ALLIANCE VARIABLE PRODUCTS SERIES FUND GROWTH AND INCOME PORTFOLIO
SEMI-ANNUAL REPORT
JUNE 30, 2000
(UNAUDITED)
Investment Products Offered
> Are Not FDIC Insured
> May Lose Value
> Are Not Bank Guaranteed
GROWTH AND INCOME PORTFOLIO
TEN LARGEST HOLDINGS
June 30, 2000 (unaudited) Alliance Variable Products Series Fund
_______________________________________________________________________________
PERCENT OF
COMPANY U.S. $ VALUE NET ASSETS
-------------------------------------------------------------------------------
United Technologies Corp. $ 22,996,575 4.1%
Kroger Co. 22,397,850 4.0
Household International, Inc. 21,965,781 3.9
Pepsi Bottling Group, Inc. 21,131,750 3.7
First Data Corp. 20,132,862 3.6
Tenet Healthcare Corp. 19,793,700 3.5
Tyco International, Ltd. 19,774,325 3.5
Chase Manhattan Corp. 19,475,225 3.4
Schering-Plough Corp. 15,251,000 2.7
BankAmerica Corp. 14,658,700 2.6
$197,577,768 35.0%
1
GROWTH AND INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS
June 30, 2000 (unaudited) Alliance Variable Products Series Fund
_______________________________________________________________________________
Company Shares U.S. $ Value
-------------------------------------------------------------------------------
COMMON STOCKS-97.5%
FINANCE-18.9%
BANKING-MONEY CENTERS-5.4%
Chase Manhattan Corp. 422,800 $ 19,475,225
Citigroup, Inc. 185,150 11,155,287
------------
30,630,512
BANKING-REGIONAL-3.9%
Bank One Corp. 172,000 4,568,750
BankAmerica Corp. 340,900 14,658,700
FleetBoston Financial Corp. 75,000 2,550,000
------------
21,777,450
INSURANCE-2.1%
AFLAC, Inc. 121,000 5,558,438
PMI Group, Inc. 88,350 4,196,625
The Hartford Financial
Services Group, Inc. 36,000 2,013,750
------------
11,768,813
REAL ESTATE-0.1%
ProLogis Trust 37,090 790,481
MISCELLANEOUS-7.4%
Associates First Capital Corp. Cl.A 552,300 12,323,194
Household International, Inc. 528,500 21,965,781
MBNA Corp. 113,850 3,088,181
MGIC Investment Corp. 55,000 2,502,500
The CIT Group, Inc. Cl.A 119,600 1,943,500
------------
41,823,156
------------
106,790,412
TECHNOLOGY-13.0%
COMPUTER HARDWARE-1.7%
Compaq Computer Corp. 181,700 4,644,706
Gateway, Inc. (a) 92,000 5,221,000
------------
9,865,706
COMPUTER SERVICES-5.2%
Computer Sciences Corp. (a) 61,200 4,570,875
Electronic Data Systems Corp. 115,000 4,743,750
First Data Corp. 405,700 20,132,862
------------
29,447,487
CONTRACT MANUFACTURING-3.0%
Sanmina Corp. (a) 144,000 12,312,000
Solectron Corp. (a) 104,800 4,388,500
------------
16,700,500
SEMI-CONDUCTOR COMPONENTS-3.1%
Altera Corp. (a) 54,000 5,504,625
Fairchild Semiconductor Corp. (a) 60,200 2,438,100
Micron Technology, Inc. (a) 107,000 9,422,688
------------
17,365,413
------------
73,379,106
CONSUMER STAPLES-11.9%
BEVERAGES-3.7%
Pepsi Bottling Group, Inc. 724,000 21,131,750
COSMETICS-0.7%
Avon Products, Inc. 92,000 4,094,000
FOOD-1.7%
General Mills, Inc. 79,000 3,021,750
Heinz (H.J.) Co. 43,000 1,881,250
Nabisco Group Holding Corp. 181,800 4,715,438
------------
9,618,438
RETAIL-FOOD & DRUG-4.0%
Kroger Co. (a) 1,015,200 22,397,850
TOBACCO-1.8%
Philip Morris Cos., Inc. 374,000 9,934,375
------------
67,176,413
UTILITIES-10.7%
ELECTRIC & GAS UTILITIES-2.4%
Allegheny Energy, Inc. 51,900 1,420,763
CMS Energy Corp. 88,400 1,955,850
