<PAGE> 1
UNIVERSAL ANNUITY
ANNUAL REPORT
THE TRAVELERS FUND U FOR VARIABLE ANNUITIES
DECEMBER 31, 1995
[LOGO]
THE TRAVELERS INSURANCE COMPANY
ONE TOWER SQUARE
HARTFORD, CONNECTICUT 06183
<PAGE> 2
THE TRAVELERS FUND U
FOR VARIABLE ANNUITIES
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1995
<TABLE>
<S> <C> <C>
ASSETS:
Investment in eligible funds at market value:
Travelers Variable Products Funds, 19,951,136 shares (cost $290,142,297).......... $353,947,210
Templeton Variable Products Series Fund, 19,723,347 shares (cost $319,593,055).... 382,396,682
Fidelity's Variable Insurance Products Fund, 28,496,176 shares (cost $518,298,280) 642,742,661
Fidelity's Variable Insurance Products Fund II, 23,910,561 shares (cost
$342,023,109)................................................................... 377,547,763
Dreyfus Stock Index Fund, 3,828,671 shares (cost $56,911,523)..................... 65,853,145
American Odyssey Funds, Inc., 50,655,566 shares (cost $550,417,615) : 629,016,626
Smith Barney/Travelers Series Fund Inc., 831,830 shares (cost $9,982,906)......... 10,265,822
------------
Total Investments (cost $2,087,368,785)......................................... $2,461,769,909
Receivables:
Dividends......................................................................... 32,749,653
Purchase payments and transfers from other Travelers accounts..................... 6,140,188
Other assets....................................................................... 11,292
--------------
Total Assets..................................................................... 2,500,671,042
--------------
LIABILITIES:
Payable for contract surrenders and transfers to other Travelers accounts.......... 971,619
Accrued liabilities................................................................ 485,047
--------------
Total Liabilities................................................................ 1,456,666
--------------
NET ASSETS.......................................................................... $2,499,214,376
==============
</TABLE>
See Notes to Financial Statements
-1-
<PAGE> 3
THE TRAVELERS FUND U
FOR VARIABLE ANNUITIES
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Dividends................................................ $ 69,822,353
EXPENSES:
Insurance charges........................................ 25,747,007
------------
Net investment income.................................. 44,075,346
------------
REALIZED GAIN AND CHANGE IN UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Realized gain from investment transactions:
Proceeds from investments sold.......................... $119,495,585
Cost of investments sold................................ 98,687,144
------------
Net realized gain...................................... 20,808,441
Change in unrealized gain (loss) on investments:
Unrealized loss at December 31, 1994.................... (8,676,019)
Unrealized gain at December 31, 1995.................... 374,401,124
------------
Net change in unrealized gain (loss) for the year...... 383,077,143
------------
Net realized gain and change in unrealized gain (loss) 403,885,584
------------
Net increase in net assets resulting from operations..... $447,960,930
============
</TABLE>
See Notes to Financial Statements
-2-
<PAGE> 4
THE TRAVELERS FUND U
FOR VARIABLE ANNUITIES
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
OPERATIONS:
Net investment income........................................... $ 44,075,346 $ 35,977,438
Net realized gain from investment transactions.................. 20,808,441 5,781,870
Net change in unrealized gain (loss) on investments............. 383,077,143 (90,470,991)
-------------- --------------
Net increase (decrease) in net assets resulting from operations 447,960,930 (48,711,683)
-------------- --------------
UNIT TRANSACTIONS:
Participant purchase payments
(applicable to 337,352,334 and 347,994,427 units, respectively) 452,028,311 427,701,738
Participant transfers from other Travelers accounts
(applicable to 304,664,477 and 502,271,333 units, respectively) 412,659,453 601,760,125
Administrative and asset allocation charges
(applicable to 7,055,084 and 5,180,119 units, respectively).... (9,143,467) (5,793,309)
Contract surrenders
(applicable to 61,767,394 and 33,835,413 units, respectively).. (88,487,237) (45,824,121)
Participant transfers to other Travelers accounts
(applicable to 244,445,899 and 186,102,321 units, respectively) (339,344,437) (243,643,400)
Other payments to participants
(applicable to 2,572,549 and 1,836,572 units, respectively).... (3,565,280) (2,362,947)
-------------- --------------
Net increase in net assets resulting from unit transactions.... 424,147,343 731,838,086
-------------- --------------
Net increase in net assets.................................... 872,108,273 683,126,403
NET ASSETS:
Beginning of year............................................... 1,627,106,103 943,979,700
-------------- --------------
End of year..................................................... $2,499,214,376 $1,627,106,103
============== ==============
</TABLE>
See Notes to Financial Statements
-3-
<PAGE> 5
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
The Travelers Fund U for Variable Annuities ("Fund U") is a separate account of
The Travelers Insurance Company ("The Travelers"), an indirect wholly owned
subsidiary of Travelers Group Inc., and is available for funding certain
variable annuity contracts issued by The Travelers. Fund U is registered under
the Investment Company Act of 1940, as amended, as a unit investment trust.
The Travelers interest in the net assets of Fund U was $1,460,895 at December
31, 1995.
Participant purchase payments applied to Fund U are invested in one or more
eligible funds in accordance with the selection made by the contract owner. As
of December 31, 1995, the eligible funds available under Fund U are: Managed
Assets Trust; High Yield Bond Trust; Capital Appreciation Fund; U.S. Government
Securities Portfolio, Social Awareness Stock Portfolio and Utilities Portfolio
of The Travelers Series Trust; American Odyssey Core Equity Fund, American
Odyssey Emerging Opportunities Fund, American Odyssey International Equity
Fund, American Odyssey Long-Term Bond Fund, American Odyssey Intermediate-Term
Bond Fund and American Odyssey Short-Term Bond Fund of American Odyssey Funds,
Inc.; Alliance Growth Portfolio, G.T. Global Strategic Income Portfolio, Smith
Barney High Income Portfolio, Smith Barney International Equity Portfolio,
Smith Barney Income and Growth Portfolio, Putnam Diversified Income Portfolio
and MFS Total Return Portfolio of Smith Barney/Travelers Series Fund Inc. (all
of which are managed by affiliates of The Travelers); Templeton Bond Fund,
Templeton Stock Fund and Templeton Asset Allocation Fund of Templeton Variable
Products Series Fund; High Income Portfolio, Growth Portfolio and Equity-Income
Portfolio of Fidelity's Variable Insurance Products Fund; Asset Manager
Portfolio of Fidelity's Variable Insurance Products Fund II; and Dreyfus Stock
Index Fund. All of the funds are Massachusetts business trusts, except for
American Odyssey Funds, Inc., Dreyfus Stock Index Fund and Smith
Barney/Travelers Series Fund Inc. which are incorporated under Maryland law.
The following is a summary of significant accounting policies consistently
followed by Fund U in the preparation of its financial statements.
SECURITY VALUATION. Investments are valued daily at the net asset values per
share of the underlying funds.
FEDERAL INCOME TAXES. The operations of Fund U 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 Fund U. Fund U 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.
