<PAGE> 1
ANNUAL REPORT
DECEMBER 31, 1998
THE TRAVELERS SEPARATE ACCOUNT QP
FOR VARIABLE ANNUITIES
[TRAVELERS LIFE & ANNUITY LOGO]
The Travelers Insurance Company
The Travelers Life and Annuity Company
One Tower Square
Hartford, CT 06183
<PAGE> 2
THE TRAVELERS SEPARATE ACCOUNT QP
FOR VARIABLE ANNUITIES
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1998
<TABLE>
<S> <C> <C>
ASSETS:
Investments in eligible funds at market value:
American Odyssey Funds, Inc., 2,717,768 shares (cost $38,078,914) ................... $39,882,841
Capital Appreciation Fund, 192,410 shares (cost $10,105,340) ........................ 13,995,869
Delaware Group Premium Fund, Inc., 444 shares (cost $6,616) ......................... 7,310
Dreyfus Stock Index Fund, 207,953 shares (cost $5,610,363) .......................... 6,762,634
Dreyfus Variable Investment Fund, 2,911 shares (cost $99,218) ....................... 109,883
Fidelity's Variable Insurance Products Fund, 455,567 shares (cost $11,734,409) ...... 13,805,475
Fidelity's Variable Insurance Products Fund II, 117,667 shares (cost $1,973,552) .... 2,136,827
High Yield Bond Trust, 47,884 shares (cost $472,135) ................................ 471,660
Managed Assets Trust, 194,951 shares (cost $3,578,390) .............................. 3,897,069
Money Market Portfolio, 29,313 shares (cost $29,313) ................................ 29,313
OCC Accumulation Trust, 59 shares (cost $2,219) ..................................... 2,279
Salomon Brothers Variable Series Funds Inc., 1,294 shares (cost $12,982) ............ 14,090
Strong Variable Insurance Funds, Inc., 298 shares (cost $2,485) ..................... 3,006
Templeton Variable Products Series Fund, 234,204 shares (cost $5,220,889) ........... 4,961,295
The Montgomery Funds III, 23 shares (cost $348) ..................................... 362
The Travelers Series Trust, 485,821 shares (cost $7,434,850) ........................ 7,962,206
Travelers Series Fund Inc., 2,203,805 shares (cost $9,526,240) ...................... 10,307,603
Warburg Pincus Trust, 78 shares (cost $631) ......................................... 641
-----------
Total Investments (cost $93,888,894)............................................... $ 104,350,363
Receivables:
Dividends ........................................................................... 93,780
Purchase payments and transfers from other Travelers accounts ....................... 1,036,932
Other assets .......................................................................... 27,525
------------
Total Assets ...................................................................... 105,508,600
------------
LIABILITIES:
Payables:
Contract surrenders and transfers to other Travelers accounts ....................... 454,588
Insurance charges and administrative fees ........................................... 21,692
------------
Total Liabilities.................................................................. 476,280
------------
NET ASSETS: $ 105,032,320
============
</TABLE>
See Notes to Financial Statements
-1-
<PAGE> 3
THE TRAVELERS SEPARATE ACCOUNT QP
FOR VARIABLE ANNUITIES
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Dividends ........................................................ $ 3,333,929
EXPENSES:
Insurance charges and administrative fees ........................ 623,290
----------------
Net investment income ........................................ 2,710,639
----------------
REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Realized gain (loss) from investment transactions:
Proceeds from investments sold ................................. $ 7,122,354
Cost of investments sold ....................................... 6,461,747
----------------
Net realized gain (loss) ..................................... 660,607
Change in unrealized gain (loss) on investments:
Unrealized gain at December 31, 1997 ........................... 2,373,529
Unrealized gain at December 31, 1998 ........................... 10,461,469
----------------
Net change in unrealized gain (loss) for the year ............ 8,087,940
----------------
Net realized gain (loss) and change in unrealized gain (loss) 8,748,547
----------------
Net increase in net assets resulting from operations ............. $ 11,459,186
================
</TABLE>
See Notes to Financial Statements
-2-
<PAGE> 4
THE TRAVELERS SEPARATE ACCOUNT QP
FOR VARIABLE ANNUITIES
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
OPERATIONS:
Net investment income .............................................. $ 2,710,639 $ 490,944
Net realized gain (loss) from investment transactions .............. 660,607 131,259
Net change in unrealized gain (loss) on investments ................ 8,087,940 2,470,840
------------ -----------
Net increase in net assets resulting from operations ............. 11,459,186 3,093,043
------------ -----------
UNIT TRANSACTIONS:
Participant purchase payments
(applicable to 44,678,313 and 11,435,719 units, respectively) ... 56,161,812 13,165,340
Participant transfers from other Travelers accounts
(applicable to 12,816,931 and 16,386,065 units, respectively) ... 16,698,425 18,180,870
Administrative and asset allocation charges
(applicable to 283,872 and 121,657 units, respectively) ......... (349,434) (139,741)
Contract surrenders
(applicable to 2,279,007 and 745,692 units, respectively) ....... (3,036,942) (867,895)
Participant transfers to other Travelers accounts
(applicable to 8,454,330 and 3,519,090 units, respectively) ..... (10,408,149) (3,811,813)
Other payments to participants
(applicable to 33,572 and 19,258 units, respectively) ........... (44,498) (22,155)
------------ -----------
Net increase in net assets resulting from unit transactions ........ 59,021,214 26,504,606
------------ -----------
Net increase in net assets ....................................... 70,480,400 29,597,649
NET ASSETS:
Beginning of year .................................................. 34,551,920 4,954,271
------------ -----------
End of year ........................................................ $105,032,320 $34,551,920
============ ===========
</TABLE>
See Notes to Financial Statements
-3-
<PAGE> 5
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
The Travelers Separate Account QP for Variable Annuities ("Separate Account
QP") is a separate account of The Travelers Insurance Company ("The
Travelers"), an indirect wholly owned subsidiary of Citigroup Inc.
(formerly Travelers Group Inc.), and is available for funding certain
variable annuity contracts issued by The Travelers. Separate Account QP is
registered under the Investment Company Act of 1940, as amended, as a unit
investment trust.
Participant purchase payments applied to Separate Account QP are invested
in one or more eligible funds in accordance with the selection made by the
contract owner. As of December 31, 1998, the eligible funds available
under Separate Account QP were: Managed Assets Trust; High Yield Bond
Trust; Capital Appreciation Fund; Money Market Portfolio; U.S. Government
Securities Portfolio, Utilities Portfolio, Social Awareness Stock
Portfolio, Travelers Quality Bond Portfolio, Lazard International Stock
Portfolio, Federated Stock Portfolio, Federated High Yield Portfolio, Large
Cap Portfolio, Equity Income Portfolio, Disciplined Mid Cap Stock
Portfolio, Convertible Bond Portfolio, Disciplined Small Cap Stock
Portfolio, MFS Mid Cap Growth Portfolio, MFS Research Portfolio and
Strategic Stock Portfolio of The Travelers Series Trust; American Odyssey
Core Equity Fund, American Odyssey Emerging Opportunities Fund, American
Odyssey International Equity Fund, American Odyssey Long-Term Bond Fund,
American Odyssey Intermediate-Term Bond Fund and American Odyssey Global
High-Yield Bond Fund (formerly American Odyssey Short-Term Bond Fund) of
American Odyssey Funds, Inc.; Alliance Growth Portfolio, Smith Barney Large
Cap Value Portfolio (formerly Smith Barney Income and Growth Portfolio),
Smith Barney High Income Portfolio, MFS Total Return Portfolio, Smith
Barney International Equity Portfolio, Smith Barney Money Market Portfolio,
Putnam Diversified Income Portfolio and Smith Barney Large Capitalization
Growth Portfolio of Travelers Series Fund Inc.; Salomon Brothers Variable
Investors Fund, Salomon Brothers Variable Total Return Fund and Salomon
Brothers Variable Capital Fund of Salomon Brothers Variable Series Funds
Inc. (all of which are managed by affiliates of The Travelers); Templeton
Bond Fund (Class 1 shares), Templeton Stock Fund (Class 1 shares) and
Templeton Asset Allocation Fund (Class 1 shares) of Templeton Variable
Products Series Fund; High Income Portfolio, Growth Portfolio and
Equity-Income Portfolio of Fidelity's Variable Insurance Products Fund;
Asset Manager Portfolio of Fidelity's Variable Insurance Products Fund II;
Dreyfus Stock Index Fund; Small Cap Portfolio and Capital Appreciation
Portfolio of Dreyfus Variable Investment Fund; REIT Series and Small Cap
Value Series of Delaware Group Premium Fund, Inc; Montgomery Variable
Series: Growth Fund of The Montgomery Funds III; Equity Portfolio of OCC
Accumulation Trust; Strong Schafer Value Fund II of Strong Variable
Insurance Funds, Inc. and Emerging Markets Portfolio of Warburg Pincus
Trust. All of the funds are Massachusetts business trusts, except for
American Odyssey Funds, Inc., Dreyfus Stock Index Fund, Travelers Series
Fund Inc., Salomon Brothers Variable Series Funds Inc. and Delaware Group
Premium Fund, Inc. which are incorporated under Maryland law; Strong
Variable Insurance Funds, Inc. which is a Wisconsin corporation and The
Montgomery Funds III which is a Delaware business trust. Not all funds may
be available in all states or to all contract owners.
The following is a summary of significant accounting policies consistently
followed by Separate Account QP in the preparation of its financial
statements.
SECURITY VALUATION. Investments are valued daily at the net asset values
per share of the underlying funds.
SECURITY TRANSACTIONS. Security transactions are accounted for on the
trade date. Dividend income is recorded on the ex-dividend date.
FEDERAL INCOME TAXES. The operations of Separate Account QP form a part of
the total operations of The Travelers and are not taxed separately. The
Travelers 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 of Separate
Account QP. Separate Account QP 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 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.
-4-
<PAGE> 6
NOTES TO FINANCIAL STATEMENTS - CONTINUED
2. INVESTMENTS
The aggregate costs of purchases and proceeds from sales of investments
were $69,378,725 and $7,122,354 respectively, for the year ended December
31, 1998. Realized gains and losses from investment transactions are
reported on an identified cost basis. The cost of investments in eligible
funds was $93,888,894 at December 31, 1998. Gross unrealized appreciation
for all investments at December 31, 1998 was $10,896,961. Gross unrealized
depreciation for all investments at December 31, 1998 was $435,492.
3. CONTRACT CHARGES
Insurance charges are paid for the mortality and expense risks assumed by
The Travelers. These charges, which are negotiated on an individual
contract basis, are equivalent to 0.60%, 0.80%, 0.95%, 1.15%, 1.20% and
0.90% of the average net assets of Separate Account QP on an annual basis.
Contract owners' equity associated with each insurance charge is identified
as Price 1, Price 2, Price 3, Price 4, Price 5 and Price 6, respectively,
in Note 4. Additionally, for certain allocated contracts in the
accumulation phase, a semi-annual charge of $15 (prorated for partial
periods) is deducted from participant account balances and paid to The
Travelers to cover administrative charges.
Administrative fees are paid for administrative expenses incurred by The
Travelers. This charge is equivalent to 0.10% of the average net assets of
certain allocated contracts in Separate Account QP on an annual basis.
Contract owner's equity associated with this charge is identified as Price
5 in note 4.
No sales charge is deducted from participant purchase payments when they
are received. However, as negotiated, The Travelers may assess a
contingent deferred sales charge (up to 5% if a participant's purchase
payment is surrendered within five years of its payment date) or, as an
alternative, a surrender charge (up to 5% if a participant's purchase
payment is surrendered within eight years of its payment date.) Contract
surrender payments include $21,351 and $4,602 of contingent deferred sales
charges and surrender charges for the years ended December 31, 1998 and
1997, respectively.
Participants in American Odyssey Funds, Inc. (the "Funds"), may elect to
enter into a separate asset allocation advisory agreement with Copeland
Financial Services, Inc. ("Copeland"), an affiliate of The Travelers.
Under this arrangement, Copeland provides asset allocation advice and
charges participants an annual fee, plus a one-time set-up fee of $30. The
annual fee, which decreases as a participant's assets in the Funds
increase, is equivalent to an amount of up to 1.50% of the participant's
assets in the Funds. These fees totaled $239,556 and $71,285 for the years
ended December 31, 1998 and 1997, respectively.
-5-
<PAGE> 7
NOTES TO FINANCIAL STATEMENTS - CONTINUED
4. NET CONTRACT OWNERS' EQUITY
<TABLE>
<CAPTION>
DECEMBER 31, 1998
--------------------------------------------
ACCUMULATION UNIT NET
UNITS VALUE ASSETS
<S> <C> <C> <C>
American Odyssey Funds, Inc.
American Odyssey Core Equity Fund
Price 1 .................................... 58,294 $ 1.628 $ 94,887
Price 2 .................................... 1,060,046 1.620 1,717,789
Price 3 .................................... 3,478,529 1.615 5,618,114
Price 4 .................................... 347,272 1.608 558,383
Price 5 .................................... 153,298 1.603 245,669
Price 6 .................................... 3,149,947 1.617 5,093,108
American Odyssey Emerging Opportunities Fund
Price 1..................................... 70,995 0.856 60,755
Price 2..................................... 1,040,352 0.852 886,320
Price 3..................................... 3,784,469 0.849 3,213,335
Price 4..................................... 236,065 0.845 199,545
Price 5..................................... 68,535 0.842 57,740
Price 6..................................... 2,811,132 0.850 2,389,567
American Odyssey Intermediate-Term Bond Fund
Price 1..................................... 1,407 1.172 1,649
Price 2..................................... 520,065 1.167 606,964
Price 3..................................... 1,143,580 1.163 1,330,189
Price 4..................................... 55,670 1.158 64,466
Price 5..................................... 30,548 1.154 35,257
Price 6..................................... 1,072,949 1.164 1,249,435
American Odyssey International Equity Fund
Price 1..................................... 20,676 1.302 26,927
Price 2..................................... 791,438 1.297 1,026,124
Price 3..................................... 2,595,394 1.292 3,353,779
Price 4..................................... 210,146 1.286 270,343
Price 5..................................... 35,028 1.282 44,911
Price 6..................................... 2,315,866 1.294 2,995,911
American Odyssey Long-Term Bond Fund
Price 1..................................... 6,982 1.235 8,624
Price 2..................................... 872,955 1.230 1,073,518
Price 3..................................... 2,268,910 1.226 2,780,839
Price 4..................................... 154,138 1.220 188,077
Price 5..................................... 50,376 1.216 61,262
Price 6..................................... 2,127,335 1.227 2,610,272
American Odyssey Global High-Yield Bond Fund
Price 1..................................... 3,181 1.020 3,244
Price 2..................................... 320,821 1.015 325,761
Price 3..................................... 1,102,248 1.012 1,115,510
Price 4..................................... 64,167 1.007 64,647
Price 5..................................... 14,668 1.004 14,729
Price 6..................................... 770,544 1.013 780,651
</TABLE>
-6-
<PAGE> 8
NOTES TO FINANCIAL STATEMENTS - CONTINUED
4. NET CONTRACT OWNERS' EQUITY (CONTINUED)
<TABLE>
<CAPTION>
DECEMBER 31, 1998
--------------------------------------------
ACCUMULATION UNIT NET
UNITS VALUE ASSETS
<S> <C> <C> <C>
Capital Appreciation Fund
Price 1....................................... 413,409 $ 2.073 $ 856,818
Price 2....................................... 241,615 2.063 498,536
Price 3....................................... 2,358,987 2.056 4,851,151
Price 4....................................... 429,279 2.047 878,879
Price 5....................................... 961,744 2.040 1,962,438
Price 6....................................... 2,581,625 2.059 5,314,993
Delaware Group Premium Fund, Inc.
