N-CSR 1 dncsr.txt S/B TRAVELERS SERIES FUND INC UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-8372 Travelers Series Fund Inc. (Exact name of registrant as specified in charter) 125 Broad Street, New York, NY 10004 (Address of principal executive offices) (Zip code) Christina T. Sydor, Esq. 300 First Stamford Place Stamford, CT 06902 (Name and address of agent for service) Registrant's telephone number, including area code: (800) 451-2010 Date of fiscal year end: October 31 Date of reporting period: April 30, 2003 ITEM 1. REPORT TO STOCKHOLDERS. The Semi-Annual Report to Stockholders is filed herewith. TRAVELERS SERIES FUND INC. AIM CAPITAL APPRECIATION PORTFOLIO SMITH BARNEY LARGE CAPITALIZATION GROWTH PORTFOLIO SEMI-ANNUAL REPORT | APRIL 30, 2003 NOT FDIC INSURED . NOT BANK GUARANTEED . MAY LOSE VALUE WHAT'S INSIDE Letter From the Chairman......................................... 1 Schedules of Investments......................................... 2 Statements of Assets and Liabilities............................. 8 Statements of Operations......................................... 9 Statements of Changes in Net Assets.............................. 10 Notes to Financial Statements.................................... 12 Financial Highlights............................................. 18
LETTER FROM THE CHAIRMAN [PHOTO] R. JAY GERKEN Chairman, President and Chief Executive Officer Dear Shareholder, The philosopher Bertrand Russell famously remarked that, "Change is one thing, progress is another." You will notice in the following pages that we have begun to implement some changes to your shareholder report and we will be reflecting other changes in future reports. Our aim is to make meaningful improvements in reporting on the management of your Fund and its performance, not just to enact change for change's sake. Please bear with us during this transition period. I invite you to read this report in full. Please take the opportunity to talk to your financial adviser about this report or any other questions or concerns you have about your Fund and your financial future. As always, thank you for entrusting your assets to us. We look forward to helping you continue to meet your financial goals. Sincerely, /s/ R. Jay Gerken R. Jay Gerken Chairman, President and Chief Executive Officer May 27, 2003 1 Travelers Series Fund Inc. | 2003 Semi-Annual Report to Shareholders SCHEDULES OF INVESTMENTS (UNAUDITED) APRIL 30, 2003 AIM CAPITAL APPRECIATION PORTFOLIO SHARES SECURITY VALUE --------------------------------------------------------------------------- COMMON STOCK -- 95.3% Aerospace/Defense -- 3.2% 67,700 Lockheed Martin Corp. $ 3,388,385 18,900 Northrop Grumman Corp. 1,662,255 ------------------------------------------------------------------------- 5,050,640 ------------------------------------------------------------------------- Broadcasting and Cable TV -- 2.0% 44,400 Clear Channel Communications, Inc.+ 1,736,484 16,800 Hispanic Broadcasting Corp.+ 430,920 33,700 Univision Communications Inc., Class A Shares+++ 1,020,436 ------------------------------------------------------------------------- 3,187,840 ------------------------------------------------------------------------- Business Services -- 3.1% 67,700 Lamar Advertising Co., Class A Shares+ 2,431,784 28,200 Moody's Corp. 1,361,778 67,700 Robert Half International Inc.+ 1,102,156 ------------------------------------------------------------------------- 4,895,718 ------------------------------------------------------------------------- Communications Services -- 1.2% 46,200 Nextel Communications, Inc.+ 683,298 617,100 Vodafone Group PLC 1,219,047 ------------------------------------------------------------------------- 1,902,345 ------------------------------------------------------------------------- Energy -- 4.8% 11,865 Apache Corp. 679,271 25,800 BJ Services Co.+ 941,958 15,600 Devon Energy Corp. 737,100 33,400 ENSCO International Inc.++ 848,360 20,700 Exxon Mobil Corp. 728,640 22,500 Nabors Industries, Ltd.+ 882,000 22,400 Noble Corp.+ 693,280 20,200 Smith International, Inc.+ 718,312 28,100 Transocean Inc.+ 535,305 16,800 Weatherford International Ltd.+ 675,864 ------------------------------------------------------------------------- 7,440,090 ------------------------------------------------------------------------- Financial -- 11.6% 9,200 Aetna Inc. 458,160 24,200 AFLAC Inc. 791,582 39,500 American Express Co. 1,495,470 33,600 American International Group, Inc. 1,947,120 11,400 Bank of America Corp. 844,170 11,400 Fannie Mae 825,246 11,300 Freddie Mac 654,270 24,400 The Goldman Sachs Group, Inc. 1,851,960 44,800 Merrill Lynch & Co., Inc. 1,839,040
See Notes to Financial Statements. 2 Travelers Series Fund Inc. | 2003 Semi-Annual Report to Shareholders SCHEDULES OF INVESTMENTS (UNAUDITED) (CONTINUED) APRIL 30, 2003 AIM CAPITAL APPRECIATION PORTFOLIO
SHARES SECURITY VALUE -------------------------------------------------------------------------- Financial -- 11.6% (continued) 38,300 Morgan Stanley $ 1,713,925 1,100 New York Community Bancorp, Inc. 38,192 11,500 SLM Corp. 1,288,000 14,800 UnitedHealth Group, Inc.+ 1,363,524 28,500 Washington Mutual, Inc. 1,125,750 18,400 WellPoint Health Networks Inc.+ 1,397,296 11,200 Wells Fargo & Co. 540,512 -------------------------------------------------------------------------- 18,174,217 -------------------------------------------------------------------------- Food and Beverage -- 1.0% 17,300 General Mills, Inc. 780,403 28,100 Sysco Corp. 807,313 -------------------------------------------------------------------------- 1,587,716 -------------------------------------------------------------------------- Healthcare -- 18.5% 24,100 AdvancePCS+++ 724,446 6,400 Allergan, Inc. 449,600 44,900 Amgen Inc.+ 2,752,819 85,100 Biomet, Inc. 2,592,146 18,800 Boston Scientific Corp.