-----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, VmBqsrgTnS+g/e7ffMVz5PApIAngH++u0k8vaE+s7ns2PqMf1hz13lsyOuG4zb+1 HWQhg1VjaCTmZIQxMUuEEQ== 0000936772-02-000320.txt : 20020819 0000936772-02-000320.hdr.sgml : 20020819 20020816175636 ACCESSION NUMBER: 0000936772-02-000320 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: 02741826 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 edg8138.txt VARP ALLIANCE BERNSTEIN VALUE ALLIANCE ---------------------------------------------------- VARIABLE PRODUCTS ---------------------------------------------------- SERIES FUND ---------------------------------------------------- ALLIANCEBERNSTEIN VALUE ---------------------------------------------------- PORTFOLIO ---------------------------------------------------- SEMI-ANNUAL REPORT JUNE 30, 2002 Investment Products Offered --------------------------- > Are Not FDIC Insured > May Lose Value > Are Not Bank Guaranteed --------------------------- ALLIANCEBERNSTEIN VALUE PORTFOLIO TEN LARGEST HOLDINGS June 30, 2002 (unaudited) Alliance Variable Products Series Fund ================================================================================ PERCENT OF COMPANY U.S. $ VALUE NET ASSETS - -------------------------------------------------------------------------------- Exxon Mobil Corp. $ 2,741,640 5.2% - -------------------------------------------------------------------------------- Bank of America Corp. 1,435,344 2.7 - -------------------------------------------------------------------------------- Citigroup, Inc. 1,395,000 2.7 - -------------------------------------------------------------------------------- ChevronTexaco Corp. 1,205,104 2.3 - -------------------------------------------------------------------------------- SBC Communications, Inc. 1,183,400 2.2 - -------------------------------------------------------------------------------- Verizon Communications 929,472 1.8 - -------------------------------------------------------------------------------- Wachovia Corp. 830,415 1.6 - -------------------------------------------------------------------------------- Hewlett-Packard Co. 723,172 1.4 - -------------------------------------------------------------------------------- Philip Morris Cos., Inc. 720,720 1.4 - -------------------------------------------------------------------------------- Bank One Corp. 696,488 1.3 ------------ ---- - -------------------------------------------------------------------------------- $11,860,755 22.6% - -------------------------------------------------------------------------------- 1 ALLIANCEBERNSTEIN VALUE PORTFOLIO PORTFOLIO OF INVESTMENTS June 30, 2002 (unaudited) Alliance Variable Products Series Fund ================================================================================ Company Shares U.S. $ Value - -------------------------------------------------------------------------------- COMMON STOCKS-95.9% FINANCIAL-32.8% BANKS - NYC-4.0% Citigroup, Inc. ............................. 36,000 $ 1,395,000 J. P. Morgan Chase & Co. .................... 20,400 691,968 ----------- 2,086,968 ----------- FINANCE - PERSONAL LOANS-0.7% American Express Co. ........................ 2,200 79,904 Countrywide Credit Industries, Inc. ..................................... 6,550 316,038 ----------- 395,942 ----------- LIFE INSURANCE-0.8% MetLife, Inc. ............................... 12,500 360,000 Torchmark, Inc. ............................. 1,300 49,660 ----------- 409,660 ----------- MAJOR REGIONAL BANKS-14.7% AmSouth Bancorp. ............................ 15,000 335,700 Bank of America Corp. ....................... 20,400 1,435,344 Bank One Corp. .............................. 18,100 696,488 Charter One Financial, Inc. ................. 2,205 75,808 Comerica, Inc. .............................. 5,000 307,000 FleetBoston Financial Corp. ................. 17,000 549,950 Huntington Bancshares, Inc. ................. 16,400 318,488 KeyCorp ..................................... 14,250 389,025 National City Corp. ......................... 13,900 462,175 Regions Financial Corp. ..................... 9,400 330,410 SouthTrust Corp. ............................ 5,500 143,660 Suntrust Banks, Inc. ........................ 5,400 365,688 U.S. Bancorp ................................ 22,800 532,380 Union Planters Corp. ........................ 7,313 236,706 UnionBanCal Corp. ........................... 4,950 231,907 Wachovia Corp. .............................. 21,750 830,415 Wells Fargo & Co. ........................... 9,650 483,079 ----------- 7,724,223 ----------- MISCELLANEOUS FINANCIAL-3.4% Goldman Sachs Group, Inc. ................... 6,275 460,271 Lehman Brothers Holdings, Inc. ..................................... 7,000 437,640 Merrill Lynch & Co., Inc. ................... 