Security transactions are accounted for on the trade date. Dividend income is
recorded on the ex-dividend date.
2. INVESTMENTS
Purchases and sales of investments aggregated $560,019,875 and $119,495,585,
respectively, for the year ended December 31, 1995. Realized gains and losses
from investment transactions are reported on an identified-cost basis. The
cost of investments in eligible funds was $2,087,368,785 at December 31, 1995.
Gross unrealized appreciation for all investments at December 31, 1995 was
$374,402,134. Gross unrealized depreciation for all investments at December
31, 1995 was $1,010.
-4-
<PAGE> 6
NOTES TO FINANCIAL STATEMENTS - CONTINUED
3. CONTRACT CHARGES
Insurance charges are paid to The Travelers for the mortality and expense risks
assumed by The Travelers. These charges are equivalent to 1.25% of the average
net assets of Fund U on an annual basis. Additionally, for certain contracts
in the accumulation phase, a semi-annual charge of $15 (prorated for partial
periods) is deducted from participant account balances and paid to The
Travelers to cover administrative charges.
Participants in American Odyssey Funds, Inc. (the "Funds"), may elect to enter
into a separate asset allocation advisory agreement with Copeland Financial
Services, Inc. ("Copeland"), an affiliate of The Travelers. Under this
arrangement, Copeland provides asset allocation advice and charges participants
an annual fee, plus a one-time set-up fee of $30. The annual fee, which
decreases as a participant's assets in the Funds increase, is equivalent to an
amount of up to 1.50% of the participant's assets in the Funds. Copeland has
currently agreed to waive 0.25% of this fee. These fees totaled $5,306,354 and
$3,045,220, for the years ended December 31, 1995 and 1994, respectively.
No sales charge is deducted from participant purchase payments when they are
received. However, The Travelers assesses a 5% contingent deferred sales
charge if a participant's purchase payment is surrendered within five years of
its payment date. Contract surrender payments are stated prior to the
deduction of $1,392,135 and $666,955 of contingent deferred sales charges for
the years ended December 31, 1995 and 1994, respectively.
4. NET ASSETS HELD BY AFFILIATE
Approximately $5,373,000 and $4,925,000 of the net assets of Fund U were held
on behalf of an affiliate of The Travelers as of December 31, 1995 and 1994,
respectively. Transactions with this affiliate during the years ended December
31, 1995 and 1994, comprised participant purchase payments of approximately
$1,355,000 and $1,949,000 and contract surrenders of approximately $1,883,000
and $363,000, respectively.
-5-
<PAGE> 7
NOTES TO FINANCIAL STATEMENTS - CONTINUED
5. SUMMARY OF INVESTMENT OPTIONS
<TABLE>
<CAPTION>
NO. OF MARKET
SHARES VALUE
---------- -------------
<S> <C> <C>
TRAVELERS VARIABLE PRODUCTS FUNDS (14.4%)
Managed Assets Trust (Cost $139,908,102) 10,968,893 $ 170,017,842
High Yield Bond Trust (Cost $12,046,922) 1,401,632 12,614,692
Capital Appreciation Fund (Cost $94,239,227) 3,646,148 120,979,175
U.S. Government Securities Portfolio (Cost $25,265,522) 2,253,604 28,012,301
Social Awareness Stock Portfolio (Cost $5,806,088) 492,622 7,054,352
Utilities Portfolio (Cost $12,876,436) 1,188,237 15,268,848
---------- --------------
Total (Cost $290,142,297) 19,951,136 353,947,210
---------- --------------
TEMPLETON VARIABLE PRODUCTS SERIES FUND (15.5%)
Templeton Bond Fund (Cost $12,699,065) 1,108,307 13,166,690
Templeton Stock Fund (Cost $167,117,050) 9,748,957 203,168,254
Templeton Asset Allocation Fund (Cost $139,776,940) 8,866,083 166,061,738
---------- --------------
Total (Cost $319,593,055) 19,723,347 382,396,682
---------- --------------
FIDELITY'S VARIABLE INSURANCE PRODUCTS FUND (26.1%)
High Income Portfolio (Cost $47,162,532) 4,213,796 50,776,244
Growth Portfolio (Cost $280,543,594) 12,491,938 364,764,601
Equity-Income Portfolio (Cost $190,592,154) 11,790,442 227,201,816
---------- --------------
Total (Cost $518,298,280) 28,496,176 642,742,661
---------- --------------
FIDELITY'S VARIABLE INSURANCE PRODUCTS FUND II (15.3%)
Asset Manager Portfolio (Cost $342,023,109)
Total (Cost $342,023,109) 23,910,561 377,547,763
---------- --------------
DREYFUS STOCK INDEX FUND (2.7%)
Total (Cost $56,911,523) 3,828,671 65,853,145
---------- --------------
AMERICAN ODYSSEY FUNDS, INC. (25.6%)
American Odyssey Core Equity Fund (Cost $143,739,163) 13,310,057 177,289,964
American Odyssey Emerging Opportunities Fund (Cost $120,373,380) 10,089,352 151,542,072
American Odyssey International Equity Fund (Cost $79,331,616) 6,979,145 88,495,559
American Odyssey Long-Term Bond Fund (Cost $109,970,003) 10,761,200 113,315,437
American Odyssey Intermediate-Term Bond Fund (Cost $71,629,767) 7,012,463 72,789,370
American Odyssey Short-Term Bond Fund (Cost $25,373,686) 2,503,349 25,584,224
---------- --------------
Total (Cost $550,417,615) 50,655,566 629,016,626
---------- --------------
SMITH BARNEY/TRAVELERS SERIES FUND INC. (0.4%)
Alliance Growth Portfolio (Cost $3,069,804) 228,918 3,081,239
G.T. Global Strategic Income Portfolio (Cost $180,457) 16,913 183,843
Smith Barney High Income Portfolio (Cost $146,935) 13,356 148,119
Smith Barney International Equity Portfolio (Cost $656,861) 62,688 669,505
Smith Barney Income and Growth Portfolio (Cost $2,025,925) 166,257 2,138,064
Putnam Diversified Income Portfolio (Cost $833,163) 73,707 832,153
MFS Total Return Portfolio (Cost $3,069,761) 269,991 3,212,899
---------- --------------
Total (Cost $9,982,906) 831,830 10,265,822
---------- --------------
TOTAL INVESTMENT OPTIONS (100%)
(COST $2,087,368,785) $2,461,769,909
==============
</TABLE>
-6-
<PAGE> 8
NOTES TO FINANCIAL STATEMENTS - CONTINUED
6. NET CONTRACT OWNERS' EQUITY
<TABLE>
<CAPTION>
DECEMBER 31, 1995
----------------------------------------------
ACCUMULATION ANNUITY UNIT NET
UNITS UNITS VALUE ASSETS
----- ----- ----- ------
<S> <C> <C> <C> <C>
Managed Assets Trust
Qualified.................................... 57,020,314 64,995 $2.763 $ 157,743,322
Non-Qualified................................ 4,113,975 27,182 2.975 12,317,046
High Yield Bond Trust
Qualified.................................... 4,592,111 - 2.472 11,351,620
Non-Qualified................................ 497,535 11,223 2.498 1,270,707
Capital Appreciation Fund
Qualified.................................... 45,978,768 22,479 2.396 110,223,695
Non-Qualified................................ 4,414,558 38,277 2.485 11,064,962
The Travelers Series Trust
U.S. Government Securities Portfolio......... 21,338,806 - 1.321 28,184,457
Social Awareness Stock Portfolio............. 4,840,885 - 1.461 7,071,541
Utilities Portfolio.......................... 11,917,700 - 1.284 15,301,065
Templeton Variable Products Series Fund
Templeton Bond Fund.......................... 10,527,233 9,202 1.250 13,166,550
Templeton Stock Fund......................... 122,936,652 24,148 1.655 203,491,467
Templeton Asset Allocation Fund.............. 107,459,620 9,318 1.546 166,144,914
Fidelity's Variable Insurance Products Fund
High Income Portfolio........................ 32,600,537 34,153 1.568 51,166,462
Growth Portfolio............................. 229,177,825 121,107 1.594 365,418,744
Equity-Income Portfolio...................... 153,461,509 81,176 1.484 227,776,532
Fidelity's Variable Insurance Products Fund II
Asset Manager Portfolio...................... 270,795,019 211,798 1.394 377,683,715
Dreyfus Stock Index Fund...................... 43,246,729 - 1.546 66,841,057
American Odyssey Funds, Inc.