+ 809,340 23,850 Cardinal Health, Inc. 1,318,428 19,400 Forest Laboratories, Inc.+ 1,003,368 15,400 Genzyme Corp. -- General Division+ 620,312 20,900 Gilead Sciences, Inc.+ 964,326 37,500 Health Management Associates, Inc., Class A Shares 639,750 33,500 IDEC Pharmaceuticals Corp.+++ 1,097,125 16,000 Johnson & Johnson 901,760 44,200 Medicis Pharmaceutical Corp., Class A Shares+++ 2,547,688 46,100 Medtronic, Inc. 2,200,814 130,600 Pfizer Inc. 4,015,950 27,100 St. Jude Medical, Inc.+ 1,421,666 50,400 Teva Pharmaceutical Industries Ltd., Sponsored ADR 2,353,680 44,600 Wyeth 1,941,438 13,000 Zimmer Holdings, Inc.+ 609,700 -------------------------------------------------------------------------- 28,964,356 -------------------------------------------------------------------------- Hotels/Motels -- 0.8% 44,400 MGM MIRAGE+ 1,261,848 -------------------------------------------------------------------------- Leisure -- 2.8% 50,800 Harley Davidson, Inc. 2,257,552 11,000 Pixar, Inc.+++ 642,290 33,600 Viacom Inc., Class B Shares+ 1,458,576 -------------------------------------------------------------------------- 4,358,418 --------------------------------------------------------------------------
See Notes to Financial Statements. 3 Travelers Series Fund Inc. | 2003 Semi-Annual Report to Shareholders SCHEDULES OF INVESTMENTS (UNAUDITED) (CONTINUED) APRIL 30, 2003 AIM CAPITAL APPRECIATION PORTFOLIO
SHARES SECURITY VALUE ----------------------------------------------------------------- Personal and Household Products -- 2.1% 16,900 The Clorox Co. $ 764,218 28,100 The Gillette Co. 855,645 18,400 The Procter & Gamble Co. 1,653,240 ----------------------------------------------------------------- 3,273,103 ----------------------------------------------------------------- Printing and Publishing -- 0.6% 11,200 Gannett Co., Inc. 848,064 ----------------------------------------------------------------- Restaurants -- 2.9% 59,600 Brinker International, Inc.+ 1,892,300 29,900 Outback Steakhouse, Inc. 1,068,626 15,700 P.F. Chang's China Bistro, Inc.+++ 657,830 29,800 Wendy's International, Inc. 865,392 ----------------------------------------------------------------- 4,484,148 ----------------------------------------------------------------- Retail -- 13.4% 21,800 Abercrombie & Fitch Co., Class A Shares+ 716,784 52,200 Bed Bath & Beyond Inc.+ 2,062,422 90,700 Caremark Rx, Inc.+ 1,805,837 61,700 CDW Computer Centers, Inc.+++ 2,630,888 7,500 eBay Inc.+ 695,775 34,300 Family Dollar Stores, Inc. 1,172,717 135,000 The Gap, Inc. 2,245,050 13,400 Kohl's Corp.+ 761,120 33,300 Lowe's Cos., Inc. 1,461,537 16,500 Nike Inc., Class B Shares 883,245 10,200 Ross Stores, Inc. 386,580 49,800 Staples, Inc.+ 948,192 67,700 The TJX Cos., Inc. 1,303,225 44,900 Wal-Mart Stores, Inc. 2,528,768 45,100 Walgreen Co. 1,391,786 ----------------------------------------------------------------- 20,993,926 ----------------------------------------------------------------- Technology -- 26.0% 66,500 Analog Devices, Inc.+ 2,202,480 111,000 Applied Materials, Inc.+ 1,620,600 180,500 Cisco Systems, Inc.+ 2,714,720 43,600 Citrix Systems, Inc.+ 826,656 11,200 Danaher Corp. 772,576 84,400 Dell Computer Corp.+ 2,440,004 19,300 Electronic Arts Inc.+ 1,143,911 116,500 EMC Corp.+ 1,058,985 100,800 Fiserv, Inc.+ 2,967,552 67,700 Intel Corp. 1,245,680 33,400 Intuit Inc.+ 1,295,252
See Notes to Financial Statements. 4 Travelers Series Fund Inc. | 2003 Semi-Annual Report to Shareholders SCHEDULES OF INVESTMENTS (UNAUDITED) (CONTINUED) APRIL 30, 2003 AIM CAPITAL APPRECIATION PORTFOLIO
SHARES SECURITY VALUE ------------------------------------------------------------------------------------------------- Technology -- 26.0% (continued) 39,000 KLA-Tencor Corp.+++ $ 1,599,000 41,100 L-3 Communications Holdings, Inc.+++ 1,824,840 90,200 Lam Research Corp.+ 1,310,606 44,600 Linear Technology Corp. 1,537,362 38,900 Maxim Integrated Products, Inc. 1,528,381 18,800 Mercury Interactive Corp.+++ 638,072 113,843 Microchip Technology Inc. 2,366,796 213,200 Microsoft Corp. 5,451,524 34,000 Molex Inc. 793,560 29,600 Nokia Oyj 491,395 280,000 Nortel Networks Corp.+ 722,400 22,400 Novellus Systems, Inc.+ 628,096 51,800 SunGard Data Systems, Inc.+ 1,113,700 50,000 Taiwan Semiconductor Manufacturing Co. Ltd.+ 418,500 66,800 Teradyne, Inc.+ 774,880 33,000 VERITAS Software Corp. 726,330 35,500 Vishay Intertechnology, Inc.+ 443,750 ------------------------------------------------------------------------------------------------- 40,657,608 ------------------------------------------------------------------------------------------------- Transportation -- 1.3% 9,100 FedEx Corp. 544,908 89,200 Southwest Airlines Co. 1,423,632 ------------------------------------------------------------------------------------------------- 1,968,540 ------------------------------------------------------------------------------------------------- TOTAL COMMON STOCK (Cost -- $152,837,344) 149,048,577 ------------------------------------------------------------------------------------------------- FACE AMOUNT SECURITY VALUE ------------------------------------------------------------------------------------------------- REPURCHASE AGREEMENT -- 4.7% $ 7,362,000 State Street Bank and Trust Co., 1.200% due 5/1/03; Proceeds at maturity -- $7,362,245; (Fully collateralized by U.S. Treasury Bonds, 8.000% due 11/15/21; Market value -- $7,510,938) (Cost -- $7,362,000) 7,362,000 ------------------------------------------------------------------------------------------------- TOTAL INVESTMENTS -- 100% (Cost -- $160,199,344*) $156,410,577 -------------------------------------------------------------------------------------------------
+Non-income producing security. ++All or a portion of this security is on loan (See Note 4). *Aggregate cost for Federal income tax purposes is substantially the same. LOANED SECURITIES COLLATERAL (UNAUDITED) APRIL 30, 2003
