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Registration Statement No. 333-40193
811-08477
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Post-Effective Amendment No. 2
And
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Post Effective Amendment No.2
THE TRAVELERS SEPARATE ACCOUNT TM FOR VARIABLE ANNUITIES
--------------------------------------------------------
(Exact name of Registrant)
THE TRAVELERS INSURANCE COMPANY
-------------------------------
(Name of Depositor)
ONE TOWER SQUARE, HARTFORD, CONNECTICUT 06183
---------------------------------------------
(Address of Depositor's Principal Executive Offices)
Depositor's Telephone Number, including area code: (860) 277-0111
--------------
ERNEST J. WRIGHT
The Travelers Insurance Company
One Tower Square
Hartford, Connecticut 06183
---------------------------
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering:
It is proposed that this filing will become effective (check appropriate box):
____ immediately upon filing pursuant to paragraph (b) of Rule 485.
X on May 1, 2000 pursuant to paragraph (b) of Rule 485.
- ----
____ 60 days after filing pursuant to paragraph (a)(1) of Rule 485.
____ on ______ ______ pursuant to paragraph (a)(1) of Rule 485.
If appropriate, check the following box:
_____ this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
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PART A
Information Required in a Prospectus
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TRAVELERS MARQUIS PORTFOLIOS PROSPECTUS:
THE TRAVELERS SEPARATE ACCOUNT TM FOR VARIABLE ANNUITIES
THE TRAVELERS SEPARATE ACCOUNT TM II FOR VARIABLE ANNUITIES
This prospectus describes TRAVELERS MARQUIS PORTFOLIOS, a flexible premium
variable annuity contract (the "Contract") issued by The Travelers Insurance
Company or The Travelers Life and Annuity Company, depending on the state in
which you purchased your Contract. The Contract is available in connection with
certain retirement plans that qualify for special federal income tax treatment
("qualified Contracts") as well as those that do not qualify for such treatment
("nonqualified Contracts"). We may issue it as an individual Contract or as a
group Contract. In states where only group Contracts are available, you will be
issued a certificate summarizing the provisions of the group Contract. For
convenience, we refer to Contracts and certificates as "Contracts."
Your purchase payments accumulate on a variable basis through one or more of the
subaccounts ("funding options"). Your contract value will vary daily to reflect
the investment experience of the funding options you select. The variable
funding options are:
DELAWARE GROUP PREMIUM FUND
REIT Series
Small Cap Value Series
DREYFUS VARIABLE INVESTMENT FUND
Appreciation Portfolio(1)
Small Cap Portfolio
FRANKLIN TEMPLETON VARIABLE INSURANCE
PRODUCTS TRUST(2)
Franklin Small Cap Fund Class 2(3)
Templeton Developing Markets Securities
Fund Class 2(4)
Templeton International Securities Fund
Class 2(5)
JANUS ASPEN SERIES
Aggressive Growth Portfolio - Service Shares
Growth and Income Portfolio - Service Shares
International Growth Portfolio - Service Shares
THE MONTGOMERY FUNDS III
Montgomery Variable Series: Growth Fund
OCC ACCUMULATION TRUST
Equity Portfolio
SALOMON BROTHERS VARIABLE SERIES FUNDS, INC.
Investors Fund
STRONG VARIABLE INSURANCE FUNDS, INC.
Strong Schafer Value Fund II
TRAVELERS SERIES FUND INC.
AIM Capital Appreciation Portfolio
Smith Barney Aggressive Growth Portfolio
Smith Barney High Income Portfolio
Smith Barney Large Capitalization Growth
Portfolio
Smith Barney Money Market Portfolio
Travelers Managed Income Portfolio
THE TRAVELERS SERIES TRUST
Disciplined Mid Cap Stock Portfolio
Disciplined Small Cap Stock Portfolio
Jurika & Voyles Core Equity Portfolio
Large Cap Portfolio
Lazard International Stock Portfolio
MFS Mid Cap Growth Portfolio
MFS Research Portfolio
NWQ Large Cap Portfolio
Strategic Stock Portfolio
U.S. Government Securities Portfolio
WARBURG PINCUS TRUST
Emerging Markets Portfolio
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(1) Formerly offered as Capital Appreciation Portfolio.
(2) Formerly Templeton Variable Products Fund
(3) Formerly offered as Franklin Small Cap
Investments Fund-Class 2
(4) Formerly offered as Templeton Developing Markets Fund-Class 2
(5) Formerly offered as Templeton International
Fund-Class 2
The contracts and/or some of the funding options may not be available in all
states. THIS PROSPECTUS IS VALID ONLY WHEN ACCOMPANIED BY THE CURRENT
PROSPECTUSES FOR THE VARIABLE FUNDING OPTIONS. READ AND RETAIN THEM FOR FUTURE
REFERENCE.
This prospectus provides the information that you should know before investing
in the Contract. You can receive additional information about The Travelers
Separate Account TM for Variable Annuities or The Travelers Separate Account TM
II for Variable Annuities ("Separate Account") by requesting a copy of the
Statement of Additional Information ("SAI") dated May 1, 2000. The SAI has been
filed with the Securities and Exchange Commission ("SEC") and is incorporated by
reference into this prospectus. To request a copy, write to The Travelers
Insurance Company, Annuity Investor Services, One Tower Square, Hartford,
Connecticut 06183, call 1-800-842-8573 or access the SEC's website
(http://www.sec.gov). See Appendix C for the SAI's table of contents.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
VARIABLE ANNUITY CONTRACTS ARE NOT DEPOSITS OF ANY BANK, AND ARE NOT INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT
AGENCY.
PROSPECTUS DATED MAY 1, 2000
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TABLE OF CONTENTS
<TABLE>
<S> <C>
Index of Special Terms................ 2
Summary............................... 3
Fee Table............................. 6
Condensed Financial Information....... 10
The Annuity Contract.................. 10
Contract Owner Inquiries............ 10
Purchase Payments................... 10
Accumulation Units.................. 10
The Funding Options................. 11
Charges and Deductions................ 13
General............................. 13
Administrative Charges.............. 14
Mortality and Expense Risk Charge... 14
Funding Option Expenses............. 15
Premium Tax......................... 15
Changes in Taxes Based Upon Premium
or Value......................... 15
Transfers............................. 15
Asset Allocation Program.............. 15
Access to Your Money.................. 16
Systematic Withdrawals.............. 16
Ownership Provisions.................. 16
Types of Ownership.................. 16
Contract Owner................... 16
Beneficiary...................... 17
Annuitant........................ 17
Death Benefit......................... 17
Death Proceeds Before the Maturity
Date............................. 17
Payment of Proceeds................. 18
Death Proceeds After the Maturity
Date............................. 20
The Annuity Period.................... 20
Maturity Date....................... 20
Allocation of Annuity............... 21
Variable Annuity.................... 21
Fixed Annuity....................... 21
Payment Options....................... 22
Election of Options................. 22
Annuity Options..................... 22
Miscellaneous Contract Provisions..... 23
Right to Return..................... 23
Termination......................... 23
Required Reports.................... 23
Suspension of Payments.............. 23
Transfers of Contract Values to
Other Annuities.................. 23
The Separate Accounts................. 24
Performance Information............. 24
Federal Tax Considerations............ 25
General Taxation of Annuities....... 25
Types of Contracts: Qualified or
Nonqualified..................... 25
Nonqualified Annuity Contracts...... 25
Qualified Annuity Contracts......... 26
Penalty Tax for Premature
Distributions.................... 26
Diversification Requirements for
Variable Annuities............... 26
Ownership of the Investments........ 26
Mandatory Distributions for
Qualified Plans.................. 27
Taxation of Death Benefit
Proceeds......................... 27
Other Information..................... 27
The Insurance Companies............. 27
Financial Statements................ 28
IMSA................................ 28
Distribution of Variable Annuity
Contracts........................ 28
Conformity with State and Federal
Law.............................. 28
Voting Rights....................... 28
Legal Proceedings and Opinions...... 28
Appendix A: Condensed Financial
Information for The Travelers
Insurance Company: Separate Account
TM.................................. A-1
Appendix B: Condensed Financial
Information for The Travelers Life
and Annuity Company: Separate
Account TM II....................... B-1
Appendix C: Contents of the Statement
of Additional Information........... C-1
</TABLE>
INDEX OF SPECIAL TERMS
The following terms are italicized throughout the prospectus. Refer to the page
listed for an explanation of each term.
<TABLE>
<S> <C>
Accumulation Unit..................... 10
Accumulation Period................... 10
Annuitant............................. 17
Annuity Payments...................... 10
Annuity Unit.......................... 10
Contingent Annuitant.................. 17
Contract Date......................... 10
Contract Owner (You, Your)............ 17
Contract Value........................ 10
Contract Year......................... 10
Death Report Date..................... 17
Funding Option(s)..................... 10
Maturity Date......................... 10
Purchase Payment...................... 10
Underlying Fund....................... 11
Written Request....................... 10
</TABLE>
2
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SUMMARY:
TRAVELERS MARQUIS PORTFOLIOS
THIS SUMMARY DETAILS SOME OF THE MORE IMPORTANT POINTS THAT YOU SHOULD KNOW AND
CONSIDER BEFORE PURCHASING THE CONTRACT. PLEASE READ THE ENTIRE PROSPECTUS
CAREFULLY.
WHAT COMPANY WILL ISSUE MY CONTRACT? Your issuing company is either The
Travelers Insurance Company or The Travelers Life and Annuity Company, ("the
Company," "We" or "Us") depending on where you purchase your Contract. Each
company sponsors its own Separate Account, both of which are described later in
this prospectus. The Travelers Insurance Company sponsors the Travelers Separate
Account TM for Variable Annuities ("Separate Account TM"); The Travelers Life
and Annuity Company sponsors the Travelers Separate Account TM II for Variable
Annuities ("Separate Account TM II"). When we refer to the Separate Account, we
are referring to either Separate Account TM or Separate Account TM II, depending
upon your issuing company.
Your issuing company is The Travelers Life and Annuity Company unless you
purchased your contract in the locations listed below, which contracts are
issued by The Travelers Insurance Company.
Bahamas
British Virgin Islands
Guam
New Hampshire
New York
North Carolina
U.S. Virgin Islands
Wyoming
You may also refer to the cover page of your Contract for the name of your
issuing company. You may only purchase a Contract in states where the Contract
has been approved for sale. This Contract may not currently be available for
sale in all states.
CAN YOU GIVE ME A GENERAL DESCRIPTION OF THE VARIABLE ANNUITY CONTRACT? The
Contract offered by the Company is intended for retirement savings or other
long-term investment purposes. The Contract provides a death benefit as well as
guaranteed payout options. Under a qualified contract, you can make one or more
payments, as you choose, on a tax-deferred basis. Under a nonqualified contract,
you can make one or more payments with after-tax dollars. You direct your
payment(s) to one or more of the variable funding options.
The Contract, like all deferred variable annuity contracts, has two phases: the
accumulation phase and the payout phase. During the accumulation phase
generally, under a qualified contract, your pre-tax contributions accumulate on
a tax-deferred basis and are taxed as income when you make a withdrawal,
presumably when you are in a lower tax bracket. During the accumulation phase,
under a nonqualified contract, earnings on your after-tax contributions
accumulate on a tax-deferred basis and are taxed as income when you make a
withdrawal. The payout phase occurs when you begin receiving payments from your
Contract. The amount of money you accumulate in your Contract determines the
amount of income (annuity payments) you receive during the payout phase.
During the payout phase, you may choose to receive annuity payments from the
variable funding options. If you want to receive payments from your annuity, you
can choose one of a number of annuity options.
Once you choose one of the annuity options and begin to receive payments, it
cannot be changed. During the payout phase, you have the same investment choices
you had during the accumulation phase. If amounts are directed to the variable
funding options, the dollar amount of your payments may increase or decrease.
WHO SHOULD PURCHASE THIS CONTRACT? The Contract is currently available for use
in connection with (1) individual nonqualified purchases; (2) rollovers for
Individual Retirement Annuities (IRAs); and (3) rollovers for other qualified
retirement plans. Qualified contracts include contracts
3
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qualifying under Section 401(a), 403(b), or 408(b) of the Internal Revenue Code
of 1986. Purchase of this Contract through a tax qualified retirement plan
("Plan") does not provide any additional tax deferral benefits beyond those
provided by the Plan. Accordingly, if you are purchasing this Contract through a
Plan, you should consider purchasing this Contract for its Death Benefit,
Annuity Option Benefits, and other non-tax-related benefits.
You may purchase the Contract with an initial payment of at least $25,000. You
may make additional payments of at least $500 at any time during the
accumulation phase.
IS THERE A RIGHT TO RETURN PERIOD? If you cancel the Contract within ten days
after you receive it, you will receive a full refund of the contract value
(including charges). Where state law requires a longer right to return period,
or the return of purchase payments, the Company will comply. You bear the
investment risk on the purchase payment during the right to return period;
therefore, the Contract value returned may be greater or less than your purchase
payment.
If the Contract is purchased as an Individual Retirement Annuity, and is
returned within the first seven days after delivery, your full purchase payment
will be refunded. During the remainder of the right to return period, the
Contract value (including charges) will be refunded. The Contract value will be
determined at the close of business on the day we receive a written request for
a refund.
WHAT TYPES OF INVESTMENT OPTIONS ARE AVAILABLE? You can direct your money into
any or all of the funding options shown on the cover page. The funding options
are described in the prospectuses for the funds. Depending on market conditions,
you may make or lose money in any of these options.
The value of the Contract will vary depending upon the investment performance of
the funding options you choose. Past performance is not a guarantee of future
results. Standard and Nonstandard performance is shown in the Statement of
Additional Information that you may request free of charge.
You can transfer between the funding options as frequently as you wish without
any current tax implications. Currently there is no charge for transfers, nor a
limit to the number of transfers allowed. We may, in the future, charge a fee
for any transfer request, or limit the number of transfers allowed. At a
minimum, we would always allow one transfer every six months. We reserve the
right to restrict transfers that we determine will disadvantage other contract
owners.
WHAT EXPENSES WILL BE ASSESSED UNDER THE CONTRACT? The Contract has insurance
features and investment features, and there are costs related to each. For
contracts with a value of less than $50,000 the Company deducts an annual
contract administrative charge of $40. The subaccount administrative charge and
the mortality and expense risk ("M&E") charge are deducted from the amounts in
the variable funding options. The subaccount administrative charge is 0.15%
annually. If you elect the standard death benefit, the M&E is 1.55%. If you
elect the enhanced death benefit, the M&E is 1.70% of the amounts you direct to
the variable funding options. Each underlying Fund also charges for management
and other expenses.
HOW WILL MY CONTRIBUTIONS AND WITHDRAWALS BE TAXED? Generally, the payments you
make to a qualified Contract during the accumulation phase are made with
before-tax dollars. You will be taxed on your purchase payments and on any
earnings when you make a withdrawal or begin receiving annuity payments. Under a
nonqualified Contract, payments to the contract are made with after-tax dollars,
and any earnings will accumulate tax-deferred. You will be taxed on these
earnings when they are withdrawn from the Contract.
For owners of qualified Contracts, if you reach a certain age, you may be
required by federal tax laws to begin receiving payments from your annuity or
risk paying a penalty tax. In those cases, we can calculate and pay you the
minimum required distribution amounts. If you are younger than 59 1/2 when you
take money out, you may be charged a 10% federal penalty tax on the amount
withdrawn.
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<PAGE> 7
HOW MAY I ACCESS MY MONEY? You can take withdrawals any time during the
accumulation phase. No sales charge will apply. Of course, you may have to pay
income taxes and a tax penalty on any money you take out.
WHAT IS THE DEATH BENEFIT UNDER THE CONTRACT? The death benefit applies upon
the first death of the owner, joint owner, or annuitant. Assuming you are the
Annuitant, the death benefit is as follows: If you die before the Contract is in
the payout phase, the person you have chosen as your beneficiary will receive a
death benefit. The death benefit value is calculated at the close of the
business day on which the Company's Home Office receives due proof of death and
written payment instructions. Certain states may have varying age requirements.
Please refer to the Death Benefit section in the prospectus for more details.
ARE THERE ANY ADDITIONAL FEATURES? This Contract has other features you may be
interested in. These include:
- SYSTEMATIC WITHDRAWAL OPTION. Before the maturity date, you can arrange
to have money sent to you at set intervals throughout the year. Of
course, any applicable income and penalty taxes will apply on amounts
withdrawn.
- ASSET ALLOCATION PROGRAM. If you choose, you can elect to have your
contributions allocated among a set of funding options according to an
optional asset allocation model. The model is based on your personal
investment risk tolerance and other factors. The Asset Allocation Program
was designed in conjunction with Ibbotson Associates, a recognized
provider of asset allocation services.
5
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FEE TABLE
- --------------------------------------------------------------------------------
CONTRACT OWNER TRANSACTION EXPENSES
<TABLE>
<S> <C>
Annual Contract Administrative Charge
(Waived if contract value is $50,000 or more) $40
</TABLE>
ANNUAL SEPARATE ACCOUNT CHARGES
(as a percentage of the average daily net assets of the Separate Account)
<TABLE>
<CAPTION>
ENHANCED
STANDARD DEATH
DEATH BENEFIT BENEFIT
<S> <C> <C>
Mortality & Expense Risk Charge...................... 1.55% 1.70%
Administrative Expense Charge........................ 0.15% 0.15%
----- -----
Total Separate Account Charges.................... 1.70% 1.85%
FUNDING OPTION EXPENSES:
(as a percentage of average daily net assets of the Funding Option as of December 31,
1999, unless otherwise noted)
</TABLE>
<TABLE>
<CAPTION>
TOTAL
ANNUAL
MANAGEMENT OTHER OPERATING
FEE EXPENSES EXPENSES
(AFTER EXPENSE 12B-1 (AFTER EXPENSE (AFTER EXPENSE
FUNDING OPTIONS: REIMBURSEMENT) FEE REIMBURSEMENT) REIMBURSEMENT)
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
DELAWARE GROUP PREMIUM FUND
REIT Series................................ 0.64% 0.21% 0.85%(1)
Small Cap Value Series..................... 0.75% 0.10% 0.85%
DREYFUS VARIABLE INVESTMENT FUND
Appreciation Portfolio(2).................. 0.75% 0.03% 0.78%
Small Cap Portfolio........................ 0.75% 0.03% 0.78%
FRANKLIN TEMPLETON VARIABLE INSURANCE
PRODUCTS TRUST
Franklin Small Cap Fund -- Class 2
(formerly offered as Franklin Small Cap
Investment Fund)......................... 0.55% 0.25% 0.27% 1.07%(3)
Templeton Developing Markets Securities
Fund -- Class 2 (formerly offered as
Templeton Developing Markets Fund)....... 1.25% 0.25% 0.31% 1.81%(4)
Templeton International Securities Fund --
Class 2 (formerly offered as Templeton
International Fund)...................... 0.69% 0.25% 0.19% 1.13%(5)
JANUS ASPEN SERIES
Aggressive Growth Portfolio -- Service
Shares................................... 0.65% 0.25% 0.02% 0.92%(6)
Growth and Income Portfolio -- Service
Shares................................... 0.65% 0.25% 0.40% 1.30%(6)
International Growth Portfolio -- Service
Shares................................... 0.65% 0.25% 0.11% 1.01%(6)
THE MONTGOMERY FUNDS III
Montgomery Variable Series: Growth Fund.... 0.52% 0.73% 1.25%(7)
OCC ACCUMULATION TRUST
Equity Portfolio........................... 0.80% 0.11% 0.91%
SALOMON BROTHERS VARIABLE SERIES FUND INC.
Investors Fund............................. 0.53% 0.45% 0.98%(8)
STRONG VARIABLE INSURANCE FUNDS, INC.
Strong Schafer Value Fund II............... 1.00% 0.20% 1.20%(9)
TRAVELERS SERIES FUND INC.
AIM Capital Appreciation Portfolio......... 0.80% 0.04% 0.84%(10)
Smith Barney Aggressive Growth Portfolio... 0.80% 0.20% 1.00%(11)
Smith Barney High Income Portfolio......... 0.60% 0.06% 0.66%(10)
Smith Barney Large Capitalization Growth
Portfolio................................ 0.75% 0.11% 0.86%(10)
</TABLE>
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<TABLE>
<CAPTION>
TOTAL
ANNUAL
MANAGEMENT OTHER OPERATING
FEE EXPENSES EXPENSES
(AFTER EXPENSE 12B-1 (AFTER EXPENSE (AFTER EXPENSE
FUNDING OPTIONS: REIMBURSEMENT) FEE REIMBURSEMENT) REIMBURSEMENT)
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Smith Barney Money Market Portfolio........ 0.50% 0.04% 0.54%(10)
Travelers Managed Income Portfolio......... 0.65% 0.11% 0.76%(10)
THE TRAVELERS SERIES TRUST
Disciplined Mid Cap Stock Portfolio........ 0.70% 0.25% 0.95%(12)
Disciplined Small Cap Stock Portfolio...... 0.80% 0.20% 1.00%(13)
Jurika & Voyles Core Equity Portfolio...... 0.75% 0.25% 1.00%(14)
Large Cap Portfolio........................ 0.75% 0.12% 0.87%
Lazard International Stock Portfolio....... 0.83% 0.23% 1.06%
MFS Mid Cap Growth Portfolio............... 0.80% 0.20% 1.00%(13)
MFS Research Portfolio..................... 0.80% 0.19% 0.99%
NWQ Large Cap Portfolio.................... 0.75% 0.25% 1.00%(14)
Strategic Stock Portfolio.................. 0.60% 0.30% 0.90%(13)
U.S. Government Securities Portfolio....... 0.32% 0.16% 0.48%
WARBURG PINCUS TRUST
Emerging Markets Portfolio................. 0.00% 1.40% 1.40%(15)
</TABLE>
NOTES:
The purpose of this Fee Table is to assist Contract Owners in understanding the
various costs and expenses that a Contract Owner will bear, directly or
indirectly. See "Charges and Deductions" in this prospectus for additional
information. Expenses shown do not include premium taxes, which may be
applicable. "Other Expenses" include operating costs of the fund. These expenses
are reflected in each funding option's net asset value and are not deducted from
the account value under the Contract.
(1) The investment adviser for the REIT SERIES is Delaware Management Company
("DMC"). Effective May 1, 2000 through October 31, 2000, DMC has
voluntarily agreed to waive its management fee and reimburse the Series for
expenses to the extent that total expenses will not exceed 0.85%. Without
such an arrangement, Total Annual Operating Expenses for the fund would
have been 0.96%.
(2) Formerly Capital Appreciation Portfolio.
(3) On 2/8/00, a merger and reorganization was approved that merged the assets
of FRANKLIN SMALL CAP INVESTMENTS FUND into FRANKLIN SMALL CAP FUND,
effective 5/1/00. The above table shows restated total expenses based upon
the new fees and assets of Franklin Small Cap Fund as of 12/31/99, and not
the assets of the combined fund on 5/1/00. However if the table reflected
both the new fees and the combined assets, the fund's expenses after 5/1/00
would be estimated as: Management Fees 0.55%, Distribution and Service Fee
0.25%, Other expenses 0.27% and Total Fund Operating Expenses 1.07%.
The Fund's Class 2 distribution plan or "Rule 12b-1 Plan" is described in
the Fund's prospectus. While the maximum amount payable under the Fund's
Class 2 "Rule 12b-1 Plan" is 0.35% per year of the Fund's average daily net
assets, the Board of Trustees of Franklin Templeton Variable Insurance
Products Trust has set the current rate at 0.25% per year.
(4) On 2/8/00, a merger and reorganization was approved that merged the assets
of TEMPLETON DEVELOPING MARKETS EQUITY FUND into TEMPLETON DEVELOPING
MARKETS FUND (which then changed its name to TEMPLETON DEVELOPING MARKETS
SECURITIES FUND), effective 5/1/00. The table shows restated total expenses
based upon the new fees and assets of Templeton Developing Markets Fund as
of 12/31/99, and not the assets of the combined fund on 5/1/00. However if
the table reflected both the new fees and the combined assets, the fund's
expenses after 5/1/00 would be estimated as: Management Fees 1.25%,
Distribution and Service Fee 0.25%, Other expenses 0.29% and Total Fund
Operating Expenses 1.79%. The Fund's Class 2 distribution plan or "Rule
12b-1 Plan" is described in the Fund's prospectus. While the maximum amount
payable under the Fund's Class 2 "Rule 12b-1 Plan" is 0.35% per year of the
Fund's average daily net assets, the Board of Trustees of Franklin
Templeton Variable Insurance Products Trust has set the current rate at
0.25% per year.
(5) On 2/8/00, a merger and reorganization was approved that merged the assets
of TEMPLETON INTERNATIONAL EQUITY FUND into Templeton International Fund
(which then changed its name to Templeton International Securities Fund),
effective 5/1/00. The table shows restated total expenses based upon the
new fees and assets of Templeton International Fund as of 12/31/99, and not
the assets of the combined fund on 5/1/00. However if the table reflected
both the new fees and the combined assets, the fund's expenses after 5/1/00
would be estimated as: Management Fees 0.65%, Distribution and Service Fee
0.25%, Other expenses 0.20% and Total Fund Operating Expenses 1.10%. The
Fund's Class 2 distribution plan or "Rule 12b-1 Plan" is described in the
Fund's prospectus. While the maximum amount payable under the Fund's Class
2 "Rule 12b-1 Plan" is 0.35% per year of the Fund's average daily net
assets, the Board of Trustees of Franklin Templeton Variable Insurance
Products Trust has set the current rate at 0.25% per year.
(6) Expenses are based on the estimated expenses that the new Service Shares
Class of each Portfolio expects to incur in its initial fiscal year. All
expenses are shown without the effect of offset arrangements.
(7) The investment manager of the MONTGOMERY VARIABLE SERIES: GROWTH FUND has
agreed to reduce some or all of its management fees if necessary to keep
Total Annual Operating Expenses, expressed on an annualized basis, at or
below one and one quarter percent (1.25%) of its average net assets. Absent
this waiver of fees, the Portfolio's Total Annual Operating Expenses would
equal 2.25%.
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<PAGE> 10
(8) The Adviser has waived all or a portion of its Management Fees for the year
ended December 31, 1999. If such fees were not waived or expenses
reimbursed, the Management Fees, Other Expenses and Total Annual Operating
Expenses would have been 0.70%, 0.45% and 1.15%, respectively.
(9) The Adviser for STRONG SCHAFER VALUE FUND II has voluntarily agreed to cap
the Total Annual Operating Expenses at 1.20%. The adviser has no current
intention to, but may in the future, discontinue or modify any waiver of
fees or absorption of expenses at its discretion without further
notification. Absent the waiver of fees, the Total Annual Operating
Expenses would be 1.57%.
(10) Expenses are as of October 31, 1999 (the Fund's fiscal year end). There
were no fees waived or expenses reimbursed for these funds in 1999.
(11) Other Expenses reflect the current expense reimbursement arrangement with
the Adviser. The Adviser has agreed to reimburse SMITH BARNEY AGGRESSIVE
GROWTH PORTFOLIO for the amount by its aggregate expenses exceed 1.00%.
Without such arrangements through 2/29/00, the Total Annual Operating
Expenses for the portfolio would have been 1.76%.
(12) Other Expenses reflect the current expense reimbursement arrangement with
Travelers Insurance Company. Travelers has agreed to reimburse the
Portfolio for the amount by which their aggregate expenses (including
management fees, but excluding brokerage commissions, interest charges and
taxes) exceeds 0.95%. Without such arrangements, the Total Annual Operating
Expenses for the Portfolio would have been 0.99% for the DISCIPLINED MID
CAP STOCK PORTFOLIO.
(13) Travelers Insurance has agreed to reimburse the STRATEGIC STOCK PORTFOLIO,
the DISCIPLINED SMALL CAP STOCK PORTFOLIO, and the MFS MID CAP GROWTH
PORTFOLIO for expenses for the period ended December 31, 1999 which
exceeded 0.90%, 1.00% and 1.00% respectively. Without such voluntary
arrangements, the actual annualized Total Annual Operating Expenses would
have been 0.99%, 1.49%, and 1.07% respectively.
(14) Other Expenses reflect the current expense reimbursement arrangement with
Travelers Insurance Company. Travelers has agreed to reimburse the
Portfolios for the amount by which their aggregate expenses (including
management fees, but excluding brokerage commissions, interest charges and
taxes) exceeds 1.00%. Without such arrangements, the annualized Total
Annual Operating Expenses for the Portfolios would have been 1.15% for the
NWQ LARGE CAP PORTFOLIO and 1.40% for the JURIKA & VOYLES CORE EQUITY
PORTFOLIO.
(15) Fee waivers, expense reimbursements, or expense credits reduced expenses
for the WARBURG PINCUS EMERGING MARKETS PORTFOLIO during 1999, but this may
be discontinued at any time. Without such arrangements, the Portfolio's
Management Fees, Other Expenses and Total Annual Operating Expenses would
equal 1.25%, 1.88% and 3.13%, respectively. The Portfolio's other expenses
are based on annualized estimates of expenses for the fiscal year ending
December 31, 1999, net of any fee waivers or expense reimbursements.
EXAMPLE*:
Assuming a 5% annual return on assets, a $1,000 investment would be subject to
the following expenses, whether the contract has been surrendered or annuitized,
or if no withdrawals have been made:
<TABLE>
<CAPTION>
(A) = STANDARD DEATH BENEFIT
(B) = ENHANCED DEATH BENEFIT
- -------------------------------------------------------------------------------------------------------
-------------------------------------
UNDERLYING FUNDING OPTIONS: 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
DELAWARE GROUP PREMIUM FUND
REIT Series............................................... (a) $26 $ 80 $136 $289
(b) 27 84 143 304
Small Cap Value Series.................................... (a) 26 80 136 289
(b) 27 84 143 304
DREYFUS VARIABLE INVESTMENT FUND
Capital Appreciation...................................... (a) 25 77 132 282
(b) 27 82 140 297
Small Cap Portfolio....................................... (a) 25 77 132 282
(b) 27 82 140 297
FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST
Franklin Small Cap Fund -- Class 2........................ (a) 28 86 147 311
(b) 30 91 154 325
Templeton Developing Markets Securities Fund -- Class 2... (a) 35 108 183 379
(b) 37 112 190 392
Templeton International Securities Fund -- Class 2........ (a) 29 88 150 316
(b) 30 92 157 331
JANUS ASPEN SERIES SERVICE SHARES
Aggressive Growth Portfolio -- Service Shares............. (a) 27 82 139 296
(b) 28 86 147 311
Growth and Income Portfolio -- Service Shares............. (a) 30 93 158 333
(b) 32 97 165 346
International Growth Portfolio -- Service Shares.......... (a) 27 84 144 305
(b) 29 89 151 319
</TABLE>
8
<PAGE> 11
<TABLE>
<CAPTION>
(A) = STANDARD DEATH BENEFIT
(B) = ENHANCED DEATH BENEFIT
- -------------------------------------------------------------------------------------------------------
-------------------------------------
UNDERLYING FUNDING OPTIONS: 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
THE MONTGOMERY FUNDS III
Montgomery Variable Series: Growth Fund................... (a) 30 91 156 328
(b) 31 96 163 342
OCC ACCUMULATION TRUST
Equity Portfolio.......................................... (a) 26 81 139 295
(b) 28 86 146 310
SALOMON BROTHERS VARIABLE SERIES FUND INC.
Investors Fund............................................ (a) 27 83 142 302
(b) 29 88 150 316
STRONG VARIABLE INSURANCE FUNDS, INC.
Strong Schafer Value Fund II.............................. (a) 29 90 153 323
(b) 31 94 160 337
TRAVELERS SERIES FUND INC.
AIM Capital Appreciation Portfolio........................ (a) $26 $ 79 $135 $288
(b) 27 84 143 303
Smith Barney Aggressive Growth Portfolio.................. (a) 27 84 143 304
(b) 29 89 151 318
Smith Barney High Income Portfolio........................ (a) 24 74 126 270
(b) 25 78 134 285
Smith Barney Large Capitalization Growth Portfolio........ (a) 26 80 136 290
(b) 27 84 144 305
Smith Barney Money Market Portfolio....................... (a) 23 70 120 258
(b) 24 75 128 273
Travelers Managed Income Portfolio........................ (a) 25 77 131 280
(b) 26 81 139 295
THE TRAVELERS SERIES TRUST
Disciplined Mid Cap Stock Portfolio....................... (a) 27 83 141 299
(b) 28 87 148 314
Disciplined Small Cap Stock Portfolio..................... (a) 27 84 143 304
(b) 29 89 151 318
Jurika & Voyles Core Equity Portfolio..................... (a) 27 84 143 304
(b) 29 89 151 318
Large Cap Portfolio....................................... (a) 26 80 137 291
(b) 28 85 144 306
Lazard International Stock Portfolio...................... (a) 28 86 146 310
(b) 29 90 154 324
MFS Mid Cap Growth Portfolio.............................. (a) 27 84 143 304
(b) 29 89 151 318
MFS Research Portfolio.................................... (a) 27 84 143 303
(b) 29 88 150 317
NWQ Large Cap Portfolio................................... (a) 27 84 143 304
(b) 29 89 151 318
Strategic Stock Portfolio................................. (a) 26 81 138 294
(b) 28 86 146 309
U.S. Government Securities Portfolio...................... (a) 22 69 118 253
(b) 24 73 125 268
WARBURG PINCUS TRUST
Emerging Markets Portfolio................................ (a) 31 96 163 342
(b) 33 100 170 356
</TABLE>
* THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN. THE EXAMPLE
REFLECTS THE $40 ANNUAL CONTRACT ADMINISTRATIVE CHARGE AS AN ANNUAL CHARGE OF
0.008% OF ASSETS.
9
<PAGE> 12
CONDENSED FINANCIAL INFORMATION
- --------------------------------------------------------------------------------
See Appendices A and B.
THE ANNUITY CONTRACT
- --------------------------------------------------------------------------------
Travelers Marquis Portfolios is a contract between the contract owner ("you"),
and the Company. You make purchase payments to us and we credit them to your
Contract. The Company promises to pay you an income, in the form of annuity
payments, beginning on a future date that you choose, the maturity date. The
purchase payments accumulate tax deferred in the funding options of your choice.
We offer multiple variable funding options. The contract owner assumes the risk
of gain or loss according to the performance of the variable funding options.
The contract value is the amount of purchase payments, plus or minus any
investment experience or interest. The contract value also reflects all
surrenders made and charges deducted. There is generally no guarantee that at
the maturity date the contract value will equal or exceed the total purchase
payments made under the Contract. The date the contract and its benefits become
effective is referred to as the contract date. Each 12-month period following
the contract date is called a contract year.
Certain changes and elections must be made in writing to the Company. Where the
term "written request" is used, it means that written information must be sent
to the Company's Home Office in a form and content satisfactory to us.
CONTRACT OWNER INQUIRIES
Any questions you have about your Contract should be directed to the Company's
Home Office at 1-800-842-8573.
PURCHASE PAYMENTS
The initial purchase payment must be at least $25,000. You may make additional
payments of at least $500 at any time. Under certain circumstances, we may waive
the minimum purchase payment requirement. Purchase payments over $1,000,000 may
be made with our prior consent. The initial purchase payment is due and payable
before the Contract becomes effective.
We will apply the initial purchase payment within two business days after we
receive it in good order at our Home Office. Subsequent purchase payments will
be credited to a Contract on the same business day, if received in good order by
our Home Office by 4:00 p.m. Eastern time. A business day is any day that the
New York Stock Exchange is open. Our business day ends at 4:00 p.m. Eastern time
unless we need to close earlier due to an emergency.
ACCUMULATION UNITS
The period between the contract effective date and the maturity date is the
accumulation period. During the accumulation period, an accumulation unit is
used to calculate the value of a Contract. An accumulation unit works like a
share of a mutual fund. Each funding option has a corresponding accumulation
unit value. The accumulation units are valued each business day and their values
may increase or decrease from day to day. The number of accumulation units we
will credit to your Contract once we receive a purchase payment is determined by
dividing the amount directed to each funding option by the value of its
accumulation unit. We calculate the value of an accumulation unit for each
funding option each day the New York Stock Exchange is open. The values are
calculated as of 4:00 p.m. Eastern time. After the value is calculated, we
credit your Contract. During the annuity period (i.e., after the maturity date),
you are credited with annuity units.
10
<PAGE> 13
THE FUNDING OPTIONS
You choose which of the following variable funding options to have your purchase
payments allocated to. These funding options are subsections of the Separate
Account, which invest in the underlying mutual funds ("underlying funds"). You
will find detailed information about the options and their inherent risks in the
current prospectuses for the funding options which must accompany this
prospectus. You are not investing directly in the underlying fund. Since each
option has varying degrees of risk, please read the prospectuses carefully
before investing. Contact your registered representative or call 1-800-842-8573
to request additional copies of the prospectuses.
If any of the funding options become unavailable for allocating purchase
payments, or if we believe that further investment in a funding option is
inappropriate for the purposes of the Contract, we may substitute another
funding option. However, we will not make any substitutions without notifying
you and obtaining any state and SEC approval, if necessary. From time to time we
may make new funding options available.
The current variable funding options are listed below, along with their
investment advisers and any subadviser:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
FUNDING INVESTMENT INVESTMENT
OPTION OBJECTIVE ADVISER/SUB-ADVISER
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
DELAWARE GROUP PREMIUM
FUND
REIT Series Seeks maximum long-term total return by investing in Delaware Management Company,
securities of companies primarily engaged in the real Inc.
estate industry. Capital appreciation is a secondary Subadviser: Lincoln
objective. Investment Management, Inc.
Small Cap Value Series Seeks capital appreciation by investing in small to Delaware Management Company,
mid-cap common stocks whose market value appears low Inc.
relative to their underlying value or future earnings Subadviser: Lincoln
and growth potential Emphasis will also be placed on Investment Management, Inc.
securities of companies that may be temporarily out
of favor or whose value is not yet recognized by the
market.
DREYFUS VARIABLE
INVESTMENT FUND
Capital Appreciation Seeks primarily to provide long-term capital growth The Dreyfus Corporation
Portfolio consistent with the preservation of capital; current Subadviser: Fayez Sarofim &
income is a secondary investment objective The Co.
portfolio invests primarily in the common stocks of
domestic and foreign insurers.
Small Cap Portfolio Seeks to maximize capital appreciation. The Dreyfus Corporation
FRANKLIN TEMPLETON
VARIABLE INSURANCE
PRODUCTS TRUST
Franklin Small Cap Fund Seeks long-term capital growth. The Fund seeks to Franklin Advisers, Inc.
(Class 2) accomplish its objective by investing primarily
(normally at least 65% of its assets) in equity
securities of smaller capitalization growth
companies.
Templeton Developing Seeks long-term capital appreciation. The Fund seeks Templeton Asset Management
Markets Securities Fund to achieve this objective by investing primarily Ltd.
(Class 2) (normally at least 65% of assets) in equity
securities of issuers in countries having developing
markets.
Templeton International Seeks long-term capital growth through a flexible Templeton Investment
Securities Fund (Class policy of investing in stocks and debt obligations of Counsel, Inc.
2) companies and governments outside the United States.
Any income realized will be incidental.
JANUS ASPEN SERIES
Aggressive Growth Seeks long-term capital growth by investing primarily Janus Capital
Portfolio -- Service in common stocks selected for their growth potential,
Shares normally investing at least 50% in the equity assets
of medium-sized companies.
</TABLE>
11
<PAGE> 14
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
FUNDING INVESTMENT INVESTMENT
OPTION OBJECTIVE ADVISER/SUB-ADVISER
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Growth and Income Seeks long-term capital growth and current income, Janus Capital
Portfolio -- Service with an investment emphasis on common stocks.
Shares
International Growth Seeks long-term capital growth by normally investing Janus Capital
Portfolio -- Service at least 65% of its total assets in securities of
Shares foreign issuers.
THE MONTGOMERY FUNDS III
Montgomery Variable Seeks capital appreciation by investing primarily in Montgomery Asset Management
Series: Growth Fund equity securities, usually common stock, of domestic
companies of all sizes, and emphasizes companies
having market capitalizations of $1 billion or more.
OCC ACCUMULATION TRUST
Equity Portfolio Seeks long-term capital appreciation through OpCap Advisors
investment in securities (primarily equity
securities) of companies that are believed by the
adviser to be undervalued in the marketplace in
relation to factors such as the companies' assets or
earnings.
SALOMON BROTHERS VARIABLE
SERIES FUND, INC.
Investors Fund Seeks long-term growth of capital, and, secondarily, Salomon Brothers Asset
current income, through investments in common stocks Management ("SBAM")
of well-known companies.
STRONG VARIABLE INSURANCE
FUNDS, INC.
Strong Schafer Value Seeks long-term capital appreciation. Current income Strong Capital Management
Fund II is a secondary objective when selecting investments Inc.
The goal is to identify stocks that provide Subadviser: Schafer Capital
above-average earnings growth prospects at a Management, Inc.
price-to-earnings ratio lower than that of the S&P
500.
TRAVELERS SERIES FUND
INC.
AIM Capital Seeks capital appreciation by investing principally Travelers Investment Adviser
Appreciation Portfolio in common stock, with emphasis on medium-sized and ("TIA")
smaller companies. Subadviser: Alliance Capital
Management L.P.
Smith Barney Aggressive Seeks capital appreciation by investing primarily in SSB Citi Fund Management LLC
Growth Portfolio common stocks of companies that are experiencing, or ("SSB Citi")
have the potential to experience, growth of earnings,
or that exceed the average earnings growth rate of
companies whose securities are included in the S&P
500.
Smith Barney High Seeks high current income. Capital appreciation is a SSB Citi
Income Portfolio secondary objective. The Portfolio will invest at
least 65% of its assets in high-yielding corporate
debt obligations and preferred stock.
Smith Barney Large Seeks long-term growth of capital by investing in SSB Citi
Capitalization Growth equity securities of companies with large market
Portfolio capitalizations.
Smith Barney Money Seeks maximum current income and preservation of SSB Citi
Market Portfolio capital.
Travelers Managed Seeks high current income consistent with prudent TIA
Income Portfolio risk of capital through investments in corporate debt Subadviser: Travelers Asset
obligations, preferred stocks, and obligations Management International
Management International issued or guaranteed by the Company LLC ("TAMIC")
U.S. Government or its agencies or instrumentalities.
THE TRAVELERS SERIES
TRUST
Disciplined Mid Cap Seeks growth of capital by investing primarily in a TAMIC
Stock Portfolio broadly diversified portfolio of U.S. common stocks. Subadviser: Travelers
Investment Management
Company ("TIMCO")
</TABLE>
12
<PAGE> 15
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
FUNDING INVESTMENT INVESTMENT
OPTION OBJECTIVE ADVISER/SUB-ADVISER
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Disciplined Small Cap Seeks long term capital appreciation by investing TAMIC
Stock Portfolio primarily (at least 65% of its total assets) in the Subadviser: TIMCO
common stocks of U.S. Companies with relatively small
market capitalizations at the time of investment.
Jurika & Voyles Core Seeks long-term capital appreciation. The Portfolio TAMIC
Equity Portfolio invests primarily in the common stock of quality Subadviser: Jurika & Voyles
companies of all market capitalizations that offer L.P.
current value and significant future growth
potential.
Large Cap Portfolio Seeks long-term growth of capital by investing TAMIC
primarily in equity securities of companies with Subadviser: Fidelity
large market capitalizations. Management & Research Co.
Lazard International Seeks capital appreciation by investing primarily in TAMIC
Stock Portfolio the equity securities of non-United States companies Subadviser: Lazard Asset
(i.e., incorporated or organized outside the United Management
States).
MFS Mid Cap Growth Seeks to obtain long-term growth of capital by TAMIC
Portfolio investing, under normal market conditions, at least Subadviser: Massachusetts
65% of its total assets in equity securities of Financial Services Company
companies with medium market capitalization which the ("MFS")
investment adviser believes have above-average growth
potential.
MFS Research Portfolio Seeks to provide long-term growth of capital and TAMIC
future income. Subadviser: MFS
NWQ Large Cap Portfolio Seeks to achieve consistent, superior total return TAMIC
with minimum risk to principal. Subadviser: NWQ Investment
Management Company
Strategic Stock Seeks to provide an above-average total return TAMIC
Portfolio through a combination of potential capital Subadviser: TIMCO
appreciation and dividend income by investing
primarily in high dividend yielding stocks
periodically selected from the companies included in
(i) the Dow Jones Industrial Average and (ii) a
subset of the S&P Industrial Index.
U.S. Government Seeks to select investments from the point of view of TAMIC
Securities Portfolio an investor concerned primarily with the highest
credit quality, current income and total return. The
assets of the Portfolio will be invested in direct
obligations of the United States, its agencies and
instrumentalities.
WARBURG PINCUS TRUST
Emerging Markets Seeks long-term growth of capital by investing Credit Suisse Asset
Portfolio primarily in equity securities of non-U.S. issuers Management, LLC
consisting of companies in emerging securities
markets.
</TABLE>
CHARGES AND DEDUCTIONS
- --------------------------------------------------------------------------------
GENERAL
We deduct the charges described below. The charges are for the service and
benefits we provide, costs and expenses we incur, and risks we assume under the
Contracts. Services and benefits we provide include:
- the ability for you to make withdrawals and surrenders under the
Contracts;
- the death benefit paid on the death of the contract owner, annuitant, or
first of the joint contract owners,
- the available funding options and related programs (including portfolio
rebalancing, and systematic withdrawal programs);
13
<PAGE> 16
- administration of the annuity options available under the Contracts; and
- the distribution of various reports to contract owners.
Costs and expenses we incur include:
- losses associated with various overhead and other expenses associated
with providing the services and benefits provided by the Contracts,
- sales and marketing expenses including commission payments to your sales
agent, and
- other costs of doing business.
Risks we assume include:
- that annuitants may live longer than estimated when the annuity factors
under the Contracts were established;
- that the amount of the death benefit will be greater than the contract
value, and
- that the costs of providing the services and benefits under the Contracts
will exceed the charges deducted.
We may also deduct a charge for taxes.
Unless otherwise specified, charges are deducted proportionately from all
funding options in which you are invested.
ADMINISTRATIVE CHARGES
We will deduct an annual contract administrative charge on the fourth Friday of
each August from Contracts with a value of less than $50,000 on that date. This
charge compensates us for expenses incurred in establishing and maintaining the
Contract. The $40 charge is deducted from the contract value by canceling
accumulation units applicable to each variable funding option on a pro rata
basis. For the first Contract year this charge will be prorated (i.e.
calculated) from the date of purchase. A prorated charge will also be made if
the Contract is completely withdrawn or terminated. We will not deduct a
contract administrative charge:
(1) from the distribution of death proceeds;
(2) after an annuity payout has begun, or
(3) if the contract value on the date of assessment equals or is greater
than $50,000.
An administrative expense charge (sometimes called "sub-account administrative
charge") is deducted on each business day from amounts allocated to the variable
funding options in order to compensate the Company for certain related
administrative and operating expenses. The charge equals, on an annual basis,
0.15% of the daily net asset value allocated to each of the variable funding
options.
MORTALITY AND EXPENSE RISK CHARGE
Each business day, the Company deducts a mortality and expense risk ("M&E")
charge from amounts held in the variable funding options. The deduction is
reflected in our calculation of accumulation and annuity unit values. The
charges stated are the maximum for this product. We reserve the right to lower
this charge at any time. For the Standard Death Benefit, this charge equals, on
an annual basis, 1.55% of the amounts held in each funding option. For the
Enhanced Death Benefit, the charge equals on an annual basis, 1.70%. This charge
compensates the company for risks assumed, benefits provided and expenses
incurred, including payment of commissions to your sales agent.
14
<PAGE> 17
FUNDING OPTION EXPENSES
The charges and expenses of the funding options are summarized in the fee table
and are described in the accompanying prospectuses.
PREMIUM TAX
Certain state and local governments charge premium taxes ranging from 0% to 5%,
depending upon jurisdiction. The Company is responsible for paying these taxes
and will determine the method used to recover premium tax expenses incurred. We
will deduct any applicable premium taxes from the contract value either upon
death, surrender, annuitization, or at the time purchase payments are made to
the Contract, but no earlier than when we have a tax liability under state law.
CHANGES IN TAXES BASED UPON PREMIUM OR VALUE
If there is any change in a law assessing taxes against the Company based upon
premiums, contract gains or value of the contract, we reserve the right to
charge you proportionately for this tax.
TRANSFERS
- --------------------------------------------------------------------------------
Up to 30 days before the maturity date, you may transfer all or part of the
contract value between funding options. Transfers are made at the value(s) next
determined after we receive your request at the Home Office. There are no
charges or restrictions on the amount or frequency of transfers currently;
however, we reserve the right to charge a fee for any transfer request, and to
limit the number of transfers to one in any six-month period. We also reserve
the right to restrict transfers by any market timing firm or any other third
party authorized to initiate transfers on behalf of multiple contract owners. We
may, among other things, not accept: 1) the transfer instructions of any agent
acting under a power of attorney on behalf of more than one owner, or 2) the
transfer or exchange instructions of individual owners who have executed
pre-authorized transfer forms which are submitted by market timing firms or
other third parties on behalf of more than one owner. We further reserve the
right to limit transfers that we determine will disadvantage other contract
owners.
Since different funding options have different expenses, a transfer of contract
values from one funding option to another could result in your investment
becoming subject to higher or lower expenses. After the maturity date, you may
make transfers between funding options only with our consent.
ASSET ALLOCATION PROGRAM
- --------------------------------------------------------------------------------
An asset allocation program is available and is offered to you in conjunction
with your Contract. Under this program, your purchase payments are allocated
among a set of funding options based on asset allocation models which were
designed by Ibbotson Associates. Your asset allocation model will be based on
your responses to a personal profile questionnaire that measures your personal
investment risk tolerance, investment time horizon, financial goals and other
factors. If you elect to participate in the asset allocation program, initial
and additional purchase payments will be allocated among the model and funding
options you select. Although you may only use one model at a time, you may elect
to change your selection as your tolerance for risk and/or your needs and
objectives change. You may use a questionnaire that we offer to determine the
model that best meets your risk tolerance and time horizons.
15
<PAGE> 18
From time to time, Ibbotson Associates reviews the models and may find that
asset allocations within a particular model may need to be changed. We will
notify you regarding any such change.
In order to participate in this program, you will need to complete the required
questionnaire. All Travelers Marquis Portfolios contract features will continue
to apply. Contact your Financial Consultant for additional information.
ACCESS TO YOUR MONEY
- --------------------------------------------------------------------------------
Any time before the maturity date, you may redeem all or any portion of the
contract value, less any premium tax not previously deducted. Unless you submit
a written request specifying the fixed or variable funding option(s)from which
amounts are to be withdrawn, the withdrawal will be made on a pro rata basis.
The contract value will be determined as of the close of business after we
receive your surrender request at the Home Office. The contract value may be
more or less than the purchase payments made. Withdrawals during the annuity
period are not allowed.
We may defer payment of any contract value for a period of up to seven days
after the written request is received, but it is our intent to pay as soon as
possible. We cannot process requests for withdrawals that are not in good order.
We will contact you if there is a deficiency causing a delay and will advise
what is needed to act upon the withdrawal request.
SYSTEMATIC WITHDRAWALS
After the first contract year and before the maturity date, you may choose to
withdraw a specified dollar amount (at least $100) on a monthly, quarterly,
semiannual or annual basis. Any applicable premium taxes and withdrawal charge
will be deducted. To elect systematic withdrawals, you must have a contract
value of at least $15,000 and you must make the election on the form provided by
the Company. We will surrender accumulation units pro rata from all investment
options in which you have an interest, unless you instruct us otherwise. You may
begin or discontinue systematic withdrawals at any time by notifying us in
writing, but at least 30 days' notice must be given to change any systematic
withdrawal instructions that are currently in place.
We reserve the right to discontinue offering systematic withdrawals or to assess
a processing fee for this service upon 30 days' written notice to contract
owners (where allowed by state law).
Each systematic withdrawal is subject to federal income taxes on the taxable
portion. In addition, a 10% federal penalty tax may be assessed on systematic
withdrawals if the contract owner is under age 59 1/2. You should consult with
your tax adviser regarding the tax consequences of systematic withdrawals.
OWNERSHIP PROVISIONS
- --------------------------------------------------------------------------------
TYPES OF OWNERSHIP
Contract Owner (you). The Contract belongs to the contract owner named in the
Contract (on the Specifications page), or to any other person to whom the
contract is subsequently assigned. An assignment of ownership or a collateral
assignment may be made only for nonqualified contracts. You have sole power
during the annuitant's lifetime to exercise any rights and to receive all
benefits given in the contract provided you have not named an irrevocable
beneficiary and provided the Contract is not assigned.
You receive all payments while the annuitant is alive unless you direct them to
an alternate recipient. An alternate recipient does not become the contract
owner.
16
<PAGE> 19
Joint Owner. For nonqualified contracts only, joint owners (e.g. spouses) may
be named in a written request before the contract is in effect. Joint owners may
independently exercise transfers allowed under the Contract. All other rights of
ownership must be exercised by both owners. Joint owners own equal shares of any
benefits accruing or payments made to them.
BENEFICIARY
You name the beneficiary in a written request. The beneficiary has the right to
receive any death benefit proceeds under the contract upon the death of the
annuitant or a contract owner. If more than one beneficiary survives the
annuitant or contract owner, they will share equally in benefits unless
different shares are recorded with the Company by written request before the
death of the annuitant or contract owner. In the case of a non-spousal
beneficiary or a spousal beneficiary who has not chosen to assume the contract,
the death benefit proceeds will be held in a fixed account until the beneficiary
elects a Settlement Option or takes a distribution.
Unless an irrevocable beneficiary has been named, you have the right to change
any beneficiary by written request during the lifetime of the annuitant and
while the Contract continues.
ANNUITANT
The annuitant is designated in the Contract (on the Specifications page), and is
the individual on whose life the maturity date and the amount of the monthly
annuity payments depend. The annuitant may not be changed after the contract is
in effect.
A contingent annuitant may not be changed, deleted or added after the Contract
becomes effective.
DEATH BENEFIT
- --------------------------------------------------------------------------------
Before the maturity date, when there is no contingent annuitant, a death benefit
is payable when either the annuitant or a contract owner dies. The death benefit
is calculated at the close of the business day on which the Company's Home
Office receives due proof of death and written payment instructions ("death
report date").
DEATH PROCEEDS BEFORE THE MATURITY DATE
STANDARD DEATH BENEFIT:
The Company will pay to the beneficiary a death benefit in an amount equal to
the greatest of (1) or (2) below, each reduced by any applicable premium tax or
outstanding loans:
(1) the contract value; or
(2) the total purchase payments made under the Contract less all partial
withdrawals.
ENHANCED DEATH BENEFIT:
The Company will pay the beneficiary a death benefit in an amount equal to the
greatest of (1), (2) or (3) below, each reduced by any applicable premium tax or
outstanding loans:
(1) the contract value;
(2) the total purchase payments less any partial withdrawals made under
the Contract; or
(3) the "step-up value" as described below.
STEP-UP VALUE. The step-up value will initially equal the first purchase
payment. When an additional purchase payment is made, the step-up value will be
increased by the amount of that purchase payment. When a partial surrender is
taken, the step-up value will be reduced by a partial surrender reduction as
described below. On each Contract anniversary before the
17
<PAGE> 20
annuitant's 80th birthday and before the annuitant's death, if the contract
value is greater than the step-up value, the step-up value will be reset to
equal that greater amount. The step-up value will not be reduced on these
anniversary recalculations (provided no surrenders are made on that day). The
only changes made to the step-up value on or after the annuitant's 80th birthday
will be those related to additional purchase payments or partial surrenders.
PARTIAL SURRENDER REDUCTION. If you make a partial surrender, the step-up value
is reduced by a partial surrender reduction which equals (1) the step-up value,
multiplied by (2) the amount of the partial surrender, divided by (3) the
contract value before the surrender.
For example, assume your current contract value is $55,000. If your original
step-up value is $50,000, and you decide to make a partial withdrawal of
$10,000, the step-up value would be reduced as follows:
50,000 x (10,000/55,000) = 9,090
Your new step-up value would be 50,000-9,090, or $40,910.
The following example shows what would happen in a declining market. Assume your
current contract value is $30,000. If your original step-up value is $50,000,
and you decide to make a partial withdrawal of $10,000, the step-up value would
be reduced as follows:
50,000 x (10,000/30,000) = 16,666
Your new step-up value would be 50,000-16,666, or $33,334.
PAYMENT OF PROCEEDS
The process of paying death benefit proceeds before the maturity date under
various situations for nonqualified contracts and qualified contracts is
summarized in the charts below. The charts do not encompass every situation and
are merely intended as a general guide. More detailed information is provided in
your Contract. Generally, the person(s) receiving the benefit may request that
the proceeds be paid in a lump sum, or be applied to one of the settlement
options available under the Contract.
NONQUALIFIED CONTRACTS
<TABLE>
<S> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------
BEFORE THE MATURITY DATE, UPON THE COMPANY WILL PAY THE UNLESS... MANDATORY PAYOUT
THE DEATH OF THE PROCEEDS TO: RULES APPLY*
- --------------------------------------------------------------------------------------------------------------
Owner (who is not the The beneficiary (ies), Unless, the beneficiary is Yes
annuitant) (with no joint or if none, to the the contract owner's spouse
owner) contract owner's estate. and the spouse elects to
continue the contract as the
new owner rather than receive
the distribution.
- --------------------------------------------------------------------------------------------------------------
Owner (who is the annuitant) The beneficiary (ies), Unless, the beneficiary is Yes
(with no joint owner) or if none, to the the contract owner's spouse
contract owner's estate. and the spouse elects to
continue the contract as the
new owner rather than receive
the distribution.
- --------------------------------------------------------------------------------------------------------------
Joint Owner (who is not the The surviving joint Unless the surviving joint Yes
annuitant) owner. owner is the spouse and
elects to assume and continue
the contract.
- --------------------------------------------------------------------------------------------------------------
</TABLE>
18
<PAGE> 21
<TABLE>
<S> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------
BEFORE THE MATURITY DATE, UPON THE COMPANY WILL PAY THE UNLESS... MANDATORY PAYOUT
THE DEATH OF THE PROCEEDS TO: RULES APPLY*
- --------------------------------------------------------------------------------------------------------------
Joint Owner (who is the The beneficiary (ies), Unless the beneficiary is the Yes
annuitant) or if none, to the contract owner's spouse and
contract owner's estate. the spouse elects to assume
and continue the contract.
Or, unless there is a
contingent annuitant the
contingent annuitant becomes
the annuitant and the
proceeds will be paid to the
surviving joint owner. If the
surviving joint owner is the
spouse, the spouse may elect
to assume and continue the
contract.
- --------------------------------------------------------------------------------------------------------------
Annuitant (who is not the The beneficiary (ies). Unless, there is a contingent No
contract owner) annuitant. Then, the
contingent annuitant becomes
the annuitant and the
Contract continues in effect
(generally using the original
maturity date). The proceeds
will then be paid upon the
death of the contingent
annuitant or owner.
- --------------------------------------------------------------------------------------------------------------
Annuitant (who is the contract See death of "owner who N/A
owner) is the annuitant" above.
- --------------------------------------------------------------------------------------------------------------
Annuitant (where owner is a The beneficiary (ies) Yes (Death of
nonnatural person/trust) (e.g. the trust). annuitant is
treated as death
of the owner in
these
circumstances.)
- --------------------------------------------------------------------------------------------------------------
Contingent Annuitant (assuming No death proceeds are N/A
annuitant is still alive) payable; contract
continues.
- --------------------------------------------------------------------------------------------------------------
Beneficiary No death proceeds are N/A
payable; contract
continues.
- --------------------------------------------------------------------------------------------------------------
Contingent Beneficiary No death proceeds are N/A
payable; contract
continues.
- --------------------------------------------------------------------------------------------------------------
</TABLE>
* Certain payout rules of the Internal Revenue Code (IRC) are triggered upon the
death of any Owner. Non-spousal Beneficiaries (as well as spousal
beneficiaries who choose not to assume
19
<PAGE> 22
the contract) must begin taking distributions based on the Beneficiary's life
expectancy within one year of death or take a complete distribution of
contract proceeds within 5 years of death.
QUALIFIED CONTRACTS
<TABLE>
<S> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------
BEFORE THE MATURITY DATE, UPON THE COMPANY WILL PAY THE UNLESS... MANDATORY PAYOUT
THE DEATH OF THE PROCEEDS TO: RULES APPLY (SEE *
ABOVE)
- --------------------------------------------------------------------------------------------------------------
Owner/Annuitant The beneficiary (ies), Yes
or if none, >to the
contract owner's estate.
- --------------------------------------------------------------------------------------------------------------
Beneficiary No death proceeds are N/A
payable; contract
continues.
- --------------------------------------------------------------------------------------------------------------
Contingent Beneficiary No death proceeds are N/A
payable; contract
continues.
- --------------------------------------------------------------------------------------------------------------
</TABLE>
DEATH PROCEEDS AFTER THE MATURITY DATE
If any owner or the annuitant dies on or after the maturity date, the Company
will pay the beneficiary a death benefit consisting of any benefit remaining
under the annuity or income option then in effect.
THE ANNUITY PERIOD
- --------------------------------------------------------------------------------
MATURITY DATE
Under the Contract, you can receive regular income payments (annuity payments).
You can choose the month and the year in which those payments begin (maturity
date). You can also choose among income plans (annuity or income options). While
the annuitant is alive, you can change your selection any time up to the
maturity date. Annuity or income payments will begin on the maturity date stated
in the Contract unless the Contract has been fully surrendered or the proceeds
have been paid to the beneficiary before that date, or unless you elect another
date. Annuity payments are a series of periodic payments (a) for life; (b) for
life with either a minimum number of payments or a specific amount assured; or
(c) for the joint lifetime of the annuitant and another person, and thereafter
during the lifetime of the survivor. We may require proof that the annuitant is
alive before annuity payments are made. Not all options may be available in all
states.
You may choose to annuitize at any time after you purchase the contract. Unless
you elect otherwise, the maturity date will be the later of the annuitant's 90th
birthday, ten years after the effective date, or later with our consent. (In
certain states, the maturity date elected may not be later than the annuitant's
90th birthday; refer to your Contract.)
At least 30 days before the original maturity date, a contract owner may elect
to extend the maturity date to any time prior to the annuitant's 90th birthday
for nonqualified contracts or, for qualified contracts, to a later date with the
Company's consent. Certain annuity options taken at the maturity date may be
used to meet the minimum required distribution requirements of federal tax law,
or a program of partial surrenders may be used instead. These mandatory
distribution requirements take effect generally upon the death of the contract
owner, or with qualified contracts upon either the later of the contract owner's
attainment of age 70 1/2 or year of retirement; or the death of the contract
owner. You should seek independent tax advice regarding the election of minimum
required distributions.
20
<PAGE> 23
ALLOCATION OF ANNUITY
When an annuity option is elected, it may be elected as a variable annuity, a
fixed annuity, or a combination of both. If, at the time annuity payments begin,
no election has been made to the contrary, the contract value will be applied to
provide an annuity funded by the same investment options as you have selected
during the accumulation period. At least 30 days before the maturity date, you
may transfer the contract value among the funding options in order to change the
basis on which annuity payments will be determined. (See "Transfers.")
VARIABLE ANNUITY
You may choose an annuity payout that fluctuates depending on the investment
experience of the variable funding options. The number of annuity units credited
to the Contract is determined by dividing the first monthly annuity payment
attributable to each funding option by the corresponding accumulation unit value
as of 14 days before the date annuity payments begin. An annuity unit is used to
measure the dollar value of an annuity payment. The number of annuity units (but
not their value) remains fixed during the annuity period.
DETERMINATION OF FIRST ANNUITY PAYMENT. The Contract contains tables used to
determine the first monthly annuity payment. If a variable annuity is elected,
the amount applied to it will be the value of the funding options as of 14 days
before the date annuity payments begin less any applicable premium taxes not
previously deducted.
The amount of the first monthly payment depends on the annuity option elected
and the annuitant's adjusted age. A formula for determining the adjusted age is
contained in the Contract. The total first monthly annuity payment is determined
by multiplying the benefit per $1,000 of value shown in the Contract tables by
the number of thousands of dollars of contract value applied to that annuity
option and factors in an assumed daily net investment factor. The Assumed Daily
Net Investment factor corresponds to an annual interest rate of 3%, used to
determine the guaranteed payout rates shown. If investment rates are higher at
the time annuitization is selected, payout rates will be higher than those
shown. The Company reserves the right to require satisfactory proof of age of
any person on whose life annuity payments are based before making the first
payment under any of the payment options.
DETERMINATION OF SECOND AND SUBSEQUENT ANNUITY PAYMENTS. The dollar amount of
all subsequent annuity payments changes from month to month based on the
investment experience of the applicable funding options. The total amount of
each annuity payment will be equal to the sum of the basic payments in each
funding option. The actual amounts of these payments are determined by
multiplying the number of annuity units credited to each funding option by the
corresponding annuity unit value as of the date 14 days before the date the
payment is due.
FIXED ANNUITY
You may choose a fixed annuity that provides payments which do not vary during
the annuity period. We will calculate the dollar amount of the first fixed
annuity payment as described under "Variable Annuity," except that the amount
applied to begin the annuity will be determined as of the date annuity payments
begin. Payout rates will not be lower than those shown in the Contract. If it
would produce a larger payment, the first fixed annuity payment will be
determined using the Life Annuity Tables in effect on the maturity date.
