Semi-Annual Rep of Legg Mason Partners Variable Aggressive Growth Port., 6/30/06

EX-99.17.G 15 dex9917g.htm SEMI-ANNUAL REP OF LEGG MASON PARTNERS VARIABLE AGGRESSIVE GROWTH PORT., 6/30/06 Semi-Annual Rep of Legg Mason Partners Variable Aggressive Growth Port., 6/30/06



SEMI-ANNUAL REPORT JUNE 30, 2006		Legg Mason Partners Variable Portfolios II Legg Mason Partners Variable Diversified Strategic Income Portfolio Legg Mason Partners Variable Equity Index Portfolio Legg Mason Partners Variable Growth and Income Portfolio Legg Mason Partners Variable Aggressive Growth Portfolio

		INVESTMENT PRODUCTS: NOT FDIC INSURED •NO BANK GUARANTEE •MAY LOSE VALUE


	Legg Mason Partners Variable Portfolios II


	Semi-Annual Report • June 30, 2006


	What’s
	Inside


Letter from the Chairman		I

Fund at a Glance:

	Legg Mason Partners Variable Diversified Strategic Income Portfolio	1

	Legg Mason Partners Variable Equity Index Portfolio	2

	Legg Mason Partners Variable Growth and Income Portfolio	3

	Legg Mason Partners Variable Aggressive Growth Portfolio	4

Fund Expenses		5

Schedules of Investments		7

Statements of Assets and Liabilities		48

Statements of Operations		49

Statements of Changes in Net Assets		50

Financial Highlights		54

Notes to Financial Statements		60

Board Approval of Management and Subadvisory Agreements		75


	“Smith Barney”, “Salomon Brothers” and “Citi” are service marks of Citigroup, licensed for use by Legg Mason as the names of funds and investment managers. Legg Mason and its affiliates, as well as the Funds’ investment manager, are not affiliated with Citigroup.


	Letter from the Chairman

R. JAY GERKEN, CFA

Chairman, President and

Chief Executive Officer


	Dear Shareholder,

	The U.S. economy appeared to be on solid footing during the six-month reporting period. After gross domestic product (“GDP”)ⁱ rose 1.7% in the fourth quarter of 2005 — the first quarter in which GDP growth did not surpass 3.0% in nearly three years — the economy rebounded sharply in the first quarter of 2006. During this time, GDP rose 5.6%, its best showing since the third quarter of 2003. In the second quarter 2006, GDP growth was a more modest 2.5%, according to the Commerce Department’s initial reading for the period. The decline was largely attributed to lower consumer spending, triggered by higher interest rates and oil prices, as well as a cooling housing market. In addition, business spending fell during the quarter.
	The Federal Reserve Board (“Fed”)ⁱⁱ continued to raise interest rates during the reporting period. Despite the “changing of the guard” from Fed Chairman Alan Greenspan to Ben Bernanke in early 2006, it was “business as usual” for the Fed, as it raised short-term interest rates four times during the period. Since it began its tightening campaign in June 2004, the Fed has increased rates 17 consecutive times, bringing the federal funds rateⁱⁱⁱ from 1.00% to 5.25%. Coinciding with its latest rate hike in June 2006, the Fed said: “The extent and timing of any additional firming...will depend on the evolution of the outlook for both inflation and economic growth, as implied by incoming information.”


	For the six-month period ended June 30, 2006, the U.S. stock market produced positive returns, with the S&P 500 Index^iv returning 2.71%. While the economy expanded and corporate profits remained strong, the headwinds from steadily rising interest rates, inflationary pressures and the potential for additional Fed rate hikes tempered returns.
	Looking at the market more closely, small-cap stocks outperformed their mid-and large-cap counterparts, with the Russell 2000^v, Russell Midcap^vi and Russell 1000^vii Indexes returning 8.21%, 4.84% and 2.76%, respectively. From an investment style perspective, value stocks significantly outperformed growth stocks, with the Russell 3000 Value^viii and Russell 3000 Growth^ix Indexes returning 6.90% and -0.32%, respectively, over the reporting period.

Legg Mason Partners Variable Portfolios II I


	Performance Snapshot as of June 30, 2006 (unaudited)


		6 Months

Variable Diversified Strategic Income Portfolio¹		-0.55%

Lehman Brothers U.S. Aggregate Bond Index		-0.72%

Lipper Variable General Bond Funds Category Average		0.09%

Variable Equity Index Portfolio¹ — Class I Shares		2.54%

Variable Equity Index Portfolio¹ — Class II Shares		2.44%

S&P 500 Index		2.71%

Lipper Variable S&P 500 Index Objective Funds Category Average		2.54%

Variable Growth and Income Portfolio¹		0.99%

S&P 500 Index		2.71%

Russell 1000 Index		2.76%

Lipper Variable Large-Cap Core Funds Category Average		1.25%

Variable Aggressive Growth Portfolio¹ — Class I Shares		1.37%

Variable Aggressive Growth Portfolio¹ — Class II Shares		1.26%

Russell 3000 Growth Index		-0.32%

Lipper Variable Multi-Cap Growth Funds Category Average		-0.68%


	The performance shown represents past performance. Past performance is no guarantee of future results and current performance may be higher or lower than the performance shown above. Principal value and investment returns will fluctuate and investors’ shares, when redeemed, may be worth more or less than their original cost.

	Fund returns assume the reinvestment of all distributions, including returns of capital, if any, at net asset value and the deduction of all fund expenses.

	Performance figures reflect reimbursements and/or fee waivers, without which the performance would have been lower.

	Lipper, Inc. is a major independent mutual-fund tracking organization. Returns are based on the six-month period ended June 30, 2006 and include the reinvestment of all distributions, including returns of capital, if any. Returns were calculated among the 52 funds in the variable general bond funds category. Returns were calculated among the 55 funds in the variable S&P 500 index objective funds category. Returns were calculated among the 222 funds in the variable large-cap core funds category. Returns were calculated among the 140 funds in the variable multi-cap growth funds category.


¹		The Fund is an underlying investment option of various variable annuity and variable life insurance products. The Fund’s performance returns do not reflect the deduction of initial sales charges and expenses imposed in connection with investing in variable annuity or variable life insurance contracts, such as administrative fees, account charges, and surrender charges, which, if reflected, would reduce the performance of the Fund. Past performance is no guarantee of future results.

II Legg Mason Partners Variable Portfolios II

Legg Mason Partners Variable Diversified Strategic Income Portfolio²

Special Shareholder Notices

As part of the continuing effort to integrate investment products managed by the advisers acquired with Citigroup’s asset management business, Legg Mason, Inc. (“Legg Mason”) has recommended various Fund actions in order to streamline product offerings, eliminate redundancies and improve efficiencies within the organization. At Board meetings held during June and July 2006, the Fund’s Board reviewed and approved these recommendations, and provided authorization to move ahead with proxy solicitations for those matters needing shareholder approval.


	The Fund’s Board has approved the appointment of Legg Mason Partners Fund Advisor, LLC (“LMPFA”) as the Fund’s investment manager effective August 1, 2006. The Fund’s Board has also approved the appointment of Western Asset Management Company (“Western Asset”) and Western Asset Management Company Limited (“Western Asset Limited”) as the Fund’s subadvisers effective August 1, 2006. The portfolio managers who are responsible for the day-to-day management of the Fund remain the same immediately prior to and immediately after the date of these changes. LMPFA, Western Asset and Western Asset Limited are wholly-owned subsidiaries of Legg Mason.
	During the reporting period, management of the Fund was assumed by a team of investment professionals from Western Asset and Western Asset Limited. The Fund’s portfolio managers include S. Kenneth Leech, Stephen A. Walsh, Carl L. Eichstaedt, Edward A. Moody and Mark Lindbloom from Western Asset and Detlev Schlichter and Andres Sanchez-Balcazar from Western Asset Limited.
	The Fund was formerly known as Greenwich Street Series — Diversified Strategic Income Portfolio.

Performance Update


	For the six months ended June 30, 2006, the Fund returned -0.55%. These shares outperformed the Fund’s unmanaged benchmark, the Lehman Brothers U.S. Aggregate Bond Index, which returned -0.72% for the same period. The

The Fund is an underlying investment option of various variable annuity and variable life insurance products. The Fund’s performance returns do not reflect the deduction of initial sales charges and expenses imposed in connection with investing in variable annuity or variable life insurance contracts, such as administrative fees, account charges, and surrender charges, which, if reflected, would reduce the performance of the Fund. Past performance is no guarantee of future results.

Legg Mason Partners Variable Portfolios II III


	Lipper Variable General Bond Funds Category Average³ increased 0.09% over the same time frame.

Legg Mason Partners Variable Equity Index Portfolio⁴

Special Shareholder Notices


	During the reporting period, Charles Ko and Michael Soares, portfolio managers of Batterymarch Financial Management, Inc. (“Batterymarch”), assumed management of the Fund. Batterymarch is a wholly-owned subsidiary of Legg Mason.
	The Fund was formerly known as Greenwich Street Series — Equity Index Portfolio.

Performance Update


	For the six months ended June 30, 2006, Class I shares returned 2.54%. These shares underperformed the Fund’s unmanaged benchmark, the S&P 500 Index, which returned 2.71% for the same period. The Lipper Variable S&P 500


³	Lipper, Inc. is a major independent mutual-fund tracking organization. Returns are based on the six-month period ended June 30, 2006 including the reinvestment of dividends and capital gains distributions, if any, calculated among the 52 funds in the Fund’s Lipper category.

⁴

IV Legg Mason Partners Variable Portfolios II


	Index Objective Funds Category Average⁵ increased 2.54% over the same time frame.

Legg Mason Partners Variable Growth and Income Portfolio⁶

Special Shareholder Notices


	The Fund’s Board has approved the appointment of Legg Mason Partners Fund Advisor, LLC (“LMPFA”) as the Fund’s investment manager effective August 1, 2006. The Fund’s Board has also approved the appointment of CAM North America, LLC (“CAM N.A.”) as the Fund’s subadviser effective August 1, 2006. The portfolio manager who is responsible for the day-to-day management of the Fund remains the same immediately prior to and immediately after the date of these changes. LMPFA and CAM N.A. are wholly-owned subsidiaries of Legg Mason.
	Michael Kagan, a portfolio manager of CAM N.A., is responsible for the day-to-day management of the Fund.
	The Fund’s Board has also approved a reorganization pursuant to which the Fund’s assets would be acquired, and its liabilities assumed, by the Legg Mason Partners Variable Appreciation Portfolio (the “Acquiring Fund”), in exchange for shares of the Acquiring Fund. The Fund would then be liquidated, and shares of the Acquiring Fund would be distributed to Fund shareholders. Proxy materials describing the reorganization, and other initiatives requiring shareholder approval, are expected to be sent to shareholders later in 2006.


⁵	Lipper, Inc. is a major independent mutual-fund tracking organization. Returns are based on the six-month period ended June 30, 2006, including the reinvestment of dividends and capital gains distributions, if any, calculated among the 55 funds in the Fund’s Lipper category.

⁶

Legg Mason Partners Variable Portfolios II V


	If shareholder approval is obtained, Fund actions are generally expected to be implemented during 2007.
	The Fund was formerly known as Salomon Brothers Variable Growth and Income Fund.

Performance Update


	For the six months ended June 30, 2006, the Fund returned 0.99%. In comparison, the Fund’s unmanaged benchmarks, the S&P 500 Index and the Russell 1000 Index, returned 2.71% and 2.76%, respectively, for the same period. The Lipper Variable Large-Cap Core Funds Category Average⁷ increased 1.25% over the same time frame.

Legg Mason Partners Variable Aggressive Growth Portfolio⁸

Special Shareholder Notices


	The Fund’s Board has approved the appointment of Legg Mason Partners Fund Advisor, LLC (“LMPFA”) as the Fund’s investment manager effective August 1, 2006. The Fund’s Board has also approved the appointment of CAM North America, LLC (“CAM N.A.”) as the Fund’s subadviser effective August 1, 2006. The portfolio manager who is responsible for the day-to-day management of the Fund remains the same immediately prior to and immediately after the date of these changes. LMPFA and CAM N.A. are wholly-owned subsidiaries of Legg Mason.
	The Fund’s Board has also approved a reorganization pursuant to which the Fund’s assets would be acquired, and


⁷	Lipper, Inc. is a major independent mutual-fund tracking organization. Returns are based on the six-month period ended June 30, 2006, including the reinvestment of dividends and capital gains distributions, if any, calculated among the 222 funds in the Fund’s Lipper category.

⁸

VI Legg Mason Partners Variable Portfolios II


	its liabilities assumed, by the Legg Mason Partners Variable Portfolios III — Legg Mason Partners Variable Aggressive Growth Portfolio (the “Acquiring Fund”), in exchange for shares of the Acquiring Fund. The Fund would then be liquidated, and shares of the Acquiring Fund would be distributed to Fund shareholders. Proxy materials describing the reorganization, and other initiatives requiring shareholder approval, are expected to be sent to shareholders later in 2006. If shareholder approval is obtained, Fund actions are generally expected to be implemented during 2007.
	The Fund was formerly known as Salomon Brothers Variable Aggressive Growth Fund.

Performance Update


	For the six months ended June 30, 2006, Class I shares returned 1.37%. The Fund outperformed its unmanaged benchmark, the Russell 3000 Growth Index, which returned -0.32% for the same period. The Lipper Variable Multi-Cap Growth Funds Category Average⁹ decreased 0.68%.

Information About Your Funds

As you may be aware, several issues in the mutual fund industry have come under the scrutiny of federal and state regulators. Affiliates of the Funds’ Manager have, in recent years, 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 regulators appear to be examining, among other things, the Funds’ response to market timing and shareholder exchange activity, including compliance with prospectus disclosure related to these subjects. The Funds are not in a position to predict the outcome of these requests and investigations.


	Important information with regard to recent regulatory developments that may affect the Funds is contained in the Notes to Financial Statements included in this report.


⁹	Lipper, Inc. is a major independent mutual-fund tracking organization. Returns are based on the six-month period ended June 30, 2006, including the reinvestment of dividends and capital gains distributions, if any, calculated among the 140 funds in the Fund’s Lipper category, and excluding sales charges.

Legg Mason Partners Variable Portfolios II VII


	As always, thank you for your continued confidence in our stewardship of your assets. We look forward to helping you to meet your financial goals.

Sincerely,

R. Jay Gerken, CFA

Chairman, President and Chief Executive Officer

July 28, 2006

VIII Legg Mason Partners Variable Portfolios II

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.

RISKS:

Variable Diversified Strategic Income Portfolio: Investing in foreign securities is subject to certain risks not associated with domestic investing, such as currency fluctuations, and changes in political and economic conditions. These risks are magnified in emerging or developing markets. As interest rates rise, bond prices fall, reducing the value of the Fund’s share price. High yield bonds involve greater credit and liquidity risks than investment grade bonds. The Fund may use derivatives, such as options and futures, which can be illiquid, may disproportionately increase losses, and have a potentially large impact on Fund performance. Please see the Fund’s prospectus for more information on these and other risks.

Variable Equity Index Portfolio: The Fund may use derivatives, such as options and futures, which can be illiquid, may disproportionately increase losses, and have a potentially large impact on Fund performance. Please see the Fund’s prospectus for more information on these and other risks.

Variable Growth and Income Portfolio: As interest rates rise, bond prices fall, reducing the value of the Fund’s share price. High yield bonds involve greater credit and liquidity risks than investment grade bonds. The Fund may use derivatives, such as options and futures, which can be illiquid, may disproportionately increase losses, and have a potentially large impact on Fund performance. Please see the Fund’s prospectus for more information on these and other risks.

Variable Aggressive Growth Portfolio: Investments in small- and medium-capitalization companies may involve a higher degree of risk and volatility than investments in larger, more established companies. The Fund may use derivatives, such as options and futures, which can be illiquid, may disproportionately increase losses, and have a potentially large impact on Fund performance. Investing in foreign securities is subject to certain risks not associated with domestic investing, such as currency fluctuations, and changes in political and economic conditions. These risks are magnified in emerging or developing markets. Please see the Fund’s prospectus for more information on these and other risks.

All index performance reflects no deduction for fees, expenses or taxes. Please note that an investor cannot invest directly in an index.


ⁱ		Gross domestic product is a market value of goods and services produced by labor and property in a given country.

ⁱⁱ		The Federal Reserve Board is responsible for the formulation of a policy designed to promote economic growth, full employment, stable prices, and a sustainable pattern of international trade and payments.

ⁱⁱⁱ		The federal funds rate is the interest rate that banks with excess reserves at a Federal Reserve district bank charge other banks that need overnight loans.

^iv		The S&P 500 Index is an unmanaged index of 500 stocks that is generally representative of the performance of larger companies in the U.S.

^v		The Russell 2000 Index measures the performance of the 2,000 smallest companies in the Russell 3000 Index, which represents approximately 8% of the total market capitalization of the Russell 3000 Index.

^vi		The Russell Midcap Index measures the performance of the 800 smallest companies in the Russell 1000 Index, which represents approximately 25% of the total market capitalization of the Russell 1000 Index.

^vii		The Russell 1000 Index measures the performance of the 1,000 largest companies in the Russell 3000 Index, which represents approximately 92% of the total market capitalization of the Russell 3000 Index.

^viii		The Russell 3000 Value Index measures the performance of those Russell 3000 Index companies with lower price-to-book ratios and lower forecasted growth values. (A price-to-book ratio is the price of a stock compared to the difference between a company’s assets and liabilities.)

^ix		The Russell 3000 Growth Index measures the performance of those Russell 3000 Index companies with higher price-to-book ratios and higher forecasted growth values.

Legg Mason Partners Variable Portfolios II IX

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Fund at a Glance (unaudited)

Legg Mason Partners Variable Diversified Strategic Income Portfolio


	Investment Breakdown

Legg Mason Partners Variable Portfolios II 2006 Semi-Annual Report 1

Fund at a Glance (unaudited) (continued)

Legg Mason Partners Variable Equity Index Portfolio


	Investment Breakdown

2 Legg Mason Partners Variable Portfolios II 2006 Semi-Annual Report

Fund at a Glance (unaudited) (continued)

Legg Mason Partners Variable Growth and Income Portfolio


	Investment Breakdown

Legg Mason Partners Variable Portfolios II 2006 Semi-Annual Report 3

Fund at a Glance (unaudited) (continued)

Legg Mason Partners Variable Aggressive Growth Portfolio


	Investment Breakdown

4 Legg Mason Partners Variable Portfolios II 2006 Semi-Annual Report

Fund Expenses (unaudited)

Example

As a shareholder of the Funds, you may incur two types of costs: (1) transaction costs, and (2) ongoing costs, including management fees and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

This example is based on an investment of $1,000 invested on January 1, 2006 and held for the six months ended June 30, 2006.

Actual Expenses

The table below titled “Based on Actual Total Return” provides information about actual account values and actual expenses. You may use the information provided in this table, together with the amount you invested, to estimate the expenses that you paid over the period. To estimate the expenses you paid on your account, divide your ending account value by $1,000 (for example, an $8,600 ending account value divided by $1,000 = 8.6), then multiply the result by the number under the heading entitled “Expenses Paid During the Period”.


	Based on Actual Total Return (1)


					Beginning		Ending		Annualized			Expenses
		Actual Total			Account		Account		Expense			Paid During
		Return(2)			Value		Value		Ratio			the Period(3)

Legg Mason Partners Variable Diversified Strategic Income Portfolio — Class I			(0.55	)%	$	1,000.00	$	994.50		0.72	%	$	3.56

Legg Mason Partners Variable Equity Index Portfolio
	Class I		2.54			1,000.00		1,025.40		0.33			1.66
	Class II		2.44			1,000.00		1,024.40		0.58			2.91

Legg Mason Partners Variable Growth and Income Portfolio
	Class I		0.99			1,000.00		1,009.90		1.13			5.63

Legg Mason Partners Variable Aggressive Growth Portfolio
	Class I		1.37			1,000.00		1,013.70		0.83			4.14
	Class II		1.26			1,000.00		1,012.60		1.09			5.44


⁽¹⁾		For the six months ended June 30, 2006.

⁽²⁾		Assumes reinvestment of all distributions, including returns of capital, if any, at net asset value. Total return is not annualized, as it may not be representative of the total return for the year. 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. Performance figures may reflect fee waivers and/or expense reimbursements. Past performance is no guarantee of future results. In the absence of fee waivers and/or expense reimbursements, the total return would have been lower.

⁽³⁾		Expenses (net of fee waivers and/or expense reimbursements) are equal to each Funds’ or class’ respective annualized expense ratio multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year, then divided by 365.

Legg Mason Partners Variable Portfolios II 2006 Semi-Annual Report 5

Fund Expenses (unaudited) (continued)

Hypothetical Example for Comparison Purposes

The table below titled “Based on Hypothetical Total Return” provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio and an assumed rate of return of 5.00% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use the information provided in this table to compare the ongoing costs of investing in the Fund and other funds. To do so, compare the 5.00% hypothetical example relating to the Fund with the 5.00% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table below are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.


	Based on Hypothetical Total Return (1)


		Hypothetical			Beginning		Ending		Annualized			Expenses
		Annualized			Account		Account		Expense			Paid During
		Total Return			Value		Value		Ratio			the Period(2)

Legg Mason Partners Variable Diversified Strategic Income Portfolio — Class I			5.00	%	$	1,000.00	$	1,021.22		0.72	%	$	3.61

Legg Mason Partners Variable Equity Index Portfolio
	Class I		5.00			1,000.00		1,023.16		0.33			1.66
	Class II		5.00			1,000.00		1,021.92		0.58			2.91

Legg Mason Partners Variable Growth and Income Portfolio
	Class I		5.00			1,000.00		1,019.19		1.13			5.66

Legg Mason Partners Variable Aggressive Growth Portfolio
	Class I		5.00			1,000.00		1,020.68		0.83			4.16
	Class II		5.00			1,000.00		1,019.39		1.09			5.46


⁽¹⁾		For the six months ended June 30, 2006.

⁽²⁾		Expenses (net of fee waivers and/or expense reimbursements) are equal to each Funds’ or class’ respective annualized expense ratio multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year, then divided by 365.

6 Legg Mason Partners Variable Portfolios II 2006 Semi-Annual Report


	Schedules of Investments (June 30, 2006) (unaudited)

LEGG MASON VARIABLE DIVERSIFIED STRATEGIC INCOME PORTFOLIO


Face
Amount†		Security		Value

MORTGAGE-BACKED SECURITIES — 44.9%
FHLMC — 11.9%
		Federal Home Loan Mortgage Corp. (FHLMC), Gold:
$	129,387		7.000% due 2/1/15-5/1/16	$	132,689
	160,999		6.500% due 9/1/31		162,618
	8,800,000		5.000% due 7/13/36 (a)(b)		8,219,746
	1,000,000		6.000% due 7/13/36 (a)(b)		984,688

		Total FHLMC			9,499,741

FNMA — 25.3%
		Federal National Mortgage Association (FNMA):
	651,362		6.500% due 3/1/16-3/1/32		658,744
	140,205		6.000% due 8/1/16-4/1/32		138,596
	151,476		5.500% due 12/1/16		148,990
	2,000,000		5.000% due 7/18/21 (a)(b)		1,926,250
	5,900,000		6.000% due 8/17/21-7/13/36 (a)(b)		5,811,499
	62,690		7.500% due 2/1/30-7/1/31		64,874
	581,798		7.000% due 7/1/30-4/1/32		596,243
	820,643		6.000% due 4/1/32 (c)		811,011
	10,350,000		5.500% due 7/13/36-8/14/36 (a)(b)		9,941,219

		Total FNMA			20,097,426

GNMA — 7.7%
		Government National Mortgage Association (GNMA):
	62,844		7.000% due 6/15/28-7/15/29		64,858
	310,040		6.500% due 9/15/28-2/15/31		314,860
	2,000,000		5.000% due 7/20/36 (a)(b)		1,893,124
	3,900,000		6.000% due 7/20/36 (a)(b)		3,868,312

		Total GNMA			6,141,154

		TOTAL MORTGAGE-BACKED SECURITIES (Cost — $36,902,226)			35,738,321


Face
Amount†		Rating‡

ASSET-BACKED SECURITIES — 10.4%
Home Equity — 9.8%
	454,082	AAA	Accredited Mortgage Loan Trust, Series 2005-3, Class A1, 5.562% due 9/25/35 (d)	454,769
	808,039	AAA	ACE Securities Corp., Series 2006-SL2, Class A, 5.492% due 1/25/36 (c)(d)	808,744
	200,000	A	Ameriquest Mortgage Securities Inc., Series 2004-R11, Class M5, 6.522% due 11/25/34 (d)	204,335
	743,545	A	Argent Securities Inc., Series 2006-W4, Class A2A, 5.382% due 5/25/36 (c)(d)	743,996

See Notes to Financial Statements.

