-----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, IhZjL7tS8Uj+6wlcQowcKL7AOLVKnRtqmwrGDUMq77bco8zFASkMnqwfG7ndxP3e 4knmOi00tq80jEYutF1bNA== 0001193125-04-017992.txt : 20040210 0001193125-04-017992.hdr.sgml : 20040210 20040210113337 ACCESSION NUMBER: 0001193125-04-017992 CONFORMED SUBMISSION TYPE: N-CSR/A PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20031031 FILED AS OF DATE: 20040210 EFFECTIVENESS DATE: 20040210 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/A SEC ACT: 1940 Act SEC FILE NUMBER: 811-08372 FILM NUMBER: 04580389 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/A 1 dncsra.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. AIM CAPITAL APPRECIATION PORTFOLIO SMITH BARNEY LARGE CAPITALIZATION GROWTH 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: AIM Capital Appreciation Portfolio................ 3 Smith Barney Large Capitalization Growth Portfolio 5 Fund Performance: AIM Capital Appreciation Portfolio................ 7 Smith Barney Large Capitalization Growth Portfolio 9 Schedules of Investments........................... 11 Statements of Assets and Liabilities............... 19 Statements of Operations........................... 20 Statements of Changes in Net Assets................ 21 Notes to Financial Statements...................... 23 Financial Highlights............................... 32 Independent Auditors' Report....................... 34 Additional Information............................. 35 Tax Information.................................... 38
LETTER FROM THE CHAIRMAN [PHOTO] R. Jay Gerken R. JAY GERKEN, CFA Chairman, President and Chief Executive Officer Dear Shareholder, The funds' fiscal year was a time of heightened market volatility. As the period began last November, the economic environment was dominated by geopolitical tension, corporate scandals, declining consumer confidence and concerns regarding the general strength of the global economy. The months leading up to the war in Iraq were times of apprehension and cautiousness. Businesses and consumers alike chose to slow their spending due to war-related uncertainty. Consequently, the U.S. economy and the stock market in general remained weak through the first quarter of 2003. However, when the U.S.-led coalition entered Iraq in late March and investors turned their attention to a pending stabilization in the outlook for corporate earnings, the U.S. stock market rebounded. Unlike previous rallies over the past three years, this one proved sustainable, and stock prices generally rose through the end of the funds' fiscal year in October. 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 18, 2003 1 Travelers Series Fund Inc. | 2003 Annual Report 2 Travelers Series Fund Inc. | 2003 Annual Report PERFORMANCE OF THE FUNDS AS OF OCTOBER 31, 2003/1/
6 Months 12 Months AIM Capital Appreciation Portfolio 18.30% 19.78% S&P 500 Index/2/ 15.62% 20.79% Average of Lipper variable multi-cap growth funds/3/ 21.85% 27.50% Smith Barney Large Capitalization Growth Portfolio 27.76% 39.16% Russell 1000 Growth Index/4/ 16.81% 21.81% S&P 500 Index/2/ 15.62% 20.79% Average of Lipper variable large-cap growth funds/5/ 15.86% 19.61%
/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 S&P 500 Index is a market capitalization-weighted index of 500 widely held common stocks. 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 104 funds for the 12-month period, in the fund's Lipper peer group including the reinvestment of dividends and capital gains. /4/Effective June 11, 2003, management of the fund determined that the Russell 1000 Growth Index, rather than the S&P 500 Index, was a more appropriate index reflecting more closely the composition of the portfolio's securities. The Russell 1000 Growth Index is an unmanaged index considered indicative of the growth-oriented domestic stock market in general and is comprised of stocks in the Russell 1000 Index that have higher price-to-book ratios and higher forecasted growth values. Please note that an investor cannot invest directly in an index. /5/Returns are based on the period ended October 31, 2003, calculated among 156 funds for the six-month period and 153 funds for the 12-month period, in the fund's Lipper peer group including the reinvestment of dividends and capital gains. MANAGER OVERVIEW AIM Capital Appreciation Portfolio Performance Update For the 12 months ended October 31, 2003, the fund returned 19.78%. In comparison, the fund underperformed its unmanaged benchmark, the S&P 500 Index,/i/ which returned 20.79% for the same period. The fund also underperformed its Lipper peer group of variable multi-cap growth funds, which had an average return of 27.50%, for the same period./6/ The fund's underperformance we believe was mainly attributed to stock selection as well as to the fund's underweighting of the technology sector, which experienced significant price appreciation during the period. Contributors to Fund Performance/7/ The broad market posted gains during the year ended October 31, 2003, as the economic recovery continued at a somewhat choppy pace. Many of the major financial indices rallied during the fourth quarter of 2002 and experienced volatility in the first half of 2003 as geopolitical tensions escalated in Iraq. In the final months of the period, the markets continued to advance in response to the strengthening economy and better-than-expected earnings reports from numerous corporations. Against this backdrop, the fund underperformed the broad market as represented by the S&P 500 Index. Relative to its benchmark, the fund benefited from the performance of the health care and financial sectors due to generally good stock selection. In particular, the health care sector was helped by the pharmaceutical stock, Teva Pharmaceutical Industries Ltd., which produces drugs in all major treatment categories. We also continued to decrease interest rate sensitivity, and in turn added more economically sensitive and market sensitive stocks, such as those of credit card companies. /6/Lipper Inc. is a major independent mutual-fund tracking organization. Returns are based on the period ended October 31, 2003, calculated among 104 funds for the 12-month period, in the fund's Lipper peer group including the reinvestment of dividends and capital gains. /7/The fund's top 10 holdings as of October 31, 2003 were: Microsoft Corp. (2.80%), Microchip Technology Inc. (2.11%), Fiserv, Inc. (1.79%), Dell Inc. (1.72%), Biomet, Inc. (1.72%), CDW Corp. (1.70%), Analog Devices, Inc. (1.69%), Teva Pharmaceutical Industries Ltd. (1.63%), Cisco Systems, Inc. (1.60%), Merrill Lynch & Co., Inc. (1.52%). 