21
<PAGE> 24
PAYMENT OPTIONS
- --------------------------------------------------------------------------------
ELECTION OF OPTIONS
While the annuitant is alive, you can change your annuity option selection any
time up to the maturity date. Once annuity payments have begun, no further
elections are allowed.
During the annuitant's lifetime, if you do not elect otherwise before the
maturity date, we will pay you (or another designated payee) the first of a
series of monthly annuity payments based on the life of the annuitant, in
accordance with Annuity Option 2 (Life Annuity with 120 monthly payments
assured). For certain qualified contracts, Annuity Option 4 (Joint and Last
Survivor Joint Life Annuity -- Annuity Reduced on Death of Primary Payee) will
be the automatic option as described in the Contract.
The minimum amount that can be placed under an annuity option will be $2,000
unless we agree to a lesser amount. If any monthly periodic payment due is less
than $100, the Company reserves the right to make payments at less frequent
intervals, or to pay the contract value in a lump-sum.
On the maturity date, we will pay the amount due under the Contract in
accordance with the payment option that you select. You may choose to receive a
single lump-sum payment. You must elect an option in writing, in a form
satisfactory to the Company. Any election made during the lifetime of the
annuitant must be made by the contract owner.
ANNUITY OPTIONS
Subject to the conditions described in "Election of Options" above, all or any
part of the contract value (less any applicable premium taxes) may be paid under
one or more of the following annuity options. Payments under the annuity options
may be elected on a monthly, quarterly, semiannual or annual basis. We may offer
additional options.
Option 1 -- Life Annuity -- No Refund. The Company will make annuity payments
during the lifetime of the annuitant ending with the last payment before death.
This option offers the maximum periodic payment, since there is no assurance of
a minimum number of payments or provision for a death benefit for beneficiaries.
Option 2 -- Life Annuity with 120, 180 or 240 Monthly Payments Assured. The
Company will make monthly annuity payments during the lifetime of the annuitant,
with the agreement that if, at the death of that person, payments have been made
for less than 120, 180 or 240 months as elected, we will continue making
payments to the beneficiary during the remainder of the period.
Option 3 -- Joint and Last Survivor Life Annuity -- No Refund. The Company will
make regular annuity payments during the lifetime of the annuitant and a second
person. When either person dies, we will continue making payments to the
survivor. No further payments will be made following the death of the survivor.
Option 4 -- Joint and Last Survivor Life Annuity -- Annuity Reduced on Death of
Primary Payee. The Company will make annuity payments during the lifetimes of
the annuitant and a second person. One will be designated the primary payee, the
other will be designated the secondary payee. On the death of the secondary
payee, the Company will continue to make monthly annuity payments to the primary
payee in the same amount that would have been payable during the joint lifetime
of the two persons. On the death of the primary payee, the Company will continue
to make annuity payments to the secondary payee in an amount equal to 50% of the
payments which would have been made during the lifetime of the primary payee. No
further payments will be made once both payees have died.
Option 5 -- Payment for a Fixed Period. The Company will make monthly payments
for the period selected.
22
<PAGE> 25
MISCELLANEOUS CONTRACT PROVISIONS
- --------------------------------------------------------------------------------
RIGHT TO RETURN
You may return the Contract for a full refund of the contract value (including
charges) within ten days after you receive it (the "right to return period").
You bear the investment risk on the purchase payment during the right to return
period; therefore, the contract value returned may be greater or less than your
purchase payment.
If the Contract is purchased as an Individual Retirement Annuity, and is
returned within the first seven days after delivery, your purchase payment will
be refunded in full; during the remainder of the right to return period, the
contract value (including charges) will be refunded.
The contract value will be determined following the close of the business day on
which we receive the Contract and a written request for a refund. Where state
law requires a longer period, or the return of purchase payments or other
variations of this provision, the Company will comply. Refer to your Contract
for any state-specific information.
TERMINATION
You do not need to make any purchase payments after the first to keep the
Contract in effect. However, we reserve the right to terminate the Contract on
any business day if the contract value as of that date is less than $2,000 and
no purchase payments have been made for at least two years, unless otherwise
specified by state law. Termination will not occur until 31 days after the
Company has mailed notice of termination to the contract owner's last known
address and to any assignee of record. If the Contract is terminated, we will
pay you the contract value less any applicable premium tax, and any applicable
administrative charge.
REQUIRED REPORTS
As often as required by law, but at least once in each contract year before the
due date of the first annuity payment, we will furnish a report showing the
number of accumulation units credited to the Contract and the corresponding
accumulation unit value(s) as of the report date for each funding option to
which the contract owner has allocated amounts during the applicable period. The
Company will keep all records required under federal and state laws.
SUSPENSION OF PAYMENTS
The Company reserves the right to suspend or postpone the date of any payment or
determination of values on any business day (1) when the New York Stock Exchange
("the Exchange") is closed; (2) when trading on the Exchange is restricted; (3)
when an emergency exists as determined by the SEC so that the sale of securities
held in the Separate Account may not reasonably occur or so that the Company may
not reasonably determine the value the Separate Account's net assets; or (4)
during any other period when the SEC, by order, so permits for the protection of
security holders.
TRANSFERS OF CONTRACT VALUES TO OTHER ANNUITIES
Where state law permits, we may allow contract owners to transfer their contract
values into other annuities offered by us or our affiliated insurance companies
under rules then in effect.
23
<PAGE> 26
THE SEPARATE ACCOUNTS
- --------------------------------------------------------------------------------
The Travelers Insurance Company and the Travelers Life and Annuity Company each
sponsor separate accounts: The Travelers Separate Account TM for Variable
Annuities ("Separate Account TM") and the Travelers Separate Account TM II for
Variable Annuities ("Separate Account TM II"), respectively. Both Separate
Account TM and Separate Account TM II were established on November 5, 1997 and
are registered with the SEC as unit investment trusts (separate account) under
the Investment Company Act of 1940, as amended (the "1940 Act"). The Separate
Account assets attributable to the Contracts will be invested exclusively in the
shares of the variable funding options.
The assets of Separate Account TM and Separate Account TM II are held for the
exclusive and separate benefit of the owners of each separate account, according
to the laws of Connecticut. Income, gains and losses, whether or not realized,
from assets allocated to the Separate Account are, in accordance with the
Contracts, credited to or charged against the Separate Account without regard to
other income, gains and losses of the Company. The assets held by the Separate
Account are not chargeable with liabilities arising out of any other business
which the Company may conduct. Obligations under the Contract are obligations of
the Company.
All investment income and other distributions of the funding options are payable
to the Separate Account. All such income and/or distributions are reinvested in
shares of the respective funding option at net asset value. Shares of the
funding options are currently sold only to life insurance company separate
accounts to fund variable annuity and variable life insurance contracts.
PERFORMANCE INFORMATION
From time to time, we may advertise several types of historical performance for
the Contract's funding options. We may advertise the "standardized average
annual total returns" of the funding option, calculated in a manner prescribed
by the SEC, and the "non-standardized total return," as described below.
Specific examples of the performance information appear in the SAI.
STANDARDIZED METHOD. Quotations of average annual total returns are computed
according to a formula in which a hypothetical initial investment of $1,000 is
applied to the funding option, and then related to ending redeemable values over
one-, five-, and ten-year periods, or for a period covering the time during
which the funding option has been in existence, if less. These quotations
reflect the deduction of all recurring charges during each period (on a pro rata
basis in the case of fractional periods). The deduction for the annual contract
administrative charge is converted to a percentage of assets based on the actual
fee collected, divided by the average net assets for Contracts sold.
NONSTANDARDIZED METHOD. Nonstandardized "total returns" will be calculated in a
similar manner based on the performance of the funding options over a period of
time, usually for the calendar year-to-date, and for the past one-, three-,
five- and ten-year periods. Nonstandardized total returns will not reflect the
deduction of the annual contract administrative charge, which, if reflected,
would decrease the level of performance shown.
For funding options that were in existence before they became available under
the Separate Account, the nonstandardized average annual total return quotations
will reflect the investment performance that such funding options would have
achieved (reduced by the applicable charges) had they been held under the
Contract for the period quoted. The total return quotations are based upon
historical earnings and are not necessarily representative of future
performance.
GENERAL. Within the guidelines prescribed by the SEC and the National
Association of Securities Dealers, Inc. ("NASD"), performance information may be
quoted numerically or may be presented in a table, graph or other illustration.
Advertisements may include data comparing performance to well-known indices of
market performance (including, but not limited to, the Dow
24
<PAGE> 27
Jones Industrial Average, the Standard & Poor's (S&P) 500 Index, the S&P 400
Index, the Lehman Brothers Long T-Bond Index, the Russell 1000, 2000 and 3000
Indices, the Value Line Index, and the Morgan Stanley Capital International's
EAFE Index). Advertisements may also include published editorial comments and
performance rankings compiled by independent organizations (including, but not
limited to, Lipper Analytical Services, Inc. and Morningstar, Inc.) and
publications that monitor the performance of the Separate Account and the
variable funding options.
FEDERAL TAX CONSIDERATIONS
- --------------------------------------------------------------------------------
The following general discussion of the federal income tax consequences under
this Contract is not intended to cover all situations, and is not meant to
provide tax advice. Because of the complexity of the law and the fact that the
tax results will vary depending on many factors, you should consult your tax
adviser regarding your personal situation. For your information, a more detailed
tax discussion is contained in the SAI.
GENERAL TAXATION OF ANNUITIES
Congress has recognized the value of saving for retirement by providing certain
tax benefits, in the form of tax deferral, for money put into an annuity. The
Internal Revenue Code (Code) governs how this money is ultimately taxed,
depending upon the type of contract, qualified or non-qualified, and the manner
in which the money is distributed, as briefly described below.
TAX-FREE EXCHANGES. The Internal Revenue Code provides that, generally, no gain
or less is recognized when an annuity contract is received in exchange for a
life, endowment, or annuity contract. Since different annuity contracts have
different expenses, fees and benefits, a tax-free exchange could result in your
investment being subject to higher or lower fees and/or expenses.
TYPES OF CONTRACTS: QUALIFIED OR NONQUALIFIED
If you purchase an annuity contract with proceeds of an eligible rollover
distribution from any pension plan, specially sponsored program, or individual
retirement annuity (IRA) with pre-tax dollars, your contract is referred to as a
qualified contract. Some examples of qualified contracts are: IRAs, 403(b)
annuities, pension and profit-sharing plans (including 401(k) plans), Keogh
Plans, and certain other qualified deferred compensation plans. An exception to
this is a qualified plan called a Roth IRA. Under Roth IRAs, after-tax
contributions accumulate until maturity, when amounts (including earnings) may
be withdrawn tax-free. If you purchase the contract on an individual basis with
after-tax dollars and not under one of the programs described above, your
contract is referred to as nonqualified.
NONQUALIFIED ANNUITY CONTRACTS
As the owner of a nonqualified annuity, you do not receive any tax benefit
(deduction or deferral of income) on purchase payments, but you will not be
taxed on increases in the value of your contract until a distribution
occurs -- either as a withdrawal (distribution made prior to the maturity date),
or as annuity payments. When a withdrawal is made, you are taxed on the amount
of the withdrawal that is considered earnings. Similarly, when you receive an
annuity payment, part of each payment is considered a return of your purchase
payments and will not be taxed. The remaining portion of the annuity payment
(i.e., any earnings) will be considered ordinary income for tax purposes.
If a nonqualified annuity is owned by other than an individual, however, (e.g.,
by a corporation), increases in the value of the contract attributable to
purchase payments made after February 28, 1986 are includible in income
annually. Furthermore, for contracts issued after April 22, 1987, if
25
<PAGE> 28
you transfer the contract without adequate consideration all deferred increases
in value will be includible in your income at the time of the transfer.
If you make a partial withdrawal, this money will generally be taxed as first
coming from earnings, (income in the contract), and then from your purchase
payments. These withdrawn earnings are includible in your income. (See "Penalty
Tax for Premature Distributions" below.) There is income in the contract to the
extent the contract value exceeds your investment in the contract. The
investment in the contract equals the total purchase payments you paid less any
amount received previously which was excludible from gross income. Any direct or
indirect borrowing against the value of the contract or pledging of the contract
as security for a loan will be treated as a cash distribution under the tax law.
Federal tax law requires that nonqualified annuity contracts meet minimum
mandatory distribution requirements upon the death of the contract owner,
including the first of joint owners. If these requirements are not met, the
surviving joint owner, or the beneficiary, will have to pay taxes prior to
distribution. The distribution required depends, among other things, upon
whether an annuity option is elected or whether the new contract owner is the
surviving spouse. We will administer Contracts in accordance with these rules
and we will notify you when you should begin receiving payments.
QUALIFIED ANNUITY CONTRACTS
Under a qualified annuity, since amounts paid into the contract have not yet
been taxed, the full amount of all distributions, including lump-sum withdrawals
and annuity payments, are taxed at the ordinary income tax rate unless the
distribution is transferred to an eligible rollover account or contract. The
Contract is available as a vehicle for IRA rollovers and for other qualified
contracts. There are special rules which govern the taxation of qualified
contracts, including withdrawal restrictions, requirements for mandatory
distributions, and contribution limits. We have provided a more complete
discussion in the SAI.
PENALTY TAX FOR PREMATURE DISTRIBUTIONS
Taxable distributions taken before the contract owner has reached the age of
59 1/2 will be subject to a 10% additional tax penalty unless the distribution
is taken in a series of periodic distributions, for life or life expectancy, or
unless the distribution follows the death or disability of the contract owner.
Other exceptions may be available in certain qualified plans.
DIVERSIFICATION REQUIREMENTS FOR VARIABLE ANNUITIES
The Code requires that any nonqualified variable annuity contracts based on a
separate account shall not be treated as an annuity for any period if
investments made in the account are not adequately diversified. Final tax
regulations define how separate accounts must be diversified. The Company
monitors the diversification of investments constantly and believes that its
accounts are adequately diversified. The consequence of any failure to diversify
is essentially the loss to the Contract Owner of tax deferred treatment. The
Company intends to administer all contracts subject to this provision of law in
a manner that will maintain adequate diversification.
OWNERSHIP OF THE INVESTMENTS
Assets in the separate accounts, also referred to as segregated asset accounts,
must be owned by the Company and not by the Contract Owner for federal income
tax purposes. Otherwise, the deferral of taxes is lost and income and gains from
the accounts would be includable annually in the Contract Owner's gross income.
The Internal Revenue Service has stated in published rulings that a variable
contract owner will be considered the owner of the assets of a segregated asset
account if the owner possesses an incident of ownership in those assets, such as
the ability to exercise investment control over the
26
<PAGE> 29
assets. The Treasury Department announced, in connection with the issuance of
temporary regulations concerning investment diversification, that those
regulations "do not provide guidance concerning the circumstances in which
investor control of the investments of a segregated asset account may cause the
investor, rather than the insurance company, to be treated as the owner of the
assets of the account." This announcement, dated September 15, 1986, also stated
that the guidance would be issued by way of regulations or rulings on the
"extent to which policyholders may direct their investments to particular
subaccounts [of a segregated asset account] without being treated as owners of
the underlying assets." As of the date of this prospectus, no such guidance has
been issued.
The Company does not know if such guidance will be issued, or if it is, what
standards it may set. Furthermore, the Company does not know if such guidance
may be issued with retroactive effect. New regulations are generally issued with
a prospective-only effect as to future sales or as to future voluntary
transactions in existing contracts. The Company therefore reserves the right to
modify the contract as necessary to attempt to prevent Contract Owners from
being considered the owner of the assets of the separate account.
MANDATORY DISTRIBUTIONS FOR QUALIFIED PLANS
Federal tax law requires that minimum annual distributions begin by April 1st of
the calendar year following the calendar year in which an IRA owner attains age
70 1/2. Participants in qualified plans and 403(b) annuities may defer minimum
distributions until the later of April 1st of the calendar year following the
calendar year in which they attain age 70 1/2 or the year of retirement.
Distributions must begin or be continued according to required patterns
following the death of the contract owner or annuitant of both qualified and
nonqualified annuities.
TAXATION OF DEATH BENEFIT PROCEEDS
Amounts may be distributed from a Contract because of the death of an owner or
annuitant. Generally, such amounts are includible in the income of the recipient
as follows: (i) if distributed in a lump sum, they are taxed in the same manner
as a full surrender of the contract; or (ii) if distributed under a payment
option, they are taxed in the same way as annuity payments.
OTHER INFORMATION
- --------------------------------------------------------------------------------
THE INSURANCE COMPANIES
Please refer to the first page of the Summary of this prospectus to determine
which company issued your Contract.
The Travelers Insurance Company is a stock insurance company chartered in 1864
in Connecticut and continuously engaged in the insurance business since that
time. It is licensed to conduct life insurance business in all states of the
United States, the District of Columbia, Puerto Rico, Guam, the U.S. and British
Virgin Islands and the Bahamas. The Company is an indirect wholly owned
subsidiary of Citigroup, Inc. The Company's Home Office is located at One Tower
Square, Hartford, Connecticut 06183.
The Travelers Life and Annuity Company is a stock insurance company chartered in
1973 in Connecticut and continuously engaged in the insurance business since
that time. It is licensed to conduct life insurance business in a majority of
the states of the United States, the District of Columbia and Puerto Rico, and
intends to seek licensure in the remaining states, except New York. The Company
is an indirect wholly owned subsidiary of Citigroup Inc. The Company's Home
Office is located at One Tower Square, Hartford, Connecticut 06183.
27
<PAGE> 30
FINANCIAL STATEMENTS
The financial statements for each insurance company and for each separate
account are located in their respective Statements of Additional Information.
IMSA
The Companies are members of the Insurance Marketplace Standards Association
("IMSA"), and as such may use the IMSA logo and IMSA membership in
advertisements. Companies that belong to IMSA subscribe to a set of ethical
standards covering the various aspects of sales and service for individually
sold life insurance and annuities. IMSA members have adopted policies and
procedures that demonstrate a commitment to honesty, fairness and integrity in
all customer contacts involving the sale and service of individual life
insurance and annuity products.
DISTRIBUTION OF VARIABLE ANNUITY CONTRACTS
The Company intends to sell the Contracts in all jurisdictions where it is
licensed to do business and where the Contract is approved. Any sales
representative or employee who sells the Contracts will be qualified to sell
variable annuities under applicable federal and state laws. Each broker-dealer
is registered with the SEC under the Securities Exchange Act of 1934, and all
are members of the NASD. The principal underwriter of the Contracts is CFBDS,
Inc., 21 Milk St., Boston, MA. CFBDS, Inc. is not affiliated with the Company or
the Separate Account. However, it is currently anticipated that Travelers
Distribution LLC, an affiliated broker-dealer, may become the principal
underwriter for the Contracts during the year 2000.
Up-front compensation paid to sales representatives will not exceed 7% of the
purchase payments made under the Contracts. If asset based compensation is paid,
it will not exceed 2% of the average account value annually. From time to time,
the Company may pay or permit other promotional incentives, in cash, credit or
other compensation.
CONFORMITY WITH STATE AND FEDERAL LAWS
The Contract is governed by the laws of the state in which it is delivered.
Where a state has not approved a contract feature or funding option, it will not
be available in that state. Any paid-up annuity, contract value or death
benefits that are available under the Contract are not less than the minimum
benefits required by the statutes of the state in which the Contract is
delivered. We reserve the right to make any changes, including retroactive
changes, in the Contract to the extent that the change is required to meet the
requirements of any law or regulation issued by any governmental agency to which
the Company, the Contract or the contract owner is subject.
VOTING RIGHTS
The Company is the legal owner of the shares of the funding options. However, we
believe that when a funding option solicits proxies in conjunction with a vote
of shareholders we are required to obtain from you and from other owners
instructions on how to vote those shares. When we receive those instructions, we
will vote all of the shares we own in proportion to those instructions. This
will also include any shares we own on our own behalf. Should we determine that
we are no longer required to comply with the above, we will vote on the shares
in our own right.
LEGAL PROCEEDINGS AND OPINIONS
Legal matters in connection with the federal laws and regulations affecting the
issue and sale of the contract described in this prospectus, as well as the
organization of the Companies, their authority to issue variable annuity
contracts under Connecticut law and the validity of the forms of the variable
annuity contracts under Connecticut law, have been passed on by the General
Counsel of the Companies.
28
<PAGE> 31
THE TRAVELERS INSURANCE COMPANY
There are no pending legal proceedings affecting the Separate Account. There is
one material pending legal proceeding, other than ordinary routine litigation
incidental to business, to which the Company is a party.
In March 1997, a purported class action entitled Patterman v. The Travelers,
Inc., et al. was commenced in the Superior Court of Richmond County, Georgia,
alleging, among other things, violations of the Georgia RICO statute and other
state laws by an affiliate of the Company, Primerica Financial Services, Inc.
and certain of its affiliates. Plaintiffs seek unspecified compensatory and
punitive damages and other relief. In October 1997, defendants answered the
complaint, denied liability and asserted numerous affirmative defenses. In
February 1998, on defendants' motion, the Superior Court of Richmond County
transferred the lawsuit to the Superior Court of Gwinnett County, Georgia.
Plaintiffs appealed the transfer order, and in December 1998 the Court of
Appeals of the State of Georgia reversed the lower court's decision. Defendants
petitioned the Georgia Supreme Court to hear an appeal from the decision of the
Court of Appeals, and the petition was granted in May 1998. In September 1999,
oral argument on defendants' petition was heard and, on February 28, 2000, the
Georgia Supreme Court affirmed the Georgia County Appeals and remanded the
matter to the Superior Court of Richmond County. In March 2000, defendants moved
the Georgia Supreme Court to reconsider its February 28, 2000 decision, and that
motion remains pending. Proceedings in the trial court have been stayed pending
appeal. Defendants intend to vigorously contest the litigation.
THE TRAVELERS LIFE AND ANNUITY COMPANY
There are no pending material legal proceedings affecting the Separate Account,
the principal underwriter or the Company.
29
<PAGE> 32
THIS PAGE INTENTIONALLY LEFT BLANK.
<PAGE> 33
APPENDIX A
CONDENSED FINANCIAL INFORMATION
- --------------------------------------------------------------------------------
THE TRAVELERS SEPARATE ACCOUNT TM FOR VARIABLE ANNUITIES
ACCUMULATION UNIT VALUES
<TABLE>
<CAPTION>
PERIOD FROM
JULY 20, 1998
PERIOD ENDED (EFFECTIVE DATE) TO
DECEMBER 31, 1999 DECEMBER 31, 1998
PORTFOLIO NAME STANDARD ENHANCED STANDARD ENHANCED
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
DELAWARE GROUP PREMIUM FUND
REIT SERIES (8/98)
Unit Value at beginning of year...................... $ 0.958 $ 0.957 $ 1.000 $ 1.000
Unit Value at end of year............................ 0.917 0.915 0.958 0.957
Number of units outstanding at end of year........... 30,843 162,017 13,403 5,447
SMALL CAP VALUE SERIES (11/98)
Unit Value at beginning of year...................... $ 1.005 $ 1.005 $ 1.000 1.000
Unit Value at end of year............................ 0.940 0.938 1.005 1.005
Number of units outstanding at end of year........... 37,900 65,404 5,244 --
DREYFUS VARIABLE INVESTMENT FUND
CAPITAL APPRECIATION PORTFOLIO (8/98)
Unit Value at beginning of year...................... $ 1.080 $ 1.079 $ 1.000 $ 1.000
Unit Value at end of year............................ 1.183 1.180 1.080 1.079
Number of units outstanding at end of year........... 404,436 341,217 69,574 17,190
SMALL CAP PORTFOLIO (9/98)
Unit Value at beginning of year...................... $ 0.992 $ 1.992 $ 1.000 $ 1.000
Unit Value at end of year............................ 1.202 1.199 0.992 1.992
Number of units outstanding at end of year........... 175,277 309,595 90,951 9,007
THE MONTGOMERY FUNDS III
MONTGOMERY VARIABLE SERIES; GROWTH FUND (9/98)
Unit Value at beginning of year...................... $ 1.034 $ 1.034 $ 1.000 $ 1.000
Unit Value at end of year............................ 1.229 1.226 1.034 1.034
Number of units outstanding at end of year........... 43,585 249,841 10,809 3,925
OCC ACCUMULATION TRUST
EQUITY PORTFOLIO (9/98)
Unit Value at beginning of year...................... $ 1.013 $ 1.012 $ 1.000 $ 1.000
Unit Value at end of year............................ 1.021 1.019 1.013 1.012
Number of units outstanding at end of year........... 117,236 214,502 97,009 25,264
SALOMON BROTHERS VARIABLE SERIES FUNDS, INC.
INVESTORS FUND (10/98)
Unit Value at beginning of year...................... $ 1.036 $ 1.036 $ 1.000 1.000
Unit Value at end of year............................ 1.138 1.135 1.036 1.036
Number of units outstanding at end of year........... 310,855 24,672 24,856 --
STRONG VARIABLE INSURANCE FUNDS, INC.
STRONG SCHAFER VALUE FUND II (11/98)
Unit Value at beginning of year...................... $ 1.035 $ 1.035 $ 1.000 $ 1.000
Unit Value at end of year............................ 0.989 0.987 1.035 1.035
Number of units outstanding at end of year........... 40,237 46,628 21,778 5,193
TEMPLETON VARIABLE PRODUCTS SERIES FUND
FRANKLIN SMALL CAP INVESTMENTS FUND CLASS 2 (12/98)
Unit Value at beginning of year...................... $ 1.072 $ 1.071 $ 1.000 $ 1.000
Unit Value at end of year............................ 1.837 1.833 1.072 1.071
Number of units outstanding at end of year........... 24,048 167,293 10,667 10,436
TEMPLETON DEVELOPING MARKETS FUND CLASS 2 (11/98)
Unit Value at beginning of year...................... $ 1.018 $ 1.018 $ 1.000 $ 1.000
Unit Value at end of year............................ 1.535 1.532 1.018 1.018
Number of units outstanding at end of year........... 32,333 135,187 12,791 2,959
TEMPLETON INTERNATIONAL FUND CLASS 2 (8/98)
Unit Value at beginning of year...................... $ 0.934 $ 0.933 $ 1.000 $ 1.000
Unit Value at end of year............................ 1.131 1.129 0.934 0.933
Number of units outstanding at end of year........... 167,939 75,785 70,695 21,233
TRAVELERS SERIES FUND, INC.
AIM CAPITAL APPRECIATION PORTFOLIO (8/98)
Unit Value at beginning of year...................... $ 1.074 $ 1.073 $ 1.000 $ 1.000
Unit Value at end of year............................ 1.509 1.506 1.074 1.073
Number of units outstanding at end of year........... 160,182 227,578 13,025 21,451
SMITH BARNEY HIGH INCOME PORTFOLIO (8/98)
Unit Value at beginning of year...................... $ 0.949 $ 0.949 $ 1.000 $ 1.000
Unit Value at end of year............................ 0.958 0.956 0.949 0.949
Number of units outstanding at end of year........... 467,863 522,735 99,255 4,997
</TABLE>
A-1
<PAGE> 34
APPENDIX A
CONDENSED FINANCIAL INFORMATION
- --------------------------------------------------------------------------------
THE TRAVELERS SEPARATE ACCOUNT TM FOR VARIABLE ANNUITIES
ACCUMULATION UNIT VALUES (CONTINUED)
<TABLE>
<CAPTION>
PERIOD FROM
JULY 20, 1998
PERIOD ENDED (EFFECTIVE DATE) TO
DECEMBER 31, 1999 DECEMBER 31, 1998
PORTFOLIO NAME STANDARD ENHANCED STANDARD ENHANCED
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------
<->TRAVELERS SERIES FUND, INC. (CONT.)
SMITH BARNEY LARGE CAPITALIZATION GROWTH PORTFOLIO
(8/98)
Unit Value at beginning of year...................... $ 1.165 $ 1.164 $ 1.000 $ 1.000
Unit Value at end of year............................ 1.498 1.495 1.165 1.164
Number of units outstanding at end of year........... 980,806 1,314,065 222,326 19,674
SMITH BARNEY MONEY MARKET PORTFOLIO (9/98)
Unit Value at beginning of year...................... $ 1.013 $ 1.013 $ 1.000 1.000
Unit Value at end of year............................ 1.044 1.041 1.013 1.013
Number of units outstanding at end of year........... 241,033 190,529 157,837 --
TRAVELERS MANAGED INCOME PORTFOLIO (7/98)
Unit Value at beginning of year...................... $ 0.997 $ 0.997 $ 1.000 $ 1.000
Unit Value at end of year............................ 0.989 0.987 0.997 0.997
Number of units outstanding at end of year........... 841,369 818,644 163,644 14,831
THE TRAVELERS SERIES TRUST
DISCIPLINED MID CAP STOCK PORTFOLIO (8/98)
Unit Value at beginning of year...................... $ 1.102 $ 1.101 $ 1.000 $ 1.000
Unit Value at end of year............................ 1.229 1.227 1.102 1.101
Number of units outstanding at end of year........... 130,522 39,328 25,371 7,351
DISCIPLINED SMALL CAP STOCK PORTFOLIO (8/98)
Unit Value at beginning of year...................... $ 0.994 $ 0.994 $ 1.000 $ 1.000
Unit Value at end of year............................ 1.177 1.175 0.994 0.994
Number of units outstanding at end of year........... 24,730 82,755 18,221 6,938
JURIKA & VOYLES CORE EQUITY PORTFOLIO (12/98)
Unit Value at beginning of year...................... $ 1.120 $ 1.119 1.000 $ 1.000
Unit Value at end of year............................ 1.215 1.212 1.120 1.119
Number of units outstanding at end of year........... -- 109,351 -- 4,782
LARGE CAP PORTFOLIO (8/98)
Unit Value at beginning of year...................... $ 1.124 $ 1.123 $ 1.000 $ 1.000
Unit Value at end of year............................ 1.429 1.426 1.124 1.123
Number of units outstanding at end of year........... 609,907 714,812 43,623 4,881
LAZARD INTERNATIONAL STOCK PORTFOLIO (7/98)
Unit Value at beginning of year...................... $ 0.923 $ 0.922 $ 1.000 $ 1.000
Unit Value at end of year............................ 1.104 1.102 0.923 0.922
Number of units outstanding at end of year........... 358,549 697,501 152,201 23,016
MFS RESEARCH PORTFOLIO (11/98)
Unit Value at beginning of year...................... $ 1.036 $ 1.036 $ 1.000 1.000
Unit Value at end of year............................ 1.260 1.258 1.036 1.036
Number of units outstanding at end of year........... 356,534 525,554 99,898 --
NWQ LARGE CAP PORTFOLIO (11/98)
Unit Value at beginning of year...................... $ 0.985 $ 0.985 $ 1.000 1.000
Unit Value at end of year............................ 1.017 1.015 0.985 0.985
Number of units outstanding at end of year........... 129,620 305,754 27,741 --
STRATEGIC STOCK PORTFOLIO (1/99)
Unit Value at beginning of year...................... $ 0.998 $ 0.997 1.000 1.000
Unit Value at end of year............................ 1.030 1.027 0.998 0.997
Number of units outstanding at end of year........... 123,046 -- -- --
U.S. GOVERNMENT SECURITIES PORTFOLIO (8/98)
Unit Value at beginning of year...................... $ 1.046 $ 1.045 $ 1.000 1.000
Unit Value at end of year............................ 0.986 0.984 1.046 1.045
Number of units outstanding at end of year........... 455,487 208,167 167,258 --
WARBURG PINCUS TRUST
EMERGING MARKETS PORTFOLIO (8/98)
Unit Value at beginning of year...................... $ 0.843 $ 0.842 $ 1.000 $ 1.000
Unit Value at end of year............................ 1.503 1.500 0.843 0.842
Number of units outstanding at end of year........... 30,889 272,106 27,219 4,069
</TABLE>
The date next to each funding option's name reflects the date money first came
into the funding option through the Separate Account. The financial statements
for Separate Account TM II and the financial statements for The Travelers Life
and Annuity Company are contained in the SAI. Those funding options not listed
above were not available as of December 31, 1999.
A-2
<PAGE> 35
APPENDIX B
CONDENSED FINANCIAL INFORMATION
- --------------------------------------------------------------------------------
THE TRAVELERS SEPARATE ACCOUNT TM II FOR VARIABLE ANNUITIES
ACCUMULATION UNIT VALUES
<TABLE>
<CAPTION>
PERIOD FROM
JULY 28, 1998
PERIOD ENDED (EFFECTIVE DATE) TO
DECEMBER 31, 1999 DECEMBER 31, 1998
PORTFOLIO NAME STANDARD ENHANCED STANDARD ENHANCED
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
DELAWARE GROUP PREMIUM FUND
REIT SERIES (7/98)
Unit Value at beginning of year..................... $0.958 $0.957 $1.000 $1.000
Unit Value at end of year........................... 0.917 0.915 0.958 0.957
Number of units outstanding at end of year.......... 2,708,375 2,774,241 1,203,931 737,088
SMALL CAP VALUE SERIES (7/98)
Unit Value at beginning of year..................... $1.005 $1.005 $1.000 $1.000
Unit Value at end of year........................... 0.940 0.938 1.005 1.005
Number of units outstanding at end of year.......... 2,494,324 1,995,812 997,680 945,867
DREYFUS VARIABLE INVESTMENT FUND
CAPITAL APPRECIATION PORTFOLIO (7/98)
Unit Value at beginning of year..................... $1.080 $1.079 $1.000 $1.000
Unit Value at end of year........................... 1.183 1.180 1.080 1.079
Number of units outstanding at end of year.......... 9,234,694 7,731,002 3,607,198 2,235,635
SMALL CAP PORTFOLIO (7/98)
Unit Value at beginning of year..................... $0.992 $0.992 $1.000 $1.000
Unit Value at end of year........................... 1.202 1.199 0.992 0.992
Number of units outstanding at end of year.......... 49,819,089 5,202,767 11,692,226 1,337,518
THE MONTGOMERY FUNDS III
MONTGOMERY VARIABLE SERIES; GROWTH FUND (7/98)
Unit Value at beginning of year..................... $1.034 $1.034 $1.000 $1.000
Unit Value at end of year........................... 1.229 1.226 1.034 1.034
Number of units outstanding at end of year.......... 2,328,085 3,341,315 707,170 711,899
OCC ACCUMULATION TRUST
EQUITY PORTFOLIO (7/98)
Unit Value at beginning of year..................... $1.013 $1.012 $1.000 $1.000
Unit Value at end of year........................... 1.021 1.019 1.013 1.012
Number of units outstanding at end of year.......... 5,524,668 10,145,642 2,145,584 3,539,272
SALOMON BROTHERS VARIABLE SERIES FUNDS, INC.
INVESTORS FUND (7/98)
Unit Value at beginning of year..................... $1.036 $1.036 $1.000 $1.000
Unit Value at end of year........................... 1.138 1.135 1.036 1.036
Number of units outstanding at end of year.......... 7,439,494 5,734,969 2,216,940 1,268,600
STRONG VARIABLE INSURANCE FUNDS, INC.
STRONG SCHAFER VALUE FUND II (7/98)
Unit Value at beginning of year..................... $1.035 $1.035 $1.000 $1.000
Unit Value at end of year........................... 0.989 0.987 1.035 1.035
Number of units outstanding at end of year.......... 3,899,036 4,125,225 1,223,602 1,493,135
TEMPLETON VARIABLE PRODUCTS SERIES FUND
FRANKLIN SMALL CAP INVESTMENTS FUND CLASS 2 (7/98)
Unit Value at beginning of year..................... $1.072 $1.071 $1.000 $1.000
Unit Value at end of year........................... 1.837 1.833 1.072 1.071
Number of units outstanding at end of year.......... 3,616,359 4,408,346 1,140,671 1,065,535
TEMPLETON DEVELOPING MARKETS FUND CLASS 2 (7/98)
Unit Value at beginning of year..................... $1.018 $1.018 $1.000 $1.000
Unit Value at end of year........................... 1.535 1.532 1.018 1.018
Number of units outstanding at end of year.......... 1,581,452 2,458,389 553,203 495,430
TEMPLETON INTERNATIONAL FUND CLASS 2 (7/98)
Unit Value at beginning of year..................... $0.934 $0.933 $1.000 $1.000
Unit Value at end of year........................... 1.131 1.129 0.934 0.933
Number of units outstanding at end of year.......... 16,064,588 7,581,668 3,208,623 2,007,980
TRAVELERS SERIES FUND, INC.
AIM CAPITAL APPRECIATION PORTFOLIO (7/98)
Unit Value at beginning of year..................... $1.074 $1.073 $1.000 $1.000
Unit Value at end of year........................... 1.509 1.506 1.074 1.073
Number of units outstanding at end of year.......... 7,917,069 10,806,635 2,829,493 2,034,539
SMITH BARNEY HIGH INCOME PORTFOLIO (7/98)
Unit Value at beginning of year..................... $0.949 $0.949 $1.000 $1.000
Unit Value at end of year........................... 0.958 0.956 0.949 0.949
Number of units outstanding at end of year.......... 11,849,075 11,834,439 4,153,841 2,336,688
</TABLE>
B-1
<PAGE> 36
APPENDIX B
CONDENSED FINANCIAL INFORMATION
- --------------------------------------------------------------------------------
THE TRAVELERS SEPARATE ACCOUNT TM II FOR VARIABLE ANNUITIES
ACCUMULATION UNIT VALUES (CONTINUED)
<TABLE>
<CAPTION>
PERIOD FROM
JULY 28, 1998
PERIOD ENDED (EFFECTIVE DATE) TO
DECEMBER 31, 1999 DECEMBER 31, 1998
PORTFOLIO NAME STANDARD ENHANCED STANDARD ENHANCED
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------
<->TRAVELERS SERIES FUND, INC. (CONT.)
SMITH BARNEY LARGE CAPITALIZATION GROWTH
PORTFOLIO (7/98)
Unit Value at beginning of year..................... $1.165 $1.164 $1.000 $1.000
Unit Value at end of year........................... 1.498 1.495 1.165 1.164
Number of units outstanding at end of year.......... 20,512,758 22,901,699 5,546,493 4,295,306
SMITH BARNEY MONEY MARKET PORTFOLIO (7/98)
Unit Value at beginning of year..................... $1.013 $1.013 $1.000 $1.000
Unit Value at end of year........................... 1.044 1.041 1.013 1.013
Number of units outstanding at end of year.......... 15,470,047 10,341,808 16,945,764 5,361,023
TRAVELERS MANAGED INCOME PORTFOLIO (7/98)
Unit Value at beginning of year..................... $0.997 $0.997 $1.000 $1.000
Unit Value at end of year........................... 0.989 0.987 0.997 0.997
Number of units outstanding at end of year.......... 29,609,709 28,494,450 9,136,205 8,972,968
THE TRAVELERS SERIES TRUST
DISCIPLINED MID CAP STOCK PORTFOLIO (7/98)
Unit Value at beginning of year..................... $1.102 $1.101 $1.000 $1.000
Unit Value at end of year........................... 1.229 1.227 1.102 1.101
Number of units outstanding at end of year.......... 5,262,368 5,718,100 1,803,332 1,019,641
DISCIPLINED SMALL CAP STOCK PORTFOLIO (7/98)
Unit Value at beginning of year..................... $0.994 $0.994 $1.000 $1.000
Unit Value at end of year........................... 1.177 1.175 0.994 0.994
Number of units outstanding at end of year.......... 2,383,789 2,395,044 573,554 411,984
JURIKA & VOYLES CORE EQUITY PORTFOLIO (7/98)
Unit Value at beginning of year..................... $1.120 $1.119 $1.000 $1.000
Unit Value at end of year........................... 1.215 1.212 1.120 1.119
Number of units outstanding at end of year.......... 1,327,779 1,465,577 688,244 211,666
LARGE CAP PORTFOLIO (7/98)
Unit Value at beginning of year..................... $1.124 $1.123 $1.000 $1.000
Unit Value at end of year........................... 1.429 1.426 1.124 1.123
Number of units outstanding at end of year.......... 12,235,302 16,376,413 2,626,893 2,924,400
LAZARD INTERNATIONAL STOCK PORTFOLIO (7/98)
Unit Value at beginning of year..................... $0.923 $0.922 $1.000 $1.000
Unit Value at end of year........................... 1.104 1.102 0.923 0.922
Number of units outstanding at end of year.......... 15,199,353 16,263,702 5,353,658 4,798,972
MFS RESEARCH PORTFOLIO (7/98)
Unit Value at beginning of year..................... $1.036 $1.036 $1.000 $1.000
Unit Value at end of year........................... 1.260 1.258 1.036 1.036
Number of units outstanding at end of year.......... 5,602,395 7,433,610 1,147,635 1,181,631
NWQ LARGE CAP PORTFOLIO (7/98)
Unit Value at beginning of year..................... $0.985 $0.985 $1.000 $1.000
Unit Value at end of year........................... 1.017 1.015 0.985 0.985
Number of units outstanding at end of year.......... 7,026,564 7,231,932 2,138,258 1,602,093
STRATEGIC STOCK PORTFOLIO (7/98)
Unit Value at beginning of year..................... $0.998 $0.997 $1.000 $1.000
Unit Value at end of year........................... 1.030 1.027 0.998 0.997
Number of units outstanding at end of year.......... 4,276,549 4,693,865 1,617,601 1,341,879
U.S. GOVERNMENT SECURITIES PORTFOLIO (7/98)
Unit Value at beginning of year..................... $1.046 $1.045 $1,000 $1,000
Unit Value at end of year........................... 0.986 0.984 1.046 1.045
Number of units outstanding at end of year.......... 6,962,624 6,963,749 2,467,008 1,161,742
WARBURG PINCUS TRUST
EMERGING MARKETS PORTFOLIO (7/98)
Unit Value at beginning of year..................... $0.843 $0.842 $1.000 $1.000
Unit Value at end of year........................... 1.503 1.500 0.843 0.842
Number of units outstanding at end of year.......... 1,105,585 1,775,067 617,918 436,823
</TABLE>
The date next to each funding option's name reflects the date money first came
into the funding option through the Separate Account. The financial statements
for Separate Account TM II and the financial statements for The Travelers Life
and Annuity Company are contained in the SAI. Those funding options not listed
above were not available as of December 31, 1999.
B-2
<PAGE> 37
APPENDIX C
- --------------------------------------------------------------------------------
TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION
The Statement of Additional Information contains more specific information and
financial statements relating to The Travelers Insurance Company or The
Travelers Life and Annuity Company. A list of the contents of the Statement of
Additional Information is set forth below:
The Insurance Company
Principal Underwriter
Distribution and Principal Underwriting Agreement
Valuation of Assets
Performance Information
Mixed and Shared Funding
Federal Tax Considerations
Independent Accountants
Financial Statements
- --------------------------------------------------------------------------------
Copies of the Statement of Additional Information dated May 1, 2000 are
available without charge. To request a copy, please clip this coupon on the
dotted line above, enter your name and address in the spaces provided below, and
mail to: The Travelers Insurance Company, Annuity Investor Services, One Tower
Square, Hartford, Connecticut 06183. The Travelers Insurance Company Statement
of Additional Information is printed on Form L-21254S, and The Travelers Life
and Annuity Statement of Additional Information is printed on Form L-21255S.
Name:
Address:
C-1
<PAGE> 38
THIS PAGE INTENTIONALLY LEFT BLANK.
<PAGE> 39
L-21254 May 1, 2000
<PAGE> 40
PART B
Information Required in a Statement of Additional Information
<PAGE> 41
TRAVELERS MARQUIS PORTFOLIOS
STATEMENT OF ADDITIONAL INFORMATION
dated
May 1, 2000
for
THE TRAVELERS SEPARATE ACCOUNT TM FOR VARIABLE ANNUITIES
ISSUED BY
THE TRAVELERS INSURANCE COMPANY
This Statement of Additional Information ("SAI") is not a prospectus but relates
to, and should be read in conjunction with, the Individual Variable Annuity
Contract Prospectus dated May 1, 2000 A copy of the Prospectus may be obtained
by writing to The Travelers Insurance Company, Annuity Investor Services, One
Tower Square, Hartford, Connecticut 06183-9061, by calling 1-800-842-8573 or by
accessing the Securities and Exchange Commission's website at
http://www.sec.gov.
TABLE OF CONTENTS
<TABLE>
<S> <C>
THE INSURANCE COMPANY ...................................................... 2
PRINCIPAL UNDERWRITER ...................................................... 2
DISTRIBUTION AND PRINCIPAL UNDERWRITING AGREEMENT .......................... 3
VALUATION OF ASSETS ........................................................ 3
PERFORMANCE INFORMATION .................................................... 4
MIXED AND SHARED FUNDING ................................................... 8
FEDERAL TAX CONSIDERATIONS ................................................. 8
INDEPENDENT ACCOUNTANTS .................................................... 11
FINANCIAL STATEMENTS ....................................................... F-1
</TABLE>
<PAGE> 42
THE INSURANCE COMPANY
The Travelers Insurance Company (the "Company") is a stock insurance
company chartered in 1864 in Connecticut and continuously engaged in the
insurance business since that time. The Company is licensed to conduct a life
insurance business in all states of the United States, the District of Columbia,
Puerto Rico, Guam, the U.S. and British Virgin Islands, and the Bahamas. The
Company's Home Office is located at One Tower Square, Hartford, Connecticut
06183, and its telephone number is (860) 277-0111.
The Company is a wholly owned subsidiary of The Travelers Insurance
Group Inc., an indirect, wholly owned subsidiary of Citigroup Inc.
("Citigroup"), a diversified holding company whose businesses provide a broad
range of financial services to consumer and corporate customers around the
world. Citigroup's activities are conducted through the Global Consumer, Global
Corporate and Investment Bank, Global Investment Management and Private Banking,
and Investment Activities segments.
STATE REGULATION. The Company is subject to the laws of the state of Connecticut
governing insurance companies and to regulation by the Insurance Commissioner of
the state of Connecticut (the "Commissioner"). An annual statement covering the
operations of the Company for the preceding year, as well as its financial
conditions as of December 31 of such year, must be filed with the Commissioner
in a prescribed format on or before March 1 of each year. The Company's books
and assets are subject to review or examination by the Commissioner or his
agents at all times, and a full examination of its operations is conducted at
least once every four years.
The Company is also subject to the insurance laws and regulations of
all other states in which it is licensed to operate. However, the insurance
departments of each of these states generally apply the laws of the home state
(jurisdiction of domicile) in determining the field of permissible investments.
THE SEPARATE ACCOUNT. Separate Account TM meets the definition of a separate
account under the federal securities laws, and will comply with the provisions
of the 1940 Act. Additionally, the operations of Separate Account TM are subject
to the provisions of Section 38a-433 of the Connecticut General Statutes which
authorizes the Commissioner to adopt regulations under it. Section 38a-433
contains no restrictions on the investments of the Separate Account, and the
Commissioner has adopted no regulations under the Section that affect the
Separate Account.
PRINCIPAL UNDERWRITER
CFBDS, Inc. serves as principal underwriter for Separate Account TM
and the Contracts. The offering is continuous. CFBDS, Inc.'s principal executive
offices are located at 21 Milk Street, Boston, MA 02116. CFBDS is not affiliated
with the Company or Separate Account TM. However, it is currently anticipated
that Travelers Distribution LLC, an affiliated broker dealer, may become the
principal underwriter for the Contracts during the year 2000.
2
<PAGE> 43
DISTRIBUTION AND PRINCIPAL UNDERWRITING AGREEMENT
Under the terms of the Distribution and Principal Underwriting
Agreement among Separate Account TM, CFBDS and the Company, CFBDS acts as agent
for the distribution of the Contracts and as principal underwriter for the
Contracts. The Company reimburses CFBDS for certain sales and overhead expenses
connected with sales functions.
VALUATION OF ASSETS
FUNDING OPTIONS: The value of the assets of each Funding Option is determined at
4:00 p.m. eastern time on each business day, unless we need to close earlier due
to an emergency. A business day is any day the New York Stock Exchange is open.
Each security traded on a national securities exchange is valued at the last
reported sale price on the business day. If there has been no sale on that day,
then the value of the security is taken to be the mean between the reported bid
and asked prices on the business day or on the basis of quotations received from
a reputable broker or any other recognized source.
Any security not traded on a securities exchange but traded in the
over-the-counter-market and for which market quotations are readily available is
valued at the mean between the quoted bid and asked prices on the business day
or on the basis of quotations received from a reputable broker or any other
recognized source.
Securities traded on the over-the-counter-market and listed
securities with no reported sales are valued at the mean between the last
reported bid and asked prices or on the basis of quotations received from a
reputable broker or other recognized source.
Short-term investments for which a quoted market price is available
are valued at market. Short-term investments maturing in more than sixty days
for which there is no reliable quoted market price are valued by "marking to
market" (computing a market value based upon quotations from dealers or issuers
for securities of a similar type, quality and maturity.) "Marking to market"
takes into account unrealized appreciation or depreciation due to changes in
interest rates or other factors which would influence the current fair values of
such securities. Short-term investments maturing in sixty days or less for which
there is no reliable quoted market price are valued at amortized cost which
approximates market.
THE CONTRACT VALUE: The value of an Accumulation Unit on any business day is
determined by multiplying the value on the preceding business day by the net
investment factor for the valuation period just ended. The net investment factor
is used to measure the investment performance of a Funding Option from one
valuation period to the next. The net investment factor for a Funding Option for
any valuation period is equal to the sum of 1.000000 plus the net investment
rate (the gross investment rate less any applicable Funding Option deductions
during the valuation period relating to the mortality and expense risk charge
and the administrative expense charge). The gross investment rate of a Funding
Option is equal to (a) minus (b), divided by (c) where:
(a) = investment income plus capital gains and losses (whether realized or
unrealized);
(b) = any deduction for applicable taxes (presently zero); and
(c) = the value of the assets of the funding option at the beginning of the
valuation period.
3
<PAGE> 44
The gross investment rate may be either positive or negative. A
Funding Option's investment income includes any distribution whose ex-dividend
date occurs during the valuation period.
ACCUMULATION UNIT VALUE. The value of the accumulation unit for each Funding
Option was initially established at $1.00. The value of an accumulation unit on
any business day is determined by multiplying the value on the preceding
business day by the net investment factor for the valuation period just ended.
The net investment factor is calculated for each Funding Option and takes into
account the investment performance, expenses and the deduction of certain
expenses.
ANNUITY UNIT VALUE. The initial Annuity Unit Value applicable to each Funding
Option was established at $1.00. An Annuity Unit Value as of any business day is
equal to (a) the value of the Annuity Unit on the preceding business day,
multiplied by (b) the corresponding net investment factor for the business day
just ended, divided by (c) the assumed net investment factor for the valuation
period. (For example, the assumed net investment factor based on an annual
assumed net investment rate of 3.0% for a valuation period of one day is
1.000081 and, for a period of two days, is 1.000081 x 1.000081.)
PERFORMANCE INFORMATION
From time to time, the Company may advertise several types of
historical performance for the Funding Options of Separate Account TM. The
Company may advertise the "standardized average annual total returns" of the
Funding Options available through the Separate Account, calculated in a manner
prescribed by the Securities and Exchange Commission, as well as the
"nonstandardized total returns," as described below:
STANDARDIZED METHOD. Quotations of average annual total returns are
computed according to a formula in which a hypothetical initial investment of
$1,000 is allocated to the Funding Option, and then related to ending redeemable
values over one-, five- and ten-year periods, or for a period covering the time
during which the Funding Option has been in existence, if less. If a Funding
Option has been in existence for less than one year, the "since inception" total
return performance quotations are year-to-date and are not average annual total
returns. These quotations reflect the deduction of all recurring charges during
each period (on a pro rata basis in the case of fractional periods). The
deduction for the annual contract administrative charge is converted to a
percentage of assets based on the actual fee collected, divided by the average
net assets per contract sold under the Prospectus to which this SAI relates.
NONSTANDARDIZED METHOD. Nonstandardized "total returns" will be
calculated in a similar manner based on the performance of the Funding Options
over a period of time, usually for the calendar year-to-date, and for the past
one-, three-, five- and ten-year periods. Additionally, cumulative and
year-to-date returns may also be shown. Nonstandardized total returns will not
reflect the deduction of the annual contract administrative charge, which, if
reflected, would decrease the level of performance shown.
For Funding Options that were in existence prior to the date they
became available under Separate Account TM, the nonstandardized average annual
total return quotations will reflect the
4
<PAGE> 45
investment performance that such Funding Options would have achieved (reduced by
the applicable charges) had they been held available under the Contract for the
period quoted. The total return quotations are based upon historical earnings
and are not necessarily representative of future performance.
GENERAL. Within the guidelines prescribed by the SEC and the National
Association of Securities Dealers, Inc. ("NASD"), performance information may be
quoted numerically or may be presented in a table, graph or other illustration.
Advertisements may include data comparing performance to well-known indices of
market performance (including, but not limited to, the Dow Jones Industrial
Average, the Standard & Poor's (S&P) 500 Index and the S&P 400 Index, the Lehman
Brothers Long T-Bond Index, the Russell 1000, 2000 and 3000 Indices, the Value
Line Index, and the Morgan Stanley Capital International's EAFE Index).
Advertisements may also include published editorial comments and performance
rankings compiled by independent organizations (including, but not limited to,
Lipper Analytical Services, Inc. and Morningstar, Inc.) and publications that
monitor the performance of Separate Account TM and the Funding Options.
Average annual total returns for each of the Funding Options
available under Separate Account TM computed according to the standardized and
nonstandardized methods for the periods ending December 31, 1999 are set forth
in the following table.
5
<PAGE> 46
TRAVELERS MARQUIS
STANDARDIZED PERFORMANCE UPDATE AS OF 12/31/99
<TABLE>
<CAPTION>
Standard Death Benefit Enhanced Death Benefit
----------------------------------------------------------------------------
Inception 1 Year 5 Years 10 Years or 1 Year 5 Year 10 Years or
Date # Inception Inception
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
EQUITY PORTFOLIOS:
- -------------------------------------------------------------------------------------------------- ------------------------------
Warburg Pincus Emerging Markets Portfolio 7/28/98 78.35% - 50.26% 78.08% - 49.93%
- -------------------------------------------------------------------------------------------------- ------------------------------
Templeton Developing Markets Fund Class II * 7/31/98 50.68% - 53.42% 50.46% - 53.09%
- -------------------------------------------------------------------------------------------------- ------------------------------
Templeton International Fund Class II * 7/29/98 21.13% - 13.05% 20.95% - 12.81%
- -------------------------------------------------------------------------------------------------- ------------------------------
Lazard International Stock Portfolio 7/28/98 19.64% - 13.52% 19.46% - 13.27%
- -------------------------------------------------------------------------------------------------- ------------------------------
Franklin Small Cap Investments Fund Class II * 7/29/98 71.41% - 83.65% 71.15% - 83.26%
- -------------------------------------------------------------------------------------------------- ------------------------------
Dreyfus Small Cap Portfolio 7/29/98 21.06% - 20.10% 20.88% - 19.85%
- -------------------------------------------------------------------------------------------------- ------------------------------
Travelers Disciplined Small Cap Stock Portfolio 7/28/98 18.36% - 17.68% 18.19% - 17.43%
- -------------------------------------------------------------------------------------------------- ------------------------------
Delaware Small Cap Value Series 7/31/98 -6.48% - -6.01% -6.63% - -6.21%
- -------------------------------------------------------------------------------------------------- ------------------------------
Delaware Investments REIT Series 7/28/98 -4.27% - -8.30% -4.41% - -8.50%
- -------------------------------------------------------------------------------------------------- ------------------------------
AIM Capital Appreciation Portfolio 7/29/98 40.54% - 50.84% 40.33% - 50.51%
- -------------------------------------------------------------------------------------------------- ------------------------------
Montgomery Variable Series: Growth Fund 8/4/98 18.74% - 22.81% 18.56% - 22.55%
- -------------------------------------------------------------------------------------------------- ------------------------------
Travelers Disciplined Mid Cap Stock Portfolio 7/28/98 11.54% - 22.90% 11.37% - 22.63%
- -------------------------------------------------------------------------------------------------- ------------------------------
Strong Schafer Value Fund II 7/28/98 -4.52% - -1.17% -4.67% - -1.38%
- -------------------------------------------------------------------------------------------------- ------------------------------
Dreyfus Capital Appreciation Portfolio 7/31/98 9.56% - 18.25% 9.40% - 18.00%
- -------------------------------------------------------------------------------------------------- ------------------------------
Smith Barney Large Cap Growth Portfolio 7/28/98 28.62% - 49.75% 28.42% - 49.43%
- -------------------------------------------------------------------------------------------------- ------------------------------
Large Cap Portfolio (Fidelity) 7/28/98 27.12% - 42.82% 26.93% - 42.52%
- -------------------------------------------------------------------------------------------------- ------------------------------
OCC Accumulation Trust Equity Portfolio 7/29/98 0.80% - 2.04% 0.64% - 1.82%
- -------------------------------------------------------------------------------------------------- ------------------------------
Salomon Brothers Investors Fund 7/29/98 9.75% - 13.73% 9.59% - 13.49%
- -------------------------------------------------------------------------------------------------- ------------------------------
NWQ Large Cap Portfolio 7/28/98 3.18% - 1.64% 3.03% - 1.42%
- -------------------------------------------------------------------------------------------------- ------------------------------
FIXED INCOME PORTFOLIOS:
- -------------------------------------------------------------------------------------------------- ------------------------------
Smith Barney High Income Portfolio 7/28/98 0.85% - -4.28% 0.70% - -4.48%
- -------------------------------------------------------------------------------------------------- ------------------------------
Travelers U.S. Government Securities Portfolio 7/29/98 -5.78% - -1.47% -5.92% - -1.68%
- -------------------------------------------------------------------------------------------------- ------------------------------
Travelers Managed Income Portfolio 7/28/98 -0.83% - -1.15% -0.98% - -1.36%
- -------------------------------------------------------------------------------------------------- ------------------------------
Smith Barney Money Market Portfolio 7/29/98 2.98% - 4.32% 2.82% - 4.10%
- -------------------------------------------------------------------------------------------------- ------------------------------
NON-STYLE SPECIFIC PORTFOLIOS:
- -------------------------------------------------------------------------------------------------- ------------------------------
Jurika & Voyles Core Equity Portfolio 8/25/98 8.45% - 21.43% 8.28% - 21.19%
- -------------------------------------------------------------------------------------------------- ------------------------------
MFS Research Portfolio 7/28/98 21.58% - 25.98% 21.39% - 25.71%
- -------------------------------------------------------------------------------------------------- ------------------------------
Strategic Stock Portfolio 7/28/98 3.18% - 2.93% 3.03% - 2.71%
- -------------------------------------------------------------------------------------------------- ------------------------------
</TABLE>
* Certain funds offer multiple classes of shares. The performance above may
reflect the fees and performance of another class of the same fund for periods
before the current class existed. If the current class's 12b-1 fee and other
expenses were higher, the performance shown would be lower. # The inception date
used to calculate standardized performance is based on the date that the
investment option became active in the product.
6
<PAGE> 47
TRAVELERS MARQUIS
NON STANDARDIZED PERFORMANCE UPDATE AS OF 12/31/99
<TABLE>
<CAPTION>
Standard Death Benefit
---------------------------------------------------------------------
Inception Since
Date # YTD 1 Year 3 Years 5 Years Inception
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
EQUITY PORTFOLIOS:
- ------------------------------------------------------------------------------------------------------------------------
Warburg Pincus Emerging Markets Portfolio 12/31/97 78.38% 78.38% - - 21.29%
- ------------------------------------------------------------------------------------------------------------------------
Templeton Developing Markets Fund Class II * 2/16/96 50.71% 50.71% -6.71% - -7.02%
- ------------------------------------------------------------------------------------------------------------------------
Templeton International Fund Class II * 5/1/92 21.15% 21.15% 13.23% 15.05% 13.31%
- ------------------------------------------------------------------------------------------------------------------------
Lazard International Stock Portfolio 8/1/96 19.66% 19.66% 12.10% - 12.78%
- ------------------------------------------------------------------------------------------------------------------------
Franklin Small Cap Investments Fund Class II * 5/1/98 71.43% 71.43% - - 30.74%
- ------------------------------------------------------------------------------------------------------------------------
Dreyfus Small Cap Portfolio 8/31/90 21.08% 21.08% 9.68% 13.98% 33.41%
- ------------------------------------------------------------------------------------------------------------------------
Travelers Disciplined Small Cap Stock Portfolio 5/1/98 18.38% 18.38% - - 2.40%
- ------------------------------------------------------------------------------------------------------------------------
Delaware Small Cap Value Series 12/23/93 -6.47% -6.47% 4.58% 10.43% 8.79%
- ------------------------------------------------------------------------------------------------------------------------
Delaware Investments REIT Series 5/6/98 -4.25% -4.25% - - -8.60%
- ------------------------------------------------------------------------------------------------------------------------
AIM Capital Appreciation Portfolio 10/10/95 40.56% 40.56% 21.29% - 16.81%
- ------------------------------------------------------------------------------------------------------------------------
Montgomery Variable Series: Growth Fund 2/9/96 18.76% 18.76% 14.96% - 18.00%
- ------------------------------------------------------------------------------------------------------------------------
Travelers Disciplined Mid Cap Stock Portfolio 4/1/97 11.56% 11.56% - - 21.29%
- ------------------------------------------------------------------------------------------------------------------------
Strong Schafer Value Fund II 10/10/97 -4.50% -4.50% - - -2.55%
- ------------------------------------------------------------------------------------------------------------------------
Dreyfus Capital Appreciation Portfolio 4/5/93 9.58% 9.58% 20.93% 23.44% 18.05%
- ------------------------------------------------------------------------------------------------------------------------
Smith Barney Large Cap Growth Portfolio 5/1/98 28.64% 28.64% - - 31.64%
- ------------------------------------------------------------------------------------------------------------------------
Large Cap Portfolio (Fidelity) 8/30/96 27.15% 27.15% 27.18% - 28.64%
- ------------------------------------------------------------------------------------------------------------------------
OCC Accumulation Trust Equity Portfolio 8/1/88 0.82% 0.82% 11.36% 17.99% 13.90%
- ------------------------------------------------------------------------------------------------------------------------
Salomon Brothers Investors Fund 2/17/98 9.77% 9.77% - - 9.97%
- ------------------------------------------------------------------------------------------------------------------------
NWQ Large Cap Portfolio 7/28/98 3.20% 3.20% - - 1.17%
- ------------------------------------------------------------------------------------------------------------------------
FIXED INCOME PORTFOLIOS: - - - -
- ------------------------------------------------------------------------------------------------------------------------
Smith Barney High Income Portfolio 6/22/94 0.87% 0.87% 3.70% 7.74% 6.68%
- ------------------------------------------------------------------------------------------------------------------------
Travelers U.S. Government Securities Portfolio 1/24/92 -5.76% -5.76% 4.18% 6.65% 4.91%
- ------------------------------------------------------------------------------------------------------------------------
Travelers Managed Income Portfolio 6/28/94 -0.81% -0.81% 3.39% 4.99% 4.40%
- ------------------------------------------------------------------------------------------------------------------------
Smith Barney Money Market Portfolio 6/20/94 3.00% 3.00% 3.20% 3.28% 3.20%
- ------------------------------------------------------------------------------------------------------------------------
NON-STYLE SPECIFIC PORTFOLIOS:
- ------------------------------------------------------------------------------------------------------------------------
Jurika & Voyles Core Equity Portfolio 7/20/98 8.47% 8.47% - - 7.54%
- ------------------------------------------------------------------------------------------------------------------------
MFS Research Portfolio 3/23/98 21.60% 21.60% - - 14.33%
- ------------------------------------------------------------------------------------------------------------------------
Strategic Stock Portfolio 5/1/98 3.20% 3.20% - - -2.35%
- ------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Enhanced Death Benefit
-----------------------------------------------------
Since
YTD 1 Year 3 Years 5 Years Inception
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
EQUITY PORTFOLIOS:
- --------------------------------------------------------------------------------------------------------
Warburg Pincus Emerging Markets Portfolio 78.11% 78.11% - - 21.10%
- --------------------------------------------------------------------------------------------------------
Templeton Developing Markets Fund Class II * 50.48% 50.48% -6.85% - -7.16%
- --------------------------------------------------------------------------------------------------------
Templeton International Fund Class II * 20.97% 20.97% 13.07% 148% 13.14%
- --------------------------------------------------------------------------------------------------------
Lazard International Stock Portfolio 19.48% 19.48% 11.93% - 12.61%
- --------------------------------------------------------------------------------------------------------
Franklin Small Cap Investments Fund Class II * 71.18% 71.18% - - 30.54%
- --------------------------------------------------------------------------------------------------------
Dreyfus Small Cap Portfolio 20.90% 20.90% 9.52% 131% 33.21%
- --------------------------------------------------------------------------------------------------------
Travelers Disciplined Small Cap Stock Portfolio 18.21% 18.21% - - 2.24%
- --------------------------------------------------------------------------------------------------------
Delaware Small Cap Value Series -6.61% -6.61% 4.43% 106% 8.63%
- --------------------------------------------------------------------------------------------------------
Delaware Investments REIT Series -4.40% -4.40% - - -8.74%
- --------------------------------------------------------------------------------------------------------
AIM Capital Appreciation Portfolio 40.35% 40.35% 21.11% - 16.64%
- --------------------------------------------------------------------------------------------------------
Montgomery Variable Series: Growth Fund 18.58% 18.58% 14.79% - 17.82%
- --------------------------------------------------------------------------------------------------------
Travelers Disciplined Mid Cap Stock Portfolio 11.39% 11.39% - - 21.11%
- --------------------------------------------------------------------------------------------------------
Strong Schafer Value Fund II -4.65% -4.65% - - -2.69%
- --------------------------------------------------------------------------------------------------------
Dreyfus Capital Appreciation Portfolio 9.42% 9.42% 20.75% 235% 17.88%
- --------------------------------------------------------------------------------------------------------
Smith Barney Large Cap Growth Portfolio 28.45% 28.45% - - 31.45%
- --------------------------------------------------------------------------------------------------------
Large Cap Portfolio (Fidelity) 26.96% 26.96% 26.99% - 28.45%
- --------------------------------------------------------------------------------------------------------
OCC Accumulation Trust Equity Portfolio 0.66% 0.66% 11.20% 172% 13.73%
- --------------------------------------------------------------------------------------------------------
Salomon Brothers Investors Fund 9.61% 9.61% - - 9.81%
- --------------------------------------------------------------------------------------------------------
NWQ Large Cap Portfolio 3.05% 3.05% - - 1.02%
- --------------------------------------------------------------------------------------------------------
FIXED INCOME PORTFOLIOS:
- --------------------------------------------------------------------------------------------------------
Smith Barney High Income Portfolio 0.72% 0.72% 3.54% 78% 6.52%
- --------------------------------------------------------------------------------------------------------
Travelers U.S. Government Securities Portfolio -5.90% -5.90% 4.02% 60% 4.76%
- --------------------------------------------------------------------------------------------------------
Travelers Managed Income Portfolio -0.96% -0.96% 3.24% 43% 4.25%
- --------------------------------------------------------------------------------------------------------
Smith Barney Money Market Portfolio 2.84% 2.84% 3.04% 33% 3.04%
- --------------------------------------------------------------------------------------------------------
NON-STYLE SPECIFIC PORTFOLIOS:
- --------------------------------------------------------------------------------------------------------
Jurika & Voyles Core Equity Portfolio 8.30% 8.30% - - 7.38%
- --------------------------------------------------------------------------------------------------------
MFS Research Portfolio 21.42% 21.42% - - 14.16%
- --------------------------------------------------------------------------------------------------------
Strategic Stock Portfolio 3.05% 3.05% - - -2.50%
- --------------------------------------------------------------------------------------------------------
</TABLE>
* Certain funds offer multiple classes of shares. The performance above may
reflect the fees and performance of another class of the same fund for periods
before the current class existed. If the current class's 12b-1 fee and other
expenses were higher, the performance shown would be lower. # The inception date
is the date that the underlying fund commenced operations.
