- --------------------------------------------------------------------------------
Alliance
Capital
Reserves
- --------------------------------------------------------------------------------
Alliance Capital [LOGO](R)
Semi-Annual Report
December 31, 1999
- --------------------------------------------------------------------------------
<PAGE>
STATEMENT OF NET ASSETS
December 31, 1999 (unaudited) Alliance Capital Reserves
================================================================================
Principal
Amount
(000) Security (a) Yield Value
- ---------------------------------------------------------------
COMMERCIAL PAPER-35.8%
American General Corp.
$ 45,000 3/01/00............. 5.90% $ 44,572,250
Asset Backed Capital
Finance Ltd.
12,000 3/15/00 (b)......... 5.82 11,860,320
72,000 11/15/00 FRN (b).... 6.14 72,000,000
BAA Plc
44,000 3/08/00............. 5.68 43,548,756
Bank of America Corp.
87,000 3/14/00............. 5.73 86,017,685
45,000 3/22/00............. 5.80 44,427,250
40,000 3/14/00............. 6.00 39,526,667
Banque Caisse
D'Epargne L'Etat
115,000 6/21/00............. 5.60 111,958,889
38,000 2/11/00............. 6.05 37,750,942
Banque Generale Du
Luxembourg
80,000 3/29/00............. 5.67 78,916,400
BellSouth Capital
Funding Corp.
20,500 2/17/00............. 5.95 20,347,531
33,000 2/22/00............. 5.95 32,727,292
75,000 2/23/00............. 5.95 74,367,812
Bil North America, Inc.
73,000 3/02/00............. 5.95 72,288,149
Cariplo Finance, Inc.
80,000 3/01/00............. 5.93 79,235,689
CBA (Finance)
Delaware, Inc.
105,000 3/02/00............. 5.90 103,984,708
45,000 3/01/00............. 5.91 44,571,525
Centric Capital Corp.
10,000 1/19/00 (b)......... 6.10 9,972,889
16,000 2/09/00 (b)......... 6.10 15,899,689
15,000 2/14/00 (b)......... 6.10 14,893,250
40,000 1/26/00 (b)......... 6.50 39,833,889
Certain Funding Corp.
8,400 3/20/00 (b)......... 5.90 8,293,997
10,000 3/23/00 (b)......... 6.10 9,864,444
Clipper Receivables
Corp.
20,000 1/03/00 (b)......... 5.50 20,000,000
Commerzbank AG
165,000 3/09/00............. 5.68 163,281,800
Corporate Asset
Funding Corp.
115,000 3/14/00 (b)......... 6.00 113,639,167
Corporate Receivables
Corp.
65,000 2/18/00 (b)......... 6.15% 64,489,208
CS First Boston,
Guernsey
30,000 3/06/00 (b)......... 5.78 29,696,550
CS First Boston, Inc.
35,000 3/08/00 (b)......... 5.77 34,635,368
95,000 3/14/00 (b)......... 5.77 93,918,926
CXC, Inc.
70,000 3/13/00 (b)......... 6.00 69,183,333
52,800 2/15/00 (b)......... 6.15 52,412,140
25,000 2/18/00 (b)......... 6.15 24,803,542
DaimlerChrysler Corp.
158,000 3/13/00............. 6.08 156,132,089
Den Danske Corp.
14,100 3/14/00............. 5.95 13,934,540
60,000 2/16/00............. 6.10 59,552,667
Falcon Asset
Securitization Corp.
90,000 2/23/00 (b)......... 5.95 89,241,375
28,172 2/22/00 (b)......... 6.25 27,927,451
22,000 1/19/00 (b)......... 6.95 21,932,045
27,923 1/20/00 (b)......... 6.95 27,831,358
Ford Motor Credit Corp.
159,000 3/08/00 FRN......... 6.12 159,000,000
Four Winds Funding
Corp.
25,000 2/08/00 (b)......... 6.15 24,846,250
GE Capital
International Funding
105,000 2/28/00 (b)......... 5.94 104,029,800
Golden Funding Corp.
