N-30D 1 edg7530.txt VARP GROWTH ALLIANCE ---------------------------------------------- VARIABLE PRODUCTS ---------------------------------------------- SERIES FUND ---------------------------------------------- GROWTH PORTFOLIO ---------------------------------------------- ANNUAL REPORT DECEMBER 31, 2001 Investment Products Offered --------------------------- > Are Not FDIC Insured > May Lose Value > Are Not Bank Guaranteed --------------------------- GROWTH PORTFOLIO Alliance Variable Products Series Fund ================================================================================ LETTER TO INVESTORS February 12, 2002 Dear Investor: We are pleased to provide you with an update of Alliance Variable Products Series Fund--Alliance Growth Portfolio (the "Portfolio") for the annual reporting period ended December 31, 2001. INVESTMENT OBJECTIVE The Portfolio seeks long-term growth of capital. Current income is incidental to the Portfolio's objective. The Portfolio invests primarily in equity securities of companies with favorable earnings outlooks and whose long-term growth rates are expected to exceed that of the U.S. economy over time. The Portfolio emphasizes investments in large- and mid-cap companies. The Portfolio also may invest up to 25% of its total assets in lower-rated, fixed income securities and convertible bonds, and generally up to 20% of its total assets in foreign securities. INVESTMENT RESULTS Listed below are the Portfolio's average annual total returns for the one-year, five-year and since inception periods ended December 31, 2001. 1 Year -23.47% 5 Years 7.28% Since Inception 9/94 13.98% Total returns are based on net asset value (NAV) performance for Class A shares and reflect reinvestment of dividends and/or capital gains distributions in additional shares. These figures do not reflect insurance company separate account or annuity contract charges, which would reduce total return to a contract owner. Past performance does not guarantee future results. Investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. During the six- and 12-month periods ended December 31, 2001, the Portfolio returned -9.58% and -23.47%, respectively. The Portfolio's benchmarks, the Standard & Poor's (S&P) 500 Stock Index and Russell 3000 Index, posted returns of -5.56% and -5.69% for the six-month period, respectively, and -11.89% and -11.45% for the 12-month period, respectively. The performance of the Portfolio during the 12-month period under review was particularly disappointing as compared with the Russell 3000 Index and the S&P 500 Stock Index. The Portfolio's poor performance reflects the generally difficult environment for growth stocks overall. This environment, combined with particularly severe weakness in a number of communication and technology stocks, contributed to the Portfolio's underperformance. The Portfolio's significant exposure to the communications sector late in 2000 and subsequent repositioning into a number of more diversified technology holdings adversely affected its performance earlier this year. This repositioning was made in light of deterioration in communication industry prospects, as well as in order to achieve exposure to additional longer-term growth sectors, such as outsourcing. The Portfolio outperformed both benchmarks in the fourth quarter of 2001 due to a sharp rebound in the technology sector. Other outperforming groups included the consumer services and multi-industry sectors. Nearly 50% of the Portfolio was invested in each of these three sectors. We believe we will see early signs of a recovery. Inventories have been sufficiently liquidated, and monetary and fiscal policies have provided tremendous liquidity to the economy. Confirmation of an upturn may require some time, but profit comparisons will become more favorable as the year progresses. Our investment strategy continues to have the Portfolio balanced between more volatile technology stocks and more stable health care and financial stocks. We are also investigating cyclical growth companies in order to participate more directly in the recovery we expect. MARKET REVIEW This past year certainly will be remembered as a painful one in many respects. From an investment point of view, equity markets produced the second consecutive negative annual return for the first time since 1973-74. The economy succumbed to excess capacity and a decline in demand for technology stocks, which took corporate profits down. Europe and Asia eventually followed, and by the fourth quarter, a recession was officially declared. As we all know, the nature of this recession has been quite different from earlier experiences. Corporate investment expenditures, particularly in the telecommunications and technology sectors, reached excessive levels, encouraged by overvalued equity markets and private capital seeking a home. Consumer spending, while down from the unsustainably high rates of late 1999 and 2000, nonetheless has been steady at around 2%. Housing, as well, has held up remarkably well as compared to 1 GROWTH PORTFOLIO Alliance Variable Products Series Fund ================================================================================ past cycles. Thus, the recession has affected primarily the manufacturing sector and capital markets. INVESTMENT OUTLOOK We believe we can see early signs of a recovery, which we are hopeful will continue into 2002. There are several reasons supporting our more constructive view. Among the most important is the dramatic progress made in reducing inventories. Companies started to cut inventories before any slowdown started in the economy. The liquidation was swift and effective. It is estimated that inventory reduction was at an annual rate of $120 billion in the fourth quarter, the largest decline on record. Second, liquidity growth accelerated in 2001 to 4.3% and ended the year up an estimated 5%. Monetary policy became more aggressive after the events of September 