American Odyssey Core Equity Fund............ 137,330,147 - 1.354 185,983,144
American Odyssey Emerging Opportunities Fund. 103,815,434 8,748 1.526 158,436,688
American Odyssey International Equity Fund... 70,364,454 - 1.274 89,664,702
American Odyssey Long-Term Bond Fund......... 101,376,422 - 1.221 123,771,354
American Odyssey Intermediate-Term Bond Fund. 68,877,506 - 1.128 77,674,318
American Odyssey Short-Term Bond Fund........ 24,416,215 - 1.102 26,893,408
Smith Barney/Travelers Series Fund Inc.
Alliance Growth Portfolio.................... 2,498,303 - 1.284 3,206,664
G.T. Global Strategic Income Portfolio....... 161,842 - 1.195 193,433
Smith Barney High Income Portfolio........... 137,755 - 1.124 154,765
Smith Barney International Equity Portfolio.. 592,682 - 1.137 673,921
Smith Barney Income and Growth Portfolio..... 1,747,342 - 1.246 2,176,413
Putnam Diversified Income Portfolio.......... 774,330 - 1.128 873,469
MFS Total Return Portfolio................... 2,733,609 - 1.205 3,294,241
--------------
Net Contract Owners' Equity................................................... $2,499,214,376
==============
</TABLE>
-7-
<PAGE> 9
NOTES TO FINANCIAL STATEMENTS - CONTINUED
7. SCHEDULE OF FUND U OPERATIONS AND CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994
<TABLE>
<CAPTION>
CAPITAL
MANAGED ASSETS TRUST HIGH YIELD BOND TRUST APPRECIATION FUND
-------------------------- ------------------------ -------------------------
1995 1994 1995 1994 1995 1994
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends....................................... $ 7,184,513 $ 11,797,895 $ 941,371 $ 908,267 $ 538,024 $ 358,325
------------ ------------ ----------- ----------- ------------ -----------
EXPENSES:
Insurance charges............................... 1,930,851 1,838,017 153,284 152,609 1,245,525 874,820
------------ ------------ ----------- ----------- ------------ -----------
Net investment income (loss).................. 5,253,662 9,959,878 788,087 755,658 (707,501) (516,495)
------------ ------------ ----------- ----------- ------------ -----------
REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss) from investment
transactions:
Proceeds from investments sold................. 11,838,891 17,256,950 2,341,036 2,915,483 13,097,985 9,689,951
Cost of investments sold....................... 9,792,813 15,400,891 2,295,750 2,839,358 9,274,345 7,636,698
------------ ------------ ----------- ----------- ------------ -----------
Net realized gain (loss)...................... 2,046,078 1,856,059 45,286 76,125 3,823,640 2,053,253
------------ ------------ ----------- ----------- ------------ -----------
Change in unrealized gain (loss) on investments:
Unrealized gain (loss) beginning of year....... 2,677,803 19,765,458 (190,385) 976,104 1,236,789 6,901,611
Unrealized gain (loss) end of year............. 30,109,740 2,677,803 567,770 (190,385) 26,739,948 1,236,789
------------ ------------ ----------- ----------- ------------ -----------
Net change in unrealized gain (loss) for
the year.................................... 27,431,937 (17,087,655) 758,155 (1,166,489) 25,503,159 (5,664,822)
------------ ------------ ----------- ----------- ------------ -----------
Net increase (decrease) in net assets
resulting from operations..................... 34,731,677 (5,271,718) 1,591,528 (334,706) 28,619,298 (4,128,064)
------------ ------------ ----------- ----------- ------------ -----------
UNIT TRANSACTIONS:
Participant purchase payments................... 12,725,731 16,108,507 1,152,461 1,293,542 17,519,986 18,411,998
Participant transfers from other Travelers
accounts...................................... 4,507,153 6,051,512 1,788,890 1,967,398 29,112,536 30,791,524
Administrative and asset allocation charges..... (219,268) (237,574) (18,625) (20,252) (160,042) (137,533)
Contract surrenders............................. (10,393,810) (9,072,855) (1,033,566) (1,210,352) (3,638,067) (2,976,142)
Participant transfers to other Travelers
accounts...................................... (10,950,505) (23,379,919) (2,329,135) (2,784,688) (28,049,805) (26,099,388)
Other payments to participants.................. (200,724) (262,973) (11,747) (40,146) (222,415) (67,334)
------------ ------------ ----------- ----------- ------------ -----------
Net increase (decrease) in net assets
resulting from unit transactions............ (4,531,423) (10,793,302) (451,722) (794,498) 14,562,193 19,923,125
------------ ------------ ----------- ----------- ------------ -----------
Net increase (decrease) in net assets........ 30,200,254 (16,065,020) 1,139,806 (1,129,204) 43,181,491 15,795,061
NET ASSETS:
Beginning of year............................. 139,860,114 155,925,134 11,482,521 12,611,725 78,107,166 62,312,105
------------ ------------ ----------- ----------- ------------ -----------
End of year................................... $170,060,368 $139,860,114 $12,622,327 $11,482,521 $121,288,657 $78,107,166
============ ============ =========== =========== ============ ===========
</TABLE>
-8-
<PAGE> 10
NOTES TO FINANCIAL STATEMENTS - CONTINUED
<TABLE>
<CAPTION>
U.S. GOVERNMENT SOCIAL AWARENESS
SECURITIES PORTFOLIO STOCK PORTFOLIO UTILITIES PORTFOLIO TEMPLETON BOND FUND
- ------------------------- ----------------------- ------------------------ -------------------------
1995 1994 1995 1994 1995 1994 1995 1994
---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
$ 1,398,521 $ 947,128 $ 119,821 $ 87,669 $ 150,434 $ - $ 554,133 $ 625,209
- ----------- ------------ ---------- ---------- ----------- ---------- ----------- -----------
325,837 318,691 74,063 45,194 130,215 42,161 153,608 133,981
- ----------- ------------ ---------- ---------- ----------- ---------- ----------- -----------
1,072,684 628,437 45,758 42,475 20,219 (42,161) 400,525 491,228
- ----------- ------------ ---------- ---------- ----------- ---------- ----------- -----------
7,588,890 6,627,937 1,013,467 768,125 2,361,428 1,913,029 1,764,933 2,096,128
7,393,404 6,550,850 808,197 677,069 2,102,248 1,895,166 1,785,361 2,193,743
- ----------- ------------ ---------- ---------- ----------- ---------- ----------- -----------
195,486 77,087 205,270 91,056 259,180 17,863 (20,428) (97,615)
- ----------- ------------ ---------- ---------- ----------- ---------- ----------- -----------
(1,427,050) 1,147,389 (63,248) 208,441 52,210 - (698,498) 359,548
2,746,779 (1,427,050) 1,248,264 (63,248) 2,392,412 52,210 467,625 (698,498)
- ----------- ------------ ---------- ---------- ----------- ---------- ----------- -----------
