-----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, I8eqnR67S8JIwGIcL62Dxwzwa0Vt7md0SolLs2SmB1LtpgT4aEY0TryEWfW6OE0z 1AqX4jxDLhioIdslsrlnIQ== 0000950123-98-001814.txt : 19980223 0000950123-98-001814.hdr.sgml : 19980223 ACCESSION NUMBER: 0000950123-98-001814 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980220 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: TRAVELERS FUND BD II FOR VARIABLE ANNUITIES CENTRAL INDEX KEY: 0000941729 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 060904249 STATE OF INCORPORATION: CT FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-07259 FILM NUMBER: 98546004 BUSINESS ADDRESS: STREET 1: FINANCIAL SERVICES LEGAL DIVISION STREET 2: ONE TOWER SQUARE CITY: HARTFORD STATE: CT ZIP: 06183 BUSINESS PHONE: 2032777379 MAIL ADDRESS: STREET 1: FINANCIAL SERVICES LEGAL DIVISION STREET 2: ONE TOWER SQUARE CITY: HARTFORD STATE: CT ZIP: 06183 N-30D 1 THE TRAVELERS FUND BD II FOR VARIABLE ANNUITIES 1 ANNUAL REPORT DECEMBER 31, 1997 THE TRAVELERS FUND BD II FOR VARIABLE ANNUITIES [TRAVELERS LIFE & ANNUITY LOGO] The Travelers Insurance Company The Travelers Life and Annuity Company One Tower Square Hartford, CT 06183 2 THE TRAVELERS FUND BD II FOR VARIABLE ANNUITIES STATEMENT OF ASSETS AND LIABILITIES DECEMBER 31, 1997
ASSETS: Investments in eligible funds at market value: Travelers Series Fund Inc., 57,523,433 shares (cost $484,268,916) .............. $548,663,720 The Travelers Series Trust, 2,057,916 shares (cost $24,142,052) ............... 25,847,424 Greenwich Street Series Fund, 4,020,841 shares (cost $63,997,071) ............. 70,847,226 Smith Barney Concert Allocation Series Inc., 1,463,310 shares (cost $15,797,172) 16,327,070 Total Investments (cost $588,205,211) ...................................... $661,685,440 Receivables: Dividends ...................................................................... 55,325 Purchase payments and transfers from other Travelers accounts .................. 8,265,175 Other assets ..................................................................... 316 ------------ Total Assets ................................................................. 670,006,256 ------------ LIABILITIES: Payable for contract surrenders and transfers to other Travelers accounts ........ 7,462,710 Accrued liabilities .............................................................. 43,471 ------------ Total Liabilities ............................................................ 7,506,181 ------------ NET ASSETS: ......................................................................... $662,500,075 ============
See Notes to Financial Statements -1- 3 THE TRAVELERS FUND BD II FOR VARIABLE ANNUITIES STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1997
INVESTMENT INCOME: Dividends ........................................... $ 4,719,028 EXPENSES: Insurance charges ................................... $ 4,591,948 Administrative fees ................................. 668,938 ------------- Total expenses .................................... 5,260,886 ------------- Net investment loss ............................. (541,858) ------------- REALIZED GAIN AND CHANGE IN UNREALIZED GAIN ON INVESTMENTS: Realized gain from investment transactions: Proceeds from investments sold .................... 236,812,432 Cost of investments sold .......................... 233,076,182 ------------- Net realized gain ............................... 3,736,250 Change in unrealized gain on investments: Unrealized gain at December 31, 1996 .............. 13,880,806 Unrealized gain at December 31, 1997 .............. 73,480,229 ------------- Net change in unrealized gain for the year ...... 59,599,423 ------------- Net realized gain and change in unrealized gain 63,335,673 ------------- Net increase in net assets resulting from operations $ 62,793,815 =============
See Notes to Financial Statements -2- 4 THE TRAVELERS FUND BD II FOR VARIABLE ANNUITIES STATEMENT OF CHANGES IN NET ASSETS FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
1997 1996 ---- ---- OPERATIONS: Net investment income (loss) .................................... $ (541,858) $ 4,583,320 Net realized gain from investment transactions .................. 3,736,250 598,325 Net change in unrealized gain (loss) on investments ............. 59,599,423 14,005,980 ------------- ------------- Net increase in net assets resulting from operations .......... 62,793,815 19,187,625 ------------- ------------- UNIT TRANSACTIONS: Participant purchase payments (applicable to 212,510,724 and 182,948,181 units, respectively) 305,552,932 226,873,244 Participant transfers from other Travelers accounts (applicable to 304,613,637 and 55,121,934 units, respectively) 370,995,750 65,242,361 Administrative charges (applicable to 49,225 and 15,382 units, respectively) ......... (76,062) (18,946) Contract surrenders (applicable to 7,258,742 and 1,897,753 units, respectively) ... (10,937,049) (2,337,255) Participant transfers to other Travelers accounts (applicable to 285,276,584 and 50,981,143 units, respectively) (331,281,698) (55,932,256) Other payments to participants (applicable to 2,772,990 and 810,905 units, respectively) ..... (3,790,797) (1,058,035) ------------- ------------- Net increase in net assets resulting from unit transactions . 330,463,076 232,769,113 ------------- ------------- Net increase in net assets ................................ 393,256,891 251,956,738 NET ASSETS: Beginning of year ............................................... 269,243,184 17,286,446 ------------- ------------- End of year ..................................................... $ 662,500,075 $ 269,243,184 ============= =============