7
<PAGE> 48
MIXED AND SHARED FUNDING
Certain variable annuity separate accounts and variable life
insurance separate accounts may invest in the Funding Options simultaneously
(called "mixed" and "shared" funding). It is conceivable that in the future it
may be disadvantageous to do so. Although the Company and the Funding Options do
not currently foresee any such disadvantages either to variable annuity contract
owners or variable life policy owners, each Funding Option's Board of Directors
intends to monitor events in order to identify any material conflicts between
them and to determine what action, if any, should be taken. If a Board of
Directors was to conclude that separate funds should be established for variable
life and variable annuity separate accounts, the variable annuity contract
owners would not bear any of the related expenses, but variable annuity contract
owners and variable life insurance policy owners would no longer have the
economies of scale resulting from a larger combined fund.
FEDERAL TAX CONSIDERATIONS
The following description of the federal income tax consequences
under this Contract is not exhaustive and is not intended to cover all
situations. Because of the complexity of the law and the fact that the tax
results will vary according to the factual status of the individual involved,
tax advice may be needed by a person contemplating purchase of an annuity
contract and by a contract owner or beneficiary who may make elections under a
contract. For further information, please consult a qualified tax adviser.
MANDATORY DISTRIBUTIONS FOR QUALIFIED PLANS
Federal tax law generally requires that minimum annual distributions
begin by April 1st of the calendar year following the calendar year in which a
participant under a qualified plan, a Section 403(b) annuity, or an IRA attains
age 701/2. Distributions must also begin or be continued according to required
patterns following the death of the contract owner or the annuitant.
NONQUALIFIED ANNUITY CONTRACTS
Individuals may purchase tax-deferred annuities without tax law
funding limits. The purchase payments receive no tax benefit, deduction or
deferral, but increases in the value of the contract are generally deferred from
tax until distribution. If a nonqualified annuity is owned by other than an
individual, however, (e.g., by a corporation), the increases in value
attributable to purchase payments made after February 28, 1986 are includable in
income annually. Furthermore, for contracts issued after April 22, 1987, all
deferred increases in value will be includable in the income of a contract owner
when the contract owner transfers the contract without adequate consideration.
If two or more annuity contracts are purchased from the same insurer
within the same calendar year, distributions from any of them will be taxed
based upon the amount of income in all of the same calendar year series of
annuities. This will generally have the effect of causing taxes to be paid
sooner on the deferred gain in the contracts.
Those receiving partial distributions made before the maturity date
will generally be taxed on an income-first basis to the extent of income in the
contract. If you are exchanging another annuity contract for this annuity,
certain pre-August 14, 1982 deposits into an annuity contract that have been
placed in the contract by means of a tax-deferred exchange under Section 1035 of
the Code may be
8
<PAGE> 49
withdrawn first without income tax liability. This information on deposits must
be provided to the Company by the other insurance company at the time of the
exchange. There is income in the contract generally to the extent the cash value
exceeds the investment in the contract. The investment in the contract is equal
to the amount of premiums paid less any amount received previously which was
excludable from gross income. Any direct or indirect borrowing against the value
of the contract or pledging of the contract as security for a loan will be
treated as a cash distribution under the tax law.
The federal tax law requires that nonqualified annuity contracts meet
minimum mandatory distribution requirements upon the death of the contract
owner, including the first of joint owners. Failure to meet these requirements
will cause the surviving joint owner, or the beneficiary to lose the tax
benefits associated with annuity contracts, i.e., primarily the tax deferral
prior to distribution. The distribution required depends, among other things,
upon whether an annuity option is elected or whether the new contract owner is
the surviving spouse. Contracts will be administered by the Company in
accordance with these rules and the Company will make a notification when
payments should be commenced.
INDIVIDUAL RETIREMENT ANNUITIES
To the extent of earned income for the year and not exceeding $2,000
per individual, an individual may make deductible contributions to an individual
retirement annuity (IRA). There are certain limits on the deductible amount
based on the adjusted gross income of the individual and spouse and based on
their participation in a retirement plan. If an individual is married and the
spouse does not have earned income, the individual may establish IRAs for the
individual and spouse. Purchase payments may then be made annually into IRAs for
both spouses in the maximum amount of 100% of earned income up to a combined
limit of $4,000.
The Code provides for the purchase of a Simplified Employee Pension
(SEP) plan. A SEP is funded through an IRA with an annual employer contribution
limit of 15% of compensation up to $30,000 for each participant.
SIMPLE Plan IRA Form
Effective January 1, 1997, employers may establish a savings
incentive match plan for employees ("SIMPLE plan") under which employees can
make elective salary reduction contributions to an IRA based on a percentage of
compensation of up to $6,000. (Alternatively, the employer can establish a
SIMPLE cash or deferred arrangement under IRS Section 401(k)). Under a SIMPLE
plan IRA, the employer must either make a matching contribution of 100% on the
first 3% or 7% contribution for all eligible employees. Early withdrawals are
subject to the 10% early withdrawal penalty generally applicable to IRAs, except
that an early withdrawal by an employee under a SIMPLE plan IRA, within the
first two years of participation, shall be subject to a 25% early withdrawal
tax.
ROTH IRAS
Effective January 1, 1998, Section 408A of the Code permits certain
individuals to contribute to a Roth IRA. Eligibility to make contributions is
based upon income, and the applicable limits vary based on marital status and/or
whether the contribution is a rollover contribution from another IRA or an
annual contribution. Contributions to a Roth IRA, which are subject to certain
limitations ($2,000 per year for annual contributions), are not deductible and
must be made in cash or as a rollover or transfer from another Roth IRA or other
IRA. A conversion of a "traditional" IRA to a Roth IRA may
9
<PAGE> 50
be subject to tax and other special rules apply. You should consult a tax
adviser before combining any converted amounts with other Roth IRA
contributions, including any other conversion amounts from other tax years.
Qualified distributions from a Roth IRA are tax-free. A qualified
distribution requires that the Roth IRA has been held for at least 5 years, and
the distribution is made after age 59 1/2, on death or disability of the owner,
or for a limited amount ($10,000) for a qualified first time home purchase for
the owner or certain relatives. Income tax and a 10% penalty tax may apply to
distributions made (1) before age 59 1/2 (subject to certain exceptions) or (2)
during five taxable years starting with the year in which the first contribution
is made to the Roth IRA.
QUALIFIED PENSION AND PROFIT-SHARING PLANS
Under a qualified pension or profit-sharing plan, purchase payments
made by an employer are not currently taxable to the participant and increases
in the value of a contract are not subject to taxation until received by a
participant or beneficiary.
Distributions are taxable to the participant or beneficiary as
ordinary income in the year of receipt. Any distribution that is considered the
participant's "investment in the contract" is treated as a return of capital and
is not taxable. Certain lump-sum distributions may be eligible for special
forward averaging tax treatment for certain classes of individuals.
FEDERAL INCOME TAX WITHHOLDING
The portion of a distribution which is taxable income to the
recipient will be subject to federal income tax withholding as follows:
1. ELIGIBLE ROLLOVER DISTRIBUTION FROM SECTION 403(b) PLANS OR ARRANGEMENTS
OR FROM QUALIFIED PENSION AND PROFIT-SHARING PLANS
There is a mandatory 20% tax withholding for plan distributions that are
eligible for rollover to an IRA or to another retirement plan but that are not
directly rolled over. A distribution made directly to a participant or
beneficiary may avoid this result if:
(a) a periodic settlement distribution is elected based upon a life or
life expectancy calculation, or
(b) a term-for-years settlement distribution is elected for a period of
ten years or more, payable at least annually, or
(c) a minimum required distribution as defined under the tax law is taken
after the attainment of the age of 701/2 or as otherwise required by
law.
A distribution including a rollover that is not a direct rollover
will be subject to the 20% withholding, and a 10% additional tax penalty may
apply to any amount not added back in the rollover. The 20% withholding may be
recovered when the participant or beneficiary files a personal income tax return
for the year if a rollover was completed within 60 days of receipt of the funds,
except to the extent that the participant or spousal beneficiary is otherwise
underwithheld or short on estimated taxes for that year.
10
<PAGE> 51
2. OTHER NON-PERIODIC DISTRIBUTIONS (FULL OR PARTIAL REDEMPTIONS)
To the extent not described as requiring 20% withholding in 1 above, the
portion of a non-periodic distribution which constitutes taxable income will be
subject to federal income tax withholding, if the aggregate distributions exceed
$200 for the year, unless the recipient elects not to have taxes withheld. If no
such election is made, 10% of the taxable distribution will be withheld as
federal income tax. Election forms will be provided at the time distributions
are requested. This form of withholding applies to all annuity programs.
3. PERIODIC DISTRIBUTIONS (DISTRIBUTIONS PAYABLE OVER A PERIOD GREATER THAN
ONE YEAR)
The portion of a periodic distribution which constitutes taxable income
will be subject to federal income tax withholding under the wage withholding
tables as if the recipient were married claiming three exemptions. A recipient
may elect not to have income taxes withheld or have income taxes withheld at a
different rate by providing a completed election form. Election forms will be
provided at the time distributions are requested. This form of withholding
applies to all annuity programs. As of January 1, 1999, a recipient receiving
periodic payments (e.g., monthly or annual payments under an annuity option)
which total $14,850 or less per year, will generally be exempt from periodic
withholding.
Recipients who elect not to have withholding made are liable for
payment of federal income tax on the taxable portion of the distribution. All
recipients may also be subject to penalties under the estimated tax payment
rules if withholding and estimated tax payments are not sufficient to cover tax
liabilities.
Recipients who do not provide a social security number or other
taxpayer identification number will not be permitted to elect out of
withholding. Additionally, U.S citizens residing outside of the country, or U.S.
legal residents temporarily residing outside the country, are not permitted to
elect out of withholding.
INDEPENDENT ACCOUNTANTS
The consolidated financial statements of The Travelers Insurance
Company and subsidiaries as of December 31, 1999 and 1998, and for each of the
years in the three-year period ended December 31, 1999, included herein, and
the financial statements of Separate Account TM as of and for the year ended
December 31, 1999, also included herein, have been included in reliance upon
the reports of KPMG LLP, independent certified public accountants, appearing
elsewhere herein, and upon the authority of said firm as experts in accounting
and auditing.
11
<PAGE> 52
ANNUAL REPORT
DECEMBER 31, 1999
THE TRAVELERS SEPARATE ACCOUNT TM
FOR VARIABLE ANNUITIES
[TRAVELERS LIFE & ANNUITY LOGO]
The Travelers Insurance Company
The Travelers Life and Annuity Company
One Tower Square
Hartford, CT 06183
<PAGE> 53
THE TRAVELERS SEPARATE ACCOUNT TM
FOR VARIABLE ANNUITIES
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1999
<TABLE>
<S> <C> <C>
ASSETS:
Investments in eligible funds at market value:
Delaware Group Premium Fund, Inc., 26,697 shares (cost $281,091) ............. $ 273,728
Dreyfus Variable Investment Fund, 30,886 shares (cost $1,327,818) ........... 1,463,634
OCC Accumulation Trust, 9,007 shares (cost $347,093) ........................ 338,318
Salomon Brothers Variable Series Funds Inc., 31,223 shares (cost $364,163) ... 381,859
Strong Variable Insurance Funds, Inc., 9,411 shares (cost $92,282) ........... 85,828
Templeton Variable Products Series Fund, 67,930 shares (cost $735,888) ...... 883,390
Montgomery Funds III, 19,576 shares (cost $328,944) ......................... 360,008
The Travelers Series Trust, 401,179 shares (cost $5,313,271) ................ 5,857,972
Travelers Series Fund Inc., 913,363 shares (cost $6,446,431) ................. 7,058,231
Warburg Pincus Trust, 32,070 shares (cost $355,777) ......................... 454,757
-----------
Total Investments (cost $15,592,758) ...................................... $17,157,725
Receivables:
Dividends ................................................................... 937
-----------
Total Assets .............................................................. 17,158,662
-----------
LIABILITIES:
Payables:
Insurance charges ........................................................... 6,683
Administrative fees ......................................................... 615
-----------
Total Liabilities ......................................................... 7,298
-----------
NET ASSETS: ..................................................................... $17,151,364
===========
</TABLE>
See Notes to Financial Statements
-1-
<PAGE> 54
THE TRAVELERS SEPARATE ACCOUNT TM
FOR VARIABLE ANNUITIES
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Dividends ................................................................. $ 218,333
EXPENSES:
Insurance charges ......................................................... $ 126,512
Administrative fees ....................................................... 11,749
---------
Total expenses .......................................................... 138,261
----------
Net investment income ................................................. 80,072
----------
REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss) from investment transactions:
Proceeds from investments sold .......................................... 868,321
Cost of investments sold ................................................ 843,872
---------
Net realized gain (loss) .............................................. 24,449
Change in unrealized gain (loss) on investments:
Unrealized gain at December 31, 1998 .................................... 71,280
Unrealized gain at December 31, 1999 .................................... 1,564,967
---------
Net change in unrealized gain (loss) for the year ..................... 1,493,687
----------
Net realized gain (loss) and change in unrealized gain (loss) ....... 1,518,136
----------
Net increase in net assets resulting from operations ........................ $1,598,208
==========
</TABLE>
See Notes to Financial Statements
-2-
<PAGE> 55
THE TRAVELERS SEPARATE ACCOUNT TM
FOR VARIABLE ANNUITIES
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1999 AND
THE PERIOD JULY 20, 1998 (DATE OPERATIONS COMMENCED)
TO DECEMBER 31, 1998
<TABLE>
<CAPTION>
1999 1998
------------ ------------
<S> <C> <C>
OPERATIONS:
Net investment income ........................................... $ 80,072 $ 16,918
Net realized gain (loss) from investment transactions ........... 24,449 63
Net change in unrealized gain (loss) on investments ............. 1,493,687 71,280
------------ ------------
Net increase in net assets resulting from operations .......... 1,598,208 88,261
------------ ------------
UNIT TRANSACTIONS:
Participant purchase payments
(applicable to 12,533,751 and 1,855,297 units, respectively) .. 13,940,070 1,815,891
Participant transfers from other Travelers accounts
(applicable to 458,795 and 31,676 units, respectively) ........ 509,526 28,738
Administrative charges
(applicable to 608 and 6 units, respectively) ................. (660) (3)
Contract surrenders
(applicable to 256,685 and 318 units, respectively) ........... (290,074) (300)
Participant transfers to other Travelers accounts
(applicable to 477,047 and 28,609 units, respectively) ........ (509,553) (28,740)
------------ ------------
Net increase in net assets resulting from unit transactions ... 13,649,309 1,815,586
------------ ------------
Net increase in net assets .................................. 15,247,517 1,903,847
NET ASSETS:
Beginning of period ............................................. 1,903,847 -
------------ ------------
End of period ................................................... $ 17,151,364 $ 1,903,847
============ ============
</TABLE>
See Notes to Financial Statements
-3-
<PAGE> 56
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
The Travelers Separate Account TM for Variable Annuities ("Separate Account
TM") is a separate account of The Travelers Insurance Company ("The
Travelers"), an indirect wholly owned subsidiary of Citigroup Inc., and is
available for funding certain variable annuity contracts issued by The
Travelers. Separate Account TM is registered under the Investment Company
Act of 1940, as amended, as a unit investment trust. Separate Account TM is
comprised of the Travelers Marquis Portfolio product.
Participant purchase payments applied to Separate Account TM are invested in
one or more eligible funds in accordance with the selection made by the
contract owner. As of December 31, 1999, the eligible funds available under
Separate Account TM were: U.S. Government Securities Portfolio, Lazard
International Stock Portfolio, Large Cap Portfolio, Disciplined Mid Cap
Stock Portfolio, Disciplined Small Cap Stock Portfolio, MFS Research
Portfolio, Strategic Stock Portfolio, Jurika & Voyles Core Equity Portfolio
and NWQ Large Cap Portfolio of The Travelers Series Trust; Smith Barney High
Income Portfolio, Smith Barney Money Market Portfolio, Smith Barney Large
Capitalization Growth Portfolio, AIM Capital Appreciation Portfolio and
Travelers Managed Income Portfolio (formerly TBC Managed Income Portfolio)
of Travelers Series Fund Inc. and Salomon Brothers Variable Investors Fund
of Salomon Brothers Variable Series Funds Inc. (all of which are managed by
affiliates of The Travelers); Franklin Small Cap Investments Fund Class II,
Templeton Developing Markets Fund Class II and Templeton International Fund
Class II of Templeton Variable Products Series 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
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
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 TM 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 TM 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 TM.
Separate Account TM 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> 57
NOTES TO FINANCIAL STATEMENTS - CONTINUED
2. INVESTMENTS
The aggregate costs of purchases and proceeds from sales of investments were
$14,680,554 and $868,321, respectively, for the year ended December 31,
1999. Realized gains and losses from investment transactions are reported on
an average cost basis. The cost of investments in eligible funds was
$15,592,758 at December 31, 1999. Gross unrealized appreciation for all
investments at December 31, 1999 was $1,629,618. Gross unrealized
depreciation for all investments at December 31, 1999 was $64,651.
3. CONTRACT CHARGES
Insurance charges are paid for the mortality and expense risks assumed by
The Travelers. Each business day, The Travelers deducts a mortality and
expense risk charge which is reflected in the calculation of accumulation
and annuity unit values. This charge equals, on an annual basis, 1.55% and
1.70% of the amounts held in each funding option for the Standard Death
Benefit and the Enhanced Death Benefit, respectively.
Administrative fees are paid for administrative expenses. This fee is also
deducted each business day and reflected in the calculation of accumulation
and annuity unit values. This charge equals, on an annual basis, 0.15% of
the amounts held in each funding option.
For contracts in the accumulation phase with a contract value less than
$50,000, an annual charge of $40 (prorated for partial periods) is deducted
from participant account balances and paid to The Travelers to cover
contract administrative charges.
4. CHANGE IN ACCOUNTING
On January 1, 1999, in conjunction with the implementation of a new system,
Separate Account TM changed its basis of reporting gains and losses for
investment transactions from an identified cost basis to an average cost
basis. The accounting changed had no effect on net assets.
-5-
<PAGE> 58
NOTES TO FINANCIAL STATEMENTS - CONTINUED
5. NET CONTRACT OWNERS' EQUITY
<TABLE>
<CAPTION>
DECEMBER 31, 1999
-----------------------------------------
ACCUMULATION UNIT NET
UNITS VALUE ASSETS
------------ ------ ----------
<S> <C> <C> <C>
Delaware Group Premium Fund, Inc.
REIT Series
Standard Death Benefit ......................... 30,843 $0.917 $ 28,294
Enhanced Death Benefit ......................... 162,017 0.915 148,311
Small Cap Value Series
Standard Death Benefit ......................... 37,900 0.940 35,637
Enhanced Death Benefit ......................... 65,404 0.938 61,367
Dreyfus Variable Investment Fund
Capital Appreciation Portfolio
Standard Death Benefit ......................... 404,436 1.183 478,448
Enhanced Death Benefit ......................... 341,217 1.180 402,796
Small Cap Portfolio
Standard Death Benefit ......................... 175,277 1.202 210,599
Enhanced Death Benefit ......................... 309,595 1.199 371,191
OCC Accumulation Trust
Equity Portfolio
Standard Death Benefit ......................... 117,236 1.021 119,675
Enhanced Death Benefit ......................... 214,502 1.019 218,495
Salomon Brothers Variable Series Funds Inc.
Salomon Brothers Variable Investors Fund
Standard Death Benefit ......................... 310,855 1.138 353,688
Enhanced Death Benefit ......................... 24,672 1.135 28,011
Strong Variable Insurance Funds, Inc.
Strong Schafer Value Fund II
Standard Death Benefit ......................... 40,237 0.989 39,785
Enhanced Death Benefit ......................... 46,628 0.987 46,006
Templeton Variable Products Series Fund
Franklin Small Cap Investments Fund Class II
Standard Death Benefit ......................... 24,048 1.837 44,182
Enhanced Death Benefit ......................... 167,293 1.833 306,696
Templeton Developing Markets Fund Class II
Standard Death Benefit ......................... 32,333 1.535 49,624
Enhanced Death Benefit ......................... 135,187 1.532 207,044
Templeton International Fund Class II
Standard Death Benefit ......................... 167,939 1.131 189,942
Enhanced Death Benefit ......................... 75,785 1.129 85,532
</TABLE>
-6-
<PAGE> 59
NOTES TO FINANCIAL STATEMENTS - CONTINUED
5. NET CONTRACT OWNERS' EQUITY (CONTINUED)
<TABLE>
<CAPTION>
DECEMBER 31, 1999
-----------------------------------------
ACCUMULATION UNIT NET
UNITS VALUE ASSETS
------------ ------ ----------
<S> <C> <C> <C>
Montgomery Funds III
Montgomery Variable Series: Growth Fund
Standard Death Benefit ......................... 43,585 $1.229 $ 53,548
Enhanced Death Benefit ......................... 249,841 1.226 306,303
The Travelers Series Trust
Jurika & Voyles Core Equity Portfolio
Standard Death Benefit ......................... - 1.215 -
Enhanced Death Benefit ......................... 109,351 1.212 132,573
Large Cap Portfolio
Standard Death Benefit ......................... 609,907 1.429 871,433
Enhanced Death Benefit ......................... 714,812 1.426 1,019,140
Lazard International Stock Portfolio
Standard Death Benefit ......................... 358,549 1.104 395,968
Enhanced Death Benefit ......................... 697,501 1.102 768,607
MFS Research Portfolio
Standard Death Benefit ......................... 356,534 1.260 449,342
Enhanced Death Benefit ......................... 525,554 1.258 660,947
NWQ Large Cap Portfolio
Standard Death Benefit ......................... 129,620 1.017 131,794
Enhanced Death Benefit ......................... 305,754 1.015 310,214
Strategic Stock Portfolio
Standard Death Benefit ......................... 123,046 1.030 126,701
Enhanced Death Benefit ......................... - 1.027 -
Disciplined Mid Cap Stock Portfolio
Standard Death Benefit ......................... 130,522 1.229 160,471
Enhanced Death Benefit ......................... 39,328 1.227 48,249
Disciplined Small Cap Stock Portfolio
Standard Death Benefit ......................... 24,730 1.177 29,113
Enhanced Death Benefit ......................... 82,755 1.175 97,215
US Government Securities Portfolio
Standard Death Benefit ......................... 455,487 0.986 448,969
Enhanced Death Benefit ......................... 208,167 0.984 204,750
</TABLE>
-7-
<PAGE> 60
NOTES TO FINANCIAL STATEMENTS - CONTINUED
5. NET CONTRACT OWNERS' EQUITY (CONTINUED)
<TABLE>
<CAPTION>
DECEMBER 31, 1999
-----------------------------------------
ACCUMULATION UNIT NET
UNITS VALUE ASSETS
------------ ------ ----------
<S> <C> <C> <C>
Travelers Series Fund Inc.
AIM Capital Appreciation Portfolio
Standard Death Benefit ......................... 160,182 $1.509 $ 241,707
Enhanced Death Benefit ......................... 227,578 1.506 342,674
Smith Barney Money Market Portfolio
Standard Death Benefit ......................... 241,033 1.044 251,549
Enhanced Death Benefit ......................... 190,529 1.041 198,418
Smith Barney High Income Portfolio
Standard Death Benefit ......................... 467,863 0.958 448,033
Enhanced Death Benefit ......................... 522,735 0.956 499,506
Smith Barney Large Capitalization Growth Portfolio
Standard Death Benefit ......................... 980,806 1.498 1,469,373
Enhanced Death Benefit ......................... 1,314,065 1.495 1,964,427
Travelers Managed Income Portfolio
Standard Death Benefit ......................... 841,369 0.989 832,335
Enhanced Death Benefit ......................... 818,644 0.987 808,105
Warburg Pincus Trust
Emerging Markets Portfolio
Standard Death Benefit ......................... 30,889 1.503 46,432
Enhanced Death Benefit ......................... 272,106 1.500 408,145
-----------
Net Contract Owners' Equity ....................................................... $17,151,364
===========
</TABLE>
-8-
<PAGE> 61
NOTES TO FINANCIAL STATEMENTS - CONTINUED
6. STATEMENT OF INVESTMENTS
<TABLE>
<CAPTION>
INVESTMENT OPTIONS NO. OF MARKET
SHARES VALUE
----------- -----------
<S> <C> <C>
DELAWARE GROUP PREMIUM FUND, INC. (1.6%)
REIT Series (Cost $183,824) ........................................... 20,379 $ 176,682
Small Cap Value Series (Cost $97,267) ................................. 6,318 97,046
----------- -----------
Total (Cost $281,091) ............................................... 26,697 273,728
----------- -----------
DREYFUS VARIABLE INVESTMENT FUND (8.5%)
Capital Appreciation Portfolio (Cost $838,182) ........................ 22,112 881,594
Small Cap Portfolio (Cost $489,636) ................................... 8,774 582,040
----------- -----------
Total (Cost $1,327,818) ............................................. 30,886 1,463,634
----------- -----------
OCC ACCUMULATION TRUST (2.0%)
Equity Portfolio
Total (Cost $347,093) ............................................... 9,007 338,318
----------- -----------
SALOMON BROTHERS VARIABLE SERIES FUNDS INC. (2.2%)
Salomon Brothers Variable Investors Fund
Total (Cost $364,163) ............................................... 31,223 381,859
----------- -----------
STRONG VARIABLE INSURANCE FUNDS, INC. (0.5%)
Strong Schafer Value Fund II
Total (Cost $92,282) ................................................ 9,411 85,828
----------- -----------
TEMPLETON VARIABLE PRODUCTS SERIES FUND (5.2%)
Franklin Small Cap Investments Fund Class II (Cost $268,075) .......... 22,301 351,020
Templeton Developing Markets Fund Class II (Cost $219,150) ............ 33,176 256,780
Templeton International Fund Class II (Cost $248,663) ................. 12,453 275,590
----------- -----------
Total (Cost $735,888) ............................................... 67,930 883,390
----------- -----------
MONTGOMERY FUNDS III (2.1%)
Montgomery Variable Series: Growth Fund
Total (Cost $328,944) ............................................... 19,576 360,008
----------- -----------
THE TRAVELERS SERIES TRUST (34.1%)
Jurika & Voyles Core Equity Portfolio (Cost $123,959) ................. 11,706 132,633
Large Cap Portfolio (Cost $1,704,337) ................................. 89,596 1,891,361
Lazard International Stock Portfolio (Cost $1,005,166) ................ 74,494 1,165,079
MFS Research Portfolio (Cost $950,226) ................................ 85,051 1,110,762
NWQ Large Cap Portfolio (Cost $438,484) ............................... 44,532 442,199
Strategic Stock Portfolio (Cost $128,353) ............................. 12,765 126,754
Disciplined Mid Cap Stock Portfolio (Cost $181,496) ................... 13,377 208,808
Disciplined Small Cap Stock Portfolio (Cost $106,911) ................. 11,834 126,383
U.S. Government Securities Portfolio (Cost $674,339) .................. 57,824 653,993
----------- -----------
Total (Cost $5,313,271) ............................................. 401,179 5,857,972
----------- -----------
</TABLE>
-9-
<PAGE> 62
NOTES TO FINANCIAL STATEMENTS - CONTINUED
6. STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
NO. OF MARKET
SHARES VALUE
----------- -----------
<S> <C> <C>
TRAVELERS SERIES FUND INC. (41.1%)
AIM Capital Appreciation Portfolio (Cost $449,364) .................... 28,243 $ 584,630
Smith Barney Money Market Portfolio (Cost $449,223) ................... 449,223 449,223
Smith Barney High Income Portfolio (Cost $956,631) .................... 78,473 947,953
Smith Barney Large Capitalization Growth Portfolio (Cost $2,938,622) .. 214,839 3,435,270
Travelers Managed Income Portfolio (Cost $1,652,591) .................. 142,585 1,641,155
----------- -----------
Total (Cost $6,446,431) ............................................. 913,363 7,058,231
----------- -----------
WARBURG PINCUS TRUST (2.7%)
Emerging Markets Portfolio
Total (Cost $355,777) ............................................... 32,070 454,757
----------- -----------
TOTAL INVESTMENT OPTIONS (100%)
(COST $15,592,758) .......................................................................... $17,157,725
===========
</TABLE>
-10-
<PAGE> 63
This page intentionally left blank
-11-
<PAGE> 64
NOTES TO FINANCIAL STATEMENTS - CONTINUED
7. SCHEDULE OF SEPARATE ACCOUNT TM OPERATIONS AND CHANGES IN NET ASSETS FOR THE
YEAR ENDED DECEMBER 31, 1999 AND THE PERIOD JULY 20, 1998 (DATE OPERATIONS
COMMENCED) TO DECEMBER 31, 1998
<TABLE>
<CAPTION>
REIT SERIES SMALL CAP VALUE SERIES
----------------------- -----------------------
1999 1998 1999 1998
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends ................................................ $ 926 $ - $ 314 $ -
--------- --------- --------- ---------
EXPENSES:
Insurance charges ........................................ 1,628 50 542 8
Administrative fees ...................................... 146 5 51 1
--------- --------- --------- ---------
Net investment income (loss) ......................... (848) (55) (279) (9)
--------- --------- --------- ---------
REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss) from investment transactions:
Proceeds from investments sold ......................... 8,406 33 2,785 7
Cost of investments sold ............................... 8,459 33 2,898 7
--------- --------- --------- ---------
Net realized gain (loss) ............................. (53) - (113) -
--------- --------- --------- ---------
Change in unrealized gain (loss) on investments:
Unrealized gain (loss) beginning of period ............. 488 - 253 -
Unrealized gain (loss) end of period ................... (7,142) 488 (221) 253
--------- --------- --------- ---------
Net change in unrealized gain (loss) for the period .. (7,630) 488 (474) 253
--------- --------- --------- ---------
Net increase (decrease) in net assets
resulting from operations ............................ (8,531) 433 (866) 244
--------- --------- --------- ---------
UNIT TRANSACTIONS:
Participant purchase payments ............................ 164,816 17,682 92,494 5,028
Participant transfers from other Travelers accounts ...... 8,042 - 2,385 -
Administrative charges ................................... (9) - (4) -
Contract surrenders ...................................... (4,675) (11) (237) -
Participant transfers to other Travelers accounts ........ (1,095) (47) (2,040) -
--------- --------- --------- ---------
Net increase (decrease) in net assets
resulting from unit transactions ..................... 167,079 17,624 92,598 5,028
--------- --------- --------- ---------
Net increase (decrease) in net assets ................ 158,548 18,057 91,732 5,272
NET ASSETS:
Beginning of period .................................... 18,057 - 5,272 -
--------- --------- --------- ---------
End of period .......................................... $ 176,605 $ 18,057 $ 97,004 $ 5,272
========= ========= ========= =========
<CAPTION>
CAPITAL APPRECIATION
PORTFOLIO
-----------------------
1999 1998
--------- ---------
<S> <C> <C>
INVESTMENT INCOME:
Dividends ................................................ $ 6,960 $ 488
--------- ---------
EXPENSES:
Insurance charges ........................................ 5,404 161
Administrative fees ...................................... 511 16
--------- ---------
Net investment income (loss) ......................... 1,045 311
--------- ---------
REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss) from investment transactions:
Proceeds from investments sold ......................... 36,296 97
Cost of investments sold ............................... 34,448 94
--------- ---------
Net realized gain (loss) ............................. 1,848 3
--------- ---------
Change in unrealized gain (loss) on investments:
Unrealized gain (loss) beginning of period ............. 6,453 -
Unrealized gain (loss) end of period ................... 43,412 6,453
--------- ---------
Net change in unrealized gain (loss) for the period .. 36,959 6,453
--------- ---------
Net increase (decrease) in net assets
resulting from operations ............................ 39,852 6,767
--------- ---------
UNIT TRANSACTIONS:
Participant purchase payments ............................ 700,904 77,471
Participant transfers from other Travelers accounts ...... 76,399 9,416
Administrative charges ................................... (34) -
Contract surrenders ...................................... (26,894) -
Participant transfers to other Travelers accounts ........ (2,637) -
--------- ---------
Net increase (decrease) in net assets
resulting from unit transactions ..................... 747,738 86,887
--------- ---------
Net increase (decrease) in net assets ................ 787,590 93,654
NET ASSETS:
Beginning of period .................................... 93,654 -
--------- ---------
End of period .......................................... $ 881,244 $ 93,654
========= =========
</TABLE>
-12-
<PAGE> 65
NOTES TO FINANCIAL STATEMENTS - CONTINUED
<TABLE>
<CAPTION>
SALOMON BROTHERS
VARIABLE STRONG SCHAFER
SMALL CAP PORTFOLIO EQUITY PORTFOLIO INVESTORS FUND VALUE FUND II
- ----------------------- ----------------------- ----------------------- -----------------------
1999 1998 1999 1998 1999 1998 1999 1998
- --------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 136 $ 61 $ 10,214 $ - $ 1,938 $ 105 $ 5,125 $ 53
- --------- --------- --------- --------- --------- --------- --------- ---------
4,930 155 4,742 211 2,722 61 1,125 22
453 15 437 20 262 6 104 2
- --------- --------- --------- --------- --------- --------- --------- ---------
(5,247) (109) 5,035 (231) (1,046) 38 3,896 29
- --------- --------- --------- --------- --------- --------- --------- ---------
22,621 139 123,958 244 20,748 45 3,783 11
20,614 127 132,457 219 19,635 38 3,899 10
- --------- --------- --------- --------- --------- --------- --------- ---------
2,007 12 (8,499) 25 1,113 7 (116) 1
- --------- --------- --------- --------- --------- --------- --------- ---------
9,028 - 3,132 - 2,854 - 1,734 -
92,404 9,028 (8,775) 3,132 17,696 2,854 (6,454) 1,734
- --------- --------- --------- --------- --------- --------- --------- ---------
83,376 9,028 (11,907) 3,132 14,842 2,854 (8,188) 1,734
- --------- --------- --------- --------- --------- --------- --------- ---------
80,136 8,931 (15,371) 2,926 14,909 2,899 (4,408) 1,764
- --------- --------- --------- --------- --------- --------- --------- ---------
412,695 90,096 324,018 121,078 311,555 13,449 59,673 26,158
9,899 196 20,947 - 47,795 9,415 5,296 -
(30) - (37) - (23) - (9) -
(3,396) (36) (890) (76) (14,856) - (1,965) -
(16,701) - (114,287) (138) (3,444) - (718) -
- --------- --------- --------- --------- --------- --------- --------- ---------
402,467 90,256 229,751 120,864 341,027 22,864 62,277 26,158
- --------- --------- --------- --------- --------- --------- --------- ---------
482,603 99,187 214,380 123,790 355,936 25,763 57,869 27,922
99,187 - 123,790 - 25,763 - 27,922 -
- --------- --------- --------- --------- --------- --------- --------- ---------
$ 581,790 $ 99,187 $ 338,170 $ 123,790 $ 381,699 $ 25,763 $ 85,791 $ 27,922
========= ========= ========= ========= ========= ========= ========= =========
</TABLE>
-13-
<PAGE> 66
NOTES TO FINANCIAL STATEMENTS - CONTINUED
7. SCHEDULE OF SEPARATE ACCOUNT TM OPERATIONS AND CHANGES IN NET ASSETS FOR THE
YEAR ENDED DECEMBER 31, 1999 AND THE PERIOD JULY 20, 1998 (DATE OPERATIONS
COMMENCED) TO DECEMBER 31, 1998 (CONTINUED)
<TABLE>
<CAPTION>
FRANKLIN SMALL CAP INVESTMENTS TEMPLETON DEVELOPING MARKETS
FUND CLASS II FUND CLASS II
------------------------------- ---------------------------
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends ................................................... $ 539 $ - $ 366 $ -
------------- -------------- -------------- ------------
EXPENSES:
Insurance charges ........................................... 1,443 10 1,731 24
Administrative fees ......................................... 131 1 157 2
------------- -------------- -------------- ------------
Net investment income (loss) ............................ (1,035) (11) (1,522) (26)
------------- -------------- -------------- ------------
REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss) from investment transactions:
Proceeds from investments sold ............................ 17,036 5 7,282 8
Cost of investments sold .................................. 14,736 5 6,896 7
------------- -------------- -------------- ------------
Net realized gain (loss) ................................ 2,300 - 386 1
------------- -------------- -------------- ------------
Change in unrealized gain (loss) on investments:
Unrealized gain (loss) beginning of period ................ 1,002 - 478 -
Unrealized gain (loss) end of period ...................... 82,945 1,002 37,630 478
------------- -------------- -------------- ------------
Net change in unrealized gain (loss) for the period ..... 81,943 1,002 37,152 478
------------- -------------- -------------- ------------
Net increase (decrease) in net assets
resulting from operations ............................... 83,208 991 36,016 453
------------- -------------- -------------- ------------
UNIT TRANSACTIONS:
Participant purchase payments ............................... 244,965 21,617 198,717 15,585
Participant transfers from other Travelers accounts ......... 10,335 - 9,949 -
Administrative charges ...................................... (6) - (4) -
Contract surrenders ......................................... (415) - (333) -
Participant transfers to other Travelers accounts ........... (9,817) - (3,715) -
------------- -------------- -------------- ------------
Net increase (decrease) in net assets
resulting from unit transactions ....................... 245,062 21,617 204,614 15,585
------------- -------------- -------------- ------------
Net increase (decrease) in net assets .................. 328,270 22,608 240,630 16,038
NET ASSETS:
Beginning of period ....................................... 22,608 - 16,038 -
------------- -------------- -------------- ------------
End of period ........................................... $ 350,878 $ 22,608 $ 256,6688 $ 16,038
============= ============== ============== ============
<CAPTION>
TEMPLETON INTERNATIONAL FUND
CLASS II
-----------------------------
1999 1998
<S> <C> <C>
INVESTMENT INCOME:
Dividends ................................................... $ 13,031 $ -
-------------- --------------
EXPENSES:
Insurance charges ........................................... 2,323 160
Administrative fees ......................................... 220 15
-------------- --------------
Net investment income (loss) ............................ 10,488 (175)
-------------- --------------
REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss) from investment transactions:
Proceeds from investments sold ............................ 29,056 135
Cost of investments sold .................................. 28,976 146
-------------- --------------
Net realized gain (loss) ................................ 80 (11)
-------------- --------------
Change in unrealized gain (loss) on investments:
Unrealized gain (loss) beginning of period ................ 2,235 -
Unrealized gain (loss) end of period ...................... 26,927 2,235
-------------- --------------
Net change in unrealized gain (loss) for the period ..... 24,692 2,235
-------------- --------------
Net increase (decrease) in net assets
resulting from operations ............................... 35,260 2,049
-------------- --------------
UNIT TRANSACTIONS:
Participant purchase payments ............................... 164,580 83,754
Participant transfers from other Travelers accounts ......... 7,867 -
Administrative charges ...................................... (13) -
Contract surrenders ......................................... (14,141) -
Participant transfers to other Travelers accounts ........... (3,882) -
-------------- --------------
Net increase (decrease) in net assets
resulting from unit transactions ....................... 154,411 83,754
-------------- --------------
Net increase (decrease) in net assets .................. 189,671 85,803
NET ASSETS:
Beginning of period ....................................... 85,803 -
-------------- --------------
End of period ............................................. $ 275,474 $ 85,803
============== ==============
</TABLE>
-14-
<PAGE> 67
NOTES TO FINANCIAL STATEMENTS - CONTINUED
<TABLE>
<CAPTION>
MONTGOMERY VARIABLE SERIES: JURIKA & VOYLES CORE EQUITY LAZARD INTERNATIONAL STOCK
GROWTH FUND PORTFOLIO LARGE CAP PORTFOLIO PORTFOLIO
--------------------------- ---------------------------- ------------------------ ----------------------------
1999 1998 1999 1998 1999 1998 1999 1998
---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
$ 3,665 $ 133 $ - $ 20 $ 83,178 $ 2,446 $ 1,143 $ 1,676
----------- ----------- ----------- ------------- ----------- --------- ---------------- ------------
3,007 51 537 4 11,857 120 9,866 310
270 5 47 1 1,101 12 906 29
----------- ----------- ----------- ------------- ----------- --------- ---------------- ------------
388 77 (584) 15 70,220 2,314 (9,629) 1,337
----------- ----------- ----------- ------------- ----------- --------- ---------------- ------------
10,775 89 929 2 63,726 119 26,256 288
10,011 80 888 2 59,883 119 24,371 286
----------- ----------- ----------- ------------- ----------- --------- ---------------- ------------
764 9 41 - 3,843 - 1,885 2
----------- ----------- ----------- ------------- ----------- --------- ---------------- ------------
2,638 - 337 - 2,700 - 8,060 -
31,064 2,638 8,674 337 187,024 2,700 159,913 8,060
----------- ----------- ----------- ------------- ----------- --------- ---------------- ------------
28,426 2,638 8,337 337 184,324 2,700 151,853 8,060
----------- ----------- ----------- ------------- ----------- --------- ---------------- ------------
29,578 2,724 7,794 352 258,387 5,014 144,109 9,399
----------- ----------- ----------- ------------- ----------- --------- ---------------- ------------
318,551 12,397 118,926 5,000 1,598,551 49,489 865,258 152,238
4,518 165 947 - 44,408 - 15,638 128
(25) - (1) - (41) - (69) (1)
(2,179) (46) - - (56,394) - (7,168) (69)
(5,832) - (445) - (8,841) - (14,888) -
----------- ----------- ----------- ------------- ----------- --------- ---------------- ------------
315,033 12,516 119,427 5,000 1,577,683 49,489 858,771 152,296
----------- ----------- ----------- ------------- ----------- --------- ---------------- ------------
344,611 15,240 127,221 5,352 1,836,070 54,503 1,002,880 161,695
15,240 - 5,352 - 54,503 - 161,695 -
----------- ----------- ----------- ------------- ----------- --------- ---------------- ------------
$359,851 $15,240 $132,573 $5,352 $1,890,573 $54,503 $1,164,575 $161,695
=========== =========== =========== ============= =========== ========= ================ ============
</TABLE>
-15-
<PAGE> 68
NOTES TO FINANCIAL STATEMENTS - CONTINUED
7. SCHEDULE OF SEPARATE ACCOUNT TM OPERATIONS AND CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1999 AND THE PERIOD JULY 20, 1998
(DATE OPERATIONS COMMENCED) TO DECEMBER 31, 1998 (CONTINUED)
<TABLE>
<CAPTION>
MFS RESEARCH PORTFOLIO
----------------------------------------
1999 1998
---- ----
<S> <C> <C>
INVESTMENT INCOME:
Dividends .................................................. $ - $ 162
---------------- ---------------
EXPENSES:
Insurance charges .......................................... 6,677 132
Administrative fees ........................................ 621 13
---------------- ---------------
Net investment income (loss) ............................ (7,298) 17
---------------- ---------------
REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss) from investment transactions:
Proceeds from investments sold .......................... 14,334 107
Cost of investments sold ................................ 13,682 106
---------------- ---------------
Net realized gain (loss) ................................ 652 1
---------------- ---------------
Change in unrealized gain (loss) on investments:
Unrealized gain (loss) beginning of period .............. 5,770 -
Unrealized gain (loss) end of period .................... 160,536 5,770
---------------- ---------------
Net change in unrealized gain (loss) for the period ..... 154,766 5,770
---------------- ---------------
Net increase (decrease) in net assets
resulting from operations ............................... 148,120 5,788
---------------- ---------------
UNIT TRANSACTIONS:
Participant purchase payments .............................. 855,803 97,752
Participant transfers from other Travelers accounts ........ 13,167 -
Administrative charges ..................................... (21) -
Contract surrenders ........................................ (8,397) -
Participant transfers to other Travelers accounts .......... (1,923) -
---------------- ---------------
Net increase (decrease) in net assets
resulting from unit transactions ........................ 858,629 97,752
---------------- ---------------
Net increase (decrease) in net assets .................. 1,006,749 103,540
NET ASSETS:
Beginning of period ..................................... 103,540 -
---------------- ---------------
End of period ........................................... $ 1,110,289 $ 103,540
================ ===============
<CAPTION>
NWQ LARGE CAP PORTFOLIO
---------------------------------------
1999 1998
---- ----
<S> <C> <C>
INVESTMENT INCOME:
Dividends .................................................. $ - $ 133
-------------- -------------
EXPENSES:
Insurance charges .......................................... 2,828 45
Administrative fees ........................................ 257 5
-------------- -------------
Net investment income (loss) ............................ (3,085) 83
-------------- -------------
REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss) from investment transactions:
Proceeds from investments sold .......................... 5,436 40
Cost of investments sold ................................ 5,413 40
-------------- -------------
Net realized gain (loss) .............................. 23 -
-------------- -------------
Change in unrealized gain (loss) on investments:
Unrealized gain (loss) beginning of period .............. (62) -
Unrealized gain (loss) end of period .................... 3,715 (62)
-------------- -------------
Net change in unrealized gain (loss) for the period ... 3,777 (62)
-------------- -------------
Net increase (decrease) in net assets
resulting from operations ............................. 715 21
-------------- -------------
UNIT TRANSACTIONS:
Participant purchase payments .............................. 347,110 27,310
Participant transfers from other Travelers accounts ........ 71,242 -
Administrative charges ..................................... (9) -
Contract surrenders ........................................ (3,257) -
Participant transfers to other Travelers accounts .......... (1,124) -
-------------- -------------
Net increase (decrease) in net assets
resulting from unit transactions ..................... 413,962 27,310
-------------- -------------
Net increase (decrease) in net assets .................. 414,677 27,331
NET ASSETS:
Beginning of period ...................................... 27,331 -
-------------- -------------
End of period ............................................ $ 442,008 $ 27,331
============== =============
<CAPTION>
STRATEGIC STOCK PORTFOLIO
--------------------------------------
1999 1998
---- ----
<S> <C> <C>
INVESTMENT INCOME:
Dividends .................................................. $ - $ -
------------ ------------
EXPENSES:
Insurance charges .......................................... 925 -
Administrative fees ........................................ 90 -
------------ ------------
Net investment income (loss) ............................ (1,015) -
------------ ------------
REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss) from investment transactions:
Proceeds from investments sold ........................... 975 -
Cost of investments sold ................................. 943 -
------------ ------------
Net realized gain (loss) ............................... 32 -
------------ ------------
Change in unrealized gain (loss) on investments:
Unrealized gain (loss) beginning of period .............. - -
Unrealized gain (loss) end of period .................... (1,599) -
------------ ------------
Net change in unrealized gain (loss) for the period .. (1,599) -
------------ ------------
Net increase (decrease) in net assets
resulting from operations ............................... (2,582) -
------------ ------------
UNIT TRANSACTIONS:
Participant purchase payments .............................. 126,396 -
Participant transfers from other Travelers accounts ........ 2,940 -
Administrative charges ..................................... (53) -
Contract surrenders ........................................ - -
Participant transfers to other Travelers accounts .......... - -
------------ ------------
Net increase (decrease) in net assets
resulting from unit transactions ....................... 129,283 -
------------ ------------
Net increase (decrease) in net assets ................ 126,701 -
NET ASSETS:
Beginning of period ...................................... - -
------------ ------------
End of period ............................................ $ 126,701 $ -
============ ============
</TABLE>
-16-
<PAGE> 69
NOTES TO FINANCIAL STATEMENTS - CONTINUED
<TABLE>
<CAPTION>
DISCIPLINED MID CAP STOCK PORTFOLIO DISCIPLINED SMALL CAP STOCK PORTFOLIO
--------------------------------------- ----------------------------------------
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C>
$ 3,288 $ - $ - $ 73
--------------- ------------- ------------- --------------
1,978 82 869 62
185 8 80 7
--------------- ------------- ------------- --------------
1,125 (90) (949) 4
--------------- ------------- ------------- --------------
91,713 78 1,558 49
82,704 78 1,454 53
--------------- ------------- ------------- --------------
9,009 - 104 (4)
--------------- ------------- ------------- --------------
4,119 - 2,045 -
27,312 4,119 19,472 2,045
--------------- ------------- ------------- --------------
23,193 4,119 17,427 2,045
--------------- ------------- ------------- --------------
33,327 4,029 16,582 2,045
--------------- ------------- ------------- --------------
227,106 32,028 84,621 22,969
1,938 - 775 -
(8) (1) (1) -
(3,280) - - -
(86,419) - (663) -
--------------- ------------- ------------- --------------
139,337 32,027 84,732 22,969
--------------- ------------- ------------- --------------
172,664 36,056 101,314 25,014
36,056 - 25,014 -
--------------- ------------- ------------- --------------
$ 208,720 $ 36,056 $ 126,328 $ 25,014
=============== ============= ============= ==============
<CAPTION>
U.S. GOVERNMENT SECURITIES PORTFOLIO AIM CAPITAL APPRECIATION PORTFOLIO
----------------------------------------- ----------------------------------------
1999 1998 1999 1998
---- ---- ---- ----
<C> <C> <C> <C>
$ 24 $ 14,070 $ - $ -
------------- ------------- ------------ -----------
5,566 367 3,131 55
527 35 289 5
------------- ------------- ------------ -----------
(6,069) 13,668 (3,420) (60)
------------- ------------- ------------ -----------
38,221 250 24,713 83
40,072 241 22,194 87
------------- ------------- ------------ -----------
(1,851) 9 2,519 (4)
------------- ------------- ------------ -----------
(12,292) - 2,843 -
(20,346) (12,292) 135,266 2,843
------------- ------------- ------------ -----------
(8,054) (12,292) 132,423 2,843
------------- ------------- ------------ -----------
(15,974) 1,385 131,522 2,779
------------- ------------- ------------ -----------
522,132 164,140 423,729 34,217
6,532 9,418 10,566 -
(31) - (27) -
(26,439) - (9,997) -
(7,444) - (8,408) -
------------- ------------- ------------ -----------
494,750 173,558 415,863 34,217
------------- ------------- ------------ -----------
478,776 174,943 547,385 36,996
174,943 - 36,996 -
------------- ------------- ------------ -----------
$ 653,719 $ 174,943 $ 584,381 $ 36,996
============= ============= ============ ===========
</TABLE>
-17-
<PAGE> 70
NOTES TO FINANCIAL STATEMENTS - CONTINUED
7. SCHEDULE OF SEPARATE ACCOUNT TM OPERATIONS AND CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1999 AND THE PERIOD JULY 20, 1998
(DATE OPERATIONS COMMENCED TO DECEMBER 31, 1998 (CONTINUED)
<TABLE>
<CAPTION>
SMITH BARNEY MONEY MARKET PORTFOLIO
----------------------------------------
1999 1998
---- ----
<S> <C> <C>
INVESTMENT INCOME:
Dividends ................................................. $ 10,647 $ 753
-------------- --------------
EXPENSES:
Insurance charges ......................................... 3,539 248
Administrative fees ....................................... 335 24
-------------- --------------
Net investment income (loss) .......................... 6,773 481
-------------- --------------
REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss) from investment transactions:
Proceeds from investments sold ......................... 96,590 79,652
Cost of investments sold ............................... 96,590 79,652
-------------- --------------
Net realized gain (loss) .............................. - -
-------------- --------------
Change in unrealized gain (loss) on investments:
Unrealized gain (loss) beginning of period ................ - -
Unrealized gain (loss) end of period ...................... - -
-------------- --------------
Net change in unrealized gain (loss) for the period ... - -
-------------- --------------
Net increase (decrease) in net assets
resulting from operations ............................. 6,773 481
-------------- --------------
UNIT TRANSACTIONS:
Participant purchase payments ............................. 374,981 187,697
Participant transfers from other Travelers accounts ....... 2,252 -
Administrative charges .................................... (7) -
Contract surrenders ....................................... (2,077) -
Participant transfers to other Travelers accounts ......... (91,883) (28,250)
-------------- --------------
Net increase (decrease) in net assets
resulting from unit transactions ....................... 283,266 159,447
-------------- --------------
Net increase (decrease) in net assets ................... 290,039 159,928
NET ASSETS:
Beginning of period ..................................... 159,928 -
-------------- --------------
End of period ........................................... $ 449,967 $ 159,928
============== ==============
<CAPTION>
SMITH BARNEY HIGH INCOME PORTFOLIO
----------------------------------------
1999 1998
---- ----
<S> <C> <C>
INVESTMENT INCOME:
Dividends ................................................. $ 27,941 $ -
------------- -------------
EXPENSES:
Insurance charges ......................................... 7,635 171
Administrative fees ....................................... 714 17
------------- -------------
Net investment income (loss) .......................... 19,592 (188)
------------- -------------
REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss) from investment transactions:
Proceeds from investments sold ......................... 40,517 144
Cost of investments sold ............................... 41,504 151
------------- -------------
Net realized gain (loss) ............................. (987) (7)
------------- -------------
Change in unrealized gain (loss) on investments:
Unrealized gain (loss) beginning of period ............. (135) -
Unrealized gain (loss) end of period ................... (8,678) (135)
------------- -------------
Net change in unrealized gain (loss) for the period ... (8,543) (135)
------------- -------------
Net increase (decrease) in net assets
resulting from operations ............................. 10,062 (330)
------------- -------------
UNIT TRANSACTIONS:
Participant purchase payments ............................. 862,713 99,302
Participant transfers from other Travelers accounts ....... 16,607 -
Administrative charges .................................... (30) -
Contract surrenders ....................................... (27,372) -
Participant transfers to other Travelers accounts ......... (13,413) -
------------- -------------
Net increase (decrease) in net assets
resulting from unit transactions ....................... 838,505 99,302
------------- -------------
Net increase (decrease) in net assets .................. 848,567 98,972
NET ASSETS:
Beginning of period ..................................... 98,972 -
------------- -------------
End of period ........................................... $ 947,539 $ 98,972
============= =============
<CAPTION>
SMITH BARNEY LARGE CAPITALIZATION GROWTH PORTFOLIO
---------------------------------------------------
1999 1998
---- ----
<S> <C> <C>
INVESTMENT INCOME:
Dividends ................................................. $ 7,330 $ 160
------------- --------------
EXPENSES:
Insurance charges ......................................... 23,415 402
Administrative fees ....................................... 2,178 38
------------- --------------
Net investment income (loss) .......................... (18,263) (280)
------------- --------------
REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss) from investment transactions:
Proceeds from investments sold .......................... 80,207 178
Cost of investments sold ................................ 71,729 160
------------- --------------
Net realized gain (loss) .............................. 8,478 18
------------- --------------
Change in unrealized gain (loss) on investments:
Unrealized gain (loss) beginning of period .............. 26,259 -
Unrealized gain (loss) end of period .................... 496,648 26,259
------------- --------------
Net change in unrealized gain (loss) for the period ... 470,389 26,259
------------- --------------
Net increase (decrease) in net assets
resulting from operations ............................. 460,604 25,997
------------- --------------
UNIT TRANSACTIONS:
Participant purchase payments ............................. 2,686,048 255,824
Participant transfers from other Travelers accounts ....... 86,640 -
Administrative charges .................................... (83) (1)
Contract surrenders ....................................... (50,779) -
Participant transfers to other Travelers accounts ......... (30,450) -
------------- --------------
Net increase (decrease) in net assets
resulting from unit transactions ....................... 2,691,376 255,823
------------- --------------
Net increase (decrease) in net assets ................... 3,151,980 281,820
NET ASSETS:
Beginning of period ..................................... 281,820 -
------------- --------------
End of period ........................................... $ 3,433,800 $ 281,820
============= ==============
</TABLE>
-18-
<PAGE> 71
NOTES TO FINANCIAL STATEMENTS - CONTINUED
<TABLE>
<CAPTION>
TRAVELERS MANAGED INCOME PORTFOLIO EMERGING MARKETS PORTFOLIO COMBINED
---------------------------------- ----------------------------------- -----------------------------------
1999 1998 1999 1998 1999 1998
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
$ 24,751 $ - $ 16,817 $ 161 $ 218,333 $ 20,494
-------------- ------------- ------------- ------------- -------------- --------------
15,591 297 2,501 53 126,512 3,261
1,452 28 225 5 11,749 315
-------------- ------------- ------------- ------------- -------------- --------------
7,708 (325) 14,091 103 80,072 16,918
-------------- ------------- ------------- ------------- -------------- --------------
87,646 233 12,754 48 868,321 82,084
88,346 232 11,070 48 843,872 82,021
-------------- ------------- ------------- ------------- -------------- --------------
(700) 1 1,684 - 24,449 63
-------------- ------------- ------------- ------------- -------------- --------------
226 - 1,115 - 71,280 -
(11,436) 226 98,980 1,115 1,564,967 71,280
-------------- ------------- ------------- ------------- -------------- --------------
(11,662) 226 97,865 1,115 1,493,687 71,280
-------------- ------------- ------------- ------------- -------------- --------------
(4,654) (98) 113,640 1,218 1,598,208 88,261
-------------- ------------- ------------- ------------- -------------- --------------
1,527,411 178,409 326,317 25,201 13,940,070 1,815,891
32,175 - 267 - 509,526 28,738
(77) - (8) - (660) (3)
(23,733) (50) (1,200) (12) (290,074) (300)
(68,681) (262) (10,803) (43) (509,553) (28,740)
-------------- ------------- ------------- ------------- -------------- --------------
1,467,095 178,097 314,573 25,146 13,649,309 1,815,586
-------------- ------------- ------------- ------------- -------------- --------------
1,462,441 177,999 428,213 26,364 15,247,517 1,903,847
177,999 - 26,364 - 1,903,847 -
-------------- ------------- ------------- ------------- -------------- --------------
$ 1,640,440 $ 177,999 $ 454,577 $ 26,364 $ 17,151,364 $ 1,903,847
============== ============= ============= ============= ============== ==============
</TABLE>
-19-
<PAGE> 72
NOTES TO FINANCIAL STATEMENTS - CONTINUED
8. SCHEDULE OF ACCUMULATION UNITS FOR SEPARATE ACCOUNT TM
FOR THE YEAR ENDED DECEMBER 31, 1999 AND THE PERIOD JULY 20, 1998
(DATE OPERATIONS COMMENCED) TO DECEMBER 31, 1998
<TABLE>
<CAPTION>
REIT SERIES
----------------------------------------
1999 1998
---- ----
<S> <C> <C>
Accumulation units beginning of period ....... 18,850 -
Accumulation units purchased and
transferred from other Travelers accounts .. 180,071 18,917
Accumulation units redeemed and
transferred to other Travelers accounts .... (6,061) (67)
------------------- -------------------
Accumulation units end of period ............. 192,860 18,850
=================== ===================
<CAPTION>
SMALL CAP PORTFOLIO
----------------------------------------
1999 1998
---- ----
<S> <C> <C>
Accumulation units beginning of period ....... 99,958 -
Accumulation units purchased and
transferred from other Travelers accounts .. 403,418 99,998
Accumulation units redeemed and
transferred to other Travelers accounts .... (18,504) (40)
------------------- -------------------
Accumulation units end of period ............. 484,872 99,958
=================== ===================
<CAPTION>
STRONG SCHAFER VALUE FUND II
----------------------------------------
1999 1998
---- ----
<S> <C> <C>
Accumulation units beginning of period ....... 26,971 -
Accumulation units purchased and
transferred from other Travelers accounts .. 62,619 26,971
Accumulation units redeemed and
transferred to other Travelers accounts .... (2,725) -
------------------- -------------------
Accumulation units end of period ............. 86,865 26,971
=================== ===================
<CAPTION>
TEMPLETON INTERNATIONAL FUND CLASS II
----------------------------------------
1999 1998
---- ----
<S> <C> <C>
Accumulation units beginning of period ....... 91,928 -
Accumulation units purchased and
transferred from other Travelers accounts .. 169,735 91,929
Accumulation units redeemed and
transferred to other Travelers accounts .... (17,939) (1)
------------------- -------------------
Accumulation units end of period ............. 243,724 91,928
=================== ===================
<CAPTION>
SMALL CAP VALUE SERIES
---------------------------------------
1999 1998
---- ----
<S> <C> <C>
Accumulation units beginning of period ....... 5,244 -
Accumulation units purchased and
transferred from other Travelers accounts .. 100,522 5,244
Accumulation units redeemed and
transferred to other Travelers accounts .... (2,462) -
------------------- -------------------
Accumulation units end of period ............. 103,304 5,244
=================== ===================
<CAPTION>
EQUITY PORTFOLIO
---------------------------------------
1999 1998
---- ----
<S> <C> <C>
Accumulation units beginning of period ....... 122,273 -
Accumulation units purchased and
transferred from other Travelers accounts .. 326,916 122,510
Accumulation units redeemed and
transferred to other Travelers accounts .... (117,451) (237)
------------------- -------------------
Accumulation units end of period ............. 331,738 122,273
=================== ===================
<CAPTION>
FRANKLIN SMALL CAP INVESTMENTS FUND CLASS II
--------------------------------------------
1999 1998
---- ----
<S> <C> <C>
Accumulation units beginning of period ....... 21,103 -
Accumulation units purchased and
transferred from other Travelers accounts .. 177,256 21,103
Accumulation units redeemed and
transferred to other Travelers accounts .... (7,018) -
------------------- -------------------
Accumulation units end of period ............. 191,341 21,103
=================== ===================
<CAPTION>
MONTGOMERY VARIABLE SERIES: GROWTH FUND
---------------------------------------
1999 1998
---- ----
<S> <C> <C>
Accumulation units beginning of period ....... 14,734 -
Accumulation units purchased and
transferred from other Travelers accounts .. 285,702 14,780
Accumulation units redeemed and
transferred to other Travelers accounts .... (7,010) (46)
------------------- -------------------
Accumulation units end of period ............. 293,426 14,734
=================== ===================
<CAPTION>
CAPITAL APPRECIATION PORTFOLIO
-------------------------------------
1999 1998
---- ----
<S> <C> <C>
Accumulation units beginning of period ....... 86,764 -
Accumulation units purchased and
transferred from other Travelers accounts .. 684,688 86,764
Accumulation units redeemed and
transferred to other Travelers accounts .... (25,799) -
-------------------- -------------------
Accumulation units end of period ............. 745,653 86,764
==================== ===================
<CAPTION>
SALOMON BROTHERS VARIABLE INVESTORS FUND
-----------------------------------------
1999 1998
---- ----
<S> <C> <C>
Accumulation units beginning of period ....... 24,856 -
Accumulation units purchased and
transferred from other Travelers accounts .. 326,993 24,856
Accumulation units redeemed and
transferred to other Travelers accounts .... (16,322) -
-------------------- -------------------
Accumulation units end of period ............. 335,527 24,856
==================== ===================
<CAPTION>
TEMPLETON DEVELOPING MARKETS FUND CLASS II
------------------------------------------
1999 1998
---- ----
<S> <C> <C>
Accumulation units beginning of period ....... 15,750 -
Accumulation units purchased and
transferred from other Travelers accounts .. 154,794 15,750
Accumulation units redeemed and
transferred to other Travelers accounts .... (3,024) -
-------------------- -------------------
Accumulation units end of period ............. 167,520 15,750
==================== ===================
<CAPTION>
JURIKA & VOYLES CORE EQUITY PORTFOLIO
----------------------------------------
1999 1998
---- ----
<S> <C> <C>
Accumulation units beginning of period ....... 4,782 -
Accumulation units purchased and
transferred from other Travelers accounts .. 104,944 4,782
Accumulation units redeemed and
transferred to other Travelers accounts .... (375) -
-------------------- -------------------
Accumulation units end of period ............. 109,351 4,782
==================== ===================
</TABLE>
-20-
<PAGE> 73
NOTES TO FINANCIAL STATEMENTS - CONTINUED
8. SCHEDULE OF ACCUMULATION UNITS FOR SEPARATE ACCOUNT TM
FOR THE YEAR ENDED DECEMBER 31, 1999 AND THE PERIOD JULY 20, 1998
(DATE OPERATIONS COMMENCED) TO DECEMBER 31, 1998
<TABLE>
<CAPTION>
LARGE CAP PORTFOLIO
----------------------------------------
1999 1998
---- ----
<S> <C> <C>
Accumulation units beginning of period ....... 48,504 -
Accumulation units purchased and
transferred from other Travelers accounts .. 1,327,278 48,504
Accumulation units redeemed and
transferred to other Travelers accounts .... (51,063) -
------------------- -------------------
Accumulation units end of period 1,324,719 48,504
=================== ===================
<CAPTION>
NWQ LARGE CAP PORTFOLIO
----------------------------------------
1999 1998
---- ----
<S> <C> <C>
Accumulation units beginning of period ....... 27,741 -
Accumulation units purchased and
transferred from other Travelers accounts .. 411,928 27,741
Accumulation units redeemed and
transferred to other Travelers accounts .... (4,295) -
------------------- -------------------
Accumulation units end of period ............. 435,374 27,741
=================== ===================
<CAPTION>
DISCIPLINED SMALL CAP STOCK PORTFOLIO
----------------------------------------
1999 1998
---- ----
<S> <C> <C>
Accumulation units beginning of period ....... 25,159 -
Accumulation units purchased and
transferred from other Travelers accounts .. 82,956 25,160
Accumulation units redeemed and
transferred to other Travelers accounts .... (630) (1)
------------------- -------------------
Accumulation units end of period ............. 107,485 25,159
=================== ===================
<CAPTION>
SMITH BARNEY MONEY MARKET PORTFOLIO
----------------------------------------
1999 1998
---- ----
<S> <C> <C>
Accumulation units beginning of period ....... 157,837 -
Accumulation units purchased and
transferred from other Travelers accounts .. 366,197 185,906
Accumulation units redeemed and
transferred to other Travelers accounts .... (92,472) (28,069)
------------------- -------------------
Accumulation units end of period ............. 431,562 157,837
=================== ===================
<CAPTION>
LAZARD INTERNATIONAL STOCK PORTFOLIO
---------------------------------------
1999 1998
---- ----
<S> <C> <C>
Accumulation units beginning of period ....... 175,217 -
Accumulation units purchased and
transferred from other Travelers accounts .. 902,914 175,297
Accumulation units redeemed and
transferred to other Travelers accounts .... (22,081) (80)
------------------- -------------------
Accumulation units end of period 1,056,050 175,217
=================== ===================
<CAPTION>
STRATEGIC STOCK PORTFOLIO
---------------------------------------
1999 1998
---- ----
<S> <C> <C>
Accumulation units beginning of period ....... - -
Accumulation units purchased and
transferred from other Travelers accounts .. 123,095 -
Accumulation units redeemed and
transferred to other Travelers accounts .... (49) -
------------------- -------------------
Accumulation units end of period ............. 123,046 -
=================== ===================
<CAPTION>
U S GOVERNMENT SECURITIES PORTFOLIO
---------------------------------------
1999 1998
---- ----
<S> <C> <C>
Accumulation units beginning of period ....... 167,258 -
Accumulation units purchased and
transferred from other Travelers accounts .. 529,561 167,258
Accumulation units redeemed and
transferred to other Travelers accounts .... (33,165) -
------------------- -------------------
Accumulation units end of period ............. 663,654 167,258
=================== ===================
<CAPTION>
SMITH BARNEY HIGH INCOME PORTFOLIO
---------------------------------------
1999 1998
---- ----
<S> <C> <C>
Accumulation units beginning of period ....... 104,252 -
Accumulation units purchased and
transferred from other Travelers accounts .. 929,442 104,252
Accumulation units redeemed and
transferred to other Travelers accounts .... (43,096) -
------------------- -------------------
Accumulation units end of period ............. 990,598 104,252
=================== ===================
<CAPTION>
MFS RESEARCH PORTFOLIO
---------------------------------------
1999 1998
---- ----
<S> <C> <C>
Accumulation units beginning of period ....... 99,898 -
Accumulation units purchased and
transferred from other Travelers accounts .. 791,637 99,898
Accumulation units redeemed and
transferred to other Travelers accounts .... (9,447) -
-------------------- -------------------
Accumulation units end of period 882,088 99,898
==================== ===================
<CAPTION>
DISCIPLINED MID CAP STOCK PORTFOLIO
----------------------------------------
1999 1998
---- ----
<S> <C> <C>
Accumulation units beginning of period ....... 32,722 -
Accumulation units purchased and
transferred from other Travelers accounts .. 212,954 32,723
Accumulation units redeemed and
transferred to other Travelers accounts .... (75,826) (1)
-------------------- -------------------
Accumulation units end of period ............. 169,850 32,722
==================== ===================
<CAPTION>
AIM CAPITAL APPRECIATION PORTFOLIO
----------------------------------------
1999 1998
---- ----
<S> <C> <C>
Accumulation units beginning of period ....... 34,476 -
Accumulation units purchased and
transferred from other Travelers accounts .. 368,481 34,476
Accumulation units redeemed and
transferred to other Travelers accounts .... (15,197) -
-------------------- -------------------
Accumulation units end of period ............. 387,760 34,476
==================== ===================
<CAPTION>
SMITH BARNEY LARGE
CAPITALIZATION GROWTH PORTFOLIO
----------------------------------------
1999 1998
---- ----
<S> <C> <C>
Accumulation units beginning of period ....... 242,000 -
Accumulation units purchased and
transferred from other Travelers accounts .. 2,111,174 242,001
Accumulation units redeemed and
transferred to other Travelers accounts .... (58,303) (1)
-------------------- -------------------
Accumulation units end of period ............. 2,294,871 242,000
==================== ===================
</TABLE>
-21-
<PAGE> 74
NOTES TO FINANCIAL STATEMENTS - CONTINUED
8. SCHEDULE OF ACCUMULATION UNITS FOR SEPARATE ACCOUNT TM
FOR THE YEAR ENDED DECEMBER 31, 1999 AND THE PERIOD JULY 20, 1998
(DATE OPERATIONS COMMENCED) TO DECEMBER 31, 1998
<TABLE>
<CAPTION>
TRAVELERS MANAGED INCOME PORTFOLIO
----------------------------------------
1999 1998
---- ----
<S> <C> <C>
Accumulation units beginning of period ....... 178,475 -
Accumulation units purchased and
transferred from other Travelers accounts .. 1,575,127 178,789
Accumulation units redeemed and
transferred to other Travelers accounts .... (93,589) (314)
------------------- -------------------
Accumulation units end of period ............. 1,660,013 178,475
=================== ===================
<CAPTION>
EMERGING MARKETS PORTFOLIO
---------------------------------------
1999 1998
---- ----
<S> <C> <C>
Accumulation units beginning of period ....... 31,288 -
Accumulation units purchased and
transferred from other Travelers accounts .. 282,144 31,364
Accumulation units redeemed and
transferred to other Travelers accounts .... (10,437) (76)
------------------- -------------------
Accumulation units end of period ............. 302,995 31,288
=================== ===================
<CAPTION>
COMBINED
---------------------------------------
1999 1998
---- ----
<S> <C> <C>
Accumulation units beginning of period ....... 1,858,040 -
Accumulation units purchased and
transferred from other Travelers accounts .. 12,992,546 1,886,973
Accumulation units redeemed and
transferred to other Travelers accounts .... (734,340) (28,933)
-------------------- -------------------
Accumulation units end of period ............. 14,116,246 1,858,040
==================== ===================
</TABLE>
-22-
<PAGE> 75
INDEPENDENT AUDITORS' REPORT
To the Owners of Variable Annuity Contracts of
The Travelers Separate Account TM for Variable Annuities:
We have audited the accompanying statement of assets and liabilities of The
Travelers Separate Account TM for Variable Annuities as of December 31, 1999,
and the related statement of operations for the year then ended and the
statement of changes in net assets for the year ended December 31, 1999 and the
period July 20, 1998 (date operations commenced) to December 31, 1998. 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 audit 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, 1999, 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
TM for Variable Annuities as of December 31, 1999, the results of its operations
for the year then ended and the changes in its net assets for the year ended
December 31, 1999 and the period July 20, 1998 (date operations commenced) to
December 31, 1998, in conformity with generally accepted accounting principles.
