UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-5398
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND, INC.
(Exact name of registrant as specified in charter)
1345 Avenue of the Americas, New York, New York 10105
(Address of principal executive offices) (Zip code)
Mark R. Manley
Alliance Capital Management L.P.
1345 Avenue of the Americas
New York, New York 10105
(Name and address of agent for service)
Registrant's telephone number, including area code: (800) 221-5672
Date of fiscal year end: December 31, 2005
Date of reporting period: June 30, 2005
ITEM 1. REPORTS TO STOCKHOLDERS.
[LOGO] ALLIANCEBERNSTEIN (R)
Investment Research and Management
AllianceBernstein
Variable Products Series Fund, Inc.
Semi-Annual Report
June 30, 2005
> ALLIANCEBERNSTEIN MONEY MARKET PORTFOLIO
SEMI-ANNUAL REPORT
INVESTMENT PRODUCTS OFFERED
> ARE NOT FDIC INSURED
> MAY LOSE VALUE
> ARE NOT BANK GUARANTEED
YOU MAY OBTAIN A DESCRIPTION OF THE FUND'S PROXY VOTING POLICIES AND
PROCEDURES, AND INFORMATION REGARDING HOW THE FUND VOTED PROXIES RELATING TO
PORTFOLIO SECURITIES DURING THE MOST RECENT 12-MONTH PERIOD ENDED JUNE 30,
WITHOUT CHARGE. SIMPLY VISIT THE SECURITIES AND EXCHANGE COMMISSION'S (THE
"COMMISSION") WEB SITE AT WWW.SEC.GOV, OR CALL ALLIANCEBERNSTEIN AT (800)
227-4618.
THE FUND FILES ITS COMPLETE SCHEDULE OF PORTFOLIO HOLDINGS WITH THE COMMISSION
FOR THE FIRST AND THIRD QUARTERS OF EACH FISCAL YEAR ON FORM N-Q. THE FUND'S
FORMS N-Q ARE AVAILABLE ON THE COMMISSION'S WEB SITE AT WWW.SEC.GOV. THE FUND'S
FORMS N-Q MAY ALSO BE REVIEWED AND COPIED AT THE COMMISSION'S PUBLIC REFERENCE
ROOM IN WASHINGTON, DC; INFORMATION ON THE OPERATION OF THE PUBLIC REFERENCE
ROOM MAY BE OBTAINED BY CALLING (800) SEC-0330.
MONEY MARKET PORTFOLIO
FUND EXPENSES
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including sales charges (loads) on purchase payments, contingent
deferred sales charges on redemptions and (2) ongoing costs, including
management fees; distribution (12b-1) fees; and other Fund expenses. This
example is intended to help you understand your ongoing costs (in dollars) of
investing in the Fund and to compare these costs with the ongoing costs of
investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of
the period and held for the entire period as indicated below.
ACTUAL EXPENSES
The first line of the table below provides information about actual account
values and actual expenses. You may use the information in this line, together
with the amount you invested, to estimate the expenses that you paid over the
period. Simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
in the first line under the heading entitled "Expenses Paid During Period" to
estimate the expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio and an assumed annual rate of return of 5% before expenses, which is not
the Fund's actual return. The hypothetical account values and expenses may not
be used to estimate the actual ending account balance or expenses you paid for
the period. You may use this information to compare the ongoing costs of
investing in the Fund and other funds by comparing this 5% hypothetical example
with the 5% hypothetical examples that appear in the shareholder reports of
other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads), or contingent deferred sales charges on redemptions.
Therefore, the second line of the table is useful in comparing ongoing costs
only, and will not help you determine the relative total costs of owning
different funds. In addition, if these transactional costs were included, your
costs would have been higher.
BEGINNING ENDING
ACCOUNT VALUE ACCOUNT VALUE EXPENSES PAID ANNUALIZED
MONEY MARKET PORTFOLIO JANUARY 1, 2005 JUNE 30, 2005 DURING PERIOD* EXPENSE RATIO*
- -----------------------------------------------------------------------------------
CLASS A
Actual $1,000 $1,009.38 $4.33 0.87%
Hypothetical (5% return before expenses) $1,000 $1,020.48 $4.36 0.87%
CLASS B
Actual $1,000 $1,008.12 $5.58 1.12%
Hypothetical (5% return before expenses) $1,000 $1,019.24 $5.61 1.12%
* Expenses are equal to each classes' annualized expense ratios, multiplied by
the average account value over the period, multiplied by the number of days in
the most recent fiscal half-year/365 (to reflect the one-half year period).
1
MONEY MARKET PORTFOLIO
PORTFOLIO OF INVESTMENTS
June 30, 2005 (unaudited)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
PRINCIPAL
AMOUNT
COMPANY (000) U.S. $ VALUE
- -------------------------------------------------------------------------------
CORPORATE
OBLIGATIONS-6.6%
Banco Bilbao Vizcaya
3.045%, 7/08/05 $ 2,000 $ 1,999,997
HSH Nordbank
3.35%, 9/16/05 2,000 2,000,021
------------
Total Corporate Obligations
(amortized cost
$4,000,018) 4,000,018
------------
COMMERCIAL
PAPER-77.4%
American International Group
3.14%, 7/13/05 1,900 1,898,011
ASB Bank Ltd.
3.23%, 8/24/05 2,000 1,990,310
Banque Caisse D'Epargne L'Etat
3.30%, 8/24/05 2,000 1,990,100
Barton Capital Corp.
3.28%, 7/14/05 1,500 1,498,223
Cafco LLC
3.30%, 8/16/05 2,000 1,991,567
Credit Suisse Group
3.18%, 8/08/05 2,000 1,993,287
Dexia Delaware LLC
3.03%, 7/05/05 1,650 1,649,445
Fairway Finance Corp.
3.16%, 7/15/05 2,000 1,997,542
Fortis Funding
3.07%, 7/06/05 2,000 1,999,147
Fountain Square Funding
3.00% 7/01/05 2,500 2,500,000
Galaxy Funding
3.23%, 8/24/05 2,000 1,990,310
Gemini Securitization Corp.
3.18%, 7/20/05 2,000 1,996,643
Giro Balanced
3.21%, 8/22/05 2,000 1,990,727
HSBC Bank USA
3.07%, 7/11/05 2,000 1,998,294
Morgan Stanley
3.31%, 8/15/05 2,000 1,991,725
Norddeutsche
3.20%, 8/17/05 2,000 1,991,644
Northern Rock Plc
3.27%, 7/27/05 2,000 1,995,277
Royal Bank of Scotland
3.22%, 7/15/05 2,000 1,997,496
San Paolo U.S. Financial
3.25%, 8/15/05 2,000 1,991,875
State Street Bank Trust Co.
3.22%, 7/21/05 2,000 1,996,422
Toyota Motor Credit Corp.
3.23%, 7/27/05 2,000 1,995,334
UBS Finance
3.39%, 7/01/05 1,500 1,500,000
Westpac Banking Corp.
3.15%, 8/09/05 2,000 1,993,175
Windmill Funding Corp.
3.16%, 8/01/05 2,000 1,994,558
------------
Total Commercial Paper
(amortized cost
$46,931,112) 46,931,112
------------
CERTIFICATES OF
DEPOSIT-15.7%
Calyon NY
3.20%, 8/19/05 2,000 2,000,000
Depfa Bank
3.285%, 8/17/05 2,000 2,000,000
Suntrust Bank
3.43%, 9/28/05 1,500 1,500,000
Toronto Dominion Bank
3.02%, 7/06/05 2,000 2,000,000
Washington Mutual
3.33%, 9/13/05 2,000 2,000,000
------------
Total Certificates of Deposit
(amortized cost
$9,500,000) 9,500,000
------------
TIME DEPOSIT-0.4%
The Bank of New York
2.063%, 7/01/05
(amortized cost $227,000) 227 227,000
------------
TOTAL
INVESTMENTS-100.1%
(cost $60,658,130) 60,658,130
Other assets less
liabilities -(-0.1%) (78,487)
------------
NET ASSETS-100% $ 60,579,643
============
See Notes to Financial Statements.
2
MONEY MARKET PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2005 (unaudited)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $60,658,130) $60,658,130
Cash 297
Interest receivable 43,991
Receivable for capital stock sold 30,188
------------
Total assets 60,732,606
------------
LIABILITIES
Dividends payable 101,940
Advisory fee payable 22,698
Distribution fee payable 5,182
Payable for capital stock redeemed 4,795
Administrative fee payable 250
Transfer agent fee payable 67
Accrued expenses 18,031
------------
Total liabilities 152,963
------------
NET ASSETS $ 60,579,643
============
COMPOSITION OF NET ASSETS
Capital stock, at par $ 60,581
Additional paid-in capital 60,519,643
Distributions in excess of net investment income (270)
Accumulated net realized loss on investment transactions (311)
------------
$ 60,579,643
============
CLASS A SHARES
Net assets $ 35,164,855
============
Shares of capital stock outstanding 35,163,556
============
Net asset value per share $ 1.00
============
CLASS B SHARES
Net assets $ 25,414,788
============
Shares of capital stock outstanding 25,417,017
============
Net asset value per share $ 1.00
============
See Notes to Financial Statements.
3
MONEY MARKET PORTFOLIO
STATEMENT OF OPERATIONS
Six Months Ended June 30, 2005 (unaudited)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
INVESTMENT INCOME
Interest $ 906,998
------------
EXPENSES
Advisory fee 148,278
Distribution fee--Class B 33,671
Custodian 70,455
Administrative 36,250
Audit 19,753
Printing 8,556
Legal 1,439
Directors' fees 496
Transfer agency 403
Miscellaneous 1,414
------------
Total expenses 320,715
------------
Net investment income 586,283
------------
REALIZED LOSS ON INVESTMENT TRANSACTIONS
Net realized loss on investment transactions (61)
------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 586,222
============
See Notes to Financial Statements.
4
MONEY MARKET PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 2005 DECEMBER 31,
(UNAUDITED) 2004
=============== ===============
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS
Net investment income $ 586,283 $ 498,380
Net realized loss on investment
transactions (61) (250)
--------------- --------------
Net increase in net assets from operations 586,222 498,130
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM
Net investment income
Class A (367,340) (328,341)
Class B (219,213) (170,039)
Net realized gain on investment transactions
Class A -0- (140)
Class B -0- (130)
CAPITAL STOCK TRANSACTIONS
Net decrease (4,447,238) (37,764,839)
--------------- --------------
Total decrease (4,447,569) (37,765,359)
NET ASSETS
Beginning of period 65,027,212 102,792,571
--------------- --------------
End of period (including distributions in
excess of net investment income of $270
and $0, respectively) $ 60,579,643 $ 65,027,212
=============== ==============
See Notes to Financial Statements.
5
MONEY MARKET PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
June 30, 2005 (unaudited)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
NOTE A: SIGNIFICANT ACCOUNTING POLICIES
The AllianceBernstein Money Market Portfolio (the "Portfolio") is a series of
AllianceBernstein 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 offers
twenty-three separately managed pools of assets which have differing investment
objectives and policies. The Portfolio 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.
The Portfolio 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
the Portfolio's net asset value per share.
The financial statements have been prepared in conformity with U.S. generally
accepted accounting principles, which require management to make certain
estimates and assumptions that affect the reported amounts of assets and
liabilities in the financial statements and amounts of income and expenses
during the reporting period. Actual results could differ from those estimates.
Additional information about some of the items discussed in these Notes to
Financial Statements is contained in the Fund's Statement of Additional
Information, which is available upon request. The following is a summary of
significant accounting policies followed by the Portfolio.
1. SECURITY VALUATION
Securities in which the 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. TAXES
It is the Portfolio's policy to meet the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute all of its
investment company taxable income and net realized gains, if any, to
shareholders. Therefore, no provisions for federal income or excise taxes are
required.
3. 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. Investment gains and losses are determined on the identified
cost basis. The Portfolio amortizes premiums and accretes discounts as
adjustments to interest income.
4. INCOME AND EXPENSES
Expenses attributable to a single portfolio are charged to that portfolio.
Expenses of the Fund are charged to each portfolio in proportion to net assets.
All income earned and expenses incurred by a portfolio with multi-class shares
outstanding are borne on a pro-rata basis by each outstanding class of shares,
based on the proportionate interest in the portfolio represented by the net
assets of such class, except that the portfolio's Class B shares bear the
distribution fees.
5. DIVIDENDS AND DISTRIBUTIONS
The Portfolio declares dividends daily from net investment income. The
dividends are paid monthly. Net realized gains distributions, if any, will be
made at least annually. 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 U.S. generally accepted accounting principles. 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
Until September 6, 2004, under the terms of an investment advisory agreement,
the Portfolio paid Alliance Capital Management L.P. (the "Adviser") an advisory
fee at an annual rate of .50% of the Portfolio's average daily net assets.
Effective September 7, 2004, the terms of the investment advisory agreement
were amended so that the advisory fee was reduced to an annual rate of .45% of
the first $2.5 billion, .40% of the next $2.5 billion and .35% in excess of $5
billion, of the Portfolio's average daily net assets. The fee is accrued daily
and paid monthly.
6
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
Effective January 1, 2004 through September 6, 2004, in contemplation of the
final agreement with the Office of New York Attorney General ("NYAG"), the
Adviser began waiving a portion of its advisory fee so as to charge the
Portfolio at the reduced annual rate discussed above. For a more complete
discussion of the Adviser's settlement with the NYAG, please see "Legal
Proceedings" below.
Pursuant to the advisory agreement, the Portfolio paid $36,250 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, 2005.
The Portfolio compensates Alliance Global Investor Services, Inc., a
wholly-owned subsidiary of the Adviser, under a Transfer Agency Agreement for
providing personnel and facilities to perform transfer agency services for the
Portfolio. Such compensation amounted to $403 for the six months ended June 30,
2005.
NOTE C: DISTRIBUTION PLAN
The Portfolio has adopted a Distribution Plan (the "Plan") for Class B shares
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the
Plan, the Portfolio pays distribution and servicing fees to AllianceBernstein
Investment Research and Management, Inc. (the "Distributor"), a wholly-owned
subsidiary of the Adviser, at an annual rate of up to .50% of the Portfolio's
average daily net assets attributable to Class B shares. The fees are accrued
daily and paid monthly. The Board of Directors currently limits payments under
the Plan to .25% of the Portfolio's average daily net assets attributable to
Class B shares. The Plan provides that the Distributor will use such payments
in their entirety for distribution assistance and promotional activities.
The Portfolio is not obligated under the Plan to pay any distribution and
servicing fees in excess of the amounts set forth above. The purpose of the
payments to the Distributor under the Plan is to compensate the Distributor for
its distribution services with respect to the sale of the Portfolio's Class B
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 Plan is
characterized by the staff of the Securities and Exchange Commission as being
of the "compensation" variety.
In the event that the Plan is terminated or not continued, no distribution and
servicing fees (other than current amounts accrued but not yet paid) would be
owed by the Portfolio to the Distributor.
The Plan also provides that the Adviser may use its own resources to finance
the distribution of the Portfolio's shares.
NOTE D: INVESTMENT TRANSACTIONS
At June 30, 2005, the cost of investments for federal income tax purposes was
the same as the cost for financial reporting purposes.
NOTE E: CAPITAL STOCK
There are 2,000,000,000 shares of $.001 par value capital stock authorized,
divided into two classes, designated Class A and Class B shares. Each class
consists of 1,000,000,000 authorized shares. Transactions in capital stock were
as follows:
SHARES AMOUNT
--------------------------- ------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
JUNE 30, 2005 DECEMBER 31, JUNE 30, 2005 DECEMBER 31,
(UNAUDITED) 2004 (UNAUDITED) 2004
------------ ------------ -------------- --------------
CLASS B
Shares sold 14,273,055 28,338,237 $14,273,055 $ 28,338,237
Shares issued in
reinvestment of
dividends and
distributions 367,340 328,481 367,340 328,481
Shares redeemed (16,215,118) (46,773,633) (16,215,118) (46,773,633)
------------ ------------ -------------- --------------
Net decrease (1,574,723) (18,106,915) $(1,574,723) $(18,106,915)
============ ============ ============== ==============
CLASS B
Shares sold 12,836,663 47,869,045 $12,836,663 $ 47,869,045
Shares issued in
reinvestment of
dividends and
distributions 219,213 170,169 219,213 170,169
Shares redeemed (15,928,391) (67,697,138) (15,928,391) (67,697,138)
------------ ------------ -------------- --------------
Net decrease (2,872,515) (19,657,924) $(2,872,515) $(19,657,924)
============ ============ ============== ==============
7
MONEY MARKET PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(continued)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
NOTE F: RISKS INVOLVED IN INVESTING IN THE PORTFOLIO
Interest Rate Risk and Credit Risk--Interest rate risk is the risk that changes
in interest rates will affect the value of the Portfolio's investments in
fixed-income debt securities such as bonds or notes. Increases in interest
rates may cause the value of the Portfolio's investments to decline. Credit
risk is the risk that the issuer or guarantor of a debt security, or the
counterparty to a derivative contract, will be unable or unwilling to make
timely principal and/or interest payments, or to otherwise honor its
obligations. The degree of risk for a particular security may be reflected in
its credit risk rating. Credit risk is greater for medium quality and
lower-rated securities. Lower-rated debt securities and similar unrated
securities (commonly known as "junk bonds") have speculative elements or are
predominantly speculative risks.
Indemnification Risk--In the ordinary course of business, the Portfolio enters
into contracts that contain a variety of indemnifications. The Portfolio's
maximum exposure under these arrangements is unknown. However, the Portfolio
has not had prior claims or losses pursuant to these indemnification provisions
and expects the risk of loss thereunder to be remote.
NOTE G: DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions to be paid for the year ending December 31,
2005 will be determined at the end of the current fiscal year. The tax
character of distributions paid during the fiscal years ended December 31, 2004
and December 31, 2003 were as follows:
2004 2003
========== ==========
Distributions paid from:
Ordinary income $ 498,650 $ 570,662
========== ==========
Total distributions paid $ 498,650 $ 570,662
========== ==========
As of December 31, 2004, the components of accumulated earnings/(deficit) on a
tax basis were as follows:
Accumulated capital and other losses $ (250)(a)
--------
Total accumulated earnings/(deficit) $ (250)
========
(a) On December 31, 2004, the Portfolio had a net capital loss carryforward of
$250, all of which expires in the year 2012. To the extent future capital gains
are offset by capital loss carryforwards, such gains will not be distributed.
NOTE H: LEGAL PROCEEDINGS
As has been previously reported, the staff of the U.S. Securities and Exchange
Commission ("SEC") and the NYAG have been investigating practices in the mutual
fund industry identified as "market timing" and "late trading" of mutual fund
shares. Certain other regulatory authorities have also been conducting
investigations into these practices within the industry and have requested that
the Adviser provide information to them. The Adviser has been cooperating and
will continue to cooperate with all of these authorities.
On December 18, 2003, the Adviser confirmed that it had reached terms with the
SEC and the NYAG for the resolution of regulatory claims relating to the
practice of "market timing" mutual fund shares in some of the AllianceBernstein
Mutual Funds. The agreement with the SEC is reflected in an Order of the
Commission ("SEC Order"). The agreement with the NYAG is memorialized in an
Assurrance of Discontinuance dated September 1, 2004 ("NYAG Order"). Among the
key provisions of these agreements are the following:
(i) The Adviser agreed to establish a $250 million fund (the
"Reimbursement Fund") to compensate mutual fund shareholders for the adverse
effects of market timing attributable to market timing relationships described
in the SEC Order. According to the SEC Order, the Reimbursement Fund is to be
paid, in order of priority, to fund investors based on (i) their aliquot share
of losses suffered by the fund due to market timing, and (ii) a proportionate
share of advisory fees paid by such fund during the period of such market
timing;
(ii) The Adviser agreed to reduce the advisory fees it receives from some
of the AllianceBernstein long-term, open-end retail funds until December 31,
2008; and
(iii) The Adviser agreed to implement changes to its governance and
compliance procedures. Additionally, the SEC Order and the NYAG Order
contemplate that the Adviser's registered investment company clients, including
the Fund, will introduce governance and compliance changes.
8
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
In anticipation of final, definitive documentation of the NYAG Order and
effective January 1, 2004, the Adviser began waiving a portion of its advisory
fee. On September 7, 2004, the Fund's investment advisory agreement was amended
to reflect the reduced advisory fee. For more information on this waiver and
amendment to the Fund's investment advisory agreement, please see "Advisory Fee
and Other Transactions with Affiliates" above.
A special committee of the Adviser's Board of Directors, comprised of the
members of the Adviser's Audit Committee and the other independent member of
the Adviser's Board, is continuing to direct and oversee an internal
investigation and a comprehensive review of the facts and circumstances
relevant to the SEC's and the NYAG's investigations.
In addition, the Independent Directors of the Fund ("the Independent
Directors") have initiated an investigation of the above-mentioned matters with
the advice of an independent economic consultant and independent counsel. The
Independent Directors have formed a special committee to supervise the
investigation.
On October 2, 2003, a putative class action complaint entitled Hindo et al. v.
AllianceBernstein Growth & Income Fund et al. (the "Hindo Complaint") was filed
against the Adviser; Alliance Capital Management Holding L.P.; Alliance Capital
Management Corporation; AXA Financial, Inc.; certain of the AllianceBernstein
Mutual Funds, including the Fund; Gerald Malone; Charles Schaffran
(collectively, the "Alliance Capital defendants"); and certain other defendants
not affiliated with the Adviser. The Hindo Complaint was filed in the United
States District Court for the Southern District of New York by alleged
shareholders of two of the AllianceBernstein Mutual Funds. The Hindo Complaint
alleges that certain of the Alliance Capital defendants failed to disclose that
they improperly allowed certain hedge funds and other unidentified parties to
engage in late trading and market timing of AllianceBernstein Fund securities,
violating Sections 11 and 15 of the Securities Act, Sections 10(b) and 20(a) of
the Exchange Act, and Sections 206 and 215 of the Advisers Act. Plaintiffs seek
an unspecified amount of compensatory damages and rescission of their contracts
with the Adviser, including recovery of all fees paid to the Adviser pursuant
to such contracts.
Since October 2, 2003, numerous additional lawsuits making factual allegations
similar to those in the Hindo Complaint were filed against the Adviser and
certain other defendants, some of which name the Fund as a defendant. All of
these lawsuits seek an unspecified amount of damages. The lawsuits are now
pending in the United States District Court for the District of Maryland
pursuant to a ruling by the Judicial Panel on Multidistrict Litigation
transferring and centralizing all of the mutual fund cases involving market and
late trading in the District of Maryland.
As a result of the matters discussed above, investors in the AllianceBernstein
Mutual Funds may choose to redeem their investments. This may require the
AllianceBernstein Mutual Funds to sell investments held by those funds to
provide for sufficient liquidity and could also have an adverse effect on the
investment performance of the AllianceBernstein Mutual Funds.
The Adviser and approximately twelve other investment management firms were
publicly mentioned in connection with the settlement by the SEC of charges that
an unaffiliated broker/dealer violated federal securities laws relating to its
receipt of compensation for selling specific mutual funds and the disclosure of
such compensation. The SEC indicated publicly that, among other things, it was
considering enforcement action in connection with mutual funds' disclosure of
such arrangements and in connection with the practice of considering mutual
fund sales in the direction of brokerage commissions from fund portfolio
transactions. The SEC issued subpoenas to the Adviser, and the NASD issued
requests for information in connection with this matter and the Adviser
provided documents and other information to the SEC and NASD and cooperated
fully with the investigations. On June 8, 2005 the NASD announced that it had
reached a settlement with the Distributor in connection with this matter.
Management of the Adviser expects that the settlement has resolved both
regulatory inquiries described above.
On June 22, 2004, a purported class action complaint entitled Aucoin, et al. v.
Alliance Capital Management L.P., et al. ("Aucoin Complaint") was filed against
the Adviser, Alliance Capital Management Holding L.P., Alliance Capital
Management Corporation, AXA Financial, Inc., AllianceBernstein Investment
Research & Management, Inc., certain current and former directors of the
AllianceBernstein Mutual Funds, and unnamed Doe defendants. The Aucoin
Complaint names certain of the AllianceBernstein mutual funds as nominal
defendants. The Aucoin Complaint was filed in the United States District Court
for the Southern District of New York by an alleged shareholder of an
AllianceBernstein mutual fund. The Aucoin Complaint alleges, among other
things, (i) that certain of the defendants improperly authorized the payment of
excessive commissions and other fees from fund assets to broker-dealers in
exchange for preferential
9
MONEY MARKET PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(continued)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
marketing services, (ii) that certain of the defendants misrepresented and
omitted from registration statements and other reports material facts
concerning such payments, and (iii) that certain defendants caused such conduct
as control persons of other defendants. The Aucoin Complaint asserts claims for
violation of Sections 34(b), 36(b) and 48(a) of the Investment Company Act,
Sections 206 and 215 of the Advisers Act, breach of common law fiduciary
duties, and aiding and abetting breaches of common law fiduciary duties.
Plaintiffs seek an unspecified amount of compensatory damages and punitive
damages, rescission of their contracts with the Adviser, including recovery of
all fees paid to the Adviser pursuant to such contracts, an accounting of all
fund-related fees, commissions and soft dollar payments, and restitution of all
unlawfully or discriminatorily obtained fees and expenses.
Since June 22, 2004, numerous additional lawsuits making factual allegations
substantially similar to those in the Aucoin Complaint were filed against the
Adviser and certain other defendants, and others may be filed.
It is possible that these matters and/or other developments resulting from
these matters could result in increased redemptions of the Fund's shares or
other adverse consequences to the Fund. However, the Adviser believes that
these matters are not likely to have a material adverse effect on its ability
to perform advisory services relating to the Fund.
10
MONEY MARKET PORTFOLIO
FINANCIAL HIGHLIGHTS
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
CLASS A
----------------------------------------------------------------------------
Six Months
Ended Year Ended December 31,
June 30, 2005 ---------------------------------------------------------------
(unaudited) 2004 2003 2002 2001 2000
----------- ----------- ----------- ----------- ----------- -----------
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 .01 .01(a) .01 .01 .04 .06
----------- ----------- ----------- ----------- ----------- -----------
LESS: DIVIDENDS
Dividends from net investment income (.01) (.01) (.01) (.01) (.04) (.06)
----------- ----------- ----------- ----------- ----------- -----------
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) .94% .71% .53% 1.10% 3.57% 5.91%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $35,165 $36,740 $54,847 $97,216 $128,700 $146,270
Ratio to average net assets of:
Expenses, net of waivers and
reimbursements .87%(c) .69% .66% .68% .63% .67%
Expenses, before waivers and
reimbursements .87%(c) .73% .66% .68% .63% .67%
Net investment income 1.88%(c) .68%(a) .55% 1.10% 3.55% 5.73%
See footnote summary on page 12.
11
MONEY MARKET PORTFOLIO
FINANCIAL HIGHLIGHTS
(continued)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
CLASS B
----------------------------------------------------------------------------
Six Months
Ended Year Ended December 31,
June 30, 2005 ---------------------------------------------------------------
(unaudited) 2004 2003 2002 2001 2000
----------- ----------- ----------- ----------- ----------- -----------
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 .01 -0-(a)(d) -0-(d) .01 .03 .05
----------- ----------- ----------- ----------- ----------- -----------
LESS: DIVIDENDS
Dividends from net investment income (.01) -0-(d) -0-(d) (.01) (.03) (.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) .81% .46% .28% .85% 3.32% 5.65%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $25,415 $28,287 $47,946 $52,316 $49,161 $9,758
Ratio to average net assets of:
Expenses, net of waivers and
reimbursements 1.12%(c) .94% .91% .93% .90% .95%
Expenses, before waivers and
reimbursements 1.12%(c) .98% .91% .93% .90% .95%
Net investment income 1.63%(c) .41%(a) .29% .85% 2.60% 5.64%
(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 return does not reflect the
deduction of taxes that a shareholder would pay on Portfolio distributions or
the redemption of Portfolio shares. Total investment return calculated for a
period of less than one year is not annualized.
(c) Annualized.
(d) Amount is less than $.01 per share.
12
- -------------------------------------------------------------------------------
SEMI-ANNUAL REPORT
- -------------------------------------------------------------------------------
[LOGO] ALLIANCEBERNSTEIN (R)
Investment Research and Management
AllianceBernstein Variable Products Series Fund, Inc.
Semi-Annual Report
June 30, 2005
> AllianceBernstein Global Bond Portfolio
INVESTMENT PRODUCTS OFFERED
- ---------------------------
> ARE NOT FDIC INSURED
> MAY LOSE VALUE
> ARE NOT BANK GUARANTEED
- ---------------------------
YOU MAY OBTAIN A DESCRIPTION OF THE FUND'S PROXY VOTING POLICIES AND
PROCEDURES, AND INFORMATION REGARDING HOW THE FUND VOTED PROXIES RELATING TO
PORTFOLIO SECURITIES DURING THE MOST RECENT 12-MONTH PERIOD ENDED JUNE 30,
WITHOUT CHARGE. SIMPLY VISIT THE SECURITIES AND EXCHANGE COMMISSION'S (THE
"COMMISSION") WEB SITE AT WWW.SEC.GOV, OR CALL ALLIANCEBERNSTEIN AT (800)
227-4618.
THE FUND FILES ITS COMPLETE SCHEDULE OF PORTFOLIO HOLDINGS WITH THE COMMISSION
FOR THE FIRST AND THIRD QUARTERS OF EACH FISCAL YEAR ON FORM N-Q. THE FUND'S
FORMS N-Q ARE AVAILABLE ON THE COMMISSION'S WEB SITE AT WWW.SEC.GOV. THE FUND'S
FORMS N-Q MAY ALSO BE REVIEWED AND COPIED AT THE COMMISSION'S PUBLIC REFERENCE
ROOM IN WASHINGTON, DC; INFORMATION ON THE OPERATION OF THE PUBLIC REFERENCE
ROOM MAY BE OBTAINED BY CALLING (800) SEC-0330.
GLOBAL BOND PORTFOLIO
FUND EXPENSES
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including sales charges (loads) on purchase payments, contingent
deferred sales charges on redemptions and (2) ongoing costs, including
management fees; distribution (12b-1) fees; and other Fund expenses. This
example is intended to help you understand your ongoing costs (in dollars) of
investing in the Fund and to compare these costs with the ongoing costs of
investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of
the period and held for the entire period as indicated below.
ACTUAL EXPENSES
The first line of the table below provides information about actual account
values and actual expenses. You may use the information in this line, together
with the amount you invested, to estimate the expenses that you paid over the
period. Simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
in the first line under the heading entitled "Expenses Paid During Period" to
estimate the expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio and an assumed annual rate of return of 5% before expenses, which is not
the Fund's actual return. The hypothetical account values and expenses may not
be used to estimate the actual ending account balance or expenses you paid for
the period. You may use this information to compare the ongoing costs of
investing in the Fund and other funds by comparing this 5% hypothetical example
with the 5% hypothetical examples that appear in the shareholder reports of
other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads), or contingent deferred sales charges on redemptions.
Therefore, the second line of the table is useful in comparing ongoing costs
only, and will not help you determine the relative total costs of owning
different funds. In addition, if these transactional costs were included, your
costs would have been higher.
BEGINNING ENDING
ACCOUNT VALUE ACCOUNT VALUE EXPENSES PAID ANNUALIZED
GLOBAL BOND PORTFOLIO JANUARY 1, 2005 JUNE 30, 2005 DURING PERIOD* EXPENSE RATIO*
- ---------------------------------------------------------------------------------------------------------------
CLASS A
Actual $1,000 $ 954.46 $4.22 0.87%
Hypothetical (5% return before expenses) $1,000 $1,020.48 $4.36 0.87%
CLASS B
Actual $1,000 $ 953.40 $5.42 1.12%
Hypothetical (5% return before expenses) $1,000 $1,019.24 $5.61 1.12%
* Expenses are equal to each classes' annualized expense ratios, multiplied by
the average account value over the period, multiplied by the number of days in
the most recent fiscal half-year/365 (to reflect the one-half year period).
1
GLOBAL BOND PORTFOLIO
SECURITY TYPE BREAKDOWN
JUNE 30, 2005 (UNAUDITED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
PERCENT OF
SECURITY TYPE U.S. $ VALUE NET ASSETS
_______________________________________________________________________________
Government Obligations $ 56,105,638 83.3%
- -------------------------------------------------------------------------------
Corporate Obligations 7,502,768 11.1
------------ -----
- -------------------------------------------------------------------------------
Total Investments* 63,608,406 94.4
- -------------------------------------------------------------------------------
Cash and receivables, net of liabilities 3,761,707 5.6
------------ -----
- -------------------------------------------------------------------------------
Net Assets $ 67,370,113 100.0%
- -------------------------------------------------------------------------------
* Excludes short-term investments.
2
GLOBAL BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2005 (UNAUDITED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
PRINCIPAL
AMOUNT
(000) U.S. $ VALUE
- -------------------------------------------------------------------------------
LONG-TERM INVESTMENTS-94.4%
AUSTRIA-4.8%
GOVERNMENT OBLIGATION-4.8%
Republic of Austria
3.80%, 10/20/13 (a) EUR 2,500 $ 3,201,854
--------------
BELGIUM-4.5%
GOVERNMENT OBLIGATION-4.5%
Kingdom of Belgium
4.25%, 9/28/14 (a) 2,300 3,038,492
--------------
CANADA-1.5%
GOVERNMENT OBLIGATION-1.5%
Government of Canada
5.75%, 6/01/33 (a) CAD 265 267,660
6.00%, 6/01/11 (a) 818 755,736
--------------
1,023,396
--------------
DENMARK-1.9%
GOVERNMENT OBLIGATION-1.9%
Kingdom of Denmark
6.00%, 11/15/09 (a) DKK 6,960 1,299,327
--------------
FINLAND-4.6%
GOVERNMENT OBLIGATION-4.6%
Government of Finland
5.375%, 7/04/13 (a) EUR 2,175 3,090,946
--------------
FRANCE-1.7%
GOVERNMENT OBLIGATION-1.7%
Government of France
4.00%, 10/25/13 (a) 376 488,949
6.50%, 4/25/11 (a) 466 680,538
--------------
1,169,487
--------------
GERMANY-11.8%
BANKING-4.5%
KFW Bankengruppe
1.85%, 9/20/10 JPY 245,000 2,372,197
Landwirtschaftliche Rentenbank
1.375%, 4/25/13 70,000 657,239
--------------
3,029,436
--------------
GOVERNMENT OBLIGATION-7.3%
Bundesobligation
3.25%, 4/17/09 (a) EUR 500 625,742
Deutschland Bundesrepublik
4.00%, 7/04/09 (a) 1,813 2,333,007
4.75%, 7/04/34 (a) 1,340 1,934,245
--------------
4,892,994
--------------
7,922,430
--------------
IRELAND-1.1%
GOVERNMENT OBLIGATION-1.1%
Republic of Ireland
4.25%, 10/18/07 (a) EUR 565 716,775
--------------
JAPAN-21.1%
GOVERNMENT OBLIGATIONS-21.1%
Government of Japan
0.10%, 6/20/06 JPY 78,400 707,491
1.30%, 12/20/14 328,050 3,005,750
1.40%, 3/20/12 96,650 913,798
1.70%, 9/20/10 720,150 6,916,543
1.80%, 9/20/10 232,600 2,244,748
1.90%, 3/20/25 44,600 406,477
--------------
14,194,807
--------------
MEXICO-1.4%
BANKING-1.4%
Inter-American Development Bank
9.50%, 06/16/15 (a) MXP 10,000 933,537
--------------
NETHERLANDS-5.2%
GOVERNMENT OBLIGATION-5.2%
Kingdom of Netherlands
3.75%, 7/15/09-
7/15/14 (a) EUR 2,775 3,537,493
--------------
NORWAY-3.6%
GOVERNMENT OBLIGATION-3.6%
Government of Norway
5.50%, 5/15/09 (a) NOK 14,631 2,459,716
--------------
SPAIN-2.3%
GOVERNMENT OBLIGATION-2.3%
Kingdom of Spain
6.15%, 1/31/13 (a) EUR 1,046 1,544,027
--------------
SWEDEN-0.8%
GOVERNMENT OBLIGATION-0.8%
Government of Sweden
6.50%, 5/05/08 (a) SEK 3,910 562,436
--------------
UNITED KINGDOM-4.4%
BANKING-0.2%
Scotland International Finance II BV
4.25%, 5/23/13 (b) USD 160 157,114
--------------
GOVERNMENT OBLIGATION-4.2%
Government of United Kingdom
4.25%, 3/07/36 GBP 553 1,000,971
5.00%, 3/07/12 954 1,796,623
--------------
2,797,594
--------------
2,954,708
--------------
3
GLOBAL BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS
(CONTINUED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
PRINCIPAL
AMOUNT
(000) U.S. $ VALUE
- -------------------------------------------------------------------------------
UNITED STATES-5.0%
FINANCIAL-3.4%
Berkshire Hathaway, Inc.
4.20%, 12/15/10 USD 350 $ 347,513
Genworth Financial, Inc.
1.60%, 6/20/11 75,000 690,208
International Lease Finance Corp.
3.50%, 4/01/09 350 337,034
Pershing Road Development Co.
3.73%, 9/01/26 (b) (c) 660 660,000
SunTrust Bank Series CD
3.458%, 6/02/09 (c) 250 250,138
--------------
2,284,893
--------------
INDUSTRIAL-0.5%
General Electric Co.
5.00%, 2/01/13 330 340,728
--------------
RETAIL-1.1%
Wal-Mart Stores, Inc.
4.55%, 5/01/13 750 757,060
--------------
3,382,681
--------------
U.S. GOVERNMENT AND GOVERNMENT
SPONSORED AGENCY OBLIGATIONS-18.7%
Federal Home Loan Mortgage Corp.
5.125%, 11/07/13 1,000 1,003,808
Federal National Mortgage Association
4.125%, 4/15/14 USD 1,525 1,512,904
U.S. Treasury Notes
1.625%, 1/15/15 916 912,468
3.50%, 11/15/09 6,930 6,869,091
4.00%, 3/15/10 800 808,718
4.25%, 8/15/14 1,435 1,469,305
--------------
12,576,294
--------------
Total Long-Term Investments
(cost $61,940,781) 63,608,406
--------------
SHORT-TERM INVESTMENTS-2.8%
UNITED STATES-2.8%
TIME DEPOSIT-2.8%
Societe General
3.34%, 7/01/05 1,300 1,300,000
The Bank of New York
2.063%, 7/01/05 570 570,000
--------------
Total Short-Term Investments
(cost $1,870,000) 1,870,000
--------------
TOTAL INVESTMENTS-97.2%
(cost $63,810,781) 65,478,406
Other assets less liabilities-2.8% 1,891,707
--------------
NET ASSETS-100% $ 67,370,113
==============
4
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
FORWARD EXCHANGE CURRENCY CONTRACTS (SEE NOTE D)
U.S. $
CONTRACT VALUE ON U.S. $ UNREALIZED
AMOUNT ORIGINATION CURRENT APPRECIATION
(000) DATE VALUE (DEPRECIATION)
- ----------------------------------------------------------------------------------------------------------
BUY CONTRACTS:
British Pound, settling 8/26/05 299 $ 543,506 $ 535,531 $ (7,975)
Canadian Dollar, settling 8/05/05 817 664,889 667,348 2,459
Euro, settling 8/18/05 5,891 7,131,822 7,140,978 9,156
Japanese Yen, settling 7/07//05 241,949 2,233,290 2,182,106 (51,184)
Norweigan Krone, settling 7/13/05 10,973 1,700,801 1,679,776 (21,025)
SALE CONTRACTS:
Canadian Dollar, settling 8/05/05 1,198 964,002 978,480 (14,478)
Danish Krone, settling 7/29/05 2,682 436,455 435,978 477
Euro, settling 8/18/05 1,608 1,954,848 1,948,811 6,037
Mexican Peso, settling 7/15/05 9,765 896,365 906,726 (10,361)
Norweigan Krone, settling 7/13/05 26,255 4,060,804 4,019,327 41,477
Swedish Krona, settling 7/18/05 462 63,295 59,158 4,137
(a) Positions, or portion thereof, with an aggregate market value of
$28,486,596, have been segregated to collateralize forward exchange currency
contracts.
(b) Security is exempt from registration under Rule 144A of the Securities Act
of 1933. These securities are considered liquid and may be resold in
transactions exempt from registration, normally to qualified institutional
buyers. At June 30, 2005, the aggregate market value of these securities
amounted to $817,114 or 1.2% of net assets.
(c) Floating rate security. Stated interest rate was in effect at June 30,
2005.
Currency Abbreviations:
CAD - Canadian Dollar
DKK - Danish Krona
EUR - Euro
GBP - British Pound
JPY - Japanese Yen
MXP - Mexican Peso
NOK - Norweign Krona
SEK - Swedish Krona
USD - United States Dollar
See Notes to Financial Statements.
5
GLOBAL BOND PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2005 (UNAUDITED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $63,810,781) $ 65,478,406
Cash 1,434
Foreign cash, at value (cost $961) 962
Unrealized appreciation of forward exchange currency
contracts 63,743
Receivable for investment securities sold and foreign
currency contracts 6,650,814
Interest receivable 956,597
Receivable for capital stock sold 107,807
------------
Total assets 73,259,763
------------
LIABILITIES
Unrealized depreciation of forward exchange currency
contracts 105,023
Payable for investment securities purchased and foreign
currency contracts 5,631,842
Advisory fee payable 24,923
Distribution fee payable 2,901
Payable for capital stock redeemed 1,501
Administrative fee payable 1,215
Transfer agent fee payable 55
Accrued expenses 122,190
------------
Total liabilities 5,889,650
------------
NET ASSETS $ 67,370,113
============
COMPOSITION OF NET ASSETS
Capital stock, at par $ 5,767
Additional paid-in capital 66,877,177
Distributions in excess of net investment income (2,344,455)
Accumulated net realized gain on investment and foreign
currency transactions 1,264,519
Net unrealized appreciation of investments and foreign
currency denominated assets and liabilities 1,567,105
------------
$ 67,370,113
============
CLASS A SHARES
Net assets $ 53,221,922
============
Shares of capital stock outstanding 4,547,683
============
Net asset value per share $ 11.70
============
CLASS B SHARES
Net assets $ 14,148,191
============
Shares of capital stock outstanding 1,219,312
============
Net asset value per share $ 11.60
============
See Notes to Financial Statements.
6
GLOBAL BOND PORTFOLIO
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 2005 (UNAUDITED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
INVESTMENT INCOME
Interest (net of foreign taxes withheld of $14) $ 1,072,615
------------
EXPENSES
Advisory fee 154,829
Distribution fee -- Class B 17,601
Custodian 73,703
Administrative 36,250
Audit 20,730
Printing 8,218
Legal 1,388
Directors' fees 496
Transfer agency 403
Miscellaneous 2,210
------------
Total expenses 315,828
------------
Net investment income 756,787
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENT AND
FOREIGN CURRENCY TRANSACTIONS
Net realized gain (loss) on:
Investment transactions 2,927,709
Foreign currency transactions (210,251)
Net change in unrealized appreciation/depreciation of:
Investments (6,391,257)
Foreign currency denominated assets and liabilities (272,626)
------------
Net loss on investment and foreign currency transactions (3,946,425)
------------
NET DECREASE IN NET ASSETS FROM OPERATIONS $ (3,189,638)
============
See Notes to Financial Statements.
7
GLOBAL BOND PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 2005 DECEMBER 31,
(UNAUDITED) 2004
============== ==============
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS
Net investment income $ 756,787 $ 1,277,025
Net realized gain on investment and
foreign currency transactions 2,717,458 4,865,008
Net change in unrealized appreciation/
depreciation of investments and foreign
currency denominated assets and
liabilities (6,663,883) 42,149
-------------- --------------
Net increase (decrease) in net assets
from Operations (3,189,638) 6,184,182
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM
Net investment income
Class A (4,802,045) (3,156,752)
Class B (1,253,227) (714,608)
Net realized gain on investment and foreign
currency transactions
Class A (612,506) (1,105,271)
Class B (163,892) (258,556)
CAPITAL STOCK TRANSACTIONS
Net increase (decrease) 7,351,029 (964,959)
-------------- --------------
Total decrease (2,670,279) (15,964)
NET ASSETS
Beginning of period 70,040,392 70,056,356
-------------- --------------
End of period (including distributions
in excess of net investment income
and undistributed net investment income
of ($2,344,455) and $2,954,030,
respectively) $ 67,370,113 $ 70,040,392
============== ==============
See Notes to Financial Statements.
8
GLOBAL BOND PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2005 (UNAUDITED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
NOTE A: SIGNIFICANT ACCOUNTING POLICIES
The AllianceBernstein Global Bond Portfolio (the "Portfolio") is a series of
AllianceBernstein Variable Products Series Fund, Inc. (the "Fund"). The
Portfolio's investment objective is to seek a high level of return from a
combination of current income and capital appreciation by investing in a
globally diversified portfolio of high-quality debt securities denominated in
the U.S. dollar and a range of foreign currencies. The Fund was incorporated in
the State of Maryland on November 17, 1987, as an open-end series investment
company. The Fund offers twenty-three separately managed pools of assets which
have differing investment objectives and policies. The Portfolio 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.
The Portfolio 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
the Portfolio's net asset value per share.
The financial statements have been prepared in conformity with U.S. generally
accepted accounting principles, which require management to make certain
estimates and assumptions that affect the reported amounts of assets and
liabilities in the financial statements and amounts of income and expenses
during the reporting period. Actual results could differ from those estimates.
Additional information about some of the items discussed in these Notes to
Financial Statements is contained in the Fund's Statement of Additional
Information, which is available upon request. The following is a summary of
significant accounting policies followed by the Portfolio.
1. SECURITY VALUATION
Portfolio securities are valued at their current market value determined on the
basis of market quotations or, if market quotations are not readily available
or are deemed unreliable, at "fair value" as determined in accordance with
procedures established by and under the general supervision of the Fund's Board
of Directors.
In general, the market value of securities which are readily available and
deemed reliable are determined as follows. Securities listed on a national
securities exchange or on a foreign securities exchange are valued at the last
sale price at the close of the exchange or foreign securities exchange. If
there has been no sale on such day, the securities are valued at the mean of
the closing bid and asked prices on such day. Securities listed on more than
one exchange are valued by reference to the principal exchange on which the
securities are traded; securities not listed on an exchange but traded on The
NASDAQ Stock Market, Inc. ("NASDAQ") are valued in accordance with the NASDAQ
Official Closing Price; listed put or call options are valued at the last sale
price. If there has been no sale on that day, such securities will be valued at
the closing bid prices on that day; open futures contracts and options thereon
are valued using the closing settlement price or, in the absence of such a
price, the most recent quoted bid price. If there are no quotations available
for the day of valuation, the last available closing settlement price is used;
securities traded in the over-the-counter market, ("OTC") (but excluding
securities traded on NASDAQ) are valued at the mean of the current bid and
asked prices as reported by the National Quotation Bureau or other comparable
sources; U.S. Government securities and other debt instruments having 60 days
or less remaining until maturity are valued at amortized cost if their original
maturity was 60 days or less; or by amortizing their fair value as of the 61st
day prior to maturity if their original term to maturity exceeded 60 days;
fixed-income securities, including mortgage backed and asset backed securities,
may be valued on the basis of prices provided by a pricing service or at a
price obtained from one or more of the major broker/dealers. In cases where
broker/dealer quotes are obtained, Alliance Capital Management, L.P. (the
"Adviser") may establish procedures whereby changes in market yields or spreads
are used to adjust, on a daily basis, a recently obtained quoted price on a
security; and OTC and other derivatives are valued on the basis of a quoted bid
price or spread from a major broker/dealer in such security.
Securities for which market quotations are not readily available (including
restricted securities) or are deemed unreliable are valued at fair value.
Factors considered in making this determination may include, but are not
limited to, information obtained by contacting the issuer, analysts, analysis
of the issuer's financial statements or other available documents. In addition,
the Fund may use fair value pricing for securities primarily traded in non-U.S.
markets because, most foreign markets close well before the Fund values its
securities at 4:00 p.m., Eastern Time. The earlier close of these foreign
markets gives rise to the possibility that significant events, including broad
market moves, may have occurred in the interim and may materially affect the
value of those securities.
9
GLOBAL BOND PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
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 prices of such currencies against the U.S.
dollar. Purchases and sales of portfolio securities are translated into U.S.
dollars at the rates of exchange prevailing when such securities were acquired
or sold. Income and expenses are translated into U.S. dollars at rates of
exchange prevailing when accrued.
Net realized gain or loss on foreign currency transactions represents foreign
exchange gains and losses from sales and maturities of foreign fixed income
investments, foreign currency exchange contracts, holding of foreign
currencies, currency gains or losses realized between the trade and settlement
dates on foreign investment transactions, and the difference between the
amounts of dividends, interest and foreign withholding taxes recorded on the
Portfolio's books and the U.S. dollar equivalent amounts actually received or
paid. Net unrealized 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 or depreciation of investments
and foreign currency denominated assets and liabilities.
3. TAXES
It is the policy of the Portfolio 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. The Portfolio may be subject to taxes imposed by countries in which
it invests. Such taxes are generally based on income and/or capital gains
earned or repatriated. Taxes are accrued and applied to net investment income,
net realized gains and net unrealized appreciation/depreciation as such income
and/or gains are earned.
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. Investment gains and losses are determined on the identified
cost basis. The Portfolio amortizes premiums and accretes discounts as
adjustments to interest income.
5. INCOME AND EXPENSES
Expenses attributable to a single portfolio are charged to that portfolio.
Expenses of the Fund are charged to each portfolio in proportion to net assets.
All income earned and expenses incurred by a portfolio with multi-class shares
outstanding are borne on a pro-rata basis by each outstanding class of shares,
based on the proportionate interest in the portfolio represented by the net
assets of such class, except that the Portfolio's Class B shares bear the
distribution fees.
6. DIVIDENDS AND DISTRIBUTIONS
The Portfolio declares and distributes dividends and distributions from net
investment income and net realized gains, respectively, if any, at least
annually. 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 U.S. generally accepted accounting principles. 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.
7. REPURCHASE AGREEMENTS
It is the policy of the Portfolio that its custodian or designated subcustodian
take control of securities as collateral under repurchase agreements and to
determine on a daily basis that the value of such securities are sufficient to
cover the value of the repurchase agreements. If the seller defaults and the
value of the collateral declines or if bankruptcy proceedings are commenced
with respect to the seller of the security, realization of collateral by the
Portfolio may be delayed or limited.
NOTE B: ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Until September 6, 2004, under the terms of an investment advisory agreement,
the Portfolio paid the Adviser an advisory fee at an annual rate of .65% of the
Portfolio's average daily net assets. Effective September 7, 2004, the terms of
the investment advisory agreement were amended so that the advisory fee was
reduced to an annual rate of .45% of the
10
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
first $2.5 billion, .40% of the next $2.5 billion and .35% in excess of $5
billion, of the Portfolio's average daily net assets. The fee is accrued daily
and paid monthly.
Effective January 1, 2004 through September 6, 2004, in contemplation of the
final agreement with the Office of New York Attorney General ("NYAG"), the
Adviser began waiving a portion of its advisory fee so as to charge the
Portfolio at the reduced annual rate discussed above. For a more complete
discussion of the Adviser's settlement with the NYAG, please see "Legal
Proceedings" below.
Pursuant to the advisory agreement, the Portfolio paid $36,250 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, 2005.
The Portfolio compensates Alliance Global Investor Services, Inc., a
wholly-owned subsidiary of the Adviser, under a Transfer Agency Agreement for
providing personnel and facilities to perform transfer agency services for the
Portfolio. Such compensation amounted to $403 for the six months ended June 30,
2005.
NOTE C: DISTRIBUTION PLAN
The Portfolio has adopted a Distribution Plan (the "Plan") for Class B shares
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the
Plan, the Portfolio pays distribution and servicing fees to AllianceBernstein
Investment Research and Management,Inc. (the "Distributor"), a wholly-owned
subsidiary of the Adviser, at an annual rate of up to .50% of the 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 limits
payments under the Plan to .25% of the Portfolio's average daily net assets
attributable to Class B shares. The Plan provides that the Distributor will use
such payments in their entirety for distribution assistance and promotional
activities.
The Portfolio is not obligated under the Plan to pay any distribution and
servicing fees in excess of the amounts set forth above. The purpose of the
payments to the Distributor under the Plan is to compensate the Distributor for
its distribution services with respect to the sale of the Portfolio's Class B
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 Plan is
characterized by the staff of the Securities and Exchange Commission as being
of the "compensation" variety.
In the event that the Plan is terminated or not continued, no distribution and
servicing fees (other than current amounts accrued but not yet paid) would be
owed by the Portfolio to the Distributor.
The Plan also provides that the Adviser may use its own resources to finance
the distribution of the Portfolio's shares.
NOTE D: INVESTMENT TRANSACTIONS
Purchases and sales of investment securities (excluding short-term investments)
for the six months ended June 30, 2005, were as follows:
PURCHASES SALES
============== ==============
Investment securities
(excluding U.S. government securities) $ 48,280,294 $ 46,770,482
U.S. government securities 5,133,867 7,136,275
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 $ 2,511,316
Gross unrealized depreciation (843,691)
--------------
Net unrealized appreciation $ 1,667,625
==============
1. FORWARD EXCHANGE CURRENCY CONTRACTS
The Portfolio may enter into forward exchange currency contracts in order to
hedge its exposure to changes in foreign currency exchange rates on its 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 on a future date at a negotiated forward rate. The gain or loss
arising from the differ-
11
GLOBAL BOND PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
ence between the original contract and the closing of such contract would be
included in net realized gain or loss on foreign currency transactions.
Fluctuations in the value of open forward exchange currency contracts are
recorded for financial reporting purposes as unrealized appreciation and
depreciation by the Portfolio.
The Portfolio's custodian will place and maintain cash not available for
investment or other liquid assets in a separate account of the Portfolio having
a value at least equal to the aggregate amount of the 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 the Portfolio has in that particular
currency contract.
2. OPTION TRANSACTIONS
For hedging and investment purposes, the Portfolio may purchase and write
(sell) put and call options on U.S. and foreign government securities and
foreign currencies that are traded on U.S. and foreign 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 written options which
expire unexercised are recorded by the Portfolio on the expiration date as
realized gains from options written. 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. If a
put option is exercised, the premium received reduces the cost basis of the
security or currency purchased by the Portfolio. 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.
NOTE E: SECURITIES LENDING
The Portfolio has entered into a securities lending agreement with UBS Warburg
LLC (the "Lending Agent"). Under the terms of the agreement, the Lending Agent,
on behalf of the Portfolio, administers the lending of portfolio securities to
certain broker-dealers. In return, the Portfolio receives fee income from the
lending transactions or it retains a portion of interest on the investment of
any cash received as collateral. The Portfolio also continues to receive
dividends or interest on the securities loaned. Unrealized gain or loss in the
value of the securities loaned that may occur during the term of the loan will
be reflected in the accounts of the Portfolio. All loans are continuously
secured by collateral exceeding the value of the securities loaned. All
collateral consists of either cash or U.S. government securities. The Lending
Agent invests the cash collateral received in an eligible money market vehicle
in accordance with the investment restrictions of the Portfolio. The Lending
Agent will indemnify the Portfolio for any loss resulting from a borrower's
failure to return a loaned security when due. For the six months ended June 30,
2005, the Portfolio had no securities on loan.
12
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
NOTE F: CAPITAL STOCK
There are 1,000,000,000 shares of $.001 par value capital stock authorized,
divided into two classes, designated Class A and Class B. Each class consists
of 500,000,000 authorized shares. Transactions in capital stock were as follows:
SHARES AMOUNT
--------------------------- ------------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
JUNE 30, 2005 DECEMBER 31, JUNE 30, 2005 DECEMBER 31,
(UNAUDITED) 2004 (UNAUDITED) 2004
------------ ------------ -------------- --------------
CLASS A
Shares sold 326,486 367,754 $ 4,283,156 $ 4,820,375
Shares issued
in reinvestment
of dividends and
distributions 456,924 350,207 5,414,551 4,262,023
Shares redeemed (349,000) (949,280) (4,581,480) (12,372,797)
------------ ------------ -------------- --------------
Net increase
(decrease) 434,410 (231,319) $ 5,116,227 $ (3,290,399)
=========== =========== ============= =============
CLASS B
Shares sold 158,213 328,716 $ 2,071,274 $ 4,248,238
Shares issued
in reinvestment
of dividends and
distributions 120,606 80,560 1,417,119 973,164
Shares redeemed (95,682) (223,733) (1,253,591) (2,895,962)
------------ ------------ -------------- --------------
Net increase 183,137 185,543 $ 2,234,802 $ 2,325,440
=========== =========== ============= =============
NOTE G: RISKS INVOLVED IN INVESTING IN THE PORTFOLIO
Interest Rate Risk and Credit Risk--Interest rate risk is the risk that changes
in interest rates will affect the value of the Portfolio's investments in
fixed-income debt securities such as bonds or notes. Increases in interest
rates may cause the value of the Portfolio's investments to decline. Credit
risk is the risk that the issuer or guarantor of a debt security, or the
counterparty to a derivative contract, will be unable or unwilling to make
timely principal and/or interest payments, or to otherwise honor its
obligations. The degree of risk for a particular security may be reflected in
its credit risk rating. Credit risk is greater for medium quality and
lower-rated securities. Lower-rated debt securities and similar unrated
securities (commonly known as "junk bonds") have speculative elements or are
predominantly speculative risks.
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.
Indemnification Risk--In the ordinary course of business, the Portfolio enters
into contracts that contain a variety of indemnifications. The Portfolio's
maximum exposure under these arrangements is unknown. However, the Portfolio
has not had prior claims or losses pursuant to these indemnification provisions
and expects the risk of loss thereunder to be remote.
NOTE H: JOINT CREDIT FACILITY
A number of open-end mutual funds managed by the Adviser, including the
Portfolio, participate in a $500 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
Portfolio did not utilize the Facility during the six months ended June 30,
2005.
13
GLOBAL BOND PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
NOTE I: DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions to be paid for the year ending December 31,
2005 will be determined at the end of the current fiscal year. The tax
character of distributions paid during the fiscal years ended December 31, 2004
and December 31, 2003 were as follows:
2004 2003
============== ==============
Distributions paid from:
Ordinary income $ 4,585,985 $ 4,087,060
Net long-term capital gains 649,202 -0-
-------------- --------------
Total distributions paid $ 5,235,187 $ 4,087,060
============== ==============
As of December 31, 2004, the components of accumulated earnings/(deficit) on a
tax basis were as follows:
Undistributed ordinary income $ 6,154,798
Undistributed long term capital gains 645,921
Accumulated capital and other losses (4,352,378)(a)
Unrealized appreciation/(depreciation) 8,060,136(b)
--------------
Total accumulated earnings/(deficit) $ 10,508,477
==============
(a) On December 31, 2004, the Portfolio had a net capital loss carryforward of
$1,391,822, all of which expires in the year 2008. To the extent future capital
gains are offset by capital loss carryforwards, such gains will not be
distributed. Based on certain provisions in the Internal Revenue Code, various
limitations regarding the future utilization of these carryforwards, brought
forward as a result of the Fund's merger with Brinson Series Trust Strategic
Income Portfolio, may apply. During the current fiscal year, the fund utilized
capital loss carryforwards of $126,701. For the year ended December 31, 2004,
the Portfolio deferred losses on straddles of $2,960,556.
(b) The difference between book-basis and tax-basis unrealized
appreciation/(depreciation) is attributable primarily to the tax deferral of
losses on wash sales and the realization for tax purposes of gains/losses on
certain derivative instruments.
NOTE J: LEGAL PROCEEDINGS
As has been previously reported, the staff of the U.S. Securities and Exchange
Commission ("SEC") and the NYAG have been investigating practices in the mutual
fund industry identified as "market timing" and "late trading" of mutual fund
shares. Certain other regulatory authorities have also been conducting
investigations into these practices within the industry and have requested that
the Adviser provide information to them. The Adviser has been cooperating and
will continue to cooperate with all of these authorities.
On December 18, 2003, the Adviser confirmed that it had reached terms with the
SEC and the NYAG for the resolution of regulatory claims relating to the
practice of "market timing" mutual fund shares in some of the AllianceBernstein
Mutual Funds. The agreement with the SEC is reflected in an Order of the
Commission ("SEC Order"). The agreement with the NYAG is memorialized in an
Assurrance of Discontinuance dated September 1, 2004 ("NYAG Order"). Among the
key provisions of these agreements are the following:
(i) The Adviser agreed to establish a $250 million fund (the "Reimbursement
Fund") to compensate mutual fund shareholders for the adverse effects of market
timing attributable to market timing relationships described in the SEC Order.
According to the SEC Order, the Reimbursement Fund is to be paid, in order of
priority, to fund investors based on (i) their aliquot share of losses suffered
by the fund due to market timing, and (ii) a proportionate share of advisory
fees paid by such fund during the period of such market timing;
(ii) The Adviser agreed to reduce the advisory fees it receives from some of
the AllianceBernstein long-term, open-end retail funds until December 31, 2008;
and
(iii) The Adviser agreed to implement changes to its governance and compliance
procedures. Additionally, the SEC Order and the NYAG Order contemplate that the
Adviser's registered investment company clients, including the Fund, will
introduce governance and compliance changes.
In anticipation of final, definitive documentation of the NYAG Order and
effective January 1, 2004, the Adviser began waiving a portion of its advisory
fee. On September 7, 2004, the Fund's investment advisory agreement was amended
to
14
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
reflect the reduced advisory fee. For more information on this waiver and
amendment to the Fund's investment advisory agreement, please see "Advisory Fee
and Other Transactions with Affiliates" above.
A special committee of the Adviser's Board of Directors, comprised of the
members of the Adviser's Audit Committee and the other independent member of
the Adviser's Board, is continuing to direct and oversee an internal
investigation and a comprehensive review of the facts and circumstances
relevant to the SEC's and the NYAG's investigations.
In addition, the Independent Directors of the Fund ("the Independent
Directors") have initiated an investigation of the above-mentioned matters with
the advice of an independent economic consultant and independent counsel. The
Independent Directors have formed a special committee to supervise the
investigation.
On October 2, 2003, a putative class action complaint entitled Hindo et al. v.
AllianceBernstein Growth & Income Fund et al. (the "Hindo Complaint") was filed
against the Adviser; Alliance Capital Management Holding L.P.; Alliance Capital
Management Corporation; AXA Financial, Inc.; certain of the AllianceBernstein
Mutual Funds, including the Fund; Gerald Malone; Charles Schaffran
(collectively, the "Alliance Capital defendants"); and certain other defendants
not affiliated with the Adviser. The Hindo Complaint was filed in the United
States District Court for the Southern District of New York by alleged
shareholders of two of the AllianceBernstein Mutual Funds. The Hindo Complaint
alleges that certain of the Alliance Capital defendants failed to disclose that
they improperly allowed certain hedge funds and other unidentified parties to
engage in late trading and market timing of AllianceBernstein Fund securities,
violating Sections 11 and 15 of the Securities Act, Sections 10(b) and 20(a) of
the Exchange Act, and Sections 206 and 215 of the Advisers Act. Plaintiffs seek
an unspecified amount of compensatory damages and rescission of their contracts
with the Adviser, including recovery of all fees paid to the Adviser pursuant
to such contracts.
Since October 2, 2003, numerous additional lawsuits making factual allegations
similar to those in the Hindo Complaint were filed against the Adviser and
certain other defendants, some of which name the Fund as a defendant. All of
these lawsuits seek an unspecified amount of damages. The lawsuits are now
pending in the United States District Court for the District of Maryland
pursuant to a ruling by the Judicial Panel on Multidistrict Litigation
transferring and centralizing all of the mutual fund cases involving market and
late trading in the District of Maryland.
As a result of the matters discussed above, investors in the AllianceBernstein
Mutual Funds may choose to redeem their investments. This may require the
AllianceBernstein Mutual Funds to sell investments held by those funds to
provide for sufficient liquidity and could also have an adverse effect on the
investment performance of the AllianceBernstein Mutual Funds.
The Adviser and approximately twelve other investment management firms were
publicly mentioned in connection with the settlement by the SEC of charges that
an unaffiliated broker/dealer violated federal securities laws relating to its
receipt of compensation for selling specific mutual funds and the disclosure of
such compensation. The SEC indicated publicly that, among other things, it was
considering enforcement action in connection with mutual funds' disclosure of
such arrangements and in connection with the practice of considering mutual
fund sales in the direction of brokerage commissions from fund portfolio
transactions. The SEC issued subpoenas to the Adviser, and the NASD issued
requests for information in connection with this matter and the Adviser
provided documents and other information to the SEC and NASD and cooperated
fully with the investigations. On June 8, 2005 the NASD announced that it had
reached a settlement with the Distributor in connection with this matter.
Management of the Adviser expects that the settlement has resolved both
regulatory inquiries described above.
On June 22, 2004, a purported class action complaint entitled Aucoin, et al. v.
Alliance Capital Management L.P., et al. ("Aucoin Complaint") was filed against
the Adviser, Alliance Capital Management Holding L.P., Alliance Capital
Management Corporation, AXA Financial, Inc., AllianceBernstein Investment
Research & Management, Inc., certain current and former directors of the
AllianceBernstein Mutual Funds, and unnamed Doe defendants. The Aucoin
Complaint names certain of the AllianceBernstein mutual funds as nominal
defendants. The Aucoin Complaint was filed in the United States District Court
for the Southern District of New York by an alleged shareholder of an
AllianceBernstein mutual fund. The Aucoin Complaint alleges, among other
things, (i) that certain of the defendants improperly authorized the payment of
excessive commissions and other fees from fund assets to broker-dealers in
exchange for preferential marketing services, (ii) that certain of the
defendants misrepresented and omitted from registration statements and other
reports material facts concerning such payments, and (iii) that certain
defendants caused such conduct as control persons
15
GLOBAL BOND PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
of other defendants. The Aucoin Complaint asserts claims for violation of
Sections 34(b), 36(b) and 48(a) of the Investment Company Act, Sections 206 and
215 of the Advisers Act, breach of common law fiduciary duties, and aiding and
abetting breaches of common law fiduciary duties. Plaintiffs seek an
unspecified amount of compensatory damages and punitive damages, rescission of
their contracts with the Adviser, including recovery of all fees paid to the
Adviser pursuant to such contracts, an accounting of all fund-related fees,
commissions and soft dollar payments, and restitution of all unlawfully or
discriminatorily obtained fees and expenses.
Since June 22, 2004, numerous additional lawsuits making factual allegations
substantially similar to those in the Aucoin Complaint were filed against the
Adviser and certain other defendants, and others may be filed.
It is possible that these matters and/or other developments resulting from
these matters could result in increased redemptions of the Fund's shares or
other adverse consequences to the Fund. However, the Adviser believes that
these matters are not likely to have a material adverse effect on its ability
to perform advisory services relating to the Fund.
16
GLOBAL BOND PORTFOLIO
FINANCIAL HIGHLIGHTS
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
CLASS A
----------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 2005 ---------------------------------------------------------------
(UNAUDITED) 2004 2003 2002 2001(a) 2000
----------- ----------- ----------- ----------- ----------- -----------
Net asset value, beginning of period $13.63 $13.50 $12.63 $10.93 $10.96 $11.25
INCOME FROM INVESTMENT OPERATIONS
Net investment income (b) .15 .25(c) .25 .25 .35 .45(c)
Net realized and unrealized gain (loss)
on investment and foreign currency
transactions (.75) .93 1.40 1.58 (.38) (.32)
Net increase (decrease) in net asset
value from operations (.60) 1.18 1.65 1.83 (.03) .13
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (1.18) (.78) (.78) (.13) -0- (.42)
Distributions from net realized gain
on investment transactions (.15) (.27) -0- -0- -0- -0-
Total dividends and distributions (1.33) (1.05) (.78) (.13) -0- (.42)
Net asset value, end of period $11.70 $13.63 $13.50 $12.63 $10.93 $10.96
TOTAL RETURN
Total investment return based on
net asset value (d) (4.55)% 9.63% 13.26% 16.91% (.27)% 1.17%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $53,222 $56,043 $58,658 $56,137 $48,221 $50,325
Ratio to average net assets of:
Expenses, net of waivers and
reimbursements .87%(e) .88% 1.15% 1.17% 1.07% 1.02%
Expenses, before waivers and
reimbursements .87%(e) 1.02% 1.15% 1.17% 1.07% 1.06%
Net investment income 2.25%(e) 1.93%(c) 1.93% 2.18% 3.28% 4.13%(c)
Portfolio turnover rate 81% 107% 197% 220% 101% 372%
See footnote summary on page 18.
17
GLOBAL BOND PORTFOLIO
FINANCIAL HIGHLIGHTS
(CONTINUED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
CLASS B
----------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 2005 ---------------------------------------------------------------
(UNAUDITED) 2004 2003 2002 2001(a) 2000
----------- ----------- ----------- ----------- ----------- -----------
Net asset value, beginning of period $13.51 $13.40 $12.54 $10.86 $10.92 $11.23
INCOME FROM INVESTMENT OPERATIONS
Net investment income (b) .13 .22(c) .21 .22 .32 .41(c)
Net realized and unrealized gain (loss)
on investment and foreign currency
transactions (.74) .91 1.41 1.57 (.38) (.31)
Net increase (decrease) in net asset
value from operations (.61) 1.13 1.62 1.79 (.06) .10
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (1.15) (.75) (.76) (.11) -0- (.41)
Distributions from net realized gain
on investment transactions (.15) (.27) -0- -0- -0- -0-
Total dividends and distributions (1.30) (1.02) (.76) (.11) -0- (.41)
Net asset value, end of period $11.60 $13.51 $13.40 $12.54 $10.86 $10.92
TOTAL RETURN
Total investment return based on
net asset value (d) (4.66)% 9.33% 13.08% 16.59% (.55)% .98%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period,
(000's omitted) $14,148 $13,997 $11,399 $8,507 $7,150 $6,145
Ratio to average net assets of:
Expenses, net of waivers and
reimbursements 1.12%(e) 1.13% 1.40% 1.42% 1.32% 1.31%
Expenses, before waivers and
reimbursements 1.12%(e) 1.27% 1.40% 1.42% 1.32% 1.35%
Net investment income 2.00%(e) 1.72%(c) 1.66% 1.92% 3.00% 3.82%(c)
Portfolio turnover rate 81% 107% 197% 220% 101% 372%
(a) As required, effective January 1, 2001, the Portfolio has adopted the
provisions of the AICPA Audit and Accounting Guide, Audits of Investment
Companies, and began amortizing premium on debt securities. For the year ended
December 31, 2001, the effect of this change to Class A and Class B shares was
to decrease net investment income per share by $.04 and $.04, increase net
realized and unrealized gain (loss) on investments per share by $.04 and $.04,
and decrease the ratio of net investment income to average net assets from
3.67% to 3.28% and 3.39% to 3.00%, respectively. Per share, ratios and
supplemental data for periods prior to January 1, 2001 have not been restated
to reflect this change in presentation.
(b) Based on average shares outstanding.
(c) Net of expenses waived or reimbursed by the Adviser.
(d) 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 return does not reflect the
deduction of taxes that a shareholder would pay on Portfolio distributions or
the redemption of Portfolio shares. Total investment return calculated for a
period of less than one year is not annualized.
(e) Annualized.
18
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- -------------------------------------------------------------------------------
SEMI-ANNUAL REPORT
- -------------------------------------------------------------------------------
[LOGO] ALLIANCEBERNSTEIN (R)
Investment Research and Management
AllianceBernstein Variable Products Series Fund, Inc.
Semi-Annual Report
June 30, 2005
> AllianceBernstein International Portfolio
INVESTMENT PRODUCTS OFFERED
- ---------------------------
> ARE NOT FDIC INSURED
> MAY LOSE VALUE
> ARE NOT BANK GUARANTEED
- ---------------------------
YOU MAY OBTAIN A DESCRIPTION OF THE FUND'S PROXY VOTING POLICIES AND
PROCEDURES, AND INFORMATION REGARDING HOW THE FUND VOTED PROXIES RELATING TO
PORTFOLIO SECURITIES DURING THE MOST RECENT 12-MONTH PERIOD ENDED JUNE 30,
WITHOUT CHARGE. SIMPLY VISIT THE SECURITIES AND EXCHANGE COMMISSION'S (THE
"COMMISSION") WEB SITE AT WWW.SEC.GOV, OR CALL ALLIANCEBERNSTEIN AT (800)
227-4618.
THE FUND FILES ITS COMPLETE SCHEDULE OF PORTFOLIO HOLDINGS WITH THE COMMISSION
FOR THE FIRST AND THIRD QUARTERS OF EACH FISCAL YEAR ON FORM N-Q. THE FUND'S
FORMS N-Q ARE AVAILABLE ON THE COMMISSION'S WEB SITE AT WWW.SEC.GOV. THE FUND'S
FORMS N-Q MAY ALSO BE REVIEWED AND COPIED AT THE COMMISSION'S PUBLIC REFERENCE
ROOM IN WASHINGTON, DC; INFORMATION ON THE OPERATION OF THE PUBLIC REFERENCE
ROOM MAY BE OBTAINED BY CALLING (800) SEC-0330.
INTERNATIONAL PORTFOLIO
FUND EXPENSES
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including sales charges (loads) on purchase payments, contingent
deferred sales charges on redemptions and (2) ongoing costs, including
management fees; distribution (12b-1) fees; and other Fund expenses. This
example is intended to help you understand your ongoing costs (in dollars) of
investing in the Fund and to compare these costs with the ongoing costs of
investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of
the period and held for the entire period as indicated below.
ACTUAL EXPENSES
The first line of the table below provides information about actual account
values and actual expenses. You may use the information in this line, together
with the amount you invested, to estimate the expenses that you paid over the
period. Simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
in the first line under the heading entitled "Expenses Paid During Period" to
estimate the expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio and an assumed annual rate of return of 5% before expenses, which is not
the Fund's actual return. The hypothetical account values and expenses may not
be used to estimate the actual ending account balance or expenses you paid for
the period. You may use this information to compare the ongoing costs of
investing in the Fund and other funds by comparing this 5% hypothetical example
with the 5% hypothetical examples that appear in the shareholder reports of
other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads), or contingent deferred sales charges on redemptions.
Therefore, the second line of the table is useful in comparing ongoing costs
only, and will not help you determine the relative total costs of owning
different funds. In addition, if these transactional costs were included, your
costs would have been higher.
BEGINNING ENDING
ACCOUNT VALUE ACCOUNT VALUE EXPENSES PAID ANNUALIZED
INTERNATIONAL PORTFOLIO JANUARY 1, 2005 JUNE 30, 2005 DURING PERIOD* EXPENSE RATIO*
- --------------------------------------------------------------------------------------------------------------
CLASS A
Actual $1,000 $1,003.25 $6.31 1.27%
Hypothetical (5% return before expenses) $1,000 $1,018.50 $6.36 1.27%
CLASS B
Actual $1,000 $1,001.68 $7.59 1.53%
Hypothetical (5% return before expenses) $1,000 $1,017.21 $7.65 1.53%
* Expenses are equal to each classes' annualized expense ratios, multiplied by
the average account value over the period, multiplied by the number of days in
the most recent fiscal half-year/365 (to reflect the one-half year period).
1
INTERNATIONAL PORTFOLIO
TEN LARGEST HOLDINGS
JUNE 30, 2005 (UNAUDITED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
PERCENT OF
COMPANY U.S. $ VALUE NET ASSETS
_______________________________________________________________________________
Vodafone Group Plc $ 1,894,782 2.9%
- -------------------------------------------------------------------------------
Schlumberger Ltd. 1,807,372 2.8
- -------------------------------------------------------------------------------
Total, SA 1,663,484 2.5
- -------------------------------------------------------------------------------
Roche Holding AG 1,581,377 2.4
- -------------------------------------------------------------------------------
UBS AG 1,547,488 2.4
- -------------------------------------------------------------------------------
Nabors Industries Ltd. 1,370,012 2.1
- -------------------------------------------------------------------------------
BAE Systems Plc 1,229,526 1.9
- -------------------------------------------------------------------------------
Credit Suisse Group 1,203,132 1.8
- -------------------------------------------------------------------------------
Novartis AG 1,168,211 1.8
- -------------------------------------------------------------------------------
SAP AG 1,093,836 1.7
------------ -----
- -------------------------------------------------------------------------------
$ 14,559,220 22.3%
- -------------------------------------------------------------------------------
SECTOR DIVERSIFICATION
JUNE 30, 2005 (UNAUDITED)
PERCENT OF
SECTOR U.S. $ VALUE NET ASSETS
_______________________________________________________________________________
Finance $ 12,425,911 19.0%
- -------------------------------------------------------------------------------
Energy 9,642,156 14.8
- -------------------------------------------------------------------------------
Consumer Services 8,912,721 13.6
- -------------------------------------------------------------------------------
Healthcare 7,828,588 12.0
- -------------------------------------------------------------------------------
Technology 6,258,060 9.6
- -------------------------------------------------------------------------------
Consumer Staples 3,953,287 6.1
- -------------------------------------------------------------------------------
Utilities 3,582,462 5.5
- -------------------------------------------------------------------------------
Consumer Manufacturing 2,965,547 4.5
- -------------------------------------------------------------------------------
Multi-Industry 2,841,829 4.3
- -------------------------------------------------------------------------------
Basic Industry 2,008,715 3.1
- -------------------------------------------------------------------------------
Aerospace & Defense 1,229,526 1.9
- -------------------------------------------------------------------------------
Capital Goods 942,422 1.4
------------ -----
- -------------------------------------------------------------------------------
Total Investments* 62,591,224 95.8
- -------------------------------------------------------------------------------
Cash and receivables, net of liabilities 2,722,020 4.2
------------ -----
- -------------------------------------------------------------------------------
Net Assets $ 65,313,244 100.0%
- -------------------------------------------------------------------------------
* Excludes short-term investments.
Please note: The sector classifications presented herein are based on the
sector categorization methodolgy of the Adviser.
2
INTERNATIONAL PORTFOLIO
COUNTRY DIVERSIFICATION
JUNE 30, 2005 (UNAUDITED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
PERCENT OF
COUNTRY U.S. $ VALUE NET ASSETS
_______________________________________________________________________________
United Kingdom $ 13,046,344 20.0%
- -------------------------------------------------------------------------------
Japan 7,875,879 12.0
- -------------------------------------------------------------------------------
Switzerland 7,772,526 11.9
- -------------------------------------------------------------------------------
France 6,978,076 10.7
- -------------------------------------------------------------------------------
Germany 3,496,271 5.3
- -------------------------------------------------------------------------------
Spain 2,531,636 3.9
- -------------------------------------------------------------------------------
United States 2,121,786 3.2
- -------------------------------------------------------------------------------
Australia 2,076,004 3.2
- -------------------------------------------------------------------------------
Norway 1,981,021 3.0
- -------------------------------------------------------------------------------
Russia 1,960,875 3.0
- -------------------------------------------------------------------------------
South Korea 1,501,107 2.3
- -------------------------------------------------------------------------------
Bermuda 1,370,012 2.1
- -------------------------------------------------------------------------------
Ireland 1,347,799 2.1
- -------------------------------------------------------------------------------
China 1,283,126 2.0
- -------------------------------------------------------------------------------
Brazil 1,180,464 1.8
- -------------------------------------------------------------------------------
Tawian 860,319 1.3
- -------------------------------------------------------------------------------
India 654,508 1.0
- -------------------------------------------------------------------------------
Other* 4,553,471 7.0
------------ -----
- -------------------------------------------------------------------------------
Total Investments** 62,591,224 95.8
- -------------------------------------------------------------------------------
Cash and receivables, net of liabilities 2,722,020 4.2
------------ -----
- -------------------------------------------------------------------------------
Net Assets $ 65,313,244 100.0%
- -------------------------------------------------------------------------------
* The Portfolio's country breakdown is expressed as a percentage of net assets
and may vary over time. "Other" represents less than 1% weightings in the
following countries: Egypt, Finland, Greece, Hong Kong, Israel, Italy, Mexico,
Netherlands, South Africa and Sweden.
** Excludes short-term investments.
3
INTERNATIONAL PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2005 (UNAUDITED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------------
COMMON STOCKS & OTHER INVESTMENTS-95.8%
AUSTRALIA-3.2%
Billabong International Ltd. 41,375 $ 427,691
Foster's Group Ltd. 84,617 341,980
Rinker Group Ltd. 102,449 1,085,106
Telstra Corp., Ltd. 57,518 221,227
--------------
2,076,004
--------------
BERMUDA-2.1%
Nabors Industries Ltd. (a) 22,600 1,370,012
--------------
BRAZIL-1.8%
Companhia Vale do Rio Doce (ADR) 13,900 406,992
Petroleo Brasilerio, SA (ADR) 16,800 773,472
--------------
1,180,464
--------------
CHINA-2.0%
CNOOC Ltd. (ADR) 11,500 682,180
Datang International Power Generation Co., Ltd. 794,800 600,946
--------------
1,283,126
--------------
EGYPT-0.5%
Orascom Telecom Holding SAE (GDR) 6,175 313,121
--------------
FINLAND-0.9%
Nokia Corp. 36,000 599,008
--------------
FRANCE-10.7%
Accor, SA 13,065 610,906
BNP Paribas S.A. 11,384 777,527
CapGemini, SA 8,200 259,456
France Telecom, SA 24,694 718,647
Groupe Danone 11,926 1,044,910
Renault, SA 8,924 783,814
Sanofi-Aventis, SA 8,441 691,302
Schneider Electric, SA 5,692 428,030
Total, SA 7,109 1,663,484
--------------
6,978,076
--------------
GERMANY-5.3%
Altana AG 3,469 198,067
Deutsche Telekom AG 37,369 688,494
Premiere AG (a) 15,386 530,654
SAP AG 6,310 1,093,836
Siemens AG 13,546 985,220
--------------
3,496,271
--------------
GREECE-0.4%
EFG Eurobank Ergasias 8,710 267,948
--------------
HONG KONG-0.7%
Esprit Holdings Ltd. 61,500 443,478
--------------
INDIA-1.0%
Infosys Technologies Ltd. (ADR) 5,600 433,832
Ranbaxy Laboratories Ltd. (GDR) 9,072 220,676
--------------
654,508
--------------
IRELAND-2.1%
Allied Irish Banks Plc 34,585 743,853
Anglo Irish Bank Corp. Plc 48,731 603,946
--------------
1,347,799
--------------
ISRAEL-0.5%
Teva Pharmaceutical Industries Ltd. (ADR) 11,600 361,224
--------------
ITALY-0.9%
Fastweb (a) 8,916 384,464
Telecom Italia SpA 63,303 197,412
--------------
581,876
--------------
JAPAN-12.0%
Aeon Credit Service Co., Ltd. 4,800 299,578
Astellas Pharma, Inc. 5,800 197,544
Canon, Inc. 12,300 644,699
Denso Corp. 25,800 585,835
Funai Electric Co., Ltd. 1,300 132,636
Hitachi Chemical Co., Ltd. 22,800 415,752
Honda Motor Co., Ltd. 10,400 510,792
HOYA Corp. 3,100 356,150
Keyence Corp. 2,600 579,613
Mitsubishi Corp. 61,800 835,782
Mitsubishi Tokyo Financial Group, Inc. 96 809,243
Mitsui & Co., Ltd. 52,000 490,172
Nippon Telegraph & Telephone Corp. 41 175,315
Nitto Denko Corp. 6,700 381,757
Nomura Holdings, Inc. 32,600 387,308
Shionogi & Co., Ltd. 23,000 295,535
Takeda Pharmaceutical Co., Ltd. 7,800 385,693
Tokyo Electron Ltd. 2,500 131,373
Uni-Charm Corp. 6,500 261,102
--------------
7,875,879
--------------
MEXICO-0.6%
America Movil, SA de CV (ADR) 6,200 369,582
--------------
NETHERLANDS-0.8%
ING Groep N.V. 17,541 493,031
TomTom NV (a) 1,756 38,548
--------------
531,579
--------------
NORWAY-3.0%
Norsk Hydro ASA 11,803 1,072,952
Smedvig ASA 45,000 908,069
--------------
1,981,021
--------------
RUSSIA-3.0%
JSC MMC Norilsk Nickel (ADR) 10,950 663,570
LUKOIL (ADR) 26,306 967,535
Mobile TeleSystems (ADR) 9,800 329,770
--------------
1,960,875
--------------
4
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
SHARES OR
PRINCIPAL
AMOUNT
COMPANY (000) U.S. $ VALUE
- -------------------------------------------------------------------------------
SOUTH AFRICA-0.9%
FirstRand Ltd. 63,991 $ 133,256
Naspers Ltd. 36,026 448,300
--------------
581,556
--------------
SOUTH KOREA-2.3%
GS Holdings Corp. (a) 16,900 397,080
Kookmin Bank (a) 13,950 629,583
LG.Philips LCD Co., Ltd. (a) 3,000 138,191
Samsung Electronics Co., Ltd. 710 336,253
--------------
1,501,107
--------------
SPAIN-3.9%
Altadis, SA 12,773 534,381
Banco Bilbao Vizcaya Argentaria, SA 64,848 996,380
Industria de Diseno Textil, SA (Inditex) 796 20,454
Telefonica, SA 60,098 980,421
--------------
2,531,636
--------------
SWEDEN-0.8%
Telefonaktiebolaget LM Ericsson 158,000 504,099
--------------
SWITZERLAND-11.9%
Alcon, Inc. 9,900 1,082,565
Compagnie Financiere Richemont AG (a) 20,775 696,594
Credit Suisse Group 30,694 1,203,132
Nobel Biocare Holding AG 2,435 493,159
Novartis AG 24,606 1,168,211
Roche Holding AG 12,533 1,581,377
UBS AG 19,851 1,547,488
--------------
7,772,526
--------------
TAIWAN-1.3%
Cathay Financial Holding Co., Ltd. 194,000 389,578
Taiwan Semiconductor Manufacturing Co., Ltd.
Merrill Lynch International & Co. warrants,
expiring 11/21/05 (a) 211,000 470,741
--------------
860,319
--------------
UNITED KINGDOM-20.0%
02 Plc 117,892 287,796
AstraZeneca Group Plc 6,735 277,668
BAE Systems Plc 239,973 1,229,526
BHP Billiton Plc 40,980 522,401
British Airways Plc (a) 32,650 153,195
Carnival Plc 8,888 503,943
GlaxoSmithKline Plc 7,511 181,492
GUS Plc 32,060 504,409
Man Group Plc 12,242 316,290
Next Plc 14,442 389,230
Prudential Plc 102,744 910,443
Punch Taverns Plc 39,159 513,028
Reckitt Benckiser Plc 23,964 703,943
Royal Bank of Scotland Group Plc 35,793 1,077,686
SABMiller Plc 35,555 553,943
Smith & Nephew Plc 38,618 379,661
Standard Chartered Plc 46,087 839,640
Tesco Plc 184,363 1,050,320
Vodafone Group Plc 779,342 1,894,782
WPP Group Plc 73,900 756,948
--------------
13,046,344
--------------
UNITED STATES-3.2%
Schlumberger Ltd. 23,800 1,807,372
Synthes, Inc. 2,869 314,414
--------------
2,121,786
--------------
Total Common Stocks & Other Investments
(cost $53,028,657) 62,591,224
--------------
SHORT-TERM INVESTMENT-2.9%
TIME DEPOSIT-2.9%
The Bank of New York
2.063%, 7/01/05
(cost $1,884,000) $1,884 1,884,000
--------------
TOTAL INVESTMENTS-98.7%
(cost $54,912,657) 64,475,224
Other assets less liabilities-1.3% 838,020
--------------
NET ASSETS-100% $ 65,313,244
==============
(a) Non-income producing security.
Glossary of Terms:
ADR - American Depositary Receipt
GDR - Global Depositary Receipt
See Notes to Financial Statements.
5
INTERNATIONAL PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2005 (UNAUDITED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $54,912,657) $ 64,475,224
Foreign cash, at value (cost $863,336) 858,636
Dividends and interest receivable 185,106
Receivable for investment securities sold and foreign
currency contracts 172,722
Receivable for capital stock sold 55,385
------------
Total assets 65,747,073
------------
LIABILITIES
Due to custodian 4,377
Payable for investment securities purchased and foreign
currency contracts 218,057
Payable for capital stock redeemed 53,791
Advisory fee payable 40,210
Foreign capital gain tax payable 20,228
Distribution fee payable 1,681
Administrative fee payable 1,215
Transfer agent fee payable 59
Accrued expenses 94,211
------------
Total liabilities 433,829
------------
NET ASSETS $ 65,313,244
============
COMPOSITION OF NET ASSETS
Capital stock, at par $ 4,292
Additional paid-in capital 66,428,832
Undistributed net investment income 468,869
Accumulated net realized loss on investment and foreign
currency transactions (11,139,481)
Net unrealized appreciation of investments and foreign
currency denominated assets and liabilities 9,550,732
------------
$ 65,313,244
============
CLASS A SHARES
Net assets $ 57,044,481
============
Shares of capital stock outstanding 3,744,642
============
Net asset value per share $ 15.23
============
CLASS B SHARES
Net assets $ 8,268,763
============
Shares of capital stock outstanding 546,888
============
Net asset value per share $ 15.12
============
See Notes to Financial Statements.
6
INTERNATIONAL PORTFOLIO
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 2005 (UNAUDITED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
INVESTMENT INCOME
Dividends (net of foreign taxes withheld of $92,482) $ 882,455
Interest 11,185
------------
Total investment income 893,640
------------
EXPENSES
Advisory fee 241,031
Distribution fee -- Class B 9,347
Custodian 99,861
Administrative 36,250
Audit 20,730
Printing 7,472
Legal 1,278
Directors' fees 496
Transfer agency 403
Miscellaneous 1,942
------------
Total expenses 418,810
------------
Net investment income 474,830
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENT AND
FOREIGN CURRENCY TRANSACTIONS
Net realized gain (loss) on:
Investment transactions 3,591,915
Foreign currency transactions (72,866)
Net change in unrealized appreciation/depreciation of:
Investments (3,800,386)
Foreign currency denominated assets and liabilities (18,523)
------------
Net loss on investment and foreign currency transactions (299,860)
------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 174,970
============
See Notes to Financial Statements.
7
INTERNATIONAL PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 2005 DECEMBER 31,
(UNAUDITED) 2004
============== ==============
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS
Net investment income $ 474,830 $ 355,791
Net realized gain on investment and
foreign currency transactions 3,519,049 7,545,795
Net change in unrealized appreciation/
depreciation of investments and
foreign currency denominated
assets and liabilities (3,818,909) 1,986,623
Contribution from Adviser -0- 32,057
-------------- --------------
Net increase in net assets from operations 174,970 9,920,266
DIVIDENDS TO SHAREHOLDERS FROM
Net investment income
Class A (294,913) (146,839)
Class B (29,392) (9,710)
CAPITAL STOCK TRANSACTIONS
Net increase (decrease) 56,372 (548,275)
-------------- --------------
Total increase (decrease) (92,963) 9,215,442
NET ASSETS
Beginning of period 65,406,207 56,190,765
-------------- --------------
End of period (including undistributed
net investment income of $468,869
and $318,344, respectively) $ 65,313,244 $ 65,406,207
============== ==============
See Notes to Financial Statements.
8
INTERNATIONAL PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2005 (UNAUDITED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
NOTE A: SIGNIFICANT ACCOUNTING POLICIES
The AllianceBernstein International Portfolio (the "Portfolio") is a series of
AllianceBernstein Variable Products Series Fund, Inc. (the "Fund"). The
Portfolio's investment objective is to seek to obtain a total return on its
assets from long-term growth of capital principally through a broad portfolio
of marketable securities of established non-U.S. companies (i.e., companies
incorporated outside the U.S.), companies participating in foreign economies
with prospects for growth, and foreign government securities. The Fund was
incorporated in the State of Maryland on November 17, 1987, as an open-end
series investment company. The Fund offers twenty three separately managed
pools of assets which have differing investment objectives and policies. The
Portfolio 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.
The Portfolio 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
the Portfolio's net asset value per share.
The financial statements have been prepared in conformity with U.S. generally
accepted accounting principles, which require management to make certain
estimates and assumptions that affect the reported amounts of assets and
liabilities in the financial statements and amounts of income and expenses
during the reporting period. Actual results could differ from those estimates.
Additional information about some of the items discussed in these Notes to
Financial Statements is contained in the Fund's Statement of Additional
Information, which is available upon request. The following is a summary of
significant accounting policies followed by the Portfolio.
1. SECURITY VALUATION
Portfolio securities are valued at their current market value determined on the
basis of market quotations or, if market quotations are not readily available
or are deemed unreliable, at "fair value" as determined in accordance with
procedures established by and under the general supervision of the Fund's Board
of Directors.
In general, the market value of securities which are readily available and
deemed reliable are determined as follows. Securities listed on a national
securities exchange or on a foreign securities exchange are valued at the last
sale price at the close of the exchange or foreign securities exchange. If
there has been no sale on such day, the securities are valued at the mean of
the closing bid and asked prices on such day. Securities listed on more than
one exchange are valued by reference to the principal exchange on which the
securities are traded; securities not listed on an exchange but traded on The
NASDAQ Stock Market, Inc. ("NASDAQ") are valued in accordance with the NASDAQ
Official Closing Price; listed put or call options are valued at the last sale
price. If there has been no sale on that day, such securities will be valued at
the closing bid prices on that day; open futures contracts and options thereon
are valued using the closing settlement price or, in the absence of such a
price, the most recent quoted bid price. If there are no quotations available
for the day of valuation, the last available closing settlement price is used;
securities traded in the over-the-counter market, ("OTC") (but excluding
securities traded on NASDAQ) are valued at the mean of the current bid and
asked prices as reported by the National Quotation Bureau or other comparable
sources; U.S. Government securities and other debt instruments having 60 days
or less remaining until maturity are valued at amortized cost if their original
maturity was 60 days or less; or by amortizing their fair value as of the 61st
day prior to maturity if their original term to maturity exceeded 60 days;
fixed-income securities, including mortgage backed and asset backed securities,
may be valued on the basis of prices provided by a pricing service or at a
price obtained from one or more of the major broker/dealers. In cases where
broker/dealer quotes are obtained, Alliance Capital Management, L.P. (the
"Adviser") may establish procedures whereby changes in market yields or spreads
are used to adjust, on a daily basis, a recently obtained quoted price on a
security; and OTC and other derivatives are valued on the basis of a quoted bid
price or spread from a major broker/dealer in such security.
Securities for which market quotations are not readily available (including
restricted securities) or are deemed unreliable are valued at fair value.
Factors considered in making this determination may include, but are not
limited to, information obtained by contacting the issuer, analysts, analysis
of the issuer's financial statements or other available documents. In addition,
the Fund may use fair value pricing for securities primarily traded in non-U.S.
markets because, most foreign markets close well before the Fund values its
securities at 4:00 p.m., Eastern Time. The earlier close of these foreign
markets gives rise to the possibility that significant events, including broad
market moves, may have occurred in the
9
INTERNATIONAL PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
interim and may materially affect the value of those securities. To account for
this, the Fund may frequently value many of its foreign equity securities using
fair value prices based on third party vendor modeling tools to the extent
available.
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 prices of such currencies against the U.S.
dollar. Purchases and sales of portfolio securities are translated into U.S.
dollars at the rates of exchange prevailing when such securities were acquired
or sold. Income and expenses are translated into U.S. dollars at rates of
exchange prevailing when accrued.
Net realized gain or loss on foreign currency transactions represents foreign
exchange gains and losses from sales and maturities of foreign fixed income
investments, foreign currency exchange contracts, holding of foreign
currencies, currency gains or losses realized between the trade and settlement
dates on foreign investment transactions, and the difference between the
amounts of dividends, interest and foreign withholding taxes recorded on the
Portfolio's books and the U.S. dollar equivalent amounts actually received or
paid. Net unrealized 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 or depreciation of investments
and foreign currency denominated assets and liabilities.
3. TAXES
It is the policy of the Portfolio 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. The Fund may be subject to taxes imposed by countries in which it
invests. Such taxes are generally based on income and/or capital gains earned
or repatriated. Taxes are accrued and applied to net investment income, net
realized gains and net unrealized appreciation/depreciation as such income
and/or gains are earned.
4. INVESTMENT INCOME AND INVESTMENT TRANSACTIONS
Dividend income is recorded on the ex-dividend date or as soon as the Portfolio
is informed of the dividend. Interest income is accrued daily. Investment
transactions are accounted for on the trade date securities are purchased or
sold. Investment gains and losses are determined on the identified cost basis.
The Portfolio amortizes premiums and accretes discounts as adjustments to
interest income.
5. INCOME AND EXPENSES
Expenses attributable to a single portfolio are charged to that portfolio.
Expenses of the Fund are charged to each portfolio in proportion to net assets.
All income earned and expenses incurred by a Portfolio with multi-class shares
outstanding are borne on a pro-rata basis by each outstanding class of shares,
based on the proportionate interest in the portfolio represented by the net
assets of such class, except that the portfolio's Class B shares bear the
distribution fees.
6. DIVIDENDS AND DISTRIBUTIONS
The Portfolio declares and distributes dividends and distributions from net
investment income and net realized gains, respectively, if any, at least
annually. 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 U.S. generally accepted accounting principles. 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
Until September 6, 2004, under the terms of an investment advisory agreement,
the Portfolio paid the Adviser an advisory fee at an annual rate of 1% of the
Portfolio's average daily net assets. Effective September 7, 2004, the terms of
the investment advisory agreement were amended so that the advisory fee was
reduced to an annual rate of .75% of the first $2.5 billion, .65% of the next
$2.5 billion and .60% in excess of $5 billion, of the Portfolio's average daily
net assets. The fee is accrued daily and paid monthly.
10
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
Effective January 1, 2004 through September 6, 2004, in contemplation of the
final agreement with the Office of New York Attorney General ("NYAG"), the
Adviser began waiving a portion of its advisory fee so as to charge the
Portfolio at the reduced annual rate discussed above. For a more complete
discussion of the Adviser's settlement with the NYAG, please see "Legal
Proceedings" below.
During 2004, the Adviser reimbursed the Portfolio $32,057 for trading losses
incurred due to a trading entry error.
Pursuant to the advisory agreement, the Portfolio paid $36,250 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, 2005.
Brokerage commissions paid on investment transactions for the six months ended
June 30, 2005 amounted to $142,805, none of which was paid to Sanford C.
Bernstein & Co. LLC and Sanford C. Bernstein Limited, affiliates of the Adviser.
The Portfolio compensates Alliance Global Investor Services, Inc., a
wholly-owned subsidiary of the Adviser, under a Transfer Agency Agreement for
providing personnel and facilities to perform transfer agency services for the
Portfolio. Such compensation amounted to $403 for the six months ended June 30,
2005.
NOTE C: DISTRIBUTION PLAN
The Portfolio has adopted a Distribution Plan (the "Plan") for Class B shares
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the
Plan, the Portfolio pays distribution and servicing fees to AllianceBernstein
Investment Research and Management, Inc., (the "Distributor"), a wholly-owned
subsidiary of the Adviser, at an annual rate of up to .50% of the 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 limits
payments under the Plan to .25% of the Portfolio's average daily net assets
attributable to Class B shares. The Plan provides that the Distributor will use
such payments in their entirety for distribution assistance and promotional
activities.
The Portfolio is not obligated under the Plan to pay any distribution and
servicing fees in excess of the amounts set forth above. The purpose of the
payments to the Distributor under the Plan is to compensate the Distributor for
its distribution services with respect to the sale of the Portfolio's Class B
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 Plan is
characterized by the staff of the Securities and Exchange Commission as being
of the "compensation" variety.
In the event that the Plan is terminated or not continued, no distribution and
servicing fees (other than current amounts accrued but not yet paid) would be
owed by the Portfolio to the Distributor.
The Plan also provides that the Adviser may use its own resources to finance
the distribution of the Portfolio's shares.
NOTE D: INVESTMENT TRANSACTIONS
Purchases and sales of investment securities (excluding short-term investments)
for the six months ended June 30, 2005, were as follows:
PURCHASES SALES
============== ==============
Investment securities
(excluding U.S. government securities) $ 28,810,586 $ 30,485,265
U.S. government securities -0- -0-
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 $ 10,383,282
Gross unrealized depreciation (820,715)
--------------
Net unrealized appreciation $ 9,562,567
==============
11
INTERNATIONAL PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
1. FORWARD EXCHANGE CURRENCY CONTRACTS
The Portfolio may enter into forward exchange currency contracts in order to
hedge its exposure to changes in foreign currency exchange rates on its 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 on a future date at a negotiated forward rate. The gain or loss
arising from the difference between the original contract and the closing of
such contract would be included in net realized gain or loss on foreign
currency transactions.
Fluctuations in the value of open forward exchange currency contracts are
recorded for financial reporting purposes as unrealized appreciation and
depreciation by the Portfolio.
The Portfolio's custodian will place and maintain cash not available for
investment or other liquid assets in a separate account of the Portfolio having
a value at least equal to the aggregate amount of the 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 the Portfolio has in that particular
currency contract.
2. OPTION TRANSACTIONS
For hedging and investment purposes, the Portfolio may purchase and write
(sell) put and call options on U.S. and foreign government securities and
foreign currencies that are traded on U.S. and foreign 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 written options which
expire unexercised are recorded by the Portfolio on the expiration date as
realized gains from options written. 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. If a
put option is exercised, the premium received reduces the cost basis of the
security or currency purchased by the Portfolio. 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.
NOTE E: SECURITIES LENDING
The Portfolio has entered into a securities lending agreement with UBS Warburg
LLC (the "Lending Agent"). Under the terms of the agreement, the Lending Agent,
on behalf of the Portfolio, administers the lending of portfolio securities to
certain broker-dealers. In return, the Portfolio receives fee income from the
lending transactions or it retains a portion of interest on the investment of
any cash received as collateral. The Portfolio also continues to receive
dividends or interest on the securities loaned. Unrealized gain or loss on the
value of the securities loaned that may occur during the term of the loan will
be reflected in the accounts of the Portfolio. All loans are continuously
secured by collateral exceeding the value of the securities loaned. All
collateral consists of either cash or U.S. Government securities. The Lending
Agent invests the cash collateral received in an eligible money market vehicle
in accordance with the investment restrictions of the Portfolio. The Lending
Agent will indemnify the Portfolio for any loss resulting from a borrower's
failure to return a loaned security when due. For the six months ended June 30,
2005, the Portfolio had no securities on loan.
12
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
NOTE F: CAPITAL STOCK
There are 1,000,000,000 shares of $.001 par value capital stock authorized,
divided into two classes, designated Class A and Class B. Each class consists
of 500,000,000 authorized shares. Transactions in capital stock were as follows:
SHARES AMOUNT
--------------------------- ------------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
JUNE 30, 2005 DECEMBER 31, JUNE 30, 2005 DECEMBER 31,
(UNAUDITED) 2004 (UNAUDITED) 2004
------------ ------------ -------------- --------------
CLASS A
Shares sold 200,952 591,525 $ 3,062,216 $ 7,887,871
Shares issued
in reinvestment
of dividends 19,492 11,243 294,913 146,839
Shares redeemed (297,858) (887,738) (4,518,982) (11,894,787)
------------ ------------ -------------- --------------
Net decrease (77,414) (284,970) $ (1,161,853) $ (3,860,077)
=========== =========== ============= =============
CLASS B
Shares sold 122,232 329,435 $ 1,845,833 $ 4,365,653
Shares issued
in reinvestment
of dividends 1,958 749 29,392 9,711
Shares redeemed (43,775) (77,673) (657,000) (1,063,562)
------------ ------------ -------------- --------------
Net increase 80,415 252,511 $ 1,218,225 $ 3,311,802
=========== =========== ============= =============
NOTE G: RISKS INVOLVED IN INVESTING IN THE PORTFOLIO
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.
Indemnification Risk--In the ordinary course of business, the Portfolio enters
into contracts that contain a variety of indemnifications. The Portfolio's
maximum exposure under these arrangements is unknown. However, the Portfolio
has not had prior claims or losses pursuant to these indemnification provisions
and expects the risk of loss thereunder to be remote.
NOTE H: JOINT CREDIT FACILITY
A number of open-end mutual funds managed by the Adviser, including the
Portfolio, participate in a $500 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
Portfolio did not utilize the Facility during the six months ended June 30,
2005.
NOTE I: DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions to be paid for the year ending December 31,
2005 will be determined at the end of the current fiscal year. The tax
character of distributions paid during the fiscal years ended December 31, 2004
and December 31, 2003 were as follows:
2004 2003
============== ==============
Distributions paid from:
Ordinary income $ 156,549 $ 66,757
-------------- --------------
Total taxable distributions 156,549 66,757
-------------- --------------
Total distributions paid $ 156,549 $ 66,757
============== ==============
13
INTERNATIONAL PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
As of December 31, 2004, the components of accumulated earnings/(deficit) on a
tax basis were as follows:
Undistributed ordinary income $ 314,151
Accumulated capital and other losses (14,538,046)(a)
Unrealized appreciation/(depreciation) 13,253,350(b)
--------------
Total accumulated earnings/(deficit) $ (970,545)
==============
(a) On December 31, 2004, the Portfolio had a net capital loss carryforward of
$14,538,046 of which $555,431 will expire in the year 2008, $1,494,192 will
expire in the year 2009, $11,004,034 will expire in the year 2010 and
$1,484,389 will expire in the year 2011. To the extent future capital gains are
offset by capital loss carryforwards, such gains will not be distributed. Based
on certain provisions in the Internal Revenue Code, various limitations
regarding the future utilization of these carryforwards, brought forward as a
result of the Portfolio's prior year merger with Brinson Series Trust Global
Equity Portfolio, may apply. During the fiscal year, the Portfolio utilized
capital loss carryforwards of $7,306,005.
(b) The difference between book-basis and tax-basis unrealized
appreciation/(depreciation) is attributable primarily to the tax deferral of
losses on wash sales and the recognition for tax purposes of gains/losses on
certain derivative instruments.
NOTE J: LEGAL PROCEEDINGS
As has been previously reported, the staff of the U.S. Securities and Exchange
Commission ("SEC") and the NYAG have been investigating practices in the mutual
fund industry identified as "market timing" and "late trading" of mutual fund
shares. Certain other regulatory authorities have also been conducting
investigations into these practices within the industry and have requested that
the Adviser provide information to them. The Adviser has been cooperating and
will continue to cooperate with all of these authorities.
On December 18, 2003, the Adviser confirmed that it had reached terms with the
SEC and the NYAG for the resolution of regulatory claims relating to the
practice of "market timing" mutual fund shares in some of the AllianceBernstein
Mutual Funds. The agreement with the SEC is reflected in an Order of the
Commission ("SEC Order"). The agreement with the NYAG is memorialized in an
Assurrance of Discontinuance dated September 1, 2004 ("NYAG Order"). Among the
key provisions of these agreements are the following:
(i) The Adviser agreed to establish a $250 million fund (the "Reimbursement
Fund") to compensate mutual fund shareholders for the adverse effects of market
timing attributable to market timing relationships described in the SEC Order.
According to the SEC Order, the Reimbursement Fund is to be paid, in order of
priority, to fund investors based on (i) their aliquot share of losses suffered
by the fund due to market timing, and (ii) a proportionate share of advisory
fees paid by such fund during the period of such market timing;
(ii) The Adviser agreed to reduce the advisory fees it receives from some of
the AllianceBernstein long-term, open-end retail funds until December 31, 2008;
and
(iii) The Adviser agreed to implement changes to its governance and compliance
procedures. Additionally, the SEC Order and the NYAG Order contemplate that the
Adviser's registered investment company clients, including the Fund, will
introduce governance and compliance changes.
In anticipation of final, definitive documentation of the NYAG Order and
effective January 1, 2004, the Adviser began waiving a portion of its advisory
fee. On September 7, 2004, the Fund's investment advisory agreement was amended
to reflect the reduced advisory fee. For more information on this waiver and
amendment to the Fund's investment advisory agreement, please see "Advisory Fee
and Other Transactions with Affiliates" above.
A special committee of the Adviser's Board of Directors, comprised of the
members of the Adviser's Audit Committee and the other independent member of
the Adviser's Board, is continuing to direct and oversee an internal
investigation and a comprehensive review of the facts and circumstances
relevant to the SEC's and the NYAG's investigations.
In addition, the Independent Directors of the Fund ("the Independent
Directors") have initiated an investigation of the above-mentioned matters with
the advice of an independent economic consultant and independent counsel. The
Independent Directors have formed a special committee to supervise the
investigation.
On October 2, 2003, a putative class action complaint entitled Hindo et al. v.
AllianceBernstein Growth & Income Fund et al. (the "Hindo Complaint") was filed
against the Adviser; Alliance Capital Management Holding L.P.; Alliance Capital
Management Corporation; AXA Financial, Inc.; certain of the AllianceBernstein
Mutual Funds, including the Fund;
14
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
Gerald Malone; Charles Schaffran (collectively, the "Alliance Capital
defendants"); and certain other defendants not affiliated with the Adviser. The
Hindo Complaint was filed in the United States District Court for the Southern
District of New York by alleged shareholders of two of the AllianceBernstein
Mutual Funds. The Hindo Complaint alleges that certain of the Alliance Capital
defendants failed to disclose that they improperly allowed certain hedge funds
and other unidentified parties to engage in late trading and market timing of
AllianceBernstein Fund securities, violating Sections 11 and 15 of the
Securities Act, Sections 10(b) and 20(a) of the Exchange Act, and Sections 206
and 215 of the Advisers Act. Plaintiffs seek an unspecified amount of
compensatory damages and rescission of their contracts with the Adviser,
including recovery of all fees paid to the Adviser pursuant to such contracts.
Since October 2, 2003, numerous additional lawsuits making factual allegations
similar to those in the Hindo Complaint were filed against the Adviser and
certain other defendants, some of which name the Fund as a defendant. All of
these lawsuits seek an unspecified amount of damages. The lawsuits are now
pending in the United States District Court for the District of Maryland
pursuant to a ruling by the Judicial Panel on Multidistrict Litigation
transferring and centralizing all of the mutual fund cases involving market and
late trading in the District of Maryland.
As a result of the matters discussed above, investors in the AllianceBernstein
Mutual Funds may choose to redeem their investments. This may require the
AllianceBernstein Mutual Funds to sell investments held by those funds to
provide for sufficient liquidity and could also have an adverse effect on the
investment performance of the AllianceBernstein Mutual Funds.
The Adviser and approximately twelve other investment management firms were
publicly mentioned in connection with the settlement by the SEC of charges that
an unaffiliated broker/dealer violated federal securities laws relating to its
receipt of compensation for selling specific mutual funds and the disclosure of
such compensation. The SEC indicated publicly that, among other things, it was
considering enforcement action in connection with mutual funds' disclosure of
such arrangements and in connection with the practice of considering mutual
fund sales in the direction of brokerage commissions from fund portfolio
transactions. The SEC issued subpoenas to the Adviser, and the NASD issued
requests for information in connection with this matter and the Adviser
provided documents and other information to the SEC and NASD and cooperated
fully with the investigations. On June 8, 2005 the NASD announced that it had
reached a settlement with the Distributor in connection with this matter.
Management of the Adviser expects that the settlement has resolved both
regulatory inquiries described above.
On June 22, 2004, a purported class action complaint entitled Aucoin, et al. v.
Alliance Capital Management L.P., et al. ("Aucoin Complaint") was filed against
the Adviser, Alliance Capital Management Holding L.P., Alliance Capital
Management Corporation, AXA Financial, Inc., AllianceBernstein Investment
Research & Management, Inc., certain current and former directors of the
AllianceBernstein Mutual Funds, and unnamed Doe defendants. The Aucoin
Complaint names certain of the AllianceBernstein mutual funds as nominal
defendants. The Aucoin Complaint was filed in the United States District Court
for the Southern District of New York by an alleged shareholder of an
AllianceBernstein mutual fund. The Aucoin Complaint alleges, among other
things, (i) that certain of the defendants improperly authorized the payment of
excessive commissions and other fees from fund assets to broker-dealers in
exchange for preferential marketing services, (ii) that certain of the
defendants misrepresented and omitted from registration statements and other
reports material facts concerning such payments, and (iii) that certain
defendants caused such conduct as control persons of other defendants. The
Aucoin Complaint asserts claims for violation of Sections 34(b), 36(b) and
48(a) of the Investment Company Act, Sections 206 and 215 of the Advisers Act,
breach of common law fiduciary duties, and aiding and abetting breaches of
common law fiduciary duties. Plaintiffs seek an unspecified amount of
compensatory damages and punitive damages, rescission of their contracts with
the Adviser, including recovery of all fees paid to the Adviser pursuant to
such contracts, an accounting of all fund-related fees, commissions and soft
dollar payments, and restitution of all unlawfully or discriminatorily obtained
fees and expenses.
Since June 22, 2004, numerous additional lawsuits making factual allegations
substantially similar to those in the Aucoin Complaint were filed against the
Adviser and certain other defendants, and others may be filed.
It is possible that these matters and/or other developments resulting from
these matters could result in increased redemptions of the Fund's shares or
other adverse consequences to the Fund. However, the Adviser believes that
these matters are not likely to have a material adverse effect on its ability
to perform advisory services relating to the Fund.
15
INTERNATIONAL PORTFOLIO
FINANCIAL HIGHLIGHTS
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
CLASS A
----------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 2005 ---------------------------------------------------------------
(UNAUDITED) 2004 2003 2002 2001 2000
----------- ----------- ----------- ----------- ----------- -----------
Net asset value, beginning of period $15.26 $13.01 $9.90 $11.69 $16.01 $21.78
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a) .11 .08(b) .02 -0-(b) .03(b) .01(b)
Net realized and unrealized gain (loss)
on investment and foreign currency
transactions (.06) 2.20 3.11 (1.78) (3.55) (4.01)
Contribution from Adviser -0- .01 -0- -0- -0- -0-
Net increase (decrease) in net asset
value from operations .05 2.29 3.13 (1.78) (3.52) (4.00)
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.08) (.04) (.02) (.01) -0- (.03)
Distributions from net realized gain on
investment transactions -0- -0- -0- -0- (.78) (1.74)
Distributions in excess of net realized
gain on investment transactions -0- -0- -0- -0- (.02) -0-
Total dividends and distributions (.08) (.04) (.02) (.01) (.80) (1.77)
Net asset value, end of period $15.23 $15.26 $13.01 $9.90 $11.69 $16.01
TOTAL RETURN
Total investment return based on
net asset value (c) .33% 17.62% 31.59% (15.28)% (22.35)% (19.86)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $57,044 $58,341 $53,425 $46,478 $64,036 $78,990
Ratio to average net assets of:
Expenses, net of waivers and
reimbursements 1.27%(d) 1.33% 1.80% 1.36% .95% .95%
Expenses, before waivers and
reimbursements 1.27%(d) 1.50% 1.80% 1.66% 1.44% 1.34%
Net investment income 1.50%(d) .63%(b) 22% .04%(b) .23%(b) .07%(b)
Portfolio turnover rate 46% 128% 96% 70% 56% 57%
See footnote summary on page 17.
16
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
CLASS B
---------------------------------------------------------------
SIX MONTHS OCTOBER 26,
ENDED YEAR ENDED DECEMBER 31, 2001(e) TO
JUNE 30, 2005 ------------------------------------- DECEMBER 31,
(UNAUDITED) 2004 2003 2002 2001
----------- ----------- ----------- ----------- -----------
Net asset value, beginning of period $15.15 $12.93 $9.87 $11.68 $11.31
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (a) .10 .05(b) (.02) (.03)(b) (.02)(b)
Net realized and unrealized gain
(loss) on investment and foreign
currency transactions (.07) 2.20 3.09 (1.78) .39
Contribution from Adviser -0- -0- -0- -0- -0-
Net increase (decrease) in net
asset value from operations .03 2.25 3.07 (1.81) .37
LESS: DIVIDENDS
Dividends from net investment income (.06) (.03) (.01) -0- -0-
Net asset value, end of period $15.12 $15.15 $12.93 $9.87 $11.68
TOTAL RETURN
Total investment return based on
net asset value (c) .17% 17.41% 31.11% (15.50)% 3.27%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $8,269 $7,065 $2,766 $467 $413
Ratio to average net assets of:
Expenses, net of waivers and
reimbursements 1.53%(d) 1.56% 2.05% 1.63% 1.20%(d)
Expenses, before waivers and
reimbursements 1.53%(d) 1.73% 2.05% 1.92% 2.26%(d)
Net investment income (loss) 1.30%(d) .35%(b) (.17)% (.25)%(b) (.88)%(b)(d)
Portfolio turnover rate 46% 128% 96% 70% 56%
(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 return does not reflect the
deduction of taxes that a shareholder would pay on Portfolio distributions or
the redemption of Portfolio shares. Total investment return calculated for a
period of less than one year is not annualized.
(d) Annualized.
(e) Commencement of distribution.
17
[LOGO] ALLIANCEBERNSTEIN (R)
Investment Research and Management
AllianceBernstein
Variable Products Series Fund, Inc.
Semi-Annual Report
June 30, 2005
> ALLIANCEBERNSTEIN LARGE CAP GROWTH PORTFOLIO
SEMI-ANNUAL REPORT
INVESTMENT PRODUCTS OFFERED
> ARE NOT FDIC INSURED
> MAY LOSE VALUE
> ARE NOT BANK GUARANTEED
YOU MAY OBTAIN A DESCRIPTION OF THE FUND'S PROXY VOTING POLICIES AND
PROCEDURES, AND INFORMATION REGARDING HOW THE FUND VOTED PROXIES RELATING TO
PORTFOLIO SECURITIES DURING THE MOST RECENT 12-MONTH PERIOD ENDED JUNE 30,
WITHOUT CHARGE. SIMPLY VISIT THE SECURITIES AND EXCHANGE COMMISSION'S (THE
"COMMISSION") WEB SITE AT WWW.SEC.GOV, OR CALL ALLIANCEBERNSTEIN AT (800)
227-4618.
THE FUND FILES ITS COMPLETE SCHEDULE OF PORTFOLIO HOLDINGS WITH THE COMMISSION
FOR THE FIRST AND THIRD QUARTERS OF EACH FISCAL YEAR ON FORM N-Q. THE FUND'S
FORMS N-Q ARE AVAILABLE ON THE COMMISSION'S WEB SITE AT WWW.SEC.GOV. THE FUND'S
FORMS N-Q MAY ALSO BE REVIEWED AND COPIED AT THE COMMISSION'S PUBLIC REFERENCE
ROOM IN WASHINGTON, DC; INFORMATION ON THE OPERATION OF THE PUBLIC REFERENCE
ROOM MAY BE OBTAINED BY CALLING (800) SEC-0330.
LARGE CAP GROWTH PORTFOLIO
FUND EXPENSES
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including sales charges (loads) on purchase payments, contingent
deferred sales charges on redemptions and (2) ongoing costs, including
management fees; distribution (12b-1) fees; and other Fund expenses. This
example is intended to help you understand your ongoing costs (in dollars) of
investing in the Fund and to compare these costs with the ongoing costs of
investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of
the period and held for the entire period as indicated below.
Actual Expenses
The first line of the table below provides information about actual account
values and actual expenses. You may use the information in this line, together
with the amount you invested, to estimate the expenses that you paid over the
period. Simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
in the first line under the heading entitled "Expenses Paid During Period" to
estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio and an assumed annual rate of return of 5% before expenses, which is not
the Fund's actual return. The hypothetical account values and expenses may not
be used to estimate the actual ending account balance or expenses you paid for
the period. You may use this information to compare the ongoing costs of
investing in the Fund and other funds by comparing this 5% hypothetical example
with the 5% hypothetical examples that appear in the shareholder reports of
other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads), or contingent deferred sales charges on redemptions.
Therefore, the second line of the table is useful in comparing ongoing costs
only, and will not help you determine the relative total costs of owning
different funds. In addition, if these transactional costs were included, your
costs would have been higher.
Beginning Ending
Account Value Account Value Expenses Paid Annualized
Large Cap Growth Portfolio January 1, 2005 June 30, 2005 During Period* Expense Ratio*
- ------------------------------------------------------------------------------------------------
Class A
Actual $1,000 $996.16 $4.06 0.82%
Hypothetical (5% return before expenses) $1,000 $1,020.73 $4.11 0.82%
Class B
Actual $1,000 $994.80 $5.29 1.07%
Hypothetical (5% return before expenses) $1,000 $1,019.49 $5.36 1.07%
* Expenses are equal to each classes' annualized expense ratios, multiplied by
the average account value over the period, multiplied by the number of days in
the most recent fiscal half-year/365 (to reflect the one-half year period).
1
LARGE CAP GROWTH PORTFOLIO
TEN LARGEST HOLDINGS
June 30, 2005 (unaudited)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
PERCENT OF
COMPANY U.S. $ VALUE NET ASSETS
- -------------------------------------------------------------------------------
Google, Inc. Cl.A $58,365,243 5.1%
Yahoo!, Inc. 52,882,830 4.6
Dell, Inc. 44,417,142 3.9
General Electric Co. 42,058,170 3.7
Target Corp. 40,154,580 3.5
Genentech, Inc. 38,261,448 3.4
St. Jude Medical, Inc. 37,522,044 3.3
eBay, Inc. 35,898,375 3.2
American International Group, Inc. 35,823,995 3.1
UnitedHealth Group, Inc. 35,658,546 3.1
------------ -----
$421,042,373 36.9%
SECTOR DIVERSIFICATION
June 30, 2005 (unaudited)
_______________________________________________________________________________
PERCENT OF
SECTOR U.S. $ VALUE NET ASSETS
- -------------------------------------------------------------------------------
Technology $387,404,076 34.0%
Healthcare 251,298,648 22.0
Consumer Services 191,911,261 16.8
Finance 122,385,600 10.7
Energy 57,530,014 5.0
Consumer Staples 51,779,795 4.5
Capital Goods 42,058,170 3.7
Consumer Manufacturing 33,211,350 2.9
------------ -----
Total Investments* 1,137,578,914 99.6
Cash and receivables, net of liabilities 4,610,778 0.4
------------ -----
Net Assets $1,142,189,692 100.0%
* Excludes short-term investments.
Please Note: The sector classifications presented herein are based on the
sector categorization methodology of the Adviser.
2
LARGE CAP GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS
June 30, 2005 (unaudited)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
Company Shares U.S. $ Value
- -------------------------------------------------------------------------------
COMMON STOCKS-99.6%
TECHNOLOGY-34.0%
COMMUNICATION
EQUIPMENT-8.0%
Corning, Inc. (a) 1,340,700 $22,282,434
Juniper Networks, Inc. (a) 1,378,500 34,710,630
QUALCOMM, Inc. 1,044,600 34,482,246
------------
91,475,310
------------
COMPUTER
HARDWARE/
STORAGE-8.3%
Apple Computer, Inc. (a) 957,300 35,238,213
Dell, Inc. (a) 1,124,200 44,417,142
EMC Corp. (a) 1,115,800 15,297,618
------------
94,952,973
------------
COMPUTER
PERIPHERALS-1.2%
Network Appliance, Inc. (a) 475,400 13,439,558
------------
INTERNET MEDIA-9.7%
Google, Inc. Cl.A (a) 198,420 58,365,243
Yahoo!, Inc. (a) 1,526,200 52,882,830
------------
111,248,073
------------
SEMI-CONDUCTOR
COMPONENTS-5.5%
Altera Corp. (a) 472,000 9,355,040
Broadcom Corp. Cl. A (a) 764,600 27,150,946
Marvell Technology Group
Ltd. (Bermuda) (a) 611,600 23,265,264
Texas Instruments, Inc. 125,600 3,525,592
------------
63,296,842
------------
SOFTWARE-1.3%
Microsoft Corp. 523,000 12,991,320
------------
387,404,076
------------
HEALTHCARE-22.0%
BIOTECHNOLOGY-5.0%
Affymetrix, Inc. (a) 71,700 3,866,781
Amgen, Inc. (a) 165,000 9,975,900
Genentech, Inc. (a) 476,600 38,261,448
Gilead Sciences, Inc. (a) 111,400 4,900,486
------------
57,004,615
------------
DRUGS-3.3%
Eli Lilly & Co. 165,600 9,225,576
Teva Pharmaceutical Industries
Ltd. (ADR) (Israel) 899,000 27,994,860
------------
37,220,436
------------
MEDICAL PRODUCTS-7.9%
Alcon, Inc. (Switzerland) 242,700 26,539,245
St. Jude Medical, Inc. (a) 860,400 37,522,044
Zimmer Holdings, Inc. (a) 347,400 26,461,458
------------
90,522,747
------------
MEDICAL SERVICES-5.8%
UnitedHealth Group, Inc. 683,900 35,658,546
WellPoint, Inc. (a) 443,600 30,892,304
------------
66,550,850
------------
251,298,648
------------
CONSUMER
SERVICES-16.8%
ADVERTISING-0.1%
Lamar Advertising Co. (a) 26,500 1,133,405
------------
BROADCASTING &
CABLE-1.7%
The E.W. Scripps Co. Cl. A 396,300 19,339,440
------------
ENTERTAINMENT &
LEISURE-1.2%
Carnival Corp. (Panama) 251,800 13,735,690
------------
RESTAURANT &
LODGING-1.0%
Starbucks Corp. (a) 231,300 11,948,958
------------
RETAIL - GENERAL
MERCHANDISE-9.7%
eBay, Inc. (a) 1,087,500 35,898,375
Lowe's Cos., Inc. 588,800 34,279,936
Target Corp. 738,000 40,154,580
------------
110,332,891
------------
MISCELLANEOUS-3.1%
Electronic Arts, Inc. (a) 625,700 35,420,877
------------
191,911,261
------------
FINANCE-10.7%
BROKERAGE & MONEY
MANAGEMENT-3.9%
Franklin Resources, Inc. 180,200 13,871,796
Legg Mason, Inc. 47,100 4,903,581
Merrill Lynch & Co., Inc. 118,100 6,496,681
The Goldman Sachs Group,
Inc. 185,100 18,883,902
------------
44,155,960
------------
INSURANCE-5.0%
AFLAC, Inc. 192,400 8,327,072
American International
Group, Inc. 616,592 35,823,995
The Progressive Corp. 140,000 13,833,400
------------
57,984,467
------------
MISCELLANEOUS-1.8%
Citigroup, Inc. 201,900 9,333,837
MBNA Corp. 417,100 10,911,336
------------
20,245,173
------------
122,385,600
------------
3
LARGE CAP GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS
(continued)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
Company Shares U.S. $ Value
- -------------------------------------------------------------------------------
ENERGY-5.0%
OIL SERVICE-5.0%
Halliburton Co. 571,500 $27,329,130
Nabors Industries Ltd.
(Bermuda) (a) 498,200 30,200,884
------------
57,530,014
------------
CONSUMER
STAPLES-4.5%
COSMETICS-2.1%
Avon Products, Inc. 645,700 24,439,745
------------
HOUSEHOLD
PRODUCTS-1.9%
Colgate-Palmolive Co. 120,000 5,989,200
The Procter & Gamble Co. 307,200 16,204,800
------------
22,194,000
------------
RETAIL - FOOD &
DRUG-0.5%
Whole Foods Market, Inc. 43,500 5,146,050
------------
51,779,795
------------
CAPITAL GOODS-3.7%
MISCELLANEOUS-3.7%
General Electric Co. 1,213,800 42,058,170
------------
Shares or
Principal
Amount
Company (000) U.S. $ Value
- -------------------------------------------------------------------------------
CONSUMER
MANUFACTURING-2.9%
BUILDING &
RELATED-2.9%
Pulte Homes, Inc. 394,200 $33,211,350
--------------
Total Common Stocks
(cost $903,855,572) 1,137,578,914
--------------
SHORT-TERM
INVESTMENT-0.4%
TIME DEPOSIT-0.4%
The Bank of New York
2.063% 7/01/05
(cost $4,558,000) $4,558 4,558,000
--------------
TOTAL
INVESTMENTS-100.0%
(cost $908,413,572) 1,142,136,914
Other assets less
liabilities-0.0% 52,778
--------------
NET ASSETS-100% $1,142,189,692
==============
(a) Non-income producing security.
Glossary:
ADR - American Depositary Receipt
See Notes to Financial Statements.
4
LARGE CAP GROWTH PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2005 (unaudited)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $908,413,572) $1,142,136,914
Cash 258
Receivable for investment securities sold 10,921,320
Dividends and interest receivable 467,085
Receivable for capital stock sold 227,540
--------------
Total assets 1,153,753,117
--------------
LIABILITIES
Payable for investment securities purchased 7,848,485
Payable for capital stock redeemed 2,587,829
Advisory fee payable 716,253
Distribution fee payable 117,666
Administrative fee payable 1,215
Transfer agent fee payable 59
Accrued expenses 291,918
--------------
Total liabilities 11,563,425
--------------
NET ASSETS $1,142,189,692
==============
COMPOSITION OF NET ASSETS
Capital stock, at par $ 49,294
Additional paid-in capital 1,696,274,444
Accumulated net investment loss (1,856,563)
Accumulated net realized loss on investment transactions (786,000,825)
Net unrealized appreciation of investments 233,723,342
--------------
$1,142,189,692
==============
Class A Shares
Net assets $ 577,653,732
==============
Shares of capital stock outstanding 24,739,652
==============
Net asset value per share $ 23.35
==============
Class B Shares
Net assets $ 564,535,960
==============
Shares of capital stock outstanding 24,554,253
==============
Net asset value per share $ 22.99
==============
See Notes to Financial Statements.
5
LARGE CAP GROWTH PORTFOLIO
STATEMENT OF OPERATIONS
Six Months Ended June 30, 2005 (unaudited)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
INVESTMENT INCOME
Dividends (net of foreign taxes withheld of $58,802) $ 3,432,538
Interest 62,638
--------------
Total investment income 3,495,176
--------------
EXPENSES
Advisory fee 4,294,055
Distribution fee--Class B 696,802
Printing 165,333
Custodian 119,057
Administrative 36,250
Legal 24,980
Audit 20,730
Directors' fees 496
Transfer agency 403
Miscellaneous 38,146
--------------
Total expenses 5,396,252
--------------
Net investment loss (1,901,076)
--------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENT TRANSACTIONS
Net realized gain on investment transactions 30,201,983
Net change in unrealized appreciation/depreciation of
investments (38,155,561)
--------------
Net loss on investment transactions (7,953,578)
--------------
NET DECREASE IN NET ASSETS FROM OPERATIONS $ (9,854,654)
==============
See Notes to Financial Statements.
6
LARGE CAP GROWTH PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
Six Months Ended Year Ended
June 30, 2005 December 31,
(unaudited) 2004
============== =============
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment loss $ (1,901,076) $ (3,272,959)
Net realized gain on investment transactions 30,201,983 112,065,843
Net change in unrealized appreciation/
depreciation of investments (38,155,561) (11,444,905)
-------------- -------------
Net increase (decrease) in net assets from
operations (9,854,654) 97,347,979
CAPITAL STOCK TRANSACTIONS
Net decrease (107,549,537) (449,453,220)
-------------- -------------
Total decrease (117,404,191) (352,105,241)
NET ASSETS
Beginning of period 1,259,593,883 1,611,699,124
-------------- -------------
End of period (including accumulated net
investment loss and undistributed
net investment income of ($1,856,563)
and $44,513, respectively) $1,142,189,692 $1,259,593,883
============== =============
See Notes to Financial Statements.
