<PAGE> 1
VARIABLE UNIVERSAL LIFE
ANNUAL REPORT
DECEMBER 31, 1996
THE TRAVELERS FUND UL
FOR VARIABLE LIFE INSURANCE
[TRAVELERSLIFE LOGO]
The Travelers Insurance Company
The Travelers Life and Annuity Company
One Tower Square
Hartford, CT 06183
<PAGE> 2
THE TRAVELERS FUND UL
FOR VARIABLE LIFE INSURANCE
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1996
<TABLE>
<S> <C> <C>
ASSETS:
Investments in eligible funds at market value:
Travelers Variable Products Funds, 3,387,399 shares (cost $11,411,884).................... $ 11,689,865
Templeton Variable Products Series Fund, 377,415 shares (cost $6,924,784)................. 8,108,807
Fidelity's Variable Insurance Products Fund, 631,630 shares (cost $12,378,462)............ 13,685,999
Fidelity's Variable Insurance Products Fund II, 196,802 shares (cost $2,877,764).......... 3,331,861
Dreyfus Stock Index Fund, 76,029 shares (cost $1,438,393)................................. 1,541,862
American Odyssey Funds, Inc., 33,784 shares (cost $465,098)............................... 453,672
Travelers Series Fund Inc., 181,817 shares (cost $2,408,698).............................. 2,549,196
Smith Barney Series Fund, 24,578 shares (cost $353,913)................................... 386,615
--------------
Total Investments (cost $38,258,996).................................................... $ 41,747,877
RECEIVABLES:
Dividends.................................................................................. 654,921
Premium payments and transfers from other Travelers accounts............................... 8,762
Other assets................................................................................ 144
-------------
Total Assets............................................................................ 42,411,704
-------------
LIABILITIES:
Payable for contract surrenders and transfers to other Travelers accounts.................. 9,293
Accrued liabilities........................................................................ 78,362
-------------
Total Liabilities...................................................................... 87,655
-------------
NET ASSETS: $ 42,324,049
=============
</TABLE>
See Notes to Financial Statements
-1-
<PAGE> 3
THE TRAVELERS FUND UL
FOR VARIABLE LIFE INSURANCE
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Dividends.................................................... $ 2,057,986
EXPENSES:
Insurance charges............................................ $ 192,440
Administrative charges....................................... 6,926
-------------
Total expenses.............................................. 199,366
-------------
Net investment income...................................... 1,858,620
-------------
REALIZED GAIN AND CHANGE IN UNREALIZED GAIN ON
INVESTMENTS:
Realized gain from investment transactions:
Proceeds from investments sold............................... 10,760,279
Cost of investments sold..................................... 10,228,004
-------------
Net realized gain........................................... 532,275
Change in unrealized gain on investments:
Unrealized gain at December 31, 1995........................ 1,954,404
Unrealized gain at December 31, 1996........................ 3,488,881
-------------
Net change in unrealized gain for the year................. 1,534,477
-------------
Net realized gain and change in unrealized gain........... 2,066,752
-------------
Net increase in net assets resulting from operations......... $ 3,925,372
=============
</TABLE>
See Notes to Financial Statements
-2-
<PAGE> 4
THE TRAVELERS FUND UL
FOR VARIABLE LIFE INSURANCE
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
OPERATIONS:
Net investment income......................................................... $ 1,858,620 $ 232,605
Net realized gain from investment transactions................................ 532,275 150,979
Net change in unrealized gain (loss) on investments........................... 1,534,477 2,034,336
---------------- ------------------
Net increase in net assets resulting from operations......................... 3,925,372 2,417,920
---------------- ------------------
UNIT TRANSACTIONS:
Participant premium payments
(applicable to 15,169,725 and 10,466,712 units, respectively)................ 21,543,041 12,301,017
Participant transfers from other Travelers accounts
(applicable to 10,670,706 and 4,576,712 units, respectively)................. 14,576,672 5,501,026
Contract surrenders
(applicable to 3,002,978 and 1,594,372 units, respectively).................. (4,214,910) (1,932,840)
Participant transfers to other Travelers accounts
(applicable to 9,824,019 and 3,881,875 units, respectively).................. (14,195,827) (5,170,119)
Other payments to participants
(applicable to 1,265 units).................................................. - (1,498)
---------------- ------------------
Net increase in net assets resulting from unit transactions................ 17,708,976 10,697,586
---------------- ------------------
Net increase in net assets................................................ 21,634,348 13,115,506
NET ASSETS:
Beginning of year............................................................. 20,689,701 7,574,195
---------------- ------------------
End of year................................................................... $ 42,324,049 $ 20,689,701
================ ==================
</TABLE>
See Notes to Financial Statements
-3-
<PAGE> 5
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
The Travelers Fund UL for Variable Life Insurance ("Fund UL") 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 life insurance contracts issued by The Travelers.
Fund UL 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 UL was $3,159,262 at December 31, 1996.
Participant premium payments applied to Fund UL are invested in one or more
eligible funds in accordance with the selection made by the owner. As of
December 31, 1996, the eligible funds available under Fund UL are: Managed
Assets Trust; High Yield Bond Trust; Capital Appreciation Fund; Cash Income
Trust; U.S. Government Securities Portfolio, Utilities Portfolio, Zero
Coupon Bond Fund Portfolio Series 1998, Zero Coupon Bond Fund Portfolio
Series 2000 and Zero Coupon Bond Fund Portfolio Series 2005 of The
Travelers Series Trust; Alliance Growth Portfolio, Smith Barney Income and
Growth Portfolio, Smith Barney High Income Portfolio, MFS Total Return
Portfolio and AIM Capital Appreciation Portfolio of the Travelers Series
Fund Inc. (formerly Smith Barney/Travelers Series Fund Inc.); the Total
Return Portfolio of the Smith Barney Series Fund (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
Travelers Series Fund Inc. and Dreyfus Stock Index Fund which are
incorporated under Maryland law. Not all funds are available in all
states.
Effective July 12, 1995, the following funds were no longer available to
new contract owners under Fund UL. These funds are: 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.