FACE AMOUNT SECURITY VALUE --------------------------------------------------------------------------------------- $10,338,732 State Street Navigator Securities Lending Trust Prime Portfolio (Cost -- $10,338,732) $10,338,732 ---------------------------------------------------------------------------------------
See Notes to Financial Statements. 5 Travelers Series Fund Inc. | 2003 Semi-Annual Report to Shareholders SCHEDULES OF INVESTMENTS (UNAUDITED) (CONTINUED) APRIL 30, 2003 SMITH BARNEY LARGE CAPITALIZATION GROWTH PORTFOLIO
SHARES SECURITY VALUE ---------------------------------------------------------------- COMMON STOCK -- 99.4% Capital Goods -- 1.7% 137,120 General Electric Co. $ 4,038,184 ---------------------------------------------------------------- Computer Software -- 3.9% 370,000 Microsoft Corp. 9,460,900 ---------------------------------------------------------------- Consumer Cyclicals -- 13.6% 462,800 Amazon.com, Inc.+ 13,268,476 414,450 The Home Depot, Inc. 11,658,479 268,700 USA Interactive+ 8,047,565 ---------------------------------------------------------------- 32,974,520 ---------------------------------------------------------------- Consumer Staples -- 12.8% 231,290 The Coca-Cola Co. 9,344,116 400,795 The Gillette Co. 12,204,208 165,640 Wm. Wrigley Jr. Co. 9,393,444 ---------------------------------------------------------------- 30,941,768 ---------------------------------------------------------------- Financial Services -- 15.0% 123,456 American International Group, Inc. 7,154,275 191 Berkshire Hathaway Inc., Class A Shares+ 13,334,665 247,030 Merrill Lynch & Co., Inc. 10,140,581 130,170 Morgan Stanley 5,825,107 ---------------------------------------------------------------- 36,454,628 ---------------------------------------------------------------- Healthcare -- 20.9% 192,680 Amgen Inc.+ 11,813,211 115,750 Eli Lilly & Co. 7,387,165 177,400 Genentech, Inc.+ 6,739,426 114,570 Johnson & Johnson 6,457,165 107,940 Merck & Co. Inc. 6,279,949 385,770 Pfizer Inc. 11,862,428 ---------------------------------------------------------------- 50,539,344 ---------------------------------------------------------------- Multi-Media -- 6.0% 539,820 AOL Time Warner Inc.+ 7,384,738 385,415 The Walt Disney Co. 7,191,844 ---------------------------------------------------------------- 14,576,582 ---------------------------------------------------------------- Technology -- 17.5% 385,600 Dell Computer Corp.+ 11,147,696 555,100 Intel Corp. 10,213,840 421,160 Texas Instruments Inc. 7,787,248 267,000 VERITAS Software Corp.+ 5,876,670 268,480 Xilinx, Inc.+ 7,267,754 ---------------------------------------------------------------- 42,293,208 ----------------------------------------------------------------
See Notes to Financial Statements. 6 Travelers Series Fund Inc. | 2003 Semi-Annual Report to Shareholders SCHEDULES OF INVESTMENTS (UNAUDITED) (CONTINUED) APRIL 30, 2003 SMITH BARNEY LARGE CAPITALIZATION GROWTH PORTFOLIO
SHARES SECURITY VALUE --------------------------------------------------------------------------------------------- Telecommunications -- 8.0% 771,400 CIENA Corp.+ $ 3,756,718 415,508 Cisco Systems, Inc.+ 6,249,240 381,900 Juniper Networks, Inc.+ 3,903,018 695,180 Motorola, Inc. 5,498,874 --------------------------------------------------------------------------------------------- 19,407,850 --------------------------------------------------------------------------------------------- TOTAL COMMON STOCK (Cost -- $262,431,980) 240,686,984 --------------------------------------------------------------------------------------------- FACE AMOUNT SECURITY VALUE --------------------------------------------------------------------------------------------- REPURCHASE AGREEMENT -- 0.6% $1,467,000 Merrill Lynch & Co., Inc., 1.250% due 5/1/03; Proceeds at maturity -- $1,467,051; (Fully collateralized by various U.S. government agency obligations, 0.000% to 4.875% due 5/9/03 to 11/15/07; Market value -- $1,496,344) (Cost -- $1,467,000) 1,467,000 --------------------------------------------------------------------------------------------- TOTAL INVESTMENTS -- 100% (Cost -- $263,898,980*) $242,153,984 ---------------------------------------------------------------------------------------------
+Non-income producing security. *Aggregate cost for Federal income tax purposes is substantially the same. See Notes to Financial Statements. 7 Travelers Series Fund Inc. | 2003 Semi-Annual Report to Shareholders STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED) APRIL 30, 2003
AIM Capital Smith Barney Large Appreciation Capitalization Portfolio Growth Portfolio ---------------------------------------------------------------------------- ASSETS: Investments, at value (Cost -- $160,199,344 and $263,898,980, respectively) $156,410,577 $242,153,984 Loaned securities collateral, at value (Cost -- $10,338,732) (Note 4) 10,338,732 -- Cash 243 533 Receivable for securities sold 4,348,673 -- Dividends and interest receivable 46,194 111,059 Receivable for Fund shares sold 5,625 43,103 Other receivables 12,592 39,569 --------------------------------------------------------------------------- Total Assets 171,162,636 242,348,248 --------------------------------------------------------------------------- LIABILITIES: Payable for securities on loan (Note 4) 10,338,732 -- Payable for securities purchased 1,500,804 1,260,450 Management fees payable 115,045 143,444 Accrued expenses 39,497 43,863 --------------------------------------------------------------------------- Total Liabilities 11,994,078 1,447,757 --------------------------------------------------------------------------- Total Net Assets $159,168,558 $240,900,491 --------------------------------------------------------------------------- NET ASSETS: Par value of capital shares $ 195 $ 224 Capital paid in excess of par value 238,024,349 325,237,586 Undistributed net investment income -- 80,715 Accumulated net investment loss (160,769) -- Accumulated net realized loss from security transactions and options (74,906,450) (62,673,038) Net unrealized depreciation of investments and foreign currencies (3,788,767) (21,744,996) --------------------------------------------------------------------------- Total Net Assets $159,168,558 $240,900,491 --------------------------------------------------------------------------- Shares Outstanding 19,542,207 22,374,316 --------------------------------------------------------------------------- Net Asset Value $8.14 $10.77 ---------------------------------------------------------------------------