3 Travelers Series Fund Inc. | 2003 Annual Report Relative performance was negatively impacted by the industrials sector. Lockheed Martin Corp. and L-3 Communications Holdings, Inc., two defensive stocks that deal with various military equipment such as aircrafts, information services and specialized communication systems, detracted from performance. The fund's weighting in the information technology sector was basically unchanged during the period. However, we made selected adjustments within various information technology sub-sectors. Specifically, we sold Citrix Systems, Inc. and Nokia Oyj and added Agilent Technologies, Inc., Corning Inc. and Foundry Networks, Inc. As of October 31, 2003, the fund was positioned with approximately 60% of its assets in stocks we believe have earnings momentum and 40% in companies we classify as core growth. This position contrasts considerably with the previous year, in which its investments were in approximately 60% core-growth and 40% earnings-momentum stocks. We emphasized earnings-momentum securities in the past in anticipation of a market turnaround. Thank you for your investment in the AIM Capital Appreciation Portfolio. We appreciate that you have entrusted us to manage your money and value our relationship with you. Sincerely, /s/ Kenneth A. Zschappel Kenneth A. Zschappel Lead Portfolio Manager AIM Capital Management, Inc. November 18, 2003 4 Travelers Series Fund Inc. | 2003 Annual Report Smith Barney Large Capitalization Growth Portfolio Special Shareholder Notice Effective June 11, 2003, fund management determined that the Russell 1000 Growth Index,/ii/ rather than the S&P 500 Index,/i/ was a more appropriate benchmark index, reflecting more closely the composition of the fund's securities. Performance Update/8/ For the 12 months ended October 31, 2003, the fund returned 39.16%. In comparison, the fund outperformed both its unmanaged benchmarks, the Russell 1000 Growth Index and the S&P 500 Index, which returned 21.81% and 20.79%, respectively, for the same period. The fund also outperformed its Lipper peer group of variable large-cap growth funds, which had an average return of 19.61%, for the same period./9/ The fund's outperformance was mainly due to judicious stock choices and select sector overweightings. When the period began, rising tensions and the eventual armed conflict between U.S.-led coalition forces and Iraq, the sudden and rapid spread of Severe Acute Respiratory Syndrome ("SARS"), as well as ongoing revelations of misdeeds by a number of corporations and their officers had a profoundly negative impact on business, consumer and investor confidence and on an already fragile global economy. The end of major hostilities in Iraq removed some of the uncertainties that had slowed economic recovery in the U.S. Throughout the period, the Fed continued its highly accommodative monetary policy, maintaining key interest rates at four-decade lows as additional tax relief measures worked their way through the U.S. Congress. Toward the end of the period, this accommodative policy and improving investor confidence buoyed the equity markets, offering some measure of relief for equity investors. By the end of the third quarter of 2003, for the first time since 1999, many of the major U.S. stock indexes had posted back-to-back quarterly gains. /8/The fund's top ten holdings as of October 31, 2003 were: Amazon.com, Inc. (7.04%), Intel Corp. (5.42%), Berkshire Hathaway Inc., Class A Shares (4.57%), The Home Depot, Inc. (4.34%), Merrill Lynch & Co., Inc. (4.28%), Genentech, Inc. (4.08%), Dell Inc. (4.03%), The Gillette Co. (3.74%), Texas Instruments Inc. (3.56%), Pfizer Inc. (3.55%). /9/Lipper Inc. is a major independent mutual-fund tracking organization. Returns are based on the period ended October 31, 2003, calculated among 153 funds for the 12-month period, in the fund's Lipper peer group including the reinvestment of dividends and capital gains. 5 Travelers Series Fund Inc. | 2003 Annual Report MANAGER OVERVIEW Amidst this environment, the fund experienced positive returns due mainly to prudent stock selection. The fund's overweighting, relative to the Russell 1000 Growth Index, of the technology and consumer discretionary sectors positively affected performance, as many stocks in these sectors have experienced marked price appreciation over the past year. Specifically, fund holdings in Intel Corp., Texas Instruments Inc., Amazon.com, Inc., and The Home Depot, Inc. have all contributed positively to the portfolio during its most recent fiscal year. Although the fund's slight overweighting of the financial services sector detracted from fund performance versus the Index, stock picks, particularly financial services giant, Merrill Lynch & Co., Inc., positively contributed to performance. Exposure to the biotechnology firm, Genentech, Inc., also dramatically contributed to fund's performance, as positive news regarding several of its drugs buoyed growth in its stock. Thank you for your investment in the Smith Barney Large Capitalization Growth Portfolio. We appreciate that you have entrusted us to manage your money and value our relationship with you. Sincerely, /s/ Alan J. Blake Alan J. Blake Portfolio Manager November 18, 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 11 through 18 for a list and percentage breakdown of the funds' holdings. /i/ The S&P 500 Index is a market capitalization-weighted index of 500 widely held common stocks. Please note that an investor cannot invest directly in an index. /ii/The Russell 1000 Growth Index measures the performance of those Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values. 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. 6 Travelers Series Fund Inc. | 2003 Annual Report AIM CAPITAL APPRECIATION PORTFOLIO AVERAGE ANNUAL TOTAL RETURNS+ (UNAUDITED) Twelve Months Ended 10/31/03 19.78% - ----------------------------------------------------------------------- Five Years Ended 10/31/03 1.59 - ----------------------------------------------------------------------- 10/10/95* through 10/31/03 3.67 - -----------------------------------------------------------------------
CUMULATIVE TOTAL RETURN+ (UNAUDITED) 10/10/95* through 10/31/03 33.68% - -------------------------------------------------------------------------
+ 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. 7 Travelers Series Fund Inc. | 2003 Annual Report HISTORICAL PERFORMANCE (UNAUDITED) Value of $10,000 Invested in Shares of the AIM Capital Appreciation Portfolio vs. S&P 500 Index and Lipper Variable Multi-Cap Growth Funds Average+ - -------------------------------------------------------------------------------- October 1995 -- October 2003 [CHART] AIM Capital Lipper Variable Appreciation S&P Multi-Cap Portfolio 500 Index Growth Funds Average ------------ --------- -------------------- 10/10/95 $10,000 $10,000 $10,000 10/95 9,990 10,076 10,202 10/96 10,771 12,502 11,932 10/97 12,706 16,516 15,003 10/98 12,351 20,151 16,004 10/99 16,355 25,321 22,370 10/00 22,329 26,861 28,367 10/01 12,646 20,175 16,440 10/02 11,161 17,130 13,116 10/31/03 13,368 20,691 16,723 + Hypothetical illustration of $10,000 invested in shares of the AIM Capital Appreciation Portfolio on October 10, 1995 (commencement of operations), assuming reinvestment of dividends and capital gains at net asset value through October 31, 2003. The S&P 500 Index is an index composed of widely held common stocks listed on the New York Stock Exchange, American Stock Exchange and over-the-counter markets. Figures for the Index includes reinvestment of dividends. The Index is unmanaged and is not subject to the same management and trading expenses of a mutual fund. Please note that an investor cannot invest directly in an index. The unmanaged Lipper Variable Multi-Cap Growth Funds Average represents an average of the performance of the 104 largest multi-cap growth mutual funds tracked by Lipper Inc., an independent mutual-fund performance monitor, for the 12 months ended October 31, 2003. 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 total returns for all periods shown. 8 Travelers Series Fund Inc. | 2003 Annual Report SMITH BARNEY LARGE CAPITALIZATION GROWTH PORTFOLIO AVERAGE ANNUAL TOTAL RETURNS+ (UNAUDITED) Twelve Months Ended 10/31/03 39.16% - --------------------------------------------------------------------------------- Five Years Ended 10/31/03 6.98 - --------------------------------------------------------------------------------- 5/1/98* through 10/31/03 6.13 - ---------------------------------------------------------------------------------
