-----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, Gua5UTWdbIJEH5mZ7OJlVO8eL2Kpg1uZ65d/x90IwNPGd0HdThhe3Pd0U1TrbCrT h3Vu9+hDsQnZ+patcauz0g== 0000930413-05-008120.txt : 20051207 0000930413-05-008120.hdr.sgml : 20051207 20051207151240 ACCESSION NUMBER: 0000930413-05-008120 CONFORMED SUBMISSION TYPE: 485BPOS PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20051207 DATE AS OF CHANGE: 20051207 EFFECTIVENESS DATE: 20051230 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TRAVELERS SEPARATE ACCOUNT SIX FOR VARIABLE ANNUITIES CENTRAL INDEX KEY: 0001065240 IRS NUMBER: 000000000 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 485BPOS SEC ACT: 1933 Act SEC FILE NUMBER: 333-58809 FILM NUMBER: 051249464 BUSINESS ADDRESS: STREET 1: FINANCIAL SERVICES LEGAL DIVISION STREET 2: ONE TOWER SQUARE CITY: HARTFORD STATE: CT ZIP: 06183 BUSINESS PHONE: 860-277-0111 MAIL ADDRESS: STREET 1: FINANCIAL SERVICES LEGAL DIVISION STREET 2: ONE TOWER SQUARE CITY: HARTFORD STATE: CT ZIP: 06183 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TRAVELERS SEPARATE ACCOUNT SIX FOR VARIABLE ANNUITIES CENTRAL INDEX KEY: 0001065240 IRS NUMBER: 000000000 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 485BPOS SEC ACT: 1940 Act SEC FILE NUMBER: 811-08869 FILM NUMBER: 051249465 BUSINESS ADDRESS: STREET 1: FINANCIAL SERVICES LEGAL DIVISION STREET 2: ONE TOWER SQUARE CITY: HARTFORD STATE: CT ZIP: 06183 BUSINESS PHONE: 860-277-0111 MAIL ADDRESS: STREET 1: FINANCIAL SERVICES LEGAL DIVISION STREET 2: ONE TOWER SQUARE CITY: HARTFORD STATE: CT ZIP: 06183 485BPOS 1 c39986_485bpos.txt REGISTRATION STATEMENT NO. 333-58809 811-08869 ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------ FORM N-4 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 POST-EFFECTIVE AMENDMENT NO. 10 AND REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 AMENDMENT NO. 10 ----------- THE TRAVELERS SEPARATE ACCOUNT SIX FOR VARIABLE ANNUITIES (Exact name of Registrant) THE TRAVELERS LIFE AND ANNUITY COMPANY (Name of Depositor) ---------- One Cityplace, Hartford, Connecticut 06103 (Address of Depositor's Principal Executive Offices) Depositor's Telephone Number, including area code: (860) 308-1000 MARIE C. SWIFT Metropolitan Life Insurance Company 501 Boylston Street, Boston, MA 02116 (Name and Address of Agent for Service) ---------- Approximate Date of Proposed Public Offering: It is proposed that this filing will become effective (check appropriate box): [ ] immediately upon filing pursuant to paragraph (b) of Rule 485. [X] on December 30, 2005 pursuant to paragraph (b) of Rule 485. [ ] __ days after filing pursuant to paragraph (a)(1) of Rule 485. [ ] on ___________ pursuant to paragraph (a)(1) of Rule 485. If appropriate, check the following box: [N/A] this post-effective amendment designates a new effective date for a previously filed post-effective amendment. FILING NOTE The purpose of this Post-Effective Amendment is to file the attached Supplement Dated December 30, 2005. This Post-Effective Amendment does not supercede any previously filed post-effective amendment. The following documents are incorporated herein by reference: Supplement Dated July 15, 2005 to Variable Contract Prospectuses List Below (Travelers Retirement Account Annuity), filed with the Securities and Exchange Commission on July 15, 2005 pursuant to Rule 497(e) under the Securities Act of 1933 in connection with Registration Statement No. 333-58809. Supplement Dated September 1, 2005 to the Travelers Retirement Account Annuity Prospectus Dated May 2, 2005, filed with the Securities and Exchange Commission on September 1, 2005 pursuant to Rule 497(e) under the Securities Act of 1933 in connection with Registration Statement No. 333-58809. PART A SUPPLEMENT SUPPLEMENT DATED DECEMBER 30, 2005 TO THE PROSPECTUS DATED MAY 2, 2005 GOLD TRACK SELECT TRAVELERS RETIREMENT ACCOUNT ANNUITY UNIVERSAL SELECT ANNUITY UNIVERSAL ANNUITY ADVANTAGE The following information supplements, and to the extent inconsistent therewith, replaces the information in the prospectus. Please retain this supplement and keep it with the prospectus for future reference. Effective January 3, 2006, the Variable Funding Options shown below are added to the list of Variable Funding Options shown on the first page of the prospectus. If you purchased your Contract through a tax-qualified group retirement plan ("Plan"), these additional Variable Funding Options are available only if approved by your Plan. METROPOLITAN SERIES FUND, INC. MetLife Conservative Allocation Portfolio--Class B MetLife Conservative to Moderate Allocation Portfolio--Class B MetLife Moderate Allocation Portfolio--Class B MetLife Moderate to Aggressive Allocation Portfolio--Class B MetLife Aggressive Allocation Portfolio--Class B Some Variable Funding Options may not be available in all states. In the "Fee Table" section, after the table of Underlying Fund Fees and Expenses, the following information is added:
NET TOTAL ANNUAL OPERATING CONTRACTUAL EXPENSES DISTRIBUTION FEE WAIVER INCLUDING AND/OR AND/OR NET TOTAL ESTIMATED SERVICE TOTAL ANNUAL REIMBURSEMENT ANNUAL EXPENSES OF MANAGEMENT (12b-1) OTHER OPERATING EXPENSE OPERATING UNDERLYING UNDERLYING FUND FEE FEES EXPENSES EXPENSES REIMBURSEMENT EXPENSES PORTFOLIOS - --------------- ---------- ------------ -------- ------------ ------------- --------- ----------- METROPOLITAN SERIES FUND, INC. MetLife Conservative Allocation Portfolio --Class B (1) 0.10% 0.25% 0.25% 0.60% 0.25% 0.35% 1.00% MetLife Conservative to Moderate Allocation Portfolio --Class B (1) 0.10% 0.25% 0.08% 0.43% 0.08% 0.35% 1.02% MetLife Moderate Allocation Portfolio --Class B (1) 0.10% 0.25% 0.05% 0.40% 0.05% 0.35% 1.04% MetLife Moderate to Aggressive Allocation Portfolio--Class B (1) 0.10% 0.25% 0.06% 0.41% 0.06% 0.35% 1.07% MetLife Aggressive Allocation Portfolio --Class B (1) 0.10% 0.25% 0.19% 0.54% 0.19% 0.35% 1.09%
NOTES (1) Pursuant to an expense agreement, MetLife Advisers, LLC ("MetLife Advisers") has agreed to waive its investment management fee or pay operating expenses (exclusive of brokerage costs, interest, taxes and extraordinary expenses, underlying portfolio investment management fees and expenses) as necessary to limit the total of such expenses to the annual percentage of average daily net assets of the following portfolios as indicated:
Percentage --------------------------------------------------------------------------------------------- MetLife Conservative Allocation Portfolio--Class B 0.35% --------------------------------------------------------------------------------------------- MetLife Conservative to Moderate Allocation Portfolio--Class B 0.35% --------------------------------------------------------------------------------------------- MetLife Moderate Allocation Portfolio--Class B 0.35% --------------------------------------------------------------------------------------------- MetLife Moderate to Aggressive Allocation Portfolio--Class B 0.35% --------------------------------------------------------------------------------------------- MetLife Aggressive Allocation Portfolio--Class B 0.35% ---------------------------------------------------------------------------------------------
1 This waiver or agreement to pay is subject to the obligation of each class of the Portfolio separately to repay MetLife Advisers such expenses in future years, if any, when the Portfolio's class's expenses fall below the above percentages if certain conditions are met. The agreement may be terminated at any time after April 30, 2006. The effect of such waiver and reimbursement is that performance results are increased. These portfolios are "fund of funds" portfolios that invest substantially all of their assets in other portfolios of the Metropolitan Series Fund, Inc. or the Met Investors Series Trust. Because these portfolios invest in other underlying portfolios, each of these portfolios also will bear its pro rata portion of the operating expenses of the underlying portfolios in which it invests, including the investment management fee. This will reduce the investment return of each of the asset allocation portfolios. The expense levels will vary over time, depending on the mix of underlying portfolios in which the asset allocation portfolio invests. These portfolios began operations on May 1, 2005. The expense information in the fee table is an estimate of the portfolios' expenses through December 31, 2005. The total expenses after waiver/reimbursement for the underlying portfolios includes the estimated expenses of the underlying portfolios (after applicable fee waivers and expense reimbursements) as of May 1, 2005. The estimated expenses of the underlying portfolios (AFTER applicable expense limitations) are: 0.65% for the MetLife Conservative Allocation Portfolio; 0.67% for the MetLife Conservative to Moderate Allocation Portfolio; 0.69% for the MetLife Moderate Allocation Portfolio; 0.72% for the MetLife Moderate to Aggressive Allocation Portfolio; and 0.74% for the MetLife Aggressive Allocation Portfolio. The estimated total annual operating expenses of the portfolios (BEFORE applicable fee waivers and expense reimbursements), including the weighted average of the total operating expenses of the underlying portfolios (BEFORE applicable fee waivers and reimbursements) as of May 1, 2005 are: 1.25% for the MetLife Conservative Allocation Portfolio, 1.10% for the MetLife Conservative to Moderate Allocation Portfolio; 1.10% for the MetLife Moderate Allocation Portfolio, 1.13% for the MetLife Moderate to Aggressive Allocation Portfolio, and 1.29% for the MetLife Aggressive Allocation Portfolio. Contract owners may be able to realize lower aggregate expenses by investing directly in the underlying portfolios instead of investing in the portfolios. A contract owner who chooses to invest directly in the underlying portfolios would not, however, receive the asset allocation services provided by MetLife Advisers. For more information regarding the asset allocation portfolios, please read the prospectus for these portfolios. In the section entitled "The Variable Funding Options," the following information is added to the table that lists the Variable Funding Options, along with their investment advisers and any subadviser:
FUNDING INVESTMENT INVESTMENT OPTION OBJECTIVE ADVISER/SUBADVISER - ------------------------------------ ------------------------------------- ---------------------------------- MetLife Conservative Allocation Seeks a high level of current MetLife Advisers, LLC Portfolio--Class B income, with growth of capital as a secondary objective. - ------------------------------------ ------------------------------------- ---------------------------------- MetLife Conservative to Moderate Seeks a high total return in the MetLife Advisers, LLC Allocation Portfolio--Class B form of income and growth of capital, with a greater emphasis on income. - ------------------------------------ ------------------------------------- ---------------------------------- MetLife Moderate Allocation Seeks a balance between a high MetLife Advisers, LLC Portfolio--Class B level of current income and growth of capital, with a greater emphasis on growth of capital. - ------------------------------------ ------------------------------------- ---------------------------------- MetLife Moderate to Aggressive Seeks growth of capital. MetLife Advisers, LLC Allocation Portfolio--Class B - ------------------------------------ ------------------------------------- ---------------------------------- MetLife Aggressive Allocation Seeks growth of capital. MetLife Advisers, LLC Portfolio--Class B - ------------------------------------ ------------------------------------- ----------------------------------
In the prospectuses for Gold Track Select, Travelers Retirement Account Annuity, and Universal Select Annuity, in the section entitled "Asset Allocation Programs" in the subsection entitled "CHART Asset Allocation Program", the following sentence is added as the first paragraph of the subsection: Effective February 1, 2006, the CHART Asset Allocation Program is closed to new participants. If you enrolled in the program prior to February 1, 2006, you may continue to make additional Purchase Payments into the program. If you cancel your enrollment in the program, you may not re-enroll. L-24562 December, 2005 2 PART B INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION TRAVELERS RETIREMENT ACCOUNT STATEMENT OF ADDITIONAL INFORMATION DATED DECEMBER 30, 2005 FOR THE TRAVELERS SEPARATE ACCOUNT SIX FOR VARIABLE ANNUITIES ISSUED BY THE TRAVELERS LIFE AND ANNUITY COMPANY This Statement of Additional Information ("SAI") is not a prospectus but relates to, and should be read in conjunction with, the Individual Variable Annuity Contract Prospectus dated May 2, 2005. A copy of the Prospectus may be obtained by writing to The Travelers Life and Annuity Company, Annuity Investor Services, One Cityplace, Hartford, Connecticut 06103-3415, or by calling (800) 842-8573 or by accessing the Securities and Exchange Commission's website at http://www.sec.gov. TABLE OF CONTENTS THE INSURANCE COMPANY .................................................... 2 PRINCIPAL UNDERWRITER .................................................... 2 DISTRIBUTION AND PRINCIPAL UNDERWRITING AGREEMENT ........................ 2 VALUATION OF ASSETS ...................................................... 2 FEDERAL TAX CONSIDERATIONS ............................................... 3 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ............................ 7 CONDENSED FINANCIAL INFORMATION .......................................... 8 FINANCIAL STATEMENTS ..................................................... F-1 THE INSURANCE COMPANY The Travelers Life and Annuity Company (the "Company") is a stock insurance company chartered in 1973 in Connecticut and continuously engaged in the insurance business since that time. The Company is licensed to conduct a life insurance business in all states (except New York) and the District of Columbia and Puerto Rico. The Company's Home Office is located at One Cityplace Hartford, Connecticut 06103-3415 and its telephone number is (860) 308-1000. The Company is an indirect wholly-owned subsidiary of MetLife, Inc., a publicly traded company. MetLife, Inc., through its subsidiaries and affiliates, is a leading provider of insurance and other financial services to individual and institutional customers. STATE REGULATION. The Company is subject to the laws of the state of Connecticut governing insurance companies and to regulation by the Insurance Commissioner of the state of Connecticut (the "Commissioner"). An annual statement covering the operations of the Company for the preceding year, as well as its financial conditions as of December 31 of such year, must be filed with the Commissioner in a prescribed format on or before March 1 of each year. The Company's books and assets are subject to review or examination by the Commissioner or his agents at all times, and a full examination of its operations is conducted at least once every four years. The Company is also subject to the insurance laws and regulations of all other states in which it is licensed to operate. However, the insurance departments of each of these states generally apply the laws of the home state (jurisdiction of domicile) in determining the field of permissible investments. THE SEPARATE ACCOUNT. The Travelers Separate Account Six for Variable Annuities (the "Separate Account") meets the definition of a separate account under the federal securities laws, and will comply with the provisions of the 1940 Act. Additionally, the operations of the Separate Account are subject to the provisions of Section 38a-433 of the Connecticut General Statutes, which authorizes the Commissioner to adopt regulations under it. Section 38a-433 contains no restrictions on the investments of the Separate Account, and the Commissioner has adopted no regulations under the Section that affect the Separate Account. The Company holds title to the assets of the Separate Account. The assets are kept physically segregated and are held separate and apart from the Company's general corporate assets. Records are maintained of all purchases and redemptions of the Underlying Funds held in each of the Variable Funding Options. PRINCIPAL UNDERWRITER Travelers Distribution LLC ("TDLLC") serves as principal underwriter for the Separate Account and the Contracts. The offering is continuous. TDLLC's principal executive offices are located at One Cityplace, Hartford, Connecticut. TDLLC is affiliated with the Company and the Separate Account. DISTRIBUTION AND PRINCIPAL UNDERWRITING AGREEMENT Under the terms of the Distribution and Principal Underwriting Agreement among the Separate Account, TDLLC and the Company, TDLLC acts as agent for the distribution of the Contracts and as principal underwriter for the Contracts. The Company reimburses TDLLC for certain sales and overhead expenses connected with sales functions. The following table shows the amount of commissions paid to and the amount of commissions retained by TDLLC over the past three years. TDLLC UNDERWRITING COMMISSIONS ------------------------------
- ---------------------------- ---------------------------------------- ---------------------------------------- UNDERWRITING COMMISSIONS PAID TO TDLLC AMOUNT OF UNDERWRITING COMMISSIONS YEAR BY THE COMPANY RETAINED BY TDLLC - ---------------------------- ---------------------------------------- ---------------------------------------- 2004 $125,706 $0 - ---------------------------- ---------------------------------------- ---------------------------------------- 2003 $121,903 $0 - ---------------------------- ---------------------------------------- ---------------------------------------- 2002 $103,960 $0 - ---------------------------- ---------------------------------------- ----------------------------------------
2 VALUATION OF ASSETS FUNDING OPTIONS: The value of the assets of each Funding Option is determined at 4:00 p.m. eastern time on each business day, unless we need to close earlier due to an emergency. A business day is any day the New York Stock Exchange is open. It is expected that the Exchange will be closed on Saturdays and Sundays and on the observed holidays of New Year's Day, Martin Luther King, Jr. Day, President's Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day. Each security traded on a national securities exchange is valued at the last reported sale price on the business day. If there has been no sale on that day, then the value of the security is taken to be the mean between the reported bid and asked prices on the business day or on the basis of quotations received from a reputable broker or any other recognized source. Any security not traded on a securities exchange but traded in the over-the-counter-market and for which market quotations are readily available is valued at the mean between the quoted bid and asked prices on the business day or on the basis of quotations received from a reputable broker or any other recognized source. Securities traded on the over-the-counter-market and listed securities with no reported sales are valued at the mean between the last reported bid and asked prices or on the basis of quotations received from a reputable broker or other recognized source. Short-term investments for which a quoted market price is available are valued at market. Short-term investments maturing in more than sixty days for which there is no reliable quoted market price are valued by "marking to market" (computing a market value based upon quotations from dealers or issuers for securities of a similar type, quality and maturity.) "Marking to market" takes into account unrealized appreciation or depreciation due to changes in interest rates or other factors which would influence the current fair values of such securities. Short-term investments maturing in sixty days or less for which there is no reliable quoted market price are valued at amortized cost which approximates market. THE CONTRACT VALUE: The value of an Accumulation Unit on any business day is determined by multiplying the value on the preceding business day by the net investment factor for the valuation period just ended. The net investment factor is used to measure the investment performance of a Funding Option from one valuation period to the next. The net investment factor for a Funding Option for any valuation period is equal to the sum of 1.000000 plus the net investment rate (the gross investment rate less any applicable Funding Option deductions during the valuation period relating to the mortality and expense risk charge and the administrative expense charge). The gross investment rate of a Funding Option is equal to (a) minus (b), divided by (c) where: (a) = investment income plus capital gains and losses (whether realized or unrealized); (b) = any deduction for applicable taxes (presently zero); and (c) = the value of the assets of the funding option at the beginning of the valuation period. The gross investment rate may be either positive or negative. A Funding Option's investment income includes any distribution whose ex-dividend date occurs during the valuation period. ACCUMULATION UNIT VALUE. The value of the Accumulation Unit for each Funding Option was initially established at $1.00. The value of an Accumulation Unit on any business day is determined by multiplying the value on the preceding business day by the net investment factor for the valuation period just ended. The net investment factor is calculated for each Funding Option and takes into account the investment performance, expenses and the deduction of certain expenses. ANNUITY UNIT VALUE. The initial Annuity Unit value applicable to each Funding Option was established at $1.00. An Annuity Unit value as of any business day is equal to (a) the value of the Annuity Unit on the preceding business day, multiplied by (b) the corresponding net investment factor for the business day just ended, divided by (c) the assumed net investment factor for the valuation period. (For example, the assumed net investment factor based on an annual assumed net investment rate of 3.0% for a valuation period of one day is 1.000081 and, for a period of two days, is 1.000081 x 1.000081.) FEDERAL TAX CONSIDERATIONS The following description of the federal income tax consequences under this Contract is general in nature and is therefore not exhaustive and is not intended to cover all situations. Because of the complexity of the law and the fact that the tax results will vary according to the factual status of the individual involved, a person 3 contemplating purchase of an annuity contract and by a Contract Owner or beneficiary who may make elections under a Contract should consult with a qualified tax or legal adviser. MANDATORY DISTRIBUTIONS FOR QUALIFIED PLANS Federal tax law requires that minimum annual distributions begin by April 1st of the calendar year following the later of calendar year in which a participant under a qualified plan or a Section 403(b) annuity attains age 70 1/2 or retires. Minimum annual distributions under an IRA must begin by April 1st of the calendar year in which the Contract Owner attains 70 1/2 regardless of when he or she retires. Distributions must also begin or be continued according to the minimum distribution rules under the Code following the death of the Contract Owner or the annuitant. You should note that the U.S. Treasury recently issued regulations clarifying the operation of the required minimum distribution rules. NONQUALIFIED ANNUITY CONTRACTS Individuals may purchase tax-deferred annuities without any limits. The purchase payments receive no tax benefit, deduction or deferral, but taxes on the increases in the value of the contract are generally deferred until distribution and transfers between the various investment options are not subject to tax. Generally, if an annuity contract is owned by other than an individual (or an entity such as a trust or other "look-through" entity which owns for an individual's benefit), the owner will be taxed each year on the increase in the value of the contract. An exception applies for purchase payments made before March 1, 1986. The benefits of tax deferral of income earned under a non-qualified annuity should be compared with the relative federal tax rates on income from other types of investments (dividends and capital gains, taxable at 15% or less) relative to the ordinary income treatment received on annuity income and interest received on fixed instruments (notes, bonds, etc.). If two or more annuity contracts are purchased from the same insurer within the same calendar year, such annuity contract will be aggregated for federal income tax purposes. As a result, distributions from any of them will be taxed based upon the amount of income in all of the same calendar year series of annuities. This will generally have the effect of causing taxes to be paid sooner on the deferred gain in the contracts. Those receiving partial distributions made before the maturity date will generally be taxed on an income-first basis to the extent of income in the contract. If you are exchanging another annuity contract for this annuity, certain pre-August 14, 1982 deposits into an annuity contract that have been placed in the contract by means of a tax-deferred exchange under Section 1035 of the Code may be withdrawn first without income tax liability. This information on deposits must be provided to the Company by the other insurance company at the time of the exchange. There is income in the contract generally to the extent the cash value exceeds the investment in the contract. The investment in the contract is equal to the amount of premiums paid less any amount received previously which was excludable from gross income. Any direct or indirect borrowing against the value of the contract or pledging of the contract as security for a loan will be treated as a cash distribution under the tax law. In order to be treated as an annuity contract for federal income tax purposes, Section 72(s) of the Code requires any non-qualified contract to contain certain provisions specifying how your interest in the contract will be distributed in the event of the death of an owner of the contract. Specifically, Section 72(s) requires that (a) if an owner dies on or after the annuity starting date, but prior to the time the entire interest in the contract has been distributed, the entire interest in the contract will be distributed at least as rapidly as under the method of distribution being used as of the date of such owner's death; and (b) if any owner dies prior to the annuity starting date, the entire interest in the contract will be distributed within five years after the date of such owner's death. These requirements will be considered satisfied as to any portion of an owner's interest which is payable to or for the benefit of a designated beneficiary and which is distributed over the life of such designated beneficiary or over a period not extending beyond the life expectancy of that beneficiary, provided that such distributions begin within one year of the owner's death. The designated beneficiary refers to a natural person designated by the owner as a beneficiary and to whom ownership of the contract passes by reason of death. However, if the designated beneficiary is the surviving spouse of the deceased owner, the contract may be continued with the surviving spouse as the successor-owner. Contracts will be administered by the Company in accordance with these rules and the Company will make a notification when payments should be commenced. Special rules apply regarding distribution requirements when an annuity is owned by a trust or other entity for the benefit of one or more individuals. 4 INDIVIDUAL RETIREMENT ANNUITIES To the extent of earned income for the year and not exceeding the applicable limit for the taxable year, an individual may make deductible contributions to an individual retirement annuity (IRA). The applicable limit ($2,000 per year prior to 2002) has been increased by the Economic Growth and Tax Relief Reconciliation Act of 2001 ("EGTRRA"). The limit is $3,000 for calendar years 2002 - 2004, $4,000 for calendar years 2005-2007, and $5,000 for 2008, and will be indexed for inflation in years subsequent to 2008. Additional "catch-up" contributions may be made to an IRA by individuals age 50 or over. There are certain limits on the deductible amount based on the adjusted gross income of the individual and spouse and based on their participation in a retirement plan. If an individual is married and the spouse does not have earned income, the individual may establish IRAs for the individual and spouse. Purchase payments may then be made annually into IRAs for both spouses in the maximum amount of 100% of earned income up to a combined limit based on the individual limits outlined above. The Code provides for the purchase of a Simplified Employee Pension (SEP) plan. A SEP is funded through an IRA with an annual employer contribution limit of up to $40,000 for each participant. The Internal Revenue Services has not reviewed the contract for qualifications as an IRA, and has not addressed in a ruling of general applicability whether a death benefit provision such as the optional enhanced death benefit in the contract comports with IRA qualification requirements. SIMPLE PLAN IRA FORM Effective January 1, 1997, employers may establish a savings incentive match plan for employees ("SIMPLE plan") under which employees can make elective salary reduction contributions to an IRA based on a percentage of compensation of up to the applicable limit for the taxable year. The applicable limit was increased under EGTRRA. The applicable limit was increased under EGTRRA to $7,000 for 2002, $8,000 for 2003, $9,000 in 2004, $10,000 in 2005 (which will be indexed for inflation for years after 2005. (Alternatively, the employer can establish a SIMPLE cash or deferred arrangement under IRS Section 401(k)). Under a SIMPLE plan IRA, the employer must either make a matching contribution or a nonelective contribution based on the prescribed formulas for all eligible employees. Early withdrawals are subject to the 10% early withdrawal penalty generally applicable to IRAs, except that an early withdrawal by an employee under a SIMPLE plan IRA, within the first two years of participation, shall be subject to a 25% early withdrawal tax. ROTH IRAs Effective January 1, 1998, Section 408A of the Code permits certain individuals to contribute to a Roth IRA. Eligibility to make contributions is based upon income, and the applicable limits vary based on marital status and/or whether the contribution is a rollover contribution from another IRA or an annual contribution. Contributions to a Roth IRA, which are subject to certain limitations (similar to the annual limits for the traditional IRA's), are not deductible and must be made in cash or as a rollover or transfer from another Roth IRA or other IRA. A conversion of a "traditional" IRA to a Roth IRA may be subject to tax and other special rules apply. You should consult a tax adviser before combining any converted amounts with other Roth IRA contributions, including any other conversion amounts from other tax years. Qualified distributions from a Roth IRA are tax-free. A qualified distribution requires that the Roth IRA has been held for at least 5 years, and the distribution is made after age 59 1/2, on death or disability of the owner, or for a limited amount ($10,000) for a qualified first time home purchase for the owner or certain relatives. Income tax and a 10% penalty tax may apply to distributions made (1) before age 59 1/2 (subject to certain exceptions) or (2) during five taxable years starting with the year in which the first contribution is made to any Roth IRA of the individual. QUALIFIED PENSION AND PROFIT-SHARING PLANS Like most other contributions made under a qualified pension or profit-sharing plan, purchase payments made by an employer are not currently taxable to the participant and increases in the value of a contract are not subject to taxation until received by a participant or beneficiary. Distributions are generally taxable to the participant or beneficiary as ordinary income in the year of receipt. Any distribution that is considered the participant's "investment in the contract" is treated as a return of capital and is not taxable. Under a qualified plan, the investment in the contract may be zero. The annual limits that apply to the amounts that may be contributed to a defined contribution plan each year were increased by EGTRRA. The maximum total annual limit was increased from $35,000 to $40,000 ($42,000 5 for 2005). The limit on employee salary reduction deferrals (commonly referred to as "401(k) contributions") increase on a graduated basis; $11,000 in 2002, $12,000 in 2003, $13,000 in 2004, $14,000 in 2005 and $15,000 in 2006. The $15,000 annual limit will be indexed for inflation after 2006. Additional "catch-up contributions" may be made by individuals age 50 or over. Amounts attributable to salary reduction contributions under Code Section 401(k) and income thereon may not be withdrawn prior to severance from employment, death, total and permanent disability, attainment of age 59 1/2, or in the case of hardship. SECTION 403(b) PLANS Under Code section 403(b), payments made by public school systems and certain tax exempt organizations to purchase annuity contracts for their employees are excludable from the gross income of the employee, subject to certain limitations. However, these payments may be subject to FICA (Social Security) taxes. A qualified contract issued as a tax-sheltered annuity under section 403(b) will be amended as necessary to conform to the requirements of the Code. The annual limits under Code Section 403(b) for employee salary reduction deferrals are increased under the same rules applicable to 401(k) plans ($14,000 in 2005). Code section 403(b)(11) restricts this distribution under Code section 403(b) annuity contracts of: (1) elective contributions made in years beginning after December 31, 1998; (2) earnings on those contributions; and (3) earnings in such years on amounts held as of the last year beginning before January 1, 1989. Distribution of those amounts may only occur upon death of the employee, attainment of age 59 1/2, separation from service, disability, or financial hardship. In addition, income attributable to elective contributions may not be distributed in the case of hardship. FEDERAL INCOME TAX WITHHOLDING The portion of a distribution, which is taxable income to the recipient, will be subject to federal income tax withholding as follows: 1. ELIGIBLE ROLLOVER DISTRIBUTION FROM SECTION 403(B) PLANS OR ARRANGEMENTS, FROM QUALIFIED PENSION AND PROFIT-SHARING PLANS, OR FROM 457 PLANS SPONSORED BY GOVERNMENTAL ENTITIES There is a mandatory 20% tax withholding for plan distributions that are eligible for rollover to an IRA or to another qualified retirement plan (including a 457 plan sponsored by a governmental entity) but that are not directly rolled over. A distribution made directly to a participant or beneficiary may avoid this result if: (a) a periodic settlement distribution is elected based upon a life or life expectancy calculation, or (b) a term-for-years settlement distribution is elected for a period of ten years or more, payable at least annually, or (c) a minimum required distribution as defined under the tax law is taken after the attainment of the age of 70 1/2 or as otherwise required by law, or (d) the distribution is a hardship distribution. A distribution including a rollover that is not a direct rollover will be subject to the 20% withholding, and the 10% additional tax penalty on premature withdrawals may apply to any amount not added back in the rollover. The 20% withholding may be recovered when the participant or beneficiary files a personal income tax return for the year if a rollover was completed within 60 days of receipt of the funds, except to the extent that the participant or spousal beneficiary is otherwise underwithheld or short on estimated taxes for that year. 2. OTHER NON-PERIODIC DISTRIBUTIONS (FULL OR PARTIAL REDEMPTIONS) To the extent not subject to 20% mandatory withholding as described in 1. above, the portion of a non-periodic distribution, which constitutes taxable income, will be subject to federal income tax withholding, if the aggregate distributions exceed $200 for the year, unless the recipient elects not to have taxes withheld. If no such election is made, 10% of the taxable portion of the distribution will be withheld as federal income tax; provided that the recipient may elect any other percentage. Election forms will be provided at the time distributions are requested. This form of withholding applies to all annuity programs. 6 3. PERIODIC DISTRIBUTIONS (DISTRIBUTIONS PAYABLE OVER A PERIOD GREATER THAN ONE YEAR) The portion of a periodic distribution, which constitutes taxable income, will be subject to federal income tax withholding under the wage withholding tables as if the recipient were married claiming three exemptions. A recipient may elect not to have income taxes withheld or have income taxes withheld at a different rate by providing a completed election form. Election forms will be provided at the time distributions are requested. This form of withholding applies to all annuity programs. Recipients who elect not to have withholding made are liable for payment of federal income tax on the taxable portion of the distribution. Recipients may also be subject to penalties under the estimated tax payment rules if withholding and estimated tax payments are not sufficient to cover tax liabilities. Recipients who do not provide a social security number or other taxpayer identification number will not be permitted to elect out of withholding. Additionally, U.S citizens residing outside of the country, or U.S. legal residents temporarily residing outside the country, are subject to different withholding rules and generally cannot elect out of withholding. INDEPENDENT REGISTERED PUBIC ACCOUNTING FIRM The financial statements and schedules of The Travelers Life and Annuity Company as of December 31, 2004 and 2003, and for each of the years in the three-year period ended December 31, 2004, included herein, and the financial statements of The Travelers Separate Account Six for Variable Annuities as of December 31, 2004, and for each of the years in the two-year period ended December 31, 2004, also included herein, have been included in reliance upon the reports of KPMG LLP, independent registered public accounting firm, appearing elsewhere herein, and upon the authority of said firm as experts in accounting and auditing. The audit reports on The Travelers Life and Annuity Company refer to changes in the Company's methods of accounting and reporting for certain nontraditional long-duration contracts and for separate accounts in 2004 and for goodwill and intangible assets in 2002. 7 CONDENSED FINANCIAL INFORMATION The following tables provide the Accumulation Unit Values information for the MID-RANGE combinations of separate account charges. The Accumulation Unit Value information for the minimum separate account charge and the maximum variable account charge are contained in the Prospectus. SEPARATE ACCOUNT CHARGES 0.80% 5% AIR
UNIT VALUE AT NUMBER OF UNITS BEGINNING OF UNIT VALUE AT OUTSTANDING AT PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR - ------------------------------------------------------------- ------- ---------------- --------------- --------------------- Capital Appreciation Fund (5/00) 2004 0.503 0.597 - 2003 0.406 0.503 - 2002 0.547 0.406 - 2001 0.745 0.547 - 2000 1.000 0.745 - High Yield Bond Trust (5/99) 2004 1.418 1.530 - 2003 1.107 1.418 - 2002 1.067 1.107 - 2001 0.982 1.067 - 2000 0.980 0.982 - 1999 1.000 0.980 - Managed Assets Trust (3/99) 2004 1.111 1.206 - 2003 0.918 1.111 - 2002 1.013 0.918 - 2001 1.076 1.013 - 2000 1.102 1.076 - 1999 1.000 1.102 - Money Market Portfolio (4/99) 2004 1.125 1.127 - 2003 1.125 1.125 - 2002 1.119 1.125 - 2001 1.087 1.119 - 2000 1.032 1.087 - 1999 1.000 1.032 - AIM Variable Insurance Funds, Inc. AIM V.I. Premier Equity Fund - Series I (7/01) 2004 0.763 0.800 - 2003 0.615 0.763 - 2002 0.888 0.615 - 2001 1.000 0.888 - American Funds Insurance Series Global Growth Fund - Class 2 Shares (5/04) 2004 1.010 1.109 -
8 CONDENSED FINANCIAL INFORMATION SEPARATE ACCOUNT CHARGES 0.80% 5% AIR (CONTINUED)
UNIT VALUE AT NUMBER OF UNITS BEGINNING OF UNIT VALUE AT OUTSTANDING AT PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR - ------------------------------------------------------------- ------- ---------------- --------------- --------------------- Growth Fund - Class 2 Shares (5/04) 2004 0.970 1.091 - Growth-Income Fund - Class 2 Shares (5/04) 2004 0.979 1.082 - CitiStreet Funds, Inc. CitiStreet Diversified Bond Fund - Class I (3/99) 2004 1.310 1.360 - 2003 1.251 1.310 - 2002 1.157 1.251 - 2001 1.092 1.157 - 2000 0.979 1.092 - 1999 1.000 0.979 - CitiStreet International Stock Fund - Class I (3/99) 2004 0.899 1.024 - 2003 0.697 0.899 - 2002 0.904 0.697 - 2001 1.160 0.904 - 2000 1.272 1.160 - 1999 1.000 1.272 - CitiStreet Large Company Stock Fund - Class I (3/99) 2004 0.683 0.746 - 2003 0.537 0.683 - 2002 0.702 0.537 - 2001 0.840 0.702 - 2000 0.995 0.840 - 1999 1.000 0.995 - CitiStreet Small Company Stock Fund - Class I (3/99) 2004 1.732 1.974 - 2003 1.220 1.732 - 2002 1.612 1.220 - 2001 1.600 1.612 - 2000 1.465 1.600 - 1999 1.000 1.465 - Credit Suisse Trust Credit Suisse Trust Emerging Markets Portfolio (5/99) 2004 1.140 1.412 - 2003 0.804 1.140 - 2002 0.916 0.804 - 2001 1.022 0.916 -
9 CONDENSED FINANCIAL INFORMATION SEPARATE ACCOUNT CHARGES 0.80% 5% AIR (CONTINUED)
UNIT VALUE AT NUMBER OF UNITS BEGINNING OF UNIT VALUE AT OUTSTANDING AT PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR - ------------------------------------------------------------- ------- ---------------- --------------- --------------------- Credit Suisse Trust Emerging Markets Portfolio (continued) 2000 1.506 1.022 - 1999 1.000 1.506 - Delaware VIP Trust Delaware VIP REIT Series - Standard Class (7/99) 2004 1.816 2.368 - 2003 1.366 1.816 - 2002 1.318 1.366 - 2001 1.221 1.318 - 2000 0.937 1.221 - 1999 1.000 0.937 - Delaware VIP Small Cap Value Series - Standard Class (4/99) 2004 1.701 2.050 - 2003 1.208 1.701 - 2002 1.289 1.208 - 2001 1.162 1.289 - 2000 0.991 1.162 - 1999 1.000 0.991 - Dreyfus Variable Investment Fund Dreyfus Variable Investment Fund - Developing Leaders Portfolio - Initial Shares (4/99) 2004 1.360 1.503 - 2003 1.041 1.360 - 2002 1.298 1.041 - 2001 1.394 1.298 - 2000 1.240 1.394 - 1999 1.000 1.240 - Dreyfus Variable Investment Fund - Appreciation Portfolio - Initial Shares (3/99) 2004 0.952 0.992 - 2003 0.792 0.952 - 2002 0.958 0.792 - 2001 1.065 0.958 - 2000 1.081 1.065 - 1999 1.000 1.081 -
10 CONDENSED FINANCIAL INFORMATION SEPARATE ACCOUNT CHARGES 0.80% 5% AIR (CONTINUED)
UNIT VALUE AT NUMBER OF UNITS BEGINNING OF UNIT VALUE AT OUTSTANDING AT PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR - ------------------------------------------------------------- ------- ---------------- --------------- --------------------- Franklin Templeton Variable Insurance Products Trust Mutual Shares Securities Fund - Class 2 Shares (8/03) 2004 1.204 1.345 - 2003 1.000 1.204 - Templeton Developing Markets Securities Fund - Class 2 Shares (6/04) 2004 0.972 1.234 - Templeton Foreign Securities Fund - Class 2 Shares (5/04) 2004 0.962 1.156 - Templeton Growth Securities Fund - Class 2 Shares (6/04) 2004 1.021 1.126 - Greenwich Street Series Fund Appreciation Portfolio (8/01) 2004 0.954 1.029 - 2003 0.772 0.954 - 2002 0.943 0.772 - 2001 1.000 0.943 - Equity Index Portfolio - Class II Shares (3/99) 2004 0.864 0.945 - 2003 0.682 0.864 - 2002 0.886 0.682 - 2001 1.019 0.886 - 2000 1.133 1.019 - 1999 1.000 1.133 - Fundamental Value Portfolio (5/01) 2004 0.992 1.065 - 2003 0.722 0.992 - 2002 0.924 0.722 - 2001 1.000 0.924 - Janus Aspen Series Balanced Portfolio - Service Shares (5/01) 2004 1.005 1.080 - 2003 0.891 1.005 - 2002 0.962 0.891 - 2001 1.000 0.962 - Mid Cap Growth Portfolio - Service Shares (8/01) 2004 0.736 0.880 - 2003 0.551 0.736 -
11 CONDENSED FINANCIAL INFORMATION SEPARATE ACCOUNT CHARGES 0.80% 5% AIR (CONTINUED)
UNIT VALUE AT NUMBER OF UNITS BEGINNING OF UNIT VALUE AT OUTSTANDING AT PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR - ------------------------------------------------------------- ------- ---------------- --------------- --------------------- Mid Cap Growth Portfolio - Service Shares (continued) 2002 0.772 0.551 - 2001 1.000 0.772 - Worldwide Growth Portfolio - Service Shares (5/00) 2004 0.556 0.577 - 2003 0.453 0.556 - 2002 0.615 0.453 - 2001 0.801 0.615 - 2000 1.000 0.801 - Lazard Retirement Series, Inc. Lazard Retirement Small Cap Portfolio (5/04) 2004 1.009 1.127 - Lord Abbett Series Fund, Inc. Growth and Income Portfolio (5/04) 2004 0.968 1.111 - Mid-Cap Value Portfolio (7/04) 2004 1.007 1.165 - Oppenheimer Variable Account Funds Oppenheimer Main Street Fund/VA - Service Shares (5/04) 2004 0.975 1.078 - PIMCO Variable Insurance Trust Total Return Portfolio - Administrative Class (6/01) 2004 1.192 1.240 - 2003 1.144 1.192 - 2002 1.057 1.144 - 2001 1.000 1.057 - Putnam Variable Trust Putnam VT Discovery Growth Fund - Class IB Shares (12/01) 2004 0.739 0.789 - 2003 0.564 0.739 - 2002 0.808 0.564 - 2001 1.000 0.808 - Putnam VT International Equity Fund - Class IB Shares (5/01) 2004 0.897 1.033 - 2003 0.703 0.897 - 2002 0.861 0.703 - 2001 1.000 0.861 -
12 CONDENSED FINANCIAL INFORMATION SEPARATE ACCOUNT CHARGES 0.80% 5% AIR (CONTINUED)
UNIT VALUE AT NUMBER OF UNITS BEGINNING OF UNIT VALUE AT OUTSTANDING AT PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR - ------------------------------------------------------------- ------- ---------------- --------------- --------------------- Putnam VT Small Cap Value Fund - Class IB Shares (6/01) 2004 1.315 1.647 - 2003 0.886 1.315 - 2002 1.093 0.886 - 2001 1.000 1.093 - Salomon Brothers Variable Series Funds Inc. All Cap Fund - Class I (3/99) 2004 1.486 1.596 - 2003 1.077 1.486 - 2002 1.449 1.077 - 2001 1.433 1.449 - 2000 1.222 1.433 - 1999 1.000 1.222 - Investors Fund - Class I (3/99) 2004 1.185 1.298 - 2003 0.903 1.185 - 2002 1.183 0.903 - 2001 1.244 1.183 - 2000 1.088 1.244 - 1999 1.000 1.088 - Small Cap Growth Fund - Class I (6/01) 2004 0.932 1.064 - 2003 0.631 0.932 - 2002 0.974 0.631 - 2001 1.000 0.974 - Total Return Fund - Class I (3/99) 2004 1.121 1.209 - 2003 0.975 1.121 - 2002 1.055 0.975 - 2001 1.072 1.055 - 2000 1.002 1.072 - 1999 1.000 1.002 - Smith Barney Investment Series Smith Barney Dividend Strategy Portfolio (5/01) 2004 0.807 0.828 - 2003 0.659 0.807 - 2002 0.897 0.659 - 2001 1.000 0.897 -
13 CONDENSED FINANCIAL INFORMATION SEPARATE ACCOUNT CHARGES 0.80% 5% AIR (CONTINUED)
UNIT VALUE AT NUMBER OF UNITS BEGINNING OF UNIT VALUE AT OUTSTANDING AT PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR - ------------------------------------------------------------- ------- ---------------- --------------- --------------------- Smith Barney Premier Selections All Cap Growth Portfolio (6/01) 2004 0.869 0.887 - 2003 0.652 0.869 - 2002 0.898 0.652 - 2001 1.000 0.898 - Strong Variable Insurance Funds, Inc. Strong Multi Cap Value Fund II (7/99) 2004 1.014 1.175 - 2003 0.739 1.014 - 2002 0.969 0.739 - 2001 0.938 0.969 - 2000 0.877 0.938 - 1999 1.000 0.877 - The Travelers Series Trust Convertible Securities Portfolio (5/04) 2004 0.990 1.040 - Disciplined Mid Cap Stock Portfolio (6/99) 2004 1.406 1.625 - 2003 1.060 1.406 - 2002 1.247 1.060 - 2001 1.310 1.247 - 2000 1.132 1.310 - 1999 1.000 1.132 - Equity Income Portfolio (3/99) 2004 1.137 1.240 - 2003 0.874 1.137 - 2002 1.024 0.874 - 2001 1.105 1.024 - 2000 1.021 1.105 - 1999 1.000 1.021 - Federated Stock Portfolio (4/99) 2004 1.015 1.113 - 2003 0.802 1.015 - 2002 1.002 0.802 - 2001 0.993 1.002 - 2000 0.965 0.993 - 1999 1.000 0.965 - Large Cap Portfolio (3/99) 2004 0.807 0.852 - 2003 0.652 0.807 -
14 CONDENSED FINANCIAL INFORMATION SEPARATE ACCOUNT CHARGES 0.80% 5% AIR (CONTINUED)
UNIT VALUE AT NUMBER OF UNITS BEGINNING OF UNIT VALUE AT OUTSTANDING AT PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR - ------------------------------------------------------------- ------- ---------------- --------------- --------------------- Large Cap Portfolio (continued) 2002 0.851 0.652 - 2001 1.038 0.851 - 2000 1.224 1.038 - 1999 1.000 1.224 - Lazard International Stock Portfolio (4/99) 2004 0.846 0.971 - 2003 0.663 0.846 - 2002 0.768 0.663 - 2001 1.049 0.768 - 2000 1.194 1.049 - 1999 1.000 1.194 - Merrill Lynch Large Cap Core Portfolio (3/99) 2004 0.780 0.897 - 2003 0.649 0.780 - 2002 0.874 0.649 - 2001 1.136 0.874 - 2000 1.213 1.136 - 1999 1.000 1.213 - MFS Emerging Growth Portfolio (8/01) 2004 0.681 0.761 - 2003 0.531 0.681 - 2002 0.814 0.531 - 2001 1.000 0.814 - MFS Mid Cap Growth Portfolio (5/99) 2004 0.909 1.029 - 2003 0.668 0.909 - 2002 1.317 0.668 - 2001 1.739 1.317 - 2000 1.603 1.739 - 1999 1.000 1.603 - MFS Value Portfolio (5/04) 2004 0.969 1.127 - Pioneer Fund Portfolio (5/99) 2004 0.768 0.847 - 2003 0.625 0.768 - 2002 0.903 0.625 - 2001 1.183 0.903 - 2000 0.959 1.183 - 1999 1.000 0.959 -
15 CONDENSED FINANCIAL INFORMATION SEPARATE ACCOUNT CHARGES 0.80% 5% AIR (CONTINUED)
UNIT VALUE AT NUMBER OF UNITS BEGINNING OF UNIT VALUE AT OUTSTANDING AT PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR - ------------------------------------------------------------- ------- ---------------- --------------- --------------------- Social Awareness Stock Portfolio (3/99) 2004 0.877 0.925 - 2003 0.686 0.877 - 2002 0.921 0.686 - 2001 1.100 0.921 - 2000 1.115 1.100 - 1999 1.000 1.115 - Travelers Quality Bond Portfolio (3/99) 2004 1.259 1.290 - 2003 1.186 1.259 - 2002 1.130 1.186 - 2001 1.063 1.130 - 2000 1.002 1.063 - 1999 1.000 1.002 - U.S. Government Securities Portfolio (3/99) 2004 1.326 1.396 - 2003 1.301 1.326 - 2002 1.154 1.301 - 2001 1.099 1.154 - 2000 0.968 1.099 - 1999 1.000 0.968 - Travelers Series Fund Inc. AIM Capital Appreciation Portfolio (11/01) 2004 0.840 0.887 - 2003 0.654 0.840 - 2002 0.867 0.654 - 2001 1.000 0.867 - MFS Total Return Portfolio (4/99) 2004 1.240 1.371 - 2003 1.073 1.240 - 2002 1.141 1.073 - 2001 1.150 1.141 - 2000 0.994 1.150 - 1999 1.000 0.994 - Pioneer Strategic Income Portfolio (6/99) 2004 1.285 1.415 - 2003 1.084 1.285 - 2002 1.032 1.084 - 2001 0.998 1.032 - 2000 1.010 0.998 - 1999 1.000 1.010 -
16 CONDENSED FINANCIAL INFORMATION SEPARATE ACCOUNT CHARGES 0.80% 5% AIR (CONTINUED)
UNIT VALUE AT NUMBER OF UNITS BEGINNING OF UNIT VALUE AT OUTSTANDING AT PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR - ------------------------------------------------------------- ------- ---------------- --------------- --------------------- SB Adjustable Rate Income Portfolio - Class I Shares (10/03) 2004 1.001 1.005 - 2003 1.000 1.001 - Smith Barney Aggressive Growth Portfolio (5/01) 2004 0.846 0.923 - 2003 0.634 0.846 - 2002 0.949 0.634 - 2001 1.000 0.949 - Smith Barney High Income Portfolio (5/99) 2004 1.065 1.166 - 2003 0.842 1.065 - 2002 0.877 0.842 - 2001 0.918 0.877 - 2000 1.007 0.918 - 1999 1.000 1.007 - Smith Barney International All Cap Growth Portfolio (3/99) 2004 0.755 0.883 - 2003 0.597 0.755 - 2002 0.810 0.597 - 2001 1.186 0.810 - 2000 1.569 1.186 - 1999 1.000 1.569 - Smith Barney Large Capitalization Growth Portfolio (3/99) 2004 0.991 0.987 - 2003 0.677 0.991 - 2002 0.907 0.677 - 2001 1.045 0.907 - 2000 1.132 1.045 - 1999 1.000 1.132 - Strategic Equity Portfolio (3/99) 2004 0.787 0.861 - 2003 0.598 0.787 - 2002 0.908 0.598 - 2001 1.057 0.908 - 2000 1.303 1.057 - 1999 1.000 1.303 -
17 CONDENSED FINANCIAL INFORMATION SEPARATE ACCOUNT CHARGES 0.80% 5% AIR (CONTINUED)