20,112 3/24/00 (b)......... 5.92 19,844,108
21,254 2/24/00 (b)......... 5.97 21,070,720
20,000 3/24/00 (b)......... 5.98 19,730,900
Goldman Sachs
Group LP
50,000 3/29/00 (b)......... 6.15 49,265,417
Greenwich Funding
Corp.
25,000 2/14/00 (b)......... 6.25 24,817,708
ING America Insurance
Holdings, Inc.
44,000 3/07/00............. 5.73 43,551,787
40,000 3/14/00............. 6.04 39,523,511
International
Securitization Corp.
29,082 2/11/00 (b)......... 6.45 28,878,789
39,225 1/25/00 (b)......... 6.75 39,063,197
36,000 1/14/00 (b)......... 7.25 35,920,250
1
<PAGE>
STATEMENT OF NET ASSETS (continued) Alliance Capital Reserves
================================================================================
Principal
Amount
(000) Security (a) Yield Value
- ---------------------------------------------------------------
Internationale
Nederlanden
$ 45,000 3/21/00............. 5.71% $ 44,443,275
50,000 3/23/00............. 5.90 49,344,444
J.P. Morgan & Co., Inc.
130,000 3/20/00............. 5.90 128,359,472
40,000 2/15/00............. 6.04 39,711,422
Lexington Parker
Capital Corp.
115,000 3/03/00............. 5.98 113,853,834
35,000 3/07/00............. 6.15 34,617,333
100,000 1/28/00............. 6.50 99,548,611
Market Street Funding
Corp.
40,000 1/11/00 (b)......... 6.90 39,938,667
Merrill Lynch & Co.,
Inc.
125,000 2/25/00............. 6.12 123,873,750
Morgan Stanley Group,
Inc.
85,000 3/01/00............. 5.96 84,183,811
47,000 3/13/00............. 6.05 46,447,097
55,000 2/15/00............. 6.10 54,599,264
Private Export Funding
Corp.
35,000 3/08/00............. 5.92 34,625,889
45,000 2/15/00............. 5.95 44,680,187
21,000 2/23/00............. 5.95 20,822,988
Prudential Funding Corp.
100,000 2/22/00............. 6.10 99,152,778
San Paolo IMI Corp.
45,000 3/16/00............. 5.72 44,478,050
109,000 2/14/00............. 5.75 108,268,792
Thames Global Asset
Funding
23,000 3/15/00 (b)......... 6.08 22,720,320
22,769 3/01/00 (b)......... 6.10 22,545,231
Wells Fargo & Co.
50,000 2/22/00............. 5.70 49,604,166
24,000 2/23/00............. 5.70 23,806,200
50,000 3/15/00............. 5.75 49,425,000
50,000 2/15/00............. 6.00 49,641,667
--------------
Total Commercial Paper
(amortized cost
$4,197,706,267)..... 4,197,706,267
--------------
CERTIFICATES OF
DEPOSIT-28.0%
American Express
Centurion Bank FRN
85,000 5.80%, 5/04/00 ..... 5.80 85,000,000
Australia New Zealand
Delaware
50,000 6.00%, 4/03/00...... 6.00 50,000,000
Bank of Nova Scotia
85,000 5.82%, 2/11/00...... 5.80 85,001,789
80,000 6.00%, 2/01/00...... 6.00 80,000,000
Barclays Bank Plc
50,000 5.61%, 6/14/00...... 5.66 49,989,297
175,000 5.66%, 6/14/00 (c).. 5.71 174,962,208
Bayerische Landesbank
FRN
260,000 5.64%, 3/30/00 (c). 5.70 259,963,462
Credit Communal
De Belgique
105,000 6.00%, 2/29/00...... 6.00 105,000,000
Deutsche Bank
90,000 5.11%, 2/22/00...... 5.16 89,995,844
135,000 5.44%, 6/01/00...... 5.49 134,973,362
67,000 5.58%, 6/12/00...... 5.63 66,991,497
First Union National
Bank
155,000 6.56%, 3/15/00...... 6.56 155,000,000
Landesbank-Hessen-
Thueringen
15,000 5.19%, 2/29/00...... 5.90 14,979,313
80,000 5.22%, 2/29/00...... 5.24 79,996,994
65,000 5.92%, 9/29/00...... 5.98 64,972,427
National Westminster
Bank
328,000 5.63%, 4/17/00 (c).. 5.69 327,947,114
105,000 5.67%, 7/05/00...... 5.72 104,979,723
Nordeutsche Landesbank
85,000 5.05%, 2/14/00...... 5.08 84,997,172
95,000 5.26%, 5/18/00...... 5.30 94,986,378
125,000 6.20%, 12/01/00..... 6.24 124,923,913
Rabo Bank
70,000 5.11%, 2/18/00...... 5.12 69,997,450
85,000 5.35%, 5/24/00...... 5.40 84,984,108
35,000 6.16%, 12/14/00..... 6.20 34,987,342
Royal Bank of Canada
75,000 5.86%, 8/09/00...... 5.90 74,982,783
San Paolo IMI Corp.
