-----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, QIxzelGGHa65GuaWFmVCdKu3SXWRKTFKAF3/D8hYyPRaNaJmFP50hU+OprlaYuE2 BnFsYzbg6afRcIVMedy4ug== 0000950123-99-001558.txt : 19990226 0000950123-99-001558.hdr.sgml : 19990226 ACCESSION NUMBER: 0000950123-99-001558 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19990225 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TRAVELERS 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: 99549145 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 BDII FOR VARIABLE ANNUITIES 1 ANNUAL REPORT DECEMBER 31, 1998 THE TRAVELERS FUND BD II FOR VARIABLE ANNUITIES [TRAVELERS 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, 1998 ASSETS: Investments in eligible funds at market value: Dreyfus Variable Investment Fund, 31,072 shares (cost $1,606,531) ................. $ 1,675,105 Greenwich Street Series Fund, 5,519,769 shares (cost $92,000,041) ................. 96,871,945 Salomon Brothers Variable Series Funds Inc., 195,839 shares (cost $1,986,865) ..... 2,105,158 Smith Barney Concert Allocation Series Inc., 2,419,958 shares (cost $27,210,048) .. 29,482,462 The Travelers Series Trust, 4,408,720 shares (cost $54,515,873) ................... 68,487,889 Travelers Series Fund Inc., 106,554,765 shares (cost $801,769,855) ................ 937,186,040 -------------- Total Investments (cost $979,089,213) ........................................... $1,135,808,599 Receivables: Dividends ......................................................................... 180,955 Purchase payments and transfers from other Travelers accounts ..................... 1,693,374 Other assets ........................................................................ 748 -------------- Total Assets .................................................................... 1,137,683,676 -------------- LIABILITIES: Payables: Contract surrenders and transfers to other Travelers accounts ..................... 1,130,256 Insurance charges ................................................................. 260,708 Administrative fees ............................................................... 36,686 -------------- Total Liabilities ............................................................... 1,427,650 -------------- NET ASSETS: ........................................................................... $1,136,256,026 ==============
See Notes to Financial Statements -1- 3 THE TRAVELERS FUND BD II FOR VARIABLE ANNUITIES STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1998 INVESTMENT INCOME: Dividends ................................................................. $ 37,385,822 EXPENSES: Insurance charges ......................................................... $ 9,566,234 Administrative fees ....................................................... 1,346,728 ------------ Total expenses .......................................................... 10,912,962 ------------ Net investment income ................................................. 26,472,860 ------------ REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED GAIN (LOSS) ON INVESTMENTS: Realized gain (loss) from investment transactions: Proceeds from investments sold .......................................... 638,666,522 Cost of investments sold ................................................ 632,379,285 ------------ Net realized gain (loss) .............................................. 6,287,237 Change in unrealized gain (loss) on investments: Unrealized gain at December 31, 1997 .................................... 73,480,229 Unrealized gain at December 31, 1998 .................................... 156,719,386 ------------ Net change in unrealized gain (loss) for the year ..................... 83,239,157 ------------ Net realized gain (loss) and change in unrealized gain (loss) ....... 89,526,394 ------------ Net increase in net assets resulting from operations ...................... $115,999,254 ============
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, 1998 AND 1997
1998 1997 ---- ---- OPERATIONS: Net investment income (loss) ........................................ $ 26,472,860 $ (541,858) Net realized gain (loss) from investment transactions ............... 6,287,237 3,736,250 Net change in unrealized gain (loss) on investments ................. 83,239,157 59,599,423 --------------- --------------- Net increase in net assets resulting from operations .............. 115,999,254 62,793,815 --------------- --------------- UNIT TRANSACTIONS: Participant purchase payments (applicable to 176,982,164 and 212,510,724 units, respectively) ... 281,104,022 305,552,932 Participant transfers from other Travelers accounts (applicable to 687,354,867 and 304,613,637 units, respectively) ... 867,501,168 370,995,750 Administrative and asset allocation charges (applicable to 112,857 and 49,225 units, respectively) ............ (175,802) (76,062) Contract surrenders (applicable to 17,990,366 and 7,258,742 units, respectively) ...... (29,495,629) (10,937,049) Participant transfers to other Travelers accounts (applicable to 613,483,189 and 285,276,584 units, respectively) ... (749,605,940) (331,281,698) Other payments to participants (applicable to 6,957,789 and 2,772,990 units, respectively) ....... (11,571,122) (3,790,797) --------------- --------------- Net increase in net assets resulting from unit transactions ......... 357,756,697 330,463,076 --------------- --------------- Net increase in net assets ........................................ 473,755,951 393,256,891 NET ASSETS: Beginning of year ................................................... 662,500,075 269,243,184 --------------- --------------- End of year ......................................................... $ 1,136,256,026 $ 662,500,075 =============== ===============
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 Citigroup Inc. (formerly 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, 1998, the eligible funds available under Fund BD II were: Alliance Growth Portfolio, Van Kampen Enterprise Portfolio (formerly 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 Large Cap Value Portfolio (formerly Smith Barney Income and Growth Portfolio), Smith Barney Money Market Portfolio, Putnam Diversified Income Portfolio, Smith Barney Pacific Basin Portfolio, MFS Total Return Portfolio, AIM Capital Appreciation Portfolio and Smith Barney Large Capitalization Growth Portfolio of Travelers Series Fund Inc.; MFS Emerging Growth Portfolio, Disciplined Mid Cap Stock Portfolio, Convertible Bond Portfolio, Disciplined Small Cap Stock Portfolio, MFS Research Portfolio and Strategic Stock Portfolio of The Travelers Series Trust; Total Return Portfolio of Greenwich Street Series Fund; Select High Growth Portfolio, Select Growth Portfolio, Select Balanced Portfolio, Select Conservative Portfolio and Select Income Portfolio of Smith Barney Concert Allocation Series Inc.; Small Cap Portfolio of Dreyfus Variable Investment Fund and Salomon Brothers Variable Investors Fund and Salomon Brothers Variable Total Return Fund of Salomon Brothers Variable Series Funds Inc. Travelers Series Fund Inc., Smith Barney Concert Allocation Series Inc. and Salomon Brothers Variable Series Funds Inc. are incorporated under Maryland law. The Travelers Series Trust, Greenwich Street Series Fund and Dreyfus Variable Investment Fund are registered as Massachusetts business trusts. All eligible trusts except Dreyfus Variable Investment Fund 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. -4- 6 NOTES TO FINANCIAL STATEMENTS - CONTINUED 2. INVESTMENTS The aggregate costs of purchases and proceeds from sales of investments were $1,023,263,288 and $638,666,522, respectively, for the year ended December 31, 1998. Realized gains and losses from investment transactions are reported on an identified cost basis. The cost of investments in eligible funds was $979,089,213 at December 31, 1998. Gross unrealized appreciation for all investments at December 31, 1998 was $158,561,936. Gross unrealized depreciation for all investments at December 31, 1998 was $1,842,550. 