ALLIANCE VARIABLE PRODUCTS SERIES FUND GROWTH PORTFOLIO
SEMI-ANNUAL REPORT
JUNE 30, 2000
(UNAUDITED)
Investment Products Offered
O Are Not FDIC Insured
O May Lose Value
O Are Not Bank Guaranteed
GROWTH PORTFOLIO
TEN LARGEST HOLDINGS
June 30, 2000 (unaudited) Alliance Variable Products Series Fund
_______________________________________________________________________________
U.S. $ PERCENT OF
COMPANY VALUE NET ASSETS
-------------------------------------------------------------------------------
Vodafone AirTouch Group Plc $ 34,080,790 7.3%
Nextel Communications, Inc., Cl.A 27,167,250 5.8
Sanmina Corp. 20,032,650 4.3
AT&T Corp. - Liberty Media Group, Cl.A 17,890,583 3.8
U S WEST, Inc. 15,229,200 3.3
Sprint Corp. 13,872,000 3.0
American International Group, Inc. 13,165,405 2.8
Ceridian Corp. 12,964,875 2.8
Citigroup, Inc. 11,959,504 2.6
The CIT Group, Inc., Cl.A 11,358,100 2.4
$177,720,357 38.1%
1
GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS
June 30, 2000 (unaudited) Alliance Variable Products Series Fund
_______________________________________________________________________________
Shares or
Principal
Amount
(000) U.S. $ Value
-------------------------------------------------------------------------------
COMMON & PREFERRED STOCKS-97.7%
TECHNOLOGY-45.5%
COMMUNICATIONS EQUIPMENT-0.3%
Loral Space & Communications (a) 215,800 $ 1,497,113
COMMUNICATION SERVICES-11.1%
ALLTEL Corp. 34,000 2,105,875
Cable & Wireless Plc (United Kingdom) 81,000 1,371,458
Global TeleSystems Group, Inc. (a) 252,428 3,044,913
Nextel Communications, Inc.
Cl.A (a) 444,000 27,167,250
Nextlink Communications, Inc.
cv. pfd. 6,000 1,032,750
Sprint Corp. 272,000 13,872,000
VoiceStream Wireless Corp. (a) 27,200 3,163,275
------------
51,757,521
COMPUTER HARDWARE-1.7%
Compaq Computer Corp. 81,000 2,070,562
International Business
Machines Corp. 52,000 5,697,250
------------
7,767,812
COMPUTER SERVICES-2.8%
Ceridian Corp. (a) 538,800 12,964,875
COMPUTER SOFTWARE & SERVICES-2.2%
Computer Associates International, Inc. 204,063 10,445,475
ELECTRONICS-3.3%
Flextronics International, Ltd.
(Singapore) (a) 109,800 7,541,887
SCI Systems, Inc. (a) 198,800 7,790,475
------------
15,332,362
SEMI-CONDUCTOR COMPONENTS-4.1%
Applied Materials, Inc. (a) 56,000 5,075,000
Intel Corp. 38,000 5,080,125
Micron Technology, Inc. (a) 102,000 8,982,375
------------
19,137,500
TELECOMMUNICATIONS-14.7%
Colt Telecom Group Plc (ADR)
(United Kingdom) (a) 8,300 1,125,688
Energis Plc (United Kingdom) (a) 72,000 2,699,612
Equant NV (Netherlands) (a) 23,000 989,000
FLAG Telecom Holdings, Ltd. (a) 41,000 609,875
Intermedia Communications, Inc. (a) 744 22,134
cv. pfd. 18,000 677,250
Millicom International Cellular,
SA (Luxembourg) (a) 90,300 3,160,500
Nokia Corp. (ADR) (Finland) 54,000 2,696,625
NTL, Inc. (a) 153,000 9,160,875
Qwest Communications
International, Inc. (a) 30,000 1,490,625
Vodafone AirTouch Group
Plc (ADR) (United Kingdom) 8,435,889 34,080,790
Western Wireless Corp. Cl.A 24,000 1,308,000
WorldCom, Inc. (a) 234,926 10,777,230
------------
68,798,204
MISCELLANEOUS-5.3%
Sanmina Corp. (a) 234,300 20,032,650
Solectron Corp. (a) 111,000 4,648,125
------------
24,680,775
------------
212,381,637
FINANCE-22.4%
BANKING - MONEY CENTERS-1.7%
Chase Manhattan Corp. 167,910 7,734,354
BANKING - REGIONAL-4.4%
Bank One Corp. 41,000 1,089,063
BankAmerica Corp. 186,600 8,023,800
