ALLIANCE TREASURY RESERVES
SEMI-ANNUAL REPORT
DECEMBER 31, 1996
(UNAUDITED)
STATEMENT OF NET ASSETS
DECEMBER 31, 1996 (UNAUDITED) ALLIANCE TREASURY RESERVES
_______________________________________________________________________________
PRINCIPAL
AMOUNT
(000) SECURITY YIELD VALUE
- ------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS-69.9%
U.S. TREASURY BILLS-52.9%
$ 15,000 1/16/97 4.75% $ 14,970,312
15,000 2/20/97 4.83 14,899,479
15,000 1/09/97 4.89 14,983,717
10,000 4/17/97 4.97 9,853,661
25,000 2/13/97 5.00 24,850,694
10,000 4/24/97 5.00 9,843,056
10,000 5/01/97 5.00 9,833,333
10,000 5/15/97 5.00 9,813,889
50,000 1/30/97 5.01 49,798,410
80,000 2/06/97 5.01 79,599,600
10,000 4/10/97 5.01 9,862,362
10,000 5/22/97 5.01 9,803,971
40,000 2/27/97 5.02 39,682,383
10,000 5/08/97 5.02 9,822,906
10,000 6/05/97 5.02 9,783,861
10,000 6/19/97 5.05 9,762,931
10,000 5/29/97 5.06 9,791,978
10,000 6/12/97 5.07 9,772,075
------------
346,728,618
U.S. TREASURY NOTES-17.0%
10,000 4.75%, 2/15/97 5.39 9,991,239
35,000 6.63%, 3/31/97 5.26 35,107,047
40,000 6.88%, 2/28/97 5.25-5.38 40,096,477
26,000 7.50%, 1/31/97 5.13-5.31 26,043,385
------------
111,238,148
Total U.S. Government Obligations
(amortized cost $457,966,766) 457,966,766
REPURCHASE AGREEMENTS-29.8%
BZW SECURITIES REPO
31,000 6.75%, dated 12/31/96,
due 1/02/97 in the amount
of $31,011,625
(cost $31,000,000;
collateralized by $31,910,000
U.S. Treasury Bond,
6.50%, 11/15/26,
value $31,580,239)
(amortized cost $31,000,000) 6.75 31,000,000
GOLDMAN SACHS & CO.
32,000 5.34%, dated 12/05/96,
due 1/08/97 in the
amount of $32,161,387
(cost $32,000,000;
collateralized by $30,655,000
U.S. Treasury Bills,
11/15/01, value $32,561,331
and $235,000
U.S. Treasury Bond, 7.50%,
11/15/16, value $256,627)
(amortized cost $32,000,000) 5.34 32,000,000
J.P. MORGAN & CO.
15,000 5.35%, dated 12/23/96,
due 1/23/97 in the
amount of $15,069,104
(cost $15,000,000;
collateralized by $14,677,000
U.S. Treasury Bills,
2/15/98, value $15,314,532)
(amortized cost $15,000,000) 5.35 15,000,000
J.P. MORGAN & CO.
15,000 5.50%, dated 12/23/96,
due 1/07/97 in the
amount of $15,034,375
(cost $15,000,000;
collateralized by $14,982,000
U.S. Treasury Bills,
1/31/98, value $15,323,013)
(amortized cost $15,000,000) 5.50 15,000,000
MERRILL LYNCH REPO
16,000 5.25%, dated 12/03/96,
due 3/03/97 in the
amount of $16,210,000
(cost $16,000,000;
collateralized by $15,810,000
U.S. Treasury Bills,
7/31/98, value $16,425,345)
(amortized cost $16,000,000) 5.25 16,000,000
1
STATEMENT OF NET ASSETS (CONTINUED) ALLIANCE TREASURY RESERVES
_______________________________________________________________________________
PRINCIPAL
AMOUNT
(000) SECURITY YIELD VALUE
- ------------------------------------------------------------------------
MORGAN STANLEY REPO
$ 32,000 5.34%, dated 12/05/96,
due 1/09/97 in the
amount of $32,166,133
(cost $32,000,000;
collateralized by $32,000,000
U.S. Treasury Bills,
9/30/00, value $32,470,384
and $250,000
U.S. Treasury Bills,
1/15/00, value $259,506)
(amortized cost $32,000,000) 5.34% $ 32,000,000
STATE STREET BANK AND TRUST CO.