See Notes to Financial Statements -3- 5 NOTES TO FINANCIAL STATEMENTS 1. SIGNIFICANT ACCOUNTING POLICIES The Travelers Fund BD II for Variable Annuities ("Fund BD II") is a separate account of The Travelers Life and Annuity Company ("Travelers Life"), which is a wholly owned subsidiary of The Travelers Insurance Company ("The Travelers"), an indirect wholly owned subsidiary of Travelers Group Inc., and is available for funding certain variable annuity contracts issued by Travelers Life. Fund BD II is registered under the Investment Company Act of 1940, as amended, as a unit investment trust. Participant purchase payments applied to Fund BD II are invested in one or more eligible funds in accordance with the selection made by the contract owner. As of December 31, 1997, the eligible funds available under Fund BD II are: Alliance Growth Portfolio, Van Kampen American Capital Enterprise Portfolio, TBC Managed Income Portfolio, G.T. Global Strategic Income Portfolio, Smith Barney High Income Portfolio, Smith Barney International Equity Portfolio, Smith Barney Income and Growth Portfolio, Smith Barney Money Market Portfolio, Putnam Diversified Income Portfolio, Smith Barney Pacific Basin Portfolio, MFS Total Return Portfolio, and AIM Capital Appreciation Portfolio of Travelers Series Fund Inc.; MFS Emerging Growth Portfolio of The Travelers Series Trust; Total Return Portfolio of Greenwich Street Series Fund (formerly Smith Barney Series Fund); and Select High Growth Portfolio, Select Growth Portfolio, Select Balanced Portfolio, Select Conservative Portfolio and Select Income Portfolio of Smith Barney Concert Allocation Series Inc. Travelers Series Fund Inc. and Smith Barney Concert Allocation Series Inc. are incorporated under Maryland law. The Travelers Series Trust and Greenwich Street Series Fund are registered as Massachusetts business trusts. All eligible funds are managed by affiliates of The Travelers. Not all funds may be available in all states or to all contract owners. The following is a summary of significant accounting policies consistently followed by Fund BD II in the preparation of its financial statements. SECURITY VALUATION. Investments are valued daily at the net asset values per share of the underlying funds. SECURITY TRANSACTIONS. Security transactions are accounted for on the trade date. Dividend income is recorded on the ex-dividend date. FEDERAL INCOME TAXES. The operations of Fund BD II form a part of the total operations of Travelers Life and are not taxed separately. Travelers Life is taxed as a life insurance company under the Internal Revenue Code of 1986, as amended (the "Code"). Under existing federal income tax law, no taxes are payable on the investment income of Fund BD II. Fund BD II is not taxed as a "regulated investment company" under Subchapter M of the Code. OTHER. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. 2. INVESTMENTS The aggregate costs of purchases and proceeds from sales of investments were $568,123,809 and $236,812,432, respectively, for the year ended December 31, 1997. Realized gains and losses from investment transactions are reported on an identified cost basis. The cost of investments in eligible funds was $588,205,211 at December 31, 1997. Gross unrealized appreciation for all investments at December 31, 1997 was $76,194,239. Gross unrealized depreciation for all investments at December 31, 1997 was $2,714,010. -4- 6 NOTES TO FINANCIAL STATEMENTS - CONTINUED 3. CONTRACT CHARGES Insurance charges are paid for the mortality and expense risks assumed by Travelers Life. For contracts with a standard death benefit provision, these charges are equivalent to 1.02% of the average net assets of Fund BD II on an annual basis. For contracts with an enhanced death benefit provision, these charges are equivalent to 1.30% of the average net assets of Fund BD II on an annual basis. Administrative fees are paid for administrative expenses incurred by Travelers Life. This charge is equivalent to 0.15% of the average net assets of Fund BD II on an annual basis. For contracts in the accumulation phase with a contract value less than $40,000, an annual charge of $30 (prorated for partial periods) is deducted from participant account balances and paid to Travelers Life to cover contract administrative charges. No sales charge is deducted from participant purchase payments when they are received. However, Travelers Life generally assesses a contingent deferred sales charge of up to 6% if a participant's purchase payment is surrendered within six years of its payment date. Contract surrender payments include $217,306 and $26,151 of contingent deferred sales charges for the years ended December 31, 1997 and 1996, respectively. -5- 7 NOTES TO FINANCIAL STATEMENTS - CONTINUED 4. NET CONTRACT OWNERS' EQUITY
DECEMBER 31, 1997 ACCUMULATION UNIT NET UNITS VALUE ASSETS ----- ----- ------ TRAVELERS SERIES FUND INC Alliance Growth Portfolio Standard ..................................... 47,935,239 $ 2.276 $109,109,519 Enhanced ..................................... 8,482,408 2.254 19,117,414 Van Kampen American Capital Enterprise Portfolio Standard ..................................... 24,635,450 2.103 51,814,773 Enhanced ..................................... 4,384,826 2.083 9,131,702 TBC Managed Income Portfolio Standard ..................................... 4,488,528 1.261 5,658,877 Enhanced ..................................... 1,001,269 1.248 1,249,997 G.T. Global Strategic Income Portfolio Standard ..................................... 5,016,054 1.397 7,006,562 Enhanced ..................................... 953,563 1.383 1,318,867 Smith Barney High Income Portfolio Standard ..................................... 21,213,238 1.463 31,027,036 Enhanced ..................................... 