15,000 6.02%, 6/07/00...... 6.02 15,000,000
Southtrust Bank NA
94,000 5.92%, 2/22/00...... 5.92 94,000,000
2
<PAGE>
Alliance Capital Reserves
================================================================================
Principal
Amount
(000) Security (a) Yield Value
- ---------------------------------------------------------------
Toronto Dominion
Bank
$ 65,000 5.07%, 2/17/00...... 5.10% $ 64,997,296
120,000 5.27%, 3/02/00...... 5.30 119,994,256
UBS Finance
Delaware, Inc.
45,000 5.16%, 2/28/00...... 5.19 44,998,006
70,000 5.22%, 5/10/00...... 5.26 69,990,550
75,000 5.29%, 3/07/00...... 5.12 75,018,380
65,000 5.29%, 5/19/00...... 5.34 64,988,269
150,000 5.34%, 5/30/00...... 5.39 149,970,777
30,000 5.36%, 5/30/00...... 5.61 29,968,900
Wachovia Bank
60,000 5.95%, 9/11/00...... 5.95 60,000,000
--------------
Total Certificates of
Deposit (amortized cost
$3,288,538,610)..... 3,288,538,610
--------------
U.S. GOVERNMENT
AGENCY
OBLIGATIONS-18.4%
Aid Housing
Guaranty Project
Portugal
10,625 6.16%, 12/01/16 FRN. 6.16 10,625,000
Federal Home Loan
Bank
85,000 5.00%, 2/10/00...... 5.00 85,000,000
300,000 5.63%, 10/16/00 FRN. 5.74 299,759,154
291,000 6.17%, 10/06/00 FRN. 6.24 290,849,335
174,000 6.18%, 3/15/00 FRN.. 6.18 174,000,000
Federal Home Loan
Mortgage Corp. MTN
125,000 5.99%, 12/06/00 .... 6.15 124,816,455
Federal National
Mortgage Assn. MTN
80,000 6.16%, 10/05/00 .... 6.21 79,970,506
Student Loan
Marketing Assn. FRN
261,000 6.13%, 3/16/00...... 6.18 260,975,577
200,000 6.16%, 2/04/00...... 6.18 199,996,568
257,000 6.16%, 10/04/00..... 6.21 256,905,593
378,000 6.16%, 10/12/00..... 6.27 377,685,830
--------------
Total U.S. Government
Agency Obligations
(amortized cost
$2,160,584,018)..... 2,160,584,018
--------------
CORPORATE
OBLIGATIONS-10.2%
Centauri Corp. USA,
Inc. FRN
163,000 6.42%, 9/08/00 (b).. 6.42 163,000,000
General Electric
Capital Corp. FRN
180,000 6.13%, 4/12/00...... 6.13 180,000,000
Hartford Life Insurance
Co. Funding Agreement
FRN
50,000 6.51%, 2/27/00 (d).. 6.51 50,000,000
Merrill Lynch & Co.,
Inc. MTN
35,000 5.09%, 2/07/00...... 5.09 35,000,000
Metlife Funding
Agreement FRN
163,000 6.72%, 10/01/00..... 6.72 163,000,000
Prudential of America
Insurance Co. Funding
Agreement
69,000 6.49%, 11/30/00..... 6.49 69,000,000
Sigma Finance, Inc.