/s/ KPMG LLP
Hartford, Connecticut
February 18, 2000
-23-
<PAGE> 76
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 TM for Variable
Annuities or Separate Account TM's underlying funds. It should not be used in
connection with any offer except in conjunction with the Prospectus for The
Travelers Separate Account TM 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.
Sep TM (Annual) (12-99) Printed in U.S.A.
<PAGE> 77
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholder
The Travelers Insurance Company and Subsidiaries:
We have audited the accompanying consolidated balance sheets of The Travelers
Insurance Company and Subsidiaries as of December 31, 1999 and 1998, and the
related consolidated statements of income, changes in retained earnings and
accumulated other changes in equity from non-owner sources and cash flows for
each of the years in the three-year period ended December 31, 1999. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
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 audit 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. 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 consolidated financial statements referred to above present
fairly, in all material respects, the financial position of The Travelers
Insurance Company and Subsidiaries as of December 31, 1999 and 1998, and the
results of their operations and their cash flows for each of the years in the
three-year period ended December 31, 1999, in conformity with generally accepted
accounting principles.
/s/ KPMG LLP
Hartford, Connecticut
January 18, 2000
F-1
<PAGE> 78
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
($ in millions)
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
REVENUES
Premiums $1,738 $1,740 $1,583
Net investment income 2,506 2,185 2,037
Realized investment gains 113 149 199
Other revenues 521 440 354
- -------------------------------------------------------------------------------------------------- ------------- -------------
Total Revenues 4,878 4,514 4,173
- -------------------------------------------------------------------------------------------------- ------------- -------------
BENEFITS AND EXPENSES
Current and future insurance benefits 1,515 1,475 1,341
Interest credited to contractholders 937 876 829
Amortization of deferred acquisition costs 315 275 252
General and administrative expenses 519 505 468
- -------------------------------------------------------------------------------------------------- ------------- -------------
Total Benefits and Expenses 3,286 3,131 2,890
- -------------------------------------------------------------------------------------------------- ------------- -------------
Income from continuing operations before federal income taxes 1,592 1,383 1,283
- -------------------------------------------------------------------------------------------------- ------------- -------------
Federal income tax expense
Current 409 442 434
Deferred 136 39 10
- -------------------------------------------------------------------------------------------------- ------------- -------------
Total Federal Income Taxes 545 481 444
- -------------------------------------------------------------------------------------------------- ------------- -------------
Net income $1,047 $902 $839
================================================================================================== ============= =============
</TABLE>
See Notes to Consolidated Financial Statements.
F-2
<PAGE> 79
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
($ in millions)
<TABLE>
<CAPTION>
DECEMBER 31, 1999 1998
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Fixed maturities, available for sale at fair value (cost, $24,500, $22,973) $23,866 $23,893
Equity securities, at fair value (cost, $691, $474) 784 518
Mortgage loans 2,285 2,606
Real estate held for sale 236 143
Policy loans 1,258 1,857
Short-term securities 1,283 1,098
Trading securities, at market value 1,678 1,186
Other invested assets 2,098 2,251
- ----------------------------------------------------------------------------------------------------------------------------
Total Investments 33,488 33,552
- ----------------------------------------------------------------------------------------------------------------------------
Cash 85 65
Investment income accrued 395 393
Premium balances receivable 178 99
Reinsurance recoverables 3,234 3,387
Deferred acquisition costs 2,688 2,317
Separate and variable accounts 22,199 15,313
Other assets 1,264 1,422
- ----------------------------------------------------------------------------------------------------------------------------
Total Assets $63,531 $56,548
- ----------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Contractholder funds $17,567 $16,739
Future policy benefits and claims 12,563 12,326
Separate and variable accounts 22,194 15,305
Deferred federal income taxes 23 422
Trading securities sold not yet purchased, at market value 1,098 873
Other liabilities 2,466 2,783
- ----------------------------------------------------------------------------------------------------------------------------
Total Liabilities 55,911 48,448
- ----------------------------------------------------------------------------------------------------------------------------
SHAREHOLDER'S EQUITY
Common stock, par value $2.50; 40 million shares authorized, issued and outstanding 100 100
Additional paid-in capital 3,819 3,800
Retained earnings 4,099 3,602
Accumulated other changes in equity from non-owner sources (398) 598
- ----------------------------------------------------------------------------------------------------------------------------
Total Shareholder's Equity 7,620 8,100
- ----------------------------------------------------------------------------------------------------------------------------
Total Liabilities and Shareholder's Equity $63,531 $56,548
============================================================================================================================
</TABLE>
See Notes to Consolidated Financial Statements.
F-3
<PAGE> 80
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN RETAINED EARNINGS AND
ACCUMULATED OTHER CHANGES IN EQUITY FROM NON-OWNER SOURCES
($ in millions)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN RETAINED EARNINGS 1999 1998 1997
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Balance, beginning of year $3,602 $2,810 $2,471
Net income 1,047 902 839
Dividends to parent 550 110 500
- -----------------------------------------------------------------------------------------------------------
Balance, end of year $4,099 $3,602 $2,810
===========================================================================================================
- -----------------------------------------------------------------------------------------------------------
STATEMENTS OF ACCUMULATED OTHER CHANGES
IN EQUITY FROM NON-OWNER SOURCES
- -----------------------------------------------------------------------------------------------------------
Balance, beginning of year $598 $535 $223
Unrealized gains (losses), net of tax (996) 62 313
Foreign currency translation, net of tax 0 1 (1)
- -----------------------------------------------------------------------------------------------------------
Balance, end of year $(398) $598 $535
===========================================================================================================
- -----------------------------------------------------------------------------------------------------------
SUMMARY OF CHANGES IN EQUITY
FROM NON-OWNER SOURCES
- -----------------------------------------------------------------------------------------------------------
Net Income $1,047 $902 $839
Other changes in equity from non-owner sources (996) 63 312
- -----------------------------------------------------------------------------------------------------------
Total changes in equity from non-owner sources $51 $965 $1,151
===========================================================================================================
</TABLE>
See Notes to Consolidated Financial Statements.
F-4
<PAGE> 81
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH
($ in millions)
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1999 1998 1997
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Premiums collected $1,715 $1,763 $1,519
Net investment income received 2,365 2,021 2,059
Other revenues received 537 419 373
Benefits and claims paid (1,094) (1,127) (1,230)
Interest credited to contractholders (958) (918) (853)
Operating expenses paid (1,013) 751) (638)
Income taxes paid (393) (506) (368)
Trading account investments purchases, net (80) (38) (54)
Other (104) 12 18
- ---------------------------------------------------------------------------------------------------------------------
Net Cash Provided by Operating Activities 975 875 826
- ---------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from maturities of investments
Fixed maturities 4,103 2,608 2,259
Mortgage loans 662 722 663
Proceeds from sales of investments
Fixed maturities 12,562 13,390 7,592
Equity securities 100 212 341
Mortgage loans - - 207
Real estate held for sale 219 53 169
Purchases of investments
Fixed maturities (18,129) (18,072) (11,143)
Equity securities (309) (194) (483)
Mortgage loans (470) 457) (771)
Policy loans, net 599 15 38
Short-term securities (purchases) sales, net 316 495) (2)
Other investments purchases, net (413) (550) (260)
Securities transactions in course of settlement, net (463) 192 311
- ---------------------------------------------------------------------------------------------------------------------
Net Cash Used in Investing Activities (1,223) (2,576) (1,079)
- ---------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Redemption of commercial paper, net - - (50)
Contractholder fund deposits 5,764 4,383 3,544
Contractholder fund withdrawals (4,946) (2,565) (2,757)
Dividends to parent company (550) (110) (500)
- ---------------------------------------------------------------------------------------------------------------------
Net Cash Provided by Financing Activities 268 1,708 237
- ---------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash 20 7 (16)
- ---------------------------------------------------------------------------------------------------------------------
Cash at December 31, $85 $65 $58
====================================================================================================================
</TABLE>
See Notes to Consolidated Financial Statements.
F-5
<PAGE> 82
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Significant accounting policies used in the preparation of the accompanying
financial statements follow.
Basis of Presentation
The Travelers Insurance Company (TIC), together with its subsidiaries (the
Company), is a wholly owned subsidiary of The Travelers Insurance Group
Inc. (TIGI), an indirect wholly owned subsidiary of Citigroup Inc.
(Citigroup). The consolidated financial statements include the accounts of
the Company and its insurance and non-insurance subsidiaries on a fully
consolidated basis. The primary insurance entities of the Company are TIC
and its subsidiaries, The Travelers Life and Annuity Company (TLAC),
Primerica Life Insurance Company (Primerica Life), and its subsidiaries,
Primerica Life Insurance Company of Canada and National Benefit Life
Insurance Company (NBL).
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 benefits and
expenses during the reporting period. Actual results could differ from
those estimates.
Certain prior year amounts have been reclassified to conform to the 1999
presentation.
ACCOUNTING CHANGES
Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities
Effective January 1, 1997, the Company adopted Statement of Financial
Accounting Standards No. 125, "Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities" (FAS 125). This
statement establishes accounting and reporting standards for transfers and
servicing of financial assets and extinguishments of liabilities. These
standards are based on an approach that focuses on control. Under this
approach, after a transfer of financial assets, an entity recognizes the
financial and servicing assets it controls and the liabilities it has
incurred, derecognizes financial assets when control has been surrendered
and derecognizes liabilities when extinguished. FAS 125 provides standards
for distinguishing transfers of financial assets that are sales from
transfers that are secured borrowings. Effective January 1, 1998, the
Company adopted the collateral provisions of FAS 125 that were not
effective until 1998 in accordance with Statement of Financial Accounting
Standards No. 127, "Deferral of the Effective Date of Certain Provisions of
SFAS 125." The adoption of the collateral provisions of FAS 125 created
additional assets and liabilities on the Company's consolidated statement
of financial position related to the recognition of securities provided and
received as collateral. There was no impact on the Company's results of
operations from the adoption of the collateral provisions of FAS 125.
F-6
<PAGE> 83
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
Accounting for the Costs of Computer Software Developed or Obtained for
Internal Use During the third quarter of 1998, the Company adopted
(effective January 1, 1998) the Accounting Standards Executive Committee of
the American Institute of Certified Public Accountants' Statement of
Position 98-1, "Accounting for the Costs of Computer Software Developed or
Obtained for Internal Use" (SOP 98-1). SOP 98-1 provides guidance on
accounting for the costs of computer software developed or obtained for
internal use and for determining when specific costs should be capitalized
or expensed. The adoption of SOP 98-1 did not have a material impact on the
Company's financial condition, results of operations or liquidity.
Accounting by Insurance and Other Enterprises for Insurance - Related
Assessments
In January 1999, the Company adopted (effective January 1, 1999) Statement
of Position 97-3, "Accounting by Insurance and Other Enterprises for
Insurance-Related Assessments" (SOP 97-3). SOP 97-3 provides guidance for
determining when an entity should recognize a liability for guaranty-fund
and other insurance-related assessments, how to measure that liability, and
when an asset may be recognized for the recovery of such assessments
through premium tax offsets or policy surcharges. The adoption of this SOP
had no impact on the Company's financial condition, results of operations
or liquidity.
ACCOUNTING POLICIES
Investments
Fixed maturities include bonds, notes and redeemable preferred stocks. Fair
values of investments in fixed maturities are based on quoted market prices
or dealer quotes or, if these are not available, discounted expected cash
flows using market rates commensurate with the credit quality and maturity
of the investment. Also included in fixed maturities are loan-backed and
structured securities, which are amortized using the retrospective method.
The effective yield used to determine amortization is calculated based upon
actual historical and projected future cash flows, which are obtained from
a widely-accepted securities data provider. Fixed maturities are classified
as "available for sale" and are reported at fair value, with unrealized
investment gains and losses, net of income taxes, charged or credited
directly to shareholder's equity.
Equity securities, which include common and nonredeemable preferred stocks,
are classified as "available for sale" and carried at fair value based
primarily on quoted market prices. Changes in fair values of equity
securities are charged or credited directly to shareholder's equity, net of
income taxes.
Mortgage loans are carried at amortized cost. A mortgage loan is considered
impaired when it is probable that the Company will be unable to collect
principal and interest amounts due. For mortgage loans that are determined
to be impaired, a reserve is established for the difference between the
amortized cost and fair market value of the underlying collateral. In
estimating fair value, the Company uses interest rates reflecting the
higher returns required in the current real estate financing market.
Impaired loans were insignificant at December 31, 1999 and 1998.
F-7
<PAGE> 84
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
Real estate held for sale is carried at the lower of cost or fair value
less estimated cost to sell. Fair value of foreclosed properties is
established at the time of foreclosure by internal analysis or external
appraisers, using discounted cash flow analyses and other accepted
techniques. Thereafter, an allowance for losses on real estate held for
sale is established if the carrying value of the property exceeds its
current fair value less estimated costs to sell. There was no such
allowance at December 31, 1999 and 1998.
Trading securities and related liabilities are normally held for periods
less than six months. These investments are marked to market with the
change recognized in net investment income during the current period.
Short-term securities, consisting primarily of money market instruments and
other debt issues purchased with a maturity of less than one year, are
carried at amortized cost which approximates market.
Other invested assets include partnership investments and real estate joint
ventures accounted for on the equity method of accounting. Undistributed
income is reported in net investment income.
Accrual of income is suspended on fixed maturities or mortgage loans that
are in default, or on which it is likely that future payments will not be
made as scheduled. Interest income on investments in default is recognized
only as payment is received.
DERIVATIVE FINANCIAL INSTRUMENTS
The Company uses derivative financial instruments, including financial
futures contracts, options, forward contracts, interest rate swaps,
currency swaps, and equity swaps, as a means of hedging exposure to
interest rate and foreign currency risk. Hedge accounting is used to
account for derivatives. To qualify for hedge accounting the changes in
value of the derivative must be expected to substantially offset the
changes in value of the hedged item. Hedges are monitored to ensure that
there is a high correlation between the derivative instruments and the
hedged investment.
Gains and losses arising from financial futures contracts are used to
adjust the basis of hedged investments and are recognized in net investment
income over the life of the investment.
Payments to be received or made under interest rate swaps are accrued and
recognized in net investment income. Swaps hedging investments are carried
at fair value with unrealized gains and losses, net of taxes, charged or
credited directly to shareholder's equity. Interest rate and currency swaps
hedging liabilities are off-balance sheet.
Forward contracts, interest rate options and equity swaps were not
significant at December 31, 1999 and 1998. Information concerning
derivative financial instruments is included in Note 5.
INVESTMENT GAINS AND LOSSES
Realized investment gains and losses are included as a component of pre-tax
revenues based upon specific identification of the investments sold on the
trade date. Also included are gains and losses arising from the
remeasurement of the local currency value of foreign investments to U.S.
dollars, the functional currency of the Company. The foreign exchange
effects of Canadian operations are included in unrealized gains and losses.
F-8
<PAGE> 85
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
POLICY LOANS
Policy loans are carried at the amount of the unpaid balances that are not
in excess of the net cash surrender values of the related insurance
policies. The carrying value of policy loans, which have no defined
maturities, is considered to be fair value.
DEFERRED ACQUISITION COSTS
Costs of acquiring individual life insurance, annuities and long-term care
business, principally commissions and certain expenses related to policy
issuance, underwriting and marketing, all of which vary with and are
primarily related to the production of new business, are deferred.
Acquisition costs relating to traditional life insurance, including term
insurance and long-term care insurance, are amortized in relation to
anticipated premiums; universal life in relation to estimated gross
profits; and annuity contracts employing a level yield method. For life
insurance, a 15 to 20-year amortization period is used; for long-term care
business, a 10 to 20-year period is used, and a seven to 20-year period is
employed for annuities. Deferred acquisition costs are reviewed
periodically for recoverability to determine if any adjustment is required.
Adjustments, if any, are charged to income.
VALUE OF INSURANCE IN FORCE
The value of insurance in force is an asset recorded at the time of
acquisition of an insurance company. It represents the actuarially
determined present value of anticipated profits to be realized from life
insurance, annuities and health contracts at the date of acquisition using
the same assumptions that were used for computing related liabilities where
appropriate. The value of insurance in force was the actuarially determined
present value of the projected future profits discounted at interest rates
ranging from 14% to 18%. Traditional life insurance and guaranteed
renewable health policies are amortized in relation to anticipated
premiums; universal life is amortized in relation to estimated gross
profits; and annuity contracts are amortized employing a level yield
method. The value of insurance in force is reviewed periodically for
recoverability to determine if any adjustment is required. Adjustments, if
any, are charged to income.
SEPARATE AND VARIABLE ACCOUNTS
Separate and variable accounts primarily represent funds for which
investment income and investment gains and losses accrue directly to, and
investment risk is borne by, the contractholders. Each account has specific
investment objectives. The assets of each account are legally segregated
and are not subject to claims that arise out of any other business of the
Company. The assets of these accounts are carried at market value. Certain
other separate accounts provide guaranteed levels of return or benefits and
the assets of these accounts are primarily carried at market value. Amounts
assessed to the contractholders for management services are included in
revenues. Deposits, net investment income and realized investment gains and
losses for these accounts are excluded from revenues, and related liability
increases are excluded from benefits and expenses.
GOODWILL
Goodwill represents the cost of acquired businesses in excess of net assets
and is being amortized on a straight-line basis principally over a 40-year
period. The carrying amount is regularly reviewed for indication of
impairment in value that in the view of management would be other than
temporary. If it is determined that goodwill is unlikely to be recovered,
impairment is recognized on a discounted cash flow basis.
F-9
<PAGE> 86
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
CONTRACTHOLDER FUNDS
Contractholder funds represent receipts from the issuance of universal
life, corporate owned life insurance, pension investment and certain
deferred annuity contracts. Contractholder fund balances are increased by
such receipts and credited interest and reduced by withdrawals, mortality
charges and administrative expenses charged to the contractholders.
Interest rates credited to contractholder funds range from 3.5% to 10.0%.
FUTURE POLICY BENEFITS
Future policy benefits represent liabilities for future insurance policy
benefits. Benefit reserves for life insurance and annuities have been
computed based upon mortality, morbidity, persistency and interest
assumptions applicable to these coverages, which range from 2.5% to 10.0%,
including adverse deviation. These assumptions consider Company experience
and industry standards. The assumptions vary by plan, age at issue, year of
issue and duration. Appropriate recognition has been given to experience
rating and reinsurance.
OTHER LIABILITIES
Included in Other Liabilities is the Company's estimate of its liability
for guaranty fund and other insurance-related assessments. State guaranty
fund assessments are based upon the Company's share of premium written or
received in one or more years prior to an insolvency occurring in the
industry. Once an insolvency has occurred, the Company recognizes a
liability for such assessments if it is probable that an assessment will be
imposed and the amount of the assessment can be reasonably estimated. At
December 31, 1999, the Company had a liability of $21.9 million for
guaranty fund assessments and a related premium tax offset recoverable of
$4.7 million. The assessments are expected to be paid over a period of
three to five years and the premium tax offsets are expected to be realized
over a period of 10 to 15 years.
SECURITIES LOANED
Securities loaned are recorded at the amount of cash received as
collateral. The Company receives cash collateral in an amount in excess of
the market value of securities loaned. The Company monitors the market
value of securities loaned on a daily basis with additional collateral
obtained as necessary.
PERMITTED STATUTORY ACCOUNTING PRACTICES
The Company's insurance subsidiaries, domiciled principally in Connecticut
and Massachusetts, prepare statutory financial statements in accordance
with the accounting practices prescribed or permitted by the insurance
departments of the states of domicile. Prescribed statutory accounting
practices include certain publications of the National Association of
Insurance Commissioners (NAIC) as well as state laws, regulations, and
general administrative rules. Permitted statutory accounting practices
encompass all accounting practices not so prescribed. The impact of any
permitted accounting practices on statutory surplus of the Company is not
material.
The NAIC recently completed a process intended to codify statutory
accounting practices for certain insurance enterprises. As a result of this
process, the NAIC will issue a revised statutory Accounting Practices and
Procedures Manual - version effective January 1, 2001 (the revised Manual)
that will be effective for years beginning January 1, 2001. It is expected
that the State of Connecticut will require that, effective January 1, 2001,
insurance companies domiciled in Connecticut prepare their statutory basis
financial statements in accordance with the revised Manual subject to any
deviations prescribed or permitted
F-10
<PAGE> 87
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
by the Connecticut insurance commissioner. The Company has not yet
determined the impact that this change will have on the statutory capital
and surplus of its insurance subsidiaries.
PREMIUMS
Premiums are recognized as revenues when due. Reserves are established for
the portion of premiums that will be earned in future periods and for
deferred profits on limited-payment policies that are being recognized in
income over the policy term.
OTHER REVENUES
Other revenues include management fees for variable annuity separate
accounts; surrender, mortality and administrative charges and fees earned
on investment, universal life and other insurance contracts; and revenues
of non-insurance subsidiaries.
CURRENT AND FUTURE INSURANCE BENEFITS
Current and future insurance benefits represent charges for mortality and
morbidity related to fixed annuities, universal life, term life and health
insurance benefits.
INTEREST CREDITED TO CONTRACTHOLDERS
Interest credited to contractholders represents amounts earned by universal
life, corporate owned life insurance, pension investment and certain
deferred annuity contracts in accordance with contract provisions.
FEDERAL INCOME TAXES
The provision for federal income taxes is comprised of two components,
current income taxes and deferred income taxes. Deferred federal income
taxes arise from changes during the year in cumulative temporary
differences between the tax basis and book basis of assets and liabilities.
A deferred federal income tax asset is recognized to the extent that future
realization of the tax benefit is more likely than not, with a valuation
allowance for the portion that is not likely to be recognized.
FUTURE APPLICATION OF ACCOUNTING STANDARDS
In June 1998, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 133, "Accounting for
Derivative Instruments and Hedging Activities" (FAS 133). In June 1999, the
FASB issued Statement of Financial Standards No. 137 "Deferral of the
Effective Date of FASB Statement No. 133" (FAS 137) which allows entities
which have not adopted FAS 133 to defer its effective date to all fiscal
quarters of all fiscal years beginning after June 15, 2000. FAS 133
establishes accounting and reporting standards for derivative instruments,
including certain derivative instruments embedded in other contracts
(collectively referred to as derivatives), and for hedging activities. It
requires that an entity recognize all derivatives as either assets or
liabilities in the consolidated balance sheet and measure those instruments
at fair value. If certain conditions are met, a derivative may be
specifically designated as (a) a hedge of the exposure to changes in the
fair value of a recognized asset or liability or an unrecognized firm
commitment, (b) a hedge of the exposure to variable cash flows of a
recognized asset or liability or of a forecasted transaction, or (c) a
hedge of the foreign currency exposure of a net investment in a foreign
F-11
<PAGE> 88
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
operation, an unrecognized firm commitment, an available-for-sale security,
or a foreign-currency-denominated forecasted transaction. The accounting
for changes in the fair value of a derivative (that is, gains and losses)
depends on the intended use of the derivative and the resulting
designation. Upon initial application of FAS 133, hedging relationships
must be designated anew and documented pursuant to the provisions of this
statement. The Company adopted the deferral provisions of FAS 137,
effective January 1, 2000 and has not yet determined the impact that FAS
133 will have on its consolidated financial statements.
2. COMMERCIAL PAPER AND LINES OF CREDIT
TIC has issued commercial paper directly to investors in prior years. No
commercial paper was outstanding at December 31, 1999 or December 31, 1998.
TIC must maintain bank lines of credit at least equal to the amount of the
outstanding commercial paper. Citigroup and TIC have an agreement with a
syndicate of banks to provide $1.0 billion of revolving credit, to be
allocated to Citigroup or the Company. TIC's participation in this
agreement is limited to $250 million. The agreement consists of a five-year
revolving credit facility that expires in June 2001. At December 31, 1999
and 1998, no credit under this agreement was allocated to TIC. Under this
facility the Company is required to maintain certain minimum equity and
risk-based capital levels. At December 31, 1999, the Company was in
compliance with these provisions. If TIC had borrowings outstanding on this
facility, the interest rate would be based upon LIBOR plus a contractually
negotiated margin.
3. REINSURANCE
The Company participates in reinsurance in order to limit losses, minimize
exposure to large risks, provide additional capacity for future growth and
to effect business-sharing arrangements. Reinsurance is accomplished
through various plans of reinsurance, primarily yearly renewable term
coinsurance and modified coinsurance. The Company remains primarily liable
as the direct insurer on all risks reinsured.
Since 1997 universal life business was reinsured under an 80%/20% quota
share reinsurance program and term life business was reinsured under a
90%/10% quota share reinsurance program. Prior to 1997, the Company
reinsured all of its life business via first dollar quota share treaties on
an 80%/20% basis. Maximum retention of $1.5 million is generally reached on
policies in excess of $7.5 million. For other plans of insurance, it is the
policy of the Company to obtain reinsurance for amounts above certain
retention limits on individual life policies, which limits vary with age
and underwriting classification. Generally, the maximum retention on an
ordinary life risk is $1.5 million. Total inforce business ceded under
reinsurance contracts is $222.5 billion and $201.3 billion at December 31,
1999 and 1998.
The Company writes workers' compensation business through its Accident
Department. This business is ceded 100% to an affiliate, The Travelers
Indemnity Company.
F-12
<PAGE> 89
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
A summary of reinsurance financial data reflected within the consolidated
statements of income and balance sheets is presented below ($ in millions):
<TABLE>
<CAPTION>
WRITTEN PREMIUMS 1999 1998 1997
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Direct $2,274 $2,310 $2,148
Assumed from:
Non-affiliated companies - - 1
Ceded to:
Affiliated companies (206) (242) (280)
Non-affiliated companies (322) (317) (273)
------------------------------------------------------------------------------------------------------
Total Net Written Premiums $1,746 $1,751 $1,596
======================================================================================================
</TABLE>
<TABLE>
<CAPTION>
EARNED PREMIUMS 1999 1998 1997
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Direct $2,248 $1,949 $2,170
Assumed from:
Non-affiliated companies - - 1
Ceded to:
Affiliated companies (193) (251) (321)
Non-affiliated companies (327) (308) (291)
------------------------------------------------------------------------------------------------------
Total Net Earned Premiums $1,728 $1,390 $1,559
======================================================================================================
</TABLE>
Reinsurance recoverables at December 31, 1999 and 1998 include amounts
recoverable on unpaid and paid losses and were as follows ($ in millions):
<TABLE>
<CAPTION>
REINSURANCE RECOVERABLES 1999 1998
------------------------------------------------------------------------------------------------------
<S> <C> <C>
Life and Accident and Health Business:
Non-affiliated companies $1,221 $1,297
Property-Casualty Business:
Affiliated companies 2,013 2,090
------------------------------------------------------------------------------------------------------
Total Reinsurance Recoverables $3,234 $3,387
======================================================================================================
</TABLE>
Total reinsurance recoverables at December 31, 1999 and 1998 include $569
million and $640 million, respectively, from The Metropolitan Life
Insurance Company in connection with the sale of the Company's group life
insurance and related businesses in 1995.
F-13
<PAGE> 90
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
4. SHAREHOLDER'S EQUITY
Shareholder's Equity and Dividend Availability
The Company's statutory net income, which includes the statutory net income
of all insurance subsidiaries, was $890 million, $702 million and $754
million for the years ended December 31, 1999, 1998 and 1997, respectively.
The Company's statutory capital and surplus was $5.03 billion and $4.95
billion at December 31, 1999 and 1998, respectively.
The Company is currently subject to various regulatory restrictions that
limit the maximum amount of dividends available to be paid to its parent
without prior approval of insurance regulatory authorities. Statutory
surplus of $679 million is available in 2000 for dividend payments by the
Company without prior approval of the Connecticut Insurance Department. In
addition, under a revolving credit facility, the Company is required to
maintain certain minimum equity and risk-based capital levels. The Company
was in compliance with these covenants at December 31, 1999 and 1998. The
Company paid dividends of $550 million, $110 million and $500 million in
1999, 1998 and 1997, respectively.
F-14
<PAGE> 91
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
4. SHAREHOLDER'S EQUITY (continued)
Accumulated Other Changes in Equity from Non-Owner Sources, Net of Tax
Changes in each component of Accumulated Other Changes in Equity from Non-Owner
Sources were as follows:
<TABLE>
<CAPTION>
ACCUMULATED OTHER
NET UNREALIZED FOREIGN CHANGES IN EQUITY FROM
GAIN (LOSS) ON CURRENCY NON-OWNER SOURCES
INVESTMENT SECURITIES TRANSLATION
($ in millions) ADJUSTMENTS
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
BALANCE, JANUARY 1, 1997 $232 $(9) $223
Unrealized gain on investment securities,
net of tax of $239 442 - 442
Less: reclassification adjustment for gains
included in net income, net of tax of $70 129 - 129
Foreign currency translation adjustment,
net of tax of $0 - (1) (1)
- -------------------------------------------------------------------------------------------------------------------------------
CURRENT PERIOD CHANGE 313 (1) 312
- -------------------------------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 1997 545 (10) 535
Unrealized gains on investment securities,
net of tax of $85 159 - 159
Less: reclassification adjustment for gains
included in net income, net of tax of $52 97 - 97
Foreign currency translation adjustment,
net of tax of $2 - 1 1
- -------------------------------------------------------------------------------------------------------------------------------
CURRENT PERIOD CHANGE 62 1 63
- -------------------------------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 1998 607 (9) 598
Unrealized losses on investment securities,
net of tax of $497 (923) - (923)
Less: reclassification adjustment for gains
included in net income, net of tax of $40 73 - 73
- -------------------------------------------------------------------------------------------------------------------------------
CURRENT PERIOD CHANGE (996) - (996)
- -------------------------------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 1999 $(389) $(9) $(398)
===============================================================================================================================
</TABLE>
F-15
<PAGE> 92
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
5. DERIVATIVE FINANCIAL INSTRUMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS
Derivative Financial Instruments
The Company uses derivative financial instruments, including financial
futures, interest rate swaps, currency swaps, options and forward contracts
as a means of hedging exposure to interest rate, equity price, and foreign
currency risk on anticipated transactions or existing assets and
liabilities. The Company, through a subsidiary that is a broker/dealer,
Tribeca Investments LLC (Tribeca) holds and issues derivative instruments
for trading purposes. All of these derivative financial instruments have
off-balance sheet risk. Financial instruments with off-balance sheet risk
involve, to varying degrees, elements of credit and market risk in excess
of the amount recognized in the balance sheet. The contract or notional
amounts of these instruments reflect the extent of involvement the Company
has in a particular class of financial instrument. However, the maximum
loss of cash flow associated with these instruments can be less than these
amounts. For interest rate swaps, currency swaps, options and forward
contracts, credit risk is limited to the amount that it would cost the
Company to replace the contracts. Financial futures contracts and purchased
listed option contracts have little credit risk since organized exchanges
are the counterparties. The Company as a writer of option contracts has no
credit risk since the counterparty has no performance obligation after it
has paid a cash premium.
The Company monitors creditworthiness of counterparties to these financial
instruments by using criteria of acceptable risk that are consistent with
on-balance sheet financial instruments. The controls include credit
approvals, limits and other monitoring procedures.
The Company uses exchange-traded financial futures contracts to manage its
exposure to changes in interest rates which arise from the sale of certain
insurance and investment products, or the need to reinvest proceeds from
the sale or maturity of investments. To hedge against adverse changes in
interest rates, the Company enters long or short positions in financial
futures contracts which offset asset price changes resulting from changes
in market interest rates until an investment is purchased or a product is
sold.
Margin payments are required to enter a futures contract and contract gains
or losses are settled daily in cash. The contract amount of futures
contracts represents the extent of the Company's involvement, but not
future cash requirements, as open positions are typically closed out prior
to the delivery date of the contract.
At December 31, 1999 and 1998, the Company held financial futures contracts
with notional amounts of $255 million and $459 million, respectively. These
financial futures had a deferred gain of $1.8 million and a deferred loss
of $.5 million in 1999, and a deferred gain of $3.3 million and a deferred
loss of $.1 million in 1998. Total gains of $6.9 million and $1.5 million
from financial futures were deferred at December 31, 1999 and 1998,
respectively, relating to anticipated investment purchases and investment
product sales, and are reported as other liabilities. At December 31, 1999
and 1998, the Company's futures contracts had no fair value because these
contracts were marked to market and settled in cash daily.
F-16
<PAGE> 93
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
The Company enters into interest rate swaps in connection with other
financial instruments to provide greater risk diversification and better
match assets and liabilities. Under interest rate swaps, the Company agrees
with other parties to exchange, at specified intervals, the difference
between fixed-rate and floating-rate interest amounts calculated by
reference to an agreed notional principal amount. The Company also enters
into basis swaps in which both legs of the swap are floating with each
based on a different index. Generally, no cash is exchanged at the outset
of the contract and no principal payments are made by either party. A
single net payment is usually made by one counterparty at each due date.
Swap agreements are not exchange-traded so they are subject to the risk of
default by the counterparty.
At December 31, 1999 and 1998, the Company held interest rate swap
contracts with notional amounts of $1,498.2 million and $1,077.9 million,
respectively. The fair value of these financial instruments was $25.3
million (gain position) and $26.3 million (loss position) at December 31,
1999 and was $5.6 million (gain position) and $19.6 million (loss position)
at December 31, 1998. The fair values were determined using the discounted
cash flow method. At December 31, 1999, the Company held swap contracts
with affiliate counterparties with a notional amount of $207.5 million and
a fair value of $22.6 million (loss position).
The Company enters into currency swaps in connection with other financial
instruments to provide greater risk diversification and better match assets
purchased in U.S. Dollars with corresponding funding agreements issued in
foreign currencies. Under currency swaps, the Company agrees with other
parties to exchange, at specified intervals, foreign currency for U.S.
Dollars based upon interest amounts calculated by reference to an agreed
notional principal amount. Generally, there is an exchange of foreign
currency for U.S. Dollars at the outset of the contract based upon the
prevailing foreign exchange rate. Swap agreements are not exchange traded
so they are subject to the risk of default by the counterparty.
At December 31, 1999 and 1998, the Company held currency swap contracts
with notional amounts of $732.7 million and $10.0 million, respectively.
The fair value of these financial instruments was $59.2 million (loss
position) at December 31, 1999 and $.4 million (gain position) at December
31, 1998. The fair values were determined using the discounted cash flow
method.
The Company uses equity option contracts to manage its exposure to changes
in equity market prices that arise from the sale of certain insurance
products. To hedge against adverse changes in the equity market prices, the
Company enters long positions in equity option contracts with major
financial institutions. These contracts allow the Company, for a fee, the
right to receive a payment if the Standard and Poor's 500 Index falls below
agreed upon strike prices.
At December 31, 1999 and 1998, the Company held equity options with
notional amounts of $275.4 million and zero, respectively. The fair value
of these financial instruments was $32.6 million (gain position) at
December 31, 1999. The fair value of these contracts represent the
estimated replacement cost as quoted by independent third party brokers.
The off-balance sheet risks of interest rate options, equity swaps and
forward contracts were not significant at December 31, 1999 and 1998.
The off-balance sheet risk of derivative instruments held for trading
purposes was not significant at December 31, 1999 and 1998.
F-17
<PAGE> 94
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
Financial Instruments with Off-Balance Sheet Risk
In the normal course of business, the Company issues fixed and variable
rate loan commitments and has unfunded commitments to partnerships. The
off-balance sheet risk of these financial instruments was not significant
at December 31, 1999 and 1998. The Company had unfunded commitments to
partnerships with a value of $459.7 million at December 31, 1999.
Fair Value of Certain Financial Instruments
The Company uses various financial instruments in the normal course of its
business. Certain insurance contracts are excluded by Statement of
Financial Accounting Standards No. 107, "Disclosure about Fair Value of
Financial Instruments", and therefore are not included in the amounts
discussed.
At December 31, 1999 and 1998, investments in fixed maturities had a
carrying value and a fair value of $23.9 billion and $23.9 billion,
respectively. See Notes 1 and 12.
At December 31, 1999 mortgage loans had a carrying value of $2.3 billion
and a fair value of $2.3 billion and in 1998 had a carrying value of $2.6
billion and a fair value of $2.8 billion. In estimating fair value, the
Company used interest rates reflecting the current real estate financing
market.
Citigroup Preferred Stock included in other invested assets had a carrying
value and fair value of $987 million at December 31, 1999 and 1998.
At December 31, 1999, contractholder funds with defined maturities had a
carrying value of $5.0 billion and a fair value of $4.7 billion, compared
with a carrying value and a fair value of $3.3 billion at December 31,
1998. The fair value of these contracts is determined by discounting
expected cash flows at an interest rate commensurate with the Company's
credit risk and the expected timing of cash flows. Contractholder funds
without defined maturities had a carrying value of $10.1 billion and a fair
value of $9.9 billion at December 31, 1999, compared with a carrying value
of $10.4 billion and a fair value of $10.2 billion at December 31, 1998.
These contracts generally are valued at surrender value.
The carrying values of $228 million and $144 million of financial
instruments classified as other assets approximated their fair values at
December 31, 1999 and 1998, respectively. The carrying values of $1.2
billion and $2.3 billion of financial instruments classified as other
liabilities also approximated their fair values at December 31, 1999 and
1998, respectively. Fair value is determined using various methods,
including discounted cash flows, as appropriate for the various financial
instruments.
The assets of separate accounts providing a guaranteed return had a
carrying value and a fair value of $251 million at December 31, 1999,
compared with a carrying value and a fair value of $235 million at December
31, 1998. The liabilities of separate accounts providing a guaranteed
return had a carrying value and a fair value of $251 million at December
31, 1999, compared with a carrying value and a fair value of $209 million
and $206 million, respectively, at December 31, 1998.
The carrying values of cash, trading securities and trading securities sold
not yet purchased are carried at fair value. The carrying values of
short-term securities and investment income accrued approximated their fair
values.
The carrying value of policy loans, which have no defined maturities, is
considered to be fair value.
F-18
<PAGE> 95
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
6. COMMITMENTS AND CONTINGENCIES
Financial Instruments with Off-Balance Sheet Risk
See Note 5 for a discussion of financial instruments with off-balance sheet
risk.
Litigation
In March 1997, a purported class action entitled Patterman v. The
Travelers, Inc., et al. was commenced in the Superior Court of Richmond
County, Georgia, alleging, among other things, violations of the Georgia
RICO statute and other state laws by an affiliate of the Company, Primerica
Financial Services, Inc. and certain of its affiliates. Plaintiffs seek
unspecified compensatory and punitive damages and other relief. In October
1997, defendants answered the complaint, denied liability and asserted
numerous affirmative defenses. In February 1998, on defendants' motion, the
Superior Court of Richmond County transferred the lawsuit to the Superior
Court of Gwinnett County, Georgia. Plaintiffs appealed the transfer order,
and in December 1998 the Court of Appeals of the State of Georgia reversed
the lower court's decision. Defendants petitioned the Georgia Supreme Court
to hear an appeal from the decision of the Court of Appeals, and the
petition was granted in May 1998. In September 1999, oral argument on
defendants' petition was heard and, on February 28, 2000, the Georgia
Supreme Court affirmed the Georgia Court of Appeals and remanded the matter
to the Superior Court of Richmond County. In March 2000, defendants moved
the Georgia Supreme Court to reconsider its February 28, 2000 decision, and
that motion remains pending. Proceedings in the trial court have been
stayed pending appeal. Defendants intend to vigorously contest the
litigation.
The Company is also a defendant or co-defendant in various other litigation
matters in the normal course of business. Although there can be no
assurances, as of December 31, 1999, the Company believes, based on
information currently available, that the ultimate resolution of these
legal proceedings would not be likely to have a material adverse effect on
its results of operations, financial condition or liquidity.
7. BENEFIT PLANS
Pension and Other Postretirement Benefits
The Company participates in a qualified, noncontributory defined benefit
pension plan sponsored by Citigroup. In addition, the Company provides
certain other postretirement benefits to retired employees through a plan
sponsored by TIGI. The Company's share of net expense for the qualified
pension and other postretirement benefit plans was not significant for
1999, 1998 and 1997. Through plans sponsored by TIGI, the Company also
provides defined contribution pension plans for certain agents. Company
contributions are primarily a function of production. The expense for these
plans was not significant in 1999, 1998 and 1997.
401(k) Savings Plan
Substantially all of the Company's employees are eligible to participate in
a 401(k) savings plan sponsored by Citigroup. Effective January 1, 1997,
the Company discontinued matching contributions for the majority of its
employees. The Company's expenses in connection with the 401(k) savings
plan were not significant in 1999, 1998 and 1997.
F-19
<PAGE> 96
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
8. RELATED PARTY TRANSACTIONS
The principal banking functions, including payment of salaries and
expenses, for certain subsidiaries and affiliates of TIGI are handled by
two companies. The Company handles banking functions for the life and
annuity operations of Travelers Life & Annuity and some of its
non-insurance affiliates. The Travelers Indemnity Company handles banking
functions for the property-casualty operations, including most of its
property-casualty insurance and non-insurance affiliates. Settlements
between companies are made at least monthly. The Company provides various
employee benefits coverages to employees of certain subsidiaries of TIGI.
The premiums for these coverages were charged in accordance with cost
allocation procedures based upon salaries or census. In addition,
investment advisory and management services, data processing services and
claims processing services are shared with affiliated companies. Charges
for these services are shared by the companies on cost allocation methods
based generally on estimated usage by department.
The Company maintains a short-term investment pool in which its insurance
affiliates participate. The position of each company participating in the
pool is calculated and adjusted daily. At December 31, 1999 and 1998, the
pool totaled approximately $2.6 billion and $2.3 billion, respectively. The
Company's share of the pool amounted to $1.0 billion and $793 million at
December 31, 1999 and 1998, respectively, and is included in short-term
securities in the consolidated balance sheet.
Included in short-term investments at December 31, 1998 was a 90-day
variable rate note receivable from Citigroup. The rate was based upon the
AA financial commercial paper rate plus 14 basis points. The rate at
December 31, 1998 was 5.47%. The balance, which was $500 million at
December 31, 1998, was paid in full on February 25, 1999. Interest accrued
at December 31, 1998 was $2.2 million. Interest earned was $3.9 million and
$9.4 million in 1999 and 1998, respectively.
The Company markets deferred annuity products and life and health insurance
through its affiliate, Salomon Smith Barney Financial Consultants (SSB).
Premiums and deposits related to these products were $1.4 billion, $1.3
billion, and $1.0 billion in 1999, 1998 and 1997, respectively.
At December 31, 1999 and 1998 the Company had outstanding loaned securities
to SSB for $123.0 million and $39.7 million, respectively.
Included in other invested assets is a $987 million investment in Citigroup
preferred stock at December 31, 1999 and 1998, carried at cost.
The Company sells structured settlement annuities to the insurance
subsidiaries of Travelers Property Casualty Corp. (TAP) in connection with
the settlement of certain policyholder obligations. Such premiums and
deposits were $156 million, $104 million, and $88 million for 1999, 1998
and 1997, respectively. Reserves and contractholder funds related to these
annuities amounted to $798 million and $787 million in 1999 and 1998,
respectively.
In the ordinary course of business, the Company purchases and sells
securities through affiliated broker-dealers. These transactions are
conducted on an arm's length basis.
F-20
<PAGE> 97
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
Primerica Life has entered into a General Agency Agreement with Primerica
Financial Services, Inc. (Primerica), that provides that Primerica will be
Primerica Life's general agent for marketing all insurance of Primerica
Life. In consideration of such services, Primerica Life agreed to pay
Primerica marketing fees of no less than $10 million based upon U.S. gross
direct premiums received by Primerica Life. In each of 1999 and 1998 the
fees paid by Primerica Life were $12.5 million.
In 1998 Primerica became a distributor of products for Travelers Life &
Annuity. Primerica sold $903 million and $256 million of deferred annuities
in 1999 and 1998, respectively.
The Company participates in a stock option plan sponsored by Citigroup that
provides for the granting of stock options in Citigroup common stock to
officers and key employees. To further encourage employee stock ownership,
during 1997 Citigroup introduced the WealthBuilder stock option program.
Under this program, all employees meeting certain requirements have been
granted Citigroup stock options.
The Company applies Accounting Principles Board Opinion No. 25 (APB 25) and
related interpretations in accounting for stock options. Since stock
options under the Citigroup plans are issued at fair market value on the
date of award, no compensation cost has been recognized for these awards.
FAS 123 provides an alternative to APB 25 whereby fair values may be
ascribed to options using a valuation model and amortized to compensation
cost over the vesting period of the options.
Had the Company applied FAS 123 in accounting for Citigroup stock options,
net income would have been the pro forma amounts indicated below:
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1999 1998 1997
($ in millions)
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net income, as reported $1,047 $902 $839
FAS 123 pro forma adjustments, after tax (16) (13) (9)
------------------------------------------------------------------------------------------------------
Net income, pro forma $1,031 $889 $830
------------------------------------------------------------------------------------------------------
</TABLE>
F-21
<PAGE> 98
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
9. LEASES
Most leasing functions for TIGI and its subsidiaries are administered by
TAP. Rent expense related to all leases is shared by the companies on a
cost allocation method based generally on estimated usage by department.
Net rent expense was $30 million, $24 million, and $15 million in 1999,
1998 and 1997, respectively.
<TABLE>
<CAPTION>
--------------------------------------------------------------------------
YEAR ENDING DECEMBER 31, MINIMUM OPERATING RENTAL
($ in millions) PAYMENTS
--------------------------------------------------------------------------
<S> <C>
2000 $38
2001 42
2002 41
2003 41
2004 41
Thereafter 273
--------------------------------------------------------------------------
Total Rental Payments $476
=========================================================================
</TABLE>
Future sublease rental income of approximately $79 million will partially
offset these commitments. Also, the Company will be reimbursed for 50% of
the rental expense for a particular lease totaling $195 million, by an
affiliate. Minimum future capital lease payments are not significant.
The Company is reimbursed for use of furniture and equipment through cost
sharing agreements by its affiliates.
F-22
<PAGE> 99
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
10. FEDERAL INCOME TAXES
EFFECTIVE TAX RATE
<TABLE>
<CAPTION>
($ in millions)
--------------------------------------------------------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1999 1998 1997
--------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Income Before Federal Income Taxes $1,592 $1,383 $1,283
Statutory Tax Rate 35% 35% 35%
--------------------------------------------------------------------------------------------------------
Expected Federal Income Taxes 557 484 449
Tax Effect of:
Non-taxable investment income (19) (5) (4)
Other, net 7 2 (1)
--------------------------------------------------------------------------------------------------------
Federal Income Taxes $ 545 $ 481 $ 444
========================================================================================================
Effective Tax Rate 34% 35% 35%
--------------------------------------------------------------------------------------------------------
</TABLE>
COMPOSITION OF FEDERAL INCOME TAXES
<TABLE>
<CAPTION>
Current:
<S> <C> <C> <C>
United States $377 $418 $410
Foreign 32 24 24
--------------------------------------------------------------------------------------------------------
Total 409 442 434
--------------------------------------------------------------------------------------------------------
Deferred:
United States 143 40 10
Foreign (7) (1) --
--------------------------------------------------------------------------------------------------------
Total 136 39 10
--------------------------------------------------------------------------------------------------------
Federal Income Taxes $545 $481 $444
========================================================================================================
</TABLE>
Additional tax benefits attributable to employee stock plans allocated
directly to shareholder's equity were $17 million for each of the years
ended December 31, 1999, 1998 and 1997.
F-23
<PAGE> 100
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
The net deferred tax liabilities at December 31, 1999 and 1998 were
comprised of the tax effects of temporary differences related to the
following assets and liabilities:
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
($ in millions) 1999 1998
---- ----
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Deferred Tax Assets:
Benefit, reinsurance and other reserves $ 645 $ 616
Operating lease reserves 70 76
Investments, net 11 --
Other employee benefits 106 103
Other 142 135
-----------------------------------------------------------------------------------------------------------------
Total 974 930
-----------------------------------------------------------------------------------------------------------------
Deferred Tax Liabilities:
Deferred acquisition costs and value of insurance in force (773) (673)
Investments, net -- (489)
Other (124) (90)
-----------------------------------------------------------------------------------------------------------------
Total (897) (1,252)
-----------------------------------------------------------------------------------------------------------------
Net Deferred Tax (Liability) Asset Before Valuation Allowance 77 (322)
Valuation Allowance for Deferred Tax Assets (100) (100)
-----------------------------------------------------------------------------------------------------------------
Net Deferred Tax Liability After Valuation Allowance $ (23) $ (422)
-----------------------------------------------------------------------------------------------------------------
</TABLE>
The Company and its life insurance subsidiaries file a consolidated federal
income tax return. Federal income taxes are allocated to each member of the
consolidated group on a separate return basis adjusted for credits and
other amounts required by the consolidation process. Any resulting
liability will be paid currently to the Company. Any credits for losses
will be paid by the Company to the extent that such credits are for tax
benefits that have been utilized in the consolidated federal income tax
return.
The $100 million valuation allowance is sufficient to cover any capital
losses on investments that may exceed the capital gains able to be
generated in the life insurance group's consolidated federal income tax
return based upon management's best estimate of the character of the
reversing temporary differences. Reversal of the valuation allowance is
contingent upon the recognition of future capital gains or a change in
circumstances that causes the recognition of the benefits to become more
likely than not. There was no change in the valuation allowance during
1999. The initial recognition of any benefit produced by the reversal of
the valuation allowance will be recognized by reducing goodwill.
At December 31, 1999, the Company had no ordinary or capital loss
carryforwards.
F-24
<PAGE> 101
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
The policyholders surplus account, which arose under prior tax law, is
generally that portion of the gain from operations that has not been
subjected to tax, plus certain deductions. The balance of this account is
approximately $932 million. Income taxes are not provided for on this
amount because under current U.S. tax rules such taxes will become payable
only to the extent such amounts are distributed as a dividend or exceed
limits prescribed by federal law. Distributions are not contemplated from
this account. At current rates the maximum amount of such tax would be
approximately $326 million.
11. NET INVESTMENT INCOME
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1999 1998 1997
($ in millions) ---- ---- ----
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
GROSS INVESTMENT INCOME
Fixed maturities $1,806 $1,598 $1,460
Mortgage loans 235 295 291
Joint ventures and partnerships 141 74 55
Trading 141 43 57
Other, including policy loans 287 240 263
------------------------------------------------------------------------------------------------------
2,610 2,250 2,126
------------------------------------------------------------------------------------------------------
Investment expenses 104 65 89
------------------------------------------------------------------------------------------------------
Net investment income $2,506 $2,185 $2,037
------------------------------------------------------------------------------------------------------
</TABLE>
12. INVESTMENTS AND INVESTMENT GAINS (LOSSES)
Realized investment gains (losses) for the periods were as follows:
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1999 1998 1997
($ in millions) ---- ---- ----
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
REALIZED INVESTMENT GAINS
Fixed maturities $(23) $111 $ 71
Equity securities 7 6 (9)
Mortgage loans 29 21 59
Real estate held for sale 108 16 67
Other (8) (5) 11
------------------------------------------------------------------------------------------------------
Total Realized Investment Gains $113 $149 $199
------------------------------------------------------------------------------------------------------
</TABLE>
F-25
<PAGE> 102
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
Changes in net unrealized investment gains (losses) that are reported as
accumulated other changes in equity from non-owner sources or unrealized
gains on Citigroup stock in shareholder's equity were as follows:
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1999 1998 1997
($ in millions) ---- ---- ----
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
UNREALIZED INVESTMENT GAINS (LOSSES)
Fixed maturities $(1,554) $ 91 $ 446
Equity securities 49 13 25
Other (30) (169) 520
-------------------------------------------------------------------------------------------------------------
Total Unrealized Investment Gains (Losses) (1,535) (65) 991
-------------------------------------------------------------------------------------------------------------
Related taxes (539) (20) 350
-------------------------------------------------------------------------------------------------------------
Change in unrealized investment gains (losses) (996) (45) 641
Transferred to paid in capital, net of tax -- (585) --
Balance beginning of year 598 1,228 587
-------------------------------------------------------------------------------------------------------------
Balance End of Year $ (398) $ 598 $1,228
-------------------------------------------------------------------------------------------------------------
</TABLE>
Included in Other in 1998 is the unrealized loss on Citigroup common stock
of $167 million prior to the conversion to preferred stock. Also included
in Other were unrealized gains of $506 million, which were reported in
1997, related to appreciation of Citigroup common stock.
F-26
<PAGE> 103
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
Fixed Maturities
The amortized cost and fair value of investments in fixed maturities were
as follows:
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
GROSS GROSS
DECEMBER 31, 1999 AMORTIZED UNREALIZED UNREALIZED FAIR
($ in millions) COST GAINS LOSSES VALUE
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
AVAILABLE FOR SALE:
Mortgage-backed securities - CMOs and
pass-through securities $ 5,081 $ 22 $ 224 $ 4,879
U.S. Treasury securities and obligations of
U.S. Government and government agencies and
authorities 1,032 14 53 993
Obligations of states, municipalities and
political subdivisions 214 -- 31 183
Debt securities issued by foreign governments 811 35 10 836
All other corporate bonds 13,938 69 384 13,623
Other debt securities 3,319 30 99 3,250
Redeemable preferred stock 105 4 7 102
-------------------------------------------------------------------------------------------------------------------
Total Available For Sale $24,500 $ 174 $ 808 $23,866
-------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
GROSS GROSS
DECEMBER 31, 1998 AMORTIZED UNREALIZED UNREALIZED FAIR
($ in millions) COST GAINS LOSSES VALUE
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
AVAILABLE FOR SALE:
Mortgage-backed securities - CMOs and
pass-through securities $ 4,717 $ 147 $ 11 $ 4,853
U.S. Treasury securities and obligations of
U.S. Government and government agencies and
authorities 1,563 186 3 1,746
Obligations of states, municipalities and
political subdivisions 239 18 -- 257
Debt securities issued by foreign governments 634 41 3 672
All other corporate bonds 13,025 532 57 13,500
Other debt securities 2,709 106 38 2,777
Redeemable preferred stock 86 3 1 88
------------------------------------------------------------------------------------------------------------------
Total Available For Sale $22,973 $ 1,033 $ 113 $23,893
------------------------------------------------------------------------------------------------------------------
</TABLE>
F-27
<PAGE> 104
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
Proceeds from sales of fixed maturities classified as available for sale
were $12.6 billion, $13.4 billion and $7.6 billion in 1999, 1998 and 1997,
respectively. Gross gains of $200 million, $314 million and $170 million
and gross losses of $223 million, $203 million and $99 million in 1999,
1998 and 1997, respectively, were realized on those sales.
Fair values of investments in fixed maturities are based on quoted market
prices or dealer quotes or, if these are not available, discounted expected
cash flows using market rates commensurate with the credit quality and
maturity of the investment. The fair value of investments for which a
quoted market price or dealer quote are not available amounted to $4.8
billion and $4.8 billion at December 31, 1999 and 1998, respectively.
The amortized cost and fair value of fixed maturities at December 31, 1999,
by contractual maturity, are shown below. Actual maturities will differ
from contractual maturities because borrowers may have the right to call or
prepay obligations with or without call or prepayment penalties.
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------
AMORTIZED
($ in millions) COST FAIR VALUE
--------------------------------------------------------------------------------------
<S> <C> <C>
MATURITY:
Due in one year or less $1,624 $1,622
Due after 1 year through 5 years 6,633 6,599
Due after 5 years through 10 years 5,257 5,132
Due after 10 years 5,905 5,634
--------------------------------------------------------------------------------------
19,419 18,987
--------------------------------------------------------------------------------------
Mortgage-backed securities 5,081 4,879
--------------------------------------------------------------------------------------
Total Maturity $24,500 $23,866
--------------------------------------------------------------------------------------
</TABLE>
The Company makes investments in collateralized mortgage obligations
(CMOs). CMOs typically have high credit quality, offer good liquidity, and
provide a significant advantage in yield and total return compared to U.S.
Treasury securities. The Company's investment strategy is to purchase CMO
tranches which are protected against prepayment risk, including planned
amortization class (PAC) tranches. Prepayment protected tranches are
preferred because they provide stable cash flows in a variety of interest
rate scenarios. The Company does invest in other types of CMO tranches if a
careful assessment indicates a favorable risk/return tradeoff. The Company
does not purchase residual interests in CMOs.