The following is a summary of significant accounting policies consistently
followed by Fund UL 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 UL 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 UL. Fund UL 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 $30,119,571 and $10,760,279,
respectively, for the year ended December 31, 1996. Realized gains and
losses from investment transactions are reported on an identified cost
basis. The cost of investments in eligible funds was $38,258,996 at
December 31, 1996. Gross unrealized appreciation for all investments at
December 31, 1996 was $3,570,789. Gross unrealized depreciation for all
investments at December 31, 1996 was $81,908.
-4-
<PAGE> 6
NOTES TO FINANCIAL STATEMENTS - CONTINUED
3. CONTRACT CHARGES
Insurance charges and administrative charges up to a maximum of 0.80% and
0.10%, respectively, of the average net assets of Fund UL on an annual
basis, are allowed for mortality and expense risks and administrative
expenses assumed by The Travelers. For Price I contracts (all InVest
Contracts and MarketLife Contracts issued prior to July 12, 1995, and
MarketLife Contracts issued on or after July 12, 1995 where state approval
for Enhanced MarketLife was not approved), the insurance charges were 0.60%
and the administrative charges were waived by The Travelers for the year
ended December 31, 1996. For Price II contracts (all MarketLife Contracts
issued on or after July 12, 1995, where state approval has been received),
the insurance charges are 0.80% for the first fifteen policy years, and
0.45% thereafter. The administrative charges for these contracts are 0.10%
for the first fifteen policy years and 0% thereafter.
The Travelers receives contingent surrender charges on full or partial
contract surrenders. Such charges are computed by applying various
percentages to premiums and/or stated contract amounts (as described in the
prospectus). The Travelers received $106,276 and $23,577 in satisfaction
of such contingent surrender charges for the years ended December 31, 1996
and 1995, respectively.
4. NET CONTRACT OWNERS' EQUITY
<TABLE>
<CAPTION>
DECEMBER 31, 1996
--------------------------------------------------
UNIT NET
UNITS VALUE ASSETS
----- ----- ------
<S> <C> <C> <C>
Travelers Variable Products Series Fund
Managed Assets Trust
Price I.................................. 608,767 $ 2.231 $ 1,358,063
Price II................................. 130,601 2.221 290,111
High Yield Bond Trust
Price I.................................. 148,199 2.170 321,636
Capital Appreciation Fund
Price I.................................. 902,679 2.162 1,951,566
Price II................................. 657,729 2.153 1,415,937
Cash Income Trust
Price I.................................. 354,388 1.485 526,438
Price II................................. 1,517,957 1.479 2,245,306
U.S. Government Securities Portfolio
Price I.................................. 136,245 1.161 158,203
Price II................................. 491,615 1.156 568,412
Utilities Portfolio
Price I.................................. 70,217 1.363 95,692
Price II................................. 27,805 1.357 37,732
Zero Coupon Bond Fund Portfolio Series 1998
Price I.................................. 1,000,000 1.058 1,057,712
Price II................................. 14,502 1.054 15,283
Zero Coupon Bond Fund Portfolio Series 2000
Price I.................................. 1,000,000 1.052 1,051,780
Price II................................. 3,545 1.048 3,714
Zero Coupon Bond Fund Portfolio Series 2005
Price I.................................. 1,082,794 1.050 1,136,685
Price II................................. 50,556 1.046 52,877
</TABLE>
-5-
<PAGE> 7
NOTES TO FINANCIAL STATEMENTS - CONTINUED
4. NET CONTRACT OWNERS' EQUITY (CONTINUED)
<TABLE>
<CAPTION>
UNIT NET
UNITS VALUE ASSETS
----- ----- ------
<S> <C> <C> <C>
Templeton Variable Products Series Fund
Price I.................................. 126,772 $ 1.170 $ 148,317
Price II................................. 122,984 1.165 143,274
Templeton Stock Fund
Price I.................................. 2,447,759 1.454 3,559,687
Price II................................. 930,912 1.448 1,348,031
Templeton Asset Allocation Fund
Price I.................................. 1,674,567 1.363 2,281,602
Price II................................. 427,705 1.357 580,268
Fidelity's Variable Insurance Products Fund
High Income Portfolio
Price I.................................. 843,627 1.296 1,092,962
Price II................................. 965,612 1.290 1,245,679
Growth Portfolio
Price I.................................. 2,549,547 1.498 3,819,863
Price II................................. 1,586,792 1.492 2,367,256
Equity-Income Portfolio
Price I.................................. 2,044,165 1.556 3,180,219
Price II................................. 1,265,744 1.549 1,960,792
Fidelity's Variable Insurance Products Fund
Asset Manager Portfolio
Price I.................................. 2,452,548 1.217 2,985,524
Price II................................. 281,887 1.212 341,686
Dreyfus Stock Index Fund
Price I.................................. 344,866 1.667 574,846
Price II................................. 595,425 1.660 988,279
American Odyssey Funds, Inc.
American Odyssey Core Equity Fund
Price I.................................. 34,187 1.693 57,892
American Odyssey Emerging Opportunities Fund
Price I.................................. 191,470 1.373 262,801
American Odyssey International Equity Fund
Price I.................................. 76,225 1.348 102,744
American Odyssey Long-Term Bond Fund
Price I.................................. 44,927 1.226 55,085
American Odyssey Intermediate-Term Bond Fund
Price I.................................. 833 1.091 909
American Odyssey Short-Term Bond Fund
Price I.................................. 2,640 1.145 3,022
</TABLE>
-6-
<PAGE> 8
NOTES TO FINANCIAL STATEMENTS - CONTINUED
4. NET CONTRACT OWNERS' EQUITY (CONTINUED)
<TABLE>
<CAPTION>
UNIT NET
UNITS VALUE ASSETS
----- ----- ------
<S> <C> <C> <C>
Travelers Series Fund Inc.
