ALLIANCE TREASURY RESERVES
ALLIANCECAPITAL
ANNUAL REPORT
JUNE 30, 1995
LETTER TO SHAREHOLDERS ALLIANCE TREASURY RESERVES
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August 3, 1995
Dear Shareholder:
On December 31, 1994, James P. Syrett retired as President of Alliance Cash
Management. His seven years as President were very productive and saw Alliance
become the dominant provider of money funds sold through regional brokerage
firms. On January 1, 1995, it was with great pride that I assumed Jim's
responsibilities, and I look forward to maintaining the high standard of
excellence to which you have grown accustomed.
Money fund assets continue to grow despite volatility in the stock and bond
markets. ATR assets have grown significantly to over $500 million in the past
year, in large part because of the effects of T+3-the accelerated settlement of
most security transactions.
Weakness in the fixed income markets has meant significantly higher yields for
money fund investors. The 30 day net yield for Alliance Treasury Reserves as of
June 30, 1995 was 5.06% vs. 3.58% for the same period ending June 30, 1994.
Alliance has once again demonstrated its dependability. When Orange County
filed for bankruptcy protection last year, Alliance took action to protect the
$1.00 per share net asset value of the two Alliance tax-free money market funds
holding positions in Orange County securities: Alliance Municipal Trust -
General Portfolio and ACM Institutional Reserves - Tax Free Portfolio. Alliance
arranged for the issuance of a letter of credit from an unaffiliated bank
assuring the payment in full of principal and interest due to the Funds, to the
extent Orange County defaulted on the payments. Thereafter, on July 19, 1995,
in view of continuing uncertainty regarding Orange County's performance of its
financial obligations, Alliance purchased approximately $21 million of Orange
County securities from the two Alliance money market funds, thus eliminating
all Orange County securities from our Alliance money fund portfolios.
Speaking for myself and the entire division, we at Alliance look forward to
serving you with continued diligence in the future.
Very truly yours,
Ronald M. Whitehill
President
1
STATEMENT OF NET ASSETS
JUNE 30, 1995 ALLIANCE TREASURY RESERVES
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PRINCIPAL
AMOUNT
(000) SECURITY+ YIELD VALUE
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U.S. GOVERNMENT OBLIGATIONS-72.6%
U.S. TREASURY NOTES-47.1%
$ 35,000 3.88%, 8/31/95 5.59% $ 34,892,255
83,000 4.25%, 7/31/95 5.48 82,908,562
30,000 4.25%, 11/30/95 6.09 29,767,518
12,000 4.63%, 8/15/95 5.87 11,980,498
13,000 5.50%, 4/30/96 6.09 12,938,345
60,000 8.50%, 8/15/95 5.53 60,205,688
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232,692,866
U.S. TREASURY BILLS-25.5%
26,000 7/27/95 5.45 25,897,661
30,000 9/21/95 5.48 29,625,533
12,000 8/24/95 5.50 11,901,000
20,000 9/14/95 5.55 19,768,750
4,000 8/24/95 5.67 3,965,980
10,000 11/16/95 5.67 9,782,650
10,000 8/17/95 5.69 9,925,779
15,000 8/24/95 5.72 14,871,413
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125,738,766
Total U.S. Government Obligations
(amortized cost $358,431,632) 358,431,632
REPURCHASE AGREEMENTS-25.9%
BANKERS TRUST REPO
22,000 5.90%, dated 6/29/95, due 7/06/95
in the amount of $22,025,239
(cost $22,000,000; collateralized
by U.S. Treasury Note, 6.125%,
7/31/96, value $22,637,391) 5.90 22,000,000
GOLDMAN SACHS GROUP
21,000 5.97%, dated 6/23/95, due 7/07/95
in the amount of $21,048,755
(cost $21,000,000; collateralized
by $16,670,000 U.S. Treasury Bond,
10.00%, 5/15/10, value $21,204,761
and $260,000 U.S. Treasury Bond,
7.25%, 5/15/16, value $278,241) 5.97 21,000,000
MERRILL LYNCH GOVERNMENT
21,000 SECURITIES, INC.