Duke Power Energy Corp. 20,600 1,161,325
FPL Group, Inc. 47,900 2,371,050
GPU, Inc. 143,700 3,888,881
Pinnacle West Capital Corp. 88,600 3,001,325
------------
13,799,194
TELEPHONE UTILITIES-7.3%
AT&T Corp. 148,241 4,688,121
BellSouth Corp. 215,000 9,164,375
MediaOne Group, Inc. (a) 52,000 3,448,315
Sprint Corp. 188,000 9,588,000
U.S. WEST, Inc. 68,500 5,873,875
WorldCom, Inc. (a) 181,752 8,337,873
------------
41,100,559
MISCELLANEOUS-1.0%
AES Corp. (a) 120,600 5,502,375
------------
60,402,128
CONSUMER SERVICES-9.1%
AIRLINES-1.5%
Continental Airlines, Inc. Cl.B (a) 180,000 8,460,000
BROADCASTING & CABLE-2.7%
A.H. Belo Corp. Series A 199,000 3,445,187
Clear Channel Communications, Inc. (a) 74,000 5,550,000
Comcast Corp. Cl.A (a) 155,000 6,277,500
------------
15,272,687
ENTERTAINMENT & LEISURE-0.5%
Royal Caribbean Cruises, Ltd. 138,600 2,564,100
2
Alliance Variable Products Series Fund
_______________________________________________________________________________
Shares or
Principal
Amount
Company (000) U.S. $ Value
-------------------------------------------------------------------------------
PRINTING & PUBLISHING-1.2%
Gannett Co., Inc. 112,000 $ 6,699,000
RETAIL - GENERAL MERCHANDISE-2.7%
Circuit City Stores-Circuit City Group 156,000 5,177,250
Limited, Inc. 307,000 6,638,875
Saks, Inc. (a) 342,500 3,596,250
------------
15,412,375
TOYS-0.5%
Mattel, Inc. 209,000 2,756,188
------------
51,164,350
ENERGY-9.0%
DOMESTIC INTEGRATED-3.2%
Kerr-Mcgee Corp. 108,500 6,394,719
USX-Marathon Group 470,500 11,791,906
------------
18,186,625
DOMESTIC PRODUCERS-0.3%
Murphy Oil Corp. 25,550 1,518,628
INTERNATIONAL-2.8%
BP Amoco Plc (ADR) 116,440 6,586,137
Repsol, SA (ADR) 169,000 3,348,313
Total Fina, SA (ADR) 74,000 5,684,125
------------
15,618,575
OIL SERVICE-1.0%
Noble Drilling Corp. (a) 140,200 5,774,488
MISCELLANEOUS-1.7%
Dynegy, Inc. 140,000 9,563,750
------------
50,662,066
HEALTH CARE-7.7%
DRUGS-2.7%
Schering-Plough Corp. 302,000 15,251,000
MEDICAL PRODUCTS-1.5%
Abbott Laboratories 190,000 8,466,875
MEDICAL SERVICES-3.5%
Tenet Healthcare Corp. 733,100 19,793,700
------------
43,511,575
MULTI-INDUSTRY COMPANIES-6.4%
Honeywell International, Inc. 392,493 13,222,108
Tyco International, Ltd. 417,400 19,774,325
U.S. Industries, Inc. 269,100 3,262,837
------------
36,259,270
BASIC INDUSTRIES-4.2%
CHEMICALS-2.8%
Eastman Chemical Co. 47,000 2,244,250
Lyondell Chemical Co. 605,000 10,133,750
Solutia, Inc. 265,000 3,643,750
------------
16,021,750
MINING & METALS-1.4%
Alcoa, Inc. 274,700 7,966,300
------------
23,988,050
CAPITAL GOODS-4.1%
MISCELLANEOUS-4.1%
United Technologies Corp. 390,600 22,996,575
CONSUMER MANUFACTURING-1.3%
BUILDING & RELATED-1.3%
Masco Corp. 413,000 7,459,813
TRANSPORTATION-1.2%
RAILROADS-0.9%
Burlington Northern Santa Fe Corp. 220,000 5,046,250
MISCELLANEOUS-0.3%
Wisconsin Central Transport Corp. (a) 120,000 1,560,000
------------
6,606,250
Total Common Stocks
(cost $503,786,947) 550,396,008
SHORT-TERM INVESTMENT-3.1%
TIME DEPOSIT-3.1%
State Street Euro Dollar
6.00%, 7/03/00
(amortized cost $17,529,000) 17,529 17,529,000
TOTAL INVESTMENTS-100.6%
(cost $521,315,947) 567,925,008
Other assets less liabilities-(0.6%) (3,292,876)
NET ASSETS-100% $564,632,132
(a) Non-income producing security.
