ALLIANCE MONEY RESERVES
ALLIANCE CAPITAL
ANNUAL REPORT
JUNE 30, 1998
STATEMENT OF NET ASSETS
JUNE 30, 1998 ALLIANCE MONEY RESERVES
_______________________________________________________________________________
PRINCIPAL
AMOUNT
(000) SECURITY+ YIELD VALUE
- -------------------------------------------------------------------------------
COMMERCIAL PAPER-47.0%
ALLIANZ OF AMERICA FINANCE CORP.
$11,300 9/09/98 (a) 5.52% $11,178,713
19,950 9/28/98 (a) 5.54 19,676,763
8,500 8/14/98 (a) 5.58 8,442,030
ASSOCIATES CORP. OF NORTH AMERICA
10,000 9/11/98 5.51 9,889,800
13,600 8/26/98 5.56 13,482,375
BAA PLC
26,797 10/06/98 5.52 26,398,440
9,351 9/08/98 5.53 9,251,887
BANKERS TRUST NEW YORK
6,000 9/15/98 5.52 5,930,080
6,000 9/23/98 5.52 5,922,720
BANQUE CAISSE D'EPARGNE
25,000 9/11/98 5.51 24,724,500
5,000 10/14/98 5.52 4,919,500
25,000 11/30/98 5.52 24,417,333
CAISSE D'AMORTISSEMENT
3,000 7/10/98 5.60 2,995,800
COMMONWEALTH BANK OF AUSTRALIA
10,200 9/28/98 5.44 10,062,821
CREGEM NORTH AMERICA, INC.
8,000 12/28/98 5.48 7,780,800
CS FIRST BOSTON
25,000 9/22/98 5.53 24,681,257
7,000 7/29/98 5.54 6,969,838
FIRST CHICAGO FINANCIAL CORP.
5,000 9/22/98 5.51 4,936,482
50,000 9/23/98 5.51 49,357,167
GE FINANCIAL ASSURANCE HOLDINGS
15,000 9/08/98 5.52 14,841,300
GENERAL ELECTRIC CAPITAL CORP.
25,000 9/15/98 5.53 24,708,139
15,000 5.62%, 11/17/98 FRN 5.62 15,000,000
GENERAL MOTORS ACCEPTANCE CORP.
30,000 9/15/98 5.52 29,650,400
20,000 9/02/98 5.53 19,806,450
GENERALE BANK
5,000 9/04/98 5.44 4,950,889
GOVERNMENT DEVELOPMENT BANK OF
PUERTO RICO
8,000 7/22/98 5.52 7,974,240
IMI FUNDING CORP. (USA)
10,000 8/05/98 5.40 9,947,500
1,081 9/04/98 5.47 1,070,324
8,000 8/28/98 5.52 7,928,853
5,000 7/20/98 5.70 4,984,958
ING AMERICA INSURANCE HL
5,000 12/21/98 5.52 4,867,367
4,100 8/04/98 5.54 4,078,548
NORWEST CORP.
10,000 8/31/98 5.54 9,906,128
SALOMON SMITH BARNEY
10,000 8/26/98 5.52 9,914,133
22,000 9/01/98 5.52 21,790,854
10,000 9/08/98 5.52 9,894,200
5,000 8/07/98 5.60 4,971,222
SPECIAL PURPOSE ACCOUNTS RECEIVABLE
COOPERATIVE CORP.
5,000 9/02/98 (a) 5.60 4,951,000
SVENSKA HANDELSBANKEN
5,000 8/28/98 5.52 4,955,533
THAMES ASSET GLOBAL SECURITIZATION
28,532 9/15/98 (a) 5.54 28,198,302
UNI FUNDING, INC.
15,000 9/11/98 5.51 14,834,700
VATTENFALL TREASURY, INC.