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 $686,636 and $217,306 of contingent deferred sales charges for the years ended December 31, 1998 and 1997, respectively. -5- 7 NOTES TO FINANCIAL STATEMENTS - CONTINUED 4. NET CONTRACT OWNERS' EQUITY
DECEMBER 31, 1998 --------------------------------------------------- ACCUMULATION ANNUITY UNIT NET UNITS UNITS VALUE ASSETS ----- ----- ----- ------ Dreyfus Variable Investment Fund Small Cap Portfolio Standard Death Benefit ...................... 1,712,698 -- $0.852 $ 1,459,896 Enhanced Death Benefit ...................... 252,461 -- 0.851 214,802 Greenwich Street Series Fund Total Return Portfolio Standard Death Benefit ...................... 42,829,917 -- 1.857 79,541,868 Enhanced Death Benefit ...................... 9,424,781 13,859 1.836 17,328,793 Salomon Brothers Variable Series Funds Inc. Salomon Brothers Variable Total Return Fund Standard Death Benefit ...................... 761,112 -- 0.997 759,197 Enhanced Death Benefit ...................... 127,726 -- 0.996 127,171 Salomon Brothers Variable Investors Fund Standard Death Benefit ...................... 1,024,070 -- 1.014 1,038,393 Enhanced Death Benefit ...................... 199,078 -- 1.012 201,487 Smith Barney Concert Allocation Series Inc. Select Balanced Portfolio Standard Death Benefit ...................... 7,215,935 -- 1.183 8,537,652 Enhanced Death Benefit ...................... 2,594,418 -- 1.177 3,054,098 Select Conservative Portfolio Standard Death Benefit ...................... 1,423,960 -- 1.162 1,654,902 Enhanced Death Benefit ...................... 304,706 -- 1.156 352,372 Select Growth Portfolio Standard Death Benefit ...................... 5,355,940 -- 1.238 6,630,284 Enhanced Death Benefit ...................... 2,329,431 -- 1.232 2,869,093 Select High Growth Portfolio Standard Death Benefit ...................... 3,434,814 -- 1.242 4,267,377 Enhanced Death Benefit ...................... 622,357 -- 1.236 769,301 Select Income Portfolio Standard Death Benefit ...................... 1,101,830 -- 1.154 1,271,512 Enhanced Death Benefit ...................... 75,509 -- 1.148 86,707
-6- 8 NOTES TO FINANCIAL STATEMENTS - CONTINUED 4. NET CONTRACT OWNERS' EQUITY (CONTINUED)
DECEMBER 31, 1998 --------------------------------------------------- ACCUMULATION ANNUITY UNIT NET UNITS UNITS VALUE ASSETS ----- ----- ----- ------ The Travelers Series Trust MFS Emerging Growth Portfolio Standard Death Benefit ............... 29,936,769 -- $1.599 $ 47,857,898 Enhanced Death Benefit ............... 7,521,739 -- 1.589 11,951,770 MFS Research Portfolio Standard Death Benefit ............... 3,295,301 -- 1.037 3,415,956 Enhanced Death Benefit ............... 1,243,396 -- 1.035 1,286,538 Strategic Stock Portfolio Standard Death Benefit ............... 3,336,318 -- 0.936 3,121,396 Enhanced Death Benefit ............... 43,842 -- 0.934 40,943 Convertible Bond Portfolio Standard Death Benefit ............... 418,194 -- 1.001 418,689 Enhanced Death Benefit ............... 22,352 -- 0.999 22,337 Disciplined Mid Cap Stock Portfolio Standard Death Benefit ............... 550,487 -- 1.064 585,915 Enhanced Death Benefit ............... 28,077 -- 1.063 29,832 Disciplined Small Cap Stock Portfolio Standard Death Benefit ............... 364,850 -- 0.896 326,762 Enhanced Death Benefit ............... 17,249 -- 0.894 15,420 Travelers Series Fund Inc AIM Capital Appreciation Portfolio Standard Death Benefit ............... 59,823,732 -- 1.397 83,581,861 Enhanced Death Benefit ............... 11,522,469 -- 1.385 15,953,672 Alliance Growth Portfolio Standard Death Benefit ............... 67,639,943 -- 2.903 196,377,735 Enhanced Death Benefit ............... 13,083,045 -- 2.867 37,504,610 GT Global Strategic Income Portfolio Standard Death Benefit ............... 5,481,141 -- 1.359 7,450,260 Enhanced Death Benefit ............... 973,254 -- 1.342 1,306,231 MFS Total Return Portfolio Standard Death Benefit ............... 58,653,278 -- 1.819 106,691,511 Enhanced Death Benefit ............... 11,645,845 13,732 1.796 20,941,841 Putnam Diversified Income Portfolio Standard Death Benefit ............... 29,566,111 -- 1.326 39,192,328 Enhanced Death Benefit ............... 7,312,474 17,799 1.309 9,594,234
-7- 9 NOTES TO FINANCIAL STATEMENTS - CONTINUED 4. NET CONTRACT OWNERS' EQUITY (CONTINUED)
DECEMBER 31, 1998 --------------------------------------------------------- ACCUMULATION ANNUITY UNIT NET UNITS UNITS VALUE ASSETS ----- ----- ----- ------ Travelers Series Fund Inc. (continued) Smith Barney International Equity Portfolio Standard Death Benefit ............................. 38,529,419 -- $1.305 $ 50,298,227 Enhanced Death Benefit ............................. 6,198,702 19,578 1.289 8,015,194 Smith Barney Money Market Portfolio Standard Death Benefit ............................. 41,370,187 -- 1.184 48,973,184 Enhanced Death Benefit ............................. 6,023,674 -- 1.169 7,040,715 Smith Barney High Income Portfolio Standard Death Benefit ............................. 31,054,135 -- 1.452 45,090,287 Enhanced Death Benefit ............................. 4,739,592 16,392 1.434 6,818,510 Smith Barney Large Capitalization Growth Portfolio Standard Death Benefit ............................. 12,176,408 -- 1.237 15,057,822 Enhanced Death Benefit ............................. 1,447,309 -- 1.234 1,786,517 Smith Barney Large Cap Value Portfolio Standard Death Benefit ............................. 40,967,323 -- 2.076 85,047,609 Enhanced Death Benefit ............................. 8,248,925 12,608 2.050 16,934,479 Smith Barney Pacific Basin Portfolio Standard Death Benefit ............................. 5,082,810 -- 0.742 3,771,642 Enhanced Death Benefit ............................. 1,022,864 -- 0.733 749,430 TBC Managed Income Portfolio Standard Death Benefit ............................. 11,544,261 -- 1.309 15,114,521 Enhanced Death Benefit ............................. 2,823,113 17,693 1.293 3,672,727 Van Kampen Enterprise Portfolio Standard Death Benefit ............................. 35,643,545 -- 2.601 92,711,500 Enhanced Death Benefit ............................. 6,741,005 10,971 2.568 17,341,018 -------------- Net Contract Owners' Equity ............................ $1,136,256,026 ==============