Glossary:
ADR - American Depositary Receipt
See Notes to Financial Statements.
3
GROWTH AND INCOME PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000 (unaudited) Alliance Variable Products Series Fund
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $521,315,947) $567,925,008
Cash 157
Receivable for investment securities sold 3,364,195
Dividends and interest receivable 823,082
Total assets 572,112,442
LIABILITIES
Payable for investment securities purchased 7,067,831
Advisory fee payable 293,737
Accrued expenses 118,742
Total liabilities 7,480,310
NET ASSETS $564,632,132
COMPOSITION OF NET ASSETS
Capital stock, at par $ 26,427
Additional paid-in capital 489,485,417
Undistributed net investment income 2,566,748
Accumulated net realized gain on investments 25,944,479
Net unrealized appreciation of investments 46,609,061
$564,632,132
Class A Shares
Net assets $540,213,818
Shares of capital stock outstanding 25,281,034
Net asset value per share $ 21.37
Class B Shares
Net assets $ 24,418,314
Shares of capital stock outstanding 1,145,899
Net asset value per share $ 21.31
See Notes to Financial Statements.
4
GROWTH AND INCOME PORTFOLIO
STATEMENT OF OPERATIONS
Six Months Ended June 30, 2000 (unaudited)
Alliance Variable Products Series Fund
_______________________________________________________________________________
INVESTMENT INCOME
Dividends (net of foreign tax withheld of $13,034) $ 4,060,286
Interest 408,141
Total investment income 4,468,427
EXPENSES
Advisory fee 1,655,655
Distribution fee - Class B 16,505
Custodian 65,800
Audit and legal 42,192
Administrative 31,472
Printing 28,382
Directors' fees 578
Transfer agency 496
Miscellaneous 8,898
Total expenses 1,849,978
Net investment income 2,618,449
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on investment transactions 26,103,667
Net change in unrealized appreciation/depreciation
of investments (1,900,510)
Net gain on investments 24,203,157
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 26,821,606
See Notes to Financial Statements.
5
GROWTH AND INCOME PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS Alliance Variable Products Series Fund
_______________________________________________________________________________
Six Months Ended Year Ended
June 30, 2000 December 31,
(unaudited) 1999
---------------- -------------
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment income $ 2,618,449 $ 3,401,733
Net realized gain on investments 26,103,667 35,901,080
Net change in unrealized
appreciation/depreciation of investments (1,900,510) 7,123,872
Net increase in net assets from operations 26,821,606 46,426,685
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income
Class A (3,288,670) (3,318,107)
Class B (113,881) -0-
Net realized gain on investments
Class A (34,576,976) (42,704,228)
Class B (1,241,725) -0-
CAPITAL STOCK TRANSACTIONS
Net increase 46,876,159 148,136,928
Total increase 34,476,513 148,541,278
NET ASSETS
Beginning of period 530,155,619 381,614,341
End of period (including undistributed net
investment income of $2,566,748 and
$3,350,850, respectively) $564,632,132 $530,155,619
See Notes to Financial Statements.