7
LARGE CAP GROWTH PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
June 30, 2005 (unaudited)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
NOTE A: Significant Accounting Policies
The AllianceBernstein Large Cap Growth Portfolio (the "Portfolio"), formerly
AllianceBernstein Premier Growth Portfolio, is a series of AllianceBernstein
Variable Products Series Fund, Inc. (the "Fund"). The Portfolio's investment
objective is to seek growth of capital by pursuing aggressive investment
policies. The Fund was incorporated in the State of Maryland on November 17,
1987, as an open-end series investment company. The Fund offers twenty-three
separately managed pools of assets which have differing investment objectives
and policies. The Portfolio 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.
The Portfolio 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
the Portfolio's net asset value per share.
The financial statements have been prepared in conformity with U.S. generally
accepted accounting principles, which require management to make certain
estimates and assumptions that affect the reported amounts of assets and
liabilities in the financial statements and amounts of income and expenses
during the reporting period. Actual results could differ from those estimates.
Additional information about some of the items discussed in these Notes to
Financial Statements is contained in the Portfolio's Statement of Additional
Information, which is available upon request. The following is a summary of
significant accounting policies followed by the Portfolio.
1. Security Valuation
Portfolio securities are valued at their current market value determined on the
basis of market quotations or, if market quotations are not readily available
or are deemed unreliable, at "fair value" as determined in accordance with
procedures established by and under the general supervision of the Fund's Board
of Directors.
In general, the market value of securities which are readily available and
deemed reliable are determined as follows. Securities listed on a national
securities exchange or on a foreign securities exchange are valued at the last
sale price at the close of the exchange or foreign securities exchange. If
there has been no sale on such day, the securities are valued at the mean of
the closing bid and asked prices on such day. Securities listed on more than
one exchange are valued by reference to the principal exchange on which the
securities are traded; securities not listed on an exchange but traded on The
NASDAQ Stock Market, Inc. ("NASDAQ") are valued in accordance with the NASDAQ
Official Closing Price; listed put or call options are valued at the last sale
price. If there has been no sale on that day, such securities will be valued at
the closing bid prices on that day; open futures contracts and options thereon
are valued using the closing settlement price or, in the absence of such a
price, the most recent quoted bid price. If there are no quotations available
for the day of valuation, the last available closing settlement price is used;
securities traded in the over-the-counter market, ("OTC") (but excluding
securities traded on NASDAQ) are valued at the mean of the current bid and
asked prices as reported by the National Quotation Bureau or other comparable
sources; U.S. Government securities and other debt instruments having 60 days
or less remaining until maturity are valued at amortized cost if their original
maturity was 60 days or less; or by amortizing their fair value as of the 61st
day prior to maturity if their original term to maturity exceeded 60 days;
fixed-income securities, including mortgage backed and asset backed securities,
may be valued on the basis of prices provided by a pricing service or at a
price obtained from one or more of the major broker/dealers. In cases where
broker/dealer quotes are obtained, Alliance Capital Management, L.P. (the
"Adviser") may establish procedures whereby changes in market yields or spreads
are used to adjust, on a daily basis, a recently obtained quoted price on a
security; and OTC and other derivatives are valued on the basis of a quoted bid
price or spread from a major broker/dealer in such security.
Securities for which market quotations are not readily available (including
restricted securities) or are deemed unreliable are valued at fair value.
Factors considered in making this determination may include, but are not
limited to, information obtained by contacting the issuer, analysts, analysis
of the issuer's financial statements or other available documents. In addition,
the Fund may use fair value pricing for securities primarily traded in non-U.S.
markets because, most foreign markets close well before the Fund values its
securities at 4:00 p.m., Eastern Time. The earlier close of these foreign
markets gives rise to the possibility that significant events, including broad
market moves, may have occurred in the interim and may materially affect the
value of those securities. To account for this, the Fund may frequently value
many of its foreign equity securities using fair value prices based on third
party vendor modeling tools to the extent available.
8
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
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 prices of such currencies against the U.S.
dollar. Purchases and sales of portfolio securities are translated into U.S.
dollars at the rates of exchange prevailing when such securities were acquired
or sold. Income and expenses are translated into U.S. dollars at rates of
exchange prevailing when accrued.
Net realized gain or loss on foreign currency transactions represents foreign
exchange gains and losses from sales and maturities of foreign fixed income
investments, foreign currency exchange contracts, holding of foreign
currencies, currency gains or losses realized between the trade and settlement
dates on foreign investment transactions, and the difference between the
amounts of dividends, interest and foreign withholding taxes recorded on the
Portfolio's books and the U.S. dollar equivalent amounts actually received or
paid. Net unrealized 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 or depreciation of investments
and foreign currency denominated assets and liabilities.
3. Taxes
It is the Portfolio's policy to meet the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute all of its
investment company taxable income and net realized gains, if any, to
shareholders. Therefore, no provisions for federal income or excise taxes are
required. The Fund may be subject to taxes imposed by countries in which it
invests. Such taxes are generally based on income and/or capital gains earned
or repatriated. Taxes are accrued and applied to net investment income, net
realized gains and net unrealized appreciation/depreciation as such income
and/or gains are earned.
4. Investment Income and Investment Transactions
Dividend income is recorded on the ex-dividend date or as soon as the Porfolio
is informed of the dividend. Interest income is accrued daily. Investment
transactions are accounted for on the date securities are purchased or sold.
Investment gains and losses are determined on the identified cost basis. The
Portfolio amortizes premiums and accretes discounts as adjustments to interest
income.
5. Income and Expenses
Expenses attributable to a single portfolio are charged to that portfolio.
Expenses of the Fund are charged to each portfolio in proportion to net assets.
All income earned and expenses incurred by a portfolio with multi-class shares
outstanding are borne on a pro-rata basis by each outstanding class of shares
based on the proportionate interest in the portfolio represented by the net
assets of such class, except that the portfolio's Class B shares bear the
distribution fees.
6. Dividends and Distributions
The Portfolio declares and distributes dividends and distributions from net
investment income and net realized gains, respectively, if any, at least
annually. 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 U.S. generally accepted accounting principles. 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
Until September 6, 2004, under the terms of an investment advisory agreement,
the Portfolio paid the Adviser an advisory fee at an annual rate of 1% of the
Portfolio's average daily net assets. Effective September 7, 2004, the terms of
the investment advisory agreement were amended so that the advisory fee was
reduced to an annual rate of .75% of the first $2.5 billion, .65% of the next
$2.5 billion and .60% in excess of $5 billion, of the Portfolio's average daily
net assets. The fee is accrued daily and paid monthly.
9
LARGE CAP GROWTH PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(continued)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
Effective January 1, 2004 through September 6, 2004, in contemplation of the
final agreement with the Office of New York Attorney General ("NYAG"), the
Adviser began waiving a portion of its advisory fee so as to charge the
Portfolio at the reduced annual rate discussed above. For a more complete
discussion of the Adviser's settlement with the NYAG, please see "Legal
Proceedings" below.
Pursuant to the advisory agreement, the Portfolio paid $36,250 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, 2005.
Brokerage commissions paid on investment transactions for the six months ended
June 30, 2005, amounted to $599,298, of which $17,787 and $0, respectively, was
paid to Sanford C. Bernstein &Co. LLC and Sanford C. Bernstein Limited,
affiliates of the Adviser.
The Portfolio compensates Alliance Global Investor Services, Inc., a
wholly-owned subsidiary of the Adviser, under a Transfer Agency Agreement for
providing personnel and facilities to perform transfer agency services for the
Portfolio. Such compensation amounted to $403 for the six months ended June 30,
2005.
NOTE C: Distribution Plan
The Portfolio has adopted a Distribution Plan (the "Plan") for Class B shares
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the
Plan, the Portfolio pays distribution and servicing fees to AllianceBernstein
Investment Research and Management, Inc. (the "Distributor"), a wholly-owned
subsidiary of the Adviser, at an annual rate of up to .50% of the 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 limits
payments under the Plan to .25% of the Portfolio's average daily net assets
attributable to Class B shares. The Plan provides that the Distributor will use
such payments in their entirety for distribution assistance and promotional
activities.
The Portfolio is not obligated under the Plan to pay any distribution and
servicing fees in excess of the amounts set forth above. The purpose of the
payments to the Distributor under the Plan is to compensate the Distributor for
its distribution services with respect to the sale of the Portfolio's Class B
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 Plan is
characterized by the staff of the Securities and Exchange Commission as being
of the "compensation" variety.
In the event that the Plan is terminated or not continued, no distribution and
servicing fees (other than current amounts accrued but not yet paid) would be
owed by the Portfolio to the Distributor.
The Plan also provides that the Adviser may use its own resources to finance
the distribution of the Portfolio's shares.
NOTE D: Investment Transactions
Purchases and sales of investment securities (excluding short-term investments)
for the six months ended June 30, 2005, were as follows:
Purchases Sales
============== =============
Investment securities (excluding U.S.
government securities) $287,629,695$ 389,584,694
U.S. government securities -0- -0-
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 $241,479,334
Gross unrealized depreciation (7,755,992)
------------
Net unrealized appreciation $233,723,342
============
10
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
1. Forward Exchange Currency Contracts
The Portfolio may enter into forward exchange currency contracts in order to
hedge its exposure to changes in foreign currency exchange rates on its 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 on a future date at a negotiated forward rate. The gain or loss
arising from the difference between the original contract and the closing of
such contract would be included in net realized gain or loss on foreign
currency transactions.
Fluctuations in the value of open forward exchange currency contracts are
recorded for financial reporting purposes as unrealized appreciation and
depreciation by the Portfolio.
The Portfolio's custodian will place and maintain cash not available for
investment or other liquid assets in a separate account of the Portfolio having
a value at least equal to the aggregate amount of the Portfolio's commitments
under forward exchange currency contracts entered into with respect to position
hedges.
Risks may arise from the potential inability of the 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 the Portfolio has in that particular
currency contract.
2. Option Transactions
For hedging and investment purposes, the Portfolio may purchase and write
(sell) put and call options on U.S. and foreign government securities and
foreign currencies that are traded on U.S. and foreign 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 written options which
expire unexercised are recorded by the Portfolio on the expiration date as
realized gains from options written. 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. If a
put option is exercised, the premium received reduces the cost basis of the
security or currency purchased by the Portfolio. 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.
NOTE E: Securities Lending
The Portfolio has entered into a securities lending agreement with UBS Warburg
LLC (the "Lending Agent"). Under the terms of the agreement, the Lending Agent,
on behalf of the Portfolio, administers the lending of portfolio securities to
certain broker-dealers. In return, the Portfolio receives fee income from the
lending transactions or it retains a portion of interest on the investment of
any cash received as collateral. The Portfolio also continues to receive
dividends or interest on the securities loaned. Unrealized gain or loss on the
value of the securities loaned that may occur during the term of the loan will
be reflected in the accounts of the Portfolio. All loans are continuously
secured by collateral exceeding the value of the securities loaned. All
collateral consists of either cash or U.S. Government securities. The Lending
Agent invests the cash collateral received in an eligible money market vehicle
in accordance with the investment restrictions of the Portfolio. The Lending
Agent will indemnify the Portfolio for any loss resulting from a borrower's
failure to return a loaned security when due. For the six months ended June 30,
2005, the Portfolio had no securities on loan.
11
LARGE CAP GROWTH PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(continued)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
NOTE F: Capital Stock
There are 1,000,000,000 shares of $.001 par value capital stock authorized,
divided into two classes, designated Class A and Class B shares. Each class
consists of 500,000,000 authorized shares. Transactions in capital stock were
as follows:
SHARES AMOUNT
--------------------------- ------------------------------
Six Months Ended Year Ended Six Months Ended Year Ended
June 30, 2005 December 31, June 30, 2005 December 31,
(unaudited) 2004 (unaudited) 2004
------------ ------------ -------------- --------------
Class A
Shares sold 349,269 541,796 $ 7,961,490 $ 11,866,276
Shares redeemed (3,621,197) (15,060,638) (81,389,271) (326,511,199)
------------ ------------ -------------- --------------
Net decrease (3,271,928) (14,518,842) $ (73,427,781) $ (314,644,923)
=========== ============ ============== ==============
Class B
Shares sold 1,169,393 3,994,801 $25,921,893$ 86,087,736
Shares redeemed (2,712,882) (10,419,161) (60,043,649) (220,896,033)
------------ ------------ -------------- --------------
Net decrease (1,543,489) (6,424,360) $ (34,121,756) $ (134,808,297)
=========== ============ ============== ==============
NOTE G: Risks Involved in Investing in the Portfolio
Foreign Securities 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.
Indemnification Risk--In the ordinary course of business, the Portfolio enters
into contracts that contain a variety of indemnifications. The Portfolio's
maximum exposure under these arrangements is unknown. However, the Portfolio
has not had prior claims or losses pursuant to these indemnification provisions
and expects the risk of loss thereunder to be remote.
NOTE H: Joint Credit Facility
A number of open-end mutual funds managed by the Adviser, including the
Portfolio, participate in a $500 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
Portfolio did not utilize the Facility during the six months ended June 30,
2005.
NOTE I: Components of Accumulated Earnings (Deficit)
The tax character of distributions to be paid for the year ending December 31,
2005 will be determined at the end of the current fiscal year. As of December
31, 2004, the components of accumulated earnings/(deficit) on a tax basis were
as follows:
Accumulated capital and other losses $(807,565,654)(a)
Unrealized appreciation/(depreciation) 263,286,262(b)
-------------
Total accumulated earnings/(deficit) $(544,279,392)
=============
(a) On December 31, 2004, the Portfolio had a net capital loss carryforward of
$807,565,654 of which $162,234,067 will expire in the year 2009, $478,225,244
will expire in the year 2010 and $167,106,343 will expire in the year 2011. To
the extent future capital gains are offset by capital loss carryforwards, such
gains will not be distributed. During the current fiscal year, the Portfolio
utilized capital loss carryforwards of $75,488,264.
(b) The difference between book-basis and tax-basis unrealized
appreciation/(depreciation) is attributable primarily to the tax deferral of
losses on wash sales and the tax treatment of dividends received.
12
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
NOTE J: Legal Proceedings
As has been previously reported, the staff of the U.S. Securities and Exchange
Commission ("SEC") and the NYAG have been investigating practices in the mutual
fund industry identified as "market timing" and "late trading" of mutual fund
shares. Certain other regulatory authorities have also been conducting
investigations into these practices within the industry and have requested that
the Adviser provide information to them. The Adviser has been cooperating and
will continue to cooperate with all of these authorities.
On December 18, 2003, the Adviser confirmed that it had reached terms with the
SEC and the NYAG for the resolution of regulatory claims relating to the
practice of "market timing" mutual fund shares in some of the AllianceBernstein
Mutual Funds. The agreement with the SEC is reflected in an Order of the
Commission ("SEC Order"). The agreement with the NYAG is memorialized in an
Assurrance of Discontinuance dated September 1, 2004 ("NYAG Order"). Among the
key provisions of these agreements are the following:
(i) The Adviser agreed to establish a $250 million fund (the
"Reimbursement Fund") to compensate mutual fund shareholders for the adverse
effects of market timing attributable to market timing relationships described
in the SEC Order. According to the SEC Order, the Reimbursement Fund is to be
paid, in order of priority, to fund investors based on (i) their aliquot share
of losses suffered by the fund due to market timing, and (ii) a proportionate
share of advisory fees paid by such fund during the period of such market
timing;
(ii) The Adviser agreed to reduce the advisory fees it receives from some
of the AllianceBernstein long-term, open-end retail funds until December 31,
2008; and
(iii) The Adviser agreed to implement changes to its governance and
compliance procedures. Additionally, the SEC Order and the NYAG Order
contemplate that the Adviser's registered investment company clients, including
the Fund, will introduce governance and compliance changes.
In anticipation of final, definitive documentation of the NYAG Order and
effective January 1, 2004, the Adviser began waiving a portion of its advisory
fee. On September 7, 2004, the Fund's investment advisory agreement was amended
to reflect the reduced advisory fee. For more information on this waiver and
amendment to the Fund's investment advisory agreement, please see "Advisory Fee
and Other Transactions with Affiliates" above.
A special committee of the Adviser's Board of Directors, comprised of the
members of the Adviser's Audit Committee and the other independent member of
the Adviser's Board, is continuing to direct and oversee an internal
investigation and a comprehensive review of the facts and circumstances
relevant to the SEC's and the NYAG's investigations.
In addition, the Independent Directors of the Fund ("the Independent
Directors") have initiated an investigation of the above-mentioned matters with
the advice of an independent economic consultant and independent counsel. The
Independent Directors have formed a special committee to supervise the
investigation.
On October 2, 2003, a putative class action complaint entitled Hindo et al. v.
Alliancebernstein Growth & Income Fund et al. (the "Hindo Complaint") was filed
against the Adviser; Alliance Capital Management Holding L.P.; Alliance Capital
Management Corporation; AXA Financial, Inc.; certain of the AllianceBernstein
Mutual Funds, including the Fund; Gerald Malone; Charles Schaffran
(collectively, the "Alliance Capital defendants"); and certain other defendants
not affiliated with the Adviser. The Hindo Complaint was filed in the United
States District Court for the Southern District of New York by alleged
shareholders of two of the AllianceBernstein Mutual Funds. The Hindo Complaint
alleges that certain of the Alliance Capital defendants failed to disclose that
they improperly allowed certain hedge funds and other unidentified parties to
engage in late trading and market timing of AllianceBernstein Fund securities,
violating Sections 11 and 15 of the Securities Act, Sections 10(b) and 20(a) of
the Exchange Act, and Sections 206 and 215 of the Advisers Act. Plaintiffs seek
an unspecified amount of compensatory damages and rescission of their contracts
with the Adviser, including recovery of all fees paid to the Adviser pursuant
to such contracts.
Since October 2, 2003, numerous additional lawsuits making factual allegations
similar to those in the Hindo Complaint were filed against the Adviser and
certain other defendants, some of which name the Fund as a defendant. All of
these lawsuits seek an unspecified amount of damages. The lawsuits are now
pending in the United States District Court for the District of Maryland
pursuant to a ruling by the Judicial Panel on Multidistrict Litigation
transferring and centralizing all of the mutual fund cases involving market and
late trading in the District of Maryland.
13
LARGE CAP GROWTH PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(continued)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
As a result of the matters discussed above, investors in the AllianceBernstein
Mutual Funds may choose to redeem their investments. This may require the
AllianceBernstein Mutual Funds to sell investments held by those funds to
provide for sufficient liquidity and could also have an adverse effect on the
investment performance of the AllianceBernstein Mutual Funds.
The Adviser and approximately twelve other investment management firms were
publicly mentioned in connection with the settlement by the SEC of charges that
an unaffiliated broker/dealer violated federal securities laws relating to its
receipt of compensation for selling specific mutual funds and the disclosure of
such compensation. The SEC indicated publicly that, among other things, it was
considering enforcement action in connection with mutual funds' disclosure of
such arrangements and in connection with the practice of considering mutual
fund sales in the direction of brokerage commissions from fund portfolio
transactions. The SEC issued subpoenas to the Adviser, and the NASD issued
requests for information in connection with this matter and the Adviser
provided documents and other information to the SEC and NASD and cooperated
fully with the investigations. On June 8, 2005 the NASD announced that it had
reached a settlement with the Distributor in connection with this matter.
Management of the Adviser expects that the settlement has resolved both
regulatory inquiries described above.
On June 22, 2004, a purported class action complaint entitled Aucoin, et al. v.
Alliance Capital Management L.P., et al. ("Aucoin Complaint") was filed against
the Adviser, Alliance Capital Management Holding L.P., Alliance Capital
Management Corporation, AXA Financial, Inc., AllianceBernstein Investment
Research & Management, Inc., certain current and former directors of the
AllianceBernstein Mutual Funds, and unnamed Doe defendants. The Aucoin
Complaint names certain of the AllianceBernstein mutual funds as nominal
defendants. The Aucoin Complaint was filed in the United States District Court
for the Southern District of New York by an alleged shareholder of an
AllianceBernstein mutual fund. The Aucoin Complaint alleges, among other
things, (i) that certain of the defendants improperly authorized the payment of
excessive commissions and other fees from fund assets to broker-dealers in
exchange for preferential marketing services, (ii) that certain of the
defendants misrepresented and omitted from registration statements and other
reports material facts concerning such payments, and (iii) that certain
defendants caused such conduct as control persons of other defendants. The
Aucoin Complaint asserts claims for violation of Sections 34(b), 36(b) and
48(a) of the Investment Company Act, Sections 206 and 215 of the Advisers Act,
breach of common law fiduciary duties, and aiding and abetting breaches of
common law fiduciary duties. Plaintiffs seek an unspecified amount of
compensatory damages and punitive damages, rescission of their contracts with
the Adviser, including recovery of all fees paid to the Adviser pursuant to
such contracts, an accounting of all fund-related fees, commissions and soft
dollar payments, and restitution of all unlawfully or discriminatorily obtained
fees and expenses.
Since June 22, 2004, numerous additional lawsuits making factual allegations
substantially similar to those in the Aucoin Complaint were filed against the
Adviser and certain other defendants, and others may be filed.
It is possible that these matters and/or other developments resulting from
these matters could result in increased redemptions of the Fund's shares or
other adverse consequences to the Fund. However, the Adviser believes that
these matters are not likely to have a material adverse effect on its ability
to perform advisory services relating to the Fund.
14
LARGE CAP GROWTH PORTFOLIO
FINANCIAL HIGHLIGHTS
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
CLASS A
----------------------------------------------------------------------------
Six Months
Ended Year Ended December 31,
June 30, 2005 ---------------------------------------------------------------
(unaudited) 2004 2003 2002 2001 2000
----------- ----------- ----------- ----------- ----------- -----------
Net asset value, beginning of period $23.44 $21.58 $ 17.45 $25.16 $32.05 $40.45
----------- ----------- ----------- ----------- ----------- -----------
Income From Investment Operations
Net investment loss (a) (.02) (.03)(b) (.05)(b) (.08 ) (.06) (.11)
Net realized and unrealized gain (loss)
on investment transactions (.07) 1.89 4.18 (7.63) (5.31) (6.18)
----------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease) in net asset
value from operations (.09) 1.86 4.13 (7.71) (5.37) (6.29)
----------- ----------- ----------- ----------- ----------- -----------
Less: Distributions
Distributions from net realized gain
on investment transactions -0- -0- -0- -0- (1.38) (2.11)
Distributions in excess of net realized
gain on investment transactions -0- -0- -0- -0- (.14) -0-
----------- ----------- ----------- ----------- ----------- -----------
Total distributions -0- -0- -0- -0- (1.52) (2.11)
----------- ----------- ----------- ----------- ----------- -----------
Net asset value, end of period $23.35 $23.44 $21.58 $17.45 $25.16 $32.05
=========== =========== =========== =========== =========== ===========
Total Return
Total investment return based on
net asset value (c) (.38)% 8.62% 23.67% (30.64)% (17.21)% (16.58)%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $577,654 $656,544 $917,935 $869,130 $1,586,575 $2,148,332
Ratio to average net assets of:
Expenses, net of waivers and
reimbursements .82%(d) .81% 1.04% 1.05% 1.04% 1.04%
Expenses, before waivers and
reimbursements .82%(d) .98% 1.05% 1.05% 1.04% 1.04%
Net investment loss (.21)%(d) (.13)%(b) (.24)%(b) (.41)% (.21)% (.29)%
Portfolio turnover rate 25% 73% 79% 109% 49% 41%
See footnote summary on page 16.
15
LARGE CAP GROWTH PORTFOLIO
FINANCIAL HIGHLIGHTS
(continued)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
CLASS B
----------------------------------------------------------------------------
Six Months
Ended Year Ended December 31,
June 30, 2005 ---------------------------------------------------------------
(unaudited) 2004 2003 2002 2001 2000
----------- ----------- ----------- ----------- ----------- -----------
Net asset value, beginning of period $23.11 $21.33 $17.29 $25.00 $31.93 $40.40
----------- ----------- ----------- ----------- ----------- -----------
Income From Investment Operations
Net investment loss (a) (.05) (.08)(b) (.09)(b) (.13) (.12) (.18)
Net realized and unrealized gain (loss)
on investment transactions (.07) 1.86 4.13 (7.58) (5.29) (6.18)
----------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease) in net asset
value from operations (.12) 1.78 4.04 (7.71) (5.41) (6.36)
----------- ----------- ----------- ----------- ----------- -----------
Less: Distributions
Distributions from net realized gain
on investment transactions -0- -0- -0- -0- (1.38) (2.11)
Distributions in excess of net realized
gain on investment transactions -0- -0- -0- -0- (.14) -0-
----------- ----------- ----------- ----------- ----------- -----------
Total distributions -0- -0- -0- -0- (1.52) (2.11)
----------- ----------- ----------- ----------- ----------- -----------
Net asset value, end of period $22.99 $23.11 $21.33 $17.29 $25.00 $31.93
=========== =========== =========== =========== =========== ===========
Total Return
Total investment return based on
net asset value (c) (.52)% 8.34% 23.37% (30.84)% (17.40)% (16.78)%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $564,536 $603,050 $693,764 $493,937 $572,266 $336,104
Ratio to average net assets of:
Expenses, net of waivers and
reimbursements 1.07%(d) 1.06% 1.29% 1.31% 1.29% 1.30%
Expenses, before waivers and
reimbursements 1.07%(d) 1.24% 1.30% 1.31% 1.29% 1.30%
Net investment loss (.46)%(d) (.38)%(b) (.49)%(b) (.64)% (.47)% (.51)%
Portfolio turnover rate 25% 73% 79% 109% 49% 41%
(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 return does not reflect the
deduction of taxes that a shareholder would pay on Portfolio distributions or
the redemption of Portfolio shares. Total investment return calculated for a
period of less than one year is not annualized.
(d) Annualized.
16
[LOGO] ALLIANCEBERNSTEIN (R)
Investment Research and Management
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND, INC.
> ALLIANCEBERNSTEIN SMALL CAP GROWTH PORTFOLIO
JUNE 30, 2005
SEMI-ANNUAL REPORT
INVESTMENT PRODUCTS OFFERED
> ARE NOT FDIC INSURED
> MAY LOSE VALUE
> ARE NOT BANK GUARANTEED
YOU MAY OBTAIN A DESCRIPTION OF THE FUND'S PROXY VOTING POLICIES AND
PROCEDURES, AND INFORMATION REGARDING HOW THE FUND VOTED PROXIES RELATING TO
PORTFOLIO SECURITIES DURING THE MOST RECENT 12-MONTH PERIOD ENDED JUNE 30,
WITHOUT CHARGE. SIMPLY VISIT THE SECURITIES AND EXCHANGE COMMISSION'S (THE
"COMMISSION") WEB SITE AT WWW.SEC.GOV, OR CALL ALLIANCEBERNSTEIN AT (800)
227-4618.
THE FUND FILES ITS COMPLETE SCHEDULE OF PORTFOLIO HOLDINGS WITH THE COMMISSION
FOR THE FIRST AND THIRD QUARTERS OF EACH FISCAL YEAR ON FORM N-Q. THE FUND'S
FORMS N-Q ARE AVAILABLE ON THE COMMISSION'S WEB SITE AT WWW.SEC.GOV. THE FUND'S
FORMS N-Q MAY ALSO BE REVIEWED AND COPIED AT THE COMMISSION'S PUBLIC REFERENCE
ROOM IN WASHINGTON, DC; INFORMATION ON THE OPERATION OF THE PUBLIC REFERENCE
ROOM MAY BE OBTAINED BY CALLING (800) SEC-0330.
SMALL CAP GROWTH PORTFOLIO
FUND EXPENSES
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including sales charges (loads) on purchase payments, contingent
deferred sales charges on redemptions and (2) ongoing costs, including
management fees; distribution (12b-1) fees; and other Fund expenses. This
example is intended to help you understand your ongoing costs (in dollars) of
investing in the Fund and to compare these costs with the ongoing costs of
investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of
the period and held for the entire period as indicated below.
ACTUAL EXPENSES
The first line of the table below provides information about actual account
values and actual expenses. You may use the information in this line, together
with the amount you invested, to estimate the expenses that you paid over the
period. Simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
in the first line under the heading entitled "Expenses Paid During Period" to
estimate the expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio and an assumed annual rate of return of 5% before expenses, which is not
the Fund's actual return. The hypothetical account values and expenses may not
be used to estimate the actual ending account balance or expenses you paid for
the period. You may use this information to compare the ongoing costs of
investing in the Fund and other funds by comparing this 5% hypothetical example
with the 5% hypothetical examples that appear in the shareholder reports of
other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads), or contingent deferred sales charges on redemptions.
Therefore, the second line of the table is useful in comparing ongoing costs
only, and will not help you determine the relative total costs of owning
different funds. In addition, if these transactional costs were included, your
costs would have been higher.
BEGINNING ENDING EXPENSES ANNUALIZED
SMALL CAP ACCOUNT VALUE ACCOUNT VALUE PAID DURING EXPENSE
GROWTH PORTFOLIO JANUARY 1, 2005 JUNE 30, 2005 PERIOD* RATIO*
- ------------------------------------------------------------------------------
CLASS A
Actual $1,000 $ 957.08 $5.63 1.16%
Hypothetical
(5% return
before expenses) $1,000 $1,019.04 $5.81 1.16%
CLASS B
Actual $1,000 $ 955.76 $6.84 1.41%
Hypothetical
(5% return
before expenses) $1,000 $1,017.80 $7.05 1.41%
* EXPENSES ARE EQUAL TO EACH CLASSES' ANNUALIZED EXPENSE RATIOS, MULTIPLIED BY
THE AVERAGE ACCOUNT VALUE OVER THE PERIOD, MULTIPLIED BY THE NUMBER OF DAYS IN
THE MOST RECENT FISCAL HALF-YEAR/365 (TO REFLECT THE ONE-HALF YEAR PERIOD).
1
SMALL CAP GROWTH PORTFOLIO
TEN LARGEST HOLDINGS
June 30, 2005 (unaudited)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
PERCENT OF
COMPANY U.S. $ VALUE NET ASSETS
- -------------------------------------------------------------------------------
Resources Connection, Inc. $ 1,393,800 1.9%
Euronet Worldwide, Inc. 1,305,243 1.8
Anteon International Corp. 1,300,170 1.8
Digitas, Inc. 1,219,729 1.6
Laureate Education, Inc. 1,154,383 1.6
Insight Enterprises, Inc. 1,152,278 1.6
Micros Systems, Inc. 1,150,075 1.6
Amedisys, Inc. 1,143,858 1.5
Dick's Sporting Goods, Inc. 1,138,791 1.5
Quest Software, Inc. 1,123,112 1.5
- -------------------------------------------------------------------------------
$ 12,081,439 16.4%
SECTOR DIVERSIFICATION
June 30, 2005 (unaudited)
PERCENT OF
SECTOR U.S. $ VALUE NET ASSETS
- -------------------------------------------------------------------------------
Consumer Services $ 19,714,920 26.7%
Technology 17,113,329 23.2
Healthcare 13,422,300 18.2
Energy 7,324,229 9.9
Capital Goods 4,969,506 6.7
Finance 4,071,771 5.5
Basic Industry 2,464,845 3.3
Transportation 2,402,159 3.3
Consumer Staples 707,542 1.0
Multi-Industry Companies 159,432 0.2
Total Investments 72,350,033 98.0
Cash and receivables, net of liabilities 1,454,286 2.0
Net Assets $ 73,804,319 100.0%
Please Note: The sector classifications presented herein are based on the
sector categorization methodology of the Adviser.
2
SMALL CAP GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS
June 30, 2005 (unaudited)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
COMMON STOCKS-98.0%
CONSUMER SERVICES-26.7%
ADVERTISING-1.7%
Digitas, Inc. (a) 106,900 $ 1,219,729
APPAREL-1.4%
Carter's, Inc. (a) 18,200 1,062,516
BROADCASTING & CABLE-1.6%
Cumulus Media, Inc. Cl.A (a) 27,682 326,094
Entravision Communications
Corp. Cl.A (a) 105,000 817,950
------------
1,144,044
CELLULAR COMMUNICATIONS-0.2%
NeuStar, Inc. Cl.A (a) 6,300 161,280
ENTERTAINMENT/LEISURE-2.2%
Activision, Inc. (a) 55,033 909,145
Sunterra Corp. (a) 46,200 748,902
------------
1,658,047
RETAIL - GENERAL MERCHANDISE-2.8%
Dick's Sporting Goods, Inc. (a) 29,510 1,138,791
MarineMax, Inc. (a) 24,000 750,000
Too, Inc. (a) 6,700 156,579
------------
2,045,370
MISCELLANEOUS-16.8%
Bright Horizons Family
Solutions, Inc. (a) 22,800 928,416
CRA International, Inc. (a) 13,900 748,515
Dycom Industries, Inc. (a) 27,500 544,775
Hughes Supply, Inc. 24,500 688,450
Huron Consulting Group, Inc. (a) 29,447 693,477
Insight Enterprises, Inc. (a) 57,100 1,152,278
Laureate Education, Inc. (a) 24,120 1,154,383
Life Time Fitness, Inc. (a) 26,600 872,746
MSC Industrial Direct Co., Inc. Cl.A 26,200 884,250
Nautilus, Inc. 17,600 501,600
Niku Corp. (a) 34,600 717,258
Nutri/System, Inc. (a) 36,600 540,216
Resources Connection, Inc. (a) 60,000 1,393,800
Scansource, Inc. (a) 12,540 538,468
Strayer Education, Inc. 6,500 560,690
ZipRealty, Inc. (a) 39,300 504,612
------------
12,423,934
------------
19,714,920
TECHNOLOGY-23.2%
COMMUNICATION SERVICES-0.9%
InPhonic, Inc. (a) 23,400 359,892
Syniverse Holdings, Inc. (a) 19,300 270,200
------------
630,092
COMPUTER SERVICES-6.9%
Alliance Data Systems Corp. (a) 15,600 632,736
Anteon International Corp. (a) 28,500 1,300,170
Euronet Worldwide, Inc. (a) 44,900 1,305,243
Kanbay International, Inc. (a) 36,200 836,582
Ness Technologies, Inc. (a) 40,300 427,986
Sapient Corp. (a) 78,100 619,333
------------
5,122,050
CONTRACT MANUFACTURING-0.6%
Semtech Corp. (a) 28,000 466,200
INTERNET INFRASTRUCTURE-0.3%
RightNow Technologies, Inc. (a) 19,000 228,380
SEMI-CONDUCTOR CAPITAL EQUIPMENT-0.9%
FormFactor, Inc. (a) 25,400 671,068
SEMI-CONDUCTOR COMPONENTS-3.2%
ATMI, Inc. (a) 27,800 806,478
Intergrated Device Technologies,
Inc. (a) 45,500 489,125
Microsemi Corp. (a) 56,100 1,054,680
------------
2,350,283
SOFTWARE-5.8%
Audible, Inc. (a) 40,300 700,011
Bottomline Technologies, Inc. (a) 31,300 468,561
Informatica Corp. (a) 43,200 362,448
Lipman Electronic Engineering Ltd.
(Israel) 10,300 316,931
Macromedia, Inc. (a) 28,900 1,104,558
Quest Software, Inc. (a) 82,400 1,123,112
VeriFone Holdings, Inc. (a) 11,800 191,750
------------
4,267,371
MISCELLANEOUS-4.6%
Amphenol Corp. Cl.A 17,250 692,932
Exar Corp. (a) 25,200 375,228
Micros Sytems, Inc. (a) 25,700 1,150,075
TTM Technologies, Inc. (a) 37,000 281,570
Wind River Systems, Inc. (a) 56,000 878,080
------------
3,377,885
------------
17,113,329
3
SMALL CAP GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS
(continued)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
HEALTHCARE-18.2%
BIOTECHNOLOGY-4.4%
MGI Pharma, Inc. (a) 31,700 $ 689,792
Neopharm, Inc. (a) 56,800 567,432
Protein Design Labs, Inc. (a) 45,900 927,639
Serologicals Corp. (a) 31,120 661,300
Telik, Inc. (a) 24,800 403,248
------------
3,249,411
MEDICAL PRODUCTS-6.2%
Abaxis, Inc. (a) 32,800 356,864
Angiotech Pharmaceuticals, Inc. (a)
(Canada) 30,100 417,186
Animas Corp. (a) 37,100 747,565
ArthroCare Corp. (a) 28,400 992,296
Immucor, Inc. (a) 19,300 558,735
OraSure Technologies, Inc. (a) 71,000 709,290
Ventana Medical Systems, Inc. (a) 9,900 398,277
Vnus Medical Technologies (a) 30,200 363,306
------------
4,543,519
MEDICAL SERVICES-7.4%
Amedisys, Inc. (a) 31,100 1,143,858
Labone, Inc. (a) 25,660 1,021,525
Orchid Cellmark, Inc. (a) 33,100 357,811
SFBC International, Inc. (a) 25,300 977,339
Stericycle, Inc. (a) 18,200 915,824
United Surgical Partners
International, Inc. (a) 13,500 703,080
WellCare Health Plans, Inc. (a) 10,300 365,753
------------
5,485,190
MISCELLANEOUS-0.2%
IRIS International, Inc. (a) 8,100 144,180
------------
13,422,300
ENERGY-9.9%
OIL SERVICE-8.9%
Bill Barrett Corp. (a) 21,000 621,180
Cimarex Energy Co. (a) 9,200 357,972
Core Laboratories NV (a) 30,484 817,581
Dril-Quip, Inc. (a) 12,700 368,427
FMC Technologies, Inc. (a) 25,900 828,023
Gulf Island Fabrication, Inc. 2,300 45,724
Helmerich & Payne, Inc. 16,700 783,564
Range Resources Corp. 31,100 836,590
Spinnaker Exploration Co. (a) 17,800 631,722
W-H Energy Services, Inc. (a) 32,400 807,732
Whiting Petroleum Corp. (a) 13,400 486,554
------------
6,585,069
PIPELINES-1.0%
Hydril Co. (a) 13,600 739,160
------------
7,324,229
CAPITAL GOODS-6.7%
ELECTRICAL EQUIPMENT-2.0%
Engineered Support Systems, Inc. 19,187 687,470
Essex Corp. (a) 34,300 784,784
------------
1,472,254
MACHINERY-2.7%
Actuant Corp. Cl.A (a) 14,300 685,542
Commercial Vehicle Group, Inc. (a) 31,400 557,350
Oskosh Truck Corp. 9,300 728,004
------------
1,970,896
MISCELLANEOUS-2.0%
IDEX Corp. 22,600 872,586
Simpson Manufacturing Co., Inc. 21,400 653,770
------------
1,526,356
------------
4,969,506
FINANCE-5.5%
BANKING - MONEY CENTER-0.6%
Community Bancorp (a) 14,300 443,586
BROKERAGE & MONEY MANAGEMENT-2.9%
Affiliated Managers Group, Inc. (a) 10,700 731,131
Greenhill & Co., Inc. 21,600 875,016
OptionsXpress Holdings, Inc. 32,700 497,040
------------
2,103,187
INSURANCE-0.8%
Primus Guaranty Ltd.
(Bermuda) (a) 42,330 612,938
MISCELLANEOUS-1.2%
Morningstar, Inc. (a) 32,400 912,060
------------
4,071,771
BASIC INDUSTRY-3.3%
CHEMICALS-2.3%
Georgia Gulf Corp. 22,700 704,835
Hexcel Corp. (a) 58,700 993,204
------------
1,698,039
MINING & METALS-1.0%
Allegheny Technologies, Inc. 34,760 766,806
------------
2,464,845
4
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
TRANSPORTATION-3.3%
AIR FREIGHT-1.2%
UTI Worldwide, Inc.
(U.S. Virgin Islands) 12,700 $ 884,174
SHIPPING-1.1%
Kirby Corp. (a) 17,600 793,760
TRUCKING-1.0%
Werner Enterprises, Inc. 36,875 724,225
------------
2,402,159
CONSUMER STAPLES-1.0%
HOUSEHOLD PRODUCTS-1.0%
Tempur-Pedic International, Inc. (a) 31,900 707,542
MULTI-INDUSTRY COMPANIES-0.2%
Chemed Corp. 3,900 159,432
Total Common Stocks
(cost $57,942,158) 72,350,033
TOTAL INVESTMENTS-98.0%
(cost $57,942,158) 72,350,033
Other assets less liabilities-2.0% 1,454,286
NET ASSETS-100% $ 73,804,319
(a) Non-income producing security.
See Notes to Financial Statements.
5
SMALL CAP GROWTH PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2005 (unaudited)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $57,942,158) $ 72,350,033
Cash 962,981
Receivable for capital stock sold 1,132,909
Receivable for investment securities sold 829,595
Dividends receivable 5,398
Total assets 75,280,916
LIABILITIES
Payable for investment securities purchased 1,296,438
Advisory fee payable 44,466
Distribution fee payable 3,973
Payable for capital stock redeemed 1,457
Administrative fee payable 1,215
Transfer agent fee payable 59
Accrued expenses 128,989
Total liabilities 1,476,597
NET ASSETS $ 73,804,319
COMPOSITION OF NET ASSETS
Capital stock, at par $ 6,638
Additional paid-in capital 128,123,538
Accumulated net investment loss (378,676)
Accumulated net realized loss on investment transactions (68,355,056)
Net unrealized appreciation of investments 14,407,875
$ 73,804,319
CLASS A SHARES
Net assets $ 53,858,714
Shares of capital stock outstanding 4,828,286
Net asset value per share $ 11.15
CLASS B SHARES
Net assets $ 19,945,605
Shares of capital stock outstanding 1,810,122
Net asset value per share $ 11.02
See Notes to Financial Statements.
6
SMALL CAP GROWTH PORTFOLIO
STATEMENT OF OPERATIONS
Six Months Ended June 30, 2005 (unaudited)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
INVESTMENT INCOME
Dividends (net of foreign taxes withheld of $708) $ 69,763
Interest 5,828
Total investment income 75,591
EXPENSES
Advisory fee 278,389
Distribution fee--Class B 25,083
Custodian 75,932
Administrative 36,250
Audit 20,730
Printing 10,030
Legal 1,662
Directors' fees 496
Transfer agency 403
Miscellaneous 5,292
Total expenses 454,267
Net investment loss (378,676)
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENT TRANSACTIONS
Net realized gain on investment transactions 1,702,715
Net change in unrealized appreciation/
depreciation of investments (5,268,998)
Net loss on investment transactions (3,566,283)
NET DECREASE IN NET ASSETS FROM OPERATIONS $ (3,944,959)
See Notes to Financial Statements.
7
SMALL CAP GROWTH PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 2005 DECEMBER 31,
(UNAUDITED) 2004
--------------- ------------
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment loss $ (378,676) $ (781,074)
Net realized gain on investment transactions 1,702,715 10,953,121
Net change in unrealized appreciation/
depreciation of investments (5,268,998) 550,533
Net increase (decrease) in net
assets from operations (3,944,959) 10,722,580
CAPITAL STOCK TRANSACTIONS
Net decrease (8,359,847) (1,538,906)
Total increase (decrease) (12,304,806) 9,183,674
NET ASSETS
Beginning of period 86,109,125 76,925,451
End of period (including accumulated
net investment loss of ($378,676) and
$0, respectively) $ 73,804,319 $ 86,109,125
See Notes to Financial Statements.
8
SMALL CAP GROWTH PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
June 30, 2005 (unaudited)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
NOTE A: SIGNIFICANT ACCOUNTING POLICIES
The AllianceBernstein Small Cap Growth Portfolio (the "Portfolio") is a series
of AllianceBernstein Variable Products Series Fund, Inc. (the "Fund"). The
Portfolio's investment objective is to seek growth of capital by pursuing
aggressive investment policies. 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 offers twenty-three
separately managed pools of assets which have differing investment objectives
and policies. The Portfolio 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.
The Portfolio 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
the Portfolio's net asset value per share.
The financial statements have been prepared in conformity with U.S. generally
accepted accounting principles, which require management to make certain
estimates and assumptions that affect the reported amounts of assets and
liabilities in the financial statements and amounts of income and expenses
during the reporting period. Actual results could differ from those estimates.
Additional information about some of the items discussed in these Notes to
Financial Statements is contained in the Fund's Statement of Additional
Information, which is available upon request. The following is a summary of
significant accounting policies followed by the Portfolio.
1. SECURITY VALUATION
Portfolio securities are valued at their current market value determined on the
basis of market quotations or, if market quotations are not readily available
or are deemed unreliable, at "fair value" as determined in accordance with
procedures established by and under the general supervision of the Fund's Board
of Directors.
In general, the market value of securities which are readily available and
deemed reliable are determined as follows. Securities listed on a national
securities exchange or on a foreign securities exchange are valued at the last
sale price at the close of the exchange or foreign securities exchange. If
there has been no sale on such day, the securities are valued at the mean of
the closing bid and asked prices on such day. Securities listed on more than
one exchange are valued by reference to the principal exchange on which the
securities are traded; securities not listed on an exchange but traded on The
NASDAQ Stock Market, Inc. ("NASDAQ") are valued in accordance with the NASDAQ
Official Closing Price; listed put or call options are valued at the last sale
price. If there has been no sale on that day, such securities will be valued at
the closing bid prices on that day; open futures contracts and options thereon
are valued using the closing settlement price or, in the absence of such a
price, the most recent quoted bid price. If there are no quotations available
for the day of valuation, the last available closing settlement price is used;
securities traded in the over-the-counter market, ("OTC") (but excluding
securities traded on NASDAQ) are valued at the mean of the current bid and
asked prices as reported by the National Quotation Bureau or other comparable
sources; U.S. Government securities and other debt instruments having 60 days
or less remaining until maturity are valued at amortized cost if their original
maturity was 60 days or less; or by amortizing their fair value as of the 61st
day prior to maturity if their original term to maturity exceeded 60 days;
fixed-income securities, including mortgage backed and asset backed securities,
may be valued on the basis of prices provided by a pricing service or at a
price obtained from one or more of the major broker/dealers. In cases where
broker/dealer quotes are obtained, Alliance Capital Management, L.P. (the
"Adviser") may establish procedures whereby changes in market yields or spreads
are used to adjust, on a daily basis, a recently obtained quoted price on a
security; and OTC and other derivatives are valued on the basis of a quoted bid
price or spread from a major broker/dealer in such security.
Securities for which market quotations are not readily available (including
restricted securities) or are deemed unreliable are valued at fair value.
Factors considered in making this determination may include, but are not
limited to, information obtained by contacting the issuer, analysts, analysis
of the issuer's financial statements or other available documents. In addition,
the Fund may use fair value pricing for securities primarily traded in non-U.S.
markets because, most foreign markets close well before the Fund values its
securities at 4:00 p.m., Eastern Time. The earlier close of these foreign
markets gives rise to the possibility that significant events, including broad
market moves, may have occurred in the interim and may materially affect the
value of those securities. To account for this, the Fund may frequently value
many of its foreign equity securities using fair value prices based on third
party vendor modeling tools to the extent available.
9
SMALL CAP GROWTH PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(continued)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
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 prices of such currencies against the U.S.
dollar. Purchases and sales of portfolio securities are translated into U.S.
dollars at the rates of exchange prevailing when such securities were acquired
or sold. Income and expenses are translated into U.S. dollars at rates of
exchange prevailing when accrued.
Net realized gain and loss on foreign currency transactions represents foreign
exchange gains and losses from sales and maturities of foreign fixed income
investments, foreign currency exchange contracts, holdings of foreign
currencies, currency gains or losses realized between the trade and settlement
dates on foreign investment transactions, and the difference between the
amounts of dividends, interest and foreign withholding taxes recorded on the
Portfolio's books and the U.S. dollar equivalent amounts actually received or
paid. Net unrealized 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 or depreciation of investments
and foreign currency denominated assets and liabilities.
3. TAXES
It is the policy of the Portfolio 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. The Portfolio may be subject to taxes imposed by countries in which
it invests. Such taxes are generally based on income and/or capital gains
earned or repatriated. Taxes are accrued and applied to net investment income,
net realized gains and net unrealized appreciation/depreciation as such income
and/or gains are earned.
4. INVESTMENT INCOME AND INVESTMENT TRANSACTIONS
Dividend income is recorded on the ex-dividend date or as soon as the Portfolio
is informed of the dividend. Interest income is accrued daily. Investment
transactions are accounted for on the trade date securities are purchased or
sold. Investment gains and losses are determined on the identified cost basis.
The Portfolio amortizes premiums and accretes discounts as adjustments to
interest income.
5. INCOME AND EXPENSES
Expenses attributable to a single portfolio are charged to that portfolio.
Expenses of the Fund are charged to each portfolio in proportion to net assets.
All income earned and expenses incurred by a portfolio with multi-class shares
outstanding are borne on a pro-rata basis by each outstanding class of shares,
based on the proportionate interest in the portfolio represented by the net
assets of such class, except that the portfolio's Class B shares bear the
distribution fees.
6. DIVIDENDS AND DISTRIBUTIONS
The Portfolio declares and distributes dividends and distributions from net
investment income and net realized gains, respectively, if any, at least
annually. 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 U.S. generally accepted accounting principles. 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
Until September 6, 2004, under the terms of an investment advisory agreement,
the Portfolio paid the Adviser an advisory fee at an annual rate of 1% of the
Portfolio's avarage daily net assets. Effective September 7, 2004, the terms of
the investment advisory agreement were amended so that the advisory fee was
reduced to an annual rate of .75% of the first $2.5 billion, .65% of the next
$2.5 billion and .60% in excess of $5 billion, of the Portfolio's average daily
net assets. The fee is accrued daily and paid monthly.
Effective January 1, 2004 through September 6, 2004, in contemplation of the
final agreement with the Office of New York Attorney General ("NYAG"), the
Adviser began waiving a portion of its advisory fee so as to charge the
Portfolio at
10
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
the reduced annual rate discussed above. For a more complete discussion of the
Adviser's settlement with the NYAG, please see "Legal Proceedings" below.
Pursuant to the advisory agreement, the Portfolio paid $36,250 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, 2005.
Brokerage commissions paid on investment transactions for the six months ended
June 30, 2005 amounted to $100,244, none of which was paid to Sanford C.
Bernstein &Co. LLC and Sanford C. Bernstein Limited, affiliates of the Adviser.
The Portfolio compensates Alliance Global Investor Services, Inc., a
wholly-owned subsidiary of the Adviser, under a Transfer Agency Agreement for
providing personnel and facilities to perform transfer agency services for the
Portfolio. Such compensation amounted to $403 for the six months ended June 30,
2005.
NOTE C: DISTRIBUTION PLAN
The Portfolio has adopted a Distribution Plan (the "Plan") for Class B shares
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the
Plan, the Portfolio pays distribution and servicing fees to AllianceBernstein
Investment Research and Management, Inc. (the "Distributor"), a wholly-owned
subsidiary of the Adviser, at an annual rate of up to .50% of the 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 limits
payments under the Plan to .25% of the Portfolio's average daily net assets
attributable to Class B shares. The Plan provides that the Distributor will use
such payments in their entirety for distribution assistance and promotional
activities.
The Portfolio is not obligated under the Plan to pay any distribution and
servicing fees in excess of the amounts set forth above. The purpose of the
payments to the Distributor under the Plan is to compensate the Distributor for
its distribution services with respect to the sale of the Portfolio's Class B
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 Plan is
characterized by the staff of the Securities and Exchange Commission as being
of the "compensation" variety.
In the event that the Plan is terminated or not continued, no distribution and
servicing fees (other than current amounts accrued but not yet paid) would be
owed by the Portfolio to the Distributor.
The Plan also provides that the Adviser may use its own resources to finance
the distribution of the Portfolio's shares.
NOTE D: INVESTMENT TRANSACTIONS
Purchases and sales of investment securities (excluding short-term investments)
for the six months ended June 30, 2005, were as follows:
PURCHASES SALES
------------ -----------
Investment securities
(excluding U.S. government securities) $27,333,545 $36,485,877
U.S. government securities -0- -0-
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 $ 16,327,735
Gross unrealized depreciation (1,919,860)
Net unrealized appreciation $ 14,407,875
1. FORWARD EXCHANGE CURRENCY CONTRACTS
The Portfolio may enter into forward exchange currency contracts in order to
hedge its exposure to changes in foreign currency exchange rates on its 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 on a future date at a negotiated forward rate. The gain or loss
arising from the difference between the original contract and the closing of
such contract would be included in net realized gain or loss on foreign
currency transactions.
11
SMALL CAP GROWTH PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(continued)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
Fluctuations in the value of open forward exchange currency contracts are
recorded for financial reporting purposes as unrealized appreciation and
depreciation by the Portfolio.
The Portfolio's custodian will place and maintain cash not available for
investment or other liquid assets in a separate account of the Portfolio having
a value at least equal to the aggregate amount of the 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 the Portfolio has in that particular
currency contract.
2. OPTION TRANSACTIONS
For hedging and investment purposes, the Portfolio may purchase and write
(sell) put and call options on U.S. and foreign government securities and
foreign currencies that are traded on U.S. and foreign 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 written options which
expire unexercised are recorded by the Portfolio on the expiration date as
realized gains from options written. 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. If a
put option is exercised, the premium received reduces the cost basis of the
security or currency purchased by the Portfolio. 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.
NOTE E: SECURITIES LENDING
The Portfolio has entered into a securities lending agreement with UBS Warburg
LLC (the "Lending Agent"). Under the terms of the agreement, the Lending Agent,
on behalf of the Portfolio, administers the lending of portfolio securities to
certain broker-dealers. In return, the Portfolio receives fee income from the
lending transactions or it retains a portion of interest on the investment of
any cash received as collateral. The Portfolio also continues to receive
dividends or interest on the securities loaned. Unrealized gain or loss in the
value of the securities loaned that may occur during the term of the loan will
be reflected in the accounts of the Portfolio. All loans are continuously
secured by collateral exceeding the value of the securities loaned. All
collateral consists of either cash or U.S. government securities. The Lending
Agent invests the cash collateral received in an eligible money market vehicle
in accordance with the investment restrictions of the Portfolio. The Lending
Agent will indemnify the Portfolio for any loss resulting from a borrower's
failure to return a loaned security when due. For the six months ended June 30,
2005, the Portfolio had no securities on loan.
12
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
NOTE F: CAPITAL STOCK
There are 1,000,000,000 shares of $.001 par value capital stock authorized,
divided into two classes, designated Class A and Class B shares. Each class
consists of 500,000,000 authorized shares. Transactions in capital stock were
as follows:
SHARES AMOUNT
--------------------------- ------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
JUNE 30, 2005 DECEMBER 31, JUNE 30, 2005 DECEMBER 31,
(UNAUDITED) 2004 (UNAUDITED) 2004
------------ ------------ -------------- --------------
CLASS A
Shares sold 235,895 802,498 $ 2,597,373 $ 8,496,602
Shares redeemed (698,286) (1,518,067) (7,626,866) (15,698,678)
Net decrease (462,391) (715,569) $ (5,029,493) $ (7,202,076)
CLASS B
Shares sold 180,214 975,376 $ 1,955,488 $ 10,075,709
Shares redeemed (490,989) (426,003) (5,285,842) (4,412,539)
Net increase
(decrease) (310,775) 549,373 $ 3,330,354) $ 5,663,170
NOTE G: RISKS INVOLVED IN INVESTING IN THE PORTFOLIO
Foreign Securities 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.
Indemnification Risk--In the ordinary course of business, the Portfolio enters
into contracts that contain a variety of indemnifications. The Portfolio's
maximum exposure under these arrangements is unknown. However, the Portfolio
has not had prior claims or losses pursuant to these indemnification provisions
and expects the risk of loss thereunder to be remote.
NOTE H: JOINT CREDIT FACILITY
A number of open-end mutual funds managed by the Adviser, including the
Portfolio, participate in a $500 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
Portfolio did not utilize the Facility during the six months ended June 30,
2005.
NOTE I: COMPONENTS OF ACCUMULATED EARNINGS (DEFICIT)
The tax character of distributions to be paid for the year ending December 31,
2005 will be determined at the end of the current fiscal year. As of December
31, 2004, the components of accumulated earnings/(deficit) on a tax basis were
as follows:
Accumulated capital and other losses $ (68,806,897)(a)
Unrealized appreciation/(depreciation) 18,425,999(b)
Total accumulated earnings/(deficit) $ (50,380,898)
(a) On December 31, 2004, the Portfolio had a net capital loss carrryforward
of $68,806,897 of which $213,259 expires in the year 2008, $23,270,400 expires
in the year 2009, and $45,323,238 expires in the year 2010. To the extent
future capital gains are offset by capital loss carryforwards, such gains will
not be distributed. Based on certain provisions in the Internal Revenue Code,
various limitations regarding the future utilization of these carryforwards,
brought forward as a result of the Portfolio's merger with Brinson Series Trust
Small Cap Growth Portfolio, may apply. During the fiscal year, the Portfolio
utilized capital loss carryforwards of $9,699,895.
(b) The difference between book-basis and tax-basis unrealized
appreciation/(depreciation) is attributable primarily to the tax deferral of
losses on wash sales.
13
SMALL CAP GROWTH PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(continued)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
NOTE J: LEGAL PROCEEDINGS
As has been previously reported, the staff of the U.S. Securities and Exchange
Commission ("SEC") and the NYAG have been investigating practices in the mutual
fund industry identified as "market timing" and "late trading" of mutual fund
shares. Certain other regulatory authorities have also been conducting
investigations into these practices within the industry and have requested that
the Adviser provide information to them. The Adviser has been cooperating and
will continue to cooperate with all of these authorities.
On December 18, 2003, the Adviser confirmed that it had reached terms with the
SEC and the NYAG for the resolution of regulatory claims relating to the
practice of "market timing" mutual fund shares in some of the AllianceBernstein
Mutual Funds. The agreement with the SEC is reflected in an Order of the
Commission ("SEC Order"). The agreement with the NYAG is memorialized in an
Assurrance of Discontinuance dated September 1, 2004 ("NYAG Order"). Among the
key provisions of these agreements are the following:
(i) The Adviser agreed to establish a $250 million fund (the
"Reimbursement Fund") to compensate mutual fund shareholders for the adverse
effects of market timing attributable to market timing relationships described
in the SEC Order. According to the SEC Order, the Reimbursement Fund is to be
paid, in order of priority, to fund investors based on (i) their aliquot share
of losses suffered by the fund due to market timing, and (ii) a proportionate
share of advisory fees paid by such fund during the period of such market
timing;
(ii) The Adviser agreed to reduce the advisory fees it receives from
some of the AllianceBernstein long-term, open-end retail funds until December
31, 2008; and
(iii) The Adviser agreed to implement changes to its governance and
compliance procedures. Additionally, the SEC Order and the NYAG Order
contemplate that the Adviser's registered investment company clients, including
the Fund, will introduce governance and compliance changes.
In anticipation of final, definitive documentation of the NYAG Order and
effective January 1, 2004, the Adviser began waiving a portion of its advisory
fee. On September 7, 2004, the Fund's investment advisory agreement was amended
to reflect the reduced advisory fee. For more information on this waiver and
amendment to the Fund's investment advisory agreement, please see "Advisory Fee
and Other Transactions with Affiliates" above.
A special committee of the Adviser's Board of Directors, comprised of the
members of the Adviser's Audit Committee and the other independent member of
the Adviser's Board, is continuing to direct and oversee an internal
investigation and a comprehensive review of the facts and circumstances
relevant to the SEC's and the NYAG's investigations.
In addition, the Independent Directors of the Fund ("the Independent
Directors") have initiated an investigation of the above-mentioned matters with
the advice of an independent economic consultant and independent counsel. The
Independent Directors have formed a special committee to supervise the
investigation.
On October 2, 2003, a putative class action complaint entitled HINDO ET AL. V.
ALLIANCEBERNSTEIN GROWTH & INCOME FUND ET AL. (the "Hindo Complaint") was filed
against the Adviser; Alliance Capital Management Holding L.P.; Alliance Capital
Management Corporation; AXA Financial, Inc.; certain of the AllianceBernstein
Mutual Funds, including the Fund; Gerald Malone; Charles Schaffran
(collectively, the "Alliance Capital defendants"); and certain other defendants
not affiliated with the Adviser. The Hindo Complaint was filed in the United
States District Court for the Southern District of New York by alleged
shareholders of two of the AllianceBernstein Mutual Funds. The Hindo Complaint
alleges that certain of the Alliance Capital defendants failed to disclose that
they improperly allowed certain hedge funds and other unidentified parties to
engage in late trading and market timing of AllianceBernstein Fund securities,
violating Sections 11 and 15 of the Securities Act, Sections 10(b) and 20(a) of
the Exchange Act, and Sections 206 and 215 of the Advisers Act. Plaintiffs seek
an unspecified amount of compensatory damages and rescission of their contracts
with the Adviser, including recovery of all fees paid to the Adviser pursuant
to such contracts.
Since October 2, 2003, numerous additional lawsuits making factual allegations
similar to those in the Hindo Complaint were filed against the Adviser and
certain other defendants, some of which name the Fund as a defendant. All of
these lawsuits seek an unspecified amount of damages. The lawsuits are now
pending in the United States District Court for the District of Maryland
pursuant to a ruling by the Judicial Panel on Multidistrict Litigation
transferring and centralizing all of the mutual fund cases involving market and
late trading in the District of Maryland.
14
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
As a result of the matters discussed above, investors in the AllianceBernstein
Mutual Funds may choose to redeem their investments. This may require the
AllianceBernstein Mutual Funds to sell investments held by those funds to
provide for sufficient liquidity and could also have an adverse effect on the
investment performance of the AllianceBernstein Mutual Funds.
The Adviser and approximately twelve other investment management firms were
publicly mentioned in connection with the settlement by the SEC of charges that
an unaffiliated broker/dealer violated federal securities laws relating to its
receipt of compensation for selling specific mutual funds and the disclosure of
such compensation. The SEC indicated publicly that, among other things, it was
considering enforcement action in connection with mutual funds' disclosure of
such arrangements and in connection with the practice of considering mutual
fund sales in the direction of brokerage commissions from fund portfolio
transactions. The SEC issued subpoenas to the Adviser, and the NASD issued
requests for information in connection with this matter and the Adviser
provided documents and other information to the SEC and NASD and cooperated
fully with the investigations. On June 8, 2005 the NASD announced that it had
reached a settlement with the Distributor in connection with this matter.
Management of the Adviser expects that the settlement has resolved both
regulatory inquiries described above.
On June 22, 2004, a purported class action complaint entitled AUCOIN, ET AL. V.
ALLIANCE CAPITAL MANAGEMENT L.P., ET AL. ("Aucoin Complaint") was filed against
the Adviser, Alliance Capital Management Holding L.P., Alliance Capital
Management Corporation, AXA Financial, Inc., AllianceBernstein Investment
Research & Management, Inc., certain current and former directors of the
AllianceBernstein Mutual Funds, and unnamed Doe defendants. The Aucoin
Complaint names certain of the AllianceBernstein mutual funds as nominal
defendants. The Aucoin Complaint was filed in the United States District Court
for the Southern District of New York by an alleged shareholder of an
AllianceBernstein mutual fund. The Aucoin Complaint alleges, among other
things, (i) that certain of the defendants improperly authorized the payment of
excessive commissions and other fees from fund assets to broker-dealers in
exchange for preferential marketing services, (ii) that certain of the
defendants misrepresented and omitted from registration statements and other
reports material facts concerning such payments, and (iii) that certain
defendants caused such conduct as control persons of other defendants. The
Aucoin Complaint asserts claims for violation of Sections 34(b), 36(b) and
48(a) of the Investment Company Act, Sections 206 and 215 of the Advisers Act,
breach of common law fiduciary duties, and aiding and abetting breaches of
common law fiduciary duties. Plaintiffs seek an unspecified amount of
compensatory damages and punitive damages, rescission of their contracts with
the Adviser, including recovery of all fees paid to the Adviser pursuant to
such contracts, an accounting of all fund-related fees, commissions and soft
dollar payments, and restitution of all unlawfully or discriminatorily obtained
fees and expenses.
Since June 22, 2004, numerous additional lawsuits making factual allegations
substantially similar to those in the Aucoin Complaint were filed against the
Adviser and certain other defendants, and others may be filed.
It is possible that these matters and/or other developments resulting from
these matters could result in increased redemptions of the Fund's shares or
other adverse consequences to the Fund. However, the Adviser believes that
these matters are not likely to have a material adverse effect on its ability
to perform advisory services relating to the Fund.
15
SMALL CAP GROWTH PORTFOLIO
FINANCIAL HIGHLIGHTS
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
CLASS A
---------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 2005 -------------------------------------------------------------
(UNAUDITED) 2004 2003 2002 2001 2000
----------- ----------- ----------- ----------- ----------- -----------
Net asset value, beginning of period $11.65 $10.17 $6.83 $10.01 $11.84 $13.00
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (a) (.05) (.10)(b) (.09) (.07)(b) (.07)(b) (.06)(b)
Net realized and unrealized gain (loss)
on investment transactions (.45) 1.58 3.43 (3.11) (1.41) (.71)
Net increase (decrease) in net asset
value from operations (.50) 1.48 3.34 (3.18) (1.48) (.77)
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income -0- -0- -0- -0- -0- (.05)
Distributions from net realized gain
on investment transactions -0- -0- -0- -0- (.26) (.34)
Distributions in excess of net realized
gain on investment transactions -0- -0- -0- -0- (.09) -0-
Total dividends and distributions -0- -0- -0- -0- (.35) (.39)
Net asset value, end of period $11.15 $11.65 $10.17 $6.83 $10.01 $11.84
TOTAL RETURN
Total investment return based on
net asset value (c) (4.29)% 14.55% 48.90% (31.77)% (12.75)% (6.09)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $53,859 $61,661 $61,079 $86,093 $184,223 $232,239
Ratio to average net assets of:
Expenses, net of waivers and
reimbursements 1.16%(d) 1.14% 1.36% 1.11% .95% .95%
Expenses, before waivers and
reimbursements 1.16%(d) 1.30% 1.36% 1.25% 1.16% 1.14%
Net investment loss (.95)%(d) (.93)%(b) (1.10)% (.86)%(b) (.70)%(b) (.46)%(b)
Portfolio turnover rate 37% 92% 129% 111% 113% 178%
See footnote summary on page 17.
16
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
CLASS B
------------------------------------------------------------------------------
SIX MONTHS AUGUST 11,
ENDED YEAR ENDED DECEMBER 31, 2000(e) TO
JUNE 30, 2005 ------------------------------------------------- DECEMBER 31,
(UNAUDITED) 2004 2003 2002 2001 2000
----------- ----------- ----------- ----------- ----------- -----------
Net asset value, beginning of period $11.53 $10.08 $6.78 $9.98 $11.82 $13.00
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (a) (.06) (.12)(b) (.11) (.09)(b) (.09)(b) (.03)(b)
Net realized and unrealized gain (loss)
on investment transactions (.45) 1.57 3.41 (3.11) (1.40) (1.15)
Net increase (decrease) in net asset
value from operations (.51) 1.45 3.30 (3.20) (1.49) (1.18)
LESS: DISTRIBUTIONS
Distributions from net realized gain
on investment transactions -0- -0- -0- -0- (.26) -0-
Distributions in excess of net realized
gain on investment transactions -0- -0- -0- -0- (.09) -0-
Total distributions -0- -0- -0- -0- (.35) -0-
Net asset value, end of period $11.02 $11.53 $10.08 $6.78 $9.98 $11.82
TOTAL RETURN
Total investment return based on
net asset value (c) (4.42)% 14.39% 48.67% (32.06)% (12.86)% (8.16)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $19,945 $24,448 $15,846 $5,101 $6,835 $435
Ratio to average net assets of:
Expenses, net of waivers and
reimbursements 1.41%(d) 1.40% 1.61% 1.37% 1.20% 1.20%(d)
Expenses, before waivers and
reimbursements 1.41%(d) 1.56% 1.61% 1.51% 1.43% 1.41%(d)
Net investment loss (1.20)%(d) (1.19)%(b) (1.37)% (1.10)%(b) (.98)%(b) (.69)%(b)(d)
Portfolio turnover rate 37% 92% 129% 111% 113% 178%
(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 return does not reflect the
deduction of taxes that a shareholder would pay on Portfolio distributions or
the redemption of Portfolio shares. Total investment return calculated for a
period of less than one year is not annualized.
(d) Annualized.
(e) Commencement of distribution.
17
[LOGO] ALLIANCEBERNSTEIN (R)
Investment Research and Management
AllianceBernstein
Variable Products Series Fund, Inc.
Semi-Annual Report
June 30, 2005
> AllianceBernstein Global Technology Portfolio
SEMI-ANNUAL REPORT
INVESTMENT PRODUCTS OFFERED
> ARE NOT FDIC INSURED
> MAY LOSE VALUE
> ARE NOT BANK GUARANTEED
YOU MAY OBTAIN A DESCRIPTION OF THE FUND'S PROXY VOTING POLICIES AND
PROCEDURES, AND INFORMATION REGARDING HOW THE FUND VOTED PROXIES RELATING TO
PORTFOLIO SECURITIES DURING THE MOST RECENT 12-MONTH PERIOD ENDED JUNE 30,
WITHOUT CHARGE. SIMPLY VISIT THE SECURITIES AND EXCHANGE COMMISSION'S (THE
"COMMISSION") WEB SITE AT WWW.SEC.GOV, OR CALL ALLIANCEBERNSTEIN AT (800)
227-4618.
THE FUND FILES ITS COMPLETE SCHEDULE OF PORTFOLIO HOLDINGS WITH THE COMMISSION
FOR THE FIRST AND THIRD QUARTERS OF EACH FISCAL YEAR ON FORM N-Q. THE FUND'S
FORMS N-Q ARE AVAILABLE ON THE COMMISSION'S WEB SITE AT WWW.SEC.GOV. THE FUND'S
FORMS N-Q MAY ALSO BE REVIEWED AND COPIED AT THE COMMISSION'S PUBLIC REFERENCE
ROOM IN WASHINGTON, DC; INFORMATION ON THE OPERATION OF THE PUBLIC REFERENCE
ROOM MAY BE OBTAINED BY CALLING (800) SEC-0330.
GLOBAL TECHNOLOGY PORTFOLIO
FUND EXPENSES
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including sales charges (loads) on purchase payments, contingent
deferred sales charges on redemptions and (2) ongoing costs, including
management fees; distribution (12b-1) fees; and other Fund expenses. This
example is intended to help you understand your ongoing costs (in dollars) of
investing in the Fund and to compare these costs with the ongoing costs of
investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of
the period and held for the entire period as indicated below.
Actual Expenses
The first line of the table below provides information about actual account
values and actual expenses. You may use the information in this line, together
with the amount you invested, to estimate the expenses that you paid over the
period. Simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
in the first line under the heading entitled "Expenses Paid During Period" to
estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio and an assumed annual rate of return of 5% before expenses, which is not
the Fund's actual return. The hypothetical account values and expenses may not
be used to estimate the actual ending account balance or expenses you paid for
the period. You may use this information to compare the ongoing costs of
investing in the Fund and other funds by comparing this 5% hypothetical example
with the 5% hypothetical examples that appear in the shareholder reports of
other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads), or contingent deferred sales charges on redemptions.
Therefore, the second line of the table is useful in comparing ongoing costs
only, and will not help you determine the relative total costs of owning
different funds. In addition, if these transactional costs were included, your
costs would have been higher.
Beginning Ending
Account Value Account Value Expenses Paid Annualized
Global Technology Portfolio January 1, 2005 June 30, 2005 During Period* Expense Ratio*
- --------------------------- --------------- ------------- -------------- --------------
Class A
Actual $ 1,000 $ 944.34 $ 4.39 0.91%
Hypothetical (5% return before
expenses) $ 1,000 $ 1,020.28 $ 4.56 0.91%
Class B
Actual $ 1,000 $ 943.63 $ 5.59 1.16%
Hypothetical (5% return before
expenses) $ 1,000 $ 1,019.04 $ 5.81 1.16%
* Expenses are equal to each classes' annualized expense ratios, multiplied by
the average account value over the period, multiplied by the number of days in
the most recent fiscal half-year/365 (to reflect the one-half year period).
1
GLOBAL TECHNOLOGY PORTFOLIO
TEN LARGEST HOLDINGS
June 30, 2005 (unaudited)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
PERCENT OF
COMPANY U.S. $ VALUE NET ASSETS
- -------------------------------------------------------------------------------
Microsoft Corp. $ 13,480,667 5.6%
Juniper Networks, Inc. 11,752,764 4.9
HOYA Corp. (Japan) 10,052,622 4.2
Google, Inc. Cl.A 9,883,440 4.1
EMC Corp. 9,756,900 4.1
QUALCOMM, Inc. 9,473,870 4.0
Intel Corp. 9,024,578 3.8
Dell, Inc. 8,773,196 3.7
SAP AG (ADR) (Germany) 8,653,505 3.6
Marvell Technology Group Ltd. (Bermuda) 8,034,048 3.3
----------- ------
$ 98,885,590 41.3%
SECTOR DIVERSIFICATION
June 30, 2005 (unaudited)
_______________________________________________________________________________
PERCENT OF
SECTOR U.S. $ VALUE NET ASSETS
- -------------------------------------------------------------------------------
Technology $197,044,655 82.3%
Consumer Services 22,257,261 9.3
Utilities 6,134,369 2.6
Capital Goods 4,402,296 1.8
------------ ------
Total Investments* 229,838,581 96.0
Cash and receivables, net of liabilities 9,468,732 4.0
------------ ------
Net Assets $239,307,313 100.0%
* Excludes short-term investments.
Please Note: The sector classifications presented herein are based on the
sector categorization methodology of the Adviser.
2
GLOBAL TECHNOLOGY PORTFOLIO
PORTFOLIO OF INVESTMENTS
June 30, 2005 (unaudited)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
Company Shares U.S. $ Value
- -------------------------------------------------------------------------------
COMMON STOCKS & OTHER INVESTMENTS-96.0%
TECHNOLOGY-82.3%
COMMUNICATION EQUIPMENT-12.6%
Cisco Systems, Inc. (a) 132,400 $ 2,530,164
Corning, Inc. (a) 127,300 2,115,726
Juniper Networks, Inc. (a) 466,750 11,752,764
Nokia Oyj (Finland) 143,082 2,380,759
QUALCOMM, Inc. 287,000 9,473,870
ZTE Corp. (People's Republic of China) 613,400 1,829,144
------------
30,082,427
COMPUTER HARDWARE/STORAGE/PERIPHERALS-13.6%
Apple Computer, Inc. (a) 127,400 4,689,594
Dell, Inc. (a) 222,050 8,773,196
EMC Corp. (a) 711,663 9,756,900
International Business
Machines Corp. (IBM) 48,200 3,576,440
Network Appliance, Inc. (a) 207,200 5,857,544
------------
32,653,674
COMPUTER SERVICES-5.8%
Alliance Data Systems Corp. (a) 68,200 2,766,192
Fiserv, Inc. (a) 135,225 5,807,914
Infosys Technologies Ltd. (ADR) (India) 67,700 5,244,719
------------
13,818,825
CONTRACT MANUFACTURING-1.1%
Hon Hai (Salomon Smith
Barney) warrants expiring
1/17/07 (Taiwan) (a) 499,288 2,594,800
ELECTRONIC COMPONENTS-2.0%
AU Optronics Corp. (ADR) (Taiwan) 100,500 1,702,470
LG. Philips LCD Co., Ltd.
(ADR) (South Korea) (a) 130,700 2,987,802
------------
4,690,272
INTERNET-8.1%
Fastweb (Italy) (a) 36,300 1,565,282
Google, Inc. Cl.A (a) 33,600 9,883,440
VeriSign, Inc. (a) 51,600 1,484,016
Yahoo!, Inc. (a) 188,000 6,514,200
------------
19,446,938
SEMI-CONDUCTOR CAPITAL EQUIPMENT-1.0%
FormFactor, Inc. (a) 23,300 615,586
KLA-Tencor Corp. (a) 41,800 1,826,660
------------
2,442,246
SEMI-CONDUCTOR COMPONENTS-15.0%
Broadcom Corp. Cl.A (a) 130,900 4,648,259
Intel Corp. 346,300 9,024,578
Linear Technology Corp. 78,100 2,865,489
Marvell Technology Group Ltd. (Bermuda) (a) 211,200 8,034,048
Powerchip Semiconductor Corp. (Taiwan) 1,773,000 1,235,662
Samsung Electronics Co., Ltd.
(GDR) (South Korea) (b) 13,418 3,206,817
Taiwan Semiconductor
Manufacturing Co., Ltd.
(ADR) (Taiwan) 327,837 2,989,877
United Microelectronics Corp.
(ADR) (Taiwan) (a) 979,900 4,027,389
------------
36,032,119
SOFTWARE-17.0%
Amdocs Ltd. (Israel) (a) 86,900 2,296,767
McAfee, Inc. (a) 104,000 2,722,720
Mercury Interactive Corp. (a) 67,800 2,600,808
Microsoft Corp. 542,700 13,480,667
NAVTEQ Corp. (a) 37,100 1,379,378
Oracle Corp. (a) 569,650 7,519,380
SAP AG (ADR) (Germany) 199,850 8,653,505
Symantec Corp. (a) 88,700 1,928,338
------------
40,581,563
MISCELLANEOUS-6.1%
Canon, Inc. (Japan) 88,700 4,649,169
HOYA Corp. (Japan) 87,500 10,052,622
------------
14,701,791
------------
197,044,655
CONSUMER SERVICES-9.3%
BROADCASTING & CABLE-4.1%
News Corp. Cl.A (a) 153,100 2,477,158
Time Warner, Inc. (a) 274,600 4,588,566
XM Satellite Radio Holdings, Inc. (a) 78,700 2,649,042
------------
9,714,766
3
GLOBAL TECHNOLOGY PORTFOLIO
PORTFOLIO OF INVESTMENTS
(continued)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
Company Shares U.S. $ Value
- -------------------------------------------------------------------------------
CELLULAR COMMUNICATIONS-4.4%
02 PLC (United Kingdom) 737,760 $ 1,801,011
America Movil, S.A. de C.V.
Series L (ADR) (Mexico) 92,200 5,496,042
Nextel Communications, Inc. Cl.A (a) 63,700 2,058,147
Vodafone Group Plc (ADR) (United Kingdom) 48,683 1,183,971
------------
10,539,171
TELECOMMUNICATION SERVICES-0.8%
InPhonic, Inc. (a) 95,800 1,473,404
NeuStar, Inc. Cl.A (a) 20,700 529,920
------------
2,003,324
------------
22,257,261
UTILITIES-2.6%
TELEPHONE UTILITY-2.6%
China Telecom Corp., Ltd.
(People's Republic of
China) 3,400,000 1,214,220
Sprint Corp. 196,100 4,920,149
------------
6,134,369
Shares or
Principal
Amount
Company (000) U.S. $ Value
- -------------------------------------------------------------------------------
CAPITAL GOODS-1.8%
ELECTRICAL EQUIPMENT-0.3%
Funai Electric Co., Ltd. (Japan) 8,300 $ 846,831
MISCELLANEOUS-1.5%
NITTO DENKO Corp. (Japan) 62,400 3,555,465
------------
4,402,296
Total Common Stocks & Other Investments
(cost $194,609,025) 229,838,581
SHORT-TERM INVESTMENT-2.8%
TIME DEPOSIT-2.8%
The Bank of New York
2.063%, 7/01/05
(cost $6,701,000) $ 6,701 6,701,000
TOTAL INVESTMENTS-98.8%
(cost $201,310,025) 236,539,581
Other assets less liabilities-1.2% 2,767,732
NET ASSETS-100% $ 239,307,313
(a) Non-income producing security.
(b) Security is exempt from registration under Rule 144A of the Securities Act
of 1933. This security is considered liquid and may be resold in transactions
exempt from registration, normally to qualified institutional buyers. At June
30, 2005, the aggregate market value of this security amounted to $3,206,817 or
1.3% of net assets.
Glossary of Terms:
ADR - American Depositary Receipt
GDR - Global Depositary Receipt
See Notes to Financial Statements.
4
GLOBAL TECHNOLOGY PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2005 (unaudited)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $201,310,025) $ 236,539,581
Receivable for investment securities sold and foreign
currency contracts 3,590,236
Dividends and interest receivable 136,702
Receivable for capital stock sold 51,496
Total assets 240,318,015
LIABILITIES
Due to custodian 104,252
Payable for investment securities purchased 470,800
Advisory fee payable 151,376
Payable for capital stock redeemed 138,530
Distribution fee payable 29,590
Administrative fee payable 1,215
Transfer agent fee payable 55
Accrued expenses 114,884
Total liabilities 1,010,702
NET ASSETS $ 239,307,313
COMPOSITION OF NET ASSETS
Capital stock, at par $ 16,730
Additional paid-in capital 499,267,920
Accumulated net investment loss (571,162)
Accumulated net realized loss on investment and foreign
currency transactions (294,630,489)
Net unrealized appreciation of investments and foreign
currency denominated assets and liabilities 35,224,314
$ 239,307,313
Class A Shares
Net assets $ 99,261,965
Shares of capital stock outstanding 6,884,719
Net asset value per share $ 14.42
Class B Shares
Net assets $ 140,045,348
Shares of capital stock outstanding 9,844,845
Net asset value per share $ 14.23
See Notes to Financial Statements.
5
GLOBAL TECHNOLOGY PORTFOLIO
STATEMENT OF OPERATIONS
Six Months Ended June 30, 2005 (unaudited)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
INVESTMENT INCOME
Dividends (net of foreign taxes withheld of $52,510) $ 619,829
Interest 60,938
Total investment income 680,767
EXPENSES
Advisory fee 920,836
Distribution fee--Class B 179,630
Custodian 81,235
Printing 36,278
Administrative 36,250
Audit 20,730
Legal 5,602
Directors' fees 496
Transfer agency 403
Miscellaneous 20,252
Total expenses 1,301,712
Net investment loss (620,945)
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENT AND
FOREIGN CURRENCY TRANSACTIONS
Net realized gain (loss) on:
Investment transactions 18,130,214
Foreign currency transactions (96,584)
Net change in unrealized appreciation/depreciation of:
Investments (33,707,227)
Foreign currency denominated assets and liabilities (5,242)
Net loss on investment and foreign currency transactions (15,678,839)
NET DECREASE IN NET ASSETS FROM OPERATIONS $ (16,299,784)
See Notes to Financial Statements.
6
GLOBAL TECHNOLOGY PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
Six Months Ended Year Ended
June 30, 2005 December 31,
(unaudited) 2004
--------------- ---------------
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS
Net investment loss $ (620,945) $ (1,051,924)
Net realized gain on investment and
foreign currency transactions 18,033,630 23,383,403
Net change in unrealized
appreciation/depreciation of investments
and foreign currency denominated assets
and liabilities (33,712,469) (11,132,030)
Net increase (decrease) in net assets
from operations (16,299,784) 11,199,449
CAPITAL STOCK TRANSACTIONS
Net decrease (26,259,510) (46,778,798)
Total decrease (42,559,294) (35,579,349)
NET ASSETS
Beginning of period 281,866,607 317,445,956
End of period (including accumulated
net investment loss and undistributed
net investment income of ($571,162)
and $49,783, respectively) $ 239,307,313 $ 281,866,607
See Notes to Financial Statements.
7
GLOBAL TECHNOLOGY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
June 30, 2005 (unaudited)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
NOTE A: Significant Accounting Policies
The AllianceBernstein Global Technology Portfolio (the "Portfolio"), formerly
AllianceBernstein Technology Portfolio, is a series of AllianceBernstein
Variable Products Series Fund, Inc. (the "Fund"). The Portfolio's investment
objective is to seek 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 offers
twenty-three separately managed pools of assets which have differing investment
objectives and policies. The Portfolio 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.
The Portfolio 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
the Portfolio's net asset value per share.
The financial statements have been prepared in conformity with U.S. generally
accepted accounting principles, which require management to make certain
estimates and assumptions that affect the reported amounts of assets and
liabilities in the financial statements and amounts of income and expenses
during the reporting period. Actual results could differ from those estimates.
Additional information about some of the items discussed in these Notes to
Financial Statements is contained in the Portfolio's Statement of Additional
Information, which is available upon request. The following is a summary of
significant accounting policies followed by the Portfolio.
1. Security Valuation
Portfolio securities are valued at their current market value determined on the
basis of market quotations or, if market quotations are not readily available
or are deemed unreliable, at "fair value" as determined in accordance with
procedures established by and under the general supervision of the Fund's Board
of Directors.
In general, the market value of securities which are readily available and
deemed reliable are determined as follows. Securities listed on a national
securities exchange or on a foreign securities exchange are valued at the last
sale price at the close of the exchange or foreign securities exchange. If
there has been no sale on such day, the securities are valued at the mean of
the closing bid and asked prices on such day. Securities listed on more than
one exchange are valued by reference to the principal exchange on which the
securities are traded; securities not listed on an exchange but traded on The
NASDAQ Stock Market, Inc. ("NASDAQ") are valued in accordance with the NASDAQ
Official Closing Price; listed put or call options are valued at the last sale
price. If there has been no sale on that day, such securities will be valued at
the closing bid prices on that day; open futures contracts and options thereon
are valued using the closing settlement price or, in the absence of such a
price, the most recent quoted bid price. If there are no quotations available
for the day of valuation, the last available closing settlement price is used;
securities traded in the over-the-counter market, ("OTC") (but excluding
securities traded on NASDAQ) are valued at the mean of the current bid and
asked prices as reported by the National Quotation Bureau or other comparable
sources; U.S. Government securities and other debt instruments having 60 days
or less remaining until maturity are valued at amortized cost if their original
maturity was 60 days or less; or by amortizing their fair value as of the 61st
day prior to maturity if their original term to maturity exceeded 60 days;
fixed-income securities, including mortgage backed and asset backed securities,
may be valued on the basis of prices provided by a pricing service or at a
price obtained from one or more of the major broker/dealers. In cases where
broker/dealer quotes are obtained, Alliance Capital Management, L.P. (the
"Adviser") may establish procedures whereby changes in market yields or spreads
are used to adjust, on a daily basis, a recently obtained quoted price on a
security; and OTC and other derivatives are valued on the basis of a quoted bid
price or spread from a major broker/dealer in such security.
Securities for which market quotations are not readily available (including
restricted securities) or are deemed unreliable are valued at fair value.
Factors considered in making this determination may include, but are not
limited to, information obtained by contacting the issuer, analysts, analysis
of the issuer's financial statements or other available documents. In addition,
the Fund may use fair value pricing for securities primarily traded in non-U.S.
markets because, most foreign markets close well before the Fund values its
securities at 4:00 p.m., Eastern Time. The earlier close of these foreign
markets gives rise to the possibility that significant events, including broad
market moves, may have occurred in the interim and may materially affect the
value of those securities. To account for this, the Fund may frequently value
many of its foreign equity securities using fair value prices based on third
party vendor modeling tools to the extent available.
8
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
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 prices of such currencies against the U.S.
dollar. Purchases and sales of portfolio securities are translated into U.S.
dollars at the rates of exchange prevailing when such securities were acquired
or sold. Income and expenses are translated into U.S. dollars at rates of
exchange prevailing when accrued.
Net realized gain or loss on foreign currency transactions represents foreign
exchange gains and losses from sales and maturities of foreign fixed income
investments, foreign currency exchange contracts, holding of foreign
currencies, currency gains or losses realized between the trade and settlement
dates on foreign investment transactions, and the difference between the
amounts of dividends, interest and foreign withholding taxes recorded on the
Portfolio's books and the U.S. dollar equivalent amounts actually received or
paid. Net unrealized 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 or depreciation of investments
and foreign currency denominated assets and liabilities.
3. Taxes
It is the Portfolio's policy to meet the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute all of its
investment company taxable income and net realized gains, if any, to
shareholders. Therefore, no provisions for federal income or excise taxes are
required. The Portfolio may be subject to taxes imposed by countries in which
it invests. Such taxes are generally based on income and/or capital gains
earned or repatriated. Taxes are accrued and applied to net investment income,
net realized gains and net unrealized appreciation/depreciation as such income
and/or gains are earned.
4. Investment Income and Investment Transactions
Dividend income is recorded on the ex-dividend date or as soon as the Porfolio
is informed of the dividend. Interest income is accrued daily. Investment
transactions are accounted for on the date securities are purchased or sold.
Investment gains and losses are determined on the identified cost basis. The
Portfolio amortizes premiums and accretes discounts as adjustments to interest
income.
5. Income and Expenses
Expenses attributable to a single portfolio are charged to that portfolio.
Expenses of the Fund are charged to each portfolio in proportion to net assets.
All income earned and expenses incurred by a portfolio with multi-class shares
outstanding are borne on a pro-rata basis by each outstanding class of shares,
based on the proportionate interest in the portfolio represented by the net
assets of such class, except that the portfolio's Class B shares bear the
distribution fees.
6. Dividends and Distributions
The Portfolio declares and distributes dividends and distributions from net
investment income and net realized gains, respectively, if any, at least
annually. 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 U.S. generally accepted accounting principles. 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
Until September 6, 2004, under the terms of an investment advisory agreement,
the Portfolio paid the Adviser an advisory fee at an annual rate of 1% of the
Portfolio's average daily net assets. Effective September 7, 2004, the terms of
the investment advisory agreement were amended so that the advisory fee was
reduced to an annual rate of .75% of the first $2.5 billion, .65% of the next
$2.5 billion and .60% in excess of $5 billion, of the Portfolio's average daily
net assets. The fee is accrued daily and paid monthly.
Effective January 1, 2004 through September 6, 2004, in contemplation of the
final agreement with the Office of New York Attorney General ("NYAG"), the
Adviser began waiving a portion of its advisory fee so as to charge the
Portfolio at the reduced annual rate discussed above. For a more complete
discussion of the Adviser's settlement with the NYAG, please see "Legal
Proceedings" below.
9
GLOBAL TECHNOLOGY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(continued)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
Pursuant to the advisory agreement, the Portfolio paid $36,250 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, 2005.
Brokerage commissions paid on investment transactions for the six months ended
June 30, 2005 amounted to $374,354, of which $21,062 and $0, respectively, was
paid to Sanford C. Bernstein & Co. LLC and Sanford C. Bernstein Limited,
affiliates of the Adviser.
The Portfolio compensates Alliance Global Investor Services, Inc., a
wholly-owned subsidiary of the Adviser, under a Transfer Agency Agreement for
providing personnel and facilities to perform transfer agency services for the
Portfolio. Such compensation amounted to $403 for the six months ended June 30,
2005.
NOTE C: Distribution Plan
The Portfolio has adopted a Distribution Plan (the "Plan") for Class B shares
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the Plan
the Portfolio pays distribution and servicing fees to AllianceBernstein
Investment Research and Management, Inc. (the "Distributor"), a wholly-owned
subsidiary of the Adviser, at an annual rate of up to .50% of the 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 limits
payments under the Plan to .25% of the Portfolio's average daily net assets
attributable to Class B shares. The Plan provides that the Distributor will use
such payments in their entirety for distribution assistance and promotional
activities.
The Portfolio is not obligated under the Plan to pay any distribution and
servicing fees in excess of the amounts set forth above. The purpose of the
payments to the Distributor under the Plan is to compensate the Distributor for
its distribution services with respect to the sale of the Portfolio's Class B
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 Plan is
characterized by the staff of the Securities and Exchange Commission as being
of the "compensation" variety.
In the event that the Plan is terminated or not continued, no distribution and
servicing fees (other than current amounts accrued but not yet paid) would be
owed by the Portfolio to the Distributor.
The Plan also provides that the Adviser may use its own resources to finance
the distribution of the Portfolio's shares.
NOTE D: Investment Transactions
Purchases and sales of investment securities (excluding short-term investments)
for the six months ended June 30, 2005, were as follows:
Purchases Sales
------------- -------------
Investment securities (excluding U.S.
government securities) $ 107,584,402 $ 136,721,080
U.S. government securities -0- -0-
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 $ 37,920,956
Gross unrealized depreciation (2,691,400)
Net unrealized appreciation $ 35,229,556
1. Forward Exchange Currency Contracts
The Portfolio may enter into forward exchange currency contracts in order to
hedge its exposure to changes in foreign currency exchange rates on its 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 on a future date at a negotiated forward rate. The gain or loss
arising from the difference between the original contract and the closing of
such contract would be included in net realized gain or loss on foreign
currency transactions.
10
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
Fluctuations in the value of open forward exchange currency contracts are
recorded for financial reporting purposes as unrealized appreciation and
depreciation by the Portfolio.
The Portfolio's custodian will place and maintain cash not available for
investment or other liquid assets in a separate account of the Portfolio having
a value at least equal to the aggregate amount of the Portfolio's commitments
under forward exchange currency contracts entered into with respect to position
hedges.
Risks may arise from the potential inability of the 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 the Portfolio has in that particular
currency contract.
2. Option Transactions
For hedging and investment purposes, the Portfolio may purchase and write
(sell) put and call options on U.S. and foreign government securities and
foreign currencies that are traded on U.S. and foreign 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 written options which
expire unexercised are recorded by the Portfolio on the expiration date as
realized gains from options written. 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. If a
put option is exercised, the premium received reduces the cost basis of the
security or currency purchased by the Portfolio. 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.
NOTE E: Securities Lending
The Portfolio has entered into a securities lending agreement with UBS Warburg
LLC (the "Lending Agent"). Under the terms of the agreement, the Lending Agent,
on behalf of the Portfolio, administers the lending of portfolio securities to
certain broker-dealers. In return, the Portfolio receives fee income from the
lending transactions or it retains a portion of interest on the investment of
any cash received as collateral. The Portfolio also continues to receive
dividends or interest on the securities loaned. Unrealized gain or loss on the
value of the securities loaned that may occur during the term of the loan will
be reflected in the accounts of the Portfolio. All loans are continuously
secured by collateral exceeding the value of the securities loaned. All
collateral consists of either cash or U.S. Goverment securities. The Lending
Agent invests the cash collateral received in an eligible money market vehicle
in accordance with the investment restrictions of the Portfolio. The Lending
Agent will indemnify the Portfolio for any loss resulting from a borrower's
failure to return a loaned security when due. For the six months ended June 30,
2005, the Portfolio had no securities on loan.
11
GLOBAL TECHNOLOGY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(continued)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
NOTE F: Capital Stock
There are 1,000,000,000 share of $.001 par value capital stock authorized,
divided into two classes, designated Class A and Class B shares. Each class
consists of 500,000,000 authorized shares. Transactions in capital stock were
as follows:
SHARES AMOUNT
--------------------------- ------------------------------
Six Months Ended Year Ended Six Months Ended Year Ended
June 30, 2005 December 31, June 30, 2005 December 31,
(unaudited) 2004 (unaudited) 2004
------------ ------------ -------------- --------------
Class A
Shares sold 416,211 1,182,455 $ 5,859,315 $ 17,321,633
Shares redeemed (1,205,405) (2,487,001) (17,033,330) (35,151,097)
Net decrease (789,194) (1,304,546) $ (11,174,015) $ (17,829,464)
Class B
Shares sold 616,542 3,127,554 $ 8,674,053 $ 45,109,667
Shares redeemed (1,694,758) (5,255,261) (23,759,548) (74,059,001)
Net decrease (1,078,216) (2,127,707) $ (15,085,495) $ (28,949,334)
NOTE G: Risks Involved in Investing in the Portfolio
Foreign Securities 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.
Indemnification Risk--In the ordinary course of business, the Portfolio enters
into contracts that contain a variety of indemnifications. The Portfolio's
maximum exposure under these arrangements is unknown. However, the Portfolio
has not had prior claims or losses pursuant to these indemnification provisions
and expects the risk of loss thereunder to be remote.
NOTE H: Joint Credit Facility
A number of open-end mutual funds managed by the Adviser, including the
Portfolio, participate in a $500 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
Portfolio did not utilize the Facility during the six months ended June 30,
2005.
NOTE I: Components of Accumulated Earnings (Deficit)
The tax character of distributions to be paid for the year ending December 31,
2005 will be determined at the end of the current fiscal year. As of December
31, 2004, the components of accumulated earnings/(deficit) on a tax basis were
as follows:
Accumulated capital and other losses $ (306,271,472)(a)
Unrealized appreciation/(depreciation) 62,593,919(b)
Total accumulated earnings/(deficit) $ (243,677,553)
(a) On December 31, 2004, the Portfolio had a net capital loss carryforward of
$306,255,792 of which $112,714,185 expires in the year 2009, $172,308,210
expires in the year 2010, and $21,233,397 expires in the year 2011. To the
extent future capital gains are offset by capital loss carryforwards, such
gains will not be distributed. During the current fiscal year, the Portfolio
utilized capital loss carryforward of $12,126,307. Net capital losses and net
foreign currency losses incurred after October 31, and within the taxable year
are deemed to arise on the first business day of Portfolio's next taxable year.
For the year ended December 31, 2004, the Portfolio deferred to January 1,
2005, post October foreign currency losses of $15,680.
(b) The difference between book-basis and tax-basis unrealized
appreciation/(depreciation) is attributable primarily to the tax deferral of
losses on wash sales, and the tax character of dividends received.
12
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
NOTE J: Legal Proceedings
As has been previously reported, the staff of the U.S. Securities and Exchange
Commission ("SEC") and the NYAG have been investigating practices in the mutual
fund industry identified as "market timing" and "late trading" of mutual fund
shares. Certain other regulatory authorities have also been conducting
investigations into these practices within the industry and have requested that
the Adviser provide information to them. The Adviser has been cooperating and
will continue to cooperate with all of these authorities.
On December 18, 2003, the Adviser confirmed that it had reached terms with the
SEC and the NYAG for the resolution of regulatory claims relating to the
practice of "market timing" mutual fund shares in some of the AllianceBernstein
Mutual Funds. The agreement with the SEC is reflected in an Order of the
Commission ("SEC Order"). The agreement with the NYAG is memorialized in an
Assurrance of Discontinuance dated September 1, 2004 ("NYAG Order"). Among the
key provisions of these agreements are the following:
(i) The Adviser agreed to establish a $250 million fund (the
"Reimbursement Fund") to compensate mutual fund shareholders for the adverse
effects of market timing attributable to market timing relationships described
in the SEC Order. According to the SEC Order, the Reimbursement Fund is to be
paid, in order of priority, to fund investors based on (i) their aliquot share
of losses suffered by the fund due to market timing, and (ii) a proportionate
share of advisory fees paid by such fund during the period of such market
timing;
(ii) The Adviser agreed to reduce the advisory fees it receives from
some of the AllianceBernstein long-term, open-end retail funds until December
31, 2008; and
(iii) The Adviser agreed to implement changes to its governance and
compliance procedures. Additionally, the SEC Order and the NYAG Order
contemplate that the Adviser's registered investment company clients, including
the Fund, will introduce governance and compliance changes.
In anticipation of final, definitive documentation of the NYAG Order and
effective January 1, 2004, the Adviser began waiving a portion of its advisory
fee. On September 7, 2004, the Fund's investment advisory agreement was amended
to reflect the reduced advisory fee. For more information on this waiver and
amendment to the Fund's investment advisory agreement, please see "Advisory Fee
and Other Transactions with Affiliates" above.
A special committee of the Adviser's Board of Directors, comprised of the
members of the Adviser's Audit Committee and the other independent member of
the Adviser's Board, is continuing to direct and oversee an internal
investigation and a comprehensive review of the facts and circumstances
relevant to the SEC's and the NYAG's investigations.
In addition, the Independent Directors of the Fund ("the Independent
Directors") have initiated an investigation of the above-mentioned matters with
the advice of an independent economic consultant and independent counsel. The
Independent Directors have formed a special committee to supervise the
investigation.
On October 2, 2003, a putative class action complaint entitled HINDO ET AL. V.
ALLIANCEBERNSTEIN GROWTH & INCOME FUND ET AL. (the "Hindo Complaint") was filed
against the Adviser; Alliance Capital Management Holding L.P.; Alliance Capital
Management Corporation; AXA Financial, Inc.; certain of the AllianceBernstein
Mutual Funds, including the Fund; Gerald Malone; Charles Schaffran
(collectively, the "Alliance Capital defendants"); and certain other defendants
not affiliated with the Adviser. The Hindo Complaint was filed in the United
States District Court for the Southern District of New York by alleged
shareholders of two of the AllianceBernstein Mutual Funds. The Hindo Complaint
alleges that certain of the Alliance Capital defendants failed to disclose that
they improperly allowed certain hedge funds and other unidentified parties to
engage in late trading and market timing of AllianceBernstein Fund securities,
violating Sections 11 and 15 of the Securities Act, Sections 10(b) and 20(a) of
the Exchange Act, and Sections 206 and 215 of the Advisers Act. Plaintiffs seek
an unspecified amount of compensatory damages and rescission of their contracts
with the Adviser, including recovery of all fees paid to the Adviser pursuant
to such contracts.
Since October 2, 2003, numerous additional lawsuits making factual allegations
similar to those in the Hindo Complaint were filed against the Adviser and
certain other defendants, some of which name the Fund as a defendant. All of
these lawsuits seek an unspecified amount of damages. The lawsuits are now
pending in the United States District Court for the District of Maryland
pursuant to a ruling by the Judicial Panel on Multidistrict Litigation
transferring and centralizing all of the mutual fund cases involving market and
late trading in the District of Maryland.
13
GLOBAL TECHNOLOGY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(continued)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
As a result of the matters discussed above, investors in the AllianceBernstein
Mutual Funds may choose to redeem their investments. This may require the
AllianceBernstein Mutual Funds to sell investments held by those funds to
provide for sufficient liquidity and could also have an adverse effect on the
investment performance of the AllianceBernstein Mutual Funds.
The Adviser and approximately twelve other investment management firms were
publicly mentioned in connection with the settlement by the SEC of charges that
an unaffiliated broker/dealer violated federal securities laws relating to its
receipt of compensation for selling specific mutual funds and the disclosure of
such compensation. The SEC indicated publicly that, among other things, it was
considering enforcement action in connection with mutual funds' disclosure of
such arrangements and in connection with the practice of considering mutual
fund sales in the direction of brokerage commissions from fund portfolio
transactions. The SEC issued subpoenas to the Adviser, and the NASD issued
requests for information in connection with this matter and the Adviser
provided documents and other information to the SEC and NASD and cooperated
fully with the investigations. On June 8, 2005 the NASD announced that it had
reached a settlement with the Distributor in connection with this matter.
Management of the Adviser expects that the settlement has resolved both
regulatory inquiries described above.
On June 22, 2004, a purported class action complaint entitled AUCOIN, ET AL. V.
ALLIANCE CAPITAL MANAGEMENT L.P., ET AL. ("Aucoin Complaint") was filed against
the Adviser, Alliance Capital Management Holding L.P., Alliance Capital
Management Corporation, AXA Financial, Inc., AllianceBernstein Investment
Research & Management, Inc., certain current and former directors of the
AllianceBernstein Mutual Funds, and unnamed Doe defendants. The Aucoin
Complaint names certain of the AllianceBernstein mutual funds as nominal
defendants. The Aucoin Complaint was filed in the United States District Court
for the Southern District of New York by an alleged shareholder of an
AllianceBernstein mutual fund. The Aucoin Complaint alleges, among other
things, (i) that certain of the defendants improperly authorized the payment of
excessive commissions and other fees from fund assets to broker-dealers in
exchange for preferential marketing services, (ii) that certain of the
defendants misrepresented and omitted from registration statements and other
reports material facts concerning such payments, and (iii) that certain
defendants caused such conduct as control persons of other defendants. The
Aucoin Complaint asserts claims for violation of Sections 34(b), 36(b) and
48(a) of the Investment Company Act, Sections 206 and 215 of the Advisers Act,
breach of common law fiduciary duties, and aiding and abetting breaches of
common law fiduciary duties. Plaintiffs seek an unspecified amount of
compensatory damages and punitive damages, rescission of their contracts with
the Adviser, including recovery of all fees paid to the Adviser pursuant to
such contracts, an accounting of all fund-related fees, commissions and soft
dollar payments, and restitution of all unlawfully or discriminatorily obtained
fees and expenses.
Since June 22, 2004, numerous additional lawsuits making factual allegations
substantially similar to those in the Aucoin Complaint were filed against the
Adviser and certain other defendants, and others may be filed.
It is possible that these matters and/or other developments resulting from
these matters could result in increased redemptions of the Fund's shares or
other adverse consequences to the Fund. However, the Adviser believes that
these matters are not likely to have a material adverse effect on its ability
to perform advisory services relating to the Fund.
14
GLOBAL TECHNOLOGY PORTFOLIO
FINANCIAL HIGHLIGHTS
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
CLASS A
----------------------------------------------------------------------------
Six Months
Ended Year Ended December 31,
June 30, 2005 ---------------------------------------------------------------
(unaudited) 2004 2003 2002 2001 2000
----------- ----------- ----------- ----------- ----------- -----------
Net asset value, beginning of period $15.27 $14.49 $10.05 $17.24 $24.95 $33.61
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (a) (.03) (.03)(b) (.11) (.13) (.12) (.14)(b)
Net realized and unrealized
gain (loss) on investment
transactions (.82) .81 4.55 (7.06) (5.92) (6.40)
Net increase (decrease) in net asset
value from operations (.85) .78 4.44 (7.19) (6.04) (6.54)
LESS: DISTRIBUTIONS
Distributions from net realized gain on
investment transactions -0- -0- -0- -0- (.11) (2.12)
Distributions in excess of net realized
gain on investment transactions -0- -0- -0- -0- (1.56) -0-
Total distributions -0- -0- -0- -0- (1.67) (2.12)
Net asset value, end of period $14.42 $15.27 $14.49 $10.05 $17.24 $24.95
TOTAL RETURN
Total investment return based on
net asset value (c) (5.57)% 5.38% 44.18% (41.71)% (25.23)% (21.52)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $99,262 $117,145 $130,127 $93,369 $235,252 $343,601
Ratio to average net assets of:
Expenses, net of waivers and
reimbursements .91%(d) .88% 1.11% 1.20% 1.08% 1.02%
Expenses, before waivers and
reimbursements .91%(d) 1.06% 1.11% 1.20% 1.08% 1.06%
Net investment loss (.36)%(d) (.22)%(b) (.86)% (1.01)% (.64)% (.38)%(b)
Portfolio turnover rate 44% 86% 90% 68% 40% 61%
See footnote summary on page 16.
15
GLOBAL TECHNOLOGY PORTFOLIO
FINANCIAL HIGHLIGHTS
(continued)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
CLASS B
----------------------------------------------------------------------------
Six Months
Ended Year Ended December 31,
June 30, 2005 ---------------------------------------------------------------
(unaudited) 2004 2003 2002 2001 2000
----------- ----------- ----------- ----------- ----------- -----------
Net asset value, beginning of period $15.08 $14.35 $ 9.98 $17.15 $24.90 $33.61
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (a) (.04) (.07)(b) (.14) (.16) (.17) (.21)(b)
Net realized and unrealized
gain (loss) on investment
transactions (.81) .80 4.51 (7.01) (5.91) (6.38)
Net increase (decrease) in net asset
value from operations (.85) .73 4.37 (7.17) (6.08) (6.59)
LESS: DISTRIBUTIONS
Distributions from net realized gain on
investment transactions -0- -0- -0- -0- (.11) (2.12)
Distributions in excess of net realized
gain on investment transactions -0- -0- -0- -0- (1.56) -0-
Total distributions -0- -0- -0- -0- (1.67) (2.12)
Net asset value, end of period $14.23 $15.08 $14.35 $ 9.98 $17.15 $24.90
TOTAL RETURN
Total investment return based on
net asset value (c) (5.64)% 5.09% 43.79% (41.81)% (25.45)% (21.68)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $140,045 $164,721 $187,319 $99,528 $179,076 $178,768
Ratio to average net assets of:
Expenses, net of waivers and
reimbursements 1.16%(d) 1.13% 1.37% 1.46% 1.33% 1.31%
Expenses, before waivers and
reimbursements 1.16%(d) 1.31% 1.37% 1.46% 1.33% 1.33%
Net investment loss (.61)%(d) (.47)%(b) (1.11)% (1.27)% (.92)% (.66)%(b)
Portfolio turnover rate 44% 86% 90% 68% 40% 61%
(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 return does not reflect the
deduction of taxes that a shareholder would pay on Portfolio distributions or
the redemption of Portfolio shares. Total investment return calculated for a
period of less than one year is not annualized.
(d) Annualized.
16
[LOGO] ALLIANCEBERNSTEIN (R)
Investment Research and Management
ALLIANCEBERNSTEIN
VARIABLE PRODUCTS SERIES FUND, INC.
SEMI-ANNUAL REPORT
JUNE 30, 2005
> ALLIANCEBERNSTEIN U.S. GOVERNMENT/HIGH GRADE PORTFOLIO
INVESTMENT PRODUCTS OFFERED
- ------------------------------
o ARE NOT FDIC INSURED
o MAY LOSE VALUE
o ARE NOT BANK GUARANTEED
- ------------------------------
YOU MAY OBTAIN A DESCRIPTION OF THE FUND'S PROXY VOTING POLICIES AND
PROCEDURES, AND INFORMATION REGARDING HOW THE FUND VOTED PROXIES RELATING TO
PORTFOLIO SECURITIES DURING THE MOST RECENT 12-MONTH PERIOD ENDED JUNE 30,
WITHOUT CHARGE. SIMPLY VISIT THE SECURITIES AND EXCHANGE COMMISSION'S (THE
"COMMISSION") WEB SITE AT WWW.SEC.GOV, OR CALL ALLIANCEBERNSTEIN AT (800)
227-4618.
THE FUND FILES ITS COMPLETE SCHEDULE OF PORTFOLIO HOLDINGS WITH THE COMMISSION
FOR THE FIRST AND THIRD QUARTERS OF EACH FISCAL YEAR ON FORM N-Q. THE FUND'S
FORMS N-Q ARE AVAILABLE ON THE COMMISSION'S WEB SITE AT WWW.SEC.GOV. THE FUND'S
FORMS N-Q MAY ALSO BE REVIEWED AND COPIED AT THE COMMISSION'S PUBLIC REFERENCE
ROOM IN WASHINGTON, DC; INFORMATION ON THE OPERATION OF THE PUBLIC REFERENCE
ROOM MAY BE OBTAINED BY CALLING (800) SEC-0330.
U.S. GOVERNMENT/HIGH GRADE
SECURITIES PORTFOLIO
FUND EXPENSES
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including sales charges (loads) on purchase payments, contingent
deferred sales charges on redemptions and (2) ongoing costs, including
management fees; distribution (12b-1) fees; and other Fund expenses. This
example is intended to help you understand your ongoing costs (in dollars) of
investing in the Fund and to compare these costs with the ongoing costs of
investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of
the period and held for the entire period as indicated below.
ACTUAL EXPENSES
The first line of the table below provides information about actual account
values and actual expenses. You may use the information in this line, together
with the amount you invested, to estimate the expenses that you paid over the
period. Simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
in the first line under the heading entitled "Expenses Paid During Period" to
estimate the expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio and an assumed annual rate of return of 5% before expenses, which is not
the Fund's actual return. The hypothetical account values and expenses may not
be used to estimate the actual ending account balance or expenses you paid for
the period. You may use this information to compare the ongoing costs of
investing in the Fund and other funds by comparing this 5% hypothetical example
with the 5% hypothetical examples that appear in the shareholder reports of
other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads), or contingent deferred sales charges on redemptions.
Therefore, the second line of the table is useful in comparing ongoing costs
only, and will not help you determine the relative total costs of owning
different funds. In addition, if these transactional costs were included, your
costs would have been higher.
BEGINNING ENDING
U.S. GOVERNMENT/HIGH GRADE ACCOUNT VALUE ACCOUNT VALUE EXPENSES PAID ANNUALIZED
SECURITIES PORTFOLIO JANUARY 1, 2005 JUNE 30, 2005 DURING PERIOD* EXPENSE RATIO*
- ------------------------------------------------------------------------------------------------
CLASS A
Actual $1,000 $1,021,51 $3.56 0.71%
Hypothetical (5% return before
expenses) $1,000 $1,021.27 $3.56 0.71%
CLASS B
Actual $1,000 $1,020.14 $4.81 0.96%
Hypothetical (5% return before
expenses) $1,000 $1,020.03 $4.81 0.96%
* EXPENSES ARE EQUAL TO EACH CLASSES' ANNUALIZED EXPENSE RATIOS, MULTIPLIED BY
THE AVERAGE ACCOUNT VALUE OVER THE PERIOD, MULTIPLIED BY THE NUMBER OF DAYS IN
THE MOST RECENT FISCAL HALF-YEAR/365 (TO REFLECT THE ONE-HALF YEAR PERIOD).
1
U.S. GOVERNMENT/HIGH GRADE
SECURITIES PORTFOLIO
SECURITY TYPE BREAKDOWN
June 30, 2005 (unaudited)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
SECURITY TYPE U.S. $ VALUE PERCENT OF NET ASSETS
- --------------------------------------------------------------------------------------------
Government/Agency Obligations $64,367,112 53.2%
Corporate Debt Obligations 28,588,968 23.6
Commercial Mortgage Backed Securities 12,731,478 10.5
Asset Backed Securities 8,048,071 6.7
Non-Agency Collateralized Mortgage Obligations 766,019 0.6
Sovereign Debt Obligation 747,988 0.6
----------- ------
Total Investments* 115,249,636 95.2
Cash and receivables, net of liabilities 5,743,288 4.8
----------- ------
Net Assets $120,992,924 100.0%
* Excludes short-term investments.
2
U.S. GOVERNMENT/HIGH GRADE
SECURITIES PORTFOLIO
PORTFOLIO OF INVESTMENTS
June 30, 2005 (unaudited)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
PRINCIPAL
AMOUNT
(000) U.S. $ VALUE
- -------------------------------------------------------------------------------
U.S. GOVERNMENT &
GOVERNMENT
SPONSORED AGENCY
OBLIGATIONS-53.2%
FEDERAL AGENCIES-2.1%
Federal National Mortgage
Association
3.75%, 9/15/08 $ 1,455 $1,442,264
3.875%, 11/17/08 1,085 1,077,286
------------
2,519,550
------------
MORTGAGE
PASS-THROUGHS-35.7%
Federal Gold Loan Mortgage
Corp.
6.00 %,TBA 1,745 1,787,534
Federal National Mortgage
Association
4.50%, TBA 7,430 7,395,168
5.00%, TBA 4,550 4,550,000
5.50%, TBA 9,525 9,693,038
6.00%,11/01/16 447 462,375
6.00%, TBA 7,840 8,036,000
6.50%, 4/01/28-10/01/34 2,277 2,357,998
6.50%, TBA 4,465 4,619,882
Government National Mortgage
Association
5.00%, TBA 2,710 2,730,325
6.00%, TBA 1,575 1,624,219
------------
43,256,539
------------
U.S. TREASURY
SECURITIES-15.4%
U.S. Treasury Bond
5.375%, 2/15/31 3,585 4,230,300
U.S. Treasury Notes
2.00%, 7/15/14 (TIPS) 377 388,112
3.625%, 1/15/08 (TIPS) 1,920 2,032,094
3.75%, 3/31/07 8,680 8,693,221
3.875%, 5/15/10 2,585 2,599,742
4.00%, 2/15/15 375 376,333
4.25%, 11/15/14 265 271,221
------------
18,591,023
------------
Total U. S. Government &
Government Sponsored
Agency Obligations
(cost $64,106,902) 64,367,112
------------
CORPORATE DEBT
OBLIGATIONS-23.6%
AUTOMOTIVE-0.7%
Daimler Chrysler NA Holdings
4.875%, 6/15/10 110 109,494
Ford Motor Co.
6.375%, 2/01/29 95 73,247
7.45%, 7/16/31 40 33,393
Ford Motor Credit Co.
5.70%, 1/15/10 40 36,894
7.00%, 10/01/13 125 119,935
7.375%, 2/01/11 480 467,569
------------
840,532
------------
BANKING-3.0%
Barclays Bank Plc (United
Kingdom)
8.55%, 9/29/49 (a) (b) 365 439,122
Chuo Mitsui Trust & Banking
(Japan)
5.506%, 12/15/49 (a) (b) 125 122,803
Huntington National Bank
4.375%, 1/15/10 250 250,243
JPMorgan Chase & Co.
6.75%, 2/01/11 425 470,008
Mizuho Finance (Cayman Islands)
8.375%, 12/29/49 385 420,998
RBS Capital Trust I pfd.
4.709%, 12/29/49 (b) 570 562,353
RBS Capital Trust III
5.512%, 9/29/49 (b) 530 550,465
Sanwa Bank Ltd.
7.40%, 6/15/11 100 113,214
Suntrust Bank Series CD
3.458%, 6/02/09 (c) 190 190,105
UFJ Finance Aruba AEC (Aruba)
6.75%, 7/15/13 240 267,648
Wells Fargo Company
4.20%, 1/15/10 195 194,897
------------
3,581,856
------------
BROADCASTING/MEDIA-0.9%
News America, Inc.
6.55%, 3/15/33 295 319,995
Time Warner Entertainment Co.
8.375%, 3/15/23 470 600,936
WPP Finance (UK) Corp.
(United Kingdom)
5.875%, 6/15/14 175 185,021
------------
1,105,952
------------
BUILDING/REAL ESTATE-0.1%
iStar Financial, Inc.
5.15%, 3/01/12 125 123,543
------------
CABLE-1.1%
AT&T Broadband
9.455%, 11/15/22 220 311,218
British Sky Broadcasting
(United Kingdom)
6.875%, 2/23/09 100 107,582
Comcast Cable Communications,
Inc.
6.875%, 6/15/09 250 272,329
3
U.S. GOVERNMENT/HIGH GRADE
SECURITIES PORTFOLIO
PORTFOLIO OF INVESTMENTS
(continued)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
PRINCIPAL
AMOUNT
(000) U.S. $ VALUE
- -------------------------------------------------------------------------------
Comcast Corp.
5.30%, 1/15/14 $ 220 $226,162
5.50%, 3/15/11 275 286,915
Cox Communications, Inc.
4.625%, 6/01/13 125 121,339
------------
1,325,545
------------
COMMUNICATIONS-2.2%
British Telecom Plc (United
Kingdom)
8.375%, 12/15/10 (d) 450 532,794
Deutsche Telekom International
Finance (Netherlands)
8.00%, 6/15/10 150 173,840
SBC Communications, Inc.
5.10%, 9/15/14 145 148,257
5.875%, 2/01/12 410 438,280
Sprint Capital Corp.
8.375%, 3/15/12 490 589,382
Telecom Italia Capital
4.00%, 1/15/10 (a) 475 461,545
Telecom Italia Capital
(Luxembourg)
6.375%, 11/15/33 270 289,522
Verizon Global Funding Corp.
7.75%, 12/01/30 35 45,194
------------
2,678,814
------------
COMMUNICATIONS -
MOBILE-1.1%
AT&T Wireless Services, Inc.
8.75%, 3/01/31 385 539,631
Cingular Wireless LLC
5.625%, 12/15/06 250 254,157
Telus Corp. (Canada)
7.50%, 6/01/07 330 349,107
Verizon Global Funding Corp.
7.375%, 9/01/12 175 204,486
------------
1,347,381
------------
CONGLOMERATES/
MISCELLANEOUS-0.3%
Hutchison Whampoa
International Ltd. (Cayman
Islands)
7.45%, 11/24/33 (a) 285 335,327
------------
CONSUMER
MANUFACTURING-0.1%
Fortune Brands, Inc.
2.875%, 12/01/06 175 171,571
------------
ENERGY-1.5%
Amerada Hess Corp.
6.65%, 8/15/11 425 467,678
7.125%, 3/15/33 175 207,570
7.875%, 10/01/29 300 379,051
Conoco, Inc.
6.95%, 4/15/29 225 282,671
Enterprise Products Operations
5.60%, 10/15/14 125 128,631
Valero Energy Corp.
6.875%, 4/15/12 255 284,631
7.50%, 4/15/32 105 129,604
------------
1,879,836
------------
FINANCIAL-4.7%
American General Finance Corp.
4.625%, 5/15/09 510 512,607
Berkshire Hathaway, Inc.
4.20%, 12/15/10 270 268,081
Boeing Capital Corp.
4.75%, 8/25/08 115 117,043
Capital One Bank
6.50%, 6/13/13 215 236,550
CBA Capital Trust I pfd.
5.805%, 12/31/49 (a) 235 248,966
CIT Group, Inc.
3.49%, 5/18/07 (c) 210 210,376
7.75%, 4/02/12 135 158,333
Citigroup, Inc.
3.50%, 6/09/09 (c) 175 175,162
Countrywide Home Loans, Inc.
4.00%, 3/22/11 330 318,260
Credit Suisse First Boston
5.50%, 8/15/13 255 270,040
General Electric Capital Corp.
4.00%, 2/17/09 645 637,706
4.375%, 11/21/11 35 34,948
6.75%, 3/15/32 440 542,955
Goldman Sachs Group, Inc.
4.75%, 7/15/13 230 229,807
5.125%, 1/15/15 165 168,061
Household Finance Corp.
6.50%, 11/15/08 425 453,621
7.00%, 5/15/12 195 221,204
MBNA Corp.
4.625%, 9/15/08 290 293,952
Washington Mutual
6.875%, 5/15/11 540 607,034
------------
5,704,706
------------
FOOD/BEVERAGE-0.7%
Kraft Foods, Inc.
4.125%, 11/12/09 540 535,418
5.25%, 10/01/13 250 260,148
------------
795,566
------------
HEALTHCARE-0.6%
Humana, Inc.
6.30%, 8/01/18 215 235,079
WellPoint, Inc.
3.75%, 12/14/07 80 78,970
4.25%, 12/15/09 405 403,209
------------
717,258
------------
4
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
PRINCIPAL
AMOUNT
(000) U.S. $ VALUE
- -------------------------------------------------------------------------------
INDUSTRIAL &
COMMERCIAL
SERVICES-0.4%
Tyco International Group, SA
6.375%, 10/15/11 $ 440 $483,254
------------
INSURANCE-1.8%
Assurant, Inc.
5.625%, 2/15/14 220 231,531
Liberty Mutual Group
5.75%, 3/15/14 (a) 195 196,306
Mangrove Bay Pass-Through
Trust
6.102%, 7/15/33 (a) (b) 635 652,481
MetLife, Inc.
5.00%, 11/24/13 225 228,871
Royal Sun & Alliance Insurance
(United Kingdom)
8.95%, 10/15/29 215 278,212
Willis Group N America
5.125%, 7/15/10 50 50,109
Zurich Capital Trust I
8.376%, 6/01/37 (a) 490 541,888
------------
2,179,398
------------
METALS & MINING-0.1%
Ispat Inland ULC
9.75%, 4/01/14 95 110,675
------------
PAPER/PACKAGING-0.7%
International Paper Co.
5.30%, 4/01/15 300 300,879
Weyerhaeuser Co.
5.95%, 11/01/08 175 183,219
7.375%, 3/15/32 360 424,504
------------
908,602
------------
PUBLIC UTILITIES -
ELECTRIC & GAS-2.8%
Carolina Power & Light Co.
6.50%, 7/15/12 335 369,792
Consumers Energy
Series C
4.25%, 4/15/08 130 129,831
Duke Capital LLC
8.00%, 10/01/19 250 309,411
First Energy Corp.
Series B
6.45%, 11/15/11 130 142,041
Series C
7.375%, 11/15/31 450 550,070
MidAmerican Energy Holdings
Co.
5.875%, 10/01/12 195 207,132
NiSource Finance Corp.
7.875%, 11/15/10 190 218,323
Pacific Gas & Electric
6.05%, 3/01/34 355 391,242
Progress Energy, Inc.
7.10%, 3/01/11 185 206,084
Public Service Company of
Colorado
7.875%, 10/01/12 200 241,770
Southern California Edison
5.00%, 1/15/16 40 40,940
TXU Australia LP (Australia)
6.15%, 11/15/13 (a) 235 256,717
Union Electric Co.
5.10%, 10/01/19 90 91,878
Xcel Energy, Inc.
7.00%, 12/01/10 260 289,247
------------
3,444,478
------------
PUBLISHING-0.1%
Donnelley (R.R.) & Sons
5.50%, 5/15/15 (a) 90 91,364
SERVICE-0.3%
Republic Services, Inc.
6.086%, 3/15/35 (a) 100 105,635
Waste Management, Inc.
6.875%, 5/15/09 205 221,941
------------
327,576
------------
SUPERMARKETS &
DRUGS-0.2%
Safeway, Inc.
6.50%, 3/01/11 175 189,143
------------
TECHNOLOGY-0.2%
IBM Corp.
4.375%, 6/01/09 90 90,977
Motorola, Inc.
7.625%, 11/15/10 136 155,614
------------
246,591
------------
Total Corporate Debt Obligations
(cost $27,218,644) 28,588,968
------------
COMMERCIAL MORTGAGE
BACKED SECURITIES-10.5%
Banc of America Commercial
Mortgage, Inc.
Series 2004-1 Cl.A2
4.037%, 11/10/39 495 488,486
Series 2004-1 Cl.A4
4.76%, 11/10/39 645 653,696
Series 2004-3 Cl.A5
5.482%, 6/10/39 (b) 675 716,135
Series 2004-4 Cl.A3
4.128%, 7/10/42 410 407,823
Series 2004-6 Cl.A2
4.161%, 12/10/42 525 521,514
Series 2005-1 Cl.A3
4.877%, 11/10/42 535 546,658
Bear Stearns Commercial
Mortgage Securities
Series 2005-PWR7 A3
5.116%, 2/11/41 (b) 505 526,311
Series 2005-T18 Cl.A4
5.15%, 2/13/42 (b) 530 544,427
5
U.S. GOVERNMENT/HIGH GRADE
SECURITIES PORTFOLIO
PORTFOLIO OF INVESTMENTS
(continued)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
PRINCIPAL
AMOUNT
(000) U.S. $ VALUE
- -------------------------------------------------------------------------------
CS First Boston Mortgage
Securities Corp.
Series 2003-CK2 Cl.A2
3.861%, 3/15/36 $ 360 $357,458
Series 2004-C5 Cl.A2
4.183%, 11/15/37 440 437,096
Series 2005-C1 Cl.A4
5.014%, 2/15/38 (b) 450 464,607
GE Capital Commercial
Mortgage Corp.
Series 2004-C3 Cl.A4
5.189%, 7/10/39 (b) 470 489,458
Greenwich Capital Commercial
Funding Corp.
Series 2003-C1 Cl.A4
4.111%, 7/05/35 450 439,809
Series 2005-GG3 Cl.A2
4.305%, 8/10/42 (b) 530 529,842
JPMorgan Chase Commercial
Mortgage Securities Corp.
Series 2004-C1 Cl.A2
4.302%, 1/15/38 95 94,444
Series 2005-LDP1 Cl.A2
4.625%, 3/15/46 (b) 535 540,730
Series 2005-LDP1 Cl.A4
5.038%, 3/15/46 550 568,436
LB-UBS Commercial Mortgage
Trust
Series 2004-C7 Cl.A2
3.992%, 10/15/29 385 380,422
Series 2004-C8 Cl.A2
4.201%, 12/15/29 420 418,328
Series 2005-C1 Cl.A4
4.742%, 2/15/30 365 370,143
Merrill Lynch Mortgage Trust
Series 2004-Key2 Cl.A2
4.166%, 8/12/39 350 347,368
Series 2005-MKB2 Cl.A2
4.806%, 9/12/42 655 666,417
Morgan Stanley Capital I
Series 2004-T13 Cl.A2
3.94%, 9/13/45 690 678,270
Series 2005-HQ5 Cl.A4
5.168%, 1/14/42 840 877,673
Series 2005-T17 C1.A5
4.78%, 12/13/41 655 665,927
------------
Total Commercial Mortgage
Backed Securities
(cost $12,528,773) 12,731,478
------------
ASSET-BACKED
SECURITIES-6.7%
Aegis Asset Backed Securities
Trust
Series 2004-3 Cl.A2A
3.514%, 9/25/34 (c) 393 392,558
American Express Credit
Account Master Trust
Series 2005-1 Cl.A
3.25%, 10/15/12 (c) 320 319,600
Asset Backed Funding
Certificates
Series 2003-WF1 Cl.A2
3.84%, 12/25/32 (c) 359 361,409
Bank One Issuance Trust
Series 2004-A4 Cl.A4
3.26%, 2/16/10 (c) 400 400,286
Bear Stearns Asset Backed
Securities, Inc.
Series 2005-SD1 Cl.1A1
2.71%, 3/25/35 (c) 276 276,358
Capital Auto Receivables Asset
Trust
Series 2005-SN1A Cl.A3A
4.10%, 6/15/08 465 465,219
Centex Home Equity
Series 2003-C Cl.AV
3.614%, 9/25/33 (c) 99 98,825
Citibank Credit Card Issuance
Trust
Series 2004 Cl.A8
4.90%, 12/12/16 735 756,131
Citibank OMNI - S Master Trust
Series 1996-5 Cl.A
3.45%, 12/16/11 (a) (c) 605 605,944
Discover Card Master Trust I
Series 2004-1 Cl.A
3.25%, 4/16/10 (c) 460 459,465
Equity One ABS, Inc.
Series 2004-3 Cl.AF1
3.474%, 7/25/34 (c) 134 134,004
MBNA Credit Card Master
Note Trust
Series 2001-A5 Cl.A5
3.43%, 3/15/11 (b) 1,195 1,202,483
Merrill Lynch Mortgage
Investors, Inc.
Series 2004-SL1 Cl.A
3.574%, 4/25/35 (b) 61 60,813
Morgan Stanley ABS Capital I
Series 2004-HE4 Cl.A3
3.514%, 5/25/34 (b) 203 202,628
Series 2005-WMC1 Cl.A2A
3.414%, 1/25/35 (b) 325 325,066
Novastar Home Equity Loan
Series 2001-1 A1
3.594%, 7/25/31 (e) 290 290,292
RAAC Series
Series 2004-SP1 Cl.AI1
3.494%, 6/25/13 (c) 78 78,382
6
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
PRINCIPAL
AMOUNT
(000) U.S. $ VALUE
- -------------------------------------------------------------------------------
Residential Asset Mortgage
Products, Inc.
Series 2004-RS2 Cl.AI1
3.444%, 1/25/24 (c) $ 13 $12,947
Series 2004-RS6 Cl.AI1
3.464%, 8/25/22 (c) 74 73,750
Series 2005-RS1 Cl.AII1
3.424%, 1/25/35(c) 444 443,509
Residential Asset Securities Corp.
Series 2004-KS7 Cl.A2
3.684%, 11/25/32 (c) 189 189,383
Series 2004-KS7 Cl.AI1
3.464%, 10/25/21 (c) 133 132,751
Residential Funding Mortgage
Securities II
Series 2004-HS2 Cl.AI1
3.464%, 12/25/18 (c) 117 117,249
SLM Student Loan Trust
Series 2003-C Cl.A1
3.11%, 9/15/16 (c) 400 400,722
Structured Asset Investment
Loan Trust
Series 2004-5 Cl.A2
3.494%, 5/25/34 (c) 248 248,297
------------
Total Asset Backed Securities
(cost $8,027,924) 8,048,071
------------
NON-AGENCY
COLLATERALIZED
MORTGAGE
OBLIGATIONS-0.6%
Countrywide Home Loans
Series 2003-49 Cl.A1
1.642%, 12/19/33 (c) 98 97,422
Deutsche Mortgage Securities, Inc.
Series 2004-4 Cl.1A1
3.524%, 4/25/34 (c) 21 20,773
Residential Funding Mortgage
Securities II
Series 2005-HI2 Cl. A3
4.46%, 5/25/35 225 225,041
Washington Mutual
Series 2005-AR2 Cl.2A22
3.534%, 2/25/35 (c) 423 422,783
------------
Total Non-Agency Collateralized
Mortgage Obligations
(cost $766,192) 766,019
------------
SOVEREIGN DEBT
OBLIGATIONS-0.6%
Russian Federation
5.00%, 3/31/30 (e)
(cost $689,915) 670 747,988
------------
SHORT-TERM
INVESTMENTS-37.9%
TIME DEPOSIT-3.6 %
The Bank of New York
2.063% 07/01/05 4,370 4,370,000
------------
FEDERAL AGENCIES-34.3%
Federal Home Loan Bank
0.00%, 8/11/05 25,510 25,415,282
Federal Home Loan Mortgage
Corp.
