-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FqwN4UYlo6gCD2BMdud69hhXZq0Rlv9a7AViXznUp3mFWW+FbKDLDPOaAobdZKBo wqMCg9/hXYV31FMliroMEA== 0000930413-04-004061.txt : 20040827 0000930413-04-004061.hdr.sgml : 20040827 20040827144624 ACCESSION NUMBER: 0000930413-04-004061 CONFORMED SUBMISSION TYPE: N-CSRS PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20040630 FILED AS OF DATE: 20040827 DATE AS OF CHANGE: 20040827 EFFECTIVENESS DATE: 20040827 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TRAVELERS GROWTH & INCOME STOCK ACCT FOR VARIABLE ANNUITIES CENTRAL INDEX KEY: 0000099444 IRS NUMBER: 060566090 STATE OF INCORPORATION: CT FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-CSRS SEC ACT: 1940 Act SEC FILE NUMBER: 811-01539 FILM NUMBER: 041002170 BUSINESS ADDRESS: STREET 1: ONE TOWER SQ STREET 2: C/O TRAVELERS INSURANCE CO CITY: HARTFORD STATE: CT ZIP: 06183-2020 BUSINESS PHONE: 8602770111 MAIL ADDRESS: STREET 1: ONE TOWER SQUARE STREET 2: ATTN FINANCIAL SERVICES LEGAL DIVISION CITY: HARTFORD STATE: CT ZIP: 06183-2020 FORMER COMPANY: FORMER CONFORMED NAME: TRAVELERS FUND A FOR VARIABLE ANNUITIES DATE OF NAME CHANGE: 19851103 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TRAVELERS MONEY MARKET ACCOUNT FOR VARIABLE ANNUITIES CENTRAL INDEX KEY: 0000700871 IRS NUMBER: 060566090 STATE OF INCORPORATION: CT FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-CSRS SEC ACT: 1940 Act SEC FILE NUMBER: 811-03409 FILM NUMBER: 041002172 BUSINESS ADDRESS: STREET 1: ONE TOWER SQ STREET 2: C/O TRAVELERS INSURANCE CO CITY: HARTFORD STATE: CT ZIP: 06183 BUSINESS PHONE: 8602770111 MAIL ADDRESS: STREET 1: ONE TOWER SQUARE STREET 2: ATTN FINANCIAL SERVICES LEGAL DIVISION CITY: HARTFORD STATE: CT ZIP: 06183-2020 FORMER COMPANY: FORMER CONFORMED NAME: TRAVELERS FUND MM FOR VARIABLE ANNUITIES DATE OF NAME CHANGE: 19851103 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TRAVELERS QUALITY BOND ACCOUNT FOR VARIABLE ANNUITIES CENTRAL INDEX KEY: 0000099440 IRS NUMBER: 060566090 STATE OF INCORPORATION: CT FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-CSRS SEC ACT: 1940 Act SEC FILE NUMBER: 811-02571 FILM NUMBER: 041002171 BUSINESS ADDRESS: STREET 1: ONE TOWER SQ STREET 2: C/O TRAVELERS INSURANCE CO CITY: HARTFORD STATE: CT ZIP: 06183-2020 BUSINESS PHONE: 8602770111 MAIL ADDRESS: STREET 1: ONE TOWER SQUARE STREET 2: ATTN FINANCIAL SERVICES LEGAL DIVISION CITY: HARTFORD STATE: CT ZIP: 06183-2020 FORMER COMPANY: FORMER CONFORMED NAME: TRAVELERS FUND A-1 FOR VARIABLE ANNUITIES DATE OF NAME CHANGE: 19851103 N-CSRS 1 c33413_ncsrs.txt ------------------------- OMB APPROVAL ------------------------- OMB Number: 3235-0570 Expires: October 31, 2006 Estimated average burden hours per response: 19.3 ------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act File Number 811-01539 811-02571 811-03409 Travelers Growth and Income Stock Account For Variable Annuities Travelers Quality Bond Account For Variable Annuities Travelers Money Market Account For Variable Annuities One Cityplace, Hartford, CT 06103 Kathleen A. McGah One Cityplace Hartford, CT 06103 (860) 308-6202 Date of fiscal year end: December 31 Date of reporting period: June 30, 2004 ITEM 1. REPORT(S) TO STOCKHOLDERS. The Semi-Annual Report to Stockholders is filed herewith. SEMI-ANNUAL REPORTS JUNE 30, 2004 THE TRAVELERS GROWTH AND INCOME STOCK ACCOUNT FOR VARIABLE ANNUITIES THE TRAVELERS QUALITY BOND ACCOUNT FOR VARIABLE ANNUITIES THE TRAVELERS MONEY MARKET ACCOUNT FOR VARIABLE ANNUITIES [TRAVELERS LOGO] The Travelers Insurance Company The Travelers Life and Annuity Company One Cityplace Hartford, CT 06103 [LOGO OF TAMIC] Travelers Asset Management International Company, LLC ("TAMIC") provides fixed income management and advisory services for the following Travelers Life & Annuity Variable Products Separate Accounts ("Accounts") contained in this report: The Travelers Growth and Income Stock Account for Variable Annuities, The Travelers Quality Bond Account for Variable Annuities and The Travelers Money Market Account for Variable Annuities. [LOGO OF TIMCO] The Travelers Investment Management Company A member of citigroup [LOGO] ("TIMCO") provides equity management and subadvisory services for The Travelers Growth and Income Stock Account for Variable Annuities. TABLE OF CONTENTS PAGE - -------------------------------------------------------------------------------- CHAIRMAN'S LETTER.............................................................1 THE TRAVELERS GROWTH AND INCOME STOCK ACCOUNT FOR VARIABLE ANNUITIES........................................................3 THE TRAVELERS QUALITY BOND ACCOUNT FOR VARIABLE ANNUITIES....................14 THE TRAVELERS MONEY MARKET ACCOUNT FOR VARIABLE ANNUITIES....................25 BOARD OF MANAGERS AND OFFICERS...............................................32 This page intentionally left blank THE TRAVELERS GROWTH AND INCOME STOCK ACCOUNT FOR VARIABLE ANNUITIES THE TRAVELERS QUALITY BOND ACCOUNT FOR VARIABLE ANNUITIES THE TRAVELERS MONEY MARKET ACCOUNT FOR VARIABLE ANNUITIES LETTER FROM THE CHAIRMAN DEAR SHAREHOLDER, Both the stock and bond markets switched gears during the first half of this year, due largely to shifting tides of investor sentiment. After a torrid second half of 2003, the equity markets took a breather this year. Markets typically abhor uncertainty, so as the year progressed, investors grew increasingly lethargic amid questions over Iraq, global terrorism, a rise in oil prices, interest rates, inflation, and the presidential election. The good news - solid corporate earnings, the improving economy, renewed job growth, and the still low level of interest rates - largely was ignored. As a result, stock market returns for the first six months of 2004 generally were modest, as opposed to the strong, double-digit gains late last year. As was the case in 2003, small and mid-capitalization stocks generally outperformed their larger brethren in the first half of this year. Value- and growth-oriented stocks frequently traded short-term performance leadership during the past six months, but value stocks slightly outperformed growth stocks over the full six-month period. The performance of foreign stock markets in the first half largely was in-line with that of the broad U.S. market. Although the bond market got off to a formidable start, its performance also was hampered by heightened worries about resurgent inflation, rising rates, and anticipation that the Federal Reserve Bank ("The Fed") would begin to raise key short-term rates after a long accommodative stance on monetary policy. Higher interest rates can act as a brake on robust economic growth to help maintain a balance between steady growth and the inflation that generally accompanies that growth. Given that the economy appeared to be humming along at a healthy pace, as was widely expected, the central bank edged up its federal funds target rate(i) from a four-decade low to 1.25% at the end of June. Over the six-month period, following a significant pullback this past spring, bond prices finished on a flat note. However, mortgage-backed securities, U.S. Agencies, and corporate issues in general held up better than those of U.S. Treasury bonds(ii) on a total return basis. Signs during the period of economic recovery, which is favorable for corporate earnings and the credit environment, helped the high-yield market outperform Treasuries.(iii) Yields on most money market instruments, particularly those with longer maturities, rose during the second half of the period. Although investor sentiment was shaky this past spring, by the end of the period the U.S. Consumer Confidence Index(iv) rose to levels not seen since June of 2002. The domestic unemployment rate held steady, job growth slowed following a strong increase in March through the early spring, and inflation picked up during the period. -1- Effective June 28, 2004, a team of individuals employed by Travelers Investment Management Company (TIMCO) assumed the functions formerly administered by Sandip Bhagat as Portfolio Manager of The Travelers Growth and Income Stock Account for Variable Annuities. Effective January 1, 2004, Gene Collins and Kurt Lin replaced F. Denney Voss as Portfolio Managers of The Travelers Quality Bond Account for Variable Annuities. Mr. Collins is a Senior Vice President of Travelers Asset Management International Company, LLC. Mr. Lin is a Vice President of Travelers Asset Management International Company, LLC. INFORMATION ON YOUR TRAVELERS LIFE & ANNUITY VARIABLE PRODUCTS SEPARATE ACCOUNTS In recent months several issues in the mutual fund and variable insurance industries have come under the scrutiny of federal and state regulators. Travelers Life & Annuity and some of its affiliates have received requests for information from various government regulators regarding market timing, late trading, revenue sharing, and other mutual fund and variable product issues in connection with various investigations. The Accounts have been informed that Travelers Life & Annuity and its affiliates are responding to those information requests and cooperating with the regulators but are not in a position to predict the outcome of these requests and investigations. As always, thank you for your continued confidence in our stewardship of your assets. We look forward to helping you continue to meet your financial goals. Sincerely, /s/ R. Jay Gerken R. Jay Gerken, CFA Chairman, President and Chief Executive Officer JULY 16, 2004 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. Please note that an investor cannot invest directly in an index. - -------- (i) 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. (ii) Government bonds are guaranteed by the full faith and credit of the United States government as to timely payment of principal and interest. Government bonds do fluctuate in price. (iii) Based upon Citigroup total rate of return indices that reflect the performance for each respective category of fixed-income securities over the six months ending June 30, 2004. (iv) Source: June 2004 Consumer Confidence Index, The Conference Board. -2- THE TRAVELERS GROWTH AND INCOME STOCK ACCOUNT FOR VARIABLE ANNUITIES STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED) JUNE 30, 2004 ASSETS: Investment securities, at fair value (cost $472,753,824) ..... $515,800,591 Cash ......................................................... 5,290 Receivables: Dividends .................................................. 498,084 Investment securities sold ................................. 7,373 Purchase payments and transfers from other funding options . 91,682 Variation on futures margin ................................ 57,500 Other assets ................................................. 25,493 ------------ Total Assets ............................................. 516,486,013 ------------ LIABILITIES: Payables: Investment securities purchased ............................ 1,002,444 Contract surrenders and transfers to other funding options . 82,252 Investment management and advisory fees .................... 45,326 Insurance charges .......................................... 82,567 Accrued liabilities .......................................... 562 ------------ Total Liabilities ........................................ 1,213,151 ------------ NET ASSETS: $515,272,862 ============ See Notes to Financial Statements -3- THE TRAVELERS GROWTH AND INCOME STOCK ACCOUNT FOR VARIABLE ANNUITIES STATEMENT OF OPERATIONS (UNAUDITED) FOR THE SIX MONTHS ENDED JUNE 30, 2004 INVESTMENT INCOME: Dividends ......................................................... $ 3,793,916 Interest .......................................................... 65,645 ------------ Total income .................................................... $ 3,859,561 EXPENSES: Investment management and advisory fees ........................... 1,665,829 Insurance charges ................................................. 3,040,560 ------------ Total expenses .................................................. 4,706,389 ------------- Net investment income (loss) .................................. (846,828) ------------- REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED GAIN (LOSS) ON INVESTMENT SECURITIES: Realized gain (loss) from investment security transactions: Proceeds from investment securities sold ........................ 172,424,444 Cost of investment securities sold .............................. 157,571,431 ------------ Net realized gain (loss) ...................................... 14,853,013 Change in unrealized gain (loss) on investment securities: Unrealized gain (loss) at June 30, 2004 ........................... 43,046,767 Unrealized gain (loss) at December 31, 2003 ....................... 39,489,069 ------------ Net change in unrealized gain (loss) for the period ............. 3,557,698 ------------- Net realized gain (loss) and change in unrealized gain (loss) . 18,410,711 ------------- Net increase (decrease) in net assets resulting from operations ..... $ 17,563,883 =============