23,000 6.25%, dated 12/31/96,
due 1/02/97 in the
amount of $23,007,986
(cost $23,000,000;
collateralized by $21,780,000
U.S. Treasury Note, 7.125%,
2/15/23, value $23,460,000)
(amortized cost $23,000,000) 6.25 23,000,000
UBS REPO
15,000 5.38%, dated 12/27/96,
due 2/25/97 in the
amount of $15,134,500
(cost $15,000,000;
collateralized by $10,017,000
U.S. Treasury Bond, 11.25%,
2/15/15, value $15,214,883)
(amortized cost $15,000,000) 5.38 15,000,000
UBS REPO
16,000 5.42%, dated 12/26/96,
due 1/28/97 in the
amount of $16,079,493
(cost $16,000,000;
collateralized by $13,994,000
U.S. Treasury Bills,
2/15/21, value $16,233,040)
(amortized cost $16,000,000) 5.42 16,000,000
Total Repurchase Agreements
(amortized cost $195,000,000) 195,000,000
TOTAL INVESTMENTS-99.7%
(amortized cost $652,966,766) 652,966,766
Other assets less liabilities-0.3% 2,116,052
NET ASSETS-100%
(offering and redemption
price of $1.00 per share;
655,066,659 shares outstanding) $655,082,818
See notes to financial statements.
2
STATEMENT OF OPERATIONS
SIX MONTHS ENDED DECEMBER 31, 1996 (UNAUDITED) ALLIANCE TREASURY RESERVES
_______________________________________________________________________________
INVESTMENT INCOME
Interest $18,264,400
EXPENSES
Advisory fee (Note B) $1,744,955
Distribution assistance and administrative
service (Note C) 999,652
Transfer agency (Note B) 490,133
Custodian fees 94,099
Registration expense 59,023
Printing 33,152
Audit and legal fees 19,166
Trustees' fees 5,704
Amortization of organization expense 4,600
Miscellaneous 9,167
Total expenses 3,459,651
Less: expense reimbursement and fee waiver (493,228) 2,966,423
Net investment income 15,297,977
REALIZED GAIN ON INVESTMENTS
Net realized gain on investments 17,054
NET INCREASE IN NET ASSETS FROM OPERATIONS $15,315,031
STATEMENTS OF CHANGES IN NET ASSETS
_______________________________________________________________________________
SIX MONTHS ENDED
DEC. 31, 1996 YEAR ENDED
(UNAUDITED) JUNE 30, 1996
------------- -------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment income $ 15,297,977 $ 24,908,350
Net realized gain on investments 17,054 3,652
Net increase in net assets from operations 15,315,031 24,912,002
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income (15,297,977) (24,908,350)
TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST
Net increase (decrease) (Note E) (45,491,893) 206,852,122
Total increase (decrease) (45,474,839) 206,855,774
NET ASSETS
Beginning of period 700,557,657 493,701,883
End of period $655,082,818 $700,557,657
See notes to financial statements.
3
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 (UNAUDITED) 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 for the six months ended December 31, 1996
for expenses exceeding .85 of 1% of its average daily net assets. For the six
months ended December 31, 1996 the reimbursement amounted to $4,242. 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 $273,797 for
the six months ended December 31, 1996.
4
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 six
months ended December 31, 1996, the distribution fee amounted to $872,477 of
which $488,986 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 six months ended
December 31, 1996, such payments by the Portfolio amounted to $127,175 of which
$65,000 was paid to the Adviser.
NOTE D: INVESTMENT TRANSACTIONS
At December 31, 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 December 31,
1996, capital paid-in aggregated $655,066,659. Transactions, all at $1.00 per
share, were as follows:
SIX MONTHS ENDED YEAR ENDED
DEC. 31, 1996 JUNE 30,
(UNAUDITED) 1996
--------------- ---------------
Shares sold 1,773,870,366 3,173,100,216
Shares issued on reinvestments of dividends 15,297,977 24,908,350
Shares redeemed (1,834,660,236) (2,991,156,444)
Net increase (decrease) (45,491,893) 206,852,122
5
NOTES TO FINANCIAL STATEMENTS (CONTINUED) ALLIANCE TREASURY RESERVES
_______________________________________________________________________________
NOTE F: FINANCIAL HIGHLIGHTS
Selected data for a share outstanding throughout each period.
<TABLE>
<CAPTION>
SIX MONTHS
ENDED SEPTEMBER 1,
DECEMBER 31, YEAR ENDED JUNE 30, 1993(A)
1996 ------------------------ THROUGH
(UNAUDITED) 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 .0221 .0466 .0460 .0260
LESS: DISTRIBUTIONS
Dividends from net investment income (.0221) (.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 (b) 4.43%(c) 4.77% 4.71% 3.18%(c)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $655,083 $700,558 $493,702 $80,720
Ratio to average net assets of:
Expenses, net of waivers and
reimbursements .85%(c) .81% .69% .28%(c)
Expenses, before waivers and
reimbursements .99%(c) 1.05% 1.05% 1.28%(c)
Net investment income (d) 4.38%(c) 4.64% 4.86% 3.24%(c)
</TABLE>
(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.
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
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
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
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.
TRSSR
ALC90PR07
