-----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, C2EXLTW+gowy4HJnCGz2p223vKUYao+woWikj2GV9h3Q8F+TtoYVj99GjlRVcKc3 /QzLgh1GnP28RwHuwgLP7Q== 0000950123-97-001649.txt : 19970227 0000950123-97-001649.hdr.sgml : 19970227 ACCESSION NUMBER: 0000950123-97-001649 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970226 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: 1940 Act SEC FILE NUMBER: 811-07259 FILM NUMBER: 97543486 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 TRAVELERS FUND BD II FOR VARIABLE ANNUITIES 1 VINTAGE ANNUITY ANNUAL REPORT December 31, 1996 The Travelers Fund BD II for Variable Annuities TravelersLife and Annuity A Member of TravelersGroup[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, 1996 ASSETS: Investments in eligible funds at market value: Travelers Series Fund Inc.: Alliance Growth Portfolio, 2,918,162 shares (cost $44,405,174)............................. $ 48,966,764 Van Kampen American Capital Enterprise Portfolio, 1,343,721 shares (cost $19,453,154)...... 21,244,226 TBC Managed Income Portfolio, 309,691 shares (cost $3,335,308)............................. 3,313,698 G.T. Global Strategic Income Portfolio, 253,089 shares (cost $2,972,864)................... 3,006,700 Smith Barney High Income Portfolio, 942,925 shares (cost $11,026,143)...................... 11,164,229 Smith Barney International Equity Portfolio, 1,807,787 shares (cost $21,951,774)........... 22,705,810 Smith Barney Income and Growth Portfolio, 1,358,832 shares (cost $19,155,043).............. 20,464,013 Smith Barney Money Market Portfolio, 27,673,051 shares (cost $27,673,051).................. 27,673,051 Putnam Diversified Income Portfolio, 1,277,767 shares (cost $14,771,881)................... 14,783,770 Smith Barney Pacific Basin Portfolio, 315,107 shares (cost $3,109,988)..................... 3,163,679 MFS Total Return Portfolio, 1,915,813 shares (cost $24,158,789)............................ 25,231,256 AIM Capital Appreciation Portfolio, 3,301,416 shares (cost $34,463,713).................... 36,414,613 The Travelers Series Trust: MFS Emerging Growth Portfolio, 275,528 shares (cost $3,000,407)............................ 2,906,816 Smith Barney Series Fund: Total Return Portfolio, 1,652,878 shares (cost $23,680,295)................................ 25,999,765 ----------------- Total Investments (cost $253,157,584)..................................................... $ 267,038,390 RECEIVABLES: Dividends................................................................................... 56,333 Purchase payments and transfers from other Travelers accounts............................... 2,370,836 Other assets................................................................................. 4,851 ------------------- Total Assets............................................................................... 269,470,410 ------------------- LIABILITIES: Payable for contract surrenders and transfers to other Travelers accounts.................... 191,971 Accrued liabilities.......................................................................... 35,255 ------------------- Total Liabilities.......................................................................... 227,226 ------------------- NET ASSETS: $ 269,243,184 ===================
See Notes to Financial Statements -1- 3 THE TRAVELERS FUND BD II FOR VARIABLE ANNUITIES STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1996 INVESTMENT INCOME: Dividends.................................................................................... $ 6,107,224 EXPENSES: Insurance charges............................................................................ $ 1,333,944 Administrative charges....................................................................... 189,960 ----------------- Total expenses.............................................................................. 1,523,904 ------------------- Net investment income...................................................................... 4,583,320 ------------------- REALIZED GAIN AND CHANGE IN UNREALIZED GAIN (LOSS) ON INVESTMENTS: Realized gain from investment transactions: Proceeds from investments sold.............................................................. 36,697,606 Cost of investments sold.................................................................... 36,099,281 ----------------- Net realized gain.......................................................................... 598,325 Change in unrealized gain (loss) on investments: Unrealized loss at December 31, 1995........................................................ (125,174) Unrealized gain at December 31, 1996........................................................ 13,880,806 ----------------- Net change in unrealized gain (loss) for the year.......................................... 14,005,980 ------------------- Net realized gain and change in unrealized gain (loss).................................... 14,604,305 ------------------- Net increase in net assets resulting from operations......................................... $ 19,187,625 ===================
See Notes to Financial Statements -2- 4 THE TRAVELERS FUND BD II FOR VARIABLE ANNUITIES STATEMENT OF CHANGES IN NET ASSETS FOR THE YEAR ENDED DECEMBER 31, 1996 AND THE PERIOD NOVEMBER 8, 1995 (DATE OPERATIONS COMMENCED) TO DECEMBER 31, 1995