4,173,829 (2,574,439) 1,311,512 (271,689) 2,340,202 52,210 1,166,123 (1,058,046)
- ----------- ------------ ---------- ---------- ----------- ---------- ----------- -----------
5,441,999 (1,868,915) 1,562,540 (138,158) 2,619,601 27,912 1,546,220 (664,433)
- ----------- ------------ ---------- ---------- ----------- ---------- ----------- -----------
1,592,087 6,745,869 1,519,956 929,015 2,973,322 2,324,950 1,739,161 3,392,436
5,497,597 6,392,347 1,501,420 863,341 9,184,581 6,101,993 1,789,574 3,673,260
(31,716) (33,644) (12,158) (9,227) (14,379) (5,145) (14,121) (13,693)
(1,864,732) (2,155,692) (79,490) (66,269) (183,673) (56,197) (450,326) (294,123)
(6,668,246) (10,024,208) (1,298,335) (1,066,309) (5,017,497) (2,612,177) (2,647,625) (4,267,516)
(180,911) (189,210) (2,013) - (32,215) (10,011) (11,299) (4,036)
- ----------- ------------ ---------- ---------- ----------- ---------- ----------- -----------
(1,655,921) 735,462 1,629,380 650,551 6,910,139 5,743,413 405,364 2,486,328
- ----------- ------------ ---------- ---------- ----------- --------- ----------- -----------
3,786,078 (1,133,453) 3,191,920 512,393 9,529,740 5,771,325 1,951,584 1,821,895
24,398,379 25,531,832 3,879,621 3,367,228 5,771,325 - 11,214,966 9,393,071
- ----------- ------------ ---------- ---------- ----------- ---------- ----------- -----------
$28,184,457 $ 24,398,379 $7,071,541 $3,879,621 $15,301,065 $5,771,325 $13,166,550 $11,214,966
=========== ============ ========== ========== =========== ========== =========== ===========
</TABLE>
-9-
<PAGE> 11
NOTES TO FINANCIAL STATEMENTS - CONTINUED
7. SCHEDULE OF FUND U OPERATIONS AND CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994 (CONTINUED)
<TABLE>
<CAPTION>
TEMPLETON ASSET FIDELITY'S HIGH
TEMPLETON STOCK FUND ALLOCATION FUND INCOME PORTFOLIO
-------------------------- -------------------------- --------------------------
1995 1994 1995 1994 1995 1994
---- ---- ---- ----- ---- ----
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends...................................... $ 2,523,957 $ 944,994 $ 3,447,327 $ 2,082,812 $ 2,457,673 $ 2,410,696
------------ ------------ ------------ ------------ ------------ ------------
EXPENSES:
Insurance charges.............................. 2,112,407 1,306,677 1,847,180 1,398,064 532,559 359,644
------------ ------------ ------------ ------------ ------------ ------------
Net investment income (loss)................. 411,550 (361,683) 1,600,147 684,748 1,925,114 2,051,052
------------ ------------ ------------ ------------ ------------ ------------
REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss) from investment
transactions:
Proceeds from investments sold................ 4,184,428 4,887,673 8,767,048 1,531,028 4,968,874 7,810,635
Cost of investments sold...................... 2,939,726 3,777,878 7,005,322 1,234,719 4,751,441 7,586,042
------------ ------------ ------------ ------------ ------------ ------------
Net realized gain (loss)..................... 1,244,702 1,109,795 1,761,726 296,309 217,433 224,593
------------ ------------ ------------ ------------ ------------ ------------
Change in unrealized gain (loss) on investments:
Unrealized gain (loss) beginning of year...... 2,277,411 8,478,654 1,519,117 7,840,073 (1,388,217) 1,749,503
Unrealized gain (loss) end of year............ 36,051,204 2,277,411 26,284,798 1,519,117 3,613,712 (1,388,217)
------------ ------------ ------------ ------------ ------------ ------------
Net change in unrealized gain (loss)
for the year.............................. 33,773,793 (6,201,243) 24,765,681 (6,320,956) 5,001,929 (3,137,720)
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net assets
resulting from operations.................... 35,430,045 (5,453,131) 28,127,554 (5,339,899) 7,144,476 (862,075)
------------ ------------ ------------ ------------ ------------ ------------
UNIT TRANSACTIONS:
Participant purchase payments.................. 38,462,831 39,232,523 23,642,833 42,047,835 10,516,308 9,491,538
Participant transfers from other
Travelers accounts........................... 28,718,119 70,703,053 9,637,424 45,091,664 14,386,232 17,854,012
Administrative and asset allocation charges.... (293,673) (199,800) (193,759) (166,499) (60,830) (48,036)
Contract surrenders............................ (5,514,830) (2,290,591) (7,577,118) (2,870,674) (1,665,013) (864,220)
Participant transfers to other Travelers
accounts..................................... (28,862,332) (26,870,976) (19,254,099) (15,669,794) (12,931,444) (14,826,130)
Other payments to participants................. (203,056) (111,447) (330,255) (174,731) (201,683) (297,022)
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net assets
resulting from unit transactions........... 32,307,059 80,462,762 5,925,026 68,257,801 10,043,570 11,310,142
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net assets....... 67,737,104 75,009,631 34,052,580 62,917,902 17,188,046 10,448,067
NET ASSETS:
Beginning of year............................ 135,754,363 60,744,732 132,092,334 69,174,432 33,978,416 23,530,349
------------ ------------ ------------ ------------ ------------ ------------
End of year.................................. $203,491,467 $135,754,363 $166,144,914 $132,092,334 $ 51,166,462 $ 33,978,416
============ ============ ============ ============ ============ ============
</TABLE>
-10-
<PAGE> 12
NOTES TO FINANCIAL STATEMENTS - CONTINUED
<TABLE>
<CAPTION>
FIDELITY'S FIDELITY'S EQUITY- FIDELITY'S ASSET DREYFUS STOCK
GROWTH PORTFOLIO INCOME PORTFOLIO MANAGER PORTFOLIO INDEX FUND
- -------------------------- ------------------------- -------------------------- ------------------------
1995 1994 1995 1994 1995 1994 1995 1994
---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
$ 1,191,787 $ 7,980,052 $ 8,589,857 $ 2,272,534 $ 7,188,187 $ 11,642,403 $ 1,629,405 $ 967,727
- ------------ ------------ ------------ ----------- ------------ ------------ ----------- -----------
3,684,287 2,076,224 1,935,998 584,739 4,490,031 3,776,729 627,250 414,165
- ------------ ------------ ------------ ----------- ------------ ------------ ----------- -----------
(2,492,500) 5,903,828 6,653,859 1,687,795 2,698,156 7,865,674 1,002,155 553,562
- ------------ ------------ ------------ ----------- ------------ ------------ ----------- -----------
8,250,207 536,929 3,334,273 63,435 31,499,795 1,082,303 2,234,634 3,142,570
5,394,373 479,211 2,893,003 66,022 27,445,980 950,713 2,199,090 3,550,672
- ------------ ------------ ------------ ----------- ------------ ------------ ----------- -----------