17,737 8/31/98 5.52 17,571,100
Total Commercial Paper
(amortized cost $547,814,446) 547,814,446
1
STATEMENT OF NET ASSETS (CONTINUED) ALLIANCE MONEY RESERVES
_______________________________________________________________________________
PRINCIPAL
AMOUNT
(000) SECURITY+ YIELD VALUE
- -------------------------------------------------------------------------------
BANK OBLIGATIONS-13.8%
ABBEY NATIONAL
$35,000 5.54%, 2/17/99 FRN 5.60% $34,987,186
BAYERISCHE LANDESBANK
10,000 5.53%, 3/23/99 FRN 5.61 9,994,301
25,000 5.63%, 10/02/98 FRN 5.63 25,000,000
DEUTSCHE BANK
28,000 5.52%, 7/01/98 FRN 5.52 28,000,000
LASALLE NATIONAL BANK
10,000 5.60%, 9/18/98 5.60 10,000,000
10,000 5.60%, 12/10/98 5.60 10,000,000
5,000 5.62%, 12/21/98 5.62 5,000,000
ROYAL BANK OF CANADA
13,000 5.71%, 9/30/98 FRN 5.71 13,000,000
SMM TRUST
15,000 5.66%, 12/14/98 FRN (a) 5.66 15,000,000
10,000 5.69%, 12/16/98 FRN (a) 5.69 10,000,000
Total Bank Obligations
(amortized cost $160,981,487) 160,981,487
CERTIFICATES OF DEPOSIT-20.5%
BANK OF MONTREAL
19,000 5.87%, 8/31/98 5.95 18,997,031
BAYERISCHE LANDESBANK
20,000 5.53%, 2/25/99 FRN 5.61 19,989,972
BAYERISCHE VEREINSBANK
20,000 5.64%, 2/25/99 5.64 20,000,000
CANADIAN IMPERIAL BANK OF COMMERCE
20,000 5.58%, 9/23/98 5.58 20,000,000
DEUTSCHE BANK
8,000 5.67%, 2/26/99 6.02 7,998,442
10,000 5.70%, 3/05/99 5.75 9,996,758
13,000 5.95%, 10/21/98 6.33 12,998,094
DRESDNER BANK
15,000 5.51%, 1/15/99 5.67 14,985,042
HESSISCHE LANDESBANK
17,000 5.60%, 9/30/98 5.60 17,000,000
NATIONAL WESTMINSTER BANK
23,000 5.65%, 3/03/99 5.70 22,992,467
NORDEUTSCHE LANDESBANK
10,000 5.72%, 4/16/99 5.77 9,996,208
ROYAL BANK OF CANADA
5,000 5.53%, 2/12/99 5.70 4,991,870
SWISS BANK
12,000 5.66%, 3/04/99 5.71 11,996,899
TORONTO DOMINION BANK
23,000 5.58%, 9/23/98 5.58 23,000,000
25,000 5.59%, 9/30/98 5.59 25,000,000
Total Certificates of Deposit
(amortized cost $239,942,783) 239,942,783
CORPORATE OBLIGATIONS-9.8%
ALLSTATE LIFE INSURANCE FUNDING AGREEMENT
20,000 5.68%, 8/31/98 FRN (b) 5.68 20,000,000
GENERAL AMERICAN FUNDING CORP.
26,000 5.85%, 7/10/98 FRN 5.85 26,000,000
MERRILL LYNCH & CO., INC.
10,000 5.61%, 1/29/99 FRN 5.61 10,000,000
10,000 5.61%, 2/16/99 FRN 5.61 10,000,000
15,000 5.61%, 6/01/99 FRN 5.61 15,000,000
15,000 5.62%, 1/20/99 FRN 5.62 15,000,000
8,000 5.875%, 8/26/98 5.875 8,000,000
TRAVELERS LIFE FUNDING AGREEMENT
10,000 5.66%, 10/21/98 FRN (b) 5.66 10,000,000
Total Corporate Obligations
(amortized cost $114,000,000) 114,000,000
PROMISSORY NOTES-4.9%
GOLDMAN SACHS GROUP LP
27,000 5.63%, 10/13/98 (a) 5.63 27,000,000
23,000 5.66%, 11/24/98 (a) 5.66 23,000,000
7,000 5.67%, 8/07/98 (a) 5.67 7,000,000
Total Promissory Notes
(amortized cost $57,000,000) 57,000,000
2
ALLIANCE MONEY RESERVES
_______________________________________________________________________________
PRINCIPAL
AMOUNT
(000) SECURITY+ YIELD VALUE
- -------------------------------------------------------------------------------
U.S. GOVERNMENT & AGENCY
OBLIGATIONS-3.4%
FEDERAL FARM CREDIT BANK
$10,000 5.41%, 8/03/98 FRN 5.43% $ 9,999,575
FEDERAL NATIONAL MORTGAGE ASSN.