See Notes to Financial Statements. 8 Travelers Series Fund Inc. | 2003 Semi-Annual Report to Shareholders STATEMENTS OF OPERATIONS (UNAUDITED) For the Six Months Ended April 30, 2003
AIM Capital Smith Barney Large Appreciation Capitalization Portfolio Growth Portfolio --------------------------------------------------------------------------------------------- INVESTMENT INCOME: Dividends $ 479,708 $ 1,108,072 Interest 38,237 14,723 Less: Foreign withholding tax (1,888) -- ------------------------------------------------------------------------------------------- Total Investment Income 516,057 1,122,795 ------------------------------------------------------------------------------------------- EXPENSES: Management fees (Note 2) 640,277 843,466 Audit and legal 15,637 18,756 Custody 15,632 9,703 Shareholder communications 9,493 15,876 Directors' fees 3,112 5,249 Shareholder servicing fees 2,673 2,480 Other 3,176 4,025 ------------------------------------------------------------------------------------------- Total Expenses 690,000 899,555 ------------------------------------------------------------------------------------------- Net Investment Income (Loss) (173,943) 223,240 ------------------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, FOREIGN CURRENCIES AND OPTIONS (NOTES 3, 6 AND 7): Realized Gain (Loss) From: Security transactions (excluding short-term securities) (8,329,498) (10,230,471) Foreign currency transactions 13,174 -- Options written 15,824 -- ------------------------------------------------------------------------------------------- Net Realized Loss (8,300,500) (10,230,471) ------------------------------------------------------------------------------------------- Change in Net Unrealized Depreciation From: Security transactions 10,147,756 29,446,495 Foreign currency transactions 396 -- ------------------------------------------------------------------------------------------- Decrease in Net Unrealized Depreciation 10,148,152 29,446,495 ------------------------------------------------------------------------------------------- Net Gain on Investments, Foreign Currencies and Options 1,847,652 19,216,024 ------------------------------------------------------------------------------------------- Increase in Net Assets From Operations $ 1,673,709 $ 19,439,264 -------------------------------------------------------------------------------------------
See Notes to Financial Statements. 9 Travelers Series Fund Inc. | 2003 Semi-Annual Report to Shareholders STATEMENTS OF CHANGES IN NET ASSETS For the Six Months Ended April 30, 2003 (unaudited) and the Year Ended October 31, 2002
AIM Capital Appreciation Portfolio 2003 2002 ---------------------------------------------------------------------------------- OPERATIONS: Net investment loss $ (173,943) $ (589,855) Net realized loss (8,300,500) (26,798,033) Decrease in net unrealized depreciation 10,148,152 4,341,849 --------------------------------------------------------------------------------- Increase (Decrease) in Net Assets From Operations 1,673,709 (23,046,039) --------------------------------------------------------------------------------- FUND SHARE TRANSACTIONS (NOTE 8): Net proceeds from sale of shares 2,283,758 65,014,704 Cost of shares reacquired (16,977,860) (93,735,313) --------------------------------------------------------------------------------- Decrease in Net Assets From Fund Share Transactions (14,694,102) (28,720,609) --------------------------------------------------------------------------------- Decrease in Net Assets (13,020,393) (51,766,648) NET ASSETS: Beginning of period 172,188,951 223,955,599 --------------------------------------------------------------------------------- End of period* $159,168,558 $172,188,951 --------------------------------------------------------------------------------- * Includes accumulated net investment loss of: $(160,769) -- ---------------------------------------------------------------------------------
See Notes to Financial Statements. 10 Travelers Series Fund Inc. | 2003 Semi-Annual Report to Shareholders STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED) For the Six Months Ended April 30, 2003 (unaudited) and the Year Ended October 31, 2002
Smith Barney Large Capitalization Growth Portfolio 2003 2002 -------------------------------------------------------------------------------- OPERATIONS: Net investment income $ 223,240 $ 359,070 Net realized loss (10,230,471) (41,360,220) (Increase) decrease in net unrealized depreciation 29,446,495 (9,512,917) -------------------------------------------------------------------------------- Increase (Decrease) in Net Assets From Operations 19,439,264 (50,514,067) -------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS FROM: Net investment income (501,211) (415,332) -------------------------------------------------------------------------------- Decrease in Net Assets From Distributions to Shareholders (501,211) (415,332) -------------------------------------------------------------------------------- FUND SHARE TRANSACTIONS (NOTE 8): Net proceeds from sale of shares 8,551,494 34,322,507 Net asset value of shares issued for reinvestment of dividends 501,211 415,332 Cost of shares reacquired (12,238,657) (38,267,567) -------------------------------------------------------------------------------- Decrease in Net Assets From Fund Share Transactions (3,185,952) (3,529,728) -------------------------------------------------------------------------------- Increase (Decrease) in Net Assets 15,752,101 (54,459,127) NET ASSETS: Beginning of period 225,148,390 279,607,517 -------------------------------------------------------------------------------- End of period* $240,900,491 $225,148,390 -------------------------------------------------------------------------------- * Includes undistributed net investment income of: $80,715 $358,686 --------------------------------------------------------------------------------