UNIT VALUE AT NUMBER OF UNITS BEGINNING OF UNIT VALUE AT OUTSTANDING AT PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR - ------------------------------------------------------------- ------- ---------------- --------------- --------------------- Van Kampen Life Investment Trust Comstock Portfolio - Class II Shares (8/03) 2004 1.257 1.464 - 2003 1.000 1.257 - Emerging Growth Portfolio - Class II Shares (1/02) 2004 0.688 0.729 - 2003 0.546 0.688 - 2002 0.817 0.546 - 2001 1.000 0.817 - Enterprise Portfolio - Class II Shares (10/01) 2004 0.794 0.817 - 2003 0.637 0.794 - 2002 0.911 0.637 - 2001 1.000 0.911 - Variable Annuity Portfolios Smith Barney Small Cap Growth Opportunities Portfolio (5/01) 2004 0.986 1.130 - 2003 0.700 0.986 - 2002 0.949 0.700 - 2001 1.000 0.949 - Variable Insurance Products Fund II Asset Manager Portfolio - Service Class 2 (6/00) 2004 0.949 0.990 - 2003 0.813 0.949 - 2002 0.900 0.813 - 2001 0.949 0.900 - 2000 1.000 0.949 - Contrafund(R) Portfolio - Service Class 2 (9/01) 2004 1.083 1.238 - 2003 0.852 1.083 - 2002 0.950 0.852 - 2001 1.000 0.950 - Variable Insurance Products Fund III Dynamic Capital Appreciation Portfolio - Service Class 2 (5/01) 2004 0.962 0.966 - 2003 0.776 0.962 - 2002 0.846 0.776 - 2001 1.000 0.846 -
18 CONDENSED FINANCIAL INFORMATION SEPARATE ACCOUNT CHARGES 0.80% 5% AIR (CONTINUED)
UNIT VALUE AT NUMBER OF UNITS BEGINNING OF UNIT VALUE AT OUTSTANDING AT PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR - ------------------------------------------------------------- ------- ---------------- --------------- --------------------- Mid Cap Portfolio - Service Class 2 (7/01) 2004 1.264 1.563 - 2003 0.921 1.264 - 2002 1.032 0.921 - 2001 1.000 1.032 -
19 CONDENSED FINANCIAL INFORMATION SEPARATE ACCOUNT CHARGES 0.80% 25 FL
UNIT VALUE AT NUMBER OF UNITS BEGINNING OF UNIT VALUE AT OUTSTANDING AT PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR - ------------------------------------------------------------- ------- ---------------- --------------- --------------------- The Travelers Series Trust Travelers Quality Bond Portfolio (3/99) 2004 1.244 1.271 - 2003 1.175 1.244 - 2002 1.122 1.175 - 2001 1.058 1.122 - 2000 1.000 1.058 - 1999 1.000 1.000 - U.S. Government Securities Portfolio (3/99) 2004 1.310 1.376 - 2003 1.289 1.310 - 2002 1.146 1.289 - 2001 1.094 1.146 - 2000 0.966 1.094 - 1999 1.000 0.966 -
20 CONDENSED FINANCIAL INFORMATION SEPARATE ACCOUNT CHARGES 0.80% 43 FL
UNIT VALUE AT NUMBER OF UNITS BEGINNING OF UNIT VALUE AT OUTSTANDING AT PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR - ------------------------------------------------------------- ------- ---------------- --------------- --------------------- The Travelers Series Trust Travelers Quality Bond Portfolio (3/99) 2004 1.233 1.258 - 2003 1.167 1.233 - 2002 1.117 1.167 - 2001 1.055 1.117 - 2000 0.999 1.055 - 1999 1.000 0.999 - U.S. Government Securities Portfolio (3/99) 2004 1.299 1.362 - 2003 1.280 1.299 - 2002 1.140 1.280 - 2001 1.091 1.140 - 2000 0.965 1.091 - 1999 1.000 0.965 -
21 CONDENSED FINANCIAL INFORMATION SEPARATE ACCOUNT CHARGES 0.80% 62 FL
UNIT VALUE AT NUMBER OF UNITS BEGINNING OF UNIT VALUE AT OUTSTANDING AT PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR - ------------------------------------------------------------- ------- ---------------- --------------- --------------------- Greenwich Street Series Fund Equity Index Portfolio - Class II Shares (3/99) 2004 0.839 0.912 14,761 2003 0.666 0.839 15,472 2002 0.871 0.666 16,623 2001 1.008 0.871 17,808 2000 1.127 1.008 22,462 1999 1.000 1.127 -
22 CONDENSED FINANCIAL INFORMATION SEPARATE ACCOUNT CHARGES 0.80% 110 FL
UNIT VALUE AT NUMBER OF UNITS BEGINNING OF UNIT VALUE AT OUTSTANDING AT PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR - ------------------------------------------------------------- ------- ---------------- --------------- --------------------- Greenwich Street Series Fund Equity Index Portfolio - Class II Shares (3/99) 2004 0.820 0.887 - 2003 0.654 0.820 - 2002 0.859 0.654 - 2001 0.999 0.859 - 2000 1.123 0.999 - 1999 1.000 1.123 -
23 CONDENSED FINANCIAL INFORMATION SEPARATE ACCOUNT CHARGES 1.25% 3% AIR
UNIT VALUE AT NUMBER OF UNITS BEGINNING OF UNIT VALUE AT OUTSTANDING AT PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR - ------------------------------------------------------------- ------- ---------------- --------------- --------------------- Capital Appreciation Fund (5/00) 2004 0.495 0.584 20,166,601 2003 0.401 0.495 21,432,338 2002 0.542 0.401 22,659,093 2001 0.743 0.542 23,468,703 2000 1.000 0.743 18,629,244 High Yield Bond Trust (5/99) 2004 1.389 1.491 5,133,946 2003 1.089 1.389 4,863,739 2002 1.054 1.089 4,108,977 2001 0.974 1.054 3,091,010 2000 0.977 0.974 2,504,885 1999 1.000 0.977 879,832 Managed Assets Trust (3/99) 2004 1.088 1.176 19,266,940 2003 0.903 1.088 18,510,619 2002 1.000 0.903 17,701,490 2001 1.000 1.000 18,901,460 2001 1.067 1.000 - 2000 1.098 1.067 17,098,984 Money Market Portfolio (4/99) 2004 1.101 1.099 11,972,099 2003 1.107 1.101 14,391,148 2002 1.105 1.107 19,138,733 2001 1.078 1.105 16,519,464 2000 1.028 1.078 12,443,637 1999 1.000 1.028 5,359,933 AIM Variable Insurance Funds, Inc. AIM V.I. Premier Equity Fund - Series I (7/01) 2004 0.754 0.787 186,960 2003 0.610 0.754 221,312 2002 0.886 0.610 222,446 2001 1.000 0.886 102,789 American Funds Insurance Series Global Growth Fund - Class 2 Shares (5/04) 2004 1.010 1.105 149,343 Growth Fund - Class 2 Shares (5/04) 2004 0.970 1.088 292,002 Growth-Income Fund - Class 2 Shares (5/04) 2004 0.979 1.079 374,376
24 CONDENSED FINANCIAL INFORMATION SEPARATE ACCOUNT CHARGES 1.25% 3% AIR (CONTINUED)
UNIT VALUE AT NUMBER OF UNITS BEGINNING OF UNIT VALUE AT OUTSTANDING AT PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR - ------------------------------------------------------------- ------- ---------------- --------------- --------------------- CitiStreet Funds, Inc. CitiStreet Diversified Bond Fund - Class I (3/99) 2004 1.282 1.325 66,487,051 2003 1.230 1.282 55,700,887 2002 1.143 1.230 55,075,081 2001 1.083 1.143 41,752,556 2000 0.976 1.083 13,300,853 1999 1.000 0.976 3,629,750 CitiStreet International Stock Fund - Class I (3/99) 2004 0.880 0.998 39,168,316 2003 0.685 0.880 36,390,928 2002 0.893 0.685 34,603,237 2001 1.151 0.893 24,386,543 2000 1.267 1.151 12,244,917 1999 1.000 1.267 3,413,512 CitiStreet Large Company Stock Fund - Class I (3/99) 2004 0.668 0.726 84,604,803 2003 0.528 0.668 73,000,402 2002 0.693 0.528 62,427,499 2001 0.833 0.693 42,480,505 2000 0.992 0.833 22,805,100 1999 1.000 0.992 5,697,520 CitiStreet Small Company Stock Fund - Class I (3/99) 2004 1.695 1.924 16,944,532 2003 1.199 1.695 15,965,548 2002 1.592 1.199 13,461,238 2001 1.587 1.592 10,561,096 2000 1.460 1.587 9,235,726 1999 1.000 1.460 2,542,636 Credit Suisse Trust Credit Suisse Trust Emerging Markets Portfolio (5/99) 2004 1.116 1.377 1,293,414 2003 0.791 1.116 1,320,224 2002 0.906 0.791 1,367,461 2001 1.015 0.906 1,261,396 2000 1.502 1.015 1,387,952 1999 1.000 1.502 563,587
25 CONDENSED FINANCIAL INFORMATION SEPARATE ACCOUNT CHARGES 1.25% 3% AIR (CONTINUED)
UNIT VALUE AT NUMBER OF UNITS BEGINNING OF UNIT VALUE AT OUTSTANDING AT PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR - ------------------------------------------------------------- ------- ---------------- --------------- --------------------- Delaware VIP Trust Delaware VIP REIT Series - Standard Class (7/99) 2004 1.780 2.310 2,341,913 2003 1.345 1.780 1,886,837 Delaware VIP Trust 2002 1.303 1.345 1,701,926 Delaware VIP REIT Series - Standard Class (7/99) 2001 1.213 1.303 568,575 2000 0.935 1.213 284,819 1999 1.000 0.935 22,639 Delaware VIP Small Cap Value Series - Standard Class (4/99) 2004 1.665 1.998 2,625,879 2003 1.188 1.665 2,520,879 2002 1.274 1.188 2,275,312 2001 1.153 1.274 1,023,318 2000 0.988 1.153 319,706 1999 1.000 0.988 184,589 Dreyfus Variable Investment Fund Dreyfus Variable Investment Fund - Developing Leaders Portfolio - Initial Shares (4/99) 2004 1.332 1.464 7,497,614 2003 1.024 1.332 7,588,481 2002 1.282 1.024 7,605,604 2001 1.383 1.282 7,164,578 2000 1.236 1.383 5,489,701 1999 1.000 1.236 1,060,068 Dreyfus Variable Investment Fund - Appreciation Portfolio - Initial Shares (3/99) 2004 0.931 0.966 4,331,406 2003 0.778 0.931 4,997,871 2002 0.946 0.778 5,185,802 2001 1.057 0.946 5,446,028 2000 1.077 1.057 4,996,243 1999 1.000 1.077 2,447,252 Franklin Templeton Variable Insurance Products Trust Mutual Shares Securities Fund - Class 2 Shares (8/03) 2004 1.200 1.335 82,518 2003 1.000 1.200 7,732 Templeton Developing Markets Securities Fund - Class 2 Shares (6/04) 2004 0.971 1.230 49,682
26 CONDENSED FINANCIAL INFORMATION SEPARATE ACCOUNT CHARGES 1.25% 3% AIR (CONTINUED)
UNIT VALUE AT NUMBER OF UNITS BEGINNING OF UNIT VALUE AT OUTSTANDING AT PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR - ------------------------------------------------------------- ------- ---------------- --------------- --------------------- Templeton Foreign Securities Fund - Class 2 Shares (5/04) 2004 0.962 1.153 181,735 Templeton Growth Securities Fund - Class 2 Shares (6/04) 2004 1.021 1.123 525,836 Greenwich Street Series Fund Appreciation Portfolio (8/01) 2004 0.942 1.013 3,121,998 2003 0.766 0.942 2,700,590 2002 0.941 0.766 1,764,167 2001 1.000 0.941 159,167 Equity Index Portfolio - Class II Shares (3/99) 2004 0.846 0.921 20,918,117 2003 0.671 0.846 21,224,167 2002 0.875 0.671 19,946,906 2001 1.011 0.875 18,876,693 2000 1.129 1.011 15,972,202 1999 1.000 1.129 5,953,238 Fundamental Value Portfolio (5/01) 2004 0.981 1.048 8,977,453 2003 0.716 0.981 8,237,997 2002 0.921 0.716 7,006,816 2001 1.000 0.921 2,671,191 Janus Aspen Series Balanced Portfolio - Service Shares (5/01) 2004 0.993 1.062 1,405,488 2003 0.884 0.993 1,458,079 2002 0.960 0.884 1,287,096 2001 1.000 0.960 288,529 Mid Cap Growth Portfolio - Service Shares (8/01) 2004 0.727 0.865 212,598 2003 0.546 0.727 128,580 2002 0.770 0.546 85,735 2001 1.000 0.770 76,227 Worldwide Growth Portfolio - Service Shares (5/00) 2004 0.547 0.565 9,163,991 2003 0.448 0.547 9,939,636 2002 0.610 0.448 10,635,257 2001 0.799 0.610 10,487,343 2000 1.000 0.799 8,681,668 Lazard Retirement Series, Inc. Lazard Retirement Small Cap Portfolio (5/04) 2004 1.009 1.123 231,226
27 CONDENSED FINANCIAL INFORMATION SEPARATE ACCOUNT CHARGES 1.25% 3% AIR (CONTINUED)
UNIT VALUE AT NUMBER OF UNITS BEGINNING OF UNIT VALUE AT OUTSTANDING AT PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR - ------------------------------------------------------------- ------- ---------------- --------------- --------------------- Lord Abbett Series Fund, Inc. Growth and Income Portfolio (5/04) 2004 0.967 1.107 268,562 Mid-Cap Value Portfolio (7/04) 2004 1.006 1.161 185,019 Oppenheimer Variable Account Funds Oppenheimer Main Street Fund/VA - Service Shares (5/04) 2004 0.974 1.075 64,371 PIMCO Variable Insurance Trust Total Return Portfolio - Administrative Class (6/01) 2004 1.178 1.220 5,331,824 2003 1.135 1.178 5,474,030 2002 1.054 1.135 4,516,791 2001 1.000 1.054 218,805 2004 0.730 0.776 81,229 Putnam Variable Trust 2003 0.560 0.730 87,768 Putnam VT Discovery Growth Fund - Class IB Shares (12/01) 2002 0.806 0.560 100,451 2001 1.000 0.806 417 Putnam VT International Equity Fund - Class IB Shares (5/01) 2004 0.886 1.016 885,854 2003 0.698 0.886 862,671 2002 0.858 0.698 689,548 2001 1.000 0.858 98,472 Putnam VT Small Cap Value Fund - Class IB Shares (6/01) 2004 1.300 1.620 3,050,052 2003 0.879 1.300 2,130,413 2002 1.090 0.879 1,954,682 2001 1.000 1.090 389,214
28 CONDENSED FINANCIAL INFORMATION SEPARATE ACCOUNT CHARGES 1.25% 3% AIR (CONTINUED)
UNIT VALUE AT NUMBER OF UNITS BEGINNING OF UNIT VALUE AT OUTSTANDING AT PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR - ------------------------------------------------------------- ------- ---------------- --------------- --------------------- Salomon Brothers Variable Series Funds Inc. All Cap Fund - Class I (3/99) 2004 1.454 1.555 8,525,221 2003 1.059 1.454 7,991,433 2002 1.431 1.059 7,710,523 2001 1.422 1.431 6,509,733 2000 1.218 1.422 3,944,667 1999 1.000 1.218 1,398,956 Investors Fund - Class I (3/99) 2004 1.160 1.265 3,276,334 2003 0.888 1.160 3,212,108 2002 1.168 0.888 3,254,316 2001 1.234 1.168 3,125,888 2000 1.084 1.234 1,626,667 1999 1.000 1.084 665,635 Small Cap Growth Fund - Class I (6/01) 2004 0.920 1.046 598,446 2003 0.626 0.920 419,725 2002 0.971 0.626 317,694 2001 1.000 0.971 121,505 Total Return Fund - Class I (3/99) 2004 1.097 1.178 505,219 2003 0.958 1.097 533,550 2002 1.042 0.958 475,598 2001 1.064 1.042 328,271 2000 0.998 1.064 216,675 1999 1.000 0.998 163,763 Smith Barney Investment Series Smith Barney Dividend Strategy Portfolio (5/01) 2004 0.797 0.814 338,590 2003 0.654 0.797 248,700 2002 0.895 0.654 108,360 2001 1.000 0.895 66,387 Smith Barney Premier Selections All Cap Growth Portfolio (6/01) 2004 0.858 0.872 44,028 2003 0.647 0.858 28,134 2002 0.895 0.647 14,025 2001 1.000 0.895 5,930
29 CONDENSED FINANCIAL INFORMATION SEPARATE ACCOUNT CHARGES 1.25% 3% AIR (CONTINUED)
UNIT VALUE AT NUMBER OF UNITS BEGINNING OF UNIT VALUE AT OUTSTANDING AT PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR - ------------------------------------------------------------- ------- ---------------- --------------- --------------------- Strong Variable Insurance Funds, Inc. Strong Multi Cap Value Fund II (7/99) 2004 0.994 1.146 610,822 2003 0.727 0.994 678,132 2002 0.958 0.727 772,740 2001 0.932 0.958 487,142 2000 0.875 0.932 255,460 1999 1.000 0.875 114,839 The Travelers Series Trust Convertible Securities Portfolio (5/04) 2004 0.990 1.037 64,342 Disciplined Mid Cap Stock Portfolio (6/99) 2004 1.378 1.585 4,125,218 2003 1.043 1.378 4,143,677 2002 1.233 1.043 4,104,987 2001 1.301 1.233 3,115,340 2000 1.129 1.301 1,801,861 1999 1.000 1.129 131,236 Equity Income Portfolio (3/99) 2004 1.113 1.208 11,224,792 2003 0.859 1.113 10,063,251 2002 1.011 0.859 8,843,180 2001 1.096 1.011 6,878,161 2000 1.017 1.096 4,760,672 1999 1.000 1.017 2,462,986 Federated Stock Portfolio (4/99) 2004 0.994 1.085 1,172,424 2003 0.789 0.994 1,305,879 2002 0.990 0.789 1,334,566 2001 0.986 0.990 750,120 2000 0.962 0.986 500,956 1999 1.000 0.962 342,000 Large Cap Portfolio (3/99) 2004 0.789 0.830 8,433,992 2003 0.641 0.789 8,803,827 2002 0.841 0.641 9,099,937 2001 1.030 0.841 9,336,726 2000 1.219 1.030 8,737,631 Large Cap Portfolio (3/99) (continued) 1999 1.000 1.219 2,827,437
30 CONDENSED FINANCIAL INFORMATION SEPARATE ACCOUNT CHARGES 1.25% 3% AIR (CONTINUED)
UNIT VALUE AT NUMBER OF UNITS BEGINNING OF UNIT VALUE AT OUTSTANDING AT PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR - ------------------------------------------------------------- ------- ---------------- --------------- --------------------- Lazard International Stock Portfolio (4/99) 2004 0.828 0.947 1,335,961 2003 0.652 0.828 819,351 2002 0.759 0.652 676,518 2001 1.041 0.759 357,698 2000 1.190 1.041 325,277 1999 1.000 1.190 118,109 Merrill Lynch Large Cap Core Portfolio (3/99) 2004 0.764 0.874 914,605 2003 0.638 0.764 925,010 2002 0.863 0.638 906,193 2001 1.127 0.863 1,244,517 2000 1.209 1.127 1,184,412 1999 1.000 1.209 169,528 MFS Emerging Growth Portfolio (8/01) 2004 0.672 0.749 59,682 2003 0.527 0.672 33,417 2002 0.812 0.527 33,417 2001 1.000 0.812 10,322 MFS Mid Cap Growth Portfolio (5/99) 2004 0.890 1.003 4,141,184 2003 0.658 0.890 4,626,085 2002 1.301 0.658 4,763,801 2001 1.726 1.301 5,526,623 2000 1.598 1.726 4,877,373 1999 1.000 1.598 519,757 MFS Value Portfolio (5/04) 2004 0.969 1.123 244,994 Pioneer Fund Portfolio (5/99) 2004 0.752 0.825 2,079,574 2003 0.615 0.752 2,413,382 2002 0.893 0.615 2,717,974 2001 1.174 0.893 3,330,826 2000 0.956 1.174 2,495,494 1999 1.000 0.956 426,556 Social Awareness Stock Portfolio (3/99) 2004 0.859 0.901 3,906,470 2003 0.675 0.859 4,114,361 2002 0.909 0.675 4,204,405 2001 1.092 0.909 4,662,446 2000 1.111 1.092 3,740,424 1999 1.000 1.111 1,692,027
31 CONDENSED FINANCIAL INFORMATION SEPARATE ACCOUNT CHARGES 1.25% 3% AIR (CONTINUED)
UNIT VALUE AT NUMBER OF UNITS BEGINNING OF UNIT VALUE AT OUTSTANDING AT PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR - ------------------------------------------------------------- ------- ---------------- --------------- --------------------- Travelers Quality Bond Portfolio (3/99) 2004 1.232 1.257 6,168,939 2003 1.166 1.232 7,124,797 2002 1.116 1.166 6,632,682 2001 1.055 1.116 4,993,526 2000 0.998 1.055 2,776,420 Travelers Quality Bond Portfolio (3/99) 1999 1.000 0.998 1,489,904 (continued) U.S. Government Securities Portfolio (3/99) 2004 1.298 1.360 10,285,926 2003 1.279 1.298 12,875,470
32 CONDENSED FINANCIAL INFORMATION SEPARATE ACCOUNT CHARGES 1.25% 3% AIR (CONTINUED)
UNIT VALUE AT NUMBER OF UNITS BEGINNING OF UNIT VALUE AT OUTSTANDING AT PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR - ------------------------------------------------------------- ------- ---------------- --------------- --------------------- U.S. Government Securities Portfolio (continued) 2002 1.140 1.279 13,561,473 2001 1.091 1.140 5,799,178 2000 0.965 1.091 2,991,693 1999 1.000 0.965 1,134,380 Travelers Series Fund Inc. AIM Capital Appreciation Portfolio (11/01) 2004 0.830 0.872 771,149 2003 0.650 0.830 771,142 2002 0.864 0.650 797,904 2001 1.000 0.864 - MFS Total Return Portfolio (4/99) 2004 1.214 1.336 13,298,651 2003 1.055 1.214 12,199,587 2002 1.127 1.055 11,066,498 2001 1.142 1.127 6,827,545 2000 0.991 1.142 3,061,099 1999 1.000 0.991 822,665 Pioneer Strategic Income Portfolio (6/99) 2004 1.259 1.380 856,031 2003 1.067 1.259 829,179 2002 1.020 1.067 766,337 2001 0.991 1.020 471,935 2000 1.007 0.991 316,519 1999 1.000 1.007 188,752 SB Adjustable Rate Income Portfolio - Class I Shares (10/03) 2004 1.000 0.999 277,303 2003 1.000 1.000 12,295 Smith Barney Aggressive Growth Portfolio (5/01) 2004 0.836 0.908 11,860,702 2003 0.629 0.836 9,708,546 2002 0.946 0.629 6,977,294 2001 1.000 0.946 3,242,797 Smith Barney High Income Portfolio (5/99) 2004 1.043 1.137 971,498 2003 0.828 1.043 904,827 2002 0.866 0.828 398,339 2001 0.912 0.866 326,040 2000 1.004 0.912 283,761 1999 1.000 1.004 174,517
33 CONDENSED FINANCIAL INFORMATION SEPARATE ACCOUNT CHARGES 1.25% 3% AIR (CONTINUED)
UNIT VALUE AT NUMBER OF UNITS BEGINNING OF UNIT VALUE AT OUTSTANDING AT PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR - ------------------------------------------------------------- ------- ---------------- --------------- ------------------- Smith Barney International All Cap Growth 2004 0.739 0.860 2,412,532 Portfolio (3/99) 2003 0.587 0.739 2,627,323 2002 0.800 0.587 2,866,785 2001 1.177 0.800 3,135,295 2000 1.563 1.177 3,218,634 1999 1.000 1.563 942,437 Smith Barney Large Capitalization Growth Portfolio (3/99) 2004 0.970 0.961 8,385,153 2003 0.666 0.970 7,724,150 2002 0.896 0.666 6,231,231 2001 1.037 0.896 6,815,572 2000 1.128 1.037 6,508,869 1999 1.000 1.128 2,808,440 Strategic Equity Portfolio (3/99) 2004 0.770 0.838 11,640,459 2003 0.588 0.770 12,884,572 2002 0.897 0.588 13,880,086 2001 1.048 0.897 15,443,471 2000 1.298 1.048 14,295,924 1999 1.000 1.298 4,867,877 Van Kampen Life Investment Trust Comstock Portfolio - Class II Shares (8/03) 2004 1.253 1.453 305,271 2003 1.000 1.253 43,676 Emerging Growth Portfolio - Class II Shares (1/02) 2004 0.680 0.717 164,650 2003 0.542 0.680 145,755 2002 0.815 0.542 187,292 2001 1.000 0.815 - Enterprise Portfolio - Class II Shares (10/01) 2004 0.784 0.804 57,135 2003 0.632 0.784 57,287 2002 0.909 0.632 13,084 2001 1.000 0.909 4,883
34 CONDENSED FINANCIAL INFORMATION SEPARATE ACCOUNT CHARGES 1.25% 3% AIR (CONTINUED)
UNIT VALUE AT NUMBER OF UNITS BEGINNING OF UNIT VALUE AT OUTSTANDING AT PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR - ------------------------------------------------------------- ------- ---------------- --------------- ------------------- Variable Annuity Portfolios Smith Barney Small Cap Growth Opportunities Portfolio (5/01) 2004 0.974 1.112 272,596 2003 0.695 0.974 178,822 2002 0.946 0.695 114,616 2001 1.000 0.946 25,573 Variable Insurance Products Fund II Asset Manager Portfolio - Service Class 2 (6/00) 2004 0.933 0.969 4,661,931 2003 0.803 0.933 4,081,743 2002 0.894 0.803 3,576,168 2001 0.947 0.894 1,913,593 2000 1.000 0.947 1,309,194 Contrafund(R) Portfolio - Service Class 2 (9/01) 2004 1.070 1.217 2,968,323 2003 0.845 1.070 1,544,183 2002 0.947 0.845 1,138,367 2001 1.000 0.947 73,969 Variable Insurance Products Fund III Dynamic Capital Appreciation Portfolio - Service Class 2 (5/01) 2004 0.950 0.950 164,693 2003 0.770 0.950 161,766 2002 0.844 0.770 136,449 2001 1.000 0.844 - Mid Cap Portfolio - Service Class 2 (7/01) 2004 1.249 1.537 2,519,692 2003 0.914 1.249 1,582,278 2002 1.029 0.914 1,173,002 2001 1.000 1.029 115,071
CONDENSED FINANCIAL INFORMATION The following tables provide the Accumulation Unit Values information for the MID-RANGE combinations of separate account charges. The Accumulation Unit Value information for the minimum separate account charge and the maximum variable account charge are contained in the Prospectus. 35 SEPARATE ACCOUNT CHARGES 1.25% 5% AIR
UNIT VALUE AT NUMBER OF UNITS BEGINNING OF UNIT VALUE AT OUTSTANDING AT PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR - ------------------------------------------------------------- ------- ---------------- --------------- --------------------- Capital Appreciation Fund (5/00) 2004 0.495 0.584 - 2003 0.401 0.495 - 2002 0.542 0.401 - 2001 0.743 0.542 - 2000 1.000 0.743 - High Yield Bond Trust (5/99) 2004 1.389 1.491 16,956 2003 1.089 1.389 18,359 2002 1.054 1.089 19,894 2001 0.974 1.054 21,521 2000 0.977 0.974 23,249 1999 1.000 0.977 - Managed Assets Trust (3/99) 2004 1.088 1.176 - 2003 0.903 1.088 - 2002 1.000 0.903 - 2001 1.000 1.000 - 2001 1.067 1.000 - 2000 1.098 1.067 - Money Market Portfolio (4/99) 2004 1.101 1.099 6,695 2003 1.107 1.101 7,225 2002 1.105 1.107 7,788 2001 1.078 1.105 8,373 2000 1.028 1.078 - 1999 1.000 1.028 - AIM Variable Insurance Funds, Inc. AIM V.I. Premier Equity Fund - Series I (7/01) 2004 0.754 0.787 - 2003 0.610 0.754 - 2002 0.886 0.610 - 2001 1.000 0.886 - American Funds Insurance Series Global Growth Fund - Class 2 Shares (5/04) 2004 1.010 1.105 - Growth Fund - Class 2 Shares (5/04) 2004 0.970 1.088 - Growth-Income Fund - Class 2 Shares (5/04) 2004 0.979 1.079 - CitiStreet Funds, Inc. CitiStreet Diversified Bond Fund - Class I (3/99) 2004 1.282 1.325 33,289 2003 1.230 1.282 35,763 2002 1.143 1.230 38,664 2001 1.083 1.143 41,627
36 CONDENSED FINANCIAL INFORMATION SEPARATE ACCOUNT CHARGES 1.25% 5% AIR (CONTINUED)
UNIT VALUE AT NUMBER OF UNITS BEGINNING OF UNIT VALUE AT OUTSTANDING AT PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR - ------------------------------------------------------------- ------- ---------------- --------------- --------------------- CitiStreet Diversified Bond Fund - Class I (continued) 2000 0.976 1.083 22,686 1999 1.000 0.976 - CitiStreet International Stock Fund - Class I (3/99) 2004 0.880 0.998 6,694 2003 0.685 0.880 7,212 2002 0.893 0.685 7,775 2001 1.151 0.893 8,371 2000 1.267 1.151 9,004 1999 1.000 1.267 - CitiStreet Large Company Stock Fund - Class I (3/99) 2004 0.668 0.726 13,829 2003 0.528 0.668 14,898 2002 0.693 0.528 16,062 2001 0.833 0.693 17,293 2000 0.992 0.833 18,600 1999 1.000 0.992 - CitiStreet Small Company Stock Fund - Class I (3/99) 2004 1.695 1.924 5,395 2003 1.199 1.695 5,812 2002 1.592 1.199 6,266 2001 1.587 1.592 6,746 2000 1.460 1.587 7,256 1999 1.000 1.460 - Credit Suisse Trust Credit Suisse Trust Emerging Markets Portfolio (5/99) 2004 1.116 1.377 - 2003 0.791 1.116 - 2002 0.906 0.791 - 2001 1.015 0.906 - 2000 1.502 1.015 - 1999 1.000 1.502 - Delaware VIP Trust Delaware VIP REIT Series - Standard Class (7/99) 2004 1.780 2.310 - 2003 1.345 1.780 - 2002 1.303 1.345 - 2001 1.213 1.303 -
37 CONDENSED FINANCIAL INFORMATION SEPARATE ACCOUNT CHARGES 1.25% 5% AIR (CONTINUED)
UNIT VALUE AT NUMBER OF UNITS BEGINNING OF UNIT VALUE AT OUTSTANDING AT PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR - ------------------------------------------------------------- ------- ---------------- --------------- --------------------- Delaware VIP REIT Series - Standard Class (continued) 2000 0.935 1.213 - 1999 1.000 0.935 - Delaware VIP Small Cap Value Series - Standard Class (4/99) 2004 1.665 1.998 - 2003 1.188 1.665 - 2002 1.274 1.188 - 2001 1.153 1.274 - 2000 0.988 1.153 - 1999 1.000 0.988 - Dreyfus Variable Investment Fund Dreyfus Variable Investment Fund - Developing Leaders Portfolio - Initial Shares (4/99) 2004 1.332 1.464 - 2003 1.024 1.332 - 2002 1.282 1.024 - 2001 1.383 1.282 - 2000 1.236 1.383 - 1999 1.000 1.236 - Dreyfus Variable Investment Fund - Appreciation Portfolio - Initial Shares (3/99) 2004 0.931 0.966 - 2003 0.778 0.931 - 2002 0.946 0.778 - 2001 1.057 0.946 - 2000 1.077 1.057 - 1999 1.000 1.077 - Franklin Templeton Variable Insurance Products Trust Mutual Shares Securities Fund - Class 2 Shares (8/03) 2004 1.200 1.335 - 2003 1.000 1.200 - Templeton Developing Markets Securities Fund - Class 2 Shares (6/04) 2004 0.971 1.230 - Templeton Foreign Securities Fund - Class 2 Shares (5/04) 2004 0.962 1.153 -
38 CONDENSED FINANCIAL INFORMATION SEPARATE ACCOUNT CHARGES 1.25% 5% AIR (CONTINUED)
UNIT VALUE AT NUMBER OF UNITS BEGINNING OF UNIT VALUE AT OUTSTANDING AT PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR - ------------------------------------------------------------- ------- ---------------- --------------- --------------------- Templeton Growth Securities Fund - Class 2 Shares (6/04) 2004 1.021 1.123 - Greenwich Street Series Fund Appreciation Portfolio (8/01) 2004 0.942 1.013 - 2003 0.766 0.942 - 2002 0.941 0.766 - 2001 1.000 0.941 - Equity Index Portfolio - Class II Shares (3/99) 2004 0.846 0.921 45,806 2003 0.671 0.846 51,970 2002 0.875 0.671 55,452 2001 1.011 0.875 59,108 2000 1.129 1.011 62,948 1999 1.000 1.129 - Fundamental Value Portfolio (5/01) 2004 0.981 1.048 - 2003 0.716 0.981 - 2002 0.921 0.716 - 2001 1.000 0.921 - Janus Aspen Series Balanced Portfolio - Service Shares (5/01) 2004 0.993 1.062 - 2003 0.884 0.993 - 2002 0.960 0.884 - 2001 1.000 0.960 - Mid Cap Growth Portfolio - Service Shares (8/01) 2004 0.727 0.865 - 2003 0.546 0.727 - 2002 0.770 0.546 - 2001 1.000 0.770 - Worldwide Growth Portfolio - Service Shares (5/00) 2004 0.547 0.565 - 2003 0.448 0.547 - 2002 0.610 0.448 - 2001 0.799 0.610 - 2000 1.000 0.799 - Lazard Retirement Series, Inc. Lazard Retirement Small Cap Portfolio (5/04) 2004 1.009 1.123 -
39 CONDENSED FINANCIAL INFORMATION SEPARATE ACCOUNT CHARGES 1.25% 5% AIR (CONTINUED)
UNIT VALUE AT NUMBER OF UNITS BEGINNING OF UNIT VALUE AT OUTSTANDING AT PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR - ------------------------------------------------------------- ------- ---------------- --------------- --------------------- Lord Abbett Series Fund, Inc. Growth and Income Portfolio (5/04) 2004 0.967 1.107 - Mid-Cap Value Portfolio (7/04) 2004 1.006 1.161 - Oppenheimer Variable Account Funds Oppenheimer Main Street Fund/VA - Service Shares (5/04) 2004 0.974 1.075 - PIMCO Variable Insurance Trust Total Return Portfolio - Administrative Class (6/01) 2004 1.178 1.220 - 2003 1.135 1.178 - 2002 1.054 1.135 - 2001 1.000 1.054 - Putnam Variable Trust Putnam VT Discovery Growth Fund - Class IB Shares (12/01) 2004 0.730 0.776 - 2003 0.560 0.730 - 2002 0.806 0.560 - 2001 1.000 0.806 - Putnam VT International Equity Fund - Class IB Shares (5/01) 2004 0.886 1.016 - 2003 0.698 0.886 - 2002 0.858 0.698 - 2001 1.000 0.858 - Putnam VT Small Cap Value Fund - Class IB Shares (6/01) 2004 1.300 1.620 - 2003 0.879 1.300 - 2002 1.090 0.879 - 2001 1.000 1.090 - Salomon Brothers Variable Series Funds Inc. All Cap Fund - Class I (3/99) 2004 1.454 1.555 27,210 2003 1.059 1.454 29,462 2002 1.431 1.059 31,927 2001 1.422 1.431 34,537
40 CONDENSED FINANCIAL INFORMATION SEPARATE ACCOUNT CHARGES 1.25% 5% AIR (CONTINUED)
UNIT VALUE AT NUMBER OF UNITS BEGINNING OF UNIT VALUE AT OUTSTANDING AT PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR - ------------------------------------------------------------- ------- ---------------- --------------- --------------------- All Cap Fund - Class I (continued) 2000 1.218 1.422 37,311 1999 1.000 1.218 - Investors Fund - Class I (3/99) 2004 1.160 1.265 - 2003 0.888 1.160 - 2002 1.168 0.888 - 2001 1.234 1.168 - 2000 1.084 1.234 - 1999 1.000 1.084 - Small Cap Growth Fund - Class I (6/01) 2004 0.920 1.046 - 2003 0.626 0.920 - 2002 0.971 0.626 - 2001 1.000 0.971 - Total Return Fund - Class I (3/99) 2004 1.097 1.178 - 2003 0.958 1.097 - 2002 1.042 0.958 - 2001 1.064 1.042 - 2000 0.998 1.064 - 1999 1.000 0.998 - Smith Barney Investment Series Smith Barney Dividend Strategy Portfolio (5/01) 2004 0.797 0.814 - 2003 0.654 0.797 - 2002 0.895 0.654 - 2001 1.000 0.895 - Smith Barney Premier Selections All Cap Growth Portfolio (6/01) 2004 0.858 0.872 - 2003 0.647 0.858 - 2002 0.895 0.647 - 2001 1.000 0.895 - Strong Variable Insurance Funds, Inc. Strong Multi Cap Value Fund II (7/99) 2004 0.994 1.146 - 2003 0.727 0.994 - 2002 0.958 0.727 - 2001 0.932 0.958 -
41 CONDENSED FINANCIAL INFORMATION SEPARATE ACCOUNT CHARGES 1.25% 5% AIR (CONTINUED)
UNIT VALUE AT NUMBER OF UNITS BEGINNING OF UNIT VALUE AT OUTSTANDING AT PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR - ------------------------------------------------------------- ------- ---------------- --------------- --------------------- Strong Multi Cap Value Fund II (continued) 2000 0.875 0.932 - 1999 1.000 0.875 - The Travelers Series Trust Convertible Securities Portfolio (5/04) 2004 0.990 1.037 - Disciplined Mid Cap Stock Portfolio (6/99) 2004 1.378 1.585 - 2003 1.043 1.378 - 2002 1.233 1.043 - 2001 1.301 1.233 - 2000 1.129 1.301 - 1999 1.000 1.129 - Equity Income Portfolio (3/99) 2004 1.113 1.208 - 2003 0.859 1.113 - 2002 1.011 0.859 - 2001 1.096 1.011 - 2000 1.017 1.096 - 1999 1.000 1.017 - Federated Stock Portfolio (4/99) 2004 0.994 1.085 - 2003 0.789 0.994 - 2002 0.990 0.789 - 2001 0.986 0.990 - 2000 0.962 0.986 - 1999 1.000 0.962 - Large Cap Portfolio (3/99) 2004 0.789 0.830 - 2003 0.641 0.789 - 2002 0.841 0.641 - 2001 1.030 0.841 - 2000 1.219 1.030 - 1999 1.000 1.219 - Lazard International Stock Portfolio (4/99) 2004 0.828 0.947 - 2003 0.652 0.828 - 2002 0.759 0.652 - 2001 1.041 0.759 - 2000 1.190 1.041 - 1999 1.000 1.190 -
42 CONDENSED FINANCIAL INFORMATION SEPARATE ACCOUNT CHARGES 1.25% 5% AIR (CONTINUED)
UNIT VALUE AT NUMBER OF UNITS BEGINNING OF UNIT VALUE AT OUTSTANDING AT PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR - ------------------------------------------------------------- ------- ---------------- --------------- --------------------- Merrill Lynch Large Cap Core Portfolio (3/99) 2004 0.764 0.874 - 2003 0.638 0.764 - 2002 0.863 0.638 - 2001 1.127 0.863 - 2000 1.209 1.127 - 1999 1.000 1.209 - MFS Emerging Growth Portfolio (8/01) 2004 0.672 0.749 - 2003 0.527 0.672 - 2002 0.812 0.527 - 2001 1.000 0.812 - MFS Mid Cap Growth Portfolio (5/99) 2004 0.890 1.003 10,236 2003 0.658 0.890 11,084 2002 1.301 0.658 12,011 2001 1.726 1.301 12,993 2000 1.598 1.726 14,037 1999 1.000 1.598 - MFS Value Portfolio (5/04) 2004 0.969 1.123 - Pioneer Fund Portfolio (5/99) 2004 0.752 0.825 - 2003 0.615 0.752 - 2002 0.893 0.615 - 2001 1.174 0.893 - 2000 0.956 1.174 - 1999 1.000 0.956 - Social Awareness Stock Portfolio (3/99) 2004 0.859 0.901 - 2003 0.675 0.859 - 2002 0.909 0.675 - 2001 1.092 0.909 - 2000 1.111 1.092 - 1999 1.000 1.111 - Travelers Quality Bond Portfolio (3/99) 2004 1.232 1.257 15,091 2003 1.166 1.232 17,944 2002 1.116 1.166 19,445 2001 1.055 1.116 21,034
43 CONDENSED FINANCIAL INFORMATION SEPARATE ACCOUNT CHARGES 1.25% 5% AIR (CONTINUED)
UNIT VALUE AT NUMBER OF UNITS BEGINNING OF UNIT VALUE AT OUTSTANDING AT PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR - ------------------------------------------------------------- ------- ---------------- --------------- --------------------- Travelers Quality Bond Portfolio (continued) 2000 0.998 1.055 22,724 1999 1.000 0.998 - U.S. Government Securities Portfolio (3/99) 2004 1.298 1.360 - 2003 1.279 1.298 - 2002 1.140 1.279 - 2001 1.091 1.140 - 2000 0.965 1.091 - 1999 1.000 0.965 - Travelers Series Fund Inc. AIM Capital Appreciation Portfolio (11/01) 2004 0.830 0.872 - 2003 0.650 0.830 - 2002 0.864 0.650 - 2001 1.000 0.864 - MFS Total Return Portfolio (4/99) 2004 1.214 1.336 - 2003 1.055 1.214 - 2002 1.127 1.055 - 2001 1.142 1.127 - 2000 0.991 1.142 - 1999 1.000 0.991 - Pioneer Strategic Income Portfolio (6/99) 2004 1.259 1.380 - 2003 1.067 1.259 - 2002 1.020 1.067 - 2001 0.991 1.020 - 2000 1.007 0.991 - 1999 1.000 1.007 - SB Adjustable Rate Income Portfolio - Class I Shares (10/03) 2004 1.000 0.999 - 2003 1.000 1.000 - Smith Barney Aggressive Growth Portfolio (5/01) 2004 0.836 0.908 - 2003 0.629 0.836 - 2002 0.946 0.629 - 2001 1.000 0.946 -
44 CONDENSED FINANCIAL INFORMATION SEPARATE ACCOUNT CHARGES 1.25% 5% AIR (CONTINUED)
UNIT VALUE AT NUMBER OF UNITS BEGINNING OF UNIT VALUE AT OUTSTANDING AT PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR - ------------------------------------------------------------- ------- ---------------- --------------- --------------------- Smith Barney High Income Portfolio (5/99) 2004 1.043 1.137 - 2003 0.828 1.043 - 2002 0.866 0.828 - 2001 0.912 0.866 - 2000 1.004 0.912 - 1999 1.000 1.004 - Smith Barney International All Cap Growth Portfolio (3/99) 2004 0.739 0.860 - 2003 0.587 0.739 - 2002 0.800 0.587 - 2001 1.177 0.800 - 2000 1.563 1.177 - 1999 1.000 1.563 - Smith Barney Large Capitalization Growth Portfolio (3/99) 2004 0.970 0.961 10,733 2003 0.666 0.970 11,536 2002 0.896 0.666 12,440 2001 1.037 0.896 - 2000 1.128 1.037 14,436 1999 1.000 1.128 - Strategic Equity Portfolio (3/99) 2004 0.770 0.838 26,393 2003 0.588 0.770 28,725 2002 0.897 0.588 31,017 2001 1.048 0.897 33,549 2000 1.298 1.048 36,239 1999 1.000 1.298 - Van Kampen Life Investment Trust Comstock Portfolio - Class II Shares (8/03) 2004 1.253 1.453 - 2003 1.000 1.253 - Emerging Growth Portfolio - Class II Shares (1/02) 2004 0.680 0.717 - 2003 0.542 0.680 - 2002 0.815 0.542 - 2001 1.000 0.815 -
45 CONDENSED FINANCIAL INFORMATION SEPARATE ACCOUNT CHARGES 1.25% 5% AIR (CONTINUED)
UNIT VALUE AT NUMBER OF UNITS BEGINNING OF UNIT VALUE AT OUTSTANDING AT PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR - ------------------------------------------------------------- ------- ---------------- --------------- --------------------- Enterprise Portfolio - Class II Shares (10/01) 2004 0.784 0.804 - 2003 0.632 0.784 - 2002 0.909 0.632 - 2001 1.000 0.909 - Variable Annuity Portfolios Smith Barney Small Cap Growth Opportunities Portfolio (5/01) 2004 0.974 1.112 - 2003 0.695 0.974 - 2002 0.946 0.695 - 2001 1.000 0.946 - Variable Insurance Products Fund II Asset Manager Portfolio - Service Class 2 (6/00) 2004 0.933 0.969 - 2003 0.803 0.933 - 2002 0.894 0.803 - 2001 0.947 0.894 - 2000 1.000 0.947 - Contrafund(R) Portfolio - Service Class 2 (9/01) 2004 1.070 1.217 - 2003 0.845 1.070 - 2002 0.947 0.845 - 2001 1.000 0.947 - Variable Insurance Products Fund III Dynamic Capital Appreciation Portfolio - Service Class 2 (5/01) 2004 0.950 0.950 - 2003 0.770 0.950 - 2002 0.844 0.770 - 2001 1.000 0.844 - Mid Cap Portfolio - Service Class 2 (7/01) 2004 1.249 1.537 - 2003 0.914 1.249 - 2002 1.029 0.914 - 2001 1.000 1.029 -
46 CONDENSED FINANCIAL INFORMATION SEPARATE ACCOUNT CHARGES 1.25% 33 FL
UNIT VALUE AT NUMBER OF UNITS BEGINNING OF UNIT VALUE AT OUTSTANDING AT PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR - ------------------------------------------------------------- ------- ---------------- --------------- --------------------- The Travelers Series Trust Travelers Quality Bond Portfolio (3/99) 2004 1.213 1.233 39,822 2003 1.152 1.213 - 2002 1.106 1.152 - 2001 1.049 1.106 - 2000 0.996 1.049 - 1999 1.000 0.996 - U.S. Government Securities Portfolio (3/99) 2004 1.277 1.334 - 2003 1.263 1.277 - 2002 1.129 1.263 - 2001 1.084 1.129 - 2000 0.962 1.084 - 1999 1.000 0.962 -
47 CONDENSED FINANCIAL INFORMATION SEPARATE ACCOUNT CHARGES 1.25% 53 FL
UNIT VALUE AT NUMBER OF UNITS BEGINNING OF UNIT VALUE AT OUTSTANDING AT PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR - ------------------------------------------------------------- ------- ---------------- --------------- --------------------- The Travelers Series Trust Travelers Quality Bond Portfolio (3/99) 2004 1.201 1.219 - 2003 1.143 1.201 - 2002 1.100 1.143 - 2001 1.045 1.100 - 2000 0.994 1.045 - 1999 1.000 0.994 - U.S. Government Securities Portfolio (3/99) 2004 1.265 1.319 - 2003 1.253 1.265 - 2002 1.123 1.253 - 2001 1.080 1.123 - 2000 0.961 1.080 - 1999 1.000 0.961 -
48 CONDENSED FINANCIAL INFORMATION SEPARATE ACCOUNT CHARGES 1.25% 83 FL
UNIT VALUE AT NUMBER OF UNITS BEGINNING OF UNIT VALUE AT OUTSTANDING AT PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR - ------------------------------------------------------------- ------- ---------------- --------------- --------------------- Greenwich Street Series Fund Equity Index Portfolio - Class II Shares (3/99) 2004 0.813 0.878 57,174 2003 0.650 0.813 - 2002 0.855 0.650 - 2001 0.996 0.855 - 2000 1.122 0.996 - 1999 1.000 1.122 -
NOTES Effective 11/01/2004 Smith Barney Investment Series: Smith Barney Large Cap Core Portfolio changed its name to Smith Barney Investment Series: Smith Barney Dividend Strategy Portfolio. The date next to each funding option's name reflects the date money first came into the funding option through the Separate Account. Funding options not listed above had no amount allocated to them or where not available as of December 31, 2004. "Number of Units outstanding at the end of the period" may include units for Contracts Owners in payout phase, where appropriate. If a accumulate unit value has no assets and units across all sub-accounts within the Separate Account, and has had no assets and units for the history displayed on the Condensed Financial Information in the past, then it may not be displayed. AIM Variable Insurance Funds, Inc.: AIM Premier Equity Fund - Series I is no longer available to new contract owners. Credit Suisse Trust: Emerging Markets Portfolio is no longer available to new contract owners. Variable Insurance Products Fund III: Dynamic Capital Appreciation Portfolio - Service Class 2 - is no longer available to new contract owners. The Travelers Series Trust: Federated Stock Portfolio is no longer available to new contract owners. Janus Aspen Series: Balanced Portfolio - Service Shares - is no longer available to new contract owners. Janus Aspen Series: World Wide Growth Portfolio - Service Shares is no longer available to new contract holders. Putnam Variable Trust: Putnam VT Discovery Growth Fund - Class IB Share is no longer available to new contract owners. Putnam Variable Trust: Putnam VT International Equity Fund - Class IB Shares is no longer available to new contract holders. 49 NOTES (CONTINUED) Salomon Brothers Variable Series Funds Inc.: Total Return Fund - Class I is no longer available to new contract holders. Smith Barney Investment Series: Smith Barney Dividend Strategy Portfolio is no longer available to new contract owners. Greenwich Street Series Fund: Fundamental Value Portfolio is no longer available to new contract holders. Travelers Series Fund Inc.: Smith Barney International All Cap Growth Portfolio is no longer available to new contract owners. Strong Variable insurance Funds, Inc.: Strong Multi Cap Value Fund II is no longer available to new contract owners. Van Kampen Life Investment Trust: Enterprise Portfolio - Class II Shares is no longer available to new contract holders. 50 ANNUAL REPORT DECEMBER 31, 2004 THE TRAVELERS SEPARATE ACCOUNT SIX FOR VARIABLE ANNUITIES [TRAVELERS LOGO] The Travelers Insurance Company The Travelers Life and Annuity Company One Cityplace Hartford, CT 06103 THE TRAVELERS SEPARATE ACCOUNT SIX FOR VARIABLE ANNUITIES STATEMENT OF ASSETS AND LIABILITIES DECEMBER 31, 2004
HIGH CAPITAL YIELD MANAGED MONEY APPRECIATION BOND ASSETS MARKET FUND TRUST TRUST PORTFOLIO ------------ ------------ ------------ ------------ ASSETS: Investments at market value: $ 12,713,241 $ 8,246,182 $ 23,790,422 $ 14,396,518 Receivables: Dividends ................ -- -- -- 12,656 ------------ ------------ ------------ ------------ Total Assets ........... 12,713,241 8,246,182 23,790,422 14,409,174 ------------ ------------ ------------ ------------ LIABILITIES: Total Liabilities ...... -- -- -- -- ------------ ------------ ------------ ------------ NET ASSETS: $ 12,713,241 $ 8,246,182 $ 23,790,422 $ 14,409,174 ============ ============ ============ ============
See Notes to Financial Statements -1- THE TRAVELERS SEPARATE ACCOUNT SIX FOR VARIABLE ANNUITIES STATEMENT OF ASSETS AND LIABILITIES - CONTINUED DECEMBER 31, 2004
AIM V.I. GLOBAL PREMIER GROWTH GROWTH GROWTH-INCOME EQUITY FUND - FUND - FUND - FUND - CLASS 2 CLASS 2 CLASS 2 SERIES I SHARES SHARES SHARES ------------ ------------ ------------ ------------- ASSETS: Investments at market value: $ 230,154 $ 199,596 $ 335,649 $ 517,588 Receivables: Dividends ................ -- -- -- -- ------------ ------------ ------------ ------------ Total Assets ........... 230,154 199,596 335,649 517,588 ------------ ------------ ------------ ------------ LIABILITIES: Total Liabilities ...... -- -- -- -- ------------ ------------ ------------ ------------ NET ASSETS: $ 230,154 $ 199,596 $ 335,649 $ 517,588 ============ ============ ============ ============
See Notes to Financial Statements -2- THE TRAVELERS SEPARATE ACCOUNT SIX FOR VARIABLE ANNUITIES STATEMENT OF ASSETS AND LIABILITIES - CONTINUED DECEMBER 31, 2004
CITISTREET CITISTREET CREDIT CITISTREET CITISTREET LARGE SMALL SUISSE DELAWARE DIVERSIFIED INTERNATIONAL COMPANY COMPANY TRUST VIP REIT BOND STOCK STOCK STOCK EMERGING SERIES - FUND - FUND - FUND - FUND - MARKETS STANDARD CLASS I CLASS I CLASS I CLASS I PORTFOLIO CLASS ------------ ------------- ------------ ------------ ------------ ------------ $ 93,755,235 $ 41,301,670 $ 64,818,478 $ 34,343,126 $ 1,844,188 $ 6,193,210 -- -- -- -- -- -- ------------ ------------ ------------ ------------ ------------ ------------ 93,755,235 41,301,670 64,818,478 34,343,126 1,844,188 6,193,210 ------------ ------------ ------------ ------------ ------------ ------------ -- -- -- -- -- -- ------------ ------------ ------------ ------------ ------------ ------------ $ 93,755,235 $ 41,301,670 $ 64,818,478 $ 34,343,126 $ 1,844,188 $ 6,193,210 ============ ============ ============ ============ ============ ============
See Notes to Financial Statements -3- THE TRAVELERS SEPARATE ACCOUNT SIX FOR VARIABLE ANNUITIES STATEMENT OF ASSETS AND LIABILITIES - CONTINUED DECEMBER 31, 2004
DELAWARE DREYFUS VIP VIF - DREYFUS MUTUAL SMALL CAP DEVELOPING VIF - SHARES VALUE LEADERS APPRECIATION SECURITIES SERIES - PORTFOLIO - PORTFOLIO - FUND - STANDARD INITIAL INITIAL CLASS 2 CLASS SHARES SHARES SHARES ------------ ------------ ------------ ------------ ASSETS: Investments at market value: $ 5,663,717 $ 11,909,605 $ 4,513,234 $ 141,767 Receivables: Dividends ................ -- -- -- -- ------------ ------------ ------------ ------------ Total Assets ........... 5,663,717 11,909,605 4,513,234 141,767 ------------ ------------ ------------ ------------ LIABILITIES: Total Liabilities ...... -- -- -- -- ------------ ------------ ------------ ------------ NET ASSETS: $ 5,663,717 $ 11,909,605 $ 4,513,234 $ 141,767 ============ ============ ============ ============
See Notes to Financial Statements -4- THE TRAVELERS SEPARATE ACCOUNT SIX FOR VARIABLE ANNUITIES STATEMENT OF ASSETS AND LIABILITIES - CONTINUED DECEMBER 31, 2004
TEMPLETON DEVELOPING TEMPLETON TEMPLETON MARKETS FOREIGN GROWTH EQUITY SECURITIES SECURITIES SECURITIES INDEX FUND - FUND - FUND - PORTFOLIO - FUNDAMENTAL CLASS 2 CLASS 2 CLASS 2 APPRECIATION CLASS II VALUE SHARES SHARES SHARES PORTFOLIO SHARES PORTFOLIO ------------ ------------ ------------ ------------ ------------ ------------ $ 61,107 $ 256,933 $ 655,297 $ 3,329,016 $ 21,170,342 $ 10,079,696 -- -- -- -- -- -- ------------ ------------ ------------ ------------ ------------ ------------ 61,107 256,933 655,297 3,329,016 21,170,342 10,079,696 ------------ ------------ ------------ ------------ ------------ ------------ -- -- -- -- -- -- ------------ ------------ ------------ ------------ ------------ ------------ $ 61,107 $ 256,933 $ 655,297 $ 3,329,016 $ 21,170,342 $ 10,079,696 ============ ============ ============ ============ ============ ============
See Notes to Financial Statements -5- THE TRAVELERS SEPARATE ACCOUNT SIX FOR VARIABLE ANNUITIES STATEMENT OF ASSETS AND LIABILITIES - CONTINUED DECEMBER 31, 2004
MID CAP WORLDWIDE BALANCED GROWTH GROWTH LAZARD PORTFOLIO - PORTFOLIO - PORTFOLIO - RETIREMENT SERVICE SERVICE SERVICE SMALL CAP SHARES SHARES SHARES PORTFOLIO ------------ ------------ ------------ ------------ ASSETS: Investments at market value: $ 1,662,857 $ 183,971 $ 5,350,408 $ 259,760 Receivables: Dividends ................ -- -- -- -- ------------ ------------ ------------ ------------ Total Assets ........... 1,662,857 183,971 5,350,408 259,760 ------------ ------------ ------------ ------------ LIABILITIES: Total Liabilities ...... -- -- -- -- ------------ ------------ ------------ ------------ NET ASSETS: $ 1,662,857 $ 183,971 $ 5,350,408 $ 259,760 ============ ============ ============ ============
See Notes to Financial Statements -6- THE TRAVELERS SEPARATE ACCOUNT SIX FOR VARIABLE ANNUITIES STATEMENT OF ASSETS AND LIABILITIES - CONTINUED DECEMBER 31, 2004
OPPENHEIMER PUTNAM VT PUTNAM VT MAIN TOTAL DISCOVERY INTERNATIONAL GROWTH STREET RETURN GROWTH EQUITY AND MID-CAP FUND/VA - PORTFOLIO - FUND - FUND - INCOME VALUE SERVICE ADMINISTRATIVE CLASS IB CLASS IB PORTFOLIO PORTFOLIO SHARES CLASS SHARES SHARES ------------ ------------ ------------ -------------- ------------ ------------- $ 297,387 $ 254,968 $ 80,338 $ 6,974,499 $ 72,233 $ 988,359 -- -- -- -- -- -- ------------ ------------ ------------ ------------ ------------ ------------ 297,387 254,968 80,338 6,974,499 72,233 988,359 ------------ ------------ ------------ ------------ ------------ ------------ -- -- -- -- -- -- ------------ ------------ ------------ ------------ ------------ ------------ $ 297,387 $ 254,968 $ 80,338 $ 6,974,499 $ 72,233 $ 988,359 ============ ============ ============ ============ ============ ============
See Notes to Financial Statements -7- THE TRAVELERS SEPARATE ACCOUNT SIX FOR VARIABLE ANNUITIES STATEMENT OF ASSETS AND LIABILITIES - CONTINUED DECEMBER 31, 2004
PUTNAM VT SMALL CAP VALUE SMALL CAP FUND - ALL CAP INVESTORS GROWTH CLASS IB FUND - FUND - FUND - SHARES CLASS I CLASS I CLASS I ------------ ------------ ------------ ------------ ASSETS: Investments at market value: $ 5,280,294 $ 13,851,585 $ 4,338,270 $ 626,251 Receivables: Dividends ................ -- -- -- -- ------------ ------------ ------------ ------------ Total Assets ........... 5,280,294 13,851,585 4,338,270 626,251 ------------ ------------ ------------ ------------ LIABILITIES: Total Liabilities ...... -- -- -- -- ------------ ------------ ------------ ------------ NET ASSETS: $ 5,280,294 $ 13,851,585 $ 4,338,270 $ 626,251 ============ ============ ============ ============
See Notes to Financial Statements -8- THE TRAVELERS SEPARATE ACCOUNT SIX FOR VARIABLE ANNUITIES STATEMENT OF ASSETS AND LIABILITIES - CONTINUED DECEMBER 31, 2004
SMITH BARNEY SMITH PREMIER TOTAL BARNEY SELECTIONS STRONG DISCIPLINED RETURN DIVIDEND ALL CAP MULTI CAP CONVERTIBLE MID CAP FUND - STRATEGY GROWTH VALUE SECURITIES STOCK CLASS I PORTFOLIO PORTFOLIO FUND II PORTFOLIO PORTFOLIO ------------ ------------ ------------ ------------ ------------ ------------ $ 630,580 $ 294,711 $ 40,892 $ 707,425 $ 66,705 $ 7,024,104 -- -- -- -- -- -- ------------ ------------ ------------ ------------ ------------ ------------ 630,580 294,711 40,892 707,425 66,705 7,024,104 ------------ ------------ ------------ ------------ ------------ ------------ -- -- -- -- -- -- ------------ ------------ ------------ ------------ ------------ ------------ $ 630,580 $ 294,711 $ 40,892 $ 707,425 $ 66,705 $ 7,024,104 ============ ============ ============ ============ ============ ============
See Notes to Financial Statements -9- THE TRAVELERS SEPARATE ACCOUNT SIX FOR VARIABLE ANNUITIES STATEMENT OF ASSETS AND LIABILITIES - CONTINUED DECEMBER 31, 2004
LAZARD EQUITY FEDERATED INTERNATIONAL INCOME STOCK LARGE CAP STOCK PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO ------------ ------------ ------------ ------------- ASSETS: Investments at market value: $ 15,081,720 $ 1,339,140 $ 7,440,215 $ 1,343,804 Receivables: Dividends ................ -- -- -- -- ------------ ------------ ------------ ------------ Total Assets ........... 15,081,720 1,339,140 7,440,215 1,343,804 ------------ ------------ ------------ ------------ LIABILITIES: Total Liabilities ...... -- -- -- -- ------------ ------------ ------------ ------------ NET ASSETS: $ 15,081,720 $ 1,339,140 $ 7,440,215 $ 1,343,804 ============ ============ ============ ============
See Notes to Financial Statements -10- THE TRAVELERS SEPARATE ACCOUNT SIX FOR VARIABLE ANNUITIES STATEMENT OF ASSETS AND LIABILITIES - CONTINUED DECEMBER 31, 2004
MERRILL LYNCH MFS MFS SOCIAL LARGE CAP EMERGING MID CAP MFS PIONEER AWARENESS CORE GROWTH GROWTH VALUE FUND STOCK PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO ------------ ------------ ------------ ------------ ------------ ------------ $ 813,042 $ 44,676 $ 4,418,798 $ 275,189 $ 1,824,680 $ 3,713,257 -- -- -- -- -- -- ------------ ------------ ------------ ------------ ------------ ------------ 813,042 44,676 4,418,798 275,189 1,824,680 3,713,257 ------------ ------------ ------------ ------------ ------------ ------------ -- -- -- -- -- -- ------------ ------------ ------------ ------------ ------------ ------------ $ 813,042 $ 44,676 $ 4,418,798 $ 275,189 $ 1,824,680 $ 3,713,257 ============ ============ ============ ============ ============ ============
See Notes to Financial Statements -11- THE TRAVELERS SEPARATE ACCOUNT SIX FOR VARIABLE ANNUITIES STATEMENT OF ASSETS AND LIABILITIES - CONTINUED DECEMBER 31, 2004
TRAVELERS U.S. AIM MFS QUALITY GOVERNMENT CAPITAL TOTAL BOND SECURITIES APPRECIATION RETURN PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO ------------ ------------ ------------ ------------ ASSETS: Investments at market value: $ 8,373,450 $ 14,845,264 $ 737,069 $ 19,559,622 Receivables: Dividends ................ -- -- -- -- ------------ ------------ ------------ ------------ Total Assets ........... 8,373,450 14,845,264 737,069 19,559,622 ------------ ------------ ------------ ------------ LIABILITIES: Total Liabilities ...... -- -- -- -- ------------ ------------ ------------ ------------ NET ASSETS: $ 8,373,450 $ 14,845,264 $ 737,069 $ 19,559,622 ============ ============ ============ ============
See Notes to Financial Statements -12- THE TRAVELERS SEPARATE ACCOUNT SIX FOR VARIABLE ANNUITIES STATEMENT OF ASSETS AND LIABILITIES - CONTINUED DECEMBER 31, 2004
SB ADJUSTABLE SMITH SMITH RATE SMITH SMITH BARNEY BARNEY PIONEER INCOME BARNEY BARNEY INTERNATIONAL LARGE STRATEGIC PORTFOLIO - AGGRESSIVE HIGH ALL CAP CAPITALIZATION INCOME CLASS I GROWTH INCOME GROWTH GROWTH PORTFOLIO SHARES PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO ------------ ------------ ------------ ------------ ------------ ------------ $ 1,249,728 $ 334,015 $ 11,638,991 $ 1,119,057 $ 2,230,190 $ 8,404,436 -- -- -- -- -- -- ------------ ------------ ------------ ------------ ------------ ------------ 1,249,728 334,015 11,638,991 1,119,057 2,230,190 8,404,436 ------------ ------------ ------------ ------------ ------------ ------------ -- -- -- -- -- -- ------------ ------------ ------------ ------------ ------------ ------------ $ 1,249,728 $ 334,015 $ 11,638,991 $ 1,119,057 $ 2,230,190 $ 8,404,436 ============ ============ ============ ============ ============ ============
See Notes to Financial Statements -13- THE TRAVELERS SEPARATE ACCOUNT SIX FOR VARIABLE ANNUITIES STATEMENT OF ASSETS AND LIABILITIES - CONTINUED DECEMBER 31, 2004
EMERGING COMSTOCK GROWTH ENTERPRISE STRATEGIC PORTFOLIO - PORTFOLIO - PORTFOLIO - EQUITY CLASS II CLASS II CLASS II PORTFOLIO SHARES SHARES SHARES ------------ ------------ ------------ ------------ ASSETS: Investments at market value: $ 10,454,166 $ 495,477 $ 118,010 $ 45,933 Receivables: Dividends ................ -- -- -- -- ------------ ------------ ------------ ------------ Total Assets ........... 10,454,166 495,477 118,010 45,933 ------------ ------------ ------------ ------------ LIABILITIES: Total Liabilities ...... -- -- -- -- ------------ ------------ ------------ ------------ NET ASSETS: $ 10,454,166 $ 495,477 $ 118,010 $ 45,933 ============ ============ ============ ============
See Notes to Financial Statements -14- THE TRAVELERS SEPARATE ACCOUNT SIX FOR VARIABLE ANNUITIES STATEMENT OF ASSETS AND LIABILITIES - CONTINUED DECEMBER 31, 2004