Small Cap Value Series
Price 2....................................... 2,407 1.120 2,697
Price 4....................................... 124 1.119 138
Price 6....................................... 3,994 1.120 4,474
Dreyfus Stock Index Fund
Price 1....................................... 138,866 1.815 252,098
Price 2....................................... 33 1.807 60
Price 3....................................... 2,284,987 1.801 4,115,719
Price 4....................................... 257,393 1.793 461,536
Price 5....................................... 1,121,361 1.787 2,003,954
Dreyfus Variable Investment Fund
Capital Appreciation Portfolio
Price 1....................................... 502 1.077 541
Price 2....................................... 60,832 1.076 65,457
Price 3....................................... 6,816 1.075 7,329
Price 4....................................... 1,944 1.074 2,089
Price 6....................................... 18,841 1.076 20,265
Small Cap Portfolio
Price 2 ...................................... 1,748 1.198 2,094
Price 4 ...................................... 1,114 1.197 1,333
Price 5 ...................................... 6,726 1.196 8,047
Price 6 ...................................... 2,563 1.198 3,070
</TABLE>
-7-
<PAGE> 9
NOTES TO FINANCIAL STATEMENTS - CONTINUED
4. NET CONTRACT OWNERS' EQUITY (CONTINUED)
<TABLE>
<CAPTION>
DECEMBER 31, 1998
--------------------------------------------
ACCUMULATION UNIT NET
UNITS VALUE ASSETS
<S> <C> <C> <C>
Fidelity's Variable Insurance Products Fund
Equity-Income Portfolio
Price 1....................................... 39,301 $ 1.475 $ 57,978
Price 2....................................... 624 1.469 917
Price 3....................................... 2,294,202 1.464 3,358,102
Price 4....................................... 302,651 1.457 441,030
Price 5....................................... 738,800 1.452 1,072,997
Price 6....................................... 373 1.465 547
Growth Portfolio
Price 1....................................... 77,604 1.692 131,272
Price 2....................................... 431 1.684 725
Price 3....................................... 3,726,583 1.678 6,254,712
Price 4....................................... 297,359 1.671 496,864
Price 5....................................... 626,091 1.665 1,042,647
Price 6....................................... 36 1.680 60
High Income Portfolio
Price 1....................................... 40,705 1.128 45,896
Price 2....................................... 95 1.122 107
Price 3....................................... 578,543 1.119 647,245
Price 4....................................... 181,391 1.114 202,029
Price 5....................................... 97,958 1.110 108,739
Fidelity's Variable Insurance Products Fund II
Asset Manager Portfolio
Price 1....................................... 32,515 1.439 46,778
Price 2....................................... 188 1.432 269
Price 3....................................... 1,072,725 1.427 1,531,192
Price 4....................................... 106,115 1.421 150,788
Price 5....................................... 290,394 1.416 411,259
High Yield Bond Trust
Price 1....................................... 533 1.267 675
Price 2....................................... 3,334 1.261 4,204
Price 3....................................... 54,195 1.257 68,109
Price 4....................................... 33,994 1.251 42,531
Price 5....................................... 28,684 1.247 35,768
Price 6....................................... 255,952 1.258 322,018
</TABLE>
-8-
<PAGE> 10
NOTES TO FINANCIAL STATEMENTS - CONTINUED
4. NET CONTRACT OWNERS' EQUITY (CONTINUED)
<TABLE>
<CAPTION>
DECEMBER 31, 1998
--------------------------------------------
ACCUMULATION UNIT NET
UNITS VALUE ASSETS
<S> <C> <C> <C>
Managed Assets Trust
Price 1....................................... 23,844 $ 1.519 $ 36,213
Price 2....................................... 51,150 1.512 77,340
Price 3....................................... 602,633 1.507 908,157
Price 4....................................... 146,528 1.500 219,832
Price 5....................................... 299,403 1.495 447,689
Price 6....................................... 1,472,171 1.509 2,220,993
Money Market Portfolio
Price 2....................................... 16,146 1.012 16,343
Price 4....................................... 3,453 1.011 3,491
Price 6....................................... 9,415 1.012 9,527
OCC Accumulation Trust
Equity Portfolio
Price 6....................................... 2,056 1.145 2,354
Salomon Brothers Variable Series Funds Inc.
Salomon Brothers Variable Total Return Fund
Price 2....................................... 6,719 1.059 7,116
Salomon Brothers Variable Capital Fund
Price 2....................................... 4,438 1.146 5,087
Price 4....................................... 164 1.146 188
Price 6....................................... 246 1.146 282
Salomon Brothers Variable Investors Fund
Price 2....................................... 1,374 1.206 1,657
Strong Variable Insurance Funds, Inc.
Strong Schafer Value Fund II
Price 2....................................... 1,963 1.291 2,535
Price 4....................................... 41 1.289 53
Price 6....................................... 325 1.290 418
</TABLE>
-9-
<PAGE> 11
NOTES TO FINANCIAL STATEMENTS - CONTINUED
4. NET CONTRACT OWNERS' EQUITY (CONTINUED)
<TABLE>
<CAPTION>
DECEMBER 31, 1998
--------------------------------------------
ACCUMULATION UNIT NET
UNITS VALUE ASSETS
<S> <C> <C> <C>
Templeton Variable Products Series Fund
Templeton Asset Allocation Fund (Class 1 shares)
Price 1....................................... 41,126 $ 1.297 $ 53,333
Price 2....................................... 93 1.291 120
Price 3....................................... 512,555 1.287 659,535
Price 4....................................... 52,584 1.281 67,361
Price 5....................................... 421,487 1.277 538,134
Templeton Bond Fund (Class 1 shares)
Price 3....................................... 36,290 1.116 40,493
Price 4....................................... 3,185 1.111 3,537
Price 5....................................... 15,040 1.107 16,652
Templeton Stock Fund (Class 1 shares)
Price 1....................................... 212,737 1.209 257,271
Price 2....................................... 875 1.204 1,054
Price 3....................................... 2,102,810 1.200 2,523,216
Price 4....................................... 193,454 1.195 231,094
Price 5....................................... 499,388 1.191 594,563
The Montgomery Funds III
Montgomery Variable Series: Growth Fund
Price 6....................................... 338 1.070 361
The Travelers Series Trust
Equity Income Portfolio
Price 2....................................... 86,915 1.184 102,912
Price 4....................................... 163,749 1.178 192,914
Price 5....................................... 27,697 1.176 32,559
Price 6....................................... 2,633,036 1.182 3,113,191
Federated High Yield Portfolio
Price 2....................................... 11,120 1.050 11,677
Price 4....................................... 5,125 1.046 5,360
Price 5....................................... 678 1.044 708
Price 6....................................... 99,171 1.049 104,014
Federated Stock Portfolio
Price 2....................................... 8,544 1.266 10,816
Price 4....................................... 14,772 1.259 18,602
Price 5....................................... 972 1.257 1,222
Price 6....................................... 591,770 1.264 747,962
Large Cap Portfolio
Price 2....................................... 10,852 1.382 14,998
Price 4....................................... 68,162 1.375 93,729
Price 5....................................... 1,349 1.372 1,852
Price 6....................................... 520,424 1.380 718,207
</TABLE>
-10-
<PAGE> 12
NOTES TO FINANCIAL STATEMENTS - CONTINUED
4. NET CONTRACT OWNERS' EQUITY (CONTINUED)
<TABLE>
<CAPTION>
DECEMBER 31, 1998
--------------------------------------------
ACCUMULATION UNIT NET
UNITS VALUE ASSETS
<S> <C> <C> <C>
The Travelers Series Trust (continued)
Lazard International Stock Portfolio
Price 2....................................... 6,737 $ 1.095 $ 7,375
Price 4....................................... 20,939 1.089 22,810
Price 5....................................... 32,949 1.087 35,817
Price 6....................................... 139,586 1.093 152,592
MFS Mid Cap Growth Portfolio
Price 2....................................... 1,512 1.212 1,833
Price 6....................................... 538 1.212 652
MFS Research Portfolio
Price 1....................................... 4,261 1.245 5,306
Price 2....................................... 7,232 1.245 9,003
Price 6....................................... 214 1.245 266
Social Awareness Stock Portfolio
Price 1....................................... 12,064 1.724 20,797
Price 2....................................... 18,134 1.716 31,122
Price 3....................................... 293,875 1.711 502,679
Price 4....................................... 81,076 1.703 138,065
Price 5....................................... 157,955 1.697 268,088
Price 6....................................... 417,397 1.712 714,765
Strategic Stock Portfolio
Price 6....................................... 866 1.071 928
Disciplined Mid Cap Stock Portfolio
Price 1....................................... 9 1.222 11
Price 2....................................... 1,037 1.289 1,337
Price 4....................................... 111 1.288 143
Disciplined Small Cap Stock Portfolio
Price 4....................................... 172 1.087 187
Price 6....................................... 113 1.088 123
Travelers Quality Bond Portfolio
Price 1....................................... 228 1.102 251
Price 2....................................... 32 1.099 35
Price 3....................................... 21,396 1.097 23,470
Price 4....................................... 23,910 1.094 26,161
Price 5....................................... 101,354 1.092 110,687
Price 6....................................... 806 1.098 885
U.S. Government Securities Portfolio
Price 1....................................... 6,143 1.259 7,732
Price 2....................................... 29,647 1.253 37,148
Price 3....................................... 145,195 1.249 181,326
Price 4....................................... 22,572 1.243 28,064
Price 5....................................... 62,648 1.239 77,629
Price 6....................................... 210,497 1.250 263,168
</TABLE>
-11-
<PAGE> 13
NOTES TO FINANCIAL STATEMENTS - CONTINUED
4. NET CONTRACT OWNERS' EQUITY (CONTINUED)
<TABLE>
<CAPTION>
DECEMBER 31, 1998
--------------------------------------------
ACCUMULATION UNIT NET
UNITS VALUE ASSETS
<S> <C> <C> <C>
The Travelers Series Trust (continued)
Utilities Portfolio
Price 1....................................... 6,675 $ 1.514 $ 10,104
Price 2....................................... 1,413 1.507 2,130
Price 3....................................... 43,847 1.502 65,858
Price 4....................................... 15,300 1.495 22,879
Price 5....................................... 6,389 1.490 9,522
Price 6....................................... 77,322 1.504 116,267
Travelers Series Fund Inc.