0.00%, 7/14/05-8/31/05 16,120 16,045,752
------------
41,461,034
------------
Total Short-Term Investments
(cost $45,839,644) 45,831,034
------------
TOTAL INVESTMENTS-133.1%
(cost $159,177,994) 161,080,670
Other assets less
liabilities-(33.1%) (40,087,746)
------------
NET ASSETS-100% $120,992,924
============
(a) Securities are exempt from registration under Rule 144A of the Securities
Act of 1933. These securities are considered liquid and may be resold in
transactions exempt from registration, normally to qualified institutional
buyers. At June 30, 2005, the aggregate market value of these securities
amounted to $ 4,058,098 or 3.4 % of net assets.
(b) Variable rate coupon, rate shown as of June 30, 2005.
(c) Floating rate security. Stated interest rate was in effect at June 30,
2005.
(d) The coupon on this security varies along with its rating. For each rating
downgrade by either Moody's or Standard & Poor's, the coupon increases by 25
basis points. The coupon decreases by 25 basis points for each upgrade of its
rating. Minimum coupon is 8.125%. The security is currently rated Baa1/A-.
(e) Coupon increases periodically based upon a predetermined schedule. Stated
interest rate in effect at June 30, 2005.
Glossary of Terms:
TBA - To Be Assigned-Securities are purchased on a forward commitment with
an approximate principal amount (generally +/-1.0%) and no definite maturity
date. The actual principal amount and maturity date will be determined upon
settlement when the specific mortgage pools are assigned.
TIPS - Treasury Inflation Protected Security
See Notes to Financial Statements.
7
U.S. GOVERNMENT/HIGH GRADE
SECURITIES PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2005 (unaudited)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $159,177,994) $161,080,670
Cash 1,774
Receivable for investment securities sold 11,847,746
Interest receivable 784,398
Receivable for capital stock sold 1,089
------------
Total assets 173,715,677
------------
LIABILITIES
Payable for investment securities purchased 52,479,441
Payable for capital stock redeemed 56,518
Advisory fee payable 44,800
Distribution fee payable 5,395
Administrative fee payable 1,216
Transfer agent fee payable 59
Accrued expenses 135,324
------------
Total liabilities 52,722,753
------------
NET ASSETS $120,992,924
============
COMPOSITION OF NET ASSETS
Capital stock, at par $10,234
Additional paid-in capital 116,923,254
Undistributed net investment income 1,836,059
Accumulated net realized gain on investment transactions 320,701
Net unrealized appreciation of investments 1,902,676
------------
$120,992,924
============
CLASS A SHARES
Net assets $94,735,462
============
Shares of capital stock outstanding 8,000,222
============
Net asset value per share $11.84
============
CLASS B SHARES
Net assets $26,257,462
============
Shares of capital stock outstanding 2,234,255
============
Net asset value per share $11.75
============
See Notes to Financial Statements.
8
U.S. GOVERNMENT/HIGH GRADE
SECURITIES PORTFOLIO
STATEMENT OF OPERATIONS
Six Months Ended June 30, 2005 (unaudited)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
INVESTMENT INCOME
Interest $2,325,199
------------
EXPENSES
Advisory fee 277,174
Distribution fee--Class B 32,120
Custodian 78,192
Administrative 36,250
Audit 20,730
Printing 16,578
Legal 2,644
Directors' fees 496
Transfer agency 403
Miscellaneous 3,714
------------
Total expenses 468,301
------------
Net investment income 1,856,898
------------
REALIZED AND UNREALIZED GAIN ON INVESTMENT TRANSACTIONS
Net realized gain on investment transactions 389,152
Net change in unrealized appreciation/depreciation
of investments 280,651
------------
Net gain on investment transactions 669,803
------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $2,526,701
============
See Notes to Financial Statements.
9
U.S. GOVERNMENT/HIGH GRADE
SECURITIES PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 2005 DECEMBER 31,
(UNAUDITED) 2004
=============== ==============
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment income $1,856,898 $3,304,692
Net realized gain on investment transactions 389,152 3,528,992
Net change in unrealized appreciation/
depreciation of investments 280,651 (1,779,525)
--------------- -------------
Net increase in net assets from operations 2,526,701 5,054,159
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM
Net investment income
Class A (2,754,338) (3,152,959)
Class B (705,193) (649,285)
Net realized gain on investment transactions
Class A (2,609,373) (3,170,573)
Class B (726,434) (695,663)
CAPITAL STOCK TRANSACTIONS
Net decrease (3,025,461) (20,274,658)
--------------- -------------
Total decrease (7,294,098) (22,888,979)
NET ASSETS
Beginning of period 128,287,022 151,176,001
--------------- -------------
End of period (including undistributed net
investment income of $1,836,059 and
$3,438,692, respectively) $120,992,924 $128,287,022
=============== ==============
See Notes to Financial Statements.
10
U.S. GOVERNMENT/HIGH GRADE
SECURITIES PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
June 30, 2005 (unaudited)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
NOTE A: SIGNIFICANT ACCOUNTING POLICIES
The AllianceBernstein U.S. Government/High Grade Securities Portfolio (the
"Portfolio") is a series of AllianceBernstein Variable Products Series Fund,
Inc. (the "Fund"). The Portfolio's investment objective is to seek high current
income consistent with preservation of capital. The Fund was incorporated in
the State of Maryland on November 17, 1987, as an open-end series investment
company. The Fund offers twenty-three separately managed pools of assets which
have differing investment objectives and policies. The Portfolio 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.
The Portfolio 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
the Portfolio's net asset value per share.
The financial statements have been prepared in conformity with U.S. generally
accepted accounting principles, which require management to make certain
estimates and assumptions that affect the reported amounts of assets and
liabilities in the financial statements and amounts of income and expenses
during the reporting period. Actual results could differ from those estimates.
Additional information about some of the items discussed in these Notes to
Financial Statements is contained in the Fund's Statement of Additional
Information, which is available upon request. The following is a summary of
significant accounting policies followed by the Portfolio.
1. SECURITY VALUATION
Portfolio securities are valued at their current market value determined on the
basis of market quotations or, if market quotations are not readily available
or are deemed unreliable, at "fair value" as determined in accordance with
procedures established by and under the general supervision of the Fund's Board
of Directors.
In general, the market value of securities which are readily available and
deemed reliable are determined as follows. Securities listed on a national
securities exchange or on a foreign securities exchange are valued at the last
sale price at the close of the exchange or foreign securities exchange. If
there has been no sale on such day, the securities are valued at the mean of
the closing bid and asked prices on such day. Securities listed on more than
one exchange are valued by reference to the principal exchange on which the
securities are traded; securities not listed on an exchange but traded on The
NASDAQ Stock Market, Inc. ("NASDAQ") are valued in accordance with the NASDAQ
Official Closing Price; listed put or call options are valued at the last sale
price. If there has been no sale on that day, such securities will be valued at
the closing bid prices on that day; open futures contracts and options thereon
are valued using the closing settlement price or, in the absence of such a
price, the most recent quoted bid price. If there are no quotations available
for the day of valuation, the last available closing settlement price is used;
securities traded in the over-the-counter market, ("OTC") (but excluding
securities traded on NASDAQ) are valued at the mean of the current bid and
asked prices as reported by the National Quotation Bureau or other comparable
sources; U.S. Government securities and other debt instruments having 60 days
or less remaining until maturity are valued at amortized cost if their original
maturity was 60 days or less; or by amortizing their fair value as of the 61st
day prior to maturity if their original term to maturity exceeded 60 days;
fixed-income securities, including mortgage backed and asset backed securities,
may be valued on the basis of prices provided by a pricing service or at a
price obtained from one or more of the major broker/dealers. In cases where
broker/dealer quotes are obtained, Alliance Capital Management, L.P. (the
"Adviser") may establish procedures whereby changes in market yields or spreads
are used to adjust, on a daily basis, a recently obtained quoted price on a
security; and OTC and other derivatives are valued on the basis of a quoted bid
price or spread from a major broker/dealer in such security.
Securities for which market quotations are not readily available (including
restricted securities) or are deemed unreliable are valued at fair value.
Factors considered in making this determination may include, but are not
limited to, information obtained by contacting the issuer, analysts, analysis
of the issuer's financial statements or other available documents. In addition,
the Fund may use fair value pricing for securities primarily traded in non-U.S.
markets because, most foreign markets close well before the Fund values its
securities at 4:00 p.m., Eastern Time. The earlier close of these foreign
markets gives rise to the possibility that significant events, including broad
market moves, may have occurred in the interim and may materially affect the
value of those securities.
11
U.S. GOVERNMENT/HIGH GRADE
SECURITIES PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(continued)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
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 prices of such currencies against the U.S.
dollar. Purchases and sales of portfolio securities are translated into U.S.
dollars at the rates of exchange prevailing when such securities were acquired
or sold. Income and expenses are translated into U.S. dollars at rates of
exchange prevailing when accrued.
Net realized gain or loss on foreign currency transactions represents foreign
exchange gains and losses from sales and maturities of foreign fixed income
investments, foreign currency exchange contracts, holding of foreign
currencies, currency gains or losses realized between the trade and settlement
dates on foreign investment transactions, and the difference between the
amounts of dividends, interest and foreign withholding taxes recorded on the
Portfolio's books and the U.S. dollar equivalent amounts actually received or
paid. Net unrealized 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 or depreciation of investments
and foreign currency denominated assets and liabilities.
3. TAXES
It is the policy of the Portfolio 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. The Portfolio may be subject to taxes imposed by countries in which
it invests. Such taxes are generally based on income and/or capital gains
earned or repatriated. Taxes are accrued and applied to net investment income,
net realized gains and net unrealized appreciation/depreciation as such income
and/or gains are earned.
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. Investment gains and losses are determined on the identified
cost basis. The Portfolio amortizes premiums and accretes discounts as
adjustments to interest income.
5. INCOME AND EXPENSES
Expenses attributable to a single portfolio are charged to that portfolio.
Expenses of the Fund are charged to each portfolio in proportion to net assets.
All income earned and expenses incurred by a portfolio with multi-class shares
outstanding are borne on a pro-rata basis by each outstanding class of shares,
based on the proportionate interest in the portfolio represented by the net
assets of such class, except that the portfolio's Class B shares bear the
distribution fees.
6. DIVIDENDS AND DISTRIBUTIONS
The Portfolio declares and distributes dividends and distributions from net
investment income and net realized gains, respectively, if any, at least
annually. 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 U.S. generally accepted accounting principles. 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
Until September 6, 2004, under the terms of an investment advisory agreement,
the Portfolio paid the Adviser an advisory fee at an annual rate of .60% of the
Portfolio's average daily net assets. Effective September 7, 2004, the terms of
the investment advisory agreement were amended so that the advisory fee was
reduced to an annual rate of .45% of the first $2.5 billion, .40% of the next
$2.5 billion and .35% in excess of $5 billion, of the Portfolio's average daily
net assets. The fee is accrued daily and paid monthly.
Effective January 1, 2004 through September 6, 2004, in contemplation of the
final agreement with the Office of New York Attorney General ("NYAG"), the
Adviser began waiving a portion of its advisory fee so as to charge the
Portfolio at the reduced annual rate discussed above. For a more complete
discussion of the Adviser's settlement with the NYAG, please see "Legal
Proceedings" below.
12
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
Pursuant to the advisory agreement, the Portfolio paid $36,250 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, 2005.
The Portfolio compensates Alliance Global Investor Services, Inc., a
wholly-owned subsidiary of the Adviser, under a Transfer Agency Agreement for
providing personnel and facilities to perform transfer agency services for the
Portfolio. Such compensation amounted to $403 for the six months ended June 30,
2005.
NOTE C: DISTRIBUTION PLAN
The Portfolio has adopted a Distribution Plan (the "Plan") for Class B shares
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the
Plan, the Portfolio pays distribution and servicing fees to AllianceBernstein
Investment Research and Management, Inc. (the "Distributor"), a wholly-owned
subsidiary of the Adviser, at an annual rate of up to .50% of the 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 limits
payments under the Plan to .25% of the Portfolio's average daily net assets
attributable to Class B shares. The Plan provides that the Distributor will use
such payments in their entirety for distribution assistance and promotional
activities.
The Portfolio is not obligated under the Plan to pay any distribution and
servicing fees in excess of the amounts set forth above. The purpose of the
payments to the Distributor under the Plan is to compensate the Distributor for
its distribution services with respect to the sale of the Portfolio's Class B
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 Plan is
characterized by the staff of the Securities and Exchange Commission as being
of the "compensation" variety.
In the event that the Plan is terminated or not continued, no distribution and
servicing fees (other than current amounts accrued but not yet paid) would be
owed by the Portfolios to the Distributor.
The Plan also provides that the Adviser may use its own resources to finance
the distribution of the Portfolio's shares.
NOTE D: INVESTMENT TRANSACTIONS
Purchases and sales of investment securities (excluding short-term investments)
for the six months ended June 30, 2005, were as follows:
PURCHASES SALES
=============== ==============
Investment securities (excluding U.S.
government securities) $25,591,823 $19,218,088
U.S. government securities 331,371,455 338,307,595
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 $2,190,866
Gross unrealized depreciation (288,190)
Net unrealized appreciation $1,902,676
NOTE E: SECURITIES LENDING
The Portfolio has entered into a securities lending agreement with UBS Warburg
LLC (the "Lending Agent"). Under the terms of the agreement, the Lending Agent,
on behalf of the Portfolio, administers the lending of portfolio securities to
certain broker-dealers. In return, the Portfolio receives fee income from the
lending transactions or it retains a portion of interest on the investment of
any cash received as collateral. The Portfolio also continues to receive
dividends or interest on the securities loaned. Unrealized gain or loss on the
value of the securities loaned that may occur during the term of the loan will
be reflected in the accounts of the Portfolio. All loans are continuously
secured by collateral exceeding the value of the securities loaned. All
collateral consists of either cash or U.S. Government securities. The Lending
Agent invests the cash collateral received in an eligible money market vehicle
in accordance with the investment restrictions of the Portfolio. The Lending
Agent will indemnify the Portfolio for any loss resulting from a borrower's
failure to return a loaned security when due. For the six months ended June 30,
2005, the Portfolio had no securities on loan.
13
U.S. GOVERNMENT/HIGH GRADE
SECURITIES PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(continued)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
NOTE F: CAPITAL STOCK
There are 1,000,000,000 shares of $.001 par value capital stock authorized,
divided into two classes, designated Class A and Class B. Each class consists
of 500,000,000 authorized shares. Transactions in capital stock were as follows:
SHARES AMOUNT
--------------------------- ------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
JUNE 30, 2005 DECEMBER 31, JUNE 30, 2005 DECEMBER 31,
(UNAUDITED) 2004 (UNAUDITED) 2004
------------ ------------ -------------- --------------
CLASS A
Shares sold 191,551 239,148 $2,345,614 $2,928,780
Shares issued in
reinvestment
of dividends and
distributions 453,783 540,011 5,363,710 6,323,532
Shares redeemed (992,981) (2,721,343) (12,163,738) (33,760,737)
------------ ------------ -------------- --------------
Net decrease (347,647) (1,942,184) $(4,454,414) $(24,508,425)
============ ============ ============== ==============
CLASS B
Shares sold 249,585 712,222 $3,042,374 $8,734,874
Shares issued in
reinvestment
of dividends and
distributions 122,048 115,645 1,431,628 1,344,947
Shares redeemed (250,491) (478,061) (3,045,049) (5,846,054)
------------ ------------ -------------- --------------
Net increase 121,142 349,806 $1,428,953 $4,233,767
============ ============ ============== ==============
NOTE G: RISKS INVOLVED IN INVESTING IN THE PORTFOLIO
Interest Rate Risk and Credit Risk--Interest rate risk is the risk that changes
in interest rates will affect the value of the Portfolio's investments in
fixed-income debt securities such as bonds or notes. Increases in interest
rates may cause the value of the Portfolio's investments to decline. Credit
risk is the risk that the issuer or guarantor of a debt security, or the
counterparty to a derivative contract, will be unable or unwilling to make
timely principal and/or interest payments, or to otherwise honor its
obligations. The degree of risk for a particular security may be reflected in
its credit risk rating. Credit risk is greater for medium quality and
lower-rated securities. Lower-rated debt securities and similar unrated
securities (commonly known as "junk bonds") have speculative elements or are
predominantly speculative risks.
Foreign Securities 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.
Indemnification Risk--In the ordinary course of business, the Portfolio enters
into contracts that contain a variety of indemnifications. The Portfolio's
maximum exposure under these arrangements is unknown. However, the Portfolio
has not had prior claims or losses pursuant to these indemnification provisions
and expects the risk of loss thereunder to be remote.
NOTE H: JOINT CREDIT FACILITY
A number of open-end mutual funds managed by the Adviser, including the
Portfolio, participate in a $500 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
Portfolio did not utilize the Facility during the six months ended June 30,
2005.
14
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
NOTE I: DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions to be paid for the year ending December 31,
2005 will be determined at the end of the current fiscal year. The tax
character of distributions paid during the fiscal years ended December 31, 2004
and December 31, 2003 were as follows:
2004 2003
========== ==========
Distributions paid from:
Ordinary income $6,121,986 $6,475,252
Net long-term capital gains 1,546,494 61,109
---------- ----------
Total taxable distributions 7,668,480 6,536,361
---------- ----------
Total distributions paid $7,668,480 $6,536,361
========== ==========
As of December 31, 2004, the components of accumulated earnings/(deficit) on a
tax basis were as follows:
Undistributed ordinary income $5,123,322
Undistributed long-term capital gains 1,607,841
Accumulated capital and other losses -0-(a)
Unrealized appreciation/(depreciation) 1,596,910(b)
Total accumulated earnings/(deficit) $8,328,073
(a) During the current fiscal year, $59,901 of the capital loss carryforward
was utilized.
(b) The difference between book-basis and tax-basis unrealized
appreciation/(depreciation) is attributable primarily to the tax deferral of
losses on wash sales.
NOTE J: LEGAL PROCEEDINGS
As has been previously reported, the staff of the U.S. Securities and Exchange
Commission ("SEC") and the NYAG have been investigating practices in the mutual
fund industry identified as "market timing" and "late trading" of mutual fund
shares. Certain other regulatory authorities have also been conducting
investigations into these practices within the industry and have requested that
the Adviser provide information to them. The Adviser has been cooperating and
will continue to cooperate with all of these authorities.
On December 18, 2003, the Adviser confirmed that it had reached terms with the
SEC and the NYAG for the resolution of regulatory claims relating to the
practice of "market timing" mutual fund shares in some of the AllianceBernstein
Mutual Funds. The agreement with the SEC is reflected in an Order of the
Commission ("SEC Order"). The agreement with the NYAG is memorialized in an
Assurrance of Discontinuance dated September 1, 2004 ("NYAG Order"). Among the
key provisions of these agreements are the following:
(i) The Adviser agreed to establish a $250 million fund (the
"Reimbursement Fund") to compensate mutual fund shareholders for the adverse
effects of market timing attributable to market timing relationships described
in the SEC Order. According to the SEC Order, the Reimbursement Fund is to be
paid, in order of priority, to fund investors based on (i) their aliquot share
of losses suffered by the fund due to market timing, and (ii) a proportionate
share of advisory fees paid by such fund during the period of such market
timing;
(ii) The Adviser agreed to reduce the advisory fees it receives from some
of the AllianceBernstein long-term, open-end retail funds until December 31,
2008; and
(iii) The Adviser agreed to implement changes to its governance and
compliance procedures. Additionally, the SEC Order and the NYAG Order
contemplate that the Adviser's registered investment company clients, including
the Fund, will introduce governance and compliance changes.
In anticipation of final, definitive documentation of the NYAG Order and
effective January 1, 2004, the Adviser began waiving a portion of its advisory
fee. On September 7, 2004, the Fund's investment advisory agreement was amended
to reflect the reduced advisory fee. For more information on this waiver and
amendment to the Fund's investment advisory agreement, please see "Advisory Fee
and Other Transactions with Affiliates" above.
15
U.S. GOVERNMENT/HIGH GRADE
SECURITIES PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(continued)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
A special committee of the Adviser's Board of Directors, comprised of the
members of the Adviser's Audit Committee and the other independent member of
the Adviser's Board, is continuing to direct and oversee an internal
investigation and a comprehensive review of the facts and circumstances
relevant to the SEC's and the NYAG's investigations.
In addition, the Independent Directors of the Fund ("the Independent
Directors") have initiated an investigation of the above-mentioned matters with
the advice of an independent economic consultant and independent counsel. The
Independent Directors have formed a special committee to supervise the
investigation.
On October 2, 2003, a putative class action complaint entitled Hindo et al. v.
Alliancebernstein Growth & Income Fund et al. (the "Hindo Complaint") was filed
against the Adviser; Alliance Capital Management Holding L.P.; Alliance Capital
Management Corporation; AXA Financial, Inc.; certain of the AllianceBernstein
Mutual Funds, including the Fund; Gerald Malone; Charles Schaffran
(collectively, the "Alliance Capital defendants"); and certain other defendants
not affiliated with the Adviser. The Hindo Complaint was filed in the United
States District Court for the Southern District of New York by alleged
shareholders of two of the AllianceBernstein Mutual Funds. The Hindo Complaint
alleges that certain of the Alliance Capital defendants failed to disclose that
they improperly allowed certain hedge funds and other unidentified parties to
engage in late trading and market timing of AllianceBernstein Fund securities,
violating Sections 11 and 15 of the Securities Act, Sections 10(b) and 20(a) of
the Exchange Act, and Sections 206 and 215 of the Advisers Act. Plaintiffs seek
an unspecified amount of compensatory damages and rescission of their contracts
with the Adviser, including recovery of all fees paid to the Adviser pursuant
to such contracts.
Since October 2, 2003, numerous additional lawsuits making factual allegations
similar to those in the Hindo Complaint were filed against the Adviser and
certain other defendants, some of which name the Fund as a defendant. All of
these lawsuits seek an unspecified amount of damages. The lawsuits are now
pending in the United States District Court for the District of Maryland
pursuant to a ruling by the Judicial Panel on Multidistrict Litigation
transferring and centralizing all of the mutual fund cases involving market and
late trading in the District of Maryland.
As a result of the matters discussed above, investors in the AllianceBernstein
Mutual Funds may choose to redeem their investments. This may require the
AllianceBernstein Mutual Funds to sell investments held by those funds to
provide for sufficient liquidity and could also have an adverse effect on the
investment performance of the AllianceBernstein Mutual Funds.
The Adviser and approximately twelve other investment management firms were
publicly mentioned in connection with the settlement by the SEC of charges that
an unaffiliated broker/dealer violated federal securities laws relating to its
receipt of compensation for selling specific mutual funds and the disclosure of
such compensation. The SEC indicated publicly that, among other things, it was
considering enforcement action in connection with mutual funds' disclosure of
such arrangements and in connection with the practice of considering mutual
fund sales in the direction of brokerage commissions from fund portfolio
transactions. The SEC issued subpoenas to the Adviser, and the NASD issued
requests for information in connection with this matter and the Adviser
provided documents and other information to the SEC and NASD and cooperated
fully with the investigations. On June 8, 2005 the NASD announced that it had
reached a settlement with the Distributor in connection with this matter.
Management of the Adviser expects that the settlement has resolved both
regulatory inquiries described above.
On June 22, 2004, a purported class action complaint entitled Aucoin, et al. v.
Alliance Capital Management L.P., et al. ("Aucoin Complaint") was filed against
the Adviser, Alliance Capital Management Holding L.P., Alliance Capital
Management Corporation, AXA Financial, Inc., AllianceBernstein Investment
Research & Management, Inc., certain current and former directors of the
AllianceBernstein Mutual Funds, and unnamed Doe defendants. The Aucoin
Complaint names certain of the AllianceBernstein mutual funds as nominal
defendants. The Aucoin Complaint was filed in the United States District Court
for the Southern District of New York by an alleged shareholder of an
AllianceBernstein mutual fund. The Aucoin Complaint alleges, among other
things, (i) that certain of the defendants improperly authorized the payment of
excessive commissions and other fees from fund assets to broker-dealers in
exchange for preferential marketing services, (ii) that certain of the
defendants misrepresented and omitted from registration statements and other
reports material facts concerning such payments, and (iii) that certain
defendants caused such conduct as control persons of other defendants. The
Aucoin Complaint asserts claims for violation of Sections 34(b), 36(b) and
48(a) of the Investment Company Act, Sections 206 and 215 of the Advisers Act,
breach of common law fiduciary duties, and aiding and abetting breaches of
common law fiduciary duties. Plaintiffs seek an unspecified amount of
compensatory damages and
16
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
punitive damages, rescission of their contracts with the Adviser, including
recovery of all fees paid to the Adviser pursuant to such contracts, an
accounting of all fund-related fees, commissions and soft dollar payments, and
restitution of all unlawfully or discriminatorily obtained fees and expenses.
Since June 22, 2004, numerous additional lawsuits making factual allegations
substantially similar to those in the Aucoin Complaint were filed against the
Adviser and certain other defendants, and others may be filed.
It is possible that these matters and/or other developments resulting from
these matters could result in increased redemptions of the Fund's shares or
other adverse consequences to the Fund. However, the Adviser believes that
these matters are not likely to have a material adverse effect on its ability
to perform advisory services relating to the Fund.
17
U.S. GOVERNMENT/HIGH GRADE
SECURITIES PORTFOLIO
FINANCIAL HIGHLIGHTS
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class A
-----------------------------------------------------------------
Six Months
Ended Year Ended December 31,
June 30, 2005 ---------------------------------------------------------------
(unaudited) 2004 2003 2002 2001(A) 2000
----------- ----------- ----------- ----------- ----------- -----------
Net asset value, beginning of period $12.28 $12.56 $12.54 $12.00 $11.68 $11.18
----------- ----------- ----------- ----------- ----------- -----------
INCOME FROM INVESTMENT OPERATIONS
Net investment income (b) .19 .32(c) .26 .42 .57 .67
Net realized and unrealized gain on
investment transactions .07 .12 .23 .49 .33 .52
----------- ----------- ----------- ----------- ----------- -----------
Net increase in net asset value from
operations .26 .44 .49 .91 .90 1.19
----------- ----------- ----------- ----------- ----------- -----------
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.36) (.36) (.37) (.37) (.58) (.69)
Distributions from net realized gain on
investment transactions (.34) (.36) (.10) -0- -0- -0-
----------- ----------- ----------- ----------- ----------- -----------
Total dividends and distributions (.70) (.72) (.47) (.37) (.58) (.69)
----------- ----------- ----------- ----------- ----------- -----------
Net asset value, end of period $11.84 $12.28 $12.56 $12.54 $12.00 $11.68
=========== =========== =========== =========== =========== ===========
TOTAL RETURN
Total investment return based on
net asset value (d) 2.15% 3.77% 3.88% 7.79% 7.88% 11.08%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $94,736 $102,543 $129,194 $164,265 $104,635 $58,170
Ratio to average net assets of:
Expenses, net of waivers and
reimbursements .71%(e) .68% .77% .82% .89% .95%
Expenses, before waivers and
reimbursements .71%(e) .78% .77% .82% .89% .95%
Net investment income 3.07%(e) 2.46%(c) 2.10% 3.49% 4.86% 5.95%
Portfolio turnover rate 322% 662% 748% 551% 259% 236%
See footnote summary on page 19.
18
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Class B
-----------------------------------------------------------------
Six Months
Ended Year Ended December 31,
June 30, 2005 ---------------------------------------------------------------
(unaudited) 2004 2003 2002 2001(A) 2000
----------- ----------- ----------- ----------- ----------- -----------
Net asset value, beginning of period $12.18 $12.47 $12.47 $11.94 $11.64 $11.16
----------- ----------- ----------- ----------- ----------- -----------
INCOME FROM INVESTMENT OPERATIONS
Net investment income (b) .17 .28(c) .24 .39 .55 .63
Net realized and unrealized gain on
investment transactions .07 .13 .21 .49 .31 .53
----------- ----------- ----------- ----------- ----------- -----------
Net increase in net asset value from
operations .24 .41 .45 .88 .86 1.16
----------- ----------- ----------- ----------- ----------- -----------
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income. (.33) (.34) (.35) (.35) (.56) (.68)
Distributions from net realized gain on
investment transactions (.34) (.36) (.10) -0- -0- -0-
----------- ----------- ----------- ----------- ----------- -----------
Total dividends and distributions (.67) (.70) (.45) (.35) (.56) (.68)
----------- ----------- ----------- ----------- ----------- -----------
Net asset value, end of period $11.75 $12.18 $12.47 $12.47 $11.94 $11.64
=========== =========== =========== =========== =========== ===========
TOTAL RETURN
Total investment return based on
net asset value (d) 2.01% 3.52% 3.61% 7.54% 7.60% 10.84%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $26,257 $25,744 $21,982 $10,602 $7,031 $3,627
Ratio to average net assets of:
Expenses, net of waivers and
reimbursements .96%(e) .93% 1.03% 1.07% 1.14% 1.20%
Expenses, before waivers and
reimbursements .96%(e) 1.03% 1.03% 1.07% 1.14% 1.20%
Net investment income 2.82%(e) 2.19%(c) 1.89% 3.25% 4.61% 5.67%
Portfolio turnover rate 322% 662% 748% 551% 259% 236%
(a) As required, effective January 1, 2001, the Portfolio has adopted the
provisions of the AICPA Audit and Accounting Guide, Audits of Investment
Companies, and began amortizing premium on debt securities. For the year ended
December 31, 2001, the effect of this change to Class A and Class B shares was
to decrease net investment income per share by $.03 and $.03, increase net
realized and unrealized gain on investments per share by $.03 and $.03, and
decrease the ratio of net investment income to average net assets from 5.11% to
4.86% and 4.86% to 4.61%, respectively. Per share, ratios and supplemental data
for periods prior to January 1, 2001 have not been restated to reflect this
change in presentation.
(b) Based on average shares outstanding.
(c) Net of expenses reimbursed or waived by the Adviser.
(d) 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 return does not reflect the
deduction of taxes that a shareholder would pay on Portfolio distributions or
the redemption of Portfolio shares. Total investment return calculated for a
period of less than one year is not annualized.
(e) Annualized.
19
[LOGO] ALLIANCEBERNSTEIN (R)
Investment Research and Management
AllianceBernstein
Variable Products Series Fund, Inc.
Semi-Annual Report
June 30, 2005
> AllianceBernstein Worldwide Privatization Portfolio
SEMI-ANNUAL REPORT
INVESTMENT PRODUCTS OFFERED
> ARE NOT FDIC INSURED
> MAY LOSE VALUE
> ARE NOT BANK GUARANTEED
YOU MAY OBTAIN A DESCRIPTION OF THE FUND'S PROXY VOTING POLICIES AND
PROCEDURES, AND INFORMATION REGARDING HOW THE FUND VOTED PROXIES RELATING TO
PORTFOLIO SECURITIES DURING THE MOST RECENT 12-MONTH PERIOD ENDED JUNE 30,
WITHOUT CHARGE. SIMPLY VISIT THE SECURITIES AND EXCHANGE COMMISSION'S (THE
"COMMISSION") WEB SITE AT WWW.SEC.GOV, OR CALL ALLIANCEBERNSTEIN AT (800)
227-4618.
THE FUND FILES ITS COMPLETE SCHEDULE OF PORTFOLIO HOLDINGS WITH THE COMMISSION
FOR THE FIRST AND THIRD QUARTERS OF EACH FISCAL YEAR ON FORM N-Q. THE FUND'S
FORMS N-Q ARE AVAILABLE ON THE COMMISSION'S WEB SITE AT WWW.SEC.GOV. THE FUND'S
FORMS N-Q MAY ALSO BE REVIEWED AND COPIED AT THE COMMISSION'S PUBLIC REFERENCE
ROOM IN WASHINGTON, DC; INFORMATION ON THE OPERATION OF THE PUBLIC REFERENCE
ROOM MAY BE OBTAINED BY CALLING (800) SEC-0330.
WORLDWIDE PRIVATIZATION PORTFOLIO
FUND EXPENSES
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including sales charges (loads) on purchase payments, contingent
deferred sales charges on redemptions and (2) ongoing costs, including
management fees; distribution (12b-1) fees; and other Fund expenses. This
example is intended to help you understand your ongoing costs (in dollars) of
investing in the Fund and to compare these costs with the ongoing costs of
investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of
the period and held for the entire period as indicated below.
Actual Expenses
The first line of the table below provides information about actual account
values and actual expenses. You may use the information in this line, together
with the amount you invested, to estimate the expenses that you paid over the
period. Simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
in the first line under the heading entitled "Expenses Paid During Period" to
estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio and an assumed annual rate of return of 5% before expenses, which is not
the Fund's actual return. The hypothetical account values and expenses may not
be used to estimate the actual ending account balance or expenses you paid for
the period. You may use this information to compare the ongoing costs of
investing in the Fund and other funds by comparing this 5% hypothetical example
with the 5% hypothetical examples that appear in the shareholder reports of
other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads), or contingent deferred sales charges on redemptions.
Therefore, the second line of the table is useful in comparing ongoing costs
only, and will not help you determine the relative total costs of owning
different funds. In addition, if these transactional costs were included, your
costs would have been higher.
Beginning Ending
Account Value Account Value Expenses Paid Annualized
Worldwide Privatization Portfolio January 1, 2005 June 30, 2005 During Period* Expense Ratio*
- --------------------------------- --------------- ------------- -------------- --------------
Class A
Actual $1,000 $1,021.67 $ 7.07 1.41%
Hypothetical (5% return before expenses) $1,000 $1,017.80 $ 7.05 1.41%
Class B
Actual $1,000 $1,020.39 $ 8.32 1.66%
Hypothetical (5% return before expenses) $1,000 $1,016.56 $ 8.30 1.66%
* Expenses are equal to each classes' annualized expense ratios, multiplied by
the average account value over the period, multiplied by the number of days in
the most recent fiscal half-year/365 (to reflect the one-half year period).
1
WORLDWIDE PRIVATIZATION PORTFOLIO
TEN LARGEST HOLDINGS
June 30, 2005 (unaudited)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
PERCENT OF
COMPANY U.S. $ VALUE NET ASSETS
- -------------------------------------------------------------------------------
Kookmin Bank (Common & ADR) $ 1,465,477 2.5%
Mitsubishi Tokyo Financial Group, Inc. 1,348,737 2.3
BAE Systems Plc 1,341,176 2.3
Veolia Environnement 1,204,578 2.0
America Movil, SA de CV Series L (ADR) 1,186,240 2.0
ING Groep NV 1,159,400 2.0
Total, SA 1,129,503 1.9
National Grid Transco Plc 1,119,728 1.9
Japan Tobacco, Inc. 1,050,245 1.8
Renault, SA 1,049,594 1.8
------------ ------
$ 12,054,678 20.5%
SECTOR DIVERSIFICATION
June 30, 2005 (unaudited)
_______________________________________________________________________________
PERCENT OF
SECTOR U.S. $ VALUE NET ASSETS
- -------------------------------------------------------------------------------
Finance $ 14,403,098 24.5%
Utilities 10,866,453 18.5
Energy 7,091,674 12.1
Consumer Services 6,626,025 11.3
Technology 4,498,643 7.7
Basic Industry 3,278,977 5.6
Healthcare 2,683,315 4.6
Transportation 2,352,477 4.0
Consumer Staples 1,780,236 3.0
Consumer Manufacturing 1,468,541 2.5
Aerospace & Defense 1,341,175 2.3
Multi-Industry Companies 603,595 1.0
Capital Goods 234,608 0.4
------------ ------
Total Investments* 57,228,817 97.5
Cash and receivables, net of liabilities 1,495,456 2.5
------------ ------
Net Assets $ 58,724,273 100.0%
* Excludes short-term investments.
Please Note: The sector classifications presented herein are based on the
sector categorization methodology of the Adviser.
2
WORLDWIDE PRIVATIZATION PORTFOLIO
COUNTRY DIVERSIFICATION
June 30, 2005 (unaudited)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
PERCENT OF
COUNTRY U.S. $ VALUE NET ASSETS
- -------------------------------------------------------------------------------
United Kingdom $ 6,614,760 11.3%
France 6,244,760 10.6
Japan 5,948,763 10.1
Brazil 3,414,535 5.8
Spain 3,395,869 5.8
Taiwan 2,794,117 4.8
Germany 2,516,443 4.3
South Korea 2,288,522 3.9
Russia 2,078,398 3.5
Peoples Republic of China 2,066,089 3.5
Mexico 2,014,445 3.4
South Africa 1,967,206 3.4
India 1,782,704 3.0
Finland 1,773,557 3.0
Italy 1,427,153 2.4
Norway 1,226,693 2.1
Netherlands 1,159,400 2.0
Australia 1,118,098 1.9
Turkey 856,995 1.5
Greece 742,662 1.3
Hungary 678,582 1.2
Israel 657,156 1.1
Luxembourg 555,331 1.0
Other* 3,906,579 6.6
------------ ------
Total Investments** 57,228,817 97.5
Cash and receivables, net of liabilities 1,495,456 2.5
------------ ------
Net Assets $ 58,724,273 100.0%
* The Portfolio's country breakdown is expressed as a percentage of net
assets and may vary over time. "Other" represents less than 1% weightings in
the following countries: Austria, Chile, Egypt, Indonesia, Peru, Philippines,
Poland, Singapore, Sweden, Switzerland and Thailand.
** Excludes short-term investments.
3
WORLDWIDE PRIVATIZATION PORTFOLIO
PORTFOLIO OF INVESTMENTS
June 30, 2005 (unaudited)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
Company Shares U.S. $ Value
- -------------------------------------------------------------------------------
COMMON & PREFERRED STOCKS-97.5%
AUSTRALIA-1.9%
CSL Ltd. 31,027 $793,516
Telestra Corp., Ltd. 84,390 324,582
------------
1,118,098
AUSTRIA-0.8%
Erste Bank der Oesterreichischen
Sparkassen AG 9,735 486,477
BRAZIL-5.8%
Cia Siderurgica Nacional, SA (ADR) 8,200 132,430
Companhia Energetica de Minas Gerais (ADR) 5,700 181,545
Companhia Vale do Rio Doce (ADR) 31,300 869,516
CPFL Energia, SA (ADR) (a) 2,000 47,400
Itausa-Investimentos Itau, SA pfd. (a) 421,732 917,515
Petroleo Brasilerio, SA (ADR) 21,500 989,860
Telesp Celular Participacoes, SA (ADR) (a) 64,700 276,269
------------
3,414,535
CHILE-0.1%
Enersis, SA (ADR) 6,000 62,640
EGYPT-0.9%
Egyptian Co. for Mobile Services 11,918 374,645
Orascom Telecom Holding SAE (GDR) 3,557 180,368
------------
555,013
FINLAND-3.0%
Fortum Oyj 27,791 445,617
Neste Oil Oyj (a) 11,113 287,797
Sampo Oyj 32,393 504,451
TietoEnator Oyj 17,650 535,692
------------
1,773,557
FRANCE-10.6%
BNP Paribas, SA 10,600 723,980
France Telecom, SA 35,500 1,033,125
Renault, SA 11,950 1,049,594
Sanofi-Aventis 10,866 889,905
Societe des Autoroutes Paris-Rhin-Rhone 3,611 214,075
Total, SA 4,827 1,129,503
Veolia Environnement 32,180 1,204,578
------------
6,244,760
GERMANY-4.3%
Deutsche Postbank AG 5,905 289,059
Deutsche Telekom AG 19,836 365,463
Fraport AG 14,790 624,309
Premiere AG (a) 14,212 490,164
Rhon-Klinikum AG 4,336 301,073
SAP AG 2,575 446,375
------------
2,516,443
GREECE-1.3%
Greek Organization of Football Prognostics 16,548 478,086
Public Power Corp. 10,617 264,576
------------
742,662
HUNGARY-1.2%
OTP Bank Rt. 20,054 678,582
INDIA-3.0%
Icici Bank Ltd. 36,743 354,683
Industrial Development Bank of India 208,280 488,900
Oil & Natural Gas, Corp. 19,462 455,693
Punjab National Bank Ltd. 7,391 64,481
Tata Motors Ltd. 42,962 418,947
------------
1,782,704
INDONESIA-0.6%
Telekomunikasi Indonesia 668,000 345,262
ISRAEL-1.1%
Bank Hapoalim Ltd. 209,200 657,156
ITALY-2.4%
Eni S.p.A. 33,588 863,035
Fastweb (a) 7,206 310,728
Terna SpA 97,885 253,390
------------
1,427,153
JAPAN-10.1%
East Japan Railway Co. 184 943,585
Electric Power Development Co., Ltd. 15,700 452,442
Japan Airlines System Corp. 74,000 199,015
Japan Tobacco, Inc. 79 1,050,245
Mitsubishi Tokyo Financial Group, Inc. 160 1,348,737
Nippon Telegraph & Telephone Corp. 127 543,048
Nomura Holdings, Inc. 68,000 807,882
NTT Urban Development Corp. 49 200,116
Sankyo Co., Ltd. 21,100 403,693
------------
5,948,763
4
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
Company Shares U.S. $ Value
- -------------------------------------------------------------------------------
LUXEMBOURG-1.0%
SES Global 37,925 $ 555,331
MEXICO-3.4%
America Movil, SA de CV Series L (ADR) 19,900 1,186,240
Grupo Aeroportuario del Sureste,
SA de CV Series B (ADR) 3,100 98,735
Grupo Financiero Banorte SA de CV Cl.B 27,000 178,370
Telefonos de Mexico, SA de CV Cl.L (ADR) 12,800 241,792
Urbi, Desarrollos Urbanos, SA de C.V. (a) 56,200 309,308
------------
2,014,445
NETHERLANDS-2.0%
ING Groep NV 41,249 1,159,400
NORWAY-2.1%
DNB NOR ASA 42,500 442,001
Norsk Hydro ASA 8,632 784,692
------------
1,226,693
PEOPLES REPUBLIC OF CHINA-3.5%
China Petroleum and Chemical
Corp. (Sinopec) 1,114,000 434,227
China Shenhua Energy Co., Ltd. (a) 544,000 525,029
China Telecommunication Corp. 1,606,000 573,539
CNOOC Ltd. 526,000 311,733
Sinotrans Ltd. 713,000 221,561
------------
2,066,089
PERU-0.4%
Explosivios, SA Cl.C (b) 302,896 234,608
PHILIPPINES-0.5%
Philippine Long Distance Telephone 10,740 312,010
POLAND-0.5%
Polski Koncern Naftowy Orlen, SA 19,700 297,167
RUSSIA-3.5%
AFK Sistema (GDR) (c) 20,144 330,362
AO VimpelCom (ADR) (a) 15,300 520,659
JSC MMC Norilsk Nickel (ADR) 4,981 301,849
Lukoil Holdings (ADR) 8,648 318,073
Mechel Steel Group OAO 10,800 274,320
Mobile Telesystems (ADR) 9,900 333,135
------------
2,078,398
SINGAPORE-0.9%
DBS Group Holdings Ltd. 31,172 263,734
Singapore Airlines Ltd. 39,000 258,688
------------
522,422
SOUTH AFRICA-3.4%
Anglogold Ashanti Ltd. (ADR) 11,803 421,721
FirstRand Ltd. 273,021 568,543
MTN Group Ltd. 106,753 707,940
Telkom South Africa Ltd. 16,722 269,002
------------
1,967,206
SOUTH KOREA-3.9%
Kookmin Bank (a) 15,570 702,696
Kookmin Bank (ADR) 16,735 762,781
KT Freetel Co., Ltd. 12,630 291,003
POSCO 3,055 532,042
------------
2,288,522
SPAIN-5.8%
Altadis, SA 17,147 717,376
Amadeus Global Travel Distribution, SA 38,928 340,112
Banco Bilbao Vizcaya Argentaria, SA 67,017 1,029,705
Indra Sistemas, SA 16,904 333,945
Red Electrica de Espana 14,282 394,827
Telefonica, SA 35,547 579,904
------------
3,395,869
SWEDEN-0.5%
Eniro AB 23,598 268,031
SWITZERLAND-0.5%
Roche Holding AG 2,339 295,128
TAIWAN-4.8%
Advanced Semiconductor
Engineering, Inc. (a) 440,000 327,207
Cathay Financial Holding Co., Ltd. 99,000 198,805
Cathay Financial Holding Co.,
Ltd. (GDR) (a) 31,259 630,807
Chunghwa Telecom Co., Ltd. (ADR) 28,500 610,755
Taiwan Semiconductor Co. 442,503 770,386
Taiwan Semiconductor
Manufacturing Co., Ltd.
(ADR) 28,087 256,157
------------
2,794,117
THAILAND-0.9%
Airports of Thailand 176,500 191,788
PTT Public Co., Ltd. 63,700 336,033
------------
527,821
TURKEY-1.5%
Petkim Petrokimya Holding (a) 50,727 222,070
Turkiye Is Bankasi 109,667 634,925
------------
856,995
5
WORLDWIDE PRIVATIZATION PORTFOLIO
PORTFOLIO OF INVESTMENTS
(continued)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
Company Shares U.S. $ Value
- -------------------------------------------------------------------------------
UNITED KINGDOM-11.3%
02 Plc 376,370 $ 918,790
Associated British Ports Holding Plc 28,420 250,213
BAE Systems Plc 261,764 1,341,176
BP p.l.c. (ADR) 42,140 438,243
British Airways Plc (a) 111,178 521,653
British American Tobacco Plc 655 12,615
Capita Group Plc 60,518 397,909
Centrica Plc 140,609 582,259
National Grid Transco Plc 115,853 1,119,728
Tesco Plc 73,788 420,372
Vodafone Group Plc 204,985 498,371
Wolfson Microelectronics Plc (a) 40,779 113,431
------------
6,614,760
Total Common & Preferred Stocks
(cost $42,661,538) 57,228,817
Principal
Amount
Company (000) U.S. $ Value
- -------------------------------------------------------------------------------
SHORT-TERM INVESTMENT -1.7%
TIME DEPOSIT-1.7%
The Bank of New York
2.063% 07/01/05
(cost $1,002,000) $ 1,002 $ 1,002,000
TOTAL INVESTMENTS-99.2%
(cost $43,663,538) 58,230,817
Other assets less liabilities-0.8% 493,456
NET ASSETS-100% $ 58,724,273
(a) Non-income producing security.
(b) Illiquid security, valued at fair value.
(c) Security is exempt from registration under Rule 144A of the Securities Act
of 1933. This security is considered liquid and may be resold in transactions
exempt from registration, normally to qualified institutional buyers. At June
30, 2005, the aggregate market value of this security amounted to $330,362 or
0.6% of net assets.
Glossary of Terms:
ADR - American Depositary Receipt
GDR - Global Depositary Receipt
pfd. - Preferred Stock
See Notes to Financial Statements.
6
WORLDWIDE PRIVATIZATION PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2005 (unaudited)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $43,663,538) $ 58,230,817
Cash 1,278
Foreign cash, at value (cost $225,370) 226,503
Receivable for investment securities sold 239,302
Dividends and interest receivable 172,862
Receivable for capital stock sold 20,154
Total assets 58,890,916
LIABILITIES
Advisory fee payable 35,862
Payable for capital stock redeemed 29,368
Foreign capital gain tax payable 10,568
Distribution fee payable 3,843
Administrative fee payable 1,215
Transfer agent fee payable 59
Accrued expenses 85,728
Total liabilities 166,643
NET ASSETS $ 58,724,273
COMPOSITION OF NET ASSETS
Capital stock, at par $ 2,865
Additional paid-in capital 46,053,051
Undistributed net investment income 650,303
Accumulated net realized loss on investment and foreign
currency transactions (2,575,454)
Net unrealized appreciation of investments and foreign
currency denominated assets and liabilities 14,593,508
$ 58,724,273
Class A Shares
Net assets $ 39,840,129
Shares of capital stock outstanding 1,941,258
Net asset value per share $ 20.52
Class B Shares
Net assets $ 18,884,144
Shares of capital stock outstanding 923,355
Net asset value per share $ 20.45
See Notes to Financial Statements.
7
WORLDWIDE PRIVATIZATION PORTFOLIO
STATEMENT OF OPERATIONS
Six Months Ended June 30, 2005 (unaudited)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
INVESTMENT INCOME
Dividends (net of foreign taxes withheld of $121,546) $ 1,057,780
Interest 16,483
Total investment income 1,074,263
EXPENSES
Advisory fee 211,537
Distribution fee--Class B 20,907
Custodian 94,918
Administrative 36,250
Printing 25,350
Audit 20,730
Legal 1,036
Directors' fees 496
Transfer agency 403
Miscellaneous 6,354
Total expenses 417,981
Net investment income 656,282
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENT AND
FOREIGN CURRENCY TRANSACTIONS
Net realized gain (loss) on:
Investment transactions 1,994,468
Foreign currency transactions (151,051)
Net change in unrealized appreciation/depreciation of:
Investments (1,362,762)
Foreign currency denominated assets and liabilities (6,040)
Net gain on investment and foreign currency transactions 474,615
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 1,130,897
See Notes to Financial Statements.
8
WORLDWIDE PRIVATIZATION PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
Six Months Ended Year Ended
June 30, 2005 December 31,
(unaudited) 2004
--------------- ---------------
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS
Net investment income $ 656,282 $ 265,989
Net realized gain on investment and
foreign currency transactions 1,843,417 3,873,526
Net change in unrealized
appreciation/depreciation of
investments and foreign currency
denominated assets and liabilities (1,368,802) 6,357,878
Net increase in net assets from
operations 1,130,897 10,497,393
DIVIDENDS TO SHAREHOLDERS FROM
Net investment income
Class A (185,286) (80,328)
Class B (63,431) (10,540)
CAPITAL STOCK TRANSACTIONS
Net increase 2,143,622 3,613,557
Total increase 3,025,802 14,020,082
NET ASSETS
Beginning of period 55,698,471 41,678,389
End of period (including undistributed
net investment income of $650,303 and
$242,738, respectively) $ 58,724,273 $ 55,698,471
See Notes to Financial Statements.
9
WORLDWIDE PRIVATIZATION PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
June 30, 2005 (unaudited)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
NOTE A: Significant Accounting Policies
The AllianceBernstein Worldwide Privatization Portfolio (the "Portfolio") is a
series of AllianceBernstein Variable Products Series Fund, Inc. (the "Fund").
The Portfolio's investment objective is to seek long-term capital appreciation.
The Fund was incorporated in the State of Maryland on November 17, 1987, as an
open-end series investment company. The Fund offers twenty-three separately
managed pools of assets which have differing investment objectives and
policies. The Portfolio 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.
The Portfolio 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
the Portfolio's net asset value per share.
The financial statements have been prepared in conformity with U.S. generally
accepted accounting principles, which require management to make certain
estimates and assumptions that affect the reported amounts of assets and
liabilities in the financial statements and amounts of income and expenses
during the reporting period. Actual results could differ from those estimates.
Additional information about some of the items discussed in these Notes to
Financial Statements is contained in the Fund's Statement of Additional
Information, which is available upon request. The following is a summary of
significant accounting policies followed by the Portfolio.
1. Security Valuation
Portfolio securities are valued at their current market value determined on the
basis of market quotations or, if market quotations are not readily available
or are deemed unreliable, at "fair value" as determined in accordance with
procedures established by and under the general supervision of the Fund's Board
of Directors.
In general, the market value of securities which are readily available and
deemed reliable are determined as follows. Securities listed on a national
securities exchange or on a foreign securities exchange are valued at the last
sale price at the close of the exchange or foreign securities exchange. If
there has been no sale on such day, the securities are valued at the mean of
the closing bid and asked prices on such day. Securities listed on more than
one exchange are valued by reference to the principal exchange on which the
securities are traded; securities not listed on an exchange but traded on The
NASDAQ Stock Market, Inc. ("NASDAQ") are valued in accordance with the NASDAQ
Official Closing Price; listed put or call options are valued at the last sale
price. If there has been no sale on that day, such securities will be valued at
the closing bid prices on that day; open futures contracts and options thereon
are valued using the closing settlement price or, in the absence of such a
price, the most recent quoted bid price. If there are no quotations available
for the day of valuation, the last available closing settlement price is used;
securities traded in the over-the-counter market, ("OTC") (but excluding
securities traded on NASDAQ) are valued at the mean of the current bid and
asked prices as reported by the National Quotation Bureau or other comparable
sources; U.S. Government securities and other debt instruments having 60 days
or less remaining until maturity are valued at amortized cost if their original
maturity was 60 days or less; or by amortizing their fair value as of the 61st
day prior to maturity if their original term to maturity exceeded 60 days;
fixed-income securities, including mortgage backed and asset backed securities,
may be valued on the basis of prices provided by a pricing service or at a
price obtained from one or more of the major broker/dealers. In cases where
broker/dealer quotes are obtained, Alliance Capital Management, L.P. (the
"Adviser") may establish procedures whereby changes in market yields or spreads
are used to adjust, on a daily basis, a recently obtained quoted price on a
security; and OTC and other derivatives are valued on the basis of a quoted bid
price or spread from a major broker/dealer in such security.
Securities for which market quotations are not readily available (including
restricted securities) or are deemed unreliable are valued at fair value.
Factors considered in making this determination may include, but are not
limited to, information obtained by contacting the issuer, analysts, analysis
of the issuer's financial statements or other available documents. In addition,
the Fund may use fair value pricing for securities primarily traded in non-U.S.
markets because, most foreign markets close well before the Fund values its
securities at 4:00 p.m., Eastern Time. The earlier close of these foreign
markets gives rise to the possibility that significant events, including broad
market moves, may have occurred in the interim and may materially affect the
value of those securities. To account for this, the Fund may frequently value
many of its foreign equity securities using fair value prices based on third
party vendor modeling tools to the extent available.
10
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
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 prices of such currencies against the U.S.
dollar. Purchases and sales of portfolio securities are translated into U.S.
dollars at the rates of exchange prevailing when such securities were acquired
or sold. Income and expenses are translated into U.S. dollars at rates of
exchange prevailing when accrued.
Net realized gain or loss on foreign currency transactions represents foreign
exchange gains and losses from sales and maturities of foreign fixed income
investments, foreign currency exchange contracts, holding of foreign
currencies, currency gains or losses realized between the trade and settlement
dates on foreign investment transactions and the difference between the amounts
of dividends, interest and foreign withholding taxes recorded on the
Portfolio's books and the U.S. dollar equivalent amounts actually received or
paid. Net unrealized 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 or depreciation of investments
and foreign currency denominated assets and liabilities.
3. Taxes
It is the policy of the Portfolio 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. The Portfolio may be subject to taxes imposed by countries in which
it invests. Such taxes are generally based on income and/or capital gains
earned or repatriated. Taxes are accrued and applied to net investment income,
net realized gains and net unrealized appreciation/depreciation as such income
and/or gains are earned.
4. Investment Income and Investment Transactions
Dividend income is recorded on the ex-dividend date or as soon as the Portfolio
is informed of the dividend. Interest income is accrued daily. Investment
transactions are accounted for on the trade date securities are purchased or
sold. Investment gains and losses are determined on the identified cost basis.
The Portfolio amortizes premiums and accretes discounts as adjustments to
interest income.
5. Income and Expenses
Expenses attributable to a single portfolio are charged to that portfolio.
Expenses of the Fund are charged to each portfolio in proportion to net assets.
All income earned and expenses incurred by a portfolio with multi-class shares
outstanding are borne on a pro-rata basis by each outstanding class of shares,
based on the proportionate interest in the portfolio represented by the net
assets of such class, except that the portfolio's Class B shares bear the
distribution fees.
6. Dividends and Distributions
The Portfolio declares and distributes dividends and distributions from net
investment income and net realized gains, respectively, if any, at least
annually. 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 U.S. generally accepted accounting principles. 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
Until September 6, 2004, under the terms of an investment advisory agreement,
the Portfolio paid the Adviser an advisory fee at an annual rate of 1% of the
Portfolio's average daily net assets. Effective September 7, 2004, the terms of
the investment advisory agreement were amended so that the advisory fee was
reduced to an annual rate of .75% of the first $2.5 billion, .65% of the next
$2.5 billion and .60% in excess of $5 billion, of the Portfolio's average daily
net assets. The fee is accrued daily and paid monthly.
Effective January 1, 2004 through September 6, 2004, in contemplation of the
final agreement with the Office of New York Attorney General ("NYAG"), the
Adviser began waiving a portion of its advisory fee so as to charge the
Portfolio at the reduced annual rate discussed above. For a more complete
discussion of the Adviser's settlement with the NYAG, please see "Legal
Proceedings" below.
11
WORLDWIDE PRIVATIZATION PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(continued)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
Pursuant to the advisory agreement, the Portfolio paid $36,250 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, 2005.
Brokerage commissions paid on investment transactions for the six months ended
June 30, 2005, amounted to $68,214, none of which was paid to Sanford C.
Bernstein &Co. LLC and Sanford C. Bernstein Limited, affiliates of the Adviser.
The Portfolio compensates Alliance Global Investor Services, Inc. (AGIS), a
wholly-owned subsidiary of the Adviser, under a Transfer Agency Agreement for
providing personnel and facilities to perform transfer agency services for the
Portfolio. Such compensation amounted to $403 for the six months ended June 30,
2005.
NOTE C: Distribution Plan
The Portfolio has adopted a Distribution Plan (the "Plan") for Class B shares
pursuant to Rule 12B-1 under the Investment Company Act of 1940. Under the Plan
the Portfolio pays distribution and servicing fees to AllianceBernstein
Investment Research and Management, Inc. (the "Distributor"), a wholly-owned
subsidiary of the Adviser, at an annual rate of up to .50% of the 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 limits
payments under the Plan to .25% of the Portfolio's average daily net assets
attributable to Class B shares. The Plan provides that the Distributor will use
such payments in their entirety for distribution assistance and promotional
activities.
The Portfolio is not obligated under the Plan to pay any distribution and
servicing fees in excess of the amounts set forth above. The purpose of the
payments to the Distributor under the Plan is to compensate the Distributor for
its distribution services with respect to the sale of the Portfolio's Class B
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 Plan is
characterized by the staff of the Securities and Exchange Commission as being
of the "compensation" variety.
In the event that the Plan is terminated or not continued, no distribution and
servicing fees (other than current amounts accrued but not yet paid) would be
owed by the Portfolio to the Distributor.
The Plan also provides that the Adviser may use its own resources to finance
the distribution of the Portfolio's shares.
NOTE D: Investment Transactions
Purchases and sales of investment securities (excluding short-term investments)
for the six months ended June 30, 2005, were as follows:
Purchases Sales
------------- -------------
Investment securities (excluding U.S.
government securities) $14,113,154 $10,064,695
U.S. government securities -0- -0-
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 $15,324,378
Gross unrealized depreciation (757,099)
Net unrealized appreciation $14,567,279
1. Forward Exchange Currency Contracts
The Portfolio may enter into forward exchange currency contracts in order to
hedge its exposure to changes in foreign currency exchange rates on its 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 on a future date at a negotiated forward rate. The gain or loss
arising from the difference between the original contract and the closing of
such contract would be included in net realized gain or loss on foreign
currency transactions.
12
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
Fluctuations in the value of open forward exchange currency contracts are
recorded for financial reporting purposes as unrealized appreciation and
depreciation by the Portfolio.
The Portfolio's custodian will place and maintain cash not available for
investment or other liquid assets in a separate account of the Portfolio having
a value at least equal to the aggregate amount of the Portfolio's commitments
under forward exchange currency contracts entered into with respect to position
hedges.
Risks may arise from the potential inability of the 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 the Portfolio has in that particular
currency contract.
2. Option Transactions
For hedging and investment purposes, the Portfolio may purchase and write
(sell) put and call options on U.S. and foreign government securities and
foreign currencies that are traded on U.S. and foreign 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 written options which
expire unexercised are recorded by the Portfolio on the expiration date as
realized gains from options written. 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. If a
put option is exercised, the premium received reduces the cost basis of the
security or currency purchased by the Portfolio. 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.
NOTE E: Securities Lending
The Portfolio has entered into a securities lending agreement with UBS Warburg
LLC (the "Lending Agent"). Under the terms of the agreement, the Lending Agent,
on behalf of the Portfolio, administers the lending of portfolio securities to
certain broker-dealers. In return, the Portfolio receives fee income from the
lending transactions or it retains a portion of interest on the investment of
any cash received as collateral. The Portfolio also continues to receive
dividends or interest on the securities loaned. Unrealized gain or loss on the
value of the securities loaned that may occur during the term of the loan will
be reflected in the accounts of the Portfolio. All loans are continuously
secured by collateral exceeding the value of the securities loaned. All
collateral consists of either cash or U.S. government securities. The Lending
Agent invests the cash collateral received in an eligible money market vehicle
in accordance with the investment restrictions of the Portfolio. The Lending
Agent will indemnify the Portfolio for any loss resulting from a borrower's
failure to return a loaned security when due. For the six months ended June 30,
2005, the Portfolio had no securities on loan.
13
WORLDWIDE PRIVATIZATION PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(continued)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
NOTE F: Capital Stock
There are 1,000,000,000 shares of $.001 par value capital stock authorized,
divided into two classes, designated Class A and Class B shares. Each class
consists of 500,000,000 authorized shares. Transactions in capital stock were
as follows:
SHARES AMOUNT
--------------------------- ------------------------------
Six Months Ended Year Ended Six Months Ended Year Ended
June 30, 2005 December 31, June 30, 2005 December 31,
(unaudited) 2004 (unaudited) 2004
------------ ------------ -------------- --------------
Class A
Shares sold 152,107 463,506 $ 3,110,073 $ 8,099,441
Shares issued in
reinvestment
of dividends 9,159 4,857 185,286 80,327
Shares redeemed (261,084) (534,726) (5,250,701) (9,095,169)
Net decrease (99,818) (66,363) $ (1,955,342) $ (915,401)
Class B
Shares sold 288,312 412,639 $ 5,834,350 $ 7,077,333
Shares issued in
reinvestment
of dividends 3,146 639 63,431 10,540
Shares redeemed (89,058) (146,584) (1,798,817) (2,558,915)
Net increase 202,400 266,694 $ 4,098,964 $ 4,528,958
NOTE G: Risks Involved in Investing in the Portfolio
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.
Indemnification Risk--In the ordinary course of business, the Portfolio enters
into contracts that contain a variety of indemnifications. The Portfolio's
maximum exposure under these arrangements is unknown. However, the Portfolio
has not had prior claims or losses pursuant to these indemnification provisions
and expects the risk of loss thereunder to be remote.
NOTE H: Joint Credit Facility
A number of open-end mutual funds managed by the Adviser, including the
Portfolio, participate in a $500 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
Portfolio did not utilize the Facility during the six months ended June 30,
2005.
NOTE I: Distributions to Shareholders
The tax character of distributions to be paid for the year ending December 31,
2005 will be determined at the end of the current fiscal year. The tax
character of distributions paid during the fiscal years ended December 31, 2004
and December 31, 2003 were as follows:
2004 2003
--------- ---------
Distributions paid from:
Ordinary income $ 90,868 $ 364,814
Total taxable distributions 90,868 364,814
Total distributions paid $ 90,868 $ 364,814
14
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
As of December 31, 2004, the components of accumulated earnings/(deficit) on a
tax basis were as follows:
Undistributed ordinary income $ 242,738
Accumulated capital and other losses (4,331,381)(a)
Unrealized appreciation/(depreciation) 15,874,820(b)
Total accumulated earnings/(deficit) $ 11,786,177
(a) On December 31, 2004, the Portfolio had a net capital loss carryforward of
$4,331,381, all of which expires in the year 2010. To the extent future capital
gains are offset by capital loss carryforwards, such gains will not be
distributed. During the fiscal year, the fund utilized capital loss
carryforwards of $3,908,914.
(b) The difference between book-basis and tax-basis unrealized appreciation/
(depreciation) is attributable primarily to the tax deferral of losses on wash
sales.
NOTE J: Legal Proceedings
As has been previously reported, the staff of the U.S. Securities and Exchange
Commission ("SEC") and the NYAG have been investigating practices in the mutual
fund industry identified as "market timing" and "late trading" of mutual fund
shares. Certain other regulatory authorities have also been conducting
investigations into these practices within the industry and have requested that
the Adviser provide information to them. The Adviser has been cooperating and
will continue to cooperate with all of these authorities.
On December 18, 2003, the Adviser confirmed that it had reached terms with the
SEC and the NYAG for the resolution of regulatory claims relating to the
practice of "market timing" mutual fund shares in some of the AllianceBernstein
Mutual Funds. The agreement with the SEC is reflected in an Order of the
Commission ("SEC Order"). The agreement with the NYAG is memorialized in an
Assurrance of Discontinuance dated September 1, 2004 ("NYAG Order"). Among the
key provisions of these agreements are the following:
(i) The Adviser agreed to establish a $250 million fund (the
"Reimbursement Fund") to compensate mutual fund shareholders for the adverse
effects of market timing attributable to market timing relationships described
in the SEC Order. According to the SEC Order, the Reimbursement Fund is to be
paid, in order of priority, to fund investors based on (i) their aliquot share
of losses suffered by the fund due to market timing, and (ii) a proportionate
share of advisory fees paid by such fund during the period of such market
timing;
(ii) The Adviser agreed to reduce the advisory fees it receives from
some of the AllianceBernstein long-term, open-end retail funds until December
31, 2008; and
(iii) The Adviser agreed to implement changes to its governance and
compliance procedures. Additionally, the SEC Order and the NYAG Order
contemplate that the Adviser's registered investment company clients, including
the Fund, will introduce governance and compliance changes.
In anticipation of final, definitive documentation of the NYAG Order and
effective January 1, 2004, the Adviser began waiving a portion of its advisory
fee. On September 7, 2004, the Fund's investment advisory agreement was amended
to reflect the reduced advisory fee. For more information on this waiver and
amendment to the Fund's investment advisory agreement, please see "Advisory Fee
and Other Transactions with Affiliates" above.
A special committee of the Adviser's Board of Directors, comprised of the
members of the Adviser's Audit Committee and the other independent member of
the Adviser's Board, is continuing to direct and oversee an internal
investigation and a comprehensive review of the facts and circumstances
relevant to the SEC's and the NYAG's investigations.
In addition, the Independent Directors of the Fund ("the Independent
Directors") have initiated an investigation of the above-mentioned matters with
the advice of an independent economic consultant and independent counsel. The
Independent Directors have formed a special committee to supervise the
investigation.
On October 2, 2003, a putative class action complaint entitled HINDO ET AL. V.
ALLIANCEBERNSTEIN GROWTH & INCOME FUND ET AL. (the "Hindo Complaint") was filed
against the Adviser; Alliance Capital Management Holding L.P.; Alliance Capital
Management Corporation; AXA Financial, Inc.; certain of the AllianceBernstein
Mutual Funds, including the Fund; Gerald Malone; Charles Schaffran
(collectively, the "Alliance Capital defendants"); and certain other defendants
not affiliated with the Adviser. The Hindo Complaint was filed in the United
States District Court for the Southern District of
15
WORLDWIDE PRIVATIZATION PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(continued)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
New York by alleged shareholders of two of the AllianceBernstein Mutual Funds.
The Hindo Complaint alleges that certain of the Alliance Capital defendants
failed to disclose that they improperly allowed certain hedge funds and other
unidentified parties to engage in late trading and market timing of
AllianceBernstein Fund securities, violating Sections 11 and 15 of the
Securities Act, Sections 10(b) and 20(a) of the Exchange Act, and Sections 206
and 215 of the Advisers Act. Plaintiffs seek an unspecified amount of
compensatory damages and rescission of their contracts with the Adviser,
including recovery of all fees paid to the Adviser pursuant to such contracts.
Since October 2, 2003, numerous additional lawsuits making factual allegations
similar to those in the Hindo Complaint were filed against the Adviser and
certain other defendants, some of which name the Fund as a defendant. All of
these lawsuits seek an unspecified amount of damages. The lawsuits are now
pending in the United States District Court for the District of Maryland
pursuant to a ruling by the Judicial Panel on Multidistrict Litigation
transferring and centralizing all of the mutual fund cases involving market and
late trading in the District of Maryland.
As a result of the matters discussed above, investors in the AllianceBernstein
Mutual Funds may choose to redeem their investments. This may require the
AllianceBernstein Mutual Funds to sell investments held by those funds to
provide for sufficient liquidity and could also have an adverse effect on the
investment performance of the AllianceBernstein Mutual Funds.
The Adviser and approximately twelve other investment management firms were
publicly mentioned in connection with the settlement by the SEC of charges that
an unaffiliated broker/dealer violated federal securities laws relating to its
receipt of compensation for selling specific mutual funds and the disclosure of
such compensation. The SEC indicated publicly that, among other things, it was
considering enforcement action in connection with mutual funds' disclosure of
such arrangements and in connection with the practice of considering mutual
fund sales in the direction of brokerage commissions from fund portfolio
transactions. The SEC issued subpoenas to the Adviser, and the NASD issued
requests for information in connection with this matter and the Adviser
provided documents and other information to the SEC and NASD and cooperated
fully with the investigations. On June 8, 2005 the NASD announced that it had
reached a settlement with the Distributor in connection with this matter.
Management of the Adviser expects that the settlement has resolved both
regulatory inquiries described above.
On June 22, 2004, a purported class action complaint entitled AUCOIN, ET AL. V.
ALLIANCE CAPITAL MANAGEMENT L.P., ET AL. ("Aucoin Complaint") was filed against
the Adviser, Alliance Capital Management Holding L.P., Alliance Capital
Management Corporation, AXA Financial, Inc., AllianceBernstein Investment
Research & Management, Inc., certain current and former directors of the
AllianceBernstein Mutual Funds, and unnamed Doe defendants. The Aucoin
Complaint names certain of the AllianceBernstein mutual funds as nominal
defendants. The Aucoin Complaint was filed in the United States District Court
for the Southern District of New York by an alleged shareholder of an
AllianceBernstein mutual fund. The Aucoin Complaint alleges, among other
things, (i) that certain of the defendants improperly authorized the payment of
excessive commissions and other fees from fund assets to broker-dealers in
exchange for preferential marketing services, (ii) that certain of the
defendants misrepresented and omitted from registration statements and other
reports material facts concerning such payments, and (iii) that certain
defendants caused such conduct as control persons of other defendants. The
Aucoin Complaint asserts claims for violation of Sections 34(b), 36(b) and
48(a) of the Investment Company Act, Sections 206 and 215 of the Advisers Act,
breach of common law fiduciary duties, and aiding and abetting breaches of
common law fiduciary duties. Plaintiffs seek an unspecified amount of
compensatory damages and punitive damages, rescission of their contracts with
the Adviser, including recovery of all fees paid to the Adviser pursuant to
such contracts, an accounting of all fund-related fees, commissions and soft
dollar payments, and restitution of all unlawfully or discriminatorily obtained
fees and expenses.
Since June 22, 2004, numerous additional lawsuits making factual allegations
substantially similar to those in the Aucoin Complaint were filed against the
Adviser and certain other defendants, and others may be filed.
It is possible that these matters and/or other developments resulting from
these matters could result in increased redemptions of the Fund's shares or
other adverse consequences to the Fund. However, the Adviser believes that
these matters are not likely to have a material adverse effect on its ability
to perform advisory services relating to the Fund.
16
WORLDWIDE PRIVATIZATION PORTFOLIO
FINANCIAL HIGHLIGHTS
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
CLASS A
----------------------------------------------------------------------------
Six Months
Ended Year Ended December 31,
June 30, 2005 ---------------------------------------------------------------
(unaudited) 2004 2003 2002 2001 2000
----------- ----------- ----------- ----------- ----------- -----------
Net asset value, beginning of period $20.18 $16.28 $11.48 $12.18 $15.64 $21.74
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a) .24 .11(b) .04 .07(b) .20(b) .05(b)
Net realized and unrealized gain (loss)
on investment and foreign
currency transactions .20 3.83 4.91 (.56) (2.82) (4.81)
Net increase (decrease) in net asset
value from operations .44 3.94 4.95 (.49) (2.62) (4.76)
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.10) (.04) (.15) (.21) (.03) (.12)
Distributions from net realized gain on
investment transactions -0- -0- -0- -0- (.81) (1.22)
Total dividends and distributions (.10) (.04) (.15) (.21) (.84) (1.34)
Net asset value, end of period $20.52 $20.18 $16.28 $11.48 $12.18 $15.64
TOTAL RETURN
Total investment return based on
net asset value (c) 2.17% 24.27% 43.46% (4.19)% (17.29)% (23.00)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $39,840 $41,198 $34,302 $27,136 $37,411 $56,181
Ratio to average net assets of:
Expenses, net of waivers and
reimbursements 1.41%(d) 1.65% 2.17% 1.54% .95% .95%
Expenses, before waivers and
reimbursements 1.41%(d) 1.81% 2.17% 1.98% 1.65% 1.43%
Net investment income 2.35%(d) .65%(b) .34% .61%(b) 1.50%(b) .29%(b)
Portfolio turnover rate 18% 60% 44% 46% 35% 65%
See footnote summary on page 18.
17
WORLDWIDE PRIVATIZATION PORTFOLIO
FINANCIAL HIGHLIGHTS
(continued)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
CLASS B
----------------------------------------------------------------------------
Six Months July 5, 2000(e)
Ended Year Ended December 31, to
June 30, 2005 -------------------------------------------------- December 31,
(unaudited) 2004 2003 2002 2001 2000
----------- ----------- ----------- ----------- ----------- -----------
Net asset value, beginning of period $20.11 $16.24 $11.47 $12.17 $15.62 $19.09
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (a) .23 .07(b) .02 .03(b) .10(b) (.04)(b)
Net realized and unrealized gain (loss)
on investment and foreign
currency transactions .18 3.82 4.88 (.53) (2.71) (3.43)
Net increase (decrease) in net asset
value from operations .41 3.89 4.90 (.50) (2.61) (3.47)
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.07) (.02) (.13) (.20) (.03) -0-
Distributions from net realized gain on
investment transactions -0- -0- -0- -0- (.81) -0-
Total dividends and distributions (.07) (.02) (.13) (.20) (.84) -0-
Net asset value, end of period $20.45 $20.11 $16.24 $11.47 $12.17 $15.62
TOTAL RETURN
Total investment return based on
net asset value (c) 2.04% 23.97% 43.07% (4.26)% (17.28)% (18.43)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $18,884 $14,501 $7,376 $3,609 $1,092 $238
Ratio to average net assets of:
Expenses, net of waivers and
reimbursements 1.66%(d) 1.90% 2.41% 1.79% 1.19% 1.20%(d)
Expenses, before waivers and
reimbursements 1.66%(d) 2.06% 2.41% 2.23% 1.93% 1.80%(d)
Net investment income (loss) 2.27%(d) .41%(b) .13% .28%(b) .80%(b) (.26)%(b)(d)
Portfolio turnover rate 18% 60% 44% 46% 35% 65%
(a) Based on average shares outstanding.
(b) Net of expenses waived or reimbursed 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 return does not reflect the
deduction of taxes that a shareholder would pay on Portfolio distributions or
the redemption of Portfolio shares. Total investment return calculated for a
period of less than one year is not annualized.
(d) Annualized.
(e) Commencement of distribution.
18
[LOGO] ALLIANCEBERNSTEIN (R)
Investment Research and Management
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND, INC.
> ALLIANCEBERNSTEIN REAL ESTATE INVESTMENT PORTFOLIO
JUNE 30, 2005
SEMI-ANNUAL REPORT
INVESTMENT PRODUCTS OFFERED
> ARE NOT FDIC INSURED
> MAY LOSE VALUE
> ARE NOT BANK GUARANTEED
YOU MAY OBTAIN A DESCRIPTION OF THE FUND'S PROXY VOTING POLICIES AND
PROCEDURES, AND INFORMATION REGARDING HOW THE FUND VOTED PROXIES RELATING TO
PORTFOLIO SECURITIES DURING THE MOST RECENT 12-MONTH PERIOD ENDED JUNE 30,
WITHOUT CHARGE. SIMPLY VISIT THE SECURITIES AND EXCHANGE COMMISSION'S (THE
"COMMISSION") WEB SITE AT WWW.SEC.GOV, OR CALL ALLIANCEBERNSTEIN AT (800)
227-4618.
THE FUND FILES ITS COMPLETE SCHEDULE OF PORTFOLIO HOLDINGS WITH THE COMMISSION
FOR THE FIRST AND THIRD QUARTERS OF EACH FISCAL YEAR ON FORM N-Q. THE FUND'S
FORMS N-Q ARE AVAILABLE ON THE COMMISSION'S WEB SITE AT WWW.SEC.GOV. THE FUND'S
FORMS N-Q MAY ALSO BE REVIEWED AND COPIED AT THE COMMISSION'S PUBLIC REFERENCE
ROOM IN WASHINGTON, DC; INFORMATION ON THE OPERATION OF THE PUBLIC REFERENCE
ROOM MAY BE OBTAINED BY CALLING (800) SEC-0330.
REAL ESTATE INVESTMENT PORTFOLIO
FUND EXPENSES
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including sales charges (loads) on purchase payments, contingent
deferred sales charges on redemptions and (2) ongoing costs, including
management fees; distribution (12b-1) fees; and other Fund expenses. This
example is intended to help you understand your ongoing costs (in dollars) of
investing in the Fund and to compare these costs with the ongoing costs of
investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of
the period and held for the entire period as indicated below.
ACTUAL EXPENSES
The first line of the table below provides information about actual account
values and actual expenses. You may use the information in this line, together
with the amount you invested, to estimate the expenses that you paid over the
period. Simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
in the first line under the heading entitled "Expenses Paid During Period" to
estimate the expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio and an assumed annual rate of return of 5% before expenses, which is not
the Fund's actual return. The hypothetical account values and expenses may not
be used to estimate the actual ending account balance or expenses you paid for
the period. You may use this information to compare the ongoing costs of
investing in the Fund and other funds by comparing this 5% hypothetical example
with the 5% hypothetical examples that appear in the shareholder reports of
other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads), or contingent deferred sales charges on redemptions.
Therefore, the second line of the table is useful in comparing ongoing costs
only, and will not help you determine the relative total costs of owning
different funds. In addition, if these transactional costs were included, your
costs would have been higher.
REAL ESTATE BEGINNING ENDING EXPENSES ANNUALIZED
INVESTMENT ACCOUNT VALUE ACCOUNT VALUE PAID DURING EXPENSE
PORTFOLIO JANUARY 1, 2005 JUNE 30, 2005 PERIOD* RATIO*
- -------------------------------------------------------------------------------
CLASS A
Actual $1,000 $1,036.78 $4.04 0.80%
Hypothetical
(5% return
before expenses) $1,000 $1,020.83 $4.01 0.80%
CLASS B
Actual $1,000 $1,035.22 $5.20 1.03%
Hypothetical
(5% return
before expenses) $1,000 $1,019.69 $5.16 1.03%
* Expenses are equal to each classes' annualized expense ratios, multiplied by
the average account value over the period, multiplied by the number of days in
the most recent fiscal half-year/365 (to reflect the one-half year period).
1
REAL ESTATE INVESTMENT PORTFOLIO
TEN LARGEST HOLDINGS
June 30, 2005 (unaudited)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
PERCENT OF
COMPANY U.S. $ VALUE NET ASSETS
- -------------------------------------------------------------------------------
Simon Property Group, Inc. $ 6,292,132 6.9%
ProLogis 5,991,736 6.5
Developers Diversified Realty Corp. 4,563,828 5.0
General Growth Properties, Inc. 4,334,995 4.7
Host Marriott Corp. 4,053,000 4.4
Equity Residential 3,626,770 4.0
Vornado Realty Trust 3,256,200 3.6
Boston Properties, Inc. 3,227,000 3.5
Alexandria Real Estate Equities, Inc. 3,180,385 3.5
United Dominion Realty Trust, Inc. 2,898,025 3.2
- -------------------------------------------------------------------------------
$41,424,071 45.3%
INDUSTRY DIVERSIFICATION
June 30, 2005 (unaudited)
PERCENT OF
INDUSTRY U.S. $ VALUE NET ASSETS
- -------------------------------------------------------------------------------
Office $20,756,861 22.7%
Regional Malls 14,315,435 15.7
Apartments 13,394,549 14.7
Shopping Centers 11,242,740 12.3
Lodging 9,969,448 10.9
Industrial 8,945,607 9.8
Diversified 5,560,952 6.1
Storage 3,361,527 3.7
Office--Industrial Mix 1,826,782 2.0
Healthcare 865,651 0.9
Total Investments* 90,239,552 98.8
Cash and receivables,
net of liabilities 1,130,147 1.2
Net Assets $91,369,699 100.0%
* Excludes short-term investments.
Please Note: The industry classifications presented herein are based on
the industry categorization methodology of the Adviser.
2
REAL ESTATE INVESTMENT PORTFOLIO
PORTFOLIO OF INVESTMENTS
June 30, 2005 (unaudited)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
COMMON STOCKS-98.8%
REAL ESTATE INVESTMENT TRUSTS-98.8%
OFFICE-22.7%
Alexandria Real Estate Equities, Inc. 43,300 $ 3,180,385
Arden Realty, Inc. 29,500 1,061,410
Boston Properties, Inc. 46,100 3,227,000
Brookfield Properties Corp.
(Canada) 96,000 2,764,800
CarrAmerica Realty Corp. 24,800 897,264
Corporate Office Properties Trust 95,000 2,797,750
Equity Office Properties Trust 40,300 1,333,930
Glenborough Realty Trust, Inc. 21,100 434,449
Mack-Cali Realty Corp. 27,700 1,254,810
Maguire Properties, Inc. 52,400 1,485,016
Prentiss Properties Trust 32,800 1,195,232
Reckson Associates Realty Corp. 19,300 647,515
SL Green Realty Corp. 7,400 477,300
------------
20,756,861
REGIONAL MALLS-15.7%
General Growth Properties, Inc. 105,500 4,334,995
Pennsylvania Real Estate
Investment Trust 14,400 684,000
Simon Property Group, Inc. 86,800 6,292,132
The Macerich Co. 13,800 925,290
The Mills Corp. 34,200 2,079,018
------------
14,315,435
APARTMENTS-14.7%
Archstone-Smith Trust 68,300 2,637,746
Avalonbay Communities, Inc. 9,000 727,200
Camden Property Trust 28,800 1,548,000
Equity Residential 98,500 3,626,770
Essex Property Trust, Inc. 18,200 1,511,692
Mid-America Apartment
Communities, Inc. 9,800 445,116
United Dominion Realty Trust, Inc. 120,500 2,898,025
------------
13,394,549
SHOPPING CENTERS-12.3%
Developers Diversified Realty Corp. 99,300 4,563,828
Kimco Realty Corp. 25,400 1,496,314
Pan Pacific Retail Properties, Inc. 26,300 1,745,794
Regency Centers Corp. 43,700 2,499,640
Tanger Factory Outlet Centers, Inc. 34,800 937,164
------------
11,242,740
LODGING-10.9%
Hilton Hotels Corp. 39,100 932,535
Host Marriott Corp. 231,600 4,053,000
LaSalle Hotel Properties 27,900 915,399
Starwood Hotels & Resorts
Worldwide, Inc. 46,600 2,729,362
Sunstone Hotel Investors, Inc. 55,200 1,339,152
------------
9,969,448
INDUSTRIAL-9.8%
EastGroup Properties, Inc. 49,100 2,067,601
First Industrial Realty Trust, Inc. 10,900 434,910
First Potomac Realty Trust 18,200 451,360
ProLogis 148,900 5,991,736
------------
8,945,607
DIVERSFIED-6.1%
Cousins Properties, Inc. 22,800 674,424
iStar Financial, Inc. 39,200 1,630,328
Vornado Realty Trust 40,500 3,256,200
------------
5,560,952
STORAGE-3.7%
Public Storage, Inc. 43,300 2,738,725
Sovran Self Storage, Inc. 13,700 622,802
------------
3,361,527
OFFICE-INDUSTRIAL MIX-2.0%
Duke Realty Corp. 57,700 1,826,782
HEALTH CARE-0.9%
Windrose Medical Properties Trust 61,700 865,651
Total Common Stocks
(cost $54,263,667) 90,239,552
3
REAL ESTATE INVESTMENT PORTFOLIO
PORTFOLIO OF INVESTMENTS
(continued)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
PRINCIPAL
AMOUNT
COMPANY (000) U.S. $ VALUE
- -------------------------------------------------------------------------
SHORT-TERM INVESTMENT-1.3%
TIME DEPOSIT-1.3%
The Bank of New York
2.063%, 7/01/05
(cost $1,225,000) $ 1,225 $ 1,225,000
TOTAL INVESTMENTS-100.1%
(cost $55,488,667) 91,464,552
Other assets less liabilities-(0.1%) (94,853)
NET ASSETS-100% $91,369,699
See Notes to Financial Statements.
4
REAL ESTATE INVESTMENT PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2005 (unaudited)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $55,488,667) $91,464,552
Cash 790
Dividends and interest receivable 355,187
Receivable for capital stock sold 10,970
Total assets 91,831,499
LIABILITIES
Payable for capital stock redeemed 307,594
Advisory fee payable 40,628
Distribution fee payable 4,386
Administrative fee payable 1,215
Transfer agent fee payable 59
Accrued expenses 107,918
Total liabilities 461,800
NET ASSETS $91,369,699
COMPOSITION OF NET ASSETS
Capital stock, at par $ 4,927
Additional paid-in capital 36,948,013
Undistributed net investment income 70,866
Accumulated net realized gain on
investment transactions 18,370,008
Net unrealized appreciation of investments 35,975,885
$91,369,699
CLASS A SHARES
Net assets $69,470,996
Shares of capital stock outstanding 3,745,211
Net asset value per share $ 18.55
CLASS B SHARES
Net assets $21,898,703
Shares of capital stock outstanding 1,181,510
Net asset value per share $ 18.53
See Notes to Financial Statements.
5
REAL ESTATE INVESTMENT PORTFOLIO
STATEMENT OF OPERATIONS
Six Months Ended June 30, 2005 (unaudited)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
INVESTMENT INCOME
Dividends (net of foreign taxes withheld of $4,767) $ 604,755
Interest 23,825
Total investment income 628,580
EXPENSES
Advisory fee 338,654
Distribution fee--Class B 61,444
Custodian 66,651
Administrative 36,250
Audit 20,730
Printing 18,425
Legal 2,921
Directors' fees 2,496
Transfer agency 403
Miscellaneous 2,118
Total expenses 550,092
Net investment income 78,488
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENT TRANSACTIONS
Net realized gain on investment transactions 18,697,316(a)
Net change in unrealized appreciation/
depreciation of investments (18,346,801)
Net gain on investment transactions 350,515
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 429,003
(a) On April 29, 2005, the Portfolio had a redemption-in-kind with total
proceeds in the amount of $59,498,847. The net realized gain of the
transactions of $11,771,415 will not be realized for tax purposes.
See Notes to Financial Statements.
6
REAL ESTATE INVESTMENT PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 2005 DECEMBER 31,
(UNAUDITED) 2004
---------------- --------------
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS
Net investment income $ 78,488 $ 2,755,268
Net realized gain on investment
transactions 18,697,316 9,975,335
Net change in unrealized appreciation/
depreciation of investments (18,346,801) 27,859,871
Net increase in net assets
from operations 429,003 40,590,474
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM
Net investment income
Class A (2,199,640) (1,670,715)
Class B (550,085) (1,210,837)
Net realized gain on investment
transactions
Class A (7,012,168) -0-
Class B (2,183,116) -0-
CAPITAL STOCK TRANSACTIONS
Net increase (decrease) (53,012,054) 5,553,162
Total increase (decrease) (64,528,060) 43,262,084
NET ASSETS
Beginning of period 155,897,759 112,635,675
End of period (including undistributed
net investment income of
$70,866 and $2,742,103, respectively) $ 91,369,699 $ 155,897,759
See Notes to Financial Statements.
7
REAL ESTATE INVESTMENT PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
June 30, 2005 (unaudited)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
NOTE A: SIGNIFICANT ACCOUNTING POLICIES
The AllianceBernstein Real Estate Investment Portfolio (the "Portfolio") is a
series of AllianceBernstein Variable Products Series Fund, Inc. (the "Fund").
The Portfolio's investment objective is to seek total return from long-term
growth of capital and income principally through investing in equity securities
of companies that are primarily engaged in or related to the real estate
industry. The Fund was incorporated in the State of Maryland on November 17,
1987, as an open-end series investment company. The Fund offers twenty-three
separately managed pools of assets which have differing investment objectives
and policies. The Portfolio 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.
The Portfolio 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
the Portfolio's net asset value per share.
The financial statements have been prepared in conformity with U.S. generally
accepted accounting principles, which require management to make certain
estimates and assumptions that affect the reported amounts of assets and
liabilities in the financial statements and amounts of income and expenses
during the reporting period. Actual results could differ from those estimates.
Additional information about some of the items discussed in these Notes to
Financial Statements is contained in the Fund's Statement of Additional
Information, which is available upon request. The following is a summary of
significant accounting policies followed by the Portfolio.
1. SECURITY VALUATION
Portfolio securities are valued at their current market value determined on the
basis of market quotations or, if market quotations are not readily available
or are deemed unreliable, at "fair value" as determined in accordance with
procedures established by and under the general supervision of the Fund's Board
of Directors.
In general, the market value of securities which are readily available and
deemed reliable are determined as follows. Securities listed on a national
securities exchange or on a foreign securities exchange are valued at the last
sale price at the close of the exchange or foreign securities exchange. If
there has been no sale on such day, the securities are valued at the mean of
the closing bid and asked prices on such day. Securities listed on more than
one exchange are valued by reference to the principal exchange on which the
securities are traded; securities not listed on an exchange but traded on The
NASDAQ Stock Market, Inc. ("NASDAQ") are valued in accordance with the NASDAQ
Official Closing Price; listed put or call options are valued at the last sale
price. If there has been no sale on that day, such securities will be valued at
the closing bid prices on that day; open futures contracts and options thereon
are valued using the closing settlement price or, in the absence of such a
price, the most recent quoted bid price. If there are no quotations available
for the day of valuation, the last available closing settlement price is used;
securities traded in the over-the-counter market, ("OTC") (but excluding
securities traded on NASDAQ) are valued at the mean of the current bid and
asked prices as reported by the National Quotation Bureau or other comparable
sources; U.S. Government securities and other debt instruments having 60 days
or less remaining until maturity are valued at amortized cost if their original
maturity was 60 days or less; or by amortizing their fair value as of the 61st
day prior to maturity if their original term to maturity exceeded 60 days;
fixed-income securities, including mortgage backed and asset backed securities,
may be valued on the basis of prices provided by a pricing service or at a
price obtained from one or more of the major broker/dealers. In cases where
broker/dealer quotes are obtained, Alliance Capital Management, L.P. (the
"Adviser") may establish procedures whereby changes in market yields or spreads
are used to adjust, on a daily basis, a recently obtained quoted price on a
security; and OTC and other derivatives are valued on the basis of a quoted bid
price or spread from a major broker/dealer in such security.
Securities for which market quotations are not readily available (including
restricted securities) or are deemed unreliable are valued at fair value.
Factors considered in making this determination may include, but are not
limited to, information obtained by contacting the issuer, analysts, analysis
of the issuer's financial statements or other available documents. In addition,
the Fund may use fair value pricing for securities primarily traded in non-U.S.
markets because, most foreign markets close well before the Fund values its
securities at 4:00 p.m., Eastern Time. The earlier close of these foreign
markets gives rise to the possibility that significant events, including broad
market moves, may have occurred in the interim and may materially affect the
value of those securities. To account for this, the Fund may frequently value
many of its foreign equity securities using fair value prices based on third
party vendor modeling tools to the extent available.
8
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
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 prices of such currencies against the U.S.
dollar. Purchases and sales of portfolio securities are translated into U.S.
dollars at the rates of exchange prevailing when such securities were acquired
or sold. Income and expenses are translated into U.S. dollars at rates of
exchange prevailing when accrued.
Net realized gain or loss on foreign currency transactions represents foreign
exchange gains and losses from sales and maturities of foreign fixed income
investments, foreign currency exchange contracts, holding of foreign
currencies, currency gains or losses realized between the trade and settlement
dates on foreign investment transactions, and the difference between the
amounts of dividends, interest and foreign withholding taxes recorded on the
Portfolio's books and the U.S. dollar equivalent amounts actually received or
paid. Net unrealized 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 or depreciation of investments
and foreign currency denominated assets and liabilities.
3. TAXES
It is the policy of the Portfolio 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. The Fund may be subject to taxes imposed by countries in which it
invests. Such taxes are generally based on income and/or capital gains earned
or repatriated. Taxes are accrued and applied to net investment income, net
realized gains and net unrealized appreciation/depreciation as such income
and/or gains are earned.
4. INVESTMENT INCOME AND INVESTMENT TRANSACTIONS
Dividend income is recorded on the ex-dividend date or as soon as the Portfolio
is informed of the dividend. Interest income is accrued daily. Investment
transactions are accounted for on the trade date securities are purchased or
sold. Investment gains and losses are determined on the identified cost basis.
The Portfolio amortizes premiums and accretes discounts as adjustments to
interest income.
5. INCOME AND EXPENSES
Expenses attributable to a single portfolio are charged to that portfolio.
Expenses of the Fund are charged to each portfolio in proportion to net assets.
All income earned and expenses incurred by a portfolio with multi-class shares
outstanding are borne on a pro-rata basis by each outstanding class of shares,
based on the proportionate interest in the portfolio represented by the net
assets of such class, except that the portfolio's Class B shares bear the
distribution fees.
6. DIVIDENDS AND DISTRIBUTIONS
The Portfolio declares and distributes dividends and distributions from net
investment income and net realized gains, respectively, if any, at least
annually. 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 U.S. generally accepted accounting principles. 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
Until September 6, 2004, under the terms of an investment advisory agreement,
the Portfolio paid the Adviser an advisory fee at an annual rate of .90% of the
Portfolio's average daily net assets. Effective September 7, 2004, the terms of
the investment advisory agreement were amended so that the advisory fee was
reduced to an annual rate of .55% of the first $2.5 billion, .45% of the next
$2.5 billion and .40% in excess of $5 billion, of the Portfolio's average daily
net assets. The fee is accrued daily and paid monthly.
9
REAL ESTATE INVESTMENT PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(continued)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
Effective January 1, 2004 through September 6, 2004, in contemplation of the
final agreement with the Office of New York Attorney General ("NYAG"), the
Adviser began waiving a portion of its advisory fee so as to charge the
Portfolio at the reduced annual rate discussed above. For a more complete
discussion of the Adviser's settlement with the NYAG, please see "Legal
Proceedings" below.
Pursuant to the advisory agreement, the Portfolio paid $36,250 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, 2005.
Brokerage commissions paid on investment transactions for the six months ended
June 30, 2005 amounted to $52,697, of which $29,582 and $0, respectively, was
paid to Sanford C. Bernstein & Co. LLC, and Sanford C. Bernstein Limited,
affiliates of the Adviser.
The Portfolio compensates Alliance Global Investor Services, Inc., a
wholly-owned subsidiary of the Adviser, under a Transfer Agency Agreement for
providing personnel and facilities to perform transfer agency services for the
Portfolio. Such compensation amounted to $403 for the six months ended June 30,
2005.
NOTE C: DISTRIBUTION PLAN
The Portfolio has adopted a Distribution Plan (the "Plan") for Class B shares
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the
Plan, the Portfolio pays distribution and servicing fees to AllianceBernstein
Investment Research and Management, Inc. (the "Distributor"), a wholly-owned
subsidiary of the Adviser, at an annual rate of up to .50% of the 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 limits
payments under the Plan to .25% of the Portfolio's average daily net assets
attributable to Class B shares. The Plan provides that the Distributor will use
such payments in their entirety for distribution assistance and promotional
activities.
The Portfolio is not obligated under the Plan to pay any distribution and
servicing fees in excess of the amounts set forth above. The purpose of the
payments to the Distributor under the Plan is to compensate the Distributor for
its distribution services with respect to the sale of the Portfolio's Class B
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 Plan is
characterized by the staff of the Securities and Exchange Commission as being
of the "compensation" variety.
In the event that the Plan is terminated or not continued, no distribution and
servicing fees (other than current amounts accrued but not yet paid) would be
owed by the Portfolio to the Distributor.
The Plan also provides that the Adviser may use its own resources to finance
the distribution of the Portfolio's shares.
NOTE D: INVESTMENT TRANSACTIONS
Purchases and sales of investment securities (excluding short-term investments)
for the six months ended June 30, 2005, were as follows:
PURCHASES SALES
------------ -----------
Investment securities
(excluding U. S. government securities) $31,123,018 $30,196,002
U.S. government securities -0- -0-
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 $ 36,003,369
Gross unrealized depreciation (27,484)
Net unrealized appreciation $ 35,975,885
10
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
1. FORWARD EXCHANGE CURRENCY CONTRACTS
The Portfolio may enter into forward exchange currency contracts in order to
hedge its exposure to changes in foreign currency exchange rates on its 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 on a future date at a negotiated forward rate. The gain or loss
arising from the difference between the original contract and the closing of
such contract would be included in net realized gain or loss on foreign
currency transactions.
Fluctuations in the value of open forward exchange currency contracts are
recorded for financial reporting purposes as net unrealized appreciation or
depreciation by the Portfolio.
The Portfolio's custodian will place and maintain cash not available for
investment or other liquid assets in a separate account of the Portfolio having
a value at least equal to the aggregate amount of the 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 the Portfolio has in that particular
currency contract.
2. OPTION TRANSACTIONS
For hedging and investment purposes, the Portfolio may purchase and write
(sell) put and call options on U.S. and foreign government securities and
foreign currencies that are traded on U.S. and foreign 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 written options which
expire unexercised are recorded by the Portfolio on the expiration date as
realized gains from options written. 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. If a
put option is exercised, the premium received reduces the cost basis of the
security or currency purchased by the Portfolio. 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.
NOTE E: SECURITIES LENDING
The Portfolio has entered into a securities lending agreement with UBS Warburg
LLC (the "Lending Agent"). Under the terms of the agreement, the Lending Agent,
on behalf of the Portfolio, administers the lending of portfolio securities to
certain broker-dealers. In return, the Portfolio receives fee income from the
lending transactions or it retains a portion of interest on the investment of
any cash received as collateral. The Portfolio also continues to receive
dividends or interest on the securities loaned. Unrealized gain or loss on the
value of the securities loaned that may occur during the term of the loan will
be reflected in the accounts of the Portfolio. All loans are continuously
secured by collateral exceeding the value of the securities loaned. All
collateral consists of either cash or U.S. government securities. The Lending
Agent invests the cash collateral received in an eligible money market vehicle
in accordance with the investment restrictions of the Portfolio. The Lending
Agent will indemnify the Portfolio for any loss resulting from a borrower's
failure to return a loaned security when due. For the six months ended June 30,
2005, the Portfolio had no securities on loan.
11
REAL ESTATE INVESTMENT PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(continued)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
NOTE F: CAPITAL STOCK
There are 1,000,000,000 shares of $.001 par value capital stock authorized,
divided into two classes, designated Class A and Class B shares. Each class
consists of 500,000,000 authorized shares. Transactions in capital stock were
as follows:
SHARES AMOUNT
--------------------------- ------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
JUNE 30, 2005 DECEMBER 31, JUNE 30, 2005 DECEMBER 31,
(UNAUDITED) 2004 (UNAUDITED) 2004
------------ ------------ -------------- --------------
CLASS A
Shares sold 308,776 892,997 $ 6,110,876 $ 15,537,262
Shares issued in
reinvestment of
dividends and
distributions 503,377 105,875 9,211,808 1,670,715
Shares redeemed (1,347,392) (1,116,458) (26,459,357) (18,939,018)
Net decrease (535,239) (117,586) $(11,136,673) $ (1,731,041)
CLASS B
Shares sold 321,930 980,923 $ 6,223,579 $ 16,451,716
Shares issued in
reinvestment of
dividends and
distributions 149,437 77,074 2,733,201 1,210,837
Shares redeemed (2,574,406) (597,834) (50,832,161) (10,378,350)
Net increase
(decrease) (2,103,039) 460,163 $(41,875,381) $ 7,284,203
NOTE G: RISKS INVOLVED IN INVESTING IN THE PORTFOLIO
Concentration of Risk--Although the Portfolio does not invest directly in real
estate, it invests primarily in Real Estate Equity Securities and has a policy
of concentration of its investments in the real estate industry. Therefore, an
investment in the Portfolio is subject to certain risks associated with the
direct ownership of real estate and with the real estate industry in general.
To the extent that assets underlying the Portfolio's investments are
concentrated geographically, by property type or in certain other respects, the
Portfolio may be subject to additional risks.
In addition, investing in Real Estate Investment Trusts ("REITs") involves
certain unique risks in addition to those risks associated with investing in
the real estate industry in general. REITs are dependent upon management
skills, are not diversified, and are subject to heavy cash flow dependency,
default by borrowers and self-liquidation. REITs are also subject to the
possibilities of failing to qualify for tax-free pass-through of income under
the Code and failing to maintain their exemptions from registration under the
1940 Act. REITs (especially mortgage REITs) also are subject to interest rate
risks.
Indemnification Risk--In the ordinary course of business, the Portfolio enters
into contracts that contain a variety of indemnifications. The Portfolio's
maximum exposure under these arrangements is unknown. However, the Portfolio
has not had prior claims of losses pursuant to these indemnification provisions
and expects the risk of loss thereunder to be remote.
NOTE H: JOINT CREDIT FACILITY
A number of open-end mutual funds managed by the Adviser, including the
Portfolio, participate in a $500 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
Portfolio did not utilize the Facility during the six months ended June 30,
2005.
NOTE I: DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions to be paid for the year ending December 31,
2005 will be determined at the end of the current fiscal year. The tax
character of distributions paid during the fiscal years ended December 31, 2004
and December 31, 2003 were as follows:
2004 2003
----------- -----------
Distributions paid from:
Ordinary income $ 2,881,552 $ 2,167,752
Total taxable distributions 2,881,552 2,167,752
Total distributions paid $ 2,881,552 $ 2,167,752
12
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
As of December 31, 2004, the components of accumulated earnings/(deficit) on a
tax basis were as follows:
Undistributed ordinary income $ 6,153,120
Undistributed long term capital gain 5,767,883(a)
Unrealized appreciation/(depreciation) 54,011,762(b)
Total accumulated earnings/(deficit) $ 65,932,765
(a) During the fiscal year, the Portfolio utilized capital loss carryforwards
of $660,047.
(b) The difference between book-basis and tax-basis unrealized
appreciation/(depreciation) is attributable primarily to the tax deferral of
losses on wash sales.
NOTE J: LEGAL PROCEEDINGS
As has been previously reported, the staff of the U.S. Securities and Exchange
Commission ("SEC") and the NYAG have been investigating practices in the mutual
fund industry identified as "market timing" and "late trading" of mutual fund
shares. Certain other regulatory authorities have also been conducting
investigations into these practices within the industry and have requested that
the Adviser provide information to them. The Adviser has been cooperating and
will continue to cooperate with all of these authorities.
On December 18, 2003, the Adviser confirmed that it had reached terms with the
SEC and the NYAG for the resolution of regulatory claims relating to the
practice of "market timing" mutual fund shares in some of the AllianceBernstein
Mutual Funds. The agreement with the SEC is reflected in an Order of the
Commission ("SEC Order"). The agreement with the NYAG is memorialized in an
Assurrance of Discontinuance dated September 1, 2004 ("NYAG Order"). Among the
key provisions of these agreements are the following:
(i) The Adviser agreed to establish a $250 million fund (the
"Reimbursement Fund") to compensate mutual fund shareholders for the adverse
effects of market timing attributable to market timing relationships described
in the SEC Order. According to the SEC Order, the Reimbursement Fund is to be
paid, in order of priority, to fund investors based on (i) their aliquot share
of losses suffered by the fund due to market timing, and (ii) a proportionate
share of advisory fees paid by such fund during the period of such market
timing;
(ii) The Adviser agreed to reduce the advisory fees it receives from
some of the AllianceBernstein long-term, open-end retail funds until December
31, 2008; and
(iii) The Adviser agreed to implement changes to its governance and
compliance procedures. Additionally, the SEC Order and the NYAG Order
contemplate that the Adviser's registered investment company clients, including
the Fund, will introduce governance and compliance changes.
In anticipation of final, definitive documentation of the NYAG Order and
effective January 1, 2004, the Adviser began waiving a portion of its advisory
fee. On September 7, 2004, the Fund's investment advisory agreement was amended
to reflect the reduced advisory fee. For more information on this waiver and
amendment to the Fund's investment advisory agreement, please see "Advisory Fee
and Other Transactions with Affiliates" above.
A special committee of the Adviser's Board of Directors, comprised of the
members of the Adviser's Audit Committee and the other independent member of
the Adviser's Board, is continuing to direct and oversee an internal
investigation and a comprehensive review of the facts and circumstances
relevant to the SEC's and the NYAG's investigations.
In addition, the Independent Directors of the Fund ("the Independent
Directors") have initiated an investigation of the above-mentioned matters with
the advice of an independent economic consultant and independent counsel. The
Independent Directors have formed a special committee to supervise the
investigation.
On October 2, 2003, a putative class action complaint entitled HINDO ET AL. V.
ALLIANCEBERNSTEIN GROWTH & INCOME FUND ET AL. (the "Hindo Complaint") was filed
against the Adviser; Alliance Capital Management Holding L.P.; Alliance Capital
Management Corporation; AXA Financial, Inc.; certain of the AllianceBernstein
Mutual Funds, including the Fund; Gerald Malone; Charles Schaffran
(collectively, the "Alliance Capital defendants"); and certain other defendants
not affiliated with the Adviser. The Hindo Complaint was filed in the United
States District Court for the Southern District of New York by alleged
shareholders of two of the AllianceBernstein Mutual Funds. The Hindo Complaint
alleges that certain of the Alliance Capital defendants failed to disclose that
they improperly allowed certain hedge funds and other
13
REAL ESTATE INVESTMENT PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(continued)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
unidentified parties to engage in late trading and market timing of
AllianceBernstein Fund securities, violating Sections 11 and 15 of the
Securities Act, Sections 10(b) and 20(a) of the Exchange Act, and Sections 206
and 215 of the Advisers Act. Plaintiffs seek an unspecified amount of
compensatory damages and rescission of their contracts with the Adviser,
including recovery of all fees paid to the Adviser pursuant to such contracts.
Since October 2, 2003, numerous additional lawsuits making factual allegations
similar to those in the Hindo Complaint were filed against the Adviser and
certain other defendants, some of which name the Fund as a defendant. All of
these lawsuits seek an unspecified amount of damages. The lawsuits are now
pending in the United States District Court for the District of Maryland
pursuant to a ruling by the Judicial Panel on Multidistrict Litigation
transferring and centralizing all of the mutual fund cases involving market and
late trading in the District of Maryland.
As a result of the matters discussed above, investors in the AllianceBernstein
Mutual Funds may choose to redeem their investments. This may require the
AllianceBernstein Mutual Funds to sell investments held by those funds to
provide for sufficient liquidity and could also have an adverse effect on the
investment performance of the AllianceBernstein Mutual Funds.
The Adviser and approximately twelve other investment management firms were
publicly mentioned in connection with the settlement by the SEC of charges that
an unaffiliated broker/dealer violated federal securities laws relating to its
receipt of compensation for selling specific mutual funds and the disclosure of
such compensation. The SEC indicated publicly that, among other things, it was
considering enforcement action in connection with mutual funds' disclosure of
such arrangements and in connection with the practice of considering mutual
fund sales in the direction of brokerage commissions from fund portfolio
transactions. The SEC issued subpoenas to the Adviser, and the NASD issued
requests for information in connection with this matter and the Adviser
provided documents and other information to the SEC and NASD and cooperated
fully with the investigations. On June 8, 2005 the NASD announced that it had
reached a settlement with the Distributor in connection with this matter.
Management of the Adviser expects that the settlement has resolved both
regulatory inquiries described above.
On June 22, 2004, a purported class action complaint entitled AUCOIN, ET AL. V.
ALLIANCE CAPITAL MANAGEMENT L.P., ET AL. ("Aucoin Complaint") was filed against
the Adviser, Alliance Capital Management Holding L.P., Alliance Capital
Management Corporation, AXA Financial, Inc., AllianceBernstein Investment
Research & Management, Inc., certain current and former directors of the
AllianceBernstein Mutual Funds, and unnamed Doe defendants. The Aucoin
Complaint names certain of the AllianceBernstein mutual funds as nominal
defendants. The Aucoin Complaint was filed in the United States District Court
for the Southern District of New York by an alleged shareholder of an
AllianceBernstein mutual fund. The Aucoin Complaint alleges, among other
things, (i) that certain of the defendants improperly authorized the payment of
excessive commissions and other fees from fund assets to broker-dealers in
exchange for preferential marketing services, (ii) that certain of the
defendants misrepresented and omitted from registration statements and other
reports material facts concerning such payments, and (iii) that certain
defendants caused such conduct as control persons of other defendants. The
Aucoin Complaint asserts claims for violation of Sections 34(b), 36(b) and
48(a) of the Investment Company Act, Sections 206 and 215 of the Advisers Act,
breach of common law fiduciary duties, and aiding and abetting breaches of
common law fiduciary duties. Plaintiffs seek an unspecified amount of
compensatory damages and punitive damages, rescission of their contracts with
the Adviser, including recovery of all fees paid to the Adviser pursuant to
such contracts, an accounting of all fund-related fees, commissions and soft
dollar payments, and restitution of all unlawfully or discriminatorily obtained
fees and expenses.
Since June 22, 2004, numerous additional lawsuits making factual allegations
substantially similar to those in the Aucoin Complaint were filed against the
Adviser and certain other defendants, and others may be filed.
It is possible that these matters and/or other developments resulting from
these matters could result in increased redemptions of the Fund's shares or
other adverse consequences to the Fund. However, the Adviser believes that
these matters are not likely to have a material adverse effect on its ability
to perform advisory services relating to the Fund.
14
REAL ESTATE INVESTMENT PORTFOLIO
FINANCIAL HIGHLIGHTS
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
CLASS A
----------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 2005 ------------------------------------------------------------
(UNAUDITED) 2004 2003 2002 2001 2000
----------- ----------- ----------- ----------- ----------- -----------
Net asset value, beginning of period $20.66 $15.62 $11.52 $11.50 $10.75 $8.87
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (a) (.05) .39(b) .46 .44(b) .47(b) .48(b)
Net realized and unrealized gain (loss)
on investment transactions .78 5.05 3.99 (.12) .67 1.84
Net increase in net asset value
from operations .73 5.44 4.45 .32 1.14 2.32
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.68) (.40) (.35) (.30) (.39) (.44)
Distributions from net realized gain on
investment transactions (2.16) -0- -0- -0- -0- -0-
Total dividends and distributions (2.84) (.40) (.35) (.30) (.39) (.44)
Net asset value, end of period $18.55 $20.66 $15.62 $11.52 $11.50 $10.75
TOTAL RETURN
Total investment return based on
net asset value (c) 3.68% 35.63% 39.30% 2.60% 10.79% 26.69%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $69,471 $88,441 $68,717 $50,062 $39,417 $29,124
Ratio to average net assets of:
Expenses, net of waivers and
reimbursements .80%(d) .77% 1.24% 1.06% .95% .95%
Expenses, before waivers and
reimbursements .80%(d) .99% 1.24% 1.29% 1.39% 1.67%
Net investment income (loss) (.56)%(d) 2.26%(b) 3.50% 3.70%(b) 4.32%(b) 4.87%(b)
Portfolio turnover rate 24% 35% 23% 31% 33% 25%
See footnote summary on page 16.
15
REAL ESTATE INVESTMENT PORTFOLIO
FINANCIAL HIGHLIGHTS
(continued)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
CLASS B
--------------------------------------------------------------------
SIX MONTHS APRIL 24, 2001(e)
ENDED YEAR ENDED DECEMBER 31, TO
JUNE 30, 2005 ----------------------------------- DECEMBER 31,
(UNAUDITED) 2004 2003 2002 2001
----------- ----------- ----------- ----------- -----------
Net asset value, beginning of period $20.54 $15.55 $11.48 $11.49 $10.46
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a) .11 .34(b) .43 .40(b) .31(b)
Net realized and unrealized gain (loss)
on investment transactions .58 5.03 3.98 (.11) 1.11
Net increase in net asset value from operations .69 5.37 4.41 .29 1.42
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.54) (.38) (.34) (.30) (.39)
Distributions from net realized gain on
investment transactions (2.16) -0- -0- -0- -0-
Total dividends and distributions (2.70) (.38) (.34) (.30) (.39)
Net asset value, end of period $18.53 $20.54 $15.55 $11.48 $11.49
TOTAL RETURN
Total investment return based on
net asset value (c) 3.52% 35.28% 39.02% 2.31% 13.77%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $21,899 $67,457 $43,919 $16,626 $5,603
Ratio to average net assets of:
Expenses, net of waivers and
reimbursements 1.03%(d) 1.02% 1.49% 1.31% 1.20%(d)
Expenses, before waivers and
reimbursements 1.03%(d) 1.24% 1.49% 1.52% 1.84%(d)
Net investment income 1.16%(d) 2.02%(b) 3.22% 3.43%(b) 4.40%(b)(d)
Portfolio turnover rate 24% 35% 23% 31% 33%
(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 return does not reflect the
deduction of taxes that a shareholder would pay on Portfolio distributions or
the redemption of Portfolio shares. Total investment return calculated for a
period of less than one year is not annualized.
(d) Annualized.
(e) Commencement of distribution.
16
- -------------------------------------------------------------------------------
SEMI-ANNUAL REPORT
- -------------------------------------------------------------------------------
[LOGO] ALLIANCEBERNSTEIN (R)
Investment Research and Management
AllianceBernstein Variable Products Series Fund, Inc.
Semi-Annual Report
June 30, 2005
> AllianceBernstein Global Dollar Government Portfolio
INVESTMENT PRODUCTS OFFERED
- ---------------------------
> ARE NOT FDIC INSURED
> MAY LOSE VALUE
> ARE NOT BANK GUARANTEED
- ---------------------------
YOU MAY OBTAIN A DESCRIPTION OF THE FUND'S PROXY VOTING POLICIES AND
PROCEDURES, AND INFORMATION REGARDING HOW THE FUND VOTED PROXIES RELATING TO
PORTFOLIO SECURITIES DURING THE MOST RECENT 12-MONTH PERIOD ENDED JUNE 30,
WITHOUT CHARGE. SIMPLY VISIT THE SECURITIES AND EXCHANGE COMMISSION'S (THE
"COMMISSION") WEB SITE AT WWW.SEC.GOV, OR CALL ALLIANCEBERNSTEIN AT (800)
227-4618.
THE FUND FILES ITS COMPLETE SCHEDULE OF PORTFOLIO HOLDINGS WITH THE COMMISSION
FOR THE FIRST AND THIRD QUARTERS OF EACH FISCAL YEAR ON FORM N-Q. THE FUND'S
FORMS N-Q ARE AVAILABLE ON THE COMMISSION'S WEB SITE AT WWW.SEC.GOV. THE FUND'S
FORMS N-Q MAY ALSO BE REVIEWED AND COPIED AT THE COMMISSION'S PUBLIC REFERENCE
ROOM IN WASHINGTON, DC; INFORMATION ON THE OPERATION OF THE PUBLIC REFERENCE
ROOM MAY BE OBTAINED BY CALLING (800) SEC-0330.
GLOBAL DOLLAR GOVERNMENT PORTFOLIO
FUND EXPENSES
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including sales charges (loads) on purchase payments, contingent
deferred sales charges on redemptions and (2) ongoing costs, including
management fees; distribution (12b-1) fees; and other Fund expenses. This
example is intended to help you understand your ongoing costs (in dollars) of
investing in the Fund and to compare these costs with the ongoing costs of
investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of
the period and held for the entire period as indicated below.
ACTUAL EXPENSES
The first line of the table below provides information about actual account
values and actual expenses. You may use the information in this line, together
with the amount you invested, to estimate the expenses that you paid over the
period. Simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
in the first line under the heading entitled "Expenses Paid During Period" to
estimate the expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio and an assumed annual rate of return of 5% before expenses, which is not
the Fund's actual return. The hypothetical account values and expenses may not
be used to estimate the actual ending account balance or expenses you paid for
the period. You may use this information to compare the ongoing costs of
investing in the Fund and other funds by comparing this 5% hypothetical example
with the 5% hypothetical examples that appear in the shareholder reports of
other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads), or contingent deferred sales charges on redemptions.
Therefore, the second line of the table is useful in comparing ongoing costs
only, and will not help you determine the relative total costs of owning
different funds. In addition, if these transactional costs were included, your
costs would have been higher.
BEGINNING ENDING
ACCOUNT VALUE ACCOUNT VALUE EXPENSES PAID ANNUALIZED
GLOBAL DOLLAR GOVERNMENT PORTFOLIO JANUARY 1, 2005 JUNE 30, 2005 DURING PERIOD* EXPENSE RATIO*
- --------------------------------------------------------------------------------------------------------------
CLASS A
Actual $1,000 $1,040.67 $ 9.16 1.81%
Hypothetical (5% return before expenses) $1,000 $1,015.82 $ 9.05 1.81%
CLASS B
Actual $1,000 $1,040.22 $10.42 2.06%
Hypothetical (5% return before expenses) $1,000 $1,014.58 $10.29 2.06%
* Expenses are equal to each classes' annualized expense ratios, multiplied by
the average account value over the period, multiplied by the number of days in
the most recent fiscal half-year/365 (to reflect the one-half year period).
1
GLOBAL DOLLAR GOVERNMENT PORTFOLIO
SECURITY TYPE BREAKDOWN
JUNE 30, 2005 (UNAUDITED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
PERCENT OF
SECURITY TYPE U.S. $ VALUE NET ASSETS
_______________________________________________________________________________
Sovereign Debt Obligations $ 22,699,021 82.7%
- -------------------------------------------------------------------------------
Corporate Debt Obligations 1,985,508 7.2
------------ -----
- -------------------------------------------------------------------------------
Total Investments* 24,684,529 89.9
- -------------------------------------------------------------------------------
Cash and receivables, net of liabilities 2,774,426 10.1
------------ -----
- -------------------------------------------------------------------------------
Net Assets $ 27,458,955 100.0%
- -------------------------------------------------------------------------------
* Excludes short-term investments.
2
GLOBAL DOLLAR GOVERNMENT PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2005 (UNAUDITED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
PRINCIPAL
AMOUNT
(000) U.S. $ VALUE
- -------------------------------------------------------------------------------
SOVEREIGN DEBT OBLIGATIONS-82.7%
COLLATERALIZED BRADY BONDS-1.6%
NIGERIA-0.9%
Central Bank of Nigeria
Series WW
6.25%, 11/15/20 (a) $ 250 $ 248,750
--------------
PANAMA-0.7%
Republic of Panama
IRB
3.75%, 7/17/14 (b) 182 177,918
--------------
Total Collateralized Brady Bonds
(cost $423,204) 426,668
--------------
NON-COLLATERALIZED BRADY BONDS-1.2%
BRAZIL-1.2%
Federal Republic of Brazil
C-Bonds
8.00%, 4/15/14 111 113,520
DCB
Series L
4.313%, 4/15/12 (c) 214 205,834
--------------
Total Non-Collateralized Brady Bonds
(cost $250,050) 319,354
--------------
SOVEREIGN DEBT SECURITIES-79.9%
ARGENTINA-5.5%
Republic of Argentina
3.01%, 8/03/12 (c) 1,008 911,735
8.28%, 12/31/33 658 605,333
--------------
1,517,068
--------------
BRAZIL-11.1%
Federal Republic of Brazil
9.25%, 10/22/10 45 50,063
10.50%, 7/14/14 287 340,095
11.00%, 8/17/40 (d) 1,166 1,399,199
12.00%, 4/15/10 250 302,875
12.75%, 1/15/20 673 913,597
14.50%, 10/15/09 40 51,960
--------------
3,057,789
--------------
BULGARIA-0.4%
Republic of Bulgaria
8.25%, 1/15/15 (e) 94 117,641
--------------
COLOMBIA-1.3%
Republic of Colombia
10.75%, 1/15/13 88 106,700
11.75%, 2/25/20 198 258,885
--------------
365,585
--------------
DOMINICAN REPUBLIC-0.7%
Dominican Republic
0.00%, 9/27/11 (e) (f) 169 180,513
--------------
ECUADOR-1.9%
Republic of Ecuador
8.00%, 8/15/30 (a) (e) 627 526,680
--------------
EL SALVADOR-1.2%
Republic of El Salvador
7.625%, 9/21/34 (e) 72 77,760
7.65%, 6/15/35 (e) 138 137,310
8.50%, 7/25/11 (e) 100 115,150
--------------
330,220
--------------
INDONESIA-0.9%
Republic of Indonesia
6.75%, 3/10/14 (e) 260 258,050
--------------
JAMAICA-1.0%
Government of Jamaica
9.00%, 6/02/15 81 82,215
10.625%, 6/20/17 141 154,748
12.75%, 9/01/07 (e) 30 34,650
--------------
271,613
--------------
LEBANON-0.7%
Lebanese Republic
7.875%, 5/20/11 (e) 75 74,625
10.125%, 8/06/08 (e) 75 80,250
11.625%, 5/11/16 (e) 33 38,363
--------------
193,238
--------------
MEXICO-15.1%
United Mexican States
7.50%, 1/14/12 225 255,150
8.125%, 12/30/19 1,135 1,394,347
11.375%, 9/15/16 364 540,540
Series A
6.375%, 1/16/13 42 45,087
8.00%, 9/24/22 1,057 1,291,125
9.875%, 2/01/10 503 606,869
--------------
4,133,118
--------------
PANAMA-2.8%
Republic of Panama
8.875%, 9/30/27 39 46,508
9.375%, 7/23/12-4/1/29 70 85,100
9.625%, 2/08/11 223 265,370
10.75%, 5/15/20 275 372,625
--------------
769,603
--------------
PERU-2.8%
Republic of Peru
8.375%, 5/03/16 57 63,926
8.75%, 11/21/33 202 227,250
9.125%, 2/21/12 231 270,270
9.875%, 2/06/15 163 201,713
--------------
763,159
--------------
3
GLOBAL DOLLAR GOVERNMENT PORTFOLIO
PORTFOLIO OF INVESTMENTS
(CONTINUED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
PRINCIPAL
AMOUNT
(000) U.S. $ VALUE
- -------------------------------------------------------------------------------
PHILIPPINES-5.1%
Republic of Philippines
8.875%, 3/17/15 $ 331 $ 345,068
9.00%, 2/15/13 300 315,450
9.50%, 2/02/30 127 129,604
9.875%, 1/15/19 125 135,313
10.625%, 3/16/25 432 483,840
--------------
1,409,275
--------------
RUSSIA-15.0%
Russia Ministry of Finance
Series V
3.00%, 5/14/08 515 485,903
Series VII
3.00%, 5/14/11 1,310 1,152,799
Russian Federation
5.00%, 3/31/30 (a) (e) 2,210 2,467,603
--------------
4,106,305
--------------
TURKEY-5.0%
Republic of Turkey
7.375%, 2/05/25 116 114,910
11.00%, 1/14/13 195 246,188
11.50%, 1/23/12 233 297,075
11.75%, 6/15/10 140 173,950
11.875%, 1/15/30 375 540,938
--------------
1,373,061
--------------
UKRAINE-2.7%
Government of Ukraine
6.875%, 3/04/11 (e) 500 525,850
7.65%, 6/11/13 (e) 75 82,688
11.00%, 3/15/07 (e) 119 126,055
--------------
734,593
--------------
URUGUAY-1.6%
Republic of Uruguay
4.875%, 1/15/33 (g) 338 307,409
7.50%, 3/15/15 29 28,275
9.25%, 5/17/17 100 106,500
--------------
442,184
--------------
VENEZUELA-5.1%
Republic of Venezuela
4.15%, 4/20/11 (b) 80 73,200
5.375%, 8/07/10 320 297,600
8.50%, 10/08/14 30 31,095
9.25%, 9/15/27 956 1,001,409
--------------
1,403,304
--------------
Total Sovereign Debt Securities
(cost $19,911,585) 21,952,999
--------------
Total Sovereign Debt Obligations
(cost $20,584,839) 22,699,021
--------------
CORPORATE DEBT OBLIGATIONS-7.2%
AGRICULTURE-0.8%
Choada Modern Agriculture (China)
7.75%, 2/08/10 (e) 130 125,450
Noble Group Ltd. (Hong Kong)
6.625%, 3/17/15 (e) 100 92,324
--------------
217,774
--------------
BANKING-0.4%
Kazkommerts International BV (Kazakhstan)
8.50%, 4/16/13 (e) 100 106,000
--------------
COMMUNICATIONS-MOBILE-1.7%
Kyivstar (Ukraine)
7.75%, 4/27/12 (e) 100 100,000
10.375%, 8/17/09 (e) 100 110,000
MobiFon Holdings BV (Romania)
12.50%, 7/31/10 (e) 100 121,250
Mobile Telesystems Finance (Russia)
9.75%, 1/30/08 (e) 125 134,063
--------------
465,313
--------------
CONTAINERS-0.7%
Vitro Envases (Mexico)
10.75%, 7/23/11 (e) 200 194,000
--------------
ENERGY-1.1%
Gazprom Oao (Russia)
9.625%, 3/01/13 (e) 200 244,650
Monterrey Power, SA De C.V. (Mexico)
9.625%, 11/15/09 (e) 45 52,168
--------------
296,818
--------------
METALS/MINING-0.8%
Citigroup (JSC Severstal) (Russia)
9.25%, 4/19/14 (e) 68 70,142
Freeport-McMoran Copper & Gold (Indonesia)
10.125%, 2/01/10 150 166,875
--------------
237,017
--------------
PETROLEUM PRODUCTS-1.7%
Pemex Project Funding Master Trust (Mexico)
8.00%, 11/15/11 250 283,749
PF Export Receivables Master Trust (Brazil)
6.436%, 6/01/15 (e) 121 124,117
Tyumen Oil (Russia)
11.00%, 11/06/07 (e) 55 60,720
--------------
468,586
--------------
4
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
CONTRACTS (h)
OR PRINCIPAL
AMOUNT
(000) U.S. $ VALUE
- -------------------------------------------------------------------------------
Total Corporate Debt Obligations
(cost $1,845,425) $ 1,985,508
--------------
PUT OPTIONS PURCHASED(i)-0.0%
BRAZIL-0.0%
Federal Republic of Brazil
11.00%, 8/17/40
expiring Jul '05
@ $118.40 162,000 1,620
--------------
ECUADOR-0.0%
Republic of Ecuador
7.00%, 8/15/30
expiring Sep '05
@ $78.45 60,000 540
--------------
Total Put Options Purchased
(cost $2,370) 2,160
--------------
SHORT-TERM INVESTMENT-8.8%
TIME DEPOSIT-2.6%
The Bank of New York
2.063%, 7/01/05
(cost $711,000) $ 711 711,000
--------------
REPURCHASE AGREEMENT-6.2%
Deutsche Bank
3.20%, dated 6/30/05,
due 7/01/05 in the
amount of $1,700,151
(cost $1,700,000;
collateralized by
$1,720,000 FHLMC,
3.75% due 11/15/06,
value $1,700,000) 1,700 1,700,000
--------------
Total Short-Term Investments
(cost $2,411,000) 2,411,000
--------------
TOTAL INVESTMENTS-98.7%
(cost $24,843,634) 27,097,689
Other assets less liabilities-1.3% 361,266
--------------
NET ASSETS-100% $ 27,458,955
==============
CALL OPTIONS WRITTEN (SEE NOTE D)
EXERCISE EXPIRATION
DESCRIPTION CONTRACTS (h) PRICE MONTH U.S. $ VALUE
- ----------------------------------------------------------------------------------------------------
Federal Republic of Brazil
11.00%, 8/17/40 157,000 $118.85 Jul '05 $ (2,826)
Federal Republic of Brazil
11.00%, 8/17/40 145,000 119.15 Jul '05 (2,320)
Federal Republic of Brazil
11.00%, 8/17/40 145,000 119.30 Jul '05 (2,175)
Federal Republic of Brazil
11.00%, 8/17/40 74,000 119.40 Jul '05 (1,110)
Federal Republic of Brazil
11.00%, 8/17/40 162,000 119.90 Jul '05 (1,620)
--------
(premiums received $7,481) $(10,051)
========
CREDIT DEFAULT SWAP CONTRACTS (SEE NOTE D)
NOTIONAL
SWAP COUNTERPARTY & AMOUNT INTEREST TERMINATION UNREALIZED
REFERENCED OBLIGATION (000'S) RATE DATE DEPRECIATION
- ----------------------------------------------------------------------------------------------------
BUY CONTRACTS:
Citigroup Global Markets, Inc.
Federal Republic of Brazil
12.25%, 3/06/30 290 4.14% 4/20/10 $(15,151)
5
GLOBAL DOLLAR GOVERNMENT PORTFOLIO
PORTFOLIO OF INVESTMENTS
(CONTINUED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
CREDIT DEFAULT SWAP CONTRACTS (SEE NOTE D) (CONTINUED)
NOTIONAL UNREALIZED
SWAP COUNTERPARTY & AMOUNT INTEREST TERMINATION APPRECIATION/
REFERENCED OBLIGATION (000'S) RATE DATE (DEPRECIATION)
- ----------------------------------------------------------------------------------------------------
BUY CONTRACTS: (CONTINUED)
Citigroup Global Markets, Inc.
Republic of Colombia
8.375%, 2/15/27 150 3.02% 1/20/10 $(4,893)
Citigroup Global Markets, Inc.
Republic of Hungary
4.50%, 2/06/13 75 0.50 11/26/13 (1,167)
Citigroup Global Markets, Inc.
Republic of Philippines
10.625%, 3/16/25 130 5.60 3/20/14 (6,098)
Deutsche Bank AG London
Federal Republic of Brazil
12.25%, 3/06/30 290 4.02 4/20/10 (11,925)
SALE CONTRACTS:
Citigroup Global Markets, Inc.
Federal Republic of Brazil
12.25%, 3/06/30 609 1.98 4/20/07 11,489
Citigroup Global Markets, Inc.
Federal Republic of Brazil
12.25%, 3/06/30 200 4.40 5/20/06 7,966
Citigroup Global Markets, Inc.
Federal Republic of Brazil
12.25%, 3/06/30 400 6.35 8/20/05 12,763
Citigroup Global Markets, Inc.
Republic of Colombia
8.375%, 2/15/27 250 1.13 1/20/07 2,749
Citigroup Global Markets, Inc.
Republic of Philippines
10.625%, 3/16/25 130 4.95 3/20/09 7,432
Credit Suisse First Boston
Federal Republic of Brazil
12.25%, 3/06/30 175 6.90 6/20/07 18,184
Deutche Bank AG London
Federal Republic of Brazil
12.25%, 3/06/30 609 1.90 4/20/07 8,142
Morgan Stanley
Federal Republic of Brazil
12.25%, 3/06/30 160 3.80 8/20/06 7,667
(a) Coupon increases periodically based upon a predetermined schedule. Stated
interest rate in effect at June 30, 2005.
(b) Variable rate coupon, rate shown as of June 30, 2005.
(c) Floating rate security. Stated interest rate was in effect at June 30,
2005.
(d) A position or portion of the underlying security has been segregated by
the portfolio for the written call options outstanding at June 30, 2005. The
value of this security amounted to $819,600 at June 30, 2005.
