-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FquQrQ7AjndyNI61sia2nWtd5ma/WY42BOCQGGttaCKIP3sMSa6zrLN8/gJvB2BP 2mgdngyJqSwmFud7DwbGTQ== 0000950123-99-001605.txt : 19990226 0000950123-99-001605.hdr.sgml : 19990226 ACCESSION NUMBER: 0000950123-99-001605 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19990225 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TRAVELERS SEPARATE ACCOUNT PF II FOR VARIABLE ANNUITIES CENTRAL INDEX KEY: 0001043307 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-08317 FILM NUMBER: 99549816 BUSINESS ADDRESS: STREET 1: TRAVELERS INSURANCE FNCL SVCS LEGAL DIV STREET 2: ONE TOWER SQUARE CITY: HARTFORD STATE: CT ZIP: 06183 BUSINESS PHONE: 8602770111 MAIL ADDRESS: STREET 1: TRAVELERS INSURANCE FNCL SVCS LEGAL DIV STREET 2: ONE TOWER SQUARE CITY: HARTFORD STATE: CT ZIP: 06183 N-30D 1 TRAVELERS SEPARATE ACCOUNT PFII FOR VAR ANN 1 ANNUAL REPORT DECEMBER 31, 1998 THE TRAVELERS SEPARATE ACCOUNT PF II FOR VARIABLE ANNUITIES [TRAVELERS LIFE & ANNUITY LOGO] The Travelers Insurance Company The Travelers Life and Annuity Company One Tower Square Hartford, CT 06183 2 THE TRAVELERS SEPARATE ACCOUNT PF II FOR VARIABLE ANNUITIES STATEMENT OF ASSETS AND LIABILITIES DECEMBER 31, 1998 ASSETS: Investments in eligible funds at market value: Greenwich Street Series Fund, 1,748,730 shares (cost $33,821,388) ................... $ 37,003,126 Smith Barney Concert Allocation Series Inc., 8,955,450 shares (cost $101,397,788).... 108,690,916 The Travelers Series Trust, 2,318,389 shares (cost $21,481,004) ..................... 24,213,953 Travelers Series Fund Inc., 12,312,656 shares (cost $53,962,907) .................... 56,479,789 ------------ Total Investments (cost $210,663,087) ............................................. $226,387,784 Receivables: Dividends ........................................................................... 45,039 Purchase payments and transfers from other Travelers accounts ....................... 2,271,463 ------------ Total Assets ...................................................................... 228,704,286 ------------ LIABILITIES: Payables: Contract surrenders and transfers to other Travelers accounts ....................... 3,734 Insurance charges ................................................................... 59,652 Administrative fees ................................................................. 7,158 Accrued liabilities .................................................................. 1,508 ------------ Total Liabilities ..................................................................... 72,052 ------------ NET ASSETS: ........................................................................... $228,632,234 ============
See Notes to Financial Statements -1- 3 THE TRAVELERS SEPARATE ACCOUNT PF II FOR VARIABLE ANNUITIES STATEMENT OF OPERATIONS FOR THE PERIOD JUNE 24, 1998 (DATE OPERATIONS COMMENCED) TO DECEMBER 31, 1998 INVESTMENT INCOME: Dividends .................................................... $ 190,250 EXPENSES: ..................................................... Insurance charges ............................................ $ 589,511 Administrative fees .......................................... 69,316 ------------ Total expenses ............................................. 658,827 ------------ Net investment loss ....................................... (468,577) ------------ REALIZED GAIN (LOSS) AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Realized gain (loss) from investment transactions: ........... Proceeds from investments sold .............................. 3,768,072 Cost of investments sold .................................... 3,868,691 ------------ Net realized gain (loss) .................................. (100,619) Unrealized gain (loss) on investments: ....................... Unrealized gain at December 31, 1998 ........................ 15,724,697 ------------ Net realized gain (loss) and unrealized gain (loss) ...... 15,624,078 ------------ Net increase in net assets resulting from operations ......... $ 15,155,501 ============