Legg Mason Partners Variable Portfolios II 2006 Semi-Annual Report 7


	Schedules of Investments (June 30, 2006) (unaudited) (continued)


Face
Amount†		Rating‡	Security		Value

Home Equity — 9.8% (continued)
$	651,428	AAA	Bayview Financial Acquisition Trust, Series 2006-B, Class 2A1, 5.200% due 4/28/36 (c)(d)		$	651,631
	510,000	AAA	Bear Stearns Asset Backed Securities, Series 2004-B01, Class 1A2, 5.672% due 9/25/34 (c)(d)			513,436
	270,000	AA	Countrywide Asset-Backed Certificates, Series 2004-05, Class M4, 6.572% due 6/25/34 (d)			274,535
	742,228	AAA	Countrywide Home Equity Loan Trust, Series 2006-D, Class 2A, 5.398% due 9/15/31 (c)(d)			742,640
	839,054	AAA	GSRPM Mortgage Loan Trust, Series 2006-1, Class A1, 5.622% due 3/25/35 (c)(d)(e)			839,054
	735,431	AAA	Indymac Home Equity Loan Asset-Backed Trust, Series 2006-H1, Class A, 5.492% due 4/25/36 (c)(d)			735,881
	775,114	AAA	IXIS Real Estate Capital Trust, Series 2006-HE2, Class A1, 5.382% due 8/25/36 (c)(d)			775,584
	200,000	A+	Novastar Home Equity Loan, Series 2004-01, Class M4, 6.297% due 2/25/34 (d)			201,762
	791,620	AAA	SACO I Trust, Series 2006-4, Class A1, 5.492% due 2/25/34 (c)(d)			792,181
			Sail Net Interest Margin Notes:
	7,825	BBB		Series 2003-3, Class A, 7.750% due 4/27/33 (e)		7,205
	25,495	BBB-		Series 2004-BN2A, Class A, 5.000% due 12/27/34 (e)		25,459

			Total Home Equity			7,771,212

Student Loan — 0.6%
	469,112	AAA	First Horizon ABS Trust, Series 2006-HE1, Class A, 5.482% due 10/25/34 (c)(d)			469,089

			TOTAL ASSET-BACKED SECURITIES (Cost — $8,223,398)			8,240,301

COLLATERALIZED MORTGAGE OBLIGATIONS — 24.8%
	845,764	AAA	American Home Mortgage Investment Trust, Series 2005-1, Class 6A, 5.294% due 6/25/45 (c)(d)			830,320
	400,000	AAA	Banc of America Commercial Mortgage Inc., 4.668% due 7/10/43 (c)			367,258
	464,558	AAA	Banc of America Mortgage Securities, Series 2005-H, Class 2A1, 4.821% due 9/25/35 (c)(d)			452,094
	372,823	AAA	Commercial Mortgage Pass-Through Certificates, Series 2001-J2A, Class A1, 5.447% due 7/16/34 (e)			369,408
			Countrywide Alternative Loan Trust:
	742,302	AAA		Series 2005-59, Class 1A1, 5.596% due 11/20/35 (c)(d)		745,492
	977,541	AAA		Series 2005-72, Class A1, 5.592% due 1/25/36 (c)(d)		979,132
	788,413	AAA		Series 2006-OA6, Class 1A1A, 5.532% due 4/25/36 (c)(d)		788,492
	735,506	AAA	Countrywide Home Loan Mortgage Pass Through Trust, Series 2005-9, Class 1A1, 5.622% due 5/25/35 (c)(d)			739,342
	728,582	AAA	Countrywide Home Loans, Series 2004-23, Class A, 6.869% due 11/25/34 (c)(d)			737,572

See Notes to Financial Statements.

8 Legg Mason Partners Variable Portfolios II 2006 Semi-Annual Report


	Schedules of Investments (June 30, 2006) (unaudited) (continued)


Face
Amount†		Rating‡	Security			Value

$	602,394	AAA	Deutsche ALT-A Securities Inc. Mortgage Loan Trust, Series 2005-AR1, Class 2A1, 4.998% due 8/25/35 (c)(d)			$	593,322
			Downey Savings and Loan Association Mortgage Loan Trust:
	658,386	AAA		Series 2005-AR2, Class 2A1A, 5.461% due 3/19/45 (c)(d)			659,582
				Series 2006-AR1:
	765,291	AAA			Class 1A1A, 4.808% due 4/19/36 (c)(d)		765,291
	765,291	AAA			Class 1A1B, 4.808% due 4/19/36 (c)(d)		765,291
	1,175,325	AAA	GSR Mortgage Loan Trust, Series 2005-AR5, Class 1A1, 4.614% due 10/25/35 (c)(d)				1,158,816
			Harborview Mortgage Loan Trust:
	880,302	AAA		Series 2004-08, Class 2A4A, 5.651% due 11/19/34 (c)(d)			883,936
	343,632	AAA		Series 2004-08, Class 3A2, 5.651% due 11/19/34 (d)			344,690
	908,081	AAA		Series 2004-11, Class 3A1A, 5.126% due 1/19/35 (c)(d)			911,893
			Indymac Index Mortgage Loan Trust:
	735,703	AAA		Series 2005-AR1, Class 1A1, 5.286% due 3/25/35 (c)(d)			733,748
	785,417	AAA		Series 2006-AR4, Class A1A, 5.532% due 5/25/46 (c)(d)			785,417
	640,000	Aaa(f)	JPMorgan Chase Commercial Mortgage Securities Corp., Series 2006-CB15, Class A4, 5.814% due 6/12/43 (c)(d)				635,182
	270,000	AAA	Merrill Lynch Mortgage Trust, Series 2006-C1, Class A4, 5.844% due 5/12/39 (d)				267,388
	856,762	AAA	Morgan Stanley Mortgage Loan Trust, Series 2006-3AR, Class 2A3, 5.913% due 3/25/36 (c)(d)				854,627
			Structured Asset Mortgage Investments Inc., Series 2006-AR5:
	1,087,782	AAA		Class 1A1, 5.532% due 5/25/36 (c)(d)			1,086,282
	500,000	AAA		Class 2A1, 5.532% due 5/25/36 (c)(d)			499,295
			Washington Mutual Inc.:
	1,024,335	AAA		Series 2005-AR17, Class A1A1, 5.592% due 12/25/45 (c)(d)			1,027,895
	724,489	AAA		Series 2005-AR19, Class A1A2, 5.612% due 12/25/45 (c)(d)			727,319
	700,000	AAA		Series 2006-AR6, Class 2A1, 5.997% due 8/25/36 (c)(d)			698,906
	285,550	AAA	Wells Fargo Mortgage Backed Securities Trust, Series 2006-AR8, Class 2A3, 5.240% due 5/25/36 (d)				281,991

			TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (Cost — $19,740,059)				19,689,981

CORPORATE BONDS & NOTES — 31.6%
Aerospace & Defense — 0.2%
			L-3 Communications Corp., Senior Subordinated Notes:
	25,000	BB+		7.625% due 6/15/12			25,500
	125,000	BB+		6.375% due 10/15/15			120,000

			Total Aerospace & Defense				145,500

Airlines — 0.3%
			Continental Airlines Inc., Pass-Through Certificates:
	15,478	B+		Series 2000-2, Class C, 8.312% due 4/2/11			14,680
	100,000	B		Series 2001-2, Class D, 7.568% due 12/1/06			99,808

See Notes to Financial Statements.

Legg Mason Partners Variable Portfolios II 2006 Semi-Annual Report 9


	Schedules of Investments (June 30, 2006) (unaudited) (continued)


Face
Amount†		Rating‡	Security			Value

Airlines — 0.3% (continued)
			United Airlines Inc., Pass-Through Certificates:
$	23,260	NR		Series 2000-1, Class B, 8.030% due 7/1/11 (g)		$	23,740
	49,094	NR		Series 2000-2, Class B, 7.811% due 10/1/09 (g)			51,202
	45,000	NR		Series 2001-1, Class C, 6.831% due 9/1/08 (g)			44,466

			Total Airlines				233,896

Auto Components — 0.1%
	25,000	B	Arvin Capital I, Capital Securities, 9.500% due 2/1/27				25,375
	25,000	B-	Rexnord Corp., Senior Subordinated Notes, 10.125% due 12/15/12				27,683

			Total Auto Components				53,058

Automobiles — 0.8%
	290,000	BBB	DaimlerChrysler North America Holding Corp., 5.875% due 3/15/11				285,547
			Ford Motor Co.:
				Debentures:
	50,000	B+			6.625% due 10/1/28		34,750
	25,000	B+			8.900% due 1/15/32		20,063
	250,000	B+		Notes, 7.450% due 7/16/31			181,875
			General Motors Corp., Senior Debentures:
	155,000	B-		8.250% due 7/15/23			122,837
	5,000	B-		8.375% due 7/15/33			4,050

			Total Automobiles				649,122

Beverages — 0.1%
	40,000	B	Cott Beverages USA Inc., Senior Subordinated Notes, 8.000% due 12/15/11				40,100

Building Products — 0.1%
			Associated Materials Inc.:
	50,000	CCC		Senior Discount Notes, step bond to yield 9.399% due 3/1/14			30,375
	20,000	CCC		Senior Subordinated Notes, 9.750% due 4/15/12			20,000

			Total Building Products				50,375

Capital Markets — 1.4%
	65,000	B	BCP Crystal U.S. Holdings Corp., Senior Subordinated Notes, 9.625% due 6/15/14				70,850
	450,000	A+	Goldman Sachs Group Inc., Notes, 4.500% due 6/15/10				430,613
	80,000	A-	Lehman Brothers Holdings E-Capital Trust I, Notes, 5.953% due 8/19/65 (d)				80,073
	140,000	A+	Lehman Brothers Holdings Inc., Notes, 4.000% due 1/22/08				136,393
	350,000	A+	Morgan Stanley, Notes, 3.625% due 4/1/08				338,861
	30,000	BB+	Morgan Stanley Bank AG for OAO Gazprom, Loan Participation Notes, 9.625% due 3/1/13				34,437

			Total Capital Markets				1,091,227

Chemicals — 0.4%
	50,000	BB-	Arco Chemical Co., Debentures, 9.800% due 2/1/20				59,000
	35,000	B	Huntsman International LLC, Senior Notes, 9.875% due 3/1/09				36,575

See Notes to Financial Statements.

10 Legg Mason Partners Variable Portfolios II 2006 Semi-Annual Report


	Schedules of Investments (June 30, 2006) (unaudited) (continued)


Face
Amount†		Rating‡	Security			Value

Chemicals — 0.4% (continued)
$	105,000	BB-	Lyondell Chemical Co., Senior Secured Notes, 11.125% due 7/15/12			$	114,450
	85,000	BBB-	Methanex Corp., Senior Notes, 8.750% due 8/15/12				91,694

			Total Chemicals				301,719

Commercial Banks — 1.5%
	130,000	BBB+	Glitnir Banki HF, Subordinated Notes, 6.693% due 6/15/16 (d)(e)				129,390
	120,000	BBB-	Resona Preferred Global Securities Cayman Ltd., 7.191% due 7/30/15 (d)(e)				120,566
	130,000	BBB-	Shinsei Finance Cayman Ltd., Bonds, 6.418% due 7/20/16 (d)(e)				122,311
	420,000	A	Wachovia Corp., Subordinated Notes, 5.250% due 8/1/14				401,226
	400,000	AA-	Wells Fargo & Co., Senior Notes, 4.200% due 1/15/10				382,556

			Total Commercial Banks				1,156,049

Commercial Services & Supplies — 0.6%
	50,000	CCC+	Allied Security Escrow Corp., Senior Subordinated Notes, 11.375% due 7/15/11				48,750
	115,000	BB-	Allied Waste North America Inc., Senior Notes, Series B, 8.500% due 12/1/08				119,600
	75,000	CCC+	Brand Services Inc., Senior Notes, 12.000% due 10/15/12				84,938
	25,000	B-	Cardtronics Inc., Senior Subordinated Notes, 9.250% due 8/15/13 (e)				24,750
	25,000	BB-	Corrections Corporation of America, Senior Subordinated Notes, 6.250% due 3/15/13				23,625
	210,000	BBB	Waste Management Inc., 6.375% due 11/15/12				214,508

			Total Commercial Services & Supplies				516,171

Communications Equipment — 0.1%
	75,000	B-	Nortel Networks Corp., Notes, 6.875% due 9/1/23				60,375

Computers & Peripherals — 0.0%
	25,000	B-	SunGard Data Systems Inc., Senior Notes, 9.125% due 8/15/13 (e)				26,062

Consumer Finance — 3.7%
			Ford Motor Credit Co.:
				Notes:
	740,000	B+			7.375% due 10/28/09 (c)		684,644
	25,000	B+			7.875% due 6/15/10		23,081
				Senior Notes:
	500,000	B+			5.800% due 1/12/09 (c)		457,042
	131,963	B+			10.486% due 6/15/11 (d)(e)		132,566
			General Motors Acceptance Corp.:
	60,000	BB		Medium-Term Notes, 4.375% due 12/10/07			57,573
				Notes:
	660,000	BB			6.125% due 8/28/07 (c)		653,275
	500,000	BB			5.625% due 5/15/09 (c)		475,886
	20,000	BB			7.250% due 3/2/11		19,409
	275,000	BB			6.875% due 9/15/11		262,674

See Notes to Financial Statements.

Legg Mason Partners Variable Portfolios II 2006 Semi-Annual Report 11


	Schedules of Investments (June 30, 2006) (unaudited) (continued)


Face
Amount†		Rating‡	Security			Value

Consumer Finance — 3.7% (continued)
$	150,000	BB			6.750% due 12/1/14	$	139,540
	60,000	BB		Senior Notes, 5.850% due 1/14/09			57,538

			Total Consumer Finance				2,963,228

Containers & Packaging — 0.7%
	75,000	B-	Berry Plastics Corp., Senior Subordinated Notes, 10.750% due 7/15/12				81,562
	75,000	B-	Graphic Packaging International Corp., Senior Subordinated Notes, 9.500% due 8/15/13				74,625
	150,000	B-	JSG Funding PLC, Senior Notes, 9.625% due 10/1/12				155,250
	155,000	BB-	Owens-Brockway Glass Container Inc., Senior Secured Notes, 8.875% due 2/15/09				160,425
	25,000	B	Plastipak Holdings Inc., Senior Notes, 8.500% due 12/15/15 (e)				25,125
	15,000	NR	Pliant Corp., Senior Secured Second Lien Notes, 11.125% due 9/1/09**				15,900
	25,000	CC	Radnor Holdings Corp., Senior Notes, 11.000% due 3/15/10				9,875

			Total Containers & Packaging				522,762

Diversified Consumer Services — 0.3%
			Service Corp. International:
	55,000	BB		Debentures, 7.875% due 2/1/13			55,756
	195,000	BB		Senior Notes, 6.500% due 3/15/08			194,513

			Total Diversified Consumer Services				250,269

Diversified Financial Services — 3.3%
	130,000	BBB+	Aiful Corp., Notes, 5.000% due 8/10/10 (e)				123,729
			Alamosa Delaware Inc.:
	44,000	A-		Senior Discount Notes, 12.000% due 7/31/09			46,860
	54,000	A-		Senior Notes, 11.000% due 7/31/10			59,400
	550,000	A+	Bank of America Corp., Subordinated Notes, 7.400% due 1/15/11 (c)				585,771
	20,000	BB-	Case Credit Corp., Notes, 6.750% due 10/21/07				20,050
	90,000	AA-	Credit Suisse First Boston USA Inc., Notes, 4.875% due 8/15/10				87,312
	440,000	AAA	General Electric Capital Corp., Medium-Term Notes, Series A, 4.125% due 9/1/09				421,758
	20,000	B	Hexion U.S. Finance Corp./ Hexion Nova Scotia Finance ULC, Senior Secured Notes, 9.000% due 7/15/14				20,350
	430,000	AA-	HSBC Finance Corp., Notes, 4.625% due 1/15/08				424,011
	100,000	A	ILFC E-Capital Trust I, 5.900% due 12/21/65 (d)(e)				97,574
	620,000	A	JPMorgan Chase & Co., Subordinated Notes, 5.125% due 9/15/14 (c)				586,581
	100,000	BBB	MUFG Capital Finance 1 Ltd., 6.346% due 7/25/16 (d)				96,635
	40,000	B-	Nell AF SARL, Senior Notes, 8.375% due 8/15/15 (e)				38,650
	50,000	CCC+	Vanguard Health Holdings Co. I LLC, Senior Discount Notes, step bond to yield 9.384% due 10/1/15				35,500

			Total Diversified Financial Services				2,644,181

See Notes to Financial Statements.

12 Legg Mason Partners Variable Portfolios II 2006 Semi-Annual Report


	Schedules of Investments (June 30, 2006) (unaudited) (continued)


Face
Amount†			Rating‡	Security		Value

Diversified Telecommunication Services — 1.2%
$	230,000		A-	Deutsche Telekom International Finance, Senior Notes, 5.750% due 3/23/16		$	217,471
	50,000		NR	GT Group Telecom Inc., Senior Discount Notes, 13.250% due 2/1/10 (g)(h)(i)			0
	75,000		B	Intelsat Ltd., Senior Discount Notes, step bond to yield 9.207% due 2/1/15 (e)			52,125
	25,000		B+	Intelsat Subsidiary Holding Co., Ltd., Senior Notes, 9.613% due 1/15/12 (d)			25,375
	160,000		BBB+	Koninklijke KPN NV, Senior Notes, 8.000% due 10/1/10			169,860
	50,000		B-	Northern Telecom Capital Corp., Notes, 7.875% due 6/15/26			41,250
	16,000		B	PanAmSat Corp., Senior Notes, 9.000% due 8/15/14			16,320
				Qwest Communications International Inc., Senior Notes:
	75,000		B		7.500% due 2/15/14		73,500
	90,000		B		Series B, 7.500% due 2/15/14		88,200
	10,000		BB	Qwest Corp., Debentures, 7.500% due 6/15/23			9,425
	140,000		BBB+	Telecom Italia Capital SA, Notes, 5.250% due 10/1/15			126,942
	1,000,000	^MXN	BBB+	Telefonos de Mexico SA de CV, Senior Notes, 8.750% due 1/31/16			82,038
	80,000		A	Verizon Global Funding Corp., Notes, 7.375% due 9/1/12			85,142

				Total Diversified Telecommunication Services			987,648

Electric Utilities — 1.1%
	25,000		B+	Edison Mission Energy, Senior Notes, 7.730% due 6/15/09			25,375
	230,000		BBB	Exelon Corp., Bonds, 5.625% due 6/15/35			202,431
				FirstEnergy Corp., Notes:
	120,000		BBB-		Series B, 6.450% due 11/15/11		122,240
	270,000		BBB-		Series C, 7.375% due 11/15/31		290,530
	25,000		B	Inergy L.P./ Inergy Finance Corp., Senior Notes, 6.875% due 12/15/14			23,375
	90,000		B-	Orion Power Holdings Inc., Senior Notes, 12.000% due 5/1/10			102,150
	130,000		BBB	Pacific Gas & Electric Co., First Mortgage Bonds, 6.050% due 3/1/34			123,094

				Total Electric Utilities			889,195

Energy Equipment & Services — 0.0%
	22,000		B-	Dresser-Rand Group Inc., Senior Subordinated Notes, 7.625% due 11/1/14			21,120

Food Products — 0.6%
	45,000		BB-	Dean Foods Co., Senior Notes, 6.900% due 10/15/17			42,413
	75,000		B	Dole Food Co. Inc., Senior Notes, 7.250% due 6/15/10			67,500
	355,000		BBB+	Kraft Foods Inc., Senior Notes, 5.625% due 11/1/11 (c)			350,062

				Total Food Products			459,975

Health Care Providers & Services — 0.9%
	25,000		B	Community Health Systems Inc., Senior Subordinated Notes, 6.500% due 12/15/12			23,844
	25,000		B	DaVita Inc., Senior Notes, 6.625% due 3/15/13			23,875
	50,000		B+	Extendicare Health Services Inc., Senior Notes, 9.500% due 7/1/10			52,437
	140,000		BB+	HCA Inc., Debentures, 8.360% due 4/15/24			140,812

See Notes to Financial Statements.

Legg Mason Partners Variable Portfolios II 2006 Semi-Annual Report 13


	Schedules of Investments (June 30, 2006) (unaudited) (continued)


Face
Amount†		Rating‡	Security		Value

Health Care Providers & Services — 0.9% (continued)
$	50,000	B-	IASIS Healthcare LLC/ IASIS Capital Corp., Senior Subordinated Notes, 8.750% due 6/15/14		$	49,250
	50,000	B-	Psychiatric Solutions Inc., Senior Subordinated Notes, 7.750% due 7/15/15			49,188
			Tenet Healthcare Corp., Senior Notes:
	75,000	B		7.375% due 2/1/13		68,812
	25,000	B		9.875% due 7/1/14		25,125
	300,000	BBB+	WellPoint Health Networks Inc., Notes, 6.375% due 1/15/12			305,365

			Total Health Care Providers & Services			738,708

Hotels, Restaurants & Leisure — 1.0%
	75,000	B+	Boyd Gaming Corp., Senior Subordinated Notes, 6.750% due 4/15/14			71,531
	75,000	BB+	Caesars Entertainment Inc., Senior Subordinated Notes, 8.875% due 9/15/08			78,937
	25,000	B-	Carrols Corp., Senior Subordinated Notes, 9.000% due 1/15/13			25,188
	75,000	B-	Herbst Gaming Inc., Senior Subordinated Notes, 7.000% due 11/15/14			71,625
	50,000	B	Las Vegas Sands Corp., Senior Notes, 6.375% due 2/15/15			46,625
			Mandalay Resort Group, Senior Subordinated:
	30,000	B+		Debentures, 7.625% due 7/15/13		29,850
	80,000	B+		Notes, Series B, 10.250% due 8/1/07		83,300
	125,000	BB	MGM MIRAGE Inc., Senior Notes, 6.750% due 9/1/12			120,937
	50,000	B+	Mohegan Tribal Gaming Authority, Senior Subordinated Notes, 6.875% due 2/15/15			47,375
	75,000	B+	Penn National Gaming Inc., Senior Subordinated Notes, 6.875% due 12/1/11			73,688
	75,000	B-	Pinnacle Entertainment Inc., Senior Subordinated Notes, 8.750% due 10/1/13			78,563
	25,000	B+	Scientific Games Corp., Senior Subordinated Notes, 6.250% due 12/15/12			23,500
	50,000	B+	Turning Stone Casino Resort Enterprise, Senior Notes, 9.125% due 12/15/10 (e)			50,750

			Total Hotels, Restaurants & Leisure			801,869

Household Durables — 0.3%
	70,000	BB+	Schuler Homes Inc., Senior Subordinated Notes, 10.500% due 7/15/11			73,747
	50,000	B	Sealy Mattress Co., Senior Subordinated Notes, 8.250% due 6/15/14			50,250
	25,000	B+	Standard Pacific Corp., Senior Subordinated Notes, 9.250% due 4/15/12			24,969
	98,000	B	Tempur-Pedic Inc./ Tempur Production USA Inc., Senior Subordinated Notes, 10.250% due 8/15/10			103,880

			Total Household Durables			252,846

Independent Power Producers & Energy Traders — 0.9%
	55,000	B	AES Corp., Senior Notes, 9.500% due 6/1/09			58,575
	260,000	BBB	Duke Energy Corp., Senior Notes, 5.625% due 11/30/12			257,252

See Notes to Financial Statements.