See Notes to Financial Statements -4- THE TRAVELERS GROWTH AND INCOME STOCK ACCOUNT FOR VARIABLE ANNUITIES STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS ENDED YEAR ENDED JUNE 30, DECEMBER 31, 2004 2003 ---- ---- (UNAUDITED) OPERATIONS: Net investment income (loss) ............................................. $ (846,828) $ (633,004) Net realized gain (loss) from investment security transactions ........... 14,853,013 (11,393,690) Net change in unrealized gain (loss) on investment securities ............ 3,557,698 123,366,058 ------------- ------------- Net increase (decrease) in net assets resulting from operations ........ 17,563,883 111,339,364 ------------- ------------- UNIT TRANSACTIONS: Participant purchase payments (applicable to 483,716 and 1,271,619 units, respectively) .............. 8,399,276 18,530,423 Participant transfers from other funding options (applicable to 301,168 and 754,088 units, respectively) ................ 5,264,112 11,209,365 Administrative charges (applicable to 12,100 and 29,037 units, respectively) .................. (212,033) (458,191) Contract surrenders (applicable to 1,350,058 and 3,418,518 units, respectively) ............ (23,604,658) (50,866,631) Participant transfers to other funding options (applicable to 505,662 and 1,576,742 units, respectively) .............. (8,808,368) (22,824,923) Other payments to participants (applicable to 74,276 and 197,838 units, respectively) ................. (1,346,870) (2,992,921) ------------- ------------- Net increase (decrease) in net assets resulting from unit transactions (20,308,541) (47,402,878) ------------- ------------- Net increase (decrease) in net assets ................................ (2,744,658) 63,936,486 NET ASSETS: Beginning of period ...................................................... 518,017,520 454,081,034 ------------- ------------- End of period ............................................................ $ 515,272,862 $ 518,017,520 ============= =============
See Notes to Financial Statements -5- NOTES TO FINANCIAL STATEMENTS (UNAUDITED) 1. SIGNIFICANT ACCOUNTING POLICIES The Travelers Growth and Income Stock Account for Variable Annuities ("Account GIS") is a separate account of The Travelers Insurance Company ("The Company"), an indirect wholly owned subsidiary of Citigroup Inc., and is available for funding Universal Annuity contracts issued by The Company. Account GIS is registered under the Investment Company Act of 1940, as amended, as a diversified, open-end management investment company. The following is a summary of significant accounting policies consistently followed by Account GIS in the preparation of its financial statements. SECURITY VALUATION. Investments in securities traded on a national securities exchange are valued at the 4:00 p.m. Eastern Standard Time price of such exchanges; securities traded on the over-the-counter market and listed securities with no reported sales are valued at the mean between the last reported bid and asked prices or on the basis of quotations received from a reputable broker or other recognized source. Short-term investments are reported at fair value based on quoted market prices. Short-term investments, for which there is no reliable quoted market price, are recorded at amortized cost which approximates fair value. SECURITY TRANSACTIONS. Security transactions are accounted for on the trade date. Dividend income is recorded on the ex-dividend date. Interest income is recorded on the accrual basis. Premiums and discounts are amortized to interest income utilizing the constant yield method. FUTURES CONTRACTS. Account GIS may use stock index futures contracts as a substitute for the purchase or sale of individual securities. When Account GIS enters into a futures contract, it agrees to buy or sell a specified index of stocks at a future time for a fixed price, unless the contract is closed prior to expiration. Account GIS is obligated to deposit with a broker an "initial margin" equivalent to a percentage of the face, or notional value of the contract. It is Account GIS's practice to hold cash and cash equivalents in an amount at least equal to the notional value of outstanding purchased futures contracts, less the initial margin. Cash and cash equivalents include cash on hand, securities segregated under federal and brokerage regulations, and short-term highly liquid investments with maturities generally three months or less when purchased. Generally, futures contracts are closed prior to expiration. Futures contracts purchased by Account GIS are priced and settled daily; accordingly, changes in daily prices are recorded as realized gains or losses and no asset is recorded in the Statement of Investments. Therefore, when Account GIS holds open futures contracts, it assumes a market risk generally equivalent to the underlying market risk of change in the value of the specified indexes associated with the futures contract. OPTIONS. Account GIS may purchase index or individual equity put or call options, thereby obtaining the right to sell or buy a fixed number of shares of the underlying asset at the stated price on or before the stated expiration date. Account GIS may sell the options before expiration. Options held by Account GIS are listed on either national securities exchanges or on over-the-counter markets and are short-term contracts with a duration of less than nine months. The market value of the options will be based on the 4:00 p.m. Eastern Standard Time price of the respective exchange, or in the absence of such price, the latest bid quotation. There were no put or call options in Account GIS at June 30, 2004. REPURCHASE AGREEMENTS. When Account GIS enters into a repurchase agreement (a purchase of securities whereby the seller agrees to repurchase the securities at a mutually agreed upon date and price), the repurchase price of the securities will generally equal the amount paid by Account GIS plus a negotiated interest amount. The seller under the repurchase agreement will be required to provide to Account GIS securities (collateral) whose market value, including accrued interest, will be at least equal to 102% of the repurchase price. Account GIS monitors the value of collateral on a daily basis. Repurchase agreements will be limited to transactions with national banks and reporting broker dealers believed to present minimal credit risks. Account GIS's custodian will take actual or constructive receipt of all securities underlying repurchase agreements until such agreements expire. There were no repurchase agreements in Account GIS at June 30, 2004. -6- NOTES TO FINANCIAL STATEMENTS (UNAUDITED) - CONTINUED FEDERAL INCOME TAXES. The operations of Account GIS form a part of the total operations of The Company and are not taxed separately. The Company is taxed as a life insurance company under the Internal Revenue Code of 1986, as amended (the "Code"). Under existing federal income tax law, no taxes are payable on the investment income and capital gains of Account GIS. Account GIS is not taxed as a "regulated investment company" under Subchapter M of the Code. OTHER. The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. 2. INVESTMENTS The aggregate costs of purchases and proceeds from sales of investments (other than short-term securities), were $146,321,873 and $169,201,748 respectively; the costs of purchases and proceeds from sales of direct and indirect U.S. government securities were $1,890,587 and $2,248,970, respectively, for the six months ended June 30, 2004. Realized gains and losses from investment security transactions are reported on an identified cost basis. At June 30, 2004, Account GIS held 50 open S&P 500 Stock Index futures contracts expiring in September, 2004. The underlying face value, or notional value, of these contracts at June 30, 2004 amounted to $14,255,000. In connection with these contracts, short-term investments with a par value of $1,400,000 had been pledged as margin deposits. Net realized gains resulting from futures contracts were $314,023 and $3,542,973 for the six months ended June 30, 2004 and the year ended December 31, 2003, respectively. These gains (losses) are included in the net realized gain (loss) from investment security transactions on both the Statement of Operations and the Statement of Changes in Net Assets. The cash settlement for June 30, 2004 is shown on the Statement of Assets and Liabilities as a receivable for variation on futures margin. 3. CONTRACT CHARGES Investment management and advisory fees are calculated daily at annual rates which start at 0.65% and decrease, as net assets increase, to 0.40% of Account GIS's average net assets. These fees are paid to Travelers Asset Management International Company, LLC ("TAMIC"), an indirect wholly owned subsidiary of Citigroup Inc. Pursuant to a subadvisory agreement between TAMIC and The Travelers Investment Management Company ("TIMCO"), an indirect wholly owned subsidiary of Citigroup Inc., TAMIC pays TIMCO a subadvisory fee calculated daily at annual rates which start at 0.45% and decrease, as net assets increase, to 0.20% of Account GIS's average net assets. Insurance charges are paid for the mortality and expense risks assumed by The Company. Each business day, The Company deducts a mortality and expense risk charge which is reflected in the calculation of accumulation and annuity unit values. This charge equals, on an annual basis, 1.0017% for contracts issued prior to May 16, 1983 and 1.25% on an annual basis for contracts issued on or after May 16, 1983. For certain contracts in the accumulation phase, a semi-annual charge of $15 (prorated for partial years) is deducted from participant account balances and paid to The Company to cover administrative charges. On contracts issued prior to May 16, 1983, The Company retained from Account GIS sales charges of $5,086 and $12,494 for the six months ended June 30, 2004 and the year ended December 31, 2003, respectively. The Company generally assesses a 5% contingent deferred sales charge if a participant's purchase payment is surrendered within five years of its payment date. Contract surrender payments are net of contingent deferred sales charges of $133,831 and $406,883 for the six months ended June 30, 2004 and the year ended December 31, 2003, respectively. -7- NOTES TO FINANCIAL STATEMENTS (UNAUDITED) - CONTINUED 4. NET ASSETS HELD ON BEHALF OF AN AFFILIATE Approximately $12,687,000 and $12,382,000 of the net assets of Account GIS were held on behalf of an affiliate of The Company as of June 30, 2004 and December 31, 2003, respectively. Transactions with this affiliate during the six months ended June 30, 2004 and the year ended December 31, 2003, were comprised of participant purchase payments of approximately $1,000 and $32,000 and contract surrenders of approximately $153,000 and $534,000, respectively. 5. NET CONTRACT OWNERS' EQUITY
JUNE 30, 2004 ------------------------------------------------ UNIT NET UNITS VALUE ASSETS ----- ----- ------ Accumulation phase of contracts issued prior to May 16, 1983 ............... 7,686,406 $18.561 $ 142,676,854 Annuity phase of contracts issued prior to May 16, 1983 .................... 166,125 18.561 3,083,656 Accumulation phase of contracts issued on or after May 16, 1983 ............ 20,920,150 17.610 368,428,317 Annuity phase of contracts issued on or after May 16, 1983 ................. 61,554 17.610 1,084,035 ------------- Net Contract Owners' Equity ............................................................................ $ 515,272,862 =============
-8- NOTES TO FINANCIAL STATEMENTS (UNAUDITED) - CONTINUED 6. SUPPLEMENTARY INFORMATION (Selected data for a unit outstanding throughout each period.)