(e) Securities are exempt from registration under Rule 144A of the Securities
Act of 1933. These securities are considered liquid and may be resold in
transactions exempt from registration, normally to qualified institutional
buyers. At June 30, 2005, the aggregate market value of these securities
amounted to $6,378,072 or 23.2% of net assets.
(f) Security is in default and is non-income producing.
(g) Pay-In- Kind payments (PIK).
(h) One contract relates to principal amount of $1.00.
(i) Non-income producing security.
Glossary of Terms:
DCB - Debt Conversion Bonds
IRB - Interest Rate Reduction Bond
See Notes to Financial Statements.
6
GLOBAL DOLLAR GOVERNMENT PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2005 (UNAUDITED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $24,843,634) $ 27,097,689
Cash 93,249
Unrealized appreciation of swap contracts 76,392
Receivable for investment securities sold 2,533,923
Interest receivable 540,804
------------
Total assets 30,342,057
------------
LIABILITIES
Outstanding call options written, at value
(premiums received $7,481) 10,051
Unrealized depreciation of swap contracts 39,234
Payable for investment securities purchased 2,688,075
Payable for capital stock redeemed 22,758
Advisory fee payable 11,100
Administrative fee payable 1,215
Distribution fee payable 1,103
Transfer agent fee payable 59
Accrued expenses 109,507
------------
Total liabilities 2,883,102
------------
NET ASSETS $ 27,458,955
============
COMPOSITION OF NET ASSETS
Capital stock, at par $ 2,006
Additional paid-in capital 23,927,527
Undistributed net investment income 807,314
Accumulated net realized gain on investment transactions 433,465
Net unrealized appreciation of investments 2,288,643
------------
$ 27,458,955
============
CLASS A SHARES
Net assets $ 21,988,138
============
Shares of capital stock outstanding 1,605,804
============
Net asset value per share $ 13.69
============
CLASS B SHARES
Net assets $ 5,470,817
============
Shares of capital stock outstanding 400,577
============
Net asset value per share $ 13.66
============
See Notes to Financial Statements.
7
GLOBAL DOLLAR GOVERNMENT PORTFOLIO
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 2005 (UNAUDITED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
INVESTMENT INCOME
Interest (net of foreign taxes withheld of $2,154) $ 1,075,528
------------
EXPENSES
Advisory fee 67,481
Distribution fee -- Class B 6,384
Custodian 111,877
Administrative 36,250
Audit 20,730
Printing 3,685
Legal 554
Directors' fees 496
Transfer agency 403
Miscellaneous 2,140
------------
Total expenses before interest 250,000
Interest expense 1,040
------------
Total expenses 251,040
------------
Net investment income 824,488
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENT TRANSACTIONS
Net realized gain on:
Investment transactions 432,889
Written options 42,706
Swap contracts 26,347
Net change in unrealized appreciation/depreciation of:
Investments (247,573)
Written options (2,888)
Swap contracts (22,460)
------------
Net gain on investment transactions 229,021
------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 1,053,509
============
See Notes to Financial Statements.
8
GLOBAL DOLLAR GOVERNMENT PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 2005 DECEMBER 31,
(UNAUDITED) 2004
============== ==============
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS
Net investment income $ 824,488 $ 1,647,165
Net realized gain on investment
transactions 501,942 2,216,471
Net change in unrealized appreciation/
depreciation of investments (272,921) (1,367,714)
-------------- --------------
Net increase in net assets from operations 1,053,509 2,495,922
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM
Net investment income
Class A (1,361,063) (1,636,884)
Class B (330,496) (308,029)
Net realized gain on investment transactions
Class A (1,031,497) -0-
Class B (258,602) -0-
CAPITAL STOCK TRANSACTIONS
Net increase (decrease) 1,476,204 (2,234,889)
-------------- --------------
Total decrease (451,945) (1,683,880)
NET ASSETS
Beginning of period 27,910,900 29,594,780
-------------- --------------
End of period (including undistributed
net investment income of $807,314 and
$1,674,385, respectively) $ 27,458,955 $ 27,910,900
============== ==============
See Notes to Financial Statements.
9
GLOBAL DOLLAR GOVERNMENT PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2005 (UNAUDITED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
NOTE A: SIGNIFICANT ACCOUNTING POLICIES
The AllianceBernstein Global Dollar Government Portfolio (the "Portfolio") is a
series of AllianceBernstein Variable Products Series Fund, Inc. (the "Fund").
The Portfolio's investment objective is to seek a high level of current income
and, secondarily, capital appreciation. The Fund was incorporated in the State
of Maryland on November 17, 1987, as an open-end series investment company. The
Fund offers twenty-three separately managed pools of assets which have
differing investment objectives and policies. The Portfolio 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.
The Portfolio 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
the Portfolio's net asset value per share.
The financial statements have been prepared in conformity with U.S. generally
accepted accounting principles, which require management to make certain
estimates and assumptions that affect the reported amounts of assets and
liabilities in the financial statements and amounts of income and expenses
during the reporting period. Actual results could differ from those estimates.
Additional information about some of the items discussed in these Notes to
Financial Statements is contained in the Portfolio's Statement of Additional
Information, which is available upon request. The following is a summary of
significant accounting policies followed by the Portfolio.
1. SECURITY VALUATION
Portfolio securities are valued at their current market value determined on the
basis of market quotations or, if market quotations are not readily available
or are deemed unreliable, at "fair value" as determined in accordance with
procedures established by and under the general supervision of the Fund's Board
of Directors.
In general, the market value of securities which are readily available and
deemed reliable are determined as follows. Securities listed on a national
securities exchange or on a foreign securities exchange are valued at the last
sale price at the close of the exchange or foreign securities exchange. If
there has been no sale on such day, the securities are valued at the mean of
the closing bid and asked prices on such day. Securities listed on more than
one exchange are valued by reference to the principal exchange on which the
securities are traded; securities not listed on an exchange but traded on The
NASDAQ Stock Market, Inc. ("NASDAQ") are valued in accordance with the NASDAQ
Official Closing Price; listed put or call options are valued at the last sale
price. If there has been no sale on that day, such securities will be valued at
the closing bid prices on that day; open futures contracts and options thereon
are valued using the closing settlement price or, in the absence of such a
price, the most recent quoted bid price. If there are no quotations available
for the day of valuation, the last available closing settlement price is used;
securities traded in the over-the-counter market, ("OTC") (but excluding
securities traded on NASDAQ) are valued at the mean of the current bid and
asked prices as reported by the National Quotation Bureau or other comparable
sources; U.S. Government securities and other debt instruments having 60 days
or less remaining until maturity are valued at amortized cost if their original
maturity was 60 days or less; or by amortizing their fair value as of the 61st
day prior to maturity if their original term to maturity exceeded 60 days;
fixed-income securities, including mortgage backed and asset backed securities,
may be valued on the basis of prices provided by a pricing service or at a
price obtained from one or more of the major broker/dealers. In cases where
broker/dealer quotes are obtained, Alliance Capital Management, L.P. (the
"Adviser") may establish procedures whereby changes in market yields or spreads
are used to adjust, on a daily basis, a recently obtained quoted price on a
security; and OTC and other derivatives are valued on the basis of a quoted bid
price or spread from a major broker/dealer in such security.
Securities for which market quotations are not readily available (including
restricted securities) or are deemed unreliable are valued at fair value.
Factors considered in making this determination may include, but are not
limited to, information obtained by contacting the issuer, analysts, analysis
of the issuer's financial statements or other available documents. In addition,
the Fund may use fair value pricing for securities primarily traded in non-U.S.
markets because, most foreign markets close well before the Fund values its
securities at 4:00 p.m., Eastern Time. The earlier close of these foreign
markets gives rise to the possibility that significant events, including broad
market moves, may have occurred in the interim and may materially affect the
value of those securities.
10
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
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 prices of such currencies against the U.S.
dollar. Purchases and sales of portfolio securities are translated into U.S.
dollars at the rates of exchange prevailing when such securities were acquired
or sold. Income and expenses are translated into U.S. dollars at rates of
exchange prevailing when accrued.
Net realized gain or loss on foreign currency transactions represents foreign
exchange gains and losses from sales and maturities of foreign fixed income
investments, foreign currency exchange contracts, holding of foreign
currencies, currency gains or losses realized between the trade and settlement
dates on foreign investments transactions, and the difference between the
amounts of dividends, interest and foreign withholding taxes recorded on the
Portfolio's books and the U.S. dollar equivalent amounts actually received or
paid. Net unrealized 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 or depreciation of investments
and foreign currency denominated assets and liabilities.
3. TAXES
It is the Portfolio's policy to meet the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute all of its
investment company taxable income and net realized gains, if any, to
shareholders. Therefore, no provisions for federal income or excise taxes are
required. The Fund may be subject to taxes imposed by countries in which it
invests. Such taxes are generally based on income and/or capital gains earned
or repatriated. Taxes are accrued and applied to net investment income, net
realized gains and net unrealized appreciation/depreciation as such income
and/or gains are earned.
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 trade date securities
are purchased or sold. Investment gains and losses are determined on the
identified cost basis. The Portfolio amortizes premiums and accretes discounts
as adjustments to interest income.
5. INCOME AND EXPENSES
Expenses attributable to a single portfolio are charged to that portfolio.
Expenses of the Fund are charged to each portfolio in proportion to net assets.
All income earned and expenses incurred by a portfolio with multi-class shares
outstanding are borne on a pro-rata basis by each outstanding class of shares,
based on the proportionate interest in the portfolio represented by the net
assets of such class, except that the portfolio's Class B shares bear the
distribution fees.
6. DIVIDENDS AND DISTRIBUTIONS
The Portfolio declares and distributes dividends and distributions from net
investment income and net realized gains, respectively, if any, at least
annually. 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 U.S. generally accepted accounting principles. 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.
7. REPURCHASE AGREEMENTS
It is the policy of the Portfolio that its custodian or designated subcustodian
take control of securities as collateral under repurchase agreements and to
determine on a daily basis that the value of such securities are sufficient to
cover the value of the repurchase agreements. If the seller defaults and the
value of the collateral declines or if bankruptcy proceedings are commenced
with respect to the seller of the security, realization of collateral by the
Portfolio may be delayed or limited.
NOTE B: ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Until September 6, 2004, under the terms of an investment advisory agreement,
the Portfolio paid the Adviser an advisory fee at an annual rate of .75% of the
Portfolio's average daily net assets. Effective September 7, 2004, the terms of
the investment advisory agreement were amended so that the advisory fee was
reduced to an annual rate of .50% of the first $2.5 billion, .45% of the next
$2.5 billion and .40% in excess of $5 billion, of the Portfolio's average daily
net assets. The fee is accrued daily and paid monthly.
11
GLOBAL DOLLAR GOVERNMENT PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
Effective January 1, 2004 through September 6, 2004, in contemplation of the
final agreement with the Office of New York Attorney General ("NYAG"), the
Adviser began waiving a portion of its advisory fee so as to charge the
Portfolio at the reduced annual rate discussed above. For a more complete
discussion of the Adviser's settlement with the NYAG, please see "Legal
Proceedings" below.
Pursuant to the advisory agreement, the Portfolio paid $36,250 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, 2005.
The Portfolio compensates Alliance Global Investor Services, Inc. (AGIS), a
wholly-owned subsidiary of the Adviser, under a Transfer Agency Agreement for
providing personnel and facilities to perform transfer agency services for the
Portfolio. Such compensation amounted to $403 for the six months ended June 30,
2005.
NOTE C: DISTRIBUTION PLAN
The Portfolio has adopted a Distribution Plan (the "Plan") for Class B shares
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the
Plan, the Portfolio pays distribution and servicing fees to AllianceBernstein
Investment Research and Management, Inc., (the "Distributor"), a wholly-owned
subsidiary of the Adviser, at an annual rate of up to .50% of the 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 limits
payments under the Plan to .25% of the Portfolio's average daily net assets
attributable to Class B shares. The Plan provides that the Distributor will use
such payments in their entirety for distribution assistance and promotional
activities.
The Portfolio is not obligated under the Plan to pay any distribution and
servicing fees in excess of the amounts set forth above. The purpose of the
payments to the Distributor under the Plan is to compensate the Distributor for
its distribution services with respect to the sale of the Portfolio's Class B
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 Plan is
characterized by the staff of the Securities and Exchange Commission as being
of the "compensation" variety.
In the event that the Plan is terminated or not continued, no distribution and
servicing fees (other than current amounts accrued but not yet paid) would be
owed by the Portfolio to the Distributor.
The Plan also provides that the Adviser may use its own resources to finance
the distribution of the Portfolio's shares.
NOTE D: INVESTMENT TRANSACTIONS
Purchases and sales of investment securities (excluding short-term investments)
for the six months ended June 30, 2005, were as follows:
PURCHASES SALES
============== ==============
Investment securities
(excluding U.S. government securities) $ 10,792,336 $ 10,268,407
U.S. government securities -0- -0-
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 the written
option and swap contracts) are as follows:
Gross unrealized appreciation $ 2,269,526
Gross unrealized depreciation (15,471)
--------------
Net unrealized appreciation $ 2,254,055
==============
1. OPTION TRANSACTIONS
For hedging and investment purposes, the Portfolio may purchase and write
(sell) put and call options on U.S. and foreign government securities and
foreign currencies that are traded on U.S. and foreign 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
12
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
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 written options which
expire unexercised are recorded by the Portfolio on the expiration date as
realized gains from options written. 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. If a
put option is exercised, the premium received reduces the cost basis of the
security or currency purchased by the Portfolio. 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.
Transactions in written options for the six months ended June 30, 2005 were as
follows:
NUMBER OF PREMIUMS
CONTRACTS RECEIVED
============== ==============
OPTIONS OUTSTANDING AT DECEMBER 31, 2004 490,000 $ 7,113
Options written 3,220,000 43,074
Options terminated in closing purchase
transactions (1,577,000) (23,962)
Options expired (1,450,000) (18,744)
-------------- --------------
OPTIONS OUTSTANDING AT JUNE 30, 2005 683,000 $ 7,481
-------------- --------------
2. SWAP AGREEMENTS
The Portfolio may enter into swaps on sovereign debt obligations to protect
itself from interest rate fluctuations on the underlying debt instruments and
for investment purposes. A swap is an agreement that obligates two parties to
exchange a series of cash flows at specified intervals based upon or calculated
by reference to changes in specified prices or rates for a specified amount of
an underlying asset. The payment flows are usually netted against each other,
with the difference being paid by one party to the other.
Risks may arise as a result of the failure of the counterparty to the swap
contract to comply with the terms of the swap contract. The loss incurred by
the failure of a counterparty is generally limited to the net interim payment
to be received by the Portfolio, and/or the termination value at the end of the
contract. Therefore, the Portfolio considers the creditworthiness of each
counterparty to a swap contract in evaluating potential credit risk.
Additionally, risks may arise from unanticipated movements in interest rates or
in the underlying value of the securities.
As of November 1, 2003, the Portfolio has adopted the method of accounting for
interim payments on swap contracts in accordance with Financial Accounting
Standards Board Statement No. 133. The Portfolio accrues for the interim
payments on swap contracts on a daily basis, with the net amount recorded
within unrealized appreciation/depreciation of swap contracts on the statement
of assets and liabilities. Once the interim payments are settled in cash, the
net amount is recorded as realized gain/loss on swaps, in addition to realized
gain/loss recorded upon the termination of swap contracts on the statements of
operations. Prior to November 1, 2003, these interim payments were reflected
within interest income/expense in the statement of operations. Fluctuations in
the value of swap contracts are recorded as a component of net change in
unrealized appreciation/depreciation of investments.
The Portfolio may enter into credit default swaps. The Portfolio may purchase
credit protection on the referenced obligation of the credit default swap ("Buy
Contract") or provide credit protection on the referenced obligation of the
credit default swap ("Sale Contract"). A sale/(buy) in a credit default swap
provides upon the occurrence of a credit event, as defined in the swap
agreement, for the Portfolio to buy/(sell) from/(to) the counterparty at the
notional amount (the "Notional Amount") and receive/(deliver) the principal
amount of the referenced obligation. If a credit event occurs, the maximum
payout amount for a Sale Contract is limited to the Notional Amount of the swap
contract ("Maximum Payout Amount"). During the term of the swap agreement, the
Portfolio receives/(pays) semi-annual fixed payments
13
GLOBAL DOLLAR GOVERNMENT PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
from/(to) the respective counterparty, calculated at the agreed upon interest
rate applied to the Notional Amount. These interim payments are recorded within
unrealized appreciation/depreciation of swap contracts on the statement of
assets and liabilities.
Credit default swaps may involve greater risks than if a Portfolio had invested
in the referenced obligation directly. Credit default swaps are subject to
general market risk, liquidity risk, counterparty risk and credit risk. If the
Portfolio is a buyer and no credit event occurs, it will lose its investment.
In addition, if the Portfolio is a seller and a credit event occurs, the value
of the referenced obligation received by the Portfolio coupled with the
periodic payments previously received, may be less than the Maximum Payout
Amount it pays to the buyer, resulting in a loss to the Portfolio
At June 30, 2005, the Portfolio had Sale Contracts outstanding with Maximum
Payout Amounts aggregating $2,533,000, with net unrealized appreciation of
$76,392 and terms ranging from 2 months to 9 years, as reflected in the
portfolio of investments.
In certain circumstances, the Portfolio may hold Sale Contracts on the same
referenced obligation and with the same counterparty it has purchased credit
protection, which may reduce its obligation to make payments on Sale Contracts,
if a credit event occurs. The Portfolio had Buy Contracts outstanding with a
Notional Amount of $860,000 with respect to the same referenced obligations and
same counterparties of certain Sale Contracts outstanding, which reduced its
obligation to make payments on Sale Contracts to $1,673,000 as of June 30, 2005.
3. REVERSE REPURCHASE AGREEMENTS
Under a reverse repurchase agreement, the Portfolio sells securities and agrees
to repurchase them at a mutually agreed upon date and price. At the time the
Portfolio enters into a reverse repurchase agreement, it will establish a
segregated account with the custodian containing liquid assets having a value
at least equal to the repurchase price.
For the six months ended June 30, 2005, the average amount of reverse
repurchase agreements outstanding was $775,243 and the daily weighted average
interest rate was .53%.
NOTE E: SECURITIES LENDING
The Portfolio has entered into a securities lending agreement with UBS Warburg
LLC (the "Lending Agent"). Under the terms of the agreement, the Lending Agent,
on behalf of the Portfolio, administers the lending of portfolio securities to
certain broker-dealers. In return, the Portfolio receives fee income from the
lending transactions or it retains a portion of interest on the investment of
any cash received as collateral. The Portfolio also continues to receive
dividends or interest on the securities loaned. Unrealized gain or loss on the
value of the securities loaned that may occur during the term of the loan will
be reflected in the accounts of the Portfolio. All loans are continuously
secured by collateral exceeding the value of the securities loaned. All
collateral consists of either cash or U.S. government securities. The Lending
Agent invests the cash collateral received in an eligible money market vehicle
in accordance with the investment restrictions of the Portfolio. The Lending
Agent will indemnify the Portfolio for any loss resulting from a borrower's
failure to return a loaned security when due. For the six months ended June 30,
2005, the Portfolio had no securities on loan.
NOTE F: CAPITAL STOCK
There are 1,000,000,000 shares of $.001 par value capital stock authorized,
divided into two classes designated Class A and Class B. Each class consist of
500,000,000 authorized shares. Transactions in capital stock were as follows:
SHARES AMOUNT
--------------------------- ------------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
JUNE 30, 2005 DECEMBER 31, JUNE 30, 2005 DECEMBER 31,
(UNAUDITED) 2004 (UNAUDITED) 2004
------------ ------------ -------------- --------------
CLASS A
Shares sold 141,989 281,328 $ 2,097,593 $ 4,025,798
Shares issued
in reinvestment
of dividends and
distributions 177,358 127,285 2,392,560 1,636,884
Shares redeemed (264,210) (677,105) (3,888,511) (9,595,145)
------------ ------------ -------------- --------------
Net increase
(decrease) 55,137 (268,492) $ 601,642 $ (3,932,463)
=========== =========== ============= =============
14
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
SHARES AMOUNT
--------------------------- ------------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
JUNE 30, 2005 DECEMBER 31, JUNE 30, 2005 DECEMBER 31,
(UNAUDITED) 2004 (UNAUDITED) 2004
------------ ------------ -------------- --------------
CLASS B
Shares sold 67,534 193,217 $ 987,982 $ 2,745,198
Shares issued
in reinvestment
of dividends and
distributions 43,799 23,990 589,098 308,029
Shares redeemed (48,440) (97,415) (702,518) (1,355,653)
------------ ------------ -------------- --------------
Net increase 62,893 119,792 $ 874,562 $ 1,697,574
=========== =========== ============= =============
NOTE G: RISKS INVOLVED IN INVESTING IN THE PORTFOLIO
Interest Rate Risk and Credit Risk--Interest rate risk is the risk that changes
in interest rates will affect the value of the Portfolio's investments in
fixed-income debt securities such as bonds or notes. Increases in interest
rates may cause the value of the Portfolio's investments to decline. Credit
risk is the risk that the issuer or guarantor of a debt security, or the
counterparty to a derivative contract, will be unable or unwilling to make
timely principal and/or interest payments, or to otherwise honor its
obligations. The degree of risk for a particular security may be reflected in
its credit risk rating. Credit risk is greater for medium quality and
lower-rated securities. Lower-rated debt securities and similar unrated
securities (commonly known as "junk bonds") have speculative elements or are
predominantly speculative risks.
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.
Indemnification Risk--In the ordinary course of business, the Portfolio enters
into contracts that contain a variety of indemnifications. The Portfolio's
maximum exposure under these arrangements is unknown. However, the Portfolio
has not had prior claims or losses pursuant to these indemnification provisions
and expects the risk of loss thereunder to be remote.
NOTE H: JOINT CREDIT FACILITY
A number of open-end mutual funds managed by the Adviser, including the
Portfolio, participate in a $500 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
Portfolio did not utilize the Facility during the six months ended June 30,
2005.
NOTE I: DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions to be paid for the year ending December 31,
2005 will be determined at the end of the current fiscal year. The tax
character of distributions paid during the fiscal years ended December 31, 2004
and December 31, 2003 were as follows:
2004 2003
============== ==============
Distributions paid from:
Ordinary income $ 1,944,913 $ 1,431,391
-------------- --------------
Total taxable distributions 1,944,913 1,431,391
-------------- --------------
Total distributions paid $ 1,944,913 $ 1,431,391
============== ==============
15
GLOBAL DOLLAR GOVERNMENT PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
As of December 31, 2004, the components of accumulated earnings/(deficit) on a
tax basis were as follows:
Undistributed ordinary income $ 1,793,219
Undistributed long-term capital gains 1,176,508(a)
Unrealized appreciation/(depreciation) 2,487,844(b)
--------------
Total accumulated earnings/(deficit) $ 5,457,571
==============
(a) During the current fiscal year, the Portfolio utilized $833,622 of capital
loss carryforwards.
(b) The difference between book-basis and tax-basis unrealized
appreciation/(depreciation) is attributable primarily to the tax deferral of
losses on wash sales and the difference between the book and tax treatment of
swap income.
NOTE J: LEGAL PROCEEDINGS
As has been previously reported, the staff of the U.S. Securities and Exchange
Commission ("SEC") and the NYAG have been investigating practices in the mutual
fund industry identified as "market timing" and "late trading" of mutual fund
shares. Certain other regulatory authorities have also been conducting
investigations into these practices within the industry and have requested that
the Adviser provide information to them. The Adviser has been cooperating and
will continue to cooperate with all of these authorities.
On December 18, 2003, the Adviser confirmed that it had reached terms with the
SEC and the NYAG for the resolution of regulatory claims relating to the
practice of "market timing" mutual fund shares in some of the AllianceBernstein
Mutual Funds. The agreement with the SEC is reflected in an Order of the
Commission ("SEC Order"). The agreement with the NYAG is memorialized in an
Assurrance of Discontinuance dated September 1, 2004 ("NYAG Order"). Among the
key provisions of these agreements are the following:
(i) The Adviser agreed to establish a $250 million fund (the "Reimbursement
Fund") to compensate mutual fund shareholders for the adverse effects of market
timing attributable to market timing relationships described in the SEC Order.
According to the SEC Order, the Reimbursement Fund is to be paid, in order of
priority, to fund investors based on (i) their aliquot share of losses suffered
by the fund due to market timing, and (ii) a proportionate share of advisory
fees paid by such fund during the period of such market timing;
(ii) The Adviser agreed to reduce the advisory fees it receives from some of
the AllianceBernstein long-term, open-end retail funds until December 31, 2008;
and
(iii) The Adviser agreed to implement changes to its governance and compliance
procedures. Additionally, the SEC Order and the NYAG Order contemplate that the
Adviser's registered investment company clients, including the Fund, will
introduce governance and compliance changes.
In anticipation of final, definitive documentation of the NYAG Order and
effective January 1, 2004, the Adviser began waiving a portion of its advisory
fee. On September 7, 2004, the Fund's investment advisory agreement was amended
to reflect the reduced advisory fee. For more information on this waiver and
amendment to the Fund's investment advisory agreement, please see "Advisory Fee
and Other Transactions with Affiliates" above.
A special committee of the Adviser's Board of Directors, comprised of the
members of the Adviser's Audit Committee and the other independent member of
the Adviser's Board, is continuing to direct and oversee an internal
investigation and a comprehensive review of the facts and circumstances
relevant to the SEC's and the NYAG's investigations.
In addition, the Independent Directors of the Fund ("the Independent
Directors") have initiated an investigation of the above-mentioned matters with
the advice of an independent economic consultant and independent counsel. The
Independent Directors have formed a special committee to supervise the
investigation.
On October 2, 2003, a putative class action complaint entitled Hindo et al. v.
AllianceBernstein Growth & Income Fund et al. (the "Hindo Complaint") was filed
against the Adviser; Alliance Capital Management Holding L.P.; Alliance Capital
Management Corporation; AXA Financial, Inc.; certain of the AllianceBernstein
Mutual Funds, including the Fund; Gerald Malone; Charles Schaffran
(collectively, the "Alliance Capital defendants"); and certain other defendants
not affiliated with the Adviser. The Hindo Complaint was filed in the United
States District Court for the Southern District of New York by alleged
shareholders of two of the AllianceBernstein Mutual Funds. The Hindo Complaint
alleges that certain of the Alliance Capital defendants failed to disclose that
they improperly allowed certain hedge funds and other
16
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
unidentified parties to engage in late trading and market timing of
AllianceBernstein Fund securities, violating Sections 11 and 15 of the
Securities Act, Sections 10(b) and 20(a) of the Exchange Act, and Sections 206
and 215 of the Advisers Act. Plaintiffs seek an unspecified amount of
compensatory damages and rescission of their contracts with the Adviser,
including recovery of all fees paid to the Adviser pursuant to such contracts.
Since October 2, 2003, numerous additional lawsuits making factual allegations
similar to those in the Hindo Complaint were filed against the Adviser and
certain other defendants, some of which name the Fund as a defendant. All of
these lawsuits seek an unspecified amount of damages. The lawsuits are now
pending in the United States District Court for the District of Maryland
pursuant to a ruling by the Judicial Panel on Multidistrict Litigation
transferring and centralizing all of the mutual fund cases involving market and
late trading in the District of Maryland.
As a result of the matters discussed above, investors in the AllianceBernstein
Mutual Funds may choose to redeem their investments. This may require the
AllianceBernstein Mutual Funds to sell investments held by those funds to
provide for sufficient liquidity and could also have an adverse effect on the
investment performance of the AllianceBernstein Mutual Funds.
The Adviser and approximately twelve other investment management firms were
publicly mentioned in connection with the settlement by the SEC of charges that
an unaffiliated broker/dealer violated federal securities laws relating to its
receipt of compensation for selling specific mutual funds and the disclosure of
such compensation. The SEC indicated publicly that, among other things, it was
considering enforcement action in connection with mutual funds' disclosure of
such arrangements and in connection with the practice of considering mutual
fund sales in the direction of brokerage commissions from fund portfolio
transactions. The SEC issued subpoenas to the Adviser, and the NASD issued
requests for information in connection with this matter and the Adviser
provided documents and other information to the SEC and NASD and cooperated
fully with the investigations. On June 8, 2005 the NASD announced that it had
reached a settlement with the Distributor in connection with this matter.
Management of the Adviser expects that the settlement has resolved both
regulatory inquiries described above.
On June 22, 2004, a purported class action complaint entitled Aucoin, et al. v.
Alliance Capital Management L.P., et al. ("Aucoin Complaint") was filed against
the Adviser, Alliance Capital Management Holding L.P., Alliance Capital
Management Corporation, AXA Financial, Inc., AllianceBernstein Investment
Research & Management, Inc., certain current and former directors of the
AllianceBernstein Mutual Funds, and unnamed Doe defendants. The Aucoin
Complaint names certain of the AllianceBernstein mutual funds as nominal
defendants. The Aucoin Complaint was filed in the United States District Court
for the Southern District of New York by an alleged shareholder of an
AllianceBernstein mutual fund. The Aucoin Complaint alleges, among other
things, (i) that certain of the defendants improperly authorized the payment of
excessive commissions and other fees from fund assets to broker-dealers in
exchange for preferential marketing services, (ii) that certain of the
defendants misrepresented and omitted from registration statements and other
reports material facts concerning such payments, and (iii) that certain
defendants caused such conduct as control persons of other defendants. The
Aucoin Complaint asserts claims for violation of Sections 34(b), 36(b) and
48(a) of the Investment Company Act, Sections 206 and 215 of the Advisers Act,
breach of common law fiduciary duties, and aiding and abetting breaches of
common law fiduciary duties. Plaintiffs seek an unspecified amount of
compensatory damages and punitive damages, rescission of their contracts with
the Adviser, including recovery of all fees paid to the Adviser pursuant to
such contracts, an accounting of all fund-related fees, commissions and soft
dollar payments, and restitution of all unlawfully or discriminatorily obtained
fees and expenses.
Since June 22, 2004, numerous additional lawsuits making factual allegations
substantially similar to those in the Aucoin Complaint were filed against the
Adviser and certain other defendants, and others may be filed.
It is possible that these matters and/or other developments resulting from
these matters could result in increased redemptions of the Fund's shares or
other adverse consequences to the Fund. However, the Adviser believes that
these matters are not likely to have a material adverse effect on its ability
to perform advisory services relating to the Fund.
17
GLOBAL DOLLAR GOVERNMENT PORTFOLIO
FINANCIAL HIGHLIGHTS
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
CLASS A
----------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 2005 ---------------------------------------------------------------
(UNAUDITED) 2004(a) 2003 2002 2001(b) 2000
----------- ----------- ----------- ----------- ----------- -----------
Net asset value, beginning of period $14.79 $14.53 $11.43 $10.63 $10.76 $10.79
INCOME FROM INVESTMENT OPERATIONS
Net investment income (c) .45 .86(d) .95 .94(d) 1.11(d) 1.27(d)
Net realized and unrealized gain (loss)
on investment transactions .12 .45 2.83 .70 (.10) .14
Net increase in net asset value
from operations .57 1.31 3.78 1.64 1.01 1.41
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.95) (1.05) (.68) (.84) (1.14) (1.44)
Distributions from net realized gain
on investment transactions (.72) -0- -0- -0- -0- -0-
Total dividends and distributions (1.67) (1.05) (.68) (.84) (1.14) (1.44)
Net asset value, end of period $13.69 $14.79 $14.53 $11.43 $10.63 $10.76
TOTAL RETURN
Total investment return based on
net asset value (e) 4.07% 10.12% 33.41% 16.14% 9.37% 14.06%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $21,988 $22,932 $26,433 $22,198 $11,249 $9,423
Ratio to average net assets of:
Expenses, net of waivers and
reimbursements 1.81%(f) 1.76% 1.90% 1.40% .95% .95%
Expenses, before waivers and
reimbursements 1.81%(f) 1.93% 1.90% 2.00% 2.37% 2.42%
Expenses, before waivers and
reimbursements excluding
interest expense 1.81%(f) 1.92% 1.88% 2.00% 2.37% 2.42%
Net investment income 6.15%(f) 6.07%(d) 7.20% 8.83%(d) 10.63%(d) 11.71%(d)
Portfolio turnover rate 43% 188% 150% 142% 176% 148%
See footnote summary on page 19.
18
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
CLASS B
---------------------------------------------------
SIX MONTHS JULY 22,
ENDED YEAR ENDED DECEMBER 31, 2002(g) TO
JUNE 30, 2005 ------------------------ DECEMBER 31,
(UNAUDITED) 2004(a) 2003 2002
----------- ----------- ----------- ------------
Net asset value, beginning of period $14.74 $14.51 $11.42 $10.20
INCOME FROM INVESTMENT OPERATIONS
Net investment income (c) .43 .82(d) .88 .35(d)
Net realized and unrealized gain
on investment transactions .13 .45 2.89 .87
Net increase in net asset value from
operations .56 1.27 3.77 1.22
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.92) (1.04) (.68) -0-
Distributions from net realized gain
on investment transactions (.72) -0- -0- -0-
Total dividends and distributions (1.64) (1.04) (.68) -0-
Net asset value, end of period $13.66 $14.74 $14.51 $11.42
TOTAL RETURN
Total investment return based on
net asset value (e) 4.02% 9.81% 33.34% 11.96%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $5,471 $4,979 $3,162 $226
Ratio to average net assets of:
Expenses, net of waivers and
reimbursements 2.06%(f) 2.07% 2.14% 1.63%(f)
Expenses, before waivers and
reimbursements 2.06%(f) 2.24% 2.14% 1.99%(f)
Expenses, before waivers and
reimbursements excluding
interest expense 2.06%(f) 2.23% 2.12% 1.99%(f)
Net investment income 5.95%(f) 5.74%(d) 6.67% 9.12%(d)(f)
Portfolio turnover rate 43% 188% 150% 142%
(a) As of November 1, 2003, the Portfolio has adopted the method of accounting
for interim payments on swap contracts in accordance with Financial Accounting
Standards Board Statement No. 133. These interim payments are reflected within
net realized and unrealized gain (loss) on swap contracts, however, prior to
November 1, 2003, these interim payments were reflected within interest
income/expense on the statement of operations. The effect of this change for
the year ended December 31, 2004, was to decrease net investment income per
share by $.02 and increase net realized and unrealized gain (loss) on
investment transactions per share by $.02 for Class A and B. Consequently, the
ratios of net investment income to average net assets were decreased by 0.17%
for Class A and B respectively.
(b) As required, effective January 1, 2001, the Portfolio has adopted the
provisions of the AICPA Audit and Accounting Guide, Audits of Investment
Companies, and began amortizing premium on debt securities. For the year ended
December 31, 2001, the effect of this change to Class A was to decrease net
investment income by less than $.01 per share, decrease net realized and
unrealized loss on investments by less than $.01 per share, and decrease the
ratio of net investment income to average net assets from 10.65% to 10.63%. Per
share, ratios and supplemental data for periods prior to January 1, 2001 have
not been restated to reflect this change in presentation.
(c) Based on average shares outstanding.
(d) Net of expenses waived or reimbursed by the Adviser.
(e) 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 return does not reflect the
deduction of taxes that a shareholder would pay on Portfolio distributions or
the redemption of Portfolio shares. Total investment return calculated for a
period of less than one year is not annualized.
(f) Annualized.
(g) Commencement of distribution.
19
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- -------------------------------------------------------------------------------
SEMI-ANNUAL REPORT
- -------------------------------------------------------------------------------
[LOGO] ALLIANCEBERNSTEIN (R)
Investment Research and Management
AllianceBernstein Variable Products Series Fund, Inc.
Semi-Annual Report
June 30, 2005
> AllianceBernstein Growth & Income Portfolio
INVESTMENT PRODUCTS OFFERED
- ---------------------------
> ARE NOT FDIC INSURED
> MAY LOSE VALUE
> ARE NOT BANK GUARANTEED
- ---------------------------
YOU MAY OBTAIN A DESCRIPTION OF THE FUND'S PROXY VOTING POLICIES AND
PROCEDURES, AND INFORMATION REGARDING HOW THE FUND VOTED PROXIES RELATING TO
PORTFOLIO SECURITIES DURING THE MOST RECENT 12-MONTH PERIOD ENDED JUNE 30,
WITHOUT CHARGE. SIMPLY VISIT THE SECURITIES AND EXCHANGE COMMISSION'S (THE
"COMMISSION") WEB SITE AT WWW.SEC.GOV, OR CALL ALLIANCEBERNSTEIN AT (800)
227-4618.
THE FUND FILES ITS COMPLETE SCHEDULE OF PORTFOLIO HOLDINGS WITH THE COMMISSION
FOR THE FIRST AND THIRD QUARTERS OF EACH FISCAL YEAR ON FORM N-Q. THE FUND'S
FORMS N-Q ARE AVAILABLE ON THE COMMISSION'S WEB SITE AT WWW.SEC.GOV. THE FUND'S
FORMS N-Q MAY ALSO BE REVIEWED AND COPIED AT THE COMMISSION'S PUBLIC REFERENCE
ROOM IN WASHINGTON, DC; INFORMATION ON THE OPERATION OF THE PUBLIC REFERENCE
ROOM MAY BE OBTAINED BY CALLING (800) SEC-0330.
GROWTH & INCOME PORTFOLIO
FUND EXPENSES
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including sales charges (loads) on purchase payments, contingent
deferred sales charges on redemptions and (2) ongoing costs, including
management fees; distribution (12b-1) fees; and other Fund expenses. This
example is intended to help you understand your ongoing costs (in dollars) of
investing in the Fund and to compare these costs with the ongoing costs of
investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of
the period and held for the entire period as indicated below.
ACTUAL EXPENSES
The first line of the table below provides information about actual account
values and actual expenses. You may use the information in this line, together
with the amount you invested, to estimate the expenses that you paid over the
period. Simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
in the first line under the heading entitled "Expenses Paid During Period" to
estimate the expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio and an assumed annual rate of return of 5% before expenses, which is not
the Fund's actual return. The hypothetical account values and expenses may not
be used to estimate the actual ending account balance or expenses you paid for
the period. You may use this information to compare the ongoing costs of
investing in the Fund and other funds by comparing this 5% hypothetical example
with the 5% hypothetical examples that appear in the shareholder reports of
other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads), or contingent deferred sales charges on redemptions.
Therefore, the second line of the table is useful in comparing ongoing costs
only, and will not help you determine the relative total costs of owning
different funds. In addition, if these transactional costs were included, your
costs would have been higher.
BEGINNING ENDING
ACCOUNT VALUE ACCOUNT VALUE EXPENSES PAID ANNUALIZED
GROWTH & INCOME PORTFOLIO JANUARY 1, 2005 JUNE 30, 2005 DURING PERIOD* EXPENSE RATIO*
- ---------------------------------------------------------------------------------------------------------------
CLASS A
Actual $1,000 $ 998.06 $2.92 0.59%
Hypothetical (5% return before expenses) $1,000 $1,021.87 $2.96 0.59%
CLASS B
Actual $1,000 $ 996.75 $4.16 0.84%
Hypothetical (5% return before expenses) $1,000 $1,020.63 $4.21 0.84%
* Expenses are equal to each classes' annualized expense ratios, multiplied by
the average account value over the period, multiplied by the number of days in
the most recent fiscal half-year/365 (to reflect the one-half year period).
1
GROWTH & INCOME PORTFOLIO
TEN LARGEST HOLDINGS
JUNE 30, 2005 (UNAUDITED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
PERCENT OF
COMPANY U.S. $ VALUE NET ASSETS
_______________________________________________________________________________
American International Group, Inc. $ 127,082,130 4.8%
- -------------------------------------------------------------------------------
Microsoft Corp. 125,822,052 4.7
- -------------------------------------------------------------------------------
General Electric Co. 125,041,455 4.7
- -------------------------------------------------------------------------------
Citigroup, Inc. 110,794,818 4.1
- -------------------------------------------------------------------------------
Altria Group, Inc. 86,178,848 3.2
- -------------------------------------------------------------------------------
Fannie Mae 75,920,000 2.8
- -------------------------------------------------------------------------------
Time Warner, Inc. 75,210,039 2.8
- -------------------------------------------------------------------------------
The Home Depot, Inc. 73,910,000 2.8
- -------------------------------------------------------------------------------
Viacom, Inc. Cl.B 72,061,010 2.7
- -------------------------------------------------------------------------------
WellPoint Health Networks, Inc. 70,475,680 2.6
-------------- -----
- -------------------------------------------------------------------------------
$ 942,496,032 35.2%
- -------------------------------------------------------------------------------
SECTOR DIVERSIFICATION
JUNE 30, 2005 (UNAUDITED)
PERCENT OF
SECTOR U.S. $ VALUE NET ASSETS
_______________________________________________________________________________
Finance $ 636,159,135 23.8%
- -------------------------------------------------------------------------------
Consumer Services 365,372,234 13.7
- -------------------------------------------------------------------------------
Consumer Staples 289,954,917 10.8
- -------------------------------------------------------------------------------
Technology 249,398,906 9.3
- -------------------------------------------------------------------------------
Healthcare 248,611,263 9.3
- -------------------------------------------------------------------------------
Energy 238,964,433 8.9
- -------------------------------------------------------------------------------
Capital Goods 217,314,571 8.1
- -------------------------------------------------------------------------------
Utilities 154,157,463 5.8
- -------------------------------------------------------------------------------
Transportation 98,496,232 3.7
- -------------------------------------------------------------------------------
Basic Industry 85,148,601 3.2
- -------------------------------------------------------------------------------
Consumer Manufacturing 29,163,744 1.1
- -------------------------------------------------------------------------------
Multi-Industry Companies 12,420,282 0.5
- -------------------------------------------------------------------------------
Aerospace & Defense 10,954,000 0.4
-------------- -----
- -------------------------------------------------------------------------------
Total Investments* 2,636,115,781 98.6
- -------------------------------------------------------------------------------
Cash and receivables, net of liabilities 38,553,602 1.4
-------------- -----
- -------------------------------------------------------------------------------
Net Assets $2,674,669,383 100.0%
- -------------------------------------------------------------------------------
* Excludes short-term investments.
Please Note: The sector classifications presented herein are based on the
sector categorization methodology of the Adviser.
2
GROWTH & INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2005 (UNAUDITED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------------
COMMON STOCKS-98.6%
FINANCE-23.8%
BANKING - MONEY CENTER-3.0%
JPMorgan Chase & Co. 1,918,900 $ 67,775,548
Wachovia Corp. 268,600 13,322,560
--------------
81,098,108
--------------
BANKING - REGIONAL-2.5%
Bank of America Corp. 914,800 41,724,028
North Fork Bancorporation, Inc. 920,100 25,845,609
--------------
67,569,637
--------------
BROKERAGE & MONEY MANAGEMENT-2.4%
The Goldman Sachs Group, Inc. 28,100 2,866,762
Merrill Lynch & Co., Inc. 769,200 42,313,692
Morgan Stanley 329,800 17,304,606
--------------
62,485,060
--------------
INSURANCE-8.9%
ACE Ltd. (Cayman Islands) 1,131,100 50,729,835
AFLAC, Inc. 181,400 7,850,992
American International Group, Inc. 2,187,300 127,082,129
Axis Capital Holdings Ltd. (Bermuda) 1,083,300 30,657,390
MetLife, Inc. 488,900 21,971,166
--------------
238,291,512
--------------
MORTGAGE BANKING-2.8%
Fannie Mae 1,300,000 75,920,000
--------------
MISCELLANEOUS-4.2%
Citigroup, Inc. 2,396,600 110,794,818
--------------
636,159,135
--------------
CONSUMER SERVICES-13.7%
BROADCASTING & CABLE-9.9%
Comcast Corp. Cl. A (a) 750,000 23,025,000
Comcast Corp. Special Cl. A (a) 825,000 24,708,750
News Corp. Cl. A 3,119,700 50,476,746
Time Warner, Inc. (a) 4,500,900 75,210,039
Viacom, Inc. Cl. B 2,250,500 72,061,010
Westwood One, Inc. 946,300 19,332,909
--------------
264,814,454
--------------
ENTERTAINMENT & LEISURE-0.4%
Harley-Davidson, Inc. 111,400 5,525,440
Royal Caribbean Cruises Ltd. (Liberia) 104,500 5,053,620
--------------
10,579,060
--------------
RETAIL - GENERAL MERCHANDISE-3.4%
Lowe's Cos., Inc. 276,000 16,068,720
The Home Depot, Inc. 1,900,000 73,910,000
--------------
89,978,720
--------------
365,372,234
--------------
CONSUMER STAPLES-10.8%
COSMETICS-3.1%
Avon Products, Inc. 1,861,900 70,472,915
The Estee Lauder Cos., Inc. Cl. A 341,600 13,366,808
--------------
83,839,723
--------------
HOUSEHOLD PRODUCTS-2.6%
Colgate-Palmolive Co. 416,000 20,762,560
The Procter & Gamble Co. 934,600 49,300,150
--------------
70,062,710
--------------
TOBACCO-4.4%
Altria Group, Inc. 1,332,800 86,178,848
Loews Corp. - Carolina Group 899,300 29,964,676
--------------
116,143,524
--------------
MISCELLANEOUS-0.7%
Fortune Brands, Inc. 224,200 19,908,960
--------------
289,954,917
--------------
TECHNOLOGY-9.3%
COMMUNICATION EQUIPMENT-0.9%
QUALCOMM, Inc. 692,100 22,846,221
--------------
COMPUTER SERVICES-1.8%
Fiserv, Inc. (a) 1,133,700 48,692,415
--------------
SEMICONDUCTOR COMPONENTS-0.3%
Texas Instruments, Inc. 334,800 9,397,836
--------------
SOFTWARE-6.3%
Microsoft Corp. 5,065,300 125,822,052
Oracle Corp. (a) 1,973,200 26,046,240
Symantec Corp. (a) 763,300 16,594,142
--------------
168,462,434
--------------
249,398,906
--------------
3
GROWTH & INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS
(CONTINUED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------------
HEALTHCARE-9.3%
BIOTECHNOLOGY-0.3%
Applera Corp. - Applied Biosystems Group 408,900 $ 8,043,063
--------------
DRUGS-2.6%
Eli Lilly & Co. 639,300 35,615,403
Forest Laboratories, Inc. (a) 340,100 13,212,885
Pfizer, Inc. 716,500 19,761,070
--------------
68,589,358
--------------
MEDICAL PRODUCTS-2.2%
Boston Scientific Corp. (a) 2,207,300 59,597,100
--------------
MEDICAL SERVICES-4.2%
Health Management Associates, Inc. Cl. A 863,600 22,609,048
UnitedHealth Group, Inc. 370,100 19,297,014
WellPoint Health Networks, Inc. (a) 1,012,000 70,475,680
--------------
112,381,742
--------------
248,611,263
--------------
ENERGY-8.9%
DOMESTIC PRODUCERS-1.0%
Noble Energy, Inc. 359,900 27,226,435
--------------
INTERNATIONAL-2.7%
BP p.l.c. (ADR) (United Kingdom) 402,900 25,132,902
Exxon Mobil Corp. 819,200 47,079,424
--------------
72,212,326
--------------
OIL SERVICE-3.5%
Baker Hughes, Inc. 575,600 29,447,696
EnCana Corp. (Canada) 209,000 8,274,310
FMC Technologies, Inc. (a) 39,670 1,268,250
Marathon Oil Corp. 219,300 11,704,041
Nabors Industries Ltd. (Bermuda) (a) 382,500 23,187,150
Schlumberger Ltd. (Netherlands) 273,700 20,784,778
--------------
94,666,225
--------------
MISCELLANEOUS-1.7%
ConocoPhillips 780,300 44,859,447
--------------
238,964,433
--------------
CAPITAL GOODS-8.1%
ELECTRICAL EQUIPMENT-1.5%
Emerson Electric Co. 483,350 30,272,211
Johnson Controls, Inc. 170,700 9,615,531
--------------
39,887,742
--------------
MACHINERY-0.6%
Deere & Co. 64,600 4,230,654
Ingersoll-Rand Co. Cl. A (Bermuda) 181,200 12,928,620
--------------
17,159,274
--------------
MISCELLANEOUS-6.0%
General Electric Co. 3,608,700 125,041,455
United Technologies Corp. 686,000 35,226,100
--------------
160,267,555
--------------
217,314,571
--------------
UTILITIES-5.8%
ELECTRIC & GAS UTILITY-1.7%
Entergy Corp. 261,100 19,726,105
PPL Corp. 285,900 16,976,742
Sempra Energy 182,200 7,526,682
--------------
44,229,529
--------------
TELEPHONE UTILITY-4.1%
BellSouth Corp. 865,200 22,988,364
SBC Communications, Inc. 2,107,100 50,043,625
Verizon Communications, Inc. 1,067,900 36,895,945
--------------
109,927,934
--------------
154,157,463
--------------
TRANSPORTATION-3.7%
AIR FREIGHT-0.9%
United Parcel Service, Inc. Cl. B 357,200 24,703,952
--------------
RAILROAD-2.8%
Burlington Northern Santa Fe Corp. 191,000 8,992,280
Union Pacific Corp. 1,000,000 64,800,000
--------------
73,792,280
--------------
98,496,232
--------------
BASIC INDUSTRY-3.2%
CHEMICALS-3.2%
Air Products and Chemicals, Inc. 956,200 57,658,860
E.I. du Pont de Nemours & Co. 503,500 21,655,535
Rohm and Haas Co. 125,900 5,834,206
--------------
85,148,601
--------------
CONSUMER MANUFACTURING-1.1%
BUILDING & RELATED-1.1%
American Standard Cos., Inc. 695,700 29,163,744
--------------
4
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
SHARES OR
PRINCIPAL
AMOUNT
COMPANY (000) U.S. $ VALUE
- -------------------------------------------------------------------------------
MULTI-INDUSTRY COMPANIES-0.5%
Danaher Corp. 237,300 $ 12,420,282
--------------
AEROSPACE & DEFENSE-0.4%
AEROSPACE-0.4%
General Dynamics Corp. 100,000 10,954,000
--------------
Total Common Stocks
(cost $2,360,094,318) 2,636,115,781
--------------
SHORT-TERM INVESTMENT-1.4%
TIME DEPOSIT-1.4%
The Bank of New York
2.063%, 7/01/05
(cost $39,069,000) $39,069 39,069,000
--------------
TOTAL INVESTMENTS-100.0%
(cost $2,399,163,318) 2,675,184,781
Other assets less liabilities-0.0% (515,398)
--------------
NET ASSETS-100% $2,674,669,383
==============
(a) Non-income producing security.
Glossary:
ADR - American Depositary Receipt
See Notes to Financial Statements.
5
GROWTH & INCOME PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2005 (UNAUDITED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $2,399,163,318) $2,675,184,781
Cash 1,263
Receivable for investment securities sold 30,332,700
Dividends and interest receivable 3,378,400
Receivable for capital stock sold 1,159,177
--------------
Total assets 2,710,056,321
--------------
LIABILITIES
Payable for investment securities purchased 29,151,486
Payable for capital stock redeemed 4,150,328
Advisory fee payable 1,207,971
Distribution fee payable 432,410
Administrative fee payable 1,215
Transfer agent fee payable 59
Accrued expenses 443,469
--------------
Total liabilities 35,386,938
--------------
NET ASSETS $2,674,669,383
==============
COMPOSITION OF NET ASSETS
Capital stock, at par $ 113,657
Additional paid-in capital 2,395,029,279
Undistributed net investment income 13,259,729
Accumulated net realized loss on investment transactions (9,754,745)
Net unrealized appreciation of investments 276,021,463
--------------
$2,674,669,383
==============
CLASS A SHARES
Net assets $ 596,388,676
==============
Shares of capital stock outstanding 25,184,733
==============
Net asset value per share $ 23.68
==============
CLASS B SHARES
Net assets $2,078,280,707
==============
Shares of capital stock outstanding 88,472,344
==============
Net asset value per share $ 23.49
==============
See Notes to Financial Statements.
6
GROWTH & INCOME PORTFOLIO
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 2005 (UNAUDITED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
INVESTMENT INCOME
Dividends (net of foreign taxes withheld of $7,479) $ 23,565,513
Interest 393,490
--------------
Total investment income 23,959,003
--------------
EXPENSES
Advisory fee 7,237,992
Distribution fee -- Class B 2,567,286
Printing 346,185
Custodian 142,151
Legal 52,135
Administrative 36,250
Audit 20,730
Directors' fees 496
Transfer agency 403
Miscellaneous 77,443
--------------
Total expenses 10,481,071
--------------
Net investment income 13,477,932
--------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENT TRANSACTIONS
Net realized gain on investment transactions 156,443,168
Net change in unrealized appreciation/depreciation of
investments (179,904,273)
--------------
Net loss on investment transactions (23,461,105)
--------------
NET DECREASE IN NET ASSETS FROM OPERATIONS $ (9,983,173)
==============
See Notes to Financial Statements.
7
GROWTH & INCOME PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 2005 DECEMBER 31,
(UNAUDITED) 2004
============== ==============
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS
Net investment income $ 13,477,932 $ 35,537,953
Net realized gain on investment
transactions 156,443,168 105,022,737
Net change in unrealized appreciation/
depreciation of investments (179,904,273) 128,326,583
-------------- --------------
Net increase (decrease) in net assets
from operations (9,983,173) 268,887,273
DIVIDENDS TO SHAREHOLDERS FROM
Net investment income
Class A (8,911,022) (5,566,213)
Class B (26,654,855) (13,683,981)
CAPITAL STOCK TRANSACTIONS
Net increase 47,788,584 147,448,288
-------------- --------------
Total increase 2,239,534 397,085,367
NET ASSETS
Beginning of period 2,672,429,849 2,275,344,482
-------------- --------------
End of period (including undistributed
net investment income of $13,259,729
and $35,347,674, respectively) $2,674,669,383 $2,672,429,849
============== ==============
See Notes to Financial Statements.
8
GROWTH & INCOME PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2005 (UNAUDITED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
NOTE A: SIGNIFICANT ACCOUNTING POLICIES
The AllianceBernstein Growth & Income Portfolio (the "Portfolio") is a series
of AllianceBernstein 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 offers twenty-three separately managed pools of assets which
have differing investment objectives and policies. The Portfolio 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.
The Portfolio 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
the Portfolio's net asset value per share.
The financial statements have been prepared in conformity with U.S. generally
accepted accounting principles, which require management to make certain
estimates and assumptions that affect the reported amounts of assets and
liabilities in the financial statements and amounts of income and expenses
during the reporting period. Actual results could differ from those estimates.
Additional information about some of the items discussed in these Notes to
Financial Statements is contained in the Portfolio's Statement of Additional
Information, which is available upon request. The following is a summary of
significant accounting policies followed by the Portfolio.
1. SECURITY VALUATION
Portfolio securities are valued at their current market value determined on the
basis of market quotations or, if market quotations are not readily available
or are deemed unreliable, at "fair value" as determined in accordance with
procedures established by and under the general supervision of the Fund's Board
of Directors.
In general, the market value of securities which are readily available and
deemed reliable are determined as follows. Securities listed on a national
securities exchange or on a foreign securities exchange are valued at the last
sale price at the close of the exchange or foreign securities exchange. If
there has been no sale on such day, the securities are valued at the mean of
the closing bid and asked prices on such day. Securities listed on more than
one exchange are valued by reference to the principal exchange on which the
securities are traded; securities not listed on an exchange but traded on The
NASDAQ Stock Market, Inc. ("NASDAQ") are valued in accordance with the NASDAQ
Official Closing Price; listed put or call options are valued at the last sale
price. If there has been no sale on that day, such securities will be valued at
the closing bid prices on that day; open futures contracts and options thereon
are valued using the closing settlement price or, in the absence of such a
price, the most recent quoted bid price. If there are no quotations available
for the day of valuation, the last available closing settlement price is used;
securities traded in the over-the-counter market, ("OTC") (but excluding
securities traded on NASDAQ) are valued at the mean of the current bid and
asked prices as reported by the National Quotation Bureau or other comparable
sources; U.S. Government securities and other debt instruments having 60 days
or less remaining until maturity are valued at amortized cost if their original
maturity was 60 days or less; or by amortizing their fair value as of the 61st
day prior to maturity if their original term to maturity exceeded 60 days;
fixed-income securities, including mortgage backed and asset backed securities,
may be valued on the basis of prices provided by a pricing service or at a
price obtained from one or more of the major broker/dealers. In cases where
broker/dealer quotes are obtained, Alliance Capital Management, L.P. (the
"Adviser") may establish procedures whereby changes in market yields or spreads
are used to adjust, on a daily basis, a recently obtained quoted price on a
security; and OTC and other derivatives are valued on the basis of a quoted bid
price or spread from a major broker/dealer in such security.
Securities for which market quotations are not readily available (including
restricted securities) or are deemed unreliable are valued at fair value.
Factors considered in making this determination may include, but are not
limited to, information obtained by contacting the issuer, analysts, analysis
of the issuer's financial statements or other available documents. In addition,
the Fund may use fair value pricing for securities primarily traded in non-U.S.
markets because, most foreign markets close well before the Fund values its
securities at 4:00 p.m., Eastern Time. The earlier close of these foreign
markets gives rise to the possibility that significant events, including broad
market moves, may have occurred in the
9
GROWTH & INCOME PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
interim and may materially affect the value of those securities. To account for
this, the Fund may frequently value many of its foreign equity securities using
fair value prices based on third party vendor modeling tools to the extent
available.
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 prices of such currencies against the U.S.
dollar. Purchases and sales of portfolio securities are translated into U.S.
dollars at the rates of exchange prevailing when such securities were acquired
or sold. Income and expenses are translated into U.S. Dollars at rates of
exchange prevailing when accrued.
Net realized gain or loss on foreign currency transactions represents foreign
exchange gains and losses from sales and maturities of foreign fixed income
investments, foreign currency exchange contracts, holding of foreign
currencies, currency gains or losses realized between the trade and settlement
dates on foreign investment transactions, and the difference between the
amounts of dividends, interest and foreign withholding taxes recorded on the
Portfolio's books and the U.S. dollar equivalent amounts actually received or
paid. Net unrealized 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 or depreciation of investments
and foreign currency denominated assets and liabilities.
3. TAXES
It is the Portfolio's policy to meet the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute all of its
investment company taxable income and net realized gains, if any, to
shareholders. Therefore, no provisions for federal income or excise taxes are
required. The Portfolio may be subject to taxes imposed by countries in which
it invests. Such taxes are generally based on income and/or capital gains
earned or repatriated. Taxes are accrued and applied to net investment income,
net realized gains and net unrealized appreciation/depreciation as such income
and/or gains are earned.
4. INVESTMENT INCOME AND INVESTMENT TRANSACTIONS
Dividend income is recorded on the ex-dividend date or as soon as the Portfolio
is informed of the dividend. Interest income is accrued daily. Investment
transactions are accounted for on the date securities are purchased or sold.
Investment gains and losses are determined on the identified cost basis. The
Portfolio amortizes premiums and accretes discounts as adjustments to interest
income.
5. INCOME AND EXPENSES
Expenses attributable to a single portfolio are charged to that portfolio.
Expenses of the Fund are charged to each portfolio in proportion to net assets.
All income earned and expenses incurred by a portfolio with multi-class shares
outstanding are borne on a pro-rata basis by each outstanding class of shares,
based on the proportionate interest in the portfolio represented by the net
assets of such class, except that the portfolio's Class B shares bear the
distribution fees.
6. DIVIDENDS AND DISTRIBUTIONS
The Portfolio declares and distributes dividends and distributions from net
investment income and net realized gains, respectively, if any, at least
annually. 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 U.S. generally accepted accounting principles. 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
Until September 6, 2004, under the terms of an investment advisory agreement,
the Portfolio paid the Adviser an advisory fee at an annual rate of .625% of
the Portfolio's average daily net assets. Effective September 7, 2004, the
terms of the investment advisory agreement were amended so that the advisory
fee was reduced to an annual rate of .55% of the first $2.5 billion, .45% of
the next $2.5 billion and .40% in excess of $5 billion, of the Portfolio's
average daily net assets. The fee is accrued daily and paid monthly.
10
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
Effective January 1, 2004 through September 6, 2004, in contemplation of the
final agreement with the Office of New York Attorney General ("NYAG"), the
Adviser began waiving a portion of its advisory fee so as to charge the
Portfolio at the reduced annual rate discussed above. For a more complete
discussion of the Adviser's settlement with the NYAG, please see "Legal
Proceedings" below.
Pursuant to the advisory agreement, the Portfolio paid $36,250 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, 2005.
Brokerage commissions paid on investment transactions for the six months ended
June 30, 2005 amounted to $1,836,548, of which $178,081 and $0, respectively,
was paid to Sanford C. Bernstein &Co. LLC and Sanford C. Bernstein Limited,
affiliates of the Adviser.
The Portfolio compensates Alliance Global Investor Services, Inc., a
wholly-owned subsidiary of the Adviser, under a Transfer Agency Agreement for
providing personnel and facilities to perform transfer agency services for the
Portfolio. Such compensation amounted to $403 for the six months ended June 30,
2005.
NOTE C: DISTRIBUTION PLAN
The Portfolio has adopted a Distribution Plan (the "Plan") for Class B shares
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the
Plan, the Portfolio pays distribution and servicing fees to AllianceBernstein
Investment Research and Management, Inc. (the "Distributor"), a wholly-owned
subsidiary of the Adviser, at an annual rate of up to .50% of the 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 limits
payments under the Plan to .25% of the Portfolio's average daily net assets
attributable to Class B shares. The Plan provides that the Distributor will use
such payments in their entirety for distribution assistance and promotional
activities.
The Portfolio is not obligated under the Plan to pay any distribution and
servicing fees in excess of the amounts set forth above. The purpose of the
payments to the Distributor under the Plan is to compensate the Distributor for
its distribution services with respect to the sale of the Portfolio's Class B
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 Plan is
characterized by the staff of the Securities and Exchange Commission as being
of the "compensation" variety.
In the event that the Plan is terminated or not continued, no distribution and
servicing fees (other than current amounts accrued but not yet paid) would be
owed by the Portfolio to the Distributor.
The Plan also provides that the Adviser may use its own resources to finance
the distribution of the Portfolio's shares.
NOTE D: INVESTMENT TRANSACTIONS
Purchases and sales of investment securities (excluding short-term investments)
for the six months ended June 30, 2005, were as follows:
PURCHASES SALES
============== ==============
Investment securities
(excluding U.S. government securities) $ 898,119,958 $ 838,903,273
U.S. government securities -0- -0-
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 $ 337,419,506
Gross unrealized depreciation (61,398,043)
--------------
Net unrealized appreciation $ 276,021,463
==============
1. FORWARD EXCHANGE CURRENCY CONTRACTS
The Portfolio may enter into forward exchange currency contracts in order to
hedge its exposure to changes in foreign currency exchange rates on its 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
11
GROWTH & INCOME PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
purchase or sell a foreign currency on a future date at a negotiated forward
rate. The gain or loss arising from the difference between the original
contract and the closing of such contract would be included in net realized
gain or loss on foreign currency transactions.
Fluctuations in the value of open forward exchange currency contracts are
recorded for financial reporting purposes as unrealized appreciation and
depreciation by the Portfolio.
The Portfolio's custodian will place and maintain cash not available for
investment or other liquid assets in a separate account of the Portfolio having
a value at least equal to the aggregate amount of the Portfolio's commitments
under forward exchange currency contracts entered into with respect to position
hedges.
Risks may arise from the potential inability of the 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 the Portfolio has in that particular
currency contract.
2. OPTION TRANSACTIONS
For hedging and investment purposes, the Portfolio may purchase and write
(sell) put and call options on U.S. and foreign government securities and
foreign currencies that are traded on U.S. and foreign 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 written options which
expire unexercised are recorded by the Portfolio on the expiration date as
realized gains from options written. 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. If a
put option is exercised, the premium received reduces the cost basis of the
security or currency purchased by the Portfolio. 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.
NOTE E: SECURITIES LENDING
The Portfolio has entered into a securities lending agreement with UBS Warburg
LLC (the "Lending Agent"). Under the terms of the agreement, the Lending Agent,
on behalf of the Portfolio, administers the lending of portfolio securities to
certain broker-dealers. In return, the Portfolio receives fee income from the
lending transactions or it retains a portion of interest on the investment of
any cash received as collateral. The Portfolio also continues to receive
dividends or interest on the securities loaned. Unrealized gain or loss on the
value of the securities loaned that may occur during the term of the loan will
be reflected in the accounts of the Portfolio. All loans are continuously
secured by collateral exceeding the value of the securities loaned. All
collateral consists of either cash or U.S. Government securities. The Lending
Agent invests the cash collateral received in an eligible money market vehicle
in accordance with the investment restrictions of the Portfolio. The Lending
Agent will indemnify the Portfolio for any loss resulting from a borrower's
failure to return a loaned security when due. For the six months ended June 30,
2005, the Portfolio had no securities on loan.
12
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
NOTE F: CAPITAL STOCK
There are 1,000,000,000 shares of $.001 par value capital stock authorized,
divided into two classes, designated Class A and Class B shares. Each class
consists of 500,000,000 authorized shares. Transactions in capital stock were
as follows:
SHARES AMOUNT
--------------------------- ------------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
JUNE 30, 2005 DECEMBER 31, JUNE 30, 2005 DECEMBER 31,
(UNAUDITED) 2004 (UNAUDITED) 2004
------------ ------------ -------------- --------------
CLASS A
Shares sold 2,583,151 3,532,531 $ 61,990,579 $ 78,969,217
Shares issued
in reinvestment
of dividends 374,098 251,523 8,911,022 5,566,213
Shares redeemed (3,834,464) (5,415,639) (91,502,933) (120,998,817)
------------ ------------ -------------- --------------
Net decrease (877,215) (1,631,585) $ (20,601,332) $ (36,463,387)
=========== =========== ============= =============
CLASS B
Shares sold 6,994,180 17,417,975 $ 167,495,483 $ 384,138,537
Shares issued
in reinvestment
of dividends 1,127,532 623,132 26,654,855 13,683,981
Shares redeemed (5,302,574) (9,695,569) (125,760,422) (213,910,843)
------------ ------------ -------------- --------------
Net increase 2,819,138 8,345,538 $ 68,389,916 $ 183,911,675
=========== =========== ============= =============
NOTE G: RISKS INVOLVED IN INVESTING IN THE PORTFOLIO
Foreign Securities 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.
Indemnification Risk--In the ordinary course of business, the Portfolio enters
into contracts that contain a variety of indemnifications. The Portfolio's
maximum exposure under these arrangements is unknown. However, the Portfolio
has not had prior claims or losses pursuant to these indemnification provisions
and expects the risk of loss thereunder to be remote.
NOTE H: JOINT CREDIT FACILITY
A number of open-end mutual funds managed by the Adviser, including the
Portfolio, participate in a $500 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
Portfolio did not utilize the Facility during the six months ended June 30,
2005.
NOTE I: DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions to be paid for the year ending December 31,
2005 will be determined at the end of the current fiscal year. The tax
character of distributions paid during the fiscal years ended December 31, 2004
and December 31, 2003 were as follows:
2004 2003
============== ==============
Distributions paid from:
Ordinary income $ 19,250,194 $ 15,991,212
-------------- --------------
Total taxable distributions 19,250,194 15,991,212
-------------- --------------
Total distributions paid $ 19,250,194 $ 15,991,212
============== ==============
13
GROWTH & INCOME PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
As of December 31, 2004, the components of accumulated earnings/(deficit) on a
tax basis were as follows:
Undistributed ordinary income $ 35,347,674
Accumulated capital and other losses (159,256,387)(a)
Unrealized appreciation/(depreciation) 448,984,210(b)
--------------
Total accumulated earnings/(deficit) $ 325,075,497
==============
(a) On December 31, 2004, the Portfolio had a net capital loss carryforward of
$159,256,387 of which $136,280,263 expires in the year 2010 and $22,976,124
expires in the year 2011. To the extent future capital gains are offset by
capital loss carryforwards, such gains will not be distributed. During the
current fiscal year the Portfolio utilized capital loss carryforwards of
$92,862,698.
(b) The difference between book-basis and tax-basis unrealized
appreciation/(depreciation) is attributable primarily to the tax deferral of
losses on wash sales.
NOTE J: LEGAL PROCEEDINGS
As has been previously reported, the staff of the U.S. Securities and Exchange
Commission ("SEC") and the NYAG have been investigating practices in the mutual
fund industry identified as "market timing" and "late trading" of mutual fund
shares. Certain other regulatory authorities have also been conducting
investigations into these practices within the industry and have requested that
the Adviser provide information to them. The Adviser has been cooperating and
will continue to cooperate with all of these authorities.
On December 18, 2003, the Adviser confirmed that it had reached terms with the
SEC and the NYAG for the resolution of regulatory claims relating to the
practice of "market timing" mutual fund shares in some of the AllianceBernstein
Mutual Funds. The agreement with the SEC is reflected in an Order of the
Commission ("SEC Order"). The agreement with the NYAG is memorialized in an
Assurrance of Discontinuance dated September 1, 2004 ("NYAG Order"). Among the
key provisions of these agreements are the following:
(i) The Adviser agreed to establish a $250 million fund (the "Reimbursement
Fund") to compensate mutual fund shareholders for the adverse effects of market
timing attributable to market timing relationships described in the SEC Order.
According to the SEC Order, the Reimbursement Fund is to be paid, in order of
priority, to fund investors based on (i) their aliquot share of losses suffered
by the fund due to market timing, and (ii) a proportionate share of advisory
fees paid by such fund during the period of such market timing;
(ii) The Adviser agreed to reduce the advisory fees it receives from some of
the AllianceBernstein long-term, open-end retail funds until December 31, 2008;
and
(iii) The Adviser agreed to implement changes to its governance and compliance
procedures. Additionally, the SEC Order and the NYAG Order contemplate that the
Adviser's registered investment company clients, including the Fund, will
introduce governance and compliance changes.
In anticipation of final, definitive documentation of the NYAG Order and
effective January 1, 2004, the Adviser began waiving a portion of its advisory
fee. On September 7, 2004, the Fund's investment advisory agreement was amended
to reflect the reduced advisory fee. For more information on this waiver and
amendment to the Fund's investment advisory agreement, please see "Advisory Fee
and Other Transactions with Affiliates" above.
A special committee of the Adviser's Board of Directors, comprised of the
members of the Adviser's Audit Committee and the other independent member of
the Adviser's Board, is continuing to direct and oversee an internal
investigation and a comprehensive review of the facts and circumstances
relevant to the SEC's and the NYAG's investigations.
In addition, the Independent Directors of the Fund ("the Independent
Directors") have initiated an investigation of the above-mentioned matters with
the advice of an independent economic consultant and independent counsel. The
Independent Directors have formed a special committee to supervise the
investigation.
On October 2, 2003, a putative class action complaint entitled Hindo et al. v.
AllianceBernstein Growth & Income Fund et al. (the "Hindo Complaint") was filed
against the Adviser; Alliance Capital Management Holding L.P.; Alliance Capital
Management Corporation; AXA Financial, Inc.; certain of the AllianceBernstein
Mutual Funds, including the Fund; Gerald Malone; Charles Schaffran
(collectively, the "Alliance Capital defendants"); and certain other defendants
not affiliated with the Adviser. The Hindo Complaint was filed in the United
States District Court for the Southern District of New York by alleged
shareholders of two of the AllianceBernstein Mutual Funds. The Hindo Complaint
alleges that cer-
14
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
tain of the Alliance Capital defendants failed to disclose that they improperly
allowed certain hedge funds and other unidentified parties to engage in late
trading and market timing of AllianceBernstein Fund securities, violating
Sections 11 and 15 of the Securities Act, Sections 10(b) and 20(a) of the
Exchange Act, and Sections 206 and 215 of the Advisers Act. Plaintiffs seek an
unspecified amount of compensatory damages and rescission of their contracts
with the Adviser, including recovery of all fees paid to the Adviser pursuant
to such contracts.
Since October 2, 2003, numerous additional lawsuits making factual allegations
similar to those in the Hindo Complaint were filed against the Adviser and
certain other defendants, some of which name the Fund as a defendant. All of
these lawsuits seek an unspecified amount of damages. The lawsuits are now
pending in the United States District Court for the District of Maryland
pursuant to a ruling by the Judicial Panel on Multidistrict Litigation
transferring and centralizing all of the mutual fund cases involving market and
late trading in the District of Maryland.
As a result of the matters discussed above, investors in the AllianceBernstein
Mutual Funds may choose to redeem their investments. This may require the
AllianceBernstein Mutual Funds to sell investments held by those funds to
provide for sufficient liquidity and could also have an adverse effect on the
investment performance of the AllianceBernstein Mutual Funds.
The Adviser and approximately twelve other investment management firms were
publicly mentioned in connection with the settlement by the SEC of charges that
an unaffiliated broker/dealer violated federal securities laws relating to its
receipt of compensation for selling specific mutual funds and the disclosure of
such compensation. The SEC indicated publicly that, among other things, it was
considering enforcement action in connection with mutual funds' disclosure of
such arrangements and in connection with the practice of considering mutual
fund sales in the direction of brokerage commissions from fund portfolio
transactions. The SEC issued subpoenas to the Adviser, and the NASD issued
requests for information in connection with this matter and the Adviser
provided documents and other information to the SEC and NASD and cooperated
fully with the investigations. On June 8, 2005 the NASD announced that it had
reached a settlement with the Distributor in connection with this matter.
Management of the Adviser expects that the settlement has resolved both
regulatory inquiries described above.
On June 22, 2004, a purported class action complaint entitled Aucoin, et al. v.
Alliance Capital Management L.P., et al. ("Aucoin Complaint") was filed against
the Adviser, Alliance Capital Management Holding L.P., Alliance Capital
Management Corporation, AXA Financial, Inc., AllianceBernstein Investment
Research & Management, Inc., certain current and former directors of the
AllianceBernstein Mutual Funds, and unnamed Doe defendants. The Aucoin
Complaint names certain of the AllianceBernstein mutual funds as nominal
defendants. The Aucoin Complaint was filed in the United States District Court
for the Southern District of New York by an alleged shareholder of an
AllianceBernstein mutual fund. The Aucoin Complaint alleges, among other
things, (i) that certain of the defendants improperly authorized the payment of
excessive commissions and other fees from fund assets to broker-dealers in
exchange for preferential marketing services, (ii) that certain of the
defendants misrepresented and omitted from registration statements and other
reports material facts concerning such payments, and (iii) that certain
defendants caused such conduct as control persons of other defendants. The
Aucoin Complaint asserts claims for violation of Sections 34(b), 36(b) and
48(a) of the Investment Company Act, Sections 206 and 215 of the Advisers Act,
breach of common law fiduciary duties, and aiding and abetting breaches of
common law fiduciary duties. Plaintiffs seek an unspecified amount of
compensatory damages and punitive damages, rescission of their contracts with
the Adviser, including recovery of all fees paid to the Adviser pursuant to
such contracts, an accounting of all fund-related fees, commissions and soft
dollar payments, and restitution of all unlawfully or discriminatorily obtained
fees and expenses.
Since June 22, 2004, numerous additional lawsuits making factual allegations
substantially similar to those in the Aucoin Complaint were filed against the
Adviser and certain other defendants, and others may be filed.
It is possible that these matters and/or other developments resulting from
these matters could result in increased redemptions of the Fund's shares or
other adverse consequences to the Fund. However, the Adviser believes that
these matters are not likely to have a material adverse effect on its ability
to perform advisory services relating to the Fund.
15
GROWTH & INCOME PORTFOLIO
FINANCIAL HIGHLIGHTS
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
CLASS A
----------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 2005 ---------------------------------------------------------------
(UNAUDITED) 2004 2003 2002 2001 2000
----------- ----------- ----------- ----------- ----------- -----------
Net asset value, beginning of period $24.08 $21.80 $16.62 $22.16 $23.15 $21.79
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a) .14 .36(b) .23 .22 .21 .22
Net realized and unrealized gain (loss)
on investment and foreign
currency transactions (.18) 2.12 5.15 (5.01) (.05) 2.75
Net increase (decrease) in net asset
value from operations (.04) 2.48 5.38 (4.79) .16 2.97
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.36) (.20) (.20) (.12) (.14) (.14)
Distributions from net realized gain
on investment transactions -0- -0- -0- (.63) (1.01) (1.47)
Total dividends and distributions (.36) (.20) (.20) (.75) (1.15) (1.61)
Net asset value, end of period $23.68 $24.08 $21.80 $16.62 $22.16 $23.15
TOTAL RETURN
Total investment return based on net
asset value (c) (.19)% 11.46% 32.50% (22.05)% .36% 13.89%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $596,388 $627,689 $603,673 $456,402 $673,722 $596,547
Ratio to average net assets of:
Expenses, net of waivers and
reimbursements .59%(d) .60% .66% .68% .67% .69%
Expenses, before waivers and
reimbursements .59%(d) .65% .66% .68% .67% .69%
Net investment income 1.20%(d) 1.62%(b) 1.25% 1.15% .95% 1.01%
Portfolio turnover rate 32% 50% 57% 69% 80% 74%
See footnote summary on page 17.
16
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
CLASS B
----------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 2005 ---------------------------------------------------------------
(UNAUDITED) 2004 2003 2002 2001 2000
----------- ----------- ----------- ----------- ----------- -----------
Net asset value, beginning of period $23.87 $21.62 $16.49 $22.03 $23.06 $21.76
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a) .11 .31(b) .18 .17 .16 .18
Net realized and unrealized gain (loss)
on investment and foreign
currency transactions (.19) 2.10 5.11 (4.98) (.05) 2.73
Net increase (decrease) in net asset
value from operations (.08) 2.41 5.29 (4.81) .11 2.91
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.30) (.16) (.16) (.10) (.13) (.14)
Distributions from net realized gain on
investment transactions -0- -0- -0- (.63) (1.01) (1.47)
Total dividends and distributions (.30) (.16) (.16) (.73) (1.14) (1.61)
Net asset value, end of period $23.49 $23.87 $21.62 $16.49 $22.03 $23.06
TOTAL RETURN
Total investment return based on net
asset value (c) (.33)% 11.22% 32.18% (22.26)% .15% 13.59%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $2,078,281 $2,044,741 $1,671,671 $1,067,952 $889,394 $151,739
Ratio to average net assets of:
Expenses, net of waivers and
reimbursements .84%(d) .85% .91% .93% .92% .95%
Expenses, before waivers and
reimbursements .84%(d) .90% .91% .93% .92% .95%
Net investment income .95%(d) 1.39%(b) .99% .91% .75% .85%
Portfolio turnover rate 32% 50% 57% 69% 80% 74%
(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 return does not reflect the
deduction of taxes that a shareholder would pay on Portfolio distributions or
the redemption of Portfolio shares. Total investment return calculated for a
period of less than one year is not annualized.
(d) Annualized.
17
[LOGO] ALLIANCEBERNSTEIN (R)
Investment Research and Management
AllianceBernstein
Variable Products Series Fund, Inc.
Semi-Annual Report
June 30, 2005
> AllianceBernstein Growth Portfolio
SEMI-ANNUAL REPORT
INVESTMENT PRODUCTS OFFERED
> ARE NOT FDIC INSURED
> MAY LOSE VALUE
> ARE NOT BANK GUARANTEED
YOU MAY OBTAIN A DESCRIPTION OF THE FUND'S PROXY VOTING POLICIES AND
PROCEDURES, AND INFORMATION REGARDING HOW THE FUND VOTED PROXIES RELATING TO
PORTFOLIO SECURITIES DURING THE MOST RECENT 12-MONTH PERIOD ENDED JUNE 30,
WITHOUT CHARGE. SIMPLY VISIT THE SECURITIES AND EXCHANGE COMMISSION'S (THE
"COMMISSION") WEB SITE AT WWW.SEC.GOV, OR CALL ALLIANCEBERNSTEIN AT (800)
227-4618.
THE FUND FILES ITS COMPLETE SCHEDULE OF PORTFOLIO HOLDINGS WITH THE COMMISSION
FOR THE FIRST AND THIRD QUARTERS OF EACH FISCAL YEAR ON FORM N-Q. THE FUND'S
FORMS N-Q ARE AVAILABLE ON THE COMMISSION'S WEB SITE AT WWW.SEC.GOV. THE FUND'S
FORMS N-Q MAY ALSO BE REVIEWED AND COPIED AT THE COMMISSION'S PUBLIC REFERENCE
ROOM IN WASHINGTON, DC; INFORMATION ON THE OPERATION OF THE PUBLIC REFERENCE
ROOM MAY BE OBTAINED BY CALLING (800) SEC-0330.
GROWTH PORTFOLIO
FUND EXPENSES
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including sales charges (loads) on purchase payments, contingent
deferred sales charges on redemptions and (2) ongoing costs, including
management fees; distribution (12b-1) fees; and other Fund expenses. This
example is intended to help you understand your ongoing costs (in dollars) of
investing in the Fund and to compare these costs with the ongoing costs of
investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of
the period and held for the entire period as indicated below.
Actual Expenses
The first line of the table below provides information about actual account
values and actual expenses. You may use the information in this line, together
with the amount you invested, to estimate the expenses that you paid over the
period. Simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
in the first line under the heading entitled "Expenses Paid During Period" to
estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio and an assumed annual rate of return of 5% before expenses, which is not
the Fund's actual return. The hypothetical account values and expenses may not
be used to estimate the actual ending account balance or expenses you paid for
the period. You may use this information to compare the ongoing costs of
investing in the Fund and other funds by comparing this 5% hypothetical example
with the 5% hypothetical examples that appear in the shareholder reports of
other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads), or contingent deferred sales charges on redemptions.
Therefore, the second line of the table is useful in comparing ongoing costs
only, and will not help you determine the relative total costs of owning
different funds. In addition, if these transactional costs were included, your
costs would have been higher.
Beginning Ending
Account Value Account Value Expenses Paid Annualized
Growth Portfolio January 1, 2005 June 30, 2005 During Period* Expense Ratio*
- ---------------- --------------- ------------- -------------- --------------
Class A
Actual $ 1,000 $ 1,002.19 $ 4.42 0.89%
Hypothetical (5% return before expenses) $ 1,000 $ 1,020.38 $ 4.46 0.89%
Class B
Actual $ 1,000 $ 1,001.11 $ 5.66 1.14%
Hypothetical (5% return before expenses) $ 1,000 $ 1,019.14 $ 5.71 1.14%
* Expenses are equal to each classes' annualized expense ratios, multiplied
by the average account value over the period, multiplied by the number of days
in the most recent fiscal half-year/365 (to reflect the one-half year period).
1
GROWTH PORTFOLIO
TEN LARGEST HOLDINGS
June 30, 2005 (unaudited)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
PERCENT OF
COMPANY U.S. $ VALUE NET ASSETS
- -------------------------------------------------------------------------------
Legg Mason, Inc. $ 13,242,792 4.8%
WellPoint Health Networks, Inc. 11,936,296 4.4
Marvell Technology Group Ltd. (Bermuda) 10,970,736 4.0
Zimmer Holdings, Inc. 10,115,376 3.7
Juniper Networks, Inc. 9,719,480 3.6
Dell, Inc. 8,937,162 3.3
Yahoo!, Inc. 8,776,845 3.2
Citigroup, Inc. 8,681,994 3.2
eBay, Inc. 8,602,406 3.1
Symantec Corp. 8,550,342 3.1
------------ ------
$ 99,533,429 36.4%
SECTOR DIVERSIFICATION
June 30, 2005 (unaudited)
_______________________________________________________________________________
PERCENT OF
SECTOR U.S. $ VALUE NET ASSETS
- -------------------------------------------------------------------------------
Technology $ 92,620,689 33.8%
Healthcare 67,823,948 24.8
Finance 42,934,467 15.7
Consumer Services 31,556,061 11.5
Consumer Manufacturing 22,962,121 8.4
Oil & Gas Field Services 5,672,718 2.1
Multi-Industry Companies 3,459,674 1.3
Aerospace & Defense 3,040,226 1.1
Capital Goods 1,438,200 0.5
------------ ------
Total Investments 271,508,104 99.2
Cash and receivables, net of liabilities 2,052,241 0.8
------------ ------
Net Assets $273,560,345 100.0%
Please Note: The sector classifications presented herein are based on the
sector categorization methodology of the Adviser.
2
GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS
June 30, 2005 (unaudited)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
Company Shares U.S. $ Value
- -------------------------------------------------------------------------------
COMMON STOCKS-99.2%
TECHNOLOGY-33.8%
COMMUNICATION EQUIPMENT-6.2%
Corning, Inc. (a) 167,500 $ 2,783,850
Juniper Networks, Inc. (a) 386,000 9,719,480
QUALCOMM, Inc. 136,400 4,502,564
------------
17,005,894
COMPUTER HARDWARE/ STORAGE-6.0%
Apple Computer, Inc. (a) 97,100 3,574,251
Dell, Inc. (a) 226,200 8,937,162
EMC Corp. (a) 283,500 3,886,785
------------
16,398,198
COMPUTER PERIPHERALS-1.4%
Network Appliance, Inc. (a) 138,800 3,923,876
COMPUTER SERVICES-0.5%
Infosys Technologies Ltd. (ADR) (India) 18,600 1,440,942
INTERNET MEDIA-6.3%
Google, Inc. Cl.A (a) 28,900 8,500,935
Yahoo!, Inc. (a) 253,300 8,776,845
------------
17,277,780
SEMI-CONDUCTOR COMPONENTS-5.5%
Broadcom Corp. Cl.A (a) 115,600 4,104,956
Marvell Technology Group Ltd. (Bermuda) (a) 288,400 10,970,736
------------
15,075,692
SOFTWARE-5.3%
Comverse Technology, Inc. (a) 132,400 3,131,260
SAP AG (ADR) (Germany) 63,900 2,766,870
Symantec Corp. (a) 393,300 8,550,342
------------
14,448,472
MISCELLANEOUS-2.6%
Amphenol Corp. Cl.A 175,500 7,049,835
------------
92,620,689
HEALTHCARE-24.8%
BIOTECHNOLOGY-3.1%
Affymetrix, Inc. (a) 29,900 1,612,507
Amgen, Inc. (a) 22,700 1,372,442
Genentech, Inc. (a) 67,100 5,386,788
------------
8,371,737
DRUGS-3.9%
Forest Laboratories, Inc. (a) 92,700 3,601,395
Teva Pharmaceutical Industries
Ltd. (ADR) (Israel) 224,400 6,987,816
------------
10,589,211
MEDICAL PRODUCTS-12.6%
Alcon, Inc. (Switzerland) 69,000 7,545,150
Patterson Cos, Inc. (a) 48,700 2,195,396
St. Jude Medical, Inc. (a) 186,600 8,137,626
Stryker Corp. 137,000 6,515,720
Zimmer Holdings, Inc. (a) 132,800 10,115,376
------------
34,509,268
MEDICAL SERVICES-5.2%
Caremark Rx, Inc. (a) 54,300 2,417,436
WellPoint Health Networks, Inc. (a) 171,400 11,936,296
------------
14,353,732
------------
67,823,948
FINANCE-15.7%
BROKERAGE & MONEY MANAGEMENT-9.3%
Legg Mason, Inc. 127,200 13,242,792
Merrill Lynch & Co., Inc. 51,500 2,833,015
The Charles Schwab Corp. 251,300 2,834,664
The Goldman Sachs Group, Inc. 64,600 6,590,492
------------
25,500,963
INSURANCE-3.2%
American International Group, Inc. 131,100 7,616,910
Everest Re Group Ltd. (Bermuda) 12,200 1,134,600
------------
8,751,510
MISCELLANEOUS-3.2%
Citigroup, Inc. 187,800 8,681,994
------------
42,934,467
CONSUMER SERVICES-11.5%
ADVERTISING-0.2%
Getty Images, Inc. (a) 7,200 534,672
APPAREL-1.6%
Coach, Inc. (a) 92,100 3,091,797
Urban Outfitters, Inc. (a) 22,300 1,264,187
------------
4,355,984
BROADCASTING & CABLE-1.1%
XM Satellite Radio Holdings, Inc. Cl.A (a) 93,800 3,157,308
3
GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS
(continued)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
Company Shares U.S. $ Value
- -------------------------------------------------------------------------------
RESTAURANT & LODGING-0.1%
Starbucks Corp. (a) 2,800 $ 144,648
RETAIL-GENERAL MERCHANDISE-5.5%
Dick's Sporting Goods, Inc. (a) 35,800 1,381,522
eBay, Inc. (a) 260,600 8,602,406
Lowe's Cos., Inc. 67,100 3,906,562
Williams-Sonoma, Inc. (a) 33,500 1,325,595
------------
15,216,085
MISCELLANEOUS-3.0%
Corporate Executive Board Co. 12,900 1,010,457
Education Management Corp. (a) 73,100 2,465,663
Iron Mountain, Inc. (a) 79,400 2,462,988
Strayer Education, Inc. 25,600 2,208,256
------------
8,147,364
------------
31,556,061
CONSUMER MANUFACTURING-8.4%
BUILDING & RELATED-8.4%
Centex Corp. 79,600 5,625,332
D.R. Horton, Inc. 163,833 6,161,759
Lennar Corp. Cl.A 87,400 5,545,530
NVR, Inc. (a) 6,950 5,629,500
------------
22,962,121
OIL AND GAS FIELD SERVICES-2.1%
ENERGY EQUIPMENT & SERVICE-2.1%
Schlumberger Ltd. 74,700 5,672,718
MULTI-INDUSTRY COMPANIES-1.3%
Danaher Corp. 66,100 3,459,674
AEROSPACE & DEFENSE-1.1%
DEFENSE ELECTRONICS-1.1%
L-3 Communications Holdings, Inc. 39,700 3,040,226
CAPITAL GOODS-0.5%
MACHINERY-0.5%
Actuant Corp. Cl.A (a) 30,000 1,438,200
Total Common Stocks
(cost $195,666,212) 271,508,104
TOTAL INVESTMENTS-99.2%
(cost $195,666,212) 271,508,104
Other assets less liabilities-0.8% 2,052,241
NET ASSETS-100% $ 273,560,345
(a) Non-income producing security.
Glossary:
ADR - American Depository Receipt
See Notes to Financial Statements.
4
GROWTH PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2005 (unaudited)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $195,666,212) $ 271,508,104
Cash 975,797
Receivable for investment securities sold 1,901,303
Dividends receivable 61,002
Receivable for capital stock sold 36,318
Total assets 274,482,524
LIABILITIES
Payable for capital stock redeemed 504,401
Advisory fee payable 169,327
Distribution fee payable 31,234
Payable for investment securities purchased 30,756
Administrative fee payable 1,215
Transfer agent fee payable 59
Accrued expenses 185,187
Total liabilities 922,179
NET ASSETS $ 273,560,345
COMPOSITION OF NET ASSETS
Capital stock, at par $ 15,039
Additional paid-in capital 328,752,636
Accumulated net investment loss (718,693)
Accumulated net realized loss on investment transactions (130,330,529)
Net unrealized appreciation of investments 75,841,892
$ 273,560,345
Class A Shares
Net assets $ 121,793,895
Shares of capital stock outstanding 6,639,344
Net asset value per share $ 18.34
Class B Shares
Net assets $ 151,766,450
Shares of capital stock outstanding 8,399,735
Net asset value per share $ 18.07
See Notes to Financial Statements.
5
GROWTH PORTFOLIO
STATEMENT OF OPERATIONS
Six Months Ended June 30, 2005 (unaudited)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
INVESTMENT INCOME
Dividends (net of foreign taxes withheld of $19,499) $ 640,278
Interest 9,110
Total investment income 649,388
EXPENSES
Advisory fee 1,006,813
Distribution fee--Class B 182,058
Custodian 74,514
Administrative 36,250
Printing 36,132
Audit 20,730
Legal 5,581
Directors' fees 496
Transfer agency 403
Miscellaneous 12,650
Total expenses 1,375,627
Net investment loss (726,239)
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENT
TRANSACTIONS
Net realized gain on investment transactions 11,850,526
Net change in unrealized appreciation/depreciation
of investments (11,531,113)
Net gain on investment transactions 319,413
NET DECREASE IN NET ASSETS FROM OPERATIONS $ (406,826)
See Notes to Financial Statements.
6
GROWTH PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
Six Months Ended Year Ended
June 30, 2005 December 31,
(unaudited) 2004
--------------- ---------------
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS
Net investment loss $ (726,239) $ (1,530,586)
Net realized gain on investment
transactions 11,850,526 19,525,775
Net change in unrealized
appreciation/depreciation of
investments (11,531,113) 18,576,850
Net increase (decrease) in net assets
from operations (406,826) 36,572,039
CAPITAL STOCK TRANSACTIONS
Net decrease (16,277,038) (8,596,957)
Total increase (decrease) (16,683,864) 27,975,082
NET ASSETS
Beginning of period 290,244,209 262,269,127
End of period (including accumulated
net investment loss and undistributed
net investment income of ($718,693)
and $7,546, respectively) $ 273,560,345 $ 290,244,209
See Notes to Financial Statements.
7
GROWTH PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
June 30, 2005 (unaudited)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
NOTE A: Significant Accounting Policies
The AllianceBernstein Growth Portfolio (the "Portfolio") is a series of
AllianceBernstein 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 offers twenty-three separately managed
pools of assets which have differing investment objectives and policies. The
Portfolio 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.
The Portfolio 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
the Portfolio's net asset value per share.
The financial statements have been prepared in conformity with U.S. generally
accepted accounting principles, which require management to make certain
estimates and assumptions that affect the reported amounts of assets and
liabilities in the financial statements and amounts of income and expenses
during the reporting period. Actual results could differ from those estimates.
Additional information about some of the items discussed in these Notes to
Financial Statements is contained in the Fund's Statement of Additional
Information, which is available upon request. The following is a summary of
significant accounting policies followed by the Portfolio.
1. Security Valuation
Portfolio securities are valued at their current market value determined on the
basis of market quotations or, if market quotations are not readily available
or are deemed unreliable, at "fair value" as determined in accordance with
procedures established by and under the general supervision of the Fund's Board
of Directors.
In general, the market value of securities which are readily available and
deemed reliable are determined as follows. Securities listed on a national
securities exchange or on a foreign securities exchange are valued at the last
sale price at the close of the exchange or foreign securities exchange. If
there has been no sale on such day, the securities are valued at the mean of
the closing bid and asked prices on such day. Securities listed on more than
one exchange are valued by reference to the principal exchange on which the
securities are traded; securities not listed on an exchange but traded on The
NASDAQ Stock Market, Inc. ("NASDAQ") are valued in accordance with the NASDAQ
Official Closing Price; listed put or call options are valued at the last sale
price. If there has been no sale on that day, such securities will be valued at
the closing bid prices on that day; open futures contracts and options thereon
are valued using the closing settlement price or, in the absence of such a
price, the most recent quoted bid price. If there are no quotations available
for the day of valuation, the last available closing settlement price is used;
securities traded in the over-the-counter market, ("OTC") (but excluding
securities traded on NASDAQ) are valued at the mean of the current bid and
asked prices as reported by the National Quotation Bureau or other comparable
sources; U.S. Government securities and other debt instruments having 60 days
or less remaining until maturity are valued at amortized cost if their original
maturity was 60 days or less; or by amortizing their fair value as of the 61st
day prior to maturity if their original term to maturity exceeded 60 days;
fixed-income securities, including mortgage backed and asset backed securities,
may be valued on the basis of prices provided by a pricing service or at a
price obtained from one or more of the major broker/dealers. In cases where
broker/dealer quotes are obtained, Alliance Capital Management, L.P. (the
"Adviser") may establish procedures whereby changes in market yields or spreads
are used to adjust, on a daily basis, a recently obtained quoted price on a
security; and OTC and other derivatives are valued on the basis of a quoted bid
price or spread from a major broker/dealer in such security.
Securities for which market quotations are not readily available (including
restricted securities) or are deemed unreliable are valued at fair value.
Factors considered in making this determination may include, but are not
limited to, information obtained by contacting the issuer, analysts, analysis
of the issuer's financial statements or other available documents. In addition,
the Fund may use fair value pricing for securities primarily traded in non-U.S.
markets because, most foreign markets close well before the Fund values its
securities at 4:00 p.m., Eastern Time. The earlier close of these foreign
markets gives rise to the possibility that significant events, including broad
market moves, may have occurred in the interim and may materially affect the
value of those securities. To account for this, the Fund may frequently value
many of its foreign equity securities using fair value prices based on third
party vendor modeling tools to the extent available.
8
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
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 prices of such currencies against the U.S.
dollar. Purchases and sales of portfolio securities are translated into U.S.
dollars at the rates of exchange prevailing when such securities were acquired
or sold. Income and expenses are translated into U.S. dollars at rates of
exchange prevailing when accrued.
Net realized gain or loss on foreign currency transactions represents foreign
exchange gains and losses from sales and maturities of foreign fixed income
investments, foreign currency exchange contracts, holding of foreign
currencies, currency gains or losses realized between the trade and settlement
dates on foreign investment transactions, and the difference between the
amounts of dividends, interest and foreign withholding taxes recorded on the
Portfolio's books and the U.S. dollar equivalent amounts actually received or
paid. Net unrealized 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 or depreciation of investments
and foreign currency denominated assets and liabilities.
3. Taxes
It is the Portfolio's policy to meet the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute all of its
investment company taxable income and net realized gains, if any, to
shareholders. Therefore, no provisions for federal income or excise taxes are
required. The Portfolio may be subject to taxes imposed by countries in which
it invests. Such taxes are generally based on income and/or capital gains
earned or repatriated. Taxes are accrued and applied to net investment income,
net realized gains and net unrealized appreciation/depreciation as such income
and/or gains are earned.
4. Investment Income and Investment Transactions
Dividend income is recorded on the ex-dividend date or as soon as the Portfolio
is informed of the dividend. Interest income is accrued daily. Investment
transactions are accounted for on the date securities are purchased or sold.
Investment gains and losses are determined on the identified cost basis. The
Portfolio amortizes premiums and accretes discounts as adjustments to interest
income.
5. Income and Expenses
Expenses attributable to a single portfolio are charged to that portfolio.
Expenses of the Fund are charged to each portfolio in proportion to net assets.
All income earned and expenses incurred by a portfolio with multi-class shares
outstanding are borne on a pro-rata basis by each outstanding class of shares,
based on the proportionate interest in the portfolio represented by the net
assets of such class, except that the portfolio's Class B shares bear the
distribution fees.
6. Dividends and Distributions
The Portfolio declares and distributes dividends and distributions from net
investment income and net realized gains, respectively, if any, at least
annually. 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 U.S. generally accepted accounting principles. 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
Until September 6, 2004, under the terms of an investment advisory agreement,
the Portfolio paid the Adviser an advisory fee at an annual rate of .75% of the
Portfolio's average daily net assets. Effective September 7, 2004, the terms of
the investment advisory agreement were amended, in connection with the final
agreement with the office of New York Attorney General ("NYAG") so that the
advisory fee is calculated at an annual rate of .75% of the first $2.5 billion,
..65% of the next $2.5 billion and .60% in excess of $5 billion, of the
Portfolio's average daily net assets. The fee is accrued daily and paid monthly.
Pursuant to the advisory agreement, the Portfolio paid $36,250 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, 2005.
9
GROWTH PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(continued)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
Brokerage commissions paid on investment transactions for the six months ended
June 30, 2005, amounted to $126,595 of which $207 and $0, respectively, was
paid to Sanford C. Bernstein & Co. LLC and Sanford C. Bernstein Limited,
affiliates of the Adviser.
The Portfolio compensates Alliance Global Investor Services, Inc., a
wholly-owned subsidiary of the Adviser, under a Transfer Agency Agreement for
providing personnel and facilities to perform transfer agency services for the
Portfolio. Such compensation amounted to $403 for the six months ended June 30,
2005.
NOTE C: Distribution Plan
The Portfolio has adopted a Distribution Plan (the "Plan") for Class B shares
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the
Plan, the Portfolio pays distribution and servicing fees to AllianceBernstein
Investment Research and Management, Inc., (the "Distributor"), a wholly-owned
subsidiary of the Adviser, at an annual rate of up to .50% of the 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 limits
payments under the Plan to .25% of the Portfolio's average daily net assets
attributable to Class B shares. The Plan provides that the Distributor will use
such payments in their entirety for distribution assistance and promotional
activities.
The Portfolio is not obligated under the Plan to pay any distribution and
servicing fees in excess of the amounts set forth above. The purpose of the
payments to the Distributor under the Plan is to compensate the Distributor for
its distribution services with respect to the sale of the Portfolio's Class B
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 Plan is
characterized by the staff of the Securities and Exchange Commission as being
of the "compensation" variety.
In the event that the Plan is terminated or not continued, no distribution and
servicing fees (other than current amounts accrued but not yet paid) would be
owed by the Portfolio to the Distributor.
The Plan also provides that the Adviser may use its own resources to finance
the distribution of the Portfolio's shares.
NOTE D: Investment Transactions
Purchases and sales of investment securities (excluding short-term investments)
for the six months ended June 30, 2005, were as follows:
Purchases Sales
------------ ------------
Investment securities (excluding U.S.
government securities) $ 58,197,420 $ 73,200,409
U.S. government securities -0- -0-
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 $ 76,565,555
Gross unrealized depreciation (723,663)
Net unrealized appreciation $ 75,841,892
1. Forward Exchange Currency Contracts
The Portfolio may enter into forward exchange currency contracts in order to
hedge its exposure to changes in foreign currency exchange rates on its 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 on a future date at a negotiated forward rate. The gain or loss
arising from the difference between the original contract and the closing of
such contract would be included in net realized gain or loss on foreign
currency transactions.
Fluctuations in the value of open forward exchange currency contracts are
recorded for financial reporting purposes as unrealized appreciation and
depreciation by the Portfolio.
10
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
The Portfolio's custodian will place and maintain cash not available for
investment or other liquid assets in a separate account of the Portfolio having
a value at least equal to the aggregate amount of the 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 the Portfolio has in that particular
currency contract.
2. Option Transactions
For hedging and investment purposes, the Portfolio may purchase and write
(sell) call options and purchase put options on U.S. securities and foreign
currencies 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 written options which
expire unexercised are recorded by the Portfolio on the expiration date as
realized gains from options written. 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. If a
put option is exercised, the premium received reduces the cost basis of the
security or currency purchased by the Portfolio. 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.
NOTE E: Securities Lending
The Portfolio has entered into a securities lending agreement with UBS Warburg
LLC(the "Lending Agent"). Under the terms of the agreement, the Lending Agent,
on behalf of the Portfolio, administers the lending of portfolio securities to
certain broker-dealers. In return, the Portfolio receives fee income from the
lending transactions or it retains a portion of interest on the investment of
any cash received as collateral. The Portfolio also continues to receive
dividends or interest on the securities loaned. Unrealized gain or loss on the
value of the securities loaned that may occur during the term of the loan will
be reflected in the accounts of the Portfolio. All loans are continuously
secured by collateral exceeding the value of the securities loaned. All
collateral consists of either cash or U.S. Government securities. The Lending
Agent invests the cash collateral received in an eligible money market vehicle
in accordance with the investment restrictions of the Portfolio. The Lending
Agent will indemnify the Portfolio for any loss resulting from a borrower's
failure to return a loaned security when due. For the six months ended June 30,
2005, the Portfolio had no securities on loan.
NOTE F: Capital Stock
There are 1,000,000,000 shares of $.001 par value capital stock authorized,
divided into two classes, designated Class A and Class B shares. Each class
consists of 500,000,000 authorized shares. Transactions in capital stock were
as follows:
SHARES AMOUNT
--------------------------- ------------------------------
Six Months Ended Year Ended Six Months Ended Year Ended
June 30, 2005 December 31, June 30, 2005 December 31,
(unaudited) 2004 (unaudited) 2004
------------ ------------ -------------- --------------
Class A
Shares sold 88,778 401,183 $ 1,577,233 $ 6,730,222
Shares redeemed (952,762) (1,790,906) (16,665,790) (29,838,731)
Net decrease (863,984) (1,389,723) $ (15,088,557) $ (23,108,509)
11
GROWTH PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(continued)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
SHARES AMOUNT
--------------------------- ------------------------------
Six Months Ended Year Ended Six Months Ended Year Ended
June 30, 2005 December 31, June 30, 2005 December 31,
(unaudited) 2004 (unaudited) 2004
------------ ------------ -------------- --------------
Class B
Shares sold 901,436 3,293,538 $ 15,663,098 $ 55,088,374
Shares redeemed (972,186) (2,464,295) (16,851,579) (40,576,822)
Net increase
(decrease) (70,750) 829,243 $ (1,188,481) $ 14,511,552
NOTE G: Risks Involved in Investing in the Portfolio
Foreign Securities 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.
Indemnification Risk--In the ordinary course of business, the Portfolio enters
into contracts that contain a variety of indemnifications. The Portfolio's
maximum exposure under these arrangements is unknown. However, the Portfolio
has not had prior claims or losses pursuant to these indemnification provisions
and expects the risk of loss thereunder to be remote.
NOTE H:Joint Credit Facility
A number of open-end mutual funds managed by the Adviser, including the
Portfolio, participate in a $500 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
Portfolio did not utilize the Facility during the six months ended June 30,
2005.
NOTE I: Components of Accumulated Earnings (Deficit)
The tax character of distributions to be paid for the year ending December 31,
2005 will be determined at the end of the current fiscal year. As of December
31, 2004, the components of accumulated earnings/(deficit) on a tax basis were
as follows:
Accumulated capital and other losses $ (141,967,694)(a)
Unrealized appreciation/(depreciation) 87,167,190(b)
Total accumulated earnings/(deficit) $ (54,800,504)
(a) On December 31, 2004, the Portfolio had a net capital loss carryforward of
$141,967,694 of which $42,732,873 expires in the year 2009, $84,319,349 expires
in the year 2010, and $14,915,472 expires in the year 2011. To the extent
future capital gains are offset by capital loss carryforwards, such gains will
not be distributed. Based on certain provisions in the Internal Revenue Code,
various limitations regarding the future utilization of these carryforwards,
brought forward as a result of the Fund's merger with Brinson Series Trust
Aggressive Growth Portfolio, may apply. During the current fiscal year, the
Portfolio utilized capital loss carryforward of $19,458,382.
(b) The difference between book-basis and tax-basis unrealized
appreciation/(depreciation) is attributable primarily to the tax deferral of
losses on wash sales and the tax treatment of dividends received.
NOTE J:Legal Proceedings
As has been previously reported, the staff of the U.S. Securities and Exchange
Commission ("SEC") and the NYAG have been investigating practices in the mutual
fund industry identified as "market timing" and "late trading" of mutual fund
shares. Certain other regulatory authorities have also been conducting
investigations into these practices within the industry and have requested that
the Adviser provide information to them. The Adviser has been cooperating and
will continue to cooperate with all of these authorities.
On December 18, 2003, the Adviser confirmed that it had reached terms with the
SEC and the NYAG for the resolution of regulatory claims relating to the
practice of "market timing" mutual fund shares in some of the AllianceBernstein
12
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
Mutual Funds. The agreement with the SEC is reflected in an Order of the
Commission ("SEC Order"). The agreement with the NYAG is memorialized in an
Assurrance of Discontinuance dated September 1, 2004 ("NYAG Order"). Among the
key provisions of these agreements are the following:
(i) The Adviser agreed to establish a $250 million fund (the
"Reimbursement Fund") to compensate mutual fund shareholders for the adverse
effects of market timing attributable to market timing relationships described
in the SEC Order. According to the SEC Order, the Reimbursement Fund is to be
paid, in order of priority, to fund investors based on (i) their aliquot share
of losses suffered by the fund due to market timing, and (ii) a proportionate
share of advisory fees paid by such fund during the period of such market
timing;
(ii) The Adviser agreed to reduce the advisory fees it receives from
some of the AllianceBernstein long-term, open-end retail funds until December
31, 2008; and
(iii) The Adviser agreed to implement changes to its governance and
compliance procedures. Additionally, the SEC Order and the NYAG Order
contemplate that the Adviser's registered investment company clients, including
the Fund, will introduce governance and compliance changes.
In anticipation of final, definitive documentation of the NYAG Order and
effective January 1, 2004, the Adviser began waiving a portion of its advisory
fee. On September 7, 2004, the Fund's investment advisory agreement was amended
to reflect the reduced advisory fee. For more information on this waiver and
amendment to the Fund's investment advisory agreement, please see "Advisory Fee
and Other Transactions with Affiliates" above.
A special committee of the Adviser's Board of Directors, comprised of the
members of the Adviser's Audit Committee and the other independent member of
the Adviser's Board, is continuing to direct and oversee an internal
investigation and a comprehensive review of the facts and circumstances
relevant to the SEC's and the NYAG's investigations.
In addition, the Independent Directors of the Fund ("the Independent
Directors") have initiated an investigation of the above-mentioned matters with
the advice of an independent economic consultant and independent counsel. The
Independent Directors have formed a special committee to supervise the
investigation.
On October 2, 2003, a putative class action complaint entitled HINDO ET AL. V.
ALLIANCEBERNSTEIN GROWTH & INCOME FUND ET AL. (the "Hindo Complaint") was filed
against the Adviser; Alliance Capital Management Holding L.P.; Alliance Capital
Management Corporation; AXA Financial, Inc.; certain of the AllianceBernstein
Mutual Funds, including the Fund; Gerald Malone; Charles Schaffran
(collectively, the "Alliance Capital defendants"); and certain other defendants
not affiliated with the Adviser. The Hindo Complaint was filed in the United
States District Court for the Southern District of New York by alleged
shareholders of two of the AllianceBernstein Mutual Funds. The Hindo Complaint
alleges that certain of the Alliance Capital defendants failed to disclose that
they improperly allowed certain hedge funds and other unidentified parties to
engage in late trading and market timing of AllianceBernstein Fund securities,
violating Sections 11 and 15 of the Securities Act, Sections 10(b) and 20(a) of
the Exchange Act, and Sections 206 and 215 of the Advisers Act. Plaintiffs seek
an unspecified amount of compensatory damages and rescission of their contracts
with the Adviser, including recovery of all fees paid to the Adviser pursuant
to such contracts.
Since October 2, 2003, numerous additional lawsuits making factual allegations
similar to those in the Hindo Complaint were filed against the Adviser and
certain other defendants, some of which name the Fund as a defendant. All of
these lawsuits seek an unspecified amount of damages. The lawsuits are now
pending in the United States District Court for the District of Maryland
pursuant to a ruling by the Judicial Panel on Multidistrict Litigation
transferring and centralizing all of the mutual fund cases involving market and
late trading in the District of Maryland.
As a result of the matters discussed above, investors in the AllianceBernstein
Mutual Funds may choose to redeem their investments. This may require the
AllianceBernstein Mutual Funds to sell investments held by those funds to
provide for sufficient liquidity and could also have an adverse effect on the
investment performance of the AllianceBernstein Mutual Funds.
The Adviser and approximately twelve other investment management firms were
publicly mentioned in connection with the settlement by the SEC of charges that
an unaffiliated broker/dealer violated federal securities laws relating to its
receipt of compensation for selling specific mutual funds and the disclosure of
such compensation. The SEC indicated publicly that, among other things, it was
considering enforcement action in connection with mutual funds' disclosure of
13
GROWTH PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(continued)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
such arrangements and in connection with the practice of considering mutual
fund sales in the direction of brokerage commissions from fund portfolio
transactions. The SEC issued subpoenas to the Adviser, and the NASD issued
requests for information in connection with this matter and the Adviser
provided documents and other information to the SEC and NASD and cooperated
fully with the investigations. On June 8, 2005 the NASD announced that it had
reached a settlement with the Distributor in connection with this matter.
Management of the Adviser expects that the settlement has resolved both
regulatory inquiries described above.
On June 22, 2004, a purported class action complaint entitled AUCOIN, ET AL. V.
ALLIANCE CAPITAL MANAGEMENT L.P., ET AL. ("Aucoin Complaint") was filed against
the Adviser, Alliance Capital Management Holding L.P., Alliance Capital
Management Corporation, AXA Financial, Inc., AllianceBernstein Investment
Research & Management, Inc., certain current and former directors of the
AllianceBernstein Mutual Funds, and unnamed Doe defendants. The Aucoin
Complaint names certain of the AllianceBernstein mutual funds as nominal
defendants. The Aucoin Complaint was filed in the United States District Court
for the Southern District of New York by an alleged shareholder of an
AllianceBernstein mutual fund. The Aucoin Complaint alleges, among other
things, (i) that certain of the defendants improperly authorized the payment of
excessive commissions and other fees from fund assets to broker-dealers in
exchange for preferential marketing services, (ii) that certain of the
defendants misrepresented and omitted from registration statements and other
reports material facts concerning such payments, and (iii) that certain
defendants caused such conduct as control persons of other defendants. The
Aucoin Complaint asserts claims for violation of Sections 34(b), 36(b) and
48(a) of the Investment Company Act, Sections 206 and 215 of the Advisers Act,
breach of common law fiduciary duties, and aiding and abetting breaches of
common law fiduciary duties. Plaintiffs seek an unspecified amount of
compensatory damages and punitive damages, rescission of their contracts with
the Adviser, including recovery of all fees paid to the Adviser pursuant to
such contracts, an accounting of all fund-related fees, commissions and soft
dollar payments, and restitution of all unlawfully or discriminatorily obtained
fees and expenses.
Since June 22, 2004, numerous additional lawsuits making factual allegations
substantially similar to those in the Aucoin Complaint were filed against the
Adviser and certain other defendants, and others may be filed.
It is possible that these matters and/or other developments resulting from
these matters could result in increased redemptions of the Fund's shares or
other adverse consequences to the Fund. However, the Adviser believes that
these matters are not likely to have a material adverse effect on its ability
to perform advisory services relating to the Fund.
14
GROWTH PORTFOLIO
FINANCIAL HIGHLIGHTS
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
CLASS A
----------------------------------------------------------------------------
Six Months
Ended Year Ended December 31,
June 30, 2005 ---------------------------------------------------------------
(unaudited) 2004 2003 2002 2001 2000
----------- ----------- ----------- ----------- ----------- -----------
Net asset value, beginning of period $18.30 $15.95 $11.81 $16.42 $25.10 $33.59
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (a) (.04) (.07) (.06) (.06) (.06) .08
Net realized and unrealized gain (loss)
on investment transactions .08 2.42 4.20 (4.55) (5.47) (5.36)
Net increase (decrease) in net asset value
from operations .04 2.35 4.14 (4.61) (5.53) (5.28)
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income -0- -0- -0- -0- (.06) (.02)
Distributions from net realized gain
on investment transactions -0- -0- -0- -0- (1.85) (3.19)
Distributions in excess of net realized
gain on investment transactions -0- -0- -0- -0- (1.23) -0-
Return of capital -0- -0- -0- -0- (.01) -0-
Total dividends and distributions -0- -0- -0- -0- (3.15) (3.21)
Net asset value, end of period $18.34 $18.30 $15.95 $11.81 $16.42 $25.10
TOTAL RETURN
Total investment return based on
net asset value (b) .22% 14.73% 35.06% (28.08)% (23.47)% (17.51)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $121,794 $137,345 $141,809 $121,439 $226,237 $357,664
Ratio to average net assets of:
Expenses .89%(c) .88% .89% .88% .85% .81%
Net investment income (loss) (.41)%(c) (.43)% (.43)% (.44)% (.31)% .26%
Portfolio turnover rate 21% 56% 49% 38% 104% 58%
See footnote summary on page 16.
15
GROWTH PORTFOLIO
FINANCIAL HIGHLIGHTS
(continued)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
CLASS B
----------------------------------------------------------------------------
Six Months
Ended Year Ended December 31,
June 30, 2005 ---------------------------------------------------------------
(unaudited) 2004 2003 2002 2001 2000
----------- ----------- ----------- ----------- ----------- -----------
Net asset value, beginning of period $18.05 $15.76 $11.70 $16.31 $24.99 $33.54
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (a) (.06) (.11) (.09) (.09) (.11) .04
Net realized and unrealized gain (loss)
on investment transactions .08 2.40 4.15 (4.52) (5.44) (5.39)
Net increase (decrease) in net asset value
from operations .02 2.29 4.06 (4.61) (5.55) (5.35)
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income -0- -0- -0- -0- (.04) (.01)
Distributions from net realized gain
on investment transactions -0- -0- -0- -0- (1.85) (3.19)
Distributions in excess of net realized
gain on investment transactions -0- -0- -0- -0- (1.23) -0-
Return of capital -0- -0- -0- -0- (.01) -0-
Total dividends and distributions -0- -0- -0- -0- (3.13) (3.20)
Net asset value, end of period $18.07 $18.05 $15.76 $11.70 $16.31 $24.99
TOTAL RETURN
Total investment return based on
net asset value (b) .11% 14.53% 34.70% (28.26)% (23.65)% (17.75)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $151,766 $152,899 $120,460 $71,724 $94,215 $54,127
Ratio to average net assets of:
Expenses 1.14%(c) 1.13% 1.14% 1.13% 1.11% 1.08%
Net investment income (loss) (.66)%(c) (.68)% (.68)% (.69)% (.59)% .13%
Portfolio turnover rate 21% 56% 49% 38% 104% 58%
(a) Based on average shares outstanding.
(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 return does not reflect the
deduction of taxes that a shareholder would pay on Portfolio distributions or
the redemption of Portfolio shares. Total investment return calculated for a
period of less than one year is not annualized.
(c) Annualized.
16
- -------------------------------------------------------------------------------
SEMI-ANNUAL REPORT
- -------------------------------------------------------------------------------
[LOGO] ALLIANCEBERNSTEIN (R)
Investment Research and Management
AllianceBernstein Variable Products Series Fund, Inc.
Semi-Annual Report
June 30, 2005
> AllianceBernstein Americas Government Income Portfolio
INVESTMENT PRODUCTS OFFERED
- ---------------------------
> ARE NOT FDIC INSURED
> MAY LOSE VALUE
> ARE NOT BANK GUARANTEED
- ---------------------------
YOU MAY OBTAIN A DESCRIPTION OF THE FUND'S PROXY VOTING POLICIES AND
PROCEDURES, AND INFORMATION REGARDING HOW THE FUND VOTED PROXIES RELATING TO
PORTFOLIO SECURITIES DURING THE MOST RECENT 12-MONTH PERIOD ENDED JUNE 30,
WITHOUT CHARGE. SIMPLY VISIT THE SECURITIES AND EXCHANGE COMMISSION'S (THE
"COMMISSION") WEB SITE AT WWW.SEC.GOV, OR CALL ALLIANCEBERNSTEIN AT (800)
227-4618.
THE FUND FILES ITS COMPLETE SCHEDULE OF PORTFOLIO HOLDINGS WITH THE COMMISSION
FOR THE FIRST AND THIRD QUARTERS OF EACH FISCAL YEAR ON FORM N-Q. THE FUND'S
FORMS N-Q ARE AVAILABLE ON THE COMMISSION'S WEB SITE AT WWW.SEC.GOV. THE FUND'S
FORMS N-Q MAY ALSO BE REVIEWED AND COPIED AT THE COMMISSION'S PUBLIC REFERENCE
ROOM IN WASHINGTON, DC; INFORMATION ON THE OPERATION OF THE PUBLIC REFERENCE
ROOM MAY BE OBTAINED BY CALLING (800) SEC-0330.
AMERICAS GOVERNMENT INCOME PORTFOLIO
FUND EXPENSES
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including sales charges (loads) on purchase payments, contingent
deferred sales charges on redemptions and (2) ongoing costs, including
management fees; distribution (12b-1) fees; and other Fund expenses. This
example is intended to help you understand your ongoing costs (in dollars) of
investing in the Fund and to compare these costs with the ongoing costs of
investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of
the period and held for the entire period as indicated below.
ACTUAL EXPENSES
The first line of the table below provides information about actual account
values and actual expenses. You may use the information in this line, together
with the amount you invested, to estimate the expenses that you paid over the
period. Simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
in the first line under the heading entitled "Expenses Paid During Period" to
estimate the expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio and an assumed annual rate of return of 5% before expenses, which is not
the Fund's actual return. The hypothetical account values and expenses may not
be used to estimate the actual ending account balance or expenses you paid for
the period. You may use this information to compare the ongoing costs of
investing in the Fund and other funds by comparing this 5% hypothetical example
with the 5% hypothetical examples that appear in the shareholder reports of
other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads), or contingent deferred sales charges on redemptions.
Therefore, the second line of the table is useful in comparing ongoing costs
only, and will not help you determine the relative total costs of owning
different funds. In addition, if these transactional costs were included, your
costs would have been higher.
BEGINNING ENDING
ACCOUNT VALUE ACCOUNT VALUE EXPENSES PAID ANNUALIZED
AMERICAS GOVERNMENT INCOME PORTFOLIO JANUARY 1, 2005 JUNE 30, 2005 DURING PERIOD* EXPENSE RATIO*
- ---------------------------------------------------------------------------------------------------------------
CLASS A
Actual $1,000 $1,053.41 $6.42 1.26%
Hypothetical (5% return before expenses) $1,000 $1,018.55 $6.31 1.26%
CLASS B
Actual $1,000 $1,051.66 $7.68 1.51%
Hypothetical (5% return before expenses) $1,000 $1,017.31 $7.55 1.51%
* Expenses are equal to each classes' annualized expense ratios, multiplied by
the average account value over the period, multiplied by the number of days in
the most recent fiscal half-year/365 (to reflect the one-half year period).
1
AMERICAS GOVERNMENT INCOME PORTFOLIO
SECURITY TYPE BREAKDOWN
JUNE 30, 2005 (UNAUDITED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
PERCENT OF
SECURITY TYPE U.S. $ VALUE NET ASSETS
_______________________________________________________________________________
Government/Agency Obligations $ 37,722,007 65.4%
- -------------------------------------------------------------------------------
U.S. Treasury Securities 27,380,779 47.4
------------ -----
- -------------------------------------------------------------------------------
Total Investments* 65,102,786 112.8
- -------------------------------------------------------------------------------
Cash and receivables, net of liabilities (7,392,368) (12.8)
------------ -----
- -------------------------------------------------------------------------------
Net Assets $ 57,710,418 100.0%
- -------------------------------------------------------------------------------
* Excludes short-term investments.
2
AMERICAS GOVERNMENT INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2005 (UNAUDITED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
PRINCIPAL
AMOUNT
(000) U.S. $ VALUE
- -------------------------------------------------------------------------------
LONG-TERM INVESTMENTS-112.8%
CANADA-17.4%
GOVERNMENT/AGENCY OBLIGATIONS-17.4%
Government of Canada
3.00%, 12/01/36 (a) CAD $ 1,293 $ 1,317,563
5.75%, 6/01/33 (a) 5,077 5,127,969
6.00%, 6/01/11 (a) 2,992 2,764,254
Province of Ontario
5.60%, 6/02/35 (a) 300 278,683
Province of Quebec
5.50%, 12/01/14 (a) 600 539,574
--------------
Total Canadian Securities
(cost $9,536,557) 10,028,043
--------------
MEXICO-26.0%
GOVERNMENT/AGENCY OBLIGATIONS-26.0%
Mexican Government Bonds
8.00%, 12/07/23 (a) MXP 34,501 2,722,267
Series M
9.00%, 12/22/11 (a) 15,000 1,374,066
Series M7
8.00%, 12/24/08 (a) 46,242 4,156,210
Series M20
10.00%, 12/05/24 (a) 16,205 1,541,516
Series MI7
9.00%, 12/24/09 (a) 37,390 3,452,911
Series MI10
9.00%, 12/20/12 (a) 19,322 1,767,320
--------------
Total Mexican Securities
(cost $14,084,609) 15,014,290
--------------
UNITED STATES-69.4%
U.S. GOVERNMENT SPONSORED AGENCY
OBLIGATIONS-22.0%
Federal National Mortgage Association
4.125%, 4/15/14 US 2,000 1,984,136
5.375%, 11/15/11 5,000 5,358,400
7.00%, 3/01/32 161 170,145
Government National Mortgage Association
6.00%, TBA 5,000 5,156,250
9.00%, 9/15/24 10 10,743
--------------
12,679,674
--------------
U.S. TREASURY SECURITIES-47.4%
U.S. Treasury Bonds
6.25%, 5/15/30 3,300 4,298,379
U.S. Treasury Notes
1.625%, 1/15/15 (TIPS) 2,965 2,954,368
3.50%, 11/15/09 4,915 4,871,802
4.25%, 8/15/13-11/15/13 (b) 3,570 3,658,957
4.875%, 2/15/12 (c) 3,570 159,305
U.S. Treasury Strips
0.00%, 5/15/13-11/15/21 20,700 11,437,968
--------------
27,380,779
--------------
Total United States Securities
(cost $37,121,812) 40,060,453
--------------
Total Long-Term Investments
(cost $60,742,978) 65,102,786
--------------
SHORT-TERM INVESTMENTS-2.3%
TIME DEPOSITS-2.3%
Bank of New York
2.063%, 7/01/05 525 525,000
Societe Generale
3.34%, 7/01/05 800 800,000
--------------
Total Short-Term Investments
(cost $1,325,000) 1,325,000
--------------
TOTAL INVESTMENTS-115.1%
(cost $62,067,978) 66,427,786
Other assets less liabilities-(15.1%) (8,717,368)
--------------
NET ASSETS-100% $ 57,710,418
==============
3
AMERICAS GOVERNMENT INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS
(CONTINUED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
FORWARD EXCHANGE CURRENCY CONTRACTS (SEE NOTE D)
U.S. $
CONTRACT VALUE ON U.S. $ UNREALIZED
AMOUNT ORIGINATION CURRENT APPRECIATION/
(000 DATE VALUE (DEPRECIATION)
- --------------------------------------------------------------------------------------------------------
BUY CONTRACTS
Canadian Dollar, settling 7/07/05 697 $ 566,768 $ 568,870 $ 2,102
SALE CONTRACTS
Canadian Dollar, settling 7/08/05 2,448 1,967,681 1,997,924 (30,243)
Canadian Dollar, settling 8/05/05 9,098 7,318,313 7,431,281 (112,968)
Mexican Peso, settling 7/15/05 105,293 9,602,658 9,776,909 (174,251)
Mexican Peso, settling 7/20/05 4,953 452,766 459,510 (6,744)
FINANCIAL FUTURES CONTRACTS SOLD (SEE NOTE D)
VALUE AT
NUMBER OF EXPIRATION ORIGINAL JUNE 30, UNREALIZED
TYPE CONTRACTS MONTH VALUE 2005 DEPRECIATION
- -----------------------------------------------------------------------------------------------
U.S. Treasury Note September
10 Year Futures 112 2005 $12,545,562 $12,708,500 $ (162,938)
REVERSE REPURCHASE AGREEMENT (SEE NOTE D)
BROKER INTEREST RATE MATURITY AMOUNT
- --------------------------------------------------------------------------------------
Deutsche Bank 3.25% 7/01/05 $2,930,364
(a) Position, or portion thereof, with an aggregate market value of
$25,237,297 have been segregated to collateralize open forward exchange
currency contracts.
(b) Position, or portion thereof, with an aggregate market value of $3,123,167
have been segregated to collateralize reverse repurchase agreements.
(c) Position, with a market value of $159,305 has been segregated to
collateralize margin requirement for open futures contracts.
Currency Abbreviations:
CAD - Canadian Dollar
MXP - Mexican Peso
US$ - United States Dollar
Glossary of Terms:
TBA - To Be Assigned-Securities are purchased on a forward commitment with an
approximate principal amount (generally +/-1.0%) and no definite maturity date.
The actual principal amount and maturity date will be determined upon
settlement when the specific mortgage pools are assigned.
TIPS - Treasury Inflation Protected Security
See Notes to Financial Statements.
4
AMERICAS GOVERNMENT INCOME PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2005 (UNAUDITED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $62,067,978) $ 66,427,786
Cash 634
Foreign cash, at value (cost $219,141) 220,724
Unrealized appreciation of forward exchange currency
contracts 2,102
Interest receivable 743,594
------------
Total assets 67,394,840
------------
LIABILITIES
Unrealized depreciation of forward exchange currency
contracts 324,206
Payable for investment securities purchased 6,224,274
Reverse repurchase agreement 2,930,364
Payable for capital stock redeemed 65,173
Advisory fee payable 23,590
Payable for variation margin on futures contracts 22,750
Distribution fee payable 2,355
Administrative fee payable 1,215
Transfer agent fee payable 55
Accrued expenses 90,440
------------
Total liabilities 9,684,422
------------
NET ASSETS $ 57,710,418
============
COMPOSITION OF NET ASSETS
Capital stock, at par $ 4,559
Additional paid-in capital 53,834,951
Undistributed net investment income 418,684
Accumulated net realized loss on investment and foreign
currency transactions (419,744)
Net unrealized appreciation of investments and foreign
currency denominated assets and liabilities 3,871,968
------------
$ 57,710,418
============
CLASS A SHARES
Net assets $ 46,076,221
============
Shares of capital stock outstanding 3,639,270
============
Net asset value per share $ 12.66
============
CLASS B SHARES
Net assets $ 11,634,197
============
Shares of capital stock outstanding 919,839
============
Net asset value per share $ 12.65
============
See Notes to Financial Statements.
5
AMERICAS GOVERNMENT INCOME PORTFOLIO
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 2005 (UNAUDITED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
INVESTMENT INCOME
Interest $ 1,914,731
------------
EXPENSES
Advisory fee 140,389
Distribution fee -- Class B 12,897
Custodian 71,502
Administrative 36,250
Audit 20,730
Printing 6,698
Legal 1,160
Directors' fees 496
Transfer agency 403
Miscellaneous 8,353
------------
Total expenses before interest 298,878
Interest expense 66,584
------------
Total expenses 365,462
------------
Net investment income 1,549,269
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENT AND
FOREIGN CURRENCY TRANSACTIONS
Net realized gain (loss) on:
Investment transactions 591,394
Written options 11,633
Futures (229,818)
Foreign currency transactions (491,398)
Net change in unrealized appreciation/depreciation of:
Investments 1,695,673
Futures (22,555)
Foreign currency denominated assets and liabilities (215,217)
------------
Net gain on investment and foreign currency transactions 1,339,712
------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 2,888,981
============
See Notes to Financial Statements.
6
AMERICAS GOVERNMENT INCOME PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 2005 DECEMBER 31,
(UNAUDITED) 2004
============== ==============
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS
Net investment income $ 1,549,269 $ 3,056,328
Net realized gain (loss) on investment and
foreign currency transactions (118,189) 632,661
Net change in unrealized appreciation/
depreciation of investments and foreign
currency denominated assets and
liabilities 1,457,901 (1,273,324)
-------------- --------------
Net increase in net assets from operations 2,888,981 2,415,665
DIVIDENDS TO SHAREHOLDERS FROM
Net investment income
Class A (3,193,186) (2,720,329)
Class B (772,040) (347,443)
CAPITAL STOCK TRANSACTIONS
Net increase (decrease) 1,618,134 (8,427,958)
-------------- --------------
Total increase (decrease) 541,889 (9,080,065)
NET ASSETS
Beginning of period 57,168,529 66,248,594
-------------- --------------
End of period (including undistributed net
investment income of $418,684 and
$2,834,641, respectively) $ 57,710,418 $ 57,168,529
============== ==============
See Notes to Financial Statements.
7
AMERICAS GOVERNMENT INCOME PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2005 (UNAUDITED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
NOTE A: SIGNIFICANT ACCOUNTING POLICIES
The AllianceBernstein Americas Government Income Portfolio (the "Portfolio") is
a series of AllianceBernstein Variable Products Series Fund, Inc., (the
"Fund"). The Portfolio's investment objective is to seek the highest level of
current income, consistent with what Alliance Capital Management L.P.,
considers to be prudent investment risk, that is available from a portfolio of
debt securities issued or guaranteed by the government of the United States,
Canada, or Mexico, their political subdivisions (including Canadian provinces,
but excluding States of the United States), agencies, instrumentalities or
authorities. The Fund was incorporated in the State of Maryland on November 17,
1987, as an open-end series investment company. The Fund offers twenty-three
separately managed pools of assets which have differing investment objectives
and policies. The Portfolio 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.
