ALLIANCE
----------------------
VARIABLE PRODUCTS
----------------------
SERIES FUND
----------------------
MONEY MARKET PORTFOLIO
----------------------
SEMI-ANNUAL REPORT
JUNE 30, 2000
(UNAUDITED)
<PAGE>
Investment Products Offered
---------------------------
> Are Not FDIC Insured
> May Lose Value
> Are Not Bank Guaranteed
---------------------------
<PAGE>
MONEY MARKET PORTFOLIO
PORTFOLIO OF INVESTMENTS
June 30, 2000 (unaudited) Alliance Variable Products Series Fund
================================================================================
Principal
Amount
Company (000) U.S. $ Value
--------------------------------------------------------------------------------
COMMERCIAL PAPER-57.6% Alcoa, Inc.
6.57%, 8/24/00 .......................... $ 2,035 $ 2,014,945
American General Corp.
6.65%, 8/16/00 .......................... 1,800 1,784,705
Associates First Capital Corp.
6.93%, 7/03/00 .......................... 2,000 1,999,230
AT&T Corp.
6.60%, 7/24/00 .......................... 1,800 1,792,410
Bell Atlantic Network Funding
6.53%, 7/27/00 .......................... 1,800 1,791,511
Bemis Co., Inc.
6.52%, 7/10/00 .......................... 2,000 1,996,740
6.57%, 8/01/00 .......................... 1,800 1,789,816
Caterpillar Financial Services, Ltd
6.54%, 7/31/00 .......................... 2,000 1,989,100
CIT Group, Inc.
6.56%, 8/15/00 .......................... 1,800 1,785,240
Credit Suisse First Boston, Inc.
6.75%, 10/25/00 (a) ..................... 2,000 1,956,500
DaimlerChrysler Corp.
6.65%, 9/21/00 .......................... 1,800 1,772,735
Eastman Kodak Co.
6.95%, 7/03/00 .......................... 2,000 1,999,228
Equilon Enterprise LLC
6.53%, 7/25/00 .......................... 1,800 1,792,164
General Electric Financial
Assurance
6.98%, 7/05/00 .......................... 6,000 5,995,347
Gillette Co.
6.97%, 7/05/00 .......................... 2,000 1,998,451
Goldman Sachs Group, Inc.
6.61%, 9/13/00 .......................... 1,800 1,775,543
Home Depot Real Estate
Funding Corp.
6.77%, 11/06/00 ......................... 1,800 1,756,672
Kellogg Co.
6.55%, 8/14/00 .......................... 1,800 1,785,590
Marsh & McLennan Cos., Inc.
6.85%, 7/11/00 .......................... 1,800 1,796,575
Metlife Funding, Inc.
6.62%, 7/27/00 .......................... 2,000 1,990,438
National Rural Utilities Corp.
6.57%, 8/17/00 .......................... 1,800 1,784,560
Peoples Energy Corp.
6.58%, 8/23/00 .......................... 1,800 1,782,563
Pfizer Corp.
6.49%, 7/17/00 (a) ...................... 5,000 4,985,578
Philip Morris Capital Corp.
6.65%, 7/20/00 (a) ...................... 1,800 1,793,682
Procter & Gamble Co.
6.57%, 8/29/00 .......................... 2,000 1,978,465
Salomon Smith Barney, Inc.
6.60%, 9/14/00 .......................... 1,800 1,775,250
Sara Lee Corp.
6.65%, 7/05/00 .......................... 2,000 1,998,456
SBC Communications, Inc.
6.57%, 8/28/00 .......................... 1,800 1,780,947
Snap-On, Inc.
6.57%, 8/09/00 .......................... 1,800 1,787,188
Tampa Electric Co.
6.55%, 7/31/00 .......................... 1,800 1,790,175
Teacher's Insurance
6.60%, 7/31/00 .......................... 1,800 1,790,100
UBS Finance Delaware, Inc.
