 11.00%, 3/15/07 (a) ....................... 97 74,884 ----------- VENEZUELA-1.1% Republic of Venezuela-Global Bonds 9.25%, 9/15/27 ............................ 175 120,977 ----------- Total Sovereign Debt Securities (cost $7,235,746) ......................... 7,514,897 ----------- Total Sovereign Debt Obligations (cost $7,900,451) ......................... 8,176,151 ----------- 1 GLOBAL DOLLAR GOVERNMENT PORTFOLIO PORTFOLIO OF INVESTMENTS (continued) Alliance Variable Products Series Fund ================================================================================ Principal Amount (000) U.S. $ Value -------------------------------------------------------------------------------- CORPORATE DEBT OBLIGATIONS-9.2% COMMUNICATIONS-MOBILE-1.7% Tricom, SA 11.375%, 9/01/04 ......................... $ 200 $ 187,500 ----------- INDUSTRIAL-1.8% Pemex Project Funding Master Trust 8.50%, 2/15/08 (a) ....................... 200 205,500 ----------- PUBLIC UTILITIES-TELEPHONE-0.9% PTC International Finance II SA 11.25%, 12/01/09 ......................... 100 98,500 ----------- YANKEE BONDS-4.8% Grupo Iusacell SA de CV 14.25%, 12/01/06 ......................... 100 106,500 Petroleos Mexicanos 9.25%, 3/30/18 (a) ....................... 400 419,000 Transportacion Maritima Mexicana SP 1.00%, 5/15/03 ........................... 12 11,010 ----------- 536,510 ----------- Total Corporate Debt Obligations (cost $989,585) .......................... 1,028,010 ----------- SHORT-TERM INVESTMENT-10.6% TIME DEPOSIT-10.6% State Street Euro Dollar 3.25%, 7/02/01 (amortized cost $1,193,000) ......... ..... 1,193 1,193,000 ----------- TOTAL INVESTMENTS-92.7% (cost $10,083,036) ....................... 10,397,161 Other assets less liabilities-7.3% .......... 816,883 ----------- NET ASSETS-100% ............................. $11,214,044 =========== -------------------------------------------------------------------------------- (a) 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, 2001 the aggregate market value of these securities amounted to $3,058,123 or 27.3% of net assets. Glossary of Terms: FRN - Floating Rate Note. PDI - Past Due Interest. See Notes to Financial Statements. 2 GLOBAL DOLLAR GOVERNMENT PORTFOLIO STATEMENT OF ASSETS AND LIABILITIES June 30, 2001 (unaudited) Alliance Variable Products Series Fund ================================================================================ ASSETS Investments in securities, at value (cost $10,083,036) ..... $ 10,397,161 Cash ....................................................... 709 Receivable for investment securities sold .................. 903,854 Interest receivable ........................................ 249,410 ------------ Total assets ............................................... 11,551,134 ------------ LIABILITIES Payable for investment securities purchased ................ 298,249 Advisory fee payable ....................................... 2,127 Accrued expenses ........................................... 36,714 ------------ Total liabilities .......................................... 337,090 ------------ NET ASSETS .................................................... $ 11,214,044 ============ COMPOSITION OF NET ASSETS Capital stock, at par ...................................... $ 1,085 Additional paid-in capital ................................. 14,224,536 Undistributed net investment income ........................ 573,943 Accumulated net realized loss on investments ............... (3,899,645) Net unrealized appreciation of investments ................. 314,125 ------------ $ 11,214,044 ============ Class A Shares Net assets ................................................. $ 11,214,044 ============ Shares of capital stock outstanding ........................ 1,084,663 ============ Net asset value per share .................................. $ 10.34 ============ -------------------------------------------------------------------------------- See Notes to Financial Statements. 3 GLOBAL DOLLAR GOVERNMENT PORTFOLIO STATEMENT OF OPERATIONS Six Months Ended June 30, 2001 (unaudited) Alliance Variable Products Series Fund ================================================================================ INVESTMENT INCOME Interest ........................................................ $ 628,884 --------- EXPENSES Advisory fee .................................................... 38,889 Custodian ....................................................... 32,881 Audit and legal ................................................. 15,064 Printing ........................................................ 9,639 Directors' fees ................................................. 543 Transfer agency ................................................. 515 Miscellaneous ................................................... 