2,855,834 57,718 441,270 (2,587) 4,053,815 131,590 35,544 (408,102)
- ------------ ------------ ------------ ----------- ------------ ------------ ----------- -----------
7,539,489 13,687,213 313,667 104,352 (9,997,449) 20,934,353 (4,598,353) (4,368,729)
84,221,007 7,539,489 36,609,662 313,667 35,524,654 (9,997,449) 8,941,622 (4,598,353)
- ------------ ------------ ------------ ----------- ------------ ------------ ----------- -----------
76,681,518 (6,147,724) 36,295,995 209,315 45,522,103 (30,931,802) 13,539,975 (229,624)
- ------------ ------------ ------------ ----------- ------------ ------------ ----------- -----------
77,044,852 (186,178) 43,391,124 1,894,523 52,274,074 (22,934,538) 14,577,674 (84,164)
- ------------ ------------ ------------ ----------- ------------ ------------ ----------- -----------
68,178,034 59,359,898 51,490,745 23,978,386 59,550,456 101,058,500 11,429,071 9,301,654
70,935,405 60,520,647 77,738,161 58,461,159 15,094,558 99,669,238 14,735,957 5,962,556
(562,812) (398,535) (299,927) (94,158) (621,271) (601,917) (93,721) (72,647)
(14,480,130) (5,309,379) (4,785,609) (1,231,613) (16,635,725) (9,663,263) (1,652,874) (1,100,500)
(45,533,842) (25,808,607) (27,115,781) (9,413,073) (71,870,374) (37,372,036) (8,263,626) (8,460,165)
(324,795) (267,912) (327,225) (17,389) (920,794) (635,352) (47,582) (157,002)
- ------------ ------------ ------------ ----------- ------------ ------------ ----------- -----------
78,211,860 88,096,112 96,700,364 71,683,312 (15,403,150) 152,455,170 16,107,225 5,473,896
- ------------ ------------ ------------ ----------- ------------ ------------ ----------- -----------
155,256,712 87,909,934 140,091,488 73,577,835 36,870,924 129,520,632 30,684,899 5,389,732
210,162,032 122,252,098 87,685,044 14,107,209 340,812,791 211,292,159 36,156,158 30,766,426
- ------------ ------------ ------------ ----------- ------------ ------------ ----------- -----------
$365,418,744 $210,162,032 $227,776,532 $87,685,044 $377,683,715 $340,812,791 $66,841,057 $36,156,158
============ ============ ============ =========== ============ ============ =========== ===========
</TABLE>
-11-
<PAGE> 13
NOTES TO FINANCIAL STATEMENTS - CONTINUED
7. SCHEDULE OF FUND U OPERATIONS AND CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994 (CONTINUED)
<TABLE>
<CAPTION>
AMERICAN ODYSSEY
AMERICAN ODYSSEY EMERGING OPPORTUNITIES AMERICAN ODYSSEY
CORE EQUITY FUND FUND INTERNATIONAL EQUITY FUND
------------------------- ------------------------- ----------------------------
1995 1994 1995 1994 1995 1994
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends.................................. $ 8,238,273 $ 1,600,417 $ 6,411,590 $ 1,137,975 $ 864,640 $ 1,758,846
------------ ----------- ------------ ----------- ----------- -----------
EXPENSES:
Insurance charges.......................... 1,766,994 872,511 1,561,867 700,451 855,328 457,980
------------ ----------- ------------ ----------- ----------- -----------
Net investment income (loss)............. 6,471,279 727,906 4,849,723 437,524 9,312 1,300,866
------------ ----------- ------------ ----------- ----------- -----------
REALIZED GAIN (LOSS) AND CHANGE IN
UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss) from investment
transactions:
Proceeds from investments sold............ 2,554,698 51,333 7,612,195 1,279,750 798,713 675,821
Cost of investments sold.................. 1,929,933 50,337 4,943,095 1,073,345 697,051 582,141
------------ ----------- ------------ ----------- ----------- -----------
Net realized gain (loss)................. 624,765 996 2,669,100 206,405 101,662 93,680
------------ ----------- ------------ ----------- ----------- -----------
Change in unrealized gain (loss)
on investments:
Unrealized gain (loss) beginning of year.. (2,790,941) 156,938 7,749,282 2,448,079 (1,757,196) 2,674,845
Unrealized gain (loss) end of year........ 33,550,801 (2,790,941) 31,168,692 7,749,282 9,163,943 (1,757,196)
------------ ----------- ------------ ----------- ----------- -----------
Net change in unrealized gain (loss)
for the year........................... 36,341,742 (2,947,879) 23,419,410 5,301,203 10,921,139 (4,432,041)
------------ ----------- ------------ ----------- ----------- -----------
Net increase (decrease) in net assets
resulting from operations................ 43,437,786 (2,218,977) 30,938,233 5,945,132 11,032,113 (3,037,495)
------------ ----------- ------------ ----------- ----------- -----------
UNIT TRANSACTIONS:
Participant purchase payments.............. 38,103,304 25,149,323 36,860,517 20,528,669 21,452,760 14,428,964
Participant transfers from other
Travelers accounts....................... 25,706,834 48,123,620 34,699,760 41,201,751 18,271,289 28,811,508
Administrative and asset allocation charges (1,853,178) (1,028,088) (1,498,327) (807,375) (856,676) (506,764)
Contract surrenders........................ (5,219,198) (1,734,704) (4,131,758) (1,348,510) (2,246,977) (884,711)
Participant transfers to other
Travelers accounts....................... (13,084,927) (6,791,621) (24,587,291) (8,362,877) (9,015,509) (7,736,620)
Other payments to participants............. (153,977) (48,880) (119,071) (21,881) (37,631) (9,112)
------------ ----------- ------------ ----------- ----------- -----------
Net increase (decrease) in net
assets resulting from unit
transactions........................... 43,498,858 63,669,650 41,223,830 51,189,777 27,567,256 34,103,265
------------ ----------- ------------ ----------- ----------- -----------
Net increase (decrease) in net assets... 86,936,644 61,450,673 72,162,063 57,134,909 38,599,369 31,065,770
NET ASSETS:
Beginning of year........................ 99,046,500 37,595,827 86,274,625 29,139,716 51,065,333 19,999,563
------------ ----------- ------------ ----------- ----------- -----------
End of year.............................. $185,983,144 $99,046,500 $158,436,688 $86,274,625 $89,664,702 $51,065,333
============ =========== ============ =========== =========== ===========
</TABLE>
-12-
<PAGE> 14
NOTES TO FINANCIAL STATEMENTS - CONTINUED
<TABLE>
<CAPTION>
AMERICAN ODYSSEY
AMERICAN ODYSSEY INTERMEDIATE-TERM AMERICAN ODYSSEY
LONG-TERM BOND FUND BOND FUND SHORT-TERM BOND FUND ALLIANCE GROWTH PORTFOLIO
- ------------------------- ------------------------ ------------------------ -------------------------
1995 1994 1995 1994 1995 1994 1995 1994
- ------------ ----------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 10,146,574 $ 2,487,367 $ 4,715,639 $ 1,887,104 $ 1,279,091 $ 661,843 $ 87,142 $ -