Alliance Growth Portfolio
Price 1....................................... 32,748 1.753 57,420
Price 2....................................... 66,181 1.746 115,525
Price 3....................................... 571,621 1.740 994,484
Price 4....................................... 201,618 1.732 349,202
Price 5....................................... 121,866 1.726 210,370
Price 6....................................... 1,050,338 1.742 1,829,371
MFS Total Return Portfolio
Price 1....................................... 67,299 1.399 94,155
Price 2....................................... 85,454 1.393 119,021
Price 3....................................... 38,600 1.388 53,584
Price 4....................................... 114,873 1.382 158,754
Price 5....................................... 90,723 1.377 124,960
Price 6....................................... 338,122 1.390 469,897
Putnam Diversified Income Portfolio
Price 1....................................... 31,397 1.093 34,316
Price 2....................................... 36,325 1.088 39,525
Price 3....................................... 46,716 1.084 50,662
Price 4....................................... 89,751 1.080 96,899
Price 5....................................... 82,211 1.076 88,462
Price 6....................................... 95,775 1.086 103,981
Smith Barney International Equity Portfolio
Price 1....................................... 13,292 1.101 14,628
Price 2....................................... 4,211 1.096 4,614
Price 3....................................... 118,339 1.092 129,221
Price 4....................................... 54,366 1.087 59,101
Price 5....................................... 18,937 1.083 20,517
Price 6....................................... 180,603 1.093 197,433
</TABLE>
-12-
<PAGE> 14
NOTES TO FINANCIAL STATEMENTS - CONTINUED
4. NET CONTRACT OWNERS' EQUITY (CONTINUED)
<TABLE>
<CAPTION>
DECEMBER 31, 1998
--------------------------------------------
ACCUMULATION UNIT NET
UNITS VALUE ASSETS
<S> <C> <C> <C>
Travelers Series Fund Inc. (continued)
Smith Barney Money Market Portfolio
Price 2....................................... 2,799 $ 1.097 $ 3,072
Price 3....................................... 433,846 1.094 474,528
Price 4....................................... 371,996 1.089 405,048
Price 5....................................... 237,923 1.085 258,194
Price 6....................................... 296,260 1.095 324,401
Smith Barney High Income Portfolio
Price 2....................................... 2,810 1.173 3,298
Price 3....................................... 44,716 1.170 52,303
Price 4....................................... 14,828 1.165 17,270
Price 5....................................... 38,681 1.161 44,902
Price 6....................................... 131,098 1.171 153,512
Smith Barney Large Capitalization Growth Portfolio
Price 6....................................... 4,942 1.313 6,488
Smith Barney Large Cap Value Portfolio
Price 1....................................... 21,635 1.456 31,500
Price 2....................................... 7,331 1.449 10,626
Price 3....................................... 1,199,090 1.445 1,732,163
Price 4....................................... 81,366 1.438 117,010
Price 5....................................... 190,418 1.433 272,914
Price 6....................................... 509,575 1.446 736,936
Warburg Pincus Trust
Emerging Markets Portfolio
Price 2....................................... 285 1.079 308
Price 6....................................... 309 1.079 333
---------------
Net Contract Owners' Equity ................................................ $ 105,032,320
===============
</TABLE>
-13-
<PAGE> 15
NOTES TO FINANCIAL STATEMENTS - CONTINUED
5. STATEMENT OF INVESTMENTS
<TABLE>
<S> <C> <C>
INVESTMENT OPTIONS NO. OF MARKET
SHARES VALUE
------------------- --------------------
AMERICAN ODYSSEY FUNDS, INC. (38.2%)
American Odyssey Core Equity Fund (Cost $12,401,039) 642,714 $ 13,246,344
American Odyssey Emerging Opportunities Fund (Cost $6,677,088) 515,877 6,752,831
American Odyssey Intermediate-Term Bond Fund (Cost $3,132,748) 293,672 3,268,575
American Odyssey International Equity Fund (Cost $7,189,810) 454,475 7,657,899
American Odyssey Long-Term Bond Fund (Cost $6,342,446) 580,748 6,672,795
American Odyssey Global High-Yield Bond Fund (Cost $2,335,783) 230,282 2,284,397
------------------- --------------------
Total (Cost $38,078,914) 2,717,768 39,882,841
------------------- --------------------
CAPITAL APPRECIATION FUND (13.4%)
Total (Cost $10,105,340) 192,410 13,995,869
------------------- --------------------
DELAWARE GROUP PREMIUM FUND, INC. (0.0%)
Small Cap Value Series
Total (Cost $6,616) 444 7,310
------------------- --------------------
DREYFUS STOCK INDEX FUND (6.5%)
Total (Cost $5,610,363) 207,953 6,762,634
------------------- --------------------
DREYFUS VARIABLE INVESTMENT FUND (0.1%)
Capital Appreciation Portfolio (Cost $86,132) 2,644 95,476
Small Cap Portfolio (Cost $13,086) 267 14,407
------------------- --------------------
Total (Cost $99,218) 2,911 109,883
------------------- --------------------
FIDELITY'S VARIABLE INSURANCE PRODUCTS FUND (13.2%)
Equity-Income Portfolio (Cost $4,459,760) 192,714 4,898,800
Growth Portfolio (Cost $6,201,039) 176,244 7,908,067
High Income Portfolio (Cost $1,073,610) 86,609 998,608
------------------- --------------------
Total (Cost $11,734,409) 455,567 13,805,475
------------------- --------------------
FIDELITY'S VARIABLE INSURANCE PRODUCTS FUND II (2.1%)
Asset Manager Portfolio
Total (Cost $1,973,552) 117,667 2,136,827
------------------- --------------------
HIGH YIELD BOND TRUST (0.5%)
Total (Cost $472,135) 47,884 471,660
------------------- --------------------
MANAGED ASSETS TRUST (3.7%)
Total (Cost $3,578,390) 194,951 3,897,069
------------------- --------------------
MONEY MARKET PORTFOLIO (0.0%)
Total (Cost $29,313) 29,313 29,313
------------------- --------------------
OCC ACCUMULATION TRUST (0.0%)
Equity Portfolio
Total (Cost $2,219) 59 2,279
------------------- --------------------
</TABLE>
-14-
<PAGE> 16
NOTES TO FINANCIAL STATEMENTS - CONTINUED
5. STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
NO. OF MARKET
SHARES VALUE
------------------- --------------------
<S> <C> <C>
SALOMON BROTHERS VARIABLE SERIES FUNDS INC. (0.0%)
Salomon Brothers Variable Total Return Fund (Cost $6,695) 673 $ 6,995
Salomon Brothers Variable Capital Fund (Cost $4,916) 471 5,445
Salomon Brothers Variable Investors Fund (Cost $1,371) 150 1,650
------------------- --------------------
Total (Cost $12,982) 1,294 14,090
------------------- --------------------
STRONG VARIABLE INSURANCE FUNDS, INC. (0.0%)
Strong Schafer Value Fund II
Total (Cost $2,485) 298 3,006
------------------- --------------------
TEMPLETON VARIABLE PRODUCTS SERIES FUND (4.8%)
Templeton Asset Allocation Fund (Class 1 shares) (Cost $1,317,002) 58,412 1,311,932
Templeton Bond Fund (Class 1 shares) (Cost $59,120) 5,457 60,405
Templeton Stock Fund (Class 1 shares) (Cost $3,844,767) 170,335 3,588,958
------------------- --------------------
Total (Cost $5,220,889) 234,204 4,961,295
------------------- --------------------
THE MONTGOMERY FUNDS III (0.0%)
Montgomery Variable Series: Growth Fund
Total (Cost $348) 23 362
------------------- --------------------
THE TRAVELERS SERIES TRUST (7.6%)
Equity Income Portfolio (Cost $3,268,476) 222,808 3,433,477
Federated High Yield Portfolio (Cost $118,860) 10,184 113,142
Federated Stock Portfolio (Cost $715,151) 47,792 748,426
Large Cap Portfolio (Cost $739,810) 47,459 827,205
Lazard International Stock Portfolio (Cost $208,091) 16,753 215,779
MFS Mid Cap Growth Portfolio (Cost $2,189) 247 2,486
MFS Research Portfolio (Cost $12,716) 1,378 14,554
Social Awareness Stock Portfolio (Cost $1,423,691) 64,448 1,670,503
Strategic Stock Portfolio (Cost $889) 97 917
Disciplined Mid Cap Stock Portfolio (Cost $1,224) 104 1,491
Disciplined Small Cap Stock Portfolio (Cost $290) 35 309
Travelers Quality Bond Portfolio (Cost $163,506) 15,268 164,278
U.S. Government Securities Portfolio (Cost $571,455) 46,141 544,458
Utilities Portfolio (Cost $208,502) 13,107 225,181
------------------- --------------------
Total (Cost $7,434,850) 485,821 7,962,206
------------------- --------------------
</TABLE>
-15-
<PAGE> 17
NOTES TO FINANCIAL STATEMENTS - CONTINUED
5. STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
NO. OF MARKET
SHARES VALUE
------------------- --------------------
TRAVELERS SERIES FUND INC. (9.9%)
<S> <C> <C>
Alliance Growth Portfolio (Cost $3,000,688) 133,235 $ 3,505,417
MFS Total Return Portfolio (Cost $970,879) 59,697 1,016,636
Putnam Diversified Income Portfolio (Cost $418,710) 34,345 412,135
Smith Barney International Equity Portfolio (Cost $418,694) 30,848 423,854
Smith Barney Money Market Portfolio (Cost $1,780,707) 1,780,707 1,780,707
Smith Barney High Income Portfolio (Cost $278,503) 21,331 270,044
Smith Barney Large Capitalization Growth Portfolio (Cost $5,648) 527 6,461
Smith Barney Large Cap Value Portfolio (Cost $2,652,411) 143,115 2,892,349
------------------- --------------------
Total (Cost $9,526,240) 2,203,805 10,307,603
------------------- --------------------
WARBURG PINCUS TRUST (0.0%)
Emerging Markets Portfolio
Total (Cost $631) 78 641
------------------- --------------------
TOTAL INVESTMENT OPTIONS (100%)
(COST $93,888,894) $ 104,350,363
====================
</TABLE>
-16-
<PAGE> 18
This page intentionally left blank.
-17-
<PAGE> 19
NOTES TO FINANCIAL STATEMENTS - CONTINUED
6. SCHEDULE OF SEPARATE ACCOUNT QP OPERATIONS AND CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
<TABLE>
<CAPTION>
AMERICAN ODYSSEY CORE AMERICAN ODYSSEY EMERGING
EQUITY FUND OPPORTUNITIES FUND
----------------------------- -----------------------------
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends ............................................... $ 778,884 $ 87,344 $ - $ -
-------------- -------------- -------------- --------------
EXPENSES:
Insurance charges and administrative fees ............... 74,543 24,279 38,386 14,620
-------------- -------------- -------------- --------------
Net investment income (loss) ........................ 704,341 63,065 (38,386) (14,620)
-------------- -------------- -------------- --------------
REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss) from investment transactions:
Proceeds from investments sold......................... 532,980 118,791 79,470 121,895
Cost of investments sold .............................. 410,739 103,058 89,144 138,212
-------------- -------------- -------------- --------------
Net realized gain (loss)............................. 122,241 15,733 (9,674) (16,317)
-------------- -------------- -------------- --------------
Change in unrealized gain (loss) on investments:
Unrealized gain (loss) beginning of year............... 564,904 (21,402) 207,551 (38,832)
Unrealized gain (loss) end of year .................... 845,305 564,904 75,743 207,551
-------------- -------------- -------------- --------------
Net change in unrealized gain (loss) for the year.... 280,401 586,306 (131,808) 246,383
-------------- -------------- -------------- --------------
Net increase (decrease) in net assets
resulting from operations.............................. 1,106,983 665,104 (179,868) 215,446
-------------- -------------- -------------- --------------
UNIT TRANSACTIONS:
Participant purchase payments ........................... 8,607,345 1,522,927 4,653,864 925,080
Participant transfers from other Travelers accounts...... 835,387 1,866,761 570,915 1,184,245
Administrative and asset allocation charges ............. (85,560) (31,417) (48,757) (17,583)
Contract surrenders ..................................... (314,411) (53,114) (148,363) (54,954)
Participant transfers to other Travelers accounts........ (1,200,115) (121,293) (525,891) (121,415)
Other payments to participants .......................... (3,708) (3,508) (1,974) (1,396)
-------------- -------------- -------------- --------------
Net increase (decrease) in net assets
resulting from unit transactions .................... 7,838,938 3,180,356 4,499,794 1,913,977
-------------- -------------- -------------- --------------
Net increase (decrease) in net assets................ 8,945,921 3,845,460 4,319,926 2,129,423
NET ASSETS:
Beginning of year...................................... 4,382,029 536,569 2,487,336 357,913
-------------- -------------- -------------- --------------
End of year............................................ $13,327,950 $ 4,382,029 $ 6,807,262 $ 2,487,336
============== ============== ============== ==============
<CAPTION>
AMERICAN ODYSSEY INTERMEDIATE-
TERM BOND FUND
-----------------------------
1998 1997
---- ----
<S> <C> <C>
INVESTMENT INCOME:
Dividends ............................................... $ 8,054 $ 64,517
-------------- --------------
EXPENSES:
Insurance charges and administrative fees ............... 18,258 6,808
-------------- --------------
Net investment income (loss) ........................ (10,204) 57,709
-------------- --------------
REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss) from investment transactions:
Proceeds from investments sold......................... 142,913 89,043
Cost of investments sold .............................. 142,881 89,417
-------------- --------------
Net realized gain (loss)............................. 32 (374)
-------------- --------------
Change in unrealized gain (loss) on investments:
Unrealized gain (loss) beginning of year............... (16,747) (10,127)
Unrealized gain (loss) end of year .................... 135,827 (16,747)
-------------- --------------
Net change in unrealized gain (loss) for the year.... 152,574 (6,620)
-------------- --------------
Net increase (decrease) in net assets
resulting from operations.............................. 142,402 50,715
-------------- --------------
UNIT TRANSACTIONS:
Participant purchase payments ........................... 2,304,161 405,434
Participant transfers from other Travelers accounts...... 316,929 581,132
Administrative and asset allocation charges ............. (22,311) (8,454)
Contract surrenders ..................................... (67,704) (17,956)
Participant transfers to other Travelers accounts........ (484,991) (101,432)
Other payments to participants .......................... (6,950) (1,953)
-------------- --------------
Net increase (decrease) in net assets
resulting from unit transactions .................... 2,039,134 856,771
-------------- --------------
Net increase (decrease) in net assets................ 2,181,536 907,486
NET ASSETS:
Beginning of year...................................... 1,106,424 198,938
-------------- --------------
End of year............................................ $ 3,287,960 $ 1,106,424
============== ==============
</TABLE>
-18-
<PAGE> 20
NOTES TO FINANCIAL STATEMENTS - CONTINUED
<TABLE>
<CAPTION>
AMERICAN ODYSSEY INTERNATIONAL AMERICAN ODYSEEY LONG-TERM AMERICAN ODYSSEY GLOBAL HIGH-
EQUITY FUND BOND FUND YIELD BOND FUND CAPITAL APPRECIATION FUND
- ----------------------------- ----------------------------- ----------------------------- -----------------------------
1998 1997 1998 1997 1998 1997 1998 1997
---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
$ 217,795 $ 43,746 $ 64,308 $ 102,816 $ 320 $ 27,623 $ 188,889 $ 16
- -------------- -------------- -------------- -------------- -------------- -------------- -------------- --------------
40,662 12,342 35,885 10,585 12,102 3,369 67,205 13,740
- -------------- -------------- -------------- -------------- -------------- -------------- -------------- --------------
177,133 31,404 28,423 92,231 (11,782) 24,254 121,684 (13,724)
- -------------- -------------- -------------- -------------- -------------- -------------- -------------- --------------
37,449 96,178 67,489 55,502 13,974 48,918 164,935 234,322
32,718 88,805 64,476 54,370 14,480 49,041 113,843 218,081
- -------------- -------------- -------------- -------------- -------------- -------------- -------------- --------------
4,731 7,373 3,013 1,132 (506) (123) 51,092 16,241
- -------------- -------------- -------------- -------------- -------------- -------------- -------------- --------------
413 5,270 45,907 (11,169) (7,415) (3,899) 210,889 (18,413)
468,089 413 330,349 45,907 (51,386) (7,415) 3,890,529 210,889
- -------------- -------------- -------------- -------------- -------------- -------------- -------------- --------------
467,676 (4,857) 284,442 57,076 (43,971) (3,516) 3,679,640 229,302
- -------------- -------------- -------------- -------------- -------------- -------------- -------------- --------------
649,540 33,920 315,878 150,439 (56,259) 20,615 3,852,416 231,819
- -------------- -------------- -------------- -------------- -------------- -------------- -------------- --------------
5,123,803 891,264 4,728,497 780,837 1,550,136 227,183 6,056,836 1,169,906
403,511 1,067,137 486,012 845,088 633,063 249,308 2,589,399 1,180,301
(55,952) (17,735) (53,795) (17,204) (17,800) (4,646) (9,991) (4,878)
(130,464) (31,434) (112,099) (21,340) (48,798) (25,993) (331,368) (71,689)
(358,805) (115,412) (531,508) (83,245) (299,413) (38,976) (421,978) (174,370)
(737) (1,577) (1,254) (1,891) (240) (1,206) (5,352) -
- -------------- -------------- -------------- -------------- -------------- -------------- -------------- --------------
4,981,356 1,792,243 4,515,853 1,502,245 1,816,948 405,670 7,877,546 2,099,270
- -------------- -------------- -------------- -------------- -------------- -------------- -------------- --------------
5,630,896 1,826,163 4,831,731 1,652,684 1,760,689 426,285 11,729,962 2,331,089
2,087,099 260,936 1,890,861 238,177 543,853 117,568 2,632,853 301,764
- -------------- -------------- -------------- -------------- -------------- -------------- -------------- --------------