The CIT Group, Inc. Cl.A 698,960 11,358,100
------------
20,470,963
INSURANCE-5.3%
Ace, Ltd. 41,200 1,153,600
AFLAC, Inc. 65,000 2,985,937
American International Group, Inc. 112,046 13,165,405
John Hancock Financial Services, Inc. (a) 235,200 5,571,300
Metlife, Inc. (a) 88,000 1,853,500
------------
24,729,742
REAL ESTATE-1.3%
Entertainment Properties Trust 56,000 773,500
Humphrey Hospitality Trust, Inc. 99,100 786,606
JP Realty, Inc. 149,800 2,668,313
Koger Equity, Inc. 100,000 1,687,500
------------
5,915,919
MISCELLANEOUS-9.7%
Associates First Capital Corp. Cl.A 475,000 10,598,438
Citigroup, Inc. 198,498 11,959,504
2
GROWTH PORTFOLIO PORTFOLIO OF INVESTMENTS
(continued) Alliance Variable Products Series Fund
_______________________________________________________________________________
Shares or
Principal
Amount
(000) U.S. $ Value
-------------------------------------------------------------------------------
Household International, Inc. 118,000 $ 4,904,375
MBNA Corp. 381,975 10,361,072
Providian Financial Corp. 85,000 7,650,000
------------
45,473,389
------------
104,324,367
CONSUMER SERVICES-9.8%
AIRLINES-0.9%
Continental Airlines, Inc. Cl.B (a) 90,300 4,244,100
BROADCASTING & CABLE-5.3%
AT&T Corp. - Liberty Media
Group Cl.A (a) 737,756 17,890,583
Charter Communications, Inc. Cl.A (a) 89,000 1,462,938
Comcast Corp. Cl.A 35,000 1,417,500
Viacom, Inc. Cl.B (a) 59,224 4,038,336
------------
24,809,357
BUSINESS SERVICES-0.8%
Cendant Corp. (a) 266,338 3,728,732
ENTERTAINMENT & LEISURE-0.8%
Carnival Corp. Cl.A 47,000 916,500
MGM Grand, Inc. (a) 85,000 2,730,625
------------
3,647,125
RETAIL - GENERAL MERCHANDISE-2.0%
Circuit City Stores-Circuit City Group 15,000 497,812
Home Depot, Inc. 80,450 4,017,472
RadioShack Corp. 100,000 4,737,500
------------
9,252,784
------------
45,682,098
UTILITY-5.5%
TELEPHONE-5.5%
AT&T Wireless Group (a) 376,000 10,481,000
U S WEST, Inc. 177,600 15,229,200
------------
25,710,200
HEALTH CARE-5.0%
DRUGS-4.6%
Bristol-Myers Squibb Co. 98,000 5,708,500
IMS Health, Inc. 409,000 7,362,000
Merck & Co., Inc. 61,800 4,735,425
Schering-Plough Corp. 69,000 3,484,500
SICOR, Inc. (a)(b) 8,000 244,000
------------
21,534,425
MEDICAL PRODUCTS-0.4%
Boston Scientific Corp. (a) 78,000 1,711,125
------------
23,245,550
BUSINESS SERVICES-4.2%
BROADCASTING-2.3%
Adelphia Communications Corp. Cl.A (a) 102,000 4,781,250
cv. pfd. 4,000 573,000
UnitedGlobalCom, Inc.
Cl.A (a) 115,400 5,394,950
------------
10,749,200
BROADCASTING & CABLE-1.1%
MediaOne Group, Inc. (a) 80,000 5,305,100
PRINTING, PUBLISHING & BROADCASTING-0.8%
Cablevision Systems Corp. Cl.A (a) 35,000 2,375,625
Gannett Co., Inc. 18,000 1,076,625
------------
3,452,250
------------
19,506,550
ENERGY-2.6%
OIL & GAS SERVICES-2.5%
BP Amoco (ADR) (United Kingdom) 957,896 9,189,146
Santa Fe International Corp. 70,000 2,445,625
------------
11,634,771
OIL SERVICES-0.1%
Total Fina, SA
(ADR) (France) 3,000 230,438
------------
11,865,209
MULTI-INDUSTRY COMPANIES-1.8%
Tyco International, Ltd. 181,144 8,581,697
CONSUMER STAPLES-0.6%
RETAIL - FOOD & DRUGS-0.6%
Kroger Co. (a) 136,000 3,000,500
AEROSPACE & DEFENSE-0.3%
AEROSPACE-0.3%
General Motors Corp. Cl.H (a) 18,000 1,579,500
Total Common & Preferred Stocks
(cost $331,901,887) 455,877,308
LONG-TERM DEBT SECURITY-0.5%
COMMUNICATIONS EQUIPMENT-0.5%
Global TeleSystems Group, Inc.