See Notes to Financial Statements. 11 Travelers Series Fund Inc. | 2003 Semi-Annual Report to Shareholders NOTES TO FINANCIAL STATEMENTS (UNAUDITED) 1. Significant Accounting Policies The AIM Capital Appreciation Portfolio and Smith Barney Large Capitalization Growth Portfolio ("Fund(s)") are separate investment funds of the Travelers Series Fund Inc. ("Series"). The Series, a Maryland corporation, is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company and consists of these Funds and twelve other separate investment funds: Smith Barney Large Cap Value, Alliance Growth, Van Kampen Enterprise, Smith Barney International All Cap Growth, Travelers Managed Income, Putnam Diversified Income, Salomon Brothers Strategic Total Return Bond, Smith Barney High Income, MFS Total Return, Smith Barney Money Market, Smith Barney Mid Cap Core and Smith Barney Aggressive Growth Portfolios. Shares of the Series are offered only to insurance company separate accounts that fund certain variable annuity and variable life insurance contracts. The financial statements and financial highlights for the other funds are presented in separate shareholder reports. The significant accounting policies followed by the Funds are: (a) security transactions are accounted for on trade date; (b) securities traded on national securities markets are valued at the closing prices on such markets; securities for which no sales price was reported and U.S. government agencies and obligations are valued at the mean between the bid and asked prices; securities listed on the NASDAQ National Market System for which market quotations are available are valued at the official closing price or, if there is no official closing price on that day, at the last sale price; (c) securities maturing within 60 days are valued at cost plus accreted discount or minus amortized premium, which approximates value; (d) securities for which market quotations are not available will be valued in good faith at fair value by or under the direction of the Board of Directors; (e) interest income, adjusted for amortization of premium and accretion of discount, is recorded on an accrual basis; (f ) dividend income is recorded on the ex-dividend date; foreign dividends are recorded on the ex-dividend date or as soon as practical after the Funds determine the existence of a dividend declaration after exercising reasonable due diligence; (g) dividends and distributions to shareholders are recorded on the ex-dividend date; the Funds distribute dividends and capital gains, if any, annually; (h) gains or losses on the sale of securities are calculated by using the specific identification method; (i) the accounting records of the Funds are maintained in U.S. dollars. All assets and liabilities 12 Travelers Series Fund Inc. | 2003 Semi-Annual Report to Shareholders NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) denominated in foreign currencies are translated into U.S. dollars based on the rate of exchange of such currencies against U.S. dollars on the date of valuation. Purchases and sales of securities, and income and expenses are translated at the rate of exchange quoted on the respective date that such transactions are recorded. Differences between income or expense amounts recorded and collected or paid are adjusted when reported by the custodian; ( j) the character of income and gains to be distributed are determined in accordance with income tax regulations which may differ from accounting principles generally accepted in the United States of America; (k) the Funds intend to comply with the applicable provisions of the Internal Revenue Code of 1986, as amended, pertaining to regulated investment companies and to make distributions of taxable income sufficient to relieve it from substantially all Federal income and excise taxes; and (l) estimates and assumptions are required to be made regarding assets, liabilities and changes in net assets resulting from operations when financial statements are prepared. Changes in the economic environment, financial markets and any other parameters used in determining these estimates could cause actual results to differ. 2. Management Agreement and Transactions with Affiliated Persons Smith Barney Fund Management LLC ("SBFM"), an indirect wholly-owned subsidiary of Citigroup Inc. ("Citigroup"), acts as investment manager of the Smith Barney Large Capitalization Growth Portfolio ("SBLCG"). SBLCG pays SBFM a management fee calculated at an annual rate of 0.75% on the average daily net assets of SBLCG. This fee is calculated daily and paid monthly. Travelers Investment Adviser, Inc. ("TIA"), an affiliate of SBFM, acts as the investment manager of the AIM Capital Appreciation Portfolio ("AIMCAP"). AIMCAP pays TIA a management fee calculated at an annual rate of 0.80% on the average daily net assets of AIMCAP. This fee is calculated daily and paid monthly. TIA has also entered into a sub-advisory agreement with AIM Capital Management, Inc. ("AIM"). Pursuant to the sub-advisory agreement, AIM is responsible for the day-to-day portfolio operations and investment decisions and is compensated by TIA for such services at the annual rate of 0.375% of AIMCAP's average daily net assets. 