20,000 5.54%, 5/21/99 FRN 5.62 19,986,223
10,000 5.65%, 11/04/98 5.74 9,997,162
Total U.S. Government & Agency
Obligations
(amortized cost $39,982,960) 39,982,960
TOTAL INVESTMENTS-99.4%
(amortized cost $1,159,721,676) $1,159,721,676
Other assets less liabilities-0.6% 6,625,262
NET ASSETS-100%
(offering and redemption price of $1.00 per
share; 1,167,535,015 shares outstanding) $1,166,346,938
+ All securities either mature or their interest rate changes in one year or
less.
(a) Securities issued in reliance on section 4(2) or Rule 144A of the
Securities and Exchange Act of 1933. Rule 144A securities may be resold in
transactions exempt from registration, normally to qualified institutional
buyers. At June 30, 1998, these securities amounted to $154,446,808,
representing 13.2% of net assets.
(b) Funding agreements are illiquid securities subject to restrictions as to
resale. These securities amounted to $30,000,000, representing 2.6% of net
assets. (see Note A to the financial statements).
Glossary:
FRN - Floating Rate Note
See notes to financial statements.
3
STATEMENT OF OPERATIONS
YEAR ENDED JUNE 30, 1998 ALLIANCE MONEY RESERVES
_______________________________________________________________________________
INVESTMENT INCOME
Interest $65,078,547
EXPENSES
Advisory fee (Note B) $ 5,687,271
Distribution assistance and administrative
service (Note C) 4,014,104
Transfer agency (Note B) 1,056,971
Registration fees 521,303
Custodian fees 208,464
Printing 109,959
Audit and legal fees 27,109
Trustees' fees 11,916
Miscellaneous 5,883
Total expenses 642,980
Less: expense reimbursement (268,438)
Net expenses 11,374,542
Net investment income 53,704,005
REALIZED GAIN ON INVESTMENTS
Net realized gain on investment transactions 1,898
NET INCREASE IN NET ASSETS FROM OPERATIONS $53,705,903
See notes to financial statements.
4
STATEMENT OF CHANGES IN NET ASSETS ALLIANCE MONEY RESERVES
_______________________________________________________________________________
YEAR ENDED YEAR ENDED
JUNE 30, 1998 JUNE 30, 1997
-------------- --------------
INCREASE IN NET ASSETS FROM OPERATIONS
Net investment income $53,704,005 $40,995,145
Net realized gain on investment transactions 1,898 1,959
Net increase in net assets from operations 53,705,903 40,997,104
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income (53,704,005) (40,995,145)
TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST
Net increase (Note E) 155,581,838 256,174,217
Total increase 155,583,736 256,176,176
NET ASSETS
Beginning of year 1,010,763,202 754,587,026
End of year $1,166,346,938 $1,010,763,202
See notes to financial statements.
5
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1998 ALLIANCE MONEY RESERVES
_______________________________________________________________________________
NOTE A: SIGNIFICANT ACCOUNTING POLICIES
Alliance Capital 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 Capital Reserves and Alliance Money Reserves (the
"Portfolio"), each of which is considered to be a separate entity for financial
reporting and tax purposes. The Portfolio pursues its objectives by maintaining
a portfolio of high-quality money market securities all of which, at the time
of investment, have remaining maturities of 397 days or less. The financial
statements have been prepared in conformity with generally accepted accounting
principles 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. 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. Certain illiquid securities containing
unconditional par puts are also valued at amortized cost.
2. 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 its
shareholders. Therefore, no provisions for federal income or excise taxes are
required.
3. DIVIDENDS
The Portfolio declares dividends daily from net investment income 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.
4. INVESTMENT INCOME AND INVESTMENT TRANSACTIONS
Interest income is accrued as earned. Investment transactions are recorded on a
trade date basis. Realized gain (loss) from investment transactions is recorded
on the identified cost basis.
