N-CSR 1 edg9253.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number: 811-05398 AllianceBernstein Variable Products Series Fund, Inc. (Exact name of registrant as specified in charter) 1345 Avenue of the Americas, New York, New York 10105 (Address of principal executive offices) (Zip code) Edmund P. Bergan, Jr. Alliance Capital Management, L.P. 1345 Avenue of the Americas New York, New York 10105 (Name and address of agent for service) Registrant?s telephone number, including area code: (800) 221-5672 Date of fiscal year end: December 31, 2003 Date of reporting period: June 30, 2003 ITEM 1. REPORTS TO STOCKHOLDERS. ALLIANCEBERNSTEIN ---------------------- VARIABLE PRODUCTS ---------------------- SERIES FUND ---------------------- ALLIANCEBERNSTEIN ---------------------- INTERNATIONAL VALUE ---------------------- PORTFOLIO ---------------------- SEMI-ANNUAL REPORT JUNE 30, 2003 Investment Products Offered --------------------------- > Are Not FDIC Insured > May Lose Value > Are Not Bank Guaranteed --------------------------- INTERNATIONAL VALUE PORTFOLIO TEN LARGEST HOLDINGS June 30, 2003 (unaudited) AllianceBernstein Variable Products Series Fund ================================================================================
------------------------------------------------------------------------------------------ COMPANY U.S. $ VALUE PERCENT OF NET ASSETS ------------------------------------------------------------------------------------------ Nissan Motor Co., Ltd. $ 3,496,058 4.5% ------------------------------------------------------------------------------------------ DSM NV 2,867,905 3.7 ------------------------------------------------------------------------------------------ Canon, Inc. 2,712,361 3.5 ------------------------------------------------------------------------------------------ Eni S.p.A 2,329,885 3.0 ------------------------------------------------------------------------------------------ Assurances Generales de France (AGF) 2,298,153 2.9 ------------------------------------------------------------------------------------------ Bank of Nova Scotia 2,272,164 2.9 ------------------------------------------------------------------------------------------ Arcelor 2,223,070 2.8 ------------------------------------------------------------------------------------------ Vodafone Group Plc 2,173,360 2.8 ------------------------------------------------------------------------------------------ Volkswagen AG 2,155,142 2.7 ------------------------------------------------------------------------------------------ Honda Motor Co., Ltd. 1,958,867 2.5 ----------- ----- ------------------------------------------------------------------------------------------ $24,486,965 31.3% ------------------------------------------------------------------------------------------
SECTOR DIVERSIFICATION June 30, 2003 (unaudited) ================================================================================
------------------------------------------------------------------------------------------ SECTOR U.S. $ VALUE PERCENT OF NET ASSETS ------------------------------------------------------------------------------------------ Finance $19,312,431 24.7% ------------------------------------------------------------------------------------------ Capital Equipment 9,870,066 12.6 ------------------------------------------------------------------------------------------ Industrial Commodities 6,466,138 8.3 ------------------------------------------------------------------------------------------ Consumer Cyclical 6,384,445 8.2 ------------------------------------------------------------------------------------------ Construction 6,017,432 7.7 ------------------------------------------------------------------------------------------ Energy 5,504,443 7.0 ------------------------------------------------------------------------------------------ Industrial 3,331,847 4.2 ------------------------------------------------------------------------------------------ Telecommunications 2,900,679 3.7 ------------------------------------------------------------------------------------------ Technology 2,712,361 3.5 ------------------------------------------------------------------------------------------ Medical 2,558,562 3.3 ------------------------------------------------------------------------------------------ Resources 1,399,131 1.8 ------------------------------------------------------------------------------------------ Transportation 957,581 1.2 ------------------------------------------------------------------------------------------ Consumer Staples 775,837 1.0 ----------- ----- ------------------------------------------------------------------------------------------ Total Investments* 68,190,953 87.2 ------------------------------------------------------------------------------------------ Cash and receivables, net of liabilities 10,003,329 12.8 ----------- ----- ------------------------------------------------------------------------------------------ Net Assets $78,194,282 100.0% ------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------- * Excludes short-term obligations. 