14 Legg Mason Partners Variable Portfolios II 2006 Semi-Annual Report


	Schedules of Investments (June 30, 2006) (unaudited) (continued)


Face
Amount†		Rating‡	Security		Value

Independent Power Producers & Energy Traders — 0.9% (continued)
			Dynegy Holdings Inc., Senior Debentures:
$	125,000	B-		7.125% due 5/15/18	$	110,000
	30,000	B-		7.625% due 10/15/26		26,400
			NRG Energy Inc., Senior Notes:
	25,000	B-		7.250% due 2/1/14		24,437
	85,000	B-		7.375% due 2/1/16		83,087
			TXU Corp., Senior Notes:
	40,000	BB+		Series P, 5.550% due 11/15/14		36,481
	60,000	BB+		Series R, 6.550% due 11/15/34		53,009
	40,000	BBB-	TXU Electric Delivery Co., Senior Secured Notes, 6.375% due 1/15/15			40,158

			Total Independent Power Producers & Energy Traders			689,399

Industrial Conglomerates — 0.6%
	50,000	NR	Aqua-Chem Inc., Senior Subordinated Notes, 11.250% due 7/1/08 (h)			45,000
	4,000	B	Koppers Inc., Senior Notes, 9.875% due 10/15/13			4,310
	420,000	BBB+	Tyco International Group SA, Notes, 6.000% due 11/15/13			416,703

			Total Industrial Conglomerates			466,013

Insurance — 0.1%
	65,000	BB	Markel Capital Trust I, Capital Securities, Series B, 8.710% due 1/1/46			67,461

IT Services — 0.3%
	200,000	BBB-	Electronic Data Systems Corp., 7.125% due 10/15/09			206,700
	5,000	B	Iron Mountain Inc., Senior Subordinated Notes, 8.625% due 4/1/13			5,025

			Total IT Services			211,725

Machinery — 0.1%
	100,000	B	Mueller Holdings Inc., Discount Notes, step bond to yield 12.068% due 4/15/14			84,500

Media — 3.7%
	125,000	B	Advanstar Communications Inc., Senior Secured Notes, 10.750% due 8/15/10			134,687
	50,000	B	Cadmus Communications Corp., Senior Subordinated Notes, 8.375% due 6/15/14			49,750
	188,212	B-	CanWest Media Inc., Senior Subordinated Notes, 8.000% due 9/15/12			187,271
	175,000	CCC-	CCH I Holdings LLC/ CCH I Holding Capital Corp., Senior Accreting Notes, 11.750% due 5/15/14			111,125
	189,000	CCC-	CCH I LLC/ CCH Capital Corp., Senior Secured Notes, 11.000% due 10/1/15			166,320
	245,000	BBB+	Comcast Cable Communications Holdings Inc., Notes, 8.375% due 3/15/13			272,460
	190,000	BBB+	Comcast Corp., Notes, 6.500% due 1/15/15			191,800
			CSC Holdings Inc., Senior Notes:
	50,000	B+		6.750% due 4/15/12 (e)		48,500
	5,000	B+		Series B, 7.625% due 4/1/11		5,025
	65,000	B	Dex Media East LLC/ Dex Media East Finance Co., Senior Notes, Series B, 12.125% due 11/15/12			73,287

See Notes to Financial Statements.

Legg Mason Partners Variable Portfolios II 2006 Semi-Annual Report 15


	Schedules of Investments (June 30, 2006) (unaudited) (continued)


Face
Amount†		Rating‡	Security	Value

Media — 3.7% (continued)
$	100,000	B	Dex Media West LLC/ Dex Media Finance Co., Senior Notes, Series B, 8.500% due 8/15/10	$	104,250
	81,000	BB-	DIRECTV Holdings LLC/ DIRECTV Financing Co. Inc., Senior Notes, 8.375% due 3/15/13		85,252
	150,000	BB-	EchoStar DBS Corp., Senior Notes, 6.625% due 10/1/14		141,375
	100,000	CCC+	Houghton Mifflin Co., Senior Discount Notes, step bond to yield 11.492% due 10/15/13		83,000
	130,000	CCC+	Insight Communications Co. Inc., Senior Discount Notes, 12.250% due 2/15/11		137,800
	40,000	B	Lamar Media Corp., Senior Subordinated Notes, 6.625% due 8/15/15		37,200
	410,000	BB+	Liberty Media Corp., Senior Notes, 7.875% due 7/15/09		426,514
	175,000	B-	LodgeNet Entertainment Corp., Senior Subordinated Notes, 9.500% due 6/15/13		187,250
	90,000	BBB	News America Inc., 6.200% due 12/15/34		81,932
	100,000	B	R.H. Donnelley Finance Corp. I, Senior Subordinated Notes, 10.875% due 12/15/12 (e)		110,250
	25,000	B	R.H. Donnelley Inc., Senior Subordinated Notes, 10.875% due 12/15/12		27,563
	25,000	B+	Rainbow National Services LLC, Senior Subordinated Debentures, 10.375% due 9/1/14 (e)		27,812
	10,000	B	Sinclair Broadcast Group Inc., Senior Subordinated Notes, 8.000% due 3/15/12		10,200
	250,000	BBB+	Time Warner Inc., Senior Notes, 7.625% due 4/15/31		269,959

			Total Media		2,970,582

Metals & Mining — 0.1%
	75,000	B+	Aleris International Inc., Senior Secured Notes, 10.375% due 10/15/10		81,375

Multi-Utilities — 0.3%
	45,000	BB+	Avista Corp., Senior Notes, 9.750% due 6/1/08		47,853
	220,000	BBB	Dominion Resources Inc., Senior Notes, 5.700% due 9/17/12		215,559

			Total Multi-Utilities		263,412

Multiline Retail — 0.0%
	25,000	B-	Neiman Marcus Group Inc., Senior Subordinated Notes, 10.375% due 10/15/15 (e)		26,687

See Notes to Financial Statements.

16 Legg Mason Partners Variable Portfolios II 2006 Semi-Annual Report


	Schedules of Investments (June 30, 2006) (unaudited) (continued)


Face
Amount†		Rating‡	Security			Value

Oil, Gas & Consumable Fuels — 4.6%
$	190,000	BBB-	Amerada Hess Corp., Notes, 7.300% due 8/15/31			$	201,940
	180,000	BBB+	Anadarko Finance Co., Senior Notes, Series B, 7.500% due 5/1/31				193,957
			Chesapeake Energy Corp., Senior Notes:
	100,000	BB		6.625% due 1/15/16			93,500
	50,000	BB		6.250% due 1/15/18			45,875
	220,000	AA	ChevronTexaco Capital Co., Notes, 3.500% due 9/17/07				214,687
	88,000	BB-	Cimarex Energy Co., Senior Notes, 9.600% due 3/15/12				93,280
	410,000	A-	ConocoPhillips Holding Co., Senior Notes, 6.950% due 4/15/29 (c)				447,462
	240,000	BBB	Devon Energy Corp., Debentures, 7.950% due 4/15/32				277,365
			El Paso Corp., Medium-Term Notes:
	50,000	B		7.375% due 12/15/12			49,875
	330,000	B		7.800% due 8/1/31 (c)			322,163
	75,000	B-	EXCO Resources Inc., Senior Notes, 7.250% due 1/15/11				72,375
	150,000	BB	Gaz Capital SA, Notes, 8.625% due 4/28/34 (e)				172,095
	370,000	BB+	Kerr-McGee Corp., Notes, 7.875% due 9/15/31 (c)				419,482
			Kinder Morgan Energy Partners LP:
	120,000	BBB+		6.750% due 3/15/11			122,710
	30,000	BBB+		Senior Notes, 6.300% due 2/1/09			30,152
			Pemex Project Funding Master Trust, Notes:
	50,000	BBB		5.750% due 12/15/15 (e)			46,113
	25,000	BBB		6.625% due 6/15/35 (e)			22,656
	75,000	B-	Stone Energy Corp., Senior Subordinated Notes, 6.750% due 12/15/14				75,656
	105,000	B	Swift Energy Co., Senior Subordinated Notes, 9.375% due 5/1/12				111,300
	50,000	A-	Vintage Petroleum Inc., Senior Notes, 8.250% due 5/1/12				52,909
	25,000	B	Whiting Petroleum Corp., Senior Subordinated Notes, 7.000% due 2/1/14				23,750
			Williams Cos. Inc.:
				Notes:
	150,000	BB-			7.125% due 9/1/11		150,750
	25,000	BB-			8.750% due 3/15/32		27,313
	125,000	BB-		Senior Notes, 7.625% due 7/15/19			127,500

See Notes to Financial Statements.

Legg Mason Partners Variable Portfolios II 2006 Semi-Annual Report 17


	Schedules of Investments (June 30, 2006) (unaudited) (continued)


Face
Amount†		Rating‡	Security		Value

Oil, Gas & Consumable Fuels — 4.6% (continued)
			XTO Energy Inc.:
$	30,000	BBB-		7.500% due 4/15/12	$	31,929
	210,000	BBB-		Senior Notes, 6.250% due 4/15/13		210,424

			Total Oil, Gas & Consumable Fuels			3,637,218

Paper & Forest Products — 0.6%
	75,000	B+	Bowater Canada Finance Corp., Notes, 7.950% due 11/15/11			71,625
	370,000	BBB	Weyerhaeuser Co., Notes, 6.750% due 3/15/12			378,458

			Total Paper & Forest Products			450,083

Pharmaceuticals — 0.1%
	75,000	BB-	Valeant Pharmaceuticals International, Senior Notes, 7.000% due 12/15/11			71,625

Real Estate Investment Trusts (REITs) — 0.2%
	130,000	BB	Host Marriott LP, Senior Notes, Series I, 9.500% due 1/15/07			133,900

Semiconductors & Semiconductor Equipment — 0.0%
	7,000	CCC	Amkor Technology Inc., Senior Subordinated Notes, 10.500% due 5/1/09			7,193

Textiles, Apparel & Luxury Goods — 0.2%
	75,000	B-	Levi Strauss & Co., Senior Notes, 9.750% due 1/15/15			75,375
	125,000	B-	Simmons Co., Senior Discount Notes, step bond to yield 9.955% due 12/15/14			83,750

			Total Textiles, Apparel & Luxury Goods			159,125

Thrifts & Mortgage Finance — 0.1%
	100,000	CCC-	Ocwen Capital Trust I, Capital Securities, 10.875% due 8/1/27			105,500

Tobacco — 0.4%
	320,000	BBB	Altria Group Inc., Notes, 7.000% due 11/4/13			338,084

Wireless Telecommunication Services — 0.6%
	125,000	A-	Nextel Communications Inc., Senior Notes, Series D, 7.375% due 8/1/15			127,321
	300,000	A-	Sprint Capital Corp., Notes, 8.375% due 3/15/12			331,848
	50,000	A-	UbiquiTel Operating Co., Senior Notes, 9.875% due 3/1/11			54,625

			Total Wireless Telecommunication Services			513,794

			TOTAL CORPORATE BONDS & NOTES (Cost — $25,446,897)			25,133,131

SOVEREIGN BONDS — 3.2%
Brazil — 0.9%
			Federative Republic of Brazil, Collective Action Securities:
	430,000	BB		8.000% due 1/15/18		453,650
	250,000	BB		8.750% due 2/4/25		274,500

			Total Brazil			728,150

See Notes to Financial Statements.

18 Legg Mason Partners Variable Portfolios II 2006 Semi-Annual Report


	Schedules of Investments (June 30, 2006) (unaudited) (continued)


Face
Amount†		Rating‡	Security		Value

Colombia — 0.2%
			Republic of Colombia:
$	50,000	BB		10.750% due 1/15/13	$	58,900
	81,000	BB		8.125% due 5/21/24		82,620

			Total Colombia			141,520

Italy — 0.4%
	350,000	AA-	Region of Lombardy, 5.804% due 10/25/32			349,029

Mexico — 0.8%
			United Mexican States:
	175,000	BBB		8.125% due 12/30/19		197,925
			Medium-Term Notes, Series A:
	200,000	BBB		6.375% due 1/16/13		201,000
	250,000	BBB		5.875% due 1/15/14		243,750

			Total Mexico			642,675

Panama — 0.1%
			Republic of Panama:
	50,000	BB		7.250% due 3/15/15		50,750
	10,000	BB		9.375% due 4/1/29		11,925
	35,000	BB		6.700% due 1/26/36		32,025

			Total Panama			94,700

Russia — 0.8%
			Russian Federation:
	66,667	BBB		8.250% due 3/31/10		69,333
	175,000	BBB		11.000% due 7/24/18		241,938
	260,000	BBB		5.000% due 3/31/30 (e)		277,225

			Total Russia			588,496

			TOTAL SOVEREIGN BONDS (Cost — $2,589,957)			2,544,570

U.S. GOVERNMENT & AGENCY OBLIGATIONS — 8.8%
U.S. Government Agencies — 0.3%
	50,000		Federal National Mortgage Association (FNMA), 6.625% due 9/15/09			51,712
	200,000		Tennessee Valley Authority, Notes, 5.375% due 4/1/56			189,778

			Total U.S. Government Agencies			241,490

U.S. Government Obligations — 8.5%
	90,000		U.S. Treasury Bonds, 6.250% due 8/15/23			99,288
			U.S. Treasury Notes:
	1,000,000			3.625% due 1/15/10 (c)		952,422
	300,000			4.000% due 3/15/10		288,973
	1,900,000			4.000% due 4/15/10 (c)		1,828,752
	840,000			5.000% due 2/15/11 (c)		838,196
	120,000			4.500% due 2/28/11		117,047
	5,000			4.875% due 5/31/11		4,951
	200,000			4.000% due 11/15/12		188,047

See Notes to Financial Statements.

Legg Mason Partners Variable Portfolios II 2006 Semi-Annual Report 19


	Schedules of Investments (June 30, 2006) (unaudited) (continued)


Face
Amount†		Security		Value

U.S. Government Obligations — 8.5% (continued)
$	210,000		4.500% due 11/15/15	$	200,091
	90,000		4.500% due 2/15/16		85,655
	70,000		5.125% due 5/15/16		69,940
	2,360,000		4.500% due 2/15/36 (c)		2,116,811

		Total U.S. Government Obligations			6,790,173

		TOTAL U.S. GOVERNMENT & AGENCY OBLIGATIONS (Cost — $7,393,190)			7,031,663

U.S. TREASURY INFLATION PROTECTED SECURITIES — 2.1%
		U.S. Treasury Bonds, Inflation Indexed:
	1,096,135		2.000% due 1/15/16 (c)		1,047,109
	680,010		2.000% due 1/15/26 (c)		622,794

		TOTAL U.S. TREASURY INFLATION PROTECTED SECURITIES (Cost — $1,727,282)			1,669,903


Shares

COMMON STOCKS — 0.0%
CONSUMER DISCRETIONARY — 0.0%
Household Durables — 0.0%
	122,658	Home Interiors of Gifts Inc. (h)(i)*	1,226

CONSUMER STAPLES — 0.0%
Food Products — 0.0%
	3,630	Aurora Foods Inc. (h)(i)*	0

FINANCIALS — 0.0%
Diversified Financial Services — 0.0%
	369	Outsourcing Solutions Inc. (i)*	1,567

INFORMATION TECHNOLOGY — 0.0%
Communications Equipment — 0.0%
	578	Motorola Inc.	11,647

Semiconductors & Semiconductor Equipment — 0.0%
	63	Freescale Semiconductor Inc., Class B Shares *	1,852

		TOTAL INFORMATION TECHNOLOGY	13,499

TELECOMMUNICATION SERVICES — 0.0%
Diversified Telecommunication Services — 0.0%
	66	McLeodUSA Inc., Class A Shares (i)*	0

		TOTAL COMMON STOCKS (Cost — $246,039)	16,292

See Notes to Financial Statements.

20 Legg Mason Partners Variable Portfolios II 2006 Semi-Annual Report


	Schedules of Investments (June 30, 2006) (unaudited) (continued)


Shares		Security	Value

CONVERTIBLE PREFERRED STOCK — 0.0% TELECOMMUNICATION SERVICES — 0.0%
Wireless Telecommunication Services — 0.0%
	700	Crown Castle International Corp., 6.250% due 8/15/12 (Cost — $20,673)	$	39,025

	Warrants

WARRANTS — 0.0%
	60	Cybernet Internet Services International Inc., Expires 7/1/09 (h)(i)*		0
	50	GT Group Telecom Inc., Class B Shares, Expires 2/1/10 (e)(h)(i)*		0
	50	IWO Holdings Inc., Expires 1/15/11 (e)(h)(i)*		0
	60	Merrill Corp., Class B Shares, Expires 5/1/09 (e)(h)(i)*		0
	10	Pliant Corp., Expires 6/1/10 (e)(h)(i)*		0
	150	RSL Communications Ltd., Class A Shares, Expires 11/15/06 (h)(i)*		0
	1,000	United Mexican States, Series XW10, Expires 10/10/06*		4,300

		TOTAL WARRANTS (Cost — $23,752)		4,300

		TOTAL INVESTMENTS BEFORE SHORT-TERM INVESTMENTS (Cost — $102,313,473)		100,107,487


Face
Amount

SHORT-TERM INVESTMENTS — 14.9%
Sovereign Bonds — 0.6%
$	500,000	Government of Canada, 4.962% due 9/20/06 (j) (Cost — $494,532)		494,115
U.S. Government Agency — 0.2%
	150,000	Federal National Mortgage Association (FNMA), Discount Notes, 5.053% due 9/25/06 (j)(k) (Cost — $148,223)		148,178
Repurchase Agreement — 14.1%
	11,194,000	Merrill Lynch, Pierce, Fenner & Smith Inc. repurchase agreement dated 6/30/06, 5.150% due 7/3/06; Proceeds at maturity — $11,198,804; (Fully collateralized by U.S. government agency obligation, 0.000% due 1/13/33; Market value — $11,418,367) (Cost — $11,194,000) (c)		11,194,000

		TOTAL SHORT-TERM INVESTMENTS (Cost — $11,836,755)		11,836,293

		TOTAL INVESTMENTS — 140.7% (Cost — $114,150,228#)		111,943,780
		Liabilities in Excess of Other Assets — (40.7)%		(32,389,854	)

		TOTAL NET ASSETS — 100.0%	$	79,553,926

See Notes to Financial Statements.

Legg Mason Partners Variable Portfolios II 2006 Semi-Annual Report 21


	Schedules of Investments (June 30, 2006) (unaudited) (continued)


*		Non-income producing security.

^‡		All ratings are by Standard & Poor’s Ratings Service, unless otherwise noted.

^†		Face amount denominated in U.S. dollars, unless otherwise noted.

^(a)		This security is traded on a to-be-announced (“TBA”) basis (See Note 1).

^(b)		All or a portion of this security was acquired under mortgage dollar roll agreement (See Notes 1 and 3).

^(c)		All or a portion of this security is segregated for open futures contracts and mortgage dollar rolls.

^(d)		Variable rate security. Interest rate disclosed is that which is in effect at June 30, 2006.

^(e)		Security is exempt from registration under Rule 144A of the Securities Act of 1933. This security may be resold in transactions that are exempt from registration, normally to qualified institutional buyers. This security has been deemed liquid pursuant to guidelines approved by the Board of Trustees, unless otherwise noted.

^(f)		Rating by Moody’s Investors Service.

^(g)		Security is currently in default.

^(h)		Illiquid security.

⁽ⁱ⁾		Security is valued in good faith at fair value by or under the direction of the Board of Trustees (See Note 1).

^(j)		Rate shown represents yield to maturity.

^(k)		All or a portion of this security is held at the broker as collateral for open futures contracts.

**		Pilant Corp. emerged out of Chapter 11 Bankruptcy protection on July 19, 2006.

#		Aggregate cost for federal income tax purposes is substantially the same.

		See page 47 for definitions of ratings.


		Abbreviation used in this schedule:


MXN		— Mexican Peso


	Schedule of Options Written (unaudited)


					Strike
Contracts		Security	Expiration Date		Price		Value

	8	U.S. Treasury Notes 10 Year Futures, Call		11/21/06		107		2,210
	8	U.S. Treasury Notes 10 Year Futures, Call		11/21/06		108		1,085
	8	U.S. Treasury Notes 10 Year Futures, Put		11/21/06		101		1,585
	8	U.S. Treasury Notes 10 Year Futures, Put		11/21/06		102		2,710

		TOTAL OPTIONS WRITTEN (Premiums received — $7,668)					$	7,590

See Notes to Financial Statements.

22 Legg Mason Partners Variable Portfolios II 2006 Semi-Annual Report


	Schedules of Investments (June 30, 2006) (unaudited) (continued)

LEGG MASON VARIABLE EQUITY INDEX PORTFOLIO


Shares		Security	Value

COMMON STOCKS — 99.2%
CONSUMER DISCRETIONARY — 10.4%
Auto Components — 0.2%
	8,504	Cooper Tire & Rubber Co.	$	94,734
	24,647	Goodyear Tire & Rubber Co.*		273,582
	27,162	Johnson Controls Inc.		2,233,260

		Total Auto Components		2,601,576

Automobiles — 0.4%
	260,119	Ford Motor Co.		1,802,625
	78,795	General Motors Corp.		2,347,303
	37,429	Harley-Davidson Inc.		2,054,478

		Total Automobiles		6,204,406

Distributors — 0.1%
	24,058	Genuine Parts Co.		1,002,256

Diversified Consumer Services — 0.1%
	19,497	Apollo Group Inc., Class A Shares*		1,007,410
	46,332	H&R Block Inc.		1,105,482

		Total Diversified Consumer Services		2,112,892

Hotels, Restaurants & Leisure — 1.5%
	60,537	Carnival Corp.		2,526,814
	17,738	Darden Restaurants Inc.		698,877
	25,740	Harrah’s Entertainment Inc.		1,832,173
	46,084	Hilton Hotels Corp.		1,303,256
	47,142	International Game Technology		1,788,567
	45,292	Marriott International Inc., Class A Shares		1,726,531
	173,606	McDonald’s Corp.		5,833,162
	106,929	Starbucks Corp.*		4,037,639
	29,985	Starwood Hotels & Resorts Worldwide Inc.		1,809,295
	16,182	Wendy’s International Inc.		943,249
	37,603	Yum! Brands Inc.		1,890,303

		Total Hotels, Restaurants & Leisure		24,389,866

Household Durables — 0.6%
	10,588	Black & Decker Corp.		894,262
	16,909	Centex Corp.		850,523
	37,899	D.R. Horton Inc.		902,754
	20,403	Fortune Brands Inc.		1,448,817
	9,267	Harman International Industries Inc.		791,124
	10,266	KB HOME		470,696
	25,102	Leggett & Platt Inc.		627,048
	19,071	Lennar Corp., Class A Shares		846,180
	38,384	Newell Rubbermaid Inc.		991,459
	29,673	Pulte Homes Inc.		854,285

See Notes to Financial Statements.

Legg Mason Partners Variable Portfolios II 2006 Semi-Annual Report 23


	Schedules of Investments (June 30, 2006) (unaudited) (continued)


Shares		Security	Value

Household Durables — 0.6% (continued)
	8,147	Snap-on Inc.	$	329,302
	9,876	Stanley Works		466,345
	10,860	Whirlpool Corp.		897,579

		Total Household Durables		10,370,374

Internet & Catalog Retail — 0.4%
	43,081	Amazon.com Inc.*		1,666,373
	161,097	eBay Inc.*		4,718,531

		Total Internet & Catalog Retail		6,384,904

Leisure Equipment & Products — 0.2%
	13,248	Brunswick Corp.		440,496
	40,019	Eastman Kodak Co.		951,652
	24,417	Hasbro Inc.		442,192
	54,241	Mattel Inc.		895,519

		Total Leisure Equipment & Products		2,729,859

Media — 3.4%
	108,028	CBS Corp., Class B Shares		2,922,157
	70,116	Clear Channel Communications Inc.		2,170,090
	294,368	Comcast Corp., Class A Shares*		9,637,608
	8,207	Dow Jones & Co. Inc.		287,327
	11,972	E.W. Scripps Co., Class A Shares		516,472
	33,318	Gannett Co. Inc.		1,863,476
	62,187	Interpublic Group of Cos. Inc.*		519,261
	49,992	McGraw-Hill Cos. Inc.		2,511,098
	5,895	Meredith Corp.		292,038
	19,599	New York Times Co., Class A Shares		480,960
	329,571	News Corp., Class A Shares		6,321,172
	23,769	Omnicom Group Inc.		2,117,580
	596,594	Time Warner Inc.		10,321,076
	28,470	Tribune Co.		923,282
	31,165	Univision Communications Inc., Class A Shares*		1,044,028
	100,457	Viacom Inc., Class B Shares*		3,600,379
	305,788	Walt Disney Co.		9,173,640

		Total Media		54,701,644

Multiline Retail — 1.2%
	15,796	Big Lots Inc.*		269,796
	8,478	Dillard’s Inc., Class A Shares		270,024
	43,909	Dollar General Corp.		613,848
	21,221	Family Dollar Stores Inc.		518,429
	77,076	Federated Department Stores Inc.		2,820,982
	32,718	J.C. Penney Co. Inc.		2,208,792
	47,431	Kohl’s Corp.*		2,804,121
	30,003	Nordstrom Inc.		1,095,109

See Notes to Financial Statements.

