ALLIANCE TREASURY RESERVES
ALLIANCECAPITAL
ANNUAL REPORT
JUNE 30, 1996
STATEMENT OF NET ASSETS
JUNE 30, 1996 ALLIANCE TREASURY RESERVES
_______________________________________________________________________________
PRINCIPAL
AMOUNT
(000) SECURITY YIELD VALUE
- ------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS-71.1%
U.S. TREASURY NOTES-52.4%
$ 10,000 4.75%, 2/15/97 5.39% $ 9,955,416
57,000 6.13%, 7/31/96 4.82-5.20 57,050,018
65,000 6.50%, 9/30/96 5.02-5.23 65,187,012
60,000 6.88%, 10/31/96 5.23-5.25 60,286,023
10,000 6.88%, 2/28/97 5.38 10,094,531
115,000 7.25%, 8/31/96 5.14-5.24 115,303,898
6,000 7.50%, 1/31/97 5.13 6,079,596
10,000 7.88%, 7/15/96 4.95 10,010,739
33,000 7.88%, 7/31/96 5.20 33,067,350
------------
367,034,583
U.S. TREASURY BILLS-18.7%
25,000 7/25/96 4.71 24,921,500
33,000 8/01/96 4.96 32,859,053
50,000 8/22/96 5.00 49,638,889
20,000 8/29/96 5.04 19,834,800
3,500 9/19/96 5.09 3,460,400
------------
130,714,642
Total U.S. Government Obligations
(amortized cost $497,749,225) 497,749,225
REPURCHASE AGREEMENTS-27.4%
BANKERS TRUST REPO
32,000 5.15%, dated 6/27/96, due
7/01/96 in the amount of
$32,018,311 (cost $32,000,000;
collateralized by $33,460,000
U.S. Treasury Bills, 12/12/96,
value $32,667,333) 5.15 32,000,000
GOLDMAN SACHS & CO.
32,000 5.26%, dated 6/27/96, due
7/11/96 in the amount of
$32,065,458 (cost $32,000,000;
collateralized by $29,645,000
U.S. Treasury Bond, 8.00%,
11/15/21, value $32,958,715) 5.26 32,000,000
J.P. MORGAN & CO.
32,000 5.26%, dated 6/27/96, due
7/02/96 in the amount of
$32,023,378 (cost $32,000,000;
collateralized by $32,559,000
U.S. Treasury Note, 5.625%,
10/31/97, value $32,709,851) 5.26% 32,000,000
MERRILL LYNCH REPO
32,000 5.15%, dated 6/27/96, due
7/01/96 in the amount of
$32,018,311 (cost $32,000,000;
collateralized by $33,480,000
U.S. Treasury Bills, 12/12/96,
value $32,686,859) 5.15 32,000,000
MORGAN STANLEY REPO
32,000 5.28%, dated 6/27/96, due
7/02/96 in the amount of
$32,023,467 (cost $32,000,000;
collateralized by $28,780,000
U.S. Treasury Bond, 8.125%,
8/15/21, value $33,001,281) 5.28 32,000,000
STATE STREET BANK AND TRUST CO.
32,000 5.10%, dated 6/28/96, due
7/01/96 in the amount of
$32,013,600 (cost $32,000,000;
collateralized by $31,830,000
U.S. Treasury Bond, 7.125%,
2/15/23, value $32,978,216) 5.10 32,000,000
Total Repurchase Agreements
(amortized cost $192,000,000) 192,000,000
TOTAL INVESTMENTS-98.5%
(amortized cost $689,749,225) 689,749,225
Other assets less liabilities-1.5% 10,808,432
NET ASSETS-100%
(offering and redemption price
of $1.00 per share; 700,558,552
shares outstanding) $700,557,657
See notes to financial statements.
1
STATEMENT OF OPERATIONS
YEAR ENDED JUNE 30, 1996 ALLIANCE TREASURY RESERVES
_______________________________________________________________________________
INVESTMENT INCOME
Interest $29,253,913
EXPENSES
Advisory fee (Note B) $ 2,681,355
Distribution assistance and administrative
service (Note C) 1,579,280
Transfer agency (Note B) 813,781
Registration expense 235,572
Custodian fees 140,184
Printing 97,179
Audit and legal fees 43,109
Trustees' fees 11,521
Amortization of organization expense 9,150
Miscellaneous 19,713
Total expenses 5,630,844
Less: fee waiver (1,285,281)
4,345,563
Net investment income 24,908,350
REALIZED GAIN ON INVESTMENTS
Net realized gain on investments 3,652
NET INCREASE IN NET ASSETS FROM OPERATIONS $24,912,002
STATEMENTS OF CHANGES IN NET ASSETS
_______________________________________________________________________________
YEAR ENDED YEAR ENDED
JUNE 30,1996 JUNE 30,1995
------------- -------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment income $ 24,908,350 $ 13,260,896
Net realized gain (loss) on investments 3,652 (1,959)
Net increase in net assets from operations 24,912,002 13,258,937
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income (24,908,350) (13,260,896)
TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST
Net increase (Note E) 206,852,122 412,984,016
Total increase 206,855,774 412,982,057
NET ASSETS
Beginning of year 493,701,883 80,719,826
End of year $700,557,657 $493,701,883
See notes to financial statements.