CUMULATIVE TOTAL RETURN+ (UNAUDITED) 5/1/98* through 10/31/03 38.74% - -----------------------------------------------------------------------------------
+ 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. 9 Travelers Series Fund Inc. | 2003 Annual Report HISTORICAL PERFORMANCE (UNAUDITED) Value of $10,000 Invested in Shares of the Smith Barney Large Capitalization Growth Portfolio vs. S&P 500 Index and Russell 1000 Growth Index+ - -------------------------------------------------------------------------------- May 1998 -- October 2003 [CHART] Smith Barney Large Capitalization Russell 1000 S&P Growth Portfolio Growth Index++ 500 Index++ ------------------ -------------- ----------- 5/1/98 $10,000 $10,000 $10,000 10/98 9,900 10,128 9,959 10/99 14,541 13,597 12,514 10/00 16,106 14,865 13,274 10/01 11,909 8,927 9,970 10/02 9,970 7,175 8,466 10/31/03 13,874 8,740 10,226 + Hypothetical illustration of $10,000 invested in shares of the Smith Barney Large Capitalization Growth Portfolio on May 1, 1998 (commencement of operations), assuming reinvestment of dividends and capital gains at net asset value through October 31, 2003. The S&P 500 Index is an index composed of widely held common stocks listed on the New York Stock Exchange, American Stock Exchange and over-the-counter markets. The Russell 1000 Growth Index is considered indicative of the growth-oriented domestic stock market in general and is comprised of stocks in the Russell 1000 that have higher price-to-book ratios and higher forecasted growth values. Figures for the Indexes include reinvestment of dividends. The Indexes are unmanaged and are not subject to the same management and trading expenses of 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 total returns for all periods shown. ++It is the opinion of the management that the Russell 1000 Growth Index more accurately reflects the current composition of the Smith Barney Large Capitalization Growth Portfolio than the S&P 500 Index. In future reporting, the Russell 1000 Growth Index will be used as the basis of comparison of total return performance rather than the S&P 500 Index. 10 Travelers Series Fund Inc. | 2003 Annual Report SCHEDULES OF INVESTMENTS OCTOBER 31, 2003 AIM CAPITAL APPRECIATION PORTFOLIO
SHARES SECURITY VALUE - -------------------------------------------------------------------- COMMON STOCK -- 97.1% Aerospace & Defense -- 1.3% 17,200 L-3 Communications Holdings, Inc.+++ $ 803,928 34,200 Lockheed Martin Corp. 1,585,512 - -------------------------------------------------------------------- 2,389,440 - -------------------------------------------------------------------- Air Freight & Couriers -- 0.6% 11,000 Expeditors International of Washington, Inc. 412,940 9,600 FedEx Corp. 727,296 - -------------------------------------------------------------------- 1,140,236 - -------------------------------------------------------------------- Airlines -- 1.0% 90,800 Southwest Airlines Co. 1,761,520 - -------------------------------------------------------------------- Automobiles -- 0.9% 34,100 Harley-Davidson, Inc. 1,616,681 - -------------------------------------------------------------------- Banks -- 1.3% 11,400 Bank of America Corp. 863,322 16,700 Northern Trust Corp. 775,715 11,400 Wells Fargo & Co. 642,048 - -------------------------------------------------------------------- 2,281,085 - -------------------------------------------------------------------- Biotechnology -- 2.1% 27,200 Amgen Inc.+ 1,679,872 30,500 Genzyme Corp.+ 1,399,950 12,400 Gilead Sciences, Inc.+ 676,792 - -------------------------------------------------------------------- 3,756,614 - -------------------------------------------------------------------- Commercial Services & Supplies -- 3.1% 15,900 Apollo Group, Inc., Class A Shares+ 1,010,127 90,200 Fiserv, Inc.+ 3,185,864 61,700 Robert Half International Inc.+ 1,456,737 - -------------------------------------------------------------------- 5,652,728 - -------------------------------------------------------------------- Communications Equipment -- 4.7% 44,500 Avaya Inc.+ 575,830 136,200 Cisco Systems, Inc.+ 2,857,476 89,200 Corning Inc.+ 979,416 55,700 Foundry Networks, Inc.+ 1,295,582 45,400 Juniper Networks, Inc.+++ 816,746 283,800 Nortel Networks Corp.+++ 1,262,910 11,600 Scientific-Atlanta, Inc. 343,360 8,700 UTStarcom, Inc.+++ 274,050 - -------------------------------------------------------------------- 8,405,370 - --------------------------------------------------------------------
See Notes to Financial Statements. 11 Travelers Series Fund Inc. | 2003 Annual Report SCHEDULES OF INVESTMENTS (CONTINUED) OCTOBER 31, 2003 AIM CAPITAL APPRECIATION PORTFOLIO
SHARES SECURITY VALUE - ------------------------------------------------------- Computers & Peripherals -- 2.8% 85,100 Dell Inc.+ $ 3,073,812 116,500 EMC Corp.+ 1,612,360 30,800 Western Digital Corp.+ 414,260 - ------------------------------------------------------- 5,100,432 - ------------------------------------------------------- Diversified Financials -- 7.2% 50,600 American Express Co. 2,374,658 6,400 The Bear Stearns Cos. Inc. 488,000 24,400 The Goldman Sachs Group, Inc. 2,291,160 69,700 MBNA Corp. 1,725,075 45,900 Merrill Lynch & Co., Inc. 2,717,280 17,400 Moody's Corp. 1,006,242 34,500 SLM Corp. 1,351,020 16,800 State Street Corp. 879,648 - ------------------------------------------------------- 12,833,083 - ------------------------------------------------------- Electrical Equipment -- 0.4% 24,800 Molex Inc. 778,472 - ------------------------------------------------------- Electronic Equipment & Instruments -- 0.5% 33,100 Agilent Technologies, Inc.+ 824,852 - ------------------------------------------------------- Energy Equipment & Services -- 3.0% 26,600 BJ Services Co.+ 872,746 34,500 ENSCO International Inc. 909,075 22,700 Nabors Industries, Ltd.+ 858,060 22,700 Noble Corp.+ 779,291 20,400 Smith International, Inc.+ 759,492 28,400 Transocean Inc.+ 544,996 17,000 Weatherford International Ltd.+ 590,750 - ------------------------------------------------------- 5,314,410 - ------------------------------------------------------- Food & Drug Retailing -- 1.7% 28,400 Sysco Corp. 955,944 39,900 Walgreen Co. 1,389,318 11,400 Whole Foods Market, Inc.+ 675,336 - ------------------------------------------------------- 3,020,598 - ------------------------------------------------------- Health Care Equipment & Supplies -- 5.3% 85,600 Biomet, Inc. 3,069,616 24,200 Boston Scientific Corp.+ 1,638,824 11,000 Guidant Corp. 561,110 38,700 Medtronic, Inc. 1,763,559 11,300 St. Jude Medical, Inc.+ 657,208 27,200 Zimmer Holdings, Inc.+ 1,735,632 - ------------------------------------------------------- 9,425,949 - -------------------------------------------------------
See Notes to Financial Statements. 12 Travelers Series Fund Inc. | 2003 Annual Report SCHEDULES OF INVESTMENTS (CONTINUED) OCTOBER 31, 2003 AIM CAPITAL APPRECIATION PORTFOLIO