2,639,907 1.448 3,823,149 Smith Barney International Equity Portfolio Standard ..................................... 31,311,119 1.240 38,834,723 Enhanced ..................................... 4,871,826 1.228 5,982,887 Smith Barney Income and Growth Portfolio Standard ..................................... 27,117,422 1.913 51,863,526 Enhanced ..................................... 4,645,333 1.894 8,796,921 Smith Barney Money Market Portfolio Standard ..................................... 25,661,233 1.140 29,257,532 Enhanced ..................................... 2,416,650 1.129 2,728,197 Putnam Diversified Income Portfolio Standard ..................................... 19,504,257 1.332 25,984,875 Enhanced ..................................... 3,953,118 1.319 5,214,743 Smith Barney Pacific Basin Portfolio Standard ..................................... 5,124,475 0.700 3,584,968 Enhanced ..................................... 862,053 0.693 597,141 MFS Total Return Portfolio Standard ..................................... 34,927,831 1.648 57,566,200 Enhanced ..................................... 6,138,961 1.632 10,018,397 AIM Capital Appreciation Portfolio Standard ..................................... 48,942,401 1.206 59,021,877 Enhanced ..................................... 8,844,768 1.198 10,599,956 THE TRAVELERS SERIES TRUST MFS Emerging Growth Portfolio Standard ..................................... 17,294,943 1.204 20,826,373 Enhanced ..................................... 4,255,983 1.200 5,108,293 GREENWICH STREET SERIES FUND Total Return Portfolio Standard ..................................... 33,686,043 1.790 60,304,524 Enhanced ..................................... 5,975,192 1.775 10,604,186 SMITH BARNEY CONCERT ALLOCATION SERIES INC Select High Growth Portfolio Standard ..................................... 2,656,918 1.090 2,894,856 Enhanced ..................................... 391,357 1.087 425,434 Select Growth Portfolio Standard ..................................... 3,396,120 1.099 3,733,000 Enhanced ..................................... 1,191,020 1.097 1,306,201 Select Balanced Portfolio Standard ..................................... 4,148,291 1.093 4,534,330 Enhanced ..................................... 1,788,610 1.091 1,950,633 Select Conservative Portfolio Standard ..................................... 863,063 1.108 955,967 Enhanced ..................................... 105,113 1.105 116,177 Select Income Portfolio Standard ..................................... 364,454 1.106 403,062 Enhanced ..................................... 24,647 1.104 27,200 ------------ Net Contract Owners' Equity ....................... $662,500,075 ============
-6- 8 NOTES TO FINANCIAL STATEMENTS - CONTINUED 5. STATEMENT OF INVESTMENTS
INVESTMENT OPTIONS NO. OF MARKET SHARES VALUE ------ ----- TRAVELERS SERIES FUND INC. (82.9%) Alliance Growth Portfolio (Cost $101,511,528) 5,917,034 $128,103,779 Van Kampen American Capital Enterprise Portfolio (Cost $50,600,654) 2,994,601 60,880,239 TBC Managed Income Portfolio (Cost $6,475,449) 588,529 6,909,335 G.T. Global Strategic Income Portfolio (Cost $7,878,432) 650,051 8,294,655 Smith Barney High Income Portfolio (Cost $32,187,580) 2,585,924 34,858,251 Smith Barney International Equity Portfolio (Cost $52,687,729) 3,895,323 50,249,661 Smith Barney Income and Growth Portfolio (Cost $51,231,882) 3,178,223 60,608,709 Smith Barney Money Market Portfolio (Cost $24,531,613) 24,531,613 24,531,613 Putnam Diversified Income Portfolio (Cost $29,505,953) 2,503,168 31,189,474 Smith Barney Pacific Basin Portfolio (Cost $6,246,577) 825,814 5,970,635 MFS Total Return Portfolio (Cost $58,707,937) 4,229,489 67,502,647 AIM Capital Appreciation Portfolio (Cost $62,703,582) 5,623,664 69,564,722 ------------ ------------ Total (Cost $484,268,916) 57,523,433 548,663,720 ------------ ------------ THE TRAVELERS SERIES TRUST (3.9%) MFS Emerging Growth Portfolio Total (Cost $24,142,052) 2,057,916 25,847,424 ------------ ------------ GREENWICH STREET SERIES FUND (10.7%) Total Return Portfolio Total (Cost $63,997,071) 4,020,841 70,847,226 ------------ ------------ SMITH BARNEY CONCERT ALLOCATION SERIES INC. (2.5%) Select High Growth Portfolio (Cost $3,213,308) 301,590 3,320,507 Select Growth Portfolio (Cost $4,899,940) 449,284 5,027,487 Select Balanced Portfolio (Cost $6,235,760) 579,322 6,488,408 Select Conservative Portfolio (Cost $1,024,737) 94,592 1,060,378 Select Income Portfolio (Cost $423,427) 38,522 430,290 ------------ ------------ Total (Cost $15,797,172) 1,463,310 16,327,070 ------------ ------------ TOTAL INVESTMENT OPTIONS (100%) (COST $588,205,211) $661,685,440 ============
-7- 9 NOTES TO FINANCIAL STATEMENTS - CONTINUED 6. SCHEDULE OF FUND BD II OPERATIONS AND CHANGES IN NET ASSETS FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
VAN KAMPEN AMERICAN CAPITAL ALLIANCE GROWTH PORTFOLIO ENTERPRISE PORTFOLIO 1997 1996 1997 1996 ---- ---- ---- ---- INVESTMENT INCOME: Dividends ............................................. $ -- $ 1,749,884 $ -- $ 65,661 ------------- ------------ ------------ ------------ EXPENSES: Insurance charges ..................................... 881,791 239,371 417,556 107,644 Administrative fees ................................... 124,597 33,611 59,444 15,377 ------------- ------------ ------------ ------------ Net investment income (loss) .................... (1,006,388) 1,476,902 (477,000) (57,360) ------------- ------------ ------------ ------------ REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED GAIN (LOSS) ON INVESTMENTS: Realized gain (loss) from investment transactions: Proceeds from investments sold .................... 732,086 115,510 232,006 179,400 Cost of investments sold .......................... 