6
GROWTH AND INCOME PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
June 30, 2000 (unaudited) Alliance Variable Products Series Fund
_______________________________________________________________________________
NOTE A: Significant Accounting Policies
The Growth and Income Portfolio (the "Portfolio") is a series of Alliance
Variable Products Series Fund, Inc. (the "Fund"). The Portfolio's investment
objective is to seek reasonable current income and reasonable opportunity for
appreciation through investments primarily in dividend-paying, common stocks of
good quality. The Fund was incorporated in the State of Maryland on November
17, 1987, as an open-end series investment company. The Fund had no operations
prior to November 28, 1990. The Fund offers nineteen separately managed pools
of assets which have differing investment objectives and policies. The Fund
currently issues shares of the Conservative Investors Portfolio, Growth
Investors Portfolio, Total Return Portfolio, Growth and Income Portfolio,
Growth Portfolio, International Portfolio, Premier Growth Portfolio, Quasar
Portfolio, Real Estate Investment Portfolio, Technology Portfolio, Utility
Income Portfolio, Worldwide Privatization Portfolio, Global Bond Portfolio,
Global Dollar Government Portfolio, High-Yield Portfolio, North American
Government Income Portfolio, Short-Term Multi-Market Portfolio, U.S.
Government/High Grade Securities Portfolio and Money Market Portfolio (the
"Portfolios"). On January 5, 1999, the creation of a second class of shares,
Class B shares, was approved by the Board of Directors. The Fund offers Class A
and Class B shares. Both classes of shares have identical voting, dividend,
liquidating and other rights, except that Class B shares bear a distribution
expense and have exclusive voting rights with respect to the Class B
distribution plan. As of June 30, 2000, the following Portfolios had Class B
shares issued and outstanding: Growth and Income Portfolio, Growth Portfolio,
Premier Growth Portfolio, Technology Portfolio, Global Bond Portfolio, U.S.
Government/High Grade Securities Portfolio and Money Market Portfolio.
The Fund offers and sells its shares only to separate accounts of certain life
insurance companies for the purpose of funding variable annuity contracts and
variable life insurance policies. Sales are made without a sales charge at each
Portfolio's net asset value per share.
The financial statements have been prepared in conformity with accounting
principles generally accepted in the United States, 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 Fund.
1. Security Valuation
Portfolio securities traded on a national securities exchange or on a foreign
securities exchange (other than foreign securities exchanges whose operations
are similar to those of the United States over-the-counter market) or on The
Nasdaq Stock Market, Inc., are generally valued at the last reported sales
price or if no sale occurred, at the mean of the closing bid and asked price on
that day. Readily marketable securities traded in the over-the-counter market,
securities listed on a foreign securities exchange whose operations are similar
to the U.S. over-the-counter market, and securities listed on a national
securities exchange whose primary market is believed to be over-the-counter
(but excluding securities traded on The Nasdaq Stock Market, Inc.), are valued
at the mean of the current bid and asked price. U.S. government and fixed
income securities which mature in 60 days or less are valued at amortized cost,
unless this method does not represent fair value. Securities for which current
market quotations are not readily available are valued at their fair value as
determined in good faith by, or in accordance with procedures adopted by, the
Board of Directors. Fixed income securities may be valued on the basis of
prices obtained from a pricing service when such prices are believed to reflect
the fair market value of such securities.
Securities in which the Money Market Portfolio invests are valued at amortized
cost which approximates fair value, under which method a portfolio instrument
is valued at cost and any premium or discount is amortized on a straight-line
basis to maturity.
2. Currency Translation
Assets and liabilities denominated in foreign currencies and commitments under
forward exchange currency contracts are translated into U.S. dollars at the
mean of the quoted bid and asked price of such currencies against the U.S.
dollar. Purchases and sales of portfolio securities are translated at the rates
of exchange prevailing when such securities were acquired or sold. Income and
expenses are translated at rates of exchange prevailing when accrued.