150,000 5.80%, 7/25/00 MTN (b) 5.80 150,000,000
137,000 6.52%, 6/30/00 FRN (b) 6.52 137,000,000
Toyota Motor Credit
Corp. FRN
136,000 6.34%, 9/21/00...... 6.34 136,000,000
Travelers Life Funding
Agreement FRN
50,000 6.48%, 2/11/00 (d).. 6.48 50,000,000
10,000 6.51%, 7/21/00 (d).. 6.51 10,000,000
50,000 6.53%, 8/03/00 (d).. 6.53 50,000,000
--------------
Total Corporate
Obligations
(amortized cost
$1,193,000,000)..... 1,193,000,000
--------------
BANK
OBLIGATIONS-4.3%
American Express
Centurion Bank
80,000 5.75%, 4/14/00 (c).. 5.75 80,000,000
Bank Boston
155,000 5.90%, 3/13/00...... 5.90 155,000,000
FCC National Bank
48,000 5.89%, 3/15/00...... 5.89 48,000,000
First National Bank
75,000 5.60%, 6/14/00...... 5.65 74,983,943
3
<PAGE>
STATEMENT OF NET ASSETS (continued) Alliance Capital Reserves
================================================================================
Principal
Amount
(000) Security (a) Yield Value
- ---------------------------------------------------------------
Lasalle National Bank
$ 50,000 5.80%, 2/07/00...... 5.80% $ 50,000,000
50,000 6.00%, 8/15/00...... 6.00 50,000,000
50,000 6.09%, 8/28/00...... 6.09 50,000,000
--------------
Total Bank Obligations
(amortized cost
$507,983,943)....... 507,983,943
--------------
PROMISSORY
NOTE-1.0%
Goldman Sachs
Group LP
120,000 6.16%, 2/01/00 (b)
(amortized cost
$120,000,000)....... 6.16 120,000,000
--------------
TIME DEPOSIT-0.4%
Bank of Montreal
50,000 3.00%, 1/03/00
(amortized cost
$50,000,000)........ 3.00 50,000,000
--------------
TOTAL
INVESTMENTS-98.1%
(amortized cost
$11,517,812,838).... 11,517,812,838
Other assets less
liabilities-1.9%.... 225,510,975
--------------
NET ASSETS-100%
(offering and redemption
price of $1.00 per share;
11,744,050,572 shares
outstanding)........ $11,743,323,813
===============
- --------------------------------------------------------------------------------
(a) All securities either mature or their interest rate changes in 397 days or
less.
(b) 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 December 31, 1999, these securities amounted to $1,875,000,298,
representing 16.0% of net assets.
(c) Variable Rate Security. Stated interest rate in effect at December 31,
1999.
(d) Funding Agreements which are illiquid securities and subject to
restrictions as to resale. These securities amounted to $160,000,000,
representing 1.4% of net assets (see Note A).
Glossary of Terms:
FRN -Floating Rate Note
MTN -Medium Term Note
See notes to financial statements.