1996 1995 ---- ---- OPERATIONS: Net investment income........................................................................ $ 4,583,320 $ 245,834 Net realized gain (loss) from investment transactions........................................ 598,325 (509) Net change in unrealized gain (loss) on investments.......................................... 14,005,980 (125,174) ----------------- ------------------- Net increase in net assets resulting from operations........................................ 19,187,625 120,151 ----------------- ------------------- UNIT TRANSACTIONS: Participant purchase payments (applicable to 182,948,181 and 14,991,745 units, respectively).............................. 226,873,244 17,056,576 Participant transfers from other Travelers accounts (applicable to 55,121,934 and 321,920 units, respectively).................................. 65,242,361 372,855 Administrative charges (applicable to 15,382 units)................................................................ (18,946) - Contract surrenders (applicable to 1,897,753 and 1,879 units, respectively)..................................... (2,337,255) (2,206) Participant transfers to other Travelers accounts (applicable to 50,981,143 and 229,855 units, respectively).................................. (55,932,256) (260,930) Other payments to participants (applicable to 810,905 units)............................................................... (1,058,035) - ----------------- ------------------- Net increase in net assets resulting from unit transactions................................ 232,769,113 17,166,295 ----------------- ------------------- Net increase in net assets................................................................ 251,956,738 17,286,446 NET ASSETS: Beginning of period.......................................................................... 17,286,446 - ----------------- ------------------- End of period................................................................................ $ 269,243,184 $ 17,286,446 ================= ===================
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, 1996, the eligible funds available under Fund BD II are: Alliance Growth Portfolio, Van Kampen American Capital Enterprise Portfolio (formerly 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. (formerly Smith Barney/Travelers Series Fund Inc.); MFS Emerging Growth Portfolio of The Travelers Series Trust; and Total Return Portfolio of Smith Barney Series Fund. Travelers Series Fund Inc. is incorporated under Maryland law. Smith Barney Series Fund and The Travelers Series Trust are registered as Massachusetts business trusts. All eligible funds are managed by affiliates of The Travelers. 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. 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. Security transactions are accounted for on the trade date. Dividend income is recorded on the ex-dividend date. 2. INVESTMENTS Purchases and sales of investments aggregated $273,450,623 and $36,697,606, respectively, for the year ended December 31, 1996. Realized gains and losses from investment transactions are reported on an identified cost basis. The cost of investments in eligible funds was $253,157,584 at December 31, 1996. Gross unrealized appreciation for all investments at December 31, 1996 was $13,996,007. Gross unrealized depreciation for all investments at December 31, 1996 was $115,201. -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 $26,151 of contingent deferred sales charges for the year ended December 31, 1996. No deductions were taken for the period November 8, 1995 (date operations commenced) to December 31, 1995. -5- 7 NOTES TO FINANCIAL STATEMENTS - CONTINUED 4. NET CONTRACT OWNERS' EQUITY
DECEMBER 31, 1996 --------------------------------------------------- ACCUMULATION UNIT NET UNITS VALUE ASSETS ----- ------ ------ Travelers Series Fund Inc. Alliance Growth Portfolio Standard.............................................. 24,031,009 $ 1.785 $ 42,891,960 Enhanced.............................................. 3,613,086 1.772 6,403,241 Van Kampen American Capital Enterprise Portfolio Standard.............................................. 11,360,286 1.655 18,797,963 Enhanced.............................................. 1,644,330 1.643 2,701,654 TBC Managed Income Portfolio Standard.............................................. 2,635,535 1.163 3,063,848 Enhanced.............................................. 265,598 1.154 306,598 G.T. Global Strategic Income Portfolio Standard.............................................. 1,832,502 1.316 2,411,175 Enhanced.............................................. 463,308 1.306 605,312 Smith Barney High Income Portfolio Standard.............................................. 7,719,068 1.300 10,032,935 Enhanced.............................................. 970,188 1.291 1,252,088 Smith Barney International Equity Portfolio Standard.............................................. 16,854,894 1.222 20,594,877 Enhanced.............................................. 2,009,974 1.213 2,438,585 Smith Barney Income and Growth Portfolio Standard.............................................. 11,905,953 1.528 18,193,877 Enhanced.............................................. 1,606,074 1.517 2,436,913 Smith Barney Money Market Portfolio Standard.............................................. 22,961,508 1.098 25,204,164 Enhanced.............................................. 2,362,442 1.090 2,574,838 Putnam Diversified Income Portfolio Standard.............................................. 10,424,494 1.252 13,047,868 Enhanced.............................................. 1,460,865 1.243 1,815,551 Smith Barney Pacific Basin Portfolio Standard.............................................. 