1 INTERNATIONAL VALUE PORTFOLIO PORTFOLIO OF INVESTMENTS June 30, 2003 (unaudited) AllianceBernstein Variable Products Series Fund ================================================================================ Company Shares U.S. $ Value -------------------------------------------------------------------------------- COMMON STOCKS-87.2% AUSTRALIA-1.6% Australia and New Zealand Banking Group, Ltd. .................... 49,800 $ 622,285 Quantas Airways, Ltd. ..................... 280,100 614,999 ---------- 1,237,284 ---------- BRAZIL-2.0% Petroleo Brasileiro, SA (ADR) .................................. 89,200 1,582,524 ---------- CANADA-8.1% Bank of Nova Scotia ....................... 51,256 2,272,164 Magna International, Inc. Cl.A ................................... 21,239 1,421,364 Petro-Canada .............................. 40,000 1,592,034 Royal Bank of Canada ...................... 25,100 1,062,318 ---------- 6,347,880 ---------- FRANCE-16.2% Arcelor ................................... 190,600 2,223,070 Assurances Generales de France (AGF) ........................ 55,700 2,298,153 Aventis, SA ............................... 20,200 1,113,192 BNP Paribas, SA ........................... 29,200 1,486,239 Compagnie de Saint Gobain ................. 43,200 1,702,904 Orange, SA (a) ............................ 81,800 727,319 PSA Peugoet Citroen ....................... 30,550 1,486,428 Societe Generale .......................... 26,220 1,664,808 ---------- 12,702,113 ---------- GERMANY-4.4% AMB Generali Holding AG ................... 4,850 318,545 Hannover Rueckversicherungs-AG .................. 13,750 357,440 Heidelberger Zement AG .................... 26,250 580,330 Volkswagen AG ............................. 50,900 2,155,142 ---------- 3,411,457 ---------- IRELAND-3.3% Allied Irish Banks Plc .................... 62,266 931,796 Bank of Ireland ........................... 134,200 1,622,361 ---------- 2,554,157 ---------- ITALY-3.5% Banco Popolare di Verona e Novara Scrl .......................... 31,000 424,327 Eni S.p.A ................................. 153,800 2,329,885 ---------- 2,754,212 ---------- JAPAN-14.3% Canon, Inc. ............................... 59,000 2,712,361 Honda Motor Co., Ltd. ..................... 51,600 1,958,867 Nippon Meat Packers, Inc. ................. 82,000 775,837 Nissan Motor Co., Ltd. .................... 365,000 3,496,058 Promise Co., Ltd. ......................... 26,900 1,007,726 Takefuji Corp. ............................ 23,700 1,231,913 ---------- 11,182,762 ---------- KOREA-4.4% Kookmin Bank .............................. 25,800 777,564 POSCO ..................................... 15,600 1,619,422 Shinhan Financial Group Co., Ltd. .............................. 102,500 1,068,334 ---------- 3,465,320 ---------- MEXICO-1.5% Cemex, SA de CV (ADR) ..................... 52,506 1,173,625 ---------- NETHERLANDS-3.7% DSM NV .................................... 67,900 2,867,905 ---------- PEOPLES REPUBLIC OF CHINA-1.0% China Petroleum & Chemical Corp. (Sinopec) ........................ 3,300,000 787,110 ---------- SINGAPORE-0.4% Singapore Airlines, Ltd. .................. 58,000 342,581 ---------- SOUTH AFRICA-0.8% Sappi, Ltd. (ADR) ......................... 50,900 612,022 ---------- SPAIN-1.9% Grupo Dragados, SA ........................ 73,796 1,488,014 ---------- SWEDEN-4.8% Autoliv, Inc. (ADR) ....................... 28,700 773,570 Electrolux AB Cl.A ........................ 81,700 1,614,544 Svenska Cellulosa AB Cl.B ................. 40,200 1,375,163 ---------- 3,763,277 ---------- TAIWAN-2.2% Compal Electronics, Inc. (GDR) (a) .............................. 255,460 1,712,425 ---------- UNITED KINGDOM-13.1% Aviva Plc ................................. 146,200 1,016,760 George Wimpey Plc ......................... 109,800 535,391 GlaxoSmithKline Plc ....................... 71,500 1,445,371 InterContinental Hotels Group Plc (a) .......................... 126,864 901,682 Lloyds TSB Group Plc ...................... 64,000 455,143 Mitchells & Butlers Plc (a) ............... 26,864 103,793 Persimmon Plc ............................. 68,131 537,168 Royal & Sun Alliance Insurance Group Plc .................... 302,850 694,556 Safeway Plc ............................... 303,000 1,289,634 Vodafone Group Plc ........................ 1,109,600 2,173,360 Whitbread Plc ............................. 94,000 1,053,427 ---------- 10,206,285 ---------- Total Common Stocks (cost $61,211,564) ..................... 68,190,953 ---------- 2 AllianceBernstein Variable Products Series Fund ================================================================================ Principal Amount Company (000) U.S. $ Value -------------------------------------------------------------------------------- SHORT-TERM INVESTMENT-9.7% State Street Euro Dollar 0.50%, 7/01/03 (cost $7,565,000) ...................... $ 7,565 $ 7,565,000 ----------- TOTAL INVESTMENTS-96.9% (cost $68,776,564) ..................... 75,755,953 Other assets less liabilities-3.1% ....................... 2,438,329 ----------- NET ASSETS-100% ........................... $78,194,282 =========== FINANCIAL FUTURES CONTRACTS PURCHASED(b) (See Note D)
