-----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, D22AmqUn/rq5Vh3RPds/svjyIFpnp4DEFgfdtJc3J2s/gZygI6gfy42S0ZAsBelD BLbRTpcAU2+UaGTuoZafaQ== 0000936772-02-000332.txt : 20020821 0000936772-02-000332.hdr.sgml : 20020821 20020821112653 ACCESSION NUMBER: 0000936772-02-000332 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20020630 FILED AS OF DATE: 20020821 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: 02744429 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 edg8130.txt ALLIANCE VARIABLE PRODUCTS SERIES FUND ALLIANCEBERNSTEIN REAL ESTATE INVESTMENT PORTFOLIO SEMI-ANNUAL REPORT JUNE 30, 2002 INVESTMENT PRODUCTS OFFERED o ARE NOT FDIC INSURED o MAY LOSE VALUE o ARE NOT BANK GUARANTEED ALLIANCEBERNSTEIN REAL ESTATE INVESTMENT PORTFOLIO TEN LARGEST HOLDINGS June 30, 2002 (unaudited) Alliance Variable Products Series Fund _______________________________________________________________________________ PERCENT OF COMPANY U.S. $ VALUE NET ASSETS - ------------------------------------------------------------------------------- Equity Office Properties Trust $ 4,404,533 6.5% Vornado Realty Trust 4,176,480 6.2 Apartment Investment & Management Co. 3,394,800 5.0 ProLogis Trust 3,133,000 4.6 Boston Properties, Inc. 3,008,235 4.5 General Growth Properties, Inc. 2,662,200 4.0 Trizec Properties, Inc. 2,588,656 3.8 Mack-Cali Realty Corp. 2,516,740 3.7 Host Marriott Corp. 2,509,730 3.7 Simon Property Group, Inc. 2,368,812 3.5 $30,763,186 45.5% 1 ALLIANCEBERNSTEIN REAL ESTATE INVESTMENT PORTFOLIO PORTFOLIO OF INVESTMENTS June 30, 2002 (unaudited) Alliance Variable Products Series Fund _______________________________________________________________________________ Shares or Principal Amount Company (000) U.S. $ Value - ------------------------------------------------------------------------------- COMMON STOCKS-96.0% REAL ESTATE INVESTMENT TRUSTS-96.0% OFFICE-24.4% Alexandria Real Estate Equities, Inc. 31,500 $ 1,554,210 Boston Properties, Inc. 75,300 3,008,235 Corporate Office Properties Trust 47,500 693,025 Equity Office Properties Trust 146,330 4,404,533 Mack-Cali Realty Corp. 71,600 2,516,740 SL Green Realty Corp. 47,300 1,686,245 Trizec Properties, Inc. 153,536 2,588,656 ------------ 16,451,644 APARTMENTS-19.1% Apartment Investment & Management Co. 69,000 3,394,800 Archstone Communities Trust 35,500 947,850 Avalon Bay Communities, Inc. 18,800 877,960 Camden Property Trust 51,900 1,921,857 Equity Residential Properties Trust 62,000 1,782,500 Essex Property Trust, Inc. 26,300 1,438,610 Gables Residential Trust 43,700 1,395,341 United Dominion Realty Trust, Inc. 74,000 1,165,500 ------------ 12,924,418 REGIONAL MALLS-13.3% General Growth Properties, Inc. 52,200 2,662,200 Macerich Co. 38,300 1,187,300 Mills Corp. 43,500 1,348,500 Rouse Co. 43,800 1,445,400 Simon Property Group, Inc. 64,300 2,368,812 ------------ 9,012,212 SHOPPING CENTERS-11.0% Developers Diversified Realty Corp. 102,200 2,299,500 Equity One, Inc. 49,200 688,800 Heritage Property Investment Trust 32,500 868,075 Kimco Realty Corp. 55,100 1,845,299 Pan Pacific Retail Properties, Inc. 50,900 1,739,762 ------------ 7,441,436 DIVERSIFIED-9.2% iStar Financial, Inc. 58,100 1,655,850 U.S. Restaurant Properties, Inc. 24,600 407,622 Vornado Realty Trust 90,400 4,176,480 ------------ 6,239,952 WAREHOUSE & INDUSTRIAL-7.6% AMB Property Corp. 53,900 1,670,900 Keystone Property Trust 21,500 341,205 ProLogis Trust 120,500 3,133,000 ------------ 5,145,105 HOSPITALITY-5.9% Host Marriott Corp. 222,100 2,509,730 MeriStar Hospitality Corp. 95,400 1,454,850 ------------ 3,964,580 OFFICE- INDUSTRIAL MIX-2.4% Duke-Weeks Realty Corp. 33,700 975,615 Mission West Properties, Inc. 52,700 642,413 ------------ 1,618,028 HEALTHCARE-1.8% Senior Housing Properties Trust 76,600 1,202,620 STORAGE-1.3% Public Storage, Inc. 23,500 871,850 ------------ Total Common Stocks cost $56,177,126) 64,871,845 SHORT-TERM INVESTMENT-4.8% TIME DEPOSIT-4.8% State Street Euro Dollar 1.25%, 7/01/02 (cost $3,247,000) $ 3,247 3,247,000 TOTAL INVESTMENTS-100.8% (cost $59,424,126) 68,118,845 Other assets less liabilities-(0.8%) (543,183) NET ASSETS-100% $ 67,575,662 See Notes to Financial Statements. 