At December 31, 1999 and 1998, the Company held CMOs classified as
available for sale with a fair value of $3.8 billion and $3.4 billion,
respectively. Approximately 52% and 54%, respectively, of the Company's CMO
holdings are fully collateralized by GNMA, FNMA or FHLMC securities at
December 31, 1999 and 1998. In addition, the Company held $1.1 billion and
$1.4 billion of GNMA, FNMA or FHLMC mortgage-backed pass-through securities
at December 31, 1999 and 1998, respectively. Virtually all of these
securities are rated AAA.
F-28
<PAGE> 105
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
Equity Securities
The cost and fair values of investments in equity securities were as
follows:
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
GROSS GROSS
EQUITY SECURITIES: UNREALIZED UNREALIZED FAIR
($ in millions) COST GAINS LOSSES VALUE
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
DECEMBER 31, 1999
Common stocks $195 $123 $ 4 $314
Non-redeemable preferred stocks 496 15 41 470
-------------------------------------------------------------------------------------------------------------------
Total Equity Securities $691 $138 $45 $784
-------------------------------------------------------------------------------------------------------------------
DECEMBER 31, 1998
Common stocks $129 $44 $ 3 $170
Non-redeemable preferred stocks 345 10 7 348
-------------------------------------------------------------------------------------------------------------------
Total Equity Securities $474 $54 $10 $518
-------------------------------------------------------------------------------------------------------------------
</TABLE>
Proceeds from sales of equity securities were $100 million, $212 million
and $341 million in 1999, 1998 and 1997, respectively. Gross gains of $15
million, $30 million and $53 million and gross losses of $8 million, $24
million and $62 million in 1999, 1998 and 1997, respectively, were realized
on those sales.
Mortgage Loans and Real Estate Held For Sale
At December 31, 1999 and 1998, the Company's mortgage loan and real estate
held for sale portfolios consisted of the following:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------
($ in millions) 1999 1998
--------------------------------------------------------------------------------------------------
<S> <C> <C>
Current Mortgage Loans $2,228 $2,370
Underperforming Mortgage Loans 57 236
--------------------------------------------------------------------------------------------------
Total Mortgage Loans 2,285 2,606
--------------------------------------------------------------------------------------------------
Real Estate Held For Sale - Foreclosed 223 112
Real Estate Held For Sale - Investment 13 31
--------------------------------------------------------------------------------------------------
Total Real Estate 236 143
--------------------------------------------------------------------------------------------------
Total Mortgage Loans and Real Estate Held for Sale $2,521 $2,749
==================================================================================================
</TABLE>
Underperforming mortgage loans include delinquent mortgage loans, loans in
the process of foreclosure, foreclosed loans and loans modified at interest
rates below market.
F-29
<PAGE> 106
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
Aggregate annual maturities on mortgage loans at December 31, 1999 are as
follows:
<TABLE>
<CAPTION>
-----------------------------------------------------------------------
YEAR ENDING DECEMBER 31,
($ in millions)
-----------------------------------------------------------------------
<S> <C>
Past Maturity $ 39
2000 162
2001 172
2002 137
2003 131
2004 140
Thereafter 1,504
-----------------------------------------------------------------------
Total $2,285
=======================================================================
</TABLE>
Trading Securities
Trading securities of the Company are held in Tribeca.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------
($ in millions) 1999 1998
-------------------------------------------------------------------------------------------
TRADING SECURITIES OWNED
<S> <C> <C>
Convertible bond arbitrage $1,045 $754
Merger arbitrage 421 427
Other 212 5
-------------------------------------------------------------------------------------------
Total $1,678 $1,186
-------------------------------------------------------------------------------------------
TRADING SECURITIES SOLD NOT YET PURCHASED
Convertible bond arbitrage $799 $521
Merger arbitrage 299 352
-------------------------------------------------------------------------------------------
Total $1,098 $873
-------------------------------------------------------------------------------------------
</TABLE>
The Company's trading portfolio investments and related liabilities are
normally held for periods less than six months. Therefore, expected future
cash flows for these assets and liabilities are expected to be realized in
less than one year.
F-30
<PAGE> 107
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
Concentrations
At December 31, 1999 and 1998, the Company had an investment in Citigroup
Preferred Stock of $987 million. See Note 8.
The Company maintains a short-term investment pool for its insurance
affiliates in which the Company also participates. See Note 8.
The Company had concentrations of investments, primarily fixed maturities,
in the following industries:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------
($ in millions) 1999 1998
--------------------------------------------------------------------------
<S> <C> <C>
Banking $1,906 $2,131
Electric Utilities 1,653 1,513
Finance 1,571 1,346
--------------------------------------------------------------------------
</TABLE>
The Company held investments in Foreign Banks in the amount of $1,012
million and $997 million at December 31, 1999 and 1998, respectively, which
are included in the table above. Also, below investment grade assets
included in the preceding table were not significant.
Included in fixed maturities are below investment grade assets totaling
$2.2 billion and $2.1 billion at December 31, 1999 and 1998, respectively.
The Company defines its below investment grade assets as those securities
rated "Ba1" or below by external rating agencies, or the equivalent by
internal analysts when a public rating does not exist. Such assets include
publicly traded below investment grade bonds and certain other privately
issued bonds and notes that are classified as below investment grade.
Mortgage loan investments are relatively evenly dispersed throughout the
United States, with no significant holdings in any one state. Also, there
is no significant mortgage loan investment in a particular property type.
F-31
<PAGE> 108
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
The Company monitors creditworthiness of counterparties to all financial
instruments by using controls that include credit approvals, limits and
other monitoring procedures. Collateral for fixed maturities often includes
pledges of assets, including stock and other assets, guarantees and letters
of credit. The Company's underwriting standards with respect to new
mortgage loans generally require loan to value ratios of 75% or less at the
time of mortgage origination.
Non-Income Producing Investments
Investments included in the consolidated balance sheets that were
non-income producing for the preceding 12 months were insignificant.
Restructured Investments
The Company had mortgage loans and debt securities that were restructured
at below market terms at December 31, 1999 and 1998. The balances of the
restructured investments were insignificant. The new terms typically defer
a portion of contract interest payments to varying future periods. The
accrual of interest is suspended on all restructured assets, and interest
income is reported only as payment is received. Gross interest income on
restructured assets that would have been recorded in accordance with the
original terms of such loans was insignificant in 1999 and in 1998.
Interest on these assets, included in net investment income was
insignificant in 1999 and 1998.
13. DEPOSIT FUNDS AND RESERVES
At December 31, 1999, the Company had $27.0 billion of life and annuity
deposit funds and reserves. Of that total, $13.8 billion is not subject to
discretionary withdrawal based on contract terms. The remaining $13.2
billion is for life and annuity products that are subject to discretionary
withdrawal by the contractholder. Included in the amount that is subject to
discretionary withdrawal is $2.1 billion of liabilities that are
surrenderable with market value adjustments. Also included are an
additional $4.9 billion of life insurance and individual annuity
liabilities which are subject to discretionary withdrawals, and have an
average surrender charge of 4.6%. In the payout phase, these funds are
credited at significantly reduced interest rates. The remaining $6.2
billion of liabilities are surrenderable without charge. More than 12.7% of
these relate to individual life products. These risks would have to be
underwritten again if transferred to another carrier, which is considered a
significant deterrent against withdrawal by long-term policyholders.
Insurance liabilities that are surrendered or withdrawn are reduced by
outstanding policy loans and related accrued interest prior to payout.
F-32
<PAGE> 109
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
14. RECONCILIATION OF NET INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES
The following table reconciles net income to net cash provided by operating
activities:
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1999 1998 1997
($ in millions) ---- ---- ----
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Income From Continuing Operations $ 1,047 $ 902 $ 839
Adjustments to reconcile net income to net cash provided by
operating activities:
Realized gains (113) (149) (199)
Deferred federal income taxes 136 39 10
Amortization of deferred policy acquisition costs 315 275 252
Additions to deferred policy acquisition costs (686) (566) (471)
Investment income (221) (202) (32)
Premium balances (23) 23 (64)
Insurance reserves and accrued expenses 421 348 111
Other 99 205 380
---------------------------------------------------------------------------------------------------------------------
Net cash provided by operations $ 975 $ 875 $ 826
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
</TABLE>
15. NON-CASH INVESTING AND FINANCING ACTIVITIES
Significant non-cash investing and financing activities include the
acquisition of real estate through foreclosures of mortgage loans amounting
to $205 million in 1999, the transfer of Citigroup common stock to
Citigroup preferred stock valued at $987 million in 1998 and the conversion
of $119 million of real estate held for sale to other invested assets as a
joint venture in 1997.
F-33
<PAGE> 110
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
16. OPERATING SEGMENTS
The Company has two reportable business segments that are separately
managed due to differences in products, services, marketing strategy and
resource management. The business of each segment is maintained and
reported through separate legal entities within the Company. The management
groups of each segment report separately to the common ultimate parent,
Citigroup Inc.
The TRAVELERS LIFE & ANNUITY business segment consolidates primarily the
business of The Travelers Insurance Company and The Travelers Life and
Annuity Company. Travelers Life & Annuity offers individual annuity, group
annuity, individual life and long-term care products distributed by the
Company and TLAC under the Travelers name. Among the range of individual
products offered are fixed and variable deferred annuities, payout
annuities and term, universal and variable life and long-term care
insurance. The group products include institutional pensions, including
guaranteed investment contracts, payout annuities, group annuities to
employer-sponsored retirement and savings plans and structured finance
transactions.
The PRIMERICA LIFE business segment consolidates primarily the business of
Primerica Life Insurance Company, Primerica Life Insurance Company of
Canada and National Benefit Life Insurance Company. The Primerica Life
business segment offers individual life products, primarily term insurance,
to customers through a nationwide sales force of approximately 80,000 full
and part-time licensed Personal Financial Analysts.
The accounting policies of the segments are the same as those described in
the summary of significant accounting policies (see Note 1), except that
management also includes receipts on long-duration contracts (universal
life-type and investment contracts) as deposits along with premiums in
measuring business volume.
BUSINESS SEGMENT INFORMATION:
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
TRAVELERS LIFE & PRIMERICA LIFE
1999 ($ in millions) ANNUITY INSURANCE TOTAL
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Business Volume:
Premiums $ 666 $ 1,072 $ 1,738
Deposits 11,220 -- 11,220
------- ------- -------
Total business volume $11,886 $ 1,072 $12,958
Net investment income 2,249 257 2,506
Interest credited to contractholders 937 -- 937
Amortization of deferred acquisition costs 127 188 315
Federal income taxes on Operating Income 319 186 505
Operating Income (excludes realized gains or
losses and the related FIT) $ 619 $ 355 $ 974
Segment Assets $56,615 $ 6,916 $63,531
-----------------------------------------------------------------------------------------------------------------
</TABLE>
F-34
<PAGE> 111
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
TRAVELERS LIFE & PRIMERICA LIFE
1998 ($ in millions) ANNUITY INSURANCE TOTAL
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Business Volume:
Premiums $ 683 $1,057 $ 1,740
Deposits 7,693 -- 7,693
------- ------ -------
Total business volume $ 8,376 $1,057 $ 9,433
Net investment income 1,965 220 2,185
Interest credited to contractholders 876 -- 876
Amortization of deferred acquisition costs 88 187 275
Federal income taxes on Operating Income 260 170 430
Operating Income (excludes realized gains or
losses and the related FIT) $ 493 $ 312 $ 805
Segment Assets $49,646 $6,902 $56,548
-----------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
TRAVELERS LIFE PRIMERICA LIFE
1997 ($ in millions) & ANNUITY INSURANCE TOTAL
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Business Volume:
Premiums $ 548 $1,035 $ 1,583
Deposits 5,276 -- 5,276
------- ------ -------
Total business volume $ 5,824 $1,035 $ 6,859
Net investment income 1,836 201 2,037
Interest credited to contractholders 829 -- 829
Amortization of deferred acquisition costs 68 184 252
Federal income taxes on Operating Income 221 153 374
Operating Income (excludes realized gains or
losses and the related FIT) $ 427 $ 283 $ 710
Segment Assets $42,330 $7,110 $49,440
-----------------------------------------------------------------------------------------------------------------
</TABLE>
The amount of investments in equity method investees and total expenditures
for additions to long-lived assets other than financial instruments,
long-term customer relationships of a financial institution, mortgage and
other servicing rights, deferred policy acquisition costs, and deferred tax
assets, were not material.
F-35
<PAGE> 112
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------
BUSINESS SEGMENT RECONCILIATION:
($ in millions)
----------------------------------------------------------------------------------------------------------
REVENUES 1999 1998 1997
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Total business volume $12,958 $9,433 $6,859
Net investment income 2,506 2,185 2,037
Realized investment gains 113 149 199
Other revenues 521 440 354
Elimination of deposits (11,220) (7,693) (5,276)
----------------------------------------------------------------------------------------------------------
Total revenues $4,878 $4,514 $4,173
==========================================================================================================
OPERATING INCOME 1999 1998 1997
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Total operating income of business segments $ 974 $805 $710
Realized investment gains net of tax 73 97 129
----------------------------------------------------------------------------------------------------------
Income from continuing operations $1,047 $902 $839
==========================================================================================================
</TABLE>
<TABLE>
<CAPTION>
ASSETS 1999 1998 1997
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Total assets of business segments $63,531 $56,548 $49,440
==========================================================================================================
</TABLE>
<TABLE>
<CAPTION>
REVENUE BY PRODUCTS 1999 1998 1997
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Deferred Annuities $5,694 $4,198 $3,303
Group and Payout Annuities 7,275 5,326 3,737
Individual Life and Health Insurance 2,434 2,270 2,102
Other (a) 695 413 307
Elimination of deposits (11,220) (7,693) (5,276)
----------------------------------------------------------------------------------------------------------
Total Revenue $4,878 $4,514 $4,173
==========================================================================================================
</TABLE>
(a) Other represents revenue attributable to unallocated capital and run-off
businesses.
The Company's revenue was derived almost entirely from U.S. domestic
business. Revenue attributable to foreign countries was insignificant.
The Company had no transactions with a single customer representing 10% or
more of its revenue.
F-36
<PAGE> 113
TRAVELERS MARQUIS PORTFOLIOS
STATEMENT OF ADDITIONAL INFORMATION
SEPARATE ACCOUNT TM FOR VARIABLE ANNUITIES
Individual Variable Annuity Contract
issued by
The Travelers Insurance Company
One Tower Square
Hartford, Connecticut 06183
L-21254S May 2000
<PAGE> 114
PART C
Other Information
Item 24. Financial Statements and Exhibits
(a) The financial statements of the Registrant and the Report of Independent
Accountants thereto are contained in the Registrant's Annual Report and
are included in the Statement of Additional Information.
The financial statements of the Registrant include:
Statement of Assets and Liabilities as of December 31, 1999
Statement of Operations for the year ended December 31, 1999
Statement of Changes in Net Assets for the year ended December
31, 1999 and for the period July 20, 1998 (date operations
commenced) to December 31, 1998
Statement of Investments as of December 31, 1999
Notes to Financial Statements
The consolidated financial statements of The Travelers Insurance Company
and subsidiaries and the report of Independent Accountants, are
contained in the Statement of Additional Information. The consolidated
financial statements of The Travelers Insurance Company and
subsidiaries include:
Consolidated Statements of Income for the years ended December 31,
1999, 1998 and 1997
Consolidated Balance Sheets as of December 31, 1999 and 1998
Consolidated Statements of Changes in Retained Earnings and
Accumulated Other Changes in Equity from Non-Owner Sources for the
years ended December 31, 1999, 1998 and 1997
Consolidated Statements of Cash Flows for the years ended
December 31, 1999, 1998 and 1997
Notes to Consolidated Financial Statements
(b) Exhibits
1. Resolution of The Travelers Insurance Company Board of Directors
authorizing the establishment of the Registrant. (Incorporated
herein by reference to Exhibit 1 to the Registration Statement on
Form N-4, filed November 13, 1997.)
2. Not Applicable.
3(a). Distribution and Principal Underwriting Agreement among the
Registrant, The Travelers Insurance Company and CFBDS, Inc.
(Incorporated herein by reference to Exhibit 3(a) to Pre-Effective
Amendment No. 1 to the Registration Statement on Form N-4, File No.
333-60227 filed November 9, 1998)
3(b). Selling Agreement. (Incorporated herein by reference to Exhibit
3(b) to the Registration Statement on Form N-4, filed May 23,
1997.) (Incorporated herein by reference to Exhibit 3(b) to
Pre-Effective Amendment No. 1 to the Registration Statement on Form
N-4, File No. 333-60227 filed November 9, 1998)
4. Variable Annuity Contract. (Incorporated herein by reference to
Exhibit 4 to Pre-Effective Amendment No. 1 to the Registration
Statement on Form N-4, filed June 10, 1998.)
5. Application. (Incorporated herein by reference to Exhibit 5 to
Pre-Effective Amendment No. 1 to the Registration Statement on Form
N-4, filed June 10, 1998.)
<PAGE> 115
6(a). Charter of The Travelers Insurance Company, as amended on October
19, 1994. (Incorporated herein by reference to Exhibit 6(a) to the
Registration Statement on Form N-4, filed November 13, 1997.)
6(b). By-Laws of The Travelers Insurance Company, as amended on October
20, 1994. (Incorporated herein by reference to Exhibit 6(b) to the
Registration Statement on Form N-4, filed November 13, 1997.)
9. Opinion of Counsel as to the legality of securities being
registered. (Incorporated herein by reference to Exhibit 9 to the
Registration Statement on Form N-4, filed November 13, 1997.)
10. Consent of KPMG LLP, Independent Certified Public Accountants.
13. Computation of Total Return Calculations - Standardized and
Non-Standardized. (Incorporated herein by reference to Exhibit 13
to Pre-Effective Amendment No. 1 to the Registration Statement on
Form N-4, filed June 10, 1998.)
15. Powers of Attorney authorizing Ernest J. Wright or Kathleen A.
McGah as signatory for Michael A. Carpenter, Jay S. Benet, George
C. Kokulis, Robert I. Lipp, Ian R. Stuart, Katherine M. Sullivan
and Marc P. Weill. (Incorporated herein by reference to Exhibit 15
to the Registration Statement on Form N-4, filed November 13,
1997.)
15(b). Powers of Attorney authorizing Ernest J. Wright or Kathleen A.
McGah as signatory for George C. Kokulis, Katherine M. Sullivan and
Glenn D. Lammey.
Item 25. Directors and Officers of the Depositor
<TABLE>
<CAPTION>
Name and Principal Positions and Offices
Business Address with Insurance Company
- ---------------- ----------------------
<S> <C>
George C. Kokulis* Director, President and Chief Executive Officer
Katherine M. Sullivan* Director and Senior Vice President
Marc P. Weill** Director and Senior Vice President
Mary Jean Thornton* Executive Vice President and
Chief Information Officer
Stuart Baritz*** Senior Vice President
Jay S. Fishman* Senior Vice President
Barry Jacobson* Senior Vice President
Russell H. Johnson* Senior Vice President
Marla Berman Lewitus Senior Vice President and
General Counsel
Brendan Lynch* Senior Vice President
Warren H. May* Senior Vice President
Kathleen Preston* Senior Vice President
David A. Tyson* Senior Vice President
F. Denney Voss* Senior Vice President
Glenn D. Lammey* Chief Financial Officer, Chief
Accounting Officer and Controller
David A. Golino* Vice President
Donald R. Munson, Jr.* Vice President
Anthony Cocolla Second Vice President
Scott R. Hansen Second Vice President
Linn K. Richardson* Second Vice President and Actuary
</TABLE>
<PAGE> 116
<TABLE>
<S> <C>
Paul Weissman Actuary
Ernest J. Wright* Vice President and Secretary
Kathleen A. McGah* Assistant Secretary and
Deputy General Counsel
Principal Business Address:
* The Travelers Insurance Company ** Citigroup Inc.
One Tower Square 388 Greenwich Street
Hartford, CT 06183 New York, N.Y. 10013
*** Travelers Portfolio Group
1345 Avenue of the Americas
New York, NY 10105
</TABLE>
Item 26. Persons Controlled by or Under Common Control with the Depositor or
Registrant
Exhibit 16
Item 27. Number of Contract Owners
As of February 29, 2000, 195 contract owners held qualified and non-qualified
contracts offered by the Registrant.
Item 28. Indemnification
Sections 33-770 to 33-778, inclusive of the Connecticut General Statutes
("C.G.S.") regarding indemnification of directors and officers of Connecticut
corporations provides in general that Connecticut corporations shall indemnify
their officers, directors and certain other defined individuals against
judgments, fines, penalties, amounts paid in settlement and reasonable expenses
actually incurred in connection with proceedings against the corporation. The
corporation's obligation to provide such indemnification generally does not
apply unless (1) the individual is wholly successful on the merits in the
defense of any such proceeding; or (2) a determination is made (by persons
specified in the statute) that the individual acted in good faith and in the
best interests of the corporation and in all other cases, his conduct was at
least not opposed to the best interests of the corporation, and in a criminal
case he had no reasonable cause to believe his conduct was unlawful; or (3) the
court, upon application by the individual, determines in view of all of the
circumstances that such person is fairly and reasonably entitled to be
indemnified, and then for such amount as the court shall determine. With respect
to proceedings brought by or in the right of the corporation, the statute
provides that the corporation shall indemnify its officers, directors and
certain other defined individuals, against reasonable expenses actually incurred
by them in connection with such proceedings, subject to certain limitations.
Citigroup Inc. also provides liability insurance for its directors and officers
and the directors and officers of its subsidiaries, including the Registrant.
This insurance provides for coverage against loss from claims made against
directors and officers in their capacity as such, including, subject to certain
exceptions, liabilities under the federal securities laws.
<PAGE> 117
Rule 484 Undertaking
Insofar as indemnification for liability arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
Item 29. Principal Underwriter
(a) CFBDS, Inc.
21 Milk Street
Boston, MA 02109
CFBDS, Inc. also serves as principal underwriter for the following :
(a) CFBDS, the Registrant's Distributor, is also the distributor for CitiFundsSM
International Growth & Income Portfolio, CitiFundsSM International Growth
Portfolio, CitiFundsSM U.S. Treasury Reserves, CitiFundsSM Cash Reserves,
CitiFundsSM Premium U.S. Treasury Reserves, CitiFundsSM Premium Liquid Reserves,
CitiFundsSM Institutional U.S. Treasury Reserves, CitiFundsSM Institutional
Liquid Reserves, CitiFundsSM Institutional Cash Reserves, CitiFundsSM Tax Free
Reserves, CitiFundsSM Institutional Tax Free Reserves, CitiFundsSM California
Tax Free Reserves, CitiFundsSM Connecticut Tax Free Reserves, CitiFundsSM New
York Tax Free Reserves, CitiFundsSM New York Tax Free Income Portfolio,
CitiFundsSM National Tax Free Income Portfolio, CitiFundsSM California Tax Free
Income Portfolio, CitiFundsSM Intermediate Income Portfolio, CitiFundsSM
Balanced Portfolio, CitiFundsSM Small Cap Value Portfolio, CitiFundsSM Growth &
Income Portfolio, CitiFundsSM Large Cap Growth Portfolio, CitiFundsSM Small Cap
Growth Portfolio, CitiSelect VIP Folio 200, CitiSelect VIP Folio 300, CitiSelect
VIP Folio 400, CitiSelect VIP Folio 500, CitiFundsSM Small Cap Growth VIP
Portfolio, CitiSelect Folio 200, CitiSelect Folio 300, CitiSelect Folio 400, and
CitiSelect Folio 500. CFBDS is also the placement agent for Large Cap Value
Portfolio, Small Cap Value Portfolio, International Portfolio, Foreign Bond
Portfolio, Intermediate Income Portfolio, Short-Term Portfolio, Growth & Income
Portfolio, U.S. Fixed Income Portfolio, Large Cap Growth Portfolio, Small Cap
Growth Portfolio, International Equity Portfolio, Balanced Portfolio, Government
Income Portfolio, Tax Free Reserves Portfolio, Cash Reserves Portfolio and U.S.
Treasury Reserves Portfolio. CFBDS also serves as the distributor for the
following funds: The Travelers Fund U for Variable Annuities, The Travelers Fund
VA for Variable Annuities, The Travelers Fund BD for Variable Annuities, The
Travelers Fund BD II for Variable Annuities, The Travelers Fund BD III for
Variable Annuities, The Travelers Fund BD IV for Variable Annuities, The
Travelers Fund ABD II for Variable Annuities, The Travelers Separate Account PF
for Variable Annuities, The Travelers Separate Account PF II for Variable
Annuities, The Travelers Separate Account QP for Variable Annuities, The
Travelers Separate Account TM for Variable Annuities, The Travelers Separate
Account TM II for Variable Annuities, The Travelers Separate Account Five for
Variable Annuities, The Travelers Separate Account Six for Variable Annuities,
The Travelers Separate Account Seven for Variable Annuities, The Travelers
Separate Account Eight for Variable Annuities, The Travelers Fund UL for
Variable Life Insurance, The Travelers Fund UL II for Variable Life Insurance,
The Travelers Fund UL III for Variable Life Insurance, The Travelers Variable
Life Insurance Separate Account One, The Travelers Variable Life Insurance
Separate Account Two, The Travelers Variable Life Insurance Separate Account
Three, The Travelers Variable Life Insurance Separate Account Four, The
Travelers Separate Account MGA, The Travelers Separate Account MGA
<PAGE> 118
II, The Travelers Growth and Income Stock Account for Variable Annuities, The
Travelers Quality Bond Account for Variable Annuities, The Travelers Money
Market Account for Variable Annuities, The Travelers Timed Growth and Income
Stock Account for Variable Annuities, The Travelers Timed Short-Term Bond
Account for Variable Annuities, The Travelers Timed Aggressive Stock Account for
Variable Annuities, The Travelers Timed Bond Account for Variable Annuities,
Emerging Growth Fund, Government Fund, Growth and Income Fund, International
Equity Fund, Municipal Fund, Balanced Investments, Emerging Markets Equity
Investments, Government Money Investments, High Yield Investments, Intermediate
Fixed Income Investments, International Equity Investments, International Fixed
Income Investments, Large Capitalization Growth Investments, Large
Capitalization Value Equity Investments, Long-Term Bond Investments, Mortgage
Backed Investments, Municipal Bond Investments, Small Capitalization Growth
Investments, Small Capitalization Value Equity Investments, Appreciation
Portfolio, Diversified Strategic Income Portfolio, Emerging Growth Portfolio,
Equity Income Portfolio, Equity Index Portfolio, Growth & Income Portfolio,
Intermediate High Grade Portfolio, International Equity Portfolio, Money Market
Portfolio, Total Return Portfolio, Smith Barney Adjustable Rate Government
Income Fund, Smith Barney Aggressive Growth Fund Inc., Smith Barney Appreciation
Fund, Smith Barney Arizona Municipals Fund Inc., Smith Barney California
Municipals Fund Inc., Balanced Portfolio, Conservative Portfolio, Growth
Portfolio, High Growth Portfolio, Income Portfolio, Global Portfolio, Select
Balanced Portfolio, Select Conservative Portfolio, Select Growth Portfolio,
Select High Growth Portfolio, Select Income Portfolio, Concert Social Awareness
Fund, Smith Barney Large Cap Blend Fund, Smith Barney Fundamental Value Fund
Inc., Large Cap Value Fund, Short-Term High Grade Bond Fund, U.S. Government
Securities Fund, Smith Barney Balanced Fund, Smith Barney Convertible Fund,
Smith Barney Diversified Strategic Income Fund, Smith Barney Exchange Reserve
Fund, Smith Barney High Income Fund, Smith Barney Municipal High Income Fund,
Smith Barney Premium Total Return Fund, Smith Barney Total Return Bond Fund,
Cash Portfolio, Government Portfolio, Municipal Portfolio, Concert Peachtree
Growth Fund, Smith Barney Contrarian Fund, Smith Barney Government Securities
Fund, Smith Barney Hansberger Global Small Cap Value Fund, Smith Barney
Hansberger Global Value Fund, Smith Barney Investment Grade Bond Fund, Smith
Barney Special Equities Fund, Smith Barney Intermediate Maturity California
Municipals Fund, Smith Barney Intermediate Maturity New York Municipals Fund,
Smith Barney Large Capitalization Growth Fund, Smith Barney S&P 500 Index Fund,
Smith Barney Mid Cap Blend Fund, Smith Barney Managed Governments Fund Inc.,
Smith Barney Managed Municipals Fund Inc., Smith Barney Massachusetts Municipals
Fund, Cash Portfolio, Government Portfolio, Retirement Portfolio, California
Money Market Portfolio, Florida Portfolio, Georgia Portfolio, Limited Term
Portfolio, New York Money Market Portfolio, New York Portfolio, Pennsylvania
Portfolio, Smith Barney Municipal Money Market Fund, Inc., Smith Barney Natural
Resources Fund Inc., Smith Barney New Jersey Municipals Fund Inc., Smith Barney
Oregon Municipals Fund, Zeros Plus Emerging Growth Series 2000, Smith Barney
Security and Growth Fund, Smith Barney Small Cap Blend Fund, Inc., Smith Barney
Telecommunications Income Fund, Income and Growth Portfolio, Reserve Account
Portfolio, U.S. Government/High Quality Securities Portfolio, Emerging Markets
Portfolio, European Portfolio, Global Government Bond Portfolio, International
Balanced Portfolio, International Equity Portfolio, Pacific Portfolio, AIM
Capital Appreciation Portfolio, Alliance Growth Portfolio, GT Global Strategic
Income Portfolio, MFS Total Return Portfolio, Putnam Diversified Income
Portfolio, Smith Barney High Income Portfolio, Smith Barney Large Cap Value
Portfolio, Smith Barney International Equity Portfolio, Smith Barney Large
Capitalization Growth Portfolio, Smith Barney Money Market Portfolio, Smith
Barney Pacific Basin Portfolio, TBC Managed Income Portfolio, Van Kampen
American Capital Enterprise Portfolio, Centurion Tax-Managed U.S. Equity Fund,
Centurion Tax-Managed International Equity Fund, Centurion U.S. Protection Fund,
Centurion International Protection Fund, Global High-Yield Bond Fund,
International Equity Fund, Emerging Opportunities Fund, Core Equity Fund,
Long-Term Bond Fund, Global Dimensions Fund L.P., Citicorp Private Equity L.P.,
AIM V.I. Capital Appreciation Fund, AIM V.I. Government Series Fund, AIM V.I.
Growth Fund, AIM V.I. International Equity Fund, AIM V.I. Value Fund, Fidelity
VIP Growth Portfolio, Fidelity VIP High Income Portfolio, Fidelity VIP Equity
Income Portfolio, Fidelity VIP Overseas Portfolio, Fidelity VIP II Contrafund
Portfolio, Fidelity VIP II Index 500 Portfolio, MFS World Government Series, MFS
Money Market Series, MFS Bond Series, MFS Total Return Series, MFS Research
Series, MFS Emerging Growth Series, Salomon Brothers Institutional Money Market
Fund, Salomon Brothers Cash
<PAGE> 119
Management Fund, Salomon Brothers New York Municipal Money Market Fund, Salomon
Brothers National Intermediate Municipal Fund, Salomon Brothers U.S. Government
Income Fund, Salomon Brothers High Yield Bond Fund, Salomon Brothers Strategic
Bond Fund, Salomon Brothers Total Return Fund, Salomon Brothers Asia Growth
Fund, Salomon Brothers Capital Fund Inc, Salomon Brothers Investors Fund Inc,
Salomon Brothers Opportunity Fund Inc, Salomon Brothers Institutional High Yield
Bond Fund, Salomon Brothers Institutional Emerging Markets Debt Fund, Salomon
Brothers Variable Investors Fund, Salomon Brothers Variable Capital Fund,
Salomon Brothers Variable Total Return Fund, Salomon Brothers Variable High
Yield Bond Fund, Salomon Brothers Variable Strategic Bond Fund, Salomon Brothers
Variable U.S. Government Income Fund, and Salomon Brothers Variable Asia Growth
Fund.
(b) The information required by this Item 29 with respect to each director
and officer of CFBDS, Inc. is incorporated by reference to Schedule A of Form BD
filed by CFBDS pursuant to the Securities and Exchange Act of 1934 (File No.
8-32417).
(c) Not Applicable
Item 30. Location of Accounts and Records
(1) The Travelers Insurance Company
One Tower Square
Hartford, Connecticut 06183
Item 31. Management Services
Not Applicable.
Item 32. Undertakings
The undersigned Registrant hereby undertakes:
(a) To file a post-effective amendment to this registration statement as
frequently as is necessary to ensure that the audited financial
statements in the registration statement are never more than sixteen
months old for so long as payments under the variable annuity
contracts may be accepted;
(b) To include either (1) as part of any application to purchase a
contract offered by the prospectus, a space that an applicant can
check to request a Statement of Additional Information, or (2) a post
card or similar written communication affixed to or included in the
prospectus that the applicant can remove to send for a Statement of
Additional Information; and
(c) To deliver any Statement of Additional Information and any financial
statements required to be made available under this Form N-4 promptly
upon written or oral request.
The Company hereby represents:
(a). That the aggregate charges under the Contracts of the Registrant
described herein are reasonable in relation to the services rendered,
the expenses expected to be incurred, and the risks assumed by the
Company.
<PAGE> 120
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act of
1940, the Registrant certifies that it meets the requirements of Securities Act
Rule 485(b) for effectiveness of this amendment to this registration statement
and has caused this amendment to this registration statement to be signed on its
behalf, in the City of Hartford, and State of Connecticut, on this 12th day of
April, 2000.
THE TRAVELERS SEPARATE ACCOUNT TM FOR VARIABLE ANNUITIES
(Registrant)
THE TRAVELERS INSURANCE COMPANY
(Depositor)
By:*GLENN D. LAMMEY
---------------------------------------------
Glenn D. Lammey, Chief Financial Officer,
Chief Accounting Officer and Controller
As required by the Securities Act of 1933, this registration statement has been
signed by the following persons in the capacities indicated on the 12th day of
April 2000.
<TABLE>
<S> <C>
*GEORGE C. KOKULIS Director, President and Chief Executive Officer
- --------------------------------- (Principal Executive Officer)
(George C. Kokulis)
*KATHERINE M. SULLIVAN Director
- ---------------------------------
(Katherine M. Sullivan)
*MARC P. WEILL Director
- ---------------------------------
(Marc P. Weill)
</TABLE>
*By: /s/Ernest J. Wright, Attorney-in-Fact
<PAGE> 121
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
No. Description Method of Filing
----------- ----------------
<S> <C> <C>
10 Consent of KPMG LLP, Independent Electronically
Certified Public Accountants.
15(b) Powers of Attorney authorizing Ernest J. Wright or Electronically
Kathleen A. McGah as signatory for George C. Kokulis,
Katherine M. Sullivan and Glenn D. Lammey.
16 Item 26. Persons Controlled by or Under Common Control Electronically
with the Depositor or Registrant
</TABLE>
<PAGE> 1
Exhibit 10
Consent of Independent Certified Public Accountants
Board of Directors
The Travelers Insurance Company
We consent to the use of our reports included herein and to the reference to our
firm as experts under the heading "Independent Accountants."
/s/KPMG LLP
Hartford, Connecticut
April 11, 2000
<PAGE> 1
Exhibit 15(b)
THE TRAVELERS SEPARATE ACCOUNT TM FOR VARIABLE ANNUITIES
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That I, GEORGE C. KOKULIS of Simsbury, Connecticut, Director,
President and Chief Executive Officer of The Travelers Insurance Company
(hereafter the "Company"), do hereby make, constitute and appoint ERNEST J.
WRIGHT, Secretary of said Company, and KATHLEEN A. McGAH, Assistant Secretary of
said Company, or either one of them acting alone, my true and lawful
attorney-in-fact, for me, and in my name, place and stead, to sign registration
statements on behalf of said Company on Form N-4 or other appropriate form under
the Securities Act of 1933 and the Investment Company Act of 1940 for The
Travelers Separate Account TM for Variable Annuities, a separate account of the
Company dedicated specifically to the funding of variable annuity contracts to
be offered by said Company, and further, to sign any and all amendments thereto,
including post-effective amendments, that may be filed by the Company on behalf
of said registrant.
IN WITNESS WHEREOF, I have hereunto set my hand this 10th day of
April 2000.
/s/George C. Kokulis
Director, President and Chief Executive Officer
The Travelers Insurance Company
<PAGE> 2
THE TRAVELERS SEPARATE ACCOUNT TM FOR VARIABLE ANNUITIES
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That I, KATHERINE M. SULLIVAN of Longmeadow, Massachusetts, a
Director of The Travelers Insurance Company (hereafter the "Company"), do hereby
make, constitute and appoint ERNEST J. WRIGHT, Secretary of said Company, and
KATHLEEN A. McGAH, Assistant Secretary of said Company, or either one of them
acting alone, my true and lawful attorney-in-fact, for me, and in my name, place
and stead, to sign registration statements on behalf of said Company on Form N-4
or other appropriate form under the Securities Act of 1933 and the Investment
Company Act of 1940 for The Travelers Separate Account TM for Variable
Annuities, a separate account of the Company dedicated specifically to the
funding of variable annuity contracts to be offered by said Company, and
further, to sign any and all amendments thereto, including post-effective
amendments, that may be filed by the Company on behalf of said registrant.
IN WITNESS WHEREOF, I have hereunto set my hand this 31st day of
March 2000.
/s/Katherine M. Sullivan
Director
The Travelers Insurance Company
<PAGE> 3
THE TRAVELERS SEPARATE ACCOUNT TM FOR VARIABLE ANNUITIES
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That I, GLENN D. LAMMEY of Simsbury, Connecticut, Chief Financial
Officer, Chief Accounting Officer and Controller of The Travelers Insurance
Company (hereafter the "Company"), do hereby make, constitute and appoint ERNEST
J. WRIGHT, Secretary of said Company, and KATHLEEN A. McGAH, Assistant Secretary
of said Company, or either one of them acting alone, my true and lawful
attorney-in-fact, for me, and in my name, place and stead, to sign registration
statements on behalf of said Company on Form N-4 or other appropriate form under
the Securities Act of 1933 and the Investment Company Act of 1940 for The
Travelers Separate Account TM for Variable Annuities, a separate account of the
Company dedicated specifically to the funding of variable annuity contracts to
be offered by said Company, and further, to sign any and all amendments thereto,
including post-effective amendments, that may be filed by the Company on behalf
of said registrant.
IN WITNESS WHEREOF, I have hereunto set my hand this 31st day of
March 2000.
/s/Glenn D. Lammey
Chief Financial Officer,
Chief Accounting Officer and Controller
The Travelers Insurance Company
<PAGE> 1
EXHIBIT 16
OWNERSHIP OF THE TRAVELERS INSURANCE COMPANY
<TABLE>
<CAPTION>
PLACE OF
INCORPORATION OWNERSHIP PRINCIPAL BUSINESS
<S> <C> <C>
Citigroup Inc. Delaware Publicly Held ----------
Associated Madison Companies Inc. Delaware 100.00% ----------
PFS Services, Inc. Georgia 100.00% ----------
The Travelers Insurance Group, Inc. Connecticut 100.00% ----------
The Travelers Insurance Company Connecticut 100.00% Insurance
</TABLE>
<TABLE>
<CAPTION>
PLACE OF %VOTING
1 2 3 4 5 6 7 8 9 10 11 12 13 INCORPORATION DIRECT TOTAL CTL NOTE CO#
<S> <C> <C> <C> <C> <C>
AC HEALTH VENTURES, INC. Delaware 100 100 Y 6005
AMCO BIOTECH, INC. Delaware 100 100 Y 6016
ASSOCIATED MADISON COMPANIES, INC. Delaware 100 100 Y 6029
ERISA CORPORATION New York 100 100 Y 6211
MID-AMERICA INSURANCE SERVICES, INC. Georgia 100 100 Y 6320
NATIONAL MARKETING CORPORATION Pennsylvania 100 100 Y 6333
PFS SERVICES, INC. Georgia 100 100 Y 6374
PFS SHAREHOLDER SERVICES Georgia 50 100 Y 6375
THE TRAVELERS INSURANCE GROUP INC. Connecticut 100 100 Y 6772
CONSTITUTION PLAZA, INC. Connecticut 100 100 Y 6164
LA METROPOLE S.A. Belgium 98.8 98.83 Y 6300
THE PROSPECT COMPANY Delaware 100 100 Y 6757
ONE TWENTY FIVE HIGH STREET LIMITED PARTNERSHIP Massachusetts 0.5 0.5 Y (1) 6344
PANTHER VALLEY, INC. New Jersey 100 100 Y 6350
THE TRAVELERS ASSET FUNDING CORPORATION Connecticut 100 100 Y 6761
THE TRAVELERS INSURANCE COMPANY Connecticut 100 100 Y 6770
440 SOUTH LASALLE LLC Delaware 100 100 Y 6003
AMERICAN FINANCIAL LIFE INSURANCE COMPANY Texas 100 100 Y 6017
</TABLE>
1 2 3 4 5 6 7 8 9 10 11 12 13
<TABLE>
<S> <C>
FOOTNOTES: (1)MANAGERIAL CONTROL; (2)INTEREST >=25% OF A VOTING CLASS; Page 1
(3)TOTAL EQUITY >50%; (4)SUBSIDIARY OF COMPANY DEEMED TO BE CONTROLLED;
(5)RELATED CONTRACT DEEMED TO GIVE CITI CONTROL; (6)SPONSORED/ADVISED FUND;
(7)FEDERAL RESERVE CONDITION OF APPROVAL
</TABLE>
<PAGE> 2
<TABLE>
<S> <C> <C> <C> <C> <C>
CARLTON ARMS OF BRADENTON Florida 50 50 Y (1) 6055
CREST FUNDING PARTNERS, L.P. Delaware 25 50 Y 6183
CRIPPLE CREEK VENTURE PARTNER II L.P. Colorado 29.1 64.6 Y 6912
GREENWICH STREET CAPITAL PARTNERS, L.P. Delaware 29.4 31.2 Y 6247
GREENWICH STREET INVESTMENTS, L.L.C. Delaware 100 100 Y 6244
GREENWICH STREET CAPITAL OFFSHORE FUND, LTD. British Virgin Islands 100 100 Y 7632
GREENWICH STREET INVESTMENTS, L.P. New York 1.46 1.46 Y (1) 6251
GREENWICH STREET CAPITAL OFFSHORE FUND, LTD. British Virgin Islands 0 100 Y 7632
GREENWICH STREET CAPITAL PARTNERS, L.P. Delaware 0 31.2 Y 6247
GRIFFITH PARTNERS, L.P. Maryland 16.4 37.4 Y 6253
HOLLOW CREEK, L.L.C. Connecticut 100 100 Y 6270
STATION HILL, L.L.C. Connecticut 75 75 Y 6894
MIDKIFF DEVELOPMENT DRILLING PROGRAM, L.P. Texas 8.8 99 Y 6322
OAKBROOK HOTEL VENTURE Illinois 100 100 Y 6343
PRIMERICA LIFE INSURANCE COMPANY Massachusetts 100 100 Y 6445
GREENWICH STREET CAPITAL PARTNERS, L.P. Delaware 1.8 31.2 Y 6247
NATIONAL BENEFIT LIFE INSURANCE COMPANY New York 100 100 Y 6331
PRIMERICA FINANCIAL SERVICES (CANADA) LTD. Canada 100 100 Y 6419
PFSL INVESTMENTS CANADA LTD. Canada 100 100 Y 6377
PRIMERICA LIFE INSURANCE COMPANY OF CANADA Canada 100 100 Y 6446
PRIMERICA CLIENT SERVICES INC. <CANADA> Canada 100 100 Y 6412
PRIMERICA FINANCIAL SERVICES LTD. Canada 100 100 Y 6435
PROSPECT/NISSEI 190 LIMITED PARTNERSHIP Illinois 0.5 0.5 Y (1) 6451
190 S. LASALLE ASSOCIATES LIMITED PARTNERSHIP Illinois 99 100 Y 6001
TRAVELERS/NLI 190 SOUTH LASALLE STREET, L.L.C. Delaware 1 50.5 Y 7628
190 S. LASALLE ASSOCIATES LIMITED PARTNERSHIP Illinois 1 100 Y 6001
R-H/TRAVELERS, L.P. Delaware 0 100 Y 6460
R-H CAPITAL PARTNERS, L.P. Delaware 75.9 75.94 Y 6458
</TABLE>
1 2 3 4 5 6 7 8 9 10 11 12 13
<TABLE>
<S> <C>
FOOTNOTES: (1)MANAGERIAL CONTROL; (2)INTEREST >=25% OF A VOTING CLASS; Page 2
(3)TOTAL EQUITY >50%; (4)SUBSIDIARY OF COMPANY DEEMED TO BE CONTROLLED;
(5)RELATED CONTRACT DEEMED TO GIVE CITI CONTROL; (6)SPONSORED/ADVISED FUND;
(7)FEDERAL RESERVE CONDITION OF APPROVAL
</TABLE>
<PAGE> 3
<TABLE>
<S> <C> <C> <C> <C> <C>
RYAN/TRAVELERS KIERLAND, LLC Delaware 75 75 Y 7118
SALOMON BROTHERS CAPITAL STRUCTURE ARBITRAGE FUND I, L.P. New York 5.27 28.51 Y 6486
SSB PRIVATE SELECTIONS, LLC Delaware 45 100 Y 6724
SALOMON SMITH BARNEY PRIVATE SELECTION FUND I, LLC New York 24.4 24.46 Y (1) 6564
THE PLAZA CORPORATION Connecticut 100 100 Y 6755
KEEPER HOLDINGS LLC Delaware 81.1 100 Y 7627
THE COPELAND COMPANIES (HOLDING COMPANY) New Jersey 100 100 Y 6750
AMERICAN ODYSSEY FUNDS MANAGEMENT, INC. New Jersey 100 100 Y 6019
COPELAND ASSOCIATES, INC. Delaware 100 100 Y 6171
COPELAND ASSOCIATES AGENCY OF OHIO, INC. Ohio 100 100 Y 6167
COPELAND ASSOCIATES OF ALABAMA, INC. Alabama 100 100 Y 6168
COPELAND ASSOCIATES OF MONTANA, INC. Montana 100 100 Y 6169
COPELAND ASSOCIATES OF NEVADA, INC. Nevada 100 100 Y 6170
