-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PSF1MHYk4I/zdgzjMZ38V7bAHpOSgJeUbyE2FpsvSUo8KMI2+HxgmJ0a7T7oS+NB 0vvgWxCmVbjga+N35s/U3Q== 0000936772-02-000317.txt : 20020819 0000936772-02-000317.hdr.sgml : 20020819 20020816175534 ACCESSION NUMBER: 0000936772-02-000317 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20020630 FILED AS OF DATE: 20020819 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALLIANCE VARIABLE PRODUCTS SERIES FUND INC CENTRAL INDEX KEY: 0000825316 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-05398 FILM NUMBER: 02741823 BUSINESS ADDRESS: STREET 1: 500 PLAZA DRIVE STREET 2: 1345 AVENUE OF THE AMERICAS 31ST FL CITY: NEW YORK STATE: NY ZIP: 10105 BUSINESS PHONE: 2013194105 MAIL ADDRESS: STREET 1: ALLIANCE CAPITAL MANGEMENT LP STREET 2: 1345 AVENUE OF THE AMERICAS CITY: NEW YORK STATE: NY ZIP: 10105 N-30D 1 edg8110.txt VARP TECHNOLOGY ALLIANCE -------------------------- VARIABLE PRODUCTS -------------------------- SERIES FUND -------------------------- TECHNOLOGY PORTFOLIO -------------------------- SEMI-ANNUAL REPORT JUNE 30, 2002 Investment Products Offered --------------------------- > Are Not FDIC Insured > May Lose Value > Are Not Bank Guaranteed --------------------------- TECHNOLOGY PORTFOLIO TEN LARGEST HOLDINGS June 30, 2002 (unaudited) Alliance Variable Products Series Fund ================================================================================
- --------------------------------------------------------------------------------------------- COMPANY U.S. $ VALUE PERCENT OF NET ASSETS - --------------------------------------------------------------------------------------------- EBay, Inc. $ 15,223,221 5.5% - --------------------------------------------------------------------------------------------- Dell Computer Corp. 14,874,967 5.4 - --------------------------------------------------------------------------------------------- First Data Corp. 14,095,080 5.1 - --------------------------------------------------------------------------------------------- Mircosoft Corp. 13,874,655 5.1 - --------------------------------------------------------------------------------------------- Taiwan Semiconductor Manufacturing Co., Ltd. (ADR) 11,588,720 4.2 - --------------------------------------------------------------------------------------------- Fiserv, Inc. 11,179,113 4.1 - --------------------------------------------------------------------------------------------- Concord EFS, Inc. 9,668,912 3.5 - --------------------------------------------------------------------------------------------- DST Systems, Inc. 9,459,684 3.5 - --------------------------------------------------------------------------------------------- Electronic Arts, Inc. 8,847,397 3.2 - --------------------------------------------------------------------------------------------- Affiliated Computer Services, Inc. Cl.A 8,764,808 3.2 ------------ --- - --------------------------------------------------------------------------------------------- $117,576,557 42.8% - ---------------------------------------------------------------------------------------------
1 TECHNOLOGY PORTFOLIO PORTFOLIO OF INVESTMENTS June 30, 2002 (unaudited) Alliance Variable Products Series Fund ================================================================================ Company Shares U.S. $ Value - -------------------------------------------------------------------------------- COMMON STOCKS-94.4% TECHNOLOGY-88.6% COMMUNICATION EQUIPMENT-6.4% Cisco Systems, Inc. (a) ................... 557,600 $ 7,778,520 Juniper Networks, Inc. (a) ............... 163,650 924,623 Motorola, Inc. ............................ 389,300 5,613,706 Nokia Corp. (ADR) (Finland) ............... 232,500 3,366,600 ------------ 17,683,449 ------------ COMPUTER HARDWARE/ STORAGE-7.6% Avocent Corp. (a) ......................... 178,958 2,849,011 Brocade Communications Systems, Inc. (a) ...................... 174,500 3,050,260 Dell Computer Corp. (a) ................... 569,050 14,874,967 ------------ 20,774,238 ------------ COMPUTER SERVICES-23.6% Accenture, Ltd. Cl.A (Bermuda) (a) .......................... 192,200 3,651,800 Affiliated Computer Services, Inc. Cl.A (a) .......................... 184,600 8,764,808 Computer Sciences Corp. (a) ............... 76,350 3,649,530 Concord EFS, Inc. (a) ..................... 320,800 9,668,912 DST Systems, Inc. (a) ..................... 206,950 9,459,684 Exult, Inc. (a) ........................... 151,600 985,400 First Data Corp. .......................... 