4
<PAGE>
STATEMENT OF OPERATIONS
Six Months Ended December 31, 1999 (unaudited) Alliance Capital Reserves
================================================================================
<TABLE>
<S> <C> <C>
INVESTMENT INCOME
Interest............................................................. $ 306,841,503
EXPENSES
Advisory fee (Note B)................................................ $ 25,898,776
Distribution assistance and administrative service (Note C).......... 23,062,836
Transfer agency (Note B)............................................. 4,963,972
Registration fees.................................................... 560,474
Printing............................................................. 549,993
Custodian fees....................................................... 401,505
Audit and legal fees................................................. 61,437
Trustees' fees....................................................... 11,723
Miscellaneous........................................................ 35,004
--------------
Total expenses....................................................... 55,545,720
--------------
Net investment income................................................ 251,295,783
REALIZED LOSS ON INVESTMENTS
Net realized loss on investment transactions......................... (5,961)
--------------
NET INCREASE IN NET ASSETS FROM OPERATIONS.............................. $ 251,289,822
==============
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
================================================================================
<TABLE>
<CAPTION>
Six Months Ended
December 31, 1999 Year Ended
(unaudited) June 30, 1999
----------------- ----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment income................................................ $ 251,295,783 $ 402,288,048
Net realized loss on investment transactions......................... (5,961) (2,661)
---------------- ----------------
Net increase in net assets from operations........................... 251,289,822 402,285,387
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income................................................ (251,295,783) (402,288,048)
TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST
Net increase (Note E)................................................ 1,465,659,361 2,263,106,082
---------------- ----------------
Total increase....................................................... 1,465,653,400 2,263,103,421
NET ASSETS
Beginning of year.................................................... 10,277,670,413 8,014,566,992
---------------- ----------------
End of period........................................................ $ 11,743,323,813 $ 10,277,670,413
================ ================
</TABLE>
- --------------------------------------------------------------------------------
See notes to financial statements.
5
<PAGE>
NOTES TO FINANCIAL STATEMENTS
December 31, 1999 (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. Certain illiquid securities containing
unconditional puts at par value 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. No
reimbursement was required for the six months ended December 31, 1999.
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 $2,325,807 for the six months ended December 31,
1999.
For the six months ended December 31, 1999, the Fund's expenses were reduced by
$67,024 under an expense offset arrangement with Alliance Fund Services, Inc.
- --------------------------------------------------------------------------------
NOTE C: Distribution Assistance and Administrative Services Plan
Under this Plan, the Portfolio pays Alliance Fund Distributors, Inc. (the
"Distributor"), a wholly-owned subsidiary of the Adviser, a distribution fee at
the annual rate of .25% of the average daily value of the Portfolio's net
assets. The Plan provides that the Distributor will use such payments in their
entirety for distribution assistance and promotional activities. For the six
months ended December 31, 1999, the distribution fee amounted to $13,886,430. In
addition, the Portfolio may reimburse certain broker-dealers for administrative
costs incurred in
6
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued) Alliance Capital Reserves
================================================================================
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, 1999, such payments by the Portfolio amounted to
$9,176,406, of which $90,500 was paid to the Adviser.
- --------------------------------------------------------------------------------
NOTE D: Investment Transactions
At December 31, 1999, the cost of investments for federal income tax purposes
was the same as the cost for financial reporting purposes. At June 30, 1999, the
Portfolio had a capital loss carryforward of $719,581, of which $85,995 expires
in 2001, $49,939 expires in 2002, $464,313 expires in 2003, $106,987 expires in
2004, $887 expires in 2005, $2,275 expires in 2006 and $9,185 expires in the
year 2007.
- --------------------------------------------------------------------------------
NOTE E: Transactions in Shares of Beneficial Interest
An unlimited number of shares ($.001 par value) are authorized. At December 31,
1999, capital paid-in aggregated $11,744,050,572. Transactions, all at $1.00 per
share, were as follows:
<TABLE>
<CAPTION>
Six Months Ended Year Ended
December 31, 1999 June 30,
(unaudited) 1999
---------------- ----------------
<S> <C> <C>
Shares sold............................................................. 8,696,807,439 14,536,904,651
Shares issued on reinvestments of dividends............................. 251,295,783 402,288,048
Shares redeemed......................................................... (7,482,443,861) (12,676,086,617)
-------------- --------------
Net increase............................................................ 1,465,659,361 2,263,106,082
============== ==============
</TABLE>
7
<PAGE>
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,
1999 =====================================================
(unaudited) 1999 1998 1997 1996 1995
=========== ======== ======= ======= ======== =======
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year .... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
------- ------- ------- ------- -------- -------
Income from Investment Operations
Net investment income ................. .0227 .0430 .0471 .0452 .0471 .0447(a)
------- ------- ------- ------- -------- -------
Less: Dividends
Dividends from net investment income .. (.0227) (.0430) (.0471) (.0452) (.0471) (.0447)
------- ------- ------- ------- -------- -------
Net asset value, end of period ..... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
======= ======= ======= ======= ======== =======
Total Return
Total investment return based on net
asset value (b) .................... 2.30% 4.40% 4.83% 4.63% 4.82% 4.57%
Ratios/Supplemental Data
Net assets, end of period (in millions) $11,743 $10,278 $8,015 $5,733 $4,804 $3,024
Ratios to average net assets of:
Expenses, net of waivers and
reimbursements ................... 1.00%(c) .99% 1.00% 1.00% 1.00% 1.00%
Expenses, before waivers and
reimbursements ................... 1.00%(c) .99% 1.00% 1.00% 1.00% 1.03%
Net investment income .............. 4.58%(c) 4.29% 4.71% 4.53% 4.69% 4.51%(a)
</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 period. Total investment return calculated
for a period of less than one year is not annualized.