The Portfolio 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
the Portfolio's net asset value per share.
The financial statements have been prepared in conformity with U.S. generally
accepted accounting principles, which require management to make certain
estimates and assumptions that affect the reported amounts of assets and
liabilities in the financial statements and amounts of income and expenses
during the reporting period. Actual results could differ from those estimates.
Additional information about some of the items discussed in these Notes to
Financial Statements is contained in the Fund's Statement of Additional
Information, which is available upon request. The following is a summary of
significant accounting policies followed by the Portfolio.
1. SECURITY VALUATION
Portfolio securities are valued at their current market value determined on the
basis of market quotations or, if market quotations are not readily available
or are deemed unreliable, at "fair value" as determined in accordance with
procedures established by and under the general supervision of the Fund's Board
of Directors.
In general, the market value of securities which are readily available and
deemed reliable are determined as follows. Securities listed on a national
securities exchange or on a foreign securities exchange are valued at the last
sale price at the close of the exchange or foreign securities exchange. If
there has been no sale on such day, the securities are valued at the mean of
the closing bid and asked prices on such day. Securities listed on more than
one exchange are valued by reference to the principal exchange on which the
securities are traded; securities not listed on an exchange but traded on The
NASDAQ Stock Market, Inc. ("NASDAQ") are valued in accordance with the NASDAQ
Official Closing Price; listed put or call options are valued at the last sale
price. If there has been no sale on that day, such securities will be valued at
the closing bid prices on that day; open futures contracts and options thereon
are valued using the closing settlement price or, in the absence of such a
price, the most recent quoted bid price. If there are no quotations available
for the day of valuation, the last available closing settlement price is used;
securities traded in the over-the-counter market, ("OTC") (but excluding
securities traded on NASDAQ) are valued at the mean of the current bid and
asked prices as reported by the National Quotation Bureau or other comparable
sources; U.S. Government securities and other debt instruments having 60 days
or less remaining until maturity are valued at amortized cost if their original
maturity was 60 days or less; or by amortizing their fair value as of the 61st
day prior to maturity if their original term to maturity exceeded 60 days;
fixed-income securities, including mortgage backed and asset backed securities,
may be valued on the basis of prices provided by a pricing service or at a
price obtained from one or more of the major broker/dealers. In cases where
broker/dealer quotes are obtained, Alliance Capital Management, L.P. (the
"Adviser") may establish procedures whereby changes in market yields or spreads
are used to adjust, on a daily basis, a recently obtained quoted price on a
security; and OTC and other derivatives are valued on the basis of a quoted bid
price or spread from a major broker/dealer in such security.
Securities for which market quotations are not readily available (including
restricted securities) or are deemed unreliable are valued at fair value.
Factors considered in making this determination may include, but are not
limited to, information obtained by contacting the issuer, analysts, analysis
of the issuer's financial statements or other available documents. In addition,
the Fund may use fair value pricing for securities primarily traded in non-U.S.
markets because, most foreign markets close well before the Fund values its
securities at 4:00 p.m., Eastern Time. The earlier close of these foreign
8
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
markets gives rise to the possibility that significant events, including broad
market moves, may have occurred in the interim and may materially affect the
value of those securities.
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 prices of such currencies against the U.S.
dollar. Purchases and sales of portfolio securities are translated into U.S.
dollars at the rates of exchange prevailing when such securities were acquired
or sold. Income and expenses are translated into U.S. dollars at rates of
exchange prevailing when accrued.
Net realized gain or loss on foreign currency transactions represents foreign
exchange gains and losses from sales and maturities of foreign fixed income
investments, foreign currency exchange contracts, holdings of foreign
currencies, currency gains or losses realized between the trade and settlement
dates on foreign investment transactions, and the difference between the
amounts of interest, dividends and foreign withholding taxes recorded on the
Portfolio's books and the U.S. dollar equivalent amounts actually received or
paid. Net unrealized 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 or depreciation of investments
and foreign currency denominated assets and liabilities.
3. TAXES
It is the policy of the Portfolio 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. The Fund may be subject to taxes imposed by countries in which it
invests. Such taxes are generally based on income and/or capital gains earned
or repatriated. Taxes are accrued and applied to net investment income, net
realized gains and net unrealized appreciation/depreciation as such income
and/or gains are earned.
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 trade date securities
are purchased or sold. Investment gains and losses are determined on the
identified cost basis. The Portfolio amortizes premiums and accretes discounts
as adjustments to interest income.
5. INCOME AND EXPENSES
Expenses attributable to a single portfolio are charged to that portfolio.
Expenses of the Fund are charged to each portfolio in proportion to net assets.
All income earned and expenses incurred by a portfolio with multi-class shares
outstanding are borne on a pro-rata basis by each outstanding class of shares,
based on the proportionate interest in the portfolio represented by the net
assets of such class, except that the portfolio's Class B shares bear the
distribution fees.
6. DIVIDENDS AND DISTRIBUTIONS
The Portfolio declares and distributes dividends and distributions from net
investment income and net realized gains, respectively, if any, at least
annually. 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 U.S. generally accepted accounting principles. 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.
7. REPURCHASE AGREEMENTS
It is the policy of the Portfolio that its custodian or designated subcustodian
take control of securities as collateral under repurchase agreements and to
determine on a daily basis that the value of such securities are sufficient to
cover the value of the repurchase agreements. If the seller defaults and the
value of the collateral declines or if bankruptcy proceedings are commenced
with respect to the seller of the security, realization of collateral by the
Portfolio may be delayed or limited.
9
AMERICAS GOVERNMENT INCOME PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
NOTE B: ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Until September 6, 2004, under the terms of an investment advisory agreement,
the Portfolio paid the Adviser an advisory fee at an annual rate of .65% of the
Portfolio's average daily net assets. Effective September 7, 2004, the terms of
the investment advisory agreement were amended so that the advisory fee was
reduced to an annual rate of .50% of the first $2.5 billion, .45% of the next
$2.5 billion and .40% in excess of $5 billion, of the Portfolio's average daily
net assets. The fee is accrued daily and paid monthly.
Effective January 1, 2004 through September 6, 2004, in contemplation of the
final agreement with the Office of New York Attorney General ("NYAG"), the
Adviser began waiving a portion of its advisory fee so as to charge the
Portfolio at the reduced annual rate discussed above. For a more complete
discussion of the Adviser's settlement with the NYAG, please see "Legal
Proceedings" below.
Pursuant to the advisory agreement, the Portfolio paid $36,250 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, 2005.
The Portfolio compensates Alliance Global Investor Services, Inc., a
wholly-owned subsidiary of the Adviser, under a Transfer Agency Agreement for
providing personnel and facilities to perform transfer agency services for the
Portfolio. Such compensation amounted to $403 for the six months ended June 30,
2005.
NOTE C: DISTRIBUTION PLAN
The Portfolio has adopted a Distribution Plan (the "Plan") for Class B shares
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the
Plan, the Portfolio pays distribution and servicing fees to AllianceBernstein
Investment Research and Management, Inc. (the "Distributor"), a wholly-owned
subsidiary of the Adviser, at an annual rate of up to .50% of the 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 limits
payments under the Plan to .25% of the Portfolio's average daily net assets
attributable to Class B shares. The Plan provides that the Distributor will use
such payments in their entirety for distribution assistance and promotional
activities.
The Portfolio is not obligated under the Plan to pay any distribution and
servicing fees in excess of the amounts set forth above. The purpose of the
payments to the Distributor under the Plan is to compensate the Distributor for
its distribution services with respect to the sale of the Portfolio's Class B
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 Plan is
characterized by the staff of the Securities and Exchange Commission as being
of the "compensation" variety.
In the event that the Plan is terminated or not continued, no distribution and
servicing fees (other than current amounts accrued but not yet paid) would be
owed by the Portfolio to the Distributor.
The Plan also provides that the Adviser may use its own resources to finance
the distribution of the Portfolio's shares.
NOTE D: INVESTMENT TRANSACTIONS
Purchases and sales of investment securities (excluding short-term investments)
for the six months ended June 30, 2005, were as follows:
PURCHASES SALES
============== ==============
Investment securities
(excluding U.S. government securities) $ 22,272,187 $ 16,799,995
U.S. government securities 10,475,934 19,899,773
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 futures and
foreign currency transactions) are as follows:
Gross unrealized appreciation $ 4,387,294
Gross unrealized depreciation (27,486)
--------------
Net unrealized appreciation $ 4,359,808
==============
10
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
1. FINANCIAL FUTURES CONTRACTS
The Portfolio may buy or sell financial futures contracts for the purpose of
hedging its portfolio against adverse affects of anticipated movements in the
market. The Portfolio bears the market risk that arises from changes in the
value of these financial instruments and the imperfect correlation between
movements in the price of the futures contracts and movements in the price of
the securities hedged or used for cover.
At the time the Portfolio enters into a futures contract, the Portfolio
deposits and maintains as collateral an initial margin as required by the
exchange on which the transaction is effected. Pursuant to the contract, the
Portfolio agrees to receive from or pay to the broker an amount of cash equal
to the daily fluctuation in the value of the contract. Such receipts or
payments are known as variation margin and are recorded by the Portfolio as
unrealized gains or losses. Risks may arise from the potential inability of a
counterparty to meet the terms of a contract. When the contract is closed, the
Portfolio records a realized gain or loss equal to the difference between the
value of the contract at the time it was opened and the time it was closed.
2. FORWARD EXCHANGE CURRENCY CONTRACTS
The Portfolio may enter into forward exchange currency contracts in order to
hedge its exposure to changes in foreign currency exchange rates on its 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 on a future date at a negotiated forward rate. The gain or loss
arising from the difference between the original contract and the closing of
such contract would be included in net realized gain or loss on foreign
currency transactions.
Fluctuations in the value of open forward exchange currency contracts are
recorded for financial reporting purposes as unrealized appreciation and
depreciation by the Portfolio.
The Portfolio's custodian will place and maintain cash not available for
investment or other liquid assets in a separate account of the Portfolio having
a value at least equal to the aggregate amount of the Portfolio's commitments
under forward exchange currency contracts entered into with respect to position
hedges.
Risks may arise from the potential inability of the 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 the Portfolio has in that particular
currency contract.
3. OPTION TRANSACTIONS
For hedging and investment purposes, the Portfolio may purchase and write
(sell) put and call options on U.S. and foreign government securities and
foreign currencies that are traded on U.S. and foreign 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 written options which
expire unexercised are recorded by the Portfolio on the expiration date as
realized gains from options written. 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. If a
put option is exercised, the premium received reduces the cost basis of the
security or currency purchased by the Portfolio. 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.
11
AMERICAS GOVERNMENT INCOME PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
Transactions in written options for the six months ended June 30, 2005 were as
follows:
NUMBER OF PREMIUMS
CONTRACTS RECEIVED
============== ==============
OPTIONS OUTSTANDING AT DECEMBER 31, 2004 -0- $ -0-
Options written 13,415,000 12,135
Options terminated in closing purchase
Transactions (13,415,000) (12,135)
-------------- --------------
OPTIONS OUTSTANDING AT JUNE 30, 2005 -0- $ -0-
============== ==============
4. REVERSE REPURCHASE AGREEMENTS
Under a reverse repurchase agreement, the Portfolio sells securities and agrees
to repurchase them at a mutually agreed upon date and price. At the time the
Portfolio enters into a reverse repurchase agreement, it will establish a
segregated account with the custodian containing liquid assets having a value
at least equal to the repurchase price.
For the six months ended June 30, 2005, the average amount of reverse
repurchase agreements outstanding was $3,960,827 and the daily weighted average
interest rate was 2.74%.
5. DOLLAR ROLLS
The Portfolio may enter into dollar rolls. Dollar rolls involve sales by the
Portfolio of securities for delivery in the current month and the Portfolio's
simultaneously contracting to repurchase substantially similar (same type and
coupon) securities on a specified future date. During the roll period, the
Portfolio forgoes principal and interest paid on the securities. The Portfolio
is compensated by the difference between the current sales price and the lower
forward price for the future purchase (often referred to as the "drop") as well
as by the interest earned on the cash proceeds of the initial sale. Dollar
rolls involve the risk that the market value of the securities the Portfolio is
obligated to repurchase under the agreement may decline below the repurchase
price. Dollar rolls are speculative techniques and may be considered to be
borrowings by the Portfolio. For the six months ended June 30, 2005, the
Portfolio earned income of $48,697 from dollar rolls.
NOTE E: SECURITIES LENDING
The Portfolio has entered into a securities lending agreement with UBS Warburg
LLC (the "Lending Agent"). Under the terms of the agreement, the Lending Agent,
on behalf of the Portfolio administers the lending of portfolio securities to
certain broker-dealers. In return, the Portfolio receives fee income from the
lending transactions or it retains a portion of interest on the investment of
any cash received as collateral. The Portfolio also continues to receive
dividends or interest on the securities loaned. Unrealized gain or loss on the
value of the securities loaned that may occur during the term of the loan will
be reflected in the accounts of the Portfolio. All loans are continuously
secured by collateral exceeding the value of the securities loaned. All
collateral consists of either cash or U.S. government securities. The Lending
Agent invests the cash collateral received in an eligible money market vehicle
in accordance with the investment restrictions of the Portfolio. The Lending
Agent will indemnify the Portfolio for any loss resulting from a borrower's
failure to return a loaned security when due. For the six months ended June 30,
2005, the Portfolio had no securities on loan.
NOTE F: CAPITAL STOCK
There are 1,000,000,000 shares of $.001 par value capital stock authorized
divided into two classes, designated Class A and Class B shares. Each class
consists of 500,000,000 authorized shares. Transactions in capital stock were
as follows:
SHARES AMOUNT
--------------------------- ------------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
JUNE 30, 2005 DECEMBER 31, JUNE 30, 2005 DECEMBER 31,
(UNAUDITED) 2004 (UNAUDITED) 2004
------------ ------------ -------------- --------------
CLASS A
Shares sold 214,413 392,302 $ 2,791,205 $ 5,147,031
Shares issued
in reinvestment
of dividends 254,032 225,566 3,193,186 2,720,329
Shares redeemed (529,043) (1,572,400) (6,841,081) (20,172,752)
------------ ------------ -------------- --------------
Net decrease (60,598) (954,532) $ (856,690) $ (12,305,392)
=========== =========== ============= =============
12
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
SHARES AMOUNT
--------------------------- ------------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
JUNE 30, 2005 DECEMBER 31, JUNE 30, 2005 DECEMBER 31,
(UNAUDITED) 2004 (UNAUDITED) 2004
------------ ------------ -------------- --------------
CLASS B
Shares sold 353,571 589,281 $ 4,582,871 $ 7,708,605
Shares issued
in reinvestment
of dividends 61,468 28,810 772,040 347,443
Shares redeemed (223,563) (327,735) (2,880,087) (4,178,614)
------------ ------------ -------------- --------------
Net increase 191,476 290,356 $ 2,474,824 $ 3,877,434
=========== =========== ============= =============
NOTE G: RISKS INVOLVED IN INVESTING IN THE PORTFOLIO
Interest Rate Risk and Credit Risk-- Interest rate risk is the risk that
changes in interest rates will affect the value of the Portfolio's investments
in fixed-income debt securities such as bonds or notes. Increases in interest
rates may cause the value of the Portfolio's investments to decline. Credit
risk is the risk that the issuer or guarantor of a debt security, or the
counterparty to a derivative contract, will be unable or unwilling to make
timely principal and/or interest payments, or to otherwise honor its
obligations. The degree of risk for a particular security may be reflected in
its credit risk rating. Credit risk is greater for medium quality and
lower-rated securities. Lower-rated debt securities and similar unrated
securities (commonly known as "junk bonds") have speculative elements or are
predominantly speculative risks.
Foreign Securities 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.
Indemnification Risk--In the ordinary course of business, the Portfolio enters
into contracts that contain a variety of indemnifications. The Portfolio's
maximum exposure under these arrangements is unknown. However, the Portfolio
has not had prior claims or losses pursuant to these indemnification provisions
and expects the risk of loss thereunder to be remote.
NOTE H: JOINT CREDIT FACILITY
A number of open-end mutual funds managed by the Adviser, including the
Portfolio, participate in a $500 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
Portfolio did not utilize the Facility during the six months ended June 30,
2005.
NOTE I: DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions to be paid for the year ending December 31,
2005 will be determined at the end of the current fiscal year. The tax
character of distributions paid during the fiscal years ended December 31, 2004
and December 31, 2003 were as follows:
2004 2003
============== ==============
Distributions paid from:
Ordinary income $ 3,067,772 $ 3,388,664
Net long-term capital gains -0- -0-
-------------- --------------
Total taxable distributions 3,067,772 3,388,664
-------------- --------------
Total distributions paid $ 3,067,772 $ 3,388,664
============== ==============
13
AMERICAS GOVERNMENT INCOME PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
As of December 31, 2004, the components of accumulated earnings/(deficit) on a
tax basis were as follows:
Undistributed ordinary income $ 3,957,977
Accumulated capital and other losses (1,675,991)(a)
Unrealized appreciation/(depreciation) 2,665,167(b)
--------------
Total accumulated earnings/(deficit) $ 4,947,153
==============
(a) On December 31, 2004, the Portfolio had a net capital loss carryforward of
$27,392, all of which expires in the year 2010. To the extent future capital
gains are offset by capital loss carryforwards, such gains will not be
distributed. During the current fiscal year, the Portfolio utilized capital
loss carryforwards of $1,075,460. Net capital losses and foreign currency
losses incurred after October 31, and within the taxable year are deemed to
arise on the first business day of the Portfolio's next taxable year. For the
year ended December 31, 2004, the Portfolio deferred to January 1, 2005,
post-October foreign currency losses of $683,074 and post-October capital
losses of $110,120. For the year ended December 31, 2004, the Portfolio
deferred losses on straddles of $855,406.
(b) The differences between book-basis and tax-basis unrealized
appreciation/(depreciation) are attributable primarily to the realization for
tax purposes of gains/losses on certain derivative instruments.
NOTE J: LEGAL PROCEEDINGS
As has been previously reported, the staff of the U.S. Securities and Exchange
Commission ("SEC") and the NYAG have been investigating practices in the mutual
fund industry identified as "market timing" and "late trading" of mutual fund
shares. Certain other regulatory authorities have also been conducting
investigations into these practices within the industry and have requested that
the Adviser provide information to them. The Adviser has been cooperating and
will continue to cooperate with all of these authorities.
On December 18, 2003, the Adviser confirmed that it had reached terms with the
SEC and the NYAG for the resolution of regulatory claims relating to the
practice of "market timing" mutual fund shares in some of the AllianceBernstein
Mutual Funds. The agreement with the SEC is reflected in an Order of the
Commission ("SEC Order"). The agreement with the NYAG is memorialized in an
Assurrance of Discontinuance dated September 1, 2004 ("NYAG Order"). Among the
key provisions of these agreements are the following:
(i) The Adviser agreed to establish a $250 million fund (the "Reimbursement
Fund") to compensate mutual fund shareholders for the adverse effects of market
timing attributable to market timing relationships described in the SEC Order.
According to the SEC Order, the Reimbursement Fund is to be paid, in order of
priority, to fund investors based on (i) their aliquot share of losses suffered
by the fund due to market timing, and (ii) a proportionate share of advisory
fees paid by such fund during the period of such market timing;
(ii) The Adviser agreed to reduce the advisory fees it receives from some of
the AllianceBernstein long-term, open-end retail funds until December 31, 2008;
and
(iii) The Adviser agreed to implement changes to its governance and compliance
procedures. Additionally, the SEC Order and the NYAG Order contemplate that the
Adviser's registered investment company clients, including the Fund, will
introduce governance and compliance changes.
In anticipation of final, definitive documentation of the NYAG Order and
effective January 1, 2004, the Adviser began waiving a portion of its advisory
fee. On September 7, 2004, the Fund's investment advisory agreement was amended
to reflect the reduced advisory fee. For more information on this waiver and
amendment to the Fund's investment advisory agreement, please see "Advisory Fee
and Other Transactions with Affiliates" above.
A special committee of the Adviser's Board of Directors, comprised of the
members of the Adviser's Audit Committee and the other independent member of
the Adviser's Board, is continuing to direct and oversee an internal
investigation and a comprehensive review of the facts and circumstances
relevant to the SEC's and the NYAG's investigations.
In addition, the Independent Directors of the Fund ("the Independent
Directors") have initiated an investigation of the above-mentioned matters with
the advice of an independent economic consultant and independent counsel. The
Independent Directors have formed a special committee to supervise the
investigation.
On October 2, 2003, a putative class action complaint entitled Hindo et al. v.
AllianceBernstein Growth & Income Fund et al. (the "Hindo Complaint") was filed
against the Adviser; Alliance Capital Management Holding L.P.; Alliance Capital
Management Corporation; AXA Financial, Inc.; certain of the AllianceBernstein
Mutual Funds, including the Fund; Gerald Malone; Charles Schaffran
(collectively, the "Alliance Capital defendants"); and certain other defendants
not affil-
14
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
iated with the Adviser. The Hindo Complaint was filed in the United States
District Court for the Southern District of New York by alleged shareholders of
two of the AllianceBernstein Mutual Funds. The Hindo Complaint alleges that
certain of the Alliance Capital defendants failed to disclose that they
improperly allowed certain hedge funds and other unidentified parties to engage
in late trading and market timing of AllianceBernstein Fund securities,
violating Sections 11 and 15 of the Securities Act, Sections 10(b) and 20(a) of
the Exchange Act, and Sections 206 and 215 of the Advisers Act. Plaintiffs seek
an unspecified amount of compensatory damages and rescission of their contracts
with the Adviser, including recovery of all fees paid to the Adviser pursuant
to such contracts.
Since October 2, 2003, numerous additional lawsuits making factual allegations
similar to those in the Hindo Complaint were filed against the Adviser and
certain other defendants, some of which name the Fund as a defendant. All of
these lawsuits seek an unspecified amount of damages. The lawsuits are now
pending in the United States District Court for the District of Maryland
pursuant to a ruling by the Judicial Panel on Multidistrict Litigation
transferring and centralizing all of the mutual fund cases involving market and
late trading in the District of Maryland.
As a result of the matters discussed above, investors in the AllianceBernstein
Mutual Funds may choose to redeem their investments. This may require the
AllianceBernstein Mutual Funds to sell investments held by those funds to
provide for sufficient liquidity and could also have an adverse effect on the
investment performance of the AllianceBernstein Mutual Funds.
The Adviser and approximately twelve other investment management firms were
publicly mentioned in connection with the settlement by the SEC of charges that
an unaffiliated broker/dealer violated federal securities laws relating to its
receipt of compensation for selling specific mutual funds and the disclosure of
such compensation. The SEC indicated publicly that, among other things, it was
considering enforcement action in connection with mutual funds' disclosure of
such arrangements and in connection with the practice of considering mutual
fund sales in the direction of brokerage commissions from fund portfolio
transactions. The SEC issued subpoenas to the Adviser, and the NASD issued
requests for information in connection with this matter and the Adviser
provided documents and other information to the SEC and NASD and cooperated
fully with the investigations. On June 8, 2005 the NASD announced that it had
reached a settlement with the Distributor in connection with this matter.
Management of the Adviser expects that the settlement has resolved both
regulatory inquiries described above.
On June 22, 2004, a purported class action complaint entitled Aucoin, et al. v.
Alliance Capital Management L.P., et al. ("Aucoin Complaint") was filed against
the Adviser, Alliance Capital Management Holding L.P., Alliance Capital
Management Corporation, AXA Financial, Inc., AllianceBernstein Investment
Research & Management, Inc., certain current and former directors of the
AllianceBernstein Mutual Funds, and unnamed Doe defendants. The Aucoin
Complaint names certain of the AllianceBernstein mutual funds as nominal
defendants. The Aucoin Complaint was filed in the United States District Court
for the Southern District of New York by an alleged shareholder of an
AllianceBernstein mutual fund. The Aucoin Complaint alleges, among other
things, (i) that certain of the defendants improperly authorized the payment of
excessive commissions and other fees from fund assets to broker-dealers in
exchange for preferential marketing services, (ii) that certain of the
defendants misrepresented and omitted from registration statements and other
reports material facts concerning such payments, and (iii) that certain
defendants caused such conduct as control persons of other defendants. The
Aucoin Complaint asserts claims for violation of Sections 34(b), 36(b) and
48(a) of the Investment Company Act, Sections 206 and 215 of the Advisers Act,
breach of common law fiduciary duties, and aiding and abetting breaches of
common law fiduciary duties. Plaintiffs seek an unspecified amount of
compensatory damages and punitive damages, rescission of their contracts with
the Adviser, including recovery of all fees paid to the Adviser pursuant to
such contracts, an accounting of all fund-related fees, commissions and soft
dollar payments, and restitution of all unlawfully or discriminatorily obtained
fees and expenses.
Since June 22, 2004, numerous additional lawsuits making factual allegations
substantially similar to those in the Aucoin Complaint were filed against the
Adviser and certain other defendants, and others may be filed.
It is possible that these matters and/or other developments resulting from
these matters could result in increased redemptions of the Fund's shares or
other adverse consequences to the Fund. However, the Adviser believes that
these matters are not likely to have a material adverse effect on its ability
to perform advisory services relating to the Fund.
15
AMERICAS GOVERNMENT INCOME PORTFOLIO
FINANCIAL HIGHLIGHTS
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
CLASS A
----------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 2005 ---------------------------------------------------------------
(UNAUDITED) 2004 2003 2002 2001(a) 2000
----------- ----------- ----------- ----------- ----------- -----------
Net asset value, beginning of period $12.91 $13.01 $12.65 $12.17 $12.72 $12.42
INCOME FROM INVESTMENT OPERATIONS
Net investment income (b) .36 .65(c) .61 .67(c) .92(c) 1.08(c)
Net realized and unrealized gain (loss)
on investment and foreign currency
transactions .32 (.06) .34 .61 (.43) .37
Net increase in net asset value from
operations .68 .59 .95 1.28 .49 1.45
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.93) (.69) (.59) (.73) (.91) (.96)
Distributions from net realized gain
on investment transactions -0- -0- -0- (.07) (.13) (.19)
Total dividends and distributions (.93) (.69) (.59) (.80) (1.04) (1.15)
Net asset value, end of period $12.66 $12.91 $13.01 $12.65 $12.17 $12.72
TOTAL RETURN
Total investment return based on
net asset value (d) 5.34% 4.89% 7.35% 10.99% 3.59% 12.39%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $46,076 $47,776 $60,550 $72,307 $51,146 $33,154
Ratio to average net assets of:
Expenses, net of waivers and
reimbursements 1.26%(e) 1.00% 1.04% .93% .95% .95%
Expenses, before waivers and
reimbursements 1.26%(e) 1.11% 1.04% 1.05% 1.15% 1.24%
Expenses, excluding interest
expense 1.02%(e) .98% 1.04% .93% .95% .95%
Net investment income 5.56%(e) 5.07%(c) 4.75% 5.45%(c) 7.35%(c) 8.68%(c)
Portfolio turnover rate 51% 69% 73% 60% 57% 0%
See footnote summary on page 17.
16
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
CLASS B
--------------------------------------------------
SIX MONTHS JULY 22, 2002 (f)
ENDED YEAR ENDED DECEMBER 31, TO
JUNE 30, 2005 ------------------------ DECEMBER 31,
(UNAUDITED) 2004 2003 2002
----------- ----------- ----------- -----------
Net asset value, beginning of period $12.90 $13.01 $12.67 $12.04
INCOME FROM INVESTMENT OPERATIONS
Net investment income (b) .34 .62(c) .57 .42(c)
Net realized and unrealized gain (loss)
on investment and foreign currency
transactions .32 (.06) .36 .21
Net increase in net asset value from
operations .66 .56 .93 .63
LESS: DIVIDENDS
Dividends from net investment income (.91) (.67) (.59) -0-
Net asset value, end of period $12.65 $12.90 $13.01 $12.67
TOTAL RETURN
Total investment return based on net
asset value (d) 5.17% 4.67% 7.18% 5.23%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $11,634 $9,393 $5,698 $236
Ratio to average net assets of:
Expenses, net of waivers and
reimbursements 1.51%(e) 1.27% 1.30% 1.36%(e)
Expenses, before waivers and
reimbursements 1.51%(e) 1.37% 1.30% 1.48%(e)
Expenses, excluding interest expense 1.27%(e) 1.24% 1.30% 1.36%(e)
Net investment income 5.34%(e) 4.88%(c) 4.42% 4.72%(c)(e)
Portfolio turnover rate 51% 69% 73% 60%
(a) As required, effective January 1, 2001, the Portfolio has adopted the
provisions of the AICPA Audit and Accounting Guide, Audits of Investment
Companies, and began amortizing premium on debt securities. For the year ended
December 31, 2001, the effect of this change was to decrease net investment
income per share by $.04, increase net realized and unrealized (loss) on
investments per share by $.04, and decrease the ratio of net investment income
to average net assets from 7.61% to 7.35%. Per share, ratios and supplemental
data for periods prior to January 1, 2001 have not been restated to reflect
this change in presentation.
(b) Based on average shares oustanding.
(c) Net of expenses waived or reimbursed by the Adviser.
(d) 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 return does not reflect the
deduction of taxes that a shareholder would pay on Portfolio distributions or
the redemption of Portfolio shares. Total investment return calculated for a
period of less than one year is not annualized.
(e) Annualized.
(f) Commencement of distribution.
17
[LOGO] ALLIANCEBERNSTEIN (R)
Investment Research and Management
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND, INC.
> ALLIANCEBERNSTEIN TOTAL RETURN PORTFOLIO
SEMI-ANNUAL REPORT
JUNE 30, 2005
INVESTMENT PRODUCTS OFFERED
> ARE NOT FDIC INSURED
> MAY LOSE VALUE
> ARE NOT BANK GUARANTEED
YOU MAY OBTAIN A DESCRIPTION OF THE FUND'S PROXY VOTING POLICIES AND
PROCEDURES, AND INFORMATION REGARDING HOW THE FUND VOTED PROXIES RELATING TO
PORTFOLIO SECURITIES DURING THE MOST RECENT 12-MONTH PERIOD ENDED JUNE 30,
WITHOUT CHARGE. SIMPLY VISIT THE SECURITIES AND EXCHANGE COMMISSION'S (THE
"COMMISSION") WEB SITE AT WWW.SEC.GOV, OR CALL ALLIANCEBERNSTEIN AT (800)
227-4618.
THE FUND FILES ITS COMPLETE SCHEDULE OF PORTFOLIO HOLDINGS WITH THE COMMISSION
FOR THE FIRST AND THIRD QUARTERS OF EACH FISCAL YEAR ON FORM N-Q. THE FUND'S
FORMS N-Q ARE AVAILABLE ON THE COMMISSION'S WEB SITE AT WWW.SEC.GOV. THE FUND'S
FORMS N-Q MAY ALSO BE REVIEWED AND COPIED AT THE COMMISSION'S PUBLIC REFERENCE
ROOM IN WASHINGTON, DC; INFORMATION ON THE OPERATION OF THE PUBLIC REFERENCE
ROOM MAY BE OBTAINED BY CALLING (800) SEC-0330.
TOTAL RETURN PORTFOLIO
FUND EXPENSES
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including sales charges (loads) on purchase payments, contingent
deferred sales charges on redemptions and (2) ongoing costs, including
management fees; distribution (12b-1) fees; and other Fund expenses. This
example is intended to help you understand your ongoing costs (in dollars) of
investing in the Fund and to compare these costs with the ongoing costs of
investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of
the period and held for the entire period as indicated below.
ACTUAL EXPENSES
The first line of the table below provides information about actual account
values and actual expenses. You may use the information in this line, together
with the amount you invested, to estimate the expenses that you paid over the
period. Simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
in the first line under the heading entitled "Expenses Paid During Period" to
estimate the expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio and an assumed annual rate of return of 5% before expenses, which is not
the Fund's actual return. The hypothetical account values and expenses may not
be used to estimate the actual ending account balance or expenses you paid for
the period. You may use this information to compare the ongoing costs of
investing in the Fund and other funds by comparing this 5% hypothetical example
with the 5% hypothetical examples that appear in the shareholder reports of
other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads), or contingent deferred sales charges on redemptions.
Therefore, the second line of the table is useful in comparing ongoing costs
only, and will not help you determine the relative total costs of owning
different funds. In addition, if these transactional costs were included, your
costs would have been higher.
BEGINNING ENDING EXPENSES ANNUALIZED
VARP TOTAL ACCOUNT VALUE ACCOUNT VALUE PAID DURING EXPENSE
RETURN PORTFOLIO JANUARY 1, 2005 JUNE 30, 2005 PERIOD* RATIO*
- ---------------- --------------- ------------- ----------- ----------
CLASS A
Actual $1,000 $1,008.18 $3.59 0.72%
Hypothetical
(5% return
before expenses) $1,000 $1,021.22 $3.61 0.72%
CLASS B
Actual $1,000 $1,007.25 $4.83 0.97%
Hypothetical
(5% return
before expenses) $1,000 $1,019.98 $4.86 0.97%
* Expenses are equal to each classes' annualized expense ratios, multiplied by
the average account value over the period, multiplied by the number of days in
the most recent fiscal half-year/365 (to reflect the one-half year period).
1
TOTAL RETURN PORTFOLIO
TEN LARGEST HOLDINGS
June 30, 2005 (unaudited)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
PERCENT OF
COMPANY U.S. $ VALUE NET ASSETS
- -------------------------------------------------------------------------------
U.S. Treasury Notes $ 48,004,214 20.9%
U.S. Treasury Bonds 6,992,689 3.0
General Electric Co. 6,344,415 2.8
Federal National Mortgage Assoc.
(Bonds & Common Stock) 5,673,638 2.5
American International Group, Inc. 5,449,780 2.4
Microsoft Corp. 5,382,828 2.3
Citigroup, Inc. 5,122,284 2.2
WellPoint, Inc. 4,401,248 1.9
Time Warner, Inc.
(Bonds & Common Stock) 4,282,884 1.9
Altria Group, Inc. 3,924,862 1.7
------------ ----
$ 95,578,842 41.6%
SECTOR DIVERSIFICATION
June 30, 2005 (unaudited)
PERCENT OF
SECTOR U.S. $ VALUE NET ASSETS
- -------------------------------------------------------------------------------
U.S. Government & Government Sponsored
Agency Obligations $ 57,382,621 25.0%
Finance 44,464,670 19.3
Consumer Services 18,850,985 8.2
Energy 18,716,984 8.1
Utilities 15,442,127 6.7
Technology 14,617,184 6.4
Consumer Staples 14,610,782 6.4
Healthcare 12,651,996 5.5
Capital Goods 11,002,013 4.8
Basic Industry 5,313,401 2.3
Transportation 4,996,782 2.2
Commercial Mortgage Backed Securities 2,905,721 1.3
Industrials 2,810,049 1.2
Consumer Manufacturing 2,633,915 1.1
Sovereign Debt Obligations 964,642 0.4
Multi-Industry Companies 954,360 0.4
Municipal Obligation 439,800 0.2
Miscellaneous/Conglomerate 378,438 0.2
Aerospace & Defense 202,980 0.1
------------ -----
Total Investments 229,339,450 99.8
Cash and receivables, net of liabilities 477,188 0.2
------------ -----
Net Assets $229,816,638 100.0%
Please Note: The sector classifications presented herein are based on the
sector categorization methodology of the Adviser.
2
TOTAL RETURN PORTFOLIO
PORTFOLIO OF INVESTMENTS
June 30, 2005 (unaudited)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
COMMON STOCKS-59.3%
FINANCE-14.0%
BANKING-MONEY CENTER-2.4%
The Goldman Sachs Group, Inc. 9,900 $ 1,009,998
JPMorgan Chase & Co. 104,220 3,681,050
Wachovia Corp. 16,300 808,480
------------
5,499,528
BANKING-REGIONAL-1.6%
Bank of America Corp. 59,000 2,690,990
North Folk Bancorporation, Inc. 34,100 957,869
------------
3,648,859
BROKERAGE & MONEY MANAGEMENT-1.3%
Merrill Lynch & Co., Inc. 35,600 1,958,356
Morgan Stanley 18,900 991,683
------------
2,950,039
INSURANCE-5.1%
ACE Ltd. (Cayman Islands) 61,300 2,749,305
AFLAC, Inc. 27,500 1,190,200
American International Group, Inc. 93,800 5,449,779
Axis Capital Holdings Ltd.
(Bermuda) 32,500 919,750
MetLife, Inc. 33,100 1,487,514
------------
11,796,548
MORTGAGE BANKING-1.4%
Fannie Mae 56,300 3,287,920
MISCELLANEOUS-2.2%
Citigroup, Inc. 110,800 5,122,284
------------
32,305,178
ENERGY-7.5%
DOMESTIC PRODUCERS-0.9%
Noble Energy, Inc. 26,400 1,997,160
INTERNATIONAL-2.4%
BP p.l.c. (ADR)
(United Kingdom) 41,900 2,613,722
Exxon Mobil Corp. 51,800 2,976,946
------------
5,590,668
OIL SERVICE-2.6%
Baker Hughes, Inc. 31,300 1,601,308
EnCana Corp. (Canada) 33,200 1,314,388
Nabors Industries Ltd.
(Bermuda)(a) 25,300 1,533,686
Schlumberger Ltd. 18,500 1,404,890
------------
5,854,272
MISCELLANEOUS-1.6%
ConocoPhillips 64,800 3,725,352
------------
17,167,452
CONSUMER SERVICES-7.2%
BROADCASTING & CABLE-4.6%
Clear Channel Communications, Inc. 20,600 637,158
Comcast Corp. Cl.A(a) 24,150 741,405
Comcast Corp. Special Cl.A(a) 21,200 634,940
News Corp. Cl.A 132,500 2,143,850
Time Warner, Inc.(a) 197,000 3,291,870
Viacom, Inc. Cl.B 76,500 2,449,530
Westwood One, Inc. 32,200 657,846
------------
10,556,599
ENTERTAINMENT & LEISURE-0.8%
Carnival Corp. (Panama) 17,200 938,260
Harley-Davidson, Inc. 16,500 818,400
------------
1,756,660
RETAIL-GENERAL MERCHANDISE-1.8%
Lowe's Cos., Inc. 17,300 1,007,206
The Home Depot, Inc. 83,600 3,252,040
------------
4,259,246
------------
16,572,505
CONSUMER STAPLES-5.8%
BEVERAGES-0.3%
PepsiCo, Inc. 12,800 690,304
COSMETICS-1.5%
Avon Products, Inc. 88,080 3,333,828
HOUSEHOLD PRODUCTS-1.7%
Colgate-Palmolive Co. 27,100 1,352,561
The Procter & Gamble Co. 48,700 2,568,925
------------
3,921,486
TOBACCO-1.7%
Altria Group, Inc. 60,700 3,924,862
MISCELLANEOUS-0.6%
Fortune Brands, Inc. 15,400 1,367,520
------------
13,238,000
HEALTHCARE-5.5%
BIOTECHNOLOGY-0.3%
Applera Corp.-Applied
Biosystems Group 33,300 655,011
3
TOTAL RETURN PORTFOLIO
PORTFOLIO OF INVESTMENTS
(continued)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
DRUGS-0.9%
Lilly Eli & Co. 18,700 $ 1,041,777
Pfizer, Inc. 33,900 934,962
------------
1,976,739
MEDICAL PRODUCTS-1.0%
Beckman Coulter, Inc. 6,000 381,420
Boston Scientific Corp.(a) 76,100 2,054,700
------------
2,436,120
MEDICAL SERVICES-3.3%
Caremark Rx, Inc.(a) 15,200 676,704
Health Management Associates, Inc. 31,400 822,052
UnitedHealth Group, Inc. 32,300 1,684,122
WellPoint, Inc.(a) 63,200 4,401,248
------------
7,584,126
------------
12,651,996
TECHNOLOGY-5.2%
COMMUNICATION EQUIPMENT-0.4%
QUALCOMM, Inc. 31,000 1,023,310
COMPUTER HARDWARE/ STORAGE-0.3%
EMC Corp.(a) 50,000 685,500
COMPUTER SERVICES-0.5%
Fiserv, Inc.(a) 24,000 1,030,800
SEMI-CONDUCTOR COMPONENTS-0.4%
Maxim Integrated Products, Inc. 8,200 313,322
Texas Instruments, Inc. 24,200 679,294
------------
992,616
SOFTWARE-3.6%
Microsoft Corp. 216,700 5,382,828
Oracle Corp.(a) 116,300 1,535,160
Symantec Corp.(a) 62,500 1,358,750
------------
8,276,738
------------
12,008,964
CAPITAL GOODS-4.8%
ELECTRICAL EQUIPMENT-1.0%
Emerson Electric Co. 17,300 1,083,499
Johnson Controls, Inc. 21,800 1,227,994
------------
2,311,493
MACHINERY-0.3%
Ingersoll-Rand Co. Cl.A
(Bermuda) 8,700 620,745
MISCELLANEOUS-3.5%
General Electric Co. 183,100 6,344,415
United Technologies Corp. 33,600 1,725,360
------------
8,069,775
------------
11,002,013
UTILITIES-4.3%
ELECTRIC & GAS UTILITY-1.6%
Entergy Corp. 21,000 1,586,550
Exelon Corp. 24,700 1,267,851
PPL Corp. 14,800 878,824
------------
3,733,225
TELEPHONE UTILITY-2.7%
BellSouth Corp. 39,100 1,038,887
SBC Communications, Inc. 104,600 2,484,250
Sprint Corp. (FON Group) 55,500 1,392,495
Verizon Communications, Inc. 33,200 1,147,060
------------
6,062,692
------------
9,795,917
TRANSPORTATION-2.0%
AIR FREIGHT-0.6%
United Parcel Service, Inc. 19,700 1,362,452
RAILROAD-1.4%
Burlington Northern Santa Fe
Corp. 13,500 635,580
Union Pacific Corp. 40,400 2,617,920
------------
3,253,500
------------
4,615,952
BASIC INDUSTRY-1.8%
CHEMICALS-1.6%
Air Products and Chemicals, Inc. 40,200 2,424,060
E.I. du Pont de Nemours and Co. 18,900 812,889
Rohm & Haas Corp. 5,700 264,138
------------
3,501,087
MINING & METALS-0.2%
Alcoa, Inc. 21,000 548,730
------------
4,049,817
CONSUMER MANUFACTURING-0.8%
BUILDING & RELATED-0.8%
American Standard Cos., Inc. 44,400 1,861,248
MULTI-INDUSTRY COMPANIES-0.4%
3M Co. 13,200 954,360
Total Common Stocks
(cost $113,396,310) 136,223,402
4
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
PRINCIPAL
AMOUNT
COMPANY (000) U.S. $ VALUE
- -------------------------------------------------------------------------------
U.S. GOVERNMENT & GOVERNMENT
SPONSORED AGENCY OBLIGATIONS-25.0%
Federal National Mortgage Assoc.
6.625%, 10/15/07 $ 2,250 $ 2,385,718
U.S. Treasury Bonds
5.375%, 2/15/31 4,260 5,026,800
6.875%, 8/15/25 250 336,524
8.125%, 8/15/21 35 50,810
11.25%, 2/15/15 1,000 1,578,555
U.S. Treasury Notes
2.00%, 8/31/05-7/15/14 12,946 12,926,634
3.00%, 11/15/07-2/15/09 2,680 2,630,463
3.125%, 4/15/09 950 930,963
3.625%, 1/15/08 (TIPS) 909 961,900
3.625%, 5/15/13 2,370 2,339,820
3.875%, 5/15/10 350 351,996
4.00%, 11/15/12-2/15/14 7,695 7,776,126
4.125%, 5/15/15 120 121,753
4.25%, 8/15/13 1,085 1,112,125
4.625%, 5/15/06 7,125 7,191,797
5.00%, 2/15/11 535 568,417
5.625%, 5/15/08 2,165 2,279,169
5.75%, 8/15/10 965 1,054,677
6.00%, 8/15/09 30 32,596
6.125%, 8/15/07 100 105,023
6.25%, 2/15/07 4,600 4,791,907
6.875%, 5/15/06 2,750 2,828,848
------------
Total U.S. Government & Government
Sponsored Agency Obligations
(cost $56,199,222) 57,382,621
------------
CORPORATE DEBT OBLIGATIONS-13.3%
AEROSPACE/DEFENSE-0.1%
Raytheon Co.
4.85%, 1/15/11 200 202,980
------------
AUTOMOTIVE-0.7%
Ford Motor Credit Co.
4.95%, 1/15/08 750 715,440
7.00%, 10/01/13 200 191,896
7.375%, 2/01/11 650 633,168
7.875%, 6/15/10 100 98,820
------------
1,639,324
BANKING-2.1%
Abbey National Capital Trust I Plc
8.963%, 12/29/49(b) 291 424,419
ABN AMRO NA Holdings
6.523%, 12/29/49(b)(c) 250 275,515
Barclays Bank Plc
(United Kingdom)
8.55%, 9/29/49(b)(c) 50 60,154
Chuo Mitsui Trust & Banking
(Japan)
5.506%, 12/15/49(b)(c) 300 294,728
Development Bank of Singapore
7.125%, 5/15/11(c) 500 566,565
Dresdner Funding Trust I
8.151%, 6/30/31(c) 150 191,276
Fuji JGB Investment pfd. Mizuho
9.87%, 6/30/08(b)(c) 500 566,440
HBOS Plc (United Kingdom)
5.375%, 11/29/49(b)(c) 250 257,802
HSBC Bank USA
5.875%, 11/01/34 560 610,250
Northern Rock Plc
(United Kingdom)
5.60%, 4/30/49(b)(c) 300 311,333
Sanwa Bank Ltd.
7.40%, 6/15/11 200 226,428
SB Treasury Company LLC
9.40%, 12/29/49(b)(c) 417 467,410
UBS Preferred Funding Trust II
7.247%, 6/26/49(b) 250 283,768
UFJ Finance Aruba AEC
6.75%, 7/15/13 200 223,040
------------
4,759,128
BROADCASTING/MEDIA-0.7%
News America Holdings
8.25%, 10/17/96 60 75,291
9.25%, 2/01/13 100 126,388
News America, Inc.
5.30%, 12/15/14 100 102,601
Time Warner, Inc.
6.875%, 5/01/12 425 479,579
8.375%, 3/15/23 400 511,435
WPP Finance (UK) Corp.
5.875%, 6/15/14 250 264,316
------------
1,559,610
BUILDING/REAL ESTATE-0.2%
CRH America, Inc.
6.95%, 3/15/12 250 282,177
EOP Operating LP
7.875%, 7/15/31 200 251,887
8.375%, 3/15/06 35 36,035
------------
570,099
CABLE-0.3%
British Sky Broadcasting Plc
(United Kingdom)
8.20%, 7/15/09 100 113,199
5
TOTAL RETURN PORTFOLIO
PORTFOLIO OF INVESTMENTS
(continued)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
PRINCIPAL
AMOUNT
COMPANY (000) U.S. $ VALUE
- -------------------------------------------------------------------------------
Continental Cablevision, Inc.
9.00%, 9/01/08 $ 200 $ 226,675
Cox Communications, Inc.
4.625%, 1/15/10 380 378,997
------------
718,871
CHEMICALS-0.2%
Eastman Chemical
7.25%, 1/15/24 175 210,527
Praxair, Inc.
6.50%, 3/01/08 200 210,429
------------
420,956
COMMUNICATIONS-0.4%
British Telecommunications
Plc (United Kingdom)
8.875%, 12/15/30 175 247,039
GTE Northwest, Inc.
Series D
5.55%, 10/15/08 200 205,443
Sprint Capital Corp.
6.875%, 11/15/28 450 516,548
------------
969,030
COMMUNICATIONS-MOBILE-0.8%
America Movil SA de CV
(Mexico)
5.50%, 3/01/14 125 125,000
AT&T Wireless Services, Inc.
8.75%, 3/01/31 325 455,532
SBC Communications
6.45%, 6/15/34 525 590,268
Telecom Italia
4.00%, 11/15/08 250 246,225
TELUS Corp. (Canada)
7.50%, 6/01/07 200 211,580
8.00%, 6/01/11 100 116,950
------------
1,745,555
CONGLOMERATE/MISCELLANEOUS-0.2%
Cendant Corp.
6.25%, 1/15/08 250 260,779
Hutchison Whampoa
International Ltd.
(Cayman Islands)
7.45%, 11/24/33(c) 100 117,659
------------
378,438
CONTAINERS-0.1%
Packaging Corp. of America
4.375%, 8/01/08 200 197,683
ENERGY-0.3%
Devon Financing Corp.
7.875%, 9/30/31 300 390,211
Enterprise Products Operating LP
Series B
5.60%, 10/15/14 150 154,358
XTO Energy, Inc.
7.50%, 4/15/12 100 115,014
------------
659,583
FINANCIAL-2.0%
Capital One Bank
6.50%, 6/13/13 400 440,094
Countrywide Home Loan, Inc.
4.25%, 12/19/07 250 249,761
General Electric Capital Corp.
5.00%, 6/15/07 500 508,555
5.875%, 2/15/12 500 540,669
Goldman Sachs Capital I
6.345%, 2/15/34 250 270,877
Goldman Sachs Group, Inc.
6.60%, 1/15/12 500 555,706
6.65%, 5/15/09 200 216,569
Household Finance Corp.
5.75%, 1/30/07 200 205,139
6.50%, 1/24/06 75 76,084
7.875%, 3/01/07 150 158,832
iStar Financial, Inc.
5.70%, 3/01/14 200 202,568
6.00%, 12/15/10 200 208,029
Lehman Brothers Holdings, Inc.
7.875%, 8/15/10 150 174,237
Merrill Lynch & Co., Inc.
6.00%, 2/17/09 500 527,456
Rabobank Capital Fund II
5.26%, 12/29/49(b)(c) 230 236,612
The Hartford Financial Services, Inc.
6.375%, 11/01/08 125 132,459
------------
4,703,647
FOOD/BEVERAGE-0.3%
Kellogg Co. Cl.B
6.60%, 4/01/11 300 332,470
Kraft Foods, Inc.
5.25%, 10/01/13 300 312,178
------------
644,648
INDUSTRIAL-0.5%
CRH America, Inc.
6.40%, 10/15/33 300 342,253
Imperial Tobacco (Netherlands)
7.125%, 4/01/09 170 184,807
Inco Ltd. (Canada)
7.75%, 5/15/12 200 232,925
Tyco International Group, SA
(Luxembourg)
6.375%, 10/15/11 200 219,661
Waste Management, Inc.
6.375%, 11/15/12 175 191,078
------------
1,170,724
6
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
PRINCIPAL
AMOUNT
COMPANY (000) U.S. $ VALUE
- -------------------------------------------------------------------------------
INSURANCE-0.7%
American Reinsurance
7.45%, 12/15/26 $ 140 $ 163,009
Loews Corp.
6.75%, 12/15/06 100 103,457
Mangrove Bay Pass-Through Trust
6.102%, 7/15/33(b)(c) 400 411,012
North Front Pass Through Trust
5.81%, 12/15/24(b)(c) 500 515,212
Royal Bank of Scotland Group Plc
(United Kingdom)
7.648%, 8/29/49(b) 250 317,919
Zurich Capital Trust
8.376%, 6/01/37(c) 200 221,179
------------
1,731,788
INSURANCE CARRIERS-0.4%
Liberty Mutual Group
5.75%, 3/15/14(c) 350 352,345
Royal Sun & Alliance Insurance
(United Kingdom)
8.95%, 10/15/29 442 571,951
------------
924,296
METALS/MINING-0.1%
Ispat Inland ULC (Canada)
9.75%, 4/01/14 100 116,500
MUNICIPAL OBLIGATION-0.2%
Dallas-Fort Worth Texas International
Airport Facility
7.07%, 11/01/24 400 439,800
NON-AIR TRANSPORTATION-0.2%
CSX Corp.
5.50%, 8/01/13 100 104,838
6.75%, 3/15/11 250 275,992
------------
380,830
OIL SERVICES-0.1%
Valero Energy Corp.
4.75%, 6/15/13 300 297,025
PAPER/PACKAGING-0.1%
Domtar, Inc. (Canada)
7.875%, 10/15/11 250 264,357
PETROLEUM PRODUCTS-0.2%
Amerada Hess Corp.
7.30%, 8/15/31 350 422,299
PUBLIC UTILITIES-ELECTRIC & GAS-1.5%
American Electric Power Co., Inc.
Series C
5.375%, 3/15/10 250 259,442
CenterPoint Energy Resources Corp.
Series B
7.875%, 4/01/13 450 534,524
Consumers Energy Co.
Series B
5.375%, 4/15/13 150 155,589
Dominion Resources Capital Trust III
8.40%, 1/15/31 200 256,984
FirstEnergy Corp.
Series C
7.375%, 11/15/31 500 611,188
NiSource Finance Corp.
7.875%, 11/15/10 250 287,268
Progress Energy, Inc.
5.85%, 10/30/08 350 364,185
Texas East Transmission LP
7.30%, 12/01/10 350 395,859
TXU Australia LP
6.15%, 11/15/13(c) 250 273,103
Xcel Energy, Inc.
7.00%, 12/01/10 175 194,686
Yorkshire Power
Series B
6.496%, 2/25/08 200 208,457
------------
3,541,285
PUBLIC UTILITIES-TELEPHONE-0.3%
Telefonos de Mexico, SA
4.75%, 1/27/10(c) 250 249,676
5.50%, 1/27/15(c) 175 173,711
Verizon Florida, Inc.
Series F
6.125%, 1/15/13 300 321,645
------------
745,032
SERVICE-0.1%
Republic Services, Inc.
6.086%, 3/15/35(c) 250 264,088
SUPERMARKET/DRUG-0.3%
Safeway, Inc.
4.95%, 8/16/10 400 402,288
5.80%, 8/15/12 310 325,847
------------
728,135
7
TOTAL RETURN PORTFOLIO
PORTFOLIO OF INVESTMENTS
(continued)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
SHARES OR
PRINCIPAL
AMOUNT
COMPANY (000) U.S. $ VALUE
- -------------------------------------------------------------------------------
TECHNOLOGY-0.2%
Motorola, Inc.
7.625%, 11/15/10 $ 400 $ 457,690
Total Corporate Debt Obligations
(cost $29,036,875) 30,653,401
COMMERCIAL MORTGAGE BACKED SECURITIES-1.3%
CS First Boston Mortgage Securities Corp.
Series 2004-C5 Cl.A2
4.183%, 11/15/37 2,000 1,989,834
Greenwich Capital Commercial Funding Corp.
Series 2005-GG3 Cl.A4
4.799%, 8/10/42 (b) 900 915,887
Total Commercial Mortgage Backed Securities
(cost $2,832,844) 2,905,721
PREFERRED STOCKS-0.4%
BANKING-0.1%
Royal Bank of Scotland
Group Plc 10,000 243,200
COMMUNICATIONS-0.1%
Centaur Funding Corp.
(Cayman Islands)(c) 200 272,438
PUBLIC UTILITIES-ELECTRIC & GAS-0.2%
DTE Energy Trust I 20,000 523,400
Total Preferred Stocks
(cost $982,616) 1,039,038
SOVEREIGN DEBT OBLIGATIONS-0.4%
Korea Development Bank
(South Korea)
5.75%, 9/10/13 200 213,192
United Mexican States
(Mexico)
6.375%, 1/16/13 700 751,450
Total Sovereign Debt Obligations
(cost $899,732) 964,642
YANKEE BONDS-0.1%
Petronas Capital Ltd.
7.00%, 5/22/12(c)
(cost $149,814) 150 170,625
TOTAL INVESTMENTS-99.8%
(cost $203,497,413) 229,339,450
Other assets less liabilities-0.2% 477,188
------------
NET ASSETS-100% $229,816,638
(a) Non-income producing security.
(b) Variable rate coupon, rate shown as of June 30, 2005.
(c) Securities are exempt from registration under Rule 144A of the Securities
Act of 1933. These securities are considered liquid and may be resold in
transactions exempt from registration, normally to qualified institutional
buyers. At June 30, 2005, the aggregate market value of these securities
amounted to $6,248,883 or 2.7% of net assets.
Glossary of Terms:
ADR - American Depositary Receipt
pfd - Preferred Stock
See Notes to Financial Statements.
8
TOTAL RETURN PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2005 (unaudited)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $203,497,413) $ 229,339,450
Cash 956,502
Dividends and interest receivable 1,207,678
Receivable for capital stock sold 100,922
Total assets 231,604,552
LIABILITIES
Payable for investment securities purchased 1,444,105
Advisory fee payable 104,879
Payable for capital stock redeemed 72,100
Distribution fee payable 9,517
Administrative fee payable 1,215
Transfer agent fee payable 55
Accrued expenses 156,043
Total liabilities 1,787,914
NET ASSETS $ 229,816,638
COMPOSITION OF NET ASSETS
Capital stock, at par $ 12,359
Additional paid-in capital 207,782,094
Undistributed net investment income 2,461,625
Accumulated net realized loss on investment transactions (6,281,477)
Net unrealized appreciation of investments 25,842,037
$ 229,816,638
CLASS A SHARES
Net assets $ 183,723,949
Shares of capital stock outstanding 9,870,125
Net asset value per share $ 18.61
CLASS B SHARES
Net assets $ 46,092,689
Shares of capital stock outstanding 2,489,225
Net asset value per share $ 18.52
See Notes to Financial Statements.
9
TOTAL RETURN PORTFOLIO
STATEMENT OF OPERATIONS
Six Months Ended June 30, 2005 (unaudited)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
INVESTMENT INCOME
Interest $ 2,125,428
Dividends (net of foreign taxes
withheld of $623) 1,259,236
Total investment income 3,384,664
EXPENSES
Advisory fee 638,414
Distribution fee--Class B 56,948
Custodian 90,968
Administrative 36,250
Printing 30,633
Audit 20,730
Legal 4,755
Directors' fees 496
Transfer agency 403
Miscellaneous 15,209
Total expenses 894,806
Net investment income 2,489,858
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENT TRANSACTIONS
Net realized gain on investment transactions 9,110,045
Net change in unrealized appreciation/
depreciation of investments (9,750,510)
Net loss on investment transactions (640,465)
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 1,849,393
See Notes to Financial Statements.
10
TOTAL RETURN PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 2005 DECEMBER 31,
(UNAUDITED) 2004
---------------- -------------
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment income $ 2,489,858 $ 5,805,073
Net realized gain on investment transactions 9,110,045 4,604,488
Net change in unrealized appreciation/
depreciation of investments (9,750,510) 9,537,757
Net increase in net assets from operations 1,849,393 19,947,318
DIVIDENDS TO SHAREHOLDERS FROM
Net investment income
Class A (4,723,307) (4,209,896)
Class B (1,088,094) (804,109)
CAPITAL STOCK TRANSACTIONS
Net increase (decrease) (4,867,950) 2,962,939
Total increase (decrease) (8,829,958) 17,896,252
NET ASSETS
Beginning of period 238,646,596 220,750,344
End of period (including undistributed
net investment income
of $2,461,625 and $5,783,168, respectively) $ 229,816,638 $ 238,646,596
See Notes to Financial Statements.
11
TOTAL RETURN PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
June 30, 2005 (unaudited)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
NOTE A: SIGNIFICANT ACCOUNTING POLICIES
The AllianceBernstein Total Return Portfolio (the "Portfolio") is a series of
AllianceBernstein Variable Products Series Fund, Inc. (the "Fund"). The
Portfolio's investment objective is to seek to achieve a high return through a
combination of current income and capital appreciation. The Fund was
incorporated in the State of Maryland on November 17, 1987, as an open-end
series investment company. The Fund offers twenty-three separately managed
pools of assets which have differing investment objectives and policies. The
Portfolio 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.
The Portfolio 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
the Portfolio's net asset value per share.
The financial statements have been prepared in conformity with U.S. generally
accepted accounting principles, which require management to make certain
estimates and assumptions that affect the reported amounts of assets and
liabilities in the financial statements and amounts of income and expenses
during the reporting period. Actual results could differ from those estimates.
Additional information about some of the items discussed in these Notes to
Financial Statements is contained in the Fund's Statement of Additional
Information, which is available upon request. The following is a summary of
significant accounting policies followed by the Portfolio.
1. SECURITY VALUATION
Portfolio securities are valued at their current market value determined on the
basis of market quotations or, if market quotations are not readily available
or are deemed unreliable, at "fair value" as determined in accordance with
procedures established by and under the general supervision of the Fund's Board
of Directors.
In general, the market value of securities which are readily available and
deemed reliable are determined as follows. Securities listed on a national
securities exchange or on a foreign securities exchange are valued at the last
sale price at the close of the exchange or foreign securities exchange. If
there has been no sale on such day, the securities are valued at the mean of
the closing bid and asked prices on such day. Securities listed on more than
one exchange are valued by reference to the principal exchange on which the
securities are traded; securities not listed on an exchange but traded on The
NASDAQ Stock Market, Inc. ("NASDAQ") are valued in accordance with the NASDAQ
Official Closing Price; listed put or call options are valued at the last sale
price. If there has been no sale on that day, such securities will be valued at
the closing bid prices on that day; open futures contracts and options thereon
are valued using the closing settlement price or, in the absence of such a
price, the most recent quoted bid price. If there are no quotations available
for the day of valuation, the last available closing settlement price is used;
securities traded in the over-the-counter market, ("OTC") (but excluding
securities traded on NASDAQ) are valued at the mean of the current bid and
asked prices as reported by the National Quotation Bureau or other comparable
sources; U.S. Government securities and other debt instruments having 60 days
or less remaining until maturity are valued at amortized cost if their original
maturity was 60 days or less; or by amortizing their fair value as of the 61st
day prior to maturity if their original term to maturity exceeded 60 days;
fixed-income securities, including mortgage backed and asset backed securities,
may be valued on the basis of prices provided by a pricing service or at a
price obtained from one or more of the major broker/dealers. In cases where
broker/dealer quotes are obtained, Alliance Capital Management, L.P. (the
"Adviser") may establish procedures whereby changes in market yields or spreads
are used to adjust, on a daily basis, a recently obtained quoted price on a
security; and OTC and other derivatives are valued on the basis of a quoted bid
price or spread from a major broker/dealer in such security.
Securities for which market quotations are not readily available (including
restricted securities) or are deemed unreliable are valued at fair value.
Factors considered in making this determination may include, but are not
limited to, information obtained by contacting the issuer, analysts, analysis
of the issuer's financial statements or other available documents. In addition,
the Fund may use fair value pricing for securities primarily traded in non-U.S.
markets because, most foreign markets close well before the Fund values its
securities at 4:00 p.m., Eastern Time. The earlier close of these foreign
markets gives rise to the possibility that significant events, including broad
market moves, may have occurred in the interim and may materially affect the
value of those securities. To account for this, the Fund may frequently value
many of its foreign equity securities using fair value prices based on third
party vendor modeling tools to the extent available.
12
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
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 prices of such currencies against the U.S.
dollar. Purchases and sales of portfolio securities are translated into U.S.
dollars at the rates of exchange prevailing when such securities were acquired
or sold. Income and expenses are translated into U.S. dollars at rates of
exchange prevailing when accrued.
Net realized gain or loss on foreign currency transactions represents foreign
exchange gains and losses from sales and maturities of foreign fixed income
investments, foreign currency exchange contracts, holding of foreign
currencies, currency gains or losses realized between the trade and settlement
dates on foreign investment transactions, and the difference between the
amounts of dividends, interest and foreign withholding taxes recorded on the
Portfolio's books and the U.S. dollar equivalent amounts actually received or
paid. Net unrealized 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 or depreciation of investments
and foreign currency denominated assets and liabilities.
3. TAXES
It is the Portfolio's policy to meet the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute all of its
investment company taxable income and net realized gains, if any, to
shareholders. Therefore, no provisions for federal income or excise taxes are
required. The Fund may be subject to taxes imposed by countries in which it
invests. Such taxes are generally based on income and/or capital gains earned
or repatriated. Taxes are accrued and applied to net investment income, net
realized gains and net unrealized appreciation/depreciation as such income
and/or gains are earned.
4. INVESTMENT INCOME AND INVESTMENT TRANSACTIONS
Dividend income is recorded on the ex-dividend date or as soon as the Portfolio
is informed of the dividend. Interest income is accrued daily. Investment
transactions are accounted for on the date securities are purchased or sold.
Investment gains and losses are determined on the identified cost basis. The
Portfolio amortizes premiums or accretes discounts as adjustments to interest
income.
5. INCOME AND EXPENSES
Expenses attributable to a single portfolio are charged to that portfolio.
Expenses of the Fund are charged to each portfolio in proportion to net assets.
All income earned and expenses incurred by a portfolio with multi-class shares
outstanding are borne on a pro-rata basis by each outstanding class of shares,
based on the proportionate interest in the portfolio represented by the net
assets of such class, except that the portfolio's Class B shares bear the
distribution fees.
6. DIVIDENDS AND DISTRIBUTIONS
The Portfolio declares and distributes dividends and distributions from net
investment income and net realized gains, respectively, if any, at least
annually. 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 U.S. generally accepted accounting principles. 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
Until September 6, 2004, under the terms of an investment advisory agreement,
the Portfolio paid the Adviser an advisory fee at an annual rate of .625% of
the Portfolio's average daily net assets. Effective September 7, 2004, the
terms of the investment advisory agreement were amended so that the advisory
fee was reduced to an annual rate of .55% of the first $2.5 billion, .45% of
the next $2.5 billion and .40% in excess of $5 billion, of the Portfolio's
average daily net assets. The fee is accrued daily and paid monthly.
Effective January 1, 2004 through September 6, 2004, in contemplation of the
final agreement with the Office of New York Attorney General ("NYAG"), the
Adviser began waiving a portion of its advisory fee so as to charge the
Portfolio at the reduced annual rate discussed above. For a more complete
discussion of the Adviser's settlement with the NYAG, please see "Legal
Proceedings" below.
13
TOTAL RETURN PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(continued)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
Pursuant to the advisory agreement, the Portfolio paid $36,250 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, 2005.
Brokerage commissions paid on investment transactions for the six months ended
June 30, 2005 amounted to $82,692, none of which was paid to Sanford C.
Bernstein & Co. LLC and Sanford C. Bernstein Limited, affiliates of the Adviser.
The Portfolio compensates Alliance Global Investor Services, Inc., a
wholly-owned subsidiary of the Adviser, under a Transfer Agency Agreement for
providing personnel and facilities to perform transfer agency services for the
Portfolio. Such compensation amounted to $403 for the six months ended June 30,
2005.
NOTE C: DISTRIBUTION PLAN
The Portfolio has adopted a Distribution Plan (the "Plan") for Class B shares
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the
Plan, the Portfolio pays distribution and servicing fees to AllianceBernstein
Investment Research and Management, Inc., (the "Distributor"), a wholly-owned
subsidiary of the Adviser at an annual rate of up to .50% of the 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 limits
payments under the Plan to .25% of the Portfolio's average daily net assets
attributable to Class B shares. The Plan provides that the Distributor will use
such payments in their entirety for distribution assistance and promotional
activities.
The Portfolio is not obligated under the Plan to pay any distribution and
servicing fees in excess of the amounts set forth above. The purpose of the
payments to the Distributor under the Plan is to compensate the Distributor for
its distribution services with respect to the sale of the Portfolio's Class B
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 Plan is
characterized by the staff of the Securities and Exchange Commission as being
of the "compensation" variety.
In the event that the Plan is terminated or not continued, no distribution and
servicing fees (other than current amounts accrued but not yet paid) would be
owed by the Portfolio to the Distributor.
The Plan also provides that the Adviser may use its own resources to finance
the distribution of the Portfolio's shares.
NOTE D: INVESTMENT TRANSACTIONS
Purchases and sales of investment securities (excluding short-term investments)
for the six months ended June 30, 2005, were as follows:
PURCHASES SALES
------------ ------------
Investment securities
(excluding U.S. government securities) $ 47,169,284 $ 48,073,840
U.S. government securities 11,270,284 14,537,478
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 $ 29,715,585
Gross unrealized depreciation (3,873,548)
Net unrealized appreciation $ 25,842,037
1. FORWARD EXCHANGE CURRENCY CONTRACTS
The Portfolio may enter into forward exchange currency contracts in order to
hedge its exposure to changes in foreign currency exchange rates on its 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 on a future date at a negotiated forward rate. The gain or loss
arising from the difference between the original contracts and the closing of
such contracts would be included in net realized gain or loss on foreign
currency transactions.
14
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
Fluctuations in the value of open forward exchange currency contracts are
recorded for financial reporting purposes as unrealized appreciation and
depreciation by the Portfolio.
The Portfolio's custodian will place and maintain cash not available for
investment or other liquid assets in a separate account of the Portfolio having
a value at least equal to the aggregate amount of the 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 the Portfolio has in that particular
currency contract.
2. OPTION TRANSACTIONS
For hedging and investment purposes, the Portfolio may purchase and write
(sell) put and call options on U.S. and foreign government securities and
foreign currencies that are traded on U.S. and foreign 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 written options which
expire unexercised are recorded by the Portfolio on the expiration date as
realized gains from options written. 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. If a
put option is exercised, the premium received reduces the cost basis of the
security or currency purchased by the Portfolio. 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.
NOTE E: SECURITIES LENDING
The Portfolio has entered into a securities lending agreement with UBS Warburg
LLC (the "Lending Agent"). Under the terms of the agreement, the Lending Agent,
on behalf of the Portfolio, administers the lending of portfolio securities to
certain broker-dealers. In return, the Portfolio receives fee income from the
lending transactions or it retains a portion of interest on the investment of
any cash received as collateral. The Portfolio also continues to receive
dividends or interest on the securities loaned. Unrealized gain or loss in the
value of the securities loaned that may occur during the term of the loan will
be reflected in the accounts of the Portfolio. All loans are continuously
secured by collateral exceeding the value of the securities loaned. All
collateral consists of either cash or U.S. Government securities. The Lending
Agent invests the cash collateral received in an eligible money market vehicle
in accordance with the investment restrictions of the Portfolio. The Lending
Agent will indemnify the Portfolio for any loss resulting from a borrower's
failure to return a loaned security when due. For the six months ended June 30,
2005, the Portfolio had no securities on loan.
15
TOTAL RETURN PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(continued)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
NOTE F: CAPITAL STOCK
There are 1,000,000,000 shares of $.001 par value capital stock authorized,
divided into two classes, designated Class A and Class B shares. Each class
consists of 500,000,000 authorized shares. Transactions in capital stock were
as follows:
SHARES AMOUNT
--------------------------- ------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
JUNE 30, 2005 DECEMBER 31, JUNE 30, 2005 DECEMBER 31,
(UNAUDITED) 2004 (UNAUDITED) 2004
------------ ------------ -------------- --------------
CLASS A
Shares sold 117,344 531,722 $ 2,211,869 $ 9,591,065
Shares issued
in reinvestment
of dividends 253,261 240,428 4,723,307 4,209,896
Shares redeemed (721,330) (1,661,415) (13,605,087) (29,948,111)
Net decrease (350,725) (889,265) $ (6,669,911) $ (16,147,150)
CLASS B
Shares sold 161,206 1,218,508 $ 3,016,697 $ 21,798,149
Shares issued
in reinvestment
of dividends 58,657 46,134 1,088,094 804,109
Shares redeemed (122,906) (196,051) (2,302,830) (3,492,169)
Net increase 96,957 1,068,591 $ 1,801,961 $ 19,110,089
NOTE G: RISKS INVOLVED IN INVESTING IN THE PORTFOLIO
Foreign Securities 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.
Indemnification Risk--In the ordinary course of business, the Portfolio enters
into contracts that contain a variety of indemnifications. The Portfolio's
maximum exposure under these arrangements is unknown. However, the Portfolio
has not had prior claims or losses pursuant to these indemnification provisions
and expects the risk of loss thereunder to be remote.
NOTE H: JOINT CREDIT FACILITY
A number of open-end mutual funds managed by the Adviser, including the
Portfolio, participate in a $500 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
Portfolio did not utilize the Facility during the six months ended June 30,
2005.
NOTE I: DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions to be paid for the year ending December 31,
2005 will be determined at the end of the current fiscal year. The tax
character of distributions paid during the fiscal years ended December 31, 2004
and December 31, 2003 were as follows:
2004 2003
----------- -----------
Distributions paid from:
Ordinary income $ 5,014,005 $ 4,983,170
Total taxable distributions 5,014,005 4,983,170
Total distributions paid $ 5,014,005 $ 4,983,170
16
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
As of December 31, 2004, the components of accumulated earnings/(deficit) on a
tax basis were as follows:
Undistributed ordinary income $ 5,783,168
Accumulated capital and other losses (14,904,349)(a)
Unrealized appreciation/(depreciation) 35,105,374(b)
Total accumulated earnings/(deficit) $ 25,984,193
(a) On December 31, 2004, the Portfolio had a net capital loss carryforward of
$14,904,349 of which $11,906,542 expires in the year 2010 and $2,997,807
expires in year 2011. To the extent future capital gains are offset by capital
loss carryforwards, such gains will not be distributed. During the current
fiscal year the Portfolio utilized capital loss carry forward of $4,383,881.
(b) The differences between book-basis and tax-basis unrealized
appreciation/(depreciation) is attributable primarily to the tax deferral of
losses on wash sales.
NOTE J: LEGAL PROCEEDINGS
As has been previously reported, the staff of the U.S. Securities and Exchange
Commission ("SEC") and the NYAG have been investigating practices in the mutual
fund industry identified as "market timing" and "late trading" of mutual fund
shares. Certain other regulatory authorities have also been conducting
investigations into these practices within the industry and have requested that
the Adviser provide information to them. The Adviser has been cooperating and
will continue to cooperate with all of these authorities.
On December 18, 2003, the Adviser confirmed that it had reached terms with the
SEC and the NYAG for the resolution of regulatory claims relating to the
practice of "market timing" mutual fund shares in some of the AllianceBernstein
Mutual Funds. The agreement with the SEC is reflected in an Order of the
Commission ("SEC Order"). The agreement with the NYAG is memorialized in an
Assurrance of Discontinuance dated September 1, 2004 ("NYAG Order"). Among the
key provisions of these agreements are the following:
(i) The Adviser agreed to establish a $250 million fund (the
"Reimbursement Fund") to compensate mutual fund shareholders for the adverse
effects of market timing attributable to market timing relationships described
in the SEC Order. According to the SEC Order, the Reimbursement Fund is to be
paid, in order of priority, to fund investors based on (i) their aliquot share
of losses suffered by the fund due to market timing, and (ii) a proportionate
share of advisory fees paid by such fund during the period of such market
timing;
(ii) The Adviser agreed to reduce the advisory fees it receives from
some of the AllianceBernstein long-term, open-end retail funds until December
31, 2008; and
(iii) The Adviser agreed to implement changes to its governance and
compliance procedures. Additionally, the SEC Order and the NYAG Order
contemplate that the Adviser's registered investment company clients, including
the Fund, will introduce governance and compliance changes.
In anticipation of final, definitive documentation of the NYAG Order and
effective January 1, 2004, the Adviser began waiving a portion of its advisory
fee. On September 7, 2004, the Fund's investment advisory agreement was amended
to reflect the reduced advisory fee. For more information on this waiver and
amendment to the Fund's investment advisory agreement, please see "Advisory Fee
and Other Transactions with Affiliates" above.
A special committee of the Adviser's Board of Directors, comprised of the
members of the Adviser's Audit Committee and the other independent member of
the Adviser's Board, is continuing to direct and oversee an internal
investigation and a comprehensive review of the facts and circumstances
relevant to the SEC's and the NYAG's investigations.
In addition, the Independent Directors of the Fund ("the Independent
Directors") have initiated an investigation of the above-mentioned matters with
the advice of an independent economic consultant and independent counsel. The
Independent Directors have formed a special committee to supervise the
investigation.
On October 2, 2003, a putative class action complaint entitled HINDO ET AL. V.
ALLIANCEBERNSTEIN GROWTH & INCOME FUND ET AL. (the "Hindo Complaint") was filed
against the Adviser; Alliance Capital Management Holding L.P.; Alliance Capital
Management Corporation; AXA Financial, Inc.; certain of the AllianceBernstein
Mutual Funds, including the Fund; Gerald Malone; Charles Schaffran
(collectively, the "Alliance Capital defendants"); and certain other defendants
not affiliated with the Adviser. The Hindo Complaint was filed in the United
States District Court for the Southern
17
TOTAL RETURN PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(continued)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
District of New York by alleged shareholders of two of the AllianceBernstein
Mutual Funds. The Hindo Complaint alleges that certain of the Alliance Capital
defendants failed to disclose that they improperly allowed certain hedge funds
and other unidentified parties to engage in late trading and market timing of
AllianceBernstein Fund securities, violating Sections 11 and 15 of the
Securities Act, Sections 10(b) and 20(a) of the Exchange Act, and Sections 206
and 215 of the Advisers Act. Plaintiffs seek an unspecified amount of
compensatory damages and rescission of their contracts with the Adviser,
including recovery of all fees paid to the Adviser pursuant to such contracts.
Since October 2, 2003, numerous additional lawsuits making factual allegations
similar to those in the Hindo Complaint were filed against the Adviser and
certain other defendants, some of which name the Fund as a defendant. All of
these lawsuits seek an unspecified amount of damages. The lawsuits are now
pending in the United States District Court for the District of Maryland
pursuant to a ruling by the Judicial Panel on Multidistrict Litigation
transferring and centralizing all of the mutual fund cases involving market and
late trading in the District of Maryland.
As a result of the matters discussed above, investors in the AllianceBernstein
Mutual Funds may choose to redeem their investments. This may require the
AllianceBernstein Mutual Funds to sell investments held by those funds to
provide for sufficient liquidity and could also have an adverse effect on the
investment performance of the AllianceBernstein Mutual Funds.
The Adviser and approximately twelve other investment management firms were
publicly mentioned in connection with the settlement by the SEC of charges that
an unaffiliated broker/dealer violated federal securities laws relating to its
receipt of compensation for selling specific mutual funds and the disclosure of
such compensation. The SEC indicated publicly that, among other things, it was
considering enforcement action in connection with mutual funds' disclosure of
such arrangements and in connection with the practice of considering mutual
fund sales in the direction of brokerage commissions from fund portfolio
transactions. The SEC issued subpoenas to the Adviser, and the NASD issued
requests for information in connection with this matter and the Adviser
provided documents and other information to the SEC and NASD and cooperated
fully with the investigations. On June 8, 2005 the NASD announced that it had
reached a settlement with the Distributor in connection with this matter.
Management of the Adviser expects that the settlement has resolved both
regulatory inquiries described above.
On June 22, 2004, a purported class action complaint entitled AUCOIN, ET AL. V.
ALLIANCE CAPITAL MANAGEMENT L.P., ET AL. ("Aucoin Complaint") was filed against
the Adviser, Alliance Capital Management Holding L.P., Alliance Capital
Management Corporation, AXA Financial, Inc., AllianceBernstein Investment
Research & Management, Inc., certain current and former directors of the
AllianceBernstein Mutual Funds, and unnamed Doe defendants. The Aucoin
Complaint names certain of the AllianceBernstein mutual funds as nominal
defendants. The Aucoin Complaint was filed in the United States District Court
for the Southern District of New York by an alleged shareholder of an
AllianceBernstein mutual fund. The Aucoin Complaint alleges, among other
things, (i) that certain of the defendants improperly authorized the payment of
excessive commissions and other fees from fund assets to broker-dealers in
exchange for preferential marketing services, (ii) that certain of the
defendants misrepresented and omitted from registration statements and other
reports material facts concerning such payments, and (iii) that certain
defendants caused such conduct as control persons of other defendants. The
Aucoin Complaint asserts claims for violation of Sections 34(b), 36(b) and
48(a) of the Investment Company Act, Sections 206 and 215 of the Advisers Act,
breach of common law fiduciary duties, and aiding and abetting breaches of
common law fiduciary duties. Plaintiffs seek an unspecified amount of
compensatory damages and punitive damages, rescission of their contracts with
the Adviser, including recovery of all fees paid to the Adviser pursuant to
such contracts, an accounting of all fund-related fees, commissions and soft
dollar payments, and restitution of all unlawfully or discriminatorily obtained
fees and expenses.
Since June 22, 2004, numerous additional lawsuits making factual allegations
substantially similar to those in the Aucoin Complaint were filed against the
Adviser and certain other defendants, and others may be filed.
It is possible that these matters and/or other developments resulting from
these matters could result in increased redemptions of the Fund's shares or
other adverse consequences to the Fund. However, the Adviser believes that
these matters are not likely to have a material adverse effect on its ability
to perform advisory services relating to the Fund.
18
TOTAL RETURN PORTFOLIO
FINANCIAL HIGHLIGHTS
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
CLASS A
----------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 2005 --------------------------------------------------------------
(UNAUDITED) 2004 2003 2002 2001(a) 2000
----------- ----------- ----------- ----------- ----------- -----------
Net asset value, beginning of period $18.94 $17.76 $15.30 $17.65 $18.01 $17.49
INCOME FROM INVESTMENT OPERATIONS
Net investment income (b) .21 .46(c) .42 .45 .44 .48
Net realized and unrealized gain (loss)
on investment transactions (.05) 1.12 2.47 (2.29) (.01) 1.63
Net increase (decrease) in net asset
value from operations .16 1.58 2.89 (1.84) .43 2.11
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.49) (.40) (.43) (.32) (.28) (.39)
Distributions from net realized gain
on investment transactions -0- -0- -0- (.19) (.42) (1.20)
Distributions in excess of net realized
gain on investment transactions -0- -0- -0- -0- (.09) -0-
Total dividends and distributions (.49) (.40) (.43) (.51) (.79) (1.59)
Net asset value, end of period $18.61 $18.94 $17.76 $15.30 $17.65 $18.01
TOTAL RETURN
Total investment return based on
net asset value (d) .82% 9.07% 19.05% (10.58)% 2.27% 12.52%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $183,724 $193,600 $197,334 $171,670 $183,098 $90,736
Ratio to average net assets of:
Expenses, net of waivers and
reimbursements .72%(e) .71% .79% .79% .78% .87%
Expenses, before waivers and
reimbursements .72%(e) .76% .79% .79% .78% .87%
Net investment income 2.19%(e) 2.57%(c) 2.60% 2.76% 2.50% 2.77%
Portfolio turnover rate 25% 60% 81% 57% 71% 102%
See footnote summary on page 20.
19
TOTAL RETURN PORTFOLIO
FINANCIAL HIGHLIGHTS
(continued)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
CLASS B
----------------------------------------------------------------
SIX MONTHS OCTOBER 26,
ENDED YEAR ENDED DECEMBER 31, 2001(f) TO
JUNE 30, 2005 ----------------------------------- DECEMBER 31,
(UNAUDITED) 2004 2003 2002 2001(a)
----------- ----------- ----------- ----------- -----------
Net asset value, beginning of period $18.83 $17.69 $15.27 $17.65 $17.56
INCOME FROM INVESTMENT OPERATIONS
Net investment income (b) .18 .43(c) .36 .39 .06
Net realized and unrealized gain (loss)
on investment transactions (.04) 1.10 2.48 (2.27) .03
Net increase (decrease) in net asset value
from operations .14 1.53 2.84 (1.88) .09
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.45) (.39) (.42) (.31) -0-
Distributions from net realized gain on
investment transactions -0- -0- -0- (.19) -0-
Total dividends and distributions (.45) (.39) (.42) (.50) -0-
Net asset value, end of period $18.52 $18.83 $17.69 $15.27 $17.65
TOTAL RETURN
Total investment return based on
net asset value (d) .73% 8.79% 18.78% (10.80)% .51%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $46,093 $45,047 $23,417 $3,302 $1,570
Ratio to average net assets of:
Expenses, net of waivers and
reimbursements .97%(e) .96% 1.05% 1.05% 1.00%(e)
Expenses, before waivers and
reimbursements .97%(e) 1.01% 1.05% 1.05% 1.00%(e)
Net investment income 1.95%(e) 2.35%(c) 2.29% 2.51% 1.80%(e)
Portfolio turnover rate 25% 60% 81% 57% 71%
(a) As required, effective January 1, 2001, the Portfolio has adopted the
provisions of the AICPA Audit and Accounting Guide, Audits of Investment
Companies, and began amortizing premium on debt securities. For the year ended
December 31, 2001, the effect of this change to Class A and B shares was to
decrease net investment income per share by $.02 and $.02, respectively,
increase net realized and unrealized gain (loss) on investments per share by
$.02 and $.02, respectively, and decrease the ratio of net investment income to
average net assets from 2.61% to 2.50% for Class A and from 2.41% to 1.80% for
Class B. Per share, ratios and supplemental data for periods prior to January
1, 2001 have not been restated to reflect this change in presentation.
(b) Based on average shares outstanding.
(c) Net of expenses waived or reimbursed by the Adviser.
(d) 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 return does not reflect the
deduction of taxes that a shareholder would pay on Portfolio distributions or
the redemption of Portfolio shares. Total investment return calculated for a
period of less than one year is not annualized.
(e) Annualized.
(f) Commencement of distribution.
20
[LOGO] ALLIANCEBERNSTEIN (R)
Investment Research and Management
AllianceBernstein
Variable Products Series Fund, Inc.
Semi-Annual Report
June 30, 2005
> AllianceBernstein Utility Income Portfolio
SEMI-ANNUAL REPORT
INVESTMENT PRODUCTS OFFERED
> ARE NOT FDIC INSURED
> MAY LOSE VALUE
> ARE NOT BANK GUARANTEED
YOU MAY OBTAIN A DESCRIPTION OF THE FUND'S PROXY VOTING POLICIES AND
PROCEDURES, AND INFORMATION REGARDING HOW THE FUND VOTED PROXIES RELATING TO
PORTFOLIO SECURITIES DURING THE MOST RECENT 12-MONTH PERIOD ENDED JUNE 30,
WITHOUT CHARGE. SIMPLY VISIT THE SECURITIES AND EXCHANGE COMMISSION'S (THE
"COMMISSION") WEB SITE AT WWW.SEC.GOV, OR CALL ALLIANCEBERNSTEIN AT (800)
227-4618.
THE FUND FILES ITS COMPLETE SCHEDULE OF PORTFOLIO HOLDINGS WITH THE COMMISSION
FOR THE FIRST AND THIRD QUARTERS OF EACH FISCAL YEAR ON FORM N-Q. THE FUND'S
FORMS N-Q ARE AVAILABLE ON THE COMMISSION'S WEB SITE AT WWW.SEC.GOV. THE FUND'S
FORMS N-Q MAY ALSO BE REVIEWED AND COPIED AT THE COMMISSION'S PUBLIC REFERENCE
ROOM IN WASHINGTON, DC; INFORMATION ON THE OPERATION OF THE PUBLIC REFERENCE
ROOM MAY BE OBTAINED BY CALLING (800) SEC-0330.
UTILITY INCOME PORTFOLIO
FUND EXPENSES
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including sales charges (loads) on purchase payments, contingent
deferred sales charges on redemptions and (2) ongoing costs, including
management fees; distribution (12b-1) fees; and other Fund expenses. This
example is intended to help you understand your ongoing costs (in dollars) of
investing in the Fund and to compare these costs with the ongoing costs of
investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of
the period and held for the entire period as indicated below.
Actual Expenses
The first line of the table below provides information about actual account
values and actual expenses. You may use the information in this line, together
with the amount you invested, to estimate the expenses that you paid over the
period. Simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
in the first line under the heading entitled "Expenses Paid During Period" to
estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio and an assumed annual rate of return of 5% before expenses, which is not
the Fund's actual return. The hypothetical account values and expenses may not
be used to estimate the actual ending account balance or expenses you paid for
the period. You may use this information to compare the ongoing costs of
investing in the Fund and other funds by comparing this 5% hypothetical example
with the 5% hypothetical examples that appear in the shareholder reports of
other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads), or contingent deferred sales charges on redemptions.
Therefore, the second line of the table is useful in comparing ongoing costs
only, and will not help you determine the relative total costs of owning
different funds. In addition, if these transactional costs were included, your
costs would have been higher.
Beginning Ending
Account Value Account Value Expenses Paid Annualized
Utility Income Portfolio January 1, 2005 June 30, 2005 During Period* Expense Ratio*
- ------------------------ --------------- ------------- -------------- --------------
Class A
Actual $ 1,000 $ 1,108.23 $ 5.28 1.01%
Hypothetical (5% return before expenses) $ 1,000 $ 1,019.79 $ 5.06 1.01%
Class B
Actual $ 1,000 $ 1,107.45 $ 6.58 1.26%
Hypothetical (5% return before expenses) $ 1,000 $ 1,018.55 $ 6.31 1.26%
* Expenses are equal to each classes' annualized expense ratios, multiplied
by the average account value over the period, multiplied by the number of days
in the most recent fiscal half-year/365 (to reflect the one-half year period).
1
UTILITY INCOME PORTFOLIO
TEN LARGEST HOLDINGS
June 30, 2005 (unaudited)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
PERCENT OF
COMPANY U.S. $ VALUE NET ASSETS
- -------------------------------------------------------------------------------
TXU Corp. (Common & Preferred) $ 3,201,058 4.9%
Exelon Corp. 2,664,027 4.0
PNM Resources, Inc. (Common & Preferred) 2,598,105 3.9
FPL Group, Inc. (Common & Preferred) 2,420,701 3.7
Sempra Energy 1,696,767 2.6
NSTAR 1,658,654 2.5
Sprint Corp. (FON Group) 1,613,287 2.5
Entergy Corp. 1,586,550 2.4
PG&E Corp. 1,546,648 2.4
PPL Corp. 1,543,880 2.3
------------- -------
$ 20,529,677 31.2%
SECTOR DIVERSIFICATION
June 30, 2005 (unaudited)
_______________________________________________________________________________
PERCENT OF
SECTOR U.S. $ VALUE NET ASSETS
- -------------------------------------------------------------------------------
Utilities $ 52,995,926 80.5%
Energy 4,385,771 6.7
Consumer Services 3,403,188 5.2
Technology 1,468,447 2.2
Basic Industry 516,825 0.8
------------- -------
Total Investments* 62,770,157 95.4
Cash and receivables, net of liabilities 3,034,042 4.6
------------- -------
Net Assets $ 65,804,199 100.0%
* Excludes short-term investments.
Please Note: The sector classifications presented herein are based on the
sector categorization methodology of the Adviser.
2
UTILITY INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS
June 30, 2005 (unaudited)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
Company Shares U.S. $ Value
- -------------------------------------------------------------------------------
COMMON & PREFERRED STOCKS-95.4%
UNITED STATES INVESTMENTS-82.9%
UTILITIES-73.5%
ELECTRIC & GAS UTILITY-65.8%
AES Corp. (a) 83,600 $ 1,369,368
AGL Resources, Inc. 33,400 1,290,910
Allegheny Energy, Inc. (a) 24,000 605,280
Ameren Corp. 24,000 1,327,200
American Electric Power Co., Inc. pfd. 18,800 851,828
Cinergy Corp. 12,200 546,804
CMS Energy Corp. (a) 54,000 813,240
Consolidated Edison, Inc. 27,100 1,269,364
Constellation Energy Group 6,000 346,140
Dominion Resources, Inc. 12,500 917,375
DPL, Inc. (a) 23,900 656,055
DTE Energy Co. 23,000 1,075,710
DTE Energy Co. pfd. 16,800 423,528
Duke Energy Corp. 35,600 1,058,388
Edison International 21,500 871,825
Entergy Corp. 21,000 1,586,550
Equitable Resources, Inc. 17,500 1,190,000
Exelon Corp. 51,900 2,664,027
FPL Group, Inc. 31,900 1,341,714
FPL Group, Inc. pfd. 16,700 1,078,987
Georgia Power Co. pfd. 20,000 525,000
Great Plains Energy, Inc. pfd. 28,000 787,360
KeySpan Corp. 22,407 911,965
New Jersey Resources Corp. 23,800 1,148,350
Northwest Natural Gas Co. 13,900 531,536
NSTAR 53,800 1,658,654
PG&E Corp. 41,200 1,546,648
Piedmont Natural Gas Co., Inc. 10,200 245,004
PNM Resources, Inc. 33,500 965,135
PNM Resources, Inc. pfd. 30,500 1,632,970
PPL Corp. 26,000 1,543,880
Public Service Enterprise Group, Inc. pfd. 18,000 1,389,600
Questar Corp. 20,700 1,364,130
Sempra Energy 41,074 1,696,767
Southern Co. 35,200 1,220,384
TXU Corp. 28,367 2,357,014
TXU Corp. pfd. 22,200 844,044
Westar Energy, Inc. 23,000 552,690
Wisconsin Energy Corp. 14,000 546,000
Xcel Energy, Inc. 28,000 546,560
------------
43,297,984
TELEPHONE UTILITY-6.2%
BellSouth Corp. 24,600 653,622
SBC Communications, Inc. 39,000 926,250
Sprint Corp. (FON Group) 64,300 1,613,287
Verizon Communications, Inc. 24,700 853,385
------------
4,046,544
MISCELLANEOUS-1.5%
Aqua America, Inc. 33,900 1,008,186
------------
48,352,714
ENERGY-6.7%
PIPELINES-6.1%
Kinder Morgan, Inc. 11,500 956,800
ONEOK, Inc. 40,900 1,335,385
Southern Union Co. pfd. 6,900 501,906
The Williams Cos., Inc. 64,600 1,227,400
------------
4,021,491
MISCELLANEOUS-0.6%
Peabody Energy Corp. 7,000 364,280
------------
4,385,771
TECHNOLOGY-2.2%
COMMUNICATION EQUIPMENT-2.2%
Nextel Partners, Inc. Cl. A (a) 22,800 573,876
QUALCOMM, Inc. 27,100 894,571
------------
1,468,447
CONSUMER SERVICES-0.5%
CELLULAR COMMUNICATIONS-0.5%
Nextel Communications, Inc. Cl. A (a) 10,000 323,100
Total United States Investments
(cost $39,587,247) 54,530,032
FOREIGN INVESTMENTS-12.5%
BRAZIL-1.4%
Aes Tiete SA 34,400,000 559,829
CPFL Energia, SA (ADR) (a) 16,400 388,680
------------
948,509
EGYPT-1.2%
Orascom Telecom (GDR) 15,600 791,042
FRANCE-1.0%
Veolia Environnement (ADR) 17,000 635,800
HONG KONG-2.0%
Hong Kong & China Gas Co., Ltd. 657,000 1,333,145
3
UTILITY INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS
(continued)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
Company Shares U.S. $ Value
- -------------------------------------------------------------------------------
MEXICO-2.7%
America Movil, S.A. de C.V. Series L (ADR) 21,600 $ 1,287,576
Grupo Televisa, SA (ADR) 8,000 496,720
------------
1,784,296
PEOPLES REPUBLIC OF CHINA-1.0%
China Shenhua Energy Co., Ltd. (a) 535,500 516,825
Datang International Power
Generation Co., Ltd. 198,000 149,707
------------
666,532
RUSSIA-0.8%
Mobile Telesystems (ADR) 15,000 504,750
SPAIN-1.0%
Telefonica de Espana, SA (ADR) 13,651 667,534
UNITED KINGDOM-1.4%
National Grid Transco Plc 94,000 908,517
Total Foreign Investments
(cost $5,963,154) 8,240,125
Total Common & Preferred
Stocks (cost $45,550,401) 62,770,157
Principal
Amount
Company (000) U.S. $ Value
- -------------------------------------------------------------------------------
SHORT-TERM INVESTMENT-6.9%
TIME DEPOSIT-6.9%
The Bank of New York
2.063%, 7/01/05
(cost $4,548,000) $ 4,548 $ 4,548,000
TOTAL INVESTMENTS-102.3%
(cost $50,098,401) 67,318,157
Other assets less liabilities-(2.3%) (1,513,958)
NET ASSETS-100% $ 65,804,199
(a) Non-income producing security.
Glossary of Terms:
ADR - American Depositary Receipt
GDR - Global Depositary Receipt
Pfd. - Preferred Stock
See Notes to Financial Statements.
4
UTILITY INCOME PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2005 (unaudited)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $50,098,401) $ 67,318,157
Cash 721
Foreign cash, at value (cost $90) 91
Dividends and interest receivable 208,351
Receivable for capital stock sold 77,325
Total assets 67,604,645
LIABILITIES
Payable for capital stock redeemed 1,389,702
Payable for investment securities purchased 284,297
Advisory fee payable 29,013
Distribution fee payable 1,465
Administrative fee payable 1,215
Transfer agent fee payable 55
Accrued expenses 94,699
Total liabilities 1,800,446
NET ASSETS $ 65,804,199
COMPOSITION OF NET ASSETS
Capital stock, at par $ 3,340
Additional paid-in capital 60,223,242
Undistributed net investment income 822,023
Accumulated net realized loss on investment and
foreign currency transactions (12,463,708)
Net unrealized appreciation of investments and
foreign currency denominated assets and liabilities 17,219,302
$ 65,804,199
Class A Shares
Net assets $ 58,707,405
Shares of capital stock outstanding 2,978,391
Net asset value per share $ 19.71
Class B Shares
Net assets $ 7,096,794
Shares of capital stock outstanding 361,229
Net asset value per share $ 19.65
See Notes to Financial Statements.
5
UTILITY INCOME PORTFOLIO
STATEMENT OF OPERATIONS
Six Months Ended June 30, 2005 (unaudited)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
INVESTMENT INCOME
Dividends (net of foreign taxes withheld of $8,547) $ 1,022,894
Interest 114,214
Total investment income 1,137,108
EXPENSES
Advisory fee 163,259
Distribution fee--Class B 8,280
Custodian 68,618
Administrative 36,250
Audit 20,730
Printing 6,665
Legal 1,157
Directors' fees 496
Transfer agency 403
Miscellaneous 2,594
Total expenses 308,452
Net investment income 828,656
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENT AND
FOREIGN CURRENCY TRANSACTIONS
Net realized gain (loss) on:
Investment transactions 2,259,929
Foreign currency transactions (19,133)
Net change in unrealized appreciation/depreciation of:
Investments 3,078,276
Foreign currency denominated assets and liabilities (454)
Net gain on investment and foreign currency transactions 5,318,618
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 6,147,274
See Notes to Financial Statements.
6
UTILITY INCOME PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
Six Months Ended Year Ended
June 30, 2005 December 31,
(unaudited) 2004
--------------- ---------------
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS
Net investment income $ 828,656 $ 1,328,744
Net realized gain on investment and
foreign currency transactions 2,240,796 3,926,301
Net change in unrealized
appreciation/depreciation of
investments and foreign currency
denominated assets and liabilities 3,077,822 6,117,898
Net increase in net assets from
operations 6,147,274 11,372,943
DIVIDENDS TO SHAREHOLDERS FROM
Net investment income
Class A (1,190,148) (962,290)
Class B (138,039) (85,051)
CAPITAL STOCK TRANSACTIONS
Net increase 2,077,072 2,457,294
Total increase 6,896,159 12,782,896
NET ASSETS
Beginning of period 58,908,040 46,125,144
End of period (including undistributed
net investment income of $822,023 and
$1,321,554, respectively) $ 65,804,199 $ 58,908,040
See Notes to Financial Statements.
7
UTILITY INCOME PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
June 30, 2005 (unaudited)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
NOTE A: Significant Accounting Policies
The AllianceBernstein Utility Income Portfolio (the "Portfolio") is a series of
AllianceBernstein Variable Products Series Fund, Inc. (the "Fund"). The
Portfolio's investment objective is to seek current income and capital
appreciation by investing primarily in equity and fixed-income securities of
companies in the utilities industry. The Fund was incorporated in the State of
Maryland on November 17, 1987, as an open-end series investment company. The
Fund offers twenty-three separately managed pools of assets which have
differing investment objectives and policies. The Portfolio 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.
The Portfolio 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
the Portfolio's net asset value per share.
The financial statements have been prepared in conformity with U.S. generally
accepted accounting principles, which require management to make certain
estimates and assumptions that affect the reported amounts of assets and
liabilities in the financial statements and amounts of income and expenses
during the reporting period. Actual results could differ from those estimates.
Additional information about some of the items discussed in these Notes to
Financial Statements is contained in the Fund's Statement of Additional
Information, which is available upon request. The following is a summary of
significant accounting policies followed by the Portfolio.
1. Security Valuation
Portfolio securities are valued at their current market value determined on the
basis of market quotations or, if market quotations are not readily available
or are deemed unreliable, at "fair value" as determined in accordance with
procedures established by and under the general supervision of the Fund's Board
of Directors.
In general, the market value of securities which are readily available and
deemed reliable are determined as follows. Securities listed on a national
securities exchange or on a foreign securities exchange are valued at the last
sale price at the close of the exchange or foreign securities exchange. If
there has been no sale on such day, the securities are valued at the mean of
the closing bid and asked prices on such day. Securities listed on more than
one exchange are valued by reference to the principal exchange on which the
securities are traded; securities not listed on an exchange but traded on The
NASDAQ Stock Market, Inc. ("NASDAQ") are valued in accordance with the NASDAQ
Official Closing Price; listed put or call options are valued at the last sale
price. If there has been no sale on that day, such securities will be valued at
the closing bid prices on that day; open futures contracts and options thereon
are valued using the closing settlement price or, in the absence of such a
price, the most recent quoted bid price. If there are no quotations available
for the day of valuation, the last available closing settlement price is used;
securities traded in the over-the-counter market, ("OTC") (but excluding
securities traded on NASDAQ) are valued at the mean of the current bid and
asked prices as reported by the National Quotation Bureau or other comparable
sources; U.S. Government securities and other debt instruments having 60 days
or less remaining until maturity are valued at amortized cost if their original
maturity was 60 days or less; or by amortizing their fair value as of the 61st
day prior to maturity if their original term to maturity exceeded 60 days;
fixed-income securities, including mortgage backed and asset backed securities,
may be valued on the basis of prices provided by a pricing service or at a
price obtained from one or more of the major broker/dealers. In cases where
broker/dealer quotes are obtained, Alliance Capital Management, L.P. (the
"Adviser") may establish procedures whereby changes in market yields or spreads
are used to adjust, on a daily basis, a recently obtained quoted price on a
security; and OTC and other derivatives are valued on the basis of a quoted bid
price or spread from a major broker/dealer in such security.
Securities for which market quotations are not readily available (including
restricted securities) or are deemed unreliable are valued at fair value.
Factors considered in making this determination may include, but are not
limited to, information obtained by contacting the issuer, analysts, analysis
of the issuer's financial statements or other available documents. In addition,
the Fund may use fair value pricing for securities primarily traded in non-U.S.
markets because, most foreign markets close well before the Fund values its
securities at 4:00 p.m., Eastern Time. The earlier close of these foreign
markets gives rise to the possibility that significant events, including broad
market moves, may have occurred in the interim and may materially affect the
value of those securities. To account for this, the Fund may frequently value
many of its foreign equity securities using fair value prices based on third
party vendor modeling tools to the extent available.
8
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
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 prices of such currencies against the U.S.
dollar.
Purchases and sales of portfolio securities are translated into U.S. dollars at
the rates of exchange prevailing when such securities were acquired or sold.
Income and expenses are translated into U.S. dollars at rates of exchange
prevailing when accrued.
Net realized gain or loss on foreign currency transactions represents foreign
exchange gains and losses from sales and maturities of foreign fixed income
investments, foreign currency exchange contracts, holding of foreign
currencies, currency gains or losses realized between the trade and settlement
dates on foreign investment transactions, and the difference between the
amounts of dividends, interest and foreign withholding taxes recorded on the
Portfolio's books and the U.S. dollar equivalent amounts actually received or
paid. Net unrealized 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 or depreciation of investments
and foreign currency denominated assets and liabilities.
3. Taxes
It is the Portfolio's policy to meet the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute all of its
investment company taxable income and net realized gains, if any, to
shareholders. Therefore, no provisions for federal income or excise taxes are
required. The Portfolio may be subject to taxes imposed by countries in which
it invests. Such taxes are generally based on income and/or capital gains
earned or repatriated. Taxes are accrued and applied to net investment income,
net realized gains and net unrealized appreciation/depreciation as such income
and/or gains are earned.
4. Investment Income and Investment Transactions
Dividend income is recorded on the ex-dividend date or as soon as the Portfolio
is informed of the dividend. Interest income is accrued daily. Investment
transactions are accounted for on the date securities are purchased or sold.
Investment gains and losses are determined on the identified cost basis. The
Portfolio amortizes premiums and accretes discounts as adjustments to interest
income.
5. Income and Expenses
Expenses attributable to a single portfolio are charged to that portfolio.
Expenses of the Fund are charged to each portfolio in proportion to net assets.
All income earned and expenses incurred by a portfolio with multi-class shares
outstanding are borne on a pro rata basis by each outstanding class of shares,
based on the proportionate interest in the portfolio represented by the net
assets of such class, except that the portfolio's Class B shares bear the
distribution fees.
6. Dividends and Distributions
The Portfolio declares and distributes dividends and distributions from net
investment income and net realized gains, respectively, if any, at least
annually. 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 U.S. generally accepted accounting principles. 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
Until September 6, 2004, under the terms of an investment advisory agreement,
the Portfolio paid the Adviser an advisory fee at an annual rate of .75% of the
Portfolio's average daily net assets. Effective September 7, 2004, the terms of
the investment advisory agreement were amended so that the advisory fee was
reduced to an annual rate of .55% of the first $2.5 billion, .45% of the next
$2.5 billion and .40% in excess of $5 billion, of the Portfolio's average daily
net assets. The fee is accrued daily and paid monthly.
Effective January 1, 2004 through September 6, 2004, in contemplation of the
final agreement with the Office of New York Attorney General ("NYAG"), the
Adviser began waiving a portion of its advisory fee so as to charge the
Portfolio at
9
UTILITY INCOME PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(continued)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
the reduced annual rate discussed above. For a more complete discussion of the
Adviser's settlement with the NYAG, please see "Legal Proceedings" below.
Pursuant to the advisory agreement, the Portfolio paid $36,250 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, 2005.
Brokerage commissions paid on investment transactions for the six months ended
June 30, 2005 amounted to $39,848, of which $1,375 and $0, respectively, was
paid to Sanford C. Bernstein & Co. LLC and Sanford C. Bernstein Limited,
affiliates of the Adviser.
The Portfolio compensates Alliance Global Investor Services, Inc., a
wholly-owned subsidiary of the Adviser, under a Transfer Agency Agreement for
providing personnel and facilities to perform transfer agency services for the
Portfolio. Such compensation amounted to $403 for the six months ended June 30,
2005.
NOTE C: Distribution Plan
The Portfolio has adopted a Distribution Plan (the "Plan") for Class B shares
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the
Plan, the Portfolio pays distribution and servicing fees to AllianceBernstein
Investment Research and Management,Inc. (the "Distributor"), a wholly-owned
subsidiary of the Adviser, at an annual rate of up to .50% of the 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 limits
payments under the Plan to .25% of the Portfolio's average daily net assets
attributable to Class B shares. The Plan provides that the Distributor will use
such payments in their entirety for distribution assistance and promotional
activities.
The Portfolio is not obligated under the Plan to pay any distribution and
servicing fees in excess of the amounts set forth above. The purpose of the
payments to the Distributor under the Plan is to compensate the Distributor for
its distribution services with respect to the sale of the Portfolio's Class B
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 Plan is
characterized by the staff of the Securities and Exchange Commission as being
of the "compensation" variety.
In the event that the Plan is terminated or not continued, no distribution and
servicing fees (other than current amounts accrued but not yet paid) would be
owed by the Portfolio to the Distributor.
The Plan also provides that the Adviser may use its own resources to finance
the distribution of the Portfolio's shares.
NOTE D: Investment Transactions
Purchases and sales of investment securities (excluding short-term investments)
for the six months ended June 30, 2005, were as follows:
Purchases Sales
--------------- ---------------
Investment securities (excluding U.S.
government securities) $ 14,441,085 $ 12,869,468
U.S. government securities -0- -0-
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 $ 17,320,110
Gross unrealized depreciation (100,354)
Net unrealized appreciation $ 17,219,756
1. Forward Exchange Currency Contracts
The Portfolio may enter into forward exchange currency contracts in order to
hedge its exposure to changes in foreign currency exchange rates on its 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 on a future date at a negotiated forward rate. The gain or loss
arising from the difference between the original contract and the closing of
such contract would be included in net realized gain or loss on foreign
currency transactions.
10
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
Fluctuations in the value of open forward exchange currency contracts are
recorded for financial reporting purposes as unrealized appreciation and
depreciation by the Portfolio.
The Portfolio's custodian will place and maintain cash not available for
investment or other liquid assets in a separate account of the Portfolio having
a value at least equal to the aggregate amount of the 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 the Portfolio has in that particular
currency contract.
2. Option Transactions
For hedging and investment purposes, the Portfolio may purchase and write
(sell) put and call options on U.S. and foreign government securities and
foreign currencies that are traded on U.S. and foreign 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 written options which
expire unexercised are recorded by the Portfolio on the expiration date as
realized gains from options written. 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. If a
put option is exercised, the premium received reduces the cost basis of the
security or currency purchased by the Portfolio. 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.
NOTE E: Securities Lending
The Portfolio has entered into a securities lending agreement with UBS Warburg
LLC (the "Lending Agent"). Under the terms of the agreement, the Lending Agent,
on behalf of the Portfolio, administers the lending of portfolio securities to
certain broker-dealers. In return, the Portfolio receives fee income from the
lending transactions or it retains a portion of interest on the investment of
any cash received as collateral. The Portfolio also continues to receive
dividends or interest on the securities loaned. Unrealized gain or loss in the
value of the securities loaned that may occur during the term of the loan will
be reflected in the accounts of the Portfolio. All loans are continuously
secured by collateral exceeding the value of the securities loaned. All
collateral consists of either cash or U.S. Government securities. The Lending
Agent invests the cash collateral received in an eligible money market vehicle
in accordance with the investment restrictions of the Portfolio. The Lending
Agent will indemnify the Portfolio for any loss resulting from a borrower's
failure to return a loaned security when due. For the six months ended June 30,
2005, the Portfolio had no securities on loan.
11
UTILITY INCOME PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(continued)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
NOTE F: Capital Stock
There are 1,000,000,000 shares of $.001 par value capital stock authorized,
divided into two classes, designated Class A and Class B shares. Each class
consists of 500,000,000 authorized shares. Transactions in capital stock were
as follows:
SHARES AMOUNT
--------------------------- ------------------------------
Six Months Ended Year Ended Six Months Ended Year Ended
June 30, 2005 December 31, June 30, 2005 December 31,
(unaudited) 2004 (unaudited) 2004
------------ ------------ -------------- --------------
Class A
Shares sold 513,375 565,570 $ 9,722,242 $ 9,076,079
Shares issued in
reinvestment
of dividends 62,246 64,195 1,190,148 962,290
Shares redeemed (480,662) (644,878) (8,908,562) (10,263,375)
Net increase (decrease) 94,959 (15,113) $ 2,003,828 $ (225,006)
Class B
Shares sold 156,379 199,451 $ 2,934,178 $ 3,123,163
Shares issued in
reinvestment
of dividends 7,239 5,685 138,039 85,051
Shares redeemed (162,367) (32,981) (2,998,973) (525,914)
Net increase 1,251 172,155 $ 73,244 $ 2,682,300
NOTE G: Risks Involved in Investing in the Portfolio
Foreign Securities 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.
Indemnification Risk--In the ordinary course of business, the Portfolio enters
into contracts that contain a variety of indemnifications. The Portfolio's
maximum exposure under these arrangements is unknown. However, the Portfolio
has not had prior claims or losses pursuant to these indemnification provisions
and expects the risk of loss thereunder to be remote.
NOTE H: Joint Credit Facility
A number of open-end mutual funds managed by the Adviser, including the
Portfolio, participate in a $500 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
Portfolio did not utilize the Facility during the six months ended June 30,
2005.
NOTE I: Distributions to Shareholders
The tax character of distributions to be paid for the year ending December 31,
2005 will be determined at the end of the current fiscal year. The tax
character of distributions paid during the fiscal years ended December 31, 2004
and December 31, 2003 were as follows:
2004 2003
------------- -------------
Distributions paid from:
Ordinary income $ 1,047,341 $ 1,285,895
Total taxable distributions 1,047,341 1,285,895
Total distributions paid $ 1,047,341 $ 1,285,895
12
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
As of December 31, 2004, the components of accumulated earnings/(deficit) on a
tax basis were as follows:
Undistributed ordinary income $ 1,319,229
Accumulated capital and other losses (14,407,577)(a)
Unrealized appreciation/(depreciation) 13,846,878(b)
Total accumulated earnings/(deficit) $ 758,530
(a) On December 31, 2004, the Portfolio had a net capital loss carryforward of
$14,407,422, of which $13,962,543 expires in the year 2010 and $444,879 expires
in the year 2011. During the current fiscal year, the Portfolio utilized
capital loss carryforwards of $3,827,297. To the extent future capital gains
are offset by capital loss carryforwards, such gains will not be distributed.
Net capital losses and foreign currency losses incurred after October 31, and
within the taxable year are deemed to arise on the first business day of the
Portfolio's next taxable year. For the year ended December 31, 2004, the
Portfolio deferred to January 1, 2005, post-October foreign currency losses of
$155.
(b) The difference between book-basis and tax-basis unrealized
appreciation/(depreciation) is attributable primarily to the tax deferral of
losses on wash sales.
NOTE J:Legal Proceedings
As has been previously reported, the staff of the U.S. Securities and Exchange
Commission ("SEC") and the NYAG have been investigating practices in the mutual
fund industry identified as "market timing" and "late trading" of mutual fund
shares. Certain other regulatory authorities have also been conducting
investigations into these practices within the industry and have requested that
the Adviser provide information to them. The Adviser has been cooperating and
will continue to cooperate with all of these authorities.
On December 18, 2003, the Adviser confirmed that it had reached terms with the
SEC and the NYAG for the resolution of regulatory claims relating to the
practice of "market timing" mutual fund shares in some of the AllianceBernstein
Mutual Funds. The agreement with the SEC is reflected in an Order of the
Commission ("SEC Order"). The agreement with the NYAG is memorialized in an
Assurrance of Discontinuance dated September 1, 2004 ("NYAG Order"). Among the
key provisions of these agreements are the following:
(i) The Adviser agreed to establish a $250 million fund (the
"Reimbursement Fund") to compensate mutual fund shareholders for the adverse
effects of market timing attributable to market timing relationships described
in the SEC Order. According to the SEC Order, the Reimbursement Fund is to be
paid, in order of priority, to fund investors based on (i) their aliquot share
of losses suffered by the fund due to market timing, and (ii) a proportionate
share of advisory fees paid by such fund during the period of such market
timing;
(ii) The Adviser agreed to reduce the advisory fees it receives from
some of the AllianceBernstein long-term, open-end retail funds until December
31, 2008; and
(iii) The Adviser agreed to implement changes to its governance and
compliance procedures. Additionally, the SEC Order and the NYAG Order
contemplate that the Adviser's registered investment company clients, including
the Fund, will introduce governance and compliance changes.
In anticipation of final, definitive documentation of the NYAG Order and
effective January 1, 2004, the Adviser began waiving a portion of its advisory
fee. On September 7, 2004, the Fund's investment advisory agreement was amended
to reflect the reduced advisory fee. For more information on this waiver and
amendment to the Fund's investment advisory agreement, please see "Advisory Fee
and Other Transactions with Affiliates" above.
A special committee of the Adviser's Board of Directors, comprised of the
members of the Adviser's Audit Committee and the other independent member of
the Adviser's Board, is continuing to direct and oversee an internal
investigation and a comprehensive review of the facts and circumstances
relevant to the SEC's and the NYAG's investigations.
In addition, the Independent Directors of the Fund ("the Independent
Directors") have initiated an investigation of the above-mentioned matters with
the advice of an independent economic consultant and independent counsel. The
Independent Directors have formed a special committee to supervise the
investigation.
On October 2, 2003, a putative class action complaint entitled HINDO ET AL. V.
ALLIANCEBERNSTEIN GROWTH & INCOME FUND ET AL. (the "Hindo Complaint") was filed
against the Adviser; Alliance Capital Management Holding L.P.; Alliance Capital
Management Corporation; AXA Financial, Inc.; certain of the AllianceBernstein
Mutual Funds, including the Fund;
13
UTILITY INCOME PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(continued)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
Gerald Malone; Charles Schaffran (collectively, the "Alliance Capital
defendants"); and certain other defendants not affiliated with the Adviser. The
Hindo Complaint was filed in the United States District Court for the Southern
District of New York by alleged shareholders of two of the AllianceBernstein
Mutual Funds. The Hindo Complaint alleges that certain of the Alliance Capital
defendants failed to disclose that they improperly allowed certain hedge funds
and other unidentified parties to engage in late trading and market timing of
AllianceBernstein Fund securities, violating Sections 11 and 15 of the
Securities Act, Sections 10(b) and 20(a) of the Exchange Act, and Sections 206
and 215 of the Advisers Act. Plaintiffs seek an unspecified amount of
compensatory damages and rescission of their contracts with the Adviser,
including recovery of all fees paid to the Adviser pursuant to such contracts.
Since October 2, 2003, numerous additional lawsuits making factual allegations
similar to those in the Hindo Complaint were filed against the Adviser and
certain other defendants, some of which name the Fund as a defendant. All of
these lawsuits seek an unspecified amount of damages. The lawsuits are now
pending in the United States District Court for the District of Maryland
pursuant to a ruling by the Judicial Panel on Multidistrict Litigation
transferring and centralizing all of the mutual fund cases involving market and
late trading in the District of Maryland.
As a result of the matters discussed above, investors in the AllianceBernstein
Mutual Funds may choose to redeem their investments. This may require the
AllianceBernstein Mutual Funds to sell investments held by those funds to
provide for sufficient liquidity and could also have an adverse effect on the
investment performance of the AllianceBernstein Mutual Funds.
The Adviser and approximately twelve other investment management firms were
publicly mentioned in connection with the settlement by the SEC of charges that
an unaffiliated broker/dealer violated federal securities laws relating to its
receipt of compensation for selling specific mutual funds and the disclosure of
such compensation. The SEC indicated publicly that, among other things, it was
considering enforcement action in connection with mutual funds' disclosure of
such arrangements and in connection with the practice of considering mutual
fund sales in the direction of brokerage commissions from fund portfolio
transactions. The SEC issued subpoenas to the Adviser, and the NASD issued
requests for information in connection with this matter and the Adviser
provided documents and other information to the SEC and NASD and cooperated
fully with the investigations. On June 8, 2005 the NASD announced that it had
reached a settlement with the Distributor in connection with this matter.
Management of the Adviser expects that the settlement has resolved both
regulatory inquiries described above.
On June 22, 2004, a purported class action complaint entitled AUCOIN, ET AL. V.
ALLIANCE CAPITAL MANAGEMENT L.P., ET AL. ("Aucoin Complaint") was filed against
the Adviser, Alliance Capital Management Holding L.P., Alliance Capital
Management Corporation, AXA Financial, Inc., AllianceBernstein Investment
Research & Management, Inc., certain current and former directors of the
AllianceBernstein Mutual Funds, and unnamed Doe defendants. The Aucoin
Complaint names certain of the AllianceBernstein mutual funds as nominal
defendants. The Aucoin Complaint was filed in the United States District Court
for the Southern District of New York by an alleged shareholder of an
AllianceBernstein mutual fund. The Aucoin Complaint alleges, among other
things, (i) that certain of the defendants improperly authorized the payment of
excessive commissions and other fees from fund assets to broker-dealers in
exchange for preferential marketing services, (ii) that certain of the
defendants misrepresented and omitted from registration statements and other
reports material facts concerning such payments, and (iii) that certain
defendants caused such conduct as control persons of other defendants. The
Aucoin Complaint asserts claims for violation of Sections 34(b), 36(b) and
48(a) of the Investment Company Act, Sections 206 and 215 of the Advisers Act,
breach of common law fiduciary duties, and aiding and abetting breaches of
common law fiduciary duties. Plaintiffs seek an unspecified amount of
compensatory damages and punitive damages, rescission of their contracts with
the Adviser, including recovery of all fees paid to the Adviser pursuant to
such contracts, an accounting of all fund-related fees, commissions and soft
dollar payments, and restitution of all unlawfully or discriminatorily obtained
fees and expenses.
Since June 22, 2004, numerous additional lawsuits making factual allegations
substantially similar to those in the Aucoin Complaint were filed against the
Adviser and certain other defendants, and others may be filed.
It is possible that these matters and/or other developments resulting from
these matters could result in increased redemptions of the Fund's shares or
other adverse consequences to the Fund. However, the Adviser believes that
these matters are not likely to have a material adverse effect on its ability
to perform advisory services relating to the Fund.
14
UTILITY INCOME PORTFOLIO
FINANCIAL HIGHLIGHTS
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
CLASS A
----------------------------------------------------------------------------
Six Months
Ended Year Ended December 31,
June 30, 2005 ---------------------------------------------------------------
(unaudited) 2004 2003 2002 2001 2000
----------- ----------- ----------- ----------- ----------- -----------
Net asset value, beginning of period $18.17 $14.95 $12.86 $16.82 $22.65 $21.66
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a) .26 .43(b) .35 .36 .29 1.01(b)
Net realized and unrealized gain (loss)
on investment and foreign currency
transactions 1.69 3.13 2.18 (4.06) (5.23) 1.36
Net increase (decrease) in net asset
value from operations 1.95 3.56 2.53 (3.70) (4.94) 2.37
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.41) (.34) (.44) (.26) (.76) (.36)
Distributions from net realized gain on
investment transactions -0- -0- -0- -0- (.13) (1.02)
Total dividends and distributions (.41) (.34) (.44) (.26) (.89) (1.38)
Net asset value, end of period $19.71 $18.17 $14.95 $12.86 $16.82 $22.65
TOTAL RETURN
Total investment return based on
net asset value (c) 10.82% 24.33% 19.88% (22.12)% (22.50)% 11.45%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $58,707 $52,391 $43,323 $40,140 $62,684 $62,362
Ratio to average net assets of:
Expenses, net of waivers and
reimbursements 1.01%(d) 1.08% 1.48% 1.22% 1.02% 1.00%
Expenses, before waivers and
reimbursements 1.01%(d) 1.21% 1.48% 1.22% 1.02% 1.04%
Net investment income 2.82%(d) 2.69%(b) 2.60% 2.60% 1.49% 4.63%(b)
Portfolio turnover rate 22% 48% 76% 90% 25% 18%
See footnote summary on page 16.
15
UTILITY INCOME PORTFOLIO
FINANCIAL HIGHLIGHTS
(continued)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
CLASS B
----------------------------------------------------
Six Months July 22, 2002(e)
Ended Year Ended December 31, to
June 30, 2005 ------------------------ December 31,
(unaudited) 2004 2003 2002
----------- ----------- ----------- -----------
Net asset value, beginning of period $18.10 $14.92 $12.86 $11.40
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a) .24 .38(b) .28 .07
Net realized and unrealized gain on
investment and foreign currency
transactions 1.69 3.13 2.21 1.39
Net increase in net asset value from
operations 1.93 3.51 2.49 1.46
LESS: DIVIDENDS
Dividends from net investment income (.38) (.33) (.43) -0-
Net asset value, end of period $19.65 $18.10 $14.92 $12.86
TOTAL RETURN
Total investment return based on net
asset value (c) 10.75% 24.01% 19.64% 12.81%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $7,097 $6,517 $2,802 $39
Ratio to average net assets of:
Expenses, net of waivers and
reimbursements 1.26%(d) 1.30% 1.73% 1.45%(d)
Expenses, before waivers and
reimbursements 1.26%(d) 1.43% 1.73% 1.45%(d)
Net investment income 2.53%(d) 2.41%(b) 2.07% 1.92%(d)
Portfolio turnover rate 22% 48% 76% 90%
(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 return does not reflect the
deduction of taxes that a shareholder would pay on Portfolio distributions or
the redemption of Portfolio shares. Total investment return calculated for a
period of less than one year is not annualized.
(d) Annualized.
(e) Commencement of distribution.
16
- -------------------------------------------------------------------------------
SEMI-ANNUAL REPORT
- -------------------------------------------------------------------------------
[LOGO] ALLIANCEBERNSTEIN (R)
Investment Research and Management
AllianceBernstein Variable Products Series Fund, Inc.
Semi-Annual Report
June 30, 2005
> AllianceBernstein High Yield Portfolio
INVESTMENT PRODUCTS OFFERED
- ---------------------------
> ARE NOT FDIC INSURED
> MAY LOSE VALUE
> ARE NOT BANK GUARANTEED
- ---------------------------
YOU MAY OBTAIN A DESCRIPTION OF THE FUND'S PROXY VOTING POLICIES AND
PROCEDURES, AND INFORMATION REGARDING HOW THE FUND VOTED PROXIES RELATING TO
PORTFOLIO SECURITIES DURING THE MOST RECENT 12-MONTH PERIOD ENDED JUNE 30,
WITHOUT CHARGE. SIMPLY VISIT THE SECURITIES AND EXCHANGE COMMISSION'S (THE
"COMMISSION") WEB SITE AT WWW.SEC.GOV, OR CALL ALLIANCEBERNSTEIN AT (800)
227-4618.
THE FUND FILES ITS COMPLETE SCHEDULE OF PORTFOLIO HOLDINGS WITH THE COMMISSION
FOR THE FIRST AND THIRD QUARTERS OF EACH FISCAL YEAR ON FORM N-Q. THE FUND'S
FORMS N-Q ARE AVAILABLE ON THE COMMISSION'S WEB SITE AT WWW.SEC.GOV. THE FUND'S
FORMS N-Q MAY ALSO BE REVIEWED AND COPIED AT THE COMMISSION'S PUBLIC REFERENCE
ROOM IN WASHINGTON, DC; INFORMATION ON THE OPERATION OF THE PUBLIC REFERENCE
ROOM MAY BE OBTAINED BY CALLING (800) SEC-0330.
HIGH YIELD PORTFOLIO
FUND EXPENSES
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including sales charges (loads) on purchase payments, contingent
deferred sales charges on redemptions and (2) ongoing costs, including
management fees; distribution (12b-1) fees; and other Fund expenses. This
example is intended to help you understand your ongoing costs (in dollars) of
investing in the Fund and to compare these costs with the ongoing costs of
investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of
the period and held for the entire period as indicated below.
ACTUAL EXPENSES
The first line of the table below provides information about actual account
values and actual expenses. You may use the information in this line, together
with the amount you invested, to estimate the expenses that you paid over the
period. Simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
in the first line under the heading entitled "Expenses Paid During Period" to
estimate the expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio and an assumed annual rate of return of 5% before expenses, which is not
the Fund's actual return. The hypothetical account values and expenses may not
be used to estimate the actual ending account balance or expenses you paid for
the period. You may use this information to compare the ongoing costs of
investing in the Fund and other funds by comparing this 5% hypothetical example
with the 5% hypothetical examples that appear in the shareholder reports of
other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads), or contingent deferred sales charges on redemptions.
Therefore, the second line of the table is useful in comparing ongoing costs
only, and will not help you determine the relative total costs of owning
different funds. In addition, if these transactional costs were included, your
costs would have been higher.
BEGINNING ENDING
ACCOUNT VALUE ACCOUNT VALUE EXPENSES PAID ANNUALIZED
HIGH YIELD PORTFOLIO JANUARY 1, 2005 JUNE 30, 2005 DURING PERIOD* EXPENSE RATIO*
- ---------------------------------------------------------------------------------------------------------------
CLASS A
Actual $1,000 $1,006.85 $5.42 1.09%
Hypothetical (5% return before expenses) $1,000 $1,019.39 $5.46 1.09%
CLASS B
Actual $1,000 $1,005.84 $6.61 1.33%
Hypothetical (5% return before expenses) $1,000 $1,018.20 $6.66 1.33%
* Expenses are equal to each classes' annualized expense ratios, multiplied by
the average account value over the period multiplied by the number of days in
the most recent fiscal half-year/365 (to reflect the one-half year period).
1
HIGH YIELD PORTFOLIO
SECURITY TYPE BREAKDOWN
JUNE 30, 2005 (UNAUDITED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
PERCENT OF
SECURITY TYPE U.S. $ VALUE NET ASSETS
_______________________________________________________________________________
Corporate Debt Obligations $ 47,858,642 96.4%
- -------------------------------------------------------------------------------
Preferred Stocks 654,482 1.3
------------ -----
- -------------------------------------------------------------------------------
Total Investments 48,513,124 97.7
- -------------------------------------------------------------------------------
Cash and receivables, net of liabilities 1,123,232 2.3
------------ -----
- -------------------------------------------------------------------------------
Net Assets $ 49,636,356 100.0%
- -------------------------------------------------------------------------------
2
HIGH YIELD PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2005 (UNAUDITED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
PRINCIPAL
AMOUNT
(000) U.S. $ VALUE
- -------------------------------------------------------------------------------
CORPORATE DEBT OBLIGATIONS-96.4%
AEROSPACE/DEFENSE-1.1%
L-3 Communications Corp.
5.875%, 1/15/15 $ 195 $ 189,150
Sequa Corp.
9.00%, 8/01/09 70 77,175
Transdigm, Inc.
8.375%, 7/15/11 260 275,600
--------------
541,925
--------------
AIR TRANSPORTATION-0.5%
ATA Airlines, Inc.
6.99%, 4/15/16 (a) 289 254,611
--------------
AUTOMOTIVE-2.6%
Affinia Group, Inc.
9.00%, 11/30/14 (a) 85 71,400
Asbury Automotive Group
8.00%, 3/15/14 109 105,185
Ford Motor Co.
7.45%, 7/16/31 150 125,222
Ford Motor Credit Co.
4.95%, 1/15/08 195 186,015
General Motors Corp.
7.75%, 3/15/36 (b) 410 114,800
HLI Operating Co., Inc.
10.50%, 6/15/10 170 166,600
Keystone Automotive Operations, Inc.
9.75%, 11/01/13 233 230,669
TRW Automotive
9.375%, 2/15/13 93 102,998
11.00%, 2/15/13 67 77,050
United Auto Group, Inc.
9.625%, 3/15/12 115 122,763
--------------
1,302,702
--------------
BROADCASTING/MEDIA-1.1%
Allbritton Communications Co.
7.75%, 12/15/12 205 201,925
Corus Entertainment, Inc.(Canada)
8.75%, 3/01/12 120 128,700
Emmis Communications Corp.
9.314%, 6/15/12 (a)(c) 80 81,400
Paxson Communications Corp.
12.25%, 1/15/09 (b) 135 126,225
--------------
538,250
--------------
BUILDING/REAL ESTATE-3.6%
Associated Materials, Inc.
11.25%, 3/01/14 (b) 385 244,475
D.R. Horton, Inc.
6.875%, 5/01/13 190 205,600
KB Home
7.75%, 2/01/10 190 199,720
M/I Homes, Inc.
6.875%, 4/01/12 (a) 205 198,850
Meritage Homes
6.25%, 3/15/15 295 274,350
Schuler Homes, Inc.
10.50%, 7/15/11 155 170,888
WCI Communities, Inc.
6.625%, 3/15/15 170 155,550
Williams Lyon Homes, Inc.
10.75%, 4/01/13 285 309,225
--------------
1,758,658
--------------
CABLE-9.2%
Cablevision Systems Corp.
Series B
8.00%, 4/15/12 390 382,199
Charter Communications
Holdings LLC
11.75%, 5/15/11 (b) 1,385 917,562
CSC Holdings, Inc.