11 in order to mitigate a likely decline in business. Third, fiscal policy also has become more expansive. Assuming additional funds are approved this year, a total of about $200 billion, or 2% of nominal gross domestic product (GDP), would enter the economy. Fiscal and monetary policies are now working together for the first time in two decades. Another source of enhanced liquidity is the decline in oil prices ($50 billion savings for each $10/barrel decline). Finally, it appears that expenditures on technology equipment and software relative to GDP have fallen below trend line for the first time in five years. This could be a positive factor at the end of this year or in 2003. Confirmation of our more optimistic outlook will take time. Several factors will moderate the rate of recovery. These include lack of pent-up demand given the absence of cyclical contraction in consumer durables and housing. Trade will continue to be a drag since Europe and Asia lag the U.S. cycle and Japan remains deep in recession. Notwithstanding these forces, we believe the foundation for recovery is in place for the reasons earlier discussed. Our investment strategy retains its "barbell" structure, with more volatile technology balanced by health care and financial stocks. We are also investigating cyclical growth companies in order to participate more directly in the economic upturn we expect. We are looking at opportunities on a stock by stock basis, rather than by sector. We appreciate your investment in Alliance Growth Portfolio and look forward to reporting further investment progress in the coming period. Sincerely, /s/ Jane Mack Gould Jane Mack Gould Vice President and Portfolio Manager /s/ Alan Levi Alan Levi Vice President and Portfolio Manager 2 GROWTH PORTFOLIO Alliance Variable Products Series Fund ================================================================================ PERFORMANCE UPDATE Growth Portfolio Standard & Poor's 500 Stock Index Russell 3000 Index [The following table was depicted as a line chart in the printed material.] S&P 500 Stock Index: $28,108 Russell 3000 Index: $26,864 Growth Portfolio: $25,995 Growth Russell 3000 S&P 500 Stock Portfolio Index Index ------------------------------------------------------------------------ 9/30/1994* $10,000 $10,000 $10,000 12/31/94 $10,530 $ 9,947 $ 9,998 12/31/95 $14,239 $13,608 $13,751 12/31/96 $18,295 $16,577 $16,906 12/31/97 $23,788 $21,845 $22,545 12/31/98 $30,621 $27,118 $28,992 12/31/99 $41,176 $32,787 $35,090 12/31/00 $33,967 $30,341 $31,896 12/31/01 $25,995 $26,864 $28,108 Past performance is no guarantee of future results. This chart illustrates the total value of an assumed $10,000 investment in the Portfolio as compared to the performance of an appropriate broad-based index for the time frames indicated for the Portfolio. Performance results for the Portfolio represent the Portfolio's total return at net asset value (NAV). An investor cannot invest directly in an index or average, and its results are not indicative of the performance for any Alliance mutual fund. The unmanaged Russell 3000 Index is comprised of 3000 of the largest capitalized companies that are traded in the United States. The unmanaged Standard and Poor's (S&P) 500 Stock Index includes 500 stocks and is a common measure of the performance of the overall U.S. stock market. -------------------------------------------------------------------------------- * Since closest month-end after Portfolio's inception. The inception date for the Portfolio is 9/15/94. 3 GROWTH PORTFOLIO TEN LARGEST HOLDINGS December 31, 2001 Alliance Variable Products Series Fund ================================================================================ -------------------------------------------------------------------------------- COMPANY U.S. $ VALUE PERCENT OF NET ASSETS -------------------------------------------------------------------------------- Tyco International, Ltd. $ 18,084,892 5.6% -------------------------------------------------------------------------------- Citigroup, Inc. 16,009,076 5.0 -------------------------------------------------------------------------------- Kohl's Corp. 12,568,609 3.9 -------------------------------------------------------------------------------- Harley-Davidson, Inc. 11,334,497 3.5 -------------------------------------------------------------------------------- American International Group, Inc. 11,153,238 3.5 -------------------------------------------------------------------------------- Bank One Corp. 10,281,865 3.2 -------------------------------------------------------------------------------- Cardinal Health, Inc. 9,867,116 3.1 -------------------------------------------------------------------------------- Flextronics International, Ltd. 9,521,631 3.0 -------------------------------------------------------------------------------- MBNA Corp. 8,694,928 2.7 -------------------------------------------------------------------------------- Health Management Associates, Inc. Cl.A 8,600,160 2.7 ------------ ---- -------------------------------------------------------------------------------- $116,116,012 36.2% -------------------------------------------------------------------------------- 4 GROWTH PORTFOLIO PORTFOLIO OF INVESTMENTS December 31, 2001 Alliance Variable Products Series Fund ================================================================================ Company Shares U.S. $ Value ------------------------------------------------------------------------------- COMMON STOCKS-98.9% TECHNOLOGY-23.7% COMMUNICATION EQUIPMENT-6.6% Cisco Systems, Inc. (a) ......................... 438,620 $ 7,943,408 Juniper Networks, Inc. (a) ...................... 450,000 8,527,500 Nokia Corp. (ADR) (Finland) ..................... 188,800 4,631,264 ----------- 21,102,172 ----------- COMPUTER SERVICES-2.2% Affiliated Computer Services, Inc. Cl.A (a) ..... 31,800 3,374,934 Fiserv, Inc. (a) ................................ 