6.92%, 7/05/00 .......................... 6,000 5,995,387
Virginia Electric & Power Co.
6.52%, 7/17/00 .......................... 1,800 1,794,784
Wal-Mart Stores, Inc.
6.58%, 9/06/00 .......................... 2,000 1,975,508
Wells Fargo & Co.
6.55%, 7/31/00 .......................... 2,000 1,989,083
------------
Total Commercial Paper
(amortized cost
$76,564,666) ............................ 76,564,666
------------
U.S. GOVERNMENT
OBLIGATIONS-33.2%
Federal Home Loan Bank
6.40%, 2/09/01 .......................... 4,000 3,999,442
6.50%, 7/05/00 .......................... 4,700 4,696,605
6.637%, 10/06/00 FRN .................... 8,000 7,998,550
Federal Home Loan Corp.
6.02%, 7/05/00 .......................... 10,400 10,393,044
Federal National Mortgage
Association
6.602%, 10/05/00 FRN .................... 5,000 4,999,359
Student Loan Marketing
Association
6.602%, 10/04/00 FRN .................... 4,000 3,999,492
6.654%, 10/12/00 FRN .................... 8,000 7,997,580
------------
Total U.S. Government
Obligations
(amortized cost
$44,084,072) ............................ 44,084,072
------------
CERTIFICATES OF
DEPOSIT-6.0%
American Express Centurion
Bank
6.57%, 7/31/00 .......................... 2,000 2,000,000
Harris Trust & Savings Bank
6.58%, 7/05/00 .......................... 2,000 2,000,000
Southtrust Bank NA
6.66%, 7/17/00 .......................... 2,000 2,000,000
Wachovia Bank NA
5.95%, 9/11/00 .......................... 2,000 2,000,000
------------
Total Certificates of
Deposit
(amortized cost
$8,000,000) ............................. 8,000,000
------------
1
<PAGE>
MONEY MARKET PORTFOLIO
PORTFOLIO OF INVESTMENTS
(continued) Alliance Variable Products Series Fund
================================================================================
Principal
Amount
Company (000) U.S. $ Value
--------------------------------------------------------------------------------
CORPORATE
OBLIGATION-1.5%
Dorada Finance, Inc. MTN
6.02%, 9/15/00 (a)
(amortized cost
$2,000,000) ............................. $ 2,000 $ 2,000,000
------------
BANKERS
ACCEPTANCE-1.3%
Bank One NA Illinois
6.72%, 9/29/00 (a)
(amortized cost
$1,800,000) ............................. 1,800 1,800,000
------------
Company U.S. $ Value
--------------------------------------------------------------------------------
TOTAL INVESTMENTS-99.6%
(cost $132,448,738) ..................... $132,448,738
Other assets less
liabilities-0.4% ........................ 490,395
------------
NET ASSETS-100% ............................ $132,939,133
============
--------------------------------------------------------------------------------
(a) Securities issued in reliance on Section (4) 2 or Rule 144A of the
Securities Act of 1933. These securities may be resold in transactions
exempt from registration normally to qualified institutional buyers. At
June 30, 2000, the aggregate market value of these securities amounted to
$12,535,760 or 9.4% of net assets.
Glossary of Terms:
FRN - Floating Rate Note
MTN - Medium Term Note
See Notes to Financial Statements.
2
<PAGE>
MONEY MARKET PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000 (unaudited) Alliance Variable Products Series Fund
================================================================================
ASSETS
Investments in securities, at value (cost $132,448,738) ..... $132,448,738
Cash ........................................................ 514,413
Interest receivable ......................................... 717,617
------------
Total assets ................................................ 133,680,768
------------
LIABILITIES
Dividend payable ............................................ 661,217
Advisory fee payable ........................................ 56,367
Accrued expenses ............................................ 24,051
------------
Total liabilities ........................................... 741,635
------------
NET ASSETS ..................................................... $132,939,133
============
COMPOSITION OF NET ASSETS
Capital stock, at par ....................................... $ 132,933
Additional paid-in capital .................................. 132,799,583
Undistributed net investment income ......................... 573
Accumulated net realized gain on investments ................ 6,044
------------
$132,939,133
============
Class A shares
Net assets .................................................. $131,485,179
============
Shares of capital stock outstanding ......................... 131,478,950
============
Net asset value per share ................................... $ 1.00
============
Class B shares
Net assets .................................................. $ 1,453,954
============
Shares of capital stock outstanding ......................... 1,453,896
============
Net asset value per share ................................... $ 1.00
============
--------------------------------------------------------------------------------
See Notes to Financial Statements.