Contracts issued prior to May 16, 1983 SIX MONTHS ENDED FOR THE YEARS ENDED DECEMBER 31, JUNE 30, (DERIVED FROM AUDITED FINANCIAL INFORMATION) -------- ------------------------------------------------------- 2004 2003 2002 2001 2000 1999 ---- ---- ---- ---- ---- ---- SELECTED PER UNIT DATA: Total investment income ................................... $ .136 $ .264 $ .240 $ .266 $ .242 $ .267 Operating expenses ........................................ .150 .256 .261 .311 .376 .347 ------- ------- ------- ------- ------- ------- Net investment income (loss) .............................. (.014) .008 (.021) (.045) (.134) (.080) Unit value at beginning of period ......................... 17.926 14.172 18.064 21.418 24.427 20.017 Net realized and change in unrealized gains (losses) ...... .649 3.746 (3.871) (3.309) (2.875) 4.490 ------- ------- ------- ------- ------- ------- Unit value at end of period ............................... $18.561 $17.926 $14.172 $18.064 $21.418 $24.427 ======= ======= ======= ======= ======= ======= SIGNIFICANT RATIOS AND ADDITIONAL DATA: Net increase (decrease) in unit value ..................... $ .64 $ 3.75 $ (3.89) $ (3.35) $ (3.01) $ 4.41 Ratio of operating expenses to average net assets ......... 1.65%* 1.65% 1.64% 1.63% 1.60% 1.60% Ratio of net investment income (loss) to average net assets (0.15)%* 0.06% (0.12)% (0.24)% (0.57)% (0.37)% Number of units outstanding at end of period (thousands) .. 7,852 8,139 9,088 10,329 11,413 12,646 Portfolio turnover rate ................................... 29% 68% 54% 32% 52% 47%
Contracts issued on or after May 16, 1983 SIX MONTHS ENDED FOR THE YEARS ENDED DECEMBER 31, JUNE 30, (DERIVED FROM AUDITED FINANCIAL INFORMATION) -------- ------------------------------------------------------- 2004 2003 2002 2001 2000 1999 ---- ---- ---- ---- ---- ---- SELECTED PER UNIT DATA: Total investment income ................................... $ .129 $ .251 $ .229 $ .254 $ .232 $ .256 Operating expenses ........................................ .164 .281 .287 .343 .416 .385 ------- ------- ------- ------- ------- ------- Net investment income (loss) .............................. (.035) (.030) (.058) (.089) (.184) (.129) Unit value at beginning of period ......................... 17.028 13.496 17.245 20.498 23.436 19.253 Net realized and change in unrealized gains (losses) ...... .617 3.562 (3.691) (3.164) (2.754) 4.312 ------- ------- ------- ------- ------- ------- Unit value at end of period ............................... $17.610 $17.028 $13.496 $17.245 $20.498 $23.436 ======= ======= ======= ======= ======= ======= SIGNIFICANT RATIOS AND ADDITIONAL DATA: Net increase (decrease) in unit value ..................... $ .58 $ 3.53 $ (3.75) $ (3.25) $ (2.94) $ 4.18 Ratio of operating expenses to average net assets ......... 1.90%* 1.90% 1.89% 1.88% 1.85% 1.85% Ratio of net investment income to average net assets ...... (0.40)%* (0.19)% (0.37)% (0.49)% (0.82)% (0.62)% Number of units outstanding at end of period (thousands) .. 20,982 21,853 24,100 27,559 29,879 32,648 Portfolio turnover rate ................................... 29% 68% 54% 32% 52% 47%
* Annualized -9- THE TRAVELERS GROWTH AND INCOME STOCK ACCOUNT FOR VARIABLE ANNUITIES STATEMENT OF INVESTMENTS (UNAUDITED) JUNE 30, 2004 NO. OF FAIR SHARES VALUE ---------- ------------- COMMON STOCK (96.6%) AEROSPACE (0.8%) Boeing Co. 28,246 $ 1,443,088 General Dynamics 25,345 2,516,759 ------------- 3,959,847 ------------- AUTOMOTIVE (1.7%) Ford Motor Co. 154,802 2,422,651 General Motors Corp. 63,120 2,940,761 Harley-Davidson 58,569 3,627,764 ------------- 8,991,176 ------------- BANKING (7.8%) Bank of America Corp. 125,948 10,657,720 BANK ONE Corp. 60,409 3,080,859 Capital One Financial Corp. 41,225 2,818,965 First Horizon National 194 8,821 J.P. Morgan Chase & Co. 136,220 5,281,249 KeyCorp 20,766 620,696 Marshall & Ilsley Corp. 17,756 694,082 MBNA Corp. 107,735 2,778,486 National City Corp. 64,375 2,253,769 U.S. Bancorp 49,664 1,368,740 Wachovia Corp. 102,940 4,580,830 Washington Mutual, Inc. 12,899 498,417 Wells Fargo & Co. 95,736 5,478,971 ------------- 40,121,605 ------------- BEVERAGE (2.7%) Anheuser Busch Cos. 10,621 573,534 Brown-Forman Corp. 12,247 591,163 Coca-Cola Co. 115,700 5,840,536 Coca-Cola Enterprises Inc. 63,679 1,846,054 PepsiCo. Inc. 95,024 5,119,893 ------------- 13,971,180 ------------- BROKERAGE (2.8%) Bear Stearns Cos. 35,041 2,954,307 Goldman Sachs Group, Inc. 39,880 3,755,101 Lehman Brothers Holding, Inc. 29,158 2,194,140 Merrill Lynch & Co. 37,104 2,002,874 Morgan Stanley 64,849 3,422,082 ------------- 14,328,504 ------------- BUILDING MATERIALS (0.2%) Masco Corp. 34,802 1,085,126 ------------- CAPITAL GOODS (1.8%) Danaher Corp. 66,278 3,436,514 Deere & Co. 48,589 3,408,032 Dover Corp. 37,305 1,570,541 Eaton Corp. 9,593 621,051 Nucor Corp. 6,275 481,669 ------------- 9,517,807 ------------- CHEMICALS (1.2%) Dow Chemical Co. 54,755 2,228,529 E.I. duPont de Nemours & Co. 20,432 907,589 Ecolab Inc. 35,126 1,113,494 Monsanto Co. 53,651 2,065,564 ------------- 6,315,176 ------------- CONGLOMERATES (3.9%) General Electric Co. 429,132 13,903,877 Honeywell International, Inc. 72,047 2,639,082 3M Co. 6,575 591,816 Tyco International Ltd. 98,765 3,273,072 ------------- 20,407,847 ------------- CONSTRUCTION MACHINERY (0.6%) Ingersoll-Rand Co. 45,245 3,090,686 ------------- CONSUMER (2.5%) Avery Dennison Corp. 12,646 809,470 Ball Corp. 10,663 768,269 Black & Decker Corp. 13,763 855,095 Colgate-Palmolive Co. 15,893 928,946 Kimberly Clark Corp. 23,800 1,567,944 Procter & Gamble Co. 123,140 6,703,742 Sealed Air (A) 26,426 1,407,713 ------------- 13,041,179 ------------- DEFENSE (0.7%) Lockheed Martin Corp. 29,363 1,529,225 Northrop Grumman Corp. 38,210 2,051,877 ------------- 3,581,102 ------------- ENTERTAINMENT (3.6%) Carnival Corp. 87,776 4,125,472 Electronic Arts (A) 41,081 2,238,298 Fox Entertainment Group (A) 55,501 1,481,877 Harrah's Entertainment 51,429 2,782,309 Viacom, Inc. 115,215 4,115,480 Walt Disney Co. 162,229 4,135,217 ------------- 18,878,653 ------------- FINANCE (1.8%) American Express Co. 85,707 4,403,626 Countrywide Financials 40,122 2,818,571 Principal Financial Group 29,244 1,017,106 Providian Financial (A) 60,475 887,168 ------------- 9,126,471 ------------- -10- THE TRAVELERS GROWTH AND INCOME STOCK ACCOUNT FOR VARIABLE ANNUITIES STATEMENT OF INVESTMENTS (UNAUDITED) - CONTINUED JUNE 30, 2004 NO. OF FAIR SHARES VALUE ---------- ------------- FOOD (1.9%) Archer-Daniels-Midland Co. 114,841 $ 1,927,032 Hormel Foods 16,653 517,908 Kellogg Co. 9,815 410,758 McDonald's Corp. 97,575 2,536,950 Sara Lee Corp. 99,935 2,297,506 Yum Brands 57,956 2,157,122 ------------- 9,847,276 ------------- HEALTHCARE (3.4%) Abbott Laboratories 33,049 1,347,077 Aetna Inc. 36,590 3,110,150 Anthem Inc. (A) 24,791 2,220,282 Becton, Dickinson 53,234 2,757,521 Cardinal Health 8,009 561,030 Caremark Rx (A) 29,914 985,367 Genentech Inc. (A) 19,494 1,095,563 Hospira Inc. (A) 4,155 114,678 Medco Health Solutions (A) 13,336 500,100 UnitedHealth Group, Inc. 67,642 4,210,714 Wellpoint Health Networks (A) 6,833 765,364 ------------- 17,667,846 ------------- HOME CONSTRUCTION (0.8%) K.B. HOME 28,876 1,981,760 Pulte Homes 39,471 2,053,676 ------------- 4,035,436 ------------- INDEPENDENT ENERGY (0.4%) Burlington Resources 41,380 1,497,128 Devon Energy 7,732 510,312 ------------- 2,007,440 ------------- INSURANCE (6.6%) Ace Limited 13,961 590,271 AFLAC Inc. 25,283 1,031,799 Allstate Corp. 75,326 3,506,425 Ambac Financial Group 27,267 2,002,488 American International Group 123,922 8,833,160 Aon Corp. 24,699 703,181 Chubb Corp. 44,325 3,022,079 CIGNA 18,183 1,251,172 Hartford Financial Services Group 10,080 692,899 Jefferson-Pilot Corp. 20,482 1,040,486 Lincoln National Corp. 9,198 434,606 Metlife Inc. 71,335 2,557,360 Marsh & McLennan Co. 45,781 2,077,542 MGIC Investment Corp. 17,509 1,328,233 Progressive Corp. 15,227 1,298,863 Prudential Financial 79,956 3,715,555 ------------- 34,086,119 ------------- INTEGRATED ENERGY (4.7%) Anadarko Petroleum 14,254 835,284 ChevronTexaco Corp. 50,699 4,771,283 ConocoPhillips 33,050 2,521,385 Exxon Mobil Corp. 312,960 13,898,554 Marathon Oil 30,723 1,162,558 Occidental Petroleum 18,573 899,119 ------------- 24,088,183 ------------- LODGING (0.5%) Marriott International 45,826 2,285,801 Starwood Hotels & Resorts 8,357 374,811 ------------- 2,660,612 ------------- MEDIA (0.8%) Comcast Corp. (Class A) (A) 41,393 1,162,315 Gannett Co. 22,262 1,888,931 Time Warner, Inc. (A) 70,160 1,233,413 ------------- 4,284,659 ------------- METALS (1.2%) Alcoa, Inc. 103,917 3,432,379 Pactiv Corp. (A) 109,985 2,743,026 ------------- 6,175,405 ------------- NATURAL GAS DISTRIBUTORS (0.8%) KeySpan Corp. 49,109 1,802,300 Kinder Morgan 30,116 1,785,578 National Fuel Gas 12,243 306,075 ------------- 3,893,953 ------------- OIL FIELD (0.8%) Baker Hughes, Inc. 23,166 872,200 Halliburton Co. 19,559 591,855 Schlumberger Ltd. 32,183 2,043,942 Transocean, Inc. (A) 21,164 612,486 ------------- 4,120,483 ------------- PAPER (0.5%) Georgia-Pacific Corp. 17,510 647,520 International Paper 23,579 1,053,981 Weyerhaeuser Co. 9,869 622,931 ------------- 2,324,432 ------------- PHARMACEUTICALS (7.2%) AmerisourceBergen Corp. 16,595 992,049 Amgen, Inc. (A) 61,453 3,353,797 Eli Lilly & Co. 42,149 2,946,637 Forest Labs (A) 33,159 1,877,794 Johnson & Johnson 169,169 9,422,713 Merck & Co., Inc. 72,062 3,422,945 Pfizer, Inc. 395,159 13,546,051 Wyeth 43,843 1,585,363 ------------- 37,147,349 ------------- -11- THE TRAVELERS GROWTH AND INCOME STOCK ACCOUNT FOR VARIABLE ANNUITIES STATEMENT OF INVESTMENTS (UNAUDITED) - CONTINUED JUNE 30, 2004 NO. OF FAIR SHARES VALUE ---------- ------------- RAILROADS (0.1%) Norfolk Southern 16,776 $ 444,900 ------------- REFINING (0.4%) Newmont Mining Corp. 19,375 750,975 Sunoco Inc. 7,678 488,474 Valero Energy 9,090 670,478 ------------- 1,909,927 ------------- RETAILERS (6.4%) AutoZone, Inc. (A) 5,694 456,089 Best Buy 30,613 1,553,304 Big Lots (A) 90,749 1,312,231 Costco Wholesale 21,611 889,509 CVS Corp. 22,419 942,046 Federated Department Stores, Inc. 12,390 608,349 Gap Inc. 33,260 806,555 Home Depot, Inc. 173,235 6,097,872 Jones Apparel Group 6,979 275,531 Limited Brands 46,384 867,381 Lowe's Cos. 18,931 994,824 Staples Inc. 78,821 2,310,638 Target Corp. 94,515 4,014,052 Toys R Us (A) 70,831 1,131,879 Walgreen Co. 54,947 1,989,631 Wal-Mart Stores 162,011 8,547,700 ------------- 32,797,591 ------------- SERVICES (3.5%) Biogen, Inc. (A) 31,020 1,963,101 Boston Scientific Corp. (A) 98,906 4,233,177 Cendant Corp. 51,593 1,262,997 eBay Inc. (A) 37,878 3,484,776 KLA-Tencor Corp. (A) 29,731 1,468,563 Medtronic, Inc. 42,604 2,075,667 Yahoo Inc. (A) 96,850 3,522,919 ------------- 18,011,200 ------------- TECHNOLOGY (15.2%) Advanced Micro Devices (A) 83,937 1,334,598 Analog Devices, Inc. 51,952 2,445,900 Autodesk 33,293 1,424,940 BMC Software Inc. (A) 47,206 873,311 Cisco Systems, Inc. (A) 365,617 8,666,951 Comverse Technology (A) 81,806 1,623,849 Cooper Industries Ltd. 26,887 1,597,357 Corning Inc (A) 66,599 869,783 Dell Inc. (A) 90,478 3,251,327 EMC Corp. (A) 36,361 414,515 Fiserv Inc. (A) 12,204 474,431 Gateway Inc. (A) 115,654 520,443 Hewlett Packard Co. 105,783 2,232,021 Intel Corp. 268,562 7,413,654 International Business Machines Corp. 76,824 6,772,036 ITT Industries 16,129 1,338,707 Jabil Circuit (A) 45,645 1,149,341 Micron Technology (A) 99,869 1,528,994 Microsoft 543,574 