89,800 3,800,336 ----------- 7,175,270 ----------- CONTRACT MANUFACTURING-6.7% Celestica, Inc. (a) ............................. 35,800 1,445,962 Flextronics International, Ltd. (Singapore) (a) . 396,900 9,521,631 Sanmina Corp. (a) ............................... 301,700 6,003,830 Solectron Corp. (a) ............................. 385,000 4,342,800 ----------- 21,314,223 ----------- SEMI-CONDUCTOR CAPITAL EQUIPMENT-1.1% Applied Materials, Inc. (a) ..................... 88,000 3,528,800 ----------- SEMI-CONDUCTOR COMPONENTS-1.5% Altera Corp. (a) ................................ 122,520 2,599,875 Applied Micro Circuits Corp. (a) ................ 94,700 1,072,004 Micron Technology, Inc. (a) ..................... 40,900 1,267,900 ----------- 4,939,779 ----------- SOFTWARE-4.3% Amdocs, Ltd. (Guernsey) (a) ..................... 50,700 1,722,279 BEA Systems, Inc. (a) ........................... 128,300 1,975,820 Check Point Software Technologies, Ltd. (Israel) (a) ................................. 17,900 714,031 Mercury Interactive Corp. (a) ................... 36,000 1,223,280 PeopleSoft, Inc. (a) ............................ 50,550 2,032,110 VERITAS Software Corp. (a) ...................... 133,400 5,980,322 ----------- 13,647,842 ----------- MISCELLANEOUS-1.3% Thermo Electron Corp. ........................... 173,900 4,149,254 ----------- 75,857,340 ----------- FINANCE-19.9% BANKING-REGIONAL-3.2% Bank One Corp. .................................. 263,300 10,281,865 ----------- BROKERAGE & MONEY MANAGEMENT-2.0% Legg Mason, Inc. ................................ 95,500 4,773,090 Merrill Lynch & Co., Inc. ....................... 34,000 1,772,080 ----------- 6,545,170 ----------- INSURANCE-5.4% American International Group, Inc. .............. 140,469 $11,153,238 Arthur J. Gallagher & Co. ....................... 89,700 3,093,753 XL Capital, Ltd. Cl.A (Bermuda) ................. 32,200 2,941,792 ----------- 17,188,783 ----------- MISCELLANEOUS-9.3% Ambac Financial Group, Inc. ..................... 84,950 4,915,207 Citigroup, Inc. ................................. 317,137 16,009,076 MBNA Corp. ...................................... 247,015 8,694,928 ----------- 29,619,211 ----------- 63,635,029 ----------- HEALTH CARE-19.5% DRUGS-6.3% Allergan, Inc. .................................. 75,300 5,651,265 American Home Products Corp ..................... 41,600 2,552,576 Enzon, Inc. (a) ................................. 46,800 2,633,904 Pfizer, Inc. .................................... 146,800 5,849,980 SICOR, Inc. (a) ................................. 218,000 3,418,240 ----------- 20,105,965 ----------- MEDICAL PRODUCTS-2.4% Stryker Corp. ................................... 131,200 7,658,144 ----------- MEDICAL SERVICES-10.8% Cardinal Health, Inc. ........................... 152,600 9,867,116 Express Scripts, Inc. Cl.A (a) .................. 170,200 7,958,552 Health Management Associates, Inc. Cl.A (a) ..... 467,400 8,600,160 Laboratory Corp. of America Holdings (a) ........ 52,800 4,268,880 Tenet Healthcare Corp. (a) ...................... 35,100 2,061,072 Wellpoint Health Networks, Inc. (a) ............. 16,800 1,963,080 ----------- 34,718,860 ----------- 62,482,969 ----------- CONSUMER SERVICES-18.2% AIRLINES-1.5% Southwest Airlines Co. .......................... 254,300 4,699,464 ----------- BROADCASTING & CABLE-6.4% AOL Time Warner, Inc. (a) ....................... 176,850 5,676,885 Comcast Corp. Cl.A (a) .......................... 219,700 7,909,200 Liberty Media Corp. Cl.A (a) .................... 491,106 6,875,484 ----------- 20,461,569 ----------- CELLULAR COMMUNICATIONS-2.0% AT&T Wireless Services, Inc. (a) ................ 323,000 4,641,510 Triton PCS Holdings, Inc. Cl.A, (a) ............. 60,100 1,763,935 ----------- 6,405,445 ----------- 5 GROWTH PORTFOLIO PORTFOLIO OF INVESTMENTS (continued) Alliance Variable Products Series Fund ================================================================================ Company Shares U.S. $ Value ------------------------------------------------------------------------------- ENTERTAINMENT & LEISURE-3.5% Harley-Davidson, Inc. ........................... 208,700 $ 11,334,497 ------------ RETAIL - GENERAL MERCHANDISE-4.0% Kohl's Corp. (a) ................................ 178,430 12,568,609 Tiffany & Co. ................................... 7,700 242,319 ------------ 12,810,928 ------------ MISCELLANEOUS-0.8% Career Education Corp. (a) ...................... 78,400 2,687,552 ------------ 58,399,455 ------------ MULTI-INDUSTRY COMPANIES-7.6% Danaher Corp. ................................... 104,600 6,308,426 Tyco International, Ltd. ........................ 307,044 18,084,892 ------------ 24,393,318 ------------ CONSUMER MANUFACTURING-3.0% BUILDING & RELATED-3.0% American Standard Cos., Inc. (a) ................ 84,200 5,744,966 Centex Corp. .................................... 15,000 856,350 D.R. Horton, Inc. ............................... 64,000 2,077,440 KB HOME ......................................... 21,000 842,100 ------------ 9,520,856 ------------ ENERGY-2.4% OIL SERVICE-2.4% Baker Hughes, Inc. .............................. 115,400 4,208,638 Transocean Sedco Forex, Inc. .................... 39,000 1,318,980 Weatherford International, Inc. (a) ............. 61,900 2,306,394 ------------ 7,834,012 ------------ Shares or Principal Amount Company (000) U.S. $ Value ------------------------------------------------------------------------------- CAPITAL GOODS-2.2% ENGINEERING & CONSTRUCTION-0.9% Jacobs Engineering Group, Inc. (a) .............. 44,100 2,910,600 ------------ MISCELLANEOUS-1.3% General Electric Co. ............................ 102,800 4,120,224 ------------ 7,030,824 ------------ TRANSPORTATION-1.4% AIR FREIGHT-1.4% United Parcel Service, Inc. Cl.B ................ 84,500 4,605,250 ------------ UTILITIES-1.0% ELECTRIC & GAS UTILITY-1.0% AES Corp. (a) ................................... 