-8- 10 NOTES TO FINANCIAL STATEMENTS - CONTINUED 5. STATEMENT OF INVESTMENTS
INVESTMENT OPTIONS NO. OF MARKET SHARES VALUE ----------- -------------- DREYFUS VARIABLE INVESTMENT FUND (0.1%) Small Cap Portfolio Total (Cost $1,606,531) 31,072 $ 1,675,105 ----------- -------------- GREENWICH STREET SERIES FUND (8.5%) Total Return Portfolio Total (Cost $92,000,041) 5,519,769 96,871,945 ----------- -------------- SALOMON BROTHERS VARIABLE SERIES FUNDS INC. (0.2%) Salomon Brothers Variable Total Return Fund (Cost $851,982) 83,652 869,982 Salomon Brothers Variable Investors Fund (Cost $1,134,883) 112,187 1,235,176 ----------- -------------- Total (Cost $1,986,865) 195,839 2,105,158 ----------- -------------- SMITH BARNEY CONCERT ALLOCATION SERIES INC. (2.6%) Select Balanced Portfolio (Cost $10,911,750) 971,909 11,594,873 Select Conservative Portfolio (Cost $1,935,627) 172,640 2,007,807 Select Growth Portfolio (Cost $8,614,468) 759,549 9,501,962 Select High Growth Portfolio (Cost $4,437,169) 400,158 5,037,991 Select Income Portfolio (Cost $1,311,034) 115,702 1,339,829 ----------- -------------- Total (Cost $27,210,048) 2,419,958 29,482,462 ----------- -------------- THE TRAVELERS SERIES TRUST (6.0%) MFS Emerging Growth Portfolio (Cost $45,950,577) 3,520,748 59,395,014 MFS Research Portfolio (Cost $4,341,376) 443,899 4,687,578 Strategic Stock Portfolio (Cost $2,962,536) 318,964 3,017,401 Convertible Bond Portfolio (Cost $422,893) 43,685 430,733 Disciplined Mid Cap Stock Portfolio (Cost $525,472) 42,950 615,896 Disciplined Small Cap Stock Portfolio (Cost $313,019) 38,474 341,267 ----------- -------------- Total (Cost $54,515,873) 4,408,720 68,487,889 ----------- -------------- TRAVELERS SERIES FUND INC. (82.6%) AIM Capital Appreciation Portfolio (Cost $80,185,337) 6,874,869 99,548,097 Alliance Growth Portfolio (Cost $173,280,271) 8,868,612 233,333,174 G.T. Global Strategic Income Portfolio (Cost $9,538,145) 776,092 8,762,076 MFS Total Return Portfolio (Cost $113,258,170) 7,488,843 127,534,998 Putnam Diversified Income Portfolio (Cost $48,865,074) 4,057,220 48,686,639 Smith Barney International Equity Portfolio (Cost $54,319,863) 4,243,986 58,312,363 Smith Barney Money Market Portfolio (Cost $56,980,749) 56,980,749 56,980,749 Smith Barney High Income Portfolio (Cost $52,803,271) 4,100,729 51,915,224 Smith Barney Large Capitalization Growth Portfolio (Cost $14,207,616) 1,368,172 16,760,109 Smith Barney Large Cap Value Portfolio (Cost $89,545,266) 5,046,735 101,994,514 Smith Barney Pacific Basin Portfolio (Cost $3,957,519) 591,206 4,522,728 TBC Managed Income Portfolio (Cost $18,511,633) 1,597,602 18,803,773 Van Kampen Enterprise Portfolio (Cost $86,316,941) 4,559,950 110,031,596 ----------- -------------- Total (Cost $801,769,855) 106,554,765 937,186,040 ----------- -------------- TOTAL INVESTMENT OPTIONS (100%) (COST $979,089,213) $1,135,808,599 ==============
-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, 1998 AND 1997
SALOMON BROTHERS VARIABLE SMALL CAP PORTFOLIO TOTAL RETURN PORTFOLIO TOTAL RETURN FUND ------------------- -------------------------- ----------------- 1998 1997 1998 1997 1998 1997 ---- ---- ---- ---- ---- ---- INVESTMENT INCOME: Dividends ............................................... $ 16,394 $ -- $ 4,630,483 $ 2,819,309 $ 15,309 $ -- ---------- ---- ----------- ----------- --------- ---- EXPENSES: Insurance charges ....................................... 4,856 -- 929,344 503,712 3,719 -- Administrative fees ..................................... 682 -- 130,535 71,448 527 -- ---------- ---- ----------- ----------- --------- ---- Net investment income (loss) ........................ 10,856 -- 3,570,604 2,244,149 11,063 -- ---------- ---- ----------- ----------- --------- ---- REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED GAIN (LOSS) ON INVESTMENTS: Realized gain (loss) from investment transactions: Proceeds from investments sold ........................ 29,905 -- 5,569,201 501,439 195,786 -- Cost of investments sold .............................. 45,027 -- 4,435,408 396,281 199,208 -- ---------- ---- ----------- ----------- --------- ---- Net realized gain (loss) ............................ (15,122) -- 1,133,793 105,158 (3,422) -- ---------- ---- ----------- ----------- --------- ---- Change in unrealized gain (loss) on investments: Unrealized gain (loss) beginning of year .............. -- -- 6,850,155 2,319,470 -- -- Unrealized gain (loss) end of year .................... 68,574 -- 4,871,904 6,850,155 18,000 -- ---------- ---- ----------- ----------- --------- ---- Net change in unrealized gain (loss) for the year ... 68,574 -- (1,978,251) 4,530,685 18,000 -- ---------- ---- ----------- ----------- --------- ---- Net increase (decrease) in net assets resulting from operations ........................... 64,308 -- 2,726,146 6,879,992 25,641 -- ---------- ---- ----------- ----------- --------- ---- UNIT TRANSACTIONS: Participant purchase payments ........................... 1,085,114 -- 19,297,039 29,547,521 785,337 -- Participant transfers from other Travelers accounts ..... 554,843 -- 15,416,792 11,320,000 307,521 -- Administrative and asset allocation charges ............. (37) -- (17,925) (8,180) (28) -- Contract surrenders ..................................... (1,682) -- (2,558,282) (1,002,438) (4,004) -- Participant transfers to other Travelers accounts ....... (27,848) -- (7,895,368) (1,698,306) (228,099) -- Other payments to participants .......................... -- -- (1,006,451) (409,568) -- -- ---------- ---- ----------- ----------- --------- ---- Net increase (decrease) in net assets resulting from unit transactions .................... 1,610,390 -- 23,235,805 37,749,029 860,727 -- ---------- ---- ----------- ----------- --------- ---- Net increase (decrease) in net assets ............... 1,674,698 -- 25,961,951 44,629,021 886,368 -- NET ASSETS: Beginning of year ..................................... -- -- 70,908,710 26,279,689 -- -- ---------- ---- ----------- ----------- --------- ---- End of year ........................................... $1,674,698 $ -- $96,870,661 $70,908,710 $ 886,368 $ -- ========== ==== =========== =========== ========= ====
-10- 12 NOTES TO FINANCIAL STATEMENTS - CONTINUED