2
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1996 ALLIANCE TREASURY RESERVES
_______________________________________________________________________________
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. As a matter of
fundamental policy, each 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 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.
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 is 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, pursuant to the advisory agreement, to reimburse the
Portfolio to the extent that its aggregate expenses (excluding taxes,
brokerage, interest and, where permitted, extraordinary expenses) exceed 1% of
its average daily net assets for any fiscal year. The Adviser also voluntarily
agreed to reimburse the Portfolio from July 1, 1995 to April 25, 1996 for
expenses exceeding .80 of 1% of its average daily net assets and from April 26,
1996 to June 30, 1996 for expenses exceeding .85 of 1% of its average daily net
assets. No reimbursement was required for the year ended June 30, 1996. 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 $356,606 for
the year ended June 30, 1996.
3
NOTES TO FINANCIAL STATEMENTS (CONTINUED) ALLIANCE TREASURY RESERVES
_______________________________________________________________________________
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, 1996, the distribution fee amounted to $1,340,677 of which
$1,285,281 was waived. 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, 1996, such payments by the Portfolio
amounted to $238,603 of which $127,000 was paid to the Adviser.
NOTE D: INVESTMENT TRANSACTIONS
At June 30, 1996, the cost of securities for federal income tax purposes was
the same as the cost for financial reporting purposes. At June 30, 1996, the
Portfolio had a capital loss carryforward of $895 which expires in 2003.
NOTE E: TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST
An unlimited number of shares ($.001 par value) are authorized. At June 30,
1996, capital paid-in aggregated $700,558,552. Transactions, all at $1.00 per
share, were as follows:
YEAR ENDED YEAR ENDED
JUNE 30, 1996 JUNE 30, 1995
--------------- ---------------
Shares sold 3,173,100,216 2,037,450,750
Shares issued on reinvestments of dividends 24,908,350 13,260,896
Shares redeemed (2,991,156,444) (1,637,727,630)
Net increase 206,852,122 412,984,016
4
ALLIANCE TREASURY RESERVES
_______________________________________________________________________________
NOTE F: FINANCIAL HIGHLIGHTS
Selected data for a share outstanding throughout each period.
SEPTEMBER 1,
YEAR ENDED JUNE 30, 1993(A)
--------------------- THROUGH
1996 1995 JUNE 30,1994
--------- --------- ------------
Net asset value, beginning of period $1.00 $1.00 $1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income .0466 .0460 .0260
LESS: DISTRIBUTIONS
Dividends from net investment income (.0466) (.0460) (.0260)
Net asset value, end of period $1.00 $1.00 $1.00
TOTAL RETURNS
Total investment return based on:
net asset value (b) 4.77% 4.71% 3.18%(c)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period(in thousands) $700,558 $493,702 $80,720
Ratio to average net assets of:
Expenses, net of waivers and
reimbursements .81% .69% .28%(c)
Expenses, before waivers and
reimbursements 1.05% 1.05% 1.28%(c)
Net investment income (d) 4.64% 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.
(d) Net of expenses reimbursed or waived by the Adviser.
5
INDEPENDENT AUDITOR'S REPORT ALLIANCE TREASURY RESERVES
_______________________________________________________________________________
TO THE BOARD OF TRUSTEES AND SHAREHOLDERS ALLIANCE TREASURY RESERVES PORTFOLIO
We have audited the accompanying statement of net assets of Alliance Treasury
Reserves Portfolio as of June 30, 1996 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, 1996, 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 Portfolio as of June 30, 1996, 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 26, 1996
6
ALLIANCE TREASURY RESERVES
_______________________________________________________________________________
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
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
WILLIAM J. FAGAN, VICE PRESIDENT
JOSEPH R. LASPINA, VICE PRESIDENT
LINDA D. NEIL, VICE PRESIDENT
RAYMOND J. PAPERA, VICE PRESIDENT
PAMELA F. RICHARDSON, 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
7
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.
TRSAR