Value at Number of Expiration Original June 30, Unrealized Type Contracts Month Value 2003 Depreciation -------------- ----------- ----------- ----------- ----------- ------------ EURO STOXX 50 122 Sep 2003 $ 3,488,134 $ 3,405,822 $ (82,312) GBP FTSE 100 INDEX 50 Sep 2003 3,452,283 3,317,372 (134,911) ----------- ----------- ----------- $ 6,940,417 $ 6,723,194 $ (217,223) =========== =========== ===========
-------------------------------------------------------------------------------- (a) Non-income producing security. (b) A portion of the foreign cash (in the amount of U.S. $665,591) included in the statement of assets and liabilities has been segregated as collateral for the futures transactions outstanding at June 30, 2003. Glossary of Terms: ADR - American Depositary Receipt GDR - Global Depositary Receipt See Notes to Financial Statements. 3 INTERNATIONAL VALUE PORTFOLIO STATEMENT OF ASSETS AND LIABILITIES June 30, 2003 (unaudited) AllianceBernstein Variable Products Series Fund ================================================================================ ASSETS Investments in securities, at value (cost $68,776,564) ...................... $ 75,755,953 Cash ........................................................................ 666 Foreign cash, at value (cost $2,239,388) .................................... 2,236,708 Dividends and interest receivable ........................................... 236,952 Receivable for investment securities sold ................................... 164,657 ------------ Total assets ................................................................ 78,394,936 ------------ LIABILITIES Payable for investment securities purchased ................................. 95,366 Advisory fee payable ........................................................ 13,064 Payable for variation margin on futures contracts ........................... 42,557 Distribution fee payable .................................................... 10,521 Accrued expenses ............................................................ 39,146 ------------ Total liabilities ........................................................... 200,654 ------------ NET ASSETS ..................................................................... $ 78,194,282 ============ COMPOSITION OF NET ASSETS Capital stock, at par ....................................................... $ 7,272 Additional paid-in capital .................................................. 70,639,907 Undistributed net investment income ......................................... 782,747 Accumulated net realized gain on investment and foreign currency transactions 744 Net unrealized appreciation of investments and foreign currency denominated assets and liabilities .................................................... 6,763,612 ------------ $ 78,194,282 ============ Class A Shares Net assets .................................................................. $ 24,642,206 ============ Shares of capital stock outstanding ......................................... 2,287,269 ============ Net asset value per share ................................................... $ 10.77 ============ Class B Shares Net assets .................................................................. $ 53,552,076 ============ Shares of capital stock outstanding ......................................... 4,985,196 ============ Net asset value per share ................................................... $ 10.74 ============
-------------------------------------------------------------------------------- See Notes to Financial Statements. 4 INTERNATIONAL VALUE PORTFOLIO STATEMENT OF OPERATIONS Six Months Ended June 30, 2003 (unaudited) AllianceBernstein Variable Products Series Fund ================================================================================ INVESTMENT INCOME Dividends (net of foreign taxes withheld of $147,142) ....................... $ 1,167,596 Interest .................................................................... 15,739 ------------ Total investment income ..................................................... 1,183,335 ------------ EXPENSES Advisory fee ................................................................ 285,266 Distribution fee--Class B ................................................... 45,424 Custodian ................................................................... 81,742 Audit and legal ............................................................. 43,913 Administrative .............................................................. 37,500 Printing .................................................................... 12,995 Transfer agency ............................................................. 474 Directors' fees and expenses ................................................ 289 Miscellaneous ............................................................... 10,525 ------------ Total expenses .............................................................. 