ALLIANCE TREASURY RESERVES
ALLIANCE CAPITAL
ANNUAL REPORT
JUNE 30, 1997
PORTFOLIO OF INVESTMENTS
JUNE 30, 1997 ALLIANCE TREASURY RESERVES
_______________________________________________________________________________
PRINCIPAL
AMOUNT
(000) SECURITY YIELD VALUE
- -------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS-50.2%
U.S. TREASURY NOTES-48.1%
$ 30,000 5.25%, 12/31/97 5.80% $ 29,911,558
10,000 5.50%, 7/31/97 5.15 10,001,674
30,000 5.63%, 10/31/97 5.43 30,014,520
20,000 5.75%, 10/31/97 5.36 20,008,309
55,000 5.75%, 9/30/97 5.41 55,026,269
50,000 5.88%, 7/31/97 5.28 50,020,369
10,000 6.00%, 12/31/97 5.77 10,007,525
10,000 6.13%, 3/31/98 6.01 10,008,387
33,000 6.50%, 8/15/97 5.20 33,047,782
75,000 8.50%, 7/15/97 5.12 75,093,708
15,000 8.63%, 8/15/97 5.41 15,057,387
-------------
338,197,488
U.S. TREASURY BILL-2.1%
15,000 7/24/97 5.25 14,950,981
Total U.S. Government Obligations
(amortized cost $353,148,469) 353,148,469
REPURCHASE AGREEMENTS-48.2%
BZW SECURITIES
34,000 5.90%, dated 6/30/97, due 7/01/97
in the amount of $34,005,572
(cost $34,000,000; collateralized
by $29,605,000 U.S. Treasury Bond,
8.125%, 8/15/19, value $34,591,234) 5.90 34,000,000
CHASE SECURITIES, INC.
10,000 5.70%, dated 6/30/97,
due 7/01/97 in the amount of
$10,001,583 (cost $10,000,000;
collateralized by $10,000,000
U.S. Treasury Note, 5.875%,
1/31/99, value $10,215,314) 5.70 10,000,000
DEUTSCHE BANK
34,000 5.85%, dated 6/30/97,
due 7/01/97 in the amount of
$34,005,525 (cost $34,000,000;
collateralized by $23,101,000
U.S. Treasury Bond, 11.25%,
2/15/15, value $34,429,544) 5.85 34,000,000
FIRST BOSTON CORP.
15,000 5.40%, dated 6/18/97,
due 7/09/97 in the amount of
$15,047,250 (cost $15,000,000;
collateralized by $10,502,000
U.S. Treasury Bond, 12.00%,
8/15/13, value $15,241,698)(a) 5.40 15,000,000
FIRST BOSTON CORP.
18,000 5.42%, dated 6/04/97,
due 7/03/97 in the amount of
$18,078,590 (cost $18,000,000;
collateralized by $17,739,000
U.S. Treasury Bond, 7.25%,
5/15/16, value $18,659,210)(a) 5.42 18,000,000
GOLDMAN SACHS & CO.
18,000 5.40%, dated 6/11/97,
due 7/01/97 in the amount of
$18,054,000 (cost $18,000,000;
collateralized by $14,115,000
U.S. Treasury Note, 11.625%,
11/15/04, value $18,492,855)(a) 5.40 18,000,000
GOLDMAN SACHS & CO.
15,000 5.44%, dated 6/18/97,
due 7/02/97 in the amount of
$15,031,733 (cost $15,000,000;
collateralized by $12,525,000
U.S. Treasury Bond, 8.50%,
2/15/20, value $15,235,239)(a) 5.44 15,000,000
1
PORTFOLIO OF INVESTMENTS (CONTINUED) ALLIANCE TREASURY RESERVES
_______________________________________________________________________________
PRINCIPAL
AMOUNT
(000) SECURITY YIELD VALUE
- -------------------------------------------------------------------------
J.P. MORGAN & CO.
$ 17,000 5.41%, dated 6/26/97,
due 7/17/97 in the amount of
$17,053,649 (cost $17,000,000;
collateralized by $12,869,000
U.S. Treasury Note, 12.75%,
5/15/05, value $17,320,869)(a) 5.41% $17,000,000
J.P. MORGAN & CO.
17,000 5.95%, dated 6/30/97,
due 7/01/97 in the amount of
$17,002,810 (cost $17,000,000;
collateralized by $11,418,000
U.S. Treasury Bond, 12.50%,
8/15/14, value $17,298,881) 5.95 17,000,000
MORGAN STANLEY GROUP, INC.