553,312 97,909 161,526 156,110 ------------- ------------ ------------ ------------ Net realized gain (loss) ........................ 178,774 17,601 70,480 23,290 ------------- ------------ ------------ ------------ Change in unrealized gain (loss) on investments: Unrealized gain (loss) beginning of year .......... 4,561,590 (42,615) 1,791,072 (18,558) Unrealized gain (loss) end of year ................ 26,592,251 4,561,590 10,279,585 1,791,072 ------------- ------------ ------------ ------------ Net change in unrealized gain (loss) for the year 22,030,661 4,604,205 8,488,513 1,809,630 ------------- ------------ ------------ ------------ Net increase (decrease) in net assets resulting from operations ....................... 21,203,047 6,098,708 8,081,993 1,775,560 ------------- ------------ ------------ ------------ UNIT TRANSACTIONS: Participant purchase payments ......................... 47,077,956 34,649,407 25,093,955 16,501,913 Participant transfers from other Travelers accounts ... 18,767,525 7,299,315 8,649,103 2,552,870 Administrative charges ................................ (16,453) (3,897) (6,057) (1,313) Contract surrenders ................................... (1,971,086) (387,974) (1,128,220) (141,838) Participant transfers to other Travelers accounts ..... (5,373,999) (1,038,182) (1,045,309) (587,799) Other payments to participants ........................ (755,258) (147,805) (198,607) (87,345) ------------- ------------ ------------ ------------ Net increase in net assets resulting from unit transactions .......................... 57,728,685 40,370,864 31,364,865 18,236,488 ------------- ------------ ------------ ------------ Net increase in net assets ...................... 78,931,732 46,469,572 39,446,858 20,012,048 NET ASSETS: Beginning of year ................................. 49,295,201 2,825,629 21,499,617 1,487,569 ------------- ------------ ------------ ------------ End of year ....................................... $ 128,226,933 $ 49,295,201 $ 60,946,475 $ 21,499,617 ============= ============ ============ ============
TBC MANAGED INCOME PORTFOLIO 1997 1996 ---- ---- INVESTMENT INCOME: Dividends ............................................. $ -- $ 144,329 ----------- ----------- EXPENSES: Insurance charges ..................................... 49,769 20,601 Administrative fees ................................... 7,098 2,972 ----------- ----------- Net investment income (loss) .................... (56,867) 120,756 ----------- ----------- REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED GAIN (LOSS) ON INVESTMENTS: Realized gain (loss) from investment transactions: Proceeds from investments sold .................... 420,772 443,906 Cost of investments sold .......................... 413,801 463,432 ----------- ----------- Net realized gain (loss) ........................ 6,971 (19,526) ----------- ----------- Change in unrealized gain (loss) on investments: Unrealized gain (loss) beginning of year .......... (21,610) (13,530) Unrealized gain (loss) end of year ................ 433,886 (21,610) ----------- ----------- Net change in unrealized gain (loss) for the year 455,496 (8,080) ----------- ----------- Net increase (decrease) in net assets resulting from operations ....................... 405,600 93,150 ----------- ----------- UNIT TRANSACTIONS: Participant purchase payments ......................... 2,833,792 3,072,427 Participant transfers from other Travelers accounts ... 925,966 349,692 Administrative charges ................................ (719) (212) Contract surrenders ................................... (94,062) (12,989) Participant transfers to other Travelers accounts ..... (486,399) (491,338) Other payments to participants ........................ (45,750) -- ----------- ----------- Net increase in net assets resulting from unit transactions .......................... 3,132,828 2,917,580 ----------- ----------- Net increase in net assets ...................... 3,538,428 3,010,730 NET ASSETS: Beginning of year ................................. 3,370,446 359,716 ----------- ----------- End of year ....................................... $ 6,908,874 $ 3,370,446 =========== ===========
-8- 10 NOTES TO FINANCIAL STATEMENTS - CONTINUED
G.T. GLOBAL STRATEGIC SMITH BARNEY SMITH BARNEY INCOME PORTFOLIO HIGH INCOME PORTFOLIO INTERNATIONAL EQUITY PORTFOLIO 1997 1996 1997 1996 1997 1996 ---- ---- ---- ---- ---- ---- $ -- $ 239,292 $ -- $ 625,383 $ -- $ 22,493 - ----------- ----------- ------------ ------------ ------------- ------------ 60,882 14,195 213,529 54,325 306,167 107,608 8,670 1,970 30,465 7,674 54,224 16,122 - ----------- ----------- ------------ ------------ ------------- ------------ (69,552) 223,127 (243,994) 563,384 (360,391) (101,237) - ----------- ----------- ------------ ------------ ------------- ------------ 250,620 12,114 377,090 118,732 74,413,842 4,446,920 218,454 11,608 344,965 118,637 70,693,976 3,960,097 - ----------- ----------- ------------ ------------ ------------- ------------ 32,166 506 32,125 95 3,719,866 486,823 - ----------- ----------- ------------ ------------ ------------- ------------ 33,836 (1,453) 138,086 (21,008) 754,036 20,347 416,223 33,836 2,670,671 138,086 (2,438,068) 754,036 - ----------- ----------- ------------ ------------ ------------- ------------ 382,387 35,289 2,532,585 159,094 (3,192,104) 733,689 - ----------- ----------- ------------ ------------ ------------- ------------ 345,001 258,922 2,320,716 722,573 167,371 1,119,275 - ----------- ----------- ------------ ------------ ------------- ------------ 4,062,420 2,320,799 19,554,203 9,279,640 16,944,027 17,392,360 1,319,922 331,095 3,746,308 1,222,919 104,954,168 10,287,941 (653) (164) (2,715) (580) (6,694) (1,790) (120,207) (13,081) (506,524) (76,933) (641,705) (168,200) (215,137) (6,536) (1,479,106) (462,926) (99,450,511) (6,285,736) (82,404) -- (67,720) (65,308) (182,508) (104,568) - ----------- ----------- ------------ ------------ ------------- ------------ 4,963,941 2,632,113 21,244,446 9,896,812 21,616,777 21,120,007 - ----------- ----------- ------------ ------------ ------------- ------------ 5,308,942 2,891,035 23,565,162 10,619,385 21,784,148 22,239,282 3,016,487 125,452 11,285,023 665,638 23,033,462 794,180 - ----------- ----------- ------------ ------------ ------------- ------------ $ 8,325,429 $ 3,016,487 $ 34,850,185 $ 11,285,023 $ 44,817,610 $ 23,033,462 =========== =========== ============ ============ ============= ============