518,128 Less: expenses waived and reimbursed (see Note B) ........................... (130,387) ------------ Net expenses ................................................................ 387,741 ------------ Net investment income ....................................................... 795,594 ------------ REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENT AND FOREIGN CURRENCY TRANSACTIONS Net realized gain (loss) on: Investment transactions ................................................... (183,047) Futures ................................................................... 498,648 Foreign currency transactions ............................................. 95,645 Net change in unrealized appreciation/depreciation of: Investments ............................................................... 8,513,723 Futures ................................................................... (179,188) Foreign currency denominated assets and liabilities ....................... (7,226) ------------ Net gain on investment and foreign currency transactions .................... 8,738,555 ------------ NET INCREASE IN NET ASSETS FROM OPERATIONS ..................................... $ 9,534,149 ============
-------------------------------------------------------------------------------- See Notes to Financial Statements. 5 INTERNATIONAL VALUE PORTFOLIO STATEMENT OF CHANGES IN NET ASSETS AllianceBernstein Variable Products Series Fund ================================================================================
Six Months Ended Year Ended June 30, 2003 December 31, (unaudited) 2002 ================ ================ INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS Net investment income .................................................. $ 795,594 $ 226,607 Net realized gain (loss) on investment and foreign currency transactions 411,246 (366,274) Net change in unrealized appreciation/depreciation of investments and foreign currency denominated assets and liabilities .................. 8,327,309 (1,762,087) ---------------- ---------------- Net increase (decrease) in net assets from operations .................. 9,534,149 (1,901,754) DIVIDENDS TO SHAREHOLDERS FROM Net investment income Class A .............................................................. (88,130) (12,481) Class B .............................................................. (155,555) (11,716) CAPITAL STOCK TRANSACTIONS Net increase ........................................................... 28,379,560 36,708,436 ---------------- ---------------- Total increase ......................................................... 37,670,024 34,782,485 NET ASSETS Beginning of period .................................................... 40,524,258 5,741,773 ---------------- ---------------- End of period (including undistributed net investment income of $230,838 at December 31, 2002) ....................................... $ 78,194,282 $ 40,524,258 ================ ================
-------------------------------------------------------------------------------- See Notes to Financial Statements. 6 INTERNATIONAL VALUE PORTFOLIO NOTES TO FINANCIAL STATEMENTS June 30, 2003 (unaudited) AllianceBernstein Variable Products Series Fund ================================================================================ NOTE A: Significant Accounting Policies The AllianceBernstein International Value Portfolio (the "Portfolio") is a series of AllianceBernstein Variable Products Series Fund, Inc. (the "Fund"), formerly Alliance Variable Products Series Fund, Inc. The Portfolio's investment objective is to seek long-term growth of capital. The Portfolio commenced operations on May 10, 2001. The Fund was incorporated in the State of Maryland on November 17, 1987, as an open-end series investment company. The Fund offers twenty 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. Additional information about some of the items discussed in these Notes to Financial Statements is contained in the Fund's Statement of Additional Information, which is available upon request. The following is a summary of significant accounting policies followed by the Portfolio. 1. Security Valuation In accordance with Pricing Policies adopted by the Board of Directors of the Fund (the "Pricing Policies") and applicable law, portfolio securities are valued at current market value or at fair value. The Board of Directors has delegated to the Adviser, subject to the Board's continuing oversight, certain responsibilities with respect to the implementation of the Pricing Policies. Pursuant to the Pricing Policies, securities for which market quotations are readily available are valued at their current market value. In general, the market value of these securities is determined as follows: Securities listed on a national securities exchange or on a foreign securities exchange are valued at the last sale price at the close of the exchange or foreign securities exchange. If there has been no sale on such day, the securities are valued at the mean of the closing bid and asked prices on such day. If no bid or asked prices are quoted on such day, then the security is valued in good faith