SALOMON BROTHERS VARIABLE INVESTORS FUND SELECT BALANCED PORTFOLIO SELECT CONSERVATIVE PORTFOLIO SELECT GROWTH PORTFOLIO - ----------------------- ----------------------------- ----------------------------- ----------------------------- 1998 1997 1998 1997 1998 1997 1998 1997 ---- ---- ---- ---- ---- ---- ---- ---- $ 5,048 $ -- $ 293,039 $ -- $ 40,576 $ -- $ 157,884 $ -- ------------ ----- ------------ ------------ ------------ ------------ ------------ ------------ 4,192 -- 107,208 26,874 17,334 3,516 84,405 17,499 599 -- 14,686 3,580 2,450 499 11,510 2,398 ------------ ----- ------------ ------------ ------------ ------------ ------------ ------------ 257 -- 171,145 (30,454) 20,792 (4,015) 61,969 (19,897) ------------ ----- ------------ ------------ ------------ ------------ ------------ ------------ 148,089 -- 845,810 288,850 156,029 136,242 605,873 119,596 153,256 -- 728,104 277,252 142,096 131,428 512,867 105,666 ------------ ----- ------------ ------------ ------------ ------------ ------------ ------------ (5,167) -- 117,706 11,598 13,933 4,814 93,006 13,930 ------------ ----- ------------ ------------ ------------ ------------ ------------ ------------ -- -- 252,648 -- 35,641 -- 127,547 -- 100,293 -- 683,123 252,648 72,180 35,641 887,494 127,547 ------------ ----- ------------ ------------ ------------ ------------ ------------ ------------ 100,293 -- 430,475 252,648 36,539 35,641 759,947 127,547 ------------ ----- ------------ ------------ ------------ ------------ ------------ ------------ 95,383 -- 719,326 233,792 71,264 36,440 914,922 121,580 ------------ ----- ------------ ------------ ------------ ------------ ------------ ------------ 872,280 -- 3,710,667 5,194,754 585,526 881,469 1,537,757 4,140,789 415,098 -- 1,572,169 1,371,868 420,977 299,232 3,050,730 937,045 (39) -- (1,568) (156) (271) (25) (1,747) (227) (5,515) -- (166,605) (20,071) (13,994) (13,817) (283,894) (10,285) (137,327) -- (491,046) (295,224) (110,470) (131,155) (693,899) (149,701) -- -- (236,156) -- (17,902) -- (63,693) -- ------------ ----- ------------ ------------ ------------ ------------ ------------ ------------ 1,144,497 -- 4,387,461 6,251,171 863,866 1,035,704 3,545,254 4,917,621 ------------ ----- ------------ ------------ ------------ ------------ ------------ ------------ 1,239,880 -- 5,106,787 6,484,963 935,130 1,072,144 4,460,176 5,039,201 -- -- 6,484,963 -- 1,072,144 -- 5,039,201 -- ------------ ----- ------------ ------------ ------------ ------------ ------------ ------------ $ 1,239,880 $ -- $ 11,591,750 $ 6,484,963 $ 2,007,274 $ 1,072,144 $ 9,499,377 $ 5,039,201 ============ ===== ============ ============ ============ ============ ============ ============
-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, 1998 AND 1997 (CONTINUED)
SELECT HIGH GROWTH MFS EMERGING GROWTH PORTFOLIO SELECT INCOME PORTFOLIO PORTFOLIO ----------------------- ----------------------- ------------------------- 1998 1997 1998 1997 1998 1997 ---- ---- ---- ---- ---- ---- INVESTMENT INCOME: Dividends .......................................... $ 43,929 $ -- $ 20,869 $ -- $ -- $ 439,667 ---------- ---------- ---------- ---------- ----------- ----------- EXPENSES: Insurance charges .................................. 47,174 15,141 10,890 821 448,892 141,590 Administrative fees ................................ 6,670 2,177 1,580 117 62,560 20,232 ---------- ---------- ---------- ---------- ----------- ----------- Net investment income (loss) ................... (9,915) (17,318) 8,399 (938) (511,452) 277,845 ---------- ---------- ---------- ---------- ----------- ----------- REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED GAIN (LOSS) ON INVESTMENTS: Realized gain (loss) from investment transactions: Proceeds from investments sold ................... 339,553 11,871 137,271 43,599 3,362,483 684,958 Cost of investments sold ......................... 309,873 10,454 128,490 42,285 2,671,014 633,928 ---------- ---------- ---------- ---------- ----------- ----------- Net realized gain (loss) ....................... 29,680 1,417 8,781 1,314 691,469 51,030 ---------- ---------- ---------- ---------- ----------- ----------- Change in unrealized gain (loss) on investments: Unrealized gain (loss) beginning of year ......... 107,199 -- 6,863 1,705,372 (93,591) Unrealized gain (loss) end of year ............... 600,822 107,199 28,795 6,863 13,444,437 1,705,372 ---------- ---------- ---------- ---------- ----------- ----------- Net change in unrealized gain (loss) for the year ......................................... 493,623 107,199 21,932 6,863 11,739,065 1,798,963 ---------- ---------- ---------- ---------- ----------- ----------- Net increase (decrease) in net assets resulting from operations ...................... 513,388 91,298 39,112 7,239 11,919,082 2,127,838 ---------- ---------- ---------- ---------- ----------- ----------- UNIT TRANSACTIONS: Participant purchase payments ...................... 743,836 1,961,168 541,045 368,257 16,687,370 16,234,637 Participant transfers from other Travelers accounts 801,633 1,271,640 501,765 84,462 11,582,826 6,184,899 Administrative and asset allocation charges ........ (914) (82) (180) (7) (8,737) (1,929) Contract surrenders ................................ (58,952) (3,734) (33,981) (11,377) (848,584) (167,796) Participant transfers to other Travelers accounts .. (282,603) -- (101,704) (18,312) (5,159,790) (1,315,407) Other payments to participants ..................... -- -- (18,100) -- (297,165) (114,744) ---------- ---------- ---------- ---------- ----------- ----------- Net increase (decrease) in net assets resulting from unit transactions ............... 1,203,000 3,228,992 888,845 423,023 21,955,920 20,819,660 ---------- ---------- ---------- ---------- ----------- ----------- Net increase (decrease) in net assets .......... 1,716,388 3,320,290 927,957 430,262 33,875,002 22,947,498 NET ASSETS: Beginning of year ................................ 3,320,290 -- 430,262 -- 25,934,666 2,987,168 ---------- ---------- ---------- ---------- ----------- ----------- End of year ...................................... $5,036,678 $3,320,290 $1,358,219 $ 430,262 $59,809,668 $25,934,666 ========== ========== ========== ========== =========== ===========
-12- 14 NOTES TO FINANCIAL STATEMENTS - CONTINUED
STRATEGIC STOCK CONVERTIBLE BOND DISCIPLINED MID CAP MFS RESEARCH PORTFOLIO PORTFOLIO PORTFOLIO STOCK PORTFOLIO - ---------------------- --------------------- --------------------- --------------------- 1998 1997 1998 1997 1998 1997 1998 1997 ---- ---- ---- ---- ---- ---- ---- ---- $ 7,324 $ -- $ 36,872 $ -- $ 10,406 $ -- $ 404 $ -- - ----------- ----- ----------- ----- ----------- ----- ----------- ----- 14,961 -- 8,866 -- 1,083 -- 1,131 -- 2,019 -- 1,300 -- 157 -- 162 -- - ----------- ----- ----------- ----- ----------- ----- ----------- ----- (9,656) -- 26,706 -- 9,166 -- (889) -- - ----------- ----- ----------- ----- ----------- ----- ----------- ----- 826,352 -- 188,500 -- 14,335 -- 38,205 -- 819,872 -- 207,858 -- 15,123 -- 42,630 -- - ----------- ----- ----------- ----- ----------- ----- ----------- ----- 6,480 -- (19,358) -- (788) -- (4,425) -- - ----------- ----- ----------- ----- ----------- ----- ----------- ----- -- -- -- -- -- -- -- -- 346,202 -- 54,865 -- 7,840 -- 90,424 -- - ----------- ----- ----------- ----- ----------- ----- ----------- ----- 346,202 -- 54,865 -- 7,840 -- 90,424 -- - ----------- ----- ----------- ----- ----------- ----- ----------- ----- 343,026 -- 62,213 -- 16,218 -- 85,110 -- - ----------- ----- ----------- ----- ----------- ----- ----------- ----- 3,215,369 -- 2,501,332 -- 284,595 -- 365,542 -- 2,190,409 -- 659,886 -- 148,423 -- 195,953 -- (103) -- (107) -- (6) -- (19) -- (27,653) -- (9,686) -- (205) -- (647) -- (1,018,554) -- (51,299) -- (7,999) -- (26,234) -- -- -- -- -- -- -- (3,958) -- - ----------- ----- ----------- ----- ----------- ----- ----------- ----- 4,359,468 -- 3,100,126 -- 424,808 -- 530,637 -- - ----------- ----- ----------- ----- ----------- ----- ----------- ----- 4,702,494 -- 3,162,339 -- 441,026 -- 615,747 -- -- -- -- -- -- -- -- -- - ----------- ----- ----------- ----- ----------- ----- ----------- ----- $ 4,702,494 $ -- $ 3,162,339 $ -- $ 441,026 $ -- $ 615,747 $ -- =========== ===== =========== ===== =========== ===== =========== =====