2,300 93,150 MGIC Investment Corp. ....................... 4,300 291,540 Morgan Stanley, Dean Witter & Co. ........................ 11,500 495,420 ----------- 1,778,021 ----------- MULTI-LINE INSURANCE-2.5% Aetna, Inc. ................................. 900 43,173 American International Group, Inc. ..................................... 7,825 533,900 CIGNA Corp. ................................. 2,350 228,937 Health Net, Inc. (a) ........................ 10,500 281,085 Humana, Inc. (a) ............................ 14,500 226,635 ----------- 1,313,730 ----------- PROPERTY - CASUALTY INSURANCE-3.0% Allstate Corp. .............................. 13,850 512,173 Aon Corp. ................................... 7,300 215,204 Chubb Corp. ................................. 5,000 354,000 Old Republic International Corp. .................................... 3,500 110,250 St. Paul Cos., Inc. ......................... 7,900 307,468 XL Capital, Ltd. Cl.A ....................... 900 76,230 ----------- 1,575,325 ----------- SAVINGS AND LOAN-3.7% Federal Home Loan Mortgage Corp. ........................... 5,700 348,840 Federal National Mortgage Assn. ........................... 7,400 545,750 Golden West Financial Corp. ................. 5,250 361,095 Washington Mutual, Inc. ..................... 18,100 671,691 ----------- 1,927,376 ----------- 17,211,245 ----------- ENERGY-11.6% OILS - INTEGRATED DOMESTIC-3.5% Amerada Hess Corp. .......................... 3,050 251,625 Ashland, Inc. ............................... 7,300 295,650 Marathon Oil Corp. .......................... 12,400 336,288 Occidental Petroleum Corp. .................. 12,000 359,880 Phillips Petroleum Co. ...................... 6,600 388,608 Valero Energy Corp. ......................... 5,100 190,842 ----------- 1,822,893 ----------- OILS - INTEGRATED INTERNATIONAL-8.1% ChevronTexaco Corp. ......................... 13,617 1,205,104 Conoco, Inc. ................................ 11,000 305,800 Exxon Mobil Corp. ........................... 67,000 2,741,640 ----------- 4,252,544 ----------- 6,075,437 ----------- UTILITIES-11.3% ELECTRIC COMPANIES-4.4% Ameren Corp. ................................ 7,000 301,070 American Electric Power Co., Inc. ..................................... 9,375 375,187 Cinergy Corp. ............................... 7,050 253,730 Consolidated Edison, Inc. ................... 8,350 348,612 Entergy Corp. ............................... 7,800 331,032 PPL Corp. ................................... 9,000 297,720 Puget Energy, Inc. .......................... 9,500 196,175 Reliant Resources, Inc. (a) ................. 16,500 144,375 Westar Energy, Inc. ......................... 3,800 58,330 Xcel Energy, Inc. ........................... 2,150 36,056 ----------- 2,342,287 ----------- 2 Alliance Variable Products Series Fund ================================================================================ Company Shares U.S. $ Value - -------------------------------------------------------------------------------- TELEPHONE-6.9% AT&T Corp. .................................. 44,000 $ 470,800 BellSouth Corp. ............................. 21,500 677,250 Qwest Communications International, Inc. (a) ................. 69,000 193,200 SBC Communications, Inc. .................... 38,800 1,183,400 Sprint Corp. ................................ 13,000 137,930 Verizon Communications ...................... 23,150 929,472 WorldCom, Inc.- WorldCom Group (b) ....................... 199,000 17,910 ----------- 3,609,962 ----------- 5,952,249 ----------- CONSUMER CYCLICALS-10.5% AUTO PARTS - AFTER MARKET-0.7% Genuine Parts Co. ........................... 9,600 334,752 Snap On, Inc. ............................... 1,925 57,153 ----------- 391,905 ----------- AUTOS & AUTO PARTS-2.6% Autoliv, Inc. (Sweden) ...................... 7,000 176,400 Dana Corp. .................................. 13,500 250,155 Ford Motor Co. .............................. 3,000 48,000 General Motors Corp. ........................ 8,000 427,600 Lear Corp. (a) .............................. 5,000 231,250 Magna International, Inc. ................... Cl.A ..................................... 3,300 227,205 ----------- 1,360,610 ----------- HOME FURNISHINGS-0.5% Leggett & Platt, Inc. ....................... 10,500 245,700 ----------- HOTEL - MOTEL-0.2% Hilton Hotels Corp. ......................... 6,500 90,350 ----------- HOUSEHOLD - APPLIANCES/ DURABLES-1.3% Black & Decker Corp. ........................ 4,700 226,540 Maytag Corp. ................................ 5,000 213,250 Whirlpool Corp. ............................. 4,000 261,440 ----------- 701,230 ----------- MISCELLANEOUS CONSUMER CYCLICALS-1.1% Fortune Brands, Inc. ........................ 