See Notes to Financial Statements -2- 4 THE TRAVELERS SEPARATE ACCOUNT PF II FOR VARIABLE ANNUITIES STATEMENT OF CHANGES IN NET ASSETS FOR THE PERIOD JUNE 24, 1998 (DATE OPERATIONS COMMENCED) TO DECEMBER 31, 1998 OPERATIONS: Net investment loss .......................................... $ (468,577) Net realized gain (loss) from investment transactions ........ (100,619) Unrealized gain (loss) on investments ........................ 15,724,697 ------------- Net increase in net assets resulting from operations ........ 15,155,501 ------------- UNIT TRANSACTIONS: Participant purchase payments (applicable to 229,328,581 units) ........................... 215,425,708 Participant transfers from other Travelers accounts (applicable to 5,426,668 units) ............................. 5,227,125 Administrative charges (applicable to 2,412 units) ................................. (2,136) Contract surrenders (applicable to 2,118,018 units) ............................. (1,980,525) Participant transfers to other Travelers accounts (applicable to 5,290,519 units) ............................. (5,193,439) ------------- Net increase in net assets resulting from unit transactions .. 213,476,733 ------------- Net increase in net assets .................................. 228,632,234 NET ASSETS: Beginning of period .......................................... -- ------------- End of period ................................................ $ 228,632,234 =============
See Notes to Financial Statements -3- 5 NOTES TO FINANCIAL STATEMENTS 1. SIGNIFICANT ACCOUNTING POLICIES The Travelers Separate Account PF II for Variable Annuities ("Separate Account PF II") is a separate account of The Travelers Life and Annuity Company ("Travelers Life"), which is a wholly owned subsidiary of The Travelers Insurance Company ("The Travelers"), an indirect wholly owned subsidiary of Citigroup Inc. (formerly Travelers Group Inc.), and is available for funding certain variable annuity contracts issued by Travelers Life. Separate Account PF II is registered under the Investment Company Act of 1940, as amended, as a unit investment trust. Participant purchase payments applied to Separate Account PF II are invested in one or more eligible funds in accordance with the selection made by the contract owner. As of December 31, 1998, the eligible funds available under Separate Account PF II were: Smith Barney High Income Portfolio, Smith Barney International Equity Portfolio, Smith Barney Large Cap Value Portfolio, Smith Barney Money Market Portfolio and MFS Total Return Portfolio of Travelers Series Fund Inc.; MFS Mid Cap Growth Portfolio and MFS Research Portfolio of The Travelers Series Trust; Appreciation Portfolio of Greenwich Street Series Fund and Select High Growth Portfolio, Select Growth Portfolio, Select Balanced Portfolio, Select Conservative Portfolio and Select Income Portfolio of Smith Barney Concert Allocation Series Inc. Travelers Series Fund Inc. and Smith Barney Concert Allocation Series Inc. are incorporated under Maryland law. The Travelers Series Trust and Greenwich Street Series Fund are registered as Massachusetts business trusts. All eligible funds are managed by affiliates of The Travelers. Not all funds may be available in all states or to all contract owners. The following is a summary of significant accounting policies consistently followed by Separate Account PF II in the preparation of its financial statements. SECURITY VALUATION. Investments are valued daily at the net asset values per share of the underlying funds. SECURITY TRANSACTIONS. Security transactions are accounted for on the trade date. Dividend income is recorded on the ex-dividend date. FEDERAL INCOME TAXES. The operations of Separate Account PF II form a part of the total operations of Travelers Life and are not taxed separately. Travelers Life is taxed as a life insurance company under the Internal Revenue Code of 1986, as amended (the "Code"). Under existing federal income tax law, no taxes are payable on the investment income of Separate Account PF II. Separate Account PF II is not taxed as a "regulated investment company" under Subchapter M of the Code. OTHER. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. -4- 6 NOTES TO FINANCIAL STATEMENTS - CONTINUED 2. INVESTMENTS The aggregate costs of purchases and proceeds from sales of investments were $214,531,778 and $3,768,072, respectively, for the period ended December 31, 1998. Realized gains and losses from investment transactions are reported on an identified cost basis. The cost of investments in eligible funds was $210,663,087 at December 31, 1998. Gross unrealized appreciation for all investments at December 31, 1998 was $15,724,697. 