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% on the first $1.25 billion of average daily net
assets; .49% on the next $.25 billion; .48% on the next $.25 billion; .47% on
the next $.25 billion; .46% on the next $1 billion; and .45% in excess of $3
billion. The Adviser has agreed, pursuant to the advisory agreement, to
reimburse the Portfolio to the extent that its annual aggregate expenses
(excluding taxes, brokerage, interest and, where permitted, extraordinary
expenses) exceed 1% of its average daily net assets for any fiscal year. For
the year ended June 30, 1998, the reimbursement amounted to $268,438.
The Portfolio compensates Alliance Fund 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 $486,886 for the year ended June 30, 1998.
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 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, 1998, the distribution fee amounted to $2,843,635. In addition,
the Portfolio may reimburse certain broker-dealers for administrative costs
incurred in connection with providing shareholder services, and may reimburse
the Adviser for accounting and bookkeeping, and legal and compliance support.
For the year ended June 30, 1998, such payments by the Portfolio amounted to
$1,170,468, of which $137,000 was paid to the Adviser.
6
ALLIANCE MONEY RESERVES
_______________________________________________________________________________
NOTE D: INVESTMENT TRANSACTIONS
At June 30, 1998, the cost of investments for federal income tax purposes was
the same as the cost for financial reporting purposes. At June 30, 1998, the
Portfolio had a capital loss carryforward of $1,188,077, of which $570,762
expires in 1999, $72,812 expires in 2001, $64,655 expires in 2002 and $479,848
expires in the year 2003.
NOTE E: TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST
An unlimited number of shares ($.001 par value) are authorized. At June 30,
1998, capital paid-in aggregated $1,167,535,015. Transactions, all at $1.00 per
share, were as follows:
YEAR ENDED YEAR ENDED
JUNE 30, JUNE 30,
1998 1997
-------------- -------------
Shares sold 3,468,843,260 2,835,564,705
Shares issued on reinvestments of dividends 53,704,005 40,995,145
Shares redeemed (3,366,965,427) (2,620,385,633)
Net increase 155,581,838 256,174,217
7
FINANCIAL HIGHLIGHTS ALLIANCE MONEY RESERVES
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
YEAR
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
---------------------------------------------------------------
1998 1997 1996 1995 1994
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $1.00 $1.00 $1.00 $1.00 $1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a) .047 .045 .047 .045 .025
LESS: DIVIDENDS
Dividends from net investment income (.047) (.045) (.047) (.045) (.025)
Net asset value, end of year $1.00 $1.00 $1.00 $1.00 $1.00
TOTAL RETURN
Total investment return based on
net asset value (b) 4.83% 4.64% 4.81% 4.50% 2.57%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (in millions) $1,166 $1,011 $755 $2,510 $1,795
Ratios to average net assets of:
Expenses, net of waivers and
reimbursements 1.00% 1.00% 1.00% 1.00% 1.00%
Expenses, before waivers and
reimbursements 1.02% 1.06% 1.00% 1.04% 1.09%
Net investment income (a) 4.72% 4.55% 4.80% 4.53% 2.55%
</TABLE>
(a) Net of expenses reimbursed or waived by the Adviser.
(b) 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.
8
INDEPENDENT AUDITOR'S REPORT ALLIANCE MONEY RESERVES
_______________________________________________________________________________
TO THE BOARD OF TRUSTEES AND SHAREHOLDERS
ALLIANCE MONEY RESERVES PORTFOLIO
We have audited the accompanying statement of net assets of Alliance Money
Reserves Portfolio as of June 30, 1998 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 Portfolio'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, 1998, 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 Money Reserves Portfolio as of June 30, 1998, 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
July 24, 1998
9
ALLIANCE MONEY RESERVES
1345 Avenue of the Americas, New York, NY 10105
Toll free 1 (800) 221-5672
YIELDS. For current recorded yield information on Alliance
Money Reserves, call on a touch-tone telephone toll-free
(800) 251-0539 and press the following sequence of keys:
1 # 1 # 3 6 #
For non-touch-tone telephones, call toll-free (800) 221-9513
ALLIANCE CAPITAL
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.
MONAR