5,500 308,000 Newell Rubbermaid, Inc. ..................... 7,500 262,950 ----------- 570,950 ----------- RETAILERS-2.9% AutoNation, Inc. (a) ........................ 20,000 290,000 Federated Department Stores, Inc. (a) ......................... 8,500 337,450 May Department Stores Co. ................... 9,900 326,007 Sears, Roebuck & Co. ........................ 6,825 370,597 TJX Cos, Inc. ............................... 9,000 176,490 ----------- 1,500,544 ----------- TEXTILES/SHOES - APPAREL MFG.-0.7% Jones Apparel Group, Inc. (a) ............... 4,000 150,000 Liz Claiborne, Inc. ......................... 6,200 197,160 V.F. Corp. .................................. 650 25,487 ----------- 372,647 ----------- TIRES & RUBBER GOODS-0.5% Goodyear Tire & Rubber Co. .................. 13,600 254,456 ----------- 5,488,392 ----------- CONSUMER STAPLES-6.5% BEVERAGES - SOFT, LITE & HARD-0.3% Coca-Cola Enterprises, Inc. ................. 5,100 112,608 Pepsi Bottling Group, Inc. .................. 2,200 67,760 ----------- 180,368 ----------- FOODS-2.8% ConAgra Foods, Inc. ......................... 15,500 428,575 H.J. Heinz Co. .............................. 4,675 192,142 Kellogg Co. ................................. 4,275 153,302 Sara Lee Corp. .............................. 17,000 350,880 Tyson Foods, Inc. Cl.A ...................... 20,376 316,032 ----------- 1,440,931 ----------- RESTAURANTS-0.8% McDonald's Corp. ............................ 600 17,070 Wendy's International, Inc. ................. 6,850 272,835 Yum! Brands, Inc. (a) ....................... 4,000 117,000 ----------- 406,905 ----------- RETAIL STORES - FOOD-0.0% SUPERVALU, Inc. ............................. 500 12,265 ----------- SOAPS-0.7% Procter & Gamble Co. ........................ 4,200 375,060 ----------- SUGAR REFINERS-0.5% Archer- Daniels- Midland Co. ................ 19,805 253,306 ----------- TOBACCO-1.4% Philip Morris Cos., Inc. .................... 16,500 720,720 ----------- 3,389,555 ----------- COMMODITIES-5.5% CHEMICALS-3.3% Cabot Corp. ................................. 2,200 63,030 E.I. du Pont de Nemours & Co. .................................... 14,775 656,010 Eastman Chemical Co. ........................ 1,600 75,040 FMC Corp. (a) ............................... 1,600 48,272 Praxair, Inc. ............................... 3,750 213,638 The Dow Chemical Co. ........................ 15,500 532,890 The Lubrizol Corp. .......................... 5,050 169,175 ----------- 1,758,055 ----------- ALLIANCEBERNSTEIN VALUE PORTFOLIO PORTFOLIO OF INVESTMENTS (continued) Alliance Variable Products Series Fund ================================================================================ Company Shares U.S. $ Value - -------------------------------------------------------------------------------- PAPER-2.2% Boise Cascade Corp. ........................ 6,500 $ 224,445 Georgia-Pacific Group ...................... 12,150 298,647 International Paper Co. .................... 11,000 479,380 Smurfit-Stone Container Corp. (a) ............................... 7,450 114,879 Temple-Inland, Inc. ........................ 450 26,037 ----------- 1,143,388 ----------- 2,901,443 ----------- TECHNOLOGY-5.3% COMMUNICATION - EQUIP. MFRS.-1.4% Corning, Inc. (a) .......................... 67,400 239,270 Nortel Networks Corp. (a) .................. 161,700 234,465 Tellabs, Inc. (a) .......................... 41,500 257,300 ----------- 731,035 ----------- COMPUTERS-2.3% Hewlett-Packard Co. ........................ 47,328 723,172 International Business Machines Corp. .......................... 6,040 434,880 Quantum Corp. (a) .......................... 15,750 66,150 ----------- 1,224,202 ----------- COMPUTER SERVICES/ SOFTWARE-0.4% Electronic Data Systems Corp. ................................... 5,500 204,325 ----------- MISCELLANEOUS INDUSTRIAL TECHNOLOGY-1.1% Arrow Electronics, Inc. (a) ................ 1,200 24,900 Avnet, Inc. (a) ............................ 2,000 43,980 Ingram Micro, Inc. Cl.A, (a) ............... 10,550 145,063 Solectron Corp. (a) ........................ 27,210 167,341 Tech Data Corp. (a) ........................ 5,550 210,067 ----------- 591,351 ----------- SEMICONDUCTORS-0.1% Motorola, Inc. ............................. 2,400 34,608 ----------- 2,785,521 ----------- CONSUMER GROWTH-4.8% DRUGS-3.2% Bristol-Myers Squibb Co. ................... 3,750 96,375 Merck & Co., Inc. .......................... 13,600 688,704 Pfizer, Inc. ............................... 7,075 247,625 Pharmacia Corp. ............................ 1,800 67,410 Schering-Plough Corp. ...................... 21,400 526,440 Wyeth ...................................... 625 32,000 ----------- 1,658,554 ----------- ENTERTAINMENT-0.4% Viacom, Inc. (a) ........................... 