SHARES SECURITY VALUE - ------------------------------------------------------------------------- Health Care Providers & Services -- 4.6% 24,700 AdvancePCS+ $ 1,271,309 13,400 Aetna, Inc. 769,294 17,950 Cardinal Health, Inc. 1,065,153 46,100 Caremark Rx, Inc.+ 1,154,805 38,700 Health Management Associates Inc., Class A Shares 857,205 30,000 UnitedHealth Group Inc. 1,526,400 18,400 WellPoint Health Networks Inc.+ 1,635,760 - ------------------------------------------------------------------------- 8,279,926 - ------------------------------------------------------------------------- Hotels, Restaurants & Leisure -- 4.9% 34,100 Brinker International, Inc.+ 1,085,403 22,400 Carnival Corp. 781,984 11,200 Marriott International, Inc., Class A Shares 483,840 45,900 McDonald's Corp. 1,147,959 34,400 MGM MIRAGE+ 1,221,200 27,500 Outback Steakhouse, Inc. 1,155,000 15,900 P.F. Chang's China Bistro, Inc.+++ 774,966 28,000 Royal Caribbean Cruises Ltd.++ 831,880 16,400 Starwood Hotels & Resorts Worldwide, Inc. 553,172 22,700 Wendy's International, Inc. 841,035 - ------------------------------------------------------------------------- 8,876,439 - ------------------------------------------------------------------------- Household Products -- 0.8% 14,300 The Procter & Gamble Co. 1,405,547 - ------------------------------------------------------------------------- Industrial Conglomerates -- 0.5% 11,600 3M Co. 914,892 - ------------------------------------------------------------------------- Insurance -- 1.5% 22,600 American International Group, Inc. 1,374,758 15,900 The Chubb Corp. 1,062,279 5,000 Marsh & McLennan Cos., Inc. 213,750 - ------------------------------------------------------------------------- 2,650,787 - ------------------------------------------------------------------------- Internet & Catalog Retail -- 1.4% 16,400 Amazon.com, Inc.+ 892,488 15,000 eBay Inc.+ 839,100 20,000 InterActiveCorp+ 734,200 - ------------------------------------------------------------------------- 2,465,788 - ------------------------------------------------------------------------- Internet Software & Services -- 0.4% 15,800 Yahoo! Inc.+ 690,460 - ------------------------------------------------------------------------- IT Consulting & Services -- 1.2% 30,000 Accenture Ltd., Class A Shares+ 702,000 52,200 SunGard Data Systems Inc.+ 1,464,210 - ------------------------------------------------------------------------- 2,166,210 - -------------------------------------------------------------------------
See Notes to Financial Statements. 13 Travelers Series Fund Inc. | 2003 Annual Report SCHEDULES OF INVESTMENTS (CONTINUED) OCTOBER 31, 2003 AIM CAPITAL APPRECIATION PORTFOLIO
SHARES SECURITY VALUE - -------------------------------------------------------------------------- Machinery -- 3.4% 15,900 Caterpillar Inc. $ 1,165,152 11,400 Danaher Corp. 944,490 22,300 Deere & Co. 1,351,826 8,900 Eaton Corp. 892,136 27,800 Ingersoll-Rand Co., Class A Shares 1,679,120 - -------------------------------------------------------------------------- 6,032,724 - -------------------------------------------------------------------------- Media -- 6.1% 56,100 Clear Channel Communications, Inc. 2,290,002 11,200 Gannett Co., Inc. 942,032 68,100 Lamar Advertising Co.+ 2,063,430 8,300 Omnicom Group Inc. 662,340 11,400 Pixar, Inc.+++ 784,434 48,550 Univision Communications Inc., Class A Shares+ 1,648,272 45,000 Viacom Inc., Class B Shares 1,794,150 22,200 Westwood One, Inc.+ 664,446 - -------------------------------------------------------------------------- 10,849,106 - -------------------------------------------------------------------------- Multiline Retail -- 3.1% 33,200 Dollar General Corp. 746,004 34,300 Family Dollar Stores, Inc. 1,495,823 22,400 Nordstrom, Inc. 682,976 45,200 Wal-Mart Stores, Inc. 2,664,540 - -------------------------------------------------------------------------- 5,589,343 - -------------------------------------------------------------------------- Oil & Gas -- 0.4% 15,900 Devon Energy Corp. 771,150 - -------------------------------------------------------------------------- Personal Products -- 0.5% 28,400 The Gillette Co. 905,960 - -------------------------------------------------------------------------- Pharmaceuticals -- 5.6% 2,800 Allergan, Inc. 211,736 14,500 Eli Lilly & Co. 965,990 11,500 Forest Laboratories, Inc.+ 575,115 15,500 Medco Health Solutions, Inc.+ 514,600 22,900 Medicis Pharmaceutical Corp., Class A Shares 1,450,715 58,500 Pfizer Inc. 1,848,600 51,000 Teva Pharmaceutical Industries Ltd., Sponsored ADR 2,901,390 34,100 Wyeth 1,505,174 - -------------------------------------------------------------------------- 9,973,320 - -------------------------------------------------------------------------- Semiconductor Equipment & Products -- 11.3% 68,100 Analog Devices, Inc.+ 3,018,873 97,300 Applied Materials, Inc.+ 2,273,901 39,500 KLA-Tencor Corp.+++ 2,264,535 90,800 Lam Research Corp.+ 2,609,592
See Notes to Financial Statements. 14 Travelers Series Fund Inc. | 2003 Annual Report SCHEDULES OF INVESTMENTS (CONTINUED) OCTOBER 31, 2003 AIM CAPITAL APPRECIATION PORTFOLIO
SHARES SECURITY VALUE - -------------------------------------------------------------------------------- Semiconductor Equipment & Products -- 11.3% (continued) 45,400 Linear Technology Corp. $ 1,934,494 22,100 Marvell Technology Group Ltd.+ 969,527 39,700 Maxim Integrated Products, Inc. 1,973,487 115,043 Microchip Tehnology Inc. 3,763,057 54,972 Taiwan Semiconductor Manufacturing Co. Ltd., Sponsored ADR+ 607,990 35,000 Teradyne, Inc.+ 797,300 - -------------------------------------------------------------------------------- 20,212,756 - -------------------------------------------------------------------------------- Software -- 5.9% 15,100 Adobe Systems Inc. 661,984 6,900 Electronic Arts Inc.+ 683,376 28,400 Intuit Inc.+ 1,419,432 19,100 Mercury Interactive Corp.+ 887,004 191,400 Microsoft Corp. 5,005,110 55,800 Oracle Corp.+ 667,368 34,100 VERITAS Software Corp.+ 1,232,715 - -------------------------------------------------------------------------------- 10,556,989 - -------------------------------------------------------------------------------- Specialty Retail -- 6.5% 53,300 Bed Bath & Beyond Inc.+ 2,251,392 27,700 Best Buy Co., Inc. 1,615,187 21,800 Chico's FAS, Inc.+ 818,372 114,000 The Gap, Inc. 2,175,120 27,000 Lowe's Cos., Inc. 1,591,110 56,000 Staples, Inc.+ 1,501,920 45,600 The TJX Cos., Inc. 957,144 22,000 Williams-Sonoma, Inc.+ 777,260 - -------------------------------------------------------------------------------- 11,687,505 - -------------------------------------------------------------------------------- Textiles & Apparel -- 0.1% 6,500 Coach, Inc.+ 230,555 - -------------------------------------------------------------------------------- Trading Companies & Distributors -- 1.7% 50,500 CDW Corp. 3,032,525 - -------------------------------------------------------------------------------- Wireless Telecommunication Services -- 1.3% 41,900 Nextel Communications, Inc., Class A Shares+ 1,013,980 620,800 Vodafone Group PLC 1,302,897 - -------------------------------------------------------------------------------- 2,316,877 - -------------------------------------------------------------------------------- TOTAL COMMON STOCK (Cost -- $145,541,688) 173,910,329 - --------------------------------------------------------------------------------
See Notes to Financial Statements. 15 Travelers Series Fund Inc. | 2003 Annual Report SCHEDULES OF INVESTMENTS (CONTINUED) OCTOBER 31, 2003 AIM CAPITAL APPRECIATION PORTFOLIO
FACE AMOUNT SECURITY VALUE - ---------------------------------------------------------------------------------- REPURCHASE AGREEMENT -- 2.9% $5,191,000 State Street Bank and Trust Co., 0.940% due 11/3/03; Proceeds at maturity -- $5,191,407; (Fully collateralized by U.S. Treasury Bonds, 5.250% due 2/15/29; Market value -- $5,294,863) (Cost -- $5,191,000) $ 5,191,000 - ---------------------------------------------------------------------------------- TOTAL INVESTMENTS -- 100.0% (Cost -- $150,732,688*) $179,101,329 - ----------------------------------------------------------------------------------
+Non-income producing security. ++All or a portion of this security is on loan (See Note 4). *Aggregate cost for Federal income tax purposes is $152,243,645.
