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Alliance
Treasury
Reserves
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Alliance Capital [LOGO](R)
Semi-Annual Report
December 31, 1999
(unaudited)
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<PAGE>
STATEMENT OF NET ASSETS
December 31, 1999 (unaudited) Alliance Treasury Reserves
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Principal
Amount
(000) Security Yield Value
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U.S. GOVERNMENT
OBLIGATIONS-89.2%
U.S. TREASURY
BILLS-62.7%
$ 20,000 1/27/00............. 4.41% $19,941,333
10,000 2/03/00............. 5.02 9,957,332
24,000 2/10/00............. 5.17 23,870,673
11,000 3/02/00............. 5.18 10,907,698
10,000 2/17/00............. 5.19 9,936,000
40,000 1/20/00............. 5.20 39,902,380
11,000 5/04/00............. 5.21 10,810,815
15,000 2/24/00............. 5.23 14,888,038
10,000 3/30/00............. 5.23 9,875,904
15,000 1/13/00............. 5.24 14,978,341
20,000 1/20/00............. 5.24 19,950,912
7,000 2/24/00............. 5.24 6,947,675
10,000 1/20/00............. 5.26 9,975,303
25,000 3/02/00............. 5.26 24,787,395
6,000 3/16/00............. 5.26 5,936,855
8,000 3/16/00............. 5.29 7,915,401
25,000 1/13/00............. 5.35 24,963,069
10,000 4/27/00............. 5.35 9,833,250
60,000 1/13/00............. 5.36 59,911,250
5,000 3/09/00............. 5.36 4,951,417
10,000 5/11/00............. 5.37 9,812,681
5,000 5/18/00............. 5.37 4,901,306
10,000 3/30/00............. 5.38 9,871,675
50,000 1/13/00............. 5.45 49,924,444
50,000 1/13/00............. 5.46 49,924,375
25,000 1/13/00............. 5.47 24,962,118
10,000 3/23/00............. 5.48 9,879,889
9,000 3/23/00............. 5.51 8,891,400
6,500 4/27/00............. 5.56 6,386,837
5,000 5/04/00............. 5.56 4,907,652
5,000 5/04/00............. 5.59 4,907,145
5,000 5/11/00............. 5.59 4,901,906
5,000 5/25/00............. 5.70 4,889,473
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534,401,942
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U.S. TREASURY
NOTES-26.5%
10,000 5.38%, 6/30/00...... 5.28 10,001,786
78,000 5.50%, 2/29/00...... 5.22 78,021,457
59,500 5.50%, 3/31/00...... 5.25 59,518,941
29,000 5.50%, 5/31/00...... 5.38 29,003,732
14,000 5.88%, 6/30/00...... 5.39 14,027,502
25,000 6.88%, 3/31/00...... 5.24 25,089,044
10,000 7.75%, 1/31/00...... 4.78 10,020,508
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225,682,970
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Total U.S. Government
Obligations
(amortized cost
$760,084,912)....... 760,084,912
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REPURCHASE
AGREEMENTS-9.7%
Barclays de Zoete Wedd
Securities, Inc.
25,000 4.50%, dated 12/31/99,
due 1/03/00 in the amount
of $25,009,375 (cost
$25,000,000;
collaterallized by
$20,000,000 U.S. Treasury
Bond, 6.125%, 11/15/27,
value $18,754,000 and
$6,560,000 U.S. Treasury
Bond, 6.875%, 8/15/25,
value $6,844,000)... 4.50 25,000,000
Greenwich Funding
Corp.
32,000 4.00%, dated 12/31/99,
due 1/03/00 in the amount of
$32,010,667 (cost $32,000,000;
collaterallized by $32,000,000
U.S. Treasury Note, 5.50%,
5/31/00, value $32,119,000
and $508,000 U.S. Treasury
Note, 8.75%, 8/15/00,
value $533,000)..... 4.00 32,000,000
State Street Bank and
Trust Co.
25,000 3.00%, dated 12/31/99,
due 1/03/00 in the amount
of $25,006,250 (cost
$25,000,000; collaterallized
by $23,890,000 U.S. Treasury
Note, 7.875%, 11/15/04,
value $25,502,575).. 3.00 25,000,000
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Total Repurchase
Agreements
(amortized cost
$82,000,000)........ 82,000,000
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1
<PAGE>
STATEMENT OF NET ASSETS (continued) Alliance Treasury Reserves
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Value
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TOTAL INVESTMENTS-98.9%
(amortized cost
$842,084,912)....... $842,084,912
Other assets less
liabilities-1.1%.... 9,793,654
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NET ASSETS-100%
(offering and redemption price
of $1.00 per share; 851,860,180
shares outstanding). $851,878,566
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See notes to financial statements.