2,754,609 0.983 2,709,112 Enhanced.............................................. 467,106 0.977 456,150 MFS Total Return Portfolio Standard.............................................. 16,650,570 1.376 22,910,883 Enhanced.............................................. 1,810,076 1.366 2,473,038 AIM Capital Appreciation Portfolio Standard.............................................. 29,460,488 1.088 32,050,014 Enhanced.............................................. 4,246,308 1.084 4,603,683 The Travelers Series Trust MFS Emerging Growth Portfolio Standard.............................................. 2,505,629 1.005 2,518,893 Enhanced.............................................. 466,025 1.005 468,275 Smith Barney Series Fund Total Return Portfolio Standard.............................................. 14,921,227 1.550 23,130,231 Enhanced.............................................. 2,043,711 1.541 3,149,458 ----------------- Net Contract Owners' Equity............................................................... $ 269,243,184 =================
-6- 8 This page intentionally left blank. -7- 9 NOTES TO FINANCIAL STATEMENTS - CONTINUED 5. SCHEDULE OF FUND BD II OPERATIONS AND CHANGES IN NET ASSETS FOR THE YEAR ENDED DECEMBER 31, 1996 AND THE PERIOD NOVEMBER 8, 1995 (DATE OPERATIONS COMMENCED) TO DECEMBER 31, 1995
VAN KAMPEN AMERICAN CAPITAL ALLIANCE GROWTH PORTFOLIO ENTERPRISE PORTFOLIO -------------------------------- ------------------------------------- 1996 1995 1996 1995 ---- ---- ---- ---- INVESTMENT INCOME: Dividends................................................. $ 1,749,884 $ 71,580 $ 65,661 $ 38,960 ------------- ----------------- ------------------- ----------------- EXPENSES: Insurance charges......................................... 239,371 2,554 107,644 1,306 Administrative fees....................................... 33,611 275 15,377 135 ------------- ----------------- ------------------- ----------------- Net investment income (loss)........................ 1,476,902 68,751 (57,360) 37,519 ------------- ----------------- ------------------- ----------------- REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED GAIN (LOSS) ON INVESTMENTS: Realized gain (loss) from investment transactions: Proceeds from investments sold........................ 115,510 55,534 179,400 155 Cost of investments sold.............................. 97,909 56,573 156,110 158 ------------- ----------------- ------------------- ----------------- Net realized gain (loss)............................ 17,601 (1,039) 23,290 (3) ------------- ----------------- ------------------- ----------------- Change in unrealized gain (loss) on investments: Unrealized gain (loss) beginning of period............ (42,615) - (18,558) - Unrealized gain (loss) end of period.................. 4,561,590 (42,615) 1,791,072 (18,558) ------------- ----------------- ------------------- ----------------- Net change in unrealized gain (loss) for the period. 4,604,205 (42,615) 1,809,630 (18,558) ------------- ----------------- ------------------- ----------------- Net increase (decrease) in net assets resulting from operations........................... 6,098,708 25,097 1,775,560 18,958 ------------- ----------------- ------------------- ----------------- UNIT TRANSACTIONS: Participant purchase payments............................. 34,649,407 2,815,148 16,501,913 1,430,843 Participant transfers from other Travelers accounts....... 7,299,315 67,993 2,552,870 37,768 Administrative charges.................................... (3,897) - (1,313) - Contract surrenders....................................... (387,974) (503) (141,838) - Participant transfers to other Travelers accounts......... (1,038,182) (82,106) (587,799) - Other payments to participants............................ (147,805) - (87,345) - ------------- ----------------- ------------------- ----------------- Net increase in net assets resulting from unit transactions.............................. 40,370,864 2,800,532 18,236,488 1,468,611 ------------- ----------------- ------------------- ----------------- Net increase in net assets.......................... 46,469,572 2,825,629 20,012,048 1,487,569 NET ASSETS: Beginning of period................................... 2,825,629 - 1,487,569 - ------------- ----------------- ------------------- ----------------- End of period......................................... $ 49,295,201 $ 2,825,629 $ 21,499,617 $ 1,487,569 ============= ================= =================== =================
TBC MANAGED INCOME PORTFOLIO ------------------------------------ 1996 1995 ---- ---- INVESTMENT INCOME: Dividends................................................. $ 144,329 $ 18,181 ----------------- ------------------ EXPENSES: Insurance charges......................................... 20,601 252 Administrative fees....................................... 2,972 35 ----------------- ------------------ Net investment income (loss)........................ 120,756 17,894 ----------------- ------------------ REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED GAIN (LOSS) ON INVESTMENTS: Realized gain (loss) from investment transactions: Proceeds from investments sold........................ 443,906 60 Cost of investments sold.............................. 463,432 60 ----------------- ------------------ Net realized gain (loss)............................ (19,526) - ----------------- ------------------ Change in unrealized gain (loss) on investments: Unrealized gain (loss) beginning of period............ (13,530) - Unrealized gain (loss) end of period.................. (21,610) (13,530) ----------------- ------------------ Net change in unrealized gain (loss) for the period. (8,080) (13,530) ----------------- ------------------ Net increase (decrease) in net assets resulting from operations........................... 93,150 4,364 ----------------- ------------------ UNIT TRANSACTIONS: Participant purchase payments............................. 3,072,427 275,352 Participant transfers from other Travelers accounts....... 349,692 80,000 Administrative charges.................................... (212) - Contract surrenders....................................... (12,989) - Participant transfers to other Travelers accounts......... (491,338) - Other payments to participants............................ - - ----------------- ------------------ Net increase in net assets resulting from unit transactions............................. 2,917,580 355,352 ----------------- ------------------ Net increase in net assets.......................... 3,010,730 359,716 NET ASSETS: Beginning of period................................... 359,716 - ----------------- ------------------ End of period......................................... $ 3,370,446 $ 359,716 ================= ==================
-8- 10 NOTES TO FINANCIAL STATEMENTS - CONTINUED
G.T. GLOBAL STRATEGIC SMITH BARNEY INCOME PORTFOLIO HIGH INCOME PORTFOLIO --------------------------------- ----------------------------- 1996 1995 1996 1995 ---- ---- ---- ---- INVESTMENT INCOME: Dividends................................................. $ 239,292 $ 4,427 $ 625,383 $ 27,093 ---------------- ---------------- ------------- --------------- EXPENSES: Insurance charges......................................... 14,195 102 54,325 283 Administrative fees....................................... 1,970 12 7,674 39 ---------------- ---------------- ------------- --------------- Net investment income (loss)........................ 223,127 4,313 563,384 26,771 ---------------- ---------------- ------------- --------------- REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED GAIN (LOSS) ON INVESTMENTS: Realized gain (loss) from investment transactions: Proceeds from investments sold........................ 12,114 64 118,732 142 Cost of investments sold.............................. 11,608 63 118,637 144 ---------------- ---------------- ------------- --------------- Net realized gain (loss)............................ 506 1 95 (2) ---------------- ---------------- ------------- --------------- Change in unrealized gain (loss) on investments: Unrealized gain (loss) beginning of period............ (1,453) - (21,008) - Unrealized gain (loss) end of period.................. 33,836 (1,453) 138,086 (21,008) ---------------- ---------------- ------------- --------------- Net change in unrealized gain (loss) for the period. 35,289 (1,453) 159,094 (21,008) ---------------- ---------------- ------------- --------------- Net increase (decrease) in net assets resulting from operations........................... 258,922 2,861 722,573 5,761 ---------------- ---------------- ------------- --------------- UNIT TRANSACTIONS: Participant purchase payments............................. 2,320,799 122,591 9,279,640 659,877 Participant transfers from other Travelers accounts....... 331,095 - 1,222,919 - Administrative charges.................................... (164) - (580) - Contract surrenders....................................... (13,081) - (76,933) - Participant transfers to other Travelers accounts......... (6,536) - (462,926) - Other payments to participants............................ - - (65,308) - ---------------- ---------------- ------------- --------------- Net increase in net assets resulting from unit transactions.............................. 2,632,113 122,591 9,896,812 659,877 ---------------- ---------------- ------------- --------------- Net increase in net assets.......................... 2,891,035 125,452 10,619,385 665,638 NET ASSETS: Beginning of period................................... 125,452 - 665,638 - ---------------- ---------------- ------------- --------------- End of period......................................... $ 3,016,487 $ 125,452 $ 11,285,023 $ 665,638 ================ ================ ============= ===============
SMITH BARNEY SMITH BARNEY INCOME INTERNATIONAL EQUITY PORTFOLIO AND GROWTH PORTFOLIO ------------------------------- -------------------------------- 1996 1995 1996 1995 ---- ---- ---- ---- INVESTMENT INCOME: Dividends................................................. $ 22,493 $ 836 $ 455,102 $ 15,676 --------------- --------------- -------------- ----------------- EXPENSES: Insurance charges......................................... 107,608 751 97,155 759 Administrative fees....................................... 16,122 83 13,920 98 --------------- --------------- -------------- ----------------- Net investment income (loss)........................ (101,237) 2 344,027 14,819 --------------- --------------- -------------- ----------------- REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED GAIN (LOSS) ON INVESTMENTS: Realized gain (loss) from investment transactions: Proceeds from investments sold........................ 4,446,920 35,908 82,485 396 Cost of investments sold.............................. 3,960,097 35,387 69,287 385 --------------- --------------- -------------- ----------------- Net realized gain (loss)............................ 486,823 521 13,198 11 --------------- --------------- -------------- ----------------- Change in unrealized gain (loss) on investments: Unrealized gain (loss) beginning of period............ 