SMITH DYNAMIC BARNEY ASSET CAPITAL SMALL CAP MANAGER CONTRAFUND(R) APPRECIATION MID CAP GROWTH PORTFOLIO - PORTFOLIO - PORTFOLIO - PORTFOLIO - OPPORTUNITIES SERVICE SERVICE SERVICE SERVICE PORTFOLIO CLASS 2 CLASS 2 CLASS 2 CLASS 2 COMBINED ------------- ------------ ------------- ------------ ------------ ------------ $ 305,978 $ 4,806,304 $ 3,952,812 $ 172,787 $ 4,156,872 $538,746,250 -- -- -- -- -- 12,656 ------------ ------------ ------------ ------------ ------------ ------------ 305,978 4,806,304 3,952,812 172,787 4,156,872 538,758,906 ------------ ------------ ------------ ------------ ------------ ------------ -- -- -- -- -- -- ------------ ------------ ------------ ------------ ------------ ------------ $ 305,978 $ 4,806,304 $ 3,952,812 $ 172,787 $ 4,156,872 $538,758,906 ============ ============ ============ ============ ============ ============
See Notes to Financial Statements -15- THE TRAVELERS SEPARATE ACCOUNT SIX FOR VARIABLE ANNUITIES STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2004
HIGH CAPITAL YIELD MANAGED MONEY APPRECIATION BOND ASSETS MARKET FUND TRUST TRUST PORTFOLIO ------------ ------------ ------------ ------------ INVESTMENT INCOME: Dividends ................................... $ -- $ 538,978 $ 541,746 $ 155,258 ------------ ------------ ------------ ------------ EXPENSES: Insurance charges ........................... 137,736 91,532 279,130 188,606 ------------ ------------ ------------ ------------ Net investment income (loss) ............ (137,736) 447,446 262,616 (33,348) ------------ ------------ ------------ ------------ REALIZED GAIN (LOSS) AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Realized gain distribution ................ -- 4,971 196,381 -- Realized gain (loss) on sale of investments (627,934) 77,589 (163,893) -- ------------ ------------ ------------ ------------ Realized gain (loss) .................... (627,934) 82,560 32,488 -- ------------ ------------ ------------ ------------ Change in unrealized gain (loss) on investments .......................... 2,725,194 24,915 1,511,746 -- ------------ ------------ ------------ ------------ Net increase (decrease) in net assets resulting from operations ................. $ 1,959,524 $ 554,921 $ 1,806,850 $ (33,348) ============ ============ ============ ============
See Notes to Financial Statements -16- THE TRAVELERS SEPARATE ACCOUNT SIX FOR VARIABLE ANNUITIES STATEMENT OF OPERATIONS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2004
AIM V.I. GLOBAL CITISTREET CITISTREET PREMIER GROWTH GROWTH GROWTH-INCOME DIVERSIFIED INTERNATIONAL EQUITY FUND - FUND - FUND - BOND STOCK FUND - CLASS 2 CLASS 2 CLASS 2 FUND - FUND - SERIES I SHARES SHARES SHARES CLASS I CLASS I ------------ ------------ ------------ ------------- ------------ ------------- $ 1,062 $ 230 $ 420 $ 3,594 $ 2,981,777 $ 508,009 ------------ ------------ ------------ ------------ ------------ ------------ 2,475 825 998 1,501 1,047,262 444,976 ------------ ------------ ------------ ------------ ------------ ------------ (1,413) (595) (578) 2,093 1,934,515 63,033 ------------ ------------ ------------ ------------ ------------ ------------ -- -- -- -- -- -- 1,541 92 341 39 222,629 (192,093) ------------ ------------ ------------ ------------ ------------ ------------ 1,541 92 341 39 222,629 (192,093) ------------ ------------ ------------ ------------ ------------ ------------ 9,706 17,537 23,716 27,879 807,214 5,025,312 ------------ ------------ ------------ ------------ ------------ ------------ $ 9,834 $ 17,034 $ 23,479 $ 30,011 $ 2,964,358 $ 4,896,252 ============ ============ ============ ============ ============ ============
See Notes to Financial Statements -17- THE TRAVELERS SEPARATE ACCOUNT SIX FOR VARIABLE ANNUITIES STATEMENT OF OPERATIONS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2004
CITISTREET CITISTREET CREDIT LARGE SMALL SUISSE DELAWARE COMPANY COMPANY TRUST VIP REIT STOCK STOCK EMERGING SERIES - FUND - FUND - MARKETS STANDARD CLASS I CLASS I PORTFOLIO CLASS ------------ ------------ ------------ ------------ INVESTMENT INCOME: Dividends ................................... $ 494,798 $ 34,110 $ 4,578 $ 91,350 ------------ ------------ ------------ ------------ EXPENSES: Insurance charges ........................... 693,725 370,323 19,639 57,207 ------------ ------------ ------------ ------------ Net investment income (loss) ............ (198,927) (336,213) (15,061) 34,143 ------------ ------------ ------------ ------------ REALIZED GAIN (LOSS) AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Realized gain distribution ................ -- -- -- 94,651 Realized gain (loss) on sale of investments (194,393) 71,849 (17,547) 155,710 ------------ ------------ ------------ ------------ Realized gain (loss) .................... (194,393) 71,849 (17,547) 250,361 ------------ ------------ ------------ ------------ Change in unrealized gain (loss) on investments .......................... 5,571,536 4,384,978 373,198 1,059,727 ------------ ------------ ------------ ------------ Net increase (decrease) in net assets resulting from operations ................. $ 5,178,216 $ 4,120,614 $ 340,590 $ 1,344,231 ============ ============ ============ ============
See Notes to Financial Statements -18- THE TRAVELERS SEPARATE ACCOUNT SIX FOR VARIABLE ANNUITIES STATEMENT OF OPERATIONS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2004
DELAWARE DREYFUS TEMPLETON VIP VIF - DREYFUS MUTUAL DEVELOPING TEMPLETON SMALL CAP DEVELOPING VIF - SHARES MARKETS FOREIGN VALUE LEADERS APPRECIATION SECURITIES SECURITIES SECURITIES SERIES - PORTFOLIO - PORTFOLIO - FUND - FUND - FUND - STANDARD INITIAL INITIAL CLASS 2 CLASS 2 CLASS 2 CLASS SHARES SHARES SHARES SHARES SHARES ------------ ------------ ------------ ------------ ------------ ------------ $ 9,723 $ 22,700 $ 75,095 $ 352 $ -- $ 138 ------------ ------------ ------------ ------------ ------------ ------------ 59,990 137,835 57,078 733 298 718 ------------ ------------ ------------ ------------ ------------ ------------ (50,267) (115,135) 18,017 (381) (298) (580) ------------ ------------ ------------ ------------ ------------ ------------ 97,052 -- -- -- -- -- 146,382 (174,137) (48,158) 353 434 32 ------------ ------------ ------------ ------------ ------------ ------------ 243,434 (174,137) (48,158) 353 434 32 ------------ ------------ ------------ ------------ ------------ ------------ 755,195 1,371,628 195,569 10,999 11,259 21,303 ------------ ------------ ------------ ------------ ------------ ------------ $ 948,362 $ 1,082,356 $ 165,428 $ 10,971 $ 11,395 $ 20,755 ============ ============ ============ ============ ============ ============
See Notes to Financial Statements -19- THE TRAVELERS SEPARATE ACCOUNT SIX FOR VARIABLE ANNUITIES STATEMENT OF OPERATIONS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2004
TEMPLETON GROWTH EQUITY SECURITIES INDEX FUND - PORTFOLIO - FUNDAMENTAL CLASS 2 APPRECIATION CLASS II VALUE SHARES PORTFOLIO SHARES PORTFOLIO ------------ ------------ ------------ ------------ INVESTMENT INCOME: Dividends ................................... $ -- $ 34,580 $ 275,671 $ 64,399 ------------ ------------ ------------ ------------ EXPENSES: Insurance charges ........................... 1,636 35,249 243,567 115,371 ------------ ------------ ------------ ------------ Net investment income (loss) ............ (1,636) (669) 32,104 (50,972) ------------ ------------ ------------ ------------ REALIZED GAIN (LOSS) AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Realized gain distribution ................ -- -- -- 227,577 Realized gain (loss) on sale of investments 338 22,960 (179,344) 83,864 ------------ ------------ ------------ ------------ Realized gain (loss) .................... 338 22,960 (179,344) 311,441 ------------ ------------ ------------ ------------ Change in unrealized gain (loss) on investments .......................... 49,872 199,115 1,894,025 374,610 ------------ ------------ ------------ ------------ Net increase (decrease) in net assets resulting from operations ................. $ 48,574 $ 221,406 $ 1,746,785 $ 635,079 ============ ============ ============ ============
See Notes to Financial Statements -20- THE TRAVELERS SEPARATE ACCOUNT SIX FOR VARIABLE ANNUITIES STATEMENT OF OPERATIONS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2004
MID CAP WORLDWIDE BALANCED GROWTH GROWTH LAZARD GROWTH PORTFOLIO - PORTFOLIO - PORTFOLIO - RETIREMENT AND MID-CAP SERVICE SERVICE SERVICE SMALL CAP INCOME VALUE SHARES SHARES SHARES PORTFOLIO PORTFOLIO PORTFOLIO ------------ ------------ ------------ ------------ ------------ ------------ $ 36,105 $ -- $ 48,209 $ -- $ 2,348 $ 581 ------------ ------------ ------------ ------------ ------------ ------------ 19,762 1,869 65,715 976 863 850 ------------ ------------ ------------ ------------ ------------ ------------ 16,343 (1,869) (17,506) (976) 1,485 (269) ------------ ------------ ------------ ------------ ------------ ------------ -- -- -- -- 2,387 2,962 16,813 1,032 (336,826) 48 49 4,717 ------------ ------------ ------------ ------------ ------------ ------------ 16,813 1,032 (336,826) 48 2,436 7,679 ------------ ------------ ------------ ------------ ------------ ------------ 80,053 28,093 511,632 26,694 24,343 21,897 ------------ ------------ ------------ ------------ ------------ ------------ $ 113,209 $ 27,256 $ 157,300 $ 25,766 $ 28,264 $ 29,307 ============ ============ ============ ============ ============ ============
See Notes to Financial Statements -21- THE TRAVELERS SEPARATE ACCOUNT SIX FOR VARIABLE ANNUITIES STATEMENT OF OPERATIONS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2004
OPPENHEIMER PUTNAM VT PUTNAM VT MAIN TOTAL DISCOVERY INTERNATIONAL STREET RETURN GROWTH EQUITY FUND/VA - PORTFOLIO - FUND - FUND - SERVICE ADMINISTRATIVE CLASS IB CLASS IB SHARES CLASS SHARES SHARES ------------ ------------- ------------ ------------- INVESTMENT INCOME: Dividends ................................... $ -- $ 128,106 $ -- $ 13,075 ------------ ------------ ------------ ------------ EXPENSES: Insurance charges ........................... 247 82,883 833 10,647 ------------ ------------ ------------ ------------ Net investment income (loss) ............ (247) 45,223 (833) 2,428 ------------ ------------ ------------ ------------ REALIZED GAIN (LOSS) AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Realized gain distribution ................ -- 100,686 -- -- Realized gain (loss) on sale of investments 7 43,295 920 25,893 ------------ ------------ ------------ ------------ Realized gain (loss) .................... 7 143,981 920 25,893 ------------ ------------ ------------ ------------ Change in unrealized gain (loss) on investments .......................... 4,054 58,618 4,114 97,744 ------------ ------------ ------------ ------------ Net increase (decrease) in net assets resulting from operations ................. $ 3,814 $ 247,822 $ 4,201 $ 126,065 ============ ============ ============ ============
See Notes to Financial Statements -22- THE TRAVELERS SEPARATE ACCOUNT SIX FOR VARIABLE ANNUITIES STATEMENT OF OPERATIONS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2004
PUTNAM VT SMALL CAP SMITH VALUE SMALL CAP TOTAL BARNEY FUND - ALL CAP INVESTORS GROWTH RETURN DIVIDEND CLASS IB FUND - FUND - FUND - FUND - STRATEGY SHARES CLASS I CLASS I CLASS I CLASS I PORTFOLIO ------------ ------------ ------------ ------------ ------------ ------------ $ 12,317 $ 72,167 $ 60,494 $ -- $ 11,447 $ 2,746 ------------ ------------ ------------ ------------ ------------ ------------ 47,515 160,517 49,398 6,434 7,993 3,201 ------------ ------------ ------------ ------------ ------------ ------------ (35,198) (88,350) 11,096 (6,434) 3,454 (455) ------------ ------------ ------------ ------------ ------------ ------------ -- -- -- -- 11,582 -- 79,346 96,286 24,256 5,460 10,488 52 ------------ ------------ ------------ ------------ ------------ ------------ 79,346 96,286 24,256 5,460 22,070 52 ------------ ------------ ------------ ------------ ------------ ------------ 902,513 884,586 329,594 64,337 20,022 6,766 ------------ ------------ ------------ ------------ ------------ ------------ $ 946,661 $ 892,522 $ 364,946 $ 63,363 $ 45,546 $ 6,363 ============ ============ ============ ============ ============ ============
See Notes to Financial Statements -23- THE TRAVELERS SEPARATE ACCOUNT SIX FOR VARIABLE ANNUITIES STATEMENT OF OPERATIONS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2004
SMITH BARNEY PREMIER SELECTIONS STRONG DISCIPLINED ALL CAP MULTI CAP CONVERTIBLE MID CAP GROWTH VALUE SECURITIES STOCK PORTFOLIO FUND II PORTFOLIO PORTFOLIO ------------ ------------ ------------ ------------ INVESTMENT INCOME: Dividends ................................... $ -- $ -- $ 1,392 $ 18,287 ------------ ------------ ------------ ------------ EXPENSES: Insurance charges ........................... 348 8,407 266 77,868 ------------ ------------ ------------ ------------ Net investment income (loss) ............ (348) (8,407) 1,126 (59,581) ------------ ------------ ------------ ------------ REALIZED GAIN (LOSS) AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Realized gain distribution ................ -- -- -- 191,548 Realized gain (loss) on sale of investments 1,142 16,126 251 121,278 ------------ ------------ ------------ ------------ Realized gain (loss) .................... 1,142 16,126 251 312,826 ------------ ------------ ------------ ------------ Change in unrealized gain (loss) on investments .......................... 823 89,399 1,137 675,979 ------------ ------------ ------------ ------------ Net increase (decrease) in net assets resulting from operations ................. $ 1,617 $ 97,118 $ 2,514 $ 929,224 ============ ============ ============ ============
See Notes to Financial Statements -24- THE TRAVELERS SEPARATE ACCOUNT SIX FOR VARIABLE ANNUITIES STATEMENT OF OPERATIONS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2004
MERRILL LAZARD LYNCH MFS EQUITY FEDERATED INTERNATIONAL LARGE CAP EMERGING INCOME STOCK LARGE CAP STOCK CORE GROWTH PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO ------------ ------------ ------------ ------------- ------------ ------------ $ 189,477 $ 18,579 $ 58,010 $ 19,291 $ 4,199 $ -- ------------ ------------ ------------ ------------ ------------ ------------ 161,550 16,347 89,261 12,205 9,111 252 ------------ ------------ ------------ ------------ ------------ ------------ 27,927 2,232 (31,251) 7,086 (4,912) (252) ------------ ------------ ------------ ------------ ------------ ------------ 656,444 -- -- -- -- -- 113,520 4,065 (258,372) 12,768 (72,353) (311) ------------ ------------ ------------ ------------ ------------ ------------ 769,964 4,065 (258,372) 12,768 (72,353) (311) ------------ ------------ ------------ ------------ ------------ ------------ 406,051 108,911 659,927 138,677 178,132 2,394 ------------ ------------ ------------ ------------ ------------ ------------ $ 1,203,942 $ 115,208 $ 370,304 $ 158,531 $ 100,867 $ 1,831 ============ ============ ============ ============ ============ ============
See Notes to Financial Statements -25- THE TRAVELERS SEPARATE ACCOUNT SIX FOR VARIABLE ANNUITIES STATEMENT OF OPERATIONS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2004
MFS SOCIAL MID CAP MFS PIONEER AWARENESS GROWTH VALUE FUND STOCK PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO ------------ ------------ ------------ ------------ INVESTMENT INCOME: Dividends ................................... $ -- $ 3,088 $ 15,837 $ 26,543 ------------ ------------ ------------ ------------ EXPENSES: Insurance charges ........................... 51,759 698 22,233 43,678 ------------ ------------ ------------ ------------ Net investment income (loss) ............ (51,759) 2,390 (6,396) (17,135) ------------ ------------ ------------ ------------ REALIZED GAIN (LOSS) AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Realized gain distribution ................ -- 2,366 -- -- Realized gain (loss) on sale of investments (747,667) 559 (134,018) (77,776) ------------ ------------ ------------ ------------ Realized gain (loss) .................... (747,667) 2,925 (134,018) (77,776) ------------ ------------ ------------ ------------ Change in unrealized gain (loss) on investments .......................... 1,316,699 12,295 304,607 270,090 ------------ ------------ ------------ ------------ Net increase (decrease) in net assets resulting from operations ................. $ 517,273 $ 17,610 $ 164,193 $ 175,179 ============ ============ ============ ============
See Notes to Financial Statements -26- THE TRAVELERS SEPARATE ACCOUNT SIX FOR VARIABLE ANNUITIES STATEMENT OF OPERATIONS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2004
SB ADJUSTABLE RATE TRAVELERS U.S. AIM MFS PIONEER INCOME QUALITY GOVERNMENT CAPITAL TOTAL STRATEGIC PORTFOLIO - BOND SECURITIES APPRECIATION RETURN INCOME CLASS I PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO SHARES ------------ ------------ ------------ ------------ ------------ ------------ $ 395,964 $ 648,845 $ 970 $ 500,174 $ 81,989 $ 3,530 ------------ ------------ ------------ ------------ ------------ ------------ 109,350 193,276 8,407 210,037 13,731 2,891 ------------ ------------ ------------ ------------ ------------ ------------ 286,614 455,569 (7,437) 290,137 68,258 639 ------------ ------------ ------------ ------------ ------------ ------------ -- 29,068 -- 510,080 -- -- 4,554 (10,169) 13,389 45,095 (4,351) 340 ------------ ------------ ------------ ------------ ------------ ------------ 4,554 18,899 13,389 555,175 (4,351) 340 ------------ ------------ ------------ ------------ ------------ ------------ (119,842) 273,381 28,254 912,965 43,267 (1,063) ------------ ------------ ------------ ------------ ------------ ------------ $ 171,326 $ 747,849 $ 34,206 $ 1,758,277 $ 107,174 $ (84) ============ ============ ============ ============ ============ ============
See Notes to Financial Statements -27- THE TRAVELERS SEPARATE ACCOUNT SIX FOR VARIABLE ANNUITIES STATEMENT OF OPERATIONS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2004
SMITH SMITH SMITH SMITH BARNEY BARNEY BARNEY BARNEY INTERNATIONAL LARGE AGGRESSIVE HIGH ALL CAP CAPITALIZATION GROWTH INCOME GROWTH GROWTH PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO ------------ ------------ ------------- -------------- INVESTMENT INCOME: Dividends ................................... $ -- $ 89,436 $ 19,269 $ 30,158 ------------ ------------ ------------ ------------ EXPENSES: Insurance charges ........................... 123,920 13,065 25,495 101,687 ------------ ------------ ------------ ------------ Net investment income (loss) ............ (123,920) 76,371 (6,226) (71,529) ------------ ------------ ------------ ------------ REALIZED GAIN (LOSS) AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Realized gain distribution ................ 43,007 -- -- -- Realized gain (loss) on sale of investments 47,691 1,589 (31,255) (38,307) ------------ ------------ ------------ ------------ Realized gain (loss) .................... 90,698 1,589 (31,255) (38,307) ------------ ------------ ------------ ------------ Change in unrealized gain (loss) on investments .......................... 905,015 16,598 363,817 9,538 ------------ ------------ ------------ ------------ Net increase (decrease) in net assets resulting from operations ................. $ 871,793 $ 94,558 $ 326,336 $ (100,298) ============ ============ ============ ============
See Notes to Financial Statements -28- THE TRAVELERS SEPARATE ACCOUNT SIX FOR VARIABLE ANNUITIES STATEMENT OF OPERATIONS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2004
SMITH EMERGING BARNEY ASSET COMSTOCK GROWTH ENTERPRISE SMALL CAP MANAGER STRATEGIC PORTFOLIO - PORTFOLIO - PORTFOLIO - GROWTH PORTFOLIO - EQUITY CLASS II CLASS II CLASS II OPPORTUNITIES SERVICE PORTFOLIO SHARES SHARES SHARES PORTFOLIO CLASS 2 ------------ ------------ ------------ ------------ ------------- ------------ $ 141,321 $ 927 $ -- $ 58 $ 207 $ 103,247 ------------ ------------ ------------ ------------ ------------ ------------ 124,526 3,180 1,349 547 3,357 53,015 ------------ ------------ ------------ ------------ ------------ ------------ 16,795 (2,253) (1,349) (489) (3,150) 50,232 ------------ ------------ ------------ ------------ ------------ ------------ -- -- -- -- 6,453 -- (868,035) 1,943 728 10 12,014 5,929 ------------ ------------ ------------ ------------ ------------ ------------ (868,035) 1,943 728 10 18,467 5,929 ------------ ------------ ------------ ------------ ------------ ------------ 1,713,467 45,346 7,774 1,599 21,432 123,159 ------------ ------------ ------------ ------------ ------------ ------------ $ 862,227 $ 45,036 $ 7,153 $ 1,120 $ 36,749 $ 179,320 ============ ============ ============ ============ ============ ============
See Notes to Financial Statements -29- THE TRAVELERS SEPARATE ACCOUNT SIX FOR VARIABLE ANNUITIES STATEMENT OF OPERATIONS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2004
DYNAMIC CAPITAL CONTRAFUND(R) APPRECIATION MID CAP PORTFOLIO - PORTFOLIO - PORTFOLIO - SERVICE SERVICE SERVICE CLASS 2 CLASS 2 CLASS 2 COMBINED ------------- ------------ ------------ ------------ INVESTMENT INCOME: Dividends ................................... $ 4,482 $ -- $ -- $ 8,601,443 ------------ ------------ ------------ ------------ EXPENSES: Insurance charges ........................... 33,436 2,312 36,152 6,001,829 ------------ ------------ ------------ ------------ Net investment income (loss) ............ (28,954) (2,312) (36,152) 2,599,614 ------------ ------------ ------------ ------------ REALIZED GAIN (LOSS) AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Realized gain distribution ................ -- -- -- 2,177,215 Realized gain (loss) on sale of investments 27,295 (992) 66,208 (2,588,622) ------------ ------------ ------------ ------------ Realized gain (loss) .................... 27,295 (992) 66,208 (411,407) ------------ ------------ ------------ ------------ Change in unrealized gain (loss) on investments .......................... 427,159 (7,441) 673,426 39,114,265 ------------ ------------ ------------ ------------ Net increase (decrease) in net assets resulting from operations ................. $ 425,500 $ (10,745) $ 703,482 $ 41,302,472 ============ ============ ============ ============
See Notes to Financial Statements -30- THE TRAVELERS SEPARATE ACCOUNT SIX FOR VARIABLE ANNUITIES STATEMENT OF CHANGES IN NET ASSETS FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003
CAPITAL APPRECIATION HIGH YIELD BOND MANAGED ASSETS FUND TRUST TRUST -------------------------- -------------------------- -------------------------- 2004 2003 2004 2003 2004 2003 ---- ---- ---- ---- ---- ---- OPERATIONS: Net investment income (loss) .............. $ (137,736) $ (122,016) $ 447,446 $ 425,192 $ 262,616 $ 272,218 Realized gain (loss) ...................... (627,934) (1,206,327) 82,560 13,643 32,488 (496,617) Change in unrealized gain (loss) on investments .......................... 2,725,194 3,592,429 24,915 1,022,264 1,511,746 3,725,896 ------------ ------------ ------------ ------------ ------------ ------------ Net increase (decrease) in net assets resulting from operations ............. 1,959,524 2,264,086 554,921 1,461,099 1,806,850 3,501,497 ------------ ------------ ------------ ------------ ------------ ------------ UNIT TRANSACTIONS: Participant purchase payments ............. 662,719 950,417 663,918 705,582 2,222,525 1,537,202 Participant transfers from other funding options ......................... 289,822 378,761 774,345 1,199,898 1,005,858 1,644,140 Administrative and asset allocation charges -- -- -- -- -- -- Contract surrenders ....................... (527,634) (678,228) (356,513) (333,571) (1,649,542) (1,117,709) Participant transfers to other funding options ......................... (1,101,417) (1,247,685) (663,134) (640,385) (737,193) (1,221,617) Other payments to participants ............ -- (76,069) (48,421) (22,655) (67,527) (73,362) ------------ ------------ ------------ ------------ ------------ ------------ Net increase (decrease) in net assets resulting from unit transactions ...... (676,510) (672,804) 370,195 908,869 774,121 768,654 ------------ ------------ ------------ ------------ ------------ ------------ Net increase (decrease) in net assets ... 1,283,014 1,591,282 925,116 2,369,968 2,580,971 4,270,151 NET ASSETS: Beginning of year ....................... 11,430,227 9,838,945 7,321,066 4,951,098 21,209,451 16,939,300 ------------ ------------ ------------ ------------ ------------ ------------ End of year ............................. $ 12,713,241 $ 11,430,227 $ 8,246,182 $ 7,321,066 $ 23,790,422 $ 21,209,451 ============ ============ ============ ============ ============ ============
See Notes to Financial Statements -31- THE TRAVELERS SEPARATE ACCOUNT SIX FOR VARIABLE ANNUITIES STATEMENT OF CHANGES IN NET ASSETS - CONTINUED FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003
MONEY MARKET AIM V.I. PREMIER GLOBAL GROWTH FUND - PORTFOLIO EQUITY FUND - SERIES I CLASS 2 SHARES -------------------------- -------------------------- -------------------------- 2004 2003 2004 2003 2004 2003 ---- ---- ---- ---- ---- ---- OPERATIONS: Net investment income (loss) .............. $ (33,348) $ (86,873) $ (1,413) $ (1,191) $ (595) $ -- Realized gain (loss) ...................... -- -- 1,541 (9,404) 92 -- Change in unrealized gain (loss) on investments .......................... -- -- 9,706 45,333 17,537 -- ------------ ------------ ------------ ------------ ------------ ------------ Net increase (decrease) in net assets resulting from operations ............. (33,348) (86,873) 9,834 34,738 17,034 -- ------------ ------------ ------------ ------------ ------------ ------------ UNIT TRANSACTIONS: Participant purchase payments ............. 2,280,148 3,342,976 365 56,365 54,735 -- Participant transfers from other funding options ......................... 2,989,203 11,247,666 7,622 134,856 130,055 -- Administrative and asset allocation charges -- -- -- -- -- -- Contract surrenders ....................... (2,369,442) (3,078,638) (25,161) (9,710) (2,228) -- Participant transfers to other funding options ......................... (6,130,219) (16,050,511) (8,352) (140,454) -- -- Other payments to participants ............ (157,769) (147,739) -- -- -- -- ------------ ------------ ------------ ------------ ------------ ------------ Net increase (decrease) in net assets resulting from unit transactions ...... (3,388,079) (4,686,246) (25,526) 41,057 182,562 -- ------------ ------------ ------------ ------------ ------------ ------------ Net increase (decrease) in net assets ... (3,421,427) (4,773,119) (15,692) 75,795 199,596 -- NET ASSETS: Beginning of year ....................... 17,830,601 22,603,720 245,846 170,051 -- -- ------------ ------------ ------------ ------------ ------------ ------------ End of year ............................. $ 14,409,174 $ 17,830,601 $ 230,154 $ 245,846 $ 199,596 $ -- ============ ============ ============ ============ ============ ============
See Notes to Financial Statements -32- THE TRAVELERS SEPARATE ACCOUNT SIX FOR VARIABLE ANNUITIES STATEMENT OF CHANGES IN NET ASSETS - CONTINUED FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003
CITISTREET CITISTREET GROWTH FUND - GROWTH-INCOME FUND - DIVERSIFIED BOND INTERNATIONAL STOCK CLASS 2 SHARES CLASS 2 SHARES FUND - CLASS I FUND - CLASS I - ---------------------------- ---------------------------- ---------------------------- ---------------------------- 2004 2003 2004 2003 2004 2003 2004 2003 ---- ---- ---- ---- ---- ---- ---- ---- $ (578) $ -- $ 2,093 $ -- $ 1,934,515 $ 2,155,087 $ 63,033 $ (114,282) 341 -- 39 -- 222,629 673,453 (192,093) (2,166,432) 23,716 -- 27,879 -- 807,214 354,496 5,025,312 9,849,643 - ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ 23,479 -- 30,011 -- 2,964,358 3,183,036 4,896,252 7,568,929 - ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ 80,060 -- 229,672 -- 20,396,550 12,302,700 8,098,025 4,198,700 246,158 -- 266,278 -- 6,556,514 3,700,524 973,235 6,829,896 -- -- -- -- (502,316) (425,332) (220,679) (174,016) (2,082) -- (1,144) -- (6,834,462) (5,478,510) (2,715,533) (2,046,865) (11,966) -- (7,229) -- (4,061,902) (9,475,743) (3,390,742) (7,597,345) -- -- -- -- (353,600) (197,548) (177,912) (67,235) - ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ 312,170 -- 487,577 -- 15,200,784 426,091 2,566,394 1,143,135 - ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ 335,649 -- 517,588 -- 18,165,142 3,609,127 7,462,646 8,712,064 -- -- -- -- 75,590,093 71,980,966 33,839,024 25,126,960 - ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ $ 335,649 $ -- $ 517,588 $ -- $ 93,755,235 $ 75,590,093 $ 41,301,670 $ 33,839,024 ============ ============ ============ ============ ============ ============ ============ ============
See Notes to Financial Statements -33- THE TRAVELERS SEPARATE ACCOUNT SIX FOR VARIABLE ANNUITIES STATEMENT OF CHANGES IN NET ASSETS - CONTINUED FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003
CITISTREET CITISTREET CREDIT SUISSE LARGE COMPANY STOCK SMALL COMPANY STOCK TRUST EMERGING FUND - CLASS I FUND - CLASS I MARKETS PORTFOLIO -------------------------- -------------------------- -------------------------- 2004 2003 2004 2003 2004 2003 ---- ---- ---- ---- ---- ---- OPERATIONS: Net investment income (loss) .............. $ (198,927) $ (212,741) $ (336,213) $ (241,407) $ (15,061) $ (14,647) Realized gain (loss) ...................... (194,393) (585,669) 71,849 (361,095) (17,547) (77,052) Change in unrealized gain (loss) on investments .......................... 5,571,536 11,125,809 4,384,978 8,572,157 373,198 517,022 ------------ ------------ ------------ ------------ ------------ ------------ Net increase (decrease) in net assets resulting from operations ............. 5,178,216 10,327,399 4,120,614 7,969,655 340,590 425,323 ------------ ------------ ------------ ------------ ------------ ------------ UNIT TRANSACTIONS: Participant purchase payments ............. 13,007,699 6,542,302 6,025,556 2,837,304 543 16,605 Participant transfers from other funding options ......................... 2,216,889 4,927,965 1,188,922 3,907,767 205,345 112,629 Administrative and asset allocation charges (360,962) (274,016) (164,261) (122,013) -- -- Contract surrenders ....................... (4,188,426) (3,178,956) (2,263,711) (1,758,000) (70,374) (53,267) Participant transfers to other funding options ......................... (2,364,094) (1,548,181) (2,927,691) (1,326,926) (152,982) (93,276) Other payments to participants ............ (282,706) (85,449) (165,960) (34,913) (5,473) -- ------------ ------------ ------------ ------------ ------------ ------------ Net increase (decrease) in net assets resulting from unit transactions ...... 8,028,400 6,383,665 1,692,855 3,503,219 (22,941) (17,309) ------------ ------------ ------------ ------------ ------------ ------------ Net increase (decrease) in net assets ... 13,206,616 16,711,064 5,813,469 11,472,874 317,649 408,014 NET ASSETS: Beginning of year ....................... 51,611,862 34,900,798 28,529,657 17,056,783 1,526,539 1,118,525 ------------ ------------ ------------ ------------ ------------ ------------ End of year ............................. $ 64,818,478 $ 51,611,862 $ 34,343,126 $ 28,529,657 $ 1,844,188 $ 1,526,539 ============ ============ ============ ============ ============ ============
See Notes to Financial Statements -34- THE TRAVELERS SEPARATE ACCOUNT SIX FOR VARIABLE ANNUITIES STATEMENT OF CHANGES IN NET ASSETS - CONTINUED FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003
DELAWARE VIP DELAWARE VIP DREYFUS VIF - DREYFUS VIF- REIT SERIES - SMALL CAP VALUE DEVELOPING LEADERS APPRECIATION PORTFOLIO - STANDARD CLASS SERIES - STANDARD CLASS PORTFOLIO - INITIAL SHARES INITIAL SHARES - ---------------------------- ---------------------------- ---------------------------- ---------------------------- 2004 2003 2004 2003 2004 2003 2004 2003 ---- ---- ---- ---- ---- ---- ---- ---- $ 34,143 $ 40,213 $ (50,267) $ (29,876) $ (115,135) $ (109,161) $ 18,017 $ 8,738 250,361 67,818 243,434 83,337 (174,137) (501,684) (48,158) (170,251) 1,059,727 783,012 755,195 1,176,263 1,371,628 3,077,076 195,569 979,678 - ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ 1,344,231 891,043 948,362 1,229,724 1,082,356 2,466,231 165,428 818,165 - ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ 753,678 433,360 426,304 429,245 587,008 623,124 78,877 301,243 1,155,087 484,507 501,939 698,826 381,343 538,650 43,364 251,884 -- -- -- -- -- -- -- -- (289,576) (258,095) (322,101) (157,513) (485,134) (473,768) (427,867) (320,537) (636,450) (299,430) (383,724) (571,200) (583,288) (592,570) (317,530) (347,284) (5,656) -- (6,303) -- 19,672 (4,849) (160) (50,796) - ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ 977,083 360,342 216,115 399,358 (80,399) 90,587 (623,316) (165,490) - ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ 2,321,314 1,251,385 1,164,477 1,629,082 1,001,957 2,556,818 (457,888) 652,675 3,871,896 2,620,511 4,499,240 2,870,158 10,907,648 8,350,830 4,971,122 4,318,447 - ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ $ 6,193,210 $ 3,871,896 $ 5,663,717 $ 4,499,240 $ 11,909,605 $ 10,907,648 $ 4,513,234 $ 4,971,122 ============ ============ ============ ============ ============ ============ ============ ============
See Notes to Financial Statements -35- THE TRAVELERS SEPARATE ACCOUNT SIX FOR VARIABLE ANNUITIES STATEMENT OF CHANGES IN NET ASSETS - CONTINUED FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003
TEMPLETON MUTUAL SHARES DEVELOPING MARKETS TEMPLETON SECURITIES FUND - SECURITIES FUND - FOREIGN SECURITIES CLASS 2 SHARES CLASS 2 SHARES FUND - CLASS 2 SHARES -------------------------- -------------------------- -------------------------- 2004 2003 2004 2003 2004 2003 ---- ---- ---- ---- ---- ---- OPERATIONS: Net investment income (loss) .............. $ (381) $ (87) $ (298) $ -- $ (580) $ -- Realized gain (loss) ...................... 353 3 434 -- 32 -- Change in unrealized gain (loss) on investments .......................... 10,999 2,771 11,259 -- 21,303 -- ------------ ------------ ------------ ------------ ------------ ------------ Net increase (decrease) in net assets resulting from operations ............. 10,971 2,687 11,395 -- 20,755 -- ------------ ------------ ------------ ------------ ------------ ------------ UNIT TRANSACTIONS: Participant purchase payments ............. 77,783 18,798 31,837 -- 174,116 -- Participant transfers from other funding options ......................... 27,145 8,367 20,419 -- 74,147 -- Administrative and asset allocation charges -- -- -- -- -- -- Contract surrenders ....................... (3,984) -- (450) -- -- -- Participant transfers to other funding options ......................... -- -- (2,094) -- (12,085) -- Other payments to participants ............ -- -- -- -- -- -- ------------ ------------ ------------ ------------ ------------ ------------ Net increase (decrease) in net assets resulting from unit transactions ...... 100,944 27,165 49,712 -- 236,178 -- ------------ ------------ ------------ ------------ ------------ ------------ Net increase (decrease) in net assets ... 111,915 29,852 61,107 -- 256,933 -- NET ASSETS: Beginning of year ....................... 29,852 -- -- -- -- -- ------------ ------------ ------------ ------------ ------------ ------------ End of year ............................. $ 141,767 $ 29,852 $ 61,107 $ -- $ 256,933 $ -- ============ ============ ============ ============ ============ ============
See Notes to Financial Statements -36- THE TRAVELERS SEPARATE ACCOUNT SIX FOR VARIABLE ANNUITIES STATEMENT OF CHANGES IN NET ASSETS - CONTINUED FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003
TEMPLETON EQUITY INDEX GROWTH SECURITIES PORTFOLIO - FUNDAMENTAL VALUE FUND - CLASS 2 SHARES APPRECIATION PORTFOLIO CLASS II SHARES PORTFOLIO - ---------------------------- ---------------------------- ---------------------------- ---------------------------- 2004 2003 2004 2003 2004 2003 2004 2003 ---- ---- ---- ---- ---- ---- ---- ---- $ (1,636) $ -- $ (669) $ (8,547) $ 32,104 $ (28,026) $ (50,972) $ (36,553) 338 -- 22,960 (813) (179,344) (510,854) 311,441 (16,384) 49,872 -- 199,115 446,255 1,894,025 4,517,001 374,610 2,258,558 - ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ 48,574 -- 221,406 436,895 1,746,785 3,978,121 635,079 2,205,621 - ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ 502,618 -- 609,312 495,073 1,913,611 1,964,545 1,077,615 1,087,131 112,540 -- 77,724 380,232 589,900 792,592 350,460 480,875 -- -- -- -- -- -- -- -- (8,435) -- (150,116) (80,778) (1,427,355) (825,344) (482,935) (288,747) -- -- (69,985) (5,874) (1,091,615) (873,613) (192,781) (143,795) -- -- -- -- (62,070) (38,919) (17,820) -- - ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ 606,723 -- 466,935 788,653 (77,529) 1,019,261 734,539 1,135,464 - ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ 655,297 -- 688,341 1,225,548 1,669,256 4,997,382 1,369,618 3,341,085 -- -- 2,640,675 1,415,127 19,501,086 14,503,704 8,710,078 5,368,993 - ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ $ 655,297 $ -- $ 3,329,016 $ 2,640,675 $ 21,170,342 $ 19,501,086 $ 10,079,696 $ 8,710,078 ============ ============ ============ ============ ============ ============ ============ ============
See Notes to Financial Statements -37- THE TRAVELERS SEPARATE ACCOUNT SIX FOR VARIABLE ANNUITIES STATEMENT OF CHANGES IN NET ASSETS - CONTINUED FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003
MID CAP GROWTH WORLDWIDE GROWTH BALANCED PORTFOLIO - PORTFOLIO - PORTFOLIO - SERVICE SHARES SERVICE SHARES SERVICE SHARES -------------------------- -------------------------- -------------------------- 2004 2003 2004 2003 2004 2003 ---- ---- ---- ---- ---- ---- OPERATIONS: Net investment income (loss) .............. $ 16,343 $ 9,600 $ (1,869) $ (793) $ (17,506) $ (19,559) Realized gain (loss) ...................... 16,813 (5,771) 1,032 (869) (336,826) (558,103) Change in unrealized gain (loss) on investments .......................... 80,053 167,084 28,093 19,621 511,632 1,611,027 ------------ ------------ ------------ ------------ ------------ ------------ Net increase (decrease) in net assets resulting from operations ............. 113,209 170,913 27,256 17,959 157,300 1,033,365 ------------ ------------ ------------ ------------ ------------ ------------ UNIT TRANSACTIONS: Participant purchase payments ............. 91,329 211,039 42,044 -- 249,494 392,127 Participant transfers from other funding options ......................... 100,611 171,362 37,356 36,251 67,619 45,638 Administrative and asset allocation charges -- -- -- -- -- -- Contract surrenders ....................... (119,553) (26,229) -- (5,312) (233,197) (304,716) Participant transfers to other funding options ......................... (76,639) (167,895) (16,200) (2,232) (505,908) (461,246) Other payments to participants ............ (18,064) -- -- -- -- (26,610) ------------ ------------ ------------ ------------ ------------ ------------ Net increase (decrease) in net assets resulting from unit transactions ...... (22,316) 188,277 63,200 28,707 (421,992) (354,807) ------------ ------------ ------------ ------------ ------------ ------------ Net increase (decrease) in net assets ... 90,893 359,190 90,456 46,666 (264,692) 678,558 NET ASSETS: Beginning of year ....................... 1,571,964 1,212,774 93,515 46,849 5,615,100 4,936,542 ------------ ------------ ------------ ------------ ------------ ------------ End of year ............................. $ 1,662,857 $ 1,571,964 $ 183,971 $ 93,515 $ 5,350,408 $ 5,615,100 ============ ============ ============ ============ ============ ============
See Notes to Financial Statements -38- THE TRAVELERS SEPARATE ACCOUNT SIX FOR VARIABLE ANNUITIES STATEMENT OF CHANGES IN NET ASSETS - CONTINUED FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003
OPPENHEIMER LAZARD RETIREMENT GROWTH AND INCOME MID-CAP VALUE MAIN STREET FUND/VA - SMALL CAP PORTFOLIO PORTFOLIO PORTFOLIO SERVICE SHARES - ---------------------------- ---------------------------- ---------------------------- ---------------------------- 2004 2003 2004 2003 2004 2003 2004 2003 ---- ---- ---- ---- ---- ---- ---- ---- $ (976) $ -- $ 1,485 $ -- $ (269) $ -- $ (247) $ -- 48 -- 2,436 -- 7,679 -- 7 -- 26,694 -- 24,343 -- 21,897 -- 4,054 -- - ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ 25,766 -- 28,264 -- 29,307 -- 3,814 -- - ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ 92,344 -- 181,541 -- 107,778 -- 63,820 -- 141,650 -- 87,582 -- 193,261 -- 12,704 -- -- -- -- -- -- -- -- -- -- -- -- -- (5,406) -- -- -- -- -- -- -- (69,972) -- -- -- -- -- -- -- -- -- -- -- - ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ 233,994 -- 269,123 -- 225,661 -- 76,524 -- - ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ 259,760 -- 297,387 -- 254,968 -- 80,338 -- -- -- -- -- -- -- -- -- - ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ $ 259,760 $ -- $ 297,387 $ -- $ 254,968 $ -- $ 80,338 $ -- ============ ============ ============ ============ ============ ============ ============ ============
See Notes to Financial Statements -39- THE TRAVELERS SEPARATE ACCOUNT SIX FOR VARIABLE ANNUITIES STATEMENT OF CHANGES IN NET ASSETS - CONTINUED FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003
TOTAL RETURN PUTNAM VT PUTNAM VT PORTFOLIO - DISCOVERY GROWTH FUND - INTERNATIONAL EQUITY ADMINISTRATIVE CLASS CLASS IB SHARES FUND - CLASS IB SHARES -------------------------- -------------------------- -------------------------- 2004 2003 2004 2003 2004 2003 ---- ---- ---- ---- ---- ---- OPERATIONS: Net investment income (loss) .............. $ 45,223 $ 112,774 $ (833) $ (911) $ 2,428 $ (2,619) Realized gain (loss) ...................... 143,981 86,487 920 3,929 25,893 34,695 Change in unrealized gain (loss) on investments .......................... 58,618 38,329 4,114 18,292 97,744 161,955 ------------ ------------ ------------ ------------ ------------ ------------ Net increase (decrease) in net assets resulting from operations ............. 247,822 237,590 4,201 21,310 126,065 194,031 ------------ ------------ ------------ ------------ ------------ ------------ UNIT TRANSACTIONS: Participant purchase payments ............. 623,620 1,854,883 -- 2,979 61,475 91,407 Participant transfers from other funding options ......................... 969,679 1,211,510 -- 14,850 94,897 1,175,589 Administrative and asset allocation charges -- -- -- -- -- -- Contract surrenders ....................... (546,133) (392,686) -- -- (61,209) (23,080) Participant transfers to other funding options ......................... (1,174,857) (1,577,229) (4,695) (29,274) (76,206) (1,138,462) Other payments to participants ............ (51,507) -- -- -- -- -- ------------ ------------ ------------ ------------ ------------ ------------ Net increase (decrease) in net assets resulting from unit transactions ...... (179,198) 1,096,478 (4,695) (11,445) 18,957 105,454 ------------ ------------ ------------ ------------ ------------ ------------ Net increase (decrease) in net assets ... 68,624 1,334,068 (494) 9,865 145,022 299,485 NET ASSETS: Beginning of year ....................... 6,905,875 5,571,807 72,727 62,862 843,337 543,852 ------------ ------------ ------------ ------------ ------------ ------------ End of year ............................. $ 6,974,499 $ 6,905,875 $ 72,233 $ 72,727 $ 988,359 $ 843,337 ============ ============ ============ ============ ============ ============
See Notes to Financial Statements -40- THE TRAVELERS SEPARATE ACCOUNT SIX FOR VARIABLE ANNUITIES STATEMENT OF CHANGES IN NET ASSETS - CONTINUED FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003
PUTNAM VT SMALL CAP VALUE ALL CAP INVESTORS FUND - SMALL CAP GROWTH FUND - CLASS IB SHARES FUND - CLASS I CLASS I FUND - CLASS I - ---------------------------- ---------------------------- ---------------------------- ---------------------------- 2004 2003 2004 2003 2004 2003 2004 2003 ---- ---- ---- ---- ---- ---- ---- ---- $ (35,198) $ (19,956) $ (88,350) $ (95,644) $ 11,096 $ 6,986 $ (6,434) $ (3,234) 79,346 (12,732) 96,286 (125,276) 24,256 (50,241) 5,460 (3,085) 902,513 969,686 884,586 3,462,947 329,594 965,318 64,337 107,788 - ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ 946,661 936,998 892,522 3,242,027 364,946 922,063 63,363 101,469 - ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ 565,060 370,127 1,234,173 878,794 546,077 174,994 78,986 43,165 1,147,713 398,031 763,643 467,688 54,610 175,645 247,096 96,046 -- -- -- -- -- -- -- -- (192,703) (110,644) (591,018) (650,131) (296,378) (280,653) (22,699) (4,080) (226,581) (525,344) (591,328) (292,150) (237,818) (101,374) (126,843) (49,097) 43,345 -- (49,960) (18,499) -- -- -- -- - ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ 1,336,834 132,170 765,510 385,702 66,491 (31,388) 176,540 86,034 - ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ 2,283,495 1,069,168 1,658,032 3,627,729 431,437 890,675 239,903 187,503 2,996,799 1,927,631 12,193,553 8,565,824 3,906,833 3,016,158 386,348 198,845 - ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ $ 5,280,294 $ 2,996,799 $ 13,851,585 $ 12,193,553 $ 4,338,270 $ 3,906,833 $ 626,251 $ 386,348 ============ ============ ============ ============ ============ ============ ============ ============
See Notes to Financial Statements -41- THE TRAVELERS SEPARATE ACCOUNT SIX FOR VARIABLE ANNUITIES STATEMENT OF CHANGES IN NET ASSETS - CONTINUED FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003
SMITH BARNEY SMITH BARNEY PREMIER SELECTIONS TOTAL RETURN DIVIDEND STRATEGY ALL CAP GROWTH FUND - CLASS I PORTFOLIO PORTFOLIO -------------------------- -------------------------- -------------------------- 2004 2003 2004 2003 2004 2003 ---- ---- ---- ---- ---- ---- OPERATIONS: Net investment income (loss) .............. $ 3,454 $ 2,811 $ (455) $ (667) $ (348) $ (196) Realized gain (loss) ...................... 22,070 508 52 (603) 1,142 (1,131) Change in unrealized gain (loss) on investments .......................... 20,022 69,322 6,766 28,276 823 5,204 ------------ ------------ ------------ ------------ ------------ ------------ Net increase (decrease) in net assets resulting from operations ............. 45,546 72,641 6,363 27,006 1,617 3,877 ------------ ------------ ------------ ------------ ------------ ------------ UNIT TRANSACTIONS: Participant purchase payments ............. 95,125 100,505 17,549 98,969 7,672 -- Participant transfers from other funding options ......................... 29,970 45,005 57,096 9,933 29,449 29,054 Administrative and asset allocation charges -- -- -- -- -- -- Contract surrenders ....................... (63,689) (23,887) (654) (5,509) -- -- Participant transfers to other funding options ......................... (77,451) (59,338) (117) -- (21,993) (17,861) Other payments to participants ............ -- -- (12) -- -- -- ------------ ------------ ------------ ------------ ------------ ------------ Net increase (decrease) in net assets resulting from unit transactions ...... (16,045) 62,285 73,862 103,393 15,128 11,193 ------------ ------------ ------------ ------------ ------------ ------------ Net increase (decrease) in net assets ... 29,501 134,926 80,225 130,399 16,745 15,070 NET ASSETS: Beginning of year ....................... 601,079 466,153 214,486 84,087 24,147 9,077 ------------ ------------ ------------ ------------ ------------ ------------ End of year ............................. $ 630,580 $ 601,079 $ 294,711 $ 214,486 $ 40,892 $ 24,147 ============ ============ ============ ============ ============ ============
See Notes to Financial Statements -42- THE TRAVELERS SEPARATE ACCOUNT SIX FOR VARIABLE ANNUITIES STATEMENT OF CHANGES IN NET ASSETS - CONTINUED FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003
STRONG MULTI CAP CONVERTIBLE SECURITIES DISCIPLINED MID CAP EQUITY INCOME VALUE FUND II PORTFOLIO STOCK PORTFOLIO PORTFOLIO - ---------------------------- ---------------------------- ---------------------------- ---------------------------- 2004 2003 2004 2003 2004 2003 2004 2003 ---- ---- ---- ---- ---- ---- ---- ---- $ (8,407) $ (6,614) $ 1,126 $ -- $ (59,581) $ (46,425) $ 27,927 $ (20,731) 16,126 (25,006) 251 -- 312,826 (73,306) 769,964 (16,355) 89,399 214,851 1,137 -- 675,979 1,588,253 406,051 2,737,897 - ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ 97,118 183,231 2,514 -- 929,224 1,468,522 1,203,942 2,700,811 - ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ 6,885 -- 38,587 -- 589,383 618,262 1,768,642 1,614,642 66,523 40,235 64,802 -- 293,626 360,470 1,122,235 1,020,323 -- -- -- -- -- -- -- -- (60,959) (28,417) (393) -- (452,608) (411,550) (652,008) (676,196) (65,588) (80,358) (38,805) -- (464,411) (447,652) (820,060) (593,224) (20,064) -- -- -- -- -- (34,133) (57,508) - ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ (73,203) (68,540) 64,191 -- (34,010) 119,530 1,384,676 1,308,037 - ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ 23,915 114,691 66,705 -- 895,214 1,588,052 2,588,618 4,008,848 683,510 568,819 -- -- 6,128,890 4,540,838 12,493,102 8,484,254 - ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ $ 707,425 $ 683,510 $ 66,705 $ -- $ 7,024,104 $ 6,128,890 $ 15,081,720 $ 12,493,102 ============ ============ ============ ============ ============ ============ ============ ============
See Notes to Financial Statements -43- THE TRAVELERS SEPARATE ACCOUNT SIX FOR VARIABLE ANNUITIES STATEMENT OF CHANGES IN NET ASSETS - CONTINUED FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003
FEDERATED STOCK LARGE CAP LAZARD INTERNATIONAL PORTFOLIO PORTFOLIO STOCK PORTFOLIO -------------------------- -------------------------- -------------------------- 2004 2003 2004 2003 2004 2003 ---- ---- ---- ---- ---- ---- OPERATIONS: Net investment income (loss) .............. $ 2,232 $ 3,329 $ (31,251) $ (54,798) $ 7,086 $ 4,921 Realized gain (loss) ...................... 4,065 (13,285) (258,372) (454,095) 12,768 1,694 Change in unrealized gain (loss) on investments .......................... 108,911 292,108 659,927 1,918,749 138,677 137,403 ------------ ------------ ------------ ------------ ------------ ------------ Net increase (decrease) in net assets resulting from operations ............. 115,208 282,152 370,304 1,409,856 158,531 144,018 ------------ ------------ ------------ ------------ ------------ ------------ UNIT TRANSACTIONS: Participant purchase payments ............. 3,627 3,175 149,968 434,089 182,285 65,679 Participant transfers from other funding options ......................... 34,825 75,125 326,118 196,481 393,122 94,038 Administrative and asset allocation charges -- -- -- -- -- -- Contract surrenders ....................... (101,716) (23,102) (390,324) (480,663) (59,280) (38,043) Participant transfers to other funding options ......................... (71,710) (73,414) (388,211) (282,247) (57,945) (5,668) Other payments to participants ............ -- -- -- (31,762) (64) (57) ------------ ------------ ------------ ------------ ------------ ------------ Net increase (decrease) in net assets resulting from unit transactions ...... (134,974) (18,216) (302,449) (164,102) 458,118 115,949 ------------ ------------ ------------ ------------ ------------ ------------ Net increase (decrease) in net assets ... (19,766) 263,936 67,855 1,245,754 616,649 259,967 NET ASSETS: Beginning of year ....................... 1,358,906 1,094,970 7,372,360 6,126,606 727,155 467,188 ------------ ------------ ------------ ------------ ------------ ------------ End of year ............................. $ 1,339,140 $ 1,358,906 $ 7,440,215 $ 7,372,360 $ 1,343,804 $ 727,155 ============ ============ ============ ============ ============ ============
See Notes to Financial Statements -44- THE TRAVELERS SEPARATE ACCOUNT SIX FOR VARIABLE ANNUITIES STATEMENT OF CHANGES IN NET ASSETS - CONTINUED FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003