3. CONTRACT CHARGES Insurance charges are paid for the mortality and expense risks assumed by Travelers Life. These charges are equivalent to 1.25% of the average net assets of Separate Account PF II on an annual basis. Administrative fees are paid for administrative expenses incurred by Travelers Life. This charge is equivalent to 0.15% of the average net assets of Separate Account PF II on an annual basis. For contracts in the accumulation phase, an annual charge of $30 (prorated for partial periods) is deducted from participant account balances and paid to Travelers Life to cover contract administrative charges. No sales charge is deducted from participant purchase payments when they are received. However, Travelers Life generally assesses a contingent deferred sales charge of up to 8% if a participant's purchase payment is surrendered within eight years of its payment date. Contract surrender payments include $16,888 of contingent deferred sales charges for the period ended December 31, 1998. -5- 7 NOTES TO FINANCIAL STATEMENTS - CONTINUED 4. NET CONTRACT OWNERS' EQUITY
DECEMBER 31, 1998 -------------------------------------- ACCUMULATION UNIT NET UNITS VALUE ASSETS ----- ----- ------ Greenwich Street Series Fund Appreciation Portfolio ....................... 36,108,910 $ 1.032 $37,269,078 Smith Barney Concert Allocation Series Inc. Select Balanced Portfolio .................... 37,964,992 1.010 38,336,736 Select Conservative Portfolio ................ 14,254,579 1.006 14,344,719 Select Growth Portfolio ...................... 30,475,847 1.028 31,336,472 Select High Growth Portfolio ................. 18,718,704 1.007 18,857,052 Select Income Portfolio ...................... 6,835,035 1.005 6,868,179 The Travelers Series Trust MFS Mid Cap Growth Portfolio ................. 5,280,045 1.008 5,322,206 MFS Research Portfolio ....................... 18,932,328 1.009 19,108,564 Travelers Series Fund Inc. MFS Total Return Portfolio ................... 11,901,259 1.011 12,036,380 Smith Barney International Equity Portfolio... 8,642,970 0.889 7,683,936 Smith Barney Money Market Portfolio .......... 9,365,841 1.016 9,520,367 Smith Barney High Income Portfolio ........... 7,250,612 0.958 6,943,892 Smith Barney Large Cap Value Portfolio ....... 21,613,178 0.972 21,004,653 ------------- Net Contract Owners' Equity .................................................... $ 228,632,234 =============
-6- 8 NOTES TO FINANCIAL STATEMENTS - CONTINUED 5. STATEMENT OF INVESTMENTS
INVESTMENT OPTIONS NO. OF MARKET SHARES VALUE ------------- ------------ GREENWICH STREET SERIES FUND (16.3%) Appreciation Portfolio Total (Cost $33,821,388) 1,748,730 $ 37,003,126 ------------ ------------ SMITH BARNEY CONCERT ALLOCATION SERIES INC. (48.0%) Select Balanced Portfolio (Cost $36,264,954) 3,188,969 38,044,404 Select Conservative Portfolio (Cost $13,591,310) 1,204,523 14,008,608 Select Growth Portfolio (Cost $28,271,697) 2,483,252 31,065,484 Select High Growth Portfolio (Cost $16,558,456) 1,486,136 18,710,456 Select Income Portfolio (Cost $6,711,371) 592,570 6,861,964 ------------ ------------ Total (Cost $101,397,788) 8,955,450 108,690,916 ------------ ------------ THE TRAVELERS SERIES TRUST (10.7%) MFS Mid Cap Growth Portfolio (Cost $4,595,880) 525,966 5,285,962 MFS Research Portfolio (Cost $16,885,124) 1,792,423 18,927,991 ------------ ------------ Total (Cost $21,481,004) 2,318,389 24,213,953 ------------ ------------ TRAVELERS SERIES FUND INC. (25.0%) MFS Total Return Portfolio (Cost $11,360,616) 701,947 11,954,153 Smith Barney International Equity Portfolio (Cost $7,113,149) 549,349 7,548,057 Smith Barney Money Market Portfolio (Cost $9,498,220) 9,498,220 9,498,220 Smith Barney High Income Portfolio (Cost $6,814,265) 544,596 6,894,590 Smith Barney Large Cap Value Portfolio (Cost $19,176,657) 1,018,544 20,584,769 ------------ ------------ Total (Cost $53,962,907) 12,312,656 56,479,789 ------------ ------------ TOTAL INVESTMENT OPTIONS (100%) (Cost $210,663,087) $226,387,784 ============
-7- 9 NOTES TO FINANCIAL STATEMENTS - CONTINUED 6. SCHEDULE OF SEPARATE ACCOUNT PF II OPERATIONS AND CHANGES IN NET ASSETS FOR THE PERIOD JUNE 24, 1998 (DATE OPERATIONS COMMENCED) TO DECEMBER 31, 1998