378,900 14,095,080 Fiserv, Inc. (a) .......................... 304,525 11,179,113 Hewitt Associates, Inc. Cl.A (a) ............................... 39,800 927,340 The BISYS Group, Inc. (a) ................. 73,600 2,450,880 ------------ 64,832,547 ------------ COMPUTER SOFTWARE-14.8% Business Objects, SA (ADR) (France) (a) ........................... 117,050 3,289,105 Electronic Arts, Inc. (a) ................. 133,950 8,847,397 Informatica Corp. (a) ..................... 188,540 1,336,749 Macrovision Corp. (a) ..................... 140,400 1,840,644 Mercury Interactive Corp. (a) ............. 57,850 1,328,236 Microsoft Corp. (a) ....................... 253,650 13,874,655 Oracle Corp. (a) .......................... 235,500 2,230,185 PeopleSoft, Inc. (a) ...................... 258,900 3,852,432 VERITAS Software Corp. (a) ............... 209,350 4,143,037 ------------ 40,742,440 ------------ CONTRACT MANUFACTURING-4.7% Celestica, Inc. (a) ....................... 96,000 2,180,160 DDi Corp. (a) ............................. 13,050 13,037 Flextronics International, Ltd. (Singapore) (a) ........................ 461,350 3,289,425 Sanmina Corp. (a) ......................... 744,550 4,698,110 Solectron Corp. (a) ....................... 452,450 2,782,568 ------------ 12,963,300 ------------ INTERNET INFRASTRUCTURE-5.5% EBay, Inc. (a) ............................ 247,050 15,223,221 ------------ SEMI-CONDUCTOR CAPITAL EQUIPMENT-6.5% Applied Materials, Inc. (a) ............... 368,350 7,006,017 KLA-Tencor Corp. (a) ...................... 121,800 5,357,982 Teradyne, Inc. (a) ........................ 233,750 5,493,125 ------------ 17,857,124 ------------ SEMI-CONDUCTOR COMPONENTS-19.5% Altera Corp. (a) .......................... 281,900 3,833,840 AU Optronics Corp. (ADR) (Taiwan) (a) ........................... 104,400 867,564 Fairchild Semiconductor Corp. Cl.A (a) ............................... 143,100 3,477,330 Intel Corp. ............................... 312,250 5,704,807 Maxim Integrated Products, Inc. (a) ............................... 128,750 4,934,988 Microchip Technology, Inc. (a) ............................... 276,425 7,582,338 Micron Technology, Inc. (a) ............... 225,150 4,552,533 Taiwan Semiconductor Manufacturing Co., Ltd. (ADR) (Taiwan) (a) ............... 891,440 11,588,720 Texas Instruments, Inc. ................... 277,950 6,587,415 United Microelectronics Corp. (ADR) (Taiwan) (a) ..................... 232,000 1,705,200 Xilinx, Inc. (a) .......................... 118,300 2,653,469 ------------ 53,488,204 ------------ 243,564,523 ------------ CONSUMER SERVICES-5.8% BROADCASTING & CABLE-4.1% Cox Communications, Inc. Cl.A (a) ............................... 167,300 4,609,115 Viacom, Inc. Cl.B (a) ..................... 153,750 6,821,887 ------------ 11,431,002 ------------ CELLULAR COMMUNICATIONS-1.1% Sprint Corp. (PCS Group) Cl.A (a) ............................... 351,000 1,568,970 Vodafone Group Plc (ADR) (United Kingdom) ....................... 107,383 1,465,778 ------------ 3,034,748 ------------ ENTERTAINMENT & LEISURE-0.6% THQ, Inc. (a) ............................. 54,175 1,615,499 ------------ 16,081,249 ------------ Total Common Stocks (cost $312,146,630) .................... 259,645,772 ------------ 2 Alliance Variable Products Series Fund ================================================================================ Principal Amount Company (000) U.S. $ Value - -------------------------------------------------------------------------------- SHORT-TERM INVESTMENT-5.3% TIME DEPOSIT-5.3% State Street Euro Dollar 1.25%, 7/01/02 (cost $14,383,000) ................. $ 14,383 $ 14,383,000 ------------ TOTAL INVESTMENTS-99.7% (cost $326,529,630) ................ 274,028,772 Other assets less liabilities-0.3% .............. 956,300 ------------ NET ASSETS-100% ....................... $274,985,072 ============ - -------------------------------------------------------------------------------- (a) Non-income producing security. Glossary: ADR - American Depositary Receipt See Notes to Financial Statements. 3 TECHNOLOGY PORTFOLIO STATEMENT OF ASSETS AND LIABILITIES June 30, 2002 (unaudited) Alliance Variable Products Series Fund ================================================================================ ASSETS Investments in securities, at value (cost $326,529,630).. $ 274,028,772(a) Cash .................................................... 757 Collateral held for securities loaned ................... 