MERRILL LYNCH LARGE CAP CORE MFS EMERGING MFS MID CAP MFS VALUE PORTFOLIO GROWTH PORTFOLIO GROWTH PORTFOLIO PORTFOLIO - ---------------------------- ---------------------------- ---------------------------- ---------------------------- 2004 2003 2004 2003 2004 2003 2004 2003 ---- ---- ---- ---- ---- ---- ---- ---- $ (4,912) $ (3,279) $ (252) $ (249) $ (51,759) $ (45,562) $ 2,390 $ -- (72,353) (49,227) (311) (43) (747,667) (1,025,297) 2,925 -- 178,132 167,456 2,394 5,145 1,316,699 2,197,716 12,295 -- - ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ 100,867 114,950 1,831 4,853 517,273 1,126,857 17,610 -- - ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ 8,543 19,592 25,694 -- 124,095 178,080 138,796 -- 136,042 53,929 3,322 -- 284,434 493,656 131,168 -- -- -- -- -- -- -- -- -- (34,377) (27,636) (8,518) -- (293,561) (150,748) (1,410) -- (116,317) (31,545) (123) -- (566,235) (583,047) (10,975) -- -- -- -- -- (7,592) (11,671) -- -- - ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ (6,109) 14,340 20,375 -- (458,859) (73,730) 257,579 -- - ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ 94,758 129,290 22,206 4,853 58,414 1,053,127 275,189 -- 718,284 588,994 22,470 17,617 4,360,384 3,307,257 -- -- - ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ $ 813,042 $ 718,284 $ 44,676 $ 22,470 $ 4,418,798 $ 4,360,384 $ 275,189 $ -- ============ ============ ============ ============ ============ ============ ============ ============
See Notes to Financial Statements -45- THE TRAVELERS SEPARATE ACCOUNT SIX FOR VARIABLE ANNUITIES STATEMENT OF CHANGES IN NET ASSETS - CONTINUED FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003
PIONEER FUND SOCIAL AWARENESS TRAVELERS QUALITY PORTFOLIO STOCK PORTFOLIO BOND PORTFOLIO -------------------------- -------------------------- -------------------------- 2004 2003 2004 2003 2004 2003 ---- ---- ---- ---- ---- ---- OPERATIONS: Net investment income (loss) .............. $ (6,396) $ 3,582 $ (17,135) $ (21,351) $ 286,614 $ 332,018 Realized gain (loss) ...................... (134,018) (205,026) (77,776) (136,915) 4,554 58,243 Change in unrealized gain (loss) on investments .......................... 304,607 563,175 270,090 953,316 (119,842) 94,486 ------------ ------------ ------------ ------------ ------------ ------------ Net increase (decrease) in net assets resulting from operations ............. 164,193 361,731 175,179 795,050 171,326 484,747 ------------ ------------ ------------ ------------ ------------ ------------ UNIT TRANSACTIONS: Participant purchase payments ............. 28,755 37,284 310,570 222,041 917,241 1,531,285 Participant transfers from other funding options ......................... 3,465 16,748 22,263 49,628 451,673 1,248,323 Administrative and asset allocation charges -- -- -- -- -- -- Contract surrenders ....................... (152,316) (136,500) (236,268) (98,193) (871,670) (786,090) Participant transfers to other funding options ......................... (129,170) (106,271) (244,713) (246,755) (1,506,201) (1,394,415) Other payments to participants ............ (11,832) (34,393) (13,376) -- (12,729) (1,816) ------------ ------------ ------------ ------------ ------------ ------------ Net increase (decrease) in net assets resulting from unit transactions ...... (261,098) (223,132) (161,524) (73,279) (1,021,686) 597,287 ------------ ------------ ------------ ------------ ------------ ------------ Net increase (decrease) in net assets ... (96,905) 138,599 13,655 721,771 (850,360) 1,082,034 NET ASSETS: Beginning of year ....................... 1,921,585 1,782,986 3,699,602 2,977,831 9,223,810 8,141,776 ------------ ------------ ------------ ------------ ------------ ------------ End of year ............................. $ 1,824,680 $ 1,921,585 $ 3,713,257 $ 3,699,602 $ 8,373,450 $ 9,223,810 ============ ============ ============ ============ ============ ============
See Notes to Financial Statements -46- THE TRAVELERS SEPARATE ACCOUNT SIX FOR VARIABLE ANNUITIES STATEMENT OF CHANGES IN NET ASSETS - CONTINUED FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003
U.S. GOVERNMENT AIM CAPITAL MFS TOTAL RETURN PIONEER STRATEGIC SECURITIES PORTFOLIO APPRECIATION PORTFOLIO PORTFOLIO INCOME PORTFOLIO - ---------------------------- ---------------------------- ---------------------------- ---------------------------- 2004 2003 2004 2003 2004 2003 2004 2003 ---- ---- ---- ---- ---- ---- ---- ---- $ 455,569 $ 659,041 $ (7,437) $ (7,100) $ 290,137 $ 167,815 $ 68,258 $ 81,062 18,899 436,954 13,389 20,316 555,175 (141,051) (4,351) (26,639) 273,381 (837,442) 28,254 128,983 912,965 2,054,221 43,267 110,505 - ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ 747,849 258,553 34,206 142,199 1,758,277 2,080,985 107,174 164,928 - ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ 851,703 3,307,866 77,563 12,283 2,093,726 1,860,935 54,226 67,502 311,541 1,734,107 53,968 211,762 1,440,987 1,328,467 117,292 337,320 -- -- -- -- -- -- -- -- (1,495,953) (1,247,188) (14,355) (38,718) (1,293,201) (948,485) (23,682) (39,048) (3,087,983) (4,682,865) (72,868) (198,366) (555,783) (869,766) (75,489) (283,973) (40,607) (31,442) (10,605) (3,616) (74,156) (2,934) (22,405) (4,090) - ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ (3,461,299) (919,522) 33,703 (16,655) 1,611,573 1,368,217 49,942 77,711 - ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ (2,713,450) (660,969) 67,909 125,544 3,369,850 3,449,202 157,116 242,639 17,558,714 18,219,683 669,160 543,616 16,189,772 12,740,570 1,092,612 849,973 - ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ $ 14,845,264 $ 17,558,714 $ 737,069 $ 669,160 $ 19,559,622 $ 16,189,772 $ 1,249,728 $ 1,092,612 ============ ============ ============ ============ ============ ============ ============ ============
See Notes to Financial Statements -47- THE TRAVELERS SEPARATE ACCOUNT SIX FOR VARIABLE ANNUITIES STATEMENT OF CHANGES IN NET ASSETS - CONTINUED FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003
SB ADJUSTABLE RATE SMITH BARNEY SMITH BARNEY INCOME PORTFOLIO - AGGRESSIVE GROWTH HIGH INCOME CLASS I SHARES PORTFOLIO PORTFOLIO -------------------------- -------------------------- -------------------------- 2004 2003 2004 2003 2004 2003 ---- ---- ---- ---- ---- ---- OPERATIONS: Net investment income (loss) .............. $ 639 $ 12 $ (123,920) $ (77,921) $ 76,371 $ 58,096 Realized gain (loss) ...................... 340 -- 90,698 (54,152) 1,589 (18,720) Change in unrealized gain (loss) on investments .......................... (1,063) (24) 905,015 1,947,431 16,598 109,116 ------------ ------------ ------------ ------------ ------------ ------------ Net increase (decrease) in net assets resulting from operations ............. (84) (12) 871,793 1,815,358 94,558 148,492 ------------ ------------ ------------ ------------ ------------ ------------ UNIT TRANSACTIONS: Participant purchase payments ............. 288,560 30,208 2,143,675 1,635,304 58,239 135,537 Participant transfers from other funding options ......................... 96,919 22,455 878,754 1,415,376 140,696 545,429 Administrative and asset allocation charges -- -- -- -- -- -- Contract surrenders ....................... (15,715) (161) (443,124) (261,750) (40,510) (78,844) Participant transfers to other funding options ......................... (60,234) (27,921) (642,759) (413,623) (85,620) (129,947) Other payments to participants ............ -- -- 14,097 -- (13,435) -- ------------ ------------ ------------ ------------ ------------ ------------ Net increase (decrease) in net assets resulting from unit transactions ...... 309,530 24,581 1,950,643 2,375,307 59,370 472,175 ------------ ------------ ------------ ------------ ------------ ------------ Net increase (decrease) in net assets ... 309,446 24,569 2,822,436 4,190,665 153,928 620,667 NET ASSETS: Beginning of year ....................... 24,569 -- 8,816,555 4,625,890 965,129 344,462 ------------ ------------ ------------ ------------ ------------ ------------ End of year ............................. $ 334,015 $ 24,569 $ 11,638,991 $ 8,816,555 $ 1,119,057 $ 965,129 ============ ============ ============ ============ ============ ============
See Notes to Financial Statements -48- THE TRAVELERS SEPARATE ACCOUNT SIX FOR VARIABLE ANNUITIES STATEMENT OF CHANGES IN NET ASSETS - CONTINUED FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003
SMITH BARNEY SMITH BARNEY INTERNATIONAL ALL CAP LARGE CAPITALIZATION STRATEGIC EQUITY COMSTOCK PORTFOLIO - GROWTH PORTFOLIO GROWTH PORTFOLIO PORTFOLIO CLASS II SHARES - ---------------------------- ---------------------------- ---------------------------- ---------------------------- 2004 2003 2004 2003 2004 2003 2004 2003 ---- ---- ---- ---- ---- ---- ---- ---- $ (6,226) $ (3,387) $ (71,529) $ (68,394) $ 16,795 $ (114,680) $ (2,253) $ (132) (31,255) (662,752) (38,307) (158,812) (868,035) (1,120,688) 1,943 37 363,817 1,110,926 9,538 2,376,223 1,713,467 3,784,552 45,346 5,951 - ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ 326,336 444,787 (100,298) 2,149,017 862,227 2,549,184 45,036 5,856 - ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ 95,003 23,645 1,028,913 1,030,078 292,953 135,810 95,148 55,821 12,717 1,077,040 803,854 1,134,903 85,627 187,261 369,609 14,327 -- -- -- -- -- -- -- -- (109,899) (70,279) (497,460) (459,393) (557,639) (500,829) (4,614) (1,867) (169,156) (1,189,184) (743,350) (251,838) (796,596) (430,875) (83,839) -- (3,358) -- (755) (71,741) (56,134) (45,291) -- -- - ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ (174,693) (158,778) 591,202 1,382,009 (1,031,789) (653,924) 376,304 68,281 - ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ 151,643 286,009 490,904 3,531,026 (169,562) 1,895,260 421,340 74,137 2,078,547 1,792,538 7,913,532 4,382,506 10,623,728 8,728,468 74,137 -- - ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ $ 2,230,190 $ 2,078,547 $ 8,404,436 $ 7,913,532 $ 10,454,166 $ 10,623,728 $ 495,477 $ 74,137 ============ ============ ============ ============ ============ ============ ============ ============
See Notes to Financial Statements -49- THE TRAVELERS SEPARATE ACCOUNT SIX FOR VARIABLE ANNUITIES STATEMENT OF CHANGES IN NET ASSETS - CONTINUED FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003
EMERGING GROWTH SMITH BARNEY PORTFOLIO - ENTERPRISE PORTFOLIO - SMALL CAP GROWTH CLASS II SHARES CLASS II SHARES OPPORTUNITIES PORTFOLIO -------------------------- -------------------------- -------------------------- 2004 2003 2004 2003 2004 2003 ---- ---- ---- ---- ---- ---- OPERATIONS: Net investment income (loss) .............. $ (1,349) $ (1,156) $ (489) $ (186) $ (3,150) $ (1,308) Realized gain (loss) ...................... 728 (12,444) 10 (22) 18,467 (3,410) Change in unrealized gain (loss) on investments .......................... 7,774 34,992 1,599 4,247 21,432 41,775 ------------ ------------ ------------ ------------ ------------ ------------ Net increase (decrease) in net assets resulting from operations ............. 7,153 21,392 1,120 4,039 36,749 37,057 ------------ ------------ ------------ ------------ ------------ ------------ UNIT TRANSACTIONS: Participant purchase payments ............. 14,586 -- -- -- 105,528 31,523 Participant transfers from other funding options ......................... 4,040 48,935 -- 32,624 114,547 91,902 Administrative and asset allocation charges -- -- -- -- -- -- Contract surrenders ....................... (6,723) (40,719) -- -- (21,849) (2,503) Participant transfers to other funding options ......................... (113) (32,007) (117) -- (103,155) (63,431) Other payments to participants ............ -- -- -- -- -- -- ------------ ------------ ------------ ------------ ------------ ------------ Net increase (decrease) in net assets resulting from unit transactions ...... 11,790 (23,791) (117) 32,624 95,071 57,491 ------------ ------------ ------------ ------------ ------------ ------------ Net increase (decrease) in net assets ... 18,943 (2,399) 1,003 36,663 131,820 94,548 NET ASSETS: Beginning of year ....................... 99,067 101,466 44,930 8,267 174,158 79,610 ------------ ------------ ------------ ------------ ------------ ------------ End of year ............................. $ 118,010 $ 99,067 $ 45,933 $ 44,930 $ 305,978 $ 174,158 ============ ============ ============ ============ ============ ============
See Notes to Financial Statements -50- THE TRAVELERS SEPARATE ACCOUNT SIX FOR VARIABLE ANNUITIES STATEMENT OF CHANGES IN NET ASSETS - CONTINUED FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003
ASSET MANAGER DYNAMIC CAPITAL PORTFOLIO - CONTRAFUND(R) PORTFOLIO - APPRECIATION PORTFOLIO - MID CAP PORTFOLIO - SERVICE CLASS 2 SERVICE CLASS 2 SERVICE CLASS 2 SERVICE CLASS 2 - ---------------------------- ---------------------------- ---------------------------- ---------------------------- 2004 2003 2004 2003 2004 2003 2004 2003 ---- ---- ---- ---- ---- ---- ---- ---- $ 50,232 $ 70,024 $ (28,954) $ (13,407) $ (2,312) $ (1,505) $ (36,152) $ (15,081) 5,929 (29,834) 27,295 13,012 (992) 5,667 66,208 5,279 123,159 502,892 427,159 373,986 (7,441) 25,738 673,426 540,630 - ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ 179,320 543,082 425,500 373,591 (10,745) 29,900 703,482 530,828 - ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ 859,268 727,794 942,143 362,418 49,645 34,576 628,682 113,311 99,147 138,112 866,946 337,071 60,306 60,981 1,166,926 429,133 -- -- -- -- -- -- -- -- (240,934) (230,283) (77,495) (178,774) (11,698) (4,739) (122,902) (36,822) (147,652) (178,061) (121,721) (116,917) (74,200) (70,992) (319,970) (95,195) -- -- -- -- -- -- (6,245) -- - ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ 569,829 457,562 1,609,873 403,798 24,053 19,826 1,346,491 410,427 - ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ 749,149 1,000,644 2,035,373 777,389 13,308 49,726 2,049,973 941,255 4,057,155 3,056,511 1,917,439 1,140,050 159,479 109,753 2,106,899 1,165,644 - ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ $ 4,806,304 $ 4,057,155 $ 3,952,812 $ 1,917,439 $ 172,787 $ 159,479 $ 4,156,872 $ 2,106,899 ============ ============ ============ ============ ============ ============ ============ ============
See Notes to Financial Statements -51- THE TRAVELERS SEPARATE ACCOUNT SIX FOR VARIABLE ANNUITIES STATEMENT OF CHANGES IN NET ASSETS - CONTINUED FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003 COMBINED ----------------------------- 2004 2003 ---- ---- OPERATIONS: Net investment income (loss) .............. $ 2,599,614 $ 2,761,267 Realized gain (loss) ...................... (411,407) (9,582,397) Change in unrealized gain (loss) on investments .......................... 39,114,265 82,855,769 ------------ ------------ Net increase (decrease) in net assets resulting from operations ............. 41,302,472 76,034,639 ------------ ------------ UNIT TRANSACTIONS: Participant purchase payments ............. 77,985,993 56,350,401 Participant transfers from other funding options ......................... 34,176,744 54,392,798 Administrative and asset allocation charges (1,248,218) (995,377) Contract surrenders ....................... (35,030,005) (28,962,703) Participant transfers to other funding options ......................... (39,674,150) (59,476,948) Other payments to participants ............ (1,721,296) (1,140,964) ------------ ------------ Net increase (decrease) in net assets resulting from unit transactions ...... 34,489,068 20,167,207 ------------ ------------ Net increase (decrease) in net assets ... 75,791,540 96,201,846 NET ASSETS: Beginning of year ....................... 462,967,366 366,765,520 ------------ ------------ End of year ............................. $538,758,906 $462,967,366 ============ ============ See Notes to Financial Statements -52- NOTES TO FINANCIAL STATEMENTS 1. SIGNIFICANT ACCOUNTING POLICIES The Travelers Separate Account Six for Variable Annuities ("Separate Account Six") is a separate account of The Travelers Life and Annuity Company ("The Company"), an indirect wholly owned subsidiary of Citigroup Inc., and is available for funding certain variable annuity contracts issued by The Company. Separate Account Six is registered under the Investment Company Act of 1940, as amended, as a unit investment trust. Separate Account Six is comprised of the Travelers Retirement Account Annuity product. Participant purchase payments applied to Separate Account Six are invested in one or more sub-accounts in accordance with the selection made by the contract owner. As of December 31, 2004, the investments comprising Separate Account Six were: Capital Appreciation Fund, Massachusetts business trust, Affiliate of The Company High Yield Bond Trust, Massachusetts business trust, Affiliate of The Company Managed Assets Trust, Massachusetts business trust, Affiliate of The Company Money Market Portfolio, Massachusetts business trust, Affiliate of The Company AIM Variable Insurance Funds, Inc., Delaware business trust AIM V.I. Premier Equity Fund - Series I ** American Funds Insurance Series, Massachusetts business trust Global Growth Fund - Class 2 Shares Growth Fund - Class 2 Shares Growth-Income Fund - Class 2 Shares CitiStreet Funds, Inc., Massachusetts business trust, Affiliate of The Company CitiStreet Diversified Bond Fund - Class I CitiStreet International Stock Fund - Class I CitiStreet Large Company Stock Fund - Class I CitiStreet Small Company Stock Fund - Class I Credit Suisse Trust, Massachusetts business trust Credit Suisse Trust Emerging Markets Portfolio Delaware VIP Trust, Maryland business trust Delaware VIP REIT Series - Standard Class Delaware VIP Small Cap Value Series - Standard Class Dreyfus Variable Investment Fund, Maryland business trust Dreyfus Variable Investment Fund - Appreciation Portfolio - Initial Shares Dreyfus Variable Investment Fund - Developing Leaders Portfolio - Initial Shares Franklin Templeton Variable Insurance Products Trust, Massachusetts business trust Mutual Shares Securities Fund - Class 2 Shares Templeton Developing Markets Securities Fund - Class 2 Shares Templeton Foreign Securities Fund - Class 2 Shares Templeton Growth Securities Fund - Class 2 Shares Greenwich Street Series Fund, Massachusetts business trust, Affiliate of The Company Appreciation Portfolio Equity Index Portfolio - Class II Shares Fundamental Value Portfolio Janus Aspen Series, Delaware business trust Balanced Portfolio - Service Shares Mid Cap Growth Portfolio - Service Shares Worldwide Growth Portfolio - Service Shares Lazard Retirement Series, Inc., Massachusetts business trust Lazard Retirement Small Cap Portfolio Lord Abbett Series Fund, Inc., Maryland business trust Growth and Income Portfolio Mid-Cap Value Portfolio Oppenheimer Variable Account Funds, Massachusetts business trust Oppenheimer Main Street Fund/VA - Service Shares PIMCO Variable Insurance Trust, Massachusetts business trust Total Return Portfolio - Administrative Class -53- NOTES TO FINANCIAL STATEMENTS - CONTINUED 1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Putnam Variable Trust, Massachusetts business trust Putnam VT Discovery Growth Fund - Class IB Shares Putnam VT International Equity Fund - Class IB Shares Putnam VT Small Cap Value Fund - Class IB Shares Salomon Brothers Variable Series Funds Inc., Maryland business trust, Affiliate of The Company All Cap Fund - Class I Investors Fund - Class I Small Cap Growth Fund - Class I Total Return Fund - Class I Smith Barney Investment Series, Massachusetts business trust, Affiliate of The Company Smith Barney Dividend Strategy Portfolio (Formerly Smith Barney Large Cap Core Portfolio) Smith Barney Premier Selections All Cap Growth Portfolio Strong Variable Insurance Funds, Inc., Wisconsin business trust Strong Multi Cap Value Fund II The Travelers Series Trust, Massachusetts business trust, Affiliate of The Company Convertible Securities Portfolio Disciplined Mid Cap Stock Portfolio Equity Income Portfolio Federated Stock Portfolio Large Cap Portfolio Lazard International Stock Portfolio Merrill Lynch Large Cap Core Portfolio MFS Emerging Growth Portfolio MFS Mid Cap Growth Portfolio MFS Value Portfolio Pioneer Fund Portfolio Social Awareness Stock Portfolio Travelers Quality Bond Portfolio U.S. Government Securities Portfolio Travelers Series Fund Inc., Maryland business trust, Affiliate of The Company AIM Capital Appreciation Portfolio MFS Total Return Portfolio Pioneer Strategic Income Portfolio SB Adjustable Rate Income Portfolio - Class I Shares Smith Barney Aggressive Growth Portfolio Smith Barney High Income Portfolio Smith Barney International All Cap Growth Portfolio Smith Barney Large Capitalization Growth Portfolio Strategic Equity Portfolio Van Kampen Life Investment Trust, Delaware business trust Comstock Portfolio - Class II Shares Emerging Growth Portfolio - Class II Shares Enterprise Portfolio - Class II Shares Variable Annuity Portfolios, Massachusetts business trust Smith Barney Small Cap Growth Opportunities Portfolio Variable Insurance Products Fund II, Massachusetts business trust Asset Manager Portfolio - Service Class 2 Contrafund(R) Portfolio - Service Class 2 Variable Insurance Products Fund III, Massachusetts business trust Dynamic Capital Appreciation Portfolio - Service Class 2 Mid Cap Portfolio - Service Class 2 ** AIM Variable Insurance Funds, Inc: AIM V.I. Premier Equity Fund - Series I is no longer available to new contract owners -54- NOTES TO FINANCIAL STATEMENTS - CONTINUED 1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 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 Six 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. Income from dividends and realized gain (loss) distributions, are recorded on the ex-distribution date. FEDERAL INCOME TAXES. The operations of Separate Account Six form a part of the total operations of The Company and are not taxed separately. The Company 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 Six. Separate Account Six is not taxed as a "regulated investment company" under Subchapter M of the Code. FINANCIAL HIGHLIGHTS. In 2001, Separate Account Six adopted the financial highlights disclosure recommended by the American Institute of Certified Public Accountants Audit Guide for Investment Companies ("AICPA Guide"). The AICPA Guide allows for the prospective application of this disclosure, which will ultimately display a five year period. It is comprised of the units, unit values, investment income ratio, expense ratios and total returns for each sub-account. Since each sub-account offers multiple contract charges, certain information is provided in the form of a range. The range information may reflect varying time periods if assets did not exist with all contract charge options of the sub-account for the entire year. OTHER. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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. 2. INVESTMENTS The aggregate costs of purchases and proceeds from sales of investments were $95,107,349 and $55,926,444 respectively, for the year ended December 31, 2004. Realized gains and losses from investment transactions are reported on an average cost basis. The cost of investments in eligible funds was $527,368,269 at December 31, 2004. Gross unrealized appreciation for all investments at December 31, 2004 was $30,170,692. Gross unrealized depreciation for all investments at December 31, 2004 was $18,792,711. 3. CONTRACT CHARGES The asset-based charges listed below are deducted, as appropriate, each business day and are assessed through the calculation of accumulation and annuity unit values; - Mortality and Expense Risks assumed by The Company (M&E) - Floor Benefit (FL) Below is a table displaying separate account charges with their associated products offered in this Separate Account for each funding option. The table displays Standard (S) and Optional (O) Death Benefit (Dth Ben) designations. -55- NOTES TO FINANCIAL STATEMENTS - CONTINUED 3. CONTRACT CHARGES (CONTINUED)
- ------------------------------------------------------------------------------------------------------------------------------------ SEPARATE ACCOUNT SIX - ------------------------------------------------------------------------------------------------------------------------------------ Asset-based Charges Separate Account Charge (1) Dth ------------------------------------ (as identified in Note 6) Ben Product M&E FL (2) Total - ------------------------------------------------------------------------------------------------------------------------------------ Separate Account Charge 0.80% 3% AIR S Travelers Retirement Account 0.80% 0.80% Separate Account Charge 0.80% 5% AIR S Travelers Retirement Account 0.80% 0.80% Separate Account Charge 0.80% 0.25% FL (3) S Travelers Retirement Account 0.80% 0.25% 1.05% Separate Account Charge 0.80% 0.43% FL (3) S Travelers Retirement Account 0.80% 0.43% 1.23% Separate Account Charge 0.80% 0.43% FL Separate Account Charge 0.80% 0.62% FL (4) S Travelers Retirement Account 0.80% 0.62% 1.42% Separate Account Charge 0.80% 1.10% FL (4) S Travelers Retirement Account 0.80% 1.10% 1.90% Separate Account Charge 1.25% 3% AIR O Travelers Retirement Account 1.25% 1.25% Separate Account Charge 1.25% 5% AIR O Travelers Retirement Account 1.25% 1.25% Separate Account Charge 1.25% 0.33% FL (3) O Travelers Retirement Account 1.25% 0.33% 1.58% Separate Account Charge 1.25% 0.53% FL (3) O Travelers Retirement Account 1.25% 0.53% 1.78% Separate Account Charge 1.25% 0.83% FL (4) O Travelers Retirement Account 1.25% 0.83% 2.08% Separate Account Charge 1.25% 1.40% FL (4) O Travelers Retirement Account 1.25% 1.40% 2.65% - ------------------------------------------------------------------------------------------------------------------------------------
(1) Certain accumulation and annuity unit values displayed in Note 6 may not be available through certain sub-accounts. If a unit value has no assets and units across all sub-accounts within the Separate Account, it will not be displayed in Note 6. (2) This charge applies in the annuitization phase when the floor benefit has been selected. (3) Applies to the Travelers Quality Bond Portfolio and the U.S. Government Securities Portfolio. (4) Applies to the Equity Index Portfolio - Class II Shares. No sales charges are deducted from participant purchase payments when they are received. However, The Company assesses a withdrawal charge if a participant's purchase payment is surrendered within five years of its payment date. The maximum charge, applied to the amount withdrawn, is 5% decreasing to 0% in years six and later and assessed through the redemption of units. Withdrawal/surrender charges assessed were $407,894 and $472,610 for the years ended December 31,2004 and 2003 respectively. These charges are included in contract surrenders and other payments on the Statement of Changes in Net Assets. If the Variable Annuitization Floor Benefit is selected, a charge is assessed through the redemption of units upon election of this benefit. This charge compensates The Company for guaranteeing a minimum variable annuity payment regardless of the performance of the variable funding option. The charge will vary based upon market conditions, but will not exceed 3% annually. It will be set at the time of election and remain level throughout the term of annuitization. If the Liquidity Benefit is selected, there is a surrender charge of 5% of the amount withdrawn assessed through the redemption of units, -56- NOTES TO FINANCIAL STATEMENTS - CONTINUED 3. CONTRACT CHARGES (CONTINUED) Participants in CitiStreet Funds Inc. (the Funds), may elect to enter into a separate asset allocation advisory agreement with CitiStreet Financial Services, LLC (CitiStreet), an afflilate of The Company. Under this arrangement, CitiStreet provides asset allocation advice and charges participants an annual fee, plus a one-time set-up fee of $30. The annual fee, which decreases as the participant's assets increase, is equivalent to an amount of up to 0.80% of the participant's assets in the Funds. These fees totaled $1,248,239 and $995,382 for the years ended December 31, 2004 and 2003 respectively. For a full explanation of product charges and associated product features and benefits please refer to your product prospectus. 4. OTHER If the Optional Death Benefit and Credit is selected, The Company will add a credit to the contract with each purchase payment. Each credit is added to the contract value when the applicable purchase payment is applied and will equal 2% of each purchase payment. These credits are applied pro rata to the same funding option(s) to which the purchase payment was applied. An additional annuitization credit is applied to a contract value once an annuity option is purchased. This credit equals 0.5% of the contract value if annuitized during contract years 2-5, 1% during contract years 6-10 and 2% after contract year 10. There is no credit applied to contracts held less than one year. 5. SUBSEQUENT EVENT NOTE On January 31, 2005, Citigroup Inc. ("Citigroup") announced that it had agreed to sell The Travelers Insurance Company ("TIC"), The Travelers Life and Annuity Company, Citicorp Life Insurance Company, First Citicorp Life Insurance Company, Citicorp International Life Insurance Company, The Travelers Life and Annuity Reinsurance Company, and certain other domestic and international insurance businesses (the "Life Insurance and Annuity Businesses") to MetLife, Inc. ("MetLife") pursuant to an Acquisition Agreement (the "Agreement"). The transaction is subject to certain regulatory approvals, as well as other customary conditions to closing. Citigroup currently anticipates that the intended sale would be closed this summer. The transaction contemplates that TIC's Primerica Life segment and certain other assets will remain with Citigroup. Accordingly, prior to the closing, TIC will distribute to its parent company by way of dividend (i) all of the outstanding shares of common stock of the Company's 100% owned subsidiary, Primerica Life Insurance Company ("Primerica Life"), (ii) all shares of Citigroup's Series YYY and Series YY preferred stock held by the Company and (iii) certain other assets, including certain assets and liabilities related to the Company's share of the non-qualified pension plan, and post retirement benefits related to inactive employees of the former Travelers Insurance entities, assumed during Citigroup's 2002 spin-off of the Travelers Property Casualty operations (collectively, the "Dispositions"). The Dispositions require certain regulatory approvals. Subject to closing adjustments described in the Agreement, the contemplated sale price would be $11.5 billion. In connection with the consummation of the sale of the Life Insurance and Annuity Business, Citigroup and MetLife will also enter into multi-year distribution agreements. -57- NOTES TO FINANCIAL STATEMENTS - CONTINUED 6. NET CONTRACT OWNERS' EQUITY
DECEMBER 31, 2004 ----------------------------------------------------------------------------- ACCUMULATION ANNUITY UNIT ACCUMULATION ANNUITY UNITS UNITS VALUE NET ASSETS NET ASSETS ------------ -------- ------- ------------ ---------- Capital Appreciation Fund Separate Account Charges 0.80% 3% AIR ......... 1,555,826 -- $ 0.597 $ 928,500 $ -- Separate Account Charges 1.25% 3% AIR ......... 20,166,601 -- 0.584 11,784,741 -- Separate Account Charges 1.25% 5% AIR ......... -- -- 0.584 -- -- High Yield Bond Trust Separate Account Charges 0.80% 3% AIR ......... 365,592 2,833 1.530 559,330 4,335 Separate Account Charges 1.25% 3% AIR ......... 5,133,946 -- 1.491 7,657,228 -- Separate Account Charges 1.25% 5% AIR ......... -- 16,956 1.491 -- 25,289 Managed Assets Trust Separate Account Charges 0.80% 3% AIR ......... 946,294 -- 1.206 1,141,705 -- Separate Account Charges 1.25% 3% AIR ......... 19,246,462 20,478 1.176 22,624,644 24,073 Separate Account Charges 1.25% 5% AIR ......... -- -- 1.176 -- -- Money Market Portfolio Separate Account Charges 0.80% 3% AIR ......... 1,106,052 -- 1.127 1,247,138 -- Separate Account Charges 1.25% 3% AIR ......... 11,972,099 -- 1.099 13,154,680 -- Separate Account Charges 1.25% 5% AIR ......... -- 6,695 1.099 -- 7,356 AIM Variable Insurance Funds, Inc. AIM V.I. Premier Equity Fund - Series I Separate Account Charges 0.80% 3% AIR ......... 103,702 -- 0.800 82,989 -- Separate Account Charges 1.25% 3% AIR ......... 186,960 -- 0.787 147,165 -- Separate Account Charges 1.25% 5% AIR ......... -- -- 0.787 -- -- American Funds Insurance Series Global Growth Fund - Class 2 Shares Separate Account Charges 0.80% 3% AIR ......... 31,153 -- 1.109 34,534 -- Separate Account Charges 1.25% 3% AIR ......... 149,343 -- 1.105 165,062 -- Separate Account Charges 1.25% 5% AIR ......... -- -- 1.105 -- -- Growth Fund - Class 2 Shares Separate Account Charges 0.80% 3% AIR ......... 16,521 -- 1.091 18,024 -- Separate Account Charges 1.25% 3% AIR ......... 292,002 -- 1.088 317,625 -- Separate Account Charges 1.25% 5% AIR ......... -- -- 1.088 -- -- Growth-Income Fund - Class 2 Shares Separate Account Charges 0.80% 3% AIR ......... 104,915 -- 1.082 113,562 -- Separate Account Charges 1.25% 3% AIR ......... 374,376 -- 1.079 404,026 -- Separate Account Charges 1.25% 5% AIR ......... -- -- 1.079 -- -- CitiStreet Funds, Inc. CitiStreet Diversified Bond Fund - Class I Separate Account Charges 0.80% 3% AIR ......... 4,114,057 1,209 1.360 5,595,877 1,644 Separate Account Charges 1.25% 3% AIR ......... 66,487,051 -- 1.325 88,113,597 -- Separate Account Charges 1.25% 5% AIR ......... -- 33,289 1.325 -- 44,117 CitiStreet International Stock Fund - Class I Separate Account Charges 0.80% 3% AIR ......... 2,148,904 -- 1.024 2,201,308 -- Separate Account Charges 1.25% 3% AIR ......... 39,168,316 -- 0.998 39,093,680 -- Separate Account Charges 1.25% 5% AIR ......... -- 6,695 0.998 -- 6,682 CitiStreet Large Company Stock Fund - Class I Separate Account Charges 0.80% 3% AIR ......... 4,498,084 -- 0.746 3,353,362 -- Separate Account Charges 1.25% 3% AIR ......... 84,604,803 -- 0.726 61,455,071 -- Separate Account Charges 1.25% 5% AIR ......... -- 13,829 0.726 -- 10,045
-58- NOTES TO FINANCIAL STATEMENTS - CONTINUED 6. NET CONTRACT OWNERS' EQUITY (CONTINUED)
DECEMBER 31, 2004 ----------------------------------------------------------------------------- ACCUMULATION ANNUITY UNIT ACCUMULATION ANNUITY UNITS UNITS VALUE NET ASSETS NET ASSETS ------------ -------- ------- ------------ ---------- CitiStreet Funds, Inc. (continued) CitiStreet Small Company Stock Fund - Class I Separate Account Charges 0.80% 3% AIR ......... 879,209 -- $ 1.974 $ 1,735,900 $ -- Separate Account Charges 1.25% 3% AIR ......... 16,944,532 -- 1.924 32,596,848 -- Separate Account Charges 1.25% 5% AIR ......... -- 5,395 1.924 -- 10,378 Credit Suisse Trust Credit Suisse Trust Emerging Markets Portfolio Separate Account Charges 0.80% 3% AIR ......... 44,528 -- 1.412 62,889 -- Separate Account Charges 1.25% 3% AIR ......... 1,293,414 -- 1.377 1,781,299 -- Separate Account Charges 1.25% 5% AIR ......... -- -- 1.377 -- -- Delaware VIP Trust Delaware VIP REIT Series - Standard Class Separate Account Charges 0.80% 3% AIR ......... 330,738 -- 2.368 783,034 -- Separate Account Charges 1.25% 3% AIR ......... 2,341,913 -- 2.310 5,410,176 -- Separate Account Charges 1.25% 5% AIR ......... -- -- 2.310 -- -- Delaware VIP Small Cap Value Series - Standard Class Separate Account Charges 0.80% 3% AIR ......... 203,692 -- 2.050 417,524 -- Separate Account Charges 1.25% 3% AIR ......... 2,625,879 -- 1.998 5,246,193 -- Separate Account Charges 1.25% 5% AIR ......... -- -- 1.998 -- -- Dreyfus Variable Investment Fund Dreyfus VIF - Developing Leaders Portfolio - Initial Shares Separate Account Charges 0.80% 3% AIR ......... 619,182 -- 1.503 930,427 -- Separate Account Charges 1.25% 3% AIR ......... 7,497,614 -- 1.464 10,979,178 -- Separate Account Charges 1.25% 5% AIR ......... -- -- 1.464 -- -- Dreyfus VIF - Appreciation Portfolio - Initial Shares Separate Account Charges 0.80% 3% AIR ......... 327,562 2,837 0.992 324,868 2,814 Separate Account Charges 1.25% 3% AIR ......... 4,331,406 -- 0.966 4,185,552 -- Separate Account Charges 1.25% 5% AIR ......... -- -- 0.966 -- -- Franklin Templeton Variable Insurance Products Trust Mutual Shares Securities Fund - Class 2 Shares Separate Account Charges 0.80% 3% AIR ......... 23,498 -- 1.345 31,606 -- Separate Account Charges 1.25% 3% AIR ......... 82,519 -- 1.335 110,161 -- Separate Account Charges 1.25% 5% AIR ......... -- -- 1.335 -- -- Templeton Developing Markets Securities Fund - Class 2 Shares Separate Account Charges 0.80% 3% AIR ......... -- -- 1.234 -- -- Separate Account Charges 1.25% 3% AIR ......... 49,682 -- 1.230 61,107 -- Separate Account Charges 1.25% 5% AIR ......... -- -- 1.230 -- -- Templeton Foreign Securities Fund - Class 2 Shares Separate Account Charges 0.80% 3% AIR ......... 40,991 -- 1.156 47,402 -- Separate Account Charges 1.25% 3% AIR ......... 181,735 -- 1.153 209,531 -- Separate Account Charges 1.25% 5% AIR ......... -- -- 1.153 -- -- Templeton Growth Securities Fund - Class 2 Shares Separate Account Charges 0.80% 3% AIR ......... 57,703 -- 1.126 64,973 -- Separate Account Charges 1.25% 3% AIR ......... 525,836 -- 1.123 590,324 -- Separate Account Charges 1.25% 5% AIR ......... -- -- 1.123 -- --
-59- NOTES TO FINANCIAL STATEMENTS - CONTINUED 6. NET CONTRACT OWNERS' EQUITY (CONTINUED)
DECEMBER 31, 2004 ----------------------------------------------------------------------------- ACCUMULATION ANNUITY UNIT ACCUMULATION ANNUITY UNITS UNITS VALUE NET ASSETS NET ASSETS ------------ -------- ------- ------------ ---------- Greenwich Street Series Fund Appreciation Portfolio Separate Account Charges 0.80% 3% AIR ......... 162,864 -- $ 1.029 $ 167,663 $ -- Separate Account Charges 1.25% 3% AIR ......... 3,121,998 -- 1.013 3,161,353 -- Separate Account Charges 1.25% 5% AIR ......... -- -- 1.013 -- -- Equity Index Portfolio - Class II Shares Separate Account Charges 0.80% 3% AIR ......... 1,899,350 11 0.945 1,795,707 10 Separate Account Charges 0.80% 62 FL -- 14,761 0.912 -- 13,464 Separate Account Charges 1.25% 3% AIR ......... 20,870,384 47,733 0.921 19,224,800 43,969 Separate Account Charges 1.25% 5% AIR ......... -- 45,806 0.921 -- 42,194 Separate Account Charges 1.25% 83 FL -- 57,173 0.878 -- 50,198 Fundamental Value Portfolio Separate Account Charges 0.80% 3% AIR ......... 630,507 -- 1.065 671,745 -- Separate Account Charges 1.25% 3% AIR ......... 8,977,453 -- 1.048 9,407,951 -- Separate Account Charges 1.25% 5% AIR ......... -- -- 1.048 -- -- Janus Aspen Series Balanced Portfolio - Service Shares Separate Account Charges 0.80% 3% AIR ......... 157,215 -- 1.080 169,793 -- Separate Account Charges 1.25% 3% AIR ......... 1,405,488 -- 1.062 1,493,064 -- Separate Account Charges 1.25% 5% AIR ......... -- -- 1.062 -- -- Mid Cap Growth Portfolio - Service Shares Separate Account Charges 0.80% 3% AIR ......... -- -- 0.880 -- -- Separate Account Charges 1.25% 3% AIR ......... 212,598 -- 0.865 183,971 -- Separate Account Charges 1.25% 5% AIR ......... -- -- 0.865 -- -- Worldwide Growth Portfolio - Service Shares Separate Account Charges 0.80% 3% AIR ......... 303,997 -- 0.577 175,318 -- Separate Account Charges 1.25% 3% AIR ......... 9,163,991 -- 0.565 5,175,090 -- Separate Account Charges 1.25% 5% AIR ......... -- -- 0.565 -- -- Lazard Retirement Series, Inc. Lazard Retirement Small Cap Portfolio Separate Account Charges 0.80% 3% AIR ......... -- -- 1.127 -- -- Separate Account Charges 1.25% 3% AIR ......... 231,226 -- 1.123 259,760 -- Separate Account Charges 1.25% 5% AIR ......... -- -- 1.123 -- -- Lord Abbett Series Fund, Inc. Growth and Income Portfolio Separate Account Charges 0.80% 3% AIR ......... -- -- 1.111 -- -- Separate Account Charges 1.25% 3% AIR ......... 268,562 -- 1.107 297,387 -- Separate Account Charges 1.25% 5% AIR ......... -- -- 1.107 -- -- Mid-Cap Value Portfolio Separate Account Charges 0.80% 3% AIR ......... 34,410 -- 1.165 40,083 -- Separate Account Charges 1.25% 3% AIR ......... 185,019 -- 1.161 214,885 -- Separate Account Charges 1.25% 5% AIR ......... -- -- 1.161 -- -- Oppenheimer Variable Account Funds Oppenheimer Main Street Fund/VA - Service Shares Separate Account Charges 0.80% 3% AIR ......... 10,342 -- 1.078 11,149 -- Separate Account Charges 1.25% 3% AIR ......... 64,371 -- 1.075 69,189 -- Separate Account Charges 1.25% 5% AIR ......... -- -- 1.075 -- --
-60- NOTES TO FINANCIAL STATEMENTS - CONTINUED 6. NET CONTRACT OWNERS' EQUITY (CONTINUED)
DECEMBER 31, 2004 ----------------------------------------------------------------------------- ACCUMULATION ANNUITY UNIT ACCUMULATION ANNUITY UNITS UNITS VALUE NET ASSETS NET ASSETS ------------ -------- ------- ------------ ---------- PIMCO Variable Insurance Trust Total Return Portfolio - Administrative Class Separate Account Charges 0.80% 3% AIR ......... 378,881 -- $ 1.240 $ 469,922 $ -- Separate Account Charges 1.25% 3% AIR ......... 5,331,824 -- 1.220 6,504,577 -- Separate Account Charges 1.25% 5% AIR ......... -- -- 1.220 -- -- Putnam Variable Trust Putnam VT Discovery Growth Fund - Class IB Shares Separate Account Charges 0.80% 3% AIR ......... 11,671 -- 0.789 9,207 -- Separate Account Charges 1.25% 3% AIR ......... 81,229 -- 0.776 63,026 -- Separate Account Charges 1.25% 5% AIR ......... -- -- 0.776 -- -- Putnam VT International Equity Fund - Class IB Shares Separate Account Charges 0.80% 3% AIR ......... 85,063 -- 1.033 87,905 -- Separate Account Charges 1.25% 3% AIR ......... 885,854 -- 1.016 900,454 -- Separate Account Charges 1.25% 5% AIR ......... -- -- 1.016 -- -- Putnam VT Small Cap Value Fund - Class IB Shares Separate Account Charges 0.80% 3% AIR ......... 205,632 -- 1.647 338,703 -- Separate Account Charges 1.25% 3% AIR ......... 3,050,052 -- 1.620 4,941,591 -- Separate Account Charges 1.25% 5% AIR ......... -- -- 1.620 -- -- Salomon Brothers Variable Series Funds Inc. All Cap Fund - Class I Separate Account Charges 0.80% 3% AIR ......... 344,258 -- 1.596 549,545 -- Separate Account Charges 1.25% 3% AIR ......... 8,525,221 -- 1.555 13,259,718 -- Separate Account Charges 1.25% 5% AIR ......... -- 27,210 1.555 -- 42,322 Investors Fund - Class I Separate Account Charges 0.80% 3% AIR ......... 149,763 -- 1.298 194,392 -- Separate Account Charges 1.25% 3% AIR ......... 3,276,334 -- 1.265 4,143,878 -- Separate Account Charges 1.25% 5% AIR ......... -- -- 1.265 -- -- Small Cap Growth Fund - Class I Separate Account Charges 0.80% 3% AIR ......... -- -- 1.064 -- -- Separate Account Charges 1.25% 3% AIR ......... 598,446 -- 1.046 626,251 -- Separate Account Charges 1.25% 5% AIR ......... -- -- 1.046 -- -- Total Return Fund - Class I Separate Account Charges 0.80% 3% AIR ......... 29,201 -- 1.209 35,312 -- Separate Account Charges 1.25% 3% AIR ......... 505,219 -- 1.178 595,268 -- Separate Account Charges 1.25% 5% AIR ......... -- -- 1.178 -- -- Smith Barney Investment Series Smith Barney Dividend Strategy Portfolio Separate Account Charges 0.80% 3% AIR ......... 23,093 -- 0.828 19,110 -- Separate Account Charges 1.25% 3% AIR ......... 338,590 -- 0.814 275,601 -- Separate Account Charges 1.25% 5% AIR ......... -- -- 0.814 -- -- Smith Barney Premier Selections All Cap Growth Portfolio Separate Account Charges 0.80% 3% AIR ......... 2,816 -- 0.887 2,497 -- Separate Account Charges 1.25% 3% AIR ......... 44,028 -- 0.872 38,395 -- Separate Account Charges 1.25% 5% AIR ......... -- -- 0.872 -- --
-61- NOTES TO FINANCIAL STATEMENTS - CONTINUED 6. NET CONTRACT OWNERS' EQUITY (CONTINUED)
DECEMBER 31, 2004 ----------------------------------------------------------------------------- ACCUMULATION ANNUITY UNIT ACCUMULATION ANNUITY UNITS UNITS VALUE NET ASSETS NET ASSETS ------------ -------- ------- ------------ ---------- Strong Variable Insurance Funds, Inc. Strong Multi Cap Value Fund II Separate Account Charges 0.80% 3% AIR ......... 6,351 -- $ 1.175 $ 7,460 $ -- Separate Account Charges 1.25% 3% AIR ......... 610,822 -- 1.146 699,965 -- Separate Account Charges 1.25% 5% AIR ......... -- -- 1.146 -- -- The Travelers Series Trust Convertible Securities Portfolio Separate Account Charges 0.80% 3% AIR ......... -- -- 1.040 -- -- Separate Account Charges 1.25% 3% AIR ......... 64,342 -- 1.037 66,705 -- Separate Account Charges 1.25% 5% AIR ......... -- -- 1.037 -- -- Disciplined Mid Cap Stock Portfolio Separate Account Charges 0.80% 3% AIR ......... 300,147 -- 1.625 487,610 -- Separate Account Charges 1.25% 3% AIR ......... 4,125,218 -- 1.585 6,536,494 -- Separate Account Charges 1.25% 5% AIR ......... -- -- 1.585 -- -- Equity Income Portfolio Separate Account Charges 0.80% 3% AIR ......... 1,225,253 1,513 1.240 1,519,157 1,875 Separate Account Charges 1.25% 3% AIR ......... 11,224,792 -- 1.208 13,560,688 -- Separate Account Charges 1.25% 5% AIR ......... -- -- 1.208 -- -- Federated Stock Portfolio Separate Account Charges 0.80% 3% AIR ......... 60,043 -- 1.113 66,847 -- Separate Account Charges 1.25% 3% AIR ......... 1,172,424 -- 1.085 1,272,293 -- Separate Account Charges 1.25% 5% AIR ......... -- -- 1.085 -- -- Large Cap Portfolio Separate Account Charges 0.80% 3% AIR ......... 512,693 -- 0.852 436,933 -- Separate Account Charges 1.25% 3% AIR ......... 8,433,992 -- 0.830 7,003,282 -- Separate Account Charges 1.25% 5% AIR ......... -- -- 0.830 -- -- Lazard International Stock Portfolio Separate Account Charges 0.80% 3% AIR ......... 80,145 1,240 0.971 77,845 1,204 Separate Account Charges 1.25% 3% AIR ......... 1,335,961 -- 0.947 1,264,755 -- Separate Account Charges 1.25% 5% AIR ......... -- -- 0.947 -- -- Merrill Lynch Large Cap Core Portfolio Separate Account Charges 0.80% 3% AIR ......... 15,265 -- 0.897 13,692 -- Separate Account Charges 1.25% 3% AIR ......... 914,605 -- 0.874 799,350 -- Separate Account Charges 1.25% 5% AIR ......... -- -- 0.874 -- -- MFS Emerging Growth Portfolio Separate Account Charges 0.80% 3% AIR ......... -- -- 0.761 -- -- Separate Account Charges 1.25% 3% AIR ......... 59,682 -- 0.749 44,676 -- Separate Account Charges 1.25% 5% AIR ......... -- -- 0.749 -- -- MFS Mid Cap Growth Portfolio Separate Account Charges 0.80% 3% AIR ......... 247,955 -- 1.029 255,093 -- Separate Account Charges 1.25% 3% AIR ......... 4,141,184 -- 1.003 4,153,438 -- Separate Account Charges 1.25% 5% AIR ......... -- 10,236 1.003 -- 10,267 MFS Value Portfolio Separate Account Charges 0.80% 3% AIR ......... -- -- 1.127 -- -- Separate Account Charges 1.25% 3% AIR ......... 244,994 -- 1.123 275,189 -- Separate Account Charges 1.25% 5% AIR ......... -- -- 1.123 -- -- Pioneer Fund Portfolio Separate Account Charges 0.80% 3% AIR ......... 128,011 -- 0.847 108,375 -- Separate Account Charges 1.25% 3% AIR ......... 2,079,575 -- 0.825 1,716,305 -- Separate Account Charges 1.25% 5% AIR ......... -- -- 0.825 -- --
-62- NOTES TO FINANCIAL STATEMENTS - CONTINUED 6. NET CONTRACT OWNERS' EQUITY (CONTINUED)
DECEMBER 31, 2004 ----------------------------------------------------------------------------- ACCUMULATION ANNUITY UNIT ACCUMULATION ANNUITY UNITS UNITS VALUE NET ASSETS NET ASSETS ------------ -------- ------- ------------ ---------- The Travelers Series Trust (continued) Social Awareness Stock Portfolio Separate Account Charges 0.80% 3% AIR ......... 210,284 -- $ 0.925 $ 194,406 $ -- Separate Account Charges 1.25% 3% AIR ......... 3,906,470 -- 0.901 3,518,851 -- Separate Account Charges 1.25% 5% AIR ......... -- -- 0.901 -- -- Travelers Quality Bond Portfolio Separate Account Charges 0.80% 3% AIR ......... 428,682 -- 1.290 552,907 -- Separate Account Charges 1.25% 3% AIR ......... 6,168,939 -- 1.257 7,752,478 -- Separate Account Charges 1.25% 5% AIR ......... -- 15,091 1.257 -- 18,965 Separate Account Charges 1.25% 33 FL -- 39,822 1.233 -- 49,100 U.S. Government Securities Portfolio Separate Account Charges 0.80% 3% AIR ......... 611,584 1,414 1.396 853,681 1,973 Separate Account Charges 1.25% 3% AIR ......... 10,274,674 11,252 1.360 13,974,307 15,303 Separate Account Charges 1.25% 5% AIR ......... -- -- 1.360 -- -- Separate Account Charges 1.25% 33 FL -- -- 1.334 -- -- Travelers Series Fund Inc. AIM Capital Appreciation Portfolio Separate Account Charges 0.80% 3% AIR ......... 72,426 -- 0.887 64,244 -- Separate Account Charges 1.25% 3% AIR ......... 771,149 -- 0.872 672,825 -- Separate Account Charges 1.25% 5% AIR ......... -- -- 0.872 -- -- MFS Total Return Portfolio Separate Account Charges 0.80% 3% AIR ......... 1,303,774 -- 1.371 1,787,678 -- Separate Account Charges 1.25% 3% AIR ......... 13,287,921 10,730 1.336 17,757,605 14,339 Separate Account Charges 1.25% 5% AIR ......... -- -- 1.336 -- -- Pioneer Strategic Income Portfolio Separate Account Charges 0.80% 3% AIR ......... 48,519 -- 1.415 68,641 -- Separate Account Charges 1.25% 3% AIR ......... 856,031 -- 1.380 1,181,087 -- Separate Account Charges 1.25% 5% AIR ......... -- -- 1.380 -- -- SB Adjustable Rate Income Portfolio - Class I Shares Separate Account Charges 0.80% 3% AIR ......... 56,767 -- 1.005 57,030 -- Separate Account Charges 1.25% 3% AIR ......... 277,303 -- 0.999 276,985 -- Separate Account Charges 1.25% 5% AIR ......... -- -- 0.999 -- -- Smith Barney Aggressive Growth Portfolio Separate Account Charges 0.80% 3% AIR ......... 947,296 -- 0.923 874,094 -- Separate Account Charges 1.25% 3% AIR ......... 11,860,702 -- 0.908 10,764,897 -- Separate Account Charges 1.25% 5% AIR ......... -- -- 0.908 -- -- Smith Barney High Income Portfolio Separate Account Charges 0.80% 3% AIR ......... 12,147 -- 1.166 14,169 -- Separate Account Charges 1.25% 3% AIR ......... 971,498 -- 1.137 1,104,888 -- Separate Account Charges 1.25% 5% AIR ......... -- -- 1.137 -- -- Smith Barney International All Cap Growth Portfolio Separate Account Charges 0.80% 3% AIR ......... 176,162 -- 0.883 155,479 -- Separate Account Charges 1.25% 3% AIR ......... 2,412,532 -- 0.860 2,074,711 -- Separate Account Charges 1.25% 5% AIR ......... -- -- 0.860 -- -- Smith Barney Large Capitalization Growth Portfolio Separate Account Charges 0.80% 3% AIR ......... 338,275 -- 0.987 333,716 -- Separate Account Charges 1.25% 3% AIR ......... 8,385,153 -- 0.961 8,060,402 -- Separate Account Charges 1.25% 5% AIR ......... -- 10,733 0.961 -- 10,318
-63- NOTES TO FINANCIAL STATEMENTS - CONTINUED 6. NET CONTRACT OWNERS' EQUITY (CONTINUED)
DECEMBER 31, 2004 ----------------------------------------------------------------------------- ACCUMULATION ANNUITY UNIT ACCUMULATION ANNUITY UNITS UNITS VALUE NET ASSETS NET ASSETS ------------ -------- ------- ------------ ---------- Travelers Series Fund Inc. (continued) Strategic Equity Portfolio Separate Account Charges 0.80% 3% AIR ......... 779,129 2,200 $ 0.861 $ 670,452 $ 1,893 Separate Account Charges 1.25% 3% AIR ......... 11,640,459 -- 0.838 9,759,693 -- Separate Account Charges 1.25% 5% AIR ......... -- 26,393 0.838 -- 22,128 Van Kampen Life Investment Trust Comstock Portfolio - Class II Shares Separate Account Charges 0.80% 3% AIR ......... 35,463 -- 1.464 51,916 -- Separate Account Charges 1.25% 3% AIR ......... 305,271 -- 1.453 443,561 -- Separate Account Charges 1.25% 5% AIR ......... -- -- 1.453 -- -- Emerging Growth Portfolio - Class II Shares Separate Account Charges 0.80% 3% AIR ......... -- -- 0.729 -- -- Separate Account Charges 1.25% 3% AIR ......... 164,650 -- 0.717 118,010 -- Separate Account Charges 1.25% 5% AIR ......... -- -- 0.717 -- -- Enterprise Portfolio - Class II Shares Separate Account Charges 0.80% 3% AIR ......... -- -- 0.817 -- -- Separate Account Charges 1.25% 3% AIR ......... 57,135 -- 0.804 45,933 -- Separate Account Charges 1.25% 5% AIR ......... -- -- 0.804 -- -- Variable Annuity Portfolios Smith Barney Small Cap Growth Opportunities Portfolio Separate Account Charges 0.80% 3% AIR ......... 2,532 -- 1.130 2,863 -- Separate Account Charges 1.25% 3% AIR ......... 272,596 -- 1.112 303,115 -- Separate Account Charges 1.25% 5% AIR ......... -- -- 1.112 -- -- Variable Insurance Products Fund II Asset Manager Portfolio - Service Class 2 Separate Account Charges 0.80% 3% AIR ......... 291,168 -- 0.990 288,171 -- Separate Account Charges 1.25% 3% AIR ......... 4,661,931 -- 0.969 4,518,133 -- Separate Account Charges 1.25% 5% AIR ......... -- -- 0.969 -- -- Contrafund(R) Portfolio - Service Class 2 Separate Account Charges 0.80% 3% AIR ......... 274,073 -- 1.238 339,202 -- Separate Account Charges 1.25% 3% AIR ......... 2,968,323 -- 1.217 3,613,610 -- Separate Account Charges 1.25% 5% AIR ......... -- -- 1.217 -- -- Variable Insurance Products Fund III Dynamic Capital Appreciation Portfolio - Service Class 2 Separate Account Charges 0.80% 3% AIR ......... 16,821 -- 0.966 16,253 -- Separate Account Charges 1.25% 3% AIR ......... 164,693 -- 0.950 156,534 -- Separate Account Charges 1.25% 5% AIR ......... -- -- 0.950 -- -- Mid Cap Portfolio - Service Class 2 Separate Account Charges 0.80% 3% AIR ......... 181,421 -- 1.563 283,529 -- Separate Account Charges 1.25% 3% AIR ......... 2,519,692 -- 1.537 3,873,343 -- Separate Account Charges 1.25% 5% AIR ......... -- -- 1.537 -- -- ------------ --------- Net Contract Owners' Equity ....................... $538,282,651 $ 476,255 ============ =========