The Portfolios isolate that portion of the results of operations resulting from
changes in foreign exchange rates on investments from the fluctuations arising
from changes in market prices of securities held.
Net realized gains and losses on foreign currency transactions represent
foreign exchange gains and losses from sales and maturities of securities and
forward exchange currency contracts, holdings of foreign currencies, exchange
gains and losses realized between the trade and
7
GROWTH AND INCOME PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(continued) Alliance Variable Products Series Fund
_______________________________________________________________________________
settlement dates on investment transactions, and the difference between the
amounts of interest, dividends and foreign witholding tax reclaims recorded on
the Portfolio's books and the U.S. dollar equivalent amounts actually received
or paid. Net currency gains and losses from valuing foreign currency
denominated assets and liabilities at period end exchange rates are reflected
as a component of net unrealized appreciation (depreciation) of investments and
foreign currency denominated assets and liabilities.
3. Taxes
It is the Fund'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
shareholders. Therefore, no provisions for federal income or excise taxes are
required.
4. Investment Income and Investment Transactions
Dividend income is recorded on the ex-dividend date. Interest income is accrued
daily. Investment transactions are accounted for on the date securities are
purchased or sold. The Fund accretes discounts as adjustments to interest
income and in the case of the Money Market Portfolio, amortizes premium as
well. Investment gains and losses are determined on the identified cost basis.
5. Dividends and Distributions
Each Portfolio declares and distributes dividends and distributions from net
investment income and net realized gains, respectively, if any, at least
annually, except for dividends on the Money Market Portfolio, which are
declared daily and paid monthly. Income dividends and capital gains
distributions to shareholders are recorded on the ex-dividend date.
Income dividends and capital gains distributions are determined in accordance
with federal tax regulations and may differ from those determined in accordance
with accounting principles generally accepted in the United States. To the
extent these differences are permanent, such amounts are reclassified within
the capital accounts based on their federal tax basis treatment; temporary
differences do not require such reclassification.
NOTE B: Advisory Fee and Other Transactions with Affiliates
Under the terms of an investment advisory agreement, the Portfolio pays
Alliance Capital Management L.P. (the "Adviser"), an investment advisory fee at
an annualized rate of .625% of the Portfolio's average daily net assets.
Pursuant to the advisory agreement, the Portfolio paid $31,472 to the Adviser
representing the cost of certain legal and accounting services provided to the
Portfolio by the Adviser for the six months ended June 30, 2000.
During the six months ended June 30, 2000, the Adviser agreed to waive its fee
and to reimburse the additional operating expenses to the extent necessary to
limit total operating expenses on an annual basis to .95% and 1.20% of the
average daily net assets for Class A and Class B shares, respectively. Expense
waivers/reimbursements, if any, are accrued daily and paid monthly. For the six
months ended June 30, 2000, the Portfolio received no such
waivers/reimbursements.
Brokerage commissions paid on investment transactions for the six months ended
June 30, 2000, amounted to $463,702 , none of which was paid to brokers
utilizing the services of the Pershing Division of Donaldson, Lufkin & Jenrette
Securities Corp. ("DLJ"), an affiliate of the Adviser, and of which $34,043 was
paid to DLJ directly.
The Fund 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 Fund. For the six months
ended June 30, 2000, the Fund paid a total of $9,000 which was allocated evenly
among the Portfolios.
NOTEC: Distribution Plan
The Portfolios have each adopted a Plan for Class B shares of the Fund pursuant
to Rule 12b-1 under the Investment Company Act of 1940 (each a "Plan" and
collectively the "Plans"). Under the Plans, the Portfolios pay distribution and
servicing fees to the Distributor at an annual rate of up to .50% of each
portfolio's average daily net assets attributable to the Class B shares. The
fees are accrued daily and paid monthly. The Board of Directors currently limit
payments under the Plan to .25% of each Portfolio's average daily net assets
attributable to Class B shares. The Plans provide that the Distributor will use
such payments in their entirety for distribution assistance and promotional
activities.