199,000 3,253,650 ------------ Total Common Stocks (cost $321,671,092) .......................... 317,012,703 ------------ SHORT-TERM INVESTMENT-1.2% Federal Home Loan Mortgage Corp. 1.51%, 1/02/02 (cost $3,799,840) ............................ $ 3,800 3,799,840 ------------ TOTAL INVESTMENTS-100.1% (cost $325,470,932) .......................... 320,812,543 Other assets less liabilities-(0.1%) ........................... (360,303) ------------ NET ASSETS-100% ................................. $320,452,240 ============ ------------------------------------------------------------------------------- (a) Non-income producing security. Glossary: ADR - American Depositary Receipt. See Notes to Financial Statements. 6 GROWTH PORTFOLIO STATEMENT OF ASSETS AND LIABILITIES December 31, 2001 Alliance Variable Products Series Fund ================================================================================ ASSETS Investments in securities, at value (cost $325,470,932) .. $ 320,812,543(a) Cash ..................................................... 178,202 Collateral held for securities loaned .................... 4,997,200 Receivable for capital stock sold ........................ 456,170 Dividends and interest receivable ........................ 163,667 ------------- Total assets ............................................. 326,607,782 ------------- LIABILITIES Payable for collateral received on securities loaned ..... 4,997,200 Payable for capital stock redeemed ....................... 744,401 Advisory fee payable ..................................... 204,409 Accrued expenses ......................................... 209,532 ------------- Total liabilities ........................................ 6,155,542 ------------- NET ASSETS ................................................. $ 320,452,240 ============= COMPOSITION OF NET ASSETS Capital stock, at par .................................... $ 19,556 Additional paid-in capital ............................... 393,137,225 Accumulated net realized loss on investments ............. (68,046,152) Net unrealized depreciation of investments ............... (4,658,389) ------------- $ 320,452,240 ============= Class A Shares Net assets ............................................... $ 226,237,199 ============= Shares of capital stock outstanding ...................... 13,780,680 ============= Net asset value per share ................................ $ 16.42 ============= Class B Shares Net assets ............................................... $ 94,215,041 ============= Shares of capital stock outstanding ...................... 5,775,672 ============= Net asset value per share ................................ $ 16.31 ============= -------------------------------------------------------------------------------- (a) Includes securities on loan with a value of $4,860,986 (see Note F). See Notes to Financial Statements 7 GROWTH PORTFOLIO STATEMENT OF OPERATIONS Year Ended December 31, 2001 Alliance Variable Products Series Fund ================================================================================ INVESTMENT INCOME Dividends (net of foreign taxes withheld of $11,253) ..... $ 1,656,248 Interest ................................................. 193,330 ------------- Total investment income .................................. 1,849,578 ------------- EXPENSES Advisory fee ............................................. 2,556,187 Distribution fee--Class B ................................ 187,651 Custodian ................................................ 164,979 Administrative ........................................... 80,247 Audit and legal .......................................... 63,551 Printing ................................................. 32,149 Directors' fees .......................................... 4,324 Transfer agency .......................................... 915 Miscellaneous ............................................ 12,760 ------------- Total expenses ........................................... 3,102,763 ------------- Net investment loss ...................................... (1,253,185) ------------- REALIZED AND UNREALIZED LOSS ON INVESTMENT AND FOREIGN CURRENCY TRANSACTIONS Net realized loss on investment transactions ............. (47,691,989) Net realized loss on foreign currency transactions ....... (285,594) Net change in unrealized appreciation/depreciation of: Investments ........................................... (50,163,001) Foreign currency denominated assets and liabilities ... (40,342) ------------- Net loss on investment and foreign currency transactions . (98,180,926) ------------- NET DECREASE IN NET ASSETS FROM OPERATIONS ................. $ (99,434,111) ============= -------------------------------------------------------------------------------- See Notes to Financial Statements. 8 GROWTH PORTFOLIO STATEMENT OF CHANGES IN NET ASSETS Alliance Variable Products Series Fund ================================================================================
Year Ended Year Ended December 31, December 31, 2001 2000 ============= ============= INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS Net investment income (loss) ............................................... $ (1,253,185) $ 1,140,973 Net realized gain (loss) on investment and foreign currency transactions ... (47,977,583) 30,450,409 Net change in unrealized appreciation/depreciation of investments and foreign currency denominated assets and liabilities ..................... (50,203,343) (118,842,392) ------------- ------------- Net decrease in net assets from operations ................................. (99,434,111) (87,251,010) DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM: Net investment income Class A ................................................................. (744,905) (301,829) Class B ................................................................. (149,232) (5,174) Net realized gain on investments Class A ................................................................. (23,829,788) (43,806,324) Class B ................................................................. (6,661,379) (1,270,971) Distributions in excess of net realized gain on investments Class A ................................................................. (15,938,925) -0- Class B ................................................................. (4,455,567) -0- Return of capital Class A ................................................................. (109,033) -0- Class B ................................................................. (21,843) -0- CAPITAL STOCK TRANSACTIONS Net increase ............................................................... 