15,527,191 Motorola, Inc. 176,580 3,222,585 NCR Corp. (A) 25,799 1,279,372 Nvidia Corp. (A) 58,421 1,197,338 Oracle Corp. (A) 232,747 2,789,473 Pentair, Inc. 51,718 1,739,794 QUALCOMM, Inc. 34,642 2,530,771 Scientific-Atlanta, Inc. 49,543 1,709,234 Texas Instruments, Inc. 93,808 2,268,277 Thomas & Betts Corp. 43,164 1,175,356 VERITAS Software Corp. (A) 53,916 1,496,169 ------------- 78,867,718 ------------- TELECOMMUNICATIONS (2.9%) AT&T Wireless Services (A) 25,309 362,425 BellSouth Corp. 124,064 3,252,958 CenturyTel Inc. 12,604 378,624 NEXTEL Communications (A) 115,869 3,089,647 SBC Communications, Inc. 90,827 2,202,555 Sprint Corp. - PCS Group 111,288 1,958,669 Verizon Communications 97,255 3,519,658 ------------- 14,764,536 ------------- TEXTILE (0.7%) NIKE, Inc. 47,371 3,588,353 ------------- TOBACCO (1.3%) Altria Group 95,539 4,781,727 Fortune Brands 26,616 2,007,645 ------------- 6,789,372 ------------- TRANSPORTATION SERVICES (1.2%) PACCAR Inc. 34,033 1,970,851 United Parcel 53,185 3,997,916 ------------- 5,968,767 ------------- U.S. AGENCY (1.2%) Federal Association National Mortgage 59,606 4,253,484 Federal Home Loan Mortgage Corp. 31,633 2,002,369 ------------- 6,255,853 ------------- -12- THE TRAVELERS GROWTH AND INCOME STOCK ACCOUNT FOR VARIABLE ANNUITIES STATEMENT OF INVESTMENTS (UNAUDITED) - CONTINUED JUNE 30, 2004 NO. OF FAIR SHARES VALUE ---------- ------------- UTILITIES (2.0%) Amern Corp. 62,542 $ 2,001,344 Constellation Energy Group 46,830 1,774,857 Edison International 46,592 1,191,357 Exelon Corp. 56,416 1,878,089 FirstEnergy Corp. 53,191 1,989,875 Public Service Enterprises 13,294 532,159 Southern Co. 27,360 797,544 ------------- 10,165,225 ------------- TOTAL COMMON STOCKS (COST $455,270,975) 498,318,994 ------------- PRINCIPAL AMOUNT ----------- SHORT-TERM INVESTMENTS (3.4%) COMMERCIAL PAPER (3.1%) American Express Credit Corp., Due July 9, 2004 $ 3,000,000 2,998,989 American General Financial Corp., Due July 13, 2004 1,296,000 1,295,378 Clipper Receivables Corp., Due July 1, 2004 5,037,000 5,037,000 DE Funding Corp., Due July 8, 2004 1,705,000 1,704,487 Windmill Funding Corp., Due July 8, 2004 4,899,000 4,897,525 ------------- 15,933,379 ------------- U.S. TREASURY (0.3%) United States of America Treasury 1.00% due August 5, 2004 (B) 1,550,000 1,548,218 ------------- TOTAL SHORT-TERM INVESTMENTS (COST $17,482,849) 17,481,597 ------------- NOTIONAL VALUE ------------ FUTURES CONTRACTS (0.0%) S&P 500 Stock Index, Exp. September, 2004 (C) $ 14,255,000 -- ------------- TOTAL INVESTMENTS (100%) (COST $472,753,824) (D) $ 515,800,591 ============= NOTES (A) Non-income Producing Security. (B) Par value of $1,400,000 pledged to cover margin deposits on futures contracts. (C) As more fully discussed in Note 1 to the financial statements, it is Account GIS's practice to hold cash and cash equivalents (including short-term investments) at least equal to the underlying face value, or notional value, of outstanding purchased futures contracts, less the initial margin. Account GIS uses futures contracts as a substitute for holding individual securities. (D) At June 30, 2004, net unrealized appreciation for all securities was $43,046,767. This consisted of aggregate gross unrealized appreciation for all securities in which there was an excess of fair value over cost of $70,606,671 and aggregate gross unrealized depreciation for all securities in which there was an excess of cost over fair value of $27,559,904. See Notes to Financial Statements -13- THE TRAVELERS QUALITY BOND ACCOUNT FOR VARIABLE ANNUITIES STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED) JUNE 30, 2004 ASSETS: Investment securities, at fair value (cost $102,219,454) ..... $102,611,982 Cash ......................................................... 885 Receivables: Interest ................................................... 1,183,533 Investment securities sold ................................. 988,843 Purchase payments and transfers from other funding options . 22,822 Other assets ................................................. 9,187 ------------ Total Assets ............................................. 104,817,252 ------------ LIABILITIES: Payables: Contract surrenders and transfers to other funding options . 41,654 Investment management and advisory fees .................... 4,627 Insurance charges .......................................... 16,613 Accrued liabilities .......................................... 14,071 ------------ Total Liabilities ........................................ 76,965 ------------ NET ASSETS: $104,740,287 ============ See Notes to Financial Statements -14- THE TRAVELERS QUALITY BOND ACCOUNT FOR VARIABLE ANNUITIES STATEMENT OF OPERATIONS (UNAUDITED) FOR THE SIX MONTHS ENDED JUNE 30, 2004 INVESTMENT INCOME: Interest .......................................................... $ 2,372,343 EXPENSES: Investment management and advisory fees ........................... $ 175,071 Insurance charges ................................................. 639,947 ----------- Total expenses .................................................. 815,018 ----------- Net investment income (loss) .................................. 1,557,325 ----------- REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED GAIN (LOSS) ON INVESTMENT SECURITIES: Realized gain (loss) from investment security transactions: Proceeds from investment securities sold ........................ 56,183,137 Cost of investment securities sold .............................. 56,030,016 ----------- Net realized gain (loss) ...................................... 153,121 Change in unrealized gain (loss) on investment securities: Unrealized gain (loss) at June 30, 2004 ......................... 392,528 Unrealized gain (loss) at December 31, 2003 ..................... 2,333,354 ----------- Net change in unrealized gain (loss) for the period ........... (1,940,826) ----------- Net realized gain (loss) and change in unrealized gain (loss) (1,787,705) ----------- Net increase (decrease) in net assets resulting from operations ..... $ (230,380) ===========
See Notes to Financial Statements -15- THE TRAVELERS QUALITY BOND ACCOUNT FOR VARIABLE ANNUITIES STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS ENDED YEAR ENDED JUNE 30, DECEMBER 31, 2004 2003 ---- ---- (UNAUDITED) OPERATIONS: Net investment income (loss) ........................................... $ 1,557,325 $ 3,870,307 Net realized gain (loss) from investment security transactions ......... 153,121 (3,387,271) Net change in unrealized gain (loss) on investment securities .......... (1,940,826) 9,169,643 ------------ ------------ Net increase (decrease) in net assets resulting from operations ...... (230,380) 9,652,679 ------------ ------------ UNIT TRANSACTIONS: Participant purchase payments (applicable to 368,854 and 747,578 units, respectively) .............. 2,567,478 5,016,359 Participant transfers from other funding options (applicable to 299,500 and 2,091,858 units, respectively) ............ 2,084,536 14,023,583 Administrative charges (applicable to 5,733 and 12,788 units, respectively) ................. (39,762) (88,426) Contract surrenders (applicable to 878,118 and 2,007,854 units, respectively) ............ (6,171,317) (13,546,840) Participant transfers to other funding options (applicable to 615,768 and 2,177,370 units, respectively) ............ (4,286,118) (14,621,732) Other payments to participants (applicable to 90,205 and 169,426 units, respectively) ............... (637,795) (1,169,671) ------------ ------------ Net increase (decrease) in net assets resulting from unit transactions (6,482,978) (10,386,727) ------------ ------------ Net increase (decrease) in net assets .............................. (6,713,358) (734,048) NET ASSETS: Beginning of period .................................................... 111,453,645 112,187,693 ------------ ------------ End of period .......................................................... $104,740,287 $111,453,645 ============ ============
See Notes to Financial Statements -16- NOTES TO FINANCIAL STATEMENTS (UNAUDITED) 1. SIGNIFICANT ACCOUNTING POLICIES The Travelers Quality Bond Account for Variable Annuities ("Account QB") is a separate account of The Travelers Insurance Company ("The Company"), an indirect wholly owned subsidiary of Citigroup Inc., and is available for funding Universal Annuity contracts issued by The Company. Account QB is registered under the Investment Company Act of 1940, as amended, as a diversified, open-end management investment company. The following is a summary of significant accounting policies consistently followed by Account QB in the preparation of its financial statements. SECURITY VALUATION. Investments in securities traded on a national securities exchange are valued at the 4:00 p.m. Eastern Standard Time price of such exchanges; securities traded on the over-the-counter market and listed securities with no reported sales are valued at the mean between the last-reported bid and asked prices or on the basis of quotations received from a reputable broker or other recognized source. When market quotations are not considered to be readily available for long-term corporate bonds and notes, such investments are generally stated at fair value on the basis of valuations furnished by a pricing service. These valuations are determined for normal institutional-size trading units of such securities using methods based on market transactions for comparable securities and various relationships between securities, which are generally recognized by institutional traders. Securities, including restricted securities, for which pricing services are not readily available, are valued by management at prices which it deems, in good faith, to be fair value. Short-term investments are reported at fair value based on quoted market prices. Short-term investments, for which there is no reliable quoted market price, are recorded at amortized cost, which approximates fair value. SECURITY TRANSACTIONS. Security transactions are accounted for on the trade date. Interest income is recorded on the accrual basis. Premiums and discounts are amortized to interest income utilizing the constant yield method. FUTURES CONTRACTS. Account QB may use interest rate futures contracts as a substitute for the purchase or sale of individual securities. When Account QB enters into a futures contract, it agrees to buy or sell specified debt securities at a future time for a fixed price, unless the contract is closed prior to expiration. Account QB is obligated to deposit with a broker an "initial margin" equivalent to a percentage of the face, or notional value of the contract. It is Account QB's practice to hold cash and cash equivalents in an amount at least equal to the notional value of outstanding purchased futures contracts, less the initial margin. Cash and cash equivalents include cash on hand, securities segregated under federal and brokerage regulations, and short-term highly liquid investments with maturities generally three months or less when purchased. Generally, futures contracts are closed prior to expiration. Futures contracts purchased by Account QB are priced and settled daily; accordingly, changes in daily prices are recorded as realized gains or losses and no asset is recorded in the Statement of Investments. Therefore, when Account QB holds open futures contracts, it assumes a market risk generally equivalent to the underlying market risk of change in the value of the debt securities associated with the futures contract. REPURCHASE AGREEMENTS. When Account QB enters into a repurchase agreement (a purchase of securities whereby the seller agrees to repurchase the securities at a mutually agreed upon date and price), the repurchase price of the securities will generally equal the amount paid by Account QB plus a negotiated interest amount. The seller under the repurchase agreement will be required to provide to Account QB securities (collateral) whose market value, including accrued interest, will be at least equal to 102% of the repurchase price. Account QB monitors the value of collateral on a daily basis. Repurchase agreements will be limited to transactions with national banks and reporting broker dealers believed to present minimal credit risks. Account QB's custodian will take actual or constructive receipt of all securities underlying repurchase agreements until such agreements expire. There were no repurchase agreements in Account QB at June 30, 2004. -17- NOTES TO FINANCIAL STATEMENTS (UNAUDITED) - CONTINUED FEDERAL INCOME TAXES. The operations of Account QB form a part of the total operations of The Company and are not taxed separately. The Company is taxed as a life insurance company under the Internal Revenue Code of 1986, as amended (the "Code"). Under existing federal income tax law, no taxes are payable on the investment income and capital gains of Account QB. Account QB is not taxed as a "regulated investment company" under Subchapter M of the Code. OTHER. The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. 