$ 7,717,995 $ 2,087,099 $ 6,722,592 $ 1,890,861 $ 2,304,542 $ 543,853 $ 14,362,815 $ 2,632,853
============== ============== ============== ============== ============== ============== ============== ==============
</TABLE>
-19-
<PAGE> 21
NOTES TO FINANCIAL STATEMENTS - CONTINUED
6. SCHEDULE OF SEPARATE ACCOUNT QP OPERATIONS AND CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997 (CONTINUED)
<TABLE>
<CAPTION>
SMALL CAP VALUE SERIES
----------------------------------------
1998 1997
---- ----
<S> <C> <C>
INVESTMENT INCOME:
Dividends ................................................... $ - $ -
------------------- -------------------
EXPENSES:
Insurance charges and administrative fees ................... 9 -
------------------- -------------------
Net investment income (loss) ............................ (9) -
------------------- -------------------
REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss) from investment transactions:
Proceeds from investments sold............................. 1 -
Cost of investments sold .................................. 1 -
------------------- -------------------
Net realized gain (loss)................................. - -
------------------- -------------------
Change in unrealized gain (loss) on investments:
Unrealized gain (loss) beginning of year................... - -
Unrealized gain (loss) end of year ........................ 694 -
------------------- -------------------
Net change in unrealized gain (loss) for the year........ 694 -
------------------- -------------------
Net increase (decrease) in net assets
resulting from operations.................................. 685 -
------------------- -------------------
UNIT TRANSACTIONS:
Participant purchase payments ............................... 6,487 -
Participant transfers from other Travelers accounts ......... 138 -
Administrative and asset allocation charges ................. (1) -
Contract surrenders ......................................... - -
Participant transfers to other Travelers accounts ........... - -
Other payments to participants .............................. - -
------------------- -------------------
Net increase (decrease) in net assets
resulting from unit transactions ........................ 6,624 -
------------------- -------------------
Net increase (decrease) in net assets.................... 7,309 -
NET ASSETS:
Beginning of year.......................................... - -
------------------- -------------------
End of year................................................ $ 7,309 $ -
=================== ===================
<CAPTION>
DREYFUS STOCK INDEX FUND
----------------------------------------
1998 1997
---- ----
<S> <C> <C>
INVESTMENT INCOME:
Dividends ................................................... $ 79,896 $ 88,453
------------------- -------------------
EXPENSES:
Insurance charges and administrative fees ................... 49,821 12,714
------------------- -------------------
Net investment income (loss) ............................ 30,075 75,739
------------------- -------------------
REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss) from investment transactions:
Proceeds from investments sold............................. 583,574 46,835
Cost of investments sold .................................. 431,835 38,298
------------------- -------------------
Net realized gain (loss)................................. 151,739 8,537
------------------- -------------------
Change in unrealized gain (loss) on investments:
Unrealized gain (loss) beginning of year................... 204,369 (2,689)
Unrealized gain (loss) end of year ........................ 1,152,271 204,369
------------------- -------------------
Net change in unrealized gain (loss) for the year........ 947,902 207,058
------------------- -------------------
Net increase (decrease) in net assets
resulting from operations.................................. 1,129,716 291,334
------------------- -------------------
UNIT TRANSACTIONS:
Participant purchase payments ............................... 2,003,579 1,000,882
Participant transfers from other Travelers accounts ......... 1,982,993 1,221,050
Administrative and asset allocation charges ................. (11,560) (6,442)
Contract surrenders ......................................... (266,362) (19,567)
Participant transfers to other Travelers accounts ........... (640,642) (71,185)
Other payments to participants .............................. (35) -
------------------- -------------------
Net increase (decrease) in net assets
resulting from unit transactions ........................ 3,067,973 2,124,738
------------------- -------------------
Net increase (decrease) in net assets.................... 4,197,689 2,416,072
NET ASSETS:
Beginning of year.......................................... 2,635,678 219,606
------------------- -------------------
End of year................................................ $ 6,833,367 $ 2,635,678
=================== ===================
<CAPTION>
DREYFUS CAPITAL APPRECIATION PORTFOLIO
---------------------------------------
1998 1997
---- ----
<S> <C> <C>
INVESTMENT INCOME:
Dividends ................................................... $ 472 $ -
------------------- -------------------
EXPENSES:
Insurance charges and administrative fees ................... 137 -
------------------- -------------------
Net investment income (loss) ............................ 335 -
------------------- -------------------
REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss) from investment transactions:
Proceeds from investments sold............................. 2,378 -
Cost of investments sold .................................. 2,754 -
------------------- -------------------
Net realized gain (loss)................................. (376) -
------------------- -------------------
Change in unrealized gain (loss) on investments:
Unrealized gain (loss) beginning of year................... - -
Unrealized gain (loss) end of year ........................ 9,344 -
------------------- -------------------
Net change in unrealized gain (loss) for the year........ 9,344 -
------------------- -------------------
Net increase (decrease) in net assets
resulting from operations.................................. 9,303 -
------------------- -------------------
UNIT TRANSACTIONS:
Participant purchase payments ............................... 79,471 -
Participant transfers from other Travelers accounts ......... 6,910 -
Administrative and asset allocation charges ................. (3) -
Contract surrenders ......................................... - -
Participant transfers to other Travelers accounts ........... - -
Other payments to participants .............................. - -
------------------- -------------------
Net increase (decrease) in net assets
resulting from unit transactions ........................ 86,378 -
------------------- -------------------
Net increase (decrease) in net assets.................... 95,681 -
NET ASSETS:
Beginning of year.......................................... - -
------------------- -------------------
End of year................................................ $ 95,681 $ -
=================== ===================
</TABLE>
-20-
<PAGE> 22
NOTES TO FINANCIAL STATEMENTS - CONTINUED
<TABLE>
<CAPTION>
SMALL CAP PORTFOLIO FIDELITY'S EQUITY-INCOME PORTFOLIO GROWTH PORTFOLIO HIGH INCOME PORTFOLIO
- --------------------------- ----------------------------------- --------------------------- ----------------------------
1998 1997 1998 1997 1998 1997 1998 1997
- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
$ - $ - $ 185,248 $ 55,882 $ 599,838 $ 35,243 $ 68,817 $ 9,591
- ------------- ------------ -------------- -------------------- ------------- ------------- ------------- -------------
17 - 40,227 14,303 56,749 24,791 8,145 3,108
- ------------- ------------ -------------- -------------------- ------------- ------------- ------------- -------------
(17) - 145,021 41,579 543,089 10,452 60,672 6,483
- ------------- ------------ -------------- -------------------- ------------- ------------- ------------- -------------
- - 424,549 138,553 867,644 520,892 77,977 79,709
- - 371,238 128,051 747,632 491,842 79,839 74,248
- ------------- ------------ -------------- -------------------- ------------- ------------- ------------- -------------
- - 53,311 10,502 120,012 29,050 (1,862) 5,461
- ------------- ------------ -------------- -------------------- ------------- ------------- ------------- -------------
- - 269,253 6,592 430,230 (4,458) 37,195 1,104
1,321 - 439,040 269,253 1,707,028 430,230 (75,002) 37,195
- ------------- ------------ -------------- -------------------- ------------- ------------- ------------- -------------
1,321 - 169,787 262,661 1,276,798 434,688 (112,197) 36,091
- ------------- ------------ -------------- -------------------- ------------- ------------- ------------- -------------
1,304 - 368,119 314,742 1,939,899 474,190 (53,387) 48,035
- ------------- ------------ -------------- -------------------- ------------- ------------- ------------- -------------
6,079 - 1,388,924 876,317 1,771,297 1,352,968 374,465 211,121
7,162 - 1,022,092 1,203,806 1,171,473 2,207,355 280,978 247,002
(1) - (8,526) (5,706) (11,315) (8,555) (1,352) (874)
- - (201,484) (21,095) (341,990) (167,086) (31,080) (5,521)
- - (378,363) (59,826) (807,183) (453,384) (82,195) (76,274)
- - (2,713) - - - - -
- ------------- ------------ -------------- -------------------- ------------- ------------- ------------- -------------
13,240 - 1,819,930 1,993,496 1,782,282 2,931,298 540,816 375,454
- ------------- ------------ -------------- -------------------- ------------- ------------- ------------- -------------
14,544 - 2,188,049 2,308,238 3,722,181 3,405,488 487,429 423,489
- - 2,743,522 435,284 4,204,099 798,611 516,587 93,098
- ------------- ------------ -------------- -------------------- ------------- ------------- ------------- -------------
$ 14,544 $ - $ 4,931,571 $ 2,743,522 $ 7,926,280 $ 4,204,099 $ 1,004,016 $ 516,587
============= ============ ============== ==================== ============= ============= ============= =============
</TABLE>
-21-
<PAGE> 23
NOTES TO FINANCIAL STATEMENTS - CONTINUED
6. SCHEDULE OF SEPARATE ACCOUNT QP OPERATIONS AND CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997 (CONTINUED)
<TABLE>
<CAPTION>
ASSET MANAGER PORTFOLIO HIGH YIELD BOND TRUST
------------------------------- ------------------------------
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends ................................................. $ 194,693 $ 50,090 $ 14,615 $ 31
-------------- --------------- ------------- ---------------
EXPENSES:
Insurance charges and administrative fees ................. 18,903 8,923 2,370 215
-------------- --------------- ------------- ---------------
Net investment income (loss) .......................... 175,790 41,167 12,245 (184)
-------------- --------------- ------------- ---------------
REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss) from investment transactions:
Proceeds from investments sold........................... 517,835 232,562 19,130 1,956
Cost of investments sold ................................ 488,475 241,650 17,052 1,848
-------------- --------------- ------------- ---------------
Net realized gain (loss)............................... 29,360 (9,088) 2,078 108
-------------- --------------- ------------- ---------------
Change in unrealized gain (loss) on investments:
Unrealized gain (loss) beginning of year................. 123,427 293 2,457 (510)
Unrealized gain (loss) end of year ...................... 163,275 123,427 (475) 2,457
-------------- --------------- ------------- ---------------
Net change in unrealized gain (loss) for the year...... 39,848 123,134 (2,932) 2,967
-------------- --------------- ------------- ---------------
Net increase (decrease) in net assets
resulting from operations................................ 244,998 155,213 11,391 2,891
-------------- --------------- ------------- ---------------
UNIT TRANSACTIONS:
Participant purchase payments ............................. 397,327 282,345 422,549 32,086
Participant transfers from other Travelers accounts ....... 392,233 1,014,296 8,496 11,716
Administrative and asset allocation charges ............... (2,963) (2,517) (232) (171)
Contract surrenders ....................................... (62,702) (83,597) (3,320) (1,731)
Participant transfers to other Travelers accounts ......... (349,983) (138,539) (16,689) (405)
Other payments to participants ............................ - (10,616) - -
-------------- --------------- ------------- ---------------
Net increase (decrease) in net assets
resulting from unit transactions ...................... 373,912 1,061,372 410,804 41,495
-------------- --------------- ------------- ---------------
Net increase (decrease) in net assets.................. 618,910 1,216,585 422,195 44,386
NET ASSETS:
Beginning of year........................................ 1,521,376 304,791 51,110 6,724
-------------- --------------- ------------- ---------------
End of year.............................................. $ 2,140,286 $ 1,521,376 $ 473,305 $ 51,110
============== =============== ============= ===============
<CAPTION>
MANAGED ASSETS TRUST
---------------------------------------
1998 1997
---- ----
<S> <C> <C>
INVESTMENT INCOME:
Dividends ................................................. $ 127,211 $ 19,890
------------------- -------------------
EXPENSES:
Insurance charges and administrative fees ................. 19,693 3,018
------------------- -------------------
Net investment income (loss) .......................... 107,518 16,872
------------------- -------------------
REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss) from investment transactions:
Proceeds from investments sold........................... 86,231 32,296
Cost of investments sold ................................ 76,610 29,246
------------------- -------------------
Net realized gain (loss)............................... 9,621 3,050
------------------- -------------------
Change in unrealized gain (loss) on investments:
Unrealized gain (loss) beginning of year................. 24,124 (5,672)
Unrealized gain (loss) end of year ...................... 318,679 24,124
------------------- -------------------
Net change in unrealized gain (loss) for the year...... 294,555 29,796
------------------- -------------------
Net increase (decrease) in net assets
resulting from operations................................ 411,694 49,718
------------------- -------------------
UNIT TRANSACTIONS:
Participant purchase payments ............................. 2,555,096 208,049
Participant transfers from other Travelers accounts ....... 450,844 455,233
Administrative and asset allocation charges ............... (2,014) (1,169)
Contract surrenders ....................................... (64,887) (30,110)
Participant transfers to other Travelers accounts ......... (195,581) (8,513)
Other payments to participants ............................ - -
------------------- -------------------
Net increase (decrease) in net assets
resulting from unit transactions ...................... 2,743,458 623,490
------------------- -------------------
Net increase (decrease) in net assets.................. 3,155,152 673,208
NET ASSETS:
Beginning of year........................................ 755,072 81,864
------------------- -------------------
End of year.............................................. $ 3,910,224 $ 755,072
=================== ===================
</TABLE>
-22-
<PAGE> 24
NOTES TO FINANCIAL STATEMENTS - CONTINUED
<TABLE>
<CAPTION>
MONEY MARKET PORTFOLIO EQUITY PORTFOLIO SALOMON BROTHERS VARIABLE SALOMON BROTHERS VARIABLE
TOTAL RETURN FUND CAPITAL FUND
- ------------------------------ ------------------------------- ------------------------------ -----------------------------
1998 1997 1998 1997 1998 1997 1998 1997
- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
$ 370 $ - $ - $ - $ 123 $ - $ 114 $ -
- ------------- --------------- -------------- ---------------- -------------- --------------- -------------- -------------
66 - 1 - 15 - 6 -
- ------------- --------------- -------------- ---------------- -------------- --------------- -------------- -------------
304 - (1) - 108 - 108 -
- ------------- --------------- -------------- ---------------- -------------- --------------- -------------- -------------
5,317 - - - 12 - 1 -
5,317 - - - 12 - 1 -
- ------------- --------------- -------------- ---------------- -------------- --------------- -------------- -------------
- - - - - - - -
- ------------- --------------- -------------- ---------------- -------------- --------------- -------------- -------------
- - - - - - - -
- - 60 - 300 - 529 -
- ------------- --------------- -------------- ---------------- -------------- --------------- -------------- -------------
- - 60 - 300 - 529 -
- ------------- --------------- -------------- ---------------- -------------- --------------- -------------- -------------
304 - 59 - 408 - 637 -
- ------------- --------------- -------------- ---------------- -------------- --------------- -------------- -------------
34,223 - 1,584 - 6,708 - 4,920 -
2,726 - 711 - - - - -
- - - - - - - -
- - - - - - - -
(7,892) - - - - - - -
- - - - - - - -
- ------------- --------------- -------------- ---------------- -------------- --------------- -------------- -------------
29,057 - 2,295 - 6,708 - 4,920 -
- ------------- --------------- -------------- ---------------- -------------- --------------- -------------- -------------
29,361 - 2,354 - 7,116 - 5,557 -
- - - - - - - -
- ------------- --------------- -------------- ---------------- -------------- --------------- -------------- -------------
$ 29,361 $ - $ 2,354 $ - $ 7,116 $ - $ 5,557 $ -