60,005,297 82,693,317 ------------- ------------- Total decrease ............................................................. (91,339,486) (49,941,991) NET ASSETS Beginning of period ........................................................ 411,791,726 461,733,717 ------------- ------------- End of period (including undistributed net investment income of $1,050,508 at December 31, 2000) ........................................ $ 320,452,240 $ 411,791,726 ============= =============
-------------------------------------------------------------------------------- See Notes to Financial Statements. 9 GROWTH PORTFOLIO NOTES TO FINANCIAL STATEMENTS December 31, 2001 Alliance Variable Products Series Fund ================================================================================ NOTE A: Significant Accounting Policies The Growth Portfolio (the "Portfolio") is a series of Alliance Variable Products Series Fund, Inc. (the "Fund"). The Portfolio's investment objective is to seek to provide long-term growth of capital. Current income is incidental to the Portfolio's objective. 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. 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 withholding 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 in vestments 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 10 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. During the current fiscal year, permanent differences, primarily due to net operating losses, foreign currency transactions and the tax character of distributions from the Portfolio's investment in Real Estate Investment Trusts, resulted in a net decrease in distributions in excess of net investment income, a decrease in accumulated net realized loss on investments and 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 .75% of the Portfolio's average daily net assets. Pursuant to the advisory agreement, the Portfolio paid $80,247 to the Adviser representing the cost of certain legal and accounting services provided to the Portfolio by the Adviser for the year ended December 31, 2001. During the year ended December 31, 2001, the Adviser agreed to waive its fee and to reimburse 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 year ended December 31, 2001, the Portfolio received no such waivers/reimbursements. Brokerage commissions paid on investment transactions for the year ended December 31, 2001, amounted to $905,366 of which $35,136 was paid to Sanford C. Bernstein & Co. LLC, an affiliate of the Adviser. The Portfolio compensates Alliance Global Investor Services, Inc. (formerly 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 Portfolio. Such compensation amounted to $915 for the year ended December 31, 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 and servicing fees 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 and servicing 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. 11 GROWTH 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 year ended December 31, 2001, were as follows: Purchases: Stocks and debt obligations ........................... $ 371,987,715 U.S. government and agencies .......................... -0- Sales: Stocks and debt obligations ........................... $ 351,543,230 U.S. government and agencies .......................... -0- At December 31, 2001, the cost of investments for federal income tax purposes was $327,684,117. Accordingly, gross unrealized appreciation and unrealized depreciation (excluding foreign currency transactions) are as follows: Gross unrealized appreciation ......................... $ 45,090,625 Gross unrealized depreciation ......................... (51,962,199) ------------- Net unrealized depreciation ........................... $ (6,871,574) ============= 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 December 31, 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 12 Alliance Variable Products Series Fund ================================================================================ 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 year ended December 31, 2001. -------------------------------------------------------------------------------- NOTE E: Distributions to Shareholders The tax character of distributions paid during the fiscal year ended December 31, 2001 and December 31, 2000 were as follows: 2001 2000 ============ =========== Distributions paid from: Ordinary income .......................... $ 10,083,264 $ 9,723,400 Net long-term capital gains .............. 41,696,532 35,660,898 ------------ ----------- Total taxable distributions .................. 51,779,796 45,384,298 Tax return of capital .................... 