at fair value in accordance with the Pricing Policies. Securities listed on more than one exchange are valued by reference to the principal exchange on which the securities are traded; securities not listed on an exchange but traded on The Nasdaq Stock Market, Inc. ("NASDAQ") are valued in accordance with the NASDAQ Official Closing Price; listed put or call options are valued at the last sale price. If there has been no sale on that day, such securities will be valued at the closing bid prices on that day; open futures contracts and options thereon are valued using the closing settlement price or, in the absence of such a price, the most recent quoted bid price. If there are no quotations available for the day of valuations, the last available closing settlement price is used; securities traded in the over-the-counter market, (but excluding securities traded on NASDAQ) are valued at the mean of the current bid and asked prices as reported by the National Quotation Bureau or other comparable sources; U.S. Government securities and other debt instruments having 60 days or less remaining until maturity are valued at amortized cost if their original maturity was 60 days or less, or by amortizing their fair value as of the 61st day prior to maturity if their original term to maturity exceeded 60 days; fixed-income securities, including mortgage backed and asset backed securities, may be valued on the basis of prices provided by a pricing service or at a price obtained from one or more of the major broker/dealers. In cases where broker/dealer quotes are obtained, the Pricing Policies provide that the Adviser may establish procedures whereby changes in market yields or spreads are used to adjust, on a daily basis, a recently obtained quoted price on a security; and OTC and other derivatives are valued on the basis of a quoted bid price or spread from a major broker/dealer in such security. Securities for which market quotations are not readily available are valued at fair value in accordance with the Pricing Policies. 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 prices of such currencies against the U.S. dollar. 7 INTERNATIONAL VALUE PORTFOLIO NOTES TO FINANCIAL STATEMENTS (continued) AllianceBernstein Variable Products Series Fund ================================================================================ Purchases and sales of portfolio securities are translated into U.S. dollars at the rates of exchange prevailing when such securities were acquired or sold. Income and expenses are translated into U.S. dollars at rates of exchange prevailing when accrued. Net realized gain or loss on foreign currency transactions represents foreign exchange gains and losses from sales and maturities of foreign fixed income investments, foreign currency exchange contracts, holding of foreign currencies, currency gains or losses realized between the trade and settlement dates on foreign investment transactions, and the difference between the amounts of dividends, interest and foreign withholding taxes 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. Investment gains and losses are determined on the identified cost basis. The Portfolio amortizes premiums and accretes discounts as adjustments to interest income. 5. Income and Expenses Expenses attributable to a single portfolio are charged to that portfolio. Expenses of the Fund are charged to each portfolio in proportion to net assets. All income earned and expenses incurred by a portfolio with multi-class shares outstanding are borne on a pro-rata basis by each outstanding class of shares, based on the proportionate interest in the portfolio represented by the net assets of such class, except that the portfolio's Class B shares bear the distribution fees. 6. 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. Such fee is accrued daily and paid monthly. 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 .95% and 1.20% of the average daily net assets for Class A and Class B shares, respectively. 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 1.20% and 1.45% of the average daily net assets for Class A and Class B shares, respectively. Any expense waivers or reimbursements are accrued daily and paid monthly. For the six months ended June 30, 2003, the Adviser waived fees in the amount of $92,887. Pursuant to the terms of the investment advisory agreement, the Portfolio has agreed to reimburse the Adviser for the cost of providing the Portfolio with certain legal and accounting services. Because of the Adviser's agreement to limit total operating expenses as described above, the Adviser waived reimbursement for such services in the amount of $37,500 for the six months ended June 30, 2003. Brokerage commissions paid on investment transactions for the six months ended June 30, 2003, amounted to $55,703, of which $4,523 was paid to Sanford C. Bernstein & Co. LLC, an affiliate of the Adviser. 