2 ALLIANCEBERNSTEIN REAL ESTATE INVESTMENT PORTFOLIO STATEMENT OF ASSETS AND LIABILITIES June 30, 2002 (unaudited) Alliance Variable Products Series Fund _______________________________________________________________________________ ASSETS Investments in securities, at value (cost $59,424,126) $68,118,845(a) Cash 805 Collateral held for securities loaned 12,467,300 Dividends and interest receivable 305,127 Total assets 80,892,077 LIABILITIES Payable for collateral received on securities loaned 12,467,300 Payable for investment securities purchased 738,246 Advisory fee payable 46,890 Accrued expenses 63,979 Total liabilities 13,316,415 NET ASSETS $67,575,662 COMPOSITION OF NET ASSETS Capital stock, at par $5,322 Additional paid-in capital 59,866,214 Undistributed net investment income 1,254,067 Accumulated net realized loss on investments (2,244,660) Net unrealized appreciation of investments 8,694,719 $67,575,662 Class A Shares Net assets $55,445,117 Shares of capital stock outstanding 4,364,666 Net asset value per share $12.70 Class B Shares Net assets $12,130,545 Shares of capital stock outstanding 957,052 Net asset value per share $12.67 (a) Includes securities on loan with a value of $12,123,585 (see Note F). See Notes to Financial Statements. 3 ALLIANCEBERNSTEIN REAL ESTATE INVESTMENT PORTFOLIO STATEMENT OF OPERATIONS Six Months Ended June 30, 2002 (unaudited) Alliance Variable Products Series Fund _______________________________________________________________________________ INVESTMENT INCOME Dividends (net of foreign taxes withheld $605) $1,521,218 Interest 18,451 Total investment income 1,539,669 EXPENSES Advisory fee 240,846 Distribution fee -- Class B 10,743 Custodian 54,677 Administrative 34,500 Audit and legal 19,115 Printing 17,437 Directors' fees 1,001 Transfer agency 452 Amortization of organization expenses 93 Miscellaneous 2,721 Total expenses 381,585 Less: expenses waived and reimbursed (see Note B) (101,643) Net expenses 279,942 Net investment income 1,259,727 REALIZED AND UNREALIZED GAIN ON INVESTMENTS Net realized gain on investment transactions 746,017 Net change in unrealized appreciation/depreciation of investments 4,776,650 Net gain on investments 5,522,667 NET INCREASE IN NET ASSETS FROM OPERATIONS $6,782,394 See Notes to Financial Statements. 4 ALLIANCEBERNSTEIN REAL ESTATE INVESTMENT PORTFOLIO STATEMENT OF CHANGES IN NET ASSETS Alliance Variable Products Series Fund _______________________________________________________________________________ Six Months Ended Year Ended June 30, 2002 December 31, (unaudited) 2001 - ------------------------------------------------------------------------------- INCREASE IN NET ASSETS FROM OPERATIONS Net investment income $ 1,259,727 $ 1,481,153 Net realized gain on investments 746,017 1,050,213 Net change in unrealized appreciation/ depreciation of investments 4,776,650 1,105,956 Net increase in net assets from operations 6,782,394 3,637,322 DIVIDENDS TO SHAREHOLDERS FROM Net investment income Class A (1,214,672) (1,103,352) Class B (261,464) (17,267) CAPITAL STOCK TRANSACTIONS Net increase 17,249,913 13,378,495 Total increase 22,556,171 15,895,198 NET ASSETS Beginning of period 45,019,491 29,124,293 End of period (including undistributed net investment income of $1,254,067 and $1,470,476, respectively) $67,575,662 $45,019,491 See Notes to Financial Statements. 5 ALLIANCEBERNSTEIN REAL ESTATE INVESTMENT PORTFOLIO NOTES TO FINANCIAL STATEMENTS June 30, 2002 (unaudited) Alliance Variable Products Series Fund _______________________________________________________________________________ NOTE A: Significant Accounting Policies The AllianceBernstein Real Estate Investment Portfolio (the "Portfolio") is a series of Alliance Variable Products Series Fund, Inc. (the "Fund"). The Portfolio was formerly known as Alliance Real Estate Investment Portfolio. The Portfolio's investment objective is to seek total return from long-term growth of capital and income principally through investing in equity securities of companies that are primarily engaged in or related to the real estate industry. 