-----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, BeJH94f7xv8HTdFuHcMtX2HwnrykBMWMIsL14vV7cZnPCeWDwzTHWXeENQcdzpPV FTa8tbwHOoCRavksEQXYXw== 0001193125-04-000136.txt : 20040102 0001193125-04-000136.hdr.sgml : 20040101 20040102131116 ACCESSION NUMBER: 0001193125-04-000136 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20031031 FILED AS OF DATE: 20040102 EFFECTIVENESS DATE: 20040102 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TRAVELERS SERIES FUND INC CENTRAL INDEX KEY: 0000919557 IRS NUMBER: 133767311 STATE OF INCORPORATION: MD FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-08372 FILM NUMBER: 04500755 BUSINESS ADDRESS: STREET 1: 125 BROAD STREET STREET 2: 10TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10004 BUSINESS PHONE: 212-291-2556 MAIL ADDRESS: STREET 1: 125 BROAD STREET STREET 2: 10TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10004 FORMER COMPANY: FORMER CONFORMED NAME: SMITH BARNEY TRAVELERS SERIES FUND INC DATE OF NAME CHANGE: 19940613 FORMER COMPANY: FORMER CONFORMED NAME: SBA VARIABLE PRODUCTS SERIES FUND INC DATE OF NAME CHANGE: 19940228 N-CSR 1 dncsr.txt 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) Robert I. Frenkel, Esq. Smith Barney Fund Management LLC 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: October 31, 2003 ITEM 1. REPORT TO STOCKHOLDERS. The Annual Report to Stockholders is filed herewith. TRAVELERS SERIES FUND INC. SMITH BARNEY AGGRESSIVE GROWTH PORTFOLIO SMITH BARNEY MID CAP CORE PORTFOLIO ANNUAL REPORT | OCTOBER 31, 2003 NOT FDIC INSURED . NOT BANK GUARANTEED . MAY LOSE VALUE WHAT'S INSIDE Letter from the Chairman...................... 1 Manager Overview: Smith Barney Aggressive Growth Portfolio..... 3 Smith Barney Mid Cap Core Portfolio.......... 5 Fund Performance: Smith Barney Aggressive Growth Portfolio..... 8 Smith Barney Mid Cap Core Portfolio.......... 10 Schedules of Investments...................... 12 Statements of Assets and Liabilities.......... 20 Statements of Operations...................... 21 Statements of Changes in Net Assets........... 22 Notes to Financial Statements................. 24 Financial Highlights.......................... 30 Independent Auditors' Report.................. 32 Additional Information........................ 33
LETTER FROM THE CHAIRMAN [PHOTO] R. JAY GERKEN, CFA Chairman, President and Chief Executive Officer Dear Shareholder, Historically low interest rates and the federal tax cut helped stimulate the economy and the stock market during the funds' fiscal year ended October 31, 2003. Despite a reluctance by businesses to hire and to make capital expenditures, and despite continued concerns about terrorism and ongoing violence in Iraq, the global economy and the U.S. economy showed positive signs this past year. The stock market rebounded strongly, particularly those stocks that are most volatile and those whose prices may have fallen the farthest during the bear market that lasted roughly from Spring 2000 through Fall 2002. This strength was particularly notable among mid-cap and small-cap stocks. For a more detailed review of how your fund performed within this market environment, continue reading this report. 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, CFA Chairman, President and Chief Executive Officer November 21, 2003 1 Travelers Series Fund Inc. | 2003 Annual Report PERFORMANCE OF THE FUNDS AS OF OCTOBER 31, 2003/1/
6 Months 12 Months Smith Barney Aggressive Growth Portfolio 15.45% 25.74% Russell 3000 Growth Index/2/ 18.06% 23.36% Average of Lipper variable multi-cap growth funds/3/ 21.85% 27.50% Smith Barney Mid Cap Core Portfolio 20.72% 22.28% S&P MidCap 400 Index/4/ 25.61% 30.61% Average of Lipper variable mid-cap growth funds/5/ 25.61% 31.04%
/1/The performance returns set forth above do not reflect the reduction of initial charges and expenses imposed in connection with investing in variable annuity contracts such as administrative fees, account charges and surrender charges, which if reflected, would reduce the performance of the funds. Past performance is not indicative of future results. /2/The Russell 3000 Growth Index measures the performance of those Russell 3000 Index companies with higher price-to-book ratios and higher forecasted growth values. Please note that an investor cannot invest directly in an index. /3/Lipper Inc. is a major independent mutual-fund tracking organization. Returns are based on the period ended October 31, 2003, calculated among 105 funds for the six-month period and among 104 funds for the 12-month period in the fund's Lipper peer group including the reinvestment of dividends and capital gains. /4/The S&P MidCap 400 Index is a market-value weighted index consisting of 400 domestic stocks chosen for market size, liquidity, and industry group representation. Please note that an investor cannot invest directly in an index. /5/Returns are based on the period ended October 31, 2003 calculated among 119 funds for the six-month period and among 115 funds for the 12-month period, in the fund's Lipper peer group including the reinvestment of dividends and capital gains. 2 Travelers Series Fund Inc. | 2003 Annual Report MANAGER OVERVIEW Smith Barney Aggressive Growth Portfolio Performance Review For the 12 months ended October 31, 2003, the fund returned 25.74%. The fund outperformed the Russell 3000 Growth Index,/i/ which returned 23.36% for the same period. The fund's strength was broad-based, with particularly good performance demonstrated by its healthcare and financial services securities as well as by select technology holdings. Past performance is no guarantee of future results. Market Overview Rarely does history repeat itself in the stock market, yet there are remarkable similarities between the performance of stocks before and after the Iraq confrontations in 1991 and 2003. In both cases, the equity markets declined prior to the onset of armed conflict due, at least in part, to a sharp rise in the price of crude oil. Traders feared a possible disruption to energy supplies during the fighting. When it became evident, in both instances, that the United States would prevail with little to no disruption to energy supplies, the stock market staged a strong rally and the price of oil declined. The U.S. economy was in recession prior to the conflict in 1991, aggravated by the surge in energy prices following Iraq's occupation of Kuwait. In early 2003, while no longer officially in recession, the U.S. economy was again quite weak, having never fully recovered from the terrorist strikes in 2001 and effects of the unwinding of the speculative stock market bubble of the late 1990s. In both cases, the quick victories in Iraq led to economic and stock market rebounds. The 2003 stock market rally's seeds were sown last summer. The Fed has remained extremely accommodative, having cut short-term interest rates 13 times since 2000. It has also indicated to the markets that it intends to keep short-term rates low for an extended period to ensure that economic growth will not just resume, but will be sustained. Long-term interest rates rose sharply during the summer following a plunge to the lowest levels seen in two generations. The steepening of the yield curve is a normal consequence of an improving tone in the economy. 3 Travelers Series Fund Inc. | 2003 Annual Report Fund Performance/1/ During the last 12 months, we continued to use a bottom-up,/ii/ buy-and-hold strategy. We sought to identify true growth companies, whose success is not overly reliant on the traditional business cycle. Following weak performance into the July 2002 lows, biotechnology and other healthcare securities staged strong recoveries and were contributors to the fund's performance. Positive contributors to performance included Genzyme Corp., Amgen Inc. and Chiron Corp. In the financial sector, the Fed's low interest rates and the equity market's recovery helped improve the earnings and stock prices of Merrill Lynch & Co., Inc. and Lehman Brothers Holdings Inc. Two securities, which detracted from results in the past year were IDEC Pharmaceuticals Corp. and Micron Technology, Inc. In July, IDEC announced a merger agreement of equals with Biogen Inc., which will create the world's third largest independent biotechnology company. Micron underperformed because of weakness in the price of computer memory. Thank you for your investment in the Smith Barney Aggressive Growth Portfolio. We appreciate that you have entrusted us to manage your money and value our relationship with you. Sincerely, /s/ Richard A. Freeman Richard A. Freeman Portfolio Manager November 21, 2003 /1/The fund's top 10 holdings as of October 31, 2003 were UnitedHealth Group Inc. (5.19%), Lehman Brothers Holdings Inc. (5.08%), Forest Laboratories, Inc. (5.08%), Chiron Corp. (4.98%), Amgen Inc. (4.84%), Genzyme Corp. (4.75%), Comcast Corp., Special Class A Shares (4.26%), Merrill Lynch & Co., Inc. (3.84%), Weatherford International Ltd. (3.54%) and Cablevision Systems NY Group, Class A Shares (3.46%). 4 Travelers Series Fund Inc. | 2003 Annual Report MANAGER OVERVIEW Smith Barney Mid Cap Core Portfolio Performance Update For the 12 months ended October 31, 2003, the fund returned 22.28%. The fund underperformed its unmanaged benchmark, the S&P MidCap 400 Index ("MidCap Index"),/iii/ which returned 30.61% for the same period. The fund underperformed mainly because it did not own many of the MidCap Index's smallest companies. During this period, the smallest quintile (one-fifth) of the MidCap Index gained an average of about 60%. The largest company in this quintile had a market value of approximately $800 million; the fund typically invests in companies whose market capitalizations range from $1 billion to $10 billion. Market Overview Early this year, the economy did not show any clear sign of improvement and the stock market was near multi-year lows. Eventually, aggressive monetary and fiscal policies and the winding down of excess inventory and capacity began to slowly ease the pressure on corporate earnings. Because expenses were carefully controlled during the economic downturn, corporations were able to convert modest revenue increases into positive earnings surprises in the second and third calendar quarters. This set up a dramatic bounce in the equity markets, which began in March. However, in spite of a sense of trepidation by individual investors, institutional investors emphasized the companies with the greatest operating and financial leverage coming off the bottom. This could well have to do with hedge funds covering short positions and moving to a net long position as many of the worst performing stocks over the previous three years turned in huge performance gains. We feel that a transition in leadership is starting to take hold, replacing the more volatile lower quality and micro-cap stocks that led earlier this year. Our strategy of focusing on established, well-positioned mid-cap companies with strong franchises and consistent growth was not in favor during the period. We continue to use a methodical approach in managing the portfolio, emphasizing stock selection and diversification while