2. INVESTMENTS The aggregate costs of purchases and proceeds from sales of investments (other than short-term securities) were $15,322,770 and $18,422,174, respectively; the costs of purchases and proceeds from sales of direct and indirect U.S. government securities were $39,341,583 and $37,760,964, respectively, for the six months ended June 30, 2004. Realized gains and losses from investment security transactions are reported on an identified cost basis. 3. CONTRACT CHARGES Investment management and advisory fees are calculated daily at an annual rate of 0.3233% of Account QB's average net assets. These fees are paid to Travelers Asset Management International Company, LLC, an indirect wholly owned subsidiary of Citigroup Inc. Insurance charges are paid for the mortality and expense risks assumed by The Company. Each business day, The Company deducts a mortality and expense risk charge which is reflected in the calculation of accumulation and annuity unit values. This charge equals, on an annual basis, 1.0017% for contracts issued prior to May 16, 1983 and 1.25% on an annual basis for contracts issued on or after May 16, 1983. For certain contracts in the accumulation phase, a semi-annual charge of $15 (prorated for partial years) is deducted from participant account balances and paid to The Company to cover administrative charges. On contracts issued prior to May 16, 1983, The Company retained from Account QB sales charges of $1,843 and $4,296 for the six months ended June 30, 2004 and the year ended December 31, 2003, respectively. The Company generally assesses a 5% contingent deferred sales charge if a participant's purchase payment is surrendered within five years of its payment date. Contract surrender payments are net of contingent deferred sales charges of $26,244 and $58,765 for the six months ended June 30, 2004 and the year ended December 31, 2003, respectively. -18- NOTES TO FINANCIAL STATEMENTS (UNAUDITED) - CONTINUED 4. NET ASSETS HELD ON BEHALF OF AN AFFILIATE Approximately $102,000 and $115,000 of the net assets of Account QB were held on behalf of an affiliate of The Company as of June 30, 2004 and December 31, 2003, respectively. Transactions with this affiliate during the six months ended June 30, 2004 and the year ended December 31, 2003, were comprised of participant purchase payments of approximately $4,000 and $71,000 and contract surrenders of approximately $17,000 and $98,000, respectively. 5. NET CONTRACT OWNERS' EQUITY
JUNE 30, 2004 -------------------------------------------------- UNIT NET UNITS VALUE ASSETS ----- ----- ------ Accumulation phase of contracts issued prior to May 16, 1983 ........... 3,921,897 $ 7.271 $ 28,519,545 Annuity phase of contracts issued prior to May 16, 1983 ................ 38,389 7.271 279,160 Accumulation phase of contracts issued on or after May 16, 1983 ........ 11,000,390 6.898 75,895,469 Annuity phase of contracts issued on or after May 16, 1983 ............. 6,684 6.898 46,113 ------------ Net Contract Owners' Equity ........................................................................... $104,740,287 ============
-19- NOTES TO FINANCIAL STATEMENTS (UNAUDITED) - CONTINUED 6. SUPPLEMENTARY INFORMATION (Selected data for a unit outstanding throughout each period.)
Contracts issued prior to May 16, 1983 SIX MONTHS ENDED FOR THE YEARS ENDED DECEMBER 31, JUNE 30, (DERIVED FROM AUDITED FINANCIAL INFORMATION) -------- ------------------------------------------------------- 2004 2003 2002 2001 2000 1999 ---- ---- ---- ---- ---- ---- SELECTED PER UNIT DATA: Total investment income ................................... $ .159 $ .345 $ .381 $ .421 $ .446 $ .393 Operating expenses ........................................ .048 .093 .086 .089 .081 .080 ------- ------- ------- ------- ------- ------- Net investment income (loss) .............................. .111 .252 .295 .332 .365 .313 Unit value at beginning of period ......................... 7.281 6.674 6.608 6.335 6.055 5.994 Net realized and change in unrealized gains (losses) ...... (.121) .355 (.229) (.059) (.085) (.252) ------- ------- ------- ------- ------- ------- Unit value at end of period ............................... $ 7.271 $ 7.281 $ 6.674 $ 6.608 $ 6.335 $ 6.055 ======= ======= ======= ======= ======= ======= SIFICANT RATIOS AND ADDITIONAL DATA: Net increase (decrease) in unit value ..................... $ (.01) $ .61 $ .07 $ .27 $ .28 $ .06 Ratio of operating expenses to average net assets ......... 1.33% * 1.33% 1.33% 1.33% 1.33% 1.33% Ratio of net investment income (loss) to average net assets 3.05% * 3.58% 4.56% 4.99% 5.93% 5.22% Number of units outstanding at end of period (thousands) .. 3,960 4,207 4,684 5,194 5,491 6,224 Portfolio turnover rate ................................... 53% 139% 113% 166% 105% 340%
Contracts issued on or after May 16, 1983 SIX MONTHS ENDED FOR THE YEARS ENDED DECEMBER 31, JUNE 30, (DERIVED FROM AUDITED FINANCIAL INFORMATION) -------- ------------------------------------------------------- 2004 2003 2002 2001 2000 1999 ---- ---- ---- ---- ---- ---- SELECTED PER UNIT DATA: Total investment income ................................... $ .151 $ .328 $ .363 $ .402 $ .427 $ .378 Operating expenses ........................................ .055 .105 .097 .101 .092 .091 ------- ------- ------- ------- ------- ------- Net investment income (loss) .............................. .096 .223 .266 .301 .335 .287 Unit value at beginning of period ......................... 6.917 6.356 6.309 6.063 5.810 5.765 Net realized and change in unrealized gains (losses) ...... (.115) .338 (.219) (.055) (.082) (.242) ------- ------- ------- ------- ------- ------- Unit value at end of period ............................... $ 6.898 $ 6.917 $ 6.356 $ 6.309 $ 6.063 $ 5.810 ======= ======= ======= ======= ======= ======= SIGNIFICANT RATIOS AND ADDITIONAL DATA: Net increase (decrease) in unit value ..................... $ (.02) $ .56 $ .05 $ .25 $ .25 $ .04 Ratio of operating expenses to average net assets ......... 1.57% * 1.57% 1.57% 1.57% 1.57% 1.57% Ratio of net investment income (loss) to average net assets 2.80% * 3.33% 4.31% 4.74% 5.69% 4.97% Number of units outstanding at end of period (thousands) .. 11,007 11,682 12,733 15,116 14,045 17,412 Portfolio turnover rate ................................... 53% 139% 113% 166% 105% 340%
* Annualized -20- THE TRAVELERS QUALITY BOND ACCOUNT FOR VARIABLE ANNUITIES STATEMENT OF INVESTMENTS (UNAUDITED) JUNE 30, 2004
PRINCIPAL FAIR AMOUNT VALUE ------------ ------------ BONDS (76.4%) AIRLINES (0.5%) Delta Airlines Inc., 9.25% Debentures, 2007..................................... $ 675,233 $ 476,039 ------------ ASSET BACKED SECURITIES (6.0%) CA Infrastructure, 6.42% Debentures, 2008....................................... 786,719 821,458 Chase Funding Mortgage Loan Asset Backed Certificate, 5.83% Debentures, 2032.... 500,000 520,557 Daimler Chrysler Auto, 4.63% Debentures, 2006................................... 1,324,763 1,343,972 Discover Card Mt, 6.05% Debentures, 2008........................................ 1,100,000 1,155,392 Ford Credit Auto Owner Trust, 4.75% Debentures, 2006............................ 1,400,000 1,431,468 Toyota Auto Recovery Owner Trust, 2.65% Debentures, 2006........................ 906,113 909,456 ------------ 6,182,303 ------------ AUTOMOTIVE (1.7%) Daimler Chrysler NA Holdings, 4.05% Debentures, 2008............................ 1,130,000 1,108,983 Lear Corp., 7.96% Debentures, 2005.............................................. 600,000 625,763 ------------ 1,734,746 ------------ BANKING (4.4%) ABN AMRO Holding ADS, 1.25% Debentures, 2007.................................... 920,000 921,708 Capital One Financial, 5.00% Debentures, 2009................................... 520,000 522,053 Credit Suisse First Boston Corp., 6.13% Debentures, 2011........................ 300,000 316,226 Fleet Financial Group, 7.13% Debentures, 2006................................... 1,250,000 1,341,226 Huntington National Bank, 4.65% Debentures, 2009................................ 400,000 401,502 U.S. Bancorp NA MN, 2.87% Debentures, 2007...................................... 1,000,000 983,467 ------------ 4,486,182 ------------ BROKERAGE (3.7%) Goldman Sachs Group Inc., 4.75% Debentures, 2013................................ 1,100,000 1,035,199 Lehman Brothers Holdings, Inc., 4.80% Debentures, 2014.......................... 700,000 655,709 Merrill Lynch & Co. Inc., 3.38% Debentures, 2007................................ 700,000 693,500 Morgan Stanley, 4.75% Debentures, 2014.......................................... 900,000 831,938 Morgan Stanley, 6.60% Debentures, 2012.......................................... 500,000 539,102 ------------ 3,755,448 ------------ COLLATERALIZED MORTGAGE OBLIGATIONS (4.3%) Credit Suisse First Boston Corp., Debentures, 2036.............................. 1,000,000 971,079 LB UBS Commercial Mortgage Trust, 3.09% Debentures, 2027........................ 1,000,000 961,812 LB UBS Commercial Mortgage Trust, 4.57% Debentures, 3031........................ 1,000,000 945,106 LB UBS Commercial Mortgage Trust, 4.85% Debentures, 3031........................ 670,000 657,556 Wachovia Bank Commercial Mortgage, 4.96% Debentures, 2035....................... 900,000 901,320 ------------ 4,436,873 ------------ CONGLOMERATES (2.0%) General Electric Capital Corp., 5.45% Debentures, 2013.......................... 1,000,000 1,015,621 Tyco International, 6.13% Debentures, 2008...................................... 1,000,000 1,064,887 ------------ 2,080,508 ------------
-21- THE TRAVELERS QUALITY BOND ACCOUNT FOR VARIABLE ANNUITIES STATEMENT OF INVESTMENTS (UNAUDITED) - CONTINUED JUNE 30, 2004