SELECT APPRECIATION SELECT BALANCED CONSERVATIVE SELECT GROWTH PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO ------------ --------------- ------------ ------------- INVESTMENT INCOME: Dividends ............................................ $ 23,882 $ 23,373 $ 7,840 $ 15,073 ------------ ------------ ------------ ------------ EXPENSES: Insurance charges .................................... 95,877 100,848 33,313 82,855 Administrative fees .................................. 10,860 12,102 3,998 9,160 ------------ ------------ ------------ ------------ Net investment income (loss) .................... (82,855) (89,577) (29,471) (76,942) ------------ ------------ ------------ ------------ REALIZED GAIN (LOSS) AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Realized gain (loss) from investment transactions: Proceeds from investments sold ..................... -- 96,895 80,689 42 Cost of investments sold ........................... -- 101,006 84,605 41 ------------ ------------ ------------ ------------ Net realized gain (loss) .......................... -- (4,111) (3,916) 1 ------------ ------------ ------------ ------------ Unrealized gain (loss) on investments: End of period ....................................... 3,181,738 1,779,450 417,298 2,793,787 ------------ ------------ ------------ ------------ Net increase (decrease) in net assets resulting from operations ....................... 3,098,883 1,685,762 383,911 2,716,846 ------------ ------------ ------------ ------------ UNIT TRANSACTIONS: Participant purchase payments ........................ 33,875,982 35,896,896 13,964,837 28,553,318 Participant transfers from other Travelers accounts .. 613,652 1,111,468 105,139 405,100 Administrative charges ............................... (396) (223) (73) (293) Contract surrenders .................................. (225,799) (307,397) (81,811) (266,491) Participant transfers to other Travelers accounts .... (93,244) (49,770) (27,284) (72,008) ------------ ------------ ------------ ------------ Net increase (decrease) in net assets resulting from unit transactions ................ 34,170,195 36,650,974 13,960,808 28,619,626 ------------ ------------ ------------ ------------ Net increase (decrease) in net assets ........... 37,269,078 38,336,736 14,344,719 31,336,472 NET ASSETS: Beginning of period ................................ -- -- -- -- ------------ ------------ ------------ ------------ End of period ...................................... $ 37,269,078 $ 38,336,736 $ 14,344,719 $ 31,336,472 ============ ============ ============ ============ SELECT HIGH GROWTH PORTFOLIO ---------------- Investment Income: Dividends ............................................ $ 9,765 ------------ EXPENSES: Insurance charges .................................... 47,540 Administrative fees .................................. 5,705 ------------ Net investment income (loss) .................... (43,480) ------------ REALIZED GAIN (LOSS) AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Realized gain (loss) from investment transactions: Proceeds from investments sold ..................... 84,677 Cost of investments sold ........................... 105,864 ------------ Net realized gain (loss) .......................... (21,187) ------------ Unrealized gain (loss) on investments: End of period ....................................... 2,152,000 ------------ Net increase (decrease) in net assets resulting from operations ....................... 2,087,333 ------------ UNIT TRANSACTIONS: Participant purchase payments ........................ 16,963,444 Participant transfers from other Travelers accounts .. 312,733 Administrative charges ............................... (227) Contract surrenders .................................. (467,000) Participant transfers to other Travelers accounts .... (39,231) ------------ Net increase (decrease) in net assets resulting from unit transactions ................ 16,769,719 ------------ Net increase (decrease) in net assets ........... 18,857,052 NET ASSETS: Beginning of period ................................ -- ------------ End of period ...................................... $ 18,857,052 ============
-8- 10 NOTES TO FINANCIAL STATEMENTS - CONTINUED