8 AllianceBernstein Variable Products Series Fund ================================================================================ The Portfolio compensates Alliance Global Investor Services, Inc., a wholly-owned subsidiary of the Adviser, under a Transfer Agency Agreement for providing personnel and facilities to perform transfer agency services for the Portfolio. Such compensation amounted to $474 for the six months ended June 30, 2003. NOTE C: Distribution Plan The Portfolio has adopted a Distribution Plan (the "Plan") for Class B shares pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the Plan, the Portfolio pays distribution and servicing fees to AllianceBernstein Investment Research and Management, Inc., (the "Distributor"), formerly Alliance Fund Distributors, Inc., a wholly-owned subsidiary of the Adviser, at an annual rate of up to .50 of 1% 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 limits payments under the Plan to .25 of 1% 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 Class B 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 Securities and Exchange 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. NOTE D: Investment Transactions Purchases and sales of investment securities (excluding short-term investments) for the period ended June 30, 2003, were as follows: Purchases Sales =========== =========== Investment securities ........................ $27,299,756 $ 4,825,133 U.S. government securities ................... -0- -0- The cost of investments for federal income tax purposes was substantially the same as the cost for financial reporting purposes. Accordingly, gross unrealized appreciation and unrealized depreciation (excluding foreign currency transactions) are as follows: Gross unrealized appreciation .......................... $ 8,637,503 Gross unrealized depreciation .......................... (1,658,114) ----------- Net unrealized appreciation ............................ $ 6,979,389 =========== 1. Financial Futures Contracts The Portfolio may buy or sell financial futures contracts for the purpose of hedging its portfolio against adverse affects of anticipated movements in the market. The Portfolio bears the market risk that arises from changes in the value of these financial instruments and the imperfect correlation between movements in the price of the futures contracts and movements in the price of the securities hedged or used for cover. At the time the Portfolio enters into a futures contract, the Portfolio deposits and maintains as collateral an initial margin as required by the exchange on which the transaction is effected. Pursuant to the contract, the Portfolio agrees to receive from or pay to the broker an amount of cash equal to the daily fluctuation in the value of the contract. Such receipts or payments are known as variation margin and are recorded by the Portfolio as unrealized gains or losses. Risks may arise from the potential inability of a counterparty to meet the terms of a contract. When the contract is closed, the Portfolio records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the time it was closed. 9 INTERNATIONAL VALUE PORTFOLIO NOTES TO FINANCIAL STATEMENTS (continued) AllianceBernstein Variable Products Series Fund ================================================================================ 2. Forward Exchange Currency Contracts The Portfolio may enter into forward exchange currency contracts in order to hedge its exposure to changes in foreign currency exchange rates on its 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 on a future date at a negotiated forward rate. The gain or loss arising from the difference between the original contracts and the closing of such contracts would be included in net realized gain or loss on foreign currency transactions. Fluctuations in the value of open forward exchange currency contracts are recorded for financial reporting purposes as net unrealized appreciation or depreciation 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 a value at least 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. 3. Option Transactions For hedging and investment purposes, the Portfolio may purchase and write (sell) put and call options on U.S. and foreign government securities and foreign currencies that are traded on U.S. and foreign 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 written options which expire unexercised are recorded by the Portfolio on the expiration date as realized gains from options written. 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. If a put option is exercised, the premium received reduces the cost basis of the security or currency purchased by the Portfolio. In writing an option, the Portfolio bears the market risk of an unfavorable change in the price of the security or currency underlying the written option. Exercise of an option written by the Portfolio could result in the Portfolio selling or buying a security or currency at a price different from the current market value. NOTE E: Distributions to Shareholders The tax character of distributions to be paid for the year ending December 31, 2003 will be determined at the end of the current fiscal year. The tax character of distributions paid during the fiscal years ended December 31, 2002 and December 31, 2001 were as follows: 2002 