24 Legg Mason Partners Variable Portfolios II 2006 Semi-Annual Report


	Schedules of Investments (June 30, 2006) (unaudited) (continued)


Shares		Security	Value

Multiline Retail — 1.2% (continued)
	13,460	Sears Holdings Corp.*	$	2,084,146
	120,291	Target Corp.		5,878,621

		Total Multiline Retail		18,563,868

Specialty Retail — 2.0%
	20,984	AutoNation Inc.*		449,897
	7,559	AutoZone Inc.*		666,704
	39,321	Bed Bath & Beyond Inc.*		1,304,277
	56,090	Best Buy Co. Inc.		3,075,976
	20,978	Circuit City Stores Inc.		571,021
	76,759	Gap Inc.		1,335,607
	287,975	Home Depot Inc.		10,306,625
	47,705	Limited Brands Inc.		1,220,771
	108,087	Lowe’s Cos. Inc.		6,557,638
	40,085	Office Depot Inc.*		1,523,230
	9,787	OfficeMax Inc.		398,820
	18,669	RadioShack Corp.		261,366
	15,329	Sherwin-Williams Co.		727,821
	101,443	Staples Inc.		2,467,094
	19,631	Tiffany & Co.		648,216
	63,727	TJX Cos. Inc.		1,456,799

		Total Specialty Retail		32,971,862

Textiles, Apparel & Luxury Goods — 0.3%
	53,622	Coach Inc.*		1,603,298
	15,880	Jones Apparel Group Inc.		504,825
	14,576	Liz Claiborne Inc.		540,187
	26,379	NIKE Inc., Class B Shares		2,136,699
	12,236	V.F. Corp.		831,069

		Total Textiles, Apparel & Luxury Goods		5,616,078

		TOTAL CONSUMER DISCRETIONARY		167,649,585

CONSUMER STAPLES — 9.5%
Beverages — 2.1%
	107,668	Anheuser-Busch Cos. Inc.		4,908,584
	11,581	Brown-Forman Corp., Class B Shares		827,463
	285,544	Coca-Cola Co.		12,284,103
	42,227	Coca-Cola Enterprises Inc.		860,164
	27,730	Constellation Brands Inc., Class A Shares*		693,250
	8,104	Molson Coors Brewing Co., Class B Shares		550,100
	18,883	Pepsi Bottling Group Inc.		607,088
	230,229	PepsiCo Inc.		13,822,949

		Total Beverages		34,553,701

See Notes to Financial Statements.

Legg Mason Partners Variable Portfolios II 2006 Semi-Annual Report 25


	Schedules of Investments (June 30, 2006) (unaudited) (continued)


Shares		Security	Value

Food & Staples Retailing — 2.4%
	65,621	Costco Wholesale Corp.	$	3,748,928
	113,835	CVS Corp.		3,494,734
	100,796	Kroger Co.		2,203,401
	63,016	Safeway Inc.		1,638,416
	28,739	SUPERVALU Inc.		882,279
	86,175	Sysco Corp.		2,633,508
	348,353	Wal-Mart Stores Inc.		16,780,164
	140,735	Walgreen Co.		6,310,557
	19,470	Whole Foods Market Inc.		1,258,541

		Total Food & Staples Retailing		38,950,528

Food Products — 1.2%
	90,806	Archer-Daniels-Midland Co.		3,748,472
	26,045	Campbell Soup Co.		966,530
	72,359	ConAgra Foods Inc.		1,599,857
	19,286	Dean Foods Co.*		717,246
	49,589	General Mills Inc.		2,561,768
	46,966	H.J. Heinz Co.		1,935,939
	25,014	Hershey Co.		1,377,521
	34,243	Kellogg Co.		1,658,388
	18,757	McCormick & Co. Inc., Non Voting Shares		629,297
	105,904	Sara Lee Corp.		1,696,582
	35,099	Tyson Foods Inc., Class A Shares		521,571
	30,930	Wm. Wrigley Jr. Co.		1,402,985

		Total Food Products		18,816,156

Household Products — 2.1%
	21,019	Clorox Co.		1,281,528
	71,705	Colgate-Palmolive Co.		4,295,130
	64,054	Kimberly-Clark Corp.		3,952,132
	457,182	Procter & Gamble Co.		25,419,319

		Total Household Products		34,948,109

Personal Products — 0.2%
	10,825	Alberto-Culver Co.		527,394
	62,734	Avon Products Inc.		1,944,754
	16,874	Estee Lauder Cos. Inc., Class A Shares		652,518

		Total Personal Products		3,124,666

Tobacco — 1.5%
	290,922	Altria Group Inc.		21,362,402
	11,925	Reynolds American Inc.		1,374,953
	22,494	UST Inc.		1,016,504

		Total Tobacco		23,753,859

		TOTAL CONSUMER STAPLES		154,147,019

See Notes to Financial Statements.

26 Legg Mason Partners Variable Portfolios II 2006 Semi-Annual Report


	Schedules of Investments (June 30, 2006) (unaudited) (continued)


Shares		Security	Value

ENERGY — 10.1%
Energy Equipment & Services — 2.0%
	47,476	Baker Hughes Inc.	$	3,885,911
	44,792	BJ Services Co.		1,668,950
	71,882	Halliburton Co.		5,334,363
	43,224	Nabors Industries Ltd.*		1,460,539
	24,377	National-Oilwell Varco Inc.*		1,543,552
	19,193	Noble Corp.		1,428,343
	15,356	Rowan Cos. Inc.		546,520
	164,382	Schlumberger Ltd.		10,702,912
	45,266	Transocean Inc.*		3,635,765
	48,578	Weatherford International Ltd.*		2,410,440

		Total Energy Equipment & Services		32,617,295

Oil, Gas & Consumable Fuels — 8.1%
	63,882	Anadarko Petroleum Corp.		3,046,532
	46,024	Apache Corp.		3,141,138
	57,586	Chesapeake Energy Corp.		1,741,976
	308,662	Chevron Corp.		19,155,564
	229,971	ConocoPhillips		15,070,000
	25,387	CONSOL Energy Inc.		1,186,081
	61,300	Devon Energy Corp.		3,703,133
	96,376	El Paso Corp.		1,445,640
	33,780	EOG Resources Inc.		2,342,305
	842,534	Exxon Mobil Corp. (a)		51,689,461
	33,595	Hess Corp.		1,775,496
	31,627	Kerr-McGee Corp.		2,193,332
	14,522	Kinder Morgan Inc.		1,450,603
	50,495	Marathon Oil Corp.		4,206,233
	23,102	Murphy Oil Corp.		1,290,478
	59,667	Occidental Petroleum Corp.		6,118,851
	18,573	Sunoco Inc.		1,286,923
	85,746	Valero Energy Corp.		5,703,824
	82,918	Williams Cos. Inc.		1,936,964
	50,574	XTO Energy Inc.		2,238,911

		Total Oil, Gas & Consumable Fuels		130,723,445

		TOTAL ENERGY		163,340,740

FINANCIALS — 21.3%
Capital Markets — 3.4%
	34,048	Ameriprise Financial Inc.		1,520,924
	107,096	Bank of New York Co. Inc.		3,448,491
	16,803	Bear Stearns Cos. Inc.		2,353,764
	143,749	Charles Schwab Corp.		2,297,109
	59,411	ETRADE Financial Corp.		1,355,759
	11,672	Federated Investors Inc., Class B Shares		367,668
	21,206	Franklin Resources Inc.		1,840,893

See Notes to Financial Statements.

Legg Mason Partners Variable Portfolios II 2006 Semi-Annual Report 27


	Schedules of Investments (June 30, 2006) (unaudited) (continued)


Shares		Security	Value

Capital Markets — 3.4% (continued)
	60,194	Goldman Sachs Group Inc.	$	9,054,984
	28,906	Janus Capital Group Inc.		517,417
	18,398	Legg Mason Inc.		1,830,969
	74,597	Lehman Brothers Holdings Inc.		4,859,995
	57,198	Mellon Financial Corp.		1,969,327
	128,734	Merrill Lynch & Co. Inc.		8,954,737
	149,227	Morgan Stanley		9,432,639
	25,739	Northern Trust Corp.		1,423,367
	46,303	State Street Corp.		2,689,741
	37,000	T. Rowe Price Group Inc.		1,398,970

		Total Capital Markets		55,316,754

Commercial Banks — 4.2%
	48,504	AmSouth Bancorp		1,282,931
	76,782	BB&T Corp.		3,193,363
	22,509	Comerica Inc.		1,170,243
	25,464	Commerce Bancorp Inc.		908,301
	18,035	Compass Bancshares Inc.		1,002,746
	77,533	Fifth Third Bancorp		2,864,844
	17,256	First Horizon National Corp.		693,691
	34,301	Huntington Bancshares Inc.		808,818
	56,337	KeyCorp		2,010,104
	10,984	M&T Bank Corp.		1,295,233
	31,511	Marshall & Ilsley Corp.		1,441,313
	75,838	National City Corp.		2,744,577
	64,810	North Fork Bancorporation Inc.		1,955,318
	41,238	PNC Financial Services Group Inc.		2,893,670
	63,911	Regions Financial Corp.		2,116,732
	50,826	SunTrust Banks Inc.		3,875,991
	44,917	Synovus Financial Corp.		1,202,877
	247,977	U.S. Bancorp		7,657,530
	224,098	Wachovia Corp.		12,119,220
	233,949	Wells Fargo & Co.		15,693,299
	14,773	Zions Bancorporation		1,151,408

		Total Commercial Banks		68,082,209

Consumer Finance — 1.0%
	171,901	American Express Co.		9,148,571
	42,221	Capital One Financial Corp.		3,607,784
	57,243	SLM Corp.		3,029,300

		Total Consumer Finance		15,785,655

See Notes to Financial Statements.

28 Legg Mason Partners Variable Portfolios II 2006 Semi-Annual Report


	Schedules of Investments (June 30, 2006) (unaudited) (continued)


Shares		Security	Value

Diversified Financial Services — 5.6%
	635,488	Bank of America Corp.	$	30,566,973
	27,773	CIT Group Inc.		1,452,250
	692,267	Citigroup Inc.		33,394,960
	484,082	JPMorgan Chase & Co.		20,331,444
	33,889	Moody’s Corp.		1,845,595
	38,589	Principal Financial Group Inc.		2,147,478

		Total Diversified Financial Services		89,738,700

Insurance — 4.5%
	45,190	ACE Ltd.		2,286,162
	69,281	AFLAC Inc.		3,211,174
	88,521	Allstate Corp.		4,844,754
	14,556	Ambac Financial Group Inc.		1,180,492
	361,885	American International Group Inc.		21,369,309
	44,396	Aon Corp.		1,545,869
	57,806	Chubb Corp.		2,884,519
	24,455	Cincinnati Financial Corp.		1,149,630
	50,445	Genworth Financial Inc., Class A Shares		1,757,504
	42,215	Hartford Financial Services Group Inc.		3,571,389
	39,909	Lincoln National Corp.		2,252,464
	56,568	Loews Corp.		2,005,336
	76,547	Marsh & McLennan Cos. Inc.		2,058,349
	18,602	MBIA Inc.		1,089,147
	105,695	MetLife Inc.		5,412,641
	108,737	Progressive Corp.		2,795,628
	68,350	Prudential Financial Inc.		5,310,795
	16,539	SAFECO Corp.		931,973
	97,004	St. Paul Travelers Cos. Inc.		4,324,438
	14,007	Torchmark Corp.		850,505
	41,191	UnumProvident Corp.		746,793
	25,144	XL Capital Ltd., Class A Shares		1,541,327

		Total Insurance		73,120,198

Real Estate Investment Trusts (REITs) — 1.0%
	13,757	Apartment Investment and Management Co., Class A Shares		597,742
	29,878	Archstone-Smith Trust		1,519,894
	12,820	Boston Properties Inc.		1,158,928
	51,010	Equity Office Properties Trust		1,862,375
	40,577	Equity Residential		1,815,009
	29,453	Kimco Realty Corp.		1,074,740
	25,577	Plum Creek Timber Co. Inc.		907,983
	34,024	ProLogis		1,773,331
	11,554	Public Storage Inc.		876,949
	25,643	Simon Property Group Inc.		2,126,830
	16,702	Vornado Realty Trust		1,629,280

		Total Real Estate Investment Trusts (REITs)		15,343,061

See Notes to Financial Statements.

Legg Mason Partners Variable Portfolios II 2006 Semi-Annual Report 29


	Schedules of Investments (June 30, 2006) (unaudited) (continued)


Shares		Security	Value

Thrifts & Mortgage Finance — 1.6%
	84,362	Countrywide Financial Corp.	$	3,212,505
	134,949	Fannie Mae		6,491,047
	96,272	Freddie Mac		5,488,467
	35,856	Golden West Financial Corp.		2,660,515
	12,184	MGIC Investment Corp.		791,960
	52,431	Sovereign Bancorp Inc.		1,064,879
	133,854	Washington Mutual Inc.		6,101,065

		Total Thrifts & Mortgage Finance		25,810,438

		TOTAL FINANCIALS		343,197,015

HEALTH CARE — 12.2%
Biotechnology — 1.3%
	164,291	Amgen Inc.*		10,716,702
	26,275	Applera Corp. — Applied Biosystems Group		849,996
	47,908	Biogen Idec Inc.*		2,219,578
	36,272	Genzyme Corp.*		2,214,405
	63,394	Gilead Sciences Inc.*		3,750,389
	34,297	MedImmune Inc.*		929,449

		Total Biotechnology		20,680,519

Health Care Equipment & Supplies — 1.8%
	7,581	Bausch & Lomb Inc.		371,772
	91,032	Baxter International Inc.		3,346,336
	34,457	Becton, Dickinson & Co.		2,106,356
	34,495	Biomet Inc.		1,079,349
	169,282	Boston Scientific Corp.*		2,850,709
	14,587	C.R. Bard Inc.		1,068,644
	17,288	Fisher Scientific International Inc.*		1,262,888
	21,733	Hospira Inc.*		933,215
	168,082	Medtronic Inc.		7,886,408
	7,421	Millipore Corp.*		467,449
	17,733	PerkinElmer Inc.		370,620
	50,290	St. Jude Medical Inc.*		1,630,402
	40,467	Stryker Corp.		1,704,065
	23,235	Thermo Electron Corp.*		842,036
	14,440	Waters Corp.*		641,136
	34,554	Zimmer Holdings Inc.*		1,959,903

		Total Health Care Equipment & Supplies		28,521,288

Health Care Providers & Services — 2.7%
	78,996	Aetna Inc.		3,154,310
	29,387	AmerisourceBergen Corp.		1,231,903
	58,192	Cardinal Health Inc.		3,743,491
	61,640	Caremark Rx Inc.		3,073,987
	16,693	CIGNA Corp.		1,644,428
	22,361	Coventry Health Care Inc.*		1,228,513

See Notes to Financial Statements.

30 Legg Mason Partners Variable Portfolios II 2006 Semi-Annual Report


	Schedules of Investments (June 30, 2006) (unaudited) (continued)


Shares		Security	Value

Health Care Providers & Services — 2.7% (continued)
	20,249	Express Scripts Inc.*	$	1,452,663
	56,852	HCA Inc.		2,453,164
	33,455	Health Management Associates Inc., Class A Shares		659,398
	23,044	Humana Inc.*		1,237,463
	28,231	IMS Health Inc.		758,002
	17,373	Laboratory Corp. of America Holdings*		1,081,122
	11,186	Manor Care Inc.		524,847
	42,325	McKesson Corp.		2,001,126
	42,028	Medco Health Solutions Inc.*		2,407,364
	19,736	Patterson Cos. Inc.*		689,379
	22,640	Quest Diagnostics Inc.		1,356,589
	66,485	Tenet Healthcare Corp.*		464,065
	187,666	UnitedHealth Group Inc.		8,403,684
	88,808	WellPoint Inc.*		6,462,558

		Total Health Care Providers & Services		44,028,056

Pharmaceuticals — 6.4%
	212,636	Abbott Laboratories		9,273,056
	21,269	Allergan Inc.		2,281,313
	14,882	Barr Pharmaceuticals Inc.*		709,722
	273,907	Bristol-Myers Squibb Co.		7,083,235
	157,452	Eli Lilly & Co.		8,702,372
	45,129	Forest Laboratories Inc.*		1,746,041
	412,537	Johnson & Johnson		24,719,217
	34,090	King Pharmaceuticals Inc.*		579,530
	303,719	Merck & Co. Inc.		11,064,483
	29,496	Mylan Laboratories Inc.		589,920
	1,020,868	Pfizer Inc.		23,959,772
	206,824	Schering-Plough Corp.		3,935,861
	14,126	Watson Pharmaceuticals Inc.*		328,853
	187,521	Wyeth		8,327,808

		Total Pharmaceuticals		103,301,183

		TOTAL HEALTH CARE		196,531,046

INDUSTRIALS — 11.6%
Aerospace & Defense — 2.4%
	111,399	Boeing Co.		9,124,692
	56,242	General Dynamics Corp.		3,681,601
	16,930	Goodrich Corp.		682,110
	115,002	Honeywell International Inc.		4,634,580
	16,992	L-3 Communications Holdings Inc.		1,281,537
	49,270	Lockheed Martin Corp.		3,534,630
	47,894	Northrop Grumman Corp.		3,068,090
	62,075	Raytheon Co.		2,766,683
	23,837	Rockwell Collins Inc.		1,331,773

See Notes to Financial Statements.

Legg Mason Partners Variable Portfolios II 2006 Semi-Annual Report 31


	Schedules of Investments (June 30, 2006) (unaudited) (continued)


Shares		Security	Value

Aerospace & Defense — 2.4% (continued)
	140,958	United Technologies Corp.	$	8,939,556

		Total Aerospace & Defense		39,045,252

Air Freight & Logistics — 1.1%
	42,509	FedEx Corp.		4,967,602
	8,328	Ryder System Inc.		486,605
	151,117	United Parcel Service Inc., Class B Shares		12,441,462

		Total Air Freight & Logistics		17,895,669

Airlines — 0.1%
	98,398	Southwest Airlines Co.		1,610,775

Building Products — 0.2%
	24,459	American Standard Cos. Inc.		1,058,341
	55,087	Masco Corp.		1,632,779

		Total Building Products		2,691,120

Commercial Services & Supplies — 0.7%
	33,741	Allied Waste Industries Inc.*		383,298
	15,293	Avery Dennison Corp.		887,911
	139,355	Cendant Corp.		2,270,093
	19,486	Cintas Corp.		774,763
	18,003	Equifax Inc.		618,223
	17,924	Monster Worldwide Inc.*		764,638
	30,806	Pitney Bowes Inc.		1,272,288
	30,266	R.R. Donnelley & Sons Co.		966,999
	23,934	Robert Half International Inc.		1,005,228
	75,947	Waste Management Inc.		2,724,978

		Total Commercial Services & Supplies		11,668,419

Construction & Engineering — 0.1%
	12,198	Fluor Corp.		1,133,560

Electrical Equipment — 0.5%
	23,545	American Power Conversion Corp.		458,892
	12,767	Cooper Industries Ltd., Class A Shares		1,186,310
	57,187	Emerson Electric Co.		4,792,843
	24,731	Rockwell Automation Inc.		1,780,879

		Total Electrical Equipment		8,218,924

Industrial Conglomerates — 4.1%
	105,039	3M Co.		8,484,000
	1,448,023	General Electric Co.		47,726,838
	18,125	Textron Inc.		1,670,763
	283,684	Tyco International Ltd.		7,801,310

		Total Industrial Conglomerates		65,682,911

Machinery — 1.6%
	93,249	Caterpillar Inc.		6,945,186

See Notes to Financial Statements.

32 Legg Mason Partners Variable Portfolios II 2006 Semi-Annual Report


	Schedules of Investments (June 30, 2006) (unaudited) (continued)


Shares		Security	Value

Machinery — 1.6% (continued)
	6,451	Cummins Inc.	$	788,635
	32,870	Danaher Corp.		2,114,198
	32,681	Deere & Co.		2,728,537
	28,407	Dover Corp.		1,404,158
	20,847	Eaton Corp.		1,571,864
	57,701	Illinois Tool Works Inc.		2,740,797
	45,840	Ingersoll-Rand Co., Ltd., Class A Shares		1,961,035
	25,902	ITT Industries Inc.		1,282,149
	8,565	Navistar International Corp.*		210,785
	23,027	PACCAR Inc.		1,896,964
	17,369	Pall Corp.		486,332
	16,763	Parker Hannifin Corp.		1,300,809

		Total Machinery		25,431,449

Road & Rail — 0.8%
	50,805	Burlington Northern Santa Fe Corp.		4,026,296
	30,872	CSX Corp.		2,174,624
	57,738	Norfolk Southern Corp.		3,072,816
	37,471	Union Pacific Corp.		3,483,304

		Total Road & Rail		12,757,040

Trading Companies & Distributors — 0.0%
	10,584	W. W. Grainger Inc.		796,234

		TOTAL INDUSTRIALS		186,931,353

INFORMATION TECHNOLOGY — 14.4%
Communications Equipment — 2.7%
	16,422	ADC Telecommunications Inc.*		276,875
	22,386	Andrew Corp.*		198,340
	57,740	Avaya Inc.*		659,391
	79,060	Ciena Corp.*		380,279
	850,510	Cisco Systems Inc.*		16,610,460
	27,626	Comverse Technology Inc.*		546,166
	217,002	Corning Inc.*		5,249,278
	229,046	JDS Uniphase Corp.*		579,486
	78,822	Juniper Networks Inc.*		1,260,364
	624,152	Lucent Technologies Inc.*		1,510,448
	344,118	Motorola Inc.		6,933,978
	233,258	QUALCOMM Inc.		9,346,648
	62,430	Tellabs Inc.*		830,943

		Total Communications Equipment		44,382,656

Computers & Peripherals — 3.4%
	118,495	Apple Computer Inc.*		6,768,434
	316,486	Dell Inc.*		7,725,423
	329,439	EMC Corp.*		3,613,946
	37,341	Gateway Inc.*		70,948

See Notes to Financial Statements.

Legg Mason Partners Variable Portfolios II 2006 Semi-Annual Report 33


	Schedules of Investments (June 30, 2006) (unaudited) (continued)


Shares		Security	Value

Computers & Peripherals — 3.4% (continued)
	388,458	Hewlett-Packard Co.	$	12,306,349
	216,004	International Business Machines Corp.		16,593,427
	14,604	Lexmark International Inc., Class A Shares*		815,341
	25,542	NCR Corp.*		935,859
	52,129	Network Appliance Inc.*		1,840,154
	22,696	QLogic Corp.*		391,279
	27,214	SanDisk Corp.*		1,387,370
	487,310	Sun Microsystems Inc.*		2,022,337

		Total Computers & Peripherals		54,470,867

Electronic Equipment & Instruments — 0.3%
	59,326	Agilent Technologies Inc.*		1,872,329
	24,324	Jabil Circuit Inc.		622,694
	19,312	Molex Inc.		648,304
	70,995	Sanmina-SCI Corp.*		326,577
	127,401	Solectron Corp.*		435,711
	35,620	Symbol Technologies Inc.		384,340
	11,407	Tektronix Inc.		335,594

		Total Electronic Equipment & Instruments		4,625,549

Internet Software & Services — 1.1%
	28,714	Google Inc., Class A Shares*		12,040,641
	34,076	VeriSign Inc.*		789,541
	174,687	Yahoo! Inc.*		5,764,671

		Total Internet Software & Services		18,594,853

IT Services — 1.0%
	16,434	Affiliated Computer Services Inc., Class A Shares*		848,159
	80,302	Automatic Data Processing Inc.		3,641,696
	26,211	Computer Sciences Corp.*		1,269,661
	19,185	Convergys Corp.*		374,107
	72,246	Electronic Data Systems Corp.		1,738,239
	106,285	First Data Corp.		4,787,076
	24,605	Fiserv Inc.*		1,116,083
	46,723	Paychex Inc.		1,821,263
	18,614	Sabre Holdings Corp., Class A Shares		409,508
	47,701	Unisys Corp.*		299,562

		Total IT Services		16,305,354

Office Electronics — 0.1%
	127,923	Xerox Corp.*		1,779,409

Semiconductors & Semiconductor Equipment — 2.7%
	67,447	Advanced Micro Devices Inc.*		1,647,056
	49,735	Altera Corp.*		872,849
	49,858	Analog Devices Inc.		1,602,436
	217,258	Applied Materials Inc.		3,536,960
	63,817	Broadcom Corp., Class A Shares*		1,917,701

See Notes to Financial Statements.