58,648,100 Receivable for investment securities sold ............... 2,401,147 Dividends and interest receivable ....................... 47,050 ------------- Total assets ............................................ 335,125,826 ------------- LIABILITIES Payable for collateral received on securities loaned .... 58,648,100 Payable for investment securities purchased ............. 1,033,186 Advisory fee payable .................................... 225,491 Accrued expenses ........................................ 233,977 ------------- Total liabilities ....................................... 60,140,754 ------------- NET ASSETS ................................................. $ 274,985,072 ============= COMPOSITION OF NET ASSETS Capital stock, at par ................................... $ 22,645 Additional paid-in capital .............................. 578,387,854 Undistributed net investment loss ....................... (1,913,089) Accumulated net realized loss on investments ............ (249,011,480) Net unrealized depreciation of investments .............. (52,500,858) ------------- $ 274,985,072 ============= Class A Shares Net assets .............................................. $ 148,168,158 ============= Shares of capital stock outstanding ..................... 12,167,084 ============= Net asset value per share ............................... $ 12.18 ============= Class B Shares Net assets .............................................. $ 126,816,914 ============= Shares of capital stock outstanding ..................... 10,478,151 ============= Net asset value per share ............................... $ 12.10 ============= - -------------------------------------------------------------------------------- (a) Includes securities on loan with a value of $55,701,137 (see Note F). See Notes to Financial Statements. 4 TECHNOLOGY PORTFOLIO STATEMENT OF OPERATIONS Six Months Ended June 30, 2002 (unaudited) Alliance Variable Products Series Fund ================================================================================ INVESTMENT INCOME Interest ................................................. $ 200,800 Dividends (net of foreign taxes withheld of $14,154) ..... 170,026 ------------- Total investment income .................................. 370,826 ------------- EXPENSES Advisory fee ............................................. 1,810,547 Distribution fee--Class B ................................ 201,687 Custodian ................................................ 47,152 Administrative ........................................... 33,031 Printing ................................................. 77,106 Audit and legal .......................................... 59,187 Directors' fees .......................................... 12,308 Transfer agency .......................................... 472 Miscellaneous ............................................ 42,425 ------------- Total expenses ........................................... 2,283,915 ------------- Net investment loss ...................................... (1,913,089) ------------- REALIZED AND UNREALIZED LOSS ON INVESTMENTS Net realized loss on investment transactions ............. (92,444,560) ------------- Net change in unrealized appreciation/depreciation of investments ......................................... (25,554,086) ------------- Net loss on investments .................................. (117,998,646) ------------- NET DECREASE IN NET ASSETS FROM OPERATIONS .................. $(119,911,735) ============= - -------------------------------------------------------------------------------- See Notes to Financial Statements. 5 TECHNOLOGY PORTFOLIO STATEMENT OF CHANGES IN NET ASSETS Alliance Variable Products Series Fund ================================================================================
Six Months Ended Year Ended June 30, 2002 December 31, (unaudited) 2001 ============= ============= DECREASE IN NET ASSETS FROM OPERATIONS Net investment loss .............................. $ (1,913,089) $ (3,193,582) Net realized loss on investment .................. (92,444,560) (123,964,229) Net change in unrealized appreciation/depreciation of investments ............................... (25,554,086) (9,821,909) ------------- ------------- Net decrease in net assets from operations ....... (119,911,735) (136,979,720) DISTRIBUTIONS TO SHAREHOLDERS FROM Net realized gain on investments Class A ........................................ -0- (1,403,245) Class B ........................................ -0- (957,648) Distributions in excess of net realized gain on investments Class A ........................................ -0- (19,378,071) Class B ........................................ -0- (13,224,620) Tax return of capital Class A ........................................ -0- (80,523) Class B ........................................ -0- (54,953) CAPITAL STOCK TRANSACTIONS Net increase (decrease) .......................... (19,431,309) 64,038,500 ------------- ------------- Total decrease ................................... (139,343,044) (108,040,280) NET ASSETS Beginning of period .............................. 414,328,116 522,368,396 ------------- ------------- End of period .................................... $ 274,985,072 $ 414,328,116 ============= =============
- -------------------------------------------------------------------------------- See Notes to Financial Statements. 6 TECHNOLOGY PORTFOLIO NOTES TO FINANCIAL STATEMENTS June 30, 2002 (unaudited) Alliance Variable Products Series Fund ================================================================================ NOTE A: Significant Accounting Policies The Technology Portfolio (the "Portfolio") is a series of Alliance Variable Products Series Fund, Inc. (the "Fund"). The Portfolio's investment objective is to seek 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 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 amortizes premiums and accretes discounts as adjustments to interest income. Investment gains and losses are determined on the identified cost basis. 5. Income and Expenses Expenses attributable to a single portfolio are charged to that portfolio. Expenses of the Fund are charged to each portfolio in proportion to net assets. All income earned and expenses incurred by a portfolio with multi-class 7 TECHNOLOGY PORTFOLIO NOTES TO FINANCIAL STATEMENTS (Continued) Alliance Variable Products Series Fund ================================================================================ shares outstanding are borne on a pro-rata basis by each outstanding class of shares, based on the proportionate interest in the portfolio represented by the net assets of such class, exept that the portfolio's Class B shares bear the distribution fees. 6. Dividends and Distributions The Portfolio declares and distributes dividends and distributions from net investment income and net realized gains, respectively, if any, at least annually. Income dividends and capital gains distributions to shareholders are recorded on the ex-dividend date. Income dividends and capital gains distributions are determined in accordance with federal tax regulations and may differ from those determined in accordance with accounting principles generally accepted in the United States. To the extent these differences are permanent, such amounts are reclassified within the capital accounts based on their federal tax basis treatment; temporary differences do not require such reclassification. - -------------------------------------------------------------------------------- NOTE B: Advisory Fee and Other Transactions with Affiliates Under the terms of an investment advisory agreement, the Portfolio pays Alliance Capital Management L.P. (the "Adviser"), an investment advisory fee at an annualized rate of 1% of the Portfolio's average daily net assets. Pursuant to the advisory agreement, the Portfolio paid $33,031 to the Adviser representing the cost of certain legal and accounting services provided to the Portfolio by the Adviser for the six months ended June 30, 2002. Brokerage commissions paid on investment transactions for the six months ended June 30, 2002 amounted to $464,843, of which $19,450 was paid to Sanford C. Bernstein & Co. LLC, an affiliate of the Adviser. The Portfolio compensates Alliance Global Investor Services, Inc., a wholly-owned subsidiary of the Adviser, under a Transfer Agency Agreement for providing personnel and facilities to perform transfer agency services for the Portfolio. Such compensation amounted to $472 for the six months ended June 30, 2002. - -------------------------------------------------------------------------------- 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. 