ALLIANCE CAPITAL RESERVES
ALLIANCE CAPITAL
SEMI-ANNUAL REPORT
DECEMBER 31, 1997
(UNAUDITED)
STATEMENT OF NET ASSETS
DECEMBER 31, 1997 (UNAUDITED) ALLIANCE CAPITAL RESERVES
_______________________________________________________________________________
PRINCIPAL
AMOUNT
(000) SECURITY# YIELD VALUE
- -------------------------------------------------------------------------
COMMERCIAL PAPER-47.8%
ALLIANZ OF AMERICA FINANCE CORP.
$ 9,100 3/17/98 (a) 5.64% $ 8,990,990
13,400 3/12/98 (a) 5.66 13,250,180
7,210 3/24/98 (a) 5.66 7,115,569
29,000 2/19/98 (a) 5.69 28,775,403
ASSET BACKED CAPITAL
45,000 2/17/98 (a) 5.60 44,671,000
ASSOCIATES CORP. OF NORTH AMERICA
35,000 2/27/98 5.60 34,689,667
81,000 3/16/98 5.74 80,044,290
38,000 1/02/98 6.75 37,992,875
BAA PLC
23,000 2/04/98 5.57 22,879,007
4,000 3/20/98 5.59 3,951,553
31,000 4/06/98 5.59 30,529,618
42,000 3/03/98 5.60 41,601,467
BANCO DE SANTANDER P.R.
40,000 3/16/98 5.76 39,526,400
BANQUE CAISSE D'EPARGNE
15,000 4/20/98 5.63 14,739,763
BBV FINANCE DELAWARE, INC.
27,500 3/20/98 5.57 27,168,121
71,000 5/01/98 5.58 69,679,400
BHF FINANCE DELAWARE, INC.
40,000 1/15/98 5.54 39,913,822
BIL NORTH AMERICA, INC.
25,000 3/17/98 5.61 24,701,563
5,000 3/11/98 5.62 4,944,992
20,000 3/16/98 5.68 19,764,433
CAISSE CENTRALE JARDINS DU QUEBEC
5,000 4/24/98 5.58 4,912,425
20,000 5/15/98 5.60 19,583,111
40,000 3/18/98 5.74 39,515,289
CAISSE D'AMORTISSEMENT
14,600 7/10/98 5.60 14,168,489
CAISSE DES DEPOTS ET CONSIGNATIONS
128,900 3/18/98 5.74 127,338,018
CENTAURI CORP. USA
30,000 3/05/98 (a) 5.60 29,706,000
CHIAO TUNG BANK CO., LTD.
17,000 1/16/98 5.60 16,960,333
17,000 2/25/98 5.63 16,853,777
CITICORP
20,000 1/02/98 6.50% 19,996,389
COMMERZBANK
210,000 1/29/98 5.90 209,036,333
CS FIRST BOSTON
31,000 2/19/98 5.71 30,759,069
13,000 3/12/98 5.75 12,854,653
DRESDNER BANK
252,000 2/25/98 5.74 249,790,100
ELECTRICITE DE FRANCE
9,600 3/23/98 5.57 9,479,688
FORD MOTOR CREDIT CORP.
115,000 3/19/98 5.65 113,595,499
GENERAL ELECTRIC CAPITAL CORP.
75,000 2/09/98 5.56 74,548,250
45,000 3/26/98 5.57 44,415,150
65,000 3/18/98 5.67 64,221,950
70,000 3/23/98 5.73 69,097,525
30,000 3/06/98 5.78 29,691,733
GENERAL RE CORP.
27,000 3/27/98 5.76 26,632,800
50,000 2/27/98 5.82 49,539,250
GENERALE BANK
45,000 3/05/98 5.57 44,561,363
HENKEL CORP.
16,000 3/25/98 5.57 15,794,529
30,000 2/03/98 5.62 29,845,450
IMI FUNDING CORP. (USA)
28,377 2/10/98 5.55 28,202,009
25,989 2/27/98 5.57 25,759,799
13,000 3/31/98 5.57 12,820,986
22,310 4/30/98 5.60 21,897,017
36,000 3/16/98 5.61 35,584,860
10,000 1/02/98 5.63 9,998,436
INTERNATIONAL NEDERLAND BANK
40,000 2/10/98 5.72 39,745,778
18,500 3/18/98 5.75 18,275,430
48,000 3/31/98 5.77 47,315,293
32,500 3/16/98 5.78 32,113,864
25,000 3/09/98 5.80 24,730,139
JES DEVELOPMENTS, INC.