-13- 15 NOTES TO FINANCIAL STATEMENTS - CONTINUED 6. SCHEDULE OF FUND BD II OPERATIONS AND CHANGES IN NET ASSETS FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997 (CONTINUED)
DISCIPLINED SMALL CAP STOCK AIM CAPITAL APPRECIATION PORTFOLIO PORTFOLIO ALLIANCE GROWTH PORTFOLIO ----------------- --------------------------- ----------------------------- 1998 1997 1998 1997 1998 1997 ---- ---- ---- ---- ---- ---- INVESTMENT INCOME: Dividends ......................................... $ 1,000 $ -- $ 117,554 $ -- $ 11,136,395 $ -- --------- ----- ------------ ------------ ------------- ------------- EXPENSES: Insurance charges ................................. 904 -- 886,690 565,729 1,882,382 881,791 Administrative fees ............................... 130 -- 124,887 80,459 265,187 124,597 --------- ----- ------------ ------------ ------------- ------------- Net investment income (loss) .................. (34) -- (894,023) (646,188) 8,988,826 (1,006,388) --------- ----- ------------ ------------ ------------- ------------- REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED GAIN (LOSS) ON INVESTMENTS: Realized gain (loss) from investment transactions: Proceeds from investments sold .................. 26,578 -- 4,140,986 796,430 6,171,002 732,086 Cost of investments sold ........................ 31,600 -- 3,224,210 669,177 3,984,852 553,312 --------- ----- ------------ ------------ ------------- ------------- Net realized gain (loss) ...................... (5,022) -- 916,776 127,253 2,186,150 178,774 --------- ----- ------------ ------------ ------------- ------------- Change in unrealized gain (loss) on investments: Unrealized gain (loss) beginning of year ........ -- -- 6,861,140 1,950,900 26,592,251 4,561,590 Unrealized gain (loss) end of year .............. 28,248 -- 19,362,760 6,861,140 60,052,903 26,592,251 --------- ----- ------------ ------------ ------------- ------------- Net change in unrealized gain (loss) for the year ........................................ 28,248 -- 12,501,620 4,910,240 33,460,652 22,030,661 --------- ----- ------------ ------------ ------------- ------------- Net increase (decrease) in net assets resulting from operations ..................... 23,192 -- 12,524,373 4,391,305 44,635,628 21,203,047 --------- ----- ------------ ------------ ------------- ------------- UNIT TRANSACTIONS: Participant purchase payments ..................... 217,711 -- 16,639,377 24,085,122 49,359,571 47,077,956 Participant transfers from other Travelers accounts 127,325 -- 11,270,899 9,106,236 33,744,376 18,767,525 Administrative and asset allocation charges ....... (12) -- (20,631) (13,062) (38,006) (16,453) Contract surrenders ............................... (129) -- (2,447,800) (1,468,796) (5,783,287) (1,971,086) Participant transfers to other Travelers accounts . (25,905) -- (7,003,898) (2,435,679) (14,018,045) (5,373,999) Other payments to participants .................... -- -- (1,048,620) (696,990) (2,244,825) (755,258) --------- ----- ------------ ------------ ------------- ------------- Net increase (decrease) in net assets resulting from unit transactions .............. 318,990 -- 17,389,327 28,576,831 61,019,784 57,728,685 --------- ----- ------------ ------------ ------------- ------------- Net increase (decrease) in net assets ......... 342,182 -- 29,913,700 32,968,136 105,655,412 78,931,732 NET ASSETS: Beginning of year ............................... -- -- 69,621,833 36,653,697 128,226,933 49,295,201 --------- ----- ------------ ------------ ------------- ------------- End of year ..................................... $ 342,182 $ -- $ 99,535,533 $ 69,621,833 $ 233,882,345 $ 128,226,933 ========= ===== ============ ============ ============= =============
-14- 16 NOTES TO FINANCIAL STATEMENTS - CONTINUED
G.T. GLOBAL STRATEGIC INCOME PUTNAM DIVERSIFIED INCOME SMITH BARNEY INTERNATIONAL PORTFOLIO MFS TOTAL RETURN PORTFOLIO PORTFOLIO EQUITY PORTFOLIO - ----------------------------- ------------------------------ ------------------------------ ------------------------------ 1998 1997 1998 1997 1998 1997 1998 1997 ---- ---- ---- ---- ---- ---- ---- ---- $ 964,835 $ -- $ 4,519,417 $ -- $ 1,797,250 $ -- $ -- $ -- - ------------ ------------- ------------- ------------- ------------- ------------- ------------- ------------- 95,709 60,882 1,061,279 449,112 441,269 227,383 580,838 306,167 13,467 8,670 149,339 63,766 61,597 32,184 82,311 54,224 - ------------ ------------- ------------- ------------- ------------- ------------- ------------- ------------- 855,659 (69,552) 3,308,799 (512,878) 1,294,384 (259,567) (663,149) (360,391) - ------------ ------------- ------------- ------------- ------------- ------------- ------------- ------------- 1,550,891 250,620 2,996,328 1,195,009 2,276,601 454,711 264,579,558 74,413,842 1,516,824 218,454 2,265,808 991,043 2,130,513 450,698 266,592,695 70,693,976 - ------------ ------------- ------------- ------------- ------------- ------------- ------------- ------------- 34,067 32,166 730,520 203,966 146,088 4,013 (2,013,137) 3,719,866 - ------------ ------------- ------------- ------------- ------------- ------------- ------------- ------------- 416,223 33,836 8,794,710 1,072,467 1,683,521 11,889 (2,438,068) 754,036 (776,069) 416,223 14,276,828 8,794,710 (178,435) 1,683,521 3,992,500 (2,438,068) - ------------ ------------- ------------- ------------- ------------- ------------- ------------- ------------- (1,192,292) 382,387 5,482,118 7,722,243 (1,861,956) 1,671,632 6,430,568 (3,192,104) - ------------ ------------- ------------- ------------- ------------- ------------- ------------- ------------- (302,566) 345,001 9,521,437 7,413,331 (421,484) 1,416,078 3,754,282 167,371 - ------------ ------------- ------------- ------------- ------------- ------------- ------------- ------------- 1,444,980 4,062,420 36,360,884 29,292,210 12,778,268 13,450,688 10,293,289 16,944,027 1,175,985 1,319,922 25,020,238 9,887,470 10,538,715 3,933,503 295,219,809 104,954,168 (1,377) (653) (18,249) (6,249) (8,100) (3,655) (11,295) (6,694) (424,995) (120,207) (3,460,449) (1,064,999) (1,523,216) (514,487) (1,781,717) (641,705) (1,225,167) (215,137) (6,313,567) (3,008,984) (3,118,802) (1,811,753) (293,326,178) (99,450,511) (235,798) (82,404) (1,061,539) (312,103) (658,437) (134,175) (652,379) (182,508) - ------------ ------------- ------------- ------------- ------------- ------------- ------------- ------------- 733,628 4,963,941 50,527,318 34,787,345 18,008,428 14,920,121 9,741,529 21,616,777 - ------------ ------------- ------------- ------------- ------------- ------------- ------------- ------------- 431,062 5,308,942 60,048,755 42,200,676 17,586,944 16,336,199 13,495,811 21,784,148 8,325,429 3,016,487 67,584,597 25,383,921 31,199,618 14,863,419 44,817,610 23,033,462 - ------------ ------------- ------------- ------------- ------------- ------------- ------------- ------------- $ 8,756,491 $ 8,325,429 $ 127,633,352 $ 67,584,597 $ 48,786,562 $ 31,199,618 $ 58,313,421 $ 44,817,610 ============ ============= ============= ============= ============= ============= ============= =============