Alliance Growth Portfolio
Price I............................... 130,486 $ 1.342 $ 175,052
Price II.............................. 757,945 1.336 1,012,628
Smith Barney Income and Growth Portfolio
Price I............................... 9,830 1.271 12,496
Price II.............................. 174,833 1.267 221,449
Smith Barney High Income Portfolio
Price I............................... 15,538 1.117 17,352
Price II.............................. 123,317 1.113 137,306
MFS Total Return Portfolio
Price I............................... 101,119 1.237 125,113
Price II.............................. 216,413 1.232 266,690
AIM Capital Appreciation Portfolio
Price I............................... 67,039 1.061 71,142
Price II.............................. 481,897 1.059 510,097
Smith Barney Series Fund
Total Return Portfolio
Price I............................... 24,849 1.291 32,071
Price II.............................. 275,810 1.286 354,768
----------------
Net Contract Owners' Equity........................................................ $ 42,324,049
================
</TABLE>
-7-
<PAGE> 9
NOTES TO FINANCIAL STATEMENTS - CONTINUED
5. STATEMENT OF INVESTMENTS
<TABLE>
<CAPTION>
INVESTMENT OPTIONS NO. OF MARKET
SHARES VALUE
------------- ------------
<S> <C> <C>
TRAVELERS VARIABLE PRODUCTS FUNDS (28.0%)
Managed Assets Trust (Cost $1,477,114) 101,887 $ 1,526,268
High Yield Bond Trust (Cost $293,704) 34,310 291,293
Capital Appreciation Fund (Cost $2,855,389) 85,280 3,131,484
Cash Income Trust (Cost $2,776,262) 2,776,262 2,776,262
U.S. Government Securities Portfolio (Cost $717,654) 63,026 684,459
Utilities Portfolio (Cost $125,795) 10,014 122,374
Zero Coupon Bond Fund Portfolio Series 1998 (Cost $1,019,678) 101,906 1,018,037
Zero Coupon Bond Fund Portfolio Series 2000 (Cost $1,008,505) 100,818 1,004,146
Zero Coupon Bond Fund Portfolio Series 2005 (Cost $1,137,783) 113,896 1,135,542
------------- ------------
Total (Cost $11,411,884) 3,387,399 11,689,865
------------- ------------
TEMPLETON VARIABLE PRODUCTS SERIES FUND (19.4%)
Templeton Bond Fund (Cost $273,039) 25,074 291,615
Templeton Stock Fund (Cost $4,259,103) 216,580 4,955,356
Templeton Asset Allocation Fund (Cost $2,392,642) 135,761 2,861,836
------------- ------------
Total (Cost $6,924,784) 377,415 8,108,807
------------- ------------
FIDELITY'S VARIABLE INSURANCE PRODUCTS FUND (32.8%)
High Income Portfolio (Cost $2,252,911) 188,689 2,362,383
Growth Portfolio (Cost $5,544,492) 198,672 6,186,639
Equity-Income Portfolio (Cost $4,581,059) 244,269 5,136,977
------------- ------------
Total (Cost $12,378,462) 631,630 13,685,999
------------- ------------
FIDELITY'S VARIABLE INSURANCE PRODUCTS FUND II (8.0%)
Asset Manager Portfolio (Cost $2,877,764)
Total (Cost $2,877,764) 196,802 3,331,861
------------- ------------
DREYFUS STOCK INDEX FUND (3.7%)
Total (Cost $1,438,393) 76,029 1,541,862
------------- ------------
AMERICAN ODYSSEY FUNDS, INC. (1.1%)
American Odyssey Core Equity Fund (Cost $45,780) 3,530 54,675
American Odyssey Emerging Opportunities Fund (Cost $274,840) 18,070 242,503
American Odyssey International Equity Fund (Cost $85,978) 6,651 100,297
American Odyssey Long-Term Bond Fund (Cost $54,634) 5,164 52,417
American Odyssey Intermediate-Term Bond Fund (Cost $885) 84 862
American Odyssey Short-Term Bond Fund (Cost $2,981) 285 2,918
------------- ------------
Total (Cost $465,098) 33,784 453,672
------------- ------------
TRAVELERS SERIES FUND INC. (6.1%)
Alliance Growth Portfolio (Cost $1,090,207) 70,764 1,187,419
Smith Barney Income and Growth Portfolio (Cost $229,998) 15,536 233,966
Smith Barney High Income Portfolio (Cost $150,861) 13,064 154,680
MFS Total Return Portfolio (Cost $373,597) 29,752 391,838
AIM Capital Appreciation Portfolio (Cost $564,035) 52,701 581,293
------------- ------------
Total (Cost $2,408,698) 181,817 2,549,196
------------- ------------
SMITH BARNEY SERIES FUND (0.9%)
Total Return Portfolio (Cost $353,913)
Total (Cost $353,913) 24,578 386,615
------------- ------------
TOTAL INVESTMENT OPTIONS (100%)
(Cost $38,258,996) $ 41,747,877
============
</TABLE>
-8-
<PAGE> 10
THIS PAGE INTENTIONALLY LEFT BLANK.
-9-
<PAGE> 11
NOTES TO FINANCIAL STATEMENTS - CONTINUED
6. SCHEDULE OF FUND UL OPERATIONS AND CHANGES IN NET ASSETS FOR THE YEARS
ENDED DECEMBER 31, 1996 AND 1995
<TABLE>
<CAPTION>
MANAGED ASSETS TRUST HIGH YIELD BOND TRUST
-------------------------- ------------------------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends............................................. $ 212,189 $ 40,936 $ 58,484 $ 18,822
----------- ------------- ------------- ---------------
EXPENSES:
Insurance charges..................................... 9,244 5,330 1,710 1,571
Administrative charges................................ 266 3 - -
----------- ------------- ------------- ---------------
Net investment income (loss).................... 202,679 35,603 56,774 17,251
----------- ------------- ------------- ---------------
REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss) from investment transactions:
Proceeds from investments sold.................... 398,836 376,022 266,166 77,846
Cost of investments sold.......................... 355,102 359,634 261,596 81,477
----------- ------------- ------------- ---------------
Net realized gain (loss)........................ 43,734 16,388 4,570 (3,631)
----------- ------------- ------------- ---------------
Change in unrealized gain (loss) on investments:
Unrealized gain (loss) beginning of year.......... 113,258 (39,140) 16,476 (4,540)
Unrealized gain (loss) end of year................ 49,154 113,258 (2,411) 16,476
----------- ------------- ------------- ---------------
Net change in unrealized gain (loss) for the year (64,104) 152,398 (18,887) 21,016
----------- ------------- ------------- ---------------
Net increase (decrease) in net assets
resulting from operations....................... 182,309 204,389 42,457 34,636
----------- ------------- ------------- ---------------
UNIT TRANSACTIONS:
Participant premium payments.......................... 385,858 252,223 59,862 97,670
Participant transfers from other Travelers accounts... 446,005 206,853 210,756 8,164
Contract surrenders................................... (197,168) (213,318) (49,202) (63,621)
Participant transfers to other Travelers accounts..... (363,218) (80,934) (225,122) (24,590)
Other payments to participants........................ - - - -
----------- ------------- ------------- ---------------
Net increase (decrease) in net assets resulting
from unit transactions.......................... 271,477 164,824 (3,706) 17,623
----------- ------------- ------------- ---------------
Net increase in net assets...................... 453,786 369,213 38,751 52,259