SMITH BARNEY INCOME AND GROWTH PORTFOLIO 1997 1996 ---- ---- $ -- $ 455,102 - ------------ ------------ 401,449 97,155 56,935 13,920 - ------------ ------------ (458,384) 344,027 - ------------ ------------ 542,887 82,485 399,665 69,287 - ------------ ------------ 143,222 13,198 - ------------ ------------ 1,308,970 1,435 9,376,827 1,308,970 - ------------ ------------ 8,067,857 1,307,535 - ------------ ------------ 7,752,695 1,664,760 - ------------ ------------ 25,405,607 15,205,943 10,329,030 3,567,741 (5,831) (1,280) (1,199,451) (178,977) (2,080,124) (444,378) (172,269) (140,840) - ------------ ------------ 32,276,962 18,008,209 - ------------ ------------ 40,029,657 19,672,969 20,630,790 957,821 - ------------ ------------ $ 60,660,447 $ 20,630,790 ============ ============
-9- 11 NOTES TO FINANCIAL STATEMENTS - CONTINUED 6. SCHEDULE OF FUND BD II OPERATIONS AND CHANGES IN NET ASSETS FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996 (CONTINUED)
SMITH BARNEY PUTNAM MONEY MARKET PORTFOLIO DIVERSIFIED INCOME PORTFOLIO 1997 1996 1997 1996 ---- ---- ---- ---- INVESTMENT INCOME: Dividends ............................................. $ 1,460,052 $ 734,489 $ -- $ 775,071 ------------- ------------ ------------ ------------ EXPENSES: Insurance charges ..................................... 309,270 161,431 227,383 77,461 Administrative fees ................................... 44,027 22,917 32,184 11,041 ------------- ------------ ------------ ------------ Net investment income (loss) .................... 1,106,755 550,141 (259,567) 686,569 ------------- ------------ ------------ ------------ REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED GAIN (LOSS) ON INVESTMENTS: Realized gain (loss) from investment transactions: Proceeds from investments sold .................... 129,557,007 22,760,375 454,711 361,079 Cost of investments sold .......................... 129,557,007 22,760,375 450,698 356,390 ------------- ------------ ------------ ------------ Net realized gain (loss) ........................ -- -- 4,013 4,689 ------------- ------------ ------------ ------------ Change in unrealized gain (loss) on investments: Unrealized gain (loss) beginning of year .......... -- -- 11,889 (29,630) Unrealized gain (loss) end of year ................ -- -- 1,683,521 11,889 ------------- ------------ ------------ ------------ Net change in unrealized gain (loss) for the year -- -- 1,671,632 41,519 ------------- ------------ ------------ ------------ Net increase (decrease) in net assets resulting from operations ....................... 1,106,755 550,141 1,416,078 732,777 ------------- ------------ ------------ ------------ UNIT TRANSACTIONS: Participant purchase payments ......................... 37,218,989 44,038,947 13,450,688 12,719,514 Participant transfers from other Travelers accounts ... 144,063,574 16,886,657 3,933,503 1,427,681 Administrative charges ................................ (2,414) (945) (3,655) (1,014) Contract surrenders ................................... (918,683) (461,230) (514,487) (283,811) Participant transfers to other Travelers accounts ..... (176,681,199) (36,332,462) (1,811,753) (827,078) Other payments to participants ........................ (580,295) (277,845) (134,175) (15,839) ------------- ------------ ------------ ------------ Net increase in net assets resulting from unit transactions ........................... 3,099,972 23,853,122 14,920,121 13,019,453 ------------- ------------ ------------ ------------ Net increase in net assets ...................... 4,206,727 24,403,263 16,336,199 13,752,230 NET ASSETS: Beginning of year ................................. 27,779,002 3,375,739 14,863,419 1,111,189 ------------- ------------ ------------ ------------ End of year ....................................... $ 31,985,729 $ 27,779,002 $ 31,199,618 $ 14,863,419 ============= ============ ============ ============
SMITH BARNEY PACIFIC BASIN PORTFOLIO 1997 1996 ---- ---- INVESTMENT INCOME: Dividends ............................................. $ -- $ 19,513 ------------ ----------- EXPENSES: Insurance charges ..................................... 158 17,947 Administrative fees ................................... 6,618 2,375 ------------ ----------- Net investment income (loss) .................... (6,776) (809) ------------ ----------- REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED GAIN (LOSS) ON INVESTMENTS: Realized gain (loss) from investment transactions: Proceeds from investments sold .................... 26,053,417 7,758,018 Cost of investments sold .......................... 27,025,264 7,712,954 ------------ ----------- Net realized gain (loss) ........................ (971,847) 45,064 ------------ ----------- Change in unrealized gain (loss) on investments: Unrealized gain (loss) beginning of year .......... 53,691 1,836 Unrealized gain (loss) end of year ................ (275,942) 53,691 ------------ ----------- Net change in unrealized gain (loss) for the year (329,633) 51,855 ------------ ----------- Net increase (decrease) in net assets resulting from operations ....................... (1,308,256) 96,110 ------------ ----------- UNIT TRANSACTIONS: Participant purchase payments ......................... 