20,347 - 1,435 - Unrealized gain (loss) end of period.................. 754,036 20,347 1,308,970 1,435 --------------- --------------- -------------- ----------------- Net change in unrealized gain (loss) for the period. 733,689 20,347 1,307,535 1,435 --------------- --------------- -------------- ----------------- Net increase (decrease) in net assets resulting from operations........................... 1,119,275 20,870 1,664,760 16,265 --------------- --------------- -------------- ----------------- UNIT TRANSACTIONS: Participant purchase payments............................. 17,392,360 760,996 15,205,943 911,643 Participant transfers from other Travelers accounts....... 10,287,941 12,389 3,567,741 29,913 Administrative charges.................................... (1,790) - (1,280) - Contract surrenders....................................... (168,200) (75) (178,977) - Participant transfers to other Travelers accounts......... (6,285,736) - (444,378) - Other payments to participants............................ (104,568) - (140,840) - --------------- --------------- -------------- ----------------- Net increase in net assets resulting from unit transactions.............................. 21,120,007 773,310 18,008,209 941,556 --------------- --------------- -------------- ----------------- Net increase in net assets.......................... 22,239,282 794,180 19,672,969 957,821 NET ASSETS: Beginning of period................................... 794,180 - 957,821 - --------------- --------------- -------------- ----------------- End of period......................................... $ 23,033,462 $ 794,180 $ 20,630,790 $ 957,821 =============== =============== ============== =================
-9- 11 NOTES TO FINANCIAL STATEMENTS - CONTINUED 5. SCHEDULE OF FUND BD II OPERATIONS AND CHANGES IN NET ASSETS FOR THE YEAR ENDED DECEMBER 31, 1996 AND THE PERIOD NOVEMBER 8, 1995 (DATE OPERATIONS COMMENCED) TO DECEMBER 31, 1995 (CONTINUED)
SMITH BARNEY PUTNAM MONEY MARKET PORTFOLIO DIVERSIFIED INCOME PORTFOLIO ----------------------------- ----------------------------- 1996 1995 1996 1995 ---- ---- ---- ---- INVESTMENT INCOME: Dividends.................................................. $ 734,489 $ 8,627 $ 775,071 $ 44,601 ------------- ------------- ------------- ------------- EXPENSES: Insurance charges.......................................... 161,431 2,031 77,461 704 Administrative fees........................................ 22,917 275 11,041 100 ------------- ------------- ------------- ------------- Net investment income (loss)......................... 550,141 6,321 686,569 43,797 ------------- ------------- ------------- ------------- REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED GAIN (LOSS) ON INVESTMENTS: Realized gain (loss) from investment transactions: Proceeds from investments sold......................... 22,760,375 44,352 361,079 21 Cost of investments sold............................... 22,760,375 44,352 356,390 21 ------------- ------------- ------------- ------------- Net realized gain (loss)............................. - - 4,689 - ------------- ------------- ------------- ------------- Change in unrealized gain (loss) on investments: Unrealized gain (loss) beginning of period............. - - (29,630) - Unrealized gain (loss) end of period................... - - 11,889 (29,630) ------------- ------------- ------------- ------------- Net change in unrealized gain (loss) for the period.. - - 41,519 (29,630) ------------- ------------- ------------- ------------- Net increase (decrease) in net assets resulting from operations............................ 550,141 6,321 732,777 14,167 ------------- ------------- ------------- ------------- UNIT TRANSACTIONS: Participant purchase payments.............................. 44,038,947 3,527,872 12,719,514 1,086,983 Participant transfers from other Travelers accounts........ 16,886,657 8,446 1,427,681 15,623 Administrative charges..................................... (945) - (1,014) - Contract surrenders........................................ (461,230) - (283,811) - Participant transfers to other Travelers accounts.......... (36,332,462) (166,900) (827,078) (5,584) Other payments to participants............................. (277,845) - (15,839) - ------------- ------------- ------------- ------------- Net increase in net assets resulting from unit transactions............................... 23,853,122 3,369,418 13,019,453 1,097,022 ------------- ------------- ------------- ------------- Net increase in net assets........................... 24,403,263 3,375,739 13,752,230 1,111,189 NET ASSETS: Beginning of period.................................... 3,375,739 - 1,111,189 - ------------- ------------- ------------- ------------- End of period.......................................... $ 27,779,002 $ 3,375,739 $ 14,863,419 $ 1,111,189 ============= ============= ============= =============