-15- 17 NOTES TO FINANCIAL STATEMENTS - CONTINUED 6. SCHEDULE OF FUND BD II OPERATIONS AND CHANGES IN NET ASSETS FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997 (CONTINUED)
SMITH BARNEY LARGE SMITH BARNEY MONEY MARKET SMITH BARNEY HIGH INCOME CAPITALIZATION PORTFOLIO PORTFOLIO GROWTH PORTFOLIO ----------------------------- ------------------------- ------------------- 1998 1997 1998 1997 1998 1997 ---- ---- ---- ---- ---- ---- INVESTMENT INCOME: Dividends ......................................... $ 2,017,269 $ 1,460,052 $ 3,075,417 $ -- $ 9,714 $ -- ------------- ------------- ----------- ----------- ------------ ---- EXPENSES: Insurance charges ................................. 431,705 309,270 480,113 213,529 32,872 -- Administrative fees ............................... 61,745 44,027 68,189 30,465 4,656 -- ------------- ------------- ----------- ----------- ------------ ---- Net investment income (loss) .................. 1,523,819 1,106,755 2,527,115 (243,994) (27,814) -- ------------- ------------- ----------- ----------- ------------ ---- REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED GAIN (LOSS) ON INVESTMENTS: Realized gain (loss) from investment transactions: Proceeds from investments sold .................. 300,946,604 129,557,007 3,834,210 377,090 91,843 -- Cost of investments sold ........................ 300,946,604 129,557,007 3,443,039 344,965 89,852 -- ------------- ------------- ----------- ----------- ------------ ---- Net realized gain (loss) ...................... -- -- 391,171 32,125 1,991 -- ------------- ------------- ----------- ----------- ------------ ---- Change in unrealized gain (loss) on investments: Unrealized gain (loss) beginning of year ........ -- -- 2,670,671 138,086 -- -- Unrealized gain (loss) end of year .............. -- -- (888,047) 2,670,671 2,552,493 -- ------------- ------------- ----------- ----------- ------------ ---- Net change in unrealized gain (loss) for the year ........................................ -- -- (3,558,718) 2,532,585 2,552,493 -- ------------- ------------- ----------- ----------- ------------ ---- Net increase (decrease) in net assets resulting from operations ..................... 1,523,819 1,106,755 (640,432) 2,320,716 2,526,670 -- ------------- ------------- ----------- ----------- ------------ ---- UNIT TRANSACTIONS: Participant purchase payments ..................... 21,445,937 37,218,989 14,996,860 19,554,203 8,438,816 -- Participant transfers from other Travelers accounts 358,708,002 144,063,574 11,848,781 3,746,308 6,504,236 -- Administrative and asset allocation charges ....... (3,745) (2,414) (7,138) (2,715) (308) -- Contract surrenders ............................... (2,355,637) (918,683) (1,578,007) (506,524) (74,054) -- Participant transfers to other Travelers accounts . (354,956,853) (176,681,199) (6,838,393) (1,479,106) (551,021) -- Other payments to participants .................... (333,353) (580,295) (723,059) (67,720) -- -- ------------- ------------- ----------- ----------- ------------ ---- Net increase (decrease) in net assets resulting from unit transactions .............. 22,504,351 3,099,972 17,699,044 21,244,446 14,317,669 -- ------------- ------------- ----------- ----------- ------------ ---- Net increase (decrease) in net assets ......... 24,028,170 4,206,727 17,058,612 23,565,162 16,844,339 -- NET ASSETS: Beginning of year ............................... 31,985,729 27,779,002 34,850,185 11,285,023 -- -- ------------- ------------- ----------- ----------- ------------ ---- End of year ..................................... $ 56,013,899 $ 31,985,729 $51,908,797 $34,850,185 $ 16,844,339 $ -- ============= ============= =========== =========== ============ ====
-16- 18 NOTES TO FINANCIAL STATEMENTS - CONTINUED
SMITH BARNEY LARGE CAP VALUE SMITH BARNEY PACIFIC BASIN TBC MANAGED INCOME VAN KAMPEN ENTERPRISE PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO - ----------------------------- ------------------------------ ------------------------------ ------------------------------ 1998 1997 1998 1997 1998 1997 1998 1997 ---- ---- ---- ---- ---- ---- ---- ---- $ 3,151,979 $ -- $ 58,199 $ -- $ 540,590 $ -- $ 4,717,666 $ -- - ------------ ------------- ------------- ------------- ------------- ------------- ------------- ------------- 900,154 401,449 46,605 158 134,186 49,769 907,473 417,556 126,694 56,935 6,584 6,618 18,699 7,098 127,806 59,444 - ------------ ------------- ------------- ------------- ------------- ------------- ------------- ------------- 2,125,131 (458,384) 5,010 (6,776) 387,705 (56,867) 3,682,387 (477,000) - ------------ ------------- ------------- ------------- ------------- ------------- ------------- ------------- 3,406,709 542,887 31,497,782 26,053,417 1,295,854 420,772 3,394,184 232,006 2,453,068 399,665 31,922,287 27,025,264 1,168,760 413,801 2,198,347 161,526 - ------------ ------------- ------------- ------------- ------------- ------------- ------------- ------------- 953,641 143,222 (424,505) (971,847) 127,094 6,971 1,195,837 70,480 - ------------ ------------- ------------- ------------- ------------- ------------- ------------- ------------- 9,376,827 1,308,970 (275,942) 53,691 433,886 (21,610) 10,279,585 1,791,072 12,449,248 9,376,827 565,209 (275,942) 292,140 433,886 23,714,655 10,279,585 - ------------ ------------- ------------- ------------- ------------- ------------- ------------- ------------- 3,072,421 8,067,857 841,151 (329,633) (141,746) 455,496 13,435,070 8,488,513 - ------------ ------------- ------------- ------------- ------------- ------------- ------------- ------------- 6,151,193 7,752,695 421,656 (1,308,256) 373,053 405,600 18,313,294 8,081,993 - ------------ ------------- ------------- ------------- ------------- ------------- ------------- ------------- 26,757,535 25,405,607 480,535 2,205,368 5,725,970 2,833,792 23,951,480 25,093,955 20,371,216 10,329,030 29,773,194 33,843,799 7,951,464 925,966 17,427,903 8,649,103 (16,207) (5,831) (972) (954) (1,723) (719) (16,358) (6,057) (3,029,261) (1,199,451) (187,199) (79,311) (377,694) (94,062) (2,458,500) (1,128,220) (7,657,455) (2,080,124) (30,040,862) (33,605,393) (1,556,754) (486,399) (6,740,800) (1,045,309) (1,255,380) (172,269) (107,389) (38,406) (235,942) (45,750) (1,370,976) (198,607) - ------------ ------------- ------------- ------------- ------------- ------------- ------------- ------------- 35,170,448 32,276,962 (82,693) 2,325,103 11,505,321 3,132,828 30,792,749 31,364,865 - ------------ ------------- ------------- ------------- ------------- ------------- ------------- ------------- 41,321,641 40,029,657 338,963 1,016,847 11,878,374 3,538,428 49,106,043 39,446,858 60,660,447 20,630,790 4,182,109 3,165,262 6,908,874 3,370,446 60,946,475 21,499,617 - ------------ ------------- ------------- ------------- ------------- ------------- ------------- ------------- $101,982,088 $ 60,660,447 $ 4,521,072 $ 4,182,109 $ 18,787,248 $ 6,908,874 $ 110,052,518 $ 60,946,475 ============ ============= ============= ============= ============= ============= ============= =============