130,876 0 ------------ ----------- Total distributions paid ..................... $ 51,910,672 $45,384,298 ============ =========== As of December 31, 2001, the components of accumulated earnings/(deficit) on a tax basis were as follows: Accumulated capital and other losses ......... $(65,832,967)(a) Unrealized appreciation/(depreciation) ....... (6,871,574)(b) ------------ Total accumulated earnings/(deficit) ......... $(72,704,541) ============ (a) On December 31, 2001, the Portfolio had a net capital loss carryforward of $61,644,805 which will expire on December 31, 2009. To the extent future capital gains are offset by capital loss carryforwards, such gains will not be distributed. Based on certain provisions in the Internal Revenue Code, various limitations regarding the future utilization of these carryforwards, brought forward as a result of the Portfolio's merger with Brinson Series Trust Growth Portfolio, may apply. Net capital losses incurred after October 31, and within the taxable year are deemed to arise on the first business day of the Portfolio's next taxable year. For the year ended December 31, 2001, the Portfolio deferred to January 1, 2002, post October capital losses of $4,188,162. (b) The differences between book-basis and tax-basis unrealized appreciation/(depreciation) is attributable primarily to the tax deferral of losses on wash sales. -------------------------------------------------------------------------------- NOTE F: Securities Lending The Portfolio has entered into a securities lending agreement with UBS/Paine Webber, Inc. (the "Lending Agent"). Under the terms of the agreement, the Lending Agent, on behalf of the Portfolio, administers the lending of portfolio securities to certain broker-dealers. In return, the Portfolio receives fee income from the lending transactions. All loans are continuously secured by collateral exceeding the value of the securities loaned. All collateral consists of either cash or U.S. Government securities. The Lending Agent invests the cash collateral in an eligible money market vehicle in accordance with the investment restrictions of the Portfolio. UBS/Paine Webber will indemnify the Portfolio for any loss resulting from a borrower's failure to return a loaned security when due. As of December 31, 2001, the Portfolio had loaned securities with a value of $4,860,986 and received cash collateral of $4,997,200. For the year ended December 31, 2001, the Portfolio received fee income of $2,023 which is included in interest income in the accompanying statement of operations. 13 GROWTH PORTFOLIO NOTES TO FINANCIAL STATEMENTS (continued) Alliance Variable Products Series Fund ================================================================================ NOTE G: 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 ---------------------------------------------------------------- Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, 2001 2000 2001 2000 ============= ============= ============= ============= Class A Shares sold .......................... 873,241 2,744,844 $ 18,353,954 $ 84,455,094 Shares issued in connection with acquisition of Brinson Series Trust Growth Portfolio ........... 828,719 -0- 12,959,640 -0- Shares issued in reinvestment of dividends and distributions ...... 2,189,632 1,426,064 40,617,667 44,108,153 Shares redeemed ...................... (4,362,666) (3,496,829) (81,892,921) (103,805,556) ------------- ------------- ------------- ------------- Net increase (decrease) .............. (471,074) 674,079 $ (9,961,660) $ 24,757,691 ============= ============= ============= ============= Class B Shares sold .......................... 4,112,973 2,100,467 $ 79,572,432 $ 60,743,129 Shares issued in connection with acquisition of Brinson Series Trust Growth Portfolio ........... 75,888 -0- 1,180,036 -0- Shares issued in reinvestment of dividends and distributions ...... 612,087 41,366 11,293,005 1,276,146 Shares redeemed ...................... (1,190,885) (146,376) (22,078,516) (4,083,649) ------------- ------------- ------------- ------------- Net increase ......................... 3,610,063 1,995,457 $ 69,966,957 $ 57,935,626 ============= ============= ============= =============
14 Alliance Variable Products Series Fund ================================================================================ NOTE H: 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 I: 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, 2001. -------------------------------------------------------------------------------- NOTE J: Acquisition of Brinson Series Trust Growth Portfolio On October 26, 2001, the Portfolio acquired all of the assets and liabilities of the Brinson Series Trust Growth Portfolio pursuant to a plan of reorganization approved by the shareholders of Brinson Series Trust Growth Portfolio on March 1, 2001. The acquisition was accomplished by a tax-free exchange of 904,607 shares of the Portfolio for 3,043,716 shares of Brinson Series Trust Growth Portfolio on October 26, 2001. The aggregate net assets of the Portfolio and Brinson Series Trust Growth Portfolio immediately before the acquisition were $291,141,532 and $14,139,676 (including $2,586,130 of net unrealized depreciation of investments), respectively. Immediately after the acquisition, the combined net assets of the Portfolio amounted to $305,281,208. -------------------------------------------------------------------------------- Note K: Proposed Acquisition of Brinson Series Trust Aggressive Growth Portfolio The Portfolio's Board of Directors approved the acquisition of the assets and liabilities of the Brinson Series Trust Aggressive Growth Portfolio pursuant to a plan of reorganization to be approved by the shareholders of Brinson Series Trust Aggressive Growth Portfolio. If the acquisition receives shareholder approval, the acquisition is expected to be completed during the second quarter of 2002. 15 GROWTH 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, ============================================================ 2001 2000 1999 1998 1997 ======== ======== ======== ======== ======== Net asset value, beginning of period ............... $ 25.10 $ 33.59 $ 27.25 $ 22.42 $ 17.92 -------- -------- -------- -------- -------- Income From Investment Operations Net investment income (loss) (a) ................... (.06) .08 .03 .10 .07 Net realized and unrealized gain (loss) on investment and foreign currency transactions ... (5.47) (5.36) 8.73 6.19 5.18 -------- -------- -------- -------- -------- Net increase (decrease) in net asset value from operations ................................ (5.53) (5.28) 8.76 6.29 5.25 -------- -------- -------- -------- -------- Less: Dividends and Distributions Dividends from net investment income ............... (.06) (.02) (.09) (.06) (.03) Distributions from net realized gain on investments (1.85) (3.19) (2.33) (1.40) (.72) Distributions in excess of net realized gain on investments ................................. (1.23) -0- -0- -0- -0- Return of capital .................................. (.01) -0- -0- -0- -0- -------- -------- -------- -------- -------- Total dividends and distributions .................. (3.15) (3.21) (2.42) (1.46) (.75) -------- -------- -------- -------- -------- Net asset value, end of period ..................... $ 16.42 $ 25.10 $ 33.59 $ 27.25 $ 22.42 ======== ======== ======== ======== ======== Total Return Total investment return based on net asset value (b) (23.47)% (17.51)% 34.47% 28.73% 30.02% Ratios/Supplemental Data Net assets, end of period (000's omitted) .......... $226,237 $357,664 $456,027 $328,681 $235,875 Ratio to average net assets of: Expenses ....................................... .85% .81% .84% .87% .84% Net investment income (loss) ................... (.31)% .26% .12% .43% .37% Portfolio turnover rate ............................ 104% 58% 54% 62% 62%
-------------------------------------------------------------------------------- See footnote summary on page 17. 16 Alliance Variable Products Series Fund ================================================================================ Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
---------------------------------------------- CLASS B ---------------------------------------------- June 1, 1999(c) Year Ended December 31, to =========================== December 31, 2001 2000 1999 ========== ========== =============== Net asset value, beginning of period ......................................... $ 24.99 $ 33.54 $ 26.83 ---------- ---------- ---------- Income From Investment Operations Net investment income (loss) (a) ............................................. (.11) .04 (.03) Net realized and unrealized gain (loss) on investment and foreign currency transactions ............................................................. (5.44) (5.39) 6.74 ---------- ---------- ---------- Net increase (decrease) in net asset value from operations ................... (5.55) (5.35) 6.71 ---------- ---------- ---------- Less: Dividends and Distributions Dividends from net investment income ......................................... (.04) (.01) -0- Distributions from net realized gain on investments .......................... (1.85) (3.19) -0- Distributions in excess of net realized gain on investments .................. (1.23) -0- -0- Return of capital ............................................................ (.01) -0- -0- ---------- ---------- ---------- Total dividends and distributions ............................................ (3.13) (3.20) -0- ---------- ---------- ---------- Net asset value, end of period ............................................... $ 16.31 $ 24.99 $ 33.54 ========== ========== ========== Total Return Total investment return based on net asset value (b) ......................... (23.65)% (17.75)% 25.01% Ratios/Supplemental Data Net assets, end of period (000's omitted) .................................... $ 94,215 $ 54,127 $ 5,707 Ratio to average net assets of: Expenses ................................................................. 1.11% 1.08% 1.12%(d) Net investment income (loss) ............................................. (.59)% .13% (.20)%(d) Portfolio turnover rate ...................................................... 104% 58% 54%
-------------------------------------------------------------------------------- (a) Based on average shares outstanding. (b) 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. (c) Commencement of distribution. (d) Annualized. 17 REPORT OF ERNST & YOUNG LLP INDEPENDENT AUDITORS Alliance Variable Products Series Fund ================================================================================ To the Shareholders and Board of Directors Growth Portfolio Alliance Variable Products Series Fund, Inc. We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of the Growth Portfolio (the "Portfolio"), (one of the portfolios constituting the Alliance Variable Products Series Fund, Inc.) as of December 31, 2001, and the related statement of operations for the year then ended, the statement of changes in net assets for each of the two years in the period 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 audit to obtain reason able 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 and financial highlights. Our procedures included confirmation of securities owned as of December 31, 2001, by correspondence with the custodian and others. 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 Growth Portfolio of the Alliance Variable Products Series Fund, Inc. at December 31, 2001, and the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the indicated periods, in conformity with accounting principles generally accepted in the United States. /s/ ERNST & YOUNG LLP New York, New York February 12, 2002 FEDERAL INCOME TAX INFORMATION (unaudited) ================================================================================ The Portfolio hereby designated $41,696,532 as long-term capital gain distributions during the taxable year ended December 31, 2001. 18 GROWTH PORTFOLIO 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) 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. 19 GROWTH PORTFOLIO Alliance Variable Products Series Fund ================================================================================ MANAGEMENT OF THE FUND Board of Directors Information The business and affairs of the Fund are managed under the direction of the Board of Directors. Certain information concerning the Fund's Directors is set forth below.