- ------------ ----------- ----------- ----------- ----------- ----------- ------------- -----------
1,208,202 615,088 786,831 446,612 279,815 167,468 14,572 -
- ------------ ----------- ----------- ----------- ----------- ----------- ------------
8,938,372 1,872,279 3,928,808 1,440,492 999,276 494,375 72,570 -
- ------------ ----------- ----------- ----------- ----------- ----------- ------------ -----------
472,042 54,554 398,026 111,706 1,331,127 465,840 735,184 -
444,741 57,696 385,152 111,618 1,307,471 465,141 624,113 -
- ------------ ----------- ----------- ----------- ----------- ----------- ------------
27,301 (3,142) 12,874 88 23,656 699 111,071 -
- ------------ ----------- ----------- ----------- ----------- ----------- ------------ -----------
(5,640,279) (1,103,433) (2,767,442) (94,877) (722,729) (70,550) - -
3,345,434 (5,640,279) 1,159,603 (2,767,442) 210,538 (722,729) 11,435 -
- ------------ ----------- ----------- ----------- ----------- ----------- ------------
8,985,713 (4,536,846) 3,927,045 (2,672,565) 933,267 (652,179) 11,435 -
- ------------ ----------- ----------- ----------- ----------- ----------- ------------ -----------
17,951,386 (2,667,709) 7,868,727 (1,231,985) 1,956,199 (157,105) 195,076 -
- ------------ ----------- ----------- ----------- ----------- ----------- ------------ -----------
27,882,120 18,654,620 16,057,224 11,886,853 4,746,886 3,376,658 1,616,779 -
18,946,902 35,228,874 13,190,448 24,768,105 7,974,101 9,522,563 2,517,025 -
(1,299,849) (747,449) (789,474) (499,007) (241,333) (165,966) (3,040) -
(3,350,110) (1,137,829) (2,469,286) (1,030,466) (1,059,269) (526,031) (27,840) -
(7,859,175) (5,329,266) (6,139,322) (4,080,359) (4,153,623) (2,687,671) (1,091,336) -
(107,392) (18,691) (83,945) (17,982) (46,550) (11,836) - -
- ------------ ----------- ----------- ----------- ----------- ----------- ------------ -----------
34,212,496 46,650,259 19,765,645 31,027,144 7,220,212 9,507,717 3,011,588 -
- ------------ ----------- ----------- ----------- ----------- ----------- ------------ -----------
52,163,882 43,982,550 27,634,372 29,795,159 9,176,411 9,350,612 3,206,664 -
71,607,472 27,624,922 50,039,946 20,244,787 17,716,997 8,366,385 - -
- ------------ ----------- ----------- ----------- ----------- ----------- ------------ -----------
$123,771,354 $71,607,472 $77,674,318 $50,039,946 $26,893,408 $17,716,997 $ 3,206,664 $ -
============ =========== =========== =========== =========== =========== ============ ===========
</TABLE>
-13-
<PAGE> 15
NOTES TO FINANCIAL STATEMENTS - CONTINUED
7. SCHEDULE OF FUND U OPERATIONS AND CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994 (CONTINUED)
<TABLE>
<CAPTION>
SMITH BARNEY
G.T. GLOBAL STRATEGIC SMITH BARNEY INTERNATIONAL EQUITY
INCOME PORTFOLIO HIGH INCOME PORTFOLIO PORTFOLIO
---------------------- ---------------------- -----------------------
1995 1994 1995 1994 1995 1994
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends.......................................... $ 6,685 $ - $ 6,627 $ - $ 758 $ -
-------- --------- --------- --------- ---------- ---------
EXPENSES:
Insurance charges.................................. 1,042 - 798 - 3,528 -
-------- --------- --------- --------- ---------- ---------
Net investment income (loss)..................... 5,643 - 5,829 - (2,770) -
-------- --------- --------- --------- ---------- ---------
REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss) from investment transactions:
Proceeds from investments sold.................... 94,529 - 228,159 - 737,524 -
Cost of investments sold.......................... 88,691 - 227,132 - 716,941 -
-------- --------- --------- --------- ---------- ---------
Net realized gain (loss)......................... 5,838 - 1,027 - 20,583 -
-------- --------- -------- - --------- ---------- ---------
Change in unrealized gain (loss) on investments:
Unrealized gain (loss) beginning of year.......... - - - - - -
Unrealized gain (loss) end of year................ 3,386 - 1,184 - 12,644 -
-------- --------- --------- --------- ---------- ---------
Net change in unrealized gain (loss) for the year 3,386 - 1,184 - 12,644 -
-------- --------- --------- --------- ---------- ---------
Net increase (decrease) in net assets
resulting from operations........................ 14,867 - 8,040 - 30,457 -
-------- --------- --------- --------- ---------- ---------
UNIT TRANSACTIONS:
Participant purchase payments...................... 53,544 - 123,596 - 248,413 -
Participant transfers from other Travelers accounts 229,702 - 263,996 - 1,207,815 -
Administrative and asset allocation charges........ (234) - (156) - (921) -
Contract surrenders................................ (5,779) - (729) - (1,611) -
Participant transfers to other Travelers accounts.. (98,667) - (239,982) - (810,232) -
Other payments to participants..................... - - - - - -
-------- --------- --------- --------- ---------- ---------
Net increase (decrease) in net assets resulting
from unit transactions.......................... 178,566 - 146,725 - 643,464 -
-------- --------- --------- --------- ---------- ---------
Net increase (decrease) in net assets........... 193,433 - 154,765 - 673,921 -
NET ASSETS:
Beginning of year................................ - - - - - -
-------- --------- --------- --------- ---------- ---------
End of year...................................... $193,433 $ - $ 154,765 $ - $ 673,921 $ -
======== ========= ========= ========= ========== =========
</TABLE>
-14-
<PAGE> 16
NOTES TO FINANCIAL STATEMENTS - CONTINUED
<TABLE>
<CAPTION>
SMITH BARNEY PUTNAM DIVERSIFIED
INCOME AND GROWTH PORTFOLIO INCOME PORTFOLIO MFS TOTAL RETURN PORTFOLIO COMBINED
- --------------------------- -------------------- -------------------------- ------------------------------
1995 1994 1995 1994 1995 1994 1995 1994
---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
$ 36,534 $ - $ 38,421 $ - $ 75,369 $ - $ 69,822,353 $ 52,559,263
- ---------- --------------- --------- --------- ---------- -------------- -------------- --------------
8,818 - 3,893 - 12,224 - 25,747,007 16,581,825
- ---------- --------------- --------- --------- ---------- -------------- -------------- --------------
27,716 - 34,528 - 63,145 - 44,075,346 35,977,438
- ---------- --------------- --------- --------- ---------- -------------- -------------- --------------
808,019 - 437,525 - 41,955 - 119,495,585 62,961,180
774,305 - 429,667 - 37,799 - 98,687,144 57,179,310
- ---------- --------------- --------- --------- ---------- -------------- -------------- --------------
33,714 - 7,858 - 4,156 - 20,808,441 5,781,870