============= =============== ============== ================ ============== =============== ============== =============
</TABLE>
-23-
<PAGE> 25
NOTES TO FINANCIAL STATEMENTS - CONTINUED
6. SCHEDULE OF SEPARATE ACCOUNT QP OPERATIONS AND CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997 (CONTINUED)
<TABLE>
<CAPTION>
SALOMON BROTHERS VARIABLE INVESTORS FUND
----------------------------------------
1998 1997
---- ----
<S> <C> <C>
INVESTMENT INCOME:
Dividends .................................................. $ 7 $ -
------------------- -------------------
EXPENSES:
Insurance charges and administrative fees .................. 3 -
------------------- -------------------
Net investment income (loss) ........................... 4 -
------------------- -------------------
REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss) from investment transactions:
Proceeds from investments sold............................ 3 -
Cost of investments sold ................................. 3 -
------------------- -------------------
Net realized gain (loss)................................ - -
------------------- -------------------
Change in unrealized gain (loss) on investments:
Unrealized gain (loss) beginning of year.................. - -
Unrealized gain (loss) end of year ....................... 279 -
------------------- -------------------
Net change in unrealized gain (loss) for the year....... 279 -
------------------- -------------------
Net increase (decrease) in net assets
resulting from operations................................. 283 -
------------------- -------------------
UNIT TRANSACTIONS:
Participant purchase payments .............................. 1,374 -
Participant transfers from other Travelers accounts ........ - -
Administrative and asset allocation charges ................ - -
Contract surrenders ........................................ - -
Participant transfers to other Travelers accounts .......... - -
Other payments to participants ............................. - -
------------------- -------------------
Net increase (decrease) in net assets
resulting from unit transactions ....................... 1,374 -
------------------- -------------------
Net increase (decrease) in net assets................... 1,657 -
NET ASSETS:
Beginning of year......................................... - -
------------------- -------------------
End of year............................................... $ 1,657 $ -
=================== ===================
<CAPTION>
STRONG SCHAFER VALUE FUND II
----------------------------------------
1998 1997
---- ----
<S> <C> <C>
INVESTMENT INCOME:
Dividends .................................................. $ 6 $ -
------------------- -------------------
EXPENSES:
Insurance charges and administrative fees .................. 4 -
------------------- -------------------
Net investment income (loss) ........................... 2 -
------------------- -------------------
REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss) from investment transactions:
Proceeds from investments sold............................ 1 -
Cost of investments sold ................................. 1 -
------------------- -------------------
Net realized gain (loss)................................ - -
------------------- -------------------
Change in unrealized gain (loss) on investments:
Unrealized gain (loss) beginning of year.................. - -
Unrealized gain (loss) end of year ....................... 521 -
------------------- -------------------
Net change in unrealized gain (loss) for the year....... 521 -
------------------- -------------------
Net increase (decrease) in net assets
resulting from operations................................. 523 -
------------------- -------------------
UNIT TRANSACTIONS:
Participant purchase payments .............................. 2,483 -
Participant transfers from other Travelers accounts ........ - -
Administrative and asset allocation charges ................ - -
Contract surrenders ........................................ - -
Participant transfers to other Travelers accounts .......... - -
Other payments to participants ............................. - -
------------------- -------------------
Net increase (decrease) in net assets
resulting from unit transactions ....................... 2,483 -
------------------- -------------------
Net increase (decrease) in net assets................... 3,006 -
NET ASSETS:
Beginning of year......................................... - -
------------------- -------------------
End of year............................................... $ 3,006 $ -
=================== ===================
<CAPTION>
TEMPLETON ASSET ALLOCATION FUND
(CLASS 1 SHARES)
---------------------------------------
1998 1997
---- ----
<S> <C> <C>
INVESTMENT INCOME:
Dividends .................................................. $ 56,623 $ 9,657
------------------- -------------------
EXPENSES:
Insurance charges and administrative fees .................. 12,529 5,376
------------------- -------------------
Net investment income (loss) ........................... 44,094 4,281
------------------- -------------------
REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss) from investment transactions:
Proceeds from investments sold............................ 277,034 90,577
Cost of investments sold ................................. 251,707 87,464
------------------- -------------------
Net realized gain (loss)................................ 25,327 3,113
------------------- -------------------
Change in unrealized gain (loss) on investments:
Unrealized gain (loss) beginning of year.................. 12,534 1,700
Unrealized gain (loss) end of year ....................... (5,070) 12,534
------------------- -------------------
Net change in unrealized gain (loss) for the year....... (17,604) 10,834
------------------- -------------------
Net increase (decrease) in net assets
resulting from operations................................. 51,817 18,228
------------------- -------------------
UNIT TRANSACTIONS:
Participant purchase payments .............................. 419,275 305,884
Participant transfers from other Travelers accounts ........ 172,095 765,365
Administrative and asset allocation charges ................ (1,833) (1,347)
Contract surrenders ........................................ (88,444) (24,470)
Participant transfers to other Travelers accounts .......... (267,679) (99,429)
Other payments to participants ............................. (5,907) -
------------------- -------------------
Net increase (decrease) in net assets
resulting from unit transactions ....................... 227,507 946,003
------------------- -------------------
Net increase (decrease) in net assets................... 279,324 964,231
NET ASSETS:
Beginning of year......................................... 1,039,159 74,928
------------------- -------------------
End of year............................................... $ 1,318,483 $ 1,039,159
=================== ===================
</TABLE>
-24-
<PAGE> 26
NOTES TO FINANCIAL STATEMENTS - CONTINUED
<TABLE>
<CAPTION>
TEMPLETON BOND FUND TEMPLETON STOCK FUND MONTGOMERY VARIABLEH SERIES: EQUITY INCOMES PORTFOLIO
(CLASS 1 SHARES) (CLASS 1 SHARES) GROWTH FUND
- ------------------------------ ------------------------------ ------------------------------ ----------------------------
1998 1997 1998 1997 1998 1997 1998 1997
- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
$ 2,680 $ 1,317 $ 294,581 $ 62,572 $ 2 $ - $ 35,271 $ 2,913
- ------------- --------------- ------------- ---------------- --------------- -------------- ------------- -------------
505 277 31,169 14,688 1 - 14,011 85
- ------------- --------------- ------------- ---------------- --------------- -------------- ------------- -------------
2,175 1,040 263,412 47,884 1 - 21,260 2,828
- ------------- --------------- ------------- ---------------- --------------- -------------- ------------- -------------
4,190 21,002 685,171 372,868 - - 82,193 -
3,994 21,729 715,644 358,071 - - 81,964 -
- ------------- --------------- ------------- ---------------- --------------- -------------- ------------- -------------
196 (727) (30,473) 14,797 - - 229 -
- ------------- --------------- ------------- ---------------- --------------- -------------- ------------- -------------
708 196 (6,013) 13,100 - - (1,024) -
1,285 708 (255,809) (6,013) 14 - 165,001 (1,024)
- ------------- --------------- ------------- ---------------- --------------- -------------- ------------- -------------
577 512 (249,796) (19,113) 14 - 166,025 (1,024)
- ------------- --------------- ------------- ---------------- --------------- -------------- ------------- -------------
2,948 825 (16,857) 43,568 15 - 187,514 1,804
- ------------- --------------- ------------- ---------------- --------------- -------------- ------------- -------------
25,355 15,927 1,163,126 833,381 346 - 3,275,299 74,982
2,096 23,304 883,961 1,515,316 - - 33,809 -
(91) (101) (5,125) (3,865) - - - -
(311) (10,143) (237,897) (100,476) - - (12,634) -
(4,014) (10,954) (701,931) (163,163) - - (119,198) -
- - (2,175) - - - - -
- ------------- --------------- ------------- ---------------- --------------- -------------- ------------- -------------
23,035 18,033 1,099,959 2,081,193 346 - 3,177,276 74,982
- ------------- --------------- ------------- ---------------- --------------- -------------- ------------- -------------
25,983 18,858 1,083,102 2,124,761 361 - 3,364,790 76,786
34,699 15,841 2,524,096 399,335 - - 76,786 -
- ------------- --------------- ------------- ---------------- --------------- -------------- ------------- -------------
$ 60,682 $ 34,699 $ 3,607,198 $ 2,524,096 $ 361 $ - $ 3,441,576 $ 76,786
============= =============== ============= ================ =============== ============== ============= =============
</TABLE>
-25-
<PAGE> 27
NOTES TO FINANCIAL STATEMENTS - CONTINUED
6. SCHEDULE OF SEPARATE ACCOUNT QP OPERATIONS AND CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997 (CONTINUED)
<TABLE>
<CAPTION>
FEDERATED HIGH YIELD PORTFOLIO
----------------------------------------
1998 1997
---- ----
<S> <C> <C>
INVESTMENT INCOME:
Dividends ................................................. $ 7,706 $ 161
------------------- -------------------
EXPENSES:
Insurance charges and administrative fees ................. 478 2
------------------- -------------------
Net investment income (loss) .......................... 7,228 159
------------------- -------------------
REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss) from investment transactions:
Proceeds from investments sold........................... 10,006 -
Cost of investments sold ................................ 10,126 -
------------------- -------------------
Net realized gain (loss)............................... (120) -
------------------- -------------------
Change in unrealized gain (loss) on investments:
Unrealized gain (loss) beginning of year................. (132) -
Unrealized gain (loss) end of year ...................... (5,718) (132)
------------------- -------------------
Net change in unrealized gain (loss) for the year...... (5,586) (132)
------------------- -------------------
Net increase (decrease) in net assets
resulting from operations................................ 1,522 27
------------------- -------------------
UNIT TRANSACTIONS:
Participant purchase payments ............................. 126,467 3,248
Participant transfers from other Travelers accounts ....... 2,616 -
Administrative and asset allocation charges ............... - -
Contract surrenders ....................................... (3,199) -
Participant transfers to other Travelers accounts ......... (8,922) -
Other payments to participants ............................ - -
------------------- -------------------
Net increase (decrease) in net assets
resulting from unit transactions ...................... 116,962 3,248
------------------- -------------------
Net increase (decrease) in net assets.................. 118,484 3,275
NET ASSETS:
Beginning of year........................................ 3,275 -
------------------- -------------------
End of year.............................................. $ 121,759 $ 3,275
=================== ===================
<CAPTION>
FEDERATED STOCK PORTFOLIO
---------------------------------------
1998 1997
---- ----
<S> <C> <C>
INVESTMENT INCOME:
Dividends ................................................. $ 27,639 $ 1,351
------------------ -------------------
EXPENSES:
Insurance charges and administrative fees ................. 3,098 29
------------------ -------------------
Net investment income (loss) .......................... 24,541 1,322
------------------ -------------------
REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss) from investment transactions:
Proceeds from investments sold........................... 2,845 -
Cost of investments sold ................................ 2,981 -
------------------ -------------------
Net realized gain (loss)............................... (136) -
------------------ -------------------
Change in unrealized gain (loss) on investments:
Unrealized gain (loss) beginning of year................. (841) -
Unrealized gain (loss) end of year ...................... 33,275 (841)
------------------ -------------------
Net change in unrealized gain (loss) for the year...... 34,116 (841)
------------------ -------------------
Net increase (decrease) in net assets
resulting from operations................................ 58,521 481
------------------ -------------------
UNIT TRANSACTIONS:
Participant purchase payments ............................. 699,318 23,821
Participant transfers from other Travelers accounts ....... 5,035 -
Administrative and asset allocation charges ............... - -
Contract surrenders ....................................... (2,123) -
Participant transfers to other Travelers accounts ......... (6,451) -
Other payments to participants ............................ - -
------------------ -------------------
Net increase (decrease) in net assets
resulting from unit transactions ...................... 695,779 23,821
------------------ -------------------
Net increase (decrease) in net assets.................. 754,300 24,302
NET ASSETS:
Beginning of year........................................ 24,302 -
------------------ -------------------
End of year.............................................. $ 778,602 $ 24,302
================== ===================
<CAPTION>
LARGE CAP PORTFOLIO
---------------------------------------
1998 1997
---- ----
<S> <C> <C>
INVESTMENT INCOME:
Dividends ................................................. $ 35,965 $ 299
------------------- -------------------
EXPENSES:
Insurance charges and administrative fees ................. 3,100 25
------------------- -------------------
Net investment income (loss) .......................... 32,865 274
------------------- -------------------
REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss) from investment transactions:
Proceeds from investments sold........................... 9,677 -
Cost of investments sold ................................ 8,598 -
------------------- -------------------
Net realized gain (loss)............................... 1,079 -
------------------- -------------------
Change in unrealized gain (loss) on investments:
Unrealized gain (loss) beginning of year................. 81
Unrealized gain (loss) end of year ...................... 87,395 81
------------------- -------------------
Net change in unrealized gain (loss) for the year...... 87,314 81
------------------- -------------------
Net increase (decrease) in net assets
resulting from operations................................ 121,258 355
------------------- -------------------
UNIT TRANSACTIONS:
Participant purchase payments ............................. 698,561 19,154
Participant transfers from other Travelers accounts ....... 16,471 14
Administrative and asset allocation charges ............... - -
Contract surrenders ....................................... (7,630) -
Participant transfers to other Travelers accounts ......... (19,072) -
Other payments to participants ............................ (325) -
------------------- -------------------
Net increase (decrease) in net assets
resulting from unit transactions ...................... 688,005 19,168
------------------- -------------------
Net increase (decrease) in net assets.................. 809,263 19,523
NET ASSETS:
Beginning of year........................................ 19,523 -
------------------- -------------------
End of year.............................................. $ 828,786 $ 19,523
=================== ===================
</TABLE>
-26-
<PAGE> 28
NOTES TO FINANCIAL STATEMENTS - CONTINUED
<TABLE>
<CAPTION>
LAZARD INTERNATIONAL STOCK PORTFOLIO MFS MID CAP GROWTH PORTFOLIO MFS RESEARCH PORTFOLIO
- ----------------------------------------- ---------------------------------------- ---------------------------------------
1998 1997 1998 1997 1998 1997
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
$ 2,386 $ 37 $ - $ - $ 23 $ -
- -------------------- ------------------- ------------------- -------------------- ------------------- -------------------
812 7 3 - 16 -
- -------------------- ------------------- ------------------- -------------------- ------------------- -------------------
1,574 30 (3) - 7 -
- -------------------- ------------------- ------------------- -------------------- ------------------- -------------------
2,994 - - - 3 -
2,988 - - - 3 -
- -------------------- ------------------- ------------------- -------------------- ------------------- -------------------
6 - - - - -
- -------------------- ------------------- ------------------- -------------------- ------------------- -------------------
(51) - - - - -
7,688 (51) 297 - 1,838 -
- -------------------- ------------------- ------------------- -------------------- ------------------- -------------------