3,050 135,329 Walt Disney Co. ............................ 4,100 77,490 ----------- 212,819 ----------- HOSPITAL SUPPLIES-0.0% Abbott Laboratories ........................ 675 25,414 ----------- PUBLISHING-0.5% R.R. Donnelley & Sons Co. .................. 9,250 254,837 ----------- RADIO - TV BROADCASTING-0.7% Comcast Corp. Cl.A, (a) .................... 16,600 395,744 ----------- 2,547,368 ----------- CAPITAL EQUIPMENT-3.0% AEROSPACE - DEFENSE-0.3% B.F. Goodrich Corp. ........................ 5,900 161,188 ----------- AUTO TRUCKS - PARTS-1.2% Eaton Corp. ................................ 4,350 316,462 PACCAR, Inc. ............................... 7,000 310,730 ----------- 627,192 ----------- DEFENSE-0.6% Lockheed Martin Corp. ...................... 800 55,600 Raytheon Co. ............................... 6,450 262,838 ----------- 318,438 ----------- ELECTRICAL EQUIPMENT-0.9% Cooper Industries, Ltd. Cl.A ............... 7,000 275,100 Hubbell, Inc. Cl.B ......................... 4,800 163,920 Thomas & Betts Corp. (a) ................... 500 9,300 ----------- 448,320 ----------- 1,555,138 ----------- NON-FINANCIAL-2.5% BUILDING MATERIAL - HEAT/ PLUMBING/AIR-0.3% Masco Corp. ................................ 4,975 134,872 ----------- HOME BUILDING-1.8% Centex Corp. ............................... 5,650 326,514 KB HOME .................................... 6,000 309,060 Pulte Homes, Inc. .......................... 5,500 316,140 ----------- 951,714 ----------- MISCELLANEOUS BUILDING-0.4% The Sherwin-Williams Co. ................... 7,500 224,475 ----------- 1,311,061 ----------- SERVICES-1.4% RAILROADS-1.4% Burlington Northern Santa Fe Corp .................................... 13,000 390,000 Norfolk Southern Corp. ..................... 4,450 104,041 Union Pacific Corp. ........................ 3,800 240,464 ----------- 734,505 ----------- INDUSTRIAL COMMODITIES-0.7% PAPER-0.7% MeadWestvaco Corp. ......................... 11,237 377,114 ----------- Total Common Stocks (cost $52,453,221) ...................... 50,329,028 =========== 4 Alliance Variable Products Series Fund ================================================================================ Principal Amount Company (000) U.S. $ Value - -------------------------------------------------------------------------------- SHORT-TERM INVESTMENT-4.1% TIME DEPOSIT-4.1% State Street Euro Dollar 1.25%, 7/01/02 (cost $2,122,000) .................... 2,122 $ 2,122,000 ----------- TOTAL INVESTMENTS-100.0% (cost $54,575,221) ................... 52,451,028 Other assets less liabilities-0.0% ..................... 21,898 ----------- NET ASSETS-100% ......................... $52,472,926 =========== - -------------------------------------------------------------------------------- (a) Non-income producing security. (b) Security exempt from Registration under Rule 144A of the Securities Act of 1933. This security may be resold in transactions exempt from registration, normally to certain qualified buyers. At June 30, 2002, the aggregate market value of this security amounted to $17,910 or .03% of net assets. See Notes to Financial Statements. 5 ALLIANCEBERNSTEIN VALUE PORTFOLIO STATEMENT OF ASSETS AND LIABILITIES June 30, 2002 (unaudited) Alliance Variable Products Series Fund ================================================================================ ASSETS Investments in securities, at value (cost $54,575,221) ..... $ 52,451,028 Cash ....................................................... 954 Dividends and interest receivable .......................... 83,808 ------------ Total assets ............................................... 52,535,790 ------------ LIABILITIES Payable for investment securities purchased ................ 13,545 Distribution fee payable ................................... 10,687 Accrued expenses ........................................... 38,632 ------------ Total liabilities .......................................... 62,864 ------------ NET ASSETS .................................................... $ 52,472,926 ============ COMPOSITION OF NET ASSETS Capital stock, at par ...................................... $ 5,426 Additional paid-in capital ................................. 54,359,488 Undistributed net investment income ........................ 204,362 Accumulated net realized gain on investments ............... 27,843 Net unrealized depreciation of investments ................. (2,124,193) ------------ $ 52,472,926 ============ Class B Shares Net assets ................................................. $ 52,472,926 ============ Shares of capital stock outstanding ........................ 5,425,751 ============ Net asset value per share .................................. $ 9.67 ============ - -------------------------------------------------------------------------------- See Notes to Financial Statements. 