The Portfolios are not obligated under the Plans to pay any distribution
services fee in excess of the amounts set forth above. The purpose of the
payments to the Distributor under the Plans is to compensate the Distributor
for
8
Alliance Variable Products Series Fund
_______________________________________________________________________________
its distribution services with respect to the sale of each Portfolio's shares.
Since the Distributor's compensation is not directly tied to its expenses, the
amount of compensation received by it under the Plan during any year may be
more or less than its actual expenses. For this reason, the Plans are
characterized by the staff of the Commission as being of the "compensation"
variety.
In the event that a Plan is terminated or not continued, no distribution
services fees (other than current amounts accrued but not yet paid) would be
owed by the Portfolios to the Distributor with respect to the relevant Plan.
The Plan also provides that the Adviser may use its own resources to finance
the distribution of each Portfolio's shares.
NOTE D: Investment Transactions
Purchases and sales of investment securities (excluding short-term investments)
for the six months ended June 30, 2000, were as follows:
Purchases:
Stocks and debt obligations $183,196,783
U.S. government and agencies -0-
Sales:
Stocks and debt obligations $161,602,889
U.S. government and agencies -0-
At June 30, 2000, the cost of investments for federal income tax purposes was
substantially the same as the cost for financial reporting purposes.
Accordingly, gross unrealized appreciation and unrealized depreciation are as
follows:
Gross unrealized appreciation $ 89,184,997
Gross unrealized depreciation (42,575,936)
Net unrealized appreciation $ 46,609,061
1. Forward Exchange Currency Contracts
All Portfolios (except for the Global Dollar Government Portfolio, U.S.
Government/High Grade Securities Portfolio and Money Market Portfolio) may
enter into forward exchange currency contracts to hedge exposure to changes in
foreign currency exchange rates on foreign portfolio holdings, to hedge certain
firm purchase and sales commitments denominated in foreign currencies and for
investment purposes. A forward exchange currency contract is a commitment to
purchase or sell a foreign currency at a future date at a negotiated forward
rate.
The Portfolios may enter into contracts to deliver or receive foreign currency
it will receive from or require for its normal investment activities. It may
also use contracts in a manner intended to protect foreign currency denominated
securities from declines in value due to unfavorable exchange rate movements.
The gain or loss arising from the difference between the original contracts and
the closing of such contracts is included in realized gains or losses from
foreign currency transactions. Fluctuations in the value of forward exchange
currency contracts are recorded for financial reporting purposes as unrealized
gains or losses by the Portfolio.
Each Portfolio's custodian will place and maintain cash not available for
investment or other liquid assets in a separate account of the Portfolio having
an approximate value equal to the aggregate amount of the respective
portfolio's commitments under forward exchange currency contracts entered into
with respect to position hedges.
Risks may arise from the potential inability of a counterparty to meet the
terms of a contract and from unanticipated movements in the value of a foreign
currency relative to the U.S. dollar. The face or contract amount, in U.S.
dollars, reflects the total exposure each Portfolio has in that particular
currency contract.
At June 30, 2000, the Portfolio had no outstanding forward exchange currency
contracts.
2. Option Transactions
For hedging and investment purposes, all Portfolios (except for the Money
Market Portfolio) may purchase and write call options and purchase put options
on U.S. securities that are traded on U.S. securities exchanges and
over-the-counter markets.
The risk associated with purchasing an option is that the Portfolio pays a
premium whether or not the option is
9
GROWTH AND INCOME PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(continued) Alliance Variable Products Series Fund
_______________________________________________________________________________
exercised. Additionally, the Portfolio bears the risk of loss of premium and
change in market value should the counterparty not perform under the contract.
Put and call options purchased are accounted for in the same manner as
portfolio securities. The cost of securities acquired through the exercise of
call options is increased by premiums paid. The proceeds from securities sold
through the exercise of put options are decreased by the premiums paid.