SMITH BARNEY SMITH BARNEY SMITH BARNEY SELECT INCOME MFS MID CAP MFS RESEARCH MFS TOTAL INTERNATIONAL MONEY MARKET HIGH INCOME PORTFOLIO GROWTH PORTFOLIO PORTFOLIO RETURN PORTFOLIO EQUITY PORTFOLIO PORTFOLIO PORTFOLIO - ----------- ---------------- -------------- ---------------- ---------------- ------------- ------------- $ 2,742 $ -- $ 29,575 $ -- $ -- $ 78,000 $ -- - ------------ ------------ ------------ ------------ ------------ ------------ ------------ 15,877 13,090 51,679 31,934 22,123 20,747 19,155 1,905 1,571 6,202 3,832 2,655 2,490 2,299 - ------------ ------------ ------------ ------------ ------------ ------------ ------------ (15,040) (14,661) (28,306) (35,766) (24,778) 54,763 (21,454) - ------------ ------------ ------------ ------------ ------------ ------------ ------------ 269,391 9,266 422,890 97,491 10,785 2,429,201 244,818 275,645 10,624 447,926 98,157 12,696 2,429,201 262,377 - ------------ ------------ ------------ ------------ ------------ ------------ ------------ (6,254) (1,358) (25,036) (666) (1,911) -- (17,559) - ------------ ------------ ------------ ------------ ------------ ------------ ------------ 150,593 690,082 2,042,867 593,537 434,908 -- 80,325 - ------------ ------------ ------------ ------------ ------------ ------------ ------------ 129,299 674,063 1,989,525 557,105 408,219 54,763 41,312 - ------------ ------------ ------------ ------------ ------------ ------------ ------------ 7,016,846 4,631,285 17,529,605 11,116,443 7,277,934 12,412,686 6,878,007 190,316 67,557 387,204 445,918 71,577 502,963 431,937 (20) (67) (262) (140) (108) (27) (79) (48,279) (34,788) (91,883) (75,519) (55,089) (72,422) (60,485) (419,983) (15,844) (705,625) (7,427) (18,597) (3,377,596) (346,800) - ------------ ------------ ------------ ------------ ------------ ------------ ------------ 6,738,880 4,648,143 17,119,039 11,479,275 7,275,717 9,465,604 6,902,580 - ------------ ------------ ------------ ------------ ------------ ------------ ------------ 6,868,179 5,322,206 19,108,564 12,036,380 7,683,936 9,520,367 6,943,892 -- -- -- -- -- -- -- - ------------ ------------ ------------ ------------ ------------ ------------ ------------ $ 6,868,179 $ 5,322,206 $ 19,108,564 $ 12,036,380 $ 7,683,936 $ 9,520,367 $ 6,943,892 ============ ============ ============ ============ ============ ============ ============ SMITH BARNEY LARGE CAP VALUE PORTFOLIO --------------- $ -- ------------ 54,473 6,537 ------------ (61,010) ------------ 21,927 40,549 ------------ (18,622) ------------ 1,408,112 ------------ 1,328,480 ------------ 19,308,425 581,561 (221) (193,562) (20,030) ------------ 19,676,173 ------------ 21,004,653 -- ------------ $ 21,004,653 ============
-9- 11 NOTES TO FINANCIAL STATEMENTS - CONTINUED 6. SCHEDULE OF SEPARATE ACCOUNT PF II OPERATIONS AND CHANGES IN NET ASSETS FOR THE PERIOD JUNE 24, 1998 (DATE OPERATIONS COMMENCED) TO DECEMBER 31, 1998 (CONTINUED)
COMBINED --------------- INVESTMENT INCOME: Dividends ............................................ $ 190,250 ------------- EXPENSES: Insurance charges .................................... 589,511 Administrative fees .................................. 69,316 ------------- Net investment income (loss) .................... (468,577) ------------- REALIZED GAIN (LOSS) AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Realized gain (loss) from investment transactions: Proceeds from investments sold ..................... 3,768,072 Cost of investments sold ........................... 3,868,691 ------------- Net realized gain (loss) ........................ (100,619) ------------- Unrealized gain (loss) on investments: End of period ...................................... 15,724,697 ------------- Net increase (decrease) in net assets resulting from operations ....................... 15,155,501 ------------- UNIT TRANSACTIONS: Participant purchase payments ........................ 215,425,708 Participant transfers from other Travelers accounts .. 5,227,125 Administrative charges ............................... (2,136) Contract surrenders .................................. (1,980,525) Participant transfers to other Travelers accounts .... (5,193,439) ------------- Net increase (decrease) in net assets resulting from unit transactions ................ 213,476,733 ------------- Net increase (decrease) in net assets ........... 228,632,234 NET ASSETS: Beginning of period ................................ - ------------- End of period ...................................... $ 228,632,234 =============
-10- 12 NOTES TO FINANCIAL STATEMENTS - CONTINUED 7. SCHEDULE OF ACCUMULATION UNITS FOR SEPARATE ACCOUNT PF II FOR THE PERIOD JUNE 24, 1998 (DATE OPERATIONS COMMENCED) TO DECEMBER 31, 1998