(c) Annualized.
8
<PAGE>
CHANGE IN INDEPENDENT ACCOUNTANT Alliance Capital Reserves
================================================================================
McGladrey & Pullen, LLP ("McGladrey") resigned as independent auditors of the
Fund pursuant to an agreement by PricewaterhouseCoopers LLP ("PwC") to acquire
McGladrey's investment company practice. The McGladrey partners and
professionals serving the Fund at the time of the acquisition joined PwC.
The reports of McGladrey on the financial statements of the Fund during the past
two fiscal years contained no adverse opinion or disclaimer of opinion, and were
not qualified or modified as to uncertainty, audit scope or accounting
principles.
In connection with its audits for the two most recent fiscal years and through
August 27, 1999, there were no disagreements with McGladrey on any matter of
accounting principle or practices, financial statement disclosure, or auditing
scope or procedure, which disagreements, if not resolved to the satisfaction of
McGladrey would have caused it to make reference to the subject matter of
disagreement in connection with its report.
On September 25, 1999, the Fund, with the approval of its Trustees and its Audit
Committee, engaged PwC as its independent auditors.
9
<PAGE>
Alliance Capital Reserves
================================================================================
Alliance Capital Reserves
1345 Avenue of the Americas
New York, NY 10105
Toll-free 1(800)221-5672
TRUSTEES
Dave H. Williams, Chairman
John D. Carifa
Sam Y. Cross (1)
Charles H.P. Duell (1)
William H. Foulk, Jr. (1)
David K. Storrs (1)
Shelby White (1)
OFFICERS
Ronald M. Whitehill, President
Kathleen A. Corbet, Senior Vice President
Drew A. Biegel, Senior Vice President
John R. Bonczek, Senior Vice President
Patricia Ittner, Senior Vice President
Robert I. Kurzweil, Senior Vice President
Wayne D. Lyski, Senior Vice President
Raymond J. Papera, Senior Vice President
Doris T. Ciliberti, Vice President
Frances M. Dunn, Vice President
William J. Fagan, Vice President
Linda D. Kelley, Vice President
Joseph R. LaSpina, Vice President
Eileen M. Murphy, Vice President
William E. Oliver, Vice President
Edmund P. Bergan, Jr., Secretary
Mark D. Gersten, Treasurer & Chief Financial Officer
Vincent S. Noto, Controller
CUSTODIAN
State Street Bank and Trust Company
P.O. Box 1912
Boston, MA 02105
DISTRIBUTOR
Alliance Fund Distributors, Inc.
1345 Avenue of the Americas
New York, NY 10105
TRANSFER AGENT
Alliance Fund Services
P.O. Box 1520
Secaucus, NJ 07096-1520
Toll-Free 1-(800) 221-5672
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, NY 10036
LEGAL COUNSEL
Seward & Kissel LLP
One Battery Park Plaza
New York, NY 10004
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(1) Members of the Audit Committee.
10
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Alliance Capital Reserves BULK RATE
1345 Avenue of the Americas New York, NY 10105 U.S. POSTAGE
Toll Free 1 (800) 221-5672 PAID
New York, NY
Permit No. 7131
---------------
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
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Alliance Capital [LOGO](R)
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.
AGRSR1299