2001 ======= ======= Distributions paid from: Ordinary income ..................................... $24,197 $ -0- ------- ------- Total distributions paid ............................... $24,197 $ -0- ======= ======= 10 AllianceBernstein Variable Products Series Fund ================================================================================ As of December 31, 2002, the components of accumulated earnings/(deficit) on a tax basis were as follows: Undistributed ordinary income .......................... $ 230,659 Accumulated capital and other losses ................... (386,094)(a) Unrealized appreciation/(depreciation) ................. (1,587,926)(b) ----------- Total accumulated earnings/(deficit) ................... $(1,743,361) =========== (a) On December 31, 2002, the Portfolio had a net capital loss carryforward of $164,056 of which $4,117 will expire in the year 2009 and $159,939 will expire in the year 2010. 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 year ended December 31, 2002, the Portfolio deferred to January 1, 2003, post October capital losses of $222,038. (b) The difference between book-basis and tax-basis unrealized appreciation/(depreciation) is attributable primarily to the tax deferral of losses on wash sales and the realization for tax purposes of unrealized gains/losses on certain derivative instruments. NOTE F: 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 Six Months Ended Year Ended Ended Year Ended June 30, 2003 December 31, June 30, 2003 December 31, (unaudited) 2002 (unaudited) 2002 ============= ============= ============= ============= Class A Shares sold .................... 1,440,234 2,153,269 $ 13,931,628 $ 20,639,995 Shares issued in reinvestment of dividends ................... 8,034 1,136 88,130 12,481 Shares redeemed ................ (699,998) (1,011,732) (6,782,856) (9,235,236) ------------- ------------- ------------- ------------- Net increase ................... 748,270 1,142,673 $ 7,236,902 $ 11,417,240 ============= ============= ============= ============= Class B Shares sold .................... 5,358,982 4,278,977 $ 51,267,276 $ 40,702,331 Shares issued in reinvestment of dividends ................... 14,219 1,068 155,555 11,717 Shares redeemed ................ (3,189,481) (1,663,844) (30,280,173) (15,422,852) ------------- ------------- ------------- ------------- Net increase ................... 2,183,720 2,616,201 $ 21,142,658 $ 25,291,196 ============= ============= ============= =============
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: Joint Credit Facility 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, 2003. 11 INTERNATIONAL VALUE PORTFOLIO FINANCIAL HIGHLIGHTS AllianceBernstein Variable Products Series Fund ================================================================================ Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
---------------------------------------------------- CLASS A ---------------------------------------------------- Six Months Year May 10, Ended Ended 2001(a) to June 30, 2003 December 31, December 31, (unaudited) 2002 2001 ============= ============= ============= Net asset value, beginning of period ....................... $ 9.35 $ 9.87 $ 10.00 ------------- ------------- ------------- Income From Investment Operations Net investment income (b)(c) ............................... .14 .13 .04 Net realized and unrealized gain (loss) on investment and foreign currency transactions ........................... 1.32 (.64) (.17) ------------- ------------- ------------- Net increase (decrease) in net asset value from operations . 1.46 (.51) (.13) ------------- ------------- ------------- Less: Dividends Dividends from net investment income ....................... (.04) (.01) -0- ------------- ------------- ------------- Total dividends ............................................ (.04) (.01) -0- ------------- ------------- ------------- Net asset value, end of period ............................. $ 10.77 $ 9.35 $ 9.87 ============= ============= ============= Total Return Total investment return based on net asset value (d) ....... 15.60% (5.15)% (1.30)% Ratios/Supplemental Data Net assets, end of period (000's omitted) .................. $ 24,642 $ 14,391 $ 3,913 Ratio to average net assets of: Expenses, net of waivers and reimbursements ............. 1.20%(e) 1.17% .95%(e) Expenses, before waivers and reimbursements ............. 1.62%(e) 2.20% 8.41%(e) Net investment income (c) ............................... 2.78%(e) 1.30% .59%(e) Portfolio turnover rate .................................... 9% 19% 22%
-------------------------------------------------------------------------------- See footnote summary on page 13. 12 AllianceBernstein Variable Products Series Fund ================================================================================ Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