COPELAND BENEFITS MANAGEMENT COMPANY New Jersey 100 100 Y 6172
COPELAND EQUITIES, INC. New Jersey 100 100 Y 6173
DONALD F. SMITH & ASSOCIATES New Jersey 100 100 Y 6200
H.C. COPELAND ASSOCIATES, INC. OF MASSACHUSETTS Massachusetts 100 100 Y 6264
H.C. COPELAND AND ASSOCIATES, INC. OF TEXAS Texas 100 100 Y 6263
SMITH ANNUITY SERVICES, INC. New Jersey 100 100 Y 6652
COPELAND FINANCIAL SERVICES, INC. New Jersey 100 100 Y 6174
COPELAND MORTGAGE SERVICES, INC. New Jersey 100 100 Y 6175
TRAVELERS/NET PLUS INSURANCE AGENCY, INC. Massachusetts 100 100 Y 6854
TRAVELERS/NET PLUS, INC. Connecticut 100 100 Y 6855
TRAVELERS/NET PLUS AGENCY OF OHIO, INC. Ohio 100 100 Y 6853
THREE PARKWAY INC. - I Pennsylvania 100 100 Y 6786
THREE PARKWAY INC. - II Pennsylvania 100 100 Y 6787
THREE PARKWAY INC. - III Pennsylvania 100 100 Y 6788
TOWER SQUARE SECURITIES, INC. Connecticut 100 100 Y 6798
</TABLE>
1 2 3 4 5 6 7 8 9 10 11 12 13
<TABLE>
<S> <C>
FOOTNOTES: (1)MANAGERIAL CONTROL; (2)INTEREST >=25% OF A VOTING CLASS; Page 3
(3)TOTAL EQUITY >50%; (4)SUBSIDIARY OF COMPANY DEEMED TO BE CONTROLLED;
(5)RELATED CONTRACT DEEMED TO GIVE CITI CONTROL; (6)SPONSORED/ADVISED FUND;
(7)FEDERAL RESERVE CONDITION OF APPROVAL
</TABLE>
<PAGE> 4
<TABLE>
<S> <C> <C> <C> <C> <C>
TOWER SQUARE SECURITIES INSURANCE AGENCY OF ALABAMA, INC. Alabama 100 100 Y 6793
TOWER SQUARE SECURITIES INSURANCE AGENCY OF MASSACHUSETTS, INC. Massachusetts 100 100 Y 6794
TOWER SQUARE SECURITIES INSURANCE AGENCY OF NEW MEXICO, INC. New Mexico 100 100 Y 6795
TOWER SQUARE SECURITIES INSURANCE AGENCY OF OHIO, INC. Ohio 99 99 Y 6796
TOWER SQUARE SECURITIES INSURANCE AGENCY OF TEXAS, INC. Texas 100 100 Y 6797
TRAVELERS ASSET MANAGEMENT INTERNATIONAL CORPORATION New York 100 100 Y 6806
TRAVELERS DISTRIBUTION COMPANY Delaware 100 100 Y 6818
TRAVELERS INVESTMENT ADVISERS, INC. Delaware 100 100 Y 6834
THE TRAVELERS LIFE AND ANNUITY COMPANY Connecticut 100 100 Y 6774
CONCORD PARTNERS II L.P. New York 31 31 Y 6162
CRIPPLE CREEK VENTURE PARTNER II L.P. Colorado 3.2 64.6 Y 6912
GRIFFITH PARTNERS, L.P. Maryland 1.8 37.4 Y 6253
MIDKIFF DEVELOPMENT DRILLING PROGRAM, L.P. Texas 34.3 99 Y 6322
SSB PRIVATE SELECTIONS, LLC Delaware 5 100 Y 6724
TRAVELERS ANNUITY UK INVESTMENTS, LLC Delaware 100 100 Y 6805
TRAVELERS/NISSEI 190 S. LASALLE COMPANY Illinois 50 50 Y 6856
TRIBECA DISTRESSED SECURITIES, L.L.C. Delaware 4 100 Y 7097
TRIBECA INVESTMENTS, L.L.C. Delaware 4.15 100 Y 6858
WT EQUIPMENT PARTNERS LP Delaware 6.8 50 Y 6354
YORKTOWN ENERGY PARTNERS II L.P. New York 1.3 26.2 Y 6885
YORKTOWN ENERGY PARTNERS, L.P. Connecticut 4.8 31.8 Y 6887
TIMCO ALPHA I, LLC Connecticut 9.95 100 Y 6557
TISHMAN SPEYER/TRAVELERS ASSOCIATES III, L.L.C. Delaware 50 50 Y 7098
TISHMAN SPEYER/TRAVELERS REAL ESTATE VENTURE III, L.L.C. Delaware 1 49.28 Y 7099
TISHMAN SPEYER/TRAVELERS REAL ESTATE VENTURE III, L.L.C. Delaware 48.2 49.28 Y 7099
TOWERMARK OF NEW YORK New York 50 50 Y 6799
TRAVELERS EUROPEAN INVESTMENTS LLC Connecticut 100 100 Y 7640
TRAVELERS GROUP INVESTMENT MANAGEMENT, LLC Delaware 50 100 Y 6825
</TABLE>
1 2 3 4 5 6 7 8 9 10 11 12 13
<TABLE>
<S> <C>
FOOTNOTES: (1)MANAGERIAL CONTROL; (2)INTEREST >=25% OF A VOTING CLASS; Page 4
(3)TOTAL EQUITY >50%; (4)SUBSIDIARY OF COMPANY DEEMED TO BE CONTROLLED;
(5)RELATED CONTRACT DEEMED TO GIVE CITI CONTROL; (6)SPONSORED/ADVISED FUND;
(7)FEDERAL RESERVE CONDITION OF APPROVAL
</TABLE>
<PAGE> 5
<TABLE>
<S> <C> <C> <C> <C> <C>
TRAVELERS HIGHLAND PARK, LLC Colorado 100 100 Y 6826
HIGHLAND PARK VENTURES, LLC Colorado 50 50 Y 6268
TRAVELERS INSURANCE UK INVESTMENTS, LLC Delaware 100 100 Y 6832
TRAVELERS INTERNATIONAL INVESTMENTS LTD. Cayman Is. 100 100 Y 6833
SALOMON-SHANGHAI INDUSTRIAL GREATER CHINA FUND Cayman Islands 14.9 52.2 Y 6916
TRAVELERS OPPORTUNITY FUND I, LLC Delaware 100 100 Y 6839
TISHMAN SPEYER/TRAVELERS ASSOCIATES Delaware 50 50 Y 6791
TISHMAN SPEYER/TRAVELERS REAL ESTATE VENTURE, L.P. Delaware 1 64.65 Y 6792
125 HIGH STREET, L.P. Delaware 24 24 Y (1) 6008
TST 2010 N. FIRST, L.L.C. Delaware 100 100 Y 7089
TST 375 HUDSON, L.L.C. Delaware 100 100 Y 7090
TST 525 WEST MONROE, L.L.C. Delaware 100 100 Y 7091
TST 745 ATLANTIC, L.L.C. Delaware 100 100 Y 7092
TST MOUNTAIN BAY, L.L.C. Delaware 100 100 Y 7093
TST ONE INDIANA, L.L.C. Delaware 100 100 Y 7094
TST TOWER, L.L.C. Delaware 100 100 Y 7095
TST WILSHIRE, L.L.C. Delaware 100 100 Y 7096
TRAVELERS OPPORTUNITY FUND II, LLC Delaware 100 100 Y 6840
TISHMAN SPEYER/TRAVELERS REAL ESTATE VENTURE, L.P. Delaware 57.0 64.65 Y 6792
125 HIGH STREET, L.P. Delaware 24 24 Y (1) 6008
TST 2010 N. FIRST, L.L.C. Delaware 100 100 Y 7089
TST 375 HUDSON, L.L.C. Delaware 100 100 Y 7090
TST 525 WEST MONROE, L.L.C. Delaware 100 100 Y 7091
TST 745 ATLANTIC, L.L.C. Delaware 100 100 Y 7092
TST MOUNTAIN BAY, L.L.C. Delaware 100 100 Y 7093
TST ONE INDIANA, L.L.C. Delaware 100 100 Y 7094
TST TOWER, L.L.C. Delaware 100 100 Y 7095
TST WILSHIRE, L.L.C. Delaware 100 100 Y 7096
</TABLE>
1 2 3 4 5 6 7 8 9 10 11 12 13
<TABLE>
<S> <C>
FOOTNOTES: (1)MANAGERIAL CONTROL; (2)INTEREST >=25% OF A VOTING CLASS; Page 5
(3)TOTAL EQUITY >50%; (4)SUBSIDIARY OF COMPANY DEEMED TO BE CONTROLLED;
(5)RELATED CONTRACT DEEMED TO GIVE CITI CONTROL; (6)SPONSORED/ADVISED FUND;
(7)FEDERAL RESERVE CONDITION OF APPROVAL
</TABLE>
<PAGE> 6
<TABLE>
<S> <C> <C> <C> <C> <C>
TRAVELERS SCHAUMBERG WINDY POINT LLC Delaware 100 100 Y 6848
WINDY POINT OF SCHAUMBERG LLC Delaware 76.1 76.12 Y 6882
TRAVELERS YORK ROAD LLC Delaware 100 100 Y 6852
YORK ROAD PROPERTIES LLC Delaware 85 85 Y 6884
TRAVELERS/NLI 190 SOUTH LASALLE STREET, L.L.C. Delaware 49.5 50.5 Y 7628
TRIBECA DISTRESSED SECURITIES, L.L.C. Delaware 78 100 Y 7097
TRIBECA INVESTMENTS, L.L.C. Delaware 16.9 100 Y 6858
TRIBECA MANAGEMENT, L.L.C. Delaware 100 100 Y 6859
TRIBECA DISTRESSED SECURITIES, L.L.C. Delaware 1 100 Y 7097
TRIBECA INVESTMENTS, L.L.C. Delaware 0.75 100 Y 6858
TRICOUNTY GROVE Florida 50 50 Y 6860
UMBRELLA CAPITAL COMPANY LLC Delaware 100 100 Y 6870
WT EQUIPMENT PARTNERS LP Delaware 4.3 50 Y 6354
YORKTOWN ENERGY PARTNERS II L.P. New York 11.8 26.2 Y 6885
YORKTOWN ENERGY PARTNERS, L.P. Connecticut 6.7 31.8 Y 6887
TRAVELERS CANADA CORPORATION Canada 100 100 Y 6809
TRAVELERS MORTGAGE SECURITIES CORPORATION Delaware 100 100 Y 6838
TRAVELERS PROPERTY CASUALTY CORP. Delaware 85 85 Y 6845
THE STANDARD FIRE INSURANCE COMPANY Connecticut 100 100 Y 6760
AE PROPERTIES, INC. California 100 100 Y 6010
AE TOWN AND COUNTRY LIMITED PARTNERSHIP Arizona 50 50 Y 6011
BAYHILL ASSOCIATES California 83 83 Y 6034
BAYHILL RESTAURANT II ASSOCIATES California 50 50 Y 6035
INDUSTRY LAND DEVELOPMENT COMPANY California 100 100 Y 6279
INDUSTRY PARTNERS California 50 100 Y 6280
INDUSTRY PARTNERS California 50 100 Y 6280
PRATT STREET, L.P. Connecticut 30 100 Y 6410
COMMUNITY REHABILITATION INVESTMENT CORPORATION Connecticut 100 100 Y 6160
</TABLE>
1 2 3 4 5 6 7 8 9 10 11 12 13
<TABLE>
<S> <C>
FOOTNOTES: (1)MANAGERIAL CONTROL; (2)INTEREST >=25% OF A VOTING CLASS; Page 6
(3)TOTAL EQUITY >50%; (4)SUBSIDIARY OF COMPANY DEEMED TO BE CONTROLLED;
(5)RELATED CONTRACT DEEMED TO GIVE CITI CONTROL; (6)SPONSORED/ADVISED FUND;
(7)FEDERAL RESERVE CONDITION OF APPROVAL
</TABLE>
<PAGE> 7
<TABLE>
<S> <C> <C> <C> <C> <C>
PRATT STREET, L.P. Connecticut 70 100 Y 6410
STANDARD FIRE UK INVESTMENTS, LLC Connecticut 100 100 Y 6730
THE AUTOMOBILE INSURANCE COMPANY OF HARTFORD, CONNECTICUT Connecticut 100 100 Y 6748
TRAVCAL SECURE INSURANCE COMPANY California 100 100 Y 6802
TRAVCAL INDEMNITY COMPANY California 100 100 Y 6801
TRAVELERS ALPHA HOLDINGS, INC. Connecticut 50 100 Y 6115
TIMCO ALPHA I, LLC Connecticut 89.5 100 Y 6557
TRAVELERS INFORMATION SERVICES INC. Connecticut 50 100 Y 6831
TRAVELERS PERSONAL SECURITY INSURANCE COMPANY Connecticut 100 100 Y 6844
TRAVELERS PROPERTY CASUALTY INSURANCE COMPANY Connecticut 100 100 Y 6846
TRAVELERS PROPERTY CASUALTY INSURANCE COMPANY OF ILLINOIS Illinois 100 100 Y 6847
THE TRAVELERS INDEMNITY COMPANY Connecticut 100 100 Y 6765
COMMERCIAL INSURANCE RESOURCES, INC. Delaware 100 100 Y 6156
GULF INSURANCE COMPANY Missouri 100 100 Y 6257
ATLANTIC INSURANCE COMPANY Texas 100 100 Y 6030
GULF GROUP LLOYDS Texas 100 100 Y 6256
GULF INSURANCE HOLDINGS UK LIMITED England 100 100 Y 6259
GULF INSURANCE COMPANY U.K. LIMITED England 100 100 Y 6258
GULF UNDERWRITING HOLDINGS LIMITED London, England 100 100 Y 7114
GULF UNDERWRITING LIMITED London, England 100 100 Y 7115
GULF RISK SERVICES, INC. Delaware 100 100 Y 6260
GULF UNDERWRITERS INSURANCE COMPANY Missouri 100 100 Y 6261
SELECT INSURANCE COMPANY Texas 100 100 Y 6634
CONSTITUTION STATE SERVICES LLC Delaware 1 100 Y 6166
COUNTERSIGNATURE AGENCY, INC. Florida 100 100 Y 6181
CREST FUNDING PARTNERS, L.P. Delaware 25 50 Y 6183
CRIPPLE CREEK VENTURE PARTNER II L.P. Colorado 28.4 64.6 Y 6912
CRIPPLE CREEK VENTURE PARTNER L.P. Colorado 80.8 85 Y 6186
</TABLE>
1 2 3 4 5 6 7 8 9 10 11 12 13
<TABLE>
<S> <C>
FOOTNOTES: (1)MANAGERIAL CONTROL; (2)INTEREST >=25% OF A VOTING CLASS; Page 7
(3)TOTAL EQUITY >50%; (4)SUBSIDIARY OF COMPANY DEEMED TO BE CONTROLLED;
(5)RELATED CONTRACT DEEMED TO GIVE CITI CONTROL; (6)SPONSORED/ADVISED FUND;
(7)FEDERAL RESERVE CONDITION OF APPROVAL
</TABLE>
<PAGE> 8
<TABLE>
<S> <C> <C> <C> <C> <C>
EUROPEAN GREIO/TINDC REAL ESTATE INVESTMENTS LLC Delaware 100 100 Y 7133
FIRST FLORIDIAN AUTO AND HOME INSURANCE COMPANY Florida 100 100 Y 6224
FIRST TRENTON INDEMNITY COMPANY New Jersey 100 100 Y 6225
RED OAK INSURANCE COMPANY New Jersey 100 100 Y 6463
GPM GAS GATHERING L.L.C. Texas 23.8 25 Y 6233
GRIFFITH PARTNERS, L.P. Maryland 17 37.4 Y 6253
LANDMARK DIRECT EQUITIES, L.P. Connecticut 46.2 49.21 Y 6301
MIDKIFF DEVELOPMENT DRILLING PROGRAM, L.P. Texas 55.5 99 Y 6322
SALOMON BROTHERS CAPITAL STRUCTURE ARBITRAGE FUND I, L.P. New York 10.0 28.51 Y 6486
SECURE AFFINITY AGENCY, INC. Delaware 100 100 Y 6633
THE CHARTER OAK FIRE INSURANCE COMPANY Connecticut 100 100 Y 6749
THE PHOENIX INSURANCE COMPANY Connecticut 100 100 Y 6754
CONSTITUTION STATE SERVICE COMPANY Montana 100 100 Y 6165
CONSTITUTION STATE SERVICES LLC Delaware 99 100 Y 6166
CRIPPLE CREEK VENTURE PARTNER II L.P. Colorado 3.9 64.6 Y 6912
CRIPPLE CREEK VENTURE PARTNER L.P. Colorado 4.2 85 Y 6186
GPM GAS GATHERING L.L.C. Texas 1.2 25 Y 6233
GRIFFITH PARTNERS, L.P. Maryland 2.2 37.4 Y 6253
LANDMARK DIRECT EQUITIES, L.P. Connecticut 2.46 49.21 Y 6301
PHOENIX UK INVESTMENTS, LLC Connecticut 100 100 Y 6403
SSB PRIVATE SELECTIONS, LLC Delaware 6 100 Y 6724
THE TRAVELERS INDEMNITY COMPANY OF AMERICA Connecticut 100 100 Y 6766
THE TRAVELERS INDEMNITY COMPANY OF CONNECTICUT Connecticut 100 100 Y 6767
LANDMARK DIRECT EQUITIES, L.P. Connecticut 0.49 49.21 Y 6301
MIDKIFF DEVELOPMENT DRILLING PROGRAM, L.P. Texas 0.4 99 Y 6322
WT EQUIPMENT PARTNERS LP Delaware 0.2 50 Y 6354
THE TRAVELERS INDEMNITY COMPANY OF ILLINOIS Illinois 100 100 Y 6768
TRAVELERS FOREIGN BOND PARTNERSHIP Connecticut 30 100 Y 6820
</TABLE>
1 2 3 4 5 6 7 8 9 10 11 12 13
<TABLE>
<S> <C>
FOOTNOTES: (1)MANAGERIAL CONTROL; (2)INTEREST >=25% OF A VOTING CLASS; Page 8
(3)TOTAL EQUITY >50%; (4)SUBSIDIARY OF COMPANY DEEMED TO BE CONTROLLED;
(5)RELATED CONTRACT DEEMED TO GIVE CITI CONTROL; (6)SPONSORED/ADVISED FUND;
(7)FEDERAL RESERVE CONDITION OF APPROVAL
</TABLE>
<PAGE> 9
<TABLE>
<S> <C> <C> <C> <C> <C>
YORKTOWN ENERGY PARTNERS II L.P. New York 1.6 26.2 Y 6885
THE PREMIER INSURANCE COMPANY OF MASSACHUSETTS Massachusetts 100 100 Y 6756
THE TRAVELERS HOME AND MARINE INSURANCE COMPANY Connecticut 100 100 Y 6764
THE TRAVELERS INDEMNITY COMPANY OF MISSOURI Missouri 100 100 Y 6769
THE TRAVELERS LLOYDS INSURANCE COMPANY Texas 100 100 Y 6775
THE TRAVELERS MARINE CORPORATION California 100 100 Y 6776
TI HOME MORTGAGE BROKERAGE, INC. Delaware 100 100 Y 6789
TRAVCO INSURANCE COMPANY Connecticut 100 100 Y 6803
TRAVELERS BOND INVESTMENTS, INC. Connecticut 100 100 Y 6808
TRAVELERS FOREIGN BOND PARTNERSHIP Connecticut 1 100 Y 6820
TRAVELERS FOREIGN BOND PARTNERSHIP Connecticut 69 100 Y 6820
TRAVELERS GENERAL AGENCY OF HAWAII, INC. Hawaii 100 100 Y 6821
TRAVELERS MEDICAL MANAGEMENT SERVICES INC. Delaware 100 100 Y 6837
TRAVELERS SPECIALTY PROPERTY CASUALTY COMPANY, INC. Connecticut 100 100 Y 6850
TRIPLE T DIAMOND GATEWAY LLC Connecticut 100 100 Y 6861
WT EQUIPMENT PARTNERS LP Delaware 38.7 50 Y 6354
YORKTOWN ENERGY PARTNERS II L.P. New York 11.5 26.2 Y 6885
YORKTOWN ENERGY PARTNERS, L.P. Connecticut 20.3 31.8 Y 6887
TPC INVESTMENTS INC. Connecticut 100 100 Y 6908
TRAVELERS (BERMUDA) LIMITED Bermuda 100 100 Y 6804
TRAVELERS CASUALTY AND SURETY COMPANY Connecticut 100 100 Y 6812
2677 MAIN STREET ASSOCIATES LLC Delaware 50 50 Y 0 6002
AE DEVELOPMENT GROUP, INC. Connecticut 100 100 Y 6009
PONDEROSA HOMES Connecticut 23.5 100 Y 6409
CHARTER OAK SERVICES CORPORATION New York 100 100 Y 6084
FARMINGTON CASUALTY COMPANY Connecticut 100 100 Y 6218
TRAVELERS ALPHA HOLDINGS, INC. Connecticut 50 100 Y 6115
TIMCO ALPHA I, LLC Connecticut 89.5 100 Y 6557
</TABLE>
1 2 3 4 5 6 7 8 9 10 11 12 13
<TABLE>
<S> <C>
FOOTNOTES: (1)MANAGERIAL CONTROL; (2)INTEREST >=25% OF A VOTING CLASS; Page 9
(3)TOTAL EQUITY >50%; (4)SUBSIDIARY OF COMPANY DEEMED TO BE CONTROLLED;
(5)RELATED CONTRACT DEEMED TO GIVE CITI CONTROL; (6)SPONSORED/ADVISED FUND;
(7)FEDERAL RESERVE CONDITION OF APPROVAL
</TABLE>
<PAGE> 10
<TABLE>
<S> <C> <C> <C> <C> <C>
TRAVELERS MGA, INC. Texas 100 100 Y 6266
MCA PHASE III-A L.P. Connecticut 25 25 Y 7606
PONDEROSA HOMES Connecticut 76.5 100 Y 6409
SSB PRIVATE SELECTIONS, LLC Delaware 44 100 Y 6724
TCS EUROPEAN INVESTMENTS INC. Connecticut 100 100 Y 7639
TCS INTERNATIONAL INVESTMENTS LTD. Cayman Islands 100 100 Y 7638
TRAVELERS CASUALTY & SURETY COMPANY OF CANADA Canada 100 100 Y 6811
TRAVELERS CASUALTY AND SURETY COMPANY OF AMERICA Connecticut 100 100 Y 6813
TRAVELERS CASUALTY AND SURETY COMPANY OF ILLINOIS Illinois 100 100 Y 6814
TRAVELERS CASUALTY COMPANY OF CONNECTICUT Connecticut 100 100 Y 6815
TRAVELERS CASUALTY UK INVESTMENTS, LLC Connecticut 100 100 Y 6816
TRAVELERS COMMERCIAL INSURANCE COMPANY Connecticut 100 100 Y 6817
TRAVELERS EXCESS AND SURPLUS LINES COMPANY Connecticut 100 100 Y 6819
TRAVELERS INFORMATION SERVICES INC. Connecticut 50 100 Y 6831
TRAVELERS LLOYDS OF TEXAS INSURANCE COMPANY Texas 100 100 Y 6836
TRAVELERS TRIBECA INVESTMENTS, INC. New York 100 100 Y 6851
TRIBECA INVESTMENTS, L.L.C. Delaware 78.1 100 Y 6858
TRIBECA DISTRESSED SECURITIES, L.L.C. Delaware 17 100 Y 7097
TRIPLE T BRENTWOOD, L.L.C. Delaware 100 100 Y 7101
T-W MASTER LLC Delaware 100 100 Y 6735
T-W SANTA CLARA LLC Delaware 100 100 Y 6736
URBAN DIVERSIFIED PROPERTIES, INC. Connecticut 100 100 Y 6873
TRAVELERS P&C CAPITAL I Delaware 100 100 Y 6841
TRAVELERS P&C CAPITAL II Delaware 100 100 Y 6842
TRAVELERS P&C CAPITAL III Delaware 100 100 Y 6843
TRIBECA ALTERNATIVE STRATEGIES, INC. Connecticut 100 100 Y 6644
PRIMERICA CLIENT SERVICES, INC. <USA> Delaware 100 100 Y 6413
PRIMERICA CONVENTION SERVICES, INC. Georgia 100 100 Y 6414
</TABLE>
1 2 3 4 5 6 7 8 9 10 11 12 13
<TABLE>
<S> <C>
FOOTNOTES: (1)MANAGERIAL CONTROL; (2)INTEREST >=25% OF A VOTING CLASS; Page 10
(3)TOTAL EQUITY >50%; (4)SUBSIDIARY OF COMPANY DEEMED TO BE CONTROLLED;
(5)RELATED CONTRACT DEEMED TO GIVE CITI CONTROL; (6)SPONSORED/ADVISED FUND;
(7)FEDERAL RESERVE CONDITION OF APPROVAL
</TABLE>
<PAGE> 11
<TABLE>
<S> <C> <C> <C> <C> <C>
PRIMERICA FINANCE CORPORATION Delaware 100 100 Y 6417
PFS DISTRIBUTORS, INC. Georgia 100 100 Y 6372
PFS INVESTMENTS INC. Georgia 100 100 Y 6373
PFS T.A., INC. Delaware 100 100 Y 6376
PFS SHAREHOLDER SERVICES Georgia 50 100 Y 6375
PRIMERICA FINANCIAL SERVICES HOME MORTGAGES, INC. Georgia 100 100 Y 6426
PRIMERICA FINANCIAL SERVICES HOME MORTGAGES LIMITED
PARTNERSHIP OF ARIZONA Delaware 100 100 Y 6422
PRIMERICA FINANCIAL SERVICES HOME MORTGAGES LIMITED
PARTNERSHIP OF NORTH CAROLINA North Carolina 100 100 Y 6424
PRIMERICA FINANCIAL SERVICES HOME MORTGAGES LIMITED
PARTNERSHIP OF OHIO Ohio 100 100 Y 6425
PRIMERICA FINANCIAL SERVICES, INC. Nevada 100 100 Y 6440
PRIMERICA FINANCIAL INSURANCE SERVICES OF TEXAS, INC. Texas 100 100 Y 6418
PRIMERICA FINANCIAL SERVICES AGENCY OF NEW YORK, INC. New York 100 100 Y 6420
PRIMERICA FINANCIAL SERVICES INSURANCE MARKETING OF IDAHO, INC. Idaho 100 100 Y 6428
PRIMERICA FINANCIAL SERVICES INSURANCE MARKETING OF MAINE, INC. Maine 100 100 Y 6429
PRIMERICA FINANCIAL SERVICES INSURANCE MARKETING OF NEVADA, INC. Nevada 100 100 Y 6430
PRIMERICA FINANCIAL SERVICES INSURANCE MARKETING OF PENNSYLVANIA, INC. Pennsylvania 100 100 Y 6431
PRIMERICA FINANCIAL SERVICES INSURANCE
MARKETING OF THE VIRGIN ISLANDS, INC. U.S. Virgin Islands 100 100 Y 6432
PRIMERICA FINANCIAL SERVICES INSURANCE MARKETING OF WYOMING, INC. Wyoming 100 100 Y 6433
PRIMERICA FINANCIAL SERVICES INSURANCE MARKETING, INC. Delaware 100 100 Y 6434
PRIMERICA FINANCIAL SERVICES OF ALABAMA, INC. Alabama 100 100 Y 6436
PRIMERICA FINANCIAL SERVICES OF ARIZONA, INC. Arizona 100 100 Y 6437
PRIMERICA FINANCIAL SERVICES OF KENTUCKY, INC. Kentucky 100 100 Y 6438
PRIMERICA FINANCIAL SERVICES OF NEW MEXICO, INC. New Mexico 100 100 Y 6439
PRIMERICA INSURANCE AGENCY OF MASSACHUSETTS, INC. Massachusetts 100 100 Y 6441
PRIMERICA INSURANCE MARKETING SERVICES OF PUERTO RICO, INC. Puerto Rico 100 100 Y 6442
PRIMERICA INSURANCE SERVICES OF LOUISIANA, INC. Louisiana 100 100 Y 6443
PRIMERICA SERVICES, INC. Georgia 100 100 Y 6447
RCM ACQUISITION INC. Delaware 100 100 Y 6461
</TABLE>
1 2 3 4 5 6 7 8 9 10 11 12 13
<TABLE>
<S> <C>
FOOTNOTES: (1)MANAGERIAL CONTROL; (2)INTEREST >=25% OF A VOTING CLASS; Page 11
(3)TOTAL EQUITY >50%; (4)SUBSIDIARY OF COMPANY DEEMED TO BE CONTROLLED;
(5)RELATED CONTRACT DEEMED TO GIVE CITI CONTROL; (6)SPONSORED/ADVISED FUND;
(7)FEDERAL RESERVE CONDITION OF APPROVAL
</TABLE>
<PAGE> 12
<TABLE>
<S> <C> <C> <C> <C> <C>
SCN ACQUISITIONS COMPANY Delaware 100 100 Y 6631
SL&H REINSURANCE, LTD. Leeward Islands 100 100 Y 6648
SOUTHWEST SERVICE AGREEMENTS, INC. North Carolina 100 100 Y 6721
SOUTHWEST WARRANTY CORPORATION Florida 100 100 Y 6722
CCC FAIRWAYS, INC. Delaware 100 100 Y 6080
CITIGROUP CAPITAL I Delaware 100 100 Y 6092
CITIGROUP CAPITAL II Delaware 100 100 Y 6093
CITIGROUP CAPITAL III Delaware 100 100 Y 6094
CITIGROUP CAPITAL IV Delaware 100 100 Y 6095
CITIGROUP CAPITAL V Delaware 100 100 Y 6096
CITIGROUP CAPITAL VI Delaware 100 100 Y 6097
CITIGROUP CAPITAL VII Delaware 100 100 Y 6098
CITIGROUP CAPITAL VIII Delaware 100 100 Y 6810
CITIGROUP CAPITAL IX Delaware 100 100 Y 7107
CITIGROUP CAPITAL X Delaware 100 100 Y 7108
CITIGROUP CAPITAL XI Delaware 100 100 Y 7109
CITIGROUP CAPITAL XII Delaware 100 100 Y 7110
CITIGROUP CAPITAL XIII Delaware 100 100 Y 7111
CITIGROUP HOLDINGS COMPANY Delaware 100 100 Y 7280
CITICORP Delaware 100 100 Y 6091
CITIBANK (FLORIDA), NATIONAL ASSOCIATION USA 100 100 Y 2635
CITIBANK MORTGAGE CORP. Florida 100 100 Y 2638
CITIBANK COMMERCIAL PROPERTIES, INC. Florida 100 100 Y 2639
INCOME SERVICE GROUP, INC. Florida 100 100 Y 2930
LAND SERVICE GROUP, INC. Florida 100 100 Y 2841
RRR PROPERTY MANAGEMENT, INC. Florida 100 100 Y 2666
THIRTEEN PROPERTY MANAGEMENT, INC. Florida 100 100 Y 4495
CITIBANK (NEVADA), NATIONAL ASSOCIATION USA. 100 100 Y 1799
</TABLE>
1 2 3 4 5 6 7 8 9 10 11 12 13
<TABLE>
<S> <C>
FOOTNOTES: (1)MANAGERIAL CONTROL; (2)INTEREST >=25% OF A VOTING CLASS; Page 12
(3)TOTAL EQUITY >50%; (4)SUBSIDIARY OF COMPANY DEEMED TO BE CONTROLLED;
(5)RELATED CONTRACT DEEMED TO GIVE CITI CONTROL; (6)SPONSORED/ADVISED FUND;
(7)FEDERAL RESERVE CONDITION OF APPROVAL
</TABLE>
<PAGE> 13
<TABLE>
<S> <C> <C> <C> <C> <C>
CITIBANK (NEW YORK STATE) New York 100 100 Y 1129
CITIACH, INC. Delaware 50 100 Y 2323
CITICORP DEVELOPMENT CENTER, INC. Delaware 100 100 Y 1153
ENHANCED TELEPHONE SERVICES, INC. Delaware 100 100 Y 3037
CITICORP INFORMATION MANAGEMENT SERVICES, INC. Delaware 100 100 Y 2312
CITICORP POS INFORMATION SERVICES, INC. Delaware 100 100 Y 2282
DINERS CLUB INTERNATIONAL LTD. New York 100 100 Y 1136
CARTE BLANCHE INTERNATIONAL LTD. Delaware 100 100 Y 1131
DINERS CLUB EQUIPMENT CORPORATION New York 100 100 Y 1142
DINERS FINANCIAL CORPORATION New York 100 100 Y 1145
DINERS WORLD TRAVEL INC. Delaware 100 100 Y 1146
STUDENT LOAN CORPORATION, THE Delaware 80 80 Y 3846
CITIBANK (SOUTH DAKOTA), N.A. USA. 100 100 Y 1155
CDC HOLDINGS INC. Delaware 100 100 Y 2294
CITICORP DINERS CLUB INC. Delaware 100 100 Y 2293
CITICORP TRUST SOUTH DAKOTA South Dakota 100 100 Y 4498
CITIHOUSING, INC. South Dakota 100 100 Y 4014
CITIBANK DELAWARE Delaware 100 100 Y 1403
CITIBANK INSURANCE AGENCY, INC. New York 100 100 Y 3990
CITICORP DELAWARE EQUITY, INC. Delaware 100 100 Y 2907
FAIRFAX HOLDINGS, INC. Delaware 100 100 Y 2908
CITICORP DEL-LEASE, INC. Delaware 100 100 Y 2279
CITICORP AIRCRAFT MANAGEMENT, INC. Delaware 100 100 Y 2408
CITICORP BANKERS LEASING CORPORATION Delaware 100 100 Y 2499
BANKERS LEASING CORPORATION Massachusetts 100 100 Y 2500
BLC CORPORATION Utha 100 100 Y 2503
CITICORP BANKERS LEASING FINANCE CORPORATION Delaware 100 100 Y 3724
COMMETRO LEASING, INC. Delaware 100 100 Y 2506
</TABLE>
1 2 3 4 5 6 7 8 9 10 11 12 13
<TABLE>
<S> <C>
FOOTNOTES: (1)MANAGERIAL CONTROL; (2)INTEREST >=25% OF A VOTING CLASS; Page 13
(3)TOTAL EQUITY >50%; (4)SUBSIDIARY OF COMPANY DEEMED TO BE CONTROLLED;
(5)RELATED CONTRACT DEEMED TO GIVE CITI CONTROL; (6)SPONSORED/ADVISED FUND;
(7)FEDERAL RESERVE CONDITION OF APPROVAL
</TABLE>
<PAGE> 14
<TABLE>
<S> <C> <C> <C> <C> <C>
COMMONWEALTH CONTROL, INC. Delaware 100 100 Y 2508
COMMONWEALTH PLAN, INC., THE Massachusetts 100 100 Y 2505
COMMONWEALTH SYSTEM, INC., THE Massachusetts 100 100 Y 2504
FINANCIAL LEASING CORPORATION Massachusetts 100 100 Y 2509
PACIFIC PLAN, INC., THE Massachusetts 100 100 Y 2510
WORCESTER PLAN, INC., THE Massachusetts 100 100 Y 2507
CBL CAPITAL CORPORATION Delaware 100 100 Y 2502
CITICORP DELAWARE PROPERTIES, INC. Delaware 100 100 Y 4748
CITICORP NEVADA CREDIT, INC. Nevada 100 100 Y 2406
CITICORP NEVADA LEASING, INC. California 100 100 Y 2407
G.W.L. LEASING COMPANY, INCORPORATED California 100 100 Y 2614
GXW CORPORATION California 100 100 Y 2615
PALM DEFEASANCE COMPANY Delaware 100 100 Y 2517
CITICORP INSURANCE AGENCY, INC. Delaware 100 100 Y 3751
EASTERN SERVICE CORPORATION District of Columbia 100 100 Y 2270
CITICORP INSURANCE AGENCY, INC. Missouri 100 100 Y 1244
CITICORP INSURANCE AGENCY, INC. California 100 100 Y 1237
CITICORP LIFE INSURANCE COMPANY Arizona 100 100 Y 1233
CITICORP ASSURANCE CO. Delaware 100 100 Y 3593
FIRST CITICORP LIFE INSURANCE COMPANY New York 100 100 Y 1234
CITICORP RAILMARK, INC. Delaware 100 100 Y 435
CITICORP U.S. HOLDINGS NETHERLANDS, INC. New Castle, Delaware 100 100 Y 5243
CITICORP HOLDINGS NETHERLANDS B.V. Netherlands 100 100 Y 5244
CITICORP LIFE INSURANCE COMPANY Arizona 0 100 Y 1233
EIU GROUP, INC. Massachusetts 31.2 31.25 Y 7176
ENVIRONMENTAL CAPITAL INSURANCE BROKERAGE, INC. Massachusetts 100 31.25 Y 7177
ENVIRONMENTAL INSURANCE UNDERWRITERS AGENCY, INC. Massachusetts 100 31.25 Y 7178
CITIBANK, N.A. USA. 100 100 Y 2
</TABLE>
1 2 3 4 5 6 7 8 9 10 11 12 13
<TABLE>
<S> <C>
FOOTNOTES: (1)MANAGERIAL CONTROL; (2)INTEREST >=25% OF A VOTING CLASS; Page 14
(3)TOTAL EQUITY >50%; (4)SUBSIDIARY OF COMPANY DEEMED TO BE CONTROLLED;
(5)RELATED CONTRACT DEEMED TO GIVE CITI CONTROL; (6)SPONSORED/ADVISED FUND;
(7)FEDERAL RESERVE CONDITION OF APPROVAL
</TABLE>
<PAGE> 15
<TABLE>
<S> <C> <C> <C> <C> <C>
399 VENTURE PARTNERS, INC. Delaware 100 100 Y 2518
ALLIED DIGITAL TECHNOLOGIES, INC. Michigan 47 47 Y 3287
AMERICAN COMMERCIAL LINES LLC Delaware 15.8 15.8 Y (2) 7201
ANVIL HOLDINGS, INC. Delaware 30.3 30.3 Y 4801
BPS HOLDING CORPORATION Georgia 38 38 Y 4339
CHROMCRAFT REVINGTON, INC. Indiana 49.9 49.9 Y 3923
CONDERE CORPORATION Connecticut 29.9 29.9 Y 3924
HANCOR, INC. Ohio 33.7 33.7 Y 3927
MARINE HOLDING, L.L.C. Delaware 36.9 36.9 Y 4800
PALOMAR TECHNOLOGIES CORPORATION California 35.7 35.7 Y 4554
PLAINWELL HOLDING COMPANY Delaware 25.5 25.5 Y 4894
PURSELL INDUSTRIES INC. Alabama 30.6 30.6 Y 4823
SUFC HOLDING CORPORATION Delaware 33.8 33.8 Y 5177
SYBRON CHEMICALS, INC. New Jersey 35.8 35.8 Y 3934
THE GNI GROUP, INC. Delaware 32.3 32.3 Y 5176
VECTURA HOLDING COMPANY LLC Delaware 48.4 48.4 Y 3935
ACME DELIVERY SERVICE, INC. Colorado 30 30 Y 4697
BANCO DE HONDURAS S.A. Honduras 97.4 97.4 Y 312
BEECH HILL HOSPITAL LLC New Hampshire 35 35 Y 4759
CAMWIL LEASE, INC. Delaware 100 100 Y 319
CITICORP INVESTOR LEASE, INC. Delaware 100 100 Y 320
CITICORP MULTILEASE (SEF), INC. Delaware 100 100 Y 321
CAREERCOM CORPORATION Pennsylvania 72 72 Y 4544
CCBC HOLDINGS, INC. Philippines 40 40 Y (1) 3856
CITI CENTER BUILDING CORPORATION Philippines 60 100 Y 3436
CITI (NOMINEES) LIMITED Hong Kong 100 100 Y 341
CITI CENTER BUILDING CORPORATION Philippines 40 100 Y 3436
CITI CENTER CONDOMINIUM CORPORATION Philippines 40 40 Y (4) 4179
</TABLE>
1 2 3 4 5 6 7 8 9 10 11 12 13
<TABLE>
<S> <C>
FOOTNOTES: (1)MANAGERIAL CONTROL; (2)INTEREST >=25% OF A VOTING CLASS; Page 15
(3)TOTAL EQUITY >50%; (4)SUBSIDIARY OF COMPANY DEEMED TO BE CONTROLLED;
(5)RELATED CONTRACT DEEMED TO GIVE CITI CONTROL; (6)SPONSORED/ADVISED FUND;
(7)FEDERAL RESERVE CONDITION OF APPROVAL
</TABLE>
<PAGE> 16
<TABLE>
<S> <C> <C> <C> <C> <C>
PASEO REALTY AND DEVELOPMENT CORP. Philippines 100 40 Y (4) 4180
CITI OPERACIONES A.I.E. Madrid, Spain 5 100 Y 7258
CITI TOWER BUILDING CORPORATION Philippines 100 100 Y 3839
CITIACH, INC. Delaware 50 100 Y 2323
CITIBANK (CHANNEL ISLANDS) LIMITED Channel Islands 100 100 Y 325
CCIL (NOMINEES) LIMITED Channel Islands 100 100 Y 2080
CCIL PENSION SCHEME TRUSTEES LIMITED Channel Islands 100 100 Y 4613
CITIBANK (ZAIRE) S.A.R.L. Congo 100 100 Y 713
CITIBANK CAPITAL MANAGEMENT, INC. Delaware 100 100 Y 4001
CITIBANK CONSUMERS NOMINEE PTE. LTD. Singapore 100 100 Y 3063
CITIBANK CORREDORES DE SEGUROS LIMITADA Chile 99.9 100 Y 3887
CITIBANK INTERNATIONAL USA 100 100 Y 327
3C (HONG KONG) FUNDING CORPORATION Geroge Town, Cayman Is. 0 0 Y (1) 4962
CITIBANK-MAGHREB Morocco 85.5 85.55 Y 334
CITIBANK MORTGAGE REINSURANCE, INC. Vermont 100 100 Y 7179
CITIBANK NOMINEES (IRELAND) LIMITED Ireland 100 100 Y 340
CITIBANK NOMINEES SINGAPORE PTE. LTD. Singapore 100 100 Y 2587
CITIBANK OVERSEAS INVESTMENT CORPORATION USA 100 100 Y 342
ASIA PACIFIC TECHNOLOGY SERVICES PTE. LIMITED Singapore 100 100 Y 3311
BANCO CITIBANK S.A. Brazil 100 100 Y 424
CITIBANK-CORRETORA DE CAMBIO, TITULOS E VALORES MOBILIARIOS S.A. Brazil 100 100 Y 567
CITIBANK-DISTRIBUIDORA DE TITULOS E VALORES MOBILIARIOS S.A. Brazil 100 100 Y 425
CITIBANK COMPANHIA HIPOTECARIA S.A. Sao Paulo, Brazil 99.9 100 Y 5305
BANCO DE DESARROLLO CITICORP, S.A. Dominican Republic 100 100 Y 534
CITINVERSIONES DE TITULOS Y VALORES (PUESTO DE BOLSA) S.A. Dominican Republic 99.7 99.72 Y 4455
BERLIN REAL ESTATE B.V. Netherlands 74.2 74.23 Y 3477
CCSCI, INC. Puerto Rico 100 100 Y 1404
CENTAUR INVESTMENT CORPORATION Delaware 100 100 Y 365
</TABLE>
1 2 3 4 5 6 7 8 9 10 11 12 13
<TABLE>
<S> <C>
FOOTNOTES: (1)MANAGERIAL CONTROL; (2)INTEREST >=25% OF A VOTING CLASS; Page 16
(3)TOTAL EQUITY >50%; (4)SUBSIDIARY OF COMPANY DEEMED TO BE CONTROLLED;
(5)RELATED CONTRACT DEEMED TO GIVE CITI CONTROL; (6)SPONSORED/ADVISED FUND;
(7)FEDERAL RESERVE CONDITION OF APPROVAL
</TABLE>
<PAGE> 17
<TABLE>
<S> <C> <C> <C> <C> <C>
CENTRAL HOLDINGS CORPORATION Philippines 30 30 Y (1) 366
CITI CHREMATODOTIKES MISTHOSIS S.A. Greece 100 100 Y 2432
CITI INVERSIONES, S.A. DE C.V. El Salvador 100 100 Y 4247
CITI VALORES DE EL SALVADOR S.A. DE C.V. San Salvador, El Salvador 100 100 Y 4268
CITI MUTUAL FUNDS MANAGEMENT COMPANY S.A. Greece 100 100 Y 3690
CITI-INFO, S.A. DE C.V. Mexico 100 100 Y 1830
CITI-INMOBILIARIA E INVERSIONES, S.A. DE C.V. Honduras 96.9 96.92 Y 3328
CITIBANK (POLAND) S.A. Warsaw, Poland 100 100 Y 3535
CITIBROKERAGE S.A. Poland 100 100 Y 4250
CITILEASING SP. Z O.O. Poland 100 100 Y 4604
CITIBANK (SLOVAKIA) A.S. Slovakia 100 100 Y 2007
CITIBANK A.S. Czech Republic 100 100 Y 3442
CITICORP SECURITIES (CR), S.R.O. Czech Republic 100 100 Y 4468
CITIBANK ASIA PACIFIC BANKING INSTITUTE PTE. LTD. Singapore 100 100 Y 2709
CITIBANK BELGIUM S.A./N.V. Belgium 99.4 99.49 Y 1834
CITIBANK BERHAD Malaysia 100 100 Y 4248
CITICORP NOMINEE (MALAYSIA) SENDIRIAN BERHAD Malaysia 100 100 Y 2320
CITICORP NOMINEES (ASING) SDN. BHD. Malaysia 100 100 Y 4150
CITICORP NOMINEES (TEMPATAN) SDN. BHD. Malaysia 100 100 Y 4151
CITIBANK CANADA Canada 100 100 Y 416
1084851 ONTARIO INC. Canada 100 100 Y 4345
1169513 ONTARIO INC. Canada 100 100 Y 4754
J.D.S. INVESTMENTS LIMITED Canada 61 61 Y 4755
2490827 NOVA SCOTIA LIMITED Canada 100 100 Y 4492
CM NORTH AMERICA HOLDING COMPANY Canada 0.01 100 Y 4480
CM LEASING COMPANY Canada 69.9 100 Y 4481
CM TULIP HOLDING COMPANY Canada 0.01 100 Y 4482
CM LEASING COMPANY Canada 29.9 100 Y 4481
</TABLE>
1 2 3 4 5 6 7 8 9 10 11 12 13
<TABLE>
<S> <C>
FOOTNOTES: (1)MANAGERIAL CONTROL; (2)INTEREST >=25% OF A VOTING CLASS; Page 17
(3)TOTAL EQUITY >50%; (4)SUBSIDIARY OF COMPANY DEEMED TO BE CONTROLLED;
(5)RELATED CONTRACT DEEMED TO GIVE CITI CONTROL; (6)SPONSORED/ADVISED FUND;
(7)FEDERAL RESERVE CONDITION OF APPROVAL
</TABLE>
<PAGE> 18
<TABLE>
<S> <C> <C> <C> <C> <C>
CM LEASING COMPANY Canada 0.00 100 Y 4481
3121615 CANADA INC. Canada 100 100 Y 4426
PALACE PLACE LIMITED PARTNERSHIP Canada 0.01 0.01 Y (1) 4434
3278662 CANADA INC. Canada 100 100 Y 4790
598299 ALBERTA LIMITED Canada 100 100 Y 4183
AVENIDA PLACE SHOPPING CENTRE LTD. Canada 100 100 Y 4155
BERSHAW & COMPANY Canada 100 100 Y 4606
CCLI (1994) INC. Canada 100 100 Y 4296
CHUDLEIGH FUNDING INC. Canada 100 100 Y 2621
CITIBANK CANADA INVESTMENT FUNDS LIMITED Canada 100 100 Y 4182
CITIBANK CANADA REAL ESTATE LIMITED Canada 49 49 Y (3) 4702
CITIBANK CANADA SECURITIES LIMITED Canada 100 100 Y 2562
CITIBANK NOMINEES LTD. Canada 100 100 Y 2589
CITIBANK RAC INVESTMENTS INC. Canada 100 100 Y 3289
CITICORP CAPITAL INVESTORS LTD. Canada 100 100 Y 2331
CITIFINANCIAL CANADA, INC. Toronto, Canada 100 100 Y 5269
CITIBANK CAPITAL CORPORATION Cayman Is. 100 100 Y 2873
CITIBANK COLOMBIA Colombia 85 100 Y 354
CITITRUST COLOMBIA S.A. SOCIEDAD FIDUCIARIA Colombia 82.3 100 Y 3539
CITIBANK-COLOMBIA (NASSAU) LIMITED Bahamas 100 100 Y 355
CITIBANK COLOMBIA Colombia 0.1 100 Y 354
COMPANIA EXPORTADORA CITYEXPORT S.A. Colombia 24.2 100 Y 475
CITIBANK COLOMBIA Colombia 3.8 100 Y 354
CITIVALORES S.A. COMISIONISTA DE BOLSA Colombia 5 100 Y 4011
LEASING CITIBANK S.A. COMPANIA DE FINANCIAMIENTO COMERCIAL Colombia 8.07 100 Y 347
LEASING CITIBANK S.A. COMPANIA DE FINANCIAMIENTO COMERCIAL Colombia 91.9 100 Y 347
CITIBANK ESPANA S.A. Spain 99.9 99.96 Y 1442
CANTABRA DE AVIACION, SOCIEDAD LIMITADA Madrid, Spain 100 100 Y 5304
</TABLE>
1 2 3 4 5 6 7 8 9 10 11 12 13
<TABLE>
<S> <C>
FOOTNOTES: (1)MANAGERIAL CONTROL; (2)INTEREST >=25% OF A VOTING CLASS; Page 18
(3)TOTAL EQUITY >50%; (4)SUBSIDIARY OF COMPANY DEEMED TO BE CONTROLLED;
(5)RELATED CONTRACT DEEMED TO GIVE CITI CONTROL; (6)SPONSORED/ADVISED FUND;
(7)FEDERAL RESERVE CONDITION OF APPROVAL
</TABLE>
<PAGE> 19
<TABLE>
<S> <C> <C> <C> <C> <C>
CITI OPERACIONES A.I.E. Madrid, Spain 90 100 Y 7258
CITI RECOVERY, A.I.E. Spain 66.6 68.33 Y 4297
CITIBANK BROKER CORREDURIA DE SEGUROS S.A. Spain 100 100 Y 3352
CITI OPERACIONES A.I.E. Madrid, Spain 5 100 Y 7258
CITI RECOVERY, A.I.E. Spain 1.66 68.33 Y 4297
CITICONSULTING A.I.E. Spain 10 80 Y 4298
CITICONSULTING A.I.E. Spain 70 80 Y 4298
CITIGESTION, SOCIEDAD GESTORA DE INSTITUCIONES DE INVERSION COLECTIVA, S.A. Spain 100 100 Y 2905
CITIHOUSE, S.A. Spain 100 100 Y 4444
CITIPARTNERS SERVICES GROUP A.I.E. Spain 40 100 Y 4189
CITIPENSIONES, ENTIDAD GESTORA DE FONDOS DE PENSIONES, S.A. Spain 100 100 Y 3291
CITIBANK FINANCE LIMITED Singapore 100 100 Y 426
CITIBANK HOUSING FINANCE COMPANY LIMITED Pakistan 100 100 Y 3800
CITIBANK INVESTMENT AND SECURITIES RT. Hungary 100 100 Y 4443
EUROPEAN COMMERCIAL BANK LTD. Budapest, Hungary 0.08 100 Y 5164
CITIBANK INVESTMENT SERVICES IRELAND LTD. Ireland 100 100 Y 4299
CITIBANK INVESTMENT SERVICES LIMITED Hong Kong 100 100 Y 541
CITIBANK INVESTMENTS LIMITED England 100 100 Y 1776
CHANNEL COLLECTIONS LIMITED England 100 100 Y 1507
CIB PROPERTIES LIMITED England 100 100 Y 1844
CITI PENSIONS & TRUSTEES LIMITED England 100 100 Y 2321
CITIBANK EUROPE PLC England 100 100 Y 3254
CITIBANK INTERNATIONAL PLC London, England 100 100 Y 1283
CARDHOLDER SERVICES LIMITED England 100 100 Y 510
CITI-IMMOBILIER S.A. 100 100 Y 3871
CITIBANK FINANCIAL TRUST LIMITED England 100 100 Y 427
CITIBANK, S.A. France 99.9 99.993 Y 1083
CITI CHANZY S.A. France 100 100 Y 3736
</TABLE>
1 2 3 4 5 6 7 8 9 10 11 12 13
<TABLE>
<S> <C>
FOOTNOTES: (1)MANAGERIAL CONTROL; (2)INTEREST >=25% OF A VOTING CLASS; Page 19
(3)TOTAL EQUITY >50%; (4)SUBSIDIARY OF COMPANY DEEMED TO BE CONTROLLED;
(5)RELATED CONTRACT DEEMED TO GIVE CITI CONTROL; (6)SPONSORED/ADVISED FUND;
(7)FEDERAL RESERVE CONDITION OF APPROVAL
</TABLE>
<PAGE> 20
<TABLE>
<S> <C> <C> <C> <C> <C>
CITI CHURCHILL S.A. France 100 100 Y 3738
CITI LES TILLEULS S.A. France 100 100 Y 3877
CITIFINANCE OY Finland 100 100 Y 742
CITICORP SCRIMGEOUR VICKERS SECURITIES LIMITED England 100 100 Y 2186
CITIFINANCEMENT S.A. France 100 100 Y 641
CITIMMO S.A. France 100 100 Y 2495
COMPAGNIE DE NEGOCIATION ET DE GESTION S.A.R.L. France 100 100 Y 1922
DINERS CLUB LIMITED, THE Ireland 100 100 Y 511
GROUPEMENT D'INTERET ECONOMIQUE "PARIS CITICORP CENTER" France 50 100 Y 1084
HEATHVIEW NOMINEES LIMITED England 100 100 Y 2101
KEMP-GEE NOMINEES LIMITED England 100 100 Y 1819
LEADAIR ASSURANCES France 99.7 99.75 Y 4529
LEADAIR SELECTION France 99.9 99.9 Y 4530
QUOTNET (U.K.) LIMITED England 100 100 Y 2237
SCRIMGEOUR VICKERS (ASSET MANAGEMENT) LIMITED England 100 100 Y 2188
SCRIMGEOUR VICKERS UNIT TRUST MANAGERS LIMITED England 80 100 Y 1826
SCRIMGEOUR VICKERS NOMINEES LIMITED England 100 100 Y 2143
SCRIMGEOUR VICKERS UNIT TRUST MANAGERS LIMITED England 20 100 Y 1826
SNC CITI GESTION France 1 100 Y 3013
SNC CITI MANAGEMENT France 1 100 Y 4908
SVT (NOMINEES) LIMITED England 100 100 Y 2196
VIDACOS NOMINEES LIMITED England 100 100 Y 1686
CITIBANK LEASING LIMITED England 100 100 Y 429
CITIBANK LONDON NOMINEES LIMITED England 100 100 Y 329
CITIBANK PENSIONS TRUSTEES IRELAND LTD. Ireland 100 100 Y 4359
CITIBANK TRUST LIMITED England 100 100 Y 430
CITICORP CAPITAL LIMITED England 100 100 Y 718
CITICORP DINERS CLUB LIMITED England 100 100 Y 3668
</TABLE>
1 2 3 4 5 6 7 8 9 10 11 12 13
<TABLE>
<S> <C>
FOOTNOTES: (1)MANAGERIAL CONTROL; (2)INTEREST >=25% OF A VOTING CLASS; Page 20
(3)TOTAL EQUITY >50%; (4)SUBSIDIARY OF COMPANY DEEMED TO BE CONTROLLED;
(5)RELATED CONTRACT DEEMED TO GIVE CITI CONTROL; (6)SPONSORED/ADVISED FUND;
(7)FEDERAL RESERVE CONDITION OF APPROVAL
</TABLE>
<PAGE> 21
<TABLE>
<S> <C> <C> <C> <C> <C>
CITICORP FINANCE LIMITED England 100 100 Y 2086
CITICORP SCRIMGEOUR VICKERS LIMITED England 100 100 Y 1815
CITICORP TRUSTEE COMPANY LIMITED England 100 100 Y 1648
NORWICH PROPERTY TRUST LIMITED England 100 100 Y 3193
CITICORPORATE LIMITED England 100 100 Y 2511
CITIDEALINGS LIMITED England 100 100 Y 1555
CITIFRIENDS NOMINEE LIMITED England 100 100 Y 2544
CITIFUTURES LIMITED England 100 100 Y 428
CITILOANS PLC England 100 100 Y 3253
CITINET LIMITED England 100 100 Y 2398
CITIOPTIONS LIMITED England 100 100 Y 2259
CITIVIC NOMINEES LIMITED England 100 100 Y 1656
CUIM NOMINEE LIMITED England 100 100 Y 4658
DINERS CLUB LIMITED, THE England 99.9 99.98 Y 509
FXT-G.P., LTD. England 100 100 Y 3774
FXT-L.P., LTD. England 100 100 Y 3772
INFOCAST LIMITED England 100 100 Y 2633
N.C.B. TRUST LIMITED England 100 100 Y 1110
NATIONAL CITY NOMINEES LIMITED England 100 100 Y 1106
NEW YORK LONDON FINANCE CO. LIMITED England 100 100 Y 1111
SNC CITI GESTION France 99 100 Y 3013
SNC CITI MANAGEMENT France 99 100 Y 4908
CITIBANK MALAYSIA (L) LIMITED Malaysia 100 100 Y 4204
CITIBANK MERCADO DE CAPITALES, CITIMERCA C.A. Venezuela 100 100 Y 2400
CITIBANK NIGERIA Nigeria 82.5 82.5 Y 1650
CITIBANK PRIVATKUNDEN AG Germany 0 100 Y 371
CITIBANK ROMANIA S.A. Romania 100 100 Y 4617
CITIBANK RT. Hungary 100 100 Y 2089
</TABLE>
1 2 3 4 5 6 7 8 9 10 11 12 13
<TABLE>
<S> <C>
FOOTNOTES: (1)MANAGERIAL CONTROL; (2)INTEREST >=25% OF A VOTING CLASS; Page 21
(3)TOTAL EQUITY >50%; (4)SUBSIDIARY OF COMPANY DEEMED TO BE CONTROLLED;
(5)RELATED CONTRACT DEEMED TO GIVE CITI CONTROL; (6)SPONSORED/ADVISED FUND;
(7)FEDERAL RESERVE CONDITION OF APPROVAL
</TABLE>
<PAGE> 22
<TABLE>
<S> <C> <C> <C> <C> <C>
EUROPEAN COMMERCIAL BANK LTD. Budapest, Hungary 99.9 100 Y 5164
EKB KERESKEDELMI ES SZOLGALTATO KFT. Budapest, Hungary 100 100 Y 5233
CITIBANK SECURITIES INVESTMENT TRUST COMPANY LIMITED Taipei, Taiwan 100 100 Y 7000
CITIBANK SHIPPING BANK S.A. Greece 100 100 Y 2634
CITIBANK T/O Russia 100 100 Y 4058
CITIBANK TANZANIA LIMITED Tanzania 100 100 Y 4401
CITIBANK TRUSTEES (IRELAND), LIMITED Ireland 100 100 Y 712
CITIBANK UGANDA LIMITED Kampala, Uganda 100 100 Y 7196
CITICAPITAL LIMITED Thailand 100 100 Y 2438
CITICARD S.A. Argentina 100 100 Y 434
CITICORP VALORES S.A. SOCIEDAD DE BOLSA Argentina 1 100 Y 4190
CITICO, SGPS, LDA. Portugal 99.2 100 Y 4791
CITIBANK PORTUGAL, S.A. Portugal 100 100 Y 2515
CITICORP (B) SDN. BHD. Brunei 100 100 Y 3169
CITICORP ADMINISTRADORA DE INVERSIONES S.A. Argentina 100 100 Y 2546
CITICORP ASESORA DE SEGUROS S.A. Buenos Aires, Argentina 100 100 Y 5167
CITICORP CAPITAL ASIA (TAIWAN) LTD. Taipei, Taiwan 100 100 Y 5112
CITICORP CAPITAL ASIA LIMITED Bahamas 100 100 Y 1281
CITICORP CHINA INVESTMENT MANAGEMENT (BVI) LIMITED British Virgin Is. 55 55 Y 4445
CITICORP CHINA INVESTMENT MANAGEMENT LIMITED Hong Kong 55 55 Y 4446
CVC ASIA PACIFIC LIMITED Hong Kong 100 100 Y 7169
CITICORP CAPITAL MARKETS SOCIEDAD ANONIMA Argentina 100 100 Y 630
CITICORP VALORES S.A. SOCIEDAD DE BOLSA Argentina 99 100 Y 4190
CITICORP CAPITAL MARKETS URUGUAY S.A. Uruguay 100 100 Y 4236
CITICORP CAPITAL PHILIPPINES, INC. Philippines 53 100 Y 4403
CITICORP FINANCIAL SERVICES AND INSURANCE BROKERAGE
PHILIPPINES, INC. Philippines 10 100 Y 5181
CITICORP CAPITAL SDN. BHD. Malaysia 100 100 Y 2385
CITICORP CHILE S.A. Chile 100 100 Y 587
</TABLE>
1 2 3 4 5 6 7 8 9 10 11 12 13
<TABLE>
<S> <C>
FOOTNOTES: (1)MANAGERIAL CONTROL; (2)INTEREST >=25% OF A VOTING CLASS; Page 22
(3)TOTAL EQUITY >50%; (4)SUBSIDIARY OF COMPANY DEEMED TO BE CONTROLLED;
(5)RELATED CONTRACT DEEMED TO GIVE CITI CONTROL; (6)SPONSORED/ADVISED FUND;
(7)FEDERAL RESERVE CONDITION OF APPROVAL
</TABLE>
<PAGE> 23
<TABLE>
<S> <C> <C> <C> <C> <C>
CITICORP CHILE ADMINISTRADORA DE FONDOS DE INVERSION S.A. Chile 100 100 Y 3537
CITICORP CHILE ADMINISTRADORA DE FONDOS MUTUOS S.A. Chile 100 100 Y 1760
CITICORP CHILE S.A. CORREDORES DE BOLSA Chile 100 100 Y 1761
CITICORP CHILE SERVICIOS Y ASESORIAS LIMITADA Chile 100 100 Y 3264
EMPRESA DE COBRANZAS Y VERIFICACIONES AFINES S.A. Santiago, Chile 100 100 Y 7049
FINAUTO S.A. Santiago, Chile 60 60 Y 7050
INVERSIONES Y FINANCIAMIENTOS COMERCIALES S.A. Santiago, Chile 100 100 Y 7051
SOCIEDAD COMERCIAL CITIBANK LEASING S.A. Santiago, Chile 100 100 Y 7048
CITICORP COMMERCIAL FINANCE (H.K.) LTD. Hong Kong 100 100 Y 437
CITICORP CREDIT Guam 100 100 Y 438
CITICORP DEUTSCHLAND AKTIENGESELLSCHAFT Germany 99.8 99.89 Y 3821
CCD IMMOBILIEN BETEILIGUNGS GMBH Germany 100 100 Y 4319
CCD IMMOBILIEN BETEILIGUNGS GMBH & CO. FRANKFURT BUERO KG Germany 0 100 Y 3825
CCD IMMOBILIEN BETEILIGUNGS GMBH & CO. FRANKFURT HOTEL KG Germany 0 100 Y 3824
CCD IMMOBILIEN BETEILIGUNGS GMBH & CO. FRANKFURT BUERO KG Germany 100 100 Y 3825
CCD IMMOBILIEN BETEILIGUNGS GMBH & CO. FRANKFURT HOTEL KG Germany 100 100 Y 3824
CITIBANK AKTIENGESELLSCHAFT Germany 0 100 Y 2937
HANSEATIC REAL ESTATE B.V. Netherlands 25 100 Y 3358
CITIBANK BETEILIGUNGEN AKTIENGESELLSCHAFT Germany 100 100 Y 369
CITI SERVICES GMBH Germany 100 100 Y 380
CITIBANK AKTIENGESELLSCHAFT Germany 100 100 Y 2937
HANSEATIC REAL ESTATE B.V. Netherlands 25 100 Y 3358
CITIBANK PRIVATKUNDEN AG Germany 100 100 Y 371
CITICORP CARD OPERATIONS GMBH Germany 100 100 Y 4503
CITICORP DIENSTLEISTUNGS GMBH Germany 100 100 Y 2121
CITICORP KARTENSERVICE GMBH Germany 100 100 Y 1353
CITICORP KARTENSERVICE UNTERSTUETZUNGSKASSE GMBH Germany 100 100 Y 3064
CITICORP LEASING (DEUTSCHLAND) GMBH Germany 100 100 Y 451
</TABLE>
1 2 3 4 5 6 7 8 9 10 11 12 13
<TABLE>
<S> <C>
FOOTNOTES: (1)MANAGERIAL CONTROL; (2)INTEREST >=25% OF A VOTING CLASS; Page 23
(3)TOTAL EQUITY >50%; (4)SUBSIDIARY OF COMPANY DEEMED TO BE CONTROLLED;
(5)RELATED CONTRACT DEEMED TO GIVE CITI CONTROL; (6)SPONSORED/ADVISED FUND;
(7)FEDERAL RESERVE CONDITION OF APPROVAL
</TABLE>
<PAGE> 24
<TABLE>
<S> <C> <C> <C> <C> <C>
ACHTUNDZWANZIGSTE GAMMA TRANS LEASING VERWALTUNGS GMBH & CO. Nidderau, Germany 100 100 Y 5290
FINANZIERUNGS-MANAGEMENT KG
ACHTZEHNTE GAMMA TRANS LEASING VERWALTUNGS GMBH & CO. Germany 100 100 Y 5013
FINANZIERUNGS-MANAGEMENT KG
BETA TRANS LEASING VERWALTUNGS GMBH & CO. FINANZIERUNGS-MANAGEMENT KG Germany 100 100 Y 4853
BETA TRANS LEASING VERWALTUNGS GMBH Germany 100 100 Y 3326
BETA TRANS LEASING VERWALTUNGS GMBH & CO.
FINANZIERUNGS-MANAGEMENT KG Germany 0 100 Y 4853
DRITTE BETA TRANS LEASING VERWALTUNGS GMBH & CO.
FINANZIERUNGS-MANAGEMENT KG Frankfurt, Germany 0 100 Y 5293
FUENFTE BETA TRANS LEASING VERWALTUNGS GMBH & CO.
FINANZIERUNGS-MANAGEMENT KG Frankfurt, Germany 0 100 Y 5295
VIERTE BETA TRANS LEASING VERWALTUNGS GMBH & CO.
FINANZIERUNGS-MANAGEMENT KG Frankfurt, Germany 0 100 Y 5300
ZWEITE BETA TRANS LEASING VERWALTUNGS GMBH & CO.
FINANZIERUNGS-MANAGEMENT KG Frankfurt, Germany 0 100 Y 5302
DREISSIGSTE GAMMA TRANS LEASING VERWALTUNGS GMBH & CO. Nidderau, Germany 100 100 Y 5292
FINANZIERUNGS-MANAGEMENT KG
DREIUNDZWANZIGSTE GAMMA TRANS LEASING VERWALTUNGS GMBH & CO. Nidderau, Germany 100 100 Y 5291
FINANZIERUNGS-MANAGEMENT KG
DRITTE BETA TRANS LEASING VERWALTUNGS GMBH & CO.
FINANZIERUNGS-MANAGEMENT KG Frankfurt, Germany 100 100 Y 5293
EINUNDDREISSIGSTE GAMMA TRANS LEASING VERWALTUNGS GMBH & CO. Nidderau, Germany 100 100 Y 5294
FINANZIERUNGS-MANAGEMENT KG
EINUNDZWANZIGSTE GAMMA TRANS LEASING VERWALTUNGS GMBH & CO. Germany 100 100 Y 5016
FINANZIERUNGS-MANAGEMENT KG
FUENFTE BETA TRANS LEASING VERWALTUNGS GMBH & CO.
FINANZIERUNGS-MANAGEMENT KG Frankfurt, Germany 100 100 Y 5295
</TABLE>
1 2 3 4 5 6 7 8 9 10 11 12 13
<TABLE>
<S> <C>
FOOTNOTES: (1)MANAGERIAL CONTROL; (2)INTEREST >=25% OF A VOTING CLASS; Page 24
(3)TOTAL EQUITY >50%; (4)SUBSIDIARY OF COMPANY DEEMED TO BE CONTROLLED;
(5)RELATED CONTRACT DEEMED TO GIVE CITI CONTROL; (6)SPONSORED/ADVISED FUND;
(7)FEDERAL RESERVE CONDITION OF APPROVAL
</TABLE>
<PAGE> 25
<TABLE>
<S> <C> <C> <C> <C> <C>
FUENFUNDZWANZIGSTE GAMMA TRANS LEASING VERWALTUNGS GMBH & CO. Nidderau, Germany 100 100 Y 5296
FINANZIERUNGS-MANAGEMENT KG
GAMMA TRANS LEASING VERWALTUNGS GMBH Germany 100 100 Y 3327
ACHTUNDZWANZIGSTE GAMMA TRANS LEASING VERWALTUNGS GMBH & CO. Nidderau, Germany 0 100 Y 5290
FINANZIERUNGS-MANAGEMENT KG
ACHTZEHNTE GAMMA TRANS LEASING VERWALTUNGS GMBH & CO. Germany 0 100 Y 5013
FINANZIERUNGS-MANAGEMENT KG
DREISSIGSTE GAMMA TRANS LEASING VERWALTUNGS GMBH & CO. Nidderau, Germany 0 100 Y 5292
FINANZIERUNGS-MANAGEMENT KG
DREIUNDZWANZIGSTE GAMMA TRANS LEASING VERWALTUNGS GMBH & CO. Nidderau, Germany 0 100 Y 5291
FINANZIERUNGS-MANAGEMENT KG
DREIZEHNTE GAMMA TRANS LEASING VERWALTUNGS GMBH & CO. Germany 0 0 Y (1) 4763
FINANZIERUNGS-MANAGEMENT KG
EINUNDDREISSIGSTE GAMMA TRANS LEASING VERWALTUNGS GMBH & CO. Nidderau, Germany 0 100 Y 5294
FINANZIERUNGS-MANAGEMENT KG
EINUNDZWANZIGSTE GAMMA TRANS LEASING VERWALTUNGS GMBH & CO. Germany 0 100 Y 5016
FINANZIERUNGS-MANAGEMENT KG
ELFTE GAMMA TRANS LEASING VERWALTUNGS GMBH & CO.
FINANZIERUNGS-MANAGEMENT KG Germany 0 0 Y (1) 4764
FUENFUNDZWANZIGSTE GAMMA TRANS LEASING VERWALTUNGS GMBH & CO. Nidderau, Germany 0 100 Y 5296
FINANZIERUNGS-MANAGEMENT KG
FUENFZEHNTE GAMMA TRANS LEASING VERWALTUNGS GMBH & CO. Germany 0 0 Y (1) 5010
FINANZIERUNGS-MANAGEMENT KG
GAMMA TRANS LEASING VERWALTUNGS GMBH & CO.
ACHTE FINANZIERUNGS-MANAGEMENT KG Germany 0 0 Y (1) 4513
GAMMA TRANS LEASING VERWALTUNGS GMBH & CO.
DRITTE FINANZIERUNGS-MANAGEMENT KG Germany 0 0 Y (1) 4361
GAMMA TRANS LEASING VERWALTUNGS GMBH & CO.
FINANZIERUNGS-MANAGEMENT KG Germany 0 0 Y (1) 4760
</TABLE>
1 2 3 4 5 6 7 8 9 10 11 12 13
<TABLE>
<S> <C>
FOOTNOTES: (1)MANAGERIAL CONTROL; (2)INTEREST >=25% OF A VOTING CLASS; Page 25
(3)TOTAL EQUITY >50%; (4)SUBSIDIARY OF COMPANY DEEMED TO BE CONTROLLED;
(5)RELATED CONTRACT DEEMED TO GIVE CITI CONTROL; (6)SPONSORED/ADVISED FUND;
(7)FEDERAL RESERVE CONDITION OF APPROVAL
</TABLE>
<PAGE> 26
<TABLE>
<S> <C> <C> <C> <C> <C>
GAMMA TRANS LEASING VERWALTUNGS GMBH & CO.
FUENFTE FINANZIERUNGS-MANAGEMENT KG Germany 0 0 Y (1) 4360
GAMMA TRANS LEASING VERWALTUNGS GMBH & CO.
NEUNTE FINANZIERUNGS-MANAGEMENT KG Germany 0 0 Y (1) 4514
GAMMA TRANS LEASING VERWALTUNGS GMBH & CO. SECHSTE Germany 0 0 Y (1) 4515
FINANZIERUNGS-MANAGEMENT KG
GAMMA TRANS LEASING VERWALTUNGS GMBH & CO.
SIEBTE FINANZIERUNGS-MANAGEMENT KG Germany 0 0 Y (1) 4516
GAMMA TRANS LEASING VERWALTUNGS GMBH & CO.
VIERTE FINANZIERUNGS-MANAGEMENT KG Germany 0 0 Y (1) 4362
GAMMA TRANS LEASING VERWALTUNGS GMBH & CO.
ZWEITE FINANZIERUNGS-MANAGEMENT KG Germany 0 0 Y (1) 4363
NEUNUNDZWANZIGSTE GAMMA TRANS LEASING VERWALTUNGS GMBH & CO. Nidderau, Germany 0 100 Y 5297
FINANZIERUNGS-MANAGEMENT KG
NEUNZEHNTE GAMMA TRANS LEASING VERWALTUNGS GMBH & CO. Germany 0 100 Y 5014
FINANZIERUNGS-MANAGEMENT KG
SECHSUNDZWANZIGSTE GAMMA TRANS LEASING VERWALTUNGS GMBH & CO. Nidderau, Germany 0 100 Y 5298
FINANZIERUNGS-MANAGEMENT KG
SECHZEHNTE GAMMA TRANS LEASING VERWALTUNGS GMBH & CO. Germany 0 0 Y (1) 5011
FINANZIERUNGS-MANAGEMENT KG
SIEBENUNDZWANZIGSTE GAMMA TRANS LEASING VERWALTUNGS GMBH & CO. Nidderau, Germany 0 100 Y 5299
FINANZIERUNGS-MANAGEMENT KG
SIEBZEHNTE GAMMA TRANS LEASING VERWALTUNGS GMBH & CO. Germany 0 0 Y (1) 5012
FINANZIERUNGS-MANAGEMENT KG
VIERUNDZWANZIGSTE GAMMA TRANS LEASING VERWALTUNGS GMBH & CO. Nidderau, Germany 0 100 Y 5301
FINANZIERUNGS-MANAGEMENT KG
VIERZEHNTE GAMMA TRANS LEASING VERWALTUNGS GMBH & CO. Germany 0 0 Y (1) 4765
FINANZIERUNGS-MANAGEMENT KG
ZEHNTE GAMMA TRANS LEASING VERWALTUNGS GMBH & CO.
</TABLE>
1 2 3 4 5 6 7 8 9 10 11 12 13
<TABLE>
<S> <C>
FOOTNOTES: (1)MANAGERIAL CONTROL; (2)INTEREST >=25% OF A VOTING CLASS; Page 26
(3)TOTAL EQUITY >50%; (4)SUBSIDIARY OF COMPANY DEEMED TO BE CONTROLLED;
(5)RELATED CONTRACT DEEMED TO GIVE CITI CONTROL; (6)SPONSORED/ADVISED FUND;
(7)FEDERAL RESERVE CONDITION OF APPROVAL
</TABLE>
<PAGE> 27
<TABLE>
<S> <C> <C> <C> <C> <C>
FINANZIERUNGS-MANAGEMENT KG Germany 0 0 Y (1) 4766
ZWANZIGSTE GAMMA TRANS LEASING VERWALTUNGS GMBH & CO. Germany 0 100 Y 5015
FINANZIERUNGS-MANAGEMENT KG
ZWEIUNDZWANZIGSTE GAMMA TRANS LEASING VERWALTUNGS GMBH & CO. Nidderau, Germany 0 100 Y 5303
FINANZIERUNGS-MANAGEMENT KG
ZWOELFTE GAMMA TRANS LEASING VERWALTUNGS GMBH & CO. Germany 0 0 Y (1) 4767
FINANZIERUNGS-MANAGEMENT KG
NEUNUNDZWANZIGSTE GAMMA TRANS LEASING VERWALTUNGS GMBH & CO. Nidderau, Germany 100 100 Y 5297
FINANZIERUNGS-MANAGEMENT KG
NEUNZEHNTE GAMMA TRANS LEASING VERWALTUNGS GMBH & CO. Germany 100 100 Y 5014
FINANZIERUNGS-MANAGEMENT KG
SECHSUNDZWANZIGSTE GAMMA TRANS LEASING VERWALTUNGS GMBH & CO. Nidderau, Germany 100 100 Y 5298
FINANZIERUNGS-MANAGEMENT KG
SIEBENUNDZWANZIGSTE GAMMA TRANS LEASING VERWALTUNGS GMBH & CO. Nidderau, Germany 100 100 Y 5299
FINANZIERUNGS-MANAGEMENT KG
VIERTE BETA TRANS LEASING VERWALTUNGS GMBH & CO.
FINANZIERUNGS-MANAGEMENT KG Frankfurt, Germany 100 100 Y 5300
VIERUNDZWANZIGSTE GAMMA TRANS LEASING VERWALTUNGS GMBH & CO. Nidderau, Germany 100 100 Y 5301
FINANZIERUNGS-MANAGEMENT KG
ZWANZIGSTE GAMMA TRANS LEASING VERWALTUNGS GMBH & CO. Germany 100 100 Y 5015
FINANZIERUNGS-MANAGEMENT KG
ZWEITE BETA TRANS LEASING VERWALTUNGS GMBH & CO.