6.75%, 4/15/12 (a) 190 178,600
7.625%, 7/15/18 195 188,175
DirecTV Holdings LLC
6.375%, 6/15/15 (a) 280 278,600
8.375%, 3/15/13 84 93,030
EchoStar DBS Corp.
6.375%, 10/01/11 150 148,688
Innova S. de R.L., SA (Mexico)
9.375%, 9/19/13 (d) 225 253,688
Insight Communications Co., Inc.
12.25%, 2/15/11 (c) 285 285,712
Insight Midwest LP/Insight Capital, Inc.
9.75%, 10/01/09 190 196,888
Intelsat Bermuda Ltd.
7.805%, 1/15/12 (a)(c) 65 66,138
8.625%, 1/15/15 (a) 245 258,475
PanAmSat Corp.
9.00%, 8/15/14 168 183,330
PanAmSat Holding Corp.
10.375%, 11/01/14 (b) 670 460,624
Rainbow National Services LLC
8.75%, 9/01/12 (a) 200 218,500
10.375%, 9/01/14 (a) 195 224,250
Rogers Cable, Inc. (Canada)
6.75%, 3/15/15 245 249,900
--------------
4,584,359
--------------
CHEMICALS-3.0%
Borden U.S. Finance Corp./Nova Scotia Finance ULC
9.00%, 7/15/14 (a) 175 178,063
Equistar Chemical Funding LP
10.125%, 9/01/08 185 200,263
10.625%, 5/01/11 130 143,488
Huntsman Advance Materials LLC
11.00%, 7/15/10 140 158,200
3
HIGH YIELD PORTFOLIO
PORTFOLIO OF INVESTMENTS
(CONTINUED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
PRINCIPAL
AMOUNT
(000) U.S. $ VALUE
- -------------------------------------------------------------------------------
Huntsman ICI Chemicals LLC
10.125%, 7/01/09 $ 124 $ 127,565
Huntsman LLC
11.50%, 7/15/12 178 208,704
Quality Distribution LLC
9.00%, 11/15/10 365 335,799
Westlake Chemical Corp.
8.75%, 7/15/11 125 135,938
--------------
1,488,020
--------------
COMMUNICATIONS - FIXED-5.4%
Cincinnati Bell, Inc.
8.375%, 1/15/14 345 353,624
Citizens Communications Co.
6.25%, 1/15/13 270 261,225
Eircom Funding (Ireland)
8.25%, 8/15/13 245 265,825
Hawaiian Telcom Communications, Inc.
9.75%, 5/01/13 (a) 150 159,000
12.50%, 5/01/15 (a) 140 149,100
MCI, Inc.
7.688%, 5/01/09 150 156,188
Qwest Capital Funding, Inc.
7.25%, 2/15/11 355 339,913
Qwest Corp.
8.875%, 3/15/12 165 179,438
Qwest Services Corp.
13.50%, 12/15/10 423 488,564
Time Warner Telecom, Inc.
10.125%, 2/01/11 55 55,000
Valor Telecommunications Enterprises LLC
7.75%, 2/15/15 (a) 275 270,188
--------------
2,678,065
--------------
COMMUNICATIONS - MOBILE-6.9%
American Cellular Corp.
Seies B
10.00%, 8/01/11 225 228,375
Inmarsat Finance Plc (United Kingdom)
7.625%, 6/30/12 225 237,375
10.375%, 11/15/12 (b) 205 160,925
Iridium LLC/Capital Corp.
Series B
14.00%, 7/15/05 (e) 550 86,625
KYIVSTAR (Denmark)
10.375%, 8/17/09 (a) 500 549,999
MobiFon Holdings BV (Netherlands)
12.50%, 7/31/10 505 612,312
Mobile Telesystems Finance, SA
8.00%, 1/28/12 (a) 286 289,575
Nextel Communications, Inc.
6.875%, 10/31/13 265 283,219
Nextel Partners, Inc.
12.50%, 11/15/09 72 78,210
Rogers Wireless, Inc. (Canada)
7.25%, 12/15/12 185 199,800
Rural Cellular Corp.
9.75%, 1/15/10 210 195,300
Triton PCS, Inc.
8.50%, 6/01/13 175 161,438
8.75%, 11/15/11 105 74,288
9.375%, 2/01/11 90 64,575
Western Wireless Corp.
9.25%, 7/15/13 175 199,281
--------------
3,421,297
--------------
CONSUMER MANUFACTURING-2.8%
Broder Brothers Co.
11.25%, 10/15/10 282 284,819
Jostens IH Corp.
7.625%, 10/01/12 190 187,625
K2, Inc.
7.375%, 7/01/14 185 194,713
Levi Strauss & Co.
7.73%, 4/01/12 (c) 190 179,550
North Atlantic Holding Co., Inc.
12.25%, 3/01/14 (b) 225 60,750
Playtex Products, Inc.
8.00%, 3/01/11 190 203,063
Rayovac Corp.
7.375%, 2/01/15 (a) 280 270,900
--------------
1,381,420
--------------
DIVERSFIED MEDIA-3.6%
American Media Operation
8.875%, 1/15/11 140 132,650
10.25%, 5/01/09 155 155,388
Dex Media, Inc.
8.00%, 11/15/13 200 212,500
Dex Media East LLC
9.875%, 11/15/09 50 55,125
12.125%, 11/15/12 91 108,973
Dex Media West LLC
Series B
8.50%, 8/15/10 80 87,200
9.875%, 8/15/13 239 272,460
Primedia, Inc.
8.00%, 5/15/13 210 210,525
8.875%, 5/15/11 8 8,380
WDAC Subsidiary
8.375%, 12/01/14 (a) 270 257,850
WMG Holdings Corp.
9.50% 12/15/14 (a)(b) 438 302,219
--------------
1,803,270
--------------
4
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
PRINCIPAL
AMOUNT
(000) U.S. $ VALUE
- -------------------------------------------------------------------------------
ENERGY-4.1%
Amerada Hess Corp.
7.30%, 8/15/31 $ 250 $ 301,642
Chesapeake Energy Corp.
7.75%, 1/15/15 195 210,600
Enterprise Products Operating LP
Series B
5.60%, 10/15/14 280 288,134
Grant Prideco, Inc.
9.00%, 12/15/09 115 125,925
HilCorp Energy
10.50%, 9/01/10 (a) 340 375,700
Kerr-McGee Corp.
6.875%, 9/15/11 285 304,314
Premcor Refining Group, Inc.
9.50%, 2/01/13 115 132,250
Pride International, Inc.
7.375%, 7/15/14 210 230,475
Universal Compression, Inc.
7.25%, 5/15/10 80 83,600
--------------
2,052,640
--------------
ENTERTAINMENT/LEISURE-1.7%
NCL Corp. (Bermuda)
10.625%, 7/15/14 (a) 270 284,175
Royal Caribbean Cruises, Ltd. (Liberia)
8.75%, 2/02/11 240 276,600
Universal City Development
11.75%, 4/01/10 195 223,763
Universal City Florida Holding Co.
8.375%, 5/01/10 60 62,550
--------------
847,088
--------------
FINANCIAL-3.0%
Crum & Forster Holdings Corp.
10.375%, 6/15/13 105 113,925
Fairfax Financial Holdings Ltd. (Canada)
7.375%, 4/15/18 145 122,525
7.75%, 4/26/12 290 275,500
8.25%, 10/01/15 75 70,875
Liberty Mutual Group
5.75%, 3/15/14 (a) 280 281,876
Markel Capital Trust I
Series B
8.71%, 1/01/46 260 288,294
Navistar International Corp.
6.25%, 3/01/12 (a) 195 188,175
PXRE Capital Trust I
8.85%, 2/01/27 45 46,661
Royal & Sun Alliance Insurance (United Kingdom)
8.95%, 10/15/29 80 103,521
--------------
1,491,352
--------------
FOOD/BEVERAGE-0.8%
Del Monte Corp.
8.625%, 12/15/12 115 126,500
Dole Food Co., Inc.
8.625%, 5/01/09 105 111,825
8.875%, 3/15/11 23 24,553
Foodcorp Ltd.
8.875% 6/15/12 (a)(d) 125 154,673
--------------
417,551
--------------
GAMING-4.3%
Ameristar Casinos, Inc.
10.75%, 2/15/09 95 103,313
Argosy Gaming Co.
9.00%, 9/01/11 100 109,375
Mandalay Resort Group
10.25%, 8/01/07 165 181,500
MGM Mirage, Inc.
8.375%, 2/01/11 280 305,199
Mohegan Tribal Gaming Authority
6.375%, 7/15/09 60 61,200
7.125%, 8/15/14 255 267,113
Park Place Entertainment Corp.
7.875%, 3/15/10 90 100,800
9.375%, 2/15/07 120 129,000
Penn National Gaming, Inc.
6.875%, 12/01/11 220 225,500
Riviera Holdings Corp.
11.00%, 6/15/10 210 232,050
Seneca Gaming Corp.
7.25%, 5/01/12 260 268,775
Turning Stone Casino Resort Enterprises
9.125%, 12/15/10 (a) 140 148,050
--------------
2,131,875
--------------
HEALTHCARE-6.1%
Concentra Operating Corp.
9.125%, 6/01/12 95 100,700
9.50%, 8/15/10 145 154,425
Coventry Health Care, Inc.
5.875%, 1/15/12 90 91,575
6.125%, 1/15/15 105 106,838
DaVita, Inc.
7.25%, 3/15/15 (a) 310 318,525
Hanger Orthopedic Group, Inc.
10.375%, 2/15/09 260 239,850
HCA, Inc.
6.375%, 1/15/15 355 368,351
Iasis Healthcare Corp.
8.75%, 6/15/14 245 265,825
PacifiCare Health Systems, Inc.
10.75%, 6/01/09 182 200,200
Select Medical Corp.
7.625%, 2/01/15 (a) 400 395,999
Triad Hospitals, Inc.
7.00%, 11/15/13 220 226,050
5
HIGH YIELD PORTFOLIO
PORTFOLIO OF INVESTMENTS
(CONTINUED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
PRINCIPAL
AMOUNT
(000) U.S. $ VALUE
- -------------------------------------------------------------------------------
Universal Hospital Services, Inc.
10.125%, 11/01/11 $ 240 $ 242,400
Vanguard Health Holdings Co.
11.25%, 10/01/15 (b) 465 330,150
--------------
3,040,888
--------------
HOTEL/LODGING-2.4%
Gaylord Entertainment Co.
8.00%, 11/15/13 175 183,969
Host Marriott LP
Series G
9.25%, 10/01/07 160 172,800
Series I
9.50%, 1/15/07 125 132,500
La Quinta Properties, Inc.
8.875%, 3/15/11 185 200,031
Starwood Hotels Resorts
7.875%, 5/01/12 175 197,313
Sun International Hotels Ltd.
8.875%, 8/15/11 105 112,350
Vail Resorts, Inc.
6.75%, 2/15/14 210 213,150
--------------
1,212,113
--------------
INDUSTRIAL-5.9%
Amsted Industries, Inc.
10.25%, 10/15/11 (a) 255 275,400
Amtrol, Inc.
10.625%, 12/31/06 295 262,550
Case New Holland, Inc.
9.25%, 8/01/11 175 183,750
Dayton Superior Corp.
10.75%, 9/15/08 90 93,600
13.00%, 6/15/09 140 123,200
FastenTech, Inc.
11.50%, 5/01/11 120 130,200
Fimep, SA (France)
10.50%, 2/15/13 115 131,100
Goodman Global Holdings
7.875%, 12/15/12 (a) 270 249,750
Mueller Group, Inc.
10.00%, 5/01/12 190 199,500
NMHG Holdings Co.
10.00%, 5/15/09 105 110,250
Sensus Metering Systems, Inc.
8.625%, 12/15/13 250 232,500
Terex Corp.
Series B
10.375%, 4/01/11 195 211,575
TriMas Corp.
9.875%, 6/15/12 295 247,800
Trinity Industries
6.50%, 3/15/14 305 303,475
Williams Scotsman, Inc.
9.875%, 6/01/07 160 160,800
--------------
2,915,450
--------------
MINING & METALS-3.1%
AK Steel Corp.
7.875%, 2/15/09 450 409,500
Citigroup (JSC Severstal)
9.25%, 4/19/14 (d) 274 282,631
Freeport-McMoRan Copper & Gold, Inc. Cl.B
10.125%, 2/01/10 120 133,500
International Steel Group
6.50%, 4/15/14 234 224,640
Ispat Inland ULC
9.75%, 4/01/14 201 234,165
Peabody Energy Corp.
6.875%, 3/15/13 220 233,200
--------------
1,517,636
--------------
NON-AIR TRANSPORTATION-0.2%
Horizon Lines LLC
9.00%, 11/01/12 (a) 105 109,988
--------------
PAPER/PACKAGING-5.1%
Abitibi-Consolidated, Inc.
8.55%, 8/01/10 140 145,950
Anchor Glass Container Corp.
11.00%, 2/15/13 160 124,800
Berry Plastics Corp.
10.75%, 7/15/12 185 201,881
Crown Euro Holdings, SA (France)
9.50%, 3/01/11 215 237,575
Georgia-Pacific Corp.
8.875%, 5/15/31 130 160,875
9.375%, 2/01/13 285 322,406
Graphic Packaging International Corp.
9.50%, 8/15/13 215 216,613
NewPage Corp.
10.00%, 5/01/12 (a) 255 255,638
Owens-Brockway Glass Container
8.875%, 2/15/09 340 361,250
Pliant Corp.
11.125%, 9/01/09 60 58,500
13.00%, 6/01/10 350 283,500
Russell-Stanley Holdings, Inc.
9.00%, 11/30/08 (f)(g)(h) 91 31,969
Vitro Envases (Mexico)
10.75%, 7/23/11 (a) 155 150,350
--------------
2,551,307
--------------
PUBLIC UTILITIES - ELECTRIC & GAS-10.7%
AES Corp.
8.75%, 5/15/13 (a) 55 61,463
9.00%, 5/15/15 (a) 100 112,250
Aquila, Inc.
14.625%, 7/01/12 (i) 135 176,850
6
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
PRINCIPAL
AMOUNT
(000) U.S. $ VALUE
- -------------------------------------------------------------------------------
Calpine Corp.
8.50%, 7/15/10 (a) $ 295 $ 227,150
DPL Capital Trust II
8.125%, 9/01/31 230 271,151
DPL, Inc.
6.875%, 9/01/11 125 135,000
Dynegy Holdings, Inc.
10.125%, 7/15/13 (a) 345 389,849
Dynegy-Roseton Danskamme
Series B
7.67%, 11/08/16 240 230,400
FirstEnergy Corp.
Series B
6.45%, 11/15/11 305 333,250
Northwest Pipeline Corp.
8.125%, 3/01/10 105 113,925
NRG Energy, Inc.
8.00%, 12/15/13 (a) 207 218,385
Ormat Funding Corp.
8.25%, 12/30/20 226 228,028
Reliant Energy, Inc.
6.75%, 12/15/14 185 180,838
9.50%, 7/15/13 240 266,400
SEMCO Energy, Inc.
7.125%, 5/15/08 65 66,176
7.75%, 5/15/13 120 125,258
Southern Natural Gas Co.
7.35%, 2/15/31 245 260,627
8.875%, 3/15/10 130 142,601
Star Gas Partner LP/Star Gas Finance Co.
10.25%, 2/15/13 175 162,750
TECO Energy, Inc.
6.75%, 5/01/15 (a) 220 233,200
7.00%, 5/01/12 180 194,400
TXU Corp.
5.55%, 11/15/14 (a) 205 198,820
6.50%, 11/15/24 (a) 204 199,827
Williams Cos., Inc.
7.625%, 7/15/19 445 500,624
7.875%, 9/01/21 255 290,062
--------------
5,319,284
--------------
RESTAURANTS-0.3%
Domino's, Inc.
8.25%, 7/01/11 127 135,255
--------------
RETAIL-0.4%
JC Penney Co., Inc.
8.00%, 3/01/10 180 198,000
--------------
SERVICE-3.6%
Allied Waste North America, Inc.
6.375%, 4/15/11 245 235,200
8.50%, 12/01/08 40 41,950
8.875%, 4/01/08 125 131,250
H & E Equipment Services, Inc.
11.125%, 6/15/12 295 325,238
National Waterworks, Inc.
10.50%, 12/01/12 115 129,375
Service Corp. International
6.00%, 12/15/05 4 4,025
6.50%, 3/15/08 260 265,850
7.70%, 4/15/09 160 171,200
Stewart Enterprises, Inc.
6.25%, 2/15/13 (a) 220 217,800
United Rentals North America, Inc.
6.50%, 2/15/12 247 242,986
--------------
1,764,874
--------------
SUPERMARKET/DRUG-1.7%
Couche-Tard US/Finance Corp.
7.50%, 12/15/13 169 177,450
Duane Reade, Inc.
9.75%, 8/01/11 210 171,150
Rite Aid Corp.
11.25%, 7/01/08 130 137,313
Roundy's, Inc.
Series B
8.875%, 6/15/12 110 113,300
Stater Brothers Holdings, Inc.
8.125%, 6/15/12 240 234,000
--------------
833,213
--------------
TECHNOLOGY-3.2%
Amkor Technologies, Inc.
7.75%, 5/15/13 160 137,600
Celestica, Inc. (Canada)
7.875%, 7/01/11 345 353,625
Flextronics International, Ltd. (Singapore)
6.50%, 5/15/13 250 258,750
Lucent Technologies, Inc.
6.45%, 3/15/29 80 71,600
6.50%, 1/15/28 160 142,000
Nortel Networks Corp.
6.875%, 9/01/23 155 144,925
SCG Holding Corp.
8/04/11(a) 70 112,000
Telcordia Technologies, Inc.
10.00%, 3/15/13(a) 140 130,900
Unisys Corp.
6.875%, 3/15/10 220 216,150
--------------
1,567,550
--------------
Total Corporate Debt Obligations
(cost $47,441,902) 47,858,641
--------------
7
HIGH YIELD PORTFOLIO
PORTFOLIO OF INVESTMENTS
(CONTINUED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
SHARES U.S. $ VALUE
- -------------------------------------------------------------------------------
PREFERRED STOCKS-1.3%
BROADCASTING/MEDIA-0.3%
Paxson Communications Corp.
14.25%, 11/13/06 (f) 26 $ 168,732
--------------
FINANCIAL-1.0%
Sovereign REIT
Series A
12.00%, 5/16/20 355 485,750
--------------
Total Preferred Stocks
(cost $568,164) 654,482
--------------
WARRANT-0.0%
Pliant Corp.
Warrants, expiring
6/01/10 (e)(g)(h)
(cost $1,820) 50 1
--------------
TOTAL INVESTMENTS-97.7%
(cost $48,011,886) 48,513,124
Other assets less liabilities-2.3% 1,123,232
--------------
NET ASSETS-100% $ 49,636,356
==============
FORWARD EXCHANGE CURRENCY CONTRACTS (SEE NOTE D)
U.S. $
CONTRACT VALUE ON U.S. $
AMOUNT ORIGINATION CURRENT UNREALIZED
(000) DATE VALUE APPRECIATION
- ------------------------------------------------------------------------------------------------
SALE CONTRACT
Euro, settling 8/18/05 127 $153,699 $153,385 $314
(a) Securities are exempt from registration under Rule 144A of the Securities
Act of 1933. These securities are considered liquid and may be resold in
transactions exempt from registration, normally to qualified institutional
buyers. At June 30, 2005, the aggregate market value of these securities
amounted to $9,547,661 or 19.2% of net assets.
(b) Indicates a security that has less than zero coupon that remains in effect
until a predetermined date at which time the stated coupon rate becomes
effective until maturity.
(c) Variable rate coupon, rate shown as of June 30, 2005.
(d) Position, or portion thereof, with an aggregate market value of $546,849
has been segregated to collateralize forward exchange currency contracts.
(e) Security is in default and is non-income producing.
(f) PIK (Paid-in-kind) preferred quarterly stock payments.
(g) Illiquid security valued at fair value.
(h) Security is exempt from registration under Rule 144A of the Securities Act
of 1933. These securities, which represent 0.06% of net assets as of June 30,
2005, are considered illiquid and restricted.
ACQUISITION ACQUISITION MARKET PERCENTAGE OF
RESTRICTED SECURITIES DATE COST VALUE NET ASSETS
- -----------------------------------------------------------------------------------------------------------
Russell-Stanley Holdings, Inc. 11/09/01-6/06/05 $518,667 $31,969 0.06%
9.00%, 11/30/08
Pliant Corp.-warrants 12/01/00 1,820 1 0.00
expiring 6/01/10
(i) The coupon on this security varies along with its rating. If its rating
falls below Baa3/BBB- by either Moody's or Standard & Poors, the coupon steps
up 50 basis points. The security is currently rated B2/B.
See Notes to Financial Statements.
8
HIGH YIELD PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2005 (UNAUDITED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $48,011,886) $ 48,513,124
Cash 199,476
Foreign cash, at value (cost $119) 119
Unrealized appreciation of forward exchange currency
contracts 314
Dividends and interest receivable 1,052,903
Receivable for investment securities sold 159,678
Receivable for capital stock sold 57,092
------------
Total assets 49,982,706
------------
LIABILITIES
Payable for investment securities purchased 232,738
Advisory fee payable 20,254
Distribution fee payable 2,373
Administrative fee payable 1,215
Transfer agent fee payable 55
Accrued expenses 89,715
------------
Total liabilities 346,350
------------
NET ASSETS $ 49,636,356
============
COMPOSITION OF NET ASSETS
Capital stock, at par $ 6,759
Additional paid-in capital 61,899,210
Undistributed net investment income 1,930,973
Accumulated net realized loss on investment and foreign
currency transactions (14,702,138)
Net unrealized appreciation of investments and foreign
currency denominated assets and liabilities 501,552
------------
$ 49,636,356
============
CLASS A SHARES
Net assets $ 37,927,861
============
Shares of capital stock outstanding 5,163,422
============
Net asset value per share $ 7.35
============
CLASS B SHARES
Net assets $ 11,708,495
============
Shares of capital stock outstanding 1,595,877
============
Net asset value per share $ 7.34
============
See Notes to Financial Statements.
9
HIGH YIELD PORTFOLIO
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 2005 (UNAUDITED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
INVESTMENT INCOME
Interest $ 2,223,856
Dividends 32,628
------------
Total investment income 2,256,484
------------
EXPENSES
Advisory fee 129,842
Distribution fee -- Class B 15,065
Custodian 86,003
Administrative 36,250
Audit 20,730
Printing 6,341
Legal 1,108
Directors' fees 496
Transfer agency 403
Miscellaneous 632
------------
Total expenses 296,870
------------
Net investment income 1,959,614
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENT AND
FOREIGN CURRENCY TRANSACTIONS
Net realized gain (loss) on:
Investment transactions 423,570
Foreign currency transactions (1,354)
Net change in unrealized appreciation/depreciation of:
Investments (2,162,665)
Foreign currency denominated assets and liabilities 1,330
------------
Net loss on investment and foreign currency transactions (1,739,119)
------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 220,495
============
See Notes to Financial Statements.
10
HIGH YIELD PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 2005 DECEMBER 31,
(UNAUDITED) 2004
============== ==============
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS
Net investment income $ 1,959,614 $ 4,148,437
Net realized gain on investment and
foreign currency transactions 422,216 968,820
Net change in unrealized appreciation/
depreciation of investments and
foreign currency denominated assets
and liabilities (2,161,335) (1,035,275)
-------------- --------------
Net increase in net assets from operations 220,495 4,081,982
DIVIDENDS TO SHAREHOLDERS FROM
Net investment income
Class A (3,194,538) (2,827,523)
Class B (947,882) (641,967)
CAPITAL STOCK TRANSACTIONS
Net decrease (1,842,179) (1,249,760)
-------------- --------------
Total decrease (5,764,104) (637,268)
NET ASSETS
Beginning of period 55,400,460 56,037,728
-------------- --------------
End of period (including undistributed
net investment income of $1,930,973
and $4,113,779, respectively) $ 49,636,356 $ 55,400,460
============== ==============
See Notes to Financial Statements.
11
HIGH YIELD PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2005 (UNAUDITED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
NOTE A: SIGNIFICANT ACCOUNTING POLICIES
The AllianceBernstein High Yield Portfolio (the "Portfolio") is a series of
AllianceBernstein Variable Products Series Fund, Inc. (the "Fund"). The
Portfolio's investment objective is to seek to earn the highest level of
current income without assuming undue risk by investing principally in high
yielding, fixed-income securities rated Baa or lower by Moody's or BBB or lower
by S&P Duff &Phelps or Fitch or, if unrated of comparable quantity. The Fund
was incorporated in the State of Maryland on November 17, 1987, as an open-end
series investment company. The Fund offers twenty-three separately managed
pools of assets which have differing investment objectives and policies. The
Portfolio 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.
The Portfolio 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
the Portfolio's net asset value per share.
The financial statements have been prepared in conformity with U.S. generally
accepted accounting principles, which require management to make certain
estimates and assumptions that affect the reported amounts of assets and
liabilities in the financial statements and amounts of income and expenses
during the reporting period. Actual results could differ from those estimates.
Additional information about some of the items discussed in these Notes to
Financial Statements is contained in the Fund's Statement of Additional
Information, which is available upon request. The following is a summary of
significant accounting policies followed by the Portfolio.
1. SECURITY VALUATION
Portfolio securities are valued at their current market value determined on the
basis of market quotations or, if market quotations are not readily available
or are deemed unreliable, at "fair value" as determined in accordance with
procedures established by and under the general supervision of the Fund's Board
of Directors.
In general, the market value of securities which are readily available and
deemed reliable are determined as follows. Securities listed on a national
securities exchange or on a foreign securities exchange are valued at the last
sale price at the close of the exchange or foreign securities exchange. If
there has been no sale on such day, the securities are valued at the mean of
the closing bid and asked prices on such day. Securities listed on more than
one exchange are valued by reference to the principal exchange on which the
securities are traded; securities not listed on an exchange but traded on The
NASDAQ Stock Market, Inc. ("NASDAQ") are valued in accordance with the NASDAQ
Official Closing Price; listed put or call options are valued at the last sale
price. If there has been no sale on that day, such securities will be valued at
the closing bid prices on that day; open futures contracts and options thereon
are valued using the closing settlement price or, in the absence of such a
price, the most recent quoted bid price. If there are no quotations available
for the day of valuation, the last available closing settlement price is used;
securities traded in the over-the-counter market, ("OTC") (but excluding
securities traded on NASDAQ) are valued at the mean of the current bid and
asked prices as reported by the National Quotation Bureau or other comparable
sources; U.S. Government securities and other debt instruments having 60 days
or less remaining until maturity are valued at amortized cost if their original
maturity was 60 days or less; or by amortizing their fair value as of the 61st
day prior to maturity if their original term to maturity exceeded 60 days;
fixed-income securities, including mortgage backed and asset backed securities,
may be valued on the basis of prices provided by a pricing service or at a
price obtained from one or more of the major broker/dealers. In cases where
broker/dealer quotes are obtained, Alliance Capital Management, L.P. (the
"Adviser") may establish procedures whereby changes in market yields or spreads
are used to adjust, on a daily basis, a recently obtained quoted price on a
security; and OTC and other derivatives are valued on the basis of a quoted bid
price or spread from a major broker/dealer in such security.
Securities for which market quotations are not readily available (including
restricted securities) or are deemed unreliable are valued at fair value.
Factors considered in making this determination may include, but are not
limited to, information obtained by contacting the issuer, analysts, analysis
of the issuer's financial statements or other available documents. In addition,
the Fund may use fair value pricing for securities primarily traded in non-U.S.
markets because, most foreign markets close well before the Fund values its
securities at 4:00 p.m., Eastern Time. The earlier close of these foreign
markets gives rise to the possibility that significant events, including broad
market moves, may have occurred in the interim and may materially affect the
value of those securities.
12
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
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 prices of such currencies against the U.S.
dollar. Purchases and sales of portfolio securities are translated into U.S.
dollars at the rates of exchange prevailing when such securities were acquired
or sold. Income and expenses are translated into U.S. dollars at rates of
exchange prevailing when accrued.
Net realized gain or loss on foreign currency transactions represents foreign
exchange gains and losses from sales and maturities of foreign fixed income
investments, foreign currency exchange contracts, holding of foreign
currencies, currency gains or losses realized between the trade and settlement
dates on foreign investment transactions, and the difference between the
amounts of dividends, interest and foreign withholding taxes recorded on the
Portfolio's books and the U.S. dollar equivalent amounts actually received or
paid. Net unrealized 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 or depreciation of investments
and foreign currency denominated assets and liabilities.
3. TAXES
It is the policy of the Portfolio 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. The Portfolio may be subject to taxes imposed by countries in which
it invests. Such taxes are generally based on income and/or capital gains
earned or repatriated. Taxes are accrued and applied to net investment income,
net realized gains and net unrealized appreciation/depreciation as such income
and/or gains are earned.
4. INVESTMENT INCOME AND INVESTMENT TRANSACTIONS
Dividend income is recorded on the ex-dividend date or as soon as the Portfolio
is informed of the dividend. Interest income is accrued daily. Investment
transactions are accounted for on the trade date securities are purchased or
sold. Investment gains and losses are determined on the identified cost basis.
The Portfolio amortizes premiums and accretes discounts as adjustments to
interest income.
5. INCOME AND EXPENSES
Expenses attributable to a single portfolio are charged to that portfolio.
Expenses of the Fund are charged to each portfolio in proportion to net assets.
All income earned and expenses incurred by a portfolio, with multi-class shares
outstanding, are borne on a pro-rata basis by each outstanding class of shares,
based on the proportionate interest in the portfolio represented by the net
assets of such class, except that the portfolio's Class B shares bear the
distribution fees.
6. DIVIDENDS AND DISTRIBUTIONS
The Portfolio declares and distributes dividends and distributions from net
investment income and net realized gains, respectively, if any, at least
annually. 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 U.S. generally accepted accounting principles. 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
Until September 6, 2004, under the terms of an investment advisory agreement,
the Portfolio paid the Adviser an advisory fee at an annual rate of .75% of the
Portfolio's average daily net assets. Effective September 7, 2004, the terms of
the investment advisory agreement were amended so that the advisory fee was
reduced to an annual rate of .50% of the first $2.5 billion, .45% of the next
$2.5 billion and .40% in excess of $5 billion, of the Portfolio's average daily
net assets. The fee is accrued daily and paid monthly.
Effective January 1, 2004 through September 6, 2004, in contemplation of the
final agreement with the Office of New York Attorney General ("NYAG"), the
Adviser began waiving a portion of its advisory fee so as to charge the
Portfolio at the reduced annual rate discussed above. For a more complete
discussion of the Adviser's settlement with the NYAG, please see "Legal
Proceedings" below.
13
HIGH YIELD PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
Pursuant to the advisory agreement, the Portfolio paid $36,250 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, 2005.
Brokerage commissions paid on investment transactions for the six months ended
June 30, 2005 amounted to $63, none of which was paid to Sanford C. Bernstein &
Co. LLC and Sanford C. Bernstein Limited, affiliates of the Adviser.
The Portfolio compensates Alliance Global Investor Services, Inc., a
wholly-owned subsidiary of the Adviser, under a Transfer Agency Agreement for
providing personnel and facilities to perform transfer agency services for the
Portfolio. Such compensation amounted to $403 for the six months ended June 30,
2005.
NOTE C: DISTRIBUTION PLAN
The Portfolio has adopted a Distribution Plan (the "Plan") for Class B shares
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the
Plan, the Portfolio pays distribution and servicing fees to AllianceBernstein
Investment Research and Management, Inc. (the "Distributor"), a wholly-owned
subsidiary of the Adviser, at an annual rate of up to .50% of the 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 limits
payments under the Plan to .25% of the Portfolio's average daily net assets
attributable to Class B shares. The Plan provides that the Distributor will use
such payments in their entirety for distribution assistance and promotional
activities.
The Portfolio is not obligated under the Plan to pay any distribution and
servicing fees in excess of the amounts set forth above. The purpose of the
payments to the Distributor under the Plan is to compensate the Distributor for
its distribution services with respect to the sale of the Portfolio's Class B
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 Plan is
characterized by the staff of the Securities and Exchange Commission as being
of the "compensation" variety.
In the event that the Plan is terminated or not continued, no distribution and
servicing fees (other than current amounts accrued but not yet paid) would be
owed by the Portfolios to the Distributor.
The Plan also provides that the Adviser may use its own resources to finance
the distribution of the Portfolio's shares.
NOTE D: INVESTMENT TRANSACTIONS
Purchases and sales of investment securities (excluding short-term investments)
for the six months ended June 30, 2005, were as follows:
PURCHASES SALES
============== ==============
Investment securities
(excluding U.S. government securities) $ 14,464,775 $ 18,036,593
U.S. government securities -0- -0-
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 $ 2,350,254
Gross unrealized depreciation (1,849,016)
--------------
Net unrealized appreciation $ 501,238
==============
14
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
1. FORWARD EXCHANGE CURRENCY CONTRACTS
The Portfolio may enter into forward exchange currency contracts in order to
hedge its exposure to changes in foreign currency exchange rates on its 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 on a future date at a negotiated forward rate. The gain or loss
arising from the difference between the original contract and the closing of
such contract would be included in net realized gain or loss on foreign
currency transactions.
Fluctuations in the value of open forward exchange currency contracts are
recorded for financial reporting purposes as unrealized appreciation and
depreciation by the Portfolio.
The Portfolio's custodian will place and maintain cash not available for
investment or other liquid assets in a separate account of the Portfolio having
a value at least equal to the aggregate amount of the 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 the Portfolio has in that particular
currency contract.
2. OPTION TRANSACTIONS
For hedging and investment purposes, the Portfolio may purchase and write
(sell) put and call options on U.S. and foreign government securities and
foreign currencies that are traded on U.S. and foreign 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 written options which
expire unexercised are recorded by the Portfolio on the expiration date as
realized gains from options written. 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. If a
put option is exercised, the premium received reduces the cost basis of the
security or currency purchased by the Portfolio. 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.
NOTE E: SECURITIES LENDING
The Portfolio has entered into a securities lending agreement with UBS Warburg
LLC (the "Lending Agent"). Under the terms of the agreement, the Lending Agent,
on behalf of the Portfolio, administers the lending of portfolio securities to
certain broker-dealers. In return, the Portfolio receives fee income from the
lending transactions or it retains a portion of interest on the investment of
any cash received as collateral. The Portfolio also continues to receive
dividends or interest on the securities loaned. Unrealized gain or loss in the
value of the securities loaned that may occur during the term of the loan will
be reflected in the accounts of the Portfolio. All loans are continuously
secured by collateral exceeding the value of the securities loaned. All
collateral consists of either cash or U.S. government securities. The Lending
Agent invests the cash collateral received in an eligible money market vehicle
in accordance with the investment restrictions of the Portfolio. The lending
agent will indemnify the Portfolio for any loss resulting from a borrower's
failure to return a loaned security when due. For the six months ended June 30,
2005, the Portfolio had no securities on loan.
15
HIGH YIELD PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
NOTE F: CAPITAL STOCK
There are 1,000,000,000 shares of $.001 par value capital stock authorized,
divided into two classes, designated Class A and Class B shares. Each class
consists of 500,000,000 authorized shares. Transactions in capital stock were
as follows:
SHARES AMOUNT
--------------------------- ------------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
JUNE 30, 2005 DECEMBER 31, JUNE 30, 2005 DECEMBER 31,
(UNAUDITED) 2004 (UNAUDITED) 2004
------------ ------------ -------------- --------------
CLASS A
Shares sold 236,963 525,294 $ 1,872,939 $ 4,086,863
Shares issued
in reinvestment
of dividends 437,608 385,221 3,194,538 2,827,523
Shares redeemed (887,298) (1,613,919) (6,976,156) (12,584,467)
------------ ------------ -------------- --------------
Net decrease (212,727) (703,404) $ (1,908,679) $ (5,670,081)
=========== =========== ============= =============
CLASS B
Shares sold 292,806 866,850 $ 2,323,564 $ 6,776,998
Shares issued
in reinvestment
of dividends 130,025 87,581 947,882 641,967
Shares redeemed (406,062) (382,523) (3,204,946) (2,998,644)
------------ ------------ -------------- --------------
Net increase 16,769 571,908 $ 66,500 $ 4,420,321
=========== =========== ============= =============
NOTE G: RISKS INVOLVED IN INVESTING IN THE PORTFOLIO
Interest Rate Risk and Credit Risk--Interest rate risk is the risk that changes
in interest rates will affect the value of the Portfolio's investments in
fixed-income debt securities such as bonds or notes. Increases in interest
rates may cause the value of the Portfolio's investments to decline. Credit
risk is the risk that the issuer or guarantor of a debt security, or the
counterparty to a derivative contract, will be unable or unwilling to make
timely principal and/or interest payments, or to otherwise honor its
obligations. The degree of risk for a particular security may be reflected in
its credit risk rating. Credit risk is greater for medium quality and
lower-rated securities. Lower-rated debt securities and similar unrated
securities (commonly known as "junk bonds") have speculative elements or are
predominantly speculative risks.
Foreign Securities 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.
Indemnification Risk--In the ordinary course of business, the Portfolio enters
into contracts that contain a variety of indemnifications. The Portfolio's
maximum exposure under these arrangements is unknown. However, the Portfolio
has not had prior claims or losses pursuant to these indemnification provisions
and expects the risk of loss thereunder to be remote.
NOTE H: JOINT CREDIT FACILITY
A number of open-end mutual funds managed by the Adviser, including the
Portfolio, participate in a $500 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
Portfolio did not utilize the Facility during the six months ended June 30,
2005.
16
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
NOTE I: DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions to be paid for the year ending December 31,
2005 will be determined at the end of the current fiscal year. The tax
character of distributions paid during the fiscal years ended December 31, 2004
and December 31, 2003 were as follows:
2004 2003
============== ==============
Distributions paid from:
Ordinary income $ 3,469,490 $ 2,588,980
-------------- --------------
Total taxable distributions 3,469,490 2,588,980
-------------- --------------
Total distributions paid $ 3,469,490 $ 2,588,980
============== ==============
As of December 31, 2004, the components of accumulated earnings/(deficit) on a
tax basis were as follows:
Undistributed ordinary income $ 4,127,823
Accumulated capital and other losses (15,087,922)(a)
Unrealized appreciation/(depreciation) 2,612,411(b)
--------------
Total accumulated earnings/(deficit) $ (8,347,688)
==============
(a) On December 31, 2004, the Portfolio had a net capital loss carryforward of
$15,073,878 of which $2,200,265 expires in the year 2007, $5,774,960 expires in
the year 2008, $2,890,265 expires in the year 2009 and $4,208,388 expires in
the year 2010. To the extent future capital gains are offset by capital loss
carryforwards, such gains will not be distributed. Based on certain provisions
in the Internal Revenue Code, various limitations regarding the future
utilization of these carryforwards, brought forward as a result of the
Portfolio's merger with Brinson Series Trust High Income Portfolio, may apply.
Net capital losses and foreign currency losses incurred after October 31, and
within the taxable year are deemed to arise on the first business day of the
Portfolio's next taxable year. For the year ended December 31, 2004, the
Portfolio deferred to January 1, 2005, post-October foreign currency losses of
$14,044. During the current fiscal year, the Portfolio utilized capital loss
carryforwards of $1,006,377.
(b) The difference between book-basis and tax-basis unrealized
appreciation/(depreciation) is attributable primarily to the tax deferral of
losses on wash sales.
NOTE J: LEGAL PROCEEDINGS
As has been previously reported, the staff of the U.S. Securities and Exchange
Commission ("SEC") and the NYAG have been investigating practices in the mutual
fund industry identified as "market timing" and "late trading" of mutual fund
shares. Certain other regulatory authorities have also been conducting
investigations into these practices within the industry and have requested that
the Adviser provide information to them. The Adviser has been cooperating and
will continue to cooperate with all of these authorities.
On December 18, 2003, the Adviser confirmed that it had reached terms with the
SEC and the NYAG for the resolution of regulatory claims relating to the
practice of "market timing" mutual fund shares in some of the AllianceBernstein
Mutual Funds. The agreement with the SEC is reflected in an Order of the
Commission ("SEC Order"). The agreement with the NYAG is memorialized in an
Assurrance of Discontinuance dated September 1, 2004 ("NYAG Order"). Among the
key provisions of these agreements are the following:
(i) The Adviser agreed to establish a $250 million fund (the "Reimbursement
Fund") to compensate mutual fund shareholders for the adverse effects of market
timing attributable to market timing relationships described in the SEC Order.
According to the SEC Order, the Reimbursement Fund is to be paid, in order of
priority, to fund investors based on (i) their aliquot share of losses suffered
by the fund due to market timing, and (ii) a proportionate share of advisory
fees paid by such fund during the period of such market timing;
(ii) The Adviser agreed to reduce the advisory fees it receives from some of
the AllianceBernstein long-term, open-end retail funds until December 31, 2008;
and
(iii) The Adviser agreed to implement changes to its governance and compliance
procedures. Additionally, the SEC Order and the NYAG Order contemplate that the
Adviser's registered investment company clients, including the Fund, will
introduce governance and compliance changes.
17
HIGH YIELD PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
In anticipation of final, definitive documentation of the NYAG Order and
effective January 1, 2004, the Adviser began waiving a portion of its advisory
fee. On September 7, 2004, the Fund's investment advisory agreement was amended
to reflect the reduced advisory fee. For more information on this waiver and
amendment to the Fund's investment advisory agreement, please see "Advisory Fee
and Other Transactions with Affiliates" above.
A special committee of the Adviser's Board of Directors, comprised of the
members of the Adviser's Audit Committee and the other independent member of
the Adviser's Board, is continuing to direct and oversee an internal
investigation and a comprehensive review of the facts and circumstances
relevant to the SEC's and the NYAG's investigations.
In addition, the Independent Directors of the Fund ("the Independent
Directors") have initiated an investigation of the above-mentioned matters with
the advice of an independent economic consultant and independent counsel. The
Independent Directors have formed a special committee to supervise the
investigation.
On October 2, 2003, a putative class action complaint entitled Hindo et al. v.
AllianceBernstein Growth & Income Fund et al. (the "Hindo Complaint") was filed
against the Adviser; Alliance Capital Management Holding L.P.; Alliance Capital
Management Corporation; AXA Financial, Inc.; certain of the AllianceBernstein
Mutual Funds, including the Fund; Gerald Malone; Charles Schaffran
(collectively, the "Alliance Capital defendants"); and certain other defendants
not affiliated with the Adviser. The Hindo Complaint was filed in the United
States District Court for the Southern District of New York by alleged
shareholders of two of the AllianceBernstein Mutual Funds. The Hindo Complaint
alleges that certain of the Alliance Capital defendants failed to disclose that
they improperly allowed certain hedge funds and other unidentified parties to
engage in late trading and market timing of AllianceBernstein Fund securities,
violating Sections 11 and 15 of the Securities Act, Sections 10(b) and 20(a) of
the Exchange Act, and Sections 206 and 215 of the Advisers Act. Plaintiffs seek
an unspecified amount of compensatory damages and rescission of their contracts
with the Adviser, including recovery of all fees paid to the Adviser pursuant
to such contracts.
Since October 2, 2003, numerous additional lawsuits making factual allegations
similar to those in the Hindo Complaint were filed against the Adviser and
certain other defendants, some of which name the Fund as a defendant. All of
these lawsuits seek an unspecified amount of damages. The lawsuits are now
pending in the United States District Court for the District of Maryland
pursuant to a ruling by the Judicial Panel on Multidistrict Litigation
transferring and centralizing all of the mutual fund cases involving market and
late trading in the District of Maryland.
As a result of the matters discussed above, investors in the AllianceBernstein
Mutual Funds may choose to redeem their investments. This may require the
AllianceBernstein Mutual Funds to sell investments held by those funds to
provide for sufficient liquidity and could also have an adverse effect on the
investment performance of the AllianceBernstein Mutual Funds.
The Adviser and approximately twelve other investment management firms were
publicly mentioned in connection with the settlement by the SEC of charges that
an unaffiliated broker/dealer violated federal securities laws relating to its
receipt of compensation for selling specific mutual funds and the disclosure of
such compensation. The SEC indicated publicly that, among other things, it was
considering enforcement action in connection with mutual funds' disclosure of
such arrangements and in connection with the practice of considering mutual
fund sales in the direction of brokerage commissions from fund portfolio
transactions. The SEC issued subpoenas to the Adviser, and the NASD issued
requests for information in connection with this matter and the Adviser
provided documents and other information to the SEC and NASD and cooperated
fully with the investigations. On June 8, 2005 the NASD announced that it had
reached a settlement with the Distributor in connection with this matter.
Management of the Adviser expects that the settlement has resolved both
regulatory inquiries described above.
On June 22, 2004, a purported class action complaint entitled Aucoin, et al. v.
Alliance Capital Management L.P., et al. ("Aucoin Complaint") was filed against
the Adviser, Alliance Capital Management Holding L.P., Alliance Capital
Management Corporation, AXA Financial, Inc., AllianceBernstein Investment
Research & Management, Inc., certain current and former directors of the
AllianceBernstein Mutual Funds, and unnamed Doe defendants. The Aucoin
Complaint names certain of the AllianceBernstein mutual funds as nominal
defendants. The Aucoin Complaint was filed in the United States District Court
for the Southern District of New York by an alleged shareholder of an
AllianceBernstein mutual fund. The Aucoin Complaint alleges, among other
things, (i) that certain of the defendants improperly authorized the payment of
excessive commissions and other fees from fund assets to broker-dealers in
exchange for preferential
18
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
marketing services, (ii) that certain of the defendants misrepresented and
omitted from registration statements and other reports material facts
concerning such payments, and (iii) that certain defendants caused such conduct
as control persons of other defendants. The Aucoin Complaint asserts claims for
violation of Sections 34(b), 36(b) and 48(a) of the Investment Company Act,
Sections 206 and 215 of the Advisers Act, breach of common law fiduciary
duties, and aiding and abetting breaches of common law fiduciary duties.
Plaintiffs seek an unspecified amount of compensatory damages and punitive
damages, rescission of their contracts with the Adviser, including recovery of
all fees paid to the Adviser pursuant to such contracts, an accounting of all
fund-related fees, commissions and soft dollar payments, and restitution of all
unlawfully or discriminatorily obtained fees and expenses.
Since June 22, 2004, numerous additional lawsuits making factual allegations
substantially similar to those in the Aucoin Complaint were filed against the
Adviser and certain other defendants, and others may be filed.
It is possible that these matters and/or other developments resulting from
these matters could result in increased redemptions of the Fund's shares or
other adverse consequences to the Fund. However, the Adviser believes that
these matters are not likely to have a material adverse effect on its ability
to perform advisory services relating to the Fund.
19
HIGH YIELD PORTFOLIO
FINANCIAL HIGHLIGHTS
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
CLASS A
----------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 2005 ---------------------------------------------------------------
(UNAUDITED) 2004 2003 2002 2001(a) 2000
----------- ----------- ----------- ----------- ----------- -----------
Net asset value, beginning of period $7.97 $7.91 $6.83 $7.51 $7.91 $9.14
INCOME FROM INVESTMENT OPERATIONS
Net investment income (b) .30 .60(c) .55 .54(c) .63(c) .74(c)
Net realized and unrealized gain
(loss) on investment and foreign
currency transactions (.25) (.01) .95 (.76) (.38) (1.18)
Net increase (decrease) in net asset
value from operations .05 .59 1.50 (.22) .25 (.44)
LESS: DIVIDENDS
Dividends from net investment income (.67) (.53) (.42) (.46) (.65) (.79)
Net asset value, end of period $7.35 $7.97 $7.91 $6.83 $7.51 $7.91
TOTAL RETURN
Total investment return based on
net asset value (d) .69% 7.98% 22.44% (3.03)% 3.04% (5.15)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $37,928 $42,842 $48,076 $34,765 $31,283 $22,333
Ratio to average net assets of:
Expenses, net of waivers and
reimbursements 1.09%(e) 1.04% 1.46% 1.18% .95% .95%
Expenses, before waivers and
reimbursements 1.09%(e) 1.21% 1.46% 1.45% 1.51% 1.42%
Net investment income 7.61%(e) 7.74%(c) 7.48% 7.78%(c) 8.08%(c) 8.68%(c)
Portfolio turnover rate 28% 80% 105% 83% 95% 175%
See footnote summary on page 21.
20
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
CLASS B
--------------------------------------------------
SIX MONTHS JULY 22,
ENDED YEAR ENDED DECEMBER 31, 2002(f) TO
JUNE 30, 2005 ------------------------ DECEMBER 31,
(UNAUDITED) 2004 2003 2002
----------- ----------- ----------- -----------
Net asset value, beginning of period $7.95 $7.91 $6.84 $6.45
INCOME FROM INVESTMENT OPERATIONS
Net investment income (b) .29 .58(c) .52 .15(c)
Net realized and unrealized gain (loss)
on investment and foreign currency
transactions (.25) (.02) .97 .24
Net increase in net asset value
from operations .04 .56 1.49 .39
LESS: DIVIDENDS
Dividends from net investment income (.65) (.52) (.42) -0-
Net asset value, end of period $7.34 $7.95 $7.91 $6.84
TOTAL RETURN
Total investment return based on
net asset value (d) .58% 7.62% 22.24% 6.05%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $11,708 $12,558 $7,962 $366
Ratio to average net assets of:
Expenses, net of waivers and
reimbursements 1.33%(e) 1.30% 1.70% 1.42%(e)
Expenses, before waivers and
reimbursements 1.33%(e) 1.47% 1.70% 1.63%(e)
Net investment income 7.35%(e) 7.51%(c) 7.19% 8.39%(c)(e)
Portfolio turnover rate 28% 80% 105% 83%
(a) As required, effective January 1, 2001, the Portfolio has adopted the
provisions of the AICPA Audit and Accounting Guide, Audits of Investment
Companies, and began amortizing premium on debt securities. For the year ended
December 31, 2001, the effect of this change was to decrease net investment
income by less than $.01 per share, decrease net realized and unrealized loss
on investments by less than $.01 per share and decrease the ratio of net
investment income to average net assets from 8.14% to 8.08%. Per share ratios
and supplemental data for periods prior to January 1, 2001 have not been
restated to reflect this change in presentation.
(b) Based on average shares outstanding.
(c) Net of expenses waived or reimbursed by the Adviser.
(d) 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 return does not reflect the
deduction of taxes that a shareholder would pay on Portfolio distributions or
the redemption of Portfolio shares. Total investment return calculated for a
period of less than one year is not annualized.
(e) Annualized.
(f) Commencement of distribution.
21
- -------------------------------------------------------------------------------
SEMI-ANNUAL REPORT
- -------------------------------------------------------------------------------
[LOGO] ALLIANCEBERNSTEIN (R)
Investment Research and Management
AllianceBernstein Variable Products Series Fund, Inc.
Semi-Annual Report
June 30, 2005
> AllianceBernstein International Value Portfolio
INVESTMENT PRODUCTS OFFERED
- ---------------------------
> ARE NOT FDIC INSURED
> MAY LOSE VALUE
> ARE NOT BANK GUARANTEED
- ---------------------------
YOU MAY OBTAIN A DESCRIPTION OF THE FUND'S PROXY VOTING POLICIES AND
PROCEDURES, AND INFORMATION REGARDING HOW THE FUND VOTED PROXIES RELATING TO
PORTFOLIO SECURITIES DURING THE MOST RECENT 12-MONTH PERIOD ENDED JUNE 30,
WITHOUT CHARGE. SIMPLY VISIT THE SECURITIES AND EXCHANGE COMMISSION'S (THE
"COMMISSION") WEB SITE AT WWW.SEC.GOV, OR CALL ALLIANCEBERNSTEIN AT (800)
227-4618.
THE FUND FILES ITS COMPLETE SCHEDULE OF PORTFOLIO HOLDINGS WITH THE COMMISSION
FOR THE FIRST AND THIRD QUARTERS OF EACH FISCAL YEAR ON FORM N-Q. THE FUND'S
FORMS N-Q ARE AVAILABLE ON THE COMMISSION'S WEB SITE AT WWW.SEC.GOV. THE FUND'S
FORMS N-Q MAY ALSO BE REVIEWED AND COPIED AT THE COMMISSION'S PUBLIC REFERENCE
ROOM IN WASHINGTON, DC; INFORMATION ON THE OPERATION OF THE PUBLIC REFERENCE
ROOM MAY BE OBTAINED BY CALLING (800) SEC-0330.
INTERNATIONAL VALUE PORTFOLIO
FUND EXPENSES
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including sales charges (loads) on purchase payments, contingent
deferred sales charges on redemptions and (2) ongoing costs, including
management fees; distribution (12b-1) fees; and other Fund expenses. This
example is intended to help you understand your ongoing costs (in dollars) of
investing in the Fund and to compare these costs with the ongoing costs of
investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of
the period and held for the entire period as indicated below.
ACTUAL EXPENSES
The first line of the table below provides information about actual account
values and actual expenses. You may use the information in this line, together
with the amount you invested, to estimate the expenses that you paid over the
period. Simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
in the first line under the heading entitled "Expenses Paid During Period" to
estimate the expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio and an assumed annual rate of return of 5% before expenses, which is not
the Fund's actual return. The hypothetical account values and expenses may not
be used to estimate the actual ending account balance or expenses you paid for
the period. You may use this information to compare the ongoing costs of
investing in the Fund and other funds by comparing this 5% hypothetical example
with the 5% hypothetical examples that appear in the shareholder reports of
other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads), or contingent deferred sales charges on redemptions.
Therefore, the second line of the table is useful in comparing ongoing costs
only, and will not help you determine the relative total costs of owning
different funds. In addition, if these transactional costs were included, your
costs would have been higher.
BEGINNING ENDING
ACCOUNT VALUE ACCOUNT VALUE EXPENSES PAID ANNUALIZED
INTERNATIONAL VALUE PORTFOLIO JANUARY 1, 2005 JUNE 30, 2005 DURING PERIOD* EXPENSE RATIO*
- ---------------------------------------------------------------------------------------------------------------
CLASS A
Actual $1,000 $ 990.75 $4.29 0.87%
Hypothetical (5% return before expenses) $1,000 $1,020.48 $4.36 0.87%
CLASS B
Actual $1,000 $ 989.07 $5.57 1.13%
Hypothetical (5% return before expenses) $1,000 $1,019.19 $5.66 1.13%
* Expenses are equal to each classes' annualized expense ratios, multiplied by
the average account value over the period, multiplied by the number of days in
the most recent fiscal half-year/365 (to reflect the one-half year period).
1
INTERNATIONAL VALUE PORTFOLIO
TEN LARGEST HOLDINGS
JUNE 30, 2005 (UNAUDITED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
PERCENT OF
COMPANY U.S. $ VALUE NET ASSETS
_______________________________________________________________________________
ING Groep N.V. $ 19,210,558 3.8%
- -------------------------------------------------------------------------------
Renault, SA 15,309,143 3.0
- -------------------------------------------------------------------------------
Sanofi-Aventis 13,654,632 2.7
- -------------------------------------------------------------------------------
Sumitomo Mitsui Financial Group, Inc. 13,395,415 2.6
- -------------------------------------------------------------------------------
Arcelor 13,196,424 2.6
- -------------------------------------------------------------------------------
Royal Bank of Scotland Group Plc 12,850,458 2.5
- -------------------------------------------------------------------------------
Honda Motor Co., Ltd. 12,612,631 2.5
- -------------------------------------------------------------------------------
POSCO 12,591,376 2.5
- -------------------------------------------------------------------------------
BP Plc 12,537,871 2.5
- -------------------------------------------------------------------------------
Canon, Inc. 12,495,624 2.5
------------ -----
- -------------------------------------------------------------------------------
$137,854,132 27.2%
- -------------------------------------------------------------------------------
SECTOR DIVERSIFICATION
JUNE 30, 2005 (UNAUDITED)
PERCENT OF
SECTOR U.S. $ VALUE NET ASSETS
_______________________________________________________________________________
Finance $174,596,090 34.5%
- -------------------------------------------------------------------------------
Capital Equipment 63,779,687 12.6
- -------------------------------------------------------------------------------
Energy 61,178,389 12.1
- -------------------------------------------------------------------------------
Industrial Commodities 53,881,056 10.7
- -------------------------------------------------------------------------------
Technology / Electronics 36,583,062 7.2
- -------------------------------------------------------------------------------
Consumer Staples 26,896,368 5.3
- -------------------------------------------------------------------------------
Telecommunications 22,561,259 4.5
- -------------------------------------------------------------------------------
Medical 18,815,954 3.7
- -------------------------------------------------------------------------------
Construction & Housing 12,279,342 2.4
- -------------------------------------------------------------------------------
Utilities 12,184,820 2.4
- -------------------------------------------------------------------------------
Consumer Cyclical 3,698,048 0.7
------------ -----
- -------------------------------------------------------------------------------
Total Investments* 486,454,075 96.1
- -------------------------------------------------------------------------------
Cash and receivables, net of liabilities 19,681,120 3.9
------------ -----
- -------------------------------------------------------------------------------
Net Assets $506,135,195 100.0%
- -------------------------------------------------------------------------------
* Excludes short-term investments.
Please note: The sector classifications presented herein are based on the
sector categorization methodology of the Adviser.
2
INTERNATIONAL VALUE PORTFOLIO
COUNTRY BREAKDOWN
JUNE 30, 2005 (UNAUDITED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
PERCENT OF
COUNTRY U.S. $ VALUE NET ASSETS
_______________________________________________________________________________
United Kingdom $ 92,587,782 18.3%
- -------------------------------------------------------------------------------
France 80,038,821 15.8
- -------------------------------------------------------------------------------
Japan 80,015,851 15.8
- -------------------------------------------------------------------------------
Germany 38,885,234 7.7
- -------------------------------------------------------------------------------
Korea 30,749,593 6.1
- -------------------------------------------------------------------------------
Canada 30,641,965 6.1
- -------------------------------------------------------------------------------
Spain 22,254,865 4.4
- -------------------------------------------------------------------------------
Netherlands 19,210,558 3.8
- -------------------------------------------------------------------------------
Singapore 17,239,887 3.4
- -------------------------------------------------------------------------------
Taiwan 13,511,907 2.7
- -------------------------------------------------------------------------------
Italy 11,190,064 2.2
- -------------------------------------------------------------------------------
Belgium 11,074,044 2.2
- -------------------------------------------------------------------------------
Brazil 9,833,841 1.9
- -------------------------------------------------------------------------------
Switzerland 9,470,147 1.9
- -------------------------------------------------------------------------------
Hungary 5,556,734 1.1
- -------------------------------------------------------------------------------
Other* 14,192,782 2.7
------------ -----
- -------------------------------------------------------------------------------
Total Investments** 486,454,075 96.1
- -------------------------------------------------------------------------------
Cash and receivables, net of liabilities 19,681,120 3.9
------------ -----
- -------------------------------------------------------------------------------
Net Assets $506,135,195 100.0%
- -------------------------------------------------------------------------------
* The Portfolio's country breakdown is expressed as a percentage of net assets
and may vary over time. "Other" represents less than 1% weightings in the
following countries: Israel, Peoples Republic of China, Sweden and Thailand.
** Excludes short-term investments.
3
INTERNATIONAL VALUE PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2005 (UNAUDITED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------------
COMMON STOCKS-96.1%
BELGIUM-2.2%
Delhaize Group 184,889 $ 11,074,044
--------------
BRAZIL-1.9%
Petroleo Brasilerio, SA (ADR) 190,400 8,766,016
Votorantim Celulose e Papel, SA (ADR) 88,250 1,067,825
--------------
9,833,841
--------------
CANADA-6.1%
Alcan, Inc. 167,100 5,016,273
Bank of Nova Scotia 274,568 9,085,037
Canadian Natural Resources Ltd. 182,200 6,602,742
Manulife Financial Corp. 208,100 9,937,913
--------------
30,641,965
--------------
FRANCE-15.8%
Arcelor 676,360 13,196,424
Assurance Generales de France 136,300 11,136,992
BNP Paribas, SA 36,200 2,472,459
Credit Agricole, SA 321,590 8,125,046
European Aeronautic Defense and Space Co. 292,390 9,277,068
Renault, SA 174,300 15,309,143
Sanofi-Aventis 166,727 13,654,632
Societe Generale 67,720 6,867,057
--------------
80,038,821
--------------
GERMANY-7.7%
Continental AG 168,100 12,055,374
Depfa Bank Plc 367,710 5,899,408
Heidelberger Cement AG 70,461 5,064,965
MAN AG 145,100 6,008,576
Muenchener Rueckversicherungs-Gesellschaft AG
(MunichRe) 93,000 9,856,911
--------------
38,885,234
--------------
HUNGARY-1.1%
MOL Magyar Olaj-es Gazipari Rt. 31,600 2,648,188
MOL Magyar Olaj-es Gazipari Rt. (GDR) 34,630 2,908,546
--------------
5,556,734
--------------
ISRAEL-0.8%
Bank Hapoalim Ltd. 990,700 3,112,067
Bank Leumi Le-Israel 372,300 958,046
--------------
4,070,113
--------------
ITALY-2.2%
Eni S.p.A. 435,500 11,190,064
--------------
JAPAN-15.8%
Aiful Corp. 75,950 5,646,979
Canon, Inc. 238,400 12,495,624
Honda Motor Co., Ltd. 256,800 12,612,631
Japan Tobacco, Inc. 857 11,393,164
JFE Holdings, Inc. 399,600 9,821,063
Nissan Motor Co., Ltd. 401,800 3,972,212
Orix Corp. 13,700 2,045,681
Promise Co., Ltd. 81,500 5,203,096
Sumitomo Mitsui Financial Group, Inc. 1,992 13,395,415
UFJ Holdings, Inc. (a) 663 3,429,986
--------------
80,015,851
--------------
KOREA-6.1%
Hyundai Motor Co., Ltd. 82,500 4,544,683
Kookmin Bank (a) 100,000 4,513,140
POSCO 72,300 12,591,376
Samsung Electronics Co., Ltd. 9,480 4,489,684
Shinhan Financial Group Co., Ltd. 178,930 4,610,710
--------------
30,749,593
--------------
NETHERLANDS-3.8%
ING Groep N.V. 683,471 19,210,558
--------------
PEOPLES REPUBLIC OF CHINA-0.8%
China Petroleum Chemical Corp. (Sinopec) 10,930,000 4,260,410
--------------
SINGAPORE-3.4%
Flextronics International Ltd. (a) 460,700 6,085,847
Singapore Telecommunications Ltd. 6,803,643 11,154,040
--------------
17,239,887
--------------
SPAIN-4.4%
Endesa, SA 524,200 12,184,820
Repsol YPF, SA 396,800 10,070,045
--------------
22,254,865
--------------
SWEDEN-0.7%
Svenska Cellulosa AB Cl.B 114,800 3,667,752
--------------
SWITZERLAND-1.9%
Credit Suisse Group 241,600 9,470,147
--------------
TAIWAN-2.7%
Compal Electronics, Inc. (GDR) 1,195,042 5,943,900
Taiwan Semiconductor Manufacturing Co., Ltd.
(ADR) 829,825 7,568,007
--------------
13,511,907
--------------
THAILAND-0.4%
PTT Public Co., Ltd. 416,000 2,194,507
--------------
4
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
SHARES OR
PRINCIPAL
AMOUNT
COMPANY (000) U.S. $ VALUE
- -------------------------------------------------------------------------------
UNITED KINGDOM-18.3%
Aviva Plc 1,049,197 $ 11,650,093
BP Plc 1,205,600 12,537,871
Friends Provident Plc 1,477,510 4,803,140
George Wimpey Plc 336,800 2,642,584
GlaxoSmithKline Plc 213,600 5,161,322
HBOS Plc 670,960 10,315,751
Intercontinental Hotels Group Plc (a) 75,065 945,292
Persimmon Plc 79,131 1,104,828
Royal Bank of Scotland Group Plc 426,800 12,850,458
Tate & Lyle Plc 519,400 4,429,160
Taylor Woodrow Plc 574,800 3,466,965
Vodafone Group Plc 4,691,900 11,407,219
Whitbread Plc 161,914 2,752,756
Xstrata Plc 442,960 8,520,343
--------------
92,587,782
--------------
Total Common Stocks
(cost $423,795,704) 486,454,075
--------------
SHORT-TERM INVESTMENT-4.3%
TIME DEPOSIT-4.3%
The Bank of New York
2.063% 7/01/05
(cost $21,984,000) $ 21,984 21,984,000
--------------
TOTAL INVESTMENTS-100.4%
(cost $445,779,704) 508,438,075
Other assets less liabilities-(0.4%) (2,302,880)
--------------
NET ASSETS-100% $ 506,135,195
==============
FINANCIAL FUTURES CONTRACTS PURCHASED (SEE NOTE D)
VALUE AT
NUMBER OF EXPIRATION ORIGINAL JUNE 30, UNREALIZED
TYPE CONTRACTS MONTH VALUE 2005 APPRECIATION
- -----------------------------------------------------------------------------------------------------
EURO STOXX September
50 Index 142 2005 $5,403,806 $5,495,510 $91,704
(a) Non-income producing security.
Glossary of Terms:
ADR - American Depository Receipt
GDR - Global Depository Receipt
See Notes to Financial Statements.
5
INTERNATIONAL VALUE PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2005 (UNAUDITED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $445,779,704) $508,438,075
Cash 164
Foreign cash, at value (cost $3,223,858) 3,194,686(a)
Receivable for investment securities sold and foreign
currency contracts 4,499,211
Receivable for capital stock sold 1,823,617
Dividends and interest receivable 787,779
Receivable for variation margin on futures contracts 41,242
------------
Total assets 518,784,774
------------
LIABILITIES
Payable for investment securities purchased and foreign
currency contracts 11,951,298
Advisory fee payable 272,466
Foreign capital gain tax payable 151,339
Distribution fee payable 88,834
Administrative fee payable 13,038
Payable for capital stock redeemed 820
Transfer agent fee payable 67
Accrued expenses 171,717
------------
Total liabilities 12,649,579
------------
NET ASSETS $506,135,195
============
COMPOSITION OF NET ASSETS
Capital stock, at par $ 31,491
Additional paid-in capital 434,310,801
Undistributed net investment income 4,799,863
Accumulated net realized gain on investment and foreign
currency transactions 4,325,866
Net unrealized appreciation of investments and foreign
currency denominated assets and liabilities 62,667,174
------------
$506,135,195
============
CLASS A SHARES
Net assets $ 47,980,125
============
Shares of capital stock outstanding 2,969,142
============
Net asset value per share $ 16.16
============
CLASS B SHARES
Net assets $458,155,070
============
Shares of capital stock outstanding 28,521,820
============
Net asset value per share $ 16.06
============
(a) An amount of U.S. $412,536 has been segregated as collateral for the
financial futures contracts outstanding at June 30, 2005.
See Notes to Financial Statements.
6
INTERNATIONAL VALUE PORTFOLIO
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 2005 (UNAUDITED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
INVESTMENT INCOME
Dividends (net of foreign taxes withheld of $973,448) $ 6,940,437
Interest 118,408
------------
Total investment income 7,058,845
------------
EXPENSES
Advisory fee 1,502,806
Distribution fee -- Class B 441,075
Custodian 151,902
Administrative 36,250
Printing 34,488
Audit 20,730
Legal 5,736
Directors' fees 496
Transfer agency 403
Miscellaneous 2,324
------------
Total expenses 2,196,210
------------
Net investment income 4,862,635
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENT AND
FOREIGN CURRENCY TRANSACTIONS
Net realized gain (loss) on:
Investment transactions 4,468,156
Futures 382,244
Foreign currency transactions (371,788)
Net change in unrealized appreciation/depreciation of:
Investments (13,711,761)
Futures 25,570
Foreign currency denominated assets and liabilities (126,347)
------------
Net loss on investment and foreign currency
transactions (9,333,926)
------------
NET DECREASE IN NET ASSETS FROM OPERATIONS $ (4,471,291)
============
See Notes to Financial Statements.
7
INTERNATIONAL VALUE PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 2005 DECEMBER 31,
(UNAUDITED) 2004
============== ==============
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS
Net investment income $ 4,862,635 $ 2,393,006
Net realized gain on investment and
foreign currency transactions 4,478,612 9,024,108
Net change in unrealized appreciation/
depreciation of investments and
foreign currency denominated assets
and liabilities (13,812,538) 44,687,280
-------------- --------------
Net increase (decrease) in net assets
from operations (4,471,291) 56,104,394
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM
Net investment income
Class A (300,646) (191,011)
Class B (2,221,447) (705,496)
Net realized gain on investment and
foreign currency transactions
Class A (817,290) (78,951)
Class B (7,232,618) (352,748)
CAPITAL STOCK TRANSACTIONS
Net increase 189,640,736 132,797,869
-------------- --------------
Total increase 174,597,444 187,574,057
NET ASSETS
Beginning of period 331,537,751 143,963,694
-------------- --------------
End of period (including undistributed
net investment income of $4,799,863 and
$2,459,321, respectively) $ 506,135,195 $ 331,537,751
============== ==============
See Notes to Financial Statements.
8
INTERNATIONAL VALUE PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2005 (UNAUDITED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
NOTE A: SIGNIFICANT ACCOUNTING POLICIES
The AllianceBernstein International Value Portfolio (the "Portfolio") is a
series of AllianceBernstein Variable Products Series Fund, Inc. (the "Fund").
The Portfolio's investment objective is to seek long-term growth of capital.
The Portfolio commenced operations on May 10, 2001. The Fund was incorporated
in the State of Maryland on November 17, 1987, as an open-end series investment
company. The Fund offers twenty-three separately managed pools of assets which
have differing investment objectives and policies. The Portfolio 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.
The Portfolio 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
the Portfolio's net asset value per share.
The financial statements have been prepared in conformity with U.S. generally
accepted accounting principles, which require management to make certain
estimates and assumptions that affect the reported amounts of assets and
liabilities in the financial statements and amounts of income and expenses
during the reporting period. Actual results could differ from those estimates.
Additional information about some of the items discussed in these Notes to
Financial Statements is contained in the Fund's Statement of Additional
Information, which is available upon request. The following is a summary of
significant accounting policies followed by the Portfolio.
1. SECURITY VALUATION
Portfolio securities are valued at their current market value determined on the
basis of market quotations or, if market quotations are not readily available
or are deemed unreliable, at "fair value" as determined in accordance with
procedures established by and under the general supervision of the Fund's Board
of Directors.
In general, the market value of securities which are readily available and
deemed reliable are determined as follows. Securities listed on a national
securities exchange or on a foreign securities exchange are valued at the last
sale price at the close of the exchange or foreign securities exchange. If
there has been no sale on such day, the securities are valued at the mean of
the closing bid and asked prices on such day. Securities listed on more than
one exchange are valued by reference to the principal exchange on which the
securities are traded; securities not listed on an exchange but traded on The
NASDAQ Stock Market, Inc. ("NASDAQ") are valued in accordance with the NASDAQ
Official Closing Price; listed put or call options are valued at the last sale
price. If there has been no sale on that day, such securities will be valued at
the closing bid prices on that day; open futures contracts and options thereon
are valued using the closing settlement price or, in the absence of such a
price, the most recent quoted bid price. If there are no quotations available
for the day of valuation, the last available closing settlement price is used;
securities traded in the over-the-counter market, ("OTC") (but excluding
securities traded on NASDAQ) are valued at the mean of the current bid and
asked prices as reported by the National Quotation Bureau or other comparable
sources; U.S. Government securities and other debt instruments having 60 days
or less remaining until maturity are valued at amortized cost if their original
maturity was 60 days or less; or by amortizing their fair value as of the 61st
day prior to maturity if their original term to maturity exceeded 60 days;
fixed-income securities, including mortgage backed and asset backed securities,
may be valued on the basis of prices provided by a pricing service or at a
price obtained from one or more of the major broker/dealers. In cases where
broker/dealer quotes are obtained, Alliance Capital Management, L.P. (the
"Adviser") may establish procedures whereby changes in market yields or spreads
are used to adjust, on a daily basis, a recently obtained quoted price on a
security; and OTC and other derivatives are valued on the basis of a quoted bid
price or spread from a major broker/dealer in such security.
Securities for which market quotations are not readily available (including
restricted securities) or are deemed unreliable are valued at fair value.
Factors considered in making this determination may include, but are not
limited to, information obtained by contacting the issuer, analysts, analysis
of the issuer's financial statements or other available documents. In addition,
the Fund may use fair value pricing for securities primarily traded in non-U.S.
markets because, most foreign markets close well before the Fund values its
securities at 4:00 p.m., Eastern Time. The earlier close of these foreign
markets gives rise to the possibility that significant events, including broad
market moves, may have occurred in the interim and may materially affect the
value of those securities. To account for this, the Fund may frequently value
many of its foreign equity securities using fair value prices based on third
party vendor modeling tools to the extent available.
9
INTERNATIONAL VALUE PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
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 prices of such currencies against the U.S.
dollar. Purchases and sales of portfolio securities are translated into U.S.
dollars at the rates of exchange prevailing when such securities were acquired
or sold. Income and expenses are translated into U.S. dollars at rates of
exchange prevailing when accrued.
Net realized gain or loss on foreign currency transactions represents foreign
exchange gains and losses from sales and maturities of foreign fixed income
investments, foreign currency exchange contracts, holding of foreign
currencies, currency gains or losses realized between the trade and settlement
dates on foreign investment transactions, and the difference between the
amounts of dividends, interest and foreign withholding taxes recorded on the
Portfolio's books and the U.S. dollar equivalent amounts actually received or
paid. Net unrealized 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 or depreciation of investments
and foreign currency denominated assets and liabilities.
3. TAXES
It is the policy of the Portfolio 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. The Portfolio may be subject to taxes imposed by countries in which
it invests. Such taxes are generally based on income and/or capital gains
earned or repatriated. Taxes are accrued and applied to net investment income,
net realized gains and net unrealized appreciation/depreciation as such income
and/or gains are earned.
4. INVESTMENT INCOME AND INVESTMENT TRANSACTIONS
Dividend income is recorded on the ex-dividend date or as soon as the Portfolio
is informed of the dividend. Interest income is accrued daily. Investment
transactions are accounted for on the trade date securities are purchased or
sold. Investment gains and losses are determined on the identified cost basis.
The Portfolio amortizes premiums and accretes discounts as adjustments to
interest income.
5. INCOME AND EXPENSES
Expenses attributable to a single portfolio are charged to that portfolio.
Expenses of the Fund are charged to each portfolio in proportion to net assets.
All income earned and expenses incurred by a portfolio with multi-class shares
outstanding are borne on a pro-rata basis by each outstanding class of shares,
based on the proportionate interest in the portfolio represented by the net
assets of such class, except that the portfolio's Class B shares bear the
distribution fees.
6. DIVIDENDS AND DISTRIBUTIONS
The Portfolio declares and distributes dividends and distributions from net
investment income and net realized gains, respectively, if any, at least
annually. 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 U.S. generally accepted accounting principles. 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
Until September 6, 2004, under the terms of an investment advisory agreement,
the Portfolio paid the Adviser an advisory fee at an annual rate of 1% of the
Portfolio's average daily net assets. Effective September 7, 2004, the terms
of the investment advisory agreement were amended so that the advisory fee was
reduced to an annual rate of .75% of the first $2.5 billion, .65% of the next
$2.5 billion and .60% in excess of $5 billion, of the Portfolio's average daily
net assets. The fee is accrued daily and paid monthly. The Adviser has agreed
to waive its fees and bear certain expenses to the extent necessary to limit
total operating expenses on an annual basis to 1.20% and 1.45% of the daily
average net assets for Class A and Class B shares, respectively. For the six
months ended June 30, 2005, there were no expenses waived by the Adviser.
10
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
Effective January 1, 2004 through September 6, 2004, in connection with the
Adviser's settlement with the New York Attorney General's Office ("NYAG") the
Adviser began waiving a portion of its advisory fee so as to charge the
Portfolio at the reduced annual rate discussed above. For a more complete
discussion of the Adviser's settlement with the NYAG, please see "Legal
Proceedings" below.
Pursuant to the advisory agreement, the Portfolio paid $36,250 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, 2005.
Brokerage commissions paid on investment transactions for the six months ended
June 30, 2005, amounted to $509,664, of which $16,673 and $0, respectively, was
paid to Sanford C. Bernstein & Co. LLC and Sanford C. Bernstein Limited,
affiliates of the Adviser.
The Portfolio compensates Alliance Global Investor Services, Inc., a
wholly-owned subsidiary of the Adviser, under a Transfer Agency Agreement for
providing personnel and facilities to perform transfer agency services for the
Portfolio. Such compensation amounted to $403 for the six months ended June 30,
2005.
NOTE C: DISTRIBUTION PLAN
The Portfolio has adopted a Distribution Plan (the "Plan") for Class B shares
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the
Plan, the Portfolio pays distribution and servicing fees to AllianceBernstein
Investment Research and Management, Inc. (the "Distributor"), a wholly-owned
subsidiary of the Adviser, at an annual rate of up to .50% of the 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 limits
payments under the Plan to .25% of the Portfolio's average daily net assets
attributable to Class B shares. The Plan provides that the Distributor will use
such payments in their entirety for distribution assistance and promotional
activities.
The Portfolio is not obligated under the Plan to pay any distribution and
servicing fees in excess of the amounts set forth above. The purpose of the
payments to the Distributor under the Plan is to compensate the Distributor for
its distribution services with respect to the sale of the Portfolio's Class B
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 Plan is
characterized by the staff of the Securities and Exchange Commission as being
of the "compensation" variety.
In the event that the Plan is terminated or not continued, no distribution and
servicing fees (other than current amounts accrued but not yet paid) would be
owed by the Portfolio to the Distributor.
The Plan also provides that the Adviser may use its own resources to finance
the distribution of the Portfolio's shares.
NOTE D: INVESTMENT TRANSACTIONS
Purchases and sales of investment securities (excluding short-term investments)
for the six months ended June 30, 2005, were as follows:
PURCHASES SALES
============== ==============
Investment securities
(excluding U.S. government securities) $ 206,663,828 $ 30,941,797
U.S. government securities -0- -0-
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 futures and
foreign currency transactions) are as follows:
Gross unrealized appreciation $ 68,807,049
Gross unrealized depreciation (6,148,678)
--------------
Net unrealized appreciation $ 62,658,371
==============
11
INTERNATIONAL VALUE PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
1. FINANCIAL FUTURES CONTRACTS
The Portfolio may buy or sell financial futures contracts for the purpose of
hedging its portfolio against adverse effects of anticipated movements in the
market. The Portfolio bears the market risk that arises from changes in the
value of these financial instruments and the imperfect correlation between
movements in the price of the futures contracts and movements in the price of
the securities hedged or used for cover.
At the time the Portfolio enters into a futures contract, the Portfolio
deposits and maintains as collateral an initial margin as required by the
exchange on which the transaction is affected. Pursuant to the contract, the
Portfolio agrees to receive from or pay to the broker an amount of cash equal
to the daily fluctuation in the value of the contract. Such receipts or
payments are known as variation margin and are recorded by the Portfolio as
unrealized gains or losses. Risks may arise from the potential inability of a
counterparty to meet the terms of the contract. When the contract is closed,
the Portfolio records a realized gain or loss equal to the difference between
the value of the contract at the time it was opened and the time it was closed.
2. FORWARD EXCHANGE CURRENCY CONTRACTS
The Portfolio may enter into forward exchange currency contracts in order to
hedge its exposure to changes in foreign currency exchange rates on its 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 on a future date at a negotiated forward rate. The gain or loss
arising from the difference between the original contract and the closing of
such contract would be included in net realized gain or loss on foreign
currency transactions.
Fluctuations in the value of open forward exchange currency contracts are
recorded for financial reporting purposes as unrealized appreciation and
depreciation by the Portfolio.
The Portfolio's custodian will place and maintain cash not available for
investment or other liquid assets in a separate account of the Portfolio having
a value at least equal to the aggregate amount of the 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 the Portfolio has in that particular
currency contract.
3. OPTION TRANSACTIONS
For hedging and investment purposes, the Portfolio may purchase and write
(sell) put and call options on U.S. and foreign government securities and
foreign currencies that are traded on U.S. and foreign 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 written options which
expire unexercised are recorded by the Portfolio on the expiration date as
realized gains from options written. 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. If a
put option is exercised, the premium received reduces the cost basis of the
security or currency purchased by the Portfolio. 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.
12
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
NOTE E: CAPITAL STOCK
There are 1,000,000,000 shares of $.001 par value capital stock authorized,
divided into two classes, designated Class A and Class B shares. Each class
consists of 500,000,000 authorized shares. Transactions in capital stock were
as follows:
SHARES AMOUNT
--------------------------- ------------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
JUNE 30, 2005 DECEMBER 31, JUNE 30, 2005 DECEMBER 31,
(UNAUDITED) 2004 (UNAUDITED) 2004
------------ ------------ -------------- --------------
CLASS A
Shares sold 272,574 738,827 $ 4,569,774 $ 10,579,597
Shares issued
in reinvestment
of dividends and
distributions 69,653 19,619 1,117,936 269,962
Shares redeemed (192,980) (290,296) (3,189,694) (4,116,268)
------------ ------------ -------------- --------------
Net increase 149,247 468,150 $ 2,498,016 $ 6,733,291
=========== =========== ============= =============
CLASS B
Shares sold 11,122,967 9,118,920 $ 182,991,779 $ 131,486,643
Shares issued
in reinvestment
of dividends and
distributions 592,360 77,188 9,454,065 1,058,244
Shares redeemed (321,312) (455,690) (5,303,124) (6,480,309)
------------ ------------ -------------- --------------
Net increase 11,394,015 8,740,418 $ 187,142,720 $ 126,064,578
=========== =========== ============= =============
NOTE F: RISKS INVOLVED IN INVESTING IN THE PORTFOLIO
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.
Indemnification Risk--In the ordinary course of business, the Portfolio enters
into contracts that contain a variety of indemnifications. The Portfolio's
maximum exposure under these arrangements is unknown. However, the Portfolio
has not had prior claims or losses pursuant to these indemnification provisions
and expects the risk of loss thereunder to be remote.
NOTE G: JOINT CREDIT FACILITY
A number of open-end mutual funds managed by the Adviser, including the
Portfolio, participate in a $500 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
Portfolio did not utilize the Facility during the six months ended June 30,
2005.
NOTE H: DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions to be paid for the year ending December 31,
2005 will be determined at the end of the current fiscal year. The tax
character of distributions paid during the fiscal years ended December 31, 2004
and December 31, 2003 were as follows:
2004 2003
============== ==============
Distributions paid from:
Ordinary income $ 1,328,206 $ 243,685
-------------- --------------
Total distributions paid $ 1,328,206 $ 243,685
============== ==============
13
INTERNATIONAL VALUE PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
As of December 31, 2004, the components of accumulated earnings/(deficit) on a
tax basis were as follows:
Undistributed ordinary income $ 5,035,013
Undistributed long-term capital gains 5,361,719
Unrealized appreciation/(depreciation) 76,439,463(a)
--------------
Total accumulated earnings/(deficit) $ 86,836,195
==============
(a) The difference between book-basis and tax-basis unrealized
appreciation/(depreciation) is attributable primarily to the tax deferral of
losses on wash sales.
NOTE I: LEGAL PROCEEDINGS
As has been previously reported, the staff of the U.S. Securities and Exchange
Commission ("SEC") and the NYAG have been investigating practices in the mutual
fund industry identified as "market timing" and "late trading" of mutual fund
shares. Certain other regulatory authorities have also been conducting
investigations into these practices within the industry and have requested that
the Adviser provide information to them. The Adviser has been cooperating and
will continue to cooperate with all of these authorities.
On December 18, 2003, the Adviser confirmed that it had reached terms with the
SEC and the NYAG for the resolution of regulatory claims relating to the
practice of "market timing" mutual fund shares in some of the AllianceBernstein
Mutual Funds. The agreement with the SEC is reflected in an Order of the
Commission ("SEC Order"). The agreement with the NYAG is memorialized in an
Assurrance of Discontinuance dated September 1, 2004 ("NYAG Order"). Among the
key provisions of these agreements are the following:
(i) The Adviser agreed to establish a $250 million fund (the "Reimbursement
Fund") to compensate mutual fund shareholders for the adverse effects of market
timing attributable to market timing relationships described in the SEC Order.
According to the SEC Order, the Reimbursement Fund is to be paid, in order of
priority, to fund investors based on (i) their aliquot share of losses suffered
by the fund due to market timing, and (ii) a proportionate share of advisory
fees paid by such fund during the period of such market timing;
(ii) The Adviser agreed to reduce the advisory fees it receives from some of
the AllianceBernstein long-term, open-end retail funds until December 31, 2008;
and
(iii) The Adviser agreed to implement changes to its governance and compliance
procedures. Additionally, the SEC Order and the NYAG Order contemplate that the
Adviser's registered investment company clients, including the Fund, will
introduce governance and compliance changes.
In anticipation of final, definitive documentation of the NYAG Order and
effective January 1, 2004, the Adviser began waiving a portion of its advisory
fee. On September 7, 2004, the Fund's investment advisory agreement was amended
to reflect the reduced advisory fee. For more information on this waiver and
amendment to the Fund's investment advisory agreement, please see "Advisory Fee
and Other Transactions with Affiliates" above.
A special committee of the Adviser's Board of Directors, comprised of the
members of the Adviser's Audit Committee and the other independent member of
the Adviser's Board, is continuing to direct and oversee an internal
investigation and a comprehensive review of the facts and circumstances
relevant to the SEC's and the NYAG's investigations.
In addition, the Independent Directors of the Fund ("the Independent
Directors") have initiated an investigation of the above-mentioned matters with
the advice of an independent economic consultant and independent counsel. The
Independent Directors have formed a special committee to supervise the
investigation.
On October 2, 2003, a putative class action complaint entitled Hindo et al. v.
AllianceBernstein Growth & Income Fund et al. (the "Hindo Complaint") was filed
against the Adviser; Alliance Capital Management Holding L.P.; Alliance Capital
Management Corporation; AXA Financial, Inc.; certain of the AllianceBernstein
Mutual Funds, including the Fund; Gerald Malone; Charles Schaffran
(collectively, the "Alliance Capital defendants"); and certain other defendants
not affiliated with the Adviser. The Hindo Complaint was filed in the United
States District Court for the Southern District of New York by alleged
shareholders of two of the AllianceBernstein Mutual Funds. The Hindo Complaint
alleges that certain of the Alliance Capital defendants failed to disclose that
they improperly allowed certain hedge funds and other unidentified parties to
engage in late trading and market timing of AllianceBernstein Fund securities,
violating Sections
14
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
11 and 15 of the Securities Act, Sections 10(b) and 20(a) of the Exchange Act,
and Sections 206 and 215 of the Advisers Act. Plaintiffs seek an unspecified
amount of compensatory damages and rescission of their contracts with the
Adviser, including recovery of all fees paid to the Adviser pursuant to such
contracts.
Since October 2, 2003, numerous additional lawsuits making factual allegations
similar to those in the Hindo Complaint were filed against the Adviser and
certain other defendants, some of which name the Fund as a defendant. All of
these lawsuits seek an unspecified amount of damages. The lawsuits are now
pending in the United States District Court for the District of Maryland
pursuant to a ruling by the Judicial Panel on Multidistrict Litigation
transferring and centralizing all of the mutual fund cases involving market and
late trading in the District of Maryland.
As a result of the matters discussed above, investors in the AllianceBernstein
Mutual Funds may choose to redeem their investments. This may require the
AllianceBernstein Mutual Funds to sell investments held by those funds to
provide for sufficient liquidity and could also have an adverse effect on the
investment performance of the AllianceBernstein Mutual Funds.
The Adviser and approximately twelve other investment management firms were
publicly mentioned in connection with the settlement by the SEC of charges that
an unaffiliated broker/dealer violated federal securities laws relating to its
receipt of compensation for selling specific mutual funds and the disclosure of
such compensation. The SEC indicated publicly that, among other things, it was
considering enforcement action in connection with mutual funds' disclosure of
such arrangements and in connection with the practice of considering mutual
fund sales in the direction of brokerage commissions from fund portfolio
transactions. The SEC issued subpoenas to the Adviser, and the NASD issued
requests for information in connection with this matter and the Adviser
provided documents and other information to the SEC and NASD and cooperated
fully with the investigations. On June 8, 2005 the NASD announced that it had
reached a settlement with the Distributor in connection with this matter.
Management of the Adviser expects that the settlement has resolved both
regulatory inquiries described above.
On June 22, 2004, a purported class action complaint entitled Aucoin, et al. v.
Alliance Capital Management L.P., et al. ("Aucoin Complaint") was filed against
the Adviser, Alliance Capital Management Holding L.P., Alliance Capital
Management Corporation, AXA Financial, Inc., AllianceBernstein Investment
Research & Management, Inc., certain current and former directors of the
AllianceBernstein Mutual Funds, and unnamed Doe defendants. The Aucoin
Complaint names certain of the AllianceBernstein mutual funds as nominal
defendants. The Aucoin Complaint was filed in the United States District Court
for the Southern District of New York by an alleged shareholder of an
AllianceBernstein mutual fund. The Aucoin Complaint alleges, among other
things, (i) that certain of the defendants improperly authorized the payment of
excessive commissions and other fees from fund assets to broker-dealers in
exchange for preferential marketing services, (ii) that certain of the
defendants misrepresented and omitted from registration statements and other
reports material facts concerning such payments, and (iii) that certain
defendants caused such conduct as control persons of other defendants. The
Aucoin Complaint asserts claims for violation of Sections 34(b), 36(b) and
48(a) of the Investment Company Act, Sections 206 and 215 of the Advisers Act,
breach of common law fiduciary duties, and aiding and abetting breaches of
common law fiduciary duties. Plaintiffs seek an unspecified amount of
compensatory damages and punitive damages, rescission of their contracts with
the Adviser, including recovery of all fees paid to the Adviser pursuant to
such contracts, an accounting of all fund-related fees, commissions and soft
dollar payments, and restitution of all unlawfully or discriminatorily obtained
fees and expenses.
Since June 22, 2004, numerous additional lawsuits making factual allegations
substantially similar to those in the Aucoin Complaint were filed against the
Adviser and certain other defendants, and others may be filed.
It is possible that these matters and/or other developments resulting from
these matters could result in increased redemptions of the Fund's shares or
other adverse consequences to the Fund. However, the Adviser believes that
these matters are not likely to have a material adverse effect on its ability
to perform advisory services relating to the Fund.
15
INTERNATIONAL VALUE PORTFOLIO
FINANCIAL HIGHLIGHTS
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
CLASS A
---------------------------------------------------------------
SIX MONTHS MAY 10, 2001(a)
ENDED YEAR ENDED DECEMBER 31, TO
JUNE 30, 2005 ------------------------------------- DECEMBER 31,
(UNAUDITED) 2004 2003 2002 2001
----------- ----------- ----------- ----------- -----------
Net asset value, beginning of period $16.70 $13.45 $9.35 $9.87 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (b)(c) .20 .20 .13 .13 .04
Net realized and unrealized gain (loss)
on investment and foreign currency
transactions (.36) 3.16 4.01 (.64) (.17)
Net increase (decrease) in net asset
value from operations (.16) 3.36 4.14 (.51) (.13)
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.10) (.08) (.04) (.01) -0-
Distributions from net realized gain
on investment transactions (.28) (.03) -0- -0- -0-
Total dividends and distributions (.38) (.11) (.04) (.01) -0-
Net asset value, end of period $16.16 $16.70 $13.45 $9.35 $9.87
TOTAL RETURN
Total investment return based on
net asset value (d) (.93)% 25.12% 44.36% (5.15)% (1.30)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $47,980 $47,095 $31,628 $14,391 $3,913
Ratio to average net assets of:
Expenses, net of waivers and
reimbursements .87%(e) .95% 1.20% 1.17% .95%(e)
Expenses, before waivers and
reimbursements .87%(e) 1.13% 1.49% 2.20% 8.41%(e)
Net investment income (c) 2.47%(e) 1.42% 1.16% 1.30% .59%(e)
Portfolio turnover rate 8% 23% 14% 19% 22%
See footnote summary on page 17.
16
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
CLASS B
---------------------------------------------------------------
AUGUST 15,
SIX MONTHS 2001(f)
ENDED YEAR ENDED DECEMBER 31, TO
JUNE 30, 2005 ------------------------------------- DECEMBER 31,
(UNAUDITED) 2004 2003 2002 2001
----------- ----------- ----------- ----------- -----------
Net asset value, beginning of period $16.61 $13.39 $9.33 $9.87 $10.25
INCOME FROM INVESTMENT OPERATIONS
Net investment income (b)(c) .20 .15 .08 .08 .01
Net realized and unrealized gain (loss)
on investment and foreign currency
transactions (.38) 3.16 4.01 (.61) (.39)
Net increase (decrease) in net asset
value from operations (.18) 3.31 4.09 (.53) (.38)
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.09) (.06) (.03) (.01) -0-
Distributions from net realized gain
on investment transactions (.28) (.03) -0- -0- -0-
Total dividends and distributions (.37) (.09) (.03) (.01) -0-
Net asset value, end of period $16.06 $16.61 $13.39 $9.33 $9.87
TOTAL RETURN
Total investment return based on
net asset value (d) (1.09)% 24.86% 43.95% (5.36)% (3.71)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $458,155 $284,443 $112,336 $26,133 $1,828
Ratio to average net assets of:
Expenses, net of waivers and
reimbursements 1.13%(e) 1.20% 1.45% 1.44% 1.20%(e)
Expenses, before waivers and
reimbursements 1.13%(e) 1.38% 1.74% 2.47% 9.31%(e)
Net investment income (c) 2.42%(e) 1.07% .38% .86% .17%(e)
Portfolio turnover rate 8% 23% 14% 19% 22%
(a) Commencement of operations.
(b) Based on average shares outstanding.
(c) Net of expenses reimbursed or waived by the Adviser.
(d) 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 return does not reflect the
deduction of taxes that a shareholder would pay on Portfolio distributions or
the redemption of Portfolio shares. Total investment return calculated for a
period of less than one year is not annualized.
(e) Annualized.
(f) Commencement of distribution.
17
[LOGO] ALLIANCEBERNSTEIN (R)
Investment Research and Management
AllianceBernstein
Variable Products Series Fund, Inc.
Semi-Annual Report
June 30, 2005
> AllianceBernstein Small/Mid Cap Value Portfolio
SEMI-ANNUAL REPORT
INVESTMENT PRODUCTS OFFERED
> ARE NOT FDIC INSURED
> MAY LOSE VALUE
> ARE NOT BANK GUARANTEED
YOU MAY OBTAIN A DESCRIPTION OF THE FUND'S PROXY VOTING POLICIES AND
PROCEDURES, AND INFORMATION REGARDING HOW THE FUND VOTED PROXIES RELATING TO
PORTFOLIO SECURITIES DURING THE MOST RECENT 12-MONTH PERIOD ENDED JUNE 30,
WITHOUT CHARGE. SIMPLY VISIT THE SECURITIES AND EXCHANGE COMMISSION'S (THE
"COMMISSION") WEB SITE AT WWW.SEC.GOV, OR CALL ALLIANCEBERNSTEIN AT (800)
227-4618.
THE FUND FILES ITS COMPLETE SCHEDULE OF PORTFOLIO HOLDINGS WITH THE COMMISSION
FOR THE FIRST AND THIRD QUARTERS OF EACH FISCAL YEAR ON FORM N-Q. THE FUND'S
FORMS N-Q ARE AVAILABLE ON THE COMMISSION'S WEB SITE AT WWW.SEC.GOV. THE FUND'S
FORMS N-Q MAY ALSO BE REVIEWED AND COPIED AT THE COMMISSION'S PUBLIC REFERENCE
ROOM IN WASHINGTON, DC; INFORMATION ON THE OPERATION OF THE PUBLIC REFERENCE
ROOM MAY BE OBTAINED BY CALLING (800) SEC-0330.
SMALL/MID CAP VALUE PORTFOLIO
FUND EXPENSES
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including sales charges (loads) on purchase payments, contingent
deferred sales charges on redemptions and (2) ongoing costs, including
management fees; distribution (12b-1) fees; and other Fund expenses. This
example is intended to help you understand your ongoing costs (in dollars) of
investing in the Fund and to compare these costs with the ongoing costs of
investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of
the period and held for the entire period as indicated below.
Actual Expenses
The first line of the table below provides information about actual account
values and actual expenses. You may use the information in this line, together
with the amount you invested, to estimate the expenses that you paid over the
period. Simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
in the first line under the heading entitled "Expenses Paid During Period" to
estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio and an assumed annual rate of return of 5% before expenses, which is not
the Fund's actual return. The hypothetical account values and expenses may not
be used to estimate the actual ending account balance or expenses you paid for
the period. You may use this information to compare the ongoing costs of
investing in the Fund and other funds by comparing this 5% hypothetical example
with the 5% hypothetical examples that appear in the shareholder reports of
other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads), or contingent deferred sales charges on redemptions.
Therefore, the second line of the table is useful in comparing ongoing costs
only, and will not help you determine the relative total costs of owning
different funds. In addition, if these transactional costs were included, your
costs would have been higher.
Beginning Ending
Account Value Account Value Expenses Paid Annualized
Small/Mid Cap Value Portfolio January 1, 2005 June 30, 2005 During Period* Expense Ratio*
- ----------------------------- --------------- ------------- -------------- --------------
Class A
Actual $1,000 $1,015.22 $4.40 0.88%
Hypothetical (5% return before expenses) $1,000 $1,020.43 $4.41 0.88%
Class B
Actual $1,000 $1,013.59 $5.64 1.13%
Hypothetical (5% return before expenses) $1,000 $1,019.19 $5.66 1.13%
* Expenses are equal to each classes' annualized expense ratios, multiplied
by the average account value over the period, multiplied by the number of days
in the most recent fiscal half-year/365 (to reflect the one-half year period).
1
SMALL/MID CAP VALUE PORTFOLIO
TEN LARGEST HOLDINGS
June 30, 2005 (unaudited)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
PERCENT OF
COMPANY U.S. $ VALUE NET ASSETS
- -------------------------------------------------------------------------------
Owens & Minor, Inc. $ 5,713,010 2.0%
Pulte Homes, Inc. 5,577,350 2.0
Payless ShoeSource, Inc. 5,543,040 2.0
Office Depot, Inc. 5,239,496 1.9
Beazer Homes USA, Inc. 5,092,065 1.8
A.G. Edwards, Inc. 5,047,769 1.8
URS Corp. 4,900,320 1.7
BJ's Wholesale Club, Inc. 4,854,006 1.7
Jones Apparel Group, Inc. 4,665,312 1.6
Moog, Inc. Cl.A 4,638,477 1.6
----------- -----
$51,270,845 18.1%
SECTOR DIVERSIFICATION
June 30, 2005 (unaudited)
_______________________________________________________________________________
PERCENT OF
SECTOR U.S. $ VALUE NET ASSETS
- -------------------------------------------------------------------------------
Financial $ 56,572,448 20.0%
Consumer Cyclicals 47,381,946 16.8
Capital Equipment 33,615,084 11.9
Consumer Growth 22,451,071 7.9
Non-Financial 21,043,989 7.5
Technology 16,742,084 5.9
Commodities 14,711,494 5.2
Services 14,160,433 5.0
Utilities 13,335,709 4.7
Consumer Staples 12,958,292 4.6
Energy 9,047,324 3.2
Industrial Resources 8,463,718 3.0
------------ ------
Total Investments* 270,483,592 95.7
Cash and receivables, net of liabilities 12,069,420 4.3
------------ ------
Net Assets $282,553,012 100.0%
* Excludes short-term investments.
Please Note: The sector classifications presented herein are based on the
sector categorization methodology of the Adviser.
2
SMALL/MID CAP VALUE PORTFOLIO
PORTFOLIO OF INVESTMENTS
June 30, 2005 (unaudited)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
Company Shares U.S. $ Value
- -------------------------------------------------------------------------------
COMMON STOCKS-95.7%
FINANCIAL-20.0%
MAJOR REGIONAL BANKS-5.2%
Central Pacific Financial Corp. 101,900 $ 3,627,640
Hibernia Corp. Cl. A 86,300 2,863,434
Popular, Inc. 92,000 2,317,480
TD Banknorth, Inc. 16,660 496,468
UnionBanCal Corp. 45,900 3,071,628
Whitney Holding Corp. 72,000 2,349,360
------------
14,726,010
MULTI-LINE INSURANCE-1.9%
PacifiCare Health Systems, Inc. (a) 31,000 2,214,950
StanCorp Financial Group, Inc. 41,500 3,178,070
------------
5,393,020
PROPERTY - CASUALTY INSURANCE-4.5%
Old Republic International Corp. 148,700 3,760,623
PartnerRe Ltd. (Bermuda) 17,700 1,140,234
Platinum Underwriters Holdings, Ltd. 122,000 3,882,040
Radian Group, Inc. 84,600 3,994,812
------------
12,777,709
REAL ESTATE INVESTMENT TRUST-0.4%
FelCor Lodging Trust, Inc. (a) 70,000 1,013,600
SAVINGS AND LOAN-6.2%
Astoria Financial Corp. 135,900 3,869,073
Commercial Federal Corp. 110,700 3,728,376
MAF Bancorp, Inc. 105,295 4,488,726
Sovereign Bancorp, Inc. 135,000 3,015,900
Washington Federal, Inc. 106,814 2,512,265
------------
17,614,340
MISCELLANEOUS FINANCIAL-1.8%
A.G. Edwards, Inc. 111,800 5,047,769
------------
56,572,448
CONSUMER CYCLICALS-16.8%
AUTOS & AUTO PARTS-3.0%
American Axle & Manufacturing
Holdings, Inc. 82,000 2,072,140
BorgWarner, Inc. 42,000 2,254,140
Dana Corp. 175,300 2,631,253
Group 1 Automotive, Inc. (a) 56,510 1,358,500
------------
8,316,033
RETAILERS-8.7%
AutoNation, Inc. (a) 163,400 3,352,968
BJ's Wholesale Club, Inc. (a) 149,400 4,854,006
Borders Group, Inc. 156,100 3,950,891
Federated Department Stores, Inc. 23,800 1,744,064
Office Depot, Inc. (a) 229,400 5,239,496
Payless ShoeSource, Inc. (a) 288,700 5,543,040
------------
24,684,465
TEXTILES/SHOES - APPAREL MFG.-4.6%
Jones Apparel Group, Inc. 150,300 4,665,312
Liz Claiborne, Inc. 108,100 4,298,056
Reebok International Ltd. 32,200 1,346,926
V.F. Corp. 44,500 2,546,290
------------
12,856,584
MISCELLANEOUS CONSUMER CYCLICALS-0.5%
Brunswick Corp. 35,200 1,524,864
------------
47,381,946
CAPITAL EQUIPMENT-11.9%
AEROSPACE - DEFENSE-1.5%
Goodrich Corp. 103,500 4,239,360
AUTO TRUCKS - PARTS-2.9%
ArvinMeritor, Inc. 181,800 3,234,222
Modine Manufacturing Co. 68,200 2,220,592
PACCAR, Inc. 34,500 2,346,000
TRW Automotive Holdings Corp. (a) 19,100 468,141
------------
8,268,955
ELECTRICAL EQUIPMENT-1.6%
Anixter International, Inc. 51,600 1,917,972
Cooper Industries Ltd. Cl. A (Bermuda) 42,200 2,696,580
------------
4,614,552
MACHINERY-3.9%
Lincoln Electric Holdings, Inc. 62,000 2,055,300
Moog, Inc. Cl. A (a) 147,300 4,638,477
Terex Corp. (a) 106,800 4,207,920
------------
10,901,697
MISCELLANEOUS CAPITAL GOODS-2.0%
Parker-Hannifin Corp. 34,500 2,139,345
Textron, Inc. 45,500 3,451,175
------------
5,590,520
------------
33,615,084
3
SMALL/MID CAP VALUE PORTFOLIO
PORTFOLIO OF INVESTMENTS
(continued)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
Company Shares U.S. $ Value
- -------------------------------------------------------------------------------
CONSUMER GROWTH-7.9%
HOSPITAL MANAGEMENT-1.6%
Universal Health Services, Inc. Cl. B 70,900 $ 4,408,562
HOSPITAL SUPPLIES-2.0%
Owens & Minor, Inc. 176,600 5,713,010
OTHER MEDICAL-1.0%
PerkinElmer, Inc. 149,000 2,816,100
PHOTOGRAPHY-1.0%
IKON Office Solutions, Inc. 302,900 2,880,579
PUBLISHING-0.6%
The Readers Digest Association, Inc. 105,000 1,732,500
MISCELLANEOUS CONSUMER GROWTH-1.7%
URS CORP. (a) 131,200 4,900,320
------------
22,451,071
NON-FINANCIAL-7.5%
BUIDING MATERIALS - CEMENT-0.6%
Texas Industries, Inc. 30,300 1,703,769
BUILDING MATERIALS - HEAT/PLUMBING/AIR-0.9%
Hughes Supply, Inc. 94,000 2,641,400
HOME BUILDING-2.0%
Pulte Homes, Inc. 66,200 5,577,350
MISCELLANEOUS BUILDING-4.0%
Beazer Homes USA, Inc. 89,100 5,092,065
Harsco Corp. 35,500 1,936,525
Quanta Services, Inc. (a) 465,100 4,092,880
------------
11,121,470
------------
21,043,989
TECHNOLOGY-5.9%
COMMUNICATION - EQUIP. MFRS.-2.9%
ADC Telecommunications, Inc. (a) 90,857 1,977,957
Andrew Corp.(a) 307,900 3,928,804
Nortel Networks Corp. (Canada) (a) 316,100 825,021
Tellabs, Inc. (a) 157,000 1,365,900
------------
8,097,682
COMPUTER/INSTRUMENTATION-0.8%
Sanmina-SCI Corp. (a) 411,679 2,251,884
SEMICONDUCTORS-1.0%
Vishay Intertechnology, Inc. (a) 237,100 2,814,377
MISCELLANEOUS INDUSTRIAL TECHNOLOGY-1.2%
Arrow Electronics, Inc. (a) 21,000 570,360
Avnet, Inc. (a) 22,000 495,660
Solectron Corp. (a) 107,400 407,046
Tech Data Corp. (a) 57,500 2,105,075
------------
3,578,141
------------
16,742,084
COMMODITIES-5.2%
CHEMICALS-2.4%
Albemarle Corp. 34,500 1,258,215
Crompton Corp. 133,200 1,884,780
Cytec Industries, Inc. 88,600 3,526,280
------------
6,669,275
CONTAINERS - METAL/GLASS/PAPER-0.5%
Ball Corp. 43,000 1,546,280
MISCELLANEOUS INDUSTRIAL COMMODITIES-1.2%
United Stationers, Inc. (a) 70,995 3,485,855
MISCELLANEOUS METALS-1.1%
Reliance Steel & Aluminum Co. 81,200 3,010,084
------------
14,711,494
SERVICES-5.0%
RAILROADS-1.4 %
Laidlaw International, Inc. 171,700 4,137,970
TRUCKERS-1.1%
CNF, Inc. 67,425 3,027,383
MISCELLANEOUS INDUSTRIAL TRANSPORTATION-2.5%
GATX Corp. 118,700 4,095,150
SEACOR Holdings, Inc. (a) 45,100 2,899,930
------------
6,995,080
------------
14,160,433
4
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
Company Shares U.S. $ Value
- -------------------------------------------------------------------------------
UTILITIES-4.7%
ELECTRICAL COMPANIES-4.7%
Constellation Energy Group, Inc. 41,000 $ 2,365,290
Northeast Utilities 129,200 2,695,112
PNM Resources, Inc. 96,300 2,774,403
Puget Energy, Inc. 120,800 2,824,304
Wisconsin Energy Corp. 36,900 1,439,100
WPS Resources Corp. 22,000 1,237,500
------------
13,335,709
CONSUMER STAPLES-4.6%
FOODS-3.2%
Corn Products International, Inc. 66,000 1,568,160
Del Monte Foods Co. (a) 322,600 3,474,402
Universal Corp. 93,500 4,093,430
------------
9,135,992
RESTAURANTS-1.0%
Jack in the Box, Inc. (a) 75,000 2,844,000
RETAIL STORES - FOOD-0.4%
SUPERVALU, Inc. 30,000 978,300
------------
12,958,292
ENERGY-3.2%
OFFSHORE DRILLING-1.5%
Rowan Companies, Inc. (a) 140,000 4,159,400
OILS - INTEGRATED DOMESTIC-1.7%
Amerada Hess Corp. 16,400 1,746,764
Pogo Producing Co. 60,500 3,141,160
------------
4,887,924
------------
9,047,324
Shares or
Principal
Amount
Company (000) U.S. $ Value
- -------------------------------------------------------------------------------
INDUSTRIAL RESOURCES-3.0%
ALUMINUM-0.7%
Mueller Industries, Inc. 75,000 $ 2,032,500
STEEL-1.2%
United States Steel Corp. 100,000 3,437,000
MISCELLANEOUS METALS-1.1%
Silgan Holdings, Inc. 53,240 2,994,218
------------
8,463,718
Total Common Stocks
(cost $223,465,524) 270,483,592
SHORT-TERM INVESTMENT-3.2%
TIME DEPOSIT-3.2%
The Bank of New York
2.063%, 7/01/05
(cost $9,073,000) $ 9,073 9,073,000
TOTAL INVESTMENTS-98.9%
(cost $232,538,524) 279,556,592
Other assets less liabilities-1.1% 2,996,420
NET ASSETS-100% $ 282,553,012
(a) Non-income producing security.
See Notes to Financial Statements.
5
SMALL/MID CAP VALUE PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2005 (unaudited)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $232,538,524) $ 279,556,592
Cash 735
Receivable for capital stock sold 1,855,405
Receivable for investment securities sold 1,560,872
Dividends and interest receivable 229,246
Total assets 283,202,850
LIABILITIES
Payable for investment securities purchased 203,464
Advisory fee payable 169,749
Payable for capital stock redeemed 99,321
Distribution fee payable 32,105
Administrative fee payable 13,038
Transfer agent fee payable 67
Accrued expenses 132,094
Total liabilities 649,838
NET ASSETS $ 282,553,012
COMPOSITION OF NET ASSETS
Capital stock, at par $ 17,471
Additional paid-in capital 225,942,029
Undistributed net investment income 262,315
Accumulated net realized gain on investment transactions 9,313,129
Net unrealized appreciation of investments 47,018,068
$ 282,553,012
Class A Shares
Net assets $ 122,438,848
Shares of capital stock outstanding 7,557,949
Net asset value per share $ 16.20
Class B Shares
Net assets $ 160,114,164
Shares of capital stock outstanding 9,913,088
Net asset value per share $ 16.15
See Notes to Financial Statements.
6
SMALL/MID CAP VALUE PORTFOLIO
STATEMENT OF OPERATIONS
Six Months Ended June 30, 2005 (unaudited)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
INVESTMENT INCOME
Dividends (net of foreign taxes withheld of $3,325) $ 1,527,326
Interest 96,342
Total investment income 1,623,668
EXPENSES
Advisory fee 979,739
Distribution fee--Class B 181,780
Custodian 72,883
Administrative 36,250
Printing 28,819
Audit 20,730
Legal 4,884
Directors' fees 496
Transfer agency 403
Miscellaneous 1,850
Total expenses 1,327,834
Net investment income 295,834
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENT TRANSACTIONS
Net realized gain on investment transactions 9,413,171
Net change in unrealized appreciation/depreciation
of investments (5,486,976)
Net gain on investment transactions 3,926,195
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 4,222,029
See Notes to Financial Statements.
7
SMALL/MID CAP VALUE PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
Six Months Ended Year Ended
June 30, 2005 December 31,
(unaudited) 2004
--------------- ---------------
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS
Net investment income $ 295,834 $ 1,760,970
Net realized gain on investment
transactions 9,413,171 12,197,879
Net change in unrealized
appreciation/depreciation of
investments (5,486,976) 25,133,503
Net increase in net assets from
operations 4,222,029 39,092,352
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM
Net investment income
Class A (876,310) (181,706)
Class B (892,522) (80,321)
Net realized gain on investment
transactions
Class A (5,292,917) (2,336,222)
Class B (6,946,948) (2,409,632)
CAPITAL STOCK TRANSACTIONS
Net increase 30,843,163 53,508,942
Total increase 21,056,495 87,593,413
NET ASSETS
Beginning of period 261,496,517 173,903,104
End of period (including undistributed
net investment income of $262,315 and
$1,735,313, respectively) $ 282,553,012 $ 261,496,517
See Notes to Financial Statements.
8
SMALL/MID CAP VALUE PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
June 30, 2005 (unaudited)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
NOTE A: Significant Accounting Policies
The AllianceBernstein Small/Mid Cap Value Portfolio (the "Portfolio"), formerly
AllianceBernstein Small Cap Value Portfolio, is a series of AllianceBernstein
Variable Products Series Fund, Inc. (the "Fund"). The Portfolio's investment
objective is to seek long-term growth of capital. The Fund was incorporated in
the State of Maryland on November 17, 1987, as an open-end series investment
company. The Fund offers twenty-three separately managed pools of assets which
have differing investment objectives and policies. The Portfolio commenced
operations on May 1, 2001. The Portfolio 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.
The Portfolio 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
the Portfolio's net asset value per share.
The financial statements have been prepared in conformity with U.S. generally
accepted accounting principles, which require management to make certain
estimates and assumptions that affect the reported amounts of assets and
liabilities in the financial statements and amounts of income and expenses
during the reporting period. Actual results could differ from those estimates.
Additional information about some of the items discussed in these Notes to
Financial Statements is contained in the Fund's Statement of Additional
Information, which is available upon request. The following is a summary of
significant accounting policies followed by the Portfolio.
1. Security Valuation
Portfolio securities are valued at their current market value determined on the
basis of market quotations or, if market quotations are not readily available
or are deemed unreliable, at "fair value" as determined in accordance with
procedures established by and under the general supervision of the Fund's Board
of Directors.
In general, the market value of securities which are readily available and
deemed reliable are determined as follows. Securities listed on a national
securities exchange or on a foreign securities exchange are valued at the last
sale price at the close of the exchange or foreign securities exchange. If
there has been no sale on such day, the securities are valued at the mean of
the closing bid and asked prices on such day. Securities listed on more than
one exchange are valued by reference to the principal exchange on which the
securities are traded; securities not listed on an exchange but traded on The
NASDAQ Stock Market, Inc. ("NASDAQ") are valued in accordance with the NASDAQ
Official Closing Price; listed put or call options are valued at the last sale
price. If there has been no sale on that day, such securities will be valued at
the closing bid prices on that day; open futures contracts and options thereon
are valued using the closing settlement price or, in the absence of such a
price, the most recent quoted bid price. If there are no quotations available
for the day of valuation, the last available closing settlement price is used;
securities traded in the over-the-counter market, ("OTC") (but excluding
securities traded on NASDAQ) are valued at the mean of the current bid and
asked prices as reported by the National Quotation Bureau or other comparable
sources; U.S. Government securities and other debt instruments having 60 days
or less remaining until maturity are valued at amortized cost if their original
maturity was 60 days or less; or by amortizing their fair value as of the 61st
day prior to maturity if their original term to maturity exceeded 60 days;
fixed-income securities, including mortgage backed and asset backed securities,
may be valued on the basis of prices provided by a pricing service or at a
price obtained from one or more of the major broker/dealers. In cases where
broker/dealer quotes are obtained, Alliance Capital Management, L.P. (the
"Adviser") may establish procedures whereby changes in market yields or spreads
are used to adjust, on a daily basis, a recently obtained quoted price on a
security; and OTC and other derivatives are valued on the basis of a quoted bid
price or spread from a major broker/dealer in such security.
Securities for which market quotations are not readily available (including
restricted securities) or are deemed unreliable are valued at fair value.
Factors considered in making this determination may include, but are not
limited to, information obtained by contacting the issuer, analysts, analysis
of the issuer's financial statements or other available documents. In addition,
the Fund may use fair value pricing for securities primarily traded in non-U.S.
markets because, most foreign markets close well before the Fund values its
securities at 4:00 p.m., Eastern Time. The earlier close of these foreign
markets gives rise to the possibility that significant events, including broad
market moves, may have occurred in the interim and may materially affect the
value of those securities. To account for this, the Fund may frequently value
many of its foreign equity securities using fair value prices based on third
party vendor modeling tools to the extent available.
9
SMALL/MID CAP VALUE PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(continued)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
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 prices of such currencies against the U.S.
dollar. Purchases and sales of portfolio securities are translated into U.S.
dollars at the rates of exchange prevailing when such securities were acquired
or sold. Income and expenses are translated into U.S. dollars at rates of
exchange prevailing when accrued.
Net realized gain or loss on foreign currency transactions represents foreign
exchange gains and losses from sales and maturities of foreign fixed income
investments, foreign currency exchange contracts, holding of foreign
currencies, currency gains or losses realized between the trade and settlement
dates on foreign investment transactions, and the difference between the
amounts of dividends, interest and foreign withholding taxes recorded on the
Portfolio's books and the U.S. dollar equivalent amounts actually received or
paid. Net unrealized 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 or depreciation of investments
and foreign currency denominated assets and liabilities.
3. Taxes
It is the policy of the Portfolio 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. The Portfolio may be subject to taxes imposed by countries in which
it invests. Such taxes are generally based on income and/or capital gains
earned or repatriated. Taxes are accrued and applied to net investment income,
net realized gains and net unrealized appreciation/depreciation as such income
and/or gains are earned.
4. Investment Income and Investment Transactions
Dividend income is recorded on the ex-dividend date or as soon as the Portfolio
is informed of the dividend. Interest income is accrued daily. Investment
transactions are accounted for on the trade date securities are purchased or
sold. Investment gains and losses are determined on the identified cost basis.
The Portfolio amortizes premiums and accretes discounts as adjustments to
interest income.
5. Income and Expenses
Expenses attributable to a single portfolio are charged to that portfolio.
Expenses of the Fund are charged to each portfolio in proportion to net assets.
All income earned and expenses incurred by a portfolio with multi-class shares
outstanding are borne on a pro-rata basis by each outstanding class of shares,
based on the proportionate interest in the portfolio represented by the net
assets of such class, except that the portfolio's Class B shares bear the
distribution fees.
6. Dividends and Distributions
The Portfolio declares and distributes dividends and distributions from net
investment income and net realized gains, respectively, if any, at least
annually. 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 U.S. generally accepted accounting principles. 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
Until September 6, 2004, under the terms of an investment advisory agreement,
the Portfolio paid the Adviser an advisory fee at an annual rate of 1% of the
Portfolio's average daily net assets. Effective September 7, 2004, the terms of
the investment advisory agreement were amended so that the advisory fee was
reduced to an annual rate of .75% of the first $2.5 billion, .65% of the next
$2.5 billion and .60% in excess of $5 billion, of the Portfolio's average daily
net assets. The fee is accrued daily and paid monthly. The Adviser has agreed
to waive its fees and bear certain expenses to the extent necessary to limit
total operating expenses on an annual basis to 1.20% and 1.45% of the daily
average net assets for Class A and Class B shares, respectively. For the six
months ended June 30, 2005, there were no expenses waived by the Adviser.
10
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
Effective January 1, 2004 through September 6, 2004, in connection with the
Adviser's settlement with the New York Attorney General's Office ("NYAG") the
Adviser began waiving a portion of its advisory fee so as to charge the
Portfolio at the reduced annual rate discussed above. For a more complete
discussion of the Adviser's settlement with the NYAG, please see "Legal
Proceedings" below.
Pursuant to the advisory agreement, the Portfolio paid $36,250 to the Adviser
representing the cost of certain legal and accounting services provided to the
Adviser for the six months ended June 30, 2005.
Brokerage commissions paid on investment transactions for the six months ended
June 30, 2005, amounted to $101,946, of which $33,260 and $0, respectively, was
paid to Sanford C. Bernstein & Co. LLC and Sanford C.Bernstein Limited,
affiliates of the Adviser.
The Portfolio compensates Alliance Global Investor Services, Inc., a
wholly-owned subsidiary of the Adviser, under a Transfer Agency Agreement for
providing personnel and facilities to perform transfer agency services for the
Portfolio. Such compensation amounted to $403 for the six months ended June 30,
2005.
NOTE C: Distribution Plan
The Portfolio has adopted a Distribution Plan (the "Plan") for Class B shares
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the
Plan, the Portfolio pays distribution and servicing fees to AllianceBernstein
Investment Research and Management, Inc. (the "Distributor"), a wholly-owned
subsidiary of the Adviser, at an annual rate of up to .50% of the 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 limits
payments under the Plan to .25% of the Portfolio's average daily net assets
attributable to Class B shares. The Plan provides that the Distributor will use
such payments in their entirety for distribution assistance and promotional
activities.
The Portfolio is not obligated under the Plan to pay any distribution and
servicing fees in excess of the amounts set forth above. The purpose of the
payments to the Distributor under the Plan is to compensate the Distributor for
its distribution services with respect to the sale of the Portfolio's Class B
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 Plan is
characterized by the staff of the Securities and Exchange Commission as being
of the "compensation" variety.
In the event that the Plan is terminated or not continued, no distribution and
servicing fees (other than current amounts accrued but not yet paid) would be
owed by the Portfolio to the Distributor.
The Plan also provides that the Adviser may use its own resources to finance
the distribution of the Portfolio's shares.
NOTE D: Investment Transactions
Purchases and sales of investment securities (excluding short-term investments)
for the six months ended June 30, 2005, were as follows:
Purchases Sales
------------ ------------
Investment securities (excluding U.S.
government securities) $ 54,857,545 $ 35,424,979
U.S. government securities -0- -0-
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 $ 53,032,757
Gross unrealized depreciation (6,014,689)
Net unrealized appreciation $ 47,018,068
11
SMALL/MID CAP VALUE PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(continued)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
1. Forward Exchange Currency Contracts
The Portfolio may enter into forward exchange currency contracts in order to
hedge its exposure to changes in foreign currency exchange rates on its 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 on a future date at a negotiated forward rate. The gain or loss
arising from the difference between the original contract and the closing of
such contract would be included in net realized gain or loss on foreign
currency transactions.
Fluctuations in the value of open forward exchange currency contracts are
recorded for financial reporting purposes as net unrealized appreciation or
depreciation by the Portfolio.
The Portfolio's custodian will place and maintain cash not available for
investment or other liquid assets in a separate account of the Portfolio having
a value at least equal to the aggregate amount of the 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 the Portfolio has in that particular
currency contract.
2. Option Transactions
For hedging and investment purposes, the Portfolio may purchase and write
(sell) put and call options on U.S. and foreign government securities and
foreign currencies that are traded on U.S. and foreign 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 written options which
expire unexercised are recorded by the Portfolio on the expiration date as
realized gains from options written. 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. If a
put option is exercised, the premium received reduces the cost basis of the
security or currency purchased by the Portfolio. 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.
12
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
NOTE E: Capital Stock
There are 1,000,000,000 shares of $.001 par value capital stock authorized,
divided into two classes, designated Class A and Class B shares. Each class
consists of 500,000,000 authorized shares. Transactions in capital stock were
as follows:
SHARES AMOUNT
--------------------------- ------------------------------
Six Months Ended Year Ended Six Months Ended Year Ended
June 30, 2005 December 31, June 30, 2005 December 31,
(unaudited) 2004 (unaudited) 2004
------------ ------------ -------------- --------------
Class A
Shares sold 739,795 1,690,352 $ 12,082,780 $ 25,588,665
Shares issued in
reinvestment of
dividends and
distributions 388,002 172,225 6,169,227 2,517,928
Shares redeemed (634,933) (1,075,133) (10,363,473) (16,276,570)
Net increase 492,864 787,444 $ 7,888,534 $ 11,830,023
Class B
Shares sold 1,575,821 3,830,995 $ 25,706,255 $ 57,835,750
Shares issued in
reinvestment of
dividends and
distributions 494,604 170,661 7,839,470 2,489,953
Shares redeemed (647,710) (1,247,227) (10,591,096) (18,646,784)
Net increase 1,422,715 2,754,429 $ 22,954,629 $ 41,678,919
NOTE F: Risks Involved in Investing in the Portfolio
Foreign Securities 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.
Indemnification Risk--In the ordinary course of business, the Portfolio enters
into contracts that contain a variety of indemnifications. The Portfolio's
maximum exposure under these arrangements is unknown. However, the Portfolio
has not had prior claims or losses pursuant to these indemnification provisions
and expects the risk of loss thereunder to be remote.
NOTE G: Joint Credit Facility
A number of open-end mutual funds managed by the Adviser, including the
Portfolio, participate in a $500 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
Portfolio did not utilize the Facility during the six months ended June 30,
2005.
NOTE H: Distributions to Shareholders
The tax character of distributions to be paid for the year ending December 31,
2005 will be determined at the end of the current fiscal year. The tax
character of distributions paid during the fiscal years ended December 31, 2004
and December 31, 2003 were as follows:
2004 2003
----------- -----------
DISTRIBUTIONS PAID FROM:
Ordinary income $ 1,422,125 $ 1,591,215
Net long-term capital gains 3,585,756 409,752
Total taxable distributions 5,007,881 2,000,967
Total distributions paid $ 5,007,881 $ 2,000,967
13
SMALL/MID CAP VALUE PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(continued)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
As of December 31, 2004, the components of accumulated earnings/(deficit) on a
tax basis were as follows:
Undistributed ordinary income $ 5,161,210
Undistributed long-term capital gains 8,760,273
Accumulated capital and other losses (46,347)(a)
Unrealized appreciation/(depreciation) 52,505,044(b)
Total accumulated earnings/(deficit) $ 66,380,180
(a) Net capital losses incurred after October 31, and within the taxable year,
are deemed to arise on the first business day of the Portfolio's next taxable
year. For the year ended December 31, 2004, the Portfolio deferred to January
1, 2005, post October capital losses of $46,347.
(b) The difference between book-basis and tax-basis unrealized
appreciation/(depreciation) is attributable primarily to the tax deferral of
losses on wash sales.
NOTE I: Legal Proceedings
As has been previously reported, the staff of the U.S. Securities and Exchange
Commission ("SEC") and the NYAG have been investigating practices in the mutual
fund industry identified as "market timing" and "late trading" of mutual fund
shares. Certain other regulatory authorities have also been conducting
investigations into these practices within the industry and have requested that
the Adviser provide information to them. The Adviser has been cooperating and
will continue to cooperate with all of these authorities.
On December 18, 2003, the Adviser confirmed that it had reached terms with the
SEC and the NYAG for the resolution of regulatory claims relating to the
practice of "market timing" mutual fund shares in some of the AllianceBernstein
Mutual Funds. The agreement with the SEC is reflected in an Order of the
Commission ("SEC Order"). The agreement with the NYAG is memorialized in an
Assurrance of Discontinuance dated September 1, 2004 ("NYAG Order"). Among the
key provisions of these agreements are the following:
(i) The Adviser agreed to establish a $250 million fund (the
"Reimbursement Fund") to compensate mutual fund shareholders for the adverse
effects of market timing attributable to market timing relationships described
in the SEC Order. According to the SEC Order, the Reimbursement Fund is to be
paid, in order of priority, to fund investors based on (i) their aliquot share
of losses suffered by the fund due to market timing, and (ii) a proportionate
share of advisory fees paid by such fund during the period of such market
timing;
(ii) The Adviser agreed to reduce the advisory fees it receives from
some of the AllianceBernstein long-term, open-end retail funds until December
31, 2008; and
(iii) The Adviser agreed to implement changes to its governance and
compliance procedures. Additionally, the SEC Order and the NYAG Order
contemplate that the Adviser's registered investment company clients, including
the Fund, will introduce governance and compliance changes.
In anticipation of final, definitive documentation of the NYAG Order and
effective January 1, 2004, the Adviser began waiving a portion of its advisory
fee. On September 7, 2004, the Fund's investment advisory agreement was amended
to reflect the reduced advisory fee. For more information on this waiver and
amendment to the Fund's investment advisory agreement, please see "Advisory Fee
and Other Transactions with Affiliates" above.
A special committee of the Adviser's Board of Directors, comprised of the
members of the Adviser's Audit Committee and the other independent member of
the Adviser's Board, is continuing to direct and oversee an internal
investigation and a comprehensive review of the facts and circumstances
relevant to the SEC's and the NYAG's investigations.
In addition, the Independent Directors of the Fund ("the Independent
Directors") have initiated an investigation of the above-mentioned matters with
the advice of an independent economic consultant and independent counsel. The
Independent Directors have formed a special committee to supervise the
investigation.
On October 2, 2003, a putative class action complaint entitled HINDO ET AL. V.
ALLIANCEBERNSTEIN GROWTH & INCOME FUND ET AL. (the "Hindo Complaint") was filed
against the Adviser; Alliance Capital Management Holding L.P.; Alliance Capital
Management Corporation; AXA Financial, Inc.; certain of the AllianceBernstein
Mutual Funds, including the Fund; Gerald Malone; Charles Schaffran
(collectively, the "Alliance Capital defendants"); and certain other defendants
not affiliated with the Adviser. The Hindo Complaint was filed in the United
States District Court for the Southern District of
14
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
New York by alleged shareholders of two of the AllianceBernstein Mutual Funds.
The Hindo Complaint alleges that certain of the Alliance Capital defendants
failed to disclose that they improperly allowed certain hedge funds and other
unidentified parties to engage in late trading and market timing of
AllianceBernstein Fund securities, violating Sections 11 and 15 of the
Securities Act, Sections 10(b) and 20(a) of the Exchange Act, and Sections 206
and 215 of the Advisers Act. Plaintiffs seek an unspecified amount of
compensatory damages and rescission of their contracts with the Adviser,
including recovery of all fees paid to the Adviser pursuant to such contracts.
Since October 2, 2003, numerous additional lawsuits making factual allegations
similar to those in the Hindo Complaint were filed against the Adviser and
certain other defendants, some of which name the Fund as a defendant. All of
these lawsuits seek an unspecified amount of damages. The lawsuits are now
pending in the United States District Court for the District of Maryland
pursuant to a ruling by the Judicial Panel on Multidistrict Litigation
transferring and centralizing all of the mutual fund cases involving market and
late trading in the District of Maryland.
As a result of the matters discussed above, investors in the AllianceBernstein
Mutual Funds may choose to redeem their investments. This may require the
AllianceBernstein Mutual Funds to sell investments held by those funds to
provide for sufficient liquidity and could also have an adverse effect on the
investment performance of the AllianceBernstein Mutual Funds.
The Adviser and approximately twelve other investment management firms were
publicly mentioned in connection with the settlement by the SEC of charges that
an unaffiliated broker/dealer violated federal securities laws relating to its
receipt of compensation for selling specific mutual funds and the disclosure of
such compensation. The SEC indicated publicly that, among other things, it was
considering enforcement action in connection with mutual funds' disclosure of
such arrangements and in connection with the practice of considering mutual
fund sales in the direction of brokerage commissions from fund portfolio
transactions. The SEC issued subpoenas to the Adviser, and the NASD issued
requests for information in connection with this matter and the Adviser
provided documents and other information to the SEC and NASD and cooperated
fully with the investigations. On June 8, 2005 the NASD announced that it had
reached a settlement with the Distributor in connection with this matter.
Management of the Adviser expects that the settlement has resolved both
regulatory inquiries described above.
On June 22, 2004, a purported class action complaint entitled AUCOIN, ET AL. V.