---------------------------------------------------- CLASS B ---------------------------------------------------- Six Months Year August 15, Ended Ended 2001(f) to June 30, 2003 December 31, December 31, (unaudited) 2002 2001 ============= ============= ============= Net asset value, beginning of period ...................... $ 9.33 $ 9.87 $ 10.25 ------------- ------------- ------------- Income From Investment Operations Net investment income (b)(c) .............................. .13 .08 .01 Net realized and unrealized gain (loss) on investment and foreign currency transactions .......................... 1.31 (.61) (.39) ------------- ------------- ------------- Net increase (decrease) in net asset value from operations 1.44 (.53) (.38) ------------- ------------- ------------- Less: Dividends Dividends from net investment income ...................... (.03) (.01) -0- ------------- ------------- ------------- Total dividends ........................................... (.03) (.01) -0- ------------- ------------- ------------- Net asset value, end of period ............................ $ 10.74 $ 9.33 $ 9.87 ============= ============= ============= Total Return Total investment return based on net asset value (d) ...... 15.46% (5.36)% (3.71)% Ratios/Supplemental Data Net assets, end of period (000's omitted) ................. $ 53,552 $ 26,133 $ 1,828 Ratio to average net assets of: Expenses, net of waivers and reimbursements ............ 1.45%(e) 1.44% 1.20%(e) Expenses, before waivers and reimbursements ............ 1.93%(e) 2.47% 9.31%(e) Net investment income (c) .............................. 2.80%(e) .86% .17%(e) Portfolio turnover rate ................................... 9% 19% 22%
-------------------------------------------------------------------------------- (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 Return does not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares. Total investment return calculated for a period of less than one year is not annualized. (e) Annualized. (f) Commencement of distribution. 13 INTERNATIONAL VALUE PORTFOLIO AllianceBernstein 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 Lewis A. Sanders, Senior Vice President Andrew S. Adelson, Vice President Andrew Aran, Vice President Bruce K. Aronow, Vice President Edward D. Baker III, Vice President Thomas J. Bardong, Vice President Matthew D.W. Bloom, Vice President Russell Brody, Vice President Frank V. Caruso, Vice President John F. Chiodi, Vice President Paul J. DeNoon, Vice President Joseph C. Dona, Vice President Marilyn G. Fedak, Vice President Thomas Kamp, Vice President Sean Kelleher, Vice President David A. Kruth, Vice President Alan E. Levi, Vice President Michael Levy, Vice President Gerald T. Malone, Vice President Michael Mon, Vice President Ranji H. Nagaswami, Vice President Daniel Nordby, Vice President Jimmy K. Pang, Vice President Raymond J. Papera, Vice President Joseph G. Paul, Vice President Douglas J. Peebles, Vice President Jeffrey S. Phlegar, Vice President Daniel G. Pine, Vice President Michael J. Reilly, Vice President Paul C. Rissman, Vice President Ivan Rudolph-Shabinsky, 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 and Chief Financial Officer Thomas R. Manley, Controller CUSTODIAN State Street Bank and Trust Company 225 Franklin Street Boston, MA 02110 DISTRIBUTOR AllianceBernstein Investment Research and Management, 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 786003 San Antonio, TX 78278-6003 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.) ITEM 2. CODE OF ETHICS. Not applicable when filing a Semi-Annual report to shareholders. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. Not applicable when filing a Semi-Annual report to shareholders. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Not applicable when filing a Semi-Annual report to shareholders. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. Not applicable to the registrant. ITEM 6. [RESERVED] ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable to the registrant. ITEM 8. [RESERVED] ITEM 9. CONTROLS AND PROCEDURES. (a) The registrant?s principal executive officer and principal financial officer have concluded that the registrant?s disclosure controls and procedures (as defined in Rule 30a-2(c) under the Investment Company Act of 1940, as amended) are effective at the reasonable assurance level based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of this document. (b) There were no significant changes in the registrant?s internal controls that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. ITEM 10. EXHIBITS. The following exhibits are attached to this Form N-CSR: EXHIBIT NO. DESCRIPTION OF EXHIBIT 10 (b) (1) Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 10 (b) (2) Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 10 (c) Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. (Registrant): AllianceBernstein Variable Products Series Fund, Inc. By: /s/John D. Carifa ------------------------------- John D. Carifa President Date: August 22, 2003 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By: /s/John D. Carifa ---------------------------------- John D. Carifa President Date: August 22, 2003 By: /s/Mark D. Gersten ---------------------------------- Mark D. Gersten Treasurer and Chief Financial Officer Date: August 22, 2003