PRINCIPAL FAIR AMOUNT VALUE ------------ ------------ CONSUMER (0.3%) Sealed Air, 5.63% Debentures, 2013 (A).......................................... $ 300,000 $ 296,864 ------------ DEFENSE (2.0%) Northrop Grumman Corp., 8.63% Debentures, 2004.................................. 2,000,000 2,036,442 ------------ FINANCE (4.3%) Countrywide Home Loan, 4.00% Debentures, 2011................................... 610,000 569,768 Ford Motor Credit Co., 6.88% Debentures, 2006................................... 1,000,000 1,049,288 Ford Motor Credit Co., 7.00% Debentures, 2013................................... 700,000 707,818 General Motors Acceptance Corp., 7.25% Debentures, 2011......................... 650,000 683,095 Household Financial Corp., 6.38% Debentures, 2012............................... 1,400,000 1,486,813 ------------ 4,496,782 ------------ HOME CONSTRUCTION (0.5%) M.D.C. Holdings, 5.50% Debentures, 2013......................................... 500,000 485,476 ------------ INDEPENDENT ENERGY (1.1%) Anadarko Petroleum, 6.75% Debentures, 2011...................................... 400,000 440,556 Cooper Cameron , 2.65% Debentures, 2007......................................... 200,000 194,143 Devon Energy, 6.88% Debentures, 2011 (A)........................................ 500,000 545,109 ------------ 1,179,808 ------------ INSURANCE (1.8%) Massachusetts Mutual Life, 2.55% Debentures, 2008 (A)........................... 900,000 848,556 New York Life, 5.38% Debentures, 2013 (A)....................................... 1,000,000 1,005,795 ------------ 1,854,351 ------------ MEDIA CABLE (7.3%) AOL Time Warner Inc., 6.15% Debentures, 2007.................................... 2,400,000 2,542,766 Comcast Cable Communications, 8.50% Debentures, 2027............................ 500,000 607,149 Cox Enterprises Inc., 7.88% Debentures, 2010 (A)................................ 3,800,000 4,324,674 ------------ 7,474,589 ------------ MEDIA NON-CABLE (1.3%) Clear Channel Communications Inc., 4.40% Debentures, 2011....................... 200,000 189,178 Liberty Media Corp., 3.02% Debentures, 2006..................................... 1,100,000 1,120,658 ------------ 1,309,836 ------------ NATURAL GAS PIPELINE (3.3%) Duke Energy Field Service, 7.50% Debentures, 2005............................... 500,000 525,088 Southern California Gas Co., 4.38% Debentures, 2011............................. 400,000 391,839 Transcontinental Gas Pipeline, 6.13% Debentures, 2005........................... 2,400,000 2,448,000 ------------ 3,364,927 ------------ PAPER (0.7%) International Paper, 5.50% Debentures, 2014..................................... 700,000 686,531 ------------
-22- THE TRAVELERS QUALITY BOND ACCOUNT FOR VARIABLE ANNUITIES STATEMENT OF INVESTMENTS (UNAUDITED) - CONTINUED JUNE 30, 2004
PRINCIPAL FAIR AMOUNT VALUE ------------ ------------ PHARMACEUTICALS (1.1%) Wyeth, 5.50% Debentures, 2014................................................... $ 1,200,000 $ 1,148,710 ------------ REAL ESTATE (8.1%) Canada Mortgage & Housing Corp., 3.38% Debentures, 2008......................... 1,000,000 983,013 iStar Financial, 6.00% Debentures, 2010......................................... 240,000 239,700 Nationwide Health Properties Inc., 6.90% Debentures, 2037....................... 4,500,000 4,562,716 Post Apartment Homes LP, 6.85% Debentures, 2005................................. 2,510,000 2,558,400 ------------ 8,343,829 ------------ RETAIL (2.3%) Wal-Mart Stores Inc., 4.55% Debentures, 2013.................................... 2,500,000 2,412,877 ------------ SUPERMARKETS (1.1%) Fred Meyer Inc., 7.45% Debentures, 2008......................................... 1,000,000 1,110,575 ------------ TELECOMMUNICATIONS (3.3%) Deutsche Telekom AG, 8.25% Debentures, 2005..................................... 1,100,000 1,156,834 Sprint Capital Corp., 6.13% Debentures, 2008.................................... 720,000 757,528 Telecom Italia S.p.A., 5.25% Debentures, 2013 (A)............................... 1,500,000 1,454,410 ------------ 3,368,772 ------------ TOBACCO (0.9%) Altria Group, 5.63% Debentures, 2008............................................ 900,000 904,777 ------------ U.S. AGENCY (5.6%) Federal Association National Mortgage, 1.75% Debentures, 2006................... 1,300,000 1,269,697 Federal Association National Mortgage, 2.00% Debentures, 2007................... 1,400,000 1,390,402 Federal Association National Mortgage, 6.00% Debentures, 2011................... 2,200,000 2,365,425 Federal Home Loan Mortgage Corp., 2.90% Debentures, 2019........................ 700,000 695,001 ------------ 5,720,525 ------------ UTILITIES (8.8%) National Rural Utilities Co-Op, 4.75% Debentures, 2014.......................... 600,000 577,381 Pepco Holdings Inc., 5.50% Debentures, 2007..................................... 1,600,000 1,652,926 Progress Energy Inc., 6.05% Debentures, 2007.................................... 2,700,000 2,848,252 PSEG Energy Holdings, 8.63% Debentures, 2008.................................... 450,000 486,000 SCANA Corp., 1.70% Debentures, 2006............................................. 1,000,000 1,001,208 SP Powerassets Ltd., 5.00% Debentures, 2013..................................... 900,000 877,930 TransAlta Corp., 5.75% Debentures, 2013......................................... 400,000 396,770 Xcel Energy Inc., 3.40% Debentures, 2008 (A).................................... 1,200,000 1,159,366 ------------ 8,999,833 ------------ TOTAL BONDS (COST $77,765,363).............................................................. 78,347,603 ------------
-23- THE TRAVELERS QUALITY BOND ACCOUNT FOR VARIABLE ANNUITIES STATEMENT OF INVESTMENTS (UNAUDITED) - CONTINUED JUNE 30, 2004
PRINCIPAL FAIR AMOUNT VALUE ------------ ------------ UNITED STATES GOVERNMENT SECURITIES (21.8%) United States of America Treasury, 3.13% Debentures, 2008....................... $ 4,500,000 $ 4,417,209 United States of America Treasury, 3.38% Debentures, 2008....................... 1,130,000 1,117,995 United States of America Treasury, 3.50% Debentures, 2006....................... 3,075,000 3,115,722 United States of America Treasury, 4.75% Debentures, 2014....................... 6,010,000 6,074,565 United States of America Treasury, 5.00% Debentures, 2011....................... 1,250,000 1,305,323 United States of America Treasury, 5.88% Debentures, 2005....................... 6,060,000 6,348,565 ------------ TOTAL UNITED STATES GOVERNMENT SECURITIES (COST $22,569,091).............................................................. 22,379,379 ------------ SHORT-TERM INVESTMENTS (1.8%) COMMERCIAL PAPER (1.8%)........................................................... Clipper Receivables Corp., Debentures, 2004..................................... 1,885,000 1,885,000 ------------ TOTAL SHORT-TERM INVESTMENTS (COST $1,885,000).................................... 1,885,000 ------------ TOTAL INVESTMENTS (100%) (COST $102,219,454) (B)......................................................... $102,611,982 ============
NOTES (A) Restricted Security. (B) At June 30, 2004 net unrealized appreciation for all securities was $392,528. This consisted of aggregate gross unrealized appreciation for all securities in which there was an excess of fair value over cost of $1,734,012 and aggregate gross unrealized depreciation for all securities in which there was an excess of cost over fair value of $1,341,484. See Notes to Financial Statements -24- THE TRAVELERS MONEY MARKET ACCOUNT FOR VARIABLE ANNUITIES STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED) JUNE 30, 2004 ASSETS: Investment securities, at fair value (cost $76,560,320) ....... $76,556,185 Cash .......................................................... 202,709 Receivables: Interest .................................................... 3,420 Purchase payments and transfers from other funding options .. 52,584 Other assets .................................................. 2,676 ----------- Total Assets .............................................. 76,817,574 ----------- LIABILITIES: Payables: Contract surrenders and transfers to other funding options .. 172,946 Investment management and advisory fees ..................... 3,392 Insurance charges ........................................... 13,114 ----------- Total Liabilities ......................................... 189,452 ----------- NET ASSETS: $76,628,122 =========== See Notes to Financial Statements -25- THE TRAVELERS MONEY MARKET ACCOUNT FOR VARIABLE ANNUITIES STATEMENT OF OPERATIONS (UNAUDITED) FOR THE SIX MONTHS ENDED JUNE 30, 2004 INVESTMENT INCOME: Interest ...................................................... $ 427,170 EXPENSES: Investment management and advisory fees ....................... $ 131,867 Insurance charges ............................................. 509,717 --------- Total expenses .............................................. 641,584 --------- Net investment income (loss) .............................. (214,414) --------- Net increase (decrease) in net assets resulting from operations $(214,414) =========
See Notes to Financial Statements -26- THE TRAVELERS MONEY MARKET ACCOUNT FOR VARIABLE ANNUITIES STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS ENDED YEAR ENDED JUNE 30, DECEMBER 31, 2004 2003 ---- ---- (UNAUDITED) OPERATIONS: Net investment income (loss) ........................................... $ (214,414) $ (453,301) ------------- ------------- Net increase (decrease) in net assets resulting from operations ...... (214,414) (453,301) ------------- ------------- UNIT TRANSACTIONS: Participant purchase payments (applicable to 1,607,009 and 3,738,508 units, respectively) .......... 4,386,754 10,242,509 Participant transfers from other funding options (applicable to 9,820,008 and 37,539,587 units, respectively) ......... 26,808,056 102,847,832 Administrative charges (applicable to 19,150 and 47,013 units, respectively) ................ (52,211) (128,680) Contract surrenders (applicable to 4,259,703 and 10,956,438 units, respectively) ......... (11,627,212) (30,017,360) Participant transfers to other funding options (applicable to 11,594,143 and 48,091,621 units, respectively) ........ (31,653,079) (131,747,666) Other payments to participants (applicable to 45,319 and 335,989 units, respectively) ............... (124,429) (922,085) ------------- ------------- Net increase (decrease) in net assets resulting from unit transactions (12,262,121) (49,725,450) ------------- ------------- Net increase (decrease) in net assets .............................. (12,476,535) (50,178,751) NET ASSETS: Beginning of period .................................................... 89,104,657 139,283,408 ------------- ------------- End of period .......................................................... $ 76,628,122 $ 89,104,657 ============= =============