5.75%, 7/01/10
(cost $2,940,282) $ 3,735 2,147,625
3
Alliance Variable Products Series Fund
_______________________________________________________________________________
Shares or
Principal
Amount
(000) U.S. $ Value
-------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS-2.4%
U.S. GOVERNMENT AGENCY-2.2%
Federal Home Loan Bank
6.48%, 7/03/00 $10,400 $ 10,396,256
TIME DEPOSIT-0.2%
State Street Euro Dollar
6.00%, 7/03/00 609 609,000
Total Short-Term Investments
(amortized cost $11,005,256) 11,005,256
TOTAL INVESTMENTS-100.6%
(cost $345,847,425) 469,030,189
Other assets less liabilities-(0.6%) (2,595,836)
NET ASSETS-100% $466,434,353
(a) Non-income producing security.
(b) Security exempt from registration under Rule 144A of the Securities Act of
1933. This security may be resold in transactions exempt from registration
normally applied to qualified buyers. At June 30, 2000, the aggregate market
value of this security amounted to $244,000 or 0.1% of net assets.
Glossary:
ADR - American Depositary Receipt
See Notes to Financial Statements.
4
GROWTH PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000 (unaudited) Alliance Variable Products Series Fund
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $345,847,425) $469,030,189
Cash 226
Receivable for investment securities sold 612,460
Dividends and interest receivable 398,795
Total assets 470,041,670
LIABILITIES
Payable for investment securities purchased 3,235,901
Advisory fee payable 288,548
Accrued expenses 82,868
Total liabilities 3,607,317
NET ASSETS $466,434,353
COMPOSITION OF NET ASSETS
Capital stock, at par 15,598
Additional paid-in capital 307,586,831
Undistributed net investment income 421,845
Accumulated net realized gain on investments and
foreign currency transactions 35,222,062
Net unrealized appreciation of investments and
foreign currency denominated assets and liabilities 123,188,017
$466,434,353
Class A Shares
Net assets $447,877,659
Shares of capital stock outstanding 14,976,237
Net asset value per share $ 29.91
Class B Shares
Net assets $ 18,556,694
Shares of capital stock outstanding 622,134
Net asset value per share $ 29.83
See Notes to Financial Statements.
5
GROWTH 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 $18,872) $ 1,621,164
Interest 535,873
Total investment income 2,157,037
EXPENSES
Advisory fee 1,707,112
Distribution fee - Class B 11,454
Custodian 52,117
Administrative 31,500
Audit and legal 21,582
Printing 10,044
Directors' fees 664
Transfer agency 506
Miscellaneous 3,486
Total expenses 1,838,465
Net investment income 318,572
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND
FOREIGN CURRENCY TRANSACTIONS
Net realized gain on investment transactions 35,352,146
Net realized loss on foreign currency transactions (33,492)
Net change in unrealized appreciation/depreciation of:
Investments (43,791,046)
Foreign currency denominated assets and liabilities 5,587
Net loss on investments and foreign currency transactions (8,466,805)
NET DECREASE IN NET ASSETS FROM OPERATIONS $(8,148,233)
See Notes to Financial Statements.
6
GROWTH 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 $ 318,572 $ 435,539
Net realized gain on investments and
foreign currency transactions 35,318,654 44,951,316
Net change in unrealized
appreciation/depreciation
of investments and foreign currency
denominated assets and liabilities (43,785,459) 71,614,157
Net increase (decrease) in net assets
from operations (8,148,233) 117,001,012
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income
Class A (301,829) (1,078,120)
Class B (5,174) -0-
Net realized gain on investments
Class A (43,806,324) (28,188,611)
Class B (1,270,971) -0-
CAPITAL STOCK TRANSACTIONS
Net increase 58,233,167 45,317,991
Total increase 4,700,636 133,052,272
NET ASSETS
Beginning of period 461,733,717 328,681,445
End of period (including undistributed
net investment income of
$421,845 and $410,276, respectively) $466,434,353 $461,733,717
See Notes to Financial Statements.