managing risk. We look for companies with clearly-stated objectives and strategies, long-term viable business models and successful historical execution. We believe companies with strong balance sheets generating healthy cash flows with recognized franchise positions 5 Travelers Series Fund Inc. | 2003 Annual Report will be well positioned to drive shareholder value through investment, acquisitions, share buybacks or dividends. Fund Performance/2/ The biggest contributor to the fund's performance for the period was the fund's position in Gilead Sciences, Inc. The other two top contributors were Doral Financial Corp. and VERITAS Software Corp. Gilead is a biopharmaceutical company with several marketed products for the treatment of infectious disease, including Viread and Emtriva for HIV, Hepsera for hepatitis, and Tamiflu for the treatment of influenza. The company benefited from strong sales of Viread. Doral Financial is the largest mortgage bank and the fastest growing commercial bank in Puerto Rico. Veritas Software enables customers to protect, manage and access their business-critical information and data assets. The fund's underperformance was due partly to stock selection in addition to the lack of representation in the MidCap Index's smaller companies; specifically the fund's positions in IDEC Pharmaceuticals Corp., Universal Health Services, Inc. and L-3 Communications Holdings, Inc. IDEC Pharmaceutical, in the healthcare sector, was the largest single detractor from fund performance during the period. IDEC engages in the discovery, development and commercialization of drugs for the treatment of cancer and autoimmune and inflammatory diseases. Its main product, Rituxan, is used to treat certain non-Hodgkin's lymphomas. The stock underperformed due to several factors: Slower than expected uptake of Zevalin, fears that Rituxan growth would slow if the results of clinical trials were negative, and poor investor reaction to IDEC's merger with Biogen. These negative factors, however, were somewhat offset by the stock's valuation. Universal Health Services operates facilities nationwide and in France including medical, surgical acute care and behavioral health hospitals, ambulatory surgery, and radiation therapy centers. The stock's performance was negatively affected earlier this year when the company's chief financial officer abruptly resigned. In addition, during the year, hospital stocks were hurt by sector rotation as investors focused on sectors that were more sensitive to the economy's growth potential. /2/The fund's top 10 holdings as of October 31, 2003 were: AMBAC Financial Group, Inc. (2.05%), M&T Bank Corp. (1.83%), Marvel Enterprises, Inc. (1.79%), Bowater Inc. (1.78%), VERITAS Software Corp. (1.71%), Investors Financial Services Corp. (1.69%), Gilead Sciences, Inc. (1.68%), Williams-Sonoma, Inc. (1.65%), Murphy Oil Corp. (1.58%) and Integrated Device Technology, Inc. (1.52%). 6 Travelers Series Fund Inc. | 2003 Annual Report Thank you for your investment in the Smith Barney Mid Cap Core Portfolio. We appreciate that you have entrusted us to manage your money and value our relationship with you. Sincerely, /s/ Lawrence Weissman Lawrence B. Weissman, CFA Portfolio Manager November 21, 2003 The information provided is not intended to be a forecast of future events, a guarantee of future results or investment advice. Views expressed may differ from those of the firm as a whole. Portfolio holdings and breakdowns are as of October 31, 2003 and are subject to change. Please refer to pages 12 through 19 for a list and percentage breakdown of the funds' holdings. /i/The Russell 3000 Growth Index measures the performance of those Russell 3000 Index companies with higher price-to-book ratios and higher forecasted growth values. Please note that an investor cannot invest directly in an index. /ii/Bottom-up investing is a search for outstanding performance of individual stocks before considering the impact of economic trends. /iii/The S&P MidCap 400 Index is a market-value weighted index consisting of 400 domestic stocks chosen for market size, liquidity, and industry group representation. Please note that an investor cannot invest directly in an index. Additional Information About Your Fund The Funds' Manager and some of its affiliates have received requests for information from various government regulators regarding market timing, late trading, fees and other mutual fund issues in connection with various investigations. The Manager and its affiliates are responding to those information requests, but are not in a position to predict the outcome of these requests and investigations. 7 Travelers Series Fund Inc. | 2003 Annual Report SMITH BARNEY AGGRESSIVE GROWTH PORTFOLIO AVERAGE ANNUAL TOTAL RETURNS+ (UNAUDITED) Twelve Months Ended 10/31/03 25.74% - ----------------------------------- 11/1/99* through 10/31/03 3.42 - -----------------------------------
CUMULATIVE TOTAL RETURN+ (UNAUDITED) 11/1/99* through 10/31/03 14.39% - ------------------------------------------------------------------------------ + Assumes the reinvestment of all dividends and capital gain distributions. Total returns do not reflect expenses associated with the separate account such as administrative fees, account charges and surrender charges which, if reflected, would reduce the total returns for all periods shown. * Commencement of operations. 8 Travelers Series Fund Inc. | 2003 Annual Report HISTORICAL PERFORMANCE (UNAUDITED) Value of $10,000 Invested in Shares of the Smith Barney Aggressive Growth Portfolio vs. Russell 3000 Growth Index+ - -------------------------------------------------------------------------------- November 1999 -- October 2003 [CHART] Smith Barney Russell Aggressive 3000 Growth Growth Portfolio Index ----------------- ----------------- 11/1/99 $10,000 $10,000 10/00 15,041 10,980 10/01 12,329 6,661 10/02 9,097 5,347 10/31/03 11,439 6,596 +Hypothetical illustration of $10,000 invested in shares of the Smith Barney Aggressive Growth Portfolio on November 1, 1999 (commencement of operations), assuming reinvestment of dividends and capital gains, if any, at net asset value through October 31, 2003. The Russell 3000 Growth Index measures the performance of those Russell 3000 Index companies with higher price-to-book ratios and higher forecasted growth values. The Index is unmanaged and is not subject to the same management and trading expenses as a mutual fund. Please note that an investor cannot invest directly in an index. All figures represent past performance and are not a guarantee of future results. The performance data represents past performance, including the investment return and principal value of an investment, which will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. The graph does not reflect expenses associated with the separate account such as administrative fees, account charges and surrender charges which, if reflected, would reduce the performance shown. 9 Travelers Series Fund Inc. | 2003 Annual Report SMITH BARNEY MID CAP CORE PORTFOLIO AVERAGE ANNUAL TOTAL RETURNS+ (UNAUDITED) Twelve Months Ended 10/31/03 22.28% - ----------------------------------- 11/1/99* through 10/31/03 5.57 - -----------------------------------
CUMULATIVE TOTAL RETURN+ (UNAUDITED) 11/1/99* through 10/31/03 24.21% - --------------------------------------------------------------------------- + Assumes the reinvestment of all dividends and capital gain distributions. Performance figures may reflect fee waivers and/or expense reimbursements. Past performance is no guarantee of future results. In the absence of fee waivers and/or expense reimbursements, the total return would be reduced. Total returns do not reflect expenses associated with the separate account such as administrative fees, account charges and surrender charges which, if reflected, would reduce the total returns for all periods shown. * Commencement of operations. 10 Travelers Series Fund Inc. | 2003 Annual Report HISTORICAL PERFORMANCE (UNAUDITED) Value of $10,000 Invested in Shares of the Smith Barney Mid Cap Core Portfolio vs. the S&P MidCap 400 Index+ - -------------------------------------------------------------------------------- November 1999 -- October 2003 [CHART] Smith Barney S&P MidCap Mid Cap Core Portfolio 400 Index --------------------------- ------------ 11/1/99 $10,000 $10,000 10/00 14,236 13,016 10/01 10,881 11,395 10/02 10,158 10,853 10/31/03 12,421 14,175 +Hypothetical illustration of $10,000 invested in shares of the Smith Barney Mid Cap Core Portfolio on November 1, 1999 (commencement of operations), assuming reinvestment of dividends and capital gains, if any, at net asset value through October 31, 2003. The S&P MidCap 400 Index is a widely recognized index of 400 medium-capitalization stocks. Figures for the S&P MidCap 400 Index include reinvestment of dividends. The Index is unmanaged and is not subject to the same management and trading expenses as a mutual fund. Please note that an investor cannot invest directly in an index. All figures represent past performance and are not a guarantee of future results. The performance data represents past performance, including the investment return and principal value of an investment, which will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance figures may reflect fee waivers and/or expense reimbursements. In the absence of fee waivers and/or expense reimbursements, the total return would be reduced. The graph does not reflect expenses associated with the separate account such as administrative fees, account charges and surrender charges which, if reflected, would reduce the performance shown. 11 Travelers Series Fund Inc. | 2003 Annual Report SCHEDULES OF INVESTMENTS OCTOBER 31, 2003 SMITH BARNEY AGGRESSIVE GROWTH PORTFOLIO
SHARES SECURITY VALUE - ----------------------------------------------------------- COMMON STOCK -- 88.5% Aerospace & Defense -- 2.1% 278,800 L-3 Communications Holdings, Inc.* $ 13,031,112 - ----------------------------------------------------------- Banks -- 0.4% 33,000 Astoria Financial Corp. 1,143,120 54,900 Roslyn Bancorp, Inc. 1,479,006 - ----------------------------------------------------------- 2,622,126 - ----------------------------------------------------------- Biotechnology -- 21.9% 1,400 Albany Molecular Research, Inc.* 20,580 162,500 Alkermes, Inc.* 2,107,625 488,745 Amgen Inc.* 30,184,891 110,150 CancerVax Corp.* 1,417,630 568,850 Chiron Corp.* 31,076,275 43,200 Genentech, Inc.* 3,541,104 645,168 Genzyme Corp.* 29,613,211 478,806 IDEC Pharmaceuticals Corp.*+ 16,820,455 215,775 ImClone Systems Inc.* 7,498,181 224,750 Isis Pharmaceuticals, Inc.* 1,494,588 663,905 Millennium Pharmaceuticals, Inc.* 10,569,368 2,300 Nabi Biopharmaceuticals* 25,369 173,000 Nanogen, Inc.* 576,090 800 Tularik Inc. * 10,056 229,400 Vertex Pharmaceuticals Inc.* 3,009,728 - ----------------------------------------------------------- 137,965,151 - ----------------------------------------------------------- Commingled Fund -- 1.3% 225,000 Nasdaq-100 Index Tracking Stock* 7,915,500 - ----------------------------------------------------------- Communications Equipment -- 2.9% 161,100 C-COR.net Corp.* 1,623,888 760,000 Motorola, Inc. 10,282,800 384,325 Nokia Oyj, Sponsored ADR 6,529,682 - ----------------------------------------------------------- 18,436,370 - ----------------------------------------------------------- Computers & Peripherals -- 2.5% 509,076 Maxtor Corp.* 6,959,069 242,000 Quantum Corp.* 752,620 100,000 SanDisk Corp.* 8,060,000 - ----------------------------------------------------------- 15,771,689 - ----------------------------------------------------------- Diversified Financials -- 10.3% 72,725 CIT Group Inc. 2,445,014 440,300 Lehman Brothers Holdings Inc. 31,701,600