6 ALLIANCEBERNSTEIN VALUE PORTFOLIO STATEMENT OF OPERATIONS Six Months Ended June 30, 2002 (unaudited) Alliance Variable Products Series Fund ================================================================================ INVESTMENT INCOME Dividends ................................................. $ 437,484 Interest .................................................. 18,095 ----------- Total investment income ................................... 455,579 ----------- EXPENSES Advisory fee .............................................. 150,712 Distribution fee--Class B ................................. 50,939 Custodian ................................................. 38,010 Administrative ............................................ 34,500 Audit and legal ........................................... 9,774 Printing .................................................. 8,688 Directors' fees ........................................... 1,810 Transfer agency ........................................... 543 Miscellaneous ............................................. 3,077 ----------- Total expenses ............................................ 298,053 Less: expenses waived and reimbursed (see Note B) ......... (51,689) ----------- Net expenses .............................................. 246,364 ----------- Net investment income ..................................... 209,215 ----------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS Net realized gain on investment transactions .............. 117,802 Net change in unrealized appreciation/depreciation of investments .......................................... (2,864,007) ----------- Net loss on investments ................................... (2,746,205) ----------- NET DECREASE IN NET ASSETS FROM OPERATIONS ................... $(2,536,990) =========== - -------------------------------------------------------------------------------- See Notes to Financial Statements. 7 ALLIANCEBERNSTEIN VALUE PORTFOLIO STATEMENT OF CHANGES IN NET ASSETS Alliance Variable Products Series Fund ================================================================================
Six Months Ended May 1, 2001(a) June 30, 2002 to December 31, (unaudited) 2001 ================ ============== INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS Net investment income ........................................... $ 209,215 $ 88,633 Net realized gain (loss) on investment transactions ............. 117,802 (89,959) Net change in unrealized appreciation/depreciation of investments (2,864,007) 739,814 ------------ ------------ Net increase (decrease) in net assets from operations ........... (2,536,990) 738,488 DIVIDENDS TO SHAREHOLDERS FROM Net investment income Class B ....................................................... (93,486) -0- CAPITAL STOCK TRANSACTIONS Net increase .................................................... 27,817,281 26,547,633 ------------ ------------ Total increase .................................................. 25,186,805 27,286,121 NET ASSETS Beginning of period ............................................. 27,286,121 -0- ------------ ------------ End of period (including undistributed net investment income of $204,362 and $88,633, respectively) ............................. $ 52,472,926 $ 27,286,121 ============ ============
- -------------------------------------------------------------------------------- (a) Commencement of operations. See Notes to Financial Statements. 8 ALLIANCEBERNSTEIN VALUE PORTFOLIO NOTES TO FINANCIAL STATEMENTS June 30, 2002 (unaudited) Alliance Variable Products Series Fund ================================================================================ NOTE A: Significant Accounting Policies The AllianceBernstein Value Portfolio (the "Portfolio") is a series of Alliance Variable Products Series Fund, Inc. (the "Fund"). The Portfolio's investment objective is to seek long-term growth of capital. The Portfolio commenced operations on May 1, 2001. 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. As of June 30, 2002, the Portfolio had only Class B shares outstanding. The Portfolio offers and sells its shares only to separate accounts of certain life insurance companies for the purpose of funding variable annuity contracts and variable life insurance policies. Sales are made without a sales charge at the Portfolio's net asset value per share. The financial statements have been prepared in conformity with accounting principles generally accepted in the United States, which require management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements and amounts of income and expenses during the reporting period. Actual results could differ from those estimates. The following is a summary of significant accounting policies followed by the Portfolio. 