- ---------- --------------- --------- --------- ---------- -------------- -------------- --------------
- - - - - - (8,676,019) 81,794,972
112,139 - (1,010) - 143,138 - 374,401,124 (8,676,019)
- ---------- --------------- --------- --------- ---------- -------------- -------------- --------------
112,139 - (1,010) - 143,138 - 383,077,143 (90,470,991)
- ---------- --------------- --------- --------- ---------- -------------- -------------- --------------
173,569 - 41,376 - 210,439 - 447,960,930 (48,711,683)
- ---------- --------------- --------- --------- ---------- -------------- -------------- --------------
685,912 - 526,594 - 1,177,680 - 452,028,311 427,701,738
2,243,499 - 774,514 - 2,005,961 - 412,659,453 601,760,125
(1,255) - (762) - (1,960) - (9,143,467) (5,793,309)
(15,712) - (1,244) - (2,761) - (88,487,237) (45,824,121)
(909,600) - (467,009) - (95,118) - (339,344,437) (243,643,400)
- - - - - - (3,565,280) (2,362,947)
- ---------- --------------- --------- --------- ---------- -------------- -------------- --------------
2,002,844 - 832,093 - 3,083,802 - 424,147,343 731,838,086
- ---------- --------------- --------- --------- ---------- -------------- -------------- --------------
2,176,413 - 873,469 - 3,294,241 - 872,108,273 683,126,403
- - - - - - 1,627,106,103 943,979,700
- ---------- --------------- --------- --------- ---------- -------------- -------------- --------------
$2,176,413 $ - $ 873,469 $ - $3,294,241 $ - $2,499,214,376 $1,627,106,103
========== =============== ========= ========= ========== ============== ============== ==============
</TABLE>
-15-
<PAGE> 17
NOTES TO FINANCIAL STATEMENTS - CONTINUED
8. SCHEDULE OF ACCUMULATION AND ANNUITY UNITS FOR FUND U
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994
<TABLE>
<CAPTION>
MANAGED ASSETS TRUST HIGH YIELD BOND TRUST CAPITAL APPRECIATION FUND
-------------------------- -------------------------- ----------------------------
1995 1994 1995 1994 1995 1994
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Accumulation and annuity units
beginning of year........................ 63,168,528 68,027,761 5,293,204 5,668,742 43,765,022 32,827,520
Accumulation units purchased and
transferred from other Travelers accounts 6,804,157 9,829,134 1,254,645 1,483,985 21,692,792 26,936,524
Accumulation units redeemed and
transferred to other Travelers accounts.. (8,739,735) (14,680,729) (1,446,258) (1,858,672) (14,999,326) (15,994,317)
Annuity units............................. (6,484) (7,638) (722) (851) (4,406) (4,705)
------------ ------------ ------------ ------------ ------------- -------------
Accumulation and annuity units
end of year.............................. 61,226,466 63,168,528 5,100,869 5,293,204 50,454,082 43,765,022
============ ============ ============ ============ ============= =============
<CAPTION>
U.S. GOVERNMENT SOCIAL AWARENESS
SECURITIES PORTFOLIO STOCK PORTFOLIO UTILITIES PORTFOLIO
-------------------------- -------------------------- ----------------------------
1995 1994 1995 1994 1995 1994
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Accumulation and annuity units
beginning of year........................ 22,709,043 22,142,424 3,498,916 2,920,464 5,739,775 -
Accumulation units purchased and
transferred from other Travelers accounts 5,969,324 11,851,220 2,357,639 1,580,346 10,825,283 8,412,648
Accumulation units redeemed and
transferred to other Travelers accounts.. (7,339,561) (11,284,601) (1,015,670) (1,001,894) (4,647,358) (2,672,873)
Annuity units............................. - - - - - -
------------ ------------ ------------ ------------ ------------- -------------
Accumulation and annuity units
end of year.............................. 21,338,806 22,709,043 4,840,885 3,498,916 11,917,700 5,739,775
============ ============ ============ ============ ============= =============
<CAPTION>
TEMPLETON ASSET
TEMPLETON BOND FUND TEMPLETON STOCK FUND ALLOCATION FUND
-------------------------- -------------------------- ----------------------------
1995 1994 1995 1994 1995 1994
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Accumulation and annuity units
beginning of year........................ 10,185,995 8,013,975 101,461,716 43,847,436 103,406,989 51,892,645
Accumulation units purchased and
transferred from other Travelers accounts 2,985,095 6,253,420 44,948,066 79,071,044 23,794,549 65,958,367
Accumulation units redeemed and
transferred to other Travelers accounts.. (2,633,968) (4,080,815) (23,447,028) (21,455,245) (19,731,907) (14,443,661)
Annuity units............................. (687) (585) (1,954) (1,519) (693) (362)
------------ ------------ ------------ ------------ ------------- -------------
Accumulation and annuity units
end of year.............................. 10,536,435 10,185,995 122,960,800 101,461,716 107,468,938 103,406,989
============ ============ ============ ============ ============= =============
<CAPTION>
FIDELITY'S HIGH FIDELITY'S GROWTH FIDELITY'S EQUITY
INCOME PORTFOLIO PORTFOLIO INCOME PORTFOLIO
-------------------------- -------------------------- ----------------------------
1995 1994 1995 1994 1995 1994
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Accumulation and annuity units
beginning of year........................ 25,813,287 17,380,805 176,304,261 101,260,373 78,856,048 13,414,425
Accumulation units purchased and
transferred from other Travelers accounts 16,940,763 20,326,066 94,357,102 102,249,321 99,568,686 75,280,518
Accumulation units redeemed and
transferred to other Travelers accounts.. (10,116,608) (11,891,324) (41,359,028) (27,204,765) (24,872,561) (9,833,706)
Annuity units............................. (2,752) (2,260) (3,403) (668) (9,488) (5,189)
------------ ------------ ------------ ------------ ------------- -------------
Accumulation and annuity units
end of year.............................. 32,634,690 25,813,287 229,298,932 176,304,261 153,542,685 78,856,048
============ ============ ============ ============ ============= =============
</TABLE>
-16-
<PAGE> 18
NOTES TO FINANCIAL STATEMENTS - CONTINUED
8. SCHEDULE OF ACCUMULATION AND ANNUITY UNITS FOR FUND U
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994 (CONTINUED)
<TABLE>
<CAPTION>
FIDELITY'S ASSET DREYFUS STOCK AMERICAN ODYSSEY
MANAGER PORTFOLIO INDEX FUND CORE EQUITY FUND
-------------------------- ---------------------------- ----------------------------
1995 1994 1995 1994 1995 1994
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Accumulation and annuity units