2
<PAGE>
STATEMENT OF OPERATIONS
Six Months Ended December 31, 1999 (unaudited) Alliance Treasury Reserves
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<TABLE>
<S> <C> <C>
INVESTMENT INCOME
Interest............................................................. $ 20,639,043
EXPENSES
Advisory fee (Note B)................................................ $ 2,052,221
Distribution assistance and administrative service (Note C).......... 1,577,232
Transfer agency (Note B)............................................. 243,327
Custodian fees....................................................... 90,995
Registration fees.................................................... 76,897
Printing............................................................. 34,289
Audit and legal fees................................................. 15,011
Trustees' fees....................................................... 5,148
Miscellaneous........................................................ 8,244
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Total expenses....................................................... 4,103,364
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Net investment income................................................ 16,535,679
REALIZED GAIN ON INVESTMENTS
Net realized gain on investment transactions......................... 9,566
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NET INCREASE IN NET ASSETS FROM OPERATIONS.............................. $ 16,545,245
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</TABLE>
Statement Of Changes In Net Assets
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<TABLE>
<CAPTION>
Six Months Ended
December 31, 1999 Year Ended
(unaudited) June 30, 1999
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<S> <C> <C>
INCREASE IN NET ASSETS FROM OPERATIONS
Net investment income................................................ $ 16,535,679 $ 30,198,204
Net realized gain on investment transactions......................... 9,566 10,597
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Net increase in net assets from operations........................... 16,545,245 30,208,801
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income................................................ (16,535,679) (30,198,204)
Net realized gain on investments..................................... -0- (728)
TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST
Net increase (Note E)................................................ 40,117,074 71,685,912
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Total increase....................................................... 40,126,640 71,695,781
NET ASSETS
Beginning of year.................................................... 811,751,926 740,056,145
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End of period........................................................ $ 851,878,566 $ 811,751,926
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</TABLE>
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See notes to financial statements.
3
<PAGE>
NOTES TO FINANCIAL STATEMENTS
December 31, 1999 (unaudited) Alliance Treasury Reserves
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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 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.
5. Repurchase Agreements
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 are sufficient to cover the value of the repurchase agreements.
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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. 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 $103,847 for the six months ended December 31,
1999.
For the six months ended December 31, 1999, the Fund's expenses were reduced by
$2,904 under an expense offset arrangement with Alliance Fund Services, Inc.
4
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued) Alliance Treasury Reserves
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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, 1999, the distribution fee amounted to $1,025,841. 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, 1999, such payments by the
Portfolio amounted to $551,391, of which $66,000 was paid to the Adviser.
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NOTE D: Investment Transactions
At December 31, 1999, the cost of investments for federal income tax purposes
was the same as the cost for financial reporting purposes.
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NOTE E: Transactions in Shares of Beneficial Interest
An unlimited number of shares ($.001 par value) are authorized. At December 31,
1999, capital paid-in aggregated $851,860,180. 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............................................................. 1,377,262,282 2,440,073,136
Shares issued on reinvestments of dividends............................. 16,535,679 30,198,204
Shares redeemed......................................................... (1,353,680,887) (2,398,585,428)
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Net increase............................................................ 40,117,074 71,685,912
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</TABLE>
5
<PAGE>
FINANCIAL HIGHLIGHTS Alliance Treasury 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,
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
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Income from Investment Operations
Net investment income............. .0203 .0389(a) .0453(a) .0443(a) .0466(a) .0460(a)
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Less: Dividends
Dividends from net investment income (.0203) (.0389) (.0453) (.0443) (.0466) (.0460)
------ ------ ------ ------ ----- ------
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)................ 2.05% 3.96% 4.63% 4.53% 4.77 % 4.71%
Ratios/Supplemental Data
Net assets, end of period
(in thousands) $851,879 $811,752 $740,056 $704,084 $700,558 $493,702
Ratios to average net assets of:
Expenses, net of waivers and
reimbursements............... 1.00%(c) 1.00% .95% .85% .81% .69%
Expenses, before waivers and
reimbursements............... 1.00%(c) 1.02% 1.01% 1.00% 1.05% 1.05%
Net investment income.......... 4.03%(c) 3.88%(a) 4.53%(a) 4.43%(a) 4.64%(a) 4.86%(a)
</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. Total investment return
calculated for a period of less than one year is not annualized.
(c) Annualized.
6
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CHANGE IN INDEPENDENT ACCOUNTANT Alliance Treasury Reserves
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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.
7
<PAGE>
Alliance Treasury Reserves
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Alliance Treasury 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.
8
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Alliance Treasury Reserves -----------------
1345 Avenue of the Americas, New York, NY 10105 BULK RATE
Toll free 1 (800) 221-5672 U.S. POSTAGE
PAID
Yields. For current recorded yield information on Alliance New York, NY
Treasury Reserves, call on a touch-tone telephone toll-free Permit No. 7131
(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
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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.
ATRSR1299