-64- NOTES TO FINANCIAL STATEMENTS - CONTINUED
7. STATEMENT OF INVESTMENTS FOR THE YEAR ENDED DECEMBER 31, 2004 ------------------------------------------------------ INVESTMENTS NO. OF MARKET COST OF PROCEEDS SHARES VALUE PURCHASES FROM SALES ------------ ------------ ------------ ------------ CAPITAL APPRECIATION FUND (2.4%) Total (Cost $15,200,680) 191,956 $ 12,713,241 $ 707,755 $ 1,523,890 ------------ ------------ ------------ ------------ HIGH YIELD BOND TRUST (1.5%) Total (Cost $7,755,650) 832,107 8,246,182 1,832,958 1,011,567 ------------ ------------ ------------ ------------ MANAGED ASSETS TRUST (4.4%) Total (Cost $24,974,153) 1,427,140 23,790,422 3,273,530 2,043,949 ------------ ------------ ------------ ------------ MONEY MARKET PORTFOLIO (2.7%) Total (Cost $14,396,518) 14,396,518 14,396,518 4,040,261 7,472,551 ------------ ------------ ------------ ------------ AIM VARIABLE INSURANCE FUNDS, INC. (0.0%) AIM V.I. Premier Equity Fund - Series I Total (Cost $209,518) 10,805 230,154 9,004 35,980 ------------ ------------ ------------ ------------ AMERICAN FUNDS INSURANCE SERIES (0.2%) Global Growth Fund - Class 2 Shares (Cost $182,059) 11,584 199,596 184,972 3,005 Growth Fund - Class 2 Shares (Cost $311,934) 6,568 335,649 326,540 14,948 Growth-Income Fund - Class 2 Shares (Cost $489,710) 14,126 517,588 491,269 1,599 ------------ ------------ ------------ ------------ Total (Cost $983,703) 32,278 1,052,833 1,002,781 19,552 ------------ ------------ ------------ ------------ CITISTREET FUNDS, INC. (43.5%) CitiStreet Diversified Bond Fund - Class I (Cost $88,844,364) 7,925,210 93,755,235 21,265,265 4,142,683 CitiStreet International Stock Fund - Class I (Cost $39,304,586) 3,050,345 41,301,670 6,277,515 3,653,675 CitiStreet Large Company Stock Fund - Class I (Cost $64,923,465) 5,563,818 64,818,478 10,333,326 2,512,427 CitiStreet Small Company Stock Fund - Class I (Cost $30,463,140) 2,460,109 34,343,126 4,522,668 3,170,820 ------------ ------------ ------------ ------------ Total (Cost $223,535,555) 18,999,482 234,218,509 42,398,774 13,479,605 ------------ ------------ ------------ ------------ CREDIT SUISSE TRUST (0.3%) Credit Suisse Trust Emerging Markets Portfolio Total (Cost $1,639,494) 139,289 1,844,188 204,312 242,560 ------------ ------------ ------------ ------------ DELAWARE VIP TRUST (2.2%) Delaware VIP REIT Series - Standard Class (Cost $4,324,262) 324,592 6,193,210 1,933,300 828,053 Delaware VIP Small Cap Value Series - Standard Class (Cost $3,873,093) 186,001 5,663,717 924,184 662,037 ------------ ------------ ------------ ------------ Total (Cost $8,197,355) 510,593 11,856,927 2,857,484 1,490,090 ------------ ------------ ------------ ------------ DREYFUS VARIABLE INVESTMENT FUND (3.1%) Dreyfus VIF - Developing Leaders Portfolio - Initial Shares (Cost $12,889,612) 286,633 11,909,605 834,787 1,032,134 Dreyfus VIF - Appreciation Portfolio - Initial Shares (Cost $4,674,545) 126,919 4,513,234 165,182 771,304 ------------ ------------ ------------ ------------ Total (Cost $17,564,157) 413,552 16,422,839 999,969 1,803,438 ------------ ------------ ------------ ------------ FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST (0.2%) Mutual Shares Securities Fund - Class 2 Shares (Cost $127,997) 8,520 141,767 105,251 4,690 Templeton Developing Markets Securities Fund - Class 2 Shares (Cost $49,848) 7,048 61,107 52,256 2,842 Templeton Foreign Securities Fund - Class 2 Shares (Cost $235,630) 17,905 256,933 236,286 688 Templeton Growth Securities Fund - Class 2 Shares (Cost $605,424) 51,075 655,297 632,038 26,952 ------------ ------------ ------------ ------------ Total (Cost $1,018,899) 84,548 1,115,104 1,025,831 35,172 ------------ ------------ ------------ ------------
-65- NOTES TO FINANCIAL STATEMENTS - CONTINUED
7. STATEMENT OF INVESTMENTS (CONTINUED) FOR THE YEAR ENDED DECEMBER 31, 2004 ------------------------------------------------------ INVESTMENTS NO. OF MARKET COST OF PROCEEDS SHARES VALUE PURCHASES FROM SALES ------------ ------------ ------------ ------------ GREENWICH STREET SERIES FUND (6.4%) Appreciation Portfolio (Cost $2,846,177) 142,083 $ 3,329,016 $ 668,231 $ 202,407 Equity Index Portfolio - Class II Shares (Cost $21,711,049) 717,153 21,170,342 1,984,090 2,032,719 Fundamental Value Portfolio (Cost $8,687,035) 477,711 10,079,696 1,575,158 665,447 ------------ ------------ ------------ ------------ Total (Cost $33,244,261) 1,336,947 34,579,054 4,227,479 2,900,573 ------------ ------------ ------------ ------------ JANUS ASPEN SERIES (1.3%) Balanced Portfolio - Service Shares (Cost $1,493,116) 65,882 1,662,857 223,804 230,039 Mid Cap Growth Portfolio - Service Shares (Cost $151,734) 7,254 183,971 79,368 18,052 Worldwide Growth Portfolio - Service Shares (Cost $7,434,358) 200,992 5,350,408 285,803 726,245 ------------ ------------ ------------ ------------ Total (Cost $9,079,208) 274,128 7,197,236 588,975 974,336 ------------ ------------ ------------ ------------ LAZARD RETIREMENT SERIES, INC. (0.0%) Lazard Retirement Small Cap Portfolio Total (Cost $233,066) 15,370 259,760 233,993 975 ------------ ------------ ------------ ------------ LORD ABBETT SERIES FUND, INC. (0.1%) Growth and Income Portfolio (Cost $273,044) 10,941 297,387 273,858 862 Mid-Cap Value Portfolio (Cost $233,071) 12,264 254,968 304,428 76,073 ------------ ------------ ------------ ------------ Total (Cost $506,115) 23,205 552,355 578,286 76,935 ------------ ------------ ------------ ------------ OPPENHEIMER VARIABLE ACCOUNT FUNDS (0.0%) Oppenheimer Main Street Fund/VA - Service Shares Total (Cost $76,284) 3,881 80,338 76,507 229 ------------ ------------ ------------ ------------ PIMCO VARIABLE INSURANCE TRUST (1.3%) Total Return Portfolio - Administrative Class Total (Cost $6,792,372) 663,606 6,974,499 1,584,870 1,619,316 ------------ ------------ ------------ ------------ PUTNAM VARIABLE TRUST (1.2%) Putnam VT Discovery Growth Fund - Class IB Shares (Cost $55,476) 14,534 72,233 -- 5,540 Putnam VT International Equity Fund - Class IB Shares (Cost $748,417) 67,190 988,359 192,067 170,819 Putnam VT Small Cap Value Fund - Class IB Shares (Cost $3,767,094) 231,693 5,280,294 1,690,529 389,394 ------------ ------------ ------------ ------------ Total (Cost $4,570,987) 313,417 6,340,886 1,882,596 565,753 ------------ ------------ ------------ ------------ SALOMON BROTHERS VARIABLE SERIES FUNDS INC. (3.6%) All Cap Fund - Class I (Cost $12,064,567) 823,029 13,851,585 1,808,589 1,133,461 Investors Fund - Class I (Cost $3,939,623) 314,140 4,338,270 616,083 539,146 Small Cap Growth Fund - Class I (Cost $516,498) 44,446 626,251 307,706 137,667 Total Return Fund - Class I (Cost $581,321) 55,952 630,580 136,561 137,672 ------------ ------------ ------------ ------------ Total (Cost $17,102,009) 1,237,567 19,446,686 2,868,939 1,947,946 ------------ ------------ ------------ ------------ SMITH BARNEY INVESTMENT SERIES (0.1%) Smith Barney Dividend Strategy Portfolio (Cost $283,767) 33,188 294,711 77,323 3,952 Smith Barney Premier Selections All Cap Growth Portfolio (Cost $38,129) 3,371 40,892 37,112 22,335 ------------ ------------ ------------ ------------ Total (Cost $321,896) 36,559 335,603 114,435 26,287 ------------ ------------ ------------ ------------ STRONG VARIABLE INSURANCE FUNDS, INC. (0.1%) Strong Multi Cap Value Fund II Total (Cost $562,090) 60,104 707,425 66,752 148,478 ------------ ------------ ------------ ------------
-66- NOTES TO FINANCIAL STATEMENTS - CONTINUED
7. STATEMENT OF INVESTMENTS (CONTINUED) FOR THE YEAR ENDED DECEMBER 31, 2004 ----------------------------------------------------- INVESTMENTS NO. OF MARKET COST OF PROCEEDS SHARES VALUE PURCHASES FROM SALES ------------ ------------ ------------ ------------ THE TRAVELERS SERIES TRUST (12.4%) Convertible Securities Portfolio (Cost $65,568) 5,401 $ 66,705 $ 104,775 $ 39,459 Disciplined Mid Cap Stock Portfolio (Cost $5,715,432) 355,471 7,024,104 987,972 891,039 Equity Income Portfolio (Cost $13,379,597) 878,376 15,081,720 3,304,415 1,237,399 Federated Stock Portfolio (Cost $1,233,565) 80,866 1,339,140 53,729 186,696 Large Cap Portfolio (Cost $9,268,395) 534,115 7,440,215 481,530 816,456 Lazard International Stock Portfolio (Cost $1,088,665) 117,671 1,343,804 558,729 93,645 Merrill Lynch Large Cap Core Portfolio (Cost $1,019,552) 89,839 813,042 148,590 159,730 MFS Emerging Growth Portfolio (Cost $43,058) 4,239 44,676 29,017 8,898 MFS Mid Cap Growth Portfolio (Cost $7,389,860) 562,904 4,418,798 339,000 850,355 MFS Value Portfolio (Cost $262,894) 22,337 275,189 274,828 12,493 Pioneer Fund Portfolio (Cost $2,417,927) 151,677 1,824,680 32,291 300,105 Social Awareness Stock Portfolio (Cost $3,950,057) 152,809 3,713,257 336,494 515,772 Travelers Quality Bond Portfolio (Cost $8,586,552) 759,152 8,373,450 1,488,201 2,224,828 U.S. Government Securities Portfolio (Cost $15,021,438) 1,164,334 14,845,264 1,296,707 4,276,340 ------------ ------------ ------------ ------------ Total (Cost $69,442,560) 4,879,191 66,604,044 9,436,278 11,613,215 ------------ ------------ ------------ ------------ TRAVELERS SERIES FUND INC. (10.4%) AIM Capital Appreciation Portfolio (Cost $606,173) 68,885 737,069 130,963 104,810 MFS Total Return Portfolio (Cost $18,648,462) 1,141,168 19,559,622 3,908,665 1,499,542 Pioneer Strategic Income Portfolio (Cost $1,273,305) 133,233 1,249,728 254,695 136,679 SB Adjustable Rate Income Portfolio - Class I Shares (Cost $335,102) 33,368 334,015 375,973 65,808 Smith Barney Aggressive Growth Portfolio (Cost $10,180,934) 873,798 11,638,991 2,728,913 860,636 Smith Barney High Income Portfolio (Cost $1,131,809) 148,220 1,119,057 283,459 147,882 Smith Barney International All Cap Growth Portfolio (Cost $2,223,603) 171,950 2,230,190 118,592 299,854 Smith Barney Large Capitalization Growth Portfolio (Cost $8,299,981) 584,860 8,404,436 1,656,126 1,137,777 Strategic Equity Portfolio (Cost $15,442,255) 596,019 10,454,166 436,808 1,453,568 ------------ ------------ ------------ ------------ Total (Cost $58,141,624) 3,751,501 55,727,274 9,894,194 5,706,556 ------------ ------------ ------------ ------------ VAN KAMPEN LIFE INVESTMENT TRUST (0.1%) Comstock Portfolio - Class II Shares (Cost $444,181) 36,193 495,477 461,829 87,788 Emerging Growth Portfolio - Class II Shares (Cost $105,896) 4,567 118,010 18,626 8,202 Enterprise Portfolio - Class II Shares (Cost $42,832) 3,377 45,933 58 672 ------------ ------------ ------------ ------------ Total (Cost $592,909) 44,137 659,420 480,513 96,662 ------------ ------------ ------------ ------------ VARIABLE ANNUITY PORTFOLIOS (0.1%) Smith Barney Small Cap Growth Opportunities Portfolio Total (Cost $258,378) 26,840 305,978 226,489 128,143 ------------ ------------ ------------ ------------ VARIABLE INSURANCE PRODUCTS FUND II (1.6%) Asset Manager Portfolio - Service Class 2 (Cost $4,568,714) 328,299 4,806,304 947,721 328,337 Contrafund(R) Portfolio - Service Class 2 (Cost $3,218,795) 150,012 3,952,812 1,765,551 184,941 ------------ ------------ ------------ ------------ Total (Cost $7,787,509) 478,311 8,759,116 2,713,272 513,278 ------------ ------------ ------------ ------------ VARIABLE INSURANCE PRODUCTS FUND III (0.8%) Dynamic Capital Appreciation Portfolio - Service Class 2 (Cost $160,344) 24,302 172,787 109,876 88,162 Mid Cap Portfolio - Service Class 2 (Cost $3,020,975) 139,119 4,156,872 1,671,236 361,246 ------------ ------------ ------------ ------------ Total (Cost $3,181,319) 163,421 4,329,659 1,781,112 449,408 ------------ ------------ ------------ ------------ TOTAL INVESTMENTS (100%) (COST $527,368,269) $538,746,250 $ 95,107,349 $ 55,926,444 ============ ============ ============
-67- NOTES TO FINANCIAL STATEMENTS - CONTINUED 8. FINANCIAL HIGHLIGHTS
EXPENSE TOTAL YEAR UNIT VALUE NET INVESTMENT(1) RATIO(2) RETURN(3) ENDED UNITS LOWEST TO ASSETS INCOME LOWEST TO LOWEST TO DEC 31 (000S) HIGHEST ($) ($000S) RATIO (%) HIGHEST (%) HIGHEST (%) ------ ------ ------------- ------- ------------- ----------- ----------------- CAPITAL APPRECIATION FUND 2004 21,722 0.584 - 0.597 12,713 -- 0.80 - 1.25 17.98 - 18.69 2003 23,062 0.495 - 0.503 11,430 0.05 0.80 - 1.25 23.44 - 23.89 2002 24,496 0.401 - 0.406 9,839 1.59 0.80 - 1.25 (26.01) - (25.78) 2001 24,515 0.542 - 0.547 13,302 0.49 0.80 - 1.25 (27.05) - (26.58) HIGH YIELD BOND TRUST 2004 5,519 1.491 - 1.530 8,246 7.17 0.80 - 1.25 7.34 - 7.90 2003 5,264 1.389 - 1.418 7,321 8.22 0.80 - 1.25 27.55 - 28.09 2002 4,541 1.089 - 1.107 4,951 16.09 0.80 - 1.25 3.32 - 3.75 2001 3,427 1.054 - 1.067 3,616 6.41 0.80 - 1.25 8.21 - 8.66 MANAGED ASSETS TRUST 2004 20,213 1.176 - 1.206 23,790 2.38 0.80 - 1.25 8.09 - 8.55 2003 19,479 1.088 - 1.111 21,209 2.69 0.80 - 1.25 20.49 - 21.02 2002 18,744 0.903 - 0.918 16,939 6.17 0.80 - 1.25 (9.70) - (9.38) 2001 20,076 1.000 - 1.013 20,096 2.74 0.80 - 1.25 (6.28) - (5.86) MONEY MARKET PORTFOLIO 2004 13,085 1.099 - 1.127 14,409 0.99 0.80 - 1.25 (0.18) - 0.18 2003 16,151 1.101 - 1.125 17,831 0.78 0.80 - 1.25 (0.54) - 0.00 2002 20,405 1.107 - 1.125 22,604 1.37 0.80 - 1.25 0.18 - 0.54 2001 17,518 1.105 - 1.119 19,375 3.59 0.80 - 1.25 0.09 - 2.94 AIM VARIABLE INSURANCE FUNDS, INC. AIM V.I. Premier Equity Fund - 2004 291 0.787 - 0.800 230 0.47 0.80 - 1.25 4.38 - 4.85 Series I 2003 325 0.754 - 0.763 246 0.45 0.80 - 1.25 23.61 - 24.07 2002 278 0.610 - 0.615 170 0.50 0.80 - 1.25 (31.15) - (30.74) 2001 103 0.886 91 0.39 1.25 (4.32) AMERICAN FUNDS INSURANCE SERIES Global Growth Fund - Class 2 Shares 2004 180 1.105 - 1.109 200 0.22 0.80 - 1.25 9.41 - 13.74 Growth Fund - Class 2 Shares 2004 309 1.088 - 1.091 336 0.32 0.80 - 1.25 8.45 - 12.16 Growth-Income Fund - Class 2 Shares 2004 479 1.079 - 1.082 518 1.74 0.80 - 1.25 9.51 - 10.21 CITISTREET FUNDS, INC. CitiStreet Diversified Bond Fund - 2004 70,636 1.325 - 1.360 93,755 3.48 0.80 - 1.25 3.35 - 3.82 Class I 2003 58,879 1.282 - 1.310 75,590 4.14 0.80 - 1.25 4.23 - 4.72 2002 58,475 1.230 - 1.251 71,981 4.37 0.80 - 1.25 7.61 - 8.12 2001 43,875 1.143 - 1.157 50,169 4.71 0.80 - 1.25 5.54 - 5.95 CitiStreet International Stock 2004 41,324 0.998 - 1.024 41,302 1.40 0.80 - 1.25 13.41 - 13.90 Fund - Class I 2003 38,408 0.880 - 0.899 33,839 0.81 0.80 - 1.25 28.47 - 28.98 2002 36,636 0.685 - 0.697 25,127 0.65 0.80 - 1.25 (23.29) - (22.90) 2001 25,633 0.893 - 0.904 22,906 1.28 0.80 - 1.25 (22.42) - (22.07) CitiStreet Large Company Stock 2004 89,117 0.726 - 0.746 64,818 0.87 0.80 - 1.25 8.68 - 9.22 Fund - Class I 2003 77,126 0.668 - 0.683 51,612 0.72 0.80 - 1.25 26.52 - 27.19 2002 66,019 0.528 - 0.537 34,901 0.70 0.80 - 1.25 (23.81) - (23.50) 2001 44,578 0.693 - 0.702 30,918 0.89 0.80 - 1.25 (16.81) - (16.43) CitiStreet Small Company Stock 2004 17,829 1.924 - 1.974 34,343 0.11 0.80 - 1.25 13.51 - 13.97 Fund - Class I 2003 16,816 1.695 - 1.732 28,530 0.14 0.80 - 1.25 41.37 - 41.97 2002 14,207 1.199 - 1.220 17,057 0.55 0.80 - 1.25 (24.69) - (24.32) 2001 11,111 1.592 - 1.612 17,702 0.05 0.80 - 1.25 0.32 - 0.75
-68- NOTES TO FINANCIAL STATEMENTS - CONTINUED 8. FINANCIAL HIGHLIGHTS (CONTINUED)
EXPENSE TOTAL YEAR UNIT VALUE NET INVESTMENT(1) RATIO(2) RETURN(3) ENDED UNITS LOWEST TO ASSETS INCOME LOWEST TO LOWEST TO DEC 31 (000S) HIGHEST ($) ($000S) RATIO (%) HIGHEST (%) HIGHEST (%) ------ ------ ------------- ------- ------------- ----------- ----------------- CREDIT SUISSE TRUST Credit Suisse Trust Emerging Markets Portfolio 2004 1,338 1.377 - 1.412 1,844 0.29 0.80 - 1.25 23.39 - 23.86 2003 1,367 1.116 - 1.140 1,527 -- 0.80 - 1.25 41.09 - 41.79 2002 1,413 0.791 - 0.804 1,119 0.19 0.80 - 1.25 (12.69) - (12.23) 2001 1,316 0.906 - 0.916 1,193 -- 0.80 - 1.25 (10.74) - (10.37) DELAWARE VIP TRUST Delaware VIP REIT Series - Standard 2004 2,673 2.310 - 2.368 6,193 1.90 0.80 - 1.25 29.78 - 30.40 Class 2003 2,169 1.780 - 1.816 3,872 2.50 0.80 - 1.25 32.34 - 32.94 2002 1,944 1.345 - 1.366 2,621 1.57 0.80 - 1.25 3.22 - 3.64 2001 697 1.303 - 1.318 910 1.70 0.80 - 1.25 7.42 - 7.94 Delaware VIP Small Cap Value Series - Standard Class 2004 2,830 1.998 - 2.050 5,664 0.20 0.80 - 1.25 20.00 - 20.52 2003 2,698 1.665 - 1.701 4,499 0.36 0.80 - 1.25 40.15 - 40.81 2002 2,414 1.188 - 1.208 2,870 0.36 0.80 - 1.25 (6.75) - (6.28) 2001 1,037 1.274 - 1.289 1,321 0.73 0.80 - 1.25 10.49 - 10.93 DREYFUS VARIABLE INVESTMENT FUND Dreyfus VIF - Developing Leaders Portfolio - Initial Shares 2004 8,117 1.464 - 1.503 11,910 0.20 0.80 - 1.25 9.91 - 10.51 2003 8,178 1.332 - 1.360 10,908 0.03 0.80 - 1.25 30.08 - 30.64 2002 8,146 1.024 - 1.041 8,351 0.04 0.80 - 1.25 (20.12) - (19.80) 2001 7,553 1.282 - 1.298 9,689 0.46 0.80 - 1.25 (7.30) - (6.89) Dreyfus VIF - Appreciation Portfolio - Initial Shares 2004 4,662 0.966 - 0.992 4,513 1.61 0.80 - 1.25 3.76 - 4.20 2003 5,330 0.931 - 0.952 4,971 1.41 0.80 - 1.25 19.67 - 20.20 2002 5,542 0.778 - 0.792 4,318 1.05 0.80 - 1.25 (17.76) - (17.33) 2001 5,842 0.946 - 0.958 5,534 0.85 0.80 - 1.25 (10.50) - (10.05) FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST Mutual Shares Securities Fund - 2004 106 1.335 - 1.345 142 0.53 0.80 - 1.25 11.25 - 11.71 Class 2 Shares 2003 25 1.200 - 1.204 30 -- 0.80 - 1.25 9.45 - 12.78 Templeton Developing Markets Securities Fund - Class 2 Shares 2004 50 1.230 61 -- 1.25 26.67 Templeton Foreign Securities Fund - Class 2 Shares 2004 223 1.153 - 1.156 257 0.15 0.80 - 1.25 7.34 - 19.85 Templeton Growth Securities Fund - Class 2 Shares 2004 584 1.123 - 1.126 655 -- 0.80 - 1.25 9.99 - 12.60
-69- NOTES TO FINANCIAL STATEMENTS - CONTINUED 8. FINANCIAL HIGHLIGHTS (CONTINUED)
EXPENSE TOTAL YEAR UNIT VALUE NET INVESTMENT(1) RATIO(2) RETURN(3) ENDED UNITS LOWEST TO ASSETS INCOME LOWEST TO LOWEST TO DEC 31 (000S) HIGHEST ($) ($000S) RATIO (%) HIGHEST (%) HIGHEST (%) ------ ------ ------------- ------- ------------- ----------- ----------------- GREENWICH STREET SERIES FUND Appreciation Portfolio 2004 3,285 1.013 - 1.029 3,329 1.21 0.80 - 1.25 7.54 - 7.86 2003 2,801 0.942 - 0.954 2,641 0.79 0.80 - 1.25 22.98 - 23.58 2002 1,847 0.766 - 0.772 1,415 2.46 0.80 - 1.25 (18.60) - (18.13) 2001 174 0.941 - 0.943 164 -- 0.80 - 1.25 (1.57) - (1.47) Equity Index Portfolio - Class II 2004 22,935 0.921 - 0.945 21,170 1.37 0.80 - 1.25 8.87 - 9.38 Shares 2003 23,011 0.846 - 0.864 19,501 1.04 0.80 - 1.25 26.08 - 26.69 2002 21,599 0.666 - 0.682 14,504 1.87 0.80 - 1.42 (23.54) - (23.02) 2001 20,009 0.871 - 0.886 17,517 0.69 0.80 - 1.42 (13.59) - (13.05) Fundamental Value Portfolio 2004 9,608 1.048 - 1.065 10,080 0.68 0.80 - 1.25 6.83 - 7.36 2003 8,875 0.981 - 0.992 8,710 0.67 0.80 - 1.25 37.01 - 37.40 2002 7,493 0.716 - 0.722 5,369 1.41 0.80 - 1.25 (22.26) - (21.86) 2001 2,778 0.921 - 0.924 2,560 0.28 0.80 - 1.25 (10.58) - (5.33) JANUS ASPEN SERIES Balanced Portfolio - Service Shares 2004 1,563 1.062 - 1.080 1,663 2.20 0.80 - 1.25 6.95 - 7.46 2003 1,581 0.993 - 1.005 1,572 1.89 0.80 - 1.25 12.33 - 12.79 2002 1,371 0.884 - 0.891 1,213 2.53 0.80 - 1.25 (7.92) - (7.38) 2001 289 0.960 277 2.90 1.25 (4.00) Mid Cap Growth Portfolio - Service 2004 213 0.865 184 -- 1.25 18.98 Shares 2003 129 0.727 94 -- 1.25 33.15 2002 86 0.546 47 -- 1.25 (29.09) 2001 76 0.770 59 -- 1.25 (10.47) Worldwide Growth Portfolio - 2004 9,468 0.565 - 0.577 5,350 0.91 0.80 - 1.25 3.29 - 3.78 Service Shares 2003 10,259 0.547 - 0.556 5,615 0.84 0.80 - 1.25 22.10 - 22.74 2002 11,018 0.448 - 0.453 4,937 0.59 0.80 - 1.25 (26.56) - (26.34) 2001 10,929 0.610 - 0.615 6,673 0.27 0.80 - 1.25 (23.65) - (23.22) LAZARD RETIREMENT SERIES, INC. Lazard Retirement Small Cap 2004 231 1.123 260 -- 1.25 11.30 Portfolio LORD ABBETT SERIES FUND, INC. Growth and Income Portfolio 2004 269 1.107 297 2.17 1.25 14.48 Mid-Cap Value Portfolio 2004 219 1.161 - 1.165 255 0.37 0.80 - 1.25 11.91 - 15.41 OPPENHEIMER VARIABLE ACCOUNT FUNDS Oppenheimer Main Street Fund/VA - Service Shares 2004 75 1.075 - 1.078 80 -- 0.80 - 1.25 10.37 - 11.36 PIMCO VARIABLE INSURANCE TRUST Total Return Portfolio - 2004 5,711 1.220 - 1.240 6,974 1.89 0.80 - 1.25 3.57 - 4.03 Administrative Class 2003 5,859 1.178 - 1.192 6,906 2.85 0.80 - 1.25 3.79 - 4.20 2002 4,905 1.135 - 1.144 5,572 4.04 0.80 - 1.25 7.69 - 8.23 2001 261 1.054 - 1.057 276 2.15 0.80 - 1.25 2.62 - 3.84
-70- NOTES TO FINANCIAL STATEMENTS - CONTINUED 8. FINANCIAL HIGHLIGHTS (CONTINUED)
EXPENSE TOTAL YEAR UNIT VALUE NET INVESTMENT(1) RATIO(2) RETURN(3) ENDED UNITS LOWEST TO ASSETS INCOME LOWEST TO LOWEST TO DEC 31 (000S) HIGHEST ($) ($000S) RATIO (%) HIGHEST (%) HIGHEST (%) ------ ------ ------------- ------- ------------- ----------- ----------------- PUTNAM VARIABLE TRUST Putnam VT Discovery Growth Fund - Class IB Shares 2004 93 0.776 - 0.789 72 -- 0.80 - 1.25 6.30 - 6.77 2003 99 0.730 - 0.739 73 -- 0.80 - 1.25 30.36 - 31.03 2002 112 0.560 - 0.564 63 -- 0.80 - 1.25 (30.52) - (27.51) 2001 + 0.806 + -- 1.25 0.00 Putnam VT International Equity Fund - Class IB Shares 2004 971 1.016 - 1.033 988 1.48 0.80 - 1.25 14.67 - 15.16 2003 951 0.886 - 0.897 843 0.82 0.80 - 1.25 26.93 - 27.60 2002 779 0.698 - 0.703 544 0.36 0.80 - 1.25 (18.65) - (18.35) 2001 135 0.858 - 0.861 116 -- 0.80 - 1.25 (14.20) - 14.04 Putnam VT Small Cap Value Fund - Class IB Shares 2004 3,256 1.620 - 1.647 5,280 0.32 0.80 - 1.25 24.62 - 25.25 2003 2,304 1.300 - 1.315 2,997 0.33 0.80 - 1.25 47.90 - 48.42 2002 2,190 0.879 - 0.886 1,928 0.11 0.80 - 1.25 (19.36) - (18.94) 2001 391 1.090 - 1.093 426 -- 0.80 - 1.25 2.64 - 2.82 SALOMON BROTHERS VARIABLE SERIES FUNDS INC. All Cap Fund - Class I 2004 8,897 1.555 - 1.596 13,852 0.55 0.80 - 1.25 6.95 - 7.40 2003 8,378 1.454 - 1.486 12,194 0.27 0.80 - 1.25 37.30 - 37.98 2002 8,083 1.059 - 1.077 8,566 0.44 0.80 - 1.25 (26.00) - (25.67) 2001 6,717 1.431 - 1.449 9,613 0.81 0.80 - 1.25 0.63 - 1.12 Investors Fund - Class I 2004 3,426 1.265 - 1.298 4,338 1.51 0.80 - 1.25 9.05 - 9.54 2003 3,364 1.160 - 1.185 3,907 1.44 0.80 - 1.25 30.63 - 31.23 2002 3,395 0.888 - 0.903 3,016 1.19 0.80 - 1.25 (23.97) - (23.67) 2001 3,228 1.168 - 1.183 3,773 0.92 0.80 - 1.25 (5.35) - (4.90) Small Cap Growth Fund - Class I 2004 598 1.046 - 1.064 626 -- 0.80 - 1.25 13.70 - 14.16 2003 420 0.920 - 0.932 386 -- 0.80 - 1.25 46.96 - 47.70 2002 318 0.626 199 -- 1.25 (35.53) 2001 123 0.971 - 0.974 119 -- 0.80 - 1.25 (1.82) - 1.88 Total Return Fund - Class I 2004 534 1.178 - 1.209 631 1.76 0.80 - 1.25 7.38 - 7.85 2003 548 1.097 - 1.121 601 1.79 0.80 - 1.25 14.51 - 14.97 2002 486 0.958 - 0.975 466 1.75 0.80 - 1.25 (8.06) - (7.58) 2001 336 1.042 - 1.055 350 2.38 0.80 - 1.25 (2.07) - (1.59) SMITH BARNEY INVESTMENT SERIES Smith Barney Dividend Strategy 2004 362 0.814 - 0.828 295 1.04 0.80 - 1.25 2.13 - 2.60 Portfolio 2003 269 0.797 - 0.807 214 0.67 0.80 - 1.25 21.87 - 22.46 2002 128 0.654 - 0.659 84 0.63 0.80 - 1.25 (26.93) - (26.53) 2001 86 0.895 - 0.897 77 -- 0.80 - 1.25 (11.91) - (5.08) Smith Barney Premier Selections All Cap Growth Portfolio 2004 47 0.872 - 0.887 41 -- 0.80 - 1.25 1.63 - 2.07 2003 28 0.858 - 0.869 24 -- 0.80 - 1.25 32.61 - 33.28 2002 14 0.647 9 0.07 1.25 (27.71) 2001 6 0.895 5 -- 1.25 (8.77) STRONG VARIABLE INSURANCE FUNDS, INC. Strong Multi Cap Value Fund II 2004 617 1.146 - 1.175 707 -- 0.80 - 1.25 15.29 - 15.88 2003 688 0.994 - 1.014 684 0.11 0.80 - 1.25 36.73 - 37.21 2002 782 0.727 - 0.739 569 0.56 0.80 - 1.25 (24.11) - (23.74) 2001 493 0.958 - 0.969 473 0.01 0.80 - 1.25 2.79 - 3.30
-71- NOTES TO FINANCIAL STATEMENTS - CONTINUED 8. FINANCIAL HIGHLIGHTS (CONTINUED)
EXPENSE TOTAL YEAR UNIT VALUE NET INVESTMENT(1) RATIO(2) RETURN(3) ENDED UNITS LOWEST TO ASSETS INCOME LOWEST TO LOWEST TO DEC 31 (000S) HIGHEST ($) ($000S) RATIO (%) HIGHEST (%) HIGHEST (%) ------ ------ ------------- ------- ------------- ----------- ----------------- THE TRAVELERS SERIES TRUST Convertible Securities Portfolio 2004 64 1.037 - 1.040 67 3.77 0.80 - 1.25 3.70 - 5.05 Disciplined Mid Cap Stock Portfolio 2004 4,425 1.585 - 1.625 7,024 0.29 0.80 - 1.25 15.02 - 15.58 2003 4,442 1.378 - 1.406 6,129 0.31 0.80 - 1.25 32.12 - 32.64 2002 4,350 1.043 - 1.060 4,541 0.61 0.80 - 1.25 (15.41) - (15.00) 2001 3,272 1.233 - 1.247 4,035 0.30 0.80 - 1.25 (5.23) - (4.81) Equity Income Portfolio 2004 12,452 1.208 - 1.240 15,082 1.41 0.80 - 1.25 8.54 - 9.06 2003 11,197 1.113 - 1.137 12,493 0.99 0.80 - 1.25 29.57 - 30.09 2002 9,855 0.859 - 0.874 8,484 1.21 0.80 - 1.25 (15.03) - (14.65) 2001 7,222 1.011 - 1.024 7,307 1.22 0.80 - 1.25 (7.76) - (7.33) Federated Stock Portfolio 2004 1,232 1.085 - 1.113 1,339 1.40 0.80 - 1.25 9.15 - 9.66 2003 1,366 0.994 - 1.015 1,359 1.52 0.80 - 1.25 25.98 - 26.56 2002 1,388 0.789 - 0.802 1,095 3.11 0.80 - 1.25 (20.30) - (19.96) 2001 774 0.990 - 1.002 767 1.31 0.80 - 1.25 0.41 - 0.91 Large Cap Portfolio 2004 8,947 0.830 - 0.852 7,440 0.80 0.80 - 1.25 5.20 - 5.58 2003 9,328 0.789 - 0.807 7,372 0.40 0.80 - 1.25 23.09 - 23.77 2002 9,548 0.641 - 0.652 6,127 0.48 0.80 - 1.25 (23.78) - (23.38) 2001 9,746 0.841 - 0.851 8,199 0.48 0.80 - 1.25 (18.35) - (18.02) Lazard International Stock 2004 1,417 0.947 - 0.971 1,344 1.92 0.80 - 1.25 14.37 - 14.78 Portfolio 2003 877 0.828 - 0.846 727 2.11 0.80 - 1.25 26.99 - 27.60 2002 716 0.652 - 0.663 467 2.81 0.80 - 1.25 (14.10) - (13.67) 2001 401 0.759 - 0.768 304 0.16 0.80 - 1.25 (27.09) - (26.79) Merrill Lynch Large Cap Core 2004 930 0.874 - 0.897 813 0.57 0.80 - 1.25 14.40 - 15.00 Portfolio 2003 940 0.764 - 0.780 718 0.72 0.80 - 1.25 19.75 - 20.18 2002 923 0.638 - 0.649 589 0.56 0.80 - 1.25 (26.07) - (25.74) 2001 1,262 0.863 - 0.874 1,089 0.04 0.80 - 1.25 (23.43) - (23.06) MFS Emerging Growth Portfolio 2004 60 0.749 45 -- 1.25 11.46 2003 33 0.672 22 -- 1.25 27.51 2002 33 0.527 18 -- 1.25 (35.10) 2001 10 0.812 8 -- 1.25 (3.45) MFS Mid Cap Growth Portfolio 2004 4,399 1.003 - 1.029 4,419 -- 0.80 - 1.25 12.70 - 13.20 2003 4,894 0.890 - 0.909 4,360 -- 0.80 - 1.25 35.26 - 36.08 2002 5,025 0.658 - 0.668 3,307 -- 0.80 - 1.25 (49.42) - (49.28) 2001 5,778 1.301 - 1.317 7,523 -- 0.80 - 1.25 (24.62) - (24.27) MFS Value Portfolio 2004 245 1.123 275 3.38 1.25 15.89
-72- NOTES TO FINANCIAL STATEMENTS - CONTINUED 8. FINANCIAL HIGHLIGHTS (CONTINUED)
EXPENSE TOTAL YEAR UNIT VALUE NET INVESTMENT(1) RATIO(2) RETURN(3) ENDED UNITS LOWEST TO ASSETS INCOME LOWEST TO LOWEST TO DEC 31 (000S) HIGHEST ($) ($000S) RATIO (%) HIGHEST (%) HIGHEST (%) ------ ------ ------------- ------- ------------- ----------- ----------------- THE TRAVELERS SERIES TRUST (CONTINUED) Pioneer Fund Portfolio 2004 2,208 0.825 - 0.847 1,825 0.87 0.80 - 1.25 9.71 - 10.29 2003 2,552 0.752 - 0.768 1,922 1.43 0.80 - 1.25 22.28 - 22.88 2002 2,896 0.615 - 0.625 1,783 6.61 0.80 - 1.25 (31.13) - (30.79) 2001 3,507 0.893 - 0.903 3,132 1.84 0.80 - 1.25 (23.94) - (23.67) Social Awareness Stock Portfolio 2004 4,117 0.901 - 0.925 3,713 0.75 0.80 - 1.25 4.89 - 5.47 2003 4,305 0.859 - 0.877 3,700 0.56 0.80 - 1.25 27.26 - 27.84 2002 4,410 0.675 - 0.686 2,978 0.85 0.80 - 1.25 (25.74) - (25.52) 2001 4,915 0.909 - 0.921 4,471 0.42 0.80 - 1.25 (16.76) - (16.27) Travelers Quality Bond Portfolio 2004 6,653 1.257 - 1.290 8,373 4.44 0.80 - 1.25 2.03 - 2.46 2003 7,480 1.232 - 1.259 9,224 4.94 0.80 - 1.25 5.66 - 6.16 2002 6,977 1.166 - 1.186 8,142 8.04 0.80 - 1.25 4.48 - 4.96 2001 5,244 1.116 - 1.130 5,855 3.38 0.80 - 1.25 5.78 - 6.30 U.S. Government Securities 2004 10,899 1.360 - 1.396 14,845 4.12 0.80 - 1.25 4.78 - 5.28 Portfolio 2003 13,517 1.298 - 1.326 17,559 4.63 0.80 - 1.25 1.49 - 1.92 2002 14,236 1.279 - 1.301 18,220 9.27 0.80 - 1.25 12.19 - 12.74 2001 6,129 1.140 - 1.154 6,989 4.10 0.80 - 1.25 4.49 - 5.00 TRAVELERS SERIES FUND INC. AIM Capital Appreciation Portfolio 2004 844 0.872 - 0.887 737 0.14 0.80 - 1.25 5.06 - 5.60 2003 806 0.830 - 0.840 669 -- 0.80 - 1.25 27.69 - 28.44 2002 837 0.650 - 0.654 544 -- 0.80 - 1.25 (24.57) - (4.97) MFS Total Return Portfolio 2004 14,602 1.336 - 1.371 19,560 2.88 0.80 - 1.25 10.05 - 10.56 2003 13,312 1.214 - 1.240 16,190 2.38 0.80 - 1.25 15.07 - 15.56 2002 12,061 1.055 - 1.073 12,741 7.12 0.80 - 1.25 (6.39) - (5.96) 2001 7,286 1.127 - 1.141 8,221 2.87 0.80 - 1.25 (1.31) - (0.78) Pioneer Strategic Income Portfolio 2004 905 1.380 - 1.415 1,250 7.32 0.80 - 1.25 9.61 - 10.12 2003 867 1.259 - 1.285 1,093 9.34 0.80 - 1.25 17.99 - 18.54 2002 796 1.067 - 1.084 850 28.67 0.80 - 1.25 4.61 - 5.04 2001 489 1.020 - 1.032 499 8.12 0.80 - 1.25 2.48 - 2.93 SB Adjustable Rate Income Portfolio - Class I Shares 2004 334 0.999 - 1.005 334 1.46 0.80 - 1.25 (0.10) - 0.40 2003 25 1.000 - 1.001 25 0.23 0.80 - 1.25 0.10 Smith Barney Aggressive Growth 2004 12,808 0.908 - 0.923 11,639 -- 0.80 - 1.25 8.61 - 9.10 Portfolio 2003 10,538 0.836 - 0.846 8,817 -- 0.80 - 1.25 32.91 - 33.44 2002 7,349 0.629 - 0.634 4,626 -- 0.80 - 1.25 (33.51) - (33.19) 2001 3,391 0.946 - 0.949 3,208 -- 0.80 - 1.25 (8.75) - (8.42)
-73- NOTES TO FINANCIAL STATEMENTS - CONTINUED 8. FINANCIAL HIGHLIGHTS (CONTINUED)
EXPENSE TOTAL YEAR UNIT VALUE NET INVESTMENT(1) RATIO(2) RETURN(3) ENDED UNITS LOWEST TO ASSETS INCOME LOWEST TO LOWEST TO DEC 31 (000S) HIGHEST ($) ($000S) RATIO (%) HIGHEST (%) HIGHEST (%) ------ ------ ------------- ------- ------------- ----------- ----------------- TRAVELERS SERIES FUND INC. (CONTINUED) Smith Barney High Income Portfolio 2004 984 1.137 - 1.166 1,119 8.51 0.80 - 1.25 9.01 - 9.48 2003 925 1.043 - 1.065 965 9.59 0.80 - 1.25 25.97 - 26.48 2002 416 0.828 - 0.842 344 25.32 0.80 - 1.25 (4.39) - (3.99) 2001 353 0.866 - 0.877 306 11.21 0.80 - 1.25 (5.04) - (4.47) Smith Barney International All Cap Growth Portfolio 2004 2,589 0.860 - 0.883 2,230 0.92 0.80 - 1.25 16.37 - 16.95 2003 2,810 0.739 - 0.755 2,079 1.04 0.80 - 1.25 25.89 - 26.47 2002 3,051 0.587 - 0.597 1,793 0.96 0.80 - 1.25 (26.63) - (26.30) 2001 3,337 0.800 - 0.810 2,671 -- 0.80 - 1.25 (32.03) - (31.70) Smith Barney Large Capitalization Growth Portfolio 2004 8,734 0.961 - 0.987 8,404 0.36 0.80 - 1.25 (0.93) - (0.40) 2003 8,150 0.970 - 0.991 7,914 0.03 0.80 - 1.25 45.65 - 46.38 2002 6,579 0.666 - 0.677 4,383 0.34 0.80 - 1.25 (25.67) - (25.36) 2001 7,152 0.896 - 0.907 6,410 -- 0.80 - 1.25 (13.60) - (13.21) Strategic Equity Portfolio 2004 12,448 0.838 - 0.861 10,454 1.38 0.80 - 1.25 8.83 - 9.40 2003 13,775 0.770 - 0.787 10,624 -- 0.80 - 1.25 30.95 - 31.61 2002 14,819 0.588 - 0.598 8,728 0.58 0.80 - 1.25 (34.45) - (34.14) 2001 16,490 0.897 - 0.908 14,803 0.20 0.80 - 1.25 (14.41) - (14.10) VAN KAMPEN LIFE INVESTMENT TRUST Comstock Portfolio - Class II 2004 341 1.453 - 1.464 495 0.35 0.80 - 1.25 15.96 - 16.47 Shares 2003 59 1.253 - 1.257 74 -- 0.80 - 1.25 9.78 - 13.19 Emerging Growth Portfolio - 2004 165 0.717 118 -- 1.25 5.44 Class II Shares 2003 146 0.680 99 -- 1.25 25.46 2002 187 0.542 101 0.02 1.25 (32.50) Enterprise Portfolio - Class II 2004 57 0.804 - 0.817 46 0.13 0.80 - 1.25 2.55 - 2.90 Shares 2003 57 0.784 45 0.15 1.25 24.05 2002 13 0.632 8 0.17 1.25 (30.47) 2001 5 0.909 4 -- 1.25 5.45 VARIABLE ANNUITY PORTFOLIOS Smith Barney Small Cap Growth Opportunities Portfolio 2004 275 1.112 - 1.130 306 0.08 0.80 - 1.25 14.17 - 14.60 2003 179 0.974 174 -- 1.25 40.14 2002 115 0.695 80 -- 1.25 (26.53) 2001 26 0.946 24 -- 1.25 (10.92) VARIABLE INSURANCE PRODUCTS FUND II Asset Manager Portfolio - Service 2004 4,953 0.969 - 0.990 4,806 2.38 0.80 - 1.25 3.86 - 4.32 Class 2 2003 4,344 0.933 - 0.949 4,057 3.20 0.80 - 1.25 16.19 - 16.73 2002 3,804 0.803 - 0.813 3,057 2.96 0.80 - 1.25 (10.18) - (9.67) 2001 2,092 0.894 - 0.900 1,871 3.34 0.80 - 1.25 (5.60) - (5.16) Contrafund(R) Portfolio - Service 2004 3,242 1.217 - 1.238 3,953 0.16 0.80 - 1.25 13.74 - 14.31 Class 2 2003 1,788 1.070 - 1.083 1,917 0.28 0.80 - 1.25 26.63 - 27.11 2002 1,347 0.845 - 0.852 1,140 0.13 0.80 - 1.25 (11.25) - (10.77) 2001 74 0.947 70 -- 1.25 0.42
-74- NOTES TO FINANCIAL STATEMENTS - CONTINUED 8. FINANCIAL HIGHLIGHTS (CONTINUED)
EXPENSE TOTAL YEAR UNIT VALUE NET INVESTMENT(1) RATIO(2) RETURN(3) ENDED UNITS LOWEST TO ASSETS INCOME LOWEST TO LOWEST TO DEC 31 (000S) HIGHEST ($) ($000S) RATIO (%) HIGHEST (%) HIGHEST (%) ------ ------ ------------- ------- ------------- ----------- ----------------- VARIABLE INSURANCE PRODUCTS FUND III Dynamic Capital Appreciation Portfolio - Service Class 2 2004 182 0.950 - 0.966 173 -- 0.80 - 1.25 0.00 - 0.42 2003 168 0.950 - 0.962 159 -- 0.80 - 1.25 23.38 - 23.97 2002 142 0.770 - 0.776 110 0.60 0.80 - 1.25 (10.60) - (8.77) Mid Cap Portfolio - Service Class 2 2004 2,701 1.537 - 1.563 4,157 -- 0.80 - 1.25 23.06 - 23.66 2003 1,686 1.249 - 1.264 2,107 0.23 0.80 - 1.25 36.65 - 37.24 2002 1,274 0.914 - 0.921 1,166 0.17 0.80 - 1.25 (11.18) - (10.76) 2001 115 1.029 118 -- 1.25 2.49
(1) These amounts represent the dividends, excluding distributions of capital gains, received by the subaccount from the underlying mutual fund, net of management fees assessed by the fund manager, divided by the average net assets. These ratios exclude those expenses, such as mortality and expense charges, that are assessed against contract owner accounts either through reductions in the unit values or the redemption of units. The recognition of investment income by the subaccount is affected by the timing of the declaration of dividends by the underlying fund in which the subaccount invests. (2) These amounts represent the annualized contract expenses of the separate account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to contract owner accounts through the redemption of units and expenses of the underlying fund have been excluded. (3) These amounts represent the total return for the period indicated, including changes in the value of the underlying fund, and expenses assessed through the reduction of unit values. These ratios do not include any expenses assessed through the redemption of units. The total return is calculated for each period indicated or from the effective date through the end of the reporting period. As the total return is presented as a range of minimum to maximum values, based on the product grouping representing the minimum and maximum expense ratio amounts, some individual contract total returns are not within the ranges presented. + Less than 1,000 -75- NOTES TO FINANCIAL STATEMENTS - CONTINUED 9. SCHEDULE OF ACCUMULATION AND ANNUITY UNITS FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003
CAPITAL APPRECIATION HIGH YIELD BOND MANAGED ASSETS FUND TRUST TRUST -------------------------- -------------------------- ------------------------- 2004 2003 2004 2003 2004 2003 ---- ---- ---- ---- ---- ---- Accumulation and annuity units beginning of year ..................... 23,062,419 24,496,379 5,263,654 4,540,628 19,478,799 18,744,170 Accumulation units purchased and transferred from other funding options 1,897,510 3,124,708 1,012,914 1,536,473 2,934,594 3,190,171 Accumulation units redeemed and transferred to other funding options .. (3,237,502) (4,558,668) (755,670) (811,730) (2,194,484) (2,455,542) Annuity units ........................... -- -- (1,571) (1,717) (5,675) -- ----------- ----------- ----------- ----------- ----------- ----------- Accumulation and annuity units end of year ........................... 21,722,427 23,062,419 5,519,327 5,263,654 20,213,234 19,478,799 =========== =========== =========== =========== =========== ===========
MONEY MARKET AIM V.I. PREMIER GLOBAL GROWTH FUND - PORTFOLIO EQUITY FUND - SERIES I CLASS 2 SHARES -------------------------- -------------------------- ------------------------- 2004 2003 2004 2003 2004 2003 ---- ---- ---- ---- ---- ---- Accumulation and annuity units beginning of year ..................... 16,151,431 20,404,899 324,995 278,341 -- -- Accumulation units purchased and transferred from other funding options 4,789,876 13,124,485 10,408 266,128 182,633 -- Accumulation units redeemed and transferred to other funding options .. (7,855,931) (17,377,389) (44,741) (219,474) (2,137) -- Annuity units ........................... (530) (564) -- -- -- -- ----------- ----------- ----------- ----------- ----------- ----------- Accumulation and annuity units end of year ........................... 13,084,846 16,151,431 290,662 324,995 180,496 -- =========== =========== =========== =========== =========== ===========
GROWTH FUND - GROWTH-INCOME FUND - CITISTREET DIVERSIFIED CLASS 2 SHARES CLASS 2 SHARES BOND FUND - CLASS I -------------------------- -------------------------- ------------------------- 2004 2003 2004 2003 2004 2003 ---- ---- ---- ---- ---- ---- Accumulation and annuity units beginning of year ..................... -- -- -- -- 58,879,226 58,474,561 Accumulation units purchased and transferred from other funding options 322,367 -- 487,533 -- 20,770,365 12,709,748 Accumulation units redeemed and transferred to other funding options .. (13,844) -- (8,242) -- (9,011,439) (12,302,105) Annuity units ........................... -- -- -- -- (2,546) (2,978) ----------- ----------- ----------- ----------- ----------- ----------- Accumulation and annuity units end of year ........................... 308,523 -- 479,291 -- 70,635,606 58,879,226 =========== =========== =========== =========== =========== ===========
CITISTREET CITISTREET CITISTREET INTERNATIONAL STOCK LARGE COMPANY STOCK SMALL COMPANY STOCK FUND - CLASS I FUND - CLASS I FUND - CLASS I -------------------------- -------------------------- ------------------------- 2004 2003 2004 2003 2004 2003 ---- ---- ---- ---- ---- ---- Accumulation and annuity units beginning of year ..................... 38,408,433 36,636,205 77,125,625 66,019,241 16,815,928 14,207,327 Accumulation units purchased and transferred from other funding options 10,113,538 15,481,380 22,593,671 19,868,228 4,163,222 4,901,395 Accumulation units redeemed and transferred to other funding options .. (7,197,539) (13,708,589) (10,601,511) (8,760,680) (3,149,597) (2,292,340) Annuity units ........................... (517) (563) (1,069) (1,164) (417) (454) ----------- ----------- ----------- ----------- ----------- ----------- Accumulation and annuity units end of year ........................... 41,323,915 38,408,433 89,116,716 77,125,625 17,829,136 16,815,928 =========== =========== =========== =========== =========== ===========
-76- NOTES TO FINANCIAL STATEMENTS - CONTINUED 9. SCHEDULE OF ACCUMULATION AND ANNUITY UNITS FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003 (CONTINUED)
CREDIT SUISSE DELAWARE VIP DELAWARE VIP TRUST EMERGING REIT SERIES - SMALL CAP VALUE MARKETS PORTFOLIO STANDARD CLASS SERIES - STANDARD CLASS -------------------------- -------------------------- ------------------------- 2004 2003 2004 2003 2004 2003 ---- ---- ---- ---- ---- ---- Accumulation and annuity units beginning of year ..................... 1,366,642 1,413,272 2,168,975 1,944,375 2,698,087 2,414,488 Accumulation units purchased and transferred from other funding options 170,773 127,296 992,377 598,149 542,923 799,280 Accumulation units redeemed and transferred to other funding options .. (199,473) (173,926) (488,701) (373,549) (411,439) (515,681) Annuity units ........................... -- -- -- -- -- -- ----------- ----------- ----------- ----------- ----------- ----------- Accumulation and annuity units end of year ........................... 1,337,942 1,366,642 2,672,651 2,168,975 2,829,571 2,698,087 =========== =========== =========== =========== =========== ===========
DREYFUS VIF - DREYFUS VIF - MUTUAL SHARES DEVELOPING LEADERS APPRECIATION PORTFOLIO - SECURITIES FUND - PORTFOLIO - INITIAL SHARES INITIAL SHARES CLASS 2 SHARES -------------------------- -------------------------- ------------------------- 2004 2003 2004 2003 2004 2003 ---- ---- ---- ---- ---- ---- Accumulation and annuity units beginning of year ..................... 8,177,899 8,146,388 5,329,607 5,541,825 24,822 -- Accumulation units purchased and transferred from other funding options 703,717 1,012,511 129,851 672,709 84,395 24,822 Accumulation units redeemed and transferred to other funding options .. (764,820) (981,000) (797,485) (884,746) (3,200) -- Annuity units ........................... -- -- (168) (181) -- -- ----------- ----------- ----------- ----------- ----------- ----------- Accumulation and annuity units end of year ........................... 8,116,796 8,177,899 4,661,805 5,329,607 106,017 24,822 =========== =========== =========== =========== =========== ===========
TEMPLETON DEVELOPING MARKETS TEMPLETON TEMPLETON SECURITIES FUND - FOREIGN SECURITIES FUND - GROWTH SECURITIES FUND - CLASS 2 SHARES CLASS 2 SHARES CLASS 2 SHARES -------------------------- -------------------------- ------------------------- 2004 2003 2004 2003 2004 2003 ---- ---- ---- ---- ---- ---- Accumulation and annuity units beginning of year ..................... -- -- -- -- -- -- Accumulation units purchased and transferred from other funding options 51,812 -- 233,390 -- 591,069 -- Accumulation units redeemed and transferred to other funding options .. (2,130) -- (10,664) -- (7,530) -- Annuity units ........................... -- -- -- -- -- -- ----------- ----------- ----------- ----------- ----------- ----------- Accumulation and annuity units end of year ........................... 49,682 -- 222,726 -- 583,539 -- =========== =========== =========== =========== =========== ===========
EQUITY INDEX PORTFOLIO - FUNDAMENTAL VALUE APPRECIATION PORTFOLIO CLASS II SHARES PORTFOLIO -------------------------- -------------------------- ------------------------- 2004 2003 2004 2003 2004 2003 ---- ---- ---- ---- ---- ---- Accumulation and annuity units beginning of year ..................... 2,800,681 1,846,562 23,011,114 21,598,801 8,875,057 7,493,393 Accumulation units purchased and transferred from other funding options 714,550 1,058,931 2,906,440 3,808,793 1,424,764 1,902,847 Accumulation units redeemed and transferred to other funding options .. (230,369) (104,812) (2,971,563) (2,387,350) (691,861) (521,183) Annuity units ........................... -- -- (10,773) (9,130) -- -- ----------- ----------- ----------- ----------- ----------- ----------- Accumulation and annuity units end of year ........................... 3,284,862 2,800,681 22,935,218 23,011,114 9,607,960 8,875,057 =========== =========== =========== =========== =========== ===========
-77- NOTES TO FINANCIAL STATEMENTS - CONTINUED 9. SCHEDULE OF ACCUMULATION AND ANNUITY UNITS FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003 (CONTINUED)
MID CAP GROWTH WORLDWIDE GROWTH BALANCED PORTFOLIO - PORTFOLIO - PORTFOLIO - SERVICE SHARES SERVICE SHARES SERVICE SHARES -------------------------- -------------------------- ------------------------- 2004 2003 2004 2003 2004 2003 ---- ---- ---- ---- ---- ---- Accumulation and annuity units beginning of year ..................... 1,581,101 1,370,660 128,580 85,735 10,258,947 11,017,837 Accumulation units purchased and transferred from other funding options 192,945 425,916 105,507 54,619 573,558 925,657 Accumulation units redeemed and transferred to other funding options .. (211,343) (215,475) (21,489) (11,774) (1,364,517) (1,684,547) Annuity units ........................... -- -- -- -- -- -- ----------- ----------- ----------- ----------- ----------- ----------- Accumulation and annuity units end of year ........................... 1,562,703 1,581,101 212,598 128,580 9,467,988 10,258,947 =========== =========== =========== =========== =========== ===========
LAZARD RETIREMENT GROWTH AND INCOME MID-CAP VALUE SMALL CAP PORTFOLIO PORTFOLIO PORTFOLIO -------------------------- -------------------------- ------------------------- 2004 2003 2004 2003 2004 2003 ---- ---- ---- ---- ---- ---- Accumulation and annuity units beginning of year ..................... -- -- -- -- -- -- Accumulation units purchased and transferred from other funding options 231,226 -- 268,562 -- 289,008 -- Accumulation units redeemed and transferred to other funding options .. -- -- -- -- (69,579) -- Annuity units ........................... -- -- -- -- -- -- ----------- ----------- ----------- ----------- ----------- ----------- Accumulation and annuity units end of year ........................... 231,226 -- 268,562 -- 219,429 -- =========== =========== =========== =========== =========== ===========
OPPENHEIMER TOTAL RETURN PUTNAM VT MAIN STREET FUND/VA - PORTFOLIO - DISCOVERY GROWTH SERVICE SHARES ADMINISTRATIVE CLASS FUND - CLASS IB SHARES -------------------------- -------------------------- ------------------------- 2004 2003 2004 2003 2004 2003 ---- ---- ---- ---- ---- ---- Accumulation and annuity units beginning of year ..................... -- -- 5,859,138 4,904,837 99,439 112,122 Accumulation units purchased and transferred from other funding options 74,713 -- 1,334,773 2,649,356 -- 29,279 Accumulation units redeemed and transferred to other funding options .. -- -- (1,483,206) (1,695,055) (6,539) (41,962) Annuity units ........................... -- -- -- -- -- -- ----------- ----------- ----------- ----------- ----------- ----------- Accumulation and annuity units end of year ........................... 74,713 -- 5,710,705 5,859,138 92,900 99,439 =========== =========== =========== =========== =========== ===========
PUTNAM VT PUTNAM VT INTERNATIONAL EQUITY SMALL CAP VALUE ALL CAP FUND - FUND - CLASS IB SHARES FUND - CLASS IB SHARES CLASS I -------------------------- -------------------------- ------------------------- 2004 2003 2004 2003 2004 2003 ---- ---- ---- ---- ---- ---- Accumulation and annuity units beginning of year ..................... 951,001 778,679 2,303,550 2,190,096 8,378,158 8,083,278 Accumulation units purchased and transferred from other funding options 171,496 1,735,608 1,223,872 737,359 1,351,931 1,106,384 Accumulation units redeemed and transferred to other funding options .. (151,580) (1,563,286) (271,738) (623,905) (831,148) (809,039) Annuity units ........................... -- -- -- -- (2,252) (2,465) ----------- ----------- ----------- ----------- ----------- ----------- Accumulation and annuity units end of year ........................... 970,917 951,001 3,255,684 2,303,550 8,896,689 8,378,158 =========== =========== =========== =========== =========== ===========
-78- NOTES TO FINANCIAL STATEMENTS - CONTINUED 9. SCHEDULE OF ACCUMULATION AND ANNUITY UNITS FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003 (CONTINUED)
INVESTORS FUND - SMALL CAP GROWTH TOTAL RETURN FUND - CLASS I FUND - CLASS I CLASS I -------------------------- -------------------------- ------------------------- 2004 2003 2004 2003 2004 2003 ---- ---- ---- ---- ---- ---- Accumulation and annuity units beginning of year ..................... 3,363,831 3,394,919 419,725 317,694 547,540 486,202 Accumulation units purchased and transferred from other funding options 511,614 354,516 345,545 170,434 111,329 147,927 Accumulation units redeemed and transferred to other funding options .. (449,348) (385,604) (166,824) (68,403) (124,449) (86,589) Annuity units ........................... -- -- -- -- -- -- ----------- ----------- ----------- ----------- ----------- ----------- Accumulation and annuity units end of year ........................... 3,426,097 3,363,831 598,446 419,725 534,420 547,540 =========== =========== =========== =========== =========== ===========
SMITH BARNEY SMITH BARNEY PREMIER SELECTIONS DIVIDEND STRATEGY ALL CAP GROWTH STRONG MULTI CAP PORTFOLIO PORTFOLIO VALUE FUND II -------------------------- -------------------------- ------------------------- 2004 2003 2004 2003 2004 2003 ---- ---- ---- ---- ---- ---- Accumulation and annuity units beginning of year ..................... 268,796 128,456 28,134 14,026 687,643 782,251 Accumulation units purchased and transferred from other funding options 93,871 147,824 44,387 38,104 72,362 49,702 Accumulation units redeemed and transferred to other funding options .. (969) (7,484) (25,677) (23,996) (142,832) (144,310) Annuity units ........................... (15) -- -- -- -- -- ----------- ----------- ----------- ----------- ----------- ----------- Accumulation and annuity units end of year ........................... 361,683 268,796 46,844 28,134 617,173 687,643 =========== =========== =========== =========== =========== ===========
CONVERTIBLE SECURITIES DISCIPLINED MID CAP EQUITY INCOME PORTFOLIO STOCK PORTFOLIO PORTFOLIO -------------------------- -------------------------- ------------------------- 2004 2003 2004 2003 2004 2003 ---- ---- ---- ---- ---- ---- Accumulation and annuity units beginning of year ..................... -- -- 4,442,072 4,349,558 11,197,244 9,855,053 Accumulation units purchased and transferred from other funding options 103,687 -- 621,797 852,903 2,607,475 2,720,102 Accumulation units redeemed and transferred to other funding options .. (39,345) -- (638,504) (760,389) (1,353,072) (1,377,814) Annuity units ........................... -- -- -- -- (89) (97) ----------- ----------- ----------- ----------- ----------- ----------- Accumulation and annuity units end of year ........................... 64,342 -- 4,425,365 4,442,072 12,451,558 11,197,244 =========== =========== =========== =========== =========== ===========
FEDERATED STOCK LARGE CAP LAZARD INTERNATIONAL PORTFOLIO PORTFOLIO STOCK PORTFOLIO -------------------------- -------------------------- ------------------------- 2004 2003 2004 2003 2004 2003 ---- ---- ---- ---- ---- ---- Accumulation and annuity units beginning of year ..................... 1,365,922 1,387,506 9,328,389 9,548,425 876,789 715,825 Accumulation units purchased and transferred from other funding options 37,954 87,003 603,578 950,784 680,940 223,018 Accumulation units redeemed and transferred to other funding options .. (171,409) (108,587) (985,282) (1,170,820) (140,310) (61,975) Annuity units ........................... -- -- -- -- (73) (79) ----------- ----------- ----------- ----------- ----------- ----------- Accumulation and annuity units end of year ........................... 1,232,467 1,365,922 8,946,685 9,328,389 1,417,346 876,789 =========== =========== =========== =========== =========== ===========
-79- NOTES TO FINANCIAL STATEMENTS - CONTINUED 9. SCHEDULE OF ACCUMULATION AND ANNUITY UNITS FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003 (CONTINUED)
MERRILL LYNCH LARGE CAP CORE MFS EMERGING MFS MID CAP PORTFOLIO GROWTH PORTFOLIO GROWTH PORTFOLIO -------------------------- -------------------------- ------------------------- 2004 2003 2004 2003 2004 2003 ---- ---- ---- ---- ---- ---- Accumulation and annuity units beginning of year ..................... 940,275 922,641 33,417 33,417 4,893,524 5,025,352 Accumulation units purchased and transferred from other funding options 181,396 102,627 39,199 -- 448,415 833,255 Accumulation units redeemed and transferred to other funding options .. (191,801) (84,993) (12,934) -- (941,717) (964,156) Annuity units ........................... -- -- -- -- (847) (927) ----------- ----------- ----------- ----------- ----------- ----------- Accumulation and annuity units end of year ........................... 929,870 940,275 59,682 33,417 4,399,375 4,893,524 =========== =========== =========== =========== =========== ===========
MFS VALUE PIONEER FUND SOCIAL AWARENESS PORTFOLIO PORTFOLIO STOCK PORTFOLIO -------------------------- -------------------------- ------------------------- 2004 2003 2004 2003 2004 2003 ---- ---- ---- ---- ---- ---- Accumulation and annuity units beginning of year ..................... -- -- 2,552,397 2,895,679 4,304,699 4,409,840 Accumulation units purchased and transferred from other funding options 256,067 -- 42,318 83,881 401,160 360,683 Accumulation units redeemed and transferred to other funding options .. (11,073) -- (387,129) (427,163) (589,105) (465,824) Annuity units ........................... -- -- -- -- -- -- ----------- ----------- ----------- ----------- ----------- ----------- Accumulation and annuity units end of year ........................... 244,994 -- 2,207,586 2,552,397 4,116,754 4,304,699 =========== =========== =========== =========== =========== ===========
TRAVELERS QUALITY U.S. GOVERNMENT AIM CAPITAL BOND PORTFOLIO SECURITIES PORTFOLIO APPRECIATION PORTFOLIO -------------------------- -------------------------- ------------------------- 2004 2003 2004 2003 2004 2003 ---- ---- ---- ---- ---- ---- Accumulation and annuity units beginning of year ..................... 7,479,643 6,977,000 13,517,126 14,235,641 806,248 836,592 Accumulation units purchased and transferred from other funding options 1,100,855 2,300,882 880,508 3,905,503 157,160 287,768 Accumulation units redeemed and transferred to other funding options .. (1,924,044) (1,796,738) (3,497,892) (4,620,990) (119,833) (318,112) Annuity units ........................... (3,920) (1,501) (818) (3,028) -- -- ----------- ----------- ----------- ----------- ----------- ----------- Accumulation and annuity units end of year ........................... 6,652,534 7,479,643 10,898,924 13,517,126 843,575 806,248 =========== =========== =========== =========== =========== ===========