NET ASSETS:
Beginning of year................................. 1,194,388 825,175 282,885 230,626
----------- ------------- ------------- ---------------
End of year....................................... $ 1,648,174 $ 1,194,388 $ 321,636 $ 282,885
=========== ============= ============= ===============
</TABLE>
<TABLE>
<CAPTION>
CAPITAL APPRECIATION FUND
------------------------------
1996 1995
---- ----
<S> <C> <C>
INVESTMENT INCOME:
Dividends............................................. $ 326,576 $ 2,760
------------ ----------------
EXPENSES:
Insurance charges..................................... 12,964 4,395
Administrative charges................................ 456 8
------------ ----------------
Net investment income (loss).................... 313,156 (1,643)
------------ ----------------
REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss) from investment transactions:
Proceeds from investments sold.................... 141,019 96,468
Cost of investments sold.......................... 97,726 81,467
------------ ----------------
Net realized gain (loss)........................ 43,293 15,001
------------ ----------------
Change in unrealized gain (loss) on investments:
Unrealized gain (loss) beginning of year.......... 177,890 (3,117)
Unrealized gain (loss) end of year................ 276,095 177,890
------------ ----------------
Net change in unrealized gain (loss) for the year 98,205 181,007
------------ ----------------
Net increase (decrease) in net assets
resulting from operations....................... 454,654 194,365
------------ ----------------
UNIT TRANSACTIONS:
Participant premium payments.......................... 845,776 329,154
Participant transfers from other Travelers accounts... 1,273,217 407,754
Contract surrenders................................... (250,675) (126,174)
Participant transfers to other Travelers accounts..... (124,142) (29,551)
Other payments to participants........................ - (324)
------------ ----------------
Net increase (decrease) in net assets resulting
from unit transactions.......................... 1,744,176 580,859
------------ ----------------
Net increase in net assets...................... 2,198,830 775,224
NET ASSETS:
Beginning of year................................. 1,168,673 393,449
------------ ----------------
End of year....................................... $ 3,367,503 $ 1,168,673
============ ================
</TABLE>
-10-
<PAGE> 12
NOTES TO FINANCIAL STATEMENTS - CONTINUED
<TABLE>
<CAPTION>
ZERO COUPON BOND
U.S. GOVERNMENT FUND PORTFOLIO
CASH INCOME TRUST SECURITIES PORTFOLIO UTILITIES PORTFOLIO SERIES 1998
- --------------------------------- --------------------------- ---------------------------- ---------------------------------
1996 1995 1996 1995 1996 1995 1996 1995
---- ---- ---- ---- ---- ---- ---- -----
<S> <C> <C> <C> <C> <C> <C> <C>
$ 90,366 $ 51,414 $ 58,279 $ 6,396 $ 13,790 $ 57 $ 67,102 $ -
- --------------- -------------- ------------ ------------ ------------- ----------- ------------- ---------------
15,944 7,336 1,660 776 688 200 6,251 1,346
1,351 70 100 2 23 1 6 -
- --------------- -------------- ------------ ------------ ------------- ----------- ------------- ---------------
73,071 44,008 56,519 5,618 13,079 (144) 60,845 (1,346)
- --------------- -------------- ------------ ------------ ------------- ----------- ------------- ---------------
6,855,752 3,122,783 45,082 43,281 42,674 22,221 6,286 1,261
6,855,752 3,122,783 43,606 42,077 37,280 20,300 6,135 1,246
- --------------- -------------- ------------ ------------ ------------- ----------- ------------- ---------------
- - 1,476 1,204 5,394 1,921 151 15
- --------------- -------------- ------------ ------------ ------------- ----------- ------------- ---------------
- - 19,739 (680) 7,329 (1) 24,969 -
- - (33,195) 19,739 (3,421) 7,329 (1,641) 24,969
- --------------- -------------- ------------ ------------ ------------- ----------- ------------- ---------------
- - (52,934) 20,419 (10,750) 7,330 (26,610) 24,969
- --------------- -------------- ------------ ------------ ------------- ----------- ------------- ---------------
73,071 44,008 5,061 27,241 7,723 9,107 34,386 23,638
- --------------- -------------- ------------ ------------ ------------- ----------- ------------- ---------------
11,879,168 3,808,981 92,662 52,081 79,509 30,285 - 1,000,000
1,603,195 809,577 513,975 29,366 25,144 43,375 15,174 -
(1,023,100) (209,087) (32,101) (17,273) (16,313) (5,130) (203) -
(11,441,681) (3,996,433) (20,458) (32,113) (33,120) (9,529) - -
- - - - - - - -
- --------------- -------------- ------------ ------------ ------------- ----------- ------------- ---------------
1,017,582 413,038 554,078 32,061 55,220 59,001 14,971 1,000,000
- --------------- -------------- ------------ ------------ ------------- ----------- ------------- ---------------
1,090,653 457,046 559,139 59,302 62,943 68,108 49,357 1,023,638
1,681,091 1,224,045 167,476 108,174 70,481 2,373 1,023,638 -
- --------------- -------------- ------------ ------------ ------------- ----------- ------------- ---------------
$ 2,771,744 $ 1,681,091 $ 726,615 $ 167,476 $ 133,424 $ 70,481 $ 1,072,995 $ 1,023,638
================ ============== ============ ============ ============= =========== ============= ===============
</TABLE>
-11-
<PAGE> 13
NOTES TO FINANCIAL STATEMENTS - CONTINUED
6. SCHEDULE OF FUND UL OPERATIONS AND CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995 (CONTINUED)
<TABLE>
<CAPTION>
ZERO COUPON BOND ZERO COUPON BOND
FUND PORTFOLIO FUND PORTFOLIO
SERIES 2000 SERIES 2005
--------------------------------- ----------------------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends................................................ $ 63,651 $ - $ 66,990 $ -
----------------- --------------- --------------- ------------
EXPENSES:
Insurance charges........................................ 6,171 1,341 6,538 1,346
Administrative charges................................... 2 - 26 -
----------------- --------------- --------------- ------------
Net investment income (loss)....................... 57,478 (1,341) 60,426 (1,346)
----------------- --------------- --------------- ------------
REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss) from investment transactions:
Proceeds from investments sold....................... 6,328 1,257 22,857 1,190
Cost of investments sold............................. 6,227 1,241 23,410 1,171
----------------- --------------- --------------- ------------
Net realized gain (loss)........................... 101 16 (553) 19
----------------- --------------- --------------- ------------
Change in unrealized gain (loss) on investments:
Unrealized gain (loss) beginning of year............. 30,962 - 47,983 -