16,000 5.39%, dated 6/24/97,
due 7/10/97 in the amount of
$16,038,329 (cost $16,000,000;
collateralized by $11,580,000
U.S. Treasury Bond, 12.75%,
11/15/10, value $16,244,568)(a) 5.39 16,000,000
SANWA BANK
17,000 5.40%, dated 6/26/97,
due 7/11/97 in the amount of
$17,038,250 (cost $17,000,000;
collateralized by $17,027,000
U.S. Treasury Note, 6.375%,
3/31/01, value $17,307,526)(a) 5.40 17,000,000
SANWA BANK
17,000 5.40%, dated 6/26/97,
due 7/16/97 in the amount of
$17,051,000 (cost $17,000,000;
collateralized by $17,017,000
U.S. Treasury Note, 6.50%,
6/31/01, value $17,458,147)(a) 5.40 17,000,000
SBC WARBURG
20,000 5.39%, dated 6/06/97,
due 7/02/97 in the amount of
$20,077,856 (cost $20,000,000;
collateralized by $14,677,000
U.S. Treasury Bond, 12.75%,
11/15/10, value $20,589,079) (a) 5.39 20,000,000
SBC WARBURG
14,000 5.85%, dated 6/30/97,
due 7/01/97 in the amount of
$14,002,275 (cost $14,000,000;
collateralized by $11,345,000
U.S. Treasury Bond, 9.125%,
5/15/18, value $14,268,110) 5.85 14,000,000
SMITH BARNEY
18,000 5.41%, dated 6/19/97,
due 7/02/97 in the amount of
$18,035,165 (cost $18,000,000;
collateralized by $13,216,000
U.S. Treasury Note, 9.00%,
5/15/98, value $13,723,990
and $4,710,000
U.S. Treasury Note 5.75%,
8/15/03 value $4,646,148)(a) 5.41 18,000,000
SMITH BARNEY
15,000 5.44%, dated 6/03/97,
due 7/07/97 in the amount of
$15,077,067 (cost $15,000,000;
collateralized by $12,495,000
U.S. Treasury Bond, 8.75%,
8/15/20, value $15,581,343)(a) 5.44 15,000,000
STATE STREET BANK AND TRUST CO.
10,700 5.60%, dated 6/30/97,
due 7/01/97 in the amount of
$10,701,664 (cost $10,700,000;
collateralized by $10,985,000
U.S. Treasury Note, 5.25%,
12/31/97, value $10,967,835) 5.60 10,700,000
UBS FINANCE, INC.
20,000 5.57%, dated 4/09/97,
due 7/08/97 in the amount of
$20,278,500 (cost $20,000,000;
collateralized by $18,999,000
U.S. Treasury Note, 7.25%,
8/15/04, value $20,308,264)(a) 5.57 20,000,000
2
ALLIANCE TREASURY RESERVES
_______________________________________________________________________________
PRINCIPAL
AMOUNT
(000) SECURITY YIELD VALUE
- -------------------------------------------------------------------------
UBS FINANCE, INC.
$ 14,000 5.90%, dated 6/30/97,
due 7/01/97 in the amount of
$14,002,294 (cost $14,000,000;
collateralized by $12,206,000
U.S. Treasury Bond, 8.125%,
8/15/21, value $14,311,388) 5.90% $ 14,000,000
Total Repurchase Agreements
(amortized cost $339,700,000) 339,700,000
TOTAL INVESTMENTS-98.4%
(amortized cost $692,848,469) $692,848,469
Other assets less liabilities-1.6% 11,235,958
NET ASSETS-100%
(offering and redemption
price of $1.00 per share;
704,067,835 shares outstanding) $704,084,427
(a) Repurchase agreements which are terminable within 7 days.
See notes to financial statements.