8 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, 2002, were as follows: Purchases: Stocks and debt obligations ........................... $ 111,362,294 U.S. government and agencies .......................... -0- Sales: Stocks and debt obligations ........................... $ 124,589,921 U.S. government and agencies .......................... -0- At June 30, 2002, the cost of investments for federal income tax purposes was substantially the same as the cost for financial reporting purposes. Accordingly, gross unrealized appreciation and unrealized depreciation are as follows: Gross unrealized appreciation ......................... $ 23,755,908 Gross unrealized depreciation ......................... (76,256,766) ------------- Net unrealized depreciation ........................... $ (52,500,858) ============= 1. Forward Exchange Currency Contracts The Portfolio may enter into forward exchange currency contracts to hedge exposure to changes in foreign currency exchange rates on foreign portfolio holdings, to hedge certain firm purchase and sales commitments denominated in foreign currencies and for investment purposes. A forward exchange currency contract is a commitment to purchase or sell a foreign currency at a future date at a negotiated forward rate. The Portfolio may enter into contracts to deliver or receive foreign currency it will receive from or require for its normal investment activities. It may also use contracts in a manner intended to protect foreign currency denominated securities from declines in value due to unfavorable exchange rate movements. The gain or loss arising from the difference between the original contracts and the closing of such contracts is included in realized gains or losses from foreign currency transactions. Fluctuations in the value of forward exchange currency contracts are recorded for financial reporting purposes as unrealized gains or losses by the Portfolio. The Portfolio's custodian will place and maintain cash not available for investment or other liquid assets in a separate account of the Portfolio having an approximate value equal to the aggregate amount of the Portfolio's commitments under forward exchange currency contracts entered into with respect to position hedges. Risks may arise from the potential inability of a counterparty to meet the terms of a contract and from unanticipated movements in the value of a foreign currency relative to the U.S. dollar. The face or contract amount, in U.S. dollars, reflects the total exposure the Portfolio has in that particular currency contract. At June 30, 2002, the Portfolio had no outstanding forward exchange currency contracts. 2. Option Transactions For hedging and investment purposes, the Portfolio may purchase and write call options and purchase put options on U.S. securities that are traded on U.S. securities exchanges and over-the-counter markets. The risk associated with purchasing an option is that the Portfolio pays a premium whether or not the option is exercised. Additionally, the Portfolio bears the risk of loss of premium and change in market value should the counterparty not perform under the contract. Put and call options purchased are accounted for in the same manner as portfolio securities. The cost of securities acquired through the exercise of call options is increased by premiums paid. The proceeds from securities sold through the exercise of put options are decreased by the premiums paid. When the Portfolio writes an option, the premium received by the Portfolio is recorded as a liability and is subsequently adjusted to the current market value of the option written. Premiums received from which written options expire unexercised are recorded by the Portfolio on the expiration date as realized gains from written options. The difference between the premium received and the amount paid on effecting a closing purchase transaction, including brokerage commissions, is also treated as a realized gain, or if the premium received is less than the amount paid for the closing purchase transaction, as a realized loss. If a call option is exercised, the premium received is added to the proceeds from the sale of the underlying security or currency in determining whether the Portfolio has realized a gain or loss. In writ- 9 TECHNOLOGY PORTFOLIO NOTES TO FINANCIAL STATEMENTS (continued) Alliance Variable Products Series Fund ================================================================================ ing an option, the Portfolio bears the market risk of an unfavorable change in the price of the security or currency underlying the written option. Exercise of an option written by the Portfolio could result in the Portfolio selling or buying a security or currency at a price different from the current market value. The Portfolio had no transactions in options written for the six months ended June 30, 2002. - -------------------------------------------------------------------------------- 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 ....................... $ -0- $23,312,150 Net long term capital gains ........... 