SB ADJUSTABLE RATE MFS TOTAL RETURN PIONEER STRATEGIC INCOME PORTFOLIO - PORTFOLIO INCOME PORTFOLIO CLASS I SHARES -------------------------- -------------------------- ------------------------- 2004 2003 2004 2003 2004 2003 ---- ---- ---- ---- ---- ---- Accumulation and annuity units beginning of year ..................... 13,312,081 12,061,228 866,848 796,336 24,560 -- Accumulation units purchased and transferred from other funding options 2,831,466 2,898,326 131,960 353,674 385,512 52,689 Accumulation units redeemed and transferred to other funding options .. (1,540,352) (1,644,742) (94,258) (283,162) (76,002) (28,129) Annuity units ........................... (770) (2,731) -- -- -- -- ----------- ----------- ----------- ----------- ----------- ----------- Accumulation and annuity units end of year ........................... 14,602,425 13,312,081 904,550 866,848 334,070 24,560 =========== =========== =========== =========== =========== ===========
-80- NOTES TO FINANCIAL STATEMENTS - CONTINUED 9. SCHEDULE OF ACCUMULATION AND ANNUITY UNITS FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003 (CONTINUED)
SMITH BARNEY SMITH BARNEY SMITH BARNEY AGGRESSIVE GROWTH HIGH INCOME INTERNATIONAL ALL CAP PORTFOLIO PORTFOLIO GROWTH PORTFOLIO -------------------------- -------------------------- ------------------------- 2004 2003 2004 2003 2004 2003 ---- ---- ---- ---- ---- ---- Accumulation and annuity units beginning of year ..................... 10,537,693 7,349,316 925,251 415,761 2,809,552 3,051,156 Accumulation units purchased and transferred from other funding options 3,541,929 4,119,242 187,652 728,531 142,772 1,788,388 Accumulation units redeemed and transferred to other funding options .. (1,271,624) (930,865) (129,258) (219,041) (363,630) (2,029,992) Annuity units ........................... -- -- -- -- -- -- ----------- ----------- ----------- ----------- ----------- ----------- Accumulation and annuity units end of year ........................... 12,807,998 10,537,693 983,645 925,251 2,588,694 2,809,552 =========== =========== =========== =========== =========== ===========
SMITH BARNEY LARGE CAPITALIZATION STRATEGIC EQUITY COMSTOCK PORTFOLIO - GROWTH PORTFOLIO PORTFOLIO CLASS II SHARES -------------------------- -------------------------- ------------------------- 2004 2003 2004 2003 2004 2003 ---- ---- ---- ---- ---- ---- Accumulation and annuity units beginning of year ..................... 8,150,121 6,579,425 13,774,701 14,818,799 59,125 -- Accumulation units purchased and transferred from other funding options 1,922,192 2,554,716 486,686 449,731 350,008 60,715 Accumulation units redeemed and transferred to other funding options .. (1,337,349) (983,116) (1,810,744) (1,491,396) (68,399) (1,590) Annuity units ........................... (803) (904) (2,462) (2,433) -- -- ----------- ----------- ----------- ----------- ----------- ----------- Accumulation and annuity units end of year ........................... 8,734,161 8,150,121 12,448,181 13,774,701 340,734 59,125 =========== =========== =========== =========== =========== ===========
SMITH BARNEY EMERGING GROWTH SMALL CAP GROWTH PORTFOLIO - ENTERPRISE PORTFOLIO - OPPORTUNITIES CLASS II SHARES CLASS II SHARES PORTFOLIO -------------------------- -------------------------- ------------------------- 2004 2003 2004 2003 2004 2003 ---- ---- ---- ---- ---- ---- Accumulation and annuity units beginning of year ..................... 145,755 187,292 57,287 13,084 178,822 114,615 Accumulation units purchased and transferred from other funding options 28,474 83,879 -- 44,203 221,535 149,553 Accumulation units redeemed and transferred to other funding options .. (9,579) (125,416) (152) -- (125,229) (85,346) Annuity units ........................... -- -- -- -- -- -- ----------- ----------- ----------- ----------- ----------- ----------- Accumulation and annuity units end of year ........................... 164,650 145,755 57,135 57,287 275,128 178,822 =========== =========== =========== =========== =========== ===========
ASSET MANAGER DYNAMIC CAPITAL PORTFOLIO - CONTRAFUND(R) PORTFOLIO - APPRECIATION PORTFOLIO - SERVICE CLASS 2 SERVICE CLASS 2 SERVICE CLASS 2 -------------------------- -------------------------- ------------------------- 2004 2003 2004 2003 2004 2003 ---- ---- ---- ---- ---- ---- Accumulation and annuity units beginning of year ..................... 4,343,987 3,803,966 1,788,367 1,346,880 167,759 142,442 Accumulation units purchased and transferred from other funding options 1,022,917 1,020,873 1,631,431 757,590 111,923 112,540 Accumulation units redeemed and transferred to other funding options .. (413,805) (480,852) (177,402) (316,103) (98,168) (87,223) Annuity units ........................... -- -- -- -- -- -- ----------- ----------- ----------- ----------- ----------- ----------- Accumulation and annuity units end of year ........................... 4,953,099 4,343,987 3,242,396 1,788,367 181,514 167,759 =========== =========== =========== =========== =========== ===========
-81- NOTES TO FINANCIAL STATEMENTS - CONTINUED 9. SCHEDULE OF ACCUMULATION AND ANNUITY UNITS FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003 (CONTINUED)
MID CAP PORTFOLIO - SERVICE CLASS 2 COMBINED ------------------------ -------------------------- 2004 2003 2004 2003 ---- ---- ---- ---- Accumulation and annuity units beginning of year ..................... 1,686,097 1,273,889 465,404,728 441,014,365 Accumulation units purchased and transferred from other funding options 1,362,143 543,301 107,342,500 121,207,099 Accumulation units redeemed and transferred to other funding options .. (347,127) (131,093) (74,839,638) (96,785,820) Annuity units ........................... -- -- (35,315) (30,916) --------- --------- ----------- ----------- Accumulation and annuity units end of year ........................... 2,701,113 1,686,097 497,872,275 465,404,728 ========= ========= =========== ===========
-82- REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The Board of Directors of the Travelers Life and Annuity Company and Owners of Variable Annuity Contracts of The Travelers Separate Account Six for Variable Annuities: We have audited the accompanying statement of assets and liabilities of The Travelers Separate Account Six for Variable Annuities as of December 31, 2004 and the related statement of operations for the year then ended, the statement of changes in net assets for each of years in the two-year period then ended, and the financial highlights for each of the years in the four-year period then ended. These financial statements and financial highlights are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights 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 securities owned as of December 31, 2004, 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 audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of The Travelers Separate Account Six for Variable Annuities as of December 31, 2004, the results of its operations for the year then ended, the changes in the net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the four-year period then ended, in conformity with accounting principles generally accepted in the United States of America. /s/ KPMG LLP Hartford, Connecticut March 21, 2005 -83- This page intentionally left blank INDEPENDENT AUDITORS -------------------- KPMG LLP Hartford, Connecticut This report is prepared for the general information of contract owners and is not an offer of units of The Travelers Separate Account Six for Variable Annuities or shares of Separate Account Six's underlying funds. It should not be used in connection with any offer except in conjunction with the Prospectus for The Travelers Separate Account Six for Variable Annuities product(s) offered by The Travelers Life and Annuity Company and the Prospectuses for the underlying funds, which collectively contain all pertinent information, including additional information on charges and expenses. VG-SEP6 (Annual) (12-04) Printed in U.S.A. REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The Board of Directors and Shareholder The Travelers Life and Annuity Company: We have audited the accompanying balance sheets of The Travelers Life and Annuity Company as of December 31, 2004 and 2003, and the related statements of income, changes in shareholder's equity, and cash flows for each of the years in the three-year period ended December 31, 2004. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). 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. 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 audits provide 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 Life and Annuity Company as of December 31, 2004 and 2003, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2004, in conformity with U.S. generally accepted accounting principles. As discussed in Note 1 to the financial statements, the Company changed its methods of accounting and reporting for certain nontraditional long-duration contracts and for separate accounts in 2004 and for goodwill and intangible assets in 2002. /s/ KPMG LLP Hartford, Connecticut March 28, 2005 1 THE TRAVELERS LIFE AND ANNUITY COMPANY STATEMENTS OF INCOME ($ IN MILLIONS) FOR THE YEAR ENDED DECEMBER 31, 2004 2003 2002 ---- ---- ---- REVENUES Premiums $ 40 $ 41 $ 43 Net investment income 389 356 312 Net realized investment gains (losses) 17 (7) (31) Fee income 371 237 190 Other revenues 5 19 19 - ------------------------------------------------------------------------------- Total Revenues 822 646 533 - ------------------------------------------------------------------------------- BENEFITS AND EXPENSES Current and future insurance benefits 85 90 94 Interest credited to contractholders 241 217 181 Amortization of deferred acquisition costs 226 136 67 General and administrative expenses 63 49 32 - ------------------------------------------------------------------------------- Total Benefits and Expenses 615 492 374 - ------------------------------------------------------------------------------- Income before federal income taxes 207 154 159 - ------------------------------------------------------------------------------- Federal income taxes Current 96 74 (31) Deferred (47) (39) 87 - ------------------------------------------------------------------------------- Total Federal Income Taxes 49 35 56 - ------------------------------------------------------------------------------- Net Income $ 158 $ 119 $ 103 =============================================================================== See Notes to Financial Statements. 2 THE TRAVELERS LIFE AND ANNUITY COMPANY BALANCE SHEETS ($IN MILLIONS)
AT DECEMBER 31, 2004 2003 - ------------------------------------------------------------------------------------------------------------ ASSETS Fixed maturities, available for sale at fair value (including $133 and $131 subject to securities lending agreements) (cost $5,929 and $5,034) $ 6,261 $ 5,357 Equity securities, at fair value (cost $16 and $8) 19 8 Mortgage loans 212 136 Short-term securities 420 195 Other invested assets 417 393 - ------------------------------------------------------------------------------------------------------------ Total Investments 7,329 6,089 - ------------------------------------------------------------------------------------------------------------ Separate and variable accounts 11,631 9,690 Deferred acquisition costs 1,522 1,279 Premiums and fees receivable 75 67 Other assets 268 313 - ------------------------------------------------------------------------------------------------------------ Total Assets $20,825 $17,438 - ------------------------------------------------------------------------------------------------------------ LIABILITIES Future policy benefits and claims $ 1,079 $ 1,098 Contractholder funds 5,227 4,512 Separate and variable accounts 11,631 9,690 Deferred federal income taxes 180 225 Other liabilities 747 515 - ------------------------------------------------------------------------------------------------------------ Total Liabilities 18,864 16,039 - ------------------------------------------------------------------------------------------------------------ SHAREHOLDER'S EQUITY Common stock, par value $100; 100,000 shares authorized, 30,000 issued and outstanding 3 3 Additional paid-in capital 817 417 Retained earnings 922 764 Accumulated other changes in equity from nonowner sources 219 215 - ------------------------------------------------------------------------------------------------------------ Total Shareholder's Equity 1,961 1,399 - ------------------------------------------------------------------------------------------------------------ Total Liabilities and Shareholder's Equity $20,825 $17,438 ============================================================================================================
See Notes to Financial Statements. 3 THE TRAVELERS LIFE AND ANNUITY COMPANY STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY ($ IN MILLIONS)
FOR THE YEAR ENDED DECEMBER 31, - ----------------------------------------------------------------------------------------- COMMON STOCK 2004 2003 2002 - ----------------------------------------------------------------------------------------- Balance, beginning of year $ 3 $ 3 $ 3 Changes in common stock -- -- -- - ----------------------------------------------------------------------------------------- Balance, end of year $ 3 $ 3 $ 3 ========================================================================================= - ----------------------------------------------------------------------------------------- ADDITIONAL PAID-IN CAPITAL - ----------------------------------------------------------------------------------------- Balance, beginning of year $ 417 $ 417 $ 417 Capital contributed by parent 400 -- -- - ----------------------------------------------------------------------------------------- Balance, end of year $ 817 $ 417 $ 417 ========================================================================================= - ----------------------------------------------------------------------------------------- RETAINED EARNINGS - ----------------------------------------------------------------------------------------- Balance, beginning of year $ 764 $ 645 $ 542 Net income 158 119 103 - ----------------------------------------------------------------------------------------- Balance, end of year $ 922 $ 764 $ 645 ========================================================================================= - ----------------------------------------------------------------------------------------- ACCUMULATED OTHER CHANGES IN EQUITY FROM NONOWNER SOURCES - ----------------------------------------------------------------------------------------- Balance, beginning of year $ 215 $ 95 $ 16 Unrealized gains, net of tax 9 123 72 Derivative instrument hedging activity gains (losses), net of tax (5) (3) 7 - ----------------------------------------------------------------------------------------- Balance, end of year $ 219 $ 215 $ 95 ========================================================================================= - ----------------------------------------------------------------------------------------- SUMMARY OF CHANGES IN EQUITY FROM NONOWNER SOURCES - ----------------------------------------------------------------------------------------- Net income $ 158 $ 119 $ 103 Other changes in equity from nonowner sources 4 120 79 - ----------------------------------------------------------------------------------------- Total changes in equity from nonowner sources $ 162 $ 239 $ 182 ========================================================================================= - ----------------------------------------------------------------------------------------- TOTAL SHAREHOLDER'S EQUITY - ----------------------------------------------------------------------------------------- Balance, beginning of year $ 1,399 $ 1,160 $ 978 Changes in total shareholder's equity 562 239 182 - ----------------------------------------------------------------------------------------- Balance, end of year $ 1,961 $ 1,399 $ 1,160 =========================================================================================
See Notes to Financial Statements. 4 THE TRAVELERS LIFE AND ANNUITY COMPANY STATEMENTS OF CASH FLOWS INCREASE (DECREASE) IN CASH ($ IN MILLIONS)
FOR THE YEARS ENDED DECEMBER 31, 2004 2003 2002 - ----------------------------------------------------------------------------------------------- CASH FLOWS FROM OPERATING ACTIVITIES Premiums collected $ 39 $ 44 $ 44 Net investment income received 383 320 277 Fee and other income received 399 265 239 Benefits and claims paid (134) (106) (104) Interest paid to contractholders (241) (217) (181) Operating expenses paid (470) (437) (344) Income taxes (paid) received 179 (135) 89 Other (46) 41 (21) - ----------------------------------------------------------------------------------------------- Net Cash Provided by (Used in) Operating Activities 109 (225) (1) - ----------------------------------------------------------------------------------------------- CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from maturities of investments Fixed maturities 489 520 255 Mortgage loans 53 23 36 Proceeds from sales of investments Fixed maturities 802 1,658 1,690 Equity securities 19 8 36 Mortgage loans 6 -- -- Real estate held for sale 2 1 -- Purchases of investments Fixed maturities (2,179) (2,824) (3,018) Equity securities (30) (4) (36) Mortgage loans (136) (28) (45) Policy loans, net (5) 1 (11) Short-term securities (purchases) sales, net (225) 280 (269) Other investment purchases, net (43) (46) (21) Securities transactions in course of settlement, net 23 (4) 118 - ----------------------------------------------------------------------------------------------- Net Cash Used in Investing Activities (1,224) (415) (1,265) - ----------------------------------------------------------------------------------------------- CASH FLOWS FROM FINANCING ACTIVITIES Contractholder fund deposits 1,023 914 1,486 Contractholder fund withdrawals (308) (288) (224) Contribution from parent company 400 -- -- - ----------------------------------------------------------------------------------------------- Net Cash Provided by Financing Activities 1,115 626 1,262 - ----------------------------------------------------------------------------------------------- Net increase (decrease) in cash -- (14) (4) Cash at beginning of year 1 15 19 - ----------------------------------------------------------------------------------------------- Cash at December 31, $ 1 $ 1 $ 15 ===============================================================================================
See Notes to Financial Statements. 5 THE TRAVELERS LIFE AND ANNUITY COMPANY NOTES TO FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Significant accounting policies used in the preparation of the accompanying financial statements follow. BASIS OF PRESENTATION The Travelers Life and Annuity Company (the Company) is a wholly owned subsidiary of The Travelers Insurance Company (TIC), a wholly owned subsidiary of Citigroup Insurance Holding Corporation (CIHC), an indirect wholly owned subsidiary of Citigroup Inc. (Citigroup), a diversified global financial services holding company whose businesses provide a broad range of financial services to consumer and corporate customers around the world. On January 31, 2005, Citigroup announced its intention to sell its Life Insurance and Annuities business, which includes TIC, the Company and certain other businesses, to MetLife. TIC's Primerica Life Segment will remain part of Citigroup. See Note 14. The financial statements and accompanying footnotes of the Company are prepared in conformity with U.S. generally accepted accounting principles (GAAP). The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and benefits and expenses during the reporting period. Actual results could differ from those estimates. Certain prior year amounts have been reclassified to conform to the 2004 presentation. ACCOUNTING CHANGES ACCOUNTING AND REPORTING BY INSURANCE ENTERPRISES FOR CERTAIN NONTRADITIONAL LONG-DURATION CONTRACTS AND FOR SEPARATE ACCOUNTS On January 1, 2004, the Company adopted the Accounting Standards Executive Committee of the American Institute of Certified Public Accountants Statement of Position 03-1, "Accounting and Reporting by Insurance Enterprises for Certain Nontraditional Long-Duration Contracts and for Separate Accounts" (SOP 03-1). The main components of SOP 03-1 provide guidance on accounting and reporting by insurance enterprises for separate account presentation, accounting for an insurer's interest in a separate account, transfers to a separate account, valuation of certain liabilities, contracts with death or other benefit features, contracts that provide annuitization benefits, and sales inducements to contract holders. 6 THE TRAVELERS LIFE AND ANNUITY COMPANY NOTES TO FINANCIAL STATEMENTS (CONTINUED) The following summarizes the more significant aspects of the Company's adoption of SOP 03-1: VARIABLE ANNUITY CONTRACTS WITH GUARANTEED MINIMUM DEATH BENEFIT FEATURES. For variable annuity contracts with guaranteed minimum death benefit (GMDB), features SOP 03-1 requires the reporting entity to categorize the contract as either an insurance or investment contract based upon the significance of mortality or morbidity risk. SOP 03-1 provides explicit guidance for calculating a reserve for insurance contracts, and provides that the reporting entity does not hold reserves for investment contracts (i.e. there is no significant mortality risk). The Company determined that the mortality risk on its GMDB features was not a significant component of the total variable annuity product, and accordingly continued to classify these products as investment contracts. RESERVING FOR UNIVERSAL LIFE AND VARIABLE UNIVERSAL LIFE CONTRACTS. SOP 03-1 requires that a reserve, in addition to the account balance, be established for certain insurance benefit features provided under universal life (UL) and variable universal life (VUL) products if the amounts assessed against the contract holder each period for the insurance benefit feature are assessed in a manner that is expected to result in profits in earlier years and losses in subsequent years from the insurance benefit function. The Company's UL and VUL products were reviewed to determine if an additional reserve is required under SOP 03-1. The Company determined that SOP 03-1 applied to some of its UL and VUL contracts with these features and established an additional reserve of less than $1 million. SALES INDUCEMENTS TO CONTRACT HOLDERS. SOP 03-1 provides that, prospectively, sales inducements provided to contract holders meeting certain criteria are capitalized and amortized over the expected life of the contract as a component of benefit expense. During 2004, the Company capitalized sales inducements of approximately $24.9 million in accordance with SOP 03-1. These inducements relate to bonuses on certain products offered by the Company. For the twelve months ended December 31, 2004, amortization of these capitalized amounts was insignificant. CONSOLIDATION OF VARIABLE INTEREST ENTITIES On January 1, 2004, the Company adopted the Financial Accounting Standards Board (FASB) Interpretation No. 46, "Consolidation of Variable Interest Entities (revised December 2003)" (FIN 46-R), which includes substantial changes from the original FIN 46. Included in these changes, the calculation of expected losses and expected residual returns has been altered to reduce the impact of decision maker and guarantor fees in the calculation of expected residual returns and expected losses. In addition, the definition of a variable interest has been changed in the revised guidance. FIN 46 and FIN 46-R change the method of determining whether certain entities should be included in the Company's financial statements. The Company has evaluated the impact of applying FIN 46-R to existing variable interest entities in which it has variable interests. The effect of adopting FIN 46-R on the Company's balance sheet is immaterial. An entity is subject to FIN 46 and FIN 46-R and is called a VIE if it has (1) equity that is insufficient to permit the entity to finance its activities without additional subordinated financial support from other parties, or (2) equity investors that cannot make significant decisions about the entity's operations or that do not absorb the expected losses or receive the expected returns of the entity. All other entities are evaluated for consolidation under Statement of Financial Accounting Standards (SFAS) No. 94, "Consolidation of All Majority-Owned Subsidiaries" (SFAS 94). A VIE is consolidated by its primary beneficiary, which is the party involved with the VIE that has a majority of the expected losses or a majority of the expected residual returns or both. 7 THE TRAVELERS LIFE AND ANNUITY COMPANY NOTES TO FINANCIAL STATEMENTS (CONTINUED) For any VIEs that must be consolidated under FIN 46 that were created before February 1, 2003, the assets, liabilities, and noncontrolling interests of the VIE are initially measured at their carrying amounts with any difference between the net amount added to the balance sheet and any previously recognized interest being recognized as the cumulative effect of an accounting change. If determining the carrying amounts is not practicable, fair value at the date FIN 46 first applies may be used to measure the assets, liabilities, and noncontrolling interests of the VIE. In October 2003, the FASB announced that the effective date of FIN 46 was deferred from July 1, 2003 to periods ending after December 15, 2003 for VIEs created prior to February 1, 2003. The Company elected to implement the provisions of FIN 46 in the 2003 third quarter. The implementation of FIN 46 encompassed a review of numerous entities to determine the impact of adoption and considerable judgment was used in evaluating whether or not a VIE should be consolidated. Based upon the implementation guidance, the Company is not considered a primary beneficiary of any VIEs, thus no consolidations were required due to the implementation of FIN 46 on July 1, 2003. The Company does, however, hold a significant interest in other VIEs, none of which were material to the Company's financial statements. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement 133 on Derivative Instruments and Hedging Activities" (SFAS 149). SFAS 149 amends and clarifies accounting for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities under SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities" (SFAS 133). In particular, this Statement clarifies under what circumstances a contract with an initial net investment meets the characteristic of a derivative and when a derivative contains a financing component that warrants special reporting in the statement of cash flows. This Statement is generally effective for contracts entered into or modified after June 30, 2003 and did not have an impact on the Company's financial statements. COSTS ASSOCIATED WITH EXIT OR DISPOSAL ACTIVITIES On January 1, 2003, the Company adopted SFAS No. 146, "Accounting for Costs Associated with Exit or Disposal Activities" (SFAS 146). SFAS 146 requires that a liability for costs associated with exit or disposal activities, other than in a business combination, be recognized when the liability is incurred. Previous generally accepted accounting principles provided for the recognition of such costs at the date of management's commitment to an exit plan. In addition, SFAS 146 requires that the liability be measured at fair value and be adjusted for changes in estimated cash flows. The provisions of the new standard are effective for exit or disposal activities initiated after December 31, 2002. The adoption of SFAS 146 did not have an impact on the Company's financial statements. STOCK-BASED COMPENSATION On January 1, 2003, the Company adopted the fair value recognition provisions of SFAS No. 123, Accounting for Stock-Based Compensation" (SFAS 123), prospectively for all awards granted, modified, or settled after December 31, 2002. The prospective method is one of the adoption methods provided for under SFAS No. 148, "Accounting for Stock-Based Compensation-Transition and Disclosure," issued in December 2002. SFAS 123 requires that compensation cost for all stock awards be calculated and recognized over the service period (generally equal to the vesting period). This compensation cost is determined using option pricing models, intended to estimate the fair value of the awards at the grant date. Similar to Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees", (APB 25) the alternative method of accounting, an offsetting increase to shareholder's equity under SFAS 123 is recorded equal to the 8 THE TRAVELERS LIFE AND ANNUITY COMPANY NOTES TO FINANCIAL STATEMENTS (CONTINUED) amount of compensation expense charged. During the 2004 first quarter, the Company changed its valuation from the Black-Scholes model to the Binomial Method. The impact of this change was insignificant. Compensation expense and proforma compensation expense had the Company applied SFAS 123 prior to 2003 was insignificant for the year ended December 31, 2004 and 2003. BUSINESS COMBINATIONS, GOODWILL AND OTHER INTANGIBLE ASSETS Effective January 1, 2002, the Company adopted SFAS No. 141, "Business Combinations" (SFAS 141) and No. 142, "Goodwill and Other Intangible Assets" (SFAS 142). These standards change the accounting for business combinations by, among other things, prohibiting the prospective use of pooling-of-interests accounting and requiring companies to stop amortizing goodwill and certain intangible assets with an indefinite useful life created by business combinations accounted for using the purchase method of accounting. Instead, goodwill and intangible assets deemed to have an indefinite useful life will be subject to an annual review for impairment. All goodwill was fully amortized at December 31, 2001 and the Company did not have any other intangible assets with an indefinite useful life. Other intangible assets that are not deemed to have an indefinite useful life will continue to be amortized over their useful lives. See Note 4. FUTURE APPLICATION OF ACCOUNTING STANDARDS OTHER-THAN-TEMPORARY IMPAIRMENTS OF CERTAIN INVESTMENTS On September 30, 2004, the FASB voted unanimously to delay the effective date of Emerging Issues Task Force (EITF) No. 03-1, "The Meaning of Other-Than-Temporary Impairment and its Application to Certain Investments" (EITF 03-1). The delay applies to both debt and equity securities and specifically applies to impairments caused by interest rate and sector spreads. In addition, the provisions of EITF 03-1 that have been delayed relate to the requirements that a company declare its intent to hold the security to recovery and designate a recovery period in order to avoid recognizing an other-than-temporary impairment charge through earnings. The FASB will be issuing implementation guidance related to this topic. Once issued, the Company will evaluate the impact of adopting EITF 03-1. The disclosures required by EITF 03-1 are included in Note 2 to the Financial Statements. STOCK-BASED COMPENSATION In December 2004, the FASB issued SFAS No. 123 (Revised 2004), "Share-Based Payment" (SFAS 123-R), which replaces the existing SFAS 123 and supersedes APB 25. SFAS 123-R requires companies to measure and record compensation expense for stock options and other share-based payment based on the instruments' fair value. SFAS 123-R is effective for interim and annual reporting periods beginning after June 15, 2005. The Company will adopt SFAS 123-R on July 1, 2005 by using a modified prospective approach. For unvested stock-based awards granted before January 1, 2003 (APB 25 awards), the Company will expense the fair value of the awards as at the grant date over the remaining vesting period. The impact of recognizing compensation expense for the unvested APB 25 awards will be immaterial in the third and fourth quarters of 2005. In addition, the amount of additional compensation expense that will be disclosed as the impact in the first and second quarters of 2005, as if the standard had been adopted as of January 1, 2005, but will not be recognized in earnings, will be immaterial. The Company continues to evaluate other aspects of adopting SFAS 123-R. 9 THE TRAVELERS LIFE AND ANNUITY COMPANY NOTES TO FINANCIAL STATEMENTS (CONTINUED) ACCOUNTING POLICIES INVESTMENTS Fixed maturities include bonds, notes and redeemable preferred stocks. Fixed maturities, including financial instruments subject to securities lending agreements (see Note 2), are classified as "available for sale" and are reported at fair value, with unrealized investment gains and losses, net of income taxes, credited or charged directly to shareholder's equity. Fair values of investments in fixed maturities are based on quoted market prices or dealer quotes. If these are not available, discounted 22 expected cash flows using market rates commensurate with the credit quality and maturity of the investment are used to determine fair value. Impairments are realized when investment losses in value are deemed other-than-temporary. The Company conducts a rigorous review each quarter to identify and evaluate investments that have indications of impairment. An investment in a debt or equity security is impaired if its fair value falls below its cost and the decline is considered other-than-temporary. Factors considered in determining whether a loss is other-than-temporary include the length of time and extent to which fair value has been below cost; the financial condition and near-term prospects of the issuer; and the Company's ability and intent to hold the investment for a period of time sufficient to allow for any anticipated recovery. Changing economic conditions - global, regional, or related to specific issuers or industries - could result in other-than-temporary losses. Also included in fixed maturities are loan-backed and structured securities (including beneficial interests in securitized financial assets). Beneficial interests in securitized financial assets that are rated "A" and below are accounted for under the prospective method in accordance with EITF 99-20. Under the prospective method of accounting, the investment's effective yield is based upon projected future cash flows. All other loan-backed and structured securities are amortized using the retrospective method. The effective yield used to determine amortization is calculated based upon actual and projected future cash flows. Equity securities, which include common and non-redeemable preferred stocks, are classified as "available-for-sale" and are carried at fair value based primarily on quoted market prices. Changes in fair values of equity securities are charged or credited directly to shareholder's equity, net of income taxes. Mortgage loans are carried at amortized cost. A mortgage loan is considered impaired when it is probable that the Company will be unable to collect principal and interest amounts due. For mortgage loans that are determined to be impaired, a reserve is established for the difference between the amortized cost and fair market value of the underlying collateral. Cash received on impaired loans is reported as income. In estimating fair value, the Company uses interest rates reflecting the current real estate financing market. Short-term securities, consisting primarily of money market instruments and other debt issues purchased with a maturity of less than one year, are carried at amortized cost, which approximates fair value. Other invested assets include trading securities, which are marked to market with the change recognized in net investment income during the current period. Also included are limited partnership and limited liability company interests in investment funds and real estate joint ventures which are accounted for on the equity method of accounting. Undistributed income of these investments is reported in net investment income. Also included in other invested assets are policy loans which are carried at the amount of the unpaid balances that are not in excess of the net cash surrender values of the related insurance policies. The carrying value of policy loans, which have no defined maturities, is considered to be fair value. 10 THE TRAVELERS LIFE AND ANNUITY COMPANY NOTES TO FINANCIAL STATEMENTS (CONTINUED) Accrual of investment income, included in other assets, is suspended on fixed maturities or mortgage loans that are in default, or on which it is likely that future payments will not be made as scheduled. Interest income on investments in default is recognized only as payment is received. 25 DERIVATIVE FINANCIAL INSTRUMENTS The Company uses derivative financial instruments, including interest rate and equity futures contracts, swaps, interest rate caps, options and forward contracts as a means of hedging exposure to interest rate changes, equity price changes and foreign currency risk. The Company does not hold or issue derivative instruments for trading purposes. (See Note 9 for a more detailed description of the Company's derivative use.) Derivative financial instruments in a gain position are reported in the balance sheet in other assets, derivative financial instruments in a loss position are reported in the balance sheet in other liabilities and derivatives purchased to offset embedded derivatives on variable annuity contracts are reported in other invested assets. To qualify for hedge accounting, the hedge relationship is designated and formally documented at inception detailing the particular risk management objective and strategy for the hedge. This documentation includes the item and risk that is being hedged, the derivative that is being used, as well as how effectiveness is being assessed. A derivative must be highly effective in accomplishing the objective of offsetting either changes in fair value or cash flows for the risk being hedged. For fair value hedges, in which derivatives hedge the fair value of assets and liabilities, changes in the fair value of derivatives are reflected in realized investment gains and losses, together with changes in the fair value of the related hedged item. The net amount is reflected in current earnings. The Company primarily hedges available-for-sale securities. For cash flow hedges, the accounting treatment depends on the effectiveness of the hedge. To the extent that derivatives are effective in offsetting the variability of the hedged cash flows, changes in the derivatives' fair value will be reported in accumulated other changes in equity from nonowner sources. These changes in fair value will be included in earnings of future periods when earnings are also affected by the variability of the hedged cash flows. To the extent these derivatives are not effective, the ineffective portion of the changes in fair value is immediately included in realized investment gains and losses. The effectiveness of these hedging relationships is evaluated on a retrospective and prospective basis using quantitative measures of effectiveness. If a hedge relationship is found to be ineffective, it no longer qualifies for hedge accounting and any gains or losses attributable to such ineffectiveness as well as subsequent changes in fair value are recognized in realized investment gains and losses. For those fair value and cash flow hedge relationships that are terminated, hedge designations removed, or forecasted transactions that are no longer expected to occur, the hedge accounting treatment described in the paragraphs above will no longer apply. For fair value hedges, any changes to the hedged item remain as part of the basis of the asset or liability and are ultimately reflected as an element of the yield. For cash flow hedges, any changes in fair value of the derivative remain in the accumulated other changes in equity from nonowner sources in shareholder's equity and are included in earnings of future periods when earnings are also affected by the variability of the hedged cash flow. If the hedged relationship is discontinued because a forecasted transaction will not occur when scheduled, the accumulated changes in fair value of the derivative recorded in shareholder's equity are immediately reflected in realized investment gains and losses. 11 THE TRAVELERS LIFE AND ANNUITY COMPANY NOTES TO FINANCIAL STATEMENTS (CONTINUED) The Company enters into derivative contracts that are economic hedges but do not qualify or are not designated as hedges for accounting purposes. These derivatives are carried at fair value, with changes in value reflected in realized investment gains and losses. FINANCIAL INSTRUMENTS WITH EMBEDDED DERIVATIVES The Company bifurcates an embedded derivative from the host contract where the economic characteristics and risks of the embedded instrument are not clearly and closely related to the economic characteristics and risks of the host contract, the entire instrument would not otherwise be remeasured at fair value and a separate instrument with the same terms of the embedded instrument would meet the definition of a derivative under SFAS 133. The Company purchases investments that have embedded derivatives, primarily convertible debt securities. These embedded derivatives are carried at fair value with changes in value reflected in realized investment gains and losses. Derivatives embedded in convertible debt securities are classified in the balance sheet as fixed maturity securities, consistent with the host instruments. The Company markets certain investment contracts that have embedded derivatives, primarily variable annuity contracts. These embedded derivatives are carried at fair value, with changes in value reflected in realized investment gains and losses. Derivatives embedded in variable annuity contracts are classified in the consolidated balance sheet as future policy benefits and claims. The Company may enter into derivative contracts to hedge the exposures represented by these embedded derivatives. These are economic hedges, however they do not qualify for hedge accounting. These derivatives are carried at fair value, with the changes in value reflected in realized gains and losses. INVESTMENT GAINS AND LOSSES Realized investment gains and losses are included as a component of pre-tax revenues based upon specific identification of the investments sold on the trade date. Realized gains and losses also result from fair value changes in derivative contracts that do not qualify, or are not designated, as hedging instruments, and from the application of fair value hedge accounting under SFAS 133. Impairments are recognized as realized losses when investment losses in value are deemed other-than-temporary. The Company conducts regular reviews to assess whether other-than-temporary losses exist. Also included are gains and losses arising from the remeasurement of the local currency value of foreign investments to U.S. dollars, the functional currency of the Company. SEPARATE AND VARIABLE ACCOUNTS Separate and variable accounts primarily represent funds for which investment income and investment gains and losses accrue directly to, and investment risk is borne by, the contractholders. Each account has specific investment objectives. The assets of each account are legally segregated and are not subject to claims that arise out of any other business of the Company. The assets of these accounts are carried at fair value. Amounts assessed to the separate account contractholders for management services are included in revenues. Deposits, net investment income and realized investment gains and losses for these accounts are excluded from revenues, and related liability increases are excluded from benefits and expenses. 12 THE TRAVELERS LIFE AND ANNUITY COMPANY NOTES TO FINANCIAL STATEMENTS (CONTINUED) VARIABLE ANNUITY CONTRACTS WITH GUARANTEED MINIMUM DEATH BENEFIT FEATURES. For variable annuity contracts with GMDB features, SOP 03-1 requires the reporting entity to categorize the contract as either an insurance or investment contract based upon the significance of mortality or morbidity risk. SOP 03-1 provides explicit guidance for calculating a reserve for insurance contracts, and provides that the reporting entity does not hold reserves for investment contracts (i.e. there is no significant mortality risk). The Company determined that the mortality risk on its GMDB features was not a significant component of the total variable annuity product, and accordingly continued to classify these products as investment contracts. DEFERRED ACQUISITION COSTS Deferred acquisition costs (DAC) represent costs that are deferred and amortized over the estimated life of the related insurance policies. DAC principally includes commissions and certain expenses related to policy issuance, underwriting and marketing, all of which vary with and are primarily related to the production of new business. The method for determining amortization of DAC varies by product type based upon three different accounting pronouncements: SFAS No. 60, "Accounting and Reporting by Insurance Enterprises" (SFAS 60), SFAS No. 91, "Accounting for Nonrefundable Fees and Costs Associated with Originating or Acquiring Loans and Initial Direct Costs of Leases" (SFAS 91) and SFAS No. 97, "Accounting and Reporting by Insurance Enterprises for Certain Long Duration Contracts and for Realized Gains and Losses from the Sale of Investments" (SFAS 97). DAC for deferred annuities, both fixed and variable, is amortized employing a level effective yield methodology per SFAS 91 as indicated by AICPA Practice Bulletin 8, generally over 10-15 years. An amortization rate is developed using the outstanding DAC balance and projected account balances. This rate is applied to actual account balances to determine the amount of DAC amortization. The projected account balances are derived using a model that contains assumptions related to investment returns and persistency. The model rate is evaluated at least annually, and changes in underlying lapse and interest rate assumptions are to be treated retrospectively. Variances in expected equity market returns versus actual returns are treated prospectively and a new amortization pattern is developed so that the DAC balances will be amortized over the remaining estimated life of the business. DAC for UL is amortized in relation to estimated gross profits from surrender charges, investment, mortality, and expense margins per SFAS 97, generally over 16-25 years. Actual profits can vary from management's estimates resulting in increases or decreases in the rate of amortization. Re-estimates of gross profits, performed at least annually, result in retrospective adjustments to earnings by a cumulative charge or credit to income. DAC relating to traditional life, including term insurance, is amortized in relation to anticipated premiums per SFAS 60, generally over 5-20 years. Assumptions as to the anticipated premiums are made at the date of policy issuance or acquisition and are consistently applied over the life of the policy. All DAC is reviewed, at least annually, to determine if it is recoverable from future income, including investment income, and, if not recoverable, is charged to expense. All other acquisition expenses are charged to operations as incurred. See Note 4. CASH AND CASH EQUIVALENTS Cash, which is reported in other assets, includes certificates of deposits and other time deposits with original maturities of less than 90 days. 13 THE TRAVELERS LIFE AND ANNUITY COMPANY NOTES TO FINANCIAL STATEMENTS (CONTINUED) VALUE OF INSURANCE IN FORCE The value of insurance in force, reported in other assets, is an asset that represents the actuarially determined present value of anticipated profits to be realized from annuity contracts at the date of acquisition using the same assumptions that were used for computing related liabilities, where appropriate. The value of insurance in force was the actuarially determined present value of the projected future profits discounted at an interest rate of 16% for the annuity business acquired. The annuity contracts are amortized employing a level yield method over 31 years. The value of insurance in force is reviewed periodically for recoverability to determine if any adjustment is required. Adjustments, if any, are charged to income. See Note 4. FUTURE POLICY BENEFITS Future policy benefits represent liabilities for future insurance policy benefits for payout annuities and traditional life products and are prepared in accordance with industry standards and U.S. GAAP. The annuity payout reserves are calculated using the mortality and interest assumptions used in the actual pricing of the benefit. Mortality assumptions are based on Company experience and are adjusted to reflect deviations such as substandard mortality in structured settlement benefits. The interest rates range from 1.5% to 9.2% for these annuity products with a weighted average interest rate of 6.6%, including adverse deviation. Traditional life products include whole life and term insurance. Future policy benefits for traditional life products are estimated on the basis of actuarial assumptions as to mortality, persistency and interest, established at policy issue and are based on the Company's experience, which, together with interest assumptions, include a margin for adverse deviation. Appropriate recognition has been given to experience rating and reinsurance. Interest assumptions applicable to traditional life products range from 3.0% to 7.0%, with a weighted average of 6.3%. CONTRACTHOLDER FUNDS Contractholder funds represent deposits from the issuance of UL pension investment and certain retail annuity and structured settlement contracts. For UL contracts, contractholder fund balances are increased by receipts for mortality coverage, contract administration, surrender charges and interest accrued where one or more elements are not fixed or guaranteed. These balances are decreased by withdrawals, mortality charges and administrative expenses charged to the contractholders where these charges and expenses may not be fixed or guaranteed. Interest rates credited to contractholder funds related to UL range from 4.5% to 5.4%, with a weighted average interest rate of 5.0%. Pension investment and certain annuity contracts do not contain significant insurance risk and are considered investment-type contracts. Contractholder fund balances are increased by receipts and credited interest, and reduced by withdrawals and administrative expenses charged to the contractholder. Interest rates credited to these investment-type contracts range from less than 1.0% to 8.0% with a weighted average interest rate of 5.2%. RESERVING FOR UNIVERSAL LIFE AND VARIABLE UNIVERSAL LIFE CONTRACTS. SOP 03-1 requires that a reserve, in addition to the account balance, be established for certain insurance benefit features provided under UL and VUL products if the amounts assessed against the contract holder each period for the insurance benefit feature are assessed in a manner that is expected to result in profits in earlier years and losses in subsequent years from the insurance benefit function. 14 THE TRAVELERS LIFE AND ANNUITY COMPANY NOTES TO FINANCIAL STATEMENTS (CONTINUED) The Company's UL and VUL products were reviewed to determine if an additional reserve is required under SOP 03-1. The Company determined that SOP 03-1 applied to some of its UL and VUL contracts with these features and established an additional reserve of less than $1 million. GUARANTY FUND AND OTHER INSURANCE-RELATED ASSESSMENTS Included in other liabilities is the Company's estimate of its liability for guaranty fund and other insurance-related assessments. State guaranty fund assessments are based upon the Company's share of premiums written or received in one or more years prior to an insolvency occurring in the industry. Once an insolvency has occurred, the Company recognizes a liability for such assessments if it is probable that an assessment will be imposed and the amount of the assessment can be reasonably estimated. At December 31, 2004 and 2003, the Company's liability for guaranty fund assessments was not significant. PERMITTED STATUTORY ACCOUNTING PRACTICES The Company, domiciled in the State of Connecticut, prepares statutory financial statements in accordance with the accounting practices prescribed or permitted by the State of Connecticut Insurance Department. Prescribed statutory accounting practices are those practices that are incorporated directly or by reference in state laws, regulations, and general administrative rules applicable to all insurance enterprises domiciled in a particular state. Permitted statutory accounting practices include practices not prescribed by the domiciliary state, but allowed by the domiciliary state regulatory authority. The Company does not have any permitted statutory accounting practices. PREMIUMS Premium income is reported for individual payout annuities, group close-out annuities, whole life and term insurance. The annuities premiums are recognized as revenue when collected. The life premiums are recognized as revenues when due. Premiums for contracts with a limited number of premium payments, due over a significantly shorter period than the period over which benefits are provided, are considered revenue when due. The portion of premium which is not required to provide for benefits and expenses is deferred and recognized in revenues in a constant relationship to insurance benefits in force. FEE INCOME Fee income is recognized on deferred annuity and UL contracts for mortality, administrative and equity protection charges according to contract due dates. Fee income is recognized on variable annuity and universal life separate accounts either daily, monthly, quarterly or annually as per contract terms. OTHER REVENUES Other revenues include surrender penalties collected at the time of a contract surrender, and other miscellaneous charges related to annuity and universal life contracts recognized when received. CURRENT AND FUTURE INSURANCE BENEFITS Current and future insurance benefits represent charges for mortality and morbidity related to fixed annuities, universal life and term life insurance benefits. 15 THE TRAVELERS LIFE AND ANNUITY COMPANY NOTES TO FINANCIAL STATEMENTS (CONTINUED) INTEREST CREDITED TO CONTRACTHOLDERS Interest credited to contractholders represents amounts earned by universal life, pension investment and certain retail annuity contracts in accordance with contract provisions. FEDERAL INCOME TAXES The provision for federal income taxes is comprised of two components, current income taxes and deferred income taxes. Deferred federal income taxes arise from changes during the year in cumulative temporary differences between the tax basis and book basis of assets and liabilities. 16 THE TRAVELERS LIFE AND ANNUITY COMPANY NOTES TO FINANCIAL STATEMENTS (CONTINUED) 2. INVESTMENTS FIXED MATURITIES The amortized cost and fair values of investments in fixed maturities were as follows:
GROSS GROSS DECEMBER 31, 2004 AMORTIZED UNREALIZED UNREALIZED FAIR ($ IN MILLIONS) COST GAINS LOSSES VALUE ------------------------------------------------------------------------------------------ AVAILABLE FOR SALE: Mortgage-backed securities - CMOs and pass-through securities $ 906 $ 24 $ 1 $ 929 U.S. Treasury securities and obligations of U.S. Government and government agencies and authorities 154 9 -- 163 Obligations of states and political subdivisions 57 8 -- 65 Debt securities issued by foreign governments 63 6 -- 69 All other corporate bonds 3,565 219 4 3,780 All other debt securities 1,180 71 2 1,249 Redeemable preferred stock 4 2 -- 6 ------------------------------------------------------------------------------------------ Total Available For Sale $5,929 $ 339 $ 7 $6,261 ------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------ GROSS GROSS DECEMBER 31, 2003 AMORTIZED UNREALIZED UNREALIZED FAIR ($ IN MILLIONS) COST GAINS LOSSES VALUE ------------------------------------------------------------------------------------------ AVAILABLE FOR SALE: Mortgage-backed securities - CMOs and pass-through securities $ 645 $ 18 $ 2 $ 661 U.S. Treasury securities and obligations of U.S. Government and government agencies and authorities 192 5 1 196 Obligations of states and political subdivisions 53 6 -- 59 Debt securities issued by foreign governments 58 3 -- 61 All other corporate bonds 3,179 241 5 3,415 All other debt securities 903 59 3 959 Redeemable preferred stock 4 2 -- 6 ------------------------------------------------------------------------------------------ Total Available For Sale $5,034 $ 334 $ 11 $5,357 ------------------------------------------------------------------------------------------
17 THE TRAVELERS LIFE AND ANNUITY COMPANY NOTES TO FINANCIAL STATEMENTS (CONTINUED) Proceeds from sales of fixed maturities classified as available for sale were $801.9 million, $1.7 billion and $1.7 billion in 2004, 2003 and 2002, respectively. Gross gains of $25.0 million, $48.2 35 million and $85.6 million and gross losses of $24.4 million, $52.4 million and $29.9 million in 2004, 2003 and 2002, respectively, were realized on those sales. Additional losses of $6.9 million, $10.2 million and $66.9 million were realized due to other-than-temporary losses in value in 2004, 2003 and 2002, respectively. The significant impairment activity in 2002 was concentrated in telecommunication and energy company investments. The amortized cost and fair value of fixed maturities available for sale at December 31, 2004, by contractual maturity, are shown below. Actual maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. ----------------------------------------------------------------- AMORTIZED FAIR ($ IN MILLIONS) COST VALUE ----------------------------------------------------------------- MATURITY: Due in one year or less $ 264 $ 270 Due after 1 year through 5 years 1,675 1,757 Due after 5 years through 10 years 2,365 2,514 Due after 10 years 719 791 ----------------------------------------------------------------- 5,023 5,332 ----------------------------------------------------------------- Mortgage-backed securities 906 929 ----------------------------------------------------------------- Total Maturity $5,929 $6,261 ----------------------------------------------------------------- The Company makes significant investments in collateralized mortgage obligations (CMOs). CMOs typically have high credit quality, offer good liquidity, and provide a significant advantage in yield and total return compared to U.S. Treasury securities. The Company's investment strategy is to purchase CMO tranches which are protected against prepayment risk, including planned amortization class tranches and last cash flow tranches. Prepayment protected tranches are preferred because they provide stable cash flows in a variety of interest rate scenarios. The Company does invest in other types of CMO tranches if an assessment indicates a favorable risk/return tradeoff. The Company does not purchase residual interests in CMOs. At December 31, 2004 and 2003, the Company held CMOs classified as available for sale with a fair value of $532.6 million and $332.4 million, respectively. Approximately 34% of the Company's CMO holdings were fully collateralized by GNMA, FNMA or FHLMC securities at December 31, 2004 and 2003. In addition, the Company held $396.0 million and $327.7 million of GNMA, FNMA or FHLMC mortgage-backed pass-through securities at December 31, 2004 and 2003, respectively. All of these securities are rated AAA. The Company engages in securities lending transactions whereby certain securities from its portfolio are loaned to other institutions for short periods of time. The Company generally receives cash collateral from the borrower, equal to at least the market value of the loaned securities plus accrued interest, and invests in a short-term investment pool. See Note 11. The loaned securities remain a recorded asset of the Company. The Company records a liability for the amount of the cash collateral held, representing its obligation to return the cash collateral, and reports that liability as part of other liabilities in the balance 18 THE TRAVELERS LIFE AND ANNUITY COMPANY NOTES TO FINANCIAL STATEMENTS (CONTINUED) sheet. At December 31, 2004 and 2003, the Company held cash collateral of $113.5 million and $154.0 million, respectively. The Company also had $23.7 million of investments held with a third party used as collateral at December 31, 2004. The Company does not have the right to sell or pledge this collateral and it is not recorded on the balance sheet. No such collateral existed at December 31, 2003. The Company participates in dollar roll repurchase transactions as a way to generate investment income. These transactions involve the sale of mortgage-backed securities with the agreement to repurchase substantially the same securities from the same counterparty. Cash is received from the sale, which is invested in the Company's short-term money market pool. The cash is returned at the end of the roll period when the mortgage-backed securities are repurchased. The Company will generate additional investment income based upon the difference between the sale and repurchase prices. These transactions are recorded as secured borrowings. The mortgage-backed securities remain recorded as assets. The cash proceeds are reflected in short-term investments and a liability is established to reflect the Company's obligation to repurchase the securities at the end of the roll period. This liability is classified as other liabilities in the balance sheets and fluctuates based upon the timing of the repayments. Although these types of transactions occurred during the years, there were no outstanding amounts at December 31, 2004 and 2003. EQUITY SECURITIES The cost and fair values of investments in equity securities were as follows:
-------------------------------------------------------------------------------- GROSS GROSS UNREALIZED UNREALIZED GROSS ($ IN MILLIONS) COST GAINS LOSSES VALUE -------------------------------------------------------------------------------- DECEMBER 31, 2004 Common stocks $12 $ 3 $-- $15 Non-redeemable preferred stocks 4 -- -- 4 -------------------------------------------------------------------------------- Total Equity Securities $16 $ 3 $-- $19 -------------------------------------------------------------------------------- DECEMBER 31, 2003 Common stocks $ 2 $-- $-- $ 2 Non-redeemable preferred stocks 6 -- -- 6 -------------------------------------------------------------------------------- Total Equity Securities $ 8 $-- $-- $ 8 --------------------------------------------------------------------------------
Proceeds from sales of equity securities were $18.5 million, $7.8 million and $35.6 million in 2004, 2003 and 2002, respectively. Gross gains and losses on sales and impairments were insignificant. 19 THE TRAVELERS LIFE AND ANNUITY COMPANY NOTES TO FINANCIAL STATEMENTS (CONTINUED) OTHER-THAN-TEMPORARY LOSSES ON INVESTMENTS Management has determined that the unrealized losses on the Company's investments in fixed maturity and equity securities at December 31, 2004 are temporary in nature. The Company conducts a periodic review to identify and evaluate investments that have indications of possible impairment. An investment in a debt or equity security is impaired if its fair value falls below its cost and the decline is considered other-than-temporary. Factors considered in determining whether a loss is other-than-temporary include the length of time and extent to which fair value has been below cost; the financial condition and near-term prospects of the issuer; and the Company's ability and intent to hold the investment for a period of time sufficient to allow for any anticipated recovery. The Company's review for impairment generally entails: o Identification and evaluation of investments that have possible indications of impairment; o Analysis of individual investments that have fair values less than 80% of amortized cost, including consideration of length of time the investment has been in an unrealized loss position. o Discussion of evidential matter, including an evaluation of factors or triggers that would or could cause individual investments to qualify as having other-than-temporary impairments and those that would not support other-than-temporary impairment; o Documentation of the results of these analyses, as required under business policies. The tables below shows the fair value of investments in fixed maturities and equity securities that are available-for-sale and have been in an unrealized loss position at:
Gross Unrealized Losses ----------------------- Less Than One Year One Year or Longer Total ---------------------------------------------------------------- Gross Gross Gross DECEMBER 31, 2004 Fair Unrealized Fair Unrealized Fair Unrealized ($ IN MILLIONS) Value Losses Value Losses Value Losses - ---------------------------------------------------------------------------------------------------------------- Fixed maturity securities available-for-sale: Mortgage-backed securities-CMO's and pass-through securities $103 $ 1 $ -- $ -- $103 $ 1 U.S. Treasury securities and obligations of U.S. Government and government agencies and authorities 5 -- -- -- 5 -- Debt securities issued by foreign governments 1 -- -- -- 1 -- All other corporate bonds 408 4 15 -- 423 4 All other debt securities 141 1 24 1 165 2 Redeemable preferred stock 1 -- -- -- 1 -- - ---------------------------------------------------------------------------------------------------------------- Total fixed maturities $659 $ 6 $ 39 $ 1 $698 $ 7 Equity securities $ 1 $ -- $ 3 $ -- $ 4 $ -- - ----------------------------------------------------------------------------------------------------------------
At December 31, 2004, the cost of approximately 269 investments in fixed maturity and equity securities exceeded their fair value by $7 million. Of the $6 million which represents fixed maturity investments that have been in a gross unrealized loss position for less than a year and the $1 million in such a position for a year or more, 93% and 82% of these investments are rated investment grade, respectively. 20 THE TRAVELERS LIFE AND ANNUITY COMPANY NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Gross Unrealized Losses ----------------------- Less Than One Year One Year or Longer Total ---------------------------------------------------------------- Gross Gross Gross DECEMBER 31, 2003 Fair Unrealized Fair Unrealized Fair Unrealized ($ IN MILLIONS) Value Losses Value Losses Value Losses - ---------------------------------------------------------------------------------------------------------------- Fixed maturity securities available-for-sale: Mortgage-backed securities-CMO's and pass-through securities $143 $ 2 $ -- $ -- $143 $ 2 U.S. Treasury securities and obligations of U.S. Government and government agencies and authorities 132 1 -- -- 132 1 Debt securities issued by foreign governments 2 -- -- -- 2 -- All other corporate bonds 238 4 19 1 257 5 All other debt securities 123 2 20 1 143 3 Redeemable preferred stock -- -- 1 -- 1 -- - ---------------------------------------------------------------------------------------------------------------- Total fixed maturities $638 $ 9 $ 40 $ 2 $678 $ 11 Equity securities $ 3 $ -- $ 1 $ -- $ 4 $ -- - ----------------------------------------------------------------------------------------------------------------
At December 31, 2003, the cost of approximately 220 investments in fixed maturity and equity securities exceeded their fair value by $11 million. Of the $9 million which represents fixed maturity investments that have been in a gross unrealized loss position for less than a year and the $2 million in such a position for a year or more, 87% and 32% of these investments are rated investment grade, respectively. AGING OF GROSS UNREALIZED LOSSES ON AVAILABLE FOR SALE The aging of gross unrealized losses on fixed maturity investments is as follows:
TOTAL FIXED MATURITIES WITH UNREALIZED LOSS TOTAL FIXED MATURITIES TOTALING 20% OR MORE - ------------------------------------------------------------------------------------------------ DECEMBER 31, 2004 AMORTIZED UNREALIZED AMORTIZED UNREALIZED ($ IN MILLIONS) COST LOSS COST LOSS - ------------------------------------------------------------------------------------------------ Six months or less $505 $ 3 $-- $-- Greater than six months to nine months 134 2 -- -- Greater than nine months to twelve months 26 1 -- -- Greater than twelve months 40 1 -- -- ---- ---- --- --- Total $705 $ 7 $-- $-- ==== ==== === ===
21 THE TRAVELERS LIFE AND ANNUITY COMPANY NOTES TO FINANCIAL STATEMENTS (CONTINUED)
TOTAL FIXED MATURITIES WITH UNREALIZED LOSS TOTAL FIXED MATURITIES TOTALING 20% OR MORE - ------------------------------------------------------------------------------------------------ DECEMBER 31, 2003 AMORTIZED UNREALIZED AMORTIZED UNREALIZED ($ IN MILLIONS) COST LOSS COST LOSS - ------------------------------------------------------------------------------------------------ Six months or less $540 $ 7 $ 1 $ -- Greater than six months to nine months 72 1 -- -- Greater than nine months to twelve months 35 1 -- -- Greater than twelve months 42 2 -- -- ---- ---- ---- ---- Total $689 $ 11 $ 1 $ -- ==== ==== ==== ====
Fair values of investments in fixed maturities and equity securities are based on quoted market prices or dealer quotes or, if these are not available, discounted expected cash flows using market rates commensurate with the credit quality and maturity of the investment. The fair value of investments for which quoted market prices, third-party broker quotations or validated model prices are not available amounted to $36.0 million and $124.9 million at December 31, 2004 and 2003, respectively. MORTGAGE LOANS At December 31, 2004 and 2003, the Company's mortgage loan portfolios consisted of the following: -------------------------------------------------------------------------- ($ IN MILLIONS) 2004 2003 -------------------------------------------------------------------------- Current Mortgage Loans $209 $136 Underperforming Mortgage Loans 3 -- -------------------------------------------------------------------------- Total $212 $136 -------------------------------------------------------------------------- Underperforming assets include delinquent mortgage loans over 90 days past due, loans in the process of foreclosure and loans modified at interest rates below market. Aggregate annual maturities on mortgage loans at December 31, 2004 are as shown below. Actual maturities will differ from contractual maturities because borrowers may have the right to prepay obligations with or without prepayment penalties. -------------------------------------------------------------------------- YEAR ENDING DECEMBER 31, ($ IN MILLIONS) -------------------------------------------------------------------------- 2005 $ 9 2006 25 2007 10 2008 8 2009 9 Thereafter 151 -------------------------------------------------------------------- Total $212 ==================================================================== 22 THE TRAVELERS LIFE AND ANNUITY COMPANY NOTES TO FINANCIAL STATEMENTS (CONTINUED) OTHER INVESTED ASSETS Other invested assets are composed of the following: -------------------------------------------------------------------------- ($ IN MILLIONS) 2004 2003 -------------------------------------------------------------------------- Private equity and arbitrage investments $219 $203 Derivatives 135 115 Trading Securities 22 33 Policy Loans 32 27 Real estate joint ventures 9 15 -------------------------------------------------------------------------- Total $417 $393 -------------------------------------------------------------------------- CONCENTRATIONS The Company participates in a short-term investment pool maintained by TIC. See Note 11. The Company's industry concentrations of investments, excluding those in federal and government agencies, primarily fixed maturities at fair value, were as follows: -------------------------------------------------------------------------- ($ IN MILLIONS) 2004 2003 -------------------------------------------------------------------------- Finance $918 $555 Banking 515 364 Electric Utilities 430 455 Real Estate Investment Trust 394 241 Media 342 354 Insurance 323 261 Telecommunications 290 288 -------------------------------------------------------------------------- The Company held investments in foreign banks in the amount of $201 million and $152 million at December 31, 2004 and 2003, respectively, which are included in the table above. The Company defines its below investment grade assets as those securities rated Ba1 by Moody's Investor Services (or its equivalent) or below by external rating agencies, or the equivalent by internal analysts when a public rating does not exist. Such assets include publicly traded below investment grade bonds and certain other privately issued bonds and notes that are classified as below investment grade. Below investment grade assets included in the preceding table include $119 million and $157 million in Electric Utilities, $25 million and $31 million in Media, and $12 million and $34 million in Telecommunications at December 31, 2004 and 2003, respectively. Below investment grade assets in other categories were insignificant. Total below investment grade fixed maturities were $501 million and $506 million at December 31, 2004 and 2003, respectively. 23 THE TRAVELERS LIFE AND ANNUITY COMPANY NOTES TO FINANCIAL STATEMENTS (CONTINUED) Included in mortgage loans were the following group concentrations: ($ IN MILLIONS) -------------------------------------------------------------------------- At December 31, 2004 2003 -------------------------------------------------------------------------- STATE ----- California $ 58 $ 34 New York 40 31 -------------------------------------------------------------------------- PROPERTY TYPE ------------- Agricultural $106 $ 64 Office 70 62 -------------------------------------------------------------------------- The Company monitors creditworthiness of counterparties to all financial instruments by using controls that include credit approvals, credit limits and other monitoring procedures. Collateral for fixed maturities often includes pledges of assets, including stock and other assets, guarantees and letters of credit. The Company's underwriting standards with respect to new mortgage loans generally require loan to value ratios of 75% or less at the time of mortgage origination. NON-INCOME PRODUCING INVESTMENTS Investments included in the consolidated balance sheets that were non-income producing were insignificant at December 31, 2004 and 2003, respectively. RESTRUCTURED INVESTMENTS Mortgage loan and debt securities which were restructured at below market terms at December 31, 2004 and 2003 were insignificant. The new terms of restructured investments typically defer a portion of contract interest payments to varying future periods. Gross interest income on restructured assets that would have been recorded in accordance with the original terms of such assets was insignificant. Interest on these assets, included in net investment income, was insignificant. NET INVESTMENT INCOME -------------------------------------------------------------------------- FOR THE YEAR ENDED DECEMBER 31, ($ IN MILLIONS) 2004 2003 2002 -------------------------------------------------------------------------- GROSS INVESTMENT INCOME Fixed maturities $346 $317 $277 Other invested assets 30 32 28 Mortgage loans 18 11 11 Other 1 2 1 -------------------------------------------------------------------------- Total gross investment income 395 362 317 -------------------------------------------------------------------------- Investment expenses 6 6 5 -------------------------------------------------------------------------- Net investment income $389 $356 $312 -------------------------------------------------------------------------- 24 THE TRAVELERS LIFE AND ANNUITY COMPANY NOTES TO FINANCIAL STATEMENTS (CONTINUED) REALIZED AND UNREALIZED INVESTMENT GAINS (LOSSES) Net realized capital gains (losses) by asset class for the periods were as follows:
---------------------------------------------------------------------------------- FOR THE YEAR ENDED DECEMBER 31, ($ IN MILLIONS) 2004 2003 2002 ---------------------------------------------------------------------------------- REALIZED INVESTMENT GAINS (LOSSES) Fixed maturities $ (6) $(14) $(11) Derivatives: Guaranteed minimum withdrawal benefit derivatives, net 19 -- -- Other derivatives 2 8 (17) Other invested assets (1) 1 (3) Mortgage loans -- (1) -- Other 3 (1) -- ---------------------------------------------------------------------------------- Total realized investment gains (losses) $ 17 $ (7) $(31) ----------------------------------------------------------------------------------
Changes in net unrealized investment gains (losses) that are included as accumulated other changes in equity from nonowner sources in shareholder's equity were as follows: -------------------------------------------------------------------------- FOR THE YEAR ENDED DECEMBER 31, ($ IN MILLIONS) 2004 2003 2002 -------------------------------------------------------------------------- UNREALIZED INVESTMENT GAINS (LOSSES) Fixed maturities $ 9 $ 189 $ 91 Other invested assets 4 (3) 22 -------------------------------------------------------------------------- Total unrealized investment gains 13 186 113 -------------------------------------------------------------------------- Related taxes 5 65 40 -------------------------------------------------------------------------- Change in unrealized investment gains 8 121 73 Balance beginning of year 207 86 13 -------------------------------------------------------------------------- Balance end of year $ 215 $ 207 $ 86 -------------------------------------------------------------------------- 3. REINSURANCE The Company uses reinsurance in order to limit losses, minimize exposure to large risks, provide additional capacity for future growth and to effect business-sharing arrangements. Reinsurance is accomplished through various plans of reinsurance, primarily yearly renewable term (YRT), coinsurance and modified coinsurance. The Company remains primarily liable as the direct insurer on all risks reinsured. Since 1997 the majority of UL business has been reinsured under an 80% ceded/20% retained YRT quota share reinsurance program and term life business has been reinsured under a 90%/10% YRT quota share reinsurance program. Beginning in September 2002, newly issued term life business has been reinsured under a 90%/10% coinsurance quota share reinsurance program. Subsequently, portions of this term coinsurance has reverted to YRT for new business. Generally, the maximum retention on an ordinary life risk is $2.5 million. Maximum retention of $2.5 million is generally reached on policies in excess of $12.5 million for UL and $25.0 million for term insurance. For other plans of insurance, it is the policy 25 THE TRAVELERS LIFE AND ANNUITY COMPANY NOTES TO FINANCIAL STATEMENTS (CONTINUED) of the Company to obtain reinsurance for amounts above certain retention limits on individual life policies, which limits vary with age and underwriting classification. Total life insurance in-force ceded under reinsurance contracts was $44.3 billion and $35.0 billion at December 31, 2004 and 2003, including $3.4 million and $4.5 million, respectively to TIC. Total life insurance premiums ceded were $34.4 million, $24.9 million and $14.9 million in 2004, 2003 and 2002, respectively. Ceded premiums paid to TIC were insignificant for these same periods. During 2004, The Travelers Life and Annuity Reinsurance Company (TLARC) was formed as a pure captive insurer in order to permit the Company to cede 100% of its statutory-based risk associated with the death benefit guarantee rider on certain universal life contracts. The reinsurance transaction related to statutory-only reserves, and had no impact on GAAP premiums and benefits. TLARC is a direct subsidiary of CIHC, TIC's parent. See Note 11. Prior to April 1, 2001, the Company also reinsured substantially all of the GMDB on its variable annuity product. Total variable annuity account balances with GMDB were $11.1 billion, including $4.8 billion or 43% which was reinsured, and $9.9 billion, of which $5.4 billion or 55% is reinsured at December 31, 2004 and 2003, respectively. GMDB is payable upon the death of a contractholder. When the benefit payable is greater than the account value of the variable annuity, the difference is called the net amount at risk (NAR). NAR was $595 million and $887 million at December 31, 2004 and 2003, respectively. NAR included $536 million, or 90%, and $816 million, or 92%, which was reinsured at December 31, 2004 and 2003, respectively. 4. INTANGIBLE ASSETS The Company has two intangible, amortizable assets, DAC and the value of insurance in force.
DAC --- Traditional Deferred ($ IN MILLIONS) Life Annuity UL Total --------------------------------------------------------------------------------- Balance January 1, 2003 $ 55 $ 632 $ 377 $ 1,064 Commissions and expenses deferred 14 172 165 351 Amortization expense (10) (107) (19) (136) --------------------------------------------------------------------------------- Balance December 31, 2003 59 697 523 1,279 Commissions and expenses deferred 11 182 276 469 Amortization expense (10) (147) (43) (200) Underlying lapse and interest rate assumptions -- (2) -- (2) Pattern of estimated gross profit adjustment -- -- (24) (24) --------------------------------------------------------------------------------- Balance December 31, 2004 $ 60 $ 730 $ 732 $ 1,522 ---------------------------------------------------------------------------------
VALUE OF INSURANCE IN FORCE The value of insurance in force totaled $10.8 million and $11.7 million at December 31, 2004 and 2003, respectively, and was reported in other assets. Amortization expense of value of insurance in force was insignificant for 2004, 2003 and 2002. 26 THE TRAVELERS LIFE AND ANNUITY COMPANY NOTES TO FINANCIAL STATEMENTS (CONTINUED) 5. DEPOSIT FUNDS AND RESERVES At December 31, 2004 and 2003, the Company had $6.3 billion and $5.6 billion of life and annuity deposit funds and reserves, respectively, as follows.
DECEMBER 31, 2004 DECEMBER 31, 2003 ----------------- ----------------- ($ IN MILLIONS) Subject to discretionary withdrawal: With fair value adjustments $2,594 $2,552 Subject to surrender charges 1,672 1,318 Surrenderable without charge 289 99 ------ ------ Total $4,555 $3,969 Not subject to discretionary withdrawal: $1,744 $1,637 ------ ------ Total $6,299 $5,606 ====== ======
Average surrender charges included in the subject to surrender charge category above were 4.7% in both 2004 and 2003. In addition, during the payout phase, these funds are credited at significantly reduced interest rates. 6. FEDERAL INCOME TAXES EFFECTIVE TAX RATE ($ IN MILLIONS) ------------------------------------------------------------------- FOR THE YEAR ENDED DECEMBER 31, 2004 2003 2002 ------------------------------------------------------------------- Income before federal income taxes $ 207 $ 154 $ 159 Statutory tax rate 35% 35% 35% ------------------------------------------------------------------- Expected federal income taxes 72 54 56 Tax effect of: Non-taxable investment income (15) (11) -- Tax reserve release (8) (8) -- ------------------------------------------------------------------- Federal income taxes $ 49 $ 35 $ 56 =================================================================== Effective tax rate 24% 22% 35% ------------------------------------------------------------------- COMPOSITION OF FEDERAL INCOME TAXES ------------------------------------------------------------------- Current: United States $ 96 $ 73 $ (31) Foreign -- 1 -- ------------------------------------------------------------------- Total 96 74 (31) ------------------------------------------------------------------- Deferred: United States (47) (39) 87 Foreign -- -- -- ------------------------------------------------------------------- Total (47) (39) 87 ------------------------------------------------------------------- Federal income taxes $ 49 $ 35 $ 56 =================================================================== 27 THE TRAVELERS LIFE AND ANNUITY COMPANY NOTES TO FINANCIAL STATEMENTS (CONTINUED) The net deferred tax liabilities at December 31, 2004 and 2003 were comprised of the tax effects of temporary differences related to the following assets and liabilities:
($ IN MILLIONS) 2004 2003 ----------------------------------------------------------------------------- Deferred Tax Assets: Benefit, reinsurance and other reserves $ 372 $ 251 Other 7 6 ----------------------------------------------------------------------------- Total 379 257 ----------------------------------------------------------------------------- Deferred Tax Liabilities: Investments, net (131) (117) Deferred acquisition costs and value of insurance in force (426) (364) Other (2) (1) ----------------------------------------------------------------------------- Total (559) (482) ----------------------------------------------------------------------------- Net Deferred Tax Liability $(180) $(225) -----------------------------------------------------------------------------
TIC and its subsidiaries, including the Company, file a consolidated federal income tax return with Citigroup. Federal income taxes are allocated to each member of the consolidated group, according to a Tax Sharing Agreement (the Agreement), on a separate return basis adjusted for credits and other amounts required by the Agreement. The Company had a $265.3 million payable to TIC at December 31, 2004 and a $9.1 million recoverable from TIC at December 31, 2003 pursuant to the Agreement. At December 31, 2004 and 2003, the Company had no ordinary or capital loss carryforwards. The policyholders' surplus account, which arose under prior tax law, is generally that portion of the gain from operations that has not been subjected to tax, plus certain deductions. The balance of this account is approximately $2.1 million. At current rates the maximum amount of such tax would be approximately $700 thousand. Income taxes are not provided for on this amount because under current U.S. tax rules such taxes will become payable only to the extent such amounts are distributed as a dividend or exceed limits prescribed by federal law. The 2004 Tax Act provides that this account can be reduced directly by distributions made by the life insurance subsidiaries in 2005 and 2006. The Company intends to make sufficient distributions to eliminate this account within the timeframe permitted under the Act. 7. SHAREHOLDER'S EQUITY SHAREHOLDER'S EQUITY AND DIVIDEND AVAILABILITY The Company's statutory net income (loss) was $(211) million, $37 million and $(134) million for the years ended December 31, 2004, 2003 and 2002, respectively. Statutory capital and surplus was $942 million and $494 million at December 31, 2004 and 2003, respectively. The Company is currently subject to various regulatory restrictions that limit the maximum amount of dividends available to be paid to its parent without prior approval of insurance regulatory authorities. In accordance with Connecticut statutes, the Company may not pay dividends during 2005 without prior approval of the State of Connecticut Insurance Department. 28 THE TRAVELERS LIFE AND ANNUITY COMPANY NOTES TO FINANCIAL STATEMENTS (CONTINUED) ACCUMULATED OTHER CHANGES IN EQUITY FROM NONOWNER SOURCES, NET OF TAX Changes in each component of Accumulated Other Changes in Equity from Nonowner Sources were as follows:
NET ACCUMULATED UNREALIZED DERIVATIVE OTHER CHANGES GAIN/LOSS ON INSTRUMENTS & IN EQUITY FROM INVESTMENT HEDGING NONOWNER ($ IN MILLIONS) SECURITIES ACTIVITIES SOURCES -------------------------------------------------------------------------------------------------------------------------- BALANCE, JANUARY 1, 2002 $ 13 $ 3 $ 16 -------------------------------------------------------------------------------------------------------------------------- Unrealized gains on investment securities, net of tax of $35 64 -- 64 Add: Reclassification adjustment for losses included in net income, net of tax of $4 8 -- 8 Add: Derivative instrument hedging activity gains, net of tax of $3 -- 7 7 -------------------------------------------------------------------------------------------------------------------------- PERIOD CHANGE 72 7 79 -------------------------------------------------------------------------------------------------------------------------- BALANCE DECEMBER 3 1, 2002 85 10 95 -------------------------------------------------------------------------------------------------------------------------- Unrealized gains on investment securities, net of tax of $61 114 -- 114 Add: Reclassification adjustment for losses included in net income, net of tax of $5 9 -- 9 Less: Derivative instrument hedging activity loss, net of tax benefits of $(1) -- (3) (3) -------------------------------------------------------------------------------------------------------------------------- PERIOD CHANGE 123 (3) 120 -------------------------------------------------------------------------------------------------------------------------- BALANCE, DECEMBER 31, 2003 208 7 215 Unrealized gains on investment securities, net of tax of $3 5 -- 5 Add: Reclassification adjustment for losses included in net income, net of tax of $2 4 -- 4 Less: Derivative instrument hedging activity loss, net of tax benefits of $(3) -- (5) (5) -------------------------------------------------------------------------------------------------------------------------- PERIOD CHANGE 9 (5) 4 -------------------------------------------------------------------------------------------------------------------------- DECEMBER 31, 2004 $ 217 $ 2 $ 219 --------------------------------------------------------------------------------------------------------------------------
29 THE TRAVELERS LIFE AND ANNUITY COMPANY NOTES TO FINANCIAL STATEMENTS (CONTINUED) 8. BENEFIT PLANS PENSION AND OTHER POSTRETIREMENT BENEFITS The Company participates in a qualified, noncontributory defined benefit pension plan, a non-qualified pension plan and other postretirement benefits to retired employees through plans sponsored by Citigroup. The Company's share of net expense for these plans was not significant for 2004, 2003 and 2002. 401(K) SAVINGS PLAN Substantially all of the Company's employees are eligible to participate in a 401(k) savings plan sponsored by Citigroup. The Company's expenses in connection with the 401(k) savings plan were not significant in 2004, 2003 and 2002. See Note 11. 9. DERIVATIVE FINANCIAL INSTRUMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS DERIVATIVE FINANCIAL INSTRUMENTS The Company uses derivative financial instruments, including financial futures, interest rate swaps, options and forward contracts, as a means of hedging exposure to foreign currency, equity price changes and/or interest rate risk on anticipated transactions or existing assets and liabilities. The Company does not hold or issue derivative instruments for trading purposes. The Company uses exchange traded financial futures contracts to manage its exposure to changes in interest rates that arise from the sale of certain insurance and investment products, or the need to reinvest proceeds from the sale or maturity of investments. To hedge against adverse changes in interest rates, the Company enters long or short positions in financial futures contracts, which offset asset price changes resulting from changes in market interest rates until an investment is purchased, or a product is sold. Futures contracts are commitments to buy or sell at a future date a financial instrument, at a contracted price, and may be settled in cash or through delivery. The Company uses equity option contracts to manage its exposure to changes in equity market prices that arise from the sale of certain insurance products. To hedge against adverse changes in the equity market prices, the Company enters long positions in equity option contracts with major financial institutions. These contracts allow the Company, for a fee, the right to receive a payment if the Standard and Poor's 500 Index falls below agreed upon strike prices. The Company enters into interest rate swaps in connection with other financial instruments to provide greater risk diversification and better match the cash flows from assets and related liabilities. Under interest rate swaps, the Company agrees with other parties to exchange, at specified intervals, the difference between fixed rate and floating rate interest amounts calculated by reference to an agreed notional principal amount. Generally, no cash is exchanged at the outset of the contract and no principal payments are made by either party. A single net payment is usually made by one counterparty at each due date. Forward contracts are used on an ongoing basis to hedge the Company's exposure to foreign currency exchange rates that result from the net investment in the Company's direct foreign currency investments. To hedge against adverse changes in exchange rates, the Company enters into contracts to exchange 30 THE TRAVELERS LIFE AND ANNUITY COMPANY NOTES TO FINANCIAL STATEMENTS (CONTINUED) foreign currency for U.S. Dollars with major financial institutions. These contracts cannot be settled prior to maturity. At the maturity date the Company must purchase the foreign currency necessary to settle the contracts. Several of the Company's hedging strategies do not qualify or are not designated as hedges for accounting purposes. This can occur when the hedged item is carried at fair value with changes in fair value recorded in earnings, the derivative contracts are used in a macro hedging strategy, the hedge is not expected to be highly effective, or structuring the hedge to qualify for hedge accounting is too costly or time consuming. The Company monitors creditworthiness of counterparties to these financial instruments by using criteria of acceptable risk that are consistent with on-balance-sheet financial instruments. The controls include credit approvals, limits and other monitoring procedures. Additionally, the Company enters into collateral agreements with its derivative counterparties. As of December 31, 2004 and 2003 the Company held collateral under these contracts amounting to approximately $101.5 million and $69.7 million, respectively. The table below provides a summary of the notional and fair value of derivatives by type:
($ IN MILLIONS) DECEMBER 31, 2004 DECEMBER 31, 2003 Fair Value Fair Value ---------- ---------- Notional Notional Derivative Type Amount Assets Liabilities Amount Assets Liabilities --------------- ----------------------------------------------------------------------- Interest rate, equity and currency swaps $ 228.5 $ 4.1 $ 12.5 $ 331.8 $ 12.2 $ 8.5 Financial futures 216.9 -- -- 92.2 -- -- Interest rate and equity options 1,031.6 135.4 -- 491.0 115.1 -- Currency forwards 3.1 -- -- 1.4 -- -- Credit derivatives 8.6 0.2 0.1 8.6 0.2 0.1 ----------------------------------------------------------------------- TOTAL $1,488.7 $ 139.7 $ 12.6 $ 925.0 $ 127.5 $ 8.6 =======================================================================
The following table summarizes certain information related to the Company's hedging activities for the years ended December 31, 2004 and 2003:
Year Ended Year Ended ($ IN MILLIONS) December 31, 2004 December 31, 2003 ------------------------------------------------------------------------------ Hedge ineffectiveness recognized related to fair value hedges $ (3.8) $ (3.3) Hedge ineffectiveness recognized related to cash flow hedges (.1) (.3) Net gain or loss from economic hedges in earnings (.6) 8.1
Cash flow transaction amounts expected to be reclassified from accumulated other changes in equity from nonowner sources into pre-tax earnings within twelve months from December 31, 2004 is not significant. 31 THE TRAVELERS LIFE AND ANNUITY COMPANY NOTES TO FINANCIAL STATEMENTS (CONTINUED) FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK In the normal course of business, the Company issues fixed and variable rate loan commitments and has unfunded commitments to partnerships and joint ventures. All of these commitments are to unaffiliated entities. The notional values of loan commitments at December 31, 2004 and 2003 were $34.4 million and $7.6 million, respectively. The notional values of other unfunded commitments were $19.9 million and $31.0 million at December 31, 2004 and 2003, respectively. FAIR VALUE OF CERTAIN FINANCIAL INSTRUMENTS The Company uses various financial instruments in the normal course of its business. Certain insurance contracts are excluded by SFAS No. 107, "Disclosure about Fair Value of Financial Instruments," and therefore are not included in the amounts discussed. At December 31, 2004, investments in fixed maturities had a carrying value and a fair value of $6.3 billion compared with a carrying value and a fair value of $5.4 billion at December 31, 2003. See Notes 1 and 2. At December 31, 2004, mortgage loans had a carrying value of $212.1 million and a fair value of $220.8 million and at December 31, 2003 had a carrying value of $135.4 million and a fair value of $147.6 million. In estimating fair value, the Company used interest rates reflecting the current real estate financing market. The carrying values of short-term securities were $420.0 million and $195.3 million in 2004 and 2003, respectively, which approximated their fair values. Policy loans, which are included in other invested assets, had carrying values of $31.9 million and $26.8 million in 2004 and 2003, respectively, which also approximated their fair values. The Company had interest rate and equity options with fair values of $135.4 million and $115.1 million, at December 31, 2004 and 2003, respectively, also included in other invested assets. The carrying values of $208.7 million and $260.6 million of financial instruments classified as other assets approximated their fair values at December 31, 2004 and 2003, respectively. The carrying values of $425.9 million and $439.2 million of financial instruments classified as other liabilities also approximated their fair values at December 31, 2004 and 2003, respectively. Fair value is determined using various methods, including discounted cash flows, as appropriate for the various financial instruments. At December 31, 2004 and 2003, contractholder funds with defined maturities had a carrying value of $2.8 billion and a fair value of $3.0 billion. The fair value of these contracts is determined by discounting expected cash flows at an interest rate commensurate with the Company's credit risk and the expected timing of cash flows. Contractholder funds without defined maturities had a carrying value of $610.6 million and a fair value of $543.2 million at December 31, 2004, compared with a carrying value of $677.7 million and a fair value of $527.3 million at December 31, 2003. These contracts generally are valued at surrender value. 32 THE TRAVELERS LIFE AND ANNUITY COMPANY NOTES TO FINANCIAL STATEMENTS (CONTINUED) 10. COMMITMENTS AND CONTINGENCIES LITIGATION In August 1999, an amended putative class action complaint captioned LISA MACOMBER, ET AL. VS. TRAVELERS PROPERTY CASUALTY CORPORATION, ET AL. was filed in New Britain, Connecticut Superior Court against the Company, its parent corporation, certain of the Company's affiliates (collectively TLA), and the Company's former affiliate, Travelers Property Casualty Corporation. The amended complaint alleges Travelers Property Casualty Corporation purchased structured settlement annuities from the Company and spent less on the purchase of those structured settlement annuities than agreed with claimants; and that commissions paid to brokers of structured settlement annuities, including an affiliate of the Company, were paid, in part, to Travelers Property Casualty Corporation. The amended complaint was dismissed and following an appeal by plaintiff in September 2002 the Connecticut Supreme Court reversed the dismissal of several of the plaintiff's claims. On May 26, 2004, the Connecticut Superior Court certified a nation wide class action. The class action claims against TLA are violation of the Connecticut Unfair Trade Practice Statute, unjust enrichment and civil conspiracy. On June 15, 2004, the Defendants, including TLA, appealed the Connecticut Superior Court's May 26, 2004 class certification order. In 2003 and 2004, several issues in the mutual fund and variable insurance product industries have come under the scrutiny of federal and state regulators. Like many other companies in our industry, the Company has received a request for information from the Securities and Exchange Commission (SEC) and a subpoena from the New York Attorney General regarding market timing and late trading. During 2004 the SEC requested additional information about the Company's variable product operations on market timing, late trading and revenue sharing, and the SEC, the National Association of Securities Dealers and the New York Insurance Department have made inquiries into these issues and other matters associated with the sale and distribution of insurance products. In addition, like many insurance companies and agencies, in 2004 and 2005 the Company received inquiries from certain state Departments of Insurance regarding producer compensation and bidding practices. The Company is cooperating fully with all of these requests and is not able to predict their outcomes. In addition, the Company is a defendant or co-defendant in various other litigation matters in the normal course of business. These include civil actions, arbitration proceedings and other matters arising in the normal course of business out of activities as an insurance company, a broker and dealer in securities or otherwise. In the opinion of the Company's management, the ultimate resolution of these legal and regulatory proceedings would not be likely to have a material adverse effect on the Company's financial condition or liquidity, but, if involving monetary liability, may be material to the Company's operating results for any particular period. 33 THE TRAVELERS LIFE AND ANNUITY COMPANY NOTES TO FINANCIAL STATEMENTS (CONTINUED) 11. RELATED PARTY TRANSACTIONS TIC handles banking functions, including payment of expenses for the Company and some of its non-insurance affiliates. In addition, Citigroup and certain of its subsidiaries provide investment management and accounting services, payroll, internal auditing, benefit management and administration, property management and investment technology services to the Company as of December 31, 2004 and 2003. Charges for these services are shared by the Company and TIC on cost allocation methods, based generally on estimated usage by department and were insignificant for the Company in 2004, 2003 and 2002. TIC maintains a short-term investment pool in which the Company participates. The position of each company participating in the pool is calculated and adjusted daily. At December 31, 2004 and 2003, the pool totaled approximately $4.1 billion and $3.8 billion, respectively. The Company's share of the pool amounted to $384.2 million and $124.6 million at December 31, 2004 and 2003, respectively, and is included in short-term securities in the balance sheet. At December 31, 2004 and 2003, the Company had investments in Tribeca Citigroup Investments Ltd., an affiliate of the Company, in the amounts of $13.8 million and $25.5 million, respectively. Income of $1.3 million, $6.6 million and $1.9 million was earned on these investments in 2004, 2003 and 2002, respectively. At December 31, 2004 and 2003 the Company had outstanding loaned securities to an affiliate, Citigroup Global Markets Inc., (CGMI) in the amount of $38.1 million and $7.1 million, respectively. The Company has other affiliated investments. The individual investment with any one affiliate was insignificant at December 31, 2004 and 2003. The Company's Travelers Target Maturity (TTM) Modified Guaranteed Annuity Contracts are subject to a limited guarantee agreement by TIC in a principal amount of up to $450 million. TIC's obligation is to pay in full to any owner or beneficiary of the TTM Modified Guaranteed Annuity Contracts principal and interest as and when due under the annuity contract to the extent that the Company fails to make such payment. In addition, TIC guarantees that the Company will maintain a minimum statutory capital and surplus level. The Company distributes fixed and variable annuity products through its affiliate Smith Barney (SB), a division of CGMI. Premiums and deposits related to these products were $506 million, $707 million and $821 million in 2004, 2003 and 2002, respectively. The Company also markets term and universal life products through SB. Premiums related to such products were $107.7 million, $87.5 million and $87.2 million in 2004, 2003 and 2002, respectively. Commissions and fees paid to SB were $50.2 million, $56.7 million and $57.5 million in 2004, 2003 and 2002, respectively. The Company also distributes deferred annuity products through its affiliates Primerica Financial Services, Inc. (PFS), CitiStreet Retirement Services, a division of CitiStreet LLC, (together with its subsidiaries, CitiStreet) and Citibank, N.A. (Citibank). Deposits received from PFS were $636 million, $628 million and $662 million in 2004, 2003 and 2002, respectively. Commissions and fees paid to PFS were $47.9 million, $52.4 million and $47.1 million in 2004, 2003 and 2002, respectively. 34 THE TRAVELERS LIFE AND ANNUITY COMPANY NOTES TO FINANCIAL STATEMENTS (CONTINUED) Deposits received from CitiStreet were $116 million, $82 million and $184 million in 2004, 2003 and 2002, respectively. Related commissions and fees paid to CitiStreet were $3.1 million, $2.3 million and $2.6 million in 2004, 2003 and 2002, respectively. Deposits received from Citibank were $112 million, $162 million and $117 million in 2004, 2003 and 2002, respectively. Commissions and fees paid to Citibank were $13.0 million, $12.4 million and $7.2 million in 2004, 2003 and 2002, respectively. The Company participates in a stock option plan sponsored by Citigroup that provides for the granting of stock options in Citigroup common stock to officers and other employees. To further encourage employee stock ownership, Citigroup introduced the WealthBuilder stock option program during 1997 and the Citigroup Ownership Program in 2001. Under these programs, all employees meeting established requirements have been granted Citigroup stock options. During 2001, Citigroup introduced the Citigroup 2001 Stock Purchase Program for new employees, which allowed eligible employees of Citigroup, including the Company's employees, to enter into fixed subscription agreements to purchase shares at the market value on the date of the agreements. During 2003 Citigroup introduced the Citigroup 2003 Stock Purchase Program, which allowed eligible employees of Citigroup, including the Company's employees, to enter into fixed subscription agreements to purchase shares at the lesser of the market value on the first date of the offering period or the market value at the close of the offering period. Enrolled employees are permitted to make one purchase prior to the expiration date. The Company's charge to income for these plans was insignificant in 2004, 2003 and 2002. Most leasing functions for TIC and the Company are administered by a Citigroup subsidiary. Rent expense related to leases is shared by the companies on a cost allocation method based generally on estimated usage by department. The Company's rent expense was insignificant in 2004, 2003 and 2002. During 2004 TLARC was established as a pure captive to reinsure 100% of the statutory-based risk associated with universal life contracts. Statutory premiums paid by the Company to TLARC totaled $927 million in 2004. Ceding commissions and experience refunds paid by TLARC to the Company totaled $913 million in 2004. The net amount paid was $14 million and was reported as a reduction of other income. See Note 3. 35 THE TRAVELERS LIFE AND ANNUITY COMPANY NOTES TO FINANCIAL STATEMENTS (CONTINUED) 12. RECONCILIATION OF NET INCOME TO NET CASH USED IN OPERATING ACTIVITIES The following table reconciles net income to net cash used in operating activities:
-------------------------------------------------------------------------------- FOR THE YEAR ENDED DECEMBER 31, 2004 2003 2002 ($ IN MILLIONS) -------------------------------------------------------------------------------- Net Income $ 158 $ 119 $ 103 Adjustments to reconcile net income to cash used in operating activities: Realized (gains) losses (17) 7 31 Deferred federal income taxes (47) (39) 87 Amortization of deferred policy acquisition costs 226 136 67 Additions to deferred policy acquisition costs (469) (351) (317) Investment income accrued (7) (37) (35) Insurance reserves (49) (16) (9) Other 314 (44) 72 -------------------------------------------------------------------------------- Net cash used in operations $ 109 $(225) $ (1) --------------------------------------------------------------------------------
13. NON-CASH INVESTING AND FINANCING ACTIVITIES There were no significant non-cash activities for the years end December 31, 2004, 2003 and 2002. 14. SUBSEQUENT EVENT On January 31, 2005, Citigroup announced that it had agreed to sell TIC, the Company and certain other domestic and international insurance businesses (the Life Insurance and Annuity Businesses) to MetLife, Inc. (MetLife) pursuant to an Acquisition Agreement (the Agreement). The transaction is subject to certain regulatory approvals, as well as other customary conditions to closing. Citigroup currently anticipates that the intended sale would be completed this summer. TIC's Primerica segment and certain other assets will remain with Citigroup. Accordingly, prior to the closing, TIC will distribute to its parent company, by way of dividend, Primerica Life Insurance Company and certain other assets. Subject to closing adjustments described in the Agreement, the contemplated sale price would be $11.5 billion. 15. EVENTS (UNAUDITED) SUBSEQUENT TO THE DATE OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM'S REPORT METLIFE, INC. TRANSACTION On July 1, 2005 (the "Acquisition Date"), TLAC and other affiliated entities, including the Company's parent, The Travelers Insurance Company, and substantially all of Citigroup's international insurance businesses, acquired by MetLife from CIHC for $12.0 billion. Consideration paid by MetLife for the purchase consisted of approximately $10.9 billion in cash and 22,436,617 shares of MetLife's common stock with a market value of approximately $1.0 billion to Citigroup and approximately $100 million in other transaction costs. Consideration paid to Citigroup will be finalized subject to review of the June 30, 2005 financial statements of Travelers by both MetLife and Citigroup and the interpretation of the provisions of the acquisition agreement (the "Acquisition Agreement") by both parties. In accordance with Statement of Financial Accounting Standard ("SFAS") No. 141, Business Combinations, and SFAS No. 142, Goodwill and Other Intangible Assets, the Acquisition is being accounted for by MetLife using the purchase method of accounting, which requires that the assets and liabilities of the Company be identified and measured at their fair value as of the Acquisition Date. As required by the U.S. Securities and Exchange Commission Staff Accounting Bulletin 54, Push Down Basis of Accounting in Financial Statements of a Subsidiary, the purchase method of accounting applied by Metlife to the acquired assets and liabilities associated with the Company has been "pushed down" to the Company. The effect of "push down" accounting on the Company's net assets resulted i n a $98 million decrease in the Company's equity. Reflected in this charge is an allocation of $224 million of goodwill relating to the acquisition. The fair value of certain assets acquired and liabilities assumed, including goodwill, may be adjusted during the allocation period due to finalization of the purchase price to be paid to Citigroup, agreement between Citigroup and MetLife as to the tax basis purchase price to be allocated to the acquired subsidiaries, and receipt of information regarding the estimation of certain fair values. In no case will the adjustments extend beyond one year from the acquisition date. These adjustments may have a material effect on the financial statements of the Company In connection with the Acquisition, MetLife also filed with the State of Connecticut Insurance Department (the "Department") an Amended and Restated Form A Statement Regarding the Acquisition of Control of or Merger with a Domestic Insurer, dated April 19, 2005 (the "Form A"), seeking the approval of the Department to acquire control of the Company. The Form A was approved by the Department on June 30, 2005. The Form A includes MetLife's post-Acquisition business plan and financial projections for the Company after the closing date. The Company will generally phase out the products that it currently issues by the end of 2006 which may, over time, result in fewer assets and liabilities. The Company may, however, determine to introduce new products in the future. 36 THE TRAVELERS LIFE AND ANNUITY COMPANY REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The Board of Directors and Shareholder The Travelers Life and Annuity Company: Under date of March 28, 2005, we reported on the balance sheets of The Travelers Life and Annuity Company as of December 31, 2004 and 2003, and the related statements of income, changes in shareholder's equity and cash flows for each of the years in the three-year period ended December 31, 2004, which are included in the Form 10-K. In connection with our audits of the aforementioned financial statements, we also audited the related financial statement schedules as listed in the accompanying index. These financial statement schedules are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statement schedules based on our audits. In our opinion, such financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein. As discussed in Note 1 to the financial statements, the Company changed its methods of accounting and reporting for certain nontraditional long-duration contracts and for separate accounts in 2004 and for goodwill and intangible assets in 2002. /s/ KPMG LLP Hartford, Connecticut March 28, 2005 37 THE TRAVELERS LIFE AND ANNUITY COMPANY SCHEDULE I SUMMARY OF INVESTMENTS - OTHER THAN INVESTMENTS IN RELATED PARTIES DECEMBER 31, 2004 ($ IN MILLIONS)
- ------------------------------------------------------------------------------------------------------------------ AMOUNT SHOWN IN TYPE OF INVESTMENT COST VALUE BALANCE SHEET (1) - ------------------------------------------------------------------------------------------------------------------ Fixed Maturities: Bonds: U.S. Government and government agencies and authorities $ 719 $ 741 $ 741 States, municipalities and political subdivisions 57 65 65 Foreign governments 63 69 69 Public utilities 354 382 382 Convertible bonds and bonds with warrants attached 25 28 28 All other corporate bonds 4,707 4,970 4,970 - ------------------------------------------------------------------------------------------------------------------ Total Bonds 5,925 6,255 6,255 Redeemable Preferred Stocks 4 6 6 - ------------------------------------------------------------------------------------------------------------------ Total Fixed Maturities 5,929 6,261 6,261 - ------------------------------------------------------------------------------------------------------------------ Equity Securities: Common Stocks: Industrial, miscellaneous and all other 12 15 15 - ------------------------------------------------------------------------------------------------------------------ Total Common Stocks 12 15 15 Non-Redeemable Preferred Stocks 4 4 4 - ------------------------------------------------------------------------------------------------------------------ Total Equity Securities 16 19 19 - ------------------------------------------------------------------------------------------------------------------ Mortgage Loans 212 212 Policy Loans (4) 32 32 Short-Term Securities 420 420 Other Investments (2) (3) 312 312 - ------------------------------------------------------------------------------------------------------------------ Total Investments $6,921 $7,256 ==================================================================================================================
(1) Determined in accordance with methods described in Notes 1 and 2 of Notes to Financial Statements. (2) Excludes cost and carrying value of investments in related parties of $72 million and $73 million, respectively. (3) Includes derivatives marked to market and recorded at fair value in the balance sheet. (4) Included in other invested assets on balance sheet. 38 THE TRAVELERS LIFE AND ANNUITY COMPANY SCHEDULE III SUPPLEMENTARY INSURANCE INFORMATION 2002-2004 ($ IN MILLIONS)
- ------------------------------------------------------------------------------------------------------------------------------------ FUTURE POLICY BENEFITS, BENEFITS, LOSSES, NET CLAIMS, LOSSES OTHER DEFERRED POLICY CLAIMS AND LOSS PREMIUM INVESTMENT AND SETTLEMENT AMORTIZATION OF DEFERRED OPERATING PREMIUMS ACQUISITION COSTS EXPENSES (1) REVENUE INCOME EXPENSES (2) POLICY ACQUISITION COSTS EXPENSES WRITTEN - ------------------------------------------------------------------------------------------------------------------------------------ 2004 $1,522 $6,306 $40 $389 $326 $226 $63 $40 2003 $1,279 $5,610 $41 $356 $307 $136 $49 $41 2002 $1,064 $5,032 $43 $312 $275 $ 67 $32 $43
(1) Includes contractholder funds. (2) Includes interest credited on contractholder funds. 39 THE TRAVELERS LIFE AND ANNUITY COMPANY SCHEDULE IV REINSURANCE ($ IN MILLIONS)
- ----------------------------------------------------------------------------------------- PERCENTAGE ASSUMED OF AMOUNT CEDED TO OTHER FROM OTHER ASSUMED TO GROSS AMOUNT COMPANIES COMPANIES NET AMOUNT NET - ----------------------------------------------------------------------------------------- 2004 - ---- Life Insurance In Force $54,886 $44,286 $ -- $10,600 -- % Premiums: Annuity $ 6 $ -- $ -- $ 6 Individual life 68 34 -- 34 ------- ------- ------- ------- Total Premiums $ 74 $ 34 $ -- $ 40 -- % ======= ======= ======= ======= 2003 - ---- Life Insurance In Force $43,671 $34,973 $ -- $ 8,698 -- % Premiums: Annuity $ 4 $ -- $ -- $ 4 Individual Life 62 25 -- 37 ------- ------- ------- ------- Total Premiums $ 66 $ 25 $ -- $ 41 -- % ======= ======= ======= ======= 2002 - ---- Life Insurance In Force $35,807 $29,261 $ -- $ 6,546 -- % Premiums: Annuity $ 5 $ -- $ -- $ 5 Individual life 53 15 -- 38 ------- ------- ------- ------- Total Premiums $ 58 $ 15 $ -- $ 43 -- % ======= ======= ======= =======
40 TRAVELERS RETIREMENT ACCOUNT STATEMENT OF ADDITIONAL INFORMATION THE TRAVELERS SEPARATE ACCOUNT SIX FOR VARIABLE ANNUITIES INDIVIDUAL VARIABLE ANNUITY CONTRACT ISSUED BY THE TRAVELERS LIFE AND ANNUITY COMPANY ONE CITYPLACE HARTFORD, CONNECTICUT 06103-3415 L-21257S December 2005 52 PART C OTHER INFORMATION ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS (a) The financial statements of the Registrant and the Report of Independent Registered Public Accounting Firm thereto are contained in the Registrant's Annual Report and are included in the Statement of Additional Information. The financial statements of the Registrant include: Statement of Assets and Liabilities as of December 31, 2004 Statement of Operations for the year ended December 31, 2004 Statement of Changes in Net Assets for the years ended December 31, 2004 and 2003 Statement of Investments as of December 31, 2004 Notes to Financial Statements The financial statements and schedules of The Travelers Life and Annuity Company and the report of Independent Registered Public Accounting Firm, are contained in the Statement of Additional Information. The financial statements of The Travelers Life and Annuity Company include: Statements of Income for the years ended December 31, 2004, 2003 and 2002 Balance Sheets as of December 31, 2004 and 2003 Statements of Changes in Retained Earnings and Accumulated Other Changes in Equity from Non-Owner Sources for the years ended December 31, 2004, 2003 and 2002 Statements of Cash Flows for the years ended December 31, 2004, 2003 and 2002 Notes to Financial Statements (b) Exhibits EXHIBIT NUMBER DESCRIPTION -------- ----------- 1. Resolution of The Travelers Life and Annuity Company Board of Directors authorizing the establishment of the Registrant. (Incorporated herein by reference to Exhibit 1 to the Registration Statement on Form N-4, File No. 333-58809, filed July 9, 1998.) 2. Not Applicable. 3(a). Distribution and Principal Underwriting Agreement among the Registrant, The Travelers Life and Annuity Company and Travelers Distribution LLC (Incorporated herein by reference to Exhibit 3(a) to the Registration Statement on Form N-4, File No. 333-58809 filed February 26, 2001.) 3(b). Selling Agreement. (Incorporated herein by reference to Exhibit 3(b) to Post-Effective Amendment No. 2 the Registration Statement on Form N-4, File No. 333-65942 filed April 15, 2003.) 4. Variable Annuity Contract. (Incorporated herein by reference to Exhibit 4 to Pre-Effective Amendment No. 1 to the Registration Statement on Form N-4, File No. 333-58809, filed November 3, 1998.) 5. Application. (Incorporated herein by reference to Exhibit 5 to Pre-Effective Amendment No. 1 to the Registration Statement on Form N-4, File No. 333-58809, filed November 3, 1998.) 6(a). Charter of The Travelers Life and Annuity Company, as amended on April 10, 1990. (Incorporated herein by reference to Exhibit 6(a) to the Registration Statement on Form N-4, File No. 333-40191, filed November 13, 1997.) 6(b) By-Laws of The Travelers Life and Annuity Company, as amended on October 20, 1994. (Incorporated herein by reference to Exhibit 6(b) to the Registration Statement on Form N-4, File No. 333-40191, filed November 13, 1997.) 7. Specimen Reinsurance Agreement. (Incorporated herein by reference to Exhibit 7 to Post-Effective Amendment No. 2 to the Registration Statement on Form N-4, File No. 333-65942, filed April 15, 2003.) 8. Participation Agreements. (Incorporated herein by reference to Exhibit 8 to Post-Effective Amendment No. 8 to the Registration Statement on Form N-4, File No. 333-101778, filed April 21, 2005). 9. Opinion of Counsel as to the legality of securities being registered. (Incorporated herein by reference to Exhibit 9 to the Registration Statement on Form N-4, filed July 9, 1998.) 10. Consent of KPMG LLP, Independent Registered Public Accounting Firm. Filed herewith. 11. Not applicable. 12. Not applicable. 15 Powers of Attorney authorizing Michele H. Abate, Thomas S. Clark, John E. Connolly, Jr., Mary K. Johnson, James L. Lipscomb, Gina C. Sandonato, Myra L. Saul, and Marie C. Swift as signatory for C. Robert Henrikson, Leland C. Launer, Jr., Lisa M. Weber, Stanley J. Talbi, and Joseph J. Prochaska, Jr. (Incorporated herein by reference to Post-Effective Amendment No. 8 to the Registration Statement on Form N-4, File No. 333-100434, filed September 19, 2005). ITEM 25. DIRECTORS AND OFFICERS OF THE DEPOSITOR
NAME AND PRINCIPAL POSITIONS AND OFFICES BUSINESS ADDRESS WITH INSURANCE COMPANY - ---------------- ---------------------- C. Robert Henrikson (a) Director, Chairman, President and Chief Executive Officer Leland C. Launer, Jr. (e) Director Lisa M. Weber (a) Director Steven A. Kandarian (b) Executive Vice President and Chief Investment Officer James L. Lipscomb (a) Executive Vice President and General Counsel Gwenn L. Carr (a) Senior Vice President and Secretary Michael K. Farrell (b) Senior Vice President Hugh C. McHaffie (d) Senior Vice President Joseph J. Prochaska, Jr. (a) Senior Vice President and Chief Accounting Officer Stanley J. Talbi (a) Senior Vice President and Chief Financial Officer Anthony J. Williamson (a) Senior Vice President and Treasurer Roberto Baron (a) Vice President and Senior Actuary Steven J. Brash (a) Vice President William D. Cammarata (f) Vice President Elizabeth M. Forget (g) Vice President S. Peter Headley (h) Vice President and Assistant Secretary Daniel D. Jordan (d) Vice President and Assistant Secretary Bennett Kleinberg (c) Vice President and Actuary Paul L. LeClair (d) Vice President and Actuary Gene L. Lunman (c) Vice President Joseph J. Massimo (f) Vice President Daniel A. O'Neill (b) Vice President Mark S. Reilly (c) Vice President Mark J. Remington (c) Vice President Jonathan L. Rosenthal (b) Chief Hedging Officer Kevin M. Thornwarth (b) Vice President Mark. H. Wilsmann (b) Vice President Louis P. DiGiacomo (a) Assistant Vice President Christopher A. Kremer (d) Assistant Vice President and Actuary Sharon A. Owens (c) Assistant Vice President Ellen N. Derrig (b) Assistant Secretary William P. Gardella (b) Assistant Secretary Nancy J. Hammer (i) Assistant Secretary Donald J. Healy, Jr. (j) Assistant Secretary Mark T. Pallis (k) Assistant Secretary Edward M. Pollock (k) Assistant Secretary Gregory M. Harrison (a) Assistant Treasurer James W. Koeger (l) Assistant Treasurer Patricia M. Wersching (l) Assistant Treasurer Joseph A. Zdeb (a) Assistant Treasurer
PRINCIPAL BUSINESS ADDRESS: (a) One MetLife Plaza, 27-01 Queens Plaza North, Long Island City, New York 11101 (b) 10 Park Avenue, Morristown, NJ 07962 (c) 185 Asylum Street, Hartford, CT 06103 (d) 501 Boylston Street, Boston, MA 02116 (e) 501 Route 22, Bridgewater, NJ 08807 (f) 18210 Crane Nest Drive, Tampa, FL 33647 (g) 260 Madison Avenue, New York, NY 10016 (h) 6750 Poplar Avenue, Germantown, TN 38138 (i) 2400 Lakeview Parkway, Alpharetta, GA 30004 (j) 2021 Spring Road, Oak Brook, IL 60523 (k) 400 South El Camino Real, San Mateo, CA 94402 (l) 13045 Tesson Ferry Road, St. Louis, MO 63128 ITEM 26. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE DEPOSITOR OR REGISTRANT The Registrant and Depositor and ultimately controlled by MetLife, Inc. An organizational chart for MetLife, Inc. follows: ORGANIZATIONAL STRUCTURE OF METLIFE, INC. AND SUBSIDIARIES AS OF SEPTEMBER 30, 2005 The following is a list of subsidiaries of MetLife, Inc. updated as of September 30, 2005. Those entities which are listed at the left margin (labeled with capital letters) are direct subsidiaries of MetLife, Inc. Unless otherwise indicated, each entity which is indented under another entity is a subsidiary of that other entity and, therefore, an indirect subsidiary of MetLife, Inc. Certain inactive subsidiaries have been omitted from the MetLife, Inc. organizational listing. The voting securities (excluding directors' qualifying shares, if any) of the subsidiaries listed are 100% owned by their respective parent corporations, unless otherwise indicated. The jurisdiction of domicile of each subsidiary listed is set forth in the parenthetical following such subsidiary. A. MetLife Group, Inc. (NY) B. MetLife Bank National Association (USA) C. Exeter Reassurance Company, Ltd. (Bermuda) D. MetLife Taiwan Insurance Company Limited (Taiwan) E. Metropolitan Tower Life Company (DE) 1. TH Tower NGP, LLC (DE) 2. Partners Tower, L.P. - a 99% limited partnership interest of Partners Tower, L.P. is held by Metropolitan Tower Life Company and 1% general partnership interest is held by TH Tower NGP, LLC (DE) 3. TH Tower Leasing, LLC (DE) 4. CitiStreet Retirement Services LLC (NJ) a) CitiStreet Financial Services LLC (NJ) b) CitiStreet Funds Management LLC (NJ) c) CitiStreet Associates LLC (DE) 1) CitiStreet Equities LLC (NJ) 2) CitiStreet Associates of Montana LLC (MT) 3) CitiStreet Associates of Texas, Inc. (TX) 4) CitiStreet Associates of Hawaii LLC (HI) 5) CitiStreet Associates Insurance Agency of Massachusetts LLC (MA) F. MetLife Pensiones S.A. (Mexico)- 97.4738% is owned by Metlife, Inc. and 2.5262% is owned by Metropolitan Asset Management Corporation. G. MetLife Chile Inversiones Limitada (Chile)- 99.9999999% is owned by MetLife, Inc. and 0.0000001% is owned by Natiloportem Holdings, Inc. 1. MetLife Chile Seguros de Vida S.A. (Chile)- 99.99% is owned by MetLife Chile Inversiones Limitada, and 0.01% is owned by MetLife International Holdings, Inc. a) MetLife Chile Administradora de Mutuos Hipotecarios S.A. (Chile)- 99.99% is owned by MetLife Chile Seguros de Vida S.A., and 0.01% is owned by MetLife Chile Inversiones Limitada. H. MetLife Mexico S.A. (Mexico)- 98.70541% is owned by Metlife, Inc., 1.27483% is owned by Metropolitan Asset Management Corporation and 0.01976% is owned by Metlife International Holdings, Inc. 1. MetLife Afore, S.A. de C.V. (Mexico)- 99.99% is owned by MetLife Mexico S.A. (Mexico) and 0.01% is owned by MetLife Pensiones S.A. a) Met1 SIEFORE, S.A. de C.V. (Mexico)- 99.99% is owned by MetLife Afore, S.A. and 0.01% is owned by MetLife Mexico S.A. (Mexico) b) Met2 SIEFORE, S.A. de C.V. (Mexico)- 99.99% is owned by MetLife Afore, S.A. and 0.01% is owned by MetLife Mexico S.A. (Mexico) I. MetLife Mexico Servicios, S.A. de C.V. (Mexico)- 98% is owned by MetLife, Inc. and 2% is owned by MetLife International Holdings, Inc. J. Metropolitan Life Seguros de Vida S.A. (Uruguay) K. MetLife Securities, Inc. (DE) L. Enterprise General Insurance Agency, Inc. (DE) 1. MetLife General Insurance Agency of Texas, Inc. (DE) 2. MetLife General Insurance Agency of Massachusetts, Inc. (MA) 3. Nathan and Lewis Associates of Texas, Inc. (TX) 4. Nathan and Lewis Associates Insurance Agency of Massachusetts, Inc. (MA) 1 M. Metropolitan Property and Casualty Insurance Company (RI) 1. Metropolitan General Insurance Company (RI) 2. Metropolitan Casualty Insurance Company (RI) 3. Metropolitan Direct Property and Casualty Insurance Company (RI) 4. Met P&C Managing General Agency, Inc. (TX) 5. MetLife Auto & Home Insurance Agency, Inc. (RI) 6. Metropolitan Group Property and Casualty Insurance Company (RI) a) Metropolitan Reinsurance Company (U.K.) Limited (United Kingdom) 7. Metropolitan Lloyds, Inc. (TX) a) Metropolitan Lloyds Insurance Company of Texas (TX)- Metropolitan Lloyds Insurance Company of Texas, an affiliated association, provides automobile, homeowner and related insurance for the Texas market. It is an association of individuals designated as underwriters. Metropolitan Lloyds, Inc., a subsidiary of Metropolitan Property and Casualty Insurance Company, serves as the attorney-in-fact and manages the association. 8. Economy Fire & Casualty Company (IL) a) Economy Preferred Insurance Company (IL) b) Economy Premier Assurance Company (IL) N. Cova Corporation (MO) 1. Texas Life Insurance Company (TX) a) Texas Life Agency Services, Inc. (TX) b) Texas Life Agency Services of Kansas, Inc. (KS) 2. Cova Life Management Company (DE) O. MetLife Investors Insurance Company (MO) 1. MetLife Investors Insurance Company of California (CA) P. First MetLife Investors Insurance Company (NY) Q. Walnut Street Securities, Inc. (MO) 1. Walnut Street Advisers, Inc. (MO) R. Newbury Insurance Company, Limited (BERMUDA) S. MetLife Investors Group, Inc. (DE) 1. MetLife Investors USA Insurance Company (DE) 2. MetLife Investors Distribution Company (MO) 3. Met Investors Advisory, LLC (DE) 4. MetLife Investors Financial Agency, Inc. (TX) 2 T. MetLife International Holdings, Inc. (DE) 1. Natiloportem Holdings, Inc. (DE) a) Servicios Administrativos Gen, S.A. de C.V. (Mexico) (1) MLA Comercial, S.A. de C.V. (Mexico) 99% is owned by Servicios Administrativos Gen, S.A. de C.V. and 1% is owned by MetLife Mexico Cares, S.A. de C.V. (2) MLA Servicios, S.A. de C.V. (Mexico) 99% is owned by Servicios Administrativos Gen, S.A. de C.V. and 1% is owned by MetLife Mexico Cares, S.A. de C.V. 2. MetLife India Insurance Company Private Limited (India)- 26% is owned by MetLife International Holdings, Inc. and 74% is owned by third parties. 3. Metropolitan Life Insurance Company of Hong Kong Limited (Hong Kong)- 99.9987% is owned by Metlife International Holdings, Inc. and 0.0013% is owned by Natiloporterm Holdings, Inc. 4. Metropolitan Life Seguros de Retiro S.A. (Argentina)- 95% is owned by MetLife International Holdings, Inc. and 5% is owned by Natiloportem Holdings, Inc. 5. Metropolitan Life Seguros de Vida S.A. (Argentina)- 95% is owned by MetLife International Holdings, Inc. and 5% is owned by Natiloportem Holdings, Inc. a) Met AFJP S.A. (Argentina)- 95% of the shares of Met AFJP S.A. are owned by Metropolitan Life Seguros de Vida S.A. and 5% of the shares of Met AFJP S.A. are held by Metropolitan Life Seguros de Retiro S.A. 6. MetLife Insurance Company of Korea Limited (South Korea) 7. Metropolitan Life Seguros e Previdencia Privada S.A. (Brazil)- 99.999999% is owned by MetLife International Holdings, Inc. and 0.000001% is owned by Natiloportem Holdings, Inc. a) CitiInsurance de Brasil Vida e Previdencia S.A. (Brazil) 8. MetLife Global, Inc. (DE) 9. MetLife Administradora de Fundos Multipatrocinados Ltda (Brazil) - 99.999978% is owned by MetLife International Holdings, Inc. and 0.000022% is owned by Natiloportem Holdings, Inc. 10. MetLife Insurance Company Limited (Hong Kong) 11. MetLife General Insurance Limited (Australia) 12. MetLife Limited (United Kingdom) 13. MetLife Insurance S.A./NV (Belgium) - 99.9% is owned by MetLife International Holdings, Inc. and 0.1% is owned by third parties. 14. MetLife Services Limited (United Kingdom) 15. Siembra Seguros de Vida S.A. (Argentina) - 95.25% is owned by MetLife International Holdings, Inc. and 4.75% is owned by Natiloportem Holdings, Inc. 16. MetLife International Insurance Ltd. (Bermuda) 17. MetLife Insurance Limited (Australia) a) MetLife Insurance and Investment Trust (Australia) 18. Siembra Seguros de Retiro S.A. (Argentina) - 95.25% is owned by MetLife International Holdings, Inc. and 4.75% is owned by; Natiloportem Holdings, Inc. 19. Best Market S.A. (Argentina) - 95% is owned by MetLife International Holdings, Inc. and 5% is held by Natiloportem Holdings, Inc. 20. Compania Previsional MetLife S.A. (Argentina) - 99.999978% is owned by MetLife International Holdings, Inc. and 0.000022% is owned by Natiloportem Holdings, Inc. a) Siembra AFJP S.A. (Argentina) - 99.999978% is owned by MetLife International Holdings, Inc. and 0.000022% is owned by Natiloportem Holdings, Inc. 21. MetLife Worldwide Holdings, Inc. a) MetLife Towarzystwo Ubezpieczen na Zycie S.A. (Poland) b) CDMK, Inc. (Korea) c) CitiInsurance Reinsurance (Bermuda) Ltd. (Bermuda) d) MetLife Direct Co., Ltd. (Japan) U. Metropolitan Life Insurance Company (NY) 1. 334 Madison Avenue BTP-D Holdings, LLC (DE) 2. 334 Madison Avenue BTP-E Holdings, LLC (DE) 3. 334 Madison Avenue Euro Investments, Inc. (DE) a) Park Twenty Three Investments Company (United Kingdom)- 99% of the voting control of Park Twenty Three Investments Company is held by 334 Madison Euro Investments, Inc. and 1% voting control is held by St. James Fleet Investments Two Limited. (1) Convent Station Euro Investments Four Company (United Kingdom)- 99% of the voting control of Convent Station Euro Investments Four Company is held by Park Twenty Three Investments Company and 1% voting control is held by 334 Madison Euro Investments, Inc. as nominee for Park Twenty Three Investments Company. 4. St. James Fleet Investments Two Limited (Cayman Islands)- 34% of the shares of St. James Fleet Investments Two Limited is held by Metropolitan Life Insurance Company. 5. One Madison Investments (Cayco) Limited (Cayman Islands)- 89.9% of the voting control of One Madison Investments (Cayco) Limited is held by Metropolitan Life Insurance Company and 10.1% voting control is held by Convent Station Euro Investments Four Company. 6. CRB Co, Inc. (MA)- AEW Real Estate Advisors, Inc. holds 49,000 preferred non-voting shares of CRB Co., Inc. and AEW Advisors, Inc. holds 1,000 preferred non-voting shares of CRB, Co., Inc. 7. GA Holding Corp. (MA) 3 9. L/C Development Corporation (CA) 10. Benefit Services Corporation (GA) 11. Thorngate, LLC (DE) 12. Alternative Fuel I, LLC (DE) 13. Transmountain Land & Livestock Company (MT) 14. MetPark Funding, Inc. (DE) 15. HPZ Assets LLC (DE) 16. MetDent, Inc. (DE) 17. Missouri Reinsurance (Barbados), Inc. (Barbados) 18. Metropolitan Tower Realty Company, Inc. (DE) 19. MetLife (India) Private Ltd. (India) 20. Metropolitan Marine Way Investments Limited (Canada) 21. MetLife Private Equity Holdings, LLC (DE) 22. 23rd Street Investments, Inc. (DE) a) Mezzanine Investment Limited Partnership-BDR (DE). Metropolitan Life Insurance Company holds a 99% limited partnership interest in Mezzanine Investment Limited Partnership-BDR and 23rd Street Investments, Inc. is a 1% general partner. b) Mezzanine Investment Limited Partnership-LG (DE). 23rd Street Investments, Inc. is a 1% general partner of Mezzanine Investment Limited Partnership-LG. Metropolitan Life Insurance Company holds a 99% limited partnership interest in Mezzanine Investment Limited Partnership-LG. 23. Metropolitan Realty Management, Inc. (DE) 24. Hyatt Legal Plans, Inc. (DE) a) Hyatt Legal Plans of Florida, Inc. (FL) 25. MetLife Holdings, Inc. (DE) a) MetLife Credit Corp. (DE) b) MetLife Funding, Inc. (DE) 4 26. Bond Trust Account A (MA) 27. Metropolitan Asset Management Corporation (DE) a) MetLife Capital Credit L.P. (DE)- 90% of MetLife Capital Credit L.P. is held directly by Metropolitan Life Insurance Company and 10% General Partnership interest of MetLife Capital Credit L.P. is held by Metropolitan Asset Management Corporation. b) MetLife Capital Limited Partnership (DE)- 73.78% Limited Partnership interest is held directly by Metropolitan Life Insurance Company and 9.58% Limited Partnership and 16.64% General Partnership interests are held by Metropolitan Asset Management Corporation. c) MetLife Investments Asia Limited (Hong Kong)- One share of MetLife Investments Asia Limited is held by W&C Services, Inc., a nominee of Metropolitan Asset Management Corporation. d) MetLife Investments Limited (United Kingdom)- 23rd Street Investments, Inc. holds one share of MetLife Investments Limited and LA Investments, S.A. and 1% of MetLife Latin America Asesorias e Inversiones Limitada. e) LA Investments, S.A. (Argentina)- 23rd Street Investments, Inc. holds one share of MetLife Investments Limited and LA Investments, S.A. and 1% of MetLife Latin America Asesorias e Inversiones Limitada. f) MetLife Latin America Asesorias e Inversiones Limitada (Chile)- 23rd Street Investments, Inc. holds one share of MetLife Investments Limited and LA Investments, S.A. and 1% of MetLife Latin America Asesorias e Inversiones Limitada. 28. New England Life Insurance Company (MA) a) MetLife Advisers, LLC (MA) b) New England Securities Corporation (MA) c) Omega Reinsurance Corporation (AZ) 29. GenAmerica Financial, LLC (MO) a) GenAmerica Capital I (DE) b) General American Life Insurance Company (MO) (1) Paragon Life Insurance Company (MO) (2) GenAmerica Management Corporation (MO) 5 (3) Reinsurance Group of America, Incorporated (MO) - (51.6%) (a) Reinsurance Company of Missouri, Incorporated (MO) (i) RGA Reinsurance Company (MO) (A) Fairfield Management Group, Inc. (MO) (aa) Reinsurance Partners, Inc. (MO) (bb) Great Rivers Reinsurance Management, Inc. (MO) (cc) RGA (U.K.) Underwriting Agency Limited (United Kingdom) (b) RGA Worldwide Reinsurance Company Ltd. (Barbados) (c) RGA Sigma Reinsurance SPC (Cayman Islands) (d) RGA Americas Reinsurance Company, Ltd. (Barbados) (e) RGA Reinsurance Company (Barbados) Ltd. (Barbados) (i) RGA Financial Group, L.L.C. (DE)- 80% of RGA Financial Group, L.L.C. is held by RGA Reinsurance Company (Barbados) Ltd. and 20% of RGA Financial Group, LLC is held by RGA Reinsurance Company (f) RGA Life Reinsurance Company of Canada (Canada) (g) RGA International Corporation (Nova Scotia) (i) RGA Financial Products Limited (Canada) (h) RGA Holdings Limited (U.K.) (United Kingdom) (i) RGA UK Services Limited (United Kingdom) (ii) RGA Capital Limited U.K. (United Kingdom) (iii) RGA Reinsurance (UK) Limited (United Kingdom) (i) RGA South African Holdings (Pty) Ltd. (South Africa) (i) RGA Reinsurance Company of South Africa Limited (South Africa) (j) RGA Australian Holdings PTY Limited (Australia) (i) RGA Reinsurance Company of Australia Limited (Australia) (ii) RGA Asia Pacific PTY, Limited (Australia) (k) General American Argentina Seguros de Vida, S.A. (Argentina) 6 (l) RGA Technology Partners, Inc. (MO) (m) RGA International Reinsurance Company (Ireland) (n) RGA Capital Trust I 30. Corporate Real Estate Holdings, LLC (DE) 31. Ten Park SPC (CAYMAN ISLANDS ) - 1% voting control is held by Metropolitan Asset Management Corporation 32. MetLife Tower Resources Group, Inc. (DE) 33. Headland Development Corporation (CA) 34. Headland - Pacific Palisades, LLC (CA) 35. Headland Properties Associates (CA) 36. Krisman, Inc. (MO) 37. Special Multi-Asset Receivables Trust (DE) 38. White Oak Royalty Company (OK) 39. 500 Grant Street GP LLC (DE) 40. 500 Grant Street Associates Limited Partnership (CT) - 99% is held by Metropolitan Life Insurance Company and 1% by 500 Grant Street GP LLC V. MetLife Capital Trust II (DE) W. MetLife Capital Trust III (DE) X. The Travelers Insurance Company (CT) 1. 190 LaSalle Associates L.L.C. (DE) - 50% is owned by a third party 2. 440 South LaSalle LLC (DE) 3. BHI Rodeo LLC (DE) 4. Citigroup Investments Oakmont Lane, LLC (DE) - 50% is owned by a third party 5. Citigroup Alternative Investments Opportunity Fund I, LLC (DE) - 33% is owned by third party 6. Citigroup Alternative Investments Opportunity Fund III Associates, LLC (CT) - 33% is owned by third party a) Tishman Speyer/Citigroup Alternative Investments Associates III, LLC (DE) 7. Pilgrim Investments Highland Park, LLC (CO) 8. Pilgrim Investments Schaumberg Windy Point, LLC (DE) 9. Pilgrim Investments York Road, LLC(DE) 10. Euro TI Investments LLC (DE) 11. Greenwich Street Investments, L.L.C. (DE) a) Greenwich Street Capital Offshore Fund, Ltd (Virgin Islands) 12. Hollow Creek, L.L.C. (CT/NC) 13. One Financial Place Corporation (DE) - 100% is owned in the aggregate by The Travelers Insurance Company and The Travelers Life and Annuity Company. a) One Financial Place, LP (DE) 14. One Financial Place Holdings, LLC (DE)-100% is owned in the aggregate by The Travelers Insurace Company and The Travelers Life and Annuity Company. 15. Plaza LLC (CT) a) Travelers Asset Management International Company LLC (NY) b) Tower Square Securities, Inc. (CT) 1) Tower Square Securities Insurance Agency of Alabama, Inc. (AL) 2) Tower Square Securities Insurance Agency of Massachusetts, Inc. (MA) 3) Tower Square Securities Insurance Agency of New Mexico, Inc. (NM) 4) Tower Square Securities Insurance Agency of Ohio, Inc. (OH) (99%) 5) Tower Square Securities Insurance Agency of Texas, Inc. (TX) c) Travelers Distribution LLC (DE) d) Travelers Investment Advisers, Inc. (DE) 16. TIC European Real Estate LP, LLC (DE) 17. TL&A Insurance Distribution LLC (DE) 18. Travelers European Investments LLC (CT) 19. Travelers International Investments Ltd. (Cayman Islands) 20. Tribeca Citigroup Investments Ltd. (Cayman Islands) (68%) - 68% is owned by The Travelers Insurance Company, 4% is owned by The Travelers Life and Annuity Company and 28% is owned by a third party. a) Tribeca Global Convertible Investments Ltd. (Cayman Islands) (83%) 21. Trumbull Street Equity Investments LLC (DE) a) Tandem EGI/C Investments, L.P. (DE) - The General Partner is Trumbull Street Equity Investments LLC. 22. The Travelers Life and Annuity Company (CT) a) Euro TL Investments LLC (DE) b) SSB Private Selections, LLC (DE) (50%) 1) Solomon Smith Barney Private Selection Fund I, LLC (NY) 23. TLA Holdings LLC (DE) a) The Prospect Company (DE) 1) Panther Valley, Inc. (NJ) 24. Umbrella Bear, Inc. (FL) 25. Ryan/Pilgrim Investments Chandler Freeways LLC (DE) 26. TRAL & Co. (DE) - is a general partner. Its partners are The Travelers Insurance Company and The Travelers Life and Annuity Company. 27. Tribeca Distressed Securities LLC (DE) Y. The Travelers Life & Annuity Reinsurance Company (SC) Z. Citicorp Life Insurance Company (AZ) 1. First Citicorp Life Insurance Company (NY) 2. Euro CL Investments LLC (DE) AA. Trumbull Street Investments LLC (DE) The voting securities (excluding directors' qualifying shares, if any) of each subsidiary shown on the organizational chart are 100% owned by their respective parent corporation, unless otherwise indicated. In addition to the entities shown on the organizational chart, MetLife, Inc. (or where indicated, a subsidiary) also owns interests in the following entities: 1) Metropolitan Life Insurance Company owns varying interests in certain mutual funds distributed by its affiliates. These ownership interests are generally expected to decrease as shares of the funds are purchased by unaffiliated investors. 2) Metropolitan Life Insurance Company indirectly owns 100% of the non-voting preferred stock of Nathan and Lewis Associates Ohio, Incorporated, an insurance agency. 100% of the voting common stock of this company is held by an individual who has agreed to vote such shares at the direction of N.L. HOLDING CORP. (DEL), a direct wholly owned subsidiary of MetLife, Inc. 3) Mezzanine Investment Limited Partnerships ("MILPs"), Delaware limited partnerships, are investment vehicles through which investments in certain entities are held. A wholly owned subsidiary of Metropolitan Life Insurance Company serves as the general partner of the limited partnerships and Metropolitan Life Insurance Company directly owns a 99% limited partnership interest in each MILP. The MILPs have various ownership and/or debt interests in certain companies. 4) New England Life Insurance Company ("NELICO"), owns 100% of the voting stock of Omega Reinsurance Corporation. NELICO does not have a financial interest in this subsidiary. 5) The Metropolitan Money Market Pool and MetLife Intermediate Income Pool are pass-through investment pools, of which Metropolitan Life Insurance Company and/or its subsidiaries and/or affiliates are general partners. NOTE: THE METLIFE, INC. ORGANIZATIONAL CHART DOES NOT INCLUDE REAL ESTATE JOINT VENTURES AND PARTNERSHIPS OF WHICH METLIFE, INC. AND/OR ITS SUBSIDIARIES IS AN INVESTMENT PARTNER. IN ADDITION, CERTAIN INACTIVE SUBSIDIARIES HAVE ALSO BEEN OMITTED. 7 ITEM 27. NUMBER OF CONTRACT OWNERS As of October 31, 2005, there were 7,597 Contract Owners. ITEM 28. INDEMNIFICATION Sections 33-770 to 33-778, inclusive of the Connecticut General Statutes ("C.G.S.") regarding indemnification of directors and officers of Connecticut corporations provides in general that Connecticut corporations shall indemnify their officers, directors and certain other defined individuals against judgments, fines, penalties, amounts paid in settlement and reasonable expenses actually incurred in connection with proceedings against the corporation. The corporation's obligation to provide such indemnification generally does not apply unless (1) the individual is wholly successful on the merits in the defense of any such proceeding; or (2) a determination is made (by persons specified in the statute) that the individual acted in good faith and in the best interests of the corporation and in all other cases, his conduct was at least not opposed to the best interests of the corporation, and in a criminal case he had no reasonable cause to believe his conduct was unlawful; or (3) the court, upon application by the individual, determines in view of all of the circumstances that such person is fairly and reasonably entitled to be indemnified, and then for such amount as the court shall determine. With respect to proceedings brought by or in the right of the corporation, the statute provides that the corporation shall indemnify its officers, directors and certain other defined individuals, against reasonable expenses actually incurred by them in connection with such proceedings, subject to certain limitations. C.G.S. Section 33-778 provides an exclusive remedy; a Connecticut corporation cannot indemnify a director or officer to an extent either greater or less than that authorized by the statute, e.g., pursuant to its certificate of incorporation, by-laws, or any separate contractual arrangement. However, the statute does specifically authorize a corporation to procure indemnification insurance to provide greater indemnification rights. The premiums for such insurance may be shared with the insured individuals on an agreed basis. The Depositor's parent, MetLife, Inc. has secured a Financial Institution Bond in the amount of $50,000,000, subject to a $5,000,000 deductible. MetLife maintains Directors' and Officers' Liability insurance coverage with limits of $400 million under which the Depositor and Travelers Distribution LLC, the Registrant's underwriter (the "Underwriter"), as well as certain other subsidiaries of MetLife are covered. RULE 484 UNDERTAKING Insofar as indemnification for liability arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. ITEM 29. PRINCIPAL UNDERWRITER (a) Travelers Distribution LLC One Cityplace Hartford, CT 06103 Travelers Distribution LLC also serves as principal underwriter and distributor for the following funds: The Travelers Fund U for Variable Annuities, The Travelers Fund VA for Variable Annuities, The Travelers Fund BD for Variable Annuities, The Travelers Fund BD II for Variable Annuities, The The Travelers Fund BD III for Variable Annuities, Travelers Fund BD IV for Variable Annuities, The Travelers Fund ABD for Variable Annuities, The Travelers Fund ABD II for Variable Annuities, The Travelers Separate Account PF for Variable Annuities, The Travelers Separate Account PF II for Variable Annuities, The Travelers Separate Account QP for Variable Annuities, The Travelers Separate Account TM for Variable Annuities, The Travelers Separate Account TM II for Variable Annuities, The Travelers Separate Account Five for Variable Annuities, The Travelers Separate Account Seven for Variable Annuities, The Travelers Separate Account Eight for Variable Annuities, The Travelers Separate Account Nine for Variable Annuities, The Travelers Separate Account Ten for Variable Annuities, The Travelers Fund UL for Variable Life Insurance, The Travelers Fund UL II for Variable Life Insurance, The Travelers Fund UL III for Variable Life Insurance, The Travelers Variable Life Insurance Separate Account One, The Travelers Variable Life Insurance Separate Account Two, The Travelers Variable Life Insurance Separate Account Three, The Travelers Variable Life Insurance Separate Account Four, The Travelers Separate Account MGA, The Travelers Separate Account MGA II, The Travelers Growth and Income Stock Account for Variable Annuities, The Travelers Quality Bond Account for Variable Annuities, The Travelers Money Market Account for Variable Annuities, The Travelers Timed Growth and Income Stock Account for Variable Annuities, The Travelers Timed Short-Term Bond Account for Variable Annuities and The Travelers Timed Aggressive Stock Account for Variable Annuities, Citicorp Life Variable Annuity Separate Account and First Citicorp Life Variable Annuity Separate Account, TIC Separate Account Eleven for Variable Annuities, TLAC Separate Account Twelve for Variable Annuities, TIC Separate Account Thirteen for Variable Annuities, TLAC Separate Account Fourteen for Variable Annuities, TIC Variable Annuity Separate Account 2002, and TLAC Variable Annuity Separate Account 2002.
(b) NAME AND PRINCIPAL POSITIONS AND OFFICES BUSINESS ADDRESS WITH UNDERWRITER ---------------- ---------------- Leslie Sutherland (a) President Steven J. Brash (a) Vice President Debora L. Buffington (b) Vice President, Director of Compliance Charles M. Deuth (a) Vice President, National Accounts Anthony J. Dufault (b) Vice President James R. Fitzpatrick (b) Vice President Elizabeth M. Forget (c) Vice President and Chief Marketing Officer Helayne F. Klier (c) Vice President Paul M. Kos (b) Vice President Paul A. LaPiana (b) Vice President, Life Insurance Distribution Division Richard C. Pearson (b) Vice President and Secretary John E. Petersen (e) Vice President Robert H. Petersen (e) Vice President and Chief Financial Officer Deron J. Richens (b) Vice President Paul A. Smith (a) Vice President Cathy Sturdivant (b) Vice President Paulina Vakouros (c) Vice President Edward C. Wilson (b) Vice President and Chief Distribution Officer James R. Allen (b) Assistant Vice President
Robert H. Bruce (b) Assistant Vice President Jeffrey A. Tupper (b) Assistant Vice President Anthony J. Williamson (a) Treasurer Jonnie L. Crawford (b) Assistant Secretary Gregory M. Harrison Assistant Treasurer James W. Koeger (d) Assistant Treasurer Michael K. Farrell (f) Manager Craig W. Markham (d) Manager William J. Toppeta (a) Manager (a) MetLife, Inc., One MetLife Plaza, 27-01 Queens Plaza North, Long Island City, New York 11101 (b) 5 Park Plaza, Suite 1900, Irvine, CA 92614 (c) 260 Madison Avenue, New York, NY 10016 (d) 13045 Tesson Ferry Road, St. Louis, MO 63128 (e) 485-E U.S. Highway 1 South, 4th Floor, Iselin, NJ 08830 (f) 10 Park Avenue, Morristown, NJ 07962 (c) Not Applicable ITEM 30. LOCATION OF ACCOUNTS AND RECORDS (1) The Travelers Life and Annuity Company One Cityplace Hartford, Connecticut 06103-3415 ITEM 31. MANAGEMENT SERVICES Not Applicable. ITEM 32. UNDERTAKINGS The undersigned Registrant hereby undertakes: (a) To file a post-effective amendment to this registration statement as frequently as is necessary to ensure that the audited financial statements in the registration statement are never more than sixteen months old for so long as payments under the variable annuity contracts may be accepted; (b) To include either (1) as part of any application to purchase a contract offered by the prospectus, a space that an applicant can check to request a Statement of Additional Information, or (2) a post card or similar written communication affixed to or included in the prospectus that the applicant can remove to send for a Statement of Additional Information; and (c) To deliver any Statement of Additional Information and any financial statements required to be made available under this Form N-4 promptly upon written or oral request. The Company hereby represents: (a). That the aggregate charges under the Contracts of the Registrant described herein are reasonable in relation to the services rendered, the expenses expected to be incurred, and the risks assumed by the Company. SIGNATURES As required by the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant certifies that it meets the requirements of Securities Act Rule 485(b) for effectiveness of this amendment to this registration statement and has caused this amendment to this registration statement to be signed on its behalf, in the City of Hartford, and State of Connecticut, on this 2nd day of December, 2005. THE TRAVELERS SEPARATE ACCOUNT SIX FOR VARIABLE ANNUITIES (Registrant) THE TRAVELERS LIFE AND ANNUITY COMPANY (Depositor) By: /s/ Bennett D. Kleinberg ------------------------------------------------ Bennett D. Kleinberg, Vice President and Actuary As required by the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on the 2nd day of December, 2005. *C. ROBERT HENRIKSON Director, Chairman, President and Chief - -------------------------------------- Executive Officer (C. Robert Henrikson) *STANLEY J. TALBI Senior Vice President and Chief - -------------------------------------- Financial Officer (Stanley J. Talbi) *JOSEPH J. PROCHASKA, JR. Senior Vice President and Chief - -------------------------------------- Accounting Officer (Joseph J. Prochaska, Jr.) *LELAND C, LAUNER, JR. Director - -------------------------------------- (Leland C. Launer, Jr.) *LISA M. WEBER Director - -------------------------------------- (Lisa M. Weber) *By: /s/ Thomas S. Clark --------------------------------- Thomas S. Clark, Attorney-in-fact EXHIBIT INDEX EXHIBIT NO. DESCRIPTION - ----------- ----------- 10. Consent of KPMG LLP, Independent Registered Public Accounting Firm. EX-10 2 c39986_ex-10.txt EXHIBIT 10 CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM -------------------------------------------------------- The Board of Directors The Travelers Life and Annuity Company: We consent to the use of our reports included herein and to the reference to our firm under the heading "Independent Registered Public Accounting Firm". Our reports on The Travelers Life and Annuity Company refer to changes in the Company's methods of accounting and reporting for certain nontraditional long-duration contracts and for separate accounts in 2004 and for goodwill and intangible assets in 2002. /s/ KPMG LLP Hartford, Connecticut December 2, 2005 -----END PRIVACY-ENHANCED MESSAGE-----