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Alliance
Money
Reserves
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AllianceCapital [LOGO](R)
Semi-Annual Report
December 31, 1998
(unaudited)
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<PAGE>
STATEMENT OF NET ASSETS
December 31, 1998 (unaudited) Alliance Money Reserves
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Principal
Amount
(000) Security(a) Yield Value
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COMMERCIAL PAPER-47.0%
Abbey National
Treasury Services
$ 10,000 3/22/99 ................ 4.80% $ 9,893,333
Associates Corp. of
North America
30,000 3/25/99 ................ 5.13 29,645,175
Banco de Santander
P.R.
20,000 2/12/99 ................ 5.16 19,879,600
Bank of America
Corp.
15,000 6/08/99 ................ 4.88 14,678,733
20,000 5/11/99 ................ 4.93 19,643,945
Bank of America
F.S.B.
10,000 3/24/99 ................ 4.86 9,889,300
25,000 5/14/99 ................ 4.92 24,545,583
Bankers Trust
Alex Brown
15,000 2/16/99 FRN (b)......... 5.28 15,000,000
Banque Caisse
d'Epargne
7,000 3/25/99 ................ 5.07 6,918,176
21,000 2/19/99 ................ 5.20 20,851,367
Caisse Centrale
Jardins du Quebec
15,000 3/16/99 ................ 5.15 14,841,208
Caisse des Depots et
Consignations
13,000 1/04/99 ................ 5.12 12,994,453
Commonwealth Bank
of Australia
12,200 1/04/99 ................ 5.25 12,194,663
Cregem North
America, Inc.
20,000 3/23/99 ................ 5.05 19,772,750
Den Danske Bank
7,000 3/29/99 ................ 5.11 6,913,641
20,000 2/10/99 ................ 5.17 19,885,111
Diageo Capital Plc
15,000 3/15/99 ................ 5.06 14,846,092
4,000 3/22/99 ................ 5.08 3,954,844
Equilon Enterprise
LLC
10,000 3/24/99 ................ 5.09 9,884,061
18,000 3/05/99 ................ 5.12 17,838,720
Ford Motor Credit
Corp.
20,000 6/09/99 ................ 4.86 19,570,700
General Electric
Capital Services
28,000 4/30/99 ................ 5.06 27,531,669
20,000 3/05/99 ................ 5.20 19,818,000
General Electric
Financial Assurance
25,000 2/19/99 ................ 5.15 24,824,757
ING America
Insurance Holdings,
Inc.
8,000 6/28/99 ................ 4.93 7,804,991
15,000 3/12/99 ................ 5.10 14,851,250
10,000 3/26/99 ................ 5.15 9,879,833
Lloyds Bank PLC
11,000 6/03/99 ................ 4.84 10,773,730
Marsh & McClennan
7,000 1/19/99 ................ 5.32 6,981,380
Morgan Stanley
Group, Inc.
10,000 3/24/99 ................ 5.20 9,881,556
30,000 2/26/99 ................ 5.28 29,753,600
Salomon Smith Barney
35,000 2/23/99 ................ 5.19 34,732,571
Scotia Bank
10,000 2/18/99 ................ 5.24 9,930,133
5,000 2/18/99 ................ 5.25 4,965,000
Sheffield Receivables
Corp.
10,000 2/12/99 (c)............. 5.30 9,938,167
20,000 2/12/99 (c)............. 5.33 19,875,633
UBS Finance
25,000 6/10/99 ................ 4.85 24,460,667
UBS Finance
Delaware, Inc.
25,000 6/10/99 ................ 4.85 24,460,667
Vattenfall Treasury,
Inc.
5,000 1/08/99 ................ 5.05 4,995,090
Wells Fargo & Co.
7,000 4/15/99 ................ 5.05 6,897,878
15,000 3/12/99 ................ 5.11 14,850,958
30,000 2/26/99 ................ 5.14 29,760,133
1
<PAGE>
STATEMENT OF NET ASSETS (continued) Alliance Money Reserves
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Principal
Amount
(000) Security(a) Yield Value
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Westpac Capital
Corp.