1,193 --------- Total expenses .................................................. 98,724 Less: expenses waived and reimbursed ............................ (49,464) --------- Net expenses .................................................... 49,260 --------- Net investment income ........................................... 579,624 --------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS Net realized loss on investment transactions .................... (132,177) Net change in unrealized appreciation/depreciation of investments 184,384 --------- Net gain on investments ......................................... 52,207 --------- NET INCREASE IN NET ASSETS FROM OPERATIONS ......................... $ 631,831 ========= -------------------------------------------------------------------------------- See Notes to Financial Statements. 4 GLOBAL DOLLAR GOVERNMENT PORTFOLIO STATEMENT OF CHANGES IN NET ASSETS Alliance Variable Products Series Fund ================================================================================
Six Months Ended Year Ended June 30, 2001 December 31, (unaudited) 2000 ================ ================ INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS Net investment income................................................ $ 579,624 $ 1,120,087 Net realized gain (loss) on investments.............................. (132,177) 427,260 Net change in unrealized appreciation/depreciation of investments.... 184,384 (296,891) -------------- -------------- Net increase in net assets from operations........................... 631,831 1,250,456 DIVIDENDS TO SHAREHOLDERS FROM: Net investment income Class A............................................................ (1,095,933) (1,112,048) CAPITAL STOCK TRANSACTIONS Net increase (decrease).............................................. 2,254,787 (853,612) -------------- -------------- Total increase (decrease)............................................ 1,790,685 (715,204) NET ASSETS Beginning of period.................................................. 9,423,359 10,138,563 -------------- -------------- End of period (including undistributed net investment income of $573,943 and $1,090,252, respectively)............................. $ 11,214,044 $ 9,423,359 ============== ==============
-------------------------------------------------------------------------------- See Notes to Financial Statements. 5 GLOBAL DOLLAR GOVERNMENT PORTFOLIO STATEMENT OF ASSETS AND LIABILITIES June 30, 2001 (unaudited) Alliance Variable Products Series Fund ================================================================================ NOTE A: Significant Accounting Policies The Global Dollar Government Portfolio (the "Portfolio") is a series of Alliance Variable Products Series Fund, Inc. (the "Fund"). The Portfolio's investment objective is to seek a high level of current income and, secondarily, capital appreciation. 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 offers Class A and Class B shares. As of June 30, 2001, the Portfolio had only Class A shares outstanding. 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 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 Alliance Variable Products Series Fund ================================================================================ 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. 7. Change in Accounting Principle As required, effective January 1, 2001, the Portolio has adopted the provisions of the AICPA Audit and Accounting Guide, Audits of Investment Companies, and began amortizing premium on debt securities for financial statement reporting purposes only. This change will have no impact on the net assets of the Portfolio. Prior to January 1, 2001, the Portfolio did not amortize premiums on debt securities. For the period ended June 30, 2001, the Portfolio determined that the adoption of premium amortization policy did not result in material difference to the net investment income. -------------------------------------------------------------------------------- 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 .75% of the Portfolio's average daily net assets. During the six months 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% of the average daily net assets for Class A shares. Expense waivers/ reimbursements, if any, are accrued daily and paid monthly. For the six months ended June 30, 2001, such waivers/reimbursements amounted to $49,464. 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 $474 for the six months 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. 7 GLOBAL DOLLAR GOVERNMENT PORTFOLIO NOTES TO FINANCIAL STATEMENTS (continued) Alliance Variable Products Series Fund ================================================================================ NOTE D: Investment Transactions Purchases and sales of investment securities (excluding short-term investments) for the six months ended June 30, 2001, were as follows: Purchases: Stocks and debt obligations ............................ $ 8,107,926 U.S. government and agencies ........................... -0- Sales: Stocks and debt obligations ............................ $ 7,027,566 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 (excluding foreign currency transactions) are as follows: Gross unrealized appreciation .......................... $ 521,703 Gross unrealized depreciation .......................... (207,578) ----------- Net unrealized appreciation ............................ $ 314,125 =========== At December 31, 2000, for federal income tax purposes, the Portfolio had net capital loss carryforwards of $3,739,439, of which $1,609,599 expires in the year 2006 and $2,129,840 expires in the year 2007. Capital 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 $21,047 during the fiscal year. 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 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, 2001. 8 Alliance Variable Products Series Fund ================================================================================ NOTE E: Capital Stock There are 500,000,000 Class A shares of $.001 par value capital stock authorized. Transactions in capital stock were as follows:
----------------------------------- ----------------------------------- SHARES AMOUNT ----------------------------------- ----------------------------------- Six Months Ended Year Ended Six Months Ended Year Ended June 30, 2001 December 31, June 30, 2001 December 31, (unaudited) 2000 (unaudited) 2000 ================ ================ ================ ================ Class A Shares sold....................... 201,410 132,479 $ 2,216,825 $ 1,432,468 Shares issued in reinvestment of dividends...................... 103,390 111,428 1,095,933 1,112,048 Shares redeemed................... (95,625) (308,447) (1,057,971) (3,398,128) -------------- -------------- -------------- -------------- Net increase (decrease)........... 209,175 (64,540) $ 2,254,787 $ (853,612) ============== ============== ============== ==============
-------------------------------------------------------------------------------- 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 six months ended June 30, 2001. 9 GLOBAL DOLLAR GOVERNMENT 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, 2001 ===================================================================== (unaudited) 2000 1999 1998 1997 1996 ========== ========== ========== ========== ========== ========== Net asset value, beginning of period ..... $ 10.76 $ 10.79 $ 10.18 $ 14.65 $ 14.32 $ 11.95 ---------- ---------- ---------- ---------- ---------- ---------- Income From Investment Operations Net investment income (a)(b) ............. .61 1.27 1.21 1.20 1.17 1.10 Net realized and unrealized gain (loss) on investment transactions ............ .11 .14 1.08 (4.03) .70 1.78 ---------- ---------- ---------- ---------- ---------- ---------- Net increase (decrease) in net asset value from operations ................. .72 1.41 2.29 (2.83) 1.87 2.88 ---------- ---------- ---------- ---------- ---------- ---------- Less: Dividends and Distributions Dividends from net investment income ..... (1.14) (1.44) (1.68) (.95) (.61) (.48) Distributions from net realized gains .... -0- -0- -0- (.69) (.93) (.03) ---------- ---------- ---------- ---------- ---------- ---------- Total dividends and distributions ........ (1.14) (1.44) (1.68) (1.64) (1.54) (.51) ---------- ---------- ---------- ---------- ---------- ---------- Net asset value, end of period ........... $ 10.34 $ 10.76 $ 10.79 $ 10.18 $ 14.65 $ 14.32 ========== ========== ========== ========== ========== ========== Total Return Total investment return based on net asset value (c) ................ 6.39% 14.06% 26.08% (21.71)% 13.23 % 24.90% Ratios/Supplemental Data Net assets, end of period (000's omitted) ....................... $ 11,214 $ 9,423 $ 10,139 $ 10,380 $ 15,378 $ 8,847 Ratio to average net assets of: Expenses, net of waivers and reimbursements .................. .95%(d) .95% .95% .95% .95 % .95% Expenses, before waivers and reimbursements .................. 1.90%(d) 2.42% 2.29% 1.75% 1.29 % 1.97% Net investment income (a) ............. 11.18%(d) 11.71% 12.42% 9.49% 7.87 % 8.53% Portfolio turnover rate .................. 79% 148% 117% 166% 214 % 155%
-------------------------------------------------------------------------------- (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. 10 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 Andrew S. Adelson, 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. 11 (This page left intentionally blank.) (This page left intentionally blank.)