5.90, dated 6/28/95, due 7/05/95
in the amount of $21,024,092
(cost $21,000,000; collateralized
by $21,235,000 U.S. Treasury Note,
5.75%, 10/31/97, value $21,377,673) 5.90 21,000,000
MORGAN J.P. REPO
22,000 5.90%, dated 6/29/95, due 7/06/95
in the amount of $22,025,239
(cost $22,000,000; collateralized
by $21,947,000 U.S. Treasury Note,
6.75%, 5/31/97, value $22,411,350) 5.90 22,000,000
MORGAN STANLEY GROUP, INC.
21,000 5.92%, dated 6/21/95, due
7/12/95 in the amount of
$21,072,500 (cost $21,000,000;
collateralized by $19,410,000
U.S. Treasury Bond, 7.50%,
11/15/16, value $21,332,803
and $110,000 U.S. Treasury Bond,
8.75%, 11/15/08, value $127,806) 5.92 21,000,000
STATE STREET REPO
21,000 5.80%, dated 6/28/95, due 7/05/95
in the amount of $21,023,683
(cost $21,000,000; collateralized
by $20,635,000 U.S. Treasury Note,
6.50%, 8/15/97, value $21,399,585) 5.80 21,000,000
TOTALREPURCHASE AGREEMENTS
(amortized cost $128,000,000) 128,000,000
TOTAL INVESTMENTS-98.5%
(amortized cost $486,431,632) 486,431,632
Other assets less liabilities-1.5% 7,270,251
NET ASSETS-100%
(offering and redemption price of $1.00
per share; 493,706,430 shares outstanding) $493,701,883
+ All securities either mature or their interest rate changes in one year or
less.
See notes to financial statements.
2
STATEMENT OF OPERATIONS
YEAR ENDED JUNE 30, 1995 ALLIANCE TREASURY RESERVES
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INVESTMENT INCOME
Interest $15,131,559
EXPENSES
Advisory fee (Note B) $1,363,949
Distribution assistance and administrative
service (Note C) 853,413
Transfer agency 275,207
Registration expense 216,640
Custodian fees 57,371
Printing 57,369
Audit and legal fees 22,073
Trustees' fees 11,777
Amortization of organization expense 9,119
Miscellaneous 5,347
Total expenses 2,872,265
Less: expense reimbursement and fee waiver (1,001,602)
1,870,663
Net investment income 13,260,896
REALIZED LOSS ON INVESTMENTS
Net realized loss on investments (1,959)
NET INCREASE IN NET ASSETS FROM OPERATIONS $13,258,937
See notes to financial statements.
3
STATEMENT OF CHANGES IN NET ASSETS ALLIANCE TREASURY RESERVES
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SEP. 1,1993*
YEAR ENDED TO
JUNE 30,1995 JUNE 30,1994
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INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment income $ 13,260,896 $ 824,423
Net realized loss on investments (1,959) (2,588)
Net increase in net assets from operations 13,258,937 821,835
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income (13,260,896) (824,423)
TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST
Net increase 412,984,016 80,722,414
Total increase 412,982,057 80,719,826
NET ASSETS
Beginning of year 80,719,826 -0-
End of year $493,701,883 $80,719,826
* Commencement of operations.
See notes to financial statements.
4
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1995 ALLIANCE TREASURY RESERVES
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NOTE A: SIGNIFICANT ACCOUNTING POLICIES
Alliance Government Reserves (the 'Trust') is an open-end diversified
investment company registered under the Investment Company Act of 1940. The
Trust consists of two portfolios: Alliance Government Reserves and Alliance
Treasury Reserves (the 'Portfolio'). Each portfolio is considered to be a
separate entity for financial reporting and tax purposes. The following is a
summary of significant accounting policies followed by the Fund.
1. VALUATION OF SECURITIES
Securities in which the Portfolio invests are traded primarily in the
over-the-counter market and are valued at amortized cost, under which method a
portfolio instrument is valued at cost and any premium or discount is amortized
on a constant basis to maturity.
2. ORGANIZATION EXPENSES
The organization expenses of the Portfolio are being amortized against income
on a straight-line basis through September, 1998.
3. TAXES
It is the Portfolio's policy to comply with the require-ments 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 applicable,
to its shareholders. Therefore, no provisions for federal income or excise
taxes are required.