SMITH BARNEY PACIFIC BASIN PORTFOLIO ----------------------------- 1996 1995 ---- ---- INVESTMENT INCOME: Dividends.................................................. $ 19,513 $ 149 ------------- ------------- EXPENSES: Insurance charges.......................................... 17,947 48 Administrative fees........................................ 2,375 6 ------------- ------------- Net investment income (loss)......................... (809) 95 ------------- ------------- REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED GAIN (LOSS) ON INVESTMENTS: Realized gain (loss) from investment transactions: Proceeds from investments sold......................... 7,758,018 19 Cost of investments sold............................... 7,712,954 18 ------------- ------------- Net realized gain (loss)............................. 45,064 1 ------------- ------------- Change in unrealized gain (loss) on investments: Unrealized gain (loss) beginning of period............. 1,836 - Unrealized gain (loss) end of period................... 53,691 1,836 ------------- ------------- Net change in unrealized gain (loss) for the period.. 51,855 1,836 ------------- ------------- Net increase (decrease) in net assets resulting from operations............................ 96,110 1,932 ------------- ------------- UNIT TRANSACTIONS: Participant purchase payments.............................. 2,993,075 49,035 Participant transfers from other Travelers accounts........ 8,020,835 673 Administrative charges..................................... (370) - Contract surrenders........................................ (11,727) - Participant transfers to other Travelers accounts.......... (7,984,301) - Other payments to participants............................. - - ------------- ------------- Net increase in net assets resulting from unit transactions............................... 3,017,512 49,708 ------------- ------------- Net increase in net assets........................... 3,113,622 51,640 NET ASSETS: Beginning of period.................................... 51,640 - ------------- ------------- End of period.......................................... $ 3,165,262 $ 51,640 ============= =============
-10- 12 NOTES TO FINANCIAL STATEMENTS - CONTINUED
AIM CAPITAL MFS TOTAL RETURN PORTFOLIO APPRECIATION PORTFOLIO ----------------------------- ----------------------------- 1996 1995 1996 1995 ---- ---- ---- ---- INVESTMENT INCOME: Dividends.................................................. $ 832,634 $ 26,481 $ 35,100 $ 3,038 ------------- ------------- ------------- ------------- EXPENSES: Insurance charges.......................................... 121,785 857 197,164 4,240 Administrative fees........................................ 17,434 127 27,944 313 ------------- ------------- ------------- ------------- Net investment income (loss)......................... 693,415 25,497 (190,008) (1,515) ------------- ------------- ------------- ------------- REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED GAIN (LOSS) ON INVESTMENTS: Realized gain (loss) from investment transactions: Proceeds from investments sold......................... 122,229 62 189,761 90 Cost of investments sold............................... 113,231 61 187,142 93 ------------- ------------- ------------- ------------- Net realized gain (loss)............................. 8,998 1 2,619 (3) ------------- ------------- ------------- ------------- Change in unrealized gain (loss) on investments: Unrealized gain (loss) beginning of period............. 140 - (25,475) - Unrealized gain (loss) end of period................... 1,072,467 140 1,950,900 (25,475) ------------- ------------- ------------- ------------- Net change in unrealized gain (loss) for the period.. 1,072,327 140 1,976,375 (25,475) ------------- ------------- ------------- ------------- Net increase (decrease) in net assets resulting from operations............................ 1,774,740 25,638 1,788,986 (26,993) ------------- ------------- ------------- ------------- UNIT TRANSACTIONS: Participant purchase payments.............................. 19,949,329 1,186,910 27,035,886 3,256,149 Participant transfers from other Travelers accounts........ 3,146,849 22,680 5,567,585 72,615 Administrative charges..................................... (1,570) - (4,115) - Contract surrenders........................................ (144,598) (627) (343,921) (500) Participant transfers to other Travelers accounts.......... (517,750) (2,120) (636,435) (2,115) Other payments to participants............................. (55,560) - (53,445) - ------------- ------------- ------------- ------------- Net increase in net assets resulting from unit transactions............................... 22,376,700 1,206,843 31,565,555 3,326,149 ------------- ------------- ------------- ------------- Net increase in net assets........................... 24,151,440 1,232,481 33,354,541 3,299,156 NET ASSETS: Beginning of period.................................... 1,232,481 - 3,299,156 - ------------- ------------- ------------- ------------- End of period.......................................... $ 25,383,921 $ 1,232,481 $ 36,653,697 $ 3,299,156 ============= ============= ============= =============
MFS EMERGING GROWTH PORTFOLIO TOTAL RETURN PORTFOLIO ----------------------------- ----------------------------- 1996 1995 1996 1995 ---- ---- ---- ---- INVESTMENT INCOME: Dividends.................................................. $ 13,776 $ - $ 394,497 $ 2,394 ------------- ------------- ------------- ------------- EXPENSES: Insurance charges.......................................... 2,585 - 114,672 733 Administrative fees........................................ 351 - 16,252 91 ------------- ------------- ------------- ------------- Net investment income (loss)......................... 