See Notes to Financial Statements -27- NOTES TO FINANCIAL STATEMENTS (UNAUDITED) 1. SIGNIFICANT ACCOUNTING POLICIES The Travelers Money Market Account for Variable Annuities ("Account MM") is a separate account of The Travelers Insurance Company ("The Company"), an indirect wholly owned subsidiary of Citigroup Inc., and is available for funding Universal Annuity contracts issued by The Company. Account MM is registered under the Investment Company Act of 1940, as amended, as a diversified, open-end management investment company. The following is a summary of significant accounting policies consistently followed by Account MM in the preparation of its financial statements. SECURITY VALUATION. Investments in securities traded on a national securities exchange are valued at the 4:00 p.m. Eastern Standard Time price of such exchanges; securities traded on the over-the-counter market and listed securities with no reported sales are valued at the mean between the last reported bid and asked prices or on the basis of quotations received from a reputable broker or other recognized source. Short-term investments are reported at fair value based on quoted market prices. Short-term investments, for which there is no reliable quoted market price, are recorded at amortized cost which approximates fair value. SECURITY TRANSACTIONS. Security transactions are accounted for on the trade date. Interest income is recorded on the accrual basis. Premiums and discounts are amortized to interest income utilizing the constant yield method. REPURCHASE AGREEMENTS. When Account MM enters into a repurchase agreement (a purchase of securities whereby the seller agrees to repurchase the securities at a mutually agreed upon date and price), the repurchase price of the securities will generally equal the amount paid by Account MM plus a negotiated interest amount. The seller under the repurchase agreement will be required to provide to Account MM securities (collateral) whose market value, including accrued interest, will be at least equal to 102% of the repurchase price. Account MM monitors the value of collateral on a daily basis. Repurchase agreements will be limited to transactions with national banks and reporting broker dealers believed to present minimal credit risks. Account MM's custodian will take actual or constructive receipt of all securities underlying repurchase agreements until such agreements expire. There were no repurchase agreements in Account MM at June 30, 2004. FEDERAL INCOME TAXES. The operations of Account MM form a part of the total operations of The Company and are not taxed separately. The Company is taxed as a life insurance company under the Internal Revenue Code of 1986, as amended (the "Code"). Under existing federal income tax law, no taxes are payable on the investment income and capital gains of Account MM. Account MM is not taxed as a "regulated investment company" under Subchapter M of the Code. OTHER. The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. -28- NOTES TO FINANCIAL STATEMENTS (UNAUDITED) - CONTINUED 2. CONTRACT CHARGES Investment management and advisory fees are calculated daily at an annual rate of 0.3233% of Account MM's average net assets. These fees are paid to Travelers Asset Management International Company, LLC, an indirect wholly owned subsidiary of Citigroup Inc. Insurance charges are paid for the mortality and expense risks assumed by The Company. Each business day, The Company deducts a mortality and expense risk charge which is reflected in the calculation of accumulation and annuity unit values. This charge equals, on an annual basis, 1.0017% for contracts issued prior to May 16, 1983 and 1.25% on an annual basis for contracts issued on or after May 16, 1983. For certain contracts in the accumulation phase, a semi-annual charge of $15 (prorated for partial years) is deducted from participant account balances and paid to The Company to cover administrative charges. The Company assesses a 5% contingent deferred sales charge if a participant's purchase payment is surrendered within five years of its payment date. Contract surrender payments are net of contingent sales charges of $97,911 and $243,226 for the six months ended June 30, 2004 and the year ended December 31, 2003, respectively. 3. NET ASSETS HELD ON BEHALF OF AN AFFILIATE Approximately $1,088,000 and $1,185,000 of the net assets of Account MM were held on behalf of an affiliate of The Company as of June 30, 2004 and December 31, 2003, respectively. Transactions with this affiliate during the six months ended June 30, 2004 and the year ended December 31, 2003, were comprised of participant purchase payments of approximately $346,000 and $523,000 and contract surrenders of approximately $441,000 and $1,541,000, respectively. 4. NET CONTRACT OWNERS' EQUITY
JUNE 30, 2004 --------------------------------------------------------- UNIT NET UNITS VALUE ASSETS ----- ----- ------ Accumulation phase of contracts issued prior to May 16, 1983 ......... 24,204 $ 2.873 $ 69,542 Annuity phase of contracts issued prior to May 16, 1983 .............. 10,666 2.873 30,644 Accumulation phase of contracts issued on or after May 16, 1983 ...... 27,996,446 2.726 76,321,672 Annuity phase of contracts issued on or after May 16, 1983 ........... 75,662 2.726 206,264 ------------ Net Contract Owners' Equity ........................................................................... $ 76,628,122 ============
-29- NOTES TO FINANCIAL STATEMENTS (UNAUDITED) - CONTINUED 5. SUPPLEMENTARY INFORMATION (Selected data for a unit outstanding throughout each period.)
Contracts issued prior to May 16, 1983 SIX MONTHS ENDED FOR THE YEARS ENDED DECEMBER 31, JUNE 30, (DERIVED FROM AUDITED FINANCIAL INFORMATION) -------- ------------------------------------------------------- 2004 2003 2002 2001 2000 1999 ---- ---- ---- ---- ---- ---- SELECTED PER UNIT DATA: Total investment income ................................... $ .015 $ .033 $ .051 $ .120 $ .174 $ .135 Operating expenses ........................................ .019 .038 .038 .037 .037 .034 ------- ------- ------- ------- ------- ------- Net investment income (loss) .............................. (.004) (.005) .013 .083 .137 .101 Unit value at beginning of period ......................... 2.877 2.882 2.869 2.786 2.649 2.548 ------- ------- ------- ------- ------- ------- Unit value at end of period ............................... $ 2.873 $ 2.877 $ 2.882 $ 2.869 $ 2.786 $ 2.649 ======= ======= ======= ======= ======= ======= SIGNIFICANT RATIOS AND ADDITIONAL DATA: Net increase (decrease) in unit value ..................... $ (.00) $ (.01) $ .01 $ .08 $ .14 $ .10 Ratio of operating expenses to average net assets ......... 1.33%* 1.33% 1.33% 1.33% 1.33% 1.33% Ratio of net investment income (loss) to average net assets (0.27)%* (0.16)% 0.46% 2.89% 5.09% 3.87% Number of units outstanding at end of period (thousands) .. 35 39 49 60 70 80
Contracts issued on or after May 16, 1983 SIX MONTHS ENDED FOR THE YEARS ENDED DECEMBER 31, JUNE 30, (DERIVED FROM AUDITED FINANCIAL INFORMATION) -------- ------------------------------------------------------- 2004 2003 2002 2001 2000 1999 ---- ---- ---- ---- ---- ---- SELECTED PER UNIT DATA: Total investment income ................................... $ .014 $ .032 $ .048 $ .114 $ .167 $ .130 Operating expenses ........................................ .021 .043 .043 .042 .041 .039 ------- ------- ------- ------- ------- ------- Net investment income (loss) .............................. (.007) (.011) .005 .072 .126 .091 Unit value at beginning of period ......................... 2.733 2.744 2.739 2.667 2.541 2.450 ------- ------- ------- ------- ------- ------- Unit value at end of period ............................... $ 2.726 $ 2.733 $ 2.744 $ 2.739 $ 2.667 $ 2.541 ======= ======= ======= ======= ======= ======= SIGNIFICANT RATIOS AND ADDITIONAL DATA: Net increase (decrease) in unit value ..................... $ (.01) $ (.01) $ .01 $ .07 $ .13 $ .09 Ratio of operating expenses to average net assets ......... 1.57%* 1.57% 1.57% 1.57% 1.57% 1.57% Ratio of net investment income (loss) to average net assets (0.52)%* (0.41)% 0.21% 2.64% 4.84% 3.62% Number of units outstanding at end of period (thousands) .. 28,072 32,559 50,702 63,430 55,477 70,545
* Annualized -30- THE TRAVELERS MONEY MARKET ACCOUNT FOR VARIABLE ANNUITIES STATEMENT OF INVESTMENTS (UNAUDITED) JUNE 30, 2004
PRINCIPAL FAIR AMOUNT VALUE ------------- -------------- SHORT-TERM INVESTMENTS (100%) COMMERCIAL PAPER (81.3%) American Express Credit Corp., due July 1, 2004...................... $ 2,361,000 $ 2,360,837 Amsterdam Funding Corp., due July 13, 2004........................... 3,891,000 3,889,132 Atomium Funding Corp., due July 16, 2004............................. 3,794,000 3,791,777 Australia & N.Z. Bank ADS, due July 6, 2004.......................... 3,847,000 3,846,127 BMW U.S. Capital Corp., due July 1, 2004............................. 2,130,000 2,130,000 BMW U.S. Capital Corp., due July 7, 2004............................. 1,648,000 1,647,565 Capital Receivables Corp., due July 12, 2004......................... 3,551,000 3,549,420 Deutsche Bank Financials LLC, due July 1, 2004....................... 3,784,000 3,784,000 E.I. duPont de Nemours & Co., due July 12, 2004...................... 2,747,000 2,745,778 General Electric Capital Corp., due July 14, 2004.................... 2,447,000 2,445,740 General Electric Capital Corp., due July 20, 2004.................... 1,360,000 1,359,007 Goldman Sachs Group Inc., due August 23, 2004........................ 3,700,000 3,692,396 Merrill Lynch & Co., due July 1, 2004................................ 3,784,000 3,784,000 Morgan Stanley Dean Witter & Co., due July 22, 2004.................. 1,918,000 1,916,464 National Australia Banking Inc., due July 1, 2004.................... 1,128,000 1,127,922 Paradigm Funding LLC, due July 12, 2004.............................. 3,850,000 3,848,287 Pfizer Inc., due July 6, 2004........................................ 3,545,000 3,544,195 Royal Bank Of Scotland PLC, due July 6, 2004......................... 1,100,000 1,099,750 UBS Financial Inc., due July 1, 2004................................. 4,012,000 4,011,723 Victory Receivables Corp., due July 1, 2004.......................... 3,851,000 3,850,734 Wells Fargo Bank NA, 1.08% due July 6, 2004.......................... 3,800,000 3,799,848 -------------- 62,224,702 -------------- UNITED STATES AGENCY SECURITIES (18.7%) Federal Home Loan, due July 16, 2004................................. 5,630,000 5,627,044 Federal Home Loan, due July 21, 2004................................. 6,160,000 6,155,688 Federal Home Loan Mortgage Corp., due July 15, 2004.................. 2,550,000 2,548,751 -------------- 14,331,483 -------------- TOTAL INVESTMENTS (100%) (COST $76,560,320)................................................... $ 76,556,185 ==============