-17- 19 NOTES TO FINANCIAL STATEMENTS - CONTINUED 6. SCHEDULE OF FUND BD II OPERATIONS AND CHANGES IN NET ASSETS FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997 (CONTINUED)
COMBINED -------------------------------------- 1998 1997 ---- ---- INVESTMENT INCOME: Dividends ............................................... $ 37,385,822 $ 4,719,028 --------------- --------------- EXPENSES: Insurance charges ....................................... 9,566,234 4,591,948 Administrative fees ..................................... 1,346,728 668,938 --------------- --------------- Net investment income (loss) ........................ 26,472,860 (541,858) --------------- --------------- REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED GAIN (LOSS) ON INVESTMENTS: Realized gain (loss) from investment transactions: Proceeds from investments sold ........................ 638,666,522 236,812,432 Cost of investments sold .............................. 632,379,285 233,076,182 --------------- --------------- Net realized gain (loss) ............................ 6,287,237 3,736,250 --------------- --------------- Change in unrealized gain (loss) on investments: Unrealized gain (loss) beginning of year .............. 73,480,229 13,880,806 Unrealized gain (loss) end of year .................... 156,719,386 73,480,229 --------------- --------------- Net change in unrealized gain (loss) for the year ... 83,239,157 59,599,423 --------------- --------------- Net increase (decrease) in net assets resulting from operations ........................... 115,999,254 62,793,815 --------------- --------------- UNIT TRANSACTIONS: Participant purchase payments ........................... 281,104,022 305,552,932 Participant transfers from other Travelers accounts ..... 867,501,168 370,995,750 Administrative and asset allocation charges ............. (175,802) (76,062) Contract surrenders ..................................... (29,495,629) (10,937,049) Participant transfers to other Travelers accounts ....... (749,605,940) (331,281,697) Other payments to participants .......................... (11,571,122) (3,790,797) --------------- --------------- Net increase (decrease) in net assets resulting from unit transactions .................... 357,756,697 330,463,076 --------------- --------------- Net increase (decrease) in net assets ............... 473,755,951 393,256,891 NET ASSETS: Beginning of year ..................................... 662,500,075 269,243,184 --------------- --------------- End of year ........................................... $ 1,136,256,026 $ 662,500,075 =============== ===============
-18- 20 NOTES TO FINANCIAL STATEMENTS - CONTINUED 7. SCHEDULE OF ACCUMULATION AND ANNUITY UNITS FOR FUND BD II FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
SALOMON BROTHERS VARIABLE SMALL CAP PORTFOLIO TOTAL RETURN PORTFOLIO TOTAL RETURN FUND -------------------- --------------------------- -------------------- 1998 1997 1998 1997 1998 1997 ---- ---- ---- ---- ---- ---- Accumulation and annuity units beginning of year ........................... -- -- 39,661,235 16,964,938 -- -- Accumulation units purchased and transferred from other Travelers accounts ... 2,009,376 -- 19,027,357 24,576,075 1,128,729 -- Accumulation units redeemed and transferred to other Travelers accounts ..... (44,217) -- (6,433,894) (1,879,778) (239,891) -- Annuity units ................................. -- -- 13,859 -- -- -- ----------- ---- ----------- ----------- ----------- ---- Accumulation and annuity units end of year ................................. 1,965,159 -- 52,268,557 39,661,235 888,838 -- =========== ==== =========== =========== =========== ====
SALOMON BROTHERS VARIABLE SELECT CONSERVATIVE INVESTORS FUND SELECT BALANCED PORTFOLIO PORTFOLIO ------------------ ------------------------ ------------------------- 1998 1997 1998 1997 1998 1997 ---- ---- ---- ---- ---- ---- Accumulation and annuity units beginning of year ........................... -- -- 5,936,901 -- 968,176 -- Accumulation units purchased and transferred from other Travelers accounts ... 1,373,269 -- 4,661,426 6,244,028 889,003 1,108,928 Accumulation units redeemed and transferred to other Travelers accounts ..... (150,121) -- (787,974) (307,127) (128,513) (140,752) Annuity units ................................. -- -- -- -- -- -- --------- ---- --------- ---------- ---------- ---------- Accumulation and annuity units end of year ................................. 1,223,148 -- 9,810,353 5,936,901 1,728,666 968,176 ========= ==== ========= ========== ========== ==========
SELECT GROWTH SELECT HIGH GROWTH PORTFOLIO PORTFOLIO SELECT INCOME PORTFOLIO ---------------------- ----------------------- ------------------------ 1998 1997 1998 1997 1998 1997 ---- ---- ---- ---- ---- ---- Accumulation and annuity units beginning of year ........................... 4,587,140 -- 3,048,275 -- 389,101 -- Accumulation units purchased and transferred from other Travelers accounts ... 3,985,489 4,733,409 1,336,968 3,051,712 923,029 416,501 Accumulation units redeemed and transferred to other Travelers accounts ..... (887,258) (146,269) (328,072) (3,437) (134,791) (27,400) Annuity units ................................. -- -- -- -- -- -- --------- --------- --------- ---------- ---------- ---------- Accumulation and annuity units end of year ................................. 7,685,371 4,587,140 4,057,171 3,048,275 1,177,339 389,101 ========= ========= ========= ========== ========== ==========
-19- 21 NOTES TO FINANCIAL STATEMENTS - CONTINUED 7. SCHEDULE OF ACCUMULATION AND ANNUITY UNITS FOR FUND BD II FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997 (CONTINUED)
MFS EMERGING GROWTH MFS RESEARCH STRATEGIC STOCK PORTFOLIO PORTFOLIO PORTFOLIO --------------------------- -------------------- -------------------- 1998 1997 1998 1997 1998 1997 ---- ---- ---- ---- ---- ---- Accumulation and annuity units beginning of year ........................... 21,550,926 2,971,654 -- -- -- -- Accumulation units purchased and transferred from other Travelers accounts ... 20,689,579 20,021,481 5,613,771 -- 3,447,134 -- Accumulation units redeemed and transferred to other Travelers accounts ..... (4,781,997) (1,442,209) (1,075,074) -- (66,974) -- Annuity units ................................. -- -- -- -- -- -- ----------- ----------- ----------- ---- ----------- ---- Accumulation and annuity units end of year ................................. 37,458,508 21,550,926 4,538,697 -- 3,380,160 -- =========== =========== =========== ==== =========== ====