10,840 - 263,573 1,570 ------------- ------------- ------------- ------------- REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED GAIN (LOSS) ON INVESTMENTS: Realized gain (loss) from investment transactions: Proceeds from investments sold......................... - - 107,077 135 Cost of investments sold............................... - - 92,109 132 ------------- ------------- ------------- ------------- Net realized gain (loss)............................. - - 14,968 3 ------------- ------------- ------------- ------------- Change in unrealized gain (loss) on investments: Unrealized gain (loss) beginning of period............. - - 3,337 - Unrealized gain (loss) end of period................... (93,591) - 2,319,470 3,337 ------------- ------------- ------------- ------------- Net change in unrealized gain (loss) for the period.. (93,591) - 2,316,133 3,337 ------------- ------------- ------------- ------------- Net increase (decrease) in net assets resulting from operations............................ (82,751) - 2,594,674 4,910 ------------- ------------- ------------- ------------- UNIT TRANSACTIONS: Participant purchase payments.............................. 2,458,877 - 19,255,127 973,177 Participant transfers from other Travelers accounts........ 622,001 - 3,959,180 24,755 Administrative charges..................................... - - (1,696) - Contract surrenders........................................ (647) - (111,329) (501) Participant transfers to other Travelers accounts.......... (10,312) - (307,023) (2,105) Other payments to participants............................. - - (109,480) - ------------- ------------- ------------- ------------- Net increase in net assets resulting from unit transactions............................... 3,069,919 - 22,684,779 995,326 ------------- ------------- ------------- ------------- Net increase in net assets........................... 2,987,168 - 25,279,453 1,000,236 NET ASSETS: Beginning of period.................................... - - 1,000,236 - ------------- ------------- ------------- ------------- End of period.......................................... $ 2,987,168 $ - $ 26,279,689 $ 1,000,236 ============= ============= ============= =============
-11- 13 NOTES TO FINANCIAL STATEMENTS - CONTINUED 5. SCHEDULE OF FUND BD II OPERATIONS AND CHANGES IN NET ASSETS FOR THE YEAR ENDED DECEMBER 31, 1996 AND THE PERIOD NOVEMBER 8, 1995 (DATE OPERATIONS COMMENCED) TO DECEMBER 31, 1995 (CONTINUED)
COMBINED ---------------------------------- 1996 1995 ---- ---- INVESTMENT INCOME: Dividends................................................. $ 6,107,224 $ 262,043 ------------------ --------------- EXPENSES: Insurance charges......................................... 1,333,944 14,620 Administrative fees....................................... 189,960 1,589 ------------------ --------------- Net investment income (loss)........................ 4,583,320 245,834 ------------------ --------------- REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED GAIN (LOSS) ON INVESTMENTS: Realized gain (loss) from investment transactions: Proceeds from investments sold........................ 36,697,606 136,938 Cost of investments sold.............................. 36,099,281 137,447 ------------------ --------------- Net realized gain (loss)............................ 598,325 (509) ------------------ --------------- Change in unrealized gain (loss) on investments: Unrealized gain (loss) beginning of period............ (125,174) - Unrealized gain (loss) end of period.................. 13,880,806 (125,174) ------------------ --------------- Net change in unrealized gain (loss) for the period. 14,005,980 (125,174) ------------------ --------------- Net increase (decrease) in net assets resulting from operations........................... 19,187,625 120,151 ------------------ --------------- UNIT TRANSACTIONS: Participant purchase payments............................. 226,873,244 17,056,576 Participant transfers from other Travelers accounts....... 65,242,361 372,855 Administrative charges.................................... (18,946) - Contract surrenders....................................... (2,337,255) (2,206) Participant transfers to other Travelers accounts......... (55,932,256) (260,930) Other payments to participants............................ (1,058,035) - ------------------ --------------- Net increase in net assets resulting from unit transacions............................... 232,769,113 17,166,295 ------------------ --------------- Net increase in net assets.......................... 251,956,738 17,286,446 NET ASSETS: Beginning of period................................... 17,286,446 - ------------------ --------------- End of period......................................... $ 269,243,184 $ 17,286,446 ================== ===============
-12- 14 NOTES TO FINANCIAL STATEMENTS - CONTINUED 6. SCHEDULE OF ACCUMULATION UNITS FOR FUND BD II FOR THE YEAR ENDED DECEMBER 31, 1996 AND THE PERIOD NOVEMBER 8, 1995 (DATE OPERATIONS COMMENCED) TO DECEMBER 31, 1995
VAN KAMPEN AMERICAN CAPITAL ALLIANCE GROWTH PORTFOLIO ENTERPRISE PORTFOLIO --------------------------------- ----------------------------------- 1996 1995 1996 1995 ---- ---- ---- ---- Accumulation units beginning of period................ 2,026,405 - 1,093,664 - Accumulation units purchased and transferred from other Travelers accounts.......... 26,601,698 2,088,195 12,436,976 1,093,664 Accumulation units redeemed and transferred to other Travelers accounts............ (984,008) (61,790) (526,024) - -------------- --------------- --------------- -------------- Accumulation units end of period...................... 27,644,095 2,026,405 13,004,616 1,093,664 ============== =============== =============== ==============
TBC MANAGED INCOME PORTFOLIO ------------------------------------ 1996 1995 ---- ---- Accumulation units beginning of period................ 315,445 - Accumulation units purchased and transferred from other Travelers accounts.......... 3,034,567 315,445 Accumulation units redeemed and transferred to other Travelers accounts............ (448,879) - ---------------- ----------------- Accumulation units end of period...................... 2,901,133 315,445 ================ =================