3
<PAGE>
MONEY MARKET PORTFOLIO
STATEMENT OF OPERATIONS
Six Months Ended June 30, 2000
(unaudited) Alliance Variable Products Series Fund
================================================================================
INVESTMENT INCOME
Interest .................................................. $4,155,868
----------
EXPENSES
Advisory fee .............................................. 336,148
Distribution fee - Class B ................................ 1,655
Custodian ................................................. 44,370
Administrative ............................................ 31,750
Audit and legal ........................................... 14,074
Printing .................................................. 4,690
Directors' fees ........................................... 606
Transfer agency ........................................... 456
Miscellaneous ............................................. 2,776
----------
Total expenses ............................................ 436,525
----------
Net investment income ..................................... 3,719,343
----------
REALIZED GAIN ON INVESTMENTS
Net realized gain on investment transactions .............. 6,415
----------
NET INCREASE IN NET ASSETS FROM OPERATIONS ................... $3,725,758
==========
--------------------------------------------------------------------------------
See Notes to Financial Statements.
4
<PAGE>
MONEY MARKET PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS Alliance Variable Products Series Fund
================================================================================
<TABLE>
<CAPTION>
Six Months Ended Year Ended
June 30. 2000 December 31,
(unaudited) 1999
------------- -------------
<S> <C> <C>
INCREASE IN NET ASSETS FROM OPERATIONS
Net investment income ......................................... $ 3,719,343 $ 6,446,546
Net realized gain on investments .............................. 6,415 92
------------- -------------
Net increase in net assets from operations .................... 3,725,758 6,446,638
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income
Class A .................................................... (3,684,139) (6,427,061)
Class B .................................................... (35,204) (19,485)
CAPITAL STOCK TRANSACTIONS
Net increase (decrease) ....................................... (2,698,025) 16,056,947
------------- -------------
Total increase (decrease) ..................................... (2,691,610) 16,057,039
NET ASSETS
Beginning of period ........................................... 135,630,743 119,573,704
------------- -------------
End of period (including undistributed net investment income of
$573 and $573, respectively) ............................... $ 132,939,133 $ 135,630,743
============= =============
</TABLE>
--------------------------------------------------------------------------------
See Notes to Financial Statements.
5
<PAGE>
MONEY MARKET PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
June 30, 2000 (unaudited) Alliance Variable Products Series Fund
================================================================================
NOTE A: Significant Accounting Policies
The Money Market Portfolio (the "Portfolio") is a series of Alliance Variable
Products Series Fund, Inc. (the "Fund"). The Portfolio's investment objective is
to seek safety of principal, excellent liquidity and maximum current income to
the extent consistent with the first two objectives. 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, 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
6
<PAGE>
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 .50% of the Portfolio's average daily net assets.
Pursuant to the advisory agreement, the Portfolio paid $31,750 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.
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.
--------------------------------------------------------------------------------
NOTE C: 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
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
7
<PAGE>
MONEY MARKET PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(continued) Alliance Variable Products Series Fund
================================================================================
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
At June 30, 2000, the cost of investments for federal income tax purposes was
the same as the cost for financial reporting purposes.
At December 31, 1999 for federal income tax purposes, the Portfolio had net
capital loss carryforward of $371, of which $73 expires in the year 2004 and
$298 expires in the year 2005.
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 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.