PORTFOLIOS IN FUND OTHER NAME, ADDRESS, PRINCIPAL COMPLEX DIRECTORSHIPS AGE OF DIRECTOR OCCUPATION(S) OVERSEEN BY HELD BY (YEARS OF SERVICE*) DURING PAST 5 YEARS DIRECTOR DIRECTOR ------------------------------------------------------------------------------------------------------------------------------ INTERESTED DIRECTOR John D. Carifa,** 56, President, Chief Operating Officer and 113 None 1345 Avenue of the Americas, a Director of ACMC, with which he has New York, NY 10105 (12) been associated since prior to 1997. DISINTERESTED DIRECTORS Ruth Block,#+ 71, Formerly an Executive Vice President and 88 Ecolab Incorp.; P.O. Box 4623, the Chief Insurance Officer of the Equitable BP Amoco Corp. Stamford, CT 06903 (10) Life Assurance Society of the United States; Chairman and Chief Executive Officer of Evlico; a Director of Avon, Tandem Financial Group and Donaldson, Lufkin & Jenrette Securities Corporation. She is currently a Director of Ecolab Incorporated (specialty chemicals) and BP Amoco Corporation (oil and gas). David H. Dievler,#+ 72, Independent consultant. Until December 1994, 94 None P.O. Box 167, Senior Vice President of ACMC responsible Spring Lake, New Jersey for mutual fund administration. Prior to joining 07762 (12) ACMC in 1984, Chief Financial Officer of Eberstadt Asset Management since 1968. Prior to that, Senior Manager at Price Waterhouse & Co. Member of American Institute of Certified Public Accountants since 1953. John H. Dobkin,#+ 59, Consultant. Currently, President of the Board 91 None P.O. Box 12, of Save Venice, Inc. (preservation organization). Annandale, New York Formerly a Senior Advisor from June 1999- 12504 (10) June 2000 and President from December 1989- May 1999 of Historic Hudson Valley (historic preservation). Previously, Director of the National Academy of Design. During 1988-92, Director and Chairman of the Audit Committee of ACMC.
-------------------------------------------------------------------------------- * There is no stated term of office for the Fund's Directors. ** Mr. Carifa is an "interested director", as defined in the 1940 Act, due to his position as President and Chief Operating Officer of ACMC, the Fund's investment adviser. # Member of the Audit Committee. + Member of the Nominating Committee. 20 GROWTH PORTFOLIO Alliance Variable Products Series Fund ================================================================================
PORTFOLIOS IN FUND OTHER NAME, ADDRESS, PRINCIPAL COMPLEX DIRECTORSHIPS AGE OF DIRECTOR OCCUPATION(S) OVERSEEN BY HELD BY (YEARS OF SERVICE*) DURING PAST 5 YEARS DIRECTOR DIRECTOR ------------------------------------------------------------------------------------------------------------------------------ William H. Foulk, Jr.,#+ 69 Investment Adviser and an independent 110 None Room 100, consultant. Formerly Senior Manager of 2 Greenwich Plaza, Barrett Associates, Inc., a registered Greenwich, Connecticut investment adviser, with which he had been 06830 (12) associated since prior to 1997. Formerly Deputy Comptroller of the State of New York and, prior thereto, Chief Investment Officer of the New York Bank for Savings. Clifford L. Michel,#+ 62, Senior Counsel of the law firm of Cahill 91 Placer Dome, Inc. St. Bernard's Road, Gordon & Reindel, with which he has been Gladstone, New Jersey associated since prior to 1997. President 07934 (10) and Chief Executive Officer of Wenonah Development Company (investments) and a Director of Placer Dome, Inc. (mining) Donald J. Robinson,#+ 67, Senior Counsel of the law firm of Orrick, 103 None 98 Hell's Peak Road, Herrington & Sutcliffe LLP since January 1997. Weston, Vermont 05161 (6) Formerly a senior partner and a member of the Executive Committee of that firm. Member of the Municipal Securities Rulemaking Board and a Trustee of the Museum of the City of New York.
-------------------------------------------------------------------------------- * There is no stated term of office for the Fund's Directors. # Member of the Audit Committee. + Member of the Nominating Committee. 21 GROWTH PORTFOLIO Alliance Variable Products Series Fund ================================================================================ MANAGEMENT OF THE FUND Officer Information Certain information concerning the Fund's officers is set forth below.
NAME, ADDRESS* POSITION(S) HELD PRINCIPAL OCCUPATION AND AGE WITH FUND DURING PAST 5 YEARS** ---------------------------------------------------------------------------------------------------------- John D. Carifa, 56 Chairman & President See biography above. Kathleen A. Corbet, 42 Senior Vice President Executive Vice President of ACMC, with which she has been associated since prior to 1997. Alfred L. Harrison, 64 Senior Vice President Vice Chairman of ACMC, with which he has been associated since prior to 1997. Wayne D. Lyski, 60 Senior Vice President Executive Vice President of ACMC, with which he has been associated with since prior to 1997. Jane Mack Gould, 63 Vice President Senior Vice President of ACMC, with which she has been associated since prior to 1997. Alan E. Levi, 52 Vice President Senior Vice President of ACMC, with which he has been associated since prior to 1997. Edmund P. Bergan, Jr., 51 Secretary Senior Vice President and the General Counsel of Alliance Fund Distributors, Inc. (AFD) and Alliance Global Investor Services Inc. ("AGIS"), with which he has been associated since prior to 1997. Mark D. Gersten, 51 Treasurer and Chief Senior Vice President of AGIS, with which he has been Financial Officer associated since prior to 1997. Thomas R. Manley, 50 Controller Vice President of ACMC, with which he has been associated since prior to 1997.
-------------------------------------------------------------------------------- * The address for each of the Fund's officers is 1345 Avenue of the Americas, New York, NY 10105. ** ACMC, AFD, ACL, and AGIS are affiliates of the Fund. The Fund's Statement of Additional Information (SAI) has additional information about the Fund's Directors and Officers and is available without charge upon request. Contact your financial representative or Alliance Capital at 800-227-4618 for a free prospectus or SAI. 22 (This page left intentionally blank.) (This page left intentionally blank.) (This page left intentionally blank.)