$ 15,000 4/22/99 .................. 4.98% $ 14,769,675
Windmill Funding
Corp
8,000 2/25/99 (c)............... 5.23 7,936,078
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Total Commercial Paper
(amortized cost
$693,314,871)............. 693,314,871
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CERTIFICATES OF
DEPOSIT-14.8%
Canadian Imperial
Bank of Commerce
20,000 4.87%, 4/15/99 ........... 4.87 20,000,000
20,000 4.96%, 3/15/99 ........... 4.96 20,000,000
Chase Manhattan
Bank
10,000 4.90%, 3/15/99 ........... 4.90 10,000,000
Deutsche Bank
13,000 5.41%, 8/16/99 FRN........ 5.48 12,994,622
8,000 5.67%, 2/26/99 ........... 6.02 7,999,637
10,000 5.70%, 3/05/99 ........... 5.74 9,999,173
Dresdner Bank
15,000 5.51%, 1/15/99 ........... 5.67 14,998,942
National Westminster
Bank
23,000 5.65%, 3/03/99 ........... 5.70 22,998,124
Nordeutsche
Landesbank
10,000 5.66%, 7/27/99 ........... 5.71 9,997,283
10,000 5.72%, 4/16/99 ........... 5.77 9,998,622
Rabo Bank
18,000 5.65%, 7/26/99 ........... 5.70 17,995,133
Royal Bank of Canada
5,000 5.53%, 2/04/99 ........... 5.04 5,001,364
5,000 5.53%, 2/12/99 ........... 5.70 4,998,489
Swiss Bank
12,000 5.66%, 3/04/99 ........... 5.71 11,999,219
Toronto Dominion
Bank
25,000 4.81%, 8/09/99 FRN........ 4.87 24,991,173
Westdeutsche
Landesbank
15,000 5.32%, 2/16/99 ........... 5.32 15,000,000
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Total Certificates of
Deposit
(amortized cost
$218,971,781)............. 218,971,781
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CORPORATE
OBLIGATIONS-14.3%
Allstate Life Insurance
Funding Agreement
20,000 5.58%, 9/01/99 FRN (b).... 5.58 20,000,000
American General
Annuity Insurance Co.
Funding Agreement
5,000 5.57%, 9/01/99 (b)........ 5.57 5,000,000
General American
Funding Corp.
60,000 5.24%, 7/09/99 FRN........ 5.24 60,000,000
Merrill Lynch & Co.,
Inc.
15,000 4.87%, 1/20/99 FRN........ 4.87 15,000,000
10,000 5.28%, 9/30/99 FRN........ 5.28 10,000,000
10,000 5.49%, 2/16/99 FRN........ 5.49 10,000,000
15,000 5.50%, 6/01/99 FRN........ 5.50 15,000,000
Prudential Insurance
Co. of America
Funding Agreement
11,000 5.57%, 11/30/00 FRN....... 5.57 11,000,000
Security Benefit Life
Insurance Co.
Funding Agreement
20,000 5.41%, 10/14/99 FRN (b) .. 5.41 20,000,000
Sigma Finance
15,000 5.22%, 9/15/99 FRN (c).... 5.22 15,000,000
20,000 5.57%, 9/15/99 FRN (c).... 5.57 20,000,000
Travelers Life
Funding Agreement
10,000 5.59%, 10/21/99 FRN (b) .. 5.59 10,000,000
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Total Corporate
Obligations
(amortized cost
$211,000,000)............. 211,000,000
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BANK OBLIGATIONS-12.3%
Abbey National
15,000 4.80%, 7/15/99 FRN........ 4.87 14,994,916
35,000 5.42%, 2/17/99 FRN........ 5.48 34,997,393
Bayerische Landesbank
10,000 5.09%, 3/23/99 FRN........ 5.17 9,998,258
20,000 5.49%, 2/25/99 FRN........ 5.57 19,997,692
CS First Boston
10,000 5.28%, 3/24/99 (c)........ 5.28 10,000,000
2
<PAGE>
Alliance Money Reserves
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Principal
Amount
(000) Security(a) Yield Value
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First Union Bank of
North Carolina
$ 5,000 5.63%, 2/10/99 ......... 4.98% $ 5,003,131
30,000 5.19%, 3/29/99 ......... 5.19 30,000,000
Lasalle National Bank
10,000 5.11%, 3/15/99 ......... 5.11 10,000,000
7,000 5.65%, 3/24/99 ......... 5.65 7,000,000
10,000 5.19%, 3/15/99 ......... 5.19 10,000,000
Royal Bank of Canada
30,000 5.19%, 8/25/99 FRN...... 5.27 29,984,831
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Total Bank Obligations
(amortized cost
$181,976,221)........... 181,976,221
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U.S. GOVERNMENT &
AGENCY OBLIGATIONS-6.9%
Federal Home Loan
Banks
17,000 5.00%, 10/27/99 ........ 5.00 17,000,000
Federal National
Mortgage Assn.