FINANZIERUNGS-MANAGEMENT KG Frankfurt, Germany 100 100 Y 5302
ZWEIUNDZWANZIGSTE GAMMA TRANS LEASING VERWALTUNGS GMBH & CO. Nidderau, Germany 100 100 Y 5303
FINANZIERUNGS-MANAGEMENT KG
CITICORP OPERATIONS CONSULTING GMBH Germany 100 100 Y 4076
CITIFINANZBERATUNG GMBH Germany 100 100 Y 376
CITICORP DINERS CLUB SWITZERLAND LTD. Bruttisellen, Switzerland 100 100 Y 7003
CITICORP EUROPEAN SERVICE CENTER B.V. Netherlands 100 100 Y 531
</TABLE>
1 2 3 4 5 6 7 8 9 10 11 12 13
<TABLE>
<S> <C>
FOOTNOTES: (1)MANAGERIAL CONTROL; (2)INTEREST >=25% OF A VOTING CLASS; Page 27
(3)TOTAL EQUITY >50%; (4)SUBSIDIARY OF COMPANY DEEMED TO BE CONTROLLED;
(5)RELATED CONTRACT DEEMED TO GIVE CITI CONTROL; (6)SPONSORED/ADVISED FUND;
(7)FEDERAL RESERVE CONDITION OF APPROVAL
</TABLE>
<PAGE> 28
<TABLE>
<S> <C> <C> <C> <C> <C>
CITICORP FINANCE (INDIA) LIMITED India 100 100 Y 4915
CITICORP INFORMATION TECHNOLOGY INDUSTRIES LIMITED Mumbai, India 10.5 49.47 Y (1) 3286
CITICORP MARUTI FINANCE LTD. New Delhi, India 74 74 Y 5060
CITICORP OVERSEAS SOFTWARE LIMITED Mumbai, India 0 100 Y 1846
CITICORP FINANCE & SECURITIES (THAILAND) LTD. Thailand 100 100 Y 442
CITICORP FINANCE INTERNATIONAL LTD. Bermuda 100 100 Y 3192
CITICORP FINANCE IRELAND LIMITED Ireland 100 100 Y 2623
CITICORP (DUBLIN) FINANCE Ireland 100 100 Y 2624
CITICORP FINANCIAL SERVICES CORPORATION Puerto Rico 100 100 Y 445
CITICORP FINANCIAL SERVICES LIMITED Hong Kong 100 100 Y 1408
CITICORP FINANZIARIA S.P.A. Italy 100 100 Y 446
CITICORP FSC I LTD. Bermuda 100 100 Y 4431
CITICORP GENERAL INSURANCE AGENCY CORPORATION Taiwan 100 100 Y 4851
CITICORP GULF FINANCE LTD. United Arab Emirates 100 100 Y 448
CITICORP INSURANCE AGENCY CO., LTD. Taiwan 100 100 Y 3880
CITICORP INTERNATIONAL LIMITED Hong Kong 100 100 Y 1289
CITICORP INTERNATIONAL SECURITIES FINANCE LTD United Kingdom 100 100 Y 1653
CITICORP INTERNATIONAL SECURITIES LTD England 100 100 Y 1654
VICKERS DA COSTA LIMITED England 100 100 Y 3302
CITICORP INVERSORA S.A. GERENTE DE FONDOS COMUNES DE INVERSION Argentina 100 100 Y 1859
CITICORP INVESTICNI SPOLECNOST, A.S. Prague, Czech Republic 100 100 Y 4844
CITICORP INVESTMENT BANK (SINGAPORE) LIMITED Singapore 100 100 Y 1291
CITICORP INVESTMENT SERVICES LIMITED Hong Kong 100 100 Y 450
CITICORP LEASING (THAILAND) LIMITED Thailand 100 100 Y 2439
CITICORP LEASING ARGENTINA S.A. Buenos Aires, Argentina 100 100 Y 4958
CITICORP LEASING INTERNATIONAL, INC. Delaware 100 100 Y 453
CITICORP CARD SERVICES, INC. Delaware 100 100 Y 2359
CITICORP CREDIT, INC. Japan 100 100 Y 1314
</TABLE>
1 2 3 4 5 6 7 8 9 10 11 12 13
<TABLE>
<S> <C>
FOOTNOTES: (1)MANAGERIAL CONTROL; (2)INTEREST >=25% OF A VOTING CLASS; Page 28
(3)TOTAL EQUITY >50%; (4)SUBSIDIARY OF COMPANY DEEMED TO BE CONTROLLED;
(5)RELATED CONTRACT DEEMED TO GIVE CITI CONTROL; (6)SPONSORED/ADVISED FUND;
(7)FEDERAL RESERVE CONDITION OF APPROVAL
</TABLE>
<PAGE> 29
<TABLE>
<S> <C> <C> <C> <C> <C>
CITILEASE COMPANY LTD. Japan 100 100 Y 1309
AARHUS AIRCRAFT LTD. Japan 100 100 Y 3453
ALPHA AIRCRAFT LTD. Japan 100 100 Y 3114
AMS AIRCRAFT LTD. Japan 100 100 Y 3575
ANDROMEDA CITIAIRCRAFT LTD. Japan 100 100 Y 2303
ARBOGA AIRCRAFT LTD. Japan 100 100 Y 4323
ARIZONA AIRCRAFT LTD. Japan 100 100 Y 3576
ARLANDA AIRCRAFT LTD. Japan 100 100 Y 3372
ASCOT AIRCRAFT LTD. Japan 100 100 Y 3179
ATLANTA AIRCRAFT LTD. Japan 100 100 Y 2884
BALTIC AIRCRAFT LTD. Japan 100 100 Y 4757
BETA AIRCRAFT LTD. Japan 100 100 Y 3115
BIRMINGHAM AIRCRAFT LTD. Japan 100 100 Y 4206
BISHOP AIRCRAFT LTD. Japan 100 100 Y 2980
BOSTON AIRCRAFT LTD. Japan 100 100 Y 2981
BRISTOL AIRCRAFT LTD. Japan 100 100 Y 3886
BROMMA AIRCRAFT LTD. Japan 100 100 Y 3454
BUNGA EMAS LTD. Japan 100 100 Y 5131
CALIFORNIA AIRCRAFT LTD. Japan 100 100 Y 3748
CAMBRIDGE AIRCRAFT LTD. Japan 100 100 Y 4008
CASTLE AIRCRAFT LTD. Japan 100 100 Y 2982
CHARLIE AIRCRAFT LTD. Japan 100 100 Y 3116
CHICAGO AIRCRAFT LTD. Japan 100 100 Y 2983
COLORADO AIRCRAFT LTD. Japan 100 100 Y 3577
CONDOR AIRCRAFT LTD. Japan 100 100 Y 2865
COVENTRY AIRCRAFT LTD. Japan 100 100 Y 3885
CRANE AIRCRAFT LTD. Japan 100 100 Y 2866
CROWN AIRCRAFT LTD. Japan 100 100 Y 2867
</TABLE>
1 2 3 4 5 6 7 8 9 10 11 12 13
<TABLE>
<S> <C>
FOOTNOTES: (1)MANAGERIAL CONTROL; (2)INTEREST >=25% OF A VOTING CLASS; Page 29
(3)TOTAL EQUITY >50%; (4)SUBSIDIARY OF COMPANY DEEMED TO BE CONTROLLED;
(5)RELATED CONTRACT DEEMED TO GIVE CITI CONTROL; (6)SPONSORED/ADVISED FUND;
(7)FEDERAL RESERVE CONDITION OF APPROVAL
</TABLE>
<PAGE> 30
<TABLE>
<S> <C> <C> <C> <C> <C>
CRUX LEASING CO. LTD. Japan 100 100 Y 5132
CSA ROBIN AIRCRAFT LTD. Japan 100 100 Y 4717
CSA SWAN AIRCRAFT LTD. Japan 100 100 Y 4829
CURIE AIRCRAFT LTD. Japan 100 100 Y 4052
DAINI CITIAIRCRAFT LTD. Japan 100 100 Y 2304
DALLAS AIRCRAFT LTD. Japan 100 100 Y 2984
DELTA AIRCRAFT LTD. Japan 100 100 Y 3117
DENVER AIRCRAFT LTD. Japan 100 100 Y 3650
DETROIT AIRCRAFT LTD. Japan 100 100 Y 3220
DONAU AIRCRAFT LTD. Japan 100 100 Y 3118
DURHAM AIRCRAFT LTD. Japan 100 100 Y 4405
EAGLE AIRCRAFT LTD. Japan 100 100 Y 4432
ECHO AIRCRAFT LTD. Japan 100 100 Y 3119
EIFFEL AIRCRAFT LTD. Japan 100 100 Y 3221
ELBE AIRCRAFT LTD. Japan 100 100 Y 3120
ELYSEE AIRCRAFT LTD. Japan 100 100 Y 3222
EMS AIRCRAFT LTD. Japan 100 100 Y 3144
ENNS LEASE CO., LTD. Japan 100 100 Y 2305
EPSILON AIRCRAFT LTD. Japan 100 100 Y 3145
ERIE AIRCRAFT LTD. Japan 100 100 Y 3373
EUROPE AIRCRAFT LTD. Japan 100 100 Y 3884
FAIRFIELD AIRCRAFT LTD. Japan 100 100 Y 4494
FLORIDA AIRCRAFT LTD. Japan 100 100 Y 3676
FORNEBU AIRCRAFT LTD. Japan 100 100 Y 3455
FOXTROT AIRCRAFT LTD. Japan 100 100 Y 3121
GAMMA AIRCRAFT LTD. Japan 100 100 Y 3146
GOTEBORG AIRCRAFT LTD. Japan 100 100 Y 4275
HAGUE AIRCRAFT LTD. Japan 100 100 Y 3578
</TABLE>
1 2 3 4 5 6 7 8 9 10 11 12 13
<TABLE>
<S> <C>
FOOTNOTES: (1)MANAGERIAL CONTROL; (2)INTEREST >=25% OF A VOTING CLASS; Page 30
(3)TOTAL EQUITY >50%; (4)SUBSIDIARY OF COMPANY DEEMED TO BE CONTROLLED;
(5)RELATED CONTRACT DEEMED TO GIVE CITI CONTROL; (6)SPONSORED/ADVISED FUND;
(7)FEDERAL RESERVE CONDITION OF APPROVAL
</TABLE>
<PAGE> 31
<TABLE>
<S> <C> <C> <C> <C> <C>
HAVEL AIRCRAFT LTD. Japan 100 100 Y 3481
HONOLULU AIRCRAFT LTD. Japan 100 100 Y 3223
HOUSTON AIRCRAFT LTD. Japan 100 100 Y 2985
HURON AIRCRAFT LTD. Japan 100 100 Y 3374
HUSKVARNA AIRCRAFT LTD. Japan 100 100 Y 4324
ILLINOIS AIRCRAFT LTD. Japan 100 100 Y 3579
INDIANA AIRCRAFT LTD. Japan 100 100 Y 3675
ISAR AIRCRAFT LTD. Japan 100 100 Y 3122
ITHACA AIRCRAFT LTD. Japan 100 100 Y 2945
JOTA AIRCRAFT LTD. Japan 100 100 Y 3147
JUPITER AIRCRAFT LTD. Japan 100 100 Y 4802
KING AIRCRAFT LTD. Japan 100 100 Y 2885
KNIGHT AIRCRAFT LTD. Japan 100 100 Y 2986
LA AIRCRAFT LTD. Japan 100 100 Y 2886
LAHN AIRCRAFT LTD. Japan 100 100 Y 3652
LAMBDA AIRCRAFT LTD. Japan 100 100 Y 3148
LEONE LEASE LTD. Japan 100 100 Y 4795
LINDEN CITIAIRCRAFT LTD. Japan 100 100 Y 2629
LIVERPOOL AIRCRAFT LTD. Japan 100 100 Y 4166
LOIRE AIRCRAFT LTD. Japan 100 100 Y 3207
LONDON AIRCRAFT LTD. Japan 100 100 Y 4009
LOUVRE AIRCRAFT LTD. Japan 100 100 Y 3224
MADRID AIRCRAFT LTD. Japan 100 100 Y 4053
MAIN AIRCRAFT LTD. Japan 100 100 Y 3149
MANCHESTER AIRCRAFT LTD. Japan 100 100 Y 4167
MAPLE AIRCRAFT LTD. Japan 100 100 Y 2479
MARSEILLES AIRCRAFT LTD. Japan 100 100 Y 4010
METTE AIRCRAFT LTD. Japan 100 100 Y 3071
</TABLE>
1 2 3 4 5 6 7 8 9 10 11 12 13
<TABLE>
<S> <C>
FOOTNOTES: (1)MANAGERIAL CONTROL; (2)INTEREST >=25% OF A VOTING CLASS; Page 31
(3)TOTAL EQUITY >50%; (4)SUBSIDIARY OF COMPANY DEEMED TO BE CONTROLLED;
(5)RELATED CONTRACT DEEMED TO GIVE CITI CONTROL; (6)SPONSORED/ADVISED FUND;
(7)FEDERAL RESERVE CONDITION OF APPROVAL
</TABLE>
<PAGE> 32
<TABLE>
<S> <C> <C> <C> <C> <C>
MIAMI AIRCRAFT LTD. Japan 100 100 Y 2946
MICHIGAN AIRCRAFT LTD. Japan 100 100 Y 3376
MILWAUKEE AIRCRAFT LTD. Japan 100 100 Y 2987
MINNESOTA AIRCRAFT LTD. Japan 100 100 Y 3749
MOLEN AIRCRAFT LTD. Japan 100 100 Y 3225
MOSEL AIRCRAFT LTD. Japan 100 100 Y 3653
NASHVILLE AIRCRAFT LTD. Japan 100 100 Y 2887
NECKAR AIRCRAFT LTD. Japan 100 100 Y 3150
NS CITITRAIN LTD. Japan 100 100 Y 2578
ODER AIRCRAFT LTD. Japan 100 100 Y 3482
OHIO AIRCRAFT LTD. Japan 100 100 Y 3651
OREGON AIRCRAFT LTD. Japan 100 100 Y 3580
OTTAWA AIRCRAFT LTD. Japan 100 100 Y 2988
OXFORD AIRCRAFT LTD. Japan 100 100 Y 4389
PARIS AIRCRAFT LTD. Japan 100 100 Y 3208
PEGASUS LEASING CO. LTD. Japan 100 100 Y 5133
PHOENIX AIRCRAFT LTD. Japan 100 100 Y 2989
QUEBEC AIRCRAFT LTD. Japan 100 100 Y 2990
QUEEN AIRCRAFT LTD. Japan 100 100 Y 2888
RHEIN AIRCRAFT LTD. Japan 100 100 Y 3123
ROTTER AIRCRAFT LTD. Japan 100 100 Y 3581
SAALE AIRCRAFT LTD. Japan 100 100 Y 3483
SAKURA FA CITIAIRCRAFT LTD. Japan 100 100 Y 2616
SEAGULL AIRCRAFT LTD. Japan 100 100 Y 4325
SEATTLE AIRCRAFT LTD. Japan 100 100 Y 3035
SEINE AIRCRAFT LTD. Japan 100 100 Y 3209
SIGMA AIRCRAFT LTD. Japan 100 100 Y 3151
ST. LOUIS AIRCRAFT LTD. Japan 100 100 Y 2811
</TABLE>
1 2 3 4 5 6 7 8 9 10 11 12 13
<TABLE>
<S> <C>
FOOTNOTES: (1)MANAGERIAL CONTROL; (2)INTEREST >=25% OF A VOTING CLASS; Page 32
(3)TOTAL EQUITY >50%; (4)SUBSIDIARY OF COMPANY DEEMED TO BE CONTROLLED;
(5)RELATED CONTRACT DEEMED TO GIVE CITI CONTROL; (6)SPONSORED/ADVISED FUND;
(7)FEDERAL RESERVE CONDITION OF APPROVAL
</TABLE>
<PAGE> 33
<TABLE>
<S> <C> <C> <C> <C> <C>
STAMFORD AIRCRAFT LTD. Japan 100 100 Y 3838
STOCKHOLM AIRCRAFT LTD. Japan 100 100 Y 4277
TACHIBANA FA CITIAIRCRAFT LTD. Japan 100 100 Y 2617
TAMPA AIRCRAFT LTD. Japan 100 100 Y 3226
THETA AIRCRAFT LTD. Japan 100 100 Y 3152
TOKYO FA CITIAIRCRAFT LTD. Japan 100 100 Y 2478
TORONTO AIRCRAFT LTD. Japan 100 100 Y 2965
UPPSALA AIRCRAFT LTD. Japan 100 100 Y 4276
UTRECHT AIRCRAFT LTD. Japan 100 100 Y 3582
VANCOUVER AIRCRAFT LTD. Japan 100 100 Y 3036
VENUS AIRCRAFT LTD. Japan 100 100 Y 4893
VERSAILLES AIRCRAFT LTD. Japan 100 100 Y 3227
WASHINGTON AIRCRAFT LTD. Japan 100 100 Y 2889
WINDSOR AIRCRAFT LTD. Japan 100 100 Y 4326
ZWOLLE AIRCRAFT LTD. Japan 100 100 Y 3583
CITICORP MENKUL KIYMETLER ANONIM SIRKETI Turkey 100 100 Y 4478
CITICORP MERCHANT BANK LIMITED Trinidad & Tobago 100 100 Y 2457
CITIBANK (TRINIDAD & TOBAGO) LIMITED Trinidad & Tobago 100 100 Y 661
CITICORP OVERSEAS SOFTWARE LIMITED Mumbai, India 100 100 Y 1846
CITICORP BROKERAGE (INDIA) LIMITED India 100 100 Y 4512
CITICORP INFORMATION TECHNOLOGY INDUSTRIES LIMITED Mumbai, India 38.9 49.47 Y (1) 3286
CITICORP SECURITIES AND INVESTMENTS LIMITED India 5 37.4 Y (1) 3574
CITICORP P.R. MORTGAGE, INC. Puerto Rico 100 100 Y 3721
CITICORP PENSION MANAGEMENT LTD. Bahamas 100 100 Y 4132
CITICORP PERU S.A. SOCIEDAD AGENTE DE BOLSA Peru 6.90 100 Y 2214
CITICORP PERU SOCIEDAD TITULIZADORA S.A. Lima, Peru 100 100 Y 4994
CITILEASING S.A. Peru 1.08 100 Y 4110
CITICORP SECURITIES (JAPAN) LIMITED Cayman Islands 100 100 Y 7259
</TABLE>
1 2 3 4 5 6 7 8 9 10 11 12 13
<TABLE>
<S> <C>
FOOTNOTES: (1)MANAGERIAL CONTROL; (2)INTEREST >=25% OF A VOTING CLASS; Page 33
(3)TOTAL EQUITY >50%; (4)SUBSIDIARY OF COMPANY DEEMED TO BE CONTROLLED;
(5)RELATED CONTRACT DEEMED TO GIVE CITI CONTROL; (6)SPONSORED/ADVISED FUND;
(7)FEDERAL RESERVE CONDITION OF APPROVAL
</TABLE>
<PAGE> 34
<TABLE>
<S> <C> <C> <C> <C> <C>
CITICORP SECURITIES BOLIVIA S.A. Bolivia 100 100 Y 4854
CITICORP SECURITIES AND INVESTMENTS LIMITED India 32.4 37.4 Y (1) 3574
CITICORP CREDIT SERVICES INDIA LIMITED India 52.2 16.94 Y (4) 3922
CITICORP SECURITIES INTERNATIONAL (RP) INC. Philippines 100 100 Y 2417
CITICORP FINANCIAL SERVICES AND INSURANCE BROKERAGE PHILIPPINES, INC. Philippines 90 100 Y 5181
VERITAS HOLDINGS LIMITED British Virgin Islands 100 100 Y 7199
CITICORP SECURITIES WEST AFRICA Abidjan, Ivory Coast 100 100 Y 5018
CITICORP SERVICES LIMITED New Zealand 100 100 Y 465
ADVANCED FUTURES LIMITED New Zealand 100 100 Y 2550
CITIBANK GLOBAL ASSET MANAGEMENT LIMITED New Zealand 100 100 Y 1505
CITIBANK NOMINEES (NEW ZEALAND) LIMITED New Zealand 100 100 Y 2939
CITICORP CAPITAL MARKETS NEW ZEALAND LIMITED New Zealand 100 100 Y 2830
CITICORP NEW ZEALAND LIMITED New Zealand 100 100 Y 466
FUTURE TECHNOLOGY LIMITED New Zealand 100 100 Y 3194
OPTIONAL DEVELOPMENT HOLDINGS LIMITED New Zealand 100 100 Y 2997
SEABIRD LIMITED New Zealand 100 100 Y 2516
CITICORP SERVIUM S.A. Peru 100 100 Y 2212
CITICORP PERU S.A. SOCIEDAD AGENTE DE BOLSA Peru 93.0 100 Y 2214
CITICORP PERU SOCIEDAD TITULIZADORA S.A. Lima, Peru 100 100 Y 4994
CITILEASING S.A. Peru 1.08 100 Y 4110
CITILEASING S.A. Peru 98.9 100 Y 4110
CITICORP SUBSAHARA INVESTMENTS, INC. Delaware 100 100 Y 1117
CITICORP TRADE SERVICES (MALAYSIA) SENDIRIAN BERHAD Malaysia 100 100 Y 4235
CITICORP TRUSTEE (SINGAPORE) LIMITED Singapore 100 100 Y 4877
CITICORP VENTURES PHILIPPINES, INC. Philippines 100 100 Y 3693
CITICREDITO S.A. Honduras 100 100 Y 2335
CITIDATOS S.A. Ecuador 100 100 Y 1545
CITIFINANCE LIMITED Jamaica 100 100 Y 536
</TABLE>
1 2 3 4 5 6 7 8 9 10 11 12 13
<TABLE>
<S> <C>
FOOTNOTES: (1)MANAGERIAL CONTROL; (2)INTEREST >=25% OF A VOTING CLASS; Page 34
(3)TOTAL EQUITY >50%; (4)SUBSIDIARY OF COMPANY DEEMED TO BE CONTROLLED;
(5)RELATED CONTRACT DEEMED TO GIVE CITI CONTROL; (6)SPONSORED/ADVISED FUND;
(7)FEDERAL RESERVE CONDITION OF APPROVAL
</TABLE>
<PAGE> 35
<TABLE>
<S> <C> <C> <C> <C> <C>
CITIMERCHANT BANK LIMITED Jamaica 100 100 Y 322
CITIFINANCE S.A. Port-au-Prince, Haiti 100 100 Y 5106
CITIFINANCIERA, S.A. Paraguay 100 100 Y 468
CITINVERSIONES, S.A. Guatemala City, Guatemala 100 100 Y 5234
CITINVEST S.P.A. Italy 100 100 Y 1485
CITILEASE, S.A. Belgium 100 100 Y 469
CITILEASE FINANSAL KIRALAMA ANONIM SIRKETI Turkey 100 100 Y 4792
CITILEASING (HUNGARY) LTD. Hungary 100 100 Y 4918
CITILEASING S.R.O. Czech Republic 100 100 Y 4705
CITINVEST CASA DE BOLSA SOCIEDAD ANONIMA Paraguay 100 100 Y 4261
CITINVESTMENT CHILE LIMITED Bahamas 100 100 Y 2554
CITIBANK CORREDORES DE SEGUROS LIMITADA Santiago, Chile 0.1 100 Y 3887
CITIPORTFOLIO LIMITED Channel Islands 100 100 Y 3654
CITIPROPERTIES (BVI) LIMITED British Virgin Is. 100 100 Y 3840
CITIREALTY (BVI) LIMITED British Virgin Is. 100 100 Y 4383
CITIREALTY (HONG KONG) LIMITED Hong Kong 100 100 Y 4384
CITIREALTY CHINA (BVI) LIMITED Tortola, Britisn Virgn Is. 100 100 Y 4961
GARDEN ROAD (BVI) LIMITED British Virgin Is. 100 100 Y 3836
CITIPROPERTIES (HONG KONG) LIMITED Hong Kong 100 100 Y 3837
CITISERVICE S.P.A. Italy 100 100 Y 471
CITITARJETAS DE GUATEMALA, S.A. Guatemala 100 100 Y 3791
CITITRUST (BAHAMAS) LIMITED Bahamas 100 100 Y 727
ALBACORE INVESTMENTS, LTD. Bahamas 100 100 Y 728
ANTARES ASSOCIATES LIMITED Bahamas 100 100 Y 4427
ASTAIRE ASSOCIATES LIMITED Bahamas 100 100 Y 4458
BEACONSFIELD HOLDINGS LIMITED Bahamas 100 100 Y 1407
CITITRUST SERVICES LIMITED Bahamas 100 100 Y 4390
DONAT INVESTMENTS S.A. Bahamas 100 100 Y 1400
</TABLE>
1 2 3 4 5 6 7 8 9 10 11 12 13
<TABLE>
<S> <C>
FOOTNOTES: (1)MANAGERIAL CONTROL; (2)INTEREST >=25% OF A VOTING CLASS; Page 35
(3)TOTAL EQUITY >50%; (4)SUBSIDIARY OF COMPANY DEEMED TO BE CONTROLLED;
(5)RELATED CONTRACT DEEMED TO GIVE CITI CONTROL; (6)SPONSORED/ADVISED FUND;
(7)FEDERAL RESERVE CONDITION OF APPROVAL
</TABLE>
<PAGE> 36
<TABLE>
<S> <C> <C> <C> <C> <C>
FIRST NATIONAL NOMINEES, LTD. Bahamas 100 100 Y 729
HITCHCOCK INVESTMENTS S.A. Bahamas 100 100 Y 1401
MADELEINE INVESTMENTS S.A. Bahamas 100 100 Y 1402
PROVIDENCE ASSOCIATES, LTD. Bahamas 100 100 Y 730
CITITRUST (CAYMAN) LIMITED Cayman Is. 100 100 Y 731
BRENNAN LIMITED Switzerland 100 100 Y 1697
BUCHANAN LIMITED Switzerland 100 100 Y 1734
TYLER LIMITED Switzerland 100 100 Y 1698
CITITRUST (JERSEY) LIMITED Channel Islands 100 100 Y 1762
SECUNDUS NOMINEES (JERSEY) LIMITED Channel Islands 100 100 Y 1764
TERTIUS NOMINEES (JERSEY) LIMITED Channel Islands 100 100 Y 1765
CITITRUST (KENYA) LIMITED Kenya 100 100 Y 2380
CITITRUST (SWITZERLAND) LIMITED Switzerland 100 100 Y 473
CITITRUST AND BANKING CORPORATION Japan 100 100 Y 2120
CITIVALORES DE HONDURAS, S.A. Honduras 100 100 Y 4433
CITIVALORES, S.A. Guatemala 100 100 Y 3204
CITIVALORES, S.A. Panama 100 100 Y 3112
CJSC CITIBANK KAZAKHSTAN Almaty, Kazakhstan 100 100 Y 5129
CORPIFEXSA, CORPORACION DE INVERSIONES Y FOMENTO DE EXPORTACIONES S.A. Ecuador 100 100 Y 2434
CITITRADING S.A. CASA DE VALORES Ecuador 100 100 Y 4449
INMOCITI S.A. Ecuador 100 100 Y 3415
CORPORACION CITIBANK G.F.C. S.A. San Jose, Costa Rica 100 100 Y 5203
ASESORES CORPORATIVOS DE COSTA RICA, S.A. Costa Rica 100 100 Y 2563
CITIBANK (COSTA RICA) SOCIEDAD ANONIMA Costa Rica 100 100 Y 464
CITISEGUROS DE COSTA RICA, S.A. San Jose, Costa Rica 100 100 Y 5057
CITITARJETAS, S.A. Costa Rica 100 100 Y 4657
CITIVALORES PUESTO DE BOLSA, S.A. Costa Rica 100 100 Y 2564
CREINVEST B.V. Netherlands 100 100 Y 3585
</TABLE>
1 2 3 4 5 6 7 8 9 10 11 12 13
<TABLE>
<S> <C>
FOOTNOTES: (1)MANAGERIAL CONTROL; (2)INTEREST >=25% OF A VOTING CLASS; Page 36
(3)TOTAL EQUITY >50%; (4)SUBSIDIARY OF COMPANY DEEMED TO BE CONTROLLED;
(5)RELATED CONTRACT DEEMED TO GIVE CITI CONTROL; (6)SPONSORED/ADVISED FUND;
(7)FEDERAL RESERVE CONDITION OF APPROVAL
</TABLE>
<PAGE> 37
<TABLE>
<S> <C> <C> <C> <C> <C>
DECAJO FINANCE APS Copenhagen, Denmark 100 100 Y 7304
DINERS CLUB (THAILAND) LIMITED, THE Thailand 100 100 Y 489
DINERS CLUB ARGENTINA S.A.C. Y DE T. Argentina 100 100 Y 483
DINERS TRAVEL S.A.C. Y DE T. Argentina 100 100 Y 484
SERVICIOS COMERCIALES S.A.C.I.M. Y F. Argentina 100 100 Y 486
DINERS CLUB ASIA, INC. Singapore 100 100 Y 488
DINERS CLUB BENELUX S.A., THE Belgium 100 100 Y 491
DINERS CLUB DE MEXICO S.A. DE C.V. Mexico 100 100 Y 1484
DINERS CLUB DEUTSCHLAND GMBH Germany 100 100 Y 502
DINERS CLUB DEUTSCHLAND UNTERSTUETZUNGSKASSE GMBH Germany 100 100 Y 3067
DINERS CLUB INTERNATIONAL (HONG KONG) LIMITED Hong Kong 100 100 Y 505
DINERS CLUB INTERNATIONAL (TAIWAN) LIMITED Taiwan 100 100 Y 2906
DINERS CLUB PTY. LTD. Australia 22.7 100 Y 507
DINERS FINANCE PTY. LIMITED Australia 100 100 Y 508
DINERS CLUB OF GREECE, S.A. Greece 100 100 Y 519
CITICORP PROCESSING SERVICES S.A. Greece 100 100 Y 2605
DINERS CLUB URUGUAY S.A. Uruguay 100 100 Y 523
FIMEN S.A. Belgium 100 100 Y 476
CITICORP INSURANCE SERVICES S.A./N.V. Belgium 100 100 Y 2386
CITIBANK INSURANCE SERVICES S.A. Greece 100 100 Y 3571
FNC-COMERCIO E PARTICIPACOES LTDA. Brazil 100 100 Y 543
CHELSEA-EMPREENDIMENTOS E PARTICIPACOES LIMITADA Brazil 100 100 Y 2848
CITIBANK COMPANHIA HIPOTECARIA S.A. Sao Paulo, Brazil 0.01 100 Y 5305
CITI CP MERCANTIL S.A. Brazil 100 100 Y 2576
CITIBANK LEASING S.A.-ARRENDAMENTO MERCANTIL Brazil 100 100 Y 560
CITICORP CORRETORA DE SEGUROS S.A. Brazil 100 100 Y 564
INTERCHANGE S.A. Brazil 25 25 Y (1) 3484
MIBRAK S.A. Uruguay 100 100 Y 3349
</TABLE>
1 2 3 4 5 6 7 8 9 10 11 12 13
<TABLE>
<S> <C>
FOOTNOTES: (1)MANAGERIAL CONTROL; (2)INTEREST >=25% OF A VOTING CLASS; Page 37
(3)TOTAL EQUITY >50%; (4)SUBSIDIARY OF COMPANY DEEMED TO BE CONTROLLED;
(5)RELATED CONTRACT DEEMED TO GIVE CITI CONTROL; (6)SPONSORED/ADVISED FUND;
(7)FEDERAL RESERVE CONDITION OF APPROVAL
</TABLE>
<PAGE> 38
<TABLE>
<S> <C> <C> <C> <C> <C>
RIBA-REPRESENTACOES PARTICIPACOES E ADMINISTRACAO LTDA. Brazil 99.4 99.44 Y 565
FOFIP S.A. Uruguay 88.5 88.54 Y 3879
FOREMOST INVESTMENT CORPORATION Delaware 100 100 Y 568
FREPERP 1 LLC Wilmington, Delaware 100 100 Y 5283
FREPERP 2 LLC Wilmington, Delaware 100 100 Y 5284
GLOBAL TRANSPORTATION INVESTMENTS INC. Bahamas 100 100 Y 3368
GRUPO FINANCIERO CITIBANK, S.A. DE C.V. Mexico 100 100 Y 4280
ARRENDADORA CITIBANK, S.A. DE C.V., ORGANIZACION AUXILIAR
DEL CREDITO, GRUPO FINANCIERO CITIBANK Mexico 100 100 Y 346
CASA DE BOLSA CITIBANK, S.A. DE C.V., GRUPO
FINANCIERO CITIBANK Mexico 100 100 Y 4281
CITIBANK MEXICO, S.A., GRUPO FINANCIERO CITIBANK Mexico 100 100 Y 4282
DESARROLLADORA MEXICANA DE INMUEBLES, S.A. DE C.V. Guadalajara, Mexico 75 75 Y 7163
HACIENDA EL CAMPANARIO, S.A. DE C.V. Mexico 51 51 Y 5313
IMREF S.A. DE C.V. Mexico 100 100 Y 1092
INMOBILIARIA CONFIA, S.A. DE C.V. Mexico 100 100 Y 5314
TRUST NUMBER F193-4 Mexico City, Mexico 100 100 Y 7278
HANSEATIC REAL ESTATE B.V. Netherlands 75 100 Y 3358
INARCO INTERNATIONAL BANK N.V. Aruba 100 100 Y 585
INTERCO (INTERMEDIACIONES COMERCIALES) S.A. Bolivia 100 100 Y 2243
INTERNATIONAL FINANCE ASSOCIATES, B.V. Netherlands 100 100 Y 586
CITICO, SGPS, LDA. Portugal 0.8 100 Y 4791
CITICORP INVESTMENT BANK (THE NETHERLANDS) N.V. Netherlands 100 100 Y 443
CITICORP LEASING NEDERLAND, B.V. Netherlands 100 100 Y 458
CITICORP FUBTINA LEASING B.V. Netherlands 100 100 Y 3355
CITICORP XACOBEO LEASING B.V. Netherlands 100 100 Y 3354
INVERSIONES CITICORP (R.D.), S.A. Santo Domingo, 100 100 Y 5249
Dominican Republic
INVERSIONES Y ADELANTOS, C.A. Venezuela 100 100 Y 592
</TABLE>
1 2 3 4 5 6 7 8 9 10 11 12 13
<TABLE>
<S> <C>
FOOTNOTES: (1)MANAGERIAL CONTROL; (2)INTEREST >=25% OF A VOTING CLASS; Page 38
(3)TOTAL EQUITY >50%; (4)SUBSIDIARY OF COMPANY DEEMED TO BE CONTROLLED;
(5)RELATED CONTRACT DEEMED TO GIVE CITI CONTROL; (6)SPONSORED/ADVISED FUND;
(7)FEDERAL RESERVE CONDITION OF APPROVAL
</TABLE>
<PAGE> 39
<TABLE>
<S> <C> <C> <C> <C> <C>
JSCB CITIBANK (UKRAINE) Kiev, Ukraine 100 100 Y 5056
LATIN AMERICAN INVESTMENT BANK BAHAMAS LIMITED Bahamas 100 100 Y 2976
BRAZIL BOND TRUST New York 100 100 Y 7319
CITIBRAZIL BOND FUND-FUNDO DE RENDA FIXA
CAPITAL ESTRANGEIRO Brazil 41.9 100 Y (6) 4112
CITIBANK BRAZILIAN ANNEX VI TRUST New York 100 100 Y 7320
FOREIGN INVESTMENT FUNDO RENDA FIXA CAPITAL
ESTRANGEIRO Sao Paulo, Brazil 100 100 Y 7084
CITIBRAZIL BOND FUND-FUNDO DE RENDA FIXA CAPITAL
ESTRANGEIRO Brazil 58.0 100 Y 0 4112
MATRIX LTD. Bermuda 100 100 Y 745
MENARA CITI HOLDING COMPANY SDN. BHD. Kuala Lumpur,
Malaysia 100 100 Y 7268
NESSUS INVESTMENT CORPORATION Delaware 100 100 Y 603
CITIBANK LIMITED Australia 100 100 Y 604
OUTSOURCING INVESTMENTS PTY. LIMITED Australia 100 100 Y 4428
INTEGRATED PROCESSING SOLUTIONS PTY. LIMITED Sydney, Australia 48.9 48.983 Y (5) 7013
CITICORP AUSTRALIA INTERNATIONAL FINANCE LIMITED Australia 100 100 Y 3572
CITICORP AUSTRALIA OVERSEAS FINANCE LIMITED Australia 100 100 Y 3589
CITICORP CAPITAL MARKETS AUSTRALIA LIMITED Australia 100 100 Y 1292
CITIFUTURES LIMITED Australia 100 100 Y 1549
CITISECURITIES LIMITED Australia 100 100 Y 1294
CSVA LIMITED Australia 100 100 Y 2090
CITICORP EQUITY CAPITAL LIMITED Australia 100 100 Y 362
CITICORP GROUP SUPERANNUATION LIMITED Australia 100 100 Y 7151
CITICORP INVESTMENTS LIMITED Australia 99.8 100 Y 621
CITICORP LIMITED Australia 100 100 Y 1651
CITICORP FINANCE PTY. LIMITED Australia 100 100 Y 619
CITICORP GENERAL INSURANCE LIMITED Australia 100 100 Y 609
CITICORP INVESTMENTS LIMITED Australia 0.12 100 Y 621
CITICORP LIFE INSURANCE LIMITED Australia 100 100 Y 614
CITICORP WHOLESALE PTY. LIMITED Australia 100 100 Y 608
</TABLE>
1 2 3 4 5 6 7 8 9 10 11 12 13
<TABLE>
<S> <C>
FOOTNOTES: (1)MANAGERIAL CONTROL; (2)INTEREST >=25% OF A VOTING CLASS; Page 39
(3)TOTAL EQUITY >50%; (4)SUBSIDIARY OF COMPANY DEEMED TO BE CONTROLLED;
(5)RELATED CONTRACT DEEMED TO GIVE CITI CONTROL; (6)SPONSORED/ADVISED FUND;
(7)FEDERAL RESERVE CONDITION OF APPROVAL
</TABLE>
<PAGE> 40
<TABLE>
<S> <C> <C> <C> <C> <C>
MARGARET STREET NOMINEES PTY. LIMITED Australia 100 100 Y 606
CITICORP NOMINEES PTY. LIMITED Australia 100 100 Y 1293
CITICORP REGIONAL SERVICE CENTRE PTY. LTD. Australia 100 100 Y 4588
PHINDA PTY. LIMITED Australia 100 100 Y 2297
REMITTANCE COLLECTION SERVICES LIMITED Australia 100 100 Y 2260
TARWOOD PTY. LIMITED Australia 100 100 Y 3281
DINERS CLUB PTY. LTD. Australia 77.2 100 Y 507
DINERS FINANCE PTY. LIMITED Australia 100 100 Y 508
NOSTRO INVESTMENT CORPORATION Delaware 100 100 Y 623
P.T. CITICORP FINANCE INDONESIA Indonesia 85 85 Y 628
P.T. CITICORP SECURITIES INDONESIA Indonesia 85 85 Y 3030
PAVEC DEVELOPMENTS LIMITED Ireland 100 100 Y 2625
PREMIUM FINANCE NO. 3 C.V. Netherlands 100 100 Y 4936
PRIMUS HOLDINGS, INC. Philippines 10 10 Y (3) 4402
CITICORP CAPITAL PHILIPPINES, INC. Philippines 47 100 Y 4403
PROVENCRED 1 George Town,
Cayman Is. 100 100 Y 7214
PROVENCRED 2 George Town,
Cayman Is. 100 100 Y 0 7215
SILEFED S.R.L. Buenos Aires,
Argentina 100 100 Y 7216
REPFIN LTDA. Colombia 100 100 Y 350
CITIBANK COLOMBIA Colombia 11.1 100 Y 354
CITITRUST COLOMBIA S.A. SOCIEDAD FIDUCIARIA Colombia 17.6 100 Y 3539
CITIVALORES S.A. COMISIONISTA DE BOLSA Colombia 95 100 Y 4011
COMPANIA EXPORTADORA CITYEXPORT S.A. Colombia 75.7 100 Y 475
CITIBANK COLOMBIA Colombia 3.8 100 Y 354
CITIVALORES S.A. COMISIONISTA DE BOLSA Colombia 5 100 Y 4011
LEASING CITIBANK S.A. COMPANIA DE FINANCIAMIENTO COMERCIAL Colombia 8.07 100 Y 347
SALOMON SMITH BARNEY SECURITIES (TAIWAN) LIMITED Taiwan 100 100 Y 5030
SCOTTISH PROVIDENT (IRISH HOLDINGS) LIMITED Ireland 100 100 Y 3587
</TABLE>
1 2 3 4 5 6 7 8 9 10 11 12 13
<TABLE>
<S> <C>
FOOTNOTES: (1)MANAGERIAL CONTROL; (2)INTEREST >=25% OF A VOTING CLASS; Page 40
(3)TOTAL EQUITY >50%; (4)SUBSIDIARY OF COMPANY DEEMED TO BE CONTROLLED;
(5)RELATED CONTRACT DEEMED TO GIVE CITI CONTROL; (6)SPONSORED/ADVISED FUND;
(7)FEDERAL RESERVE CONDITION OF APPROVAL
</TABLE>
<PAGE> 41
<TABLE>
<S> <C> <C> <C> <C> <C>
TARJETAS DE CHILE S.A. Chile 100 100 Y 1409
UNIVERSAL HOLDCORP, INC. Delaware 100 100 Y 5094
VIALATTEA LLC Delaware 100 100 Y 7284
BUCONERO LLC Delaware 100 100 Y 7285
GESLAT SRL Collecchio, Italy 0 15 Y (5) 7286
GESLAT SRL Collecchio, Italy 15 15 Y (5) 7286
YONDER INVESTMENT CORPORATION Delaware 100 100 Y 640
CITIBANK PREMIUM FINANCE NO. 1, LTD. Channel Islands 100 100 Y 4678
CITIBANK PREMIUM FINANCE NO. 2, LTD. Channel Islands 100 100 Y 4679
CITIBANK STRATEGIC TECHNOLOGY INC. New Castle, Delaware 100 100 Y 4952
CITIBANK ZAMBIA LIMITED Zambia 100 100 Y 714
CITIBUREAU ZAMBIA LIMITED Zambia 100 100 Y 3987
CITICAL, INC. California 100 100 Y 1156
ONE SANSOME STREET ASSOCIATES California 50 50 Y 1157
SANSOME LAND ASSOCIATES California 50 50 Y 2308
CITICORP CAPITAL INVESTORS, LIMITED Delaware 100 100 Y 3251
CITICORP MEZZANINE PARTNERS, L.P. New York 28.9 28.95 Y 4343
CITICORP MEZZANINE PARTNERS III, L.P. Delaware 1 1 Y (1) 7294
CVC CAPITAL FUNDING, INC. Delaware 100 100 Y 7310
CVC CAPITAL FUNDING, LLC Delaware 85 85 Y 7311
WORLD SUBORDINATED DEBT PARTNERS, L.P. Delaware 54.2 54.22 Y 3307
CITICORP ELECTRONIC COMMERCE, INC. New York 100 100 Y 1557
TRANSPOINT TECHNOLOGIES AND SERVICES LLC Delaware 25 25 Y 7293
TRANSPOINT ACCOUNTING LLC Delaware 50 12.5 Y (4) 7300
CITICORP FINANCE PUERTO RICO, INC. Puerto Rico 100 100 Y 2134
CITICORP FINANCIAL GUARANTY HOLDINGS, INC. Delaware 100 100 Y 1831
CITICORP INSURANCE SERVICES, INC. Delaware 100 100 Y 2283
CITICORP INTERIM SERVICES, INC. Delaware 100 100 Y 720
</TABLE>
1 2 3 4 5 6 7 8 9 10 11 12 13
<TABLE>
<S> <C>
FOOTNOTES: (1)MANAGERIAL CONTROL; (2)INTEREST >=25% OF A VOTING CLASS; Page 41
(3)TOTAL EQUITY >50%; (4)SUBSIDIARY OF COMPANY DEEMED TO BE CONTROLLED;
(5)RELATED CONTRACT DEEMED TO GIVE CITI CONTROL; (6)SPONSORED/ADVISED FUND;
(7)FEDERAL RESERVE CONDITION OF APPROVAL
</TABLE>
<PAGE> 42
<TABLE>
<S> <C> <C> <C> <C> <C>
ADV ELEVEN, INC. Delaware 100 100 Y 2362
AZ NOTES CORP. Arizona 100 100 Y 3770
MONACO ART CORP. New York 100 100 Y 4556
MBBT CORP. Florida 100 100 Y 3346
MR ABLES INC. New York 100 100 Y 3135
CITICORP INVESTMENT SERVICES Delaware 100 100 Y 2702
CITICORP LEASING, INC. Delaware 100 100 Y 721
ADV THREE, INC. Delaware 100 100 Y 1794
CM FSC II LIMITED Halilton, Bermuda 100 100 Y 7009
CM FSC III LIMITED Hamilton, Bermuda 100 100 Y 7010
CM FSC IV, LTD. Hamilton, Bermuda 100 100 Y 7011
CPI LEASING CORP. Connecticut 100 100 Y 2348
CITICORP MORTGAGE, INC. Delaware 100 100 Y 1188
CITICORP CREDIT SERVICES, INC. (MARYLAND) Delaware 100 100 Y 2960
CITICORP MORTGAGE SECURITIES, INC. Delaware 100 100 Y 2382
CPTPFC, INC. Delaware 100 100 Y 3853
EKS CORP. Delaware 100 100 Y 3545
SOURCE ONE MORTGAGE CORPORATION Delaware 100 100 Y 7155
CENTRAL PACIFIC MORTGAGE COMPANY California 100 100 Y 7158
CMC INSURANCE AGENCY, INC. Michigan 100 100 Y 7159
MHMC INSURANCE AGENCY, INC. Delaware 100 100 Y 7160
SOMSC SERVICES, INC. Michigan 100 100 Y 7161
CITICORP PAYMENT SERVICES, INC. Delaware 100 100 Y 4905
CITICORP REAL ESTATE, INC. Delaware 100 100 Y 722
CITICORP TRUST, N.A. (FLORIDA) USA 100 100 Y 1633
CITICORP TRUST, NATIONAL ASSOCIATION USA 100 100 Y 1783
CITICORP USA, INC. Delaware 100 100 Y 2915
CITICORP VENTURE CAPITAL LTD. New York 100 100 Y 724
</TABLE>
1 2 3 4 5 6 7 8 9 10 11 12 13
<TABLE>
<S> <C>
FOOTNOTES: (1)MANAGERIAL CONTROL; (2)INTEREST >=25% OF A VOTING CLASS; Page 42
(3)TOTAL EQUITY >50%; (4)SUBSIDIARY OF COMPANY DEEMED TO BE CONTROLLED;
(5)RELATED CONTRACT DEEMED TO GIVE CITI CONTROL; (6)SPONSORED/ADVISED FUND;
(7)FEDERAL RESERVE CONDITION OF APPROVAL
</TABLE>
<PAGE> 43
<TABLE>
<S> <C> <C> <C> <C> <C>
AIRXCEL HOLDINGS, INC. Delaware 30.9 30.9 Y 4681
AJAX HOLDING CORPORATION Delaware 47.8 47.8 Y 5268
ALARM HOLDINGS, INC. Texas 36.2 36.2 Y 4327
BOBS HOLDINGS, INC. Delaware 38.1 38.1 Y 5028
C & H SUGAR COMPANY, INC. Delaware 46.6 46.6 Y 7188
CABLE SYSTEMS HOLDING, LLC Delaware 39 39 Y 4569
CMH HOLDING CORPORATION Delaware 37.5 37.5 Y 4751
CORT BUSINESS SERVICES Virginia 45.7 45.7 Y 4088
DAVCO ACQUISITION HOLDING INC. Delaware 39.3 39.3 Y 5178
ELECTROCAL DESIGNS, INC. Connecticut 26.5 26.5 Y 4424
FABRISTEEL PRODUCTS INCORPORATED Michigan 36.9 36.9 Y 5084
FFC HOLDING, INC. Delaware 29.5 29.5 Y 7184
FSI HOLDINGS, INC. Ohio 38.3 38.3 Y 4330
GALEY & LORD HOLDINGS New York 47.2 47.2 Y 3955
GDT HOLDINGS, INC. Delaware 38.4 38.4 Y 4824
GLENOIT UNIVERSAL, LTD. Delaware 33.7 33.7 Y 4570
GVC HOLDINGS Texas 36 36 Y 3957
HAYDON CORPORATION New Jersey 79.9 79.9 Y 4332
HL HOLDING CORPORATION Delaware 36.6 36.6 Y 7189
HUNTSVILLE TELEVISION HOLDING CORP. Florida 49 49 Y 3960
HYDROCHEM HOLDING, INC. Texas 40 40 Y 4115
IKS CORPORATION Delaware 28.3 28.3 Y 4752
INTERNATIONAL AIRMOTIVE HOLDING CORP. Texas 30.6 30.6 Y 4425
INTERNATIONAL MEDIA GROUP California 72.1 72.1 Y 4087
ISG RESOURCES Delaware 37.9 37.9 Y 4967
MINCORP ACQUISITION CORP. Delaware 44.5 44.5 Y 5085
MMI PRODUCTS, LLC Delaware 37.4 37.4 Y 5179
MSX INTERNATIONAL, INC. Delaware 32 32 Y 4796
</TABLE>
1 2 3 4 5 6 7 8 9 10 11 12 13
<TABLE>
<S> <C>
FOOTNOTES: (1)MANAGERIAL CONTROL; (2)INTEREST >=25% OF A VOTING CLASS; Page 43
(3)TOTAL EQUITY >50%; (4)SUBSIDIARY OF COMPANY DEEMED TO BE CONTROLLED;
(5)RELATED CONTRACT DEEMED TO GIVE CITI CONTROL; (6)SPONSORED/ADVISED FUND;
(7)FEDERAL RESERVE CONDITION OF APPROVAL
</TABLE>
<PAGE> 44
<TABLE>
<S> <C> <C> <C> <C> <C>
NAC HOLDING INC. Georgia 38.7 38.7 Y 4089
NMC HOLDING COMPANY Delaware 44.9 44.9 Y 7185
PEN-TAB HOLDINGS, INC. Delaware 37.2 37.2 Y 4799
PLANTRONICS INC. California 27 27 Y 4335
POLAR CORPORATION Minnesota 29.5 29.5 Y 3972
PTI, INC. Massachusetts 39.2 39.2 Y 4336
RHODES HOLDINGS, INC. Delaware 39.5 39.5 Y 7289
SLEEP INVESTOR L.L.C. Delaware 37.3 37.3 Y 4753
SC PROCESSING, INC. Alabama 41.3 41.3 Y 3974
STERLING HOLDING COMPANY, LLC Delaware 38.1 38.1 Y 4825
TEU HOLDINGS, INC. Virginia 37.6 37.6 Y 4625
THERMAL ENGINEERING INTERNATIONAL CORPORATION Delaware 37.8 37.8 Y 4797
TRIANON INDUSTRIES CORP. Delaware 13.8 13.8 Y (2) 4680
UNISA HOLDINGS INCORPORATED Florida 20.3 20.35 Y (2) 4338
VISION METALS HOLDINGS, INC. Delaware 37.3 37.3 Y 5029
WB BOTTLING COMPANY California 42.1 42.1 Y 3978
ZATARAIN'S BRANDS, INC. Louisiana 47 47 Y 4284
CITIFLIGHT, INC. Delaware 100 100 Y 1307
CITIMAE, INC. Delaware 100 100 Y 726
CITIPARTNERS SERVICES GROUP A.I.E. Spain 60 100 Y 4189
CITITRUST LIMITED Hong Kong 100 100 Y 719
CUBAN AMERICAN NICKEL COMPANY Delaware 44 44 Y 750
MOA BAY MINING COMPANY Delaware 100 100 Y 751
DUNFERMLINE ENTERPRISES LIMITED New Zealand 100 100 Y 2916
GROUPEMENT D'INTERET ECONOMIQUE "PARIS CITICORP CENTER" France 50 100 Y 1084
INTERNATIONAL BANKING CORPORATION Connecticut 100 100 Y 1081
INTERNATIONAL EQUITY INVESTMENTS, INC. Delaware 100 100 Y 3252
CORPORACION INVERSORA DE CAPITALES S.R.L. Argentina 100 100 Y 3278
</TABLE>
1 2 3 4 5 6 7 8 9 10 11 12 13
<TABLE>
<S> <C>
FOOTNOTES: (1)MANAGERIAL CONTROL; (2)INTEREST >=25% OF A VOTING CLASS; Page 44
(3)TOTAL EQUITY >50%; (4)SUBSIDIARY OF COMPANY DEEMED TO BE CONTROLLED;
(5)RELATED CONTRACT DEEMED TO GIVE CITI CONTROL; (6)SPONSORED/ADVISED FUND;
(7)FEDERAL RESERVE CONDITION OF APPROVAL
</TABLE>
<PAGE> 45
<TABLE>
<S> <C> <C> <C> <C> <C>
CELULOSA ARGENTINA S.A. Argentina 80.7 80.742 Y 3279
CARTULINAS ARGENTINAS S.A. Argentina 100 100 Y 4501
FORESTAL SANTA LUCIA S.A. Argentina 99.9 99.99 Y 4506
TISSUCEL S.A. Argentina 99.9 99.99 Y 4505
USINA BERNAL S.A. Buenos Aires,
Argentina 99.9 99.99 Y 4975
525 PARTICIPACOES S.A. Brazil 98.9 98.98 Y 5076
SWEET RIVER FUND George Town,
Cayman Is 99 99 Y 4887
BELAPART S.A. Brazil 49 49 Y (3) 4889
OPPORTUNITY PRIME FUNDO MUTUO DE
INVESTIMENTO EM ACOES-CARTEIRA LIVRE Rio de Janeiro,
Brazil 49.9 99.99 Y 4890
ELETRON S.A. Rio de Janeiro,
Brazil 99.9 99.99 Y 4913
ELETRON S.A. Rio de Janeiro,
Brazil 0.01 99.99 Y 4913
VALETRON S.A. Rio de Janeiro,
Brazil 49 49 Y (3) 4888
OPPORTUNITY PRIME FUNDO MUTUO DE
INVESTIMENTO EM ACOES-CARTEIRA LIVRE Rio de Janeiro,
Brazil 49.9 99.99 Y 4890
MATIN REALTY, INC. New York 100 100 Y 1091
PERENNIALLY GREEN, INC. New York 100 100 Y 1115
R DE VR INVESTMENTS (PTY) LTD. South Africa 100 100 Y 2004
SAUDI AMERICAN BANK Saudi Arabia 22.8 22.83 Y (1) 1120
SAMBA ASSET MANANGEMENT S.A. Luxembourg 100 22.83 Y (4) 7260
SAMBA CAPITAL MANAGEMENT INTERNATIONAL LIMITED England 100 22.83 Y (4) 2545
SAMBA FINANCE S.A. Switzerland 100 22.83 Y (4) 2575
SAMBA INVESTMENT MANAGEMENT (LUXEMBOURG) S.A. Luxembourg 100 22.83 Y (4) 4586
SAMBA LEASING LIMITED Cayman Is. 100 22.83 Y (4) 2815
SAMBA RIYADH GLOBAL EQUITY TRADING FUND Riyadh,
Saudi Arabia 94.1 21.5 Y (6) 7373
SAMBA ISLAMIC INVESTMENTS Luxembourg 94.1 21.5 Y (6) 7301
SAUDI AMERICAN BANK (UK) LTD. England 100 22.83 Y (4) 4002
SODA POP HOLDINGS, INC. Wilmington,
Delaware 36.6 36.667 Y 5273
STERLING HEALTHCARE CORPORATION Delaware 45.8 45.83 Y 4551
UNIVERSAL CARD SERVICES CORP. Delaware 100 100 Y 5086
</TABLE>
1 2 3 4 5 6 7 8 9 10 11 12 13
<TABLE>
<S> <C>
FOOTNOTES: (1)MANAGERIAL CONTROL; (2)INTEREST >=25% OF A VOTING CLASS; Page 45
(3)TOTAL EQUITY >50%; (4)SUBSIDIARY OF COMPANY DEEMED TO BE CONTROLLED;
(5)RELATED CONTRACT DEEMED TO GIVE CITI CONTROL; (6)SPONSORED/ADVISED FUND;
(7)FEDERAL RESERVE CONDITION OF APPROVAL
</TABLE>
<PAGE> 46
<TABLE>
<S> <C> <C> <C> <C> <C>
UNIVERSAL BANCORP SERVICES, INC. Delaware 100 100 Y 5091
UNIVERSAL BANK, N.A. Delaware 100 100 Y 5089
CITICORP BANKING CORPORATION Delaware 100 100 Y 1166
CITI ISLAMIC INVESTMENT BANK Bahrain 100 100 Y 566
CITI ISLAMIC PORTFOLIOS S.A. Luxembourg 100 100 Y 4869
CITIACCIONES FLEXIBLE, S.A. DE C.V.,
SOCIEDAD DE INVERSION COMUN Mexico City,
Mexico 99.9 100 Y 7206
CITIACCIONES PATRIMONIAL, S.A. DE C.V.,
SOCIEDAD DE INVERSION COMUN Mexico City,
Mexico 99.9 100 Y 7207
CITIBANK (ARIZONA) Arizona 100 100 Y 2139
CITIBANK (LUXEMBOURG) S.A. Luxembourg 100 100 Y 330
CITIBANK (SWITZERLAND) Switzerland 100 100 Y 1288
CITIBANK, FEDERAL SAVINGS BANK USA 100 100 Y 1364
CITIBANK INSURANCE AGENCY, INC. Illinois 100 100 Y 1517
CITIBANK MORTGAGE SERVICES, INC. Florida 100 100 Y 1514
CITIBANK SERVICE CORPORATION California 100 100 Y 1365
CITICORP FINANCIAL SERVICES CORPORATION (D.C.) District of Columbia 100 100 Y 2271
CITICORP INSURANCE AGENCY, INC. District of Columbia 100 100 Y 2272
FIRST SAVINGS CORPORATION Illinois 100 100 Y 1518
HOLIDAY HARBOR MANAGEMENT CORPORATION Florida 100 100 Y 2992
WEST SUBURBAN INVESTMENTS, INC. Illinois 100 100 Y 1526
FIRST PADDLE CREEK, INC. Florida 100 100 Y 1573
WEST FLORIDA INVESTMENTS, INC. Florida 100 100 Y 1530
WEST SUBURBAN INVESTMENTS, INC. OF CALIFORNIA California 100 100 Y 1533
WEST SUBURBAN INVESTMENTS, INC. OF COLORADO Colorado 100 100 Y 1534
CITICORP (JERSEY) LIMITED Channel Islands 100 100 Y 1763
CITICORP ADMINISTRADORA DE INVERSIONES S.A. Uruguay 100 100 Y 3728
CITICORP CAPITAL INVESTORS EUROPE LIMITED Delaware 100 100 Y 1457
CITICORP CAPITAL INVESTORS GERMANY LIMITED Delaware 100 100 Y 1539
CITICORP COMMUNITY DEVELOPMENT, INC. New York 100 100 Y 1272
</TABLE>
1 2 3 4 5 6 7 8 9 10 11 12 13
<TABLE>
<S> <C>
FOOTNOTES: (1)MANAGERIAL CONTROL; (2)INTEREST >=25% OF A VOTING CLASS; Page 46
(3)TOTAL EQUITY >50%; (4)SUBSIDIARY OF COMPANY DEEMED TO BE CONTROLLED;
(5)RELATED CONTRACT DEEMED TO GIVE CITI CONTROL; (6)SPONSORED/ADVISED FUND;
(7)FEDERAL RESERVE CONDITION OF APPROVAL
</TABLE>
<PAGE> 47
<TABLE>
<S> <C> <C> <C> <C> <C>
MISSION PARK CORPORATION Massachusetts 80 80 Y 1276
CITICORP DATA DISTRIBUTION, INC. Delaware 100 100 Y 1161
CITICORP DATA SYSTEMS INCORPORATED Delaware 100 100 Y 2103
CITICORP DELAWARE SERVICES, INC. Delaware 100 100 Y 1278
CITICORP FUNDING, INC. Delaware 100 100 Y 1175
CITICORP FUTURES CORPORATION Delaware 100 100 Y 1176
CITICORP GLOBAL HOLDINGS, INC. Delaware 100 100 Y 4408
CITIACCIONES FLEXIBLE, S.A. DE C.V., SOCIEDAD DE
INVERSION COMUN Mexico City, Mexico 0.00 100 Y 7206
CITIACCIONES PATRIMOMIAL, S.A. DE C.V., SOCIEDAD
DE INVERSION COMUN Mexico City, Mexico 0.00 100 Y 7207
CITIPLAZO, S.A. DE C.V., SOCIEDAD DE INVERSION
EN INSTRUMENTOS DE DEUDA Mexico City, Mexico 0.00 100 Y 7208
CITICORP GLOBAL TECHNOLOGY, INC. Delaware 100 100 Y 1279
CITICORP INFORMATION TECHNOLOGY, INC. Delaware 100 100 Y 3228
CITICORP INSURANCE (BERMUDA) LIMITED Bermuda 100 100 Y 1627
CITICORP INSURANCE USA, INC. Vermont 100 100 Y 1837
CITICORP INTERNATIONAL FINANCE CORPORATION Delaware 100 100 Y 2350
BRAZIL HOLDINGS INC. LIMITED Bahamas 100 100 Y 2684
CHL COMERCIO E PARTICIPACOES LTDA. Brazil 100 100 Y 3541
CITICORP MERCANTIL-PARTICIPACOES
E INVESTIMENTOS S.A. Brazil 100 100 Y 2685
CITICORP INTERNATIONAL INSURANCE COMPANY, LTD. Bermuda 100 100 Y 1744
CITICORP INTERNATIONAL TECHNOLOGY, INC. Delaware 100 100 Y 1305
CITICORP INTERNATIONAL TRADING COMPANY, INC. Delaware 100 100 Y 496
ADVANX S.A. Uruguay 100 100 Y 2182
CITICOM DE MEXICO, S.A. DE C.V. Mexico 100 100 Y 1887
CITICORP INTERNATIONAL TRADE INDEMNITY, INC. New Jersey 100 100 Y 2316
CITICORP MARINE MANAGEMENT, INC. New Jersey 100 100 Y 2846
CITICORP INTERNATIONAL TRADING COMPANY (BAHAMAS) LTD. Bahamas 100 100 Y 4207
CITICORP INTERNATIONAL TRADING COMPANY ARGENTINA S.A. Argentina 100 100 Y 2314
CITICORP INTERNATIONAL TRADING COMPANY SDN. BHD. Malaysia 100 100 Y 1886
</TABLE>
1 2 3 4 5 6 7 8 9 10 11 12 13
<TABLE>
<S> <C>
FOOTNOTES: (1)MANAGERIAL CONTROL; (2)INTEREST >=25% OF A VOTING CLASS; Page 47
(3)TOTAL EQUITY >50%; (4)SUBSIDIARY OF COMPANY DEEMED TO BE CONTROLLED;
(5)RELATED CONTRACT DEEMED TO GIVE CITI CONTROL; (6)SPONSORED/ADVISED FUND;
(7)FEDERAL RESERVE CONDITION OF APPROVAL
</TABLE>
<PAGE> 48
<TABLE>
<S> <C> <C> <C> <C> <C>
CITICORP TRADING S.A. Brazil 100 100 Y 2224
COMERCIALIZADORA CITICORP, S.A. Dominican Republic 100 100 Y 2424
ESMERIL TRADING LDA Portugal 100 100 Y 4668
MARCHANTE TRADING LDA Portugal 100 100 Y 4817
RICHEMONT SERVICOS LDA Portugal 100 100 Y 4820
TREVANO SERVICOS E GESTAO LDA Portugal 100 100 Y 4819
TURBANTE COMERCIO INTERNACIONAL LDA Portugal 100 100 Y 4818
VILACETE INVESTIMENTOS E GESTAO LDA Portugal 100 100 Y 4821
CITICORP INVESTMENT MANAGEMENT (LUXEMBOURG) S.A. Luxembourg 100 100 Y 3497
CITICORP INVESTMENT PARTNERS, INC. Delaware 100 100 Y 4208
CITICORP OVERSEAS FINANCE CORPORATION N.V. Aruba 100 100 Y 1301
CITICORP SECURITIES ASIA PACIFIC LIMITED Hong Kong 100 100 Y 1669
CITIBANK GLOBAL ASSET MANAGEMENT (ASIA) LIMITED Hong Kong 100 100 Y 1671
CITICORP SECURITIES INVESTMENT CONSULTING INC. Taiwan 100 100 Y 2418
CITICORP STRATEGIC TECHNOLOGY CORPORATION Delaware 100 100 Y 4919
724 SOLUTIONS INC. Ontario, Canada 21.7 21.77 Y (7) 7267
GLOBESET, INC. Delaware 35.1 35.1 Y 7302
TRADE CREDIT MANAGEMENT COMPANY LIMITED London, England 66.4 66.43 Y 7078
CITICORP TRUST COMPANY (MARYLAND) Maryland 100 100 Y 4145
CITICORP WASHINGTON, INC. District of Columbia 100 100 Y 2559
CITICURRENCIES S.A. Luxembourg 100 100 Y 1890
CITIDEL, INC. Delaware 100 100 Y 1306
CITIEMPRESA, S.A. DE C.V., SOCIEDAD DE INVERSION
EN INSTRUMENTOS DE DEUDA PARA PERSONAS MORALES Mexico 100 100 Y 3680
CITIFINANCIAL CREDIT COMPANY Delaware 100 100 Y 6104
AMERICAN HEALTH AND LIFE INSURANCE COMPANY Texas 100 100 Y 6018
BROOKSTONE INSURANCE COMPANY Vermont 100 100 Y 6042
CC CREDIT CARD CORPORATION Delaware 100 100 Y 6060
</TABLE>
1 2 3 4 5 6 7 8 9 10 11 12 13
<TABLE>
<S> <C>
FOOTNOTES: (1)MANAGERIAL CONTROL; (2)INTEREST >=25% OF A VOTING CLASS; Page 48
(3)TOTAL EQUITY >50%; (4)SUBSIDIARY OF COMPANY DEEMED TO BE CONTROLLED;
(5)RELATED CONTRACT DEEMED TO GIVE CITI CONTROL; (6)SPONSORED/ADVISED FUND;
(7)FEDERAL RESERVE CONDITION OF APPROVAL
</TABLE>
<PAGE> 49
<TABLE>
<S> <C> <C> <C> <C> <C>
CC FINANCE SYSTEM INCORPORATED Delaware 100 100 Y 6063
CC FINANCIAL SERVICES INC. Delaware 100 100 Y 6069
CCC CAPITAL I Delaware 100 100 Y 6075
CCC CAPITAL II Delaware 100 100 Y 6076
CCC CAPITAL III Delaware 100 100 Y 6077
CCC CAPITAL IV Delaware 100 100 Y 6078
CCC CAPITAL V Delaware 100 100 Y 6079
CHESAPEAKE APPRAISAL AND SETTLEMENT SERVICES INC. Maryland 100 100 Y 6086
CHESAPEAKE APPRAISAL AND SETTLEMENT SERVICES
AGENCY OF OHIO INC. Ohio 100 100 Y 6085
CHESAPEAKE WEST ESCROW SERVICES INC. California 100 100 Y 6087
CITIBANK USA Delaware 100 100 Y 6762
CITIFINANCIAL ALABAMA, INC. Alabama 100 100 Y 6107
CITIFINANCIAL COMPANY Delaware 100 100 Y 6145
CITIFINANCIAL CONSUMER SERVICES, INC. Delaware 100 100 Y 6148
CITIFINANCIAL CORPORATION <CO> Colorado 100 100 Y 6147
CITIFINANCIAL MANAGEMENT CORPORATION Maryland 100 100 Y 6139
CITIFINANCIAL MORTGAGE COMPANY Delaware 100 100 Y 7125
CITIFINANCIAL MORTGAGE SECURITIES INC. Delaware 100 100 Y 7130
CITIFINANCIAL OF VIRGINIA, INC. Virginia 100 100 Y 6146
CITIFINANCIAL SERVICES, INC. <CA> Los Angeles,
California 100 100 Y 6108
CITIFINANCIAL SERVICES, INC. <DE> Delaware 100 100 Y 6136
CITIFINANCIAL SERVICES, INC. <GA> Georgia 100 100 Y 6149
CITIFINANCIAL SERVICES, INC. <MA> Massachusetts 100 100 Y 7124
CITIFINANCIAL SERVICES, INC. <MN> Minnesota 100 100 Y 6105
CITIFINANCIAL SERVICES, INC. <MO> Missouri 100 100 Y 6150
CITIFINANCIAL SERVICES, INC. <OH> Ohio 100 100 Y 6137
CITIFINANCIAL SERVICES, INC. <UT> Utah 100 100 Y 6144
CITIFINANCIAL SERVICES, INC. <VA> Virginia 100 100 Y 6138
</TABLE>
1 2 3 4 5 6 7 8 9 10 11 12 13
<TABLE>
<S> <C>
FOOTNOTES: (1)MANAGERIAL CONTROL; (2)INTEREST >=25% OF A VOTING CLASS; Page 49
(3)TOTAL EQUITY >50%; (4)SUBSIDIARY OF COMPANY DEEMED TO BE CONTROLLED;
(5)RELATED CONTRACT DEEMED TO GIVE CITI CONTROL; (6)SPONSORED/ADVISED FUND;
(7)FEDERAL RESERVE CONDITION OF APPROVAL
</TABLE>
<PAGE> 50
<TABLE>
<S> <C> <C> <C> <C> <C>
CITIFINANCIAL, INC. <HI> Hawaii 100 100 Y 6106
CITIFINANCIAL, INC. <IA> Iowa 100 100 Y 6109
CITIFINANCIAL CORPORATION <DE> Delaware 100 100 Y 6140
CITIFINANCIAL OF MISSISSIPPI, INC. Delaware 100 100 Y 6141
CITIFINANCIAL, INC. <KY> Kentucky 100 100 Y 6110
CITIFINANCIAL SERVICES, INC. <KY> Kentucky 100 100 Y 6133
CITIFINANCIAL, INC. <MD> Maryland 100 100 Y 6111
ACTION DATA SERVICES, INC. Missouri 100 100 Y 6006
CITIFINANCIAL SERVICES, INC. <OK> Oklahoma 100 100 Y 6151
CITIFINANCIAL, INC. <NY> New York 100 100 Y 6135
CITIFINANCIAL, INC. <OH> Ohio 100 100 Y 6100
CITIFINANCIAL, INC. <SC> South Carolina 100 100 Y 6112
CITIFINANCIAL, INC. <TN> Tennessee 100 100 Y 6143
CITIFINANCIAL, INC. <WV> West Virginia 100 100 Y 6114
CITIFINANCIAL, INC. NC North Carolina 100 100 Y 6116
CITY LOAN FINANCIAL, INC. Ohio 100 100 Y 6101
COMMERCIAL CREDIT BANKING CORPORATION Oregon 100 100 Y 6103
COMMERCIAL CREDIT INSURANCE SERVICES, INC. Maryland 100 100 Y 6130
COMMERCIAL CREDIT INSURANCE AGENCY (P&C) OF
MISSISSIPPI, INC. Mississippi 100 100 Y 6122
COMMERCIAL CREDIT INSURANCE AGENCY OF ALABAMA, INC. Alabama 100 100 Y 6123
COMMERCIAL CREDIT INSURANCE AGENCY OF HAWAII, INC. Hawaii 100 100 Y 6124
COMMERCIAL CREDIT INSURANCE AGENCY OF KENTUCKY, INC. Kentucky 100 100 Y 6125
COMMERCIAL CREDIT INSURANCE AGENCY OF
MASSACHUSETTS, INC. Massachusetts 100 100 Y 6126
COMMERCIAL CREDIT INSURANCE AGENCY OF NEVADA, INC. Nevada 100 100 Y 6127
COMMERCIAL CREDIT INSURANCE AGENCY OF
NEW MEXICO, INC. New Mexico 100 100 Y 6128
COMMERCIAL CREDIT INSURANCE AGENCY OF OHIO, INC. Ohio 100 100 Y 6129
COMMERCIAL CREDIT INTERNATIONAL, INC. Delaware 100 100 Y 6132
COMMERCIAL CREDIT INTERNATIONAL BANKING CORPORATION Oregon 100 100 Y 6131
</TABLE>
1 2 3 4 5 6 7 8 9 10 11 12 13
<TABLE>
<S> <C>
FOOTNOTES: (1)MANAGERIAL CONTROL; (2)INTEREST >=25% OF A VOTING CLASS; Page 50
(3)TOTAL EQUITY >50%; (4)SUBSIDIARY OF COMPANY DEEMED TO BE CONTROLLED;
(5)RELATED CONTRACT DEEMED TO GIVE CITI CONTROL; (6)SPONSORED/ADVISED FUND;
(7)FEDERAL RESERVE CONDITION OF APPROVAL
</TABLE>
<PAGE> 51
<TABLE>
<S> <C> <C> <C> <C> <C>
COMMERCIAL CREDIT SECURITIES, INC. Delaware 100 100 Y 6152
PARK TOWER HOLDINGS, INC. Delaware 100 100 Y 6353
CC RETAIL SERVICES, INC. Delaware 100 100 Y 6074
TROY TEXTILES, INC. Delaware 100 100 Y 6863
COMMERCIAL CREDIT DEVELOPMENT CORPORATION Delaware 100 100 Y 6117
MYERS PARK PROPERTIES, INC. Delaware 100 100 Y 6330
TRAVELERS HOME MORTGAGE SERVICES OF ALABAMA, INC. Delaware 100 100 Y 6828
PENN RE, INC. North Carolina 100 100 Y 6370
RESOURCE DEPLOYMENT, INC. Texas 100 100 Y 6465
TRAVELERS BANK & TRUST, FSB Delaware 100 100 Y 6807
TRAVELERS HOME EQUITY, INC. North Carolina 100 100 Y 6827
CC CONSUMER SERVICES OF ALABAMA, INC. Alabama 100 100 Y 6059
CC HOME LENDERS FINANCIAL, INC. Georgia 100 100 Y 6070
CC HOME LENDERS, INC. Ohio 100 100 Y 6071
CITIFINANCIAL OF WEST VIRGINIA, INC. West Virginia 100 100 Y 6121
CITIFINANCIAL SERVICES, INC. <PA> Pennsylvania 100 100 Y 6142
CITIFINANCIAL, INC. <TX> Texas 100 100 Y 6113
TRAVELERS HOME MORTGAGE SERVICES, INC. North Carolina 100 100 Y 6830
TRAVELERS HOME MORTGAGE SERVICES OF PENNSYLVANIA, INC. Pennsylvania 100 100 Y 6829
TRITON INSURANCE COMPANY Missouri 100 100 Y 6862
VEROCHRIS CORPORATION Delaware 100 100 Y 6876
WORLD SERVICE LIFE INSURANCE COMPANY Colorado 100 100 Y 6883
CITILANDMARK S.A. Luxembourg 100 100 Y 2345
CITILIFE S.A./N.V. Belgium 99.9 99.9 Y 715
CITIFUND BALANCE Athens, Greece 95.0 95.03 Y 7262
CITIMARKETS S.A. Luxembourg 100 100 Y 1889
CITIMORTGAGES, INC. Delaware 100 100 Y 2225
CITINVEST S.A. Luxembourg 100 100 Y 2226
</TABLE>
1 2 3 4 5 6 7 8 9 10 11 12 13
<TABLE>
<S> <C>
FOOTNOTES: (1)MANAGERIAL CONTROL; (2)INTEREST >=25% OF A VOTING CLASS; Page 51
(3)TOTAL EQUITY >50%; (4)SUBSIDIARY OF COMPANY DEEMED TO BE CONTROLLED;
(5)RELATED CONTRACT DEEMED TO GIVE CITI CONTROL; (6)SPONSORED/ADVISED FUND;
(7)FEDERAL RESERVE CONDITION OF APPROVAL
</TABLE>
<PAGE> 52
<TABLE>
<S> <C> <C> <C> <C> <C>
CITIPLAZO, S.A. DE C.V., SOCIEDAD DE INVERSION
EN INSTRUMENTOS DE DEUDA Mexico City, Mexico 99.9 100 Y 7208
CITIPORTFOLIOS S.A. Luxembourg 100 100 Y 2560
CITIRENTA, S.A. DE C.V., SOCIEDAD DE INVERSION
EN INSTRUMENTOS DE DEUDA Mexico 100 100 Y 3678
CITISHARE CORPORATION Delaware 100 100 Y 1310
CITITRUST S.P.A.-ISTITUTO FIDUCIARIO Italy 100 100 Y 2195
COURT SQUARE CAPITAL LIMITED Delaware 100 100 Y 1167
CROSSMAR, INC. Delaware 100 100 Y 3371
HOUSING SECURITIES, INC. Delaware 100 100 Y 2618
INVERSIONES CITIMINERA S.A. Chile 100 100 Y 2552
MORTGAGE CAPITAL FUNDING INC. Delaware 100 100 Y 2309
PLANTBRASS LIMITED London, England 100 100 Y 7012
RESOLUTION SERVICES, INC. Delaware 100 100 Y 3565
UNIVERSAL FINANCIAL CORP. Utah 100 100 Y 5090
CITICORP CAPITAL I Delaware 100 100 Y 4806
CITICORP CAPITAL II Delaware 100 100 Y 4805
CITICORP CAPITAL III Delaware 100 100 Y 5147
CITICORP CREDIT SERVICES, INC. Delaware 100 100 Y 1173
CITICORP NATIONAL SERVICES, INC. Delaware 100 100 Y 1185
CITICORP ACCEPTANCE COMPANY, INC. Nevada 100 100 Y 1186
CITICORP ACCEPTANCE COMPANY OF CALIFORNIA, INC. Missouri 100 100 Y 1184
CITICORP ACCEPTANCE COMPANY OF NEW MEXICO, INC. Missouri 100 100 Y 1187
CITICORP ACCEPTANCE SERVICE CORPORATION Alabama 100 100 Y 1183
CITICORP NORTH AMERICA, INC. Delaware 100 100 Y 1177
ADV ONE, INC. Delaware 100 100 Y 1792
ASSET D VEHICLE, INC. Delaware 100 100 Y 1780
CITICORP CHURCHILL LEASE, INC. Delaware 100 100 Y 1726
CITICORP EPIC FINANCE, INC. Delaware 100 100 Y 4651
CITICORP FSC II LTD. Bermuda 100 100 Y 4477
</TABLE>
1 2 3 4 5 6 7 8 9 10 11 12 13
<TABLE>
<S> <C>
FOOTNOTES: (1)MANAGERIAL CONTROL; (2)INTEREST >=25% OF A VOTING CLASS; Page 52
(3)TOTAL EQUITY >50%; (4)SUBSIDIARY OF COMPANY DEEMED TO BE CONTROLLED;
(5)RELATED CONTRACT DEEMED TO GIVE CITI CONTROL; (6)SPONSORED/ADVISED FUND;
(7)FEDERAL RESERVE CONDITION OF APPROVAL
</TABLE>
<PAGE> 53
<TABLE>
<S> <C> <C> <C> <C> <C>
CITICORP GLOBAL LEASE, INC. Delaware 100 100 Y 1178
CITICORP MT AQUARIUS SHIP, INC. Delaware 100 100 Y 5187
CITIMARLEASE (BURMAH I), INC. UTA (9/28/72) Delaware 26.7 100 Y 5238
CITICORP MT ARIES SHIP, INC. Delaware 100 100 Y 5186
CITIMARLEASE (BURMAH LNG CARRIER), INC. UTA (9/28/72) Delaware 26.3 100 Y 5237
CITICORP SIERRA LEASE, INC. Delaware 100 100 Y 1262
CITICORP TRANSLEASE, INC. Delaware 100 100 Y 1259
CGI CAPITAL, INC. Delaware 100 100 Y 1264
CITICORP LEASING (ALYESKA), INC. Delaware 100 100 Y 1180
CITICORP LESCAMAN, INC. New York 100 100 Y 1181
CITICORP PETROLEASE, INC. Delaware 100 100 Y 1261
CITICORP TULIP LEASE, INC. Delaware 100 100 Y 1263
CM LEASING MEMBER 1995 TRUST-A2 Delaware 100 100 Y 4483
CM NORTH AMERICA HOLDING COMPANY Canada 1 100 Y 4480
CM LEASING COMPANY Canada 69.9 100 Y 4481
CM TULIP HOLDING COMPANY Canada 4 100 Y 4482
CM LEASING COMPANY Canada 29.9 100 Y 4481
CITIMARLEASE (BURMAH I), INC. Delaware 100 100 Y 1266
CITIMARLEASE (BURMAH I), INC. UTA (9/28/72) Delaware 43.3 100 Y 5238
CITIMARLEASE (BURMAH LIQUEGAS), INC. Delaware 100 100 Y 1267
CITIMARLEASE (BURMAH LIQUEGAS), INC. UTA (9/28/72) Delaware 59.1 100 Y 5240
CITIMARLEASE (BURMAH LNG CARRIER), INC. Delaware 100 100 Y 1268
CITIMARLEASE (BURMAH LNG CARRIER), INC.