34 Legg Mason Partners Variable Portfolios II 2006 Semi-Annual Report


	Schedules of Investments (June 30, 2006) (unaudited) (continued)


Shares		Security	Value

Semiconductors & Semiconductor Equipment — 2.7% (continued)
	56,532	Freescale Semiconductor Inc., Class B Shares*	$	1,662,041
	809,523	Intel Corp.		15,340,461
	27,737	KLA-Tencor Corp.		1,153,027
	42,365	Linear Technology Corp.		1,418,804
	54,560	LSI Logic Corp.*		488,312
	44,679	Maxim Integrated Products Inc.		1,434,643
	101,026	Micron Technology Inc.*		1,521,451
	46,548	National Semiconductor Corp.		1,110,170
	17,429	Novellus Systems Inc.*		430,496
	49,113	NVIDIA Corp.*		1,045,616
	28,019	PMC-Sierra Inc.*		263,378
	27,189	Teradyne Inc.*		378,743
	217,069	Texas Instruments Inc.		6,575,020
	47,857	Xilinx Inc.		1,083,961

		Total Semiconductors & Semiconductor Equipment		43,483,125

Software — 3.1%
	83,415	Adobe Systems Inc.*		2,532,479
	32,281	Autodesk Inc.*		1,112,403
	29,514	BMC Software Inc.*		705,385
	63,307	CA Inc.		1,300,959
	25,377	Citrix Systems Inc.*		1,018,633
	51,966	Compuware Corp.*		348,172
	42,661	Electronic Arts Inc.*		1,836,130
	23,803	Intuit Inc.*		1,437,463
	1,222,278	Microsoft Corp.		28,479,077
	48,299	Novell Inc.*		320,222
	542,563	Oracle Corp.*		7,861,738
	15,373	Parametric Technology Corp.*		195,391
	144,214	Symantec Corp.*		2,241,086

		Total Software		49,389,138

		TOTAL INFORMATION TECHNOLOGY		233,030,951

MATERIALS — 3.0%
Chemicals — 1.5%
	31,022	Air Products & Chemicals Inc.		1,982,926
	9,659	Ashland Inc.		644,256
	134,171	Dow Chemical Co.		5,236,694
	128,353	E.I. du Pont de Nemours & Co.		5,339,485
	11,253	Eastman Chemical Co.		607,662
	25,340	Ecolab Inc.		1,028,297
	15,755	Hercules Inc.*		240,421
	11,058	International Flavors & Fragrances Inc.		389,684
	37,627	Monsanto Co.		3,167,817
	22,924	PPG Industries Inc.		1,512,984
	45,017	Praxair Inc.		2,430,918

See Notes to Financial Statements.

Legg Mason Partners Variable Portfolios II 2006 Semi-Annual Report 35


	Schedules of Investments (June 30, 2006) (unaudited) (continued)


Shares		Security	Value

Chemicals — 1.5% (continued)
	19,994	Rohm & Haas Co.	$	1,002,099
	9,315	Sigma-Aldrich Corp.		676,642

		Total Chemicals		24,259,885

Construction Materials — 0.1%
	13,910	Vulcan Materials Co.		1,084,980

Containers & Packaging — 0.2%
	14,584	Ball Corp.		540,191
	14,566	Bemis Co. Inc.		446,011
	19,923	Pactiv Corp.*		493,094
	11,369	Sealed Air Corp.		592,098
	15,153	Temple-Inland Inc.		649,609

		Total Containers & Packaging		2,721,003

Metals & Mining — 0.9%
	120,888	Alcoa Inc.		3,911,936
	12,153	Allegheny Technologies Inc.		841,474
	26,257	Freeport-McMoRan Copper & Gold Inc., Class B Shares		1,454,901
	62,542	Newmont Mining Corp.		3,310,348
	43,412	Nucor Corp.		2,355,101
	28,396	Phelps Dodge Corp.		2,333,015
	17,418	United States Steel Corp.		1,221,350

		Total Metals & Mining		15,428,125

Paper & Forest Products — 0.3%
	68,507	International Paper Co.		2,212,776
	14,691	Louisiana-Pacific Corp.		321,733
	25,029	MeadWestvaco Corp.		699,060
	34,305	Weyerhaeuser Co.		2,135,486

		Total Paper & Forest Products		5,369,055

		TOTAL MATERIALS		48,863,048

TELECOMMUNICATION SERVICES — 3.3%
Diversified Telecommunication Services — 2.6%
	541,800	AT&T Inc.		15,110,802
	252,006	BellSouth Corp.		9,122,617
	16,338	CenturyTel Inc.		606,957
	45,371	Citizens Communications Co.		592,091
	20,760	Embarq Corp.*		850,952
	218,557	Qwest Communications International Inc.*		1,768,126
	406,434	Verizon Communications Inc.		13,611,475

		Total Diversified Telecommunication Services		41,663,020

See Notes to Financial Statements.

36 Legg Mason Partners Variable Portfolios II 2006 Semi-Annual Report


	Schedules of Investments (June 30, 2006) (unaudited) (continued)


Shares		Security	Value

Wireless Telecommunication Services — 0.7%
	54,211	ALLTEL Corp.	$	3,460,288
	415,044	Sprint Nextel Corp.		8,296,730

		Total Wireless Telecommunication Services		11,757,018

		TOTAL TELECOMMUNICATION SERVICES		53,420,038

UTILITIES — 3.4%
Electric Utilities — 1.8%
	22,757	Allegheny Energy Inc.*		843,602
	54,881	American Electric Power Co. Inc.		1,879,674
	172,060	Duke Energy Corp.		5,053,402
	45,393	Edison International		1,770,327
	28,971	Entergy Corp.		2,049,698
	93,137	Exelon Corp.		5,292,976
	45,953	FirstEnergy Corp.		2,491,112
	56,322	FPL Group Inc.		2,330,604
	14,083	Pinnacle West Capital Corp.		562,053
	53,418	PPL Corp.		1,725,402
	35,244	Progress Energy Inc.		1,510,910
	103,384	Southern Co.		3,313,457

		Total Electric Utilities		28,823,217

Gas Utilities — 0.0%
	6,190	Nicor Inc.		256,885
	5,429	Peoples Energy Corp.		194,955

		Total Gas Utilities		451,840

Independent Power Producers & Energy Traders — 0.5%
	91,719	AES Corp.*		1,692,216
	24,932	Constellation Energy Group Inc.		1,359,293
	49,999	Dynegy Inc., Class A Shares*		273,494
	64,425	TXU Corp.		3,851,971

		Total Independent Power Producers & Energy Traders		7,176,974

Multi-Utilities — 1.1%
	28,609	Ameren Corp.		1,444,754
	43,397	CenterPoint Energy Inc.		542,463
	31,109	CMS Energy Corp.*		402,550
	34,242	Consolidated Edison Inc.		1,521,714
	48,359	Dominion Resources Inc.		3,616,770
	24,767	DTE Energy Co.		1,009,008
	24,376	KeySpan Corp.		984,790
	38,194	NiSource Inc.		834,157
	48,368	PG&E Corp.		1,899,895
	35,035	Public Service Enterprise Group Inc.		2,316,514
	36,197	Sempra Energy		1,646,240
	29,157	TECO Energy Inc.		435,606

See Notes to Financial Statements.

Legg Mason Partners Variable Portfolios II 2006 Semi-Annual Report 37


	Schedules of Investments (June 30, 2006) (unaudited) (continued)


Shares		Security	Value

Multi-Utilities — 1.1% (continued)
	57,009	Xcel Energy Inc.	$	1,093,433

		Total Multi-Utilities		17,747,894

		TOTAL UTILITIES		54,199,925

		TOTAL INVESTMENTS BEFORE SHORT-TERM INVESTMENTS (Cost — $1,483,649,844)		1,601,310,720


Face
Amount

SHORT-TERM INVESTMENTS — 1.0%
U.S. Government Obligation — 0.1%
$	1,475,000	U.S. Treasury Bills, 4.828% due 9/14/06 (b)(c) (Cost — $1,460,342)		1,457,215

Repurchase Agreement — 0.9%
	15,592,000	Interest in $331,346,000 joint tri-party repurchase agreement dated 6/30/06 with Greenwich Capital Markets Inc., 5.200% due 7/3/06; Proceeds at maturity — $15,598,757; (Fully collateralized by various U.S. government agency obligations, 0.000% to 6.331% due 9/1/24 to 5/1/38; Market value — $15,903,884) (a) (Cost — $15,592,000)		15,592,000

		TOTAL SHORT-TERM INVESTMENTS (Cost — $17,052,342)		17,049,215

		TOTAL INVESTMENTS — 100.2% (Cost — $1,500,702,186#)		1,618,359,935
		Liabilities in Excess of Other Assets — (0.2)%		(3,653,588	)

		TOTAL NET ASSETS — 100.0%	$	1,614,706,347


*		Non-income producing security.

^(a)		All or a portion of this security is segregated for open futures contracts.

^(b)		All or a portion of this security is held at the broker as collateral for open futures contracts.

^(c)		Rate shown represents yield to maturity.

#		Aggregate cost for federal income tax purposes is substantially the same.

See Notes to Financial Statements.

38 Legg Mason Partners Variable Portfolios II 2006 Semi-Annual Report


	Schedules of Investments (June 30, 2006) (unaudited) (continued)

LEGG MASON PARTNERS VARIABLE GROWTH AND INCOME PORTFOLIO


Shares		Security	Value

COMMON STOCKS — 98.6%
CONSUMER DISCRETIONARY — 10.7%
Hotels, Restaurants & Leisure — 2.5%
	4,580	McDonald’s Corp.	$	153,888
	1,540	Station Casinos Inc.		104,843

		Total Hotels, Restaurants & Leisure		258,731

Household Durables — 1.9%
	2,890	Newell Rubbermaid Inc.		74,649
	4,700	Toll Brothers Inc.*		120,179

		Total Household Durables		194,828

Media — 4.1%
	3,300	EchoStar Communications Corp., Class A Shares*		101,673
	8,800	News Corp., Class B Shares		177,584
	7,830	Time Warner Inc.		135,459

		Total Media		414,716

Specialty Retail — 2.2%
	2,790	Best Buy Co. Inc.		153,003
	3,090	Staples Inc.		75,149

		Total Specialty Retail		228,152

		TOTAL CONSUMER DISCRETIONARY		1,096,427

CONSUMER STAPLES — 10.2%
Beverages — 2.1%
	3,660	PepsiCo Inc.		219,747

Food & Staples Retailing — 2.8%
	5,850	Wal-Mart Stores Inc.		281,795

Food Products — 3.0%
	3,910	Kellogg Co.		189,361
	3,420	McCormick & Co. Inc., Non Voting Shares		114,741

		Total Food Products		304,102

Household Products — 1.5%
	2,750	Procter & Gamble Co.		152,900

Tobacco — 0.8%
	1,080	Altria Group Inc.		79,304

		TOTAL CONSUMER STAPLES		1,037,848

ENERGY — 9.0%
Energy Equipment & Services — 1.1%
	2,430	ENSCO International Inc.		111,829

See Notes to Financial Statements.

Legg Mason Partners Variable Portfolios II 2006 Semi-Annual Report 39


	Schedules of Investments (June 30, 2006) (unaudited) (continued)


Shares		Security	Value

Oil, Gas & Consumable Fuels — 7.9%
	1,710	ConocoPhillips	$	112,056
	4,420	Exxon Mobil Corp.		271,167
	1,850	Nexen Inc.		104,599
	1,260	Suncor Energy Inc.		102,073
	3,360	Total SA, Sponsored ADR		220,147

		Total Oil, Gas & Consumable Fuels		810,042

		TOTAL ENERGY		921,871

FINANCIALS — 22.7%
Capital Markets — 4.0%
	1,420	Goldman Sachs Group Inc.		213,610
	2,810	Merrill Lynch & Co. Inc.		195,464

		Total Capital Markets		409,074

Commercial Banks — 2.8%
	4,290	Wells Fargo & Co.		287,773

Consumer Finance — 3.2%
	3,400	American Express Co.		180,948
	1,710	Capital One Financial Corp.		146,120

		Total Consumer Finance		327,068

Diversified Financial Services — 4.5%
	4,586	Bank of America Corp.		220,587
	5,755	JPMorgan Chase & Co.		241,710

		Total Diversified Financial Services		462,297

Insurance — 3.6%
	2,910	AFLAC Inc.		134,878
	1	Berkshire Hathaway Inc., Class A Shares*		91,659
	2,780	Chubb Corp.		138,722

		Total Insurance		365,259

Thrifts & Mortgage Finance — 4.6%
	3,500	Freddie Mac		199,535
	2,280	Golden West Financial Corp.		169,176
	7,700	Hudson City Bancorp Inc.		102,641

		Total Thrifts & Mortgage Finance		471,352

		TOTAL FINANCIALS		2,322,823

HEALTH CARE — 8.5%
Biotechnology — 1.9%
	2,968	Amgen Inc.*		193,603

Health Care Providers & Services — 2.1%
	1,980	Coventry Health Care Inc.*		108,781
	2,450	UnitedHealth Group Inc.		109,711

		Total Health Care Providers & Services		218,492

See Notes to Financial Statements.

40 Legg Mason Partners Variable Portfolios II 2006 Semi-Annual Report


	Schedules of Investments (June 30, 2006) (unaudited) (continued)


Shares		Security	Value

Pharmaceuticals — 4.5%
	4,040	Sanofi-Aventis, ADR	$	196,748
	5,090	Teva Pharmaceutical Industries Ltd., Sponsored ADR		160,793
	2,220	Wyeth		98,590

		Total Pharmaceuticals		456,131

		TOTAL HEALTH CARE		868,226

INDUSTRIALS — 12.3%
Aerospace & Defense — 4.2%
	2,910	Boeing Co.		238,358
	3,500	Orbital Sciences Corp.*		56,490
	3,080	Raytheon Co.		137,276

		Total Aerospace & Defense		432,124

Building Products — 2.0%
	6,800	Masco Corp.		201,552

Industrial Conglomerates — 4.8%
	11,730	General Electric Co.		386,620
	1,160	Textron Inc.		106,929

		Total Industrial Conglomerates		493,549

Machinery — 1.3%
	1,650	Parker Hannifin Corp.		128,040

		TOTAL INDUSTRIALS		1,255,265

INFORMATION TECHNOLOGY — 13.9%
Communications Equipment — 4.2%
	8,300	Cisco Systems Inc.*		162,099
	2,120	Motorola Inc.		42,718
	5,700	QUALCOMM Inc.		228,399

		Total Communications Equipment		433,216

Electronic Equipment & Instruments — 0.8%
	3,700	Dolby Laboratories Inc., Class A Shares*		86,210

Internet Software & Services — 0.9%
	2,630	Yahoo! Inc.*		86,790

IT Services — 1.2%
	3,010	Paychex Inc.		117,330

Semiconductors & Semiconductor Equipment — 1.8%
	5,340	ASML Holding NV, NY Registered Shares*		107,975
	2,490	Texas Instruments Inc.		75,422

		Total Semiconductors & Semiconductor Equipment		183,397

See Notes to Financial Statements.

Legg Mason Partners Variable Portfolios II 2006 Semi-Annual Report 41


	Schedules of Investments (June 30, 2006) (unaudited) (continued)


Shares		Security	Value

Software — 5.0%
	2,990	Adobe Systems Inc.*	$	90,776
	1,850	Electronic Arts Inc.*		79,624
	14,630	Microsoft Corp.		340,879

		Total Software		511,279

		TOTAL INFORMATION TECHNOLOGY		1,418,222

MATERIALS — 6.0%
Chemicals — 2.8%
	3,730	E.I. du Pont de Nemours & Co.		155,168
	3,080	Ecolab Inc.		124,986

		Total Chemicals		280,154

Metals & Mining — 3.2%
	11,101	Barrick Gold Corp.		328,590

		TOTAL MATERIALS		608,744

TELECOMMUNICATION SERVICES — 3.2%
Wireless Telecommunication Services — 3.2%
	1,620	ALLTEL Corp.		103,405
	11,152	Sprint Nextel Corp.		222,928

		TOTAL TELECOMMUNICATION SERVICES		326,333

UTILITIES — 2.1%
Multi-Utilities — 2.1%
	4,810	Sempra Energy		218,759

		TOTAL INVESTMENTS BEFORE SHORT-TERM INVESTMENT (Cost — $8,363,921)		10,074,518


Face
Amount

SHORT-TERM INVESTMENT — 1.3%
Repurchase Agreement — 1.3%
$	136,000	Interest in $457,185,000 joint tri-party repurchase agreement dated 6/30/06 with Merrill Lynch, Pierce, Fenner & Smith Inc., 5.200% due 7/3/06; Proceeds at maturity — $136,059; (Fully collateralized by U.S. Treasury Note, 4.125% due 8/15/08; Market value — $138,720) (Cost — $136,000)		136,000

		TOTAL INVESTMENTS — 99.9% (Cost — $8,499,921#)		10,210,518
		Other Assets in Excess of Liabilities — 0.1%		5,114

		TOTAL NET ASSETS — 100.0%	$	10,215,632


*		Non-income producing security.

^#		Aggregate cost for federal income tax purposes is substantially the same.

		Abbreviation used in this schedule:


ADR		— American Depositary Receipt

See Notes to Financial Statements.

42 Legg Mason Partners Variable Portfolios II 2006 Semi-Annual Report


	Schedules of Investments (June 30, 2006) (unaudited) (continued)

LEGG MASON PARTNERS VARIABLE AGGRESSIVE GROWTH PORTFOLIO


Shares		Security	Value

COMMON STOCKS — 91.8%
CONSUMER DISCRETIONARY — 16.9%
Media — 16.7%
	71,320	Cablevision Systems Corp., New York Group, Class A Shares	$	1,529,814
	4,826	CBS Corp., Class B Shares		130,543
	4,117	Comcast Corp., Class A Shares*		134,791
	103,525	Comcast Corp., Special Class A Shares*		3,393,549
	11,540	Discovery Holding Co., Class A Shares*		168,830
	2,479	Liberty Global Inc., Series A Shares*		53,299
	2,514	Liberty Global Inc., Series C Shares*		51,713
	7,020	Liberty Media Holding Corp. — Capital Group, Series A Shares*		588,065
	35,100	Liberty Media Holding Corp. — Interactive Group, Series A Shares*		605,826
	34,750	Sirius Satellite Radio Inc.*		165,063
	180,200	Time Warner Inc.		3,117,460
	4,826	Viacom Inc., Class B Shares*		172,964
	43,000	Walt Disney Co.		1,290,000
	5,600	World Wrestling Entertainment Inc.		94,584

		Total Media		11,496,501

Specialty Retail — 0.2%
	9,700	Charming Shoppes Inc.*		109,028
	700	J Crew Group Inc.*		19,215

		Total Specialty Retail		128,243

		TOTAL CONSUMER DISCRETIONARY		11,624,744

ENERGY — 12.6%
Energy Equipment & Services — 8.1%
	7,600	Core Laboratories NV*		463,904
	31,650	Grant Prideco Inc.*		1,416,337
	74,500	Weatherford International Ltd.*		3,696,690

		Total Energy Equipment & Services		5,576,931

Oil, Gas & Consumable Fuels — 4.5%
	64,600	Anadarko Petroleum Corp.		3,080,774
	255	Bill Barrett Corp.*		7,551

		Total Oil, Gas & Consumable Fuels		3,088,325

		TOTAL ENERGY		8,665,256

EXCHANGE TRADED FUND — 1.8%
	31,600	Nasdaq-100 Index Tracking Stock		1,224,816

See Notes to Financial Statements.

Legg Mason Partners Variable Portfolios II 2006 Semi-Annual Report 43


	Schedules of Investments (June 30, 2006) (unaudited) (continued)


Shares		Security	Value

FINANCIALS — 10.1%
Capital Markets — 9.4%
	6,000	Cohen & Steers Inc.	$	141,600
	49,100	Lehman Brothers Holdings Inc.		3,198,865
	44,800	Merrill Lynch & Co. Inc.		3,116,288

		Total Capital Markets		6,456,753

Diversified Financial Services — 0.3%
	4,500	CIT Group Inc.		235,305

Thrifts & Mortgage Finance — 0.4%
	17,849	New York Community Bancorp Inc.		294,687

		TOTAL FINANCIALS		6,986,745

HEALTH CARE — 27.3%
Biotechnology — 16.4%
	6,420	Alkermes Inc.*		121,466
	44,900	Amgen Inc.*		2,928,827
	67,350	Biogen Idec Inc.*		3,120,326
	5,300	Genentech Inc.*		433,540
	47,948	Genzyme Corp.*		2,927,225
	28,428	ImClone Systems Inc.*		1,098,458
	8,200	Isis Pharmaceuticals Inc.*		49,610
	866	Micromet Inc.*		3,706
	33,546	Millennium Pharmaceuticals Inc.*		334,454
	4,800	Nabi Biopharmaceuticals*		27,552
	4,860	Nanogen Inc.*		9,234
	6,410	Vertex Pharmaceuticals Inc.*		235,311
	1,265	ViaCell Inc.*		5,756

		Total Biotechnology		11,295,465

Health Care Equipment & Supplies — 0.2%
	3,400	Biosite Inc.*		155,244

Health Care Providers & Services — 3.7%
	57,520	UnitedHealth Group Inc.		2,575,746

Pharmaceuticals — 7.0%
	5,600	BioMimetic Therapeutics Inc.*		37,128
	78,080	Forest Laboratories Inc.*		3,020,915
	13,100	Johnson & Johnson		784,952
	24,900	King Pharmaceuticals Inc.*		423,300
	3,500	Pfizer Inc.		82,145
	6,442	Teva Pharmaceutical Industries Ltd., Sponsored ADR		203,503
	14,000	Valeant Pharmaceuticals International		236,880

		Total Pharmaceuticals		4,788,823

		TOTAL HEALTH CARE		18,815,278

See Notes to Financial Statements.

44 Legg Mason Partners Variable Portfolios II 2006 Semi-Annual Report


	Schedules of Investments (June 30, 2006) (unaudited) (continued)


Shares		Security	Value

INDUSTRIALS — 8.7%
Aerospace & Defense — 3.3%
	30,100	L-3 Communications Holdings Inc.	$	2,270,142

Industrial Conglomerates — 4.1%
	103,634	Tyco International Ltd.		2,849,935

Machinery — 1.3%
	31,500	Pall Corp.		882,000

		TOTAL INDUSTRIALS		6,002,077

INFORMATION TECHNOLOGY — 14.3%
Communications Equipment — 2.7%
	14,700	C-COR Inc.*		113,484
	66,600	Motorola Inc.		1,341,990
	18,900	Nokia Oyj, Sponsored ADR		382,914

		Total Communications Equipment		1,838,388

Computers & Peripherals — 2.5%
	3,500	LaserCard Corp.*		45,815
	31,500	Quantum Corp.*		82,530
	23,100	SanDisk Corp.*		1,177,638
	17,819	Seagate Technology*		403,422

		Total Computers & Peripherals		1,709,405

Electronic Equipment & Instruments — 0.2%
	5,750	Excel Technology Inc.*		172,040

Semiconductors & Semiconductor Equipment — 7.7%
	42,750	Broadcom Corp., Class A Shares*		1,284,638
	6,500	Cirrus Logic Inc.*		52,910
	8,400	Cree Inc.*		199,584
	6,700	DSP Group Inc.*		166,495
	4,173	Freescale Semiconductor Inc., Class B Shares*		122,686
	26,725	Intel Corp.		506,439
	167,555	Micron Technology Inc.*		2,523,378
	17,700	RF Micro Devices Inc.*		105,669
	5,400	Standard Microsystems Corp.*		117,882
	17,600	Teradyne Inc.*		245,168

		Total Semiconductors & Semiconductor Equipment		5,324,849

Software — 1.2%
	5,800	Advent Software Inc.*		209,206
	11,300	Autodesk Inc.*		389,398
	3,800	Microsoft Corp.		88,540
	2	Move Inc.*		8
	4,300	RSA Security Inc.*		116,917

		Total Software		804,069

		TOTAL INFORMATION TECHNOLOGY		9,848,751

See Notes to Financial Statements.

Legg Mason Partners Variable Portfolios II 2006 Semi-Annual Report 45


	Schedules of Investments (June 30, 2006) (unaudited) (continued)


Shares		Security	Value

TELECOMMUNICATION SERVICES — 0.1%
Diversified Telecommunication Services — 0.1%
	2,416	AT&T Inc.	$	67,382

		TOTAL INVESTMENTS BEFORE SHORT-TERM INVESTMENT (Cost — $55,393,421)		63,235,049


Face
Amount

SHORT-TERM INVESTMENT — 6.4%
REPURCHASE AGREEMENT — 6.4%
$	4,412,000	Interest in $275,425,000 joint tri-party repurchase agreement dated 6/30/06 with Banc of America Securities LLC, 5.200% due 7/3/06; Proceeds at maturity — $4,413,912; (Fully collateralized by various U.S. government agency obligations & Treasury Note, 0.000% to 6.000% due 12/27/06 to 5/15/11; Market value — $4,500,251) (Cost — $4,412,000)		4,412,000

		TOTAL INVESTMENTS — 98.2% (Cost — $59,805,421#)		67,647,049
		Other Assets in Excess of Liabilities — 1.8%		1,248,467

		TOTAL NET ASSETS — 100.0%	$	68,895,516


*		Non-income producing security.

^#		Aggregate cost for federal income tax purposes is substantially the same.

		Abbreviation used in this schedule:


ADR		— American Depositary Receipt

See Notes to Financial Statements.

46 Legg Mason Partners Variable Portfolios II 2006 Semi-Annual Report

Bond Ratings (unaudited)

The definitions of the applicable rating symbols are set forth below:

Standard & Poor’s Ratings Service (“Standard & Poor’s”) — Ratings from “AA” to “CCC” may be modified by the addition of a plus (+) or minus (-) sign to show relative standings within the major rating categories.