beginning of year........................ 282,474,420 162,412,958 31,599,969 26,788,975 100,081,556 37,136,233
Accumulation units purchased and
transferred from other Travelers accounts 58,634,743 158,768,309 19,084,473 13,394,123 54,332,583 72,443,145
Accumulation units redeemed and
transferred to other Travelers accounts.. (70,087,353) (38,691,316) (7,437,713) (8,583,129) (17,083,992) (9,497,822)
Annuity units............................. (14,993) (15,531) - - - -
------------ ------------ ------------- ------------- ------------- -------------
Accumulation and annuity units
end of year.............................. 271,006,817 282,474,420 43,246,729 31,599,969 137,330,147 100,081,556
============ ============ ============= ============= ============= =============
<CAPTION>
AMERICAN ODYSSEY
EMERGING OPPORTUNITIES AMERICAN ODYSSEY AMERICAN ODYSSEY
FUND INTERNATIONAL EQUITY FUND LONG-TERM BOND FUND
-------------------------- ---------------------------- ----------------------------
1995 1994 1995 1994 1995 1994
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Accumulation and annuity units
beginning of year........................ 73,837,797 27,011,473 47,095,715 16,943,798 70,927,733 25,466,509
Accumulation units purchased and
transferred from other Travelers accounts 51,700,251 56,410,964 33,740,404 38,245,426 41,680,825 52,554,483
Accumulation units redeemed and
transferred to other Travelers accounts.. (21,710,744) (9,584,640) (10,471,665) (8,093,509) (11,232,136) (7,093,259)
Annuity units............................. (3,122) - - - - -
------------ ------------ ------------- ------------- ------------- -------------
Accumulation and annuity units
end of year.............................. 103,824,182 73,837,797 70,364,454 47,095,715 101,376,422 70,927,733
============ ============ ============= ============= ============= =============
<CAPTION>
AMERICAN ODYSSEY
INTERMEDIATE-TERM AMERICAN ODYSSEY
BOND FUND SHORT-TERM BOND FUND ALLIANCE GROWTH PORTFOLIO
-------------------------- ---------------------------- ----------------------------
1995 1994 1995 1994 1995 1994
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Accumulation and annuity units
beginning of year........................ 50,402,986 19,564,524 17,610,778 8,201,363 - -
Accumulation units purchased and
transferred from other Travelers accounts 27,369,748 36,451,352 11,996,257 12,765,365 3,402,780 -
Accumulation units redeemed and
transferred to other Travelers accounts.. (8,895,228) (5,612,890) (5,190,820) (3,355,950) (904,477) -
Annuity units............................. - - - - - -
------------ ------------ ------------- ------------- ------------- -------------
Accumulation and annuity units
end of year.............................. 68,877,506 50,402,986 24,416,215 17,610,778 2,498,303 -
============ ============ ============= ============= ============= =============
<CAPTION>
G.T. GLOBAL STRATEGIC SMITH BARNEY SMITH BARNEY INTERNATIONAL
INCOME PORTFOLIO HIGH INCOME PORTFOLIO EQUITY PORTFOLIO
-------------------------- ---------------------------- ----------------------------
1995 1994 1995 1994 1995 1994
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Accumulation and annuity units
beginning of year........................ - - - - - -
Accumulation units purchased and
transferred from other Travelers accounts 254,272 - 367,626 - 1,334,884 -
Accumulation units redeemed and
transferred to other Travelers accounts.. (92,430) - (229,871) - (742,202) -
Annuity units............................. - - - - - -
------------ ------------ ------------- ------------- ------------- -------------
Accumulation and annuity units
end of year.............................. 161,842 - 137,755 - 592,682 -
============ ============ ============= ============= ============= =============
</TABLE>
-17-
<PAGE> 19
NOTES TO FINANCIAL STATEMENTS - CONTINUED
8. SCHEDULE OF ACCUMULATION AND ANNUITY UNITS FOR FUND U
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994 (CONTINUED)
<TABLE>
<CAPTION>
SMITH BARNEY INCOME PUTNAM DIVERSIFIED
AND GROWTH PORTFOLIO INCOME PORTFOLIO MFS TOTAL RETURN PORTFOLIO
---------------------- -------------------- ----------------------------
1995 1994 1995 1994 1995 1994
---------- ---------- --------- --------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Accumulation and annuity units
beginning of year........................ - - - - - -
Accumulation units purchased and
transferred from other Travelers accounts 2,586,551 - 1,210,571 - 2,822,742 -
Accumulation units redeemed and
transferred to other Travelers accounts.. (839,209) - (436,241) - (89,133) -
Annuity units............................. - - - - - -
---------- ---------- --------- --------- ------------- -------------
Accumulation and annuity units
end of year.............................. 1,747,342 - 774,330 - 2,733,609 -
========== ========== ========= ========= ============= =============
</TABLE>
-18-
<PAGE> 20
REPORT OF INDEPENDENT ACCOUNTANTS
To the Owners of Variable Annuity Contracts of
The Travelers Fund U for Variable Annuities:
We have audited the accompanying statement of assets and liabilities of The
Travelers Fund U for Variable Annuities as of December 31, 1995, and the
related statement of operations for the year then ended, and the statement of
changes in net assets for each of the two years in the period then ended.
These financial statements are the responsibility of management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the 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, 1995, 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 Fund U for
Variable Annuities as of December 31, 1995, the results of its operations for
the year then ended and the changes in its net assets for each of the two years
in the period then ended, in conformity with generally accepted accounting
principles.
COOPERS & LYBRAND L.L.P
Hartford, Connecticut
February 20, 1996
-19-
<PAGE> 21
This page is intentionally left blank.
<PAGE> 22
Independent Accountants
COOPERS & LYBRAND L.L.P.
Hartford, Connecticut
This report is prepared for the general information of contract owners and is
not an offer of shares of The Travelers Fund U for Variable Annuities or Fund
U's underlying funds. It should not be used in connection with any offer except
in conjunction with the Prospectuses for the Variable Annuity products offered
by The Travelers Insurance Company and the Prospectuses for the underlying
funds, which collectively contain all pertinent information, including the
applicable sales commissions.
VG-FNDU (Annual) (12-95) Printed in U.S.A.