See Notes to Financial Statements. 12 Travelers Series Fund Inc. | 2003 Annual Report SCHEDULES OF INVESTMENTS (CONTINUED) OCTOBER 31, 2003 SMITH BARNEY AGGRESSIVE GROWTH PORTFOLIO SHARES SECURITY VALUE - ---------------------------------------------------------------------- Diversified Financials -- 10.3% (continued) 404,400 Merrill Lynch & Co., Inc. $ 23,940,480 2,415 National Financial Partners Corp.* 65,446 153,010 Neuberger Berman Inc. 6,632,984 - ---------------------------------------------------------------------- 64,785,524 - ---------------------------------------------------------------------- Diversified Telecommunication Services -- 0.2% 71,000 AT&T Corp. 1,319,890 - ---------------------------------------------------------------------- Electronic Equipment & Instruments -- 0.1% 12,400 Excel Technology, Inc.* 349,060 - ---------------------------------------------------------------------- Energy Equipment & Services -- 4.7% 165,800 Core Laboratories N.V.* 2,538,398 453,150 Grant Prideco, Inc.* 5,138,721 636,450 Weatherford International Ltd.* 22,116,638 - ---------------------------------------------------------------------- 29,793,757 - ---------------------------------------------------------------------- Healthcare Equipment & Supplies -- 0.2% 55,100 Biosite Inc.* 1,421,580 5,400 Cygnus, Inc.* 1,188 - ---------------------------------------------------------------------- 1,422,768 - ---------------------------------------------------------------------- Healthcare Providers & Services -- 5.1% 636,000 UnitedHealth Group Inc. 32,359,680 - ---------------------------------------------------------------------- Industrial Conglomerates -- 2.7% 812,412 Tyco International Ltd. 16,963,163 - ---------------------------------------------------------------------- Internet Software & Services -- 0.0% 25,000 ParthusCeva, Inc.* 184,750 - ---------------------------------------------------------------------- Machinery -- 0.5% 135,000 Pall Corp. 3,159,000 - ---------------------------------------------------------------------- Media -- 15.0% 1,068,275 Cablevision Systems NY Group, Class A Shares* 21,579,155 114,842 Comcast Corp., Class A Shares* 3,895,441 815,260 Comcast Corp., Special Class A Shares* 26,593,781 1,486,400 Liberty Media Corp., Class A Shares* 14,997,776 1,030,367 Time Warner Inc.* 15,754,311 274,699 Viacom Inc., Class B Shares 10,952,249 34,600 World Wrestling Entertainment, Inc. 387,174 - ---------------------------------------------------------------------- 94,159,887 - ---------------------------------------------------------------------- Pharmaceuticals -- 9.1% 633,800 Forest Laboratories, Inc.* 31,696,338 280,000 ICN Pharmaceuticals, Inc. 5,406,800 189,448 Johnson & Johnson 9,534,918 541,666 King Pharmaceuticals, Inc.* 7,258,324 See Notes to Financial Statements. 13 Travelers Series Fund Inc. | 2003 Annual Report SCHEDULES OF INVESTMENTS (CONTINUED) OCTOBER 31, 2003 SMITH BARNEY AGGRESSIVE GROWTH PORTFOLIO
SHARES SECURITY VALUE - ------------------------------------------------------------------------------------------------- Pharmaceuticals -- 9.1% (continued) 12,189 Pfizer Inc. $ 385,172 101,200 SICOR Inc.* 2,712,160 - ------------------------------------------------------------------------------------------------- 56,993,712 - ------------------------------------------------------------------------------------------------- Semiconductor Equipment & Products -- 6.8% 125,000 Cabot Microelectronics Corp.* 7,125,000 229,000 Cirrus Logic, Inc.* 1,868,640 115,000 Cree, Inc.* 2,042,400 75,000 DSP Group, Inc.* 1,791,000 277,334 Intel Corp. 9,165,889 654,300 Micron Technology, Inc.* 9,382,662 470,000 RF Micro Devices, Inc.* 5,503,700 10,300 Standard Microsystems Corp.* 309,000 241,091 Teradyne, Inc.* 5,492,053 - ------------------------------------------------------------------------------------------------- 42,680,344 - ------------------------------------------------------------------------------------------------- Software -- 1.1% 92,000 Advent Software, Inc.* 1,684,520 100,000 Autodesk, Inc. 1,925,000 32,264 Microsoft Corp. 843,704 105,000 RSA Security Inc.* 1,361,850 75,000 Verity, Inc.* 1,053,750 - ------------------------------------------------------------------------------------------------- 6,868,824 - ------------------------------------------------------------------------------------------------- Wireless Telecommunication Services -- 1.6% 1,409,360 AT&T Wireless Services Inc.* 10,217,860 - ------------------------------------------------------------------------------------------------- TOTAL COMMON STOCK (Cost -- $625,823,460) 557,000,167 - ------------------------------------------------------------------------------------------------- FACE AMOUNT SECURITY VALUE - ------------------------------------------------------------------------------------------------- REPURCHASE AGREEMENT -- 11.5% $72,511,000 Goldman, Sachs & Co., 0.960% due 11/3/03; Proceeds at maturity -- $72,516,801; (Fully collateralized by U.S. Treasury Bonds and Inflation Indexed Notes, 3.375% to 13.875% due 5/15/11 to 4/15/32; Market value -- $73,961,383) (Cost -- $72,511,000) 72,511,000 - ------------------------------------------------------------------------------------------------- TOTAL INVESTMENTS -- 100.0% (Cost -- $698,334,460**) $629,511,167 - -------------------------------------------------------------------------------------------------
* Non-income producing security. + Subsequent to the reporting period, the company changed its name to Biogen Idec Inc. due to a merger. ** Aggregate cost for Federal income tax purposes is $699,658,959. See Notes to Financial Statements. 14 Travelers Series Fund Inc. | 2003 Annual Report SCHEDULES OF INVESTMENTS (CONTINUED) OCTOBER 31, 2003 SMITH BARNEY MID CAP CORE PORTFOLIO
SHARES SECURITY VALUE - ------------------------------------------------------------------- COMMON STOCK -- 94.5% Aerospace & Defense -- 1.0% 17,580 Alliant Techsystems Inc.* $ 909,941 - ------------------------------------------------------------------- Air Freight & Couriers -- 1.7% 26,825 CH Robinson Worldwide, Inc. 1,051,004 10,875 Expeditors International of Washington, Inc. 408,247 - ------------------------------------------------------------------- 1,459,251 - ------------------------------------------------------------------- Banks -- 5.0% 39,575 Banknorth Group, Inc. 1,239,489 16,970 M&T Bank Corp. 1,593,483 32,395 National Commerce Financial Corp. 889,891 10,350 Zions Bancorp. 634,352 - ------------------------------------------------------------------- 4,357,215 - ------------------------------------------------------------------- Biotechnology -- 3.4% 26,680 Gilead Sciences, Inc.* 1,456,194 26,050 IDEC Pharmaceuticals Corp.*+ 915,136 22,000 MedImmune, Inc.* 586,520 - ------------------------------------------------------------------- 2,957,850 - ------------------------------------------------------------------- Building Products -- 1.1% 10,235 American Standard Cos. Inc.* 979,489 - ------------------------------------------------------------------- Chemicals -- 1.2% 22,200 Valspar Corp. 1,058,940 - ------------------------------------------------------------------- Commercial Services & Supplies -- 2.5% 20,550 DST Systems, Inc.* 777,201 17,050 Manpower Inc. 791,120 16,774 Weight Watchers International, Inc.* 618,961 - ------------------------------------------------------------------- 2,187,282 - ------------------------------------------------------------------- Communications Equipment -- 1.2% 94,850 3Com Corp.* 682,920 75,950 ADC Telecommunications, Inc.* 193,672 32,175 CIENA Corp.* 206,242 - ------------------------------------------------------------------- 1,082,834 - ------------------------------------------------------------------- Computers & Peripherals -- 0.8% 25,550 Electronics for Imaging, Inc.* 692,405 - ------------------------------------------------------------------- Construction & Engineering -- 1.4% 26,520 Jacobs Engineering Group Inc.* 1,228,406 - -------------------------------------------------------------------
See Notes to Financial Statements. 15 Travelers Series Fund Inc. | 2003 Annual Report SCHEDULES OF INVESTMENTS (CONTINUED) OCTOBER 31, 2003 SMITH BARNEY MID CAP CORE PORTFOLIO SHARES SECURITY VALUE ------------------------------------------------------------------- Containers & Packaging -- 1.9% 29,750 Pactiv Corp.* $ 655,988 62,325 Smurfit-Stone Container Corp.* 966,038 ------------------------------------------------------------------- 1,622,026 ------------------------------------------------------------------- Diversified Financials -- 4.1% 9,725 The First Marblehead Corp.* 215,409 41,470 Investors Financial Services Corp. 1,465,135 8,975 Jefferies Group, Inc. 278,225 2,120 National Financial Partners Corp.* 57,452 34,050 Providian Financial Corp.* 378,296 55,232 Waddell & Reed Financial, Inc., Class A Shares 1,225,046 ------------------------------------------------------------------- 3,619,563 ------------------------------------------------------------------- Electric Utilities -- 1.7% 20,675 Puget Energy, Inc. 469,943 29,925 Wisconsin Energy Corp. 980,044 ------------------------------------------------------------------- 1,449,987 ------------------------------------------------------------------- Electrical Equipment -- 0.8% 23,750 Rockwell Automation, Inc. 737,438 ------------------------------------------------------------------- Electronic Equipment & Instruments -- 1.8% 15,850 Diebold, Inc. 904,401 23,275 Jabil Circuit, Inc.* 648,209 ------------------------------------------------------------------- 1,552,610 ------------------------------------------------------------------- Energy Equipment & Services -- 3.2% 18,165 Cooper Cameron Corp.* 777,825 27,550 GlobalSantaFe Corp. 620,150 15,975 Nabors Industries, Ltd.* 603,855 20,500 Smith International, Inc.* 763,215 ------------------------------------------------------------------- 2,765,045 ------------------------------------------------------------------- Food & Drug Retailing -- 1.3% 23,580 Performance Food Group Co.* 878,355 22,900 Wild Oats Markets, Inc.* 237,702 ------------------------------------------------------------------- 1,116,057 ------------------------------------------------------------------- Food Products -- 0.8% 29,540 Hormel Foods Corp. 729,343 ------------------------------------------------------------------- Gas Utilities -- 0.7% 36,150 Southern Union Co.* 636,602 ------------------------------------------------------------------- See Notes to Financial Statements. 