2,205,368 2,993,075 Participant transfers from other Travelers accounts ... 33,843,799 8,020,835 Administrative charges ................................ (954) (370) Contract surrenders ................................... (79,311) (11,727) Participant transfers to other Travelers accounts ..... (33,605,393) (7,984,301) Other payments to participants ........................ (38,406) -- ------------ ----------- Net increase in net assets resulting from unit transactions .......................... 2,325,103 3,017,512 ------------ ----------- Net increase in net assets ...................... 1,016,847 3,113,622 NET ASSETS: Beginning of year ................................. 3,165,262 51,640 ------------ ----------- End of year ....................................... $ 4,182,109 $ 3,165,262 ============ ===========
-10- 12 NOTES TO FINANCIAL STATEMENTS - CONTINUED
AIM CAPITAL MFS EMERGING MFS TOTAL RETURN PORTFOLIO APPRECIATION PORTFOLIO GROWTH PORTFOLIO TOTAL RETURN PORTFOLIO 1997 1996 1997 1996 1997 1996 1997 1996 ---- ---- ---- ---- ---- ---- ---- ---- $ -- $ 832,634 $ -- $ 35,100 $ 439,667 $ 13,776 $ 2,819,309 $ 394,497 - ------------ ------------ ------------ ------------ ------------ ----------- ------------ ------------ 449,112 121,785 565,729 197,164 141,590 2,585 503,712 114,672 63,766 17,434 80,459 27,944 20,232 351 71,448 16,252 - ------------ ------------ ------------ ------------ ------------ ----------- ------------ ------------ (512,878) 693,415 (646,188) (190,008) 277,845 10,840 2,244,149 263,573 - ------------ ------------ ------------ ------------ ------------ ----------- ------------ ------------ 1,195,009 122,229 796,430 189,761 684,958 -- 501,439 107,077 991,043 113,231 669,177 187,142 633,928 -- 396,281 92,109 - ------------ ------------ ------------ ------------ ------------ ----------- ------------ ------------ 203,966 8,998 127,253 2,619 51,030 -- 105,158 14,968 - ------------ ------------ ------------ ------------ ------------ ----------- ------------ ------------ 1,072,467 140 1,950,900 (25,475) (93,591) -- 2,319,470 3,337 8,794,710 1,072,467 6,861,140 1,950,900 1,705,372 (93,591) 6,850,155 2,319,470 - ------------ ------------ ------------ ------------ ------------ ----------- ------------ ------------ 7,722,243 1,072,327 4,910,240 1,976,375 1,798,963 (93,591) 4,530,685 2,316,133 - ------------ ------------ ------------ ------------ ------------ ----------- ------------ ------------ 7,413,331 1,774,740 4,391,305 1,788,986 2,127,838 (82,751) 6,879,992 2,594,674 - ------------ ------------ ------------ ------------ ------------ ----------- ------------ ------------ 29,292,210 19,949,329 24,085,122 27,035,886 16,234,637 2,458,877 29,547,521 19,255,127 9,887,470 3,146,849 9,106,236 5,567,585 6,184,899 622,001 11,320,000 3,959,180 (6,249) (1,570) (13,062) (4,115) (1,929) -- (8,180) (1,696) (1,064,999) (144,598) (1,468,796) (343,921) (167,796) (647) (1,002,438) (111,329) (3,008,984) (517,750) (2,435,679) (636,435) (1,315,407) (10,312) (1,698,306) (307,023) (312,103) (55,560) (696,990) (53,445) (114,744) -- (409,568) (109,480) - ------------ ------------ ------------ ------------ ------------ ----------- ------------ ------------ 34,787,345 22,376,700 28,576,831 31,565,555 20,819,660 3,069,919 37,749,029 22,684,779 - ------------ ------------ ------------ ------------ ------------ ----------- ------------ ------------ 42,200,676 24,151,440 32,968,136 33,354,541 22,947,498 2,987,168 44,629,021 25,279,453 25,383,921 1,232,481 36,653,697 3,299,156 2,987,168 -- 26,279,689 1,000,236 - ------------ ------------ ------------ ------------ ------------ ----------- ------------ ------------ $ 67,584,597 $ 25,383,921 $ 69,621,833 $ 36,653,697 $ 25,934,666 $ 2,987,168 $ 70,908,710 $ 26,279,689 ============ ============ ============ ============ ============ =========== ============ ============
-11- 13 NOTES TO FINANCIAL STATEMENTS - CONTINUED 6. SCHEDULE OF FUND BD II OPERATIONS AND CHANGES IN NET ASSETS FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996 (CONTINUED)
SELECT HIGH GROWTH PORTFOLIO SELECT GROWTH PORTFOLIO 1997 1996 1997 1996 ---- ---- ---- ---- INVESTMENT INCOME: Dividends ............................................. $ -- $- $ -- $- ----------- -- ----------- -- EXPENSES: Insurance charges ..................................... 15,141 - 17,499 - Administrative fees ................................... 2,177 - 2,398 - ----------- -- ----------- -- Net investment income (loss) .................... (17,318) - (19,897) - ----------- -- ----------- -- REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED GAIN (LOSS) ON INVESTMENTS: Realized gain (loss) from investment transactions: Proceeds from investments sold .................... 11,871 - 119,596 - Cost of investments sold .......................... 10,454 - 105,666 - ----------- -- ----------- -- Net realized gain (loss) ........................ 1,417 - 13,930 - ----------- -- ----------- -- Change in unrealized gain (loss) on investments: Unrealized gain (loss) beginning of year .......... -- - -- - Unrealized gain (loss) end of year ................ 107,199 - 127,547 - ----------- -- ----------- -- Net change in unrealized gain (loss) for the year 107,199 - 127,547 - ----------- -- ----------- -- Net increase (decrease) in net assets resulting from operations ....................... 91,298 - 121,580 - ----------- -- ----------- -- UNIT TRANSACTIONS: Participant purchase payments ......................... 1,961,168 - 4,140,789 - Participant transfers from other Travelers accounts ... 1,271,640 - 937,045 - Administrative charges ................................ (82) - (227) - Contract surrenders ................................... (3,734) - (10,285) - Participant transfers to other Travelers accounts ..... -- - (149,701) - Other payments to participants ........................ -- - -- - ----------- -- ----------- -- Net increase in net assets resulting from unit transactions .......................... 3,228,992 - 4,917,621 - ----------- -- ----------- -- Net increase in net assets ...................... 3,320,290 - 5,039,201 - NET ASSETS: Beginning of year ................................. -- - -- - ----------- -- ----------- -- End of year ....................................... $ 3,320,290 $- $ 5,039,201 $- =========== == =========== ==