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 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. Organization Expenses Organization expenses of $20,000 have been deferred and are being amortized on a straight line basis through January 2002. 4. 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. 5. 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 6 Alliance Variable Products Series Fund _______________________________________________________________________________ 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. 6. Income and Expenses Expenses attributable to a single portfolio are charged to that portfolio. Expenses of the Fund are charged to each portfolio in proportion to net assets. All income earned and expenses incurred by a portfolio with multi-class shares outstanding are borne on a pro-rata basis by each outstanding class of shares, based on the proportionate interest in the portfolio represented by the net assets of such class, except that the portfolio's Class B shares bear the distribution fees. 7. 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 .90% 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 ("Expense Limitation Undertaking") 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. The Adviser terminated the Expense Limitation Undertaking effective May 1, 2002. 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 $67,143. Brokerage commissions paid on investment transactions for the six months ended June 30, 2002 amounted to $62,093 of which $570 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 $452 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. 7 ALLIANCEBERNSTEIN REAL ESTATE INVESTMENT PORTFOLIO NOTES TO FINANCIAL STATEMENTS (continued) Alliance Variable Products Series Fund _______________________________________________________________________________ NOTE D: Investment Transactions Purchases and sales of investment securities (excluding short-term investments) for the six months ended June 30, 2002, were as follows: Purchases: Stocks and debt obligations $25,616,004 U.S. government and agencies -0- Sales: Stocks and debt obligations $ 8,851,458 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 $8,944,843 Gross unrealized depreciation (250,124) Net unrealized appreciation $8,694,719 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- 8 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 $1,120,619 $908,379 Total taxable distributions 1,120,619 908,379 Total distributions paid $1,120,619 $908,379 As of December 31, 2001, the components of accumulated earnings/(deficit) on a tax basis were as follows: Undistributed ordinary income $1,470,476 Accumulated earnings 1,470,476 Accumulated capital and other losses (2,760,746)(a) Unrealized appreciation/(depreciation) 3,688,138(b) Total accumulated earnings/(deficit) $2,397,868 (a) On December 31, 2001, the Portfolio had a net capital loss carryforward of $2,760,746 of which $643,843 expires in the year 2007 and $2,116,903 expires in the year 2008. To the extent future capital gains are offset by capital loss carryforwards, such gains will not be distributed. (b) The difference 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/PaineWebber, 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 June 30, 2002, the Portfolio had loaned securities with a value of $12,123,585 and received cash collateral of $12,467,300. For the six months ended June 30, 2002, the Portfolio received fee income of $4,080 which is included in interest income in the accompanying statement of operations. 