13 Travelers Series Fund Inc. | 2003 Semi-Annual Report to Shareholders NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) TIA has also entered into a Sub-Administrative Services Agreement with SBFM. TIA pays SBFM, as sub-administrator, a fee calculated at an annual rate of 0.10% of each Fund's average daily net assets. Citicorp Trust Bank, fsb. ("CTB"), another subsidiary of Citigroup, acts as the Funds' transfer agent. PFPC Global Fund Services ("PFPC") acts as the Funds' sub-transfer agent. CTB receives account fees and asset-based fees that vary according to the size and type of account. PFPC is responsible for shareholder recordkeeping and financial processing for all shareholder accounts and is paid by CTB. For the six months ended April 30, 2003, each Fund paid transfer agent fees of $2,500 to CTB. During the six months ended April 30, 2003, Citigroup Global Markets Inc., formerly known as Salomon Smith Barney Inc., another indirect wholly-owned subsidiary of Citigroup, received brokerage commissions in the amount of $2,970 for AIMCAP. Most of the officers and one Director of the Series are employees of Citigroup or its affiliates. 3. Investments During the six months ended April 30, 2003, the aggregate cost of purchases and proceeds from sales of investments (including maturities of long-term securities, but excluding short-term securities) were as follows:
AIMCAP SBLCG ---------------------------------------------------------------- Purchases $36,276,077 $26,648,017 --------------------------------------------------------------- Sales 56,578,410 29,556,425 ---------------------------------------------------------------
At April 30, 2003, the aggregate gross unrealized appreciation and depreciation of investments for Federal income tax purposes were substantially as follows:
AIMCAP SBLCG --------------------------------------------------------------- Gross unrealized appreciation $ 13,748,700 $ 16,986,099 Gross unrealized depreciation (17,537,467) (38,731,095) -------------------------------------------------------------- Net unrealized depreciation $ (3,788,767) $(21,744,996) --------------------------------------------------------------
14 Travelers Series Fund Inc. | 2003 Semi-Annual Report to Shareholders NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) 4. Lending of Portfolio Securities Each Fund has an agreement with its custodian whereby the custodian may lend securities owned by the Funds to brokers, dealers and other financial organizations. Fees earned by the Funds on securities lending are recorded as interest income. Loans of securities by the Funds are collateralized by cash, U.S. government securities or high quality money market instruments that are maintained at all times in an amount at least equal to the current market value of the loaned securities, plus a margin which may vary depending on the type of securities loaned. The custodian establishes and maintains the collateral in a segregated account. At April 30, 2003, AIMCAP loaned common stocks having a market value of $9,860,462 and received cash collateral amounting to $10,338,732 which was invested in the State Street Navigator Securities Lending Trust Prime Portfolio. For the six months ended April 30, 2003, income earned from securities on loan by AIMCAP was $4,937. At April 30, 2003, SBLCG did not have any securities on loan. 5. Repurchase Agreements The Funds purchase (and their custodian takes possession of ) U.S. government securities from securities dealers subject to agreements to resell the securities to the sellers at a future date (generally, the next business day) at an agreed-upon higher repurchase price. The Funds require continual maintenance of the market value of the collateral (plus accrued interest) in amounts at least equal to the repurchase price. 6. Forward Foreign Currency Contracts The Funds may from time to time enter into forward foreign currency contracts. A forward foreign currency contract is an agreement between two parties to buy and sell a currency at a set price on a future date. The contract is marked-to-market daily and the change in value is recorded by the Funds as an unrealized gain or loss. When a forward foreign currency contract is extinguished, through either delivery or offset by entering into another forward foreign currency con- 15 Travelers Series Fund Inc. | 2003 Semi-Annual Report to Shareholders NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) tract, the Fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value of the contract at the time it was extinguished or offset. At April 30, 2003, AIMCAP and SBLCG did not hold any forward foreign currency contracts. 7. Option Contracts SBLCG may from time to time purchase call or put option contracts. Premiums paid when put or call options are purchased by the Fund represent investments which are marked-to-market daily. When a purchased option expires, the Fund will realize a loss in the amount of the premium paid. When the Fund enters into a closing sales transaction, the Fund will realize a gain or loss depending on whether the sales proceeds from the closing sales transaction are greater or less than the premium paid for the option. When the Fund exercises a put option, it will realize a gain or loss from the sale of the underlying security and the proceeds from such sale will be decreased by the premium originally paid. When the Fund exercises a call option, the cost of the security which the Fund purchases upon exercise will be increased by the premium originally paid. At April 30, 2003, SBLCG did not hold any purchased call or put option contracts. SBLCG may from time to time enter into written call or put option contracts. AIMCAP may only enter into written covered