16 Travelers Series Fund Inc. | 2003 Annual Report SCHEDULES OF INVESTMENTS (CONTINUED) OCTOBER 31, 2003 SMITH BARNEY MID CAP CORE PORTFOLIO SHARES SECURITY VALUE --------------------------------------------------------------------- Healthcare Equipment & Supplies -- 2.0% 17,975 DENTSPLY International Inc. $ 794,315 16,050 St. Jude Medical, Inc.* 933,468 --------------------------------------------------------------------- 1,727,783 --------------------------------------------------------------------- Healthcare Providers & Services -- 3.3% 25,675 Caremark Rx, Inc.* 643,159 12,550 Henry Schein, Inc.* 778,728 18,565 Lincare Holdings Inc.* 722,921 15,680 Universal Health Services, Inc., Class B Shares* 737,744 --------------------------------------------------------------------- 2,882,552 --------------------------------------------------------------------- Hotels, Restaurants & Leisure -- 0.5% 19,400 Landry's Restaurants, Inc. 485,582 --------------------------------------------------------------------- Household Durables -- 2.2% 10,650 Fortune Brands, Inc. 693,847 8,375 Lennar Corp., Class A Shares 769,244 6,600 Mohawk Industries, Inc.* 489,192 --------------------------------------------------------------------- 1,952,283 --------------------------------------------------------------------- Insurance -- 5.3% 25,165 Ambac Financial Group, Inc. (a)(b) 1,780,172 22,085 IPC Holdings, Ltd. 827,083 3,580 Old Republic International Corp. 128,665 14,425 PartnerRe Ltd. 782,845 1,300 The PMI Group, Inc. 49,699 33,575 Willis Group Holdings Ltd. 1,118,048 --------------------------------------------------------------------- 4,686,512 --------------------------------------------------------------------- Internet Software & Services -- 0.5% 53,700 CNET Networks, Inc.* 437,118 --------------------------------------------------------------------- Leisure Equipment & Products -- 1.8% 52,925 Marvel Enterprises, Inc.* 1,558,641 --------------------------------------------------------------------- Machinery -- 5.1% 9,125 Eaton Corp. 914,690 27,455 IDEX Corp. 1,020,777 18,800 Navistar International Corp.* 760,084 44,150 Pall Corp. 1,033,110 15,350 SPX Corp.* 738,642 --------------------------------------------------------------------- 4,467,303 --------------------------------------------------------------------- Media -- 6.7% 2,450 Citadel Broadcasting Co.* 48,265 13,710 The E.W. Scripps Co., Class A Shares 1,273,796 19,625 Getty Images, Inc.* 877,238 See Notes to Financial Statements. 17 Travelers Series Fund Inc. | 2003 Annual Report SCHEDULES OF INVESTMENTS (CONTINUED) OCTOBER 31, 2003 SMITH BARNEY MID CAP CORE PORTFOLIO
SHARES SECURITY VALUE - -------------------------------------------------------------------- Media -- 6.7% (continued) 15,730 Imax Corp.* $ 142,341 18,200 Meredith Corp. 883,064 9,450 Pixar, Inc.* 650,254 32,285 Univision Communications Inc., Class A Shares* 1,096,076 1,183 The Washington Post Co., Class B Shares 872,356 - -------------------------------------------------------------------- 5,843,390 - -------------------------------------------------------------------- Metals & Mining -- 0.5% 13,950 Inco Ltd.* 463,140 - -------------------------------------------------------------------- Oil & Gas -- 2.5% 23,195 Murphy Oil Corp. 1,368,041 20,440 Newfield Exploration Co.* 812,081 - -------------------------------------------------------------------- 2,180,122 - -------------------------------------------------------------------- Paper & Forest Products -- 1.8% 37,875 Bowater Inc. (a) 1,546,436 - -------------------------------------------------------------------- Personal Products -- 2.2% 17,580 Alberto-Culver Co., Class A Shares 1,114,396 21,950 The Estee Lauder Cos., Inc., Class A Shares 820,710 - -------------------------------------------------------------------- 1,935,106 - -------------------------------------------------------------------- Pharmaceuticals -- 1.1% 15,700 Medicis Pharmaceutical Corp., Class A Shares 994,595 - -------------------------------------------------------------------- Real Estate -- 0.5% 13,747 The St. Joe Co. 454,201 - -------------------------------------------------------------------- Road & Rail -- 0.9% 32,975 Heartland Express, Inc. 819,099 - -------------------------------------------------------------------- Semiconductor Equipment & Products -- 4.9% 18,580 Actel Corp.* 501,288 50,775 ASML Holding N.V., New York Registered Shares* 891,101 83,950 Integrated Device Technology, Inc.* 1,318,015 15,800 International Rectifier Corp.* 754,134 27,425 Lam Research Corp.* 788,194 - -------------------------------------------------------------------- 4,252,732 - -------------------------------------------------------------------- Software -- 9.5% 10,925 Adobe Systems, Inc. 478,952 42,125 Amdocs Ltd.* 904,002 91,075 BEA Systems, Inc.* 1,265,942 24,930 Mercury Interactive Corp.* 1,157,749 67,950 Novell, Inc.* 398,866 86,850 Quest Software, Inc.* 1,294,065 36,900 Siebel Systems, Inc.* 464,571
See Notes to Financial Statements. 18 Travelers Series Fund Inc. | 2003 Annual Report SCHEDULES OF INVESTMENTS (CONTINUED) OCTOBER 31, 2003 SMITH BARNEY MID CAP CORE PORTFOLIO
SHARES SECURITY VALUE - --------------------------------------------------------------------------------------------- Software -- 9.5% (continued) 22,450 Take-Two Interactive Software, Inc.* $ 887,898 41,115 VERITAS Software Corp.* 1,486,307 - --------------------------------------------------------------------------------------------- 8,338,352 - --------------------------------------------------------------------------------------------- Specialty Retail -- 4.5% 9,300 Abercrombie & Fitch Co., Class A Shares* 265,050 15,500 CarMax, Inc.* 488,405 33,265 Christopher & Banks Corp. 971,338 30,675 PETsMART, Inc. 785,587 40,675 Williams-Sonoma, Inc.* 1,437,048 - --------------------------------------------------------------------------------------------- 3,947,428 - --------------------------------------------------------------------------------------------- Textiles & Apparel -- 0.0% 1,205 Carter's, Inc.* 33,740 - --------------------------------------------------------------------------------------------- Trading Companies & Distributors -- 2.5% 14,140 CDW Corp. 849,107 29,375 Fastenal Co. (a) 1,306,306 - --------------------------------------------------------------------------------------------- 2,155,413 - --------------------------------------------------------------------------------------------- Water Utilities -- 0.6% 22,150 Philadelphia Suburban Corp. 523,183 - --------------------------------------------------------------------------------------------- TOTAL COMMON STOCK (Cost -- $70,771,861) 82,826,995 - --------------------------------------------------------------------------------------------- FACE AMOUNT SECURITY VALUE - --------------------------------------------------------------------------------------------- REPURCHASE AGREEMENT -- 5.5% $4,844,000 Merrill Lynch & Co., Inc., 0.990% due 11/3/03; Proceeds at maturity -- $4,844,400; (Fully collateralized by U.S. Treasury Inflationary Index Notes and Bonds, 0.000% to 3.625% due 7/15/12 to 4/15/28; Market value -- $4,940,911) (Cost -- $4,844,000) 4,844,000 - --------------------------------------------------------------------------------------------- TOTAL INVESTMENTS -- 100.0% (Cost -- $75,615,861**) $87,670,995 - ---------------------------------------------------------------------------------------------
* Non-income producing security. + Subsequent to the reporting period, the company changed its name to Biogen Idec Inc. due to a merger. (a) All or a portion of this security is segregated for open futures contracts commitments. (b) A portion of this security is held as collateral for open futures contracts commitments. ** Aggregate cost for Federal income tax purposes is $76,021,903. See Notes to Financial Statements. 19 Travelers Series Fund Inc. | 2003 Annual Report STATEMENTS OF ASSETS AND LIABILITIES OCTOBER 31, 2003
Smith Barney Smith Barney Aggressive Growth Mid Cap Core Portfolio Portfolio - --------------------------------------------------------------------------------------------- ASSETS: Investments, at value (Cost -- $625,823,460 and $70,771,861, respectively) $557,000,167 $82,826,995 Repurchase agreements, at value (Cost -- $72,511,000 and $4,844,000, respectively) 72,511,000 4,844,000 Cash 1,548 88 Dividends and interest receivable 45,638 36,456 Receivable for Fund shares sold 32,035 183,030 Receivable for securities sold -- 352,504 Receivable from broker -- variation margin -- 3,635 Other receivables 61,715 5,910 - --------------------------------------------------------------------------------------------- Total Assets 629,652,103 88,252,618 - --------------------------------------------------------------------------------------------- LIABILITIES: Payable for securities purchased 4,906,583 1,318,636 Management fee payable 416,558 53,173 Payable for Fund shares reacquired 399,429 185 Accrued expenses 45,654 22,278 - --------------------------------------------------------------------------------------------- Total Liabilities 5,768,224 1,394,272 - --------------------------------------------------------------------------------------------- Total Net Assets $623,883,879 $86,858,346 - --------------------------------------------------------------------------------------------- NET ASSETS: Par value of capital shares $ 546 $ 70 Capital paid in excess of par value 698,864,463 83,733,656 Accumulated net realized loss from investment transactions and futures contracts (6,157,837) (8,983,796) Net unrealized appreciation (depreciation) of investments and futures contracts (68,823,293) 12,108,416 - --------------------------------------------------------------------------------------------- Total Net Assets $623,883,879 $86,858,346 - --------------------------------------------------------------------------------------------- Shares Outstanding 54,563,714 7,030,721 - --------------------------------------------------------------------------------------------- Net Asset Value $ 11.43 $ 12.35 - ---------------------------------------------------------------------------------------------
See Notes to Financial Statements. 20 Travelers Series Fund Inc. | 2003 Annual Report STATEMENTS OF OPERATIONS FOR THE YEAR ENDED OCTOBER 31, 2003