UTA (9/28/72) Delaware 43.6 100 Y 5237
CITIMARLEASE (FULTON), INC. Delaware 100 100 Y 1269
CITIMARLEASE (WHITNEY), INC. Delaware 100 100 Y 1270
CM FSC I LTD. Bermuda 100 100 Y 4970
CM LEASING MEMBER 1995 TRUST-A1 Delaware 100 100 Y 4479
CM NORTH AMERICA HOLDING COMPANY Canada 98.9 100 Y 4480
</TABLE>
1 2 3 4 5 6 7 8 9 10 11 12 13
<TABLE>
<S> <C>
FOOTNOTES: (1)MANAGERIAL CONTROL; (2)INTEREST >=25% OF A VOTING CLASS; Page 53
(3)TOTAL EQUITY >50%; (4)SUBSIDIARY OF COMPANY DEEMED TO BE CONTROLLED;
(5)RELATED CONTRACT DEEMED TO GIVE CITI CONTROL; (6)SPONSORED/ADVISED FUND;
(7)FEDERAL RESERVE CONDITION OF APPROVAL
</TABLE>
<PAGE> 54
<TABLE>
<S> <C> <C> <C> <C> <C>
CM LEASING COMPANY Canada 69.9 100 Y 4481
CM TULIP HOLDING COMPANY Canada 95.9 100 Y 4482
CM LEASING COMPANY Canada 30 100 Y 4481
ESSL 1, INC. Delaware 100 100 Y 2363
ESSL 2, INC. Delaware 100 100 Y 2364
FCL SHIP ONE, INC. Delaware 100 100 Y 7322
CITIMARLEASE (BURMAH I), INC. UTA (9/28/72) Delaware 30 100 Y 5238
FCL SHIP THREE, INC. Delaware 100 100 Y 4934
CITIMARLEASE (BURMAH LIQUEGAS), INC. UTA (9/28/72) Delaware 40.9 100 Y 5240
FCL SHIP TWO, INC. Delaware 100 100 Y 5241
CITIMARLEASE (BURMAH LNG CARRIER), INC. UTA (9/28/72) Delaware 30.1 100 Y 5237
POP TROPHY I INC. New York 100 100 Y 3860
POP TROPHY INC. New York 100 100 Y 3859
S.P.L., INC. Delaware 100 100 Y 478
SCIENCE DEFEASANCE CORP. Delaware 100 100 Y 2281
SOMANAD 1 LLC Delaware 100 100 Y 7248
ASTILBE SAS Paris, France 10 10 Y (5) 7263
SOMANAD 2 LLC Delaware 100 100 Y 7249
ASTILBE SAS Paris, France 0 10 Y (5) 7263
CITICORP RETAIL SERVICES, INC. Delaware 100 100 Y 1255
CITICORP SERVICES INC. New York 100 100 Y 1258
CITICORP TRAVEL PAYMENT SERVICES INC. Delaware 100 100 Y 7247
NEPTUNE SECURITIES FINANCE CORPORATION Delaware 100 100 Y 4982
CITIGROUP INVESTMENTS INC. Delaware 100 100 Y 6835
CITIGROUP MANAGEMENT CORP. Wilmington, Delaware 100 100 Y 7371
GREENWICH STREET CAPITAL PARTNERS, INC. Delaware 100 100 Y 6246
MIRASURE INSURANCE COMPANY, LTD. Bermuda 100 100 Y 6323
MRC HOLDINGS, INC. Delaware 100 100 Y 6328
</TABLE>
1 2 3 4 5 6 7 8 9 10 11 12 13
<TABLE>
<S> <C>
FOOTNOTES: (1)MANAGERIAL CONTROL; (2)INTEREST >=25% OF A VOTING CLASS; Page 54
(3)TOTAL EQUITY >50%; (4)SUBSIDIARY OF COMPANY DEEMED TO BE CONTROLLED;
(5)RELATED CONTRACT DEEMED TO GIVE CITI CONTROL; (6)SPONSORED/ADVISED FUND;
(7)FEDERAL RESERVE CONDITION OF APPROVAL
</TABLE>
<PAGE> 55
<TABLE>
<S> <C> <C> <C> <C> <C>
PACIFIC BASIN INVESTMENTS LTD. Delaware 100 100 Y 6346
PRIMERICA CORPORATION <WY> Wyoming 100 100 Y 6416
PRIMERICA, INC. Delaware 100 100 Y 6448
SALOMON SMITH BARNEY HOLDINGS INC. New York 100 100 Y 5219
1345 MEDIA CORP. Delaware 100 100 Y 6000
BASIS CLEARING INC Delaware 100 100 Y 6033
CORPORATE REALTY ADVISORS, INC. Delaware 100 100 Y 6178
GENESIS CRUDE OIL, L.P. Delaware 10.5 91.2 Y 6227
GENESIS PIPELINE TX, L.P. Texas 100 100 Y 6014
GENESIS PIPELINE USA, L.P. Texas 100 100 Y 6919
GENESIS ENERGY, L.L.C. Delaware 54 54 Y 6228
GENESIS CRUDE OIL, L.P. Delaware 0.61 91.2 Y 6227
GENESIS PIPELINE TX, L.P. Texas 100 100 Y 6014
GENESIS PIPELINE USA, L.P. Texas 100 100 Y 6919
GENESIS ENERGY, L.P. Delaware 2 2 Y (1) 6229
GENESIS CRUDE OIL, L.P. Delaware 80.0 91.2 Y 6227
GENESIS PIPELINE TX, L.P. Texas 100 100 Y 6014
GENESIS PIPELINE USA, L.P. Texas 100 100 Y 6919
IPO HOLDINGS INC. Delaware 100 100 Y 6286
INSTITUTIONAL PROPERTY OWNERS, INC. V Delaware 100 100 Y 6282
INSTITUTIONAL PROPERTY OWNERS, INC. VI Delaware 100 100 Y 6283
MLA 50 CORPORATION Delaware 100 100 Y 6324
NEXTCO INC. Delaware 100 100 Y 6341
PENDRAGON GUINEVERE FUND LLC England 100 100 Y 7641
PHIBRO ENERGY PRODUCTION, INC. Delaware 100 100 Y 6386
ANGLO-SUISSE (U.S.S.R.) L.P. Delaware 55.5 56.5 Y 6023
PHIBRO ENERGY PRODUCTION G.P. INC Delaware 100 100 Y 6385
ANGLO-SUISSE (U.S.S.R.) L.P. Delaware 1 56.5 Y 6023
</TABLE>
1 2 3 4 5 6 7 8 9 10 11 12 13
<TABLE>
<S> <C>
FOOTNOTES: (1)MANAGERIAL CONTROL; (2)INTEREST >=25% OF A VOTING CLASS; Page 55
(3)TOTAL EQUITY >50%; (4)SUBSIDIARY OF COMPANY DEEMED TO BE CONTROLLED;
(5)RELATED CONTRACT DEEMED TO GIVE CITI CONTROL; (6)SPONSORED/ADVISED FUND;
(7)FEDERAL RESERVE CONDITION OF APPROVAL
</TABLE>
<PAGE> 56
<TABLE>
<S> <C> <C> <C> <C> <C>
PHIBRO INC. Delaware 100 100 Y 6392
MC2 TECHNOLOGIES, INC. Delaware 100 100 Y 6315
PHIBRO COMMODITIES England 100 100 Y 6380
PHIBRO ENERGY CLEARING, INC. Delaware 100 100 Y 6381
PHIBRO ENERGY HONG KONG LIMITED Hong Kong 100 100 Y 6382
PHIBRO GMBH Switzerland 100 100 Y 6390
PHIBRO (ASIA) PTE LTD Singapore 100 100 Y 6378
PHIBRO ENERGY REPRESENTACOES COMMERCIAIA LTDA. Brazil 100 100 Y 6387
PHILIPP BROTHERS AG <SWITZERLAND> Switzerland 100 100 Y 6397
SCANPORTS LIMITED England 100 100 Y 6628
SHIPALKS SHIPPING LIMITED England 100 100 Y 6646
TURAVENT OIL AG Switzerland 100 100 Y 6868
PHIBRO HOLDINGS LIMITED England 100 100 Y 6391
CARISGREEN LIMITED England 100 100 Y 6047
PHIBRO BULLION LIMITED England 100 100 Y 6379
PHIBRO ENERGY MARKETING LIMITED England 100 100 Y 6383
PHIBRO FUTURES AND METALS LIMITED England 100 100 Y 6389
PHILIPP BROTHERS LIMITED England 100 100 Y 6400
SCANPORTS SHIPPING, INC. Delaware 100 100 Y 6630
PHIBRO POWER LLC Delaware 100 100 Y 7103
PHIBRO RESOURCES CORP. Delaware 100 100 Y 6393
THE S.W. SHATTUCK CHEM CO., INC. Colorado 100 100 Y 6759
PHILIPP BROTHERS, INC. New York 100 100 Y 6402
R-H CAPITAL, INC. Delaware 100 100 Y 6459
R-H/TRAVELERS, L.P. Delaware 100 100 Y 6460
R-H CAPITAL PARTNERS, L.P. Delaware 75.4 75.45 Y 6458
SALOMON BROTHERS HOLDING COMPANY INC. Delaware 100 100 Y 6041
BECKHAM NO. 2 LIMITED Hong Kong 99.9 99.99 Y 6668
</TABLE>
1 2 3 4 5 6 7 8 9 10 11 12 13
<TABLE>
<S> <C>
FOOTNOTES: (1)MANAGERIAL CONTROL; (2)INTEREST >=25% OF A VOTING CLASS; Page 56
(3)TOTAL EQUITY >50%; (4)SUBSIDIARY OF COMPANY DEEMED TO BE CONTROLLED;
(5)RELATED CONTRACT DEEMED TO GIVE CITI CONTROL; (6)SPONSORED/ADVISED FUND;
(7)FEDERAL RESERVE CONDITION OF APPROVAL
</TABLE>
<PAGE> 57
<TABLE>
<S> <C> <C> <C> <C> <C>
CITICORP SECURITIES SERVICES, INC. Delaware 100 100 Y 1625
GROVE STREET FILM CORP Delaware 100 100 Y 6254
HUWEST COMPANY INC Delaware 100 100 Y 6277
LOAN PARTICIPATION HOLDING CORPORATION Delaware 100 100 Y 6308
HOME MORTGAGE ACCESS CORPORATION District of Columbia 100 100 Y 6274
HOME MAC GOVERNMENT FINANCIAL CORPORATION District of Columbia 100 100 Y 6271
HOME MAC GOVERNMENT FINANCIAL CORPORATION WEST District of Columbia 100 100 Y 6272
HOME MAC MORTGAGE SECURITIES CORPORATION District of Columbia 100 100 Y 6273
LT INVESTMENT I, LLC New York 100 100 Y 6899
LT INVESTMENT II, LLC New York 100 100 Y 6090
NIKKO SALOMON SMITH BARNEY LIMITED Cayman Islands 0 49 Y (1) 6544
NIKKO SALOMON SMITH BARNEY SERVICES LIMITED Cayman Islands 100 100 Y 6568
NOMOLAS BA LTD Australia 100 100 Y 6485
PB-SB INVESTMENTS, INC Delaware 100 100 Y 6366
PB-SB 1983 I New York 1 1 Y (1) 6358
PB-SB 1983 III New York 1 1 Y (1) 6361
PB-SB VENTURES, INC Delaware 100 100 Y 6367
PB-SB 1985 VII New York 1 1 Y (1) 6362
PB-SB 1988 III New York 1 1 Y (1) 6364
PB-SB 1988 VIII New York 1 1 Y (1) 6365
PT SALOMON SMITH BARNEY NUSA SECURITIES Indonesia 60 60 Y 6454
SALOMON (INTERNATIONAL) FINANCE AG Switzerland 100 100 Y 6471
PHIBRO S.A. <MADRID> Spain 100 100 Y 6395
SALOMON BROTHERS ASIA LIMITED Hong Kong 0 100 Y 6476
SALOMON BROTHERS EUROPE LIMITED England 2.7 100 Y 6490
ANGLO CHEMICAL METALS LIMITED England 100 100 Y 6022
CHARLES WADE & CO. LIMITED England 100 100 Y 6083
COCOA MERCHANTS LIMITED England 100 100 Y 6102
</TABLE>
1 2 3 4 5 6 7 8 9 10 11 12 13
<TABLE>
<S> <C>
FOOTNOTES: (1)MANAGERIAL CONTROL; (2)INTEREST >=25% OF A VOTING CLASS; Page 57
(3)TOTAL EQUITY >50%; (4)SUBSIDIARY OF COMPANY DEEMED TO BE CONTROLLED;
(5)RELATED CONTRACT DEEMED TO GIVE CITI CONTROL; (6)SPONSORED/ADVISED FUND;
(7)FEDERAL RESERVE CONDITION OF APPROVAL
</TABLE>
<PAGE> 58
<TABLE>
<S> <C> <C> <C> <C> <C>
CRESTHAYES LIMITED England 100 100 Y 6184
DAMSONBUSH LIMITED England 100 100 Y 6188
HILSREST LIMITED England 100 100 Y 6269
ION TRADING SYSTEMS LIMITED England 51 51 Y 6285
PE 1994 LIMITED England 100 100 Y 6368
PHIBRO ENERGY SERVICES LIMITED England 100 100 Y 6388
PHIBRO-SALOMON NOMINEES LIMITED England 100 100 Y 6396
PHILIPP BROTHERS BULLION LIMITED England 100 100 Y 6398
PHILIPP BROTHERS FUTURES LIMITED England 100 100 Y 6399
PS4 LIMITED England 100 100 Y 6453
SALOMON BROTHERS ASSET MANAGEMENT LIMITED England 100 100 Y 6484
SALOMON BROTHERS EASTERN EUROPE LIMITED England 100 100 Y 6489
SALOMON BROTHERS INTERNATIONAL LIMITED England 100 100 Y 6500
SBE 1991 LIMITED England 100 100 Y 7637
SBI 1984 England 100 100 Y 6614
SALOMON BROTHERS NOMINEES LIMITED England 100 100 Y 6514
SALOMON BROTHERS UK EQUITY LIMITED England 100 100 Y 6526
SALOMON BROTHERS UK LIMITED England 100 100 Y 6527
SB CORPORATION LIMITED England 100 100 Y 6583
SB FINANCE PLC England 100 100 Y 6584
SB FUNDING NO 1 LIMITED England 100 100 Y 6587
SB FUNDING NO 2 LIMITED England 100 100 Y 6588
SB MORTGAGE SECURITIES NO 21 PLC England 100 100 Y 6592
SB MORTGAGE SECURITIES NO 22 PLC England 100 100 Y 6593
SB MORTGAGE SECURITIES NO 23 PLC England 100 100 Y 6594
SB MORTGAGE SECURITIES NO 24 PLC England 100 100 Y 6595
SB PLACEMENT NO 2 LIMITED England 100 100 Y 6599
SB PORTFOLIO SERVICES LIMITED England 100 100 Y 6600
</TABLE>
1 2 3 4 5 6 7 8 9 10 11 12 13
<TABLE>
<S> <C>
FOOTNOTES: (1)MANAGERIAL CONTROL; (2)INTEREST >=25% OF A VOTING CLASS; Page 58
(3)TOTAL EQUITY >50%; (4)SUBSIDIARY OF COMPANY DEEMED TO BE CONTROLLED;
(5)RELATED CONTRACT DEEMED TO GIVE CITI CONTROL; (6)SPONSORED/ADVISED FUND;
(7)FEDERAL RESERVE CONDITION OF APPROVAL
</TABLE>
<PAGE> 59
<TABLE>
<S> <C> <C> <C> <C> <C>
SB RESIDENTIAL PLC England 100 100 Y 6601
WAVENDOWN LIMITED England 100 100 Y 6880
SALOMON BROTHERS HOLDINGS GMBH Switzerland 77.6 100 Y 6495
NIKKO SALOMON SMITH BARNEY LIMITED Cayman Is. 49 49 Y (1) 6544
NIKKO SALOMON SMITH BARNEY SERVICES LIMITED Cayman Is. 100 100 Y 6568
SALOMON BROTHERS ASIA LIMITED Hong Kong 50 100 Y 6476
SALOMON CONTRACTUALS LIMITED Cayman Islands 100 100 Y 6530
SALOMON INTERNATIONAL FINANCIAL PRODUCTS LLC Delaware 100 100 Y 6533
SALOMON BROTHERS ASIA GROWTH FUND LIMITED Cayman Islands 100 100 Y 6475
SALOMON CONTRACTUALS LIMITED Cayman Islands 0 100 Y 6530
SALOMON BROTHERS OVERSEAS INC Cayman Is. 100 100 Y 6515
SALOMON SMITH BARNEY HONG KONG HOLDINGS LIMITED Hong Kong 51.9 100 Y 6462
SALOMON BROTHERS ASSET MANAGEMENT ASIA PACIFIC LIMITED Hong Kong 100 100 Y 6480
SALOMON SMITH BARNEY HONG KONG FUTURES, LIMITED Hong Kong 100 100 Y 6496
SALOMON SMITH BARNEY HONG KONG NOMINEE LIMITED Hong Kong 50 100 Y 6498
SALOMON SMITH BARNEY HONG KONG LIMITED Hong Kong 100 100 Y 6497
SALOMON SMITH BARNEY HONG KONG NOMINEE LIMITED Hong Kong 50 100 Y 6498
SALOMON-SHANGHAI INDUSTRIAL GREATER CHINA FUND Cayman Islands 37.3 52.2 Y 6916
SALOMON ANALYTICS INC Delaware 100 100 Y 6472
SALOMON BROTHERS ASIA CAPITAL CORP Ireland 100 100 Y 6474
DARKLAND INTERNATIONAL LIMITED Ireland 100 100 Y 6189
ILSHIN NO. 4 VENTURE INVESTMENT PARTNERSHIP Korea 90 90 Y 6278
SOLOM INTERNATIONAL LIMITED Ireland 100 100 Y 6720
SALOMON BROTHERS ASIA LIMITED Hong Kong 50 100 Y 6476
SALOMON BROTHERS ASSET MANAGEMENT (IRELAND) LTD Ireland 100 100 Y 6479
SALOMON BROTHERS ASSET MANAGEMENT INC Delaware 100 100 Y 6482
SBAM G.P. INC. Delaware 100 100 Y 6481
SALOMON BROTHERS CAPITAL STRUCTURE ARBITRAGE
FUND I, L.P. New York 0 28.51 Y 6486
</TABLE>
1 2 3 4 5 6 7 8 9 10 11 12 13
<TABLE>
<S> <C>
FOOTNOTES: (1)MANAGERIAL CONTROL; (2)INTEREST >=25% OF A VOTING CLASS; Page 59
(3)TOTAL EQUITY >50%; (4)SUBSIDIARY OF COMPANY DEEMED TO BE CONTROLLED;
(5)RELATED CONTRACT DEEMED TO GIVE CITI CONTROL; (6)SPONSORED/ADVISED FUND;
(7)FEDERAL RESERVE CONDITION OF APPROVAL
</TABLE>
<PAGE> 60
<TABLE>
<S> <C> <C> <C> <C> <C>
SALOMON BROTHERS ASSET MANAGEMENT JAPAN LTD Japan 100 100 Y 6483
SSB CITI ASSET MANAGEMENT CO., LTD. Japan 100 100 Y 6536
SALOMON BROTHERS CAPITAL STRUCTURE ARBITRAGE FUND I, L.P. New York 13.2 28.51 Y 6486
SALOMON BROTHERS FINANCE AG Switzerland 100 100 Y 6491
SALOMON BROTHERS HOUSING INVESTMENT INC Delaware 100 100 Y 6499
CORPORATE HOUSING INITIATIVES FUND LP District of Columbia 26.7 26.75 Y 6176
SALOMON BROTHERS INTERNATIONAL LIMITED England 0 100 Y 6500
SALOMON BROTHERS INTERNATIONAL OPERATIONS (JAPAN) INC Delaware 100 100 Y 6501
SALOMON BROTHERS INTERNATIONAL OPERATIONS (JERSEY) LIMITED Channel Islands 100 100 Y 6502
SALOMON BROTHERS INTERNATIONAL OPERATIONS (OVERSEAS) LIMITED Channel Islands 100 100 Y 6503
SALOMON BROTHERS INTERNATIONAL OPERATIONS INC Delaware 100 100 Y 6504
SALOMON BROTHERS MANAGEMENT SERVICES INC. Delaware 100 100 Y 6591
SALOMON BROTHERS MORTGAGE SECURITIES II, INC Delaware 100 100 Y 6508
SALOMON BROTHERS MORTGAGE SECURITIES III, INC Delaware 100 100 Y 6509
SALOMON BROTHERS MORTGAGE SECURITIES VI, INC Delaware 100 100 Y 6512
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC Delaware 100 100 Y 6513
SALOMON BROTHERS PACIFIC HOLDING COMPANY INC Delaware 100 100 Y 6516
SALOMON BROTHERS HOLDINGS GMBH Switzerland 22.3 100 Y 6495
NIKKO SALOMON SMITH BARNEY LIMITED Cayman Is. 49 49 Y (1) 6544
NIKKO SALOMON SMITH BARNEY SERVICES LIMITED Cayman Is. 100 100 Y 6568
SALOMON BROTHERS ASIA LIMITED Hong Kong 50 100 Y 6476
SALOMON CONTRACTUALS LIMITED Cayman Islands 100 100 Y 6530
SALOMON INTERNATIONAL FINANCIAL PRODUCTS LLC Delaware 100 100 Y 6533
SALOMON BROTHERS ASIA GROWTH FUND LIMITED Cayman Islands 100 100 Y 6475
SALOMON CONTRACTUALS LIMITED Cayman Islands 0 100 Y 6530
SALOMON BROTHERS PROPERTIES INC Delaware 100 100 Y 6517
SALOMON BROTHERS INVESTMENTS INC Delaware 100 100 Y 6505
SALOMON BROTHERS FINANCE CORPORATION AND
CO BESCHRANTHAFTENDE KG Germany 28.4 99.8 Y 6493
</TABLE>
1 2 3 4 5 6 7 8 9 10 11 12 13
<TABLE>
<S> <C>
FOOTNOTES: (1)MANAGERIAL CONTROL; (2)INTEREST >=25% OF A VOTING CLASS; Page 60
(3)TOTAL EQUITY >50%; (4)SUBSIDIARY OF COMPANY DEEMED TO BE CONTROLLED;
(5)RELATED CONTRACT DEEMED TO GIVE CITI CONTROL; (6)SPONSORED/ADVISED FUND;
(7)FEDERAL RESERVE CONDITION OF APPROVAL
</TABLE>
<PAGE> 61
<TABLE>
<S> <C> <C> <C> <C> <C>
SALOMON BROTHERS AG Germany 100 100 Y 6473
SALOMON BROTHERS INTERNATIONAL LIMITED England 0 100 Y 6500
SALOMON BROTHERS CORPORATE SUPPORT GMBH Germany 100 100 Y 6488
SALOMON BROTHERS KAPITALANLAGE-GESELLSCHAFT MBH Germany 100 100 Y 6506
SALOMON BROTHERS REAL ESTATE DEVELOPMENT CORP Delaware 100 100 Y 6518
CROW WOOD TERRACE ASSOCIATES Georgia 50 50 Y 6187
SALOMON BROTHERS REALTY CORP New York 100 100 Y 6519
LIQUIDATION PROPERTIES HOLDING COMPANY INC. New York 100 100 Y 6423
LIQUIDATION PROPERTIES INC. New York 100 100 Y 6318
MACA INN LLC Delaware 100 100 Y 7113
SALOMON BROTHERS RUSSIA HOLDING COMPANY INC Delaware 100 100 Y 6520
ZAO SALOMON BROTHERS Russia 100 100 Y 6024
SALOMON BROTHERS SERVICES INC Delaware 100 100 Y 6522
SALOMON SMITH BARNEY ASIA MANAGEMENT SERVICES LIMITED Hong Kong 100 100 Y 6477
SALOMON BROTHERS SIM SPA Italy 100 100 Y 6523
SALOMON BROTHERS TAIWAN LIMITED Taiwan 100 100 Y 6524
SALOMON BROTHERS TOSCA INC Delaware 100 100 Y 6525
SALOMON BROTHERS VARIABLE SERIES FUNDS INC. New York 45.8 45.8 Y 6909
SALOMON CAPITAL ACCESS FOR SAVINGS INSTITUTIONS, INC. Delaware 100 100 Y 6529
SALOMON CAPITAL ACCESS CORPORATION District of Columbia 100 100 Y 6528
SALOMON FOREX INC Delaware 100 100 Y 6531
SALOMON BROTHERS FINANCE CORPORATION Delaware 100 100 Y 6492
SALOMON BROTHERS FINANCE CORPORATION AND
CO BESCHRANTHAFTENDE KG Germany 18.9 99.8 Y 6493
SALOMON BROTHERS AG Germany 100 100 Y 6473
SALOMON BROTHERS INTERNATIONAL LIMITED England 0 100 Y 6500
SALOMON BROTHERS CORPORATE SUPPORT GMBH Germany 100 100 Y 6488
SALOMON BROTHERS KAPITALANLAGE-GESELLSCHAFT MBH Germany 100 100 Y 6506
SALOMON INTERNATIONAL INVESTMENTS INC Delaware 100 100 Y 6534
</TABLE>
1 2 3 4 5 6 7 8 9 10 11 12 13
<TABLE>
<S> <C>
FOOTNOTES: (1)MANAGERIAL CONTROL; (2)INTEREST >=25% OF A VOTING CLASS; Page 61
(3)TOTAL EQUITY >50%; (4)SUBSIDIARY OF COMPANY DEEMED TO BE CONTROLLED;
(5)RELATED CONTRACT DEEMED TO GIVE CITI CONTROL; (6)SPONSORED/ADVISED FUND;
(7)FEDERAL RESERVE CONDITION OF APPROVAL
</TABLE>
<PAGE> 62
<TABLE>
<S> <C> <C> <C> <C> <C>
SALOMON INTERNATIONAL LLC Delaware 100 100 Y 6535
SALOMON BROTHERS EUROPE LIMITED England 97.3 100 Y 6490
ANGLO CHEMICAL METALS LIMITED England 100 100 Y 6022
CHARLES WADE & CO. LIMITED England 100 100 Y 6083
COCOA MERCHANTS LIMITED England 100 100 Y 6102
CRESTHAYES LIMITED England 100 100 Y 6184
DAMSONBUSH LIMITED England 100 100 Y 6188
HILSREST LIMITED England 100 100 Y 6269
ION TRADING SYSTEMS LIMITED England 51 51 Y 6285
PE 1994 LIMITED England 100 100 Y 6368
PHIBRO ENERGY SERVICES LIMITED England 100 100 Y 6388
PHIBRO-SALOMON NOMINEES LIMITED England 100 100 Y 6396
PHILIPP BROTHERS BULLION LIMITED England 100 100 Y 6398
PHILIPP BROTHERS FUTURES LIMITED England 100 100 Y 6399
PS4 LIMITED England 100 100 Y 6453
SALOMON BROTHERS ASSET MANAGEMENT LIMITED England 100 100 Y 6484
SALOMON BROTHERS EASTERN EUROPE LIMITED England 100 100 Y 6489
SALOMON BROTHERS INTERNATIONAL LIMITED England 100 100 Y 6500
SBE 1991 LIMITED England 100 100 Y 7637
SBI 1984 England 100 100 Y 6614
SALOMON BROTHERS NOMINEES LIMITED England 100 100 Y 6514
SALOMON BROTHERS UK EQUITY LIMITED England 100 100 Y 6526
SALOMON BROTHERS UK LIMITED England 100 100 Y 6527
SB CORPORATION LIMITED England 100 100 Y 6583
SB FINANCE PLC England 100 100 Y 6584
SB FUNDING NO 1 LIMITED England 100 100 Y 6587
SB FUNDING NO 2 LIMITED England 100 100 Y 6588
SB MORTGAGE SECURITIES NO 21 PLC England 100 100 Y 6592
</TABLE>
1 2 3 4 5 6 7 8 9 10 11 12 13
<TABLE>
<S> <C>
FOOTNOTES: (1)MANAGERIAL CONTROL; (2)INTEREST >=25% OF A VOTING CLASS; Page 62
(3)TOTAL EQUITY >50%; (4)SUBSIDIARY OF COMPANY DEEMED TO BE CONTROLLED;
(5)RELATED CONTRACT DEEMED TO GIVE CITI CONTROL; (6)SPONSORED/ADVISED FUND;
(7)FEDERAL RESERVE CONDITION OF APPROVAL
</TABLE>
<PAGE> 63
<TABLE>
<S> <C> <C> <C> <C> <C>
SB MORTGAGE SECURITIES NO 22 PLC England 100 100 Y 6593
SB MORTGAGE SECURITIES NO 23 PLC England 100 100 Y 6594
SB MORTGAGE SECURITIES NO 24 PLC England 100 100 Y 6595
SB PLACEMENT NO 2 LIMITED England 100 100 Y 6599
SB PORTFOLIO SERVICES LIMITED England 100 100 Y 6600
SB RESIDENTIAL PLC England 100 100 Y 6601
WAVENDOWN LIMITED England 100 100 Y 6880
SAMCHULLY INVESTMENT PARTNERSHIP NO. 3 South Korea 90 90 Y 6577
SSB CITI ASSET MANAGEMENT LIMITED England 100 100 Y 7112
SALOMON LOAN FUND I LLC Delaware 100 100 Y 6537
SALOMON NORTHPOINT CORP Delaware 100 100 Y 6540
SALOMON PLAZA HOLDINGS INC Delaware 100 100 Y 6541
PLAZA HOLDINGS INC. Delaware 100 100 Y 6405
SALOMON BROTHERS FINANCE CORPORATION AND CO
BESCHRANTHAFTENDE KG Germany 52.5 99.8 Y 6493
SALOMON BROTHERS AG Germany 100 100 Y 6473
SALOMON BROTHERS INTERNATIONAL LIMITED England 0 100 Y 6500
SALOMON BROTHERS CORPORATE SUPPORT GMBH Germany 100 100 Y 6488
SALOMON BROTHERS KAPITALANLAGE-GESELLSCHAFT MBH Germany 100 100 Y 6506
SALOMON REINVESTMENT COMPANY, INC Delaware 100 100 Y 6542
SALOMON SMITH BARNEY ASIA PACIFIC LIMITED Delaware 100 100 Y 6478
SALOMON SMITH BARNEY AUSTRALIA PTY LTD Australia 100 100 Y 6552
FRIDAY SERVICES PTY LTD Melbourne, Australia 100 100 Y 7126
SALOMON SMITH BARNEY AUSTRALIA BROKER HOLDINGS PTY LIMITED Australia 100 100 Y 6547
SALOMON SMITH BARNEY AUSTRALIA SECURITIES PTY LIMITED Australia 100 100 Y 6553
BOWYANG NOMINEES PTY LIMITED Australia 100 100 Y 6039
CALEX NOMINEES PTY LIMITED Australia 100 100 Y 6044
DERVAT NOMINEES PTY LIMITED Australia 100 100 Y 6196
FETA NOMINEES PTY LIMITED Australia 100 100 Y 6220
</TABLE>
1 2 3 4 5 6 7 8 9 10 11 12 13
<TABLE>
<S> <C>
FOOTNOTES: (1)MANAGERIAL CONTROL; (2)INTEREST >=25% OF A VOTING CLASS; Page 63
(3)TOTAL EQUITY >50%; (4)SUBSIDIARY OF COMPANY DEEMED TO BE CONTROLLED;
(5)RELATED CONTRACT DEEMED TO GIVE CITI CONTROL; (6)SPONSORED/ADVISED FUND;
(7)FEDERAL RESERVE CONDITION OF APPROVAL
</TABLE>
<PAGE> 64
<TABLE>
<S> <C> <C> <C> <C> <C>
GYMKHANA NOMINEES PTY LIMITED Australia 100 100 Y 6262
SALOMON SMITH BARNEY NEW ZEALAND LIMITED New Zealand 100 100 Y 6562
PALLISER NOMINEES LIMITED New Zealand 100 100 Y 6348
SALOMON SMITH BARNEY AUSTRALIA CAPITAL MARKETS PTY LIMITED Australia 100 100 Y 6548
SALOMON SMITH BARNEY AUSTRALIA CORPORATE FINANCE PTY LIMITED Australia 100 100 Y 6549
SALOMON SMITH BARNEY AUSTRALIA NOMINEES NO. 2 PTY LIMITED Australia 100 100 Y 6550
SALOMON SMITH BARNEY AUSTRALIA NOMINEES PTY LIMITED Australia 100 100 Y 6551
SALOMON SMITH BARNEY AUSTRALIA SUPERANNUATION FUND PTY LIMITED Australia 100 100 Y 6554
SALOMON SMITH BARNEY CANADA HOLDING COMPANY Canada 99 100 Y 6555
SALOMON SMITH BARNEY CANADA INC. Canada 100 100 Y 6556
SALOMON SMITH BARNEY CHINA LIMITED Hong Kong 100 100 Y 6487
SALOMON SMITH BARNEY HONG KONG HOLDINGS LIMITED Hong Kong 48.1 100 Y 6462
SALOMON BROTHERS ASSET MANAGEMENT ASIA PACIFIC LIMITED Hong Kong 100 100 Y 6480
SALOMON SMITH BARNEY HONG KONG FUTURES, LIMITED Hong Kong 100 100 Y 6496
SALOMON SMITH BARNEY HONG KONG NOMINEE LIMITED Hong Kong 50 100 Y 6498
SALOMON SMITH BARNEY HONG KONG LIMITED Hong Kong 100 100 Y 6497
SALOMON SMITH BARNEY HONG KONG NOMINEE LIMITED Hong Kong 50 100 Y 6498
SALOMON SMITH BARNEY INC. New York 100 100 Y 5218
BECKHAM NO. 1 LIMITED Hong Kong 100 100 Y 6655
MICRO-HYDRO POWER INC. Delaware 70 70 Y 6902
PATRIMONIA FOREIGN FUND 1 FUNDA DE RENTA FIXA
CAPITAL ESTRANGEIRO Sao Paulo, Brazil 100 100 Y 7287
SALOMON BROTHERS UK LIMITED England 0 100 Y 6527
SALOMON SMITH BARNEY KEB SECURITIES CO., LTD. South Korea 80 80 Y 6290
PEAK PERFORMANCE INVESTMENT LIMITED Malaysia 100 100 Y 6369
SALOMON SMITH BARNEY/TRAVELERS REF GP, LLC Delaware 100 100 Y 7630
SALOMON SMITH BARNEY/TRAVELERS REAL ESTATE FUND, L.P. Delaware 0 0 Y (1) 7631
TISHMAN SPEYER/TRAVELERS REAL ESTATE VENTURE, L.P. Delaware 6.58 64.65 Y 6792
SBHU LIFE AGENCY, INC. Delaware 100 100 Y 6611
</TABLE>
1 2 3 4 5 6 7 8 9 10 11 12 13
<TABLE>
<S> <C>
FOOTNOTES: (1)MANAGERIAL CONTROL; (2)INTEREST >=25% OF A VOTING CLASS; Page 64
(3)TOTAL EQUITY >50%; (4)SUBSIDIARY OF COMPANY DEEMED TO BE CONTROLLED;
(5)RELATED CONTRACT DEEMED TO GIVE CITI CONTROL; (6)SPONSORED/ADVISED FUND;
(7)FEDERAL RESERVE CONDITION OF APPROVAL
</TABLE>
<PAGE> 65
<TABLE>
<S> <C> <C> <C> <C> <C>
ROBINSON-HUMPHREY INSURANCE SERVICES INC. Georgia 100 100 Y 6468
ROBINSON-HUMPHREY INSURANCE SERVICES OF ALABAMA, INC. Alabama 100 100 Y 6469
SALOMON SMITH BARNEY LIFE AGENCY INC. New York 100 100 Y 6561
SBHU LIFE AGENCY OF ARIZONA, INC. Arizona 100 100 Y 6605
SBHU LIFE AGENCY OF INDIANA, INC. Indiana 100 100 Y 6606
SBHU LIFE AGENCY OF OHIO, INC. Ohio 100 100 Y 6607
SBHU LIFE AGENCY OF OKLAHOMA, INC. Oklahoma 100 100 Y 6608
SBHU LIFE AGENCY OF TEXAS, INC. Texas 100 100 Y 6609
SBHU LIFE AGENCY OF UTAH, INC. Utah 100 100 Y 6610
SBHU LIFE INSURANCE AGENCY OF MASSACHUSETTS, INC. Massachusetts 100 100 Y 6612
SBS INSURANCE AGENCY OF HAWAII, INC. Hawaii 100 100 Y 6615
SBS INSURANCE AGENCY OF IDAHO, INC. Idaho 100 100 Y 6616
SBS INSURANCE AGENCY OF MAINE, INC. Maine 100 100 Y 6617
SBS INSURANCE AGENCY OF MONTANA, INC. Montana 100 100 Y 6618
SBS INSURANCE AGENCY OF NEVADA, INC. Nevada 100 100 Y 6619
SBS INSURANCE AGENCY OF OHIO, INC. Ohio 100 100 Y 6620
SBS INSURANCE AGENCY OF SOUTH DAKOTA, INC. South Dakoba 100 100 Y 6621
SBS INSURANCE AGENCY OF WYOMING, INC. Wyoming 100 100 Y 6622
SBS INSURANCE BROKERAGE AGENCY OF ARKANSAS, INC. Arkansas 100 100 Y 6623
SBS INSURANCE BROKERS OF KENTUCKY, INC. Kentucky 100 100 Y 6624
SBS INSURANCE BROKERS OF NEW HAMPSHIRE, INC. New Hampshire 100 100 Y 6625
SBS INSURANCE BROKERS OF NORTH DAKOTA, INC. North Dakota 100 100 Y 6626
SBS LIFE INSURANCE AGENCY OF PUERTO RICO, INC. Puerto Rico 100 100 Y 6627
SLB INSURANCE AGENCY OF MARYLAND, INC. Maryland 100 100 Y 6649
SMITH BARNEY (NETHERLANDS) INC. Delaware 100 100 Y 6657
SMITH BARNEY INTERNATIONAL INCORPORATED Oregon 100 100 Y 6681
SMITH BARNEY PACIFIC HOLDINGS, INC. British Virgin
Islands 100 100 Y 6693
BECKHAM NO. 3 LIMITED Hong Kong 100 100 Y 6653
</TABLE>
1 2 3 4 5 6 7 8 9 10 11 12 13
<TABLE>
<S> <C>
FOOTNOTES: (1)MANAGERIAL CONTROL; (2)INTEREST >=25% OF A VOTING CLASS; Page 65
(3)TOTAL EQUITY >50%; (4)SUBSIDIARY OF COMPANY DEEMED TO BE CONTROLLED;
(5)RELATED CONTRACT DEEMED TO GIVE CITI CONTROL; (6)SPONSORED/ADVISED FUND;
(7)FEDERAL RESERVE CONDITION OF APPROVAL
</TABLE>
<PAGE> 66
<TABLE>
<S> <C> <C> <C> <C> <C>
BECKHAM NO. 4 LIMITED Hong Kong 100 100 Y 6658
SMITH BARNEY PUERTO RICO INC. Puerto Rico 100 100 Y 6704
THE ROBINSON-HUMPHREY COMPANY, LLC Delaware 100 100 Y 6758
R-H/TRAVELERS, L.P. Delaware 0 100 Y 6460
R-H CAPITAL PARTNERS, L.P. Delaware 75.4 75.45 Y 6458
SALOMON SMITH BARNEY MALAYSIA SDN. BHD. Malaysia 100 100 Y 6545
SALOMON SMITH BARNEY S.A. France 99 99 Y 6567
SALOMON SMITH BARNEY SINGAPORE HOLDINGS PTE. LTD. Singapore 100 100 Y 6570
SALOMON SMITH BARNEY SINGAPORE FUTURES PTE. LTD. Singapore 100 100 Y 6569
SALOMON SMITH BARNEY SINGAPORE PTE. LTD. Singapore 100 100 Y 6571
SALOMON SWAPCO INC Delaware 100 100 Y 6574
SBE 1991 LIMITED England 0 100 Y 7637
SB FUNDING CORP. Delaware 100 100 Y 6586
SB MOTEL CORP. Delaware 100 100 Y 6596
SB MOTEL DURHAM I-95 CORP Delaware 100 100 Y 6597
SB MOTEL MORTGAGE CORP Delaware 100 100 Y 6598
SB/EJV PARTICIPATION CORP Delaware 100 100 Y 6602
SEVEN WORLD HOLDINGS LLC Delaware 100 100 Y 7102
MOSENERGIA HOLDINGS LIMITED Cyprus 100 100 Y 6327
LLC BELOYE OZERO Russia 29.1 100 Y 6305
LLC IMANTA Russia 51 100 Y 6306
LLC MUDRAYA SOVA Russia 51 100 Y 6307
LLC IMANTA Russia 49 100 Y 6306
LLC MUDRAYA SOVA Russia 49 100 Y 6307
LLC BELOYE OZERO Russia 51 100 Y 6305
POLARISO HOLDINGS LIMITED Cyprus 100 100 Y 6408
SEVEN WORLD TECHNOLOGIES, INC Delaware 100 100 Y 6637
SMITH BARNEY SECURITIES PTE. LTD. Singapore 100 100 Y 6709
</TABLE>
1 2 3 4 5 6 7 8 9 10 11 12 13
<TABLE>
<S> <C>
FOOTNOTES: (1)MANAGERIAL CONTROL; (2)INTEREST >=25% OF A VOTING CLASS; Page 66
(3)TOTAL EQUITY >50%; (4)SUBSIDIARY OF COMPANY DEEMED TO BE CONTROLLED;
(5)RELATED CONTRACT DEEMED TO GIVE CITI CONTROL; (6)SPONSORED/ADVISED FUND;
(7)FEDERAL RESERVE CONDITION OF APPROVAL
</TABLE>
<PAGE> 67
<TABLE>
<S> <C> <C> <C> <C> <C>
SSB CITI ASSET MANAGEMENT CO., LTD. Japan 0 100 Y 6536
SSB IRISH INVESTOR LLC Delaware 100 100 Y 7027
SSB VEHICLE SECURITIES INC. Delaware 100 100 Y 6725
STRUCTURED PRODUCTS CORP Delaware 100 100 Y 6733
TCEP PARTICIPATION CORP. New York 100 100 Y 6738
TCP CORP. Delaware 100 100 Y 6739
SALOMON BROTHERS SERVICES GMBH Germany 100 100 Y 6521
LLC BELOYE OZERO Russia 19.9 100 Y 6305
LLC IMANTA Russia 51 100 Y 6306
LLC MUDRAYA SOVA Russia 51 100 Y 6307
SALOMON SMITH BARNEY CANADA HOLDING COMPANY Canada 1 100 Y 6555
SALOMON SMITH BARNEY CANADA INC. Canada 100 100 Y 6556
SALOMON SMITH BARNEY S.A. France 0 99 Y 6567
SB CAYMAN HOLDINGS I INC. Delaware 100 100 Y 6578
SMITH BARNEY PRIVATE TRUST COMPANY (CAYMAN) LIMITED Cayman Is. 50 100 Y 6699
GREENWICH (CAYMAN) I LIMITED Cayman Is. 100 100 Y 6234
GREENWICH (CAYMAN) II LIMITED Cayman Is. 100 100 Y 6235
GREENWICH (CAYMAN) III LIMITED Cayman Is. 100 100 Y 6236
SB CAYMAN HOLDINGS II INC. Delaware 100 100 Y 6579
SMITH BARNEY PRIVATE TRUST COMPANY (CAYMAN) LIMITED Cayman Is. 50 100 Y 6699
GREENWICH (CAYMAN) I LIMITED Cayman Is. 100 100 Y 6234
GREENWICH (CAYMAN) II LIMITED Cayman Is. 100 100 Y 6235
GREENWICH (CAYMAN) III LIMITED Cayman Is. 100 100 Y 6236
SB CAYMAN HOLDINGS III INC. Delaware 100 100 Y 6580
SMITH BARNEY CREDIT SERVICES (CAYMAN) LTD. Cayman Is. 50 100 Y 6671
SB CAYMAN HOLDINGS IV INC. Delaware 100 100 Y 6581
SMITH BARNEY CREDIT SERVICES (CAYMAN) LTD. Cayman Is. 50 100 Y 6671
SI FINANCING TRUST I New York 100 100 Y 6647
</TABLE>
1 2 3 4 5 6 7 8 9 10 11 12 13
<TABLE>
<S> <C>
FOOTNOTES: (1)MANAGERIAL CONTROL; (2)INTEREST >=25% OF A VOTING CLASS; Page 67
(3)TOTAL EQUITY >50%; (4)SUBSIDIARY OF COMPANY DEEMED TO BE CONTROLLED;
(5)RELATED CONTRACT DEEMED TO GIVE CITI CONTROL; (6)SPONSORED/ADVISED FUND;
(7)FEDERAL RESERVE CONDITION OF APPROVAL
</TABLE>
<PAGE> 68
<TABLE>
<S> <C> <C> <C> <C> <C>
SMITH BARNEY (IRELAND) LIMITED Ireland 100 100 Y 6656
SMITH BARNEY ACQUISITION CORPORATION Delaware 100 100 Y 7122
SMITH BARNEY ASSET MANAGEMENT GROUP (ASIA) PTE. LTD. Singapore 100 100 Y 6664
SMITH BARNEY CAPITAL SERVICES INC. Delaware 100 100 Y 6665
SMITH BARNEY CAYMAN ISLANDS, LTD. Cayman Is. 100 100 Y 6666
SMITH BARNEY COMMERCIAL CORP. Delaware 100 100 Y 6667
SMITH BARNEY EUROPE HOLDINGS, LTD. England 100 100 Y 6674
SMITH BARNEY FUTURES MANAGEMENT LLC Delaware 100 100 Y 7120
F-1000 FUTURES FUND L.P., MICHIGAN SERIES I New York 1 1 Y (1) 6214
F-1000 FUTURES FUND L.P., MICHIGAN SERIES II New York 1 1 Y (1) 6215
HUTTON INVESTORS FUTURES FUND, L.P. II Delaware 1 1 Y (1) 6276
SALOMON SMITH BARNEY DIVERSIFIED 2000 FUTURES FUND L.P. New York 1 1 Y (1) 7636
SALOMON SMITH BARNEY GLOBAL DIVERSIFIED FUTURES FUND L.P. New York 1 1 Y (1) 6543
SALOMON SMITH BARNEY ORION FUTURES FUND L.P. New York 1 1 Y (1) 7635
SB/MICHIGAN FUTURES FUND L.P. New York 1 1 Y (1) 6603
SHEARSON MID-WEST FUTURES FUND New York 1 1 Y (1) 6643
SHEARSON SELECT ADVISORS FUTURES FUND L.P. Delaware 1 1 Y (1) 6642
SMITH BARNEY AAA ENERGY FUND L.P. New York 1 1 Y (1) 6659
SMITH BARNEY DIVERSIFIED FUTURES FUND L.P. New York 1 1 Y (1) 6672
SMITH BARNEY DIVERSIFIED FUTURES FUND L.P. II New York 1 1 Y (1) 6673
SMITH BARNEY GLOBAL MARKETS FUTURES FUND L.P. New York 1.78 1.78 Y (1) 6678
SMITH BARNEY INTERNATIONAL ADVISORS CURRENCY FUND L.P. New York 1 1 Y (1) 6680
SMITH BARNEY MID-WEST FUTURES FUND LP II New York 1 1 Y (1) 6685
SMITH BARNEY POTOMAC FUTURES FUND L.P. New York 1.29 1.29 Y (1) 6694
SMITH BARNEY PRINCIPAL PLUS FUTURES FUND L.P. II New York 1 1 Y (1) 6695
SMITH BARNEY PRINCIPAL PLUS FUTURES FUND LP New York 1 1 Y (1) 6696
SMITH BARNEY TELESIS FUTURES FUND L.P. New York 1 1 Y (1) 6712
SMITH BARNEY TIDEWATER FUTURES FUND L.P. New York 1 1 Y (1) 6713
</TABLE>
1 2 3 4 5 6 7 8 9 10 11 12 13
<TABLE>
<S> <C>
FOOTNOTES: (1)MANAGERIAL CONTROL; (2)INTEREST >=25% OF A VOTING CLASS; Page 68
(3)TOTAL EQUITY >50%; (4)SUBSIDIARY OF COMPANY DEEMED TO BE CONTROLLED;
(5)RELATED CONTRACT DEEMED TO GIVE CITI CONTROL; (6)SPONSORED/ADVISED FUND;
(7)FEDERAL RESERVE CONDITION OF APPROVAL
</TABLE>
<PAGE> 69
<TABLE>
<S> <C> <C> <C> <C> <C>
SMITH BARNEY WESTPORT FUTURES FUND L.P. New York 1 1 Y (1) 6715
SMITH BARNEY GLOBAL CAPITAL MANAGEMENT, INC. Delaware 100 100 Y 6677
SMITH BARNEY MORTGAGE CAPITAL CORP. Delaware 100 100 Y 6687
SMITH BARNEY MORTGAGE CAPITAL GROUP, INC. Delaware 100 100 Y 6688
SMITH BARNEY OFFSHORE, INC. Delaware 100 100 Y 6691
DECATHLON OFFSHORE LIMITED Channel Islands 100 100 Y 6193
SMITH BARNEY PRIVATE TRUST GMBH Switzerland 100 100 Y 6703
SMITH BARNEY RISK INVESTORS, INC. Delaware 100 100 Y 6707
SMITH BARNEY CONSULTING PARTNERSHIP, LP Delaware 1 1 Y (1) 6669
SMITH BARNEY INVESTORS L.P. Delaware 9.9 9.9 Y (1) 6682
SMITH BARNEY SECURITIES INVESTMENT CONSULTING CO. LTD. Taiwan 99 99 Y 6708
SMITH BARNEY SHEARSON (CHILE) CORREDORA DE SEGURO LIMITADA Chile 99.9 99.99 Y 6710
SMITH BARNEY VENTURE CORP. Delaware 100 100 Y 6714
FIRST CENTURY COMPANY New York 100 100 Y 6222
FIRST CENTURY MANAGEMENT COMPANY New York 1 1 Y (1) 6223
SSB CITI FUND MANAGEMENT LLC Delaware 100 100 Y 6329
SALOMON SMITH BARNEY ASSET MANAGEMENT AUSTRALIA LTD. Australia 100 100 Y 6546
SMITH BARNEY MANAGEMENT COMPANY (IRELAND) LIMITED Ireland 100 100 Y 6684
SMITH BARNEY STRATEGY ADVISERS INC. Delaware 100 100 Y 6711
SSB GREENWICH STREET PARTNERS LLC Delaware 100 100 Y 7128
SALOMON SMITH BARNEY/GREENWICH STREET CAPITAL
PARTNERS II, L.P. Delaware 0 0 Y (1) 7129
SSB PRIVATE MANAGEMENT LLC Delaware 100 100 Y 6723
SALOMON SMITH BARNEY HICKS MUSE PARTNERS L. P. Delaware 0 0 Y (1) 7116
TRAVELERS GROUP INVESTMENT MANAGEMENT, LLC Delaware 50 100 Y 6825
SSB KEEPER HOLDINGS LLC Delaware 100 100 Y 7131
KEEPER HOLDINGS LLC Delaware 18.9 100 Y 7627
SSBH CAPITAL I Delaware 100 100 Y 6726
SSBH CAPITAL II Delaware 100 100 Y 6727
</TABLE>
1 2 3 4 5 6 7 8 9 10 11 12 13
<TABLE>
<S> <C>
FOOTNOTES: (1)MANAGERIAL CONTROL; (2)INTEREST >=25% OF A VOTING CLASS; Page 69
(3)TOTAL EQUITY >50%; (4)SUBSIDIARY OF COMPANY DEEMED TO BE CONTROLLED;
(5)RELATED CONTRACT DEEMED TO GIVE CITI CONTROL; (6)SPONSORED/ADVISED FUND;
(7)FEDERAL RESERVE CONDITION OF APPROVAL
</TABLE>
<PAGE> 70
<TABLE>
<S> <C> <C> <C> <C> <C>
SSBH CAPITAL III Delaware 100 100 Y 6728
SSBH CAPITAL IV Delaware 100 100 Y 6729
TARGETS TRUST I Delaware 100 100 Y 6737
TARGETS TRUST II Delaware 100 100 Y 7104
TARGETS TRUST III Delaware 100 100 Y 7105
TARGETS TRUST IV Delaware 100 100 Y 7106
THE TRAVELERS INVESTMENT MANAGEMENT COMPANY Connecticut 100 100 Y 6773
TIMCO ALPHA I, LLC Connecticut 0.5 100 Y 6557
SMITH BARNEY CORPORATE TRUST COMPANY Delaware 100 100 Y 6670
SMITH BARNEY PRIVATE TRUST BANK OF MICHIGAN Michigan 100 100 Y 6697
SMITH BARNEY PRIVATE TRUST COMPANY New York 100 100 Y 6698
SMITH BARNEY PRIVATE TRUST COMPANY OF FLORIDA Florida 100 100 Y 6700
SMITH BARNEY PRIVATE TRUST COMPANY OF NEW JERSEY New Jersey 99.8 99.8 Y 6701
SMITH BARNEY PRIVATE TRUST COMPANY OF TEXAS Texas 100 100 Y 6702
TRAVELERS AUTO LEASING CORPORATION Delaware 100 100 Y 7127
TRAVELERS GROUP 401(k) SAVINGS PLAN New York 100 100 Y 6237
SALOMON BROTHERS CAPITAL FUND INC New York 47.5 47.5 Y 6507
TRAVELERS GROUP DIVERSIFIED DISTRIBUTION SERVICES, INC. Delaware 100 100 Y 6822
TRAVELERS GROUP EXCHANGE, INC. Delaware 100 100 Y 6823
TRAVELERS GROUP INTERNATIONAL INC. Delaware 100 100 Y 6824
TRAVELERS SERVICES INC. Delaware 100 100 Y 6849
TRV EMPLOYEES INVESTMENTS, INC. Delaware 100 100 Y 6865
TRV EMPLOYEES FUND, L.P. Delaware 1.8 1.8 Y (1) 6864
TRV/RCM CORP. Delaware 100 100 Y 6866
PARC ACQUISITION LIMITED PARTNERSHIP Delaware 50 100 Y 6351
TRV/RCM LP CORP. Delaware 100 100 Y 6867
PARC ACQUISITION LIMITED PARTNERSHIP Delaware 50 100 Y 6351
</TABLE>
1 2 3 4 5 6 7 8 9 10 11 12 13
<TABLE>
<S> <C>
FOOTNOTES: (1)MANAGERIAL CONTROL; (2)INTEREST >=25% OF A VOTING CLASS; Page 70
(3)TOTAL EQUITY >50%; (4)SUBSIDIARY OF COMPANY DEEMED TO BE CONTROLLED;
(5)RELATED CONTRACT DEEMED TO GIVE CITI CONTROL; (6)SPONSORED/ADVISED FUND;
(7)FEDERAL RESERVE CONDITION OF APPROVAL
</TABLE>
<PAGE> 71
Total Records: 1895
1 2 3 4 5 6 7 8 9 10 11 12 13
<TABLE>
<S> <C>
FOOTNOTES: (1)MANAGERIAL CONTROL; (2)INTEREST >=25% OF A VOTING CLASS; Page 71
(3)TOTAL EQUITY >50%; (4)SUBSIDIARY OF COMPANY DEEMED TO BE CONTROLLED;
(5)RELATED CONTRACT DEEMED TO GIVE CITI CONTROL; (6)SPONSORED/ADVISED FUND;
(7)FEDERAL RESERVE CONDITION OF APPROVAL
</TABLE>