7,739 (51) 297 - 1,838 -
- -------------------- ------------------- ------------------- -------------------- ------------------- -------------------
9,319 (21) 294 - 1,845 -
- -------------------- ------------------- ------------------- -------------------- ------------------- -------------------
200,117 5,009 2,191 - 7,730 -
8,340 - - - 5,000 -
- - - - - -
(494) - - - - -
(3,676) - - - - -
- - - - - -
- -------------------- ------------------- ------------------- -------------------- ------------------- -------------------
204,287 5,009 2,191 - 12,730 -
- -------------------- ------------------- ------------------- -------------------- ------------------- -------------------
213,606 4,988 2,485 - 14,575 -
4,988 - - - - -
- -------------------- ------------------- ------------------- -------------------- ------------------- -------------------
$ 218,594 $ 4,988 $ 2,485 $ - $ 14,575 $ -
==================== =================== =================== ==================== =================== ===================
<CAPTION>
SOCIAL AWARENESS STOCK PORTFOLIO
----------------------------------------
1998 1997
---- ----
<S> <C>
$ 19,662 $ -
------------------- -------------------
8,672 1,029
------------------- -------------------
10,990 (1,029)
------------------- -------------------
14,800 16,419
11,286 14,181
------------------- -------------------
3,514 2,238
------------------- -------------------
14,085 (1,750)
246,812 14,085
------------------- -------------------
232,727 15,835
------------------- -------------------
247,231 17,044
------------------- -------------------
969,060 130,586
266,786 89,751
(1,403) (628)
(31,250) (1,822)
(29,363) (15,645)
(1,789) -
------------------- -------------------
1,172,041 202,242
------------------- -------------------
1,419,272 219,286
256,244 36,958
------------------- -------------------
$ 1,675,516 $ 256,244
=================== ===================
</TABLE>
-27-
<PAGE> 29
NOTES TO FINANCIAL STATEMENTS - CONTINUED
6. SCHEDULE OF SEPARATE ACCOUNT QP OPERATIONS AND CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997 (CONTINUED)
<TABLE>
<CAPTION>
STRATEGIC STOCK PORTFOLIO
----------------------------------------
1998 1997
---- ----
<S> <C> <C>
INVESTMENT INCOME:
Dividends .................................................. $ 11 $ -
------------------- -------------------
EXPENSES:
Insurance charges and administrative fees .................. 1 -
------------------- -------------------
Net investment income (loss) ........................... 10 -
------------------- -------------------
REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss) from investment transactions:
Proceeds from investments sold............................ - -
Cost of investments sold ................................. - -
------------------- -------------------
Net realized gain (loss)................................ - -
------------------- -------------------
Change in unrealized gain (loss) on investments:
Unrealized gain (loss) beginning of year.................. - -
Unrealized gain (loss) end of year ....................... 28 -
------------------- -------------------
Net change in unrealized gain (loss) for the year....... 28 -
------------------- -------------------
Net increase (decrease) in net assets
resulting from operations................................. 38 -
------------------- -------------------
UNIT TRANSACTIONS:
Participant purchase payments .............................. 890 -
Participant transfers from other Travelers accounts ........ - -
Administrative and asset allocation charges ................ - -
Contract surrenders ........................................ - -
Participant transfers to other Travelers accounts .......... - -
Other payments to participants ............................. - -
------------------- -------------------
Net increase (decrease) in net assets
resulting from unit transactions ....................... 890 -
------------------- -------------------
Net increase (decrease) in net assets................... 928 -
NET ASSETS:
Beginning of year......................................... - -
------------------- -------------------
End of year............................................... $ 928 $ -
=================== ===================
<CAPTION>
DISCIPLINED MID CAP STOCK PORTFOLIO
----------------------------------------
1998 1997
---- ----
<S> <C> <C>
INVESTMENT INCOME:
Dividends .................................................. $ - $ -
------------------- -------------------
EXPENSES:
Insurance charges and administrative fees .................. 2 -
------------------- -------------------
Net investment income (loss) ........................... (2) -
------------------- -------------------
REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss) from investment transactions:
Proceeds from investments sold............................ - -
Cost of investments sold ................................. - -
------------------- -------------------
Net realized gain (loss)................................ - -
------------------- -------------------
Change in unrealized gain (loss) on investments:
Unrealized gain (loss) beginning of year.................. - -
Unrealized gain (loss) end of year ....................... 267 -
------------------- -------------------
Net change in unrealized gain (loss) for the year....... 267 -
------------------- -------------------
Net increase (decrease) in net assets
resulting from operations................................. 265 -
------------------- -------------------
UNIT TRANSACTIONS:
Participant purchase payments .............................. 1,226 -
Participant transfers from other Travelers accounts ........ - -
Administrative and asset allocation charges ................ - -
Contract surrenders ........................................ - -
Participant transfers to other Travelers accounts .......... - -
Other payments to participants ............................. - -
------------------- -------------------
Net increase (decrease) in net assets
resulting from unit transactions ....................... 1,226 -
------------------- -------------------
Net increase (decrease) in net assets................... 1,491 -
NET ASSETS:
Beginning of year......................................... - -
------------------- -------------------
End of year............................................... $ 1,491 $ -
=================== ===================
<CAPTION>
DISCIPLINED SMALL CAP STOCK PORTFOLIO
---------------------------------------
1998 1997
---- ----
<S> <C> <C>
INVESTMENT INCOME:
Dividends .................................................. $ 1 $ -
------------------- -------------------
EXPENSES:
Insurance charges and administrative fees .................. - -
------------------- -------------------
Net investment income (loss) ........................... 1 -
------------------- -------------------
REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss) from investment transactions:
Proceeds from investments sold............................ - -
Cost of investments sold ................................. - -
------------------- -------------------
Net realized gain (loss)................................ - -
------------------- -------------------
Change in unrealized gain (loss) on investments:
Unrealized gain (loss) beginning of year.................. - -
Unrealized gain (loss) end of year ....................... 19 -
------------------- -------------------
Net change in unrealized gain (loss) for the year....... 19 -
------------------- -------------------
Net increase (decrease) in net assets
resulting from operations................................. 20 -
------------------- -------------------
UNIT TRANSACTIONS:
Participant purchase payments .............................. 290 -
Participant transfers from other Travelers accounts ........ - -
Administrative and asset allocation charges ................ - -
Contract surrenders ........................................ - -
Participant transfers to other Travelers accounts .......... - -
Other payments to participants ............................. - -
------------------- -------------------
Net increase (decrease) in net assets
resulting from unit transactions ....................... 290 -
------------------- -------------------
Net increase (decrease) in net assets................... 310 -
NET ASSETS:
Beginning of year......................................... - -
------------------- -------------------
End of year............................................... $ 310 $ -
=================== ===================
</TABLE>
-28-
<PAGE> 30
NOTES TO FINANCIAL STATEMENTS - CONTINUED
<TABLE>
<CAPTION>
TRAVELERS QUALITY BOND PORTFOLIO U.S. GOVERNMENT SECURITIES PORTFOLIO UTILITIES PORTFOLIO
- ----------------------------------------- ---------------------------------------- ---------------------------------------
1998 1997 1998 1997 1998 1997
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
$ 7,185 $ 281 $ 47,770 $ 5,447 $ 6,310 $ 46
- -------------------- ------------------- ------------------- -------------------- ------------------- -------------------
1,157 9 3,181 906 1,263 342
- -------------------- ------------------- ------------------- -------------------- ------------------- -------------------
6,028 272 44,589 4,541 5,047 (296)
- -------------------- ------------------- ------------------- -------------------- ------------------- -------------------
10,533 - 111,137 75,257 37,853 27,883
10,305 - 103,302 71,666 28,794 25,293
- -------------------- ------------------- ------------------- -------------------- ------------------- -------------------
228 - 7,835 3,591 9,059 2,590
- -------------------- ------------------- ------------------- -------------------- ------------------- -------------------
(208) - 254 (3,258) 5,887 (626)
772 (208) (26,997) 254 16,679 5,887
- -------------------- ------------------- ------------------- -------------------- ------------------- -------------------
980 (208) (27,251) 3,512 10,792 6,513
- -------------------- ------------------- ------------------- -------------------- ------------------- -------------------
7,236 64 25,173 11,644 24,898 8,807
- -------------------- ------------------- ------------------- -------------------- ------------------- -------------------
19,533 6,552 375,616 43,093 158,667 19,762
129,190 18,758 210,689 85,050 22,503 27,236
(32) (1) (381) (282) (296) (171)
(3,811) - (70,608) (52) (4,654) -
(16,000) - (61,263) (75,980) (10,268) (27,783)
- - - - - -
- -------------------- ------------------- ------------------- -------------------- ------------------- -------------------
128,880 25,309 454,053 51,829 165,952 19,044
- -------------------- ------------------- ------------------- -------------------- ------------------- -------------------
136,116 25,373 479,226 63,473 190,850 27,851
25,373 - 115,841 52,368 35,910 8,059
- -------------------- ------------------- ------------------- -------------------- ------------------- -------------------
$ 161,489 $ 25,373 $ 595,067 $ 115,841 $ 226,760 $ 35,910
==================== =================== =================== ==================== =================== ===================
<CAPTION>
ALLIANCE GROWTH PORTFOLIO
----------------------------------------
1998 1997
---- ----
<S> <C>
$ 91,534 $ -
------------------- -------------------
16,055 2,603
------------------- -------------------
75,479 (2,603)
------------------- -------------------
223,653 70,719
163,151 70,689
------------------- -------------------
60,502 30
------------------- -------------------
70,690 600
504,729 70,690
------------------- -------------------
434,039 70,090
------------------- -------------------
570,020 67,517
------------------- -------------------
2,282,713 259,629
555,866 286,871
(2,166) (987)
(59,650) (18,443)
(368,240) (63,435)
(1,002) -
------------------- -------------------
2,407,521 463,635
------------------- -------------------
2,977,541 531,152
578,831 47,679
------------------- -------------------
$ 3,556,372 $ 578,831
=================== ===================
</TABLE>
-29-
<PAGE> 31
NOTES TO FINANCIAL STATEMENTS - CONTINUED
6. SCHEDULE OF SEPARATE ACCOUNT QP OPERATIONS AND CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997 (CONTINUED)
<TABLE>
<CAPTION>
MFS TOTAL RETURN PORTFOLIO PUTNAM DIVERSIFIED INCOME PORTFOLIO
----------------------------- -----------------------------------
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends ................................................... $ 15,595 $ - $ 8,700 $ -
------------- -------------- ----------------- ----------------
EXPENSES:
Insurance charges and administrative fees ................... 4,642 343 2,197 313
------------- -------------- ----------------- ----------------
Net investment income (loss) ............................ 10,953 (343) 6,503 (313)
------------- -------------- ----------------- ----------------
REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss) from investment transactions:
Proceeds from investments sold............................. 94,451 5,982 7,216 11,085
Cost of investments sold .................................. 89,153 5,271 6,806 11,135
------------- -------------- ----------------- ----------------
Net realized gain (loss)................................. 5,298 711 410 (50)
------------- -------------- ----------------- ----------------
Change in unrealized gain (loss) on investments:
Unrealized gain (loss) beginning of year................... 6,172 (60) 1,821 (583)
Unrealized gain (loss) end of year ........................ 45,757 6,172 (6,575) 1,821
------------- -------------- ----------------- ----------------
Net change in unrealized gain (loss) for the year........ 39,585 6,232 (8,396) 2,404
------------- -------------- ----------------- ----------------
Net increase (decrease) in net assets
resulting from operations.................................. 55,836 6,600 (1,483) 2,041
------------- -------------- ----------------- ----------------
UNIT TRANSACTIONS:
Participant purchase payments ............................... 815,728 72,236 323,880 26,893
Participant transfers from other Travelers accounts ......... 147,496 123,820 33,098 33,656
Administrative and asset allocation charges ................. (250) (360) (158) (85)
Contract surrenders ......................................... (24,031) (6,229) (1,348) -
Participant transfers to other Travelers accounts ........... (167,522) (5,135) (9,517) (6,015)
Other payments to participants .............................. - - - -
------------- -------------- ----------------- ----------------
Net increase (decrease) in net assets
resulting from unit transactions ........................ 771,421 184,332 345,955 54,449
------------- -------------- ----------------- ----------------
Net increase (decrease) in net assets.................... 827,257 190,932 344,472 56,490
NET ASSETS:
Beginning of year.......................................... 193,114 2,182 69,373 12,883
------------- -------------- ----------------- ----------------
End of year................................................ $ 1,020,371 $ 193,114 $ 413,845 $ 69,373
============= ============== ================= ================
<CAPTION>
SMITH BARNEY INTERNATIONAL EQUITY
PORTFOLIO
---------------------------------------
1998 1997
---- ----
<S> <C> <C>
INVESTMENT INCOME:
Dividends ................................................... $ - $ -
------------------- -------------------
EXPENSES:
Insurance charges and administrative fees ................... 2,467 664
------------------- -------------------
Net investment income (loss) ............................ (2,467) (664)
------------------- -------------------
REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss) from investment transactions:
Proceeds from investments sold............................. 42,495 1,746
Cost of investments sold .................................. 39,601 1,711
------------------- -------------------
Net realized gain (loss)................................. 2,894 35
------------------- -------------------
Change in unrealized gain (loss) on investments:
Unrealized gain (loss) beginning of year................... (2,331) 115
Unrealized gain (loss) end of year ........................ 5,160 (2,331)
------------------- -------------------
Net change in unrealized gain (loss) for the year........ 7,491 (2,446)
------------------- -------------------
Net increase (decrease) in net assets
resulting from operations.................................. 7,918 (3,075)
------------------- -------------------
UNIT TRANSACTIONS:
Participant purchase payments ............................... 329,933 77,304
Participant transfers from other Travelers accounts ......... 20,658 55,248
Administrative and asset allocation charges ................. (453) (242)
Contract surrenders ......................................... (29,196) (373)
Participant transfers to other Travelers accounts ........... (39,709) (1,305)
Other payments to participants .............................. (156) -
------------------- -------------------
Net increase (decrease) in net assets
resulting from unit transactions ........................ 281,077 130,632
------------------- -------------------
Net increase (decrease) in net assets.................... 288,995 127,557
NET ASSETS:
Beginning of year.......................................... 136,519 8,962
------------------- -------------------
End of year................................................ $ 425,514 $ 136,519
=================== ===================
</TABLE>
-30-
<PAGE> 32
NOTES TO FINANCIAL STATEMENTS - CONTINUED
<TABLE>
<CAPTION>
SMITH BARNEY MONEY MARKET PORTFOLIO SMITH BARNEY HIGH INCOME PORTFOLIO SMITH BARNEY LARGE
CAPITALIZATION GROWTH PORTFOLIO
- ----------------------------------------- ---------------------------------------- ---------------------------------------