7
GROWTH PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
June 30, 2000 (unaudited) Alliance Variable Products Series Fund
_______________________________________________________________________________
NOTE A: Significant Accounting Policies
The Growth Portfolio (the "Portfolio") is a series of Alliance Variable
Products Series Fund, Inc. (the "Fund"). The Portfolio's investment objective
is to seek to provide long-term growth of capital. Current income is incidental
to the Portfolio's objective. 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
8
GROWTH 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 .75% of the Portfolio's average daily net assets.
Pursuant to the advisory agreement, the Portfolio paid $31,500 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 $247,061, 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 $8,030 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.
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 Distribu
9
Alliance Variable Products Series Fund
_______________________________________________________________________________
tor 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 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 $146,984,414
U.S. government and agencies -0-
Sales:
Stocks and debt obligations $135,185,435
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
(excluding foreign currency transactions) are as follows:
Gross unrealized appreciation $154,903,473
Gross unrealized depreciation (31,720,709)
Net unrealized appreciation $123,182,764
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
10
GROWTH 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 class 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 467,432 2,994,264 $ 48,453,323 $ 85,831,721
Shares issued in
reinvestment of
dividends and
distributions 1,426,064 1,101,081 44,108,153 29,266,731
Shares redeemed (1,494,934) (2,579,730) (48,592,392) (74,650,826)
Net increase 1,398,562 1,515,615 $ 43,969,084 $ 40,447,626
Six Months June 1, 1999* Six Months June 1, 1999*
Ended to Ended to
June 30, 2000 December 31, June 30, 2000 December 31,
(unaudited) 1999 (unaudited) 1999
------------ ------------ -------------- --------------
Class B
Shares sold 435,772 172,661 $13,797,819 $4,938,843
Shares issued in
reinvestment of
dividends and
distributions 41,366 -0- 1,276,145 -0-
Shares redeemed (25,156) (2,509) (809,881) (68,478)
Net increase 451,982 170,152 $14,264,083 $4,870,365
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.
11
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.
12
GROWTH 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
June 30, 2000 Year Ended December 31,
(unaudited) 1999 1998 1997 1996 1995
------------- ----------- ----------- ----------- ----------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $33.59 $27.25 $22.42 $17.92 $14.23 $10.53
Income From Investment Operations
Net investment income (a) .02 .03 .10 .07 .06(b) .17(b)
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions (.49) 8.73 6.19 5.18 3.95 3.54
Net increase (decrease) in net asset value
from operations (.47) 8.76 6.29 5.25 4.01 3.71
Less: Dividends and Distributions
Dividends from net investment income (.02) (.09) (.06) (.03) (.04) (.01)
Distributions from net realized gains (3.19) (2.33) (1.40) (.72) (.28) -0-
Total dividends and distributions (3.21) (2.42) (1.46) (.75) (.32) (.01)
Net asset value, end of period $29.91 $33.59 $27.25 $22.42 $17.92 $14.23
Total Return
Total investment return based on
net asset value (c) (1.70)% 34.47% 28.73% 30.02% 28.49% 35.23%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $447,878 $456,027 $328,681 $235,875 $138,688 $45,220
Ratios to average net assets of:
Expenses, net of waivers and
reimbursements .80%(d) .84% .87% .84% .93% .95%
Expenses, before waivers and
reimbursements .80%(d) .84% .87% .84% .93% 1.27%
Net investment income .14%(d) .12% .43% .37% .35%(b) 1.31%(b)
Portfolio turnover rate 30% 54% 62% 62% 98% 86%
</TABLE>
See footnote summary on page 14.
13
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 $33.54 $26.83
Income From Investment Operations
Net investment loss (a) (.01) (.03)
Net realized and unrealized gain (loss)
on investment and foreign currency
transactions (.50) 6.74
Net increase (decrease) in net asset value
from operations (.51) 6.71
Less: Dividends and Distributions
Dividends from net investment income (.01) -0-
Distributions from net realized gains (3.19) -0-
Total dividends and distributions (3.20) -0-
Net asset value, end of period $29.83 $33.54
Total Return
Total investment return based on
net asset value (c) (1.82)% 25.01%
Ratios/Supplemental Data
Net assets, end of period (000's omitted) $18,557 $5,707
Ratios to average net assets of:
Expenses (d) 1.06% 1.12%
Net investment loss (d) (.10)% (.20)%
Portfolio turnover rate 30% 54%
(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.
14
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.
15