20,000 4.98%, 5/21/99 FRN...... 5.06 19,994,047
Student Loan
Marketing Assn.
25,000 5.39%, 11/09/99 FRN..... 5.45 24,987,392
10,000 5.31%, 11/24/99 FRN..... 5.34 9,997,312
30,000 5.34%, 2/04/00 FRN...... 5.36 29,993,582
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Total U.S. Government &
Agency Obligations
(amortized cost
$101,972,333)........... 101,972,333
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PROMISSORY NOTES-3.9%
Goldman Sachs
Group LP
23,000 5.23%, 5/24/99 (c)...... 5.23 23,000,000
27,000 5.31%, 4/12/99 (c)...... 5.31 27,000,000
7,000 5.36%, 2/03/99 (c)...... 5.36 7,000,000
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Total Promissory Notes
(amortized cost
$57,000,000)............ 57,000,000
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REPURCHASE
AGREEMENT-0.3%
State Street Bank and
Trust Co.
4,000 4.50%, dated 12/31/98,
due 1/04/99 in the
amount of $4,002,000
(cost $4,000,000;
collateralized by $3,815,000
U.S. Treasury Note,
6.25%, 1/31/02,
value $4,082,050)
(amortized cost
$4,000,000) (d)......... 4.50 4,000,000
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TOTAL INVESTMENTS-99.5%
(amortized cost
$1,468,235,206)......... 1,468,235,206
Other assets less
liabilities-0.5%........ 6,964,174
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NET ASSETS-100%
(offering and redemption
price of $1.00 per share;
1,476,387,570 shares
outstanding)............ $ 1,475,199,380
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(a) All securities either mature or their interest rate changes in 397 days or
less.
(b) Funding Agreements which are illiquid securities and subject to restrictions
as to resale. These securities amounted to $70,000,000, representing 4.7% of
net assets (see Note A).
(c) 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, 1998, these securities amounted to $139,749,878, representing
9.5% of net assets.
(d) Repurchase agreement which is terminable within 7 days.
Glossary:
FRN - Floating Rate Note
See notes to financial statements.
3
<PAGE>
STATEMENT OF OPERATIONS
Six Months Ended December 31, 1998 (unaudited) Alliance Money Reserves
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<TABLE>
<S> <C> <C>
INVESTMENT INCOME
Interest............................................................. $ 36,221,446
EXPENSES
Advisory fee (Note B)................................................ $ 3,295,045
Distribution assistance and administrative service (Note C).......... 2,521,628
Transfer agency (Note B)............................................. 396,690
Registration fees.................................................... 311,715
Custodian fees....................................................... 109,613
Printing............................................................. 55,044
Audit and legal fees................................................. 19,421
Trustees' fees....................................................... 5,732
Miscellaneous........................................................ 4,197
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Total expenses....................................................... 6,719,085
Less: expense reimbursement.......................................... (123,103)
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Net expenses......................................................... 6,595,982
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Net investment income................................................ 29,625,464
REALIZED LOSS ON INVESTMENTS
Net realized loss on investment transactions......................... (113)
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NET INCREASE IN NET ASSETS FROM OPERATIONS.............................. $ 29,625,351
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</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
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<TABLE>
<CAPTION>
Six Months Ended
December 31, 1998 Year Ended
(unaudited) June 30, 1998
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<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment income................................................ $ 29,625,464 $ 53,704,005
Net realized gain (loss) on investment transactions.................. (113) 1,898
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Net increase in net assets from operations........................... 29,625,351 53,705,903
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income................................................ (29,625,464) (53,704,005)
TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST
Net increase (Note E)................................................ 308,852,555 155,581,838
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Total increase....................................................... 308,852,442 155,583,736
NET ASSETS
Beginning of year.................................................... 1,166,346,938 1,010,763,202
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End of period........................................................ $1,475,199,380 $1,166,346,938
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</TABLE>
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See notes to financial statements.