8
<PAGE>
Alliance Variable Products Series Fund
================================================================================
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 class consists of 10,000,000,000 authorized shares. Transactions in capital
stock were as follows:
<TABLE>
<CAPTION>
---------------------------------- -----------------------------------
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
--------------- ------------- --------------- -------------
<S> <C> <C> <C> <C>
Class A
Shares sold .................... 463,245,684 524,546,562 $ 463,245,684 $ 524,546,562
Shares issued in reinvestment of
dividends ................... 3,635,877 6,427,061 3,635,877 6,427,061
Shares redeemed ................ (469,870,139) (516,080,019) (469,870,139) (516,080,019)
------------- ------------- ------------- -------------
Net increase (decrease) ........ (2,988,578) 14,893,604 $ (2,988,578) $ 14,893,604
============= ============= ============= =============
<CAPTION>
Six Months Ended June 16, 1999* to Six Months Ended June 16, 1999* to
June 30, 2000 December 31, June 30, 2000 December 31,
(unaudited) 1999 (unaudited) 1999
--------------- ------------- --------------- -------------
<S> <C> <C> <C> <C>
Class B
Shares sold .................... 1,405,325 2,025,867 $ 1,405,325 $ 2,025,867
Shares issued in reinvestment of
dividends ................... 33,423 19,485 33,423 19,485
Shares redeemed ................ (1,148,195) (882,009) (1,148,195) (882,009)
------------- ------------- ------------- -------------
Net increase ................... 290,553 1,163,343 $ 290,553 $ 1,163,343
============= ============= ============= =============
</TABLE>
--------------------------------------------------------------------------------
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.
--------------------------------------------------------------------------------
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.
--------------------------------------------------------------------------------
* Commencement of distribution.
9
<PAGE>
MONEY MARKET 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 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- ------- ------- -------
Income From Investment Operations
Net investment income .............. .03 .05 .05 .05(a) 05 (a) .05(a)
-------- -------- -------- ------- ------- -------
Less: Dividends
Dividends from net investment income (.03) (.05) (.05) (.05) (.05) (.05)
-------- -------- -------- ------- ------- -------
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) ............. 2.80% 4.69% 4.985 5.11% 4.715 4.97%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) ................. $131,485 $134,467 $119,574 $67,584 $64,769 $28,092
Ratios to average net assets of:
Expenses, net of waivers and
reimbursements ................ .65%(c) .64% .685 .64% .695 .95%
Expenses, before waivers and
reimbursements ................ .65%(c) .64% .685 .64% .695 1.07%
Net investment income ........... 5.53%(c) 4.59% 4.845 5.00%(a) 4.645(a) 4.85%(a)
</TABLE>
--------------------------------------------------------------------------------
See footnote summary on page 11.
10
<PAGE>
MONEY MARKET PORTFOLIO
FINANCIAL HIGHLIGHTS (continued) Alliance Variable Products Series Fund
================================================================================
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
---------------------------
CLASS B
---------------------------
Six Months June 16,
Ended 1999(d) to
June 30, 2000 December 31,
(unaudited) 1999
------------- -----------
Net asset value, beginning of period ............. $ 1.00 $ 1.00
---------- ----------
Income From Investment Operations
Net investment income ............................ .03 .02
---------- ----------
Less: Dividends
Dividends from net investment income ............. (.03) (.02)
---------- ----------
Net asset value, end of period ................... $ 1.00 $ 1.00
========== ==========
Total Return
Total investment return based on
net asset value (b) ........................... 2.67% 2.52%
Ratios/Supplemental Data
Net assets, end of period (000's omitted) ........ $ 1,454 $ 1,163
Ratios to average net assets of:
Expenses (c) .................................. .90% .89%
Net investment income (c) ..................... 5.32% 4.71%
--------------------------------------------------------------------------------
(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.
(d) Commencement of distribution.
11
<PAGE>
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.
12
<PAGE>
(This page left intentionally blank.)