call option contracts. When a Fund writes a call or put option, an amount equal to the premium received by the Fund is recorded as a liability, the value of which is marked-to-market daily. When a written option expires, the Fund realizes a gain equal to the amount of the premium received. When the Fund enters into a closing purchase transaction, the Fund realizes a gain (or loss if the cost of the closing purchase transaction exceeds the premium received when the option was written) without regard to any unrealized gain or loss on the underlying security, and the liability related to such option is eliminated. When a written call option is exercised, the cost of the security sold will be reduced by the premium originally received. When a written put option is exercised, the amount of the premium received will reduce the cost of the security which the Fund purchased upon exercise. When written index options are exercised, settlement is made in cash. 16 Travelers Series Fund Inc. | 2003 Semi-Annual Report to Shareholders NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) The risk associated with purchasing options is limited to the premium originally paid. The Fund enters into options for hedging purposes. The risk in writing a call option is that the Fund gives up the opportunity to participate in any decrease in the price of the underlying security beyond the exercise price. The risk in writing a put option is that the Fund is exposed to the risk of loss if the market price of the underlying security declines. The risk in writing a call option is that the Fund is exposed to the risk of loss if the market price of the underlying security increases. The written option transactions for AIMCAP which occurred during the six months ended April 30, 2003, were as follows:
Number of AIMCAP Contracts Premium -------------------------------------------------------------------- Options written, outstanding at October 31, 2002 36 $ 9,252 Options written 31 6,572 Options expired (67) (15,824) -------------------------------------------------------------------- Options written, outstanding at April 30, 2003 -- $ 0 --------------------------------------------------------------------
At April 30, 2003, SBLCG did not enter into any written covered call or put option contracts. 8. Capital Shares At April 30, 2003, the Series had six billion shares of capital stock authorized with a par value of $0.00001 per share. Each share of a Fund represents an equal proportionate interest in that Fund with each other share of the same Fund and has an equal entitlement to any dividends and distributions made by the Fund. Transactions in shares of each Fund were as follows:
Six Months Ended Year Ended April 30, 2003 October 31, 2002 -------------------------------------------------------------------- AIM Capital Appreciation Portfolio Shares sold 291,730 6,822,913 Shares reacquired (2,179,125) (9,963,375) -------------------------------------------------------------------- Net Decrease (1,887,395) (3,140,462) -------------------------------------------------------------------- Smith Barney Large Capitalization Growth Portfolio Shares sold 834,552 2,760,973 Shares issued on reinvestment 51,353 42,511 Shares reacquired (1,235,108) (3,657,809) -------------------------------------------------------------------- Net Decrease (349,203) (854,325) --------------------------------------------------------------------
17 Travelers Series Fund Inc. | 2003 Semi-Annual Report to Shareholders FINANCIAL HIGHLIGHTS For a share of capital stock outstanding throughout each year ended October 31, unless otherwise noted:
AIM Capital Appreciation Portfolio 2003/(1)/ 2002 2001 2000 1999 1998 -------------------------------------------------------------------------------------------------------- Net Asset Value, Beginning of Period $8.04 $9.11 $ 21.73 $16.30 $12.31 $12.68 ------------------------------------------------------------------------------------------------------- Income (Loss) From Operations: Net investment loss (0.01) (0.03) (0.02) (0.07) (0.03) (0.01) Net realized and unrealized gain (loss) 0.11 (1.04) (8.72) 6.03 4.02 (0.34) ------------------------------------------------------------------------------------------------------- Total Income (Loss) From Operations 0.10 (1.07) (8.74) 5.96 3.99 (0.35) ------------------------------------------------------------------------------------------------------- Less Distributions From: Net investment income -- -- -- -- -- (0.02) Net realized gains -- -- (3.88) (0.53) -- -- ------------------------------------------------------------------------------------------------------- Total Distributions -- -- (3.88) (0.53) -- (0.02) ------------------------------------------------------------------------------------------------------- Net Asset Value, End of Period $8.14 $8.04 $ 9.11 $21.73 $16.30 $12.31 ------------------------------------------------------------------------------------------------------- Total Return 1.24%++ (11.75)% (43.36)% 36.53% 32.41% (2.79)% ------------------------------------------------------------------------------------------------------- Net Assets, End of Period (millions) $159 $172 $224 $435 $300 $226 ------------------------------------------------------------------------------------------------------- Ratios to Average Net Assets: Expenses 0.86%+ 0.85% 0.83% 0.83% 0.84% 0.85% Net investment loss (0.22)+ (0.28) (0.20) (0.35) (0.18) (0.06) ------------------------------------------------------------------------------------------------------- Portfolio Turnover Rate 23% 65% 77% 91% 76% 75% -------------------------------------------------------------------------------------------------------