4
<PAGE>
NOTES TO FINANCIAL STATEMENTS
December 31, 1998 (unaudited) Alliance Money Reserves
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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 and Alliance Money Reserves (the
"Portfolio"), 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 par puts 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.
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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. For the
six months ended December 31, 1998, the reimbursement amounted to $123,103.
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 $154,562 for the six months ended December 31,
1998.
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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, 1998, the distribution fee amounted to $1,648,996. 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,
5
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued) Alliance Money Reserves
================================================================================
and legal and compliance support. For the six months ended December 31, 1998,
such payments by the Portfolio amounted to $872,632, of which $69,000 was paid
to the Adviser.
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NOTE D: Investment Transactions
At December 31, 1998, the cost of investments for federal income tax purposes
was the same as the cost for financial reporting purposes. At June 30, 1998, the
Portfolio had a capital loss carryforward of $1,188,077, of which $570,762
expires in 1999, $72,812 expires in 2001, $64,655 expires in 2002 and $479,848
expires in the year 2003.
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NOTE E: Transactions in Shares of Beneficial Interest
An unlimited number of shares ($.001 par value) are authorized. At December 31,
1998, capital paid-in aggregated $1,476,387,570. Transactions, all at $1.00 per
share, were as follows:
<TABLE>
<CAPTION>
Six Months Ended Year Ended
December 31, 1998 June 30,
(unaudited) 1998
---------------- ----------------
<S> <C> <C>
Shares sold............................................................. 1,262,337,639 3,468,843,260
Shares issued on reinvestments of dividends............................. 29,625,464 53,704,005
Shares redeemed......................................................... (983,110,548) (3,366,965,427)
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Net increase............................................................ 308,852,555 155,581,838
============= ==============
</TABLE>
6
<PAGE>
FINANCIAL HIGHLIGHTS Alliance Money Reserves
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Selected Data For A Share Of Beneficial Interest Outstanding Throughout Each
Period
<TABLE>
<CAPTION>
Six Months
Ended
December 31, Year Ended June 30,
1998 ----------------------------------------------
(unaudited) 1998 1997 1996 1995 1994
----------- ------ ------ ------ ------ ------
<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 (a) ................ .023 .047 .045 .047 .045 .025
------ ------ ------ ------ ------ ------
Less: Dividends
Dividends from net investment income ..... (.023) (.047) (.045) (.047) (.045) (.025)
------ ------ ------ ------ ------ ------
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) ....................... 4.55%(c) 4.83% 4.64% 4.81% 4.50% 2.57%
Ratios/Supplemental Data
Net assets, end of period (in millions) .. $1,475 $1,166 $1,011 $755 $2,510 $1,795
Ratios to average net assets of:
Expenses, net of waivers and
reimbursements ...................... 1.00%(c) 1.00% 1.00% 1.00% 1.00% 1.00%
Expenses, before waivers and
reimbursements ...................... 1.02%(c) 1.02% 1.06% 1.00% 1.04% 1.09%
Net investment income (a) ............. 4.49%(c) 4.72% 4.55% 4.80% 4.53% 2.55%
</TABLE>
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(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 the period.
(c) Annualized.
7
<PAGE>
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BULK RATE
Alliance Money Reserves U.S. POSTAGE
1345 Avenue of the Americas, New York, NY 10105 PAID
Toll free 1 (800) 221-5672 New York, NY
Permit No. 7131
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Yields. For current recorded yield information on Alliance Money Reserves, call
on a touch-tone telephone toll-free (800) 251-0539 and press the following
sequence of keys:
|1| |#| |1| |#| |3| |6| |#|
For non-touch-tone telephones, call toll-free (800) 221-9513
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AllianceCapital [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.
MONSR