24,655 2/02/98 (a) 6.00 24,523,507
67,923 2/04/98 (a) 6.00 67,538,103
KFW INTERNATIONAL FINANCE
50,000 2/26/98 5.78 49,550,444
1
STATEMENT OF NET ASSETS (CONTINUED) ALLIANCE CAPITAL RESERVES
_______________________________________________________________________________
PRINCIPAL
AMOUNT
(000) SECURITY# YIELD VALUE
- -------------------------------------------------------------------------
KOCH INDUSTRIES
$ 84,500 1/02/98 (a) 6.75% $ 84,484,156
MERRILL LYNCH & CO., INC.
63,000 1/14/98 5.85 62,866,913
MORGAN STANLEY GROUP, INC.
120,000 3/11/98 5.62 118,677,500
100,000 2/23/98 5.70 99,160,833
79,000 2/25/98 5.75 78,306,007
NATIONAL CITY BANK
22,000 2/13/98 5.85 21,846,275
ROSE FUNDING
20,000 2/03/98 (a) 5.67 19,896,050
SIGMA FINANCE, INC.
39,000 3/05/98 (a) 5.62 38,616,435
TASMANIAN PUBLIC FINANCE CORP.
7,700 3/23/98 5.57 7,603,500
TEXACO, INC.
26,000 3/12/98 5.66 25,709,306
TORONTO DOMINION HOLDINGS
39,000 4/06/98 5.56 38,427,783
UBS FINANCE DELAWARE, INC.
84,600 1/02/98 6.75 84,584,137
Total Commercial Paper
(amortized cost $3,076,061,846) 3,076,061,846
BANK OBLIGATIONS-20.5%
ABBEY NATIONAL
28,000 5.88%, 3/25/98 FRN 5.98 27,996,039
BANK OF MONTREAL
75,000 5.88%, 10/01/98 FRN 5.88 75,000,000
BANKERS TRUST
185,000 6.03%, 2/19/98 FRN 6.03 185,000,000
90,000 6.06%, 2/17/98 FRN 6.06 90,000,000
BAYERISCHE LANDESBANK
160,000 5.87%, 10/02/98 FRN 5.87 160,000,000
BAYERISCHE VEREINSBANK
170,000 5.88%, 6/30/98 FRN 5.94 169,951,199
DEUTSCHE BANK
160,000 5.61%, 7/01/98 FRN 5.71 159,922,998
FCC NATIONAL BANK OF CHICAGO
80,000 6.00%, 3/25/98 5.72 80,010,626
LASALLE NATIONAL BANK
50,000 5.72%, 3/02/98 5.72 50,000,000
50,000 5.72%, 3/04/98 5.72 50,000,000
25,000 5.72%, 6/29/98 5.72 25,000,000
35,000 5.72%, 6/30/98 5.72 35,000,000
MORGAN GUARANTY TRUST CO.
75,000 5.96%, 6/22/98 5.99 74,988,180
SMM TRUST
50,000 5.91%, 12/16/98 FRN (a) 5.91 50,000,000
40,000 6.00%, 5/29/98 FRN (a) 6.00 40,000,000
50,000 6.00%, 12/14/98 FRN (a) 6.00 50,000,000
Total Bank Obligations
(amortized cost $1,322,869,042) 1,322,869,042
CERTIFICATES OF DEPOSIT-12.9%
BANKERS TRUST
12,000 5.78%, 2/27/98 5.80 11,995,048
CANADIAN IMPERIAL BANK OF COMMERCE
130,000 5.80%, 3/31/98 5.80 130,000,000
95,000 5.81%, 3/17/98 5.81 95,000,000
16,900 5.94%, 3/17/98 5.77 16,897,749
CREDIT AGRICOLE
15,000 5.87%, 8/10/98 5.86 14,989,701
40,000 5.99%, 6/16/98 5.86 40,007,971
DEUTSCHE BANK
75,000 5.95%, 10/21/98 6.00 74,971,229
15,000 6.20%, 4/08/98 5.82 15,004,745
GENERALE BANK
30,000 5.94%, 8/28/98 5.86 29,994,588
HESSISCHE LANDESBANK
10,000 5.93%, 6/30/98 5.87 9,996,510
28,000 5.94%, 6/19/98 5.86 27,999,725
58,000 6.13%, 4/07/98 6.25 57,982,546
MORGAN GUARANTY TRUST CO.