Smith Barney Smith Barney Aggressive Growth Mid Cap Core Portfolio Portfolio - ---------------------------------------------------------------------------------------- INVESTMENT INCOME: Dividends $ 1,230,012 $ 516,461 Interest 427,279 32,129 Less: Foreign withholding tax (17,504) (2,539) - --------------------------------------------------------------------------------------- Total Investment Income 1,639,787 546,051 - --------------------------------------------------------------------------------------- EXPENSES: Management fees (Note 2) 3,940,249 496,901 Audit and legal 31,837 19,006 Custody 24,248 24,392 Shareholder communications 22,672 11,798 Directors' fees 11,702 2,981 Shareholder servicing fees 4,585 4,998 Other 3,766 3,279 - --------------------------------------------------------------------------------------- Total Expenses 4,039,059 563,355 - --------------------------------------------------------------------------------------- Net Investment Loss (2,399,272) (17,304) - --------------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FUTURES CONTRACTS (NOTES 3 AND 5): Realized Gain (Loss) From: Investment transactions (3,239,861) 1,814,808 Futures contracts -- 197,244 - --------------------------------------------------------------------------------------- Net Realized Gain (Loss) (3,239,861) 2,012,052 - --------------------------------------------------------------------------------------- Change in Net Unrealized Appreciation (Depreciation) of Investments and Futures Contracts: Beginning of year (186,711,871) (529,248) End of year (68,823,293) 12,108,416 - --------------------------------------------------------------------------------------- Change in Net Unrealized Appreciation (Depreciation) 117,888,578 12,637,664 - --------------------------------------------------------------------------------------- Net Gain on Investments and Futures Contracts 114,648,717 14,649,716 - --------------------------------------------------------------------------------------- Increase in Net Assets From Operations $ 112,249,445 $14,632,412 - ---------------------------------------------------------------------------------------
See Notes to Financial Statements. 21 Travelers Series Fund Inc. | 2003 Annual Report STATEMENTS OF CHANGES IN NET ASSETS
For the Years Ended October 31, Smith Barney Aggressive Growth Portfolio 2003 2002 - ----------------------------------------------------------------------------------- OPERATIONS: Net investment loss $ (2,399,272) $ (2,098,569) Net realized loss (3,239,861) (2,615,597) (Increase) decrease in net unrealized depreciation 117,888,578 (139,378,239) - ---------------------------------------------------------------------------------- Increase (Decrease) in Net Assets From Operations 112,249,445 (144,092,405) - ---------------------------------------------------------------------------------- FUND SHARE TRANSACTIONS (NOTE 6): Net proceeds from sale of shares 113,070,096 227,995,910 Cost of shares reacquired (16,650,404) (34,982,576) - ---------------------------------------------------------------------------------- Increase in Net Assets From Fund Share Transactions 96,419,692 193,013,334 - ---------------------------------------------------------------------------------- Increase in Net Assets 208,669,137 48,920,929 NET ASSETS: Beginning of year 415,214,742 366,293,813 - ---------------------------------------------------------------------------------- End of year $623,883,879 $ 415,214,742 - ----------------------------------------------------------------------------------
See Notes to Financial Statements. 22 Travelers Series Fund Inc. | 2003 Annual Report STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
For the Years Ended October 31, Smith Barney Mid Cap Core Portfolio 2003 2002 - ------------------------------------------------------------------------------------------- OPERATIONS: Net investment loss $ (17,304) $ (52,082) Net realized gain (loss) 2,012,052 (8,961,877) Increase in net unrealized appreciation 12,637,664 2,519,784 - ------------------------------------------------------------------------------------------ Increase (Decrease) in Net Assets From Operations 14,632,412 (6,494,175) - ------------------------------------------------------------------------------------------ DISTRIBUTIONS TO SHAREHOLDERS FROM: Net investment income -- (58,090) - ------------------------------------------------------------------------------------------ Decrease in Net Assets From Distributions to Shareholders -- (58,090) - ------------------------------------------------------------------------------------------ FUND SHARE TRANSACTIONS (NOTE 6): Net proceeds from sale of shares 18,586,469 32,112,318 Net asset value of shares issued for reinvestment of dividends -- 58,090 Cost of shares reacquired (3,004,974) (3,349,324) - ------------------------------------------------------------------------------------------ Increase in Net Assets From Fund Share Transactions 15,581,495 28,821,084 - ------------------------------------------------------------------------------------------ Increase in Net Assets 30,213,907 22,268,819 NET ASSETS: Beginning of year 56,644,439 34,375,620 - ------------------------------------------------------------------------------------------ End of year $86,858,346 $56,644,439 - ------------------------------------------------------------------------------------------
See Notes to Financial Statements. 23 Travelers Series Fund Inc. | 2003 Annual Report NOTES TO FINANCIAL STATEMENTS 1. Significant Accounting Policies The Smith Barney Aggressive Growth Portfolio and Smith Barney Mid Cap Core Portfolio ("Fund(s)") are separate diversified investment funds of the Travelers Series Fund Inc. ("Company"). The Company, 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 thirteen other separate investment funds: Smith Barney Large Cap Value, Strategic Equity (formerly known as Alliance Growth), Van Kampen Enterprise, Smith Barney International All Cap Growth, Travelers Managed Income, Pioneer Strategic Income (formerly known as Putnam Diversified Income), Salomon Brothers Strategic Total Return Bond, Smith Barney High Income, MFS Total Return, Smith Barney Money Market, AIM Capital Appreciation, Smith Barney Large Capitalization Growth and SB Adjustable Rate Income Portfolios. Shares of the Fund 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 in the primary exchange on which they are traded; securities traded in the over-the-counter market and listed securities for which no sales prices were 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 24 Travelers Series Fund Inc. | 2003 Annual Report NOTES TO FINANCIAL STATEMENTS (CONTINUED) distribute dividends and capital gains, if any, at least 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 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 is determined in accordance with income tax regulations which may differ from accounting principles generally accepted in the United States of America. At October 31, 2003, reclassifications were made to the Fund's capital accounts to reflect permanent book/tax differences and income and gains available for distributions under income tax regulations. Accordingly, the accumulated net investment loss amounting to $2,399,272 and $17,304 was reclassified to paid-in-capital for the Aggressive Growth Portfolio and Mid Cap Core Portfolio, respectively. Net investment income, net realized gains and net assets were not affected by this change; (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 Aggressive Growth Portfolio ("SBAG") and Smith Barney Mid Cap Core Portfolio ("SBMCC"). SBAG and SBMCC pay SBFM a management fee calculated at the annual rates of 0.80% and 0.75%, respectively, of the average daily net assets of each Fund. These fees are calculated daily and paid monthly. 25 Travelers Series Fund Inc. | 2003 Annual Report NOTES TO FINANCIAL STATEMENTS (CONTINUED) Citicorp Trust Bank, fsb. ("CTB"), another subsidiary of Citigroup, acts as the Funds' transfer agent and PFPC Inc. ("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 year ended October 31, 2003, each Fund paid transfer agent fees of $5,000 to CTB. For the year ended October 31, 2003, Citigroup Global Markets Inc. ("CGM") (formerly known as Salomon Smith Barney Inc.), another indirect wholly-owned subsidiary of Citigroup, received brokerage commissions totaling $9,483. Most of the officers and one Director of the Company are employees of Citigroup or its affiliates. 3. Investments During the year ended October 31, 2003, the aggregate cost of purchases and proceeds from sales of investments (including maturities of long-term investments, but excluding short-term investments) were as follows: SBAG SBMCC - ------------------------------------------------------------------ Purchases $52,932,857 $79,134,932 - ------------------------------------------------------------------ Sales 1,087,846 62,687,277 - ------------------------------------------------------------------ At October 31, 2003, the aggregate gross unrealized appreciation and depreciation of investments for Federal income tax purposes were as follows: SBAG SBMCC - --------------------------------------------------------------------- Gross unrealized appreciation $ 72,854,311 $12,913,243 Gross unrealized depreciation (143,002,103) (1,264,151) - --------------------------------------------------------------------- Net unrealized appreciation (depreciation) $ (70,147,792) $11,649,092 - --------------------------------------------------------------------- 4. Repurchase Agreements The Funds purchase (and the 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 26 Travelers Series Fund Inc. | 2003 Annual Report NOTES TO FINANCIAL STATEMENTS (CONTINUED) value (plus accrued interest) of the collateral in amounts at least equal to the repurchase price. 5. Futures Contracts Securities or cash equal to the initial margin amount are either deposited with the broker or segregated by the custodian upon entering into the futures contract. Additional securities are also segregated up to the current market value of the futures contract. During the period the futures contract is open, changes in the value of the contract are recognized as unrealized gains or losses by "marking-to-market" on a daily basis to reflect the market value of the contract at the end of each day's trading. Variation margin payments are received or made and recognized as assets due from or liabilities due to broker, depending upon whether unrealized gains or losses are incurred. When the contract is closed, the Funds record a realized gain or loss equal to the difference between the proceeds from (or cost of ) the closing transactions and the Fund's basis in the contract. The Funds enter into such contracts typically to hedge a portion of their portfolio. The Funds bear the market risk that arise from changes in the value of the financial instruments and securities indices. At October 31, 2003, SBMCC had the following open futures contracts:
Number of Basis Market Unrealized Contracts Expiration Value Value Gain ----------------------------------------------------------------------- Contracts To Buy: S&P MidCap 400 6 12/03 $1,592,068 $1,645,350 $53,282 -----------------------------------------------------------------------