Abbreviation used in this schedule: ADR -- American Depositary Receipt
LOANED SECURITIES COLLATERAL OCTOBER 31, 2003
FACE AMOUNT SECURITY VALUE - ------------------------------------------------------------------------------------- $5,242,859 State Street Navigator Securities Lending Trust Prime Portfolio (Cost -- $5,242,859) $5,242,859 - -------------------------------------------------------------------------------------
See Notes to Financial Statements. 16 Travelers Series Fund Inc. | 2003 Annual Report SCHEDULES OF INVESTMENTS (CONTINUED) OCTOBER 31, 2003 SMITH BARNEY LARGE CAPITALIZATION GROWTH PORTFOLIO
SHARES SECURITY VALUE - ---------------------------------------------------------------- COMMON STOCK -- 98.6% Beverages -- 3.5% 265,790 The Coca-Cola Co. $ 12,332,656 - ---------------------------------------------------------------- Biotechnology -- 9.0% 198,180 Amgen Inc.+ 12,239,597 32,000 Biogen, Inc.+++ 1,295,040 175,900 Genentech, Inc.+ 14,418,523 112,000 IDEC Pharmaceuticals Corp.+++ 3,934,560 - ---------------------------------------------------------------- 31,887,720 - ---------------------------------------------------------------- Communications Equipment -- 9.9% 793,900 CIENA Corp.+ 5,088,899 446,008 Cisco Systems, Inc.+ 9,357,248 394,900 Juniper Networks, Inc.+ 7,104,251 1,180,500 Lucent Technologies Inc.+ 3,777,600 704,180 Motorola, Inc. 9,527,555 - ---------------------------------------------------------------- 34,855,553 - ---------------------------------------------------------------- Computers & Peripherals -- 4.0% 394,600 Dell Inc.+ 14,252,952 - ---------------------------------------------------------------- Diversified Financials -- 6.9% 255,530 Merrill Lynch & Co., Inc. 15,127,376 166,670 Morgan Stanley 9,145,183 - ---------------------------------------------------------------- 24,272,559 - ---------------------------------------------------------------- Food Products -- 2.7% 170,640 Wm. Wrigley Jr. Co. 9,624,096 - ---------------------------------------------------------------- Industrial Conglomerates -- 2.0% 242,120 General Electric Co. 7,023,901 - ---------------------------------------------------------------- Insurance -- 7.4% 166,456 American International Group, Inc. 10,125,518 208 Berkshire Hathaway Inc., Class A Shares+ 16,184,480 - ---------------------------------------------------------------- 26,309,998 - ---------------------------------------------------------------- Internet & Catalog Retail -- 10.0% 457,800 Amazon.com, Inc.+ 24,913,476 288,200 InterActiveCorp+ 10,579,822 - ---------------------------------------------------------------- 35,493,298 - ---------------------------------------------------------------- Media -- 7.1% 750,320 Time Warner Inc.+ 11,472,393 110,000 Viacom Inc., Class B Shares 4,385,700 402,915 The Walt Disney Co. 9,121,996 - ---------------------------------------------------------------- 24,980,089 - ----------------------------------------------------------------
See Notes to Financial Statements. 17 Travelers Series Fund Inc. | 2003 Annual Report SCHEDULES OF INVESTMENTS (CONTINUED) OCTOBER 31, 2003 SMITH BARNEY LARGE CAPITALIZATION GROWTH PORTFOLIO
SHARES SECURITY VALUE - ------------------------------------------------------------------------------------------------ Personal Products -- 3.7% 414,295 The Gillette Co. $ 13,216,010 - ------------------------------------------------------------------------------------------------ Pharmaceuticals -- 10.7% 151,750 Eli Lilly & Co. 10,109,585 170,570 Johnson & Johnson 8,584,788 151,940 Merck & Co. Inc. 6,723,345 397,270 Pfizer Inc. 12,553,732 - ------------------------------------------------------------------------------------------------ 37,971,450 - ------------------------------------------------------------------------------------------------ Semiconductor Equipment & Products -- 11.5% 580,600 Intel Corp. 19,188,830 435,160 Texas Instruments Inc. 12,584,827 276,480 Xilinx, Inc.+ 8,764,416 - ------------------------------------------------------------------------------------------------ 40,538,073 - ------------------------------------------------------------------------------------------------ Software -- 5.8% 388,000 Microsoft Corp. 10,146,200 289,000 VERITAS Software Corp.+ 10,447,350 - ------------------------------------------------------------------------------------------------ 20,593,550 - ------------------------------------------------------------------------------------------------ Specialty Retail -- 4.4% 414,450 The Home Depot, Inc. 15,363,662 - ------------------------------------------------------------------------------------------------ TOTAL COMMON STOCK (Cost -- $296,895,327) 348,715,567 - ------------------------------------------------------------------------------------------------ FACE AMOUNT SECURITY VALUE - ------------------------------------------------------------------------------------------------ REPURCHASE AGREEMENT -- 1.4% $5,090,000 Merrill Lynch & Co., Inc., 0.990% due 11/3/03; Proceeds at maturity -- $5,090,420; (Fully collateralized by U.S. Treasury Inflationary Indexed Notes and Bonds, 1.875% to 3.625% due 7/15/12 to 4/15/28; Market value -- $5,191,833) (Cost -- $5,090,000) 5,090,000 - ------------------------------------------------------------------------------------------------ TOTAL INVESTMENTS -- 100.0% (Cost -- $301,985,327*) $353,805,567 - ------------------------------------------------------------------------------------------------
+ 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 $320,778,628. See Notes to Financial Statements. 18 Travelers Series Fund Inc. | 2003 Annual Report STATEMENTS OF ASSETS AND LIABILITIES OCTOBER 31, 2003
AIM Capital Smith Barney Large Appreciation Capitalization Portfolio Growth Portfolio ---------------------------------------------------------------------------- ASSETS: Investments, at value (Cost -- $150,732,688 and $301,985,327, respectively) $179,101,329 $353,805,567 Loaned securities collateral, at value (Cost -- $5,242,859) (Note 4) 5,242,859 -- Cash 31 877 Receivable for securities sold 488,224 -- Dividends and interest receivable 72,188 177,431 Receivable for Fund shares sold 250 78,844 Other receivables 12,592 39,569 --------------------------------------------------------------------------- Total Assets 184,917,473 354,102,288 --------------------------------------------------------------------------- LIABILITIES: Payable for loaned securities collateral (Note 4) 5,242,859 -- Payable for securities purchased 1,014,490 -- Management fees payable 119,325 217,634 Payable for Fund shares reacquired 48,147 -- Accrued expenses 39,109 49,056 --------------------------------------------------------------------------- Total Liabilities 6,463,930 266,690 --------------------------------------------------------------------------- Total Net Assets $178,453,543 $353,835,598 --------------------------------------------------------------------------- NET ASSETS: Par value of capital shares $ 185 $ 257 Capital paid in excess of par value 228,467,883 367,449,769 Undistributed net investment income -- 23,939 Accumulated net realized loss from investment transactions and options (78,383,166) (65,458,607) Net unrealized appreciation of investments 28,368,641 51,820,240 --------------------------------------------------------------------------- Total Net Assets $178,453,543 $353,835,598 --------------------------------------------------------------------------- Shares Outstanding 18,522,851 25,714,124 --------------------------------------------------------------------------- Net Asset Value $9.63 $13.76 ---------------------------------------------------------------------------
See Notes to Financial Statements. 19 Travelers Series Fund Inc. | 2003 Annual Report STATEMENTS OF OPERATIONS FOR THE YEAR ENDED OCTOBER 31, 2003
AIM Capital Smith Barney Large Appreciation Capitalization Portfolio Growth Portfolio - ------------------------------------------------------------------------------- INVESTMENT INCOME: Dividends $ 923,906 $ 2,212,515 Interest 70,831 27,060 Less: Foreign withholding tax (5,483) -- - ------------------------------------------------------------------------------ Total Investment Income 989,254 2,239,575 - ------------------------------------------------------------------------------ EXPENSES: Management fees (Note 2) 1,325,641 1,971,543 Audit and legal 32,148 31,323 Custody 23,939 19,180 Shareholder communications 15,975 29,654 Shareholder servicing fees 5,446 5,050 Directors' fees 4,719 8,095 Other 3,777 8,266 - ------------------------------------------------------------------------------ Total Expenses 1,411,645 2,073,111 - ------------------------------------------------------------------------------ Net Investment Income (Loss) (422,391) 166,464 - ------------------------------------------------------------------------------ REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, FOREIGN CURRENCIES AND OPTIONS (NOTES 3, 6 AND 7): Realized Gain (Loss) From: Investment transactions (11,823,712) (13,016,040) Options written 33,322 -- Foreign currency transactions 14,857 -- - ------------------------------------------------------------------------------ Net Realized Loss (11,775,533) (13,016,040) - ------------------------------------------------------------------------------ Change in Net Unrealized Appreciation From: Investments 42,305,164 103,011,731 Foreign currencies 396 -- - ------------------------------------------------------------------------------ Increase in Net Unrealized Appreciation 42,305,560 103,011,731 - ------------------------------------------------------------------------------ Net Gain on Investments, Foreign Currencies and Options 30,530,027 89,995,691 - ------------------------------------------------------------------------------ Increase in Net Assets From Operations $ 30,107,636 $ 90,162,155 - ------------------------------------------------------------------------------