G.T. GLOBAL STRATEGIC SMITH BARNEY INCOME PORTFOLIO HIGH INCOME PORTFOLIO --------------------------------- ----------------------------------- 1996 1995 1996 1995 ---- ---- ---- ---- Accumulation units beginning of period................ 112,291 - 574,114 - Accumulation units purchased and transferred from other Travelers accounts.......... 2,200,023 112,291 8,612,189 574,114 Accumulation units redeemed and transferred to other Travelers accounts............ (16,504) - (497,047) - -------------- --------------- --------------- -------------- Accumulation units end of period...................... 2,295,810 112,291 8,689,256 574,114 ============== =============== =============== ==============
SMITH BARNEY INTERNATIONAL EQUITY PORTFOLIO ------------------------------------- 1996 1995 ---- ---- Accumulation units beginning of period................ 757,069 - Accumulation units purchased and transferred from other Travelers accounts.......... 23,544,001 757,142 Accumulation units redeemed and transferred to other Travelers accounts............ (5,436,202) (73) ---------------- ----------------- Accumulation units end of period...................... 18,864,868 757,069 ================ =================
SMITH BARNEY INCOME SMITH BARNEY AND GROWTH PORTFOLIO MONEY MARKET PORTFOLIO --------------------------------- ----------------------------------- 1996 1995 1996 1995 ---- ---- ---- ---- Accumulation units beginning of period................ 742,670 - 3,193,779 - Accumulation units purchased and transferred from other Travelers accounts.......... 13,297,626 742,670 56,287,533 3,351,749 Accumulation units redeemed and transferred to other Travelers accounts............ (528,269) - (34,157,362) (157,970) -------------- --------------- --------------- -------------- Accumulation units end of period...................... 13,512,027 742,670 25,323,950 3,193,779 ============== =============== =============== ==============
PUTNAM DIVERSIFIED INCOME PORTFOLIO ------------------------------------- 1996 1995 ---- ---- Accumulation units beginning of period................ 950,243 - Accumulation units purchased and transferred from other Travelers accounts.......... 11,872,273 955,065 Accumulation units redeemed and transferred to other Travelers accounts............ (937,157) (4,822) ---------------- ----------------- Accumulation units end of period...................... 11,885,359 950,243 ================ =================
-13- 15 NOTES TO FINANCIAL STATEMENTS - CONTINUED 6. SCHEDULE OF ACCUMULATION UNITS FOR FUND BD II FOR THE YEAR ENDED DECEMBER 31, 1996 AND THE PERIOD NOVEMBER 8, 1995 (DATE OPERATIONS COMMENCED) TO DECEMBER 31, 1995 (CONTINUED)
SMITH BARNEY MFS PACIFIC BASIN PORTFOLIO TOTAL RETURN PORTFOLIO ----------------------------------- --------------------------------- 1996 1995 1996 1995 ---- ---- ---- ---- Accumulation units beginning of period............ 56,822 - 1,014,097 - Accumulation units purchased and transferred from other Travelers accounts...... 11,406,814 56,822 17,996,071 1,016,359 Accumulation units redeemed and transferred to other Travelers accounts........ (8,241,921) - (549,522) (2,262) --------------- ---------------- ---------------- ------------- Accumulation units end of period.................. 3,221,715 56,822 18,460,646 1,014,097 =============== ================ ================ =============
AIM CAPITAL APPRECIATION PORTFOLIO -------------------------------------- 1996 1995 ---- ---- Accumulation units beginning of period............ 3,444,998 - Accumulation units purchased and transferred from other Travelers accounts...... 31,258,008 3,447,731 Accumulation units redeemed and transferred to other Travelers accounts........ (996,210) (2,733) -------------- ------------------ Accumulation units end of period.................. 33,706,796 3,444,998 ============== ===================
MFS EMERGING TOTAL RETURN GROWTH PORTFOLIO PORTFOLIO ----------------------------------- --------------------------------- 1996 1995 1996 1995 ---- ---- ---- ---- Accumulation units beginning of period............ - - 800,334 - Accumulation units purchased and transferred from other Travelers accounts...... 2,982,336 - 16,540,000 802,418 Accumulation units redeemed and transferred to other Travelers accounts........ (10,682) - (375,396) (2,084) --------------- ---------------- ---------------- -------------- Accumulation units end of period.................. 2,971,654 - 16,964,938 800,334 =============== ================ ================ ==============
-14- 16 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, 1996, and the related statement of operations for the year then ended and the statement of changes in net assets for each of the applicable periods ended December 31, 1996 and 1995. 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 audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of shares owned as of December 31, 1996, 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, 1996, the results of its operations for the year then ended, and the changes in its net assets for each of the applicable periods ended December 31, 1996 and 1995, in conformity with generally accepted accounting principles. COOPERS & LYBRAND L.L.P. Hartford, Connecticut February 7, 1997 -15- 17 This page intentionally left blank. 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) (12-96) Printed in U.S.A. -----END PRIVACY-ENHANCED MESSAGE-----