AAA	—	Bonds rated “AAA” have the highest rating assigned by Standard & Poor’s. Capacity to pay interest and repay principal is extremely strong.
AA	—	Bonds rated “AA” have a very strong capacity to pay interest and repay principal and differ from the highest rated issues only in a small degree.
A	—	Bonds rated “A” have a strong capacity to pay interest and repay principal although they are somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than debt in higher rated categories.
BBB	—	Bonds rated “BBB” are regarded as having an adequate capacity to pay interest and repay principal. Whereas they normally exhibit adequate protection parameters, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity to pay interest and repay principal for bonds in this category than in higher rated categories.
BB, B, CCC, CC and C	—	Bonds rated “BB”, “B”, “CCC”, “CC” and “C” are regarded, on balance, as predominantly speculative with respect to capacity to pay interest and repay principal in accordance with the terms of the obligation. “BB” represents the lowest degree of speculation and “C” the highest degree of speculation. While such bonds will likely have some quality and protective characteristics, these are outweighed by large uncertainties or major risk exposures to adverse conditions.
D	—	Bonds rated “D” are in default and payment of interest and/or repayment of principal is in arrears.
Moody’s Investors Service (“Moody’s”) — Numerical modifiers 1, 2 and 3 may be applied to each generic rating from “Aa” to “Caa”, where 1 is the highest and 3 the lowest ranking within its generic category.
Aaa	—	Bonds rated “Aaa” are judged to be of the best quality. They carry the smallest degree of investment risk and are generally referred to as “gilt edge.” Interest payments are protected by a large or by an exceptionally stable margin and principal is secure. While the various protective elements are likely to change, such changes as can be visualized are most unlikely to impair the fundamentally strong position of such issues.
Aa	—	Bonds rated “Aa” are judged to be of high quality by all standards. Together with the “Aaa” group they comprise what are generally known as high grade bonds. They are rated lower than the best bonds because margins of protection may not be as large as in “Aaa” securities or fluctuation of protective elements may be of greater amplitude or there may be other elements present which make the long-term risks appear somewhat larger than in “Aaa” securities.
A	—	Bonds rated “A” possess many favorable investment attributes and are to be considered as upper medium grade obligations. Factors giving security to principal and interest are considered adequate but elements may be present which suggest a susceptibility to impairment some time in the future.
Baa	—	Bonds rated “Baa” are considered as medium grade obligations, i.e., they are neither highly protected nor poorly secured. Interest payments and principal security appear adequate for the present but certain protective elements may be lacking or may be characteristically unreliable over any great length of time. Such bonds lack outstanding investment characteristics and in fact have speculative characteristics as well.
Ba	—	Bonds rated “Ba” are judged to have speculative elements; their future cannot be considered as well assured. Often the protection of interest and principal payments may be very moderate and therefore not well safeguarded during both good and bad times over the future. Uncertainty of position characterizes bonds in this class.
B	—	Bonds rated “B” generally lack characteristics of desirable investments. Assurance of interest and principal payments or of maintenance of other terms of the contract over any long period of time may be small.
Caa	—	Bonds rated “Caa” are of poor standing. These may be in default, or present elements of danger may exist with respect to principal or interest.
Ca	—	Bonds rated “Ca” represent obligations which are speculative in a high degree. Such issues are often in default or have other marked short-comings.
C	—	Bonds rated “C” are the lowest class of bonds and issues so rated can be regarded as having extremely poor prospects of ever attaining any real investment standing.
NR	—	Indicates that the bond is not rated by Standard & Poor’s or Moody’s.

Legg Mason Partners Variable Portfolios II 2006 Semi-Annual Report 47


	Statements of Assets and Liabilities (June 30, 2006) (unaudited)


		Legg Mason
		Partners						Legg Mason			Legg Mason
		Variable			Legg Mason			Partners			Partners
		Diversified			Partners			Variable			Variable
		Strategic			Variable			Growth and			Aggressive
		Income			Equity Index			Income			Growth
		Portfolio			Portfolio			Portfolio			Portfolio

ASSETS:
	Investments, at cost	$	102,956,228		$	1,485,110,186		$	8,363,921		$	55,393,421
	Repurchase agreements, at cost		11,194,000			15,592,000			136,000			4,412,000

	Investments, at value	$	100,749,780		$	1,602,767,935		$	10,074,518		$	63,235,049
	Repurchase agreements, at value		11,194,000			15,592,000			136,000			4,412,000
	Cash		983			604			99			677
	Receivable for securities sold		2,364,337			195,123			23,220			21
	Dividends and interest receivable		752,663			1,826,493			12,081			18,099
	Receivable from broker — variation margin on open futures contracts		22,750			—			—			—
	Deposits with brokers for open futures contracts		14,620			—			—			—
	Receivable for Fund shares sold		—			98,880			—			1,334,360
	Prepaid expenses		14,966			7,670			40			—

	Total Assets		115,114,099			1,620,488,705			10,245,958			69,000,206

LIABILITIES:
	Payable for securities purchased		35,309,088			108,174			—			14,000
	Payable for Fund shares repurchased		156,261			4,845,510			8,301			24,681
	Investment management fee payable		42,948			330,799			5,467			40,504
	Deferred dollar roll income		11,226			—			—			—
	Options written, at value (premium received $7,668)		7,590			—			—			—
	Deferred compensation payable		2,081			3,241			1,638			1,436
	Trustees’ fees payable		609			3,843			610			45
	Payable to broker — variation margin on open futures contracts		—			45,743			—			—
	Distribution fees payable		—			22,936			—			3,237
	Administration fee payable		—			79,392			—			—
	Accrued expenses		30,370			342,720			14,310			20,787

	Total Liabilities		35,560,173			5,782,358			30,326			104,690

	Total Net Assets	$	79,553,926		$	1,614,706,347		$	10,215,632		$	68,895,516

NET ASSETS:
	Par value (Note 6)	$	8,880		$	51,837		$	1,996		$	2,931
	Paid-in capital in excess of par value		87,538,690			1,484,604,182			8,679,958			61,446,636
	Undistributed net investment income		2,211,074			13,125,856			20,060			—
	Accumulated net investment loss		—			—			—			(77,663	)
	Accumulated net realized loss on investments, futures contracts, options written and foreign currency transactions		(7,953,879	)		(1,095,484	)		(196,979	)		(318,016	)
	Net unrealized appreciation (depreciation) on investments, futures contracts, options written and foreign currencies		(2,250,839	)		118,019,956			1,710,597			7,841,628

	Total Net Assets	$	79,553,926		$	1,614,706,347		$	10,215,632		$	68,895,516

Shares Outstanding:
	Class I shares		8,880,016			44,586,113			1,996,415			1,430,190

	Class II shares		—			7,251,310			—			1,500,958

Net Asset Value:
	Class I shares	$	8.96		$	31.15		$	5.12		$	23.65

	Class II shares		—		$	31.14			—		$	23.37

See Notes to Financial Statements.

48 Legg Mason Partners Variable Portfolios II 2006 Semi-Annual Report


	Statements of Operations (For the six months ended June 30, 2006) (unaudited)


			Legg Mason						Legg
			Partners						Mason			Legg Mason
			Variable			Legg Mason			Partners			Partners
			Diversified			Partners			Variable			Variable
			Strategic			Variable			Growth and			Aggressive
			Income			Equity Index			Income			Growth
			Portfolio			Portfolio			Portfolio			Portfolio

INVESTMENT INCOME:
	Dividends		$	1,756		$	15,734,910		$	81,072		$	152,071
	Interest			2,513,341			445,737			3,700			87,848
	Less: Foreign taxes withheld			—			—			(1,437	)		(1,443	)

	Total Investment Income			2,515,097			16,180,647			83,335			238,476

EXPENSES:
	Investment management fee (Note 2)			273,348			2,092,506			34,925			246,948
	Audit and tax			9,528			12,674			7,001			7,602
	Custody fees			7,578			19,987			2,347			1,354
	Legal fees			7,421			6,266			8,106			8,901
	Shareholder reports (Note 4)			3,183			39,200			7,166			9,510
	Trustees’ fees (Note 2)			1,422			16,526			914			735
	Insurance			1,129			15,863			119			543
	Transfer agent fees (Note 4)			31			100			35			78
	Distribution fees (Note 4)			—			290,546			—			38,891
	Administration fees			—			502,201			—			—
	Miscellaneous expenses			1,135			96,103			616			954

	Total Expenses			304,775			3,091,972			61,229			315,516
	Less: Fee waivers and/or expense reimbursements (Notes 2 and 8)			(3,525	)		(40,279	)		(246	)		(1,358	)

	Net Expenses			301,250			3,051,693			60,983			314,158

Net Investment Income (Loss)				2,213,847			13,128,954			22,352			(75,682	)

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, FUTURES CONTRACTS, OPTIONS WRITTEN AND FOREIGN CURRENCY TRANSACTIONS (NOTES 1 AND 3):
	Net Realized Gain (Loss) From:
		Investment transactions		(718,917	)		15,171,257			513,543			263,343
		Futures contracts		(81,759	)		(1,133,136	)		—			—
		Options written		10,063			—			—			—
		Foreign currency transactions		(3,791	)		—			(6	)		—

	Net Realized Gain (Loss)			(794,404	)		14,038,121			513,537			263,343

	Change in Net Unrealized Appreciation/ Depreciation From:
		Investments		(1,868,607	)		16,093,991			(441,541	)		474,839
		Futures contracts		(62,319	)		362,207			—			—
		Options written		78			—			—			—
		Foreign currencies		4,693			—			—			—

	Change in Net Unrealized Appreciation/ Depreciation			(1,926,155	)		16,456,198			(441,541	)		474,839

	Increase From Payment by Affiliate (Note 2)			—			—			7,657			—

Net Gain (Loss) on Investments, Futures Contracts, Options Written and Foreign Currency Transactions				(2,720,559	)		30,494,319			79,653			738,182

Increase (Decrease) in Net Assets From Operations			$	(506,712	)	$	43,623,273		$	102,005		$	662,500

See Notes to Financial Statements.

Legg Mason Partners Variable Portfolios II 2006 Semi-Annual Report 49


	Statements of Changes in Net Assets

	For the six months ended June 30, 2006 (unaudited)
	and the year ended December 31, 2005


Legg Mason Partners Variable
Diversified Strategic Income Portfolio		2006			2005

OPERATIONS:
	Net investment income	$	2,213,847		$	4,630,520
	Net realized gain (loss)		(794,404	)		1,922,397
	Change in net unrealized appreciation/depreciation		(1,926,155	)		(4,089,216	)

	Increase (Decrease) in Net Assets From Operations		(506,712	)		2,463,701

DISTRIBUTIONS TO SHAREHOLDERS FROM (NOTES 1 AND 5):
	Net investment income		—			(5,001,106	)

	Decrease in Net Assets From Distributions to Shareholders		—			(5,001,106	)

FUND SHARE TRANSACTIONS (NOTE 6):
	Net proceeds from sale of shares		281,879			5,234,458
	Reinvestment of distributions		—			5,001,106
	Cost of shares repurchased		(9,742,754	)		(18,480,976	)

	Decrease in Net Assets From Fund Share Transactions		(9,460,875	)		(8,245,412	)

Decrease in Net Assets			(9,967,587	)		(10,782,817	)
NET ASSETS:
	Beginning of period		89,521,513			100,304,330

	End of period*	$	79,553,926		$	89,521,513

* Includes undistributed (overdistributed) net investment income of:		$	2,211,074		$	(2,773	)

See Notes to Financial Statements.

50 Legg Mason Partners Variable Portfolios II 2006 Semi-Annual Report


	Statements of Changes in Net Assets (continued)

	For the six months ended June 30, 2006 (unaudited)
	and the year ended December 31, 2005


Legg Mason Partners Variable Equity Index Portfolio		2006			2005

OPERATIONS:
	Net investment income	$	13,128,954		$	24,366,477
	Net realized gain		14,038,121			17,202,892
	Change in net unrealized appreciation/depreciation		16,456,198			31,886,377

	Increase in Net Assets From Operations		43,623,273			73,455,746

DISTRIBUTIONS TO SHAREHOLDERS FROM (NOTES 1 AND 5):
	Net investment income		(117,713	)		(24,301,557	)

	Decrease in Net Assets From Distributions to Shareholders		(117,713	)		(24,301,557	)

FUND SHARE TRANSACTIONS (NOTE 6):
	Net proceeds from sale of shares		45,842,330			79,504,116
	Reinvestment of distributions		117,713			24,301,557
	Cost of shares repurchased		(153,076,801	)		(126,400,333	)

	Decrease in Net Assets From Fund Share Transactions		(107,116,758	)		(22,594,660	)

Increase (Decrease) in Net Assets			(63,611,198	)		26,559,529
NET ASSETS:
	Beginning of period		1,678,317,545			1,651,758,016

	End of period*	$	1,614,706,347		$	1,678,317,545

* Includes undistributed net investment income of:		$	13,125,856		$	114,615

See Notes to Financial Statements.

Legg Mason Partners Variable Portfolios II 2006 Semi-Annual Report 51


	Statements of Changes in Net Assets (continued)

	For the six months ended June 30, 2006 (unaudited) and the year ended December 31, 2005


Legg Mason Partners Variable Growth and Income Portfolio		2006			2005

OPERATIONS:
	Net investment income	$	22,352		$	38,849
	Net realized gain		513,537			371,237
	Change in net unrealized appreciation/depreciation		(441,541	)		(22,620	)
	Increase from payment by affiliate		7,657			—

	Increase in Net Assets From Operations		102,005			387,466

DISTRIBUTIONS TO SHAREHOLDERS FROM (NOTES 1 AND 5):
	Net investment income		—			(40,002	)

	Decrease in Net Assets From Distributions to Shareholders		—			(40,002	)

FUND SHARE TRANSACTIONS (NOTE 6):
	Net proceeds from sale of shares		466,436			966,534
	Reinvestment of distributions		—			40,002
	Cost of shares repurchased		(1,448,990	)		(2,016,392	)

	Decrease in Net Assets From Fund Share Transactions		(982,554	)		(1,009,856	)

Decrease in Net Assets			(880,549	)		(662,392	)
NET ASSETS:
	Beginning of period		11,096,181			11,758,573

	End of period*	$	10,215,632		$	11,096,181

* Includes undistributed (overdistributed) net investment income of:		$	20,060		$	(2,292	)

See Notes to Financial Statements.

52 Legg Mason Partners Variable Portfolios II 2006 Semi-Annual Report


	Statements of Changes in Net Assets (continued)

	For the six months ended June 30, 2006 (unaudited)
	and the year ended December 31, 2005


Legg Mason Partners Variable Aggressive Growth Portfolio		2006			2005

OPERATIONS:
	Net investment loss	$	(75,682	)	$	(190,759	)
	Net realized gain		263,343			18,120
	Change in net unrealized appreciation/depreciation		474,839			5,564,067

	Increase in Net Assets From Operations		662,500			5,391,428

FUND SHARE TRANSACTIONS (NOTE 6):
	Net proceeds from sale of shares		11,082,018			17,389,739
	Cost of shares repurchased		(4,153,270	)		(3,934,857	)

	Increase in Net Assets From Fund Share Transactions		6,928,748			13,454,882

Increase in Net Assets			7,591,248			18,846,310
NET ASSETS:
	Beginning of period		61,304,268			42,457,958

	End of period*	$	68,895,516		$	61,304,268

* Includes accumulated net investment loss of:		$	(77,663	)	$	(1,981	)

See Notes to Financial Statements.

Legg Mason Partners Variable Portfolios II 2006 Semi-Annual Report 53


	Financial Highlights

For a share of each class of beneficial interest outstanding throughout each year ended
December 31, unless otherwise noted:


Legg Mason
Partners Variable		Class I Shares(1)
Diversified Strategic
Income Portfolio		2006(2)			2005			2004			2003			2002			2001

Net Asset Value, Beginning of Period			$9.01			$9.30			$9.15			$8.69			$9.13			$9.70

Income (Loss) From Operations:
	Net investment income		0.24			0.46			0.48			0.52			0.53			0.65
	Net realized and unrealized gain (loss)		(0.29	)		(0.22	)		0.14			0.50			(0.11	)		(0.36	)

Total Income (Loss) From Operations			(0.05	)		0.24			0.62			1.02			0.42			0.29

Less Distributions From:
	Net investment income		—			(0.53	)		(0.47	)		(0.56	)		(0.86	)		(0.86	)

Total Distributions			—			(0.53	)		(0.47	)		(0.56	)		(0.86	)		(0.86	)

Net Asset Value, End of Period			$8.96			$9.01			$9.30			$9.15			$8.69			$9.13

Total Return(3)			(0.55	)%		2.56	%		6.74	%		11.73	%		4.84	%		3.17	%

Net Assets, End of Period (000s)			$79,554			$89,522			$100,304			$94,572			$78,009			$79,399

Ratios to Average Net Assets:
	Gross expenses		0.72	%(4)		0.77	%		0.76	%		0.76	%		0.87	%		0.76	%
	Net expenses		0.72	(4)(5)		0.77			0.76	(5)		0.76			0.87			0.76
	Net investment income		5.26	(4)		4.86			5.15			5.73			5.82			6.86

Portfolio Turnover Rate			113	%(6)		83	%(6)		57	%(6)		54	%(6)		149	%		118	%


⁽¹⁾		Per share amounts have been calculated using the average shares method.

⁽²⁾		For the six months ended June 30, 2006 (unaudited).

⁽³⁾		Performance figures may reflect fee waivers and/or expense reimbursements. Past performance is no guarantee of future results. In the absence of fee waivers and/or expense reimbursements, the total return would be lower. Total returns do not reflect expenses associated with the separate accounts such as administrative fees, account charges and surrender charges which, if reflected, would reduce the total return for all periods shown. Total returns for periods of less than one year are not annualized.

⁽⁴⁾		Annualized.

⁽⁵⁾		Reflects fee waivers and/or expense reimbursements.

⁽⁶⁾		Excluding mortgage dollar roll transactions. If mortgage dollar roll transactions had been included, the portfolio turnover rate would have been 358%, 538%, 382% and 256%, respectively.

See Notes to Financial Statements.

54 Legg Mason Partners Variable Portfolios II 2006 Semi-Annual Report


	Financial Highlights (continued)

For a share of each class of beneficial interest outstanding throughout each year ended
December 31, unless otherwise noted:


Legg Mason		Class I Shares(1)
Partners Variable
Equity Index Portfolio		2006(2)			2005			2004			2003			2002			2001

Net Asset Value, Beginning of Period			$30.38			$29.50			$27.11			$21.41			$28.21			$32.40

Income (Loss) From Operations:
	Net investment income		0.25			0.45			0.47			0.34			0.32			0.34
	Net realized and unrealized gain (loss)		0.52			0.89			2.38			5.68			(6.57	)		(4.26	)

Total Income (Loss) From Operations			0.77			1.34			2.85			6.02			(6.25	)		(3.92	)

Less Distributions From:
	Net investment income		(0.00	)(3)		(0.46	)		(0.46	)		(0.32	)		(0.55	)		(0.27	)

Total Distributions			(0.00	)(3)		(0.46	)		(0.46	)		(0.32	)		(0.55	)		(0.27	)

Net Asset Value, End of Period			$31.15			$30.38			$29.50			$27.11			$21.41			$28.21

Total Return(4)			2.54	%		4.52	%		10.52	%		28.11	%		(22.17	)%		(12.12	)%

Net Assets, End of Period (millions)			$1,389			$1,444			$1,425			$1,218			$831			$897

Ratios to Average Net Assets:
	Gross expenses		0.33	%(5)		0.34	%		0.34	%		0.34	%		0.31	%		0.23	%
	Net expenses		0.33	(5)(6)		0.34			0.34	(6)		0.34			0.31			0.23
	Net investment income		1.60	(5)		1.51			1.69			1.44			1.32			1.17

Portfolio Turnover Rate			4	%		7	%		1	%		0	%		2	%		2	%


⁽¹⁾		Per share amounts have been calculated using the average shares method.

⁽²⁾		For the six months ended June 30, 2006 (unaudited).

⁽³⁾		Amount represents less than $0.01 per share.

⁽⁴⁾		Performance figures may reflect fee waivers and/or expense reimbursements. Past performance is no guarantee of future results. In the absence of fee waivers and/or expense reimbursements, the total return would be lower. Total returns do not reflect expenses associated with the separate accounts such as administrative fees, account charges and surrender charges which, if reflected, would reduce the total return for all periods shown. Total returns for periods of less than one year are not annualized.

⁽⁵⁾		Annualized.

⁽⁶⁾		Reflects fee waivers and/or expense reimbursements.

See Notes to Financial Statements.

Legg Mason Partners Variable Portfolios II 2006 Semi-Annual Report 55


	Financial Highlights (continued)

For a share of each class of beneficial interest outstanding throughout each year ended
December 31, unless otherwise noted:


Legg Mason		Class II Shares(1)
Partners Variable
Equity Index Portfolio		2006(2)			2005			2004			2003			2002			2001

Net Asset Value, Beginning of Period			$30.40			$29.52			$27.13			$21.43			$28.17			$32.36

Income (Loss) From Operations:
	Net investment income		0.21			0.37			0.42			0.28			0.24			0.27
	Net realized and unrealized gain (loss)		0.53			0.89			2.36			5.66			(6.54	)		(4.26	)

Total Income (Loss) From Operations			0.74			1.26			2.78			5.94			(6.30	)		(3.99	)

Less Distributions From:
	Net investment income		(0.00	)(3)		(0.38	)		(0.39	)		(0.24	)		(0.44	)		(0.20	)

Total Distributions			(0.00	)(3)		(0.38	)		(0.39	)		(0.24	)		(0.44	)		(0.20	)

Net Asset Value, End of Period			$31.14			$30.40			$29.52			$27.13			$21.43			$28.17

Total Return(4)			2.44	%		4.25	%		10.24	%		27.74	%		(22.37	)%		(12.36	)%

Net Assets, End of Period (millions)			$226			$234			$227			$132			$86			$97

Ratios to Average Net Assets:
	Gross expenses		0.59	%(5)		0.60	%		0.59	%		0.60	%		0.56	%		0.49	%
	Net expenses		0.58	(5)(6)		0.60			0.59	(6)		0.60			0.56			0.49
	Net investment income		1.35	(5)		1.26			1.50			1.18			0.97			0.91

Portfolio Turnover Rate			4	%		7	%		1	%		0	%		2	%		2	%


⁽¹⁾		Per share amounts have been calculated using the average shares method.

⁽²⁾		For the six months ended June 30, 2006 (unaudited).

⁽³⁾		Amount represents less than $0.01 per share.

⁽⁴⁾		Performance figures may reflect fee waivers and/or expense reimbursements. Past performance is no guarantee of future results. In the absence of fee waivers and/or expense reimbursements, the total return would be lower. Total returns do not reflect expenses associated with the separate accounts such as administrative fees, account charges and surrender charges which, if reflected, would reduce the total return for all periods shown. Total returns for periods of less than one year are not annualized.

⁽⁵⁾		Annualized.

⁽⁶⁾		Reflects fee waivers and/or expense reimbursements.

See Notes to Financial Statements.

56 Legg Mason Partners Variable Portfolios II 2006 Semi-Annual Report


	Financial Highlights (continued)

For a share of each class of beneficial interest outstanding throughout each year ended
December 31, unless otherwise noted:


Legg Mason
		Class I Shares
Partners Variable
Growth and Income Portfolio		2006(1)(2)			2005(1)			2004(1)			2003(1)			2002			2001

Net Asset Value, Beginning of Period			$5.07			$4.91			$4.57			$3.52			$4.90			$7.92

Income (Loss) From Operations:
	Net investment income		0.01			0.02			0.04			0.01			0.00	(3)		0.03
	Net realized and unrealized gain (loss)		0.04			0.16			0.34			1.05			(1.14	)		(1.04	)

Total Income (Loss) From Operations			0.05			0.18			0.38			1.06			(1.14	)		(1.01	)

Less Distributions From:
	Net investment income		—			(0.02	)		(0.04	)		(0.01	)		(0.02	)		(0.12	)
	Net realized gains		—			—			—			—			(0.22	)		(1.89	)

Total Distributions			—			(0.02	)		(0.04	)		(0.01	)		(0.24	)		(2.01	)

Net Asset Value, End of Period			$5.12			$5.07			$4.91			$4.57			$3.52			$4.90

Total Return(4)			0.99	%		3.63	%		8.38	%		30.16	%		(23.35	)%		(13.14	)%

Net Assets, End of Period (000s)			$10,216			$11,096			$11,759			$9,870			$6,777			$11,087

Ratios to Average Net Assets:
	Gross expenses		1.14	%(5)		1.17	%		1.09	%		1.27	%		1.36	%		0.94	%
	Net expenses		1.13	(5)(6)		1.17			1.07	(6)		1.27			1.36			0.94
	Net investment income		0.42	(5)		0.35			0.95			0.36			0.04			0.31

Portfolio Turnover Rate			21	%		54	%		83	%		63	%		46	%		81	%


⁽¹⁾		Per share amounts have been calculated using the average shares method.