4. DIVIDENDS
The Portfolio declares dividends daily and automatically reinvests such
dividends in additional shares at net asset value. Net realized capital gains
on investments, if any, are expected to be distributed near year end.
5. GENERAL
Interest income is accrued as earned. Security transactions are recorded on a
trade date basis. Security gains and losses are determined on the identified
cost basis. It is the Portfolio's policy to take possession of securities as
collateral under repurchase agreements and to determine on a daily basis that
the value of such securities are sufficient to cover the value of the
repurchase agreements.
NOTE B: ADVISORY FEE AND TRANSACTIONS WITH AN AFFILIATE OF THE ADVISER
The Portfolio pays its Adviser, Alliance Capital Management L.P., an advisory
fee at the annual rate of .50 of 1% on the first $1.25 billion of average daily
net assets; .49 of 1% on the next $.25 billion; .48 of 1% on the next $.25
billion; .47 of 1% on the next $.25 billion; .46 of 1% on the next $1 billion;
and .45 of 1% in excess of $3 billion.
The Adviser has agreed to reimburse the Portfolio to the extent that its
aggregate expenses (excluding taxes, brokerage, interest and, where permitted,
extraordinary expenses) exceed 1% of its averagedaily net assets for any fiscal
year. The Adviser also voluntarily agreed to reimburse the Portfolio from July
1, 1994 to July 14, 1994 for expenses exceeding .40 of 1% of its average daily
net assets, from July 15, 1994 to March 8, 1995 for expenses exceeding .60 of
1% of its average daily net assets, from March 9, 1995 to March 26, 1995 for
expenses exceeding .70 of 1% of its average daily net assets and from March 27,
1995 to June 30, 1995 for expenses exceeding .80 of 1% of its average daily net
assets. For the year ended June 30, 1995, the reimbursement amounted to
$319,627. The Portfolio compensates Alliance Fund Services, Inc. (a
wholly-owned subsidiary of the Adviser) for providing personnel and facilities
to perform transfer agency services for the Portfolio. Such compensation
amounted to $207,449 for the year ended June 30, 1995.
5
NOTES TO FINANCIAL STATEMENTS (CONTINUED) ALLIANCE TREASURY RESERVES
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NOTE C: DISTRIBUTION ASSISTANCE AND ADMINISTRATIVE SERVICES PLAN
Under this Plan, the Portfolio pays the Adviser a distribution fee at the
annual rate of up to .25% of 1% of the average daily value of the Portfolio's
net assets. The Plan provides that the Adviser will use such payments in their
entirety for distribution assistance and promotional activities. For the year
ended June 30, 1995, the Adviser waived all payments under the Plan. In
addition, the Portfolio may reimburse certain broker-dealers for administrative
costs incurred in connection with providing shareholder services, accounting
and bookkeeping, and legal and compliance support. For the year ended June 30,
1995, such payments by the Portfolio amounted to $171,438 of which $119,000 was
paid to the Adviser.
NOTE D: INVESTMENT TRANSACTIONS
At June 30, 1995,the cost of securities for federal income tax purposes was the
same as the cost for financial reporting purposes. At June 30, 1995, the
Portfolio had a capital loss carryforward of $4,547 of which $2,588 expires in
2002 and $1,959 expires in 2003.
NOTE E: TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST
An unlimited number of shares ($.001 par value) are authorized. At June 30,
1995, capital paid-in aggregated $493,706,430. Transactions, all at $1.00 per
share, were as follows:
SEP. 1,1993(A)
YEAR ENDED THROUGH
JUNE 30,1995 JUNE 30,1994
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Shares sold 2,037,450,750 232,199,197
Shares issued on reinvestments of dividends 13,260,896 820,489
Shares redeemed (1,637,727,630) (152,297,272)
Net increase 412,984,016 80,722,414
6
ALLIANCE TREASURY RESERVES
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NOTE F: FINANCIAL HIGHLIGHTS
Selected data for a share outstanding throughout each period.