SELECT BALANCED PORTFOLIO 1997 1996 ---- ---- INVESTMENT INCOME: Dividends ............................................. $ -- $-- ----------- --- EXPENSES: Insurance charges ..................................... 26,874 -- Administrative fees ................................... 3,580 -- ----------- --- Net investment income (loss) .................... (30,454) -- ----------- --- REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED GAIN (LOSS) ON INVESTMENTS: Realized gain (loss) from investment transactions: Proceeds from investments sold .................... 288,850 -- Cost of investments sold .......................... 277,252 -- ----------- --- Net realized gain (loss) ........................ 11,598 -- ----------- --- Change in unrealized gain (loss) on investments: Unrealized gain (loss) beginning of year .......... -- -- Unrealized gain (loss) end of year ................ 252,648 -- ----------- --- Net change in unrealized gain (loss) for the year 252,648 -- ----------- --- Net increase (decrease) in net assets resulting from operations ....................... 233,792 -- ----------- --- UNIT TRANSACTIONS: Participant purchase payments ......................... 5,194,754 -- Participant transfers from other Travelers accounts ... 1,371,868 -- Administrative charges ................................ (156) -- Contract surrenders ................................... (20,071) -- Participant transfers to other Travelers accounts ..... (295,224) -- Other payments to participants ........................ -- -- ----------- --- Net increase in net assets resulting from unit transactions .......................... 6,251,171 -- ----------- --- Net increase in net assets ...................... 6,484,963 -- NET ASSETS: Beginning of year ................................. -- -- ----------- --- End of year ....................................... $ 6,484,963 $-- =========== ===
-12- 14 NOTES TO FINANCIAL STATEMENTS - CONTINUED
SELECT CONSERVATIVE PORTFOLIO SELECT INCOME PORTFOLIO COMBINED 1997 1996 1997 1996 1997 1996 ---- ---- ---- ---- ---- ---- $ - $ - $ - $ - $ 4,719,028 $ 6,107,224 ------------ ----- --------- ----- -------------- ------------- 3,516 - 821 - 4,591,948 1,333,944 499 - 117 - 668,938 189,960 ------------ ----- --------- ----- -------------- ------------- (4,015) - (938) - (541,858) 4,583,320 ------------ ----- --------- ----- -------------- ------------- 136,242 - 43,599 - 236,812,432 36,697,606 131,428 - 42,285 - 233,076,182 36,099,281 ------------ ----- --------- ----- -------------- ------------- 4,814 - 1,314 - 3,736,250 598,325 ------------ ----- --------- ----- -------------- ------------- - - - - 13,880,806 (125,174) 35,641 - 6,863 - 73,480,229 13,880,806 ------------ ----- --------- ----- -------------- ------------- 35,641 - 6,863 - 59,599,423 14,005,980 ------------ ----- --------- ----- -------------- ------------- 36,440 - 7,239 - 62,793,815 19,187,625 ------------ ----- --------- ----- -------------- ------------- 881,469 - 368,257 - 305,552,932 226,873,244 299,232 - 84,462 - 370,995,750 65,242,361 (25) - (7) - (76,062) (18,946) (13,817) - (11,377) - (10,937,049) (2,337,255) (131,155) - (18,312) - (331,281,698) (55,932,256) - - - - (3,790,797) (1,058,035) ------------ ----- --------- ----- -------------- ------------- 1,035,704 - 423,023 - 330,463,076 232,769,113 ------------ ----- --------- ----- -------------- ------------- 1,072,144 - 430,262 - 393,256,891 251,956,738 - - - - 269,243,184 17,286,446 ------------ ----- --------- ----- -------------- ------------- $ 1,072,144 $ - $430,262 $ - $ 662,500,075 $269,243,184 ============ ===== ========= ===== ============== =============
-13- 15 NOTES TO FINANCIAL STATEMENTS - CONTINUED 7. SCHEDULE OF ACCUMULATION UNITS FOR FUND BD II FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
VAN KAMPEN AMERICAN CAPITAL TBC MANAGED ALLIANCE GROWTH PORTFOLIO ENTERPRISE PORTFOLIO INCOME PORTFOLIO 1997 1996 1997 1996 1997 1996 ---- ---- ---- ---- ---- ---- Accumulation units beginning of year 27,644,095 2,026,405 13,004,616 1,093,664 2,901,133 315,445 Accumulation units purchased and transferred from other Travelers accounts ........................ 32,819,155 26,601,698 17,226,005 12,436,976 3,113,712 3,034,567 Accumulation units redeemed and transferred to other Travelers accounts ........................ (4,045,603) (984,008) (1,210,345) (526,024) (525,048) (448,879) ----------- ----------- ----------- ----------- ---------- ---------- Accumulation units end of year ..... 56,417,647 27,644,095 29,020,276 13,004,616 5,489,797 2,901,133 =========== =========== =========== =========== ========== ==========
G.T. GLOBAL STRATEGIC SMITH BARNEY SMITH BARNEY INTERNATIONAL INCOME PORTFOLIO HIGH INCOME PORTFOLIO EQUITY PORTFOLIO 1997 1996 1997 1996 1997 1996 ---- ---- ---- ---- ---- ---- Accumulation units beginning of year 2,295,810 112,291 8,689,256 574,114 18,864,868 757,069 Accumulation units purchased and transferred from other Travelers accounts ........................ 3,980,326 2,200,023 16,642,827 8,612,189 94,826,692 23,544,001 Accumulation units redeemed and transferred to other Travelers accounts ........................ (306,519) (16,504) (1,478,938) (497,047) (77,508,615) (5,436,202) ---------- ---------- ----------- ---------- ----------- ----------- Accumulation units end of year ..... 5,969,617 2,295,810 23,853,145 8,689,256 36,182,945 18,864,868 ========== ========== =========== ========== =========== ===========