DISCIPLINED DISCIPLINED CONVERTIBLE BOND MID CAP SMALL CAP PORTFOLIO STOCK PORTFOLIO STOCK PORTFOLIO ----------------- ----------------- ----------------- 1998 1997 1998 1997 1998 1997 ---- ---- ---- ---- ---- ---- Accumulation and annuity units beginning of year ........................... -- -- -- -- -- -- Accumulation units purchased and transferred from other Travelers accounts ... 449,233 -- 613,019 -- 414,538 -- Accumulation units redeemed and transferred to other Travelers accounts ..... (8,687) -- (34,455) -- (32,439) -- Annuity units ................................. -- -- -- -- -- -- -------- ---- -------- ---- -------- ---- Accumulation and annuity units end of year ................................. 440,546 -- 578,564 -- 382,099 -- ======== ==== ======== ==== ======== ====
AIM CAPITAL APPRECIATION G.T. GLOBAL STRATEGIC PORTFOLIO ALLIANCE GROWTH PORTFOLIO INCOME PORTFOLIO ------------------------ ------------------------- ----------------------- 1998 1997 1998 1997 1998 1997 ---- ---- ---- ---- ---- ---- Accumulation and annuity units beginning of year ........................... 57,787,169 33,706,796 56,417,647 27,644,095 5,969,617 2,295,810 Accumulation units purchased and transferred from other Travelers accounts ... 22,217,787 28,053,552 33,471,642 32,819,155 1,878,273 3,980,326 Accumulation units redeemed and transferred to other Travelers accounts ..... (8,658,755) (3,973,179) (9,166,301) (4,045,603) (1,393,495) (306,519) Annuity units ................................. -- -- -- -- -- -- ---------- ---------- ---------- ---------- ---------- --------- Accumulation and annuity units end of year ................................. 71,346,201 57,787,169 80,722,988 56,417,647 6,454,395 5,969,617 ========== ========== ========== ========== ========== =========
-20- 22 NOTES TO FINANCIAL STATEMENTS - CONTINUED 7. SCHEDULE OF ACCUMULATION AND ANNUITY UNITS FOR FUND BD II FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997 (CONTINUED)
MFS TOTAL RETURN PUTNAM DIVERSIFIED SMITH BARNEY INTERNATIONAL PORTFOLIO INCOME PORTFOLIO EQUITY PORTFOLIO ----------------------- ----------------------- -------------------------- 1998 1997 1998 1997 1998 1997 ---- ---- ---- ---- ---- ---- Accumulation and annuity units beginning of year ........................... 41,066,792 18,460,646 23,457,375 11,885,359 36,182,945 18,864,868 Accumulation units purchased and transferred from other Travelers accounts ... 35,565,885 25,519,291 17,421,700 13,499,883 231,937,728 94,826,692 Accumulation units redeemed and transferred to other Travelers accounts ..... (6,333,554) (2,913,145) (4,000,490) (1,927,867) (223,392,552) (77,508,615) Annuity units ................................. 13,732 -- 17,799 -- 19,578 -- ---------- ---------- ---------- ---------- ------------ ----------- Accumulation and annuity units end of year ................................. 70,312,855 41,066,792 36,896,384 23,457,375 44,747,699 36,182,945 ========== ========== ========== ========== ============ ===========
SMITH BARNEY LARGE SMITH BARNEY MONEY MARKET SMITH BARNEY HIGH INCOME CAPITALIZATION PORTFOLIO PORTFOLIO GROWTH PORTFOLIO --------------------------- ------------------------- ------------------ 1998 1997 1998 1997 1998 1997 ---- ---- ---- ---- ---- ---- Accumulation and annuity units beginning of year ........................... 28,077,883 25,323,950 23,853,145 8,689,256 -- -- Accumulation units purchased and transferred from other Travelers accounts ... 327,092,440 161,814,352 18,226,399 16,642,827 14,230,722 -- Accumulation units redeemed and transferred to other Travelers accounts ..... (307,776,462) (159,060,419) (6,285,817) (1,478,938) (607,005) -- Annuity units ................................. -- -- 16,392 -- -- -- ------------ ------------ ----------- ----------- ----------- ---- Accumulation and annuity units end of year ................................. 47,393,861 28,077,883 35,810,119 23,853,145 13,623,717 -- ============ ============ =========== =========== =========== ====
SMITH BARNEY LARGE CAP SMITH BARNEY PACIFIC TBC MANAGED INCOME VALUE PORTFOLIO BASIN PORTFOLIO PORTFOLIO ------------------------ ------------------------- ----------------------- 1998 1997 1998 1997 1998 1997 ---- ---- ---- ---- ---- ---- Accumulation and annuity units beginning of year ........................... 31,762,755 13,512,027 5,986,528 3,221,715 5,489,797 2,901,133 Accumulation units purchased and transferred from other Travelers accounts ... 23,614,325 20,180,381 43,412,299 39,296,051 10,565,765 3,113,712 Accumulation units redeemed and transferred to other Travelers accounts ..... (6,160,832) (1,929,653) (43,293,153) (36,531,238) (1,688,188) (525,048) Annuity units ................................. 12,608 -- -- -- 17,693 -- ---------- ----------- ----------- ----------- ---------- ---------- Accumulation and annuity units end of year ................................. 49,228,856 31,762,755 6,105,674 5,986,528 14,385,067 5,489,797 ========== =========== =========== =========== ========== ==========
-21- 23 NOTES TO FINANCIAL STATEMENTS - CONTINUED 7. SCHEDULE OF ACCUMULATION AND ANNUITY UNITS FOR FUND BD II FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997 (CONTINUED)
VAN KAMPEN ENTERPRISE PORTFOLIO COMBINED ------------------------------- ----------------------------- 1998 1997 1998 1997 ---- ---- ---- ---- Accumulation and annuity units beginning of year ........................... 29,020,276 13,004,616 421,213,683 199,446,863 Accumulation units purchased and transferred from other Travelers accounts ... 18,140,146 17,226,005 864,337,031 517,124,361 Accumulation units redeemed and transferred to other Travelers accounts ..... (4,775,872) (1,210,345) (638,666,833) (295,357,541) Annuity units ................................. 10,971 -- 122,632 -- ------------ ------------ ------------ ------------ Accumulation and annuity units end of year ................................. 42,395,521 29,020,276 647,006,513 421,213,683 ============ ============ ============ ============
-22- 24 INDEPENDENT AUDITORS' REPORT 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, 1998, 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, 1998, by correspondence with the underlying funds. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our 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, 1998, 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. KPMG LLP Hartford, Connecticut February 17, 1999 -23- 25 Independent Auditors KPMG LLP Hartford, Connecticut This report is prepared for the general information of contract owners and is not an offer of shares of The Travelers 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 Prospectus for The Travelers Fund BD II for Variable Annuities product(s) offered by The Travelers Life and Annuity Company and the Prospectuses of the underlying funds, which collectively contain all pertinent information, including the applicable sales commissions. FNDBDII (Annual) (12-98) Printed in U.S.A. -----END PRIVACY-ENHANCED MESSAGE-----