ALLIANCE CAPITAL MANAGEMENT L.P., ET AL. ("Aucoin Complaint") was filed against
the Adviser, Alliance Capital Management Holding L.P., Alliance Capital
Management Corporation, AXA Financial, Inc., AllianceBernstein Investment
Research & Management, Inc., certain current and former directors of the
AllianceBernstein Mutual Funds, and unnamed Doe defendants. The Aucoin
Complaint names certain of the AllianceBernstein mutual funds as nominal
defendants. The Aucoin Complaint was filed in the United States District Court
for the Southern District of New York by an alleged shareholder of an
AllianceBernstein mutual fund. The Aucoin Complaint alleges, among other
things, (i) that certain of the defendants improperly authorized the payment of
excessive commissions and other fees from fund assets to broker-dealers in
exchange for preferential marketing services, (ii) that certain of the
defendants misrepresented and omitted from registration statements and other
reports material facts concerning such payments, and (iii) that certain
defendants caused such conduct as control persons of other defendants. The
Aucoin Complaint asserts claims for violation of Sections 34(b), 36(b) and
48(a) of the Investment Company Act, Sections 206 and 215 of the Advisers Act,
breach of common law fiduciary duties, and aiding and abetting breaches of
common law fiduciary duties. Plaintiffs seek an unspecified amount of
compensatory damages and punitive damages, rescission of their contracts with
the Adviser, including recovery of all fees paid to the Adviser pursuant to
such contracts, an accounting of all fund-related fees, commissions and soft
dollar payments, and restitution of all unlawfully or discriminatorily obtained
fees and expenses.
Since June 22, 2004, numerous additional lawsuits making factual allegations
substantially similar to those in the Aucoin Complaint were filed against the
Adviser and certain other defendants, and others may be filed.
It is possible that these matters and/or other developments resulting from
these matters could result in increased redemptions of the Fund's shares or
other adverse consequences to the Fund. However, the Adviser believes that
these matters are not likely to have a material adverse effect on its ability
to perform advisory services relating to the Fund.
15
SMALL/MID CAP VALUE PORTFOLIO
FINANCIAL HIGHLIGHTS
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
CLASS A
---------------------------------------------------------------
Six Months May 2, 2001(a)
Ended Year Ended December 31, to
June 30, 2005 ------------------------------------- December 31,
(unaudited) 2004 2003 2002 2001
----------- ----------- ----------- ----------- -----------
Net asset value, beginning of period $16.84 $14.49 $10.46 $11.18 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (b)(c) .03 .14 .04 .12 .14
Net realized and unrealized gain (loss)
on investment transactions .22 2.60 4.23 (.81) 1.04
Net increase (decrease) in net asset value
from operations .25 2.74 4.27 (.69) 1.18
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.13) (.03) (.07) (.02) -0-
Distributions from net realized gain
on investment transactions (.76) (.36) (.17) (.01) -0-
Total dividends and distributions (.89) (.39) (.24) (.03) -0-
Net asset value, end of period $16.20 $16.84 $14.49 $10.46 $11.18
TOTAL RETURN
Total investment return based on
net asset value (d) 1.52% 19.30% 41.26% (6.20)% 11.80%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $122,439 $118,981 $90,949 $55,592 $21,076
Ratio to average net assets of:
Expenses, net of waivers and
reimbursements .88%(e) .86% 1.20% 1.13% .95%(e)
Expenses, before waivers and
reimbursements .88%(e) 1.09% 1.28% 1.41% 2.65%(e)
Net investment income (c) .36%(e) .96% .34% 1.04% 1.99%(e)
Portfolio turnover rate 14% 30% 21% 28% 12%
See footnote summary on page 17.
16
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
CLASS B
---------------------------------------------------------------
Six Months May 1, 2001(f)
Ended Year Ended December 31, to
June 30, 2005 ------------------------------------- December 31,
(unaudited) 2004 2003 2002 2001
----------- ----------- ----------- ----------- -----------
Net asset value, beginning of period $16.79 $14.46 $10.46 $11.20 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (b)(c) .01 .11 .01 .08 .11
Net realized and unrealized gain (loss)
on investment transactions .21 2.59 4.22 (.79) 1.09
Net increase (decrease) in net asset value
from operations .22 2.70 4.23 (.71) 1.20
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.10) (.01) (.06) (.02) -0-
Distributions from net realized gain
on investment transactions (.76) (.36) (.17) (.01) -0-
Total dividends and distributions (.86) (.37) (.23) (.03) -0-
Net asset value, end of period $16.15 $16.79 $14.46 $10.46 $11.20
TOTAL RETURN
Total investment return based on
net asset value (d) 1.36% 19.08% 40.89% (6.37)% 12.00%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $160,114 $142,516 $82,954 $22,832 $346
Ratio to average net assets of:
Expenses, net of waivers and
reimbursements 1.13%(e) 1.12% 1.45% 1.43% 1.20%(e)
Expenses, before waivers and
reimbursements 1.13%(e) 1.34% 1.53% 1.70% 3.17%(e)
Net investment income (c) .12%(e) .75% .05% .74% 2.17%(e)
Portfolio turnover rate 14% 30% 21% 28% 12%
(a) Commencement of distribution.
(b) Based on average shares outstanding.
(c) Net of expenses reimbursed or waived by the Adviser.
(d) 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 return does not reflect the
deduction of taxes that a shareholder would pay on Portfolio distributions or
the redemption of Portfolio shares. Total investment return calculated for a
period of less than one year is not annualized.
(e) Annualized.
(f) Commencement of operations.
17
[LOGO] ALLIANCEBERNSTEIN (R)
Investment Research and Management
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND, INC.
> ALLIANCEBERNSTEIN VALUE PORTFOLIO
SEMI-ANNUAL REPORT
JUNE 30, 2005
INVESTMENT PRODUCTS OFFERED
> ARE NOT FDIC INSURED
> MAY LOSE VALUE
> ARE NOT BANK GUARANTEED
YOU MAY OBTAIN A DESCRIPTION OF THE FUND'S PROXY VOTING POLICIES AND
PROCEDURES, AND INFORMATION REGARDING HOW THE FUND VOTED PROXIES RELATING TO
PORTFOLIO SECURITIES DURING THE MOST RECENT 12-MONTH PERIOD ENDED JUNE 30,
WITHOUT CHARGE. SIMPLY VISIT THE SECURITIES AND EXCHANGE COMMISSION'S (THE
"COMMISSION") WEB SITE AT WWW.SEC.GOV, OR CALL ALLIANCEBERNSTEIN AT (800)
227-4618.
THE FUND FILES ITS COMPLETE SCHEDULE OF PORTFOLIO HOLDINGS WITH THE COMMISSION
FOR THE FIRST AND THIRD QUARTERS OF EACH FISCAL YEAR ON FORM N-Q. THE FUND'S
FORMS N-Q ARE AVAILABLE ON THE COMMISSION'S WEB SITE AT WWW.SEC.GOV. THE FUND'S
FORMS N-Q MAY ALSO BE REVIEWED AND COPIED AT THE COMMISSION'S PUBLIC REFERENCE
ROOM IN WASHINGTON, DC; INFORMATION ON THE OPERATION OF THE PUBLIC REFERENCE
ROOM MAY BE OBTAINED BY CALLING (800) SEC-0330.
VALUE PORTFOLIO
FUND EXPENSES
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including sales charges (loads) on purchase payments, contingent
deferred sales charges on redemptions and (2) ongoing costs, including
management fees; distribution (12b-1) fees; and other Fund expenses. This
example is intended to help you understand your ongoing costs (in dollars) of
investing in the Fund and to compare these costs with the ongoing costs of
investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of
the period and held for the entire period as indicated below.
ACTUAL EXPENSES
The first line of the table below provides information about actual account
values and actual expenses. You may use the information in this line, together
with the amount you invested, to estimate the expenses that you paid over the
period. Simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
in the first line under the heading entitled "Expenses Paid During Period" to
estimate the expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio and an assumed annual rate of return of 5% before expenses, which is not
the Fund's actual return. The hypothetical account values and expenses may not
be used to estimate the actual ending account balance or expenses you paid for
the period. You may use this information to compare the ongoing costs of
investing in the Fund and other funds by comparing this 5% hypothetical example
with the 5% hypothetical examples that appear in the shareholder reports of
other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads), or contingent deferred sales charges on redemptions.
Therefore, the second line of the table is useful in comparing ongoing costs
only, and will not help you determine the relative total costs of owning
different funds. In addition, if these transactional costs were included, your
costs would have been higher.
BEGINNING ENDING EXPENSES ANNUALIZED
ACCOUNT VALUE ACCOUNT VALUE PAID DURING EXPENSE
VALUE PORTFOLIO JANUARY 1, 2005 JUNE 30, 2005 PERIOD* RATIO*
- -------------------------------------------------------------------------------
CLASS A
Actual $1,000 $1,008.39 $3.73 0.75%
Hypothetical
(5% return before
expenses) $1,000 $1,021.08 $3.76 0.75%
CLASS B
Actual $1,000 $1,007.99 $4.98 1.00%
Hypothetical
(5% return before
expenses) $1,000 $1,019.84 $5.01 1.00%
* Expenses are equal to each classes' annualized expense ratios, multiplied
by the average account value over the period, multiplied by the number of days
in the most recent fiscal half-year/365 (to reflect the one-half year period).
1
VALUE PORTFOLIO
TEN LARGEST HOLDINGS
June 30, 2005 (unaudited)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
PERCENT OF
COMPANY U.S. $ VALUE NET ASSETS
- -------------------------------------------------------------------------------
Exxon Mobil Corp. $ 8,994,055 5.6%
Citigroup, Inc. 7,225,749 4.5
Bank of America Corp. 4,875,709 3.0
General Electric Co. 4,798,159 3.0
ChevronTexaco Corp. 3,377,568 2.1
Altria Group, Inc. 3,178,039 2.0
Verizon Communications 2,967,845 1.8
Pfizer, Inc. 2,865,562 1.8
ConocoPhillips 2,828,508 1.8
Wachovia Corp. 2,636,240 1.6
- -------------------------------------------------------------------------------
$ 43,747,434 27.2%
SECTOR DIVERSIFICATION
June 30, 2005 (unaudited)
PERCENT OF
SECTOR U.S. $ VALUE NET ASSETS
- -------------------------------------------------------------------------------
Financial $ 51,938,848 32.2%
Energy 22,518,362 14.0
Utilities 12,574,173 7.8
Consumer Staples 12,199,841 7.6
Consumer Growth 12,111,308 7.5
Capital Equipment 11,941,516 7.4
Technology 10,375,416 6.4
Consumer Cyclicals 9,207,895 5.7
Commodities 3,808,040 2.4
Services 2,819,530 1.7
Industrial Commodities 2,506,895 1.6
Consumer Manufacturing 919,300 0.6
Non-Finance 663,552 0.4
Healthcare 573,945 0.4
Total Investments* 154,158,621 95.7
Cash and receivables,
net of liabilities 6,971,440 4.3
Net Assets $ 161,130,061 100.0%
* Excludes short-term investments.
Please Note: The sector classifications presented herein are based on the
sector categorization methodology of Adviser.
2
VALUE PORTFOLIO
PORTFOLIO OF INVESTMENTS
June 30, 2005 (unaudited)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
COMMON STOCKS-95.7%
FINANCIAL-32.2%
BANKS-5.9%
Citigroup, Inc. 156,300 $ 7,225,749
JPMorgan Chase & Co. 66,700 2,355,844
------------
9,581,593
FINANCE - PERSONAL LOANS-0.9%
Countrywide Credit Industries, Inc. 35,768 1,381,002
LIFE INSURANCE-2.3%
Genworth Financial, Inc. 31,400 949,222
Jefferson-Pilot Corp. 8,400 423,528
MetLife, Inc. 24,800 1,114,512
Prudential Financial, Inc. 18,000 1,181,880
Torchmark Corp. 1,300 67,860
------------
3,737,002
MAJOR REGIONAL BANKS-11.2%
Bank of America Corp. 106,900 4,875,709
BB&T Corp. 13,500 539,595
Comerica, Inc. 17,600 1,017,280
Huntington Bancshares, Inc. 40,200 970,428
KeyCorp. 27,950 926,543
Mellon Financial Corp. 31,300 897,997
National City Corp. 36,400 1,241,968
PNC Financial Services Group 14,700 800,562
SunTrust Banks, Inc. 17,600 1,271,424
U.S. Bancorp 59,700 1,743,240
Wachovia Corp. 53,150 2,636,240
Wells Fargo & Co. 19,000 1,170,020
------------
18,091,006
MULTI-LINE INSURANCE-1.2%
American International Group, Inc. 8,500 493,850
The Hartford Financial
Services Group, Inc. 18,500 1,383,430
------------
1,877,280
PROPERTY - CASUALTY INSURANCE-3.3%
ACE Ltd. (Cayman Islands) 9,900 444,015
Allstate Corp. 25,350 1,514,663
Chubb Corp. 12,500 1,070,125
PartnerRe Ltd. (Bermuda) 4,300 277,006
The St. Paul Travelers Cos., Inc. 35,733 1,412,525
XL Capital Ltd. Cl.A
(Bermuda) 9,100 677,222
------------
5,395,556
SAVINGS AND LOAN-3.6%
Astoria Financial Corp. 21,750 619,223
Fannie Mae 31,900 1,862,960
Freddie Mac 26,000 1,695,980
Washington Mutual, Inc. 39,800 1,619,462
------------
5,797,625
MISCELLANEOUS FINANCIAL-3.8%
Lehman Brothers Holdings, Inc. 13,700 1,360,136
MBIA, Inc. 11,800 699,858
Merrill Lynch & Co., Inc. 21,100 1,160,711
MGIC Investment Corp. 11,900 776,118
Morgan Stanley 17,300 907,731
The Goldman Sachs Group, Inc. 11,500 1,173,230
------------
6,077,784
------------
51,938,848
ENERGY-14.0%
GAS PIPELINES-0.2%
El Paso Corp. 23,000 264,960
OFFSHOE DRILLING-1.4%
Global StantaFe Corp. 22,100 901,680
Noble Corp. 14,000 861,140
Rowan Cos., Inc. (a) 19,200 570,432
------------
2,333,252
OILS - INTEGRATED DOMESTIC-3.7%
ConocoPhillips 49,200 2,828,508
Marathon Oil Corp. 27,100 1,446,327
Occidental Petroleum Corp. 22,100 1,700,153
------------
5,974,988
OILS - INTEGRATED INTERNATIONAL-8.7%
BP p.l.c. (ADR)
(United Kingdom) 12,300 767,274
ChevronTexaco Corp. 60,400 3,377,568
Exxon Mobil Corp. 156,500 8,994,055
Total, SA (ADR) (France) 6,900 806,265
------------
13,945,162
------------
22,518,362
UTILITIES-7.8%
ELECTRIC COMPANIES-3.8%
American Electric Power Co., Inc. 28,075 1,035,125
Edison International 5,600 227,080
Entergy Corp. 12,300 929,265
Exelon Corp. 26,200 1,344,846
FirstEnergy Corp. 27,200 1,308,592
Sempra Energy 25,400 1,049,274
Xcel Energy, Inc. 9,700 189,344
------------
6,083,526
3
VALUE PORTFOLIO
PORTFOLIO OF INVESTMENTS
(continued)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
TELEPHONE-4.0%
BellSouth Corp. 13,600 $ 361,352
SBC Communications, Inc. 48,600 1,154,250
Sprint Corp. 80,000 2,007,200
Verizon Communications 85,900 2,967,845
------------
6,490,647
------------
12,574,173
CONSUMER STAPLES-7.6%
BEVERAGES - SOFT, LITE & HARD-0.6%
Molson Coors Brewing Co. Cl.B 7,500 465,000
PepsiCo, Inc. 8,200 442,226
------------
907,226
FOOD-1.0%
Del Monte Foods Co. (a) 33,400 359,718
Kraft Foods, Inc. 13,800 438,978
Sara Lee Corp. 40,600 804,286
------------
1,602,982
RESTAURANTS-1.1%
Darden Restaurants, Inc. 9,700 319,906
McDonald's Corp. 51,800 1,437,450
------------
1,757,356
RETAIL STORES - FOOD-1.6%
Safeway, Inc. 48,800 1,102,392
SUPERVALU, Inc. 19,400 632,634
The Kroger Co. (a) 49,000 932,470
------------
2,667,496
SOAPS-0.5%
Unilever NV (ADR)
(Netherlands) 11,500 745,545
SUGAR REFINERS-0.3%
Archer-Daniels-Midland Co. 19,805 423,431
TOBACCO-2.5%
Altria Group, Inc. 49,150 3,178,039
UST, Inc. 20,100 917,766
------------
4,095,805
------------
12,199,841
CONSUMER GROWTH-7.5%
ADVERTISING-0.5%
The Interpublic Group of Cos., Inc. (a) 59,100 719,838
DRUGS-2.6%
Bristol-Myers Squibb Co. 18,850 470,873
Merck & Co., Inc. 29,400 905,520
Pfizer, Inc. 103,900 2,865,562
------------
4,241,955
ENTERTAINMENT-1.5%
Time Warner, Inc. (a) 128,400 2,145,564
Viacom, Inc. Cl.B 3,050 97,661
Walt Disney Co. 6,300 158,634
------------
2,401,859
HOSPITAL MANAGEMENT-0.5%
HCA, Inc. 11,700 $663,039
Tenet Healthcare Corp. (a) 15,400 188,496
------------
851,535
HOSPITAL SUPPLIES-0.8%
Medco Health Solutions, Inc. (a) 25,200 1,344,672
PHOTOGRAPHY-0.5%
Eastman Kodak Co. 30,500 818,925
RADIO - TV BROADCASTING-1.1%
Comcast Corp. Cl.A (a) 56,434 1,732,524
------------
12,111,308
CAPITAL EQUIPMENT-7.4%
AEROSPACE - DEFENSE-1.5%
B.F. Goodrich Corp. 21,700 888,832
General Dynamics Corp. 4,200 460,068
The Boeing Co. 16,300 1,075,800
------------
2,424,700
AUTO TRUCKS - PARTS-0.5%
Eaton Corp. 13,500 808,650
ELECTRICAL EQUIPMENT-4.3%
Cooper Industries Ltd. Cl. A
(Bermuda) 7,000 447,300
General Electric Co. 138,475 4,798,159
Honeywell International, Inc. 33,000 1,208,790
Hubbell Inc. Cl.B 11,500 507,150
------------
6,961,399
MISCELLANEOUS CAPITAL GOODS-1.1%
Textron, Inc. 14,300 1,084,655
SPX Corp. 14,400 662,112
------------
1,746,767
------------
11,941,516
TECHNOLOGY-6.4%
COMMUNICATION - EQUIP. MFRS.-1.6%
ADC Telecommunications, Inc. (a) 16,814 366,041
Corning, Inc. (a) 69,900 1,161,737
Nortel Networks Corp.
(Canada) (a) 126,500 330,165
Tellabs, Inc. (a) 80,100 696,870
------------
2,554,813
COMPUTERS-1.8%
Hewlett-Packard Co. 106,828 2,511,525
International Business Machines Corp. 5,600 415,520
Quantum Corp. (a) 6,250 18,563
------------
2,945,608
4
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
COMPUTER/INSTRUMENTATION-1.1%
Flextronics International Ltd.
(Singapore) (a) 57,900 $ 764,859
Sanmina-SCI Corp. (a) 111,000 607,170
Solectron Corp. (a) 126,310 478,715
------------
1,850,744
COMPUTER SERVICES/SOFTWARE-1.2%
Electronic Data Systems Corp. 46,000 885,500
Microsoft Corp. 43,100 1,070,604
------------
1,956,104
SEMICONDUCTORS-0.4%
Agere System, Inc. (a) 18,110 217,320
Vishay Intertechnology, Inc. (a) 30,550 362,629
------------
579,949
MISCELLANEOUS INDUSTRIAL TECHNOLOGY-0.3%
Ingram Micro, Inc. Cl.A (a) 18,200 285,012
Tech Data Corp. (a) 5,550 203,186
------------
488,198
------------
10,375,416
CONSUMER CYCLICALS-5.7%
AUTOS & AUTO PARTS-1.5%
American Axle & Manufacturing
Holdings, Inc. 10,500 265,335
Autoliv, Inc. (Sweden) 7,900 346,020
BorgWarner, Inc. 10,800 579,636
Dana Corp. 25,900 388,759
Lear Corp. 9,200 334,696
Magna International, Inc. Cl.A
(Canada) 8,200 576,788
------------
2,491,234
RETAILERS-2.8%
Federated Department Stores, Inc. 16,500 1,209,120
Limited Brands 39,500 846,090
Nordstrom, Inc. 7,900 536,963
Office Depot, Inc. (a) 51,000 1,164,840
Target Corp. 14,100 767,181
------------
4,524,194
TEXTILES/SHOES-APPAREL MFG.-0.7%
Jones Apparel Group, Inc. 20,600 639,424
V.F. Corp. 7,900 452,038
------------
1,091,462
TIRES & RUBBER GOODS-0.2%
Cooper Tire & Rubber Co. 14,100 261,837
MISCELLANEOUS CONSUMER CYCLICALS-0.5%
Newell Rubbermaid, Inc. 35,200 839,168
------------
9,207,895
COMMODITIES-2.4%
CHEMICALS-1.4%
E.I. du Pont de Nemours & Co. 9,600 412,896
Eastman Chemical Co. 15,400 849,310
PPG Industries, Inc. 14,900 935,124
------------
2,197,330
PAPER-1.0%
Georgia-Pacific Group 24,950 793,410
Temple-Inland, Inc. 22,000 817,300
------------
1,610,710
------------
3,808,040
SERVICES-1.7%
RAILROADS-1.7%
Burlington Northern
Santa Fe Corp. 19,900 936,892
CSX Corp. 24,500 1,045,170
Norfolk Southern Corp. 27,050 837,468
------------
2,819,530
INDUSTRIAL COMMODITIES-1.6%
FERTILIZERS-0.2%
Monsanto Co. 5,100 320,637
PAPER-0.9%
International Paper Co. 36,000 1,087,560
Smurfit-Stone Container Corp. (a) 27,600 280,692
------------
1,368,252
STEEL-0.5%
United States Steel Corp. 23,800 818,006
------------
2,506,895
CONSUMER MANUFACTURING-0.6%
MISCELLANEOUS-0.6%
Bunge Ltd. (Bermuda) 14,500 919,300
HEALTHCARE-0.4%
MEDICAL SERVICES-0.4%
AmerisourceBergen Corp. 8,300 573,945
NON-FINANCIAL-0.4%
BUILDING MATERIALS-CEMENT-0.4%
Martin Marietta
Materials, Inc. 9,600 663,552
Total Common Stocks
(cost $128,740,260) 154,158,621
5
VALUE PORTFOLIO
PORTFOLIO OF INVESTMENTS
(continued)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
PRINCIPAL
AMOUNT
COMPANY (000) U.S. $ VALUE
- -------------------------------------------------------------------------
SHORT-TERM INVESTMENT-5.5%
TIME DEPOSITS-5.5%
The Bank of New York
2.063% 7/01/05
(cost $8,857,000) $ 8,857 $ 8,857,000
TOTAL INVESTMENTS-101.2%
(cost $137,597,260) 163,015,621
Other assets less liabilities-(1.2%) (1,885,560)
NET ASSETS-100% $ 161,130,061
(a) Non-income producing security.
Glossary:
ADR - American Depositary Receipt
See Notes to Financial Statements.
6
VALUE PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2005 (unaudited)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $137,597,260) $ 163,015,621
Cash 312
Receivable for investment securities sold 1,163,720
Receivable for capital stock sold 450,293
Dividends and interest receivable 242,045
Total assets 164,871,991
LIABILITIES
Payable for investment securities purchased 3,532,200
Advisory fee payable 71,790
Distribution fee payable 32,629
Administrative fee payable 13,038
Payable for capital stock redeemed 10,546
Transfer agent fee payable 67
Accrued expenses 81,660
Total liabilities 3,741,930
NET ASSETS $ 161,130,061
COMPOSITION OF NET ASSETS
Capital stock, at par $ 13,134
Additional paid-in capital 132,223,440
Undistributed net investment income 962,684
Accumulated net realized gain on
investment transactions 2,512,442
Net unrealized appreciation of investments 25,418,361
$ 161,130,061
CLASS A SHARES
Net assets $ 13,122
Shares of capital stock outstanding 1,063
Net asset value per share $ 12.34
CLASS B SHARES
Net assets $ 161,116,939
Shares of capital stock outstanding 13,132,510
Net asset value per share $ 12.27
See Notes to Financial Statements.
7
VALUE PORTFOLIO
STATEMENT OF OPERATIONS
Six Months Ended June 30, 2005 (unaudited)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
INVESTMENT INCOME
Dividends (net of foreign taxes withheld of $4,203) $ 1,707,059
Interest 34,048
Total investment income 1,741,107
EXPENSES
Advisory fee 414,871
Distribution fee--Class B 188,569
Custodian 69,249
Administrative 36,250
Audit 20,730
Printing 15,880
Legal 2,941
Directors' fees 496
Transfer agency 403
Miscellaneous 2,044
Total expenses 751,433
Net investment income 989,674
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENT TRANSACTIONS
Net realized gain on investment transactions 2,565,768
Net change in unrealized appreciation/
depreciation of investments (2,287,940)
Net gain on investment transactions 277,828
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 1,267,502
See Notes to Financial Statements.
8
VALUE PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 2005 DECEMBER 31,
(UNAUDITED) 2004
---------------- ------------
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment income $ 989,674 $ 1,903,722
Net realized gain on investment
transactions 2,565,768 5,499,888
Net change in unrealized appreciation/
depreciation of investments (2,287,940) 9,888,130
Net increase in net assets
from operations 1,267,502 17,291,740
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM
Net investment income
Class A (184) -0-
Class B (1,908,445) (1,139,078)
Net realized gain on
investment transactions
Class A (222) -0-
Class B (2,681,802) -0-
CAPITAL STOCK TRANSACTIONS
Net increase 12,654,493 18,084,364
Total increase 9,331,342 34,237,026
NET ASSETS
Beginning of period 151,798,719 117,561,693
End of period (including undistributed
net investment income
of $962,684 and $1,881,639,
respectively) $ 161,130,061 $ 151,798,719
See Notes to Financial Statements.
9
VALUE PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
June 30, 2005 (unaudited)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
NOTE A: SIGNIFICANT ACCOUNTING POLICIES
The AllianceBernstein Value Portfolio (the "Portfolio") is a series of
AllianceBernstein Variable Products Series Fund, Inc. (the "Fund"). The
Portfolio's investment objective is to seek long-term growth of capital. The
Portfolio commenced operations on May 1, 2001. The Fund was incorporated in the
State of Maryland on November 17, 1987, as an open-end series investment
company. The Fund offers twenty-three separately managed pools of assets which
have differing investment objectives and policies. The Portfolio offers Class A
and Class B shares. Class B shares bear a distribution expense and have voting
rights with respect to the Class B distribution plan.
The Portfolio 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
the Portfolio's net asset value per share.
The financial statements have been prepared in conformity with U.S. generally
accepted accounting principles, which require management to make certain
estimates and assumptions that affect the reported amounts of assets and
liabilities in the financial statements and amounts of income and expenses
during the reporting period. Actual results could differ from those estimates.
Additional information about some of the items discussed in these Notes to
Financial Statements is contained in the Fund's Statement of Additional
Information, which is available upon request. The following is a summary of
significant accounting policies followed by the Portfolio.
1. SECURITY VALUATION
Portfolio securities are valued at their current market value determined on the
basis of market quotations or, if market quotations are not readily available
or are deemed unreliable, at "fair value" as determined in accordance with
procedures established by and under the general supervision of the Fund's Board
of Directors.
In general, the market value of securities which are readily available and
deemed reliable are determined as follows. Securities listed on a national
securities exchange or on a foreign securities exchange are valued at the last
sale price at the close of the exchange or foreign securities exchange. If
there has been no sale on such day, the securities are valued at the mean of
the closing bid and asked prices on such day. Securities listed on more than
one exchange are valued by reference to the principal exchange on which the
securities are traded; securities not listed on an exchange but traded on The
NASDAQ Stock Market, Inc. ("NASDAQ") are valued in accordance with the NASDAQ
Official Closing Price; listed put or call options are valued at the last sale
price. If there has been no sale on that day, such securities will be valued at
the closing bid prices on that day; open futures contracts and options thereon
are valued using the closing settlement price or, in the absence of such a
price, the most recent quoted bid price. If there are no quotations available
for the day of valuation, the last available closing settlement price is used;
securities traded in the over-the-counter market, ("OTC") (but excluding
securities traded on NASDAQ) are valued at the mean of the current bid and
asked prices as reported by the National Quotation Bureau or other comparable
sources; U.S. Government securities and other debt instruments having 60 days
or less remaining until maturity are valued at amortized cost if their original
maturity was 60 days or less; or by amortizing their fair value as of the 61st
day prior to maturity if their original term to maturity exceeded 60 days;
fixed-income securities, including mortgage backed and asset backed securities,
may be valued on the basis of prices provided by a pricing service or at a
price obtained from one or more of the major broker/dealers. In cases where
broker/dealer quotes are obtained, Alliance Capital Management, L.P. (the
"Adviser") may establish procedures whereby changes in market yields or spreads
are used to adjust, on a daily basis, a recently obtained quoted price on a
security; and OTC and other derivatives are valued on the basis of a quoted bid
price or spread from a major broker/dealer in such security.
Securities for which market quotations are not readily available (including
restricted securities) or are deemed unreliable are valued at fair value.
Factors considered in making this determination may include, but are not
limited to, information obtained by contacting the issuer, analysts, analysis
of the issuer's financial statements or other available documents. In addition,
the Fund may use fair value pricing for securities primarily traded in non-U.S.
markets because, most foreign markets close well before the Fund values its
securities at 4:00 p.m., Eastern Time. The earlier close of these foreign
markets gives rise to the possibility that significant events, including broad
market moves, may have occurred in the interim and may materially affect the
value of those securities. To account for this, the Fund may frequently value
many of its foreign equity securities using fair value prices based on third
party vendor modeling tools to the extent available.
10
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
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 prices of such currencies against the U.S.
dollar. Purchases and sales of portfolio securities are translated into U.S.
dollars at the rates of exchange prevailing when such securities were acquired
or sold. Income and expenses are translated into U.S. dollars at rates of
exchange prevailing when accrued.
Net realized gain or loss on foreign currency transactions represents foreign
exchange gains and losses from sales and maturities of foreign fixed income
investments, foreign currency exchange contracts, holding of foreign
currencies, currency gains or losses realized between the trade and settlement
dates on foreign investment transactions, and the difference between the
amounts of dividends, interest and foreign withholding taxes recorded on the
Portfolio's books and the U.S. dollar equivalent amounts actually received or
paid. Net unrealized 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 or depreciation of investments
and foreign currency denominated assets and liabilities.
3. TAXES
It is the policy of the Portfolio 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. The Portfolio may be subject to taxes imposed by countries in which
it invests. Such taxes are generally based on income and/or capital gains
earned or repatriated. Taxes are accrued and applied to net investment income,
net realized gains and net unrealized appreciation/depreciation as such income
and/or gains are earned.
4. INVESTMENT INCOME AND INVESTMENT TRANSACTIONS
Dividend income is recorded on the ex-dividend date or as soon as the Portfolio
is informed of the dividend. Interest income is accrued daily. Investment
transactions are accounted for on the trade date securities are purchased or
sold. Investment gains and losses are determined on the identified cost basis.
The Portfolio amortizes premiums and accretes discounts as adjustments to
interest income.
5. INCOME AND EXPENSES
Expenses attributable to a single portfolio are charged to that portfolio.
Expenses of the Fund are charged to each portfolio in proportion to net assets.
All income earned and expenses incurred by a portfolio with multi-class shares
outstanding, are borne on a pro-rata basis by each outstanding class of shares
based on the proportionate interest in the portfolio represented by the net
assets of such class, except that the portfolio's Class B shares bear the
distribution fees.
6. DIVIDENDS AND DISTRIBUTIONS
The Portfolio declares and distributes dividends and distributions from net
investment income and net realized gains, respectively, if any, at least
annually. 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 U.S. generally accepted accounting principles. 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
Until September 6, 2004, under the terms of an investment advisory agreement,
the Portfolio paid the Adviser an advisory fee at an annual rate of .75% of the
Portfolio's average daily net assets. Effective September 7, 2004, the terms of
the investment advisory agreement were amended so that the advisory fee was
reduced to an annual rate of .55% of the first $2.5 billion, .45% of the next
$2.5 billion and .40% in excess of $5 billion, of the Portfolio's average daily
net assets. The fee is accrued daily and paid monthly. The Adviser has agreed
to waive its fees and bear certain expenses to the extent necessary to limit
total operating expenses on an annual basis to 1.20% and 1.45% of the daily
average net assets for Class A and Class B shares, respectively. For the six
months ended June 30, 2005 there were no such expenses waived by the Adviser.
11
VALUE PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(continued)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
Effective January 1, 2004 through September 6, 2004, in connection with the
Adviser's settlement with the New York Attorney General's Office ("NYAG") the
Adviser began waiving a portion of its advisory fee so as to charge the
Portfolio at the reduced annual rate discussed above. For a more complete
discussion of the Adviser's settlement with the NYAG, please see "Legal
Proceedings" below.
Pursuant to the advisory agreement, the Portfolio paid $36,250 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, 2005.
Brokerage commissions paid on investment transactions for the six months ended
June 30, 2005, amounted to $29,077, of which $3,574 and $0, respectively, was
paid to Sanford C. Bernstein & Co. LLC and Sanford C. Bernstein Limited,
affiliates of the Adviser.
The Portfolio compensates Alliance Global Investors Services, Inc., a
wholly-owned subsidiary of the Adviser, under a Transfer Agency Agreement for
providing personnel and facilities to perform transfer agency services for the
Portfolio. Such compensation amounted to $403 for the six months ended June 30,
2005.
NOTE C: DISTRIBUTION PLAN
The Portfolio has adopted a Distribution Plan (the "Plan") for Class B shares
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the
Plan, the Portfolio pays distribution and servicing fees to AllianceBernstein
Investment Research and Management, Inc. (the "Distributor"), a wholly-owned
subsidiary of the Adviser, at an annual rate of up to .50% of the 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 limits
payments under the Plan to .25% of the Portfolio's average daily net assets
attributable to Class B shares. The Plan provides that the Distributor will use
such payments in their entirety for distribution assistance and promotional
activities.
The Portfolio is not obligated under the Plan to pay any distribution and
servicing fees in excess of the amounts set forth above. The purpose of the
payments to the Distributor under the Plan is to compensate the Distributor for
its distribution services with respect to the sale of the Portfolio's Class B
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 Plan is
characterized by the staff of the Securities and Exchange Commission as being
of the "compensation" variety.
In the event that the Plan is terminated or not continued, no distribution and
servicing fees (other than current amounts accrued but not yet paid) would be
owed by the Portfolio to the Distributor.
The Plan also provides that the Adviser may use its own resources to finance
the distribution of the Portfolio's shares.
NOTE D: INVESTMENT TRANSACTIONS
Purchases and sales of investment securities (excluding short-term investments)
for the six months ended June 30, 2005, were as follows:
PURCHASES SALES
------------ ------------
Investment securities
(excluding U.S. government securities) $ 20,122,541 $ 13,996,092
U.S. government securities -0- -0-
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 $ 29,810,495
Gross unrealized depreciation (4,392,134)
Net unrealized appreciation $ 25,418,361
1. FORWARD EXCHANGE CURRENCY CONTRACTS
The Portfolio may enter into forward exchange currency contracts in order to
hedge its exposure to changes in foreign currency exchange rates on its 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
12
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
purchase or sell a foreign currency on a future date at a negotiated forward
rate. The gain or loss arising from the difference between the original
contract and the closing of such contract would be included in net realized
gain or loss on foreign currency transactions.
Fluctuations in the value of open forward exchange currency contracts are
recorded for financial reporting purposes as unrealized appreciation and
depreciation by the Portfolio.
The Portfolio's custodian will place and maintain cash not available for
investment or other liquid assets in a separate account of the Portfolio having
a value at least equal to the aggregate amount of the Portfolio's commitments
under forward exchange currency contracts entered into with respect to position
hedges.
Risks may arise from the potential inability of the 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 the Portfolio has in that particular
currency contract.
2. OPTION TRANSACTIONS
For hedging and investment purposes, the Portfolio may purchase and write
(sell) put and call options on U.S. and foreign government securities and
foreign currencies that are traded on U.S. and foreign 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 written options which
expire unexercised are recorded by the Portfolio on the expiration date as
realized gains from options written. 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. If a
put option is exercised, the premium received reduces the cost basis of the
security or currency purchased by the Portfolio. 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.
NOTE E: CAPITAL STOCK
There are 1,000,000,000 shares of $.001 par value capital stock authorized,
divided into two classes, designated Class A and Class B shares. Each class
consists of 500,000,000 authorized shares. Transactions in capital stock were
as follows:
SHARES AMOUNT
--------------------------- ------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
JUNE 30, 2005 DECEMBER 31, JUNE 30, 2005 DECEMBER 31,
(UNAUDITED) 2004(a) (UNAUDITED) 2004
------------ ------------ -------------- --------------
CLASS A
Shares sold 580 451 $ 7,273 $ 5,033
Shares issued in
reinvestment
of dividends
and distributions 33 -0- 406 -0-
Shares redeemed (1) (21) (12) (237)
Net increase 612 430 $ 7,667 $ 4,796
(a) For the period May 10, 2004 through October 4, 2004, there were no Class A
shares outstanding.
13
VALUE PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(continued)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
SHARES AMOUNT
--------------------------- ------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
JUNE 30, 2005 DECEMBER 31, JUNE 30, 2005 DECEMBER 31,
(UNAUDITED) 2004 (UNAUDITED) 2004
------------ ------------ -------------- --------------
CLASS B
Shares sold 1,708,018 3,265,962 $ 21,150,565 $ 37,561,380
Shares issued in
reinvestment
of dividends and
distributions 376,250 101,244 4,590,247 1,139,078
Shares redeemed (1,054,196) (1,800,817) (13,093,986) (20,620,890)
Net increase 1,030,072 1,566,389 $ 12,646,826 $ 18,079,568
NOTE F: RISKS INVOLVED IN INVESTING IN THE PORTFOLIO
Foreign Securities 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.
Indemnification Risk--In the ordinary course of business, the Portfolio enters
into contracts that contain a variety of indemnifications. The Portfolio's
maximum exposure under these arrangements is unknown. However, the Portfolio
has not had prior claims or losses pursuant to these indemnification provisions
and expects the risk of loss thereunder to be remote.
NOTE G: JOINT CREDIT FACILITY
A number of open-end mutual funds managed by the Adviser, including the
Portfolio, participate in a $500 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
Portfolio did not utilize the Facility during the six months ended June 30,
2005.
NOTE H: DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions to be paid for the year ending December 31,
2005 will be determined at the end of the current fiscal year. The tax
character of distributions paid during the fiscal years ended December 31, 2004
and December 31, 2003 were as follows:
2004 2003
----------- ---------
Distributions paid from:
Ordinary income $ 1,139,078 $ 642,212
Total distributions paid $ 1,139,078 $ 642,212
As of December 31, 2004, the components of accumulated earnings/(deficit) on a
tax basis were as follows:
Undistributed ordinary income $ 2,161,911
Undistributed long-term capital gains 2,352,685(a)
Unrealized appreciation/(depreciation) 27,702,042(b)
Total accumulated earnings/(deficit) $ 32,216,638
(a) During the current fiscal year, $2,866,923 of capital loss carryforward
was utilized.
(b) The difference between book-basis and tax-basis unrealized
appreciation/(depreciation) is attributable primarily to the tax deferral of
losses on wash sales.
14
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
NOTE I: LEGAL PROCEEDINGS
As has been previously reported, the staff of the U.S. Securities and Exchange
Commission ("SEC") and the NYAG have been investigating practices in the mutual
fund industry identified as "market timing" and "late trading" of mutual fund
shares. Certain other regulatory authorities have also been conducting
investigations into these practices within the industry and have requested that
the Adviser provide information to them. The Adviser has been cooperating and
will continue to cooperate with all of these authorities.
On December 18, 2003, the Adviser confirmed that it had reached terms with the
SEC and the NYAG for the resolution of regulatory claims relating to the
practice of "market timing" mutual fund shares in some of the AllianceBernstein
Mutual Funds. The agreement with the SEC is reflected in an Order of the
Commission ("SEC Order"). The agreement with the NYAG is memorialized in an
Assurrance of Discontinuance dated September 1, 2004 ("NYAG Order"). Among the
key provisions of these agreements are the following:
(i) The Adviser agreed to establish a $250 million fund (the
"Reimbursement Fund") to compensate mutual fund shareholders for the adverse
effects of market timing attributable to market timing relationships described
in the SEC Order. According to the SEC Order, the Reimbursement Fund is to be
paid, in order of priority, to fund investors based on (i) their aliquot share
of losses suffered by the fund due to market timing, and (ii) a proportionate
share of advisory fees paid by such fund during the period of such market
timing;
(ii) The Adviser agreed to reduce the advisory fees it receives from
some of the AllianceBernstein long-term, open-end retail funds until December
31, 2008; and
(iii) The Adviser agreed to implement changes to its governance and
compliance procedures. Additionally, the SEC Order and the NYAG Order
contemplate that the Adviser's registered investment company clients, including
the Fund, will introduce governance and compliance changes.
In anticipation of final, definitive documentation of the NYAG Order and
effective January 1, 2004, the Adviser began waiving a portion of its advisory
fee. On September 7, 2004, the Fund's investment advisory agreement was amended
to reflect the reduced advisory fee. For more information on this waiver and
amendment to the Fund's investment advisory agreement, please see "Advisory Fee
and Other Transactions with Affiliates" above.
A special committee of the Adviser's Board of Directors, comprised of the
members of the Adviser's Audit Committee and the other independent member of
the Adviser's Board, is continuing to direct and oversee an internal
investigation and a comprehensive review of the facts and circumstances
relevant to the SEC's and the NYAG's investigations.
In addition, the Independent Directors of the Fund ("the Independent
Directors") have initiated an investigation of the above-mentioned matters with
the advice of an independent economic consultant and independent counsel. The
Independent Directors have formed a special committee to supervise the
investigation.
On October 2, 2003, a putative class action complaint entitled HINDO ET AL. V.
ALLIANCEBERNSTEIN GROWTH & INCOME FUND ET AL. (the "Hindo Complaint") was filed
against the Adviser; Alliance Capital Management Holding L.P.; Alliance Capital
Management Corporation; AXA Financial, Inc.; certain of the AllianceBernstein
Mutual Funds, including the Fund; Gerald Malone; Charles Schaffran
(collectively, the "Alliance Capital defendants"); and certain other defendants
not affiliated with the Adviser. The Hindo Complaint was filed in the United
States District Court for the Southern District of New York by alleged
shareholders of two of the AllianceBernstein Mutual Funds. The Hindo Complaint
alleges that certain of the Alliance Capital defendants failed to disclose that
they improperly allowed certain hedge funds and other unidentified parties to
engage in late trading and market timing of AllianceBernstein Fund securities,
violating Sections 11 and 15 of the Securities Act, Sections 10(b) and 20(a) of
the Exchange Act, and Sections 206 and 215 of the Advisers Act. Plaintiffs seek
an unspecified amount of compensatory damages and rescission of their contracts
with the Adviser, including recovery of all fees paid to the Adviser pursuant
to such contracts.
Since October 2, 2003, numerous additional lawsuits making factual allegations
similar to those in the Hindo Complaint were filed against the Adviser and
certain other defendants, some of which name the Fund as a defendant. All of
these lawsuits seek an unspecified amount of damages. The lawsuits are now
pending in the United States District Court for the District of Maryland
pursuant to a ruling by the Judicial Panel on Multidistrict Litigation
transferring and centralizing all of the mutual fund cases involving market and
late trading in the District of Maryland.
15
VALUE PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(continued)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
As a result of the matters discussed above, investors in the AllianceBernstein
Mutual Funds may choose to redeem their investments. This may require the
AllianceBernstein Mutual Funds to sell investments held by those funds to
provide for sufficient liquidity and could also have an adverse effect on the
investment performance of the AllianceBernstein Mutual Funds.
The Adviser and approximately twelve other investment management firms were
publicly mentioned in connection with the settlement by the SEC of charges that
an unaffiliated broker/dealer violated federal securities laws relating to its
receipt of compensation for selling specific mutual funds and the disclosure of
such compensation. The SEC indicated publicly that, among other things, it was
considering enforcement action in connection with mutual funds' disclosure of
such arrangements and in connection with the practice of considering mutual
fund sales in the direction of brokerage commissions from fund portfolio
transactions. The SEC issued subpoenas to the Adviser, and the NASD issued
requests for information in connection with this matter and the Adviser
provided documents and other information to the SEC and NASD and cooperated
fully with the investigations. On June 8, 2005 the NASD announced that it had
reached a settlement with the Distributor in connection with this matter.
Management of the Adviser expects that the settlement has resolved both
regulatory inquiries described above.
On June 22, 2004, a purported class action complaint entitled AUCOIN, ET AL. V.
ALLIANCE CAPITAL MANAGEMENT L.P., ET AL. ("Aucoin Complaint") was filed against
the Adviser, Alliance Capital Management Holding L.P., Alliance Capital
Management Corporation, AXA Financial, Inc., AllianceBernstein Investment
Research & Management, Inc., certain current and former directors of the
AllianceBernstein Mutual Funds, and unnamed Doe defendants. The Aucoin
Complaint names certain of the AllianceBernstein mutual funds as nominal
defendants. The Aucoin Complaint was filed in the United States District Court
for the Southern District of New York by an alleged shareholder of an
AllianceBernstein mutual fund. The Aucoin Complaint alleges, among other
things, (i) that certain of the defendants improperly authorized the payment of
excessive commissions and other fees from fund assets to broker-dealers in
exchange for preferential marketing services, (ii) that certain of the
defendants misrepresented and omitted from registration statements and other
reports material facts concerning such payments, and (iii) that certain
defendants caused such conduct as control persons of other defendants. The
Aucoin Complaint asserts claims for violation of Sections 34(b), 36(b) and
48(a) of the Investment Company Act, Sections 206 and 215 of the Advisers Act,
breach of common law fiduciary duties, and aiding and abetting breaches of
common law fiduciary duties. Plaintiffs seek an unspecified amount of
compensatory damages and punitive damages, rescission of their contracts with
the Adviser, including recovery of all fees paid to the Adviser pursuant to
such contracts, an accounting of all fund-related fees, commissions and soft
dollar payments, and restitution of all unlawfully or discriminatorily obtained
fees and expenses.
Since June 22, 2004, numerous additional lawsuits making factual allegations
substantially similar to those in the Aucoin Complaint were filed against the
Adviser and certain other defendants, and others may be filed.
It is possible that these matters and/or other developments resulting from
these matters could result in increased redemptions of the Fund's shares or
other adverse consequences to the Fund. However, the Adviser believes that
these matters are not likely to have a material adverse effect on its ability
to perform advisory services relating to the Fund.
16
VALUE PORTFOLIO
FINANCIAL HIGHLIGHTS
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
CLASS A
----------------------------------------------------
SIX MONTHS JULY 22,
ENDED 2002(b) TO
JUNE 30, 2005 YEAR ENDED DECEMBER 31, DECEMBER 31,
(UNAUDITED) 2004(a) 2003 2002
----------- ----------- ----------- -----------
Net asset value, beginning of period $12.63 $11.20 $8.76 $8.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (c)(d) .09 .25 .16 .07
Net realized and unrealized gain on
investment transactions .02 1.18 2.36 .69
Net increase in net asset value
from operations .11 1.43 2.52 .76
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.18) -0- (.08) -0-
Distributions from net realized
gain on investment transactions (.22) -0- -0- -0-
Total dividends and distributions (.40) -0- (.08) -0-
Net asset value, end of period $12.34 $12.63 $11.20 $8.76
TOTAL RETURN
Total investment return based
on net asset value (e) .84% 12.77% 28.94% 9.50%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period $13 $5,699 $239 $187
Ratio to average net assets of:
Expenses, net of waivers
and reimbursements .75%(f) .79%(f) .99% 1.20%(f)
Expenses, before waivers
and reimbursements .75%(f) .98%(f) 1.06% 2.28%(f)
Net investment income (d) 1.62%(f) 2.02%(f) 1.51% 4.22%(f)
Portfolio turnover rate 9% 27% 27% 12%
See footnote summary on page 18.
17
VALUE PORTFOLIO
FINANCIAL HIGHLIGHTS
(continued)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
CLASS B
-----------------------------------------------------------------
SIX MONTHS MAY 1,
ENDED 2001(g) TO
JUNE 30, 2005 YEAR ENDED DECEMBER 31, DECEMBER 31,
(UNAUDITED) 2004 2003 2002 2001
----------- ----------- ----------- ----------- -----------
Net asset value, beginning of period $12.54 $11.16 $8.75 $10.07 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (c)(d) .08 .17 .12 .12 .08
Net realized and unrealized gain (loss) on
investment transactions .02 1.31 2.36 (1.42) (.01)
Net increase (decrease) in net asset
value from operations .10 1.48 2.48 (1.30) .07
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.15) (.10) (.07) (.02) -0-
Distributions from net realized gain on
investment transactions (.22) -0- -0- -0- -0-
Total dividends and distributions (.37) (.10) (.07) (.02) -0-
Net asset value, end of period $12.27 $12.54 $11.16 $8.75 $10.07
TOTAL RETURN
Total investment return based on
net asset value (e) .80% 13.37% 28.46% (12.95)% .70%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $161,117 $151,793 $117,561 $68,366 $27,286
Ratio to average net assets of:
Expenses, net of waivers
and reimbursements 1.00%(f) .97% 1.24% 1.21% 1.20%(f)
Expenses, before waivers
and reimbursements 1.00%(f) 1.15% 1.33% 1.43% 2.47%(f)
Net investment income (d) 1.31%(f) 1.45% 1.29% 1.27% 1.29%(f)
Portfolio turnover rate 9% 27% 27% 12% 4%
(a) There were no Class A shares outstanding for the period May 11, 2004
through October 3, 2004.
(b) Commencement of distribution.
(c) Based on average shares outstanding.
(d) Net of expenses waived or reimbursed by the Adviser.
(e) 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 return does not reflect the
deduction of taxes that a shareholder would pay on Portfolio distributions or
the redemption of Portfolio shares. Total investment return calculated for a
period of less than one year is not annualized.
(f) Annualized.
(g) Commencement of operations.
18
[LOGO] ALLIANCEBERNSTEIN (R)
Investment Research and Management
AllianceBernstein
Variable Products Series Fund, Inc.
Semi-Annual Report
June 30, 2005
> AllianceBernstein U.S. Large Cap Blended Style Portfolio
SEMI-ANNUAL REPORT
INVESTMENT PRODUCTS OFFERED
> ARE NOT FDIC INSURED
> MAY LOSE VALUE
> ARE NOT BANK GUARANTEED
YOU MAY OBTAIN A DESCRIPTION OF THE FUND'S PROXY VOTING POLICIES AND
PROCEDURES, AND INFORMATION REGARDING HOW THE FUND VOTED PROXIES RELATING TO
PORTFOLIO SECURITIES DURING THE MOST RECENT 12-MONTH PERIOD ENDED JUNE 30,
WITHOUT CHARGE. SIMPLY VISIT THE SECURITIES AND EXCHANGE COMMISSION'S (THE
"COMMISSION") WEB SITE AT WWW.SEC.GOV, OR CALL ALLIANCEBERNSTEIN AT (800)
227-4618.
THE FUND FILES ITS COMPLETE SCHEDULE OF PORTFOLIO HOLDINGS WITH THE COMMISSION
FOR THE FIRST AND THIRD QUARTERS OF EACH FISCAL YEAR ON FORM N-Q. THE FUND'S
FORMS N-Q ARE AVAILABLE ON THE COMMISSION'S WEB SITE AT WWW.SEC.GOV. THE FUND'S
FORMS N-Q MAY ALSO BE REVIEWED AND COPIED AT THE COMMISSION'S PUBLIC REFERENCE
ROOM IN WASHINGTON, DC; INFORMATION ON THE OPERATION OF THE PUBLIC REFERENCE
ROOM MAY BE OBTAINED BY CALLING (800) SEC-0330.
U.S. LARGE CAP BLENDED STYLE PORTFOLIO
FUND EXPENSES
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including sales charges (loads) on purchase payments, contingent
deferred sales charges on redemptions and (2) ongoing costs, including
management fees; distribution (12b-1) fees; and other Fund expenses. This
example is intended to help you understand your ongoing costs (in dollars) of
investing in the Fund and to compare these costs with the ongoing costs of
investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of
the period and held for the entire period as indicated below.
Actual Expenses
The first line of the table below provides information about actual account
values and actual expenses. You may use the information in this line, together
with the amount you invested, to estimate the expenses that you paid over the
period. Simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
in the first line under the heading entitled "Expenses Paid During Period" to
estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio and an assumed annual rate of return of 5% before expenses, which is not
the Fund's actual return. The hypothetical account values and expenses may not
be used to estimate the actual ending account balance or expenses you paid for
the period. You may use this information to compare the ongoing costs of
investing in the Fund and other funds by comparing this 5% hypothetical example
with the 5% hypothetical examples that appear in the shareholder reports of
other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads), or contingent deferred sales charges on redemptions.
Therefore, the second line of the table is useful in comparing ongoing costs
only, and will not help you determine the relative total costs of owning
different funds. In addition, if these transactional costs were included, your
costs would have been higher.
Beginning Ending
Account Value Account Value Expenses Paid Annualized
U.S. Large Cap Blended Style Portfolio January 1, 2005 June 30, 2005 During Period* Expense Ratio*
- -------------------------------------- --------------- ------------- -------------- --------------
Class A
Actual $ 1,000 $ 995.58 $ 5.89 1.19%
Hypothetical (5% return before
expenses) $ 1,000 $ 1,018.89 $ 5.96 1.19%
Class B
Actual $ 1,000 $ 994.46 $ 7.12 1.44%
Hypothetical (5% return before
expenses) $ 1,000 $ 1,017.65 $ 7.20 1.44%
* Expenses are equal to each classes' annualized expense ratios, multiplied by
the average account value over the period, multiplied by the number of days in
the most recent fiscal half-year/365 (to reflect the one-half year period).
1
U.S. LARGE CAP BLENDED STYLE PORTFOLIO
TEN LARGEST HOLDINGS
June 30, 2005 (unaudited)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
PERCENT OF
COMPANY U.S. $ VALUE NET ASSETS
- -------------------------------------------------------------------------------
General Electric Co. $ 478,170 2.9%
Citigroup, Inc. 476,168 2.9
Exxon Mobil Corp. 459,760 2.8
Google, Inc. Cl.A 411,810 2.5
Yahoo!, Inc. 391,545 2.4
Dell, Inc. 343,737 2.1
American International Group, Inc. 336,980 2.1
eBay, Inc. 303,692 1.9
Bank of America Corp. 291,904 1.8
QUALCOMM, Inc. 283,886 1.8
------------- ------
$ 3,777,652 23.2%
SECTOR DIVERSIFICATION
June 30, 2005 (unaudited)
_______________________________________________________________________________
PERCENT OF
SECTOR U.S. $ VALUE NET ASSETS
- -------------------------------------------------------------------------------
Finance $ 3,816,809 23.5%
Technology 2,693,279 16.6
Consumer Services 2,561,642 15.8
Healthcare 2,286,976 14.1
Energy 1,423,527 8.8
Consumer Staples 1,197,866 7.4
Capital Goods 673,400 4.1
Utilities 350,314 2.1
Basic Industry 256,755 1.6
Consumer Manufacturing 237,632 1.5
Transportation 187,635 1.1
Aerospace & Defense 136,885 0.8
Multi-Industry Companies 71,504 0.4
------------- ------
Total Investments 15,894,224 97.8
Cash and receivables, net of liabilities 354,826 2.2
------------- ------
Net Assets $ 16,249,050 100.0%
Please Note: The sector classifications presented herein are based on the
sector categorization methodology of the Adviser.
2
U.S. LARGE CAP BLENDED STYLE PORTFOLIO
PORTFOLIO OF INVESTMENTS
June 30, 2005 (unaudited)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
Company Shares U.S. $ Value
- -------------------------------------------------------------------------------
COMMON STOCKS-97.8%
FINANCE-23.5%
BANKING - MONEY CENTER-2.2%
JPMorgan Chase & Co. 5,900 $ 208,388
Wachovia Corp. 3,000 148,800
------------
357,188
BANKING - REGIONAL-4.2%
Bank of America Corp. 6,400 291,904
Huntington Bancshares, Inc. 2,000 48,280
KeyCorp 600 19,890
Mellon Financial Corp. 2,000 57,380
National City Corp. 2,000 68,240
PNC Financial Services Group 400 21,784
SunTrust Banks, Inc. 1,100 79,464
Wells Fargo & Co. 1,400 86,212
------------
673,154
BROKERAGE & MONEY MANAGEMENT-5.3%
Federated Investors, Inc. 1,000 30,010
Franklin Resources, Inc. 1,800 138,564
Goldman Sachs Group, Inc. 1,900 193,838
Legg Mason, Inc. 500 52,055
Lehman Brothers Holdings, Inc. 800 79,424
Merrill Lynch & Co., Inc. 3,400 187,034
Morgan Stanley 2,100 110,187
The Charles Schwab Corp. 4,300 48,504
Waddell & Reed Financial, Inc. 1,000 18,500
------------
858,116
INSURANCE-5.9%
Ace Ltd. (Cayman Islands) 450 20,183
AFLAC, Inc. 1,500 64,920
American International Group, Inc. 5,800 336,980
Genworth Financial, Inc. 1,700 51,391
MetLife, Inc. 1,500 67,410
RenaissanceRe Holdings Ltd. (Bermuda) 800 39,392
The Allstate Corp. 250 14,938
The Chubb Corp. 700 59,927
The Hartford Financial
Services Group, Inc. 900 67,302
The Progressive Corp. 600 59,286
The St. Paul Travelers Cos., Inc. 2,000 79,060
Torchmark Corp. 600 31,320
Willis Group Holdings Ltd. 800 26,176
XL Capital Ltd. 600 44,652
------------
962,937
MORTGAGE BANKING-1.6%
Countrywide Financial Corp. 1,100 42,471
Fannie Mae 2,000 116,800
Freddie Mac 1,600 104,368
------------
263,639
MISCELLANEOUS-4.3%
Citigroup, Inc. 10,300 476,168
MBIA, Inc. 500 29,655
MBNA Corp. 4,700 122,952
U.S. Bancorp 2,500 73,000
------------
701,775
------------
3,816,809
TECHNOLOGY-16.6%
COMMUNICATION EQUIPMENT-4.8%
ADC Telecommunications, Inc. (a) 1,300 28,301
Corning, Inc. (a) 13,100 217,722
Juniper Networks, Inc. (a) 10,000 251,800
QUALCOMM, Inc. 8,600 283,886
------------
781,709
COMPUTER HARDWARE/STORAGE-4.6%
Apple Computer, Inc. (a) 7,100 261,351
Dell, Inc. (a) 8,700 343,737
Hewlett-Packard Co. 5,700 134,007
------------
739,095
COMPUTER PERIPHERALS-0.6%
Network Appliance, Inc. (a) 3,200 90,464
COMPUTER SERVICES-0.3%
Electronic Data Systems Corp. 2,700 51,975
CONTRACT MANUFACTURING-0.8%
Celestica, Inc. (Canada) (a) 2,200 29,480
Cooper Industries Ltd. Cl.A (Bermuda) 300 19,170
Flextronics International Ltd.
(Singapore) (a) 3,100 40,951
Solectron Corp. (a) 11,800 44,722
------------
134,323
SEMI-CONDUCTOR CAPITAL EQUIPMENT-0.2%
Agere Systems, Inc. (a) 2,100 25,200
3
U.S. LARGE CAP BLENDED STYLE PORTFOLIO
PORTFOLIO OF INVESTMENTS
(continued)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
Company Shares U.S. $ Value
SEMI-CONDUCTOR COMPONENTS-2.5%
Broadcom Corp. (a) 5,000 $ 177,550
Intel Corp. 1,000 26,060
Marvell Technology Group Ltd. (a) 5,500 209,220
------------
412,830
SOFTWARE-2.6%
Electronic Arts, Inc. (a) 4,500 254,745
Microsoft Corp. 6,900 171,396
------------
426,141
MISCELLANEOUS-0.2%
Avnet, Inc. (a) 1,400 31,542
------------
2,693,279
CONSUMER SERVICES-15.8%
APPAREL-0.3%
Jones Apparel Group, Inc. 1,500 46,560
BROADCASTING & CABLE-2.6%
Comcast Corp. Special Cl.A (a) 2,800 83,860
The E.W. Scripps Co. 2,900 141,520
Time Warner, Inc. (a) 10,800 180,468
Viacom, Inc. Cl.B 350 11,207
------------
417,055
ENTERTAINMENT/LEISURE-0.9%
Carnival Corp. (Panama) 2,200 120,010
Eastman Kodak Co. 300 8,055
The Walt Disney Co. 600 15,108
------------
143,173
PRINTING & PUBLISHING-0.2%
The Interpublic Group of Cos., Inc. (a) 3,200 38,976
RESTAURANT & LODGING-1.1%
McDonald's Corp. 3,200 88,800
Starbucks Corp. (a) 1,600 82,656
------------
171,456
RETAIL - GENERAL MERCHANDISE-5.5%
eBay, Inc. (a) 9,200 303,692
Limited Brands, Inc. 1,900 40,698
Lowe's Cos., Inc. 3,700 215,414
Office Depot, Inc. (a) 2,300 52,532
Target Corp. 5,100 277,491
------------
889,827
TOYS-0.3%
Mattel, Inc. 2,800 51,240
MISCELLANEOUS-4.9%
Google, Inc. Cl.A (a) 1,400 411,810
Yahoo!, Inc. (a) 11,300 391,545
------------
803,355
------------
2,561,642
HEALTHCARE-14.1%
BIOTECHNOLOGY-2.9%
Amgen, Inc. (a) 2,300 139,058
Genentech, Inc. (a) 3,100 248,868
Gilead Sciences, Inc. (a) 2,000 87,980
------------
475,906
DRUGS-4.5%
Eli Lilly & Co. 3,200 178,272
GlaxoSmithKline Plc (ADR)
(United Kingdom) 500 24,255
Merck & Co., Inc. 3,600 110,880
Pfizer, Inc. 8,700 239,946
Teva Pharmaceutical Industries
Ltd. (ADR) (Israel) 5,800 180,612
------------
733,965
MEDICAL PRODUCTS-4.0%
Alcon, Inc. (Switzerland) 2,200 240,570
St. Jude Medical, Inc. (a) 5,600 244,216
Zimmer Holdings, Inc. (a) 2,100 159,957
------------
644,743
MEDICAL SERVICES-2.7%
Medco Health Solutions, Inc. (a) 900 48,024
UnitedHealth Group, Inc. 4,700 245,058
WellPoint, Inc. (a) 2,000 139,280
------------
432,362
------------
2,286,976
ENERGY-8.8%
DOMESTIC INTEGRATED-0.5%
Occidental Petroleum Corp. 1,100 84,623
INTERNATIONAL-4.6%
BP p.l.c. (ADR) (United Kingdom) 600 37,428
ChevronTexaco Corp. 3,600 201,312
Exxon Mobil Corp. 8,000 459,760
Total, SA (ADR) (France) 350 40,898
------------
739,398
4
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
Company Shares U.S. $ Value
- -------------------------------------------------------------------------------
OIL SERVICE-2.8%
ENSCO International, Inc. 1,200 $ 42,900
GlobalSantaFe Corp. 1,000 40,800
Halliburton Co. 4,100 196,062
Nabors Industries Ltd. (Bermuda) (a) 2,200 133,364
Noble Corp. 600 36,906
------------
450,032
MISCELLANEOUS-0.9%
ConocoPhillips 2,600 149,474
------------
1,423,527
CONSUMER STAPLES-7.4%
BEVERAGES-0.7%
PepsiCo, Inc. 800 43,144
The Coca-Cola Co. 1,600 66,800
------------
109,944
COSMETICS-1.1%
Avon Products, Inc. 4,700 177,895
FOOD-1.4%
Del Monte Foods Co. (a) 2,000 21,540
General Mills, Inc. 1,200 56,148
H.J. Heinz Co. 900 31,878
Kellogg Co. 1,000 44,440
Kraft Foods, Inc. 1,000 31,810
Unilever NV (ADR) (Norway) 600 38,898
------------
224,714
HOUSEHOLD PRODUCTS-1.5%
Kimberly-Clark Corp. 1,000 62,590
The Procter & Gamble Co. 3,500 184,625
------------
247,215
RETAIL - FOOD & DRUG-1.5%
Safeway, Inc. 2,400 54,216
SUPERVALU, Inc. 1,100 35,871
The Kroger Co. (a) 3,100 58,993
Whole Foods Market, Inc. 800 94,640
------------
243,720
TOBACCO-1.2%
Altria Group, Inc. 2,300 148,718
UST, Inc. 1,000 45,660
------------
194,378
------------
1,197,866
CAPITAL GOODS-4.1%
ELECTRICAL EQUIPMENT-0.7%
Arrow Electronics, Inc. (a) 1,200 $32,592
Hubbell, Inc. Cl.B 1,000 44,100
Johnson Controls, Inc. 600 33,798
------------
110,490
MACHINERY-0.5%
Eaton Corp. 700 41,930
Ingersoll-Rand Co., Ltd. 600 42,810
------------
84,740
MISCELLANEOUS-2.9%
General Electric Co. 13,800 478,170
------------
673,400
UTILITIES-2.1%
TELEPHONE UTILITY-2.1%
BellSouth Corp. 1,000 26,570
SBC Communications, Inc. 2,700 64,125
Sprint Corp. (FON Group) 3,600 90,324
Verizon Communications, Inc. 4,900 169,295
------------
350,314
BASIC INDUSTRY-1.6%
CHEMICALS-0.6%
E. I. du Pont de Nemours & Co. 1,100 47,311
PPG Industries, Inc. 900 56,484
------------
103,795
MINING AND METALS-0.3%
United States Steel Corp. 1,300 44,681
PAPER & FOREST PRODUCTS-0.7%
Georgia-Pacific Group 1,600 50,880
International Paper Co. 1,900 57,399
------------
108,279
------------
256,755
CONSUMER MANUFACTURING-1.5%
AUTO & RELATED-0.8%
Autoliv, Inc. (Sweden) 1,000 43,800
Cooper Tire & Rubber Co. 700 12,999
Lear Corp. 800 29,104
Magna International, Inc. Cl.A (Canada) 600 42,204
------------
128,107
BUILDING RELATED-0.7%
Pulte Homes, Inc. 1,300 109,525
------------
237,632
5
U.S. LARGE CAP BLENDED STYLE PORTFOLIO
PORTFOLIO OF INVESTMENTS
(continued)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
Company Shares U.S. $ Value
- -------------------------------------------------------------------------------
TRANSPORTATION-1.1%
RAILROAD-0.9%
CSX Corp. 1,300 $ 55,458
Norfolk Southern Corp. 1,800 55,728
Union Pacific Corp. 600 38,880
------------
150,066
MISCELLANEOUS-0.2%
BorgWarner, Inc. 700 37,569
------------
187,635
AEROSPACE & DEFENSE-0.8%
AEROSPACE-0.8%
Goodrich Corp. 1,000 40,960
Northrop Grumman Corp. 900 49,725
The Boeing Co. 700 46,200
------------
136,885
MULTI-INDUSTRY COMPANIES-0.4%
Crane Co. 700 18,410
Textron, Inc. 700 53,094
------------
71,504
Total Common Stocks
(cost $14,655,457) 15,894,224
TOTAL INVESTMENTS-97.8%
(cost $14,655,457) 15,894,224
Other assets less liabilities-2.2% 354,826
NET ASSETS-100% $ 16,249,050
(a) Non-income producing security.
Glossary:
ADR - American Depositary Receipt
See Notes to Financial Statements.
6
U.S. LARGE CAP BLENDED STYLE PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2005 (unaudited)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $14,655,457) $ 15,894,224
Cash 39,641
Receivable for investment securities sold 6,251,652
Receivable due from Adviser 60,139
Dividends receivable 16,497
Total assets 22,262,153
LIABILITIES
Payable for investment securities purchased 5,887,789
Payable for capital stock redeemed 15,945
Distribution fee payable 3,149
Transfer agent fee payable 55
Accrued expenses 106,165
Total liabilities 6,013,103
NET ASSETS $ 16,249,050
COMPOSITION OF NET ASSETS
Capital stock, at par $ 1,378
Additional paid-in capital 14,550,843
Distributions in excess of net investment income (9,887)
Accumulated net realized gain on investment transactions 467,949
Net unrealized appreciation of investments 1,238,767
$ 16,249,050
Class A Shares
Net assets $ 1,194,358
Shares of capital stock outstanding 100,591
Net asset value per share $ 11.87
Class B Shares
Net assets $ 15,054,692
Shares of capital stock outstanding 1,277,161
Net asset value per share $ 11.79
See Notes to Financial Statements.
7
U.S. LARGE CAP BLENDED STYLE PORTFOLIO
STATEMENT OF OPERATIONS
Six Months Ended June 30, 2005 (unaudited)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
INVESTMENT INCOME
Dividends (net of foreign taxes withheld of $664) $ 106,513
EXPENSES
Advisory fee 52,314
Distribution fee--Class B 18,683
Custodian 59,521
Administrative 36,250
Printing 28,620
Audit 20,730
Directors' fees 496
Transfer agency 403
Legal 324
Miscellaneous 2,101
Total expenses 219,442
Less: expenses waived and reimbursed by the Adviser
(see Note B) (105,216)
Net expenses 114,226
Net investment loss (7,713)
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENT TRANSACTIONS
Net realized gain on investment transactions 700,611
Net change in unrealized appreciation/depreciation of
investments (785,027)
Net loss on investment transactions (84,416)
NET DECREASE IN NET ASSETS FROM OPERATIONS $ (92,129)
See Notes to Financial Statements.
8
U.S. LARGE CAP BLENDED STYLE PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
Six Months Ended Year Ended
June 30, 2005 December 31,
(unaudited) 2004
--------------- ---------------
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS
Net investment income (loss) $ (7,713) $ 49,901
Net realized gain (loss) on investment
transactions 700,611 (218,290)
Net change in unrealized
appreciation/depreciation of
investments (785,027) 1,539,867
Net increase (decrease) in net assets
from operations (92,129) 1,371,478
DIVIDENDS TO SHAREHOLDERS FROM
Net investment income
Class A (5,706) (1,200)
Class B (43,625) (8,902)
CAPITAL STOCK TRANSACTIONS
Net increase (decrease) (293,732) 7,626,418
Total increase (decrease) (435,192) 8,987,794
NET ASSETS
Beginning of period 16,684,242 7,696,448
End of period (including distributions
in excess of net investment income
and undistributed net investment
income of ($9,887) and $47,157,
respectively) $ 16,249,050 $ 16,684,242
See Notes to Financial Statements.
9
U.S. LARGE CAP BLENDED STYLE PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
June 30, 2005 (unaudited)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
NOTE A: Significant Accounting Policies
The AllianceBernstein U.S.Large Cap Blended Style Portfolio (the "Portfolio")
is a series of AllianceBernstein Variable Products Series Fund, Inc. (the
"Fund"). The Portfolio's investment objective is to seek long-term growth of
capital. The Fund was incorporated in the State of Maryland on November 17,
1987, as an open-end series investment company. The Fund offers twenty-three
separately managed pools of assets which have differing investment objectives
and policies. The Portfolio 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.
The Portfolio 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
the Portfolio's net asset value per share.
The financial statements have been prepared in conformity with U.S. generally
accepted accounting principles, which require management to make certain
estimates and assumptions that affect the reported amounts of assets and
liabilities in the financial statements and amounts of income and expenses
during the reporting period. Actual results could differ from those estimates.
Additional information about some of the items discussed in these Notes to
Financial Statements is contained in the Fund's Statement of Additional
Information, which is available upon request. The following is a summary of
significant accounting policies followed by the Portfolio.
1. Security Valuation
Portfolio securities are valued at their current market value determined on the
basis of market quotations or, if market quotations are not readily available
or are deemed unreliable, at "fair value" as determined in accordance with
procedures established by and under the general supervision of the Fund's Board
of Directors.
In general, the market value of securities which are readily available and
deemed reliable are determined as follows. Securities listed on a national
securities exchange or on a foreign securities exchange are valued at the last
sale price at the close of the exchange or foreign securities exchange. If
there has been no sale on such day, the securities are valued at the mean of
the closing bid and asked prices on such day. Securities listed on more than
one exchange are valued by reference to the principal exchange on which the
securities are traded; securities not listed on an exchange but traded on The
NASDAQ Stock Market, Inc. ("NASDAQ") are valued in accordance with the NASDAQ
Official Closing Price; listed put or call options are valued at the last sale
price. If there has been no sale on that day, such securities will be valued at
the closing bid prices on that day; open futures contracts and options thereon
are valued using the closing settlement price or, in the absence of such a
price, the most recent quoted bid price. If there are no quotations available
for the day of valuation, the last available closing settlement price is used;
securities traded in the over-the-counter market, ("OTC") (but excluding
securities traded on NASDAQ) are valued at the mean of the current bid and
asked prices as reported by the National Quotation Bureau or other comparable
sources; U.S. Government securities and other debt instruments having 60 days
or less remaining until maturity are valued at amortized cost if their original
maturity was 60 days or less; or by amortizing their fair value as of the 61st
day prior to maturity if their original term to maturity exceeded 60 days;
fixed-income securities, including mortgage backed and asset backed securities,
may be valued on the basis of prices provided by a pricing service or at a
price obtained from one or more of the major broker/dealers. In cases where
broker/dealer quotes are obtained, Alliance Capital Management, L.P. (the
"Adviser") may establish procedures whereby changes in market yields or spreads
are used to adjust, on a daily basis, a recently obtained quoted price on a
security; and OTC and other derivatives are valued on the basis of a quoted bid
price or spread from a major broker/dealer in such security.
Securities for which market quotations are not readily available (including
restricted securities) or are deemed unreliable are valued at fair value.
Factors considered in making this determination may include, but are not
limited to, information obtained by contacting the issuer, analysts, analysis
of the issuer's financial statements or other available documents. In addition,
the Fund may use fair value pricing for securities primarily traded in non-U.S.
markets because, most foreign markets close well before the Fund values its
securities at 4:00 p.m., Eastern Time. The earlier close of these foreign
markets gives rise to the possibility that significant events, including broad
market moves, may have occurred in the interim and may materially affect the
value of those securities. To account for this, the Fund may frequently value
many of its foreign equity securities using fair value prices based on third
party vendor modeling tools to the extent available.
10
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
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 prices of such currencies against the U.S.
dollar. Purchases and sales of portfolio securities are translated into U.S.
dollars at the rates of exchange prevailing when such securities were acquired
or sold. Income and expenses are translated into U.S. dollars at rates of
exchange prevailing when accrued.
Net realized gain or loss on foreign currency transactions represents foreign
exchange gains and losses from sales and maturities of foreign fixed income
investments, foreign currency exchange contracts, holding of foreign
currencies, currency gains or losses realized between the trade and settlement
dates on foreign investment transactions, and the difference between the
amounts of dividends, interest and foreign withholding taxes recorded on the
Portfolio's books and the U.S. dollar equivalent amounts actually received or
paid. Net unrealized 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 or depreciation of investments
and foreign currency denominated assets and liabilities.
3. Taxes
It is the policy of the Portfolio 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. The Fund may be subject to taxes imposed by countries in which it
invests. Such taxes are generally based on income and/or capital gains earned
or repatriated. Taxes are accrued and applied to net investment income, net
realized gains and net unrealized appreciation/depreciation as such income
and/or gains are earned.
4. Investment Income and Investment Transactions
Dividend income is recorded on the ex-dividend date or as soon as the Portfolio
is informed of the dividend. Interest income is accrued daily. Investment
transactions are accounted for on the trade date securities are purchased or
sold. Investment gains and losses are determined on the identified cost basis.
The Portfolio amortizes premiums and accretes discounts as adjustments to
interest income.
5. Income and Expenses
Expenses attributable to a single portfolio are charged to that portfolio.
Expenses of the Fund are charged to each portfolio in proportion to net assets.
All income earned and expenses incurred by a portfolio with multi-class shares
outstanding are borne on a pro-rata basis by each outstanding class of shares,
based on the proportionate interest in the portfolio represented by the net
assets of such class, except that the portfolio's Class B shares bear the
distribution fees.
6. Dividends and Distributions
The Portfolio declares and distributes dividends and distributions from net
investment income and net realized gains, respectively, if any, at least
annually. 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 U.S. generally accepted accounting principles. 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.
7. Repurchase Agreements
It is the policy of the Portfolio that its custodian or designated subcustodian
take control of securities as collateral under repurchase agreements and to
determine on a daily basis that the value of such securities are sufficient to
cover the value of the repurchase agreements. If the seller defaults and the
value of the collateral declines or if bankruptcy proceedings are commenced
with respect to the seller of the security, realization of collateral by the
Portfolio may be delayed or limited.
NOTE B: Advisory Fee and Other Transactions with Affiliates
Until September 6, 2004, under the terms of an investment advisory agreement,
the Portfolio paid the Adviser an advisory fee at an annual rate of .95% of the
first $5 billion, .90% of the next $2.5 billion, .85% of the next $2.5 billion
and .80% of the excess over $10 billion of the Portfolio's average daily net
assets. Effective September 7, 2004, the terms of
11
U.S. LARGE CAP BLENDED STYLE PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(continued)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
the investment advisory agreement were amended so that the advisory fee was
reduced to an annual rate of .65% of the first $2.5 billion, .55% of the next
$2.5 billion and .50% in excess of $5 billion, of the Portfolio's average daily
net assets. The fee is accrued daily and paid monthly. The Adviser has agreed
to waive its fees and bear certain expenses to the extent necessary to limit
total operating expenses on an annual basis to 1.20% and 1.45% of the daily
average net assets for Class A and Class B shares, respectively. For the six
months ended June 30, 2005 the Adviser waived fees in the amount of $68,966.
Effective January 1, 2004 through September 6, 2004, in connection with the
Adviser's settlement with the New York Attorney General's Office ("NYAG") the
Adviser began waiving a portion of its advisory fee so as to charge the
Portfolio at the reduced annual rate discussed above. For a more complete
discussion of the Adviser's settlement with the NYAG, please see "Legal
Proceedings" below.
Pursuant to the terms of the investment advisory agreement, the Portfolio has
voluntarily agreed to reimburse the Adviser for the cost of providing the
Portfolio with certain legal and accounting services. Due to the Adviser's
agreement to limit total operating expenses as described above, the Adviser
waived reimbursement for such services in the amount of $36,250 for the six
months ended June 30, 2005.
Brokerage commissions paid on investment transactions for the six months ended
June 30, 2005, amounted to $11,052, of which $3,729 and $0, respectively, was
paid to Sanford C. Bernstein & Co. LLC and Sanford C. Bernstein Limited,
affiliates of the Adviser.
The Portfolio compensates Alliance Global Investor Services, Inc., a
wholly-owned subsidiary of the Adviser, under a Transfer Agency Agreement for
providing personnel and facilities to perform transfer agency services for the
Portfolio. Such compensation amounted to $403 for the six months ended June 30,
2005.
NOTE C: Distribution Plan
The Portfolio has adopted a Distribution Plan (the "Plan") for Class B shares
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the
Plan, the Portfolio pays distribution and servicing fees to AllianceBernstein
Investment Research and Management, Inc. (the "Distributor"), a wholly-owned
subsidiary of the Adviser, at an annual rate of up to .50% of the 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 limits
payments under the Plan to .25% of the Portfolio's average daily net assets
attributable to Class B shares. The Plan provides that the Distributor will use
such payments in their entirety for distribution assistance and promotional
activities.
The Portfolio is not obligated under the Plan to pay any distribution and
servicing fees in excess of the amounts set forth above. The purpose of the
payments to the Distributor under the Plan is to compensate the Distributor for
its distribution services with respect to the sale of the Portfolio's Class B
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 Plan is
characterized by the staff of the Securities and Exchange Commission as being
of the "compensation" variety.
In the event that the Plan is terminated or not continued, no distribution and
servicing fees (other than current amounts accrued but not yet paid) would be
owed by the Portfolio to the Distributor.
The Plan also provides that the Adviser may use its own resources to finance
the distribution of the Portfolio's shares.
NOTE D: Investment Transactions
Purchases and sales of investment securities (excluding short-term investments)
for the six months ended June 30, 2005 were as follows:
Purchases Sales
------------- -------------
Investment securities (excluding U.S.
government securities) $ 10,143,566 $ 10,908,150
U.S. government securities -0- -0-
12
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
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 $ 1,505,222
Gross unrealized depreciation (266,455)
Net unrealized appreciation $ 1,238,767
1. Forward Exchange Currency Contracts
The Portfolio may enter into forward exchange currency contracts in order to
hedge its exposure to changes in foreign currency exchange rates on its 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 on a future date at a negotiated forward rate. The gain or loss
arising from the difference between the original contract and the closing of
such contract would be included in net realized gain or loss on foreign
currency transactions.
Fluctuations in the value of open forward exchange currency contracts are
recorded for financial reporting purposes as net unrealized appreciation or
depreciation by the Portfolio.
The Portfolio's custodian will place and maintain cash not available for
investment or other liquid assets in a separate account of the Portfolio having
a value at least equal to the aggregate amount of the Portfolio's commitments
under forward exchange currency contracts entered into with respect to position
hedges.
Risks may arise from the potential inability of the 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 the Portfolio has in that particular
currency contract.
2. Option Transactions
For hedging and investment purposes, the Portfolio may purchase and write
(sell) put and call options on U.S. and foreign government securities and
foreign currencies that are traded on U.S. and foreign 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 written options which
expire unexercised are recorded by the Portfolio on the expiration date as
realized gains from options written. 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. If a
put option is exercised, the premium received reduces the cost basis of the
security or currency purchased by the Portfolio. 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.
13
U.S. LARGE CAP BLENDED STYLE PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(continued)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
NOTE E: Capital Stock
There are 1,000,000,000 shares of $.001 par value capital stock authorized,
divided into two classes, designated Class A and Class B shares. Each class
consists of 500,000,000 authorized shares. Transactions in capital stock were
as follows:
SHARES AMOUNT
--------------------------- ------------------------------
Six Months Ended Year Ended Six Months Ended Year Ended
June 30, 2005 December 31, June 30, 2005 December 31,
(unaudited) 2004 (unaudited) 2004
------------ ------------ -------------- --------------
Class A
Shares issued in
reinvestment
of dividends 482 109 $ 5,706 $ 1,200
Net increase 482 109 $ 5,706 $ 1,200
Class B
Shares sold 97,661 879,931 $1,122,004 $9,659,236
Shares issued in
reinvestment
of dividends 3,716 812 43,625 8,902
Shares redeemed (126,823) (183,519) (1,465,067) (2,042,920)
Net increase
(decrease) (25,446) 697,224 $ (299,438) $ 7,625,218
NOTE F: Risk Involved in Investing in the Portfolio
In the ordinary course of business, the Portfolio enters into contracts that
contain a variety of indemnifications. The Portfolio's maximum exposure under
these arrangements is unknown. However, the Portfolio has not had prior claims
or losses pursuant to these indemnification provisions and expects the risk of
loss thereunder to be remote.
NOTE G: Joint Credit Facility
A number of open-end mutual funds managed by the Adviser, including the
Portfolio, participate in a $500 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
Porfolio did not utilize the Facility during the six months ended June 30,
2005.
NOTE H: Distributions to Shareholders
The tax character of distributions to be paid for the year ending December 31,
2005 will be determined at the end of the current fiscal year. The tax
character of distributions paid during the fiscal years ended December 31, 2004
and December 31, 2003 were as follows:
2004 2003
-------------- --------------
Distributions paid from:
Ordinary Income $ 10,102 $ -0-
Total taxable distributions 10,102 -0-
Total distributions paid $ 10,102 $ -0-
As of December 31, 2004 the components of accumulated earnings/(deficit) on a
tax basis were as follows:
Undistributed ordinary income $ 46,751
Accumulated capital and other losses (197,275)(a)
Unrealized appreciation/(depreciation) 1,988,813(b)
Total accumulated earnings/(deficit) $ 1,838,289
(a) On December 31, 2004, the Portfolio had a net capital loss carryforward of
$187,067 of which $8,021 will expire in the year 2011 and $179,046 will expire
in the year 2012. To the extent future capital gains are offset by capital loss
carryforwards, such gains will not be distributed. Net capital losses and
foreign currency losses incurred after October 31, and within the taxable year
are deemed to arise on the first business day of the Portfolio's next taxable
year. For the year ended December 31, 2004, the Portfolio deferred to January
1, 2005, post - October capital losses of $10,208.
(b) The difference between book-basis and tax-basis unrealized
appreciation/(depreciation) is attributable primarily to the tax deferral of
losses on wash sales, and the tax treatment of dividends received.
14
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
NOTE I: Legal Proceedings
As has been previously reported, the staff of the U.S. Securities and Exchange
Commission ("SEC") and the NYAG have been investigating practices in the mutual
fund industry identified as "market timing" and "late trading" of mutual fund
shares. Certain other regulatory authorities have also been conducting
investigations into these practices within the industry and have requested that
the Adviser provide information to them. The Adviser has been cooperating and
will continue to cooperate with all of these authorities.
On December 18, 2003, the Adviser confirmed that it had reached terms with the
SEC and the NYAG for the resolution of regulatory claims relating to the
practice of "market timing" mutual fund shares in some of the AllianceBernstein
Mutual Funds. The agreement with the SEC is reflected in an Order of the
Commission ("SEC Order"). The agreement with the NYAG is memorialized in an
Assurrance of Discontinuance dated September 1, 2004 ("NYAG Order"). Among the
key provisions of these agreements are the following:
(i) The Adviser agreed to establish a $250 million fund (the
"Reimbursement Fund") to compensate mutual fund shareholders for the adverse
effects of market timing attributable to market timing relationships described
in the SEC Order. According to the SEC Order, the Reimbursement Fund is to be
paid, in order of priority, to fund investors based on (i) their aliquot share
of losses suffered by the fund due to market timing, and (ii) a proportionate
share of advisory fees paid by such fund during the period of such market
timing;
(ii) The Adviser agreed to reduce the advisory fees it receives from
some of the AllianceBernstein long-term, open-end retail funds until December
31, 2008; and
(iii) The Adviser agreed to implement changes to its governance and
compliance procedures. Additionally, the SEC Order and the NYAG Order
contemplate that the Adviser's registered investment company clients, including
the Fund, will introduce governance and compliance changes.
In anticipation of final, definitive documentation of the NYAG Order and
effective January 1, 2004, the Adviser began waiving a portion of its advisory
fee. On September 7, 2004, the Fund's investment advisory agreement was amended
to reflect the reduced advisory fee. For more information on this waiver and
amendment to the Fund's investment advisory agreement, please see "Advisory Fee
and Other Transactions with Affiliates" above.
A special committee of the Adviser's Board of Directors, comprised of the
members of the Adviser's Audit Committee and the other independent member of
the Adviser's Board, is continuing to direct and oversee an internal
investigation and a comprehensive review of the facts and circumstances
relevant to the SEC's and the NYAG's investigations.
In addition, the Independent Directors of the Fund ("the Independent
Directors") have initiated an investigation of the above-mentioned matters with
the advice of an independent economic consultant and independent counsel. The
Independent Directors have formed a special committee to supervise the
investigation.
On October 2, 2003, a putative class action complaint entitled HINDO ET AL. V.
ALLIANCEBERNSTEIN GROWTH & INCOME FUND ET AL. (the "Hindo Complaint") was filed
against the Adviser; Alliance Capital Management Holding L.P.; Alliance Capital
Management Corporation; AXA Financial, Inc.; certain of the AllianceBernstein
Mutual Funds, including the Fund; Gerald Malone; Charles Schaffran
(collectively, the "Alliance Capital defendants"); and certain other defendants
not affiliated with the Adviser. The Hindo Complaint was filed in the United
States District Court for the Southern District of New York by alleged
shareholders of two of the AllianceBernstein Mutual Funds. The Hindo Complaint
alleges that certain of the Alliance Capital defendants failed to disclose that
they improperly allowed certain hedge funds and other unidentified parties to
engage in late trading and market timing of AllianceBernstein Fund securities,
violating Sections 11 and 15 of the Securities Act, Sections 10(b) and 20(a) of
the Exchange Act, and Sections 206 and 215 of the Advisers Act. Plaintiffs seek
an unspecified amount of compensatory damages and rescission of their contracts
with the Adviser, including recovery of all fees paid to the Adviser pursuant
to such contracts.
Since October 2, 2003, numerous additional lawsuits making factual allegations
similar to those in the Hindo Complaint were filed against the Adviser and
certain other defendants, some of which name the Fund as a defendant. All of
these lawsuits seek an unspecified amount of damages. The lawsuits are now
pending in the United States District Court for the District of Maryland
pursuant to a ruling by the Judicial Panel on Multidistrict Litigation
transferring and centralizing all of the mutual fund cases involving market and
late trading in the District of Maryland.
15
U.S. LARGE CAP BLENDED STYLE PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(continued)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
As a result of the matters discussed above, investors in the AllianceBernstein
Mutual Funds may choose to redeem their investments. This may require the
AllianceBernstein Mutual Funds to sell investments held by those funds to
provide for sufficient liquidity and could also have an adverse effect on the
investment performance of the AllianceBernstein Mutual Funds.
The Adviser and approximately twelve other investment management firms were
publicly mentioned in connection with the settlement by the SEC of charges that
an unaffiliated broker/dealer violated federal securities laws relating to its
receipt of compensation for selling specific mutual funds and the disclosure of
such compensation. The SEC indicated publicly that, among other things, it was
considering enforcement action in connection with mutual funds' disclosure of
such arrangements and in connection with the practice of considering mutual
fund sales in the direction of brokerage commissions from fund portfolio
transactions. The SEC issued subpoenas to the Adviser, and the NASD issued
requests for information in connection with this matter and the Adviser
provided documents and other information to the SEC and NASD and cooperated
fully with the investigations. On June 8, 2005 the NASD announced that it had
reached a settlement with the Distributor in connection with this matter.
Management of the Adviser expects that the settlement has resolved both
regulatory inquiries described above.
On June 22, 2004, a purported class action complaint entitled AUCOIN, ET AL. V.
ALLIANCE CAPITAL MANAGEMENT L.P., ET AL. ("Aucoin Complaint") was filed against
the Adviser, Alliance Capital Management Holding L.P., Alliance Capital
Management Corporation, AXA Financial, Inc., AllianceBernstein Investment
Research & Management, Inc., certain current and former directors of the
AllianceBernstein Mutual Funds, and unnamed Doe defendants. The Aucoin
Complaint names certain of the AllianceBernstein mutual funds as nominal
defendants. The Aucoin Complaint was filed in the United States District Court
for the Southern District of New York by an alleged shareholder of an
AllianceBernstein mutual fund. The Aucoin Complaint alleges, among other
things, (i) that certain of the defendants improperly authorized the payment of
excessive commissions and other fees from fund assets to broker-dealers in
exchange for preferential marketing services, (ii) that certain of the
defendants misrepresented and omitted from registration statements and other
reports material facts concerning such payments, and (iii) that certain
defendants caused such conduct as control persons of other defendants. The
Aucoin Complaint asserts claims for violation of Sections 34(b), 36(b) and
48(a) of the Investment Company Act, Sections 206 and 215 of the Advisers Act,
breach of common law fiduciary duties, and aiding and abetting breaches of
common law fiduciary duties. Plaintiffs seek an unspecified amount of
compensatory damages and punitive damages, rescission of their contracts with
the Adviser, including recovery of all fees paid to the Adviser pursuant to
such contracts, an accounting of all fund-related fees, commissions and soft
dollar payments, and restitution of all unlawfully or discriminatorily obtained
fees and expenses.
Since June 22, 2004, numerous additional lawsuits making factual allegations
substantially similar to those in the Aucoin Complaint were filed against the
Adviser and certain other defendants, and others may be filed.
It is possible that these matters and/or other developments resulting from
these matters could result in increased redemptions of the Fund's shares or
other adverse consequences to the Fund. However, the Adviser believes that
these matters are not likely to have a material adverse effect on its ability
to perform advisory services relating to the Fund.
16
U.S. LARGE CAP BLENDED STYLE PORTFOLIO
FINANCIAL HIGHLIGHTS
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
CLASS A
------------------------------------
Six Months June 6,
Ended Year Ended 2003(a) to
June 30, 2005 December 31, December 31,
(unaudited) 2004 2003
----------- ----------- -----------
Net asset value, beginning of period $11.98 $10.96 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (b)(c) .01 .06 .03
Net realized and unrealized gain (loss) on
investment transactions (.06) .97 .93
Net increase (decrease) in net asset value
from operations (.05) 1.03 .96
LESS: DIVIDENDS
Dividends from net investment income (.06) (.01) -0-
Net asset value, end of period $11.87 $11.98 $10.96
TOTAL RETURN
Total investment return based on net asset
value (d) (.44)% 9.43% 9.60%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $1,194 $1,200 $1,096
Ratio to average net assets of:
Expenses, net of waivers and
reimbursements 1.19%(e) 1.20% 1.20%(e)
Expenses, before waivers and
reimbursements 2.49%(e) 2.67% 6.65%(e)
Net investment income (c) .14%(e) .55% .45%(e)
Portfolio turnover rate 63% 42% 13%
See footnote summary on page 18.
17
U.S. LARGE CAP BLENDED STYLE PORTFOLIO
FINANCIAL HIGHLIGHTS
(continued)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
CLASS B
------------------------------------
Six Months May 2,
Ended Year Ended 2003(f) to
June 30, 2005 December 31, December 31,
(unaudited) 2004 2003
----------- ----------- -----------
Net asset value, beginning of period $11.89 $10.90 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (b)(c) (.01) .04 .01
Net realized and unrealized gain (loss) on
investment transactions (.06) .96 .89
Net increase (decrease) in net asset value
from operations (.07) 1.00 .90
LESS: DIVIDENDS
Dividends from net investment income (.03) (.01) -0-
Net asset value, end of period $11.79 $11.89 $10.90
TOTAL RETURN
Total investment return based on net asset
value (d) (.55)% 9.16% 9.00%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $15,055 $15,485 $6,600
Ratio to average net assets of:
Expenses, net of waivers and
reimbursements 1.44%(e) 1.45% 1.43%(e)
Expenses, before waivers and
reimbursements 2.74%(e) 2.95% 8.25%(e)
Net investment income (loss) (c) (.11)%(e) .37% .27%(e)
Portfolio turnover rate 63% 42% 13%
(a) Commencement of distribution.
(b) Based on average shares outstanding.
(c) Net of expenses waived and reimbursed by the Adviser.
(d) 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 return does not reflect the
deduction of taxes that a shareholder would pay on Portfolio distributions or
redemption of Portfolio shares. Total investment return calculated for a period
of less than one year is not annualized.
(e) Annualized.
(f) Commencement of operations.
18
[LOGO] ALLIANCEBERNSTEIN (R)
Investment Research and Management
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND, INC.
> ALLIANCEBERNSTEIN WEALTH APPRECIATION STRATEGY PORTFOLIO
SEMI-ANNUAL REPORT
JUNE 30, 2005
INVESTMENT PRODUCTS OFFERED
> ARE NOT FDIC INSURED
> MAY LOSE VALUE
> ARE NOT BANK GUARANTEED
YOU MAY OBTAIN A DESCRIPTION OF THE FUND'S PROXY VOTING POLICIES AND
PROCEDURES, AND INFORMATION REGARDING HOW THE FUND VOTED PROXIES RELATING TO
PORTFOLIO SECURITIES DURING THE MOST RECENT 12-MONTH PERIOD ENDED JUNE 30,
WITHOUT CHARGE. SIMPLY VISIT THE SECURITIES AND EXCHANGE COMMISSION'S (THE
"COMMISSION") WEB SITE AT WWW.SEC.GOV, OR CALL ALLIANCEBERNSTEIN AT (800)
227-4618.
THE FUND FILES ITS COMPLETE SCHEDULE OF PORTFOLIO HOLDINGS WITH THE COMMISSION
FOR THE FIRST AND THIRD QUARTERS OF EACH FISCAL YEAR ON FORM N-Q. THE FUND'S
FORMS N-Q ARE AVAILABLE ON THE COMMISSION'S WEB SITE AT WWW.SEC.GOV. THE FUND'S
FORMS N-Q MAY ALSO BE REVIEWED AND COPIED AT THE COMMISSION'S PUBLIC REFERENCE
ROOM IN WASHINGTON, DC; INFORMATION ON THE OPERATION OF THE PUBLIC REFERENCE
ROOM MAY BE OBTAINED BY CALLING (800) SEC-0330.
WEALTH APPRECIATION STRATEGY PORTFOLIO
FUND EXPENSES
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including sales charges (loads) on purchase payments, contingent
deferred sales charges on redemptions and (2) ongoing costs, including
management fees; distribution (12b-1) fees; and other Fund expenses. This
example is intended to help you understand your ongoing costs (in dollars) of
investing in the Fund and to compare these costs with the ongoing costs of
investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of
the period and held for the entire period as indicated below.
ACTUAL EXPENSES
The first line of the table below provides information about actual account
values and actual expenses. You may use the information in this line, together
with the amount you invested, to estimate the expenses that you paid over the
period. Simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
in the first line under the heading entitled "Expenses Paid During Period" to
estimate the expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio and an assumed annual rate of return of 5% before expenses, which is not
the Fund's actual return. The hypothetical account values and expenses may not
be used to estimate the actual ending account balance or expenses you paid for
the period. You may use this information to compare the ongoing costs of
investing in the Fund and other funds by comparing this 5% hypothetical example
with the 5% hypothetical examples that appear in the shareholder reports of
other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads), or contingent deferred sales charges on redemptions.
Therefore, the second line of the table is useful in comparing ongoing costs
only, and will not help you determine the relative total costs of owning
different funds. In addition, if these transactional costs were included, your
costs would have been higher.
WEALTH BEGINNING ENDING EXPENSES ANNUALIZED
APPRECIATION ACCOUNT VALUE ACCOUNT VALUE PAID DURING EXPENSE
STRATEGY PORTFOLIO JANUARY 1, 2005 JUNE 30, 2005 PERIOD* RATIO*
- ------------------ --------------- ------------- ----------- ---------
CLASS A
Actual $1,000 $ 997.11 $5.89 1.19%
Hypothetical
(5% return
before expenses) $1,000 $1,018.89 $5.96 1.19%
CLASS B
Actual $1,000 $ 996.84 $7.13 1.44%
Hypothetical
(5% return
before expenses) $1,000 $1,017.65 $7.20 1.44%
* Expenses are equal to each classes' annualized expense ratios, multiplied by
the average account value over the period, multiplied by the number of days in
the most recent fiscal half-year/365 (to reflect the one-half year period).
1
WEALTH APPRECIATION STRATEGY PORTFOLIO
TEN LARGEST HOLDINGS
June 30, 2005 (unaudited)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
PERCENT OF
COMPANY U.S. $ VALUE NET ASSETS
- -------------------------------------------------------------------------------
Citigroup, Inc. $ 457,676 1.8%
General Electric Co. 457,380 1.8
Exxon Mobil Corp. 442,519 1.8
Google, Inc. Cl. A 391,220 1.5
Yahoo!, Inc. 367,290 1.5
Dell, Inc. 327,933 1.3
American International Group, Inc. 302,119 1.2
Alcon, Inc. 295,244 1.2
Bank of America Corp. 282,782 1.1
eBay, Inc. 280,584 1.1
- -------------------------------------------------------------------------------
$ 3,604,747 14.3%
SECTOR DIVERSIFICATION
June 30, 2005 (unaudited)
PERCENT OF
SECTOR U.S. $ VALUE NET ASSETS
- -------------------------------------------------------------------------------
Finance $ 4,731,759 18.8%
Technology / Electronics 3,973,182 15.7
Construction & Housing 2,693,974 10.7
Medical 2,618,776 10.4
Consumer Cyclical 2,258,867 8.9
Energy 1,580,855 6.3
Consumer Staples 1,132,799 4.5
Capital Equipment 995,765 3.9
Telecommunications 445,392 1.8
Industrial Commodities 395,141 1.6
Transportation 159,620 0.6
Utilities 147,797 0.6
Total Investments* 21,133,927 83.8
Cash and receivables,
net of liabilities 4,084,023 16.2
Net Assets $25,217,950 100.0%
* Excludes short-term investments.
Please note: The sector classifications presented herein are based on the
sector categorization methodology of the Adviser.
2
WEALTH APPRECIATION STRATEGY PORTFOLIO
COUNTRY DIVERSIFICATION
June 30, 2005 (unaudited)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
PERCENT OF
COUNTRY U.S. $ VALUE NET ASSETS
- -------------------------------------------------------------------------------
United States $ 15,593,465 61.8%
United Kingdom 890,379 3.5
Switzerland 745,279 3.0
Japan 674,716 2.7
France 590,663 2.3
Australia 409,071 1.6
Bermuda 338,780 1.3
Hong Kong 272,866 1.1
Other* 1,618,708 6.5
Total Investments** 21,133,927 83.8
Cash and receivables,
net of liabilities 4,084,023 16.2
Net Assets $ 25,217,950 100.0%
* The Portfolio's country breakdown is expressed as a percentage of net
assets and may vary over time. "Other" represents less than 1% weightings in
the following countries: Brazil, Canada, Egypt, Finland, Germany, Greece,
India, Ireland, Israel, Italy, Mexico, Netherlands, Norway, Panama, People's
Republic of China, Singapore, South Africa, Spain, Sweden, Taiwan and Thailand.
** Excludes short-term investments.
3
WEALTH APPRECIATION STRATEGY PORTFOLIO
PORTFOLIO OF INVESTMENTS
June 30, 2005 (unaudited)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
COMMON STOCKS-83.8%
UNITED STATES INVESTMENTS-61.8%
FINANCE-15.4%
BANKING-6.9%
Bank of America Corp. 6,200 $ 282,782
Citigroup, Inc. 9,900 457,676
Fannie Mae 2,000 116,800
Freddie Mac 1,500 97,845
Huntington Bancshares, Inc. 2,000 48,280
JPMorgan Chase & Co. 5,800 204,856
KeyCorp 500 16,575
Mellon Financial Corp. 1,900 54,511
National City Corp. 1,900 64,828
PNC Financial Services Group, Inc. 400 21,784
SunTrust Banks, Inc. 1,000 72,240
US Bancorp 2,400 70,080
Wachovia Corp. 2,900 143,840
Wells Fargo & Co. 1,400 86,212
------------
1,738,309
FINANCIAL SERVICES-4.0%
Countrywide Financial Corp. 1,000 38,610
Federated Investors, Inc. 1,050 31,511
Franklin Resources, Inc. 1,800 138,564
Legg Mason, Inc. 700 72,877
Lehman Brothers Holdings, Inc. 800 79,424
MBIA, Inc. 500 29,655
MBNA Corp. 3,450 90,252
Merrill Lynch & Co., Inc. 3,300 181,533
Morgan Stanley 2,000 104,940
The Charles Schwab Corp. 2,800 31,584
The Goldman Sachs Group, Inc. 1,875 191,288
Waddell & Reed Financial, Inc. 900 16,650
------------
1,006,888
INSURANCE-4.5%
AFLAC, Inc. 1,400 60,592
American International Group, Inc. 5,200 302,119
Genworth Financial, Inc. 1,600 48,368
MetLife, Inc. 1,400 62,916
The Allstate Corp. 200 11,950
The Chubb Corp. 700 59,927
The Hartford Financial
Services Group, Inc. 900 67,302
The Progressive Corp. 550 54,346
The St. Paul Travelers Cos., Inc. 1,900 75,107
Torchmark Corp. 700 36,540
UnitedHealth Group, Inc. 4,600 239,844
WellPoint, Inc. (a) 1,900 132,316
------------
1,151,327
------------
3,896,524
TECHNOLOGY / ELECTRONICS-12.8%
DATA PROCESSING-9.2%
Agere System, Inc. (a) 2,000 24,000
Apple Computer, Inc. (a) 6,800 250,308
Arrow Electronics, Inc. (a) 1,350 36,666
Avnet, Inc. (a) 1,800 40,554
Dell, Inc. (a) 8,300 327,933
Electronic Arts, Inc. (a) 4,400 249,084
Electronic Data Systems Corp. 2,600 50,050
Google, Inc. Cl. A (a) 1,330 391,220
Hewlett-Packard Co. 5,500 129,305
International Business
Machines Corp. 800 59,360
Microsoft Corp. 6,800 168,912
Network Appliance, Inc. (a) 3,000 84,810
Sanmina-SCI Corp. (a) 7,800 42,666
Solectron Corp. (a) 11,500 43,585
Tech Data Corp. (a) 1,300 47,593
Yahoo!, Inc. (a) 10,600 367,290
------------
2,313,336
ELECTRICAL & ELECTRONICS-3.6%
ADC Telecommunications, Inc. (a) 1,300 28,301
Broadcom Corp. Cl. A (a) 4,400 156,244
Corning, Inc. (a) 11,700 194,454
Juniper Networks, Inc. (a) 9,300 234,174
QUALCOMM, Inc. 8,100 267,381
Tellabs, Inc. (a) 3,300 28,710
------------
909,264
------------
3,222,600
MEDICAL-6.8%
HEALTH & PERSONAL CARE-6.8%
Amgen, Inc. (a) 2,200 133,012
Avon Products, Inc. 4,500 170,325
Bristol-Myers Squibb Co. 3,200 79,936
Eli Lilly & Co. 2,950 164,345
Genentech, Inc. (a) 3,100 248,868
Gilead Sciences, Inc. (a) 2,000 87,980
HCA, Inc. 700 39,669
Medco Health Solutions, Inc. (a) 900 48,024
Merck & Co., Inc. 3,500 107,800
Pfizer, Inc. 8,500 234,430
St. Jude Medical, Inc. (a) 5,600 244,216
Zimmer Holdings, Inc. (a) 2,100 159,957
------------
1,718,562
4
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
CONSUMER CYCLICAL-6.8%
BROADCASTING & PUBLISHING-1.6%
Comcast Corp. Special Cl. A (a) 2,750 $ 82,363
The E.W. Scripps Co. Cl. A 2,800 136,640
The Walt Disney Co. 500 12,590
Time Warner, Inc. (a) 10,500 175,455
Viacom, Inc. Cl. B 350 11,207
------------
418,255
BUSINESS & PUBLIC SERVICES-0.1%
The Interpublic Group of Cos., Inc. (a) 3,100 37,758
LEISURE & TOURISM-1.2%
Hilton Hotels Corp. 400 9,540
Host Marriott Corp. 2,925 51,188
McDonald's Corp. 3,100 86,025
Starbucks Corp. (a) 2,300 118,818
Starwood Hotels & Resorts
Worldwide, Inc. 575 33,678
------------
299,249
MERCHANDISING-3.5%
eBay, Inc. (a) 8,500 280,584
Federated Department Stores, Inc. 500 36,640
Limited Brands 1,900 40,698
Lowe's Cos., Inc. 3,500 203,770
Office Depot, Inc. (a) 2,200 50,248
Target Corp. 4,800 261,167
------------
873,107
RECREATION & OTHER CONSUMER-0.2%
Mattel, Inc. 2,200 40,260
TEXTILES & APPAREL-0.2%
Jones Apparel Group, Inc. 1,500 46,560
------------
1,715,189
CONSTRUCTION & HOUSING-4.8%
BUILDING MATERIALS-0.3%
Martin Marietta Materials, Inc. 600 41,472
Vulcan Materials Co. 700 45,493
------------
86,965
CONSTRUCTION & HOUSING-0.4%
Pulte Homes, Inc. 1,200 101,099
REAL ESTATE-4.1%
Alexandria Real Estate
Equities, Inc. 545 40,030
Archstone-Smith Trust 850 32,827
Arden Realty, Inc. 350 12,593
AvalonBay Communities, Inc. 275 22,220
Boston Properties, Inc. 600 42,000
Brookfield Properties Co. 1,275 36,720
Camden Property Trust 350 18,813
CarrAmerica Realty Corp. 350 12,663
Corporate Office Properties Trust 975 28,714
Cousins Properties, Inc. 300 8,874
Developers Diversified Realty Corp. 1,305 59,977
Duke Realty Corp. 675 21,371
EastGroup Properties, Inc. 600 25,266
Equity Office Properties Trust 500 16,550
Equity Residential 1,100 40,502
Essex Property Trust, Inc. 125 10,383
General Growth Properties, Inc. 1,325 54,443
Glenborough Realty Trust, Inc. 275 5,662
iStar Financial, Inc. 280 11,645
Kimco Realty Corp. 350 20,619
LaSalle Hotel Properties 400 13,124
Mack-Cali Realty Corp. 325 14,723
Maguire Properties, Inc. 650 18,421
Mid-America Apartment
Communities, Inc. 125 5,678
Pan Pacific Retail Properties, Inc. 300 19,914
Pennsylvania Real Estate
Investment Trust 450 21,375
Prentiss Properties Trust 475 17,309
ProLogis 1,925 77,461
Public Storage, Inc. 475 30,044
Reckson Associates Realty Corp. 150 5,033
Regency Centers Corp. 525 30,030
Simon Property Group, Inc. 1,100 79,738
SL Green Realty Corp. 75 4,838
Sovran Self Storage, Inc. 200 9,092
Sunstone Hotel Investors, Inc. 925 22,441
Tanger Factory Outlet Centers, Inc. 400 10,772
The Macerich Co. 150 10,058
The Mills Corp. 475 28,875
United Dominion Realty Trust, Inc. 1,450 34,873
5
WEALTH APPRECIATION STRATEGY PORTFOLIO
PORTFOLIO OF INVESTMENTS
(continued)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
Vornado Realty Trust 600 $ 48,240
Windrose Medical Properties Trust 650 9,120
------------
1,033,031
------------
1,221,095
ENERGY-4.5%
ENERGY EQUIPTMENT & SERVICES-0.9%
ENSCO International, Inc. 1,200 42,900
Halliburton Co. 4,000 191,280
------------
234,180
ENERGY SOURCES-3.6%
ChevronTexaco Corp. 3,500 195,720
ConocoPhillips 2,250 129,353
Exxon Mobil Corp. 7,700 442,519
Marathon Oil Corp. 1,200 64,044
Occidental Petroleum Corp. 1,000 76,930
------------
908,566
------------
1,142,746
CAPITAL EQUIPMENT-3.5%
AEROSPACE & DEFENSE-0.5%
Goodrich Corp. 1,000 40,960
Northrop Grumman Corp. 700 38,675
The Boeing Co. 700 46,200
------------
125,835
AUTOMOBILES-0.6%
Autoliv Inc. 1,000 43,800
BorgWarner, Inc. 800 42,936
Cooper Tire & Rubber Co. 700 12,999
Johnson Controls, Inc. 150 8,450
Lear Corporation 800 29,104
------------
137,289
INDUSTRIAL COMPONENTS-0.2%
Eaton Corp. 800 47,920
MULTI-INDUSTRY-2.2%
Crane Co. 700 18,410
General Electric Co. 13,200 457,380
Hubbell, Inc. Cl. B 900 39,690
Textron, Inc. 600 45,510
------------
560,990
------------
872,034
CONSUMER STAPLES-3.3%
BEVERAGES & TOBACCO-1.2%
Altria Group, Inc. 2,250 145,485
Kraft Foods, Inc. 800 25,448
PepsiCo, Inc. 700 37,751
The Coca-Cola Co. 1,400 58,450
UST, Inc. 1,000 45,660
------------
312,794
FOOD & HOUSEHOLD PRODUCTS-2.1%
General Mills, Inc. 1,200 56,148
Kellogg Co. 200 8,888
Safeway, Inc. 2,300 51,957
SUPERVALU, Inc. 1,300 42,393
The Kroger Co.(a) 3,000 57,090
The Procter & Gamble Co. 4,100 216,275
Whole Foods Market, Inc. 700 82,810
------------
515,561
------------
828,355
TELECOMMUNICATIONS-1.4%
BellSouth Corp. 900 23,913
SBC Communications, Inc. 2,700 64,125
Sprint Corp. 3,500 87,815
Verizon Communications, Inc. 4,800 165,840
------------
341,693
INDUSTRIAL COMMODITIES-1.3%
CHEMICAL-0.4%
EI Du Pont de Nemours & Co. 1,100 47,311
PPG Industries, Inc. 850 53,346
------------
100,657
FOREST & PAPER-0.7%
Georgia Pacific Group 700 22,260
International Paper Co. 1,900 57,399
Kimberly-Clark Corp. 1,000 62,590
Smurfit-Stone Container Corp.(a) 3,900 39,663
------------
181,912
METAL - STEEL-0.2%
United States Steel Corp. 1,300 44,681
------------
327,250
TRANSPORTATION-0.6%
TRANSPORTATION - ROAD & RAIL-0.6%
Burlington Northern Santa Fe Corp. 500 23,540
CSX Corp. 1,200 51,192
Norfolk Southern Corp. 1,800 55,728
Union Pacific Corp. 450 29,160
------------
159,620
6
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
UTILITIES-0.6%
ELECTRIC & GAS UTILITY-0.6%
American Electric Power Co., Inc. 1,100 $ 40,557
Entergy Corp. 800 60,440
Wisconsin Energy Corp. 1,200 46,800
------------
147,797
Total United States Investments
(cost $14,759,878) 15,593,465
FOREIGN INVESTMENTS-22.0%
AUSTRALIA-1.6%
Aristocrat Leisure Ltd. 2,181 19,163
Centro Properties Group 2,900 12,965
Coles Myer Ltd. 4,751 33,397
DB Rreef Trust 20,790 21,537
General Property Trust 7,100 19,696
Macquarie CountryWide Trust 27,600 40,188
Macquarie Goodman Group 6,500 20,187
Rinker Group Ltd. 6,099 64,599
Stockland 4,600 19,283
Valad Property Group 13,000 13,180
Westfield Group. 8,880 119,636
Westpac Banking Corp. 1,667 25,240
------------
409,071
BERMUDA-1.3%
Marvell Technology Group Ltd. (a) 5,400 205,416
Nabors Industries Ltd. (a) 2,200 133,364
------------
338,780
BRAZIL-0.1%
Petroleo Brasileiro, SA (ADR) 700 36,491
CANADA-0.7%
Boardwalk Real Estate
Investment Trust 525 8,399
Borealis Retail Real Estate
Investment Trust 850 9,817
Canadian Apartment Properties
Real Estate 900 10,894
Canadian Real Estate
Investment Trust 900 14,185
Cominar Real Estate
Investment Trust 1,000 15,402
Dundee Real Estate
Investment Trust 400 8,730
H&R Real Estate
Investment Trust 1,200 19,119
InnVest Real Estate
Investment Trust 1,000 $9,876
RioCan Real Estate
Investment Trust 3,150 51,420
Summit Real Estate
Investment Trust 1,650 27,621
------------
175,463
EGYPT-0.0%
Orascom Telecom Holding SAE (GDR) 139 7,048
FINLAND-0.1%
Sponda Oyj 1,850 19,028
FRANCE-2.3%
BNP Paribas, SA 1,012 69,120
CapGemini, SA (a) 768 24,300
Essilor International, SA 227 15,482
Groupe Danone 805 70,531
Klepierre 450 42,847
Renault, SA (a) 285 25,032
Sanofi Aventis 856 70,105
Total, SA 505 118,168
Unibail 850 109,038
Vinci, SA 554 46,040
------------
590,663
GERMANY-0.4%
Premiere AG 519 17,900
SAP AG 427 74,020
------------
91,920
GREECE-0.1%
EFG Eurobank Ergasias 543 16,704
HONG KONG-1.1%
Esprit Holdings Ltd. 10,000 72,110
Henderson Land Development Co., Ltd. 8,000 38,117
Kerry Properties Ltd. 17,500 38,834
Li & Fung Ltd. 18,000 37,253
Sun Hung Kai Properties Ltd. 8,800 86,552
------------
272,866
INDIA-0.0%
Infosys Technologies Ltd. 213 11,536
IRELAND-0.7%
Allied Irish Banks Plc 2,484 53,426
Anglo Irish Bank Corp., Plc 4,092 50,714
CRH Plc 3,074 80,829
------------
184,969
ISRAEL-0.7%
Teva Pharmaceutical Industries Ltd. (ADR) 5,600 174,384
7
WEALTH APPRECIATION STRATEGY PORTFOLIO
PORTFOLIO OF INVESTMENTS
(continued)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------
ITALY-0.4%
Beni Stabili SpA 12,300 $ 12,563
Eni S.p.A. 2,755 70,789
Fastweb (a) 443 19,102
------------
102,454
JAPAN-2.7%
Aeon Credit Service Co., Ltd. 700 43,689
Astellas Pharma, Inc. 900 30,653
Canon, Inc. 1,600 83,863
Denso Corp. 2,400 54,496
Honda Motor Co., Ltd. 900 44,203
Hoya Corp. 800 91,910
Japan Retail Fund Investment Corp. 4 34,316
Keyence Corp. 300 66,878
Mitsubishi Corp. 5,900 79,791
Mitsubishi Tokyo Financial Group, Inc. 5 42,148
Mitsui Fudosan Co., Ltd. 3,000 33,457
Nippon Building Fund, Inc. 2 18,031
Nitto Denko Corp. 900 51,281
------------
674,716
MEXICO-0.4%
America Movil, S.A. de C.V.
Series L (ADR) 900 53,649
Grupo Televisa, SA (ADR) 400 24,836
Wal-Mart de Mexico SA de CV 3,800 15,465
------------
93,950
NETHERLANDS-0.6%
Eurocommercial Properties NV 110 4,005
ING Groep NV 2,448 68,807
Rodamco Europe NV 655 53,647
Wereldhave NV 160 17,050
------------
143,509
NORWAY-0.2%
Norsk Hydro ASA 426 38,726
PANAMA-0.5%
Carnival Corp. 2,200 120,010
PEOPLES REPUBLIC OF CHINA-0.1%
China Shenhua Energy Co., Ltd. (a) 24,000 23,163
SINGAPORE-0.5%
Ascendas Real Estate
Investment Trust Cl. A (a) 40,200 52,634
CapitaMall Trust (a) 27,000 38,086
Flextronics International Ltd. 3,000 39,630
------------
130,350
SOUTH AFRICA-0.0%
MTN Group Ltd. 1,738 11,526
SPAIN-0.4%
Banco Bilbao Vizcaya 4,236 65,086
Gestevision Telecinco, SA 405 9,454
Industria de Diseno Textil, SA
(Inditex) 359 9,225
Inmobiliaria Colonial 400 21,299
------------
105,064
SWEDEN-0.1%
Telefonaktiebolaget LM Ericsson 6,301 20,103
SWITZERLAND-3.0%
Alcon, Inc. 2,700 295,244
Compagnie Financiere Richemont AG 2,030 68,067
Credit Suisse Group 1,685 66,048
Nobel Biocare Holding AG 256 51,848
Novartis AG 1,807 85,790
Roche Holding AG 732 92,362
Synthes, Inc. 168 18,411
UBS AG 866 67,509
------------
745,279
TAIWAN-0.4%
Asustek Computer, Inc. 12,000 33,767
AU Optronics Corp. (ADR) 1,000 16,940
Hon Hai Precision Industry 5,000 25,917
Taiwan Semiconductor
Manufacturing Co., Ltd. 10,499 18,278
------------
94,902
THAILAND-0.1%
PTT Public Company Ltd. 3,300 17,408
UNITED KINGDOM-3.5%
02 Plc 5,069 12,374
Billiton Plc 1,303 16,610
British Land Co. Plc 1,900 29,767
Brixton Plc 1,950 12,423
Capita Group Plc 5,783 38,024
Capital & Regional Plc 1,516 21,919
Carnival Plc 939 53,241
Derwent Valley Holdings Plc 800 17,029
Enterprise Inns Plc 2,389 35,630
Hammerson Plc 1,550 24,649
Land Securities Group Plc 2,650 65,803
Liberty International Plc 1,200 20,789
Reckitt Benckiser Plc 2,521 74,054
Royal Bank of Scotland Group Plc 3,279 98,727
SABMiller Plc 3,679 57,318
Slough Estates Plc 2,800 26,053
Smith & Nephew Plc 4,886 48,035
Standared Chartered Bank 2,578 46,968
8
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
SHARES OR
PRINCIPAL
AMOUNT
COMPANY (000) U.S. $ VALUE
- -------------------------------------------------------------------------
Tesco Plc 17,999 $ 102,541
Wolseley Plc 255 5,345
WPP Group Plc 8,111 83,080
------------
890,379
Total Foreign Investments
(cost $5,252,262) 5,540,462
Total Common Stocks
(cost $20,012,140) 21,133,927
SHORT-TERM INVESTMENTS-4.0%
TIME DEPOSIT-4.0%
The Bank of New York
2.063%, 7/01/05
(cost $997,000) $ 997 997,000
TOTAL INVESTMENTS-87.8%
(cost $21,009,140) 22,130,927
Other assets less liabilities-12.2% 3,087,023
NET ASSETS-100% $ 25,217,950
FINANCIAL FUTURES CONTRACTS PURCHASED (SEE NOTE D)
VALUE AT
NUMBER OF EXPIRATION ORIGINAL JUNE 30, UNREALIZED
TYPE CONTRACTS MONTH VALUE 2005 APPRECIATION
- --------------- --------- -------------- ---------- ---------- ------------
British Pound
FTSE 100 Index 10 September 2005 $ 903,840 $ 917,618 $ 13,778
Euro Stoxx
50 Index 47 September 2005 1,789,313 1,818,937 29,623
Japanese Yen
Topix Index 6 September 2005 620,631 635,380 14,749
$ 58,150
(a) Non-income producing security.
Glossary of Terms:
ADR - American Depositary Receipt
GDR - Global Depositary Receipt
See Notes to Financial Statements.
9
WEALTH APPRECIATION STRATEGY PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2005 (unaudited)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $21,009,140) $ 22,130,927
Cash 140
Foreign cash, at value (cost $3,066,880) 2,927,285(a)
Receivable for investment securities sold and
foreign currency contracts 2,858,235
Dividends and interest receivable 29,243
Receivable for variation margin on futures contracts 25,702
Receivable for capital stock sold 8,802
Total assets 27,980,334
LIABILITIES
Payable for investment securities purchased and
foreign currency contracts 2,700,413
Advisory fee payable 4,359
Distribution fee payable 3,920
Foreign capital gain tax payable 217
Transfer agent fee payable 55
Accrued expenses 53,420
Total liabilities 2,762,384
NET ASSETS $ 25,217,950
COMPOSITION OF NET ASSETS
Capital stock, at par $ 2,390
Additional paid-in capital 24,174,703
Distributions in excess of net investment income (10,041)
Accumulated net realized gain on investment and
foreign currency transactions 11,267
Net unrealized appreciation of investments and
foreign currency denominated
assets and liabilities 1,039,631
$ 25,217,950
CLASS A SHARES
Net assets $ 5,862,877
Shares of capital stock outstanding 554,644
Net asset value per share $ 10.57
CLASS B SHARES
Net assets $ 19,355,073
Shares of capital stock outstanding 1,835,330
Net asset value per share $ 10.55
(a) An amount of U.S. $174,290 has been segregated as collateral for the
financial futures contracts outstanding at June 30, 2005.
See Notes to Financial Statements.
10
WEALTH APPRECIATION STRATEGY PORTFOLIO
STATEMENT OF OPERATIONS
Six Months Ended June 30, 2005 (unaudited)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
INVESTMENT INCOME
Dividends (net of foreign taxes withheld of $11,234) $ 167,644
Interest 13,555
Total investment income 181,199
EXPENSES
Advisory fee 68,731
Distribution fee--Class B 19,302
Custodian 125,388
Administrative 36,250
Audit 20,730
Printing 1,803
Directors' fees 496
Transfer agency 403
Legal 270
Miscellaneous 6,193
Total expenses 279,566
Less: expenses waived and reimbursed
by the Adviser (see Note B) (134,201)
Net expenses 145,365
Net investment income 35,834
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENT AND FOREIGN CURRENCY TRANSACTIONS
Net realized gain (loss) on:
Investment transactions (55,908)
Futures 190,219
Foreign currency transactions (70,030)
Net change in unrealized appreciation/depreciation of:
Investments 122,464
Futures 23,861
Foreign currency denominated assets and
liabilities (138,914)
Net gain on investment and foreign
currency transactions 71,692
NET INCREASE IN NET ASSETS FROM OPERATIONS $107,526
See Notes to Financial Statements.
11
WEALTH APPRECIATION STRATEGY PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
JULY 1, 2004(a)
SIX MONTHS ENDED TO
JUNE 30, 2005 DECEMBER 31,
(UNAUDITED) 2004
---------------- --------------
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment income $ 35,834 $ 24,150
Net realized gain on investment and
foreign currency transactions 64,281 77,873
Net change in unrealized appreciation/
depreciation of investments and
foreign currency denominated assets
and liabilities 7,411 1,032,220
Net increase in net assets from operations 107,526 1,134,243
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM
Net investment income
Class A (25,300) -0-
Class B (75,981) -0-
Net realized gain on investment and
foreign currency transactions
Class A (23,650) -0-
Class B (75,981) -0-
CAPITAL STOCK TRANSACTIONS
Net increase 9,018,817 15,158,276
Total increase 8,925,431 16,292,519
NET ASSETS
Beginning of period 16,292,519 -0-
End of period (including distributions
in excess of net investment
income and undistributed net
investment income of ($10,041) and
$55,406, respectively) $ 25,217,950 $ 16,292,519
(a) Commencement of operations.
See Notes to Financial Statements.
12
WEALTH APPRECIATION STRATEGY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
June 30, 2005 (unaudited)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
NOTE A: SIGNIFICANT ACCOUNTING POLICIES
The AllianceBernstein Wealth Appreciation Strategy Portfolio (the "Portfolio")
is a series of AllianceBernstein Variable Products Series Fund, Inc. (the
"Fund"). The Portfolio's investment objective is to seek long-term growth of
capital. The Fund was incorporated in the State of Maryland on November 17,
1987, as an open-end series investment company. The Fund offers twenty-three
separately managed pools of assets which have differing investment objectives
and policies. The Portfolio commenced operations on July 1, 2004. The Portfolio
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.
The Portfolio 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
the Portfolio's net asset value per share.
The financial statements have been prepared in conformity with U.S. generally
accepted accounting principles, which require management to make certain
estimates and assumptions that affect the reported amounts of assets and
liabilities in the financial statements and amounts of income and expenses
during the reporting period. Actual results could differ from those estimates.
Additional information about some of the items discussed in these Notes to
Financial Statements is contained in the Fund's Statement of Additional
Information, which is available upon request. The following is a summary of
significant accounting policies followed by the Portfolio.
1. SECURITY VALUATION
Portfolio securities are valued at their current market value determined on the
basis of market quotations or, if market quotations are not readily available
or are deemed unreliable, at "fair value" as determined in accordance with
procedures established by and under the general supervision of the Fund's Board
of Directors.
In general, the market value of securities which are readily available and
deemed reliable are determined as follows. Securities listed on a national
securities exchange or on a foreign securities exchange are valued at the last
sale price at the close of the exchange or foreign securities exchange. If
there has been no sale on such day, the securities are valued at the mean of
the closing bid and asked prices on such day. Securities listed on more than
one exchange are valued by reference to the principal exchange on which the
securities are traded; securities not listed on an exchange but traded on The
NASDAQ Stock Market, Inc. ("NASDAQ") are valued in accordance with the NASDAQ
Official Closing Price; listed put or call options are valued at the last sale
price. If there has been no sale on that day, such securities will be valued at
the closing bid prices on that day; open futures contracts and options thereon
are valued using the closing settlement price or, in the absence of such a
price, the most recent quoted bid price. If there are no quotations available
for the day of valuation, the last available closing settlement price is used;
securities traded in the over-the-counter market, ("OTC") (but excluding
securities traded on NASDAQ) are valued at the mean of the current bid and
asked prices as reported by the National Quotation Bureau or other comparable
sources; U.S. Government securities and other debt instruments having 60 days
or less remaining until maturity are valued at amortized cost if their original
maturity was 60 days or less; or by amortizing their fair value as of the 61st
day prior to maturity if their original term to maturity exceeded 60 days;
fixed-income securities, including mortgage backed and asset backed securities,
may be valued on the basis of prices provided by a pricing service or at a
price obtained from one or more of the major broker/dealers. In cases where
broker/dealer quotes are obtained, Alliance Capital Management, L.P. (the
"Adviser") may establish procedures whereby changes in market yields or spreads
are used to adjust, on a daily basis, a recently obtained quoted price on a
security; and OTC and other derivatives are valued on the basis of a quoted bid
price or spread from a major broker/dealer in such security.
Securities for which market quotations are not readily available (including
restricted securities) or are deemed unreliable are valued at fair value.
Factors considered in making this determination may include, but are not
limited to, information obtained by contacting the issuer, analysts, analysis
of the issuer's financial statements or other available documents. In addition,
the Fund may use fair value pricing for securities primarily traded in non-U.S.
markets because, most foreign markets close well before the Fund values its
securities at 4:00 p.m., Eastern Time. The earlier close of these foreign
markets gives rise to the possibility that significant events, including broad
market moves, may have occurred in the interim and may materially affect the
value of those securities. To account for this, the Fund may frequently value
many of its foreign equity securities using fair value prices based on third
party vendor modeling tools to the extent available.
13
WEALTH APPRECIATION STRATEGY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(continued)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
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 prices of such currencies against the U.S.
dollar. Purchases and sales of portfolio securities are translated into U.S.
dollars at the rates of exchange prevailing when such securities were acquired
or sold. Income and expenses are translated into U.S. dollars at rates of
exchange prevailing when accrued.
Net realized gain or loss on foreign currency transactions represents foreign
exchange gains and losses from sales and maturities of foreign fixed income
investments, foreign currency exchange contracts, holding of foreign
currencies, currency gains or losses realized between the trade and settlement
dates on foreign investment transactions, and the difference between the
amounts of dividends, interest and foreign withholding taxes recorded on the
Portfolio's books and the U.S. dollar equivalent amounts actually received or
paid. Net unrealized 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 or depreciation of investments
and foreign currency denominated assets and liabilities.
3. TAXES
It is the policy of the Portfolio 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. The Fund may be subject to taxes imposed by countries in which it
invests. Such taxes are generally based on income and/or capital gains earned
or repatriated. Taxes are accrued and applied to net investment income, net
realized gains and net unrealized appreciation/depreciation as such income
and/or gains are earned.
4. INVESTMENT INCOME AND INVESTMENT TRANSACTIONS
Dividend income is recorded on the ex-dividend date or as soon as the Portfolio
is informed of the dividend. Interest income is accrued daily. Investment
transactions are accounted for on the trade date securities are purchased or
sold. Investment gains and losses are determined on the identified cost basis.
The Portfolio amortizes premiums and accretes discounts as adjustments to
interest income.
5. INCOME AND EXPENSES
Expenses attributable to a single portfolio are charged to that portfolio.
Expenses of the Fund are charged to each portfolio in proportion to net assets.
All income earned and expenses incurred by a portfolio with multi-class shares
outstanding are borne on a pro-rata basis by each outstanding class of shares,
based on the proportionate interest in the portfolio represented by the net
assets of such class, except that the portfolio's Class B shares bear the
distribution fees.
6. DIVIDENDS AND DISTRIBUTIONS
The Portfolio declares and distributes dividends and distributions from net
investment income and net realized gains, respectively, if any, at least
annually. 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 U.S. generally accepted accounting principles. 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.