94,000 5.81%, 3/30/98 5.79 94,003,850
NORINCHUKIN BANK
65,000 5.75%, 1/20/98 5.74 65,000,338
RABOBANK NEDERLAND
15,000 6.07%, 3/26/98 6.04 15,005,844
SOCIETE GENERALE N.A., INC.
80,000 5.69%, 3/19/98 5.70 79,992,294
10,000 5.87%, 3/05/98 5.83 9,995,857
40,000 6.35%, 4/15/98 5.83 40,029,490
2
ALLIANCE CAPITAL RESERVES
_______________________________________________________________________________
PRINCIPAL
AMOUNT
(000) SECURITY# YIELD VALUE
- -------------------------------------------------------------------------
Total Certificates of Deposit
(amortized cost $828,867,485) $828,867,485
CORPORATE OBLIGATIONS-7.2%
CENTAURI CORP. USA
$ 25,000 5.73%, 2/06/98 FRN (a) 5.75% 24,999,880
GENERAL AMERICAN FUNDING CORP.
157,000 5.89%, 7/10/98 FRN 5.89 157,000,000
GENERAL ELECTRIC CAPITAL CORP.
33,000 5.65%, 1/05/98 FRN 5.65 33,000,000
MERRILL LYNCH & CO., INC.
37,000 5.66%, 3/16/98 5.74 36,999,285
60,000 5.71%, 1/29/98 FRN 5.73 59,999,097
60,000 5.76%, 1/22/98 FRN 5.80 59,999,164
35,000 5.88%, 8/26/98 5.90 35,000,000
TRAVELERS LIFE FUNDING AGREEMENT
10,000 5.70%, 10/21/98 FRN (b) 5.70 10,000,000
50,000 5.98%, 11/03/98 FRN (b) 5.98 50,000,000
Total Corporate Obligations
(amortized cost $466,997,426) 466,997,426
PROMISSORY NOTES-4.8%
GOLDMAN SACHS GROUP LP
140,000 5.75%, 4/13/98 5.75 140,000,000
30,000 5.76%, 2/09/98 FRN 5.76 30,000,000
140,000 5.88%, 5/27/98 5.88 140,000,000
Total Promissory Notes
(amortized cost $310,000,000) 310,000,000
TIME DEPOSIT-2.5%
WEST DEUTSCHE LANDESBANK
$158,900 6.75%, 1/02/98
(amortized cost $158,900,000) 6.75% $ 158,900,000
U.S. GOVERNMENT & AGENCY OBLIGATIONS-2.4%
AID HOUSING GUARANTY PROJECT PORTUGAL
11,875 6.13%, 12/01/16 FRN 6.13 11,875,000
FEDERAL FARM CREDIT BANK
66,000 5.53%, 8/03/98 FRN 5.58 65,981,839
FEDERAL NATIONAL MORTGAGE ASSN.
78,000 5.94%, 11/04/98 6.03 77,946,053
Total U.S. Government
& Agency Obligations
(amortized cost $155,802,892) 155,802,892
TOTAL INVESTMENTS-98.1%
(amortized cost $6,319,498,691) 6,319,498,691
Other assets less liabilities-1.9% 122,155,554
NET ASSETS-100%
(offering and redemption
price of $1.00 per share;
6,442,364,641 shares outstanding) $6,441,654,245
# 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. These securities have been determined by the Adviser to be liquid
pursuant to procedures adopted by the Trustees. At December 31, 1997, these
securities amounted to $532,567,273, representing 8.3% of net assets.
(b) Illiquid securities, valued at fair market value (see Note A).
Glossary:
FRN - Floating Rate Note
See notes to financial statements.
3
STATEMENT OF OPERATIONS
SIX MONTHS ENDED DECEMBER 31, 1997 (UNAUDITED) ALLIANCE CAPITAL RESERVES
_______________________________________________________________________________
INVESTMENT INCOME
Interest $179,788,162
EXPENSES
Advisory fee (Note B) $14,610,026
Distribution assistance and administrative
service (Note C) 9,731,015
Transfer agency (Note B) 6,002,992
Custodian fees 311,422
Printing 273,686
Registration fees 401,798
Audit and legal fees 34,496
Trustees' fees 8,742
Miscellaneous 28,317
Total expenses 31,402,494
Net investment income 148,385,668
REALIZED LOSS ON INVESTMENTS
Net realized loss on investment transactions (2,275)
NET INCREASE IN NET ASSETS FROM OPERATIONS $148,383,393
See notes to financial statements.