See Notes to Financial Statements -31- THE BOARD OF MANAGERS AND OFFICERS The investments and administration of each of the Accounts are under the direction of the Board of Managers, listed below. Members of the Board of Managers of Accounts GIS, QB, MM, TGIS, TSB and TAS are elected annually by those Contract Owners participating in the Accounts. A majority of the members of the Board of Managers are persons who are not affiliated with The Travelers Insurance Company, TIMCO, TAMIC or their affiliates. BOARD OF MANAGERS(1) R. Jay Gerken, CFA(2) CHAIRMAN Frances M. Hawk, CFA, CFP Lewis Mandell Robert E. McGill, III OFFICERS R. Jay Gerken, CFA CHIEF EXECUTIVE OFFICER AND PRESIDENT Kathleen A. McGah SECRETARY TO THE BOARD Ernest J. Wright ASSISTANT SECRETARY TO THE BOARD David A. Golino PRINCIPAL ACCOUNTING OFFICER William D. Wilcox CHIEF ANTI-MONEY LAUNDERING COMPLIANCE OFFICER CHIEF COMPLIANCE OFFICER(3) - -------------------------------------------------------------------------------- (1) Mr. Knight Edwards is an Emeritus Manager. An Emeritus Manager is permitted to attend meetings, but has no voting power. (2) Mr. Gerken is an "interested person" within the meaning of the 1940 Act by virtue of his position as Managing Director of Salomon Smith Barney, Inc., an indirect wholly owned subsidiary of Citigroup Inc., and his ownership of shares and options to purchase shares of Citigroup Inc., the indirect parent of The Travelers Insurance Company. (3) As of July 23, 2004 Each Manager and Officer serves until his or her respective successor has been duly elected and qualified. - -------------------------------------------------------------------------------- The Statement of Additional Information for Universal Annuity contains additional information about the Trustees and Officers, and is available without charge, upon request, by calling 1-800-842-9406. -32- This page intentionally left blank INVESTMENT ADVISER TRAVELERS ASSET MANAGEMENT INTERNATIONAL COMPANY, LLC Hartford, Connecticut THE TRAVELERS GROWTH AND INCOME STOCK ACCOUNT FOR VARIABLE ANNUITIES THE TRAVELERS QUALITY BOND ACCOUNT FOR VARIABLE ANNUITIES THE TRAVELERS MONEY MARKET ACCOUNT FOR VARIABLE ANNUITIES INVESTMENT SUB-ADVISER THE TRAVELERS INVESTMENT MANAGEMENT COMPANY Stamford, Connecticut THE TRAVELERS GROWTH AND INCOME STOCK ACCOUNT FOR VARIABLE ANNUITIES INDEPENDENT AUDITORS KPMG LLP Hartford, Connecticut CUSTODIAN JPMORGAN CHASE BANK New York, New York This report is prepared for the general information of contract owners and is not an offer of units of The Travelers Growth and Income Stock Account for Variable Annuities, The Travelers Quality Bond Account for Variable Annuities or The Travelers Money Market Account for Variable Annuities. All figures represent past performance and the information provided is not intended to be a forecast of future events, a guarantee of future results or investment advice. Principal value and investment returns will fluctuate and investors' units may be worth more or less than their original cost A description of the policies and procedures that the Account uses to determine how to vote proxies relating to portfolio securities is currently available, and, beginning August 31, 2004, information on how the Account voted proxies relating to portfolio securities will be available. You may obtain these materials upon request and without charge by calling the Account (toll-free) at 1-800-842-9406 and by visiting the Securities and Exchange Commission's website at http://www.sec.gov. VG-137 (Semi-Annual) (6-04) Printed in U.S.A. ITEM 2. CODE OF ETHICS. Not applicable. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. Not applicable. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Not applicable. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. Not applicable. ITEM 6. SCHEDULE OF INVESTMENTS Not applicable. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. Not applicable. ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. Not applicable. ITEM 10. CONTROLS AND PROCEDURES. (a) The registrant's principal executive officer and principal financial officer have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a - 3 (c) under the Investment Company Act of 1940, as amended) are effective based on their evaluation of the disclosure controls and procedures as of a date within 90 days of the filing date of this document. (b) In the last 90 days, there have been no significant changes in the registrant's internal controls or in other factors that could significantly affect these controls. ITEM 11. EXHIBITS. (a)(2) Certifications pursuant to section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto as Exhibit 99.CERT. (b) Certifications pursuant to section 906 of the Sarbanes-Oxley Act of 2002 are furnished as Exhibit 99.906CERT SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Travelers Growth and Income Stock Account For Variable Annuities Travelers Quality Bond Account For Variable Annuities Travelers Money Market Account For Variable Annuities By: /s/ R. Jay Gerken R. Jay Gerken Chairman of the Board Chief Executive Officer Travelers Growth and Income Stock Account For Variable Annuities Travelers Quality Bond Account For Variable Annuities Travelers Money Market Account For Variable Annuities Date 8/26/04 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By: /s/ R. Jay Gerken R. Jay Gerken Chairman of the Board Chief Executive Officer Travelers Growth and Income Stock Account For Variable Annuities Travelers Quality Bond Account For Variable Annuities Travelers Money Market Account For Variable Annuities Date 8/26/04 By: /s/ David A. Golino David A. Golino Principal Accounting Officer Travelers Growth and Income Stock Account For Variable Annuities Travelers Quality Bond Account For Variable Annuities Travelers Money Market Account For Variable Annuities Date 8/26/04 EX-99.302 CERT 2 c33413_ex99-302cert.txt EX-99.302 CERT CERTIFICATIONS I, R. Jay Gerken, certify that: 1. I have reviewed this report on Form N-CSR of Travelers Growth and Income Stock Account for Variable Annuities; 2. Based on my knowledge, this report does not contain any untrue statements of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting: and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: 8/26/04 /s/ R. Jay Gerken ----------------- Chairman of the Board Chief Executive Officer CERTIFICATIONS I, David A. Golino, certify that: 1. I have reviewed this report on Form N-CSR of Travelers Growth and Income Stock Account for Variable Annuities; 2. Based on my knowledge, this report does not contain any untrue statements of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting: and; 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting. Date: 8/26/04 /s/ David A. Golino ------------------- Principal Accounting Officer CERTIFICATIONS I, R. Jay Gerken, certify that: 1. I have reviewed this report on Form N-CSR of Travelers Quality Bond Account for Variable Annuities; 2. Based on my knowledge, this report does not contain any untrue statements of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting: and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: 8/26/04 /s/ R. Jay Gerken ----------------- Chairman of the Board Chief Executive Officer CERTIFICATIONS I, David A. Golino, certify that: 1. I have reviewed this report on Form N-CSR of Travelers Quality Bond Account for Variable Annuities; 2. Based on my knowledge, this report does not contain any untrue statements of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting: and; 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting. Date: 8/26/04 /s/ David A. Golino ------------------- Principal Accounting Officer CERTIFICATIONS I, R. Jay Gerken, certify that: 1. I have reviewed this report on Form N-CSR of Travelers Money Market Account for Variable Annuities; 2. Based on my knowledge, this report does not contain any untrue statements of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting: and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: 8/26/04 /s/ R. Jay Gerken ----------------- Chairman of the Board Chief Executive Officer CERTIFICATIONS I, David A. Golino, certify that: 1. I have reviewed this report on Form N-CSR of Travelers Money Market Account for Variable Annuities; 2. Based on my knowledge, this report does not contain any untrue statements of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting: and; 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting. Date: 8/26/04 /s/ David A. Golino ------------------- Principal Accounting Officer EX-99.906 3 c33413_ex99-906cert.txt EX-99.906 CERT CERTIFICATION R. Jay Gerken, Chairman of the Board and Chief Executive Officer, and David A. Golino, Principal Accounting Officer of the Travelers Growth and Income Stock Account for Variable Annuities, each certify to the best of his knowledge that: 1. The Registrant's periodic report on Form N-CSR for the period ended June 30, 2004 (the "Form N-CSR") fully complies with the requirements of section 13 (a) or 15(d) as applicable of the Securities Exchange Act of 1934, as amended; and 2. The information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Registrant.
Chairman of the Board Chief Executive Officer Principal Accounting Officer Travelers Growth and Income Stock Account Travelers Growth and Income Stock Account For Variable Annuities For Variable Annuities
/s/ R. Jay Gerken /s/ David A. Golino - ----------------- ------------------- R. Jay Gerken David A. Golino Date: 8/26/04 Date: 8/26/04 A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Travelers Growth and Income Stock Account for Variable Annuities and will be retained by the Travelers Growth and Income Stock Account for Variable Annuities and furnished to the Securities and Exchange Commission or its staff upon request. This certification is being furnished to the Commission solely pursuant to 18 U.S.C. (s) 1350 and is not being filed as part of the Form N-CSR with the Commission. CERTIFICATION R. Jay Gerken, Chairman of the Board and Chief Executive Officer, and David A. Golino, Principal Accounting Officer of the Travelers Quality Bond Account for Variable Annuities, each certify to the best of his knowledge that: 1. The Registrant's periodic report on Form N-CSR for the period ended June 30, 2004 (the "Form N-CSR") fully complies with the requirements of section 13 (a) or 15(d) as applicable of the Securities Exchange Act of 1934, as amended; and 2. The information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Registrant. Chairman of the Board Chief Executive Officer Principal Accounting Officer Travelers Quality Bond Stock Account Travelers Quality Bond Stock Account For Variable Annuities For Variable Annuities /s/ R. Jay Gerken /s/ David A. Golino - ----------------- ------------------- R. Jay Gerken David A. Golino Date: 8/26/04 Date: 8/26/04 A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Travelers Quality Bond Account for Variable Annuities and will be retained by the Travelers Quality Bond Account for Variable Annuities and furnished to the Securities and Exchange Commission or its staff upon request. This certification is being furnished to the Commission solely pursuant to 18 U.S.C. (s) 1350 and is not being filed as part of the Form N-CSR with the Commission. CERTIFICATION R. Jay Gerken, Chairman of the Board and Chief Executive Officer, and David A. Golino, Principal Accounting Officer of the Travelers Money Market Account for Variable Annuities, each certify to the best of his knowledge that: 1. The Registrant's periodic report on Form N-CSR for the period ended June 30, 2004 (the "Form N-CSR") fully complies with the requirements of section 13 (a) or 15(d) as applicable of the Securities Exchange Act of 1934, as amended; and 2. The information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Registrant. Chairman of the Board Chief Executive Officer Principal Accounting Officer Travelers Money Market Account Travelers Money Market Account For Variable Annuities For Variable Annuities /s/ R. Jay Gerken /s/ David A. Golino - ----------------- ------------------- R. Jay Gerken David A. Golino Date: 8/26/04 Date: 8/26/04 A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Travelers Money Market Account for Variable Annuities and will be retained by the Travelers Money Market Account for Variable Annuities and furnished to the Securities and Exchange Commission or its staff upon request. This certification is being furnished to the Commission solely pursuant to 18 U.S.C. (s) 1350 and is not being filed as part of the Form N-CSR with the Commission. -----END PRIVACY-ENHANCED MESSAGE-----