See Notes to Financial Statements. 20 Travelers Series Fund Inc. | 2003 Annual Report STATEMENTS OF CHANGES IN NET ASSETS
For the Years - - Ended October 31, AIM Capital Appreciation Portfolio 2003 2002 - ------------------------------------------------------------------------------------- OPERATIONS: Net investment loss $ (422,391) $ (589,855) Net realized loss (11,775,533) (26,798,033) Increase in net unrealized appreciation 42,305,560 4,341,849 - ---------------------------------------------------------------------------------- Increase (Decrease) in Net Assets From Operations 30,107,636 (23,046,039) - ---------------------------------------------------------------------------------- FUND SHARE TRANSACTIONS (NOTE 8): Net proceeds from sale of shares 5,082,394 65,014,704 Cost of shares reacquired (28,925,438) (93,735,313) - ---------------------------------------------------------------------------------- Decrease in Net Assets From Fund Share Transactions (23,843,044) (28,720,609) - ---------------------------------------------------------------------------------- Increase (Decrease) in Net Assets 6,264,592 (51,766,648) NET ASSETS: Beginning of year 172,188,951 223,955,599 - ---------------------------------------------------------------------------------- End of year $ 178,453,543 $172,188,951 - ----------------------------------------------------------------------------------
See Notes to Financial Statements. 21 Travelers Series Fund Inc. | 2003 Annual Report STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
For the Years - - Ended October 31, Smith Barney Large Capitalization Growth Portfolio 2003 2002 - -------------------------------------------------------------------------------- OPERATIONS: Net investment income $ 166,464 $ 359,070 Net realized loss (13,016,040) (41,360,220) Increase (decrease) in net unrealized appreciation 103,011,731 (9,512,917) - ------------------------------------------------------------------------------- Increase (Decrease) in Net Assets From Operations 90,162,155 (50,514,067) - ------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS FROM: Net investment income (501,211) (415,332) - ------------------------------------------------------------------------------- Decrease in Net Assets From Distributions to Shareholders (501,211) (415,332) - ------------------------------------------------------------------------------- FUND SHARE TRANSACTIONS (NOTE 8): Net proceeds from sale of shares 54,577,683 34,322,507 Net asset value of shares issued for reinvestment of dividends 501,211 415,332 Cost of shares reacquired (16,052,630) (38,267,567) - ------------------------------------------------------------------------------- Increase (Decrease) in Net Assets From Fund Share Transactions 39,026,264 (3,529,728) - ------------------------------------------------------------------------------- Increase (Decrease) in Net Assets 128,687,208 (54,459,127) NET ASSETS: Beginning of year 225,148,390 279,607,517 - ------------------------------------------------------------------------------- End of year* $353,835,598 $225,148,390 - ------------------------------------------------------------------------------- * Includes undistributed net investment income of: $23,939 $358,686 - -------------------------------------------------------------------------------
See Notes to Financial Statements. 22 Travelers Series Fund Inc. | 2003 Annual Report NOTES TO FINANCIAL STATEMENTS 1. Significant Accounting Policies The AIM Capital Appreciation Portfolio and Smith Barney Large Capitalization Growth 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, Smith Barney Mid Cap Core, Smith Barney Aggressive Growth and SB Adjustable Rate Income Portfolios. Shares of the Company 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 consistently 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 price was reported and U.S. government agencies and obligations are valued at the mean between the bid and asked prices; securities listed on the NASDAQ National Market System for which market quotations are available are valued at the official closing price or, if there is no official closing price on that day, at the last sale price; (c) securities maturing within 60 days are valued at cost plus accreted discount, or minus amortized premium, which approximates value; (d) securities for which market quotations are not available will be valued in good faith at fair value by or under the direction of the Board of Directors; (e) interest income, adjusted for amortization of premium and accretion of discount, is recorded on an accrual basis; (f ) dividend income is recorded on the ex-dividend date; foreign dividends are recorded on the ex-dividend date or as soon as practical after the Funds determine the existence of a dividend declaration after exercising reasonable due diligence; (g) dividends and distributions to shareholders are recorded on the ex- 23 Travelers Series Fund Inc. | 2003 Annual Report NOTES TO FINANCIAL STATEMENTS (CONTINUED) dividend date; the Funds 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 capital accounts of AIM Capital Appreciation Portfolio to reflect permanent book/tax differences and income and gains available for distributions under income tax regulations. Accordingly, accumulated net investment loss amounting to $407,534 was reclassified to paid-in capital. 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 Large Capitalization Growth Portfolio ("SBLCG"). SBLCG pays SBFM a management fee calculated at an annual rate of 0.75% on the average daily net assets of SBLCG. This fee is calculated daily and paid monthly. Travelers Investment Adviser, Inc. ("TIA"), an affiliate of SBFM, acts as the investment manager of the AIM Capital Appreciation Portfolio ("AIMCAP"). 24 Travelers Series Fund Inc. | 2003 Annual Report NOTES TO FINANCIAL STATEMENTS (CONTINUED) AIMCAP pays TIA a management fee calculated at an annual rate of 0.80% on the average daily net assets of AIMCAP. This fee is calculated daily and paid monthly. TIA has also entered into a sub-advisory agreement with AIM Capital Management, Inc. ("AIM"). Pursuant to the sub-advisory agreement, AIM is responsible for the day-to-day portfolio operations and investment decisions and is compensated by TIA for such services at the annual rate of 0.375% of AIMCAP's average daily net assets. TIA has also entered into a Sub-Administrative Services Agreement with SBFM. TIA pays SBFM, as sub-administrator, a fee calculated at an annual rate of 0.10% of the average daily net assets of AIMCAP. Citicorp Trust Bank, fsb. ("CTB"), another subsidiary of Citigroup, acts as the Funds' transfer agent. 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. During the year ended October 31, 2003, Citigroup Global Markets Inc. (formerly known as Salomon Smith Barney Inc.), another indirect wholly-owned subsidiary of Citigroup, received brokerage commissions in the amounts of $3,884 and $1,925 for AIMCAP and SBLCG, respectively. 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:
AIMCAP SBLCG - ----------------------------------------------------------------- Purchases $ 78,870,958 $77,088,689 - ---------------------------------------------------------------- Sales 102,950,395 42,741,541 - ----------------------------------------------------------------
25 Travelers Series Fund Inc. | 2003 Annual Report NOTES TO FINANCIAL STATEMENTS (CONTINUED) At October 31, 2003, the aggregate gross unrealized appreciation and depreciation of investments for Federal income tax purposes were as follows:
AIMCAP SBLCG - -------------------------------------------------------------- Gross unrealized appreciation $32,393,111 $ 68,330,602 Gross unrealized depreciation (5,535,427) (35,303,663) - ------------------------------------------------------------- Net unrealized appreciation $26,857,684 $ 33,026,939 - -------------------------------------------------------------