(1) For the six months ended April 30, 2003 (unaudited). ++ Total return is not annualized, as it may not be representative of the total return for the year. + Annualized. 18 Travelers Series Fund Inc. | 2003 Semi-Annual Report to Shareholders FINANCIAL HIGHLIGHTS (CONTINUED) For a share of capital stock outstanding throughout each year ended October 31, unless otherwise noted:
Smith Barney Large Capitalization Growth Portfolio 2003/(1)/ 2002 2001 2000 1999 1998/(2)/ -------------------------------------------------------------------------------------------- Net Asset Value, Beginning of Period $ 9.91 $11.86 $16.04 $14.53 $ 9.90 $10.00 -------------------------------------------------------------------------------------------- Income (Loss) From Operations: Net investment income/(3)/ 0.01 0.02 0.02 0.01 0.00* 0.01 Net realized and unrealized gain (loss) 0.87 (1.95) (4.20) 1.55 4.64 (0.11)# -------------------------------------------------------------------------------------------- Total Income (Loss) From Operations 0.88 (1.93) (4.18) 1.56 4.64 (0.10) -------------------------------------------------------------------------------------------- Less Distributions From: Net investment income (0.02) (0.02) -- (0.01) (0.01) -- Net realized gains -- -- -- (0.02) -- -- Capital -- -- -- (0.02) -- -- -------------------------------------------------------------------------------------------- Total Distributions (0.02) (0.02) -- (0.05) (0.01) -- -------------------------------------------------------------------------------------------- Net Asset Value, End of Period $10.77 $ 9.91 $11.86 $16.04 $14.53 $ 9.90 -------------------------------------------------------------------------------------------- Total Return 8.92%++ (16.29)% (26.06)% 10.77% 46.88% (1.00)%++ -------------------------------------------------------------------------------------------- Net Assets, End of Period (millions) $241 $225 $280 $324 $168 $21 -------------------------------------------------------------------------------------------- Ratios to Average Net Assets: Expenses/(3)/ 0.80%+ 0.80% 0.78% 0.77% 0.86% 1.00%+ Net investment income 0.20+ 0.13 0.14 0.06 0.07 0.52+ -------------------------------------------------------------------------------------------- Portfolio Turnover Rate 12% 19% 10% 7% 14% 1% --------------------------------------------------------------------------------------------
(1) For the six months ended April 30, 2003 (unaudited). (2) For the period from May 1, 1998 (commencement of operations) to October 31, 1998. (3) The Manager waived all or a portion of its fees for the period ended October 31, 1998. If such fees were not waived, the per share decrease to net investment income and the actual annualized expense ratio would have been $0.02 and 1.77%, respectively. * Amount represents less than $0.01 per share. # The amount shown may not be consistent with the change in aggregate gains and losses of portfolio securities due to the timing of sales and redemptions of Fund shares throughout the year. ++ Total return is not annualized, as it may not be representative of the total return for the year. + Annualized. 19 Travelers Series Fund Inc. | 2003 Semi-Annual Report to Shareholders TRAVELERS SERIES FUND INC. DIRECTORS INVESTMENT MANAGERS A.E. Cohen Smith Barney Fund Robert A. Frankel Management LLC Michael E. Gellert Travelers Investment Adviser, Inc. R. Jay Gerken, Chairman CUSTODIAN Rainer Greeven State Street Bank and Susan M. Heilbron Trust Company OFFICERS ANNUITY R. Jay Gerken ADMINISTRATION President and Chief Travelers Annuity Investor Services Executive Officer 5 State House Square 1 Tower Square Lewis E. Daidone Hartford, Connecticut 06183 Senior Vice President and Chief Administrative Officer Richard L. Peteka Chief Financial Officer and Treasurer Alan J. Blake Vice President and Investment Officer Kaprel Ozsolak Controller Christina T. Sydor Secretary Travelers Series Fund Inc. This report is submitted for the general information of the shareholders of the Travelers Series Fund Inc. -- AIM Capital Appreciation and Smith Barney Large Capitalization Growth Portfolios. It is not authorized for distribution to prospective investors unless accompanied or preceded by a current Prospectus for the Funds, which contains information concerning the Funds' investment policies and expenses as well as other pertinent information. TRAVELERS SERIES FUND INC. 125 Broad Street 10th Floor, MF-2 New York, New York 10004 IN0806 6/03 03-4964 ITEM 2. CODE OF ETHICS. Not applicable. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. Not applicable. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Not applicable. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. Not applicable. ITEM 6. [RESERVED] ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 8. [RESERVED] ITEM 9. CONTROLS AND PROCEDURES. (a) The registrant's principal executive officer and principal financial officer have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-2(c) under the Investment Company Act of 1940, as amended) are effective based on their evaluation of the disclosure controls and procedures as of a date within 90 days of the filing date of this document. (b) In the last 90 days, there have been no significant changes in the Registrant's internal controls or in other factors that could significantly affect these controls. ITEM 10. EXHIBITS. (a) Not applicable. (b) Attached hereto. Exhibit 99.CERT Certifications pursuant to section 302 of the Sarbanes-Oxley Act of 2002 Exhibit 99.906CERT Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this Report to be signed on its behalf by the undersigned, there unto duly authorized. Travelers Series Fund Inc. By: /s/ R. Jay Gerken R. Jay Gerken Chief Executive Officer of Travelers Series Fund Inc. Date: June 30, 2003 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By: /s/ R. Jay Gerken (R. Jay Gerken) Chief Executive Officer of Travelers Series Fund Inc. Date: June 30, 2003 By: /s/ RICHARD PETEKA Chief Financial Officer of Travelers Series Fund Inc. Date: June 30, 2003