SEPTEMBER 1,
1993(A)
YEAR ENDED THROUGH
JUNE 30,1995 JUNE 30,1994
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Net asset value, beginning of year $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income .0460 .0260
LESS: DISTRIBUTIONS
Dividends from net investment income (.0460) (.0260)
Net asset value, end of year $ 1.00 $ 1.00
TOTAL RETURNS
Total investment return based on: net asset value (b) 4.71% 3.18%(c)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (in thousands) $493,702 $80,720
Ratio to average net assets of:
Expenses, net of waivers and reimbursements .69% .28%(c)
Expenses, before waivers and reimbursements 1.05% 1.28%(c)
Net investment income 4.86% 3.24%(c)
(a) Commencement of operations.
(b) Total investment return in 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 in the last day of the period.
(c) Annualized.
7
INDEPENDENT AUDITOR'S REPORT ALLIANCE TREASURY RESERVES
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TO THE BOARD OF TRUSTEES AND SHAREHOLDERS
ALLIANCE TREASURY RESERVES
We have audited the accompanying statement of net assets of Alliance Treasury
Reserves as of June 30, 1995 and the related statements of operations, changes
in net assets, and financial highlights for the periods indicated in the
accompanying financial statements. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of June
30, 1995 by correspondence with the custodian.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Alliance Treasury Reserves as of June 30, 1995, and the results of its
operations, changes in its net assets, and its financial highlights for the
periods indicated, in conformity with generally accepted accounting principles.
McGladrey &Pullen LLP
New York, New York
August 8, 1995
8
ALLIANCE TREASURY RESERVES
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TRUSTEES
DAVE H. WILLIAMS, CHAIRMAN
JOHN D. CARIFA
SAM Y. CROSS
CHARLES H.P. DUELL
WILLIAM H. FOULK, JR.
ELIZABETH J. MCCORMACK
DAVID K. STORRS
SHELBY WHITE
JOHN WINTHROP
OFFICERS
RONALD M. WHITEHILL, PRESIDENT
JOHN R. BONCZEK, SENIOR VICE PRESIDENT
KATHLEEN A. CORBET, SENIOR VICE PRESIDENT
ROBERT I. KURZWEIL, SENIOR VICE PRESIDENT
WAYNE D. LYSKI, SENIOR VICE PRESIDENT
PATRICIA NETTER, SENIOR VICE PRESIDENT
RONALD R. VALEGGIA, SENIOR VICE PRESIDENT
DREW BIEGEL, VICE PRESIDENT
JOHN F. CHIODI, JR., VICE PRESIDENT
DORIS T. CILIBERTI, VICE PRESIDENT
PAMELA F. RICHARDSON, VICE PRESIDENT
RAYMOND J. PAPERA, VICE PRESIDENT
EDMUND P. BERGAN, JR., SECRETARY
MARK D. GERSTEN, TREASURER & CHIEF FINANCIAL OFFICER
JOSEPH J. MANTINEO, CONTROLLER
CUSTODIAN
STATE STREET BANK AND TRUST COMPANY
P.O. Box 1912
Boston, MA 02105
LEGAL COUNSEL
SEWARD & KISSEL
One Battery Park Plaza
New York, NY 10004
AUDITORS
MCGLADREY & PULLEN, LLP
555 Fifth Avenue
New York, NY 10017
TRANSFER AGENT
ALLIANCE FUND SERVICES, INC.
P.O. Box 1520
Secaucus, NJ 07096-1520
DISTRIBUTOR
ALLIANCE FUND DISTRIBUTORS, INC.
1345 Avenue of the Americas
New York, NY 10105
9
ALLIANCE TREASURY RESERVES
1345 Avenue of the Americas, New York, NY 10105
Toll free 1 (800) 221-5672
YIELDS. For current recorded yield information on Alliance
Treasury Reserves, call on a touch-tone telephone toll-free
(800) 251-0539 and press the following sequence of keys:
1 # 1 # 9 0 #
For non-touch-tone telephones, call toll-free (800) 221-9513
ALLIANCECAPITAL
DISTRIBUTION OF THIS REPORT OTHER THAN TO SHAREHOLDERS MUST
BE PRECEDED OR ACCOMPANIED BY THE FUND'S CURRENT PROSPECTUS,
WHICH CONTAINS FURTHER INFORMATION ABOUT THE FUND.
R THESE REGISTERED SERVICE MARKS USED UNDER LICENSE FROM
THE OWNER, ALLIANCE CAPITAL MANAGEMENT L.P.
ALC507075
TRSAR