Unrealized gain (loss) end of year................... (4,359) 30,962 (2,241) 47,983
----------------- --------------- --------------- ------------
Net change in unrealized gain (loss) for the year.. (35,321) 30,962 (50,224) 47,983
----------------- --------------- --------------- ------------
Net increase (decrease) in net assets
resulting from operations.......................... 22,258 29,637 9,649 46,656
----------------- --------------- --------------- ------------
UNIT TRANSACTIONS:
Participant premium payments............................. 1,303 1,000,000 3,937 1,003,016
Participant transfers from other Travelers accounts...... 2,571 - 143,245 -
Contract surrenders...................................... (275) - (1,804) (39)
Participant transfers to other Travelers accounts........ - - (15,098) -
Other payments to participants........................... - - - -
----------------- --------------- --------------- ------------
Net increase (decrease) in net assets resulting
from unit transactions............................. 3,599 1,000,000 130,280 1,002,977
----------------- --------------- --------------- ------------
Net increase in net assets......................... 25,857 1,029,637 139,929 1,049,633
NET ASSETS:
Beginning of year.................................... 1,029,637 - 1,049,633 -
----------------- --------------- --------------- ------------
End of year.......................................... $ 1,055,494 $ 1,029,637 $ 1,189,562 $ 1,049,633
================= =============== =============== ============
<CAPTION>
TEMPLETON BOND FUND
-------------------------
1996 1995
---- ----
<S> <C> <C>
INVESTMENT INCOME:
Dividends................................................ $ 18,730 $ 5,066
------------ ------------
EXPENSES:
Insurance charges........................................ 1,415 813
Administrative charges................................... 68 -
------------ ------------
Net investment income (loss)....................... 17,247 4,253
------------ ------------
REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss) from investment transactions:
Proceeds from investments sold....................... 155,886 62,279
Cost of investments sold............................. 160,115 59,015
------------ ------------
Net realized gain (loss)........................... (4,229) 3,264
------------ ------------
Change in unrealized gain (loss) on investments:
Unrealized gain (loss) beginning of year............. 10,933 332
Unrealized gain (loss) end of year................... 18,576 10,933
------------ ------------
Net change in unrealized gain (loss) for the year.. 7,643 10,601
------------ ------------
Net increase (decrease) in net assets
resulting from operations.......................... 20,661 18,118
------------ ------------
UNIT TRANSACTIONS:
Participant premium payments............................. 129,705 105,490
Participant transfers from other Travelers accounts...... 140,133 23,219
Contract surrenders...................................... (37,867) (20,727)
Participant transfers to other Travelers accounts........ (110,954) (49,818)
Other payments to participants........................... - -
------------ ------------
Net increase (decrease) in net assets resulting
from unit transactions............................. 121,017 58,164
------------ ------------
Net increase in net assets......................... 141,678 76,282
NET ASSETS:
Beginning of year.................................... 149,913 73,631
------------ ------------
End of year.......................................... $ 291,591 $ 149,913
============ ============
</TABLE>
-12-
<PAGE> 14
NOTES TO FINANCIAL STATEMENTS - CONTINUED
<TABLE>
<CAPTION>
TEMPLETON ASSET FIDELITY'S HIGH
TEMPLETON STOCK FUND ALLOCATION FUND INCOME PORTFOLIO FIDELITY'S GROWTH PORTFOLIO
- ------------------------------ ------------------------------- ---------------------------- ----------------------------
1996 1995 1996 1995 1996 1995 1996 1995
---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
$ 275,458 $ 19,051 $ 100,257 $ 26,362 $ 79,896 $ 19,756 $ 212,219 $ 4,488
- --------------- -------------- --------------- --------------- ------------- -------------- ------------- -------------
22,487 9,643 13,519 7,988 8,457 2,933 28,119 9,674
636 11 228 9 346 9 1,081 20
- --------------- -------------- --------------- --------------- ------------- -------------- ------------- -------------
252,335 9,397 86,510 18,365 71,093 16,814 183,019 (5,206)
- --------------- -------------- --------------- --------------- ------------- -------------- ------------- -------------
427,910 207,815 251,298 107,532 394,532 48,286 290,824 181,771
355,680 187,264 208,598 97,472 359,601 45,475 199,573 149,497
- --------------- -------------- --------------- --------------- ------------- -------------- ------------- -------------
72,230 20,551 42,700 10,060 34,931 2,811 91,251 32,274
- --------------- -------------- --------------- --------------- ------------- -------------- ------------- -------------
293,901 (19,006) 221,298 (10,005) 57,063 (924) 382,429 30,533
696,253 293,901 469,194 221,298 109,472 57,063 642,147 382,429
- --------------- -------------- --------------- --------------- ------------- -------------- ------------- -------------
402,352 312,907 247,896 231,303 52,409 57,987 259,718 351,896
- --------------- -------------- --------------- --------------- ------------- -------------- ------------- -------------
726,917 342,855 377,106 259,728 158,433 77,612 533,988 378,964
- --------------- -------------- --------------- --------------- ------------- -------------- ------------- -------------
1,321,382 895,929 644,082 619,275 527,622 317,211 2,089,604 902,843
1,213,990 812,982 446,075 222,974 1,226,656 271,515 1,889,484 1,043,981
(483,098) (268,346) (235,094) (157,512) (201,035) (83,202) (640,080) (277,564)
(282,267) (186,328) (144,347) (84,478) (172,976) (36,291) (317,899) (155,582)
- (370) - (365) - (439) - -
- --------------- -------------- --------------- --------------- ------------- -------------- ------------- -------------
1,770,007 1,253,867 710,716 599,894 1,380,267 468,794 3,021,109 1,513,678
- --------------- -------------- --------------- --------------- ------------- -------------- ------------- -------------
2,496,924 1,596,722 1,087,822 859,622 1,538,700 546,406 3,555,097 1,892,642
2,410,794 814,072 1,774,048 914,426 799,941 253,535 2,632,022 739,380
- --------------- -------------- --------------- --------------- ------------- -------------- ------------- -------------
$ 4,907,718 $ 2,410,794 $ 2,861,870 $ 1,774,048 $ 2,338,641 $ 799,941 $ 6,187,119 $ 2,632,022
=============== ============== =============== =============== ============= ============== ============= =============