1998 1997 1998 1997 1998 1997
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
$ 54,916 $ 14,365 $ 10,154 $ - $ 4 $ -
- -------------------- ------------------- ------------------- -------------------- ------------------- -------------------
11,384 3,263 1,677 325 6 -
- -------------------- ------------------- ------------------- -------------------- ------------------- -------------------
43,532 11,102 8,477 (325) (2) -
- -------------------- ------------------- ------------------- -------------------- ------------------- -------------------
1,643,216 1,041,385 29,681 32,409 - -
1,643,216 1,041,385 29,649 30,550 - -
- -------------------- ------------------- ------------------- -------------------- ------------------- -------------------
- - 32 1,859 - -
- -------------------- ------------------- ------------------- -------------------- ------------------- -------------------
- - 4,038 (12) - -
- - (8,459) 4,038 813 -
- -------------------- ------------------- ------------------- -------------------- ------------------- -------------------
- - (12,497) 4,050 813 -
- -------------------- ------------------- ------------------- -------------------- ------------------- -------------------
43,532 11,102 (3,988) 5,584 811 -
- -------------------- ------------------- ------------------- -------------------- ------------------- -------------------
804,734 893,850 241,432 28,060 5,234 -
2,617,012 979,165 10,208 50,144 443 -
(1,700) (1,671) (245) (101) - -
(261,349) (14,600) (432) - - -
(1,955,135) (1,706,359) (31,355) (28,312) - -
- (8) - - - -
- -------------------- ------------------- ------------------- -------------------- ------------------- -------------------
1,203,562 150,377 219,608 49,791 5,677 -
- -------------------- ------------------- ------------------- -------------------- ------------------- -------------------
1,247,094 161,479 215,620 55,375 6,488 -
218,149 56,670 55,665 290 - -
- -------------------- ------------------- ------------------- -------------------- ------------------- -------------------
$ 1,465,243 $ 218,149 $ 271,285 $ 55,665 $ 6,488 $ -
==================== =================== =================== ==================== =================== ===================
<CAPTION>
SMITH BARNEY LARGE CAP VALUE PORTFOLIO
- ----------------------------------------
1998 1997
---- ----
<S> <C>
$ 79,547 $ -
- ------------------- -------------------
21,657 9,643
- ------------------- -------------------
57,890 (9,643)
- ------------------- -------------------
209,343 227,536
169,428 195,749
- ------------------- -------------------
39,915 31,787
- ------------------- -------------------
171,302 (2,821)
239,938 171,302
- ------------------- -------------------
68,636 174,123
- ------------------- -------------------
166,441 196,267
- ------------------- -------------------
1,133,256 439,570
393,081 792,742
(3,168) (2,549)
(72,849) (86,100)
(287,605) (44,029)
(10,181) -
- ------------------- -------------------
1,152,534 1,099,634
- ------------------- -------------------
1,318,975 1,295,901
1,582,174 286,273
- ------------------- -------------------
$ 2,901,149 $ 1,582,174
=================== ===================
</TABLE>
-31-
<PAGE> 33
NOTES TO FINANCIAL STATEMENTS - CONTINUED
6. SCHEDULE OF SEPARATE ACCOUNT QP OPERATIONS AND CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997 (CONTINUED)
<TABLE>
<CAPTION>
EMERGING MARKETS PORTFOLIO COMBINED
------------------------------ ---------------------------------
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends $ 4 $ - $ 3,333,929 $ 683,688
------------------- --------- ------------------ --------------
EXPENSES:
Insurance charges and administrative fees .................. - - 623,290 192,744
------------------- --------- ------------------ --------------
Net investment income (loss)............................ 4 - 2,710,639 490,944
------------------- --------- ------------------ --------------
REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss) from investment transactions:
Proceeds from investments sold............................ - - 7,122,354 3,812,320
Cost of investments sold.................................. - - 6,461,747 3,681,061
------------------- --------- ------------------ --------------
Net realized gain (loss)................................ - - 660,607 131,259
------------------- --------- ------------------ --------------
Change in unrealized gain (loss) on investments:
Unrealized gain (loss) beginning of year.................. - - 2,373,529 (97,311)
Unrealized gain (loss) end of year........................ 10 - 10,461,469 2,373,529
------------------- --------- ------------------ --------------
Net change in unrealized gain (loss) for the year ...... 10 - 8,087,940 2,470,840
------------------- --------- ------------------ --------------
Net increase (decrease) in net assets
resulting from operations ................................ 14 - 11,459,186 3,093,043
------------------- --------- ------------------ --------------
UNIT TRANSACTIONS:
Participant purchase payments .............................. 627 - 56,161,812 13,165,340
Participant transfers from other Travelers accounts ........ - - 16,698,425 18,180,870
Administrative and asset allocation charges ................ - - (349,434) (139,741)
Contract surrenders ...................................... - - (3,036,942) (867,895)
Participant transfers to other Travelers accounts .......... - - (10,408,149) (3,811,813)
Other payments to participants.............................. - - (44,498) (22,155)
------------------- --------- ------------------ --------------
Net increase (decrease) in net assets
resulting from unit transactions........................ 627 - 59,021,214 26,504,606
------------------- --------- ------------------ --------------
Net increase (decrease) in net assets .................. 641 - 70,480,400 29,597,649
NET ASSETS:
Beginning of year ...................................... - - 34,551,920 4,954,271
------------------- --------- ------------------ --------------
End of year............................................... $ 641 $ - $ 105,032,320 $ 34,551,920
------------------- --------- ------------------ --------------
</TABLE>
-32-
<PAGE> 34
NOTES TO FINANCIAL STATEMENTS - CONTINUED
7. SCHEDULE OF ACCUMULATION UNITS FOR SEPARATE ACCOUNT QP
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
<TABLE>
<CAPTION>
AMERICAN ODYSSEY CORE
EQUITY FUND
----------------------------------------
1998 1997
---- ----
<S> <C> <C>
Accumulation units beginning of year ............... 3,105,409 496,794
Accumulation units purchased and
transferred from other Travelers accounts......... 6,195,417 2,770,285
Accumulation units redeemed and
transferred to other Travelers accounts........... (1,053,440) (161,670)
------------------- -------------------
Accumulation units end of year ..................... 8,247,386 3,105,409
=================== ===================
<CAPTION>
AMERICAN ODYSSEY EMERGING
OPPORTUNITIES FUND
-----------------------------------------
1998 1997
---- ----
<S> <C> <C>
Accumulation units beginning of year ............... 2,650,714 404,384
Accumulation units purchased and
transferred from other Travelers accounts......... 6,202,256 2,462,311
Accumulation units redeemed and
transferred to other Travelers accounts........... (841,422) (215,981)
------------------- --------------------
Accumulation units end of year ..................... 8,011,548 2,650,714
=================== ====================
<CAPTION>
AMERICAN ODYSSEY INTERMEDIATE-TERM BOND
FUND
-----------------------------------------
1998 1997
---- ----
<S> <C> <C>
Accumulation units beginning of year ............... 1,022,117 195,701
Accumulation units purchased and
transferred from other Travelers accounts......... 2,322,437 949,256
Accumulation units redeemed and
transferred to other Travelers accounts........... (520,335) (122,840)
------------------- --------------------
Accumulation units end of year ..................... 2,824,219 1,022,117
=================== ====================
</TABLE>
<TABLE>
<CAPTION>
AMERICAN ODYSSEY INTERNATIONAL
EQUITY FUND
----------------------------------------
1998 1997
---- ----
<S> <C> <C>
Accumulation units beginning of year ............... 1,837,855 239,079
Accumulation units purchased and
transferred from other Travelers accounts......... 4,573,172 1,744,311
Accumulation units redeemed and
transferred to other Travelers accounts........... (442,479) (145,535)
------------------- -------------------
Accumulation units end of year ..................... 5,968,548 1,837,855
=================== ===================
<CAPTION>
AMERICAN ODYSSEY LONG-TERM BOND FUND
-----------------------------------------
1998 1997
---- ----
<S> <C> <C>
Accumulation units beginning of year ............... 1,666,359 232,943
Accumulation units purchased and
transferred from other Travelers accounts......... 4,406,484 1,549,126
Accumulation units redeemed and
transferred to other Travelers accounts........... (592,147) (115,710)
------------------- --------------------
Accumulation units end of year ..................... 5,480,696 1,666,359
=================== ====================
<CAPTION>
AMERICAN ODYSSEY GLOBAL HIGH-YIELD
BOND FUND
-----------------------------------------
1998 1997
---- ----
<S> <C> <C>
Accumulation units beginning of year ............... 512,296 116,408
Accumulation units purchased and
transferred from other Travelers accounts......... 2,110,059 464,443
Accumulation units redeemed and
transferred to other Travelers accounts........... (346,726) (68,555)
------------------- --------------------
Accumulation units end of year ..................... 2,275,629 512,296
=================== ====================
</TABLE>
<TABLE>
<CAPTION>
CAPITAL APPRECIATION FUND
----------------------------------------
1998 1997
---- ----
<S> <C> <C>
Accumulation units beginning of year ............... 2,050,734 293,629
Accumulation units purchased and
transferred from other Travelers accounts......... 5,427,762 1,967,175
Accumulation units redeemed and
transferred to other Travelers accounts........... (491,837) (210,070)
------------------- -------------------
Accumulation units end of year ..................... 6,986,659 2,050,734
=================== ===================
<CAPTION>
SMALL CAP VALUE SERIES
-----------------------------------------
1998 1997
---- ----
<S> <C> <C>
Accumulation units beginning of year ............... - -
Accumulation units purchased and
transferred from other Travelers accounts......... 6,526 -
Accumulation units redeemed and
transferred to other Travelers accounts........... (1) -
------------------- --------------------
Accumulation units end of year ..................... 6,525 -
=================== ====================
<CAPTION>
DREYFUS STOCK INDEX FUND
-----------------------------------------
1998 1997
---- ----
<S> <C> <C>
Accumulation units beginning of year ............... 1,860,344 204,067
Accumulation units purchased and
transferred from other Travelers accounts......... 2,520,515 1,731,536
Accumulation units redeemed and
transferred to other Travelers accounts........... (578,219) (75,259)
------------------- --------------------
Accumulation units end of year ..................... 3,802,640 1,860,344
=================== ====================
</TABLE>
<TABLE>
<CAPTION>
DREYFUS CAPITAL APPRECIATION PORTFOLIO
----------------------------------------
1998 1997
---- ----
<S> <C> <C>
Accumulation units beginning of year ............... - -
Accumulation units purchased and
transferred from other Travelers accounts......... 88,937 -
Accumulation units redeemed and
transferred to other Travelers accounts........... (2) -
------------------- -------------------
Accumulation units end of year ..................... 88,935 -
=================== ===================
<CAPTION>
SMALL CAP PORTFOLIO
-----------------------------------------
1998 1997
---- ----
<S> <C> <C>
Accumulation units beginning of year ............... - -
Accumulation units purchased and
transferred from other Travelers accounts......... 12,152 -
Accumulation units redeemed and
transferred to other Travelers accounts........... (1) -
------------------- --------------------
Accumulation units end of year ..................... 12,151 -
=================== ====================
<CAPTION>
FIDELITY'S EQUITY-INCOME PORTFOLIO
-----------------------------------------
1998 1997
---- ----
<S> <C> <C>
Accumulation units beginning of year ............... 2,073,960 417,374
Accumulation units purchased and
transferred from other Travelers accounts......... 1,730,725 1,723,184
Accumulation units redeemed and
transferred to other Travelers accounts........... (428,734) (66,598)
------------------- --------------------
Accumulation units end of year ..................... 3,375,951 2,073,960
=================== ====================
</TABLE>
-33-
<PAGE> 35
NOTES TO FINANCIAL STATEMENTS - CONTINUED
7. SCHEDULE OF ACCUMULATION UNITS FOR SEPARATE ACCOUNT QP
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997 (CONTINUED)
<TABLE>
<CAPTION>
GROWTH PORTFOLIO
----------------------------------------
1998 1997
---- ----
<S> <C> <C>
Accumulation units beginning of year ............... 3,463,256 804,434
Accumulation units purchased and
transferred from other Travelers accounts......... 2,104,492 3,234,083
Accumulation units redeemed and
transferred to other Travelers accounts........... (839,644) (575,261)
------------------- -------------------
Accumulation units end of year ..................... 4,728,104 3,463,256
=================== ===================
<CAPTION>
HIGH INCOME PORTFOLIO
-----------------------------------------
1998 1997
---- ----
<S> <C> <C>
Accumulation units beginning of year ............... 437,807 91,884
Accumulation units purchased and
transferred from other Travelers accounts......... 559,925 417,945
Accumulation units redeemed and
transferred to other Travelers accounts........... (99,040) (72,022)
------------------- --------------------
Accumulation units end of year ..................... 898,692 437,807
=================== ====================
<CAPTION>
ASSET MANAGER PORTFOLIO
-----------------------------------------
1998 1997
---- ----
<S> <C> <C>
Accumulation units beginning of year ............... 1,215,833 290,881
Accumulation units purchased and
transferred from other Travelers accounts......... 604,885 1,129,722
Accumulation units redeemed and
transferred to other Travelers accounts........... (318,781) (204,770)
------------------- --------------------
Accumulation units end of year ..................... 1,501,937 1,215,833
=================== ====================
</TABLE>
<TABLE>
<CAPTION>
HIGH YIELD BOND TRUST
----------------------------------------
1998 1997
---- ----
<S> <C> <C>
Accumulation units beginning of year ............... 42,945 6,520
Accumulation units purchased and
transferred from other Travelers accounts......... 349,942 38,412
Accumulation units redeemed and
transferred to other Travelers accounts........... (16,195) (1,987)
------------------- -------------------
Accumulation units end of year ..................... 376,692 42,945
=================== ===================
<CAPTION>
MANAGED ASSETS TRUST
-----------------------------------------
1998 1997
---- ----
<S> <C> <C>
Accumulation units beginning of year ............... 603,628 78,508
Accumulation units purchased and
transferred from other Travelers accounts......... 2,188,495 557,506
Accumulation units redeemed and
transferred to other Travelers accounts........... (196,394) (32,386)
------------------- --------------------
Accumulation units end of year ..................... 2,595,729 603,628
=================== ====================
<CAPTION>
MONEY MARKET PORTFOLIO
-----------------------------------------
1998 1997
---- ----
<S> <C> <C>
Accumulation units beginning of year ............... - -
Accumulation units purchased and
transferred from other Travelers accounts......... 36,825 -
Accumulation units redeemed and
transferred to other Travelers accounts........... (7,811) -
------------------- --------------------
Accumulation units end of year ..................... 29,014 -
=================== ====================
</TABLE>
<TABLE>
<CAPTION>
EQUITY PORTFOLIO
----------------------------------------
1998 1997
---- ----
<S> <C> <C>
Accumulation units beginning of year ............... - -
Accumulation units purchased and
transferred from other Travelers accounts......... 2,056 -
Accumulation units redeemed and
transferred to other Travelers accounts........... - -
------------------- -------------------
Accumulation units end of year ..................... 2,056 -
=================== ===================
<CAPTION>
SALOMON BROTHERS VARIABLE TOTAL
RETURN FUND
-----------------------------------------
1998 1997
---- ----
<S> <C> <C>
Accumulation units beginning of year ............... - -
Accumulation units purchased and
transferred from other Travelers accounts......... 6,719 -
Accumulation units redeemed and
transferred to other Travelers accounts........... - -
------------------- --------------------
Accumulation units end of year ..................... 6,719 -
=================== ====================
<CAPTION>
SALOMON BROTHERS VARIABLE CAPITAL FUND
-----------------------------------------
1998 1997
---- ----
<S> <C> <C>
Accumulation units beginning of year ............... - -
Accumulation units purchased and
transferred from other Travelers accounts......... 4,848 -
Accumulation units redeemed and
transferred to other Travelers accounts........... - -
------------------- --------------------
Accumulation units end of year ..................... 4,848 -
=================== ====================
</TABLE>
<TABLE>
<CAPTION>
SALOMON BROTHERS VARIABLE
INVESTORS FUND
----------------------------------------
1998 1997
---- ----
<S> <C> <C>