When the Portfolio writes an option, the premium received by the Portfolio is
recorded as a liability and is subsequently adjusted to the current market
value of the option written. Premiums received from which written options
expire unexercised are recorded by the Portfolio on the expiration date as
realized gains from written options. The difference between the premium
received and the amount paid on effecting a closing purchase transaction,
including brokerage commissions, is also treated as a realized gain, or if the
premium received is less than the amount paid for the closing purchase
transaction, as a realized loss. If a call option is exercised, the premium
received is added to the proceeds from the sale of the underlying security or
currency in determining whether the Portfolio has realized a gain or loss. In
writing an option, the Portfolio bears the market risk of an unfavorable change
in the price of the security or currency underlying the written option.
Exercise of an option written by the Portfolio could result in the Portfolio
selling or buying a security or currency at a price different from the current
market value.
The Portfolio had no transactions in options written for the six months ended
June 30, 2000.
NOTE E: Capital Stock
There are 20,000,000,000 shares of capital stock, $.001 par value per share of
the Fund authorized divided into two classes, designated Class A and Class B.
Each lass consists of 10,000,000,000 authorized shares. Transactions in capital
stock were as follows:
SHARES AMOUNT
--------------------------- ------------------------------
Six Months Ended Year Ended Six Months Ended Year Ended
June 30, 2000 December 31, June 30, 2000 December 31,
(unaudited) 1999 (unaudited) 1999
------------ ------------ -------------- --------------
CLASS A
Shares sold 4,501,343 7,229,780 $ 98,404,411 $158,338,431
Shares issued in
reinvestment of
dividends and
distributions 1,690,431 2,179,088 37,865,646 46,022,335
Shares redeemed (4,879,594) (2,910,169) (106,582,090) (64,051,586)
Net increase 1,312,180 6,498,699 $ 29,687,967 $140,309,180
Six Months June 1, Six Months June 1,
Ended 1999* to Ended 1999* to
June 30, 2000 December 31, June 30, 2000 December 31,
(unaudited) 1999 (unaudited) 1999
------------ ------------ -------------- --------------
CLASS B
Shares sold 799,588 384,785 $ 17,586,074 $ 8,209,638
Shares issued in
reinvestment of
dividends and
distributions 60,654 -0- 1,355,606 -0-
Shares redeemed (81,651) (17,477) (1,753,488) (381,890)
Net increase 778,591 367,308 $ 17,188,192 $ 7,827,748
NOTE F: Concentration of Risk
Investing in securities of foreign companies or foreign governments involves
special risks which include changes in foreign exchange rates and the
possibility of future political and economic developments which could adversely
affect the value of such securities. Moreover, securities of many foreign
companies or foreign governments and their markets may be less liquid and their
prices more volatile than those of comparable United States companies or of the
United States government.
* Commencement of distribution.
10
Alliance Variable Products Series Fund
_______________________________________________________________________________
NOTE G:Bank Borrowing
A number of open-end mutual funds managed by the Adviser, including the Fund,
participate in a $750 million revolving credit facility (the "Facility")
intended to provide short-term financing if necessary, subject to certain
restrictions in connection with abnormal redemption activity. Commitment fees
related to the Facility are paid by the participating funds and are included in
the miscellaneous expenses in the statement of operations. The Fund did not
utilize the Facility during the six months ended June 30, 2000.
11
GROWTH AND INCOME PORTFOLIO
FINANCIAL HIGHLIGHTS Alliance Variable Products Series Fund
_______________________________________________________________________________
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
<TABLE>
<CAPTION>
CLASS A
----------------------------------------------------------------------------
Six Months
Ended Year Ended December 31,
June 30, 2000 ---------------------------------------------------------------
(unaudited) 1999 1998 1997 1996 1995
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $21.79 $21.84 $19.93 $16.40 $15.79 $11.85
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a) .11 .16 .22 .21(b) .24(b) .27(b)
Net realized and unrealized gain on
investment transactions 1.08 2.25 3.81 4.39 3.18 3.94
Net increase in net asset value from
operations 1.19 2.41 4.03 4.60 3.42 4.21
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.14) (.18) (.16) (.13) (.25) (.13)
Distributions from net realized gains (1.47) (2.28) (1.96) (.94) (2.56) (.14)
Total dividends and distributions (1.61) (2.46) (2.12) (1.07) (2.81) (.27)
Net asset value, end of period $21.37 $21.79 $21.84 $19.93 $16.40 $15.79
TOTAL RETURN
Total investment return based on net
asset value (c) 5.13% 11.37% 20.89% 28.80% 24.09% 35.76%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $540,214 $522,163 $381,614 $250,202 $126,729 $41,993
Ratios to average net assets of:
Expenses, net of waivers and
reimbursements .69%(d) .71% .73% .72% .82% .79%
Expenses, before waivers and
reimbursements .69%(d) .71% .73% .72% .82% .79%
Net investment income .99%(d) .75% 1.07% 1.16%(b) 1.58%(b) 1.95%(b)
Portfolio turnover rate 31% 46% 79% 86% 87% 150%
</TABLE>
See footnote summary on page 13.