9 ALLIANCEBERNSTEIN REAL ESTATE INVESTMENT 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 --------------------------- ------------------------------ 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 1,174,838 1,298,132 $14,452,133 $14,308,595 Shares issued in reinvestment of dividends 98,115 100,947 1,214,672 1,103,352 Shares redeemed (335,119) (680,521) (4,094,372) (7,434,272) Net increase 937,834 718,558 $11,572,433 $ 7,977,675 April 24, April 24, Six Months Ended 2001* to Six Months Ended 2001* to June 30, 2002 December 31, June 30, 2002 December 31, (unaudited) 2001 (unaudited) 2001 ------------ ------------ -------------- -------------- Class B Shares sold 448,526 488,395 $5,421,309 $5,408,416 Shares issued in reinvestment of dividends 21,171 1,580 261,464 17,267 Shares redeemed (430) (2,190) (5,293) (24,863) Net increase 469,267 487,785 $5,677,480 $5,400,820 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. *Commencement of distribution. 10 ALLIANCEBERNSTEIN REAL ESTATE INVESTMENT PORTFOLIO FINANCIAL HIGHLIGHTS Alliance Variable Products Series Fund _______________________________________________________________________________ Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
CLASS A ------------------------------------------------------------------------------ Six Months January 9, Ended Year Ended December 31, 1997(a) to June 30, 2002 ------------------------------------------- December 31, (unaudited) 2001 2000 1999 1998 1997 ----------- ----------- ----------- ----------- ----------- ----------- Net asset value, beginning of period $ 11.50 $ 10.75 $ 8.87 $ 9.78 $ 12.34 $ 10.00 Income From Investment Operations Net investment income (b)(c) .28 .47 .48 .56 .54 .56 Net realized and unrealized gain (loss) on investment transactions 1.22 .67 1.84 (1.01) (2.87) 1.78 Net increase (decrease) in net asset value from operations 1.50 1.14 2.32 (.45) (2.33) 2.34 Less: Dividends and Distributions Dividends from net investment income (.30) (.39) (.44) (.46) (.16) -0- Distributions from net realized gains -0- -0- -0- -0- (.07) -0- Total dividends and distributions (.30) (.39) (.44) (.46) (.23) -0- Net asset value, end of period $ 12.70 $ 11.50 $ 10.75 $ 8.87 $ 9.78 $ 12.34 Total Return Total investment return based on net asset value (d) 13.11% 10.79% 26.69% (5.11)% (19.07)% 23.40% Ratios/Supplemental Data Net assets, end of period (000's omitted) $55,445 $39,417 $29,124 $17,852 $17,080 $13,694 Ratio to average net assets of: Expenses, net of waivers and reimbursements 1.00%(e) .95% .95% .95% .95% .95%(e) Expenses, before waivers and reimbursements 1.39%(e) 1.39% 1.67% 1.72% 1.77% 2.31%(e) Net investment income (b) 4.74%(e) 4.32% 4.87% 5.96% 4.98% 5.47%(e) Portfolio turnover rate 17% 33% 25% 37% 27% 26%
See footnote summary on page 12. 11 ALLIANCEBERNSTEIN REAL ESTATE INVESTMENT PORTFOLIO FINANCIAL HIGHLIGHTS (continued) Alliance Variable Products Series Fund _______________________________________________________________________________ Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period CLASS B --------------------------- April 24, Six Months 2001(f) Ended to June 30, 2002 December 31, (unaudited) 2001 ----------- -------------- Net asset value, beginning of period $11.49 $10.46 Income From Investment Operations Net investment income (b)(c) .27 .31 Net realized and unrealized gain on investment transactions 1.21 1.11 Net increase in net asset value from operations 1.48 1.42 Less: Dividends and Distributions Dividends from net investment income (.30) (.39) Distributions from net realized gains -0- -0- Total dividends and distributions (.30) (.39) Net asset value, end of period $12.67 $11.49 Total Return Total investment return based on net asset value (d) 12.91% 13.77% Ratios/Supplemental Data Net assets, end of period (000's omitted) $12,131 $5,603 Ratio to average net assets of: Expenses, net of waivers and reimbursements (e) 1.26% 1.20% Expenses, before waivers and reimbursements (e) 1.62% 1.84% Net investment income (b)(e) 4.54% 4.40% Portfolio turnover rate 17% 33% (a) Commencement of operations. (b) Net of expenses reimbursed or waived by the Adviser. (c) Based on average shares outstanding. (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. (f) Commencement of distribution. 12 ALLIANCEBERNSTEIN REAL ESTATE INVESTMENT 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. 13 -----END PRIVACY-ENHANCED MESSAGE-----