</TABLE>
-13-
<PAGE> 15
NOTES TO FINANCIAL STATEMENTS - CONTINUED
6. SCHEDULE OF FUND UL OPERATIONS AND CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995 (CONTINUED)
<TABLE>
<CAPTION>
FIDELITY'S EQUITY- FIDELITY'S ASSET
INCOME PORTFOLIO MANAGER PORTFOLIO
-------------------------------- -----------------------------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends................................................ $ 109,635 $ 57,205 $ 159,369 $ 32,170
---------------- --------------- ------------------ ----------------
EXPENSES:
Insurance charges........................................ 22,379 7,158 17,144 11,730
Administrative charges................................... 811 - 161 4
---------------- --------------- ------------------ ----------------
Net investment income (loss)....................... 86,445 50,047 142,064 20,436
---------------- --------------- ------------------ ----------------
REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss) from investment transactions:
Proceeds from investments sold....................... 400,773 129,546 246,699 357,375
Cost of investments sold............................. 317,023 106,630 224,032 348,343
---------------- --------------- ------------------ ----------------
Net realized gain (loss)........................... 83,750 22,916 22,667 9,032
---------------- --------------- ------------------ ----------------
Change in unrealized gain (loss) on investments:
Unrealized gain (loss) beginning of year............. 260,001 (795) 244,927 (31,871)
Unrealized gain (loss) end of year................... 555,918 260,001 454,097 244,927
---------------- --------------- ------------------ ----------------
Net change in unrealized gain (loss) for the year.. 295,917 260,796 209,170 276,798
---------------- --------------- ------------------ ----------------
Net increase (decrease) in net assets
resulting from operations.......................... 466,112 333,759 373,901 306,266
---------------- --------------- ------------------ ----------------
UNIT TRANSACTIONS:
Participant premium payments............................. 1,546,355 745,361 819,279 807,194
Participant transfers from other Travelers accounts...... 1,927,954 762,957 265,125 466,673
Contract surrenders...................................... (479,487) (172,156) (311,604) (263,503)
Participant transfers to other Travelers accounts........ (385,897) (99,376) (200,709) (341,312)
Other payments to participants........................... - - - -
---------------- --------------- ------------------ ----------------
Net increase (decrease) in net assets resulting
from unit transactions............................. 2,608,925 1,236,786 572,091 669,052
---------------- --------------- ------------------ ----------------
Net increase in net assets......................... 3,075,037 1,570,545 945,992 975,318
NET ASSETS:
Beginning of year.................................... 2,065,974 495,429 2,381,218 1,405,900
---------------- --------------- ------------------ ----------------
End of year.......................................... $ 5,141,011 $ 2,065,974 $ 3,327,210 $ 2,381,218
================ =============== ================== ================
<CAPTION>
DREYFUS STOCK INDEX FUND
-----------------------------------------
1996 1995
---- ----
<S> <C> <C>
INVESTMENT INCOME:
Dividends................................................ $ 38,450 $ 6,430
--------------------- -------------------
EXPENSES:
Insurance charges........................................ 4,900 949
Administrative charges................................... 288 9
--------------------- -------------------
Net investment income (loss)....................... 33,262 5,472
--------------------- -------------------
REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss) from investment transactions:
Proceeds from investments sold....................... 198,684 29,459
Cost of investments sold............................. 154,606 23,404
--------------------- -------------------
Net realized gain (loss)........................... 44,078 6,055
--------------------- -------------------
Change in unrealized gain (loss) on investments:
Unrealized gain (loss) beginning of year............. 32,788 (201)
Unrealized gain (loss) end of year................... 103,469 32,788
--------------------- -------------------
Net change in unrealized gain (loss) for the year.. 70,681 32,989
--------------------- -------------------
Net increase (decrease) in net assets
resulting from operations.......................... 148,021 44,516
--------------------- -------------------
UNIT TRANSACTIONS:
Participant premium payments............................. 331,313 162,950
Participant transfers from other Travelers accounts...... 923,999 104,338
Contract surrenders...................................... (103,195) (23,466)
Participant transfers to other Travelers accounts........ (70,708) (2,423)
Other payments to participants........................... - -
--------------------- -------------------
Net increase (decrease) in net assets resulting
from unit transactions............................. 1,081,409 241,399
--------------------- -------------------
Net increase in net assets......................... 1,229,430 285,915
NET ASSETS:
Beginning of year.................................... 333,695 47,780
--------------------- -------------------
End of year.......................................... $ 1,563,125 $ 333,695
===================== ===================
</TABLE>
-14-
<PAGE> 16
NOTES TO FINANCIAL STATEMENTS - CONTINUED
<TABLE>
<CAPTION>
AMERICAN ODYSSEY AMERICAN ODYSSEY
AMERICAN ODYSSEY EMERGING OPPORTUNITIES INTERNATIONAL EQUITY AMERICAN ODYSSEY
CORE EQUITY FUND FUND FUND LONG-TERM BOND FUND
- ----------------------------- ----------------------------- ------------------------------ ---------------------------
1996 1995 1996 1995 1996 1995 1996 1995
---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
$ 3,238 $ 1,960 $ 20,349 $ 9,047 $ 2,488 $ 626 $ 2,672 $ 3,134
- --------------- ------------- -------------- -------------- --------------- -------------- --------------- -----------
312 126 1,563 670 520 270 273 102
- - - - - - - -
- --------------- ------------- -------------- -------------- --------------- -------------- --------------- -----------
2,926 1,834 18,786 8,377 1,968 356 2,399 3,032
- --------------- ------------- -------------- -------------- --------------- -------------- --------------- -----------
9,229 8,482 41,345 37,648 20,513 29,695 9,682 13,624
7,518 7,288 33,380 29,526 16,197 27,426 9,981 12,319
- --------------- ------------- -------------- -------------- --------------- -------------- --------------- -----------