SMITH BARNEY INCOME SMITH BARNEY PUTNAM DIVERSIFIED AND GROWTH PORTFOLIO MONEY MARKET PORTFOLIO INCOME PORTFOLIO 1997 1996 1997 1996 1997 1996 ---- ---- ---- ---- ---- ---- Accumulation units beginning of year 13,512,027 742,670 25,323,950 3,193,779 11,885,359 950,243 Accumulation units purchased and transferred from other Travelers accounts ........................ 20,180,381 13,297,626 161,814,352 56,287,533 13,499,883 11,872,273 Accumulation units redeemed and transferred to other Travelers accounts ........................ (1,929,653) (528,269) (159,060,419) (34,157,362) (1,927,867) (937,157) ----------- ----------- ------------ ----------- ----------- ----------- Accumulation units end of year ..... 31,762,755 13,512,027 28,077,883 25,323,950 23,457,375 11,885,359 =========== =========== ============ =========== =========== ===========
SMITH BARNEY MFS AIM CAPITAL PACIFIC BASIN PORTFOLIO TOTAL RETURN PORTFOLIO APPRECIATION PORTFOLIO 1997 1996 1997 1996 1997 1996 ---- ---- ---- ---- ---- ---- Accumulation units beginning of year 3,221,715 56,822 18,460,646 1,014,097 33,706,796 3,444,998 Accumulation units purchased and transferred from other Travelers accounts ........................ 39,296,051 11,406,814 25,519,291 17,996,071 28,053,552 31,258,008 Accumulation units redeemed and transferred to other Travelers accounts ........................ (36,531,238) (8,241,921) (2,913,145) (549,522) (3,973,179) (996,210) ----------- ----------- ----------- ----------- ----------- ----------- Accumulation units end of year ..... 5,986,528 3,221,715 41,066,792 18,460,646 57,787,169 33,706,796 =========== =========== =========== =========== =========== ===========
-14- 16 NOTES TO FINANCIAL STATEMENTS - CONTINUED 7. SCHEDULE OF ACCUMULATION UNITS FOR FUND BD II FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996 (CONTINUED)
MFS EMERGING TOTAL RETURN SELECT HIGH GROWTH PORTFOLIO PORTFOLIO GROWTH PORTFOLIO 1997 1996 1997 1996 1997 1996 ---- ---- ---- ---- ---- ---- Accumulation units beginning of year ....... 2,971,654 -- 16,964,938 800,334 -- -- Accumulation units purchased and transferred from other Travelers accounts 20,021,481 2,982,336 24,576,075 16,540,000 3,051,712 -- Accumulation units redeemed and transferred to other Travelers accounts . (1,442,209) (10,682) (1,879,778) (375,396) (3,437) -- ----------- ---------- ----------- ----------- ---------- - Accumulation units end of year ............. 21,550,926 2,971,654 39,661,235 16,964,938 3,048,275 -- =========== ========== =========== =========== ========== ==
SELECT GROWTH SELECT BALANCED SELECT CONSERVATIVE PORTFOLIO PORTFOLIO PORTFOLIO 1997 1996 1997 1996 1997 1996 ---- ---- ---- ---- ---- ---- Accumulation units beginning of year ....... -- - -- - -- -- Accumulation units purchased and transferred from other Travelers accounts 4,733,409 - 6,244,028 - 1,108,928 -- Accumulation units redeemed and transferred to other Travelers accounts . (146,269) - (307,127) - (140,752) -- ---------- - ---------- - ---------- - Accumulation units end of year ............. 4,587,140 - 5,936,901 - 968,176 -- ========== = ========== = ========== =
SELECT INCOME PORTFOLIO COMBINED 1997 1996 1997 1996 ---- ---- ---- ---- Accumulation units beginning of year ....... -- - 199,446,863 15,081,931 Accumulation units purchased and transferred from other Travelers accounts 416,501 - 517,124,361 238,070,115 Accumulation units redeemed and transferred to other Travelers accounts . (27,400) - (295,357,541) (53,705,183) -------- ------------ ------------ Accumulation units end of year ............. 389,101 - 421,213,683 199,446,863 ======== = ============ ============
-15- 17 REPORT OF INDEPENDENT ACCOUNTANTS To the Owners of Variable Annuity Contracts of The Travelers Fund BD II for Variable Annuities: We have audited the accompanying statement of assets and liabilities of The Travelers Fund BD II for Variable Annuities as of December 31, 1997, and the related statement of operations for the year then ended and the statement of changes in net assets for each of the two years in the period then ended. These financial statements are the responsibility of management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of shares owned as of December 31, 1997, 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 referred to above present fairly, in all material respects, the financial position of The Travelers Fund BD II for Variable Annuities as of December 31, 1997, the results of its operations for the year then ended and the changes in its net assets for each of the two years in the period then ended, in conformity with generally accepted accounting principles. COOPERS & LYBRAND L.L.P. Hartford, Connecticut February 19, 1998 -16- 18 Independent Accountants COOPERS & LYBRAND L.L.P. Hartford, Connecticut This report is prepared for the general information of contract owners and is not an offer of shares of The Travelers Fund BD II for Variable Annuities or Fund BD II's underlying funds. It should not be used in connection with any offer except in conjunction with the Prospectuses for the Variable Annuity products offered by The Travelers Life and Annuity Company and the Prospectuses of the underlying funds, which collectively contain all pertinent information, including the applicable sales commissions. FNDBDII (Annual) (12-97) Printed in U.S.A. -----END PRIVACY-ENHANCED MESSAGE-----