At October 31, 2003, SBAG did not hold any futures contracts. 6. Capital Shares At October 31, 2003, the Company 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. 27 Travelers Series Fund Inc. | 2003 Annual Report NOTES TO FINANCIAL STATEMENTS (CONTINUED) Transactions in shares of each Fund were as follows: Year Ended Year Ended October 31, 2003 October 31, 2002 -------------------------------------------------------------------------- Smith Barney Aggressive Growth Portfolio Shares sold 10,654,092 19,660,697 Shares reacquired (1,773,901) (3,715,768) -------------------------------------------------------------------------- Net Increase 8,880,191 15,944,929 -------------------------------------------------------------------------- Smith Barney Mid Cap Core Portfolio Shares sold 1,721,743 2,750,365 Shares issued on reinvestment -- 5,832 Shares reacquired (298,046) (322,317) -------------------------------------------------------------------------- Net Increase 1,423,697 2,433,880 -------------------------------------------------------------------------- 7. Capital Loss Carryforward At October 31, 2003, the SBAG and SBMCC had, for Federal income tax purposes, approximately $4,833,000 and $8,524,000, respectively, of unused capital loss carryforwards available to offset future capital gains. To the extent that these capital carryforward losses are used to offset capital gains, it is probable that the gains so offset will not be distributed. The amount and year of expiration for each carryfoward loss is indicated below. Expiration occurs on October 31 of the year indicated:
2009 2010 2011 ------------------------------------ SBAG $302,000 $1,291,000 $3,240,000 ------------------------------------ SBMCC -- 8,524,000 -- ------------------------------------
8. Income Tax Information and Distributions to Shareholders At October 31, 2003, the tax basis components of distributable earnings were:
SBAG SBMCC ----------------------------------------------------------------- Accumulated capital losses $ (4,833,338) $(8,524,472) ----------------------------------------------------------------- Unrealized appreciation (depreciation) (70,147,792) 11,649,092 -----------------------------------------------------------------
The difference between book basis and tax basis unrealized appreciation is attributable primarily to wash sale loss deferrals. For the year ended October 31, 2003, the Funds did not make any distributions. 28 Travelers Series Fund Inc. | 2003 Annual Report NOTES TO FINANCIAL STATEMENTS (CONTINUED) 9. Subsequent Event The Funds have received the following information from Citigroup Asset Management ("CAM"), the Citigroup business unit which includes the Funds' Investment Manager and other investment advisory companies, all of which are indirect, wholly-owned subsidiaries of Citigroup. CAM is reviewing its entry, through an affiliate, into the transfer agent business in the period 1997-1999. As CAM currently understands the facts, at the time CAM decided to enter the transfer agent business, CAM sub-contracted for a period of five years certain of the transfer agency services to a third party and also concluded a revenue guarantee agreement with this sub-contractor providing that the sub-contractor would guarantee certain benefits to CAM or its affiliates (the "Revenue Guarantee Agreement"). In connection with the subsequent purchase of the sub-contractor's business by an affiliate of the current sub-transfer agent (PFPC Inc.) used by CAM on many of the funds it manages, this Revenue Guarantee Agreement was amended eliminating those benefits in exchange for arrangements that included a one-time payment from the sub-contractor. The Boards of CAM-managed funds (the "Boards") were not informed of the Revenue Guarantee Agreement with the sub-contractor at the time the Boards considered and approved the transfer agent arrangements. Nor were the Boards informed of the subsequent amendment to the Revenue Guarantee Agreement when that occurred. CAM has begun to take corrective actions. CAM will pay to the applicable funds $16 million (plus interest) that CAM and its affiliates received from the Revenue Guarantee Agreement and its amendment. CAM also plans an independent review to verify that the transfer agency fees charged by CAM were fairly priced as compared to competitive alternatives. CAM is instituting new procedures and making changes designed to ensure no similar arrangements are entered into in the future. CAM has briefed the SEC, the New York State Attorney General and other regulators with respect to this matter, as well as the U.S. Attorney who is investigating the matter. CAM is cooperating with governmental authorities on this matter, the ultimate outcome of which is not yet determinable. 29 Travelers Series Fund Inc. | 2003 Annual Report FINANCIAL HIGHLIGHTS For a share of capital stock outstanding throughout the year ended October 31, unless otherwise noted:
Smith Barney Aggressive Growth Portfolio 2003 2002 2001 2000/(1)(2)/ - ----------------------------------------------------------------------------------------------- Net Asset Value, Beginning of Year $ 9.09 $12.32 $15.03 $10.00 - --------------------------------------------------------------------------------------------- Income (Loss) From Operations: Net investment loss (0.04) (0.05) (0.05) (0.03) Net realized and unrealized gain (loss) 2.38 (3.18) (2.66) 5.07 - --------------------------------------------------------------------------------------------- Total Income (Loss) From Operations 2.34 (3.23) (2.71) 5.04 - --------------------------------------------------------------------------------------------- Less Distributions From: Capital -- -- -- (0.01) - --------------------------------------------------------------------------------------------- Total Distributions -- -- -- (0.01) - --------------------------------------------------------------------------------------------- Net Asset Value, End of Year $11.43 $ 9.09 $12.32 $15.03 - --------------------------------------------------------------------------------------------- Total Return/(3)/ 25.74% (26.22)% (18.03)% 50.41% - --------------------------------------------------------------------------------------------- Net Assets, End of Year (000s) $623,884 $415,215 $366,294 $164,553 - --------------------------------------------------------------------------------------------- Ratios to Average Net Assets: Expenses/(4)/ 0.82% 0.83% 0.84% 0.99% Net investment loss (0.49) (0.50) (0.40) (0.21) - --------------------------------------------------------------------------------------------- Portfolio Turnover Rate 0% 9% 3% 0% - ---------------------------------------------------------------------------------------------
(1) For the period November 1, 1999 (commencement of operations) to October 31, 2000. (2) Per share amounts have been calculated using the monthly average shares method. (3) Total returns do not reflect expenses associated with the separate account such as administrative fees, account charges and surrender charges which, if reflected would reduce the total returns for all periods shown. (4) As a result of a voluntary expense limitation, the expense ratio will not exceed 1.00%. 30 Travelers Series Fund Inc. | 2003 Annual Report FINANCIAL HIGHLIGHTS (CONTINUED) For a share of capital stock outstanding throughout the year ended October 31, unless otherwise noted:
Smith Barney Mid Cap Core Portfolio 2003 2002 2001 2000/(1)/ - ---------------------------------------------------------------------------------- Net Asset Value, Beginning of Year $10.10 $10.83 $14.22 $10.00 - -------------------------------------------------------------------------------- Income (Loss) From Operations: Net investment income (loss)/(2)/ (0.00)* (0.02) 0.02 0.06 Net realized and unrealized gain (loss) 2.25 (0.70) (3.36) 4.17 - -------------------------------------------------------------------------------- Total Income (Loss) From Operations 2.25 (0.72) (3.34) 4.23 - -------------------------------------------------------------------------------- Less Distributions From: Net investment income -- (0.01) (0.05) (0.01) - -------------------------------------------------------------------------------- Total Distributions -- (0.01) (0.05) (0.01) - -------------------------------------------------------------------------------- Net Asset Value, End of Year $12.35 $10.10 $10.83 $14.22 - -------------------------------------------------------------------------------- Total Return/(3)/ 22.28% (6.64)% (23.56)% 42.36% - -------------------------------------------------------------------------------- Net Assets, End of Year (000s) $86,858 $56,644 $34,376 $17,498 - -------------------------------------------------------------------------------- Ratios to Average Net Assets: Expenses/(2)(4)/ 0.85% 0.90% 0.95% 0.95% Net investment income (loss) (0.03) (0.10) 0.25 0.72 - -------------------------------------------------------------------------------- Portfolio Turnover Rate 98% 79% 45% 61% - --------------------------------------------------------------------------------
(1) For the period November 1, 1999 (commencement of operations) to October 31, 2000. (2) The manager has agreed to waive a portion of its management fee for the year ended October 31, 2001 and the period ended October 31, 2000. If such fees were not waived, the per share decreases to net investment income and the actual expense ratios would have been as follows:
Per Share Decreases to Expense Ratios Net Investment Income Without Fee Waivers ---------------------- ------------------- 2001 $0.00* 0.96% 2000 0.04 1.46
(3) Performance figures may reflect fee waivers and/or expense reimbursements. Past performance is no guarantee of future results. In the absence of fee waivers and/or expense reimbursements, the total return would be reduced. Total returns do not reflect expenses associated with the separate account such as administrative fees, account charges and surrender charges which, if reflected would reduce the total returns for all periods shown. (4) As a result of a voluntary expense limitation, the expense ratio will not exceed 0.95%. * Amount represents less than $0.01 per share. 31 Travelers Series Fund Inc. | 2003 Annual Report INDEPENDENT AUDITORS' REPORT The Shareholders and Board of Directors of Travelers Series Fund Inc.: We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of the Smith Barney Aggressive Growth and Smith Barney Mid Cap Core Portfolios ("Fund(s)") of Travelers Series Fund Inc. ("Company") as of October 31, 2003, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the years in the two-year period then ended and the financial highlights for each of the years in the four-year period then ended. These financial statements and financial highlights are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of October 31, 2003, by correspondence with the custodian or brokers. As to securities purchased or sold but not yet received or delivered, we performed other appropriate auditing procedures. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Funds of the Company as of October 31, 2003, and the results of their operations for the year then ended, the changes in their net assets for each of the years in the two-year period then ended and the financial highlights for each of the years in the four- year period then ended, in conformity with accounting principles generally accepted in the United States of America. /s/ KPMG LLP New York, New York December 10, 2003 32 Travelers Series Fund Inc. | 2003 Annual Report ADDITIONAL INFORMATION (UNAUDITED) Information about Directors and Officers The business and affairs of the Travelers Series Fund Inc. ("Company") are managed under the direction of the Company's Board of Directors. Information pertaining to the Directors and Officers of the Company is set forth below.