34,963,584 7,105,309 ------------- ----------- Total taxable distributions .............. 34,963,584 30,417,459 Tax return of capital ................. 135,476 -0- ------------- ----------- Total distributions paid ................. $ 35,099,060 $30,417,459 ============= =========== As of December 31, 2001, the components of accumulated earnings/(deficit) on a tax basis were as follows: Accumulated capital and other losses ....... $(144,085,048)(a) Unrealized appreciation/(depreciation) ..... (39,428,644)(b) ------------- Total accumulated earnings/(deficit) ....... $(183,513,692) ============= (a) On December 31, 2001, the Portfolio had a net capital loss carryforward of $124,840,492 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. 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 six months ended June 30, 2002, the Portfolio deferred to January 1, 2002, post October capital losses of $19,244,556. (b) The differences between book-basis and tax-basis unrealized appreciation/(depreciation) are 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. Goverment 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 June 30, 2002, the Portfolio had loaned securities with a value of $55,701,137 and received cash collateral of $58,648,100. For the six months ended June 30, 2002, the Portfolio received fee income of $56,508 which is included in interest income in the accompanying statement of operations. 10 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 --------------------------------- ------------------------------------- Six Months Ended Year Ended Six Months Ended Year Ended June 30, 2002 December 31, June 30, 2002 December 31, (unaudited) 2001 (unaudited) 2001 ========== ========== ============ ============= Class A Shares sold ....................................... 663,838 3,970,121 $ 10,526,465 $ 79,647,900 Shares issued in reinvestment of distributions .................................. -0- 1,028,183 -0- 20,861,839 Shares redeemed ................................... (2,143,781) (5,121,093) (31,750,872) (105,131,171) ---------- ---------- ------------ ------------- Net decrease ...................................... (1,479,943) (122,789) $(21,224,407) $ (4,621,432) ========== ========== ============ ============= Class B Shares sold ....................................... 2,371,012 5,814,491 $ 36,268,345 $ 117,034,624 Shares issued in reinvestment of distributions .................................. -0- 704,116 -0- 14,237,221 Shares redeemed ................................... (2,332,424) (3,258,979) (34,475,247) (62,611,913) ---------- ---------- ------------ ------------- Net increase ...................................... 38,588 3,259,628 $ 1,793,098 $ 68,659,932 ========== ========== ============ =============
- -------------------------------------------------------------------------------- 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 six months ended June 30, 2002. 11 TECHNOLOGY 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, 2002 =================================================================== (unaudited) 2001 2000 1999 1998 1997 ============= ======== ======== ======== ======== ======= Net asset value, beginning of period .. $ 17.24 $ 24.95 $ 33.61 $ 19.17 $ 11.72 $ 11.04 -------- -------- -------- -------- -------- ------- Income From Investment Operations Net investment income (loss) (a) ...... (.07) (.12) (.14)(b) (.09)(b) (.04)(b) .02(b) Net realized and unrealized gain (loss) on investment transactions ......... (4.99) (5.92) (6.40) 14.57 7.51 .69 -------- -------- -------- -------- -------- ------- Net increase (decrease) in net asset value from operations .............. (5.06) (6.04) (6.54) 14.48 7.47 .71 -------- -------- -------- -------- -------- ------- Less: Dividends and Distributions Dividends from net investment income .. -0- -0- -0- -0- (.02) (.03) Distributions from net realized gain on investments ..................... -0- (.11) (2.12) (.04) -0- -0- Distributions in excess of net realized gain on investments ................ -0- (1.56) -0- -0- -0- -0- -------- -------- -------- -------- -------- ------- Total dividends and distributions ..... -0- (1.67) (2.12) (.04) (.02) (.03) -------- -------- -------- -------- -------- ------- Net asset value, end of period ........ $ 12.18 $ 17.24 $ 24.95 $ 33.61 $ 19.17 $ 11.72 ======== ======== ======== ======== ======== ======= Total Return Total investment return based on net asset value (c) .................... (29.35)% (25.23)% (21.52)% 75.71% 63.79% 6.47% Ratios/Supplemental Data Net assets, end of period (000's omitted) .................... $148,168 $235,252 $343,601 $357,480 $130,602 $69,240 Ratio to average net assets of: Expenses, net of waivers and reimbursements ................... 1.15%(d) 1.08% 1.02% .95% .95% .95% Expenses, before waivers and reimbursements ................... 1.15%(d) 1.08% 1.06% 1.12% 1.20% 1.19% Net investment income (loss) ....... (.95)%(d) (.64)% (.38)%(b) (.39)%(b) (.30)%(b) .16%(b) Portfolio turnover rate ............... 33% 40% 61% 64% 63% 46%
- -------------------------------------------------------------------------------- See footnote summary on page 13 12 Alliance Variable Products Series Fund ================================================================================ Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
------------------------------------------------------------- CLASS B ------------------------------------------------------------- Six Months September 22, Ended Year Ended December 31, 1999(e) to June 30, 2002 ========================= December 31, (unaudited) 2001 2000 1999 =========== =========== =========== =========== Net asset value, beginning of period .......................... $ 17.15 $ 24.90 $ 33.61 $ 23.59 ----------- ----------- ----------- ----------- Income From Investment Operations Net investment loss (a) ....................................... (.09) (.17) (.21)(b) (.05)(b) Net realized and unrealized gain (loss) on investment transactions ............................................... (4.96) (5.91) (6.38) 10.07 ----------- ----------- ----------- ----------- Net increase (decrease) in net asset value from operations .... (5.05) (6.08) (6.59) 10.02 ----------- ----------- ----------- ----------- Less: Distributions Dividends from net investment income .......................... -0- -0- -0- -0- Distributions from net realized gain on investments ........... -0- (.11) (2.12) -0- Distributions in excess of net realized gain on investments ... -0- (1.56) -0- -0- ----------- ----------- ----------- ----------- Total distributions ........................................... -0- (1.67) (2.12) -0- ----------- ----------- ----------- ----------- Net asset value, end of period ................................ $ 12.10 $ 17.15 $ 24.90 $ 33.61 =========== =========== =========== =========== Total Return Total investment return based on net asset value (c) .......... (29.45)% (25.45)% (21.68)% 42.48% Ratios/Supplemental Data Net assets, end of period (000's omitted) ..................... $ 126,817 $ 179,076 $ 178,768 $ 10,350 Ratio to average net assets of: Expenses, net of waivers and reimbursements ................ 1.40%(d) 1.33% 1.31% 1.20%(d) Expenses, before waivers and reimbursements ................ 1.40%(d) 1.33% 1.33% 1.52%(d) Net investment loss ........................................ (1.19)%(d) (.92)% (.66)%(b) (.64)%(b)(d) Portfolio turnover rate ....................................... 33% 40% 61% 64%
- -------------------------------------------------------------------------------- (a) Based on average shares outstanding. (b) Net of expenses reimbursed or waived by the Adviser. (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. (e) Commencement of distribution. 13 TECHNOLOGY 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) OFFICERS Kathleen A. Corbet, Senior Vice President Alfred L. Harrison, Senior Vice President Andrew S. Adelson, 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 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 Daniel Nordby, Vice President Raymond J. Papera, Vice President Douglas J. Peebles, Vice President Jeffrey S. Phlegar, Vice President Daniel G. Pine, Vice President Steven Pisarkiewicz, Vice President Michael J. Reilly, Vice President John Ricciardi, Vice President Paul C. Rissman, Vice President Kevin F. Simms, Vice President Michael A. Snyder, Vice President Annie Tsao, Vice President Jean Van De Walle, Vice President Richard A. Winge, 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 5 Times Square New York, NY 10036 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. 14 (This page left intentionally blank.) (This page left intentionally blank.) (This page left intentionally blank.) -----END PRIVACY-ENHANCED MESSAGE-----