Accumulation units beginning of year ............... - -
Accumulation units purchased and
transferred from other Travelers accounts......... 1,374 -
Accumulation units redeemed and
transferred to other Travelers accounts........... - -
------------------- -------------------
Accumulation units end of year ..................... 1,374 -
=================== ===================
<CAPTION>
STRONG SCHAFER VALUE FUND II
-----------------------------------------
1998 1997
---- ----
<S> <C> <C>
Accumulation units beginning of year ............... - -
Accumulation units purchased and
transferred from other Travelers accounts......... 2,329 -
Accumulation units redeemed and
transferred to other Travelers accounts........... - -
------------------- --------------------
Accumulation units end of year ..................... 2,329 -
=================== ====================
<CAPTION>
TEMPLETON ASSET ALLOCATION FUND
(CLASS 1 SHARES)
-----------------------------------------
1998 1997
---- ----
<S> <C> <C>
Accumulation units beginning of year ............... 852,502 70,211
Accumulation units purchased and
transferred from other Travelers accounts......... 464,060 885,686
Accumulation units redeemed and
transferred to other Travelers accounts........... (288,717) (103,395)
------------------- --------------------
Accumulation units end of year ..................... 1,027,845 852,502
=================== ====================
</TABLE>
-34-
<PAGE> 36
NOTES TO FINANCIAL STATEMENTS - CONTINUED
7. SCHEDULE OF ACCUMULATION UNITS FOR SEPARATE ACCOUNT QP
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997 (CONTINUED)
<TABLE>
<CAPTION>
TEMPLETON BOND FUND (CLASS 1 SHARES)
-----------------------------------------
1998 1997
---- ----
<S> <C> <C>
Accumulation units beginning of year ............... 33,039 15,303
Accumulation units purchased and
transferred from other Travelers accounts......... 25,634 38,026
Accumulation units redeemed and
transferred to other Travelers accounts........... (4,158) (20,290)
------------------- --------------------
Accumulation units end of year ..................... 54,515 33,039
=================== ====================
<CAPTION>
TEMPLETON STOCK FUND (CLASS 1 SHARES)
-----------------------------------------
1998 1997
---- ----
<S> <C> <C>
Accumulation units beginning of year ............... 2,109,663 369,698
Accumulation units purchased and
transferred from other Travelers accounts......... 1,674,723 1,964,813
Accumulation units redeemed and
transferred to other Travelers accounts........... (775,122) (224,848)
------------------- --------------------
Accumulation units end of year ..................... 3,009,264 2,109,663
=================== ====================
<CAPTION>
MONTGOMERY VARIABLE SERIES: GROWTH FUND
-----------------------------------------
1998 1997
---- ----
<S> <C> <C>
Accumulation units beginning of year ............... - -
Accumulation units purchased and
transferred from other Travelers accounts......... 338 -
Accumulation units redeemed and
transferred to other Travelers accounts........... - -
------------------- --------------------
Accumulation units end of year ..................... 338 -
=================== ====================
</TABLE>
<TABLE>
<CAPTION>
EQUITY INCOME PORTFOLIO
----------------------------------------
1998 1997
---- ----
<S> <C> <C>
Accumulation units beginning of year ............... 72,323 -
Accumulation units purchased and
transferred from other Travelers accounts......... 2,961,496 72,323
Accumulation units redeemed and
transferred to other Travelers accounts........... (122,422) -
------------------- -------------------
Accumulation units end of year ..................... 2,911,397 72,323
=================== ===================
<CAPTION>
FEDERATED HIGH YIELD PORTFOLIO
-----------------------------------------
1998 1997
---- ----
<S> <C> <C>
Accumulation units beginning of year ............... 3,241 -
Accumulation units purchased and
transferred from other Travelers accounts......... 124,777 3,241
Accumulation units redeemed and
transferred to other Travelers accounts........... (11,924) -
------------------- --------------------
Accumulation units end of year ..................... 116,094 3,241
=================== ====================
<CAPTION>
FEDERATED STOCK PORTFOLIO
-----------------------------------------
1998 1997
---- ----
<S> <C> <C>
Accumulation units beginning of year ............... 22,444 -
Accumulation units purchased and
transferred from other Travelers accounts......... 601,139 22,444
Accumulation units redeemed and
transferred to other Travelers accounts........... (7,525) -
------------------- --------------------
Accumulation units end of year ..................... 616,058 22,444
=================== ====================
</TABLE>
<TABLE>
<CAPTION>
LARGE CAP PORTFOLIO
----------------------------------------
1998 1997
---- ----
<S> <C> <C>
Accumulation units beginning of year ............... 19,001 -
Accumulation units purchased and
transferred from other Travelers accounts......... 604,105 19,001
Accumulation units redeemed and
transferred to other Travelers accounts........... (22,319) -
------------------- -------------------
Accumulation units end of year ..................... 600,787 19,001
=================== ===================
<CAPTION>
LAZARD INTERNATIONAL STOCK PORTFOLIO
-----------------------------------------
1998 1997
---- ----
<S> <C> <C>
Accumulation units beginning of year ............... 5,095 -
Accumulation units purchased and
transferred from other Travelers accounts......... 199,148 5,095
Accumulation units redeemed and
transferred to other Travelers accounts........... (4,032) -
------------------- --------------------
Accumulation units end of year ..................... 200,211 5,095
=================== ====================
<CAPTION>
MFS MID CAP GROWTH PORTFOLIO
-----------------------------------------
1998 1997
---- ----
<S> <C> <C>
Accumulation units beginning of year ............... - -
Accumulation units purchased and
transferred from other Travelers accounts......... 2,050 -
Accumulation units redeemed and
transferred to other Travelers accounts........... - -
------------------- --------------------
Accumulation units end of year ..................... 2,050 -
=================== ====================
</TABLE>
<TABLE>
<CAPTION>
MFS RESEARCH PORTFOLIO
----------------------------------------
1998 1997
---- ----
<S> <C> <C>
Accumulation units beginning of year ............... - -
Accumulation units purchased and
transferred from other Travelers accounts......... 11,707 -
Accumulation units redeemed and
transferred to other Travelers accounts........... - -
------------------- -------------------
Accumulation units end of year ..................... 11,707 -
=================== ===================
<CAPTION>
SOCIAL AWARENESS STOCK PORTFOLIO
-----------------------------------------
1998 1997
---- ----
<S> <C> <C>
Accumulation units beginning of year ............... 196,483 35,689
Accumulation units purchased and
transferred from other Travelers accounts......... 826,615 175,347
Accumulation units redeemed and
transferred to other Travelers accounts........... (42,597) (14,553)
------------------- --------------------
Accumulation units end of year ..................... 980,501 196,483
=================== ====================
<CAPTION>
STRATEGIC STOCK PORTFOLIO
-----------------------------------------
1998 1997
---- ----
<S> <C> <C>
Accumulation units beginning of year ............... - -
Accumulation units purchased and
transferred from other Travelers accounts......... 866 -
Accumulation units redeemed and
transferred to other Travelers accounts........... - -
------------------- --------------------
Accumulation units end of year ..................... 866 -
=================== ====================
</TABLE>
-35-
<PAGE> 37
NOTES TO FINANCIAL STATEMENTS - CONTINUED
7. SCHEDULE OF ACCUMULATION UNITS FOR SEPARATE ACCOUNT QP
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997 (CONTINUED)
<TABLE>
<CAPTION>
DISCIPLINED MID CAP STOCK PORTFOLIO
----------------------------------------
1998 1997
---- ----
<S> <C> <C>
Accumulation units beginning of year ............... - -
Accumulation units purchased and
transferred from other Travelers accounts......... 1,157 -
Accumulation units redeemed and
transferred to other Travelers accounts........... - -
------------------- -------------------
Accumulation units end of year ..................... 1,157 -
=================== ===================
<CAPTION>
DISCIPLINED SMALL CAP STOCK PORTFOLIO
-----------------------------------------
1998 1997
---- ----
<S> <C> <C>
Accumulation units beginning of year ............... - -
Accumulation units purchased and
transferred from other Travelers accounts......... 285 -
Accumulation units redeemed and
transferred to other Travelers accounts........... - -
------------------- --------------------
Accumulation units end of year ..................... 285 -
=================== ====================
<CAPTION>
TRAVELERS QUALITY BOND PORTFOLIO
-----------------------------------------
1998 1997
---- ----
<S> <C> <C>
Accumulation units beginning of year ............... 24,883 -
Accumulation units purchased and
transferred from other Travelers accounts......... 141,286 24,884
Accumulation units redeemed and
transferred to other Travelers accounts........... (18,443) (1)
------------------- --------------------
Accumulation units end of year ..................... 147,726 24,883
=================== ====================
</TABLE>
<TABLE>
<CAPTION>
U.S. GOVERNMENT SECURITIES PORTFOLIO
----------------------------------------
1998 1997
---- ----
<S> <C> <C>
Accumulation units beginning of year ............... 101,323 51,072
Accumulation units purchased and
transferred from other Travelers accounts......... 483,527 118,479
Accumulation units redeemed and
transferred to other Travelers accounts........... (108,148) (68,228)
------------------- -------------------
Accumulation units end of year ..................... 476,702 101,323
=================== ===================
<CAPTION>
UTILITIES PORTFOLIO
-----------------------------------------
1998 1997
---- ----
<S> <C> <C>
Accumulation units beginning of year ............... 27,983 7,796
Accumulation units purchased and
transferred from other Travelers accounts......... 130,433 44,237
Accumulation units redeemed and
transferred to other Travelers accounts........... (7,470) (24,050)
------------------- --------------------
Accumulation units end of year ..................... 150,946 27,983
=================== ====================
<CAPTION>
ALLIANCE GROWTH PORTFOLIO
-----------------------------------------
1998 1997
---- ----
<S> <C> <C>
Accumulation units beginning of year ............... 425,511 44,777
Accumulation units purchased and
transferred from other Travelers accounts......... 1,912,035 457,050
Accumulation units redeemed and
transferred to other Travelers accounts........... (293,174) (76,316)
------------------- --------------------
Accumulation units end of year ..................... 2,044,372 425,511
=================== ====================
</TABLE>
<TABLE>
<CAPTION>
MFS TOTAL RETURN PORTFOLIO
----------------------------------------
1998 1997
---- ----
<S> <C> <C>
Accumulation units beginning of year ............... 154,300 2,087
Accumulation units purchased and
transferred from other Travelers accounts......... 729,253 161,844
Accumulation units redeemed and
transferred to other Travelers accounts........... (148,482) (9,631)
------------------- -------------------
Accumulation units end of year ..................... 735,071 154,300
=================== ===================
<CAPTION>
PUTNAM DIVERSIFIED INCOME PORTFOLIO
-----------------------------------------
1998 1997
---- ----
<S> <C> <C>
Accumulation units beginning of year ............... 63,842 12,636
Accumulation units purchased and
transferred from other Travelers accounts......... 328,250 57,130
Accumulation units redeemed and
transferred to other Travelers accounts........... (9,917) (5,924)
------------------- --------------------
Accumulation units end of year ..................... 382,175 63,842
=================== ====================
<CAPTION>
SMITH BARNEY INTERNATIONAL EQUITY
PORTFOLIO
-----------------------------------------
1998 1997
---- ----
<S> <C> <C>
Accumulation units beginning of year ............... 131,870 8,808
Accumulation units purchased and
transferred from other Travelers accounts......... 322,089 124,907
Accumulation units redeemed and
transferred to other Travelers accounts........... (64,211) (1,845)
------------------- --------------------
Accumulation units end of year ..................... 389,748 131,870
=================== ====================
</TABLE>
<TABLE>
<CAPTION>
SMITH BARNEY MONEY MARKET PORTFOLIO
----------------------------------------
1998 1997
---- ----
<S> <C> <C>
Accumulation units beginning of year ............... 207,764 56,124
Accumulation units purchased and
transferred from other Travelers accounts......... 3,180,140 1,807,351
Accumulation units redeemed and
transferred to other Travelers accounts........... (2,045,080) (1,655,711)
------------------- -------------------
Accumulation units end of year ..................... 1,342,824 207,764
=================== ===================
<CAPTION>
SMITH BARNEY HIGH INCOME PORTFOLIO
-----------------------------------------
1998 1997
---- ----
<S> <C> <C>
Accumulation units beginning of year ............... 47,378 278
Accumulation units purchased and
transferred from other Travelers accounts......... 213,574 72,669
Accumulation units redeemed and
transferred to other Travelers accounts........... (28,819) (25,569)
------------------- --------------------
Accumulation units end of year ..................... 232,133 47,378
=================== ====================
<CAPTION>
SMITH BARNEY LARGE CAPITALIZATION
GROWTH PORTFOLIO
-----------------------------------------
1998 1997
---- ----
<S> <C> <C>
Accumulation units beginning of year ............... - -
Accumulation units purchased and
transferred from other Travelers accounts......... 4,942 -
Accumulation units redeemed and
transferred to other Travelers accounts........... - -
------------------- --------------------
Accumulation units end of year ..................... 4,942 -
=================== ====================
</TABLE>
-36-
<PAGE> 38
NOTES TO FINANCIAL STATEMENTS - CONTINUED
7. SCHEDULE OF ACCUMULATION UNITS FOR SEPARATE ACCOUNT QP
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997 (CONTINUED)
<TABLE>
<CAPTION>
SMITH BARNEY LARGE CAP VALUE PORTFOLIO
----------------------------------------
1998 1997
---- ----
<S> <C> <C>
Accumulation units beginning of year ............... 1,191,739 270,469
Accumulation units purchased and
transferred from other Travelers accounts......... 1,092,689 1,027,962
Accumulation units redeemed and
transferred to other Travelers accounts........... (275,013) (106,692)
------------------- -------------------
Accumulation units end of year ..................... 2,009,415 1,191,739
=================== ===================
<CAPTION>
EMERGING MARKETS PORTFOLIO
-----------------------------------------
1998 1997
---- ----
<S> <C> <C>
Accumulation units beginning of year ............... - -
Accumulation units purchased and
transferred from other Travelers accounts......... 594 -
Accumulation units redeemed and
transferred to other Travelers accounts........... - -
------------------- --------------------
Accumulation units end of year ..................... 594 -
=================== ====================
<CAPTION>
COMBINED
-----------------------------------------
1998 1997
---- ----
<S> <C> <C>
Accumulation units beginning of year ............... 28,233,641 4,817,554
Accumulation units purchased and
transferred from other Travelers accounts......... 57,495,244 27,821,784
Accumulation units redeemed and
transferred to other Travelers accounts........... (11,050,781) (4,405,697)
------------------- --------------------
Accumulation units end of year ..................... 74,678,104 28,233,641
=================== ====================
</TABLE>
-37-
<PAGE> 39
INDEPENDENT AUDITORS' REPORT
To the Owners of Variable Annuity Contracts of
The Travelers Separate Account QP for Variable Annuities:
We have audited the accompanying statement of assets and liabilities of The
Travelers Separate Account QP for Variable Annuities as of December 31, 1998,
and the related statement of operations for the year then ended and the
statement of changes in net assets for each of the two years in the period then
ended. These financial statements are the responsibility of management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of shares owned as of December 31, 1998, by
correspondence with the underlying funds. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of The Travelers Separate Account
QP for Variable Annuities as of December 31, 1998, the results of its
operations for the year then ended and the changes in its net assets for each
of the two years in the period then ended, in conformity with generally
accepted accounting principles.
KPMG LLP
Hartford, Connecticut
February 17, 1999
-38-
<PAGE> 40
Independent Auditors
--------------------
KPMG LLP
Hartford, Connecticut
This report is prepared for the general information of contract owners and is
not an offer of shares of The Travelers Separate Account QP for Variable
Annuities or Separate Account QP's underlying funds. It should not be used in
connection with any offer except in conjunction with the Prospectus for The
Travelers Separate Account QP for Variable Annuities product(s) offered by The
Travelers Insurance Company and the Prospectuses for the underlying funds,
which collectively contain all pertinent information, including the applicable
sales commissions.
VG-QP (Annual) (12-98) Printed in U.S.A.