1,711 1,194 7,965 8,122 4,316 2,269 (299) 1,305
- --------------- ------------- -------------- -------------- --------------- -------------- --------------- -----------
3,143 (2) 4,288 625 3,676 (1,033) (1,341) (106)
8,895 3,143 (32,337) 4,288 14,319 3,676 (2,217) (1,341)
- --------------- ------------- -------------- -------------- --------------- -------------- --------------- -----------
5,752 3,145 (36,625) 3,663 10,643 4,709 (876) (1,235)
- --------------- ------------- -------------- -------------- --------------- -------------- --------------- -----------
10,389 6,173 (9,874) 20,162 16,927 7,334 1,224 3,102
- --------------- ------------- -------------- -------------- --------------- -------------- --------------- -----------
10,768 3,391 93,912 93,588 30,054 26,719 26,241 19,931
3,481 37,760 9,776 118,650 16,031 30,284 - 24,193
(4,419) (1,806) (29,021) (16,696) (12,104) (7,735) (5,072) (3,415)
(6,488) (1,536) (25,343) (18,006) (13,400) (5,985) (5,423) (11,434)
- - - - - - - -
- --------------- ------------- -------------- -------------- --------------- -------------- --------------- -----------
3,342 37,809 49,324 177,536 20,581 43,283 15,746 29,275
- --------------- ------------- -------------- -------------- --------------- -------------- --------------- -----------
13,731 43,982 39,450 197,698 37,508 50,617 16,970 32,377
44,161 179 223,351 25,653 65,236 14,619 38,115 5,738
- --------------- ------------- -------------- -------------- --------------- -------------- --------------- -----------
$ 57,892 $ 44,161 $ 262,801 $ 223,351 $ 102,744 $ 65,236 $ 55,085 $ 38,115
=============== ============= ============== ============== =============== ============== =============== ===========
</TABLE>
-15-
<PAGE> 17
NOTES TO FINANCIAL STATEMENTS - CONTINUED
6. SCHEDULE OF FUND UL OPERATIONS AND CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995 (CONTINUED)
<TABLE>
<CAPTION>
AMERICAN ODYSSEY
INTERMEDIATE-TERM AMERICAN ODYSSEY
BOND FUND SHORT-TERM BOND FUND
------------------------------------ --------------------------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............................................. $ 48 $ 20 $ 104 $ 111
---------------- ------------------- -------------- -----------------
EXPENSES:
Insurance charges...................................... 4 1 16 12
Administrative charges................................. - - - -
---------------- ------------------- -------------- -----------------
Net investment income (loss)..................... 44 19 88 99
---------------- ------------------- -------------- -----------------
REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss) from investment transactions:
Proceeds from investments sold..................... - - 213 4,486
Cost of investments sold........................... - - 214 4,330
---------------- ------------------- -------------- -----------------
Net realized gain (loss)......................... - - (1) 156
---------------- ------------------- -------------- -----------------
Change in unrealized gain (loss) on investments:
Unrealized gain (loss) beginning of year........... (6) - (68) (1)
Unrealized gain (loss) end of year................. (23) (6) (63) (68)
---------------- ------------------- -------------- -----------------
Net change in unrealized gain (loss) for the year (17) (6) 5 (67)
---------------- ------------------- -------------- -----------------
Net increase (decrease) in net assets
resulting from operations........................ 27 13 92 188
---------------- ------------------- -------------- -----------------
UNIT TRANSACTIONS:
Participant premium payments........................... 631 408 841 3,744
Participant transfers from other Travelers accounts.... - 44 - 2,961
Contract surrenders.................................... (124) (81) (244) (516)
Participant transfers to other Travelers accounts...... - (9) - (4,055)
Other payments to participants......................... - - - -
---------------- ------------------- -------------- -----------------
Net increase (decrease) in net assets resulting
from unit transactions........................... 507 362 597 2,134
---------------- ------------------- -------------- -----------------
Net increase in net assets....................... 534 375 689 2,322
NET ASSETS:
Beginning of year.................................. 375 - 2,333 11
---------------- ------------------- -------------- -----------------
End of year........................................ $ 909 $ 375 $ 3,022 $ 2,333
================ =================== ============== =================
<CAPTION>
ALLIANCE GROWTH PORTFOLIO
----------------------------
1996 1995
---- ----
<S> <C> <C>
INVESTMENT INCOME:
Dividends.............................................. $ 43,645 $ 620
-------------- -------------
EXPENSES:
Insurance charges...................................... 4,173 14
Administrative charges................................. 461 1
-------------- -------------
Net investment income (loss)..................... 39,011 605
-------------- -------------
REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss) from investment transactions:
Proceeds from investments sold..................... 138,394 284
Cost of investments sold........................... 126,677 275
-------------- -------------
Net realized gain (loss)......................... 11,717 9
-------------- -------------
Change in unrealized gain (loss) on investments:
Unrealized gain (loss) beginning of year........... (310) -
Unrealized gain (loss) end of year................. 97,212 (310)
-------------- -------------
Net change in unrealized gain (loss) for the year 97,522 (310)
-------------- -------------
Net increase (decrease) in net assets
resulting from operations........................ 148,250 304
-------------- -------------
UNIT TRANSACTIONS:
Participant premium payments........................... 264,719 6,840
Participant transfers from other Travelers accounts.... 805,494 14,239
Contract surrenders.................................... (44,856) (568)
Participant transfers to other Travelers accounts...... (6,667) (75)
Other payments to participants......................... - -
-------------- -------------
Net increase (decrease) in net assets resulting
from unit transactions........................... 1,018,690 20,436
-------------- -------------
Net increase in net assets....................... 1,166,940 20,740
NET ASSETS:
Beginning of year.................................. 20,740 -
-------------- -------------
End of year........................................ $ 1,187,680 $ 20,740
============== =============
</TABLE>
-16-
<PAGE> 18
NOTES TO FINANCIAL STATEMENTS - CONTINUED
<TABLE>
<CAPTION>
SMITH BARNEY INCOME SMITH BARNEY HIGH AIM CAPITAL