1. Security Valuation Portfolio securities traded on a national securities exchange or on a foreign securities exchange (other than foreign securities exchanges whose operations are similar to those of the United States over-the-counter market) or on The Nasdaq Stock Market, Inc., are generally valued at the last reported sales price or if no sale occurred, at the mean of the closing bid and asked price on that day. Readily marketable securities traded in the over-the-counter market, securities listed on a foreign securities exchange whose operations are similar to the U.S. over-the-counter market, and securities listed on a national securities exchange whose primary market is believed to be over-the-counter (but excluding securities traded on The Nasdaq Stock Market, Inc.) are valued at the mean of the current bid and asked price. U.S. government and fixed income securities which mature in 60 days or less are valued at amortized cost, unless this method does not represent fair value. Securities for which current market quotations are not readily available are valued at their fair value as determined in good faith by, or in accordance with procedures adopted by, the Board of Directors. Fixed income securities may be valued on the basis of prices obtained from a pricing service when such prices are believed to reflect the fair market value of such securities. 2. Currency Translation Assets and liabilities denominated in foreign currencies and commitments under forward exchange currency contracts are translated into U.S. dollars at the mean of the quoted bid and asked price of such currencies against the U.S. dollar. Purchases and sales of portfolio securities are translated at the rates of exchange prevailing when such securities were acquired or sold. Income and expenses are translated at rates of exchange prevailing when accrued. Net realized gains and losses on foreign currency transactions represent foreign exchange gains and losses from sales and maturities of securities and forward exchange currency contracts, holdings of foreign currencies, exchange gains and losses realized between the trade and settlement dates on investment transactions, and the difference between the amounts of interest, dividends and foreign 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 9 ALLIANCEBERNSTEIN VALUE PORTFOLIO NOTES TO FINANCIAL STATEMENTS (continued) Alliance Variable Products Series Fund ================================================================================ and expenses incurred by a portfolio with multi-class shares outstanding, are borne on a pro-rata basis by each outstanding class of shares based on the proportionate interest in the portfolio represented by the net assets of such class, except that the portfolio's Class B shares bear the distribution fees. 6. 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 .75% of the Portfolio's average daily net assets. Pursuant to the advisory agreement, the Portfolio paid $34,500 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. Prior to May 1, 2002, the Adviser agreed to waive its fee and to reimburse the additional operating expenses to the extent necessary to limit total operating expenses on an annual basis to 1.20% of the average daily net assets for Class B shares. Effective May 1, 2002, the Adviser agreed to waive its fee and to reimburse the additional operating expenses to the extent necessary to limit total operating expenses on an annual basis to 1.45% of the average daily net assets for Class B shares. Any expense waivers or reimbursements are accrued daily and paid monthly. For the six months ended June 30, 2002 the Adviser waived fees in the amount of $34,500 and reimbursed additional expenses in the amount of $17,189. Brokerage commissions paid on investment transactions for the six months ended June 30, 2002, amounted to $54,754, of which $39,589 was paid to Sanford C. Bernstein & Co. LLC, an affiliate of the Adviser. The Portfolio compensates Alliance Global Investors 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 $543 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. 10 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 .............................. $ 30,304,860 U.S. government and agencies ............................. -0- Sales: Stocks and debt obligations .............................. $ 1,839,510 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 ............................ $ 2,811,051 Gross unrealized depreciation ............................ (4,935,244) ------------ Net unrealized depreciation .............................. $ (2,124,193) ============ 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- 11 ALLIANCEBERNSTEIN VALUE PORTFOLIO NOTES TO FINANCIAL STATEMENTS (continued) Alliance Variable Products Series Fund ================================================================================ ing an option, the Portfolio bears the market risk of an unfavorable change in the price of the security or currency underlying the written option. Exercise of an option written by the Portfolio could result in the Portfolio selling or buying a security or currency at a price different from the current market value. The Portfolio had no transactions in options written for the six months ended June 30, 2002. - -------------------------------------------------------------------------------- NOTE E: Distributions to Shareholders As of December 31, 2001, the components of accumulated earnings/(deficit) on a tax basis were as follows: Undistributed ordinary income .......................... $ 88,633 --------- Accumulated earnings ................................... 88,633 Accumulated capital and other losses ................... (89,959)(a) Unrealized appreciation/(depreciation) ................. 739,814 --------- Total accumulated earnings/(deficit) ................... $ 738,488 ========= (a) On December 31, 2001, the Portfolio had a capital loss carryforward of $89,959 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. - -------------------------------------------------------------------------------- NOTE F: Capital Stock There are 500,000,000 Class B shares of $.001 par value capital stock authorized. Transactions in capital stock were as follows:
------------------------------------ ------------------------------------ Shares Amount ------------------------------------ ------------------------------------ Six Months Ended May 1, 2001(a) to Six Months Ended May 1, 2001(a) to June 30, 2002 December 31, June 30, 2002 December 31, (unaudited) 2001 (unaudited) 2001 ================ ================= ================ ================= Class B Shares sold....................... 2,971,016 2,757,370 $ 30,329,962 $ 26,981,265 Shares issued in reinvestment of dividends................... 9,491 -0- 93,486 -0- Shares redeemed................... (265,558) (46,568) (2,606,167) (433,632) -------------- -------------- -------------- -------------- Net increase...................... 2,714,949 2,710,802 $ 27,817,281 $ 26,547,633 ============== ============== ============== ==============
- -------------------------------------------------------------------------------- NOTE G: 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 H: 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. - -------------------------------------------------------------------------------- (a) Commencement of operations. 12 ALLIANCEBERNSTEIN VALUE PORTFOLIO FINANCIAL HIGHLIGHTS Alliance Variable Products Series Fund ================================================================================ Selected Data For A Share Of Capital Stock Outstanding Throughout The Period --------------------------- CLASS B --------------------------- Six Months May 1, Ending 2001(a) to June 30, December 31, 2002 2001 ========== =========== Net asset value, beginning of period ......... $ 10.07 $ 10.00 Income From Investment Operations Net investment income (b)(c) ................. .05 .08 Net realized and unrealized loss on investment transactions .................... (.43) (.01) ---------- ---------- Net increase (decrease) in net asset value from operations ...................... (.38) .07 ---------- ---------- Less: Dividends Dividends from net investment income ......... (.02) -0- ---------- ---------- Net asset value, end of period ............... $ 9.67 $ 10.07 ========== ========== Total Return Total investment return based on net asset value (d) ............................ (3.80%) .70% Ratios/Supplemental Data Net assets, end of period (000's omitted) .... $ 52,473 $ 27,286 Ratio to average net assets of: Expenses, net of waivers and reimbursements (e) ...................... 1.21% 1.20% Expenses, before waivers and reimbursements (e) ...................... 1.46% 2.47% Net investment income (c)(e) .............. 1.03% 1.29% Portfolio turnover rate ...................... 5% 4% - -------------------------------------------------------------------------------- (a) Commencement of operations. (b) Based on average shares outstanding. (c) Net of expenses reimbursed or waived by the Adviser. (d) Total investment return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption on the last day of the period. Total investment return calculated for a period of less than one year is not annualized. (e) Annualized. 13 ALLIANCEBERNSTEIN VALUE 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-----