⁽²⁾		For the six months ended June 30, 2006 (unaudited).

⁽³⁾		Amount represents less than $0.01 per share.

⁽⁴⁾		Performance figures may reflect fee waivers and/or expense reimbursements. Past performance is no guarantee of future results. In the absence of fee waivers and/or expense reimbursements, the total return would be lower. Total returns do not reflect expenses associated with the separate accounts such as administrative fees, account charges and surrender charges which, if reflected, would reduce the total return for all periods shown. Total returns for periods of less than one year are not annualized.

⁽⁵⁾		Annualized.

⁽⁶⁾		Reflects fee waivers and/or expense reimbursements.

See Notes to Financial Statements.

Legg Mason Partners Variable Portfolios II 2006 Semi-Annual Report 57


	Financial Highlights (continued)

For a share of each class of beneficial interest outstanding throughout each year ended
December 31, unless otherwise noted:


Legg Mason
Partners Variable		Class I Shares(1)
Aggressive Growth
Portfolio		2006(2)			2005			2004			2003			2002			2001(3)

Net Asset Value, Beginning of Period			$23.33			$21.23			$19.46			$13.89			$25.98			$178.99

Income (Loss) From Operations:
	Net investment loss		(0.01	)		(0.06	)		(0.09	)		(0.19	)		(0.25	)		(0.50	)
	Net realized and unrealized gain (loss)		0.33			2.16			1.86			5.76			(8.18	)		(9.85	)

Total Income (Loss) From Operations			0.32			2.10			1.77			5.57			(8.43	)		(10.35	)

Less Distributions From:
	Net realized gains		—			—			—			—			(3.66	)		(142.66	)

Total Distributions			—			—			—			—			(3.66	)		(142.66	)

Net Asset Value, End of Period			$23.65			$23.33			$21.23			$19.46			$13.89			$25.98

Total Return(4)			1.37	%		9.89	%		9.10	%		40.10	%		(32.65	)%		(5.32	)%

Net Assets, End of Period (000s)			$33,824			$33,220			$21,706			$11,684			$5,975			$12,745

Ratios to Average Net Assets:
	Gross expenses		0.84	%(5)		0.93	%		1.04	%		1.56	%		1.56	%		1.18	%
	Net expenses		0.83	(5)(6)		0.93			1.04	(6)		1.56			1.56			1.18
	Net investment loss		(0.11	)(5)		(0.26	)		(0.47	)		(1.16	)		(1.25	)		(0.97	)

Portfolio Turnover Rate			4	%		0	%		4	%		3	%		4	%		0	%


⁽¹⁾		Per share amounts have been calculated using the average shares method.

⁽²⁾		For the six months ended June 30, 2006 (unaudited).

⁽³⁾		Per share amounts have been restated to reflect a 1 for 7 reverse stock split which was effective on September 7, 2001.

⁽⁴⁾		Performance figures may reflect fee waivers and/or expense reimbursements. Past performance is no guarantee of future results. In the absence of fee waivers and/or expense reimbursements, the total return would be lower. Total returns do not reflect expenses associated with the separate accounts such as administrative fees, account charges and surrender charges which, if reflected, would reduce the total return for all periods shown. Total returns for periods of less than one year are not annualized.

⁽⁵⁾		Annualized.

⁽⁶⁾		Reflects fee waivers and/or expense reimbursements.

See Notes to Financial Statements.

58 Legg Mason Partners Variable Portfolios II 2006 Semi-Annual Report


	Financial Highlights (continued)

For a share of each class of beneficial interest outstanding throughout each year ended
December 31, unless otherwise noted:


Legg Mason
Partners Variable		Class II Shares(1)
Aggressive Growth
Portfolio		2006(2)			2005			2004			2003(3)

Net Asset Value, Beginning of Period			$23.08			$21.05			$19.35			$15.64

Income (Loss) From Operations:
	Net investment loss		(0.04	)		(0.11	)		(0.14	)		(0.13	)
	Net realized and unrealized gain		0.33			2.14			1.84			3.84

Total Income From Operations			0.29			2.03			1.70			3.71

Net Asset Value, End of Period			$23.37			$23.08			$21.05			$19.35

Total Return(4)			1.26	%		9.64	%		8.79	%		23.72	%

Net Assets, End of Period (000s)			$35,072			$28,084			$20,752			$5,419

Ratios to Average Net Assets:
	Gross expenses		1.09	%(5)		1.18	%		1.28	%		1.64	%(5)
	Net expenses		1.09	(5)(6)		1.18			1.28	(6)		1.64	(5)
	Net investment loss		(0.36	)(5)		(0.51	)		(0.70	)		(1.25	)(5)

Portfolio Turnover Rate			4	%		0	%		4	%		3	%


⁽¹⁾		Per share amounts have been calculated using the average shares method.

⁽²⁾		For the six months ended June 30, 2006 (unaudited).

⁽³⁾		For the period May 12, 2003 (inception date) to December 31, 2003.

⁽⁴⁾		Performance figures may reflect fee waivers and/or expense reimbursements. Past performance is no guarantee of future results. In the absence of fee waivers and/or expense reimbursements, the total return would be lower. Total returns do not reflect expenses associated with the separate accounts such as administrative fees, account charges and surrender charges which, if reflected, would reduce the total return for all periods shown. Total returns for periods of less than one year are not annualized.

⁽⁵⁾		Annualized.

⁽⁶⁾		Reflects fee waivers and/or expense reimbursements.

See Notes to Financial Statements.

Legg Mason Partners Variable Portfolios II 2006 Semi-Annual Report 59

Notes to Financial Statements (unaudited)


1.	Organization and Significant Accounting Policies

Legg Mason Partners Variable Diversified Strategic Income Portfolio (“Diversified Strategic Income Portfolio”), Legg Mason Partners Variable Equity Index Portfolio (“Equity Index Portfolio”), Legg Mason Partners Variable Growth and Income Portfolio (“Growth and Income Portfolio”) and Legg Mason Partners Variable Aggressive Growth Portfolio (“Aggressive Growth Portfolio”) (formerly known as Diversified Strategic Income Portfolio, Equity Index Portfolio, Salomon Brothers Variable Growth & Income Fund and Salomon Brothers Variable Aggressive Growth Fund, respectively) (the “Funds”) are separate diversified investment funds of Legg Mason Partners Variable Portfolios II (formerly known as Greenwich Street Series Fund) (the “Trust”). The Trust, a Massachusetts business trust, is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company.

The following are significant accounting policies consistently followed by the Funds and are in conformity with U.S. generally accepted accounting principles (“GAAP”). 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.

(a) Investment Valuation. Equity securities for which market quotations are available are valued at the last sale price or official closing price on the primary market or exchange on which they trade. Debt securities are valued at the mean between the bid and asked prices provided by an independent pricing service that are based on transactions in debt obligations, quotations from bond dealers, market transactions in comparable securities and various other relationships between securities. When prices are not readily available, or are determined not to reflect fair value, such as when the value of a security has been significantly affected by events after the close of the exchange or market on which the security is principally traded, but before the Funds calculate their net asset value, the Funds may value these investments at fair value as determined in accordance with the procedures approved by the Funds’ Board of Trustees. Short-term obligations with maturities of 60 days or less are valued at amortized cost, which approximates market value.

(b) Repurchase Agreements. When entering into repurchase agreements, it is the Funds’ policy that their custodian or a third party custodian take possession of the underlying collateral securities, the market value of which at least equals the principal amount of the repurchase transaction, including accrued interest. To the extent that any repurchase transaction exceeds one business day, the value of the collateral is marked-to-market to ensure the adequacy of the collateral. If the seller defaults and the market value of the collateral declines or if bankruptcy proceedings are commenced with respect to the seller of the security, realization of the collateral by the Funds may be delayed or limited.

(c) Financial Futures Contracts. Certain Funds may enter into financial futures contracts typically to hedge a portion of the portfolios. Upon entering into a financial futures contract, the Funds are required to deposit cash or securities as initial margin. Additional securities are also segregated up to the current market value of the financial futures contracts. Subsequent payments, known as variation margin, are made or received

60 Legg Mason Partners Variable Portfolios II 2006 Semi-Annual Report

Notes to Financial Statements (unaudited) (continued)

by the Funds each day, depending on the daily fluctuation in the value of the underlying financial instruments. The Funds recognize an unrealized gain or loss equal to the daily variation margin. When the financial futures contracts are closed, a realized gain or loss is recognized equal to the difference between the proceeds from (or cost of) the closing transactions and the Funds’ basis in the contracts.

The risks associated with entering into financial futures contracts include the possibility that a change in the value of the contract may not correlate with the changes in the value of the underlying instruments. In addition, investing in financial futures contracts involves the risk that the Funds could lose more than the original margin deposit and subsequent payments required for a futures transaction. Risks may also arise upon entering into these contracts from the potential inability of the counterparties to meet the terms of their contracts.

(d) Written Options. When a Fund writes an 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 to reflect the current market value of the option written. If the option expires, the Fund realizes a gain from investments equal to the amount of the premium received. When a written call option is exercised, the difference between the premium and the amount for effecting a closing purchase transaction, including brokerage commission, is also treated as a realized gain or loss. When a written put option is exercised, the amount of the premium received reduces the cost of the security purchased by the Fund.

A risk in writing a covered call option is that the Fund may forego the opportunity of profit if the market price of the underlying security increases and the option is exercised. The risk in writing a put option is that the Fund may incur a loss if the market price of the underlying security decreases and the option is exercised. 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. In addition, there is the risk that the Fund may not be able to enter into a closing transaction because of an illiquid secondary market.

(e) Forward Foreign Currency Contracts. The Funds may enter into forward foreign currency contracts to hedge against foreign currency exchange rate risk on their non-U.S. dollar denominated securities or to facilitate settlement of foreign currency denominated portfolio transactions. A forward foreign currency contract is an agreement between two parties to buy and sell a currency at a set price on a future date. The contract is marked-to-market daily and the change in value is recorded by the Funds as an unrealized gain or loss. When a forward foreign currency contract is extinguished, through either delivery or offset by entering into another forward foreign currency 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.

Forward foreign currency contracts involve elements of market risk in excess of the amounts reflected in the Statements of Assets and Liabilities. The Funds bear the risk of an unfavorable change in the foreign exchange rate underlying the forward foreign currency contract. Risks may also arise upon entering into these contracts from the potential inability of the counterparties to meet the terms of their contracts.

Legg Mason Partners Variable Portfolios II 2006 Semi-Annual Report 61

Notes to Financial Statements (unaudited) (continued)

(f) Securities Traded on a To-Be-Announced Basis. Certain Funds may trade securities on a to-be-announced (“TBA”) basis. In a TBA transaction, the Funds commit to purchasing or selling securities which have not yet been issued by the issuer and for which specific information is not known, such as the face amount and maturity date and the underlying pool of investments in U.S. government agency mortgage pass-through transactions. Securities purchased on a TBA basis are not settled until they are delivered to the Funds, normally 15 to 45 days later. Beginning on the date the Funds enter into a TBA transaction, cash, U.S. government securities or other liquid high-grade debt obligations are segregated in an amount equal in value to the purchase price of the TBA security. These transactions are subject to market fluctuations and their current value is determined in the same manner as for other securities.

(g) Mortgage Dollar Rolls. The Diversified Strategic Income Portfolio enters into dollar rolls in which the Fund sells mortgage-backed securities for delivery in the current month and simultaneously contracts to repurchase substantially similar (same type, coupon and maturity) securities to settle on a specified future date. During the roll period, the Fund forgoes principal and interest paid on the securities. The Fund is compensated by a fee paid by the counterparty, often in the form of a drop in the repurchase price of the securities. Dollar rolls are accounted for as financing arrangements; the fee is accrued into interest income ratably over the term of the dollar roll and any gain or loss on the roll is deferred and realized upon disposition of the rolled security.

The risk of entering into a mortgage dollar roll is that the market value of the securities the Fund is obligated to repurchase under the agreement may decline below the repurchase price. In the event the buyer of securities under a mortgage dollar roll files for bankruptcy or becomes insolvent, the Fund’s use of proceeds of the dollar roll may be restricted pending a determination by the other party, or its trustee or receiver, whether to enforce the Fund’s obligation to repurchase the securities.

(h) Credit and Market Risk. Certain Funds invest in high yield instruments that are subject to certain credit and market risks. The yields of high yield obligations reflect, among other things, perceived credit and market risks. The Fund’s investment in securities rated below investment grade typically involve risks not associated with higher rated securities including, among others, greater risk related to timely and ultimate payment of interest and principal, greater market price volatility and less liquid secondary market trading.

(i) Security Transactions and Investment Income. Security transactions are accounted for on a trade date basis. Interest income, adjusted for amortization of premium and accretion of discount, is recorded on the accrual basis. Dividend income is recorded on the ex-dividend date. Foreign dividend income is 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. The cost of investments sold is determined by use of the specific identification method. To the extent any issuer defaults on an expected interest payment, the Funds’ policy is to generally halt any additional interest income accruals and consider the realizability of interest accrued up to the date of default.

62 Legg Mason Partners Variable Portfolios II 2006 Semi-Annual Report

Notes to Financial Statements (unaudited) (continued)

(j) Foreign Currency Translation. Investment securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts based upon prevailing exchange rates on the date of valuation. Purchases and sales of investment securities and income and expense items denominated in foreign currencies are translated into U.S. dollar amounts based upon prevailing exchange rates on the respective dates of such transactions.

The Funds do not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss on investments.

Net realized foreign exchange gains or losses arise from sales of foreign currencies, including gains and losses on forward foreign currency contracts, currency gains or losses realized between the trade and settlement dates on securities transactions and the difference between the amounts of dividends, interest and foreign withholding taxes recorded on the Funds’ books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities, at the date of valuation, resulting from changes in exchange rates.

Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of U.S. dollar denominated transactions as a result of, among other factors, the possibility of lower levels of governmental supervision and regulation of foreign securities markets and the possibility of political or economic instability.

(k) REIT Distributions. The character of distributions received from Real Estate Investment Trusts (“REITs”) held by the Fund is generally comprised of net investment income, capital gains, and return of capital. It is the policy of the Fund to estimate the character of distributions received from underlying REITs based on historical data provided by the REITs. After each calendar year end, REITs report the true tax character of these distributions. Differences between the estimated and actual amounts reported by the REITs are reflected in the Fund’s records in the year in which they are reported by the REITs.

(l) Distributions to Shareholders. Distributions from net investment income and distributions of net realized gains, if any, are declared at least annually. Distributions to shareholders of the Funds are recorded on the ex-dividend date and are determined in accordance with income tax regulations, which may differ from GAAP.

(m) Class Accounting. Investment income, common expenses and realized/ unrealized gain (loss) on investments are allocated to the various classes of the Funds on the basis of daily net assets of each class. Fees relating to a specific class are charged directly to that class.

(n) Federal and Other Taxes. It is the Funds’ policy to comply with the federal income and excise tax requirements of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies. Accordingly, the Funds intend to distribute substantially all of its income and net realized gains on investments, if any, to shareholders

Legg Mason Partners Variable Portfolios II 2006 Semi-Annual Report 63

Notes to Financial Statements (unaudited) (continued)

each year. Therefore, no federal income tax provision is required in the Funds’ financial statements. Under the applicable foreign tax laws, a withholding tax may be imposed on interest, dividends and capital gains at various rates.

(o) Reclassification. GAAP requires that certain components of net assets be adjusted to reflect permanent differences between financial and tax reporting. During the current period, Equity Index Portfolio’s Accumulated Realized Gain and Cost of Investments have been increased by $41,990 as a result of return of capital distributions paid by REITs. These adjustments have no effect on net assets or net asset values per share.


2.	Investment Management Agreement and Other Transactions with Affiliates

For the period of this report, Salomon Brothers Asset Management Inc. (“SBAM”), Smith Barney Fund Management LLC (“SBFM”) and TIMCO Asset Management, Inc. (“TIMCO”) (collectively, the “Manager”), indirect wholly-owned subsidiaries of Legg Mason, Inc. (“Legg Mason”), acted as the investment managers of the Funds. Citigroup Asset Management Ltd. (“CAM Ltd.”), also a wholly-owned subsidiary of Legg Mason, was the sub adviser to Diversified Strategic Income Portfolio. Under the investment management agreements, the Funds paid the Manager a management fee for advisory and administrative services in accordance with the following breakpoint schedules:

Diversified Strategic Income Portfolio:


	Management
Average Daily Net Assets	Fee Rate

First $1.0 billion		0.650	%
Next $1.0 billion		0.625
Next $3.0 billion		0.600
Next $5.0 billion		0.575
Over $10.0 billion		0.550

Growth and Income Portfolio:


	Management
Average Daily Net Assets	Fee Rate

First $1.0 billion		0.650	%
Next $1.0 billion		0.600
Next $1.0 billion		0.550
Next $1.0 billion		0.500
Over $4.0 billion		0.450

64 Legg Mason Partners Variable Portfolios II 2006 Semi-Annual Report

Notes to Financial Statements (unaudited) (continued)

Aggressive Growth Portfolio:


	Management
Average Daily Net Assets	Fee Rate

First $1.0 billion		0.750	%
Next $1.0 billion		0.725
Next $3.0 billion		0.700
Next $5.0 billion		0.675
Over $10.0 billion		0.650

The Equity Index Portfolio pays TIMCO an advisory fee calculated at an annual rate of 0.25% of the Fund’s average daily net assets and pays SBFM an administration fee calculated at an annual rate of 0.06% of the Fund’s average daily net assets. These fees are calculated daily and paid monthly.

During the six months ended June 30, 2006, the Manager waived a portion of its fee in the amount of $1,988, $37,210, $246 and $1,358, for the Diversified Strategic Income Portfolio, Equity Index Portfolio, Growth and Income Portfolio and Aggressive Growth Portfolio, respectively. In addition, during the six months ended June 30, 2006 the Fund was reimbursed for expenses in the amount of $1,537 and $3,069, for the Diversified Strategic Income Portfolio and Equity Index Portfolio, respectively.

During the six months ended June 30, 2006, the Manager reimbursed the Growth and Income Fund in the amount of $7,657 for losses incurred resulting from an investment transaction error.

Citigroup Global Markets Inc. (“CGM”) and Legg Mason Investor Services, LLC (“LMIS”), a wholly-owned broker-dealer subsidiary of Legg Mason, serve as co-distributors of the Funds.

The Funds have adopted an unfunded, non-qualified deferred compensation plan (the “Plan”) which allows non-interested trustees (“Trustees”) to defer the receipt of all or a portion of the trustees’ fees earned until a later date specified by the Trustees. The deferred fees earn a return based on notional investments selected by the Trustees. The balance of the deferred fees payable may change depending upon the investment performance. Any gains or losses incurred in the deferred balances are reported in the Statements of Operations under Trustees’ fees. Under the Plan, deferred fees are considered a general obligation of the Funds and any payments made pursuant to the Plan will be made from the Funds’ general assets. The Board of Trustees voted to discontinue offering the Plan to its members effective January 1, 2007. This change will have no effect on fees previously deferred.

As of June 30, 2006, the Diversified Strategic Income Portfolio, Equity Index Portfolio, Growth and Income Portfolio and Aggressive Growth Portfolio have accrued $2,081, $3,241, $1,638 and $1,436 as deferred compensation, respectively.

Certain officers and one Trustee of the Trust are employees of Legg Mason or its affiliates and do not receive compensation from the Trust.

Legg Mason Partners Variable Portfolios II 2006 Semi-Annual Report 65

Notes to Financial Statements (unaudited) (continued)


3.	Investments

During the six months ended June 30, 2006, the aggregate cost of purchases and proceeds from sales of investments (excluding short-term investments and mortgage dollar rolls) were as follows:


					U.S. Government &
	Investments				Agency Obligations

	Purchases		Sales		Purchases		Sales

Diversified Strategic Income Portfolio	$	38,967,770	$	12,894,129	$	85,547,895	$	96,191,466

Equity Index Portfolio		73,540,215		183,665,153		—		—

Growth and Income Portfolio		2,240,444		3,296,289		—		—

Aggressive Growth Portfolio		7,594,965		2,428,627		—		—

At June 30, 2006, the aggregate gross unrealized appreciation and depreciation of investments for federal income tax purposes were substantially as follows:


						Net Unrealized
	Gross Unrealized		Gross Unrealized			Appreciation/
	Appreciation		Depreciation			Depreciation

Diversified Strategic Income Portfolio	$	571,103	$	(2,777,551	)	$	(2,206,448	)

Equity Index Portfolio		321,784,229		(204,126,480	)		117,657,749

Growth and Income Portfolio		1,946,691		(236,094	)		1,710,597

Aggressive Growth Portfolio		11,792,006		(3,950,378	)		7,841,628

At June 30, 2006, the Funds had the following open futures contracts:


Diversified Strategic	Number of		Expiration		Basis		Market		Unrealized
Income Portfolio	Contracts		Date		Value		Value		Gain (Loss)

Contracts to Buy:
U.S. Treasury 2 Year Notes		36		9/06	$	7,323,883	$	7,300,125	$	(23,758	)

U.S. Treasury 5 Year Notes		25		9/06		2,595,586		2,585,156		(10,430	)

U.S. Treasury 10 Year Notes		27		9/06		2,845,564		2,831,203		(14,361	)

										(48,549	)

Contracts to Sell:
Euro Dollar		3		9/06	$	712,010	$	708,150	$	3,860

U.S. Treasury Bond		1		9/06		106,979		106,656		323

										4,183

Net Unrealized Loss on Open Futures Contracts									$	(44,366	)

66 Legg Mason Partners Variable Portfolios II 2006 Semi-Annual Report

Notes to Financial Statements (unaudited) (continued)

Number of

Expiration

Basis

Market

Unrealized

Equity Index Portfolio

Contracts

Date

Value

Gain

Contracts to Buy:

S & P 500 Index

9/06

17,229,543

17,591,750

362,207

During the six months ended June 30, 2006, the Diversified Strategic Income Portfolio entered into mortgage dollar roll transactions in the aggregate amount of $237,861,119. For the six months ended June 30, 2006, the Fund recorded interest income of $175,633 related to such mortgage rolls. At June 30, 2006, the Fund had outstanding net contracts to repurchase mortgage-backed securities of $30,759,039 for scheduled settlements on July 13, 18, 20, and August 14 and 17, 2006.

During the six months ended June 30, 2006, written option transactions for the Diversified Strategic Income Portfolio were as follows:


	Number of Contracts			Premiums

Options written, outstanding December 31, 2005		—			—
Options written		192		$	55,646
Options closed		(160	)		(47,978	)
Options expired		—			—

Options written, outstanding June 30, 2006		32		$	7,668


4.	Class Specific Expenses

Certain Funds have adopted a Rule 12b-1 distribution plan and under that plan the Equity Index Portfolio and Aggressive Growth Portfolio each pay a distribution fee with respect to

Legg Mason Partners Variable Portfolios II 2006 Semi-Annual Report 67

Notes to Financial Statements (unaudited) (continued)

its Class II shares calculated at the annual rate 0.25% of the average daily net assets attributable to Class II shares. Distribution fees are accrued daily and paid monthly.

For the six months ended June 30, 2006, class specific expenses were as follows:


	Distribution		Transfer Agent		Shareholder
	Fees		Fees		Fees

Equity Index Portfolio
Class I		—	$	45	$	29,214
Class II	$	290,546		55		9,986

Total	$	290,546	$	100	$	39,200

Aggressive Growth Portfolio
Class I		—	$	40	$	4,900
Class II	$	38,891		38		4,610

Total	$	38,891	$	78	$	9,510


5.	Distributions to Shareholders by Class


	Six Months Ended		Year Ended
	June 30, 2006		December 31, 2005

Diversified Strategic Income Portfolio
Net Investment Income		—	$	5,001,106

Equity Index Portfolio
Class I	$	103,676	$	21,430,279
Class II		14,037		2,871,278

Total	$	117,713	$	24,301,557

Growth and Income Portfolio
Class I		—	$	40,002

For the six months ended June 30, 2006 and the year ended December 31, 2005, the Aggressive Growth Portfolio did not make any distributions.


6.	Shares of Beneficial Interest

At June 30, 2006, the Trust had an unlimited number of shares of beneficial interest authorized with a par value of $0.001 per share. The Equity Index Portfolio, Growth and Income Portfolio and Aggressive Growth Portfolio have the ability to issue multiple classes of shares. Each share of a class represents an identical interest and has the same rights, except that each class bears certain direct expenses, including those specifically related to the distribution of its shares.