AND GROWTH PORTFOLIO INCOME PORTFOLIO MFS TOTAL RETURN PORTFOLIO APPRECIATION PORTFOLIO
- ------------------------------ ----------------------------- ----------------------------- ---------------------------
1996 1995 1996 1995 1996 1995 1996 1995
---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
$ 5,295 $ 20 $ 8,808 $ - $ 13,265 $ 2,147 $ 580 $ -
- --------------- -------------- -------------- -------------- ---------------- ------------ -------------- ------------
664 1 1,201 - 1,350 124 1,435 -
78 - 142 - 102 1 142 -
- --------------- -------------- -------------- -------------- ---------------- ------------ -------------- ------------
4,553 19 7,465 - 11,813 2,022 (997) -
- --------------- -------------- -------------- -------------- ---------------- ------------ -------------- ------------
56,203 35 142,661 - 27,195 593 104,593 -
52,019 33 138,333 - 24,139 569 101,291 -
- --------------- -------------- -------------- -------------- ---------------- ------------ -------------- ------------
4,184 2 4,328 - 3,056 24 3,302 -
- --------------- -------------- -------------- -------------- ---------------- ------------ -------------- ------------
(1) - - - 3,089 - - -
3,968 (1) 3,819 - 18,241 3,089 17,258 -
- --------------- -------------- -------------- -------------- ---------------- ------------ -------------- ------------
3,969 (1) 3,819 - 15,152 3,089 17,258 -
- --------------- -------------- -------------- -------------- ---------------- ------------ -------------- ------------
12,706 20 15,612 - 30,021 5,135 19,563 -
- --------------- -------------- -------------- -------------- ---------------- ------------ -------------- ------------
11,790 301 16,643 - 103,152 14,644 181,988 -
220,262 1,052 265,754 - 205,454 57,736 474,076 -
(8,726) (138) (5,991) - (12,783) (705) (16,100) -
(3,243) (79) (137,360) - (10,669) (182) (78,288) -
- - - - - - - -
- --------------- -------------- -------------- -------------- ---------------- ------------ -------------- ------------
220,083 1,136 139,046 - 285,154 71,493 561,676 -
- --------------- -------------- -------------- -------------- ---------------- ------------ -------------- ------------
232,789 1,156 154,658 - 315,175 76,628 581,239 -
1,156 - - - 76,628 - - -
- --------------- -------------- -------------- -------------- ---------------- ------------ -------------- ------------
$ 233,945 $ 1,156 $ 154,658 $ - $ 391,803 $ 76,628 $ 581,239 $ -
=============== ============== ============== ============== ================ ============ ============== ============
</TABLE>
-17-
<PAGE> 19
NOTES TO FINANCIAL STATEMENTS - CONTINUED
6. SCHEDULE OF FUND UL OPERATIONS AND CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995 (CONTINUED)
<TABLE>
<CAPTION>
TOTAL RETURN PORTFOLIO COMBINED
---------------------------- --------------------------------------
1996 1995 1996 1995
---- ----- ---- ----
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends................................................. $ 6,053 $ 5 $ 2,057,986 $ 308,603
------------- -------------- ------------------- ------------------
EXPENSES:
Insurance charges......................................... 1,339 1 192,440 75,850
Administrative charges.................................... 152 - 6,926 148
------------- -------------- ------------------- ------------------
Net investment income (loss)........................ 4,562 4 1,858,620 232,605
------------- -------------- ------------------- ------------------
REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss) from investment transactions:
Proceeds from investments sold........................ 58,645 53 10,760,279 4,961,292
Cost of investments sold.............................. 52,193 51 10,228,004 4,810,313
------------- -------------- ------------------- ------------------
Net realized gain (loss)............................ 6,452 2 532,275 150,979
------------- -------------- ------------------- ------------------
Change in unrealized gain (loss) on investments:
Unrealized gain (loss) beginning of year.............. (12) - 1,954,404 (79,932)
Unrealized gain (loss) end of year.................... 32,702 (12) 3,488,881 1,954,404
------------- -------------- ------------------- ------------------
Net change in unrealized gain (loss) for the year... 32,714 (12) 1,534,477 2,034,336
------------- -------------- ------------------- ------------------
Net increase (decrease) in net assets
resulting from operations........................... 43,728 (6) 3,925,372 2,417,920
------------- -------------- ------------------- ------------------
UNIT TRANSACTIONS:
Participant premium payments.............................. 44,885 1,788 21,543,041 12,301,017
Participant transfers from other Travelers accounts....... 309,646 379 14,576,672 5,501,026
Contract surrenders....................................... (13,169) (62) (4,214,910) (1,932,840)
Participant transfers to other Travelers accounts......... (350) - (14,195,827) (5,170,119)
Other payments to participants............................ - - - (1,498)
------------- -------------- ------------------- ------------------
Net increase (decrease) in net assets resulting
from unit transactions.............................. 341,012 2,105 17,708,976 10,697,586
------------- -------------- ------------------- ------------------
Net increase in net assets.......................... 384,740 2,099 21,634,348 13,115,506
NET ASSETS:
Beginning of year..................................... 2,099 - 20,689,701 7,574,195
------------- -------------- ------------------- ------------------
End of year........................................... $ 386,839 $ 2,099 $ 42,324,049 $ 20,689,701
============= ============== =================== ==================
</TABLE>
-18-
<PAGE> 20
REPORT OF INDEPENDENT ACCOUNTANTS
To the Owners of Variable Life Insurance Contracts of
The Travelers Fund UL for Variable Life Insurance:
We have audited the accompanying statement of assets and liabilities of The
Travelers Fund UL for Variable Life Insurance as of December 31, 1996, 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, 1996, 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 UL for
Variable Life Insurance as of December 31, 1996, 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 7, 1997
-19-
<PAGE> 21
This page 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 UL for Variable Life Insurance or
Fund UL's underlying funds. It should not be used in connection with any offer
except in conjunction with the applicable Variable Universal Life Insurance
Prospectus and the Prospectuses for the underlying funds, which collectively
contain all pertinent information, including the applicable sales commissions.
VG-156 (Annual) (12-96) Printed in U.S.A.