4. Lending of Portfolio Securities Each Fund has an agreement with its custodian whereby the custodian may lend securities owned by the Funds to brokers, dealers and other financial organizations. Fees earned by the Funds on securities lending are recorded as interest income. Loans of securities by the Funds are collateralized by cash, U.S. government securities or high quality money market instruments that are maintained at all times in an amount at least equal to the current market value of the loaned securities, plus a margin which may vary depending on the type of securities loaned. At October 31, 2003, AIMCAP loaned securities having a market value of $5,087,131 and received cash collateral amounting to $5,242,859 which was invested in the State Street Navigator Securities Lending Trust Prime Portfolio. For the year ended October 31, 2003, income earned from securities lending by AIMCAP was $9,916. At October 31, 2003, SBLCG did not have any securities on loan. 5. 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 value (plus accrued interest) of the collateral in amounts at least equal to the repurchase price. 6. Forward Foreign Currency Contracts The Funds may from time to time enter into forward foreign currency contracts. A forward foreign currency contract is an agreement between two parties to buy 26 Travelers Series Fund Inc. | 2003 Annual Report NOTES TO FINANCIAL STATEMENTS (CONTINUED) and sell a currency at a set price on a future date. The contract is marked-to-market daily and the change in value is recorded by the Funds as an unrealized gain or loss. When a forward foreign currency contract is extinguished, through either delivery or offset by entering into another forward foreign currency contract, the Funds record a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value of the contract at the time it was extinguished or offset. The Funds bear the market risk that arises from changes in foreign currency exchange rates and the credit risk should a counterparty be unable to meet the terms of such contracts. At October 31, 2003, AIMCAP and SBLCG did not have any open forward foreign currency contracts. 7. Option Contracts The Funds may from time to time purchase call or put option contracts. Premiums paid when call or put options are purchased by the Funds represent investments which are marked-to-market daily. When a purchased option expires, the Funds will realize a loss in the amount of the premium paid. When the Funds enter into a closing sales transaction, the Funds will realize a gain or loss depending on whether the sales proceeds from the closing sales transaction are greater or less than the premium paid for the option. When the Funds exercise a put option, it will realize a gain or loss from the sale of the underlying security and the proceeds from such sale will be decreased by the premium originally paid. When the Funds exercise a call option, the cost of the security which the Funds purchase upon exercise will be increased by the premium originally paid. At October 31, 2003, AIMCAP and SBLCG did not hold any purchased call or put option contracts. SBLCG may from time to time enter into written call or put option contracts. AIMCAP may only enter into written covered call option contracts. When a Fund writes a call or put option, an amount equal to the premium received by the Fund is recorded as a liability, the value of which is marked-to-market daily. When a written option expires, the Fund realizes a gain equal to the amount of the premium received. When the Fund enters into a closing purchase transaction, the Fund realizes a gain (or loss if the cost of the closing purchase trans- 27 Travelers Series Fund Inc. | 2003 Annual Report NOTES TO FINANCIAL STATEMENTS (CONTINUED) action exceeds the premium received when the option was written) without regard to any unrealized gain or loss on the underlying security, and the liability related to such option is eliminated. When a written call option is exercised, the cost of the security sold will be reduced by the premium originally received. When a written put option is exercised, the amount of the premium received will reduce the cost of the security which the Fund purchased upon exercise. When written index options are exercised, settlement is made in cash. The risk associated with purchasing options is limited to the premium originally paid. The Funds enter into options for hedging purposes. The risk in writing a covered call option is that the Fund gives up the opportunity to participate in any increase in the price of the underlying security beyond the exercise price. The risk in writing a put option is that the Fund is exposed to the risk of loss if the market price of the underlying security declines. The risk in writing a call option is that the Fund is exposed to the risk of loss if the market price of the underlying security increases. The written option transactions for AIMCAP which occurred during the year ended October 31, 2003 were as follows:
Number of AIMCAP Contracts Premiums -------------------------------------------------------------------- Options written, outstanding at October 31, 2002 36 $ 9,252 Options written 71 24,070 Options expired (67) (15,824) Options exercised (40) (17,498) -------------------------------------------------------------------- Options written, outstanding at October 31, 2003 -- $ 0 --------------------------------------------------------------------
During the year ended October 31, 2003, SBLCG did not enter into any written covered call or put option contracts. 8. 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. 28 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 -------------------------------------------------------------------- AIM Capital Appreciation Portfolio Shares sold 610,791 6,822,913 Shares reacquired (3,517,542) (9,963,375) -------------------------------------------------------------------- Net Decrease (2,906,751) (3,140,462) -------------------------------------------------------------------- Smith Barney Large Capitalization Growth Portfolio Shares sold 4,480,533 2,760,973 Shares issued on reinvestment 51,353 42,511 Shares reacquired (1,541,281) (3,657,809) -------------------------------------------------------------------- Net Increase (Decrease) 2,990,605 (854,325) --------------------------------------------------------------------
9. Capital Loss Carryforward At October 31, 2003, AIMCAP and SBLCG had, for Federal income tax purposes, approximately $76,872,000 and $46,665,000, respectively, of unused capital loss carryforwards available to offset future capital gains. To the extent that these 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 carryforward loss is indicated below. Expiration occurs on October 31 of the year indicated:
Fund 2008 2009 2010 2011 ----------------------------------------------------- AIMCAP -- $39,681,000 $25,304,000 $11,887,000 ----------------------------------------------------- SBLCG $2,019,000 5,454,000 30,604,000 8,588,000 -----------------------------------------------------
10. Income Tax Information and Distributions to Shareholders At October 31, 2003, the tax basis components of distributable earnings were:
AIMCAP SBLCG --------------------------------------------------------- Undistributed ordinary income -- $ 23,939 --------------------------------------------------------- Accumulated capital losses $(76,872,209) (46,665,306) --------------------------------------------------------- Unrealized appreciation 26,857,684 33,026,939 ---------------------------------------------------------
29 Travelers Series Fund Inc. | 2003 Annual Report NOTES TO FINANCIAL STATEMENTS (CONTINUED) The difference between book basis and tax basis unrealized appreciation and depreciation is attributable primarily to wash sale loss deferrals. The tax character of distributions paid during the year ended October 31, 2003 was:
SBLCG ------------------------ Ordinary income $501,211 ------------------------
For the year ended October 31, 2003, AIMCAP did not make any distributions. 11.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. 30 Travelers Series Fund Inc. | 2003 Annual Report NOTES TO FINANCIAL STATEMENTS (CONTINUED) 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. 31 Travelers Series Fund Inc. | 2003 Annual Report FINANCIAL HIGHLIGHTS For a share of capital stock outstanding throughout each year ended October 31, unless otherwise noted:
AIM Capital Appreciation Portfolio 2003 2002 2001 2000 1999 - -------------------------------------------------------------------------------------------- Net Asset Value, Beginning of Year $8.04 $9.11 $ 21.73 $16.30 $12.31 - ------------------------------------------------------------------------------------------- Income (Loss) From Operations: Net investment loss (0.02) (0.03) (0.02) (0.07) (0.03) Net realized and unrealized gain (loss) 1.61 (1.04) (8.72) 6.03 4.02 - ------------------------------------------------------------------------------------------- Total Income (Loss) From Operations 1.59 (1.07) (8.74) 5.96 3.99 - ------------------------------------------------------------------------------------------- Less Distributions From: Net realized gains -- -- (3.88) (0.53) -- - ------------------------------------------------------------------------------------------- Total Distributions -- -- (3.88) (0.53) -- - ------------------------------------------------------------------------------------------- Net Asset Value, End of Year $9.63 $8.04 $ 9.11 $21.73 $16.30 - ------------------------------------------------------------------------------------------- Total Return/(1)/ 19.78% (11.75)% (43.36)% 36.53% 32.41% - ------------------------------------------------------------------------------------------- Net Assets, End of Year (millions) $178 $172 $224 $435 $300 - ------------------------------------------------------------------------------------------- Ratios to Average Net Assets: Expenses 0.85% 0.85% 0.83% 0.83% 0.84% Net investment loss (0.25) (0.28) (0.20) (0.35) (0.18) - ------------------------------------------------------------------------------------------- Portfolio Turnover Rate 49% 65% 77% 91% 76% - -------------------------------------------------------------------------------------------
(1) 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. 32 Travelers Series Fund Inc. | 2003 Annual Report FINANCIAL HIGHLIGHTS (CONTINUED) For a share of capital stock outstanding throughout each year ended October 31, unless otherwise noted:
Smith Barney Large Capitalization Growth Portfolio 2003 2002 2001 2000 1999 - ------------------------------------------------------------------------------------ Net Asset Value, Beginning of Year $ 9.91 $11.86 $16.04 $14.53 $ 9.90 - ----------------------------------------------------------------------------------- Income (Loss) From Operations: Net investment income 0.01 0.02 0.02 0.01 0.00* Net realized and unrealized gain (loss) 3.86 (1.95) (4.20) 1.55 4.64 - ----------------------------------------------------------------------------------- Total Income (Loss) From Operations 3.87 (1.93) (4.18) 1.56 4.64 - ----------------------------------------------------------------------------------- Less Distributions From: Net investment income (0.02) (0.02) -- (0.01) (0.01) Net realized gains -- -- -- (0.02) -- Capital -- -- -- (0.02) -- - ----------------------------------------------------------------------------------- Total Distributions (0.02) (0.02) -- (0.05) (0.01) - ----------------------------------------------------------------------------------- Net Asset Value, End of Year $13.76 $ 9.91 $11.86 $16.04 $14.53 - ----------------------------------------------------------------------------------- Total Return/(1)/ 39.16% (16.29)% (26.06)% 10.77% 46.88% - ----------------------------------------------------------------------------------- Net Assets, End of Year (millions) $354 $225 $280 $324 $168 - ----------------------------------------------------------------------------------- Ratios to Average Net Assets: Expenses 0.79% 0.80% 0.78% 0.77% 0.86% Net investment income 0.06 0.13 0.14 0.06 0.07 - ----------------------------------------------------------------------------------- Portfolio Turnover Rate 16% 19% 10% 7% 14% - -----------------------------------------------------------------------------------
(1) 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. * Amount represents less than $0.01 per share. 33 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 AIM Capital Appreciation and Smith Barney Large Capitalization Growth Portfolios ("Funds") 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 five-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 and 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 five-year period then ended, in conformity with accounting principles generally accepted in the United States of America. /s/ KPMG New York, New York December 10, 2003 34 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: A. E. Cohen Director Since Consultant to Chugai 17 Director of Agouron 444 Madison Avenue 1996 Pharmaceutical Pharmaceuticals, Suite 1201 Co. Ltd. Inc., Akzo Nobel New York, NY 10022 NV, Teva Age 67 Pharmaceutical 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 122 East 42nd Street 1999 Windcrest Partners, a S.A., Devon Energy 47th Floor venture capital firm Corp., High Speed New York, NY 10168 Access Corp., Age 72 Human, Inc., SEACOR Smit, Inc. and Six Flags, Inc. Rainer Greeven Director Since Attorney, Rainer Greeven 17 Director of 630 5th Avenue 1994 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 Chilimark, MA 02535 relations firm Society, New York Age 58 City Chapter
35 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 Held with of Time During Past Overseen Held by Name, Address and Age Fund Served Five Years by 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 4th Floor Officer Executive Officer of Smith New York, NY 10022 Barney Fund Management Age 52 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 associated 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
36 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 Held with of Time During Past Overseen Held by Name, Address and Age Fund Served Five Years by Director Director - ------------------------------------------------------------------------------------------------------------ Alan J. Blake Investment Since Managing Director of N/A N/A CAM Officer 1998 CGM 399 Park Avenue 4th Floor New York, NY 10022 Age 54 Kenneth A. Zschappel Investment Since Assistant Vice President N/A N/A AIM Capital Management, Inc. Officer 1995 and Senior Portfolio 11 Greenway Plaza Manager of AIM Capital Suite 100 Houston, TX 77046 Age 36 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 of 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 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 Company 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. 37 Travelers Series Fund Inc. | 2003 Annual Report TAX INFORMATION (UNAUDITED) For Federal tax purposes, the Smith Barney Large Capitalization Growth Portfolio hereby designates for the fiscal year ended October 31, 2003: . For corporate shareholders, the percentage of ordinary dividends that qualify for the dividends received deduction is 100%. 38 Travelers Series Fund Inc. | 2003 Annual Report TRAVELERS SERIES FUND INC. DIRECTORS INVESTMENT MANAGERS A.E. Cohen Smith Barney Fund Robert A. Frankel Management LLC Michael E. Gellert Travelers Investment Adviser, Inc. R. Jay Gerken, CFA Chairman CUSTODIAN Rainer Greeven State Street Bank and Susan M. Heilbron Trust Company OFFICERS ANNUITY R. Jay Gerken, CFA ADMINISTRATION President and Chief Travelers Annuity Investor Services Executive Officer One Cityplace Hartford, CT 06103-3415 Andrew B. Shoup* Senior Vice President and Chief Administrative Officer Richard L. Peteka Chief Financial Officer and Treasurer Alan J. Blake Investment Officer Kaprel Ozsolak Controller Robert I. Frenkel Secretary* and Chief Legal Officer * As of November 25, 2003. Travelers Series Fund Inc. AIM Capital Appreciation Portfolio Smith Barney Large Capitalization Growth 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. -- AIM Capital Appreciation and Smith Barney Large Capitalization Growth Portfolios. It is not authorized for distribution to prospective investors unless accompanied or preceded by a current Prospectus for the Funds, which contains information concerning the Funds' investment policies and expenses as well as other pertinent information. TRAVELERS SERIES FUND INC. 125 Broad Street 10th Floor, MF-2 New York, New York 10004 IN0794 12/03 03-5774 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 EX 99.CODE ETH June, 2003 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 CERTIFICATIONS 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. - AIM Capital Appreciation 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. - AIM Capital Appreciation 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 Large Capitalization 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 CERTIFICATIONS I, Richard L. Peteka, certify that: 1. I have reviewed this report on Form N-CSR of Travelers Series Fund Inc. - Smith Barney Large Capitalization 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 EX-99.906CERT 5 dex99906cert.txt CERTIFICATIONS 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. - AIM Capital Appreciation 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. - AIM Capital Appreciation Portfolio AIM Capital Appreciation 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 Large Capitalization 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 Large Capitalization Smith Barney Large Capitalization Growth 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. -----END PRIVACY-ENHANCED MESSAGE-----