3
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1997 ALLIANCE TREASURY RESERVES
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $692,848,469) $692,848,469
Receivable for investments sold 46,041,178
Interest receivable 7,810,768
Receivable for capital stock sold 450,107
Deferred organization expense 10,614
Total assets 747,161,136
LIABILITIES
Due to custodian 350,690
Payable for investments purchased 41,619,074
Payable for capital stock redeemed 545,260
Investment advisory fee payable 242,536
Distribution fee payable 67,291
Accrued expenses 251,858
Total liabilities 43,076,709
NET ASSETS $704,084,427
COMPOSITION OF NET ASSETS
Paid-in-capital $704,067,835
Accumulated net realized gain on investment transactions 16,592
$704,084,427
4
STATEMENT OF OPERATIONS
YEAR ENDED JUNE 30, 1997 ALLIANCE TREASURY RESERVES
_______________________________________________________________________________
INVESTMENT INCOME
Interest $36,226,981
EXPENSES
Advisory fee (Note B) $ 3,430,146
Distribution assistance and administrative
service (Note C) 1,978,721
Transfer agency (Note B) 924,875
Registration expense 193,296
Custodian fees 158,554
Printing 82,231
Audit and legal fees 42,671
Trustees' fees 11,255
Amortization of organization expense 9,125
Miscellaneous 18,005
Total expenses 6,848,879
Less: expense reimbursement and fee waiver (1,017,631)
Net expenses 5,831,248
Net investment income 30,395,733
REALIZED GAIN ON INVESTMENTS
Net realized gain on investment transactions 17,487
NET INCREASE IN NET ASSETS FROM OPERATIONS $30,413,220
STATEMENT OF CHANGES IN NET ASSETS
_______________________________________________________________________________
YEAR ENDED YEAR ENDED
JUNE 30, 1997 JUNE 30, 1996
------------- -------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment income $ 30,395,733 $ 24,908,350
Net realized gain on investment transactions 17,487 3,652
Net increase in net assets from operations 30,413,220 24,912,002
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income (30,395,733) (24,908,350)
TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST
Net increase (Note E) 3,509,283 206,852,122
Total increase 3,526,770 206,855,774
NET ASSETS
Beginning of year 700,557,657 493,701,883
End of year $704,084,427 $700,557,657
See notes to financial statements
5
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1997 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, 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 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. 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.
6. REPURCHASE AGREEMENTS
It is the Fund'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, 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 for the year ended June 30, 1997 for expenses
exceeding .85 of 1% of its average daily net assets. For the year ended June
30, 1997 the reimbursement amounted to $90,495. 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 $508,795 for the year ended June 30,
1997.
6
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, 1997, the distribution fee amounted to $1,715,073 of which
$927,136 was waived. 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,
1997, such payments by the Portfolio amounted to $263,648 of which $131,000 was
paid to the Adviser.
NOTE D: INVESTMENT TRANSACTIONS
At June 30, 1997, the cost of securities for federal income tax purposes was
the same as the cost for financial reporting purposes.
NOTE E: TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST
An unlimited number of shares ($.001 par value) are authorized. At June 30,
1997, capital paid-in aggregated $704,067,835. Transactions, all at $1.00 per
share, were as follows:
YEAR ENDED YEAR ENDED
JUNE 30, JUNE 30,
1997 1996
--------------- ---------------
Shares sold 3,406,513,740 3,173,100,216
Shares issued on reinvestments of dividends 30,395,733 24,908,350
Shares redeemed (3,433,400,190) (2,991,156,444)
Net increase 3,509,283 206,852,122
7
FINANCIAL HIGHLIGHTS ALLIANCE TREASURY RESERVES
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
PERIOD.
<TABLE>
<CAPTION>
SEPTEMBER 1,
YEAR ENDED JUNE 30, 1993(A)
---------------------------------- THROUGH
1997 1996 1995 JUNE 30, 1994
---------- ---------- ---------- -------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (b) .0443 .0466 .0460 .0260
LESS: DIVIDENDS
Dividends from net investment income (.0443) (.0466) (.0460) (.0260)
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURNS
Total investment return based on:
net asset value (c) 4.53% 4.77% 4.71% 3.18%(d)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $704,084 $700,558 $493,702 $80,720
Ratio to average net assets of:
Expenses, net of waivers and reimbursements .85% .81% .69% .28%(d)
Expenses, before waivers and reimbursements 1.00% 1.05% 1.05% 1.28%(d)
Net investment income (b) 4.43% 4.64% 4.86% 3.24%(d)
</TABLE>
(a) Commencement of operations.
(b) Net of expenses reimbursed or waived by the Adviser.
(c) 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.
(d) Annualized.
8
INDEPENDENT AUDITOR'S REPORT ALLIANCE TREASURY RESERVES
_______________________________________________________________________________
TO THE BOARD OF TRUSTEES AND SHAREHOLDER ALLIANCE TREASURY RESERVES PORTFOLIO
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of Alliance Treasury Reserves Portfolio as of
June 30, 1997 and the related statement 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, 1997, by correspondence with the custodian and brokers.
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, 1997, 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 29, 1997
9
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
DREW BIEGEL, SENIOR VICE 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
KENNETH T. CARTY, VICE PRESIDENT
JOHN F. CHIODI, JR., VICE PRESIDENT
DORIS T. CILIBERTI, VICE PRESIDENT
MARIA R. CONA, VICE PRESIDENT
WILLIAM J. FAGAN, VICE PRESIDENT
JOSEPH R. LASPINA, VICE PRESIDENT
LINDA D. NEIL, VICE PRESIDENT
RAYMOND J. PAPERA, 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
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
10
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
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.
TRSAR