SELECT SELECT HIGH APPRECIATION SELECT BALANCED CONSERVATIVE SELECT GROWTH GROWTH PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO ------------ --------------- ------------ ------------- ------------ Accumulation units beginning of period ...... -- -- -- -- -- Accumulation units purchased and transferred from other Travelers accounts .. 36,447,286 38,330,624 14,365,616 30,831,002 19,291,390 Accumulation units redeemed and transferred to other Travelers accounts .... (338,376) (365,632) (111,037) (355,155) (572,686) ----------- ----------- ----------- ----------- ----------- Accumulation units end of period ............ 36,108,910 37,964,992 14,254,579 30,475,847 18,718,704 =========== =========== =========== =========== ===========
SELECT INCOME PORTFOLIO ------------- Accumulation units beginning of period ...... -- Accumulation units purchased and transferred from other Travelers accounts .. 7,311,353 Accumulation units redeemed and transferred to other Travelers accounts .... (476,318) ----------- Accumulation units end of period ............ 6,835,035 =========== SMITH BARNEY SMITH BARNEY MFS MID CAP MFS RESEARCH MFS TOTAL INTERNATIONAL MONEY MARKET GROWTH PORTFOLIO PORTFOLIO RETURN PORTFOLIO EQUITY PORTFOLIO PORTFOLIO ---------------- ------------- --------------- ---------------- ------------- Accumulation units beginning of period ...... -- -- -- -- -- Accumulation units purchased and transferred from other Travelers accounts .. 5,335,470 19,814,742 11,988,394 8,731,506 12,772,783 Accumulation units redeemed and transferred to other Travelers accounts .... (55,425) (882,414) (87,135) (88,536) (3,406,942) ----------- ----------- ----------- ----------- ----------- Accumulation units end of period ............ 5,280,045 18,932,328 11,901,259 8,642,970 9,365,841 =========== =========== =========== =========== =========== SMITH BARNEY HIGH INCOME PORTFOLIO ------------- Accumulation units beginning of period ...... -- Accumulation units purchased and transferred from other Travelers accounts .. 7,686,754 Accumulation units redeemed and transferred to other Travelers accounts .... (436,142) ----------- Accumulation units end of period ............ 7,250,612 ===========
SMITH BARNEY LARGE CAP VALUE PORTFOLIO COMBINED --------------- ------------ Accumulation units beginning of period ...... -- -- Accumulation units purchased and transferred from other Travelers accounts .. 21,848,329 234,755,249 Accumulation units redeemed and transferred to other Travelers accounts .... (235,151) (7,410,949) ----------- ----------- Accumulation units end of period ............ 21,613,178 227,344,300 =========== ===========
-11- 13 INDEPENDENT AUDITORS' REPORT To the Owners of Variable Annuity Contracts of The Travelers Separate Account PF II for Variable Annuities: We have audited the accompanying statement of assets and liabilities of The Travelers Separate Account PF II for Variable Annuities as of December 31, 1998, and the related statement of operations and changes in net assets for the period June 24, 1998 (date operations commenced) to December 31, 1998. These financial statements are the responsibility of management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of shares owned as of December 31, 1998, by correspondence with the underlying funds. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of The Travelers Separate Account PF II for Variable Annuities as of December 31, 1998, the results of its operations and the changes in its net assets for the period June 24, 1998 (date operations commenced) to December 31, 1998, in conformity with generally accepted accounting principles. KPMG LLP Hartford, Connecticut February 17, 1999 14 INDEPENDENT AUDITORS KPMG LLP Hartford, Connecticut This report is prepared for the general information of contract owners and is not an offer of shares of The Travelers Separate Account PF II for Variable Annuities or Separate Account PF II's underlying funds. It should not be used in connection with any offer except in conjunction with the Prospectus for The Travelers Separate Account PF II for Variable Annuities product(s) offered by The Travelers Life and Annuity Company and the Prospectuses of the underlying funds, which collectively contain all pertinent information, including the applicable sales commissions. SepPF II (Annual) (12-98) Printed in U.S.A. -----END PRIVACY-ENHANCED MESSAGE-----