On August 30, 2002, the Aggressive Growth Portfolio and the Growth and Income Portfolio created a separate class of shares designated as Class II shares. Prior to that date, these Funds issued one class of shares, which, as of August 30, 2002, has been designated Class I shares. As of June 30, 2006, Growth and Income Portfolio had not issued any Class II shares.

68 Legg Mason Partners Variable Portfolios II 2006 Semi-Annual Report

Notes to Financial Statements (unaudited) (continued)

Transactions in shares of each Fund were as follows:


		Six Months Ended						Year Ended
		June 30, 2006						December 31, 2005

		Shares			Amount			Shares			Amount

Diversified Strategic Income Portfolio
	Shares sold		17,041,846		$	281,879			559,692		$	5,234,458
	Shares issued on reinvestment		—			—			552,927			5,001,106
	Shares repurchased		(18,092,900	)		(9,742,754	)		(1,970,148	)		(18,480,976	)

	Net Decrease		(1,051,054	)	$	(9,460,875	)		(857,529	)	$	(8,245,412	)

Equity Index Portfolio — Class I
	Shares sold		1,332,426		$	41,923,625			1,783,407		$	52,469,338
	Shares issued on reinvestment		3,397			103,676			699,911			21,430,279
	Shares repurchased		(4,298,868	)		(135,331,999	)		(3,243,069	)		(96,663,549	)

	Net Decrease		(2,963,045	)	$	(93,304,698	)		(759,751	)	$	(22,763,932	)

Equity Index Portfolio — Class II
	Shares sold		124,927		$	3,918,705			917,995		$	27,034,778
	Shares issued on reinvestment		460			14,037			93,715			2,871,278
	Shares repurchased		(564,738	)		(17,744,802	)		(1,001,831	)		(29,736,784	)

	Net Increase (Decrease)		(439,351	)	$	(13,812,060	)		9,879		$	169,272

Growth and Income Portfolio — Class I
	Shares sold		88,282		$	466,436			199,677		$	966,534
	Shares issued on reinvestment		—			—			7,828			40,002
	Shares repurchased		(278,517	)		(1,448,990	)		(414,168	)		(2,016,392	)

	Net Decrease		(190,235	)	$	(982,554	)		(206,663	)	$	(1,009,856	)

Aggressive Growth Portfolio — Class I
	Shares sold		97,249		$	2,372,182			473,718		$	10,157,123
	Shares repurchased		(91,027	)		(2,204,322	)		(72,209	)		(1,562,217	)

	Net Increase		6,222		$	167,860			401,509		$	8,594,906

Aggressive Growth Portfolio — Class II
	Shares sold		366,197		$	8,709,836			342,024		$	7,232,616
	Shares repurchased		(82,163	)		(1,948,948	)		(110,836	)		(2,372,640	)

	Net Increase		284,034		$	6,760,888			231,188		$	4,859,976

Legg Mason Partners Variable Portfolios II 2006 Semi-Annual Report 69

Notes to Financial Statements (unaudited) (continued)


7.	Capital Loss Carryforward

As of December 31, 2005, the Fund had the following net capital loss carryforwards remaining:


	Diversified
Year of	Strategic Income			Equity Index			Growth and			Aggressive
Expiration	Portfolio			Portfolio			Income Portfolio			Growth Portfolio

12/31/2008	$	(449,197	)		—			—			—
12/31/2009		(4,543,816	)		—			—			—
12/31/2010		(2,118,955	)	$	(7,879,134	)		—		$	(577,590	)
12/31/2011		—			—		$	(625,649	)		—

	$	(7,111,968	)	$	(7,879,134	)	$	(625,649	)	$	(577,590	)

These amounts will be available to offset any future taxable capital gains.


8.	Regulatory Matters

On May 31, 2005, the U.S. Securities and Exchange Commission (“SEC”) issued an order in connection with the settlement of an administrative proceeding against SBFM and CGM relating to the appointment of an affiliated transfer agent for the Smith Barney family of mutual funds (the “Funds”).

The SEC order finds that SBFM and CGM willfully violated Section 206(1) of the Investment Advisers Act of 1940 (“Advisers Act”). Specifically, the order finds that SBFM and CGM knowingly or recklessly failed to disclose to the boards of the Funds in 1999 when proposing a new transfer agent arrangement with an affiliated transfer agent that: First Data Investors Services Group (“First Data”), the Funds’ then-existing transfer agent, had offered to continue as transfer agent and do the same work for substantially less money than before; and that Citigroup Asset Management (“CAM”), the Citigroup business unit that, at the time, included the fund’s investment manager and other investment advisory companies, had entered into a side letter with First Data under which CAM agreed to recommend the appointment of First Data as sub-transfer agent to the affiliated transfer agent in exchange for, among other things, a guarantee by First Data of specified amounts of asset management and investment banking fees to CAM and CGM. The order also finds that SBFM and CGM willfully violated Section 206(2) of the Advisers Act by virtue of the omissions discussed above and other misrepresentations and omissions in the materials provided to the Funds’ boards, including the failure to make clear that the affiliated transfer agent would earn a high profit for performing limited functions while First Data continued to perform almost all of the transfer agent functions, and the suggestion that the proposed arrangement was in the Funds’ best interests and that no viable alternatives existed. SBFM and CGM do not admit or deny any wrongdoing or liability. The settlement does not establish wrongdoing or liability for purposes of any other proceeding.

The SEC censured SBFM and CGM and ordered them to cease and desist from violations of Sections 206(1) and 206(2) of the Advisers Act. The order requires Citigroup

70 Legg Mason Partners Variable Portfolios II 2006 Semi-Annual Report

Notes to Financial Statements (unaudited) (continued)

to pay $208.1 million, including $109 million in disgorgement of profits, $19.1 million in interest, and a civil money penalty of $80 million. Approximately $24.4 million has already been paid to the Funds, primarily through fee waivers. The remaining $183.7 million, including the penalty, has been paid to the U.S. Treasury and will be distributed pursuant to a plan submitted for the approval of the SEC. At this time, there is no certainty as to how the above-described proceeds of the settlement will be distributed, to whom such distributions will be made, the methodology by which such distributions will be allocated, and when such distributions will be made. The order also required that transfer agency fees received from the Funds since December 1, 2004 less certain expenses be placed in escrow and provided that a portion of such fees might be subsequently distributed in accordance with the terms of the order. On April 3, 2006, an aggregate amount of approximately $9 million was distributed to the affected Funds.

The order required SBFM to recommend a new transfer agent contract to the Fund boards within 180 days of the entry of the order; if a Citigroup affiliate submitted a proposal to serve as transfer agent or sub-transfer agent, SBFM and CGM would have been required, at their expense, to engage an independent monitor to oversee a competitive bidding process. On November 21, 2005, and within the specified timeframe, the Fund’s Board selected a new transfer agent for the Fund. No Citigroup affiliate submitted a proposal to serve as transfer agent. Under the order, SBFM also must comply with an amended version of a vendor policy that Citigroup instituted in August 2004.

Although there can be no assurance, SBFM does not believe that this matter will have a material adverse effect on the Funds.

On December 1, 2005, Citigroup completed the sale of substantially all of its global asset management business, including SBFM, to Legg Mason.


9.	Legal Matters

Beginning in August 2005, five class action lawsuits alleging violations of federal securities laws and state law were filed against CGM and SBFM (collectively, the “Defendants”) based on the May 31, 2005 settlement order issued against the Defendants by the SEC described in Note 8. The complaints seek injunctive relief and compensatory and punitive damages, removal of SBFM as the investment manager for the Smith Barney family of funds, rescission of the Funds’ management and other contracts with SBFM, recovery of all fees paid to SBFM pursuant to such contracts, and an award of attorneys’ fees and litigation expenses.

On October 5, 2005, a motion to consolidate the five actions and any subsequently filed, related action was filed. That motion contemplates that a consolidated amended complaint alleging substantially similar causes of action will be filed in the future. As of the date of this report, the Fund’s investment manager believes that resolution of the pending lawsuit will not have a material effect on the financial position or results of operations of the Fund or the ability of the Fund’s investment manager and its affiliates to continue to render services to the Funds under their respective contracts.

Legg Mason Partners Variable Portfolios II 2006 Semi-Annual Report 71

Notes to Financial Statements (unaudited) (continued)

* * *

Beginning in June 2004, class action lawsuits alleging violations of the federal securities laws were filed against CGM and a number of its then affiliates, including SBFM and SBAM, which were then investment adviser or manager to certain of the Funds (the “Managers”), substantially all of the mutual funds then managed by the Managers (the “Defendant Funds”), and Board Members of the Defendant Funds (collectively, the “Defendants”). The complaints alleged, among other things, that CGM created various undisclosed incentives for its brokers to sell Smith Barney and Salomon Brothers funds. In addition, according to the complaints, the Managers caused the Defendant Funds to pay excessive brokerage commissions to CGM for steering clients towards proprietary funds. The complaints also alleged that the defendants breached their fiduciary duty to the Defendant Funds by improperly charging Rule 12b-1 fees and by drawing on fund assets to make undisclosed payments of soft dollars and excessive brokerage commissions. The complaints also alleged that the Defendant Funds failed to adequately disclose certain of the allegedly wrongful conduct. The complaints sought injunctive relief and compensatory and punitive damages, rescission of the Defendant Funds’ contracts with the Managers, recovery of all fees paid to the Managers pursuant to such contracts and an award of attorneys’ fees and litigation expenses.

On December 15, 2004, a consolidated amended complaint (the “Complaint”) was filed alleging substantially similar causes of action. On May 27, 2005, all of the Defendants filed motions to dismiss the Complaint. On July 26, 2006, the court issued a decision and order (1) finding that plaintiffs lacked standing to sue on behalf of the shareholders of the Funds in which none of the plaintiffs had invested and dismissing those Funds from the case (although stating that they could be brought back into the case if standing as to them could be established), and (2) other than one stayed claim, dismissing all of the causes of action against the remaining Defendants, with prejudice, except for the cause of action under Section 36(b) of the Investment Company Act, which the court granted plaintiffs leave to replead as a derivative claim.


10.	Other Matters

On September 16, 2005, the staff of the SEC informed SBFM and SBAM that the staff is considering recommending that the SEC institute administrative proceedings against SBFM and SBAM for alleged violations of Section 19(a) and 34(b) of the Investment Company Act (and related Rule 19a-1). The notification is a result of an industry wide inspection by the SEC and is based upon alleged deficiencies in disclosures regarding dividends and distributions paid to shareholders of certain funds. Section 19(a) and related Rule 19a-1 of the Investment Company Act generally require funds that are making dividend and distribution payments to provide shareholders with a written statement disclosing the source of the dividends and distributions, and, in particular, the portion of the payments made from each of net investment income, undistributed net profits and/or paid-in capital. In connection with the contemplated proceedings, the staff may seek a cease and desist order and/or monetary damages from SBFM or SBAM.

72 Legg Mason Partners Variable Portfolios II 2006 Semi-Annual Report

Notes to Financial Statements (unaudited) (continued)

Although there can be no assurance, SBFM and SBAM believe that this matter is not likely to have a material adverse effect on the Funds.


11.	Subsequent Events

(The following applies to all Funds, except the Equity Index Portfolio)

The Funds’ Board has approved the appointment of Legg Mason Partners Fund Advisor, LLC (“LMPFA”), as each Fund’s investment manager effective August 1, 2006. The Funds’ Board has also approved the appointment of Western Asset Management Co. (“Western Asset”), and Western Asset Management Co. Ltd. (“Western Asset Limited”), as the Diversified Strategic Income Portfolio’s subadvisers effective August 1, 2006. Additionally, the Funds’ Board has approved the appointment of CAM North America, LLC (“CAM N.A.”) as the Growth and Income Portfolio’s and Aggressive Growth Portfolio’s subadviser effective August 1, 2006. The portfolio managers who are responsible for the day-to-day management of the Funds remain the same immediately prior to and immediately after the date of these changes. LMPFA, Western Asset, Western Asset Limited, and CAM N.A. are wholly-owned subsidiaries of Legg Mason.

LMPFA will provide administrative and certain oversight services to the Funds. LMPFA will delegate to the subadvisers the day-to-day portfolio management of the Funds, except for certain Funds, the management of cash and short-term instruments. The Funds’ investment management fee will remain unchanged. For its services, LMPFA will pay each subadviser 70% of the net management fee that it receives from the Fund, except Western Asset will pay Western Asset Limited a subadvisory fee of 0.30% on the assets managed by Western Asset Limited. For the Diversified Strategic Income Portfolio, as compensation for services performed by Western Asset Limited, Western Asset pays Western Asset Limited out of the subadvisory fee it receives.

The Funds’ Board has also approved the reorganization of the Growth and Income Portfolio and the Aggressive Growth Portfolio (“the Acquired Funds”) pursuant to which the Funds’ assets would be acquired, and their liabilities assumed, by the Legg Mason Partners Variable Appreciation Portfolio and the Legg Mason Partners Variable Portfolios III — Legg Mason Partners Variable Aggressive Growth Portfolio (the “Acquiring Funds”), respectively, in exchange for shares of the Acquiring Funds. The Acquired Funds would then be liquidated, and shares of the Acquiring Funds would be distributed to shareholders of the Acquired Funds.

Under the reorganization, the Acquired Funds shareholders would receive shares of the Acquiring Funds with the same aggregate net asset value as their shares of the Acquired Funds. It is anticipated that as a result of the reorganization, shareholders of the Acquired Funds would recognize no gain or loss for Federal income tax purposes. The reorganization is subject to the satisfaction of certain condition, including approval by the Acquired Funds’ shareholders.

Legg Mason Partners Variable Portfolios II 2006 Semi-Annual Report 73

Notes to Financial Statements (unaudited) (continued)

Proxy materials describing the reorganizations are expected to be sent to Acquired Fund shareholders later in 2006. If Acquiring Funds’ shareholders approve the reorganizations, they are expected to occur during 2007.

(The following applies to all Funds)

The Funds’ Board has also approved a number of other initiatives designed to streamline and restructure the fund complex, and has authorized seeking shareholder approval for those initiatives where shareholder approval is required. As a result, each Fund’s shareholders will be asked to elect a new Board, approve matters that will result in the Funds being grouped for organizational and governance purposes with other funds in the fund complex, and domicile the Funds as a Maryland business trust, with all funds operating under uniform charter documents. Each Fund’s shareholders also will be asked to approve investment matters, including standardized fundamental investment policies.

Proxy materials describing these matters are expected to be sent to shareholders later in 2006. If shareholder approval is obtained, these matters generally are expected to be implemented during 2007.


12.	Recent Accounting Pronouncement

During June 2006, the Financial Accounting Standards Board (“FASB”) issued FASB Interpretation 48 (“FIN 48” or the “Interpretation”), Accounting for Uncertainty in Income Taxes — an interpretation of FASB statement 109. FIN 48 supplements FASB Statement 109 by defining the confidence level that a tax position must meet in order to be recognized in the financial statements. FIN 48 prescribes a comprehensive model for how a fund should recognize, measure, present, and disclose in its financial statements uncertain tax positions that the fund has taken or expects to take on a tax return. FIN 48 requires that the tax effects of a position be recognized only if it is “more likely than not” to be sustained based solely on its technical merits. Management must be able to conclude that the tax law, regulations, case law, and other objective information regarding the technical merits sufficiently support the position’s sustainability with a likelihood of more than 50 percent. FIN 48 is effective for fiscal periods beginning after December 15, 2006, which for these Funds will be January 1, 2007. At adoption, the financial statements must be adjusted to reflect only those tax positions that are more likely than not to be sustained as of the adoption date. Management of the Funds is currently evaluating the impact that FIN 48 will have on the financial statements.

74 Legg Mason Partners Variable Portfolios II 2006 Semi-Annual Report

Board Approval of Management and
Subadvisory Agreements (unaudited)

At a meeting held in person on June 28, the Funds’ Board, including a majority of the Board Members who are not “interested persons” of the Funds or Legg Mason Partners Fund Advisor, LLC (the “Manager”) or any sub-investment adviser or proposed sub-investment adviser as defined in the Investment Company Act of 1940, as amended (the “1940 Act”) (the “Independent Board Members”), approved a new management agreement (the “New Management Agreement”) between the Funds and the Manager. The Funds’ Board, including a majority of the Independent Board Members, also approved one or more new subadvisory agreements between the Manager and each of CAM North America LLC, Western Asset Management Co. and Western Asset Management Co. Ltd., (each a “Subadviser”) (each a “New Subadvisory Agreement”). The New Management Agreement and the New Subadvisory Agreements replaced the Funds’ prior management agreement with Salomon Brothers Asset Management Inc., Smith Barney Fund Management LLC and TIMCO Asset, Management, Inc., respectively manager and the prior subadvisory agreement with the Subadviser and were entered into in connection with an internal reorganization of the Manager’s and the prior manager’s and the Subadvisers’ parent organization, Legg Mason. In approving the New Management Agreement and New Subadvisory Agreements, the Board, including the Independent Board Members, considered the factors discussed below, among other things.

The Board noted that the Manager will provide administrative and certain oversight services to the Funds, and that the Manager will delegate to each of the Subadvisers the day-to-day portfolio management of the Funds. The Board Members reviewed the qualifications, backgrounds and responsibilities of the senior personnel that will provide oversight and general management services and the portfolio management team that would be primarily responsible for the day-to-day management of the Funds. The Board Members noted that the portfolio management team was expected to be the same as then managing the Funds.

The Board Members received and considered information regarding the nature, extent and quality of services expected to be provided to the Funds by the Manager under the New Management Agreement and by the Subadvisers under the New Subadvisory Agreements. The Board Members’ evaluation of the services expected to be provided by the Manager and the Subadvisers took into account the Board Members’ knowledge and familiarity gained as Fund Board Members, including as to the scope and quality of Legg Mason’s investment management and other capabilities and the quality of its administrative and other services. The Board Members considered, among other things, information and assurances provided by Legg Mason as to the operations, facilities and organization of the Manager and the Subadvisers and the qualifications, backgrounds and responsibilities of their senior personnel. The Board Members further considered the financial resources available to the Manager, the Subadvisers and Legg Mason. The Board Members concluded that, overall, the nature, extent and quality of services expected to be provided under the New Management Agreement and the New Subadvisory Agreements were acceptable.

Legg Mason Partners Variable Portfolios II 75

Board Approval of Management and
Subadvisory Agreements (unaudited) (continued)

The Board Members also received and considered performance information for the Funds as well as comparative information with respect to a peer group of funds (the “Performance Universe”) selected by Lipper, Inc. (“Lipper”), an independent provider of investment company data. The Board Members were provided with a description of the methodology Lipper used to determine the similarity of the Funds to the funds included in the Performance Universe. The Board Members noted that they had received and discussed with management, at periodic intervals, information comparing each Fund’s performance against, among other things, their benchmarks. Based on the Board Members’ review, which included careful consideration of the factors noted above, the Board Members concluded that the performance of the Fund, under the circumstances, supported approval of the New Management Agreement and New Subadvisory Agreements.

The Board Members reviewed and considered the management fees that would be payable by the Funds to the Manager in light of the nature, extent and quality of the management services expected to be provided by the Manager. Additionally, the Board Members received and considered information comparing the Funds’ management fees and overall expenses with those of comparable funds in both the relevant expense group and a broader group of funds, each selected and provided by Lipper. The Board Members also reviewed and considered the subadvisory fee that would be payable by the Manager to the Subadviser in light of the nature, extent and quality of the management services expected to be provided by the Subadvisers. The Board Members noted that the Manager, and not the Funds, will pay the subadvisory fee to each Subadviser. The Board Members determined that the Funds’ management fees and the Funds’ subadvisory fees were reasonable in light of the nature, extent and quality of the services expected to be provided to the Funds under the New Management Agreement and the New Subadvisory Agreements.

The Board Members received and considered a pro-forma profitability analysis of Legg Mason and its affiliates in providing services to the Funds, including information with respect to the allocation methodologies used in preparing the profitability data. The Board Members recognized that Legg Mason may realize economies of scale based on its internal reorganization and synergies of operations. The Board Members noted that it was not possible to predict with a high degree of confidence how Legg Mason’s and its affiliates’ profitability would be affected by its internal reorganization and by other factors including potential economies of scale, but that based on their review of the pro forma profitability analysis, their most recent prior review of the profitability of the predecessor manager and its affiliates from their relationship with the Fund and other factors considered, they determined that the management fee was reasonable. The Board Members noted that they expect to receive profitability information on an annual basis.

In their deliberations, the Board Members also considered, and placed significant importance on, information that had been received and conclusions that had been reached by the Board in connection with the Board’s most recent approval of the Funds’ prior management agreement and the prior subadvisory agreements, in addition to information

76 Legg Mason Partners Variable Portfolios II

Board Approval of Management and
Subadvisory Agreements (unaudited) (continued)

provided in connection with the Board’s evaluation of the terms and conditions of the New Management Agreement and the New Subadvisory Agreements.

The Board Members considered Legg Mason’s advice and the advice of its counsel that the New Management Agreement and the New Subadvisory Agreements were being entered into in connection with an internal reorganization within Legg Mason, that did not involve an actual change of control or management. The Board Members further noted that the terms and conditions of the New Management Agreement are substantially identical to those of the Funds’ previous management agreement except for the identity of the Manager, and that the initial term of the New Management Agreement (after which it will continue in effect only if such continuance is specifically approved at least annually by the Board, including a majority of the Independent Board Members) was the same as that under the prior management agreement. They noted, in addition, that the terms and conditions of the New Subadvisory Agreements are likewise unchanged from those of the prior subadvisory agreements.

In light of all of the foregoing, the Board, including the Independent Board Members, approved the New Management Agreement and the New Subadvisory Agreements. No single factor reviewed by the Board Members was identified as the principal factor in determining whether to approve the New Management Agreement and the New Subadvisory Agreements. The Independent Board Members were advised by separate independent legal counsel throughout the process. The Independent Board Members also discussed the proposed approval of the New Management Agreement and the New Subadvisory Agreements in private sessions with their independent legal counsel at which no representatives of the Manager or Subadvisers were present.

Legg Mason Partners Variable Portfolios II 77

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	Legg Mason Partners Variable Portfolios II


TRUSTEES
Dwight B. Crane Burt N. Dorsett R. Jay Gerken, CFA Chairman Elliot S. Jaffe Stephen E. Kaufman Cornelius C. Rose, Jr.

INVESTMENT MANAGER
Legg Mason Partners
	Fund Advisor, LLC
TIMCO Asset Management, Inc.

SUBADVISERS
CAM North America, LLC Western Asset Management Co. Western Asset Management Co. Ltd.

DISTRIBUTORS
Citigroup Global Markets Inc.
Legg Mason Investor Services, LLC

CUSTODIAN
State Street Bank and Trust Company

TRANSFER AGENT
PFPC Inc. 4400 Computer Drive Westborough, Massachusetts 01581

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
KPMG LLP 345 Park Avenue New York, New York 10154



This report is submitted for the general information of shareholders of the Legg Mason Partners Variable Portfolios II – Legg Mason Partners Variable Diversified Strategic Income, Legg Mason Partners Variable Equity Index, Legg Mason Partners Variable Growth and Income and Legg Mason Partners Variable Aggressive Growth Portfolios, and is not for use with the general public. This report must be preceded or accompanied by a free prospectus. Investors should consider the Funds’ investment objectives, risks, charges and expenses carefully before investing. The prospectus contains this and other information about the Funds. Please read the prospectus carefully before investing. www.leggmason.com/InvestorServices ^©2006 Legg Mason Investors Services, LLC Member NASD, SIPC FD03434 8/06 SR06-98		Legg Mason Partners Variable Portfolios II Legg Mason Partners Variable Diversified Strategic Income Portfolio Legg Mason Partners Variable Equity Index Portfolio Legg Mason Partners Variable Growth and Income Portfolio Legg Mason Partners Variable Aggressive Growth Portfolio The Funds are separate investment funds of the Legg Mason Partners Variable Portfolios II, a Massachusetts business trust. The Funds file their complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the Commission’s website at www.sec.gov. The Funds’ Forms N-Q may be reviewed and copied at the Commission’s Public Reference Room in Washington D.C., and information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. To obtain information on Form N-Q from the Funds, shareholders can call 1-800-451-2010. Information on how the Funds voted proxies relating to portfolio securities during the prior 12 month period ended June 30th of each year, and a description of the policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities is available (1) without charge upon request, by calling 1-800-451-2010, (2) on the Fund’s website at www.leggmason.com/InvestorServices.com and (3) on the SEC’s website at www.sec.gov. Proxy voting reports for the period ending June 30, 2005 will continue to be listed under the Trust’s former Greenwich Street Series Fund, name.