7. REPURCHASE AGREEMENTS
It is the policy of the Portfolio that its custodian or designated subcustodian
take control of securities as collateral under repurchase agreements and to
determine on a daily basis that the value of such securities are sufficient to
cover the value of the repurchase agreements. If the seller defaults and the
value of the collateral declines or if bankruptcy proceedings are commenced
with respect to the seller of the security, realization of collateral by the
Portfolio may be delayed or limited.
NOTE B: ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Under the terms of an investment advisory agreement, the Portfolio pays the
Adviser an advisory fee at an annual rate of .65% of the first $2.5 billion,
..55% of the next $2.5 billion and .50% in excess of $5 billion, of the
Portfolio's average daily net assets. The fee is accrued daily and paid monthly.
14
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
The Adviser has agreed to waive its fees and bear certain expenses to the
extent necessary to limit total operating expenses on an annual basis to 1.20%
and 1.45% of the daily average net assets for Class A and Class B shares,
respectively. For the six months ended June 30, 2005 the Adviser waived fees in
the amount of $97,951.
Pursuant to the terms of the investment advisory agreement, the Portfolio has
voluntarily agreed to reimburse the Adviser for the cost of providing the
Portfolio with certain legal and accounting services. Due to the Adviser's
agreement to limit total operating expenses as described above, the Adviser
waived reimbursement for such services in the amount of $36,250 for the six
months ended June 30, 2005.
Brokerage commissions paid on investment transactions for the six months ended
June 30, 2005, amounted to $26,340, of which $3,319 and $0, respectively, was
paid to Sanford C. Bernstein & Co. LLC and Sanford C. Bernstein Limited,
affiliates of the Adviser.
The Portfolio compensates Alliance Global Investor Services, Inc., a
wholly-owned subsidiary of the Adviser, under a Transfer Agency Agreement for
providing personnel and facilities to perform transfer agency services for the
Portfolio. Such compensation amounted to $403 for the six months ended June 30,
2005.
NOTE C: DISTRIBUTION PLAN
The Portfolio has adopted a Distribution Plan (the "Plan") for Class B shares
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the
Plan, the Portfolio pays distribution and servicing fees to AllianceBernstein
Investment Research and Management, Inc. (the "Distributor"), a wholly-owned
subsidiary of the Adviser, at an annual rate of up to .50% of the 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 limits
payments under the Plan to .25% of the Portfolio's average daily net assets
attributable to Class B shares. The Plan provides that the Distributor will use
such payments in their entirety for distribution assistance and promotional
activities.
The Portfolio is not obligated under the Plan to pay any distribution and
servicing fees in excess of the amounts set forth above. The purpose of the
payments to the Distributor under the Plan is to compensate the Distributor for
its distribution services with respect to the sale of the Portfolio's Class B
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 Plan is
characterized by the staff of the Securities and Exchange Commission as being
of the "compensation" variety.
In the event that the Plan is terminated or not continued, no distribution and
servicing fees (other than current amounts accrued but not yet paid) would be
owed by the Portfolio to the Distributor.
The Plan also provides that the Adviser may use its own resources to finance
the distribution of the Portfolio's shares.
NOTE D: INVESTMENT TRANSACTIONS
Purchases and sales of investment securities (excluding short-term investments)
for the six months ended June 30, 2005 were as follows:
PURCHASES SALES
------------ -----------
Investment securities
(excluding U.S. government securities) $ 14,270,713 $ 6,616,389
U.S. government securities -0- -0-
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 futures and
foreign currency transactions) are as follows:
Gross unrealized appreciation $ 1,609,353
Gross unrealized depreciation (487,566)
Net unrealized appreciation $ 1,121,787
15
WEALTH APPRECIATION STRATEGY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(continued)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
1. FINANCIAL FUTURES CONTRACTS
The Portfolio may buy or sell financial futures contracts for the purpose of
hedging its portfolio against adverse affects of anticipated movements in the
market. The Portfolio bears the market risk that arises from changes in the
value of these financial instruments and the imperfect correlation between
movements in the price of the futures contracts and movements in the price of
the securities hedged or used for cover.
At the time the Portfolio enters into a futures contract, the Portfolio
deposits and maintains as collateral an initial margin as required by the
exchange on which the transaction is effected. Pursuant to the contract, the
Portfolio agrees to receive from or pay to the broker an amount of cash equal
to the daily fluctuation in the value of the contract. Such receipts or
payments are known as variation margin and are recorded by the Portfolio as
unrealized gains or losses. Risks may arise from the potential inability of a
counterparty to meet the terms of a contract. When the contract is closed, the
Portfolio records a realized gain or loss equal to the difference between the
value of the contract at the time it was opened and the time it was closed.
2. FORWARD EXCHANGE CURRENCY CONTRACTS
The Portfolio may enter into forward exchange currency contracts in order to
hedge its exposure to changes in foreign currency exchange rates on its 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 on a future date at a negotiated forward rate. The gain or loss
arising from the difference between the original contract and the closing of
such contract would be included in net realized gain or loss on foreign
currency transactions.
Fluctuations in the value of open forward exchange currency contracts are
recorded for financial reporting purposes as net unrealized appreciation or
depreciation by the Portfolio.
The Portfolio's custodian will place and maintain cash not available for
investment or other liquid assets in a separate account of the Portfolio having
a value at least equal to the aggregate amount of the Portfolio's commitments
under forward exchange currency contracts entered into with respect to position
hedges.
Risks may arise from the potential inability of the 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 the Portfolio has in that particular
currency contract.
3. OPTION TRANSACTIONS
For hedging and investment purposes, the Portfolio may purchase and write
(sell) put and call options on U.S. and foreign government securities and
foreign currencies that are traded on U.S. and foreign 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 written options which
expire unexercised are recorded by the Portfolio on the expiration date as
realized gains from options written. 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. If a
put option is exercised, the premium received reduces the cost basis of the
security or currency purchased by the Portfolio. 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.
16
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
NOTE E: CAPITAL STOCK
There are 1,000,000,000 share of $.001 par value capital stock authorized,
divided into two classes, designated Class A and Class B shares. Each class
consists of 500,000,000 authorized shares. Transactions in capital stock were
as follows:
SHARES AMOUNT
-------------------------- -----------------------------
SIX JULY 1, SIX JULY 1,
MONTHS ENDED 2004(a) TO MONTHS ENDED 2004(a) TO
JUNE 30, 2005 DECEMBER 31, JUNE 30, 2005 DECEMBER 31,
(UNAUDITED) 2004 (UNAUDITED) 2004
------------- ----------- ------------- -------------
CLASS A
Shares sold -0- 550,000 $ -0- $ 5,499,146
Shares issued
in reinvestment
of dividends
and distributions 4,644 -0- 48,950 -0-
Net increase 4,644 550,000 $ 48,950 $ 5,499,146
CLASS B
Shares sold 989,979 985,580 $10,310,637 $ 9,756,067
Shares issued in
reinvestment
of dividends
and distributions 14,445 -0- 151,962 -0-
Shares redeemed (145,170) (9,504) (1,492,732) (96,937)
Net increase 859,254 976,076 $ 8,969,867 $ 9,659,130
(a) Commencement of operations.
NOTE F: RISK INVOLVED IN INVESTING IN THE PORTFOLIO
Foreign Securities 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.
Indemnification of Risk--In the ordinary course of business, the Portfolio
enters into contracts that contain a variety of indemnifications. The
Portfolio's maximum exposure under these arrangements is unknown. However, the
Portfolio has not had prior claims or losses pursuant to these indemnification
provisions and expects the risk of loss thereunder to be remote.
NOTE G: JOINT CREDIT FACILITY
A number of open-end mutual funds managed by the Adviser, including the
Portfolio, participate in a $500 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 Portfolio did not utilize the Facility during the six months ended June 30,
2005.
NOTE H: COMPONENT OF ACCUMULATED EARNINGS (DEFICIT)
The tax character of distributions to be paid for the year ending December 31,
2005 will be determined at the end of the current fiscal year. As of December
31, 2004, the components of accumulated earnings/(deficit) on a tax basis were
as follows:
Undistributed ordinary income $ 183,845
Undistributed long-term capital gain 1,715
Unrealized appreciation/(depreciation) 948,683
Total accumulated earnings/(deficit) $ 1,134,243
The difference between book-basis and tax-basis unrealized
appreciation/(depreciation) are attributable primarily to the tax deferral of
losses on wash sales, the realization for tax purposes of gains/losses on
certain derivative instruments, the tax character of dividends received, and
the realization for tax purposes of unrealized gains/losses on investments in
passive foreign investment companies.
17
WEALTH APPRECIATION STRATEGY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(continued)
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
NOTE I: LEGAL PROCEEDINGS
As has been previously reported, the staff of the U.S. Securities and Exchange
Commission ("SEC") and the NYAG have been investigating practices in the mutual
fund industry identified as "market timing" and "late trading" of mutual fund
shares. Certain other regulatory authorities have also been conducting
investigations into these practices within the industry and have requested that
the Adviser provide information to them. The Adviser has been cooperating and
will continue to cooperate with all of these authorities.
On December 18, 2003, the Adviser confirmed that it had reached terms with the
SEC and the NYAG for the resolution of regulatory claims relating to the
practice of "market timing" mutual fund shares in some of the AllianceBernstein
Mutual Funds. The agreement with the SEC is reflected in an Order of the
Commission ("SEC Order"). The agreement with the NYAG is memorialized in an
Assurrance of Discontinuance dated September 1, 2004 ("NYAG Order"). Among the
key provisions of these agreements are the following:
(i) The Adviser agreed to establish a $250 million fund (the
"Reimbursement Fund") to compensate mutual fund shareholders for the adverse
effects of market timing attributable to market timing relationships described
in the SEC Order. According to the SEC Order, the Reimbursement Fund is to be
paid, in order of priority, to fund investors based on (i) their aliquot share
of losses suffered by the fund due to market timing, and (ii) a proportionate
share of advisory fees paid by such fund during the period of such market
timing;
(ii) The Adviser agreed to reduce the advisory fees it receives from
some of the AllianceBernstein long-term, open-end retail funds until December
31, 2008; and
(iii) The Adviser agreed to implement changes to its governance and
compliance procedures. Additionally, the SEC Order and the NYAG Order
contemplate that the Adviser's registered investment company clients, including
the Fund, will introduce governance and compliance changes.
In anticipation of final, definitive documentation of the NYAG Order and
effective January 1, 2004, the Adviser began waiving a portion of its advisory
fee with respect to certain AllianceBernstein funds.
A special committee of the Adviser's Board of Directors, comprised of the
members of the Adviser's Audit Committee and the other independent member of
the Adviser's Board, is continuing to direct and oversee an internal
investigation and a comprehensive review of the facts and circumstances
relevant to the SEC's and the NYAG's investigations.
In addition, the Independent Directors of the Fund ("the Independent
Directors") have initiated an investigation of the above-mentioned matters with
the advice of an independent economic consultant and independent counsel. The
Independent Directors have formed a special committee to supervise the
investigation.
On October 2, 2003, a putative class action complaint entitled HINDO ET AL. V.
ALLIANCEBERNSTEIN GROWTH & INCOME FUND ET AL. (the "Hindo Complaint") was filed
against the Adviser; Alliance Capital Management Holding L.P.; Alliance Capital
Management Corporation; AXA Financial, Inc.; certain of the AllianceBernstein
Mutual Funds, including the Fund; Gerald Malone; Charles Schaffran
(collectively, the "Alliance Capital defendants"); and certain other defendants
not affiliated with the Adviser. The Hindo Complaint was filed in the United
States District Court for the Southern District of New York by alleged
shareholders of two of the AllianceBernstein Mutual Funds. The Hindo Complaint
alleges that certain of the Alliance Capital defendants failed to disclose that
they improperly allowed certain hedge funds and other unidentified parties to
engage in late trading and market timing of AllianceBernstein Fund securities,
violating Sections 11 and 15 of the Securities Act, Sections 10(b) and 20(a) of
the Exchange Act, and Sections 206 and 215 of the Advisers Act. Plaintiffs seek
an unspecified amount of compensatory damages and rescission of their contracts
with the Adviser, including recovery of all fees paid to the Adviser pursuant
to such contracts.
Since October 2, 2003, numerous additional lawsuits making factual allegations
similar to those in the Hindo Complaint were filed against the Adviser and
certain other defendants, some of which name the Fund as a defendant. All of
these lawsuits seek an unspecified amount of damages. The lawsuits are now
pending in the United States District Court for the District of Maryland
pursuant to a ruling by the Judicial Panel on Multidistrict Litigation
transferring and centralizing all of the mutual fund cases involving market and
late trading in the District of Maryland.
As a result of the matters discussed above, investors in the AllianceBernstein
Mutual Funds may choose to redeem their investments. This may require the
AllianceBernstein Mutual Funds to sell investments held by those funds to
provide for
18
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
sufficient liquidity and could also have an adverse effect on the investment
performance of the AllianceBernstein Mutual Funds.
The Adviser and approximately twelve other investment management firms were
publicly mentioned in connection with the settlement by the SEC of charges that
an unaffiliated broker/dealer violated federal securities laws relating to its
receipt of compensation for selling specific mutual funds and the disclosure of
such compensation. The SEC indicated publicly that, among other things, it was
considering enforcement action in connection with mutual funds' disclosure of
such arrangements and in connection with the practice of considering mutual
fund sales in the direction of brokerage commissions from fund portfolio
transactions. The SEC issued subpoenas to the Adviser, and the NASD issued
requests for information in connection with this matter and the Adviser
provided documents and other information to the SEC and NASD and cooperated
fully with the investigations. On June 8, 2005 the NASD announced that it had
reached a settlement with the Distributor in connection with this matter.
Management of the Adviser expects that the settlement has resolved both
regulatory inquiries described above.
On June 22, 2004, a purported class action complaint entitled AUCOIN, ET AL. V.
ALLIANCE CAPITAL MANAGEMENT L.P., ET AL. ("Aucoin Complaint") was filed against
the Adviser, Alliance Capital Management Holding L.P., Alliance Capital
Management Corporation, AXA Financial, Inc., AllianceBernstein Investment
Research & Management, Inc., certain current and former directors of the
AllianceBernstein Mutual Funds, and unnamed Doe defendants. The Aucoin
Complaint names certain of the AllianceBernstein mutual funds as nominal
defendants. The Aucoin Complaint was filed in the United States District Court
for the Southern District of New York by an alleged shareholder of an
AllianceBernstein mutual fund. The Aucoin Complaint alleges, among other
things, (i) that certain of the defendants improperly authorized the payment of
excessive commissions and other fees from fund assets to broker-dealers in
exchange for preferential marketing services, (ii) that certain of the
defendants misrepresented and omitted from registration statements and other
reports material facts concerning such payments, and (iii) that certain
defendants caused such conduct as control persons of other defendants. The
Aucoin Complaint asserts claims for violation of Sections 34(b), 36(b) and
48(a) of the Investment Company Act, Sections 206 and 215 of the Advisers Act,
breach of common law fiduciary duties, and aiding and abetting breaches of
common law fiduciary duties. Plaintiffs seek an unspecified amount of
compensatory damages and punitive damages, rescission of their contracts with
the Adviser, including recovery of all fees paid to the Adviser pursuant to
such contracts, an accounting of all fund-related fees, commissions and soft
dollar payments, and restitution of all unlawfully or discriminatorily obtained
fees and expenses.
Since June 22, 2004, numerous additional lawsuits making factual allegations
substantially similar to those in the Aucoin Complaint were filed against the
Adviser and certain other defendants, and others may be filed.
It is possible that these matters and/or other developments resulting from
these matters could result in increased redemptions of the Fund's shares or
other adverse consequences to the Fund. However, the Adviser believes that
these matters are not likely to have a material adverse effect on its ability
to perform advisory services relating to the Fund.
19
WEALTH APPRECIATION STRATEGY PORTFOLIO
FINANCIAL HIGHLIGHTS
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
CLASS A
------------------------------------
SIX MONTHS ENDED JULY 1, 2004(a) TO
JUNE 30, 2005 DECEMBER 31,
(UNAUDITED) 2004
---------------- ------------------
Net asset value, beginning of period $10.69 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (b)(c) .03 .01
Net realized and unrealized gain (loss)
on investment and foreign
currency transactions (.06) .68
Net increase (decrease) in net asset
value from operations (.03) .69
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.05) -0-
Distributions from net realized gain on
investment and foreign currency
transactions (.04) -0-
Total dividends and distributions (.09) -0-
Net asset value, end of period $10.57 $10.69
TOTAL RETURN
Total investment return based
on net asset value (d) (.29)% 6.90%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $5,863 $5,877
Ratio to average net assets of:
Expenses, net of waivers
and reimbursements (e) 1.19% 1.20%
Expenses, before waivers
and reimbursements (e) 2.48% 4.33%
Net investment income (c)(e) .54% .25%
Portfolio turnover rate 37% 14%
See footnote summary on page 21.
20
AllianceBernstein Variable Products Series Fund
_______________________________________________________________________________
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
CLASS B
--------------------------------------
SIX MONTHS ENDED JULY 1, 2004(a) TO
JUNE 30, 2005 DECEMBER 31,
(UNAUDITED) 2004
---------------- -------------------
Net asset value, beginning of period $10.67 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (b)(c) .01 .03
Net realized and unrealized gain (loss)
on investment and foreign currency
transactions (.05) .64
Net increase (decrease) in net asset
value from operations (.04) .67
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.04) -0-
Distributions from net realized gain
on investment and foreign currency
transactions (.04) -0-
Total dividends and distributions (.08) -0-
Net asset value, end of period $10.55 $10.67
TOTAL RETURN
Total investment return based
on net asset value (d) (.32)% 6.70%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $19,355 $10,416
Ratio to average net assets of:
Expenses, net of waivers
and reimbursements (e) 1.44% 1.45%
Expenses, before waivers
and reimbursements (e) 2.70% 4.78%
Net investment income (c)(e) .27% .71%
Portfolio turnover rate 37% 14%
(a) Commencement of operations.
(b) Based on average shares outstanding.
(c) Net of expenses waived and reimbursed by the Adviser.
(d) 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 return does not reflect the
deduction of taxes that a shareholder would pay on Portfolio distributions or
redemption of Portfolio shares. Total investment return calculated for a period
of less than one year is not annualized.
(e) Annualized.
21
- -------------------------------------------------------------------------------
SEMI-ANNUAL REPORT
- -------------------------------------------------------------------------------
[LOGO] ALLIANCEBERNSTEIN (R)
Investment Research and Management
AllianceBernstein Variable Products Series Fund, Inc.
Semi-Annual Report
June 30, 2005
> AllianceBernstein Balanced Wealth Strategy Portfolio
INVESTMENT PRODUCTS OFFERED
- ---------------------------
> ARE NOT FDIC INSURED
> MAY LOSE VALUE
> ARE NOT BANK GUARANTEED
- ---------------------------
YOU MAY OBTAIN A DESCRIPTION OF THE FUND'S PROXY VOTING POLICIES AND
PROCEDURES, AND INFORMATION REGARDING HOW THE FUND VOTED PROXIES RELATING TO
PORTFOLIO SECURITIES DURING THE MOST RECENT 12-MONTH PERIOD ENDED JUNE 30,
WITHOUT CHARGE. SIMPLY VISIT THE SECURITIES AND EXCHANGE COMMISSION'S (THE
"COMMISSION") WEB SITE AT WWW.SEC.GOV, OR CALL ALLIANCEBERNSTEIN AT (800)
227-4618.
THE FUND FILES ITS COMPLETE SCHEDULE OF PORTFOLIO HOLDINGS WITH THE COMMISSION
FOR THE FIRST AND THIRD QUARTERS OF EACH FISCAL YEAR ON FORM N-Q. THE FUND'S
FORMS N-Q ARE AVAILABLE ON THE COMMISSION'S WEB SITE AT WWW.SEC.GOV. THE FUND'S
FORMS N-Q MAY ALSO BE REVIEWED AND COPIED AT THE COMMISSION'S PUBLIC REFERENCE
ROOM IN WASHINGTON, DC; INFORMATION ON THE OPERATION OF THE PUBLIC REFERENCE
ROOM MAY BE OBTAINED BY CALLING (800) SEC-0330.
BALANCED WEALTH STRATEGY PORTFOLIO
FUND EXPENSES
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including sales charges (loads) on purchase payments, contingent
deferred sales charges on redemptions and (2) ongoing costs, including
management fees; distribution (12b-1) fees; and other Fund expenses. This
example is intended to help you understand your ongoing costs (in dollars) of
investing in the Fund and to compare these costs with the ongoing costs of
investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of
the period and held for the entire period as indicated below.
ACTUAL EXPENSES
The first line of the table below provides information about actual account
values and actual expenses. You may use the information in this line, together
with the amount you invested, to estimate the expenses that you paid over the
period. Simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
in the first line under the heading entitled "Expenses Paid During Period" to
estimate the expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio and an assumed annual rate of return of 5% before expenses, which is not
the Fund's actual return. The hypothetical account values and expenses may not
be used to estimate the actual ending account balance or expenses you paid for
the period. You may use this information to compare the ongoing costs of
investing in the Fund and other funds by comparing this 5% hypothetical example
with the 5% hypothetical examples that appear in the shareholder reports of
other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads), or contingent deferred sales charges on redemptions.
Therefore, the second line of the table is useful in comparing ongoing costs
only, and will not help you determine the relative total costs of owning
different funds. In addition, if these transactional costs were included, your
costs would have been higher.
BEGINNING ENDING
ACCOUNT VALUE ACCOUNT VALUE EXPENSES PAID ANNUALIZED
BALANCED WEALTH STRATEGY PORTFOLIO JANUARY 1, 2005 JUNE 30, 2005 DURING PERIOD* EXPENSE RATIO*
- ---------------------------------------------------------------------------------------------------------------
CLASS A
Actual $1,000 $1,003.28 $5.46 1.10%
Hypothetical (5% return before expenses) $1,000 $1,019.34 $5.51 1.10%
CLASS B
Actual $1,000 $1,002.17 $7.10 1.43%
Hypothetical (5% return before expenses) $1,000 $1,017.70 $7.15 1.43%
* Expenses are equal to each classes' annualized expense ratios, multiplied by
the average account value over the period, multiplied by the number of days in
the most recent fiscal half-year/365 (to reflect the one-half year period).
1
BALANCED WEALTH STRATEGY PORTFOLIO
TEN LARGEST HOLDINGS
JUNE 30, 2005 (UNAUDITED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
PERCENT OF
COMPANY U.S. $ VALUE NET ASSETS
_______________________________________________________________________________
U.S. Treasury Notes $ 2,747,580 5.3%
- -------------------------------------------------------------------------------
Citigroup, Inc. (Common Stock & Bond) 968,560 1.9
- -------------------------------------------------------------------------------
Bank of America (Common Stock & Bond) 632,756 1.2
- -------------------------------------------------------------------------------
General Electric Co. 561,330 1.1
- -------------------------------------------------------------------------------
Sprint Capital Corp. 556,444 1.1
- -------------------------------------------------------------------------------
Exxon Mobil Corp. 551,712 1.1
- -------------------------------------------------------------------------------
The Goldman Sachs Group, Inc.
(Common Stock & Bond) 531,924 1.1
- -------------------------------------------------------------------------------
Southern California Edison 511,751 1.0
- -------------------------------------------------------------------------------
Google, Inc. Cl.A 488,289 0.9
- -------------------------------------------------------------------------------
AT&T Broadband 487,740 0.9
------------ -----
- -------------------------------------------------------------------------------
$ 8,038,086 15.6%
- -------------------------------------------------------------------------------
SECTOR DIVERSIFICATION
JUNE 30, 2005 (UNAUDITED)
PERCENT OF
SECTOR U.S. $ VALUE NET ASSETS
_______________________________________________________________________________
Finance $ 14,223,785 27.4%
- -------------------------------------------------------------------------------
Construction & Housing 5,189,177 10.0
- -------------------------------------------------------------------------------
Technology/Electronics 5,119,288 9.9
- -------------------------------------------------------------------------------
Industrials 4,244,029 8.2
- -------------------------------------------------------------------------------
Medical 3,414,696 6.6
- -------------------------------------------------------------------------------
Utilities 3,287,163 6.3
- -------------------------------------------------------------------------------
U.S. Government & Government Sponsored
Agency Obligations 2,983,580 5.7
- -------------------------------------------------------------------------------
Consumer Cyclical 2,832,886 5.5
- -------------------------------------------------------------------------------
Energy 2,419,183 4.7
- -------------------------------------------------------------------------------
Capital Equipment 1,708,418 3.3
- -------------------------------------------------------------------------------
Consumer Staples 1,544,810 3.0
- -------------------------------------------------------------------------------
Industrial Commodities 816,193 1.6
- -------------------------------------------------------------------------------
Telecommunications 707,845 1.4
- -------------------------------------------------------------------------------
Transportation 208,342 0.4
------------ -----
- -------------------------------------------------------------------------------
Total Investments* 48,699,395 94.0
- -------------------------------------------------------------------------------
Cash and receivables, net of liabilities 3,102,814 6.0
------------ -----
- -------------------------------------------------------------------------------
Net Assets $ 51,802,209 100.0%
- -------------------------------------------------------------------------------
* Excludes short-term investments.
Please note: The sector classifications presented herein are based on the
sector categorization methodology of the Adviser.
2
BALANCED WEALTH STRATEGY PORTFOLIO
COUNTRY BREAKDOWN
JUNE 30, 2005 (UNAUDITED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
PERCENT OF
COUNTRY U.S. $ VALUE NET ASSETS
_______________________________________________________________________________
United States $ 37,013,669 71.5%
- -------------------------------------------------------------------------------
United Kingdom 1,849,336 3.6
- -------------------------------------------------------------------------------
France 1,471,124 2.8
- -------------------------------------------------------------------------------
Japan 1,461,162 2.8
- -------------------------------------------------------------------------------
Switzerland 995,386 1.9
- -------------------------------------------------------------------------------
Canada 726,825 1.4
- -------------------------------------------------------------------------------
Australia 699,027 1.4
- -------------------------------------------------------------------------------
Other* 4,482,866 8.6
------------ -----
- -------------------------------------------------------------------------------
Total Investments** 48,699,395 94.0
- -------------------------------------------------------------------------------
Cash and receivables, net of liabilities 3,102,814 6.0
------------ -----
- -------------------------------------------------------------------------------
Net Assets $ 51,802,209 100.0%
- -------------------------------------------------------------------------------
* The Portfolio's country breakdown is expressed as a percentage of net assets
and may vary over time. "Other" represents less than 1% weightings in the
following countries: Belgium, Bermuda, Brazil, Cayman Islands, China, Egypt,
Finland, Germany, Greece, Hong Kong, Hungary, India, Ireland, Israel, Italy,
Korea, Mexico, Netherlands, Norway, Panama, Singapore, South Africa, Spain,
Sweden, Taiwan and Thailand.
** Excludes short-term investments.
3
BALANCED WEALTH STRATEGY PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2005 (UNAUDITED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------------
COMMON STOCKS-60.6%
UNITED STATES INVESTMENTS-38.7%
FINANCE-9.3%
BANKING-4.1%
Bank of America Corp. 7,600 $ 346,636
Citigroup, Inc. 12,100 559,382
Fannie Mae 2,400 140,160
Freddie Mac 1,900 123,937
Huntington Bancshares, Inc. 2,400 57,936
JPMorgan Chase & Co. 7,100 250,772
KeyCorp 700 23,205
Mellon Financial Corp. 2,400 68,856
National City Corp. 2,400 81,888
PNC Financial Services Group, Inc. 450 24,507
SunTrust Banks, Inc. 1,300 93,912
U.S. Bancorp 3,000 87,600
Wachovia Corp. 3,600 178,560
Wells Fargo & Co. 1,700 104,686
--------------
2,142,037
--------------
FINANCIAL SERVICES-2.4%
Countrywide Financial Corp. 1,000 38,610
Federated Investors, Inc. 1,050 31,511
Franklin Resources, Inc. 2,200 169,356
Legg Mason, Inc. 900 93,699
Lehman Brothers Holdings, Inc. 1,000 99,280
MBIA, Inc. 600 35,586
MBNA Corp. 4,350 113,796
Merrill Lynch & Co., Inc. 4,000 220,040
Morgan Stanley 2,400 125,928
The Charles Schwab Corp. 3,500 39,480
The Goldman Sachs Group, Inc. 2,275 232,096
Waddell & Reed Financial, Inc. 1,200 22,200
--------------
1,221,582
--------------
INSURANCE-2.8%
AFLAC, Inc. 1,700 73,576
American International Group, Inc. 6,850 397,985
Genworth Financial, Inc. 2,000 60,460
MetLife, Inc. 1,800 80,892
The Allstate Corp. 300 17,925
The Chubb Corp. 900 77,049
The Hartford Financial Services Group, Inc. 1,100 82,258
The Progressive Corp. 700 69,167
The St. Paul Travelers Cos., Inc. 2,400 94,872
Torchmark Corp. 700 36,540
UnitedHealth Group, Inc. 5,600 291,984
WellPoint, Inc. (a) 2,300 160,172
--------------
1,442,880
--------------
4,806,499
--------------
TECHNOLOGY/ELECTRONICS-7.5%
DATA PROCESSING-5.4%
Agere Systems, Inc. (a) 2,500 30,000
Apple Computer, Inc. (a) 8,300 305,523
Arrow Electronics, Inc. (a) 950 25,802
Avnet, Inc. (a) 1,800 40,554
Dell, Inc. (a) 10,200 403,002
Electronic Arts, Inc. (a) 5,400 305,694
Electronic Data Systems Corp. 3,200 61,600
Google, Inc. Cl.A (a) 1,660 488,289
Hewlett-Packard Co. 6,800 159,868
International Business Machines Corp. 1,000 74,200
Microsoft Corp. 8,300 206,172
Network Appliance, Inc. (a) 3,700 104,599
Sanmina-SCI Corp. (a) 9,400 51,418
Solectron Corp. (a) 15,400 58,366
Tech Data Corp. (a) 1,400 51,254
Yahoo!, Inc. (a) 13,000 450,450
--------------
2,816,791
--------------
ELECTRICAL & ELECTRONICS-2.1%
ADC Telecommunications, Inc. (a) 1,600 34,832
Broadcom Corp. Cl.A (a) 5,150 182,877
Corning, Inc.(a) 14,500 240,990
Juniper Networks, Inc. (a) 11,300 284,534
QUALCOMM, Inc. 9,900 326,799
Tellabs, Inc. (a) 3,200 27,840
--------------
1,097,872
--------------
3,914,663
--------------
CONSTRUCTION & HOUSING-4.5%
BUILDING MATERIALS-0.2%
Martin Marietta Materials, Inc. 800 55,296
Vulcan Materials Co. 800 51,992
--------------
107,288
--------------
CONSTRUCTION & HOUSING-0.3%
Pulte Homes, Inc. 1,450 122,162
--------------
REAL ESTATE-4.0%
Alexandria Real Estate Equities, Inc. 1,025 75,286
Archstone-Smith Trust 1,750 67,585
Arden Realty, Inc. 650 23,387
Avalonbay Communities, Inc. 550 44,440
Boston Properties, Inc. 1,175 82,250
Brookfield Properties Corp. 2,500 72,000
Camden Property Trust 675 36,281
CarrAmerica Realty Corp. 700 25,326
4
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------------
Corporate Office Properties Trust 2,000 $ 58,900
Cousins Properties, Inc. 600 17,748
Developers Diversified Realty Corp. 2,500 114,899
Duke Realty Corp. 1,375 43,533
EastGroup Properties, Inc. 1,150 48,427
Equity Office Properties Trust 1,100 36,410
Equity Residential 2,450 90,209
Essex Property Trust, Inc. 550 45,683
First Industrial Realty Trust, Inc. 250 9,975
General Growth Properties, Inc. 2,725 111,970
Glenborough Realty Trust, Inc. 825 16,987
iStar Financial, Inc. 950 39,511
Kimco Realty Corp. 700 41,237
LaSalle Hotel Properties 700 22,967
Mack-Cali Realty Corp. 625 28,313
Maguire Properties, Inc. 1,250 35,425
Mid-America Apartment Communities, Inc. 250 11,355
Pan Pacific Retail Properties, Inc. 625 41,488
Pennsylvania Real Estate Investment Trust 400 19,000
Prentiss Properties Trust 750 27,330
ProLogis 3,925 157,941
Public Storage, Inc. 950 60,088
Reckson Associates Realty Corp. 250 8,388
Regency Centers Corp. 1,100 62,920
Simon Property Group, Inc. 2,200 159,477
SL Green Realty Corp. 100 6,450
Sovran Self Storage, Inc. 350 15,911
Sunstone Hotel Investors, Inc. 1,800 43,668
Tanger Factory Outlet Centers, Inc. 900 24,237
The Macerich Co. 400 26,820
The Mills Corp. 825 50,152
United Dominion Realty Trust, Inc. 2,900 69,745
Vornado Realty Trust 1,175 94,470
Windrose Medical Properties Trust 1,350 18,941
--------------
2,087,130
--------------
2,316,580
--------------
CONSUMER CYCLICAL-4.2%
BROADCASTING & PUBLISHING-1.0%
Comcast Corp. Cl. A (a) 700 21,490
Comcast Corp. Special Cl.A (a) 2,700 80,865
The E.W. Scripps Co. Cl.A 3,500 170,800
The Walt Disney Co. 700 17,626
Time Warner, Inc. (a) 12,100 202,191
Viacom, Inc. Cl.B 400 12,808
--------------
505,780
--------------
BUSINESS & PUBLIC SERVICES-0.1%
The Interpublic Group of Cos., Inc. (a) 3,800 46,284
--------------
LEISURE & TOURISM-0.8%
Hilton Hotels Corp. 900 21,465
Host Marriott Corp. 6,100 106,750
McDonald's Corp. 3,500 97,125
Starbucks Corp. (a) 2,800 144,648
Starwood Hotels & Resorts Worldwide, Inc. 1,175 68,820
--------------
438,808
--------------
MERCHANDISING-2.0%
eBay, Inc. (a) 10,400 343,304
Federated Department Stores, Inc. 250 18,320
Limited Brands 2,300 49,266
Lowe's Cos., Inc. 4,300 250,346
Office Depot, Inc. (a) 2,700 61,668
Target Corp. 5,900 321,019
--------------
1,043,923
--------------
RECREATION & OTHER CONSUMER-0.1%
Mattel, Inc. 2,800 51,240
--------------
TEXTILES & APPAREL-0.2%
Jones Apparel Group, Inc. 1,800 55,872
V.F. Corp. 500 28,610
--------------
84,482
--------------
2,170,517
--------------
5
BALANCED WEALTH STRATEGY PORTFOLIO
PORTFOLIO OF INVESTMENTS
(CONTINUED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------------
MEDICAL-4.2%
HEALTH & PERSONAL CARE-4.2%
Amgen, Inc. (a) 2,800 $ 169,288
Avon Products, Inc. 5,500 208,175
Bristol-Myers Squibb Co. 4,000 99,920
Eli Lilly & Co. 3,800 211,698
Genentech, Inc. (a) 3,800 305,064
Gilead Sciences, Inc. (a) 2,400 105,576
HCA, Inc. 900 51,003
Johnson & Johnson 700 45,500
Medco Health Solutions, Inc. (a) 1,100 58,696
Merck & Co., Inc. 4,400 135,520
Pfizer, Inc. 10,400 286,832
St. Jude Medical, Inc. (a) 6,900 300,909
Zimmer Holdings, Inc. (a) 2,500 190,425
--------------
2,168,606
--------------
ENERGY-2.7%
ENERGY EQUIPMENT & SERVICES-0.6%
ENSCO International, Inc. 1,400 50,050
Halliburton Co. 4,900 234,318
--------------
284,368
--------------
ENERGY SOURCES-2.1%
ChevronTexaco Corp. 4,300 240,456
ConocoPhillips 2,100 120,729
Exxon Mobil Corp. 9,600 551,712
Marathon Oil Corp. 1,500 80,055
Occidental Petroleum Corp. 1,300 100,009
--------------
1,092,961
--------------
1,377,329
--------------
CAPITAL EQUIPMENT-2.1%
AEROSPACE & DEFENSE-0.3%
Goodrich Corp. 1,200 49,152
Northrop Grumman Corp. 900 49,725
The Boeing Co. 800 52,800
--------------
151,677
--------------
AUTOMOBILES-0.4%
Autoliv, Inc. 1,200 52,560
BorgWarner, Inc. 1,000 53,670
Cooper Tire & Rubber Co. 900 16,713
Johnson Controls, Inc. 200 11,266
Lear Corp. 1,400 50,932
--------------
185,141
--------------
INDUSTRIAL COMPONENTS-0.1%
Eaton Corp. 1,000 59,900
--------------
MULTI-INDUSTRY-1.3%
Crane Co. 800 21,040
General Electric Co. 16,200 561,330
Hubbell, Inc. Cl.B 1,250 55,125
Textron, Inc. 800 60,680
--------------
698,175
--------------
1,094,893
--------------
CONSUMER STAPLES-1.9%
BEVERAGES & TOBACCO-0.7%
Altria Group, Inc. 2,800 181,048
Kraft Foods, Inc. 600 19,086
PepsiCo, Inc. 900 48,537
The Coca-Cola Co. 1,300 54,275
UST, Inc. 1,200 54,792
--------------
357,738
--------------
FOOD & HOUSEHOLD PRODUCTS-1.2%
General Mills, Inc. 1,400 65,506
Kellogg Co. 700 31,108
Safeway, Inc. 2,700 60,993
SUPERVALU, Inc. 1,500 48,915
The Kroger Co. (a) 3,700 70,411
The Procter & Gamble Co. 5,000 263,750
Whole Foods Market, Inc. 900 106,470
--------------
647,153
--------------
1,004,891
--------------
TELECOMMUNICATIONS-0.8%
BellSouth Corp. 1,100 29,227
SBC Communications, Inc. 3,300 78,375
Sprint Corp. (FON Group) 4,300 107,887
Verizon Communications, Inc. 5,900 203,845
--------------
419,334
--------------
INDUSTRIAL COMMODITIES-0.7%
CHEMICAL-0.2%
E. I. du Pont de Nemours & Co. 1,400 60,214
PPG Industries, Inc. 1,100 69,036
--------------
129,250
--------------
FOREST & PAPER-0.4%
Georgia-Pacific Corp. 1,200 38,160
International Paper Co. 1,800 54,378
Kimberly-Clark Corp. 1,200 75,108
Smurfit-Stone Container Corp. (a) 3,600 36,612
--------------
204,258
--------------
METAL - STEEL-0.1%
United States Steel Corp. 1,600 54,992
--------------
388,500
--------------
6
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------------
UTILITIES-0.4%
ELECTRIC & GAS UTILITY-0.4%
American Electric Power Co., Inc. 1,400 $ 51,618
Entergy Corp. 1,000 75,550
Wisconsin Energy Corp. 1,550 60,450
--------------
187,618
--------------
TRANSPORTATION-0.4%
TRANSPORTATION - ROAD & RAIL-0.4%
Burlington Northern Santa Fe Corp. 1,000 47,080
CSX Corp. 1,500 63,990
Norfolk Southern Corp. 2,200 68,112
Union Pacific Corp. 450 29,160
--------------
208,342
--------------
Total United States Investments
(cost $18,820,944) 20,057,772
--------------
FOREIGN INVESTMENTS-21.9%
AUSTRALIA-1.4%
Aristocrat Leisure Ltd. 2,671 23,468
Centro Properties Group 4,600 20,565
Coles Myer Ltd. 5,890 41,403
DB RREEF Trust 39,979 41,416
General Property Trust 18,000 49,934
Macquarie CountryWide Trust 52,600 76,591
Macquarie Goodman Group 12,600 39,132
Rinker Group Ltd. 7,506 79,501
Stockland 8,400 35,212
Valad Property Group 26,000 26,361
Westfield Group 17,400 234,421
Westpac Banking Corp. 2,049 31,023
--------------
699,027
--------------
BELGIUM-0.2%
Delhaize Group 1,400 83,854
--------------
BERMUDA-0.8%
Marvell Technology Group Ltd. (a) 6,600 251,063
Nabors Industries Ltd. (a) 2,700 163,674
--------------
414,737
--------------
BRAZIL-0.2%
Petroleo Brasileiro S.A. (ADR) 2,200 106,160
--------------
CANADA-1.2%
Bank of Nova Scotia 2,500 82,721
Boardwalk Real Estate Investment Trust 1,500 23,996
Canadian Apartment Properties Real Estate
Investment Trust 2,000 24,208
Canadian Natural Resources Ltd. 2,600 94,221
Canadian Real Estate Investment Trust 1,750 27,581
Cominar Real Estate Investment Trust 1,600 24,643
Dundee Real Estate Investment Trust 600 13,095
H&R Real Estate Investment Trust 2,700 43,017
InnVest Real Estate Investment Trust 2,400 23,702
Manulife Financial Corp. 1,800 85,960
Primaris Retail Real Estate Investment Trust 2,150 24,831
RioCan Real Estate Investment Trust 6,300 102,840
Summit Real Estate Investment Trust 3,000 50,220
--------------
621,035
--------------
CHINA-0.1%
China Petrolium & Chemical Corp. 114,000 44,436
China Shenhua Energy Co., Ltd. (a) 30,000 28,954
--------------
73,390
--------------
EGYPT-0.0%
Orascom Telecom Holding SAE (GDR) 175 8,874
--------------
FINLAND-0.1%
Sponda Oyj 4,900 50,397
--------------
FRANCE-2.8%
Arcelor 5,000 97,544
Assurances Generales de France (AGF) 1,000 81,709
BNP Paribas S.A. 1,236 84,419
CapGemini, SA (a) 970 30,692
Credit Agricole, SA 2,310 58,363
Essilor International, SA 254 17,324
European Aeronautic Defence and Space Co. 2,050 65,043
Groupe Danone 1,033 90,507
Klepierre 1,265 120,449
Renault, SA 1,755 154,145
Sanofi-Aventis 2,350 192,461
Societe Generale 600 60,842
Total, SA 612 143,206
Unibail 1,700 218,075
Vinci, SA 678 56,345
--------------
1,471,124
--------------
7
BALANCED WEALTH STRATEGY PORTFOLIO
PORTFOLIO OF INVESTMENTS
(CONTINUED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------------
GERMANY-0.8%
Continental AG 1,400 $ 100,402
Depfa Bank Plc 2,530 40,590
HeidelbergCement AG 400 28,753
Man AG 900 37,269
Muenchener Rueckversicherungs-Gesellschaft AG
(MunichRe) 800 84,791
Premiere AG (a) 632 21,797
SAP AG 526 91,182
--------------
404,784
--------------
GREECE-0.0%
EFG Eurobank Ergasias 681 20,950
--------------
HONG KONG-0.9%
Esprit Holdings Ltd. 12,000 86,532
Henderson Land Development Co., Ltd. 16,000 76,234
Kerry Properties Ltd. 36,000 79,888
Li & Fung Ltd. 22,000 45,531
Sun Hung Kai Properties Ltd. 18,000 177,039
--------------
465,224
--------------
HUNGARY-0.1%
Mol Magyar Olaj-es Gazipari Rt. 500 41,902
--------------
INDIA-0.0%
Infosys Technologies Ltd. 256 13,865
--------------
IRELAND-0.4%
Allied Irish Banks Plc 3,063 65,879
Anglo Irish Bank Corp. Plc 4,942 61,249
CRH Plc 3,713 97,632
--------------
224,760
--------------
ISRAEL-0.5%
Bank Leumi Le-Israel 14,400 37,056
Teva Pharmaceutical Industries Ltd. (ADR) 6,800 211,751
--------------
248,807
--------------
ITALY-0.4%
Beni Stabili SpA 22,700 23,186
Eni S.p.A. 6,452 165,783
Fastweb (a) 548 23,630
--------------
212,599
--------------
JAPAN-2.8%
Aeon Credit Service Co., Ltd. 800 49,930
Astellas Pharma, Inc. 1,100 37,465
Canon, Inc. 3,800 199,175
Denso Corp. 2,900 65,850
Honda Motor Co., Ltd. 3,100 152,255
Hoya Corp. 900 103,398
Japan Retail Fund Investment Corp. 8 68,631
Japan Tobacco, Inc. 6 79,765
JFE Holdings, Inc. 3,200 78,647
Keyence Corp. 400 89,171
Mitsubishi Corp. 7,200 97,373
Mitsubishi Tokyo Financial
Group, Inc. 6 50,578
Mitsui Fudosan Co., Ltd. 7,000 78,067
Nippon Building Fund, Inc. 4 36,063
Nitto Denko Corp. 1,100 62,676
Orix Corp. 700 104,524
Sumitomo Mitsui Financial Group, Inc. 16 107,594
--------------
1,461,162
--------------
KOREA-0.5%
Hyundai Motor Co. 700 38,561
Kookmin Bank 900 40,618
POSCO 600 104,493
Samsung Electronics Co., Ltd. 80 37,888
Shinhan Financial Group Co., Ltd. 1,570 40,456
--------------
262,016
--------------
MEXICO-0.2%
America Movil, SA de C.V. (ADR) 1,100 65,571
Grupo Televisa, SA (ADR) 400 24,836
Wal-Mart de Mexico, SA de C.V. 4,700 19,128
--------------
109,535
--------------
NETHERLANDS-0.7%
Eurocommercial Properties NV 375 13,654
ING Groep NV 7,975 224,155
Rodamco Europe NV 1,350 110,570
Wereldhave NV 255 27,174
--------------
375,553
--------------
NORWAY-0.1%
Norsk Hydro ASA 519 47,180
--------------
PANAMA-0.3%
Carnival Corp. 2,700 147,285
--------------
SINGAPORE-0.7%
Ascendas Real Estate Investment Trust 80,500 105,400
CapitaMall Trust 53,000 74,761
Flextronics International Ltd. (a) 6,800 89,828
Singapore Telecommunications Ltd. 51,000 83,611
--------------
353,600
--------------
SOUTH AFRICA-0.0%
MTN Group Ltd. 1,881 12,474
--------------
8
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
SHARES OR
PRINCIPAL
AMOUNT
COMPANY (000) U.S. $ VALUE
- -------------------------------------------------------------------------------
SPAIN-0.6%
Banco Bilbao Vizcaya Argentaria, SA 5,183 $ 79,636
Endesa, SA 3,700 86,005
Gestevision Telecinco, SA 497 11,601
Industria de Diseno Textil, SA 440 11,306
Inmobiliaria Colonial, SA 800 42,597
Repsol YPF, SA 3,200 81,210
--------------
312,355
--------------
SWEDEN-0.1%
Telefonaktiebolaget LM Ericsson 7,700 24,567
--------------
SWITZERLAND-1.9%
Alcon, Inc. 3,300 360,854
Compagnie Financiere Richemont AG 2,530 84,832
Credit Suisse Group 4,080 159,926
Nobel Biocare Holding AG 313 63,392
Novartis AG 2,237 106,205
Roche Holding AG 901 113,686
Synthes, Inc. 217 23,781
UBS AG 1,061 82,710
--------------
995,386
--------------
TAIWAN-0.4%
Asustek Computer, Inc. 15,000 42,208
AU Optronics Corp. (ADR) 1,400 23,716
Hon Hai Precision Industry Co., Ltd. 6,000 31,100
Quanta Computer, Inc. (GDR) (a) 4,500 43,056
Taiwan Semiconductor Manufacturing Co., Ltd. 13,649 23,763
Taiwan Semiconductor Manufacturing Co., Ltd. (ADR) 6,825 62,244
--------------
226,087
--------------
THAILAND-0.1%
PTT Public Co., Ltd. 4,400 23,211
--------------
UNITED KINGDOM-3.6%
02 Plc 6,481 15,821
Aviva Plc 7,100 78,837
BHP Billiton Plc 1,606 20,473
BP Plc 9,800 101,917
British Land Co. Plc 4,250 66,584
Brixton Plc 3,100 19,750
Capita Group Plc 7,256 47,709
Capital & Regional Plc 3,032 43,838
Carnival Plc 1,154 65,431
Derwent Valley Holdings Plc 1,200 25,544
Enterprise Inns Plc 3,068 45,757
Friends Provident Plc 12,920 42,001
GlaxoSmithKline Plc 1,600 38,662
Hammerson Plc 2,850 45,323
HBOS Plc 5,440 83,638
Land Securities Group Plc 5,150 127,881
Liberty International Plc 2,225 38,547
Reckitt Benckiser Plc 3,078 90,416
Royal Bank of Scotland Group Plc 7,424 223,527
SABMiller Plc 4,503 70,156
Slough Estates Plc 7,100 66,063
Smith & Nephew Plc 5,972 58,712
Standared Chartered 3,173 57,808
Tesco Plc 21,980 125,221
Vodafone Group Plc 32,300 78,530
Wolseley Plc 312 6,540
WPP Group Plc 9,840 100,790
Xstrata Plc 3,320 63,860
--------------
1,849,336
--------------
Total Foreign Investments
(cost $11,035,660) 11,361,236
--------------
Total Common Stocks
(cost $29,856,604) 31,419,008
--------------
CORPORATE DEBT OBLIGATIONS-27.6%
AUTOMOTIVE-1.0%
Daimlerchrysler North America Holdings
4.75%, 1/15/08 $ 200 200,773
Ford Motor Credit Co.
7.375%, 10/28/09 300 293,156
--------------
493,929
--------------
BANKS-2.4%
Bank of America Corp.
7.40%, 1/15/11 250 286,120
Chuo Mitsui Trust & Banking
5.506%, 12/15/49 (b)(c) 150 147,364
HSBC Finance Corp.
4.75%, 4/15/10 300 304,257
HVB Funding Trust I
8.741%, 6/30/31 (b) 150 205,048
Mizuho Finance (Cayman Islands)
8.375%, 12/29/49 200 218,700
Wachovia Corp.
5.25%, 8/01/14 100 104,389
--------------
1,265,878
--------------
FINANCE-11.1%
Assurant, Inc.
5.625%, 2/15/14 300 315,724
Bear Stearns Co., Inc.
2.875%, 7/02/08 300 288,694
Boeing Capital Corp.
6.50%, 2/15/12 400 447,437
CIT Group, Inc.
5.50%, 11/30/07 300 308,411
9
BALANCED WEALTH STRATEGY PORTFOLIO
PORTFOLIO OF INVESTMENTS
(CONTINUED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
PRINCIPAL
AMOUNT
COMPANY (000) U.S. $ VALUE
- -------------------------------------------------------------------------------
Citigroup, Inc.
5.00%, 9/15/14 $ 400 $ 409,178
Colonial Realty LP
4.75%, 2/01/10 150 148,822
Credit Suisse First Boston USA, Inc.
4.125%, 1/15/10 200 198,587
4.625%, 1/15/08 100 101,081
Duke Capital LLC
5.668%, 8/15/14 150 155,832
General Electric Capital Corp.
6.75%, 3/15/32 200 246,798
Series A
3.50%, 12/05/07 200 197,206
Goldman Sachs Group, Inc.
4.125%, 1/15/08 300 299,828
International Lease Finance Corp.
5.00%, 4/15/10 300 305,914
JPMorgan Chase & Co.
5.25%, 5/30/07 200 204,180
Lehman Brothers Holdings, Inc.
4.00%, 1/22/08 300 298,928
MBNA America Bank NA
5.375%, 1/15/08 350 359,751
Morgan Stanley
3.27%, 1/12/07 (d) 100 100,076
3.875%, 1/15/09 100 98,731
North Front Pass-Thru Trust
5.81%, 12/15/24 (b)(c) 250 257,606
Sanwa Bank Ltd.
7.40%, 6/15/11 150 169,821
TXU Australia LP
6.15%, 11/15/13 (b) 238 259,994
USA Education
Series A
5.625%, 4/10/07 100 102,525
Washington Mutual, Inc.
4.20%, 1/15/10 400 396,803
XL Capital Ltd.
5.25%, 9/15/14 100 101,433
--------------
5,773,360
--------------
INDUSTRIALS-5.7%
AOL Time Warner
6.875%, 5/01/12 200 225,684
AT&T Broadband
8.375%, 3/15/13 400 487,740
British Sky Broadcasting
8.20%, 7/15/09 100 113,199
Burlington Northern Santa Fe
4.875%, 1/15/15 100 101,329
Cox Communications, Inc.
4.625%, 1/15/10 100 99,736
CSX Corp.
5.50%, 8/01/13 400 419,354
CVS Corp.
4.00%, 9/15/09 100 99,082
Federated Department Stores, Inc.
6.625%, 4/01/11 100 110,310
Kraft Foods, Inc.
4.125%, 11/12/09 325 322,242
Kroger Co.
4.95%, 1/15/15 200 198,201
News America, Inc.
6.55%, 3/15/33 100 108,473
PHH Corp.
6.00%, 3/01/08 150 154,618
Raytheon Co.
4.85%, 1/15/11 100 101,490
Republic Services, Inc.
6.086%, 3/15/35 (b) 150 158,453
Safeway, Inc.
5.625%, 8/15/14 50 51,891
Tyco International Group, SA
6.00%, 11/15/13 100 108,749
Weyerhaeuser Co.
7.375%, 3/15/32 100 117,918
--------------
2,978,469
--------------
OIL-1.5%
Devon Financing Corp.
6.875%, 9/30/11 300 335,690
FPL Group Capital, Inc.
Series A
4.086%, 2/16/07 100 99,969
Sunoco, Inc.
4.875%, 10/15/14 150 150,824
Valero Energy Corp.
7.50%, 4/15/32 150 185,148
--------------
771,631
--------------
TELECOMMUNICATIONS-2.9%
AT&T Wireless Services, Inc.
7.875%, 3/01/11 100 116,217
Bellsouth Corp.
4.20%, 9/15/09 300 298,936
SBC Communications
4.125%, 9/15/09 300 297,514
5.625%, 6/15/16 100 105,439
Sprint Capital Corp.
8.75%, 3/15/32 400 556,444
Telus Corp. (Canada)
7.50%, 6/01/07 100 105,790
--------------
1,480,340
--------------
10
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
PRINCIPAL
AMOUNT
COMPANY (000) U.S. $ VALUE
- -------------------------------------------------------------------------------
UTILITIES-3.0%
Alabama Power Capital Trust
5.50%, 10/01/42 (c) $ 174 $ 179,351
Ohio Power Co.
Series F
5.50%, 2/15/13 100 105,626
Pacific Gas & Electric
4.80%, 3/01/14 300 300,740
6.05%, 3/01/34 100 110,209
Progress Energy, Inc.
6.85%, 4/15/12 100 111,093
Southern California Edison
Series 05-A
5.00%, 1/15/16 500 511,751
Verizon Florida, Inc.
Series F
6.125%, 1/15/13 200 214,430
--------------
1,533,200
--------------
Total Corporate Debt Obligations
(cost $14,202,885) 14,296,807
--------------
U.S. GOVERNMENT & GOVERNMENT SPONSORED
AGENCY OBLIGATIONS-5.8%
U.S. Treasury Bond
5.375%, 2/15/31 200 236,000
U.S. Treasury Notes
4.00%, 3/15/10-2/15/15 2,375 2,399,598
4.25%, 11/15/14 340 347,982
--------------
Total U.S. Government & Government Sponsored
Agency Obligations
(cost $2,918,119) 2,983,580
--------------
SHORT-TERM INVESTMENT-4.2%
TIME DEPOSIT-4.2%
The Bank of New York,
2.063% 7/01/05
(cost $2,198,000) 2,198 2,198,000
--------------
TOTAL INVESTMENTS-98.2%
(cost $49,175,608) 50,897,395
Other assets less liabilities-1.8% 904,814
--------------
NET ASSETS-100% $ 51,802,209
==============
FINANCIAL FUTURES CONTRACTS PURCHASED (SEE NOTE D)
NUMBER OF EXPIRATION ORIGINAL VALUE AT UNREALIZED
TYPE CONTRACTS MONTH VALUE JUNE 30, 2005 APPRECIATION
- -----------------------------------------------------------------------------------------------------
Euro Stoxx September
50 Index 17 2005 $646,934 $657,913 $10,979
(a) Non-income producing security.
(b) Securities are exempt from registration under Rule 144A of the Securities
Act of 1933. These securities are considered liquid and may be resold in
transactions exempt from registration, normally to qualified institutional
buyers. At June 30, 2005, the aggregate market value of these securities
amounted to $1,028,465, which represents 2.0 % of net assets.
(c) Variable rate coupon, rate shown as of June 30, 2005.
(d) Coupon increases periodically based on a predetermined schedule. Stated
interest rate in effect at June 30, 2005.
Glossary of Terms:
ADR - American Depositary Receipt
GDR - Global Depositary Receipt
See Notes to Financial Statements.
11
BALANCED WEALTH STRATEGY PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2005 (UNAUDITED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $49,175,608) $ 50,897,395
Cash 228
Foreign cash, at value (cost $770,293) 761,918(a)
Receivable for investment securities sold and foreign
currency contracts 3,095,509
Dividends and interest receivable 311,720
Receivable for capital stock sold 124,489
Receivable for variation margin on futures contracts 16,514
------------
Total assets 55,207,773
------------
LIABILITIES
Payable for investment securities purchased and foreign
currency contracts 3,321,697
Advisory fee payable 22,680
Distribution fee payable 8,435
Transfer agent fee payable 55
Foreign capital gain tax payable 230
Accrued expenses 52,467
------------
Total liabilities 3,405,564
------------
NET ASSETS $ 51,802,209
============
COMPOSITION OF NET ASSETS
Capital stock, at par $ 4,873
Additional paid-in capital 50,071,712
Undistributed net investment income 217,224
Accumulated net realized loss on investment and foreign
currency transactions (216,349)
Net unrealized appreciation of investments and foreign
currency denominated assets and liabilities 1,724,749
------------
$ 51,802,209
============
CLASS A SHARES
Net assets $ 9,119,623
============
Shares of capital stock outstanding 855,997
============
Net asset value per share $ 10.65
============
CLASS B SHARES
Net assets $ 42,682,586
============
Shares of capital stock outstanding 4,017,385
============
Net asset value per share $ 10.62
============
(a) An amount of U.S. $49,390 has been segregated as collateral for the
financial futures contracts outstanding at June 30, 2005.
See Notes to Financial Statements.
12
BALANCED WEALTH STRATEGY PORTFOLIO
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 2005 (UNAUDITED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
INVESTMENT INCOME
Interest $ 328,517
Dividends (net of foreign taxes withheld of $14,486) 225,354
------------
Total investment income 553,871
------------
EXPENSES
Advisory fee 104,711
Distribution fee -- Class B 36,198
Custodian 126,341
Administrative 36,250
Audit 20,730
Printing 2,809
Directors' fees 496
Legal 422
Transfer agency 403
Miscellaneous 6,224
------------
Total expenses 334,584
Less: expenses waived and reimbursed by the Adviser
(see Note B) (79,216)
------------
Net expenses 255,368
------------
Net investment income 298,503
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENT AND
FOREIGN CURRENCY TRANSACTIONS
Net realized gain (loss) on:
Investment transactions (158,804)
Futures 180,657
Foreign currency transactions (172,063)
Net change in unrealized appreciation/depreciation of:
Investments 469,854
Futures (24,089)
Foreign currency denominated assets and liabilities (5,446)
------------
Net gain on investment and foreign currency transactions 290,109
------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 588,612
============
See Notes to Financial Statements.
13
BALANCED WEALTH STRATEGY PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
JULY 1,
SIX MONTHS ENDED 2004(a) TO
JUNE 30, 2005 DECEMBER 31,
(UNAUDITED) 2004
============== ==============
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS
Net investment income $ 298,503 $ 119,251
Net realized gain (loss) on investment and
foreign currency transactions (150,210) 71,945
Net change in unrealized appreciation/
depreciation of investments and
foreign currency denominated assets
and liabilities 440,319 1,284,430
-------------- --------------
Net increase in net assets from operations 588,612 1,475,626
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM
Net investment income
Class A (41,650) -0-
Class B (176,967) -0-
Net realized gain on investment and foreign
currency transactions
Class A (22,100) -0-
Class B (97,897) -0-
CAPITAL STOCK TRANSACTIONS
Net increase 24,597,578 25,479,007
-------------- --------------
Total increase 24,847,576 26,954,633
NET ASSETS
Beginning of period 26,954,633 -0-
-------------- --------------
End of period (including undistributed
net investment income of $217,224 and
$137,338, respectively) $ 51,802,209 $ 26,954,633
============== ==============
(a) Commencement of operations.
See Notes to Financial Statements.
14
BALANCED WEALTH STRATEGY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2005 (UNAUDITED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
NOTE A: SIGNIFICANT ACCOUNTING POLICIES
The AllianceBernstein Balanced Wealth Strategy Portfolio (the "Portfolio") is a
series of AllianceBernstein Variable Products Series Fund, Inc. (the "Fund").
The Portfolio's investment objective is to seek long-term growth of capital.
The Fund was incorporated in the State of Maryland on November 17, 1987, as an
open-end series investment company. The Fund offers twenty-three separately
managed pools of assets which have differing investment objectives and
policies. The Portfolio commenced operations on July 1, 2004. The Portfolio
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.
The Portfolio 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
the Portfolio's net asset value per share.
The financial statements have been prepared in conformity with U.S. generally
accepted accounting principles, which require management to make certain
estimates and assumptions that affect the reported amounts of assets and
liabilities in the financial statements and amounts of income and expenses
during the reporting period. Actual results could differ from those estimates.
Additional information about some of the items discussed in these Notes to
Financial Statements is contained in the Fund's Statement of Additional
Information, which is available upon request. The following is a summary of
significant accounting policies followed by the Portfolio.
1. SECURITY VALUATION
Portfolio securities are valued at their current market value determined on the
basis of market quotations or, if market quotations are not readily available
or are deemed unreliable, at "fair value" as determined in accordance with
procedures established by and under the general supervision of the Fund's Board
of Directors.
In general, the market value of securities which are readily available and
deemed reliable are determined as follows. Securities listed on a national
securities exchange or on a foreign securities exchange are valued at the last
sale price at the close of the exchange or foreign securities exchange. If
there has been no sale on such day, the securities are valued at the mean of
the closing bid and asked prices on such day. Securities listed on more than
one exchange are valued by reference to the principal exchange on which the
securities are traded; securities not listed on an exchange but traded on The
NASDAQ Stock Market, Inc. ("NASDAQ") are valued in accordance with the NASDAQ
Official Closing Price; listed put or call options are valued at the last sale
price. If there has been no sale on that day, such securities will be valued at
the closing bid prices on that day; open futures contracts and options thereon
are valued using the closing settlement price or, in the absence of such a
price, the most recent quoted bid price. If there are no quotations available
for the day of valuation, the last available closing settlement price is used;
securities traded in the over-the-counter market, ("OTC") (but excluding
securities traded on NASDAQ) are valued at the mean of the current bid and
asked prices as reported by the National Quotation Bureau or other comparable
sources; U.S. Government securities and other debt instruments having 60 days
or less remaining until maturity are valued at amortized cost if their original
maturity was 60 days or less; or by amortizing their fair value as of the 61st
day prior to maturity if their original term to maturity exceeded 60 days;
fixed-income securities, including mortgage backed and asset backed securities,
may be valued on the basis of prices provided by a pricing service or at a
price obtained from one or more of the major broker/dealers. In cases where
broker/dealer quotes are obtained, Alliance Capital Management, L.P. (the
"Adviser") may establish procedures whereby changes in market yields or spreads
are used to adjust, on a daily basis, a recently obtained quoted price on a
security; and OTC and other derivatives are valued on the basis of a quoted bid
price or spread from a major broker/dealer in such security.
Securities for which market quotations are not readily available (including
restricted securities) or are deemed unreliable are valued at fair value.
Factors considered in making this determination may include, but are not
limited to, information obtained by contacting the issuer, analysts, analysis
of the issuer's financial statements or other available documents. In addition,
the Fund may use fair value pricing for securities primarily traded in non-U.S.
markets because, most foreign markets close well before the Fund values its
securities at 4:00 p.m., Eastern Time. The earlier close of these foreign
markets gives rise to the possibility that significant events, including broad
market moves, may have occurred in the interim and may materially affect the
value of those securities. To account for this, the Fund may frequently value
many of its foreign equity securities using fair value prices based on third
party vendor modeling tools to the extent available.
15
BALANCED WEALTH STRATEGY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
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 prices of such currencies against the U.S.
dollar. Purchases and sales of portfolio securities are translated into U.S.
dollars at the rates of exchange prevailing when such securities were acquired
or sold. Income and expenses are translated into U.S. dollars at rates of
exchange prevailing when accrued.
Net realized gain or loss on foreign currency transactions represents foreign
exchange gains and losses from sales and maturities of foreign fixed income
investments, foreign currency exchange contracts, holding of foreign
currencies, currency gains or losses realized between the trade and settlement
dates on foreign investment transactions, and the difference between the
amounts of dividends, interest and foreign withholding taxes recorded on the
Portfolio's books and the U.S. dollar equivalent amounts actually received or
paid. Net unrealized 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 or depreciation of investments
and foreign currency denominated assets and liabilities.
3. TAXES
It is the policy of the Portfolio 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. The Fund may be subject to taxes imposed by countries in which it
invests. Such taxes are generally based on income and/or capital gains earned
or repatriated. Taxes are accrued and applied to net investment income, net
realized gains and net unrealized appreciation/depreciation as such income
and/or gains are earned.
4. INVESTMENT INCOME AND INVESTMENT TRANSACTIONS
Dividend income is recorded on the ex-dividend date or as soon as the Portfolio
is informed of the dividend. Interest income is accrued daily. Investment
transactions are accounted for on the trade date securities are purchased or
sold. Investment gains and losses are determined on the identified cost basis.
The Portfolio amortizes premiums and accretes discounts as adjustments to
interest income.
5. INCOME AND EXPENSES
Expenses attributable to a single portfolio are charged to that portfolio.
Expenses of the Fund are charged to each portfolio in proportion to net assets.
All income earned and expenses incurred by a portfolio with multi-class shares
outstanding are borne on a pro-rata basis by each outstanding class of shares,
based on the proportionate interest in the portfolio represented by the net
assets of such class, except that the portfolio's Class B shares bear the
distribution fees.
6. DIVIDENDS AND DISTRIBUTIONS
The Portfolio declares and distributes dividends and distributions from net
investment income and net realized gains, respectively, if any, at least
annually. 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 U.S. generally accepted accounting principles. 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.
7. REPURCHASE AGREEMENTS
It is the policy of the Portfolio that its custodian or designated subcustodian
take control of securities as collateral under repurchase agreements and to
determine on a daily basis that the value of such securities are sufficient to
cover the value of the repurchase agreements. If the seller defaults and the
value of the collateral declines or if bankruptcy proceedings are commenced
with respect to the seller of the security, realization of collateral by the
Portfolio may be delayed or limited.
NOTE B: ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Under the terms of an investment advisory agreement, the Portfolio pays the
Adviser an advisory fee at an annual rate of .55% of the first $2.5 billion,
..45% of the next $2.5 billion and .40% in excess of $5 billion, of the
Portfolio's average daily net assets. The fee is accrued daily and paid monthly.
16
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
The Adviser has agreed to waive its fees and bear certain expenses to the
extent necessary to limit total operating expenses on an annual basis to 1.20%
and 1.45% of the daily average net assets for Class A and Class B shares,
respectively. For the six months ended June 30, 2005 the Adviser waived fees in
the amount of $42,966.
Pursuant to the terms of the investment advisory agreement, the Portfolio has
voluntarily agreed to reimburse the Adviser for the cost of providing the
Portfolio with certain legal and accounting services. Due to the Adviser's
agreement to limit total operating expenses as described above, the Adviser
waived reimbursement for such services in the amount of $36,250 for the six
months ended June 30, 2005.
Brokerage commissions paid on investment transactions for the six months ended
June 30, 2005, amounted to $41,175, of which $2,970 and $0, respectively was
paid to Sanford C. Bernstein & Co. LLC and Sanford C. Bernstein Limited,
affiliates of the Adviser.
The Portfolio compensates Alliance Global Investor Services, Inc., a
wholly-owned subsidiary of the Adviser, under a Transfer Agency Agreement for
providing personnel and facilities to perform transfer agency services for the
Portfolio. Such compensation amounted to $403 for the six months ended June 30,
2005.
NOTE C: DISTRIBUTION PLAN
The Portfolio has adopted a Distribution Plan (the "Plan") for Class B shares
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the
Plan, the Portfolio pays distribution and servicing fees to AllianceBernstein
Investment Research and Management, Inc., (the "Distributor"), a wholly-owned
subsidiary of the Adviser, at an annual rate of up to .50% of the 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 limits
payments under the Plan to .25% of the Portfolio's average daily net assets
attributable to Class B shares. The Plan provides that the Distributor will use
such payments in their entirety for distribution assistance and promotional
activities.
The Portfolio is not obligated under the Plan to pay any distribution and
servicing fees in excess of the amounts set forth above. The purpose of the
payments to the Distributor under the Plan is to compensate the Distributor for
its distribution services with respect to the sale of the Portfolio's Class B
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 Plan is
characterized by the staff of the Securities and Exchange Commission as being
of the "compensation" variety.
In the event that the Plan is terminated or not continued, no distribution and
servicing fees (other than current amounts accrued but not yet paid) would be
owed by the Portfolio to the Distributor.
The Plan also provides that the Adviser may use its own resources to finance
the distribution of the Portfolio's shares.
NOTE D: INVESTMENT TRANSACTIONS
Purchases and sales of investment securities (excluding short-term investments)
for the six months ended June 30, 2005 were as follows:
PURCHASES SALES
============== ==============
Investment securities
(excluding U.S. government securities) $ 33,000,600 $ 10,471,314
U.S. government securities 3,673,727 1,164,468
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 futures and
foreign currency transactions) are as follows:
Gross unrealized appreciation $ 2,324,430
Gross unrealized depreciation (602,643)
--------------
Net unrealized appreciation $ 1,721,787
==============
1. FINANCIAL FUTURES CONTRACTS
The Portfolio may buy or sell financial futures contracts for the purpose of
hedging its portfolio against adverse effects of anticipated movements in the
market. The Portfolio bears the market risk that arises from changes in the
value of these
17
BALANCED WEALTH STRATEGY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
financial instruments and the imperfect correlation between movements in the
price of the futures contracts and movements in the price of the securities
hedged or used for cover.
At the time the Portfolio enters into a futures contract, the Portfolio
deposits and maintains as collateral an initial margin as required by the
exchange on which the transaction is affected. Pursuant to the contract, the
Portfolio agrees to receive from or pay to the broker an amount of cash equal
to the daily fluctuation in the value of the contract. Such receipts or
payments are known as variation margin and are recorded by the Portfolio as
unrealized gains or losses. Risks may arise from the potential inability of a
counterparty to meet the terms of the contract. When the contract is closed,
the Portfolio records a realized gain or loss equal to the difference between
the value of the contract at the time it was opened and the time it was closed.
2. FORWARD EXCHANGE CURRENCY CONTRACTS
The Portfolio may enter into forward exchange currency contracts in order to
hedge its exposure to changes in foreign currency exchange rates on its 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 on a future date at a negotiated forward rate. The gain or loss
arising from the difference between the original contract and the closing of
such contract would be included in net realized gain or loss on foreign
currency transactions.
Fluctuations in the value of open forward exchange currency contracts are
recorded for financial reporting purposes as net unrealized appreciation or
depreciation by the Portfolio.
The Portfolio's custodian will place and maintain cash not available for
investment or other liquid assets in a separate account of the Portfolio having
a value at least equal to the aggregate amount of the Portfolio's commitments
under forward exchange currency contracts entered into with respect to position
hedges.
Risks may arise from the potential inability of the 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 the Portfolio has in that particular
currency contract.
3. OPTION TRANSACTIONS
For hedging and investment purposes, the Portfolio may purchase and write
(sell) put and call options on U.S. and foreign government securities and
foreign currencies that are traded on U.S. and foreign 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 written options which
expire unexercised are recorded by the Portfolio on the expiration date as
realized gains from options written. 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. If a
put option is exercised, the premium received reduces the cost basis of the
security or currency purchased by the Portfolio. 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.
18
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
NOTE E: CAPITAL STOCK
There are 1,000,000,000 shares of $.001 par value capital stock authorized,
divided into two classes, designated Class A and Class B shares. Each class
consists of 500,000,000 authorized shares. Transactions in capital stock were
as follows:
SHARES AMOUNT
--------------------------- ------------------------------
SIX MONTHS JULY 1, SIX MONTHS JULY 1,
ENDED 2004(a) TO ENDED 2004(a) TO
JUNE 30, 2005 DECEMBER 31, JUNE 30, 2005 DECEMBER 31,
(UNAUDITED) 2004 (UNAUDITED) 2004
------------ ------------ -------------- --------------
CLASS A
Shares sold -0- 850,000 $ -0- $ 8,500,000
Shares issued
in reinvestment
of dividends and
distributions 5,997 -0- 63,750 -0-
------------ ------------ -------------- --------------
Net increase 5,997 850,000 $ 63,750 $ 8,500,000
=========== =========== ============= =============
CLASS B
Shares sold 2,624,260 1,731,943 $ 27,425,500 $ 17,574,843
Shares issued
in reinvestment
of dividends and
distributions 25,931 -0- 274,864 -0-
Shares redeemed (306,572) (58,177) (3,166,536) (595,836)
------------ ------------ -------------- --------------
Net increase 2,343,619 1,673,766 $ 24,533,828 $ 16,979,007
=========== =========== ============= =============
NOTE F: RISKS INVOLVED IN INVESTING IN THE PORTFOLIO
Foreign Securities 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.
Interest Rate Risk and Credit Risk-- Interest rate risk is the risk that
changes in interest rates will affect the value of the Portfolio's investments
in fixed-income debt securities such as bonds or notes. Increases in interest
rates may cause the value of the Portfolio's investments to decline. Credit
risk is the risk that the issuer or guarantor of a debt security, or the
counterparty to a derivative contract, will be unable or unwilling to make
timely principal and/or interest payments, or to otherwise honor its
obligations. The degree of risk for a particular security may be reflected in
its credit risk rating. Credit risk is greater for medium quality and
lower-rated securities. Lower-rated debt securities and similar unrated
securities (commonly known as "junk bonds") have speculative elements or are
predominantly speculative risks.
Indemnification Risk--In the ordinary course of business, the Portfolio enters
into contracts that contain a variety of indemnifications. The Portfolio's
maximum exposure under these arrangements is unknown. However, the Portfolio
has not had prior claims or losses pursuant to these indemnification provisions
and expects the risk of loss thereunder to be remote.
NOTE G: JOINT CREDIT FACILITY
A number of open-end mutual funds managed by the Adviser, including the
Portfolio, participate in a $500 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
Portfolio did not utilize the Facility during the six months ended June 30,
2005.
19
BALANCED WEALTH STRATEGY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
NOTE H: COMPONENT OF ACCUMULATED EARNINGS (DEFICIT)
The tax character of distributions to be paid for the year ending December 31,
2005 will be determined at the end of the current fiscal year. As of December
31, 2004, the components of accumulated earnings/(deficit) on a tax basis were
as follows:
Undistributed ordinary income $ 305,590
Undistributed long-term capital gains 3,149
Unrealized appreciation/(depreciation) 1,166,887
--------------
Total accumulated earnings/(deficit) $ 1,475,626
==============
(a) The differences between book-basis and tax-basis unrealized
appreciation/(depreciation) are attributable primarily to the tax deferral of
losses on wash sales, the realization for tax purposes of unrealized
gains/losses on investements in passive foreign investment companies, and the
tax treatment of dividends received.
NOTE I: LEGAL PROCEEDINGS
As has been previously reported, the staff of the U.S. Securities and Exchange
Commission ("SEC") and the NYAG have been investigating practices in the mutual
fund industry identified as "market timing" and "late trading" of mutual fund
shares. Certain other regulatory authorities have also been conducting
investigations into these practices within the industry and have requested that
the Adviser provide information to them. The Adviser has been cooperating and
will continue to cooperate with all of these authorities.
On December 18, 2003, the Adviser confirmed that it had reached terms with the
SEC and the NYAG for the resolution of regulatory claims relating to the
practice of "market timing" mutual fund shares in some of the AllianceBernstein
Mutual Funds. The agreement with the SEC is reflected in an Order of the
Commission ("SEC Order"). The agreement with the NYAG is memorialized in an
Assurrance of Discontinuance dated September 1, 2004 ("NYAG Order"). Among the
key provisions of these agreements are the following:
(i) The Adviser agreed to establish a $250 million fund (the "Reimbursement
Fund") to compensate mutual fund shareholders for the adverse effects of market
timing attributable to market timing relationships described in the SEC Order.
According to the SEC Order, the Reimbursement Fund is to be paid, in order of
priority, to fund investors based on (i) their aliquot share of losses suffered
by the fund due to market timing, and (ii) a proportionate share of advisory
fees paid by such fund during the period of such market timing;
(ii) The Adviser agreed to reduce the advisory fees it receives from some of
the AllianceBernstein long-term, open-end retail funds until December 31, 2008;
and
(iii) The Adviser agreed to implement changes to its governance and compliance
procedures. Additionally, the SEC Order and the NYAG Order contemplate that the
Adviser's registered investment company clients, including the Fund, will
introduce governance and compliance changes.
In anticipation of final, definitive documentation of the NYAG Order and
effective January 1, 2004, the Adviser began waiving a portion of its advisory
fee with respect to certain AllianceBernstein funds.
A special committee of the Adviser's Board of Directors, comprised of the
members of the Adviser's Audit Committee and the other independent member of
the Adviser's Board, is continuing to direct and oversee an internal
investigation and a comprehensive review of the facts and circumstances
relevant to the SEC's and the NYAG's investigations.
In addition, the Independent Directors of the Fund ("the Independent
Directors") have initiated an investigation of the above-mentioned matters with
the advice of an independent economic consultant and independent counsel. The
Independent Directors have formed a special committee to supervise the
investigation.
On October 2, 2003, a putative class action complaint entitled Hindo et al. v.
AllianceBernstein Growth & Income Fund et al. (the "Hindo Complaint") was filed
against the Adviser; Alliance Capital Management Holding L.P.; Alliance Capital
Management Corporation; AXA Financial, Inc.; certain of the AllianceBernstein
Mutual Funds, including the Fund; Gerald Malone; Charles Schaffran
(collectively, the "Alliance Capital defendants"); and certain other defendants
not affiliated with the Adviser. The Hindo Complaint was filed in the United
States District Court for the Southern District of New York by alleged
shareholders of two of the AllianceBernstein Mutual Funds. The Hindo Complaint
alleges that certain of the Alliance Capital defendants failed to disclose that
they improperly allowed certain hedge funds and other
20
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
unidentified parties to engage in late trading and market timing of
AllianceBernstein Fund securities, violating Sections 11 and 15 of the
Securities Act, Sections 10(b) and 20(a) of the Exchange Act, and Sections 206
and 215 of the Advisers Act. Plaintiffs seek an unspecified amount of
compensatory damages and rescission of their contracts with the Adviser,
including recovery of all fees paid to the Adviser pursuant to such contracts.
Since October 2, 2003, numerous additional lawsuits making factual allegations
similar to those in the Hindo Complaint were filed against the Adviser and
certain other defendants, some of which name the Fund as a defendant. All of
these lawsuits seek an unspecified amount of damages. The lawsuits are now
pending in the United States District Court for the District of Maryland
pursuant to a ruling by the Judicial Panel on Multidistrict Litigation
transferring and centralizing all of the mutual fund cases involving market and
late trading in the District of Maryland.
As a result of the matters discussed above, investors in the AllianceBernstein
Mutual Funds may choose to redeem their investments. This may require the
AllianceBernstein Mutual Funds to sell investments held by those funds to
provide for sufficient liquidity and could also have an adverse effect on the
investment performance of the AllianceBernstein Mutual Funds.
The Adviser and approximately twelve other investment management firms were
publicly mentioned in connection with the settlement by the SEC of charges that
an unaffiliated broker/dealer violated federal securities laws relating to its
receipt of compensation for selling specific mutual funds and the disclosure of
such compensation. The SEC indicated publicly that, among other things, it was
considering enforcement action in connection with mutual funds' disclosure of
such arrangements and in connection with the practice of considering mutual
fund sales in the direction of brokerage commissions from fund portfolio
transactions. The SEC issued subpoenas to the Adviser, and the NASD issued
requests for information in connection with this matter and the Adviser
provided documents and other information to the SEC and NASD and cooperated
fully with the investigations. On June 8, 2005 the NASD announced that it had
reached a settlement with the Distributor in connection with this matter.
Management of the Adviser expects that the settlement has resolved both
regulatory inquiries described above.
On June 22, 2004, a purported class action complaint entitled Aucoin, et al. v.
Alliance Capital Management L.P., et al. ("Aucoin Complaint") was filed against
the Adviser, Alliance Capital Management Holding L.P., Alliance Capital
Management Corporation, AXA Financial, Inc., AllianceBernstein Investment
Research & Management, Inc., certain current and former directors of the
AllianceBernstein Mutual Funds, and unnamed Doe defendants. The Aucoin
Complaint names certain of the AllianceBernstein mutual funds as nominal
defendants. The Aucoin Complaint was filed in the United States District Court
for the Southern District of New York by an alleged shareholder of an
AllianceBernstein mutual fund. The Aucoin Complaint alleges, among other
things, (i) that certain of the defendants improperly authorized the payment of
excessive commissions and other fees from fund assets to broker-dealers in
exchange for preferential marketing services, (ii) that certain of the
defendants misrepresented and omitted from registration statements and other
reports material facts concerning such payments, and (iii) that certain
defendants caused such conduct as control persons of other defendants. The
Aucoin Complaint asserts claims for violation of Sections 34(b), 36(b) and
48(a) of the Investment Company Act, Sections 206 and 215 of the Advisers Act,
breach of common law fiduciary duties, and aiding and abetting breaches of
common law fiduciary duties. Plaintiffs seek an unspecified amount of
compensatory damages and punitive damages, rescission of their contracts with
the Adviser, including recovery of all fees paid to the Adviser pursuant to
such contracts, an accounting of all fund-related fees, commissions and soft
dollar payments, and restitution of all unlawfully or discriminatorily obtained
fees and expenses.
Since June 22, 2004, numerous additional lawsuits making factual allegations
substantially similar to those in the Aucoin Complaint were filed against the
Adviser and certain other defendants, and others may be filed.
It is possible that these matters and/or other developments resulting from
these matters could result in increased redemptions of the Fund's shares or
other adverse consequences to the Fund. However, the Adviser believes that
these matters are not likely to have a material adverse effect on its ability
to perform advisory services relating to the Fund.
21
BALANCED WEALTH STRATEGY PORTFOLIO
FINANCIAL HIGHLIGHTS
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
CLASS A
===============================
SIX MONTHS JULY 1, 2004(a)
ENDED TO
JUNE 30, 2005 DECEMBER 31,
(UNAUDITED) 2004
============== ==============
Net asset value, beginning of period $10.69 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (b)(c) .10 .07
Net realized and unrealized gain (loss) on
investment and foreign currency
transactions (.06) .62
Net increase in net asset value from
operations .04 .69
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.05) -0-
Distributions from net realized gain on
investment and foreign currency
transactions (.03) -0-
Total dividends and distributions (.08) -0-
Net asset value, end of period $10.65 $10.69
TOTAL RETURN
Total investment return based on
net asset value (d) .33% 6.90%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $9,120 $9,089
Ratio to average net assets of:
Expenses, net of waivers and
reimbursements (e) 1.10% 1.20%
Expenses, before waivers and
reimbursements (e) 1.55% 2.87%
Net investment income (c)(e) 1.88% 1.36%
Portfolio turnover rate 34% 44%
See footnote summary on page 23.
22
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
CLASS B
===============================
SIX MONTHS JULY 1, 2004(a)
ENDED TO
JUNE 30, 2005 DECEMBER 31,
(UNAUDITED) 2004
============== ==============
Net asset value, beginning of period $10.67 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (b)(c) .08 .06
Net realized and unrealized gain (loss) on
investment and foreign currency
transactions (.05) .61
Net increase in net asset value from
operations .03 .67
LESS: DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (.05) -0-
Distributions from net realized gain on
investment and foreign currency
transactions (.03) -0-
Total dividends and distributions (.08) -0-
Net asset value, end of period $10.62 $10.67
TOTAL RETURN
Total investment return based on
net asset value (d) .22% 6.70%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted) $42,682 $17,866
Ratio to average net assets of:
Expenses, net of waivers and
reimbursements (e) 1.43% 1.45%
Expenses, before waivers and
reimbursements (e) 1.84% 3.34%
Net investment income (c)(e) 1.49% 1.49%
Portfolio turnover rate 34% 44%
(a) Commencement of operations.
(b) Based on average shares outstanding.
(c) Net of expenses waived and reimbursed by the Adviser.
(d) 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 return does not reflect the
deduction of taxes that a shareholder would pay on Portfolio distributions or
the redemption of Portfolio shares. Total investment return calculated for a
period of less than one year is not annualized.
(e) Annualized.
23
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- -------------------------------------------------------------------------------
SEMI-ANNUAL REPORT
- -------------------------------------------------------------------------------
[LOGO] ALLIANCEBERNSTEIN (R)
Investment Research and Management
AllianceBernstein Variable Products Series Fund, Inc.
Semi-Annual Report
June 30, 2005
> AllianceBernstein Global Research Growth Portfolio
INVESTMENT PRODUCTS OFFERED
- ---------------------------
> ARE NOT FDIC INSURED
> MAY LOSE VALUE
> ARE NOT BANK GUARANTEED
- ---------------------------
YOU MAY OBTAIN A DESCRIPTION OF THE FUND'S PROXY VOTING POLICIES AND
PROCEDURES, AND INFORMATION REGARDING HOW THE FUND VOTED PROXIES RELATING TO
PORTFOLIO SECURITIES DURING THE MOST RECENT 12-MONTH PERIOD ENDED JUNE 30,
WITHOUT CHARGE. SIMPLY VISIT THE SECURITIES AND EXCHANGE COMMISSION'S (THE
"COMMISSION") WEB SITE AT WWW.SEC.GOV, OR CALL ALLIANCEBERNSTEIN AT (800)
227-4618.
THE FUND FILES ITS COMPLETE SCHEDULE OF PORTFOLIO HOLDINGS WITH THE COMMISSION
FOR THE FIRST AND THIRD QUARTERS OF EACH FISCAL YEAR ON FORM N-Q. THE FUND'S
FORMS N-Q ARE AVAILABLE ON THE COMMISSION'S WEB SITE AT WWW.SEC.GOV. THE FUND'S
FORMS N-Q MAY ALSO BE REVIEWED AND COPIED AT THE COMMISSION'S PUBLIC REFERENCE
ROOM IN WASHINGTON, DC; INFORMATION ON THE OPERATION OF THE PUBLIC REFERENCE
ROOM MAY BE OBTAINED BY CALLING (800) SEC-0330.
GLOBAL RESEARCH GROWTH PORTFOLIO
FUND EXPENSES
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including sales charges (loads) on purchase payments, contingent
deferred sales charges on redemptions and (2) ongoing costs, including
management fees; distribution (12b-1) fees; and other Fund expenses. This
example is intended to help you understand your ongoing costs (in dollars) of
investing in the Fund and to compare these costs with the ongoing costs of
investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of
the period and held for the entire period as indicated below.
ACTUAL EXPENSES
The first line of the table below provides information about actual account
values and actual expenses. You may use the information in this line, together
with the amount you invested, to estimate the expenses that you paid over the
period. Simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
in the first line under the heading entitled "Expenses Paid During Period" to
estimate the expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio and an assumed annual rate of return of 5% before expenses, which is not
the Fund's actual return. The hypothetical account values and expenses may not
be used to estimate the actual ending account balance or expenses you paid for
the period. You may use this information to compare the ongoing costs of
investing in the Fund and other funds by comparing this 5% hypothetical example
with the 5% hypothetical examples that appear in the shareholder reports of
other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads), or contingent deferred sales charges on redemptions.
Therefore, the second line of the table is useful in comparing ongoing costs
only, and will not help you determine the relative total costs of owning
different funds. In addition, if these transactional costs were included, your
costs would have been higher.
BEGINNING ENDING
ACCOUNT VALUE ACCOUNT VALUE EXPENSES PAID ANNUALIZED
GLOBAL RESEARCH GROWTH PORTFOLIO MAY 2, 2005* JUNE 30, 2005 DURING PERIOD** EXPENSE RATIO*
- ---------------------------------------------------------------------------------------------------------------
CLASS A
Actual $1,000 $1,045.00 $1.98 1.20%
Hypothetical (5% return before expenses) $1,000 $1,006.14 $1.95 1.20%
CLASS B
Actual $1,000 $1,044.00 $2.40 1.45%
Hypothetical (5% return before expenses) $1,000 $1,005.74 $2.35 1.45%
* Commencement of operations.
** Expenses are equal to each classes' annualized expense ratios, multiplied
by the average account value over the period, multiplied by the number of days
in the period/365.
1
GLOBAL RESEARCH GROWTH PORTFOLIO
TEN LARGEST HOLDINGS
JUNE 30, 2005 (UNAUDITED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
PERCENT OF
COMPANY U.S. $ VALUE NET ASSETS
_______________________________________________________________________________
Halliburton Co. $ 172,152 3.3%
- -------------------------------------------------------------------------------
Citigroup, Inc. 157,182 3.0
- -------------------------------------------------------------------------------
General Electric Co. 138,600 2.6
- -------------------------------------------------------------------------------
Schlumberger Ltd. 121,504 2.3
- -------------------------------------------------------------------------------
American International Group, Inc. 110,390 2.1
- -------------------------------------------------------------------------------
Petroleo Brasileiro, SA 101,288 1.9
- -------------------------------------------------------------------------------
Noble Energy, Inc. 97,437 1.8
- -------------------------------------------------------------------------------
Nabors Industries Ltd. 90,929 1.7
- -------------------------------------------------------------------------------
WellPoint Health Networks, Inc. 83,568 1.6
- -------------------------------------------------------------------------------
The Charles Schwab Corp. 76,704 1.5
----------- ----
- -------------------------------------------------------------------------------
$ 1,149,754 21.8%
- -------------------------------------------------------------------------------
SECTOR DIVERSIFICATION
JUNE 30, 2005 (UNAUDITED)
PERCENT OF
SECTOR U.S. $ VALUE NET ASSETS
_______________________________________________________________________________
Finance $ 1,012,934 19.2%
- -------------------------------------------------------------------------------
Healthcare 781,007 14.8
- -------------------------------------------------------------------------------
Energy 745,842 14.2
- -------------------------------------------------------------------------------
Technology 639,521 12.1
- -------------------------------------------------------------------------------
Consumer Service 530,045 10.1
- -------------------------------------------------------------------------------
Consumer Staples 338,755 6.4
- -------------------------------------------------------------------------------
Capital Goods 303,550 5.8
- -------------------------------------------------------------------------------
Basic Industry 290,918 5.5
- -------------------------------------------------------------------------------
Consumer Manufacturing 218,853 4.2
- -------------------------------------------------------------------------------
Multi-Industry Companies 113,275 2.2
- -------------------------------------------------------------------------------
Aerospace & Defense 81,540 1.5
- -------------------------------------------------------------------------------
Utilties 55,664 1.1
- -------------------------------------------------------------------------------
Transportation 27,664 0.5
----------- -----
- -------------------------------------------------------------------------------
Total Investments 5,139,568 97.6
- -------------------------------------------------------------------------------
Cash and receivables, net of liabilities 128,777 2.4
----------- -----
- -------------------------------------------------------------------------------
Net Assets $ 5,268,345 100.0%
- -------------------------------------------------------------------------------
Please Note: The sector classifications presented herein are based on the
sector categorization methodology of the Adviser.
2
GLOBAL RESEARCH GROWTH PORTFOLIO
COUNTRY DIVERSIFICATION
JUNE 30, 2005 (UNAUDITED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
PERCENT OF
COUNTRY U.S. $ VALUE NET ASSETS
_______________________________________________________________________________
United States $ 2,794,748 53.0%
- -------------------------------------------------------------------------------
United Kingdom 473,171 9.0
- -------------------------------------------------------------------------------
Japan 381,723 7.2
- -------------------------------------------------------------------------------
Switzerland 288,958 5.5
- -------------------------------------------------------------------------------
France 182,208 3.5
- -------------------------------------------------------------------------------
Bermuda 176,571 3.4
- -------------------------------------------------------------------------------
Brazil 142,279 2.7
- -------------------------------------------------------------------------------
Germany 133,389 2.5
- -------------------------------------------------------------------------------
Hong Kong 90,900 1.7
- -------------------------------------------------------------------------------
Russia 87,917 1.7
- -------------------------------------------------------------------------------
South Korea 60,900 1.2
- -------------------------------------------------------------------------------
People's Republic of China 51,152 1.0
- -------------------------------------------------------------------------------
Other * 275,652 5.2
----------- -----
- -------------------------------------------------------------------------------
Total Investments 5,139,568 97.6
- -------------------------------------------------------------------------------
Cash and receivables, net of liabilities 128,777 2.4
----------- -----
- -------------------------------------------------------------------------------
Net Assets $ 5,268,345 100.0%
- -------------------------------------------------------------------------------
* The Portfolio's country breakdown is expressed as a percentage of net assets
and may vary over time. "Other" represents less than 1% weightings in the
following countries: Australia, Egypt, Finland, India, Isreal, Italy, Mexico,
Norway, Spain and Taiwan.
3
GLOBAL RESEARCH GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2005 (UNAUDITED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------------
COMMON STOCKS-97.6%
UNITED STATES INVESTMENTS-53.1%
FINANCE-10.8%
BANKING - REGIONAL-1.2%
Commerce Bancorp, Inc. 1,300 $ 39,403
North Fork Bancorporation, Inc. 900 25,281
--------------
64,684
--------------
BROKERAGE & MONEY MANAGEMENT-3.2%
Franklin Resources, Inc. 400 30,792
The Charles Schwab Corp. 6,800 76,704
The Goldman Sachs Group, Inc. 600 61,212
--------------
168,708
--------------
INSURANCE-2.6%
AFLAC, Inc. 600 25,968
American International Group, Inc. 1,900 110,390
--------------
136,358
--------------
MORTGAGE BANKING-0.8%
Fannie Mae 700 40,880
--------------
MISCELLANEOUS-3.0%
Citigroup, Inc. 3,400 157,182
--------------
567,812
--------------
HEALTHCARE-9.1%
BIOTECHNOLOGY-2.0%
Amgen, Inc. (a) 300 18,138
Genentech, Inc. (a) 700 56,196
Gilead Sciences, Inc. (a) 700 30,793
--------------
105,127
--------------
DRUGS-1.7%
Allergan, Inc. 300 25,572
Cephalon, Inc. (a) 200 7,962
Eli Lilly & Co. 400 22,284
Forest Laboratories, Inc. (a) 700 27,195
Wyeth 200 8,900
--------------
91,913
--------------
MEDICAL PRODUCTS-1.7%
St. Jude Medical, Inc. (a) 700 30,527
Stryker Corp. 700 33,292
Zimmer Holdings, Inc. (a) 300 22,851
--------------
86,670
--------------
MEDICAL SERVICES-3.7%
Caremark Rx, Inc. (a) 300 13,356
Health Management Associates, Inc. Cl.A 900 23,562
UnitedHealth Group, Inc. 1,400 72,996
WellPoint Health Networks, Inc. (a) 1,200 83,568
--------------
193,482
--------------
477,192
--------------
ENERGY-8.3%
DOMESTIC PRODUCERS-1.8%
Noble Energy, Inc. 1,288 97,437
--------------
OIL SERVICE-6.5%
FMC Technologies, Inc. (a) 1,500 47,955
Halliburton Co. 3,600 172,152
Schlumberger Ltd. 1,600 121,504
--------------
341,611
--------------
439,048
--------------
TECHNOLOGY-7.1%
COMMUNICATION EQUIPMENT-1.6%
Corning, Inc. (a) 400 6,648
Juniper Networks, Inc. (a) 1,600 40,288
QUALCOMM, Inc. 1,100 36,311
--------------
83,247
--------------
COMPUTER HARDWARE/STORAGE-1.5%
Apple Computer, Inc. (a) 300 11,043
Dell, Inc. (a) 900 35,559
EMC Corp. (a) 2,400 32,904
--------------
79,506
--------------
COMPUTER PERIPHERALS-0.4%
Network Appliance, Inc. (a) 700 19,789
--------------
COMPUTER SERVICES-0.4%
Fiserv, Inc. (a) 500 21,475
--------------
INTERNET-0.6%
Google, Inc. Cl.A (a) 100 29,415
--------------
INTERNET MEDIA-0.3%
Yahoo!, Inc. (a) 500 17,325
--------------
SEMICONDUCTOR COMPONENTS-0.4%
Broadcom Corp. Cl.A (a) 400 14,204
Linear Technology Corp. 200 7,338
--------------
21,542
--------------
SOFTWARE-1.9%
McAfee, Inc. (a) 400 10,472
Mercury Interactive Corp. (a) 300 11,508
Microsoft Corp. 2,200 54,648
Oracle Corp. (a) 1,800 23,760
--------------
100,388
--------------
372,687
--------------
4
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------------
CONSUMER SERVICES-4.8%
BROADCASTING & CABLE-2.6%
News Corp. Cl.A 2,800 $ 45,304
Time Warner, Inc. (a) 3,600 60,156
Univision Communications, Inc. (a) 1,200 33,060
--------------
138,520
--------------
RETAIL - GENERAL MERCHANDISE-2.2%
Lowe's Cos., Inc. 1,100 64,042
Target Corp. 900 48,969
--------------
113,011
--------------
251,531
--------------
CAPITAL GOODS-4.2%
ELECTRICAL EQUIPMENT-0.5%
Emerson Electric Co. 400 25,052
--------------
MISCELLANEOUS-3.7%
General Electric Co. 4,000 138,600
United Technologies Corp. 1,100 56,485
--------------
195,085
--------------
220,137
--------------
CONSUMER STAPLES-4.1%
COSMETICS-1.5%
Avon Products, Inc. 1,200 45,420
Estee Lauder Cos. Cl.A 800 31,304
--------------
76,724
--------------
FOOD-0.5%
Wm. Wrigley Jr. Co. 400 27,536
--------------
HOUSEHOLD PRODUCTS-1.9%
Colgate-Palmolive Co. 600 29,946
The Procter & Gamble Co. 1,300 68,575
--------------
98,521
--------------
RETAIL - FOOD & DRUG-0.2%
Whole Foods Market, Inc. 100 11,830
--------------
214,611
--------------
CONSUMER MANUFACTURING-1.4%
BUILDING RELATED-1.4%
American Standard Cos., Inc. 1,400 58,688
Pulte Homes, Inc. 200 16,850
--------------
75,538
--------------
BASIC INDUSTRY-1.4%
CHEMICALS-1.4%
Air Products and Chemicals, Inc. 1,200 72,360
--------------
AEROSPACE & DEFENSE-0.6%
AEROSPACE-0.6%
Lockheed Martin Corp. 500 32,435
--------------
TRANSPORTATION-0.5%
AIR FREIGHT-0.5%
United Parcel Service, Inc. Cl.B 400 27,664
--------------
MULTI-INDUSTRY COMPANIES-0.5%
Danaher Corp. 500 26,170
--------------
UTILITIES-0.3%
TELEPHONE UTILITY-0.3%
Sprint Corp. (Fon Group) 700 17,563
--------------
Total United States Investments
(cost $2,560,571) 2,794,748
--------------
FOREIGN INVESTMENTS-44.5%
AUSTRALIA-0.6%
Rinker Group Ltd. 2,808 29,741
--------------
BERMUDA-3.3%
ACE Ltd. 600 26,910
Axis Capital Holdings Ltd. 1,000 28,300
Marvell Technology Group Ltd. (a) 800 30,432
Nabors Industries Ltd. (a) 1,500 90,929
--------------
176,571
--------------
BRAZIL-2.7%
Companhia Vale do Rio Doce (ADR) 1,400 40,992
Petroleo Brasileiro, SA (ADR) 2,200 101,287
--------------
142,279
--------------
EGYPT-0.2%
Orascom Telecom Holdings SAE (GDR) 233 11,815
--------------
FINLAND-0.3%
Nokia Corp. 879 14,626
--------------
FRANCE-3.5%
Accor, SA 765 35,771
CapGemini, SA (a) 303 9,587
Groupe Danone 532 46,612
Renault, SA 300 26,350
Sanofi-Aventis, SA 422 34,561
Schneider Electric, SA 390 29,327
--------------
182,208
--------------
5
GLOBAL RESEARCH GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS
(CONTINUED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
COMPANY SHARES U.S. $ VALUE
- -------------------------------------------------------------------------------
GERMANY-2.5%
Altana AG 508 $ 29,005
Bayerische Motoren Werke (BMW) AG 421 19,154
Premiere AG (a) 501 17,279
SAP AG (ADR) 800 34,640
Siemens AG 458 33,311
--------------
133,389
--------------
HONG KONG-1.7%
China Telecom Corp., Ltd. Cl.H 22,000 7,857
CNOOC Ltd. 75,000 44,449
Datang International Power Generation Co., Ltd. 40,000 30,244
ZTE Corp. 2,800 8,350
--------------
90,900
--------------
INDIA-0.9%
Infosys Technologies (ADR) 300 23,241
Ranbaxy Laboratories Ltd. (GDR) 907 22,063
--------------
45,304
--------------
ISRAEL-0.6%
Teva Pharmaceutical Industries Ltd. (ADR) 1,100 34,254
--------------
ITALY-0.1%
Fastweb (a) 155 6,684
--------------
JAPAN-7.2%
Canon, Inc. 500 26,207
Denso Corp. 1,700 38,602
Hitachi Chemical Co., Ltd. 1,700 30,999
Honda Motor Co., Ltd. 600 29,469
Hoya Corp. 300 34,466
Keyence Corp. 100 22,293
Mitsubishi Corp. 2,700 36,515
Mitsubishi Tokyo Financial Group, Inc. 6 50,578
Nitto Denko Corp. 400 22,791
Nomura Holdings, Inc. 4,300 51,087
Shionogi & Co., Ltd. 1,000 12,849
UFJ Holdings, Inc. (a) 5 25,867
--------------
381,723
--------------
MEXICO-0.4%
America Movil, S.A. de CV Series L (ADR) 400 23,844
--------------
NORWAY-0.8%
Norsk Hydro ASA 468 42,544
--------------
PEOPLE'S REPUBLIC OF CHINA-1.0%
China Shenhua Energy Co., Ltd. Cl.H (a) 53,000 51,152
--------------
RUSSIA-1.7%
Lukoil Holdings (ADR) 750 27,585
MMC Norilsk Nickel (ADR) 829 50,237
Mobile Telesystems (ADR) 300 10,095
--------------
87,917
--------------
SOUTH KOREA-1.2%
Kookmin Bank (ADR) 600 27,348
LG. Philips LCD Co., Ltd. (ADR) (a) 600 13,716
Samsung Elecronics Co., Ltd. (GDR) (b) 83 19,836
--------------
60,900
--------------
SPAIN-0.4%
Inditex, SA 822 21,122
--------------
SWITZERLAND-5.5%
Alcon, Inc. 500 54,674
Compagnie Financiere Richemont AG 1,021 34,235
Credit Suisse Group 990 38,806
Nobel Biocare Holding AG 122 24,709
Novartis AG 668 31,714
Roche Holding AG-Genusschin 410 51,733
UBS AG 681 53,087
--------------
288,958
--------------
TAIWAN-0.9%
AU Optronics Corp. (ADR) 600 10,164
Hon Hai Precision Industry Co., Ltd. (GDR) 1,101 11,457
Taiwan Semiconductor Manufacturing Co., Ltd. (ADR) 1,155 10,534
United Microelectronics Corp. (ADR) (a) 3,300 13,563
--------------
45,718
--------------
UNITED KINGDOM-9.0%
02 Plc 3,413 8,332
AstraZeneca Plc (ADR) 200 8,252
Bae Systems Plc 9,584 49,105
BHP Billiton Plc 3,544 45,178
Carnival Plc 591 33,509
Man Group Plc 1,010 26,095
Prudential Plc 2,927 25,937
Reckitt Benckiser Plc 1,585 46,559
Royal Bank of Scotland Group Plc 1,299 39,111
SABMiller Plc 1,988 30,973
Standard Chartered Plc 2,854 51,996
Tesco Plc 9,183 52,316
Vodafone Group Plc 4,489 10,914
WPP Group Plc 4,383 44,894
--------------
473,171
--------------
6
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
U.S. $ VALUE
- -------------------------------------------------------------------------------
Total Foreign Investments
(cost $2,369,543) $ 2,344,820
--------------
TOTAL INVESTMENTS-97.6%
(cost $4,930,114) 5,139,568
Other assets less liabilities-2.4% 128,777
--------------
NET ASSETS-100% $ 5,268,345
==============
(a) Non-income producing security.
(b) Security is exempt from registration under Rule 144A of the Securities Act
of 1933. This security is considered liquid and may be resold in transactions
exempt from registration, normally to qualified institutional buyers. At June
30, 2005, the aggregate market value of this security amounted to $19,836 or
0.4% of net assets.
Glossary of Terms:
ADR - American Depositary Receipt
GDR - Global Depositary Receipt
See Notes to Financial Statements.
7
GLOBAL RESEARCH GROWTH PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2005 (UNAUDITED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
ASSETS
Investments in securities, at value (cost $4,930,114) $ 5,139,568
Cash 102,770
Foreign cash, at value (cost $35,778) 35,226
Receivable for investment securities sold and
foreign currency contracts 18,600
Receivable due from Adviser 14,658
Dividends receivable 6,124
------------
Total assets 5,316,946
------------
LIABILITIES
Payable for investment securities purchased 9,808
Distribution fee payable 1,059
Transfer agent fee payable 53
Accrued expenses 37,681
------------
Total liabilities 48,601
------------
NET ASSETS $ 5,268,345
============
COMPOSITION OF NET ASSETS
Capital stock, at par $ 504
Additional paid-in capital 5,044,719
Undistributed net investment income 6,568
Accumulated net realized gain on investment and foreign
currency transactions 7,682
Net unrealized appreciation of investments and foreign
currency denominated assets and liabilities 208,872
------------
$ 5,268,345
============
CLASS A SHARES
Net assets $ 104,491
============
Shares of capital stock outstanding 10,000
============
Net asset value per share $ 10.45
============
CLASS B SHARES
Net assets $ 5,163,854
============
Shares of capital stock outstanding 494,393
============
Net asset value per share $ 10.44
============
See Notes to Financial Statements.
8
GLOBAL RESEARCH GROWTH PORTFOLIO
STATEMENT OF OPERATIONS
MAY 2, 2005(A) TO JUNE 30, 2005 (UNAUDITED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
INVESTMENT INCOME
Dividends (net of foreign taxes withheld of $2,226) $ 18,035
Interest 641
------------
Total investment income 18,676
------------
EXPENSES
Advisory fee 6,276
Distribution fee--Class B 2,050
Custodian 24,072
Administrative 13,000
Audit 10,030
Legal 2,419
Printing 1,223
Directors' fees 236
Transfer agency 134
Miscellaneous 944
------------
Total expenses 60,384
Less: expenses waived and reimbursed by the Adviser
(see Note B) (48,276)
------------
Net expenses 12,108
------------
Net investment income 6,568
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENT AND FOREIGN
CURRENCY TRANSACTIONS
Net realized gain (loss) on:
Investment transactions 18,583
Foreign currency transactions (10,901)
Net change in unrealized appreciation/depreciation of:
Investments 209,454
Foreign currency denominated assets and liabilities (582)
------------
Net gain on investment and foreign currency transactions 216,554
------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 223,122
============
(a) Commencement of operations.
See Notes to Financial Statements.
9
GLOBAL RESEARCH GROWTH PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
MAY 2,
2005(A) TO
JUNE 30, 2005
(UNAUDITED)
============
INCREASE IN NET ASSETS FROM OPERATIONS
Net investment income $ 6,568
Net realized gain on investment and foreign currency
transactions 7,682
Net change in unrealized appreciation/depreciation of
Investments and foreign currency denominated assets
and liabilities 208,872
------------
Net increase in net assets from operations 223,122
CAPITAL STOCK TRANSACTIONS
Net increase 5,045,223
------------
Total increase 5,268,345
NET ASSETS
Beginning of period -0-
------------
End of period (including undistributed net investment
income of $6,568) $ 5,268,345
============
(a) Commencement of operations.
See Notes to Financial Statements.
10
GLOBAL RESEARCH GROWTH PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2005 (UNAUDITED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
NOTE A: SIGNIFICANT ACCOUNTING POLICIES
The AllianceBernstein Global Research Growth Portfolio (the "Portfolio") is a
series of AllianceBernstein Variable Products Series Fund, Inc. (the "Fund").
The Portfolio's investment objective is to seek long-term growth of capital.
The Fund was incorporated in the State of Maryland on November 17, 1987, as an
open-end series investment company. The Fund offers twenty-three separately
managed pools of assets which have differing investment objectives and
policies. The Portfolio commenced operations on May 2, 2005. The Portfolio
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.
The Portfolio 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
the Portfolio's net asset value per share.
The financial statements have been prepared in conformity with U.S. generally
accepted accounting principles, which require management to make certain
estimates and assumptions that affect the reported amounts of assets and
liabilities in the financial statements and amounts of income and expenses
during the reporting period. Actual results could differ from those estimates.
Additional information about some of the items discussed in these Notes to
Financial Statements is contained in the Fund's Statement of Additional
Information, which is available upon request. The following is a summary of
significant accounting policies followed by the Portfolio.
1. SECURITY VALUATION
Portfolio securities are valued at their current market value determined on the
basis of market quotations or, if market quotations are not readily available
or are deemed unreliable, at "fair value" as determined in accordance with
procedures established by and under the general supervision of the Fund's Board
of Directors.
In general, the market value of securities which are readily available and
deemed reliable are determined as follows. Securities listed on a national
securities exchange or on a foreign securities exchange are valued at the last
sale price at the close of the exchange or foreign securities exchange. If
there has been no sale on such day, the securities are valued at the mean of
the closing bid and asked prices on such day. Securities listed on more than
one exchange are valued by reference to the principal exchange on which the
securities are traded; securities not listed on an exchange but traded on The
NASDAQ Stock Market, Inc. ("NASDAQ") are valued in accordance with the NASDAQ
Official Closing Price; listed put or call options are valued at the last sale
price. If there has been no sale on that day, such securities will be valued at
the closing bid prices on that day; open futures contracts and options thereon
are valued using the closing settlement price or, in the absence of such a
price, the most recent quoted bid price. If there are no quotations available
for the day of valuation, the last available closing settlement price is used;
securities traded in the over-the-counter market, ("OTC") (but excluding
securities traded on NASDAQ) are valued at the mean of the current bid and
asked prices as reported by the National Quotation Bureau or other comparable
sources; U.S. Government securities and other debt instruments having 60 days
or less remaining until maturity are valued at amortized cost if their original
maturity was 60 days or less; or by amortizing their fair value as of the 61st
day prior to maturity if their original term to maturity exceeded 60 days;
fixed-income securities, including mortgage backed and asset backed securities,
may be valued on the basis of prices provided by a pricing service or at a
price obtained from one or more of the major broker/dealers. In cases where
broker/dealer quotes are obtained, Alliance Capital Management, L.P. (the
"Adviser") may establish procedures whereby changes in market yields or spreads
are used to adjust, on a daily basis, a recently obtained quoted price on a
security; and OTC and other derivatives are valued on the basis of a quoted bid
price or spread from a major broker/dealer in such security.
Securities for which market quotations are not readily available (including
restricted securities) or are deemed unreliable are valued at fair value.
Factors considered in making this determination may include, but are not
limited to, information obtained by contacting the issuer, analysts, analysis
of the issuer's financial statements or other available documents. In addition,
the Fund may use fair value pricing for securities primarily traded in non-U.S.
markets because, most foreign markets close well before the Fund values its
securities at 4:00 p.m., Eastern Time. The earlier close of these foreign
markets gives rise to the possibility that significant events, including broad
market moves, may have occurred in the interim and may materially affect the
value of those securities. To account for this, the Fund may frequently value
many of its foreign equity securities using fair value prices based on third
party vendor modeling tools to the extent available.
11
GLOBAL RESEARCH GROWTH PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
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 prices of such currencies against the U.S.
dollar. Purchases and sales of portfolio securities are translated into U.S.
dollars at the rates of exchange prevailing when such securities were acquired
or sold. Income and expenses are translated into U.S. dollars at rates of
exchange prevailing when accrued.
Net realized gain or loss on foreign currency transactions represents foreign
exchange gains and losses from sales and maturities of foreign fixed income
investments, foreign currency exchange contracts, holding of foreign
currencies, currency gains or losses realized between the trade and settlement
dates on foreign investment transactions, and the difference between the
amounts of dividends, interest and foreign withholding taxes recorded on the
Portfolio's books and the U.S. dollar equivalent amounts actually received or
paid. Net unrealized 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 or depreciation of investments
and foreign currency denominated assets and liabilities.
3. TAXES
It is the policy of the Portfolio 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. The Fund may be subject to taxes imposed by countries in which it
invests. Such taxes are generally based on income and/or capital gains earned
or repatriated. Taxes are accrued and applied to net investment income, net
realized gains and net unrealized appreciation/depreciation as such income
and/or gains are earned.
4. INVESTMENT INCOME AND INVESTMENT TRANSACTIONS
Dividend income is recorded on the ex-dividend date or as soon as the Portfolio
is informed of the dividend. Interest income is accrued daily. Investment
transactions are accounted for on the trade date securities are purchased or
sold. Investment gains and losses are determined on the identified cost basis.
The Portfolio amortizes premiums and accretes discounts as adjustments to
interest income.
5. INCOME AND EXPENSES
Expenses attributable to a single portfolio are charged to that portfolio.
Expenses of the Fund are charged to each portfolio in proportion to net assets.
All income earned and expenses incurred by a portfolio with multi-class shares
outstanding are borne on a pro-rata basis by each outstanding class of shares,
based on the proportionate interest in the portfolio represented by the net
assets of such class, except that the portfolio's Class B shares bear the
distribution fees.
6. DIVIDENDS AND DISTRIBUTIONS
The Portfolio declares and distributes dividends and distributions from net
investment income and net realized gains, respectively, if any, at least
annually. 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 U.S. generally accepted accounting principles. 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 the
Adviser an advisory fee at an annual rate of .75% of the first $2.5 billion,
..65% of the next $2.5 billion and .60% in excess of $5 billion, of the
Portfolio's average daily net assets. The fee is accrued daily and paid monthly.
The Adviser has agreed to waive its fees and bear certain expenses to the
extent necessary to limit total operating expenses on an annual basis to 1.20%
and 1.45% of the daily average net assets for Class A and Class B shares,
respectively. For the period ended June 30, 2005 the Adviser waived fees in the
amount of $35,276.
12
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
Pursuant to the terms of the investment advisory agreement, the Portfolio has
voluntarily agreed to reimburse the Adviser for the cost of providing the
Portfolio with certain legal and accounting services. Due to the Adviser's
agreement to limit total operating expenses as described above, the Adviser
waived reimbursement for such services in the amount of $13,000 for the period
ended June 30, 2005.
Brokerage commissions paid on investment transactions for the period ended June
30, 2005, amounted to $7,160, none of which was paid to Sanford C. Bernstein &
Co. LLC and Sanford C. Bernstein Limited, affiliates of the Adviser.
The Portfolio compensates Alliance Global Investor Services, Inc., a
wholly-owned subsidiary of the Adviser, under a Transfer Agency Agreement for
providing personnel and facilities to perform transfer agency services for the
Portfolio. Such compensation amounted to $134 for the period ended June 30,
2005.
NOTE C: DISTRIBUTION PLAN
The Portfolio has adopted a Distribution Plan (the "Plan") for Class B shares
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the
Plan, the Portfolio pays distribution and servicing fees to AllianceBernstein
Investment Research and Management, Inc., (the "Distributor"), formerly
Alliance Fund Distributors, Inc., a wholly-owned subsidiary of the Adviser, at
an annual rate of up to .50% of the 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 limits payments under the Plan to
..25% of the Portfolio's average daily net assets attributable to Class B
shares. The Plan provides that the Distributor will use such payments in their
entirety for distribution assistance and promotional activities.
The Portfolio is not obligated under the Plan to pay any distribution and
servicing fees in excess of the amounts set forth above. The purpose of the
payments to the Distributor under the Plan is to compensate the Distributor for
its distribution services with respect to the sale of the Portfolio's Class B
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 Plan is
characterized by the staff of the Securities and Exchange Commission as being
of the "compensation" variety.
In the event that the Plan is terminated or not continued, no distribution and
servicing fees (other than current amounts accrued but not yet paid) would be
owed by the Portfolio to the Distributor.
The Plan also provides that the Adviser may use its own resources to finance
the distribution of the Portfolio's shares.
NOTE D: INVESTMENT TRANSACTIONS
Purchases and sales of investment securities (excluding short-term investments)
for the period ended June 30, 2005 were as follows:
PURCHASES SALES
============== ==============
Investment securities
(excluding U.S. government securities) $ 5,284,221 $ 372,690
U.S. government securities -0- -0-
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 $ 277,208
Gross unrealized depreciation (67,754)
--------------
Net unrealized appreciation $ 209,454
==============
1. FINANCIAL FUTURES CONTRACTS
The Portfolio may buy or sell financial futures contracts for the purpose of
hedging its portfolio against adverse effects of anticipated movements in the
market. The Portfolio bears the market risk that arises from changes in the
value of these financial instruments and the imperfect correlation between
movements in the price of the futures contracts and movements in the price of
the securities hedged or used for cover.
13
GLOBAL RESEARCH GROWTH PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
At the time the Portfolio enters into a futures contract, the Portfolio
deposits and maintains as collateral an initial margin as required by the
exchange on which the transaction is affected. Pursuant to the contract, the
Portfolio agrees to receive from or pay to the broker an amount of cash equal
to the daily fluctuation in the value of the contract. Such receipts or
payments are known as variation margin and are recorded by the Portfolio as
unrealized gains or losses. Risks may arise from the potential inability of a
counterparty to meet the terms of the contract. When the contract is closed,
the Portfolio records a realized gain or loss equal to the difference between
the value of the contract at the time it was opened and the time it was closed.
2. FORWARD EXCHANGE CURRENCY CONTRACTS
The Portfolio may enter into forward exchange currency contracts in order to
hedge its exposure to changes in foreign currency exchange rates on its 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 on a future date at a negotiated forward rate. The gain or loss
arising from the difference between the original contract and the closing of
such contract would be included in net realized gain or loss on foreign
currency transactions.
Fluctuations in the value of open forward exchange currency contracts are
recorded for financial reporting purposes as net unrealized appreciation or
depreciation by the Portfolio.
The Portfolio's custodian will place and maintain cash not available for
investment or other liquid assets in a separate account of the Portfolio having
a value at least equal to the aggregate amount of the Portfolio's commitments
under forward exchange currency contracts entered into with respect to position
hedges.
Risks may arise from the potential inability of the 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 the Portfolio has in that particular
currency contract.
3. OPTION TRANSACTIONS
For hedging and investment purposes, the Portfolio may purchase and write
(sell) put and call options on U.S. and foreign government securities and
foreign currencies that are traded on U.S. and foreign 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 written options which
expire unexercised are recorded by the Portfolio on the expiration date as
realized gains from options written. 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. If a
put option is exercised, the premium received reduces the cost basis of the
security or currency purchased by the Portfolio. 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.
14
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
NOTE E: CAPITAL STOCK
There are 1,000,000,000 shares of $.001 par value capital stock authorized,
divided into two classes, designated Class A and Class B shares. Each class
consists of 500,000,000 authorized shares. Transactions in capital stock were
as follows:
SHARES AMOUNT
============== ==============
MAY 2, MAY 2,
2005(a) TO 2005(a) TO
JUNE 30, 2005 JUNE 30, 2005
(UNAUDITED) (UNAUDITED)
============== ==============
CLASS A
Shares sold 10,000 $ 100,000
-------------- --------------
Net increase 10,000 $ 100,000
============== ==============
CLASS B
Shares sold 494,407 $ 4,945,365
Shares redeemed (14) (142)
-------------- --------------
Net increase 494,393 $ 4,945,223
============== ==============
(a) Commencement of operations.
NOTE F: RISKS INVOLVED IN INVESTING IN THE PORTFOLIO
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.
Indemnification Risk--In the ordinary course of business, the Portfolio enters
into contracts that contain a variety of indemnifications. The Portfolio's
maximum exposure under these arrangements is unknown. However, the Portfolio
has not had prior claims or losses pursuant to these indemnification provisions
and expects the risk of loss thereunder to be remote.
NOTE G: JOINT CREDIT FACILITY
A number of open-end mutual funds managed by the Adviser, including the
Portfolio, participate in a $500 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
Portfolio did not utilize the Facility during the period ended June 30, 2005.
NOTE H: LEGAL PROCEEDINGS
As has been previously reported, the staff of the U.S. Securities and Exchange
Commission ("SEC") and the NYAG have been investigating practices in the mutual
fund industry identified as "market timing" and "late trading" of mutual fund
shares. Certain other regulatory authorities have also been conducting
investigations into these practices within the industry and have requested that
the Adviser provide information to them. The Adviser has been cooperating and
will continue to cooperate with all of these authorities.
On December 18, 2003, the Adviser confirmed that it had reached terms with the
SEC and the NYAG for the resolution of regulatory claims relating to the
practice of "market timing" mutual fund shares in some of the AllianceBernstein
Mutual Funds. The agreement with the SEC is reflected in an Order of the
Commission ("SEC Order"). The agreement with the NYAG is memorialized in an
Assurrance of Discontinuance dated September 1, 2004 ("NYAG Order"). Among the
key provisions of these agreements are the following:
(i) The Adviser agreed to establish a $250 million fund (the "Reimbursement
Fund") to compensate mutual fund shareholders for the adverse effects of market
timing attributable to market timing relationships described in the SEC Order.
According to the SEC Order, the Reimbursement Fund is to be paid, in order of
priority, to fund investors based on (i) their aliquot share of losses suffered
by the fund due to market timing, and (ii) a proportionate share of advisory
fees paid by such fund during the period of such market timing;
15
GLOBAL RESEARCH GROWTH PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
(ii) The Adviser agreed to reduce the advisory fees it receives from some of
the AllianceBernstein long-term, open-end retail funds until December 31, 2008;
and
(iii) The Adviser agreed to implement changes to its governance and compliance
procedures. Additionally, the SEC Order and the NYAG Order contemplate that the
Adviser's registered investment company clients, including the Fund, will
introduce governance and compliance changes.
In anticipation of final, definitive documentation of the NYAG Order and
effective January 1, 2004, the Adviser began waiving a portion of its advisory
fee with respect to certain AllianceBernstein funds.
A special committee of the Adviser's Board of Directors, comprised of the
members of the Adviser's Audit Committee and the other independent member of
the Adviser's Board, is continuing to direct and oversee an internal
investigation and a comprehensive review of the facts and circumstances
relevant to the SEC's and the NYAG's investigations.
In addition, the Independent Directors of the Fund ("the Independent
Directors") have initiated an investigation of the above-mentioned matters with
the advice of an independent economic consultant and independent counsel. The
Independent Directors have formed a special committee to supervise the
investigation.
On October 2, 2003, a putative class action complaint entitled Hindo et al. v.
AllianceBernstein Growth & Income Fund et al. (the "Hindo Complaint") was filed
against the Adviser; Alliance Capital Management Holding L.P.; Alliance Capital
Management Corporation; AXA Financial, Inc.; certain of the AllianceBernstein
Mutual Funds, including the Fund; Gerald Malone; Charles Schaffran
(collectively, the "Alliance Capital defendants"); and certain other defendants
not affiliated with the Adviser. The Hindo Complaint was filed in the United
States District Court for the Southern District of New York by alleged
shareholders of two of the AllianceBernstein Mutual Funds. The Hindo Complaint
alleges that certain of the Alliance Capital defendants failed to disclose that
they improperly allowed certain hedge funds and other unidentified parties to
engage in late trading and market timing of AllianceBernstein Fund securities,
violating Sections 11 and 15 of the Securities Act, Sections 10(b) and 20(a) of
the Exchange Act, and Sections 206 and 215 of the Advisers Act. Plaintiffs seek
an unspecified amount of compensatory damages and rescission of their contracts
with the Adviser, including recovery of all fees paid to the Adviser pursuant
to such contracts.
Since October 2, 2003, numerous additional lawsuits making factual allegations
similar to those in the Hindo Complaint were filed against the Adviser and
certain other defendants, some of which name the Fund as a defendant. All of
these lawsuits seek an unspecified amount of damages. The lawsuits are now
pending in the United States District Court for the District of Maryland
pursuant to a ruling by the Judicial Panel on Multidistrict Litigation
transferring and centralizing all of the mutual fund cases involving market and
late trading in the District of Maryland.
As a result of the matters discussed above, investors in the AllianceBernstein
Mutual Funds may choose to redeem their investments. This may require the
AllianceBernstein Mutual Funds to sell investments held by those funds to
provide for sufficient liquidity and could also have an adverse effect on the
investment performance of the AllianceBernstein Mutual Funds.
The Adviser and approximately twelve other investment management firms were
publicly mentioned in connection with the settlement by the SEC of charges that
an unaffiliated broker/dealer violated federal securities laws relating to its
receipt of compensation for selling specific mutual funds and the disclosure of
such compensation. The SEC indicated publicly that, among other things, it was
considering enforcement action in connection with mutual funds' disclosure of
such arrangements and in connection with the practice of considering mutual
fund sales in the direction of brokerage commissions from fund portfolio
transactions. The SEC issued subpoenas to the Adviser, and the NASD issued
requests for information in connection with this matter and the Adviser
provided documents and other information to the SEC and NASD and cooperated
fully with the investigations. On June 8, 2005 the NASD announced that it had
reached a settlement with the Distributor in connection with this matter.
Management of the Adviser expects that the settlement has resolved both
regulatory inquiries described above.
On June 22, 2004, a purported class action complaint entitled Aucoin, et al. v.
Alliance Capital Management L.P., et al. ("Aucoin Complaint") was filed against
the Adviser, Alliance Capital Management Holding L.P., Alliance Capital
Management Corporation, AXA Financial, Inc., AllianceBernstein Investment
Research & Management, Inc., certain current and former directors of the
AllianceBernstein Mutual Funds, and unnamed Doe defendants. The Aucoin
Complaint
16
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
names certain of the AllianceBernstein mutual funds as nominal defendants. The
Aucoin Complaint was filed in the United States District Court for the Southern
District of New York by an alleged shareholder of an AllianceBernstein mutual
fund. The Aucoin Complaint alleges, among other things, (i) that certain of the
defendants improperly authorized the payment of excessive commissions and other
fees from fund assets to broker-dealers in exchange for preferential marketing
services, (ii) that certain of the defendants misrepresented and omitted from
registration statements and other reports material facts concerning such
payments, and (iii) that certain defendants caused such conduct as control
persons of other defendants. The Aucoin Complaint asserts claims for violation
of Sections 34(b), 36(b) and 48(a) of the Investment Company Act, Sections 206
and 215 of the Advisers Act, breach of common law fiduciary duties, and aiding
and abetting breaches of common law fiduciary duties. Plaintiffs seek an
unspecified amount of compensatory damages and punitive damages, rescission of
their contracts with the Adviser, including recovery of all fees paid to the
Adviser pursuant to such contracts, an accounting of all fund-related fees,
commissions and soft dollar payments, and restitution of all unlawfully or
discriminatorily obtained fees and expenses.
Since June 22, 2004, numerous additional lawsuits making factual allegations
substantially similar to those in the Aucoin Complaint were filed against the
Adviser and certain other defendants, and others may be filed.
It is possible that these matters and/or other developments resulting from
these matters could result in increased redemptions of the Fund's shares or
other adverse consequences to the Fund. However, the Adviser believes that
these matters are not likely to have a material adverse effect on its ability
to perform advisory services relating to the Fund.
17
GLOBAL RESEARCH GROWTH PORTFOLIO
FINANCIAL HIGHLIGHTS
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT THE PERIOD
CLASS A
==============
MAY 2, 2005(a)
TO
JUNE 30, 2005
(UNAUDITED)
==============
Net asset value, beginning of period $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (b)(c) .02
Net realized and unrealized gain on investment and foreign
currency transactions .43
Net increase in net asset value from operations .45
Net asset value, end of period $10.45
TOTAL RETURN
Total investment return based on net asset value (d) 4.50%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $104
Ratio to average net assets of:
Expenses, net of waivers and reimbursements (e) 1.20%
Expenses, before waivers and reimbursements (e) 6.97%
Net investment income (c)(e) 1.03%
Portfolio turnover rate 7%
See footnote summary on page 19.
18
ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND
_______________________________________________________________________________
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT THE PERIOD
CLASS B
==============
MAY 2, 2005(a)
TO
JUNE 30, 2005
(UNAUDITED)
==============
Net asset value, beginning of period $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (b)(c) .01
Net realized and unrealized gain on investment and foreign
currency transactions .43
Net increase in net asset value from operations .44
Net asset value, end of period $10.44
TOTAL RETURN
Total investment return based on net asset value (d) 4.40%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) $5,164
Ratio to average net assets of:
Expenses, net of waivers and reimbursements (e) 1.45%
Expenses, before waivers and reimbursements (e) 7.22%
Net investment income (c)(e) .78%
Portfolio turnover rate 7%
(a) Commencement of operations.
(b) Based on average shares outstanding.
(c) Net of expenses waived and reimbursed by the Adviser.
(d) 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 return does not reflect the
deduction of taxes that a shareholder would pay on Portfolio distributions or
the redemption of Portfolio shares. Total investment return calculated for a
period of less than one year is not annualized.
(e) Annualized.
19
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ITEM 2. CODE OF ETHICS.
Not applicable when filing a semi-annual report to shareholders.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable when filing a semi-annual report to shareholders.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable when filing a semi-annual report to shareholders.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable to the Registrant.
ITEM 6. SCHEDULE OF INVESTMENTS.
Please see Schedule of Investments contained in the Report to Shareholders
included under Item 1 of this Form N-CSR.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable to the Registrant.
ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable to the Registrant.
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have been no material changes to the procedures by which shareholders may
recommend nominees to the Fund's Board of Directors since the Fund last
provided disclosure in response to this item.
ITEM 10. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive officer and principal financial
officer have concluded that the registrant's disclosure controls and procedures
(as defined in Rule 30a-2(c) under the Investment Company Act of 1940, as
amended) are effective at the reasonable assurance level based on their
evaluation of these controls and procedures as of a date within 90 days of the
filing date of this document.
(b) There were no significant changes in the registrant's internal controls
over financial reporting during the second fiscal quarter of the period that
could significantly affect these controls subsequent to the date of their
evaluation, including any corrective actions with regard to significant
deficiencies and material weaknesses.
ITEM 11. EXHIBITS.
The following exhibits are attached to this Form N-CSR:
EXHIBIT NO. DESCRIPTION OF EXHIBIT
11 (b) (1) Certification of Principal Executive Officer Pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002
11 (b) (2) Certification of Principal Financial Officer Pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002
11 (c) Certification of Principal Executive Officer and
Principal Financial Officer Pursuant to Section 906
of the Sarbanes-Oxley Act of 2002
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant): AllianceBernstein Variable Products Series Fund, Inc.
By: /s/ Marc O. Mayer
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Marc O. Mayer
President
Date: August 29, 2005
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/ Marc O. Mayer
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Marc O. Mayer
President
Date: August 29, 2005
By: /s/ Mark D. Gersten
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Mark D. Gersten
Treasurer and Chief Financial Officer
Date: August 29, 2005