4
STATEMENT OF CHANGES IN NET ASSETS ALLIANCE CAPITAL RESERVES
_______________________________________________________________________________
SIX MONTHS ENDED
DEC. 31, 1997 YEAR ENDED
(UNAUDITED) JUNE 30, 1997
--------------- ---------------
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment income $ 148,385,668 $ 251,419,428
Net realized loss on investment transactions (2,275) (887)
Net increase in net assets from operations 148,383,393 251,418,541
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income (148,385,668) (251,419,428)
TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST
Net increase (Note E) 708,851,157 928,726,972
Total increase 708,848,882 928,726,085
NET ASSETS
Beginning of period 5,732,805,363 4,804,079,278
End of period $6,441,654,245 $5,732,805,363
See notes to financial statements.
5
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997 (UNAUDITED) ALLIANCE CAPITAL 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 (the "Portfolio") and Alliance
Money Reserves, 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. Illiquid securities containing unconditional
par puts are valued at par.
2. TAXES
It is the Portfolio's policy to comply with 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 applicable,
to its shareholders. Therefore, no provisions for federal income or excise
taxes are required.
3. 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.
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 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, 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. No reimbursement was required for the six months ended December
31, 1997.
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 $3,351,495 for the six months ended December 31,
1997.
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 six
months ended December 31, 1997, the distribution fee amounted to $7,850,623. 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 six months ended December 31, 1997, such payments by the
Portfolio amounted to $1,880,392 of which $87,500 was paid to the Adviser.
6
ALLIANCE CAPITAL RESERVES
_______________________________________________________________________________
NOTE D: INVESTMENT TRANSACTIONS
At December 31, 1997, the cost of investments for federal income tax purposes
was the same as the cost for financial reporting purposes. At June 30, 1997,
the Portfolio had a capital loss carryforward of $708,121 of which $85,995
expires in the year 2001, $49,939 expires in the year 2002, $464,313 expires in
the year 2003, $106,987 expires in the year 2004 and $887 expires in the year
2005.
NOTE E: TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST
An unlimited number of shares ($.001 par value) are authorized. At December 31,
1997, capital paid-in aggregated $6,442,364,641. Transactions, all at $1.00 per
share, were as follows:
SIX MONTHS ENDED YEAR ENDED
DEC. 31, 1997 JUNE 30,
(UNAUDITED) 1997
---------------- ----------------
Shares sold 17,510,609,723 26,431,373,115
Shares issued on reinvestments of dividends 148,385,668 251,419,428
Shares redeemed (16,950,144,234) (25,754,065,571)
Net increase 708,851,157 928,726,972
7
FINANCIAL HIGHLIGHTS ALLIANCE CAPITAL RESERVES
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
PERIOD
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
DECEMBER 31, YEAR ENDED JUNE 30,
1997 -------------------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
------------ ---------- ----------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income .0238 .0452 .0471 .0447 .0255 .0266
Net realized gain on investment
transactions -0- -0- -0- -0- -0- .0003
Net increase in net assets from
operations .0238 .0452 .0471 .0447 .0255 .0269
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.0238) (.0452) (.0471) (.0447) (.0255) (.0266)
Distributions from net realized gains -0- -0- -0- -0- -0- (.0003)
Total dividends and distributions (.0238) (.0452) (.0471) (.0447) (.0255) (.0269)
Net asset value, end of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
TOTAL RETURNS
Total investment return based on net
asset value (a) 4.78%(b) 4.63% 4.82% 4.57% 2.58% 2.73%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $6,442 $5,733 $4,804 $3,024 $2,417 $2,112
Ratio to average net assets of:
Expenses, net of waivers and
reimbursements 1.00%(b) 1.00% 1.00% 1.00% 1.00% 1.00%
Expenses, before waivers and
reimbursements 1.00%(b) 1.00% 1.00% 1.03% 1.03% 1.00%
Net investment income 4.73%(b) 4.53% 4.69% 4.51% 2.57% 2.65%
</TABLE>
(a) 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.
(b) Annualized.
8
ALLIANCE CAPITAL RESERVES
1345 Avenue of the Americas, New York, NY 10105
Toll free 1 (800) 221-5672
YIELDS. For current recorded yield information on Alliance
Capital Reserves, call on a touch-tone telephone toll-free
(800) 251-0539 and press the following sequence of keys:
1 # 1 # 3 9 #
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.
CAPSR