Number of Term of Portfolios Office* and Principal in Fund Other Position(s) Length Occupation(s) Complex Directorships Held with of Time During Past Overseen Held by Name, Address, and Age Fund Served Five Years by Director Director - ------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------- Non-Interested Directors: Abraham E. Cohen Director Since Consultant to Chugai 17 Director of Agouron 444 Madison Avenue 1996 Pharmaceutical Co. Ltd. Pharmaceuticals, Inc., Suite 1201 Akzo Nobel NV, New York, NY 10022 Teva Pharmaceutical Age 67 Inc., Ltd., Chugai Pharmaceutical Co. Ltd., Pharmaceutical Product Development, Inc. and Axonyx Inc.; Chairman of Vasomedical, Inc., Neurobiological Technologies Inc. and Kramex Corp. Robert A. Frankel Director Since Managing Partner of 24 None 1961 Deergrass Way 1999 Robert A. Frankel Carlsbad, CA 92009 Managing Consultants; Age 76 Former Vice President of The Readers Digest Association, Inc. Michael E. Gellert Director Since General Partner of 17 Director of Dalet S.A., 122 East 42nd Street 1999 Windcrest Partners, a Devon Energy Corp., 47th Floor venture capital firm High Speed Access New York, NY 10168 Corp., Human, Inc., Age 72 SEACOR Smit, Inc. and Six Flags, Inc. Rainer Greeven Director Since Attorney, Rainer 17 Director of 630 5th Avenue 1994 Greeven PC Continental Suite 1905 Container Corp. New York, NY 10111 Age 67 Susan M. Heilbron Director Since Owner/Consultant of 17 Director of National P.O. Box 557 1994 Lacey & Heilbron, a public Multiple Sclerosis Chilmark, MA 02535 relations firm Society, New York Age 58 City Chapter
33 Travelers Series Fund Inc. | 2003 Annual Report ADDITIONAL INFORMATION (UNAUDITED) (CONTINUED)
Number of Term of Portfolios Office* and Principal in Fund Other Position(s) Length Occupation(s) Complex Directorships Name, Address, Held with of Time During Past Overseen by Held by and Age Fund Served Five Years Director Director - ------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------ Interested Director: R. Jay Gerken, CFA** Chairman, Since Managing Director of 220 None Citigroup Asset President and 2002 Citigroup Global Markets Management ("CAM") Chief Inc. ("CGM") Chairman, 399 Park Avenue Executive President and Chief New York, NY 10022 Officer Executive Officer of Smith Age 52 Barney Fund Management LLC ("SBFM"), Travelers Investment Adviser, Inc. ("TIA") and Citi Fund Management Inc. ("CFM"); President and Chief Executive Officer of certain mutual funds associated with Citigroup Inc. ("Citigroup"); Formerly Portfolio Manager of Smith Barney Allocation Series Inc. (from 1996-2001) and Smith Barney Growth and Income Fund (from 1996- 2000) Officers: Andrew B. Shoup*** Senior Vice Since Director of CAM; Senior N/A N/A CAM President and 2003 Vice President and Chief 125 Broad Street Chief Administrative Officer of 10th Floor Administrative mutual funds associated New York, NY 10004 Officer with Citigroup; Head of Age 47 International Funds Administration of CAM (from 2001 to 2003); Director of Global Funds Administration of CAM (from 2000 to 2001); Head of U.S. Citibank Funds Administration of CAM (from 1998 to 2000) Richard L. Peteka Chief Since Director of CGM; Chief N/A N/A CAM Financial 2002 Financial Officer and 125 Broad Street Officer and Treasurer of certain 11th Floor Treasurer mutual funds affiliated New York, NY 10004 with Citigroup; Director Age 42 and Head of Internal Control for CAM U.S. Mutual Fund Administration (from 1999-2002); Vice President, Head of Mutual Fund Administration and Treasurer at Oppenheimer Capital (from 1996-1999) Richard A. Freeman Vice President Since Managing Director of N/A N/A CAM and 1999 CGM and Investment 399 Park Avenue Investment Officer of SBFM New York, NY 10022 Officer Age 50
34 Travelers Series Fund Inc. | 2003 Annual Report ADDITIONAL INFORMATION (UNAUDITED) (CONTINUED)
Number of Term of Portfolios Office* and Principal in Fund Other Position(s) Length Occupation(s) Complex Directorships Name, Address, Held with of Time During Past Overseen by Held by and Age Fund Served Five Years Director Director - -------------------------------------------------------------------------------------------------------- Lawrence B. Weissman Vice Since Managing Director of N/A N/A CAM President and 1999 CGM and Investment 300 First Stamford Place Investment Officer of SBFM Stamford, CT 06902 Officer Age 41 Kaprel Ozsolak Controller Since Vice President of CGM; N/A N/A CAM 2002 Controller of certain funds 125 Broad Street associated with Citigroup 11th Floor New York, NY 10004 Age 38 Robert I. Frenkel Secretary*** Since Managing Director and N/A N/A CAM and Chief 2003 General Counsel, Global 300 First Stamford Place Legal Officer Mutual Funds for CAM 4th Floor and its predecessor (since Stamford, CT 06902 1994); Secretary of CFM Age 48 Fund Management Inc.; Secretary and Chief Legal Officer of mutual funds associated with Citigroup
- -------- * Each Director and officer serves until his or her successor has been duly elected and qualified. ** Mr. Gerken is an "interested person" of the Fund as defined in the Investment Company Act of 1940, as amended, because Mr. Gerken is an officer of SBFM and certain of its affiliates. *** As of November 25, 2003. 35 Travelers Series Fund Inc. | 2003 Annual Report TRAVELERS SERIES FUND INC. DIRECTORS INVESTMENT MANAGER Abraham E. Cohen Smith Barney Fund Management LLC Robert A. Frankel Michael E. Gellert CUSTODIAN R. Jay Gerken, CFA State Street Bank and Chairman Trust Company Rainer Greeven Susan M. Heilbron ANNUITY ADMINISTRATION OFFICERS Travelers Annuity Investor Services R. Jay Gerken, CFA One Cityplace President and Chief Hartford, CT 06103-3415 Executive Officer * As of November 25, 2003. Andrew B. Shoup* Senior Vice President and Chief Administrative Officer Richard L. Peteka Chief Financial Officer and Treasurer Richard A. Freeman Vice President and Investment Officer Lawrence B. Weissman, CFA Vice President and Investment Officer Kaprel Ozsolak Controller Robert I. Frenkel Secretary* and Chief Legal Officer Travelers Series Fund Inc. Smith Barney Aggressive Growth Portfolio Smith Barney Mid Cap Core Portfolio The Funds are separate investment funds of the Travelers Series Fund Inc., a Maryland corporation. This report is submitted for the general information of the shareholders of the Travelers Series Fund Inc. -- Smith Barney Aggressive Growth Portfolio and Smith Barney Mid Cap Core Portfolio. 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 IN0903 12/03 03-5782 ITEM 2. CODE OF ETHICS. The registrant has adopted a code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. The Board of Directors of the registrant has determined that Robert A. Frankel, the Chairman of the Board's Audit Committee, possesses the technical attributes identified in Instruction 2(b) of Item 3 to Form N-CSR to qualify as an "audit committee financial expert," and has designated Mr. Frankel as the Audit Committee's financial expert. Mr. Frankel is an "independent" Director pursuant to paragraph (a)(2) of Item 3 to Form N-CSR. 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- 3(c) under the Investment Company Act of 1940, as amended (the "1940 Act")) are effective as of a date within 90 days of the filing date of this report that includes the disclosure required by this paragraph, based on their evaluation of the disclosure controls and procedures required by Rule 30a-3(b) under the 1940 Act and 15d-15(b) under the Securities Exchange Act of 1934. (b) There were no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the registrant's last fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that have materially affected, or are likely to materially affect the registrant's internal control over financial reporting. ITEM 10. EXHIBITS. (a) Code of Ethics attached hereto. Exhibit 99.CODE ETH (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: January 2, 2004 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: January 2, 2004 By: /s/ Richard L. Peteka (Richard L. Peteka) Chief Financial Officer of Travelers Series Fund Inc. Date: January 2, 2004 EX-99.CODE ETH 3 dex99codeeth.txt CODE OF ETHICS June, 2003 EX 99.CODE ETH SARBANES-OXLEY ACT CODE OF ETHICS FOR PRINCIPAL EXECUTIVE AND SENIOR FINANCIAL OFFICERS OF CAM\U.S. REGISTERED INVESTMENT COMPANIES I. Covered Officers/Purpose of the Code This code of ethics (the "Code") for Citigroup Asset Management's ("CAM's") U. S. registered proprietary investment companies (collectively, "Funds" and each a, "Company") applies to each Company's Chief Executive Officer, Chief Administrative Officer, Chief Financial Officer and Controller (the "Covered Officers") for the purpose of promoting: . honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; . full, fair, accurate, timely and understandable disclosure in reports and documents that the Company files with, or submits to, the Securities and Exchange Commission ("SEC") and in other public communications made by the Company; . compliance with applicable laws and governmental rules and regulations; . the prompt internal reporting of violations of the Code to an appropriate person or persons identified in the Code; and . accountability for adherence to the Code. Each Covered Officer should adhere to a high standard of business ethics and should be sensitive to situations that may give rise to actual as well as apparent conflicts of interest. II. Administration of Code The Regional Director of CAM Compliance, North America ("Compliance Officer") is responsible for administration of this Code, including granting pre-approvals (see Section III below) and waivers (as described in Section VI below), applying this Code in specific situations in which questions are presented under it and interpreting this Code in any particular situation. III. Covered Officers Should Ethically Handle Actual and Apparent Conflicts of Interest Overview. A "conflict of interest" occurs when a Covered Officer's private interest interferes with the interests of, or his service to, the Company. For example, a conflict of interest would arise if a Covered Officer, or a member of his family, receives improper personal benefits as a result of his position with the Company. Certain conflicts of interest arise out of the relationships between Covered Officers and the Company and already are subject to conflict of interest provisions in the Investment Company Act of 1940 ("Investment Company Act") and the Investment Advisers Act of 1940 ("Investment Advisers Act"). For example, Covered Officers may not individually engage in certain transactions (such as the purchase or sale of securities or other property) with the Company because of their status as "affiliated persons" of the Company. The compliance programs and procedures of the Company and its investment adviser are designed to prevent, or identify and correct, violations of these provisions. This Code does not, and is not intended to, repeat or replace these programs and procedures, and such conflicts fall outside of the parameters of this Code (see Section VII below). Although typically not presenting an opportunity for improper personal benefit, conflicts arise from, or as a result of, the contractual relationship between a Company and the investment adviser of which the Covered Officers are also officers or employees. As a result, this Code recognizes that the Covered Officers will, in the normal course of their duties (whether formally for a Company or for the adviser, or for both), be involved in establishing policies and implementing decisions that will have different effects on the adviser and a Company. The participation of the Covered Officers in such activities is inherent in the contractual relationship between the Company and the adviser and is consistent with the performance by the Covered Officers of their duties as officers of a Company. Thus, if performed in conformity with the provisions of the Investment Company Act and the Investment Advisers Act, such activities will be deemed to have been handled ethically. In addition, it is recognized by the Funds' Boards of Directors\Trustees ("Boards") that the Covered Officers may also be officers or employees of one or more other investment companies covered by this or other codes. Other conflicts of interest are covered by the Code, even if such conflicts of interest are not subject to provisions in the Investment Company Act and the Investment Advisers Act. The following list provides examples of conflicts of interest under the Code, but Covered Officers should keep in mind that these examples are not exhaustive. The overarching principle is that the personal interest of a Covered Officer should not be placed improperly before the interest of the Company. * * * * Each Covered Officer must: . not use his personal influence or personal relationships improperly to influence investment decisions or financial reporting ( e.g. through fraudulent accounting practices) by the Company whereby the Covered Officer/1/ would benefit personally