12
Alliance Variable Products Series Fund
_______________________________________________________________________________
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
CLASS B
---------------------------
Six Months June 1, 1999(e)
Ended to
June 30, 2000 December 31,
(unaudited) 1999
------------- ------------
Net asset value, beginning of period $21.76 $21.37
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a) .10 .07
Net realized and unrealized gain on
investment transactions 1.06 .32
Net increase in net asset value from
operations 1.16 .39
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.14) -0-
Distributions from net realized gains (1.47) -0-
Total dividends and distributions (1.61) -0-
Net asset value, end of period $21.31 $21.76
TOTAL RETURN
Total investment return based on net
asset value (c) 4.97% 1.83%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $24,418 $7,993
Ratios to average net assets of:
Expenses (d) .95% .97%
Net investment income (d) .81% .55%
Portfolio turnover rate 31% 46%
(a) Based on average shares outstanding.
(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. Total investment return calculated
for a period of less than one year is not annualized.
(d) Annualized.
(e) Commencement of distribution.
13
Alliance Variable Products Series Fund
_______________________________________________________________________________
BOARD OF DIRECTORS
John D. Carifa, Chairman and President
Ruth Block (1)
David H. Dievler (1)
John H. Dobkin (1)
William H. Foulk, Jr. (1)
Dr. James M. Hester (1)
Clifford L. Michel (1)
Donald J. Robinson (1)
OFFICERS
Andrew Aran, Senior Vice President
Kathleen A. Corbet, Senior Vice President
Gregory Dube, Senior Vice President
Alfred L. Harrison, Senior Vice President
Nelson Jantzen, Senior Vice President
Wayne D. Lyski, Senior Vice President
Raymond J. Papera, Senior Vice President
Peter Anastos, Vice President
Bruce K. Aronow, Vice President
Edward Baker, Vice President
Thomas J. Bardong, Vice President
Matthew Bloom, Vice President
Mark H. Breedon, Vice President
Russell Brody, Vice President
Nicholas D.P. Carn, Vice President
Paul J. DeNoon, Vice President
Joseph C. Dona, Vice President
Vicki L. Fuller, Vice President
F. Jeanne Goetz, Vice President
Gerald T. Malone, Vice President
Michael Mon, Vice President
Douglas J. Peebles, Vice President
Daniel G. Pine, Vice President
Paul C. Rissman, Vice President
Tyler J. Smith, Vice President
Jean Van De Walle, Vice President
Sandra Yeager, Vice President
Edmund P. Bergan, Jr., Secretary
Mark D. Gersten, Treasurer & Chief Financial Officer
Thomas Manley, Controller
CUSTODIAN
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
DISTRIBUTOR
Alliance Fund Distributors, Inc.
1345 Avenue of the Americas
New York, NY 10105
INDEPENDENT AUDITORS
Ernst & Young LLP
787 Seventh Avenue
New York, NY 10019
LEGAL COUNSEL
Seward & Kissel
One Battery Park Plaza
New York, NY 10004
TRANSFER AGENT
Alliance Fund Services, Inc.
P.O. Box 1520
Secaucus, NJ 07096-1520
Toll-free 1-(800) 221-5672
(1) Member of the Audit Committee.
14