to the detriment of the Company; or . not cause the Company to take action, or fail to take action, for the individual personal benefit of the Covered Officer rather than for the benefit of the Company; and . not use material non-public knowledge of portfolio transactions made or contemplated for the Company to trade personally or cause others to trade personally in contemplation of the market affect of such transactions. . There are some potential conflict of interest situations that should always be discussed with the Compliance Officer, if material. Examples are as follows: (1) service as a director on the board of any public or private company; (2) any ownership interest in, or any consulting or employment relationship with, any of the Company's service providers, other than its investment adviser, (3) a direct or indirect financial interest in commissions, transaction charges or spreads paid by the Company for effecting portfolio transactions or for selling or redeeming shares other than an interest arising from the Covered Officer's employment, such as compensation or equity ownership; and 4) the receipt of any gifts or the conveyance of any value (including entertainment ) from any company with which the Company has current or prospective business dealings, except: (a) any non-cash gifts of nominal value (nominal value is less than $100); and (b) customary and reasonable meals and entertainment at which the giver is present, such as the occasional business meal or sporting event. IV. Disclosure and Compliance Each Covered Officer: . should be familiar with his or her responsibilities in connection with the disclosure requirements generally applicable to the Company; _______________ /1/ Any activity or relationship that would present a conflict for a Covered Officer would also present a conflict for the Covered Officer if a member of a Covered Officer's family (spouse, minor children and any account over which a Covered Officer is deemed to have beneficial interest) engages in such an activity or has such a relationship. . should not knowingly misrepresent, or knowingly cause others to misrepresent, facts about the Company to others, whether within or outside the Company, including to the Company's directors and auditors, and to governmental regulators and self-regulatory organizations; . should, to the extent appropriate within his or her area of responsibility, consult with other officers and employees of the Funds and the investment adviser with the goal of promoting full, fair, accurate, timely and understandable disclosure in the reports and documents the Funds file with, or submit to, the SEC and in other public communications made by the Funds; and . is responsible to promote compliance with the standards and restrictions imposed by applicable laws, rules and regulations. V. Reporting and Accountability Each Covered Officer must: . upon adoption of the Code (or thereafter as applicable, upon becoming a Covered Officer), affirm in writing to the Board that the Covered Officer has received, read, and understands the Code; . annually thereafter affirm to the Board that he or she has complied with the requirements of the Code; . annually disclose affiliations and other relationships related to conflicts of interest; . not retaliate against any other Covered Officer or any employee of the Funds or their affiliated persons for reports of potential violations that are made in good faith; and . notify the Compliance Officer promptly if he knows of any violation of this Code (failure to do so is itself a violation of this Code). In rendering decisions and interpretations and in conducting investigations of potential violations under the Code, the Compliance Officer may, at his discretion, consult with such persons as he determines to be appropriate, including, but not limited to, a senior legal officer of the Company or its investment adviser or its affiliates, independent auditors or other consultants, subject to any requirement to seek pre-approval from the Company's audit committee for the retention of independent auditors to perform permissible non-audit services. The Funds will follow these procedures in investigating and enforcing the Code: . the compliance Officer will take all appropriate action to investigate any potential violation of which he becomes aware; . if, after investigation the Compliance Officer believes that no violation has occurred, the Compliance Officer is not required to take any further action; . any matter that the Compliance Officer believes is a violation will be reported to the Directors of the Fund who are not "interested persons" as defined in the Investment Company Act the ("Non-interested Directors") . if the Non-interested Directors of the Board concur that a violation has occurred, it will consider appropriate action, which may include review of, and appropriate modifications to, applicable policies and procedures; notification to appropriate personnel of the investment adviser or its board; or a recommendation to dismiss the Covered Officer; and . any changes to or waivers of this Code will, to the extent required, be disclosed as provided by SEC rules The Compliance Officer shall submit an annual report to the Board describing any waivers granted. VI. Waivers/2/ A Covered Officer may request a waiver of any of the provisions of the Code by submitting a written request for such waiver to the Compliance Officer, setting forth the basis of such request and explaining how the waiver would be consistent with the standards of conduct described herein. The Compliance Officer shall review such request and make a determination thereon in writing, which shall be binding. In determining whether to waive any provisions of this Code, the Compliance Officer shall consider whether the proposed waiver is consistent with honest and ethical conduct and other purposes of this Code. VII. Other Policies and Procedures This Code shall be the sole code of ethics adopted by the Funds for purposes of Section 406 of the Sarbanes-Oxley Act and the rules and forms applicable to registered investment companies thereunder. Insofar as other policies or procedures of the Funds, the Funds' investment advisers, principal underwriters, or other service providers govern or purport to govern the behavior or activities of the Covered Officers who are subject to this Code, they are superseded by this Code to the extent that they overlap or conflict with the provisions of this Code. The codes of ethics of the funds and the investment advisers and principal underwriters under Rule 17j-1 of the Investment Company Act and the Citigroup Code of Conduct and Citigroup Statement of Business Practices as well as other policies of the Fund's investment advisers or their affiliates are separate requirements applying to the Covered Officers and others, and are not part of this Code. _________________ /2/ For purposes of this Code, Item 2 of Form N-CSR defines "waiver" as "the approval by a Company of a material departure from a provision of the Code" and includes an"implicit waiver," which means a Company's failure to take action within a reasonable period of time regarding a material departure from a provision of the Code that has been made known to an executive officer of the Company. VIII. Amendments Any amendments to this Code, other than amendments to Exhibits A, B and C must be approved or ratified by a majority vote of the Board, including a majority of Non-interested Directors. IX. Confidentiality All reports and records prepared or maintained pursuant to this Code will be considered confidential and shall be maintained and protected accordingly. Except as otherwise required by law or this Code, such matters shall not be disclosed to anyone other than the appropriate Board and Company and their respective counsel, counsel to the non-Interested Directors or independent auditors or other consultants referred to in Section V above. X. Internal Use The Code is intended solely for the internal use by the Funds and does not constitute an admission, by or on behalf of any Company, as to any fact, circumstance, or legal conclusion. EX-99.CERT 4 dex99cert.txt CERTIFICATION PURSUANT TO SECTION 302 CERTIFICATIONS PURSUANT TO SECTION 302 EX-99.CERT CERTIFICATIONS I, R. Jay Gerken, certify that: 1. I have reviewed this report on Form N-CSR of Travelers Series Fund Inc. - Smith Barney Aggressive Growth Portfolio; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officers and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial data; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: January 2, 2004 /s/ R. Jay Gerken --------------------------------------- R. Jay Gerken Chief Executive Officer I, Richard L. Peteka, certify that: 1. I have reviewed this report on Form N-CSR of Travelers Series Fund Inc. - Smith Barney Aggressive Growth Portfolio; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial information included in this report, and the financial statements on which the financial information is based, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in rule 30a-3(c) under the Investment Company Act) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officers and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial data; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: January 2, 2004 /s/ Richard L. Peteka ---------------------------------- Richard L. Peteka Chief Financial Officer CERTIFICATIONS PURSUANT TO SECTION 302 EX-99.CERT CERTIFICATIONS I, R. Jay Gerken, certify that: 1. I have reviewed this report on Form N-CSR of Travelers Series Fund Inc. - Smith Barney Mid Cap Core Portfolio; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officers and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial data; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: January 2, 2004 /s/ R. Jay Gerken ---------------------------------- R. Jay Gerken Chief Executive Officer I, Richard L. Peteka, certify that: 1. I have reviewed this report on Form N-CSR of Travelers Series Fund Inc. - Smith Barney Mid Cap Core Portfolio; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial information included in this report, and the financial statements on which the financial information is based, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in rule 30a-3(c) under the Investment Company Act) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officers and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial data; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: January 2, 2004 /s/ Richard L. Peteka ---------------------------------- Richard L. Peteka Chief Financial Officer EX-99.906CERT 5 dex99906cert.txt CERTIFICATION PURSUANT TO SECTION 906 CERTIFICATIONS PURSUANT TO SECTION 906 EX-99.906CERT CERTIFICATION R. Jay Gerken, Chief Executive Officer, and Richard L. Peteka, Chief Financial Officer of Travelers Series Fund Inc. - Smith Barney Aggressive Growth Portfolio (the "Registrant"), each certify to the best of his or her knowledge that: 1. The Registrant's periodic report on Form N-CSR for the period ended October 31, 2003 (the "Form N-CSR") fully complies with the requirements of section 15(d) of the Securities Exchange Act of 1934, as amended; and 2. The information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Registrant. Chief Executive Officer Chief Financial Officer Travelers Series Fund Inc. - Travelers Series Fund Inc. - Smith Barney Aggressive Growth Smith Barney Aggressive Growth Portfolio Portfolio /s/ R. Jay Gerken /s/ Richard L. Peteka - --------------------------- --------------------------- R. Jay Gerken Richard L. Peteka Date: January 2, 2004 Date: January 2, 2004 This certification is being furnished to the Securities and Exchange Commission solely pursuant to 18 U.S.C. (S) 1350 and is not being filed as part of the Form N-CSR with the Commission. CERTIFICATIONS PURSUANT TO SECTION 906 EX-99.906CERT CERTIFICATION R. Jay Gerken, Chief Executive Officer, and Richard L. Peteka, Chief Financial Officer of Travelers Series Fund Inc. - Smith Barney Mid Cap Core Portfolio (the "Registrant"), each certify to the best of his or her knowledge that: 1. The Registrant's periodic report on Form N-CSR for the period ended October 31, 2003 (the "Form N-CSR") fully complies with the requirements of section 15(d) of the Securities Exchange Act of 1934, as amended; and 2. The information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Registrant. Chief Executive Officer Chief Financial Officer Travelers Series Fund Inc. - Travelers Series Fund Inc. - Smith Barney Mid Cap Core Portfolio Smith Barney Mid Cap Core Portfolio /s/ R. Jay Gerken /s/ Richard L. Peteka - --------------------------- --------------------------- R. Jay Gerken Richard L. Peteka Date: January 2, 2004 Date: January 2, 2004 This certification is being furnished to the Securities and Exchange Commission solely pursuant to 18 U.S.C. (S) 1350 and is not being filed as part of the Form N-CSR with the Commission. -----END PRIVACY-ENHANCED MESSAGE-----